PayPoint plc (PAY) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to the PayPoint Preliminary Results Conference Call. I am George, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's a pleasure to hand over to Nick Wiles, CEO. Please go ahead.

Thank you very much and good morning, everyone. Welcome to the presentation of our results for the year-ended 31st of March 2024. As you can see from our agenda slide, we follow the usual format with me covering an overview of our results, strategy update, our business review and our outlook while Rob will be covering the financials ahead of us opening up to Q&A. We turn to the overview slide. It's really pleasing to be reporting a really robust performance for the year, which I think very much underpins our confidence in the outlook for the current year and is really an important step towards our near-term target of GBP 100 million EBITDA. I think it's fair to say we delivered a real standout performance in parcels and in digital payments and made good progress in our other key growth areas. In the final quarter of the year, we streamlined our organizational structure and our cost base to support the next stage of our growth. And we're really pleased to announce today alongside these results, our intention to commence a 3-year share buyback program with a clear intention in the first year to buyback at least GBP 20 million of equity with the potential to increase this further in years 2 and 3. This slide very much summarizes our financial performance for the year. The key financial metrics of the business as a whole were strong, and the overall financial performance of the business has more than met our expectations for the year as a whole. We will cover the individual divisional performance in more detail later. But as you can see, the net revenue headline performance shows solid growth in Shopping, slightly down in Payments and Banking, an outstanding year in E-commerce. Turning to the share buyback. This is the final slide in this section, which covers the share buyback program which we're announcing today. We will commence the program with a buyback of at least GBP 20 million over the next 12 months with the potential, as I said already, to increase this further in years 2 and 3 subject to our performance, market conditions, our overall cash generation and capital needs of the business. With respect to dividends, throughout the period we propose to continue increasing dividends at a nominal rate resulting in our dividend cover moving beyond our current earnings cover range of 1.5x to 2x to a cover of over 2x by FY '27. Following significant investments we've made in the past and certainly over the past 4 years, which have largely been done and financed from our own financial resources, which have been necessary to build growth; this program is very much the next step enhancing shareholder returns whilst balancing the capital needs of our business, our strong dividend policy and ensuring we maintain an efficient capital structure, which we see as being somewhere around 1x net debt to EBITDA. And with that, I'll now hand you on to Rob, who will take you through our financial performance in more detail.

