Buy now pay later contender Laybuy has released its first financial report since listing on the ASX three months ago, with strong growth in most metrics over the six months to September.
Laybuy, which was launched in New Zealand in 2017, raised A$80 million from its initial public offering and was listed with a market capitalisation of $246 million.
At September 30, the company had 568,000 active customers, an increase of 315,000 compared with the previous corresponding period.
Active merchant numbers of 6323 were up 48 per cent on the previous corresponding period.
Gross merchant value was up 167 per cent to NZ$244.8 million, income grew 151 per cent to NZ$13.3 million and the net transaction margin was 1.7 per cent.
The net transaction margin is a key metric for BNPL companies, with the market leaders targeting NTMs of 2 to 2.5 per cent.
In Laybuy’s case, the margin has bounced around. An NZ$9.2 million impairment expense left it with no margin in 2019/20, while the margin was 2.2 per cent in 2018/19 and 1.1 per cent in 2017/18.
The company made a loss of NZ$26.4 million, compared with a loss of NZ$5.3 million in the previous corresponding period. The company said it is investing for future growth, with big increases in platform development, employment and marketing expenses.
There was also a big increase in the receivables impairment expense, which rose from NZ$2.9 million in the September half last year to NZ$6.5 million in the latest half.
The financial report said: “Laybuy aggressively entered the UK market in June 2019 and experienced both a high degree of both customer credit default and fraudulent transactions through its platform.”
It said credit performance improved through the half.
Another key metric is repeat business because “greater purchasing frequency reduces defaults as the bad actors are filtered out.” The company said its New Zealand active customers are purchasing 15.7 times a year.
Seventy per cent of Australian and New Zealand active customers and 56 per cent of active UK customers are repeat customers.
In addition to the A$80 million it raised from its IPO, the company has a NZ$20 million facility with Kiwibank and an £80 million debt facility with Victory Park Management.