Competitive Headwinds Drive P2P Transport To Report The Slowest Quarter; Share Price Tumbled By 18.919% 

Competitive Headwinds Drive P2P Transport To Report The Slowest Quarter; Share Price Tumbled By 18.919% 

Point to point transport services company, P2P Transport Limited (ASX: P2P) on 23 April 2019 announced its Cash Flow Statement for Q3 FY2019 for the period ended 31 March 2019. The company also provided an update related to the current trading activity and its outlook for FY19 followed by changes in the Board and Management.

Third Quarter FY2019 cash flow statement.

During the quarter, the revenue generated by the company increased by 65.9% to $16.1 million as compared to the previous corresponding period. The operating cash outflow during the period was $1.1 million which was $1.97 in the pcp. The cash flow result was driven by lower activity during January and February along with the competitive issue which influenced the operations at Melbourne and Gold Coast. The technical issues also affected the Digital Taxi Top units which resulted in remedial costs. There was an improvement in the Sydney Fleet Services utilization by 9.4% on pcp. It would result in stronger Q4 across the business. The Network Services had grown from 1,400 at time of acquisition to around 2,040 vehicles as a result of expansion into Melbourne ahead of expectations and Sydney commencing in the fourth quarter of FY2019.

Despite the poor performance of Digital Taxi Tops, in the third quarter of FY2019, there was an increase in the Adflow revenue by 191%. The balance sheet of the company remained stable with a net asset base of $20 million along with net cash and cash equivalent of $1.5 million.

Trading update and FY19 outlook, and Board and Management changes

Based on the result of Melbourne and Gold Coast competitive issues, the company expects to deliver the below-mentioned revenue and underlying EBITDA for the year ended 30 June 2019.

  • P2P Transport Limited expects that the revenue would be between $77 million and $80 million.
  • The Underlying EBITDA to be in a range of $7.8 million to $8.2 million. The company further expects an additional $1.0 million in earnings from the Fuel Tax Credits which is at present subject to review by the auditors of the company.
  • During the period, two senior executives, Matthew Reynolds (the Chairman) and Tom Varga (CEO) resigned from the post with immediate effects. Now, Chip Beng Yeoh who is the Non-Executive Director has been appointed as the interim Chairman. Executive Director Greg Webb has been appointed as interim CEO of the company.

On 17 April 2019, the shares of the P2P were on trading halt pending the announcement of the quarterly cash flow statement followed by the trading update. However, after the announcement, the shares assumed trading on ASX, and by the end of the trading session on 23 April 2019, the share price of P2P declined significantly by 18.919%. The closing price of the stock was A$0.300, and it reached its 52-week lowest price. P2P Transport Limited holds a market capitalization of 30.93 million and approximately 83.59 million outstanding shares. Today, around 109,515 shares of P2P traded on ASX.


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