Paypoint plc Annual Financial Report
23 Junio 2020 - 3:01AM
UK Regulatory
TIDMPAY
PayPoint plc (the "Company")
Annual Report and Financial Statements 2020
In compliance with Listing Rule 9.6.1, the Company announces that the
following documents have today been submitted to the UK Listing
Authority, and will shortly be available for inspection via the National
Storage Mechanism at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism:
-- Annual Report and Financial Statements 2020; and
-- Notice of Annual General Meeting of the Company, which will be held at
The Boulevard, 1 Shire Park, Welwyn Garden City, AL7 1EL at 12:00 noon on
Friday 24 July
In accordance with DTR 6.3.5(3) the Annual Report and Financial
Statements 2020 and the Notice of Annual General Meeting are accessible
at
https://www.globenewswire.com/Tracker?data=J-GX2r2N9zPpzHPEbr3gOfFXC18K5IXDJovu6V5x_dHgqdAVDBuFXPkLBMjzLO_lzRb9xj16BGxdJOL3NHmgHz35sbWHg02zuoVoaV0vLe98vJHCozG2xglOuXrjF9YS
www.corporate.paypoint.com.
A condensed set of PayPoint plc's financial statements and information
on important events that have occurred during the year and their impact
on the financial statements were included in the Company's preliminary
results announcement on 28 May 2020. That information together with the
information set out below which is extracted from the Annual Report and
Financial Statements constitute the requirements of DTR 6.3.5 which is
to be communicated via an RIS in unedited full text. This announcement
is not a substitute for reading the full Annual Report and Financial
Statements. To view the preliminary results announcement, visit the
Company website www.corporate.paypoint.com
For further information, please contact:
Sarah Carne
Company Secretary
PayPoint plc
LEI: 5493004YKWI8U0GDD138
Tel: +44 (0)1707 600300
Additional Information
Principal risks and uncertainties
Below are details of our principal risks, their movement during the year,
and key mitigating controls. They do not comprise all risks faced by the
Group and are not set out in order of priority.
Risk area Potential impact Mitigation strategies Change
------------------- ----------------------------------- ---------------------------------------- ----------
Credit and PayPoint processes large PayPoint has effective credit ->
operational volumes of payments creating and operational procedures and
risk significant credit risks controls in place. Retailers
and risk of fraud and error. and counterparties are subject
Significant credit exposures to ongoing credit assessments,
exist with large retailers and effective debt management
and other counterparties, processes are implemented. Settlement
and failure of a large processes and controls are continually
retailer or counterparty assessed and enhanced, and new
may result in significant systems and technology implemented.
financial loss. Effective Effective governance is in place
operational controls are with segregation of duties and
essential to settle funds approval processes enforced to
securely and timely, and protect against fraud and error.
inadequate or failed controls
may result in fraud, liquidity
risk, contractual breaches
or other financial loss.
People and Failure to attract and The Executive Board define and ->
culture develop key talent and advocate PayPoint's values, and
continue evolving our culture employee development and culture
may impact service levels are key strategic priorities.
and delivery of strategic Talent management and people
initiatives. If we do not development are well established,
develop our employees and and employment guidelines and
maintain an appropriate ethical principles are implemented
culture our business performance to assist maintaining a strong
and reputation may be damaged culture. Values and ethical principles
resulting in reduced revenue are aligned with employee objectives
and growth. and employee and retailer engagement
surveys are regularly conducted
to assess how we deliver on our
values. PayPoint is protecting
its employees through the Covid-19
pandemic by allowing employees
to work from home and offering
additional support and flexibility.
Losing key PayPoint has diversified PayPoint builds strategic relationships ->
clients and portfolios of clients and with key clients and retailers
retailers retailers however some and continually seeks to improve
are more strategically its service levels; including
important. Our business conducting retailer engagement
relies on an appropriate surveys to monitor and enhance
mix of clients and retailers our performance. Key clients
and losing a key client and retailers are on long term
or retailer, such as losing contracts, and new clients and
British Gas as an energy retailers are routinely onboarded
client in 2019, has the maintaining and diversifying
ability to adversely impact portfolios. New products and
the business model and channels are also developed to
reduce revenue. diversify revenue streams and
mitigate the impact of losing
key clients or retailers in particular
markets.
