Afterpay Touch Group Ltd (ASX:APT) to raise capital for international expansion

2473

Afterpay Touch Group Ltd (ASX: APT) shares are in a trading halt on Thursday morning, after announcing it will launch a $108 million capital raising to fund international expansion to the UK.

The funds raised will be used to acquire 90% of the issued shares in ClearPay.

ClearPay is a UK based payments company through which customers can purchase items up to £450 (~A$793) in value and make repayments in three interest-free monthly instalments.

“The acquisition of ClearPay will allow Afterpay to accelerate its entry into the UK market and enable further deployment of Afterpay’s global system,” the company said.

The company is continuing its expansion into new and existing international markets, underpinned by continued strong performance and growth in Australia and New Zealand.

Afterpay launched in the US in May 2018, with underlying sales (GMV) of approximately A$12 million in June and A$20 million in July. The momentum is continuing, with over 800 retailer contracts signed to date, over 400 merchants currently transacting on the US Afterpay platform, and over 150,000 registered US-based customers having transacted to date.

The raising will be completed today, with Afterpay shares expected to return to trade on Friday morning.

Full-Year Results Highlights

The equity raising was announced at the same time as the company reported its full-year results with the company posting group revenue and other income in FY18 of $142.3 million, up 390% on FY17.

The group recorded a statutory loss before of $7.6 million, down 47% from a loss of $14.4 million in FY17. Excluding significant items, group EBITDA was up 468% to $33.8 million while EBTDA was up 380% to $27.7 million.

The company will not pay a dividend for the period.

The company says growth in Afterpay underlying sales and a stable merchant revenue margin boosted results. In FY18 underlying sales were over $2.18 billion, up 289% on FY17.

Integrated merchants continued to grow strongly up by 176.7% from 6,000 merchants reported at 30 June 2017 to approximately 16,600 current live merchants at 30 June 2018.

Afterpay reported its customer base continues to grow. It has approximately 2.2 million unique registered end-customers and more than 92% of customers are active and returning customers.

Since the beginning of 2018, the Afterpay Touch Group Ltd share price has gained over 210%, compared to the S&P/ASX 200 Index, which has gained 3.13% in the period. 

Here’s how you can strike it rich in the share market

The best way to strike it rich in the share market is to buy shares that are not only cheap, but growing quickly.

Combining countless hours of research with over 30 years of hands-on stock market investing experience, The Capital Club’s founder Bruce Jackson has just published his definitive list of 3 Cheap and Good ASX Stocks for 2018.

Best of all, the report is absolutely free, exclusively for readers of The Capital Club.

In this comprehensive free report, you’ll find the name of one ASX gold stock that’s not only profitable, but trading at less than 4 times forecast profits.

You’ll also discover the name of a company one fund manager has called the cheapest stock in the ASX 100, and you’ll read about the three catalysts that could push the share price higher in the next six months.

Finally, the report names one of the cheapest retailers trading on the ASX, a company that just picked up the assets of a distressed competitor on the cheap, paying just 2 times earnings. No wonder one top fund manager thinks its share price could at least double.

With the share prices of each of these 3 companies having the potential to double or more, you’ll want to act now. Simply click here or the button below, enter your email address, and this free report will be instantly sent to you.

See the 3 stocks

Read Next

Here are 6 of the best dividend stocks on the ASX for 2018 and beyond

Here are 10 ASX 200 shares to beat the traditional blue chips over the next 3 years

5 ASX blue chip shares for 2018 and beyond

Top fund manager names this iconic company as “the cheapest stock in the ASX 100”

Contributors to this article may own shares in some of the companies mentioned in this article. The Capital Club has a thorough disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
Lauren Surplice is a keen follower of the stock market, investing in individual companies and funds. She follows the daily stock market news, covering the ASX stocks that are moving the markets. You can contact Lauren at laurens@thecapitalclub.com.au