Mi-Pay Group (LON:MPAY), a leading provider of digital transformation, mobile payment and payment fraud management solutions to Tier 1 Mobile Network Operators, Mobile Virtual Network Operators and digital content providers, has today presented its unaudited interim results for the six months ended 30 June 2019.
Michael Dickerson, Chairman of Mi-Pay Group commented:
“In the six-month period to 30 June 2019, we delivered further growth as consumers transferred to our on-line digital payment services, building on our previous periods of growth to EBITDA profitability. We are pleased to have further supported this by extending two of our major contracts and expect these clients to increase their volumes over the longer term. Our growth has enabled us to maintain our EBITDA break-even position for the 12 months to 30 June 2019.
We have continued to invest in delivering new market compliance regulations and are well placed to take advantage of the ongoing uncertainty this is bringing. Short-term growth is impacted by this uncertainty and the previously announced Client consolidation. Over the longer term, we expect to continue to build on our long term, naturally growing transaction flows and proven ability to deliver our secure payment services into the expanding and increasingly complex e-commerce market, underpinned with our ongoing investment in our solutions and our free cash position.”
Operational Highlights
· Renewed contracts with 2 major Clients:
o 2-year extension to 31 March 2022 with our largest client (31% of annual revenue in 2018).
o 5-year extension from 1 January 2019 with our third largest client (12% of annual revenue in 2018).
· Continued to deliver operational excellence with high payment success rates and low fraud levels.
· Delivered an 85% reduction in payment fraud levels within our direct managed fraud service resulting in a 46% gross margin (H1 2018: 7%).
· Significant investment in delivering Mi-Pay’s full compliance to the new European wide payment regulation framework PSD2 (Payment Services Directive) ahead of the majority of the market and the implementation date, mitigating our clients’ risks.
Financial Highlights
• Delivered a 15% increase in fully managed payments to £58.1 million (H1 2018: £50.2 million).
• Successfully managed and indemnified £29.2 million of payments for fraud versus £17.8 million for the first 6 months of 2018, driving an increase in revenue of £0.1 million.
• Total revenue recognised in the period was £1.7 million (H1 2018: £1.6 million).
• Total gross margin remained strong at 63% (H1 2018: 62%).
• Total gross profit increased to £1.1 million (H1 2018: £1.0 million).
• Administrative expenses flat at £1.1 million (H1 2018: £1.1 million) despite continuing volume growth.
• Approximately breakeven at EBITDA level (H1 2018: £0.1 million loss).
• Cash & cash equivalents as at 30 June 2019 remained at £3.1 million (30 June 2018: £3.1 million).
• Operational cash outflow for the period of £0.2 million (H1 2018: £0.3 million outflow) which is expected to be offset post period end by the receipt of a £0.3 million annual research and development tax credit in October 2019.
• Basic and diluted loss per share 0.2 pence (H1 2018: 0.3 pence loss per share).
