Afterpay (ASX:APT) share price lower despite leadership and AGM update

The Afterpay Ltd (ASX:APT) share price is dropping lower on Tuesday despite the release of a couple of positive updates…

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The Afterpay Ltd (ASX: APT) share price is trading lower on Tuesday despite the release of two positive updates.

In early trade the payments company’s shares are down 2% to $99.59.

What did Afterpay announce?

This morning Afterpay is holding its virtual annual general meeting. Ahead of the meeting, the company provided an update on changes in its leadership.

According to the release, the company has appointed Nick Molnar as co-CEO and Managing Director, sharing the role with current CEO and Managing Director, Anthony Eisen.

Afterpay Chair, Elana Rubin, commented: “Since Anthony and Nick co-founded Afterpay, the ability to leverage their complementary skills and experience has culminated in a strong and very successful partnership and has been key to Afterpay’s global success.”

“As Afterpay continues to expand globally, the focus on its international operations has never been greater, as such, the co-founders and the Board believe that it is important to have an appropriate level of oversight, executive prominence and presence both internationally and domestically.”

“To achieve this, Anthony and Nick will become co-CEOs of Afterpay. They will continue to share responsibility for executing on our strategy and their performance will be measured on the same key objectives. Nick will return to the US as soon as is practicable and Anthony will continue to be based in Australia,” she added.

Annual general meeting.

Afterpay’s annual general meeting presentation touched on its performance in FY 2020, the recent ASIC report into the buy now pay later industry, and trading so far in the new financial year.

In respect to the latter, as was announced a few weeks ago, Afterpay’s active customers and underlying sales continued to grow during the first quarter.

Its active customers reached 11.2 million at the end of September and the company was generating $4.1 billion of sales from them. This was up 115% from $1.9 billion in the first quarter of FY 2020.

Pleasingly, this morning Afterpay revealed that October was yet another strong month for the company and November has been even stronger.

The company’s co-CEO, Anthony Eisen, commented: “October was another record month for underlying sales globally and we are performing ahead of this in November. The growth of new customers is accelerating since the end of Q1 in both the US and UK as the pipeline of new merchants go live on our platform.”

“On our key financial and performance metrics, there is no change to the comments we made around gross losses, net transaction losses and Net transaction Margins in our Q1 business update and we are pleased with how the business is tracking in the first 6 weeks of Q2 FY20,” he added.

Global expansion update.

Fellow co-CEO Nick Molnar provided investors with an update on its global expansion.

He commented: “Launching into Canada in August was a really exciting moment for the team. We have had a solid start with a number of large merchants now live, integrating or signed.”

In respect to Europe, Mr Molnar revealed that Afterpay is busy developing integration plans to ensure that it is ready to launch as soon as the Pagantis acquisition is completed.

Over in Asia, its expansion plans are also progressing with a base now established in Singapore. This will enable Afterpay to drive the development of a strategy for the South East Asia market.

Mr Molnar also spoke about the launch of its new Cross Border Trade offering.

He said: “Our Cross Border Trade also builds on our global expansion by enabling our merchants to offer their products to customers across the world. Specifically, all Afterpay merchants can now open their ecommerce sites to Australian, British, Canadian and New Zealand shoppers. Next year, global merchants will also be able to sell to US consumers.”

All in all, the chief executive appears confident on its prospects globally and intends to continue to use its successful ANZ operations as a blueprint for execution.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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