21st Nov 2013 10:23
LONDON (Alliance News) - PayPoint PLC Thursday said its first-half profit growth was ahead of expectations after it shifted certain IT and marketing expenses to the second-half of the year.
PayPoint, which makes money by getting customers to pay bills through its services, as well as competing with banks for retail customers, said it made a GBP21.3 million pretax profit in the 26 weeks ended September 30, compared with a GBP18.3 million pretax profit in the 27 weeks to September 30 in 2012.
Although the company was clear that its results benefited from pushing certain expenses to the second-half, gross profits increased by 9.8% to GBP46.0 million as a result of a marginal increase in revenue and a drop in the cost of sales, which is made up of items such as commission paid to retail agents and the cost of mobile phone top-ups and sim cards. That said, the company's revenues were boosted by GBP3.4 million of "other" revenue, including "the recharge of development costs and other fees". The figure is up by GBP1.1 million on the last half-year and PayPoint said the increase is unlikely to be sustained in the second-half.
Chairman David Newlands said trading is in line with PayPoint's expectations, and elaborated on the convenient payments company's expenditure plans.
"Looking ahead, our retail networks in the UK and Romania should continue to deliver profitable growth from our strong client base and breadth of services. We will continue to invest in network expansion, innovative technology and new services to improve the quality of these retail networks. This expenditure should enhance their competitive advantages and our retail yield," Newlands said in a statement.
Newlands also said that internet payment service provider e&m commerce is an essential element of PayPoint's strategy to provide multi-channel payments and services, which gives the company exposure to fast growing markets and provides a bridge from cash to electronic payments.
PayPoint shares were Thursday quoted at 1,075.00 pence, up 1.90%.
By Samuel Agini; [email protected]; @samuelagini
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