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.

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.

Still in and very confident. Just the summer lul/drift that took these down. Price never equals value so I dont bother with stop loses. Just a matter of staying cool I beleive.

Trading statement today:


PayPoint PLC
13 September 2006


13 September 2006


PRESS RELEASE




PayPoint plc


Trading update



Transaction volumes and revenues to August are 26% and 30% respectively ahead of
the same period last year. As expected, relatively higher growth in lower margin
transactions (Ireland and epos) has resulted in net revenue growth of over 20%
(net revenue is revenue less agent commission and the cost of Irish mobile
top-ups). Operating margins are running at a similar level as the same period
last year.


Terminal growth in the UK is ahead of plan and should exceed the target of
17,000 by the end of the current financial year. ATM growth continues more
slowly, running at a net increase of just over 35 new sites per month as good
quality sites become more difficult to find. The ATM target remains 2,000.


Energy prepayment volumes have continued to grow, benefiting from increased gas
and electricity prices, although there has also been a marked increase in the
average value paid by the consumer for each transaction.


The migration of mobile top-ups from PayPoint terminals to the retailer's epos
system for the one remaining large multiple retailer remains incomplete and is
progressing with completion expected in the second half of the current financial
year.


ATM transactions have grown substantially, with the average number of
transactions per month increasing over the same period last year, divided
between cash withdrawals and balance enquiries, with the latter increasing more
sharply.

Ian

Yup everythings on track.

Interesting to see no mention yet of the TV licence contract which started at the beginning of August.
Speaking to many Paypoint agents I know that the TV licence payment (at 131.50 a go) has hugely increased the turnover for the outlets themselves. Even if the profit margin is quite small it should still amount to quite a nice amount over the year.
It could be a case of keeping the good news in reserve to announce with the interims.

Still reckon it is very good value at current levels.

Ian

Just seen that Dresdener Kleinwort has raised the stock from Hold to Buy. What with UBS's Buy recommendation last month it looks like the big push north is about to start. Happy days!!

Good news then.

I am not yet a holder of this stock, but am tempted to add to the portfolio.
I see the brokers recommendation is currently hold on this stock & that the estimated dividend will be 2.16%. Can anyone tell me when the final / int dividend dates are please as struggling to find these.

Dividends
Latest Previous
Final Interim
Ex-Div 31-05-06 30-11-05
Paid 03-07-06 03-01-06
Amount 7.50p 3.00p

Hope this helps.

Exactly what I need. Thanks.

Motoring along nicely this week.
About time the wider market got an idea of the huge potential of PayPoint !!

Ian

Bought in to this stock during the week & classify it as one of my low risk stocks, so am happy to see a good dividend & steady capital growth.
I have a number of high risk stocks which go down as rapidly as they go up, so am content for this one to be slow & steady.

Roger that. Welcome aboard.

What I was really driving at was that we are not expecting a buttock clenching rollercoaster ride with the sp - Or are we?
Thanks for the welcome mat m343.

You never know HC, I see US futures are down because of worries on US manufacturing, place that alongside the worsening housing market over the pond....... well it could be better. Mind having said that itl affect every stock on the market. Hoping we get some better news from the Yanks next week.

Cheers GF.