Rising payment volumes and robust demand for digital wallets and pre-paid cards drove comparable sales up a fifth at Paysafe (PAYS) in the first half of 2016. The payments giant also profited from its takeover of US rival Skrill and widened its margins, meaning adjusted cash profits nearly tripled to $144m (£110m). Elated investors sent its shares up 8 per cent.
Like-for-like sales soared 28 per cent in the largest division, payment processing, as it rolled out new services and won customers in the US. The digital wallets business delivered similar growth as brisk trading was supplemented by punters betting on European football matches. And comparable revenues jumped 11 per cent in the prepaid segment - home to the paysafecard business acquired with Skrill - as it launched its services on new platforms including the PlayStation Store and in new countries such as Georgia.
Management expects the payment-processing business to benefit from its purchase of MeritCard, which has bolstered its US sales force and customer base. It also completed the integration of Skrill, leaving it on track to exceed its target of $40m in cost savings this year. The strong performance prompted it to raise guidance; it now anticipates up to $990m in sales and $293m in adjusted cash profits this year. Broker Deutsche Bank forecasts adjusted pre-tax profits of $235m, giving EPS of 40¢ this year (from $119m and 26¢ in 2015).
| PAYSAFE (PAYS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 420.4p | MARKET VALUE: | £2.0bn | |
| TOUCH: | 420-420.9p | 12-MONTH HIGH: | 440p | LOW: 241p |
| DIVIDEND YIELD: | NIL | PE RATIO: | 39 | |
| NET ASSET VALUE: | 240¢* | NET DEBT: | 33% | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 223 | 4.6 | 1.0 | nil |
| 2016 | 487 | 74.6 | 13.0 | nil |
| % change | +118 | - | - | - |
*Includes intangible assets of $1.58bn, or 328¢ a share £1=$1.31 | ||||
