Shares in Afterpay slowed their rapid rise of recent days yesterday despite the buy now pay later company revealing a solid set of results for the year to June and plans for more expansion this financial year.
In a result that was largely revealed in recent updates, the buy now, pay later provider reported a 97% increase in revenue to $519.2 million and a smaller loss of $22.9 million compared to a $43.8 million loss for the June 2019 financial year.
Afterpay said the strong performance from its fourth-quarter has continued into the current financial year across all regions.
“Online sales in ANZ (Australia and New Zealand) accelerated into July and August,” the company said.
And the company was upbeat on how it has so far performed in the COVID-19 slowdown in the economy though retail sales growth continues to soar, being up 12.2% in July from July 2019.
“While remaining cautious in our ongoing response, it is clear that Afterpay’s predominantly e-commerce and budgeting focused service has been a net beneficiary of the significant shift to online spending and the shift away from traditional forms of credit,” the company said in its announcement on Thursday.
Underlying sales jumped 112% to $11.1 billion. These are sales by retailers financed by the buy now pay later system.
The company reported increased repeat usage and a 116% lift in active customers to 9.9 million.
As well as launching in Canada and Europe, management revealed that it is looking into expanding into select Asian markets in 2020-21.
“While remaining cautious in our ongoing response, it is clear that Afterpay’s predominantly e-commerce and budgeting focused service has been a net beneficiary of the significant shift to online spending and the shift away from traditional forms of credit,” the company said in its announcement on Thursday.
Afterpay said it will further accelerate its investment for growth this financial year and said new markets are tracking in line with its growth blueprint in ANZ with customers transacting more frequently the longer they are on the platform.
It says that around 90% of underlying monthly sales come from repeat customers.
Last month the company raised $800 million to fund its growth (which coincided with a $250 million share sale by founders Anthony Eisen and Nick Molnar).
Last week the company upgraded its guidance saying a fall in transaction losses has lifted the net transaction margin to 2.25% as opposed to the 2% it forecast last month.
Afterpay said this margin improvement lifted earnings before interest, tax, depreciation and amortisation (EBITDA) excluding significant items to $44 million. The company had previously forecast a range of $20 million to $25 million.
The shares broke through the $90 barrier for the first time this week and closed on Thursday at $91.26, up a sedate 0.6% (compared to previous days).
