Payments services company Safecharge (SCH) has continued to grow at an impressive rate. Its processing volumes - the value of transactions handled by the company - reached $8.1bn (£6.5bn) in 2016, up 17 per cent. This was due primarily to growth in volume from existing clients, supplemented by the addition of new high-volume customers. The group also expects a further $1bn in annualised processing volumes from clients during 2017. The group’s dedicated platform, SafeCharge Acquiring, also grew strongly, with volumes of $970m for the year, up from $191m in 2015.
The restructuring of the group's Pay.com pre-paid cards business, other cost reduction initiatives and the higher revenue helped improve adjusted cash profit margins to 32 per cent, from 31.2 per cent in 2015. This measure is especially important given that the company continues to pay out three-quarters of adjusted cash profits as dividends.
The group is looking to diversify into new sectors and geographies. During the year, it began the global rollout for its first airline customer, as well as taking on new customers in Romania, Italy and Portugal.
Analysts at Canaccord Genuity are forecasting adjusted earnings before interest, tax, depreciation and amortisation of $36m, giving adjusted diluted EPS of 23¢ in 2017 (from $33.3m, 20.7¢ in 2016).
| SAFECHARGE (SCH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 231p | MARKET VALUE: | £342m | |
| TOUCH: | 227-235p | 12-MONTH HIGH: | 269p | LOW: 185p |
| DIVIDEND YIELD: | 5.7% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 109¢ | NET CASH: | $115m | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2012 | 32.9 | 4.1 | 2.4 | na |
| 2013 | 43.2 | 0.4 | -1.3 | nil |
| 2014* | 76.9 | 16.3 | 10.4 | 8.16 |
| 2015 | 99.8 | 22.7 | 15.1 | 11.30 |
| 2016 | 104 | 28.0 | 17.6 | 16.47 |
| % change | +4 | +24 | +16 | +46 |
*Safecharge listed in April 2014 £1=$1.248 | ||||
