Trading has been ahead of analysts’ forecasts with transaction volumes and revenues to the end of February 29% and 32% ahead of the same period last year respectively.  The expected relatively higher growth in lower margin Irish transactions has resulted in net revenue¹ growth of 29%. Operating margins are running at a similar level to the same period last year.

Terminal growth should exceed our target of 17,000 by the end of the current financial year. We expect to continue rolling out new agents at the current rate after the end of this financial year.  ATM installations continue to grow more slowly than last year, running at a net increase of about 35 new sites per month. Good quality sites have become more difficult to find but we expect to continue to roll out new ATM sites during the next financial year. 

Energy prepayment volumes have continued to grow, benefiting from increased gas and electricity prices. Recently announced price reductions are likely to reduce transaction numbers in gas prepayments unless average payment values fall in proportion. Bill payment volumes are well ahead of the same period last year, mainly due to the BBC TV Licensing contract award.

Mobile top-up volumes are over 18% ahead of the same period last year driven largely by the growth in terminals.

ATM transactions have grown substantially, with the average monthly transactions per machine higher than the same period last year.

The computer hardware platforms for PayPoint Internet Payment Services (comprising Metacharge and SECPay, both of which were acquired this year) will be combined into one operation in the first half of the next financial year, and the SECPay Ripon location will close.  Software integration will follow to allow product offerings from either system to be delivered to all merchants including all bank acquiring relationships.  

PayPoint’s preliminary results announcement will be on 17 May 2007.

Note

1.  Net revenue is revenue less agent commission and the cost of Irish mobile top-ups

Enquiries:
PayPoint plc  01707 600 300  
Dominic Taylor, Chief Executive
George Earle, Finance Director
Finsbury  020 7251 3801
Rollo Head
Don Hunter

About PayPoint 

PayPoint is the UK’s and Ireland’s leading cash and internet payments company, handling over £4 billion in over 360 million payments annually for over 5,000 clients and merchants. The company operates with several significant payment streams:

• The PayPoint branded retail network numbers over 17,500 terminals located in local shops (including Co-ops, Spar, Costcutter, NISA-Today’s, Londis and thousands of independents) in all parts of the UK and Ireland. Terminals handle cash bill payments, mobile phone top-ups, transport tickets, London Congestion Charges, BBC TV licences and a wide variety of other payment types for all of the leading utilities, telecoms suppliers and many consumer service companies. This network is used by consumers, free of charge, over 7 million times a week. The network has 97.3% population cover on a 1 mile urban or 5 miles rural measure; 
  
• Additional multiple retailer connections into the electronic till systems (EPoS) of 3,000 outlets including BP, Somerfield and Superdrug for mobile top ups and selected payments from the PayPoint range;
  
• The PayPoint ATM network has 1850 ‘LINK’-branded machines across the UK, also typically in convenience stores. These machines levy a small convenience fee for each withdrawal; and 
  
• PayPoint Internet Payment Services, trading as Metacharge and SECPay, provides secure credit and debit card payments for over 4,000 web merchants linking into all the major UK acquiring banks.

PayPoint floated on the London Stock Exchange in September 2004 and was the Financial Times ‘New Company of the Year’.  The company has a market capitalisation of c. £375 million. In year ended March 2006, revenue was £120 million with profit before tax of £20 million. PayPoint has been awarded the Queen’s Award for Enterprise and is widely recognised for its leadership in prepayment systems, smart technology and consumer service.