OneVue posts $27 million loss as Sargon debt bites
Superannuation platform provider OneVue has been forced to write down the value of debts owed to it by troubled fintech Sargon Capital by $26 million to $3.9 million, with the company posting an after tax loss of $27.1 million for the first half of 2020.
OneVue chief executive Connie McKeage said on an investor call the past 15 months of chasing Sargon for an outstanding deferred payment worth $31 million was "the most challenging period we have experienced to date" as a company and thanked industry peers and competitors for contacting her directly to offer support during the period.
OneVue chief executive Connie McKeage said it had been a trying year for the company. Credit:Sasha Woolley
"It is appreciated," she said.
OneVue is a superannuation and funds management administration business which sold its Diversa Trustee services brand to cloud trustee fintech Sargon Capital last year.
Sargon Capital has faced unknowns in 2020 after receivers at McGrathNicol appointed to its overall holding company in January and voluntary administrators at Ernst and Young were then called in to other non-operating entities.
OneVue was still owed $31 million from Sargon and called in its own receivers at PwC, who took control over shares in Sequoia Financial and the Madison Financial services business.
Receivers have since sold the Sequoia shares for $4.4 million, which is now in OneVue's bank account.
On Wednesday, OneVue updated investors that while it was still exercising its legal rights to uncover the full debt, it had written down the recoverable value to $3.8 million, and written down the $26 million difference.
That fact weighed on its balance sheet for the half, with the company posting an after-tax loss of $27 million, compared with a $3.2 million loss last year.
The business said despite the tough conditions, the business had increased its earning margins and the rest of operations were showing strong growth potential.
OneVue's revenue for the half dropped 1 per cent to $24.3 million, which was due largely to lower interest rates, management said.
Earnings before interest, tax, depreciation and amortisation were up 48 per cent to $3.4 million.
Sargon Capital was contacted for comment both directly and through administrators at EY.
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