New substantial shareholder- Bank of America have been slowly buying ZIP shares, and now hold 6.15%
Zip successfully prices A$ 400 million senior convertible notes due 2028
Zip Co Limited (ASX: Z1P) (“Zip” or the “Company”) is pleased to announce thatit has successfully priced A$400m zero coupon senior unsecured convertible notes due 2028 (the “Notes”) (the “Offering”).
The Notes will mature on 23 April 2028 unless otherwise redeemed, repurchased, or converted in accordance with their terms and conditions. The Notes are convertible into fully paid ordinary shares of Zip (the “Ordinary Shares”). The initial conversion price of the Notes is A$12.39 per Ordinary Share, which represents a conversion premium of 35% over the Reference Share Price.
As previously announced, Zip intends to use the proceeds of the Offering (net of commissions, professional fees and other administrative expenses) to drive growth in core markets, expand into new regions and for general corporate purposes.
DISC: I hold...Trading Halt now lifted and no Share Purchase Plan/Entitlement Offering for us....
Z1P announces A$400 million senior convertible notes offering to accelerate global expansion
Zip Co Limited ACN 139 546 428 (ASX: Z1P) (“Zip” or the “Company”) announced it has today launched an offering of A$400m senior unsecured convertible notes due 2028 (the “Notes”), (the “Offering”). The Notes are convertible into fully paid ordinary shares of Zip (the “Ordinary Shares”).
Zip Co-founder and COO, Peter Gray said:
“We are very excited to welcome a new group of global investors to the Zip ecosystem, embracing our journey and mission to be the first payment choice everywhere and every day.
The additional capital from this Offering will support the active pursuit of both core and international growth opportunities, as Zip becomes a truly global BNPL player, leveraging our very strong momentum and the worldwide shift away from the broken credit card, towards a better, fairer digital alternative”.
The Offering is being marketed to eligible investors with the final terms and conditions of the Notes to be determined via a book-build process expected to be completed prior to market open tomorrow. A summary of the key terms and conditions of the Notes is set out in the Appendix of this announcement.
It is intended that the proceeds of the Offering (net of commissions, professional fees and other administrative expenses) will be used to drive growth in core markets, expand into new regions and for general corporate purposes.
It is intended that the Notes will be listed on the Official List of the Singapore Exchange Securities Trading Limited (“SGX-ST”). Conversion of the Notes will be physically settled by the issuance of new Ordinary Shares.
Jarden Australia Pty Limited (“Jarden”) and Merrill Lynch Equities (Australia) Limited (“MLEA”) are acting as Joint Lead Managers (“JLMs”) on the Offering.
In connection with the Offering, to facilitate some or all of the hedging activity that may be executed in relation to the Notes:
Co-founders Larry Diamond and Peter Gray have expressed an intention to sell a small portion of their holdings (up to 1.5 million and 0.5 million Ordinary Shares respectively). Proceeds from the sale will be used primarily to fund their respective tax liabilities. This sale is intended to be executed in conjunction with the Delta Placement.
An independent sub-committee of the Board has determined that it was in the best interests of Zip’s shareholders to enable this transaction.
Release approved by the Chief Executive Officer on behalf of the Board.
Disc: I hold....Trading Halt remains....
Zip announces trading halt for consideration of capital raising........
Talk about striking while the iron is hot! I guess this will be to fund their entry into SE Asia? Commentary in the AFR this morning suggesting Zip may consider listing in the US, as Quadpay set to dwarf Austalian operations by next year.
If I'm able, I will buy in - don't want to be diluted!
Strong performance for the quarter from Zip - interesting to see how they use transaction volume as a metric (presumably to obscure the fact that there's still no profit forthcoming?)
Still, revenue growth of 80% and a transaction volume increase of 114% is very encouraging, particularly from their US entity - shows that market penetration is still being achieved in what is increasingly becoming a crowded space.
Note that they are expanding into SE asia through the Phillipines- probably a smart move as I think the Singaporean market is probably already saturated.
Note also the commentary on the debt facilities - still getting to grips with understanding it fully, but it would appear they are on a solid footing with sufficient reserves and have achieved a good rating.
