Paypoint Plc · LSE:PAY
Paypoint — H1 2019/20 Earnings Presentation
22 slides from Paypoint's earnings presentation, Nov 28, 2019
Slide 1: Results for the half year ended 30 September 2019
Nick Wiles, Executive Chairman Rachel Kentleton, Finance Director 28 November 2019
Slide 2: Introduction, Financial review, Operational review, Summary
2 1 Introduction 2 Financial review 3 Operational review 4 Summary Results for the half year ended 30 September 2019
Slide 3: Financial, Operational, Strategic highlights
3 Financial Operational Strategic • Net revenue £57.3m, up by • Fast pace and ahead of • Legacy terminal largely 3% - growth achieved target PayPoint One rollout, retired from independent across all divisions now in 15,088 sites retailer estate by 31 March • Underlying1 profit before tax • Continued
Slide 4: Financial review
Financial review
Slide 5: Half year ended 30 September income statement
5 Half year ended 30 September 2019 2018 % £m £m change Gross revenue 103.7 106.1 (2.3%) Net revenue 57.3 55.6 3.0% Other cost of revenue (8.2) (9.1) (9.1%) Administrative costs (25.0) (21.1) 18.4% Net financing costs (0.1) (0.1) (47.3%) Profit before tax 24.0 25.3 (5.2%) Tax1 (4.5) (4.8) (6.4%) Pro
Slide 6: Profit before tax bridge
6 £27m +4.0% (£0.5m) £0.5m £0.2m (£1.3m) (£1.7m) £1.5m £25.3m £24.6m £24.8m £24.0m £24.0m £23.1m £23.1m £22m PBT 2018 Yodel Prior year VAT Underlying UK retail UK bill Romania Costs PBT 2019 benefit PBT 2018 services payments and growth growth top-ups growth Results for the half year ended 30 Septem
Slide 7: Net revenue by segment
7 Half year ended 30 September 2019 2018 % £m £m Change UK bill payments and top-ups 30.1 29.9 0.7% - UK bill payments (Excl MultiPay) 20.2 19.8 3.8% - MultiPay 1.8 1.3 32.0% - UK top-ups (Excl eMoney) 4.9 6.1 (19.5%) - UK eMoney 3.2 2.7 18.7% Romania 7.3 6.8 6.2% UK retail services 19.9 18.4 8.2% -
Slide 8: Total costs bridge
8 £31.9m total £33.2m total Third party costs 20182 Third party costs 20191 costs D&A costs £12.0m £4.3m £10.6m D&A £4.6m People People £15.3m £18.3m £m People D&A Third party costs People D&A Third party costs 33 £0.4m £1.5m (£0.6m) £1.7m £32.9m £33.2m £31.9m £31.3m £31.3m £30.2m 28 Cost H1 Costs H
Slide 9: Cost efficiencies: terminal repairs, IT, Romania
9 Insourcing terminal repairs – UK (£0.8m p.a) • Improved repair quality, resulting in swaps rates being down 57% • Improved customer service experience Third party costs IT - UK (£0.4m p.a) • Retendered network communication circuits • Datacentre consolidation and reduced power consumption Romania
Slide 10: Cash flow
10 Half year ended 30 September 2019 2018 £m £m Profit before tax 24.0 25.3 Depreciation and amortisation 4.3 4.7 Share based payments / other - (1.5) Working capital (Corporate) (1.2) (0.9) Cash generation 27.1 27.6 Tax paid (10.2) (4.4) Capital and other expenditure (4.1) (3.7) Movement in facilit
Slide 11: Balance sheet
11 Sept Mar Sept 2019 2019 2018 £m £m £m Goodwill 12.0 11.6 12.4 Other intangible assets 17.0 15.9 14.5 Property, plant & equipment 26.5 26.7 27.3 Cash held as clients’ funds and retailers’ deposits 34.8 34.0 32.7 Cash 5.7 3.5 6.6 Revolving financing facility (18.0) - (6.0) Net (debt) / cash (12.3)
Slide 12: Dividends
12 • Strong cash generation of £27.1m Dividends paid (pence) • Ordinary dividend cover ratio of 1.2 to 1.5x 82.0 82.9 84.0* • Additional dividend (£125m) 36.7 36.7 36.8 first payment – Dec 2016 final payment - Dec 2021 45.3 46.2 47.2 £70.9m paid to 30 Sept 2019 2017/18 2018/19 2019/20 • Inte
Slide 13: Summary: revenue, costs and outlook
13 Revenue Costs - Growth drivers: - Continued cost vigilance - PayPoint One - VAT benefit (£2.4m) in 2018/19 not - Parcels re-occurring - MultiPay - Investment in improvement in customer - Romania service and business efficiency (c£2m) - Continued resilience in bill payments - Headwinds - £0.7m fin
Slide 14: Strategic priorities
• Embed PayPoint at the heart of convenience retail • Definitive Parcel solution • Bill payments and OTC leadership
Slide 15: Exciting opportunities for our business
15 Exciting Convenience Parcels market Bill payments opportunities for sector our business • Total sector sales • Click and Collect • Big six energy firms created by: +3%, expected to expected strong under significant reach £41.7bn by growth c12% p.a4 pressure from end of year1 challengers • Consume
Slide 16: 1. Embed PayPoint at the heart of Convenience Retail
1. Embed PayPoint at the heart of Convenience Retail 16 Our offering 30 Sep 19 30 Sep 18 Increased footfall for retailers – average basket spend £7.86 (vs. £6.38 average for those Sites 15,088 10,242 without PayPoint) EPoS Base £41.5m paid in commissions annually1 £10.25/week 7,579 4,589 Provi
Slide 17: 2. Become the definitive parcel solution
2. Become the definitive parcel solution 17 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 4.7/5 Send Strong partners: eBay, Amazon, Yodel, Fedex and 400m Rest of DHL the market 3rd party 1,700m C
Slide 18: 3. Sustain leadership in 'pay as you go' OTC and grow digital Bill Payments
3. Sustain leadership in ‘pay as you go’ OTC and grow digital Bill Payments 18 Our offering Our coverage larger than banks, Post Offices and supermarkets put together1 Average opening times 100 hour per week and open on bank holidays Excellent customer service 86%2 H1 Achievements Learnings
Slide 19: 3. Sustain leadership in 'pay as you go' OTC and grow digital Bill Payments (Romania)
3. Sustain leadership in ‘pay as you go’ OTC and grow digital Bill Payments 19 Our offering • Leading network with 19k sites1 Net revenue period ended 30 2019 2018 % change • 74% Brand awareness September (£m) • 34% Bill payments market share Bill payments 4.7 4.3 9.3% Top-ups 2.1 1.9 10.5% H1 Achie
Slide 20: Solid performance in the first half; work in progress
20 Solid performance in the first half Work in progress Outstanding PayPoint One roll out Major project delivery; CRM and achievement EPoS platform Greater intensity with key Drive efficiency and ‘right first time’ relationship management Improve the relationship Focus on operational management mana
Slide 21: Appendix
Appendix
Slide 22: How EPoS can help retailers
22 A typical store turnover is £1.2m per annum and invests £20,000 in stock There are 5 key areas where EPoS can help retailers: 1. Margin management Increasing to 20% would drive Average margin achieved in store is £3,000 per £1,000 improved margin per stock stock turn (15%) turn 2. Stock turn If