The board reports on events, transactions and trading since the end of the period covered by the half yearly financial report.
For the period to 27 December 2009, trading has been satisfactory.
Bill and general payment transactions in the UK are in line with our expectations. A slow start to the third quarter for energy prepayments was offset by much stronger activity as a result of the colder weather starting in December, when energy prepayments were 7% ahead of December 2008. As reported in the half yearly financial report, mobile top-up volumes in the UK, Romania and Ireland continue to be lower than last year, as a consequence of mobile operators offering consumers more airtime for lower prices.
PayPoint.net transactions increased to 12 million from 10 million in the same period last year. The business continued the restructuring of its merchant acquiring base and its focus on product differentiation to improve its merchant offering.
We have nearly completed the restructuring of our UK field team, which will enable us to grow sales in the UK through our existing network utilising the breadth and depth of our product offering. In Romania, we have continued removing terminals from low volume, low margin sites. This should lead to the elimination of mobile only sites in the first half of the next financial year, whilst accelerating the roll-out of full service (bill payment and mobile top-up) sites. This will allow us to reduce field costs and increase the average revenue per site.
Performance(1) for the period from 28 September 2009 to 27 December 2009(2) and financial position1 as at 27 December 2009
New installations of terminal sites in the UK and Ireland were 491 since the half year. The insolvency of two substantial off-licence retailers, which together operated 520 retail sites with PayPoint terminals, reduced the site count at 27 December to 22,389. Excluding the impact of these insolvencies, churn was lower than in the comparative period. Terminal sites in Romania have reduced by 695 to 5,049 since the half year end, reflecting the remov removal of low volume, mobile only sites, mitigated by an increase in full service sites.
Transactions processed for the period were 146 million, down 1% compared to 147 million for the same period last year. Revenues of £51 million are down 13% on the same period as last year as a result of fewer mobile top-ups.
Net revenues(3) for the period were up 3% to £21 million as a result of growth in bill payment, internet and other income.
Earnings before tax and interest for the period to 27 December are in line with pro-rated market expectations, taking seasonality of trading into account.
The group has maintained a strong balance sheet with no debt and net cash. After the payment of the interim dividend of £5 million and £2 million for corporation tax, net cash at 27 December was £33 million (including client cash of £7 million) compared to £27 million (including client cash of £7 million) at 27 September 2009.
1 PayPoint's auditors have not been requested to review the performance or financial position
2 Comparative data is given for the similar 13 week period last year (i.e. 29 September to 28 December 2008)
3 Net revenue is revenue less commissions paid to retail agents, the cost of mobile top-ups where PayPoint is the principal and acquiring bank charges