CUT-OUT TO DO
PayPoint Group Annual Report 2022
Delivering
innovative
services
Annual Report 2022
easier
For more information go to
corporate.paypoint.com
Making
people’s
lives a
little
easier
Who we are
Strategic report
01 Highlights
02 PayPoint Group at a glance
04 Investment case
06 Our purpose in action
10 Chief Executive’s review
12 Year in review
14 Market overview
16 Our business model
18 Our strategy
20 Divisional review
34 Key performance indicators
36 Responsible business
54 Risk management
55 Principal risks and uncertainties
59 Viability statement
60 Financial review
Governance
70 Chairman’s statement for governance
72 Board of Directors
74 Executive Board
76 Corporate Governance Report
82 Nomination Committee Report
84 Audit Committee Report
90 Directors’ Remuneration Report
102 Directors’ Report
104 Statement of Directors’ responsibilities
Financial statements
105 Independent Auditor’s Report
111 Consolidated statement of profit or loss
111 Consolidated statement of
comprehensive income
112 Consolidated statement of
financial position
113 Consolidated statement of changes
in equity
114 Consolidated statement of cash flows
114 Reconciliation of cash and
cash equivalents
115 Company statement of financial position
116 Company statement of changes in equity
116 Company statement of cash flows
117 Notes to the consolidated
financial statements
Shareholder information
156 Notice of Annual General Meeting
159 Notes to the Notice of Annual
General Meeting
161 Explanatory notes to certain of the
resolutions to be proposed at the
Annual General Meeting
163 Officers and professional advisors
Contents Financial highlights
Ordinary dividend
paid per share
33.6p
+7.7%
(FY21: 31.2p)
Revenue from
continuing operations
£145.1m
+13.6%
(FY21: £127.7m)
1
Diluted earnings per share
from continuing operations
excluding exceptional items
52.8p
+23.1%
(FY21: 42.9p)
Diluted earnings per share
100.2p
n/m
(FY21: 32.4p)
1
Net corporate debt
5
£43.9m
-35.7%
(FY21: £68.2m)
1
Operating margin from
continuing operations
before exceptional items
3
41.4%
+2.4ppts
(FY21: 39.0%)
1
Profit before tax
£78.5m
+180.5%
(FY21: £28.0m)
1
Cash generation
4
from
continuing operations
excluding exceptional items
£53.9m
+14.9%
(FY21: £46.9m)
1
Net revenue from
continuing operations
2
£115.1m
+18.5%
(FY21: £97.1m)
1
Ordinary reported
dividend per share
35.0p
+8.7%
(FY21: 32.2p)
Profit before tax from
continuing operations
(excluding exceptional items)
£45.6m
+25.0%
(FY21: £36.5m)
1
1. Comparative information has been restated for the retrospective application of the Group’s change in accounting policy on intangible assets. Refer to note 1 and note 32.
2. Net revenue is an alternative performance measure. Refer to note 4 to the financial information for a reconciliation to revenue.
3. Operating margin before exceptional items % is an alternative performance measure as explained in note 1 to the Annual Report and is calculated by dividing operating
profit before exceptional items from continuing operations by net revenue from continuing operations.
4. Cash generation is an alternative performance measure. Refer to the Financial Review on page 67 – cash flow and liquidity for a reconciliation from profit before tax.
5. Net corporate debt (excluding IFRS 16 liabilities) is an alternative performance measure. Refer to note 1 to the Annual Report for a reconciliation to cash and cash equivalents.
Strategic report Governance Financial statements Shareholder information 01
PayPoint Group at a glance
Delivering
innovative services
and technology
This has been
another positive
year for the
PayPoint Group as
we have built on
the strategic step
change delivered
in FY21, opening
up further growth
opportunities across
the business and
delivering strong
shareholder returns.
What we do:
We deliver innovative services and technology connecting millions
of consumers with over 60,000 retailer partner and SME locations
Our divisions:
We operate across three divisions:
We provide digital solutions, technology and payment
services for SMEs and retailers to deliver vital
community services
How we do it
• Retail services – EPoS,
FMCG, home delivery,
Counter Cash, ATMs
• Card payments
Who we work with
Shopping
Read more on page 20
We provide a technology-based delivery platform to
deliver best-in-class customer journeys for e-commerce
brands and their customers over the ‘first and last mile’
How we do it
• E-commerce – Collect+
(Parcels Send, Pick Up,
Drop O)
Who we work with
E-commerce
Read more on page 24
We deliver a channel agnostic payment platform that
gives clients and consumers choice
How we do it
• Digital payments –
MultiPay and CashOut
• Cash through to digital
payments – eMoney
• Cash payments – bill
payments and banking
Who we work with
Payments
& Banking
Read more on page 28
PayPoint Plc Annual Report 202202
Card payment
transactions
369.3m
Card payment
sites
32,609
Retailer partner and
SME locations
63,657
Parcel
transactions
33.3m
PayPoint Trustpilot
score
4.9/5
PayPoint
sites
28,254
PayPoint Group in numbers
Our approach
Our Purpose
Why we exist
We deliver innovative services that
make millions of people’s lives a little
easier every day
Our values
How we bring our vision to life
Ambitious Results focused Accountable
Collaborative Can do Good colleague
Our Vision
What we aim to achieve
First-time delivery of outstanding technology
and services to our customers
Creating a dynamic place to work for our people
Delivering positive outcomes for all our
stakeholders
Our strategy
Embed PayPoint Group at the heart of SME
and convenience retail businesses
Become the definitive technology-based
e-commerce delivery platform for first and last mile
customer journeys
Sustain leadership in ‘pay as you go’ and
grow digital payments
Building a delivery-focused organisation and culture
Read more on page 18
Read more on page 06
ESG
Creating long-term value
for all our stakeholders
We are committed to delivering sustainable, essential services that have a positive impact
on our customers, UK communities and the world we live in
Read more on page 36
Strategic report Governance Financial statements Shareholder information 03
Investment case
PayPoint
Group
We create innovative services and
technology connecting millions of
consumers with brands, retailers
and SMEs.
Enlarged
network and
consumer
reach
Expanded
retailer and
consumer
proposition
Delivered
payment
channel agnostic
platform
Our enlarged Group now
delivers technology and services
to an unparalleled network of
over 60,000 retailer partner
and SME locations across the
UK, including food service,
convenience retail, garages
and hospitality, serving millions
of consumers every day
Our expanded proposition
helps our retailer partners and
SMEs keep pace with changing
shopper needs, expectations and
demographics. Our retail services
platform, PayPoint One, oers
everything a modern convenience
store needs, including EPoS,
parcel services, card and bill
payments, Counter Cash, Home
delivery and digital vouchering
We have continued our
diversification to digital
payments, opening up new
sectors like housing and charities
and helping organisations
seamlessly and eectively serve
their customers through all
channels. Our market-leading
omnichannel solution – MultiPay –
is an integrated solution oering
a full suite of digital payments
PayPoint Plc Annual Report 202204
Excellence
in e-commerce
customer
experience and
technology
Growth-
focused
deployment
resources
Talented
and committed
team
We pride ourselves on delivering
innovative technology platforms
across all our business divisions,
whether through PayPoint
One, helping our convenience
retailer partners digitise their
businesses, to our proprietary
e-commerce soware solutions
delivering great consumer
experiences for the biggest
online brands
We remain committed to
maintaining our strong capital
discipline and cash flow, whilst
rebalancing our business mix
towards growth opportunities
and delivering a significantly
enhanced platform with strong
shareholder returns
We have a talented, diverse
and committed team with
years of experience gained
from a wide range of industries
and disciplines
Strategic report Governance Financial statements Shareholder information 05
Our purpose in action
Delivering
on our
purpose
Over the past year,
the PayPoint Group
has continued
to deliver on its
purpose of making
people’s lives a little
easier every day,
delivering innovative,
sustainable services
that make a real
dierence across
the UK.
PayPoint Plc Annual Report 202206
Keeping people safe
at the heart of local
communities
ln Autumn 2021, we began an initial
partnership with Randox Health to support
them in providing Covid-19 travel test kits to
customers across the UK. Randox had been
experiencing logistics challenges in processing
time-sensitive travel test kits, due to the
Northern Ireland protocol, and were focused on
improving the experience for their customers.
Through our Collect+ network, we initially
rolled out a click and collect solution to
35 major shopping centres across the UK,
enabling customers to order a test kit online
and pick it up the same day from one of those
locations. This was then extended to a further
250 smaller stores pre-Christmas as the
Omicron variant was becoming dominant and
customers were reluctant to visit major cities
and centres.
Due to the initial success of this rollout, the
business demonstrated great agility and
expanded the partnership in early January
2022, to a further 2,500 Collect+ independent
retail stores; this brought the click and collect
service to even more consumers, all executed
in the space of four weeks. In addition to this,
Collect+ were able to mobilise a full stock
control solution for Randox in mainland UK,
including holding and replenishing test kits in
stores and a comprehensive logistics solution,
leveraging the strength of the existing
Collect+ network.
To date, well over million travel test kits
have been processed for consumers and, as
government protocols and guidance have
continued to evolve, we are now supporting
Randox in the rollout of non-travel test kits to
stores as the free testing service has ceased
in the UK.
Strategic report Governance Financial statements Shareholder information 07
Our purpose in action continued
Helping SMEs
recover post-
pandemic
Handepay, our leading card payments business
serving over 22,000 customers, has long been
a champion of small businesses across the UK,
and this has become even more important as
they continue to recover from the pandemic.
With a Trustpilot Excellent rating of 4.9 out
of 5, we have always been committed to
delivering fantastic service and value to SMEs
across a wide range of sectors, including
hospitality, garages, food service and retail.
In October 2021, this commitment was taken
further by the launch of a new one-month
rolling contract, designed to give more
flexibility, control and value to customers to
help them continue to grow as the economy
bounced back. The contract was launched to
all customers switching their card machine
from another provider and was made a
permanent part of our proposition aer the
end of a successful trial, which was all delivered
just in three weeks. Since launch, over 2,300
SMEs have benefited from this new addition
to our oer with all the benefits of Handepay
without the long-term commitment.
In addition, the Business Finance product,
oering SMEs short-term business funding
to help invest in and grow their businesses,
was expanded to the PayPoint retailer partner
universe of over 18,000 customers in July
2021. Delivered in partnership with YouLend,
an embedded business finance company, and
initially launched to Handepay customers
in January 2020, the product has proved
invaluable to help support SMEs the expansion
has seen over £8.5 million lent to businesses
across the Handepay and PayPoint universes
over the past year.
PayPoint Plc Annual Report 202208
Digitising the
customer experience
in the UK Housing
sector
Since the launch of our digital omnichannel
payments platform, MultiPay, in 2015, PayPoint
has long been helping organisations across
a wide range of sectors to digitise their
oering to customers, delivering significant
improvements to customer journeys and
realising cost savings and eciencies for
those businesses.
This success has been driven by working
closely in partnership with organisations,
building strong relationships, understanding
their challenges and developing digital
payments solutions that help solve those
problems. In particular, our progress in the
UK Housing sector has benefitted from this
collaborative approach, securing significant
wins and enhancing the experience for
thousands of customers across the UK. Our
first major digital contract in this sector is
now live with Optivo, one of the UK’s largest
housing associations, providing our full suite
of channel-agnostic payment solutions.
The Housing sector has long faced a number
of challenges that have never been truly
addressed by payments providers. Use of
digital channels has been low, with poor choice
and legacy infrastructure deployed, giving a
disjointed experience for customers. Similarly,
the back-oce experience for clients has
been equally poor, with no cohesion between
systems and a lack of transparent data to help
manage relationships in real-time. Add to that
a lack of innovation and choice from payments
providers in the market, and the opportunity
has become clear for PayPoint to lead the
market and deliver tangible innovation and
benefits for clients.
MultiPay delivers a solution to all these
challenges, providing a channel-agnostic
payments platform that gives clients and
consumers choice. It enables transactions
online and through smartphone apps and text
messages, as well as event payments, over
the counter, over the phone and via interactive
voice response (IVR) systems. It also supports
a full range of Direct Debit options, including
scheduling collections, as well as new product
developments such as Open Banking,
PayByLink, recurring payments and Event
Streamer. Housing customers benefit from
real-time visibility of all payments received,
through one easy-to-use portal that is fully PCI
compliant, and allows visibility of all payment
channels – including cash.
Our recent partnership with Optus Homes, a
leading app for tenants to manage their home
rental account, will help strengthen our oering
further, with MultiPay positioned as the native
app payment solution, allowing tenants to
pay their rent and manage arrears payments
directly in the app, on the phone, or over the
counter in 28,000 local retailers across the UK,
a network bigger than all banks, supermarkets
and Post Oces put together.
09Shareholder informationFinancial statementsGovernanceStrategic report
Nick Wiles
Chief Executive
Chief Executive’s review
Delivering a
significantly
enhanced platform
with strong
shareholder
returns
This has been another
positive year for the
PayPoint Group as we have
built on the last two years
of transformation, where
we have strengthened
our capabilities and
opened up further growth
opportunities, delivering
a broader range of
innovative services and
technology connecting
millions of consumers with
an expanded universe of
over 60,000 retailer partner
and SME locations across
multiple sectors.
PayPoint Plc Annual Report 202210
We have delivered a strong financial
performance for the year against the backdrop
of uncertainty and disruption in our energy
and parcels markets and a rebalancing of
consumer behaviour as Covid-19 restrictions
have eased. Strategically, we have enhanced
the Group’s capabilities further by completing
the acquisition of RSM 2000 and making a
strategic £6.7m investment in Snappy Group,
one of the UK’s leading local home delivery
and click and collect operators. RSM 2000
enhances our digital payments capability,
adding innovative mobile payment products
and enabling reach into new and existing
sectors, including charities, housing, not-for-
profit organisations, events and SMEs in the
UK. Our investment in Snappy Group builds
on our previously announced commercial
partnership, enabling the Group and its retailer
partners to respond to consumer demand for
rapid, local home delivery and remain at the
forefront of retail and consumer trends. The
acquisitions of Handepay/Merchant Rentals
and i-movo in the last financial year are now
fully integrated and have made important
contributions to our performance and
growth this year. As previously reported, we
disposed of our Romanian business on 8 April
2021 with proceeds of £48 million, and at a
£30 million profit.
The volume of new initiatives delivered
across the Group has underlined the need for
strong execution and leadership to leverage
these opportunities, particularly where we
are establishing operations for the first
time. We have been relentlessly focused
on operational excellence and the rapid
delivery of our strategic priorities: embedding
PayPoint at the heart of SME and convenience
retail businesses; becoming the definitive
technology-based e-commerce delivery
platform for first and last mile customer
journeys; sustaining leadership in ‘pay-as-you-
go’ and growing digital bill payments; building
a delivery focused organisation and culture.
Our retailer partner proposition has been
enhanced further to help respond to consumer
trends and drive revenue opportunities in
a challenging cost environment: our new
Counter Cash solution is now live in 2,624 sites,
providing vital access to cash in communities
across the UK; the home delivery partnership
with Snappy Shopper continues to grow with
269 sites live and positive sales growth; and
we’ve continued to improve our engagement
with retailers and key trade associations to
work in partnership to make the most of the
new opportunities.
We’ve also diversified our digital payments
client base further with 18 schemes live in
the year, are developing new opportunities
in Open Banking and have secured our first
major housing client with Optivo, a leading UK
housing association, for our complete digital
payments solution. This success has been
driven by our focused sector approach to
building strong client relationships, developing
a deep understanding of their challenges
and helping to solve problems for them and
their customers. We continue to provide vital
support to local authorities in disbursing cash
to consumers, with our Cash Out service and
the new Payment Exception Service for the
Department for Work and Pensions (DWP)
launched successfully and has exceeded our
expectations, as consumers migrate away from
Post Oce Card Accounts. Furthermore, we
enhanced our e-commerce oering further
with an expansion of our partnership with
Randox, providing vital Covid-19 testing
services throughout our Collect+ and multiple
retailer network, as well as launching new
services for our existing carrier partners and
providing industry leadership for driving further
innovation and prominence for the out of home
delivery market.
Many of these new services launched in
the year have underlined the need to grow
further consumer awareness for our expanded
propositions, whether leveraging our own
channels or partnering with clients and
carriers on marketing programmes, such as the
promising in-store merchandising our digital
voucher category, working with brands like
Amazon, Paysafe, PlayStation and Love2Shop.
Equally, we remain focused on ensuring that
we continue to deliver an excellent service for
our consumers, reflected in our high customer
satisfaction score of 89%
1
, and continue to
support them through the current energy
crisis and economic challenges. This has
been backed up by our extensive eorts to
strengthen our retailer partner relationships
and drive adoption of these new opportunities
to earn, including regular ‘cash and carry’
days, more direct communications and our
reinvigorated relationships with the key trade
associations, including the Association of
Convenience Stores (ACS), the Scottish
Grocers’ Federation (SGF) and the National
Federation of Retail Newsagents (NFRN). The
feedback and support received from these
organisations has been critical to our continued
commitment to support our retailer partners
in delivering vital community service across
the UK and responding to changing consumer
needs in the UK convenience sector.
Like many businesses, we are navigating more
challenges from a cost perspective due to
inflation, particularly in our supplier base and
the increased salary pressures experienced
in recruiting and retaining talent that we
referenced at the half year. We are also mindful
of the impact of these pressures on the
consumers, clients and retailers that we serve
and have sought to take action where we
can to support them, including our decision
to absorb 50% of the annual RPI service fee
increase for our retailer partners in April 2022.
We have put in place strong mitigation plans
to address these challenges.
The Executive Board has also been
strengthened in key areas this year to drive
growth and accelerate the pace of delivery
further. Anna Holness, joined the business as
Sales Director in January 2022, aer three
years as VP, Sales, Merchant International
Solutions at Worldpay. In addition, four internal
promotions were made to the Executive Board
in January 2022 to recognise their critical roles
in delivering our growth agenda: Jo Toolan,
Head of Client Management; Jay Payne, IT
Service and Operations Director; Chris Paul,
Head of Corporate Finance; and Steve O’Neill,
Corporate Aairs and Marketing Director.
Our Environment, Social and Governance
(ESG) approach has also developed further
in the year, as we consider our social
responsibility and impact as a management
team and business towards each of these
key areas. A core ESG Working Group was
formed at the beginning of the financial year
to review policies and approaches across the
Group, analyse cross-industry best practice,
seek feedback from external stakeholders
and investors, and recommend workstreams
and targets for the business to prioritise. This
builds on the work done last year to refresh our
purpose, vision and values and now reflects the
expanded universe we now inhabit as well as
reinforcing the vital role that our services and
partners play in communities across the UK.
On 23 November 2021, Ofgem, the energy
regulator, published a ‘Notice of Decision to
Accept Binding Commitments’, regarding
commitments proposed by PayPoint to
Ofgem to address the concerns raised in
Ofgem’s Statement of Objections received
on 29 September 2020. Ofgem accepted
those commitments as a resolution of its
concerns. PayPoint has been implementing the
commitments in a timetable agreed with Ofgem.
Outlook and dividend
The transformation of the business is gathering
pace, reflecting a rebalancing towards growth
opportunities and delivering improving
returns to our shareholders. We continue
to demonstrate agility and drive to respond
quickly to changing consumer demands
and new opportunities in our markets. As
a result, we remain well-placed to support
our partners in response to the wider trends
that have accelerated through the pandemic,
including the continued shi from cash to
digital payments, the growing demand for
online shopping fulfilment and the increase in
shopping local.
The Board has proposed a final dividend
of 18.0p per share, an increase of 8.4%,
consistent with our dividend policy of a target
cover range of 1.2 to 1.5 times earnings from
continuing operations excluding exceptional
items, which reflects our long-term confidence
in the business, the strength of our underlying
cash flow, the mitigation plans in place for
inflationary pressures and the enhanced
growth prospects from the steps we have
taken in the past year.
The Board remains confident in the delivery
of further progress in FY23 and meeting
expectations.
1. Opinium PayPoint Brand Tracker Sept 2021, 2,000 UK adults.
Strategic report Governance Financial statements Shareholder information 11
Year in reviewYear in review
A positive
year for the
PayPoint Group
April
Acquired RSM 2000
Significantly enhancing digital payments
capability and diversifying sector reach
Disposal of Romanian business
Completed on 8 April 2021, with proceeds
of £48 million, and at a £30 million profit
May
Snappy Shopper home delivery
partnership launched
Enabling retailer partners to oer customers
a convenient home delivery and click and
collect option
June
Love2Shop e-gi
vouchers launched
Helping customers shop with high street
and online brands, including Argos, Halfords,
Marks & Spencer, ASOS, Costa and Uber Eats
MyStore+ retailer rewards
app launched
Delivering rewards and incentives to
retailer partners
July
£6.6m investment in
Snappy Group
Enables PayPoint and network of convenience
retailer partners to remain at the forefront of
retail and consumer trends
Scottish Grocers Federation
partnership announced
Focused on supporting convenience retailer
partners in Scotland, with PayPoint joining
as a corporate member
September
Payment Exception Service
launched for Department for
Work and Pensions via i-movo
Digitising benefit payments and making it
quicker, simpler and more convenient for
customers to collect their payments at
over 28,000 PayPoint locations and 11,000
Post Oces
Digital voucher brands partner
with PayPoint to oer greater
convenience to local shoppers
Successful in-store display trial, partnering
with major brands to drive greater consumer
awareness of cash through to digital category
October
Counter Cash service
launched across UK
Innovative service providing vital access to
cash and balance enquiries over the counter
PayPoint partnership with
YouLend launched to oer
retailer partners fast and flexible
funding options
Designed to free up funds and allow retailers
to pay back their finance as they earn from
card sales, enabling them to focus on growth,
buy stock or simply assist with cash flow
November
Tyne Tunnel payments service
launched in North East
Payments can be made up to midnight on
the day aer someone uses the tunnel,
paying in cash or card at one of the 28,000
PayPoint retailers
2021
Building on the last two years of transformation
We have strengthened our capabilities and opened up further growth
opportunities, delivering a broader range of innovative services and
technology connecting millions of consumers with an expanded
universe of over 60,000 retailer partner and SME locations.
PayPoint Plc Annual Report 202212
December
Counter Cash service hits
1,000 store milestone
PayPoint was the first of LINK’s Members
to provide the service with over £630,000
taken out using the channel so far
Local authorities embrace
PayPoint’s ‘Cash Out’ for
support fund payments
Liverpool and Warwickshire join over 96
local authorities and housing associations
distributing funds to customers real-time
via email, letter or SMS to obtain a cash
payment at any of its retailer outlets
Collect+ delivers best ever
Christmas and sector leadership
In November and December 2021, overall
parcel volumes were up 11.3% vs 2020,
with over 6.5 million packages handled
through the extensive Collect+ network
of over 10,000 stores
First multi-carrier innovation, trends and
future opportunities workshop held in
January 2022 to review best practice and
performance from the successful peak
2021 period and agree initiatives to drive
further excellence
January 2022
Randox Covid-19 testing
partnership expanded
Click and collect service rolled out to over
2,000 stores to help keep people safe in
communities across the UK
Retailer winter promotion launched
Eligible new retailer partners signing up to
PayPoint One entitled to claim three months’
service fee refund
February
Counter Cash service reaches
2,000 store milestone
The ‘Cashback Without Purchase’ service
provides a valuable new way to access cash
on the high street, allowing consumers to
withdraw cash in convenience stores without
the need to buy anything or pay a fee
Cash Out service supports
local authorities in distributing
over £166m since April 2020
Issued under a range of government
campaigns, including the Free School Meals
and Winter Hardship schemes, the vouchers
were distributed by local authorities across
the UK and redeemed by consumers
throughout PayPoint’s nationwide network
of 28,000 stores
March
Optus Homes investment of
£750k announced
Strengthens MultiPay proposition for the
housing sector, as the Optus Homes’ native
app payment solution, allowing tenants to
pay their rent and manage arrears payments
directly in the app, on the phone, or over the
counter in 28,000 local retailers across the UK,
a network bigger than all banks, supermarkets
and Post Oces put together
2022
13Shareholder informationFinancial statementsGovernanceStrategic report
Market overview
Our markets
Changing market dynamics are creating significant
opportunities for the enlarged PayPoint Group, with
the business uniquely placed to take advantage of
the continued shi from cash to digital payments,
the growing demand for online shopping fulfilment
and the increase in shopping local.
We equally remain committed to supporting our
clients, retailer partners and consumers, helping
them solve problems arising from the current
macro economic challenges.
Key trends and changes
since the end of the FY21
financial year in the UK
markets in which PayPoint
operates include:
Macro economic factors
• The Consumer Prices Index (CPI)
1
grew
to 7.8% in April 2022, driven by increased
transport and energy costs
• The GfK UK Consumer Confidence Index
2
fell to -38 in April 2022 (vs -15 in April
2021), with the cost of living crisis hitting
UK consumers and the headline confidence
score dropping to a near historic low, not
seen since the 2008 financial crash and the
first few months of the pandemic in 2020
• UK retail sales fell by 1.4% in March 2022,
with the proportion of retail sales online
falling to 26.0%, continuing a broad
downward trend since its peak in February
2021 (37.1%)
• The Lumina CTP Price Index
3
, tracking
shopper price sensitivity, has grown by 5.4%
since last year, indicating consumers have
already become more price-led, seeking out
budget options and reducing spend
• A recent study from Which?
4
has shown
that the rising cost of living could mean
more people who do not usually use cash
turning to it to manage their finances. A
fih (20%) of non-regular cash users said
they would start using cash if the cost of
living gets worse, with over a third (34%)
of respondents whose annual income was
lower than £20,000 finding cash easier to
budget with, on its own or alongside other
payment methods. Around 15 million regular
cash users say it helps them to keep track
of their spending, underlining its importance
for those on tight budgets
PayPoint Plc Annual Report 202214
Convenience retail
• The UK convenience market grew to
£43.2 billion
5
in 2021 as the pandemic-
induced boost to market value was retained
• PayPoint One basket data shows overall
convenience store average basket spend
in the year has reduced year on year to
£8.89 (FY21: £9.86) vs the highs seen
during the Covid-19 aected prior year.
However, average basket spend has now
grown by 9.6% over the past two years
(FY20: £8.11), driven by cost inflation and
reinforcing continuing consumer demand
to shop local aer government restrictions
have been lied
6
• Total UK convenience store numbers
remained resilient, with marginal growth
of 0.2% to 47,079
7
• The sector continues to see consolidation,
most recently with Morrison’s buying
the McColl’s Retail Group being put into
administration in May 2022, maintaining
over 1,000 stores across the UK
• Local home delivery and click and collect
from convenience stores has grown rapidly
over the past year, driven by the pandemic.
Currently, circa 5% of total convenience
purchases are driven through these
methods and they attract a younger, more
auent consumer, with basket spend being
+128% higher than in-store shoppers
8
Card payments
• Growth has again been driven by the shi
from cash to card payments accelerated
by Covid-19
• Forecast growth in UK debit card market
by 2027 to 19.7 billion payments
9
• In the financial year, card payment volumes
increased by 3.5% year on year in the
PayPoint business, against strong volumes
in FY21 due to Covid-19
• Latest UK Finance data shows a 44.1%
increase in debit card transactions (January
2022 vs January 2021) with 66.8% of
transactions now contactless (vs 56.9% in
January 2021) driven by the increase in the
contactless limit to £100 in October 2021
• In the SME markets that our Handepay
business serves, businesses employing
0-49 people, account for 99.2% (5.5
million) of the total UK business population,
with 75% (4.2 million) having no employees
and a further 20% (1.1 million) classed as
micro-businesses with 0-9 employees
10
.
