Shares fall in listed company P2P Transport, which owns half the taxis on the Gold Coast

THE company which controls half the taxis on the Gold Coast lost $11 million of value today. Here’s why

Taxis are no longer the only choice for customers.

SHARES in ride share and taxi fleet management company P2P Transport, which controls about half the taxis on the Gold Coast, have fallen sharply after the company warned of a drop in earnings due to higher costs and lower revenue.

P2P says earnings for 2017-18 are now expected to be between $10.1 million and $11.1 million, down from its prospectus forecast of $12.7 million.

Shares in P2P, which listed with a $1.32 issue price, were down 24 cents, or 21.8 per cent, to 86 cents at market close, wiping more than $11 million from their market capitalisation.

In December the company acquired Ashmore-based Professional Taxis Gold Coast, claiming a near-50 per cent market share of cabs in the city.

HIGHS AND LOWS OF GC LISTED COMPANIES

P2P Transport operates about half the taxis on the Gold Coast. Picture: Peter Clark

P2P said the cost of increasing its fleet beyond prospectus forecasts and weak trading conditions in May and June had forced the earnings revision. P2P listed on the ASX in December with a business aimed at capturing some of the growing ride share market dominated by the likes of Uber, as well as having a significant fleet of taxis.

The group rents cars to ride share service drivers and owns a fleet of taxis, with operations across most states of Australia and a current fleet of 1134 vehicles.

About 20 of those are regular hire cars and about another 20 are hired to ride sharing contractors such as Uber.

The rest are leased as taxis.

Managing director Tom Varga said the rapid expansion of P2P since listing, which has included the acquisition of WA and Queensland-focused Black and White Cabs, had changed the company’s situation.

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The taxi industry has had to adapt to major changes in recent years.

It will also begin to collect revenue towards the end of the from installing digital advertising signs on the roof of taxis.

Mr Varga said it was difficult to compare results to the prospectus forecast because of the acquisitions combined with worse than expected results in May and June.

“While we’re looking at loss (today), the single largest development in our organisation, the Black and White cabs and now the fully funded digital tops, are absolutely pivotal for our future,” Mr Varga told AAP.

He said these developments have contributed to the forecast earnings for 2019 to be between $16.1 million and $16.8 million.

— with AAP