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Date : 04/03/2022

Tyro Payments Ltd (ASX: TYR) Plunged Despite the Robust Revenue in 1H 2022

Tyro Payments Ltd is a technologically oriented and values-driven organisation that provides payment solutions and value-adding commercial banking products to Australian companies. Tyro’s provides payment solutions that are easy, flexible, and trustworthy as a merchant acquirer. TYR also offers to complement business banking products. Based on terminal count, Tyro is Australia’s fifth most prominent merchant acquiring bank, after the four leading banks.

The company announced its results for the first half of 2022. The company’s loss has increased compared to the same period last year despite the significant increase in the revenue and the Omicron variant outbreak.

Today on Monday, the stock values at around $1.56, losing more than 4% compared to the closing price on Friday. The stock closed at $1.63 on Friday. The current market cap of the company is around $803.69 million. The trading volume of the stock is around 5.1 million shares.

TYR: 1H 2022 Key Financials

Last week, the company announced its results for the first half of 2022, and its stock declined in the trading session today.

Tyro Payments Ltd ASX

  1. TYR announced revenue and other income surged by more than 30% to reach $149.2 million for the half-year.
  2. The company announced a net loss after tax or NPAT loss of around $18.4 million for the first half of fiscal 2022. The first half of fiscal 2022 saw more than 450% gain in net loss than the first half of 2021. Last year in the same period, the loss was around $3409.
  3. The gross profit of the company increased to reach 11.3%. Its gross profit was around $68 million in 1H 2022 compared to $61 million in 1H 2021.
  4. The company’s EBITDA decreased more than 67% in 1H 2022 compared to 1H 2021. The company reported an EBITDA of $2.7 million compared to $8.4 million.
  5. The basic and diluted loss per share saw a gain of 400% or $3.51 per share.

TYR Business Achievements

  1. On June 1, 2021, the Bendigo Bank Alliance was penned, and all Bendigo merchants migrated to Tyro Bank as a result. Due to this deal, Tyro achieved $2.5 billion in transactions from the merchants in Bendigo, which was in line with the company’s projections.
  2. Tyro achieved $22.4 million in 2H 2022 from Medipass health providers after it acquired Medipass on May 31, 2021. In addition to the payment transactions, Medipass handled 77 million dollars in claims throughout the reporting period.
  3. During the period, the company’s Merchant Cash Advance (MCA) loan product grew by 36.2 million dollars. The MCA was enhanced in the last half-year to enable advances up to $350,000 and an automated approval procedure using the Tyro app.
  4. Toward the end of the first half of 2022, Tyro signed a deal with Telstra Corporation Ltd (ASX: TLS) that allowed the telco’s business customers to use Tyro’s merchant acquiring solutions.

TYR CEO’s Remarks

Robbie Cooke, Tyro’s CEO and MD said that our Alliance with Bendigo Bank is strategic are evident. Our expectations were met when the Alliance was announced in October 2020. The Alliance contributed $2.5 billion in transactions and $10 million in gross profit after Bendigo Bank’s gross profit portion.

We kept investing in growth prospects. Medipass, a health IT Company that joined the group in May 2021, provided an entire half for the first time. With Medipass, we now have leading unified health claiming and payment product. He added that we can now provide merchant acquiring services exclusively to Telstra business clients through over 350 Telstra retail outlets, Telstra Business Technology Centres, and online is an exciting new acquisition funnel for us.

TYR Dividend Update

For the half-year ending December 31, 2021, no dividends were declared or paid, and no dividends are expected to be paid in the future. In the first half of the fiscal year 2020, the company did not pay dividends.

Conclusion

Although the company provided no guidance for fiscal 2022, seeing its expansion policy, it is evident that the company is focused on increasing its market share. This is why we saw a significant increase in the revenue, but due to the increase in the cost of the sales, the EBITDA and profitability are severely affected. Profitability of the company is the second part of the plan when companies are expanding.

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