Laybuy Group (ASX: LBY) released its latest quarterly business activities update for 1Q FY23 this week together with the outcome of the strategic review announced in April. The company announced a significant improvement in Net Transaction Margin (NTM) and operating cash flow on the back of better fraud prevention and credit risk management. The improved NTM and further planned cuts to overheads means that the path to profitability has become much clearer, with Laybuy now targeting 4Q FY23 to reach profitability (i.e. Mar Q 2023). This will make Laybuy one of the first, if not the first, profitable pure-play BNPL company on the ASX. As a consequence, the strategic review has concluded that a sale or partial sale of the business is not currently in the best interests of shareholders. The company has also indicated that the shortened path to profitability removes the need for a capital raising in the medium term.
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