RS2 plc - Interim Results

On 28 August 2024, RS2 plc published its interim financial statements for the six-month period ended 30 June 2024.

Revenues increased by 8.4% to €19.1 million as the growth achieved by the ‘Processing Solutions’ arm (+19% to €12.1 million) and the ‘Merchant Solutions’ business (+26% to €1.65 million) was offset the drop in income from ‘Software (Licensing) Solutions’ (-12% to €5.4 million).

Operating costs (net of other income) dropped by 2.8% to €19.2 million as the higher cost of sales were offset by lower marketing expenses. As a result, RS2 registered an operating loss of €0.08 million compared to an operating loss of €2.12 million in H1 2023. Excluding depreciation and amortisation charges, RS2 registered an EBITDA of €1.30 million in contrast to the negative EBITDA of €0.95 million in the first half of 2023.

Net finance costs increased by 59% to €0.22 million.

RS2 recorded a pre-tax loss of €0.29 million compared to the loss of €2.25 million in the same period last year. After accounting for tax charges of €0.39 million and profits attributable to non-controlling interests of €0.33 million, the net loss for the period attributable to shareholders amounted to €1.01 million compared to the loss of €2.20 million in the first half of 2023.

The Statement of Financial Position as at 30 June 2024, when compared to the corresponding figures as at 31 December 2023, shows that total assets contracted by 5.4% (or €2.7 million) to €46.8 million. Total liabilities dropped by 7.2% (or €1.9 million) to €24.4 million amid a reduction in total debt to €7.88 million. Shareholders’ funds dropped by 3.4% (or €0.8 million) to €25.1 million.

Update on Major Processing Outsourcing Agreement

In their commentary, the Directors referred to the major processing outsourcing agreement with one of the largest acquirers in the US, which was announced in January 2024. The Board explained that due to circumstances outside of the Group’s control, this project is currently on hold by the client. The Directors reported that they have no visibility on whether the project may re-start as the decision rests entirely within the client’s discretion. Nonetheless, the Group has not experienced any credit losses from this project and has received all payments for works carried out.

Outlook

The Directors explained that the Group continues to build on its global presence by adding new clients to its portfolio as well as expanding with its current ones into new territories, such as the recent partnership with ACI Worldwide.

The Board noted that with the onboarding of new clients and growth of existing customers, RS2 has processed more than 1.6 billion technical transactions over the past 12 months on the BankWORKS® platform. This increase is expected to continue to progress gradually by way of an increase from RS2’s existing clients as well as the onboarding of new clients.

RS2 Group will continue to concentrate on implementing and delivering its strategy around its main business pillars of growing and expanding the managed service business, ramping up the US expansion and building its own direct acquiring business. The Group is also investing further in its infrastructure to strengthen the technology and complete the product to play a more active role in the digitalisation of the whole customer journey, to offer omni-channel solutions and go beyond traditional payment solutions.