Shares in Earthport (EPO) fell by more than 5 per cent after the cross-border payments specialist reported double-digit revenue growth but expanding pre-tax losses for the year to 30 June. This stemmed from an unrealised fair value loss of £4.8m, against a gain of £8.2m seen a year earlier – attributed to lower derivative financial assets as at the year-end. The group notes any loss or gain would only be realised in the “unlikely event” that a party defaulted.
Transaction volumes of 11m looked impressive, up 67 per cent year on year, while payment volumes grew by 48 per cent to $17.5bn (£13.2bn). A focus on transactional growth goes some way to explain why the group didn’t meet its targeted cash flow break-even in 2017. House broker Shore Capital expects to see break-even cash profit by the end of FY2019.
Regionally, Earthport extended its work with Bank of America Merrill Lynch in the US, launching the ‘Cashpro’ service more widely. And, the Reserve Bank of India approved Earthport’s provision of outbound payment services – something previously only granted to banks.
Shore Capital’s analysts forecasts adjusted pre-tax losses of £9.4m and a loss per share of 1.2p for the year to June 2018, worse than the losses of £5.8m and 0.9p seen in 2017.
| EARTHPORT (EPO) | ||||
| ORD PRICE: | 18p | MARKET VALUE: | £110m | |
| TOUCH: | 18-18.25p | 12-MONTH HIGH: | 30p | LOW: 17p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 3.7p* | NET CASH: | £11.9m | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 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 |
| 2017 | 30.3 | -12.6 | -2.5 | nil |
| % change | +33 | +74 | +44 | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £7.8m, or 1.3p a share | ||||
