REG-PayPoint plc :Statement regarding Collect+ <Origin Href="QuoteRef">PAYP.L</Origin>

PayPointAnnouncement

16/12/2016 07:05

  
RNS Announcement
 
 PayPoint plc announces that it has today reached agreement with Yodel Delivery Network Limited (Yodel) for a newarrangement with respect for Collect+, whichwill put the framework in place for long-term growth in the premier parcels click and collect and returns network.
 
 The key elements of the new arrangement are:
 
 - PayPoint has signed along termagreement with Yodel, with a shared ambition tosubstantially increase coverage and volumes, and to provide its convenience network tothe existing parcels retail clients

 - PayPoint and Yodel will retain 50:50 ownership of the brand through their new joint venture company Collect+BrandLimited,which has licensed the use of the Collect+ brand toboth Yodel and PayPoint and will receive royalties from PayPoint and Yodel for eachparcel they introduce.Yodel will take responsibility for theoperations and contractsandas a consequence, PayPoint will no longer bear the impact of logistics cost increases;
  
-PayPoint will be free for the first time to utilise its convenience retail network to signagreements with other parcel carriers and to open Collect+ access to other carriers,under license;
 
- In recognition of PayPoint rights to extend network access to other carriers, PayPointhas committed to a progressive reduction in its charges over a two year period theimpact which should be mitigated by additional volume growth from existing and new retailers though the continuing relationship with Yodel and additional volume and feesfrom other carriers;
 
 -PayPoint'sshare of the result in the joint venture up to completionwas a loss of 2million. This lossincludes increased charges from Yodel for the period to completion,which willbe booked in the second half of the current financial year.All of the operations andcontracts of the previous joint venture are transferring to Yodel for no consideration. The transfer will not result in a gain or loss toPayPoint. The gross assets of the previous joint venture as at 30 September 2016 were 9 million and they delivered a loss before tax of 0.4 million for the year ended 31 March 2016.Undercurrent accountingconventions, PayPoint is not able to record the positive fair value of its 50% share in thevaluable new Collect+BrandLimited. Yodel's supply contract includes atermination optionshould there be a change of control of PayPoint.
 
Dominic Taylor, Chief Executive said: "We are pleased to have reached agreement overthe new arrangements with Yodel with respect to Collect+. Both companies remainabsolutely focused on growing Collect+ as the premier parcels click and collect returnsnetwork. Thenew arrangementsallowus to focus on our service offering and costoptimisation and for the first time,to open Collect+ access to other carriers. We alsobelieve that this is good news for consumers as we develop a single network open to all,where eventually consumers can collect and return all their parcels, however carried, atthe same convenience store."
  
Collect+


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Source: PayPoint plc via Globenewswire