Paypoint plc Paypoint Plc : Annual Report And Notice Of 2018 Agm
June 26 2018 - 3:00AM
UK Regulatory
TIDMPAY
PayPoint plc (the 'Company')
26 June 2018
Publication of Annual Report and Notice of 2018 Annual General Meeting
The Company has today published its Annual Report and Financial
Statements for the year ended 31 March 2018 ('2018 Annual Report') on
its website http://corporate.paypoint.com/
In accordance with Listing Rule 9.6.1, the 2018 Annual Report and notice
of Annual General Meeting will shortly be available for public
inspection on the National Storage Mechanism (NSM) - Morningstar
(www.morningstar.co.uk/uk/nsm ).
The Company will hold its 2018 Annual General Meeting on Wednesday, 26
July 2018 at 12 noon at the offices of Canaccord Genuity, 88 Wood Street,
London EC2V 7QR.
In addition, following the release on 24 May 2018 of the Company's
preliminary results for the year ended 31 March 2018, which are also
available at http://corporate.paypoint.com/, the Company makes the
following additional disclosure in compliance with Rule 6.3.5R of the
Disclosure and Transparency Rules of the UK Financial Conduct Authority.
Together these constitute the information required to be communicated to
the media in unedited full text through a Regulatory Information
Service. This information is not a substitute for reading the full 2018
Annual Report and Financial Statements.
Principal risks and uncertainties
Since publication of the annual report last year, the Executive team has
completed a thorough review of the key risks that could prevent PayPoint
meeting its strategic objectives, its risk appetite, the risk management
framework and the format for managing these risks and reporting to the
Board. The Group's level of risk remains broadly the same as last year
however, PayPoint's business, financial condition or operations could be
materially and adversely affected by the risks summarised in the
sections below.
Risk area Potential impact Mitigation strategies
Business
Innovation and market changes The Group could fail to adapt to changes in consumer The Group monitors external technological and consumer
behaviour or to commercialise and develop innovation trends through its monthly strategy committee and
that is scalable and meets the requirements of clients twice yearly Board strategy reviews. The Group is
and retailers. The inability to implement new products committed to continued research and investment in
and services effectively may impact PayPoint's ability technology and products to support its continued growth.
to drive growth and profitability. Our product portfolio and the progress of new initiatives
are reviewed at the monthly product committee that
contains representatives from commercial, product,
technology, finance and legal.
Culture The strategic objectives and values of the Group are The PayPoint strategic objectives and values are defined
focused on retailer and consumer-centric products and advocated by the Executive Board. These values
and services. If employees are not aligned with these are linked to strategic, team and individual employee
objectives or empowered to realise opportunities, objectives and performance appraisals. The Group's
deliver performance or mitigate risks this could lead ethical principles are published on its website and
to poor service quality, a loss in revenue, increased intranet. A whistleblowing policy and procedures are
cost or failure by employees to escalate concerns published and a third-party service if available for
or issues to senior management and the Executive Board. employees to report wrongdoing. The Retailer Pledge
is published and all employees made aware of its requirements.
Dependence on key clients and retailers The consolidation of major clients or multiple retailers The Group monitors client and retailer concentration
could adversely affect revenue. Insolvency, liquidation, risk to ensure that no one client or retailer accounts
administration or receivership of retailers could for a disproportionate share of the Group's net revenue.
lead to PayPoint being unable to recover some or all In addition, the Group continues to acquire new clients
of the client monies processed by the retailer. PayPoint and retailers to reduce reliance on existing sources
would be liable to account to those clients where of revenue. All major clients are covered by specific
PayPoint bears the risk of collections. contracts or agreements. Contract end dates and start
of notice periods are scheduled and regularly reviewed
by client management teams. Retail teams maintain
and develop the relationship with retailers.
Partners & suppliers Reliance on third parties for the provision of key The Group selects and negotiates agreements with strategic
parts of the PayPoint services (e.g. Payment Service suppliers and agents based on criteria such as delivery
Providers) could lead to extended outages if the supplier assurance and reliability. Single points of failure
fails to meet required SLAs or goes into administration. are avoided, where practicable and economically feasible.
Specifically, for our MultiPay product we are adding
a second payment service provider which will enhance
the resilience of the service. Controls are regularly
reviewed and improved to minimise risk of retailer
churn caused by financial loss to retailers through
fraudulent third-party activity. Suppliers are selected
on merit following tendering, procurement and due
diligence processes.
