Continued growth in Wright Express Corp.’s fleet and payroll card businesses and in its operations in North America and Australia helped fuel double-digit fourth-quarter growth for the fleet card company.
The company’s payroll card program that began when Wright Express bought Tampa Bay, Fla.-based rapid! PayCard last spring “met expectations between sales and cross-selling,” Michael Dubyak, president and CEO, said in an interview. Wright Express will more than double the sales organization for that business this year, he said.
Wright Express acquired rapid! PayCard in April (see story).
“We still see great success from the cross-selling efforts by our sales team, and we see promise in the payroll space, both organically and inorganically,” Dubyak said on the call.
The South Portland, Maine-based company also is looking to bring its virtual MasterCard business to regions outside the U.S., where Priceline, Orbitz and Expedia use it to process hotel and other card-not-present travel purchases because of the added security it provides, Dubyak said. Year-over-year spend on the charge card grew by 60% during the quarter, but the growth should taper off to 20% to 30% this year, he said.
“We also expect international expansion of the product to have the potential to layer on additional growth in the future,” Dubyak told analysts during a Feb. 8 conference call to discuss the company’s earnings. “With respect to our corporate charge card, we recently signed our first foreign customer for the single-use electronic product in Europe.”
The new customer is an online travel vertical, he said, “and we view this as an important step as it transports our intellectual capabilities outside the US. This win is in an area where we have tremendous amount of expertise and proven success with our U.S. travel partners, which are key selling points in this region.”
In Australia, more than 90% of the country’s fuel stops truck stops and gas stations now accept the company’s fleet card, Dubyak said.
Wright Express in September 2010 completed the acquisition of Australian prepaid and fleet card operator Retail Decisions Ltd., when the company announced it was interested in diversifying its revenue sources (see story).
Looking ahead this year, Dubyak said Wright Express will look to expand its over-the-road product for heavy trucks that enables fleet owners to limit driver spending based on their specific needs, Dubyak said.
“It still uses a card,” he said. “But with the card the driver might be able to get a cash reimbursement, an authorization to do a truck wash, overnight lodging and meals–a lot more driver benefits than just fueling the vehicle.”
Total revenues for the three months ended Dec. 31 were $139.8 million, up 21.7% from $114.9 million. Net income was up 77.3%, to $32.8 million from $18.5 million.
Fleet payment solutions total revenue was $107.5 million, up 14.5% from $93.9 million. Within that division, fleet payment-processing revenue totaled $71.3 million, up 18.1% from $60.4 million. Transaction-processing revenue where Wright Express does not own the receivables totaled $4.1 million, up 2.5% from $4 million.
The company’s Other Payment Solutions operations, which includes Wright Express’ new payroll card, generated revenue of $32.4 million, up 54.3% from $21 million. Payment-processing revenue was $20.2 million, up 64.2% from $12.3 million. Transaction-processing revenue stayed steady at $2.9 million year over year.
Domestic retail fuel prices dropped 4.6%, to an average of $3.53 per gallon from $3.70 a year earlier. The average fuel price in Australia was US$5.45, down slightly from US5.50.
In midafternoon trading Feb. 8, shares of Wright Express stock on the New York Stock Exchange were selling for $61.12, up 3.3% from the previous day’s $59.17 closing price.
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