Thursday, 24 July 2014

Paypoint IMS



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 issued their first quarter IMS yesterday stating that overall transactions processed for the quarter were 189.3m, up 5% and revenues of £53m were up 4% on last year.
 
UK and Irish bill and general transactions were down 4% on last year due to lower gas consumption. Retail services transactions were up 29% on last year, but mobile top-ups continue to decrease as a result of the decline in the prepaid mobile sector, although other top-ups are growing. UK and Irish retail sites at 30 June numbered 27,705 and were up 463 since the financial year end.
 
In Romania, profitable growth continues and the company has processed 12.3m bill payments in the quarter, up 65% on last year. 
 
Collect+ volumes increased by 43% to over 4.0m transactions in the period, but costs have increased and there has been a small decline in Collect+ sites by 67 to 5,515.
 
Mobile and Online transactions increased by 14% to 36.1m with mobile transactions showing the biggest increase up 45% and online transactions up 5%.
 
Net cash at 30 June was £34m, compared to £35m at 31 March 2014, but of course the £16m final dividend is due today.
 
Management mention that they have increased development, marketing and IT spend in the first half, the benefits of which are expected in the second half of the year and therefore, profit growth will be lower than net revenue growth in the first half.
 
So a few negative events to consider here - Collect+ costs increasing and a reduction in sites and reduced profit growth for the Group at the half-year, due to increased costs.
 
Alongside a few positive events - Romanian profitable growth, substantial volume growth in Collect+ and Mobile transactions.

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