Openpay share price roars higher after reporting record growth for Q4 FY20

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The Openpay (ASX:OPY) share price has roared 41 cents or 9.3% higher to $4.81 in early trade Wednesday after the “buy now, pay smarter company” reported record growth across leading indicators of Active Plans, Active Customers and Total Transaction Value, driven by OpenMay initiatives and a surge in UK business.

Openpay reported Total Transaction Value (TTV) grew to a record $192.8m for the full year, up 98.2% compared to FY19 and up 119% for the quarter.

Although revenue grew strongly — up 64% over FY19 — it was a relatively modest $18 million for FY20, a fraction of the Openpay market capitalisation of close to $400 million.

Openpay CEO, Michael Eidel said “As more consumers sought better ways to structure purchases across their life needs, we saw a strong surge in new customers and plans. This was particularly evident in the UK, where our business more than doubled during the period as a result of our OpenMay promotions and the launch of major retailer, JD Sports.”

Openpay said active merchants increased by 52% to 2,162 as at the end of June 2020 with additions across all verticals, particularly in Automotive and Healthcare, where Openpay is typically either the sole buy now pay later (BNPL) provider or one of only two. Retail Merchants increased by 82% for the quarter.

The company said that whilst the trend toward a strong increase in eCommerce usage in absolute and relative terms has continued, from late June Openpay has observed a pick up in in-store purchases.

Like all buy now pay later companies, the Openpay share price has been on a tear, surging from a low of just 32 cents in March to as high as $4.80.

In June, Openpay raised $33.8 million via an institutional placement at $2.40 per share. At the end of June 2020 Openpay reported cash on hand at of $70.1m, and undrawn debt facilities of $45m in Australia and £20m in the UK.

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.
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Bruce Jackson has 30 years of hands on investing experience. He is passionate about stock market investing, running his own portfolio and SMSF. His focus is on small cap growth stocks. You can contact Bruce at brucej@thecapitalclub.com.au