Baycorp planning A$90 million payout

New Zealand and Australian credit checking company Baycorp Advantage is planning to return share capital of about A$79 million ($97 million) to shareholders.

The plan was outlined at an extraordinary general meeting of the company in Sydney yesterday, where shareholders also approved the A$97 million sale of the company's debt collection business.

The planned A35c a share return requires various approvals including one from shareholders and another from the Australian Taxation Office.

Baycorp is also to restart an on-market share buyback of company shares, up to a value of about A$11 million.

Company chairman Glenn Barnes told the meeting the company would continue to have the appropriate flexibility to be able to press ahead with growth and development after the total A$90 million return to shareholders.

The initiatives followed a share capital return of A50c a share in the current financial year.

Previously Baycorp announced plans to buy back up to 5 per cent of the company's issued share capital, and so far has managed to get about 1.5 per cent for A$10.8 million.

Managing director Andrew Want said that of the A$35 million targeted for the share buyback, A$24 million remained to be spent.

In recent weeks the company had to cease the buyback after the announcement of the collections business sale and the intention to carry out further capital management initiatives.

The capital management initiatives announced yesterday would essentially return to shareholders the net cash proceeds from the sale of the collections business, along with the spending of the further A$11 million on the buyback, Mr Want said.

The collections business sale produced a net profit on book value of around A$15 million, while cash proceeds after tax and costs were estimated to be about A$80 million.

Comparing company performance to a target's statement issued 10 months ago at the time of an attempted takeover, he said Baycorp was on track to achieve all its key strategic initiatives.

Management expected revenues for the year to June 30 to be around A$200 million, compared to a figure of A$205 million in the target's statement.

Earnings before interest and tax were now expected to be around A$58 million, compared to A$58.6 million in the target's statement.

Profit after tax, and after adjustment for the impact of the additional interest of the capital management initiatives, was expected to be in line with or slightly above the target's statement forecast of A$40 million.

- NZPA