Disappointing Q1 results from Neovia

Online e-cash processor Neovia plc (formerly Neteller) has releasing trading results for the first quarter of 2009, and the numbers are disappointing.
* Group revenue of $ 16.4 million is down 3 percent compared to Q1 2008
* E-wallet revenue is flat at $ 11.4 million, although overall fee revenue, including gateway businesses,  is up 3 percent from Q1 2008 to $ 15.8 million
* Average daily receipts are down 4 percent from Q4 2008 and 11 percent from Q1 2008
* Active e-wallet users are down 5 percent at 92 757 compared to Q4 2008
* E-wallet revenue per active e-wallet user is $ 122 for Q1 2009, an 8 percent increase on Q1 2008
* Gross margin is at 58 percent, a decline compared to the 62 percent and 64 percent recorded respectively for Q1 2008 and Q4 2008
* Income from operations is up 29 percent to $ 3.1 million compared to $ 2.4 million in Q1 2008
* Total group cash is $ 76.5 million as at 31 March 2009
Dale Johnson, Neovia’s chairman, commented: “Trading in the first three months of 2009 is disappointing and reflects a weakening trend in Europe due to an increasingly competitive market, challenging economic conditions, volatile current markets and limitations in new product introductions until Newteller (the Company’s new technology platform) is launched in Q3 2009.
“The future benefits of Newteller will include cost savings and greater operating efficiencies within the Group. We expect 2009 to be a year of both significant challenge and exciting opportunity. Investment in the business will continue, especially for completion of the Newteller programme. Strategic opportunities are being examined, particularly in support of the Group’s card strategy. The work to create greater differentiation, accompanied by a cost structure that creates competitive advantage, will be accelerated.
“While the Board remains confident about the Group’s prospects, the overarching themes for 2009 will be leveraging high potential initiatives, cost control and prudent cash management.”

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