Tech: Headaches galore at Axsesstoday as half-year profit nosedives following loan breaches
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The headaches are turning into migraines at fintech Axsesstoday (ASX:AXL) as its half-year profit has plummeted deep into the red and its previously bullish FY19 guidance has been withdrawn.
The company, which lends to small and medium businesses, has endured a horror six months.
It lost founder and CEO Peter Ferizis in September as it went into voluntary suspension pending a strategic review.
That strategic review was triggered when the company realised it had breached covenants with senior bank lenders after publishing its 2018 annual report.
That report was all sunshine and roses, delivering a 131 per cent increase in revenue to $49.2 million and a 93 per cent rise in profit to $7m.
The suspension has continued uninterrupted since then as the company attempts to “address issues arising from breaches of financial covenants and other requirements of its borrowing facilities and to conduct a strategic review”.
The breaches led to Axsesstoday restating its 2018 financial figures, with profit falling to $3 million.
Interestingly, it also walked back Ferizis’ “resignation” saying that actually, he was sacked.
Axsesstoday told shareholders on Thursday morning that when it reports its half-year accounts, which are overdue, it will post a loss between $13 million and $15 million, supposedly due to the company’s transition to accounting standard AASB9 which “resulted in an increase to the collective provision of about $27m”. It also said that any past earnings guidance for FY19 had been withdrawn.
The strategic review is ongoing, and the company announced on Monday that it had appointed Moelis Australia to assist it.
“The company continues to work closely with its financial stakeholders to remedy the issues subsisting under its lending agreements and to consider potential recapitalisation, sale and restructure options,” it said.