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Credit and digital payment services company, Zip Co Limited (ASX: Z1P) announced its financial results for the year ended June 30, 2018 on Tuesday. The company reported an increase in revenue by 138% to $40.4 million in comparison to $17 million in previous financial year 2017. The company posted a loss of $22.5 million, greater than the loss of $20.7 million recorded in FY17.
The financial results of the company reported cashflow breakeven on a monthly basis in the last quarter of fiscal year 2018. The company utilized $290 million of its total $380 million funding facility as at June 30, 2018. The company reports to document an additional funding facility of $120 million making it $500 million in aggregate which is stated to provide substantial funding headroom for strong growth in FY19.
[optin-monster-shortcode id="wxhmli4jjedneglg1trq"]The Group wrote off $8.2 million in bad debts during the financial year, as compared to $1.9 million in the prior financial year. Net bad debts approximately doubled itself from 1.28% in fiscal year 2017 to 2.61% as on June 30, 2018. However, it is still said to be in line as management expects it to be 3%.
Despite receiving proceeds of $41 million from the share issue of Westpac and from the conversion of options, cash and cash equivalents of FY18 declined by $6.56 million to $12.65 million in comparison to $19.21 million in previous corresponding year. This reflects an operating cash inflow of $1.4 million for the year. No dividend has been declared by the company in financial year 2018.
Customer base was up by 145% to 738,000 as Zip is targeting 1 million + consumers in FY19. On an average, consumer are repaying their entire amount in just over seven months which outlines healthy capital recycle rate of the company. The company targets to capitalize on the positive landscape for Fintech companies while rolling out a new smartphone application in FY19.
Stock of Z1P was down by 2.21% to $0.885 on August 07, 2018 but it recovered by 9% on August 08, 2018 to $0.965.
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