Shares in Trintech surged by 35 per cent yesterday after second quarter results from the electronics payments company provided a much-needed boost to market confidence in the firm.
The figures, which were in line with analysts' forecasts, showed strong revenue growth and an improved cash position.
This left the company on track to break even on a pro forma basis in the fourth quarter, according to executive chairman Mr Cyril Maguire.
The company posted a pre-tax loss of $4.3 million (€4.72 million) when restructuring charges and non-cash items such as goodwill are excluded - up from $2.9 million in the same quarter last year.
However, Mr Maguire believes the company is in a position to return to the black in the not-too-distant future.
"We are completely committed to a return to profit," he said.
The figures were quite well received by the market, where confidence in the company has been at a very low ebb recently.
The shares have lost more than 30 per cent of their value since mid-August, leaving them trading below the cash value of the company for a time.
At one stage, the shares dropped to a low of €1.21, well down from the levels they enjoyed at the height of the technology boom when they traded at €79.50.
"People just didn't believe the cash was going to be there but now they're beginning to think that Trintech is not about to collapse," one analyst said.
The results showed revenues in the three months ended July 31st surged 72 per cent to $18.4 million while software licence revenue increased 95 per cent to $8.4 million, "reflecting continued demand for secure payment infrastructure solutions", the company said.
The figures also showed that the company has costs under control. Operating costs declined by 5 per cent as the benefits of a restructuring programme fed through. The company had a closing cash balance of $82 million.
"The cash pile gives comfort," said Ms Jemma Houlihan, analyst at ABN Amro in Dublin. "The cash-burn rate is under control."
On the Neuer Markt in Frankfurt, Trintech shares rose to €1.80 before closing 20 per cent higher at €1.60.
On the Nasdaq, where they are also quoted, they were 21 per cent higher at $1.58 at the Dublin close.
In addition to the rise in the share price, the results prompted a number of analyst upgrades yesterday.
ABN Amro has increased its rating on Trintech from "hold" to "add" while investment bank West LB Panmure has upgraded the stock to "neutral" from "underperform".
"The market has been extremely bearish about Trintech," the investment bank said.
"On the grounds of valuation, plus the fact that the company ostensibly has enough cash to last it four years, we feel the bearishness is now overdone."
Trintech also announced a licensing agreement with credit card issuer Barclaycard yesterday, which will allow it to use Trintech software in the e-commerce payments area.
