Paypoint plc Paypoint Plc : Annual Report And Notice Of 2018 Agm

 
TIDMPAY 
 
 
   PayPoint plc (the 'Company') 
 
   26 June 2018 
 
   Publication of Annual Report and Notice of 2018 Annual General Meeting 
 
   The Company has today published its Annual Report and Financial 
Statements for the year ended 31 March 2018 ('2018 Annual Report') on 
its website http://corporate.paypoint.com/ 
 
   In accordance with Listing Rule 9.6.1, the 2018 Annual Report and notice 
of Annual General Meeting will shortly be available for public 
inspection on the National Storage Mechanism (NSM) - Morningstar 
(www.morningstar.co.uk/uk/nsm ). 
 
   The Company will hold its 2018 Annual General Meeting on Wednesday, 26 
July 2018 at 12 noon at the offices of Canaccord Genuity, 88 Wood Street, 
London EC2V 7QR. 
 
   In addition, following the release on 24 May 2018 of the Company's 
preliminary results for the year ended 31 March 2018, which are also 
available at http://corporate.paypoint.com/, the Company makes the 
following additional disclosure in compliance with Rule 6.3.5R of the 
Disclosure and Transparency Rules of the UK Financial Conduct Authority. 
Together these constitute the information required to be communicated to 
the media in unedited full text through a Regulatory Information 
Service. This information is not a substitute for reading the full 2018 
Annual Report and Financial Statements. 
 
   Principal risks and uncertainties 
 
   Since publication of the annual report last year, the Executive team has 
completed a thorough review of the key risks that could prevent PayPoint 
meeting its strategic objectives, its risk appetite, the risk management 
framework and the format for managing these risks and reporting to the 
Board. The Group's level of risk remains broadly the same as last year 
however, PayPoint's business, financial condition or operations could be 
materially and adversely affected by the risks summarised in the 
sections below. 
 
 
 
 
Risk area                                                 Potential impact                                                  Mitigation strategies 
Business 
Innovation and market changes                             The Group could fail to adapt to changes in consumer              The Group monitors external technological and consumer 
                                                           behaviour or to commercialise and develop innovation              trends through its monthly strategy committee and 
                                                           that is scalable and meets the requirements of clients            twice yearly Board strategy reviews. The Group is 
                                                           and retailers. The inability to implement new products            committed to continued research and investment in 
                                                           and services effectively may impact PayPoint's ability            technology and products to support its continued growth. 
                                                           to drive growth and profitability.                                Our product portfolio and the progress of new initiatives 
                                                                                                                             are reviewed at the monthly product committee that 
                                                                                                                             contains representatives from commercial, product, 
                                                                                                                             technology, finance and legal. 
Culture                                                   The strategic objectives and values of the Group are              The PayPoint strategic objectives and values are defined 
                                                           focused on retailer and consumer-centric products                 and advocated by the Executive Board. These values 
                                                           and services. If employees are not aligned with these             are linked to strategic, team and individual employee 
                                                           objectives or empowered to realise opportunities,                 objectives and performance appraisals. The Group's 
                                                           deliver performance or mitigate risks this could lead             ethical principles are published on its website and 
                                                           to poor service quality, a loss in revenue, increased             intranet. A whistleblowing policy and procedures are 
                                                           cost or failure by employees to escalate concerns                 published and a third-party service if available for 
                                                           or issues to senior management and the Executive Board.           employees to report wrongdoing. The Retailer Pledge 
