Zip targeting $1b of sales and 1m customers

More than half a billion dollars of sales went through credit card disrupter Zip Co’s payment system over the latest financial year, more than twice the volume of the previous year but only a quarter of that spent on competitor Afterpay.

But as the popularity of “buy now, pay later” offerings continues to surge among Millennial shoppers, Zip – of which Westpac Banking Corp owns 17 per cent – is targeting $1 billion of sales over the coming year.

“We are only just beginning and are well positioned for a bumper 2019 financial year,” said CEO Larry Diamond.

Zip announced a $1.2 million loss at the cash earnings level for the year ended June 30, on revenue of $40.4 million, up 138 per cent. It said it broke even in the fourth quarter and is forecasting to remain in the black.

The stock fell 2.7 per cent to 88¢ in early trading on Tuesday after rising 4.6 per cent on Monday. It’s well off its $1.30 high for the calendar year – struck in February, after the stock doubled in January – but well above the September 20¢ 2015 float price.

The market reacted to a rise in net bad debts to 2.61 per cent of receivables, up from 1.28 per cent a year earlier. But this was in line with management expectations which forecast them to trend towards 3 per cent.

Customers of 738,000 was up 145 per cent, and Zip is targeting 1 million next year as it rolls out a new smartphone application.

The number of retailers rose 139 per cent to 10,500. Recent sign-ups include Kogan, Tiger Airways, Rebel Sport and Supercheap Auto, Fantastic Furniture and Officeworks.

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Source: Zip targeting $1b of sales and 1m customers | afr.com