Thank you, Nick, and good morning, everyone. If we go to the first slide that's got net revenues for the year of GBP 181 million, which is up 40.4% or GBP 52.1 million versus the prior year. Of this increase, GBP 47.9 million is the inclusion of a full 12 months of Love2shop and the remaining GBP 4.2 million is from the PayPoint segment. I'll cover this in more details on the next slide. Underlying EBITDA of GBP 81.3 million is an increase of 32.6% or GBP 20 million year-on-year again driven by the full 12 months of Love2shop which accounted for GBP 16.8 million of the GBP 20 million and the remaining GBP 3.2 million EBITDA growth coming from the PayPoint segment. Underlying PBT for the year of GBP 61.7 million is up 21.5% or GBP 10.9 million on the prior year with Love2shop accounting for GBP 10.7 million of this increase and GBP 200,000 for the PayPoint segment. Adjusting items of GBP 13.5 million include GBP 8.1 million of amortization of acquired intangibles, we had a step-up versus the prior year primarily because of Love2shop inclusion; we've got GBP 200,000 net movement on convertible loan notes and GBP 5.2 million of exceptional items; which is GBP 2 million in restructuring, GBP 2.1 million in legal costs and defensive claims and GBP 1.4 million in respect to the recent refinancing. Diluted EPS, excluding adjusting items of 62.6p, is up 3.8% on the prior year of 60.3p. And lastly on the slide, net debt of GBP 67.5 million is down 6.8% versus the prior year of GBP 72.4 million, which I'll cover in a few slides on cash flow. The next slide gives more detail on net revenues across the group. For the PayPoint segment, overall revenue growth of GBP 4.2 million is driven by strong performance in E-commerce which saw a revenue growth of 61.6% to GBP 11.8 million supported by transaction volumes exceeding 100 million in the year. Shopping provided positive growth of 3.9% with growth in service fees, card payments and other such as FMCG more than offsetting ATM and Counter Cash performance. This growth has been part dampened by a drop in the Payments & Banking revenues, which dropped GBP 2.7 million year-on-year and that's driven by the decline in legacy cash and bill payments plus some one-off energy build support scheme benefit for the prior year which benefited digital to the tune of GBP 3.5 million. In terms of Love2shop revenues, the full year net revenue of GBP 51.3 million compares to GBP 3.4 million for the prior year, which just included 1 month post acquisition. If I now move on to profits, the slide shows the profit progression year-on-year. The first 4 columns to the left reconcile the prior year reported and underlying profits with adjusted profits of GBP 50.8 million before exceptional of GBP 5.6 million and GBP 2.6 million of other adjusting items. The next 6 columns in the middle of this slide show the drivers of the GBP 200,000 increase in PayPoint segment profits and we can see here the GBP 2.4 million and GBP 4.5 million revenue growth from Shopping and E-commerce part dampened by GBP 2.7 million decline in Payments & Banking plus cost growth of GBP 3.4 million and GBP 0.6 million extra financing costs, which I'll cover on the following slide. These movements give GBP 0.2 million step-up in profits from GBP 50.8 million to GBP 51 million for the year and the extra GBP 10.7 million of profits comes from Love2shop giving the overall group profits of GBP 61.7 million. This slide gives a little bit more granularity on cost delta versus prior year. For the PayPoint segment, overall cost went up 5.3% from GBP 75.2 million to GBP 79.2 million and you can see some of the drivers on this chart. Asset leasing costs of GBP 1.6 million, investment in fuel sales GBP 1 million, investment in people and salary increases of GBP 2.4 million, finance costs of GBP 0.6 million, plus GBP 1 million of D&A and other; and these costs have been part dampened by GBP 1.1 million of PLC synergies and GBP 1.5 million of lower fulfillment costs. And bringing in Love2shop costs of GBP 37.2 million gives an overall cost base of GBP 119.3 million. In terms of cash flow, reported profits before tax post adjusting and exceptional were GBP 48.2 million and the key movements to get to the GBP 57.9 million cash from operating activities are essentially D&A and working capital. For D&A, the GBP 20.7 million for the year is up GBP 10.2 million on the prior year and the delta is really driven by 11 months D&A from Love2shop of GBP 2.3 million plus an extra GBP 5.5 million of acquired intangibles and plus an increase in PayPoint D&A of GBP 2.4 million. Working capital is an outflow of GBP 11.8 million for the year and the 3 key drivers of that GBP 11.8 million are essentially: a, an increase in credit terms for a key customer, which is GBP 3.7 million; b, an unwind in accrued acquisition cost for the Love2shop acquisition, which was GBP 3.2 million; and lastly, higher levels of breakage in Love2shop which accounted for approximately GBP 3 million. This gives cash generation of GBP 57.9 million and after deducting tax of GBP 8.4 million, CapEx and other of GBP 17.2 million, GBP 0.1 million of investments and GBP 27.3 million of dividends gives an overall inflow for the year of GBP 4.9 million and that's brought our net debt down, as I said earlier, from GBP 72.4 million to GBP 67.5 million. Commenting briefly on the balance sheet. The 2 most sizable swings on this slide that I've really already covered are: other intangibles, GBP 8.2 million lower driven by about GBP 8 million of amortization of acquired intangibles; and secondly, on working capital the GBP 11.7 million swing, which again is driven by the swings that I spoke of previously. On the last slide before I pass back to Nick. On dividends, the 19.2p final dividend is a progressive increase compared to the 18.6p for the prior year. The GBP 20 million share buyback Nick has covered and in delivering our 3-year plan, it provides the opportunity to maintain or potentially increase the level of buyback in years 2 and 3 whilst targeting gearing levels at 1x and we will revisit the buyback in 12 months' time to determine the level of buyback for year 2. On capital allocation, we will continue to invest in capital expenditure to support revenue growth and the resilience of our IT estate and also pursue investment opportunities that are of strategic importance to the group. On net debt, I covered this mostly on previous slides and the main outflows for FY '25 will be dividends, the share buyback, along with CapEx and investment spend. On financing, this month we successfully renegotiated a new facility and have brought in 2 new lenders in the last few months. This is a GBP 135 million facility, of which there is a GBP 90 million RCF plus a nonamortization loan of GBP 45 million. The duration of facility is 4 years and therefore, expires in June of 2028. I'll now pass back to Nick.

