LONDON (Alliance News) - Mi-Pay Group PLC Wednesday said its pretax loss widened in 2014 as revenue fell due to the loss of a client and it booked the costs of listing on AIM last April, but it is planning to cut its losses and turn cash flow positive.
The payments company said its pretax loss widened to GBP4.8 million in 2014, compared with GBP1.9 million in 2013, as revenue fell to GBP2.7 million, which the company said was in line with expectations, from GBP3.3 million due to the loss of a client in 2013.
Mi-Pay makes money by processing transactions for clients and through professional services revenue.
Transaction services revenue fell to GBP2.0 million from GBP2.4 million, according to Mi-Pay, although adjusting for the termination of client contract in 2013 it rose to GBP1.7 million from GBP1.2 million. Professional services revenue fell to GBP665,354 from GBP914,388.
The group said that administrative expenses increased to GBP5.9 million from GBP3.6 million due to the costs of listing on AIM with the reverse takeover of cash shell AimShell Acquisitions PLC and improving its services, infrastructure and governance.
"We have invested in our product offerings, commercial proposition, technical solutions and global delivery capability and anticipate seeing the benefits of this demonstrated in 2015 with further transaction service revenue growth," Chairman Seamus Keating said in a statement.
The chairman said the group expects its adjusted operating loss, which widened to GBP2.9 million from GBP1.8 million, to narrow in 2015. The adjusted operating loss excludes expenses directly connected to listing on AIM, the reorganisation of the group and share-based payments.
"Our operating model review has delivered a significantly reduced and more flexible cost base for longer-term scalable growth which will be supported by the delivery of our new technology solutions and our insourcing of fraud management services, a key function of our product which should drive an increase in gross profits. This is expected to drive a significant reduction in the adjusted operating loss for 2015 and achieve positive cash flow in 2016," Keating said.
Mi-Pay shares were up 2.7% at 26.18 pence on Wednesday.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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