Retail, auto trade and hospitality businesses
make up circa 14% of the SME sector
11
Cash Out
• Despite the shi from cash usage during
Covid-19, PayPoint’s Cash Out service has
grown significantly year on year, driven by
ongoing government meal voucher schemes
and Covid-19 related hardship funds. In
addition, the launch of the Payment Exception
Service, run for the Department for Work
and Pensions via our i-movo business, has
further underlined the continuing importance
of delivering cash payments to those
without access to a standard bank account
and replaces the Post Oce Card Account,
which is coming to an end
• Latest data from February 2022 showed
LINK’s ATM transactions were 19% higher
(117 million transactions) than 2021 during
lockdowns, but 36% down on 2020, which
was just before the start of the pandemic.
The number of ATMs in the UK reduced by
1.1% year on year to 52,613
• Access to cash remains a key priority in the
UK. The Financial Conduct Authority and
Payment Systems Regulator are taking a
joint approach to maintaining services for
the many people who continue to rely on
cash as a vital way of making payments.
The Access To Cash Action Group, chaired
by Natalie Ceeney, has been working on
Community Access To Cash pilots, including
PayPoint’s Counter Cash service, which
launched in November 2021 oering
cashback without purchase and balance
enquiries over the counter
Parcels
• Online retail sales in 2021 were down 5.6%
year on year, according to IMRG’s Online
Retail Performance Report 2021
12
, vs 2020
which was positively impacted by Covid-19.
• IMRG data shows that click and collect
share of the delivery market in November
2021 to January 2022 dropped year on
year to 18% (vs 20% in the same period
last year), but still lower than the high of
35% seen in 2019
• This contrasts with the strong performance
seen in the Collect+ network in FY22 as
transactions were +25.2% vs the prior year,
outperforming the overall online retail sales
market and driven by a resurgence in the
clothing and footwear categories, which
performed poorly in 2020, and the strength
and breadth of carrier relationships and
categories handled across the network
of over 10,000 locations
1. https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/
consumerpriceinflation/april2022
2. https://www.gfk.com/en-gb/press/uk-consumer-confidence-in-freefall-as-
index-crashes-in-april-to-36
3. Lumina Intelligence Convenience Strategy Forum March 2022
4. Macro economic factors’. https://press.which.co.uk/whichpressreleases/cash-
a-lifeline-for-keeping-track-of-spending-for-15-million-people-amid-cost-of-
living-crisis-which-research-reveals/
5. Lumina Intelligence Convenience Market Report July 2021
6. PayPoint One Basket Data – April 2019 – March 2022
7. ACS Local Shop Report 2021
8. Lumina Intelligence Convenience Market Report July 2021
9. https://www.ukfinance.org.uk/system/files/Summary-UK-Payment-
Markets-2018.pdf
10. https://www.fsb.org.uk/uk-small-business-statistics.html
11. https://www.gov.uk/government/statistics/business-population-estimates-2021
12. IMRG Online Retail Performance Report 2021
13. Metapack E-Commerce Delivery Benchmark Report 2021
14. https://www.imrg.org/uploads/media
default/0001/08/2477f50ad2fee946cdf5ed23ebb8df21f2489d09.pdf?st.
15. OC&C analysis
16. https://www.ofgem.gov.uk/energy-policy-and-regulation/policy-and-regulatory-
programmes/default-tari-cap#:~:text=The%20Prepayment%20Meter%20
Price%20Cap%20came%20into%20force,Price%20Cap%20expires%20at%20
the%20end%20of%202020
17. https://www.ofgem.gov.uk/data-portal/retail-market-indicators
18. https://www.gov.uk/government/statistics/smart-meters-in-great-britain-
quarterly-update-december-2021
• Metapack data
13
shows that 87% of UK
consumers have shopped more online
during the pandemic, with 71% having
returned a product. Delivery preference
is key in the e-commerce journey, with
56% considering it the most important
factor when shopping online. Home
delivery is still the preferred channel for
82% of consumers, with PUDO at 8% and
lockers at 2%
• The Out of Home (OOH) market comprises
click and collect, returns and send
propositions. The click and collect market
is 11% of all volumes with 150 million
parcels per year and is expected to double
by 2025
14
. Returns and send volumes are
estimated at c.185 million and c.380 million
parcels per year respectively
15
Bill payments and top-ups
• The dislocation of the energy market
heightened in September 2021, with
operator insolvencies and pressure from
rising wholesale prices. A well-established
Ofgem process to support and transfer
customers to new suppliers was invoked
with minimal impact and risk to our business
and client base. PayPoint’s focus through
the period has been on increased client
engagement and leveraging the strength
and stability of our network to provide an
uninterrupted service to consumers
• The price cap for pre-pay customers
increased to £1,309
16
for the six months to
March 2022, which was 13% higher than
the cap of £1,156 in the six months
from April 2021 to September 2021. From
1 April 2022, the price cap increased by a
further 54% to £2,017 for the six months
to September 2022
• Non-Big Six energy providers combined
market share increased marginally to
29.6%
17
at the end of January 2022
(29% as of 31 March 2021)
• The rollout of smart meters has regained
pace following the impact of Covid-19
in 2020. 4.5m meters were installed in
2021
18
versus 3.2m in 2020. The deadline
for completion of the rollout has now been
extended to 30 June 2025
• PayPoint data shows average transaction
values for dual-fuel had grown to £15.66
in March 2022, from £14.10 in the previous
year, aecting frequency of visits and
transaction volumes
• The number of mobile subscribers declined
to 21.5 million subscribers in April 2022,
from 22.2 million in April 2021
Strategic report Governance Financial statements Shareholder information 15
PayPoint Plc Annual Report 202216
How we deliver
innovative services
What makes our model work
How we create value
Unparalleled network of retailer
partners and SMEs
• the enlarged PayPoint Group now delivers technology and services
to a universe of over 60,000 SME and retailer partner locations
across multiple sectors, including food services, convenience retail,
garages and hospitality
A diverse range of clients and brands
• our Shopping division serves the best SMEs and retailers in the UK,
delivering digital solutions and essential services from large retailers,
like Asda, The Co-operative Group and EG Group, to the best
independent store owners across the country
• our E-commerce division enables the delivery of best-in-class
customer journeys for e-commerce brands over the first and last mile,
including Amazon, eBay, Yodel, FedEx, DPD, DHL, HubBox, Randox
and Parcel2Go
• our Payments & Banking division delivers digital payment solutions
to clients across diverse sectors, including energy, housing, local
authorities and a growing portfolio of digital brands such as Amazon,
PlayStation, Xbox and Love2Shop
Cutting-edge technology
• we pride ourselves on delivering innovative technology and services
across all our business divisions, whether through PayPoint One,
helping our convenience retailer partners run their businesses more
eciently, or our proprietary e-commerce soware solutions that
have a singular focus on the delivery of great consumer experiences
and confidence in the crucial first and last mile of parcel journeys
Talented and committed people
• we have a talented, diverse and committed workforce with years of
experience from a wide range of industries
Our business model
Our three business
divisions driving
growth in the UK:
Shopping
Read more on page 20
E-commerce
Read more on page 24
Payments
& Banking
Read more on page 28
Strategic report Governance Financial statements Shareholder information 17
The value we createHow we create value
Our purpose is to deliver
innovative services that
make millions of people’s
lives a little easier every day
Connecting millions of
consumers with over
60,000 retailer partner
and SME locations:
Local communities
We provide essential services to
hundreds of communities across the UK,
at over 28,000 locations, with 99.2%
of the population living within one mile
of a PayPoint location in urban areas
Population within one mile
99.2%
Investors
We aim to deliver a sustainable and
rewarding business model and superior
returns for our investors
Dividends paid per share
33.6p
Employees
We create a dynamic and innovative
place to work for our employees
across the PayPoint Group
No. of employees
670
Retailers and SMEs
We enhance the retailer proposition and
consumer experience, driving footfall,
new commission opportunities and better
store management tools for thousands of
SMEs and retailers across the UK
Retailer and SME locations
63,657
Consumers
We serve millions of consumers every
day, online and in-store, helping them
make payments and send/pick up parcels
through our digital payments platforms
and extensive retailer partner network
Transactions per year
645.6m
Creating a better
in-store experience
We provide digital solutions to help our retailer
and SME partners keep pace with changing
shopper needs, service expectations and
demographics, oering everything a modern
business needs, including EPoS, parcel
services, Counter Cash, card and bill payments,
home delivery and digital vouchering
Delivering great
customer journeys
We enable the delivery of best-in-class
customer journeys for e-commerce brands
over the first and last mile in c.10,000
locations through our Collect+ brand, helping
consumers pick up and drop o online
shopping or send parcels across the UK
Delivering a channel-
agnostic payment platform
We have continued our diversification to
digital payments, helping organisations
seamlessly and eectively serve their
customers. Our market-leading omnichannel
solution – MultiPay – is an integrated solution
oering a full suite of digital payments
PayPoint Plc Annual Report 202218
E-commerce Division
technology-based
e-commerce delivery
mile customer journeys
Shopping Division
1. Embed PayPoint Group
at the heart of SME
and convenience retail
businesses
Payments &
Banking Division
3. Sustain leadership in
‘pay-as-you-go’ and
grow digital payments
PayPoint Group
4. Building a delivery
focused organisation
and culture
• Counter Cash live in 2,624 sites, oering vital access to cash over the counter and
complementing existing ATM estate
• SME proposition enhanced, including Handepay one-month rolling contract launched successfully
to over 2,300 SMEs, business finance via YouLend with over £8.5m lent across PayPoint and
Handepay, and new technology developed
• Snappy Shopper live in 269 sites, helping retailer partners oer local home delivery and click
and collect
• Strong sales team delivery across PayPoint and Handepay, with over 6,900 installs across both
businesses, increased engagement, visits, training and support for retailers and SMEs and uniting
under new Sales Director
• Parcel transaction growth of +25.2% year on year vs FY21, driven by best ever peak Christmas
performance, strong Q4 with transactions +38.8% year on year driven by a resurgence in the
clothing and footwear categories and continued improvements to the consumer in-store
experience, particularly through our investment in ‘print in store’ technology
• New partnership launched with Randox, enabling consumers to order tests online for click-and-
collect at over 2,000 Collect+ sites
• Expanding services to existing clients with DHL in-store returns and Amazon returns, enabled by
further Zebra label printer rollout
• First multi-carrier innovation, trends and future opportunities workshop held in January 2022 to
review best practice and performance from the successful peak 2021 period and agree initiatives
to drive further excellence
• Continued diversification from cash to digital with 28 new client services now live, 19 coming
from non-energy sectors and 18 taking digital payments solutions, supported by development
of additional capabilities, including Open Banking and new Direct Debit platform
• New Payment Exception Service launched via i-movo for DWP, contributing £1.6m of net revenue
• First major digital contract now live with Optivo, one of the UK’s largest housing associations
• Acquisition of RSM 2000 completed on 12 April 2021 – positive contribution of £1.1m net
revenue with charity and housing sector action plan underway to expand digital payments
services to new and existing clients
• Anna Holness joined the Executive Board as Sales Director in January 2022, leading the retail
and card services sales teams across PayPoint and Handepay
• Four internal promotions made to the Executive Board in January 2022, recognising their critical
roles in delivering our growth agenda: Jo Toolan, Head of Client Management; Jay Payne, IT
Service and Operations Director; Chris Paul, Head of Corporate Finance; and Steve O’Neill,
Corporate Aairs and Marketing Director
• Integration work now complete for acquisitions of Handepay/Merchant Rentals, RSM 2000
and i-movo
• Further development of our ESG approach, with core ESG Working Group formed to analyse
cross-industry best practice, seek feedback from external stakeholders and investors, and
recommend workstreams and targets for the business to prioritise
Strategic priorities FY22 progress
Our strategic
framework
Our strategy
Strategic report Governance Financial statements Shareholder information 19
• Bring all new card payments business across PayPoint retail and Handepay
under a single acquiring service provider
• Expand Counter Cash service across UK retail network
• Build on our reinvigorated retailer engagement programme to drive further
consumer and retailer awareness and adoption of new services
• Grow SME and retailer partner lending proposition, developing new commercial
partnerships and building on success of YouLend
• Deliver further enhancements to our retailer proposition, including refreshed
third-party EPoS strategy
• Deliver broader SME proposition across Handepay customer base via rollout
of new Android terminal
• Deliver Universal Returns proposition for carrier partners to all Collect+ locations
• Expand successful ‘in-flight divert’ service to more carriers, where parcels are
automatically diverted to the nearest pick up point aer initial unsuccessful
delivery attempt at home
• Explore additional opportunities to expand carrier proposition, including trial
of parcel lockers
• Continue to drive leadership for in-store technology and consumer experience
within the sector, supporting carrier partners with data, insights and
opportunities to expand their customer oering
• Create payment channel-agnostic platform, including Open Banking, Direct
Debit, card processing and real-time cash, creating a strong set of capabilities
for each target vertical, particularly housing and charities
• Continue to invest in new verticals and deliver new business wins, particularly
within the housing, newspaper, charity and not-for-profit sectors
• Reinforce PayPoint’s position as the leader for ‘cash out’ services for local
authorities and housing associations, supporting them in digitally disbursing
vital funds to customers in cash
• Grow cash through to digital category further, partnering with major brands
to drive greater consumer awareness
• Deliver further growth opportunities and synergies from our acquisitions over
the past two years
• Embed our ESG approach across the business to deliver responsible and
sustainable value for shareholders
• Expand our ‘Welcoming Everyone’ programme to build on our commitments to
diversity, equity and inclusion and support our vision to create a dynamic place
to work
• Invest to build further resilience into our service delivery, including improving
quality and speed of agile delivery, reviewing ‘heritage’ systems and settlement
infrastructure and enhancing customer support and collaboration
FY23 priorities KPIs Risks
Link to principal risks
1
Competition and Markets
2
Emerging Technology
3
Transformation
4
Operating Model
5
Legal and Regulator
6
People
7
Cyber Security
8
Business Interruption
9
Credit and Operational
10
Operational Delivery
1
2
3
4
5
6
7
8
9
10
1
2
3
4
5
6
7
8
9
10
1
2
3
4
5
6
7
8
9
10
1
2
3
4
5
6
7
8
9
10
PayPoint One sites
18,120
(FY21: 17,462)
Card payment transactions
369.3m
(FY21: 225.0m – two months only
of Handepay/Merchant Rentals)
Parcel transactions
33.3m
(FY21: 26.6m)
Parcel net revenue
£4.9m
(FY21: £3.6m)
Digital transactions
34.2m
(FY21: 27.2m)
Digital transaction value
£756.6m
(FY21: £545.7m)
Employee engagement –
collaboration score
70
(FY21: 62)
PayPoint Plc Annual Report 202220
Divisional review
We provide digital solutions, technology and payment services for SMEs and retailers to deliver vital
community services.
Retail services – we help our retailer and SME partners keep pace with changing shopper needs, service
expectations and demographics. Our retail services platform, PayPoint One, is live in over 18,120 stores
across the UK and oers everything a modern convenience store needs, including EPoS, parcel services,
card and bill payments, home delivery and digital vouchering. This empowers our retailer partners to grow
their businesses profitably, achieving higher footfall and increased spend. We also provide access to cash
solutions via our network of 3,686 ATMs and our pioneering Counter Cash service, oering cashback
without purchase and balance enquiries over the counter, is now live in 2,624 sites.
Card payments – we provide card payments services for over 30,000 SMEs and convenience retailers
across the hospitality, convenience retail, auto trade, clothing and household goods sectors via our
PayPoint, Handepay, Merchant Rentals and RSM 2000 brands.
Priority 1:
Embed the
PayPoint Group
at the heart
of SME and
convenience
retail businesses
• Counter Cash live in 2,624 sites, oering vital access to cash over the counter and complementing
existing ATM estate
• SME proposition enhanced, including Handepay one-month rolling contract launched successfully to
over 2,300 SMEs, business finance via YouLend with over £8.5m lent across PayPoint and Handepay,
and new technology developed
• Snappy Shopper live in 269 sites, helping retailer partners oer local home delivery and click and collect
• Strong sales team delivery across PayPoint and Handepay, with over 6,900 installs across both
businesses, increased engagement, visits, training and support for retailers and SMEs and coming
together under new Sales Director
FY22 Progress
Shopping
FY23 Priorities
• Bring all new card payments business across PayPoint retail and Handepay under a single acquiring
service provider
• Expand Counter Cash service across UK retail network
• Build on our reinvigorated retailer engagement programme to drive further consumer and retailer
awareness and adoption of new services
• Grow SME and retailer partner lending proposition, developing new commercial partnerships and
building on success of YouLend
• Deliver further enhancements to our retailer proposition, including refreshed third-party EPoS strategy
• Deliver broader SME proposition across Handepay customer base via rollout of new Android terminal
Strategic report Governance Financial statements Shareholder information 21
PayPoint One Sites
18,120
Key drivers
• Growth in PayPoint One rollout and service fee
• Growth in card payments and acquisition of
Handepay/Merchant Rentals
• Enhancement of retailer proposition and engagement,
inc. Counter Cash, Snappy Shopper, MyStore+
How we deliver
Retail Service
• PayPoint One, EPoS, Counter
Cash, Home Delivery, FMCG,
ATMs, Business Finance
Card payments
• PayPoint & Handepay/
Merchant Rentals & RSM 2000
The transformation of the PayPoint Group over the
last two years has driven new growth opportunities
Given Covid-19 disrupted FY21, we have provided comparisons below with FY20 to demonstrate this
shi across the Group.
Net revenue
£35.4m
Percentage
of Group
33.1%
Net revenue
£58.7m
Percentage
of Group
51.0%
+66.3%
FY20 FY22
Net revenue
£26.6m
Percentage
of Group
24.9%
Net revenue
£28.3m
Percentage
of Group
24.6%
Net revenue
£8.7m
Percentage
of Group
8.2%
Net revenue
£30.4m
Percentage
of Group
26.4%
+6.4% +249.4%
FY20
Sub-division Performance
FY20FY22 FY22
Retail Service Cards
PayPoint Plc Annual Report 202222
Divisional review continued
Shopping
Enhancing
the retailer
proposition proposition
& consumer & consumer
experienceexperience
Strategic report Governance Financial statements Shareholder information 23
Q&A with
Anna Holness
Sales Director
What have your impressions been of the
business since you joined in January?
The breadth and scale of what we do is
enormous, playing a vital role in the lives of our
consumers, retailer partners and clients every
day. There is a great responsibility that comes
with what we do and I’ve been impressed
by how dedicated and focused the whole
business is to delivering for communities
across the UK as well as putting our retailer
partners at the heart of what we do.
What opportunities are you most excited
about for your retailer partners?
We have done a lot of work to enhance
our retailer proposition over the past two
years, bringing more opportunities to earn
and helping them support the communities
they serve through the sheer diversity of
what we oer. There are many challenges in
convenience retail and the broader economy
that our retailer partners are facing right now
and we’re committed to working together with
them to help solve the problems that they and
their customers are facing.
A great example is our Counter Cash service –
as well as providing vital Access to Cash at the
heart of communities across the UK, the rollout
has allowed us to spend more valuable time
engaging our retailer partners, understanding
their challenges and seeing how we can
leverage the full range of opportunities we
can oer to help them.
What’s the one big future opportunity
that you’re working on?
Segmenting and profiling our retailers will be
key to better targeting our propositions, how
we serve them and set them up for success.
The PayPoint Group universe is no longer a
‘one size fits all’ solution so it’s important
that we continue to listen to what they and
their customers need and our retailer partner
network. What’s right for an urban store in
central London will be dierent to what works
in a rural store in Wales, and we’re focused on
maximising the opportunity for them and for
us so that we continue to oer vital services
to millions of consumers every day.
PayPoint Plc Annual Report 202224
Divisional review continued
E-commerce
We provide a technology-based platform to deliver best-in-class customer journeys for e-commerce
brands and their customers over the ‘first and last mile’, leveraging our proprietary soware capability and
expertise with continuous investment and innovation in the in-store experience.
We deliver all of this in over 10,000 locations through our Collect+ brand, helping consumers pick up and
drop o online shopping or send parcels across the UK. We work with a comprehensive range of partners,
including Amazon, eBay, Yodel, Fedex, DPD, DHL, HubBox, Parcels2Go and Randox. Our proprietary PUDO
soware solutions are built in-house, with a singular focus on the delivery of great consumer experiences
and confidence in the crucial first and last mile of parcel journeys. These solutions are easily deployable in
thousands of diverse locations across multiple sectors through the PayPoint Group. Our unique blend of
in-depth parcel operations experience, consumer interaction and agile IT development capability has been
built over years of delivering best-in-class customer experiences.
Priority 2:
Become the
technology-based
e-commerce
delivery platform
mile customer
journeys
• Parcel transaction growth of +25.2% year on year vs FY21, driven by best ever Peak Christmas
performance, strong Q4 with transactions +38.8% year on year driven by a resurgence in the
clothing and footwear categories and continued improvements to the consumer in-store experience,
particularly through our investment in ‘print in store’ technology
• New partnership launched with Randox, enabling consumers to order tests online for click-and-collect
at over 2,000 Collect+ sites
• Expanding services to existing clients with DHL in-store returns and Amazon returns, enabled by
further Zebra label printer rollout
• First multi-carrier innovation, trends and future opportunities workshop held in January 2022 to review
best practice and performance from the successful peak 2021 period and agree initiatives to drive
further excellence
FY22 Progress
FY23 Priorities
• Deliver Universal Returns proposition for carrier partners to all Collect+ locations
• Expand successful ‘in-flight divert’ service to more carriers, where parcels are automatically
diverted to the nearest pick-up point aer initial unsuccessful delivery attempt at home
• Explore additional opportunities to expand carrier proposition, including trial of parcel lockers
• Continue to drive leadership for in-store technology and consumer experience within the
sector, supporting carrier partners with data, insights and opportunities to expand their
customer oering
Strategic report Governance Financial statements Shareholder information 25
Parcel
transactions
33.3m
Parcel
net revenue
£4.9m
Key drivers
• Development of e-commerce delivery platform yielding strong year
on year transaction growth
• Continued investment in technology and in-store experience, inc.
label printers and app
• Reshaped carrier relationships, expansion of brand portfolio and
service provision
How we deliver
• Consumer parcel send, pick up and drop o
• No.1 carrier-agnostic Out Of Home (OOH) network, with best-in-class
technology and consumer experience
• Leadership in consumer data and insights to drive sector innovation
Collect+ is our technology-based platform to deliver
best-in-class customer journeys for e-commerce
brands and their customers over the ‘first and last mile’
Net revenue
£4.1m
Percentage
of Group
3.8%
Net revenue
£4.9m
Percentage
of Group
4.3%
+19.5%
FY20 FY22
Our partners
PayPoint Plc Annual Report 202226
Divisional review continued
E-commerce
Providing
best-in-class
e-commerce
journeys
Strategic report Governance Financial statements Shareholder information 27
Q&A with
David Wild Richard Gill
Retail Distribution Manager Parcels Key Account Manager
What was the key to the success of the
Randox Covid-19 travel test kit rollout?
The big factor here was the speed and agility
demonstrated by the whole business to
mobilise and solve a client and consumer
problem in the space of three weeks. Given
the constant changes in government guidance,
this was a time-limited opportunity which
needed a will and determination to make it
happen, particularly in establishing third party
logistics operations for the first time and
supporting our retailer partners in delivering a
new service for Randox and their customers.
It was also a fantastic example of leveraging
the strength of our network and the flexibility
of our technology platform to help solve a
logistics and customer experience problem for
our client and to ultimately help keep people
safe in communities across the UK.
What impact do you think the service had
on customers around the country?
This was all about making it easier and more
convenient to access travel test kits, by
enabling people to order a Randox test online
for click and collect at a local store within the
Collect+ network. With well over million travel
test kits processed to date for consumers, it’s
clear that this was a vital additional service
enabling them to access low-cost Covid-19
travel tests on their doorstep.
What’s the reaction been from Randox?
The reaction from the Randox team has been
very positive – we’ve worked very closely with
them to improve their customer experience,
solve logistics challenges and deliver cost
savings and eciencies for their operations.
The relationship we’ve built is strong and, as
government protocols and guidance have
continued to evolve, we are now supporting
Randox in the rollout of non-travel test kits
to stores as the free testing service has been
ceased in the UK.
and
PayPoint Plc Annual Report 202228
Divisional review continued
Payments
& Banking
We deliver a channel-agnostic payment platform
that gives clients and consumers choice.
Digital – we have continued our diversification to
digital payments, helping organisations seamlessly
and eectively serve their customers. Our market-
leading omnichannel solution – MultiPay – is an
integrated solution oering a full suite of digital
payments. It enables transactions online and
through smartphone apps and text messages, as
well as event payments, over the counter, over the
phone and via interactive voice response (IVR)
systems. It also supports a full range of Direct
Debit options, including scheduling collections,
as well as new product developments such as
Open Banking and PayByLink. MultiPay customers
benefit from real-time visibility of all payments
received, through one easy-to-use portal that
is fully PCI compliant, and allows visibility of all
payment channels – including cash. The platform is
used by a growing number of organisations across
the UK, including many housing associations, local
government authorities and utility providers. Our
Cash Out service also enables the rapid dispersal
of funds through secure digital channels and is
actively used by local authorities and charities
to distribute emergency funds. In August 2021,
we launched the new Payment Exception Service
via i-movo for the Department of Work and
Pensions, digitising benefit payments and replacing
the Post Oce Card Account which is closing.
Cash through to digital – we enable consumers
to access digital brands and services through a
comprehensive portfolio of giing, e-banking
and gaming partners, including Amazon, Xbox,
PlayStation, Paysafe, Monzo and the Appreciate
Group. Consumers simply pay for a ‘pin on receipt’
code in cash in any of our 28,254 retail locations
and then can use that value online with the digital
brand or service chosen. For our challenger bank
partners, consumers can deposit cash into their
accounts across our extensive retail network.
Cash – we provide vital access to cash payment
services across the UK by helping millions of
people every week control their household
finances, make essential payments and access
in-store services. Our UK retail network of
more than 28,000 stores is bigger than all
banks, supermarkets and Post Oces put
together, putting us at the heart of communities
nationwide.
Priority 3:
Sustain
leadership in
‘pay-as-you-go’
and grow digital
payments
• Continued diversification from cash to digital with 28 new client services now live, 19 coming from
non-energy sectors and 18 taking digital payments solutions, supported by the development of
additional capabilities, including Open Banking and new Direct Debit platform
• New Payment Exception Service launched via i-movo for DWP, contributing £1.6m of net revenue
• First major digital contract now live with Optivo, one of the UK’s largest housing associations
• Acquisition of RSM 2000 completed on 12 April 2021 – a positive contribution of £1.1m net revenue
with a charity and housing sector action plan underway to expand digital payments services to new
and existing clients
FY22 Progress
FY23 Priorities
• Create payment channel-agnostic platform, including Open Banking, Direct Debit, card
processing and real-time cash, creating a strong set of capabilities for each target vertical,
particularly housing and charities
• Continue to invest in new verticals and deliver new business wins, particularly within the housing,
newspaper, charity and not-for-profit sectors
• Reinforce PayPoint’s position as the leader for ‘cash out’ services for local authorities and
housing associations, supporting them in digitally disbursing vital funds to customers in cash
• Grow cash through to digital category further, partnering with major brands to drive greater
consumer awareness
Strategic report Governance Financial statements Shareholder information 29
Digital transactions
34.2m
Key drivers
• Built payment channel agnostic platform, supporting diversification
to digital
• Investment in capabilities to secure business in new sectors, including
government, newspapers, housing and charities
• Accelerated decline of cash in legacy business
We deliver a channel-
agnostic payment
platform that gives clients
and consumers choice
Net revenue
£67.4m
Percentage
of Group
63.1%
Net revenue
£51.5m
Percentage
of Group
44.7%
-23.6%
FY20 FY22
Net revenue
£5.5m
Percentage
of Group
5.1%
Net revenue
£7.8m
Percentage
of Group
6.8%
+41.8%
FY20 FY22
Net revenue
£6.9m
Percentage
of Group
6.5%
Net revenue
£8.2m
Percentage
of Group
7.1%
Net revenue
£55.0m
Percentage
of Group
51.5%
Net revenue
£35.5m
Percentage
of Group
30.8%
+18.8% -35.5%
FY20
Sub-division performance
FY20FY22 FY22
Cash through to digital Cash
Sub-division performance
Digital
PayPoint Plc Annual Report 202230
Creating a
payment channel
agnostic
platform
Divisional review continued
Payments & Banking
Strategic report Governance Financial statements Shareholder information 31
Q&A with
Vicky Lynch
Business Development Manager
What has driven PayPoint’s progress
and success in the housing sector?
