By: Dylan Sikes - AllPennyStocks.com News

Tuesday, July 2, 2013

Banks and other companies are piling into the prepaid card business as the financial collapse five years ago brought about tighter financial regulations and millions of people simply don’t qualify for traditional credit cards. A paradigm shift has happened with prepaid cards going mainstream and moving away from sort of lurking in the shadows, primarily only used by people with absolutely no alternative but to pay the high fees that used to accompany the cards. Toronto’s SelectCore Ltd. (TSX-Venture:SCG) is building its presence in the prepaid payment solutions industry and has been recognized as a quickly growing company by several leading firms. Canadian accolades have come from Profit100, Branham300 and Payments Exchange while the company has been pegged as part of Deloitte’s Fast500 for fast-growing tech companies in North America.

Awards don’t build shareholder value, though. After a 100-percent climb to start the year peaking at 9 cents in January, shares have trickled to lows of 3 cents in June. Tuesday is seeing wind in the sails of SCG again after news that the Province of Alberta has chosen SelectCore to provide prepaid MasterCard cards for the disbursement of emergency relief funds to citizens displaced by the recent floods.

Last week, Alberta pledged to provide $1 billion for recovery and reconstruction efforts in the province after flooding affected more than 100,000 people. The SelectCore cards are part of the government’s promise. The emergency relief cards will be loaded with $1,250 per adult and $500 per child to help pay for essential day-to-day purchases such as food and lodging.

"We are gratified that our prepaid card solution has been able to assist the Province of Alberta and the affected families," said Keith McKenzie, SelectCore’s president.

Operating revenue slid dramatically in the latest quarter ended March 31 for SelectCore. During the latest quarter, the company generated $8.21 million in operating revenue, compared to $16.43 million in the year prior quarter. Expenses also declined proportionately, keeping net loss per share in check. For the quarter SelectCore posted a net loss of $1.11 million, or $0.0059 per share, versus a net loss of $7,662,539, or $0.006 per share, a year earlier.

Investors should also monitor share count, which increased 51 percent from 123.87 million on March 31, 2012 to 187.38 million one year later.

Perhaps adding to coffers in the future, SelectCore recently partnered with Home Trust, a subsidiary of Home Capital Group Inc. (TSX:HCG) to offer corporations and the public prepaid card and payment solutions.

The company has also shaken-up it management team, in the words of SelectCore chairman Martin Bernholtz, “to accelerate SelectCore's growth strategy and build greater shareholder value.”

There is some work to bring the company to profitability, but shares are on the rise with today’s news, holding gains of 42 percent at 5 cents as the closing bell approaches after rising as high as 6 cents in earlier trading. Proper due diligence is, as always, encouraged.

Copyright © 2013 AllPennyStocks.com. All rights reserved. Republication or redistribution of AllPennyStocks.com's content is expressly prohibited without the prior written consent of AllPennyStocks.com. AllPennyStocks.com shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.