DUBLIN TECH FIRM Zamano has announced it is to wind down its “existing business lines” to protect its cash pile.
The company, which makes SMS marketing and mobile payments software, is listed on the London Stock Exchange and the junior stock exchange in Dublin.
In a trading update, Zamano said new mobile payment regulations in the UK as part of the ‘Payforit’ initiative were ”having an ongoing and significant impact on the company’s business performance”.
Payforit is a payment method developed by mobile network operators in the UK that allows customers to buy online digital content likes apps and enter competitions.
Changes to the scheme meant Zamano was no longer able to avail of previous exemptions with regard to its UK revenues.
Similar changes are expected to be introduced in Ireland later this month. The company said when new rules are implemented here, they will also “significantly impact the company’s ability to acquire new customers in Ireland”.
As a result, Zamano said it would “formally wind down the existing business lines in order to protect the cash position on the balance sheet”.
This does not mean the company has shut up shop. Instead, it is looking at different ways to use its cash pile.
Last year, the company tried to reduce cost by making seven of its 18 staff redundant. It also ceased mergers and acquisitions activity.
Despite those cost-cutting measures, the company said “it is now increasingly likely that the impact of regulatory changes across Zamano’s business lines will prevent the company from maintaining a cashflow positive trading position going forward”.
Commenting on today’s announcement, Zamano’s acting chairman Colin Tucker said: “The Zamano board is focused on conserving the company’s strong cash position by optimising our withdrawal from our existing business lines.
“The ongoing regulatory changes in our industry have forced our hand earlier than anticipated.”