Earthport CEO transitions to executive chairman role as revenue slip

Financial services company Earthport warned that revenues for its financial year will be 10-15% below expectations and that chief executive Hank Uberoi will become executive chairman next month to "fully focus on a growing number of strategic opportunities and partnerships" with the search beginning for a new CEO to run daily operations.

Earthport said revenues for the year to 30 June 2018 were affected by delays in expected contracts and client implementations, as well as changes at one of its largest e-commerce clients.

The AIM-listed company noted that although many of the contracts were expected to be completed within the year, they would now result in lower revenues for the group, and that the change of plans from its e-commerce client regarding its UK corridor for domestic payments would result in a loss of "approximately 5% of projected revenues."

EBITDA was expected to be "broadly in line" with market forecasts.

The group said activity in its pipeline was "stronger than at any time in the firm's history", as an increasing number of banks and corporate entities begun active discussions with Earthport across the US, Europe, India, Australia and Southeast Asia.

Uberoi said, "We are in a fast changing environment for cross border payments and many of the trends we have identified are now accelerating."

"Earthport is in an excellent market position and commands significant assets to take advantage of the growing opportunities but scale will be an important factor going forward. We have identified emerging partnership opportunities and I expect the next period of time will be both exciting and challenging, given our ambitions and the pace of change within the payments sector," he added.

Phil Hickman, non-executive chairman who will take over from Uberoi as CEO on an interim basis, added "Despite a temporary setback in revenue growth rates, impacting full year 2018 revenue expectations, Earthport's pipeline and brand profile has never been better."

"The market is increasingly open to alternative solutions to correspondent banking and, as a leader in this field, it is imperative Earthport takes advantage of the many strategic opportunities presented by the current environment," he concluded.

As of 0845 GMT, shares had dropped 34.10% to 9.56p.