PayPoint creates new JV with Yodel
PayPoint partnered with Yodel Delivery to create a new joint-venture to use the online payment company’s package delivery brand, Collect+.
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The new 50:50 joint-venture, Collect+ Brand, was in turn to license the Collect+ brand to each of them and receive royalties for each parcel they introduced.
Yodel would take control of operations and contracts, hence PayPoint would not bear any impact from increases in logistics costs.
FTSE 250 PayPoint would also be free for the first time to use its retail network to sign agreements with other parcel carriers and to open Collect+ to other carriers under the deal.
In exchange, the company planned to reduce its charges over the next two years, with the impact expected to be mitigated by growth from the joint-venture.
It incurred a loss of £2m as a result of its part of the previous joint-venture up to completion, including increased charges from Yodel, which will be booked in the second half of the year, the company said in a statement.
Operations and contracts from the previous joint-venture would be transferred to Yodel for no charge and the transfer would not result in a gain or loss to PayPoint.
The previous joint-venture as at 30 September had assets of £9.0m and it delivered a loss before tax of £400,000 for the year ended 31 March.
PayPoint said that under current accounting rules it was not able to record the positive fair value of its 50% share in the new joint-venture, while Yodel's supply contract included a termination option should there be a change of control in the company.
Dominic Taylor, PayPoint’s chief executive, said: "Both companies remain absolutely focused on growing Collect+ as the premier parcels click and collect returns network. The new arrangements allow us to focus on our service offering and cost optimisation and for the first time, to open Collect+ access to other carriers.
“We also believe that this is good news for consumers as we develop a single network open to all, where eventually consumers can collect and return all their parcels, however carried, at the same convenience store."
Shares in PayPoint were up 2.33% to 931.74p at 0825 GMT.