Quarterly report January 1 - March 31, 2014

Stockholm, 2014-05-06 07:50 CEST (GLOBE NEWSWIRE) -- 

First Quarter 2014 — Summary

During the first quarter, Seamless has been granted a patent for its proprietary technology solution for mobile payments, which is a central part of SEQR. The first quarter is historically the weakest for Seamless in terms of revenues. This also applies to the retail market as a whole. Sales for SEQR decreased slightly compared to the previous quarter but on a consolidated basis for the entire group, sales increased from SEK 26.4 million to SEK 40.8 million, an increase of 55% compared to the same quarter last year.

A few word from the CEO

Seamless' First Quarter of 2014 has been eventful as we strengthen our position as the market leader in Europe in mobile payments. We operate in an industry that follows the annual trade cycles and the consumer's reduced consumption during the first quarter of the year. This is also visible in SEQR's net sales. For Seamless as a whole, Q1 traditionally is a bit weaker from a revenue point of view. This remained so also in 2014, where in Q1 we produced less income than in Q4, which tends to be Seamless' strongest quarter.

We will continue to see sales fluctuate during some periods, as a natural part of the evolution of a company with a service that is still new in the marketplace and on the cusp of a major expansion. SEQR is in a start-up phase in many countries where we see a good long-term trend and a lot of positive interest.

During the quarter, the joint cooperation with our customers has intensified. As a part of the strategy for acquisition of customers, the added value features of the SEQR app in the form of loyalty and special offerings have been significantly increased. Primarily in the form of immediate rebates or refunds of money when paying with SEQR, which increases transactions and upselling with SEQR. SEQR offers a customer experience of speed and flexibility that makes life easier, and where the users are saving both time and money. We are seeing that 80% of those trying out SEQR for the first time go on to use the app regularly.  Meanwhile, we are at the beginning of the paradigm shift where the mobile is becoming our next tool used in order to pay.

As part of the reality that we, via our technology, are transforming the payment industry, and in order to simplify the collection and giving of financial contributions to non-profit organizations, late last quarter we launched www.allainsamlingar.se. This allows organizations working for good causes to receive contributions in a simple process via SEQR, and as well avoid transaction charges. During the first quarter of the year, additional organizations joined up including Amnesty International and Tjejzonen. 

During the quarter we continued to sign agreements with parties active in the banking and retail sectors. Via the agreement with the payment solution provider Payzone, it will be possible for the 20,000 restaurants and shops that use Payzone's payment terminals to pay with SEQR, without further adaptations. The rollout of SEQR to Q-Park's parking facilities continued, and also commenced at APCOA's (formerly Europark) 1,400 parking spaces after a new agreement was signed with Seamless. Those who pay for the parking with SEQR pay nothing extra, and are able to both pay the initial charge as well as extend the parking time directly in the app without having to go back to their car.

We are also pleased that the Swedish Patent and Registration Office (PRV) has approved our patent claim for our proprietary solution that we have developed for secure payments with a mobile phone, which is a key element in SEQR. 

Peter Fredell

CEO

The Group

Revenues

Seamless' revenues for the first quarter totaled SEK 40,774 thousand (26,385), which is 55 percent higher than the same quarter last year. The sales are distributed between the various business segments, with 22 (42) percent from the Transaction Switch business segment, with 73 (53) percent from the Distribution business segment, and five (5) percent from the SEQR business segment.

Financial Results

•           The consolidated operating loss amounted to SEK -33,445 thousand (-22,270) in the first quarter.

•           Net losses from financial items for the first quarter amounted to SEK -78 thousand (-83).

•           Earnings per share amounted to SEK -0.80 (-0.58) for the quarter.

Employees

A total of 153 (120) people were employed at the end of the quarter. In addition to this, Seamless has retained approximately 35 consultants — primarily in India, Ghana and Pakistan. Seamless continued to recruit key personnel, particularly in the area of product development, in the first quarter. The workforce has collectively increased by ten people, or seven percent, as compared with the previous quarter and by 33 people, 27.5 percent compared to the same quarter the previous year.

Investments

During the quarter, investments have been made in an amount of SEK 855 thousand (10,282). Product development costs have been capitalized at a value of SEK 5,519 thousand (4,222), while depreciation taken amounted to SEK -2,769 thousand (-1,752). 

Cash Flow and Financial Position

For the first quarter, the cash flow from operating activities amounted to SEK -35,513 thousand         (-14,155). Bank deposits and cash on hand at the end of the quarter amounted to SEK 260,320 thousand (82,474).

The Group has interest-bearing liabilities in the form of leases for hardware amounting to SEK -2,794 thousand (-3,361), divided into long-term debt of SEK -752 thousand (-1,475) and short-term debt of SEK -2,042 thousand (-1,886). The Company has no interest-bearing liabilities to banks or other credit institutions.

Other than the above, the Group has no borrowings. Seamless continues to maintain a strong financial position with an equity ratio of 88 percent (72).

Parent company

The parent company's net sales for the quarter amounted to SEK 0 (0) thousand and net financial results amounted to a loss of SEK -6,292 thousand (-5,496). Net financial gains/losses in the parent company were SEK 0 thousand (-19) and bank deposits/cash on hand amounted to SEK 240,467 thousand (73,924) at the end of the quarter. The parent company had five (9) employees at end of the quarter.