Payright (ASX:PYR) share price jumps 5% on positive quarterly update

This microcap BNPL player is having a solid start to the week

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The Payright Ltd (ASX: PYR) share price is shooting higher today after the company announced an upbeat fourth quarter trading update. At the time of writing, the Payright share price is up 5.56% to 57 cents per share.

Payright is an emerging player in the buy now, pay later (BNPL) space, providing in-store credit, point of sale and online deferred payment options. The company specialises in transactions between $1,000 and $20,000.

What did Payright announce?

In today's statement, Payright announced it had achieved gross merchandise value (GMV) of $16.9 million for April and May, a 135% increase compared to the prior corresponding period.

In addition to its fourth quarter GMV update, the company also provided FY21 forecasts across key performance metrics.

The company forecasted a 55% increase in total customers to 52,500 by 30 June 2021, a 45% increase in gross receivables to ~68.2 million, and a 42% increase in merchant stores to 3,400.

The market appears to be pleased with Payright's results and guidance, with sending Payright shares up by more than 5%.

Management commentary

Payright Co-CEO Piers Redward commented on the company's fourth quarter results:

The growth in customer numbers is particularly pleasing, and reflects the success of the national, multi-channel brand building campaign we have undertaken across five state capitals in Australia. We have expanded the functionality of our platform to facilitate rapid customer onboarding and frictionless checkout. We have also introduced the first of our direct-to-customer features, Bill Smoothing, which allows consumers to spread the cost of their utilities bills, council rates, vehicle registration, and car and home insurance premiums, up to $1,000 over a three-month term.

With our innovative user experience technology now implemented, a growing number of merchants and customers on the Payright platform, and an increasing receivables book, we are very well placed to continue our strong revenue growth into FY22 and beyond.

A challenging period for the Payright share price

The Payright share price listed on the ASX on 23 December last year, closing at $1.00 despite a listing price of $1.20.

Its shares briefly rallied to a high of $1.22 on 16 February 2021, coinciding with the broader BNPL rally that took place in February.

As the BNPL sector began to sell-off between late February to May, the Payright share price tumbled from the $1.00 level to as low as 41.5 cents on 31 May.

Motley Fool contributor 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 and has recommended AFTERPAY T FPO and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended 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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