Allpay, the UK public sector payment specialist, reported a 6% increase in revenue to £40.4m for the year ending June 2022. However, cost inflation resulted in a reduction in operating profits compared to the previous year.
As one of a small number of specialist providers of bill payment solutions to the UK public sector, Allpay offers a range of services including direct debits, card payments, debt collection tools, a white label app, and the ability to accept cash payments via the Paypoint network. The company boasts over 500 housing associations and one-third of local authorities as clients.
The most recent reports show Allpay processed 70.1 million transactions annually worth £8.6 billion.
The company’s core bill payment business remained flat in FY 2022 at £34m, but sales from pre-paid cards rose 73% to £6m. The public sector has been increasingly using pre-pay cards to pay benefits and social security payments, and at year-end, Allpay held £92m in cash balances from pre-pay clients, almost double the previous year’s figure.
Founded in 1994 by Tony Killeen, who believes his time in the armed forces provided him with the discipline to run his own business, Allpay is based in Hereford in the rural west of England, where it is one of the largest employers. The location offers less competition for staff than more popular Fintech hubs such as London and Edinburgh, and Allpay’s employment expenses for its 256 staff fell 2% to £9.88m.
Overall administrative costs rose 16% to £13.2m, resulting in a 13% decrease in pre-tax profits to £3.67m. Operating margins fell to 9.4%, but the company maintains a positive cash flow, is largely debt-free and pays a consistent dividend. With a blue-chip client base and Killeen now 66 years old and still the sole owner of the company, Allpay may be an attractive acquisition target for UK payment companies.
