It is no secret that global travel is taking a massive hit from the coronavirus outbreak. Spending patterns are also being disrupted. Thus, while Network International (NETW) benefits from geographical diversification, the group – which provides payment services across the Middle East and Africa – has still endured a fall in client transaction volumes in recent weeks.
The total impact of the virus remains uncertain for now. In any case, for 2019 – Network’s first set of full-year results since going public last April – total processed volumes were up by a tenth to $43.8bn (£33.7m). The total number of transactions was also up by a tenth to 752m. Revenues in the Middle East rose by 9.2 per cent, fuelled by more transactions and cross-selling, while African revenues climbed by more than a fifth.
The group cited progress made in entering Saudi Arabia – one of the largest payments markets in the Middle East. Currently, digital payments constitute around 9 per cent of transactions in Saudi Arabia – and the Government 2030 vision seeks to increase this to 70 per cent.
Bloomberg consensus estimates are for adjusted EPS of 24¢ in 2020, up from 21¢ in 2019.
NETWORK INTERNATIONAL (NETW) | ||||
ORD PRICE: | 498.5p | MARKET VALUE: | £2.49bn | |
TOUCH: | 498-499p | 12-MONTH HIGH: | 656p | LOW: 418p |
DIVIDEND YIELD: | 0.5% | PE RATIO: | 57 | |
NET ASSET VALUE: | 48¢* | NET DEBT: | 114% |
Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
2016** | 235 | 55.5 | - | - |
2017** | 262 | 86.3 | - | - |
2018 | 298 | 57.7 | 5.2 | - |
2019 | 335 | 65.6 | 11.5 | 3.1 |
% change | +12 | +14 | +121 | - |
Ex-div: | 10 May | |||
Payment: | 28 May | |||
*Includes intangible assets of $500m, or 89¢ a share **Pre-IPO figures £1=$1.31 |