Afterpay sector cashes in
Buy-now-pay-later rivals in the black on updates
SHARES in the buy-now-paylater sector surged yesterday following positive quarterly updates from Afterpay rivals ZipCo and Splitit.
ZipCo announced yesterday it had made an unaudited $23 million in revenue for the three months to March 31, a 20 per cent rise on the second quarter, and nearly double the same period last year.
Zip shares rose more than 7.5 per cent at the open before cooling to $2.63 at 1132 AEST, still up 6.05 per cent.
That leap was outdone by rival Splitit pay, which surged Close Change 22.7 per cent to $1.135 at the same time, after the company announced its active merchants increased by 15 per cent to 437 for the quarter.
Splitit said its unique shoppers lifted by 36 per cent to 160,000 for the quarter across 27 countries, and its merchant fees rose 31 per cent for the quarter to sit at $556,000 for the year so far.
Underlying merchant transactions in quarter one are up 168 per cent year-on-year to $32.8 million, a Splitit record to date.
Buy-now-pay-later providers differ in conditions and fees, but essentially allow customers to purchase items immediately and repay the participating merchant via instalments.
Zip, which floated on the ASX at 20 cents in 2015 and operates in Australia and New Zealand, said it had signed a number of new enterprise clients to the platform during the quarter, including Chemist Warehouse, Lorna Jane, General Pants, Decathlon, Bupa Health and Lego.
Managing director and chief executive Larry Diamond (pictured) said transaction volumes fell 8 per cent for the quarter but transaction numbers remained flat thanks to a 143,000, or 14 per cent, increase in customer numbers to 1.2 million during what is a traditionally weak quarter for retail.
The company also said it planned to use the $56.7 million from its capital-raising initiative in March to “aggressively” pursue new customers and merchants while facilitating its rollout in New Zealand, and investing in tech and data science. Meanwhile, Afterpay shares were more than 4 per cent higher at $24.81 at 1132 AEST.
The company’s ASX share price has more than doubled this year alone. 4.95% 4.62% 3.90% 3.37% 3.28% 2.96% 2.34% Close Change
-.04 -.07 -.16 -.84 -.08 -.035 -.09 PctChange
6.11% 5.86% 5.19% 3.49% 3.39% 3.23% 3.20%