APT - Afterpay Limited

[bigdog]

The Age reported today

Afterpay rival forces name change in UK

Buy now, pay later platform Afterpay was forced to adopt a different brand in the UK after a rival European company secured rights to use the Afterpay name in the critical market.

The European incumbent is an Amsterdam-based company owned by Arvato – the financial services arm of German conglomerate Bertelsmann.

Arvato successfully opposed Afterpay Australia’s attempt to trademark its name in the UK in June last year.

Arvato’s Afterpay offers a postpay service where online shoppers can delay payment until after they receive the goods they have purchased . Arvato’s Afterpay funds the transaction until the customer pays.

‘‘ With Afterpay you only pay for what you keep. Therefore: you pay afterwards!’’ says the company website.

Afterpay Touch, in comparison, offers a payment by instalment process over three weeks, and it also funds the transaction until its customers complete the payment.

Arvato’s Afterpay said it was the most popular post-payment service in its home base of the Netherlands , with 4 million users on its platform.

More than 70 million online purchases were made in the Netherlands last year with spending totalling €7.2 billion ($11.5 billion). Afterpay accounted for 15 per cent of these transactions.

Arvato Afterpay was approached for comment about its expansion plans. The company has held rights to the Afterpay name in the UK since February 2011.

The UK market offers a significant growth opportunity for the Australian company after its launch into the US about eight months ago. The UK market is worth $720 billion, with $130 billion of this online, the company said.

By comparison, the Australian market is $320 billion with online worth just $30 billion, and it has rivals such as Zip, Splitit and Flexigroup .

Afterpay executive director David Hancock hinted there were problems with the name last week after confirming the company will use the name it acquired with a UK business, Clearpay, for its ‘‘ imminent’ ’ launch.

‘‘ One of the reasons why we’ve done that is that there’s a number of issues that we need to deal with and the quickest way for us to get into market was to actually use the Clearpay name ... ”

Afterpay later told the Sydney Morning Herald and The Age that its logo will provide the brand consistency across its growing operations .

Harry Dudley, an investment analyst with Afterpay investor Watermark Funds Management, said: ‘‘ I don’t think the name will really present an issue.’’

‘‘ It’s the platform itself; it’s the simplicity of the product,’’ he said.

Afterpay’s share price is predicated on the company replicating its success here in these larger overseas markets.

911

 

[Zaxon]

Personally, I think ClearPay is a weird name. Firstly, what does the word "clear" mean in this context? Nothing. Secondly, if you didn't know the connection, you might not recognize ClearPay as being Afterpay Europe.

 

[PZ99]

I would've called it NextPay myself...

Meanwhile:
A small group of high-flying tech stocks are creating a market bubble on Australian Securities Exchange, echoing the conditions before the dot-com crash and the global financial crisis, investment house Perpetual has warned.

Afterpay, <snippy> have been market darlings on the ASX, with their share prices doubling on average over the past 12 months.

https://www.smh.com.au/business/com...of-asx-tech-stock-bubble-20190521-p51pmn.html

Me tipping this in the June comp will accelerate the fall I guess

 

[Knobby22]

Nah, he's just trying to talk it down so he can get in.

I have to admit I did sell a third to get my capital back at $27.25 as I thought it would come back a bit.
If it goes too low ($20) I will buy the shares back at the lower price.
There is danger though with the China trade wars and Brexit still being resolved (hopefully).

 

[PZ99]

Nah, he's just trying to talk it down so he can get in.

That strategy would only work if I topped up my holding

 

[Zaxon]

I would've called it NextPay myself...

I was thinking something that still reminds the user of the "real" name, but without breaching the European trademark. Perhaps APay.

Me tipping this in the June comp will accelerate the fall I guess

That's it! Time to sell our shares and move to Z1P.

