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Wirecard forecasts further rapid growth in 2020

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By Reuters
Wirecard forecasts further rapid growth in 2020
FILE PHOTO: The headquarters of Wirecard AG is seen in Aschheim near Munich, Germany April 25, 2019. REUTERS/Michael Dalder/File Photo   -   Copyright  Michael Dalder(Reuters)

FRANKFURT (Reuters) – Wirecard <WDIG.DE> reported a 43% gain in third-quarter core profits on Wednesday, as the German payments company awaits the verdict of an independent investigation by KPMG into allegations it has inflated reported sales and profits.

The company confirmed its 2019 guidance and forecast core earnings before interest, taxation, depreciation and amortisation (EBITDA) in 2020 of 1-1.12 billion euros ($1.11-$1.24 billion), implying growth of 34% at the mid-point.

Wirecard called in KPMG in response to a series of investigative reports in the Financial Times, the most of recent of which alleged that its finance team had inflated financials at its units in Dubai and Ireland.

CEO Markus Braun has, however, pre-empted the probe’s findings in recent media interviews in which he has dismissed the FT’s allegations as false while reiterating his bullish view on Wirecard’s prospects.

Munich-based Wirecard, a digital payments company serving more than 300,000 merchants around the world, last month told investors it expected its revenues to grow sixfold by the middle of the next decade.

Braun has also said that Wirecard’s so-called ‘take rate’, or the fee it charges on transactions, will continue to grow over time as its digital payments platform achieves increasing scale and reach.

Wirecard said this week it would establish a direct presence in China for the first time by buying an 80% stake in Beijing-based AllScore Payments Systems.

It has an option to buy AllScore outright after two years for a maximum consideration of 109 million euros. China’s EBITDA contribution is forecast to reach 50 million euros by 2022, according to a Wirecard presentation.

“Alongside strong organic growth, we are opening up one of the largest growth markets with our entry into the Chinese market and expanding our competitive advantage even further,” Braun said in a statement.

($1 = 0.9031 euros)

(Reporting by Douglas Busvine; Editing by Michelle Martin)