BPS stands by forecast

BPS Technology - the operator of the Bartercard payment network - has moved to reassure the market that the business remains on track to deliver its forecast profit in FY18 following a sharp dive in its share price this month.

Fund managers Alceon and LHC Capital have been selling down their stakes in the company after their bid to remove and replace the entire board failed.

They had expressed concerns over the way BPS was being run in relation to cash flow, board composition and corporate governance.

Since the Extraordinary General Meeting on November 3, where shareholders voted against all nine resolutions put forward by the fund managers, the share price has plunged from 80¢ to well below 60¢.

Yesterday, more than one million BPS shares were traded – a massive increase on the normal daily volume.

Chief executive Trevor Dietz, who announced he would be stepping down prior to the EGM, said BPS wanted to highlight to shareholders that its performance during the first four months of FY18 was in line with expectations.

In an announcement to the ASX, the company said it expected revenue and earnings for FY18 to be $110 million and $10.3 million respectively.

“We have listened to the message they (Alceon and LHC) delivered previously and we have changed the business. We are looking for my replacement, adding people to the board and looking to reduce costs,” he said. BPS has outlined $6 million in cost-cutting over the next three years, which Mr Dietz said, would partly come from streamlining the company’s digital platforms.

Mr Dietz said the company would release further details at its general meeting next week.

He said the share price had been “artificially effected” by the two funds and he did not expect the large volumes of BPS shares traded this month to be ongoing.

“The volatility in the shares volume is temporary in its nature we believe,” he said.

“The goal is for these funds (Alceon and LHC) to exit in a controlled way that is not damaging to the other shareholders.”