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

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.

Berenberg out with buy rec today, tp 520p

Should be good news for OPAY........

Mississippi Task Force Commissioned to Study Online Gaming
by SADONNA PRICE updated on JULY 10, 2014

The state of Mississippi has avoided the talks of online game play for some time now but with a floundering casino market, the state is about to begin a study of the industry. According to a recent report by the Clarion-Ledger, the gaming revenues in the state are in decline, especially in the Tunica and Mississippi River regions.

Casinos in the state are making less money and the closure of Harrah’s in Tunica last month put a huge damper on the industry. Harrah’s was a popular spot for visitors to the area but was not popular enough apparently to stay open. Jobs and gaming revenue were lost once the casino was shut down.

The state is now beginning to think about online gaming and how it may help the struggling casino gaming market. Richard Bennett is the Chairman of the Mississippi House Gaming Committee and Bennett recently commissioned a task force which is comprised of eight people to begin the study. This task force will look at online gaming in the US and see how it is working for the states that offer iGaming.

Allen Godfrey is the Executive Director of the Mississippi Gaming Commission and he was named the chairman of the task force. For the past three years, Bobby Moak, a representative of the state, has tried to introduce legislation for online gaming but each time the legislation is introduced, it dies in the committee. Moak has basically introduced the same piece of legislation each time, proposing the regulation, licensing and taxing of online gaming. Online gaming licenses would be given to companies that have land licenses in the state for operation of casino gaming.

Moak has stated that the online gaming legislation is necessary to allow the state’s existing gaming industry to have control of their destiny and allow the state to regulate what is already happening online. Mississippi cannot afford to let competitor states begin online gaming and be left behind, especially with existing issues concerning the land-based casino industry. It will be interesting to see what the study shows and if state legislators decide to get in on the new online gambling market in the US.

Inter-operator Poker Network Gains Tentative Approval in Nevada
by SADONNA PRICE on JULY 10, 2014

According to a recent report at the Review Journal, the state of Nevada may soon have an inter-operator poker network, increasing the online poker player pool in the state. Gaming regulators of Nevada gave tentative approval of a new interactive gaming system which would be the overall network for casinos in the state that offer online poker gaming options.

The technology would be operated by 888 Holdings and would allow for sites in the state to come together on one network. This same technology could potentially be the model to begin interstate player pools with Nevada and the state of Delaware.

It was just yesterday morning that the plan was proposed to the Gaming Control Board, and the plan would see 888 Holdings creating the poker network for the state. WSOP.com of Caesars Interactive Entertainment, Treasure Island online poker room (in the works) and a separate poker room for 888, which would be connected to Treasure Island, would be able to operate on the new platform.

Once launched, players would be able to log on to the new system at Treasure Island or the WSOP online poker site. Multiple casinos would be able to join the network, which would create more game play at the online poker tables. The technology of the network would create an avenue for reveneus from the games to be distributed to each casino as based on the registered player joining a poker game.

This news also brings to light the agreement between Nevada and Delaware for interstate gaming. The Nevada Gaming Commission is supposed to rule on the subject on the 24th of this month, which is only 2 weeks away. The news of the potential inter-operator poker network, can only help the goal of finally seeing the two states come together and share player liquidity.

Onwards again today - the high is in sight, so after a year of consolidation and little share price activity, I think we could quickly break with a sharp move over £5

I await patiently!! Been going steady for a while thank goodness.

It's been de-risked considerably now too.

Yes it has, I keep looking at their Corporate Governance and all sorts keep coming up on that so I think they will do good.

Personally a couple of those price targets and 600p and 700p look quite realistic I think.

I would suggest so in time but perhaps later on in the year.

I thought we'd have been heading higher again on Monitise developments...