Novatti Group (ASX:NOV) ATX acquisition, October 2021


by Melissa Darmawan

Novatti Group Limited (ASX:NOV) CEO Peter Cook talks about the acquisition of leading Southeast Asian fintech ATX.

Melissa Darmawan: Hello. Melissa Darmawan for the Finance News Network. Joining me today is Peter Cook from Novatti Group (ASX:NOV). Peter, welcome back, and nice to see you again.

Peter Cook: Melissa and Fin News Network, hello.

Melissa Darmawan: Novatti has just announced the acquisition of a Malaysian based company. Tell us about the news and what it's all about.

Peter Cook: Melissa, we've announced the acquisition of a company called ATX. ATX is actually a company that Novatti's worked with since 2015, so six years, and we've provided technology to their underlying business, doing bill payments and topping up of mobile phones and digital wallets. ATX is a really strong fintech. It's been very well recognised in Malaysia as one of their top fintechs. It's got reach out to about 30,000 retail outlets, including an arrangement with Malaysia Post. So, it's serving digital payment services such as, as I said, bill payments and other third-party payment services. A lot of synergies with Novatti and a really strong management team led by Sashi Kumar and Kelly Koh, who we've worked with for the last six years. So, we know them really well, which we think de-risks the acquisition.

Melissa Darmawan: Thanks, Peter. Can you give me an idea on the financials of ATX?

Peter Cook: In the recent past, their revenue in Australian dollars is about $3 million, and, on a normalised basis, a profit of about $600,000. We're going to apply some capital to the business, and we think we can get it to continue growing at sort of 50 to 60 per cent per annum. And in terms of the real effect on Novatti, I mean, adding $3 million plus of revenue right now, well, on last year's figures, would have been about an 18 per cent uplift in our revenues. So, it's really a nice-sized financial acquisition.

Melissa Darmawan: So, touching on your expansion in Southeast Asia, can you tell us a bit more about the outlook ahead?

Peter Cook: So, I think, for the absolute long-term capital value of our business, as a payments and banking services company, you want to scale up. And the extension of our footprint, both with licences and operations into other countries and geographies will really add to the, let's call it, the super long-term value of the business. So, we've launched services in the US, we've launched services in Europe. This really extends that and just allows us to scale up our operations and some of our cross-border services, and even our issuing services, for instance, or acquiring services, into that new geography.

Melissa Darmawan: Lastly, Peter, how are the operations going in the business generally?

Peter Cook: We have had a really strong first quarter. The company is essentially bringing through revenues from a number of lines of business -- issuing, acquiring, cross border payments, subscription, billing. We've been able to build out our sales teams, and really have a great increase of resources, building momentum with clients. And our clients are either other fintechs and banks, or directly serve merchants. And we've had very strong growth in both, so that augurs well for our sales figures in the quarterly due next week. But also, we're extending our work in licensing. We're extending our work in technology development, integration to other partners. We've been able to have some great inter-working with Reckon to be able to, hopefully, address some of their client needs, in time. So, in an operation sense, there is a lot happening and just some really good results coming through.

Melissa Darmawan: Peter Cook, congratulations on the acquisition, and nice to hear from you again.

Peter Cook: And Fin News Network and your viewers, thank you very much.


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