Stocks
Reporting Season: Afterpay Limited (APT.ASX)
Edward Heng
Maqro Adviser Video Commentary
Maqro Research Team Coverage
Overall, APT’s earnings beat market expectations, with its revenue and EPS ahead of estimates, largely due to a lower provision from higher than anticipated collections of instalment payments during COVID-19. Its US underlying sales in July expected to continue throughout FY21 and its launch into Canada in August should extend the reach in North America. APT is also confident on its expansion into Europe through Pagantis in FY21 (already more than 1 million active customers in first year operations).
Key Metrics:
| Active Customers | APT had 9.9m active customers, which is an increase of 116% on FY19. |
| Active Merchants | APT reported 55.4k active merchants, which represents an increase of 72%. |
| APT Net Transaction Margin | Afterpay's net transaction margin for FY20 was 250.2m, an increase of 110%. |
| Group Net Transaction Margin | The overall Group's net transaction margin for FY20 was 261.3m, an increase of 101%. |
Table 3 | Underlying Sales
| For the year ended 30 June | 2020 | 2019 | Change % |
|---|---|---|---|
| ANZ | 6,566.9 | 4,314.1 | 52% |
| US | 3,990.4 | 927.5 | 330% |
| UK | 557.0 | 5.6 | na |
| Underlying Sales ($m) | 11,114.2 | 5,247.2 | 112% |
Table 4 | Active Customers
| For the year ended 30 June | 2020 | 2019 | Change % |
|---|---|---|---|
| ANZ | 3.3 | 2.8 | 18% |
| US | 5.6 | 1.8 | 219% |
| UK | 1.0 | 0.0 | na |
| Active Customers (millions) | 9.9 | 4.6 | 116% |
Table 5 | Active Merchants
| For the year ended 30 June | 2020 | 2019 | Change % |
|---|---|---|---|
| ANZ | 42.8 | 28.4 | 51% |
| US | 11.5 | 3.8 | 202% |
| UK | 1.1 | 0.0 | na |
| Active Merchants ('000s) | 55.4 | 32.3 | 72% |
https://maqro.com.au/download/35294/
Outlook:
- US underlying sales in July expected to continue throughout FY21
- Launch into Canada in August should extend the reach in North America
- Acquisition of European based Pagantis will facilitate expansion of APT into multiple European markets in FY21 (already have more than 1 million active customers in the region in the first full year of operation)
- Accelerating Clearpay’s expansion into Europe with plans to enter Spain, France, Italy and potentially Portugal in FY21- addressable market in excess of $240bn through the acquisition of Pagantis
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