A £5m loss created after a client of its Baydonhill subsidiary reneged on payments counterbalanced strong growth in transaction volumes at Earthport (EPO) in the reported period. The cross-border payments group revealed solid top-line growth, but increased costs and the Baydonhill loss offset a positive revalution of forward FX contracts, increasing the operating loss by 2 per cent to £8.1m.
Several of the world's largest banks, payment groups and money transfer organisations use Earthport's platform to conduct low-value international transactions. Management's focus on signing new customers and ramping up volumes with existing clients fuelled an 89 per cent increase in the number of transactions to a record 6.6m, driving payment volumes up almost two-thirds to over $11bn (£9bn).
Earthport worked with blue-chip customers in the US and Europe. It also landed a large Japanese bank and inked preliminary deals with major banks in India, Indonesia and other emerging markets. Its progress has continued: year-on-year transaction volumes surged 91 per cent in the first three months of this financial year, driving revenue up by a third.
Broker N+1 Singer expects an adjusted pre-tax loss of £4.2m for the full year, giving a loss per share of 0.8p, compared with losses of £10.4m and 2.4p in FY2016.
| EARTHPORT (EPO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 15.8p | MARKET VALUE: | £75m | |
| TOUCH: | 15-16p | 12-MONTH HIGH: | 41p | LOW: 11p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 6.4p* | NET CASH: | £14.4m | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 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 |
| 2016 | 22.8 | -7.2 | -1.7 | nil |
| % change | +18 | - | - | - |
*Includes intangible assets of £9m, or 1.9p a share | ||||
