Payzone expects pretax loss of €39m

DUBLIN-BASED electronic payments group Payzone expects to make a full-year pretax loss of €39 million this year.

In a trading update yesterday, the company said the forecast excluded the effect of losses on disposals, share-option charges and International Financial Reporting Standards (IFRS) adjustments.

Payzone said any costs arising out of the settlement of its dispute with former chief executive John Nagle and former chief financial officer John Williamson was provided for within a restructuring announced in the company's interim results for the six months to March 31st.

However, it did report a €9 million increase in one-off costs yesterday due to the acceleration of restructuring and associated writedowns. For the year to September 30th, one-off costs were now expected to come to €22.4 million.

Payzone confirmed it is to dispose of its businesses in Spain, France and Italy for about €20 million. It said this would be set against the company's debt, reducing this position by 6 per cent to €271 million.

The company said: "Operational issues that had severely impacted the availability of the ATM estate are now resolved and this had led to improved financial performance over the final quarter of the year."

Leaving aside the impact of the economic slowdown on consumer spending in the UK, Payzone said it was confident the resolution of the ATM problems would "add to company profitability".

Payzone expected overall earnings before interest, taxes, depreciation and amortisation to be in line with forecasts at €47 million.

The settlement of the dispute with Mr Nagle and Mr Williamson was announced last week, but details were not disclosed.

Shares in Payzone hit 2.5p in London yesterday, giving the company a market capitalisation of £11 million (€14.3 million). Its shares have fallen by 96 per cent so far this year. They debuted at 76p last December.