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NETeller posts pre-close period update

10 July 2006  |  1208 views  |  0 Source: NETeller

NETELLER Plc (LSE: NLR), a leading online money transfer service provider, today makes the following statement in advance of entering into a close period prior to the publication of its interim results for the half year ended 30 June 2006.

The continued demand for NETELLER's online payment services experienced in 2005 carried over into the first half of 2006. We have added more than 500,000 new customers since the year end with our customer base increasing from 2,320,670 customers at 31 December 2005 to 2,909,190 customers at 30 June 2006. In the first half of 2006, our average daily receipts from customers grew 56 % to $4.68 million ($4.69 million in Q1 and $4.66 million in Q2) which compares to $3.0 million in the same period in 2005.

Average daily sign-ups of new customers increased by 19 % to 3,251 in the first half of 2006 (3,609 in Q1 and 2,898 in Q2) compared to 2,732 in the first half of 2005. Growth in new customer sign-ups has historically been strongest in the first and third quarters although the decline in the average daily sign-up rate we experienced in Q2 2006 was more pronounced than in previous years.

Revenue for the quarter ended 30 June 2006 is expected to be in line with our house broker's forecasts. Gross margin in Q2 2006 will be impacted by slightly higher than expected bad debts. Cost pressures highlighted in Q1 2006 relating to our Calgary operations have remained a factor in Q2 2006. These additional costs will, to a large extent, be offset by one-off gains in foreign exchange and a lower than anticipated tax charge for the quarter.

The expansion of our customer base in this period has been accompanied by growth in our merchant base which exceeded 3,500 as at 30 June 2006. In this period we have added a number of major merchants, particularly in Europe, including Paddy Power, Unibet, UK Betting, Nordicbet and PKR.com. We continue to attract new online gaming and target selected non-gaming related merchants by providing trusted, secure and innovative payment services while improving our offering to both merchants and customers through added geographic coverage and product functionality.

Since 14 June 2006, the Company has purchased 800,000 of its own shares in the market for a total cost of £4.6 million for cancellation. These purchases are part of the Company's ongoing opportunistic buy back programme.

NETELLER's interim results for the period ended 30 June 2006 are expected to be announced on Monday 11 September 2006.

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