 

[Toyota Lexcen]

looks like a few competitors getting out there now. Heard ad on radio for 9mths pay off period

 

[bigdog]

Well below the high of $28.70 on May 7 2019

Motley reports
https://au.finance.yahoo.com/news/why-us-sent-afterpay-share-055427480.html

Why the US update sent the Afterpay share price 7% higher

Tristan Harrison
Motley Fool 5 June 2019

Afterpay Touch Group Ltd (ASX: APT) share price has risen more than 6% after the buy now, pay later business revealed how it’s going in the US in terms of customer numbers and retailer numbers." The Afterpay Touch Group Ltd (ASX: APT) share price has risen more than 6% after the buy now, pay later business revealed how it’s going in the US in terms of customer numbers and retailer numbers.

Afterpay has only been live in the US for just over a year and has made compelling progress. Today it announced that it has partnered with Levi’s, Ray-Ban, O’Neill and Tarte Cosmetics.

Afterpay has already reached 1.5 million US customers who can now use the service when shopping at more than 3,300 retailers with another 1,000 in the process of joining up.

Since March 2019, Afterpay has increased its US customer reach by 500,000 people. Some of the US retailers that have signed up to Afterpay include Anthropologie, Bandier, DSW, Forever 21, GOAT, Morphe, Rebecca Minkoff, Reformation, REVOLVE, Skechers, Steve Madden, Sunglass hut, True Religion and Urban Outfitters.

Afterpay boasted of winning the Retail Technology Game-Changer award at the World Retail Congress in 2019. It also recently celebrated International Women’s Day with an exclusive collaboration with Forever 21. In mid-March the company’s retail partners celebrated “Afterpay Day” in Australia and the US with promotions and offers.

Afterpay’s platform now has 30,000 retail partners across the globe. Nick Molnar, Afterpay’s CEO, said “We are thrilled to be expanding Afterpay to hundreds of thousands more shoppers in the US each month.”

Since the start of 2019 the Afterpay share price has risen by 98%.

Afterpay is growing strongly in both Australia and the US. It could be one of the best ways to profit from a shift to how younger people shop as well as paying for other services such as travel, dentistry and entertainment.

The buy now, pay later sector is hot and I think it could be worth watching quite a few of the businesses in this space.

 

[PZ99]

Business Update (all currency figures are in Australian dollars unless otherwise stated; where relevant figures are quoted on a pro forma basis excluding accounting changes unless otherwise stated) Afterpay Touch Group Limited (ASX: APT) (“Afterpay” or the “Company”) is pleased to provide an update in relation to key business and regulatory developments.

Spoiler: You need 2 litres of coffee to read this :)

Global Business Update Highlights

● Underlying sales were approximately $4.7 billion in the 11 months to 31 May 2019 (unaudited), up 143% on the prior comparable period.

● There are over 4.3 million active customers transacting with Afterpay as at the end of May, growing at an average of approximately 7,900 new customers per day since 31 December 2018.

● Further, Afterpay has partnered with approximately 30,600 active merchants as at the end of May, up 7,400 or 32% on 31 December 2018.

● Afterpay maintained Gross Loss, Net Transaction Loss (NTL) and Net Transaction Margin (NTM) on a May financial year to date basis (all unaudited), broadly in line with the performance achieved in the 6-month period to 31 December 2018. This has been achieved notwithstanding the increasing contribution to underlying sales from international markets.

● Our strategy remains focussed on global merchant and customer growth, platform innovation and global support and infrastructure given an increased appreciation of the size of our global market opportunity and confidence in our differentiated value proposition. Global expansion US Market Update

● Growth continues to remain strong in the United States. After just over 1 year of operations Afterpay has acquired over 1.5 million active customers who are now able to shop with over 3,300 active merchants as at the end of May. There are a further 1,100 merchants in the process of integrating with the platform.

