Breaking Down PayPoint plc Financial Health: Key Insights for Investors

Founded in 1996 to let customers top up pre‑pay energy meters in cash at local shops, PayPoint plc (LSE: PAY) has grown into a diversified payments and parcel services group-launching Collect+ in 2011, acquiring full ownership in 2020 and partnering with Royal Mail in 2024-operating a network of over 28,000 convenience stores and linking with more than 60,000 SME and retailer locations to offer bill payments, mobile top‑ups, cash deposits for banks, parcel sending/collection and a channel‑agnostic digital platform (MultiPay); the business delivered strong results in 2025 with revenue of £324.9 million, operating income of £75.1 million and net income of £50.6 million while sitting on net debt of £105.7 million (cash £8.7m, utilized facilities £114.4m as at 31 May 2025), has reduced shares in issue to c.63.7 million and declared a 19.8p interim dividend, and is driving toward a target of £100 million EBITDA by FY26 alongside priorities of capital investment, progressive dividends and maintaining a prudent capital structure to support growth across payments, parcel services and digital innovation

PayPoint plc (PAY.L): Intro

• 1996 - Founded to support cash top‑ups for pre‑paid energy meters.
• 2011 - Launched Collect+ as a joint venture with Yodel, expanding into parcel sending and collection and growing the retail footprint to over 14,000 locations.
• 2014 - PayPoint.net and PayByPhone merged under the unified PayPoint Mobile and Online brand, strengthening digital payments.
• 2020 - Acquired full ownership of Collect+, consolidating parcel delivery & collection operations.
• 2024 - Entered a partnership with Royal Mail to enhance parcel services, leveraging Royal Mail's delivery network.
• 2025 - Reported strong financial results with revenue, operating income and net income growth.

• Listing: London Stock Exchange (AIM/LSE depending on listing segment historically).
• Major investor types: Institutional asset managers, pension funds, retail investors.
• Operational divisions: Retail Payments (store network), Mobile & Online (digital payments and parking), Parcel Services (Collect+ and partners).

• Expanding convenience retail network density and merchant propositions.
• Growing digital channels (mobile and online payments) and integrating them with in‑store services.
• Scaling parcel services through partnerships (e.g., Royal Mail) and network optimisation.
• Maintaining resilient cash and non‑cash payment solutions for vulnerable and underserved customer segments.

• Retail terminals in convenience stores process bill payments, pre‑paid energy top‑ups, mobile airtime and other services.
• PayPoint Mobile & Online handles parking, digital bill payments and remote account services via apps and web portals.
• Collect+ provides parcel drop‑off and collection on behalf of retailers and delivery partners; PayPoint integrates parcel tracking and fulfilment with its store network.

• Transaction fees and commissions from bill and pre‑pay energy top‑ups processed in retailer terminals.
• Service fees and subscriptions from digital services (parking, mobile & online payments).
• Parcel service revenue from Collect+ (per‑parcel fees, retailer commissions, partner arrangements such as the Royal Mail collaboration).
• Value‑added services to retailers (equipment rental, data services, targeted payments solutions).

• 2025 revenue: £324.9m; operating income: £75.1m; net income: £50.6m.
• Store network: c.14,000 convenience stores offering PayPoint services (inc. Collect+ outlets at peak network size).
• Parcel partnerships: Collect+ fully owned since 2020; enhanced distribution via 2024 Royal Mail partnership.
• Digital growth: Continued migration to PayPoint Mobile & Online following the 2014 brand unification.

PayPoint plc (PAY.L): History

• Listed entity: Public limited company (LSE: PAY).
• Net debt (31 May 2025): £105.7m (cash £8.7m; utilized facilities £114.4m).
• Shares in issue (post-October 2025 reduction): ~63.7 million.
• Interim dividend declared: 19.8 pence per share, paid in two equal installments on 19 Dec 2025 and 27 Mar 2026.

• Capital structure stance: maintained to support medium-term trading, balancing shareholder returns and investment cash.
• Capital allocation priorities:
  • Investment in the business (capex and innovation).
  • Progressive ordinary dividends.
  • Maintaining a prudent capital structure.

PayPoint plc (PAY.L): Ownership Structure

• Mission: deliver innovative tech and services that simplify payments and retail services for businesses and consumers.
• Values: customer-first product design, partnership with SME retailers, reliability, and disciplined cash-generation and capital allocation.
• Strategic targets: achieve £100 million EBITDA by end of FY26 and target dividend cover >2.0x by FY28.

• Retail network: partner presence in over 60,000 SME and retailer locations across the UK and Ireland.
• Retail hardware: PayPoint One and PayPoint Mini devices to enable in-store bill payments, top-ups and card acceptance at convenience stores.
• Parcel & delivery: Collect+ network - a tech-enabled parcel pick-up, drop-off and send service operating via thousands of local stores.
• Digital platform: MultiPay - a channel-agnostic payments platform covering Open Banking, card payments, direct debit and cash acceptance.

• Transaction fees and service charges from bill payments, prepaid top-ups, lottery and utility collections processed via PayPoint terminals.
• Card-acquiring and terminals revenue from PayPoint One/Mini deployments and merchant services (MultiPay).
• Parcel handling fees and commission from the Collect+ network.
• Software and platform revenues from MultiPay integrations (Open Banking routing, recurring payments, value-added services for retailers).

