Paypoint plc Paypoint Update Regarding Covid-19
March 19 2020 - 9:49AM
UK Regulatory
TIDMPAY
This announcement contains inside information for the purposes of EU
Regulation 596/204
PayPoint plc
19 March 2020
PayPoint update regarding COVID-19
PayPoint continues to provide vital services to the community during
this un-precedented period of uncertainty. Our priority is to continue
to support our clients, retailer network and people so that communities
are able to access the services they need and our business continues to
function effectively.
Trading
Our recent trading across the business has continued to be robust and
most recently we have seen areas of increased activity across our
network, with consumers currently making higher levels of energy top-ups
and increasingly using cards as their preferred payment method. As a
result the Board remains confident that progress will be made in profit
before tax and exceptional items for the financial year ending 31 March
2020.
PayPoint has quickly moved to an operating model which combines remote
working, continued activity in the field in support of our retailer
network and some essential office based activity. We are seeking to
minimise the disruption of service and support we can provide clients
and our retailer network at this time, whilst taking the appropriate
steps to safeguard our people. Our contact centre remains fully
operational and we are considering a range of measures to support our
retailers and clients during this period.
However, the Board recognises that as one of the UK's leading Bill
Payment services providers, measures taken by the government through
this period to provide financial support to UK households, such as a
waiver on utility bill payments, may have as yet unclear and potentially
adverse consequences for our bill payments volumes.
Further, as we look ahead to the next financial year, our initiatives to
grow parcels, develop our EPoS proposition and other new services across
our retailer network will inevitably be slower than had been
anticipated. As a result, the business will find it challenging to
mitigate the impact from the loss of the British Gas contract and
pricing pressure from other utility clients. The Board is currently
reviewing the impact of these challenges on our outlook for the
financial year ending 31 March 2021 but at this stage cannot give
precise guidance as to the impact.
The Board will continue to keep the market updated as the situation
develops and its impact on the business and our plans for the next
financial year become clearer. The analysis is based on information and
data currently available and may change dependent on how the COVID-19
situation develops over the coming weeks.
Balance sheet and liquidity
PayPoint remains in a strong financial position, the Group had net debt
of GBP13.3 million (excluding cash held in respect of short term client
settlement obligations) as at 31 December 2019. To ensure PayPoint
remains in the best possible position to withstand a sustained period of
disruption to trading, the GBP70 million revolving credit facility
(forming part of our overall GBP75 million financing facility) has been
fully drawn down.
Dividend
Additional dividend payments have been suspended until further notice
and an immediate review of short term cost reduction measures will be
undertaken across the business. The Board will continue to review the
appropriate level of ordinary dividend to be paid, recognising its
importance to our shareholders and will make a final decision ahead of
our full year results announcement 28 May 2020.
The actions taken will leave the business in the strongest position
possible to manage through this current crisis.
Leadership and continuity
The Board has decided in the current environment that maintaining
clarity and continuity in the leadership of the business is the most
appropriate course of action. Nick Wiles will remain in the role of
executive chairman during this period, in support of the executive team.
Consequently, the CEO search process has been temporarily suspended and
will be resumed once the situation becomes clearer.
Enquiries
PayPoint plc:
Nick Wiles, Executive Chairman (Tel: 01707 600 317)
Rachel Kentleton, Finance Director (Tel: 07843 074 906)
Finsbury:
Rollo Head/Andy Parnis (Tel: 0207 251 3801)
About PayPoint
In thousands of retail locations, at home and on the move, we make life
more convenient for everyone.
For retailers, we offer innovative and time-saving technology that
empowers convenience retailers in the UK and Romania to achieve higher
footfall and increased spend so they can grow their businesses
profitably. Our innovative retail services platform, PayPoint One, is
now live in over 16,000 stores in the UK and offers everything a modern
convenience store needs, from parcels and contactless card payments to
EPoS and bill payment services. Our technology helps retailers to serve
customers quickly, improve business efficiency and stay connected to
their stores from anywhere.
We help millions of people to control their household finances, make
essential payments and access in-store services, like parcel collections
and drop-offs. Our UK network of almost 28,000 stores is bigger than all
banks, supermarkets and Post Offices together, putting us at the heart
of communities nationwide.
For clients of all sizes we provide cutting-edge payments technologies
without the need for capital investment. Our seamlessly integrated
multichannel payments solution, MultiPay, is a one-stop shop for
customer payments. PayPoint helps c500 consumer service providers to
save time and money while making it easier for their customers to pay --
via any channel and on any device.
END
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March 19, 2020 09:49 ET (13:49 GMT)
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