Mi-Pay Group Plc (LON:MPAY) Chief Executive Officer Michael Dickerson and Chief Financial Officer John Beale caught up with DirectorsTalk to discuss their latest interim results
Q1: Now John, interim results out this morning, can you talk us through the operational highlights?
A1: Yes, absolutely. We’re pleased as a business, we’ve seen a 34% increase in our transaction values and throughout the period which is the core metric that drives our growth, that’s really come from the natural movement of consumers into the digital channels and our customers really focussed strategically on driving their digital offering. We’ve seen a real increase in consumers using on device, on wallet type payment solutions of which we’ve invested in and bringing the solutions such as Amazon Payments to the mobile community has really helped this. We’ve been able to deliver continued low levels of fraud through our internal fraud engine but importantly for our clients, maintained a high level of payment success rate, improving their consumer interaction and of course what’s happening in the world today is the increase in need for secure platforms and data protection, we re-accredited our platform with the highest level of PCI in terms of protecting our consumers’ data.
Q2: Can you give us an overview of the financial results for the period?
A2: So in terms of the financial performance, again off the back of the strong growth in transaction values which fundamentally drives our revenues, we’ve seen an increase in Mi-Pay Group revenues but critically a 33% increase in our gross profits to £1 million. What’s most pleasing about this is we’ve been able to drive the actual gross margin up to the 13 percentage points from 49% to 63% in H1 2016, primarily due to the increased volumes enabling us to try and improve terms with our partners but also the efficiency and in continued improvements in our fraud management and success rates which are key metrics to driving our profits. When you align that with £500,000 reduction in our administrative expenses for the period we’ve seen a reduction of £700,000 in our operating loss for the first half 2016 to the first half 2015, delivering a £250,000 loss for the period but again this is offset by the settlement in August of a £300,000 R&D cash credit for development work that we’ve done on our platform. So on a like for like basis we’ve effectively broken even for the period so we’re pleased with that result and it was a core target for the management to drive Mi-Pay Group to a stable financial position.
Q3: Michael, what are the key trends that you’re seeing in your marketplace?
A3: Well some of the key trends that we are noticing is that the digital transformation is now becoming a reality so increasingly both our clients but also retailers in general are understanding the need to deliver an efficient digital strategy and simply to service their clients in a safe and proper way going forward. There needs to be solutions out there that cater for a safe and easy payment access online so my personal experience in terms of customer payment and digital behaviour is something that brings us in a good position to assist existing and new clients to cater for that challenge.
Q4: How are Mi-Pay Group PLC positioned for the rest of the year?
A4: In terms of how we are positioned, we have seen a significant cost reduction in our regional costs, we have done so whilst at the same time maintaining stability and growth. Our gross profit is enhanced due to in source and own development of our fraud engine and that also gives us new opportunities to implement fraud as a service to new markets and existing clients. As a management we expect the continued growth to continue as the consumer generally are migrating over to online so looking towards the remainder of the year, we continue to be I progression to profitability in line with the expectations we have previously expressed to the market.
