PayPoint plc

Trading update for the three months ended 31 December 2019 23 January 2020

PayPoint plc
Trading update for the three months ended 31 December 2019¹
23 January 2020

Highlights:

• Underlying² group net revenue increased by £1.3 million (4.2%) to £32.7 million (£31.4 million).
• Service fee grew strongly by 32.8% to £3.5 million (£2.6 million) driven by the roll out of PayPoint One to 16,223 sites at 31 December 2019 (15,088 at 30 September 2019) and a 3.3% improvement in the average weekly service fee³.
• UK parcel volumes increased by 12.6% to 7.6 million, reflecting a solid performance over the peak period and the benefit of new parcel partnerships.
• UK bill payments net revenue increased by 2.2%, driven by strong growth in MultiPay and improvement in net revenue per transaction offsetting a 1.1% decline in transactions.
• Romania net revenue increased by 0.4%, increasing by 4.7% after adjusting for a one-off payment of marketing support received in the prior year, due to increased transactions and price increases. Good control of costs also drove improved margins.

Nick Wiles, PayPoint’s Executive Chairman, commented:

“Overall our results for the quarter reflect resilience in our bill payments business, growth in our parcels activities during the important peak parcels period and continued progress in the rollout of PayPoint One and our retail services activities. Romania has performed well with a steady increase in transactions and good control of costs.”

Current trading and outlook

The warmer weather over the period of the festive season and the first three weeks of January continues to affect energy transactions within UK bill payments and parcel volume growth remains towards the lower end of our expectations as the four new parcel partners become established within our network. Retail services, excluding parcels, are performing in line with our expectations and are expected to carry on growing well. Actions to deliver cost efficiencies and enhance customer service delivery are effective and ongoing.

Overall, the board remains confident that there will be a progression in profit before tax and exceptional items for the year ending 31 March 2020, albeit it is now likely to be at a more modest rate than previously expected.

Performance for the third quarter ending 31 December 2019

Underlying² group net revenue increased by £1.3 million from £31.4 million to £32.7 million driven by an increase in service fees, through the ongoing roll out of PayPoint One, and a robust performance in bill payments in the UK and Romania.