Reuters logo
PayPoint to sell parking and online payment processing companies
May 28, 2015 / 6:27 AM / 2 years ago

PayPoint to sell parking and online payment processing companies

(Reuters) - Bill payments firm PayPoint Plc (PAYP.L) said it would sell its parking and online payment processing companies to focus on its retail services businesses in the UK, Ireland and Romania.

Shares in the company rose as much as 5.1 percent on the London Stock Exchange, making the stock the biggest gainer on the FTSE 250 Midcap Index .FTMC.

Chief Executive Dominic Taylor said PayByPhone, which lets users pay for parking and tolls, was one of the companies to be sold.

Taylor did not provide financial details of the sale process, but said PayPoint had received interest from “all parts of the industry.”

The two companies accounted for 12 percent of PayPoint’s net revenue last year, Taylor said, adding the online payment company was profitable, while PayByPhone was not.

PayPoint, which provides payments and value added services to utility, transport and retail companies, reported a 8.3 percent rise in net revenue to 123.1 million pounds for the year ended March 31, 2015.

“Selling the market leading but loss making mobile and online business is a logical step that allows upgrades to earnings per share (EPS), a potential material return to shareholders and increased focus on the core business,” Jefferies analysts wrote in a note.

Taylor said there had been “an arms race” to invest in the financial technology space over the last two years, leading to increased competition and less differentiation.

“It is harder to make a return, payback is delayed ... therefore we believe our businesses in parking and online payment are better placed in the hand of another investor of that type that is able to take them forward,” Taylor said.

The business is heavy on investment and PayPoint’s board believes there are better owners elsewhere, the Jefferies analysts pointed out, raising their full-year 2017 EPS estimate by 4 percent.

PayPoint’s strategy after the sale will be to provide a multi-channel payment solution in the UK, Ireland and Romania, where the company has retail businesses, Taylor said.

“In time we will be investing in new countries to grow the retail estate,” he added.

Retailers such as Tesco Express, Spar and Asda use PayPoint’s technology.

The company said its full-year pretax profit rose to 49.6 million pounds, while revenue increased 3 percent to 218.5 million pounds.

PayPoint’s shares were up 3.9 percent at 911.5 pence at 0842 GMT.

Editing by Anupama Dwivedi

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below