We selected PAY as our last stock pick of the CC's 2nd year, since then the share price has fallen but the profits have increased. We feel this may be a good time to add to our position.
What is PayPoint?
PayPoint is a UK-based company that provides a range of
payment and retail services
to businesses and consumers. It has grown to become a
major player
in the payments industry, with a network of over
28,000
retail locations across the UK.
One of the main services offered by PayPoint is the ability to
pay bills
and
top up mobile phones
at participating retail outlets. Customers can visit a PayPoint location and make a payment using cash or a debit card,
eliminating
the need to send a check or visit a payment website. PayPoint also offers a range of other payment services, including the ability to pay for goods and services online, pay council tax, and set up direct debits.
In addition to its payment services, PayPoint also operates a
network
of retail locations that offer a range of products and services. These include convenience stores, newsagents, and other small retailers that offer a range of goods such as groceries, tobacco products, and lottery tickets.
PayPoint has a strong focus on
security
and has implemented a number of measures to
protect
its customers' personal and financial information. It is also committed to providing excellent
customer service, with a dedicated team available to assist customers with any issues or concerns they may have.
Overall, PayPoint is a
leading provider
of payment and retail services in the UK, with a strong focus on
security
and
customer service. Its wide range of services and extensive network of retail locations make it a convenient choice for businesses and consumers alike.
What has happened since we last bought in?
PayPoint issued a
positive
trading update on 20 April, telling investors that their net revenue for the financial year is expected to be around
£125 million
(vs
£115.1 million
in 2022), with accelerated revenue growth across all three of their business divisions.
The group anticipates that
profit
before tax will be at the
top end
of the range of market expectations, driven by the
strong momentum
across the business.
The group has materially
enhanced
its platform and capabilities in the past year: its integrated payments platform has
expanded
with the addition of Open Banking and prepaid solutions across card, direct debit and cash; PayPoint said its retail portion of the business is now
stronger
than ever, with multiple opportunities for partners to earn
revenue; and its e-commerce offering has gone from
strength
to
strength, delivering
record
volumes and an unparalleled in-store experience for consumers.
“This enhanced platform will unlock future opportunities and deliver sustainable and profitable growth for shareholders, underpinned by our business-wide partnership philosophy and intensity of execution,” said the company in a statement.
“The integration of Appreciate Group (now known as Love2shop) continues to progress well, opening up further revenue opportunities, expanding our capabilities further in the gifting, rewards and prepaid savings markets and enabling the creation of enterprise level solutions into new markets, combining our extensive payments and commerce solutions across the group."
“These opportunities have accelerated since completion. Trading has been positive early in the first quarter of FY24, and we look forward to updating the market further at our preliminary results for the year ended 31 March 2023 on 6 July.”
What about the share price?
Since we bought in, the share price has
declined by around 21%. With no real explanation for this drop, we believe this could be a good
opportunity to buy more shares of this quality company at an
improved price point. The
fall
in share price also means we should be receiving a chunky 7.18% dividend on our capital invested this year.
Conclusion
PayPoint PLC provides payments and banking, shopping, and e-commerce services and products in the United Kingdom. Since we last bought in, the company's share price has
declined while their overall financials have
improved.
PAY is a high-quality, dividend paying company and we will be adding to our investment tomorrow morning.
Conclusion
PAY is a high-quality, dividend paying company and we will be adding to our investment tomorrow morning.
