Butn Limited, an ASX-listed company that provides fast and secure funding for small and medium-sized enterprises (SMEs), has released its quarterly activities report for the three months ended December 31, 2022 (Q2 FY23). The report showed that Butn achieved its third consecutive quarter of record originations in Q2 FY23 of $112.0 million, an increase of 73% on the previous corresponding period (pcp) and 10% on the prior quarter.
Co-founder and Co-CEO Rael Ross commented on the results, saying, “Butn continues to deliver sustained record performance, with originations at record levels for both the quarter and the month of December.” Ross went on to add that the company’s business delivered quarterly revenue double that of the previous corresponding period, demonstrating the growing need for their fast, secure, and reliable funding for SMEs facing challenging market conditions.
The report also highlighted that December’s monthly originations were $39.3 million, the eighth record origination month in the past nine months, underlining the growing momentum in the business. The sustained growth reflects Butn’s strong relationship with its platform partners, growth of distribution channels, and the increasing awareness of its product offering in the SME community.
Furthermore, Butn’s revenue margin increased to 2.6%, up from 2.1% in the pcp, reflecting a significant improvement in industry mix to higher-margin segments, increased contribution of higher-margin platform originations, and pass through of some pricing adjustments. This saw Q2 FY23 revenue of $3.0 million, an increase of 119% on the pcp.
Momentum in the Butn platform continues to accelerate with platform origination growth a consistent and increasing component of Butn’s overall origination levels. In December, platform originations were a record $10.9 million, approximately 28% of that month’s total originations, demonstrating the significant benefits of Butn’s embedded funding technology in leveraging and deepening existing strategic partnerships.
This includes the MYOB partnership, which is growing strongly, with Butn continuing to roll out its platform solution to a broader MYOB business user base during the quarter. The Q2 FY23 platform originations exceeded $29 million compared with approximately $3.6 million in the pcp, reflecting the rapid growth and future potential of this distribution channel.
The report also revealed that at the end of December, the company’s cash on hand was $11.0 million, providing Butn with continued financial flexibility. In October, the company raised $11.4 million of debt from Noteholders under a new 2022-1 bond. Based on Butn’s fast turning receivables book of approximately 6 times per year, the funding will provide around $68 million of additional annual origination capacity. This debt funding increases Butn’s total debt funding to over $73 million, an increase of over 60% on the pcp.