Preliminary results for the year ended 31 Dec 2021
Source: RNS
Network International Holdings Plc, 9th March 2022
Preliminary results for the 12 months ended 31 Dec 2021
2021 underlying EBITDA growth of 27%. Improved margin guidance for 2022
|
(USD'000) |
2021 |
2020 |
y/y change |
|
Revenue1 |
352,245 |
284,844 |
23.7% |
|
Underlying EBITDA1,2,3 |
143,477 |
112,561 |
27.5% |
|
Underlying EBITDA margin1,2 (excl. share of associate) |
38.3% |
36.1% |
2.2pp |
|
Profit for the year1,3 |
56,558 |
5,598 |
910.3% |
|
Underlying free cash flow (underlying FCF)1,2 |
61,908 |
51,790 |
19.5% |
|
Cash flow from operating activities1,6 |
17,405 |
107,500 |
(83.8)% |
|
Leverage2,4 |
0.9x |
0.0x |
0.9x |
|
|
|
|
|
|
Key Performance Indicators (KPIs)5 |
|
|
|
|
Total processed volume (TPV) (USD m)1 |
42,814 |
33,540 |
27.7% |
|
Total number of credentials hosted (m) |
16.6 |
16.2 |
2.5% |
|
Total number of transactions (m) |
979.9 |
758.1 |
29.3% |
|
• |
Total revenue1 grew 23.7% y/y and 5% vs 2019. Excluding DPO, total revenue grew 21.0% y/y and 3% vs 2019, with KPIs across the business having fully recovered from COVID-19 as we exited the year. |
|
• |
Middle East revenue increased 25.0% y/y and 1% vs. 2019. Africa revenue1 grew 25.3% y/y and 11% vs. 2019. Excluding DPO, Africa revenue grew 15.9% y/y and 2% vs. 2019. |
|
• |
Merchant Solutions1 revenue grew 46.6% y/y and 5% vs 2019. Excluding DPO, revenue grew 39.8% y/y and was flat vs 2019. |
|
|
o Total TPV1 grew 27.7% y/y and (2)% vs 2019. Excluding DPO, TPV grew 24% y/y and (5)% vs 2019 |
|
|
o In the Network business (excl. DPO), domestic TPV was up 4% vs 2019, having improved through the year and recording mid-high teens growth vs 2019 in Q4. International TPV was (30)% vs 2019, trading ahead of our expectations through the year, finishing with December up 12% vs 2019. |
|
|
o Strong DPO performance, with twelve-month TPV growing 55.2% y/y or 42.1% y/y in constant FX. |
|
• |
Issuer Solutions revenue grew 10.6% y/y and 3% vs 2019, demonstrating continued resilience in the business and broadly balanced performance across both the Middle East and Africa. |
|
• |
Underlying EBITDA1,2,3 was USD 143.5 million, including a USD 1.7 million contribution from DPO. We saw margin expansion of 260bps y/y excluding DPO, reflecting strong revenue performance and prudent discretionary expenditure, whilst also investing in capabilities and people to drive future growth. |
|
• |
Profit for the year1,3 was USD 56.6 million, driven by strong revenue performance, a gain on the disposal of Transguard Cash, alongside prudent cost management and lower interest charges. |
|
• |
Underlying FCF1,2 was USD 61.9 million, up 19.5% y/y, primarily driven by higher underlying EBITDA1,2,3. |
|
• |
Cash flow from operating activities1,6 was USD 17.4 million, down (83.8)% y/y, where higher profits were largely offset by outflows in settlement related balances. |
1. The acquisition of DPO Group was completed in September 2021. There is a three-month contribution to the 2021 income statement financials, cash flows and Total Processed Volume KPI.
2. This is an Alternative Performance Measure (APM). See notes 4-5 of the condensed consolidated financial information for the definition and reconciliation of reported figures to APMs.
3. We announced the strategic exit of our stake in Transguard Cash LLC on 10th November 2021. There is a 10-month contribution from associate as part of underlying EBITDA.
4. Refer to page 25 for the leverage ratio computation and reconciliation of net debt figures to the consolidated financial information.
5. For KPIs and constant currency definition, refer to page 27.
6. Cash flow from operating activities is impacted by the movement in settlement related balances. Refer to page 21 for details.
Delivering on our strategy to innovate and accelerate
|
• |
New business momentum at record levels: new merchant signings continued to hit new highs every quarter and we saw 17 new financial institution customer signings. |
|
• |
Direct-to-merchant business saw solid growth vs pre-pandemic by the end of the year: supported by strategic execution and accelerating digital payments market growth. There were a number of capability launches, giving us the widest range of payment acceptance available to merchants in our markets, 60 minute onboarding and more data analytics services. Growth in core segments has strengthened, with online TPV (excluding Government and airlines) up 112% vs FY19; and SME sign-ups doubling since 2019. |
|
• |
Significant progress on Kingdom of Saudi Arabia market entry: accelerated the timeline of market entry, at a lower upfront investment and with stronger projected returns. We signed a new processing customer and live services are expected in the coming weeks. |
|
• |
DPO Group acquisition completed and trading ahead of our expectations: On a twelve-month basis, DPO delivered TPV of USD 3.6 billion, up 55.2% y/y or 42.1% in constant FX; revenue of USD 26.9 million, up 45.0% y/y or 32.9% in constant FX; and positive underlying EBITDA of USD 4.4 million. We have made good progress towards delivering revenue synergies, having signed three cross-selling agreements with our financial institution customers and launching 'DPO Pay' to UAE merchants. |
|
• |
Newly launched ESG strategy: underpinned by four clear strategic objectives covering; financial inclusion, responsible business practices, equal and fair treatment of employees, and our environmental footprint, where we are confident we will be carbon neutral on scope 1 and 2 emissions before 2030. |
2022 outlook - improved margin guidance
We are encouraged by the momentum we saw in 2021 and the recovery of our business from the pandemic, which has continued into 2022. In regard to the circumstances related to the Russia-Ukraine conflict, we have taken action to comply with all sanctions. Our direct exposure to Russian and Ukrainian spends as a proportion of total Group revenue is c1%. Whilst we are mindful of the potential impacts of international tensions, including those around travel and general consumer confidence; at this stage we continue to expect Group revenue growth of 27-29%1 in 2022 as previously guided.
DPO delivered positive underlying EBITDA ahead of our expectations during 2021 and given the strong ongoing performance of the business, we expect a higher EBITDA contribution in 2022 than originally anticipated. As a result, we now expect modest Group underlying EBITDA margin expansion y/y, versus our previous guidance of broadly flat margin y/y. As a reminder, our investments in Transguard Cash and Mercury Payments have been divested and will make no contribution to our financials in 2022.
2022 technical guidance
|
• |
Underlying depreciation and amortisation charge USD 65-70 million. This includes a c.USD 3-4 million contribution from DPO; with the remainder from the rest of the group, where 2022 represents the first full year from which investment in the separation of the data centre from Emirates NBD commences amortisation. |
|
• |
Interest cost USD 15-17 million. |
|
• |
Underlying tax rate c14%. |
|
|
1. Revenue guidance of 27-29% y/y is based on 2021 revenue of USD345 million, excluding three-month contribution from DPO, in line with previous guidance. |
|
• |
Specially Disclosed Items lower: i) impacting underlying EBITDA to be nil, in the absence of further M&A; and ii) impacting net income to be c.USD 11 million. This includes the ongoing amortisation of acquired |
|
• |
intangibles from the EMP acquisition of c.USD 4 million, which will cease after H1 2023; and the amortisation of acquired intangibles from the DPO acquisition of c.USD 7 million. |
Nandan Mer, Chief Executive Officer, commented
"Network made significant strides in 2021 and ended the year in a position of strength. Our KPIs not only recovered to pre-pandemic levels but showed solid growth, reflecting our successful strategic delivery and the broader regional economic recovery.
During my first year in the business, I have been focused on refreshing our strategy to deliver a higher growth outlook, revitalising our management team with a number of new appointments and launching a new ESG framework. I am particularly proud of the accelerated growth we achieved in our UAE merchant business, the successful cross-selling of services to our existing customers from the acquisition of DPO, as well as the progress made in our Saudi Arabia market entry. The credit for this success goes to our colleagues. The ultimate glue in any company is its purpose and all 1,700 colleagues at Network are united in this respect - to help businesses and economies prosper by simplifying commerce and payments.
Looking ahead, my focus remains on the delivery of our organic growth strategy, as we work towards our target of 20%+ revenue growth. Our plans are not limited to organic expansion and we will also continue to evaluate acquisition opportunities on an ongoing basis.
I continue to be positively surprised by the scale of opportunities in our markets. I am confident that Network's capabilities will best serve the industry in which we operate and we will deliver on our ambition to be the fastest growing and most innovative customer centric payments company in our regions."
Results Presentation
A virtual presentation for analysts and investors will be held today at 9:00am UK BST / 13:00pm GST with a conference call dial-in facility to facilitate live Q&A, as well as a listen only video webcast option. Please register for the conference call via the weblink below, where you will receive your personalised dial-in details.
· Conference call registration: https://secure.emincote.com/client/network-international/FY2021-preliminary-results/vip_connect
· Webcast listen only link: https://secure.emincote.com/client/network-international/FY2021-preliminary-results
A replay will be available through the same link shortly after the presentation finishes.
Contacts
|
Investor enquiries |
Media enquiries |
|
Network International |
Teneo |
|
Amie Gramlick, Head of Investor Relations |
Ben Foster and Andy Parnis |
|
NetworkInternational@Teneo.com |
Forward Looking Statements
This announcement contains certain forward-looking statements with respect to the financial condition, results or operation and businesses of Network International Holdings Plc. Such statements and forecasts by their nature involve risks and uncertainty because they relate to future events and circumstances. There are a number of other factors that may cause actual results, performance or achievements, or industry results, to be materially different from those projected in the forward-looking statements. These factors include general economic and business conditions; changes in technology; timing or delay in signing, commencement, implementation and performance of programmes, or the delivery of products or services under them; industry; relationships with customers; competition; and ability to attract personnel. You are cautioned not to rely on these forward-looking statements, which speak only as of the date of this announcement. We undertake no obligation to update or revise any forward-looking statements to reflect any change in our expectations or any change in events, conditions or circumstances.
Chief Executive Officer's Strategic Review
Business response to COVID-19
We have seen a sustained improvement in trading through 2021 and as we exited the year, KPIs had recovered to pre-pandemic levels or were already in growth. Whilst we have seen a number of COVID-related social and travel restrictions across our markets, there were no significant lockdowns or travel bans that materially impacted trading. As a result, we did not implement any COVID-specific operational, risk management, or financial response measures. Our payment processing activities continued uninterrupted, customers have operated under more normal trading conditions and colleagues have largely returned to our offices. Our financial position is strong, including leverage well within lending covenants.
Our markets are recovering and seeing an accelerated transition to digital payments
Our purpose, to help businesses and economies prosper by simplifying payments and commerce, has become even more relevant through the pandemic. We support the financial inclusion of communities and data indicates that COVID-19 has acted as an accelerant in the transition from cash to digital payments. In our major market of the UAE, general business activity improved through 2021, supported by a successful vaccination programme. There are minimal COVID-19 related restrictions and there has been a return to office-based working. As we exited the year, UAE PMI1 remained close to its peak, indicating an expanding economy. The return of tourism, an important GDP driver for the region, has also continued. Whilst our own trading data shows that international visitor spending in the UAE exceeds pre-pandemic levels, flight activity has not yet returned to normal2, indicating further recovery to come. In other core markets; Egypt's economic growth declined slightly in 20213, however, exposed sectors that had seen a contraction as a result of the pandemic (such as tourism, manufacturing, extractives) started to rebound in the second quarter and there is a positive growth economic outlook for 20223. Jordan and South Africa have been slower to recover but GDP growth is improving, according to World Bank3 reports. In South Africa, this partly reflects further COVID-19 waves and the challenge to the tourism industry from travel restrictions. Whilst our regions have not seen a full economic recovery, our trading results for core markets has exceeded the implied recovery. We believe this is a result of two factors: i) the accelerated market transition to digital payments (detailed in the charts here) and ii) our strategic and operational delivery (detailed through the rest of this report).
1.PMI is the Purchasing Manager's Index and stood at a level of 55.6 in Dec 2021. 2. Source: Citigroup research 3. World Bank economic updates for Egypt, Jordan and South Africa published during September and October 2021
Delivering on our focused growth strategy
Our growth ambition is supported by the multitude of opportunities open to us in our fast-growing markets. To harness those opportunities, we are taking two strategic approaches:
Accelerate: which focuses on growth in our largest markets such as the UAE, Saudi Arabia, South Africa, Egypt and Jordan, growing our customer base faster than we did previously.
Innovate: where we need to be at the forefront of the evolution in consumer payment trends and develop our capabilities beyond traditional cards and into the alternative payments landscape.
Strategic initiatives in action - Accelerate
Faster signup of merchants and financial institution customers
We are continuing to automate and digitise the process of onboarding our merchant and financial institution customers, which will drive faster signups, lower our costs and enhance the customer experience.
2021 highlights
|
• |
Record levels of merchant signups, including a number of key merchant signings away from competitors. |
|
• |
60-minute onboarding launched. |
|
• |
Rapid SME growth supported by dedicated relationship management, referral partnerships and bespoke services such as merchant lending. SME TPV represented 25% of total direct TPV in 2021, a significant improvement vs. 17% in 2019. |
|
• |
Strong online momentum, with TPV up 39% y/y (excl. Government & airline TPV). We started 2021 with three banks in six countries using our white label N-GeniusTM gateway and ended the year with seven banks, including a number of pan-regional customers, making our solution present in 27 countries. |
|
• |
17 new financial institution customer signings. |
|
• |
A number of major financial institution contract renewals, including Abu Dhabi Commercial Bank. |
Future focus
|
• |
Progressive automation and streamlining of merchant and financial institution signup processes. |
|
• |
Maintain momentum in new merchant signings across strategically significant sectors such as SME, travel and entertainment, and e-commerce. |
|
• |
Strategic identification and relationship development with financial institution targets. |
Grow the merchant base by lowering the cost of payment acceptance
We are lowering the cost of payment acceptance for merchants which will expand our potential marketplace, as well as support financial inclusion across our regions.
2021 highlights
|
• |
'Tap on phone' low-cost payment acceptance launched. The enhancement of our technology capabilities means our merchant customers can accept payments through an App on their own smartphone, without the need for a traditional Point-Of-Sale (POS) terminal. |
Future focus
|
• |
Rollout of 'Tap on phone' capability to merchants across the UAE and Jordan, as well as to our financial institution merchant solutions processing customers. |
|
• |
Target the cross-sell and launch of 'Tap on phone' with DPO merchants in South Africa. |
Access new revenue pools
New markets represent large, untapped revenue opportunities into which we can expand our services.
2021 highlights
|
• |
Focused on our market entry to the Kingdom of Saudi Arabia. The region offers a dynamic payments landscape, where digital payments penetration is only 18% of total payment transactions but seeing fast growth. There are also significant payment outsourcing opportunities, as 8 of the 10 largest banks in the region insource their processing operations1. |
|
• |
KSA market entry is on track and we will be launching services in the coming weeks, ahead of the original plan and below the original budget, where our total investment will be up to USD 10 million. |
|
• |
New processing customer signed and a healthy pipeline in place. |
Future focus
|
• |
We expect new customer revenues in 2022 and see the region as at least a cUSD50 million revenue opportunity in the medium-long term. |
|
• |
Issuer processing services to be available to customers in the coming weeks. |
|
• |
Focus on the signing of more new financial institution customers. |
|
• |
Explore direct-to-merchant services as a further growth opportunity. |
Further growth opportunity
We intend to begin providing payment services directly to merchants in Egypt, realising a further growth opportunity. Whilst we currently offer outsourced merchant and issuer payment services in Egypt to financial institutions, going directly to merchants will be a new service offering. Egypt has an attractive merchant acquiring market, with cUSD 22 billion in volumes (source: Edgar Dunn & Company). In 2022, we will enable the technology and systems to support services, seek the appropriate licences and establish a local sales team; with an expected initial capital investment of USD3-4 million, mainly relating to the procurement of physical point-of-sale terminals which we will offer alongside our 'tap on phone' solution.
