Paypoint Plc · LSE:PAY

Paypoint — H1 2005/06 Earnings Presentation

31 slides from Paypoint's earnings presentation, Nov 23, 2005

  1. Slide 1: Interim Results Presentation

    Strictly private and confidential Interim Results Presentation 23 November 2005

  2. Slide 2: Agenda

    Agenda ‹ Highlights and Operations Review ‹ Financial Review ‹ Summary ‹ Q&A ‹ Closing 2

  3. Slide 3: Highlights & Operations Review

    Highlights & Operations Review Dominic Taylor Chief Executive

  4. 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: Š the breadth of the consumer offer/brand Š the quality and convenience of the retail network Š technology & know

  5. 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

  6. 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

  7. 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

  8. 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

  9. 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

  10. 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

  11. 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

  12. 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

  13. 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

  14. Slide 14: Financial Review

    Financial Review George Earle Finance Director

  15. 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

  16. 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

  17. 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

  18. 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

  19. 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

  20. 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

  21. 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

  22. 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

  23. 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

  24. 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….

  25. Slide 25: Q&A

    Q&A

  26. Slide 26: Materials to support the consumer transaction

    Appendix 1 Materials to support the consumer transaction

  27. Slide 27: Client payment media

    Appendix 1 Client payment media

  28. Slide 28: Retailer external signage

    Appendix 1 Retailer external signage

  29. Slide 29: POS merchandising

    Appendix 1 POS merchandising

  30. Slide 30: Terminals and ATMs

    Appendix 1 Terminals and ATMs

  31. Slide 31: Terminal receipts

    Appendix 1 Terminal receipts E-TopUp Congestion Charging E Voucher Utility Payment Transport Ticketing

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