We have seen the electronic transactions market appeal in previous post, with its fast growing up-trend. Let’s try now to see why Visa Inc is so interesting after its record IPO during last march.On April 28 Visa Inc has announced its operational performance highlights including:
• Payments volume grew 19% over the prior year to $681 billion;
• Total volume, inclusive of cash volume was $1.1 trillion, an increase of 21% over the prior year;
• Total cards carrying the Visa brands rose 16% worldwide to 1.6 billion over the prior year; and
• Total payment transactions increased by 16% over the prior year to 11 billion.
For the fiscal second quarter 2008, service fees were $792 million, up 29% over the prior year on a pro forma basis, and were recognized based on payment volume in the prior quarter.
As for every new entry in Stock Exchange it is always hard to give a deep analysis on the financial statements because you cannot look behind in the last 5/10 years, but just the last couple of years. This is not true of course for auditors and professional analysts.
Visa’s balance sheet is showing an interesting Current Liabilities/Current Asset ratio equal to 0.58 that is quite good as good is the long term ratio with Total Liabilities/Total Asset ratio equals to 0.33%. The Company is in good health.
Cash Flow is showing the big figures resulting by the IPO’s stock placements, but it is hard to comment deeply this statement with the past results. Same speech for the Income statements: we can just appreciate the increasing revenues strongly correlated to the growing transactions all over the world.
It is quite interesting to have a look on the Visa's annual financial expected results over next three years:
• Total volume, inclusive of cash volume was $1.1 trillion, an increase of 21% over the prior year;
• Total cards carrying the Visa brands rose 16% worldwide to 1.6 billion over the prior year; and
• Total payment transactions increased by 16% over the prior year to 11 billion.
For the fiscal second quarter 2008, service fees were $792 million, up 29% over the prior year on a pro forma basis, and were recognized based on payment volume in the prior quarter.
As for every new entry in Stock Exchange it is always hard to give a deep analysis on the financial statements because you cannot look behind in the last 5/10 years, but just the last couple of years. This is not true of course for auditors and professional analysts.
Visa’s balance sheet is showing an interesting Current Liabilities/Current Asset ratio equal to 0.58 that is quite good as good is the long term ratio with Total Liabilities/Total Asset ratio equals to 0.33%. The Company is in good health.
Cash Flow is showing the big figures resulting by the IPO’s stock placements, but it is hard to comment deeply this statement with the past results. Same speech for the Income statements: we can just appreciate the increasing revenues strongly correlated to the growing transactions all over the world.
It is quite interesting to have a look on the Visa's annual financial expected results over next three years:
-Net Revenue Growth: 11% to 15%
- Adjusted Operating Margin: Low 40% range
- EPS Growth 20%
- Free cash flow $1B
Visa's board has announced its policy about this huge free cash flow saying that it will fund growth and return cash to shareholders with dividends and buyback programs.
Words are just words. However I strongly believe that the management skill showed over the past years and the incredible goodwill represented by the Visa brand all over the world will guarantee these results. It's for that reason that Value Finance portfolio has in Visa one of its more representative lines of investment!
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1 comment:
interesting details.
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