20th Mar 2020 12:06
(Alliance News) - PayPoint PLC said Thursday its recent trading has been "robust" and has seen increased activity, but has axed its dividend and has stopped the search for a new chief executive.
Shares in the payment services provider were 7.6% higher in London on Friday at 480.49 pence.
PayPoint said it has seen customers increasingly using its systems for energy top-ups.
As a result, PayPoint is confident is pretax profit, before exceptional items, in the year ended March 31 will be ahead of the year before.
In the twelve months to March 31 2019, PayPoint reported pretax profit of GBP54.7 million on revenue of GBP211.6 million.
"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," PayPoint said.
The company added: "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 March 31, 2021 but at this stage cannot give precise guidance as to the impact."
PayPoint said it remains in a strong financial position, with net debt of GBP13.3 million as at December 31. In an effort to stave off any financial pressure, the company has full drawn its GBP70 million revolving credit facility.
PayPoint has also suspended any dividend payments until further notice.
Finally, the company said it has suspended its search for a new chief executive and Nick Wiles will remain in his role as executive chair.
At the end of December, Chief Executive Patrick Headon was forced to step down immediately to receive treatment for a medical condition.
"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," PayPoint said.
The company will begin the search again once the situation becomes clearer.
By Paul McGowan; [email protected]
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