E-Phone loses $3M in six months

Friday 15th December 2000

Electronic payments company E-Phone (NZSE: EPH) has announced a loss of $3,014,838 for the six months ended 30 September 2000, compared to a loss of $83,000 for the same corresponding period last year.

The company gave high costs and an intensely competitive environment in the prepaid telephone business as reasons for the big loss. E-Phone has now sold the phone card business, which was purchased from Voyager in only January this year, to Net Tel Communications.

E-Phone's CEO Bob Barraket says the New Zealand prepaid telephone card market became too heavily contested and too fragmented to justify E-Phone's continued involvement.

If shareholders agree, the company will now change its name to EPH Global Ltd, with EPH standing for Electronic Payment Holdings. According to Mr Barraket, E-Phone's intellectual capital and funds will be better deployed developing two systems called PATLOC and AirCash.

"The E-Phone PATLOC Internet terminal software and the AirCash products have major and immediate applications in the Asian markets," says Mr Barraket.

If shareholders are expecting these two products to save the company from making a full-year loss as well, they will be disappointed. Mr Barraket says that E-Phone does not envisage a return to full profitability during the current financial year.

Like most tech companies, E-Phone has been hit hard by negative investor sentiment against companies in the tech sector - their shares closed at 9.8 cents today, well off the 52 week high of 83 cents.

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