IncentiaPay wipes out after revealing it can’t deliver on earnings forecast
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Investors have run away in droves from IncentiaPay after the incentives and digital payment provider admitted it probably won’t deliver on its earnings prediction in FY19.
Following a review of its operations, IncentiaPay (ASX:INP) told investors it “no longer expects to deliver” underlying earnings before interest tax, depreciation and amortisation (EBITDA) of between $3m and $5m for FY19.
“As a result of the strategic review, the timing and outcome of various initiatives is difficult to forecast,” IncentiaPay said.
“Given this, the company will not be providing guidance at this stage.”
This drove shares as low as 1.4c — an 82 per cent plunge — on Friday morning, with over 37 million shares changing hands just before midday AEDT.
Shares edged back up slightly to trade at around 2.2c.
IncentiaPay told investors at the time it released its FY18 results in August that it expected its investments in the Alipay and Gruden businesses would already reduce its forecast EBITDA by about $4m.
In September last year, IncentiaPay inked a deal with Alibaba’s associated company Alipay, the world’s largest third-party mobile and online payment platform, to deploy it as a payment method through a selected number of its Entertainment merchant network.
In May of this year, the company acquired Gruden, a marketing and transactional payment company that services over 500,000 users across about 800 retail outlets and handles in excess of 100,000 transactions per month.
IncentiaPay booked a loss of $62.2m in FY18, down from a profit of $10.3m in FY17.
On top of its earnings woes, IncentiaPay conceded it would also probably not be able to draw down any more funds from its current debt facilities to cover it for the rest of FY19.
The company said it is currently reviewing its capital requirements and determining options to ensure ongoing access to funding.
CEO Iain Dunstan also “left the business”, IncentiaPay said.
Darius Coveney has stepped in as acting CEO and been appointed as an executive director.