Mi-Pay Group PLC Trading and client update and notice of interims (6308I)
12 Agosto 2019 - 8:00AM
UK Regulatory
TIDMMPAY
RNS Number : 6308I
Mi-Pay Group PLC
12 August 2019
The information contained within this announcement is deemed by
the Company to constitute inside information stipulated under the
Market Abuse Regulation (EU) No. 596/2014. Upon the publication of
this announcement via the Regulatory Information Service, this
inside information is now considered to be in the public domain
12 August 2019
Mi-Pay Group plc
("Mi-Pay", the "Group" or the "Company")
Trading update, update on existing client and notice of interim
results
Mi-Pay (AIM: MPAY), the leading provider of outsourced digital
transformation and mobile payment solutions, today provides an
update on trading in the year to date, one of the Company's major
clients and timings for its interim results.
Trading update
Trading for the first half of 2019 was broadly in line with
management's expectations, delivering a 15% increase in fully
managed payment transactions processed to GBP58.1 million (H1 2018:
GBP50.2 million) and successfully indemnifying GBP29.2 million of
payments for fraud (H1 2018: GBP17.2 million). This increased
revenues to GBP1.7 million for the period (H1 2018: GBP1.6
million). Gross profit margins remained strong at 63% and
administrative expenses were in line with prior periods. The
Company delivered an approximate breakeven EBITDA for the period
(H1 2018: GBP0.1 million EBITDA loss). Two major contracts were
renewed with clients representing 43% of the 2018 revenue during
the period and strong operational metrics were delivered.
As a result of uncertainties in the e-commerce payment market
with respect to the adoption of new European wider Payment Services
Directives (PSD2) in September 2019 and the current economic
climate, new business growth in the second half of the year is
expected to be slower than anticipated. As a result, trading for
the full year is expected to be behind current market expectations.
The Company has invested to ensure it continues to deliver
compliant solutions for its Clients and to take advantage of market
uncertainties in the coming period.
Client update
One of the Company's clients is a mobile network operator which
has been a customer of the Company for 12 years (the "Client"). The
Company provides payment and fraud management services to the
Client under a rolling contract and therefore there was a risk that
the revenues received under this contract could be lost with a
limited notice period. It has come to the attention of the Board of
Mi-Pay that, as a result of a rationalisation exercise, the Client
is likely to consolidate the services provided by the Company to
another provider. The Company does not know when this will occur,
however, should it becomes effective, it is expected that the
Company will no longer generate revenues from this Client going
forward.
In the year ended 31 December 2018, the Client accounted for
GBP0.5 million of turnover for the Group, equivalent to 13% of the
Company's revenue for that year and this level of revenue has
continued in 2019 so far. Until the Client ceases to utilise the
Company's services, it is not known what the financial impact of
the Client loss will be on the Company's trading for the current
year.
The Board will adjust the Group's budgets and spending
accordingly to mitigate the expected loss and will continue to
develop the relationships with its long-term contracted clients to
drive growth, remaining focussed as a Company on delivering
long-term profitable performance.
Notice of Interim Results
The Company will be announcing its Interim Results for the six
months ended 30 June 2019 on Wednesday, 25 September 2019.
Management will be hosting a presentation for analysts on the
day of results at 10:30 a.m. at Allenby Capital Limited, 5 St
Helen's Place, London, EC3A 6AB.
Analysts who wish to attend should register their interest with
Joscelin Pinnington, contactable at j.pinnington@allenbycapital.com
or 0203 328 5656.
Michael Dickerson, Chairman of Mi-Pay Group plc commented:
"We are pleased with the continued growth and performance in the
first half of 2019 and have invested in our solutions to ensure we
continue to deliver fully compliant services to our clients. Whilst
we are disappointed with the potential impact of the client loss,
we will focus on mitigating the loss of revenue and margin and
continuing the consistent growth we have delivered from our
existing client relationships. In addition, we believe we are well
placed to take advantage of the expected payment market
uncertainties and risks over the longer term with our technology
solutions and commercial flexibility."
For further information, please contact:
Mi-Pay Group plc Allenby Capital Limited
Tel: +44 207 112 Tel +44 203 328 5656
2129
Michael Dickerson, James Reeve
Chairman John Beale, Asha Chotai
CEO
About Mi-Pay Group
Founded in 2003, Mi-Pay Group plc delivers fully outsourced
online and related payment and fraud management solutions to
digital ecommerce clients, primarily in the mobile and digital
content sector. Its product offering provides the infrastructure to
enable pre-paid mobile devices to be topped up via a variety of
channels such as websites, mobile applications and social media
applications and customers include Mobile Network Operators (MNOs)
and Mobile Virtual Network Operators (MNVOs), additionally managing
and indemnifying the data security and payment fraud risks. Mi-Pay
sells, integrates and operates its products and solutions on a
global basis. For further information, please visit www.Mi-Pay.com
or contact details as shown above.
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END
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