23rd May 2019 10:37
LONDON (Alliance News) - PayPoint PLC on Thursday reported a rise in annual profit as the payments company saw use of its services increase in the UK retail sector.
In the twelve months to March 31, the retail, mobile and online payment service reported pretax profit of GBP54.7 million, 3.4% higher than the GBP52.9 million recorded the year before.
Revenue decreased in the same period, however, slipping slightly to GBP211.6 million from GBP213.5 million the prior year. The decrease was attributed to closure of the company's Simple Payments Service.
PayPoint said its new, upgraded platform, PayPoint One, was live in 12,881 sites at March 31, ahead of the company's target of 12,400 sites. In total, PayPoint is now active at 63,500 retail sites in the UK.
As a result, the company's service fee revenue increased by a third to GBP10.3 million. Paypoint's card payment rebate revenue increased 5.5% to GBP7.9 million.
The company declared a final dividend of 23.6 pence per share, resulting in a total dividend of 46.2p - which is 2.0% higher than the 45.3p distributed the year before.
The company also paid an additional dividend of 36.7p per share, as part of a GBP25 million annual distribution programme to which PayPoint said it will "remain committed" through 2021.
"I am delighted to have joined PayPoint as CEO at an exciting time in its development. Key foundations have been set for future growth. PayPoint One was rolled out to almost 13,000 sites and, in the future, we will continue to enhance product features adding even more value to retailers. Together with our four new parcel partners we can improve online shoppers' experience by delivering their purchases to a PayPoint store convenient to them. MultiPay enhancements allow our clients to offer a full suite of payment options to their end consumers. At the same time, our bill payments business has proved resilient in a rapidly evolving market," said Chief Executive Patrick Headon.
The total convenience sector sales from PayPoint services were ahead 2.5% year on year at GBP40 billion. The growth, according to the company, was driven by consumers habits changing towards smaller but more frequent shopping trips to local stores.
PayPoint noted its total UK card payments transactions increased 24% in the six months to January 2019, with an increase in contactless payments driving the growth. This increase in generally lower-value contactless payments, however, resulted in a 4.3% decrease in average transaction value in the period.
"PayPoint will benefit both from the market growth in UK card payments and by increasing the penetration of its card payments product in its retail network, assisted by our new unique net settlement feature," the company said.
PayPoint's ATM business saw transactions slip 6.6% in the year, decreasing to 2.86 billion. The number of ATMs decreased by 7.8% in the period. PayPoint's ATM fees were reduced by 5% in July 2018 and a further 5% in January 2019, but the company said any further fee drops are "on hold".
Headon said: "Delivery of the financial result for the year ending 31 March 2020 requires revenue growth across PayPoint One, MultiPay, Romania and Parcels, as we scale up with our new partnerships, as well as continued resilience in bill payments and vigilance on costs. Despite the final year impact of the Yodel renegotiation, investment in customer service and improved business efficiency and the uncertain broader economic environment, the board is confident that there will be a progression in profit before tax for the year ending March 2020."
Shares in PayPoint were up 1.9% Thursday at 1,064.00 pence each.
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