Credit card spending hikes up Global Payments' profits
An 11 per cent rise in the number of consumers using credit cards has led to a 37 per cent profit boost for Leicester-headquartered Global Payments UK, which operates as HSBC Merchant Services. The business also reported a 3 per cent hike in revenue to £143.8m in its annual accounts to 31 May 2011.
Global Payments UK, which is owned by US-based Global Payments Inc, reported a pre-tax profit of £33.4m - up from £24.4m the year before - in its recently-filed accounts seen by Insider.
Its directors said: "The increase is due in part to consumer spending on credit card transactions which are up 11 per cent compared to the prior year, and in part due to lower operating costs arising from cost efficiency."
The company, which has 524 employees at its Leicester, Sheffield and London offices, said it "aims to continue the development of the business by recruiting new merchants".
It reported net assets at 31 May 2011 of £202.5m - this was down on the previous year's £263.7m which the company said was following a £66.5m return of capital to its immediate parent company Global Payments Acquisition Corporation 2, based in Luxembourg. It was also paid a £3.7m dividend.
Looking ahead, the directors said the company should continue to make money though there was a danger of counterparty credit risk, adding: "The group is expected to remain profitable and cash generative."
Global Payments UK paid £9.06m in tax during the year and £98.7m in administrative costs. A total of £420.2m was received in commission and related income though £276.3m was paid in commission expenses.
Global Payments is the world's sixth largest payment processing business and its UK arm formed HSBC Merchant Services following a marketing alliance with HSBC. Its main focus is the electronic transaction processing of point-of-sale payments on issued debit and credit cards.
