Those servicing the financially disadvantaged such as ZIp and CCP without any recoverable assets will be particularly hard hit.
CCP is already experiencing stress with 3 profit warmings and they typically acuire loan books at 15-19 cents on the dollar whereas Zip is advancing circa 96 cents on the dollar.
Once the defaults start to energe the warehouse funders will reduce the amounts they are prepared to advance and Zip will have to fund a greater percentage and even 10 percent on a $2 billion facility demands a $200 million reserve from operating cash flow.
They simply do not have the cash flow to support this and bankruptcy is inevitable.
Those servicing the financially disadvantaged such as ZIp and CCP without any recoverable assets will be particularly hard hit.
CCP is already experiencing stress with 3 profit warmings and they typically acuire loan books at 15-19 cents on the dollar whereas Zip is advancing circa 96 cents on the dollar.
Once the defaults start to energe the warehouse funders will reduce the amounts they are prepared to advance and Zip will have to fund a greater percentage and even 10 percent on a $2 billion facility demands a $200 million reserve from operating cash flow.
They simply do not have the cash flow to support this and bankruptcy is inevitable.
"Tsunami of bad debts" heading towards ZIP... Wow that is some higher quality downramping <moderated word meaning same as faecal matter>. Hope the tradie is learning about how false equivalence can be used.A new high in lows acts for HC ZIP and it was already a low base.
Who requested moderation must have been very upset by faecal matter references.
Here is the basics about ZIP
Strong Cash Position: Zip ended the quarter with $327.2 million in cash and cash equivalents, demonstrating strong liquidity and the ability to manage short-term obligations.
Positive Net Cash from Operating Activities: Zip generated $90.4 million in net cash from operating activities for the current quarter and $204.1 million year-to-date, indicating robust operational performance.
Effective Debt Management: Despite the repayments, Zip successfully managed its debt by refinancing existing facilities and securing new funding, ensuring continued liquidity and operational flexibility.
Unused Financing Facilities: Zip has $386.8 million in unused financing facilities, providing a significant buffer and additional liquidity to support ongoing operations and growth initiatives.
Responsible Lending Practices: Zip is a licensed and regulated credit provider, committed to responsible lending practices, which reduces the risk of a surge in bad debts.
Growing Receipts from Customers: With $216.8 million received from customers in the current quarter, Zip's revenue streams remain strong and consistent.
Prudent Cost Management: Zip's payments for advertising, marketing, staff, and administrative costs are well-managed, ensuring that operational expenses do not outstrip income.
Successful Refinancing Initiatives: The company successfully completed several refinancing initiatives, including a $300 million rated note issuance and a new $300 million warehouse facility, showcasing its ability to secure favorable financing terms.
Global Expansion and Market Presence: Zip operates in key markets including Australia, New Zealand, and the Americas, which diversifies its revenue streams and reduces market-specific risks.
Commitment to Growth and Innovation: Founded in 2013, Zip continues to innovate with people-centered products that connect millions of customers with tens of thousands of merchants, demonstrating its ongoing commitment to growth and market relevance
ZIP Price at posting:
$1.26 Sentiment: Hold Disclosure: Held