No MBO for rich Trintech

CASH-rich Trintech, which reported revenues for the third quarter broadly in line with expectations, is unlikely to follow Conduit and Riverdeep down the management buy-out route (MBO), brokers Dolmen speculated yesterday.

With a market capitalisation of close to $27m and cash reserves of 48.3m, Trintech reported revenues increased by 5% sequentially to $11.4 million. However, year-on-year the revenues at the electronic payments infrastructure company were down from the $17.4m earned in the third quarter of last year.

Commenting on the results, Dolmen analyst Pat Duggan the group attributes the decrease in revenue over the longer period to the current state of the global economy.

“This also represented the seventh consecutive quarter of declining operating expenses, which fell by 43% in Q3, compared to the corresponding period last year. Third quarter software license revenue was $5.7 million, a decrease of 31% over software license revenues of $8.2 million for the corresponding quarter, last year.”

He said while speculation persists that the group is a strong candidate for a MBO, he remains neutral on the stock due to the latest results. “Until overall operational and revenue performance improves, upside in the stock may only be achieved from MBO speculation,” he added, rating the stock a hold.

While it says it isn’t undertaking a MBO, Trintech has approved a share buy-back programme to return value to shareholders and boost the stock price. Goodbody Stockbrokers’ Gerry Hennigan said the buy-back is to commence December 2.