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

Worth reading even more time to re-enter????

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10853096/Optimal-Payments-to-borrow-for-120m-deal.html

Sounds promising gf. I will hold for now.

Much more potential imo here. Gambling + online payments.

Still have a few of these tucked away in the bottom drawer.

Starting to recover again.

Read all the company financial report again and again and even without the Yanks online gaming their is substantial value here I feel.

Ive been debating this on twitter this morning.

Seems to be still a few wary types about.

Ill prove them wrong.

I am still holding - there is I still think a lot going for these gf. I agree they don't need the Yanks. Have a look at the corporate governance and go into media and see what is going on!!!!

Won't be too long before we will head higher and retest the highs imo. Great potential.

Breaking £4 soon and resumption of uptrend imo.

Every time it gets there it drops so hopefully it will continue to
be on an uptrend.

Canaccord buy rec today tp 575p, on the back of Berenberg on Friday tp 520p. Breaking the 400p again.

Good - let it happen.

On today's acquisition, Canaccord reiterates buy tp 575p.

Chartwise nothing to stop us heading back to to £5 with maybe a bit of resistance around 450p.

Great.

Listen: Optimal Payments - Acquisitions to accelerate expansion in US payments market

Click here

Think the needle has stuck on this one for all the sells showing, 1500 at the same time - not possible - money am needs to sort it out I feel.

Full list coming?

Questor, Daily Telegraph, buy.

Numis just out with a buy rating, tp 700p.

Clearly the two US acquisitions gets OPAY into this large market but de-risks away from gambling into mainstream payments.

Long inverted head and shoulders since March high forming. With such positive newsflow unlikely to be long before we retest 500p and break higher.

Questor share tip: Optimal Payments shares jump on acquisitions

Aim-listed online payment processor sees shares jump more than 6pc on two deals worth over $225m, says Questor








By John Ficenec, Questor editor

6:00AM BST 02 Jul 2014



Optimal Payments
425½p+25½
Questor says BUY


OPTIMAL Payments yesterday agreed two acquisitions that will accelerate the company’s rapid growth profile. The announcement sent shares in the Aim-listed technology company up by more than 6pc.


The first deal will see Optimal Payments pay $210m (£123m) for Meritus Payment Solutions. Meritus currently handles online payments for more than 8,000 small and medium businesses in the US which generated pre-tax profits of $1.1m on revenue of $74.4m in the year ended December 2013.


Joel Leonoff, Optimal Payments chief executive, said: “Meritus is a great stepping stone into the largest e-commerce market in the world.”


Mr Leonoff explained that, when considering the price paid for Meritus, investors should focus on the $13m in earnings before interest, tax, depreciation and amortisation (Ebitda), rather than the profit figure. He added that because Meritus was a private company the majority of profits were paid out in cash bonuses which greatly distort the reported profit figure.




The other reason that Optimal paid 16.1 times adjusted earnings for Meritus, a company that only started in 2008, is because of its rapid growth profile. The company more than doubled its earnings while revenue increased by 94pc last year as online shopping replaced the high street. The deal is expected to complete during the third quarter of this year.

The acquisition will be funded with a $150m cash payment and the issue of Optimal Payments shares worth $60m. Around 9m shares will be issued at a price of £3.93 in four equal tranches. The first issuance of about 2.25m shares will take place a year after the deal closes.

The majority of the cash will come from a $100m loan that has been agreed with the Bank of Montreal which is repayable over a three-year period. Mr Leonoff was confident that debt levels would fall sharply following the completion of the deal as the company generated free cash flow of $81m last year.

A smaller deal worth $15m for online payment company Global Merchant Advisors (GMA) was announced alongside the much larger acquisition. GMA generated revenues of $8.3m and adjusted ebitda of $4.6m in the year ended December 2013.

The two deals combined will increase Optimal Payments’ handling of merchant transaction and reduce the company’s reliance on online gambling. The majority of the company’s Ebitda in the past year comes from the NETELLER online gambling product. Players deposit money into an online account on gambling websites through an Optimal Payments product called NETELLER before they can play and the company earns fees on every transaction.

House broker Canaccord Genuity said the acquisition was “highly beneficial” as it diversified Optimal’s revenue away from gaming, its largest client and into native US Merchants.

Questor also likes the more balanced revenue. An over-reliance on US gambling when new legislation made it illegal in 2006 caused the share price to crash. If this deal completes then Mr Leonoff believes he can achieve more than $400m in revenue and $100m in Ebitda within the next 18 months. Canaccord Genuity estimates Ebitda of $101m and adjusted earnings per share of 41c (24p) by December 2015.

There is plenty of risk here from the transaction, exposure to small and medium US traders and US gambling legislation. However, there is also plenty of cash flow and the potential for the most populous state in the US, California, to legalise online poker. All of which could see the shares take off. So, we tentatively upgrade to a buy ahead of an exciting year.