Strong growth continuing in Q3 2022
In Q3 PURO’s growth continued strong from previous year with 66% growth in Quarterly Recurring Revenue (QRR). This spurred our year-to-date turnover to 3,3 m eur, with an impressive 71% rate of growth from 2021. Yet the monthly customer activity has somewhat levelled off from June highs in especially the larger customer segments. This, we feel, is mostly due to rocketing inflation and other disturbances in the market affecting our customer base. 100 m eur of customer invoicing was financed in Q3, matching the equal number of the previous quarter.
80 new customers were onboarded during the period. Close to one quarter of monthly revenue in September came from customers onboarded during this year. This is no mean feat as the sales organization FTE-wise has been smaller than in 2021. First drops of revenue were also gained from new revenue streams as both the pilot for Accounts payable financing as well as the Software business model, where we offer a SaaS service for other financiers, accelerated in volume.
Preparing for a foggier economic environment in the following quarters
The plateaued customer activity after summer holiday period saw our loan receivables decrease from June high by 15% amounting to 24 m eur. This was met with an equal decrease in short-term overdue receivables with 1-30 days overdues decreasing from 4.0 to 2.1 m eur. The longer overdues (30+ days) unfortunately continued to increase from 1.9 to 2.6 m eur with a few elevated risk positions within our portfolio. Therefore we doubled the loss provisions for the year with an equal 100 t eur provision booking made in September as in June.
We have responded to the challenges both within our customer portfolio and elsewhere in the market with tightening our credit policy. Elevated scrutiny in customer selection as well as higher demand for personal quarantees, outsourced collection and use of credit insurance are means for us to live up to our fundamental promise for sustainable and profitable growth albeit sacrificing a portion of our growth potential.
Due to the loss provisions the profitability in Q3 somewhat dipped with EBIT (39%) and PBT (6%), yet the year-to-date profit remained clearly above the annual target.
News on strengthening our financial position
Regarding our financial position we closed a financing arrangement with Finnish financial institutions during the quarter. Furthermore, we are on the closing stages of securing a major debt financing agreement with a large Nordic investment company while also preparing an equity round to boost our capital by the end of this fiscal year.
We anticipate the cost of funds to increase in the coming period due to market interest hikes. As a result we have communicated to our customers that we will increase our pricing from 1 December which will secure the positive development of our bottom-line as well as our commitments to our shareholders.
Interesting news in the pipeline
In Finland we will be extending our partner network with a major player which we hopefully can communicate soon. In Sweden the progress on achieving the needed permits and setting up bank accounts has been hopelessly slow but now we are proceeding with full steam. The first Swedish invoices will be financed still in Q4 while 2023 will be our break-though there.
It will be an extremely busy period until the last day of the year and also a difficult one especially to many of our customers with so many uncertainties in the world right now. Our promise is to push through, take good care of our customers and continue with our commitment to profitable and sustainable growth.
PURO Finance Oy
Contact:
Junno Roine, CEO, junno@puro.finance, +358 50 522 6037
Juho Väinölä, CFO, juho@puro.finance, +358 50 573 6427
Read our previous interim reports on our Investor page!