Novatti - The $1 party, page-3738

Interesting announcement relating to Tyro who are in the payments space providing business banking products including point of sales terminals:

'Oct 18 (Reuters) - Three of Australia'sbiggest banks are considering a bid for payment terminals firm Tyro (TYR.AX),underscoring the importance of new revenue streams as rising interest ratesbatter the mortgage market. Australian retail banks are anxious to compete withBlock Inc (SQ.N), the payments firm controlled by Twitter founder Jack Dorsey,which has been expanding its point-of-sale offer in the country since buyingbuy-now-pay-later giant Afterpay this year.'

It's worth noting that Tyro is currently valued at $824m based on gross profit of $148.5m (24% YoY) and ebitda of $10.7m (FY22 Investor Presentation).

With revenue of $32.5m (97% YoY) and pre-tax loss of $16.6m following significant investment in newer lines of business, including Acquiring, Issuing and Emersion (business automation/ payment processing), Novatti is looking seriously undervalued based on revenue/ run rate. The loss is a different matter and is clearly unsustainable. Having reduced the burn rate in the last quarter, I'm expecting to see a further reduction reported at the end of the month alongside increasing topline growth. With a second quarter of reducing costs, it would demonstrate to the market that they’ve got a handle on their cost base which they should now be leveraging to expand their margins.