This small cap is zooming higher today…
The post Why the Cirralto (ASX:CRO) share price is zooming 25% higher today appeared first on The Motley Fool Australia. –
The Cirralto Ltd (ASX: CRO) share price has been among the best performers on the ASX on Thursday.
At one stage today, the transaction services company’s shares were up as much as 25% to 7 cents.
The Cirralto share price has eased back since then but remains 14% higher at 6.4 cents at the time of writing.
Why is the Cirralto share price surging higher?
Investors have been bidding the Cirralto share price higher today following the release of a couple of positive announcements.
According to the first announcement, the company has signed a five-year referral agreement with payments giant Mastercard.
Under the terms of the agreement, Mastercard may introduce potential sales leads and business opportunities to Cirralto and will receive a trade facilitation fee for each successfully on boarded customer. Cirralto will retain at least 70% of the gross profit margin on each customer contract.
Cirralto’s CEO, Adrian Floate, said: “We are very excited to announce that we have signed an agreement with Mastercard, with whom we have developed a very strong relationship between 2020 and 2021.”
“This Agreement serves as a strong validation of what we are doing while also providing us the opportunity to potentially access a significant customer base. The solutions we will provide to Mastercard customers provide the Company with a fantastic opportunity to rapidly scale its business and grow within Australia and abroad,” he added.
Also giving the Cirralto share price a boost was a second announcement of another five-year referral agreement.
This time it is with data layer specialist Fresh Supply Co. It captures operational farming data from a variety of sources and makes it consumable by the financial sector.
This deal will see Cirralto provide trade finance solutions and integration services to business customers, in addition to merchant on record payment services via existing arrangements.
Management notes that providing the agricultural industry access to trade finance reduces the risk of non-payment and improves efficiency and cash flow for both the buyer and seller. This enables farmers to get paid when specific milestones are met in the paddock-to-plate supply chain.
Mr Floate commented: “Working with Fresh Supply Co to help Aussie farmers is very humbling. By utilising our flexible payment solutions and the data mining technology intrinsic in Fresh Supply Co’s business, we are able to positively impact Australia’s Agricultural industry to drive improved cash flow and better business growth for those businesses.”
Following today’s gain, the Cirralto share price is up 60% since the start of the year.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.