TIDMPAY 
 
   PayPoint plc 
 
   Trading update for the three months ended 30 June 2019(1) 
 
   24 July 2019 
 
   GOOD FINANCIAL AND OPERATIONAL PROGRESS 
 
 
   -- Group net revenue increased by GBP1.0 million (3.6%) to GBP28.7 million. 
 
   -- Service fee growth of GBP0.7 million (30.7%) driven by the roll out of 
      PayPoint One to 13,633 sites at 30 June 2019 and a 2.8% improvement in 
      the average weekly service fee. 
 
   -- UK parcel volumes increased by 11.9% to 5.6 million, due to new partner 
      relationships converting to volumes, with three of the four new parcel 
      partners now transacting. 
 
   -- UK bill payments net revenue was up by 7.5%, driven by strong growth in 
      MultiPay and a robust performance in the legacy business. 
 
   -- Romania net revenue increased by 5.0%, due to improved client margins and 
      growth in transactions. 
 
   Patrick Headon, PayPoint's CEO, commented: 
 
   "PayPoint has delivered a good financial and operating performance 
during the quarter, with group revenue increasing 3.6% to GBP28.7 
million. PayPoint One is now operating in over 13,920(2) convenience 
retailers and we remain on track to meet our year-end target of 15,800 
sites. Our parcels business is benefitting from our new partners, which 
were secured last year, with parcel volumes now having returned to 
growth. Bill payments in the UK and Romania delivered a robust 
performance with 12 new clients contracted and we saw continued strong 
growth in our MultiPay platform and eMoney services where transactions 
grew 38.5% and 16.3% respectively. We continue to believe these 
initiatives are key to driving future growth and profits. Consequently, 
the Board remains confident that there will be a progression in profit 
before tax and exceptional items for the year ending 31 March 2020." 
 
   Performance for the first quarter ending 30 June 2019 
 
   Net revenue increased by GBP1.0 million from GBP27.7 million to GBP28.7 
million driven by an increase in service fees, through the ongoing roll 
out of PayPoint One and a robust performance in bill payments in the UK 
and Romania. 
 
   Progress during the period against our strategic priorities is set out 
below: 
 
 
   -- Embed PayPoint at the heart of convenience retail 
 
          -- Retail services net revenue grew by 3.5% driven by the continued 
             strong performance of the PayPoint One rollout. We remain on track 
             to reach our year-end target of 15,800 PayPoint One sites with 
             13,633 sites at 30 June 2019, an increase of 752 since the start 
             of the financial year. 
 
          -- Service fee net revenue increased by 30.7% to GBP3.1 million and 
             PayPoint One's average weekly service fee per site increased by 
             GBP0.40 (2.8%) to GBP15.70. EPoS Pro installations grew to 770 
             from 645, as at the 31 March 2019, as we build resilience in the 
             platform ahead of driving significant penetration of the product. 
 
          -- Card payment transactions grew by 17.6% to 32.2 million, card 
             payment rebate revenue increased 10.1% as lower average 
             transaction values partially offset the volume growth. Our card 
             payments service is in 9,788 sites at 30 June 2019, broadly 
             unchanged from 31 March 2019, and we are planning to extend the 
             card payment net settlement feature to further sites following the 
             success of the initial pilot. 
 
          -- ATM net revenue decreased by 8.4% to GBP3.0 million due to LINK's 
             10% reduction in the interchange fee and a 3.0% reduction in 
             transactions to 10.4 million. We secured a new significant ATM 
             client and will commence in the second quarter with the rollout of 
             159 ATMs to its leisure centres. 
 
          -- Our retail network remains broadly stable with 28,483 (31 March 
             2019: 28,435) sites in the UK. 
 
   -- Become the definitive parcel point solution 
 
          -- Underlying parcel net revenue3 increased by 15.2% and parcel 
             volumes grew by 11.9% due to volumes from new partners. 
 
          -- Three of the four new parcel partners secured last year are now 
             transacting, with the fourth expected to be live by September 
             2019. 
 
          -- The Collect+ network was in 7,100 sites at 30 June 2019. 
 
 
 
 
 
   -- Sustain leadership in 'pay-as-you go' and grow digital bill payments 
 
 
 
   UK 
 
 
   -- Bill payment net revenue increased by 7.5% driven by an increase in 
      transactions of 3.2% to 75.0 million in the quarter. 
 
   -- MultiPay continues to grow strongly with transactions up by 38.5% to 7.4 
      million and net revenue increasing by 36.2%. 
 
