Laybuy : Appendix 4E Preliminary Final Report

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APPENDIX 4E PRELIMINARY FINAL REPORT

31 MAY 2022

Under ASX listing rule 4.3A

Company details

Name of entity	Laybuy Group Holdings Limited
ARBN	642 138 476
Reporting period	31 March 2022
Previous period	31 March 2021

Results for announcement to the market

Change from previous period

		%	NZ $000
Income from ordinary activities		45%	14,536
Loss after tax from ordinary activities		25%	(10,301)
Loss for the period attributable to ordinary equity holders		25%	(10,301)

	2022	2021
Net tangible assets per ordinary share	NZ$0.10	NZ$0.20

Dividends

No dividends are proposed, and no dividends were declared or paid for the year ended 31 March 2022.

Entities over which control has been gained or lost

During the year ended 31 March 2022, Laybuy Group Holdings Limited gained control, or incorporated the following entities:

Name	Date control gained
	or incorporated
Laybuy SPV (NZ) Limited	16 September 2021

During the year ended 31 March 2022, Laybuy Group Holdings Limited lost no control of any entities.

Details of associates and joint venture entities

Not applicable.

Commentary on results and other required information

The remainder of the information requiring disclosure and any other significant information for the Appendix 4E is contained within the commentary below and the FY22 preliminary unaudited consolidated financial statements attached.

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Accounting Standards

The FY22 preliminary unaudited consolidated financial statements have been prepared in accordance with Generally Accepted Accounting Practices in New Zealand. They comply with New Zealand Equivalents to International Financial Reporting Standards (NZ IFRS), and other New Zealand accounting standards and authoritative notices that are applicable to entities that apply NZ IFRS.

Progress of the Audit

The Appendix 4E is based on the FY22 preliminary consolidated financial statements which are in the process of being audited. The Directors are not able to determine whether there will be an emphasis of matter around going concern or a modified opinion, due to the audit still progressing.

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FY22 Results and Operating Performance

Laybuy Group Holdings Limited ("Laybuy" or "the Group") is a Buy Now, Pay Later ("BNPL") provider, founded in Auckland, New Zealand. The company currently operates in three countries and in the past year, more than NZ$860 million was spent through Laybuy's fully integrated platform.

Laybuy has grown strongly since it was founded in 2017, and it is now recognised as one of New Zealand's leading BNPL providers and a top three provider in the United Kingdom. It is continuing to build its brand and secure market share in Australia.

Inspired by the traditional lay-by model, Laybuy allows consumers to make a purchase and spread the cost across six, weekly, interest-free instalments. The first payment is made at the point of sale. For merchants, Laybuy provides a low-risk credit option and a network of customers.

Laybuy primarily generates its income by charging merchants a transaction fee, which represents a small percentage of the value of a product a customer has purchased using Laybuy. The company also derives some revenue through the charging of a late fee, which is levied when a customer defaults on a scheduled payment.

Laybuy distinguishes itself from its competitors with innovative features like Laybuy Boost, Laybuy Global, Laybuy Card and Virtual Card (App Exclusives), which all work together to make it easier for consumers to pay with Laybuy. Laybuy is now an option for payment at 14,000 merchants, including at more than a third of the UK's top 500 merchants.

Laybuy is committed to being a leader in responsible credit and is well-positioned should anticipated changes to the regulatory framework be implemented in the markets it operates. Every new Laybuy customer is credit checked and strict credit limits are put in place to ensure they are not taking on debt they cannot afford. Laybuy also has a robust hardship policy in place, which commits the company to working proactively with customers in genuine financial hardship and to tailor individual solutions to help them get back on track.

Laybuy saw solid growth in FY22, with gross merchandise value (GMV) up 47% on prior year to NZ$868 million and income increasing by 45% to NZ$47.1 million.

• GMV1 increased to NZ$868m (up 47% or NZ$279m on PcP)
• Income for the year was a record NZ$47.1m (up 45% or NZ$14.5m on PcP)
• Active Customers2 reached 931,000 and increased by 175,000 or 23% on PcP
• Active Merchants3 reached over 13,700 and increased by 4,600 or 50% on PcP

1. GBP and AUD denominated GMV have been converted to NZD at the average historical exchange rates for FY22
2. An 'Active Customer' is a customer who has made a purchase through the Laybuy platform within the 12 months prior to the relevant period
3. An 'Active Merchant' is a merchant who has received payment for a purchase through the Laybuy platform within the 12 months prior to the relevant period

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GMV by region (NZ$m)

UK ANZ

868m

589m

226m

126m

38m

FY18 FY19 FY20 FY21 FY22

Active Customers ('000)

UK		ANZ	931
			756

403

196

86

FY18

FY19

FY20

FY21

FY22

Group Income (NZ$m)

47.1m

32.6m

13.7m

7.2m

1.9m

FY18 FY19 FY20 FY21 FY22

Active Merchants

UK ANZ	13,700

9,126

5,204

3,189

1,040

FY18

FY19

FY20

FY21

FY22

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	NZ$'000		FY22		FY21		Change		Change
				$'m		%
	Total income	47,103	32,567	14,536	45%
	Other income	-	107	(107)	(100%)
	Merchant and marketing expenses	(17,853)	(12,200)	(5,653)	46%
	Employment expenses	(14,813)	(10,372)	(4,441)	43%
	Transaction expenses	(11,004)	(6,612)	(4,392)	66%
	Consumer receivables impairment expenses	(30,769)	(15,132)	(15,637)	103%
	Platform development expenses	(1,930)	(1,085)	(845)	78%
	Depreciation and amortisation expenses	(1,513)	(991)	(522)	53%
	Other operating expenses	(15,407)	(14,296)	(1,111)	8%
	Other gains/(losses)	655	(3,986)	4,641	(116%)
	Total expenses	(92,634)	(64,674)	(27,960)	43%
	Segment operating loss	(45,531)	(32,000)	(13,531)	42%
	Finance expenses	(5,968)	(9,495)	3,527	(37%)
	Loss before tax	(51,499)	(41,495)	(10,004)	24%
	Net transaction margin	5,074	10,741	(5,667)	(53%)

Financial position

The Group's net asset position has reduced to NZ$26.0 million as at 31 March 2022, down from NZ$36.7 million as at 31 March 2021. This is primarily due to an increase in borrowings to support the consumer receivables ledger as well as the losses for the period. The customer loan book continues to grow in line with GMV growth.

Total liabilities as at 31 March 2022 were NZ$35.3 million, an increase of NZ$12.0 million. This is the result of an increase in drawdown on debt facilities to support the growth in the customer loan book. This includes a new debt facility with Partners for Growth, which is supporting the UK loan book.

Capital management

The Group raised A$40 million through an Institutional Placement and Share Purchase Plan in May and June 2021, which was used to accelerate UK growth and enhance Laybuy's technology and product offering.

The Group has two debt facilities with Kiwibank and Partners for Growth. The combined facility limits are NZ$86.5 million. As at 31 March 2022, NZ$24.2 million was drawn against the receivable book balance and advance rates.

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