Smartpay’s decision to double its marketing budget, using digital and social media channels for lead generation in Australia, has paid dividends for the payment terminal operator, which reported strong growth in terminal numbers and revenue in the year to March.
The company operates around 40,000 terminals – 30,000 in New Zealand and more than 9000 in Australia. Its core market is SME retailers and merchants.
Average revenue per terminal was A$4105 – up from $3900 the previous year.
While the NZ terminal business was “stable”, growth in Australia was strong, with the terminal fleet growing 43.4 per cent and revenue up 77 per cent.
The company reported net profit of $3.1 million for the year to March, a turnaround from a loss of $15.2 million in the previous year.
The 2020/21 result was affected by a $12.7 million write-down of the value of convertible notes and high amortisation costs.
EBITDA rose from $7.6 million in 2020/21 to $11.1 million in the latest year.
Revenue was up 42.1 per cent to $48.1 million. The revenue split was $33.2 million from Australia operations and $17.3 million from New Zealand.
Operating expenses were up 40.7 per cent to $36.9 million. The increase included a doubling of marketing spend to $4 million.
During the year the company launched a pilot of the Smartpay Hub, which is designed to provide business reporting and data analytics to customers.
Smartpay chief executive Martyn Pomeroy said the hub would be the foundation of a “digital business solution” which he hopes will support the next phase of growth.
Pomeroy said the company used its strong cash flow to reduce debt. Cash flow from operating activities rose 47.7 per cent to $12.7 million.
Borrowings were reduced by 7.8 per cent to $11.3 million and interest on borrowings fell 18.9 per cent to $399,000.