Safecharge Share Discussion Threads

[rivaldo] 17/9/2018 11:10

SCH have been tipped as a Buy in the IC:

"Tip Update: Buy at 318p

There was little to bemoan within SafeCharge’s (SCH) half-year results, with transaction numbers and values up by more than half to 118m and $6.7bn (£5.1bn), respectively. Of these volumes, more than a quarter were processed via SafeCharge’s own acquiring platform – representing $1.8bn, more than double the prior year's.

In turn, revenues and gross profits enjoyed strong momentum, although the gross margin declined from 57.3 per cent to 54.8 per cent. The payments group attributed this to the “higher-quality and lower-risk” nature of the overall customer base, as it focuses on winning new clients and entering new markets. Brokerage Shore Capital thinks this will “wash through in due course”.

Admittedly, pre-tax profits declined – the result of both higher amortisation and depreciation costs, and currency-related finance expenses. By comparison, a year earlier the company benefited from $1.4m in finance income. But on the bright side, cash conversion – denoting SafeCharge’s ability to convert operating profits into cash – improved from 79 per cent to 82 per cent. While net cash fell from $113 to $86.1m, the group remained debt free and proposed a generous dividend hike.

House broker Shore Capital forecasts adjusted pre-tax profit of $29.6m and EPS of 17.1¢ for 2018 (from $29.2m and 17.8¢ in 2017).

IC View
Encouragingly, SafeCharge won various higher-quality 'tier 1’ customers during the respective six months, including Uber competitor Gett. And it has gone some way to prepare for Brexit – obtaining authorisation as a Payments Institution from the UK’s Financial Conduct Authority (FCA). The shares trade at 19 times consensus forecast earnings, in line with their five-year historical average. However, we think that's an undemanding rating given the transaction impetus and income on offer. Buy."

[trentendboy] 14/9/2018 15:30

Could not resist. Yield is very nice given bank account numbers and safety increasing plus TO chance is still pretty much inevitable at some point in the future (or they start buying or reversing TO someone else).

Valuation still too low here given potential and free cash flow

[trentendboy] 14/9/2018 14:03

It is a nice yield to get given risks are being reduced as quality of the estate increases.

Hmmmm

[gleach23] 14/9/2018 11:23

Cheers for that rivaldo - some uplift.

If they increase the final divi by 15% too then it would make the yield 4.7% by my calcs which would be very nice.

[rivaldo] 14/9/2018 11:05

Excellent - Barclays Capital have raised their target price significantly to 420p (from 335p) and say Buy:



TEB, the forecast divi for this year was previously 13.12p, but that might have increased now following the whacking great increase in H1. So the yield is likely to be at least 4% at the current price.

[trentendboy] 13/9/2018 18:43

So yield is what? Not quite 3% or too high?

[rivaldo] 13/9/2018 12:27

The respected Techmarketview like the results:



"Thursday 13 September 2018
SafeCharge strengthens

Half year results out today from AIM-listed SafeCharge (a provider of payment processing services, technology and risk management services for online and mobile businesses) show the firm building on the solid performance delivered in FY 2017 (see here). Revenue for the six months ended 30th June grew by 26% yoy to $66.8m. Gross profit increased by 20% reaching £33.6m and adjusted EBITDA was $18m was up 15%. Margins eased back from 29.4% to 27% as the company continued to invest in not only its infrastructure and processing technologies, but also strengthening is sales team.

On the operational front, processed volume increased by 59% to $6.7b with the value of transactions processed through its own acquiring platform growing from 19% to 27% over the same period last year. H118 also saw the launch of a number of new customers including the global ride sharing company Gett, the online retail platform The Level Group and the online ecommerce platform Global-e.

SafeCharge senior management painted an upbeat picture of the outlook for the remainder of 2018 and indicated that full revenue should reach the top-end of market expectations of around $130m. On the current business trajectory, sales of this level would seem eminently achievable."

[rivaldo] 13/9/2018 08:45

Bryan Garnier say Buy, and have increased their target price to 380p (from 354p):

[ali47fish] 13/9/2018 08:14

so what that yesterday about payment companies and the german legal case -just to send fear down the spine- tooka tranche before the update maybe for nothing!

[igoe104] 13/9/2018 07:52

WJCCGHCC, IF standing still means revenue growth of 26%, i'm happy standing still.

[longwell] 13/9/2018 07:48

Sector will be in consolidation for years.hold and you will do well.
Looking at pcip as well for same reason.

[fizzypop] 13/9/2018 07:46

sterling interim divi 6.82p xd 27/9 payable 12/10

[wjccghcc] 13/9/2018 07:42

Problem is margins are dropping as they try to diversify away from gaming. Seems a bit like they're running to stand still.

[rivaldo] 13/9/2018 07:35

Solid results, and an excellent outlook:

"The Group has enjoyed a good start to the second half of 2018, benefiting from continued growth from our existing customers and the launch of new clients. The Board remains confident that the outcome for the year will be in line with market expectations, with revenue at the top-end of market expectations. The Directors look forward with confidence to the rest of 2018 and beyond."

Great 15% increase in the dividend too, with an 8.86 interim divi.

The $18.5m additional investment in Nayax explains the cash pile moving to $86m now. I note that SCH are still looking for more acquisitions.

[runthejoules] 13/9/2018 07:34

Haven't looked at these for a while, recent drop is disappointing - where did those £15m go? ON Nayax and dividends? If so it's of no concern.

This weakness may attract a buyer. Safest to stay in for now I think.

What does losing the Non Exec Chair mean? - Lost

[johnv] 13/9/2018 07:12

Last year they had a extra 9million due to merchant processing liabilities , whatever that is!

[costapacket] 13/9/2018 07:11

Strong financial performance with processed volume growth of 59%, revenue growth of 26% and increase of 15% in Adjusted EBITDA from H1 2017, continued platform development and investment in sales and marketing to accelerate our entry into new markets and verticals

Solid results

[jarega85] 13/9/2018 07:06

Cash down 24%!

[johnv] 12/9/2018 22:34

Perhaps i should have said, taken out too early, 1000p please not 400p

[crazycoops] 12/9/2018 16:47

Worry? That's the end game here, upwards of 400p IMHO. The share structure dictates that it won't be an opportunistic takeover.

[johnv] 12/9/2018 16:42

My biggest worry is that someone tries to take them out.

[mr doughnut1] 12/9/2018 14:33

MM's trying to accumulate stock before tomorrow?
With words like 'robust' and 'strong' you would think SCH were trying to give us an indication of how current trading is going.
I find if there are any leaks it is picked up in the share price from aprox 1.30-2.00pm the day before any TU. GLA.

[deadly] 12/9/2018 12:53

What's changed in 8 weeks since they said this?

"With robust current trading and strong sales pipeline, the Board remains confident that the outcome for the year will be in line with market expectations."

[gleach23] 11/9/2018 12:26

There again...if one looks at the chart for this time last year...

[starpukka] 11/9/2018 12:19

johnv. In my experience of results, the price drop could well be a reflection of people in the know, rather than just nervous speculation. We all know that news leaks. I've already reduced my exposure here but I've still got some skin in the game; so I'm hoping for some good results nevertheless.