Paypoint plc Paypoint Update Regarding Covid-19

 
TIDMPAY 
 
 
   This announcement contains inside information for the purposes of EU 
Regulation 596/204 
 
   PayPoint plc 
 
   19 March 2020 
 
   PayPoint update regarding COVID-19 
 
   PayPoint continues to provide vital services to the community during 
this un-precedented period of uncertainty. Our priority is to continue 
to support our clients, retailer network and people so that communities 
are able to access the services they need and our business continues to 
function effectively. 
 
   Trading 
 
   Our recent trading across the business has continued to be robust and 
most recently we have seen areas of increased activity across our 
network, with consumers currently making higher levels of energy top-ups 
and increasingly using cards as their preferred payment method. As a 
result the Board remains confident that progress will be made in profit 
before tax and exceptional items for the financial year ending 31 March 
2020. 
 
   PayPoint has quickly moved to an operating model which combines remote 
working, continued activity in the field in support of our retailer 
network and some essential office based activity. We are seeking to 
minimise the disruption of service and support we can provide clients 
and our retailer network at this time, whilst taking the appropriate 
steps to safeguard our people. Our contact centre remains fully 
operational and we are considering a range of measures to support our 
retailers and clients during this period. 
 
   However, the Board recognises that as one of the UK's leading Bill 
Payment services providers, measures taken by the government through 
this period to provide financial support to UK households, such as a 
waiver on utility bill payments, may have as yet unclear and potentially 
adverse consequences for our bill payments volumes. 
 
   Further, as we look ahead to the next financial year, our initiatives to 
grow parcels, develop our EPoS proposition and other new services across 
our retailer network will inevitably be slower than had been 
anticipated. As a result, the business will find it challenging to 
mitigate the impact from the loss of the British Gas contract and 
pricing pressure from other utility clients. The Board is currently 
reviewing the impact of these challenges on our outlook for the 
financial year ending 31 March 2021 but at this stage cannot give 
precise guidance as to the impact. 
 
   The Board will continue to keep the market updated as the situation 
develops and its impact on the business and our plans for the next 
financial year become clearer. The analysis is based on information and 
data currently available and may change dependent on how the COVID-19 
situation develops over the coming weeks. 
 
   Balance sheet and liquidity 
 
   PayPoint remains in a strong financial position, the Group had net debt 
of GBP13.3 million (excluding cash held in respect of short term client 
settlement obligations) as at 31 December 2019. To ensure PayPoint 
remains in the best possible position to withstand a sustained period of 
disruption to trading, the GBP70 million revolving credit facility 
(forming part of our overall GBP75 million financing facility) has been 
fully drawn down. 
 
   Dividend 
 
   Additional dividend payments have been suspended until further notice 
and an immediate review of short term cost reduction measures will be 
undertaken across the business. The Board will continue to review the 
appropriate level of ordinary dividend to be paid, recognising its 
importance to our shareholders and will make a final decision ahead of 
our full year results announcement 28 May 2020. 
 
   The actions taken will leave the business in the strongest position 
possible to manage through this current crisis. 
 
   Leadership and continuity 
 
   The Board has decided in the current environment that maintaining 
clarity and continuity in the leadership of the business is the most 
appropriate course of action. Nick Wiles will remain in the role of 
executive chairman during this period, in support of the executive team. 
Consequently, the CEO search process has been temporarily suspended and 
will be resumed once the situation becomes clearer. 
 
   Enquiries 
 
   PayPoint plc: 
 
 
   Nick Wiles, Executive Chairman (Tel: [phone]) 
 
   Rachel Kentleton, Finance Director (Tel: [phone]) 
 
 
 
   Finsbury: 
 
   Rollo Head/Andy Parnis (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 16,000 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 almost 28,000 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 c500 consumer service providers to 
save time and money while making it easier for their customers to pay -- 
via any channel and on any device. 
 
   END 
 
 
 
 

(END) Dow Jones Newswires

March 19, 2020 09:49 ET (13:49 GMT)

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