SmartPay expects underlying profit this year, examining debt facilities

Thursday 4th March 2010

SmartPay, the EFTPOS company that acquired assets from the failed ProvencoCadmus group, expects to make an underlying profit this year and is working through its existing debt facilities as it prepares to expand.

The firm expects to post earnings before interest, taxation, depreciation and amortisation of between $1.5 million and $2 million in the 12 months through March, the Auckland-based company said in a statement, compared to a loss of $2.5 million a year ago.

Managing director Ian Bailey said SmartPay is working to refinance its “existing debt facilities into traditional bank arrangements” after it boosted its borrowings by $7.2 million in the six months ended September 30 to a total $12.3 million.

“SmartPay is expected to deliver on its forecast, evidencing strong growth in cash flows and profit performance,” Bailey said. “We will also continue to investigate ways to strengthen our balance sheet and retire short-term debt.”

The shares were unchanged at 4 cents, having traded as high as 6 cents in the past year and recovered from less than 1 cent after SmartPay bought the payments division of ProvencoCadmus from the receivers in August last year.

Bailey said the company has secured the services of Melbourne-based advisory firm Holland Corporate to review its strategy, business plan, trading performance, capital structure and offer advice in relation to its balance sheet and its related financial structure.

“It is therefore important to ensure that we work closely with a major bank as we expand,” he said. The company kept its EBITDA guidance for the 2010/2011 financial year of between $7 million and $10 million.

Businesswire.co.nz

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