Optimal Payments (OPAY), which processes transactions for the likes of Caesars and 888, boosted cash profits by about 90 per cent to $52m (£31m) last year. That was largely driven by a 54 per cent increase in sales at its e-wallet and pre-paid card business, Neteller, which boasted a gross margin of 84 per cent. Netbanx, its payment-processing platform, also chipped in, with revenues up 39 per cent to $193m.
The group also staked various claims to future revenue streams in a fast-moving industry. Starting later this year, it has been granted the right to process card payments for EU merchants - rather than having a bank act as a middleman and take a cut. That should lower its costs and attract lower-risk sellers. It should also gain from the legalisation of online gambling in the US: Nevada and New Jersey have already relented, and New York and California could follow suit.
The group also cleaned up its balance sheet, increasing net cash substantially and paying off the last of its bank debt. But its growth has come at a cost - marketing and promotional spending more than doubled to $8m. Broker Canaccord Genuity expects adjusted pre-tax profits of $49.3m this year, giving EPS of 28¢ (from $42.1m and 26¢).
| OPTIMAL PAYMENTS (OPAY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 386p | MARKET VALUE: | £623m | |
| TOUCH: | 385-387p | 12-MONTH HIGH: | 520p | LOW: 127p |
| DIVIDEND YIELD: | nil | PE RATIO: | 29 | |
| NET ASSET VALUE: | 82¢* | NET CASH: | $82.9m** | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2009 | 63 | -10.0 | -8.0 | nil |
| 2010 | 62 | -3.8 | -3.0 | nil |
| 2011 | 128 | -26.2 | -21.0 | nil |
| 2012 | 179 | 3.6 | 1.0 | nil |
| 2013 | 253 | 32.7 | 22.0 | nil |
| % change | +41 | +797 | +2100 | - |
*Includes intangible assets of $53.2m, or 33¢ a share £1=$1.66 **Net of merchant cash | ||||
