As a result of its work with leading retailers in the Payback loyalty scheme, UMT is Germany’s largest provider of white-label mPay services. Earlier this year the group took a decisive step into the B2C arena with the acquisition of prelado, an online German mobile phone top-up retailer. UMT plans to leverage its mPay know-how and retail contacts to drive an expansion of prelado’s product range as well as to extend prelado’s reach into other major EU countries. The group has also recently reached an agreement with solarisBank of Berlin to allow it to provide customers with full banking services as well as signing an MoU with blockchain specialist Coinsilium, to explore the use of blockchain technology in its service areas. UMT shares currently trade in line with the mPay small-cap sector on current year estimates. EV/revenues, and the current price implies free cash flow growth of 13.6% from 2021 in our reverse DCF analysis.
Payback onboarding and prelado drive earnings
The consolidation of B2C website prelado and growth in fee revenues from adding three major retailers to the Payback scheme resulted in a trebling in UMT Group’s H117 revenues to €3.1m. Stripping out income relating to prior year development costs and financial asset sales, EBITDA grew from €0.2m in H116 to €0.6m in H117. Management guides for double-digit revenue and profit growth for FY17. We forecast a 233% increase in revenue and 19% growth in German GAAP EBITDA.
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