New terminal standard hits Cadmus

By PETER GRIFFIN

Listed Eftpos terminal maker Cadmus was denied profitability for the six months to December by a writedown of obsolete stock but expects strong sales of new terminals this year.

Cadmus lost $165,000 for the period compared with a $102,000 profit for the same period in 2002.

Revenue was $5.7 million while earnings before interest, tax, depreciation and amortisation was $1 million.

The introduction of new terminal standards known as EMV (Europay-MasterCard-Visa) forced a writedown in non-compliant rental terminals of $234,000.

The standard requires the overhaul of Eftpos and credit card terminals worldwide and the introduction of smart readers and secure pin-pads.

Managing director Ian Bailey said up to 80,000 terminals would need to be replaced in New Zealand over the next four years.

"We estimate the New Zealand total replacement market value to be approximately $150 to $200 million," he said.

Cadmus may need to write down more stock for the current half year, but it is looking to sell its existing stock to markets where the new standards do not now apply.