Paypoint interim profits rise by less than expected

Payments systems provider Paypoint saw its pre-tax profit rise 5.5% to £22.47m in the six months to the end of September, less than analysts expected as warmer weather led to reduced energy top-up volumes.

The FTSE 250-listed company said its Collect+ joint venture grew steadily in the first six months of the year, while Romanian bill payment transactions grew 53.0% including contribution from new road tax contract.

Revenue for the first half of the year grew 2.1% to 104.3m, while net revenue rose 7% to £57.9m and earnings per share were 8% higher than in the corresponding period in 2013 to 26p.

However, UK and Irish bill and general transactions were down 1.9% due to lower domestic gas consumption resulting from warmer weather, which has continued into the second half.

"We expect our retail networks in the UK and Romania to continue to deliver profitable growth from our breadth of services and extensive client base,” said group’s chief executive Dominic Taylor.

"We will continue to invest in network expansion, innovative retail technology and new services to improve retail network quality further. We anticipate that this will enhance our competitive advantage and increase retail yield.

The firm added that since the end of the period, trading had been in line with expectations, and it had declared an interim dividend of 12.4p per share, 8.8% from last year.

Broker Numis said it anticipated either reducing its full year forecasts slightly or at best holding them flat due to transaction volumes being lower than it expected in most parts of the group.

Paypoint shares rose 1.01% to 954.54p at 08:48 on Thursday.