NETW.L Share News (NETW)

(Alliance News) - Network International Holdings PLC on Monday lowered its 2020 revenue guidance and said it expects to report a drop in interim revenue following a weak second quarter.

The London-headquartered payments solutions provider is forecasting total half-year revenue of between around USD133 million and USD134 million, with a broadly flat first quarter and a 23% revenue drop in second quarter.

This interim guidance is expected to reflect a "gradual recovery" from its Merchant Solutions business through June and the "relatively more resilient" performance of Issuer Solutions.

FTSE 250-listed Network International also updated its annual guidance for 2020 to reflect a 17% to 20% decline in annual revenue compared to 2019's figure of USD334.9 million.

"In the Middle East, we anticipate a gradual recovery of domestic spending through the second half but little return of international spending. In Africa, whilst the business is more focused towards Issuer Solutions, the WHO has indicated Covid-19 has yet to peak and we therefore expect to see further pressure on card issuance and transaction volumes," said Network International.

The company said its liquidity and balance sheet are still "strong" and is is on course to stay well within its financial covenants. It is also planning to go ahead with its Saudi Arabia expansion and on-soil data centre deployment once it become practical to do so.

Chief Executive Simon Haslam said: "We have continued to focus on supporting our customers and colleagues through this period. We have enabled online payments for a large number of merchants through our proprietary N-Genius gateway, and have a strong pipeline of demand. Whilst Covid-19 is causing some short term disruption, we are fortunate to be operating in high growth and fragmented digital payments markets, where we are seeing signs of an acceleration in underlying trends and the long term opportunity remains significant.

"As the only independent payments processor of scale across our regions, we are best positioned to capitalise on these opportunities, which means we continue to pursue new customers, continue discussions with banks in regard to outsourcing, and scan the market for selective acquisition opportunities. There is much to be excited about and we remain confident in the industry fundamentals and our strategic approach, which remains unchanged."

Shares in Network International were down 0.1% at 451.80 pence in London on Monday morning.

By Anna Farley; annafarley@alliancenews.com

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