I can’t see anything in the report that specficially warrants the share price fall today
@TB51.
$20 mill EBTDA and year-to-date Group cash EBTDA of $45 mill reads very well to me, particularly given past informal guidance. Perhaps mkt overall average broker expectations on its 2nd half EBTDA were even greater than the company saying “not less than its 1H24 result” ($31 mill). But more likely ANZ customer numbers and transactions volumes falling further than expected caused some concerns.
I am repeating what others have already said, but transaction volumes +15% vs 3Q23, revenue +27% vs 3Q23 and impressively another increase in revenue margin of 80BPS on 3Q23, need reiterating. But obviously largely driven by the US, with mkts perhaps disappointed with lack of customer number growth overall, given the ANZ weighing.
All important cash margins lifting from 2.9% to 3.9%. That’s impressive. The US business going gangbusters but the Aussie business stagnating in transaction numbers – hardly surprising as there was a far longer lag in monetary policy effects in Australia than the US given mortgage structures and consumer spending patterns – but not revenue numbers (the business evolution). But that’s probably driving the share price fall. I don’t think that reflective of entrenched longer term issue with the mature mkt of ANZ, just more from monetary policy lag as said.
The ANZ mkt is already near saturated on customer proportional use, no surprise there for me, but the company still growing margins by its new products (more credit lending) offered to a higher number of existing regular customers with peripheral users naturally falling off in ANZ. US still has massive growth potential, but the mkt hasn’t seen enough of product evolution to not worry about slowing user figures in BNPL’s – the old “if they aint growing, the model doesn’t work” BNPL arguments, which rather ignores the clear product evolution of the business with for example ZIP Money and ZIP Plus.
Bad debts and arrears are pretty stable. I see one of the usual trolls tried to claim ANZ at all time highs – clearly not the case. No obvious concerns there – I personally expected ANZ bad debts to be creeping to 3.75% a little quicker as Bullock November bicep flex and pose only cements the creeping effects of past rates rises that begin to bite – who of us doesn’t know a household or two struggling in the last year and the buffers starting to wear out?
There has been a bit of takeover pump on Hot Copper and in the financial media in the last couple of months. It’s a good report given the wider circumstances, delivering/beating overall business metrics in most places, but transaction numbers and falling customers in ANZ obviously a bit of a concern for those who perhaps don’t appreciate how bad things are getting in the Australian economy, with the RBA and government policy running in opposite directions. Perhaps it needed to be a stellar trading update to avoid a bit of a pull back from the take over pump premium?
Contrary to the resident clown on here, I did not NET sell all my position in the 90’s – I clearly declared I sold on the formal earnings and picked back up on close after a massive rally and subseqeunt tank (25% move in a day - I make no apologies for trading that) in my disclosures (both verbal and formal). ZIP’s has had a massive run up since October. A retrace not surprising to me. I reckon it only got over $1.40 recently on takeover pump (and no doubt dump). Its moved 300% in six months!:
$1.10-1.40 seems a more reasonable range on fundamentals until more formal earnings and insight on Aussie numbers (perhaps +9% ANZ merchant growth was impressive and overlooked with the customer numbers). I will certainly buy on the unlikely chance it falls below $1, as consistently said – I am a bit of a weirdo buying stocks back lower than I sold them and buying stocks when they are clearly under-valued.
(GLTAH and apologies if I don't come back on much with all the inevitable trolling that will ensue this post).
(20min delay)
