13th Mar 2009 07:00
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13Mar09 Press release |
For immediate release |
NEOVIA Financial Plc
NEOVIA Financial 2008 Forth Quarter Trading Update
Friday, 13 March 2009 - NEOVIA Financial Plc (LSE: NEO) (NEOVIA or the Group), the independent global online payments business, announces its trading update for the fourth quarter and year ended 31 December 2008.
The Group has continued to make progress in the fourth quarter of 2008, with trading proving resilient in what has been a challenging period in the marketplace. Revenue for the fourth quarter is anticipated to be around US$ 21.3 million (all figures herein subject to final audit), an increase of 31% from Q4 2007 revenue of US$ 16.2 million, and compared to US$ 19.1 million for the third quarter of 2008. Fee income, which excludes interest, increased by 43% over Q4 2007 to $19.8 million. Interest income, as expected, decreased from $2.4 million in Q4 07 to $1.5 million in Q4 08, a drop of 38%. Despite the current economic downturn, the Group recorded a slight increase in active e-wallet users in the fourth quarter, up to 97,673 from 97,448 in the previous quarter. The Group has commenced a number of programmes aimed at stimulating further active e-wallet user growth in 2009 and has made encouraging gains in diversification into new market sectors.
The Board expects that the Group will report operating profit, before any impairment losses or restructuring costs, for the full year 2008 in line with market expectations. Results for the full year will be impacted by a number of non-recurring items, including approximately US$ 1.1 million in restructuring expenses pertaining to the cessation of the North American-facing business, which cessation occurred in Q1 2007, and a non-cash expense relating to impairment of the goodwill and intangible assets arising on the acquisition of Netbanx Limited in 2005. Goodwill and intangible assets amounting to US$ 14.5 million may be subject to part or full impairment. The Group also recorded tax recoveries of US$ 2.1 million in Q4 2008 in relation to favourable assessments of prior periods.
During the second half of 2008, NEOVIA implemented several initiatives to enhance its position in the online payments space, including the launch of the Net+ prepaid MasterCard products, the enhanced NEOVIA payment network, and the roll out of further currencies, countries and payment options for e-wallet users and merchant customers. NEOVIA has also continued to invest in its business, in line with its strategic objectives, with further progress achieved on the "NewTeller" platform development project, which is currently scheduled for deployment in Q3 2009. The future benefits of "NewTeller" will include cost savings and greater operating efficiencies within the Group. The Group continues to focus on further reduction of its cost base through additional restructuring and geographical optimization of cost centres.
As at 31 December 2008, total Group cash was approximately US$ 82.3 million, which includes restricted cash surpluses and the excess of EU customers' qualifying liquid assets over balances payable. The working capital position of the Group, defined as current assets less current liabilities, is approximately US$ 68 million. Required cash inventory comprising amounts held at processors, operating account balances to cover payouts and the buffer on trust accounts is approximately US$ 30.0 million, resulting in available "free cash" of about US$ 38.0 million. A substantial portion of this available cash is earmarked for capital expenditures in 2009 (including the completion of the "NewTeller" platform) and for the IDT acquisition referred to below.
The proposed acquisition of IDT Financial Services Holdings Limited, which was announced on 1 December 2008, remains subject to obtaining the consent of the Gibraltar Financial Services Commission and a further update will be made in due course.
Following four intense years in executive roles with the Company, Ron Martin, President & CEO of NEOVIA, will leave the Company for family reasons. Mr Martin has agreed to remain with the Company during a transition period to facilitate the orderly engagement of a replacement CEO. A recruitment process is being commenced. The Board expresses its gratitude to Mr Martin for his effective leadership during a challenging time for the Company and appreciates his continuing support during the transition interval. The Company will advise shareholders the exact date of his departure in due course.
NEOVIA expects to release its preliminary announcement of the 2008 audited full year results on or around April 23, 2009.
For further information contact:
Doug Terry dial North America 1 403 769 3419
CFO, NEOVIA Financial Plc
Email: [email protected]
Andrew Gilchrist + 44 (0) 1624 698 713
VP Communications, NEOVIA Financial Plc
Email: [email protected]
Citigate Dewe Rogerson + 44 (0) 207 638 9571
Sarah Gestetner / George Cazenove
Daniel Stewart & Co Plc + 44 (0) 207 776 6550
Paul Shackleton
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About NEOVIA Financial
Trusted by consumers and merchants in over 160 countries to move and manage billions of dollars each year, NEOVIA Financial Plc (formerly NETELLER Plc) operates the world's leading independent online payments business. Through its Payment Suite, featuring NETELLER®, NETBANX®, Net+™ and 1-PAY™ brands, NEOVIA Financial specialises in providing innovative and instant payment services where money transfer is difficult or risky due to identity, trust, currency exchange, or distance. Being independent has allowed the company to support thousands of retailers and merchants in many geographies and across multiple industries.
NEOVIA Financial Plc is quoted on the London Stock Exchange's AIM market, with a ticker symbol of NEO. Subsidiary company NETELLER (UK) LTD is authorised by the Financial Services Authority (FSA) to operate as a regulated e-money issuer. For more information about NEOVIA Financial visit www.neovia.com or contact us by email at [email protected].
NEOVIA Financial Plc recently changed its corporate identify from NETELLER Plc to better reflect the strength and breadth of its individual product brands. At the same time its ticker symbol changed from NLR to NEO.
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