ZIP PARTNERS WITH JB HI-FI GROUP
Zip Co Limited (ASX: Z1P) (“Zip” or “the Company”) is pleased to announce today that it has entered into a partnership with JB Hi-Fi Limited.
The JB HI-FI Group operates two of Australia’s most trusted retail brands, and is one of Australia’s largest technology, entertainment and home entertainment retailers.
Zip will provide a fully integrated payments solution for both JB HI-FI and The Good Guys, providing customers with the ability to shop, both in-store and online, and pay with Zip’s interest free BNPL payment solutions.
Peter Gray, Co-founder and Chief Operations Officer, said: “We are delighted to partner with the JB HI-FI Group. We look forward to providing customers with choice at checkout, empowering them to own the way they pay at JB HIFI and The Good Guys. This strategic partnership provides Zip customers with access to even more of Australia’s favourite brands, further delivering on Zip’s mission to be the first payment choice everywhere and every day”
It is anticipated that the partnership will be launched to market in April 2021.
Today Z1P has partnered with Adore Beauty. Adore Beauty is the first retailer to sell cosmetics exclusively online and is an official retailer of more than 200 brands.
21 January 2021
Q2 FY21 TRADING UPDATE ZIP CEMENTS ITSELF AS A TRUE GLOBAL BNPL LEADER
* Note: all figures in AUD unless otherwise specified.
On the 20th of January 3 directors have aquired more shares of the company.
Q2 FY21 TRADING UPDATE
GROUP HIGHLIGHTS * Note: all figures in AUD unless otherwise specified.
? Record group quarterly revenue of $102.0m (up 88% YoY).
? BNPL December revenue $40.2m (up 94% YoY).
? Record quarterly transaction volume of $1.6b (up 103% YoY).
? December transaction volume of $628.4m (up 104% YoY). ? Transaction numbers for the quarter of 10.7m (up 149% YoY).
? Customer numbers increased to 5.7m, up 97% YoY.
? Merchants on the platform increased to 38.5k (up 73% YoY).
? Zip US (QuadPay) delivered record results in Q2 across all core metrics – $673.1m in transaction volume, $47.6m in revenue and 915k new customers.
? The Company raised $176.7m in equity, with the majority of funds allocated to fuel the significant US growth opportunity.
ZIP PARTNERS WITH FACEBOOK TO DRIVE SMALL BUSINESS GROWTH
Zip Co Limited (ASX: Z1P) (Zip or the Company) is pleased to provide a trading update for the first four monthsof FY21, ended 31 October 2020.
ZIP UNLOCKS EVERYDAY PAYMENTS WITH TAP & ZIP
Zip Co Limited (ASX: Z1P) (“Zip” or “the Company”) today announces the official launch of Tap & Zip, a new product feature that reimagines buy now, pay later (BNPL) instore by enabling Zip Pay users to shop effortlessly anywhere that accepts Visa.
Tap & Zip builds on Zip’s mission to be the first payment choice everywhere and every day. It will see Zip expand into more everyday spend categories and capitalise on the significant instore payments opportunity. Currently, just 13% of stores in Australia are able to accept buy now, pay later options.
Tap & Zip addresses this significant and untapped customer need. Today’s announcement underscores Zip’s obsession with providing merchants and customers the best possible payment experiences. For merchants, this initiative greatly increases access to new customers, bigger basket values and increased sales volumes. For customers, it means they can use Zip Pay to shop everywhere and pay later, always interest-free. Customers can also continue to check-out using Zip’s existing instore solutions, if that is what they prefer.
Tap & Zip follows a strategic product review of Zip’s instore payments experience, which to date has been based on barcode and QR technology, which requires complex point-of-sale integrations. Ever since contactless payments were introduced in Australia in 20063 Australians have universally
accepted tapping as the preferred experience. With 24% of Zip transactions occurring in physical stores compared with the broader Australian retail data, which sees approximately 87% of payments instore – the opportunity to grow the BNPL share is significant.
I find Zip Co Limited an interesting stock at this time. It seems many people are jumping on board with the momentum of this stock. A 300m debt deal is appetising, while racking up $71.7 million in quarterly revenue, a new record. Additionally, monthly arrears have decreased, which is a good sign. With the Christmas period quickly approaching it could be imagined that more people will use the buy now, pay later option. Covid19 has left many jobless and with less disposable income and therefore, the product may achieve our community’s estimations. I currently do not own the stock but if it comes into the $6 price range I will be jumping on board.
