Tough economic conditions took a heavy toll on UK online
payments specialist Earthport in its financial year to 30 June
2009, sending revenues sliding 18 percent compared with the
previous year to £1.57 million ($2.6 million) and its net loss
ballooning from £3.38 million in 2007/08 to £7.3 million.
Earthport’s balance sheet also sustained
significant damage with a positive net asset value of £1.8 million
at the end of the 2008 financial year swinging to a net deficit of
“The financial results were not as positive as
we had hoped,” commented Mike Harrison, who also announced his move
from the position of executive to non-executive chairman of
Harrison’s move leaves James Bergman, CEO
since June 2008, in full executive control and, potentially, to
preside over Earthport’s sale.
Notably, Earthport stated in September:
“Discussions are ongoing with a number of parties and as such the
company is still deemed under the [London Stock Exchange] Takeover
Code to be in an ‘Offer Period’”.
Earthport has been no stranger to uncertainty,
since its founding in 1999. Initially the company offered a prepaid
e-wallet for online purchases and an online credit card acquiring
gateway but under competitive pressure from bigger players such as
PayPal exited these markets in 2006.
Earthport then decided to reposition its core
technology, the Universal Payments Network (UPN), and began
focusing on low-cost international remittance services to banks and
The UPN provides remittance services covering
some 60 countries in each of which Earthport has correspondent
banking relationships with two or three banks.
In his financial year-end statement Bergman
noted that Earthport has widened its services to corporates from
its standard credit transfer to support for open account trade
which he stressed was a cheaper and lower fraud risk alternative to
cards for online transactions. Earthport has also entered the
“These segments significantly widen
Earthport’s accessible target market,” said Bergman, who added that
to further strengthen market offerings Earthport has applied to the
UK’s Financial Services Authority for a full electronic money