Rob, thanks. Starting with our strategy. Really on this slide we've highlighted the really key building blocks we've identified to delivery of our near-term target of GBP 100 million EBITDA and the platform really to sustain growth beyond that into the medium term. Over the next few slides, I will take you through our positioning in each of these areas today and the future opportunities which underpin each of these building blocks. In parcels, we continue to invest and grow our Collect+ network to achieve our ambition to be the #1 out-of-home network in the U.K. and to deliver an outstanding service to our carrier partners and their customers. Last year was a landmark year with parcel transactions for the first time exceeding 100 million transactions delivering a record net revenue contribution of GBP 11.8 million whilst continuing to grow the Collect+ network to over 11,000 locations by the year-end. Looking forward, our multicarrier strategy and selective growth in our Collect+ network are key to achieving our ambition of a network and a parcel channel, which is transacting over 250 million parcels per annum. To this end: we continue to expand our locations, work in partnership with each of our carrier partners to maximize customer out-of-home adoption and drive parcel volume through our network. We believe Collect+ remains a great opportunity with scope for significant volume growth and network expansion from here. In card processing, in the past I've described our card business as work in progress. From the work we've done over the past year, I now believe we have the necessary ingredients in place to deliver a really important step change in the performance of this business and its positioning in the marketplace. We've grown both our Lloyds Cardnet and EVO merchant estate over the past year driven by the significant progress we've made in 4 critical areas. We've enhanced our merchant proposition; we strengthened our field, telesales and retention teams; increased the focus on retention and churn reduction; and increased investment in AI and data analytics to support these teams. We've established strong price disciplines and governance leading to improved margins in both new and back book business. Our customer support investment has led to a significantly improved onboarding experience for new merchants, including a halving the onboarding time and a rebalancing of new contracts from 1 month a year ago to a majority now in excess of 12 months. It's a combination of these actions that are leading to better margins and longer merchant lifetime value. This progress in the infrastructure of our card business is a great platform from which to launch our Lloyds banking partnership later in the year, which will bring in all of our new card merchant business on to a single acquirer platform and bring further enhancements to our proposition and merchant experience. We believe after the hard work of the last few years, all the ingredients are now in place for this to be an outstanding business with significant growth potential and a genuinely unique USP in the marketplace. In Open Banking and Digital payments, delivering a multichannel payments platform supporting integrated payments across all payment channels is crucial to the growth and success of our payments business. Growth in Open Banking and Digital payments is fundamental to this success and the transition we've had for some time now from our legacy cash flow payments business. Open Banking adoption is early stage in the U.K., but growing rapidly and I'm really pleased with our positioning in this area through our partnerships with OBConnect and Aperidata. Our client list is growing strongly in corporate [ comp] and broader Open Banking services and we are already 1 of the leading processors of Open Banking payments in the U.K. The applications for Open Banking across our client base are significant and we are well placed to continue our rapid growth in this area. Through our MultiPay platform, we continue to win new business as well as enhancing the platform of payment services we offer our existing clients. We continue to win new business across a number of key sectors, including housing associations, charities, local and central government departments. And it's great to see the coordinated approach we're seeing already between the PayPoint and Love2shop corporate teams as they work together to win new business. A combination of our capabilities in Open Banking and digital payments create significant opportunities for us in both existing client base and also in new client sectors. Turning to Love2shop and Park Christmas Savings. A year into the acquisition of the Appreciate Group, it's clear we bought a really excellent business and one that we can see has significant potential for growth. We've already begun the process of investing in the technology platform to support a better corporate customer experience. We've been investing into the corporate sales team to broaden our corporate coverage and our reach, and