Afterpay Touch Group Limited (ASX APT) released the global business update and regulatory update report today. The APT share price fell by more than 2% off the back of the report.
Afterpay Touch Group reported an increment in underlying sales and an increase in the number of active customers and active merchants. The company also reported its expansion in the US market, launch in the UK market, and updates on the business in Australia and New Zealand.
Afterpay is one of our top stocks to buy in 2019.
About Afterpay Touch Group Limited
(ASX APT) is a leading payments company that uses advanced technology to offer solutions to its large customer base. The group consists of Afterpay and Touch products and businesses.
Afterpay technology allows the retailers to offer the service of buy now and pay later, without entering into a loan or paying an interest or upfront fee. ATG has more than 3.5 million active customers and more than 25,000 retail merchants onboard for Afterpay. On the other hand, Touch provides digital payment services in telecommunications, health, and retail sectors.
Business and Regulatory Update
Afterpay Touch Group the business and regulatory developments today. In terms of the global business, revenues for the 11-months ended May 31, 2019, were AUD 4.7 billion, up 143% in the same period last year.
At the end of the same period, the company has added 7,900 new customers and 7,400 active merchants. The gross loss, net transaction loss, and net transaction margin of Afterpay Touch Group have been in line with the expectations.
Afterpay Touch Group also provided an update about its expansion in the US, number of merchants, and underlying sales, and its launch in the UK market. Afterpay is functioning under the name Clearpay in the UK and is live after a soft launch.
The report also gives an update about the performance of Afterpay Touch Group in Australia and New Zealand. The rate of addition of new customers and new merchants is in line with the expectations. Afterpay has also expanded to new verticals, including healthcare and travel, in the local market.
In terms of regulatory updates, Afterpay Touch Group informed that it has accepted and supported the Product Intervention Powers legislation, and has amended its anti-money laundering/counter-terrorism, financing compliance framework. Additionally, Afterpay has also canceled its Australian Credit License as it is not a traditional credit product.
Financial Position of Afterpay Touch Group
Afterpay Touch Group has a steady and consistent increment in its total revenues and gross profit over the past three years. However, the company is still generating negative operating income and net income.
In all the target markets, Afterpay Touch Group has been able to maintain its net transaction margin and other financial parameters in line with the guidance and expectations.
The stock of Afterpay Touch Group is a good buy for investors with a long-term perspective. The company is not yet generating positive operating income and net income; however, the potential is substantial.
Afterpay Touch Group is expanding across the world and has shown consistent growth in the number of active customers and active merchants. The growth of the company in the US and the UK, in addition to Australia and New Zealand, has given the required traction. Despite the current financial performance, the future looks bright for the APT share price.
Are you still looking for the best stocks to buy in 2019? We've put together a free report on 5 stocks that we think are the best buys on the ASX right now. Download it instantly here.
This is general advice only. MF & Co Asset Management has not considered your personal financial needs, objectives or current situation. This information is not an offer, solicitation, or a recommendation for any financial product unless expressly stated. You should seek professional investment advice before making any investment decision.