St James House upbeat on payments division improvements

(Sharecast News) - St James House updated the market on its trading on Wednesday, reporting that its payments division saw non-card related sterling and euro activity holding steady through August.
The AIM-traded firm said it saw a 25% increase in sterling accounts and a 10% increase in euro accounts.

Inbound deposit receipts were similar to July, but with fewer outbound payments for sterling account holders.

The board said that, growing from a "relatively low base", the company would continue to monitor its data closely and develop a more meaningful data set as patterns in growth emerged in the coming months.

In card payment services, it said prepaid card products were still growing slowly, with a 2% increase in active customers, although daily spending levels were "significantly down" at around 50% of the daily spending level in July, largely reflected by a significant decrease in the use of cards for cash withdrawals.

Its merchant services team had agreed to deploy a new gateway giving access to 25 acquiring banks, all major ecommerce checkout and shopping cart providers, and all major alternative payment methods including PayPal, Amazon Pay, Apple Pay and Google Pay.

The new system was also integrated into a range of electronic point-of-sale systems, meaning that the company would be able to service "any type of merchant" in "virtually any market".

"The impact of Covid-19 continues to disrupt visits to potential merchants that expect client visits and with the recent return of certain restrictions in various parts of the country, this disruption is likely to continue at some level," the board said in its statement.

It said October would see it deploy a "full suite" of foreign exchange and account options, including enhancements to existing sterling and euro services and adding dollar named accounts as standard.

The company said it would be able collect, convert, pay and manage client money from named multi-currency accounts, with clients having the ability to send and receive funds in 37 currencies to 180 countries, with local delivery in 17 currencies.

Looking at its lottery business, St James House said its Prize Provision Services (PPS) division had seen stability in the number of entries into the lotteries it administers during recent months, despite the ongoing Covid-19 restrictions, with it "hopeful" of an overall increase in entries during the second half of the year.

"The charity sector has begun to return to normal with staff being brought off furlough and beginning to evaluate fundraising methods to address the shortfalls in fundraising during the lockdown period," the board explained.

The group also noted that it had established a new claims management business, St Francis House.

Closely related to payments, it said claims management was a regulated activity which involved the acquisition and management of claims for damages usually associated with road traffic accidents, but applicable across financial services, housing, criminal injury and employment matters.

It was a process-led activity in a "highly regulated" environment, with the company recruiting a "small and experienced" team based in Liverpool.

St James House said the business was scalable, and gave a "predictable and measurable" return on investment, with each case returning revenue within 12 to 16 weeks.

The company said it had a small caseload in place, and planned to acquire cases in the coming weeks in order to reach an average work-in-progress value of £0.3m to £0.5m in the first year.

"As the business becomes more established, the board will consider the key performance indicators which will enable shareholders to monitor and track progress in this new division," it said.

Finally, St James House said Astro Kings, the joint venture five-a-side football centre in Nottingham, remained fully open with pitch occupancy levels remaining at the levels which would be expected for the time of year.

While a second wave of restrictions would affect the venue, it was not expected to have a material impact on the group .

"We have been extremely busy delivering a number of significant upgrades to our payment business' capabilities," said chief executive officer Graeme Paton.

"Now with full foreign exchange functionality expected to come on stream in October, we are able to make domestic and international payments in 37 currencies to over 180 countries giving our clients the ability to receive, convert and send money quickly and cheaply virtually anywhere."

Paton said that further, the improved ability for clients to collect payment by all major card types and almost 150 alternative payment methods meant the firm was "well-positioned" to help businesses of all sizes.

"The establishment of our new claims management business is expected to provide the group with an attractive third division of business activity."