SUPERB RESULTS

REG - Optimal Payments PLC - Interim Results19 Sep 2012 - 07:01

For best results when printing this announcement, please click on the link below: http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com:20120919:nRSS5828Ma RNS Number : 5828M Optimal Payments PLC 19 September 2012 Optimal Payments Plc Interim Results for the six months ended 30 June 2012 Strong first half growth, on track to exceed full year market expectations Optimal Payments Plc (LSE: OPAY) ("Optimal Payments", the "Group" or the "Company"), a leading online payments provider, today announces its results for the six months ended 30 June 2012. Highlights · EBITDA(1) up 76% to $11.2m (H1 2011: $6.4m). · Revenues up 37% to $78.9m (H1 2011: $57.4m). Fixed costs marginally down following headcount reduction in Q1. · Profit before tax $1.7m (H1 2011: loss of $4.1m). · Strong organic growth from NETBANX Straight Through Processing division ("STP"), up 68% to $61.9m (H1 2011: $36.9m) with continued strength and growth in Asia. · NETELLER Stored Value ("SV") revenues down to $16.2m (2011:$18.0m(2)) principally as a result of the fallout from Black Friday(3) in H1 2011. § Initiatives undertaken in H1 have produced improved results in second half to date. Major investment in NETELLER SV platform now complete and cost base aligned. § US online gaming opportunity taking shape. · Strong demand from existing customers and from new customers won during the first half including Ford Credit, Hockey Canada and Rona. Commercial agreement signed with Lotus F1 Team. · Strong H1 revenue exit run rate positions the Company for further growth in second half and on track to exceed the market consensus full year expectations. Financial summary (unaudited) Six months ended 30 June 2012 2011(5) US$ million US$ million Revenue Straight Through Processing (NETBANX bureau & gateway services) 61.9 36.9 Stored Value (NETELLER eWallet & Net+ cards) 16.2 18.0 Stored Value - discontinued revenues (4) - 2.1 Investment income 0.7 0.4 Total Revenue 78.9 57.4 EBITDA (1) 11.2 6.4 Profit/(loss) before tax 1.7 (4.1) Tax (charge)/recovery (6) (2012 charge relates to 2004/5 period) (2.5) 0.5 Net loss for the period (0.8) (3.6) (1) EBITDA is defined as results of operating activities before depreciation and amortisation and 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 their disclosure is relevant to explain the performance of the Group. (2) Excluding discontinued revenues - see note 4. (3) "Black Friday" refers to the regulatory action taken in April 2011 against certain major poker operators which resulted in many players ceasing to play poker worldwide. (4) Discontinued revenues were derived from e-money expiry which is now subject to different rules under the Electronic Money Regulations 2011. (5) 2011 comparables include only 5 months of revenues and costs from the OP Inc business acquired on 1 February 2011. (6) Tax charge in the period relates to expected reassessment of 2004/5 Canadian taxes following a review by the Canadian Revenue Agency which commenced in 2005. The Board has made a full provision for the amount it believes it is likely to be required to pay in respect of withholding taxes and interest. See note 17 in the Financial Statements for more detail. Commenting on today's results announcement, Joel Leonoff, President & CEO, said: The combination of NETELLER and OP Inc. has produced a multi-faceted payment product offering and positioned the emerged business Optimal Payments Plc to benefit from a rapidly evolving online payment market. Our efforts have resulted in a fully integrated and right-sized business with an efficient cost base. Our operationally geared business model, continued focus on product development and R&D, along with our strong presence in the internet payment market have combined to produce significant organic revenue and EBITDA growth. Our H1 results and strong foundation position the Company well for further growth in H2. The online payment industry continues to consolidate and the Group should benefit from the expected significant growth in both the online and mobile commerce markets. We see substantial opportunities to provide innovative solutions to merchants and consumers in both the NETELLER eWallet and NETBANX

Mid-cap share tip of the week in the Telegraph today.

Oh great - does this mean my day might have come at long last? Trust you are keeping well kim.

Sorry should have said has instead of have - A gin too many, haha!!

