Paypoint plc Paypoint Plc : Trading Update For The Three Months Ended 31 December 2018

 
TIDMPAY 
 
   PayPoint plc 
 
   Trading update for the three months ended 31 December 2018([1] #_ftn1) 
 
   24 January 2019 
 
 
 
   CONTINUED GOOD PROGRESS ACROSS ALL KEY GROWTH DRIVERS 
 
   For the three months ended 31 December 2018([1] #_ftn2) 
 
 
   -- Group underlying net revenue increased by 1.4% to GBP30.9 million 
 
   -- PayPoint One rolled out to 12,0002 sites; year-end target increased to 
      12,700 sites from 12,400 
 
   -- UK service fee revenue up by 31.3% to GBP2.6 million 
 
   -- A third partner contracted to the Collect+ network, to go live before the 
      end of the financial year 
 
   -- Resilient performance in UK bill payments with underlying net revenue 
      flat 
 
   -- Continued strong growth in MultiPay with transactions up 43.6% to 8.0 
      million 
 
 
 
   Dominic Taylor, Chief Executive, commented: 
 
   "PayPoint has reported another solid quarter with good progress being 
made across all our key growth drivers. We continue to rollout PayPoint 
One, now operating in over 12,000([2] #_ftn3) convenience retailers and 
we have increased our year-end target to 12,700 sites. Our parcels 
business had a successful first Christmas with our new partner, eBay, 
and we are pleased to have a third partner contracted to the Collect+ 
network. Bill payments in the UK and Romania delivered a resilient 
performance with 11 new clients contracted and we saw strong growth in 
our MultiPay platform of 43.6% with 8.0 million transactions in the 
quarter. We continue to innovate to improve our retail proposition with 
respect to service and products in order to drive value to local 
shopkeepers. Our solid underlying net revenue growth and continued 
strong cost management in the quarter means that the Board's full year 
expectations remain in line with the outlook provided in November." 
 
   Performance for the three months ended 31 December 2018 
 
   Group 
 
   Underlying net revenue increased by GBP0.4 million (1.4%) to GBP30.9 
million. Including the impact of GBP1.3 million from the closure of the 
Simple Payment Service by the Department for Works and Pensions and the 
renegotiated Yodel parcel fees, net revenue declined by 2.8%. 
Transactions increased 0.9% to 174.2 million from 172.6 million in the 
third quarter of last year. 
 
   UK 
 
   Underlying net revenue increased by GBP0.2 million (0.9%) to GBP27.2 
million driven by underlying net revenue growth of 3.9% in retail 
services. As indicated at the half year results, the Irish network of 
426 sites was closed on 16 October 2018 (Irish network generated GBP0.2m 
net revenue in the third quarter of last year). UK retail network sites 
increased from 28,460 on 30 September 2018 to 28,505 on 31 December 
2018. 
 
   UK retail services underlying net revenue increased by GBP0.4 million 
(3.9%) to GBP9.7 million([3] #_ftn4) driven by good growth in service 
fee revenue which increased by 31.3% to GBP2.6 million. As at 31 
December 2018, the PayPoint One terminal was in operation in 11,697 
convenience retailers, an increase of 1,455 sites since 30 September 
2018. EPoS Pro was in operation in 520 convenience retailers. Given the 
strong momentum in the first nine months of the year, the year-end 
target of 12,400 sites by 31 March 2019 has been increased to 12,700 
sites. Our sales effort in the quarter continued to focus on extending 
penetration of the Base version of PayPoint's EPoS solution (charged at 
GBP10 per week) to replace our legacy T2 devices and, as a result, 
average weekly service fee per site reduced to GBP14.89 from GBP15.01 at 
30 September 2018. 
 
   Card payment transactions grew by 23.0% to 28.8 million driving a GBP0.2 
million increase in net revenue. ATM performance was strong despite the 
difficult market conditions with transactions increasing by 3.1% to 10.6 
million. ATM net revenue declined GBP0.2 million primarily due to the 
reduced Link interchange fee which became effective in July 2018. 
 
   Strong momentum continued in the Parcels business. PayPoint delivered a 
successful first Christmas with new partner, eBay, with over 2,500 sites 
processing ebay parcels; volumes are anticipated to grow as awareness of 
the service increases. A third partner has now([4] #_ftn5) been added to 
the Collect+ network and is expected to go live before the end of the 
financial year. As anticipated, Yodel volumes continued to decline 
albeit at a lower rate, resulting in overall parcel volumes reducing by 
3.2% to 6.8 million in the quarter. The Collect+ network was in 7,049 
sites on 31 December 2018 and remains the consumer's most popular pickup 
and drop off location. 
 
   Bill payment underlying net revenue was flat at GBP13.2 million([5] 
#_ftn6) , despite a 1.5% decline in transactions. PayPoint has continued 
to successfully execute its strategy to diversify its client portfolio 
to smaller higher margin customers. In the quarter PayPoint added five 
new clients. MultiPay drove a strong performance in energy transactions 
as businesses increasingly adopt our omni-channel platform, where 
transactions increased by 43.6% to 8.0 million. 
 
   Overall top-up and e-money transactions declined by 15.0% to 11.1 
million. As anticipated, this was driven by the continued decline in the 
prepaid mobile sector. However, e-money transactions continued to grow 
strongly with transactions increasing by 13.2%. Top-up and e-money net 
revenue declined by 2.9% with the reduction in volumes offset by 
increased average top-up values and the growth of e-money transactions, 
which have a higher net revenue per transaction. 
 
   Romania 
 
   Net revenue increased by GBP0.2 million (4.8%) to GBP3.7 million. The 
migration of the Payzone network is making good progress with over 1,200 
sites now transitioned onto PayPoint's systems increasing operational 
efficiency and profitability. Romanian sites reduced to 18,317 sites 
from 18,984 in line with rationalisation plans to remove unprofitable 
sites. Transaction volumes declined by 0.5 million (1.9%) to 28.1 
million primarily due to telecom operators switching consumers to 
post-paid bills and new EU legislation reducing roaming charges. 
 
   Balance sheet as at 31 December 2018 
 
   The group had net cash of GBP52.1 million (30 September 2018: GBP39.4 
million) including the balance held in respect of client cash and 
retailer deposits of GBP42.3 million (30 September 2018: GBP32.7 
million). The interim ordinary dividend of 15.6 pence per share together 
with an additional dividend of 12.2 pence per share, in total amounting 
to GBP18.9 million, was paid to shareholders on 11 January 2019. 
 
 
 
 
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 12,000 sites 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 over 28,000 sites 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 400 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 or financial position. 
 
   ([1] #_ftnref2) Compared to the three months ended 31 December 2017. 
 
   ([2] #_ftnref3) As at 23 January 2019. 
 
   ([3] #_ftnref4) Excludes the impact of GBP0.2 million from the reduced 
Yodel parcel fees. 
 
   ([4] #_ftnref5) The contract was signed in the fourth quarter. 
 
   ([5] #_ftnref6) Excludes the impact of GBP1.1 million from the closure 
of the Simple Payment Service by the Department for Works and Pensions. 
 
   PayPoint Trading Update: http://hugin.info/137093/R/2232230/877782.pdf 
 
   This announcement is distributed by West Corporation on behalf of West 
Corporation 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

January 24, 2019 02:00 ET (07:00 GMT)

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