Payment processing group Optimal Payments (OPAY) has finally started making profits after benefiting from its first full-year's contribution from the acquisition of OP Inc. But there was also strong organic growth from sectors such as gaming, which signalled a big increase in overall payment traffic. Taken together, this boosted the group's full-year cash profits by 58 per cent to $27.6m (£18.2m.)
The Netbanx STP division, which generates around three-quarters of group revenues, saw sales jump 60 per cent in the year to $139m. However, the divisional margin fell slightly to 42 per cent after a rise in bad debts and higher processing costs - reflecting larger volumes, which is a natural feature of this business. The company's Neteller division, meanwhile, saw revenues grow by a modest 2 per cent to $38.8m in the period. However, Neteller, which specialises in e-wallets and pre-paid card processing, had a better second half as the number of signed-up users increased 44 per cent - helped by online gaming demand. Moreover, Optimal looks well positioned for US gaming-related work as more US states consider following the lead set by New Jersey and Nevada - which recently legalised online gaming.
Broker Canaccord Genuity expects adjusted pre-tax profit for 2013 of $24.1m, giving EPS of 14¢ (from $20.2m and 14¢ in 2012).
OPTIMAL PAYMENTS (OPAY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 169p | MARKET VALUE: | £230m | |
| TOUCH: | 168-170p | 12-MONTH HIGH: | 192p | LOW: 60p |
| DIVIDEND YIELD: | nil | PE RATIO: | 169 | |
| NET ASSET VALUE: | 210¢* | NET CASH: | $57.9m** | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2008 | 69.8 | -10.0 | -7.0 | nil |
| 2009 | 62.9 | -10.0 | -8.0 | nil |
| 2010 | 61.6 | -3.80 | -3.0 | nil |
| 2011 | 128 | -26.2 | -21.0 | nil |
| 2012 | 179 | 3.65 | 1.0 | nil |
| % change | +40 | - | - | - |
Ex-div:- Payment:- *Includes intangible assets of $58.5m, or 43¢ a share **Net of merchant cash £1=$1.51 | ||||
