PayPoint plc: Trading update for the three months ended 31 December 2020
PayPoint plc
Trading update for the three months ended 31 December 2020121 January 2021HIGHLIGHTSContinued step change in strategic deliveryTangible progress in driving forward incremental growth opportunities in client and retail services – new business sector wins in digital payments, major client renewals with diversification to digital services and enhancing our retailer proposition to increase footfall, revenue opportunities and engagement with our retailer partnersIntegration planning on track for Handepay/Merchant Rentals, with the acquisition expected to complete in early 2021 (subject to regulatory approval)Successful completion of i-movo acquisition at the end of November 2020, enhancing our EPOS and terminal services proposition and creating new opportunities with Newspaper, Government, FMCG, Utilities and banking clientsDisposal of Romanian business on track for end of March at significant profit, underpinning UK-focused strategyRobust performance in line with expectationsUnderlying group net revenue from continuing operations2 decreased by £3.0 million (10.8%) to £24.5 million (2020: £27.5 million), which included the cessation of the British Gas contract (£1.7 million)UK retail services net revenue decreased by 1.4% to £10.6 million, with increases in card payment transactions and service fees from PayPoint One offset by the £0.4 million impact of compensation paid to retail partners following a card services outage on 14 November 2020 and reduced ATM volumesStrong card payment volumes maintained, growing significantly by 46.2% year on year to 49.7 million transactionsUK parcels transactions increased by 6.6%, delivering a resilient performance despite Covid-19 restrictionsUK retail network increased to 27,758 sites (31 March 2020: 26,829), with minimal impact from ongoing Covid-19 restrictionsUK bill payments net revenue decreased by 33.5% to £9.5 million. Excluding the British Gas impact, net revenue decreased by 24.3% and transactions decreased by 23.5%, primarily due to consumers making fewer, larger payments during the Covid-19 periodContinued digital payments growth, with eMoney transactions increasing by 25.8% and net revenue by 22.2%Strongly positioned to leverage structural trends accelerated by Covid-19PayPoint is well placed to take advantage of the continued shift from cash to digital payments, the growing demand for online shopping fulfilment and the increase in shopping localDigital payments continue to grow strongly, with good demand from local authorities for our Cash Out service, particularly supporting them with the distribution of school meal vouchers and Covid-19 related hardship fundsEnhancement of our send proposition via the Collect+ website is progressing well with a pilot scheduled for Q4, building on the investment in Zebra thermal printers earlier in the year which is already yielding an improved customer experienceDuring the current lockdown in January 2021, over three quarters of our field sales team have been refocused to engage with our PayPoint One retailer partners, delivering training and support to maximise the value of the technology in their stores, helping them run their businesses more efficiently and understand sales trends from increased footfall as customers continue to shop local during the restrictionsNick Wiles, Chief Executive of PayPoint plc, said:
