PayPoint’s (PAY) full-year results don’t offer a particularly favourable comparison with FY2017. That’s because the prior year includes contributions from PayByPhone and Drop and Collect – sold in December 2016. But it’s a brighter story in terms of continuing operations: net revenue was up 1.8 per cent, while pre-tax profits were down just 0.8 per cent. With a 6.5 per cent rise in cash generation to £65.1m, a small dividend hike and 24.5p in special cash to boot, the shares were marked up in early trading.
Within UK retail services, deployment of the ‘PayPoint One’ touch-screen retailer terminal progressed well; 8,550 sites were live at the year-end, up from 3,601, with 9,026 live by results day. Meanwhile, the Collect+ parcel service reached 7,436 stores – up from 6,167. PayPoint plans to sign a new Collect+ parcel carrier before the Christmas season.
Romania delivered an excellent performance, with net revenues up 29.8 per cent to £11.9m. Transaction volumes there rose 28.6 per cent to 96.4m, with 1.7m deriving from Payzone, acquired last October. That said, Payzone’s low margins dampened the group gross margin by 2.7 percentage points to 46.8 per cent.
Broker Liberum forecasts pre-tax profits of £53.5m and EPS of 63.5p for the year to March 2019 (from £52.6m and 62.4p in FY2018).
| PAYPOINT (PAY) | ||||
| ORD PRICE: | 1,002p | MARKET VALUE: | £683m | |
| TOUCH: | 1,000-1,002p | 12-MONTH HIGH: | 971p | LOW: 762p |
| DIVIDEND YIELD*: | 4.6% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 90p | NET CASH: | £46m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 212 | 46.0 | 52.9 | 35.30 |
| 2015 | 218 | 49.6 | 57.6 | 39 |
| 2016 | 213 | 8.2 | -3.1 | 42.40 |
| 2017 | 212 | 69.1 | 87.5 | 45.0 |
| 2018 | 214 | 52.9 | 63.0 | 45.9 |
| % change | +1 | -23 | -28 | +2 |
| Ex-div: | 21 Jun | |||
| Payment: | 30 Jul | |||
| *Excludes special dividend of 36.6p, payable on 30 Jul | ||||
