LONDON (Alliance News) - Earthport PLC Thursday said its pretax loss narrowed in its last financial year, during which the payments company added 33 new clients and increased its expenditure as part of its growth plans.
In a statement, Earthport, whose clients include banks, money transfer companies and payment administrators, said it made a GBP6.3 million pretax loss in the year ended June 30, compared with a GBP8.1 million pretax loss in the previous year.
Revenue increased almost three times over to GBP10.8 million, driven mainly by transactional fees and also by professional services fees. The results also include eight months' contribution from Baydonhill, the specialist foreign exchange company acquired in November 2013.
Like-for-like revenue growth was 67%, Earthport said, with growth in the underlying business driven by payment transactions, as existing clients increase activity and as new customers go-live. It also cited minimum revenue contracts with partners and consulting engagements that generate professional services fees.
Administrative expenses increased to GBP14.4 million from GBP9.7 million, primarily due to the acquisition of Baydonhill and to increased personnel costs as the sales team and general headcount has been increased. Staff numbers were increased to coincide with Earthport's growth, it said, and to make sure it has the resources to cope with its increasing customer base, pipeline and projects underway.
Earthport's adjusted operating loss narrowed to GBP6.4 million from GBP6.5 million. The adjusted figure includes a GBP317,000 charge for warrants granted to Bank of America Merrill Lynch but excludes a GBP1.7 million share-based payment charge, an unrealised fair-value adjustment of GBP2.3 million arising on the year-end translation of unsettled transactions, and GBP439,000 in costs for the legal and professional services received as part of the Baydonhill acquisition.
Chief Executive Hank Uberoi said the strategy embarked on back in 2010 is now showing strong results.
"Over the last 18 months, Earthport has been investing in its people, technology, banking network, and operational infrastructure. At the same time, we have significantly accelerated our efforts towards client acquisition. Today, we are proud to be embarking on partnerships with some of the leaders in the banking industry, the global remittances industry and the e-commerce industry," Uberoi said in a statement.
"Our product positioning, extensive market opportunity and prospects within our global client base, provide us with ongoing confidence for accelerated growth going forward. Earthport is well positioned to achieve the status of being the de facto industry standard for global high volume payments in the coming years," Uberoi said.
Since the end of its last financial year, Earthport raised GBP26.6 million in a share placing with new and existing institutional investors, with a view to speed up its expansion into Asia, strengthen its balance sheet. Oppenheimer Funds Inc was the cornerstone investor in the fundraising.
"The strengthened balance sheet...will also further accelerate client acquisition and make regulators around the world more comfortable with the company's model and positioning. There are several revenue opportunities, such as US licencing and increased forward FX lines that will benefit from the stronger balance sheet where not all of them will involve an actual increase in the use of cash," Uberoi said in his business review Thursday.
Earthport shares were Thursday quoted down 2.2% at 44.25 pence.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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