Planet Payment

Stellar growth continues at Planet, the New York-headquartered multi-currency payment and data processing specialist.

Founded by chairman and CEO Philip Beck, Planet, floated on AIM in 2006, is the company behind a global payments and data processing platform able to process different currencies, helping ‘acquiring’ banks (processors of credit card sales for ‘merchants’) to reduce expenses, and international ‘merchants’ – retailers, restaurateurs, hoteliers – to grow sales and profits.

In a positive recent trading missive, Beck said calendar 2009 sales (results are out in March) would show growth of more than 30% to over $47m (£29m), driven by eye-catching growth in core multi-currency processing income across the US, Greater China, India, Malaysia and Taiwan. Furthermore, fourth quarter sales increased by around 19%, both year-on-year and on the third quarter of 2009, to around $14m.

Planet, which topped up its cash coffers with a £2.4m placing at 80p last year, also said it expects to report positive EBITDA for 2009. Beck, in buoyant mood, attributes these strong financials, achieved despite the effects of tough economic conditions on key travel and hospitality markets, to ‘the continued growth of our business and the operating leverage inherent in the Planet Payment business model’. And he predicts further good top line growth in 2010, based on a 'robust pipeline of acquiring bank and merchant rollouts in new and existing markets’.

Analysts are looking for $1.1m of positive EBITDA for 2009, though pre-tax profits will still elude. However on the $68.7m sales forecast for 2010, EBITDA should come in at $6.2m and Planet could post pre-tax profits of $5m, giving EPS of 7.6p. On those estimates, the shares are selling for less than 14 times earnings, undemanding given growth rates and global prospects.

We remain big believers in Planet’s long-term fundamentals and the shares, backed by Growth Company Investor at 59p in October, should have further to go. Nevertheless, given stock market unpredictability, some partial profit taking might be prudent at this stage.