Paypoint plc Paypoint Plc : Trading Update For The Three Months Ended 30 June 2018

 
TIDMPAY 
 
   PayPoint plc 
 
   Trading update for the three months ended 30 June 2018([1] #_ftn1) 
 
   26 July 2018 
 
   Further STRATEGIC AND OPERATIONAL PROGRESS 
 
 
 
 
   -- Continued progress in roll out of EPoS Pro, our flagship product, in 292 
      sites at 30 June 2018. Wholesaler links with NISA now live and Booker in 
      pilot programme. 
 
   -- eBay now added as a second partner to Collect+ network, expected to go 
      live before Christmas. 
 
   -- Continued addition of new clients onto the platform including a leading 
      UK bank challenger, Tide. MultiPay volumes increased 62.8%. 
 
   Dominic Taylor, PayPoint's Chief Executive, commented: 
 
   "I am pleased with PayPoint's performance in the first quarter with 
further progress made in executing our strategic priorities. In parcels 
we have now added eBay as a partner to our Collect+ network which we 
anticipate will drive higher parcel volumes, helping to drive further 
footfall and commissions for our retailers. We also continue to make 
good progress in embedding PayPoint at the heart of convenience retail, 
with PayPoint One now in 9,260 sites, of which 292 are taking our EPoS 
Pro solution. We remain on target to have PayPoint One in 12,400 sites 
by 31 March 2019. In the UK, we have implemented several improvements to 
enhance our retailers' experience when working with us, including a new 
interactive voice response technology. In Romania, growth continued to 
benefit from the Payzone acquisition and solid growth in the underlying 
business. The progress over the past three months underpins the Board's 
confidence in our strategy and our full year outlook remains in line 
with previous guidance." 
 
   "Following the quarter end, we had a technical incident on Saturday 21 
July 2018 that impacted, at peak, approximately one-third of our retail 
terminal estate. During this period, customers were able to undertake 
services at alternative local sites during the day as we were able to 
continue to provide coverage across our network to 98% of households. We 
fully restored services during the course of the day and are confident 
that it was a one-off, isolated incident and we are sorry for any 
inconvenience that the outage caused to our retailers and their 
customers during the affected time." 
 
   Performance for the first quarter period ending 30 June 2018 
 
   As anticipated, Group net revenue reduced by GBP0.7 million from GBP28.4 
million to GBP27.7 million reflecting the closure of Simple Payment 
Service (SPS) by the Department for Works and Pensions, the second-year 
impact of reduced Yodel parcel fees and the implementation of IFRS 
15([2] #_ftn2) . These factors had a combined impact of GBP1.4 million 
on net revenue in the first quarter. Transactions increased to 155.6 
million, an increase of 3.6% from 150.3 million achieved in Q1 last 
year. The strong increase of 8.4 million (43.9%) transactions in Romania 
was partially offset by the expected lower transaction volume in the UK 
of 3.1 million (2.4%). 
 
   Our retail network remains robust with 29,043 (31 March 2018: 29,114) 
sites in the UK and Ireland and 19,802 (31 March 2018: 20,514) in 
Romania as at 30 June 2018. 
 
   In the UK and Ireland like-for-like([3] #_ftn3) retail services net 
revenue was up 3.3% driven by service fees which increased 46.1% to 
GBP2.3 million. In the quarter our focus has been on the roll out of our 
flagship product, EPoS Pro, which was in 292 sites at 30 June 2018, an 
increase of 138 since the beginning of the financial year. Wholesaler 
links with NISA are now live and are in a pilot programme with Booker, 
with their retailers now ordering stock directly from their PayPoint One 
terminal. Overall, our PayPoint One terminal was in operation in 9,260 
sites, an increase of 710 since the beginning of this financial year. We 
remain on track to reach our target of 12,400 sites by 31 March 2019. 
 
   Card payment transactions grew by 13.8% to 27.4 million. On 13 January 
2018, the government ban on all surcharges for card payments came into 
effect. As a consequence, the increased transaction volume was offset by 
reduced average transaction values which decreased from GBP14 to GBP13 
resulting in a slight reduction in card payment rebate revenue. ATM 
transactions increased by 4.5% to 10.7 million driving an increase in 
ATM net revenue. Our Collect+ network was in 7,456 sites on 30 June 2018 
with parcel volumes down by 17.1% reflecting a reduction in parcel 
volumes from our current partner, although we anticipate returning to 
growth once our new parcel partners begin to introduce volumes. eBay has 
been added as a second partner to Collect+ network and is expected to go 
live before Christmas. 
 
   As anticipated, net revenue in bill and general decreased by 12.8%, in 
large part due to the closure of the SPS scheme. However, there was a 
strong performance in the energy sector where net revenue increased by 
3.3%. In addition, eight new clients were added during the quarter 
including a leading UK bank challenger, Tide, enabling consumers to 
manage payments to their Tide e-money accounts through a UK wide network 
which is larger than any high street bank. Bill and general transactions 
reduced by 4.8% to 72.7 million in the quarter. MultiPay volumes 
increased 62.8% to 5.3 million transactions. 
 
   Top-up transactions declined by 15.5% as the prepaid mobile sector 
continued to contract. Net revenue however, only reduced by 1.9% as 
average top-up values and e-Money transactions, which have a higher net 
revenue per transaction rate, continued to grow. 
 
   In Romania, transactions increased 43.9% from last year to reach 27.8 
million and net revenue increased by 37.1%([4] #_ftn4) driven largely 
from the integration of Payzone. Organically, Romania continued to grow 
strongly with net revenue up by 7.0%. 
 
   Balance sheet at 30 June 2018 
 
   The group had net cash of GBP48.5 million (31 March: GBP46.0 million) 
including the balance held in respect of short term client settlement 
obligations which was GBP22.2 million (31 March: GBP27.5 million). The 
final ordinary dividend of 30.6 pence per share together with the 
additional dividend of 24.5 pence per share will be paid to shareholders 
on 30 July 2018. 
 
 
 
 
Enquiries 
PayPoint plc                                        Finsbury (Tel: [phone] 
                                                    801) 
Dominic Taylor, Chief Executive (Tel: [phone]     Rollo Head 
317) 
Rachel Kentleton, Finance Director (Tel: [phone]  Andy Parnis 
 906) 
 
   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 9,200 stores in the UK 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. PayPoint 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. 
 
   ([1] #_ftnref1) PayPoint's auditors have not been requested to review 
the performance. 
 
   ([2] #_ftnref2) PayPoint adopted IFRS 15 - Revenue from contracts with 
customers (IFRS 15) effective from 1 April 2018. Under IFRS 15, revenue 
and net revenue are affected by the deferral of setup and development 
revenue and phasing of revenue from contracts which contain tiered 
pricing structures. IFRS 15 has been adopted using the cumulative effect 
method and as a result has not been applied to the comparative reported 
period presented. The impact on net revenue in the 3 months to 30 June 
2018 was to defer net revenue of GBP0.1 million. IFRS 15 also required 
the deferral of costs associated to setting up clients and retailers on 
PayPoint's network and as such has not had a significant impact on 
profit before tax. 
 
   ([3] #_ftnref3) Like-for-like retail services net revenue excludes the 
GBP0.3 million impact from the second-year impact of reduced Yodel 
parcel fees. 
 
   ([4] #_ftnref4) Reported in constant currency, net revenue increased by 
37.5%. 
 
   PayPoint Trading Update: http://hugin.info/137093/R/2207252/858105.pdf 
 
   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

July 26, 2018 02:00 ET (06:00 GMT)

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