SmartPay sneaks back into profit

Eftpos and electronic payment provider SmartPay (NZX:SPY) has announced record ebitda of $7.155 million for the year to March 31, up 252% from last year ($2.0 million).

It squeaked into a net profit after tax of $0.1 million, a turnaround of $2.7 million from last year’s loss of $2.6 million.

Gross profit was $20.6 million, up 86% from $11.1 million in 2010, while ebit was $3.4 million compared to an ebit loss of $245,000 in 2010.
Revenue was up 20% to $47.3 million.

“Two years ago we set ourselves a very tough objective and provided market guidance to grow our ebitda, take actions to improve cash flow, and develop significant on-going and recurring revenues,” said SmartPay managing director Ian Bailey.

“Next year we expect to maintain or improve our EBITDA despite volume reductions in New Zealand as the terminal replacement programmes concludes mid-year.

“Growth is expected from our Australian business as the market there requires an estimated 600,000 terminals to be replaced over the next 3 – 5 years.

“However with reduced overheads, better margin controls and lower interest costs we expect to see further increases in bottom line profit, with this continuing to increase for the foreseeable future as the ongoing recurring revenues streams of our subscription model continue to bring value to the business.”

Mr Bailey said SmartPay is also pursuing an ASX listing to increase liquidity and increase shareholder value.

“The ASX listing is also desirable as P/E values for companies similar to SmartPay are currently in the 10 – 14 range on the ASX, whilst SmartPay, on the NZX, remains at a P/E of around 5. Additionally, there are also significant opportunities to grow the business both organically and by acquisition in our core target markets in Australia.

“SmartPay already has a base to start from in Australia with relationships with Live Group, Bendigo Bank, and selected target vertical markets such as the club market via our relationship with Generate Group.

“After consolidating SmartPay’s success in the New Zealand market, now is the right time to increase our expansion into Australia. We want to take advantage of significant opportunities using the same financial model we use in New Zealand as many of our corporate customers are Australian-based or have Australian affiliates.

“As a leader in our field, with a unique range of added value services we believe that we can replicate our success in Australia, and already have proof that our model works in that market,” said Mr Bailey. 

SmartPay shares last traded at 22c.