Strategic initiatives in action - Innovate
Harness the power of partnerships
Through partnerships we can accelerate innovation, enhance our products and services in key growth areas and lower our cost of delivery.
2021 highlights
|
• |
Leveraged partners to launch new payment types that can be accepted by merchants, including: Rupay the Indian card scheme; UPI Payments, a popular App payment method for Indian consumers; mobile money wallets; and Buy Now Pay Later with Tabby. |
|
• |
Key Mastercard partnership initiatives included the launch of 'SME in a box' payment services for small merchants; delivering next-generation fraud authentication solutions for UAE merchants and financial institutions through 3-D Secure 2.0; and signing our first two financial institution customers to receive services from the Mastercard Digital Product Platform. |
|
• |
Launching Chat banking solutions to financial institutions in partnership with Infobip, which will enable account transaction enquiries, real-time customer service chat and push notifications to consumers. |
1. Four of the largest banks recently merged, hence the 10 vs. 12 previously announced.
Future focus
|
• |
Continue to leverage on our commercial partnership arrangement with Mastercard. |
|
• |
Further expand our range of merchant payment acceptance through partners, including loyalty points. |
|
• |
Explore partnerships which can widen our services to financial institution customers, with a focus on the procurement of B2B (business to business) finance solutions and KYC (know your customer) decisioning solutions. |
Add new revenue streams to every transaction
Value-added-services deliver more solutions to our customers and provide additional revenue streams for our business. We are also focused on adapting our services to specific sectors and local markets, bringing more value and insights to customers.
2021 highlights
|
• |
Launched Smartview interactive dashboards that provide valuable insights on consumer spending trends for merchants. |
|
• |
Enabled lending services to merchants through a partnership with the Commercial Bank of Dubai. |
|
• |
Data analytics and analysis services provided to a number of Government customers. |
Future focus
|
• |
Expand our lending services to larger merchants through partnership with financial institutions. |
|
• |
Take our data analytic capabilities to merchants in Jordan and across DPO's markets in Africa. |
|
• |
Support financial institution customers with analytic services that develop their understanding of consumer card portfolios and behaviour. |
Be the e-commerce champion in the region
Our acquisition of DPO Group, the largest e-commerce payments platform operating across Africa, provides us with direct-to-merchant services in 21 African markets. Network and DPO are natural partners and together, we will provide the widest range of payment acceptance options for merchants across the region whilst also consolidating our exposure to the fastest growing payments markets.
2021 highlights
|
• |
Acquisition completed at a revenue multiple of less than 11x. DPO performing ahead of our expectations, having delivered positive underlying EBITDA earlier than expected and 2021 twelve-month revenue of USD 26.9 million, +45.0% y/y. |
|
• |
Good progress in supporting future revenue synergies, with the signing of three cross-selling agreements for DPO's services to existing Network financial institution customers in Africa. |
|
• |
Launched 'DPO Pay' to UAE merchants, a convenient solution for SMEs which includes an online store and payment checkout. |
Future focus
|
• |
Leverage DPO's capabilities such as mobile money payment acceptance, fast digital onboarding and value-added services, to be the leading merchant payment services provider in our regions. |
|
• |
Cross-sell DPO's services to further existing Network financial institution customers and rollout 'DPO Pay' to our merchants in the UAE and Jordan, building foundations for generating revenue synergies from the acquisition. |
|
• |
Expand DPO's merchant services to more new markets across Africa. |
Divesting non-core strategic assets
As part of the strategy refresh, we took the opportunity to divest two non-core assets.
Holding in TG Cash sold for USD 74 million
We sold our 50% shareholding in Transguard Cash LLC (TG Cash) to Transguard Group LLC in November 2021 for USD 74.4 million. TG Cash provides end to end ATM and cash management services for banks and retailers in the UAE, which as an entirely cash focused business, was not aligned with our digital payments strategy. Proceeds from the sale will be deployed in the future to higher growth and value enhancing opportunities. In 2021, the Group's share of profit from TG Cash was USD 4.7 million and no cash dividends were received.
Exit of Mercury investment
Shortly after the 2021 year end we sold our 70% holding in domestic UAE card scheme, Mercury Payments Services LLC. The consideration was cUSD 3m before completion adjustments and the divestment will have an immaterial impact to future Group financials.
Launching our new ESG strategy
Our purpose is to help businesses and economies prosper by simplifying commerce and payments. We serve a range of diverse markets in terms of income levels, infrastructure development and connectivity. By enabling digital payment services in these markets and facilitating the journey away from cash, we believe that Network will be a powerful driver of financial inclusion, economic development and sustainable growth.
This year, alongside refreshing our corporate strategy, we have taken the opportunity to review our position on ESG (environment, social and governance matters) and to institute a more systematic approach. We have developed a new ESG strategy, underpinned by four clear strategic objectives covering: financial inclusion; responsible business practices; equal and fair treatment of employees; and our environmental footprint, where we are confident we will be carbon neutral on scope 1 and 2 emissions before 2030. These objectives are where we can drive the greatest sustained positive impact, in a manner consistent with the execution of our corporate strategy and purpose. Alongside the strategy, we have put in place an execution framework designed to advance progress against our objectives by aligning policies and incentives across our organisation.
Given the nature of our business activities and our view that positive impacts are most likely to be sustained where they are aligned with commercial goals, the natural social objective for us to focus on is financial inclusion. We define financial inclusion by reference to an individual's ability to participate fully in commerce and enjoy the financial, social, health and other fundamental benefits arising from this. A key element of participation is access to the banking system or other means of securely storing and exchanging value, whereby most of the population across the markets in which we operate is unbanked. Three particular initiatives which support our financial inclusion goals include:
· Launching direct-to-merchant payment services in Egypt, exclusively targeting smaller merchants with our low cost 'Tap on phone' payment acceptance capability, making digital payment acceptance economically viable for many small merchants for the first time.
· Partnering with a financial institution customer in Malawi to enable the onboarding of unbanked citizens through a branchless virtual service that harnesses Network's digital platform.
· Assisting the Jordanian Government and NGOs to support the use of mobile wallet payments by sections of the community who are currently unbanked, including low income and refugee communities.
More detail on our ESG strategy, including KPIs and targets, will be published as part of the Annual Report and Accounts in the coming weeks. In the coming year we will undertake further work to refine the KPI framework for each component of our ESG strategy, enhance our data collection processes and develop longer range, timebound emissions targets.
As a provider of digital payment solutions in the MEA, Network is building a strong foundation for the future. However, we will only succeed if we deliver this responsibly and adhere to the highest ESG standards. We must not only walk our talk but also raise the bar as we embark on this exciting journey.
In summary
Looking ahead, our focus remains on the delivery of our organic growth strategy, as we work towards our target of 20%+ revenue growth. Key milestones in the year ahead will include the successful launch of our services and more customer signings in the Kingdom of Saudi Arabia; further cross-selling contracts between our existing customers and DPO to support the delivery of revenue synergies; continuing to build our value-added services and new capabilities for both merchant and financial institution customers; and the launch of payment services directly to merchants in Egypt.
Given our conviction around the potential growth opportunities for the business and desire to maintain financial flexibility to invest, the Board has decided not to declare an ordinary dividend in respect of the 2021 financial year. This decision ensures capital allocation is prioritised towards growth and attractive returns for shareholders. Whilst organic expansion will remain our core driver, we will continue to seek options to drive further growth through disciplined selective acquisitions. Our capital allocation policy prioritises investment for growth, with investments and returns rigorously assessed against internal strategic and financial lenses, such as ROCE.
Outside of the tragic impacts of the Russia-Ukraine conflict, it brings new risks for the world economy that has yet to fully recover from the impact of the global pandemic. In our Merchant Solutions business, we have some exposure to cross-border spending from Russian and Ukrainian visitors and we have taken action to comply with all sanctions. Our direct exposure to Russian and Ukrainian spends as a proportion of total Group revenue is c1%. Whilst we are mindful of the potential future broader impacts of international tensions, we continue to expect Group revenue growth of 27-29%1 in 2022, as previously guided.
On behalf of our colleagues across the region, we are convinced that Network's capabilities will best serve the industry in which we operate and we will deliver on our ambition to be the fastest growing and most innovative customer centric payments company in the Middle East and Africa.
Nandan Mer
Chief Executive Officer
8 March 2022
1. Revenue guidance of 27-29% y/y is based on 2021 revenue of USD345 million, excluding three-month contribution from DPO, in line with previous guidance.
Financial Review
|
|
2021 |
2020 |
|
|
|
USD'0008 |
USD'000 |
y/y change |
|
Select financials |
|
|
|
|
Revenue |
352,245 |
284,844 |
23.7% |
|
Underlying EBITDA1,2 |
143,477 |
112,561 |
27.5% |
|
Underlying EBITDA margin (excl. share of associate)1 |
38.3% |
36.1% |
2.2pp |
|
Profit for the year |
56,558 |
5,598 |
910.3% |
|
Underlying net income1 |
63,192 |
34,664 |
82.3% |
|
Underlying earnings per share (USD cents)1,9 |
11.6 |
6.8 |
70.6% |
|
Reported earnings per share (USD cents)3 |
10.4 |
1.2 |
766.7% |
|
Underlying free cash flow (underlying FCF)1 |
61,908 |
51,790 |
19.5% |
|
Cash flow from operating activities4 |
17,405 |
107,500 |
(83.8)% |
|
Leverage1,5 |
0.9x |
0.0x |
0.9x |
|
|
|
|
|
|
Segmental results |
|
|
|
|
Middle East revenue |
247,683 |
198,224 |
25.0% |
|
Africa revenue |
100,239 |
80,020 |
25.3% |
|
Other revenue6 |
4,323 |
6,600 |
(34.5)% |
|
Middle East contribution margin1 |
69.3% |
65.5% |
380bps |
|
Africa contribution margin1 |
68.1% |
67.9% |
20bps |
|
|
|
|
|
|
Business line results |
|
|
|
|
Merchant Solutions revenue |
160,449 |
109,415 |
46.6% |
|
Issuer Solutions revenue |
182,428 |
165,011 |
10.6% |
|
Other revenue6 |
9,368 |
10,418 |
(10.1)% |
|
|
|
|
|
|
Key Performance Indicators7 |
|
|
|
|
Total Processed Volume (TPV) (USD m) |
42,814 |
33,540 |
27.7% |
|
Total number of credentials hosted (m) |
16.6 |
16.2 |
2.5% |
|
Total number of transactions (m) |
979.9 |
758.1 |
29.3% |
1. This is an Alternative Performance Measure (APM). See notes 4 and 5 of the consolidated financial information for APMs definition and the reconciliations of reported figures to APMs.
2. We announced the strategic exit of our stake in TG Cash on 10 November 2021. There is therefore a 10-month contribution from associate as part of underlying EBITDA.
3. Average share count has increased compared with the prior year as a result of the issuance of 11.1 million new shares to the shareholders of DPO Group following the completion of the acquisition. Underlying earnings per share is defined as underlying net income attributable to the shareholders' divided by the weighted average numbers of the ordinary shares during the relevant financial year.
4. Cash flow from operating activities is impacted by the movement in settlement related balances. Refer to page 21 for details.
5. Refer to page 25 for the leverage ratio computation and reconciliation of net debt figures to the consolidated financial information. For FY 2020, leverage was zero due to the additional funds available from the equity raise relating to the DPO acquisition.
6. Other revenue primarily includes revenues recognised relating to Mastercard strategic partnership, cash advance fees on withdrawals from ATMs, and foreign exchange gains / (losses) arising from the Merchant and Issuer Solutions business lines.
7. For KPIs definition, please refer to page 27.
8. DPO was acquired on 28 September 2021. There is therefore a three-month contribution to the 2021 income statement financials, cash flows and Total Processed Volume KPI.
9. Underlying earnings per share is defined as underlying net income attributable to the shareholders' divided by the weighted average numbers of the ordinary shares during the relevant financial year.
Strategic milestones and their impact on the financial statements
i. Completion of the acquisition of DPO Group (DPO). Following the completion of the acquisition in September 2021, DPO continues to trade well, with twelve-month 2021 TPV of USD 3.6 billion, +55.2% y/y or +42.1% in constant FX; revenue of USD 26.9 million, +45.0% y/y or +32.9% in constant FX; and EBITDA of USD 4.4 million. The 2021 Group income statement includes a three-month contribution from DPO, with TPV of USD 1.1 billion, revenue of USD 7.5 million and EBITDA of USD 1.7 million. The income statement also includes amortisation of acquired intangibles of USD 1.7 million as part of Specially Disclosed Items. Further details are contained within the relevant sections of the Financial Review.
ii. Divestment of our 50% stake in Transguard (TG) Cash. The divestment of our stake in TG Cash was completed in November 2021 for USD 74.4 million. The Group income statement includes i) a USD 4.7 million share of profit from an associate, representing the 10-month contribution prior to the sale of the stake; and ii) a gain on disposal of USD 10.2 million. Further details on page 18.
iii. Disposal of our 70% holding in domestic UAE card scheme, Mercury Payments Services LLC (Mercury). We entered an agreement to sell our 70% holding in Mercury for a consideration of cUSD 3 million, before completion adjustments. The agreement to sell the asset was signed in December 2021 and subsequently, the sale transaction was completed in January 2022. Therefore, the financial results for Mercury remain included in the Group's 2021 financial performance. As per the IFRS requirement, Mercury has been presented as 'Held for sale' in the statement of financial position as at 31 December 2021.
Total revenue
Trends vs 2020: Total revenue in the year increased by 23.7% y/y (similar on a constant currency basis1) to USD 352.2 million (2020: USD 284.8 million). This includes a USD 7.5 million revenue contribution from DPO. Excluding DPO, revenue grew 21.0% y/y.
Trends vs 2019: We also provide our revenue growth rates compared to 2019 as a more informative way to demonstrate the recovery of the business following the pandemic. Total revenue was 5% higher compared to 2019. Excluding DPO, total group revenue was up 3%.
Revenue results by operating segment
Middle East
The Group's largest segment is the Middle East, where revenues are generated from both Merchant and Issuer Solutions, representing 70% of total revenue (2020: 70%). The UAE, our largest market, has seen a significant improvement in consumer confidence following a successful vaccination programme and the return of tourism. In Jordan, our second largest market, trends continued to improve through the year, although lockdown restrictions and curfews were not fully lifted until the second half.
Trends vs 2020: Revenue increased by 25.0% y/y to USD 247.7 million (2020: USD 198.2 million). Growth momentum improved from flat y/y in Q1 2021, to significant growth y/y in Q2 2021, helped by the easier comparative in the prior year, with H1 revenue of USD 112.4 million up 18.9% y/y. In the second half, revenue increased period on period to USD 135.3 million, with an acceleration in growth momentum, up 30.4% y/y, which is reflective of, but not limited to; the regional economic recovery from the pandemic, improved travel confidence from tourists and seasonal activities including major sporting events and Dubai EXPO.
