Sharechat Logo

SmartPay gets some more equity

Thursday 24th June 2010

Text too small?

The company sold shares at about 3.3 cents apiece, the same price set when it raised $400,000 in a private placement in April. At the time it announced the share purchase plan last month, SmartPay said it needed to improve its debt-to-equity ratio “in order to access more conventional funding lines from banks and move away from high priced mezzanine debt.”

The shares rose 3.2% to 3 cents on the NZX today and have declined 26% in the past three months. Much of the company’s growth has been debt funded with only a small proportion of equity.

SmartPay is restructuring its business to reduce costs, outsourcing the manufacturing of EFTPOS terminals in moves that will cut overheads by about 20% and headcount by 25%.

The company is forecasting earnings before interest, tax, depreciation and amortisation will jump to between $7 million and $10 million in the year ending March 31, 2011, from $1.5 million to $2.1 million last financial year.

“The company has proven that it can be profitable at an operating level and delivered on meeting its operating profit guidance for the past financial year,” managing director Ian Bailey said. “The additional capital will assist in reducing the overall company debt and thereby reduce interest costs.”

Smartpay acquired the assets of failed ProvencoCadmus group last year.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

VCT - Operational performance for the year ended 30 June 2024
Challenge to banks the way to go
Bigger returns or lower risk?
NPH - Director Appointment
July 19th Morning Report
Wellington International Airport Ltd (“WIA040”) - Maturity
Devon Funds Morning Note - 18 July 2024
CNU - Commerce Commission releases draft Price Quality decision
Precinct FY24 Annual Results and Webcast Details
Scott Technology appoints new CEO