PayPoint Plc reported a resilient half-year performance for the period ending September 30, 2025, with progress on key growth projects. Financial highlights include an underlying EBITDA of £37.3 million, a slight decrease from the previous year, and an interim dividend increase of 2.1% to 19.8 pence per share. CEO Nick Wiles expressed confidence in delivering further progress in the current year, despite challenges related to disruptions in the parcels network and slower growth in new business opportunities. The company remains focused on executing strategic projects and enhancing shareholder returns, with a target of over £90 million for the year. The Board at PayPoint remains confident in delivering further progress this year. Shopping divisional net revenue increased by 0.6% to £33.1 million, while service fee net revenue rose by 8.4% to £11.6 million. Card payment net revenue decreased by 3.0% to £16.1 million. E-commerce divisional net revenue increased by 7.5% to £8.6 million. Collect+ saw a strong half year as parcel transactions grew by 20.0% to 74.3 million. Payments & Banking divisional net revenue increased by 4.4% to £26.0 million, with growth through the MultiPay platform and positive progress in new business wins in Housing. Total digital net revenue increased by 39.7% to £8.8 million. Cash payments net revenue decreased by 9.9% to £13.7 million. Legacy energy sector net revenue decreased by 17.7% for the half year, with Love2shop divisional net revenue also down by 9.6% to £17.0 million. Love2shop continues to trade in line with expectations, with proactive management changes expected to lead to a stronger second half performance. Positive Love2shop Business performance with billings up 5.8% at £70.9 million. MBL value processed increased by 98.5% to £81.2 million. Park Christmas Savings expects a flat 2025 savings season. Exciting new product innovation for Love2Shop with a Mastercard digital card launch in early 2026.

Two specific business challenges faced include the impact of a renewed 3-year commercial contract and InPost/Yodel network harmonization, as well as the new business pipeline growth in obconnect. Despite challenges, confidence in obconnect’s capabilities remains strong with promising discussions underway for future growth opportunities. The successful launch of multiple projects enhancing the consumer proposition has been a standout achievement, including the launch of PayPoint BankLocal with the Lloyds Banking Group allowing consumer cash deposits via app. Marketing and awareness campaigns are now in focus for driving adoption of these new services. 1. Lloyds has processed over £10m in deposits since launching a consumer cash deposit service, with 3,000 sites now available. Over 40% of transactions occur outside regular banking hours, emphasizing the importance of retail networks in providing essential services across the UK.

2. Royal Mail has invested £43.9 million in Collect+ to enhance its leading OOH store network. Over 14,000 locations offer parcel services, with 3,000 sites upgraded with Royal Mail Shop branding. The partnership aims to expand over-the-counter services and introduce self-service kiosks by Q4 FY26.

3. Love2shop’s partnership with InComm Payments has led to a +43.5% growth in physical gift card sales. New cards are available in major grocers and High St brands, with plans to launch a digital Mastercard in early 2026 for increased convenience and multichannel sales strategy. The company expects FY26 underlying EBITDA to surpass last year’s numbers, but achieving the £100 million target may take longer due to challenges with the parcels network and slower growth in new business. The focus for the second half of the year includes cost discipline, driving efficiencies, and responding to changing market conditions. Long-term growth targets for FY28 include 5-8% net revenue growth per annum, greater automation, and a reduction of at least 20% in issued share capital. The Shopping Division has seen positive impacts from initiatives like the Store Growth Specialist team and successful launches of BankLocal and Royal Mail Shops. In Cards, efforts to optimize profitability per merchant have included proposition enhancements and improved pricing governance. In October 2025, our new e-comm product with Global Payments launched, featuring Pay By Link and integration with major shopping carts. Business Finance via YouLend provided £14.6 million to businesses, up 58% year on year. Local Banking introduced BankLocal, allowing consumer cash deposits via app for Lloyds, Halifax, and Bank of Scotland customers, processing over £10m in deposits since launch. Plans for H2 include enabling more banks for the service, expanding Counter Cash withdrawal, and developing an SME solution for cash deposits in 2026. Data analytics drive decision-making, delivering value to customers and partners by recommending tailored product mixes and identifying promotions that drive sales.

