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Irish secure payments firm Trintech is to cut jobs following disappointing first quarter results that saw its revenue fall by 41 percent.
Trintech's chairman and chief executive officer, Cyril McGuire, told ElectricNews.Net that 25 jobs would be lost from the company's 475 strong workforce over the coming quarters as it looks to further reduce its costs. McGuire said that "very few, if any" jobs would be lost in Ireland. Trintech employs over 200 people here.
However, McGuire said he was confident that Trintech would be pro-forma profitable by the end of the year. "This worst is behind us," he commented. "The building blocks are now in place to build a profitable business."
The last six months have not been good ones for Trintech, which produces software and hardware for secure credit and debit card payments. During that time it cut eight percent of its employees, announced the replacement of its chief executive officer, was forced into a split of its stock in order to boost its listing on the Nasdaq, and announced a profit warning for Q1. Its latest results will have not improved matters.
In its results for the period ended 30 April 2002, Trintech said that revenue in Q1 fiscal year 2003 fell to USD10.1 million compared to USD17 million for the corresponding quarter last year. The company said the decline in revenue in its latest quarter was mainly due to a difficult market environment and "slower than anticipated" new product launches.
This latter issue, added Trintech, was a factor in its product sales decreasing from Q1 2002 by 70 percent to USD1.8 million in Q1 2003. The main factor, however, was the weakness in its European Point of Sale (PoS) business line, particularly in the German market. Trintech said that it expect PoS sales to recover in coming quarters due to the introduction of new products and entrance into new markets.
Gerry Hennigan, equity analyst with Goodbody Stockbrokers, said the results were "very weak" and that the outlook for the company was not great at present. "There is obviously a problem with the product line because sales in that area for several quarters in a row were around USD6 million and USD7 million, so there has been a huge fall," commented Hennigan.
Trintech's software license revenue also took a hit during the quarter with it being down from the same quarter a year ago by 31 percent to USD5.2 million. Service revenue was relatively flat at USD3.1 million when compared with the same quarter in fiscal year 2002, but was up sequentially by 19 percent.
Pro forma basic and diluted net loss per equivalent American Depository Share (ADS) for Q1 2003 was USD0.29 compared with USD0.37 for Q1 2002. In mid-May, Trintech announced a one-for-four reverse split of its American depository shares and its latest results reflect that split.
However, pro forma operating expenses were down by 38 percent in Q1 in comparison to the same quarter last year to USD9.7 million, which was the fifth consecutive quarter of decline.
On the Neuer Markt segment of the Frankfurt Stock Exchange, Trintech is down 16 percent in early trading on Wednesday to EUR1.68, which is a 52-week low. Its current year high was USD8.44 and the 52-week high was USD13.92. Recently Trintech was removed from the Neuer Markt's NEMAX50 Index.
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