An international e-commerce transaction firm started by two Dublin brothers has reported a 30pc rise in revenues for the year to US$2m.
The company, FreeStar Technology, processed more than 18 million credit card transactions in the past year.
FreeStar, which was established by brothers Paul and Ciaran Egan, said that the revenue increase was propelled by an increase in software development income and higher payment processing volumes.
Payment processing increased to 18 million transactions for businesses like Ikea and Finnair, compared with 15.5 million a year earlier.
The company said that in the past year it has achieved EMV (Express-MasterCard-Visa) certification, entered into agreements with several of the largest European acquiring banks to launch a new product and established critical sales, distribution and development relationships.
Earlier this year FreeStar, which is headquartered in Dublin, raised US$10m in venture capital from Stockholm-based venture capital firm Svensk Kredit och Finans AB.
Based on the results, CEO Paul Egan said : “We believe that in the coming year we will begin to reward our investors for their confidence as we demonstrate the value that our team has created.”
The company said losses narrowed by 36pc to US$13.9m from US$22.1m a year earlier.
Chief financial officer Ciaran Egan explained that US$10.1m of the net loss was accounted for by non-cash costs. “We continue to use non-cash compensation whenever possible to conserve the company’s cash. The non-cash costs are in the form of common stock, stock options and warrants. We believe that this helps us maximise shareholder value in the long term.”
He reported that the company raised more than US$7.5m from the sale of stock and the exercise of stock options and warrants. It finished the year with more than US$2.9m in cash and with working capital of approximately US$2.4m and no long-term debt.
Egan also noted that the company has the mechanisms in place to raise an additional US$14.6m in equity capital.
Egan added: “It is important to note that our costs include fixed and semi-variable items, such as the leases for computer hardware and software and some software development costs. These costs do not change in direct proportion to sales, so that if our sales should increase our gross margins could widen.”
By John Kennedy