PayPoint plc · LSE:PAY
PayPoint — FY2020 Earnings Presentation
25 slides from PayPoint's earnings presentation, May 28, 2020
Slide 1: Results for the Year Ended 31 March 2020
Nick Wiles, Chief Executive Rachel Kentleton, Finance Director 28 May 2020 Results for the Year Ended 31 March 2020
Slide 2: Agenda
Agenda – 28 May 2020 2 1 Introduction 2 Covid-19 3 Financial review 4 Operational review 5 Summary & Outlook 6 Q&A Results for the year ended 31 March 2020
Slide 3: Introduction
Introduction 3 Financial Operational Strategic • Net revenue of £120.7m, up by • 16,098 PayPoint One sites: • Sustain business and support 3.5%; growth achieved across all Original 15,800 target exceeded; client and retailer network divisions revised 16,500 target achieved during crisis in February
Slide 4: Covid-19: Minimised disruption through a focused approach
Covid-19: Minimised disruption through a focused approach 4 Tight Retailer Retailer Our Client operational network support and people support and financial management engagement control Longer term review of working practices Results for the year ended 31 March 2020
Slide 5: Financial review
Financial review
Slide 6: Financial results
Financial results 6 Year ended 31 March 2020 2019 % £m £m change Gross revenue 213.3 211.6 0.8% Net revenue 120.7 116.6 3.5% Third party and people costs1 (54.2) (52.9) 2.5% EBITDA 66.5 63.7 4.4% Depreciation and amortisation (9.5) (9.8) (3.1%) Net financing costs (0.2) (0.1) 18.8% Profit before tax
Slide 7: Profit before tax growth
Profit before tax growth 7 £57m +7.9% £0.6m £2.1m £0.7m (£1.4m) £54m (£1.2m) £1.4m (£0.7m) £3.9m £56.8m (£2.4m) £55.5m £54.8m £54.7m £54.7m £51m £53.8m £53.4m £53.4m £50.7m £50.7m £48m PBT before Yodel Prior year Underlying UK retail UK bill Deferred Romania Cost Deferred PBT before Variable pay Rep
Slide 8: Net revenue up 3.5%
Net revenue up 3.5% 8 Year ended 31 March 2020 2019 % £m £m Change UK bill payments and top-ups 65.1 64.9 0.3% - UK bill payments (Excl MultiPay) 43.8 45.0 (2.7%) - Deferred revenue recognition (IFRS15) 0.7 (0.7) n.m - MultiPay 4.4 3.5 25.7% - UK top-ups (Excl eMoney) 9.3 11.3 (17.7%) - UK eMoney 6.
Slide 9: Full year costs
Full year costs 9 £62.8m total £63.9m total Third party costs 20192 Third party costs 20201 costs D&A costs D&A £20.9m £9.5m £20.6m £9.8m People People £32.1m £33.8m People D&A Third party costs People D&A Third party costs £m 66 £0.5m £1.4m £2.4m (£2.6m) £1.5m 63 £65.5m £66.0m £65.2m £64.1m £62.8m
Slide 10: Setting up for success in 2020/21 - improvement in H2 costs
Setting up for success in 2020/21 - improvement in H2 costs 10 £m £0.7m £0.1m (£2.0m) £0.9m 32 £0.5m £33.3m £32.6m £32.7m £32.8m £31.8m 29 H2 Costs 2019 VAT (one-off) Underlying costs Cost savings Investment Deferred revenue Other (inc inflation H2 Underlying costs 2019 cost impact (IFRS15) & D&A) 2
Slide 11: Strong cash generation
Strong cash generation 11 Year ended 31 March 2020 2019 £m £m Profit before tax 56.8 54.7 Exceptional items - (0.9) Depreciation and amortisation 9.5 9.8 VAT and other non-cash items 0.4 (2.3) Share based payments / other (0.4) 1.1 Working capital (Corporate) 0.1 0.4 Cash generation 66.4 62.8 Tax pa
Slide 12: Balance sheet remains strong
Balance sheet remains strong 12 Mar Mar 2020 2019 £m £m Goodwill 11.9 11.6 Other intangible assets 17.3 15.9 Property, plant & equipment 24.8 26.7 Cash 58.0 3.5 Revolving financing facility (70.0) - Net debt/(cash) (12.0) 3.5 Cash held as client funds and retailer deposits 35.8 34.0 Liability client
Slide 13: Liquidity and cashflow
Liquidity and cashflow 13 Scenario planning: Actions: • Base - Trading at last two weeks of April Costs: levels for 3 months then a gradual • Cost savings of £1.5 million made recovery • CapEx of £6 million under review • Continuing to review all areas of the • Second wave - Trading at last two week
