# Mi-Pay Group plc deliver a 15% increase in fully managed payment transactions

- Link: https://www.directorstalkinterviews.com/mi-pay-group-plc-deliver-a-15-increase-in-fully-managed-payment-transactions/412790063
- Published: 2019-08-12T07:09:35+01:00
- Author: Giles Arbor

**Mi-Pay Group plc** (LON: MPAY), the leading provider of outsourced digital transformation
and mobile payment solutions, today provided an update on trading in the year to
date, one of the Company’s major clients and timings for its interim results.

**Trading update**

Trading for the first half of 2019 was broadly in line with management’s expectations,
delivering a 15% increase in fully managed payment transactions processed to £58.1
million (H1 2018: £50.2 million) and successfully indemnifying £29.2 million of 
payments for fraud (H1 2018: £17.2 million). This increased revenues to £1.7 million
for the period (H1 2018: £1.6 million). Gross profit margins remained strong at 
63% and administrative expenses were in line with prior periods. The Company delivered
an approximate breakeven EBITDA for the period (H1 2018: £0.1 million EBITDA loss).
Two major contracts were renewed with clients representing 43% of the 2018 revenue
during the period and strong operational metrics were delivered.

As a result of uncertainties in the e-commerce payment market with respect to the
adoption of new European wider Payment Services Directives (PSD2) in September 2019
and the current economic climate, new business growth in the second half of the 
year is expected to be slower than anticipated. As a result, trading for the full
year is expected to be behind current market expectations. The Company has invested
to ensure it continues to deliver compliant solutions for its Clients and to take
advantage of market uncertainties in the coming period.

**Client update**

One of the Company’s clients is a mobile network operator which has been a customer
of the Company for 12 years. The Company provides payment and fraud management services
to the Client under a rolling contract and therefore there was a risk that the revenues
received under this contract could be lost with a limited notice period. It has 
come to the attention of the Board of Mi-Pay that, as a result of a rationalisation
exercise, the Client is likely to consolidate the services provided by the Company
to another provider. The Company does not know when this will occur, however, should
it becomes effective, it is expected that the Company will no longer generate revenues
from this Client going forward.

In the year ended 31 December 2018, the Client accounted for £0.5 million of turnover
for the Group, equivalent to 13% of the Company’s revenue for that year and this
level of revenue has continued in 2019 so far. Until the Client ceases to utilise
the Company’s services, it is not known what the financial impact of the Client 
loss will be on the Company’s trading for the current year.

The Board will adjust the Group’s budgets and spending accordingly to mitigate the
expected loss and will continue to develop the relationships with its long-term 
contracted clients to drive growth, remaining focussed as a Company on delivering
long-term profitable performance.

**Notice of Interim Results**

The Company will be announcing its Interim Results for the six months ended 30 June
2019 on Wednesday, 25 September 2019.

Management will be hosting a presentation for analysts on the day of results at 
10:30 a.m. at Allenby Capital Limited, 5 St Helen’s Place, London, EC3A 6AB.

Analysts who wish to attend should register their interest with Joscelin Pinnington,
contactable at j.pinnington@allenbycapital.com or 0203 328 5656.

**Michael Dickerson, Chairman of Mi-Pay Group plc commented:**

> “We are pleased with the continued growth and performance in the first half of
> 2019 and have invested in our solutions to ensure we continue to deliver fully
> compliant services to our clients. Whilst we are disappointed with the potential
> impact of the client loss, we will focus on mitigating the loss of revenue and
> margin and continuing the consistent growth we have delivered from our existing
> client relationships. In addition, we believe we are well placed to take advantage
> of the expected payment market uncertainties and risks over the longer term with
> our technology solutions and commercial flexibility.”

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