Zip Co sought to assure investors at its 2022/23 results briefing yesterday that it has sufficient cash in reserve to get it to a positive cash flow position, despite its heavy cash outflow during the year. At June 30, the company had cash and cash equivalents of A$151.9 million, down from $241.3 million a year earlier. Much of that cash is restricted because of covenants on securitisation vehicles, leaving $57.3 million of available cash and liquidity. This is only a fraction of the $225 million of net cash flow used in operating activities during the year to June. The company’s view is that after a year of rationalisation, it has an Australian and New Zealand division generating positive EBTDA and the American business whose EBTDA loss was greatly reduced over the year and is poised to move into the black. It said the cash outflows included a significant amount of non-recurring items, such as deferred payments on previous acquisitions, termination of a merger agreement with Sezzle and payments in relation to debt restructuring. It said the restructuring of global operations, streamlining of operations in core markets, enhanced credit origination and collections, and repricing of consumer and merchant fees have put it on track to be “group cash EBTDA profitable during the first half of the 2023/24 year”. It said it did not expect to have to raise further equity before achieving its positive earnings target. Zip chief executive Cynthia Scott added that the business has a new product due for launch that will be earnings accretive. What the company’s auditors thinks about all this is unknown because Zip presented unaudited financials. Over the course of the 2022/23 year Zip gave up on most of its international expansion and discontinued a number of products. It closed operations in Mexico, Singapore and the United Kingdom, and sold businesses in the Czech Republic, Poland, Saudi Arabia, South Africa and the United Arab Emirates. It stopped offering its business line of credit products Zip Business Trade and Trade Plus, and started winding up its lending operation Zip Business Capital. On a continuing business basis, transaction volume rose 8.1 per cent to $8.9 billion, while active customer numbers fell 3.5 per cent to 6.2 million. Revenue was up 16.1 per cent to $693 million. The company reported a loss of $401.7 million, compared with a loss of $1 billion the previous year. The company likes to focus on its core cash EBTDA which improved from a loss of $151.4 million in 2021/22 to a loss of $48.2 million in the year to June. The 2022/23 loss was $33.2 million in the December half and only $15 million in the second half. It reported a significant reduction in bad debts, which fell from 2.7 per cent to 2 per cent of transaction value year-on-year. But the tightening of risk settings that helped achieve this result also contributed to the fall in customer numbers. Despite all its setbacks, Zip still likes to present itself as a growth company with huge opportunities, especially in the US. But the latest figures suggest its business