Plexure has brought in consultants to look at ways to improve efficiency and reduce costs with a restructuring that could see the business drop its dual listing and shed some staff.
This comes as the mobile marketing and point-of-sale business reported a net loss of $8.5 million for the six months ended September, up from $4.4m in the same period last year.
The company said the greater loss was due to higher recruitment costs and an extra $2.1 million spent on the Task acquisition deal.
Plexure Group shares fell more than 10% to 46.5 cents per share on Wednesday afternoon following the result.
In September, Plexure shareholders voted in favour of a merger deal with transaction platform Task, shelling out A$90m of new Plexure shares and A$30m in cash for the acquisition.
As the deal closed after the six-month balance date, none of Task’s earnings were included in Wednesday’s half-year update which showed revenue fell 7% to $13.5m.
The result demonstrates why Plexure wants to pivot away from its core business as climbing operating costs, up $3m to $21.8m, did not result in the company winning any new customers.
“This strategy had been predicated on strong sales growth, which has not occurred,” the company said.
Taking them to Task
Meanwhile, Task has inked nine new deals in the past three months, either extending existing agreements or adding new customers.
These include global food services company Compass Group, which will use Task in the Australian market, and Sky Stadium which has contracted Task to provide its transaction platform.
Plexure is looking at how the merged group will operate in the future and has begun a two-week consultation process to restructure the business, and layoffs were possible.
Plexure’s new chief executive and former Task boss, Daniel Houden, led an operational review which found the previous Plexure strategy “has not generated material sales and is no longer relevant”.
“After a month at the helm of Plexure, I am hugely excited by the vision for the combined group. However, we need to transform our operations to create a stronger Plexure which will benefit employees, shareholders and, most importantly, customers,” he said.
“Our strategy will focus on delivering better service for our existing customers, faster returns on investment – capitalising on our joint capabilities – and profitable growth”.
The combined group will now focus on selling an integrated product, which it has successfully pitched Pita Pit, which became a Plexure customer in May.
“This contract has now been revised and extended to include the full Task technology stack, highlighting the benefits of the joint group capabilities,” the company said.
Cut costs
The Task and Plexure platform can be deployed at significantly lower cost than the original Plexure-only offering, it said.
Point of sale, kiosks, a loyalty mobile app, and online ordering are all included in the contract which has been extended from three to five years.
“Plexure will address further synergies, including platform efficiencies and overhead reductions, including a potential consolidation into a single exchange listing,” it said in a statement.
The stock is currently dual-listed on the NZX with a foreign exempt status on the ASX.
