PAY (Paypoint) released its interims today, sending the shares down 8% to 913p in this morning’s trading. Revenues were down 1.4%, adjusted EPS was down 4.6%, cash was up 4.9%, and the dividend is up 14.5%. A more detailed commentary is available at the CIS blog.
I bought shares in PAY back in May 2015 at 828p. Needless to say, I was pleased with the gap up in share price shortly after my purchase, and was sitting on about a 20% profit over a short time period. I was happy with that.
I only had a small holding, and I was actually planning to top up on the share early next month. “Topping up” is something I now longer do, but as I had planned to make it a longer term holding, I thought that adding a little to bring it up to a proper holding size made sense.
My reason for buying it in the first place was that it offered a good yield, has returns on capital above 15%, net cash, and a dividend that was growing at least 5.5% pa.
Today’s events have given me pause.
Here’s the chart:
Remember: I am lousy with charts. But there’s some interesting things going on here. I first note that there is support at 800p, around the price level I bought. The shares then gap up at the end of May. 1000p looked sustainable, but as we have seen from today, it was not to be.
I have a “rule” now that I can sell whenever circumstances dictate – such as my stoploss trigger on APH – but I only buy once a month. It is to prevent me from over-trading.
I still like PAY – for now, anway – and I am considering my options. It still seems like a good business, so I want to stick with it. My current thinking is to set aside the amount I had planned for PAY for the monthly purchase. I could put an alert for 800p, and buy it on or after my monthly top-up date if it is triggered.
I may change my plan after further reflection.