Top member reports
Consensus community valuation
$0.760
Average Intrinsic Value
19.7%
Undervalued by
Active Member Straws
#Broker / Analyst Views
Added 5 days ago

24-June-2020:  CCZ Equities Research:  Smartpay (SMP):  FY20 Results:  A Smart Way Forward for Investors & Fee Conscious Merchants

Recommendation: BUY, Target Price: 76cps (56cps previous), Market Capitalization: $132m.  [I don't hold SMP]

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#Industry/competitors
Last edited 3 days ago

Smartpay/Tyro. 

Has anyone used or had a quote from Tyro? I am just wondering if they offer the free efpos machine for higher turnover businesses? They don't advertises doing so. 

A quick look at Smartpay site. They add an automatic surcharge to the customers bill to cover card fees. On their example they have a 1.65% charge on a $29 meal. That's high. If that's a fixed fee of 0.48c as suggested on their site, my $5 coffee becomes $5.48. It's like being quoted a before gst price. Feels like a rip off I'm going next door for my favourite tipple from now on.

A meal for 2 at $70. 0.48c isn't going to be noticed by me (and I'm tight !!!) especially if the food was good. This is still 0.68% card fee. What do banks charge?

Small transactions but high customer turnover then smartpay is good for the business but maybe only short term or where local custom is not a priority!? Low customer turnover but high invoice charge, smartpay is very cheap. I doubt they will be interested in these businesses though. 

Tyro is looking to reduce those fees for the business. They have lots of cash. Experience directors and bank facilities. I would think Tyro have the ability to offer free machines if needed!?

Just had a beautiful walk on the caloundra boardwalk. Stopped for a coffee and paid using their Square efpos app. On the website they also charge 1.6% transaction fee. Bought other stuff so not sure if they passed on the fee. Competition is high!?

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#Broker / Analyst Views
Added 2 months ago

08-May-2020:  CCZ Equities Research: Smartpay (SMP): A Smart Buy, Deal or No Deal

See also:  01-May-2020:  Update On Proposed Sale of NZ Business and Assets

CCZ has a "Buy" call on SMP and a TP of 56 cps (previously 62 cps).

SMP closed up +10% at 44 cps today (08-May-2020), possibly partly due to CCZ distributing their "Buy" note this morning.

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#Bull Case
Last edited 3 months ago

H/T Mal85 and egpTony.

So here's a business that's not so hard to understand.

They provide (rent) ETPOS terminals to small businesses and they charge monthly fees/ a cut.

The company chugged along for 8 years with almost no profile until late last year they announced the sale of the NZ business for $70 m (NZD), at that time more than the market cap. The government decision for the sale has been extended to May 15th and then there's the prospect of a 20 cent dividend. I now have a higher chance this may not get approved or will get renegotiated .

The AU business had 4148 terminals at end of December 2019 and they didn't meet my target of 5500 by end of March 2020. That's likely revenue of about $1.1 m or $13 m annualised in a normal environment (conservative). But these are operating at 60% down currently and the question is for how long this will be the case and what levels these will return too (my guess in valuation report).

 

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