Mi-Pay Group plc (LON:MPAY), a leading provider of digital transformation, mobile payment and payment fraud management solutions to Tier 1 Mobile Network Operators, Mobile Virtual Network Operators and digital content providers, has today presented its unaudited Interim Results for the six months ended 30 June 2018.
Operational Highlights
· Successfully integrated into our largest client’s new infrastructure following our contract extension in 2017. This is expected to drive stronger payment transaction growth in H2 2018.
· Direct fraud management service developed and extended with our new European client.
· Continued to deliver operational excellence with high payment success rates and low fraud levels.
· Renewed 5 year lease for core transaction processing infrastructure, commencing in July 2018 and new 3 year terms for our global PCI accredited data centre infrastructure commencing in August 2018. The Board expect this to reduce annual costs by £0.2 million from August 2018 whilst delivering enhanced business continuity, security and scalability.
· Successfully delivered annual PCI DSS level 1 accreditation for 2018/2019.
· March 2018 restructure and placing, improving financial position and performance. Michael Dickerson assumed the role of Executive Chairman, John Beale to Chief Executive Officer and Seamus Keating to continue as an independent Non-Executive Director. John Beale will continue his duties as Chief Financial Officer in the interim until a suitable successor is appointed.
Financial Highlights
• The total value of payment transactions processed in the period increased by 11% to £50.2 million versus H1 2017. As at 31 August 2018, the Group was processing over £112 million payment transactions on an annualised basis.
• Indemnified an additional £17.8 million of payments for fraud during the period as a new product stream. (H1 2017: Nil). This delivered new revenues of £0.1 million for the 6 month period to 30 June 2018.
• Total revenue recognised in the period £1.6 million (H1 2017: £1.5 million).
• Total Gross margin remained strong at of 62% (H1 2017: 63%) despite the reduction in average revenue per transaction due to new pricing with our largest client. Total Gross profit remained flat at £1.0 million versus the same period in 2017.
• £0.2 million reduction in administrative expenses to £1.1 million (H1 2017: £1.3 million) during the period following the Board restructure in February 2018 which will continue (£0.1 million) and reduced expenditure on non-recurring exceptional items (£0.1 million).
• Operating loss of £0.1 million for the period (H1 2017: £0.3 million).
• Net assets increased from £nil at 31 December 2017 to £0.4 million as at 30 June 2018 following the Board restructure, conversion of previously deferred salary to ordinary shares and investment in March 2018 (£0.5 million), partly offset by losses in the period.
• Cash & cash equivalents as at 30 June 2018 increased to £3.1 million from £2.9 million at 31 December 2017 as payment transaction volumes grew.
• Operational cash outflow for the period of £0.3 million was offset post period end by the receipt of £0.3 million in August 2018 for annual research and development tax credits.
• Basic and diluted loss per share 0.3 pence (H1 2017: 0.8 pence loss per share).
Michael Dickerson, Chairman of Mi-Pay Group plc commented:
“The Board is pleased with the performance in 2018 to date and broadly in line with expectations. Real progress has been made in underpinning our move to profitability with growth within our existing customers and new fraud management services, supported by strong operational performance and further cost reductions during the period. This has delivered a material reduction in losses for the period in line with our expectations. With further revenue growth delivered from our largest client and contracted cost savings from August 2018, we seek to move towards profitability in H2 2018, underpinned by our improved financial position and stability.
Our digital payment, fraud and security solutions, expertise and commercial flexibilities are increasingly relevant in our market and we are becoming more important to our clients as their customers naturally move to digital channels. Crucially, whilst demonstrating an ability to deliver major client deliverables in our Mobile Operator market we have now demonstrated an ability to break out from this vertical market to wider geographical, digital content fraud services markets.”
