Mi-Pay Group PLC (LON:MPAY), a leading provider of digital transformation and mobile payment solutions to Tier 1 Mobile Network Operators and Mobile Virtual Network Operators, has today presented its unaudited Interim Results for the six months ended 30 June 2017.
Operational Highlights
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During the period, Mi-Pay re-contracted with its largest client for an incremental three years. This is expected to secure existing revenues and drive material growth in payment transaction value processed from the €25 million processed in 2016 to a run rate of over €100 million per annum during 2018 as our Client integrates a recently acquired customer base. |
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New contract win in the Philippines to develop and deliver a new international payment service by early 2018. |
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Implemented a trial with a new European Client to deliver our first fraud as a service solution. |
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Continued to deliver operational excellence with high payment success rates and low fraud levels. |
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Successfully delivered annual PCI DSS level 1 accreditation for 2017/2018. |
Financial Highlights
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The total value of transactions processed in the period increased by 16% to £45.4 million versus H1 2016. |
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Total revenue recognised in the period £1.5 million (H1 2016: £1.6 million) as Mi-Pay increased its focus on long-term annuity based Transaction Services revenue growth, which grew by 12% to £1.4 million. (H1 2016: £1.2 million). Reduced non-recurring Professional Services revenues offset this during the period. |
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Mi-Pay delivered improved Transaction Services gross margin of 63% (H1 2016: 55%) as a result of increased volumes, improved commercial terms with our suppliers and strong operational performance. Total Gross profit remained flat at £1.0 million versus the same period in 2016. |
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Further investment in our infrastructure security and data encryption increased total administrative expenses to £1.3 million (H1 2016: £1.2 million). |
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Adjusted Operating Loss of £0.2 million for the period after excluding unpaid deferred salaries, depreciation and exceptional costs related to merger and acquisition reviews. |
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Cash & cash equivalents as at 30 June 2017 increased to £3.7 million (H1 2016: £3.4 million) as our growth in Payment Transactional Value Processed increased the levels of client funds held. |
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Net cash out flows from operating activities for the period, excluding movements in amounts due to clients, cash flow from financing and investing activities and one off exceptional expenditure was £0.2 million. (H1 2016: net cash outflow £0.1 million). |
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Cash outflow for the period was offset by receipt of £0.3 million in July 2017 for annual research and development tax credits. |
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Basic and diluted loss per share 0.8 pence (H1 2016: 0.6 pence loss per share). |
Seamus Keating, Chairman of Mi-Pay Group plc commented: “The Board continues to see good progress at all levels in the Group with increased transaction revenues and margin improvements supported by continued control of operating costs. This has enabled us to maintain cash balances above target and continue our focus on achieving profitability and stronger growth opportunities.
In the period, we secured and extended our existing seven-year relationship with our largest client for a further three years, which we expect to drive material revenue growth and profit over the life of the contract.
This investment, as announced previously, has reduced our non-recurring Professional Services revenues and the commercial terms within the new contract, will affect short-term Transaction Services revenues and margins as we integrate the new services and grow the transaction volumes. Thereafter we expect this to deliver long-term revenue and margin growth.
We are proving that our digital payment solutions and commercial flexibility is increasingly relevant in our market and we are becoming more important to our clients.”
