Payment terminal operator Smartpay has rejected a revised offer from US payments company Verifone for its New Zealand business, saying the terms of the latest offer are not acceptable.
Last November, the company announced that it had received an offer of A$70 million from Verifone for its NZ business. The deal fell through after the April completion deadline was missed.
Earlier this month the New Zealand Commerce Commission granted clearance for the sale of the business, which prompted the revised Verifone offer.
Smartpay said in its annual report, released yesterday, that it has confirmed to Verifone that it considers the sale agreement to be cancelled.
When the deal was announced, Smartpay said it planned to focus on the development of its Australian operation, which includes a recent move into merchant acquiring.
The company’s Australian strategy is “to provide an end-to-end EFTPOS solution in Australia through the addition of our own acquiring capability”.
In addition to its Australian payments business, Smartpay plans to retain its Retail Radio business in Australia and NZ and its Alipay and WeChat businesses in Australia and NZ.
In results announced yesterday for the year to March, Smartpay reported a loss of $4.4 million for the 12 months to March, compared with a loss of $1.8 million in the previous corresponding period.
It said this was largely due to $2.5 million of costs related to the valuation of convertible notes and some foreign exchange movements.
Revenue rose 34 per cent to $28.3 million. Earnings before tax, depreciation, share options expense, amortisation and impairments rose 15.3 per cent to $7.4 million.
Cash flow from operating activities rose 18.5 per cent to $6.5 million.
The company said the 34 per cent increase in revenue was almost entirely driven by the growth of transaction revenue in the Australian business, which grew 273 per cent to $9.5 million.
The Australian acquiring business grew from around $500,000 a month at the start of the financial year to around $1 million a month by the end of the year.
It achieved this growth by adding 2500 new terminals in Australia through the year, taking the total to 4600 terminals.
The New Zealand business still accounts for the majority of the company’s revenue. NZ revenue was $16.9 million – down from $18.5 million in the previous corresponding period. Australian revenue was $11.8 million – up from $4.5 million.
The main sources of revenue were point of sale terminal services and transaction processing fees.