PayPoint FY25: EBITDA up, Buyback boosted

PayPoint Plc (LON:PAY) has announced its results for the year ended 31 March 2025.

Further progress towards £100m EBITDA by end of FY26

New targets established for the Group for the next three years, including share buyback programme increased and extended to at least £30 million per annum till the end of FY28

GROUP FINANCIAL HIGHLIGHTS

• Underlying EBITDA¹ of £90.0 million (FY24: £81.3 million) increased by £8.7 million (10.7%)
• Underlying profit before tax² of £68.0 million (FY24: £61.7 million) increased by £6.3 million (10.2%)
• Net corporate debt⁷ of £97.4 million increased by £29.9 million from opening position of £67.5 million, reflecting previously announced investments and the ongoing share buyback programme
• Final dividend of 19.6 pence per share declared vs the final dividend for the year ended 31 March 2024 of 19.2 pence per share

Nick Wiles, Chief Executive of PayPoint Plc, said:

“This has been another year of progress for PayPoint where we have delivered a resilient financial performance and made further significant steps towards delivering £100m EBITDA by the end of FY26. These results reflect both the resilience of our businesses in the current challenging economic environment and the impact of our growing capabilities as we unlock further opportunities and growth across our four business divisions.

Looking ahead, in addition to our existing target of £100m EBITDA for the current year, we have now established new targets for the Group for the next three years to the end of FY28, underlining our confidence in the future growth prospects of the business: achieving net revenue growth in the range of 5% to 8% per annum across the Group; establishing an organisational framework which will deliver greater automation of processes and greater agility to support the delivery of our plan; and delivering a reduction of at least 20% of our issued share capital through an enhanced share buyback programme, consistent with a prudent capital structure and leverage in the range of 1.2x to 1.5x.

We have had an encouraging start to the current financial year in each of our business divisions and have already secured a number of important new contract wins, particularly within the Housing sector. In addition to our focus on the organic building blocks for growth, significant energy is being directed into: building strong new business pipelines, particularly in Love2shop Business, Housing and Charities; successful delivery of our Local Banking service, with at least two banks due to go live in H1; continued parcels growth, driving volume opportunities with each carrier and growing Out of Home consumer adoption; optimising our retailer network performance, through better adoption of services, our new Store Growth Specialist team and further site growth; and the further upselling of our enhanced payment capabilities into our existing client base, including utilities.
  
Our continued confidence in the growth opportunities in the business and the execution of our plan to deliver strong earnings growth and cash flow generation, combined with a sustainable dividend policy, provide a robust platform for the Board to further enhance shareholder returns through an increased and extended share buyback programme of at least £30 million per annum till the end of March 2028, all underpinned by our confidence and clear operational plans to deliver further progress in the current year and our £100m EBITDA target.”  

SHARE BUYBACK PROGRAMME INCREASED AND EXTENDED

Today the Group announces its intention to increase and extend its 3-year share buyback programme. This enhanced Buyback Programme reflects the strong cash generative nature of the Group, along with the Board’s confidence in delivering on our growth targets for FY26-FY28 and in-line with our commitment to enhance shareholder returns.

The Buyback Programme will be increased with a plan to return at least £30 million per annum to shareholders and will be extended until the end of March 2028, with the target of reducing our equity base by at least 20% over that period. We will continue to review the Buyback Programme based on business performance, market conditions, cash generation and the overall capital needs of the business.

Throughout this period, we will continue to increase dividends at a nominal rate and, as a result of our continued financial performance, grow our cover ratio from the current 1.5 to 2.0 times earnings range to over 2.0 times earnings by FY28. Combined with the increased and extended Buyback Programme, this dividend policy will enhance shareholder returns and ensure the business continues to maintain an efficient capital structure, balancing an appropriate leverage ratio of around 1.2 to 1.5 times net debt/EBITDA with the overall capital needs of the business.