Interruptions in processes and systems The Group's ability to provide reliable services largely Resilience is built into systems and contingency plans
depends on the efficient and uninterrupted operation are in place should systems fail. These plans are
of our computer network systems, financial settlement exercised regularly. Programmes are in place to remove
systems, data and call centres, as well as maintaining technical debt and to automate manual processes. Payment
sufficient staffing levels. System or network interruptions, files are automatically imported into settlement systems.
recovery from fraud or security incidents or the unavailability All payments are checked / authorised by nominated
of key staff or management resulting from a pandemic signatories. There is segregation of duties maintained
outbreak could delay and disrupt our ability to develop, between settlement & corporate accounts. Invoices
deliver or maintain our products and services, causing are recorded and approved by authorised managers.
harm to our business and reputation and resulting Daily reconciliation of client settlement accounts
in loss of customers or revenue. and weekly reconciliation of PayPoint corporate accounts
is carried out. Audited controls for supplier and
client account set-up are in place.
Financial
Liquidity & funding Capital might be required to finance investment, fixed The Finance and Treasury policy sets borrowing limits
assets, working capital, acquisitions or losses. If with headroom allowed. A five-year revolving credit
PayPoint does not perform to expectation or finance facility is in place. Cash resources are available
is not available from the market it may be necessary but will be depleted by additional annual dividends
to reduce the scope of the Group's operations or anticipated of GBP25 million for five years. The ability to raise
expansion. new funding is available via the stock market. Investor
relations programme communicates company strategy,
opportunities and results to the market and investors.
Monthly business reviews and quarterly forecasts highlight
any change in cash requirements. Cash flow reporting
has been improved.
Operational
Legislation or regulatory reforms and risk of PayPoint is required to comply with relevant legal The Group's legal department works closely with senior
non-compliance and regulatory requirements. Any breach of these obligations managers to adopt strategies to educate legislature,
could lead to costly and damaging legal or corrective regulators, consumer and privacy advocates and other
actions to return to compliance e.g. Health & Safety stakeholders to support the public policy debate,
at Work Act, Data Protection Act / GDPR, Stock Market where appropriate, to ensure regulation does not have
listing rules, Financial Conduct Authority requirements, unintended consequences over the Group's services.
anti-money laundering legislation, employment law A central compliance department co-ordinates all compliance
etc. It could also lead to the prosecution of individual monitoring and reporting. Subsidiary managing and
company officers or employees. finance directors are required to sign annual compliance
statements. A plan is in place to ensure that the
Group is compliant with the requirements of the General
Data Protection Regulations prior to the 25 May 2018
deadline.
Cyber security, data protection, resilience and business System or network interruptions, recovery from fraud Service delivery is constantly monitored with technical
continuity or cyber security incidents or poorly implemented support teams in place to address service outages
change could delay and disrupt our ability to develop, or errors. Contact Centre, Service Management and
deliver or maintain our products and services, causing Technical Services Helpdesk are in place to assist
harm to our business and reputation and resulting with and resolve issues. Client Management and Retail
in loss of customers or revenue. PayPoint's ability Management teams are in place to interface with clients
to provide reliable and secure services largely depends and retailers. Resilient systems are in place across
on the availability and uninterrupted operation of the Group. Disaster recovery and business continuity
its network of retailer terminals, computer systems, plans are maintained and exercised regularly to ensure
financial settlement and key business processes. contingencies are in place in the case of failure.
Attracting and retaining key talent Future success is substantially dependent on the continued Effective recruitment programmes are on-going across
services and performance of executive directors, senior all business areas, as well as personal and career
management, competent and qualified personnel. The development initiatives. The executive management
failure to attract the right candidates, loss of key reviews talent potential twice a year and retention
personnel or failure to adequately train employees plans are put in place for individuals identified
could damage the Group's business or lead to non-compliance at risk of leaving. Compensation and benefits programmes
with legal and regulatory requirements. are competitive and reviewed regularly.
Brexit The effect on inter-company transactions and the Group's Due to the current uncertainties with the Brexit negotiations
international expansion plans may be adversely affected the Group is still considering appropriate mitigation
by the outcomes of the negotiations between the UK strategies. However, the bulk of the Group's operations
government and the other member countries during the and revenues are UK-based. Romania and Ireland will
UK's exit from the European Union. remain within the EU and are unlikely to be significantly
affected by Brexit. Where issues are identified appropriate
mitigations are being put in place.
Related party transactions
Remuneration of the directors, who are the key management of the Group,
was as follows during the year:
Year ended 31 March 2018 Year ended 31 March 2017
GBP000 GBP000
Short term benefits and
bonus(1) 2,579 2,162
Pension costs(2) 234 235
Long term incentives(3) 445 445
Other(4) 29 29
Total 3,287 2,871
1. Includes salary, fees, benefits in kind and annual bonus.
2. Defined contribution pension scheme.
3. Long term incentives: includes the value of 2015 LTIP and DABS
expected to vest after the year end (2017: 2014 DSB and LTIP awards).
