Changes are happening - please bear with us while we update our site.

Changes are happening - please bear with us while we update our site. Click here to give us your advice and feedback.

Tyro (ASX:TYR) share price suffers a sudden 15% fall

Tyro (ASX: TYR) held its annual general meeting and experienced a seismic shock to its share price towards the end. What happened to the Tyro share price?

Tyro Payments Ltd (ASX: TYR) held its annual general meeting and experienced a seismic shock to its share price towards the end. What happened to the Tyro share price?

TYR share price

Source: Rask Media TYR 6-month share price chart

What happened?

As management went through the usual motions of providing an update on the FY21 results, it seemed like a stock standard annual meeting.

Management also went through a trading update since then, showing strong growth in transaction volume driven by the removal of lockdown restrictions in NSW and VIC.

You can see the ramp up in transaction volume below.

Source: TYR AGM presentation

Transaction value essentially increased by 46% in the two weeks since NSW came out of lockdown.

The banking business also performed well with loan originations to 31 October 2021 at $20.6 million, representing a 1447% increase compared to the prior corresponding period (PCP). It should be noted this is off a low base.

Overall, group profit came in 14% higher at $38.5 million as of 31 October 2021.

After the usual presentation of the results, there were no questions raised from members at the meeting.

The sell-off

Despite there being no concerns or issues raised at the meeting, there was a sudden large sell-off.

Management discussed the situation amongst themselves on the call and appeared confused.

As a result, management released an announcement after hours. Tyro advised investors that gross profit has been reduced by the Bendigo Bank Alliance revenue share agreement.

This explains why there was a variance between the transaction value growth rate of 25% and the gross profit growth rate of 14%.

Management also noted reported gross profit will be $41.2 million, equating to a 22% increase in PCP profit of $33.8 million.

My take

It seems a sizeable group of investors may have overreacted to the impact of the Bendigo Bank revenue share arrangement.

I think it’s important to consider the long term opportunities that this agreement could provide rather than focus on the immediate impact.

One potential positive impact is Bendigo Bank’s potential to provide a deeper pool of merchants.

Another one would be the potential stickiness by locking down merchants through business banking.

On the flip side, I will be constantly asking myself, “Who has more bargaining power, Tyro or Bendigo Bank?”.

If you’re looking to learn how to do your own ASX company valuations, take our free share valuation course, which takes you through 6 common share valuation techniques, step by step.

Or try our Beginner Shares Course if you’re just starting out. Both are free.

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

At the time of publishing, the author of this article does not have a financial or commercial interest in any of the companies mentioned.
Skip to content