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Zip Co (ASX:Z1P) - Founders Peter Gray (left) and Larry Diamond (right) - The Market Herald
Founders Peter Gray (left) and Larry Diamond (right)
Source: Sydney Morning Herald
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  • Zip Co (Z1P) has released its preliminary FY20 results, after what was an intensive year of growth of the buy now pay later company
  • The company made several acquisitions which saw it expand throughout Australia, New Zealand, the U.S., U.K. and South Africa
  • Total customers, retail partners and transactions volumes all rose over the year, resulting in a 91 per cent increase in revenue to $161 million
  • As the company expanded, so too did its operating costs, and, when combined with acquisition and other costs, Zip Co recorded an adjusted loss before tax of $44.9 million
  • Nevertheless, the company maintained a positive operating cash flow of $14.6 million, although this did not include $27.8 million of net bad debts written-off during the year
  • Shares closed 4.15 per cent lower at $9.25

Buy now, pay later company Zip Co (Z1P) has released its preliminary results for the 2020 Financial Year (FY20).

The company focused heavily on growth during the period and made several acquisitions and investments to expand its global footprint.

Zip Co acquired PartPay, which had businesses in New Zealand and the United Kingdom, held an 8.9 per cent interest in U.S.-based QuadPay and a 24.7 per cent interest in Payflex in South Africa.

Following that acquisition, Zip Co made a $16.6 million investment in QuadPay to increase its interest to 15 per cent.

The company is looking to increase its ownership to 85 per cent, and shareholders will vote on the resolution at an extraordinary general meeting later this month.

Zip Co also bought the New Zealand and Australian operations of Spotcap, a global lender to small and medium enterprises.

Several measures showed significant uptake of Zip's products over the financial year; total customers increased 62 per cent to 2.1 million, retail partners increased 51 per cent to 24,500 and the total transaction volume jumped 91 per cent to $2.1 billion.

Zip also tabled a 91 per cent increase in revenue from $84 million in FY19 to $161 million in FY20.

The company did, however, see a 0.61 per cent rise in net bad debts to 2.24 per cent and a total of $27.8 million was written off. Excluding these write-offs, Zip had a positive operating cash flow of $14.6 million.

In its preliminary income statement, the company tabled a 92 per cent increase in portfolio income to $159.4 million, as well as an 85 per cent increase in gross profit to $79.4 million.

Following significant growth expenditure, such as on acquisitions or investments in new products, Zip recorded a net loss before tax of 20.6 million and an adjusted loss before tax of $44.9 million.

As at June 30, 2020, Zip had $32.7 million cash or cash equivalents, $1.12 billion in customer receivables and $94.5 million in undrawn facilities.

Shares closed 4.15 per cent lower at $9.25.

Z1P by the numbers
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