Trintech revenue beats forecast
The company reported a slight profit of $351,000, marking the third quarter in a row of profitability after sustained losses in previous years.
Chairman and chief executive Cyril McGuire said the results were strong and showed that the company’s investment in new products was paying off.
Davy analyst Brendan Quinn said the results were boosted by better-than-expected hardware revenues and an ongoing cost-cutting programme. The hardware business benefited from Trintech’s focus on so-called “Chip and PIN” technology, which makes credit cards more secure by requiring cardholders to key in a code whenever they paid for goods, in the same way as using a bank cash machine.
Chip and PIN is common in a number of European countries and is being phased in across Ireland and Britain over the next 18 months.
The technology is based on fitting credit cards with a new chip that contains encrypted information and is more secure than the magnetic strip technology currently used on cards.
Hardware generated sales worth $4.3 million.
The balance came from licensing revenues of $5.5 million and services, which contributed $3.4 million. Operating costs were $7.4 million, $0.4 million lower than analyst expectations.
Goodbody analyst Gerry Hennigan said the figure for deferred revenue of $8.6 million was “a slight negative” and indicated a backlog in getting paid for work carried out.
“Trintech’s second quarter results demonstrate the continued successful execution of our strategy of focusing on key growth markets, such as Chip and PIN solutions and treasury and cash management solutions,” said chief financial officer Paul Byrne.
Yesterday’s results meant income for the first six months of the year was 26% ahead at $25.6 million.
The company said its balance sheet was in a good position due to its ability to generate cash.
It has over $38 million in cash on its books.
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