Paypoint Share Discussion Threads

[simon gordon] 02/6/2005 18:59

Some interesting facts:

Employs 183 people in UK and 4 in Ireland.

2004 - 204m transactions valued at £2.2B.

Average = £10 a transaction.

Waiting list of 10,000 prospective retail agents.

New terminal - expected life of 5 years.

Post Office is the market leader.

Smart card public transport top-up offers growth potential.

Government pushing bank accounts to low paid - direct debits.

In a recession money migrates to cash economy.

Predictable revenues.

High operational gearing.

Highly cash generative.

Post office closure programme.

High barriers to entry.

e-Pay is competition with deep pockets.

[simon gordon] 02/6/2005 18:26

Here is a comparision of PAY against two Support Services stocks I have been following:

SPICE - Ticker: SPI - Share Price £1.77

2006 April
T/O - 94.7m
PBT - 6.9m
EPS - 12
DPS - 2.2
P/E - 14.75
Yield - 1.3%

2007 April
T/O - 104m
PBT - 8.3m
EPS - 14.2
DPS - 2.4
P/E - 12.46
Yield - 1.4%

ERINACEOUS - Ticker: ERG - Share Price £2.70

2005 December
T/O - 135m
PBT - 24.5m
EPS - 17.8
DPS - 5.75
P/E - 15.16
Yield - 2.2%

2006 December
T/O - 150m
PBT - 27.5m
EPS - 19.7
DPS - 6.5
P/E - 13.7
Yield - 2.4%

PAYPOINT - Share Price £2.18

2006 March
T/O - 95.9m
PBT - 14.5m
EPS - 14.9
DPS - 7.2
P/E - 14.6
Yield - 3.3%

2007 March
T/O - 108.4m
PBT - 16.8m
EPS - 16.8
DPS - 7.6
P/E - 12.97
Yield - 3.5%

[omalaha] 02/6/2005 15:11

Well, from that article it appears PAY has always been an attractive acquisition for someone. Whatever the results are, it seems there is an intrinsic value to this stock. I can hardly see any downside-and I have been searching!

[simon gordon] 02/6/2005 13:41

Seemingly First Data looked at PAY:

[simon gordon] 02/6/2005 12:28

From the November article by Peter Temple:

Of the remaining three stocks, two fall into the category of what Warren Buffet might call "toll bridges". These are businesses with an asset or business franchise that is hard to duplicate.

The first of these stocks is Paypoint. This company came to the market in September and runs the network of terminals in shops that offer electronic payment of utility bills, mobile phone top-ups, council tax and the like. Many people prefer paying bills this way and there is scope to increase the installed base of terminals and attract more companies and organisations to offer this type of bill payment.

Either way, the system has extremely attractive margins on incremental business and an installed base that is difficult for any competitor to duplicate in a hurry.

[omalaha] 02/6/2005 11:49

Seems to me there is support for this at 245p, so unless the finals are pants-which I dont think-,it should move back up to this position and then some. I consider this one of the best stocks I hold-mind you I am holding some right dogs!

[simon gordon] 02/6/2005 09:58

Competition:

[simon gordon] 02/6/2005 09:55

AGM is in London at the Cazenove office.

Dividend will be paid end July = around 5p.

I understand the big supermarkets are a potential market to sell some PayPoint services through the EPoS Till, but probably not the whole service for fear of big queues forming.

E-pay have their system installed on the big four - Tesco, etc - EPoS tills and it is used to top-up mobile phones. E-pay is owned by Euronet.

I went to my local Jacksons to see a machine in action and the shop assistant said she planned to pay her council tax with PayPoint.

Interesting fact:

A MORI poll found 97% customer satisfaction with PayPoint, 79% of customers are 'very satisfied', MORI said this is an outstanding achievement.

[simon gordon] 02/6/2005 09:39

O - £3 = £204m.

[happyjoe] 02/6/2005 03:07

Thats what I said :-)

[simon gordon] 01/6/2005 19:49

Happy - do you mean £3.00 a share not £2.00?

[happyjoe] 01/6/2005 19:10

Recently: Although Alphyra has bought about 13 other companies since 1998,Nagle said PostTS “will prove to be our best'‘. The integration of the company's 100 staff into Alphyra's 500 employees has already started, he said, and should “add significantly to the bottom line and cash being generated by the group'‘. “Turnover is north of €3.5 billion against €860 million when we did theMBO,’'Nagle said, highlighting the company's rapid growth. “Cash generation is in the double-digit millions, and a figure that doesn't startwitha 1 or a 2.

"May 2005 - Business Times - In late 2003 Alphyra tried to acquire Paypoint, a bill payments system used by 4m British customers a week, by acquiring stakes held by BT and London Electricity, two of the founding shareholders. Under the articles of association, Alphyra was obliged to make an outright bid for the group. The offer of £80m (€116m) was rejected by other shareholders as too low. Paypoint subsequently floated in September 2004 at a value of £130m."

Paypoint have progressed so much since 2004, I think post results we will see an offer for Paypoint by Alphyra that will be at about £3.00 per share, based on them having the money and wanting it real bad. I think Alphyra regard Paypoint as unfinished business and need it to make their "payzone" network glow - Paypoint have all the best places, payzone can only get into the smaller lower volume places

All IMHO and IHABIISTSGU

[simon gordon] 01/6/2005 18:46

Background info.:

[simon gordon] 01/6/2005 14:30

O - does the chain Tesco bought recently, T&S, offer Paypoint.

Jacksons do and I think Sainsburys bought them.

As to the mobile top-ups this is all the supermarkets are offering - no utility bills, council tax, etc. I believe!

[omalaha] 01/6/2005 14:19

I suppose the supermarkets are tough competition for everyone from PAY to M&S but until Tesco moves in on, or buys, every last small retailer in the country
niche operators like Pay can do well. There are far riskier stocks than this and I dont quite understand the fall back in sp; unless it's a suspected slow down in growth.

[simon gordon] 01/6/2005 11:50

Hi Guys - saw PAY win the FT award but was put off by high price. Now at £2.18 it looks excellent value.

5p dividend in July and a 7/8p dividend in the coming 13 months.

Growth prospects look bright with a 10,000 waiting list, only slight negative is the supermarkets offering mobile top-ups from the till, which is tough competition.

Post offices closing is a good growth driver. In a way PAY are a quasi-utility which is counter cyclical.

P/E
2005 - 14.37 based on 15.2 EPS
2006 - ?

I will be back when I find the 2006 EPS forecasts.

[omalaha] 01/6/2005 08:48

25k buy was mm swap.

[omalaha] 01/6/2005 08:45

I agree, board meeting next week I think. Have not re-entered PAY yet, but watching-25k buy this morning....Hhmmmmm...

[amberspyglass] 31/5/2005 13:59

looking very interesting bought further at 2.20. this must be a takeover target - alphyra desperately wanted it but got pushed back by the current management.

[amberspyglass] 07/5/2005 08:55

managed to sell at 2.50, now can buy back at 2.30. i like this share. thinly traded undervalued share. price will go up and down till next set of results just out of boredom lack of awareness. seasoned holders know the value and wont sell. so price determined by day trader activity at current time, who do good lemming impresonations when one sells they all sell, when one buys they all buy. (almost all)

[hybrasil] 05/5/2005 07:08

any comments on the fall back

[amberspyglass] 29/3/2005 08:50

topped up! - managed to buy at 2.40

[honestjim2] 23/3/2005 11:23

Top-up/double-up time approaching!