● Afterpay US underlying sales was approximately $780m (unaudited) for the 11 months to 31 May 2019. 2 Afterpay Touch Group Limited ACN 618 280 649 Phone: 1300 100 729 Level 5, 406 Collins Street, Melbourne VIC 3000

● Merchants that have recently gone live or signed include: Levi’s Tarte Jeffree Star Cosmetics Windsor Bandier Ray-Ban Reformation Girlfriend Collective O’Neill Lime Crime Hatch Collection ● Based on annualising the May trading numbers, the US business is generating approximately A$1.7 billion in annualised underlying sales. This was achieved within 13 months of operations in the US. By comparison, it took the Australian business approximately 3 years to achieve the same level of underlying sales.

● Growth across the US market is being driven by customer and merchant demand and is underpinned by the expertise of Afterpay’s US and global-based staff. Future growth will be additionally supported by the US$300 million receivables funding facility announced in May.

● NTM is increasing month on month, driven by a combination of improving Afterpay merchant fee income and stabilising losses as the business scales. In the 11 months to 31 May 2019, NTM has been positive before taking into account the impact of AASB 9.

● Further, merchant fees in the US are trending in line with Australia.

● The network effects of the Afterpay platform continue to add value to our merchant partners with the Company’s shop directory generating over 3.2 million retailer referrals in the month of May, in the US alone, reflecting significant month-on-month growth. UK Market Launch

● Afterpay’s model continues to be an effective product fit in markets outside the US, Australia and New Zealand.

● Afterpay has successfully completed a “soft test” in the UK market and is now live and transacting under the Clearpay name.

● Afterpay has launched in the UK with the same product, business model, global technology and operating platform which has achieved success in other markets. It is this model and solution that we believe resonates most with customers and with retailers.

● Acquiring Clearpay and adopting the Clearpay name - which has been re-launched and features the Afterpay arrows and branding - provided the flexibility to get to market faster and capture the market growth opportunity.

● Early engagement has been positive across the Company’s initial target market with over 50 retailers in varying stages of integration. Partnerships include a mix of well recognised UK, US and Australian based retailers. 3 Afterpay Touch Group Limited ACN 618 280 649 Phone: 1300 100 729 Level 5, 406 Collins Street, Melbourne VIC 3000

● The UK launch is being rolled out in a phased approach, starting with initial US launch partner Urban Outfitters, Inc. (URBN) whose brands include Anthropologie and Free People.

● In terms of the UK pipeline, the Company is well progressed in further leveraging its strong existing partnerships with major international retailers across Australia, NZ and the US that have a significant UK presence. We are pleased with the progress and expect to make further announcements in the near term.

● The UK team is being led by Carl Scheible, who joined the company several months ago. Recruitment of other key talent into the UK-based team has progressed with a number of key roles being filled. The team in the UK has now grown to 26 staff.

● Carl is a seasoned Fintech veteran with over 20 years of leadership experience in technology, financial services and payments. He previously held a variety of leadership positions at PayPal, most recently serving as VP & Managing Director for the UK & Ireland.

● The UK e-commerce market is the third largest in the world after China and the US1 . The addressable retail market opportunity is substantial, with online sales representing A$130 billion of a A$720 billion retail market2 . By comparison, the total Australian retail market is A$320 billion, with online accounting for roughly A$30 billion3 .

● The changing nature of millennial spending habits in the UK presents the same opportunity to launch a pro-consumer retail service as in Australia and the US. Millennials now make up 27% of the global population4 and by 2020 will have the highest spending power at nearly US$15 trillion worldwide5 .

● Afterpay will continue to work with its existing retail partners in Australia and the US to expand these relationships into the UK market. Australia and New Zealand

● Afterpay’s in-store rollout in Australia and New Zealand remains strong and is becoming entrenched in the bricks and mortar retail landscape. In the 5 months to the end of May 2019, in-store represented approximately 20% of total Afterpay ANZ underlying sales, up from around 15% in 1H FY19.

