(Alliance News) - PayPoint PLC on Thursday announced a share buyback programme after reporting strong annual results despite subdued consumer spending throughout the year.

The Welwyn Garden City, Hertfordshire-based store payment service provider said that in the financial year that ended March 31, pretax profit rose 13% to GBP48.2 million from GBP42.6 million the previous year.

Revenue increased by 83% to GBP306.4 million from GBP167.7 million reflecting the first full year since the company acquired the Love2shop business.

Over the recent year, net corporate debt were reduced by 6.8% to GBP67.5 million from an opening position of GBP72.4 million.

In light of the positive results, PayPoint raised its final dividend by 3.2% to 19.20 pence per share from 18.60p, in line the company's dividend policy and target cover range of 1.5 to 2.0 times earnings excluding exceptional items.

This follows an interim dividend of 18.60p that was improved from 18.00p the previous year.

Across PayPoint divisions, Shopping revenue rose 3.9% to GBP64.4 million and E-commerce revenue soared 62% to GBP11.8 million. Meanwhile, the Payments & Banking division struggled, with a net revenue decline of 4.8% to GBP53.5 million.

The Love2shop business generated revenue of GBP51.3 million, although PayPoint highlighted weaker billing performance in the second half of the year.

PayPoint will launch a three-year share buyback programme that will return a minimum of GBP20 million to shareholders over the next 12 months with potential increases, it said, depending on performance, market conditions, cash generation, and the general capital needs of the business.

Chief Executive Nick Wiles said: "In the current year, consumer behaviour across a number of our businesses remains subdued, reflecting continued tighter family budgets and a generally flat economy. Our expectation is that the consumer outlook will improve during the course of the year."

"Against this background, our streamlined organisational structure and cost base will support the delivery of our medium-term growth plans. Strong earnings growth and cash flow generation, combined with a sustainable dividend policy provide a robust platform for the board to propose further steps to enhance shareholder returns through a share buyback programme."

Looking ahead, PayPoint is aiming to achieve earnings before interest, tax, depreciation, and amortisation of GBP100 million by financial 2026.

PayPoint shares were up 7.9% to 612.00 pence each in London on Thursday morning.

By Elijah Dale, Alliance News reporter

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