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

What scare mongering is going on now?? Holy cow.

By John Ficenec, Questor Editor
6:00AM GMT 17 Dec 2014
Aim-listed online payment processor has suffered from a controversial director share deal and the exit of the finance chief, says Questor

Optimal Payments
325½p+12p
Questor says SELL

Optimal Payments [LON:OPAY] shares have been hammered this year. The company’s shares have tumbled almost 40pc from highs of 536p in mid-September and are now down 9pc for the year after its chief executive was caught up in a controversial share sale.

The online payment company announced the exit of the finance chief Keith Butcher last week and yesterday moved to calm the markets by insisting trading was still fine.

The problems all stem from share dealings carried out by the company’s chief executive earlier this year. On April 1 the company made a regulatory announcement that Joel Leonoff had “pledged” 1.5m Optimal Payments shares, or 38pc of his entire holding, in return for £4m in cash from a US company called Equity First Holdings (EFH). The cash received for the shares was about a 30pc discount to their £5.5m market value.


On the face of it this transaction did not appear out of place, as management in Aim-listed companies often have a lot of their wealth tied up in the shares and using them to fund a house purchase or the like seems sensible.

However, the company was forced to clarify the deal last month after EFH found itself back in the spotlight over other share deals at insurance outsourcer Quindell. It emerged that Mr Leonoff’s EFH “loan” structure involved him disposing of his shares at a discount, but with an option to repurchase. Mr Leonoff’s full intention may be to buy back the shares, but crucially he doesn’t have to if they fall in value. There is quite a big difference between simply using shares to obtain a loan - and selling more than a third of one’s stake in a company, as now appears to have been the case.

Meanwhile, the company said yesterday that trading was strong and it expected results for the year ended December to be “at least” in line with market expectations for pre-tax profits of £45m, on revenue of £232m, giving earnings per share of 24.4p.

Optimal Payments is operating in a fast-growing online gambling market as its technology helps customers store cash and make payments. It has two main sources of revenue: NETELLER, an “e-wallet” business into which online gamblers can deposit money, and NETBANX, a system that processes transactions for online retailers. But, despite these encouraging prospects, Questor is nothing if not cautious and doesn’t like surprises such as those involving Mr Leonoff’s sharedealing. We are exiting our previous buy position and would rather hold cash going into next year. Sell.

Bouncing back for you this afternoon 3monkies ...

Thank goodness jimmy b and any one else who holds. What a share!!!!

I'm not actually in here ,am tempted though because of the wild fluctuations.

Good Luck if you do.

StockMarketWire.com
Optimal Payments issues its trading update for the year ended 31 December 2014 ahead of its full year results on 23 March 2015.

Highlights:
· The Group expects revenue and EBITDA for 2014 will be in line with market expectations, with reported revenue increasing 44% to at least $365 million (2013: $253.4 million) and EBITDA increasing 65% to at least $86 million (2013: $52.2 million).

· Normalised profit after tax(1) for 2014 is expected to be materially ahead of market expectations, principally due to an effective tax rate which is lower than consensus as a result of historical tax losses and a mix of revenues weighted towards operations conducted in lower tax jurisdictions.

· The NETELLER Stored Value business performed well, driven by underlying growth in customer metrics. The NETBANX Straight Through Processing business also performed strongly, particularly in Asia, incorporating revenues from Meritus and GMA following completion of the acquisitions on 23 July 2014.

Significant progress on important initiatives in 2014:

· Principal Membership with Visa Europe and MasterCard Europe achieved; Optimal Payments launched its acquiring service to merchants in the European Union in Q4 2014.

· NETELLER and Net+ products launched in the US in March 2014 with good adoption by online gambling merchants in the three states which have regulated online gambling. Larger US states, including California and Pennsylvania, are considering regulating online gambling in 2015. We have continued to develop our relationships with current and potential merchants and have forged successful partnerships in the rapidly developing area of fantasy sports.