we've been reconfiguring our market resources to actually drive better value and effectiveness in the market. A great example of this at work is our High Street vouchers platform, which over the last 12 months we've totally reconfigured and as a result is now performing strongly and it’s great evidence of the rapid turnaround we can achieve in a single year. The building blocks of future growth in these businesses are focused on expanding our partnerships for our Love2shop rewards and prepaid saving solutions, expanding our range of products and services that we can offer our corporate clients and leveraging the opportunities for our MBL card management services platform where I think we've barely scratched the surface and the growing delivery of our white label savings schemes model and the enduring success of Park Christmas Savings. In addition, the growing collaboration between our PayPoint and Love2shop corporate teams I've talked about already. These are creating new opportunities and really showing an increasingly joined-up business. A year on I see great renewed and innovation in both Love2shop and Park Christmas Savings, which we know are key ingredients to the ambition and expectations we have for these businesses. Turning to cash and local banking. Building a community cash access and banking network for both consumers and SMEs is the major opportunity for our business and it very naturally builds on the network we've already developed, which today offers ATM and cash at the counter services and the consumer cash deposit service for a number of the neobanks, including Monzo, Revolut and Chase. We have the network coverage, we've got the technology and we have a low-cost solution such that we can be an important part to the High Street banks as they seek to offer their own SME and consumer customers more locations and longer opening hours for their specific cash banking needs. We expect to make progress in rolling out this service in the coming months. Turning to our sales for our retailer partners. One of our key objectives in recent years has been to increase the services we can deliver through our retailer network, to increase the support we can bring to a community, create greater opportunities for retailers to generate commission and income from being a PayPoint retailer, drive revenue into our own business. On this page, we highlight the strong list of growing services that we provide through our retailer network. From a time not that long ago when the primary service being offered was a bill payment cash top-up, our proposition today has grown more practically into a strong portfolio of commission generating services that we can offer ranging from parcels, cash access, participation in FMCG brand campaigns, support of government services and most recently in the addition of Love2shop gift cards. The majority of our PayPoint retailers today offer at least 3 PayPoint services with a growing number offering more than 5 through their store and already we have further services in mind for the next phase of rollout. This is really important to the continuing positioning of PayPoint and its services at the heart of the local community. Turning to the business review. I feel much of the financial detail of this section has already been covered by Rob. So, I'll move through the next few slides relatively quickly and focus on the highlights for each business area. Starting with Shopping. Overall, positive performance from our Shopping business with net revenue growing by 3.9% and growth in both retail services and our card payments business. We've delivered estate growth in each of our products. And then really turning to the highlights. Our service fee income grew by 10.1% reflecting both an RPI increase in our fees and a growing PayPoint estate. Our card payments net revenue increased by 2.8% with growth in both our EVO and Lloyd's Cardnet merchant estates and growth in transaction volumes of over 4% in each of our front books. This performance reflects the good sales performance, better merchant retention, better pricing governance and better merchant [Technical Difficulty] experience throughout the year. Our performance in the ATM business is still not where we want it to be and we're in the process of taking further action internally to improve our estate performance and our retailer compliance. This is a solid business and I expect us to make progress in recovering this performance during the current year. Looking ahead, there are a number of emerging opportunities beginning to scale in the business, including the growth of our FMCG brand campaign engagement, our foreign currency offering, an expansion of our Park Christmas Savings Super-Agent network. Turning to E-commerce. A really strong performance in this business with net revenue up in the year by over 61% to GBP 11.8 million and parcel volumes up by over 77% to 100 million parcel transactions in the year. Our carrier partners continue to grow and selectively we are growing our Collect+ estate