PayPoint PLC (LON:PAY) shares perked up on Thursday after the group’s net revenues expanded thanks to strong growth from its UK service fees.
The FTSE 250-listed group, which allows people to pay bills in local convenience stores, reported net revenue growth of 3% to £57.3mln for the six months ended 30 September, however, pre-tax profits fell by 5.2% to £24mln.
The revenue increase was attributed to UK service fees, which saw underlying net revenues rise 31.8% in the period as the group increased the number of payment sites in the six months by 2,207 to 15,088.
PayPoint also hiked its interim dividend by 51.6% to 23.6p, while an additional dividend for the period was also increased by 51.1% to 18.4p.
Looking ahead, PayPoint’s executive chairman Nick Wiles said the group expected “progression in profit” for the full year which would be influenced by “parcel volumes and continued resilience in UK bill payments over the second half”.
Analysts at PayPoint’s house broker Liberum Capital, which has a ‘buy’ rating and 1,200p target price on the stock, said the results had come in ahead of their expectations and reiterated their full-year profit forecast of £54.8mln.
In early deals on Thursday, PayPoint’s shares rose 0.5% to 987.7p.