Earthport losses widen as admin costs weigh on margins

Cross-border payment network Earthport saw revenues improve 5.3% to £31.9m in its last trading year, but increased admin expenses and narrowing gross margins led the firm to a deeper loss.

Gross profit was broadly flat year-on-year at £20.3m but gross margins contracted 30 basis points to 64% as a result of increased sales costs.

Adjusted operating losses widened 33% to £8.4m on the back of an increase in administrative expenses due to higher staffing numbers and IT operational costs associated to technology upgrade projects and investments into extending the group's payment network.

Earthport's core payment business revenues increased just 1.6% to £19.6m after an unnamed "major payment partner" reduced volumes "materially".

FX revenues rose 6.3% to £10.2m and professional services revenues grew 50% to £2.1m.

Chief executive Amanda Mesler, said: "The financial year ending June 30 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."

Looking forward, Earthport expects transaction volumes to continue increasing in the new year.

As of 1030 GMT, Earthport shares had advanced 3.07% to 6.38p.