● Strong in-store growth has been exhibited to date in major Australian retailers that have onboarded during the course of FY19 and will be a continued growth focus as other large retailers (e.g. Myer) integrate Afterpay’s in-store service in FY20.

● Close to a quarter of Afterpay’s new customer growth in Australia is currently through in-store acquisition. 1 Statistica (2019). 2 UK House of Commons (2018). 3 NAB Online Retail Index December 2018. 4 A.T. Kearney (2016). 5 Financial Times (2018). 4 Afterpay Touch Group Limited ACN 618 280 649 Phone: 1300 100 729 Level 5, 406 Collins Street, Melbourne VIC 3000

● There are currently well over 2.7 million active customers in Australia and New Zealand who are now able to shop at approximately 27,300 merchants. New customer growth is accelerating monthon-month in Q4 (period to date), in-line with seasonal expectations.

● Merchants that have recently gone live or signed with Afterpay in ANZ include: ONLINE REVOLVE (AU) L’Occitane (AU) Dyson (AU) Superdry (AU) Daniel Wellington (AU) Assembly Label (AU) Murad Skincare (AU) Shine On (NZ) Experience OZ (AU) Adrenaline (AU) Incu (AU) Superga (AU) NZ Muscle (NZ) XO Beauty (NZ) Okana Skincare (NZ) Bridge Climb Sydney (AU) IN-STORE Myer (AU) Oroton (AU) Decathlon (AU) Forever New (AU) Strandbags (NZ) Australian Skin Clinics (AU) Endota Spa (AU) Nutrition Warehouse (AU) New verticals Healthcare

● In less than 10 months, more than 1,100 dental and optical practices in Australia are now offering Afterpay as an alternate payment method for customers.

● New Dental and Optometry groups live or in the process of integrating in Australia include: Specsavers National Dental Care George and Matilda Teachers Union Health

● Following our successful expansion into the dental and optometry segments, Afterpay is also working in partnership with TerryWhite Chemmart to trial the Afterpay service in pharmacy.

● We are receiving strong customer feedback that Afterpay is making healthcare more affordable for Australians and allowing them to get access to the treatment they need. Afterpay for healthcare is a growing segment as more Australians opt out of private health cover, and only 45.6% of Australians are currently covered.6 6 APRA (2017). 5 Afterpay Touch Group Limited ACN 618 280 649 Phone: 1300 100 729 Level 5, 406 Collins Street, Melbourne VIC 3000 Travel

● The pilot of Afterpay’s collaboration with Layaway Travel is underway through “PLAY” as a result of customer requests. The platform enables customers to select and book a curated holiday experience and pay for it in a series of interest-free instalments in the lead up to their departure. Regulatory Update (Australia) Product Intervention Powers (PIP)

● In April 2019, the Federal Parliament passed the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) legislation which introduced Product Intervention Powers for ASIC which now apply to the Buy Now Pay Later (BNPL) sector.

● These powers equip ASIC with the ability to intervene where it identifies a risk of significant detriment to consumers.

● Afterpay has consistently supported the introduction of these powers to provide the industry additional formal regulatory oversight. ● These measures, in addition to the in-built protections in the Afterpay product, further ingrain our commitment to putting customers at the forefront of everything we do. Anti-Money Laundering / Counter-Terrorism, Financing (AML/CTF)

● In July 2018, Afterpay amended its AML/CTF compliance framework to incorporate obligations in relation to the services we provide our customers, including external identity verification and other processes for all Afterpay customers.

● Although Afterpay has not identified any money laundering or terrorism financing activity via our systems to date, Afterpay is currently in dialogue with AUSTRAC regarding issues that AUSTRAC has raised regarding our AML/CTF compliance, the outcome of which is yet to be determined.

