Stated ‘Cash EBTDA’ $67m / Actual EBDTA ~$29m (or EBT ~$19m)Deductions (~$38m + ~$10m for CapEx)These represent additional bad-debts not yet written off (true expense)- Share-based payments ~$6m
Company paying employees in shares rather than cash (true expense)
- Capital investments ~$10m
Investments in PPE and software (true D&A expense)
Slides taken from ZIP's results presentation (confirmed by also reading H1 financial report).
Key takeaways- H1 true profit margin is much lower than it may appear (approximately half)
- True bad debt expense (actual/real number) relative to TTV is actually higher than 2024 H1 (the provision for ECL is also likely to be understated meaning the ~$32m addition to bad debts above is insufficient)
- Following cyclical lows, true bad debts have risen rapidly over the past 6 months (suggesting a higher figure again in 2025 H2 vs. H1)
I understand that this post will ruffle some feathers, however, it is
not my intention to fight with ZIP shareholders (respectful debate encouraged).
Full disclosure:
- Modest short position held in ZIP shares as I believe their true value is significantly lower than the current share price.DYOR - this is not intended to be financial advice
(20min delay)