Tyro narrows loss on surging transaction volume

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James FrostFinancial services writer

Aug 26, 2021 – 4.07pm

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KEY POINTS

• Revenue ($m): 238.5, up 13pc from year-earlier 210.7
• EBITDA ($m): 14.2 v year-earlier -4.4
• Net loss ($m): -29.8 v year-earlier -38.1
• Final dividend: nil

Payments player Tyro has bounced back froma January outagethat affected three in 10 customers to report a 13 per cent rise in revenue and 22 per cent lower net loss for the year.

The company is Australia’s fifth largest payment terminal player, specialising in SMEs in hospitality, retail and health. Tyro reported a 26 per cent rise in transaction volumes for the year to June 30 and has seen another 2205 applications from merchants since July 1.

Speaking about the January outage, Tyro’s Robbie Cooke said: “We’ve leaned right in. We’ve been very open with people.” Chris Hyde

The market lapped up the result, sending the shares more than 5 per cent higher in morning trade. However, by 4pm the price had settled to 4 per cent higher at $3.73.

Tyro CEO Robbie Cooke said the result demonstrated the resilience of the business and its customers during a period when each encountered significant headwinds.

“Given the tough environment, the fact we’ve come through and worked with all our merchants and reported an all-time record of $25.5 billion in transactions, it is a phenomenally strong result,” Mr Cooke said.

In addition to payments, Tyro is a specialist lender. Loan originations were down 57 per cent over the year to $25.8 million, with the lender pulling back from the market at times over the last 12 months. However, the throttle has since been opened.

“We have seen a number of these sporadic lockdowns now and, as they are freed up, business opens up andthey bounce back. Having lived through a few of these now, we are making loans available to SMEs without restrictions,” Mr Cooke said.

Mr Cooke highlighted the integration of Bendigo and Adelaide Bank’s 18,000-strong merchant network as another highlight of the previous 12 months, taking the network to 58,000.

Tyro’s Mr Cooke said the business was unable to detect a loss of customers following the January outage. He said the event made him uncomfortable and the company was building a failover solution.

The outage left 19 per cent of its customer base without a working terminaland another 11 per cent were partially affected. Tyro invited customers to register for remediation and has dealt with 85 per cent of requests.

“I’m very confident we will resolve those to everybody’s satisfaction. The reason why we’ve seen low loss of clients off the back of the incident is because we’ve leaned right in. We’ve been very open with people,” Mr Cooke said.Tyro estimates the event weighed on transaction values by about 1 per cent. The cost of the incident was $13.3 million, including a $9 million provision for remediation. That is $1.7 million lower than the $15 million estimate provided at the half year.

Mr Cooke said the company remained on the lookout for acquisitions in existing and new verticals wherever they made sense but wouldn’t be drawn on attractive categories.

“We do definitely have an appetite for further bolt on acquisitions as they present an opportunity to leverage our platform, enhances our position or supplement our eco-system,” Mr Cooke said.