● As a scheduled part of our existing program, we are in the process of appointing a leading professional services firm to conduct an independent review of the design and operation of our AML/CTF framework to see if any further improvements or actions can or should be made. Credit Licence

● Given Afterpay is not regulated by the National Credit Code and does not intend to bring a traditional credit product to market, Afterpay has cancelled its Australian Credit Licence. This Licence was acquired some time ago, prior to the report released by ASIC into the BNPL sector, the recent Senate Inquiry, and the passage of PIP legislation through the Parliament. The Licence has not been used and its cancellation will have no impact on the Afterpay business or service.

Awards

● Afterpay was honoured to accept the “Retail Technology Game Changer of the Year” at the World Retail Congress held on 16 May in Amsterdam. 6 Afterpay Touch Group Limited ACN 618 280 649 Phone: 1300 100 729 Level 5, 406 Collins Street, Melbourne VIC 3000

● Afterpay was also honoured to be awarded “Best Fintech Innovator” at this year’s Australian Banking & Innovation Awards held on 22 May in Sydney. ENDS For further information, contact: Investors: Company: Media: David Hancock Group Head davidh@afterpay.com.au Christopher Stevens General Counsel & Company Secretary christopher.stevens@afterpay.com.au Melissa Patch - Cato & Clegg t) 0412 124 195 melissa@catoandclegg.com About Afterpay Touch Group Afterpay Touch Group (ATG) is a technology-driven payments company with a mission to make purchasing feel great for a global customer base. ATG comprises the Afterpay and Touch products and businesses. Afterpay is driving retail innovation by allowing leading retailers to offer a ‘buy now, receive now, pay later’ service that does not require end-customers to enter into a traditional loan or pay any upfront fees or interest to Afterpay. Afterpay currently has over 4.3 million active customers and approximately 30,600 active retail merchants on-boarded. Touch comprises innovative digital payment businesses servicing major consumer-facing organisations in the telecommunications, health and convenience retail sectors in Australia and overseas.

 

[Zaxon]

Business Update

While this seems like good news, the market has reacted to it slightly negatively, current down:

. I've seen it suggested that the market predicted a higher level of growth. Considering how fast APT is growing, apparently there's no pleasing so people

 

[leyy]

While this seems like good news, the market has reacted to it slightly negatively, current down: View attachment 95259. I've seen it suggested that the market predicted a higher level of growth. Considering how fast APT is growing, apparently there's no pleasing so people

The market reacted negatively to the Austrac and AML query.

 

[Zaxon]

The market reacted negatively to the Austrac and AML query.

That's been suggested too. I can't imagine that it's anything more than a compliance issue. I don't see afterpay as really being the vehicle of choice for money laundering or terrorism funding, but the question being raised alone, could be enough to put pressure on the share price.

 

[bigdog]

This clipping is from the June 7 issue of The Age Digital Edition. To subscribe, visit https://theage.digitaleditions.com.au/.

Laundering fears hit Afterpay
AGE - Friday, 7 Jun 2019 - Page 28

Buy-now pay-later provider Afterpay is being probed by federal financial intelligence agency Austrac for possible breaches of anti-money laundering and counter-terrorism financing laws.

The company confirmed it was ‘‘ in dialogue’ ’ with the regulator in a statement to the ASX yesterday.

‘‘ Although Afterpay has not identified any money laundering or terrorism financing activity via our systems to date, Afterpay is currently in dialogue with Austrac regarding issues that Austrac has raised regarding our AML/CTF [anti-money laundering and counter-terrorism finance ] compliance , the outcome is yet to be determined,’’ it said.

Austrac also confirmed it has been scrutinising the company. ‘‘ Austrac can confirm it has been working closely, over some time, with Afterpay in relation to AML/ CTF compliance issues,’’ it said. ‘‘ Stopping the movement of money to criminals and terrorists is a vital part of our national security defences and it is critical for regulated businesses in Australia to comply with the AML/CTF regime .’’

Afterpay said that in July 2018, it amended its compliance framework to include ‘‘ external identity verification and other processes for all Afterpay customers’’ .

