The sale of PayPoint's (PAY) mobile and online business is taking longer than expected, as the online payment specialist received lower offers than it anticipated for the online segment. As a result, the group was forced to write off £18.4m in associated goodwill, despite the failure to agree a sale. Chief executive Dominic Taylor said the enforced accounting measure was "like having your homework marked halfway through". However, a lacklustre performance from the top-ups business and increased costs from its Collect+ joint venture meant that even without the impairment operating profits came in at £21.7m, a 2 per cent decline on the 2014 half-year.
Revenue for the group's bill and general business was flat on last year, as strong growth in Romania failed to offset lower transaction rates in the UK and Ireland. Top-up transactions also fell, reducing segmental revenues by 10 per cent to £32.5m. The group's Collect+ joint venture made a loss of £0.8m, as higher costs took their toll. There were some brighter spots for PayPoint - its retail services business grew transactions by more than a quarter, bumping up revenues by 14 per cent.
Broker Cannacord Genuity expects adjusted EPS of 59.7p for the March 2016 year-end, up from 57.4p in 2015.
PAYPOINT (PAY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 923p | MARKET VALUE: | £628m | |
| TOUCH: | 923-935p | 12-MONTH HIGH: | 1,111p | LOW: 780p |
| DIVIDEND YIELD: | 4.4% | PE RATIO: | 31 | |
| NET ASSET VALUE: | 141p | NET CASH: | £46.1m | |
| Half-year to 30 Sept | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 104 | 22.5 | 26.1 | 12.4 |
| 2015 | 103 | 3.2 | -1.9 | 14.2 |
| % change | -1 | -86 | - | +15 |
Ex-div: 3 Dec Payment: 17 Dec | ||||
