RS2 Software plc - Interim Directors’ Statement

On 21 December 2021, RS2 Software plc provided an update on the Group’s performance in 2021 and the expectations for the 2022 financial year.

The Board of Directors explained that in 2021, RS2 continued to execute its strategy to deliver the planned growth of the Group by adding new countries to its client base in both Asia Pacific and Latin America. In APAC the Group is engaged in deploying new customers on its cloud in Singapore, Indonesia and Australia, while in LATAM the Group increased its customer base in Brazil as well as Columbia.

RS2 confirmed that the 2021 financials will continue to show strong top line growth, but overall revenue will lag projections in view of the delay in the launch of the ISO business in the US, which was caused by a decision taken by the Sponsor bank to exit the acquiring business. RS2’s US subsidiary has now secured a new Sponsor to execute the ISO business in Q1 2022. The ISO business refers to the Independent Sales Organisation that sells payment services to the Merchant on behalf of banks and financial institutions.

RS2 also explained that earlier this year, it obtained the financial license (E Money Institute Licence or EMI Licence) required to launch the new acquiring business. However, the launch of the new line of business was postponed to Q1 2022 due to unexpected circumstances related to terminal certification.

Despite these delays, RS2 met all other projected revenues and is expecting a respectable profit for 2021 which exceeds the projections published in the prospectus published in early 2021.

For the upcoming financial year, RS2 noted that it has a strong pipeline of new business. The company explained that it will continue with its growth strategy that includes the launch of several new products including Merchant reconciliation modules, ELO payment methods (a Brazilian card scheme), and e-Commerce gateways.

The Board of Directors noted that the significant transformation within the financial services industry was accelerated by the pandemic. In this context, payments are becoming increasingly cashless and supporting the development of digital economies. RS2 notes that the “Processing Segment” continues to show strong growth, especially in the US, while “Merchant Services” is more prominent across Europe.