Buy now pay later company Splitit has moved to reassure investors, business partners and consumers that it remains a going concern, despite reporting mounting losses, cash outflow well in excess of cash on the balance sheet and a substantial debt load.
Splitit’s financial report for the year to December shows a loss of US$39.7 million (up from US$25.5 million in 2020) on income of US$10.5 million (US$6.7 million in 2020).
The impairment expense rose fromUS$957,000 in 2020 to US$3.8 million last year.
Net cash outflow from operating activities was US$52.4 million, compared with outflow of $63.1 million in 2020.
The company had cash and cash equivalents of US$28.9 million at December 31, down from US$92.8 million a year earlier.
It has debt of US$64 million and paid interest and other finance costs of US$10 million last year – only a little less than total income.
The company said in its financial report that it has US$78.1 million of current receivables and US$83.6 million undrawn on a credit facility.
It said it is actively engaged with its lender Goldman Sachs to expand the terms of the facility and reduce internal cash outflow requirements of forecast receivables origination. And it said it can take steps of cut costs.
On the operational side, merchant sales volume rose 61 per cent to US$396 million, active merchant numbers rose 60 per cent to 1250 and active shopper numbers rose 30 per cent to 330,000.
Splitit provides a variation on the standard buy now pay later offering. It allows consumers to use an existing credit card to pay for purchases on an instalment basis, with no fees or interest.
It has network links with Mastercard, Visa, UnionPay and Discover
It is listed on the ASX but does most of its business in the United States, with a smaller operation in Europe and a very small presence locally.