REG-PayPoint plc : Interim Management Statement <Origin Href="QuoteRef">PAYP.L</Origin>

PayPointAnnouncement

28/01/2016 07:10

PayPoint plc                                          
                                                   
                                                   
                                 28 January 2016 
 Interim Management Statement 
 
 The board reports on events, transactions and trading since the half year
results to 30 September 2015. 
 
 Dominic Taylor, PayPoint's Chief Executive, said: "We have continued to make
progress across the businesses in the third quarter. Retail services have
grown strongly, our new terminal is in pilot in the UK and we have made good
progress in developing our core epos software. Since the end of the quarter,
we have also concluded the sale of our Online Payments business, further
strengthening our balance sheet.  
 
 However, our progress has been partially offset by the unseasonably warm
weather and its impact on energy consumption, an extension of the additional
costs in Collect+ to facilitate the shareholder discussion and a delay in the
sale of our Mobile Payments business. The restructuring of our business
continues apace. We aim to resolve the Collect+ joint venture arrangements and
complete the sale of our Mobile Payments business by the time we report our
full year results in May, so we can focus all our effort on the development of
our retail networks." 
 
 Performance 1 for the third quarter period ending 31 December 2015 
 
 Group: Net revenues2 were £35.0 million, up 1.8% from net revenues for the
third quarter last year3 whilst revenues of £58.1 million were down 3%3.  We
saw strong growth in retail services of 22.7% and Mobile and Online of 9.6%
offset by declines in top ups of 13.7% and bill and general of 2.4%, the
latter mainly due to lower energy consumption. Overall transactions processed
during the quarter were 225.4 million, up 3.9% on the 216.9 million
transactions in the same period last year. The adverse VAT ruling from HMRC,
as previously reported, along with the unseasonably warm weather, has slowed
the improvement in our results. 
 
 UK and Ireland Retail:   Retail services transactions (ATMs, debit/credit
cards, parcels, money transfer and SIM card sales) continued to grow, up 14.3%
on last year. UK and Irish bill and general transactions were down 8.1% on
last year.  Mobile top-ups continued to decrease as the prepaid mobile sector
declined, partially offset however, by an increase in other top-ups. UK and
Irish retail sites at 31 December numbered 29,044, up by 113 since the half
year end. 
 
 Romania: Profitable growth continued. We processed 15.3 million bill payments
in the period, up 11.0% on last year. Top-ups increased by 6.2% and retail
services by over 50%.  We increased our terminal estate since the half year
end by 307 sites to 9,765 and continued to add new clients. 
 
 Collect+: Volumes increased by 5% to over 6.0 million transactions in the
period, with a record Christmas week of 638,000 transactions.  Our Collect+
network continued to expand with an increase of 75 sites to 5,970 since the
half year end.  Discussions are ongoing with Yodel regarding the future of
the joint venture and the proposed increases in charges put forward by Yodel.
Some of these charges have been allowed pending the outcome of negotiations,
which has resulted in the joint venture generating a small loss. 
 
 Mobile and Online: Transactions increased by 37.6% to 50.2 million in the
period, compared to 36.5 million last year, with Mobile Payment transactions
up 38% to 13.3 million and Online Payment transactions up 37% to 36.9 million.
 The Online Payments business was sold to Capita after the end of the period
on 8 January 2016 for £14.4 million.  We have continued to progress the sale
of the Mobile business, PayByPhone, and have carried its continued loss.  
 
 Balance sheet at 31 December 2015 
 We have maintained a strong balance sheet. The group had cash of £55.7
million (30 September: £46.1 million), after payment of the interim dividend
of £9.7m in the period (2015: £8.4m). The cash balance includes amounts held
to settle short term client obligations of £28.3 million (30 September:
£19.0 million). 
 
 1 PayPoint's auditors have not been requested to review the performance or
financial position. 
 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,
merchant service charges for card payments 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 Prior period revenue and net revenue have been restated by an increase of
£2 million, representing the cost of production of cash out vouchers that had
been incorrectly netted off revenue, net revenue and cost of sales, the latter
of which is also restated.  There was no impact on profit of these
restatements.  
 
 Enquiries 
 Finsbury +44 207 251 3801 - Rollo Head/Andrew Parnis 
 
 
 ABOUT PAYPOINT 
 
 PayPoint is an international leader in payment technologies, its solutions
transforming payments for everyone from consumer and financial services
companies to retailers, utilities, media, e-commerce, gaming and government
clients. 
 
 PayPoint delivers payments and services by taking the complexity of
multi-channel payments and translating it into convenient, simple, value-added
solutions. It handles almost £15 billion from almost 800 million transactions
annually for more than 5,000 clients and merchants. 
 
 With the backing of 24/7 operations centres with dual site processing,
PayPoint is widely recognised for its leadership in payment systems, smart
technology and service. 
 
 Retail networks 
 The PayPoint retail network across the UK numbers over 29,000 local shops
(including Co-op, Spar, McColls, Costcutter, Sainsbury's Local, Tesco Express,
One Stop, Asda, Londis and thousands of independents), where it processes
energy meter pre-payments, bill payments, benefit payments, mobile phone
top-ups, transport tickets, BBC TV licences, cash withdrawals and a range of
other transactions. In Romania, the retail network numbers 9,700 terminals in
local shops, helping people to make cash bill payments, money transfers, road
tax payments and mobile phone top-ups. In the Republic of Ireland, over 500
terminals in shops and credit unions process mobile top-ups and bill payments.

 
 Collect+, a joint venture with Yodel, provides a parcel drop-off and pick-up
service at 6,000 PayPoint retailers. PayPoint's ATM network numbers more than
4,000 'LINK' branded machines across the UK, and 10,000 PayPoint terminals
enable retailers to accept credit and debit cards. 
 
 Mobile Payments 
 PayPoint Mobile Payments (trading as PayByPhone and Adaptis) handles over 118
million payments for parking, payments and consumer services.  In major
cities in the UK, Canada, USA, France, Switzerland and Australia, its parking
solutions make it easy for people to pay for parking by mobile, as well as
providing electronic parking permits, automatic number plate recognition
systems for car parks and penalty charge notices. 
 IMS 


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