PayPoint tops up sales after ATM use booms

 
Michael Bow
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UK PAYMENTS service PayPoint, a fixture at many corner shops across London, yesterday said year-on-year revenues rose four per cent in the third quarter to £57m, thanks to strong bill and general payment growth.

The FTSE-250 listed group, which was founded in 1996 to help people pay bills at the local shop, said increased use of its ATMs and payments by debit and credit cards helped retail service transactions rise 28 per cent versus a year earlier.

This helped cushion an 11 per cent fall in mobile phone top-ups in the UK, which were hit by the shrivelling pre-paid phone sector.

“Our retail businesses are continuing to generate satisfactory growth this year,” chief executive Dominic Taylor said.

“Bringing the [internet and PayByPhone] businesses under single management will provide the opportunity to unlock better growth, which should lead to improved returns on our invested capital in these businesses.”

The company also improved the amount of cash on its balance sheet, taking the total at the end of December to £24.4m versus £20.2m a year ago. Shares rose 1.25 per cent to close at 1,134p, although analysts at Numis said the stock may now be overvalued.

“None of the acquisitions or investments made since 2007 has yet provided a reasonable return on capital,” David McCann said.