FromMedia articles and Prospectus
https://laybuyinvestors.com/FormBuilder/_Resource/_module/Rsb7doRVwkel_mWy-7qLGQ/file/Laybuy-Prospectus.pdf
https://www.copyright link/street-talk/laybuy-ipo-bookbuild-launches-bell-potter-canaccord-on-ticket-20200727-p55fr6
https://www.copyright link/street-talk/bombora-perennial-back-bnpl-player-laybuy-s-pre-ipo-round-20200715-p55c5a
SOI 174,463,646
Mcap $246.0 million
Cash 46.1 million
EV $199.9 million
EV/revenue for 12 months to 30 June 2020 12.3x
EV/annualised quarterly revenue 8.8x
Top 20 got 80 % of the register with some well term Instos i.e BOMBORA INVESTMENT MANAGEMENTand WASHINGTON H SOUL PATTINSON AND COMPANY LIMITED . Suggesting a tight register !
Escrow Management : 96,998,888 out of 118 mil existing shares ( Pre Cash ) are escrowed. Only 22 mil shares are not in escrow whichare issued under the IPO price
Laybuy is a fast-growing “Buy-Now-Pay-Later” (BNPL) provider with a market leadership position in New Zealand and a growing presence in the United Kingdom (UK) and Australia.
Some Key points regarding their business:
- Allows customers to buy now, pay c.15% of the selling price upfront, and the balance over the following five weeks
- Free for customers with no interest to pay
- Sign up and credit check in minutes, via the Laybuy smartphone app or website
- Simple, quick and low cost to integrate for Merchants
- Since official UK launch in February 2019, Laybuy has grown rapidly
- Big Merchants and Partners Signing up in the UK
- Merchant Partnerships Laybuy has developed a number of strategic partnerships which are aimed at strengthening the business model across multiple high growth sectors, and widening its appeal to different groups of merchants and target consumers. These include JD Sports, the Hut Group, Boohoo Group Plc, Cotton On and others.
- Major sporting clubs Laybuy’s relationships with major English Premier League Football clubs are also expected to assist Laybuy to grow awareness of the Laybuy platform, drive customer acquisition and increase revenue and transactional volumes.
- Laybuy provides BNPL services for this year’s FA Cup finalist, Arsenal FC’s, online store. Laybuy launched on the Arsenal store in the United Kingdom for merchandise in April 2020 and Australia and New Zealand are expected to launch during the third quarter of 2020.
- Laybuy is the official BNPL partner of Manchester United and Manchester City FC in New Zealand, Australia and the United Kingdom.
MasterCardpartnership:
- Laybuy has entered into a partnership with MasterCard which will enable it to issue digital cards to Laybuy customers in New Zealand.
- Laybuy has engaged a major payments technology specialist to bring a digital card to market in Australia and the United Kingdom. Issuing a digital card to Laybuy customers will allow Laybuy to provide a fully functional ‘tap and go’ BNPL offering anywhere that offers both contact less payment and Laybuy.
- The product aims to transform the customer and merchant experience for in-store BNPL transactions.Significant boost for Laybuy’s in-store offer Partnership with Mastercard’s Fintech Express program to issue digital cards through MasterCard in New Zealand Digital card is designed to integrate with the existing Laybuy App and offer integrated payment support for the majority of mobile devices, including iOS and Android
- Benefits Laybuy customers and merchants with improved in-store experience and quicker, more seamless transactions
- Laybuy is the first Australasian partner to enter the program MasterCard approved an issuing license to Laybuy covering New Zealand in June 2020 Laybuy is expecting to roll out the new digital card in all markets by the end of 2020
LaybuyGrowth Strategy:
·Laybuy’sglobal growth strategy is anchored around leveraging the Company’s salable platform and proven execution Increase market share in already established geographies Improve Laybuy’s penetration in existing industries and sectorsthrough co-branded marketing campaigns
·Laybuywill seek to expand in the health, beauty, digital, travel and ticketing verticals Rapidly grow in the UK and other international markets
·TheLaybuy platform is built for global scalability In the UK Laybuy is targeting large, influential merchants to drive scale, network effects and brand recognition Targeting payment providers and global digital agencies to refer merchants USA among other countries to potentially form part of
·Laybuy's expansion plans over the medium term: New Laybuy Platform Enhancements to drive network effects Future platform enhancements to improve operational efficiencies and merchant and consumer experience Laybuy will focus on increasing user engagement and repeat purchases through improvements to the Laybuy App Card project, including Mastercard collaboration will deepen consumer engagement with the Laybuy App
Financial Information
·FY20revenue of $13.7m up 92% on prior year
·ARRgrowing rapidly, June 2020 quarter ARR of $24.2m, up 130% on pcp
·UKhas grown rapidly from Jun-19 and now represents 46% of revenue
·Rapidlygrowing GMV, June-20 annualised GMV is more than double FY20 GMV
·NTMdeclined in FY20 with entry into new markets (Australia and the UK – investing in future growth) which generally results in higher defaults due to adisproportionate % of new customers
·Defaultshave declined over FY20 and are continuing to decline from 4.1% in FY20 to 3.4%in the June 20 quarter
·NTMimproving from 0% in FY20 to 0.5% in Jun 20 quarter – returning towards FY19levels of c. 2%
·Formost of FY19, Laybuy generated Net Transaction Margins (NTM) of over 2%
·Onentry into the UK, the Company experienced an increase in the level of defaults, which has impacted NTM
·As the number of repeat customers increases in the UK, and through active steps by management to reduce incidences of fraud, defaults have reduced rapidly and led to a recovery in the group’s net transaction margin since entering the UK
·Defaultrates in the UK have been reduced through fraud mitigation systems such as SiftScience, 3D Secure, and Onfido
·NewZealand is Laybuy’s oldest geography, and demonstrates high levels of repeatcustomers and purchase frequency per customer
·Purchasing frequency has been increasing over time, with the earliest joining customers the most frequent users of Laybuy in New Zealand
·UK and Australian cohort experience are consistent with NZ
·Managementexpects that net transaction margins will improve as Australian and UK repeatcustomer and purchase frequency will increase towards New Zealand levels
·Employmentexpenses have increased from FY18 to FY20 through increased headcount
·Marketingexpenses have increased to support the expansion into the UK and Australia
·Receivablesimpairment expense has increased due to the entry into new geographies – UK andAustralia
Conclusion
In May 2016 I read a prospectus of this fintech company which was raising 25 Mil at 130 mil EV and $ 1 share price and very little revenues! I didn’t like it and I didn’t take it and today we know that company as AFTERPAY and share price is $ 80 per share!
So when I read the prospectus of LayBuy , I did not make that same mistake and I took some stock in this highly oversubscribed IPO.
There are a lot of peer comparison of LBY vs OPY vsAPT vs SZL already on several threads here and by any parameters LBY is emerging as the cheapest and fastest growing BNPL provider on ASX
IMO LBY is higher quality business than OPY and LBY is number one BNPL player in New Zealand and Number second in UK
OPY Mcap is 370 mil while LBY EV is 199 mil
Looking at all these parameters and the quality of LBY’s business , IMO it should easy double on listing day and I would be comfortable adding more up to$ 3 price ( 500 mil mcap)
Please DYOR
All IMO
GLTAH
