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Planet Payment delivers solid first quarter results

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Planet Payment Inc (AIM: PPT; OTCQX: PLPM) reported on the first quarter to end-March 2010, saying it continued to deliver solid results, with total revenue up 28 percent year-on-year at  US$13.2 million and with multi-currency revenue up over 60 percent at US$10.0 million.

Pretax loss widened slightly to US$1.53 million from US$1.35 million.

The company's revenue growth was primarily driven by a 60 percent increase in active multi-currency merchant locations over the previous first quarter.  The company's total active merchant locations now stand at over 11,000 locations, with more than 2,700 new locations activated since the first quarter of 2009.

Early indicators of improving economic conditions also contributed to the strong performance. The company's same store multi-currency volume in the hospitality, retail and e-commerce sectors rebounded in the period, as evidenced by the 40 percent increase in March 2010 same store volume over March 2009.

Planet Payment noted that the first quarter is historically the slowest, due primarily to reduced international business travel following the Christmas holiday and around the Chinese New Year, while fourth quarter is typically the most active. Due to its product mix and broader customer base, this quarter's seasonal, sequential revenue decline of 7 percent compares favorably to the prior year, when first quarter 2009 revenue was down 12 perecent as compared to fourth quarter 2008.

Planet Payment also continues to benefit from a robust new business pipeline. Approximately 45 percent of multi-currency transaction volume processed in the month of March 2010 was attributed to merchants activated since March 2009, with 5 percent of the March 2010 volume derived from merchant locations activated in the first quarter of 2010. 

Since the beginning of the year, the it extended its international reach with the roll out of new services in the Philippines, South Africa, the United Arab Emirates and with additional acquirers in Canada. In support of these new service launches, the company's cash operating expenses increased by US$0.8 million or 19 percent as compared to the same period a year ago.

The payment processing industry continues to undergo regulatory change and consolidation among payment processors and acquirers, which the company believes opens up opportunities for its products. 

Following seasonal low-points in January and February 2010, Planet Payment  saw March and April 2010 volume and revenue return to levels achieved in the fourth quarter of 2009. The Company believes that new Visa regulations will not have a material impact on 2010 revenue, potentially affecting less than 5 percent of revenue, and given the current strong pipeline of business and product mix the company believes that its financial prospects for 2010 continue to be in line with market expectations.

Last week, it announced a multi-year extension of its multi-currency processing agreement with outsourced payments services group TSYS (NYSE: TSS). Under the agreement, TSYS Acquiring Solutions will continue to offer Planet Payment's Dynamic Currency Conversion and Multi-Currency Pricing solutions to its customers.

Last month it launched a partnership with South African based Absa Card to capitalise on the anticipated massive tourist inflow into that country with the start of the football World Cup in summer, looking to provide visitors with a choice of paying in Rand or in one of the 30 supported foreign currencies through its Pay in Your Currency technology.

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