and in U.K. locations where we see they bring value to the network. We continue to invest in our infrastructure to support the network including a further rollout of printers across the estate. As we look forward to emerging opportunities in the current year, we are broadening the range of services we offer each of our carrier partners, expanding our network into locations such as universities and hospitals and our Collect+ network and established carrier relationships are now well set to deliver further significant growth as an out-of-home deliverer becomes even more important to the choices available to both carriers and consumers. Payments & Banking, our overall performance showed a small decline in the year. Although after excluding the prior year benefit of the government EBSS scheme, our digital payments net revenue was up by almost 10%. Cash through to digital broadly flat and our cash flow payments and top-ups were down 2.5%. So overall I think a solid performance in the year. The underlying performance of MultiPay and our digital platform remains encouraging with the new client business pipeline expected to deliver another strong year for both in year and recurring year revenues. Our cash through to digital business appears now to have stabilized. Looking ahead, we expect further growth from a combination of new card schemes and growth in the neobank cash banking activities, some of which I've described earlier. In cash bill payments overall, we saw a much more stable H2 after the weakness experienced in H1. In the current year, the impact of the reduction in the energy price cap and continued tight family budgets will impact our prepay energy transaction volumes although to the extent to which we see a decline is still not clear during this first half. Looking forward, new business growth looks well established across a number of sectors including housing and charities. As I said already, early collaboration between the PayPoint and the Love2shop teams is encouraging and already delivering results as we continue to expand further both in Open Banking and the provision of government services. Love2shop, overall a good first year contribution for both Love2shop and Park Christmas Savings. As we indicated in our Q3 statement, the Love2shop corporate billings came in a little lower than we had anticipated from the peak Christmas period, but the Q4 bounce back although seasonally less important was better than expected. And it's pleasing to see Park Christmas Saving billings showing modest growth year-on-year. Finally, strong performance from MBL with the value processed on this platform up 36.9% in the year. Turning to the highlights. As I've said, encouraging progress in Park Christmas Savings and a positive start to the outlook for the 2024 year. We're already looking to the 2025 savings campaign and the opportunities we have in mind to drive further billings growth there. As I've said already after a weak Q3, we finished the year well in Love2shop corporate and we've been strengthening further our platform in this area and our sales team to better position ourselves for growth in the current year. As we look forward, we see significant opportunities for growth in Love2shop delivered through new partnerships, the expansion of the MBL platform and investment in some of the key areas for growth in the business. We're making good progress in growing Love2shop gift card sales in our retailer network, developing partnerships in this area. And in Park Christmas Savings, we're now looking to expand into white label savings schemes and already we have a number of live conversations with interested parties. As I indicated to you at the start, a year on from the acquisition of this business, it's clear there's significant opportunity to accelerate growth in both Love2shop and Park Christmas Savings. Turning finally to the outlook for the business and perhaps like every year, there are a number of key ingredients to our outlook. Firstly, we've done work in the final quarter of last year to streamline our organizational structure, reduce costs and give ourselves the opportunity to invest in the key growth areas across the business. In terms of trading, early into the year it's clear that the consumer behavior across a number of our business areas has remained subdued although most recently I would say less so and as such, our expectation remains that the consumer outlook will continue to improve as the year progresses. We remain confident in the prospects for the business and the actions to be taken to underpin growth for the year ahead and the delivery of our medium-term financial targets. We remain confident in delivering further progress in the current year and our commitment today to share buyback of at least GBP 20 million over the next 12 months as part of a 3-year program and alongside our increased final dividend for the year further reflects our confidence in enhancing returns and delivering for our shareholders. And with that, very happy to answer questions.