DIVISIONAL HIGHLIGHTS

Shopping divisional net revenue increased by 1.2% to £65.2 million (FY24: £64.4 million)

• Service fee net revenue increased by 10.7% to £21.8 million (FY24: £19.7 million) driven by a combination of further PayPoint One/Mini site growth to 20,275 (31 March 2024: 19,297) and the annual RPI service fee increase
• New Store Growth Specialist team rollout now live, supporting retailer partners to deliver further revenue growth through store visits driven by targeted data and support
• Card payments net revenue decreased by 0.9% to £32.4 million (FY24: £32.7 million) with further site growth in the PayPoint Lloyds Cardnet estate to 10,552 (31 March 2024: 10,064) and a small reduction in the Handepay EVO/Lloyds Cardnet estate to 19,478 (31 March 2024: 19,682), with contract mix now 85% on 12 and 18-month contracts
• Card processed value decreased by 4.2% overall to £6.9 billion (FY24: £7.2 billion), with the Handepay EVO estate -0.9% and the Lloyds Cardnet estate -10.2% versus the prior year, reflecting lower than anticipated consumer spending patterns, particularly in H2
• Card proposition and merchant experience enhanced in the year: new AI-driven statement reader launched to enhance the merchant sales experience; time to transact drastically reduced from 14.7 days to 2.2 days; over 3,500 merchants enrolled on Handepay Rewards programme supporting a churn reduction of 7%; new mobile app launched in December 2024 with 3,000+ merchants signed up; and record year for Business Finance via YouLend with over £23.8 million of funding provided to businesses.
• UK retail network increased to 30,712 sites (31 March 2024: 29,149), with 70.0% in independent retailer partners and 30.0% in multiple retail groups
• 18 brand campaigns delivered in the year for major consumer brands via PayPoint Engage, including an award-winning campaign for SPAR during Euro 2024

E-commerce divisional net revenue increased strongly by 39.0% to £16.4 million (FY24: £11.8 million)

• Record year of parcels transactions, with strong growth of 33.3% to 133.4 million parcel transactions (FY24: 100.1 million)
• Collect+ network increased to 14,213 sites (31 March 2024: 11,786), with a number of new Out of Home channels established
• InPost expansion announced, growing to over 6,000 Pick Up Drop Off (PUDO) locations within Collect+ network, harmonising locations, parcel volumes and opening up the opportunity for further expansion and parcel volume growth across our extensive network for both InPost and Yodel
• Royal Mail now live in over 7,500 sites, with store to store and click and collect services now live
• Partnerships with Chinese marketplaces now live, with initial rollout of 26 stores with SFExpress, providing a UK PUDO to China PUDO service to Chinese communities across the UK.
• Print in Store service now available in over 93% of network enabled by the further rollout of Zebra label printers

Payments & Banking divisional net revenue increased by 1.7% to £54.4 million (FY24: £53.5 million)

• Continued growth through our MultiPay platform, with underlying net revenue increasing by 4.5% to £6.7 million (FY24: £6.4 million)
• Further new business wins (over 53 new client services) delivered in FY25 for MultiPay platform, with a strengthened client base in target sectors, including SNG, Thirteen, Guinness and Rooftop in the Housing sector and Alzheimer’s Society and several regional Citizen’s Advice Bureaus in the Charity sector
• Strong growth through Open Banking with net revenue within the PayPoint business growing to £0.8 million (FY24: £0.3 million) and with an initial contribution from obconnect of £1.8 million (FY24: £nil)
• 28 further clients now live for Open Banking services in the year, including BBC and Crown Commercial Service for Confirmation of Payee. Majority ownership of obconnect completed in October 2024, with major contract for New Zealand Banking Association to provide Confirmation of Payee ecosystem live in December 2024
• Total digital net revenue increased by 12.3% to £15.5 million (FY24: £13.8 million)
• Cash through to digital net revenue was flat at £6.8 million in the year (FY24: £6.8 million), with continued growth in neobank deposits with over £475 million of consumer deposits processed in the year through our extensive network, up over 26% in the last two years
• Local Banking – first two High St banks on track for launch of consumer deposits in H1 FY26 leveraging our leading retailer partner network. SME deposit solution in development for launch in H2 FY26
• Cash payments net revenue decreased by 2.7% to £32.1 million (FY24: £32.9 million). Legacy energy sector net revenue decreased by 6.5% for the year in line with expectations

Love2shop divisional net revenue increased by 0.8% to £51.7 million (FY24: £51.3 million)

