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Network International cites Saudi progress

Has taken a volume hit in recent weeks because of reduced global travel
March 9, 2020

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.

IC TIP: Hold at 453p

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:498.5pMARKET VALUE:£2.49bn
TOUCH:498-499p12-MONTH HIGH:656pLOW: 418p
DIVIDEND YIELD:0.5%PE RATIO:57
NET ASSET VALUE:48¢*NET DEBT:114%
Year to 31 DecTurnover ($m)Pre-tax profit ($m)Earnings per share (¢)Dividend per share (¢)
2016**23555.5--
2017**26286.3--
201829857.75.2-
201933565.611.53.1
% 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