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PCI-Pal narrow pre-tax losses as North American momentum builds


PCI-Pal [LON:PCIP], a fintech software solutions company, announced earnings results for the full year ended June 30 2022 (6th September). With a revenue increase of 62% to GBP11.94m and pre-tax losses falling to GBP3.11m from GBP4.19m, the company saw its shares rise by almost 5% in the hours following the publication of its financial report. PCI-Pal and its investors will be hoping that its promising earnings results are a sign of things to come as the company continues to expand its operations

The company’s share price closed on 6th September at 53.8p and has ranged between 51.1p and 95.5p over the last 52 weeks, offering a year-to-date return of -8.62%% and a one-year return of -42.43%. The current market capitalisation of the company is GBP34.4m.

Continued Growth

PCI-Pal is a leading provider of SaaS (Software as a Service) solutions that allow companies to take payments from their customers securely, adhere to strict industry governance, and remove their business from the significant risks posed by non-compliance and data loss. The company’s technology allows purchasers and vendors to transact secure payments and exchange data in any business communications environment including voice, chat, social, email, and contact centre. Founded in 1999, the group has expanded significantly over recent years and was ranked as the 56th fastest growing UK company by Growth Index in June.

PCI-Pal’s has been able to partner with a wide range of companies. The entirety of its product-base is available from its global cloud platform hosted on Amazon Web Services (AWS), with regional servers across EMEA and North America. Amid PCI-Pal’s continued growth, sales have increased by over 50% and the business has expanded into the US and Australia, with both countries granting it further patents. The patents specifically cover the way that PCI-Pal is able to manipulate the signalling and voice stream of phone calls, allowing it to take a non-invasive approach to its handling of data within its Agent Assist and IVR solutions.

Narrowing Losses

For the year ended 30th June 2022, PCI-Pal reported that its revenues increased by 62% to GBP11.94m from GBP7.36m in the previous year. The UK-based payment services provider also revealed that pre-tax losses for the year were GBP3.1m compared with a loss of GBP4.2m in 2021 as it booked a significant increase in total annual contract value. Furthermore, gross margin increased to 84% from 75% reflecting the fact that the majority of revenues were delivered through the company’s cloud-based Amazon Web Services (AWS) platform.

Operationally, the company said: “North American momentum continues to build”, with revenue up 83% in this region and a year-on year increase in annual contract value of 7%. North America now accounts for 28% of the group’s revenue. Over the past fiscal year, PCI-Pal has also opened offices in Australia and Canada, which have helped it to: “…expand the global reach of the group”. With 217 new sales contracts throughout the year, up from 195 in 2021 and a further 164 new contracts live with its services in the period, compared to 121 in 2021, the business appears to be well-positioned for financial and operational success in the coming years.

Big Opportunities

PCI-Pal’s share price rose 2.89% yesterday following the company’s latest financial report, implying the announcement has exceeded market expectations. Commenting on results and prospects, chief executive, James Barham said the group’s continued progress has means it is: “very well positioned to further capitalise on the broadening opportunities” in FY23.

PCI-Pal’s current partnerships include American Express, PayPal, HSBC and MasterCard, among others. With these partnerships secured for the next few years, the company’s future success will be largely dictated by how many customers it can attract. Its customer base is already large and diverse, with organisations such as DHL, IKEA and Virgin choosing PCI-Pal to secure their payments. Furthering the connections with these organisations will be crucial for the business, however.

A report from strategic advisory firm, finnCap said: “the impressive FY22 results set PCI-Pal up for a step-change in scale,” with the business: “comfortably on track and well-funded to see it through to cash flow profitability” in the coming years. As such, finnCap have advised investors to: “note the security and look to gain exposure early.”

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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