If its BNPL decline was not enough to usher IOUPay (ASX: IOU) in a different direction, its growing expenses into pushing buy-now-pay-later to no avail should.
The Malaysian-based digital payments company lost share value and shareholder favor as the company experienced turmoil and witnessed resignations at the top. Its share price subsequently fell by 22.5% as the severe cash flow problems were announced to the market. And to address that, instead of departing from the BNPL bust, it is restructuring its board and laying off staff.
Overall, as part of the restructuring, IOUPay has is considering removing five directors from the company, including Dato’ Wan Asmadi Wan Ahmad, Lee Chin Wee, Dato Khairul Idham Bin Ismail, Paul William Russell, and Mr Chong Kwong Yang. A senior executive from a competitor firm in Malaysia will also be joining the firm. The company says it will ensure that control of the company does not pass unless all legal requirements are met, and an appropriate control premium is paid if a controlling shareholding is involved.
Ahmad resigned citing other business commitments, with Isaac Chong Kwong Yang replacing him. And Russell stepped down citing family commitments, with Ben Reichel taking over as the new Company Secretary responsible for managing investor relations.
IOUPay has also reviewed its staffing levels, other resources, and costs across the group due to market conditions in Malaysia. The release of several products has been delayed, mainly due to external factors such as the change of government in Malaysia following the general election on 19 November 2022, and the resulting delays to regulatory approvals.
The Company’s income margin amounted to 5.8%, falling from 6.6% in December when its BNPL arm started suffering a massive decline. The total transaction value between January 1 and February 15, 2023, was $7.5 million. However, the company also reported Non-Performing Loans (“NPL”) of $491,971 and an NPL Ratio of 1.32% as of February 15, 2023, representing an increase from the previous period’s NPL Ratio of 0.99%.
The Company is undertaking cost-cutting, which has led to the delay in the release of several products, because of a change of government and regulatory approvals.
It has reflected this process of maximizing efficiencies in its cash flow statements, with a significant reduction in net cash used for operating activities in the December quarter to $0.832 million compared to the September quarter cash usage of $1.708 million. The Company’s half-year results released on February 28, 2023, showed the net loss improve by 64% due primarily to tighter cost management.
However, it is still spending on celebrity endorsements and partnerships to keep its venture going. Shareholders are concerned by these developments and it has raised questions about IOUPay’s future—and whether it has one at all.
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2 Comments
Promotions1
Your reporting is so wrong I don’t know how you are allowed to submit what you wrote. You have misinformation all through the article, but the most damning is your claim of the below
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Overall, as part of the restructuring, IOUPay has removed five directors from the company, including Dato’ Wan Asmadi Wan Ahmad, Lee Chin Wee, Dato Khairul Idham Bin Ismail, Paul William Russell, and Mr Chong Kwong Yang. A senior executive from a competitor firm in Malaysia will also be joining the firm.
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This is a complete fabrication and shame on you for claiming this as fact. None of what you write about above has happened. There has been no board change – the meeting for the proposed change has not even been set, yet here you are claiming it’s already done and all of the above Board members have been removed. For a business reporter you are not a good one, nor does it seem you do much fact checking before writing.
Promotions1
I can see since my first comment you have now changed it to say "is considering removing" instead of what you stated previously of "has removed".
I still have major issues with this section of your report. You are stating IOUpay is considering removing the directors. It is NOT IOUPay that is considering it. It is a proposal brought on by a consortium that has just over a 5% holding that they have acquired recently. They are the ones pushing for a change of the Board of Directors, not IOUPay.
You certainly like to misdirect in the article you wrote. I guess facts don’t matter to you or The Sentiment.
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