In an update for its third quarter, the FTSE 250 digital commerce firm reported that revenues in the three months were down 17% year-on-year (YOY), a narrower decline than the 23% fall in the second quarter of the year and that it also expects revenues to fall 17% for the entire year.
The company reported a 21% YOY drop in total processed volume (TPV) in the third quarter, although it highlighted “accelerated TPV growth” from online merchants of 63%.
Issuer solutions saw revenues fall 6% as card and transaction volumes continued to recover in the Middle East but were offset by continued impacts in Africa, while the company said Africa-focused online commerce firm DPO Group, which it agreed to acquire in July, is continuing to “trade strongly” and the takeover is on track.
Meanwhile, the firm also highlighted several business initiatives, including further expansion in Africa through its relationship with GTBank, merchant wins in the Middle East including online acquiring for NowNow and Jimmy Choo and the continued rollout of its N-Genius online payment gateway to 25,000 point of sale devices to merchants in 19 countries.
Looking ahead, aside from the expectation of a 17% revenue decline for the full year, at the top of the firm’s guidance range, Network International said it has seen “improved trading momentum” and a pickup in some revenue streams, which while initially at a lower margin will “drive revenue delivery over the medium term”. As a result, the group said it expects underlying net income to be in line with current market expectations.
“We are very pleased to see the continuation of more positive trading momentum through the third quarter, which reflects the easing of [coronavirus] restrictions across our regions and improving consumer spending. This has been supported by the transition from cash to digital payments, where recent indicators point to an acceleration in this trend, which will benefit the size of the digital payments market and long-term growth potential. We have also seen improvement in new business momentum since the height of lockdowns”, Network international chief executive Simon Haslam said in a statement.
“Our proposed acquisition of DPO remains on track and I am encouraged to see their strong trading momentum through the quarter. This demonstrates the high growth nature of online payments across Africa, as well as DPO’s scale and market strength. We are excited by the opportunities they will bring to our group. Long term, our market and business fundamentals remain strong”, he added.