Provenco-Cadmus merger facing tough times

Newly-merged eftpos provider predicts loss for this year

The recently-merged entity of eftpos providers Provenco and Cadmus is being affected by the harsh economic climate, the merged entity says.

In a statement on the NZX today, ProvencoCadmus predicts a loss for the current financial year ending June 30 of around $10 million, due to “unfavourable trading conditions across all parts of the group”.

The company says this confirms predictions of a loss made at a merger shareholder meetings earlier this year.

However, a return to profit is predicted for the December 2008 quarter and the next financial year.

According to the statement, “with the realignment of the business well advanced and a return to profitability budgeted, the directors are now contemplating a range of funding options.

“A capital raising during the first quarter of the 2009 financial year has previously been advised, although other funding options, including sales of some non-core assets, are also being contemplated.”

Provenco and Cadmus first announced their intention to merge in October. A vote was subsequently put to shareholders and the merger became official on May 8.

The merged entity is headed by former Navman CEO Jim Doyle.

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