Paypoint says first quarter trading in line with expectations

Paypoint said on Thursday trading for the first quarter remains in line with its expectations with revenue up 3% to £51m.

In a trading update for the first three months of the fiscal year, the payment services company reported a 1% increase in transactions to 172.8m. The number excludes transactions for the online payments business, which was sold on 8 January 2016.

Growth was supported by an 11.7% increase in retail services transactions in the UK and Ireland, including ATMs, debit and credit cards, parcels, money transfers and mobile phone SIM cards.

It was offset by a 17.3% decrease in top-ups.

The number of UK and Irish retail sites at 30 June was 28,896, down 191 sites since the year end, due to natural churn and the decision to halt the roll-out of sites pending the introduction of the new PayPoint One terminal.

In the mobile payments business, transactions jumped 35.1% to 15.5m, compared to 11.5m last year, mainly as a result of additional volumes from existing clients. The sale of the business is ongoing, the company said.

The group maintained a “strong balance sheet” with net cash at 30 June of £74m, compared to £81m at 31 March. The final dividend of £19m is due for payment on Friday, subject to approval at the annual general meeting later.

Gross proceeds from the sale of the online payments business of £14m, will also be paid on Friday.

“We expect to distribute the sale proceeds of the mobile payments business, when sold,” the company said.

“We will also pay the first part of the £25m special annual dividend announced in the last year's results, which will amount to £8.3m with the interim dividend in December this year.”

Shares rose 0.83% to 968p at 1010 BST.