Earthport (AIM: EPO.L), the leading network for cross¬border payments, is pleased to announce its unaudited interim results for the six month period ended 31 December 2016.
Financial Highlights
• Revenues grew by 34.9% to £14.3 million (H1 FY 2016: £10.6 million)
o Transactional revenues comprised 95% of H1 FY 2017 total revenues
• Gross profit increased by 33.8% to £9.9 million (H1 FY 2016: £7.4 million). Gross profit margin decreased by 0.6% to 69.2% (H1 FY 2016: 69.8%)
• Adjusted Gross Margin1 decreased by 3.1% to 70.4% (H1 FY 2016: 73.5%), due to increases in network costs but is in line with management expectations and those achieved in the financial year ended 30 June 2016
• Adjusted Gross Profit1 increased by 29.5% to £10.1 million (H1 FY 2016: £7.8million)
• Administrative expenses decreased by 7.8% to £13.0 million (H1 FY 2016: £14.1 million) and represent 90.9% of revenues (H1 FY 2016: 133.0%)
• Adjusted loss before taxation2 decreased by 52.2 % to £3.2 million (H1 FY 2016: £6.7 million)
• Loss before taxation decreased by 41.1% to £3.3 million (H1 FY 2016: £5.6 million)
• Loss per share of 0.61 pence (H1 FY 2016: 1.30 pence)
• Cash Balance at 31 December 2016 amounted to £11.4 million, compared to £14.4 million at 30 June 2016
1. Excludes warrant charge of £0.23 million (H1 FY2016: £0.38 million)
2. Adjusted loss before taxation is stated before the unrealised fair value gain adjustment of £0.94 million (H1 FY 2016: 1.3 million) and share based payment charge of £1.1 million (H1 FY 2016: 0.3 million)
Operational Highlights
• Transactions and payment volume grew significantly in the period with December 2016 setting a record month in the Company’s history
o Number of transactions reached 5 million, a growth of approximately 85% over the prior year period (H1 FY 2016: 2.7 million)
o Payment volume increased by 97% to $7.80 billion (H1 FY 2016: $3.95 billion)
* The variation in growth rates of number of transactions and revenues principally reflects the geographical mix of transactions and the associated variability in transaction price per corridor
o Revenue per transaction in the period was £2.70 (H1 FY 2016: £3.26)
• Bank of America Merrill Lynch (BofAML) CashPro® offering using the Earthport network went live in February 2017 as part of the broader strategic relationship with Bank of America Merrill Lynch
• In November 2016, Earthport announced the approval from the Reserve Bank of India to operate cross-border payment services for banks in India
o Axis Bank, India’s third largest private sector bank is the first bank in the region to connect with Earthport
Hank Uberoi, CEO of Earthport plc, commented:
"We accomplished a number of important developments in the six months under review, including expanding our strategic relationship with BofAML and gaining approval to provide outbound payment services for the extensive Indian market. The performance of the business in the past six months has been encouraging with a substantial increase in the number of transactions and payment volumes resulting in strong revenue growth. This positive momentum, coupled with our unique market positioning, gives us confidence in our continued growth and prospects."