In the unglamorous payments industry, Earthport (EPO) seems to be the belle of the ball. The group - whose cross-border, low-value payment platform is used by banks, online retailers and money transfer companies in 64 countries - signed up 31 new clients including Santander and Standard Chartered in the year to June 2015. Soaring sales narrowed the group's adjusted operating loss by 22 per cent to £5m.
The fallout from the financial crisis has included hefty fines, increased regulation and budgetary pressures for banks and payments groups. That backdrop has made it a challenge for Earthport to expand internationally and win work - management says clients are "extremely nervous". Nonetheless, the value of transactions leapt more than three-quarters to an annual run rate of $10bn (£6.6bn), suggesting that the group's offering is credible and ticks the compliance boxes.
Earthport's directors laid the groundwork for further growth, setting up offices in Singapore and Miami and securing network partnerships in Pakistan, Jamaica and Barbados. Broker Panmure Gordon forecasts a pre-tax loss of £0.5m for the current financial year, giving a loss per share of 0.1p, swinging to profit of £10m and EPS of 1.7p in the year to June 2017 (FY2015 losses: £4.9m and 0.8p).
| EARTHPORT (EPO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 41p | MARKET VALUE: | £195m | |
| TOUCH: | 40.5-41p | 12-MONTH HIGH: | 48p | LOW: 32p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 8p* | NET CASH: | £30.2m | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 2.5 | -7.5 | -4.4 | nil |
| 2012 | 3.0 | -9.6 | -3.9 | nil |
| 2013 | 4.1 | -8.1 | -2.6 | nil |
| 2014 | 10.8 | -6.3 | -1.8 | nil |
| 2015 | 19.3 | -8.7 | -1.9 | nil |
| % change | +78 | - | - | - |
*Includes intangible assets of £9.1m, or 1.9p a share | ||||
