Challenger bank Tyro Payments pulls off 30 per cent transaction growth
20 February 2020, Written by Matt Ogg
"With close to 59,000 terminals now in the field, we are the fifth largest merchant acquiring bank in the market with the big four holding the top slots," says Tyro Payments CEO Robbie Cooke (pictured).
The cost of implementing the largest IPO by market capitalisation in 2019 has taken its toll on business bank Tyro Payments' (ASX: TYR) bottom line, but revenue and merchant numbers are moving in the right direction.
The Sydney-based company reported a 29.7 per cent surge in processed transactions to $11.1 billion in the first half of FY20, as more businesses turned to its solutions ranging from credit and debit to Medicare and private health fund claims.
With significant backing from the likes of Mike Cannon-Brookes' investment vehicle Grok Ventures and Euclid Capital Partners managing director Danita Lowes, the group raised $125 million to list on the ASX in mid-December.
Since then its share price has risen by 28 per cent, which exemplifies the heightened interest from investors in fintechs that challenge banking norms.
Tyro's EBITDA went into positive territory as well to $1.5 million, following a $3 million loss in the first half of FY19.
The company's pro forma loss deepened by 22.1 per cent, but the statutory loss was 151 per cent greater at $19.2 million due to around $10 million in costs associated with the IPO.
CEO and managing director Robbie Cooke - formerly of Tatts Group and Wotif fame - is pleased with Tyro's first result as a listed company. The group now has more than 32,450 merchants on board, representing growth of 23 per cent.
"We lifted revenues 28 per cent to a new record $117.3 million and booked a positive EBITDA result," he says.
"All this was achieved at a time when considerable focus was on our IPO. Maintaining our operating rhythm in such a frenetic period demonstrates the robustness of our business and the depth of talent in our team.
"With close to 59,000 terminals now in the field, we are the fifth largest merchant acquiring bank in the market with the big four holding the top slots."
He says the company is gaining traction on several fronts, including as the first to market in Australia with a fully integrated Alipay solution and providing simplified day-to-day e-commerce payments through seamless in-store and online transaction solutions.
"As a tech company we are able to stay at the front of the curve when it comes to delivering payments solutions responding to our customers' needs," he says.
"Our banking operation continues to track well with all products offered to merchants growing strongly albeit from low bases. Our merchant cash advance loan achieved a record level of originations in the half year increasing 82 per cent over the same period last year to $37.4 million.
"Our fee-free, interest-paying bank account now has over 3,100 active accounts representing an increase of 80% over last year with $39.7 million held in deposits at 31 December 2019. We also launched, in pilot, our new term deposit account and intend to make it available to our entire merchant base in the second half of FY20."Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
Business News Australia
Author: Matt Ogg