Paypoint enjoys strong year thanks to rise in bill payment transactions in Romania

Payment solutions group Paypoint said on Thursday its retail networks performed well during the full-year, with revenues and profits rising.

The company reported a 7.7% increase in pre-tax profits to £49.6m on revenues up 3% to £218.5m, driven by strong bill payment transactions in Romania.

The UK and Ireland business saw transaction growth of 28.8% during the year as the company focused on retail services, but suffered a decline of 0.7% in prepaid energy transactions due to a reduction of domestic gas consumption.

In Romania, bill payment transactions grew 36.8% as Paypoint increased its market share and added new clients and new retail services.

As a result, the group increased its final dividend by 9.2% to 26.1p.

Furthermore, it added it is selling its parking and online payment processing companies in order to focus on multi-channel payments and services.

Chairman Nick Wiles said: "The board is excited by the long term potential for profitable growth and development as we capitalise on our competitive advantages and market opportunities."

Numis analysts noted that the core business is now a "low growth cash cow". It also raised questions over some potential internal disagreement given the "abrupt" departure of the chariman Warren Tucker.

The broker added: "We believe management has failed to achieve the same success (as measured by return on capital) on investments made in recent years, compared to the original business."

Canaccord remained more optimistic: "We are supportive of the company's plans to use sales proceeds to expand into new markets, based on a strong retail network. We believe this focused expansion plan should accelerate growth and deliver attractive margins and reliable revenues over the long-term."

Shares were up 3.19% to 908p on Thursday at 08:30.