The Laybuy Holdings Ltd (ASX: LBY) share price is in focus today after releasing its FY21 report.
FY21 result
The buy now, pay later (BNPL) business reported that it saw continuing growth for the year to 31 March 2021.
It reported that total gross merchandise volume (GMV) grew 159% year on year to NZ$589 million. There was particularly strong growth with UK GMV, which rose by 504% to NZ$296 million.
The jump in GMV drove income higher by 138% to NZ$32.6 million.
The net transaction margin (NTM) was 1.8% of GMV, compared to breakeven in FY20.
Merchant numbers increased by 75% year on year, reaching over 9,000. UK merchants went up 433%.
Active customer numbers grew by 87% year on year to 756,000. UK active customers rose 202%. There was a lot of repeat customer growth. Repeat customers increased from 44% to 62% of total customers in the UK. In Australia and New Zealand it increased from 66% to 73%.
Management comments
Laybuy Managing Director Gary Rohloff said: “Throughout the year, our focus has remained firmly on the UK, where the opportunity is enormous. The UK has an addressable retail market of £394 billion, more than twice the size of the Australian market. It is also a market where BNPL is still in its infancy but is expected to grow quickly.
“Over the past year, we have accelerated our marketing activities, entered into new strategic partnerships, invested in new technology and grown our staff numbers in the UK to take advantage of the opportunity provided. This focus is delivering results, with the value of goods purchased through Laybuy growing five-fold in the past year and Laybuy is now widely recognised as one of the top three BNPL providers in the UK market.”
Laybuy share price on watch with FY22 forecasts
The BNPL business said it expects to exceed NZ$1 billion of GMV in FY22. It’s also expecting its revenue to increase by between 90% to 100% compared to FY21.
May 2021 is on track to reach GMV of NZ$62 million, which has been calculated on a run-rate using the month to date numbers. This is an increase of 53% compared to May 2020.
The business is also expecting the net transaction margin to continue to improve.
It’s certainly one to watch in the BNPL space, but I’m just not sure how profitable the sector can be over the longer term so I’m wary about investing at this level. There are other ASX growth shares that may be more profitable.
