19 November 2015
BPS Technology is on the hunt for trade exchange acquisitions as it aims to become “the Microsoft of the barter industry”.
BPS, which owns the world’s largest global trade exchange, Bartercard, is eyeing a larger slice of the $20 billion global trade exchange market.
“There are more than 2500 trade exchanges across the world that annually trade $20 million; we are the gorilla in the room with $600 million in transactions annually,” chief executive Trevor Dietz told shareholders at the company’s annual meeting in Southport yesterday.
“There are none out there that are bigger than us.
“If we can address just part of that $20 billion, there is a major opportunity for us to expand our business.”
Mr Dietz said FY2016 would be “a very strong year of mergers and acquisitions”.
BPS, which launched in South Africa and signed agreements in India and China in FY15, is looking to acquire trade exchanges, particularly in North America and Europe, and target profitable franchises in Australia and New Zealand.
“We will continue to grow the business ... by opening new territories and new licences,” Mr Dietz said.
“We will also acquire other trade exchanges around the world.
“We will focus on our two nearest markets of Australia and New Zealand but we are also looking to mergers and acquisitions (and) there are good opportunities for us to grow our business within the SME market in sectors allied to what we do.”
Acquisitions will be funded through a combination of cash, debt and equity.
The company also plans a capital raising via the issue of up to 10 million shares of the 58.5 million shares on issue.
BPS, which listed in September 2014, also owns Bucqi, a loyalty platform for SMEs, and Tess, a cloud-based software platform developed to service Bartercard’s trade exchange, and sees both as sources of strong revenue growth.
Mr Dietz said BPS had delivered “as both a growth stock and a yield stock” despite some early hiccups.
The company posted a net profit of $7.9 million in FY15, up from the forecast $6.5 million but revenue of $48.1 million was down on the anticipated $51.6 million due to delays in launching Bucqi.
Chairman Murray d’Almeida said BPS’s share price also had tracked lower than its issue price of $1 through part of FY15 because a US fund had sold down its entire Australian portfolio due to the deteriorating Australian dollar.
“This fund sold more than 1.5 million BPS shares in the market shortly after the company listed,” Mr d’Almeida said.
However, he said BPS had retained the support of several well-known institutions.
Bucqi is now being trialled in Southport, Toowoomba and Cairns and will be rolled out through clubs and not-for profit groups with other countries to follow.
BPS shares closed half a cent higher at $1.17.
Source: The Gold Coast Bulletin
19 November 2015