Zip Co Limited (ASX: Z1P) has today marked the official launch of Zip Business by partnering with eBay Australia, to offer its 40,000 Australian small and medium-sized businesses the opportunity to access working capital via the eBay marketplace.
The partnership between eBay and Zip Business is designed to give merchants the freedom to purchase inventory, cover short-term expenses such as marketing campaigns, and manage their cashflows, via access to flexible lines of credit. As part of the official launch, Zip is bringing the Spotcap brand into the Zip Business portfolio.
Zip Business will be leveraging the deep credit experience in the Spotcap business and combining it with Zip’s sophisticated risk decisioning and real-time onboarding to rapidly scale the SMB Buy Now Pay Later offering.
This partnership is the first in an exciting series of integrated products and solutions Zip will progressively roll out as it launches Zip Business, supporting both SMBs and its retail and channel partnerships.
Peter Gray, Co-founder and Chief Operating Officer, said: “Zip is extremely excited to formally launch its Zip Business platform to create a suite of products for the small business community, a segment that has been underserved by the traditional lenders in recent years. This comes at a time when Australia’s small businesses are confronting the extreme challenge of COVID-19, which has created enormous pressure on cashflow and ongoing business investment. A thriving small business community is critical to the health of the Australian economy and we are deeply committed to supporting the growth of these important businesses”.
Debt Funding Zip is also pleased to announce that it has agreed to a A$100 million debt funding facility with US firm Victory Park Capital Advisors, LLC (VPC) to fund the Zip Business receivables. Once established, the facility will give Zip the flexibility and capacity required to support the launch of Zip Business.
Zip has a strong partnership with VPC. In November 2015, Zip announced a A$108 million asset backed warehouse facility with the firm, which grew to $200m, making it one of Zip’s earliest debt facility partners.
Z1P - QUADPAY ACHIEVES RECORD MONTH, SECURES MERCHANTS WITH OVER $3BN IN COMBINED VOLUME, FORGES NEW PARTNERSHIPS
Achieved record monthly transaction volume in excess of US$70M in July, representing a 30% increase on the June quarter average and a 600%+ increase YoY.
Added 133,000 customers in July and surpassed the 2M customer milestone in August.
Partnered with multiple Internet Retail 100 merchants including Fanatics and Mercari (TYO:4385) representing combined online volume of over US$3bn. Other notable merchant onboardings include Caleres Group (NYSE: CAL). Enterprise sales pipeline going into the holiday period continues to remain strong.
Established a strategic partnership with Fiserv (NASDAQ: FISV) to offer Buy Now Pay Later (“BNPL”) services across their US based merchant base, launching with Fanatics.
Partnered with MasterCard Vyze to enable BNPL within the Vyze alternative lending stack.
QuadPay continues to deliver industry leading net transaction margins (NTM) greater than 2%.
Secured a debt facility of up to US$200m provided by Goldman Sachs and Oaktree.
Zip Co Limited (ASX: Z1P) (Zip) is pleased to provide a trading update for the month ending 30 April 2020.
Managing Director and CEO Larry Diamond said: “April was another very strong month for Zip, and in particular when considering the shutdown of a large portion of the economy. Our product differentiation and penetration into purchases for online, the home, and everyday spend categories, delivered robust transaction volume. Our revenue model has continued to deliver a strong result in the face of a challenging economic environment for retail more generally. The start of May looks to be considerably stronger again relative to April, and we look forward to supporting our retail partners as social restrictions gradually ease and brick and mortar stores begin to re-open.”
Executive Director and COO Peter Gray said: “The investments we have made in our credit and decision technology platform over the last 7 years, our flexible wallet product, and the unique levels of engagement we have with our customers are paying off. We have seen Zip continue to deliver market leading receivables performance. The increased repayment metrics were extremely pleasing, and we are well placed to continue to successfully manage our portfolio in this challenging time.”
