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

StockMarketWire.com
Optimal Payments confirms trading to end-June remains strong and in line with market expectations. Completion of the acquisition of Skrill remains subject to regulatory approval by the UK's FCA, which is expected to be made no later than 30 July 2015.

Unless the FCA exercises its statutory right to interrupt the consideration period. Completion of the acquisition will take place shortly after the receipt of FCA approval.

As previously announced, following the completion of the acquisition the Company will be seeking the admission of its ordinary shares to listing on the premium segment of the Official List of the UK Listing Authority and admission to trading on the London Stock Exchange's Main Market for listed securities.

It is expected that the Company's ordinary shares would then be eligible for inclusion in the FTSE 250 Index of the London Stock Exchange.

Barclays note today:
"Optimal Payments has released a 1H15 trading update confirming that trading to the end of June remained strong and in line with market expectations. No other new information is included, but the statement goes on to confirm the anticipated timing around the Skrill deal being set to close following FCA approval, which is expected by the end of July, and that the move to the Main Market will follow. Optimal also confirms that it will host a capital markets event in November. Our anticipation for 1H15 is for c. 30% growth, driven by the Meritus/GMA acquisition of the prior year. Within our numbers, we also take account of the tough comparative from the World Cup last year and the weaker EUR having an impact on the Neteller business.

The stock has dropped by almost 20% in the last 10 days and 35% since its peak following the Skrill announcement. Whilst the weakness after the deal was explainable as investors sold the rights, there seems very little rationale behind the recent move and appears purely to be driven by speculation. We believe there are concerns over its Greek exposure, which we estimate is 4-5% of revenues. Whilst these revenues might see some disruption if Greece would exit, it is unlikely to be significant in a group context. After Greece, the focus moved to the Main Listing and when no prospectus was filed by June 30, investors worried that the listing was delayed. Yesterday this developed into investors asking whether the deal might be delayed or perhaps even off.

We see the above apparent reasons for Optimal’s weakness as pure speculation and, with today’s trading update, OPAY wants to set the record straight. The trading update in itself added very limited information and was clearly written to emphasise that the current time line for the closure of Skrill is on track and that the move to Main and FTSE 250 will follow after this closure. Optimal is trading at 10x our FY16E EPS and we reiterate Overweight."

Canaccord comment:
"After a 21% decline in the share price over the last month alone, Optimal Payments provided an update that we believe may address some negative speculation in the market. The update addresses three key share price catalysts: First, Optimal stated that trading in H1 2014 remains strong and in line with market expectations. We believe this should address concerns that Optimal's largest client might drive disappointment. Second, Optimal stated that the completion of the Skrill acquisition is due to take place shortly after the receipt of FCA approval, which is expected no later than 30 July. Seeing that the acquisition remains on track should give investors confidence that Optimal's earnings should benefit from acquisition synergies over the coming quarters, in our view.
Finally, Optimal detailed its continued progress towards a move to the LSE Main Market. Therefore, investors should continue to expect Optimal's inclusion in the FTSE 250 and we believe, potentially, a rerating of the shares.
We reiterate our BUY recommendation. Shares now trade at a deep discount to peers. Optimal trades at 7.8x EV/ 2016E EBITDA on our estimates compared to 13.8x for Safecharge and 13.5x for Wirecard on consensus estimates. Optimal plans to announce H1 2015 results on 26 August and host a Capital Markets Day in November 2015."

Glad I decided to double up this morning once I saw year to date is strong and in line. Shame I didn't do it yesterday though!

Thanks Harrycat for the broker comments

No problem. I hold this stock, both from pre RI and at 166 RI price, so am keen to see it go up to at least the £3 level. I notice neither of the brokers have given a target price, which is a bit annoying.

Like you, held a long time!

Price targets on Bloomberg:
3/7 Barclays 450p
29/6 Canaccord 337p
26/5 Numis 450p

starting to break out of the lower lows downtrend since the March high.

News afoot on acquisition approval? Broken out of the downtrend.

So slightly delayed expectation on completion, early August but market seems to like the update this morning. Tracker funds now buying?

StockMarketWire.com
Optimal Payments has reported that the Financial Conduct Authority (FCA) has informed the company that it has not yet concluded its evaluation of its application to take control of the Skrill Group.

A decision on the application is expected to be made no later than 11 August and the company remains confident of a positive outcome of this process.

Its proposal to acquire Skrill was first announced in March.

LONDON (3 August 2015) - Further to the announcements of 23 March 2015, 1 June 2015 and 31 July 2015, Optimal Payments Plc (LSE AIM: OPAY, the "Company") is pleased to announce that change of control approval from the Financial Conduct Authority relating to the acquisition of the Skrill Group has now been received and completion of the Acquisition is scheduled to take place on 10 August 2015.

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. The Directors of the Company continue to believe that the Acquisition (for an enterprise value of approximately €1.1 billion) will be transformational and value enhancing for Optimal Payments and its shareholders.

As the Acquisition is classified as a reverse takeover for the Company under AIM Rule 14, upon Completion the listing on AIM of all of the Pre-Completion Existing Ordinary Shares will be cancelled, and applications have been made for the immediate re-admission of those Pre-Completion Existing Ordinary Shares and the admission of the Skrill Consideration Shares to trading on AIM. It is expected that Completion Admission will become effective and dealings in the Pre-Completion Existing Ordinary Shares and the Skrill Consideration Shares will commence at 8.00 a.m. on 11 August 2015.

Great news, FTSE250 here we come. Should soon be breaking the 300p level and leaving it behind for good I hope. Good long term hold.

Yes, the market seems to like the news. I wonder if the traders are interested in the gap on the chart? Probably too large to be of interest. Anything above the 200 DMA and good support at that level would very positive. Suspect 300p level might see a bit of resistance.

That's more like it now - funds and trackers need to start buying if they haven't been already. 300p is a bit of a psychological barrier but demand should be sufficient to take us clear through. If this wasn't already my largest holding I'd be topping up, but still tempted. Looks cheap to me.

Rally at the close on further completion headlines and on-going synergies of $40m/annum

StockMarketWire.com
Optimal Payments has completed its acquisition of Skrill. 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.

The directors of the company continue to believe that the acquisition (for an enterprise value of approximately €1.1 billion) will be transformational and value enhancing for Optimal Payments and its shareholders.

Should expect that rally to continue tomorrow with fund buying.

old mutual sells more I am out BB

Holding up remarkably well here during today's "flash crash."