Shares digital

Shares said last month bill payments specialist Paypoint (PAY) faces tougher times as its key market matures, and now chairman David Newlands has sold 290,143 shares, leaving him only 5,000, while chief executive Dominic Taylor has sold 1.5 million shares. Newlands, a city grandee will have known his potential impact on sentiment, especially as no attempt was made to explain it to the market. Taylor’s sale may have been influenced by changes in the CGT regime.

The interim management statement was issued immediately before these sales and was quite cheerful. The number of terminal sites increased by 3.3% in the past four months, with 8% growth in Romania, where the company now has 3899 terminals (16.6% of its total).

The group has two competitors for its bill paying services – the Post Office and PayZone (PAYZ:AIM). The former is declining and the latter is suffering from internal problems. PayZone is reported to offer higher commission to retailers but Paypoint would claim to be more reliable. It also enjoys exclusivity in some contracts such as electricity and transport.

Last year the company bought two internet payment businesses, which process payments between consumers and web merchants via acquiring banks. The objective is to offer existing customers a cash and internet payment option. UBS believes this could be ‘strategically a very important decision’. House broker Cazenove is forecasting earnings of 30.9p rising to 34.5p next year. At 600p the shares are selling on a PE of almost 20, falling to 17.5 next year, while there is little support from the 2.6% prospective yield.

Shares says: The shares look to have had the best of their run for now, so follow the board’s lead.