Multi-country BPO PayGroup Limited (ASX: PYG) reported its half-year financial results for the six months ended 30 September 2018 (H1 FY19).
The company has reported a statutory revenue of A$1.9 million. This represents a four-month contribution of its operating subsidiary PayAsia. The Proforma revenue, was A$3.3 million, in line with the pro forma revenue for H1 FY18, as provided in the company’s Prospectus. The proforma revenue, however, has been adjusted to reflect a six-month contribution of PayAsia which includes its revenue from PayAsia India.
The company has signed new contracts of A$2.8 million during the first half of FY 2019. The total contract value was based on average 3-year contract terms. Over 90% of the TCV added during the half was generated from sales to new customers. The company signed several other contracts in the later half-year period, which will be implemented, and the billing will start in second half of FY 2019, in line with the company’s standard of implementation occurring within three to four months of signing.
The company is positive about its future growth outlook, supported by its channel partner program. PayGroup sells BPO solutions and SAAS modules through its direct sales team as well as the channel. The channel partner program is likely to be a very crucial growth driver for the company with several international referral partnerships. This might help the company to expand its reach into North America, UK, and Europe.
The company has also entered into two new strategic referral partnership agreements with Japanese company Payroll Inc and UK based company PeopleFirst. Both these partnerships are expected to deliver new sales from FY20 onwards.
On the earnings front, the company has reported a statutory EBITDA loss of A$1.0 million for the half-year period. This was primarily due to the off expenses of A$0.4 million related to the ASX listing. The company reported a proforma EBITDA of A$0.8M which reflects the Group’s investment in consolidating the operating platform, market expansion, other technology enhancements over the period and inclusion of the Indian payroll business.
The company also reported a statutory A$1.1 million net loss after tax for the first half of FY 2019. This includes one-off costs (exceptional items) and expenditure related to partnering and market development activities. The company pro forma NPAT stood of A$0.6 million for the six months.
The company currently pays a dividend on a half-yearly basis. However, it is subject to making a profit over the relevant period. The company pays an aggregate dividend amount, which is not less than 50% per annum of the reported net profit after tax.
The company's MD and CEO, Mr. Mark Samlal stated the company has delivered a robust performance in the initial phase after being listed. It has performed excellently in terms of sales to its new customers in the first half of the year. The company has maintained the revenue of its underlying business even during a period of its intense focus on the launch of its IPO, and investment in technology and several partnerships.
The last traded price of the stock is $0.855. The stock performed steadily with a yield of 12.71% during the previous six months.
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