StockMarketWire.com - Paypoint said revenue fell 1.6% to £55.6m in the six months to 30 September.

The company revealed underlying growth of £1.8m, or a 3.2% increase excluding the £2.2m impact of the closure of the Department of Work and Pensions' Simple Payment Service (SPS) and revised Yodel commercial terms.

HIGHLIGHTS:

- Underlying net revenue growth was driven by strong performance in UK service fee revenue, up 39.8%, and in Romania, up by 33.2% to £6.8m, which was partially offset by the marginal decline of £0.3m in UK bill payment and top-up net revenue

- Network costs of £30.2m were £1.9m lower than last year of £32.1m and include a £1.7m benefit from improved VAT recovery. Excluding this, costs were slightly lower than the £32.1m for the same period last year, reflecting the ongoing improvement in operational efficiencies, partially offset by £1.1m increase in Romania driven by including Payzone overheads for six months

- Profit before tax of £25.3m was up 4% including a £1.7m benefit from improved VAT recovery related to prior years

- Net corporate cash of £0.6m reflects cash balances of £6.6m less £6m financing facility usage

- Client funds and retailer deposits at period end increased to £32.7m primarily due to recognising retailer deposits on the statement of financial position

- Continued strong cash conversion with £27.6m cash generated from profit before tax of £25.3m

- Ordinary interim dividend of 15.6p per share, an increase of 2%. Additional interim dividend of 12.2p per share. Total dividend of 27.8p per share

CEO Dominic Taylor said: "I'm pleased with the progress PayPoint has made over the past six months.

"We are executing against the roadmap and our strategic priorities outlined in May, delivering underlying net revenue growth of 3.2% and reported profit before tax growth of 4%.

"The business also continues to innovate in an evolving retail and payments environment, developing new technologies and propositions that are transforming the way our customers operate and run their businesses.

"The roll out of PayPoint One has continued at pace, expanding to 11,246 sites and with EPoS Pro now live in 4783 sites.

"We remain on target to achieve 12,400 PayPoint One sites by 31 March 2019.

"Service fee revenue from PayPoint One also grew by 39.8% in the period, contributing to the increase in underlying net revenue, with the new terminal providing tangible benefits for our retailers, enabling retailers to drive increased profitability and efficiency in their stores.

"In parcels, our new carrier partnership with ebay is now live in 2,500 sites ahead of the festive season and we remain focused on delivering at least two additional carriers in 2019.

"E-money and MultiPay volumes grew strongly and a further six clients were secured including one of the UK's fastest growing digital bank challengers, Monzo.

"In Romania, we continue to see good growth as we integrate Payzone.

"The good performance of the first half underpins the board's confidence that as PayPoint's growth drivers continue to develop there will be progression in profit before tax for the full financial year to 31 March 2019."



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