1. For constant currency definition, please refer to page 27.
Trends vs 2019: Compared with 2019, Middle East revenue grew 1%. In the first half revenue was broadly flat compared with 2019, where Merchant Solutions performance remained below pre-COVID levels, largely linked to the recovering level of tourism in the region, whilst Issuer Solutions showed good growth. In the second half, all business lines and KPIs continued to improve, with revenue performance supported by the regional recovery, with overall growth of 2% in the second half, compared with H2 2019.
Contribution1 for the Middle East segment increased by 32% to USD 171.6 million (2020: USD 130.0 million), with contribution margin1 up 380 bps to 69.3% (2020: 65.5%). This was supported by improving volumes and take rates, alongside a largely fixed cost base, reflecting the operating leverage inherent in the business.
Africa
The Group's Africa segment contributed 28% of total revenue in the period (2020: 28%). Since the onset of the pandemic, relative performance in Africa has been stronger than the Middle East due to the business' weighting towards Issuer Solutions, which is more resilient due to the nature of its revenue streams. Going forward, the acquisition of DPO will increase the proportion of Merchant Solutions revenue in the region.
Trends vs 2020: Africa revenue increased by 25.3% y/y to USD 100.2 million (2020: USD 80.0 million), including the USD 7.5 million contribution from DPO. Excluding DPO, revenue growth was 15.9% y/y, with the business seeing slightly stronger growth in the first half of the year.
Trends vs 2019: Revenue increased by 11%, where we also saw good growth across a number KPIs; including the number of credentials hosted and TPV. Excluding DPO, revenue growth was 2% vs. 2019. Growth excluding DPO was in the high single digit levels vs. 2019 through the first three quarters, whilst the final quarter was impacted by the presence of one-off revenue streams, where a number of financial institution customers undertook card portfolio renewals and new issuance. On a sub-regional level, trading in Northern Africa was relatively stronger than Southern Africa through the year.
Contribution1 for the Africa segment increased 25.7% y/y, to USD 68.3 million (2020: USD 54.3 million), with margins up by 20 bps y/y to 68.1% (2020: 67.9%), reflecting a continuation of the strong revenue growth and a change in the revenue mix.
Other revenue, not allocated to an Operating Segment
The Group's other revenue was USD 4.3 million (2020: USD 6.6 million). This represents various solutions introduced as part of the Mastercard strategic partnership. Our strategic partnership with Mastercard continues to progress well and together we are making significant strides in accelerating the acceptance of digital payments across all our markets.
1. This is an Alternative Performance Measure (APM). See note 4 of the consolidated financial information for APMs definition and the reconciliations of reported figures to APMs.
Revenue results by business line
We serve customers via two core business lines; Merchant Solutions and Issuer Solutions.
|
|
Growth compared with 2020 |
Growth compared with 2019 |
||||||||
|
|
Q1 |
Q2 |
Q3 |
Q4a |
FYb |
Q1 |
Q2 |
Q3 |
Q4a |
FYb |
|
Total revenue |
1% |
36% |
19% |
39% |
24% |
1% |
4% |
(1)% |
13% |
5% |
|
Merchant Solutions revenue |
(3)% |
86% |
38% |
82% |
47% |
(11)% |
4% |
(3)% |
25% |
5% |
|
of which direct TPV |
(8)% 2 |
69% |
22% |
51% |
29% |
(15)% |
(10)% |
(3)% |
24% |
(1)% |
|
Issuer Solutions revenue |
5% |
15% |
9% |
13% |
11% |
7% |
5% |
2% |
(2)% |
3% |
a.Total revenue, Merchant Solutions and Direct TPV Q4 and FY growth numbers include three-month contribution from DPO group b. Growth data presented on a like-for-like basis, removing the impact of one additional day in the calendar month of February 2020
Merchant Solutions revenue
Merchant Solutions business line is focused on our direct-to-merchant payment services, alongside acquirer processing activities for financial institutions. Historically, revenues have been primarily generated in the UAE and Jordan, although going forward, the acquisition of DPO expands our direct-to-merchant presence across Africa.
Trends vs 2020: Revenue, which represents 46% of total revenue (2020: 38%), grew 46.6% y/y to USD 160.4 million (2020: USD 109.4 million), including a USD7.5 million contribution from DPO. Excluding DPO, growth was 39.8% y/y. Trends continued to improve as we progressed through the year, despite the tough comparative as we entered the second half. Absolute revenue improved significantly in the second half, supported by the accelerating trends in the digital payments market, improved consumer confidence and an increase in the inflow of tourism into the UAE. Overall, Total Processed Volume (TPV)1 increased by 27.7% y/y to USD 42.8 billion (2020: USD 33.5 billion). Excluding DPO, Total TPV1 growth was 24% y/y.
Trends vs 2019: Revenue including DPO grew by 5% and Total TPV1 declined by (2)%. Excluding DPO, revenue was flat and Total TPV was (5)% vs. 2019. Within this, domestic TPV, which represents spending from consumers domiciled in the region, remained below pre-pandemic levels in the first half of the year. As we moved into the second half and following a strong rebound in confidence, in line with the broader economic recovery, domestic spends grew strongly compared to 2019. International TPV, which represents consumer spending by international visitors, outperformed our expectations through the year and was in strong growth compared with pre-pandemic levels as we exited the year. Overall positive trends in TPV performance through the second half of the year were supported by the peak holiday season in Q4, sporting events and Dubai EXPO. We also continued to see an acceleration in total online TPV, with growth (excluding Government and airlines) of 112% compared with 2019.
1. For KPIs definition, please refer to page 27.
Trends in directly acquired Total Processed Volume (TPV)1
|
Growth in directly acquired TPV, y/y |
Jan |
Feb |
Mar |
Apr |
May |
Jun |
Jul |
Aug |
Sep |
Oct |
Nov |
Dec |
|
Total |
(18)% |
(17)% |
19% |
104% |
70% |
44% |
19% |
21% |
26% |
39% |
39% |
31% |
|
of which Retail |
(7)% |
0% |
65% |
274% |
82% |
45% |
10% |
13% |
34% |
46% |
31% |
27% |
|
of which Supermarkets |
8% |
8% |
(17)% |
(7)% |
(1)% |
0% |
(5)% |
0% |
2% |
4% |
(2%) |
1% |
|
of which Travel & Entertainment |
(44)% |
(46)% |
36% |
669% |
386% |
211% |
101% |
53% |
85% |
115% |
119% |
61% |
|
of which Other (Government, Healthcare & Education, Other) |
(13)% |
(14)% |
16% |
87% |
57% |
30% |
11% |
21% |
16% |
23% |
28% |
28% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
(18)% |
(17)% |
19% |
104% |
70% |
44% |
19% |
21% |
26% |
39% |
39% |
31% |
|
of which Domestic |
(7)% |
(8)% |
17% |
78% |
50% |
28% |
9% |
12% |
16% |
19% |
18% |
17% |
|
of which International |
(47)% |
(47)% |
35% |
753% |
530% |
337% |
206% |
155% |
160% |
249% |
204% |
104% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Growth in directly acquired TPV vs 2019 |
Jan |
Feb |
Mar |
Apr |
May |
Jun |
Jul |
Aug |
Sep |
Oct |
Nov |
Dec |
|
Total |
(14)% |
(18)% |
(14)% |
(17)% |
(8)% |
(5)% |
(11)% |
2% |
0% |
7% |
12% |
16% |
|
of which Retail |
4% |
(3)% |
1% |
(5)% |
5% |
2% |
0% |
5% |
6% |
16% |
24% |
27% |
|
of which Supermarkets |
13% |
19% |
17% |
16% |
5% |
11% |
6% |
14% |
7% |
14% |
9% |
10% |
|
of which Travel & Entertainment |
(44)% |
(53)% |
(48)% |
(47)% |
(27)% |
(30)% |
(32)% |
(30)% |
(22)% |
(3)% |
3% |
5% |
|
of which Other (Government, Healthcare & Education, Other) |
(9)% |
(8)% |
(3)% |
(8)% |
(6)% |
4% |
(8)% |
15% |
8% |
8% |
13% |
20% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
(14)% |
(18)% |
(14)% |
(17)% |
(8)% |
(5)% |
(11)% |
2% |
0% |
7% |
12% |
16% |
|
of which Domestic |
(3)% |
(3)% |
0% |
(6)% |
(4)% |
2% |
(1)% |
14% |
9% |
11% |
14% |
17% |
|
of which International |
(44)% |
(55)% |
(52)% |
(49)% |
(26)% |
(30)% |
(48)% |
(43)% |
(31)% |
(4)% |
6% |
12% |
1. Growth rates represent direct TPV performance of UAE and Jordan, excludes TPV from DPO and our processing business
Issuer Solutions revenue
Issuer Solutions business line supports our financial institution and fintech customers with the outsourced management and processing of consumer payment credentials. Revenue for this business line is typically more resilient than Merchant Solutions, due to the nature of revenue streams, revenues which are not linked with transaction volumes and the presence of some customer agreements with contractual minimums.
Trends vs 2020: Revenue, which represents 52% of total revenue (2020: 58%), grew 10.6% y/y to USD 182.4 million (2020: USD 165.0 million). Revenue growth trends were broadly consistent through the year, with the number of transactions seeing particularly good growth y/y. The number of credentials hosted was up slightly y/y, with growth impacted by a higher base in the prior year; as well as a change in the billing mechanism of one of our large bank customers, as previously disclosed. While performance demonstrates solid trading across all regions, Africa delivered particularly strong growth relative to the Middle East, reflective of the faster growing underlying markets. The momentum in new business wins with financial institutions remains positive and is encouraging, resulting in revenue from a number of new contracts, renewed portfolios of credentials and value-added-services.
Trends vs 2019: Compared with 2019 revenue grew 3%, with broadly balanced performance across both the Middle east and Africa. Revenue growth in 2021 reflects a strong comparator in 2019, where a number of financial institutions undertook card portfolio renewals and new issuance, alongside the presence of some one-off revenue streams. Credentials hosted saw broadly stable growth throughout the year, with the number of transactions seeing an acceleration in growth through the second half.
Other revenue not allocated to a business line
The Group's other revenue of USD 9.4 million, is mainly derived from the Mastercard strategic partnership, cash advance fees on withdrawals from ATMs, foreign exchange losses arising from the Merchant and Issuer Solutions business lines.
Expenses and other line items
|
|
|
2021 |
|
|
2020 |
|
|
|
|
|
USD'000 |
|
|
USD'000 |
|
|
|
|
Reported |
Specially disclosed items |
Underlying results1 (A) |
Reported |
Specially disclosed items |
Underlying results1 (B) |
Change (A&B) |
|
Salaries and allowances |
80,966 |
|
80,966 |
71,965 |
- |
71,965 |
12.5% |
|
Bonus and sales incentives |
11,557 |
|
11,557 |
3,787 |
- |
3,787 |
205.2% |
|
Share based compensation |
7,550 |
(3,657) |
3,893 |
10,870 |
(10,445) |
425 |
816.0% |
|
Terminal and other benefits |
7,884 |
|
7,884 |
10,311 |
- |
10,311 |
(23.5)% |
|
Total personnel expenses |
107,957 |
(3,657) |
104,300 |
96,933 |
(10,445) |
86,488 |
20.6% |
|
Technology and communication costs |
55,266 |
- |
55,266 |
44,288 |
- |
44,288 |
24.8% |
|
Third-party costs |
23,523 |
- |
23,523 |
23,518 |
- |
23,518 |
(0.0)%
|
|
Legal and professional fees |
26,933 |
(7,261) |
19,672 |
22,102 |
(7,696) |
14,406 |
36.6% |
|
Provision for expected credit loss |
393 |
- |
393 |
2,183 |
- |
2,183 |
(82.0)% |
|
Other general and administrative expenses |
14,076 |
- |
14,076 |
11,083 |
- |
11,083 |
27.0% |
|
Selling, operating and other expenses |
120,191 |
(7,261) |
112,930 |
103,174 |
(7,696) |
95,478 |
18.3% |
|
Depreciation and amortisation |
60,958 |
(5,885) |
55,073 |
51,537 |
(4,204) |
47,333 |
16.4% |
|
Share of depreciation from associate |
3,768 |
- |
3,768 |
3,863 |
- |
3,863 |
(2.5)% |
|
Total depreciation and amortisation |
64,726 |
(5,885) |
58,841 |
55,400 |
(4,204) |
51,196 |
14.9% |
|
Net Interest expense |
13,708 |
- |
13,708 |
21,669 |
- |
21,669 |
36.7% |
|
Unrealised foreign exchange losses |
910 |
- |
910 |
328 |
- |
328 |
177.4% |
|
Taxes |
6,826 |
- |
6,826 |
4,704 |
- |
4,704 |
45.1% |
1. This is an Alternative Performance Measure (APM). See note 4 of the consolidated financial information for APMs definition and the reconciliations of reported figures to APMs.
Personnel expenses: Total personnel expenses were USD 108.0 million (2020: USD 96.9 million), including SDIs of USD 3.7 million (2020: USD 10.4 million). Underlying personnel expenses1 were USD 104.3 million (2020: USD 86.5 million), up 20.6% y/y, driven by; several components including; 1) headcount growth in technology and operations to support business growth, and to deliver on our growth initiatives; 2) return of discretionary bonus accrual, which was not present in the prior year; and 3) a higher share-based compensation for LTIP charge compared with 2020, linked with the business' stronger performance.
Selling, operating and other expenses: Total selling, operating and other expenses were USD 120.2 million (2020: USD 103.2 million), including SDIs of USD 7.3 million (2020: USD 7.7 million). Underlying selling, operating and other expenses1 grew by 18.3% to USD 112.9 million (2020: USD 95.5 million). The higher operating expenses reflect costs relating to the separation of the shared data centre from Emirates NBD and technology enhancements to support the strengthening and development of our products and capabilities, particularly within our direct-to-merchant acquiring business. This mainly relates to improving merchant on boarding which helps to accelerate the signup of SME merchants, which is a key strategic focus.
Underlying EBITDA1
Underlying EBITDA1 increased by 27.5% to USD 143.5 million (2020: USD 112.6 million). Within this, DPO contributed USD 1.7 million. Underlying EBITDA margin1 (which excludes the Group's share of associate, Transguard Cash) was 38.3% (2020: 36.1%). Underlying EBITDA margin improved by 2.2 pp y/y, which reflects the group's improving revenue trajectory, accompanied by operating leverage inherent in the business, whilst ensuring we continue to invest in future growth. The table below presents a reconciliation of the Group's reported profit to underlying EBITDA1.
|
|
2021 |
2020 |
|
|
USD'000 |
USD'000 |
|
Profit for the year |
56,558 |
5,598 |
|
Depreciation and amortisation |
60,958 |
51,537 |
|
Write-off of unamortised debt issuance cost |
- |
6,721 |
|
Net interest expense |
13,708 |
21,669 |
|
Unrealised foreign exchange losses |
910 |
328 |
|
Taxes |
6,826 |
4,704 |
|
Gain on the disposal of an associate |
(10,169) |
- |
|
Share of depreciation from associate |
3,768 |
3,863 |
|
Specially disclosed items affecting EBITDA |
10,918 |
18,141 |
|
Underlying EBITDA1 |
143,477 |
112,561 |
Depreciation and amortisation
The Group's total depreciation and amortisation (D&A) charge, including the share of depreciation from associate Transguard Cash, increased by USD 9.3 million to USD 64.7 million (2020: USD 55.4 million). This also includes a SDI of USD 5.9 million (2020: USD 4.2 million) for the amortisation of acquired intangibles. The Group's underlying D&A1 charge grew by 14.9% to USD 58.8 million (2020: USD 51.2 million). The increase reflects the D&A charge on new assets capitalised during the year as well as the annualised impact of assets capitalised in the prior year, including point-of-sale terminals, alongside other products and capabilities to expand and run our Group operations.
