Shares in Afterpay Touch gained as much as 20 per cent after the company said underlying sales has increased by almost 40 per cent to $736 million over the quarter.
The buy now, pay later payments provider said group revenue for the 2018 financial year would be around $142 million while earnings before interest,tax depreciation and amortisation was forecast to be around $33 million to $34 million.
Afterpay, which allows millennial consumers to pay for goods in instalments by charging merchants, said that $2.18 billion of underlying sales had been processed through its payment platform during the 2018 financial year. That is almost a threefold increase from the prior year.
The announcement sent Afterpay Touch shares up by as much as 20 per cent. At 1pm EST Afterpay stock was trading at $12.91, a gain of 18 per cent.
The company’s share price is now more than doubled from $6 at the start of the year, valuing the company at $2.8 billion. The company also sought to allay concerns about lending losses.
Afterpay said that gross losses and net transaction losses had “trended down” in the fourth quarter and “generally improved” over the second half of the financial year “despite the increased underlying sales performance and merchant diversification in the same period.”
In the update the company said it generated over $11 million in underlying sales in the United States after launching in May 2018.
The company had also been the subject of concerns that it was providing funds to consumers who were underage and whose identities could not be verified.
Afterpay said an external third party identity verification has been implemented, and strengthened to prevent fraud and to ensure users are over 18-years old. The company also said it would cap its late fees.
“The introduction of fee caps and ID Verification in Australia is not expected to have a material financial or performance impact on the business and is part of an ongoing process of continuing improvement.”
Afterpay said a $200 million funding facility from a major international bank, to sit alongside its $350 million existing National Australia Bank facility “continues to progress from term sheet towards final documentation.”