The key here has been about forging strong
relationships with our clients and actively
listening to the challenges facing them and
their customers. From there, we have worked
collaboratively with those clients and our
product teams to ensure that insight has been
embedded into the product development
roadmap, ensuring that all our digital payments
solutions hit the mark.
What are the big challenges housing
clients are facing right now?
The single biggest challenge is around digital
transformation and managing the increasing
digital expectations of the customers they
serve. Use of digital channels in the Housing
sector has historically been low, with poor
choice and legacy infrastructure deployed,
giving a disjointed experience for customers.
The opportunity here has been to help them
improve the platforms they have, creating
one place for their customers to manage their
relationship with the organisation, and giving
greater visibility to help deliver an improved
customer experience.
Most of their customers are regular users
of well-established digital brands, like
Apple or Amazon, and with that comes high
expectations of a slick, simple user experience,
all of which we can help deliver with MultiPay.
What’s the one big future opportunity
that you’re working on?
Open Banking will make a big dierence to our
clients, either through the additional customer
experience improvements it will deliver, making
it easier for organisations to access data for
the benefit of their customers, or the additional
cost-saving opportunities it will create.
PayPoint Plc Annual Report 202232
Divisional review continued
PayPoint
Group
Underpinning the PayPoint Group’s future success is the continued development and investment in our
people, systems and organisation. We aim to create a dynamic place to work for our people, enabling us
to deliver for our customers by collaborating and being good colleagues to each other, creating a positive
and inclusive environment where everyone can learn, grow and shine.
Priority 4:
Building a
delivery-focused
organisation
and culture
• Anna Holness joined the Executive Board as Sales Director in January 2022, leading the retail and card
services sales teams across PayPoint and Handepay
• Four internal promotions made to the Executive Board in January 2022, recognising their critical roles
in delivering our growth agenda: Jo Toolan, Head of Client Management; Jay Payne, IT Service and
Operations Director; Chris Paul, Head of Corporate Finance; and Steve O’Neill, Corporate Aairs and
Marketing Director
• Integration work now complete for acquisitions of Handepay/Merchant Rentals, RSM 2000 and i-movo
• Further development of our ESG approach, with core ESG Working Group formed to analyse cross-
industry best practice, seek feedback from external stakeholders and investors, and recommend
workstreams and targets for the business to prioritise
FY22 Progress
FY23 Priorities
• Deliver further growth opportunities and synergies from our acquisitions over the past two years
• Embed our ESG approach across the business to deliver responsible and sustainable value
for shareholders
• Expand our ‘Welcoming Everyone’ programme to build on our commitments to diversity, equity and
inclusion and support our vision to create a dynamic place to work
• Invest to build further resilience into our service delivery, including improving quality and speed of
agile delivery, reviewing ‘heritage’ systems and settlement infrastructure and enhancing customer
support and collaboration
Employee engagement
collaboration score
70
Strategic report Governance Financial statements Shareholder information 33
Eective collaboration
has been important as we
have transitioned to new
hybrid working patterns
across the Group
PayPoint Plc Annual Report 202234
Key performance indicators
The PayPoint Group has
to measure progress of
business performance:
Net revenue from continuing
operations (£ million) (UK)
£115.1m
18.5%
Operating margin from continuing
operations before exceptional
items (%) (UK)
41.4%
2.4ppts
Cash generation from continuing
operations excluding exceptional
items (£ million) (UK)
£53.9m
14.9%
Description and purpose: Revenue from continuing
operations less commissions paid to retailers, and the
cost of mobile top-ups and SIM cards where PayPoint
is the principal. This reflects the benefit attributable
to PayPoint’s performance eliminating pass-through
costs and is an important measure of the overall
success of our strategy.
See Financial Review –
‘Overview’ on page 61
Description and purpose: Operating profit from
continuing operations before exceptional items as a
percentage of net revenue. Operating margin provides
a broad overview of the ecient and eective
management of the cost base enabling shareholder
returns and investment in the business.
See Financial Review –
‘Operating margin’ on page 66
Diluted earnings per share from
continuing operations excluding
exceptional items (pence) (UK)
52.8p
23.1%
Dividends paid per share
(pence) (Group)
33.6p
7.7%
Profit before tax from continuing
operations excluding exceptional
items (£ million) (UK)
£45.6m
25.0%
Description and purpose: Diluted earnings from
continuing operations before exceptional items
divided by the weighted average number of ordinary
shares in issue during the year (including potentially
dilutive ordinary shares). Earnings per share is a
measure of the profit attributable to each share.
See note 10 to the financial statements
on page 132
Description and purpose: Dividends (ordinary and
additional) paid during the financial year divided by
number of ordinary shares in issue at reporting date.
Dividends paid per share provides a measure of the
return to shareholders.
See Financial Review –
‘Dividends’ on page 68
Description and purpose: Profit before tax from
continuing operations excluding exceptional items,
provides a measure of the performance of the Group
over the past few years. This reflects the rebalancing
of the business towards growth opportunities, the
shi away from our legacy cash payments business
and is an important measure of the overall success
of our strategy.
See Financial Review –
‘Overview’ on page 61
Description and purpose: Earnings from continuing
operations before exceptional items, tax, depreciation
and amortisation adjusted for corporate working
capital movements (excludes movement in clients’
funds and retailers’ deposits). This represents the
cash generated by operations which is available
for capex, taxation and dividend payments.
See Financial Review –
‘Group cash flow and liquidity’ on page 67
Financial
1. Comparative information has been restated for the retrospective application of the Group’s change in accounting policy on intangible assets. Refer to note 1 and note 32.
2. Comparative KPIs have been restated for the discontinued operation.
FY22 45.6
36.5
50.0FY20
2
FY21
1
FY22
39.0
47.2FY20
2
FY21
1
FY22 115.1
97.1
106.8FY20
2
FY21
1
FY22 33.6
31.2
84.0FY20
FY21
FY22
42.9
58.1FY20
2
FY21
1
FY22 53.9
46.9
57.9FY20
2
FY21
1
41.4
52.8
Strategic report Governance Financial statements Shareholder information 35
Network stability one-mile urban
population cover (%)
99.2%
(0.2)ppts
Retailer partner site churn
(%) (UK)
5.3%
(4.8)ppts
Network stability five-mile rural
population cover (%) (UK)
98.2%
(0.1)ppts
Employee engagement
(%) (UK)
72.0%
(5.0)ppts
Description and purpose: Total urban population
covered within a one-mile radius of a PayPoint site.
This is monitored to ensure PayPoint is above our
minimum service level agreement of 95%.
Description and purpose: The percentage of the
retailer partner network that on an annual basis exits
PayPoint. This is calculated by taking the number
of retailers which exited PayPoint in the period
(excluding suspended sites), divided by the average
number of total UK retailer partner sites for the
period. This tracks the movement in total UK retailer
partner sites.
Description and purpose: Total rural population
covered within a five-mile radius of a PayPoint site.
This is monitored to ensure PayPoint is above our
minimum service level agreement of 95%.
Description and purpose: Measures the overall
employee engagement of our UK population,
calculated by our survey provider. The survey provides
insight into the health of our organisation, enabling
the identification of what is important to our people
so that appropriate action can be taken.
FY22 5.3
3.6
8.4FY20
FY21
FY22 99.2
99.4
99.5FY20
FY21
FY22 72.0
77.0
68.0FY20
FY21
FY22 98.2
98.3
98.3FY20
FY21
PayPoint Plc Annual Report 202236
Waste
management
Our peopleTransparency
Diversity &
inclusion
Partners
SocietyRisk management
Regulation
Anti-bribery
& corruption
Natural
resources
Climate
change
Innovation
ESG
Environment
SocialGovernance
How we operate
eciently and responsibly
Responsible business
This has been driven by a core ESG Working
Group, formed at the beginning of the financial
year to review policies and approaches
across the Group, analyse cross-industry
best practice, seek feedback from external
stakeholders and investors, and recommend
workstreams and targets for the business to
prioritise for the coming year.
All of our environmental commitments are now
aligned with the Task Force on Climate-related
Financial Disclosures (TCFD) framework.
The PayPoint Group has always had ESG at
its core, particularly given the diverse range of
stakeholders and customers that we serve, as
well as the important role that we play at the
heart of communities across the UK. Central
to this is our purpose of ‘making people’s lives
a little easier’ and how we deliver innovative,
sustainable services and value for all our
stakeholders.
We have built on the important work done in
the last financial year to develop our strategy,
approach and targets to embed ESG in
everything that we do, which now reflects
the expanded universe across our Group
businesses.
We hold ourselves
accountable for
delivering positive
outcomes for all of our
stakeholders through
the implementation
of a meaningful ESG
strategy and measures.
Strategic report Governance Financial statements Shareholder information 37
We commit to: By
1
Achieve Net-zero in our own
operations (scope 1 and 2
emissions) by 2030
• Moving to carbon-neutral gas and electricity contracts in Haydock at contract
renewal in 2024 (already achieved in Welwyn Garden City)
• Retiring diesel company cars, introducing an electric company car option in
addition to hybrid model in FY23 and stopping ordering new hybrid models by
the end of 2025, subject to the required charging infrastructure being in place
• Assessing options to reduce company car mileage
2
Achieve a 30% reduction in
emissions generated by use
of sold products by 2030
• Replacing PayPoint One devices with alternatives that are more energy ecient
• Considering energy consumption in product design
• Encouraging retailer partners to use renewable energy and minimise
consumption
3
Support a reduction in employee
commuting emissions by
encouraging the transition
to electric vehicles
• Charging points to be installed at oce locations in FY23
• Electric car leasing scheme to be considered for introduction in FY23
• Relaunching our cycle-to-work scheme with an enhanced purchase limit in FY23
• Continue hybrid working policy delivered in 2021
• ‘Think before you travel’ guidance to be developed and issued
4
Engage and educate our
people on ESG matters to drive
engagement and build ESG
considerations into our every day
• Regular programme of communication and training to be implemented
5
Achieve Net-zero across our
entire value chain by 2040
• Achieving the targets set out above
• Identifying additional actions to reduce emissions as our strategy evolves and
we benefit from advancements in technology and the transition to renewable
energy more generally
6
Ensure all of our employees
are paid a minimum of the Real
Living Wage from July 2022
• Increasing salaries at pay review in July 2022 and reviewing annually thereaer
7
Continue to develop an
inclusive culture
• Embedding of ‘Welcoming Everyone’ approach to inclusion (see page 45)
Our commitments and targets
The PayPoint Group is a low impact, low carbon intensive business. We remain committed
to improving what we do, including achieving Net-zero in our own operations by 2030 and
Net-zero across our entire value chain by 2040
1
.
1. Our goal of achieving net zero in our own operations by 2030, and across our entire value chain by 2040, will be achieved by eliminating where possible GHG emissions as
calculated under GHG Protocol emission factors, and osetting residual GHG emissions that cannot be eliminated.
PayPoint Plc Annual Report 202238
PayPoint is a
low-impact, low-
carbon-intensive
business that
aims to reduce its
environmental impact
by reducing carbon
emissions, waste
and considering
environmental and
sustainability issues.
Climate change
We aim to reduce emissions and maximise the
resource eciencies of our operations. We
have moved to a new hybrid way of working,
reducing commuting journeys and engaging
with our people to encourage sustainability
at home as well as in the oce. During the
year we published guidance to our employees
to help them consider how to reduce energy
consumption at home.
Our GHG emissions
In this section we report on all required GHG
emissions in accordance with the Companies
Act 2006 (Strategic Report and Directors’
Report) Regulations 2013. The Streamlined
Energy & Carbon Reporting (‘SECR’)
regulations came into eect on 1 April 2019
and we follow the guidelines to comply with
these new regulations.
We report using a financial-control approach
to define our organisational boundary. A range
of approaches can be taken to determine the
boundaries of an organisation for the purposes
of GHG reporting, including financial control,
operational control or equity share.
In line with our climate strategy, tonnes CO
2
e
per employee in our own operations (scope
1 and 2) reduced during the year from 0.73
to 0.66 tonnes CO
2
e per employee. This
reflects energy-saving initiatives in our oces
and switching energy contracts for our head
oce to carbon-neutral. Scope 1 emissions
increased during the year as business journey
emissions transitioned to scope 1 from scope
3, as more business journeys were made in
company cars rather than employee owned cars.
However, there was an overall decrease in
emissions from business journeys as new
company cars are hybrid, and replace journeys
that would otherwise have been made in
petrol and diesel cars. In addition, we will soon
be oering electric company cars which will
further reduce overall emissions from business
journeys that may have otherwise been made
with petrol, diesel and hybrid cars.
Tonnes CO
2
e per employee across our entire
value chain (scope 1, 2 and 3) increased
during the year from 9.87 to 14.25 tonnes
CO
2
e per employee which is driven by two
primary factors:
(a) This year there was a full year of Handepay
and Merchant Rentals metrics, as
opposed to only two months last year
following the acquisitions. Handepay
and Merchant Rentals have higher CO
2
e
per employee due to the number of card
terminals in operation at merchants and
the business model of a large proportion
of employees being in field sales incurring
business journeys.
(b) An increase in the purchase of
manufactured goods including ATM’s,
terminals and IT equipment. We
recognise emissions on the purchase of
manufactured goods, upon receipt of
goods, and as we enter into a period of
updating our terminal estate, we will see
higher emissions in this category in the
short term. However our terminals typically
have a long lifespan so the increase in
emissions over the coming years will be
oset when purchases will be significantly
lower. Replacement terminals are smaller
than legacy terminals resulting in less
GHG emissions Units
Year ended
31 March
2022
Year ended
31 March
2021
Scope 1 (fuel combustion) tonnes CO₂e 151 60
Scope 2 (purchased electricity) tonnes CO₂e 293 320
Total scope 1 & 2 tonnes CO₂e 444 380
No. of employees on 31 March 2022 670 519
Total scope 1 & 2 per employee tonnes CO₂e 0.66 0.73
Scope 3 tonnes CO₂e 9,104 4,740
Total scope 1,2 & 3 per employee tonnes CO₂e 14.25 9.87
NB. Comparative information has been restated for the disposal of the Romanian business. Data for the year ended
31 March 2022 now includes a full year of Handepay/Merchant Rentals post acquisition.
Responsible business continued
Environment
Strategic report Governance Financial statements Shareholder information 39
emissions from manufacturing and they
are much more energy ecient, reducing
emissions when deployed at retailers and
merchants. Additionally, there will be less
waste on disposal when they eventually
reach their end-of-life.
For scope 2, kilowatts per hour (KWh)
increased to 1.38 million in the year
(FY21: 1.24 million) due to a full year of
Handepay and Merchant Rentals metrics.
We signed a new energy contract for Welwyn
Garden City in October 2021 which means
that all gas and electricity used in the oces
is now carbon-neutral, and are committed to
implementing this in our Haydock oce at
contract renewal in 2024. We have made some
changes to the cars that we provide for our
sales force, oering hybrid options only, and
will introduce an electric option this year. We
are encouraging the use of electric vehicles
throughout the workforce by implementing
electric charging points and introducing
an electric car leasing scheme. We are also
relaunching our cycle-to-work scheme. Our
Salesforce platform already optimises the
journeys of our field team and we continue
to seek options to reduce their CO
2
emissions
even further.
Being a responsible business means that
we need to be mindful of our environmental
impact beyond our own operations. We have
implemented an ESG questionnaire into our
procurement process to ensure that ESG
matters are considered in decision-making and
to ensure that our existing suppliers are aligned
with our ESG policies and commitments.
Our next phase 2 Energy Saving Opportunity
Scheme assessment is due in December
2023 (the last assessment was completed
in November 2019).
Innovation
Our innovative digital solutions support
a reduction in our environmental impact.
Recent examples include:
• the acquisition of i-movo, the UK’s leading
secure digital vouchering system, enables
us to oer an alternative to paper vouchers
thereby reducing paper usage
• our pioneering Counter Cash Service, a
‘cashback without purchase’ solution,
enables cash withdrawals without the need
for ATMs. Energy consumption is thereby
reduced together with our need for the
supply and distribution of ATMs
• our parcels service enables carriers to
reduce their journeys by delivering multiple
parcels to a single store for collection
Our Green Team of volunteers works with
us to identify opportunities and implement
sustainability initiatives in our oces. Their
input has led to the introduction of new
recycling bins that make it easier for our people
to recycle items, the relaunch of our cycle-to
-work scheme, the introduction of electric
charging points, the electric vehicle leasing
scheme and the introduction of a new milk
supplier, providing milk in glass bottles which
are collected and reused.
Natural resources
Water
We use water for domestic purposes such as
washroom facilities. Our current measures to
reduce usage include time-controlled taps and
dishwashers and reduced-flush toilets. With
the transition to hybrid working, we expect our
water consumption will not revert to previous
levels and we will be actively working with our
people to reduce their water usage at home.
Waste management
We recycle wherever possible, including paper,
cans, plastic, cardboard, computer equipment
and PayPoint terminals. New recycling
bins have been implemented in our oces
to make this as simple as possible for our
people. Plans are to be resurrected to recycle
batteries, glasses, specialised clothing and
mobile phones.
Redundant equipment is recycled by ISO
27001 accredited firms which are certified by
the Asset Disposal and Information Security
Alliance (‘ADISA’). ADISA recycles as much of
the equipment as possible. Any parts which
are not recyclable are disposed of in line with
the Waste Electric and Electronic Equipment
Regulations 2013 (‘WEEE’). ATMs which have
reached the end of their life are disposed
of via Cennox. All surrounding materials are
segregated into four key material types: metal;
circuitry boards; wires; and WEEE. Cennox
operates an internal recycling process for all of
these materials with the exception of WEEE
waste which is collected by their licensed
waste carrier.
PayPoint Plc Annual Report 202240
Responsible business continued
TCFD
Governance
Describe the Board’s oversight
of climate-related risks and
opportunities
The Board sets the Group’s overall strategy and risk appetite including in relation to sustainability, the environment
and carbon emissions. The Executive Board sets PayPoint’s climate and TCFD responsibility agendas and
recommends strategy to the Board. An ESG Working Group was formed during the year which oversees PayPoint’s
environment, climate and TCFD matters and provides regular updates to the Board and ESG considerations are
embedded into strategic decision-making. See the corporate governance organisation chart on page 77 for
more details.
Describe management’s role
in assessing and managing
climate-related risks and
opportunities
The CEO and the Executive Board have overall accountability for PayPoint’s sustainability, environment and
carbon- emission strategy. During the year the Executive Board implemented an ESG Working Group comprising
Executive Board members and other key stakeholders, which is responsible for overseeing implementation of
PayPoint’s sustainability, environment and carbon-emission strategies working directly with management and
functions across the Group. See the corporate governance organisation chart on page 77 for more details.
Strategy
Describe the climate-related
risks and opportunities the
organisation has identified
over the short, medium, and
long term
PayPoint has undertaken a comprehensive assessment of its business activities to identify climate-related physical
and transition risks and opportunities over the short, medium, and long term. For the assessment, we considered the
short term to be 0-5 years, the medium term 5-15 years and the long term 15-30 years.
For the risks and opportunities identified we have assessed the impact on our carbon emissions and how these
impact our Net-zero target by 2040 and also the potential financial impacts see table on pages 42 to 43.
Describe the impact of
climate-related risks and
opportunities on the
organisation’s businesses,
strategy, and financial planning
Our business is a low-carbon-intensive business particularly in our own operations, but even across our entire value
chain our absolute carbon emissions and our intensity measure per employee are relatively low. Physical climate
related risk is also considered low. Therefore, our assessment of business activities did not identify significant climate
related risks, but did identify potential risks and opportunities as the UK moves towards a Net-zero target by 2050.
Accordingly, climate risk is considered an emerging risk rather than a principal risk as detailed on page 58 of the risk
management section. Climate and carbon emissions form part of our financial and strategic planning and decision-
making process. All new major initiatives are assessed from a climate and carbon emissions perspective so we fully
understand the impact on our carbon emission targets.
Describe the resilience of
the organisation’s strategy,
taking into consideration
dierent climate-related
scenarios, including a 2°C
or lower scenario
As a low-carbon-intensive business, we consider our organisation to be resilient and have assessed a climate-
related scenario of up to 2°C in the current financial year. We will be assessing further scenarios this year to evolve
this analysis further. Whilst we recognise climate creates some risks and uncertainties for our business i.e. we have
a number of clients in the energy sector who may be impacted with potential knock-on impacts for PayPoint, we
consider the risk is low as there would be sucient time to evolve our business model and activities to mitigate
the risks.
We consider our climate-related financial disclosures to be consistent with all of the TCFD Recommendations and Recommended Disclosures and
are therefore compliant with the requirements of Listing Rule 9.8.6(8).
Although this is our first year of disclosing in compliance with the listing rule, our disclosures build on previous years. In preparing them we have made
several judgements, and while we are satisfied that they are consistent with the Recommendations and Recommended Disclosures, we will continue
to evaluate our options for future TCFD disclosures.
In addition to developing and embedding our broader ESG strategy across the business, we have complied with the Task Force on Climate-related
Financial Disclosures ‘TCFD’ framework, with the exception of additional climate-related scenarios to be developed in the coming year and
the year-on-year comparatives for GHG emissions being impacted by a full year of data for businesses acquired. PayPoint supports the TCFD
recommendations and is committed to implementing them, providing stakeholders with information on our exposure to climate-related risks and
opportunities, helping them make informed decisions. The TCFD framework is as below:
For our TCFD disclosures, we are reporting in line with the FCA listing
rule for premium listed companies LR 9.8.6(8), which requires us to
report on a ‘comply or explain’ basis against the TCFD Recommended
Disclosures for the year ended 31 March 2022.
Strategic report Governance Financial statements Shareholder information 41
Risk management
Describe the organisation’s
processes for identifying and
assessing climate-related risks
PayPoint recognises the impact climate change is having globally and that it presents a risk and uncertainty to our
business. As last year, we still consider climate change as an emerging risk to our business rather an immediate
principal risk. Risk management is an integral part of our governance and we focus on key risks which could
impact achieving our strategic goals and business performance. We identify and assess climate-related risks and
opportunities as part of our financial planning processes, business cases and as part of our overall risk identification
and management framework.
Describe the organisation’s
processes for managing
climate-related risks
We have an established risk management framework in place to help us capture, document and manage risks facing
our business and the Audit Committee oversees the eectiveness of risk management throughout the organisation.
See our risk management framework on page 54. We work towards a medium to low risk profile, ensuring we have
mitigating controls to bring each risk within the risk appetite set by the Board. The Board are updated on climate risks
and set targets to reduce carbon emissions in alignment with perceived risks.
Describe how processes for
identifying, assessing, and
managing climate-related
risks are integrated into the
organisation’s overall risk
management
We are embedding into our culture the consideration of climate and environmental risks and opportunities as part of
all business decisions. Risks presented by climate change have been embedded into our risk management framework
with risks detailed on corporate risk and control registers, and material business cases including an assessment of
climate-related risks and opportunities. Annual financial plan and strategic review processes include assessments
of the impact climate transition and physical risks are expected to have on costs and revenue, and scope 1, 2 and 3
carbon emission reduction targets are set by the Board.
Metrics and targets
Disclose the metrics used
by the organisation to
assess climate-related risks
and opportunities in line
with its strategy and risk
management process
The primary metric we have used to assess climate related risks and opportunities across our value chain is tonnes
of carbon emitted. During the year we conducted a comprehensive review of carbon emissions emitted across our
value chain, in line with the GHG Protocol. We identified all relevant Scope 3 categories and established appropriate
methodologies and assumptions to calculate emissions. We use third party sustainability soware to accurately
calculate carbon emissions based on input metrics collected from across the Group. In addition to carbon emission
metrics, we also use monetary metrics in our financial and strategic planning where climate risk and opportunities
across our revenue, costs and balance sheet are attributed with a £ figure.
Disclose scope 1, scope 2
and, if appropriate, scope
3 greenhouse gas (GHG)
emissions and the related risks
Scope 1, 2 and 3 carbon emissions are detailed in the table on page 38. Following an in-depth analysis of our scope 3
emissions, we now have a much better understanding of the emissions across our value chain in alignment with GHG
Protocol scope 3 emission areas. The largest scope 3 areas are Purchased Goods & Services covering terminal and
IT purchases and Use of Sold Products covering electricity used by our terminals while at retailers and merchants.
Describe the targets used
by the organisation to
manage climate-related
risks and opportunities and
performance against targets
PayPoint set targets during the year to manage climate-related risks and opportunities which were approved by the
Board. The targets include reducing carbon emissions in our own business, scope 1 and 2, and across our value chain
with the target of being fully Net-zero by 2040. We have also set more detailed targets of how we plan to achieve
our Net zero aims and these are detailed on page 37. The ESG Working Group monitors performance against targets
throughout the year and reports performance to the Executive Board and Board.
PayPoint Plc Annual Report 202242
Responsible business continued
Risk management
We have conducted a comprehensive assessment of climate-related risks and opportunities, including any potential financial impact. The table
below lists our most material risks and opportunities.
Risk Potential impact Mitigation strategy
Governance
and regulatory
Non-compliance with
increased emissions
reporting obligations
Potential impact on business
operations, revenue, costs or assets
to comply with reporting obligations
• Annual review of legislative landscape
• Integration of legislative compliance costs into
business plans
• Implementation of reporting structures and procedures
to manage compliance risk
• Quarterly review of energy and emissions data
Technology
Substitution of existing
products and services with
lower emissions options
Costs to adopt and implement new
products and processes
• Roll out of more energy ecient terminals
Market
Changes to markets and
consumer trends
Some of PayPoint’s retailer partners
are large forecourt operators and the
transition to electric cars may impact
these retailers and PayPoint’s revenue
Approximately 17% of PayPoint’s
revenue is from energy clients and
the transition to carbon neutral
energy may impact these clients
and PayPoint’s revenue
• Ongoing review of our retailer network with new
retailers contracted outside the forecourt sector
• Ongoing review of our client portfolio with new
clients contracted outside the energy sector
Increased manufacturing
costs
Increased cost of purchasing
terminals and other physical assets
• Ongoing review of terminal and physical asset requirements
• Transition to smaller terminals and new products like
Counter Cash with reduced manufacturing
Increased energy prices Increased operating costs • We keep the amount of oce space utilised under close
review and close sections of the oce where feasible, to
reduce heating and cooling requirements
• Ongoing assessment of oce gas and electricity usage
to identify reduction opportunities
• Ongoing assessment of business travel requirements to
minimise car journeys and identify reduction opportunities
Reputation
Lost business opportunities if
unable to meet customer and
partner climate requirements
Reduction in revenue • Environmental policy continually assessed and updated
to ensure PayPoint meets customer and partner climate
requirements
Increased concern from
shareholders and other
stakeholders
Reduction in capital availability • Transparency through our annual participation in CDP and
TCFD disclosures in the Annual Report
Risks
Transition risks
Strategy
As a responsible business we consider climate-related risks and opportunities across our organisation and embed these into the strategy set by the
Board. We identify risks and opportunities over short term (0-5 years), medium term (5-15 years) and long term (15+years) horizons and incorporate
these into our strategy to ensure we operate responsibly and reinforce our commitment to building sustainable growth. Our responsible business
strategy is supported by several policies including our Environmental and Sustainability Policy.
