Planet Payment hit by economic climate and costs

Planet Payment, a provider of international payment processing and multi-currency processing services, admits first half income was offset by the challenging economic climate, resulting in a loss for the six month period.

Revenue increased from $19.9m to $21.8m, but the firm returned a net loss of $0.4m (2011 H1: $1.0m) following increases in operating costs from additions to technology and support personnel which were made to invest in the growth of the business and future launches into new markets.

The company's expenses also rose following the acquisition of Branded Payment Solution and other professional fees, totalling $0.3m. Net revenue per merchant location was down as Planet's customers deal with the challenging economic situation.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) fell from $2.6m to $1.9m.

Consolidated gross billings rose 23% from $47.0m to $57.7m, while gross foreign currency mark-up increased 25% from $40.2m to $50.2m.

During the period total active merchant locations increased by 50% to 34,172 compared to 22,825 at the same period the previous year.

Philip Beck, Chairman and Chief Executive Officer of Planet Payment said: "During the first half of 2012, we continued to execute our strategy and invest in new business and markets, building a strong pipeline for the future. As demonstrated by our new customer launches, the market for our services remains strong as we continue to build our business.

"The company expects to see continuing growth in active merchant locations, during the remainder of 2012, from both existing customers and those that have recently implemented and launched services with Planet Payment. It intends to continue to invest in supporting new business, new markets implementations and new pipeline, although the benefit of these investments may only be realized in subsequent periods."

The firm added that it may continue to see slower growth in consolidated gross billings and net revenue from existing customers and consequently it expects full-year revenue growth comparable to the first half of 2012, and net income and adjusted EBITDA for the 2012 year to be relatively flat compared to 2011, unless economic conditions improve.

The share price fell 2.41% to 202.50p by 09:59.

NR