Total
0
Shares
Zip Co (ASX:Z1P) - Founders Peter Gray (left) and Larry Diamond (right)
Founders Peter Gray (left) and Larry Diamond (right)
Source: Sydney Morning Herald
Market Herald logo

Subscribe

Be the first with the news that moves the market
  • Digital payments company Zip Co (Z1P) has continued to perform well despite the general economic downturn during the COVID-19 pandemic
  • The company has posted big jumps in year-on-year figures across a number of metrics, and only a marginal increase in bad debts
  • Year-on-year figures for April show 80-plus per cent growth in both monthly revenue and transaction volume
  • Merchant numbers were also up by 50 per cent, while receivables grew a staggering 97 per cent to $1.2 billion
  • The company reported just 1.99 per cent net bad debts across April – significantly outperforming the industry as a whole
  • Zip Co is up 14.3 per cent on the market today, with shares trading for $3.27 each

Digital payments company Zip Co (Z1P) has continued to perform well despite the general economic downturn during the COVID-19 pandemic.

The company has posted big jumps in year-on-year figures across a number of metrics, and only a marginal increase in bad debts despite the general chaos and uncertainty across global markets.

A year of growth

The year to the month of April saw some giant leaps in both monthly revenue and transaction volume, with the two key metrics more than 80 per cent above the figures for the corresponding prior period.

The company also saw 70,000 new customers come into the fold, bringing Zip’s client base to two million — a 66 per cent year-on-year (YOY) increase.

Merchant numbers were also up by 50 per cent, while receivables grew a staggering 97 per cent to $1.2 billion.

Managing Director and CEO Larry Diamond says he’s pleased the company has continued its ascent despite challenging retail conditions.

“April was another very strong month for Zip, and in particular when considering the shutdown of a large portion of the economy. Our product differentiation and penetration into purchases for online, the home, and everyday spend categories, delivered robust transaction volume,” he said.

“Our revenue model has continued to deliver a strong result in the face of a challenging economic environment for retail more generally.”

Z1P Managing Director and CEO Larry Diamond

Smart safeguards

Another key facet of Zip’s rise has been in its clever approach to data and risk management.

The company has experienced only a marginal rise in bad debts through the pandemic – which is remarkable given how many brick and mortar operations are shuttered, and how many consumers are suddenly unemployed.

The company reported just 1.99 per cent net bad debts across April – significantly outperforming the industry as a whole.

Considering the comparative YOY market conditions, the rise from the April 2019 figure of 1.61 per cent — while not entirely negligible — is still impressive enough.

This relative security even in the face of unprecedented interruptions due to the virus outbreak is indicative of the robustness of the company’s smart proprietary fraud and credit decisioning technology.

Executive Director and COO Peter Gray says the company’s approach to security and decision-making is paying dividends in the current climate.

“The investments we have made in our credit and decision technology platform over the last seven years, our flexible wallet product, and the unique levels of engagement we have with our customers are paying off,” he said.

“The increased repayment metrics were extremely pleasing, and we are well placed to continue to successfully manage our portfolio in this challenging time.”

Z1P Executive Director and COO Peter Gray

Larry Diamond says the company will only build on these solid foundations as the pandemic effects begin to ease.

“The start of May looks to be considerably stronger again relative to April, and we look forward to supporting our retail partners as social restrictions gradually ease and brick and mortar stores begin to re-open.”

Zip Co is up 14.3 per cent on the market today, with shares trading for $3.27 each as at 12:30 pm AEST.

Z1P by the numbers
More From The Market Herald
Wisr (ASX:WZR) - CEO, Anthony Nantes

" Wisr (ASX:WZR) adds $123m in originations to loan book

Wisr (WZR) has added another $123 million in originations to its loan book during the recently completed September quarter.
Humm Group (ASX:HUM) - CEO, Rebecca James

" hummgroup (ASX:HUM) 1Q22 business update

hummgroup (HUM) is trading in the green following the company’s business update for the first quarter of the 2022 financial year.
Laybuy (ASX:LBY) - Managing Director, Gary Rohloff

" Laybuy Group (ASX:LBY) signs new £30 million loan

Laybuy Group (LBY) has signed a new £30 million (A$55.3 million) debt facility with US specialist lenders Partners for Growth.

" NSX (ASN:NSX) enters Q2 focused on Saudi Arabian stock exchange

NSX Limited (NSX) capped off its first quarter of FY22 with more cash in the bank and plans to potentially open another stock