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Growth Portfolio: Mint Payments Ltd (ASX: MNW)

Published 10-MAR-2016 00:00 A.M.


2 minute read

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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.


General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

Conflicts of Interest Notice

S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

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The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

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