1. This is an Alternative Performance Measure (APM). See note 4 of the consolidated financial information for APMs definition and the reconciliations of reported figures to APMs.
Net interest expense
The Group's net interest expense decreased by USD 8.0 million to USD 13.7 million (2020: USD 21.7 million). The overall decline in the net interest expense largely reflects a lower interest rate charged on our debt facilities, in-line with our leverage-based pricing grid.
|
|
2021 USD'000 |
2020 USD'000 |
Comments |
|
Interest Expense on: |
|
|
|
|
Term loan facilitya |
8,158 |
12,935 |
Represents interest and other fees. Average balance in 2021: USD 377ma. Average interest rate of 2.2%a. Average balance in 2020: USD 354m, Average interest rate of 3.4%. |
|
Revolving credit facility |
1,000 |
1,837 |
Represents interest and other fees. Average drawdown in 2021: USD 35m. Average interest rate of 2%. Average drawdown in 2020: USD 55m. Average interest rate of 3.1%. |
|
Bank overdrafts for working capital |
1,678 |
3,780 |
UAE working capital facility contributes c 59% of the associated costs. Average utilisation in 2021 c.USD 20 m, average interest rate of 2.6 %. Average utilisation in 2020 c.USD75m, average interest rate 4.1%. Remaining c41% of the cost is associated with working capital facilities in Jordan and Egypt. |
|
Debt Issuance amortisation |
1,444 |
1,642 |
Amortisation of debt issuance costs associated with term loan and revolving credit facility.
|
|
Other Interest expense |
1,812 |
1,916 |
Relates to interest charges on lease liabilities, mainly on liabilities recognised on right of use assets.
|
|
Interest income |
(384) |
(441) |
Relates to interest income on bank deposits |
|
Net Interest Expense |
13,708 |
21,669 |
|
a. Syndicated debt facility of USD 375 M (excluding term loan acquired on acquisition of DPO) was refinanced during 2020. The current interest rates associated with this facility are 3 month EIBOR +1.7% on the AED tranche and 3 month LIBOR + 1.95% on the USD and Islamic tranche. Covenants are set at 3.5x net debt: underlying EBITDA
Contribution and gain on the disposal of associate, TG Cash
We divested our 50% stake in TG Cash in November 2021, generating total proceeds of USD 74.4 million. The gross value of the asset at the date of disposal amounted to USD 64.2 million, resulting in a gain of USD 10.2 million which is recognised in the consolidated statement of profit or loss. A USD 4.7 million share of profit from associate is also included in the income statement, representing the 10-month contribution prior to the sale of the stake.
Unrealised foreign exchange losses
Unrealised FX losses relate to the translation of the Group's foreign currency denominated assets and liabilities. The charge during the year amounted to USD 0.9 million (2020: USD 0.3 million).
Taxes
The Group's total tax charge during the period was USD 6.8 million (2020: USD 4.7 million) with an underlying effective tax rate1 of 9.7%, as expected (2020: 11.9%). The reported effective tax rate was 10.8% (2020: 45.7%) in the year. The Group's reported effective tax rate was significantly higher in 2020, reflecting lower reported profit before tax, mainly due to total Group revenue being impacted by COVID-19.
1. This is an Alternative Performance Measure (APM). See note 4 of the consolidated financial information for APMs definition and the reconciliations of reported figures to APMs.
Profit for the year, underlying net income1, reported and underlying EPS1
Profit for the year totalled USD 56.5 million (2020: USD 5.6 million). Underlying net income1 increased by 82.3% to USD 63.2 million (2020: USD 34.7 million). The table below shows the reconciliation of the profit for the year to underlying net income1.
|
|
2021 |
2020 |
|
|
USD'000 |
USD'000 |
|
Profit for the year |
56,558 |
5,598 |
|
Write-off of unamortised debt issuance cost |
- |
6,721 |
|
Gain on the disposal of an associate |
(10,169) |
- |
|
Specially Disclosed Items affecting EBITDA |
10,918 |
18,141 |
|
Specially Disclosed Items affecting net income |
5,885 |
4,204 |
|
Underlying net income1 |
63,192 |
34,664 |
Reported earnings per share for the period was 10.4 USD cents (2020: 1.2 USD cents) and underlying earnings per share (EPS)1 increased by 70.6% to 11.6 USD cents (2020: 6.8 USD cents). The share count increased during the year to reflect the issuance of 11,101,690 shares to the shareholders of DPO following the completion of the acquisition. As a result, the weighted average share count during the year was 552,859,065 (2020: 520,833,333). The number of shares at 31 December 2021, totalled 561,101,690 (2020: 550,000,000).
|
|
2021 |
2020 |
|
Underlying net income1 (USD'000) |
63,192 |
34,664 |
|
Non-controlling interest (loss) (USD'000) |
880 |
557 |
|
Underlying net income - attributable to equity holders (USD' 000) |
64,072 |
35,221 |
|
Weighted average number of shares ('000) |
552,859 |
520,833 |
|
Underlying earnings per share1 (USD cents) |
11.6 |
6.8 |
Specially Disclosed items (SDIs)1
SDIs are items of income or expenses that have been recognised in a given period which management believes, due to their materiality and being one-off or exceptional in nature, should be disclosed separately to give a more comparable view of underlying financial performance.
SDIs affecting EBITDA during the year were USD 10.9 million (2020: USD 18.1 million) and SDIs affecting net income were USD 5.9 million (2020: USD 4.2 million).
The key SDIs affecting EBITDA in the period were:
1. Share-based compensation: Includes the charge relating to the Management Incentive Award Plan, Initial Public Offering (IPO) Cash Bonus, and certain Long-Term Incentive Plans awarded to Group wide eligible employees, all of which are specific payments relating to the Group's IPO. These charges will not recur after 2021.
2. M&A costs: This includes costs incurred during the period for due diligence, advisory, and execution in relation to the acquisition of DPO.
1. This is an Alternative Performance Measure (APM). See note 4 of the consolidated financial information for APMs definition and the reconciliations of reported figures to APMs.
The key SDIs affecting net income in the period were:
Amortisation of acquired intangibles: Amortisation of acquired intangibles are treated as SDIs. These charges are based on judgements about their value and economic life and are the result of the application of acquisition accounting. Whilst revenue recognised in the income statement does benefit from the underlying intangibles that have been acquired, the amortisation costs bear no relation to the Group's underlying operational performance. The amortisation of acquired intangibles is not included in the analysis of segment performance used by the Chief Operating Decision Maker. The amortisation charge on the intangible assets recognised in the Group's consolidated statement of financial position is on account of the following acquisitions:
a) USD 4.2 M - from the acquisition of Emerging Market Payments Services in 2016. This will be fully amortised by H1 2023.
b) USD 1.7 M - from the acquisition of DPO Group in 2021, representing a three-month charge following the completion of the acquisition in September 2021. We expect the annual run rate, from 2022, to be cUSD 7 million, amortised over a 5-10 year period.
|
|
|
|
2021 USD'000 |
2020 USD'000 |
|
Items affecting EBITDA |
|
|
|
|
|
Share-based compensation |
|
3,657 |
10,445 |
|
|
M&A costs |
|
7,261 |
7,696 |
|
|
Total SDIs affecting EBITDA |
|
10,918 |
18,141 |
|
|
Items affecting Net Income |
|
|
|
|
|
Amortisation of acquired intangibles* |
|
5,885 |
4,204 |
|
|
Total SDIs affecting net income |
|
5,885 |
4,204 |
|
|
Total specially disclosed items |
|
16,803 |
22,345 |
|
* Deferred tax liability is recognised on the acquired intangibles identified as part of the acquisition accounting for DPO acquisition, and resultant movement in the deferred tax liability during the period is included in the income statement under 'taxes', impact of which is not significant.
Cash flow
The Group's net cash flow from operating activities was USD 17.4 million (2020: USD 107.5 million), a decrease of USD (90.1) million, largely reflecting the movement in settlement related balances, which is discussed in more detail within the working capital section of this review. The Group's net cash flow from operating activities, before settlement related balances, was USD 86.1 million (2020: USD 88.2 million), (2)% lower than 2020.
The Group's net cash outflow from investing activities was USD (178.9) million (2020: USD (49.0) million), largely reflecting the purchase consideration of DPO, which was partially offset by proceeds from the sale of our stake in TG Cash.
The Group's net cash movement from financing activities was USD (10.7) million (2020: USD 325.2 million), mainly reflecting the purchase of the shares under the Long-Term Incentive Plan (LTIP) for eligible Group employees and lease payments. The prior year saw an inflow of USD 325 million, which included the proceeds from the issuance of new shares (USD 258.7 million, net of share issuance expense) and proceeds drawn down from borrowing facilities as a precautionary measure during the initial phase of the pandemic (USD 79.6 million, net of debt issuance cost), offset by the share purchased for employees' long term incentive plan (USD 10.4 million).
|
|
2021 |
2020 |
|
|
|
USD'000 |
USD'000 |
Change |
|
Net cash flows from operating activities before settlement related balances |
86,107 |
88,214 |
(2)% |
|
Changes in settlement related balances (refer page 23 for detail) |
(68,702) |
19,286 |
(456)% |
|
Net cash movement from operating activities |
17,405 |
107,500 |
(84)% |
|
Net cash movement from investing activities |
(178,913) |
(49,038) |
265% |
|
Net cash movement from financing activities |
(10,743) |
325,229 |
(103)% |
Underlying free cash flow1
Underlying free cash flow1 (underlying FCF) was USD 61.9 million (2020: USD 51.8 million), 19% higher than last year, driven by underlying EBITDA1 compared with the prior year partially offset by changes in working capital before settlement related balances and higher capital investment.
|
|
2021 |
2020 |
Change |
|
|
USD'000 |
USD'000 |
|
|
Profit for the year |
56,558 |
5,598 |
910.3% |
|
Depreciation and amortisation |
60,958 |
51,537 |
18% |
|
Write-off of unamortised debt issuance cost |
- |
6,721 |
- |
|
Net interest expense |
13,708 |
21,669 |
(37)% |
|
Unrealised foreign exchange losses |
910 |
328 |
177% |
|
Taxes |
6,826 |
4,704 |
45% |
|
Gain on the disposal of an associate |
(10,169) |
- |
|
|
Share of depreciation of associate |
3,768 |
3,863 |
(2)% |
|
Specially disclosed Items affecting EBITDA |
10,918 |
18,141 |
(40)% |
|
Underlying EBITDA1 |
143,477 |
112,561 |
27% |
|
Changes in working capital before settlement related balances |
(1,074) |
19,581 |
(105)% |
|
Taxes paid |
(4,842) |
(6,058) |
(20)% |
|
Total capital expenditure |
(56,272) |
(46,470) |
21% |
|
Specially disclosed Items affecting EBITDA |
(10,918) |
(18,141) |
(40)% |
|
Adjustment for share of EBITDA of associate, less dividend |
(8,463) |
(9,683) |
(13)% |
|
Underlying free cash flow1 |
61,908 |
51,790 |
19% |
1. This is an Alternative Performance Measure (APM). See note 4 of the consolidated financial information for APMs definition and the reconciliations of reported figures to APMs.
Reconciliation of cash flows from operating activities to underlying free cash flow
|
|
2021 |
2020 |
|
|
|
USD'000 |
USD'000 |
Change |
|
Net cash inflows from operating activities |
17,405 |
107,500 |
(65)% |
|
Changes in settlement related balances, long term receivables and other liabilities |
91,623 |
(19,942) |
- |
|
Charge for share based payment |
(4,518) |
(4,070) |
11% |
|
Interest Paid |
14,064 |
16,985 |
(17)% |
|
Others* |
(394) |
(2,213) |
(82)%
|
|
Underlying free cash flow before capital expenditure |
118,180 |
98,260 |
20% |
|
Total capital expenditure |
(56,272) |
(46,470) |
21% |
|
Underlying free cash flow1 |
61,908 |
51,790 |
19% |
* Others include provision for expected credit losses and foreign exchange losses
Capital expenditure
|
|
2021 |
2020 |
|
|
|
USD'000 |
USD'000 |
Change |
|
Total capital expenditure |
56,272 |
46,470 |
21% |
|
Core capital expenditure: |
43,955 |
36,773 |
19% |
|
of which is maintenance capital expenditure1 |
16,015 |
11,974 |
34% |
|
of which is growth capital expenditure1 |
27,940 |
24,799 |
13% |
|
Saudi Arabia market entry |
5,006 |
634 |
690% |
|
Separation of shared services from Emirates NBD |
7,311 |
9,063 |
(19)% |
Maintenance capital expenditure is spending on additions or improvements to the existing operations of the Group. Maintenance capital expenditure was USD 16.0 million (2020: USD 12.0 million) and includes the enhancement and upkeep of our technology infrastructure, including databases and system upgrades.
Growth capital expenditure is spending associated with delivering revenue growth, including but not limited to the onboarding of new customers, expansion of services with existing customers or the development of new product offerings. Growth capital expenditure was USD 27.9 million in the year (2020: USD 24.8 million) and was mainly composed of investment in point-of-sale terminals to drive volume growth and accelerate SME onboarding.
Capital expenditure to support our entry into the Kingdom of Saudi Arabia amounted to USD 5.0 million (2020: USD 0.6 million). We continue to expect to deploy a total of up to USD 10 million to support our market entry, much lower than our original expectations, with the balance to be invested in 2022.
Capital expenditure for the separation of shared services from Emirates NBD largely reflects the migration of our data centre into an independent location. This totalled USD 7.3 million in the year (2020: USD 9.1 million). We have now invested a total of cUSD 17 million in the separation process.
1. This is an Alternative Performance Measure (APM). See note 4 of the consolidated financial information for APMs definition and the reconciliations of reported figures to APMs.
Reconciliation of capital expenditure to capital spend in the consolidated cash flows
|
|
2021 USD'000 |
2020 USD'000 |
Change |
|
Total Capital expenditure |
56,272 |
46,470 |
21% |
|
Goods/services received in the current period, but yet to be paid |
(14,723) |
(12,639) |
16% |
|
Goods/services received in prior period, and paid in the current period |
13,513 |
16,233 |
16.8% |
|
Total Consolidated capital expenditure spend (as per consolidated statement of cash flows) |
55,062 |
50,064 |
10% |
Working capital
The Group's working capital requirements are broadly classified into the following two categories:
Settlement related working capital
Movements in settlement related working capital balances are linked to the direct-to-merchant business line funding cycle and represent those from both Network and DPO. The settlement related working capital outflow is primarily due to a change in our settlement currency with Visa, which has moved from a USD to an AED settlement. The settlement timeline for AED currency is currently a day longer (but expected to shorten in the future) and therefore contributed to the elevated scheme debtor balance when compared with the prior year.
Scheme debtors and merchant creditors: Merchant creditor and scheme debtor balances generally reflect TPV processed in the direct-to-merchant business line over the 2-3 days before the period end, as well as a number of other factors that can include the day of the week.
Overall, the merchant creditor balance increased USD 164.1 million y/y and the scheme debtor balance increased USD 198.6 million y/y.
At Network, which represents the majority of the balances: merchants generally receive funds before Network obtains settlement from the card schemes and financial institutions, resulting in larger scheme debtor balances when compared to merchant creditor balances. The majority of merchants receive settlement on T+1 following a consumer transaction. In 2021, the period ended on a Friday, which was the first day of the weekend in the UAE (in 2022, the UAE Government announced a move in the weekend to Saturday and Sunday, which will align our settlement process with other global markets). But in 2021, no payments were remitted to merchants on a Friday and as a result, the merchant creditor balance broadly represented two days of outstanding payments due to merchants. The 2021 period end balance is therefore significantly higher than the 2020 period end balance, which was a Thursday and broadly represented one day of outstanding payments due to merchants.
