Network Intl sees FY underlying net profit in line with market views

(Sharecast News) - FTSE 250 payments company Network International said on Monday that full-year underlying net profit is set to be in line with market expectations.
The company said its trading performance improved through the third quarter, with total revenue down 17% year-on-year compared with a 23% decline in the second quarter.

Network International said its balance sheet and liquidity remain strong and it will stay within its financial covenants. The group has a total liquidity position of around $300m, comprised of $190m in undrawn lending facilities and a cash balance of $110m.

It expects to deliver a revenue decline of 17% year-on-year, which is at the top end of its guidance range.

"With improved trading momentum, we have seen a pick-up in some revenue streams that are initially at a lower margin, but drive revenue delivery over the medium term," it said. "We therefore expect underlying net income in line with current market expectations."

Chief executive officer Simon Haslam said: "We are very pleased to see the continuation of more positive trading momentum through the third quarter, which reflects the easing of Covid-19 restrictions across our regions and improving consumer spending.

"This has been supported by the transition from cash to digital payments, where recent indicators point to an acceleration in this trend, which will benefit the size of the digital payments market and long-term growth potential. We have also seen improvement in new business momentum since the height of lockdowns; including growing our issuing services for bank customers; and the pace of online acquiring, where we are particularly pleased with recent merchant wins such as NowNow."

Still, while trends are improving, the company said it continues to monitor the outlook and ongoing impact from the pandemic, noting that a number of its bank customers are under financial pressure, particularly in Africa. This is creating some short-term delay to business activities.