Things To Know About This Commercial Services Stock- A2B Australia Limited

  • Jan 23, 2019 AEDT
  • Team Kalkine
Things To Know About This Commercial Services Stock- A2B Australia Limited

Formerly known as Cabcharge Australia Limited, A2B Australia Limited (ASX: A2B) is a key player in the digital payment market. Currently, the company’s payment software is used by major banks and service providers.

In FY18, the company invested in technology and marketing initiatives to strengthen the quality and consistency of its service offerings. During FY2018, the total revenues of the company increased by 22%, with 4.5% organic growth in payment turnover, 12 percent organic growth in the affiliated fleets and the acquisition of Yellow Cabs Queensland. 

The company’s payment turnover growth was also well supported by its handheld terminals that have been taken up by over 7k Drivers. The company made a net profit after tax from continuing operations of $13.6 million in FY 2018.

In FY 2018, the total operating cash expenses increased by 46% or $48 million to $151.3 million (FY17 $103.6 million). The addition of Yellow Cabs Queensland contributed $31.4 million in operating cash expenses. Excluding Yellow Cabs operating expenses increased by 14 percent or $16.3 million as compared to FY 2017.

Compared to FY 2017 on a like-for-like basis volume driven cash expenses increased by 16 percent or $5.3 million. Of this increase $1.0 million is attributable to the launch of fleet operations in Adelaide, $2.7 million relates to car sales, $2.5 million relates to other Taxi related costs while processing fees payable to Taxi Networks reduced $1.4 million.

On a statutory basis, total cash expenses increased 45% or $47.2 million to $152.8 million which includes $33.7 million in additional expenses relating to Yellow Cabs. During FY18 $1.4 million in costs associated with the acquisition of Yellow Cabs Queensland were incurred. These expenses are excluded from underlying cash expenses.

Total capital expenditure for FY18 was $15.7 million (FY17 $12 million), $0.4 million more than depreciation and amortization expense combined for FY18. The increase in capital expenditure is primarily due to the launch of fleet operations Adelaide ($1.9 million), handheld terminals which are not yet deployed ($0.8 million) and increased software development. The proceeds received in FY18 from the sale of CityFleet Networks Ltd ($12.9 million) and property in Newcastle ($3.2 million) largely funded the acquisition of Yellow Cabs Queensland ($20.9 million).

For FY 2019, the company has reset its businesses that are profitable, generating cash, debt-free and is continuing to deliver growth in core revenue streams of payment turnover and fleet affiliation. It is expected that the increasing population, urbanization, vehicle costs and consumer preferences will support the company’s growth in the personal transport industry in FY 2019. In FY19, the company’s core focus will be on the national rebrand of its 13cabs Networks, completing the integration of Yellow Cabs Queensland and accelerating the development of integrated dispatch solutions.

In the last six months, the share price of the company decreased by 13.87 percent as on 22 January 2019. A2B’s shares traded at $2.040 with a market capitalization of circa $246.88 million as on 22 January 2019.


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