Tyro to lean on banking arm in quest for growth

afr.com:

Tyro chief executive Jon Davey says the payment provider’s new strategy will restore market confidence in the business after a drawn-out and, ultimately, doomedprivate equity takeover fight led to a plunge in its share price earlier this year.

The strategy, which the company revealed to investors on Wednesday, hinges on Tyro’s ability to push into new segments alongside its healthcare play and grow its small banking arm to contribute 20 per cent of gross profits by 2027.

Tyro boss Jon Davey revealed his longer-term strategy for the payment services provider on Wednesday. Natalie Boog

Mr Davey said the company had already delivered on promises to introduce new products, lift its margins and cut costs. “The market, more broadly, is getting confidence that when we put a plan in place and say we are going to do something, we are going to do it,” he told The Australian Financial Review.

Tyro provides payment services and terminals to small businesses, and has a small bank that, in the year to June, represented about 4.5 per cent of its $193.2 million gross profit. It also has a health business which integrates the payment system with health insurers and healthcare software for doctors.

While Tyro posted its first profit as a listed entity in the 2023 financial year, shares have fallen 25.8 per cent, or 41¢, in the last 12 months after it had courted takeover interest from private equity group Potentia Capital and big four bank Westpac. Potentia, which is backed by ex-MYOB boss Tim Reed, was the only suitor to launch an offer, initially at $1.27 per share, but it grew up to $1.60 per share. The Tyro board had hoped for an offer nearer to $1.75.

Potentia walked away at the 11th hour, frustrating Tyro shareholders.

Tyro’s most