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Laybuy Holdings’ (ASX:LBY) Quarterly Update Leaves Share Prices Soaring

  • January 14, 2021 05:55 PM AEDT
  • Hina Chowdhary
    Director, Equities Research Hina Chowdhary
    1438 Posts

    Hina Chowdhary is the Director, Equity Research at Kalkine and has an extensive experience of about 15 years in the area of Research, which includes 5+ years in Equities Research particularly.She has earned a Master of Science degree from the renowne...

Laybuy Holdings’ (ASX:LBY) Quarterly Update Leaves Share Prices Soaring

Summary

  • Laybuy Holdings released its quarterly trading update showing strong GMV figures for Q3 FY21.
  • LBY share saw a single day uptick of 13.7% post the release of the quarterly update and traded at AUD 1.45, reaching its 4-week high.
  • The company’s new strategic initiatives, coupled with its entry into the US markets, could further profit in Q4 FY21.
Gold MTF non-AMP

Laybuy Holdings Ltd (ASX:LBY) announced their trading update for Q3 FY21 showing strong figures for the company's Gross Merchandise Value in the quarter. During the three months ending 31st December 2020, Laybuy achieved a Gross Merchandise Value of NZD 182 million, a record high figure for the company.

This led to a single day spike of 13.7% in the share prices of Laybuy Holdings. ASX:LBY closed at AUD 1.45, its highest in roughly four weeks.

Promising Figures

Quarter 3 of FY21 saw the GMV for Laybuy increasing by 184% over Q3 FY20 and by 44% over the last quarter. This monumental increase represents an annualised GMV of NZD 730 million for the company.

November was a strong month for the company with a GMV of NZD 71million for the month, a whopping 220% increase over November 2019’s GMV figures. This year’s gains were accrued to the company's new strategic initiatives, and the quarterly growth was backed by the Black Friday and holiday sales.

The benefits of the Black Friday sale seeped into December as well where the GMV went up by 168% over December 2019, reaching NZD 67 million in the month. December was the second most profitable month across all regions for Laybuy.

New Company Initiatives at the Heart of This Increase

One of the company's key initiatives includes its “Tap to Pay” facility, which was launched for in-store purchases in partnership with Mastercard.

Laybuy also launched the partner programme in Q2 with major e-commerce platforms. Alongside these changes, Laybuy also added material merchants in Q2 FY21, including Wilko and select Fashion in the UK, EB Games, Culture Kings, Mi Piaci, Mocka and Cotton On in ANZ. Laybuy’s inbound marketing strategies have been beneficial in acquiring smaller merchants as well. Smaller merchants have a lower cost of acquisition, lesser onboarding requirements and they are able to bring higher merchant fees.

UK was a major player in uplifting the GMV figures for Laybuy. The GMV for UK over Q3 FY21 was NZD 100 million. This was an increase of an unforeseen 624% over Q3 FY20 for the UK region. The GMV for ANZ region for the same period was NZD 182 million, an increase of 63% over the previous corresponding period.

This significant growth in the UK was backed by the shift towards online purchasing in the country. As COVID restrictions have been accelerated in the UK, people are moving towards online methods instead of in-store alternatives. Laybuy is set to capitalise on this market shift by launching its digital card product. It is expected to be launched in the UK once these restrictions ease.

Amid this exceptional performance, Laybuy saw its active customers increasing by 21% QoQ and 117% on a previous corresponding period to reach 687,000 in Q3 FY21. Additionally, the repeat customers increased from 65% to 73% on the previous corresponding period in ANZ and 37% to 59% over the same period in the UK.

The next quarter for Laybuy would be marked by its US market entry, following its soft launch in Q3 FY21. The company would expand its customer base through the newly launched initiatives like the “Tap to Pay” functionality and the Laybuy Gift Credit Card store's launch. Eased restrictions across the UK might contribute further to the gains in Q4 FY21.

 


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