• Love2shop Business experienced a positive year with £172.2 million of billings delivered, up 5.8% on the prior year (FY24: £162.8 million), benefiting from the excellent planning and preparation by the Love2shop team well in advance of the peak trading period, and the growing benefits from corporate API integrations launched into major clients last year, delivering increased billings and improved customer experience
• Highstreetvouchers.com performance was strong with billings +12.8% ahead of plan. This positive outcome has been driven by a more efficient use of paid media spend driving a higher Average Order Value (AOV) of £320 vs £92 previously, improved customer journeys optimised for business customers transacting online or wishing to speak to our sales team, and an improved digital product and participation enabling larger bulk orders which has also increased AOV from £400 to £1500. Traffic to our ‘Where to spend’ pages has increased to 49% of overall traffic, reflecting our expanded multichannel strategy for Love2shop gift card sales across digital and physical channels
• Park Christmas Savings delivered a resilient outcome to the Christmas 2024 campaign with final billings of £162.2m, consistent with the previous year, with average saver value increased by 2.5% versus the prior year and strong saver retention rates ahead of the key Christmas 2025 savings season
• New partnership with InComm Payments, launched in October 2024, establishing a strong new sales channel and enabling distribution of Love2shop gift cards into major grocers and High St brands, delivered over £2.9 million of billings. This strengthens Love2shop’s distribution networks overall, combined with the existing physical gift cards channel into PayPoint’s multiple and independent retailer network
• MBL, the UK leading gift card technology platform, processed £123.2 million in gift card value in in the year (FY24: £59.7 million), reflecting continued momentum as a gift card service provider for Greggs, B&M, New Look, Tapi, and Schuh, and as a key distributor for over 150 UK retailers’ gift cards.

BUILDING BLOCKS FOR GROWTH

In the current financial year, the Group remains focused on executing against the seven building blocks for growth to the end of FY28:

• Parcels and Network Expansion – grow parcel transaction volumes through extensive network, particularly through Royal Mail and launch of Chinese marketplaces; continue to develop Collect+ network in a targeted manner across a number of new and existing channels, in partnership with our carriers and consistent with developing consumer behaviours and needs in the Out of Home market.
  
• Card processing and Lloyds Bank partnership – leverage strengthened proposition, a more consistent performance from Field Sales aligned to the strong and consistent progress already achieved in the Telesales channel, and a materially enhanced merchant onboarding experience to deliver site growth; increase adoption of Merchant Mobile App and Rewards programme to support retention and churn reduction initiatives; deliver further growth in Business Finance, expanding marketing and sales channels and piloting new Asset Finance product in H1 FY26.
  
• Open Banking and Digital payments – major focus on increasing opportunities to cross-sell payments services within our existing client base and winning new clients in target sectors of Housing and Charities, leveraging our wider multichannel payments platform and Open Banking capabilities; continued momentum in Open Banking, with further opportunities delivering payments channels for new and existing clients in PayPoint and delivering data sharing ecosystems for major banks and jurisdictions in obconnect, including Verification of Payee in Europe.
  
• Love2shop and Park Christmas Savings – deliver continued billings growth in Love2shop Business, supported by restructured team and improved new business pipelines; grow Park Christmas Savings billings, through improved new customer acquisition, conversion to paid and better retention initiatives through the year; launch new Love2shop e-commerce platform in H1 FY26; continue to grow MBL business, providing gift card management services for more clients; build on strong start to InComm Payments partnership, expanding presence within major retailer gift card malls
  
• Access to Cash and Local Banking – deliver successful launch of Local Banking service, with at least two High St banks due to go live in H1 FY26; continue to grow neobank cash deposit volumes, building on the £475 million of consumer deposits processed in FY25; improve ATM performance across the PayPoint estate through successful delivery of recovery plan
  
• Community services for retailer partners – grow service fee revenue through expanding PayPoint network and RPI increase; rollout new Store Growth Specialist team, supporting retailer partners to deliver further revenue growth through store visits driven by targeted data and support; deliver further growth in FMCG proposition via PayPoint Engage, building pipeline of major brand campaigns and increasing adoption of Retailer Rewards programme.
  
• Connecting our capabilities to drive further growth – we are now focused on how we connect our enhanced capabilities across the Group to open up further opportunities, providing enterprise solutions to our extensive client base combining multichannel payments solutions, rewards and gifting, loyalty programmes and FMCG relationships, as well as leveraging our leading retailer and SME networks. Early examples of this include leveraging our Love2shop rewards platform capabilities to power our Handepay merchant rewards programme and our PayPoint OpenPay service, which delivers a secure payout solution to clients combining obconnect’s Pay by Bank service, PayPoint’s cash out product and Love2shop Essentials vouchers.

RECONCILIATION OF REPORTED NUMBERS

BUSINESS DIVISION NET REVENUE AND MIX