Paypoint Plc · LSE:PAY
Paypoint — H1 2005/06 Earnings Presentation
31 slides from Paypoint's earnings presentation, Nov 23, 2005
Slide 1: Interim Results Presentation
Strictly private and confidential Interim Results Presentation 23 November 2005
Slide 2: Agenda
Agenda Highlights and Operations Review Financial Review Summary Q&A Closing 2
Slide 3: Highlights & Operations Review
Highlights & Operations Review Dominic Taylor Chief Executive
Slide 4: PayPoint overview
PayPoint overview Branded cash payment collection network Founded in 1996 by client investors; listed in September 2004 Strategy based on differentiation from competitors through: the breadth of the consumer offer/brand the quality and convenience of the retail network technology & know
Slide 5: PayPoint highlights
PayPoint highlights For the six months ended 30 September each period Net revenue Operating profit Operating margin 25 10 60% 20 40% £ m illio n s £ m illio n s 15 5 20% 10 0% 5 - - -20% 01/02 02/03 03/04 04/05 05/06 01/02 02/03 03/04 04/05 05/06 -5 -40% 01/02 02/03 03/04 04/05 05/06 CGR 40% 65 5
Slide 6: PayPoint highlights
PayPoint highlights For the six months ended 30 September each period Transaction volume Transaction value Sites with terminals 150 2,000 16,000 14,000 1,500 12,000 100 10,000 £ Millions M illio n s 1,000 8,000 50 6,000 500 4,000 2,000 - - - 01/02 02/03 03/04 04/05 05/06 01/02 02/03 03/04 04/05 05/0
Slide 7: Operations review
Operations review For the six months ended 30 September each period Transaction volumes by sector 160 ATM 140 Mobile 120 General Millions 100 80 60 40 20 - 2001 2002 2003 2004 2005 7
Slide 8: Sector and market review: Bill and general payment
Sector and market review Bill and general payment General growth across all sectors; Electricity and gas have benefited from an increase in volume as a result of domestic prices increasing, resulting in consumers topping up more frequently. Bill payment growth continues with more to come For t
Slide 9: Sector and market review: new developments
Sector and market review Bill and general payments – new developments Emerging transport sector: – Exclusive retail channel for Greater Manchester travel cards, rolling out from Feb ’06 – FirstGroup, starting in York, from Dec ’05 – Blackpool (Jan ’06) with other cities to come Western Union mon
Slide 10: Sector and market review: Mobile
Sector and market review Mobile Paper top ups substantially removed – therefore reduction in the rate of market growth. PayPoint continued growth – from new terminal sites and epos Slower than expected migration from the terminal to retailers’ own till systems gives a benefit to mobile margins
Slide 11: Sector and market review: ATMs
Sector and market review ATMs ATM transactions Other 1,201 Surcharge self fill model 200,000 Withdraw als 1,200 160,000 Live ATM's 957 1,000 120,000 651 800 No. ATM's Rolled out at 50+ new sites 600 80,000 per month since Mar 05 358 400 40,000 200 51 0 0 Proactive decommissions of Sep-03 Mar-0
Slide 12: Retail Review
Retail Review 14,000 PayPoint terminal outlets, complimented by 4,880 Epos sites (of which 2,000 also have a PayPoint terminal) Of the 3,000 new terminal sites that we targeted to have live by March 06, we have 2,000 live with the remaining 1,000 due to be installed within the next 6 months. D
Slide 13: New terminal (T2)
New terminal (T2) 10,150 T2s at 22 November 2005 - will be substantially rolled out by Apr 06 The most advanced retail terminal of its type Provides for: – faster and better communication links – lower cost of operation, 2.5 x more reliable than T1 – contactless smart card capability – touch s
Slide 14: Financial Review
Financial Review George Earle Finance Director
Slide 15: Strong, volume driven top line growth and margin enhancement
