Board confident 2007 results to meet market expectations – building momentum into 2008
Friday, 11 January 2008 – NETELLER Plc (LSE: NLR), the independent global online payments business, is pleased to provide a trading update in respect of its preliminary results for the year ended 31 December 2007, which the Company intends to release on Tuesday, 11 March 2008.
Trading update
The Board announces that the Group’s operating businesses have traded in line with management’s expectations in the fourth quarter and the Board is confident that the full year results for the Group will meet market expectations.
The Company will make the final payment of US$ 38.25 million on 16 January 2008 to the US authorities in respect of its obligations under the deferred prosecution agreement. This amount reflects recent discussions with US authorities confirming that US$ 57.7 million of the Group’s funds were seized, as opposed to the US$ 60 million previously thought and announced. The total amount to be paid to the US authorities in connection with this matter remains the same as previously announced (US$ 136 million).
As part of the arrangements with the USAO, the Group implemented the Distribution Plan to return approximately US$ 94 million of funds owed to US customers. The Group has to date repaid approximately US$ 81 million of this amount. Any unpaid amounts are currently held in trust accounts with the Group’s bank. Under the terms of the Distribution Plan, US customers have until 26 January 2008 to withdraw their funds using the NETELLER website.
The sale of the Group’s principal Calgary property has been delayed as a result of the lenders for the intended purchaser introducing significantly less attractive terms in the wake of the recent developments in North American financial markets. Consequently, the final condition to the Purchase and Sale Agreement for the property has not been satisfied. Constructive discussions with the intended purchaser and its lenders are continuing but there can be no certainty that a transaction will be concluded. However, the Group is optimistic about achieving a sale in due course given the current strength of the Calgary property market.
The Group has also recently concluded a settlement with a third party vendor who had commenced litigation against the Group for alleged breach of contract (as previously disclosed in the Group’s interim statement of 23 August 2007), paying an amount of approximately CAD$ 1.75 million to settle any potential claims.
Building Momentum into 2008
During 2008 the Group will deliver a significant number of initiatives in support of its strategic goal of providing innovative payment solutions for online communities, including:
- Revitalised Consumer Brand: At the beginning of January the Group updated its NETELLER Payment Network brand for consumers, at www.neteller.com. The bold new brand is designed to appeal directly to the Group’s core demographic, with an offer of a suite of lifestyle financial services for the online generation. The update creates a new brand platform for the release of new consumer services throughout the year.
- Stronger Consumer Offer: During the first half of the 2008 the Group will introduce significant enhancements to its consumer services, including a new suite of highly secure and convenient card products, a new rewards program, and a range of new payment options.
- Enhanced Merchant Value Proposition: During the first quarter the Group will be announcing details of a broad new suite of e-commerce applications for both gaming and non-gaming merchants. The suite, based around the Group’s existing core gateway and e-money wallet services, will help online merchants create stronger customer relationships than are possible with other payment solutions such as credit cards. The suite has already been deployed to a limited number of merchants, with a broader deployment planned for the first half.
- Updated Merchant Branding: As the Group introduces its new payment suite it will also be revising its merchant facing brands. The first of these will be the Group’s high velocity NetBanx payment gateway, in the first quarter.
The Group anticipates it will make further announcements as these initiatives are rolled out during 2008.
Ron Martin, President & CEO, commented “Considering the significant challenges that our Company has faced during the past year, I am pleased with the performance of the business in 2007 and I am excited about the prospects for 2008. We have a number of key strategic initiatives which will be launched in 2008, commencing this week with the rebranding of our consumer-facing site, www.neteller.com. These developments represent a step change in the products and services we can offer our merchants and customers. I am confident about our strategy and that these initiatives will be reflected in our performance for 2008.”
The Company’s next update will be the announcement of its preliminary results for the year ended 31 December 2007 on Tuesday, 11 March 2008.
About the NETELLER Group
Trusted by consumers and merchants in over 160 countries to move and manage billions of dollars each year, the NETELLER Group operates the world's leading independent online payments business. The Group specialises in providing innovative and instant payment services where money transfer is difficult or risky due to identity, trust, currency exchange, or distance. Being independent has allowed the Group to support thousands of retailers and merchants in many geographies and across multiple industries.
NETELLER Plc is quoted on the London Stock Exchange’s AIM market, with a ticker symbol of NLR. NETELLER (UK) Limited is authorised by the Financial Services Authority (FSA) to operate as a regulated e-money issuer. For more information about the Group visit www.netellergroup.com.
Media and Investor Contacts
NETELLER Group media and investor relations are managed by Citigate Dewe Rogerson. Contact them through the Media Relations Contact page.