Network usually receives funds from the payment schemes on T+2/3, and from financial institutions on T+1. The 2021 scheme debtor balance was extended to T+3/4 for two main reasons: i) No settlement is received from the card schemes and financial institutions on a Friday. This largely offsets the concomitant increase in the merchant creditor balance described above. ii) during the year our settlement currency with Visa was changed, moving from a USD to an AED settlement. The settlement timeline for AED currency is currently a day longer.
At DPO, the settlement timeline differs to Network. Payments to merchants are made after DPO has received settlement from banks and mobile network operators and results in larger merchant creditor balances when compared to scheme debtor balances. The DPO scheme debtor balance at the period end was de minimis, whilst the merchant creditor balance was USD 47 million of the total Group merchant creditor balance of USD 329.3 million.
Restricted cash: Restricted cash represents balances specifically due to merchants. The restricted cash balance of USD 86.8 million is split between Network and DPO and has increased y/y mainly due to the addition of DPO into the Group.
At Network, restricted cash represents i) cash held as a form of collateral to manage the risk of merchant chargebacks. This collateral declined y/y due to the release of restricted cash to an airline merchant which is no longer a customer ii) cash balances collected from card schemes/financial institutions but not settled to merchants iii) cash against collateral received from merchants.
At DPO, restricted cash largely represents cash balances already received from banks and mobile network operators, but not yet remitted to merchants. This has more than offset the y/y decline in Network's restricted cash balance.
|
|
2021 USD'000 |
2020 USD'000 |
Cash inflow/ (outflow) USD'000 |
|
Scheme Debtors |
364,025 |
165,436 |
(198,589) |
|
Restricted Cash |
86,801 |
52,550 |
(34,251) |
|
Merchant Creditors |
(329,280) |
(165,142) |
164,138 |
|
Settlement Related Working Capital Balances |
121,546 |
52,844 |
(68,702) |
Working capital before settlement related balances
This represents the amount of capital used by the Group to fund its day-to-day trading operations, outside of the direct acquiring business. The overall cash movement in working capital before settlement related balances totalled USD (1.1) million, which mainly reflects receivables from strategic initiatives launched with Mastercard in the final part of the year. This is partially offset by payables consolidated from DPO, which was not present in the prior year.
|
|
2021 USD'000 |
2020 USD'000 |
Change USD'000 |
|
Trade receivables & chargeback receivables (Net of provisions for expected credit loss) |
65,675 |
45,874 |
(19,801) |
|
Prepayments and other receivables |
22,699 |
22,000 |
(699) |
|
Trade, other payables and income tax payable |
(145,331) |
(127,732) |
17,599 |
|
|
(56,957) |
(59,858) |
(2,901) |
|
Items excluded1: |
|
|
|
|
Capital expenditure accrual |
20,637 |
19,428 |
(1,209) |
|
MIP Liability |
4,499 |
9,403 |
4,904 |
|
Other movements2 |
13,872 |
12,004 |
(1,868) |
|
Working capital before settlement related balances |
(17,949) |
(19,023) |
(1,074) |
1. These items are excluded as these are either shown separately in the consolidated statement of cash flows or non-cash in nature.
2. Other movements mainly includes movement in advance taxes paid and interest payables.
Debt
The Group's total debt, including current borrowings, amounted to USD 491.3 million (2020: USD 434.5 million).
|
|
2021 |
2020 |
|
|
|
USD'000 |
USD'000 |
Change |
|
Syndicated term loan |
|
|
|
|
Principal Outstanding |
375,000 |
375,000 |
- |
|
Unamortised debt issuance Cost |
(4,690) |
(6,134) |
(24)% |
|
Sub total |
370,310 |
368,866 |
- |
|
Other term loan - from business combination |
8,754 |
- |
- |
|
Revolving credit facility |
35,000 |
35,000 |
- |
|
ATM lease liability |
191 |
925 |
(79)% |
|
Bank overdraft (for working capital) |
77,089 |
29,681 |
160% |
|
Total |
491,343 |
434,472 |
13% |
|
|
|
|
|
|
Non-current borrowing |
336,739 |
369,025 |
(9)% |
|
Current borrowing |
154,604 |
65,447 |
136% |
|
Total |
491,343 |
434,472 |
13% |
During 2020, we refinanced our syndicated debt facility. The refinancing was conducted to increase liquidity and to support investment in our growth-oriented strategy, as well as for general corporate purposes. When originally refinanced, the facility was for USD 525 million, of which USD 375 million has currently been drawn. As previously disclosed, the undrawn balance was available for a period of one year from the date of refinancing and the Group decided not to extend the availability of the undrawn balance, as we believe we have sufficient liquidity to meet our upcoming requirements. As per the financing agreement, a principal payment of USD 37.5 million is due in 2022 (10% of the balance), with the repayment increasing to 20% between 2023-25, and the remaining balance (30%) to be paid in full in 2026.
Our leverage ratio1, which represents net debt1 to underlying EBITDA1, is calculated as per the methodology provided in the financing facility agreement with the syndicated lending facility banks. Under these agreements net debt excludes; a) the overdraft facilities which are mainly used to facilitate settlement related working capital balances and b) restricted cash balances, which are largely the amounts, withheld from merchants, as a collateral, for a period of time to cover the risk of chargebacks. EBITDA is measured on an underlying basis over the last twelve-month period and financial covenants are set to 3.5x net debt: underlying EBITDA1.
Leverage Ratio1
|
|
2021 USD'000 |
2020 USD'000 |
|
Net debt |
127,724 |
252 |
|
Underlying EBITDA1 |
143,477 |
112,561 |
|
Leverage ratio |
0.9 |
0.02 |
1. These are alternative performance measures, the definitions and calculations of which are included in this section.
2. For FY 2020, leverage was zero due to the additional funds available from the equity raise relating to the DPO acquisition.
The table below provides the reconciliation of net debt as per the consolidated financial information and methodology prescribed in the financing agreement.
|
Particulars
|
|
2021 USD'000 |
2020 USD'000 |
|
Non-current borrowings |
|
336,739 |
369,025 |
|
Current borrowings |
|
154,604 |
65,447 |
|
Cash balance |
|
(270,345) |
(398,781) |
|
Net debt as per consolidated financial information |
|
220,998 |
35,691 |
|
Less: Working capital facility overdraft |
|
(77,089) |
(29,681) |
|
Less: Cash Balance (Share of associate and non-controlling interest of subsidiary) |
|
(1,833) |
(11,422) |
|
Add: Unamortised debt issuance cost |
|
4,690 |
6,134 |
|
Other Adjustments* |
|
(19,042) |
(470) |
|
Net debt as per the financing facility agreement |
|
127,724 |
252 |
* Other adjustments mainly include adjustment for any temporary end of day excess / short drawdown position of the working capital facility.
The table below reconciles the movement in net debt through the period:
|
|
|
|
|
Net Debt Movement |
2021 USD'000 |
2020 USD'000 |
|
Opening balance |
252 |
273,754 |
|
Proceeds from new borrowing |
|
|
|
Term Loan |
- |
375,000 |
|
Revolving Credit Facility |
- |
40,000 |
|
Repayment of borrowing |
|
|
|
Term Loan |
- |
(288,751) |
|
Revolving Credit Facility |
- |
(40,000) |
|
ATM lease liabilities |
(734) |
(694) |
|
Other bank loans |
8,754 |
- |
|
Cash balances |
128,436 |
(353,308) |
|
Others* |
(8,984) |
(5,749) |
|
Closing balance |
127,724 |
252 |
* Others includes changes in cash balances relating to Mercury, Associate (TG Cash) and the adjustment for any temporary end of day excess / short drawdown position of the working capital facility.
No changes to financial segmentation
Having assessed our geographical footprint, management structure and operational responsibilities, it will not be necessary to change our segmental disclosures. Our reporting segments continue to be aligned to our geographical operations across the Middle East and Africa.
Definitions
Constant Currency Revenue
Constant Currency Revenue is current period revenue recalculated by applying the average exchange rate of the prior period to enable comparability with the prior period revenue. Foreign currency revenue is primarily denominated in Egyptian Pound (EGP). The other non-US backed currencies that have a significant impact on the Group as a result of foreign operations in Nigeria and South Africa are the Nigerian Naira (NGN) and the South African Rand (ZAR), respectively. The table shows the average rate of these currencies per USD for the year of 2021 and 2020.
|
Currency rate vs USD |
2021 Average rate |
2020 Average rate |
|
Egyptian Pound (EGP) |
15.8 |
15.8 |
|
Nigerian Naira (NGN) |
403.8 |
359.4 |
|
South African Rand (ZAR) |
14.8 |
15.6 |
Key Performance Indicators
To assist in comparing the Group's financial performance from period-to-period, the Group uses certain key performance indicators, which are defined as follows.
Total Processed Volume (TPV)
TPV is defined as the aggregate monetary volume of purchases processed by the Group within its Merchant Solutions business line.
Number of credentials hosted
Number of credentials hosted is defined as the aggregate number of consumers payment credentials managed and billed by the Group within its Issuer Solutions business line.
Number of transactions
Number of transactions is defined as the aggregate number of transactions processed and billed by the Group within its Issuer Solutions business line.
Consolidated statement of financial position
As at 31 December
|
|
|
2021 |
2020 |
|
|
|
USD'000 |
USD'000 |
|
Assets |
|
|
|
|
Non-current assets |
|
|
|
|
Goodwill |
|
496,695 |
262,609 |
|
Intangible assets |
|
243,081 |
188,523 |
|
Property and equipment |
|
59,584 |
50,285 |
|
Investment in associate |
|
- |
59,808 |
|
Investment securities |
|
246 |
246 |
|
Long term receivables |
|
3,735 |
2,617 |
|
Deferred tax assets |
|
7,633 |
- |
|
|
|
|
|
|
Total non-current assets |
|
810,974 |
564,088 |
|
|
|
|
|
|
Current assets |
|
|
|
|
Scheme debtors |
|
364,025 |
165,436 |
|
Receivables and prepayments |
|
88,374 |
67,874 |
|
Restricted cash |
|
86,801 |
52,550 |
|
Cash and cash equivalents |
|
270,345 |
398,781 |
|
Assets held for sale |
|
4,347 |
- |
|
|
|
|
|
|
Total current assets |
|
813,892 |
684,641 |
|
Total assets |
|
1,624,866 |
1,248,729 |
|
|
|
|
|
|
Liabilities |
|
|
|
|
Non-current liabilities |
|
|
|
|
Borrowings |
|
336,739 |
369,025 |
|
Other long-term liabilities |
|
25,815 |
21,584 |
|
Deferred tax liabilities |
|
18,914 |
1,837 |
|
|
|
|
|
|
Total non-current liabilities |
|
381,468 |
392,446 |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
Merchant creditors |
|
329,280 |
165,142 |
|
Trade and other payables |
|
136,505 |
127,732 |
|
Income tax payable |
|
8,826 |
- |
|
Borrowings |
|
154,605 |
65,447 |
|
Liabilities held for sale |
|
1,769 |
- |
|
|
|
|
|
|
Total current liabilities |
|
630,985 |
358,321 |
|
|
|
|
|
|
Shareholders' equity |
|
|
|
|
Share capital |
|
73,077 |
71,557 |
|
Share premium |
|
252,279 |
252,279 |
|
Share merger reserve |
|
52,971 |
- |
|
Foreign exchange reserve |
|
(19,693) |
(19,438) |
|
Reorganisation and other reserves |
|
(1,547,389) |
(1,547,592) |
|
Retained earnings |
|
1,802,501 |
1,741,609 |
|
|
|
|
|
|
Equity attributable to equity holders |
|
613,746 |
498,415 |
|
Non-controlling interest |
|
(1,333) |
(453) |
|
Total shareholders' equity |
|
612,413 |
497,962 |
|
|
|
|
|
|
Total liabilities and shareholders' equity |
|
1,624,866 |
1,248,729 |
The consolidated financial information were approved and authorised for issue by the Board of Directors on ______ 2022 and signed on its behalf by:
-----------------------------------
Nandan Mer
Director and Chief Executive Officer
Consolidated statement of profit or loss
For the year ended 31 December
|
|
|
2021 |
2020 |
|
|
|
USD'000 |
USD'000 |
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
352,245 |
284,844 |
|
|
|
|
|
|
Personnel expenses
|
|
(107,957) |
(96,933) |
|
Selling, operating and other expenses |
|
(120,191) |
(103,174) |
|
Depreciation and amortisation |
|
(60,958) |
(51,537) |
|
Share of profit of associate |
|
4,694 |
5,820 |
|
|
|
|
|
|
Profit before interest, tax and gain on sale of associate |
|
67,833 |
39,020 |
|
|
|
|
|
|
Gain on sale of associate |
|
10,169 |
- |
|
Net interest expense
|
|
(13,708) |
(21,669) |
|
Unrealised foreign exchange losses
|
|
(910) |
(328) |
|
Write-off of unamortised debt issuance cost |
|
- |
(6,721) |
|
|
|
|
|
|
Profit before tax |
|
63,384 |
10,302 |
|
|
|
|
|
|
Taxes |
|
(6,826) |
(4,704) |
|
|
|
|
|
|
Profit for the year |
|
56,558 |
5,598 |
|
|
|
|
|
|
Attributable to: |
|
|
|
|
Equity holders of the Group |
|
57,438 |
6,155 |
|
Non-controlling interest |
|
(880) |
(557) |
|
|
|
|
|
|
Profit for the year |
|
56,558 |
5,598 |
|
|
|
|
|
|
Earnings per share (basic and diluted) in USD cents |
|
10.4 |
1.2 |
|
|
|
|
|
Consolidated statement of other comprehensive income
For the year ended 31 December
|
|
|
2021 |
2020 |
|
|
|
USD'000 |
USD'000 |
|
|
|
|
|
|
Profit for the year |
|
56,558 |
5,598 |
|
|
|
|
|
|
Other comprehensive income |
|
|
|
|
Items that may subsequently be reclassified to profit or loss |
|
|
|
|
Foreign currency translation difference on foreign operations |
|
(255) |
677 |
|
Items that will never be reclassified to profit or loss |
|
|
|
|
Re-measurement of defined benefit liability |
|
203 |
(1,365) |
|
|
|
|
|
|
Net change in other comprehensive income |
|
(52) |
(688) |
|
|
|
|
|
|
Total comprehensive income for the year |
|
56,506 |
4,910 |
|
|
|
|
|
|
Attributable to: |
|
|
|
|
Equity holders of the Group |
|
57,386 |
5,467 |
|
Non-controlling interest |
|
(880) |
(557) |
|
|
|
|
|
|
Total comprehensive income for the year |
|
56,506 |
4,910 |
|
|
|
|
|
Consolidated statement of changes in equity
For the year ended 31 December
|
|
Share capital |
Share premium |
Share merger reserve |
Foreign exchange reserve |
Reorganisation reserve |
Other reserves |
Retained earnings |
Equity attributable to equity holders |
Non-controlling interest |
Total |
|
|
|
USD'000 |
||||||||
|
As at 1 January 2021 |
71,557 |
252,279 |
- |
(19,438) |
(1,552,365) |
4,773 |
1,741,609 |
498,415 |
(453) |
497,962 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the year |
|
|
|
|
|
|
|
|
|
|
|
Profit for the year |
- |
- |
- |
- |
- |
- |
57,438 |
57,438 |
(880) |
56,558 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income for the year: |
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation differences |
- |
- |
- |
(255) |
- |
- |
- |
(255) |
- |
(255) |
|
Re-measurement of defined benefit liability |
- |
- |
- |
- |
- |
203 |
- |
203 |
- |
203 |
|
Total other comprehensive income for the year |
- |
- |
- |
(255) |
- |
203 |
- |
(52) |
- |
(52) |
|
Total comprehensive income for the year |
- |
- |
|
(255) |
- |
203 |
57,438 |
57,386 |
(880) |
56,506 |
|
Issuance of new shares |
1,520 |
- |
53,100 |
- |
- |
- |
- |
54,620 |
- |
54,620 |
|
Share issuance cost |
- |
|
(129) |
- |
- |
- |
- |
(129) |
- |
(129) |
|
Purchase of treasury shares |
- |
- |
- |
- |
- |
- |
(5,563) |
(5,563) |
- |
(5,563) |
|
Share based payment |
- |
- |
- |
- |
- |
- |
9,017 |
9,017 |
- |
9,017 |
|
As at 31 December 2021 |
73,077 |
252,279 |
52,971 |
(19,693) |
(1,552,365) |
4,976 |
1,802,501 |
613,746 |
(1,333) |
612,413 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital |
Share premium |
Foreign exchange reserve |
Reorganisation reserve |
Other reserves |
Retained earnings |
Equity attributable to equity holders |
Non-controlling interest |
Total |
|
|
USD'000 |
||||||||
|
As at 1 January 2020 |
65,100 |
- |
(20,115) |
(1,552,365) |
5,851 |
1,742,096 |
240,567 |
(1,861) |
238,706 |
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the year |
|
|
|
|
|
|
|
|
|
|
Profit for the year |
- |
- |
- |
