LONDON (Alliance News) - Paysafe Group PLC on Friday said its processing division's North American business stood out amid broader growth across its products, enabling the online payments company to guide that results for 2015 will exceed previous market expectations.
Previously known as Optimal Payments PLC, the digital wallets and online payments processor has been making big strides since completing the acquisition of European e-wallet rival Skrill for a EUR1.1 billion enterprise value in August last year. Having been previously listed on London's AIM junior market, the acquisition of Skrill paved the way for a move to the Main Market in December and potential inclusion in the FTSE 250 index.
Paysafe, which helps online merchants such as bookmakers attract new customers and accept payments, now expects to report adjusted earnings before interest, tax, depreciation and amortisation of about USD150.0 million for 2015, with two-thirds of that amount coming in the second half of the year. Revenue is expected to amount to about USD600.0 million, with a similar percentage recorded in the second half.
The news sent Paysafe shares to an intraday high of 399.50, its highest level since mid-April, and the stock was up 7.9% at 391.00p shortly after midday on Friday.
"This has been a transformational year for our business. Revenue and underlying earnings have grown strongly and the Skrill acquisition significantly enhances our global scale. The group is now operating in more markets and geographies than ever before," Joel Leonoff, president and chief executive, said.
The rationale behind acquiring Skrill was rooted in enhancing the group's scale and reach, equipping the enlarged entity with the power it needs to compete in the markets for payment processing and digital wallets. Moreover, the combined group has made good progress on realising cost synergies offered by the acquisition.
Initially, the group guided that cost savings of USD40.0 million per annum would be targeted by the end of 2016, at a one-time cost of USD26.0 million, before revealing in November that integrating with Skrill was running ahead of schedule, meaning that between USD5.0 million and USD10.0 million of cost savings were to flow through by the end of the fourth quarter of 2015, one quarter earlier than expected.
On Friday, Paysafe said the costs savings would be towards the top end of that range.
"We are delivering on the targets we set ourselves as part of our strategy to create a payments powerhouse across digital wallets, payment processing and prepaid products and services. Our positive momentum, which continued through the fourth quarter, provides a strong foundation as we head into the new financial year," Leonoff said.
However, there are challenges ahead for Paysafe, according to Robin Speakman, an analyst at Shore Capital, who pointed to the issue of "integrating the platforms within the group under a single brand". The group's new global Paysafe brand identity was launched in November.
"The company also retains significant exposure to the non-regulated gaming industry, servicing client payments here. We also note rising completion in the industry, noting particularly that in stored value services that are increasingly a feature of web/mobile commerce," Speakman said.
Paysafe expects to report earnings for 2015 on Wednesday March 16.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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