The Tyro Payments Ltd (ASX: TYR) share price is sinking lower following the release of its full year results.
At the time of writing the payments company's shares are down over 4% to $3.27.
How did Tyro perform in FY 2020?
It really was a tale of two halves for the payments company in FY 2020. A strong performance in the first half was undone very quickly in the second when the pandemic hit its customer base extremely hard.
The majority of Tyro's merchants are small to medium sized enterprises (SMEs) operating in the hospitality, health, and retail verticals. Management notes that COVID-19 wreaked havoc on the plans and ambitions of many of these businesses and subsequently Tyro's payment volumes.
For the 12 months ended 30 June, Tyro delivered a 15.1% increase in transaction value to a record $20.1 billion. This led to an 11% increase in total revenue to $210.7 million.
However, having delivered $1.5 million of earnings before interest, tax, depreciation, and amortisation (EBITDA) in the first half, it swung to an EBITDA loss of $4.4 million for the full year.
On the bottom line, the company recorded a statutory net loss after tax of $38.1 million, compared to a loss after tax of $18.4 million a year earlier. Though, this includes one-off costs associated with listing on the Australian share market in December.
On a pro forma basis, the company record a net loss before tax of $25.9 million. Compared to a pro forma net loss before tax of $19.1 million a year earlier.
Fortunately, the company has a strong balance sheet and is well-placed to weather the storm. It finished the period with $188.3 million in cash and financial investments available for its future growth.
Serious COVID-19 disruption.
Robbie Cooke, Tyro's CEO and Managing Director, notes that its performance in FY 2020 was seriously disrupted by the pandemic.
He commented: "Like many of our merchants COVID-19 seriously disrupted our plans and ambitions for the year. In February we had been on track to deliver our Prospectus forecast, however by March we recognised the uncertainty COVID-19 posed and decided to withdraw our forecast."
"We also took the unique step in March of providing weekly transaction value updates to provide full transparency as to our performance as we navigated the extreme uncertainty thrust upon our operation. I am pleased to say we will continue these updates at least until the end of calendar 2020," he added.
Outlook.
Mr Cooke is cautiously optimistic on the future thanks to Tyro's resilient business model.
He commented: "The COVID-19 challenge continues to feature with the second wave of the virus significantly impacting our Victorian merchants and the broader consumer sentiment across Australia. We remain on high alert as the risk of further outbreaks remains."
"Whilst we are not immune to the pressures facing the Australia economy, we have a resilient business model and a determination to continue on our journey of building an ecosystem centred around payments, enhanced by value-adding features and products designed to attract new merchants and retain existing merchants."
"We remain as convinced as ever as to the opportunity in front of us as we remain focused on our purpose of setting businesses free to get on with business by simplifying payments and banking," he concluded.
Unsurprisingly, no guidance has been given for the year ahead.
