Onerous regulations and rising international trade are driving banks, e-retailers and money transfer specialists to Earthport (EPO). The Aim-listed group, whose network enables low-value transactions between more than 60 countries, narrowed its first-half adjusted operating loss by nearly a third to £2.3m.
Earthport signed up 17 new clients - including HSBC and Standard Chartered - and eight went live on its platform. It has a further 32 customers waiting in the wings, and has started to attract business outside of financial services; for example, companies are applying its technology to mobile wallets and e-commerce.
The group acquired IT services group ASPone, netting a skilled team of engineers with local knowledge of cities such as Istanbul, Moscow and Singapore. Integration costs and investments in personnel pushed Earthport's administrative costs up 58 per cent to £9.3m. However, lower spending on operations and a recent share placing meant its net cash pile ballooned to £32.5m.
Broker Panmure Gordon expects a full-year pre-tax loss of £2.3m, giving a loss per share of 0.5p, swinging to earnings of £6.6m and 1.5p in 2016 (from £6.4m and 1.8p in 2014).
| EARTHPORT (EPO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 43p | MARKET VALUE: | £205m | |
| TOUCH: | 42-43p | 12-MONTH HIGH: | 50p | LOW: 35p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 8p* | NET CASH: | £32.5m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 3.3 | -4.8 | -1.3 | nil |
| 2014 | 9.0 | -5.4 | -1.3 | nil |
| % change | +171 | - | - | - |
*Includes intangible assets of £9.0m, or 2p a share | ||||
