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PayPoint has posted a near 22% jump in underlying profits following strong revenue growth in its full financial year, helped by the acquisition of Love2shop.
The payments technology specialist saw net revenues rise by 40.4% in the year to 31 March to £181m, with the acquisition of Love2shop contributing an increase of £47.9m having only contributed one month of revenues in the previous year.
Revenue from the PayPoint segment increased by £9.7m to £169.8m, predominantly driven by the growth in e-commerce, with parcel transactions exceeding 100 million in the year, partially offset by the cash payments decline in payments & banking.
Shopping divisional net revenue increased by 3.9% to £64.4m as its UK retail network increased to 29,149 sites from 28,478, with 70% in independent retailer partners and 30% in multiple retail groups.
E-commerce divisional net revenue increased strongly by 61.6% to £11.8m, driven by a record year for Collect+ as parcel transactions grew strongly by 77.5% to 100.1 million.
However, total costs also increased by £41.2m to £119.3m due to the £37.2m additional costs from a full year of Love2shop and increased transactional costs.
The underlying profit before tax for the group increased by 21.5% to £61.7m, while statutory profit before tax was up 13.1% to £48.2m.
PayPoint said consumer behaviour since year end remained “subdued”, reflecting continued tighter family budgets and a generally flat economy.
However, it expects that this consumer outlook will improve during the course of the year.
The group also announced a three-year share buyback programme, commencing with at least £20m over the next 12 months, which it said would “enhance shareholder returns and is reflective of our long-term confidence in the business and our underlying cash flow”.
CEO Nick Wiles commented: “This has been another year of progress for PayPoint where we have delivered a robust financial performance and made further progress towards delivering £100m EBITDA by the end of FY26. These results reflect both the resilience of our businesses and the transformation delivered over the past three years as we unlock further opportunities and growth across our four business divisions.
“Our streamlined organisational structure and cost base will support the delivery of our medium-term growth plans. Strong earnings growth and cash flow generation, combined with a sustainable dividend policy provide a robust platform for the board to propose further steps to enhance shareholder returns through a share buyback programme of at least £20m over the next 12 months, all underpinned by the delivery of further progress in the current year.”
PayPoint shares are up 2.1% to 578.8p so far this morning.
Morning update
Food and feeds distribution specialist NWF Group has issues a trading update for the year to 31 May 2024, stating ‘it is in line with expectations of a normalisation of fuels and feeds business along with a strong contribution from food.
In fuels, volumes remained ahead of the prior year, in part benefiting from increased commercial customer orders as the mild weather across the winter resulted in low demand for domestic heating oil.
However, margins continued to normalise during the second half from the abnormally elevated level experienced in the prior year, as the market continued to experience stable supply conditions and competitive pricing of diesel and gas oil given the lower demand for heating oil.
Its food business traded strongly and ahead of the prior year. Storage volumes reached a peak of just over 146,000 pallet spaces (up from 126,000 pallet spaces) which required the business to utilise overflow storage facilities efficiently, and as planned.
The customer pipeline remains strong, and the board continues to consider further growth opportunities to service this demand for its services.
Feeds volumes were behind the prior year as ideal grass growing conditions across the summer and autumn provided farmers with significant forage for the winter. This was partially mitigated by the wet winter and spring which extended the usual winter season demand into April.
Chris Belsham, CEO of NWF Group, said: “NWF has delivered a solid financial performance as it experienced more challenging conditions than in recent years, with market pricing normalising for fuels and feeds, the impact of which has continued into the new financial year.
“The investment in the new Lymedale warehouse to meet the growing customer demand in our food business has progressed in line with plan which will support the future growth of the business.
“We continue to focus on our long-term growth strategy of development through targeted acquisitions, organic investment including significant investment in new fleet and improvement initiatives, supported by our strong financial position and confidence in NWF’s potential and prospects.”
Elsewhere, agri-services group Origin Enterprises has said adverse weather and challenging in-field conditions persisted into its third quarter, resulting in a reduced spring cropping area in the UK, and delayed applications across Ireland, the UK and Europe.
Therefore, group revenue decreased by 20.7% to €1.5bn in the nine months to 31 April, reflecting a volume increase of 5.7% more than offset by significantly lower global feed and fertiliser raw materials pricing.
However, the pace of revenue decline slowed in Q3 to 9.8% reflecting improved feed and fertiliser volumes.
Crop protection volumes also showed modest improvement in the third quarter, driven primarily by Continental Europe, but pricing remained weak.
It stated: “While trading conditions have been particularly challenging through FY24, the strategic focus to diversify the group’s portfolio is demonstrating the resilience of our earnings base, as reflected in our full-year earnings guidance of 45-48 cent adjusted diluted EPS [earnings per share].”
On the markets this morning, the FTSE 100 is down 0.3% to 8,193pts.
As well as PayPoint, early risers include Naked Wines, up 2.4% to 63.4p and Domino’s Pizza Group, up 1.2% to 325.5p.
Fallers include Nichols, down 1.8% to 1,011.2p, Deliveroo, down 1.8% to 135.8p and WH Smith, down 1.3% to 1,184.1p.
Yesterday in the City
The FTSE 100 closed up 0.8% to 8,215.4pts yesterday.
The day’s risers included Glanbia, up 5% to €19.14, THG, up 4.1% to 72p, SSP Group, up 3.9% to 169p, Nichols, up 3% to 1,030p, Naked Wines, up 3% to 61.9p and Compass Group, up 2% to 2,239p.
Fallers included B&M European Value Retail, down 2.4% to 618.2p, Bakkavor, down 0.7% to 139.5p, Greencore, down 0.7% to 167.6p, Ocado, down 0.7% to 348.9p and Associated British Foods, down 0.4% to 2,506p.
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