Investor Relations

Year-end earnings and annual report 2018

Financial Highlights

  • Total revenues grew by 5.3% to £31.9 million (FY2017: £30.3 million)
  • Core payment business revenues, which comprise payment transaction revenues and specifically attached foreign exchange (“FX”) revenues, were 1.6% higher at £19.6 million (FY2017: £19.3 million), reflecting the loss of a major payment partner during the year, significantly offset by increased volumes processed for other payment customers
  • FX business revenues, comprising spot and forward FX transactions conducted for customers separately from the core payment business, increased 6.3% to £10.2 million (FY2017: £9.6 million)
  • Professional services revenues, earned from the development of payment routes for specific customers, grew by 50% in the year to £2.1 million (FY2017: £1.4 million)
  • Gross profit was broadly flat year-on-year at £20.3 million (FY2017: £20.2 million), with a resulting fall in gross margin from 67% (FY2017) to 64%, due to increased cost of sales driven by higher transaction related banking costs
  • Adjusted operating loss (before share-based payments, exceptional items and fair value adjustments) increased by 33% to £8.4 million (FY2017: £6.3 million), driven by an increase in administrative expenses due to an increase in staff numbers and IT operational costs as a result of technology upgrade projects and investment spending to extend the Earthport payment network
  • Loss after tax decreased by 11% to £8.4 million (FY2017: £9.4 million), mainly due to the fair value gain of £0.8 million (FY2017 (restated): fair value loss of £2.4 million)
  • Cash and cash equivalents at 30 June 2018 of £28.3 million (FY2017: £11.9 million), following the capital raising in October 2017 of £24 million

 Operational Highlights

  • 4 new payment business customers added in the year
  • Payment business transaction volumes totalled 10.4 million (FY2017: 10.8 million), due to the loss of a single very large payment customer, offset by payment transaction growth in the rest of the customer base
  • Value of payments processed by payment business reduced slightly to £10.8 billion (FY2017: £11.3 billion)
  • Added new payment routes, including 18 countries in Africa and five new countries in Latin America, growing the network by 35% to 86 routes in total at period end
  • Obtained a New York transmitter licence, allowing the Company to develop new commercial opportunities in the US - additional State licence applications are in progress

 Post Period End Highlights

  • Appointment of new CEO, CFO and executive management team
  • Signed contract with BNPI, went live with Indusind Bank and expanded route usage for multiple key clients, recognising the unique payment capabilities Earthport is able to deliver and adding new transaction volume growth to the business
  • Monthly payment business transaction volumes now back above the previous highest recorded levels
  • 2 new payment routes have been enabled to existing customers with more to come in the current year as new routes become fully activated
  • Investment has continued in upgrading technology and building the organisational capabilities to allow Earthport to continue building scale in its core payment business
Click here to download the report.

Amanda Mesler, CEO of Earthport, commented:“Having been appointed as Earthport’s CEO in July this is my first report in this role. Taking on this new role my focus is to address Earthport’s challenges head on in a clear and transparent way and in doing so give Earthport the best opportunity to achieve the underlying potential I firmly believe it has.

“Since joining I have established a new Executive team which greatly improves our breadth and depth of experience. This team will enable us to rapidly implement the transformational growth strategy I have also put in place following a full strategic review. This strategy involves a redefined “go to market”, investment in our technology platform, capability enhancement and a new operating model for scale, all of which will strengthen our position as a global payments business.

“The financial year ending 30 June 2018 presented significant challenges for Earthport. Nevertheless, our core capabilities remain strong and our Company ended the year with a strengthened balance sheet, giving us the ability to invest in our redefined strategy. I therefore believe we are well positioned to deliver the potential Earthport has always possessed and look forward to the coming year with confidence.”