Driven by an expansion of revenue from key strategic partnerships, Spenda Ltd (ASX:SPX, OTC:CROTF) has recorded total revenue of A$2.7 million in the first half of FY24, up 102% on the previous corresponding period (pcp).
Revenue from lending was up 30% on the pcp to $1.4 million and other revenue, which included payments and implementation fees, was up 52% on the pcp.
Spenda, an integrated business platform that enables businesses across the supply chain to sell better and get paid faster, also recorded gross profit of $1.6 million, up 138% on the pcp, reflecting higher gross margin projects.
Expansion of revenue
The company said it had achieved this growth due to a significant expansion of revenue from its key strategic customers, including milestones achieved with Capricorn.
READ: Spenda inks 10-year software and e-commerce payment infrastructure agreement with Capricorn
Further revenue and earnings growth is expected in the second half of FY24.
Managing director Adrian Floate said: “Over the past six months, we have laid the foundations to build a unique payments business with the potential to generate high margin, recurring revenue from long-term customer contracts.
"Our first half results only include the very early revenue contribution from these contracts, together with the costs associated with the contract acquisition and onboarding of new customers.”
"Over time, we expect to accelerate growth through layered revenue streams across customers in different industry verticals and we expect continued growth in revenue and earnings in 2H FY24.”
Partnership agreements
During the past six months, Spenda signed several partnership agreements which have the potential to transform its revenue and earnings growth trajectory over the years ahead, through the layered revenue streams from B2B and B2C payments and B2B supply chain finance, across different customers and across different verticals.
In December, the company announced a 10-year Master Services and Licence Agreement (MSLA) with Capricorn for the provision of software and ecommerce payments infrastructure and a partnership with eBev to offer integrated payments solutions across the hospitality supply chain.
The financial contribution of these new partnerships is expected to increase from the current half onwards, however, expenses were incurred to secure these new contracts.
Expenses increase
EBITDA loss of $3.1 million in 1H FY24, represented an improvement of 10% on pcp, while operating expenses increased 14% to $5.4 million, compared to $4.7 million, which reflects the upfront investment required to onboard and roll out new customer contracts.
Operating expenses included $880,000 in share-based payment expenses, being non-cash in nature.
Higher depreciation and amortisation, up 20% on pcp, and interest expense, up 98% on pcp, resulted in a marginal increase of 8% in the loss after income tax from 1H FY23.
Spenda's cash balance of $6 million at December 31, 2023, has increased following a $7.2 million private placement in January 2024.
Programs of work
This half, the company is focused on the roll-out and ramp-up of programs of work with Carpet Court, Capricorn, eBev and AirPlus with the additional revenue streams expected to lead to continued growth in revenue and earnings.
Spenda is delivering terminals to Carpet Court franchise stores to increase the B2C payment flow through its platform and expects B2B and B2C payments volumes and associated revenues to scale further moving forward.
The company is also working closely with Capricorn to customise its payments infrastructure for use by Capricorn’s members and preferred supplier network over the next six months. The onboarding of the initial cohort of suppliers is expected to begin in mid-2024.
READ: Spenda to deliver integrated payments solutions across hospitality supply chain
With eBev, Spenda is integrating its payment solutions with that platform to capture B2B payment flow and B2C payments. The first phase of the commercial rollout to 100 initial clients is expected in the second half of FY24.
In November, Spenda signed a payment processing agreement with international corporate payment specialist, AirPlus, to jointly offer a virtual card product. The company has started rolling out the AirPlus facility to select new customers.