· In November we announced the launch of a new card issuing services division to further enhance our end-to-end, complete payments value chain offer. We have also launched NETELLERGO!, a new flexible and easy-to-use online checkout page to provide ecommerce merchants with indemnified alternative payments.

· The integration of the Meritus and GMA businesses acquired in July 2014 is progressing well.

Not bad news and down she goes yet again, it happens every time. The weirdest share I have known.

Most of the market stocks are down today, so suspect OPAY is just getting dragged down with the rest. As the markets are pretty volatile atm, I think many stocks are going to be two steps forward, one step back on a regular basis.

StockMarketWire.com
Optimal Payments has improved its FY pretax profit to $59.0m, from $32.7m. Total revenue was $365.0m, from $253.4m. Trading of the company's shares on AIM has been temporarily suspended pending publication of an admission document.

Separately, Optimal said it has entered into an agreement to acquire Sentinel Topco Limited and its subsidiaries (Skrill Group) from Sentinel Group Holdings S.A. for an enterprise value of about 1.1bn euros.

The Skrill Group is one of Europe's leading digital payments businesses providing digital wallet solutions and online payment processing capabilities and is one of the largest pre-paid online voucher providers in Europe with its paysafecard brand.

Referring to Optimal's results, President and CEO Joel Leonoff said 2014 was a year of significant growth for Optimal Payments with substantial increases in revenue and profitability.

"Having accomplished all of our stated goals during the year, we are excited about the year ahead and the evolving opportunities for Optimal Payments.

"Specifically, NETBANX is well positioned for continued success through our Principal Membership status with Visa and MasterCard and NETELLER and Net+ continue to demonstrate impressive growth internationally whilst establishing a solid foundation for our future in the evolving regulated US online gambling market."

Sentinel Group Holdings is ultimately owned by funds managed and advised by subsidiaries of CVC Capital Partners SICAV-FIS S.A., Investcorp Technology Partners, and other shareholders.

Barclays note today:
"Alongside results that are in line with the December trading update, Optimal has announced the surprise acquisition of its major competitor in the digital wallet business, Skrill. At a $1.2bn EV, with a £451m rights issue, this constitutes a reverse takeover. The deal adds major scale to the digital wallets business as well as diversifying the group further away from its key merchant exposure. Adding over 100% to EBITDA before synergies, this is likely to prove a highly accretive deal and should be taken very positively by the market.

Optimal is acquiring Skrill for $781m cash and 37m new shares equivalent to $146m (7.9% of the new combined entity). The EV of Skrill being paid is $1.2bn (£0.8bn) versus Optimal’s market cap of £0.7bn so constitutes a reverse takeover and will be financed through a combination of available cash, new debt facilities and a fully underwritten rights issue of c. £451m. Management expects the deal to be EPS accretive in the first full year of ownership, with the intention to seek main market listing and FTSE 250 inclusion as soon possible upon completion.

Optimal is paying 9.3x EBITDA (Sept 14), adjusted for the NPV of synergies, according to the statement. Net debt/EBITDA of the combined group will be c. 3x following closure. This adds financial gearing to the business and also serves to significantly reduce the key customer exposure. We calculate this was down to 29% in 2H14 and we expect that it will be 15-20% following the closure of this deal.

In terms of accretion, Optimal is raising c. £450m (or 67% dilution) in order to increase its pro-forma EBITDA from $86m to $175m (or adding c. 100%). If we adjust for the expected synergies of $40m by 2016, this would create $215m pro-forma (or would add c. 150%). We calculate that this adds c. 50% EBITDA accretion on a diluted share basis. Actual EPS accretion will depend on underlying growth in the businesses, final interest and tax charges and the success of extracting the synergies. Nonetheless, we would expect 20% EPS accretion as a minimum achievable at this stage.

