KYC 0.00% 57.5¢ keycorp limited

Keycorp loss $321m

  1. 51 Posts.
    I do not own kyc shares, but have followed the company for some time. May be worth a dabble, but not at its current shareprice. In a time of uncertainty revenues fell 1.8% from FY01. However announcements have been positive with contracts coming thick fast of recent times. Hold of buying and wait for positive trendline before entering. Extremely volitile stock. Not for the faint hearted!


    Keycorp loss $321m
    August 29, 2002

    LISTED smartcard company Keycorp, which today reported an annual net loss of $321.5 million, said its business has been transformed, forecasting an improved result in fiscal 2003.

    The company said it expects strongly positive earnings before interest, tax, depreciation and amortisation and net profit performances in 2003.

    The loss compared to a loss of $38.15 million in the previous corresponding period.

    Keycorp is about 51 per cent owned by Telstra Corp Ltd.

    The company said it recorded an operating earnings before interest, tax, depreciation and amortisation profit of $4.2 million, compared to a loss of $2.0 million in the prior fiscal year.

    It said it also recorded one off charges of $293.6 million.

    "While this is a large loss for the company, it is non-recurring and, more importantly the underlying operating result is positive," chief executive Bruce Thompson said.

    "Our sales performance was strong in the second half, a trend which we are confident will continue, we are on track to deliver profitability as promised in 2003," he added.

    The company reported total revenues declined 1.8 per cent to $120.6 million.

    However, Mr Thompson said revenue from products and services, which is the basis for recurring business, increased by 33 per cent over the prior fiscal year.

    He said significant items which impacted the result included:

    A $272 million write-down of intangibles following the reassessment of the associated carrying values, of which $256 million related to goodwill associated with its transaction network business and $8 million relates to Keycorp Canada goodwill and the balance to intellectual property.
    A charge of $10.7 million relating to inventory valuation, including a $6.3 million provision for inventory obsolescence.
    A charge of $9.3 million against an investment in a US card manufacturer, which was a further charge in addition to the provision of $11.1 million made at June 30, 2001.
    Mr Thompson said the operating loss also includes $25.3 million for amortisation of intangibles.
    This was an increase on the prior period due to a full 12 months amortisation of goodwill in the transaction network business.

    The company reduced borrowings in the period under review by $14 million from a total of $50 million at the end of December 2001.

    Mr Thompson said sales revenues were impacted in the first half due to some delays with product rollout in the US market.

    However, sales grew firmly in the second half and continue to grow strongly in the current year, he said.

    Mr Thompson said the company completed a significant restructure in the period which has resulted in a substantially reduced cost structure, with running costs reduced by approximately $2 million a month.

    He said three general areas were targeted: administrative overheads, overseas sales offices and research & development consolidation.

    The resulting initiatives included the consolidation of service businesses under EFTPOS engineering, and the centralisation of R&D activities in Sydney.

    They also included the closure of offices in the United Kingdom, United States, Malaysia and Hong Kong, and the restructuring of the Canadian office to a sales and distribution focus.


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