Smartpay full-year profit slumps 86% after ending Australian taxi contract

Thursday 26th May 2016

Smartpay Holdings posted an 86 percent slump in annual profit after the payment terminal supplier lost a large Australian taxi contract just before the start of the financial year.

Net profit sank to $200,000 in the year ended March 31, from $1.6 million a year earlier, the Auckland-based company said in a statement. Revenue slid 8 percent to $20.4 million. Earnings before interest, taxation, depreciation and amortisation fell 12 percent to $8.1 million, within its forecast range of $8 million to $8.5 million.

Smartpay started the last financial year on the back foot, after ending its largest Australian wholesale taxi contract at the end of December 2014. It's aiming to make up the lost income after launching its own Australian TaxiPOS taxi payments business in February last year, and said today that the latest financial results didn't reflect its current trading.

"The company is currently performing at a higher level than indicated by the full year result," Smartpay said. "This is evident in the 19 percent increase in ebitda in the second half of the financial year over the reported first half result."

Smartpay said the number of terminals issued in Australia has now risen from around 200 at the start of the financial year to around 1,700 active terminals. This is expected to yield higher profitability in the current financial year.

Net debt increased by 11.7 percent to $23.9 million over the year due to the roll out of new products and the cost of upgrading terminals, it said.

Shares in Smartpay rose 5.3 percent, or by 1 cent, to 20 cents. They've risen sharply in the last three months after hitting an all-time low of 11 cents in February.

BusinessDesk.co.nz

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