AUCKLAND, 20th February 2012 - SmartPay (NZX: SPY), a leading provider of payments and transactional solutions in New Zealand and Australia, today announced it has restructured its management team, has a major recapitalisation process underway and has implemented a new strategy and business plan.
Consistent with his previously stated intention to retire from his executive role within the Company, the board announces Ian Bailey will retire his role as Managing Director, effective March 30 2012. Mr. Bailey will remain available to support the CEO and the management team with regards to sales and technical development.
Recently appointed Group CEO, Bradley Gerdis, is expected to be appointed Managing Director on or around the listing of the Company on the ASX which continues to be a near term focus for the Company.
As a founding executive of Customers Limited, an ASX listed ATM and payments company, Gerdis was instrumental in the growth of that company from a start up to become Australia’s largest ATM operator. The Customers Ltd business was focused on contracted transactional based revenue streams, a strategy Gerdis aims to implement at SPY.
During his time at Customers Ltd, Gerdis also played a lead role in the development of Strategic Payments Services Pty Ltd (“SPS”), Australia’s leading independent payments processing company and a joint venture between Customers Ltd, Bendigo Bank and MasterCard International. SPY is currently completing the certification of its PAX EFTPOS terminal on the SPS switch which is expected to be completed by mid March, which will provide SPY with immediate access into the Australian banking system in addition to its current certifications with Westpac in Australia.
As a significant shareholder and Group CEO of Smartpay, Gerdis will be focusing on growth opportunities and strategic direction of the Group with a view to significantly increasing shareholder value.
It is expected that Gerdis will make a small number of senior executive appointments to support the evolving strategy for the business.
Recapitalisation Plan and Strategy Update
A review of the current business model by Gerdis has resulted in a new strategy to de-risk the business by moving away from the previous model of discounting the rental book cash flows to external financiers towards a model of maintaining the contracted rental cash flows within the business.
Gerdis says “the current model, whilst key to funding the rapid growth of the Company in the recent past, the company results are characterised by lumpy and unpredictable revenue, earnings and cash flow. Going forward our aim is to retain the annuity style cash flow from the rental contracts within the business which will smooth revenue, earnings and cash flow and in so doing de-risk the business while setting the foundation for our future growth plans.”
“To achieve this we have begun a major recapitalisation plan aimed at moving away from the Company’s previous high cost securitisation funding model towards a conventional bank funding model with the aim to materially reduce the cost of funding and put in place the necessary facilities to achieve our growth objectives. While we are in the early stages of this process with no firm commitments as yet, the level of early engagement we have received from potential banks both within New Zealand and Australia is encouraging” Gerdis said.
Gerdis added “In terms of the broader strategy, the opportunity into Australia is real, sizable and immediate. This is expected to include strong organic growth which will in all likelihood be accelerated through strategic acquisitions aimed at fast tracking our capability, resources and scale into this market which has the potential to significantly exceed our current New Zealand business.
“The focus in New Zealand is to continue to build on our leading market position with a particular focus on extracting incremental value from our extensive existing merchant base. The business has an enviable reputation for technology innovation, a function of our existing IP base and our internal technology development capability. This is a core differentiator and will form the basis for the delivery of additional revenue generating products to our existing and growing merchant base”.
Says SmartPay Chairman Wayne Johnson “Bradley has the complete support of the Board in developing and implementing the new direction for the Group. He has a clear understanding of what needs to be done and has demonstrated a track record of delivering a very similar strategy in a very similar industry and importantly in our core growth market. The Board is confident that once the recapitalisation process is complete and appropriate funding structures are in place, Bradley will have what he needs to take the Company through its next growth phase.”
Johnson notes, “As advised previously, we remain committed to appointing additional directors over time to further strengthen the company’s board, especially in Australia.”
For further information contact:
Wayne Johnson, Chairman SmartPay Mobile +61 411 544 449
Bradley Gerdis, Group CEO, SmartPay, +61 410 623 338
Julien Leys, JML Communications, +64 21 655 598
About SmartPay Limited
SmartPay is a leading provider of integrated merchant services utilising the Internet and broadband connectivity.
SmartPay’s product set includes:
1. Telecommunications products and services including Voice Over IP, Broadband, EFTPOS terminals and secure EFTPOS internet connectivity
2. Audio and video, music, messaging and media via its Retail Radio product set.
3. Prepayment products and transactional processing services for the taxi industry.
SmartPay Core Products include:
• Wi-Fi – one of the largest networks in New Zealand
• In-store Audio Visual Promotional Systems – Retail Radio
• Internet enabled EFTPOS equipment sales and rental
• Gift Cards
• Secure Internet Payments
• Mobile Top-up
• Calling Cards
• Bill Payment Solutions
• Voice over IP (VOIP)
• Online Payments
For more information visit – www.smartpayltd.com