BPS guides $5.5m profit
GLOBAL trade exchange business BPS Technology has delivered a 58 per cent increase in net profit following its “game-changing” acquisition of restaurant and activity guide Entertainment Publications.
The Southport-based business lifted half-year revenue by 123 per cent to $55.9 million compared to the previous period and net profit rose almost 60 per cent to $5.56 million.
The addition of the guide, bought for $33.7 million in August, provided a significant $32.75 million boost to halfyear revenue.
The figure surpassed its Bartercard arm’s revenue of $23.16 million, although pretax earnings of $6.8 million for Bartercard were higher than Entertainment Publications’ $2.95 million.
The company said it expects the guide to generate higher cash flow in the 2017 second half as most receipts were generated between April and July through the guide’s network of 18,000 not-for-profit groups.
Chief executive Trevor Dietz said the company is progressing well in growing its digital reach and integrating Entertainment Publications.
“The performance of the company has been solid,” he said. “It has met expectations. We have beaten guidance, improved dividend returns and we expect to meet guidance for the full year.”
Mr Dietz said purchase of Entertainment Publications is a “game-changer” and BPS is focused on expanding digital subscriptions.
“The mobile app has gone from 25 per cent penetration to 30 per cent in the past six months,” he said. “We hope to achieve 35 per cent penetration by the end of the financial year.”
Mr Dietz said the highest levels of penetration are in Brisbane and Sydney due to the larger number of deals offered in those markets.
Other highlights from halfyear results include the BPS partnership with small-business finance provider Get Capital.
“We are responding to demands made to us by our members,” Mr Dietz said. “We understand there is a desperate need for short-term finance. Banks are not addressing this.”
In the US, Bartercard has increased its franchises from 10 to 20 and lifted revenue by 89 per cent to $859,000.
“We have grown the number of franchises in a short period. It is a good indication that the market remains strong.” Mr Dietz said.
Bartercard also has sold a software licence to enable the launch of Bartercard France, acquired two Bartercard franchisees in Australia, and enlarged its global footprint to 95 branches.
Mr Dietz said the value of its property listings worldwide rose to $150 million.
Also, it has signed a deal with online retail firm SmartTrans Holdings, a partner of China online giant Alibaba, to gain preferential access to China for Australian members.
BPS reaffirmed full-year guidance for net profit of $10.6 million and revenue of $109.1 million. It declared a fullyfranked interim dividend of 2.25¢. Shares closed 4¢ or 4.34 per cent higher at 96¢.