Ann: FLLYR: SPY: SPY Announces 31 March 2013 Prel

• Release Date: 30/05/13 19:13
• Summary: FLLYR: SPY: SPY Announces 31 March 2013 Preliminary Full Year Results
• Price Sensitive: No
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SPY
30/05/2013 17:13
FLLYR

REL: 1713 HRS Smartpay Holdings Limited

FLLYR: SPY: SPY Announces 31 March 2013 Preliminary Full Year Results

MARKET RELEASE         FOR IMMEDIATE RELEASE

SMARTPAY ANNOUNCES 31 MARCH 2013 PRELIMINARY FULL YEAR RESULTS

o Revenue of $17.0m, up on the previous period of $16.5m (restated)
o EBITDA* of $5.1m, up on the previous period of $2.0m loss (restated)
o Net Loss After Tax of $5.9m, compared to the previous period loss of $12.7m
(restated)
o These results only reflect partial benefit of the substantial changes made
during the financial year
o The business is currently performing at a significantly higher level
following completion of these positive changes - Revenue of $22.2m and
EBITDA* of $9.4m on an current annualised run-rate basis

AUCKLAND, 30 May 2013 - Smartpay (NZX: SPY), a leading provider of payments
and transactional solutions in New Zealand and Australia, today announced its
preliminary unaudited financial results for the year ended 31 March 2013. The
strong improvement in financial performance only reflects a partial benefit
of the positive changes made over the period as both the restructure of the
business and a major acquisition occurred mid period.  The current business
is performing at a significantly higher level than reflected over the past 12
months.

2013 Full Year Result

The full year result has revenue of $17.0m (previous period restated:
$16.5m); EBITDA* of $5.1m (previous period restated: $2.0m loss) and a Net
Loss After Tax of $5.9m (previous period previous restated:  $12.7m loss).

The strong improvement in financial performance only reflects a partial
benefit of the following positive changes made during the period:

o The completion of the Viaduct acquisition in late January resulted in only
2 months contribution in the period;

o The restructure of the business mid period resulting in only partial cost
savings in this period;

o Only a partial period benefit of the significantly lower interest costs
following the recapitalisation of the business.

The results also reflect substantial one-off restructuring, acquisition and
capital raising costs.

With the benefit of these changes now fully realised, the business is
currently performing at a significantly higher level with current revenue in
the order of $22.2m and EBITDA* in the order of $9.4m on an annualised
run-rate basis.

Managing Director, Bradley Gerdis, said "We are extremely pleased with the
progress made in the business over the past year. In addition to the complete
restructure and turnaround of the business from loss making to generating
significant positive operating profit and cash flow, we also completed and
integrated a major acquisition to cement our position as the leading EFTPOS
business in New Zealand."

"With the business now on a solid footing we have also been able to turn our
focus to investing in our Australian business which represents a large
organic growth opportunity.  We have begun to invest in our sales resources
and have identified a number of sales channels which we are actively
pursuing.  While our Australian business is still in the early growth phase,
I am pleased to report that we are making positive progress."
Mr Gerdis concluded "overall we have made outstanding progress in executing
on our strategy over the past financial year and the business is exactly
where we had hoped it would be."

Application of Accounting Policies and Restatement of Previous Periods

One of the key changes made during the period is the way in which the company
recognises and reports revenue.  In previous financial years the methodology
was to recognise the majority of the revenue from EFTPOS terminal rental
contracts up front in the period in which the contracts were signed - this
was accounting as a finance lease transaction.

It has subsequently been determined that the correct treatment of 95% of the
rental contracts (by annual revenue) is that of operating leases.  These
results are therefore represented on this basis with the previous period's
results restated accordingly for comparison purposes.

The effect of this accounting treatment is to account for revenue evenly over
the term of the rental contracts reflecting the timing of the services
performed.

ASX Listing Update

After having had to delay our ASX listing due to the Viaduct acquisition and
the resultant capital raising, the process to list on the ASX is nearing
completion.  As the time frame required by the ASX for a compliance listing
post the Viaduct capital raising took us beyond our financial year end, the
ASX then required the most recent audited results to be included in the
listing document.  With our final audited results due to be released by the
end of June, we expect the ASX listing to follow shortly thereafter in early
to mid July.

Business Update and Outlook

The past financial year has been transformational for our business.  Some of
the key achievements during the period include:

o Changing the business model to focus on annuity revenue streams
o Major recapitalisation of the balance sheet including removal of the
previous high cost debt structure
o Restructure of the cost base
o Significant board changes with 3 out of 4 current Directors joining the
board in the period
o Completion of a major acquisition to become the largest EFTPOS provider in
NZ and the subsequent successful integration of that acquisition
o Appointment of a new leadership team in NZ following the Viaduct
acquisition
o Appointment of KPMG as new auditors

With these positive changes now complete we have taken the opportunity to
re-invest in the business for our next growth phase.  This has included
adding additional capacity in both our New Zealand and Australian businesses
to enable us to target revenue growth from both increases in terminal numbers
and the promotion of our suite of value add merchant solutions.

Mr Gerdis said, "We have made substantial progress over the past year in
putting the foundations in place from which to grow.  With these processes
now substantially complete and with the business well capitalised, we expect
the business to deliver positive growth in profit and EPS in the current
financial year."

* EBITDA = Earnings Before Interest Tax Depreciation Amortisation (including
share option amortisation) and impairment.

ENDS

For further information contact:

Bradley Gerdis, Managing Director, SmartPay, + 64 9 442 2717

About SmartPay Holdings Limited
SmartPay is a leading provider of innovative merchant payment solutions.

SmartPay's product set includes:
1. The provision of EFTPOS terminals and related payments services.
2. Transactional processing services, including for the taxi industry;
prepayment products; bill payment solutions and online payments.
3. Audio and video, music, messaging and media via its Retail Radio product
set.

For more information visit - www.smartpayltd.com
End CA:00236887 For:SPY    Type:FLLYR      Time:2013-05-30 17:13:35