The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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RNS just out - the AGM is on 22nd May and should be accompanied with a trading update as usual:
Https://www.investegate.co.uk/safecharge-int-grp/rns/notice-of-agm-and-annual-report---accounts/201904181300016625W/
Hi threeputt, Dar. I couldn't agree more - imo it's just the market. Perhaps a sub 3% holder decided to do some profit-taking or fundraising before the Dec 31st year end. We'll never know for sure! So best to have faith and not panic sell but instead top up on the dips if you have sufficient confidence.
Sometimes it just does Dar, not always an obvious reason, maybe mms just wanted to create a market before a rise knowing it was likely to be tipped, maybe a seller, maybe a bit of panic selling on top. In this particular instance it just gave us another topup opportunity although never nice at the time, hindsight is a wonderful thing !
I Welcome Rivaldos opinion also
Good morning rivaldo,
I purchased some shares in SCH towards the end of February and I certainly can't complain about the companies performance, the sp is showing that this is a very sound company and a very solid dividend structure is in place, the next dividend payment date is on the 24th May. As you say payments companies are "hot" at the moment and that will be the case for a few years. (I hope).
One question for you - please could you give me the reason (IYO) why the sp fell sharply in January, I have looked at the rns's at the time but could not establish and reason.
ATB
DAR
Good to se Robbie Burns (Naked Trader) buying more SCH as per his report last night:
"And... another buy in payments company Safecharge (SCH).
As I mentioned above I do like payments companies as they are in such a hot area of the market with plenty of market share to go for.
Safecharge also pays out a fantastic dividend since I've held it.
It must be a takeover candidate sooner or later even though it has one major shareholder."
Moving up almost every day now - hopefully back to 350p soon and then well beyond that.
and still going up nicely........
Good to see the price breach 300p - hopefully set for a run-up to prior highs of 350p or so.
Good morning rivaldo and Bazzaman,
Many thanks for the in-depth research and observations. Your views have helped 'settled' my nerves on the sp movement since final accounts were filed a few days ago.
Grateful somebody is watching this company, which I believed have true potential
Best wishes
DAR
Cheers Bazzaman - here's the full tip:
"Safecharge (SCH) continued its impressive growth story in 2018, delivering a 47 per cent increase in the number of transactions – to 255m – along with a 45 per cent increase in transaction value, to $13.9bn (£10.5bn), split evenly between new customer wins and existing clients.
Investors might question how long the secure payments specialist can maintain such growth, but transaction values have consistently expanded since it floated on the Alternative Investment Market (Aim) in April 2014 and the group has “enjoyed an excellent start to 2019”. Management said the size of the addressable market is $3trn-$4trn, and though there is no shortage of players in the sector, there is still plenty of room for growth.
It plans to do this by focusing on new markets and verticals, as well as continuing to sign up large “tier one” customers to its fully-serviced payments platform. In the year, Safecharge opened offices in Shenzhen and Mexico and signed up tier one clients in a range of industries, but it came at cost, as the gross margin deteriorated by 450 basis points to 53.3 per cent.
Bloomberg puts the consensus adjusted EPS forecast at 20.9¢, an increase of 24 per cent from the 16.8¢ achieved in 2018.
IC View
These results validate the view that Safecharge is well placed to expand within a burgeoning marketplace, but the margin contraction shows that profitability will occasionally be constrained by the rapidity of that expansion. Net cash equals 16 per cent of group market cap, strip it out and the enterprise/cash profit multiple is in line with the historical rating, but we think the growth will prompt a re-rating when the one-off costs are fully absorbed. Buy."
These results validate the view that Safecharge is well placed to expand within a burgeoning marketplace, but the margin contraction shows that profitability will occasionally be constrained by the rapidity of that expansion. Net cash equals 16 per cent of group market cap, strip it out and the enterprise/cash profit multiple is in line with the historical rating, but we think the growth will prompt a re-rating when the one-off costs are fully absorbed. Buy.
sell on news day, give it a few days
not sure the market agrees with us! Currently down 4%+
"We are only at the beginning of our journey"
agreed. very good results and positive forecast for 2019.
Cash down 15% but that is probably investment in growth
Dividend growing nicely
These look good, solid results - and the guidance for 2019 is similarly good, being roughly 15% revenue growth and 10% EBITDA growth.
