Paul Scott Stockopedia comments. - PAY2 Jun 2023 11:02
Has its core activity of utility prepayment cards has longevity or not? Mind you, investors have been worrying about that for many years, and like newspapers too, it keeps spewing out profit/cashflow despite being possibly in long-term decline. Plus it’s making acquisitions too, including an opportunistic bid for gift card business Appreciate.
Positive Trading Update and Confirmation of Preliminary Results Date
Here’s the whole of today’s update -
PayPoint today reconfirms the guidance issued in the post-close trading update on 20 April 2023 that Group net revenue for the financial year ended 31 March 2023, excluding Appreciate Group, is expected to be around £125m (FY22: £115.1m) with accelerated revenue growth across all three business divisions. The Group anticipates that profit before tax for the financial year ended 31 March 2023 will be at the top end of the range of market expectations, excluding exceptional items and Appreciate Group impacts since completion of the acquisition, driven by the strong momentum across the business.
The Group has materially enhanced its platform and capabilities in the past year: our integrated payments platform has expanded with the addition of Open Banking and prepaid solutions to our solutions across card, Direct Debit and cash; our retailer and SME proposition is now stronger than ever, with multiple opportunities for partners to earn revenue; and our e-commerce offering has gone from strength to strength, delivering record volumes and an unparalleled in-store experience for consumers. This enhanced platform will unlock future opportunities and deliver sustainable and profitable growth for shareholders, underpinned by our business-wide partnership philosophy and intensity of execution.
The integration of Appreciate Group (now known as Love2shop) continues to progress well, opening up further revenue opportunities, expanding our capabilities further in the gifting, rewards and prepaid savings markets and enabling the creation of enterprise level solutions into new markets, combining our extensive payments and commerce solutions across the Group. These opportunities have accelerated since completion.
Trading has been positive early in the first quarter of FY24, and we look forward to updating the market further at our preliminary results for the year ended 31 March 2023 on 6 July 2023.
Sounds pretty good to me.
A note from April 2023, kindly published by Liberum, via Research Tree, estimates 58p EPS, and 41p divis for FY 3/2023, rising slightly for FY 3/2024.
At 401p per share, that’s giving a remarkable yield of just over 10%, and a PER of only 6.9x
Paul’s opinion - value investors would be negligent not to do more research on this share, when the value measures are this cheap! I can only give it a thumbs up, so green opinion from me, due to the fantastic value on offer here.
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