- |
- |
6,155 |
6,155 |
(557) |
5,598 |
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income for the year: |
|
|
|
|
|
|
|
|
|
|
Foreign currency translation differences |
- |
- |
677 |
- |
- |
- |
677 |
- |
677 |
|
Re-measurement of defined benefit liability |
- |
- |
- |
- |
(1,365) |
- |
(1,365) |
- |
(1,365) |
|
Total other comprehensive income for the year |
|
|
677 |
- |
(1,365) |
- |
(688) |
- |
(688) |
|
Total comprehensive income for the year |
- |
- |
677 |
- |
(1,365) |
6,155 |
5,467 |
(557) |
4,910 |
|
Issuance of new shares |
6,457 |
258,280 |
- |
- |
- |
- |
264,737 |
- |
264,737 |
|
Share issuance cost |
- |
(6,001) |
- |
- |
- |
- |
(6,001) |
- |
(6,001) |
|
Increase in statutory reverse |
- |
- |
- |
- |
287 |
(287) |
- |
- |
- |
|
Purchase of treasury shares |
- |
- |
- |
- |
- |
(10,425) |
(10,425) |
- |
(10,425) |
|
Share based payment |
- |
- |
- |
- |
- |
4,070 |
4,070 |
- |
4,070 |
|
Increase in shareholding of subsidiary with non-controlling interest |
- |
- |
- |
- |
- |
- |
- |
1,965 |
1,965 |
|
As at 31 December 2020 |
71,557 |
252,279 |
(19,438) |
(1,552,365) |
4,773 |
1,741,609 |
498,415 |
(453) |
497,962 |
Consolidated statement of cash flows
For the year ended 31 December
|
|
|
2021 |
2020 |
|
|
|
USD'000 |
USD'000 |
|
|
|
|
|
|
Operating activities
|
|
|
|
|
Profit for the year from operations |
|
56,558 |
5,598 |
|
§ Adjustments for:
|
|
|
|
|
Depreciation and amortisation |
|
60,958 |
51,537 |
|
Write-off of unamortised debt issue cost |
|
- |
6,721 |
|
Provision for expected credit losses |
|
393 |
2,183 |
|
Net interest expense |
|
13,708 |
21,669 |
|
Taxes |
|
6,826 |
4,704 |
|
Foreign exchange losses and others |
|
910 |
358 |
|
Gain on sale of associate |
|
(10,169) |
- |
|
Share of profits from associate |
|
(4,694) |
(5,820) |
|
Charge for share based payment |
|
4,518 |
4,070 |
|
§ Changes in long term receivables and other liabilities
|
|
(22,921) |
656 |
|
§ Interest paid |
|
(14,064) |
(16,985) |
|
§ Taxes paid |
|
(4,842) |
(6,058) |
|
§ Changes in working capital before settlement related balances1 |
|
(1,074) |
19,581 |
|
|
|
|
|
|
Net cash flows before settlement related balances |
|
86,107 |
88,214 |
|
|
|
|
|
|
§ Changes in settlement related balances2 |
|
(68,702) |
19,286 |
|
|
|
|
|
|
Net cash flows from operating activities
|
|
17,405 |
107,500 |
|
|
|
|
|
|
Investing activities |
|
|
|
|
§ Purchase of intangible assets and property and equipment |
|
(55,062) |
(50,064) |
|
§ Sale of intangible assets and property and equipment |
|
92 |
585 |
|
§ Proceeds from sale of associate |
|
74,440 |
- |
|
§ Interest received |
|
550 |
441 |
|
§ Acquisition of subsidiary, net of cash acquired |
|
(198,933) |
- |
|
Net cash flows from investing activities |
|
(178,913) |
(49,038) |
|
|
|
|
|
1- Changes in working capital before settlement related balances reflects movements in receivables and prepayments and trade, other payables and income tax payable adjusted for non-cash items.
2- Changes in settlement related balances reflects movement in scheme debtors, merchant creditors and restricted cash.
|
f |
|
2021 |
2020 |
|
|
|
USD'000 |
USD'000 |
|
|
|
|
|
|
Financing activities
|
|
|
|
|
§ Proceeds from new borrowings |
12 |
- |
415,000 |
|
§ Repayment of borrowings |
|
- |
(328,751)1) |
|
§ Purchase of treasury shares |
|
(5,563) |
(10,425) |
|
§ Payment of debt issuance cost |
|
- |
(6,676) |
|
§ Payment of lease liabilities |
|
(5,051) |
(4,620) |
|
§ Issuance of subsidiary's capital to non-controlling interest |
|
- |
1,965 |
|
§ Proceeds from issuance of new shares
|
|
- |
264,737 |
|
§ Payment of share issuance expenses |
|
(129) |
(6,001) |
|
|
|
|
|
|
Net cash flows from financing activities
|
|
(10,743) |
325,229 |
|
|
|
|
|
|
Net (decrease) / increase in cash and cash equivalents
|
|
(172,251) |
383,691 |
|
§ Cash as part of held for sale |
|
(2,619) |
- |
|
§ Effect of movements in exchange rates on cash held |
|
(974) |
(169) |
|
|
|
|
|
|
Cash and cash equivalents at the beginning of the year
|
|
369,100 |
(14,422) |
|
|
|
|
|
|
Cash and cash equivalents at the end of the year (refer (i) below) |
|
193,256 |
369,100 |
|
|
|
|
|
|
Note (i): Cash and cash equivalents - as per consolidated statement of financial position |
|
270,345 |
398,781 |
|
Bank overdraft |
|
(77,089) |
(29,681) |
|
Cash and cash equivalents at the end of the year |
|
193,256 |
369,100 |
1 Legal status and activities
Network International Holdings PLC ('the Company') listed its shares on the London Stock Exchange on 12 April 2019. The principal activities of the Group are enabling payments acceptance at merchants, acquirer processing, switching financial transactions, hosting cards and processing payment transactions and providing end to end management services and digital payment services.
The registered address of the Company's office is Suite 1, 3rd floor 11-12 St James's square London SW1Y4LB, situated in England and Wales. The registration number of the Company is 11849292.
The consolidated financial information of the Group as at and for the year ended 31 December 2021 comprise the Company and its subsidiaries (together referred to as the 'Group') and the Group's interest in associates.
2 Basis of preparation
(a) Statement of compliance
The financial information set out above does not constitute the company's statutory accounts for the years ended 31 December 2021 or 2020. Statutory accounts for 2020 have been delivered to the registrar of companies, and those for 2021 will be delivered in due course. The auditor has reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006
(b) Basis of measurement
The consolidated financial information have been prepared under the historical cost basis except for the liability for defined benefit obligation, which is recognised at the present value of the defined benefit obligation and financial assets at fair value through profit or loss which are measured at fair value.
(c) Functional and presentation currency
Items included in the financial information of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The Company's functional currency is GBP.
The presentation currency of the Group is United States Dollar ('USD') as this is a more globally recognised currency and moreover two of the Group's largest entities functional currencies (United Arab Emirates dirhams (AED) for Network International LLC and Jordanian Dinar (JOD) for Network International Services Limited Jordan) are pegged with USD. All financial information presented in USD has been rounded to the nearest thousands, except when otherwise indicated.
(e) New standards and interpretations
New standards and interpretations that are effective
The following amendments and interpretations apply for the first time in 2021, but do not have any significant impact on the consolidated financial information.
- Amendments to IFRS 7, 9 and 16, and IAS 39: addressing issues affecting financial reporting in the period leading up to IBOR reform
- Amendments to IFRS 4 - insurance contracts
(f) Accounting judgements and estimates
The preparation of consolidated financial information requires Directors to make judgements and estimates that affect the application of accounting policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
Critical accounting judgements
During the year, the Directors believes that there is no significant accounting judgement made by the Directors in the process of applying the Group's accounting policies, that have the significant effect on the amounts recognised in the consolidated financial information
Critical accounting estimates
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period that could have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:
Business combination:
As part of the acquisition accounting for the acquisition of DPO in 2021, we have performed an assessment on the identification, fair value, and expected useful economic lives of acquired intangible assets such as brands, customer relationships and developed technology assets at the date of acquisition. The fair value attributed to intangible assets arising on acquisition is recognised in accordance with IAS 38 Intangible assets and is based on a number of estimates.
The acquired identifiable assets and liabilities have been recognised at their fair values at acquisition date and in accordance with the Group's accounting policies. Below are the details for the valuation methodologies used for the intangible assets.
a) Acquired customers' (merchants) relationships have been valued using the MPEEM method, valued at USD 43.0 million, using a discount rate of 22.9% and an attrition rate of 5.3%. MPEEM method is used to estimate the fair value of the merchant relationships by calculating the present value of future earnings over its useful economic life.
b) Acquired Brand (Pay Fast) has been valued using the "Relief from Royalty method", valued at USD 16.9 million using a discount rate of 23.9% and a royalty rate of 10%. Under 'Relief from Royalty method', net revenues that is expected over the useful economic life of asset is multiplied by the royalty rate. The estimated after-tax royalty stream is then discounted to present value to arrive at the fair value of the assets.
c) Acquired developed technology has been valued using the Depreciated Replacement Cost ("DRC") method (cost approach), valued at USD 3.5 million. DRC method assumes that the value of the asset is equal to the replacement cost of the assets i.e., the cost to recreate the functionality and utility of the assets.
Management considers merchant attrition and royalty rates as critical estimates as a reasonably possible change to these assumptions in aggregation, or in isolation, will have an impact on the consolidated financial information. Below are the various sensitivities of attrition rates, royalty rates and discount rates and their impact on the related intangible assets.
Merchant relationships
|
Sensitivity (USD million) |
Attrition rates |
|||
|
4.3% |
5.3% |
6.3% |
||
|
Discount rates |
21.9% |
47.0 |
44.0 |
42.0 |
|
22.9% |
45.0 |
43.0 |
40.0 |
|
|
23.9% |
43.0 |
41.0 |
39.0 |
|
Brands
|
Sensitivity (USD million) |
Royalty rate |
|||
|
5% |
7.5% |
10% |
||
|
Discount rates |
22.9% |
8.8 |
13.2 |
17.6 |
|
23.9% |
8.4 |
12.6 |
16.9 |
|
|
24.9% |
8.1 |
12.1 |
16.2 |
|
For more details, refer to note 6 of these consolidated financial information.
3 Going concern
The directors have adopted the going concern basis in preparing the consolidated financial information after assessing the principal risks and having considered the impact of COVID-19 on the Group financial performance including under a base case and severe but plausible downside scenarios.
In making this assessment, the Directors have considered cash flow and covenant forecasts prepared for a period of at least 12 months from the date of approval of the financial information, estimating key performance indicators including revenues, underlying EBITDA, underlying and reported net income, capital expenditure and liquidity position of the Group including impact of the continued recovery from COVID-19 pandemic. The base forecast has been done based on the budget for 2022 approved by the Board and includes performance of DPO, being part of the Group since its acquisition in September 2021. The forecast has been done based on assumptions related to key variables including but not limited to Transaction Processing Volumes (TPV), number of cards hosted and transactions processed, which are the key drivers of the Group revenue and cash flow.
Both business lines, Merchant Solutions and Issuer Solutions, have been impacted differently by the COVID-19 crisis. However, the Group results has shown continued recovery with all KPIs either trending in line or higher than pre-pandemic levels. In Merchant Solutions, Group's revenues are generated through fees dependent upon the value of transactions processed (TPV), as well as through value added services, and on an overall basis are very closely correlated to the underlying value of transactions processed, and hence, significantly impacted by COVID-19 pandemic. Historically, Merchant Solutions revenues have been primarily generated in the UAE and Jordan, although going forward, the acquisition of DPO expands our direct-to-merchant services across Africa. Whilst, Issuer Solutions revenues are broadly balanced across Middle East and Africa. Under Issuer Solutions, Group's customers are typically financial institutions, where we have multi-year contracts in place and a number of them have contractual minimums. Therefore, our revenues for this business line are somewhat correlated to underlying transaction volumes but have a greater resilience due to the card hosting and contractually fixed minimum revenue elements.
In terms of the Group's liquidity position, we continue to have sufficient liquidity headroom to meet financial obligations in the forecast period. The Group's leverage ratio also remains below the maximum threshold prescribed under the financing facility agreement in the base case scenario as well as under severe but plausible downside scenarios as described below. Please refer to note 15 and note 28 of the consolidated financial information for details of the Group's drawn and available facilities. The Group has strong liquidity position which is effectively managed by the cash generated in the business, term loans, revolving credit facility (RCF) and overdraft facilities. As per the financing facility agreement for terms loan and RCF, the Group is required to maintain a leverage ratio below the threshold of 3.5x. net debt to underlying EBITDA. The leverage ratio as at 31 December 2021 was 0.9x which is below the threshold.
The base forecast, has been further stress tested by using three severe but plausible downside scenarios, to assess the Group's resilience against plausible adverse economic effects. In these stress scenarios, the directors considered; a) 50% lower revenue growth than the base forecast, b) no revenue growth as compared to the actual 2021 performance; and c) a decline in revenue by 5% as compared to the actual 2021 performance. In all these scenarios, the costs are not expected to decrease in the same proportion as the decreases in revenues as a significant proportion of Group's cost base is fixed in nature. This also impacts the headroom available in the Group's leverage ratio. However, with forecast operating cash flow generation and available and committed financing facilities as explained above, leverage ratio remains below the threshold in downside scenario, and the Group is able to operate within its available and committed financing facilities.
Having considered the above factors, the Directors have a reasonable expectation that the Group has adequate resources to remain in operation for at least 12 months from the approval of this consolidated financial information and therefore continue to adopt the going concern basis in preparing the consolidated financial information.
4 Alternative performance measures
The Group uses Alternative Performance Measures (APMs) to enhance the comparability of information between reporting periods by adjusting for uncontrollable or one-off items, to aid the user of the financial information in understanding the activities taking place across the Group. In addition, these alternative measures are used by the Group as key measures of assessing the Group's underlying performance on day-to-day basis, developing budgets and measuring performance against those budgets and in determining management remuneration.
4.1 Specially disclosed items
Specially disclosed items (SDIs) are items of income or expenses that have been recognised in a given period which management believes, due to their materiality and being one-off / exceptional in nature, should be disclosed separately, to give a more comparable view of the period-to-period underlying financial performance.
