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The Payright (ASX: PYR) share price tumbles after maiden results

asx share price fall represented by investor with head in hands
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The Payright Ltd (ASX: PYR) share price has slid 10.50% lower after announcing its maiden HY21 results.

The company listed on the ASX on 23 December 2020 at an IPO offer price of $1.20 per share. Its shares have struggled to deliver value to early investors, having only touched break-even once on 16 February 2021.

What’s driving the Payright share price today?

The broader market is facing a heavy selloff today, with the S&P/ASX 200 Index (ASX: XJO) down 2.40% and S&P/ASX Information Technology Index (ASX: XIJ) down an even further 6.40%. 

This has resulted in buy now, pay later shares across the board being sold down. BNPL heavyweights Afterpay Ltd  (ASX: APT) and Zip Co Ltd (ASX: Z1P) are down a respective 11% and 6% at the time of writing. 

The heavy selling and weak sentiment across the board could be a factor pulling on the Payright share price beyond its results. 

HY21 result highlights 

Payright reported its Gross merchandise value (GMV) across Australia and New Zealand was up 84% to $20.6 million. Total customers also increased 25% to 42,300. This was attributed to the company’s growth in active merchants and more targeted direct marketing and brand campaigns. 

The company has seen a continued downtrend in arrears down from 3.96% in June 2020 to 2.77% in December 2020. The improvement in arrears and focus on collections efforts have been balanced with managing COVID impacted customer hardship.

Payright’s underlying losses relating to ‘business as usual’ credit defaults are also highlighted to be below the winder industry average. 

How is Payright different? 

Payright specialises in transactions between $1,000 and $20,000. Its current portfolio is a mix across retail, home improvement, health & beauty, photography, education and automotive. This is its key point-of-difference in the rapidly growing BNPL sector. 

The company believes there is a rapidly growing demand for a BNPL service on larger purchases with 55% of surveyed consumers wanting a BNPL option for purchases over $1,000. 

By focusing on more considered purchase items, Payright believes that it targets a lower risk customer demographic that have stronger credit scores representing very low default risk. 

To further accelerate the company’s growth, Payright reports it’s well progressed in the development of a number of significant and soon-to-be-deployed tech-related growth products and initiatives. 

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Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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