Buy now, pay later darling Afterpay Group has recorded $519.2 million in profit for the 2020 financial year, which is just about double what it earnt in FY2019.
While swathes of businesses across several sectors buckled during the pandemic, Afterpay’s online sales ramped up during July and August, thanks to new major merchants that were signed during this period.
“While remaining cautious in our ongoing response, it is clear that Afterpay’s predominantly e-commerce and budgeting focused service has been a net beneficiary of the significant shift to online spending and the shift away from traditional forms of credit,” the company said in its earnings announcement posted to the ASX.
Experts expect Australian shopping habits to have changed permanently after the pandemic.
Research from McKinsey & Co reveals that the volume of customers doing their shopping online for all different kinds of items, from groceries to jewellery to alcohol to entertainment, is expected to grow from 25 to 65 per cent.
Buoyed by the positive result, Afterpay share prices hit an all-time high this morning of $93.99 at 10am AEST.
This is up by 1,056 per cent from the lows of the panic-selling in late March, where share prices fell to $8.90.
The company recorded a statutory loss after tax of $22.9 million, but this is significantly down from the $43.8 million loss recorded the year before.
The company’s strong balance sheet was also boosted by Afterpay’s July capital raising which delivered $769.8 million.
Afterpay currently operates in Australia, New Zealand, the US and the UK, but only days ago announced plans to expand into Spain, France, Italy and Portugal.
In the 2020 financial year, Afterpay’s Australia and New Zealand sales grew by 52 per cent to $11.1 billion, up from $5.2 billion.
During this time, Afterpay signed a number of major new merchants, including eBay, Priceline, Chemist Warehouse, Webjet, Ticketek, and clothing retailers SHEIN and General Pants (NZ).
Customers who use Afterpay also like to stick around: repeat customers constituted 90 per cent of FY2020 underlying sales.
Over the year, Afterpay added an average of 17,300 new customers to its platform per day, and in the last quarter of FY2020 this figure rose to 20,500 a day.
The company’s staff numbers grew from 446 at the end of the previous financial year to 665 at the end of the 2020 financial year.
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