15 Feb 2018 07:00
15 February 2018
Earthport plc
("Earthport" or the "Company")
Unaudited Trading Update for the period ended 31 December 2017
Earthport (AIM: EPO.L), the leading payment network for cross-border payments, is pleased to provide an unaudited trading update for the six month period ended 31 December 2017 ("H1 FY 2018").
Financial Highlights
· Revenues grew by approximately 8% to £15.4 million (H1 FY 2017: £14.3 million)
· Adjusted gross margin decreased by 9% to 64% compared to 70% in H1 FY 2017, due to network delivery costs and mix of business
· Administrative expenses increased by approximately 7% to £13.9 million (H1 FY 2017: £13.0 million), representing 90% of revenues (H1 FY 2017: 91%)
· Adjusted EBITDA loss increased by approximately £1.7 million to £3.2 million (H1 FY 2017: £1.5 million)
· Cash Balance at 31 December 2017 amounted to £30.6 million, compared to £11.9 million at 30 June 2017. This includes net proceeds of £24 million raised in October 2017
Operational & Transactional Highlights
· Monetary value of transactions processed increased by 11% to $8.7 billion (H1 FY 2017: $7.8 billion)
· Number of transactions in line with H1 FY 2017 at approximately 5 million
o This includes a recent change at one of our leading e-commerce clients announced in December. Excluding that, transactions were up 11%
· Banking networks stand at 65+ for local delivery (200+ in total)
· Average revenue per transaction of £2.87 (H1 FY 2017: £2.64). This figure has risen due to the discontinuation of the low value e-commerce UK business
Summary
Whilst there have been challenges in H1 FY 2018, we are confident that our core services remain strong and are of increasing importance in the changing payments landscape. We have delivered continued growth in revenue against the same period in the previous year, despite the setbacks outlined in the December 2017 announcement. We are confident that in H2 FY 2018 and FY 2019 we will see the realisation of revenue against a strong pipeline of opportunities as we continue to deliver against our long-term strategy to be the leading global cross border payments utility.
Our balance sheet is strong with £30.6m of cash supporting our continued growth and long-term strategy. We are investing in further growth in our global sales functions, product enhancements and technology with a clear focus on delivering a reduction in our operational costs through innovation and further automation.
The new business pipeline remains strong whilst transactions from existing customers are growing YoY in excess of 10%. The emerging focus on new technologies such as distributed ledger highlights the strategic nature of Earthport's assets, which will be key to the ability of these technologies to provide delivery of cross-border payments. The first of our initiatives in distributed ledger is expected to go live with a global bank in this half.
We anticipate FY 2018 revenues to be in line with revised market forecasts. We also remain on track to deliver cash flow break even during FY 2019.
Full interim results for the six months ended 31 December 2017 will be announced on Tuesday, 27th March 2018.
For further information, please contact:
Earthport Plc 020 7220 9700
Phil Hickman, Chief Executive Officer (Interim)
Hank Uberoi, Executive Chairman
Newgate 020 7653 9848
Bob Huxford/James Ash
N+1 Singer (Nomad & Joint Broker) 020 7496 3000
Mark Taylor/James White
Shore Capital (Joint Broker) 020 7408 4090
Toby Gibbs/Stephane Auton
About Earthport
Earthport provides cross-border payment services to banks and businesses. Through a single relationship with Earthport, clients can seamlessly manage payments to almost any bank account in the world, reducing costs and complexity to meet their customers' evolving expectations of price, speed and transparency.
Earthport offers clients access to global payment capability in 200+ countries and territories, with local ACH options in 65+ countries and an evolving suite of currencies and settlement options.
Earthport continues to invest in the establishment of in-country bank partnerships across the world, bringing together its deep market and regulatory expertise in order to maintain compliant and commercially competitive services.
The result - a global payments network accessed via a single relationship, delivering significant cost and operating efficiencies for banks and businesses servicing high volumes of lower value payments.
Headquartered in London with regional offices in New York, Dubai, Miami and Singapore, Earthport is a public company, traded on the London Stock Exchange (AIM: EPO) with an institutional investor base including World Bank IFC, Oppenheimer, Blackrock, Henderson.
Please visit www.earthport.com for more information.