Proactive Investors - Run By Investors For Investors

Midpoint revenues, gross margin rise FY2016, while Brexit boosts Q4 traffic

Foreign exchange payments firm Midpoint Holdings said that revenues leaped in the year ended June 30 from a year earlier, helping the gross margin widen, while loyal users swelled above 80% in the final quarter and Brexit was a boost

Foreign exchange payments firm Midpoint Holdings Ltd  (CVE:MPT) said that revenues leaped in the year ended June 30 from a year earlier, helping the gross margin widen, while loyal users swelled above 80% in the final quarter and Brexit was a boost.

Increased trading following the UK’s Brexit vote contributed to the growth in transactional volume in the last three months ended June 30 – just a week after the EU referendum.

The company said that revenue in the latest year was C$270,051 compared with C$158,068 in the 12 months to June 30, 2015.

The cost of sales rose as the business expanded activities, to C$198,624 from C$130,865 a year earlier, such that the gross margin rose to C$71,427 from C$27203.

Midpoint’s total number of transactions increased 21.5% in the final quarter of its year and repeat user rate increased from approximately 50% at the end of the company’s first year of operations to over 80% as existing clients used Midpoint more frequently.

Five new currencies were added to Midpoint’s platform – Hungarian Forint, Mexican Peso, Romanian Leu, Bulgarian Lev, and Czech koruna.

The company also made a smaller net comprehensive loss of C$1,215,086 versus C$1,285,507 a year earlier.

The Company’s business objective is to continue to build sales across multiple markets and jurisdictions while continuing to offer exceptional customer service and improving the platform for customers. The online and largely virtual nature of the Company allows the business to be driven through multiple channels thereby amortizing its operational costs as it scales.

There are five different economic models that Midpoint is currently seeking to exploit: (1) organic (2) referrals; (3) co-branded white-label solution; (4) a pure white-label solution; and (5) licensing.

"The Company continues to work on its application program interface (“API”) development. This is one of the strategies that will enable the Company to deliver a white labelled multi-party netting FX exchange solution to large corporations as well as to direct access referrals. This development will also be used in the development of mobile applications. The Company has completed an API integration with XERO cloud accounting services," the firm said in a statement.

XERO currently has over 600,000 installs worldwide and is growing rapidly.

Finally, the Company is working on multi-currency prepaid debit cards which will expand the universe of possible clients. The cards would allow users to fund in and transfer between currencies on their card at the Midpoint rate, unlike with other competitive travel cards in the market. The Company has identified program managers and issuer’s banks that have expressed interest in working with it on this initiative.

The Company continues to maintain a five-star rating on Trust Pilot, an independent rating platform and continues to accumulate good customer testimonials and referrals.

"The offering is proving increasingly sticky with customers. The number of repeat users has grown from just over 50% at the end of the first year to 61.1% by the end of the second to over 80% at the time of this discussion. That number may well get higher over time as there have been numerous one-off customers who as yet have not required further currency conversion," the company said.

View full MPT profile View Profile

Midpoint Holdings Ltd Timeline

© Proactive Investors 2018

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use