good company was over sold now surging, page-9

Date of lodgement: 13-Mar-2006
Title: Open Briefing®. Keycorp Limited. CEO & CFO on H1 06 Result
Record of interview:
corporatefile.com.au
Keycorp Limited today announced EBITDA of $7.2 million before non-recurring
items for the first half ended December 2005, up from a loss of $0.8 million for the
continuing businesses in the previous corresponding period. You expect EBITDA
in the range of $10 million to $13 million for the full year ending June 2006, down
from $14.3 million for the continuing businesses in the previous year. What’s
behind this weakness?
CEO Bruce Thompson
There are two critical things. One is that the initial phase of the hardware roll-out
under our payment terminal services contract with Westpac has been largely
completed. We have continuing services revenue associated with the contract but
the revenue we’ve had over the past 12 months from the roll-out won’t recur. The
other thing is the temporary slow-down we’re seeing in smartcard uptake,
particularly in Asia. There are a number of reasons for that, which we’ll talk about
later, but we don’t think that’s going to be a long-term issue.
corporatefile.com.au
Keycorp had net cash of $14.3 million (cash less debt) at the end of December
compared with net debt of $1.1 million six months earlier. You’ve previously
indicated that you’re seeking growth by acquisition. What progress have you
made in pursuing acquisition opportunities and will you consider a further capital
return to shareholders if a suitable acquisition isn’t identified in the near term?
2
CEO Bruce Thompson
We’ll pursue acquisition opportunities and have the financial resources to do so.
At 31 December 2005 the company had $15.5 million in cash reserves and the
ability to borrow further to fund acquisitions.
We’re in discussions with potential acquisition candidates but it’s too early to say
whether they’ll come to fruition. We continue to look for businesses we
understand, that add value and that fit our strategy of transitioning from a productfocused
business into a provider of solutions and services.