[Operator Instructions] Our first question comes from the line of Joe Brent and Liberum.

Congratulations on a good set of numbers. Three questions if I may. Maybe take them one at a time. Firstly, you talk about 250 million parcels, which is obviously well more than twice where you're currently running. What's the sort of time frame of that and what are the key parts of that business today which can deliver that growth?

There's always the danger when you put a number out there that you then have to sort of kind of work back from that. I mean I think we slightly want to celebrate going to 100 million because that in itself was a target that was well beyond us a few years ago. Having said that, I think the very specific plans we've got when we've talked to each of our carrier partners plus clearly the benefits and the opportunities from out-of-home consumer adoption and the direction of travel there gives us real confidence actually that there is momentum really building actually for consumer out-of-home adoption. It's great that sort of big carriers such as Yodel and actually our partnership with Vinted is a real opportunity to drive store-to-store volume and that's clearly a channel actually which Vinted customers really appreciate and actually really value. And I would like to think that some having got our raw mail network to 5,000 sites by the middle of July, that will begin to sort of ramp up in terms of volume, which will now put more of their parcels actually through our network and actually to our out-of-home locations. And one shouldn't underestimate the value that we're seeing actually in the partnership we've also developed within post. So I would say the groundwork has been very much developing the carrier partnerships, working hard with them to move consumer adoptions and experiences to the right place, all of which actually says we've got the building blocks I would like to think within the next 2 to 3 years to get towards that target of 250 million parcels through the network per annum.

And the second question was around your Super Agents. I think that kind of got to the 1,700 level and presumably that recruitment focuses on the Christmas period so a bit of a pause now. What are your plans? What are your thoughts about how you develop that network over the rest of the year and beyond?

Yes. Look, I think a year into creating that new channel actually for Park Christmas Savings, we have to think about how we balance and support that against some of the other initiatives around growing sort of essentially prepayment saving schemes for specific events. And I think it's going to be one of those moments where we've got several conversations live at the moment around other major organizations that are looking at prepaid saving schemes and we're going to have to balance which of these we actually support. I mean part of my sort of hesitation is that I think one of our own criticisms internally and I think certainly amongst investors has been don't try and do too many things; but do the things you do, do them well. And I think we're going to have to balance how hard we go with the next phase of our Super Agents resource and needs to succeed there versus actually the similar commitment and resource requirement to succeed in other prepaid savings schemes. So I think year 1 in, we learned quite a lot. We recruited retailers well. I think we recruited savers through those retailers less well and I think there were some learnings there which we would need to apply to the next Christmas Savings campaign, which is for 2025. And I think we'll need to reflect on that, as I said already, balanced against how we use the same resource to drive other prepaid events and whether they potentially generate more value. So I would say that the Super Agents year-in is work in progress and then how we take it forward from there needs to be balanced against the other opportunities in prepaid saving products.

And then finally for me, you've obviously announced this major partnership expansion with Lloyds. Could you give us an indication of how and when that will start to impact numbers?

Yes. I mean this has been quite a long time in the development if I'm honest with you and I think the reason being because how we develop our card processing business and importantly, the partnerships, has to be very much for the long term. And I think I'm just going to the page in our presentation deck, Page 17. Really what Page 17 in the deck is very much about is saying that in the second quarter of this current financial year so sort of in that period sort of July through to September, we'll be in the first phase of that rollout of the Lloyd's Cardnet partnership and then we go for a full launch really from the 1st of October. So from the 1st of October onwards, all new card merchanting business will be written on to the acquiring platform of Lloyd's Cardnet and as you see, that's very much driven by further enhancement actually in the proposition. And by that, I mean 12-month fee-free banking in terms of a business account, a competitive commercial card offering and I think more importantly, that whole support framework that's needed actually to really give our merchants the support they need in order to be quickly onboarded with a really broad proposition, next day settlement a merchant [ at ] plus actually the enhanced banking offering as well. So I think with the groundwork that we've already done in terms of improving our engagement with our merchants, improving our governance and pricing discipline, this will be buried amongst the building block for the next stage actually with Lloyd's Cardnet. So we hope to be in full flight actually during the final quarter of this calendar year always to be right on to new business.

Our next question comes from the line of Michael Donnelly and Investec.

Just 2 for me, Nick. On Open Banking, there are some extraordinary growth forecasts out there for the market both globally and in the U.K. Do you have any sense right now for what your realistic addressable market in the niche that you're choosing to play in is for U.K. Open Banking? And following on from that, what major threats do you see on the road to getting to capturing your bit of the TAM? And then secondly, the parcels business and the 15 student unions that you're active in now is extremely interesting. Can you just give us a small brief case study of precisely which services you're delivering in these places at the moment? Just to get a clear idea in our heads about how that service operates on a campus as opposed to in a convenience store.

