Paypoint tops FTSE 250 faller as profits drop after slashing the value of its online payment business by £18million 

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Shares in Paypoint took a pummeling today after the cash payments firm wrote off £18million from the value of the online business that it is struggling to sell as it reported a drop in first half results.

The company is trying to flog both its mobile and online payment businesses to focus on its retail offering. The businesses have struggled for growth amid an explosion in competing online and mobile payment systems. 

The company said: 'Offers made for the Online Payments business have not met expectations but reflect the potential buyer's uncertainty of the business' success with new products, which are at an early stage of their life cycle. 

Switch thrown: Paypoint's share price tumbled today after the firm's first half pretax profits plunged to just £3.2million, from £22.5million a year earlier after taking a big impairment on the value of its online business

It added: 'In view of the uncertainty of the eventual outcome, management have recorded an impairment of all the goodwill in the Online Payments business of £18.2million.'

Paypoint - which runs terminals in supermarkets and convenience stores that allow customers to pay their energy bills or TV licence - said it still expects to do a deal for Online Payments business by the end of March.

As a result of the write-down, the company's half year pretax profits plunged to just £3.2million from £22.5million a year earlier. Revenue decreased to £102.8million, from £104.3million, due to a decline in mobile top-ups. 

Paypoint's chief executive, Dominic Taylor, said: 'Overall the results are in line with our expectations for the first half, with the performance from retail networks offset by losses in mobile and online payments, which we expect to sell in the second half of this financial year as announced in May this year.'

On the blocks: Paypoint's mobile and online payment businesses have struggled for growth amid an explosion in competing systems, with the firm still looking to offload them in the second half of its financial year

The impairment-impacted results, sent Paypoint shares down 6 per cent, or 63.5p to 901.0p, in late morning trade - a six-month low for the stock. 

Nevertheless the company’s retail services business which handles ATM, SIM card and parcels payments transactions is growing strongly, as is the Collect+ joint venture it has with delivery company Yodel that handles click and collect and parcels returns transactions.

Transaction volume rose 1.1 per cent and net revenue by 1.2 per cent in Paypoint’s largest business, the bill and general business that provides transaction handling for companies like energy providers.

Paypoint lifted its interim dividend to 14.2p from 12.4p, and Taylor said the increase 'anticipates double digit growth in the dividend for the year as a whole and reflects our confidence in the business and its long term prospects'.