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

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 .

Thanks, I need it would you believe.

My understanding is that for every three shares you own (at the 14th April), you will be offered five more shares at a price of 166p. (So divide the number of shares that you have by 3 and then multiply that figure by 5.) Your broker will send you a message asking you if you wish to purchase the new shares (Rights Issue) at which point you will need to decide if you wish to or not. It will cost you 166p each, so calculation is, your current holding ÷ 3 x 5 x 1.66 = cost of buying new shares (RI).
This is all subject to a number of conditions, one of which is that it is approved at the General Meeting in April, so nothing will happen until after that date.

Thank you harrycat for explaining and for your patience. I fully understand now.

No problem. I think it is correct, but no doubt others will point out any errors.
The offer price is very attractive compared to today's price, but of course when the new shares are issued, that will mean there are far more shares on the open market and will therefore have the effect of making them (the whole quantity) less valuable.
My opinion is, that for the long term holder then it should be a worthwhile investment, particularly as they intend to apply to the FTSE 250 listing (current AIM listing). There are bound to be a few lurches in the share price up to then as holders change their positions depending on their strategy.

Don't think I am going to invest any more as I have been a long term investor and at nearly 67 yrs old I think I need to enjoy some profit whilst I am still breathing. Still hold a nice amount so will probably sell some in dribs and drabs - being a woman I suppose I may change my mind. Cheers. A good end to todays sp.

Glad to hear you have done well and always worth taking some profit. Being a bloke I will probably be a bit greedy and also enjoy the risk factor, so think I will probably take up the Rights in April. In this instance I think I will 'Let the profits run' as I see more pro's than cons. However, as my entry price was 428p the profit isn't huge.......yet!

Hope you are a lot younger than myself. I wish that I had bought in when they dropped from my original entry price to around 60 - 80p but no good wishing. Been a long haul for me as you have probably read. A lot going for this company - I have had to have patience, I wish you luck. Do you think there would be a time scale on how long if one took up the rights in April as to how long one had to hold before one could sell?

3 m HARRY's as old as Stonehenge !!!!

Assuming it goes ahead, dealing in the new shares would begin after the 5th May, so you would be free to sell any time after that. You (as a private investor) do not have to hold shares bought in a Rights Issue for a specific length of time.
Ah, but jimmy, how old is Stonehenge? No one really knows!
One thing that is annoying me slightly is that HMG keep pushing the retirement age back. I suppose they are hoping that I am not going to reach retirement age......ever!!!

Thanks again harrycat may be worth a risk for me then. mmmm!!!!! I managed to get the old age pension at 60, plus bus pass (not that I have used it yet). Wonder what today will bring with OPAY.

Jimmy - older!:-)

RIGHTS ISSUE
Optimal Payments plc has entered into an agreement to acquire Sentinel TopCo Limited and its subsidiaries from Sentinel Group Holdings S.A. (ultimately owned by Funds managed and advised by subsidiaries of CVC Capital Partners Sicav-Fis S.A, Investcorp Technology Partners, and other Shareholders) for a value of approximately EUR1.1 Billion (USD1.2 Billion). The cash consideration for the acquisition will be financed through a combination of available cash, new debt facilities and a fully underwritten Rights Issue.
Optimal Payments is proposing to raise approximately GBP451 Million through a Rights Issue. The Rights Issue has been fully underwritten and the Rights Issue are conditional upon the approval of Shareholders at the General Meeting, which is expected to be held on 16 April 2015. Completion of the acquisition is expected in the third quarter of 2015.
Terms: 5 New Ordinary Shares at GBP1.66 per Share for every 3 Existing Ordinary Shares held at the Record Date.
Relative Details and Dates:
14 April 2015 – Record Date,
16 April 2015 - General Meeting

Will be taking up my rights on this one. Already a multi-bagger but could indeed be transformational and risk reducing.