RNS Number : 8101L
24 July 2017
("Earthport" or the "Company")
Unaudited Trading Update for the year ended 30 June 2017
Earthport (AIM: EPO.L), the leading payment network for cross-border payments, is pleased to provide an unaudited trading update for the fiscal year ended 30 June 2017 ("FY 2017").
-- Revenues grew by approximately 33% to GBP30.3 million (FY 2016: GBP22.8 million)
o Approximately 90% of the revenue growth was driven by the existing client base
o Transactional revenues comprised 95% of FY 2017 total revenues
-- Adjusted gross profit(1) increased by approximately 30% to GBP20.7 million (FY 2016: GBP15.9 million)
-- Adjusted gross margin(1) decreased by approximately 2% to 68% (FY 2016: 70%)
-- Administrative expenses decreased approximately to GBP25.5 million (FY 2016: GBP25.8 million), representing 84% of revenues (FY 2016: 113%)
-- Adjusted EBITDA(2) loss decreased by approximately 65% to GBP2.4 million (FY 2016: GBP6.9 million)
-- Cash Balance at 30 June 2017 amounted to GBP11.9 million, compared to GBP14.4 million at 30 June 2016
Operational & Transactional Highlights
-- Monetary value of transactions processed increased by 48% to $17.5 billion(3) (FY 2016: $11.8 billion)
-- Record number of transactions at approximately 11 million, up 67% (FY 2016: 6.6 million)
o Earthport's payments processing platform continues to perform at a 99.9% "up-time" rate, ensuring virtually uninterrupted service for our clients
-- A total of 143 new opportunities, inclusive of existing and new clients, are currently in the commercial pipeline
-- Total of 10+ new countries in our Network pipeline
-- Executed payments across 193 destination countries, in 49 currencies
-- Average revenue per transaction of GBP2.64 (FY 2016: GBP3.12)
1. Adjusted gross profit and margin figures are before warrant charge, share based payment charge, unrealised fair value adjustment and exceptional items
2. Adjusted EBITDA is before warrant charge, share based payment charge, unrealised fair value adjustment and exceptional items
3. Figure shown in US dollars to conform with market practice
The performance of the business in FY 2017 has been encouraging with a substantial increase in the number of transactions and payment volumes resulting in revenues of GBP30.3 million. We continue to invest in the Company's operational platform to ensure scalability and resilience, as well as expanding our geographical presence and product capabilities. Our ongoing cost efficiency objectives have resulted in a small decrease in administrative expenses. When combined with growing revenues, the adjusted EBITDA(2) loss has decreased by 65% to GBP2.4 million in FY 2017. Excluding our expenditures and investments to support strategic growth during the year, Earthport's existing business continues to generate an operating margin of approximately 25%.
Key investments in the period included the launching of the India strategy, building on the Reserve Bank of India approval, allowing Earthport to work with all Indian banks for outbound payments. This is a significant opportunity to serve the extensive Indian market. In addition, we have expanded our focus on serving the eCommerce sector in the US where the early indicators are positive. Our Network is a unique asset and we have added to it by forming a new partnership with Asian United Bank (AUB) in the Philippines, as well as launching a new route to Bangladesh, while strengthening our existing Network presence with a number of operational improvements. We currently have more than ten new countries in our Network pipeline and expect to cover most of Africa during the next 12 months.
On the commercial side of the business, a total of 143 new opportunities are currently in the pipeline across Europe, the Americas, Middle East and APAC. Our client mix continues to evolve in line with our long-term strategy of establishing our presence in the industries we serve, with banks driving the majority of the contracted new opportunities. In addition, we have broadened our strategic relationship with Bank of America Merrill Lynch (BofAML) by expanding the service which adds numerous new countries and currencies to the bank's online and file based banking portal, CashPro(R).
As previously communicated, Earthport was not cash flow breakeven in FY 2017, principally to capitalise on the growth opportunities related to new customer acquisition, product and delivery enhancements presented during the year. Given the current business and operational trajectory, we are pleased that FY 2017 transactional performance, revenues, and year-end cash balance were in-line with market expectations. This positive momentum, coupled with our unique market positioning, gives us confidence in our continued growth and prospects.
For further information, please contact:
Hank Uberoi, Chief Executive Officer
Simon Adamiyatt, Chief Financial
Officer 020 7220 9700
Bob Huxford / James Ash / James Browne 020 7653 9848
N+1 Singer (Nomad and Joint Broker)
Mark Taylor / James White 020 7496 3000
Shore Capital (Joint Broker)
Bidhi Bhoma/ Toby Gibbs 020 7408 4090
Earthport provides cross-border payment services to banks and businesses. Through a single relationship with Earthport, clients can seamlessly manage payments to almost any bank account in the world, reducing costs and complexity to meet their customers' evolving expectations of price, speed and transparency.
Earthport offers clients access to global payment capability in 190+ countries and territories, with local ACH options in 60+ countries and an evolving suite of currencies and settlement options.
Earthport continues to invest in the establishment of in-country bank partnerships across the world, bringing together its deep market and regulatory expertise in order to maintain compliant and commercially competitive services.
The result - a global payments Network accessed via a single relationship, delivering significant cost and operating efficiencies for banks and businesses servicing high volumes of lower value payments.
Headquartered in London with regional offices in New York, Dubai, Miami and Singapore, Earthport is a public company, traded on the London Stock Exchange (AIM: EPO) with an institutional investor base including World Bank IFC, Oppenheimer, Blackrock, Henderson.
Please visit www.earthport.com for more information.
This information is provided by RNS
The company news service from the London Stock Exchange
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July 24, 2017 02:00 ET (06:00 GMT)