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

This appears to be an old data breach and hopefully one which is totally overdone. Markets are nervous on any such news in the wake of Talk Talk. Still my largest holding though I have upped KNOS and EMIS to equalweight it a bit more.

Hopefully this blows over next week.

Had it have been a recent data breach (like Talk) i would have stayed well away ,but as you say an old problem and hopefully overdone .
Does make me wonder why it came out now though ..

the markets' current mood is generally bearish, so any bad news is magnified, and potentially good is overlooked ..... similar at IAG this morning and also CINE, though that was more like pump and dump by canaccord

A lot of positive news in Rns's is going unrewarded . Agree with CINE. :-))

From what I understand small data breaches are occurring all the time or at least I should say attempts/attacks are occurring all the time, particularly in payment services/high personal data holding companies. Let's also not forget one of the breaches was Skrill related. We could do with a full list move sooner rather than later though.

Agreed ,i was surprised that IAG went down like that .
It does seem easier to short stock now rather than go long .

There was an article from Motley Fool yesterday it seems

Alan Oscroft - Thursday, 29 October, 2015 | More on: OPAY

Would you risk your money on one of the competing mobile payments systems right now? You might be put off by the Monitise collapse, which has seen a bone-jarring 96% price crash since February 2014’s peak. But one competitor down means there’s a better chance for Optimal Payments (LSE: OPAY), surely?

Optimal Payments shares have been a bit erratic of late, but were up 500% over the past five years, to 348p by the close of business on Wednesday. But then the price crashed by 20% in early trading on Thursday morning, as the firm admitted it had suffered breaches in its customer data security.

The immediate price fall seems to have been something of an over-reaction, and as it has become clear that these breaches took place around 2011 to 2012 or earlier, the price recovered to stand 12% down at 306p approaching midday. But that’s still a significant dent, and with the news breaking so soon after the cyber attack at TalkTalk Telecom, users of the system and shareholders of Optimal Payments are understandably worried, especially at a time when Apple Pay is taking the market by storm.

Repeated breaches
The breaches reported by Optimal, which have resulted in “a small amount of customers’ personal data” now being in the public domain, with allegations suggesting that the same has happened to “a more material amount of customers’ personal data“, apparently took place at the company’s NETELLER subsidiary in or before 2011, and at Moneybookers Limited (which is now owned by Optimal via a series of acquisitions) in or before 2012.

Both had previously been targets of cyber attacks in 2009 and 2010, although the company assured us that no financial losses were incurred. The latest breaches don’t sound likely to lead to direct financial loss either, with Reuters reporting that it is only names and email address of customers that have been accessed, and which are now available for sale on the so-called dark web.

But even if no money is lost, the apparent fact that companies can suffer repeated breaches of security is a serious concern, and it’s one that could kill a smaller operator’s prospects.

Is Optimal Payments a company to invest in now? Well, I wouldn’t have bought it even before this news, because it’s in a heavily competitive market, and it doesn’t have the barriers to entry needed to differentiate it from the likes of Apple Pay. (As an aside, I think one payments processor that has built itself a barrier is PayPoint, with its network of terminals in shops for handling the payment of bills.)

Bargepole
The mobile payments market is set to soar in turnover in the next few years, and that is reflected in the growth pricing attached to shares in the candidates for success. But a couple of things conspire to make the smaller operators unattractive to me.

Firstly, I’m always minded of Warren Buffett’s observation that it is rarely the first movers who make it big in a new technological business. And in the payments business, I reckon the advantages lie very much with the big players who have the muscle to expand rapidly — and to invest in industry-leading cyber security.

Bouncing back nicely ...

Yes, retest of highs before too long...

Yesterday's minimal move higher reported in The Times and Telegraph as possible merger with World Pay. Bored traders perhaps.

Daily Telegraph:

Finally, mobile payments company Optimal Payments became the latest target of takeover chatter in the City. The stock ticked up 1.8pc to 340.5p as traders said Worldpay was a possible suitor

I'd prefer to see value added from Skrill and good growth before a takeover approach but can see how the enlarged group with US Skrill and the existing business is likely to be appealing to a suitor.

http://www.forbes.com/sites/thomasbrewster/2015/11/05/optimal-payments-hack-investigation/

The history behind the original hacking attempts.

Canaccord comment on the above article:
"The article describes how the author came across the data, his dealings with his source and his interactions with Optimal Payments. He comments on the sensitivity, amount and age of the data, how such data can potentially be used on the “dark web” and the risks to enterprises generally. The article provides many positive disclosures for Optimal Payments:
• The article indicates that data is related to attacks from 2009 and 2010. Optimal Payments previously stated that forensic audits indicated that the NETELLER data breach contained no evidence to suggest that the breach was material and, to the best of the company’s knowledge, no NETELLER customers suffered any financial losses as a result. Similarly, to the best of the company’s knowledge, no Moneybookers’ customers suffered any financial losses as a result of the historic breach.
• The article did not contradict Optimal’s account that the Neteller breach involved only a marketing database with no financial information. Optimal indicates in the article that the Moneybookers breach involved a production database with encrypted passwords and card numbers, but that the forensic investigator believed the likelihood of a successful transfer of the data to the attacker was low.
• The author was impressed with Optimal Payments’ professionalism and openness. He said the company was “refreshingly transparent”, “responded quickly” and praised its “exemplary reception of ethical disclosure”. Optimal Payments reported the breaches in 2009 & 2010 to the FSA (now the FCA) and were the subject of independent forensic investigations from major accounting firms.
The article alleges that the leaked databases contained 4.5m and 3.6m records from Moneybookers (Skrill) and Neteller, respectively. Optimal has commenced an investigation into the matter and the veracity of the allegations (bought to the company by the journalist at Forbes), and has informed both the Information Commissioner and the FCA. Shares continue to trade at a discount to peer average (11.7x versus 13.5x FY2 EV/ EBITDA), despite strong growth and potential for earnings out performance, driven by acquisition cost synergies, combined Skrill/ Neteller margin improvement and continued strong growth against conservative market expectations."

Thanks Harrycat.

Looks like there are no significant shorts on this now either ..

So we're now under the PAYS ticker and trading in line with expectations. Synergies of $5-$10m by end of this year. Plus integration ahead of schedule. Canaccord (today) buy, tp 425p

What a lot of full mouth creating over here
pardon me is only my view

try that in english pim!

Berenberg views payment services industry as a structurally growing industry, it says in note as it initiates European payment coverage.

- sector's transaction volume growth drive by GDP growth and non-cash based transactions gaining share vs. cash.
- M&A activity is rife as new money from venture capital funds is attracted by growth

Paysafe Group preferred stock in industry and sees its discount vs sector is unjustified. New buy, tp 431p