UK-regulated acquirer/gateway, Ecommpay – part of a Cyprus-based payment group controlled by Latvian Aleksejs Sjarki – has reported a solid performance for the year ending June 2022, with revenue rising 19% to €46.9m.
Despite the challenges posed by Covid and Brexit, the company’s high-risk digital customer base provided some protection against macro-shocks, and management expressed satisfaction with the resilient performance. Ecommpay’s acquiring services accounted for over 90% of its sales, while its revenue from pay-outs declined by 7% to €4.4m.
London headquartered Ecommpay generated twice as much revenue in the rest of Europe as it did in the UK. Its EEA sales grew by 21% to €31m, while UK revenue increased by 14% to €15m. Cost of sales rose by just 10%, leading to a 50% surge in gross profit to €13.6m. The company says it boosted margins by terminating a number of loss-making merchants.
Administrative expenses increased by 53% to €12.5m, while employee costs grew by 13% to €7.7m. Staff numbers remained relatively constant at 198 meaning the cost per employee rose by 14% to €39K. The company’s bottom line was boosted by foreign exchange gains of €4.69m but negatively impacted by a bad debt of €1.15m. Operating profit rose by a creditable 22% to €2.0m, with operating margins ticking up by 10 basis points to 4.3%.
Ecommpay has recently hired a new management team and in-sourced its business development function, previously an agent model. The company’s new approach has improved profitability and brand awareness, with sales teams reporting encouraging results from the resumption of face-to-face contact at trade shows. The company has also sharpened up its marketing, highlighting several good case studies on its website, including one from Accor Hotels in Latvia.
The new management team has developed a more focused go-to-market strategy by targeting a smaller number of verticals, including gig economy and digital services, business aviation and yachts, educational platforms, ticketing, ride-hailing, travel, and video gaming. Ecommpay’s clients include Mirai, a private jet operator, FXCM, a leading FX broker, and holiday companies such as Newmarket and Leger.
Like many high-risk acquirers, Ecommpay aims to de-risk its business by bringing retail merchants into its portfolio, although management says that margins in this segment are lower. To attract more retailers, Ecommpay has added integrations to leading shopping carts and is testing a POS solution, which should enable it to widen its target market to include omni-channel merchants.