PayPoint Warns Profit To Grow At More Modest Rate Than Expected

(Alliance News) - FTSE 250-listed PayPoint PLC on Thursday said revenue grew in the recent quarter despite closure of about 2% of its sites.

However, the company warned that recent warm weather has hit energy transactions within UK bill payments and said parcel volume growth remains towards the lower end of its expectations.

The company, which is offering a system for paying bills, said net revenue increased by 4.2% to GBP32.7 million in the three months to the end of 2019. This growth was helped by an increase in service fees and a robust performance in bill payments in the UK and Romania.

PayPoint said its retail network reduced to 27,832 sites from 28,366 sites quarter-on-quarter in the UK, as expected, and as a result of its legacy terminal sunset programme.

The company contracted eight new clients in the period and six clients renewed contracts, including an exclusive agreement with Monzo, PayPoint noted.

"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," explained Executive Chair Nick Wiles.

PayPoint said 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.

Meanwhile, the company noted that retail services, excluding parcels, are performing in line with our expectations and are expected to carry on growing well.

Overall, PayPoint said it remains confident that there will be a progression in pretax profit excluding exceptional items for the year ending March 31, albeit said it is now "likely" to be at a more modest rate than previously expected.

A year ago, PayPoint's pretax profit excluding exceptional items was GBP53.8 million.

PayPoint shares were trading 6.8% lower in London on Thursday at 973.50 pence each.

By Evelina Grecenko; evelinagrecenko@alliancenews.com

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