Certainly got a lot going for it with a lot of post offices closing down. Im sure you have seen the bill payment service at a local shop were you can pay your utility bills, council tax, top up on your mobile cards, withdraw money from a ATM and a awfull lot more.

This type of business is usually low margin where the shopkeeper and paypoint get a cut of each transaction but they are moving into higher margin business that bodes well and people always have to pay their bills so its not like there is going to be a fall of in trade.

Heres a snap shot of the historical performance.

Summary financial information

Year ended 31 March
2002 2003 2004
m m m
Gross revenue 23.6 43.8 67.1
ABT deferred revenue release* 2.5 6.5 0.0
----- ----- -----
26.1 50.3 67.1

Net Revenue before ABT deferred revenue release** 14.0 21.1 28.6
Operating profit/(loss) before depreciation and (0.2) 4.0 8.1
amortisation ***
Operating profit/(loss)*** (1.4) 2.7 6.1
Profit/(loss) before tax*** (2.4) 1.8 6.0
Net cash flow before financing (0.1) 1.7 10.9

So you can see that they are profitable and in fact have tax credits to shelter future profits.

The company is also highly cash generative which is a very big plus.

The one thing that does look unatractive is the historical P/e, but with operting profits in the last year growing by 130% and this year the business is just booming along(50 new ATMS per month) Im sure we are going to see an attractive P/E come December when results are out.

Heres the link towards all the nitty gritty about the company. Note the name of the large blue chips which are its customers.

http://www.uk-wire.com/cgi-bin/articles/200409210700311519D.html

All in all a very fast growing company and should be worth a punt over the medium term.

DYOR.

Yes excelent results Ian. Im thinking of adding more here whilst the price looks under pressure due to recent market correction.

cheers GF.

CEO was on Bloomberg this morning talking about the results and future.... I have no holding but very impressive results all the same.

I think that BBC licence award will ultimately be seen as company transforming.
I certainly think excellent organic growth is pretty much guaranteed (in as far as anything can be guaranteed) over the next couple of years.
The BBC contract should also lead to similar high profile contracts being won.
I bought yesterday in anticipation of excellent results.
This morning I topped up !!!

Ian

News filtering from the agm suggests company is firing on all cylinders. The BBC TV licence contract is doing well.
Analyst upgrades should follow very soon.

Ian

Ian

What is your target for the share price in the next 6 months or so ?

What news do you have from the AGM Ian?.

Hello chaps.
Apologies for the delay in replying.
From what I have been told the agm was attended by a couple of analysts and one or two private investors.
I hope to have a more detailed posting of the meeting over the weekend but one of the attendees assures me that the noises eminating from management suggests that the business is performing ahead of the company's own expectations
and subsequently the analysts following Paypoint should be revising their forecasts in the near future.
Hopefully more substance to follow over the weekend.

Ian

A little bit more news ......

feedback from many Paypoint agents suggest that there has been increased use of the payment facility by people who have traditionally paid bills etc by queueing up at their banks at lunchtimes etc.
As many agents are the likes of newsagents (who are open until quite late in the evening) the convenience of, for example, paying bills on the way home from work has taken the Company pleasantly by surprise. Up to now the main customer profile has perhaps been from a lower socio-economic background.
The eps upgrades for the y/e 3/2007 and 3/2008 are going to be around 27.0p and 35.0p respectively putting the shares on a forward p/e of 25 or next year and 22 for 2008.
Not cheap but excellent value for a quality holding.

Ian

Yup, and thats the beauty of the stock Ian and why I have gone in heavily.

Cheers Gf.

Hi Ian/Goldfinger

I was wondering why the sp has dropped so much this week? any thoughts?

Market in general, cant think of anything else KS.

Amvescap raised their holding as notified yesterday.

A bit of related news today also:

http://uk.biz.yahoo.com/01082006/250/ukash-announces-fsa-authorisation-e-money-status.html

I think the shares are now pretty much close to the bottom.

Ian

Long term hold these I think Ian.

The shares are now 520p !!!!!!!!!!!!!!!!!!!!!
Cannot find any news to justify the weak share price over the last month.
Indeed the most recent piece of news on the Company website looks very good:
http://www.paypoint.com/news-press_95.htm

Either there is something fishy going on that private investors are not party to or the shares really are at very attractive levels.

Hope it's the latter as I have just bought some more.

Ian

Looks like there's some serious shorting going on here. With volumes so thin in August it's easier to push down the SP if you're bent on doing so. Obviously those responsible hope to clean up when the interims are announced in the autumn. Presume nobody's buying at the moment because they're all waiting to see just how low the SP will go before it bottoms out - that's what I'd do if I weren't aready in. Must say, though, I thought the only way was up with this one.

On the second line, limited newsflow put broker comment in focus, with Paypoint the top riser, up 42 pence to 542, after being upgraded to 'buy' from 'neutral' by UBS on valuation grounds.

The broker said while Paypoint's headline valuation is unlikely to ever look compelling, the current share price offers an attractive entry point into a high quality stock with several long-term attractions.

A little bit of good news and look what happens !!!

;o)

http://news.independent.co.uk/business/analysis_and_features/article1221328.ece

A bullish note from UBS sent PayPoint shares soaring 12 per cent yesterday. But, even after this rise, the stock is still 25 per cent lower than it was three months ago, making it a great long-term bet.

PayPoint, which listed in 2004, runs an electronic bill payment network located in 14,000 convenience stores in the UK and Ireland. It collects payments on behalf of almost 500 clients including major mobile phone operators, cable television companies, energy suppliers and local councils.

As UBS rightly points out, the group offers good long-term value for investors. Despite the retreat in the shares, the Swiss broker is convinced that PayPoint continues to experience strong growth in its transaction numbers.

The company is benefiting from the decline in the number of Post Office branches. Meanwhile, people are less likely to visit a Post Office - which is in many ways acts as a rival to PayPoint - as state benefits are now paid directly into accounts rather than over the counter. It is also steadily building up its client base. Recently, Powergen in the East Midlands has opened up a contract to PayPoint to provide top-ups for electricity meters while punters will soon be able to buy their TV licences through the group.

An international expansion of PayPoint services is a possibility and could prove to be a major avenue of future growth. UBS expects PayPoint to update the City on this front at its September trading statement or in November when it is due to publish its interim results.

In May, the group unveiled a 152 per cent jump in annual profits to 20m. UBS forecast this figure to rise to 23m this year and to 27m in the year after. Given its prospects, PayPoint shares, which trade at 21 times forward earnings, are worth tucking away.

At last, a little recognition of the bleeding obvious.

The tv licence payment facility has already kicked in - BBC TV was advertising PayPoint on all channels yesterday as the method of payment for those unable or unwilling to use direct debit.
The only Company getting free advertising on the Beeb !!!
Can't be bad.

Ian

Last year PayPoint released their trading statement on 5th of September, I am expecting this year's trading to be released soon. Lets hope they release a Bullish statement to lift the sp above 700, which is a more realistic figure for PayPoint! With the free BBC advert they should do well.