PayPoint posts rise in FY profit, says current trading resilient

Payment services group PayPoint reported a rise in full-year profit and revenue on Thursday, with growth across most business areas.

In the year to the end of March 2020, pre-tax profit increased 3.8% to £56.8m on revenue of £213.3m, up 0.8% on the year.

Revenue in the UK retail services, which now represents 34% of group net revenue, grew by £3.2m during the year, driven by increased service fees from adding more than 3,000 new PayPoint One sites.

The company said its parcel business delivered volume growth of 12.7% as its new partners, particularly eBay and Amazon, were rolled out to more sites within its network and awareness of the service developed.

Meanwhile, UK bill payments and top-ups net revenue "showed continued resilience in the face of the current decline in cash payments in the UK" and the previously announced ending of the British Gas contract.

The company proposed a final dividend of 15.6p a share, down from 23.6p in 2019.

PayPoint said current trading has demonstrated "good resilience" in the bill payments and top-ups businesses. ATMs and parcels have been more severely affected, although card payments have benefitted from increased sales in the convenience sector.

Chief executive Nick Wiles said: "The Covid-19 crisis began to escalate late into our financial year with limited financial impact in the results we are reporting. We took swift action across our business in response to the unfolding crisis.

"The core characteristics of the business remain unchanged, with a strong balance sheet, clear business model, a broad and resilient earnings’ base with the opportunity to use technology to adapt our business model and strong cash generation which supports the payment of a dividend."