Gold Coast director of Skybound Capital Jeremy Thorpe denies plans to take over consumer payment company IncentiaPay

The Gold Coast director of an international fund that has bought a sizeable chunk of IncentiaPay says it will look to add value to the “troubled” business, but has no plans to launch a takeover.

THE Gold Coast director of an international fund that has bought a sizeable chunk of IncentiaPay says it will look to add value to the “troubled” business, but has no plans to launch a takeover.

IncentiaPay, formerly BPS Technology, is the owner of restaurant and activity guide Entertainment Publications and previously owned Gold Coast-based trade exchange network Bartercard.

It has seen its share price collapse after a number of problems including a well-publicised boardroom stoush, management changes and the divestment of assets, including Bartercard.

Mauritius-based Skybound Capital last month bought a near 15 per cent stake in IncentiaPay through company vehicle New Gold Coast Holdings.

IncentiaPay was rolling out Chinese mobile payment method Alipay on the Gold Coast. Picture: Jerad Williams

Late last week IncentiaPay launched a $1.154 million share placement, at 8¢ per share, with New Gold Coast Holdings, enabling Skybound to increase its stake to 19.9 per cent.

Skybound’s Australia director Jeremy Thorpe, who has lived on the Gold Coast for the past 10 years, said the company, which must lodge a takeover offer to shareholders if it wants to acquire more shares, is still considering its options.

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However, a takeover wasn’t currently on the table.

“Nothing like that has been considered whatsoever,” he said.

“It is very very early stages. We acquired some shares in the company and we subscribed to a share placement and we are now just under 20 per cent.”

Former IncentiaPay CEO Iain Dunstan and George Lawson from Alipay at the launch at Alipay at Skypoint at Q1 in Surfers Paradise. Picture Glenn Hampson

Mr Thorpe said the fund will work with the IncentiaPay board to see where it can add value, including collaboration with complementary businesses where it has a stake.

“Its recent past has been troubled because they have had a few businesses coming in and out,” he said.

“Now they have got past that the future looks promising.”

He said Skybound is a fund manager that operates in a number of countries, including South Africa, the UK, Hong Kong, Bermuda and Mauritius.

IncentiaPay’s first-half results, released last week, reveal an improving situation for the company, which last year saw its share price plummet to as low as 2.6¢.

IncentiaPay said revenue rose 33 per cent to $44.2 million for the six months to December 31 while the after-tax loss was slashed by 76 per cent from $40.31 million to $9.449 million (excluding Bartercard and other discontinued operations).

The share price has since recovered from its 52-week low and was trading at 9.5¢ this afternoon, up more than three per cent.

The fall in the share price, which was 47.5c at the start of last year, has made the company vulnerable to take over.

Last month LHC Capital Partners, which was part of a group of funds, led by Moelis, that attempted a boardroom spill in 2017, sold its 10 per cent stake in the company.

Management responded by stating IncentiaPay has received “expressions of interest, including non-binding indicative proposals to recapitalise or consider change of control transactions”.

It said it has appointed Pier Capital as its financial adviser and Gilbert & Tobin as its legal adviser to assist in considering the proposals.

IncentiaPay makes the majority of its cash from Entertainment Publications between April and July.

As a result, the bulk of cash receipts come in during the second half of the year.

The company said it is focused on converting the majority of its 500,000 Entertainment memberships from the physical book to the digital version.

Currently close to half of all memberships are digital.

It lists a number of advantages from digitisation, including more flexible and targeted offerings to customers as well as a so-called “offer calendar” centred around key dates, such as Valentine’s Day and Mother’s Day.

IncentiaPay has drawn $2.7 million of its $3 million overdraft facility during the six-month period and is due to pay back $1 million of its $6.68 million debt pile by the end of this month after renegotiating terms with its lenders.

IncentiaPay accounts for the half year also show the company recorded an after-tax loss of $7.35 million after the sale of Bartercard to ex-BPS Technology CFO Tony Wiese.