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.
S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this report is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.
Conflict of Interest Notice
S3 Consortium Pty Ltd does and seeks to do business with companies featured in its reports. As a result, investors should be aware that the S3 Consortium may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making any investment decision. The publishers of this report also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this report.
The information contained in this report is current at the finalised date. The information contained in this report is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.