PayPoint plc (PAY.L): Mission and Values

• Retail network: PayPoint operates a network of over 28,000 convenience stores across the UK, delivering a high-frequency, geographically dense footprint that reaches urban and rural communities alike.
• MultiPay digital platform: PayPoint provides the MultiPay payments platform which enables clients to accept payments via Open Banking, card payments, direct debit and cash - unifying multiple payment rails for retailers, billers and service providers.
• Bill payments and top-ups: At PayPoint stores customers can pay household bills, top up mobile credit and purchase prepaid utilities and services with immediate reconciliation for billers.
• Collect+ parcel services: Through the Collect+ partnership, PayPoint offers parcel sending and collection services at thousands of local stores, providing last-mile convenience and extended pickup hours compared with many locker networks.
• Bank cash deposit services: PayPoint partners with banks to offer consumer cash deposit services so customers can deposit cash into their bank accounts at PayPoint locations without visiting a branch.
• Retail reach advantage: PayPoint's retail network is larger than the combined footprint of all the banks, supermarkets and Post Offices in the UK, giving partners an unparalleled reach for in-person payment and collection services.
• Technology and innovation: The company continues to invest in platform capabilities, APIs, Open Banking integrations and retail-facing devices to enhance customer experience and preserve competitive advantage.

• Transaction fees: Retail and biller transactions processed through PayPoint (cash payments, card payments, mobile top-ups and bill payments) generate merchant and biller fees per transaction.
• Platform and service fees: MultiPay and platform integrations attract recurring fees from business customers for payments processing, reconciliation and value-added services (APIs, reporting).
• Parcel handling commissions: Collect+ generates commission income from parcel sending and collection services, shared between PayPoint and store retailers.
• Bank service fees: Cash deposit services and bank partnerships provide fee income per deposit transaction and contribute to network monetization.
• Retail partner revenue share: PayPoint shares revenue with independent retailers for the in-store convenience services they provide, aligning incentives to grow transaction volumes.

PayPoint plc (PAY.L): How It Works

• Retail network: PayPoint partners with convenience stores, petrol forecourts and other local retailers to offer bill payments, mobile top-ups, cash services and parcel collection/drop-off.
• Digital platforms: MultiPay and other integrated solutions provide merchants and service providers with online and in-store payment acceptance, reconciliation and reporting tools.
• Parcel services: Collect+ and other parcel propositions enable consumers to send and receive parcels at PayPoint retailer terminals, often in partnership with major carriers.
• Banking cash services: PayPoint facilitates consumer cash deposits into bank accounts via its retailer estate, charging banks for the service and offering convenience to unbanked/cash-preferring customers.
• Partnerships & integrations: Strategic agreements (for example with postal and utility providers) extend distribution and create revenue-sharing arrangements.

• Payment processing fees: Payee organisations (utilities, councils, telcos and TV licence authorities) pay per-transaction or per-instruction fees to have consumer payments accepted at the PayPoint network.
• Retailer fees & commissions: Retailers receive commissions for services; PayPoint retains a portion of the service fee and charges retailers for terminals, software and network access.
• Parcel handling fees: Collect+ and parcel partners pay PayPoint per parcel handled (sending and collection), with incremental margin from retail add-ons and surcharges.
• Bank deposit fees: Banks pay PayPoint for facilitating cash deposits into consumer accounts via retailers; PayPoint earns a per-deposit fee plus settlement float benefits.
• Platform & software licences: MultiPay and related digital products generate recurring SaaS-style revenue from merchants and corporates for multi-channel payment acceptance and reconciliation.
• Commercial partnerships: Revenue from co-branded initiatives, joint ventures and carrier agreements (e.g., parcel and logistics partners) which include fixed fees, transaction shares or minimum guarantees.

• Retail footprint: c.28k retail locations in the UK & ROI (majority convenience stores) providing wide geographic coverage and footfall-driven transactions.
• Transaction volumes: Hundreds of millions of consumer transactions per year across cash, payments and top-ups (bill payments forming a significant share).
• Reported revenue (group, recent year): in the low-to-mid hundreds of millions of GBP (annual revenue historically reported in the £200-£230m band in recent years).
• Profitability: PayPoint historically targets double-digit adjusted operating margins from a mix of recurring service fees and higher-margin digital products.
• Parcel partnerships: Collaborations with national carriers and postal services expand parcel throughput and retail footfall, with revenue-share models for scale benefits.

• Utility companies and local authorities - pay per-payment processing and reconciliation services.
• Major banks - pay for cash deposit facilitation and customer access to cash services via the retail network.
• Parcel carriers and postal operators - partner to route parcel collections/drops through PayPoint retailers, sharing fees and customer reach.

PayPoint plc (PAY.L): How It Makes Money

• Primary revenue drivers: in-store bill payments, top-ups and cash services; parcel services (drop-off/collection); digital payments and terminal hardware & software services.
• Commercial model: fixed merchant commission + per-transaction fees + volume-based pricing for parcel partners + subscription/support for terminals and software.
• Strategic partnerships: expanded parcel capability via collaboration with Royal Mail and other logistics partners to capture e‑commerce flows and drive incremental store visits.

• Investment & innovation: ongoing capex and R&D focus on terminal upgrades, cloud services, APIs for partners, and data-driven merchant offerings to boost transaction frequency and margin.
• Profit levers: increase parcel volumes per site, upsell digital services to merchants, optimise transaction pricing, and expand third-party integrations to capture new revenue streams.