Earthport sees revenues grow as payments network expands

Cross-border payments network Earthport issued an unaudited trading update for the six months ended 31 December on Thursday, reporting 8% growth in revenues over the prior year to £15.4m.

The AIM-traded firm said its adjusted gross margin decreased by 9% to 64%, compared to 70% in the first half of 2017, which the board put down to network delivery costs and mix of business.

Administrative expenses increased by approximately 7% to £13.9m, representing 90% of revenues, compared to 91% in the prior comparative period.

Its adjusted EBITDA loss increased by approximately £1.7m to £3.2m.

The company’s cash balance at 31 December amounted to £30.6m, compared to £11.9m at 30 June, including net proceeds of £24m raised in October.

On the operational front, Earthport said the monetary value of transactions processed increased by 11% to $8.7bn, with the total number of transactions in line with the first half at approximately five million.

That included a recent change at one of the company’s leading e-commerce clients announced in December, and excluding that, transactions were up 11%.

Banking networks stood at at least 65 for local delivery and 200 in total, Earthport reported.

Average revenue per transaction reached £2.87, compared to £2.64 a year earlier, with the board explaining that the figure had risen due to the discontinuation of the low value e-commerce UK business.

“The new business pipeline remains strong whilst transactions from existing customers are growing year-on-year in excess of 10%,” Earthport’s board said of its outlook.

“The emerging focus on new technologies such as distributed ledger highlights the strategic nature of Earthport's assets, which will be key to the ability of these technologies to provide delivery of cross-border payments.”

It said the first of its initiatives in distributed ledger was expected to go live with a global bank in the current half-year.

“We anticipate 2018 revenues to be in line with revised market forecasts,” the board stated.

“We also remain on track to deliver cash flow break even during the 2019 financial year.”

Earthport said full interim results for the six months ended 31 December would be announced on 27 March.