Earthport (EPO) investors took fright following the cross-border payments group's warning in February that it could lose up to £5m after a customer of its Baydonhill subsidiary reneged on payments. But the core business remains unscathed: average daily transactions since the event are tracking more than 15 per cent ahead of volumes in December and January. Moreover, brisk trading drove adjusted gross profits up 6 per cent to £7.8m in the reported period.
Earthport's technology has attracted more than 50 banks and several money transfer organisations, e-commerce companies and payments providers. Nine customers went live on its platform in the period, while 35 more are currently implementing its technology. Existing customers driving up volumes propelled the annualised value of transactions to $11bn (£7.7bn) in December.
The Aim-listed group has been busy investing in talent, products and international expansion. It strengthened its distributed ledger hub, bolstered its Caribbean network, struck bank partnerships in Bangladesh and Sri Lanka and pinpointed 35 potential emerging market customers. But this meant administrative expenses rose, compounding losses.
Prior to these results, broker Panmure Gordon expected a pre-tax loss of £0.5m in the year to June 2016, giving a loss per share of 0.1p (FY2015: losses of £4.9m and 0.8p).
| EARTHPORT (EPO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 16.8p | MARKET VALUE: | £ 80m | |
| TOUCH: | 16.8-17p | 12-MONTH HIGH: | 48p | LOW: 16p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 7p* | NET CASH: | £24.2m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 9.0 | -5.4 | -1.3 | nil |
| 2015 | 10.6 | -5.6 | -1.3 | nil |
| % change | +18 | - | - | - |
*Includes intangible assets of £9.0m, or 2p a share | ||||
