Michael Dickerson, Chairman of Mi-Pay, commented: “Delivering underlying profitability in the second half of 2018 was a key target for Mi-Pay and we are pleased to have achieved this important milestone. The improved performance seen in H2 2018 was a result of delivering a new revenue channel for payment fraud management through the leverage of our in-house technology, a continuing reduction of our operating cost base and strong growth across our existing clients. We expect to see this growth continue as the e-commerce and digital channels increasingly become our clients’ core strategic focus for customer engagement and our new fraud management services continue to expand.”
Mi-Pay Group Plc (LON: MPAY), the leading provider of outsourced digital transformation and mobile payment solutions, today provided a trading update for the year ended 31 December 2018.
– Trading for the year was in-line with market expectations, with increased year-on-year revenues.
– Group operated profitably before interest, tax and depreciation in the second half of the year.
– Increased payment transaction values processed to £106 million during the year (2017: £94 million).
– Full year operating loss reduced to £0.2m (2017: £0.6m loss).
Trading for the year ended 31 December 2018 was in line with market expectations, with total revenue for the year expected to be £3.3 million (2017: £3.0 million). The Company has continued to experience strong growth in transactions, delivering an increase in payment transaction values processed during the year to £106 million (2017: £94 million). In addition, the Company successfully indemnified over £43 million of payment transactions for fraudulent activity during the period, using its proprietary payment fraud solution, resulting in new revenue of £0.3 million for the Group. This was achieved whilst maintaining high payment success rates and low fraud levels, which is expected to maintain gross margins of above 60% for the year.
The Company has also delivered further year-on-year reductions in administrative expenses which, when combined with the revenue growth, is expected to result in a reduction in operating loss to £0.2 million (2017 operating loss: £0.6 million). During the six-month period to 31 December 2018, Mi-Pay delivered a profit before interest, tax and depreciation.
The Company’s cash position at 31 December 2018 increased to £3.5m from £2.9m as at 31 December 2017 due to the increase in payment transactions processed. £2.9m of this balance related to the management of client payments. The closing cash position as at 31 December 2018, excluding client payment balances was £0.6m, equivalent to the closing 2017 balance.
Appointment of CFO on a part-time basis
On 29 January 2019, the Company appointed Andrew Bowen as Chief Financial Officer on a part-time basis (a non-Board role) to support the Board and management team in its governance and development. Andrew has previously held finance director roles at a number of technology telecommunications businesses. He is a Principal with the FD Centre Ltd and his services are supplied under contract with that company.