Smartpay Cashflow Positive Ahead Of Forecast
Auckland, 3 March 2009– Leading electronic product distribution and payments processing provider SmartPay Ltd (NZX: SPY)
announced today that it has been cashflow positive for the last two months at an operating level, and based on present
indications, this trend is expected to continue into the new financial year.
SmartPay is also expecting to be EBITDA profitable in the short-term, based on current indications of forward sales.
This confirms the positive benefits arising from the Company’s recent restructuring with increased emphasis on its core
business capabilities of Telecommunications (including EFTPOS terminal connectively via its IP-POS product), In-Store
Radio (music, messaging and video) and transactional processing (both prepaid and taxi industry payment processing).
Ian Bailey, Managing Director of SmartPay, says the turnaround from an operating cash burn to cash positive position has
been largely due to the refocusing on the Company’s competitive advantages, combined with the restructure and
recruitment of experienced sales staff in the corporate and merchant sales areas.
“SmartPay has a leading range of products and services that have been well received by the market, which importantly
also provides us with ongoing and renewable revenues and margins. The Company’s recent restructuring has put us in a
uniquely strong position where we can improve our operating margins by focusing on our core business strengths and
unique intellectual property, combined with a streamlined business model and staffing structure,” says Bailey.
Bailey adds that SmartPay’s recent successfully completed rights issue raised $3.7 million and, combined with the
confirmed funding lines from a third party financier, has placed the Company in a position to capitalise on market
opportunities.
“SmartPay is well placed in the current market. Our recent acquisition of rental company MIPS Financial Services,
together with entering into agreements with funders for the expansion of the Group‘s rental book, has provided funds for
the ongoing growth of the business.”
Bailey also says that SmartPay is particularly encouraged by these cashflow positive results given the present market
conditions.
“While this is one of the tightest markets we have seen in a long time, we have still managed to turn SmartPay around
which we are very pleased about because it means that our business strategy going forward is gaining traction. Whilst
there is still potentially significant risk in the business, due to current market conditions, there are also
significant upside opportunities for our products and services in the market at this time. Also we intend to continue to
look for acquisition opportunities that add value by growing our customer base and increasing margins and revenues. We
are working on a number of initiatives at present and expect to have some announcements soon in this regard.”
Further, SmartPay is looking at various methods to raise additional working capital to strengthen its balance sheet and
to generate more cash resources, says Bailey.
“In this current market, we see some exciting acquisition opportunities opening up at reasonable prices, and we intend
to take advantage of these as they present themselves.”
ENDS