PayPoint has reported “good growth” in its retail services in its first set of interim results since the completion of its restructuring programme.
Plans to reshape the business towards future growth opportunities in retail services were progressing well, said chief executive Dominic Taylor.
Net revenue within PayPoint’s retail networks increased by £2.7m to £56.5m, up 5% from the same period last year, driven mostly by the increase in service revenue from PayPoint One.
Further progress was also made in the parcel business with volumes up by 13.6% to 11.9m and the network having expanded to more than 7,200 outlets.
However, cost base increased by £3.3m to £32.1m as it continued to invest in PayPoint One, MultiPay and improving customer service, PayPoint said.
“We recognise that we are not always providing the level of service to retailers that we would want but we are on a journey to correct that and are investiging in technology to help us better serve them,” he told Convenience Store.
PayPoint One has now been installed in 6,181 sites and the company said it was on track to hit its goal of 8,000 PayPoint One sites by March 2018.
“With the launch of Epos Pro and our focus on increasing our pricing mix, we expect continued growth in the average weekly fee per site,” Taylor added.
Epos Pro and the Epos mobile app were launched at the beginning of November with enhanced features including stock management, news management and wholesaler links.
The system had “landed really well” with more than 100 retailers having already bought in to the system, which is retailing at £30 a week. Roll out is to commence in January 2018.
Paypoint had “not yet set a hard line in the sand” for when it planned to switch off the old terminals Taylor said. “We would rather work on motivating retailers to adopt the new ones,” he said.
“We also plan to implement an option for retailers to have net settlement for card payments. This will be a unique differentiator for PayPoint, reducing our retailers’ banking costs and improving their working capital.
“Convenience retailing is a strong, resilient and growing sector which has benefited from a shift towards regular top-up shopping, complementing online purchasing and taking share from big weekly shops. PayPoint is well placed through our strong convenience coverage of approximately 29,000 stores in the UK and Ireland, to grow retail services by selling to retailers as our customers and serving consumers through retailers as our distributors.
“This dynamic has underpinned our continuing retail services growth which are on track to exceed bill payment revenues in the coming years,” Taylor added.