--- click on link above for more ---
Also, one month ago: 08-Apr-2020: March 2020 Quarterly Update
I can't help but feel that Z1P is like the old Betamax video cassette system, which was superior in every way to the VHS system yet got killed by VHS anyway - because VHS was more popular and it had a positive feedback loop. The more stuff that was available on VHS, the more people used VHS, the more stuff became available for VHS, and so it went - until Betamax just died. Of course so did VHS eventually, but not before becoming the dominant format globally. VHS was itself eventually replaced by DVDs and Blu Ray. Afterpay is the VHS of Australia and zipPay seems to be the Betamax of Australia. IMHO. Z1P appears to have better client/customer screening processes, so will have less bad and doubtful debts, and there are other advantage to their business model as well, but APT has the first mover advantage, and the momentum, and they're going to be the winners, with the vast majority of market share - particularly here in Australia (they've already achieved that, but I think their market share will just increase further from here) unless they implode under a mountain of debt. I don't have good visibility of the competitive landscape for them in other countries. I know that if people view their business model as innovative and advantageous, others will try to copy them, with a few tweaks, to get in on that market and grab a slice of that pie. I don't invest in either company. I'm very wary of 2nd tier and lower tier lenders. As many have said, APT and Z1P have NOT had their business models properly stress-tested through the full economic cycle. That is probably starting to occur now, and it might expose some cracks. Lower tier lenders are fraught with risks in my opinion and there are also some questionable practises employed by some of them. I have avoided TGA (Thorn Group) and CCV (Cash Converters) over the years for similar reasons, and look what has happened to them! While I see the stake that Tencent has just bought in APT as a big plus, I'm still not tempted to jump onboard that runaway train.
When valuing Z1P, The two main metrics that stand out and investors have to pay particular attention to is transaction volume (TV) and current active customers (AC).
Z1P forecast for FY20E is $2.2b TV, and 2.5m AC. Zip's 2Q trading update showed active customers of 1,754k, ahead of UBS (1,688k) prediction. Revenue yield did initially fall against the previous quarter from 16.8% to 16.2% respectively. This was due to the Partpay acquisition and it initial timing and Christmas period. While Christmas is a high volume transaction period, the revenue and interest generation from these periods had not been realized.
UBS believes Z1P can easily hit their target of $2.2b in TV however are bearish on the customer base, stating that they believe 2.1m customer is a more realistic target. As per the most recent quarterly, Z1P saw average customer base at 1.8m and merchants grew to close to 21,000. Z1P's deal with amazon is surely to effect the price materially and this is can be seen by Z1P uping their TV to $2.3b annualized.
But if we focus on the solely on the customer base, and use a 1.8m round figure, if look at the previous corresponding quarters and estimate that forward. The previous corresponding quarters, Q3 and Q4 saw Z1P on board customers to their platform of 143k and 170k (313k total). This brings an assumed total of customers by the EOFY to 2.113m. So its easy to see where UBS got their figure. However this doesn't include the current UK segments. The roll out of the UK segment has seen no information given to investors, however if Z1P wants to achieve its 2.5m AC base, the UK segments needs to contribute substantially, also these numbers assume no YoY growth. Assume these targets are hit, TV will increase substantially and revenue by extension
Generally per $1b in TV, $80m in revenue is generated. Revenues expected for FY20 is 160m and by the looks of the basic numbers, this revenue figure look achievable (take with a grain of salt). While it is very hard to value unprofitable companies. Taking the forecast revenue and multiplying by the P/S ratio (160 x 16.3) and the dividing by shares on issues 390m. We get a price target of $6.68, shave 25% for safety and poterntial cap raises, the final assumed target is $5.01. This is however using fairly conservative estimates. If Z1P achieves their target pf 2.5m customers, i see a $5.25 - $5.75 price target by mid next year, which is not unreasonable.
One more thing to mention, if Z1P executes on all front, profitability is forecast sometime FY21, most likely by the half year results. This could also see price action strengthen.
all information taken from:https://www.asx.com.au/asx/share-price-research/company/Z1Phttp://zipmoneylimited.com.au/files/research/2020-01-13--UBS_-_2Q20_trading_update.pdfhttps://app.stockopedia.com/share-prices/zip-co-ASX:Z1P