Two strategic acquisitions at the end of 2011, one in the United Kingdom and the other in Mexico, helped fleet card provider Fleetcor Technologies Inc. on June 9 to report double-digit increases in first quarter revenue and income. Transaction volume also rose 54% year over year, the company said.
Fleetcor in December acquired AllStar Business Solutions Ltd. from UK-based leasing company The Arval Group for $304 million (see story). Fleetcor did not reveal the name of the Mexico prepaid fuel and food card company it also acquired but said it serves more than 10,000 businesses with more than 800,000 cardholders and beneficiaries (see story).
“We are very pleased so far with how this business has performed,” Eric Dey, Fleetcor chief financial officer, told analysts during a May 9 conference call to discuss the quarter’s earnings, referring to the Mexican business the company bought last fall. “The performance of the business is in line with our expectations and is shaping up to be another good addition to the FleetCor family."
Similarly, the AllStar business in the UK acquired in December is off also to a good start and is in line with the company's expectations, he said.
In March, Fleetcor acquired the Mexican assets of NovoPayment Inc.'s subsidiaries Tebca and Servitebca (see story).
Fleetcor also recently announced an agreement to acquire CTF Technologies, the leading fuel payment platform provider in Brazil.
“We expect the pending acquisition of CTF Technologies to be accretive to both revenue and profit in 2012 and expect the acquisition to add 4 cents to 5 cents in adjusted net income per diluted share, including deal and restructuring costs and assuming a close date of June 30,” Dey said in the company’s earnings release.
Company net revenues for the quarter totaled $146.2 million, up 31.7% from $111 million during the same period ended Dec. 31 the previous year. Net income was up 32.2%, to $42.7 million from $32.3 million.
Regionally, North American customers used the company’s cards to initiate 36.7 million transactions. At $2.26 per transaction, net revenues in the region totaled $82.8 million. That compares with $71.6 million earned from 36.2 million transactions that earned an average of $1.98 each a year earlier, Norcross Ga.-based Fleetcor noted in its earnings release.
“In our North American segment, all of our lines of business performed well and were up versus prior year,” Dey said during the call. “Of particular note, our MasterCard product again continued to perform well during the quarter.”
Revenue generated from the MasterCard product increased 37% year-over-year, “which helped drive the almost 16% increase in our combined North America fuel card business during the quarter,” Dey said.
The company’s international segment earned $63.4 million on 35.8 million transactions that generated $1.77 each, which compared with $39.4 million earned from 10.8 million transactions earning $3.65 each in the previous year’s third quarter, Fleetcor said.
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