MoneyGram International Inc. remains focused on reinvesting in its core business coming off a second quarter that saw it achieve double-digit growth in funds-transfer revenue, transaction volume and agent locations.
“I have said that our focus needed to be on accelerating top-line growth, and we are achieving our expectations in this area,” Pamela Patsley, MoneyGram chairman and CEO, told analysts during an earnings call July 28. “Yet, to more competitively position us for future growth, we have also been reinvesting in our core business, focused on improving our capital structure and cleaning up legacy issues.”
MoneyGram plans to increase its marketing spend for the remainder of the year, Patsley said. “The total marketing spend increase will impact margins in 2011, but we expect to return to much more normalized marketing increases in future years,” she added.
The company also will invest in its sales force in markets prime for growth, Patsley said. “While we are far from finished, the investments we are making in our business are beginning to take hold and we are heading in the right direction,” she said.
The company’s funds-transfer revenue increased 15.1% during the quarter, to $256.1 million from $222.5 million.
Bill-payment revenue decreased 11.1%, to $27.5 million from $31 million. Despite the decline, MoneyGram during the quarter it struck agreements with more than 200 same-day billers and expects to add a similar number later this year, Patsley said.
Funds-transfer transaction volume rose 15% during the quarter, driven by 18% growth to transfers that stayed within the U.S., according to MoneyGram, which did not provide actual transfer totals.
MoneyGram’s total agent locations increased 20.1%, to 244,000 from 203,000.
The Minneapolis-based funds-transfer provider’s net income rose by 288%, to $26.4 million from $6.8 million during the same period last year. Revenue increased 9% to $310 million from $283.9 million.
MoneyGram highlighted its expansion efforts in countries such as China, Ivory Coast and India.
The company expanded a relationship with the Bank of China and added services in provinces in the country’s northeast section. The bank now has more than 7,000 active MoneyGram locations.
In Ivory Coast, MoneyGram reopened some 350 locations that temporary closed because of political issues within the country. The majority of transaction volume came from France, the company said in a press release.
MoneyGram added some 138 locations at Bharti Wal-Mart and Bharti Retail stores in India.
MoneyGram announced it would start a new initiative with the Sun Card Group in France. The agreement would enable Sun prepaid cardholders to send and receive transfers at some 115 locations in France and the French West Indies.
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