Openpay (ASX:OPY) share price slumps as margins narrow

The Aussie BNPL share is under pressure on Thursday

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The Openpay Group Ltd (ASX: OPY) share price is slumping lower on Thursday afternoon after the buy now, pay later (BNPL) group's full-year results.

Openpay share price slumps as transaction margins narrow

Shares in the BNPL group are down more than 5% at the time of writing after releasing its results for the year ended 30 June 2021 (FY21). Some of the key takeaways from this morning include:

  • Active merchants up 77% on the prior corresponding period (pcp) to 3,800
  • Active customers up 69% on pcp to 541,000
  • Total transaction value (TTV) up 77% on pcp to $339 million
  • Revenue up 44% on pcp to $26 million
  • Net transaction loss (NTL) flat at 2.3% of TTV
  • Net transaction margin (NTM) down 190 basis points to 0.6%

However, the headline growth figures weren't enough to stop the Openpay share price from slumping lower today.

What happened in FY21 for Openpay?

The BNPL group described FY21 as a "transformative" year. Openpay reported strong TTV growth thanks to increasing active merchant numbers. Openpay also announced the acquisition of UK-based Payment Assist which is expected to close in 1H FY22.

The Aussie company ventured into the $5.5 trillion US BNPL market via partnerships with Worldpay from FIS and ezyVet. The group is preparing to start transactions in the United States in early October 2021.

The Aussie BNPL group reported strong performance across Australia and New Zealand with growth in active merchants, customers and plans during the year.

However, the Openpay share price has been under pressure and remains down 69% in the past 12 months.

What did management say?

Openpay Managing Director and CEO, Michael Eidel, commented:

FY21 was a transformative year for Openpay, with many significant strategic and operational achievements that set us up to achieve our objectives of sustainable growth and mid-term profitability.

We have succesffuly transformed the business to become a truly diversified, global payments fintech, well beyond our great Business to Consumer (B2C) BNPL offering and origins, and precisly as described in our long-term vision and strategy.

What's next for Openpay and its share price?

The Openpay share price has been smashed despite headline growth figures as its transaction margin narrowed sharply in FY21. The Aussie BNPL did not provide FY22 guidance in today's results update.

Shares in the BNPL group are down 40.9% in 2021 with a market capitalisation of $148.3 million.

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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