Short term (0-5 years)
In the short term, we will continue to take a
proactive approach in minimising climate-related
risks and maximising opportunities.
These are shaping the way we manage our
business and minimise our contribution to
climate change, including:
• Increase in climate related regulations i.e. TCFD
• Switch to carbon-neutral energy contracts for
our oces
• Oce space utilisation and employee commuting
• More energy-ecient terminals
• Market changes
Medium term (5-15 years)
Over the medium term, we are focused
on identifying and further managing financial
risks associated with climate change as well
as monitoring opportunities. We continually
assess market trends and investment
opportunities to ensure our business model is
sustainable into the future.
• Regulatory Net-zero carbon requirements
• Increased terminal costs
• Carbon pricing
• Shi in customer preferences
• New markets
Long term (over 15 years)
For the long term, we consider various scenarios
across physical climate conditions, market trends
and government policy to ensure we provide a
resilient and sustainable investment choice for
the future.
• Shi in market trends and customer behaviour
• Impact warmer average temperatures will have
on our products
• Government commitment to UK Net-zero
by 2050 and potential changes to the
regulatory landscape
• The impact of the UKs Net- zero commitment
on our customers and stakeholders
Strategic report Governance Financial statements Shareholder information 43
Opportunities
The table below details the main climate-related opportunities and their potential impact on our business, along with the current status.
Opportunity Potential impact Status
Resource
eciency
Data storage Reduced electricity consumption • We plan to review the amount and type of electronic data
stored and make reductions in order to reduce data centre
energy consumption
Recycling Reduced construction costs • We engage with our electrical waste suppliers to ensure
there is a high component of reuse and recycling of our
retired terminal and IT equipment
Oce space kept
under review
Reduced oce costs • We keep the amount of oce space utilised under close
review and close sections of the oce where feasible to
reduce heating and cooling requirements
Reduced water consumption Reduced oce costs • We keep the amount of water used at our oces under
close review and have fitted timed flow taps to ensure
taps are not le running
Terminal economic life Reduced manufacture,
logistics and disposal costs
• Our terminals have a long economic life and are used
for many years, some for over ten years, which reduced
manufacturing requirements, transport and disposal costs
• We refurbish all our terminal models to ensure their
economic life is maximised
Energy source
Use of lower-emission
energy sources
Increased reputational benefits • We have already switched our electricity and gas
contracts to carbon neutral contracts for our head oce
and plan to do the same for our Haydock oce
Use of new technologies Increased reputational benefits • We encourage the use of more ecient modes of
transport through the installation of Electric Vehicle ‘EV’
charging stations at our oces and oering electric cars
as a company car option
• We will keep under close review the heating and cooling
systems used in our oces
Products
and services
Development and migration
to lower emission products
and services
Increased revenue through demand
for lower emissions products and
services
• Our new Counter Cash product enables cash withdrawals
through card payment terminals which use far less energy
than ATMs. This product also reduces the level of ATM
manufacturing required in the future
• Our latest terminals are far more energy ecient than
older terminals
• Our expanding digital proposition enables transactions
without the need for physical terminals which require
manufacturing, transporting and disposal which all impact
the environment
• Ongoing review of our client portfolio with new clients
contracted outside the energy sector
Data Storage
Reduced electricity
consumption
Reduced operating costs • We plan to review the amount and type of electronic data
stored and make reductions in order to reduce data centre
energy consumption
Physical Risks
Risk Potential Impact Mitigation Strategy
Weather
Changes in precipitation
patterns and extreme
variability in weather patterns
Increased costs from damage
to buildings
• On-going improvement of our buildings
Rising temperatures Increased cooling costs • Switch to renewable electricity contract at our main oce
• Assessing air conditioning requirements for our oces
PayPoint Plc Annual Report 202244
Female 41%
Male 59%
All employees
Female 31%
Male 69%
Executive Board
Responsible business continued
Social
We hold ourselves accountable for delivering
positive and inclusive outcomes for society
including our people, retailer and client
partners, consumers and the wider community.
Each team is responsible for developing and
implementing actions that are relevant to them
and at a Group level plans are developed in
conjunction with our employee forum. During
the year we have invested in our oces
in Welwyn Garden City to create a more
welcoming space for people that reflects our
updated purpose and values. We continued to
support people from a wellbeing perspective
and created our return-to-oce approach
with feedback from the forum. Once Covid-19
restrictions were lied we held events for our
people to enable them to connect informally
face to face with old colleagues and make
new connections and will be holding regular
face to face events over the coming year. We
continue to hold monthly all employee briefings
for our people to update on business priorities
and performance as well as recognise and
celebrate the success of employees who have
demonstrated our values.
Our employee forum held three formal meetings
during the year to discuss topics including the
employee survey, return-to-oce and ESG.
The forum consists of 17 representatives
from around the business, including five
representatives from Handepay and Merchant
Rentals. The forum is chaired by our HR Director,
and Gill Barr, who represents the Board, attends
the meetings. The purpose of the employee
forum is to give feedback to the Board and
Executive Board about how it feels to work in
the business, what is working well and ideas for
change, to ensure that the employee voice is
considered in decision making. The forum also
meets informally and provides feedback on and
suggestions for employee-related activities
and events.
Our engagement work has been recognised
by LinkedIn who named us as the winner of the
Employee Engagement Champion category for
employers with fewer than 1,000 employees
at the LinkedIn Talent Awards 2021. The award
recognises companies who create a culture of
continuous feedback and growth to improve
employee engagement and wellbeing.
Our people
We aim to create a dynamic environment for
our people where we deliver for our customers
by collaborating and being good colleagues
to each other, creating a positive and inclusive
environment where everyone can learn, grow
and shine. The make-up of our population has
remained relatively unchanged year-on-year
and we employed 670 people on 31 March
2022. Employee turnover increased during the
year, in line with general market conditions,
with people leaving to pursue dierent
careers and opportunities as the Covid-19
pandemic receded. Our recruitment teams
have worked tirelessly to attract new talent
to the Group and over the course of the year
we have welcomed over 150 new employees.
We also welcomed 17 people who transferred
to PayPoint during the year following the
acquisition of RSM 2000.
During the year we continued to support our
people to work from home during the Covid-19
pandemic and transitioned to new hybrid
working patterns in September 2021. We
believe that everyone needs to spend some
time in the oce to build relationships and
collaborate with colleagues. The majority of
our people now work two to three days in the
oce, with some of our people, predominantly
from our IT teams, working mainly from home.
Engagement
The last 12 months has been a period of
significant transition for our people as we
have integrated the Handepay, Merchant
Rentals, i-movo and RSM 2000 businesses and
transitioned to new ways of working, all during
the latter stages of the Covid-19 pandemic.
The engagement of our people during this
time has been a priority and we conducted
two employee surveys during the period with a
particular focus on ways of working, including
collaboration, connection and work life balance.
Our key measure for these surveys was
collaboration, and during the period our score
increased to 70, which is ahead of the external
benchmark for the survey that we participate
in (Glint), and significantly higher than when we
first ran the survey in 2019, reflecting the work
that we have done to support our people to
work eectively throughout the pandemic and
during the transition to new working patterns.
We continue to achieve a strong response rate
to our surveys with 78% of the population
participating in our last survey which took
place in November 2021.
People and culture
Gender balance as at 31 March 2022
Female 29%
Male 71%
Board
Strategic report Governance Financial statements Shareholder information 45
We continue to see a high level of participation
in our share incentive plan with a 37%
participation rate across the Group. We also
continued to operate a discretionary all-
employee bonus scheme in order to engage
all of our people in delivering our objectives
for the year. We were delighted to pay the
maximum bonus of £500 to our people for
the year ended March 2022, recognising their
support and commitment to the delivery of
our performance during the period.
Promoting mental health and wellbeing
We continue to support the wellbeing of our
people with a particular focus on wellbeing
support during the Covid-19 pandemic and the
transition to new working patterns during the
year. Our wellbeing strategy provides support
for physical health, mental health, financial
health and work-life balance and we update
people regularly with useful resources and
awareness events. This included the setting
up of a menopause support group, following
an event that we ran during Menopause
Awareness month in October 2021 to raise
awareness and start an open dialogue with
our people regarding the menopause. Where
possible we are linking wellbeing with charity
initiatives including Move For Mind in January
2022, where we encouraged all of our
employees to get outside and be active to
raise money for Charity. Our people covered a
distance of 2,000 miles resulting in a donation
of £2,000 to Mind. During the year we also
invested in refresher training for our mental
health first-aiders who provide confidential
advice, support and guidance to our people.
Developing our people
We continue to be committed to supporting
the development of our people through a
combination of online courses, apprenticeships,
further education and in-house and external
courses based on business and individual
need. We currently have ten apprentices
studying programmes including Team Leading,
Data Science, CIMA and a Senior People
Professional degree. During the period, five of
our people completed programmes including
MBAs, AAT and Project Management. Focus
for the coming year will be on developing our
management capability and raising awareness
about diversity and inclusion.
We run a Board mentoring programme to
support the career development of our senior
management population. During the year 20%
of PayPoint vacancies were filled internally and
we continue to focus on ensuring that we have
good development plans in place for our people
to create a strong pipeline of internal talent.
We communicated our ‘Welcoming Everyone’
approach in January 2022 and since then we
have launched an LGBTQ+ forum to provide a
safe space for people to share experiences and
suggest and discuss ideas to enhance inclusivity
at the PayPoint Group for those in the LGBTQ+
community. We celebrated both International
Men’s Day and International Women’s Day
with virtual events attended by employees
from across the Group. We will also be rolling
out training to all of our people to support the
development of a truly inclusive culture within
the business.
The overall gender balance across all employees
within the business on 31 March 2022 was 41%
female and 59% male. We recently published
our fih gender pay gap report, which can be
found on our website². Over the last few years
we have implemented a number of initiatives to
address our gender balance. However, a pay gap
continues to exist in the organisation driven by
the fact that we have more men than women
in higher paid roles such as roles in IT, sales and
senior management positions. We are working
with our sales teams to take actions to attract
more females into our sales positions and will
continue to look at what further actions we can
take to ensure we attract more female candidates
for all of our roles, as well as supporting
development plans for identified talent.
PayPoint is committed to treating applicants
with disabilities equally and supporting people
who become disabled during their career with
the Company. This includes making reasonable
adjustments both to the recruitment process
for applicants and to the working environment,
including oering appropriate training, in order
that disabled employees can achieve their
full potential.
Principles
Our success is built on a reputation for high
standards in all areas of business which we
achieve by working in accordance with our
ethical principles. These principles apply
throughout the PayPoint Group and are used
to define the standards and working practices
that we adopt.
They guide our day to-day actions and give our
people clarity on acceptable behaviour. Our
statements on ethical principles and modern
slavery can be found on our website
3
. Our 2022
modern slavery statement will be available on
our website in September 2022.
We operate an anti-bribery and corruption
policy which was put in place in response to
the UK Bribery Act 2010. Further information
regarding this can be found on page 84 in the
Audit Committee report.
Supporting human rights
PayPoint supports fundamental human
rights, such as the right to privacy, safety
and to be treated fairly, with dignity and
respect. Our employment standard sets
out our commitment to good employment
practices and the principles to govern the
practices adopted in each of our businesses.
All employees have a right to safe working
conditions, consideration of their welfare, fair
terms of employment, reward and treatment,
clarity and openness about what is expected.
We have a zero-tolerance approach to
modern slavery and we are committed to
acting ethically and with integrity in all of our
business dealings and relationships. PayPoint’s
statement on modern slavery can be found on
our website¹.
Diversity and inclusion
At PayPoint we are committed to building a
diverse and inclusive business where all of
our people are treated fairly and with respect,
and where the contributions of everyone are
recognised and valued. This commitment is
captured in our vision to create a dynamic
place to work, with a positive and inclusive
environment where everyone can learn, grow
and shine. Everyone who works at the PayPoint
Group should feel respected and able to
give their best, and we embrace people with
dierent backgrounds and identities, valuing
their contribution to achieving our strategic
priorities. At the PayPoint Group, we call this
‘Welcoming Everyone’.
We aim to achieve our vision by taking
three clear actions:
1
Ensuring that all of our people understand
what we mean by diversity, equity and
inclusion, are supported with training to
develop inclusive behaviours and feel
confident to challenge any behaviours
that they see in the workplace that are
not in alignment with this.
2
Supporting the creation and development
of forums for people from under-
represented communities, enabling them
to discuss shared challenges, help educate
and raise awareness in the business of
issues relevant to the community and
implement appropriate actions to increase
equity, inclusion and allyship around
the business.
3
Building inclusion into our every day by
ensuring that we listen to diverse voices
and consider diversity, equity and inclusion
with regards to our policies and practises,
both internally and externally, including the
employee lifecycle, product and service
design and marketing.
1. https://www.paypoint.com/modern-slavery-act.
2. https://corporate.paypoint.com/downloads/csr/gender_pay_report_2020.pdf.
3. https://corporate.paypoint.com/downloads/investorcentre/ethical-principles-2020.pdf.
PayPoint Plc Annual Report 202246
Social
A strong and supportive
proposition for retailer
partners and SMEs
We provide a
broad range of
innovative services
and technology,
connecting millions
of consumers with
over 60,000 retailer
partner and SME
locations across
multiple sectors.
We provide a leading and dierentiated set
of services, through highly reliable technology
that enables our retailer partners to run
their businesses more eciently as well
as generating consumer footfall from their
surrounding communities. The breadth of
products and services oered by PayPoint is
greater than any other provider.
Our retailer partner proposition has been
enhanced further during the year to help
respond to consumer trends and drive revenue
opportunities in a challenging cost environment:
our new Counter Cash solution is now live in
2,624 sites, providing vital access to cash in
communities across the UK; the home delivery
partnership with Snappy Shopper continues
to grow with 269 sites live and positive sales
growth; and we’ve continued to improve our
engagement with our retailer partners and
key trade associations to work in partnership
to make the most of the new opportunities.
Additional new services added during the year
include our retailer rewards app partnership with
McCurrach, a leading field marketing agency, with
PayPoint’s retailer partners now able to access
exclusive rewards as part of their package on the
MyStore+ app; Love2Shop e-gi cards launched
in June 2021 oering richer retailer commission;
PayPoint Business Finance launched in July 2021;
FMCG marketing and data has been introduced
as a proposition with strong early interest from
brands and retail groups and several campaigns
delivered for FMCG brands, and the provision of
vital Covid-19 test kits throughout our multiple
retailer network.
This has been backed up by our extensive
eorts to strengthen our retailer partner
relationships and to drive adoption of
these new opportunities to earn, including
regular ‘cash and carry’ days, more direct
communications, and our reinvigorated
relationships with the key trade associations,
including the Association of Convenience
Stores ‘ACS’ the Scottish Grocers’ Federation,
‘SGF’ and the National Federation of Retail
Newsagents ‘NFRN’. The feedback and support
received from these organisations has been
critical to our continued commitment to
support our retailer partners in delivering vital
community service across the UK and our ability
to respond to changing consumer needs in the
UK convenience sector. We continue to oer
free ACS membership to PayPoint One retailer
partners, providing access to industry events,
advice and best practice.
Our card payment services have been
enhanced with the launch of one-month rolling
contracts rolled out for Handepay customers
switching from other providers from October
2021, faster settlement solutions enabled for
all existing and new EVO-acquired customers
and successful pilot and roll-out completed of
the new Castles range of terminals.
Enabling clients to provide vital services
in the community
We partner with over 270 clients in the UK,
providing omnichannel payment solutions that
enable them to seamlessly and eectively
serve their customers however they wish to
pay. Our contracts with clients contain clear
obligations with respect to the services being
provided, underpinned by measurable service
levels which are set to ensure a high standard
of delivery across key elements, including
system and service availability, file delivery
and funds settlement.
We enable the delivery of best-in-class
customer journeys for e-commerce brands
over the first and last mile in c.10,000 locations
through our Collect+ brand, helping consumers
pick up and drop o online shopping or send
parcels across the UK.
During the reporting period, 28 new client
services went live, with 19 coming from non-
energy sectors and 18 taking digital payments
solutions, supported by the development of
additional capabilities, including Open Banking
and a new Direct Debit platform. In August 2021,
we launched the Payment Exception Service via
i-movo for the Department of Work and Pensions,
digitising benefit payments and replacing the Post
Oce Card Account which is closing.
We have continued our diversification to
digital payments, helping organisations
seamlessly and eectively serve their
customers. Our market-leading omnichannel
solution – MultiPay – is an integrated solution
oering a full suite of digital payments. It
enables transactions online and through
smartphone apps and text messages, as well
as event payments, over the counter, over the
phone and via interactive voice response ‘IVR’
systems. It also supports a full range of Direct
Debit options, including scheduling collections,
as well as new product developments such
as PayByLink, recurring payments and Event
Streamer. MultiPay customers benefit from
Responsible business continued
Strategic report Governance Financial statements Shareholder information 47
real-time visibility of all payments received,
through one easy-to-use portal that is fully PCI
compliant, and allows visibility of all payment
channels – including cash. The platform is
used by a growing number of organisations
across the UK, including many housing
associations, local government authorities and
utility providers. Our Cash Out service also
enables the rapid dispersal of funds through
secure digital channels and is actively used
by local authorities and charities to distribute
emergency funds.
Furthermore, we enhanced our e-commerce
oering further with an expansion of our
partnership with Randox, providing vital
Covid-19 test kits through our Collect+
network, as well as launching new services
for our existing carrier partners and providing
industry leadership for driving further
innovation and prominence for the out-of-
home delivery market.
We continue to have a dedicated Client
Management team, enhancing our engagement
with clients to ensure we are able to align our
strategy and roadmaps to the needs of the
clients we partner with.
Enabling consumers, including some of
the most vulnerable in society, to access
the services they need
Open early until late seven days a week, we
serve millions of consumers every day, helping
them to make and receive payments and
access parcel services conveniently through
our retailer partner network and omnichannel
payments solutions.
Our UK retail network of more than 28,000
stores is bigger than all banks, supermarkets
and post oces together, putting us at the
heart of communities nationwide. Our cash
bill payment solutions enable less privileged
people to access services that may otherwise
be unavailable to them and our CashOut
service enables the rapid dispersal of funds
through secure digital channels and is actively
used by local authorities and charities to
distribute emergency funds. The recent launch
of the Payment Exception Service, run for
the Department for Work and Pensions via
our i-movo business, has further underlined
the continuing importance of delivering
cash payments to those without access to a
standard bank account and replaces the Post
Oce Card Account, which is coming
to an end. The PayPoint Counter Cash service,
oering cashback without purchase and
balance enquiries over the counter,
is now live in over 2,624 stores, with over
£5 million withdrawn since launch. The launch in
November 2021 was widely covered in national
and regional media, supported by key members
of the Cash Action Group, LINK and John Glen
MP, Economic Secretary to the Treasury, and
supports the FCA and PSR’s Access to Cash
initiative to maintain services for the many
people who continue to rely on cash as a vital
way of making payments.
Our retailer partner proposition has been
enhanced further during the year in response
to consumer trends, and in addition to our new
Counter Cash solution, consumers are also
able to benefit from new services including
the home delivery partnership with Snappy
Shopper and Love2Shop e-gi cards.
Our MultiPay platform is designed to provide
a simpler and more convenient way for
consumers to pay essential bills such as gas,
electricity and rent. We are uniquely placed to
be able to provide consumers with complete
flexibility to choose to pay using whichever
method is most convenient for them.
Over 85% of our ATM network is ‘speech
enabled’, enabling people with visual
impairments to withdraw cash independently.
Supporting the communities where we live
and work
We support the communities where our people
live and work by providing them with financial
support to serve their causes. PayPoint has
a charity committee made up of volunteers
which leads and provides support to
fundraising activities carried out by our people
for charities which are important to them.
Fundraising activity continued to be impacted
by the Covid-19 pandemic with reduced
opportunity for face-to-face events. However,
the Committee organised a number of
company-wide events including Move for Mind,
making and selling roses to raise money for the
British Heart Foundation, Christmas Jumper
appeal for Save the Children, and a number of
events to raise money for Children in Need.
The Committee also continued to support
our people with their own fundraising eorts.
In total over £13,000
was donated to local
and national charities of which
£10,000 was funded by the Company.
Additionally, our people in Welwyn Garden
City supported our Christmas foodbank
campaign, donating over £700 to provide food
to local foodbanks in Stevenage and Welwyn
Garden City.
We continue to oer our network to collect
for the BBC’s Children in Need telethon free
of charge.
Championing the employability of
young people
Externally we continue to support young
people in our community with a commitment to
the local schools community and the continued
development of young talent. PayPoint
started to work as an enterprise advisor to a
local secondary school in 2016, supporting
students with the transition from school to the
workplace. Our support has since expanded to
other schools in the community and in the last
year we provided support with a number of
virtual careers fairs and interview skills events.
Following the liing of Covid-19 restrictions
we held an event onsite for year 11 students,
introducing them to PayPoint and some of
our people to talk about career options and
development. PayPoint has also signed The
Tech She Can Charter which is a PwC initiative
designed to encourage more girls to study IT
and view it as a career choice.
PayPoint Plc Annual Report 202248
Social
Purpose, vision
and values
In delivering our
purpose we hold
ourselves accountable
for delivering positive
outcomes for all our
stakeholders through
the implementation
of a meaningful
ESG strategy and
measures. Further
information can
be found in the
Responsible Business
section on page 36.
We actively engage with our people to bring
our values to life in the work that we do. Our
values are incorporated into our recruitment
and induction processes, and demonstration
of the values forms a key element of our
performance reviews. People who role model
our values are recognised via our values
award programme.
Value award winner: Chris Lambell
Chris Lambell, Retail Standards Manager,
received multiple nominations from colleagues
around the business for the support that he
gave to the launch of Counter Cash to our
retailer partners. Within just a few days Chris
designed and delivered training to a team of
new starters and subsequently led the team
to deliver excellent training to our retailer
partners. The team received 45 5* Trustpilot
reviews in their first week which is a testament
to Chris’s training and leadership. Chris has
an amazing ‘can do’ approach as well as being
‘results focused’ in everything that he does.
Value award winner: Kelly Coleman
Kelly Coleman, Customer Support Team
Leader, received a values award for her
‘can do’ approach. Kelly is highly praised by
her colleagues as someone who is always
looking for solutions for both employees and
customers. She stepped up into a Team Leader
role in November 2021, and with the absence
of a Senior Manager has led the customer
support and amendments team throughout
that period of time. She has embraced the
Delivering Brilliant Results programme and has
led from the front in motivating and engaging
her team.
Responsible business continued
PayPoint stepped in to
deliver an instant solution
when we urgently needed
80% redemption rate, but
this grew to an average
of 91% following further
communication from the
council. To this day,
PayPoint’s Cash Out
remains a vital service
for our residents.
Stephen Pendrich
Benefits and Revenue Advisor
for South Lanarkshire Council
Strategic report Governance Financial statements Shareholder information 49
Case Study – Cash Out technology and payment infrastructure
Delivering vital
financial support
at the heart of
UK communities
PayPoint’s Cash Out technology and payment
infrastructure oers a solution enabling local
authorities to disburse cash via digital or
physical vouchers to their customers, helping
deliver urgent and much needed support to
individuals across the extensive retail network
of over 28,000 stores, more than all banks,
supermarkets and post oces put together.
Over the past 12 months, PayPoint has aided
local government in its support of vulnerable
people by dispensing more than 1.9 million
vouchers, worth over £97million. Issued under
a range of government campaigns, including
the Free School Meals and Winter Hardship
schemes, the vouchers were distributed
by local authorities across the UK and
redeemed by consumers using PayPoint’s
Cash Out solution.
Over 99% of urban households are within
one mile of a PayPoint location, which
includes Sainsburys, Asda, the Co-op, Spar,
and One-Stop, and 98.2% of rural households
are within five miles.
Those eligible for this support also benefitted
from the convenience provided by PayPoint’s
retailer network and Cash Out’s capabilities.
Crucially, they found that PayPoint partnered
stores are open longer than other redemption
locations, both weekdays and weekends. In
total, 36% of all vouchers redeemed in the last
twelve months through Cash Out were outside
typical working hours, demonstrating the
success of the service in providing convenient
and immediate financial support.
The highest redemption rates were on the
weekend, where 60% of transactions took
place outside typical working hours on
Saturday and 100% on Sunday. From Monday
to Friday, the rates of redemption outside
of normal hours sat between 28% and 30%.
PayPoint Plc Annual Report 202250
Responsible business continued
Governance
The Executive Board,
as PayPoint’s team
with responsibility
for the day-to-
day operational
management of the
Group, is accountable
for the ESG strategy
to help drive
change and a more
sustainable future
for PayPoint.
As part of our ESG journey over the past year,
we also participated in the CDP survey for
the second time, developed and launched an
Environmental policy, and implemented an
ESG questionnaire as part of our procurement
process to assess environmental, social and
governance risks within our supply chain.
Compliance with current mandatory disclosures
for our greenhouse gas emissions are detailed
on page 43.
PayPoint Plc, and certain of its subsidiaries,
are signatories to the Prompt Payment Code,
a voluntary code of practice for payment
practices whereby signatories undertake to
pay 95% of their supplier invoices within 60
days. Our payment practices are reported on
a six-monthly basis and details can be found
at www.gov.uk/check-when-businesses-
pay-invoices.
Finally, the following table sets out our Group
Non-Financial Information statement, prepared
in order to comply with sections 414C
and 414CB of the Companies Act 2006. A
description of our business model and strategy,
as well as the non-financial KPIs relevant to
our business, can be found on pages 16 to 35.
The framework through which PayPoint
provides transparency on how it operates
its business, which is in line with current
regulations, is set out in the Corporate
Governance Report on pages 76 to 81 and
in the Risk Management Report, on pages
54 to 58. In addition, our anti-bribery and
corruption policy is set out in the Audit
Committee Report on page 84.
PayPoint recognises that driving better
corporate behaviours provides improved
returns over the longer-term and ESG is
therefore a key focus of our Board. We have
agreed ESG commitments and metrics which
can be found on page 37.
Over the last year we have developed our
approach to climate-related risks in terms of
governance, strategy and risk management and
prepared disclosure in accordance with TCFD,
which can be found on pages 40 to 43.
Reporting requirement Where to find further information Page Relevant policies if applicable
Environmental
matters
Responsible business 38 to 43 Environmental
Employees Responsible business
Principal risks
Audit Committee Report
44 to 45
57
89
Diversity
Recruitment and Selection
Health and Safety
Whistleblowing
Code of Ethics
Society and
communities
Responsible Business 47 Charitable donations
Respect for
human rights
Responsible business and
https://www.paypoint.com/
modern-slavery-act
45
–
Modern Slavery Statement
Human Rights
Anti-bribery
and corruption
Audit Committee Report 89 Anti-bribery and Corruption
Strategic report Governance Financial statements Shareholder information 51
Section 172(1)
Statement
Board decision-making
Section 172 of the Companies Act 2006
requires a director of a company to act in
the way he or she considers, in good faith,
would most likely promote the success of the
company for the benefit of its members as
a whole. In doing this, section 172 requires
directors to have regard to, amongst other
matters, the:
• likely consequences of any decisions
in the long-term
• interests of the company’s employees
• need to foster the company’s business
relationships with suppliers, customers
and others
• impact of the company’s operations on
the community and environment
• desirability of the company maintaining
a reputation for high standards of
business conduct
• need to act fairly as between members
of the company
In discharging our section 172 duties, we have
regard to the factors set out above. In addition,
we also have regard to other factors which we
consider relevant to the decisions being made.
