Editor’s note: Humm Group issued a statement saying that the stop order was revoked this week, allowing new customers to sign up for BNPL services.
In Australia last week, regulators issued a stop order for new BNPL customers at Humm Group over concerns about the “target market determination” or product suitability for its stated target customers. This week, these later, Humm Group announced the order was revoked by regulators, allowing the companies BNPL products to be offered to new customers again. As industry headwinds grow, BNPL companies are under closer scrutiny from regulators and investors this year.
A proposed AU$250 million cash and shares sale of the consumer business of Humm Group to Latitude failed in June last year, and the Chair and several directors resigned, prompting a leadership shakeup. The company’s consumer BNPL business suffered growing losses as the entire industry struggled with competition, rising interest rates, and looming regulations. Predictably, shares have dropped 13% while the company responds to the Australian Securities and Investments Commission.
Despite the recent regulatory stumble, Simply Wall St notes H1 2023 revenue was down 18% over H1 2022. However, Humm Group earned net income of $7.5 million compared with a $168.3 million loss in H1 2022. New CEO Stuart Grimshaw takes over on June 1 with big company and industry challenges ahead.
Interim stop order for Humm’s BNPL products revoked
Australian fintech company Humm said an interim stop order issued by the country’s corporate regulator restricting it from issuing buy-now-pay-later (BNPL) products to new customers had been revoked. The interim stop order issued last week was due to Australian Securities and Investments Commission’s (ASIC) concerns regarding the target market determination for its BNPL products. The company’s BNPL product is again available to new customers following the revocation. Reuters
Humm Group ordered to stop accepting new BNPL customers
Humm Group’s (ASX: HUM) buy-now pay-later (BNPL) subsidiary has been ordered to stop accepting new customers after the financial watchdog raised concerns about the product’s suitability. Humm BNPL has been restricted by an interim stop order issued by the Australian Securities and Investments Commission (ASIC), which prevents the ability to provide the BNPL product to new customers. The fintech assured investors the company could continue to service existing BNPL customers to whom the product has already been provided. Business News Australia
Buy now, pay later lender Humm Group sanctioned by ASIC
A popular buy now, pay later service has fallen afoul of the powerful finance watchdog amid internal upheaval. The Australian Securities and Investments Commission slapped the Humm Group with a stop order over concerns about a document explaining the lender’s target market. Issuers must also detail how their products will be monitored and reviewed and determine if those products are consistent with their customers’ likely objectives, financial situation and needs. News.com.au
Australia issues interim stop order for Humm’s BNPL products, shares drop
Australia’s Humm Group (HUM.AX) said it got an interim stop order from the Australian Securities and Investments Commission (ASIC) restricting it from issuing buy-now-pay-later products to new customers. The company’s shares dropped nearly 13%. The interim stop order relates to concerns regarding the target market determination for the company’s BNPL products, Humm said in a statement. According to IBIS World, Humm is Australia’s third-largest BNPL provider, with about 14% market share. Reuters
Humm Group (ASX:HUM) First Half 2023 results
What do the numbers look like for the recently sanctioned Humm Group? Over three years, investors have lost 72%, reflecting the competitive marketplace and headwinds for the BNPL industry overall. Here are the 2023 numbers: Revenue: AU$130.5m (down 18% from 1H 2022); Net income: AU$7.50m (up from AU$168.3m loss in 1H 2022); Profit margin: 5.7% (up from net loss in 1H 2022); EPS: AU$0.011 (up from AU$0.34 loss in 1H 2022). Simply Wall St
Humm CEO Rebecca James steps down, former BOQ boss to take over
Humm (ASX: HUM) CEO Rebecca James has announced she will step down after leading the fintech for five years, with former Bank of Queensland (BOQ) chief executive Stuart Grimshaw to take over as top boss next month. In an ASX announcement, James revealed she accepted a new job in New Zealand to be closer to family and would remain in her role until the end of May. Business News Australia
Humm Group (ASX:HUM) investors are sitting on a loss of 72% if they invested three years ago
So spare a thought for the long-term shareholders of Humm Group, where the share price is down a whopping 75% in the last three years and 43% in the past year. With that in mind, it’s worth seeing if the company’s underlying fundamentals have been the driver of long-term performance or if there are some discrepancies. Over the three years that the share price declined, Humm Group’s earnings per share (EPS) dropped significantly, falling to a loss. Extraordinary items contributed to this situation. Yahoo Finance
Humm chairman, directors walk away in the wake of Latitude deal collapse
Most of Humm’s (ASX: HUM) board has quit following the collapse of a $250 million cash-and-scrip deal with consumer finance group Latitude (ASX: LFS). The transaction, which would have seen Humm’s BNPL consumer business handed over to LFS, was ditched five days ago by mutual consent despite most of HUM’s board supporting the deal. In an ASX announcement, the majority of directors said they could not remain on the board with Humm founder and shareholder Andrew Abercrombie, who believed the deal was undervalued. Business News Australia