PayPoint, retail payments technology provider to the convenience sector, said it’s lost its ongoing contract with energy giant British Gas.
The firm said that after extensive negotiations with British Gas, it has been unable to agree appropriate renewal terms for its multi-year contract and will cease working with British Gas and its customers after 31 December 2019.
The impact on net revenue and contribution in the financial year to 31 March 2020 is expected to be around £1.4 million and in the financial year to 31 March 2021 is forecast to be approximately £3.5 million.
Retail website BetterRetailing.com said that Paypoint had lost out to rivals Payzone and the Post Office.
The Post Office, which acquired Payzone last year, told Prolific London that it was aware of the story, but was unable to comment at the present time.
FTSE 250-listed PayPoint’s shares fell 4.7% to £9.73 on the back of the announcement.
The company tried to reassure investors by insisting that plans were underway to mitigate the loss, which in part would be achieved through the positive revenue trends elsewhere in the Bill Payment business, including the robust performance of MultiPay, the company’s omni-channel payments platform.
Board remains confident
The Board remains confident that there will still be a progression in profit before tax before exceptional items for the year ending 31 March 2020.
“After a long and mutually beneficial partnership, it is disappointing for PayPoint and British Gas customers that we have been unable to agree a renewal of our contract”, said Patrick Headon, CEO of PayPoint.
“Bill payments, top-up and e-money transactions remain important services for PayPoint as 99% of the UK population live within one mile of our network of 28,000 convenience retailers.
“Building on the accessibility of this network over the past few years, we have been focused on growing our retail services to better support our retailers and their customers, centred on PayPoint One, our EPoS solution now in over 13,000 sites, parcels, and card payments and ATMs.
“We continue to believe these initiatives are key to embedding PayPoint at the heart of convenience retail and driving future growth and profits.
“Customers can continue using PayPoint outlets to top up their prepayment meters by switching to a broad range of alternative suppliers which can be found on our website, paypoint.com/energy”