                                                                                                                             is published and all employees made aware of its requirements. 
Dependence on key clients and retailers                   The consolidation of major clients or multiple retailers          The Group monitors client and retailer concentration 
                                                           could adversely affect revenue. Insolvency, liquidation,          risk to ensure that no one client or retailer accounts 
                                                           administration or receivership of retailers could                 for a disproportionate share of the Group's net revenue. 
                                                           lead to PayPoint being unable to recover some or all              In addition, the Group continues to acquire new clients 
                                                           of the client monies processed by the retailer. PayPoint          and retailers to reduce reliance on existing sources 
                                                           would be liable to account to those clients where                 of revenue. All major clients are covered by specific 
                                                           PayPoint bears the risk of collections.                           contracts or agreements. Contract end dates and start 
                                                                                                                             of notice periods are scheduled and regularly reviewed 
                                                                                                                             by client management teams. Retail teams maintain 
                                                                                                                             and develop the relationship with retailers. 
Partners & suppliers                                      Reliance on third parties for the provision of key                The Group selects and negotiates agreements with strategic 
                                                           parts of the PayPoint services (e.g. Payment Service              suppliers and agents based on criteria such as delivery 
                                                           Providers) could lead to extended outages if the supplier         assurance and reliability. Single points of failure 
                                                           fails to meet required SLAs or goes into administration.          are avoided, where practicable and economically feasible. 
                                                                                                                             Specifically, for our MultiPay product we are adding 
                                                                                                                             a second payment service provider which will enhance 
                                                                                                                             the resilience of the service. Controls are regularly 
                                                                                                                             reviewed and improved to minimise risk of retailer 
                                                                                                                             churn caused by financial loss to retailers through 
                                                                                                                             fraudulent third-party activity. Suppliers are selected 
                                                                                                                             on merit following tendering, procurement and due 
                                                                                                                             diligence processes. 
Interruptions in processes and systems                    The Group's ability to provide reliable services largely          Resilience is built into systems and contingency plans 
                                                           depends on the efficient and uninterrupted operation              are in place should systems fail. These plans are 
                                                           of our computer network systems, financial settlement             exercised regularly. Programmes are in place to remove 
                                                           systems, data and call centres, as well as maintaining            technical debt and to automate manual processes. Payment 
                                                           sufficient staffing levels. System or network interruptions,      files are automatically imported into settlement systems. 

