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 has confirmed that, further to the announcement on 24 July 2015, the Company will issue 3,210,400 ordinary shares of 0.01 pence each to the Meritus sellers in relation to the acquisition of TK Global Partners LP on 1 September 2015.

Canaccord note today:
"What’s new? Group revenues increased 11% to $223.0m (H1 2014: $159.1m) on an organic constant currency basis. This was 13% ahead of our forecast of $197.2m. Adjusting for the largest merchant (29% of H1 2015 revenues), the underlying revenue growth was a strong 24% on a constant currency basis. Revenue from the largest merchant was $64.7m in comparison to our forecast of $50.3m. Adjusted EBITDA increased 27.9% to $49.9m (H1 2014: $39.0m) and was 12% ahead of our forecast of $44.6m. Encouragingly, strong trading has continued across both NETBANX (21% organic constant currency growth excluding largest merchant) and NETELLER (35% organic constant currency growth). NETBANX revenue of $173.0m was 16% ahead of our forecasts of $149.0m. NETBANX gross margin of 37.1% was lower than our forecast of 40.8% due to lower gross margins from the fast growing US businesses. NETELLER revenue of $49.8m was 4% ahead of our forecasts of $47.9m with gross margin of 87.3% ahead of our forecast of 82.5%. The acquisition of Skrill was completed on 10 August 2015 and Optimal continues to target c.$40m per annum in cost synergies from FY16. Cash generation remained robust with FCF excluding payments working capital of $34.1m (H1 2014: $29.6m). Excluding the rights issue, net debt was $3.7m at 30 June 2015 (31 December 2014: $17.1m). Overall, the outlook remains confident with the underlying business continuing “to perform in line with full year expectations”.
Impact on the Canaccord Genuity view We continue to believe the Skrill acquisition could drive earnings outperformance. Skrill performed well in H1 2015 with revenues (including Ukash from 1 April) of $172.8m growing 26% in euro terms. We note that Skrill’s H1 2015 EBITDA margin of 23% is also broadly in line with Optimal’s adjusted EBITDA margin of 22.4%. We believe Optimal may exceed its $40m cost saving target and we see further opportunities to save costs from platform, back office and brand consolidation over the medium term. More generally, the combined group should benefit from increased scale, bargaining power and network effects.
Valuation We make no changes to forecasts and see the following factors driving a re-rating of shares. Firstly, Optimal's strong cash generation should allow debt to be quickly repaid, resulting in contraction in EV/EBITDA 2016E multiples by over two turns. Secondly. Optimal is progressing towards a move into the FTSE 250, which should broaden its investor base. Lastly, the diversification of earnings across customers, products and geographies should increase earnings resilience. Shares trade at only 9.0x 2016E EV/EBITDA, a significant discount to the global peer group average of 11.4x. We maintain our 337p target price (FY16E 11.4x EV/EBITDA)."

Barclays reiterates overweight, target 450p.

Graph now looking much more positive with an eventual blue-sky break coming. FTSE250 likely to bring that on quicker.

Another good rise today. CityAM yesterday citing FTSE250 move. Heading for the life highs now.

This has got to be 250 fund buying??

Good write-up in Investors Chronicle, so imagine we will continue to benefit from that, particularly being on such a low PE.

Citi out with a new buy rec, target 400p

Deutsche new buy, tp 380p

OPAY partners with Emergent Payments to support international growth of digital businesses.

Coming along nicely - for now!!!!

coming along nicely - for now!!!

Starting to break out of the 12 month high, perhaps we'll get a sharper move towards 400p once this is definitively higher. Looks well positioned to benefit for the future and to capitalise on changing payment systems. Now the largest holding in my portfolio but I don't want to sell any if I can avoid it.

Seems to be struggling to get through that nasty black line!

Not now though! Blue sky...

Issue of Equity
1 October 2015 - Optimal Payments Plc wishes to advise that it has made an application to the London Stock Exchange for the listing of 47,891 ordinary shares of 0.01 pence each ("Ordinary Shares").

These Ordinary Shares have been allotted as consideration to a vendor of FANS Entertainment Inc. ("FANS") to satisfy the Company's obligations to exchange, on a one-for-one basis, shares in a subsidiary of Optimal Payments (the "Consideration Shares") into shares of Optimal Payments, in line with the terms of the FANS acquisition which was announced on 28 May 2015. The total number of Consideration Shares issued to the vendors was 3,163,633. Following this issue of equity and the previous issues announced on 16 June 2015 and 8 September 2015, the total number of Consideration Shares, which have yet to be exchanged on a one-for-one basis into Ordinary Shares, is 2,667,261.
All Ordinary Shares to be issued described above will rank pari passu with the existing Ordinary Shares. It is expected that the Ordinary Shares will be admitted to trading on AIM with effect from 6 October 2015.

Very good write-up in today's Investor's Chronicle.

Today's rise coming on the back the IC recommendation I assume, however it can't be too long before an update on move to FTSE full list and subsequent inclusion into FTSE250.

400p looks achievable now. I wonder if lots of investors will see that as a good opportunity to cash out.

Jim Slater likes OPAY ......

http://www.telegraph.co.uk/finance/personalfinance/investing/shares/11906450/Jim-Slater-My-latest-tip-improves-the-odds-in-the-stock-market-casino.html

An interesting area James, but inclined to wait till after the float and let the SP settle before evaluating.