Laybuy (ASX:LBY) share price slides on Q4 trading update

The Laybuy Holdings Ltd (ASX: LBY) share price is sinking today following the release of a trading update. We list the key highlights here.

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The Laybuy Holdings Ltd (ASX: LBY) share price is sinking in mid-afternoon trade following the release of a business update.

At the time of writing, the buy now, pay later (BNPL) provider’s shares are fetching for 92 cents apiece, down 1%.

What’s with the Laybuy share price?

Investors appear unfazed by Laybuy’s latest performance update for Q4 FY21, sending its shares lower.

For the quarter ending 31 March 2021, Laybuy reported strong growth across its key operational metrics. Annualised (multiplied by 12) Gross Merchandise Value (GMV) increased to NZ$645 million, up 129% on the prior corresponding period.

Underpinning the result, the United Kingdom market saw GMV soar from NZ$108 million in Q4 FY20 to NZ$358 million in Q4 FY21. This represents a 230% jump in the space of 12 months. Additionally, this makes the United Kingdom Laybuy’s largest market.

Laybuy highlighted that this was the second-highest trading quarter to date after Q3 FY21. Traditionally, growth rates in Q3 tend to be higher than any other quarter due to the timing of holiday sales.

Active customers stood at 756,000 at the end of the period, representing an 87% increase on the prior corresponding period (pcp). Furthermore, active merchants came to 9,126, a surge of 75% over the same time frame. The growth was attributed to the company’s strategic initiatives in which a number of promotional marketing events took place.

Revenue attained for the quarter hit a record high of NZ$9.8 million. This reflects a lift of 105% on the pcp, and contributes to FY21 revenue of NZ$32.6 million.

Net Transaction Margin (NTM) also improved to 2.5% of GMV, up from a loss of 0.3% in the prior comparable period. Laybuy credited a reduction in customer defaults as the reason why.

At the end of the quarter, Laybuy recorded cash and equivalents of NZ$15.5 million, with NZ$3.4 million in debt facilities.

Tap to Pay

Laybuy expects to gain robust instore traction with the United Kingdom launch of its “Tap to Pay” product in May.

The feature is seen as a way forward in a post COVID-19 environment. Both Australia and New Zealand rolled out the product last quarter with much success.

Outlook

Looking ahead, Laybuy revealed that it is on track to reach NZ$1 billion in annualised GMV sometime in FY22. Year-on-year revenue growth is expected to skyrocket between 90% and 100% on FY21, driven by ongoing key operational growth. In addition, the rolling 12-month average for NTM is also set to rise through lesser defaults and increased repeat customers.

The Laybuy share price has lost over half its value in the last 12 months, and is down 30% year-to-date.

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