SafeCharge in 2017: Setting the Stage for Further Growth by Lowering Risk

One of the major payment technology providers in the financial and gaming industries has been recently growing outside of its traditional areas. SafeCharge has published today its annual report for 2017, revealing a recap of its performance for last year, and a detailed account of the plans of the company going forward, amongst other details.

The firm’s shareholders have enjoyed a decent return over the past years. The firm outperformed the broad FTSE Small Cap index materially. Every £100 pounds invested into the company at its IPO four years ago in April 2014 would have been roughly doubled by now. During the same period, investors into the above-mentioned index would have gained about 40 percent.

The company is majority owned by Teddy Sagi, whose Northenstar Investments Ltd, owns 67.8 percent of the shares. The firm has been consistently growing over the past years, with its revenues being driven by a diversified portfolio of clients.

2017 Highlights

The company ended 2017 with an increase in processed transactions of 38 percent. The number of transactions for the full year reached 173.8 million with their value growing 19 percent to $9.6 billion.

The main growth for last year was driven by existing clients and some new high-volume customers of the firm. The portfolio of clients of SafeCharge includes 888 Holdings, Plus500, Bet365, Paddy Power and EuroBet.

Revenues for the full year that ended on the 31st of December 2017 grew by 7 percent to $111.7 million with gross profit climbing 6 perfect to $64.5 million.

The profit margin of the payment company has been the only metric that has shown a decline year-on-year. That said, the decline amounted to 0.5 perfect to 57.8 percent. In its annual report, the company has reflected that this metric declined due to the shifting client mix of the firm, as clients have become higher quality and lower risk.

Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) increased to $33.7 million with the EBITDA margin for 2017 totaling 30 percent. SafeCharge generated $32.3 million of cash flow from operating activities and 20.5 million free cash flow. This represented a cash conversion rate of 83%.

Strategic Focus

The company’s product mix has been growing and evolving organically and via some investments in new technology. The firm’s product portfolio is currently being spread across different areas of focus that cater to various types of clients. SafeCharge Enterprise if the company’s product for larger customers that require high customization.

Small businesses that need fast deployment to market have SafeCharge Express, which is a new product which the company deployed last year. The product is also suitable for larger clients that don’t have special needs.

SafeCharge also offers automated reconciliation processes across multiple service providers, an online merchant back-office interface, a marketplace manager and a set of KYC and document verification providers worldwide.

As mentioned above, the company’s product mix has been shifting to lower risk clients, a development which is set to boost the long-term sustainability of the flow of transactions processed by the London-listed firm. Following the publication of the annual report, shares of the company have traded higher by about 1 percent to 311 pence per share.