If I deal with Open Banking first, the honest answer is we don't know. I think that Open Banking as a payment channel is evolving incredibly quickly and I think we're only beginning to understand what the sort of full range of Open Banking tools can actually do to support payment journeys, more importantly actually the broader way in which consumers are able to understand their accounts to budget and actually make better financial decisions. So for us, Open Banking means a number of things. Firstly, it means a confirmation of payee, which is becoming increasingly familiar to consumers and to corporates. We're actually really growing very quickly and supporting the corporate market there and I think there is really material and sort of quantum scale growth that we can see for our confirmation of payee business and the way we support our corporates and that's obviously in partnership with OBConnect. Secondly, in terms of payments, I mean very clearly Open Banking payments lend themselves very well to the sectors that we support; that's housing, that's energy, that's charities; and I think our penetration in those markets is today relatively small and growing very quickly, as I said already. Our Open Banking platform is already one of the largest open banking payment platforms in the U.K. in terms of transaction volume and again I think that's going to grow strongly double digit both in Open Banking Corp and Open Banking Payments. So I think we're talking about quantum double-digit growth really sort of compound over the next 3 to 5 years. In the other area, which is actually the area of information, I think the ability to support agencies like Citizens Advice is a great example of actually working in partnership with Aperidata to actually create an Open Banking framework platform. So that actually in the case for example of Citizens Advice, we can actually give them the tools to support their customers as they come in needing support around payment planning and importantly, actually sort of managing their finances. I think that's another area which is growing quickly. Similarly, we're using that same technology and platform capability to support utility companies when they start thinking about how do they apply and use the right rules and support for discretionary credit. So I think each of these key areas of Open Banking are largely in their [ realms ] growing quickly and I think that we're really well placed. And I really generally mean I'm not quite sure yet how fast and how big they could be, but it's really good for PayPoint to be in a position to be at the front end of something rather than actually sort of follow on in terms of growth opportunity. On parcels and I think a really good case study is probably Leeds. It was an early adopter and the student union in Leeds have been a very early adopter of actually sort of creating a pickup, dropoff location actually for parcels and we've seen really, really good volume from that student union location. And what it's done is actually become a real enhancer to the out-of-home proposition for that local area. And what we see is not only the Leeds student union volumes grow, but also the volumes of the locations that are offering Collect+ grow in the immediate vicinity to the Leeds student union location purely because the adoption rate from consumers goes up. And we've got something similarly running with Durham. We've got some other strong university performances as well. And I could easily see a network here of 30, 35 universities really enhancing actually the Collect+ network proposition into the right demographic, into the right age group for sort of early adoption all out-of-home delivery. And I do think actually as we move into hospital locations, it will give the same ability to support a different demographic and a different working community that probably needs support for pickup and dropoff out of hours given the particular sort of timing of working constraints in for example the National Health Service. So, I think that's a really good example of actually using a new channel and a new sort of network channel to enhance the Collect+ network as a whole.

Nick, that's really great. And just quickly when you talk about transport hubs, does that mean mainly railway stations where I normally see all the bank of Amazon sort of boxes? Is that what you're thinking in there?

We are actually and I think that as with all, it's all very specific and it's all about identifying the right location that actually supports and complements the existing network in that area. And it's interesting how there have been 1 or 2 conversations we've had around very specific opportunities. We've had some conversations for example with some village merchants around things we might better do with them. And it's all-around sort of looking how each new channel complements and strengthens the overall Collect+ network.

[Operator Instructions] Ladies and gentlemen, there are no further questions. I hand back over to Nick Wiles for any closing remarks.

Thank you. Look, thank you very much, everybody, for joining us this morning. We have our AGM on the 1st of August, and we'll be releasing our Q1 trading update on the same day and very much look forward to catching up with you in the meantime. Thanks for your attendance this morning and interest in our company. Have a good morning.

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