Network International's (NETW) pre-tax profits slumped 90 per cent in the first half, as the payments company grappled with a pronounced decline in consumer spending.
Issuer solutions, its biggest line of business, saw revenue dip 3.5 per cent in the period. Although the slowdown in the segment is starting to ease, management flagged that seasonality was likely contributing to early signs of a recovery. Indeed, the company noted that although underlying transaction volumes had improved in July in the Middle East, its primary market, it has not translated into revenues yet.
Meanwhile, the pace of point-of-sale (‘POS’) merchant signings returned to normal levels, and online gateway signings have been rising, with around 950 new clients this year. Indeed, the group’s online segment has fared better than the rest of the business. E-commerce volumes (excluding government and airlines) grew by almost half in the second quarter year on year, with rates persisting during July, coming in at 61 per cent.
The company announced last month that it is on track to acquire DPO Group, an online commerce platform in Africa for around $288m (£219m.) Management noted that it expects to complete the deal by the end of 2020.
Factset consensus places EPS at 7.46¢ per share in the year ended in December 2020, rising to 12.61¢ in 2021.
| NETWORK INTERNATIONAL (NETW) | ||||
| ORD PRICE: | 424p | MARKET VALUE: | £2.3bn | |
| TOUCH: | 424-425p | 12-MONTH HIGH: | 650p | LOW: 320p |
| DIVIDEND YIELD: | nil | PE RATIO: | 66 | |
| NET ASSET VALUE: | 42¢* | NET DEBT: | 130% | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
| 2019 | 152 | 18.9 | 3.15 | nil |
| 2020 | 134 | 1.9 | -0.03 | nil |
| % change | -12 | -90 | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of $450m, or 82¢ a share £1=$1.32 | ||||
