The share price of QuickFee Ltd [ASX:QFE] started trading in the red today, after releasing their business update for the first quarter of this financial year.
The fintech is already showing acceptable growth for the current financial year, though perhaps not as much as investors were anticipating.
At time of writing, shares are trading at 46 cents, down 4.17% from yesterday. But they dropped to as low as 44 cents within the first hour of trading.
QuickFee growing in FY20
The QuickFee quarterly update shows that at the very least, the company is not moving backwards.
The update showed that lending in Australia is up 17% from Q1 FY19, reaching $10.9 million. 70 Australian firms signed up to the QuickFee platform within the three months ending 30 September.
In the US, lending is up an impressive 77% for the same period, growing from $1.8 million to $3.2 million. The quarter saw 77 US sign-ups onto the QuickFee platform.
This ‘organic growth’ is quite a feat for the US market, considering ‘recent additions to the sales teams have yet to contribute materially to our lending activity’, says QuickFee CEO Bruce Coombes.
He is referring to the two new sales reps added to the US team at the end of the quarter, in addition to the two added back in July.
QuickFee customers happy
We’ve talked about our thoughts on QFE previously.
Their business model, which does not rely on retail customers, gives them a significant point of difference within the saturated fintech market.
Their aim is to ensure law and accounting firms are never paid late by their clients.
As QFE pointed out in the FY19 investor presentation, a lot of firms have clients paying over 60 days after a service has been provided. This creates a working capital issue, as firms tend to pay staff on a monthly cycle.
QFE help with this process by providing loans to clients, who then need only repay QuickFee rather than the firm itself.
In doing so, they’ve managed to reduce the average accounts receivable for professional service firms by 56% to just 29 days.
What’s more, QFE’s key customers seem to be responding well to the platform.
In a survey of over 4,000 clients of accounting and law firms, 92% found the QuickFee loan process easy, and 94% intend to use the platform again in the future.
So their customer retention and satisfaction is promising.
A key priority for QFE in FY20 will be to continue growing their loan book in both Australia and the US.
For Money Morning