Overview: Mint Payments Limited (“Mint”, the Company”), is an Australian technology company focused on payment solutions, transaction processing, and ecommerce. Mint’s payment technology allows enterprises to accept credit card and debit card payments on most devices. The Company has offices and operations in Australia, Singapore, and New Zealand. Founded in 2007, Mint listed on the Australian Securities Exchange (“ASX”) in 2009.
Catalysts: Mint is recording strong user growth on its platform and total transaction values have increased 243% year-on-year largely driven by its major customers Bank of New Zealand and MYOB. Revenue has increased at an average rate of 140% over the past three years. Mint has strong operational leverage to incremental contract wins and agreements with partners in the US and Asia allows Mint to leverage off third-party distribution networks.
Hurdles: Even though Mint is recording revenue growth, the Company is not yet profitable. To date, Mint has funded its operations via equity and remains reliant on external capital. Working capital facilities of $6m are set to expire in September 2016 and future funding is yet to be secured. The Company is subject to increasing competition as major providers are implementing in-house mobile payment solutions.
Investment View: Mint offers speculative exposure to the international payment processing industry. We are attracted to its revenue growth trajectory, user growth on the platform, and strategic partnerships with international payment service providers. Cash flow, funding constraints, and increasing competition are principal risks. Recognising its growth potential following recently established partnerships, we initiate coverage with a ‘spec buy’ recommendation.
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