                                                           recovery from fraud or security incidents or the unavailability   All payments are checked / authorised by nominated 
                                                           of key staff or management resulting from a pandemic              signatories. There is segregation of duties maintained 
                                                           outbreak could delay and disrupt our ability to develop,          between settlement & corporate accounts. Invoices 
                                                           deliver or maintain our products and services, causing            are recorded and approved by authorised managers. 
                                                           harm to our business and reputation and resulting                 Daily reconciliation of client settlement accounts 
                                                           in loss of customers or revenue.                                  and weekly reconciliation of PayPoint corporate accounts 
                                                                                                                             is carried out. Audited controls for supplier and 
                                                                                                                             client account set-up are in place. 
Financial 
Liquidity & funding                                       Capital might be required to finance investment, fixed            The Finance and Treasury policy sets borrowing limits 
                                                           assets, working capital, acquisitions or losses. If               with headroom allowed. A five-year revolving credit 
                                                           PayPoint does not perform to expectation or finance               facility is in place. Cash resources are available 
                                                           is not available from the market it may be necessary              but will be depleted by additional annual dividends 
                                                           to reduce the scope of the Group's operations or anticipated      of GBP25 million for five years. The ability to raise 
                                                           expansion.                                                        new funding is available via the stock market. Investor 
                                                                                                                             relations programme communicates company strategy, 
                                                                                                                             opportunities and results to the market and investors. 
                                                                                                                             Monthly business reviews and quarterly forecasts highlight 
                                                                                                                             any change in cash requirements. Cash flow reporting 
                                                                                                                             has been improved. 
Operational 
Legislation or regulatory reforms and risk of             PayPoint is required to comply with relevant legal                The Group's legal department works closely with senior 
non-compliance                                             and regulatory requirements. Any breach of these obligations      managers to adopt strategies to educate legislature, 
                                                           could lead to costly and damaging legal or corrective             regulators, consumer and privacy advocates and other 
                                                           actions to return to compliance e.g. Health & Safety              stakeholders to support the public policy debate, 
                                                           at Work Act, Data Protection Act / GDPR, Stock Market             where appropriate, to ensure regulation does not have 
                                                           listing rules, Financial Conduct Authority requirements,          unintended consequences over the Group's services. 
                                                           anti-money laundering legislation, employment law                 A central compliance department co-ordinates all compliance 
                                                           etc. It could also lead to the prosecution of individual          monitoring and reporting. Subsidiary managing and 
                                                           company officers or employees.                                    finance directors are required to sign annual compliance 
                                                                                                                             statements. A plan is in place to ensure that the 
                                                                                                                             Group is compliant with the requirements of the General 
                                                                                                                             Data Protection Regulations prior to the 25 May 2018 
                                                                                                                             deadline. 
Cyber security, data protection, resilience and business  System or network interruptions, recovery from fraud              Service delivery is constantly monitored with technical 
 continuity                                                or cyber security incidents or poorly implemented                 support teams in place to address service outages 
                                                           change could delay and disrupt our ability to develop,            or errors. Contact Centre, Service Management and 
                                                           deliver or maintain our products and services, causing            Technical Services Helpdesk are in place to assist 
                                                           harm to our business and reputation and resulting                 with and resolve issues. Client Management and Retail 
                                                           in loss of customers or revenue. PayPoint's ability               Management teams are in place to interface with clients 
                                                           to provide reliable and secure services largely depends           and retailers. Resilient systems are in place across 
                                                           on the availability and uninterrupted operation of                the Group. Disaster recovery and business continuity 
                                                           its network of retailer terminals, computer systems,              plans are maintained and exercised regularly to ensure 
                                                           financial settlement and key business processes.                  contingencies are in place in the case of failure. 
Attracting and retaining key talent                       Future success is substantially dependent on the continued        Effective recruitment programmes are on-going across 
                                                           services and performance of executive directors, senior           all business areas, as well as personal and career 
                                                           management, competent and qualified personnel. The                development initiatives. The executive management 
                                                           failure to attract the right candidates, loss of key              reviews talent potential twice a year and retention 
                                                           personnel or failure to adequately train employees                plans are put in place for individuals identified 
                                                           could damage the Group's business or lead to non-compliance       at risk of leaving. Compensation and benefits programmes 
                                                           with legal and regulatory requirements.                           are competitive and reviewed regularly. 
Brexit                                                    The effect on inter-company transactions and the Group's          Due to the current uncertainties with the Brexit negotiations 
                                                           international expansion plans may be adversely affected           the Group is still considering appropriate mitigation 
                                                           by the outcomes of the negotiations between the UK                strategies. However, the bulk of the Group's operations 
                                                           government and the other member countries during the              and revenues are UK-based. Romania and Ireland will 
                                                           UK's exit from the European Union.                                remain within the EU and are unlikely to be significantly 
                                                                                                                             affected by Brexit. Where issues are identified appropriate 
                                                                                                                             mitigations are being put in place. 
 
