BPS to enter new era
EMBATTLED Bartercard operator BPS Technology is planning to change its name to IncentiaPay and acquire digital agency Gruden Group, in a move designed to focus on the fast-growing arms of its business.
The announcement, which coincided with BPS reporting its half-year results yesterday, follows the resignations of BPS Technology co-founder and CFO Tony Weise and Bartercard co-founder Brian Hall after questions were raised over irregularities in financial reporting for the past three years.
BPS has been under pressure since last year following a failed boardroom coup by a minority shareholder group, which led to founding CEO Trevor Dietz resigning.
He was replaced by Dunstan.
The company has seen its share price plummet from 84c in November to just 31c on Tuesday.
Mr Dunstan has moved quickly to implement changes Iain to focus on the Entertainment Publications and Alipay businesses.
The acquisition of restaurant and activity guide Entertainment has been a massive boost to BPS coffers, with the business generating $65.8 million in earnings in FY17.
By contrast, Bartercard revenue in 1H18 fell 15 per cent compared to the previous period.
BPS’ tieup with Asian mobile-phone payment platform Alipay is seen as an opportunity to make inroads into the Chinese tourist market.
Yesterday BPS issued a half-year loss of $36.7 million after tax, compared to a profit of $5.55 million in 1H17.
The loss was largely due to $30 million in writedowns on the value of its asset, which was largely related to Bartercard operations.
It also announced a non-renounceable two-for-three entitlement offer to raise $22.1 million at an issue price of 28c.
BPS put its shares into a trading halt, pending completion of the offer, and said it expected to resume trading on Friday.
In addition, it said entities associated with Mr Dietz, Mr Hall and Mr Wiese will sell 9.3 million shares at 28c, and scheduled a meeting for April 5 to pass resolutions including one to rename the company IncentiaPay.
The company said it has entered into an agreement to acquire Sydney-based Gruden Group — a listed digital marketing and transactional payment company.
Under the terms, BPS has agreed to provide consideration of $8 million, comprised of 27.68 million BPS shares and $250,000 cash, to Gruden.
BPS said the benefits of the acquisition, if it goes ahead, would be to provide access to customers including Red Rooster and Starbucks, further penetrate the fast food and hospitality sectors, and tap into cost synergies with other parts of its business.
BPS provided full-year guidance of revenue of $110 million and underlying EBITDA of between $4.5 million and $6.5 million. Resolutions to be put to a meeting on April 5 include approval of the share issue to Gruden.