NETeller settles w/DoJ

[lojo]

Punks

[jetset]

Neteller issued a delayed first quarter trading report today (July 25)

The report is hardly positive - after restructuring costs of over $12 million and other expenses the company posted a pre-tax loss for the three months to March 2007 of $14 million compared to a profit of $16 million the year previously.

Employees now number 425 in total, and the company has embarked on a major initiative to "....realign its cost base with anticipated revenues on a worldwide basis”.

Cash balances after its recent $136 million settlement with the US DoJ are at $74.5 million.

Neteller has been re-admitted to the AIM.

Severe attrition to customer base - the active customer base outside of the US has fallen over two-thirds down to 99 575.

First quarter group revenue, including a partial contribution from the US and a full quarter’s contribution from Canada (which the company also exited towards the end of the period) was $32.7 million from $71.8 million. This included approximately $14 million in now lost US revenue.

The statement did not disclose how much of this was due to the now discontinued Canadian operations.

Operating income in the quarter was $4.5 million or 13.6 percent of revenue.

Initial analyst reaction has been pessimistic over Neteller’s prospects, despite still being active in Europe.

“Which parts of Europe are they going to be active in? (It) has had the living daylights scared out of it by the USAO. It won’t want to take any more risks.”

The analyst added that the market was different in Europe where online gaming customers tended to have much more faith in the operators than did their equivalents in the US. “There is a lot more trust.”

[Mousey]

Cash balances after its recent $136 million settlement with the US DoJ are at $74.5 million.

That doesn't sound good.

[Swede]

Actual balace is quintuple that amount, liquid. And that, for comparisons sake, is just the yearly salary of the next highest paid CEO or GM or manager there. God bless them, each and everyone...

[EasyRhino]

That doesn't sound good.

Note that the cash balance figure doesn't include customer accounts. Actually, I don't know if the amount in customer accounts is even regularly disclosed in the financials.

[jetset]

HOW ARE THE MIGHTY FALLEN (Update)

2006 Neteller numbers show how badly US troubles impacted the e-wallet

Whilst the weak Neteller Quarter 1 2007 numbers was the focus of attention of most analysts yesterday (Wednesday), it was the year prior to the clash with the US authorities that best served to illustrate how successful the company was before its US troubles began with the arrest of founders Lawrence and Lefebvre in the US in January this year.

Results for 2006 showed impressive gains across all business metrics, with the most significant achievements made in its global expansion. Revenue was up by 50 percent from 2005 to 2006, and the company's customer base grew more than 50 percent.

CEO Ron Martin commented: "The third quarter [2006] marked another milestone with the addition of our three millionth customer,"

He added that the active customer base was up by 29 percent to 640 701 active customers in 2006. That included 489 535 U.S. customers; 59 335 from Canada; 71 421 from Europe whilst Asia and the rest of the world contributed 20 410 to the active customer total.

The year 2007 is unlikely to match these statistics as a consquence of the e-wallet's expensive run-in with the US Department of Justice due to its popularity as a payment channel for US online gamblers. The company has withdrawn from the US, Canadian, Turkish and now Israeli markets and as a result could face a drop in income of between 70 and 75 percent.

Recognising the dangers, Neteller chairman Dale Johnson remarks: "In response to these significant challenges, the group is energetically implementing a strategy to restore its pre-eminence in providing money transfer services for the online gaming sector in selected markets outside of North American, through continued investment in product solutions and technology development."

Neteller's plan for rebuilding and bouncing back from the setbacks in the United States mainly involve expansion into other geographic areas through a number of market and user building initiatives.

By the end of 2006 the company had added 11 new countries, showed improved growth in Europe and Asia, and increased its non-North American active customers by 65 percent, so further improvements are clearly possible.

But the company will have to regain the respect and trust of customers at the player level, many of whom are disenchanted by the manner in which Neteller communicated and implemented decisions during its trials and tribulations with the US authorities. The resumption of full Neteller card services will be especially important in this regard.

Neteller stocks stumbled badly, dropping 113 points when it resumed trading on the AIM on Wednesday following a 6 month hiatus whilst the shares were suspended - the company's performance for the rest of the week will be the subject of close attention by analysts and investors alike.

CEO Martin still felt that the restoration of trade was a positive step for the company, viewing it as the start of a new chapter for Neteller following the resolution of its American hassles.

[Auditor]

We have an exclusive interview between J Todd with www.APCW.org and Dan Star, the Executive Vice President or Sales and Marketing for The Neteller Group!

These questions will be answered:
When will I be able to request my money?
How do I request my money?
How long will it take to get my money?

APCW.org :: Log in

Register with APCW.org and Join the Fight!

[jetset]

Why is Neteller not paying interest on the funds of US players held since January????

And why did they pull out of Canada?

[theAPCW]

It is my belief that NETeller pulled out of Canada because the political puppets running the show up there were manipulated by US Authorities. Basically, the current Canadian government will do whatever the Bush Boys want.

As far as interest on the NETeller money goes, I suppose that's an issue you would need to take up with the US Department of Justice. I'm just happy to be gtting the cash back instead od "seized as evidence".

[jetset]

Nevertheless, these are legitimate and valid questions that Neteller has not answered - and they are pertinent to those of us who use/used this "service" and would like to hear what the management rationale behind this remarkable decision might be.

Whilst you have their ear, it's a good opportunity to ask them, if only to watch the tap dancing that may or may not follow....