   Related party transactions 
 
   Remuneration of the directors, who are the key management of the Group, 
was as follows during the year: 
 
 
 
 
                            Year ended 31 March 2018  Year ended 31 March 2017 

                                     GBP000                    GBP000 
Short term benefits and 
 bonus(1)                                      2,579                     2,162 
Pension costs(2)                                 234                       235 
Long term incentives(3)                          445                       445 
Other(4)                                          29                        29 
Total                                          3,287                     2,871 
 
   1. Includes salary, fees, benefits in kind and annual bonus. 
 
   2. Defined contribution pension scheme. 
 
   3. Long term incentives: includes the value of 2015 LTIP and DABS 
expected to vest after the year end (2017: 2014 DSB and LTIP awards). 
 
   4. SIP matching and dividend shares awarded in the year. 
 
   Amounts received from Drop and Collect Limited during the year totalled 
GBP15.1 million (2017: GBP17.8 million) and PayPoint held a trade debtor 
at year end of GBP0.4 million (2017: GBP0.6 million). 
 
   Directors' remuneration is disclosed on page 58 of the 2018 Annual 
Report as part of the annual report on remuneration. 
 
   Statement of directors' responsibilities in respect of the Annual Report 
and the Financial Statements 
 
   The 2018 Annual Report contains the following statements regarding 
responsibility for financial statements on page 69: 
 
   "The directors are responsible for preparing the Annual Report and the 
Group and parent Company financial statements in accordance with 
applicable law and regulations. 
 
   Company law requires the directors to prepare Group and parent Company 
financial statements for each financial year. Under that law they are 
required to prepare the Group financial statements in accordance with 
International Financial Reporting Standards as adopted by the European 
Union (IFRSs as adopted by the EU) and applicable law and have elected 
to prepare the parent Company financial statements on the same basis. 
 
   Under company law the directors must not approve the financial 
statements unless they are satisfied that they give a true and fair view 
of the state of affairs of the Group and parent Company and of their 
profit or loss for that period. In preparing each of the Group and 
parent Company financial statements, the directors are required to: 
 
 
   -- select suitable accounting policies and then apply them consistently; 
 
   -- make judgements and estimates that are reasonable, relevant and reliable; 
 
   -- state whether they have been prepared in accordance with IFRSs as adopted 
      by the EU; 
 
   -- assess the Group and parent Company's ability to continue as a going 
      concern, disclosing, as applicable, matters related to going concern; and 
 
   -- use the going concern basis of accounting unless they either intend to 
      liquidate the Group or the parent Company or to cease operations, or have 
      no realistic alternative but to do so. 
 
 
   The directors are responsible for keeping adequate accounting records 
that are sufficient to show and explain the parent Company's 
transactions and disclose with reasonable accuracy at any time the 
financial position of the parent Company and enable them to ensure that 
its financial statements comply with the Companies Act 2006. They are 
responsible for such internal control as they determine is necessary to 
enable the preparation of financial statements that are free from 
material misstatement, whether due to fraud or error, and have general 
responsibility for taking such steps as are reasonably open to them to 
safeguard the assets of the Group and to prevent and detect fraud and 
other irregularities. 
 
   Under applicable law and regulations, the directors are also responsible 
for preparing a Strategic Report, Directors' Report, Directors' 
Remuneration Report and Corporate Governance Statement that complies 
with that law and those regulations. 
 
   The directors are responsible for the maintenance and integrity of the 
corporate and financial information included on the Company's website. 
Legislation in the UK governing the preparation and dissemination of 
financial statements may differ from legislation in other jurisdictions. 
 
   Responsibility statement of the directors in respect of the annual 
financial report 
 
   We confirm that to the best of our knowledge: 
 
 
   -- The 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; and 
 
   -- the directors' report which also incorporates the strategic report 
      includes a fair review of the development and performance of the business 
      and the position of the issuer and the undertakings included in the 
      consolidation taken as a whole, together with a description of the 
      principal risks and uncertainties that they face. 
 
 
   We consider the annual report and accounts, taken as a whole, is fair, 
balanced and understandable and provides the information necessary for 
shareholders to assess the group's position and performance, business 
model and strategy. 
 
   Dominic Taylor 
 
   Chief Executive 
 
   24 May 2018" 
 
   - End - 
 
   Enquiries: 
 
   Susan Court 
 
   Company Secretary, PayPoint plc 
 
   Tel: [phone] 
 
   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 8,000 stores 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 29,000 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. It helps over 500 consumer service providers to save 
time and money while making it easier for their customers to pay - via 
any channel and on any device. 
 
   This announcement is distributed by Nasdaq Corporate Solutions on behalf 
of Nasdaq Corporate Solutions clients. 
 
   The issuer of this announcement warrants that they are solely 
responsible for the content, accuracy and originality of the information 
contained therein. 
 
   Source: PayPoint plc via Globenewswire 
 
 
  http://www.paypoint.co.uk/default.htm 
 

(END) Dow Jones Newswires

June 26, 2018 04:00 ET (08:00 GMT)

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