Smartpay shares soar to 20-month high on tiny volumes

Monday 18th July 2016

Smartpay shares jumped to a 20-month high on tiny volumes, marking the biggest gain on the NZX's main board today.

The shares jumped 41 percent, or 6.5 cents, to 22.5 cents on the NZX, the highest they've been since November 2014. Some 15,500 shares changed hands, less than a tenth of the 119,300 average daily volume over the past year. The company is dual-listed, and the shares were unchanged at 18 Australian cents on the ASX.

"It's obviously a discount broker or someone not familiar with the dual-listing and has paid a terrible price here in New Zealand," said Grant Williamson, a director at Hamilton Hindin Greene in Christchurch. "There's no fundamental reason - sometimes in these illiquid stocks with quite a wide bid and ask price, a discount broker or inexperienced investor can pay over the odds."

In May, Smartpay reported an 86 percent slump in annual profit to $200,000 on an 8 percent drop in revenue to $20.4 million on the loss of a major Australian taxi contract just before the start of the financial year.

The payments system company wants to grow its Australian business primarily through integrating retail and mobile payments and building its taxi payments technology. In New Zealand, Smartpay wants to sell new products to its existing client base and participate in the structural change going in payments. New Zealand's biggest electronic payments firm, Paymark, is in play after its owners - ANZ Bank New Zealand, ASB Bank, Bank of New Zealand and Westpac Banking Corp - appointed investment bank Cameron Partners to review the business.

Smartpay has indicated it has a number of merger and acquisition opportunities under consideration to increase the business's scale and scope, without identifying what they are.

Separately, NZAX-listed Cooks Food Group shares slumped 43 percent, or 4.5 cents, to 6 cents with 10,000 shares being traded. The company said its annual accounts were tagged by its auditor, who had "been unable to obtain sufficient appropriate audit evidence to support the viability of the planned initiatives", and audit adjustments widened the annual loss to $7.94 million.

BusinessDesk.co.nz

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