Those factors, for example, include the interest
and views of our clients; our retailer partners;
regulatory bodies; and our relationship with
our lenders.
During the year under review the Executive
Board, through the ESG Working Group,
sought feedback and input from a wide
range of stakeholders into the development
of the Group’s ESG strategy. This included
engagement with investors, clients and
employees to ensure that the strategy
balances the needs of all stakeholders. As an
example, the ESG working group engaged
with the employee forum and a number of
suggestions made by the forum, including
the introduction of an electric vehicle leasing
scheme and the installation of electric
charging points at our oce locations, have
been incorporated into our commitments.
Feedback from stakeholders was included
in a paper that was presented to the Board
for consideration as part of the decision-
making process to agree the Group’s ESG
commitments and targets. Further information
about how the Company engages with all of its
stakeholders can be found on pages 52 and 53
of this report.
The Strategic Report was approved by the
Board of Directors and signed on its behalf by:
By considering the Company’s purpose,
vision and values together with its strategic
priorities and having a process in place for
decision making, we aim to make sure that our
decisions are consistent and appropriate in all
circumstances.
We delegate authority for day-to-day
management of the Company to the Executive
Board and then engage management in setting,
approving and overseeing execution of the
business strategy and related policies. Board
meetings are held periodically at which the
Directors consider the Company’s activities
and make decisions. For example, each year
we make an assessment of the strength of the
Company’s balance sheet and future prospects
relative to market uncertainties and make
decisions about the payment of dividends.
For the year ended 31 March 2022, we are
recommending a final dividend of 18 pence
per share.
How we consider our stakeholders
Engaging regularly with our stakeholders
is fundamental to the way we do business,
enabling us to consider their needs, concerns
and the potential impact on stakeholders when
making decisions in the Boardroom.
Nick Wiles
Chief Executive
17 June 2022
PayPoint Plc Annual Report 202252
Responsible business continued
Engaging with our
stakeholders
Our stakeholders How we engage Key topics discussed How the Board engages/
is kept informed
Key outcomes in 2022
People
We have a talented, diverse and committed workforce with experience
from a wide range of industries.
Our employee forum is a communication platform attended by
employee representatives elected by their colleagues. In addition,
we hold regular sta briefings and functions hold their own team
meetings and engagement forums (see page 44 for more information
on how we engage with our people).
The employee forum discusses the issues
raised by the engagement survey and any
business-related issues.
The impacts of the pandemic continued to
be discussed throughout the year. Other
key topics included the results of employee
surveys, return to oce following the
Covid-19 pandemic and ESG.
Gill Barr, the Board representative of the
Employee Forum, facilitates the flow of
communication between the forum and
the Board.
The HR Director updates the Board on results
of engagement surveys and people matters
generally in a formal presentation to the Board
each January and as required throughout
the year.
The employee forum has helped shape survey
actions and ensured that our return-to-oce
plans have taken into account feedback
from around the business. The forum also
contributed suggestions that have been
incorporated into our ESG strategy including
the electric vehicle leasing scheme.
Shareholders
We aim to deliver a sustainable and rewarding business model.
Through our investor relations programme, our Annual Report and
Accounts and our annual general meeting, we ensure shareholder
views are brought into our Boardroom and considered in our
decision-making.
Financial performance, strategy and
business model, dividend policy and ESG.
The Chief Executive updates the Board on any
shareholder feedback received and on investor
sentiment following each roadshow. The
approach to ongoing shareholder engagement
is agreed by the Board. All members of the
Board are available for questions by the
shareholders at the annual general meeting and
Giles Kerr has held several investor meetings.
We have taken important steps to strengthen our
operating model and organisational structure and
to identify and support growth opportunities in our
core UK business.
A final dividend of 18 pence per share has been
declared for approval by shareholders.
Convenience retailer partners
Our retailer partners oer their consumers one or more PayPoint
services. Ranging from independent retailer partners with one
store to large multiple retailer partners.
An account management team develops our relationships with
multiple retailer partners, whilst our Retail Services Hub and Retail
Relationship Management team supports independent retailer
partners. Independent retailers are also represented by a retailer
partner forum, which has regular meetings across the year. In addition
we actively engage with trade bodies including the Association of
Convenience Stores ‘ACS’, Scottish Grocers Federation ‘SGF’ and
National Federation of Retail Newsagents ‘NFRN’.
Performance reviews, market trends and
insights, sharing best practice, new clients
and product development.
The Executive Board keeps the Board
informed of our relationships with
convenience retailer partners throughout
the year.
Significant improvements have been made to
the retailer proposition over the year with the
introduction of new services including Counter
Cash, Snappy Shopper and digital vouchers.
Reinvigorated relationships with key trade
associations, working together to engage our
retailer partner community.
SMEs
We provide card payments services for over 30,000 SMEs across
various sectors.
Our field team is always available to support and engage with
business owners across all the sectors we serve. We use a range of
channels and methods to communicate with and seek feedback from
new and existing customers including social media, customer referrals
and case studies.
Performance, support, pricing and service
enhancements.
Updates on enhancements to current and
future services for SMEs are provided to
the Board by the Executive Board.
Maintaining an excellent Trustpilot score.
Introduction of one-month rolling contracts
in response to customer feedback.
Consumers
We serve millions of consumers every day, helping them to make
payments and collect parcels conveniently through our retailer
partner network and omnichannel payments solutions.
Our communication platforms provide the environment for us to
engage with consumers. Through our Retail Services Hub we inform,
update and quickly resolve issues with consumers at first-point-of-
contact where possible. Feedback, queries and data gathered from
surveys are all collated to improve the consumer experience.
Services and partnerships, performance,
network expansions, product portfolio,
systems and support on customer
complaints.
The Executive Board provides updates to
the Board on the levels of transactions,
performance and overall services provided
to our consumers.
Our retailer proposition has been enhanced to
respond to consumer trends, including home
delivery, Counter Cash, digital vouchers and
CashOut services.
Clients
Our client base operates across a broad and diverse range of sectors
including commercial, not-for-profit and the public sector. They are
critical to our business. Understanding their needs and requirements
is essential to retention and development.
Dedicated Account Managers have client review meetings throughout
the year to discuss performance and future innovations. We also have
daily operational contact where required to resolve business as usual
queries. For the larger strategic accounts, we will hold a mixture of
operational, tactical, and strategic meetings throughout the year.
Service and performance versus key
performance indicators, business
challenges where we may be able to
provide support, short and long-term
strategic goals to drive alignment, and
PayPoint service evolution to enhance
our clients’ own service performance to
their end users.
The Executive Board provides updates to the
Board when required.
Several MultiPay product portfolio
enhancements launched in year.
Delivery of new client services, including the
Payment Exception Service for the DWP.
Continued diversification to digital and new
clients secured, including the first major digital
contract now live with Optivo.
Local communities
Our network places us at the heart of local communities.
We support fundraising events by providing financial support to
causes that are important to employees. We act as an enterprise
advisor to a local secondary school, supporting the transition
between school and the workplace.
Our Charity Committee agrees
which charities we should support.
The HR Director updates the Board via
a formal presentation each January.
Page 47 details our charitable work and support
provided for young people in the community.
Strategic report Governance Financial statements Shareholder information 53
By understanding our stakeholders we can consider their needs,
concerns and the potential impact on stakeholders when making
decisions in the Boardroom.
Our stakeholders How we engage Key topics discussed How the Board engages/
is kept informed
Key outcomes in 2022
People
We have a talented, diverse and committed workforce with experience
from a wide range of industries.
Our employee forum is a communication platform attended by
employee representatives elected by their colleagues. In addition,
we hold regular sta briefings and functions hold their own team
meetings and engagement forums (see page 44 for more information
on how we engage with our people).
The employee forum discusses the issues
raised by the engagement survey and any
business-related issues.
The impacts of the pandemic continued to
be discussed throughout the year. Other
key topics included the results of employee
surveys, return to oce following the
Covid-19 pandemic and ESG.
Gill Barr, the Board representative of the
Employee Forum, facilitates the flow of
communication between the forum and
the Board.
The HR Director updates the Board on results
of engagement surveys and people matters
generally in a formal presentation to the Board
each January and as required throughout
the year.
The employee forum has helped shape survey
actions and ensured that our return-to-oce
plans have taken into account feedback
from around the business. The forum also
contributed suggestions that have been
incorporated into our ESG strategy including
the electric vehicle leasing scheme.
Shareholders
We aim to deliver a sustainable and rewarding business model.
Through our investor relations programme, our Annual Report and
Accounts and our annual general meeting, we ensure shareholder
views are brought into our Boardroom and considered in our
decision-making.
Financial performance, strategy and
business model, dividend policy and ESG.
The Chief Executive updates the Board on any
shareholder feedback received and on investor
sentiment following each roadshow. The
approach to ongoing shareholder engagement
is agreed by the Board. All members of the
Board are available for questions by the
shareholders at the annual general meeting and
Giles Kerr has held several investor meetings.
We have taken important steps to strengthen our
operating model and organisational structure and
to identify and support growth opportunities in our
core UK business.
A final dividend of 18 pence per share has been
declared for approval by shareholders.
Convenience retailer partners
Our retailer partners oer their consumers one or more PayPoint
services. Ranging from independent retailer partners with one
store to large multiple retailer partners.
An account management team develops our relationships with
multiple retailer partners, whilst our Retail Services Hub and Retail
Relationship Management team supports independent retailer
partners. Independent retailers are also represented by a retailer
partner forum, which has regular meetings across the year. In addition
we actively engage with trade bodies including the Association of
Convenience Stores ‘ACS’, Scottish Grocers Federation ‘SGF’ and
National Federation of Retail Newsagents ‘NFRN’.
Performance reviews, market trends and
insights, sharing best practice, new clients
and product development.
The Executive Board keeps the Board
informed of our relationships with
convenience retailer partners throughout
the year.
Significant improvements have been made to
the retailer proposition over the year with the
introduction of new services including Counter
Cash, Snappy Shopper and digital vouchers.
Reinvigorated relationships with key trade
associations, working together to engage our
retailer partner community.
SMEs
We provide card payments services for over 30,000 SMEs across
various sectors.
Our field team is always available to support and engage with
business owners across all the sectors we serve. We use a range of
channels and methods to communicate with and seek feedback from
new and existing customers including social media, customer referrals
and case studies.
Performance, support, pricing and service
enhancements.
Updates on enhancements to current and
future services for SMEs are provided to
the Board by the Executive Board.
Maintaining an excellent Trustpilot score.
Introduction of one-month rolling contracts
in response to customer feedback.
Consumers
We serve millions of consumers every day, helping them to make
payments and collect parcels conveniently through our retailer
partner network and omnichannel payments solutions.
Our communication platforms provide the environment for us to
engage with consumers. Through our Retail Services Hub we inform,
update and quickly resolve issues with consumers at first-point-of-
contact where possible. Feedback, queries and data gathered from
surveys are all collated to improve the consumer experience.
Services and partnerships, performance,
network expansions, product portfolio,
systems and support on customer
complaints.
The Executive Board provides updates to
the Board on the levels of transactions,
performance and overall services provided
to our consumers.
Our retailer proposition has been enhanced to
respond to consumer trends, including home
delivery, Counter Cash, digital vouchers and
CashOut services.
Clients
Our client base operates across a broad and diverse range of sectors
including commercial, not-for-profit and the public sector. They are
critical to our business. Understanding their needs and requirements
is essential to retention and development.
Dedicated Account Managers have client review meetings throughout
the year to discuss performance and future innovations. We also have
daily operational contact where required to resolve business as usual
queries. For the larger strategic accounts, we will hold a mixture of
operational, tactical, and strategic meetings throughout the year.
Service and performance versus key
performance indicators, business
challenges where we may be able to
provide support, short and long-term
strategic goals to drive alignment, and
PayPoint service evolution to enhance
our clients’ own service performance to
their end users.
The Executive Board provides updates to the
Board when required.
Several MultiPay product portfolio
enhancements launched in year.
Delivery of new client services, including the
Payment Exception Service for the DWP.
Continued diversification to digital and new
clients secured, including the first major digital
contract now live with Optivo.
Local communities
Our network places us at the heart of local communities.
We support fundraising events by providing financial support to
causes that are important to employees. We act as an enterprise
advisor to a local secondary school, supporting the transition
between school and the workplace.
Our Charity Committee agrees
which charities we should support.
The HR Director updates the Board via
a formal presentation each January.
Page 47 details our charitable work and support
provided for young people in the community.
PayPoint Plc Annual Report 202254
Risk management
Robust approach
to managing risk
Risk appetite
PayPoint’s risk appetite is set by the Board and
aligns the level of risk considered acceptable
in achieving strategic objectives, increasing
financial returns and adhering with statutory
requirements. The Board and the Executive
Board have key roles in ensuring the internal
control framework maintains risk within the
appetite set. Internal controls are embedded
across the Group’s core processes including
policies and procedures, delegated authorities,
PayPoint values and training.
Risk identification and management
The risk management process assesses
strategic, financial, IT, regulatory and
operational risk across all areas of the business.
PayPoint’s risk framework includes a bottom-
up risk assessment managed through risk
and control registers, and a top-down risk
assessment and horizon scanning process
to identify emerging risks. Functional and
entity risk and control registers are maintained
and form an important component of our
governance framework. Risks and controls
are determined by senior management and
Executive Board members and discussed with
the Head of Risk and Internal Audit. Risk and
control registers contain risk descriptions,
assessment of materiality, probability,
mitigating controls, residual risk and risk
owners. At least annually, risks identified
through the top down and bottom up risk
assessment process are agreed with Executive
Board members to determine principal and
emerging risks. The Audit Committee receives
and reviews information on the risk framework
and principal and emerging risks and advises
the Board on risks.
Strategy
Strategic and operational benefits of
proactively managing risk are achieved when
Enterprise Risk Management is aligned with
the strategic and operational goals of the
organisation, and our process and governance
structure achieve this. Risks are assessed
through PayPoint’s risk management and
internal control framework which are designed
to identify and manage risk. Processes apply
throughout the Group and are designed
to mitigate rather than eliminate risk, and
provide assurance to stakeholders regarding
PayPoint’s ability to deliver its objectives and
manage risks. The Board is responsible for
overseeing risk management and approves
levels of acceptable risk. The Board is also
responsible for maintaining an appropriate
internal control environment to manage risk
eectively. The Audit Committee supports
the Board in reviewing the eectiveness of
risk management and internal controls and
performs an annual assessment. The results
of this years assessment are detailed on
page 85 Audit Committee section.
Risk
Framework
Risk
Oversight
Risk
Assessment
Risk
Identification
& Mitigation
Risk
Monitoring
& Control
Risk
Appetite
The Board
Oversees risk management, sets
the risk appetite and maintains a
control environment to
eectively manage risk
Executive Board
Monitors key risks
facing the business and
agrees internal controls
Management
Responsible for identifying
and managing risks and
ensuring the eective
operation of
internal controls
Risk & Internal Audit
Manages the risk framework
and assesses internal
control eectiveness
The Audit Committee
Oversees the risk
framework and
monitors assurance
activity and internal
control eectiveness
Identifying risks which may impede
achieving objectives
2. Inherent risk assessment
Assessing the level of inherent risk
3. Control assessment
Assessing the existence and strength
of controls to mitigate risks
4. Residual risk assessment
Assessing the level of residual risk aer
mitigation from controls
5. Risk reporting
Reporting the status of the most
significant risks to the Executive Board and
Audit Committee
6. Monitoring and review
Monitoring of risks and controls by the
Executive Board and Audit Committee
who advise the Board
Strategic report Governance Financial statements Shareholder information 55
Principal risks and uncertainties
Mitigating risks
eectively
Changes to principal risks
New risks and disclosures
This year Operational Delivery has been
elevated to a separate principal risk. Previously
it formed part of our Transformation principal
risk but now Operational Delivery is considered
a principal risk in its own right, in support
of Transformation. This year we have also
disclosed Board risk appetite for each principal
risk. Our risk appetite is defined as:
Risk appetite Impact on profit before tax
Low Under £2 million
Medium Under £5 million
High Over £5 million
Changing risks
People & Culture – This risk has been renamed
as People as culture is no longer considered a
principal risk following successful integration
of the acquisitions made in 2020 and 2021
and the switch to hybrid working. Remaining
culture risks are included under the People
principal risk.
Transformation & Acquisition Integration –
Acquisition Integration is no longer considered
a principal risk following successful integration
of the acquisitions made in 2020 and 2021.
Remaining risks are included under the
Transformation principal risk.
Cyber Security & Data Protection – This
risk has been renamed as cyber security as
data protection is now recognised as a key
component of cyber security risk. Regulatory
risk in relation to data protection is included in
the Legal & Regulatory principal risk.
Receding risks
Government Policy – Government policy was
previously considered an emerging risk due
to changes in government policy potentially
leading to adverse impacts on our proposition
and markets. However policy outcomes
during the year including the Access to Cash
Review and the Payment Systems Regulator
Market review into the supply of card acquiring
services have reduced this as a standalone
risk and remaining risks are included under
the Legal & Regulatory principal risk.
Climate Risk – PayPoint recognises the impact
climate change is having globally and that it
presents a risk and uncertainty to our business.
As last year, we still consider climate change
to be an emerging risk rather an immediate
principal risk. During the year we launched
our net zero carbon strategy with the goal of
becoming net zero in our own operations by
2030 and fully net zero by 2040. Details of how
we plan to achieve this can be found on page
37. We also implemented The Task Force on
Climate-related Financial Disclosures (TCFD)
which provides companies with a framework
to improve reporting on climate-related
risks and opportunities. Risks presented by
climate change have been embedded into
our enterprise risk management framework
including financial planning processes, business
cases and our overall risk identification and
management processes detailed on page 58.
The table on pages 56 to 58 sets out our
principal and emerging risks including details of
the potential impact, mitigation strategies and
status. The table also details risk movement
during the year and risk appetite. They do not
comprise all risks faced by the Group and are
not set out in order of priority.
Like all businesses,
we face a number of
risks and uncertainties
and successful
management of
existing and emerging
risks is critical to
the achievement of
strategic objectives
and to the long-
term success of any
business. Therefore,
risk management is
an integral part of
PayPoint’s Corporate
Governance.
PayPoint Plc Annual Report 202256
Principal risks and uncertainties continued
Market
Potential impact Mitigation strategies Status Change
1.
Competition
and markets
PayPoint’s markets and competitors
continue to evolve, and failure to
deliver eective strategies to respond
to market and competitor changes
will reduce market share, revenue and
profits. The decline in cash usage,
accelerated by Covid-19, is expected
to continue impacting some of our
markets, and further lockdowns would
also have an impact. Our business may
also be impacted by changing consumer
trends, competitor activity and new and
alternative payment solutions.
The Executive Board regularly
reviews markets, competitor activity,
trading opportunities and potential
acquisitions, and the Board oversees
and challenges strategic direction.
We closely monitor consumer and
technological trends and engage with
clients, retailers and other stakeholders
to improve our proposition. We
continually develop products, services
and systems to adapt to changes in
consumer trends and technology, and
make strategic acquisitions where
appropriate.
Risk is considered increasing as
competition is increasing across
our business but particularly in bill
payment and top up markets which
are seeing downward pressure
on margins due to competition.
However, recent acquisitions have
diversified our business into new
markets and strengthened our card
and digital payment businesses as
we transition away from cash with
our digital proposition.
Risk
appetite
Medium
2.
Emerging
technology
New and emerging technologies are
changing the way consumers pay for
goods and services, impacting our
products and markets. For many years
cash was the principal method for topping
up gas and electricity; however this is
changing and PayPoint needs to evolve
its proposition to capitalise on new
technology and payment methods. New
disruptive fintech products, and large
tech companies who are increasingly
advancing into payment solutions, have
the potential to significantly impact our
business. Covid-19 accelerated global
digital transformation. There is risk to our
business if our digital transformation fails
to keep pace and we do not exploit new
technologies and markets to evolve our
proposition.
We continually develop products
with the latest technology and evolve
them to take advantage of new and
expanding markets. The Executive
Board closely monitors emerging
technologies and the impact they
may have on PayPoint, and mitigating
strategies are implemented where
possible. Emerging technology is a key
component of our acquisition strategy
with recent acquisitions focusing on
digital products.
Risk is stable as recent acquisitions
have accelerated our ability to
mitigate the impact of emerging
technologies and the re-platforming
of our digital proposition will
better enable us to expand our
presence in digital payment
markets. We are engaged in various
government schemes involving
new technology such as our new
Department for Work and Pensions
Cash Out product, as well as other
technological product advances.
Risk
appetite
Medium
Strategic
Potential impact Mitigation strategies Status Change
3.
Transformation
Our business relies on continued
innovation and implementations and
failure to eectively manage our transition
from cash to digital would impede
business performance and our ability to
achieve strategic goals. Continued system
infrastructure improvements are essential
in providing great products and customer
service, and a lack of investment would
impact our business.
The Executive Board assesses
transformation as part of the strategic
planning process and the Board
oversee and challenge strategic
direction. PayPoint is committed to
its transition from cash to digital and
we continue to innovate our legacy
products. Product and infrastructure
reviews are regularly conducted to
identify improvements in processes,
systems and products.
Risk is considered stable as recent
acquisitions have significantly
rebalanced our business away from
cash to digital channels. Numerous
IT infrastructure improvement
programmes are underway following
recent architecture reviews,
including migration to the cloud.
Re-platforming of our digital
proposition is underway with some
elements ready to go live.
Risk
appetite
Medium
Change in status and trend
Principal risks
Increased Unchanged Decreased
Strategic report Governance Financial statements Shareholder information 57
Business
Potential impact Mitigation strategies Status Change
4.
Operating
model
It is important we have a diversified
and varied operating model so we are
not overly exposed to any particular
markets, clients, suppliers or partners.
Our core business relies on an
appropriate mix of clients and retailers
and failure to maintain attractive
client and retailer propositions may
cause attrition adversely impacting
our business. Business areas such as
card payments and ATM rely on key
partner relationships and it is important
strong relationships are maintained
to ensure a resilient and sustainable
operating model.
PayPoint builds strategic relationships with
key clients and retailers and we continually
seek to improve service levels through
new initiatives, products and technology.
We monitor performance through regular
retailer engagement and surveys and
are proactive in addressing areas for
improvement. New clients, retailers and
merchants are routinely onboarded,
ensuring a sustainable customer base
across a diversified range of sectors. Where
products rely on key partners including
our ATM and card payment businesses, we
invest in relationships and propositions to
ensure sustainable partnerships.
Risk is considered stable as recent
acquisitions have diversified our
business and we continue to renew
contracts and onboard new retailers,
clients and merchants in line with
expectations. Our acquisition of
Handepay and Merchant Rentals
increased our card acquirer partnerships
and we are expanding our relationship
with LINK through the launch of the new
Counter Cash product. We continue
to focus on retailer engagement and
enhance our proposition with new and
varied initiatives such as Randox.
Risk
appetite
Medium
5.
Legal and
regulatory
PayPoint is required to comply with
numerous contractual, legal and
regulatory requirements and failure to
meet obligations may result in fines,
penalties, prosecution and reputational
damage. Recent acquisitions have
increased the number of regulated
entities and as regulatory landscapes
evolve, there is a risk that changes
may adversely impact our business. In
November 2021 Ofgem published its
decision to accept the commitments
proposed by PayPoint to address
Ofgem’s competition law concerns in
relation to our pre-payment energy
business. The commitments are being
implemented in line with the timetable
agreed with Ofgem and PayPoint
provides Ofgem with regular updates
on progress.
Our Legal and Compliance Teams work
closely with management on all legal and
regulatory matters, and adopt strategies to
ensure PayPoint is appropriately protected
and complies with regulatory requirements.
The Teams engage on all key contracts
and legal matters and oversee regulatory
compliance, monitoring and reporting.
Emerging regulations are incorporated
into strategic planning and we engage with
regulators to ensure our frameworks are
appropriate to support new products and
initiatives. External counsel is engaged
where required and we respond promptly
and comprehensively to all regulatory
enquiries.
Risk is considered stable as recently
acquired regulated companies have been
integrated into the PayPoint Group, with
regulatory compliance requirements
harmonised where appropriate. In
November 2021, Ofgem accepted
PayPoint’s commitments to address the
concerns raised in Ofgem’s Statement
of Objections received in September
2020. PayPoint is implementing the
commitments in line with the timetable
agreed with Ofgem. No other significant
legal or regulatory matters occurred
during the year. The Payment System
Regulator Card Acquiring Market Review
presents some regulatory risk to our
card business but this is not expected to
be significant.
Risk
appetite
Low
6.
People
Failure to retain and attract key talent
impacts many areas of our business
including service delivery and achieving
strategic objectives. Maintaining a
strong culture of ethical behaviours
and employee wellbeing is also vital
in ensuring our business, people,
customers and other stakeholders are
safeguarded. Our transition to a new
hybrid working model with increased
home working increases the importance
of supporting and engaging our people
to ensure business objectives are met.
The Executive Board define and advocate
PayPoint’s purpose, vision and values and
an employee forum comprising employees
from across the business engages directly
with the Board on employee matters. We
continue to invest in, and support our
people, particularly through Covid-19
where numerous steps have been taken to
ensure employee wellbeing. We have well
established processes for retaining and
recruiting key talent and developing our
people, and there is continued focus on
culture, ethics and diversity.
The UK recruitment market is extremely
competitive at present impacting retention
and recruitment. PayPoint’s sta turnover
increased during the year and although
retention plans were implemented and
vacancies continue to be recruited,
risk is considered increasing due to
the market conditions. During the year
employees from recent acquisitions were
successfully integrated and hybrid working
embedded. We followed all government
guidance on Covid-19 working practices
and implemented numerous initiatives
to protect our people and ensure their
wellbeing. Employee engagement
surveys continue to be positive and the
Employee Forum continues to play an
active role in employee engagement.
Risk
appetite
Low
Operational
Potential impact Mitigation strategies Status Change
7.
Cyber
Security
Cyber attacks may significantly
impact service delivery and data
protection causing harm to PayPoint,
our customers and other stakeholders.
Globally, criminals continue to exploit
vulnerabilities, and recent acquisitions
have increased the number of IT
environments, products and systems
we need to protect. Although
PayPoint has multiple cyber security
systems, capabilities and controls,
ransomware attacks remain a constant
threat. Failure to safeguard systems,
networks and data and comply with
data protection requirements may
result in significant financial loss and
reputational damage.
The Executive Board assesses PayPoint’s
cyber security and data protection
framework and the Cyber Security and IT
Sub-Committee of the Audit Committee
maintain oversight. Our IT security
framework is comprehensive with multiple
security systems and controls deployed
across the Group. We are ISO27001 and
PCI DSS Level 1 certified and systems
are constantly monitored for attacks with
response plans implemented and tested.
Employees receive regular cyber security
training, and awareness is promoted through
phishing simulations and other initiatives. We
engage with stakeholders on cyber-crime
and proactively manage adherence with data
protection requirements.
PayPoint has not experienced any
material attacks or data breaches
during the year but cyber security
continues to be a key focus and risk is
considered increasing because of the
external threat, which has potentially
increased due to the crisis in Ukraine.
Group security standards and systems
have been applied to acquisition IT
environments and we continue to
enhance our architecture, systems,
processes and cyber monitoring and
response capabilities. We regularly
engage third parties to assess and assist
on our cyber defences and strengthen
our controls.
