Former Takeover Target OzForex Says Business on Upswing
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04/05/2016 5:51PM
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By Rebecca Thurlow SYDNEY--Currency-transfer company OzForex Group Ltd. (OFX.AU) said business was improving after a third-quarter slump that prompted Western Union Co. (WU) to withdraw a takeover bid valued at as much as 888 million Australian dollars (US$667 million). OzForex Chief Executive Richard Kimber said there was nothing in its books that should concern investors after Western Union walked away in February following a long period of due diligence. "Absolutely unequivocally 100% there is nothing in our books. We are a publicly traded company. We have all the auditors in the world," he said on the sidelines of an investor conference hosted by Macquarie Group on Wednesday. Western Union may have been put off by OzForex's third-quarter earnings weakness, which was caused in part by reduced marketing and other factors associated with the company's rebranding to OFX, Mr. Kimber said. Dislocation stemming from OzForex's shift to a new website domain as it positioned itself for global expansion also weighed on results, he said. "As we did that change, it changed the website, it changed some of the acquisition metrics and some of the regular dynamics and caused a bit more bumpiness in our numbers and that's when we announced to the market that we had a softer quarter because we were coming into the rebranding," said Mr. Kimber in an interview. "We stopped marketing aggressively because we knew we were going to rebrand. It might have put them off. I don't know. I can speculate and say some of that (had an impact). There's a range of factors. They left saying they could be back. They might come back one day," he said. OzForex is continuing to pursue its goal to double the size of the company in three years, from A$100 million in revenue to A$200 million. It wants to expand into the U.S. while continuing to be the sector's No. 1 nonbank player in Australia. "Our traffic has really improved well in the fourth quarter. So things are looking good." OzForex is a mostly online business and offers currency transfers at a lower cost than banks.
OFX Price at posting:
$2.06 Sentiment: Hold Disclosure: Held
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