PayPoint enjoys merry Christmas as retail focus continues
Payment network operator PayPoint posted a quarterly update for the three months to 31 December on Thursday, reporting that its core retail network transactions increased marginally to 175.6 million transactions over the period, with net revenue growing 6.7% to £33.3m.
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The FTSE 250 company contrasted that with an overall transaction decline to 185.9 million from 225.4 million a year earlier, and net revenue up 0.2% at £35m, which it said was caused by the sale of the online payments division on 8 January 2016 and mobile payments on 23 December.
Transaction volume from retail services was up 11.8%, with strong growth from parcels - up 20.1% - and card payments, which rose 11.9%.
Bill and general transactions increased 1.3%, excluding a reduction in cash-out transactions, resulting from a two-year government electricity rebate scheme, which benefitted prior periods.
In the UK and Ireland, retail services transactions continued to grow, rising 11.7%.
That was helped by parcel volumes, which increased to over 7.2 million transactions, and card payment transactions, which increased to 22.7 million transactions in the period.
The Collect+ parcel network expanded since the half year end by 140 to 6,100 sites.
Despite the smart meter rollout delays and lower energy consumption, bill and general transactions were only 0.4% down - excluding the impact of the government electricity rebate scheme - including this, transactions were 3.6% down.
PayPoint said top-up transactions fell by 13.8% as the prepaid mobile sector continued to contract.
Prepaid mobile top-ups were now only 7% of total UK and Ireland transactions.
Retail sites in the region as at period end numbered 29,178, up by 205 since the half year end.
In Romania, 17.2 million bill payments were processed in the period, up 12.6% on the prior year.
Top-ups increased by 13.5%, the board reported, and retail services by over 28.7%.
PayPoint’s terminal estate increased since the half year end by 393 to 11,055 sites and continued to add new clients in Romania.
The group said it had net cash of £92.5m at period end, up from £49.6m at the end of September. after the payment of the interim dividend of £10.2m and the additional dividend of £8.3m in the period.
PayPoint’s cash balance included the proceeds from the sale of its mobile division of £26.5m, which it subsequently paid out as a dividend to shareholders on 11 January.
Cash collected on behalf of clients over the Christmas period was settled from 3 January 2017 and as a consequence, the balance held in respect of short term client settlement obligations was £38.0m, up from £15.4m at the end of September, which was included in cash balances.
“I am pleased that we have successfully concluded the sale of the mobile payments business and the new arrangement for our parcel service, Collect+,” said chief executive Dominic Taylor.
“Following completion of the restructuring, our focus is now wholly on the development of our retail business, including the rollout of our new terminal PayPoint One and the development of advanced EPoS incorporating stock management and ordering, which we expect to launch in the first quarter of next year.
“We are also continuing with initiatives to improve service and process efficiencies, [and] we continue to grow profitably in Romania.”
Taylor said trading for the quarter was in line with board expectations, with continued growth in retail services, and PayPoint One and EPoS continuing to be well received.