Author: Mark Fletcher

It is good to see Mark Hawthorne continue coverage of the Bill Express saga in the Full Disclosure column in The Age today. There is plenty more yet to surface on the Bill Express story. I would like to see some digging into the companies associated with Bill Express / OnQ. Here is what I wrote last month about one such company, Loyalty Direct:

I have been told that a company called Loyalty Direct Pty Ltd terminated the services of 35 employees on Friday of last week without redundancy or accrued benefits paid. I have also been told that another group of Loyalty Direct employees were terminated and immediately offered contracts with a business called Payroll Express which provides the same services as Loyalty Direct.

Loyalty Direct is registered at the Eaglemont address of Bill Express’ Head Office. An ASIC search shows that Loyalty Direct is under “external administration and/or controller appointed. My understanding is that Loyalty Direct is a private company delivering some services to On Q and or Bill Express. I am not able to verify the location and ownership of Payroll Express.

I note the irony of the Loyalty Direct name.

Since writing this I’ve been told that Payroll Express is not the name of the phoenix company, it is Express Payroll Solutions Pty Ltd (ABN 12 113 484 432). The terminated employees have not, as I understand it, been paid their entitlements.

The ANZ has more at stake than the Bill Express indebtedness. It has merchant terminals across the Bill Express retail network. These generate excellent fees for the bank on every transaction processed. I’d expect that this is a key consideration in its efforts to find a resolution to the Bill Express mess.

For information on Bill Express’ UAE connections, check out the iPay website.  Navigate to strategic partners and read about Bill Express:

Through our Bill EXPRESS® and DialTime® operation, the company owns and operates one of Australia’s largest electronic retail distribution networks.

Over the past 6 years Bill Express has established a robust and proven electronic network of nearly 14,000 terminals throughout Australia generating a revenue exceeding $1 billion.

I am not sure that newsagents would say the Bill Express network is robust, certainly not since late last year.

The iPay website also lists the troubled OnQ as a strategic partner.   OnQ is a substantial shareholder in Bill Express and the holder of the “technology” on which Bill Express is based.

Click here to read the press release announcing the iPay joint venture developed out of Vodatel.

My speculation is that parties associated with iPay are the parties who acquired shares in Bill Express within the last year.  If the reports of Bill Express CEO Ian Christiansen traveling to the UAE are accurate, I would expect him to be seeking more funds from his shareholders there.

The Sydney Morning Herald has a good report on the Bill Express situation this morning. The Age has a smaller report. The reports miss these details:

• Bill Express unilaterally changed contract terms for its 3,500 small business newsagents, resulting in most facing an additional $495 (+GST) a month in costs to offer the service.
• At least one company housing staff which provide IT services to Bill Express has gone into liquidation and another started in its place with less then half the staff. It has been reported that the staff not taken up by the phoenix business were not paid redundancy payments.
• Newsagents have commenced class action against the company having notified them ten days ago that they are to be a respondent in a planned Federal Court action.
• The Bill Express liability to newsagents is growing at the rate of more than $1 million a month.
• The mobile phone recharge component of the Bill Express network is a day to day proposition with out of socks occurring every couple of days either network-wide or significant pockets.
• The data room referred to in both reports was established by the business seven weeks ago.
• The ANZ, somewhat cynically I suggest, doubled its eftpos break fees shortly after Bill Express got into trouble -my speculation is that they wanted to stop newsagents migrating to other eftpos providers.
• I estimate that one third of Bill Express phone recharge revenue has moved elsewhere – ePay, Comm Bank Xpos, Suncorp, St George and our own eziPass.
• The national newsagent association, the ANF, stood by and let Bill Express get to this point because it contracted away its rights to act as an association for its members in return for around $200,000 a year in fees from Bill Express.
• Bill Express did a deal with Swish group over the advertising screens in newsagencies – after it took away from newsagents the”guaranteed” funding which underscored the economic value of the screens to newsagents.

Now that the Bill Express story has hit mainstream media I expect to see quick action around the future of the business.

I have created a new Bill Express category on the blog to make it easier for people wanting to access all posts about this topic.

I bet newsagents have not heard of the Swish group.  This public company, SWG on the ASX, claims newsagencies as part of their retail signage network – see their May 2008 shareholder update.  Bill Express announced an agreement with Swish on April 28, giving Swish control of the advertising screens in newsagencies.  In February, Bill Express removed the $210 a month rebate which it had reviously guaranteed to pay newsagents in return for having the screen in their stores.

I wonder if Swish needs to make an announcement to the ASX about the Bill Express situation. I hear that many screens in newsagencies do not work and that where they do, many newsagents have them turned off because of their issues with Bill Express.   I do not plan to turn my screens on until Bill Express addresses my concerns over their breach of agreement relating to the “guaranteed” $210 a month they would pay per store.  Not that it matters in one of my newsagencies as the screen has not worked for months.