Optimal Payments upbeat about US gaming after strong 2012

Optimal Payments swung to a profit in 2012 after a strong year, saying it was upbeat about opportunities in the US gaming market in 2013.

The AIM-listed online payments provider reported a profit before tax of $3.6m last year, compared with a loss of $26.2m in 2011.

Earnings before interest, tax, depreciation and amortisation (EBITDA) surged by 58% from $17.5m to $27.6m over the year, with a whopping $16.4m of this recorded in the second half "which partly reflect seasonality within the business", the company said.

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Revenues jumped 40% from $127.9m to $179.1m, driven mainly by the group's NETBANX Straight Through Processing (STP) division which delivered organic growth of 60%. This unit now accounts for over three quarters of group revenues with NETELLER Stored Value (SV) making the difference.

Optimal Payments said it is "well positioned" to tap into opportunities in the US gaming market as more states consider legalising online gambling. New Jersey legalised online poke and casino games just last month, while Nevada has made developments towards legislation as of late.

In October 2012, the firm signed a "ground-breaking" deal with Caesars Entertainment as the Las Vegas gaming group enters the US online poker market.

Joel Leonoff, President and Chief Executive Officer, said 2012 was an "excellent year" for Optimal Payments.

"Organic growth in revenues and EBITDA led to the group exiting 2012 with a strong run rate and, as a result, the group is well positioned for further growth in 2013. The group also has a number of exciting growth opportunities in 2013 including re-entry into the US gaming market and new innovative product developments particularly mobile."

Group cash by the end of the period stood at $57.9m (net of merchant cash), up from $44.1m in 2011.

Leonoff said that two thirds of the outstanding loans used to fund the acquisition of OP Inc in February 2011 have now been paid off. With the remaining loans expected to be settled in the next 12 months - along with trading momentum and strong cash generation - Optimal Payments will consider M&A opportunities to further accelerate growth in 2013.