   -- As announced on 28 June 2019, PayPoint was unable to agree appropriate 
      renewal terms with British Gas and will cease working with British Gas on 
      31 December 2019. The impact on net revenue and contribution in the 
      financial year to 31 March 2020 is expected to be around GBP1.4 million 
      and in the financial year to 31 March 2021 is expected to be 
      approximately GBP3.5 million. As previously referenced, plans are 
      underway to mitigate this in part. 
 
   -- As expected, UK top-up and eMoney transactions reduced by 12.3% due to 
      the declining prepaid mobile sector which resulted in a 6.3% decrease in 
      net revenue. eMoney transactions increased by 16.3% driven by continued 
      growth from existing clients which led to a 16.8% increase in eMoney net 
      revenue. 
 
   -- Nine new clients were contracted in the period, including Utility 
      Warehouse and Nabuh energy. 
 
 
   Romania 
 
 
   -- Transactions increased by 1.5% from the same period last year to reach 
      28.2 million. Net revenue increased by 5.0%4 driven by successful ongoing 
      work to improve client margins. 
 
   -- Sites increased to 18,610 from 18,466 at 31 March 2019 and card payment 
      sites increased to 1,518 sites at 30 June 2019. 
 
   -- Three new clients were contracted in the period. 
 
 
 
   Organisation and service delivery 
 
 
   -- PayPoint and eBay won "Best Domestic or International Delivery Options" 
      award at MetaPack's Delivery Excellence Awards 2019. 
 
   -- PayPoint One also won the "Best Use of Digital Devices and Software" at 
      the UK Digital Experience Awards 2019. 
 
   -- Development of the Salesforce CRM lead to sales feature has progressed 
      well and remains on track for release in the second half of this 
      financial year. 
 
   Balance sheet as at 30 June 2019 
 
   The Group had net cash of GBP36.1 million (31 March 2019: GBP37.5 
million) including the balance held in respect of short term client 
settlement obligations which totalled GBP31.6 million (31 March 2019: 
GBP34.0 million). 
 
   Dividends 
 
   The final ordinary dividend of 23.6 pence per share will be paid in 
equal instalments of 11.8 pence per share on 29 July 2019 and 30 
September 2019. The additional dividend of 18.4 pence per share will be 
paid in equal instalments of 9.2 pence per share and paid to 
shareholders on the same dates as the ordinary dividend. 
 
   Enquiries 
 
   PayPoint plc                                                                            Finsbury (Tel: 0207 251 3801) 
 
 
   Patrick Headon, CEO (Tel: 01707 600 317) 
Rollo Head 
 
   Rachel Kentleton, Finance Director (Tel: 07843 074 906)            Andy 
Parnis 
 
   ABOUT PAYPOINT 
 
   In thousands of retail locations, at home and on the move, we make life 
more convenient for everyone. 
 
   For retailers, we offer innovative and time-saving technology that 
empowers convenience retailers in the UK and Romania to achieve higher 
footfall and increased spend so they can grow their businesses 
profitably. Our innovative retail services platform, PayPoint One, is 
now live in over 13,900 stores in the UK and offers everything a modern 
convenience store needs, from parcels and contactless card payments to 
EPoS and bill payment services. Our technology helps retailers to serve 
customers quickly, improve business efficiency and stay connected to 
their stores from anywhere. 
 
   We help millions of people to control their household finances, make 
essential payments and access in-store services, like parcel collections 
and drop-offs. Our UK network of 28,400 stores is bigger than all banks, 
supermarkets and Post Offices together, putting us at the heart of 
communities nationwide. 
 
   For clients of all sizes we provide cutting-edge payments technologies 
without the need for capital investment. Our seamlessly integrated 
multichannel payments solution, MultiPay, is a one-stop shop for 
customer payments. PayPoint helps over 500 consumer service providers to 
save time and money while making it easier for their customers to pay -- 
via any channel and on any device. 
 
   (1) PayPoint's auditors have not been requested to review the 
performance. 
 
   (2) As at 22 July 2019. 
 
   3 Underlying net revenue excludes the impact of GBP0.2 million from the 
reduced Yodel parcel fees. 
 
   (4) There was no change in net revenue when reported in constant 
currency. 
 
   Attachment 
 
 
   -- Trading update Q1 2019 20 (Final) (002) 
      https://ml-eu.globenewswire.com/Resource/Download/86ef4434-a688-443b-9d49-e07a02b87d58 
 
 
 
 
 

(END) Dow Jones Newswires

July 24, 2019 02:00 ET (06:00 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
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