PayPoint expects 'more modest' FY profit growth
By Iain Gilbert
Date: Thursday 23 Jan 2020
(Sharecast News) - Payment technologies provider PayPoint said on Thursday that underlying net revenues had improved in the final quarter of 2019, but cautioned that warmer-than-expected December weather hit transactions in its UK bill payments unit.
PayPoint posted a 4.2% increase in group underlying net revenues to £32.7m during the quarter as the firm pulled in £3.5m of service fees, driven by the roll-out of PayPoint One to more than 16,000 sites.
UK parcel volumes grew 12.6% to 7.6m on the back of a solid performance over the peak period and the benefit of new parcel partnerships, while net revenues from UK bill payments increased 2.2%.
However, PayPoint warned that warmer weather over the festive season continued to affect energy transactions and parcel volume growth remained "towards the lower end" of expectations but highlighted that actions to deliver cost efficiencies and enhance customer service delivery were "effective and ongoing".
Overall, PayPoint was confident that there would be a progression in profit before tax and exceptional items for the year ending 31 March 2020, although it was now "likely to be at a more modest rate than previously expected".
Chairman Nick Wiles said: "Overall our results for the quarter reflect resilience in our bill payments business, growth in our parcels activities during the important peak parcels period and continued progress in the rollout of PayPoint One and our retail services activities."
As of 0910 GMT, PayPoint shares had slipped 6.71% to 973.97p.
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