Optimal Payments eyes higher profits after tax gain and revenue growth
AIM-listed Optimal Payments said it was eyeing better full year profits thanks to a lower tax rate and strong growth that has seen it meet revenue and earnings expectations.
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The online payments group saw its revenues increase to 44% to $365m during the calendar year, while earnings before interest, taxes, depreciation, and amortisation (EBITDA) grew 65% to $86m.
The company expects its profits after tax to be ahead of forecasts due to an lower effective tax rate than was expected by the consensus due to historical tax losses from a higher weight of revenues from operations conducted in lower tax jurisdictions.
"Having accomplished all of our stated goals during the year, both financial and non-financial, we have emerged with a strong foundation for 2015 and look forward to maintaining the momentum established in 2014," said president and chief executive Joel Leonoff.
Analysts at Numis and Canaccord Genuity said the company looked undervalued compared to peers.
Said Canccord's Bob Liao: "Growth prospects remain very healthy for 2015, with Optimal rolling out Principal Membership services, well positioned in the US online gaming market and remaining exposed to strong ecommerce growth as the company continues to integrate its US businesses."
He argued that despite Optimal's strong growth, its shares trade at large discounts to its closest peers, with Optimal's enterprise value only 8.3 times EBITDA, compared to 14.1 times for Safecharge and 18.8 for Wirecard, its US-based rivals.
Shares were down 10.34% to 332.62 on Wednesday at 14:49.