The table below presents a breakdown of the specially disclosed items for each of the years ended 31 December 2021 and 2020.
|
|
|
2021 USD'000 |
2020 USD'000 |
|
Items affecting EBITDA |
|
|
|
|
Share-based compensation1 |
3,657 |
10,445 |
|
|
M&A costs2 |
7,261 |
7,696 |
|
|
Total SDIs affecting EBITDA |
10,918 |
18,141 |
|
|
|
|
|
|
|
Items affecting Net Income |
|
|
|
|
Amortisation of acquired intangibles3,4 |
5,885 |
4,204 |
|
|
Total SDIs affecting net income |
5,885 |
4,204 |
|
|
Total specially disclosed items5 |
16,803 |
22,345 |
|
1 Includes the charge related to the Management Incentive Award Plan, IPO Cash Bonus, and Long-Term Incentive Plan awarded to Group wide eligible employees, all of which are specific payments relating to the Group's Initial Public Offering (IPO). These charges will not recur after 2021.
2 This includes costs incurred, during the period, for due diligence, advisory, and execution in relation to the acquisition of DPO.
3 Amortisation charge on the intangible assets (acquired under business combination) recognised in the Group's consolidated statement of financial position as part of the Group's acquisition of Emerging Market Payments Services ('EMP') in 2016 and DPO in 2021. These charges are based on judgements about values and economic lives and are the result of the application of acquisition accounting rather than core operations. Whilst revenue recognised in the income statement does benefit from the underlying intangibles that have been acquired, the amortisation costs bear no relation to the Group's underlying operational performance. The amortisation of acquired intangibles is not included in the analysis of segment performance used by the Chief Operating Decision Maker.
4 Deferred tax liability is recognised on the acquired intangibles identified as part of the acquisition accounting for DPO acquisition, and resultant movement in the deferred liability during the period is included in the income statement under 'taxes', impact of which is not significant (USD 0.4 million, (2020: nil))
5 Other than the tax impact explained in note 4 above, SDIs does not have any tax impact.
4.2 Underlying EBITDA
Underlying EBITDA is defined as earnings for the year, before interest, taxes, depreciation and amortisation, write-off of unamortised debt issuance cost, unrealised foreign exchange losses, gain on disposal and share of depreciation of associate, and specially disclosed items affecting EBITDA. The table below presents a reconciliation of the Group's reported profit for the year to underlying EBITDA for each of the years ended 31 December 2021 and 2020.
|
|
2021 |
2020 |
|
|
USD'000 |
USD'000 |
|
Profit for the year |
56,558 |
5,598 |
|
Depreciation and amortisation |
60,958 |
51,537 |
|
Write-off of unamortised debt issuance cost |
- |
6,721 |
|
Net interest expense |
13,708 |
21,669 |
|
Unrealised foreign exchange losses |
910 |
328 |
|
Taxes |
6,826 |
4,704 |
|
Gain on disposal of associate |
(10,169) |
- |
|
Share of depreciation from associate |
3,768 |
3,863 |
|
Specially disclosed items affecting EBITDA |
10,918 |
18,141 |
|
Underlying EBITDA |
143,477 |
112,561 |
4.3 Depreciation and amortisation to underlying depreciation and amortisation
Underlying depreciation and amortisation excludes amortisation on acquired intangibles and includes share of depreciation from associate. The table below presents a computation of the Group's depreciation and amortisation to underlying depreciation and amortisation.
|
|
2021 |
2020 |
|
|
USD'000 |
USD'000 |
|
|
|
|
|
Depreciation and amortisation |
60,958 |
51,537 |
|
Amortisation on acquired intangibles |
(5,885) |
(4,204) |
|
Share of depreciation from associate |
3,768 |
3,863 |
|
Underlying depreciation and amortisation |
58,841 |
51,196 |
4.4 Underlying EBITDA margin excluding share of associate
Underlying EBITDA margin excluding share of associate represents the Group's underlying EBITDA margin which is considered by the Group to give a more comparable view of period to-period EBITDA margins.
The table below presents a computation of the Group's underlying EBITDA margin, which is defined as underlying EBITDA before share of associate divided by the revenue.
|
|
2021 |
2020 |
|
|
USD'000 |
USD'000 |
|
|
|
|
|
Revenue |
352,245 |
284,844 |
|
|
|
|
|
Underlying EBITDA |
143,477 |
112,561 |
|
Share of EBITDA of associate |
(8,462) |
(9,683) |
|
Underlying EBITDA before share of associate |
135,015 |
102,878 |
|
Underlying EBITDA margin excluding share of associate |
38.3% |
36.1% |
4.5 Underlying net income
Underlying net income represents the Group's profit for the year, adjusted for write-off of unamortised debt issuance cost, gain on disposal of associate, and specially disclosed items. Underlying net income is considered by the Group to give a more comparable view of period-to-period profitability.
The table below presents a reconciliation of the Group's reported profit for the year to underlying net income for each of the years ended 31 December 2021 and 2020.
|
|
2021 |
2020 |
|
|
USD'000 |
USD'000 |
|
|
|
|
|
Profit from the year |
56,558 |
5,598 |
|
Write-off of unamortised debt issuance cost |
- |
6,721 |
|
Gain on disposal of associate |
(10,169) |
- |
|
Specially disclosed items affecting EBITDA (refer to note 4.1) |
10,918
|
18,141 |
|
Specially disclosed items affecting net income (refer to note 4.1) |
5,885 |
4,204 |
|
Underlying net income |
63,192 |
34,664 |
4.6 Underlying earnings per share (EPS)
The Group's underlying EPS is defined as the underlying net income attributable to the shareholders' divided by the weighted average number of ordinary shares during the relevant financial year.
|
|
2021 |
2020* |
|
Underlying net income (USD'000) |
63,192 |
34,664 |
|
Non-controlling interest (loss) (USD' 000) |
880 |
557 |
|
Underlying net income - attributable to equity holders (USD' 000) |
64,072 |
35,221 |
|
Weighted average number of shares ('000) |
552,859 |
520,833 |
|
Underlying EPS (USD cents) |
11.6 |
6.8 |
*For a like-to-like comparison, underlying EPS for 2020 has been recalculated by dividing underlying net income, attributable to equity holders by the weighted average numbers of ordinary shares.
4.7 Capital expenditure
The table below provides the split of total capital expenditure into the growth and maintenance capital expenditure for 2021 and 2020 (collectively are referred to as core capital expenditure), Saudi Arabia market entry and Separation of shared services from Emirates NBD.
|
|
2021 |
2020 |
|
|
USD'000 |
USD'000 |
|
|
|
|
|
Total capital expenditure |
56,272 |
46,470 |
|
Core capital expenditure |
43,955 |
36,773 |
|
of which is maintenance capital expenditure |
16,015 |
11,974 |
|
of which is growth capital expenditure |
27,940 |
24,799 |
|
Saudi Arabia market entry |
5,006 |
634 |
|
Separation of shared services from Emirates NBD |
7,311 |
9,063 |
Reconciliation of capital expenditure to the cash spend in the consolidated cash flow
|
|
2021 |
2020 |
|
|
USD'000 |
USD'000 |
|
Total capital expenditure |
56,272 |
46,470 |
|
Goods and services received in the current period, but yet to be paid |
(14,723) |
(12,639) |
|
Goods and services received in the previous period, and paid in the current period |
13,513 |
16,233 |
|
Total consolidated capital expenditure Spend (as per consolidated information of cash flows) |
55,062 |
50,064 |
4.8 Underlying free cash flow
Underlying free cash flow is calculated as underlying EBITDA adjusted for changes in working capital before settlement related balances, taxes paid, total capital expenditure, SDI affecting EBITDA and adjustment for share of EBITDA of associate, less dividend. The Group uses underlying free cash flow as an operating performance measure that helps management determine the conversion of underlying EBITDA to underlying free cash flow.
|
|
2021 |
2020 |
|
|
USD'000 |
USD'000 |
|
Underlying EBITDA |
143,477 |
112,561 |
|
Changes in working capital before settlement related balances |
(1,074) |
19,581 |
|
Taxes paid |
(4,842) |
(6,058) |
|
Total capital expenditure |
(56,272) |
(46,470) |
|
Specially disclosed Items affecting EBITDA |
(10,918) |
(18,141) |
|
Adjustment for share of EBITDA of associate, less dividend |
(8,463) |
(9,683) |
|
Underlying free cash flow |
61,908 |
51,790 |
4.9 Reconciliation of cash flows from operating activities to Underlying free cash flow
|
|
2021 |
2020 |
|
|
USD'000 |
USD'000 |
|
Net cash inflows from operating activities |
17,405 |
107,500 |
|
Changes in settlement related balances, long term receivables and other liabilities |
91,623 |
(19,942) |
|
Charge for share based payment |
(4,518) |
(4,070) |
|
Interest Paid |
14,064 |
16,985 |
|
Others* |
(394) |
(2,213) |
|
Underlying free cash flow before capital expenditure |
118,180 |
98,260 |
|
Total capital expenditure |
(56,272) |
(46,470) |
|
Underlying free cash flow |
61,908 |
51,790 |
* Others include provision for expected credit losses and foreign exchange losses.
4.10 Underlying effective tax rate
The Group's underlying effective tax rate is defined as taxes as a percentage of the Group's underlying net income before tax. The underlying effective tax rate for the Group for 2021 and 2020 was 9.7% and 11.9%, respectively.
|
|
2021 |
2020 |
|
|
USD'000 |
USD'000 |
|
Underlying net income before tax |
70,018 |
39,368 |
|
Taxes |
6,826 |
4,704 |
|
Underlying effective tax rate |
9.7% |
11.9% |
5 Segment reporting
IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Chief Operating Decision Maker (Network Executive Committee) and the Board of Directors to allocate resources and assess performance. For each identified operating segment, the Group has disclosed information that is assessed internally to review and steer performance.
The Group manages its business operations on a geographic basis and reports two operating segments, i.e., i) Middle East and ii) Africa. The Group reviews and manages the performance of these segments based on total revenue and contribution for each operating segment. Contribution is defined as segment revenue less operating costs (personnel cost and selling, operating and other expenses) that can be directly attributed to or controlled by the segments. Contribution does not include allocation of shared costs that are managed at group level and hence shown separately under central function costs.
|
31 December 2021 |
Middle East |
Africa |
Non- attributable |
Total |
|
|
|
|||
|
Statement of profit or loss |
|
|
|
|
|
Revenue |
247,683 |
100,239 |
4,323* |
352,245 |
|
|
|
|
|
|
|
Contribution |
171,552 |
68,287 |
4,323 |
244,162 |
|
Contribution margin (%) |
69.3% |
68.1% |
- |
69.3% |
|
Central functions costs |
- |
- |
(110,056) |
(110,056) |
|
Specially disclosed items affecting EBITDA |
- |
- |
(10,919) |
(10,919) |
|
Depreciation and amortisation |
- |
- |
(60,958) |
(60,958) |
|
Share of profit of associate |
- |
- |
4,694 |
4,694 |
|
Gain on sale of an associate |
- |
- |
10,169 |
10,169 |
|
Net interest expense |
- |
- |
(13,708) |
(13,708) |
|
Taxes |
- |
- |
(6,826) |
(6,826) |
|
Profit for the year |
171,552 |
68,287 |
(183,281) |
56,558 |
* USD 4.3 million (2020: USD 6.6 million) relates to the revenue derived from solutions developed as part of the MasterCard strategic partnership.
5 Segment reporting (continued)
|
|
Middle East |
Africa |
Non- attributable |
Total |
|
Statement of financial position |
-------------------------------- USD'000 ------------------------------- |
|||
|
|
|
|
|
|
|
Current assets |
404,627 |
22,250 |
387,015 |
813,892 |
|
Non-current assets |
32,985 |
4,266 |
773,723* |
810,974 |
|
Total assets |
437,612 |
26,516 |
1,160,738 |
1,624,866 |
|
|
|
|
|
|
|
Current liabilities |
310,182 |
63,688 |
257,115 |
630,985 |
|
Non-current liabilities |
12,952 |
- |
368,516 |
381,468 |
|
Total liabilities |
323,134 |
63,688 |
625,631 |
1,012,453 |
* This includes goodwill amounting to USD 496.7 million.
|
31 December 2020 |
Middle East |
Africa |
Non- attributable |
Total |
|
|
|
|
|
|||
|
Statement of profit or loss |
|
|
|
|
|
|
Revenue |
198,224 |
80,020 |
6,600* |
284,844 |
|
|
|
|
|
|
|
|
|
Contribution |
129,934 |
54,314 |
6,600 |
190,848 |
|
|
Contribution margin (%) |
65.5% |
67.9% |
- |
67.0% |
|
|
Central functions costs |
- |
- |
(95,019) |
(95,019) |
|
|
Specially disclosed items affecting EBITDA |
- |
- |
(18,141) |
(18,141) |
|
|
Depreciation and amortisation |
- |
- |
(51,537) |
(51,537) |
|
|
Share of profit of associate |
- |
- |
5,820 |
5,820 |
|
|
Net interest expense |
- |
- |
(21,669) |
(21,669) |
|
|
Taxes |
- |
- |
(4,704) |
(4,704) |
|
|
Profit for the year |
129,934 |
54,314 |
(178,650) |
5,598 |
|
|
|
Middle East |
Africa |
Non- attributable |
Total |
|
Statement of financial position |
-------------------------------- USD'000 ------------------------------- |
|||
|
|
|
|
|
|
|
Current assets |
187,697 |
23,613 |
473,331 |
684,641 |
|
Non-current assets |
33,387 |
3,142 |
527,559 |
564,088 |
|
Total assets |
221,084 |
26,755 |
1,000,890 |
1,248,729 |
|
|
|
|
|
|
|
Current liabilities |
193,454 |
5,632 |
159,235 |
358,321 |
|
Non-current liabilities |
12,996 |
- |
379,450 |
392,446 |
|
Total liabilities |
206,450 |
5,632 |
538,685 |
750,767 |
Middle East
The Group's primary market in the Middle East region is UAE whereas the second most significant market is Jordan. In both the markets, the Group provides Merchant Acquiring, Acquirer Processing and Issuer Solutions services to various financial and non-financial institutional clients.
Africa
Under Africa region, the Group's key sub-markets are North Africa, Sub-Saharan Africa and Southern Africa.
(i) North Africa
One of the most significant markets in North Africa is Egypt. The Group currently provide services to several of Egypt's leading financial institutions, for both their Merchant Acquiring and Issuer Solution needs. North Africa contributed 41% of the total Africa Revenue in 2021 (2020: 47%) and USD 41.0 million of total revenues (2020: USD 37.5 million).
(ii) Sub-Saharan Africa
One of the most significant markets in sub-Saharan Africa is Nigeria where the Group has an established presence serving several of Nigeria's leading financial institutions, mainly providing Issuer Processing services. Sub-Saharan Africa contributed 35% of the total Africa Revenue in 2021 (2020: 36%) and USD 35.5 million of total revenues (2020: USD 28.6 million).
(iii) Southern Africa
The significant market in Southern Africa is South Africa, where the Group provides retail processing services. South Africa contributed 24% of the total Africa Revenue in 2021 (2020: 17%) and USD 23.7 million of total revenues (2020: USD 13.9 million).
Major Customer
The Group's major customer is Emirates NBD PJSC and its subsidiaries whose revenue accounts for approximately 13.2% (2020: 21.4%) of the total Group revenue.
All of the revenue of Emirates NBD PJSC comes from Issuer Solutions and are included under the Middle East segment.
