By Cara Waters
Tyro is giving customers a back-up solution to ensure they are not left stranded by any future outages, as it continues to count the cost of its service shutting down at the start of the year.
The $1.5 billion payments technology company, chaired by former Telstra boss David Thodey and backed by Atlassian co-founder Mike Cannon Brookes, was hit by a service outage in January that knocked out its payment terminals.
Tyro CEO Robbie Cooke and chairman David Thodey. Credit: Alina Gozin’a
With up to 30 per cent of its customers unable to process payments for as long as three weeks, Tyro boss Robbie Cooke said on Monday that all of the company’s customers would receive a physical dongle to protect them from potential outages in the future.
“We are trying to make sure we do the right thing by people and that’s one of the core values at Tyro and I think if we handle that appropriately and correctly, it will do a lot for our reputation in the market,” Mr Cooke said.
“We stand behind the product we sold and we’ll do the right thing,” he said. “I’ve got to say [the outages] did not sit comfortably with me or the team at Tyro.”
Tyro estimated the financial impact of the outages was $3 million in direct logistics and staff costs, $1 million to replace obsolete terminals and said it faced potential merchant claims of $15 million. The company is also facing a potential class action as a result of the outages and noted its “ultimate exposure could differ”.
The financial fallout of the January outage were revealed on Monday as Tyro reported an an after-tax loss of $3.4 million in its half year, down from an $18.9 million loss at the same time last year.
Revenue for the period slipped 2.1 per cent to $107 million and analysts said they did not expect the company to post a profit until June 2022. Tyro reported total transaction value of $12.11 billion, up 9.5 per cent on the same time last year.
The fintech’s shares closed 11.8 per cent higher at $3.04, with the amount of Tyro shares held in a short position at an all-time high at 5.6 per cent of stock on issue.
“Nobody’s been really investing in us on the basis of profitability,” Mr Cooke said. “At this stage, they’re really investing entirely on the basis that we’re growing strongly at the top line, demonstrating that we’re taking market share off the four major incumbents and demonstrating that we can do that without our cost base escalating.”
He said Tyro’s results were “a great set of numbers” in a challenging environment and the fintech had reduced its losses by cutting back on marketing.
Tyro received $4.5 million in Job Keeper payments last year and Mr Cooke said the cash had been critical to company operations.
“It has enabled us as a business to keep the entire team together,” he said. ”That was the government’s desire with Job Keeper to keep people employed so we were very true to that, we didn’t let anybody go.“
Investor Steven Ng of Ophir Asset Management, said the fund manager’s position on Tyro had not changed.
“Whilst the results were important we are focused on the impact of the outage on existing and new merchants,” he said. “The main focus priority will be on the rectification, costs of the outages and re-establishing Tyro’s credibility in the market.”
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