Christmas has come early for the bank’s shareholders with the decision to slightly increase the 2024 dividend – despite a single-digit decline in the net profit and cash earnings.
Beating the market benchmark is never easy, with 72 per cent of Australian actively managed global equity general funds trailing the S&P World Index in the six months to June 30, 2024. Domestic equity funds performed slightly better, albeit against a significantly lower bar set by the S&P/ASX 200 Index.
Buy now, pay later: Afterpay shares jump on COVID-19 update
The Afterpay (ASX: APT) share price has jumped at the open after the buy now, pay later company gave a COVID-19 update. The share price is up 9 per cent in early trading.
What is Afterpay?
Afterpay is the owner of the popular “buy now, pay later” app. As of 2019, Afterpay had over 4 million registered users worldwide, making it one of Australia’s true technology success stories. Afterpay is trying to emulate its outstanding success in Australia by expanding its reach into the UK, using the ‘Clearpay’ brand name, and into the USA, where it has signed major social influencers to endorse its service.
What did Afterpay announce?
Afterpay has given a large update for the March 2020 quarter. It said it’s too early to estimate the broader economic impacts. But it said it has a number of advantages to respond like its business model and strong capital position.
Some of the highlights:
Financial year to date (YTD) it has generated $7.3 billion of underlying sales, up 105 per cent. March was the third best month on record, behind the seasonally higher months of November and December 2020. Q3 underlying sales were up 97 per cent.
Afterpay said its income margins for March and YTD were higher than the first half of FY20 (HY20).
Gross losses for March were approximately 1 per cent, around the same as HY20.
The BNPL company said it had preemptively made risk setting adjustments which helped loss performance in the second half of March and early April. The net transaction margin (NTM) YTD is around 2 per cent and in line with HY20.
At March 2020 it had $541.1 million cash and $719.2 million of liquidity. It said the mature ANZ region continues to be profitable and underlying cashflow positive.
In March 88 per cent of total global underlying sales were online. In the second half of March, sales were 4 per cent lower than the first half of March. UK sales were 15 per cent lower.
Is Afterpay a buy?
Afterpay said it experienced positive growth in April “in all markets with average daily underlying sales up approximately 10 per cent on the second half of March globally”.
A solid update, Afterpay is doing well for now. However, for me there are big question marks about its profit prospects – it’s hard to value for this reason.