In E-commerce, Collect+ net revenue grew by 7.5% to £8.6 million with 74.3 million parcel transactions. Royal Mail’s strategic investment in Collect+ has upgraded 3,000 sites with Royal Mail Shop branding and plans to expand to 8,000 sites over the next 6 months. A new 3-year commercial agreement with InPost and Yodel will utilize up to 6,000 Pick Up Drop Off locations within the Collect+ network. In Payments & Banking, MultiPay saw net revenue growth of 17.2% year on year, securing wins in the Housing and Charity sectors. Open Banking solutions are unlocking pipeline opportunities, supporting major clients with cheque replacement solutions and the new Suspense Manager solution. PayPoint is prioritizing winning new business and serving existing clients through Open Banking services and payment channels, with 70 clients utilizing their services including government departments and AccessPay. The company is experiencing growth and success in various areas, including discussions with international banks for secure data-sharing ecosystems and expanding CoP access. In the cash to digital category, PayPoint is expanding its offerings, expecting meaningful additional card load and revenue opportunities for retailer partners. The Love2shop division is also performing well, with growth in various sectors and a strong partnership with InComm Payments. Overall, the company is focused on growth and innovation in various areas to continue its success. MBL, a gift card technology platform, processed £81.2 million in gift card value in the first half of the year, showing strong momentum as a service provider for various retailers. The IDS transaction resulted in net proceeds of £34.1m, which were distributed as a special dividend of 50 pence per share. The Board expects the transaction to be EPS enhancing in the first full year to March 2027. Additionally, an organizational framework program aims to improve operational performance and customer service, with preliminary estimates suggesting £2 million of operating profit upside. PayPoint successfully defended a claim made by Global-365 plc. The Board remains confident in achieving medium-term financial goals and enhancing shareholder returns. The Board of PayPoint has declared an interim dividend of 19.8p per share, a 2.1% increase from the previous year. Total revenue rose by £9.1 million to £144.1 million, while net revenue increased slightly to £84.7 million. Costs also increased, with £1.3 million in additional expenses. Underlying profit before tax decreased by £1.2 million to £25.7 million. Profit before tax fell by £3.2 million to £19.9 million. EBITDA remained steady at £37.3 million. Cash generation decreased to £24.2 million, and net corporate debt decreased to £84.0 million.

