Payzone reports pretax loss of €90m

DUBLIN-BASED electronic payments group Payzone has reported a pretax loss of €90 million on revenues of €583 million for the six months to end of March.

Payzone was formed from the merger of Irish payments top-up group Alphyra and British ATM operator Cardpoint in 2007. It also operates prepaid motorway tolling and bill payment systems.

The losses included an impairment charge of €77 million following a goodwill review and intangible amortisation costs of €7 million.

The revenue total excludes the contribution from its businesses in France, Italy and Spain which were sold during the period.

Earnings before interest, tax, depreciation and amortisation (Ebitda) rose 8 per cent to €20.3 million on a pro forma basis. The basic and diluted loss per share over the period was 21 cent.

Mike Maloney, chief executive, said the company had responded to a weak economy by taking out costs and described the pro forma Ebitda increase as a “significant achievement” at a time when weak consumer sentiment was depressing transaction volumes.

Payzone said talks with its banks with a “view to establishing a more appropriate long-term capital structure” were still in train.

The company has focused on improving cash-generation this year, and removed loss-making mobile phone top-up terminals and ATMs or relocated them to locations with higher footfalls.

Cost-cutting, pricing changes and business rationalisations introduced during the period had mitigated against the impact of the deteriorating macroeconomic environment, the company said, but this process was likely to continue.

In particular, the company said it would seek to exit or renegotiate legacy loss-making contracts.

Shares in Payzone closed at 1.85 pence, a gain of just over 1 per cent in London, giving it a market value of £8.1 million (€9.5 million). Payzone’s shares debuted in London in December 2007 at 76 pence.

It sacked then chief executive John Nagle in March 2008, along with finance chief John Williamson, and has been in flux since that time.