Competition The markets in which PayPoint PayPoint closely monitors consumer
and markets operates, and the competition and technological trends and
in those markets continue engages with clients and retailers
to evolve. The decline to continually improve service
in cash usage, and changes levels. The Executive Board regularly
in consumer trends and reviews markets, trading opportunities,
Government policy may impact pricing and competitor activity,
our core markets, and failure and the Board oversee and challenge
to implement effective strategic direction. PayPoint
strategies in response invests in new products, services
to changes will negatively and technology and adapts to
impact revenue. Industry consumer trends such as growing
consolidation in the UK its parcel and online payments
has increased the competitive businesses to capitalise on market
environment, and our market changes.
proposition and service
levels need to remain strong
to maximise business performance.
Innovation Failure to innovate and PayPoint is committed to innovation ->
and implementation implement new products, and investing in new technology
services and technology and products to support its continued
would impede business performance growth. Products and services
and our ability to achieve are continually reviewed and developed
strategic goals. Our business to enhance our proposition and
relies on continued product service levels, consistent with
enhancements and failing customer needs and expectations.
to improve products due Various improvement programmes
to poor design, build or are underway and effective change
rollout would ultimately management processes are deployed
reduce revenue. Continued by dedicated project teams. The
system infrastructure improvements Executive Board oversees all major
are essential in maintaining projects to ensure governance
resilient and effective and implementation are effective.
services, and ineffective
infrastructure upgrades
may impact future performance.
Key partners PayPoint has a diverse PayPoint has effective partner
and suppliers range of suppliers and and supplier selection processes
partners, however some and long-term contacts are implemented
suppliers and partners for strategic partners and suppliers.
are more strategically We aim to develop strong relationships
important and not so easily with key partners and suppliers,
substituted. If supply and single points of failure are
of goods or services is avoided where practicable, with
disrupted or relationships alternative suppliers and partners
cease before alternative contracted and continuity plans
arrangements can be implemented, implemented. Impact assessments
PayPoint may experience are conducted for critical dependencies
difficulty maintaining and mitigation measures implemented.
service levels potentially
resulting in revenue loss,
reputational damage or
penalties. Uncertainties
around the Covid-19 pandemic
may significantly impact
PayPoint's partners and
suppliers, increasing the
trend of risk.
Business Service delivery interruption Comprehensive continuity plans
interruption caused by system failure, have been implemented to mitigate
loss of premises, or other risk of disruption from Covid-19.
disruption may impede performance Systems are continually upgraded
and harm our reputation. and resilience built into systems
Clients, retailers and and processes. Effective change
consumers rely on resilient management processes are deployed
systems and continued service minimising risk of disruption,
delivery, and failure to and systems are regularly tested
promptly recover services and continually monitored for
may result in revenue loss, outages. PayPoint has a Major
contractual breaches, penalties Incident Response Plan and business
and increased costs. Uncertainties continuity and disaster recovery
around the Covid-19 pandemic plans are implemented and regularly
and the significantly changes tested. Third party data centres
in working practices may are used with failover capabilities,
impact PayPoint's service and business continuity premises
delivery, increasing the and work from home arrangements
trend of risk. are implemented.
Legal and PayPoint is required to PayPoint's Legal team work closely ->
regulatory comply with numerous legal with management to advise on regulatory
and regulatory requirements, matters and adopt strategies to
and breaches of these obligations ensure regulatory adherence. Legal
may result in costly corrective teams are engaged on key contracts
actions, reputational damage and legal matters, and Compliance
and prosecution. Regulatory teams oversee compliance programmes,
landscapes continue to monitoring and reporting. Emerging
evolve, and changes in regulations are incorporated into
regulations and license strategic planning, and we engage
requirements may adversely with regulators to ensure we have
impact our business. PayPoint appropriate frameworks to support
is subject to numerous new products and markets. External
contractual requirements counsel is engaged where required.
and failure to meet obligations
may result in penalties
and financial loss.
Cybersecurity Cyberattacks on PayPoint's PayPoint has a robust IT security
and data systems and networks may framework and deploys industry
protection significantly impact service standard security systems with
delivery and data protection cyber intelligence capabilities.
causing harm to PayPoint, Systems are constantly monitored
our clients, retailer partners for attacks with teams in place
and other stakeholders. to respond to incidents, and cybersecurity
Although PayPoint continues response plans are regularly tested.
to upgrade and enhance Home working tools, security alert
its cybersecurity capabilities, process and employee cyber awareness
attacks are a constant were enhanced in response to specific
threat, with increased Covid-19 threats. We engage with
ransomware attacks on businesses law enforcement and partners on
over the last 12 months. cybercrime, and proactively manage
Covid-19 has heightened compliance with data privacy requirements.
cyber risk with significant Additionally, PayPoint's Audit
reliance on home working Committee has a Cyber Security
tools and criminals exploiting and IT sub-committee which oversees
vulnerabilities. Failure cybersecurity capability.
to comply with service
delivery, contractual requirements
or data privacy requirements
may result in significant
fines and reputational
damage.