Fine thanks 3M, I hope you are enjoying better health?

Firm start to the week.

Broker Forecasts for OPAY.

Look rather stingy to me.


Date

Company Name

Broker

Rec.

Price

Old target price

New target price

Notes




28 Oct 13

Optimal Pay

Numis

Buy

330.13

325.00

350.00

Reiterates


16 Sep 13

Optimal Pay

Canaccord Genuity

Buy

330.13

220.00

380.00

Reiterates

Opay coming with a late run to the close.

Over 1,00,000 bought by someone!!!!!!! Was it you GF? This money am thing is doing my head in trying to register - they say it has something to do with Google Chrome!! and they are working on it.

I can't log in with Google Chrome either .

Been funny all day.

Mind its been funny for about a month now. Wish they would sort it.


GOOD DAY FOR OPAY.......................................NICE.

Whats going on here with the reported sells and buys on stockwatch?. Looks to me like some of them AT transactions are sells and not buys.

Not able to get level 2 on my lap top.

I think mam has so many problems GF i watch prices on IG Index.
Took me half hour to log in today.

yep Jimmy ive had log in probs for yonks.

Trouble is with IG they dont give you the volume though and individual trades.

Think in going to have to set up a replica watch list somewhere. Cant do with these reported trades being wrong.

Let me know where you find that as i only use these two sites ,plus have you used the Share Center ,i'm thinking of giving them a try for a few buy and sell ?

Big red day coming soon i think ,i'm waiting to pounce !

Yep a member of the share centre Jimmy. Always been a solid outfit for me.

On other point looking at LSE site, they do a stock watch.

Ill keep in touch.

Opay has run true to form again today, reasonable news and down it goes - unbelievable. Supposedly more buys than sells. Mmmm!!!!!

3 Dec Canaccord... 380.00 Buy That will cheer you up 3m. :-))

That would cheer me up dc. Thank you.

Cannacord
Estimates for the size of the New Jersey market alone range from $200m to the state's aspirational $1.2bn.

Valuation
We believe Optimal Payments continues to take market share in the rapidly growing STP and ewallet markets, supported by leading technology, tactical improvements and strong partnerships. We reiterate our multiples-derived target price of 380p.

Furthering its lead in US online gaming - Maintain BUY, target 380p
What's new?
Optimal Payments has partnered with 888.com to offer a pre-integrated payment solution for the US gaming market. The partnership covers the 888.com brand and all other licensed operators who use the 888 platform in the US. 888 currently has agreements in place with operators in Nevada, New Jersey and Delaware. The Optimal Payments solution includes payment, gateway and digital wallet services specifically designed to meet the requirements of US state gaming regulators.

Impact on the Canaccord Genuity view
We believe Optimal Payments is ahead of competitors in the US online gaming market. The company has a strong brand and was early in developing a broad range of solutions specifically for US online gaming. Optimal is investing in a broad product suite including credit card, debit card and electronic cheque processing, risk services, geo location, PCI compliance, chargeback management, reporting and other value added services that currently appears unmatched by competitors. In addition, the North American based management has strong relationships with key players in the US and has signed key partnerships, including Bally Technologies, Caesars Interactive Entertainment and 888.com, which we estimate together cover over half the licensees in Nevada and New Jersey.

We believe the US online gaming market may be another driver of long-term outperformance for Optimal Payments. We have taken a very conservative approach to the market in our forecasts. We have not built any significant impact from US online gaming until 2015. Despite Optimal's solution already being live and processing for licensed operators in the US, we believe the rate of uptake and ultimate profit potential of the opportunity is uncertain. Estimates for the size of the New Jersey market alone range from $200m to the state's aspirational $1.2bn.

Valuation
We believe Optimal Payments continues to take market share in the rapidly growing STP and ewallet markets, supported by leading technology, tactical improvements and strong partnerships. We reiterate our multiples-derived target price of 380p.

Share performance catalyst
We believe continued earnings outperformance, new US states such as California, New York and Illinois opening, and operational progress of the US online gaming market may drive shares higher.