Companies: DATA   

Cash-generative payments services provider DataCash continues to deliver the goods, having announced a 43% surge in pre-tax profits to £11.2m, on sales up 25% to £20.4m, for the 2007 calendar year.

Perfectly placed to cash in on the rapid expansion of online commerce - processing a noticeable £12bn worth of transactions in 2007 – DataCash’s recent diversification should ensure strong ongoing growth. The company has branched out from providing solely credit and debit card processing to the provision of ‘card holder present’ processing for high street and sportsbook operators, back-office processing for international casino and poker operators, access to alternative payment solutions (such as PayPal) as well as e-wallets and international bank account management and reconciliation services.

Much attention was spent in 2007 developing the group’s technology to allow these services to be offered from one platform as well as ease the future integration of acquisitions and expansion. Meanwhile, the £6.8m Autumn acquisition of Eurocommerce took DataCash into the reservation and bookings systems for the airline sector. While expected to be loss-making for 2008, the acquired business looks a strategically astute deal, creating a presence for DataCash among European banks and financial institutions as well as the global travel market.

Originally recommended by Growth Company Investor at 71p, DataCash has proved a strong share price performer, peaking at 324.25p in December. Growth prospects remain very exciting and the business is well funded – year-end cash was almost £18m – though investors yet to book at least some profits should consider doing so now, with the shares trading on more than 30 times last year’s 9.4p of earnings.

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