(Alliance News) - PayPoint PLC on Thursday said profit declined in the first half of its financial year following the end of its British Gas contract.
Shares in PayPoint were down 1.8% at 600.00 pence in London in late morning trading.
The Hertfordshire, England-based payment services provider reported a GBP16.8 million pretax profit for the six months ended September 30, down 19% from a GBP20.7 million profit a year before.
PayPoint said this reflected "the decrease in net revenue from continuing operations and the expected impact of the British Gas contract ended in December 2019".
Revenue fell 12% to GBP60.7 million from GBP69.1 million, with a 7.8% or GBP3.9 million drop in net revenue from continuing operations to GBP46.4 million.
Additionally, the prior period included GBP2.1 million net revenue from the British Gas contract, which has now ended. Net of the expected British Gas impact, net revenue fell by GBP1.8 million.
Additionally, finance costs rose to GBP696,000 from GBP247,000.
The company reduced its ordinary interim dividend per share by 34% to 15.6p from 23.6p the year before. It also paid no additional dividend, having paid a 18.4p per share additional dividend the prior year, as its additional dividend programme has now ended.
Chief Executive Nick Wiles noted the company's September 30 announcement that it "had received a statement of objections" from UK regulator Ofgem "relating to certain contractual terms with certain energy suppliers and retailers for the provision of over-the-counter payment services."
Wiles said: "We are considering Ofgem's provisional views set out in the statement of objections and will exercise our right to respond to Ofgem in due course. It is therefore too early at this stage to predict an outcome and any potential outflow of funds."
The CEO added: "With new national restrictions in force across the UK, we are applying our learnings from earlier in the year to ensure the continued resilience and preparedness of our business for this developing situation. We have clear plans underway to contain costs, we are working flexibly in support of our clients and retailer partner network and we continue to explore new opportunities."
By Anna Farley; annafarley@alliancenews.com
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Paypoint (PAY)