Hoodless Brennan broker recommend12 Nov 2009 17:12
Planet payment (PPT, 85p, £21.5m). The company gave its Q3 and YTD statement this morning. For the nine months to 30 September 2009 total revenue increased 35% to $33.0m (YTD:2008: $24.4m) led by new merchant deployments with banking partners in China, Taiwan, India, and North America. Revenue from multi-currency processing services increased 40% to $22.6m (2008: $16.2m). Processing services increased 26% to $10.3m (2008: $8.2m) primarily due the 2008 acquisition of the iPAY North America business. Turning to the third quarter growth continued, albeit at a slower rate. For Q3 period total revenue increased 16% to $11.7m (Q3:2008: $10.2m). Third quarter total transaction volume was of over $528m, up 11% over the same period in 2008 (Q3:2008: $477m). Gross profit rose 29% to $4.1m (Q3:2008: $3.2m). It is particularly pleasing to see the decline in operating expenses which fell by more than 16% to $4.6m, (Q3:2008: $5.5m), while cash operating expenses declined 14% to $3.9m (Q3:2008: $4.6m). Even a static result combined with a rise in sales would be good evidence that the company is receiving traction so this reversal is a positive. However the company was still tight on cash and needed to raise further equity in October but these pressures should abate as it becomes cash flow positive. Having addressed its cost base the company was EBITDA positive for a second quarter and reduced net Loss by 69% to $0.8m (Q3:2008 loss: $2.6m) a run rate that should see it turn profitabl