Planet Payment reports more strong revenue growth in Q3

Planet Payment (LON:PPT and PPTR; OTC:PLPM) kept up its strong momentum in the third quarter, with a 32 percent rise in year-on-year revenue.

The company said it is benefiting from increased transaction processing volumes, due to an increased number of active merchant locations and improving economic conditions.

“As a result of our efforts this year ... and taking into account the customary fourth quarter seasonal uplift in our business, we look forward to increased revenue and gross profit, resulting in positive cash flows and adjusted EBITDA for the balance of 2010," chairman and CEO Philip Beck said.

The group's payment processing platform allows merchants and financial organisations to process and reconcile payments across any currency at the point of sale.

"Our services help acquirers open new sales channels, merchants sell more goods and services and cardholders enjoy informed choice and transparency at the point-of-sale,” Beck added.

It now has 46 banking and processing customers who have continued to roll out Planet Payment's products and services in sixteen different countries.

As a result it now has 3,800 more active merchant locations compared with the third quarter of 2009, a 39 percent improvement.  

The company highlighted that it began activating the merchant pipeline in recent months - with 1,600 new merchant locations in Canada, the United Arab Emirates, Philippines, Singapore, Brunei, Sri Lanka, the Maldives and South Africa.

In the three months ended 30 September 2010, Planet Payment's total revenue increased 32 percent to US$15.5 million (Q309: US$11.7million), gross profit grew by 22 percent to US$5 million (Q309: US$4.1 million). 

Earnings (adjusted EBITDA) also improved, rising to US$0.4 million (US$0.2 million). 

With the solid revenue growth Planet Payment was able to cut its net losses substantially. 

It nearly halved losses to US$0.4 million (Q309: US$0.8 million), a 44 percent improvement year-on-year, and a 47 percent improvement quarter-on-quarter - from the $0.7 million loss reported in the preceding three month period.

Overall for the first nine months of 2010 Planet Payment had total revenues of US$43.2 million, up 31 percent from 2009. Gross profit has grown by 18 percent to US$13.7 million with net losses narrowing to US$2.7m, a 13 percent improvement from the US$3.1 million loss for the comparative period of 2009.

Daniel Stewart analyst Simon Willis said the results show an improving trend, even though it was impacted by the Visa moratorium on providers’ forex transactions.

“The lifting of the Visa moratorium in early October is a material positive, as is the recent placing,” Willis said.

“The opportunity to launch in Latin America post the Visa announcement provides significant potential upside.” 

It has expanded debit card processing capabilities, with the certification of Maestro for the Middle East and Africa.

It has also improved its technology to support online PIN entry in the Middle East and Africa, and reached agreements to integrate to the iPAY gateway into a suite of enhanced, e-commerce, merchant fraud detection and prevention services.

Looking ahead the company said that momentum continues to build with its strong pipeline for  multi-currency processing services in existing and new regions. 

Post-period, Planet Payment raised US$6.03 million in a share placing.