Shares in S&P/ASX 300 Index (ASX: XKO) payment provider Tyro Payments Ltd (ASX: TYR) are dodging the worst of today's carnage. It comes after the stock upped its financial year 2023 (FY23) guidance amid takeover whispers.
The company's CEO Jon Davey outlined a "difficult but necessary" cost cutting program, expected to allow the company to post greater earnings than previously projected.
Meanwhile, big banks and private equity are rumoured to be eyeing off the fintech.
Shares in the ASX 300 company are currently swapping hands for $1.47 apiece. That's 1.01% lower than the Tyro share price's previous close. For context, the ASX 300 is down 1.72% right now.
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ASX 300 fintech ups guidance amid cost cutting spree
ASX 300 favourite Tyro Payments is in the spotlight today. It comes as the company ups its guidance and provided an update on the fiscal year so far.
Tyro is embarking on an $11 million cost reduction program, expected to deliver $5 million of savings this financial year.
As a result, the company believes its earnings before interest, tax, depreciation, and amortisation (EBITDA) will come in at between $28 million and $34 million in FY23.
Meanwhile, its guided transaction value has been lifted from $2 billion to $42 billion. Finally, its gross profit guidance has been upped by $6 million to $181 million.
Tyro also revealed it had processed around $10.4 billion worth of transactions in the first quarter – a 59% year-on-year improvement. It also received $32.7 million of merchant loan originations over the period – a 116% increase.
Commenting on the ASX 300 company's performance and cost cutting program, Davey said:
All our operating metrics are either in line with, or exceeding, expectations which, together with our new cost reduction program, gives us the confidence to lift guidance for FY23.
This program is targeted at reducing costs in non-revenue generating parts of the business without impacting our customer experience or product delivery timeline.
To cut costs, Tyro will be reducing staff numbers, changing its mix of permanent employees and contractors in technology, and reducing expenses.
The company also confirmed it will deliver its new digital onboarding platform in November, its Tyro Pro terminal in December, and its Tyro Go reader in January.
Could Tyro Payments face another takeover bid?
Additionally, one of the big four banks is rumoured to be sizing up Tyro, The Australian reported last week. The unnamed bank could hope that snapping up the fintech will bolster its payment technology offerings.
However, a bid from private equity has been tipped as more likely, according to the masthead.
Some shareholders are said to be willing to hand their stake over for $1.50 apiece. Meanwhile, Morgan Stanley reportedly believes an offer of $2 to $2.50 would value Tyro fairly in comparison to its peers.
The ASX 300 company rejected a $1.27 per share bid put forward by private equity last month.