Strong, volume driven top line growth and margin enhancement £000’s H1 05/06 H1 04/05 % increase Revenue 54,113 39,949 35% Cost of sales 37,374 27,862 34% Gross profit 16,739 12,087 38% Margin 31% 30% 15
Slide 16: Growth in agents' commissions and net revenue
Growth in agents’ commissions and net revenue H1 05/06 H1 04/05 % increase £000’s Revenue 54,113 39,949 35% Cost of sales 37,374 27,862 34% Gross profit 16,739 12,087 38% Margin 31% 30% Revenue ~ 30 September £60m Revenue £50m CGR 57% £40m Net revenue £30m CGR 40% £20m £10m £0m 2001 2002 2003 2004 2
Slide 17: Volume and commission growth
Volume and commission growth H1 05/06 H1 04/05 % increase £000’s Revenue 54,113 39,949 35% Cost of sales 37,374 27,862 34% Gross profit 16,739 12,087 38% Margin 31% 30% Revenue £000’s H1 04/05 39,949 Commissions paid 6,160 Volume 4,116 Other Mix/price 253 Gross up Irish ETU 3,203 Other 432 H1 05/06
Slide 18: Gross margin improved
Gross margin improved £000’s H1 05/06 H1 04/05 % increase Revenue 54,113 39,949 35% Cost of sales 37,374 27,862 34% Gross profit 16,739 12,087 38% Margin 31% 30% Cost Costofofsales sales H1 H105/06 05/06 H1 H104/05 04/05 £000’s £000’s £000’s £000’s Commissions Commissionspaid paid 29,073 29,073 22,9
Slide 19: Operational gearing improves operating margins
Operational gearing improves operating margins £000’s H1 05/06 H1 04/05 % increase Net revenue 21,331 16,530 29% Operating profit* 8,187 4,665 75% Operating margin 38% 28% 10ppts Interest 254 219 Profit before tax* 8,441 4,884 73% Tax (1,315) (855) Profit after tax* 7,126 4,029 77% * Before exceptio
Slide 20: Operating costs increase small compared to gross profit increase
Operating costs increase small compared to gross profit increase £000’s H1 05/06 H1 04/05 % increase Net revenue 21,331 16,530 29% Operating profit* 8,187 4,665 75% Interest 254 219 Profit before tax* 8,441 4,884 73% Tax (1,315) (855) Profit after tax* 7,126 4,029 77% Operating profit £000’s H1 04/0
Slide 21: Strong cash flow
Strong cash flow Six months to 30 September 2005 2004 £000’s £000’s EBITDA* 9,234 5,861 Change in working capital# 850 962 Operating cash flow 10,084 6,823 Capital expenditure (3,113) (1,179) Interest received 254 219 Cash flow before dividends 7,225 5,863 * Before exceptional items # Working capita
Slide 22: Net cash of £22m
Net cash of £22m Six months to 30 September 2005 £000’s Net cash at start (including client cash* £11.1 million) 25,950 Cash inflow 7,225 Reduction in client cash (6,942) Dividends (3,473) Net cash at end (including client cash* £4.1 million) 22,760 * Client cash is cash to which PayPoint has legal
Slide 23: Positioned for growth
Positioned for growth New terminal will allow for continuing development of volume, products and services The unique range of products and services continues to widen Strong ongoing retail demand for the PayPoint proposition Reinforced management team in place over the past 3 months 23
Slide 24: Summary & outlook
Summary & outlook Strong half year growth, driven through successful implementation of strategy – volumes driving top line growth – operational gearing delivering margins – reinforced by continued service differentiation against competitors Volume growth expected to continue in the second half….
Slide 25: Q&A
Q&A
Slide 26: Materials to support the consumer transaction
Appendix 1 Materials to support the consumer transaction
Slide 27: Client payment media
Appendix 1 Client payment media
Slide 28: Retailer external signage
Appendix 1 Retailer external signage
Slide 29: POS merchandising
Appendix 1 POS merchandising
Slide 30: Terminals and ATMs
Appendix 1 Terminals and ATMs
Slide 31: Terminal receipts
Appendix 1 Terminal receipts E-TopUp Congestion Charging E Voucher Utility Payment Transport Ticketing