The Sydney-based ZIP Co Limited (ASX: Z1P) is a buy-now-pay-later industry player that provides digital payment solutions to merchants, consumers, and small & medium enterprises across Australia and New Zealand. It operates under the completely digital Pocketbook, Zip Money and Zip Pay brands, and utilise big data in its exclusive technology.
Recently, on March 21st, 2019, the company introduced a Share Purchase Plan (SPP) for the eligible existing shareholders, who were on the Zip register at 7:00 pm (Sydney time) on Wednesday, March 13th, 2019. Under the SPP, the shareholders can subscribe for up to $ 15,000 worth of new shares in Zip at the discounted price of $ 1.53 per share. The company is planning to raise up to $ 5 million under the SPP, exceeding which the applications will be scaled back. The offer is scheduled to open on Monday, March 25th, 2019.
Prior to this, Zip had successfully finished the oversubscribed placement of new fully paid ordinary shares (~ 28 million) on March 14th, 2019, to institutional, sophisticated and professional investors raising around $ 42.8 million, before costs, at an issue price of $ 1.53 per share. The Placement shares are scheduled to be allotted and issued on Friday, March 22nd, 2019. The company aims to use the proceeds from the placement and the SPP to drive growth initiatives and build a robust financial position.
Earlier in February 2019, Zip also informed that the Senate Committee Recommendations on credit and financial services were in line with the company’s current practices. The efforts by the Government to increase minimum standards across the Buy Now Pay Later (BNPL) sector were centred around three pillars of responsibility, transparency, and customer support. According to Zip, the report reflects a balanced regulatory framework that would strengthen community confidence in the BNPL sector.
Zip released its financial results for the half-year ended December 31st, 2018, posting revenue from ordinary activities at around $ 34.23 million, reflecting an improvement of 114% on the prior corresponding period (PCP) ended December 31st, 2017 with $ 15.97 million. Cash inflows from operating activities amounted to $ 7.56 million while the investing activities led to significant cash outflows of $ 173.96 million on account of massive payments for the plant, equipment, software development, and net movement in receivables.
During the concerned period, the Group increased customer numbers to over 1 million, while the number of merchants accepting Zip risen from 10,500 to over 12,600. Zip added significant Australian retailers including Bunnings Warehouse, Officeworks, Target, Appliances Online and the Super Retail Group to its payment’s platform. More on the result could be read here.
Zip has a market cap of AUD 585.97 million to date. The Z1P stock price closed at AUD 1.725, down 7.26% by AUD 0.135 with the end of the trading session on March 21st, 2019. The total outstanding shares is 315.04 million.