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Cabcharge resets as Uber eats into revenue

Christian Edwards  |  30 Aug 2017Text size  Decrease  Increase  |  

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SYDNEY - [AAP] Cabcharge (ASX: CAB) has posted a $91 million full-year loss as it resets its operation in the face of growing competition from ride sharing giant Uber and rival transport payments processors.

The company's revenue for 2016/17 fell 10 per cent to $151.9 million as a drop in the number of taxi trips taken cut $9.7 million from its takings with "alternative transport providers" including Uber the biggest factor.

However, Cabcharge CEO Andrew Skelton said the company's investments in new technology and fleet upgrades, along with recent streamlining, is setting it up to "out-Uber Uber," in an increasingly competitive market.

"We believe the battleground for servicing passengers in the medium term will be the retention and growth of professional drivers, supported by well-resourced taxi operators and a high-quality fleet," Mr Skelton said.

On Tuesday, Cabcharge said it will put an additional $8 million into a marketing and technology war chest.

The company fell to a $90.6 million full-year loss after a $104 million bottom-line hit from foregone profits and impairments resulting from it selling its 49 per cent stake in bus contractor, Comfort DelGro-Cabcharge and its CityFleet Networks business.

On a continuing operations basis, Cabcharge's full-year profit was $13.7 million--up from $10.3 million for the comparable operations a year earlier.

"Cabcharge is now a reset business," Mr Skelton said.

The Cabcharge fleet, currently at 8,500 vehicles, following the acquisition of Yellow Cabs Queensland, would service Australia's demand for "affordable personal transport" as population, urbanisation and vehicle costs rise, Mr Skelton said.

During 2016/17 Cabcharge launched its own payment terminals, Spotto, for which it receives a cut of every cab fare, and Giraffe, for which it charges monthly rental.

Of the total $950 million of taxi fares processed by Cabcharge in FY17, $22.3 million was processed through the new handheld products.

Mr Skelton said moves by state governments to limit the service fee Cabcharge can levy on its users were biting into revenue--with taxi plate and taxi service fee proceeds falling as a percentage of revenue for three straight years.

Nationally--other than Queensland and Tasmania--a 5 per cent limit on payment service fees now exists, with Queensland expected to follow suit in the first half of 2018.

"We're also a payments business and that part of our business has been suffering from regulatory pressures," Mr Skelton said.

Cabcharge declared a final and interim dividend distributions of 10 cents per share fully franked.

Cabcharge shares closed up 9 cents, or 4.5 per cent, at $2.11.

NO FREE RIDE AS CABCHARGE SHAPES UP TO UBER CHALLENGE

* 2016/17 statutory net loss of $90.6m

* Revenue down 10pct to $151.9m

* Final dividend unchanged at 10 cents with a special dividend of 80 cents per share also fully franked for FY17

 

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