PayGroup Ltd (ASX: PYG) provided a sales update for the FY21 to the market today, sending the share price higher. The PayGroup share price closed the day up 13.45% at 67.5 cents.
The human capital management (HCM) solutions provider noted some record numbers for the business for FY21. Let's take a look at them.
What's driving the PayGroup share price up?
Sales growth
For the 9 months to 31 December 2020, PayGroup experienced significant sales growth. More specifically, the company reported signing a total contract value (TCV) of $8.2 million for FY21 period to date.
This indicates a 200% increase in TCV compared to the prior corresponding period. Similarly, this represents an increase of 149% on FY20 total combined sales.
PayGroup noted that 34% of the total $8.2 million TCV was signed during the most recent quarter. Management puts this milestone down to overall success across all business divisions of the group. Reportedly all contracts signed during this time are for a secured minimum 3-year term.
The new contract sales have also added 115 new client entities to the group, 37 of which are derived from PayGroup's Australian subsidiary AstuteOne.
Acquisition performance
In addition to the sales update, PayGroup also provided details on the performance of the recent acquisitions of TalentOz and Payroll HQ. Stating that these acquisitions have further cemented the group's payroll and HCM capabilities across Australia, Malaysia, and New Zealand.
Reportedly, both acquisitions have provided sales growth to the group through their continued integration. The group intends to seek out further growth opportunities for TalentOz and Payroll HQ heading into FY22.
The PayGroup share price has increased by 21.6% since it announced the completion of its TalentOz acquisition.
Looking ahead
PayGroup managing director Mark Samlal welcomed the results, saying:
We continue to break the group's sales records quarter on quarter. It is most pleasing that the contribution comes from all parts of the PayGroup network and business divisions – including our Global Partner Program and recent strategic acquisitions, both which continue to deliver strong results.
PayGroup is committed to expanding our global sales channels to sustain the momentum generated in FY21, and our strong sales is a direct indication of our top line growth ambitions – with recent contract signings impacting not just FY21, but our forward planning for FY22 and beyond.
