Worldpay's (WPG) half-year results hardly moved the group’s share price, despite double-digit top line growth and an improved dividend. The restrained market reaction should be seen in the context of merger talks with US-based payments company Vantiv (us:VNTV), first announced just over a month ago. To coincide with these results, Vantiv announced that the two companies’ boards have agreed the terms of a recommended merger: for every Worldpay share held, 55p in cash will be awarded along with 0.0672 of a new Vantiv shares. Should the merger go ahead as planned, Worldpay shareholders will own 43 per cent of the combined business – an improvement on the earlier proposition of 41 per cent.
Worldpay processed 7.7bn transactions, up from 7.2bn in the first half of 2016 and equivalent to £241.4bn. While revenue grew considerably, lower pre-tax profits were attributed in part to the prior period's boost from the sale of Visa Europe shares to Visa Inc. As a result, net finance income fell from £208.7m to £56.7m. The dividend rose by 23 per cent and, should the merger go ahead as planned, Worldpay shareholders will receive a special dividend of 4.2p.
Analysts have suspended their forecasts due to the merger situation.
| WORLDPAY (WPG) | ||||
| ORD PRICE: | 382.8p | MARKET VALUE: | £ 7.66bn | |
| TOUCH: | 382.6-382.8p | 12-MONTH HIGH: | 435p | LOW: 256p |
| DIVIDEND YIELD: | 0.6% | PE RATIO: | 46 | |
| NET ASSET VALUE: | 44p* | NET DEBT: | 147% | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 2.14 | 169 | 2.9 | 0.65 |
| 2017 | 2.51 | 129 | 4.7 | 0.80 |
| % change | +18 | -24 | +62 | +23 |
| Ex-div: | 28 Sep | |||
| Payment: | 23 Oct | |||
| *Includes intangible assets of £2.15bn or 108p per share | ||||
