Net Bet Blog

Neteller (NLR) continues to make steady progress. A bank that has net cash and a strong pipeline of deals is attractive.

My slight concern is the relatively small increase in sign-ups. 3% is not that great and for a high growth company one might have expected a little more.

Even so, NLR is cash rich and the current crisis may open up some good investment opportunities to allow quicker expansion. The move to sign up more non-gaming sites is also a good long term move but this will be slow progress and with only 100,000 active users there is a long way to go before they will reach Paypal levels.

The key in my mine is whether they can crack Asia and there is some sense that they are at least in there at the beginning although competition will be severe.

THIRD QUARTER TRADING UPDATE [ADVFN]

Friday, 31 October 2008 - NETELLER Plc (LSE: NLR), the independent global online payments business, is pleased to provide a trading update in respect of its performance during the third quarter to 30 September 2008.

Highlights

* E-wallet continues to show growth, with revenue up 27% from Q3 2007, at $13.0
million.
* European revenue (including NETBANX) was $12.1 million, an increase of 20% from Q3
2007; Asia Pacific (including NETBANX Asia) grew 61% to $4.9 million over the same period.
* Active e-wallet users totalled 97,447 in Q3 2008, up 3% from Q3 2007.
* E-wallet revenue per active e-wallet user continued to improve, reaching $134 in Q3
2008, up 23% from $109 in Q3 2007 and up 3% from Q2 2008.
* Average daily sign ups and average daily receipts in Q3 2008 showed growth of 3% and 31% respectively from Q3 2007.
* Gross margin of 60% (Q2 2008: 61%) and operating income of $3.8 million (Q3 2007:
$2.7 million).
* Solid balance sheet at 30 September 2008 with $89.4 million cash and cash
equivalents.
* Launch of Net+ prepaid physical and virtual cards to Group's existing e-wallet
users.
* Proposed renaming of Group to NEOVIA Financial Plc subject to shareholder approval.

Ron Martin, President & CEO, commented "Despite the challenging economic environment, the Group has continued to show underlying growth in its core e-wallet business both in Europe and Asia Pacific. Our efforts to target key merchants with our integrated Payment Suite are beginning to bear fruit and we have improved our consumer offering with further enhancements to the e-wallet and the launch of our Net+ prepaid cards. The current market conditions are producing a number of interesting investment
opportunities which we are actively pursuing and we hope to provide further updates in due course. We anticipate the core business will continue growing into the fourth quarter, and the Board believes the Group is on track to meet current market expectations for the full year."