Shares of Emerchants Ltd (ASX: EML) have risen by 1.6% today after the non-bank card issuer and processor reported a strong increase in revenues for the six-months ended 31 December 2014.
So What: Over the six months, Emerchants focused on expanding its domestic re-loadable business while it also completed the acquisition of Store Financial Services UK Limited (SFUK), thus expanding its long-term geographic market opportunities.
Emerchants said that SFUK contributed positively to the company's financial results and helped drive a 111% increase in revenue to $5.08 million compared to the prior corresponding period (pcp). The group generated a positive earnings before interest, tax, depreciation and amortisation (EBITDA) of $0.54 million (up 140% on the pcp) while it recorded a net loss of $0.43 million, which compares favourably to the net loss of $2.16 million in the pcp.
Here are some of the other highlights:
- 4.1 million transactions – up 89%
- Stored value balance of $91.2 million – up 207%
- Total dollars loaded was $194 million – up 143%
- Number of active accounts was 1.63 million – up 175%
- Cash as at the end of January was $6.8 million
Now What: While the group is not yet profitable, it is reporting strong growth across a number of important metrics, including those mentioned above. The company said its revenues wouldn't be materially impacted by reductions in interest rates, while any impact experienced is likely to be offset by interest income on higher balances, as well as foreign exchange gains on UK/EU revenues.
