Paypoint Plc · LSE:PAY
Paypoint — FY2019 Earnings Presentation
26 slides from Paypoint's earnings presentation, May 23, 2019
Slide 1: Results for the year ended 31 March 2019
Patrick Headon, CEO Rachel Kentleton, Finance Director 23 May 2019 Results for the year ended 31 March 2019
Slide 2: PayPoint – at the heart of convenience retail
PayPoint – at the heart of convenience retail 2 • Strong market position in the growing convenience retail sector − In over 47k convenience stores in UK and Romania • Leading provider of omnichannel payments − Payments platform across digital, voice, cards, direct debit and cash − £9bn of payments p
Slide 3: Introduction
Introduction Patrick Headon, CEO
Slide 4: Our priorities for 2018/19 were...
Our priorities for 2018/19 were... 4 4 3 2 Future Grow PayPoint One 1 8,500 PayPoint One live ecosystem Launched EPoS Pro Launch new parcel and Mobile App carriers Launched MultiPay Continued strong cash- 19m transactions on flows from UK payments Mobile and Launched MultiPay and top-ups Online Sale
Slide 5: Good progress against strategic priorities
Good progress against strategic priorities 5 Activities Progress Grow PayPoint One ecosystem • PayPoint One in almost 13k sites Launch new parcel partners • eBay and three of UK largest carriers live Continued strong cash- • Transaction growth in MultiPay (+40.7%) and flows from UK payments eMoney (
Slide 6: Financial review
Financial review
Slide 7: Financial results – robust performance
Financial results – robust performance 7 Year ended 31 March (£m) 2019 2018 % change Gross revenue 211.6 213.5 (0.9%) Net revenue 116.6 119.6 (2.5%) Other costs of revenue (18.4) (19.6) (6.4%) Administration costs (44.3) (46.5) (4.7%) Net finance costs (0.1) (0.5) (69.1%) Profit before tax and excep
Slide 8: Underlying PBT up 11.3%
Underlying PBT up 11.3% 8 £55m +11.3% £2.9m £50m (£5.2m) £2.0m £1.2m (£0.9m) £53.8m £52.9m £0.9m £50.9m £48.6m £48.9m £48.9m £47.7m £45m PBT 2018 SPS & Yodel Prior year VAT UK retail UK bill Romania Cost PBT 2019 benefit services payments and growth reductions growth top-ups decline Results for the
Slide 9: Underlying net revenue up 2.0%
Underlying net revenue up 2.0% 9 Year ended 31 March (£m) 2019 2018 % change Underlying: UK bill payments and top-ups 64.9 65.8 (1.3%) Romania 13.9 11.9 16.8% UK retail services 37.1 35.9 3.2% - Service fees 10.3 7.7 33.6% - Card payments rebate 7.9 7.5 5.5% - ATMs 12.3 12.8 (3.9%) - Parcels and oth
Slide 10: Underlying costs reduced by 4.2%
Underlying costs reduced by 4.2% 10 £66.6m total £62.8m total costs 20181 costs 20192 Third party Third party costs D&A costs D&A £24.0m £9.8m £20.9m £10.5m People People £32.1m £32.1m £70m -4.2% £1.5m (£1.9m) £0.6m (£0.7m) (£1.5m) £0.9m (£0.3m) £65m £68.1m (£2.4m) £66.6m £65.6m £65.5m £65.2m £65.2m
Slide 11: Cash generation and use
Cash generation and use 11 Year ended 31 March (£m) 2019 2018 % change Profit before tax 54.7 52.9 3.3% Exceptional items (0.9) - 0.0% Depreciation and amortisation 9.8 10.5 (6.7%) SBP and other items (1.2) 1.1 (209.1%) Working capital (corporate) 0.4 3.4 (82.4%) Cash generation 62.8 67.9 (7.2%) 201
Slide 12: Balance sheet remains strong
Balance sheet remains strong 12 Year ended 31 March (£m) 2019 2018 % change Goodwill 11.6 12.2 (4.5%) Other intangible assets 15.9 13.6 16.8% Property, plant and equipment 26.7 28.0 (4.9%) Cash and cash equivalents: Corporate 3.5 18.5 (80.7%) Clients’ funds and retailers’ deposits 34.0 27.5 21.2% Wo
Slide 13: Continued strong cash returns to shareholders