FY results are exactly in line with the December trading update with detailed revenue of at least $365m and EBITDA of $86m. We calculate that this equates to an organic growth rate for the year of just below 30% with 2H15 at c. 25%. The key merchant is disclosed as accounting for 36.7% of revenues in FY14. This implies that the percentage of sales from this key customer dropped from 47% in 1H14 to 29% in H2. This is largely due to the diversifying acquisitions and we anticipate that the key merchant is close to this level on a pro-forma basis. Alongside the further dilution from the acquisition today, this should reassure. The underlying outlook reads positively, talking of ongoing momentum into 2015.

Optimal has staged a decent recovery since the low in December last year when the market had worried about the rationale for a CFO change. The rationale is now yet clearer and an acquisition of Skrill provides the business with a step change in scale and earnings potential. With Optimal trading even currently at a very significant discount of c. 60% to European peer Wirecard, we have written that any further comfort that management can give in key customer exposure should reassure and this deal significantly lowers this. Optimal is currently trading at 10x our FY16E EPS and our 600p price target equates to 15x our FY16E EPS – Overweight.

RESTORATION OF TRADING ON AIM

The trading on AIM for the under-mentioned securities was temporarily suspended. The suspension is lifted from 23/03/2015 at 2:00pm, an announcement having been made and an admission document having been published.

23 March 2015
Optimal Payments plc announced earlier this morning that it had agreed to acquire Sentinel Topco Limited and its subsidiaries ("Skrill"), a transaction which constitutes a reverse takeover under the AIM Rules. Accordingly the ordinary shares of the Company were temporarily suspended pending the publication of a Prospectus (incorporating an Admission Document, Shareholder Circular and Notice of General Meeting).

The Company announces that the Prospectus was approved today by the UK Listing Authority. The Prospectus is being posted to shareholders and has been published on the Company's website at www.optimalpayments.com. Following publication of the Prospectus, the temporary suspension to trading in the Company's ordinary shares will be lifted with effect from 2 p.m. today and trading in the Company's ordinary shares will resume.

The Prospectus will also be submitted to the National Storage Mechanism and will shortly be available for inspection at www.morningstar.co.uk/uk/NSM.

Copies of the Prospectus will also be available at the Company's registered office at Audax House, 6 Finch Road, Douglas, Isle of Man, IM1 2PT and at the offices of Hogan Lovells International LLP at Atlantic House, Holborn Viaduct, London, EC1A 2FG.

An extraordinary general meeting will be held on 16 April 2015 to consider and, if thought fit, pass resolutions to approve the Acquisition and the Rights Issue.

Sp currently 550p (+31.3%) mid, not as shown on chart above or OPAY quote page.

Rights issue
"The company is proposing a five-for-three rights Issue at 166p per rights issue share to raise approximately £451m (gross). The rights issue price represents a 60% discount to the closing price on 20 March 2015, a 36% discount to the theoretical ex-rights price (TERP) based on the closing price on 20 March and a 34% discount to the TERP with reference to the volume-weighted average share price of 398p from 16 to 20 March.

Timetable
 23 March – deal announced; posting of rights issue prospectus, notice of general meeting
 14 April – record date for rights issue.
 16 April – general meeting.
 17 April – nil-paids start trading.
 1 May – latest time to accept rights issue.
 5 May – announcement of results of rights issue; commencement of dealing in new shares, fully paid.
 Q315 – expected completion of the acquisition.
The company has stated that it plans to seek a Main Market listing and inclusion in the FTSE 250 as soon as possible after the acquisition completes.

Harrycat - I don't fully understand the above. Please could you explain simply for a simple country bumpkin. Sorry to have to ask but would you believe after 9 years I sold a thousand pounds worth of my holding a month ago and baby look at them now. Just my luck.

Well i wondered where you were 3 m , i hope you still kept some ?

Oh yes jimmy b - I am up 200% on what I have left so would love to know what it all means. Sorry if I sound thick.

Your not that thick 3 m ,your up 200% ! :)) good for you .