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NETeller - Shares burst through £9 level

October 2005

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • NLR
  • Price:
  • 901p
The shares soared to a new high of 919p after NETeller issued results for the six months ended 30 June, which even beat Numis’ top of the range forecasts. Turnover rose 122% to US$73.5m, with pretax profit increasing 126% to US$40.6m, which made for a 55% increase in earnings to 31 cents (9% tax). Net cash increased from US$77m to US$86m.  This impressive performance was driven by several factors, including gross margins rising 4% to 73% thanks mainly to a continued reduction in bad debts, which fell from 15.1% to 12.6%, due primarily to the fact that NETeller has got better at preventing fraud. We would also presume that the rising gross margins indicate that competition from new entrants hasn’t yet become more i ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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