Takepayments, one of the leading UK ISOs, has reported its 2021/2 results, revealing a robust performance with sales and profits growing strongly. Although the company is focused firmly on small businesses trading in retail and hospitality, it showed no signs of the slowdown reported by its arch-rival, Paypoint.
Takepayments was established following the acquisition of Stockport-based Payzone by a management team led by Clive Khan, with funding from Grovepoint Capital, a very low profile private equity firm founded by Sir Bradley Fried, the European chair of Goldman Sachs. Kahn has a track record in building successful ISOs, having previously sold Card Save to Worldpay in 2010.
Sales at takepayments rose by 29% to £52.7m for the year ending in August 2022. The lion’s share of the revenue comes from card acceptance, including terminal rentals and commission fees from merchant acquirers, with Barclaycard being the most prominent. Management attribute higher sales to increased numbers of merchants, now standing at 64,000, and higher average transaction values. Each merchant generates an average of £823 revenue. Income from ancillary services, such as merchant cash advance and PCI fees, made a very positive contribution, growing 59% to £4.9m.
Administrative expenses were up £10m to £49.9m, as takepayments recruited a substantial number of staff. Headcount increased from 371 to 478, with hiring in both sales and administrative teams. The average cost per employee increased by 6% to £47,433.
Operating profit grew strongly, by 32% to £5.1m, with operating margins rising from 9.4% to 9.7%. Underlying EBITDA, the company’s preferred measure of profitability, increased by 20% to £13.2m. The difference between operating profit and underlying EBITDA can be attributed mainly to the £7.75m of depreciation and amortisation, mainly linked to takepayments’ extensive estate of payment terminals. The company spent £11m on new payment terminals during the year.
