Optimal Payments targets fantasy sports sector to continue growth

Alongside announcing its transformational deal to acquire rival Skrill, Optimal Payments has reported strong results for 2014 with substantial increases in both revenue and profitability.

Revenue increased by 44 per cent to US$365.0m, with EBITDA climbing 65 per cent to $86.1m, boosted by significant organic and inorganic growth and the World Cup in H1.

"2014 was a year of significant growth for Optimal Payments with substantial increases in revenue and profitability,” said Optimal Payments president and CEO Joel Leonoff. “Having accomplished all of our stated goals during the year, we are excited about the year ahead and the evolving opportunities for Optimal Payments.

“Specifically, NETBANX is well positioned for continued success through our Principal Membership status with Visa and MasterCard and NETELLER and Net+ continue to demonstrate impressive growth internationally whilst establishing a solid foundation for our future in the evolving regulated US online gambling market."

Revenue from the NETELLER Stored Value business increased 50 per cent to $89.6m, driven by underlying improvements in customer conversion and development of VIP programs.

The company also benefited from strong growth from its NETBANX Straight Through Processing (STP) business with revenue up 42 per cent to $274.7m, incorporating revenue from the acquired US businesses and underlying growth of 19 per cent (excluding Meritus and GMA revenue incorporated in H2).

North America represented 27 per cent of the company’s total revenue, with Europe contributing 21 per cent. Asia and the rest of the world accounted for over half of the total (52 per cent).

Cost of sales rose 45 per cent to $175.8m, while operating expenses increased by 50 per cent to $146.9m, due primarily to consolidating more than five months of operations of the US acquisitions.

Results from operating activities were up 81 per cent to $61.0m, with profit for the year amounting to $58.7m, an increase of 83 per cent year-on-year.

2014 Results

Optimal recently launched a new card issuing services division and its NETELLERGO! offering for ecommerce merchants outside of gambling to contribute to continued growth.

“These achievements have all been important strategic goals as we continue to deliver on our stated objectives,” said Leonoff. “We believe that the investment we have made in these and other areas will help to drive further growth.”

The company said that it is well positioned to gain market share in the US market, having acquired significant US operations through its California-based businesses Meritus and GMA.

“We have continued to develop our relationships with current and potential merchants and have forged successful partnerships in the rapidly developing area of fantasy sports leagues,” said Leonoff.

As at December 31st the company held cash and cash equivalents of $142.3m compared to $164.4m a year ago.

Shares in Optimal Payments plc (Co. Data) (AIM:OPAY) were suspended in London this morning pending publication of an admission document following a dea to acquire Skrill for €1.1bn.