Commsecure torpedoed by HSBC
28 August 2007 6:38amCommsecure yesterday told the Australian Stock Exchange that it lost a contract worth $2.0 million with HSBC Asia. The contract is worth 57 per cent of the company’s technology revenues, and was also responsible for most the reported revenue growth of the company in 2006 and the first half of the 2007 financial year.
The loss of the contract, with effect from mid November, may be a company killer.
In the ASX announcement Commsecure said it would “need to restructure its operations”, was “considering its options” and asked to extend the suspension of its shares to September 10. The shares last traded at around three cents, as they have for a year or more.
CommSecure has yet to receive, in cash, most of $1 million in royalties due from the company’s residual mining assets and these payments that stretch into 2008 may help keep the company solvent.
The company’s other businesses in payment processing and bill presentment may prove attractive to other niche providers in the payments space, many of whom, like Commsecure, are looking for a profitable business model.
Article By: Ian Rogers
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