Risk
appetite
Low
PayPoint Plc Annual Report 202258
Operational continued
Potential impact Mitigation strategies Status Change
8.
Business
interruption
Our customers and stakeholders rely
on our systems, products and services
being resilient, with continued service
delivery. Failure to maintain resilience
or promptly recover services following
an outage may result in financial
loss, reputational harm and potential
regulatory scrutiny. Changes to our
infrastructure as we transform our
business from cash to digital and
transition to the cloud increases the
risk of disruptive events, and eective
IT change processes and controls
are vital to avoid disruption. Our
infrastructure and service delivery
is supported by multiple suppliers
and poor supplier performance or
supplier failure may adversely impact
our business.
The Executive Board reviews PayPoint’s
business continuity framework and the
Cyber Security and IT Sub-Committee
of the Audit Committee maintains
oversight. Business continuity, disaster
recovery and major incident response
plans are maintained and tested with
failover capabilities across third party
data centres and the cloud. Systems are
routinely upgraded with numerous change
management processes deployed and
resilience embedded where possible.
Supplier failure can disrupt PayPoint’s
service delivery and risk is managed
through contractual arrangements,
alternative supplier arrangements and
business continuity plans.
Although we have not suered any
significant outages during the year,
risk is considered increasing as we do
experience small business interruption
events due to supplier performance
and internal processes. The crisis in
Ukraine also has the potential to cause
disruption to our services, suppliers and
partners. Although system disruption
is an inherent business risk, our incident
monitoring and response processes are
regularly reviewed and enhanced and we
continue to enhance our infrastructure
and processes to strengthen
continuity controls.
Risk
appetite
Low
9.
Credit and
operational
PayPoint has material credit
exposures with large retailers and
other counterparties and significant
financial loss may result, in the event
of a default. We process large volumes
of payments daily therefore eective
operational controls are essential to
ensure funds are settled accurately,
securely and timely. Absent or
ineective processes and controls
could result in fraud, liquidity risk,
reputational damage or other
financial loss.
PayPoint has eective credit and
operational processes and controls.
Retailers and counterparties are subject to
ongoing credit reviews, and eective debt
management processes are implemented.
Settlement systems and controls are
continually assessed and enhanced with
new systems and technology implemented.
We have eective governance with
oversight committees, delegated
authorities and policies for key processes.
Segregation of duties and approvals are
implemented for all areas where fraud or
material error may occur.
Although credit losses remain low, risk to
credit exposures is increasing following
the government ending business support
for Covid-19, and other impacts on the UK
economy from increasing energy prices
and inflation. We continue to review and
enhance our operational processes and
controls and have made good progress
during the year aligning processes and
controls for the recent acquisitions.
No material processing errors or frauds
occurred during the year and the risk
profile of our business operations
remains stable.
Risk
appetite
Low
10.
Operational
delivery
Eective operational delivery of key
initiatives and strategic objectives is
central to achieving our transformation
aims. Poor delivery would impede our
business performance and impact
our stakeholders. Additionally, poor
planning and forecasting of business
initiatives may impede financial targets
and business performance.
The Executive Board has overall
responsibility for delivering key initiatives
and ensuring eective governance. Larger
initiatives have steering groups and
project teams with representatives from
across the business to ensure all business
considerations are included in planning and
delivery. We regularly liaise with third party
stakeholders throughout implementation
to agree and revise objectives and targets
as projects progress. Finance teams
are actively involved in key projects to
ensure cost and revenue considerations
are continually reviewed and post project
assessments are made to establish lessons
for future deliveries.
Risk is considered to be increasing as
we are at an important stage in our
transformation, and have a number
of key initiatives underway to ensure
sustainable revenue and growth into
the future. During the year we
successfully delivered our new Counter
Cash product and Zebra printer roll-out
to parcel retailers as well as other new
initiatives and products.
Risk
appetite
Low
Emerging risks
Potential impact Mitigation strategies Status
ESG and
Climate
Focus on environmental, social and
governance matters continues to
increase and our business needs to
be environmentally responsible and
create shared value for all stakeholders
to ensure sustainability and reinforce
our values and brand. Climate risk is
a key priority for governments and
organisations globally, and PayPoint
needs to play its part in reducing
carbon emissions and its environmental
impact. Approximately 17% of our
revenue is derived from energy and fuel
markets and as the UK transitions to
Net zero carbon emission economy by
2050, we need to closely monitor the
impacts on our business to ensure our
revenue streams remain sustainable.
The CEO and the Executive Board have
overall accountability for PayPoint’s
climate and social responsibility agendas
and recommends strategy to the Board.
We align our business with reducing carbon
emissions, and continually assess our
approach to environmental risk and social
responsibility which are embedded in
our decision-making processes. We have
multiple policies and processes governing
our social responsibility strategy and we
continually assess and evolve our strategy
and working practices to ensure the
best outcomes for stakeholders and the
environment.
During the year we implemented an ESG Working
Group comprising Executive Board members and
other key stakeholders, which is responsible for
overseeing ESG and climate matters and updating
the Executive Board. We implemented the new
Task Force on Climate-related Financial Disclosures
(TCFD), and comprehensively assessed carbon
emissions across our value chain. In doing so, we
have been able to set net zero targets and make
various carbon emission reductions – see page 37
for more details. We have reviewed and updated
many of our environmental and social responsibility
policies, which are approved by the Board. ESG
and climate were also embedded into our risk
management framework.
Principal risks and uncertainties continued
Increased Unchanged Decreased
Change in status and trend
Strategic report Governance Financial statements Shareholder information 59
Viability statement
In accordance with the 2018 UK Corporate
Governance Code, the Directors have assessed
the viability of the Group over a three-year
period, taking account of the Group’s current
financial and trading position, the principal
risks and uncertainties (as set out on pages
56 to 58) and the strategic plans that are
reviewed at least annually by the Board.
The Directors have determined that the
Group’s strategic planning period of three
years remains an appropriate time frame over
which to assess viability. This broadly aligns
to average client renewal terms, new client
prospecting and onboarding cycles and the
development-through-to-maturity evolution
of new products and service lines.
The starting point for the viability assessment
is the strategic and financial plan which
makes assumptions relating to the economic
climate, market growth, cost inflation, the
prospects of new products and services and
past performance. This plan is then subject to
a series of stress scenarios using inputs from
business functions based on the potential
materialisation of certain principal risks.
All principal risks identified (which are set
out on pages 56 to 58), including ESG, could
have an impact on the Group’s performance.
However, the main risks which could potentially
and materially impact the Group together with
the related scenario assumption are:
Principal risk 1: competition and markets:
• Failure to maintain significant client
contracts resulting in 20% to 40%
reduction in transaction volumes depending
on the nature of the clients’ contract
• Inadequate recruitment or excessive churn
in the retail network and merchant estate
resulting in a net annual churn of 10% in
the estate (impacting service fees and card
acquiring revenues).
Principal risks 3 and 10: transformation
and operational delivery:
• New products or services do not perform
as anticipated and/or execution in their
delivery limits contribution to 10% of
expectations.
Principal risk 5: legal and regulatory:
• Fines/reputational damage amounting to
£24 million (being 15% of turnover for
violation of market abuse regulations).
Principal risks 6 and 7: cyber security
and business interruption:
• The financial impact of technical failure from
cyber-attacks resulting in a network outage
and loss of revenue for up to seven days.
Principal risk 8: Credit and Operational:
• Multiple retailer groups entering receivership
assuming a 20% loss of client funds, where
PayPoint is liable.
Financing facilities
The impacts of these scenarios were then
reviewed against the Group’s current and
projected future net cash/debt and liquidity
position. The Group closed the financial year
with net debt of £43.9m of which £21.7m
is an amortising loan (repayable in quarterly
instalments of c.£3m).
The Group had £48m of committed and
unutilised debt facilities, consisting of a
revolving credit facility syndicated across three
banks. The Revolving Credit Facility (RCF) has
two financial covenants, relating to interest
cover and leverage (EBITDA to Net debt).
The RCF expires in February 2025, with the
assumption we will successfully refinance in
advance of that date.
Result of stress tests
In the unusual set of circumstances of all the
above significant scenarios occurring together,
the Group, with no cost mitigations, would
still deliver positive EBITDA and remain within
its financing facility covenants. The viability
scenario also factors in reductions of taxation
and dividends following the payment of the
final dividend of 18.0p declared in respect
of the financial year ended 31 March 2022.
Under a viability scenario the Group would
create a committee with a focus to actively
preserve viability through containing and
limiting further exposure. This committee
would engage with key partners and suppliers
to ensure continued support of key activities
as well as to reduce operational activity and
related costs to ensure the longer-term
viability of the business.
Conclusion
Taking these results into account together
with the Group’s current position, the Group’s
experience of managing adverse conditions in
the past and mitigating actions available to the
Group, the Directors confirm that they have a
reasonable expectation that the Group will be
able to continue its operations, remain solvent
and meet its liabilities as they fall due over the
three-year viability period.
PayPoint Plc Annual Report 202260
Financial review
A positive,
resilient
performance
The Group has delivered
a profit before tax from
continuing operations
excluding exceptional
items of £45.6 million,
up 25.0% vs FY21,
reflecting a rebalancing
of the business mix
towards growth
opportunities and a
positive contribution
from the acquisitions
of Handepay/Merchant
Rentals, i-movo and
RSM 2000.
Alan Dale
Finance Director
Strategic report Governance Financial statements Shareholder information 61
Overview of continuing operations
Last year we saw the impact of the Covid-19 pandemic aect a number of our business lines and sectors which drove significant variances. In the
current year a number of variances are driven by the impact of our acquisitions as well as a number of those business lines and sectors that have
partially recovered. Given the disposal of the Romanian business on 8 April 2021 the focus of this review is primarily on the continuing operations
of the Group, the results of Romania have been classified as a discontinued operation and are provided below.
£m
Year ended
31 March
2022
Restated
1
Year ended
31 March
2021
Change
%
Revenue
Revenue from continuing operations 145.1 127.7 13.6%
Net revenue
2
Continuing operations
Shopping 58.7 40.2 46.2%
E-commerce 4.9 3.6 36.2%
Payments & Banking 51.5 53.3 (3.6%)
Total net revenue 115.1 97.1 18.5%
Total costs from continuing operations (excluding exceptional items)
3
(69.5) (60.6) 14.7%
Profit before tax from continuing operations (excluding exceptional items) 45.6 36.5 25.0%
Exceptional items 2.9 (16.1) n/m
Profit before tax from continuing operations 48.5 20.4 137. 3%
Profit before tax from discontinued operations 30.0 7.6 n/m
Profit before tax 78.5 28.0 180.5%
Cash generation from continuing operations excluding exceptional items 53.9 46.9 14.9%
Net corporate debt
4
(43.9) (68.2) (35.7%)
1. Comparative information has been restated for the retrospective application of the Group’s change in accounting policy on intangible assets. Refer to note 1 and note 32.
2. Net revenue is an alternative performance measure. Refer to note 4 to the financial information for a reconciliation to revenue.
3. Total costs is an alternative performance measure as explained in note 1 to the financial information, a reconciliation to costs is included in the Financial review on page 66.
4. Net corporate debt (excluding IFRS 16 liabilities) is an alternative performance measure. Refer to note 1 to the financial information for a reconciliation to cash and
cash equivalents.
The above results for continuing operations reflect a number of corporate changes within the Group and the impact of exceptional items. The
results of last year’s acquisitions, i-movo in December 2020 and Handepay/Merchant Rentals in February 2021, are included for the full year
as is the acquisition of RSM 2000 which completed in April 2021.
Profit before tax from continuing operations of £48.5 million (2021: £20.4 million) increased by £28.1 million (137.3%). The current year reflects
exceptional income of £2.9 million whilst the prior year reflects exceptional costs of £16.1 million which includes the £12.5 million provision made
in relation to the Ofgem Statement of Objections. The profit before tax from continuing operations excluding exceptional items, the underlying
profit, increased by £9.1 million (25.0%) to £45.6 million (2021: £36.5 million).
Revenue from continuing operations increased by £17.4 million (13.6%) to £145.1 million (2021: £127.7 million). Net revenue from continuing
operations increased by £18.0 million (18.5%) to £115.1 million (2021: £97.1 million). Handepay and Merchant Rentals contributed additional
£16.1 million net revenue from a full year compared to two months in 2021. Growth in service fees from additional sites and growth in e-commerce
as it recovers from Covid-19 have been partially oset by the headwinds of structural changes and margin pressure on UK bill payments and a
continued decline in cash use on UK bill payments, top ups and ATMs.
Shopping net revenue increased by £18.5 million (46.2%) to £58.7 million (2021: £40.2 million). Service fees net revenue increased by £1.9 million
(13.1%) driven by additional PayPoint One sites and implementing the annual RPI increase. ATM net revenue decreased by 0.1% due to a reduction in
transactions driven by the continuing trend of reduced demand for cash across the economy. Handepay/Merchant Rentals net revenue increased by
£16.1 million (658.4%) as both entities were owned for a full financial year compared to the previous year where they were owned for two months.
PayPoint card payments net revenue decreased by £1.1 million (9.4%), maintaining strong transaction volumes seen in prior year but at a lower
average transaction value.
E-commerce net revenue increased by £1.3 million (36.2%) to £4.9 million (2021: £3.6 million), driven by strong growth in total transactions which
increased by 25.3% with the easing of Covid-19 restrictions in the current year. This facilitated increased Pick Up/Drop O activity combined with
growth in volumes following our investment in thermal instore Zebra printers. During the year a new partnership was launched with Randox providing
their Covid-19 testing service in our parcel network, this contributed £0.5 million of revenue (2021: £nil).
PayPoint Plc Annual Report 202262
Financial review continued
Payments & Banking net revenue decreased by £1.8 million (3.6%) to £51.5 million (2021: £53.3 million). Cash bill payments net revenue decreased
by £2.3 million (8.1%) to £26.7 million, as a result of a decrease in bill payment transactions from the continued switch to digital payment methods
along with the continuing impacts of Covid-19 where consumers are making larger payments, less frequently. Cash top-ups net revenue decreased
by £0.5 million (6.2%) to £7.8 million with volumes down 12.6% driven by the continuing structural declines in the prepaid mobile sector.
Digital net revenue increased by £1.6 million (27.1%) to £7.7 million driven by the £1.1 million net revenue contribution from RSM 2000 in the year.
MultiPay net revenue decreased by £0.9 million to £3.3 million (2021: £4.2 million) and transactions increased 6.7% as a result of more clients taking
the digital services and contribution from the new functionalities of Direct Debit and PayByLink although at a lower net revenue per transaction.
This has been partially oset by Cash Out net revenue which increased by 75.6%, driven by the new DWP Payment Exception Service launched
by the i-movo acquisition. Existing Cashout vouchers decreased by £0.1 million (4.7%) to £1.6 million (2021: £1.7 million) as the demand from
local authorities to disperse Covid-19 support schemes has reduced. eMoney net revenue decreased by £0.5 million (5.6%) to £8.2 million
(2021: £8.7 million), as a result of a 6.9% decrease in transactions reflecting these schemes delivering lower volumes following the strong
performance seen during Covid-19 period.
Total costs from continuing operations excluding exceptional costs increased by £8.9 million to £69.5 million (2021 restated: £60.6 million). The
increase in costs was driven by the £12.2m additional cost base in relation to the newly acquired businesses partially oset by £3.3m reduction in
operational costs. Prior year costs have been restated and reduced by £1.0 million by the retrospective application of the change in accounting policy
on intangible assets following the April 2021 IFRIC agenda decision on costs incurred in implementing cloud computing SaaS arrangements.
Reconciliation from profit before tax from continuing operations to underlying profit before tax from continuing operations
Year ended
31 March 2022
£m
Restated
1
Year ended
31 March 2021
£m
Profit before tax from continuing operations 48.5 20.4
Adjusted for:
Current year exceptional costs – administrative expenses (2.9) –
Prior year exceptional costs – administrative expenses – 3.1
Prior year exceptional costs – finance costs – 0.5
Prior year provision in relation to the Ofgem Statement of Objections – 12.5
Underlying profit before tax from continuing operations 45.6 36.5
1. Comparative information has been restated for the retrospective application of the Group’s change in accounting policy on intangible assets. Refer to note 1 and note 32.
Current year exceptional item is a £2.9 million revaluation gain of the i-movo deferred, contingent consideration liability. Prior year exceptional costs
of £16.1 million were one-o acquisition and refinancing expenses and a £12.5 million provision in relation to Ofgem’s Statement of Objections.
Cash generation from continuing operations excluding exceptional items remained strong with £53.9 million (2021: £46.9 million) delivered from
profit before tax excluding exceptional items of £45.6 million (2021: £36.5 million). There was a net working capital outflow of £3.2 million, primarily
the VAT deferral oered by HMRC being repaid in the period.
Net corporate debt decreased by £24.3 million to £43.9 million (2021: £68.2 million) due to the benefit from the disposal of the Romanian
business partially oset by current year investments in Snappy Shopper and RSM 2000. At 31 March 2022 loans and borrowings were £51.5 million
(2021: £86.6 million) which included £2.9 million of asset financing in the Merchant Rentals acquisition.
Strategic report Governance Financial statements Shareholder information 63
Shopping
Shopping consists of services PayPoint provides to retailer partners, which form part of PayPoint’s network, and SME partners. Services include
providing the PayPoint One platform (which has a basic till application), EPoS, card payments, ATMs, Counter Cash and terminal leasing.
Net revenue (£m)
Year ended
31 March
2022
Year ended
31 March
2021 Change %
Service fees 16.6 14.6 13.1%
Card payments – PayPoint 11.0 12.1 (9.4%)
Card payments – Handepay (two months in 20/21) 12.8 1.5 n/m
Card payments – RSM 2000 0.9 – n/m
Card terminal leases – Merchant Rentals (two months in 20/21) 5.7 1.0 n/m
ATMs 9.7 9.7 –
Other shopping 2.0 1.3 56.4%
Total net revenue (£m) 58.7 40.2 46.2%
Net revenue increased by £18.5 million (46.2%) to £58.7 million (2021: £40.2 million) primarily due to the inclusion of Handepay and Merchant
Rentals revenues for the full year.
The net revenue of each of our key products is separately addressed below.
Service fees from terminals
Year ended
31 March
2022
Year ended
31 March
2021 Change %
Net Revenue (£m) 16.6 14.6 13.1%
PayPoint terminal sites (No.)
PayPoint One Base 7,392 7, 915 (6.6%)
PayPoint One EPoS Core 9,639 8,307 16.0%
PayPoint One EPoS Pro 1,089 1,240 (12.2%)
Total PayPoint One – revenue generating 18,120 17,462 3.8%
PayPoint One Base non-revenue generating 671 343 95.6%
Total PayPoint One 18,791 17,805 5.5%
Legacy (T2) 214 1,441 (85.1%)
PPoS 9,249 8,821 4.9%
Total terminal sites in PayPoint network 28,254 28,067 0.7%
PayPoint One average weekly service fee per site (£) 17.0 16.3 4.3%
As at 31 March 2022, PayPoint had a live terminal in 28,254 UK sites, an increase of 0.7% primarily as a result of new sales. PayPoint One sites
increased by 5.5% to 18,791 sites due to new sales and the continued migration from the legacy T2 terminal.
Service fees: This is a core growth area and consists of service fees from PayPoint One and our legacy terminals. Service fee net revenue increased
by £2.0 million (13.1%) to £16.6 million driven by the additional 658 PayPoint One revenue generating sites compared to 2021. The higher price
point EPoS Core sites increased by 1,332 due to new sales and upselling whilst EPOS Pro sites decreased by 151 compared to 2021, which had
benefited from our three month try before you buy EPoS Pro oering.
The PayPoint One average weekly service fee per site increased by 4.3% to £17.0, benefiting from the increase in EPoS Core sites which are charged
at a higher rate and the annual RPI increase. Retailers taking the Core version of the product represent 51.3% (2021: 46.7%) of all PayPoint One sites
and the Pro version represent 5.8% (2021: 7.0%). Legacy terminals now just remain in a few of our multiple retailer partners but are being replaced.
Sector
analysis
PayPoint Plc Annual Report 202264
Financial review continued
Card payments and leases
Year ended
31 March
2022
Year ended
31 March
2021 Change %
Net Revenue (£m)
Card payments – Handepay (two months in 20/21) 12.8 1.5 n/m
Card terminal lessees – Merchant Rentals (two months in 20/21) 5.7 1.0 n/m
Card payments – PayPoint 11.0 12.1 (9.4%)
Card payments – RSM 2000 0.9 – n/m
Services in Live sites (No.)
Card payments – Handepay 22,796 18,805 21.2%
Card terminal lessees – Merchant Rentals 35,403 26,017 36.1%
Card payments – PayPoint 9,666 9,930 (2.7%)
Card payments – RSM 2000 147 – n/m
Transactions (Millions)
Card payments – Handepay (two months in 20/21) 145.0 14.6 n/m
Card payments – PayPoint 217. 8 210.4 3.5%
Card payments – RSM 2000 6.5 – n/m
Card payments: Handepay and Merchant Rentals generated £18.5 million net revenue in the year. Handepay contributed £12.8 million card
payments net revenue and 145.0 million transactions, benefiting from the reopening of SMEs across key sectors with the easing of government
restrictions. Handepay card payment services were live in 22,796 sites at 31 March 2022, an increase of 3,991 sites (21.2%) since 31 March 2021.
Merchant Rentals contributed £5.7 million terminal leasing net revenue.
PayPoint card payments transactions increased by 3.5% to 217.8 million and net revenue decreased by 9.4% to £11.0 million maintaining strong
transaction volumes seen in FY21 but at a lower average transaction value £11.27 (FY21: £12.40). Across our network there were 9,666 PayPoint
card payments sites, a decrease of 264 sites (2.7%) since 31 March 2021.
RSM 2000 card payments reflects a full year’s transactions from the new acquisition.
ATMs
Year ended
31 March
2022
Year ended
31 March
2021 Change %
Net Revenue (£m) 9.7 9.7 –
Services in Live sites (No.) 3,686 3,626 1.7%
Transactions (Millions) 30.4 30.6 (0.8%)
ATMs: Net revenue remained flat at £9.7 million although transactions reduced by 0.8% to 30.4 million. This is attributable to the continued reduced
demand for cash across the economy, accentuated by the Covid-19 preference for card use. Sites increased 1.7% to 3,686 and PayPoint continued
to optimise its ATM network by relocating existing machines to better performing locations.
Other: Other shopping services increased by £0.7 million (56.4%) to £2.0 million (2021: £1.3 million) this includes the launch of the partnership with
Snappy Shopper and the new PayPoint Counter Cash service which was live in 2,624 sites.
E-commerce
Parcels
Year ended
31 March
2022
Year ended
31 March
2021 Change %
Net Revenue (£m) 4.9 3.6 36.2%
Services in Live sites (No.) 10,049 10,509 (4.4%)
Transactions (Millions) 33.3 26.6 25.2%
E-commerce net revenue increased by £1.3 million (36.2%) to £4.9 million due to the increase in total parcels transactions by 25.2% to 33.3 million
with the easing of Covid-19 restrictions in the current period facilitating increased Out of Home activity. The prior period transactions were impacted
by Covid-19 restrictions with consumers staying at home. Parcel sites decreased by 4.4% to 10,049 sites due to stores being removed from
our network.
Strategic report Governance Financial statements Shareholder information 65
Payments & Banking
Net revenue (£m)
Year ended
31 March
2022
Year ended
31 March
2021 Change %
Cash – bill payments 26.7 29.0 (8.1%)
Cash – top-ups 7.8 8.3 (6.2%)
Digital 7.8 6.1 27.1%
Cash through to digital 8.2 8.7 (5.6%)
Other payments and banking 1.0 1.2 (16.4%)
Total net revenue (£m) 51.5 53.3 (3.6%)
Payments & Banking divisional net revenue decreased by 3.6% to £51.5 million, as a result of fewer cash bill payments and top up transactions, and
margin erosion from client contract renewals but partly oset by continued growth in digital transactions.
Cash – bill payments
Year ended
31 March
2022
Year ended
31 March
2021 Change %
Net revenue (£m) 26.7 29.0 (8.1%)
Transactions (millions) 157. 2 168.3 (6.6%)
Transaction value (£m) 3,932.3 4,210.1 (6.6%)
Average transaction value (£) 25.0 25.0 –
Net revenue per transaction (pence) 17.0 17.2 (1.4%)
Cash – bill payments net revenue decreased by £2.3 million (8.1%) to £26.7 million primarily as a result of the continued switch to digital payment
methods and consumers are continuing to make larger payments, less frequently. Cash bill payments transactions decreased by 11.1 million (6.6%)
to 157.2 million. Cash bill payments net revenue per transaction decreased by 0.2 pence (1.4%) due to margin erosion from client contract renewals.
Cash – top-ups
Year ended
31 March
2022
Year ended
31 March
2021 Change %
Net revenue (£m) 7.8 8.3 (6.2%)
Transactions (millions) 21.2 24.3 (12.6%)
Transaction value (£m) 257.6 289.1 (10.9%)
Average transaction value (£) 12.1 11.9 1.9%
Net revenue per transaction (pence) 36.8 34.2 7.7%
Cash – top-ups net revenue decreased by £0.5 million (6.2%) to £7.8 million. Cash top-ups transactions decreased by 3.1 million (12.6%) to
21.2 million due to further market declines in the prepaid mobile sector whereby UK direct debit pay monthly options displace UK prepay mobile
and Covid-19 impacts where consumers are making larger payments and less frequently.
Digital
Year ended
31 March
2022
Year ended
31 March
2021 Change %
Net revenue (£m) 7.8 6.1 27.1%
Transactions (millions) 34.2 27.2 25.6%
Transaction value (£m) 756.6 545.7 38.6%
Average transaction value (£) 22.2 20.1 10.3%
Net revenue per transaction (pence) 22.5 22.4 0.4%
Digital (MultiPay, Cash Out and RSM 2000) net revenue increased by £1.7 million (27.1%) to £7.8 million and digital transactions increased by
7.0 million (25.6%) to 34.2 million driven by the £1.1 million contribution of RSM 2000 to this sector. MultiPay net revenue decreased by £0.9 million
to £3.3 million (2021: £4.2 million), this was due to the expected volume reduction from Utilita moving customers to their in-house solutions. This
was partially oset by the new DWP Payment Exception Service which contributed £1.6 million net revenue in the period partially oset by Cash
Out net revenue which decreased by £0.1 million (4.7%), driven by reduced demand from local authorities seeking to digitise their payments oering
and despite Covid-19 meal voucher schemes winding down.
PayPoint Plc Annual Report 202266
Cash through to digital
Year ended
31 March
2022
Year ended
31 March
2021 Change %
Net revenue (£m) 8.2 8.7 (5.6%)
Transactions (millions) 10.6 11.4 (6.9%)
Transaction value (£m) 505.2 475.0 6.4%
Average transaction value (£) 47.5 41.6 14.3%
Net revenue per transaction (pence) 77.4 76.3 1.4%
Cash through to digital (eMoney) net revenue decreased by £0.5 million (5.6%) to £8.2 million (2021: £8.7 million) and transactions decreased by
0.8 million (6.9%) to 10.6 million (2021: 11.4 million) reflecting these schemes delivering lower volumes following the strong performance seen
during Covid-19 period. eMoney transactions derive a substantially higher fee per transaction than traditional top-up transactions.
Other payments & banking net revenue includes SIM sales and other ad-hoc items which contributed £1.0 million (2021: £1.2 million) net revenue.
The decrease reflects the continuing decline in SIM sales, accentuated by the impact of Covid-19 on tourism.
