Consumers might be hard up, but bills still have to be paid and PayPoint (PAY) is benefiting from a growing trend towards paying bills electronically. In fact, transactions processed in the period grew 18 per cent year on year to 345m, which helped push operating profits up 13 per cent to £18.9m. Shareholders were also rewarded with a hefty dividend hike.
The bills and general payments operation saw transactions grow by 15.7 per cent to 191m, boosted by a 19 per cent jump in energy bill prepayments. The retail services business, which includes cash machine transactions and SIM card sales, saw transactions grow 24.4 per cent to 36.2m. Furthermore, the group's parcels service became profitable in the first half - ahead of market expectations.
Operating costs rose 19.4 per cent to £23.1m, although this included expenses associated with the rollout of the group's simple payment service (SPS). This is essentially a replacement for Giro payments and will allow benefit claimants to receive cash in ordinary shops instead of having to queue at post offices. Outside the UK, the Romanian operation continued to grow strongly, with bill payment transactions rising 38 per cent in the period to over 11.6m.
Broker Numis Securities expects pre-tax profit of £41.7m for 2013, giving EPS of 44.8p (from £37.2m and 39.8p in 2012).
| PAYPOINT (PAY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 848p | MARKET VALUE: | £576m | |
| TOUCH: | 845-849p | 12-MONTH HIGH: | 899p | LOW: 487p |
| DIVIDEND YIELD: | 3.3% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 137p* | NET CASH: | £31m** | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 95.9 | 15.8 | 16.7 | 8.70 |
| 2012 | 102 | 18.3 | 20.2 | 10.2 |
| % change | +6 | +16 | +21 | +17 |
Ex-div: 5 Dec Payment: 20 Dec *Includes intangible assets of £59m, or 87p a share **Includes client cash of £5.4m | ||||