Continued strong cash returns to shareholders 13 Dividends paid (pence) • Strong cash generation of £62.8m 115.2 82.0 82.9 • Ordinary dividend 59.9 − cover ratio of 1.2 to 1.5x 36.7 36.7 12.2 • Additional dividend (£125m) 43.1 45.3 46.2 − first payment – Dec 2016 2016/17 2017/18 2018/19 − final paym
Slide 14: Operational review
Operational review - Grow PayPoint One ecosystem - Definitive Parcel solution - Bill payments and OTC leadership
Slide 15: 1. Embed PayPoint at the heart of Convenience Retail
1. Embed PayPoint at the heart of Convenience Retail Grow PayPoint One ecosystem 15 PayPoint One Sites Progress in 2018/19 31 Mar 19 31 Mar 18 – Three quarters of our independent retailers Total 12,881 8,550 now migrated – Delivered 500 sites more than the 12.4k target Base (£10pw) 6,337 3,718 EPoS
Slide 16: 2. Become the definitive parcel solution
2. Become the definitive parcel solution Definitive parcel proposition 16 Parcel market (annually 2.4bn parcels) Progress in 2018/19 0.1 ‒ eBay live in c2.5k stores 4% ‒ Three of UK’s largest carriers signed up 0.2 8% Innovation and service delivery PayPoint’s 1.7 addressable ‒ Improving service del
Slide 17: 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 Bill payments and OTC leadership 17 Progress in 2018/19 ‒ 21 new clients set live, 250 in total ‒ Bill payments: net revenue per txn up 5.5% ‒ MultiPay: strong txn growth of over 40% ‒ eMoney: txn growth of 11.4% Innovation
Slide 18: Romania - integrate Payzone and grow business
3. Sustain leadership in ‘pay as you go’ OTC and grow digital Bill Payments Romania - integrate Payzone and grow business 18 Progress in 2018/19 Net revenue Year ended 31 2019 2018 % change − Leadership in bill payments; 34% market share March (£m) of cash bill payments Bill payments 8.8 7.7 14.3% −
Slide 19: Outlook
Outlook 19 • Revenue − Limited one-off headwinds, £0.7m final year impact of Yodel renegotiation − Growth drivers: − PayPoint One − Parcels − MultiPay − Romania − Continued resilience in bill payments • Costs − Continued vigilance on cost − VAT benefit (£2.4m) in 2018/19 not reoccurring − Investment
Slide 20: CEO Patrick Headon
CEO Patrick Headon
Slide 21: First impressions
First impressions 21 1. Strong business model 2. Key Foundations set for future growth 3. Navigating a changing environment 4. Committed and innovative employees Results for the year ended 31 March 2019
Slide 22: Early view of priorities
Early view of priorities 22 1. Delivery of growth in retail services 2. Focus on Customer 3. Salesforce CRM – next phase 4. Strategy – execution and further opportunities Results for the year ended 31 March 2019
Slide 23: Summary
Summary 23 − Robust FY 2018/19 financial performance − Foundations set for future growth − Initial priorities identified for the rest of the year − Commitment in place for strong cash returns to shareholders Results for the year ended 31 March 2019
Slide 24: Appendix
Appendix
Slide 25: PayPoint's business model
PayPoint’s business model 25 We help… To… How… Offering specialist products and services Consumers Conveniently make payments and • PayPoint One/EPOS (millions) collect parcels • Collect+ • MultiPay, e-Money • Card Payments Offer more services to their local • ATMs community Convenience retailers (t
Slide 26: IFRS15
IFRS15 26 Transition impact (at 1 April 2018): − Deferred revenue £2.1m − Deferred costs £3.0m − Retained earnings increased by £0.9m (1 April 2018) − No impact on prior year comparatives – applied limited retrospective method Impact for year ended 31 March 2019: − Deferred revenue £0.6m − Deferred