BNPL firms show growth but still no profit
Two of the largest buy now pay later (BNPL) stocks on the Australian Securities Exchange (ASX) released H1 FY21 results yesterday, and although both companies saw market growth, neither posted a profit.
Afterpay and Zip both posted results and neither company had a dividend policy as both firms focused on market growth overseas, which included acquisitions in the US, UK and Europe.
Zip’s year-on-year revenue increased 131%, its customer base increased 200% and its merchant base increased 73%.
However, it reported a statutory loss of $453.8 million, due to non-recurring items which included the acquisition of Quadpay in the US.
Afterpay had $385.2 million in revenue for a year-on-year increase of 114%, an 80% increase of customers and a 73% increase in merchants added, but a $76.2 million loss.
Both firms had expanded aggressively in the US and UK, with Afterpay owning the majority of Clearpay in the UK.
Afterpay announced on Thursday it would go into a trading halt until 1 March, 2021, pending another announcement.
Both stocks were hit hard during the March sell-off last year but according to data from FE Analytics, over the year to 24 February, 2021, Afterpay had returned 263.63% and Zip returned 234.08%.
In three years to the middle of last year, Afterpay’s share price had already increased over 2,000% and since it was listed on 29 June, 2017, it had increased 4876.3%.
Afterpay was held by 11 funds with the highest allocations being Ausbil Australian Geared Equity (9.32%), Bennelong Australian Equities (6.43%) and CFS First Sentier Wholesale Australian Share (5.29%).
Zip was only held by two funds, VanEck’s Australian Equal Weight ETF (2.2% allocation) and BlackRock’s iShares S&P/ASX Small Ordinaries ETF (1.14%).
Performance of Afterpay and Zip over the year to 24 February 2021
AUTHOR
Chris Dastoor
Recommended for you
A Fidelity portfolio manager has announced he will be departing the business after almost a decade.
While fund managers are eager to launch active ETFs to appeal to advisers, EY has found two-thirds of ETF flows are going into extremely cheap passive offerings with an expense ratio of less than 25 basis points.
Three fund managers have been added as underlying managers for the Third Link Growth Fund, an Australian equity fund donating its fee to charity.
Colonial First State has chosen Franklin Templeton specialist investment manager, Martin Currie Australia, to manage a mandate on its FirstChoice platform.
