TIDMEPO
RNS Number : 5774Z
Earthport PLC
18 December 2017
18 December 2017
Earthport plc
("Earthport" or the "Company")
Trading Update
and
Directorate Changes
Earthport (AIM: EPO), the leading payment network for
cross-border transactions provides an update on revenue
performance, pipeline and the market environment. In addition, the
Company announces that Chief Executive Officer (CEO) Hank Uberoi
will become Executive Chairman on 1 January 2018 to fully focus on
a growing number of strategic opportunities and partnerships. The
Board has commenced a search for a new CEO and in the interim
period Phil Hickman, Non-Executive Chairman, will become interim
CEO.
Update on Revenue Performance and Pipeline
Revenue Performance
Earthport's anticipated revenues are expected to be 10%-15%
below current expectations for the financial year ending 30 June
2018 ("FY2018"). This adjustment reflects several factors
including:
-- Delays in some expected contracts and client implementations
-- A recent change at one of our leading e-commerce clients.
Many of these contracts and implementations are expected to
complete within the current financial year, but will result in
lower revenues for FY2018. In addition, a recent change at one
existing e-commerce client has resulted in a loss of approximately
5% of 2018 projected revenues as this client changed its plans for
a UK corridor for domestic payments for reasons specific to them.
They remain a client and expect to work with Earthport for other
international corridors.
EBITDA is expected to be broadly in line with current market
forecasts.
Pipeline
Earthport continues to navigate the course between significant
medium-term revenue and strategic value growth and the short-term
timing challenges of contracting and on-boarding regulated
businesses. The new business pipeline is currently stronger than at
any time in the firm's history. An increasing number of banks and
corporate entities are in active discussions with Earthport,
including large ecommerce companies and banks in the US, financial
institutions in Europe, India, Australia and Southeast Asia, and
existing clients who are planning expansion activities.
-- Several large existing clients are seeking to expand
international corridors and offerings including a major banking
client in the USA targeting over 1 million incremental transactions
annually into Asia which started this month and will ramp up over
the coming months.
-- The weighted and unweighted new business pipeline for FY2019
is already over 2 times that of FY2018 and continues to grow.
Earthport continues to invest in sales capacity and the pipeline
is expected to have a positive impact on revenues by the end of
FY2018 and accelerated growth into FY2019. As a result, Earthport
confirms its expectation to reach cash flow break-even during
FY2019.
Strategic Update
The market for cross-border payments continues to be transformed
as financial institutions accelerate their move from the
traditional correspondent banking model and wires and as digital
payment models continue to advance. This change is attracting
increasing competition to the Company's market with a variety of
new entrants and increasing investment being committed to the
industry.
Over the past three years Earthport has emerged as a significant
new presence in the cross-border payment landscape. The Company is
well positioned compared to its competitors through its regulatory,
compliance and payments domain expertise, its data and validation
infrastructure, and the strength and reach of its network, which
currently provides direct local access to 67 countries (and
growing) and overall payments access to over 190 countries. The
brand value of Earthport is strong, as evidenced by receptivity at
global industry conferences (SIBOS, Money2020, and IIF in
particular) and growing sales opportunities across multiple
geographies.
The Company is well positioned to play a significant role in
enabling, participating in or leading a diverse range of
initiatives by Asian, US and European institutions and platforms to
accelerate cross border payments capabilities. These include
leveraging its existing infrastructure in partnership with deep
pocketed strategic partners to capture larger scale outsourcing
opportunities with global banks.
Board Changes
In recognition of the immediacy and importance of these
opportunities the Board has asked Hank Uberoi, currently CEO of the
Company, to take direct responsibility for developing wider
strategic, commercial and investment initiatives and partnerships.
With effect from 1st January 2018, Hank will become Executive
Chairman of the Company and the Board has initiated a search for a
new CEO. Phil Hickman, currently Non-Executive Chairman of the
Board, has agreed to act as interim CEO.
Mr. Hickman spent over 32 years as a banker with HSBC, and has
experience across many commercial activities including Managing
Director of Transaction Services for Europe. Phil was also the CEO
for iPSL, a joint venture between Unisys, Barclays, Lloyds and
HSBC, set up to process cheque and credit clearings of 13 million
items per day and accounting for 70% of the UK market.
Hank Uberoi, CEO of Earthport, commented: "We are in a fast
changing environment for cross border payments and many of the
trends we have identified are now accelerating. Earthport is in an
excellent market position and commands significant assets to take
advantage of the growing opportunities but scale will be an
important factor going forward. We have identified emerging
partnership opportunities and I expect the next period of time will
be both exciting and challenging, given our ambitions and the pace
of change within the payments sector."
Phil Hickman, Non-Exec Chairman of Earthport, stated: "Despite a
temporary setback in revenue growth rates, impacting full year 2018
revenue expectations, Earthport's pipeline and brand profile has
never been better. The market is increasingly open to alternative
solutions to correspondent banking and, as a leader in this field,
it is imperative Earthport takes advantage of the many strategic
opportunities presented by the current environment.
"As Hank focuses his full attention on pursuing these
opportunities, I look forward to utilising my experience in guiding
the Company. The Board will provide an update on our search for a
new CEO in due course."
For further information, please contact:
Earthport Plc 020 7220 9700
Phil Hickman, Chairman
Hank Uberoi, Chief Executive Officer
Simon Adamiyatt, Chief Financial Officer
Newgate 07469 154806
Bob Huxford/James Ash
N+1 Singer (Nomad & Joint Broker) 020 7496 3000
Mark Taylor/James White
Shore Capital (Joint Broker) 020 7408 4090
Toby Gibbs/Stephane Auton
Notes to Editors
About Earthport
Earthport provides cross-border payment services to banks and
businesses. Through a single relationship with Earthport, clients
can seamlessly manage payments to almost any bank account in the
world, reducing costs and complexity to meet their customers'
evolving expectations of price, speed and transparency.
Earthport offers clients access to global payment capability in
190+ countries and territories, with local ACH options in 65+
countries and an evolving suite of currencies and settlement
options.
Earthport continues to invest in the establishment of in-country
bank partnerships across the world, bringing together its deep
market and regulatory expertise in order to maintain compliant and
commercially competitive services.
The result - a global payments network accessed via a single
relationship, delivering significant cost and operating
efficiencies for banks and businesses servicing high volumes of
lower value payments.
Headquartered in London with regional offices in New York,
Dubai, Miami and Singapore, Earthport is a public company, traded
on the London Stock Exchange (AIM: EPO) with an institutional
investor base including World Bank IFC, Oppenheimer, Blackrock,
Henderson.
Please visit www.earthport.com for more information.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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