Total costs
Year ended
31 March
2022
Restated
1
Year ended
31 March
2021 Change %
Continuing operations excluding exceptional items (£m)
Other costs of revenue 11.0 7.0 57.1%
Depreciation and amortisation (costs of revenue) 7.6 7.8 (2.6%)
Depreciation and amortisation (administrative expenses) 2.9 0.9 222.2%
Other administrative costs (administrative expenses) 46.0 43.6 5.7%
Net finance costs 2.0 1.3 53.8%
Total costs from continuing operations excluding exceptional items 69.5 60.6 14.7%
Total costs from continuing operations increased by £8.9 million (14.7%) to £69.5 million. Prior year costs have been restated and reduced by
£1.0 million by the retrospective application of the change in accounting policy on intangible assets following the April 2021 IFRIC agenda decision
on costs incurred in implementing cloud computing SaaS arrangements. This is the net impact of reversing amortisation of previously capitalised
intangible assets and expensing rather than capitalising SaaS type expenditure in the year.
The increase in costs from continuing operations was primarily driven by the cost base in relation to the newly acquired businesses of £12.2 million,
included within this balance is £2.4 million for amortisation on acquired intangibles shown in administrative expenses.
This was partially oset by operational cost reductions made in the group of £3.3 million. This included lower people costs of £1.2 million primarily
as a result of higher vacancies this year compared to last year, lower depreciation and amortisation with some legacy assets coming to the end of
their life.
Operating margin before exceptional items
2
Operating margin from continuing operations before exceptional items of 41.4% (2021: 39.0%) increased by 2.4 ppts due to increases in our
shopping sector which carries a higher operating margin.
The tax charge for continuing operations of £9.0 million (2021: £4.5 million) on profit before tax from continuing operations of £48.5 million
(2021: £20.4 million) represents an eective tax rate
3
of 18.5% (2021: 22.3%). 3.8ppts lower than prior year due to a decrease in disallowable
expenses associated with the one-o acquisition and disposal costs and expenditure qualifying for the capital allowances super deduction and
non-taxable items, partially oset by the impact of revaluing the deferred tax liability following the enactment of the increased main rate of UK
corporation tax from 19% to 25% with eect from 1 April 2023.
Financial review continued
1. Comparative information has been restated for the retrospective application of the Group’s change in accounting policy on intangible assets. Refer to note 1 and note 32.
2. Operating margin before exceptional items % is an alternative performance measure and is calculated by dividing operating profit before exceptional items by net revenue.
3. Eective tax rate is the tax cost as a percentage of profit before tax.
Strategic report Governance Financial statements Shareholder information 67
Discontinued operation – Romania
Year ended
31 March
2022
Year ended
31 March
2021 Change %
Revenue from discontinued operation 1.3 67.7 n/m
Net profit from discontinued operation 0.1 7.6 n/m
Profit on disposal of discontinued operation 29.9 – –
Total profit before tax from discontinued operation 30.0 7.6 n/m
The revenues and net profit from the discontinued operation in the current year represents the revenue and costs from the Romanian between 1 and
8 April 2021 prior to disposal completion.
Net assets of £83.3 million (2021: £33.3 million) increased by £50.0 million. Current assets decreased by £64.4 million to £104.8 million
(2021: £169.8 million) with no assets held for sale in the current financial period following the sale of the Romanian business in April 2021.
Non-current assets of £127.3 million (2021: £115.7 million) increased by £11.6 million mainly due to the additional investments made in RSM
2000 and Snappy Shopper Limited. Current liabilities reduced £88.0 million due to no liabilities relating to assets held for sale, £24.0 million reduction
in loans and borrowings from using part of the Romania disposal proceeds and payment in relation to Ofgem. Non-current liabilities of £15.7 million
(2021: £30.5 million) decreased mainly by the non-current portion of the 3 year term loan.
The following table summarises the cash flow movements during the year.
Year ended
31 March
2022
Restated
1
Year ended
31 March
2021 Change %
Profit before tax from continuing and discontinued operations 78.5 28.0 180.4%
Ofgem provision – cash payment/provision reversal (12.5) 12.5 –
Other exceptional items (2.9) – –
Gain on disposal of investments Romania (30.0) – n/m
Depreciation and amortisation 10.6 9.1 16.5%
VAT and other non-cash items – 0.1 –
Share-based payments and other items 0.9 0.9 –
Working capital changes (corporate) (3.2) 0.8 n/m
Cash generation 41.4 51.4 (19.5%)
Taxation payments (9.2) (8.4) 9.5%
Capital expenditure (10.8) (5.2) (107.7%)
Acquisition of Collect+ brand – (6.0) –
Acquisitions of subsidiaries net of cash acquired (4.5) (60.8) 92.6%
Contingent consideration cash paid (2.0) – –
Purchase of investment in associate (6.7) – –
Purchase of convertible loan note (0.8) – –
Disposals of business net of cash disposed 20.2 – –
Movement in loans and borrowings (35.0) 11.3 (409.7%)
Lease payments (0.2) (0.2) –
Dividends paid (23.1) (21.4) 7.9%
Net decrease in corporate cash and cash equivalents (30.7) (39.3) (21.9%)
Net change in clients’ funds and retailers’ deposits (9.7) 11.9 (181.5%)
Net decrease in cash and cash equivalents (40.4) (27.4) 47.4%
Cash and cash equivalents at the beginning of year 64.8 93.8 (30.9%)
Eect of foreign exchange rate changes – (1.6) –
Cash and cash equivalents at the end of year 24.4 64.8 (62.3%)
Comprising:
Corporate cash 7.7 18.3 (57.9%)
Clients’ funds and retailers’ deposits 16.7 46.5 (64.3%)
1. Comparative information has been restated for the retrospective application of the Group’s change in accounting policy on intangible assets. Refer to note 1 and note 32.
PayPoint Plc Annual Report 202268
Financial review continued
The following table summarises the cash generation from continuing operations excluding exceptional items:
Year ended
31 March
2022
Restated
1
Year ended
31 March
2021 Change %
Profit before tax from continuing operations 48.5 20.4 137.7%
Provision in relation to the Ofgem Statement of Objections – 12.5 –
Other exceptional items (2.9) 3.6 n/m
Profit before tax from continuing operations excluding exceptional items 45.6 36.5 25.0%
Depreciation and amortisation 10.6 8.7 21.8%
VAT and other non-cash items – 0.1 –
Share-based payments and other items 0.9 0.9 –
Working capital changes (corporate) (3.2) 0.7 n/m
Cash generation from continuing operations excluding exceptional items 53.9 46.9 14.9%
1. Comparative information has been restated for the retrospective application of the Group’s change in accounting policy on intangible assets. Refer to note 1 and note 32.
Cash generation remained strong with £41.4 million (2021: £51.4 million) delivered from profit before tax from continuing and discontinued
operations of £78.5 million (2021: £28.0 million). Current year cash generation was impacted by the £12.5 million payment in relation to the Ofgem
Statement of Objections. Adjusting for exceptional items, cash generation from continuing operations improved by 14.9% to £53.9 million. There
was a net working capital outflow of £3.2 million primarily from the VAT deferral oered by HMRC now being repaid.
The current period benefited from the £47.6 million cash proceeds received on sale of the Romanian business, net of transaction costs. Taxation
payments on account of £9.2 million (2021: £8.4 million) are higher compared to the prior period due to the increased taxable profits earned in the
period compared to the prior year. Dividend payments were higher compared to the prior period due to the increase in the interim and final ordinary
dividend paid per share compared to the prior year ended 31 March 2021.
Capital expenditure of £10.8 million (2021: £5.2 million) was £5.6 million higher than the prior year. Capital expenditure primarily consists of IT
hardware, PayPoint One terminals, EPoS development and the enhancement to the Direct Debit platform. The increase in capital expenditure is
primarily driven by the enhancement to the Direct Debit platform.
At 31 March 2022 net corporate debt was £43.9 million (2021: £68.2 million) and has decreased by £24.3 million from the prior year end position.
Total loans and borrowings of £51.6 million which have decreased by £35.0 million consisted of a £21.7 million amortising term loan, £27.0 million
drawdown of the £75.0 million revolving credit facility and £2.9 million of asset financing balances (2021: £49.5 million drawdown from the revolving
credit facility, £32.5 million amortising term loan and £4.6 million of asset financing balances). The cash proceeds received on sale of the Romanian
business in April 2021 were partly used to reduce the revolving credit facility.
Dividends
Year ended
31 March
2022
Year ended
31 March
2021 Change %
Ordinary reported dividends per share (pence)
Interim (paid) 17.0 15.6 9.0%
Final (proposed) 18.0 16.6 8.4%
Total reported dividend per share (pence) 35.0 32.2 8.7%
Total dividends paid per share 33.6 31.2 7.7%
Total dividends paid in year (£m) 23.1 21.4 7. 9 %
We have declared an increase of 8.4% in the final dividend of 18.0 pence per share (2021: 16.6 pence per share) payable in equal instalments of
9.0 pence per share (2021: 8.3 pence per share) on 25 July 2022 and 30 September 2022 to shareholders on the register on 10 June 2022 and
2 September 2022 respectively. The final dividend is subject to the approval of the shareholders at the annual general meeting on 20 July 2022.
The final dividends will result in £12.4 million (2021: £11.4 million) being paid to shareholders from the standalone statement of financial position
of the Company which, as at 31 March 2022, had approximately £67.9 million (2021: £58.1 million) of distributable reserves.
Strategic report Governance Financial statements Shareholder information 69
Capital allocation
The Board’s immediate priority is to continue to preserve PayPoint’s balance sheet strength. The Group maintains a capital structure appropriate for
current and prospective trading over the medium term that allows a healthy mix of dividends and cash for investment through capital expenditure
and acquisitions. The Board’s approach to the setting of the ordinary dividend has not materially changed since the prior year end and follows the
following capital allocation priorities:
• Investment in the business through capital expenditure in innovation to drive future revenue streams and improve the resilience and eciency of
our operations;
• Investment in opportunities such as the acquisitions of i-movo, Handepay/Merchant Rentals and RSM 2000 in November 2020, February 2021
and April 2021 respectively and investment in Snappy Shopper in April 2021;
• Progressive ordinary dividends targeting a cover ratio of 1.2 to 1.5
1
times continuing operations earnings excluding exceptional items.
Going concern
The financial statements have been prepared on a going concern basis having regard to the identified principal risks and uncertainties and
viability statement on pages 54 to 59. Our cash and borrowing capacity provides sucient funds to meet the foreseeable needs of the Group
including dividends.
Alan Dale
Finance Director
17 June 2022
1. Dividend cover represents profit aer tax divided by reported dividends.
Chairman’s statement for governance
Giles Kerr
Chairman
PayPoint Plc Annual Report 202270
Dear Shareholders,
This has been another positive year for the PayPoint Group as the
business has built on the transformation and strategic step change
delivered last year. Over the last two years, the Group has undergone
material change and diversified away from legacy business lines, with
growth in Payments and Banking, E-commerce and Shopping o-
setting the decline in cash payments. I am delighted with the way the
management team, led by Nick Wiles, and all the employees of the Group
have responded to the continuing challenges in our markets, enabling
us to report a positive financial performance, opening up further growth
opportunities across the business and delivering further progress
against our strategic objectives.
Governance
I am pleased to report that for the year under review, we have consistently
applied the Principles of Good Governance contained in the 2018 UK
Corporate Governance Code. The Board has completed a review of the
disclosures and management of climate related risks for the Task Force on
climate related Financial Disclosures. Disclosure is provided in our 2022
Annual Report, along with the further progress made on developing our
broader ESG strategy.
Executive Board
The Executive Board has also been strengthened in key areas this year to
drive growth and accelerate the pace of delivery further. Anna Holness,
joined the business as Sales Director in January 2022, aer three
years as VP, Sales, Merchant International Solutions at Worldpay. In
addition, four internal promotions were made to the Executive Board in
January 2022 to recognise their critical roles in delivering our growth
agenda: Jo Toolan, Head of Client Management; Jay Payne, IT Service
and Operations Director; Chris Paul, Head of Corporate Finance; and
Steve O’Neill, Corporate Aairs and Marketing Director.
Board Evaluation
Following last year’s triennial external evaluation, we have this year
conducted an internal evaluation of the Board, its Committees and
individual Directors, which confirmed that our Board and Committees
continue to operate eectively. More information on the process and
results of that evaluation can be found on page 71.
Ofgem
On 23 November 2021, Ofgem, the energy regulator, published a ‘Notice
of Decision to Accept Binding Commitments’, regarding commitments
proposed by PayPoint to Ofgem to address the concerns raised in
Ofgem’s Statement of Objections received on 29 September 2020.
Ofgem accepted those commitments as a resolution of its concerns.
PayPoint has been implementing the commitments in a timetable agreed
with Ofgem, including a £12.5 million donation to Ofgem’s Energy Industry
Voluntary Redress Scheme (currently administered on Ofgem’s behalf by
the Energy Saving Trust).
Annual General Meeting
The Company’s Annual General Meeting will be held at PayPoint’s
registered oce on 20 July 2022 where you will have the opportunity
to meet the Board and members of the Executive Board. The matters to
be approved by shareholders are set out in our Notice of Annual General
Meeting which will be mailed to shareholders towards the end of June.
If you wish to discuss any aspect of our governance arrangements,
please contact me via our Company Secretary, Brian McLelland, via
email at brianmclelland@paypoint.com.
This has been another
positive year for the
PayPoint Group as the
business has built on the
transformation and
strategic step change
delivered last year.
Giles Kerr
Chairman
17 June 2022
Financial statements Shareholder information 71Strategic report Governance
In accordance with the Code, the Board and its Committees undertake an external evaluation every three years, with internal evaluations being
undertaken in the intervening years. The last such external evaluation was carried out in 2021.
2022 internal evaluation process and output
The Chairman, supported by the Company Secretary, circulated a questionnaire to each Director for their views on the performance of the Board
and its Committees which covered: delivery and implementation of strategic plan; integration of newly acquired businesses; approach to ESG;
performance of management; and the composition, quality and processes of the Board and its Committees.
The Chairman presented the findings of the evaluation at the February 2022 Board meeting and the following actions were agreed:
1) Presentation
of risk:
2) Engagement with
stakeholders:
3) Extend the employee
forum for the NEDs:
4) ESG: 5) Deep dives:
The work on risk was
felt to be good with a
high level of diligence
but it was considered
that the presentations
to the Board could be
snappier with greater
focus on four or five
key issues which could
be pre-agreed with the
Audit Committee Chair/
Finance Director prior to
the meeting.
The Chairman acknowledged it was important
to engage with stakeholders.
We have made eorts to strengthen our retailer
partner relationships and drive adoption of new
opportunities to earn, including regular ‘cash
and carry’ days, more direct communications
and more regular meetings with the key trade
associations, including the Association of
Convenience Stores (ACS), the Scottish
Grocers’ Federation (SGF) and the National
Federation of Retail Newsagents (NFRN).
Additionally, the Chairman of the Board and the
CEO engaged with key shareholders throughout
the year and reported to the Board on issues
discussed. The Remuneration Committee Chair
also engages with shareholders on matters
pertaining to Board and Executive pay.
It was thought beneficial
for the NEDs to attend
some employee fora
to engage one-to-one.
Gill Barr continued
her attendance of the
quarterly meetings as she
has done for the last three
years and invitations have
been extended to other
NEDs to attend in future.
Rakesh Sharma attended a
meeting of the employee
forum last year to
describe the remuneration
arrangements.
Further actions on ESG
reporting and monitoring
would continue in
2022/23 including
monitoring initiatives in
equality, diversity and
inclusion, the gender
pay gap, the structure
of rewards, recruitment
and retention, corporate
actions on culture and
engagement, monitoring
and assessing climate
risk and issues relating
to integration of the
businesses acquired
during the financial year.
It was agreed that
deep dives of various
business sectors
should occur. A
deep dive into the
Housing Associations
sector was held at
the November 2021
Board meeting and
for the Charities and
Newspapers sectors
reviews were held
at the March 2022
Board meeting.
Performance evaluation of the PayPoint Board and its Committees
2021 external evaluation process and output
In 2020, PayPoint engaged Lintstock to facilitate an external evaluation.
Lintstock is an advisory firm that specialises in Board reviews and
provides no other services to the Company.
The first stage of the review involved Lintstock engaging with the
Chairman and Company Secretary to set the context for the evaluation
and to tailor the survey content to the specific circumstances of PayPoint.
All Board members were then invited to complete surveys addressing
the performance of the Board, each of the Board Committees and the
Chairman. The anonymity of the respondents was ensured throughout
the process in order to promote open and candid feedback.
The exercise was designed to cover core aspects of Board
performance, and had a particular focus on the following themes:
• the quality of the relationship developing between the Board and
the new Chief Executive, and the top priorities for the new Chief
Executive over the coming year
• the adjustment in the Board’s focus in response to Covid-19, and the
eectiveness of meetings conducted remotely during the pandemic
• the level of the Board’s focus on risk, including how well the
organisation’s risk management arrangements have coped with the
challenges associated with Covid-19
• the size of the Board, the range of skills and the level of diversity
amongst members, as well as key changes that should be made to
the Board’s composition over the coming years
• the knowledge of the views of employees, the monitoring of the
culture throughout PayPoint, and the quality of insight that the
Board gains through the employee forum
• the Board’s understanding of other key stakeholder groups,
including our people, shareholders, convenience retailer partners,
SMEs, consumers and clients
• the clarity and achievability of PayPoint’s strategic plan, and
the Board’s understanding of the organisation’s strengths and
weaknesses relative to key competitors
The observations and recommendations resulting from the review were
considered at subsequent Board and Committee meetings.
The following areas were proposed and agreed for focus over the next
12 months:
Area Board discussion Agreed action
Strategy The integration of
the newly acquired
businesses was key.
The Board would continue to be
provided with regular updates on
these integrations. This occurred
throughout the year.
Stakeholders The Board would
benefit from
greater exposure to
client and retailer
engagement.
Management would provide a
detailed review of the ongoing
relationships with and experiences
of these stakeholders to include site
visits as appropriate. Board members
attended client and retailer site visits
regularly.
Diversity The Board
acknowledged that
the gender balance
within the Board
had fallen from 33%
to 28.5%.
The Board agreed to appoint an
additional female Non-Executive
Director to the Board in Q4 FY22-23.
Once appointed the gender balance
would represent 37.5%.
The following actions were agreed in respect of the evaluations of each
of the Committees of the Board:
Committee Discussion Agreed action
Audit The Committee
agreed that training
on specific areas
would be of benefit
to the members.
External providers would be
contacted and training arranged.
The MD of the Payment Systems
Regulator was to be contacted and
training arranged. Cyber security risk
was presented.
Nomination The Committee was
working eectively.
No specific actions required.
The Committee was fit for purpose.
Remuneration Keeping abreast of
the views of investors
and proxy advisors
was essential.
The remuneration consultants would
provide an update to the Committee.
This occurred at the March 2022
Committee meeting.
PayPoint Plc Annual Report 202272
Board of Directors
Nick Wiles
Chief Executive
Giles Kerr
(ACA)
Chairman
Gill Barr
Independent Non-Executive
Director
Alan Dale
(ACA)
Finance Director
Appointed to the Board in November 2015 as an Independent
Non-Executive Director and Chairman of the Audit Committee.
Assumed the role of Senior Independent Director in May 2017
and became Chairman in May 2020.
Career
Giles’ former roles include chief financial ocer at the University of Oxford,
Group finance director at Amersham plc and Arthur Andersen & Co and
non-executive director roles at BTG plc, Victrex plc, Elan Corporation Inc
and Adaptimmune Therapeutics plc.
Board skills and experience
Corporate finance, accounting, risk management.
Other principal roles
Non-executive director of Senior plc, Abcam plc and Arix Bioscience plc.
Committee memberships
Chairman of the Nomination Committee and a member of the
Remuneration Committee.
Appointed to the Board as Finance Director in November
2020 having acted as Interim Finance Director since July 2020.
He joined PayPoint in August 2017 as Head of UK Finance.
Career
Alan is a chartered accountant with over 30 years’ experience in the financial
services sector. Prior to joining PayPoint he held a number of senior finance
roles with financial institutions including GE Capital.
Board skills and experience
Corporate finance, accounting, risk management.
Other principal roles
None.
Committee memberships
Member of the Market Disclosure Committee, the Cyber Security &
Information Technology Sub-Committee and ESG Working Group.
Appointed to the Board in October 2009, Chairman in May 2015,
Executive Chairman in December 2019 and Chief Executive in
May 2020.
Career
Nick retired as chairman of Nomura in 2012 aer more than 25 years in
investment management and banking. His career started as an analyst and
fund manager at Mercury Asset Management before moving to Cazenove,
where he spent the majority of his career and was a partner prior to
incorporation and becoming a vice chairman of JP Morgan Cazenove. He was
previously a non-executive director of Strutt & Parker and Picton Property
Income Ltd and senior independent director at Primary Health Properties plc,
prior to its merger with MedXplc.
Board skills and experience
Investment banking, corporate finance, equity markets, investor sentiment
and relations.
Other principal roles
Director Snappy Shopper.
Committee memberships
Member of the Market Disclosure Committee.
Appointed to the Board in June 2015.
Career
Gill has held senior strategy, marketing and business development positions
at the Co-operative Group, John Lewis, Kingfisher, Mastercard and KPMG.
She was previously a non-executive director of Morgan Sindall plc and
McCarthy & Stone plc.
Board skills and experience
Gill brings her extensive experience as a retailer and oers a strategic
perspective on drivers of growth. As a Non-Executive Director she is
able to provide remuneration expertise owing to her chairmanship of the
remuneration committees of the companies detailed below.
Other principal roles
Senior independent director of N Brown Group plc and non-executive
director of Wincanton plc.
Committee memberships
Member of the Audit, Nomination and Remuneration Committees.
Board representative for the employee forum.
Financial statements Shareholder information 73Strategic report Governance
Female 29%
Male 71%
Gender
Board experience
Cyber security and IT
29%
Finance
57%
Operational
29%
Risk management
57%
Ben Wishart
Independent Non-Executive
Director
Rakesh Sharma
OBE FREng CPhys MInstP
Senior Independent Director
Rosie Shapland
(FCA)
Independent Non-Executive
Director
Appointed to the Board in May 2017 becoming Senior Independent
Director in May 2020.
Career
Rakesh started his career as an electronic design engineer at Marconi in 1983
before moving to Dowty as chief engineer in 1989. He was chief executive of
Ultra Electronics Holdings Plc (‘Ultra’) having previously held several senior and
management positions within Ultra and has managed businesses and divisions across
the full range of that company’s wide portfolio including in the B2B fintech sector.
Board skills and experience
Rakesh brings executive management and cultural change experience to the
Board. Additionally, his long association in the global security sector brings
skills in cyber security and information technology. Rakesh also supports the
younger generation though his pro bono activities for a multi academy trust
and Riverbank Academy, a special educational needs school. In addition,
Rakesh mentors young start-ups and is a motivational speaker.
Other principal roles
Chairman of Kromek Group plc.
Committee memberships
Chairman of the Remuneration Committee and a member of the Audit, Nomination
Committees and Cyber Security & Information Technology Sub-Committee.
Appointed to the Board in October 2020.
Career
Rosie is a chartered accountant and was a former audit partner at PwC.
She has over 30 years of audit experience across multiple sectors.
Board skills and experience
Rosie brings extensive knowledge of accounting, financial reporting,
risk management and governance.
Other principal roles
Non-executive director and audit committee chair of Foxtons Group plc and
Workspace Group Plc.
Committee memberships
Chair of the Audit Committee and a member of the Remuneration and
Nomination Committees.
Appointed to the Board in November 2019.
Career
Ben has previously served as chief information ocer (C.I.O) of Morrisons plc
and Whitbread plc and has held various senior information technology roles
at Tesco plc. He is currently global CIO of Ahold Delhaize.
Board skills and experience
Ben brings a deep understanding of technology to the Board. He has
proven leadership and governance skills on technology matters within a
global business.
Other principal roles
Global CIO Ahold Delhaize.
Committee memberships
Member of the Audit, Nomination and Remuneration Committees. Chair of
the Cyber Security & Information Technology Sub-Committee.
Board diversity
PayPoint Plc Annual Report 202274
Mark Latham
Banking Services Director
Anna Holness
Sales Director
Steve 0’Neill
Corporate Aairs and
Marketing Director
Chris Paul
Head of Corporate
Finance
Jay Payne
IT Service & Operations Director
Jo Toolan
Head of Client
Management
Mark joined the Executive Board in
February 2021 following the acquisition
of Handepay and Merchant Rentals
and was appointed Banking Services
Director in October 2021 in recognition
of our growing banking proposition
including ATMs and Counter Cash and
he retains his responsibility for our
cards business. Prior to this, Mark was
chief commercial ocer at Handepay
from 2013 where he developed the
market-leading customer proposition
and led the marketing and customer
management teams.
Mark has previously held international
product management positions with
global payment processor Elavon,
where he was responsible for mobile
payment, currency conversion and
gi card solutions. Mark began his
career in the payment industry in 2002,
supporting major acquiring and retail
customers for Ingenico.
Anna joined PayPoint as Sales Director in
January 2022 with responsibility for new
business generation for all our products
and services and also relationship
management across the current
PayPoint estate. Prior to joining PayPoint,
Anna worked for Worldpay from FIS,
where as VP of SME sales Anna was
responsible for new business generation
across SME and mid market sectors.
Before moving into Payments, Anna spent
over 20 years in the telecommunications
sector, predominantly at Telefonica/
O2 where Anna held a number of senior
positions across both B2B and B2C
(Retail), including head of franchising,
head of stores, head of global sales.
Anna has a broad experience; from
leading stores teams of up to 800
in retail and managing relationships
with some of the world’s largest
organisations across multiple global
locations, from her time in global sales.
Steve joined PayPoint originally in
2014, and then again in 2020 as
Corporate Aairs and Marketing
Director, leading our marketing, PR and
investor relations eorts for the Group.
He has spent over 20 years in
marketing and PR leadership roles
for large consumer organisations in
the UK and Europe, across the retail,
telecommunications and financial
services sectors. Aer starting his
career at the John Lewis Partnership
on their graduate scheme, Steve
has worked for Orange, Carphone
Warehouse, HSBC and Amigo.
Steve is also a member of the ESG
Working Group.
Chris joined PayPoint in 2016 and
is Head of Corporate Development,
leading the organisation’s growth and
development activities and overseeing
treasury strategy.
Prior to joining PayPoint, Chris
worked at LMAX as Head of Financial
Reporting, where he was responsible
for developing the finance function
following its MBO from Betfair.
He is a qualified accountant with 20
years’ experience in senior finance
positions in financial services, telecoms
and gaming sectors, including TalkTalk
and Tsogo Sun Gaming.
Jay joined PayPoint in January 2019 as
IT Service and Operations Director and
leads the delivery of IT services across
the PayPoint group.
With over 25 years’ experience, Jay
has been responsible for delivery
and design of services supporting
card issuing, merchant acquiring and
specialist subscription billing for clients
across all industries.
Previous positions have included
responsibility for the delivery of
payment optimisation consultancy for
clients in publishing and broadcasting
with a focus on subscription
churn reduction.
Prior to commencing his career in
payments, Jay spent eight years
serving with the Royal Navy.
Jo joined PayPoint in 2011 and is
currently Head of Client Management,
responsible for the strategic
management of major accounts
and expanding our digital payments
solutions into new and existing clients,
including BBC, Paysafe, Monzo and the
major Utility providers.
Prior to PayPoint, she supported
bluechip organisations with their CSR
programmes in schools, including
developing programmes for BT and
Grant Thornton, following her early
career in the education sector.