6 Business combination and disposals
6.1 Mercury Payments Services LLC (Mercury)
On 13 November 2016, the Group entered into an agreement with First Abu Dhabi Bank (previously known as National Bank of Abu Dhabi PJSC (NBAD)) to form a limited liability company, Mercury Payments Services LLC. Mercury operates the 'Mercury' payment scheme in UAE which is a domestic payment card network that permits members to issue cards on network and to acquire transactions on such network and offers other Value-Added Services.
In December 2021, the Group signed a Share Purchase Agreement to divest its interest for a consideration of cUSD 3 M, before the impact of completion adjustments. The sale has subsequently been completed on 14 January 2022. Accordingly, the Group has classified Mercury as 'Held for sale' in the consolidated financial information. Refer detail in note 16.
6.2 Network International Investment Holding Limited
On 1 March 2016, the Group entered into an agreement to purchase 100% shareholding of Network International Investment Holding Limited for a consideration of USD 255.8 million. The Group had recognised a goodwill amounting to USD 260.1 million .
6.3 3G Direct Holdings Limited - Direct Pay Online (DPO)
On 28 July 2020, the Group entered into an agreement to acquire (the "Transaction") 100% stake in 3G Direct Pay Holdings Limited ("DPO"), the leading, high-growth online commerce platform in Africa. The agreement was amended by the deed of amendment and restatement dated 7 April 2021, and the deed of amendment dated 28 September 2021.
The acquisition was subsequently completed on 28 September 2021. The total consideration for the transaction amounted to USD 291.5 million, of which USD 228.8 million was paid in cash and the balance was paid in the form of 11.1 million shares at an agreed share price of GBP 4.1 per share (amounted to USD 62.7 million). The fair value of shares transferred at the date of acquisition (i.e., 28 September 2021), was GBP 3.59 per share, resulting in a fair value of consideration as USD 283.4 million (cash - USD 228.8 million and fair value of shares - USD 54.6 million).
The acquisition of DPO is done to further consolidate Group's presence in Africa, strengthen our position across the entire payments value chain and accelerate our growth. This acquisition will widen Group's capabilities across online, mobile and alternative payments; bring an extensive and diverse range of direct merchant relationships to our business; and provide a wider range of solutions for Group's existing customers.
The details of the consideration, fair value of the net assets at the date of acquisition and residual goodwill are follows:
|
|
2021 |
|
|
USD'000 |
|
|
|
|
Cash paid |
228,769 |
|
Share capital issued |
54,620 |
|
Fair value of consideration transferred (A) |
283,389 |
|
|
|
|
Recognised amounts of identifiable net assets |
|
|
Property and equipment |
1,944 |
|
Acquired Intangible assets |
63,400 |
|
Intangible assets |
321 |
|
Deferred tax assets |
5,239 |
|
Trade and other receivables |
11,492 |
|
Restricted cash |
45,487 |
|
Cash and cash equivalents |
29,836 |
|
Total assets (B) |
157,719 |
|
|
|
|
Borrowings - non-current |
5,677 |
|
Other long-term liabilities |
849 |
|
Merchant creditors |
45,867 |
|
Deferred tax liability |
15,528 |
|
Trade and other payables |
35,648 |
|
Borrowings - current |
4,844 |
|
Total liabilities (C) |
108,413 |
|
|
|
|
Fair value of assets acquired (B-C = D) |
49,306 |
|
|
|
|
Goodwill on acquisition (A - D) |
234,083 |
Goodwill capitalised represents the expected future benefits of improving the breadth of the Group's service offering and anticipated operational synergies providing the Group with access to future merchants in African markets where online payments are expected to grow.
Since the acquisition date, DPO revenue of USD 7.5 million and net profit of USD 0.5 million has been recorded in the consolidated statement of profit or loss for the period ended 31 December 2021. If the acquisition had occurred at the beginning of the year, the consolidated revenue and net profit for the Group would have been USD 371.6 million and USD 42.6 million, respectively.
The Group has incurred USD 14.8 million related to acquisition cost which is recorded in consolidated statement of profit or loss (included in legal and professional fees under selling, operating and other expenses during 2021 and 2020; refer note 21)).
7 Scheme debtors and merchant creditors
Scheme debtors and merchant creditors represent intermediary balances that arise as part of the daily settlement process related to Network's direct acquiring business and processing of transactions on behalf of Network's issuer processing and acquirer processing clients in accordance with contractual arrangements.
|
|
2021 |
2020 |
|
|
USD'000 |
USD'000 |
|
|
|
|
|
Scheme debtors |
364,025 |
165,436 |
|
Restricted cash |
86,801 |
52,550 |
|
Merchant creditors |
(329,280) |
(165,142) |
|
Settlement related working capital balances |
121,546 |
52,844 |
Scheme debtors
Scheme debtors consist primarily of the Group's receivables from the issuer banks, card schemes for transactions processed for merchants; and settlement related receivable from issuer processing clients for amounts settled to card schemes on their behalf.
Merchant creditors
Merchant creditors consist primarily of the Group's liability to merchants for transactions that have been processed but not yet settled including any deferred settlements or amounts withheld to cover chargeback risks. This also includes balances received from card schemes to be settled to acquirer processing clients.
The Group has limited ability to influence the working capital related to scheme debtors and merchant creditors, (which is referred to as settlement related balances), on a day-to-day basis, as these are principally driven by the volume and mix of transactions and the time elapsed since the last clearing by card issuers/payment schemes, which is why these balances fluctuate from one reporting date to another.
Scheme debtors and merchant creditors balances are reflective of a snapshot in time at a period end. The balances and their relative movements can be determined by: i) the day of the week on which period end falls. For example, if the period end falls on a weekend, when banks are closed in the US but open in the UAE, this causes an extra day delay (T+2/3) in receipt of funds through the scheme settlement processes; ii) proportion of merchants who are not settled on a daily basis; iii) TPV in the last few days prior to the period end; iv) currency mix of TPV and receipt of such funds through the scheme settlement processes.
8 Cash and cash equivalents and restricted cash
8.1 Cash and cash equivalents
Cash and cash equivalents include cash on hand, unrestricted balances held with banks and highly liquid financial assets with original maturities of less than three months, which are subject to an insignificant credit risk, and are used by the Group in the management of its short-term commitments. Cash and cash equivalents are carried at amortised cost in the consolidated statement of financial position.
|
|
2021 |
2020 |
|
|
USD'000 |
USD'000 |
|
Cash and cash equivalents |
270,345 |
398,781 |
8.2 Restricted cash
Restricted cash largely includes amounts payable for deferred settlements of transactions to merchants and other third parties that has been withheld in accordance with its contractual rights or otherwise remained unpaid not in ordinary course of business and are eventually payable on demand or as mutually agreed.
9 Borrowings
The Group's total borrowings amounted to USD 491.4 million (2020: USD 434.5 million).
During 2020, we refinanced our syndicated debt facility. The refinancing was conducted to increase liquidity and to support investment in our growth-oriented strategy, as well as for general corporate purposes. When originally refinanced, the facility was for USD 525 million, of which USD 375 million has currently been drawn. As previously disclosed, the undrawn balance was available for a period of one year from the date of refinancing and the Group decided not to extend the availability of the undrawn balance, as we believe we have sufficient liquidity to meet our upcoming requirements. As per the financing agreement, a principal payment of USD 37.5 million is due in 2022 (10% of the balance), with the repayment increasing to 20% between 2023-25, and the remaining balance (30%) to be paid in full in 2026. The table below provides a breakdown of the borrowings:
|
|
2021 |
2020 |
|
|
USD'000 |
USD'000 |
|
Term loan |
|
|
|
Principal outstanding |
375,000 |
375,000 |
|
Unmortised debt issue cost |
(4,690) |
(6,134) |
|
Net amount included in borrowings |
370,310 |
368,866 |
|
Other term loan |
8,754 |
- |
|
Revolving credit facility |
35,000 |
35,000 |
|
ATM lease liability |
191 |
925 |
|
Bank overdraft |
77,089 |
29,681 |
|
Total |
491,344 |
434,472 |
|
|
|
|
|
Split into: |
2021 |
2020 |
|
a) Term loan |
USD'000 |
USD'000 |
|
- Non-current portion [a] |
332,810 |
368,866 |
|
- Current portion [b] |
37,500 |
- |
|
Sub total |
370,310 |
368,866 |
|
|
|
|
|
b) Other term loan - from business combination |
|
|
|
- Non-current portion [a] |
3,929 |
- |
|
- Current portion [b] |
4,825 |
- |
|
Sub total |
8,754 |
- |
|
|
|
|
|
c) Revolving credit facility |
|
|
|
- Current portion [b] |
35,000 |
35,000 |
|
Sub total |
35,000 |
35,000 |
|
|
|
|
|
d) ATM lease liability |
|
|
|
- Non-current portion [a] |
- |
159 |
|
- Current portion [b] |
191 |
766 |
|
Sub total |
191 |
925 |
|
|
|
|
|
|
|
|
|
e) Bank overdraft |
|
|
|
- Current portion [b] |
77,089 |
29,681 |
|
Sub total |
77,089 |
29,681 |
|
|
|
|
|
Total |
491,344 |
434,472 |
|
|
|
|
|
As per consolidated statement of financial position |
|
|
|
Non-current borrowings [a] |
336,739 |
369,025 |
|
Current borrowings [b] |
154,605 |
65,447 |
|
Total |
491,344 |
434,472 |
10 Share capital and reserves
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity.
|
|
2021 |
2020 |
|
|
USD'000 |
USD'000 |
|
Issued and fully paid up |
|
|
|
561,101,690 shares of GBP 0.10 each (2020: 550,000,000 shares of GBP 0.10 each) |
73,077 |
71,557 |
On 31 July 2020, the Company issued additional share capital equivalent to 50 million shares. The shares were issued at a price of USD 5.3 per share (GBP: 4.1 per share; par value: GBP 0.10 each). Accordingly, the Company's share capital increased by USD 6.5 million, and the Company recognised share premium of USD 258.3 million, out of which an amount of USD 6.0 million were set off in relation to the costs that are directly attributable to the issuance of additional share capital.
On 28 September 2021, the Company issued additional shares equivalent to 11.1 million shares as part of the purchase consideration for the acquisition of DPO. Accordingly, the Company's share capital increased by USD 1.5 million and the Company recognised share merger reserve of USD 53.0 million. Reserves comprise of the following:
Foreign exchange reserves amounted to USD (19.7) million (2020: USD (19.4) million), include the cumulative net change due to changes in value of subsidiaries functional currency to USD from the date of previous reporting period to date of current reporting period.
Reorganisation and other reserves includes a) Reorganisation reserve, b) statutory reserve, and c) fair value reserve.
a) Reorganisation reserve amounted to USD (1.5) billion (2020: USD (1.5) billion), that relates the reserve created as part of restructuring undertaken by the Group in 2019.
b) Statutory reserve amounted to USD 7.5 million (2020: USD 7.5 million). Statutory reserve are the reserves representing a proportion of profit that are required to be maintained in subsidiary companies based on the local regulatory laws of the respective countries in which the Group operates.
c) Fair value reserve amounted to USD (2.5) million (2020: USD (2.7) million).
11 Revenue
Merchant solutions
Under Merchant Solutions, the Group provides a broad range of technology-led payment solutions to its merchants through a full omni-channel service allowing them to accept payments of multiple types, across multiple payment channels. The Group offers functionality in most aspects of payment acceptance, whether in-store, online or on a mobile device, by providing access to a global payments network through its agile, integrated, secure, reliable and highly scalable technology platforms, Network One and Network Lite. The Group's Merchant Solutions business comprises its direct acquiring businesses and acquirer processing services, whereby the Group provides processing for its financial institutions direct acquiring business. The Group generates both, transactional and non-transactional revenue (refer below for detail) under Merchant Solutions.
Issuer Solutions
Through its Issuer Solutions business line, the Group provides a range of innovative card products and services to its consumers. The Group provides its issuer solution customers with a comprehensive proposition supporting all components of the card issuing value chain, including account hosting, transaction processing, settlement, reconciliation, chargebacks and other ancillary services. The Group provides its issuer solution customers with the ability to open card accounts for consumers and issue and create a range of card products, including credit, debit, Islamic, pre-paid and digital/virtual cards. The Group also provides support for its issuer solution customers to enable them to host and manage a large portfolio of card product solutions ranging from simple card usage to VIP card products, including highly configurable and personalised usage. The Group generates both, transactional and non-transactional revenue (refer below for detail) under Issuer Solutions.
For both Merchant and Issuer solutions, the Group's sources of revenue can be broadly categorised into transaction-based revenue and non-transaction-based revenue.
· Transaction based revenue includes revenue generated through a combination of: (a) a Gross Merchant Service Charge (MSC), charged to the merchant on the total processed volume (TPV); (b) a fee per transaction processed and billed, (c) a fee per card hosted and billed and (d) fees for the provision of Value-Added Services including foreign exchange services. The revenue is reported on a net basis, i.e., after the deduction of interchange and scheme fees paid to the card issuer and payment schemes, respectively. The transactional based revenue is recognised at a point in time in line with the group accounting policy.
Interchange fees are the fees that are paid to the card issuing banks which are generally based on transaction value but could also be a fixed fee combined with an ad valorem fee. Scheme fees are the fees paid to the payment schemes for using cards licensed under their brand names and for using their network for transaction authorisation and routing.
· Non-transaction-based revenue: which includes but not limited to revenue generated through provision of various value-added services (those that are fixed periodic charge), rental from point-of-sale (POS) terminals and project related revenue.
The non-transactional based revenue is recognised at a point in time or over time depending upon the type of service being provided, contractual terms and timing when the performing obligation is met by the Group, in line with the group accounting policy.
The Group recognises the revenue over time mainly in the following cases:
§ Services provided by the Group where customer simultaneously receives and consumes the benefits as and when the Group performs its obligation; and
§ Project related revenue, where the Group provides service to develop or enhances the tangible / intangible assets which is short term in nature. The management applied judgement in measuring the progress of the project through internal process to recognise revenue based on the completion of the project. The project related revenue (where the Group applies its judgement in measuring the completion status of the project) is only 4.0% (2020: 2.0%) of the total Group's revenue and hence the Directors do not consider this as a critical accounting judgement that has most significant effect in preparing the consolidated financial information.
|
|
2021 |
2020 |
|
|
USD'000 |
USD'000 |
|
|
|
|
|
Merchant solutions |
160,449 |
109,415 |
|
Issuer solutions |
182,428 |
165,011 |
Other revenue |
9,368 |
10,418 |
|
|
|
|
|
Revenue |
352,245 |
284,844 |
12 Earnings per share (EPS)
Basic earnings / (loss) per share amounts are calculated by dividing the profit / (loss) attributable to owners of the parent by the weighted average number of ordinary shares in issue during the financial period.
Diluted earnings / (loss) per share amounts are calculated by dividing the profit / (loss) attributable to owners of the parent by the weighted average number of ordinary shares in issue during the financial period adjusted for the effects of potentially dilutive options.
The basic and diluted earnings per share is based on earnings of USD 57.4 million (2020: USD 6.2 million).
During the year, the Company issued 11.1 million new ordinary shares (2020: 50.0 million new ordinary shares) and earnings per share is computed on weighted average number of 552.9 million shares (2020: 520.8 million shares).
There is no change in the basic and diluted (EPS). The diluted earnings per share have been calculated after considering potential dilutive options for Group scheme for employee's shares-based payment.
The profit attributable to the equity holders for the year ended 31 December 2021 is based on weighted average number of 552,859,065 shares (2020: 520,833,333 shares).
|
|
2021 |
2020 |
||
|
|
USD cents |
USD cents |
||
|
|
|
|
||
|
Earnings per share (basic and diluted) |
10.4 |
1.2 |
||
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