Half Year Results for the six months ended 30 June 2015
Strong performance in first half, post period end completion of Skrill acquisition
LONDON, MONTREAL and NEW YORK (26 August, 2015) - Optimal Payments Plc (LSE AIM: OPAY, "Optimal Payments", the “Group” or the "Company") today announces its results for the six months ended 30 June 2015. Note the performance for the period does not include any contribution from Skrill, which completed after the period end.
Highlights Strong performance in line with expectations:
- Revenues up 40.2% to $223.0m (H1 2014: $159.1m)
- Adjusted EBITDA(1) up 27.9% to $49.9m (H1 2014: $39.0m)
- Adjusted profit after tax increased by 18.7% to $37.3m (H1 2014: $31.4m); statutory profit after tax reported at $2.4m (H1 2014: $27.5m).
- Adjusted diluted EPS(2) increased 11.4% to $0.12 (H1 2014: $0.11); statutory fully diluted EPS at $0.01 (H1 2014: $0.10)
- NETELLER Stored Value (“SV”) business: revenues up 20.1% to $49.8m (H1 2014: $41.4m) in spite of the weakness of the Euro against the USD.
- NETBANX Straight Through Processing (“STP”) business: revenues up 47.4% to $173.0m (H1 2014: $117.4m), incorporating revenue from the acquired US businesses.
- Group cash and cash equivalents of $113.3m (31 December 2014: $109.9m) – excludes cash raised on rights issues of $685.3m:
- Reporting of cash and cash equivalents restated to exclude settlement assets and restricted cash (held for NETELLER members and merchants) and cash held as reserves(3) to provide a more transparent analysis of the Group’s cash position
- Free cash flow(4) of $29.9m (H1 2014: $10.9m).
- Significant progress on key strategic initiatives:
- The acquisition of Skrill, announced on 23 March 2015 and completed 10 August 2015, positions the Group as a market leader in the fast growing and profitable stored value, payment processing and prepaid sectors with the ability to process over 100 payment types in more than 20 languages and over 40 currencies. The enlarged Group will have an increased customer and geographic diversification with further upside potential from cross selling opportunities. The integration of Skrill and subsequent delivery of synergy benefits is proceeding in accordance with our plans.
- Successful integration of US businesses Meritus and GMA (acquired H2 2014) into NETBANX STP division – with both businesses trading strongly.
- Acquisition of FANS Entertainment (‘FANS’), a mobile platform developer based in Montreal, to offer an application with analytics for merchants to engage more directly with their customers.
- During H1 2015, as a result of these initiatives, we have incurred restructuring costs of $4.1m and acquisition costs of $12.4m.
- Good progress made in acquiring and card issuing services divisions and NETELLERGO! (for ecommerce merchants outside of gaming) contributing to further growth and diversification of the business.
Main market listing
As previously announced and, having completed the acquisition of Skrill, the Group will be seeking the admission of its ordinary shares to listing on the premium segment of the Official List of the UK Listing Authority and admission to trading on the London Stock Exchange’s Main Market for listed securities. It is expected that the Company’s ordinary shares would then be eligible for inclusion in the FTSE 250 Index of the London Stock Exchange.
Capital Markets Day
The Group intends to host a Capital Markets Day during Q4 for investors, analysts and lenders. At the event, management will set out its strategy for the combined businesses of Optimal Payments and Skrill and report on integration progress. This event will take place on 10 November 2015 in London and will be accompanied by a trading update.
Commenting on today’s results, Joel Leonoff, President & CEO, said:
“Our first half results show continued strong performance with growth in NETELLER and NETBANX including a significant contribution from the integration of Meritus & GMA, the US centric businesses we acquired last year. This was achieved in the period in which we also completed the negotiations to acquire Skrill, a transformational transaction for us and for our shareholders and one which positions us as a key player in the global payments industry. I would like to thank the team for their hard work and commitment in delivering impressive results and positioning the company for future growth.”
“Current trading continues to be strong and we believe that the consolidated business places us in a much stronger position in the payments landscape and are eagerly looking forward to our future as a combined entity.”
(1) Adjusted EBITDA is defined as results of operating activities before depreciation and amortisation and adjusted for exceptional non-recurring items which are defined as items of income and expense of such size, nature or incidence that, in the view of management, should be disclosed to explain the performance of the Group.
(2) Adjusted diluted EPS is computed using the share count excluding the impact of the rights issue (completed in May 2015) since reported figures do not include earnings from the acquisition of Skrill which completed on 10 August 2015.
(3) Restricted NETELLER merchant and member cash balances are the excess of funds held that the Group is required to maintain in respect of the e-money issued to members and merchants over balances payable which are held in segregated accounts; cash held as reserves represents the cash the Group is required to deposit with counterparties, which would include acquiring partners and card schemes, in order to transact with these institutions; settlement assets represent gross transaction cash at acquirers and processors which will be remitted to the Group.
(4) Free cash flow (non IFRS) is shown as cash flows from operating activities (after working capital movements), after cash flows used for interest and capital expenditures.
Presentation to analysts and investors
Optimal Payments will hold a conference call for analysts and investors at 9am (UK time) today, access details as below.
UK Toll Number: 02031394830 UK Toll-Free Number: 08082370030
US Toll Number: +1 718 873 9077
Pin code: 61164043#
The presentation slides will be available on the Optimal Payments Group’s website at: http://www.optimalpayments.com/investors#c372
About Optimal Payments Plc
Optimal Payments is a global provider of online payment solutions, trusted by businesses and consumers in over 200 countries and territories to move and manage billions of dollars each year. Merchants use the NETBANX® platform and services to simplify how they accept credit and debit card, direct-from-bank, and alternative and local payments; and the NETELLER® service to increase revenues and capture new customers. Consumers use the multilingual and multicurrency NETELLER and Net+® Card stored-value offering to make secure and convenient payments. Optimal Payments completed the acquisition of Skrill Group in August 2015, a leading digital payments business providing digital wallet solutions and online payment processing capabilities in addition to providing pre-paid online vouchers in Europe with its paysafecard and Ukash brands. Optimal Payments Plc is quoted on the London Stock Exchange’s AIM, with a ticker symbol of OPAY. Subsidiary company Optimal Payments Ltd is authorised and regulated as an e-money issuer by the UK’s Financial Conduct Authority (FRN: 900015).
For more information on Optimal Payments visit www.optimalpayments.com or subscribe at http://www.optimalpayments.com/subscription
For further information contact:
Head of Investor Relations
Optimal Payments Plc
+ 44 207 182 1707
Canaccord Genuity Limited (Nominated Adviser & Broker)
Simon Bridges / Mark Whitmore
Tel: +44 (0) 20 7523 8000
Media Contacts – United Kingdom:
Simon Hudson/Andrew Dunn/Simon Fluendy
+44 20 7920 3150