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Worldpay Full-Year Results Hurt By US Slowdown

Worldpay, the U.K. payment processing company, reported revenue for all of 2016 that was lower than expectations, hurt by a slowdown in its business in the U.S.

According to a report in Reuters, Worldpay said business in the U.S. was “subdued,” with revenue during the second half of the year coming in softer than the company had thought. In the U.S., the payment processing market is getting more competitive, which may have weighed on Worldpay’s results. Net sales in the U.S. was up 15.5 percent for the year to $299 million, although the average transaction value declined 2.2 percent to $39.50. The U.S. business represents more than one-quarter of Worldpay’s revenue, noted Reuters.

While some have called for Worldpay to exit the U.S. market, Chief Executive Philip Jansen told Reuters he has no plans to sell the business in the U.S., saying the payment processor will focus on small businesses and corporate customers, offering them integrated payments through partnerships. For the year, total transaction value increased 11.6 percent, to £451.1 billion. The company processed 14.9 billion transactions and increased from a year ago, when it processed 13.1 billion transactions. Global eCommerce payment sales increased 21.7 percent to £386.6 million. The growth was due to customer wins and strength in its global retail and digital content businesses.

In a research report, Barclays said Worldpay faces a handful of challenges, including a slower-than-expected turnaround in the U.S., a delay of its New Acquiring Platform (NAP), among other things.

“We believe investors are looking to management for comfort that there is full control over the new timeline for the U.S. turnaround and NAP rollout and that these, combined with any interchange drag in FY17, remain the key issues. Nonetheless, we are ahead on FY17 EPS as it appears that consensus has not fully incorporated FX,” wrote Barclays in a research note.

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