Slide 14: Capital allocation
Capital allocation 14 Financial year Investment Sustainable dividend Investment to deliver growth Progressive ordinary dividend cover of and long-term value 1.2 to 1.5 times Capex £13.4m 1.4x 17/18 Interim 15.3p £2.5m Final 30.6p Acquisition Payzone Romania Acquisition Capex £10.9m 1.4x(2) 18/19 Int
Slide 15: Operational review
Operational review Two priorities: 1. Sustain business and support client and retailer network during crisis 2. Strengthen and invest in the business to underpin the strategic priorities
Slide 16: How we are running the business trading through the crisis
How we are running the business trading through the crisis 16 Focus area Key actions Our people Remote working Wellbeing support No government support Performance Weekly trading Action follow up and Action identification framework review assessment Network Monitoring Data analytics Site recovery Ret
Slide 17: What we are seeing in terms of trends
What we are seeing in terms of trends 17 1 - 17 April 18 April - 17 Full year 19/20 vs Service FY20/21 vs May FY20/21 18/19 FY19/20 vs FY19/20 Bill payment transactions (0.9)% (31.5)% (24.8)% 1 (incl MultiPay) Top-up transactions (11.2)% (20.1)% (19.0)% Significance of ATM transactions (4.1)% (39.9)
Slide 18: Operational review
Operational review Two priorities: 1. Sustain business and support client and retailer network during crisis 2. Strengthen and invest in the business to underpin the strategic priorities
Slide 19: Organisational change
Organisational change 19 Executive Board Cultural Head of Strategic Retail Services Client Services change Partners and Director Director Products - Parcels Delivery of Maintain Multi-carrier products and leadership in bill parcel services payments proposition Management of Grow omni- Customer Strea
Slide 20: Embed PayPoint at the heart of Convenience Retail
PayPoint at the heart of convenience – good progress 20 1. Embed PayPoint at the heart of Convenience Retail Our offering 29 Feb 20 31 Mar 20 31 Mar 19 Increased footfall for retailers – average basket spend £7.58 (vs. £6.50 average1) Sites 16,514 16,098 12,881 £37.2m paid in commissions annuall
Slide 21: Become the definitive parcel solution
Parcels – new partners delivering 21 2. Become the definitive parcel solution Our offering Market is c2,400m parcels p.a Leading pick-up and drop-off network; over 7,000 Collect+ sites Strong customer experience TrustPilot 4.6/5 Recognised partners: eBay, Amazon, Yodel, Fedex Send 400m Rest of
Slide 22: Bill Payments UK – leading network and service
Bill Payments UK – leading network and service 22 3. Sustain leadership in ‘pay as you go’ OTC and grow digital Bill Payments Our offering MultiPay transaction growth Largest network of its kind, coverage of 99.5% and 98.3% of urban (within one mile) and rural (within five miles) 32.9 populations
Slide 23: Romania – continued growth
Romania – continued growth 23 3. Sustain leadership in ‘pay as you go’ OTC and grow digital Bill Payments Net revenue year ended 31 Our offering 2020 2019 % change March(£m) • Leading network with over 19,000 sites Bill payments 9.6 8.8 9.9% • 74% Brand awareness Top-ups 4.0 3.9 3.2% • 32%1 Bill pay
Slide 24: Summary
Summary 24 • A resilient and clear business model • Adapt our technology and organisation to underpin delivery • Strong cash generation and balance sheet • Returns to shareholders Results for the year ended 31 March 2020
Slide 25: Outlook
Outlook 25 At this early stage in the year we are not in a position to predict the full nature, extent and duration of the financial impact of Covid-19 on the business and as a result there is a broad range of potential profit outcomes for both the current year and further into the future. The core