Buy now pay later company Laybuy is growing its business at the expense of consumers who can’t afford its credit product.
Late fees accounted for 43 per cent of total revenue in the six months to September, almost unchanged from the previous corresponding period.
The company said the high rate of late fees was due to its recent entry into the UK market, where it is still establishing itself and developing its credit processes.
It said: “New Zealand has significantly lower levels of late fees as a percentage of income compared to the UK, reflecting the relative stages of maturity in these markets. As our position in the UK market becomes more established, management believes that the rate fees will reduce to similar levels experienced in New Zealand.”
Laybuy reported income of NZ$21.2 million for the September half, compared with NZ$13.3 million in the previous corresponding period.
Expenses rose 23.5 per cent to NZ$38.8 million. Included in that was a consumer receivables impairment expense of NZ$10 million – up from NZ$6.5 million in the previous corresponding period.
Cash outflow was NZ$28.6 million, compared with cash outflow of NZ$23.4 million previously. The company has cash and cash equivalents of $22.9 million.
Laybuy made a loss of $22.6 million, compared with a loss of $26.4 million previously. Its auditor, PwC reviewed the accounts but did not audit them.
The company said its gross merchandise value increased 60 per cent year-on-year to NZ$782 million.
Active customer numbers grew 57 per cent to 889,000 (566,000 in the UK and 322,000 in Australia and New Zealand). Active merchant numbers grew 86 per cent to 11,700 (2900 in the UK).
The company increased its funding, with Kiwibank increasing its facility limit from NZ$20 million to NZ$30 million, of which NZ$11.5 million was drawn at September 20.
Its UK funder is Partner for Growth, which is providing a facility limit of NZ$30 million.
During the half, the company launched Laybuy App Exclusives in the UK, which it described as an affiliate marketing network.