4. SIP matching and dividend shares awarded in the year.
Amounts received from Drop and Collect Limited during the year totalled
GBP15.1 million (2017: GBP17.8 million) and PayPoint held a trade debtor
at year end of GBP0.4 million (2017: GBP0.6 million).
Directors' remuneration is disclosed on page 58 of the 2018 Annual
Report as part of the annual report on remuneration.
Statement of directors' responsibilities in respect of the Annual Report
and the Financial Statements
The 2018 Annual Report contains the following statements regarding
responsibility for financial statements on page 69:
"The directors are responsible for preparing the Annual Report and the
Group and parent Company financial statements in accordance with
applicable law and regulations.
Company law requires the directors to prepare Group and parent Company
financial statements for each financial year. Under that law they are
required to prepare the Group financial statements in accordance with
International Financial Reporting Standards as adopted by the European
Union (IFRSs as adopted by the EU) and applicable law and have elected
to prepare the parent Company financial statements on the same basis.
Under company law the directors must not approve the financial
statements unless they are satisfied that they give a true and fair view
of the state of affairs of the Group and parent Company and of their
profit or loss for that period. In preparing each of the Group and
parent Company financial statements, the directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and estimates that are reasonable, relevant and reliable;
-- state whether they have been prepared in accordance with IFRSs as adopted
by the EU;
-- assess the Group and parent Company's ability to continue as a going
concern, disclosing, as applicable, matters related to going concern; and
-- use the going concern basis of accounting unless they either intend to
liquidate the Group or the parent Company or to cease operations, or have
no realistic alternative but to do so.
The directors are responsible for keeping adequate accounting records
that are sufficient to show and explain the parent Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the parent Company and enable them to ensure that
its financial statements comply with the Companies Act 2006. They are
responsible for such internal control as they determine is necessary to
enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error, and have general
responsibility for taking such steps as are reasonably open to them to
safeguard the assets of the Group and to prevent and detect fraud and
other irregularities.
Under applicable law and regulations, the directors are also responsible
for preparing a Strategic Report, Directors' Report, Directors'
Remuneration Report and Corporate Governance Statement that complies
with that law and those regulations.
The directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in the UK governing the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions.
Responsibility statement of the directors in respect of the annual
financial report
We confirm that to the best of our knowledge:
-- The financial statements, prepared in accordance with the applicable set
of accounting standards, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company and the
undertakings included in the consolidation taken as a whole; and
-- the directors' report which also incorporates the strategic report
includes a fair review of the development and performance of the business
and the position of the issuer and the undertakings included in the
consolidation taken as a whole, together with a description of the
principal risks and uncertainties that they face.
We consider the annual report and accounts, taken as a whole, is fair,
balanced and understandable and provides the information necessary for
shareholders to assess the group's position and performance, business
model and strategy.
Dominic Taylor
Chief Executive
24 May 2018"
- End -
Enquiries:
Susan Court
Company Secretary, PayPoint plc
Tel: +44 (0)1707 600300
ABOUT PAYPOINT
In thousands of retail locations, at home and on the move, we make life
more convenient for everyone.
For retailers, we offer innovative and time-saving technology that
empowers convenience retailers in the UK and Romania to achieve higher
footfall and increased spend so they can grow their businesses
profitably. Our innovative retail services platform, PayPoint One, is
now live in over 8,000 stores and offers everything a modern convenience
store needs, from parcels and contactless card payments to EPoS and bill
payment services. Our technology helps retailers to serve customers
quickly, improve business efficiency and stay connected to their stores
from anywhere.
We help millions of people to control their household finances, make
essential payments and access in-store services, like parcel collections
and drop-offs. Our UK network of 29,000 stores is bigger than all banks,
supermarkets and Post Offices together, putting us at the heart of
communities nationwide.
For clients of all sizes, we provide cutting-edge payments technologies
without the need for capital investment. Our seamlessly integrated
multichannel payments solution, MultiPay, is a one-stop shop for
customer payments. It helps over 500 consumer service providers to save
time and money while making it easier for their customers to pay - via
any channel and on any device.
This announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the information
contained therein.
Source: PayPoint plc via Globenewswire
http://www.paypoint.co.uk/default.htm
(END) Dow Jones Newswires
June 26, 2018 04:00 ET (08:00 GMT)
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