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Daniel Stewart & Co says Planet Payment’s standout deal with UAE bank supports revenue forecasts, says 'buy'

Daniel Stewart & Company published a note on Planet Payment (AIM: PPT) after the multi-currency processing solutions provider announced an agreement with UAE-based Network International to provide it with its proprietary Dynamic Currency Conversion (DCC) services branded as Pay in Your Currency, which the broker said was a standout deal supporting its revenue forecasts for 2010.

DS&C said that Network International, which is the largest acquiring bank in the Middle East, represented an ideal partner for the company to facilitate the launch of DCC into the region.

The Pay in Your Currency product will allow the bank’s customers to choose whether to pay for products and services in their home currency or in the currency of the country they are in, an offer which has proved popular in other regions where Planet Payment operates, including those with a high proportion of international businesses and leisure travellers. This included the UAE, where international incoming travel spend is forecast to rise to £27 billion by 2019, which DS&C said would provide the company and the bank with a “massive potential market".

The broker did not make any immediate changes to its forecasts, assuming further international expansion, leaving the projection for full year 2010 revenue at US$68.7 compared to US$47.1 million for 2009, saying that the deal provided support for these estimates along with new additional clients coming on stream at the end of the previous year.

The target price for the stock was left unchanged at 151 pence with DS&C retaining its “buy” stance despite last year’s strong performance, which saw a 175% increase since the broker initiated coverage of Planet Payment, rising from 40 pence.

Shares in the company last traded at 105 pence.

Disclosure: The author holds no positions in the company