Cabcharge has cut losses and lifted first-half revenue by expanding its Australian taxi fleet and investing in marketing and technology to combat competition from global ride-sharing services.
The taxi systems operator’s revenue grew 13.8 per cent to $90 million for the six months to December 31, with a $15.5 million contribution from its July, 2017 acquisition of Yellow Cabs Queensland.
Cabcharge returned to growth in its key measure of fares processed, which increased 0.7 per cent to $515 million in the six months – the first pickup in fare turnover in two years.
The business recorded a net loss of $5.1 million courtesy of a non-cash impairment of $12.3 million related largely to the volatility of its taxi licenses, impacted by lower booking fees and payment commissions, plus a buyback scheme in Victoria that cut the value of taxi plates.
Cabcharge also increased its spending on marketing, new technology and driver recruitment.
In Sydney however, the fleet shrank by 178 cars as NSW Government reform of the taxi and ride-sharing industry has included a freeze on new taxi licences
Cabcharge Chief executive Andrew Skelton said the NSW changes impact Cabcharge’s capacity to take on ride-sharing companies such as Uber and newcomers Taxify, from Estonia, and Ola, from India.
“The lease price has gone to zero in Victoria because effectively, there is no longer a taxi license system and in NSW, it’s limited the ability of the local industry to expand and compete with the overseas players,” Mr Skelton said.
The Yellow Cabs acquisition delivered Cabcharge an extra 1,352 cars in Queensland, bringing the national fleet total to 8,729.
Following a $6.1 million lift in marketing relative to the previous year, Mr Skelton said he was confident of delivering full year growth in payment turnover and in fleet affiliation.
Cabcharge declared a four cent, fully franked, interim dividend, down from 10 cents last year.
Its shares were down 0.25 cents to $1.8125 at 1538 AEDT.
CABCHARGE REDUCES LOSS IN DECEMBER HALF
* Net loss of $5.1m vs $106.8m loss in previous corresponding half
* Revenue up 13.8pct to $90m
* Interim dividend of four cents, fully franked, down from 10 cents