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Q1 2017 trading update

Trading update for the three months ended 30 June 2017 

  • Group1 organic net revenue2 grew 4.2% from £27.3 million to £28.4 million
  • UK retail services net revenue grew by 10.5% driven by PayPoint One, card payment transactions and ATM transactions
  • Romania net revenue, reported in constant currency, grew by 16.1%
  • UK parcel volumes grew by 16.6% to 6.1 million in the quarter

Dominic Taylor, PayPoint’s Chief Executive, commented:

‘We have continued our repositioning of the business in the new financial year, as we have driven profitable growth in UK retail services, increased parcel volumes and delivered another strong performance in Romania. The successful roll out of our innovative new PayPoint One terminal in the UK continues, following its launch last September. We are on target to achieve 8,000 installations by the end of this financial year, with 5,000 terminals already in service. This good progress underpins the Board’s confidence in our strategy and our full year outlook remains in line with previous guidance.’

Performance3 for the first quarter period ending 30 June 2017

Group1 organic net revenue grew 4.2% from £27.3 million to £28.4 million despite a 4.5% reduction in transaction volumes to 150.3 million, as a result of an expected decline in our UK prepay energy volume, which was partially offset by growth in our net revenue per transaction through a shift to smaller but higher yielding clients, combined with strong growth in our MultiPay platform, through which transactions doubled to 3.3 million. On a reported basis including the results of PayByPhone, which was sold on 23 December 2016, net revenue reduced 4.0% from £29.6 million to £28.4 million.

UK and Ireland retail services net revenue was up 10.5% driven by PayPoint One service fees, card payment transactions which grew by 8.3% to 24.1 million and ATM transactions which increased 5.0% to 10.2 million. Our PayPoint One terminal, which launched in September 2016, is now in operation in 5,000 sites3, an increase of 1,296 since the beginning of this financial year. We remain on target to reach 8,000 sites by 31 March 2018. Due to the strong take up of PayPoint One by our retailers, we have introduced and standardised the service fees for legacy terminals across 14,000 sites. As expected, this caused a small amount of retailer churn and our UK network reduced by 449 during the first quarter to 28,727 outlets. We are also pleased with the performance of our parcel service, which increased volume by 16.6% to 6.1 million. The Collect+ network expanded to 6,521 sites up by 354 since the beginning of the financial year.

As anticipated, net revenue in bill and general decreased by 2.7% as transaction volume declined by 11.2%, driven mainly by a 15.1% reduction in prepay energy volume, with the shift in mix towards smaller but higher yielding clients partially offsetting the decrease in transactions. Top-up transactions declined by 14.4% as the prepaid mobile sector continued to contract.

Romania continued to grow, net revenue reported in constant currency increased by 16.1% and in GBP increased by 25.3%. Total transactions increased 9.1% from last year to reach 19.3 million. Our Romanian network continued to expand with PayPoint at 11,477 retailer sites at 30 June 2017, up 175 since the beginning of the financial year.

Balance sheet at 30 June 2017

The group had net cash of £56.9 million (31 March: £53.1 million) including the balance held in respect of short term client settlement obligations which was £17.6 million (31 March: £20.2 million).

 

Enquiries

PayPoint plc                                                                          

Dominic Taylor, Chief Executive (Tel: 01707 600 317)         

Rachel Kentleton, Finance Director (Tel: 07843 074 906)          

Finsbury (Tel: 0207 2513 801)

Rollo Head
Andy Parnis     

1 Group consists of our UK, Ireland and Romanian retail networks and excludes PayByPhone which was sold on 23 December 2016.

2 Net revenue is revenue less the cost of mobile top-ups (where PayPoint is principal), SIM cards and other costs incurred by PayPoint which are recharged to clients and merchants. These costs include retail agent commission, card payment merchant service charges and costs for the provision of call centres for PayByPhone clients. Net revenue is a measure which the directors believe assists with a better understanding of the underlying performance of the group.

3 At 30 June 2017 PayPoint One was in 4,897 sites.

4 PayPoint’s auditors have not been requested to review the performance or financial position.