Paypoint interims

Provides clients with specialist consumer payment transaction processing and settlement across a wide variety of markets: (energy pre and post-payment, telecoms, housing, water, transport, e-commerce, parking and gaming) through its retail networks, internet and mobile phone channels. I have a holding in my income portfolio (epic code: PAY).

Paypoint announced their interim results to 30 September yesterday with revenues up just 0.4% to £102.2m.  Transaction volumes were up 2.1% to 351.9m and the value of transactions up 4.1% to £6.9bn.  These show a decline from the growth historically experienced mainly due to the expected decline in Top-ups revenue.  Transaction and revenue performance is shown in the table below, compared to last year's numbers:

Click on table to enlarge

 

Operating profit improved by 10.9% to £20.9m benefitting from a delay of IT project costs into the second half of the year.  EPS improved by 18.8% to 24p and an interim dividend was declared of 11.4p up 11.8% on last year.

Free cash flow was £6.6m for the half year compared to £8.6m last year.  Net cash stood at £23.5m, compared to £46.6m at the beginning of the year after paying out £24.8m in dividends, which included special dividends of £10.2m and share based payments of £5.3m.

Commenting on the outlook management stated "...Trading is in line with the company's expectations taking into account moving expenditure into the second half of the financial year, which has benefitted our first half results..."

Paypoint is a highly cash generative business and I would expect the continuation of inflation beating increases in the dividend pay-out, along with the occasional special dividend.