Earthport posts bigger loss despite 21 per cent leap in revenue

Earthport, a cross-border payments company, has reported a 21 per cent rise in profits for the period, but saw pre-tax losses widen on the back of rising sales costs and admin expenses.

In the full year ended June 30th, revenue climbed from £2.49m to £3.02m year-on-year, while the cost of sales edged higher from £0.56m to £0.67m. Admin expenses increased from £6.76m to £10.83m (due to Earthport's reorganisation and investment for growth), leading to a loss before tax totalling £9.63m, against £7.52m a year earlier.

The company also made a share-based payment charge of £1.11m (2011: £2.37m), which relates to options granted to employees and directors during the year and in the past.

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More positively, transaction volumes increased 53% year-on-year, boosted by a particularly strong performance in June, and the company's outlook was broadly upbeat.

Hank Uberoi, Executive Director of Earthport said: "This has been a year of strong progress for Earthport, which has seen the company deliver on many of its strategic objectives, having completed the restructuring and reorganisation which began in 2010. Earthport is at a pivotal stage of its development, as transaction levels continue to gain momentum and the company continues to gain traction with global industry leaders as customers and channel partners."

The board added: "While transaction volume growth was slower than we would have predicted at the start of the year, we exceeded our expectations in terms of the nature and size of new customers, signing contracts with some of the leading businesses in financial services and signing channel partner deals with large financial services technology companies.

"Many of these relationships are only in the early stages of implementation, which bodes well for accelerated growth going forward. Therefore, while we are relatively pleased with the growth achieved in transaction volumes in the year, an increase of 53%, we believe this does not entirely reflect the progress that has been made. We have entered the current financial year in an excellent position, which has been demonstrated through the continued growth in transaction volumes in recent months, with October 2012 being 143% ahead of June 2011."

Cash and cash equivalents at the year-end were £5.77m compared to £3.83m at the same date the previous year.

NR