Covid-19
The global Covid-19 pandemic continues to significantly impact
individuals, businesses, markets and economies, and the unprecedented
period of uncertainty presents significant risk to PayPoint across all
business areas. Whilst the majority of PayPoint retailer partners have
remained open during the pandemic to provide vital services to
communities, transaction volumes for some products have been impacted
and may continue to be impacted. Although PayPoint has taken affirmative
action to mitigate numerous risks arising from the pandemic, there
remains a high degree of uncertainty over future events and the
consequences for PayPoint. The table below details the strategic,
financial, operational and cybersecurity risks resulting from Covid-19
and the strategies to mitigate risk.
Potential impact Mitigation strategies
------------------------------------------ -------------------------------------------
Strategic risk PayPoint continually diversifies
Cash usage has significantly declined its product range to reflect market
during the Covid-19 lockdown reducing changes and our card payment revenue
PayPoint's revenue for ATMs and other significantly increased during the
cash-based products. It is anticipated Covid-19
Covid-19 will accelerate a structural lockdown. Our online MultiPay platform
decline in cash usage which will continues to grow in significance,
impact our business model and revenue. with the recent introduction of innovative
Covid-19 may also result in other new features including PayByLink.
market changes which could potentially The acquisition in April 2020 of
impact PayPoint. the 50% of shares in Collect+ PayPoint
did not previously own has significantly
strengthened our parcels proposition
in order to take advantage of the
growth in online sales.
------------------------------------------
Financial risk To maintain liquidity through a sustained
During the Covid-19 lockdown PayPoint period of disruption, the GBP70 million
has experienced reduced revenues revolving credit facility was fully
which is expected to continue until drawn down and additional dividend
an effective Covid-19 vaccine is payments and employee bonuses cancelled.
available. Reduced revenue heightens Government Covid-19 support schemes
PayPoint's liquidity risk, and the are closely monitored, and a review
deterioration in economic conditions of short-term cost reduction and
also heightens credit risk. deferment measures is being conducted
across the business. There is also
increased focus on settlement process
to ensure
heightened credit risk is appropriately
mitigated.
------------------------------------------
Operational risk IT and operational processes have
Covid-19 has heightened the risk been enhanced to ensure effective
of supplier failure, potentially service delivery and robust control.
impacting PayPoint's service delivery. PayPoint is working closely with
The sales pipeline and new initiatives suppliers to ensure continued service
have also been impacted with prospects delivery with contingencies being
delaying new ventures and other sales assessed for areas at risk. Most
initiatives also temporarily postponed. employees are working from home and
Additionally, increased working from safety measures have been implemented
home has impacted the robustness to ensure the safety of employees
of settlement processes and employee working in the office.
welfare remains a heightened risk.
------------------------------------------
Cybersecurity risk PayPoint has effective cybersecurity
Covid-19 has increased cyber threats controls and has increased focus
from cybercriminals and other malicious on addressing security alerts as
groups who are targeting individuals, soon as they arise. Security education
businesses and organisations by deploying has been increased with more frequent
Covid-19 related scams and phishing emails sent to employees highlighting
emails. Significant working from increased security dangers. The IT
home has also heightened cybersecurity change portfolio has also been reviewed
risks. with higher risk projects temporarily
postponed.
------------------------------------------
Directors' Responsibility Statement
The 2020 Annual Report contains the following statements regarding
responsibility for the financial statements in compliance with DTR
4.1.12. Responsibility is for the full Annual Report and Financial
Statements 2020 and not the condensed statements required to be set out
in the Annual Financial Report announcement.
The directors are responsible for the maintenance and integrity of the
Company's website. Legislation in the UK governing the preparation and
dissemination of financial statements may differ from legislation in
other jurisdictions. Each of the directors, whose names and functions
are listed on pages 46 and 47 of the Annual Report, confirm that, to the
best of their knowledge:
-- The Group financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view of the
assets, liabilities, financial position and profit or loss of the Company
and the undertakings included in the consolidation taken as a whole.
-- The Management Report includes a fair review of the development and
performance of the business and the position of the Company and the
undertakings included in the consolidation taken as a whole, together
with a description of the principal risks and uncertainties that they
face.
-- The Annual Report, taken as a whole, is fair, balanced and understandable,
and provides the necessary information for shareholders to assess the
Group's performance, business model and strategy.
END
(END) Dow Jones Newswires
June 23, 2020 04:01 ET (08:01 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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