PAY Paypoint Plc

 
TIDMPAY 
 
   PayPoint plc 
 
   Trading update for the three months ended 31 December 2019(1) 
 
   23 January 2020 
 
   Highlights: 
 
 
   -- Underlying2 group net revenue increased by GBP1.3 million (4.2%) to 
      GBP32.7 million (GBP31.4 million). 
 
   -- Service fee grew strongly by 32.8% to GBP3.5 million (GBP2.6 million) 
      driven by the roll out of PayPoint One to 16,223 sites at 31 December 
      2019 (15,088 at 30 September 2019) and a 3.3% improvement in the average 
      weekly service fee3. 
 
   -- UK parcel volumes increased by 12.6% to 7.6 million, reflecting a solid 
      performance over the peak period and the benefit of new parcel 
      partnerships. 
 
   -- UK bill payments net revenue increased by 2.2%, driven by strong growth 
      in MultiPay and improvement in net revenue per transaction offsetting a 
      1.1% decline in transactions. 
 
   -- Romania net revenue increased by 0.4%, increasing by 4.7% after adjusting 
      for a one-off payment of marketing support received in the prior year, 
      due to increased transactions and price increases. Good control of costs 
      also drove improved margins. 
 
 
   Nick Wiles, PayPoint's Executive Chairman, commented: 
 
   "Overall our results for the quarter reflect resilience in our bill 
payments business, growth in our parcels activities during the important 
peak parcels period and continued progress in the rollout of PayPoint 
One and our retail services activities. Romania has performed well with 
a steady increase in transactions and good control of costs." 
 
   Current trading and outlook 
 
   The warmer weather over the period of the festive season and the first 
three weeks of January continues to affect energy transactions within UK 
bill payments and parcel volume growth remains towards the lower end of 
our expectations as the four new parcel partners become established 
within our network. Retail services, excluding parcels, are performing 
in line with our expectations and are expected to carry on growing well. 
Actions to deliver cost efficiencies and enhance customer service 
delivery are effective and ongoing. 
 
   Overall, the board remains confident that there will be a progression in 
profit before tax and exceptional items for the year ending 31 March 
2020, albeit it is now likely to be at a more modest rate than 
previously expected. 
 
   Performance for the third quarter ending 31 December 2019 
 
   Underlying(2) group net revenue increased by GBP1.3 million from GBP31.4 
million to GBP32.7 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 9.5%4 driven by the continued 
             strong performance of the PayPoint One rollout and the increased 
             parcel volumes delivered from our new parcel partners, which have 
             been successfully integrated into the network. We remain on track 
             to reach our upgraded year-end target of 16,500 PayPoint One sites 
             with 16,223 sites installed at 31 December 2019, an increase of 
             3,342 since the start of the financial year. 
 
          -- Service fee net revenue increased by 32.8% to GBP3.5 million and 
             PayPoint One's average weekly service fee per site increased by 
             GBP0.49, 3.3%, to GBP15.38 (GBP14.89)3. EPoS Pro terminals grew by 
             209 to 854 from 645 at 31 March 2019. 
 
          -- Card payment transactions grew by 17.9% to 34.0 million, card 
             payment rebate revenue increased by 5.0% as lower average 
             transaction values partially offset the volume growth. Our card 
             payments service was in 9,820 sites at 31 December 2019, broadly 
             unchanged from 30 September 2019. 
 
 
 
 
 
 
 
 
   -- ATM net revenue decreased by 1.3% to GBP3.0 million due to a 2.3% 
      reduction in transactions to 10.3 million. The LINK interchange reduction 
      of 5% was offset by enhanced premiums and the revenue benefit being 
      realised from the rollout to the leisure centres of a significant new 
      client. 
 
   -- Our retail network reduced to 27,832 (30 September 2019: 28,366) sites in 
      the UK as expected and as a result of our legacy terminal sunset program. 
 
 
 
   -- Become the definitive parcel point solution 
 
          -- Parcel volumes grew by 12.6%, reflecting the increased volumes 
             from our new partners Amazon, DHL, ebay, FedEx. In December parcel 
             volumes increased by 15%. Although this performance was towards 
             the lower end of our expectations it compared very well to the 
             overall market growth of 2.6% in on-line sales over the festive 
             period5. 
 
          -- Operationally the parcels business delivered a robust performance 
             during the peak parcel period, with service levels maintained as 
             we embedded the four new parcel partners into our parcels network 
             and successfully managed the higher level of parcel volumes. 
 
   -- Sustain leadership in 'pay-as-you go' and grow digital bill payments 
 
 
 
   UK 
 
 
   -- Bill payment net revenue increased by 2.2% driven by an increase in net 
      revenue per transaction, which more than offset a 1.1% decline in 
      transactions. 
 
   -- MultiPay continued to grow strongly with transactions up by 17.6% to 9.4 
      million and net revenue increasing by 28.6%. 
 
   -- eMoney transactions increased by 18.8% driven by continued growth from 
      existing clients which led to a 24.8% increase in eMoney net revenue. 
      Overall, UK top-up and eMoney transactions reduced by 11.4% due to the 
      further declines in the prepaid mobile sector which resulted in a 3.0% 
      decrease in net revenue. 
 
   -- Eight new clients were contracted in the period and six clients renewed 
      contracts including an exclusive agreement with Monzo. 
 
 
   Romania 
 
 
   -- Transactions increased by 3.6% from the same period last year to reach 
      29.2 million. Overall sites increased to 19,526 at 31 December 2019 from 
      18,466 at 31 March 2019 and card payment sites increased to 1,452 sites 
      at 31 December 2019 from 1,300 for the same period. 
 
   -- Net revenue increased by 0.4%, increasing by 4.7% after adjusting for a 
      one-off payment of marketing support received in the prior year. This 
      revenue growth was achieved through the growth in transactions and price 
      increases. Good control of costs also drove improved margins. 
 
   -- Six new clients were contracted in the period. 
 
 
   Balance sheet as at 31 December 2019 
 
   The Group had net cash of GBP29.8 million (31 March 2019: GBP37.5 
million) including the balance held in respect of short term client 
settlement obligations of GBP43.1 million (31 March 2019: GBP34.0 
million). 
 
   Dividends 
 
   The group has previously declared an interim dividend of 23.6 pence per 
share and an additional interim dividend of 18.4 pence per share. The 
first instalments of the interim ordinary dividend of 11.8p per share 
and the additional dividend of 9.2p per share were paid on 30 December 
2019.The second instalments of the same amounts will be paid on 9 March 
2020. 
 
   Enquiries 
 
   PayPoint plc                                                                                        Finsbury (Tel: 0207 251 3801) 
 
 
   Nick Wiles, Executive Chairman (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 16,000 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 almost 28,000 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 c500 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) Underlying net revenue excludes the GBP0.2 million impact from the 
Yodel renegotiation. 
 
   (3) Average weekly service fee increased to GBP15.38 compared to 
GBP14.89 at 31 December 2018. 
 
   (4) Includes underlying parcel net revenue growth of 25.3%. 
 
   (5) https://brc.org.uk/news/2019/worst-year-on-record-for-retail/. 
Online sales increased 2.6% over the combined period months of November 
and December compared to the same period in the prior year. 
 
   Attachment 
 
 
   -- Trading update Q3 2019 
      https://ml-eu.globenewswire.com/Resource/Download/183ae4b5-ab44-4f61-b298-8a583077137a 
 
 
 
 
 
 
 

(END) Dow Jones Newswires

January 23, 2020 02:00 ET (07:00 GMT)

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