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NETeller: Revenue down, stocks resume trading
NETeller Plc. was finally able to release its 2006 annual report today after delays while cooperating with the U.S. Attorney's Office's investigation into the company. The report brings good news along with the bad as NETeller was able to resume trading on AIM, but revenues are expected to be down this year.
NETeller was able to report positive results from 2006. According to the company's chairman, NETeller made impressive gains across all business metrics, with the most significant achievements made in its global expansion.
Revenue was up by 50% from 2005 to 2006, and the company's customer base grew more than 50% as well.
"The third quarter marked another milestone with the addition of our three millionth customer," said Ron Martin, NETeller president and CEO.
He added that the active customer base was up by 29% to 640,701 active customers in 2006. That includes 489,535 U.S. customers, 59,335 from Canada, 71,421 from Europe, and Asia and the rest of the world contributed 20,410 to the active customer total.
This good news was tempered by the announcement the company expects to see a significant reduction in revenue for 2007.
The company faces significant challenges after having to end its online gambling transaction in the U.S. and deal with legal trouble in that country during the first half of the year. As a result, it expects to see a 70 to 75% drop in revenue for 2007.
"In response to these significant challenges, the group is energetically implementing a strategy to restore its pre-eminence in providing money transfer services for the online gaming sector in selected markets outside of North American, through continued investment in product solutions and technology development," said Dale Johnson, NETeller chairman.
NETeller's plan for rebuilding and bouncing back from the setbacks in the United States mainly involve expansion into other geographic areas.
It is refocusing its efforts through the following steps:
- Establishing sustainable pre-eminence in providing payment solutions for the online gaming sector in chosen geographies.
- Delivering the best total solutions that create dominant positions in selected markets by growing and leveraging merchant relationships
- Multiplying customer lifetime value in innovative ways through the extended use of the e-wallet as the nexus of our consumer relationship.
- Aggressively increasing the number of active e-wallet customers.
- Rapidly exploiting market opportunities through optimizing build, buy and partnering decision.
By the end of 2006, NETeller was already on its way to achieving its globalization goals. It added 11 new countries, showing improved growth in Europe and Asia, and increased its non-North American active customers by 65%.
Even with the positive outlook on rebounding from the company, NETeller stocks still took a tumble today as they resumed trading on AIM. When the London market closed, the stocks had dropped 113 points.
Restoration of trade was still a positive step for the company, as Martin noted it is the first step in a new chapter for NETeller after resolving its problems with the United States. The next step is focusing on dominating payments in the company's chosen online gaming markets.
"Online payments in many market sectors are growing rapidly, and we believe that the e-wallet will continue to grow in popularity due to its convenience and safety as more and more people source goods and services through e-commerce communities," Martin said.
""While there is much work to do and many challenges lie ahead, we elieve that the company is well positioned to benefit from these trends."