In a market update, Afterpay also confirmed it has launched its buy-now pay-later service in the UK market, and belatedly reported its strong performance in the US. Afterpay shares spiked as much as 10 per cent on Wednesday after the company announced in the US, that it now has 1.5 million customers in that market. Yesterday , the stock retreated 1.8 per cent to $23.45.

The ASX update reported that Afterpay underlying merchant sales on its buy-now pay-later platform in the 11 months to May 31 were up 143 per cent to $4.7 billion. It said underlying sales in the US, based on unaudited financial data, was $780 million for that period.

The company said it now has 4.3 million active customers on the platform and has been adding 7,900 customers a day this year. It also now has 30,600 merchants as of the end of May.

The company said it has kept its gross loss, net transaction loss and net transaction margins broadly in line with the December half-year despite the strong growth.

Just as importantly, Afterpay confirmed it is making strong headway in its attempt to penetrate in-store retail sales which represents a far larger opportunity than the online space where it has become a dominant player.

Afterpay said in the five months to the end of May in-store sales grew to represent 20 per cent of its underlying sales in Australia and New Zealand, up from 15 per cent in the December half year.

‘‘ Close to a quarter of Afterpay’s new customer growth in Australia is currently through in-store acquisition ,’’ it said.

On Wednesday, Afterpay cofounder and chief executive Nick Molnar announced it has signed up iconic brands like Levi’s , Ray-Ban and O’Neill to its service in the US as well as announcing it has passed 1.5 million customers just one year after its launch.

Afterpay (APT) Chart

 

[Miner]

Thought this snippet would be interesting for some. Was posted on wrong thread earlier.

https://stockhead.com.au/news/sudde...-just-it-pushes-ahead-with-global-expansion/?

 

[Ann]

Had a quick glance at this chart @Miner...

I am wondering if this may be a second bearish Head and Shoulders pattern forming on APT? Note the earlier head and shoulders, which was at the all time high at the time, how the angle for the base was slanting up to the right where the two shoulders and neck connect. This tends to suggest an eventual bullish outcome for the stock once it is through with the fall back, then if you notice the most recent potential H&S at the all time high again, you will see a downward sloping line. This can indicate a longer fall away period. This is not always the case, but it is always something I watch out for. So for me this will be an interesting share to watch.

 

[Zaxon]

you will see a downward sloping line. This can indicate a longer fall away period.

I agree with your assessment. APT is in a longer term uptrend, but more recently, is in a short term downtrend. Hopefully that short term trend doesn't take over.

I am currently prepared to hold APT, and we'll see what happens over the new few weeks.

 

[PZ99]

For what it's worth, I reckon it'll stay over $25 tomorrow, maybe $26 by weeks' end

 

[Miner]

For what it's worth, I reckon it'll stay over $25 tomorrow, maybe $26 by weeks' end

It is easy to predict who will win between India and Australia in today's cricket match in England than tomorrow's APT price

 

[Sdajii]

Had a quick glance at this chart @Miner...

I am wondering if this may be a second bearish Head and Shoulders pattern forming on APT? Note the earlier head and shoulders, which was at the all time high at the time, how the angle for the base was slanting up to the right where the two shoulders and neck connect. This tends to suggest an eventual bullish outcome for the stock once it is through with the fall back, then if you notice the most recent potential H&S at the all time high again, you will see a downward sloping line. This can indicate a longer fall away period. This is not always the case, but it is always something I watch out for. So for me this will be an interesting share to watch.

View attachment 95304

I don't always agree with your charts but I think you're probably on the money with this one.

 

[Ann]

I don't always agree with your charts but I think you're probably on the money with this one.

Oh you mean like the oil charts on the POO thread when I said POO would would hit the red line resistance and probably collapse quite quickly? I know you certainly didn't agree with that one. Well sometimes I manage to read the tea-leaves correctly!

Edit. POO = Price of Oil. It was all go down in the Commodities section.