Electronic payments group Alphyra has reported strong results for 2002. Management, which is looking to buy the company, received more good news when potential suitor Euronet dropped out of the race by buying a British rival.
Operating losses at Alphyra fell dramatically to just under €32,000 on sales of €48.7 million. On a EBITDA basis (earnings before interest, tax, depreciation and amortisation of goodwill), the company saw profits grow strongly to €7.3 million.
The results were marginally ahead of forecasts and company chairman Mr Jack McDonnell characterised 2002 as one of "steady progress" for the company.
The company performed strongest in its traditional markets of Ireland and Britain but did manage to record a maiden profit in its European operations, which have been slow to deliver.
Meanwhile, Euronet, a US electronic payments company, which had been tipped as a bidder for Alphyra announced yesterday that it had bought British rival E-Pay for $76.2 million.
Last week, the company issued a statement saying that, while it had held talks with Alphyra over the summer, it was not engaged in takeover talks at the moment.
At that time, it left open the prospect of a bid for the Irish group "under the right circumstances". However, analysts yesterday said the E-Pay deal looked to have stretched the resources of Euronet, which has a market capitalisation of about $180 million, making an Alphyra deal unlikely.
Alphyra's management is struggling to persuade shareholders to accept an offer of €2.70 per share as they bid to take the group private.
Analysts were divided on whether the figures would improve the chances for the MBO bid by the management's Rendina vehicle. Davy analyst Mr Barry Dixon said that based on the figures, the MBO offer price seemed to be a fair valuation. NCB's Ms Tricia McEvoy said the 2002 performance showed Alphyra had the potential to generate profits in the future as it introduces its network around Europe.
The company faces another closing date next Wednesday but has made little progress in attracting shareholder support since raising its offer from its initial €2.45.
People familiar with the process said the ending of uncertainty over the Takeover Panel ruling and the removal of Euronet from the scene would be positive for the MBO team. However, with the 10 largest shareholders together only owning around 20 per cent of the company, there is concern at the apathy of large numbers of smaller shareholders whose support will determine if the deal goes through.
Rendina has said there is no more money available to fund a higher offer for the group which attracted an indicative bid of €2.80 from US-based First Data Corp before it walked away from the process.
