PayPoint registers drop in profits in H1 FY21
Paypoint plc (LON:PAY) today posted its financial results for the six months to end-September 2020, with revenues and profits down from a year earlier.
The company saw profit before tax from continuing operations of £16.8 million (2019: £20.7 million) down by £3.9 million due to the decrease in net revenue from continuing operations and the expected impact of the British Gas contract ended in December 2019.
Revenue from continuing operations decreased by £8.4 million to £60.7 million (2019: £69.1 million). Net revenue from continuing operations decreased by £3.9 million (7.8%) to £46.4 million (2019: £50.3 million); the prior period included £2.1 million net revenue from the British Gas contract now ended.
MultiPay net revenue increased by £0.3 million (17.7%) driven by growth from new revenue streams and an increase in transactions from other clients excluding Utilita. As expected MultiPay transactions decreased due to Utilita moving customers to their own in-house app. UK top-ups and eMoney net revenue remained stable at £8.1 million (2019: £8.1 million), transactions decreased by 13.8%. eMoney transactions increased by 15.4% which increased net revenue by £0.6 million (19.9%).
Total costs from continuing and discontinued operations amounted to £33.4 million (2019: £33.6 million), down by £0.2 million. Total costs include £1.0 million associated with the one-off acquisition and disposal costs.
Cash generation remained strong with £29.5 million (2019: £27.1 million) delivered from profit before tax from continuing and discontinued operations of £20.6 million. There was a working capital inflow of £3.4 million, of which £3.3 million will reverse next year once the HMRC VAT deferral is paid. There was also the add back for depreciation and amortisation of £4.9 million.
Net corporate debt decreased by £6.2 million to £6.1 million (2019: £12.3 million). Dividend payments were lower compared to the same period last year due to the end of the additional dividend program.
In terms of the execution of its growth strategy focused on the UK, the company noted the recently announced disposal of its Romanian business at significant profit, as well as the acquisition of Handepay Ltd/Merchant Rentals Limited (card payments) and i-movo Limited (digital vouchering) to deliver enhanced growth and opportunities in UK.