Ouch down 39.0% today - pdf (markitdigital.com)

Never looked expensive at any point either, just not a high quality business in the slightest. The start of more pain in the financials space?

Hardly ever good news - 45jhdmm77hqy54.pdf (asx.com.au)

Wonder if its related to the collapse of Clough in equipment financing or something complety different.

This is part of the transcript from Earlypay's earnings call on 25 August. Does this address your comment @OUTSIDEcapital ?

Grace Fitzsimmons

Thanks, Daniel, and thanks Steve and James. We'll just go to some questions that have been submitted. First one, is there any truth to the rumor that Earlypay has been unable to settle some new deals recently due to lack of access to funding?

Daniel Riley (CEO)

No. But what we have done, though, we've put a limitation on the volume of Equipment Finance loans that we are willing to do as a business. And I think we've reiterated that point through this presentation that we are very confident in the robustness of invoice and trade finance but putting 5-year loans out when trading conditions are uncertain, we don't think is sensible.

And so we have put a limitation on the volume of new business that we're willing to write for Equipment Finance that doesn't relate to Invoice Finance client. So if it's just a stand-alone Equipment Finance transaction without an Invoice Finance customer attached to it, then yes, that's where we're looking very carefully at what sort of volumes we're willing to write.

Earlypay business' sounds similar to what Greensill was doing (supply chain finance) before that collapsed last year.

However, unlike Greensill, Earlypay's core business is invoice finance where they give a service that allows customers to unlock funds from unpaid invoices, thus allowing clients to use some of their accounts receivables as secuirty.

Surprisingly, Earlypay is profitable and is more concentrated around smaller to medium sized businesses. They also have a growing tech platform that appears to be scaling well as they get more clients.

Main concerns going forward from a macro level:

With interest rates going up, will there suddenly be less clients using their service because those clients close down as a result of rising costs and inflation?

How will high interest rates affect margins? (from the Feb 22 call transcript it appears they can pass on any interest rate rise to customers)

All in all, an interesting business but not sure how the macro picture will play out.

FY22 NPATA upgraded to $14m from $13m - but stat NPAT will be circa $12.5m because of a $1.5m amortization. There are now 279.668m shares on issue which translates to a 4.47c eps. Dividends stated to be 60% of NPATA or 3c ff dividend

I'm tipping a 1.5C ff INTERIM dividend upon declaring half yearlies - ex date mid March.

Yeah! I'm not sure the headline grabbing FY21 +50% is as good as it sounds - particularly when you take into consideration the extra 44m shares issued on 1st July - from my take, the register now has 277.846m shares with 10m unlisted options.

?So the underlying NPATA for FY21 was $8.7m with a non cash amortization charge of $1.5m giving us a stat NPAT of $7.2m (rounded)

?There will be another $1.5m amortization charge this year (FY22) as well.

?Let's work this through

?NPATA of $8.7m x 1.5 = $13m less the amortization of $1.5m = stat FY22 NPAT of $11.5m or an eps of 4.14c and I would suggest a 3c divvy which grosses to 4.28c

Still @ 46c and with an in demand financial product suite and likely further growth + corporate play prospects + good grossed up dividend, its worthy of a hold.