The divi of around 14p is almost 5%, and SCH still have almost $100m in the bank.
The outlook is nicely bullish:
"Current trading
Building on the record revenues and transaction processing volumes achieved in Q4 2018, the Group has made an excellent start to 2019 with a strong sales pipeline in both existing and new verticals.
Outlook
The Directors look forward with confidence to 2019 and beyond."
Excellent news - SCH are entering the Digital ID validation space:
Https://www.finextra.com/pressarticle/77176/safecharge-launches-identity-manager-for-digital-id
"SafeCharge launches Identity Manager for digital ID
05 February 2019
SafeCharge (AIM: SCH), the partner of choice for businesses who demand more from payments technology, today announced the launch of Identity Manager, an innovative solution for seamless automation of digital Identity Validation.
With identity verification being one of the thorniest challenges for online businesses, Identity Manager streamlines complex background checks in a fast and cost-effective manner.
With over ten years of expertise in highly regulated payments markets, SafeCharge has designed Identity Manager as an agnostic gateway enabling merchants to connect to a wide range of identity validation providers worldwide, including eKYC, document verification as well as age verification, PEP and sanction checks. SafeCharge Identity Manager is fully incorporated into the SafeCharge Native+ Payments Engine; and is therefore easy to implement as part of SafeCharge Hosted Payment Pages as well as through dedicated APIs.
The solution automates customer verification flows, cleverly re-routing checks to an alternative provider should one be unsuccessful. In case of a failed eKYC check, customers are invited to upload their documents and get verified using a mobile phone or a desktop for the utmost security. Check flows can also be customised according to customer geographical location as well as business and sector requirements.
Identity Manger is addressed to those online businesses for which identity validation checks are a mandatory requirement subject to industry regulation, or required by businesses on their own. These include not only gaming, financial services and marketplaces, but also insurance and telecoms providing digital online services.
Yuval Ziv, CCO SafeCharge, explains: “The beauty of Identity Manager is that with one single contract and one unified reporting interface, businesses can stay ahead of customer authentication regulation requirements and prevent fraudulent transactions using the relevant local identity validation checks wherever their customers are.” He added: “SafeCharge runs the smart routing logic between check providers which provides a huge time saving and ensures the smooth operation for our customers”.
SCH are to move into the regulated gaming market in the USA - this looks really good given the huge potential (see GAN for this too):
Https://www.onlinecasino.co.uk/news/2019/01/safecharge-to-conquer-us-gaming-market/
Interesting conclusion:
"However, what SafeCharge is able to do through its partnership with Mazooma is verify a user’s age, location, identity and credit rating.
Although this technology isn’t unique, SafeCharge’s entrance to the US market should help the fight for regulation. With states and operators preparing to push back against the Wire Act, tech innovation will only bolster their defence. With that being the case, SafeCharge’s move into the US could benefit more than its shareholders."
Interesting article from a CMO at SCH about the new payments landscape and SCH's solutions:
Https://www.thepaypers.com/expert-opinion/2019-payment-managers-take-the-lead-and-break-vendor-lock-in/776979
"2019: Payment managers take the lead and break vendor lock-in
Monday 21 January 2019 | 08:18 AM CET
I expect over 300 tomorrow then onwards to over the 12m high in short space. Best luck all..
From Robbie Burns blog today:
"Safecharge (SCH) shares have charged higher on a tip of the year and comments from a top fund manager plus a very
strong trading statement today. There is also the very large dividend and it has a shed load of cash. Hoping for a return to well over 300p for Safecharge soon."
When you look at the trading today 3 buys out of a page full of sells and I know my buy was listed as a sell then it seems that the M M s are trying to fill a big buy order. Is there a takeover on the cards? Only my guess dyor.
Very positive update and sounds encouraging for the coming year, at some point I am sure they will have something in mind for that cash pile to expand the company.
Thanks for the explanation.
Mike, the mms allowed the share price to rise sharply yesterday after the Daily Telegraph tip, very often they slowly pull the rug over the next few days to scare the inexperienced out. There was a very positive trading update today but even so it could still slip slightly before rising over the long term, it's a good long term bet imo and the dividend will help too
Lots of sells and no buys but my buy of £12k at 08.12 is shown as a sell?