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Findi reports strong operating results

Findi (ASX:FND) has announced robust financial results for the first half of 2024 (1H24), showcasing impressive revenue and earnings growth. Findi Limited Chairman, Nicholas Smedley, expressed optimism about the company’s performance, highlighting significant progress in their strategic endeavors, particularly in India.

Key Financial Highlights

Findi Limited reported a statutory revenue of $31.757 million for 1H24, marking an impressive increase of 30.2% compared to the same period last year. The company’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) surged by a remarkable 84.4% to reach $12.648 million on a year-over-year basis. Operating cash flows for the six months ending September 2023 saw substantial growth, amounting to $19.401 million compared to $4.7 million for the entire 12 months ending March 2023. Statutory net profit after tax for 1H24 reached $1.098 million, a substantial increase from $0.190 million in the same period the previous year. Basic earnings per share (EPS) stood at 3.0079 cents per share, up from 0.0605 cents per share in 1H23.

Chairman Nicholas Smedley acknowledged the company’s remarkable performance and attributed it to their strategy of becoming a full-service digital bank in India, one of the world’s largest developing markets. Smedley also emphasised the significance of retaining and extending their contract with the State Bank of India, a pivotal step in their long-term strategy in India, allowing Findi to build greater scale and strengthen its competitive position.

Operational Highlights

During the first half of 2024, Findi secured a significant 10-year contract with the State Bank of India (SBI), which is expected to generate revenues of up to $620 million. Under this agreement, Findi will deploy 4,219 ATMs across India. Previously, Findi had been providing ATMs for SBI through a third-party outsourcing contract that was set to expire in December 2023. Now, the company will enter into a direct contract with SBI, India’s largest bank, with the ATMs primarily being placed at existing service sites. This arrangement is expected to expedite customer transaction volumes. Findi now boasts a network of over 20,500 ATMs in India, solidifying its position as one of the largest non-bank ATM operators in the world’s most populous country.

The contract with SBI will be executed by Findi’s wholly-owned subsidiary, Transaction Solutions International (India) Pvt Ltd (TSI India), and it is anticipated to be fully funded from the company’s free cash flow and new bank facilities.

Events Subsequent to 30 September 2023

Post the reporting period, Findi announced that its Indian subsidiary, TSI India, successfully raised $37.6 million through a placement to Piramal Alternatives, a leading Indian investment group. These funds are in the form of Compulsory Convertible Debentures (CCD) that will convert to equity at the time of TSI India’s IPO. This strategic move has positioned TSI India with a pre-IPO market capitalisation of $153.0 million (post-money $190.6 million), aligning with TSI India’s intended listing on the Bombay Stock Exchange. The capital injection will be utilised to accelerate Findi’s strategic initiatives, including acquisitions, expanding FindiPay digital payments business, deploying white-label ATMs (subject to approval from the Reserve Bank of India), and further expanding their merchant and ATM network.

FY24 Outlook & Guidance

Findi is confident in its outlook for the full fiscal year 2024 (FY24), reaffirming its previously stated guidance:
Revenue: $67.3 millionEBITDA: $23.6 millionOperating cash flows: $20.6 millionWith a strong financial performance in 1H24 and promising strategic developments, Findi Limited appears well-positioned to achieve its goals and continue its growth trajectory. Investors and stakeholders can anticipate a dynamic and evolving company in the digital banking and financial services sector.

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