PayPoint's (PAY) management outlined its four-point strategy for growth in the group's 2018 annual report. A year on, they can be satisfied with progress, but a few issues still hung over the group's numbers for the year to March 2019.
The success of PayPoint One – the group's touchscreen retailer terminal – is helping the group to penetrate the convenience retail market. By the end of March, it had installed in 12,881 sites, comfortably ahead of its 12,400 target. The group has since grown that number to 13,248 locations.
Lingering effects from the contract renegotiation with Yodel placed a £1m burden on the group in the year, but the expansion of the parcel business justifies the cost. Free to sign up new carriers, PayPoint secured four new delivery partnerships, bringing its total to five.
Alongside Yodel-related costs, the Department of Work and Pensions closure of the Simple Payments Service – for which PayPoint was the provider – resulted in a £4.2m hit to sales. As a result, net revenues declined 2.5 per cent.
Plans to capture more of the "pay-as-you-go" and bill payments markets proceeded well, with net revenue per transaction up 4.7 per cent. What's more, 21 new clients launched with the group in the year, including big names such as challenger bank Monzo and utility provider Anglian Water.
Consensus forecasts expect adjusted EPS of 66.9p for March 2020, up from 63.7p in FY2019.
| PAYPOINT (PAY) | ||||
| ORD PRICE: | 1,048p | MARKET VALUE: | £ 715m | |
| TOUCH: | 1,044-1,048p | 12-MONTH HIGH: | 1,084p | LOW: 729p |
| DIVIDEND YIELD**: | 4.4% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 74p* | NET CASH: | £37.5m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 218 | 49.6 | 57.6 | 39.0 |
| 2016 | 213 | 8.2 | -3.1 | 42.4 |
| 2017 | 212 | 69.1 | 87.5 | 45.0 |
| 2018 | 214 | 52.9 | 63.0 | 45.3 |
| 2019 | 212 | 54.7 | 65.2 | 46.2 |
| % change | -1 | +3 | +3 | +2 |
| Ex-div: | 04 Jul† | |||
| Payment: | 29 Jul† | |||
| *Includes intangible assets of £27.5m, or 40p a share ** Excludes special dividend of 18.4p † Final dividend is paid in two instalments, the second of which is on 30 September, with an ex-dividend date of 5 September | ||||
