Friday 22 November 2013

Paypoint interims


Provides clients with specialist consumer payment transaction processing and settlement across a wide variety of markets: (energy pre and post-payment, telecoms, housing, water, transport, e-commerce, parking and gaming) through its retail networks, internet and mobile phone channels. I have a holding in my income portfolio (epic code: PAY).



Paypoint announced their interim results to 30 September yesterday with revenues up just 0.4% to £102.2m.  Transaction volumes were up 2.1% to 351.9m and the value of transactions up 4.1% to £6.9bn.  These show a decline from the growth historically experienced mainly due to the expected decline in Top-ups revenue.  Transaction and revenue performance is shown in the table below, compared to last year's numbers:

Click on table to enlarge
 

Operating profit improved by 10.9% to £20.9m benefitting from a delay of IT project costs into the second half of the year.  EPS improved by 18.8% to 24p and an interim dividend was declared of 11.4p up 11.8% on last year.

Free cash flow was £6.6m for the half year compared to £8.6m last year.  Net cash stood at £23.5m, compared to £46.6m at the beginning of the year after paying out £24.8m in dividends, which included special dividends of £10.2m and share based payments of £5.3m.

Commenting on the outlook management stated "...Trading is in line with the company's expectations taking into account moving expenditure into the second half of the financial year, which has benefitted our first half results..."

Paypoint is a highly cash generative business and I would expect the continuation of inflation beating increases in the dividend pay-out, along with the occasional special dividend. 

1 comment:

  1. Hi Jeff,

    Yet another overlap in holdings!

    I picked up this one a couple of years back at around £5 having read some comments on Motley Fool boards.

    Earlier this year I decided to offload at just under £10 as I was concerned about the excessive (imo) payments and perks to directors combined with a flattening of revenues and of course the reducing yield. In any event, I was happy with my return over such a short period and maybe felt it could not continue!

    I see it is now on a p/e of around 23 and also there is increasing competition.

    I think Neil Woodford is a fan and probably still hold a small stake via my Edinburgh IT.

    As ever, good luck with this one - all your recent updates appear to be having a good run!

    ReplyDelete