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Worldpay can't catch a break with maiden results

A robust market backdrop drove sales up across the payment specialist's territories
March 8, 2016

Many company executives look back fondly on their maiden annual results; the bosses of Worldpay (WPG) may be more ambivalent. The payment-processing titan - which listed in October and counts Tesco, Asda and Next among its customers - grew underlying cash profits by a solid 8 per cent to £406m in 2015. But unimpressed investors sent its shares down 5 per cent.

IC TIP: Hold at 270p

Worldpay provides software and systems to more than 400,000 merchants, enabling them to accept more than 300 payment types in 126 currencies. It processed about 13.1bn transactions with a total value of £402bn - a 9 per cent rise - in 2015. That fuelled a 14 per cent rise in net revenues to £982m.

Rising transaction volumes propelled underlying cash profits up 14 per cent in the global e-commerce business. The division also benefited from strong demand for services such as treasury management and foreign exchange among retail, travel and digital content companies. Meanwhile, new products and robust e-commerce demand helped to drive net sales up 11 per cent in the UK. But underlying cash profits slumped 17 per cent in the smaller US segment, as scaling up the business proved more costly and time-consuming than anticipated.

Management aims to grow annual net sales by an average of 9 per cent to 11 per cent in the coming years. Broker Credit Suisse expects pre-tax profits of £300m in 2016, giving EPS of 10.94p (from £188m and 8.18p in 2015).

WORLDPAY (WPG)
ORD PRICE:270pMARKET VALUE:£5.4bn
TOUCH:269.6-270.6p12-MONTH HIGH:320pLOW: 240p
DIVIDEND YIELD:NILPE RATIO:NA
NET ASSET VALUE:34p*NET DEBT:£1.4bn

Year to 31 DecTurnover (£bn)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20123.08-73.2nanil
20133.38-197.8nanil
2014**3.63-47.1-3.1nil
2015†3.9619.1-1.8nil
% change+9---

*Includes intangible assets of £2.0bn, or 100p a share †Worldpay listed in October 2015

**Pro forma figures