E-Phone hangs up on past problems

For the year ended March the company has posted a loss of $8.5 million on sales revenue of $1.65 million. The result includes an operating loss of $5.3 million and write-offs of $3.2 million. Last year's deficit was $1.03 million.

E-phone says the operating loss takes full account of the costs associated with the sale and closure of its pre-paid phone card business. The company now has no involvement in telephony operations.

"In addition, the directors have considered it appropriate to write off as a non-recurring "Unusual Item" all carrying costs amounting in total to $3.199 million related to the acquisition of PATLOC, AirCASH and other software products previously included in the company's assets as goodwill," the company says in a statement.

Although the directors believe the products still have intrinsic worth and future potential, the writeoffs will tidy the books as it heads across the ditch.

"The transfer of the company's principal activities to Australia makes it a sensible and prudent time to recognise differences in Australian and New Zealand accounting standards and to eliminate goodwill from the company's balance sheet."

The directors of E-Phone have approved a name change for the company to Electronic Transaction Technology Limited (ETT) and have also authorised the transfer of its operating headquarters to Sydney.

Since February the company's finances have been boosted by two share placements worth around A$2.8 million in cash and another of A$1.3 million to acquire E-Com Plus.

"The company's liquidity position has been secured for the foreseeable future by these placements."

Following the placements the company has around 197.8 million shares on issue.

CEO Bob Barraket says the purchase of E-Com Plus - now ETT Australasia - in Sydney, is particularly noteworthy and brings with it several former Keycorp executives and sales staff.

"The move of former Keycorp personnel to ETT Australasia Ltd will facilitate a major move into the marketing of eftpos equipment and related systems to banking and other financial sector customers in Australia.

"It is ETT's belief that a major opportunity exists arising from the Australian banking sector's need to review, upgrade and replace their transaction processing equipment and systems in the short term future which will also provide additional opportunities for PATLOC and AirCASH."

Mr Barraket says the past year has been a testing one for the company but he is confident that the drain on the company's resources from its unsuccessful foray into the prepaid telephony sector is virtually at an end.

He is also confident that that the new business direction will generate the profitability which the company has been striving since it commenced operations as E-Phone in late 1999.

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