Smartpay profit falls 9.5% as foray into Aussie cab market costs it major contract

Friday 29th May 2015

Smartpay Holdings, the listed payment terminal supplier, reported a 9.5 percent drop in annual profit after its decision to sell directly to Australia's taxi industry cost it a major wholesale contract.

Net profit fell to $1.6 million, or 0.91 cents per share, in the 12 months ended March 31, from $1.7 million, or 1.01 cents, a year earlier, the Auckland based company said in a statement. Sales slipped 3 percent to $22.2 million, while earnings before interest, tax, depreciation and amortisation declined by 3 percent to $9.2 million after losing an Australian customer that made up about 8 percent of the firm's revenue.

"The primary contributor to the lower revenue and Ebitda was the cessation of our largest Australian taxi contract revenue at the end of December 2014," the company said in a statement. "This was an anticipated outcome driven by Smartpay's decision to participate directly in the Australian taxi industry rather than through an indirect wholesale relationship."

The company widened its footprint this year by taking over Epay's 2,500 terminals in New Zealand and rolled out a taxi booking and payment app across the Tasman.

Smartpay said since the launch of its taxi business in Australia is has secured contracts with a number of operators, deploying nearly 600 terminals.

The company is also eyeing the next generation of integrated payments terminals and the emergence of mobile payment systems in Australia, with a target release date for products across the Tasman in the third or fourth quarter of 2015.

Smartpay's shares dropped 4.8 percent to 20 cents, and have gained 5 percent this year.

BusinessDesk.co.nz

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