Worldpay shrugs off Brexit concerns as bumper earnings send shares higher
Worldpay shares have nudged last year's peak today after the company reported better-than-expected earnings and declared a maiden interim dividend of 0.65p per share.
The UK's largest payments processor reported a rise in first-half underlying earnings and pre-tax profit. It follows a disappointing first full year for the firm as a listed company.
For the six months to the end of June revenue jumped 10 per cent to £2.14bn, while pre-tax profit rose to £168.6m, up from £0.3m in the first half of 2015.
Underlying earnings before interest, taxes, depreciation and amortisation rose 19 per cent to £217.9m.
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Analysts polled by Thomson Reuters had expected underlying earnings of £208.8m pounds.
Shares in the company climbed by more than five per cent before falling back to around three per cent higher.
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Chief executive Philip Jansen said medium-term guidance remains unchanged and dismissed any effects the UK vote to quit the European Union could have on earnings. Jansen said:
While the UK's vote to leave the EU has resulted in increased uncertainty, we do not expect it to have a material effect on Worldpay's trading performance.
Our confidence in our prospects is reflected in further investment in capabilities to support sustainable growth over the medium-term, and the declaration of our maiden interim dividend.
The fall in the value of the pound following the Brexit vote and Bank of England monetary easing has helped Worldpay's bottom line, with the company expecting “further benefits” from weak sterling in its second-half earnings if current foreign exchange rates persist.
Worldpay is planning to boost capital expenditure by £30m over the next two years to develop products and improve its platform and is working on a new platform – which has cost around £400m but should ramp up its capabilities.
It is still currently using Royal Bank of Scotland's systems for the majority of payments but expects to migrate to its own platform in the summer of 2017.
Earlier this week Worldpay was granted a licence to process payments in Australia in the latest phase of its global expansion plans.
Read more: Worldpay disappoints with full year earnings
It previously picked up a Canadian payment licence through a deal with a local bank.
Worldpay has also struck deals with the likes of Asos and Cathay Pacific Airways to process payments around the world.
Royal Bank of Scotland was forced to sell its stake in Worldpay in 2010 as part of its £45bn EU financial bailout package at the height of the financial crisis, offloading it to private equity firms Bain and Advent.
Worldpay – whose customers are mainly in the UK and the US – processes payments for more than 400,000 customers around the world and on a typical day will process 31m mobile, online, and in-store transactions.