Earthport's revenue rises as European, North American transactions grow

Cross-border payment network Earthport’s revenue increased as investments during the year helped improve transaction flows in European and North American banks.

Revenue climbed 18% for the year ended 30 June, to £22.8m, compared to last year, while transactional revenues comprised 91% of total revenue.

The adjusted gross margin of 70% resulted in £15.9m gross profit, with cash at the end of June at £14.4m, as indicated in April.

Payment volumes increased 64% to more than $11bn and the company had a record number of transactions of 6.6m, up 89%, with £3.12 average revenue per transaction and a record run-rate in June of 8.5m, as the company gains traction with European banks.

In the US the company completed the integration of a top 10 global bank’s core payment processing platform into its network, while it expects to be granted state licensing in North America.

It has engaged with regulators in several countries with approvals in key Asian markets to originate outbound business.

The company executed the first cross-border transaction through a distributed ledger by a financial institution on behalf of a large European bank.

For the first three months of the 2017 financial year, the company processed 2.3m transactions up 91% from the same period last year, while it made £2.9bn payment volumes, up 110%. Revenues also increased 34% with transactional revenues comprising 95% of total revenues

Chief executive Hank Uberoi said the changes in the payments landscape are picking up speed, driven by trade and business flows and the impact of regulations and maintained that the company was well positioned to act as a facilitator of change in the cross-border payment market.

“The investments made during the 2016 financial year have improved traction with key European and North American banks and business enterprises, with volume growth continuing into the first quarter with a healthy pipeline."

He said the company still aimed to become cash flow positive during the fourth quarter of the next financial year.

Broker N+1Singer forecast a cash low of £10.3m in June 2017, "which should allay any investor concerns over the strength of the balance sheet".

Shares in Earthport were down 4.62% to 15.50p at 0942 BST.