Paypoint finals

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 final results on Thursday.  Revenue was up 1.7% to £212.2m and profit before tax up 11.5% to £46.0m. Diluted EPS was up 16.1% to 52.6p and the final dividend increased by a substantial 18.3% to 23.9p, making 35.3p for the full year which was up 16.1% and is covered 1.5x.  This follows on from last year when a 15p special dividend was declared, adding to the total  normal dividend of 30.4p in that year.

 

Total transactions increased by 3.9% to 767.5m, with mobile and online transactions up strongly by 15.9% to 132.2m. 

 

Their Collect+ joint venture is now profitable and added £892k to profits in the year.  Collect+ Parcel transactions rose 76.4% to 13.6 million and revenue was up 92%.

 

Free cash flow was again strong at £34.3m up 12.5% on last year and net cash ended up at £41.6m (including £6.5m of client cash) after a £10.2m payment for the special dividend, compared to £46.6m (including £7.0m of client cash) last year. 

 

Management state that for the current financial year, trading is in line with their expectations.  Although at 1055p Paypoint looks to be fully valued at 20x 2014 earnings and 17x expected 2016 earnings, it does come with an excellent dividend paying pedigree, returning 152.4p to shareholders over the last 5 years, growing the normal dividend at almost 15% pa. and still comes with a prospective yield of 3.5%.