In the PayPoint segment, revenue increased by 4.0% to £89.0 million. Shopping net revenue slightly increased, service fees rose, and ATM and Counter Cash net revenue declined. E-commerce revenue grew by 7.5% to £8.6 million, driven by transaction growth. Payments & Banking net revenue increased by 4.4% to £26.0 million, including revenue from obconnect. Cash bill payments and top-ups revenue decreased by 12.7% to £11.0 million. The cost of commission to retailers increased by 6.5% to £21.3 million. PayPoint has increased payment to retailer partners due to higher transaction volume. Total costs rose by £2.0 million to £43.2 million, with a £0.9 million increase in finance costs. Shopping sector services include PayPoint One platform, card payments, and ATMs. Net revenue increased by 0.6% to £33.1 million, driven by growth in service fees. Card payments net revenue decreased by 3.0% to £16.1 million. ATMs and Counter Cash net revenue dropped by 5.0% to £3.8 million. E-commerce net revenue rose by 7.5% to £8.6 million. Payments & Banking net revenue increased by 4.4% to £26.0 million. eMoney transactions yield higher fees due to their complexity, while other Payments & Banking revenue totaled £2.7 million. Love2shop saw £106.7 million in total billings, a 4.6% increase, with revenue rising by £5.7 million (11.5%). Net revenue for the period was £17.0 million, a 9.6% decrease. The income tax charge was £5.0 million on a profit before tax of £19.9 million, resulting in an effective tax rate of 24.9%. Net assets stood at £102.0 million, with current assets increasing to £364.6 million. Cash generation decreased to £24.2 million, with total dividend payments of £13.9 million for the period. PayPoint approved a special dividend of 50.0 pence per share, with a 2.1% increase in the final dividend per share for the year ended March 31, 2024. The company declared an increased interim dividend of 19.8 pence per share, resulting in £46.9 million being paid to shareholders. The Board’s priority is to preserve PayPoint’s balance sheet strength, with capital allocation priorities including investment in the business, dividends, share buyback program, and maintaining an appropriate leverage ratio. The financial statements have been prepared on a going concern basis, with cash and borrowing capacity sufficient to meet the Group’s needs, including dividends. The interim financial statements for the six months ended 30 September 2025 have been approved, showing a profit after tax of £14.9 million for the period. The Group’s statement of financial position reveals net assets of £102.0 million, with a net current asset position of £0.2 million. The Directors have prepared a ‘base case’ scenario indicating sufficient liquidity to meet liabilities for at least 12 months. Despite potential declines in various sectors, forecasts suggest the Group can continue with existing borrowing facilities. The Directors confirm the Group’s ability to operate on a going concern basis. Critical judgements are made regarding the recognition of cash and cash equivalents and restricted funds held on deposit. PayPoint evaluates the existence of binding agreements, funds identification, holder identification, and credit risk. Corporate cash and non-corporate cash are detailed separately based on availability and usage. Restricted funds held on deposit require a minimum three-month hold. Cash and cash equivalents are outlined, with specific amounts noted for different types of cash. Client’s own funds held in trust are specified. Alternative performance measures are explained, including underlying performance measures and adjusting items. Love2Shop billings and net revenue are detailed as non-IFRS measures, along with total costs and EBITDA presented for evaluation. The Group reported its financial results for the period ending on September 30, 2025, highlighting key metrics such as underlying EBITDA, earnings per share, profit before tax, and net corporate debt. Segmental reporting showed the performance of the Love2shop and PayPoint businesses, with revenue and profit figures compared to the previous year. Revenue disaggregation revealed the breakdown of income from shopping, payments and banking, and Love2shop services. The revenue recognition method and seasonality of operations were also discussed, emphasizing the impact of the Love2shop acquisition on the Group’s overall performance. Card terminal leasing revenue remains steady throughout the year, unaffected by seasonality. In the past 6 months, PayPoint’s interest revenue reached £1,355, Love2shop’s interest revenue was £3,415, and non-redemption revenue was £6,347. Other revenue totalled £11,117, with multi-retailer voucher and card non-redemption revenue, and interest revenue from various sources contributing to the figure. Net revenue for the same period was £84,665. Exceptional items, including legal fees and organisational framework costs, totalled £3,162. Tax charges amounted to £4,966, with an effective tax rate of 24.9%. Basic and diluted earnings per share were calculated based on a net profit of £14,588. Investments in Judge Logistics Ltd and Aperidata Ltd were valued at £3,899, with no unrealised gains or losses. The company also partially disposed of its subsidiary, Collect+ Brand Ltd, receiving a total net consideration of £43.5 million. Collect+ Brand Ltd recognized a non-controlling interest, with 49% of post-tax results attributed to it. A post-tax gain of £34.0 million on disposal was reported. Share capital and reserves were updated, with shares issued for awards and under an incentive plan. A share consolidation took place, and a share buy-back program was extended. Contingent liabilities include a claim by Global 365 and an assessment by HMRC. Shareholders approved a share consolidation and special dividend. Principal risks include competition and market trends, with a focus on business diversification and monitoring consumer behavior. Cost of living pressures are impacting consumer activities and spending behaviors, with an uncertain outlook due to wider macroeconomic factors and the implications of the Autumn budget. Emerging technology remains stable, with a medium appetite for innovation and the continual review of AI and new technologies to support service offerings. The Group’s IT transformation trend is increasing, with a focus on delivering resilient services and modernizing technology. Client services trend is stable, with a medium appetite for diversification and improvement. Legal and regulatory compliance is stable, with low appetite for risk and a focus on meeting obligations to avoid fines and reputational damage. People risk is stable, with low appetite for workforce-related risks such as retaining key talent. Cybersecurity risk is increasing, with a low appetite for risk due to the growing volume and sophistication of cyber attacks. PayPoint is increasing efforts to prevent cyber-attacks as risks rise. The Executive Board regularly assesses cyber security and data protection. The company is ISO27001 and PCI DSS Level 1 certified, with robust incident response plans in place. Employees receive cyber security training, and monitoring tools are implemented. Risk of business interruption is managed through comprehensive business continuity and disaster recovery plans. Credit and liquidity risk is increasing, but the Group has effective processes to manage counterparty risk. Operational delivery is stable with a focus on key initiatives. PayPoint continues to focus on ESG and climate responsibility, implementing measures to reduce carbon emissions. PayPoint Plc is moving towards electric cars for its company fleet to promote environmentally friendly travel. The company also maintains open communication channels with employees and engages in socially responsible initiatives like volunteering and mentoring programs. The independent review report confirms that the interim financial statements have been prepared in accordance with UK-adopted IFRS and are in line with the Disclosure Guidance and Transparency Rules sourcebook of the UK’s Financial Conduct Authority. PricewaterhouseCoopers LLP conducted the review, concluding that the financial statements are accurate and meet reporting standards.

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