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- Fintech stock ZIP Co (ZIP) is divesting its South African and Central and Eastern European businesses even as it winds down operations in the Middle East
- ZIP expects to pocket $20 million from the transactions and, on completion, will have neutralised its cash burn from its ‘rest of world’ operations by the end of June
- ZIP says its European, Middle Eastern and African (EMEA) arms delivered cash earnings before tax, depreciation and amortisation of $10.2 million over the first half of FY23
- CEO and Founder Larry Diamond says the company is confident it will have sufficient cash and liquidity to deliver positive cash EBTDA by the first half of next year
- ZIP shares closed 3.7 per cent higher at 56 cents on Thursday afternoon
Fintech stock ZIP Co (ZIP) has inked deals to divest its South African and Central and Eastern European businesses even as it winds down operations in the Middle East.
Zip said it expected to receive net cash inflows of approximately $20 million by the second half of the 2023 financial year as part of the transactions.
According to ZIP, its European, Middle Eastern and African (EMEA) arms delivered cash earnings before tax, depreciation and amortisation of $10.2 million over the first half of FY23. The buy now, pay later specialist spent hundreds of millions of dollars acquiring these businesses over the past several years.
Now, Zip said as it walked away from its EMEA operations, it could neutralise the cash burn from its ‘rest of world’ (RoW) footprint by the end of this financial year.
“The completion of these RoW assets sales marks another step in Zip’s transition as we
become a stronger and leaner business, focused on core products in core markets,” Zip Co-Founder and CEO Larry Diamond said.
“We remain confident that we have sufficient cash and liquidity to deliver on our target of group positive cash EBTDA during H1 FY24.”
The company has moved forward with other activities in line with its strategic priorities to simplify its portfolio and focus on its core businesses in Australia and New Zealand and possibilities within the US.
“While we continue to see increased demand globally for our products from both customers and merchants, we made the decision to allocate resources to areas of our business that are either profitable or have a near and clear path to profitability,” Mr Diamond said.
ZIP shares closed 3.7 per cent higher at 56 cents on Thursday afternoon.
