Summary
Global Payments Inc. reported a strong fiscal year ended May 31, 2008, with a 20% increase in revenue to $1.27 billion, driven primarily by its merchant services segment. The company saw net income rise by 14% to $162.8 million, with diluted earnings per share increasing to $2.01 from $1.75 in the prior year. Despite this overall growth, the merchant services segment experienced a slight decrease in operating margin from 27.9% to 25.9%, while the money transfer segment saw a decline in operating income and margin. The company also made strategic acquisitions during the year, including a portfolio of merchants processing Discover transactions, expanding its ability to offer a single point of contact for major card networks. It also acquired assets of a money transfer company in Spain to broaden its customer base and market share, and acquired additional money transfer locations in the U.S. to boost its DolEx brand. A significant subsequent event was the June 2008 acquisition of a 51% majority stake in HSBC Merchant Services in the UK for $439 million, significantly expanding its international footprint.
Key Highlights
- 1Revenue increased by 20% year-over-year to $1.27 billion, driven by the merchant services segment.
- 2Net income grew by 14% to $162.8 million, with diluted EPS rising to $2.01.
- 3Merchant services revenue grew 22% to $1.13 billion, with a 13% increase in operating income.
- 4Money transfer segment revenue increased 8% to $143.6 million, but operating income decreased 6%.
- 5Acquired a portfolio to process Discover transactions, enhancing merchant service offerings.
- 6Acquired Euroenvios Money Transfer (LFS Spain) and additional U.S. money transfer locations to expand money transfer business.
- 7Completed a significant acquisition of 51% of HSBC Merchant Services in the UK for $439 million in June 2008, expanding international presence.