The Laybuy Holdings Ltd (ASX: LBY) share price has started the week positively following the release of its half year results.
At the time of writing, the buy now pay later provider's shares are up over 1.5% to $1.41.
How did Laybuy perform in the first half?
This morning the Afterpay Ltd (ASX: APT) rival revealed that it recorded strong gross merchant value (GMV), customer, and merchant growth during the six months ended 30 September.
According to the release, first half GMV increased 167% over the prior corresponding period to NZ$244.8 million. This equates to annualised GMV of NZ$489.6 million.
Almost half of its annualised GMV is from the UK market, which now stands at NZ$212.5 million. This is up by a whopping NZ$196 million since this time last year.
Positively, the company's defaults are also improving. They have reduced from 3% of GMV a year ago to 2.5% of GMV.
Also climbing strongly was its net transaction margin (NTM), which grew 448% to NZ$4.1 million. As a percentage of GMV, its NTM is now 1.7%. This compares to 0.8% in the prior corresponding period.
What were the drivers of Laybuy's strong growth?
Key drivers of the company's growth during the first half were increases in merchant and customer numbers.
Active merchants now total 6,323, which is an increase of 48%. Whereas active customers have lifted by 315,000 over the 12 months to 568,000. Management advised that this reflects strong growth in all regions.
Laybuy's Managing Director, Gary Rohloff, commented: "Laybuy is delighted to announce its first financial results as an ASX listed company and update shareholders on the significant progress we have made against our growth strategy."
"Revenue has increased 151% largely due to growth in the UK. We reported strong growth in all key operating metrics for the half year period. In addition to this strong revenue growth, we saw a significant improvement in Net Transaction Margin, more than doubling to 1.7% in H1 FY21," he added.
Outlook.
Mr Rohloff spoke positively about the company's outlook.
He said: "Setting the foundations for growth, Laybuy has expanded its debt facilities and raised capital on the ASX, which together with its capital efficient business model supports annual GMV growth of approximately NZ$4 billion. This sets us up well to capitalise on our differentiated offering and highly scalable and flexible technology platform to capture the substantial growth opportunity in both the UK and Australian market."
Pleasingly, management revealed that it has experienced a marked uplift in activity since the end of the first half. During this time it has added over 60,000 customers and over 1,000 merchants.
It also revealed that GMV for October and November (based on a month to date run rate) improved to NZ$45 million and NZ$61 million, respectively. This represents GMV growth of 164% and 175%, respectively, over the prior corresponding periods.
Finally, it advised that it has recently launched with Wilko in the UK (annual turnover of ~1.6 billion pounds) and had a highly successful "Laybuy Mania" event on 7 November.
This event "produced record results with a 858% increase in referral to merchants, 804% more customers visiting Laybuy's shop directory and 100% increase in orders made with Laybuy compared to the prior month."