Executive Board
Nick Wiles
Chief Executive
Alan Dale
Finance Director
Simon Coles
Chief Technology Ocer
Danny Vant
Client Services Director
Katy Wilde
HR Director
Ben Ford
Customer Experience Director
Tanya Murphy
General Counsel and
Head of Compliance
See Board of Directors for biography. See Board of Directors for biography. Simon joined the Executive Board in
April 2021. He was appointed as Chief
Technology Ocer in May 2017, having
previously managed the IT team at
PayPoint’s Mobile and Online subsidiary
prior to its sale.
Simon has worked in both the
payments and retail wealth
management sectors for over 30 years
as an engineer, manager, consultant
and IT executive. He has launched and
managed card processing systems
for several banks and consulted on
payments in the UK, USA and Australia.
Prior to joining PayPoint, Simon was
a management consultant for several
years and has delivered significant IT
programmes for several banks, wealth
managers and insurance firms.
Danny joined the business in 2019
and was appointed to his current role
of Client Services Director in 2020,
leading the commercial and strategic
development of the client portfolio
and managing relationships with the
multiple retailers.
Before joining PayPoint Danny worked
for Mitie plc in the FM sector managing
a number of businesses, predominantly
within the security sector. Danny also
worked in consultancy for Newton
Europe specialising in process
eciency improvements across a
diverse range of sectors, including
healthcare and defence.
Prior to this Danny started his career
as a graduate in the logistics industry,
spending six years working in the parcel
carrier industry for Target Express.
Katy joined PayPoint as HR Director
in 2012 with responsibility for the
development and implementation
of our people agenda.
Prior to joining PayPoint, Katy worked
for RSA Insurance Group where she
held a number of senior business
partnering roles in the UK and latterly in
the emerging markets business where
she was responsible for ensuring the
delivery of the HR agenda across 22
countries in Central and Eastern Europe,
Asia, the Middle East and Latin America.
Prior to that Katy spent seven years
at General Electric where she held HR
roles in both its consumer finance and
insurance businesses. Katy has a degree
in International Business and Modern
Languages from Aston University and
is a Chartered Member of the CIPD.
Katy is a member of the ESG Working
Group and chairs the Employee Forum.
Ben Ford joined the Executive Board
in July 2020 as Retail Services
Director and transitioned to the role
of Customer Experience Director in
October 2021 following the acquisition
of Handepay and Merchant Rentals.
Ben is responsible for ensuring that
our proposition is underpinned by
the delivery of excellent customer
service to our retailers, merchants
and consumers.
Ben was previously at Addison Lee
where he was head of Global Customer
Experience and Operations responsible
for global service delivery of customers,
clients, drivers, and fleet. Prior to joining
Addison Lee Ben worked in similar roles
for companies including Premier Inn,
Danone, Joules and Boden.
Tanya joined PayPoint as General
Counsel and Head of Compliance in
September 2020 and leads PayPoint’s
Legal and Compliance teams advising
all companies across the PayPoint
Group on legal and regulatory matters
relating to their businesses.
Prior to joining PayPoint, Tanya
worked at Zurich Insurance for 11 years
where she held a number of roles
including Head of the UK Corporate
& Commercial Legal team.
Tanya qualified as a solicitor in 1996
at the international law firm Lovell
White Durrant, now Hogan Lovells LLP,
where she worked as a solicitor for
12 years specialising in corporate and
commercial law across a number of
business sectors.
Financial statements Shareholder information 75Strategic report Governance
Mark Latham
Banking Services Director
Anna Holness
Sales Director
Steve 0’Neill
Corporate Aairs and
Marketing Director
Chris Paul
Head of Corporate
Finance
Jay Payne
IT Service & Operations Director
Jo Toolan
Head of Client
Management
Mark joined the Executive Board in
February 2021 following the acquisition
of Handepay and Merchant Rentals
and was appointed Banking Services
Director in October 2021 in recognition
of our growing banking proposition
including ATMs and Counter Cash and
he retains his responsibility for our
cards business. Prior to this, Mark was
chief commercial ocer at Handepay
from 2013 where he developed the
market-leading customer proposition
and led the marketing and customer
management teams.
Mark has previously held international
product management positions with
global payment processor Elavon,
where he was responsible for mobile
payment, currency conversion and
gi card solutions. Mark began his
career in the payment industry in 2002,
supporting major acquiring and retail
customers for Ingenico.
Anna joined PayPoint as Sales Director in
January 2022 with responsibility for new
business generation for all our products
and services and also relationship
management across the current
PayPoint estate. Prior to joining PayPoint,
Anna worked for Worldpay from FIS,
where as VP of SME sales Anna was
responsible for new business generation
across SME and mid market sectors.
Before moving into Payments, Anna spent
over 20 years in the telecommunications
sector, predominantly at Telefonica/
O2 where Anna held a number of senior
positions across both B2B and B2C
(Retail), including head of franchising,
head of stores, head of global sales.
Anna has a broad experience; from
leading stores teams of up to 800
in retail and managing relationships
with some of the world’s largest
organisations across multiple global
locations, from her time in global sales.
Steve joined PayPoint originally in
2014, and then again in 2020 as
Corporate Aairs and Marketing
Director, leading our marketing, PR and
investor relations eorts for the Group.
He has spent over 20 years in
marketing and PR leadership roles
for large consumer organisations in
the UK and Europe, across the retail,
telecommunications and financial
services sectors. Aer starting his
career at the John Lewis Partnership
on their graduate scheme, Steve
has worked for Orange, Carphone
Warehouse, HSBC and Amigo.
Steve is also a member of the ESG
Working Group.
Chris joined PayPoint in 2016 and
is Head of Corporate Development,
leading the organisation’s growth and
development activities and overseeing
treasury strategy.
Prior to joining PayPoint, Chris
worked at LMAX as Head of Financial
Reporting, where he was responsible
for developing the finance function
following its MBO from Betfair.
He is a qualified accountant with 20
years’ experience in senior finance
positions in financial services, telecoms
and gaming sectors, including TalkTalk
and Tsogo Sun Gaming.
Jay joined PayPoint in January 2019 as
IT Service and Operations Director and
leads the delivery of IT services across
the PayPoint group.
With over 25 years’ experience, Jay
has been responsible for delivery
and design of services supporting
card issuing, merchant acquiring and
specialist subscription billing for clients
across all industries.
Previous positions have included
responsibility for the delivery of
payment optimisation consultancy for
clients in publishing and broadcasting
with a focus on subscription
churn reduction.
Prior to commencing his career in
payments, Jay spent eight years
serving with the Royal Navy.
Jo joined PayPoint in 2011 and is
currently Head of Client Management,
responsible for the strategic
management of major accounts
and expanding our digital payments
solutions into new and existing clients,
including BBC, Paysafe, Monzo and the
major Utility providers.
Prior to PayPoint, she supported
bluechip organisations with their CSR
programmes in schools, including
developing programmes for BT and
Grant Thornton, following her early
career in the education sector.
Nick Wiles
Chief Executive
Alan Dale
Finance Director
Simon Coles
Chief Technology Ocer
Danny Vant
Client Services Director
Katy Wilde
HR Director
Ben Ford
Customer Experience Director
Tanya Murphy
General Counsel and
Head of Compliance
See Board of Directors for biography. See Board of Directors for biography. Simon joined the Executive Board in
April 2021. He was appointed as Chief
Technology Ocer in May 2017, having
previously managed the IT team at
PayPoint’s Mobile and Online subsidiary
prior to its sale.
Simon has worked in both the
payments and retail wealth
management sectors for over 30 years
as an engineer, manager, consultant
and IT executive. He has launched and
managed card processing systems
for several banks and consulted on
payments in the UK, USA and Australia.
Prior to joining PayPoint, Simon was
a management consultant for several
years and has delivered significant IT
programmes for several banks, wealth
managers and insurance firms.
Danny joined the business in 2019
and was appointed to his current role
of Client Services Director in 2020,
leading the commercial and strategic
development of the client portfolio
and managing relationships with the
multiple retailers.
Before joining PayPoint Danny worked
for Mitie plc in the FM sector managing
a number of businesses, predominantly
within the security sector. Danny also
worked in consultancy for Newton
Europe specialising in process
eciency improvements across a
diverse range of sectors, including
healthcare and defence.
Prior to this Danny started his career
as a graduate in the logistics industry,
spending six years working in the parcel
carrier industry for Target Express.
Katy joined PayPoint as HR Director
in 2012 with responsibility for the
development and implementation
of our people agenda.
Prior to joining PayPoint, Katy worked
for RSA Insurance Group where she
held a number of senior business
partnering roles in the UK and latterly in
the emerging markets business where
she was responsible for ensuring the
delivery of the HR agenda across 22
countries in Central and Eastern Europe,
Asia, the Middle East and Latin America.
Prior to that Katy spent seven years
at General Electric where she held HR
roles in both its consumer finance and
insurance businesses. Katy has a degree
in International Business and Modern
Languages from Aston University and
is a Chartered Member of the CIPD.
Katy is a member of the ESG Working
Group and chairs the Employee Forum.
Ben Ford joined the Executive Board
in July 2020 as Retail Services
Director and transitioned to the role
of Customer Experience Director in
October 2021 following the acquisition
of Handepay and Merchant Rentals.
Ben is responsible for ensuring that
our proposition is underpinned by
the delivery of excellent customer
service to our retailers, merchants
and consumers.
Ben was previously at Addison Lee
where he was head of Global Customer
Experience and Operations responsible
for global service delivery of customers,
clients, drivers, and fleet. Prior to joining
Addison Lee Ben worked in similar roles
for companies including Premier Inn,
Danone, Joules and Boden.
Tanya joined PayPoint as General
Counsel and Head of Compliance in
September 2020 and leads PayPoint’s
Legal and Compliance teams advising
all companies across the PayPoint
Group on legal and regulatory matters
relating to their businesses.
Prior to joining PayPoint, Tanya
worked at Zurich Insurance for 11 years
where she held a number of roles
including Head of the UK Corporate
& Commercial Legal team.
Tanya qualified as a solicitor in 1996
at the international law firm Lovell
White Durrant, now Hogan Lovells LLP,
where she worked as a solicitor for
12 years specialising in corporate and
commercial law across a number of
business sectors.
PayPoint Plc Annual Report 202276
Corporate Governance Report
Board composition
At the date of this report, the Board comprises seven Directors: the
Chairman; the Chief Executive; the Finance Director; the Senior
Independent Director; and three Independent Non-Executive Directors.
The size of our Board allows time for full discussion and debate of
matters and enables all Directors’ views to be heard. The Non-Executive
Directors have a broad range of skills and experience bringing balance
and diversity to the Board. The biographies, skills and competences of
each of our Directors are set out on pages 72 to 73.
The composition of the Board is subject to ongoing review and a key
consideration for any new Board appointment will be the additional
breadth a new Director could bring.
The terms and conditions of appointment of the Non-Executive Directors
and the Executive Directors’ service contracts are available for inspection
at the Company’s registered oce during normal business hours and at
the annual general meeting. In accordance with the provisions of the Code
all Directors submit themselves for election or reelection at each annual
general meeting. The Board’s recommendations in respect of the election/
re-election of each Director can be found in the Notice of Annual General
Meeting on page 156.
The Directors have disclosed all their significant external commitments
which the Board has considered and the Board is satisfied that all the
Directors are able to allocate sucient time to the Company to discharge
their responsibilities eectively.
Under 12 months 0
1 to 3 years 3
4 years+ 4
Tenure of Board
Independence statement
The Board considers its Non-Executive Directors to be independent.
The Board has determined that each is independent in character and
judgement, and is free from any business or other relationship which
could aect the exercise of his/her judgement.
The Board considers that throughout the year under review it has
complied with the provisions of the UK Corporate Governance Code
(the ‘Code’) as published by the Financial Reporting Council in
July 2018.
This report describes how the provisions of the Code have been applied
by the Company.
Membership and attendance at scheduled Board meetings held
during the year
The table below shows Directors’ attendance of the scheduled Board
meetings held during the year.
Current members Role
Attendance at
scheduled meetings
during the year
Eligible to
attend Attended
Executive Directors
Nick Wiles Chief Executive 7 7
Alan Dale Finance Director 7 7
Non-Executive Directors
Giles Kerr Chairman 7 7
Gill Barr Independent
Non-Executive Director 7 6
1
Rosie Shapland Independent
Non-Executive Director 7 7
Rakesh Sharma Senior Independent
Director 7 7
Ben Wishart Independent
Non-Executive Director 7 7
1. Gill Barr was unable to attend the meeting held in March 2022 due to a family
bereavement.
In addition to the seven scheduled meetings, the Board met a further 12
times during the year under review to give consideration to and approval
of adhoc matters in accordance with the schedule of matters reserved
to the Board.
Corporate governance framework
The Board provides eective leadership to the Group within a wider
corporate governance framework with clearly defined roles and
responsibilities as illustrated in the chart opposite. The governance
framework supports the rigorous challenge by the Board of strategy,
performance and accountability, which encourages the proper
implementation of the strategic aims of the Company. This results in the
growth of the business and protection of the interests of shareholders
and wider stakeholders.
Financial statements Shareholder information 77Strategic report Governance
Corporate
Governance
Framework
The Board
The Board is collectively responsible for the long-term success of
the Group and is accountable to the shareholders of the Group. The
Board provides eective leadership by setting the strategic aims of
the Group and overseeing the ecient implementation of these aims
in order to achieve sustainable growth of the business. It monitors
operational and financial performance against agreed goals and
objectives whilst ensuring that the appropriate controls and systems
exist to manage risk. The Board ensures that there are the necessary
financial resources and people with the necessary skills to achieve
the strategic goals the Board has set. The Nomination, Audit and
Remuneration Committees support the Board in carrying out its
role, which is formally set out in ‘the Matters Reserved to the Board’,
full details of which can be found on the Company’s website
www.corporate.paypoint.com. The details of the roles of each of
those Committees can be found on pages 82 to 101. In addition, the
Executive Board carries out strategic objectives delegated to it by
the Board and the roles of each member of the Executive Board are
set out on pages 74 to 75.
Audit Committee
The key role of this Committee
is to ensure the integrity of the
Company’s financial reporting
to shareholders. Read more on
pages 84 to 89.
Cyber Security & Information
Technology Sub-Committee
This is a sub-committee of the
Audit Committee. The role of
the Committee is to oversee
Group cyber-security and
IT matters.
Regulated entities within the Group
The Group has five regulated entities as detailed below. The Managing Directors of
each of these regulated entities report to the Chief Executive:
• PayPoint Payment Services Limited
1
• i-movo Limited
2
• Handepay Limited
3
• Merchant Rentals Limited
4
• RSM 2000 Limited⁵
1. This an authorised payment institution regulated by the FCA with permission to provide
regulated payment services (including certain CashOut services) under the Payment Services
Regulations 2017.
2. This is a small payment institution regulated by the FCA with money remittance permissions
under the Payment Services Regulations 2017.
3. This is an authorised Consumer Credit (Consumer Hire) company regulated by the FCA with
credit broking permissions under the Consumer Credit Act. This is a Limited Permission
Consumer Credit firm.
4. This is an authorised Consumer Credit (Consumer Hire) company regulated by the FCA with
permission to enter into Regulated Consumer Hire Agreements as owner and to exercise
or have the right to exercise the owner’s rights and duties under regulated Consumer Hire
Agreement permissions. This is a Limited Permission Consumer Credit firm.
5. This is an authorised Consumer Credit company regulated by the FCA with permissions for
credit broking, debt collecting, debt administration, entering into Regulated Consumer Hire
Agreements as owner and exercising or having the right to exercise the owner’s rights and
duties under a regulated Consumer Hire Agreement. This is a Full Permission Consumer Credit
Firm and also an authorised payment institution regulated by the FCA with permission to
provide regulated payment services under the Payment Services Regulations 2017.
ESG Working Group
Concerning ESG the Board of Directors retains oversight
on all issues of ESG including setting strategy and
meaningful targets, reporting on TCFD and engagement
with key stakeholders.
The Executive Board has overall day to day control on
ESG and hears progress reports from the ESG Working
Group (a working party of the Executive Board
comprising the Finance Director, the HR Director, the
Head of Risk and Internal Audit, the Corporate Aairs
and Marketing Director and the Company Secretary to
progress ESG matters and TCFD Reporting through
regular meetings. The Group met throughout 2021-22
and progressed various aspects on TCFD and ESG that
were considered and approved by the Executive Board
and Plc Board. The ESG Working Group monitors
performance against targets throughout the year and
reports performance to the Executive Board and Board.
Executive Board
The Executive Board is led by the Chief Executive and comprises: the Finance Director, HR Director, Client
Services Director, Customer Experience Director, Banking Services Director, General Counsel and Head of
Compliance; Chief Technology Ocer; Sales Director; IT Service & Operations Director; Head of Client
Management; Corporate Aairs & Marketing Director and Head of Corporate Finance. The Executive Board
is responsible for the day-to-day operational management of the Group and supports the Chief Executive
in implementing the Group’s strategic aims. The Board oversees the activities of the Executive Board.
Nomination Committee
The Nomination Committee is
responsible for reviewing the
composition of the Board to
ensure its members have the
right skills and experience to
implement the strategy of the
Company. Read more on pages
82 to 83.
Remuneration Committee
The Committee’s key
responsibility is to determine
and apply the Remuneration
Policy to ensure it promotes
the delivery of the Group’s
strategy. Read more on pages
90 to 101.
Market Disclosure Committee
This Committee oversees the
disclosure of information by
the Company to ensure that
it meets its obligations under
the Market Abuse Regulations.
Its members are the Chief
Executive, Finance Director,
Company Secretary and the
General Counsel and Head
of Compliance.
PayPoint Plc Annual Report 202278
Conflicts of interest
Under the Articles of Association, the Board has authority to approve
any conflicts or potential conflicts of interest that are declared by
individual Directors prior to and during appointment. Conditions may be
attached to such approvals and Directors will generally not be entitled to
participate in discussions or vote on matters in which they have or may
have a conflict of interest.
A register of conflicts of interest is maintained by the Company
Secretary. No material conflicts were reported by the Directors during
the year.
Meetings
The Board and its Committees meet regularly throughout the year with
meetings scheduled around key dates in the Company’s corporate
calendar, and when necessary to consider key corporate transactions
or events that may arise.
Two strategy sessions are also held each year, the first in September
followed by a session in February. The Board is updated on progress
against the strategic plan and any new initiatives to grow and develop
the PayPoint Group.
The Chairman sets the agenda for the Board and ensures that adequate
time is available for discussion of all agenda items. He ensures informed
decisions are reached in an eective manner by facilitating open
discussion and debate of agenda items by Board members. The Non-
Executive Directors meet ahead of each Board meeting to discuss the
business of the meeting and any related issues. Consultations with
management and with external advisors are held when necessary to aid
the Board’s decision-making process. The table opposite shows the key
areas of Board activity during the year ended 31 March 2022.
Induction
On joining the Board, all new Directors receive a full, formal and tailored
induction. One-to-one meetings are held with each member of the
Executive Board and other senior management in the business and
external advisors as appropriate. The induction includes the provision of
relevant current and historical information about the Company together
with applicable business policies. The Company Secretary assists
in the induction of new Directors and undertakes a review with new
Directors post induction to consider any initiatives which would improve
the process.
Training and support
Directors are provided with clear and accurate information on matters
to be considered at the Board and its Committee meetings. This
information is provided in a timely manner to ensure an appropriate
level of review by each Director ahead of the meetings.
In the course of the year, the Board is briefed on any significant changes
in the law, regulations, governance, best practice or developments
within PayPoint which aect their roles both on the Board and on the
Board Committees. Experts and advisors are brought in as necessary
to present to the Board or its Committees on technical subject matters.
The Non-Executive Directors are provided with schedules of relevant
training by external providers which they are encouraged to attend at
their convenience.
The Directors have access to the Company Secretary as well as
members of the Executive Board and senior management, and they can
also seek independent professional advice if this is deemed necessary
for the proper performance of their duties.
Insurance
The Company maintains appropriate insurance cover in respect of legal
action against the Directors.
Corporate Governance Report continued
Financial statements Shareholder information 79Strategic report Governance
Strategy and business review
• two scheduled strategy sessions followed by progress reviews throughout the year
• regular business and performance updates across all divisions
• further to Covid-19, implementing an operating model to minimise disruption of service and support to clients and retailer network whilst
ensuring the safety of all employees
• investment in Snappy Shopper and Optus Homes
Internal control and risk management
• considered the continuing impact of Covid-19 for the Group
• assessed the IT infrastructure and cyber risks generally and specifically
• assessed the eectiveness of the internal controls and risk management process within the Group
• approved the renewal of insurance policies for the Group
• carried out a robust assessment of the nature and extent of emerging and principal risks and uncertainties facing the Group and how these
risks could aect the business, financial condition or operations of the Group
Financial
• approved half-year and full-year financial statements and quarterly trading updates
• approved dividends paid to shareholders during the financial year ended 31 March 2022
• reviewed management presentations to analysts for the full and half-year results
• considered and approved the plan for the financial year ending 31 March 2023
• reviewed Group forecasts and scrutinised the built-in risks and opportunities
• received monthly management accounts
• received management reports
Governance
• approved the Notice of Annual General Meeting
• reviewed and approved the Board policy on Diversity and Inclusion
• reviewed investor feedback from the full and half-year roadshows
• approved the Modern Slavery Statement
• approved scope 1, 2 & 3 GHG reduction targets
• approved Net zero targets
• considered the feedback received from the employee forum when making decisions regarding working patterns, engagement surveys
and ESG
• carried out an internal performance evaluation of the Board and its Committees
• approved revisions to the terms of reference of the Audit, Remuneration and Nomination Committees
• approved revisions to various policies and the Board’s delegated authority in accordance with the Matters Reserved for the Board
• considered shareholder analysis summary reports
People
• reviewed the Group health and safety reports
• received regular updates on the employee forum from Gill Barr, Non-Executive Director, the appointed Board representative for the
employee forum
• reviewed the PayPoint Gender Pay Gap report and approved the commitments and actions therein, prior to publication of the report
• continued the monitoring of working practices for all our people to safeguard employees in light of Covid-19
• discussed the composition of the Executive Board and reviewed succession planning
PayPoint Plc Annual Report 202280
Division of roles and responsibilities
There is clear and eective division of roles and responsibilities of the Board as shown below:
Board leadership
Chairman – Giles Kerr
Giles Kerr is responsible for the eective leadership, operation and governance of the Board and its Committees. He ensures that the Board
as a whole plays a full and constructive part in the development and determination of the Group’s strategy and overall commercial objectives.
His current responsibilities include:
• setting the Board’s agenda and ensuring the Board receives accurate, timely and clear information on all matters reserved to its decision and
on the Group’s performance and operations
• ensuring compliance with the Board’s approved procedures
• arranging informal meetings of the Directors, including meetings of the Non-Executive Directors at which the Executive Directors are not
present, as required to ensure that sucient time and consideration are given to complex, contentious or sensitive issues
• chairing the Nomination Committee, and, in that role, initiating change and succession planning to retain and build an eective and
complementary Board, and to facilitate the appointment of eective and suitable members and Chairs of Board Committees
• ensuring eective communication with shareholders led by the Chief Executive and Finance Director, and ensuring that members of the
Board develop an understanding of the views of major investors
• meeting a number of key investors
• promoting the highest standards of integrity, probity and corporate governance at Board level and throughout the Group
Running the business
Chief Executive – Nick Wiles
Nick Wiles is responsible for running the Group’s business and for
proposing and developing the Group’s strategy and overall commercial
objectives. He leads the Executive Board, the responsibilities of which
are set out on page 77. His other main responsibilities include:
• providing input to the Board’s agenda and ensuring that the
Executive Board gives appropriate priority to providing timely
reports to the Board containing clear and accurate information
• implementing the agreed strategy with the support of the
Executive Board
• ensuring that the Chairman is alerted to forthcoming complex,
contentious or sensitive issues aecting the Group
• providing information and advice to the Chairman in respect of
succession planning for membership of the Executive Board
• leading the communication programme with shareholders
• acting as Director of various subsidiaries of the Group
Finance Director – Alan Dale
Alan Dale is responsible for all financial reporting, investor relations, tax,
treasury and financial control aspects of the Group. As a member of
the Executive Board he also provides support to the Chief Executive in
the development and implementation of the strategy, and in the wider
activities of the Group as required. Alan is also a Chair and Director
of various subsidiaries of the Group and a member of the ESG
Working Group
1
.
Constructive challenge and independent oversight
Senior Independent Director – Rakesh Sharma
Rakesh Sharma supports the Chairman in his role by acting as a
sounding board for the Chairman and a trusted intermediary for
other Directors in resolution of any significant issues that may arise.
His other main responsibilities include:
• chairing the Nomination Committee when it is considering
succession to the role of Chairman of the Board
• chairing the Remuneration Committee
• meeting with the Non-Executive Directors at least once a year to
appraise the Chairman’s performance and on such other occasions
as are deemed appropriate
• being available to shareholders if they have concerns which
contact through the normal channels of the Chief Executive or
Finance Director has failed to resolve or for which such contact
is inappropriate
• having sucient contact with major shareholders to obtain a
balanced understanding of the issues and concerns of such
shareholders
Independent Non-Executive Directors – Gill Barr, Rosie Shapland
and Ben Wishart
The Independent Non-Executive Directors bring a strong independent
element to the Board, and provide constructive challenge and support
to strategic and other matters addressed by the Board. They are
expected to attend all scheduled Board and Committee meetings, and
to devote such time as is necessary for the proper performance of
their duties.
During the year, the Chairman held meetings with the Non-Executive
Directors without the presence of the Executive Directors. There were
no unresolved concerns about the running of the Company.
Board support
Company Secretary – Brian McLelland
Brian replaced Sarah Carne as Interim Company Secretary to the
Board and all its Committees in January 2022. He provides advice
and assistance to the Board to ensure good governance practices
and compliance with company law, Listing Rules, Disclosure
Guidance and Transparency Rules and the Market Abuse
Regulations. His other responsibilities include:
• supporting the Board and Committee Chairs in setting the agendas
and ensuring information is made available to the Board members in
a timely fashion
• arranging the induction of new Directors and coordinating training
requirements for the Non-Executive Directors as required
• organising internal and external Board and Committee evaluations
at the request of the Chairman
• membership of the Market Disclosure Committee of the Board
• acting as secretary to the subsidiaries of the Group
• membership of the ESG Working Group
Corporate Governance Report continued
1. Dividend cover represents profit aer tax divided by reported dividends.
Financial statements Shareholder information 81Strategic report Governance
Engagement with stakeholders
In its decision-making, the Board has regard to each Director’s duty to
promote the success of the Company on behalf of the Company’s
stakeholders, to foster the Company’s relationships with its people,
shareholders, convenience retailer partners, SMEs, consumers, clients
and local communities and to consider the eect of the principal
decisions taken by the Company during the financial year on the
Company’s stakeholders. For more information see pages 52 to 53.
Engagement with and feedback from our people across the business is
vital. This year the employee forum continued to provide feedback on
changing working patterns due to Covid-19, general engagement and
input into our ESG strategy. Gill Barr, our Board representative for the
employee forum, feeds back issues raised by the members of the forum
for consideration by the Board.
Shareholder relations
The Directors consider that the annual report and accounts play an
important role in providing shareholders with an evaluation of the
Company’s position and prospects. The Board aims to achieve clear
reporting of its financial performance to all shareholders.
The PayPoint website provides comprehensive information for current
and potential shareholders and the annual general meeting is an ideal
forum for interaction between the Board and shareholders. In addition,
the Company maintains a full investor relations programme, including
formal roadshows following the full and half-year results and regular
one-to-one meetings with current and potential investors.
The Board acknowledges the importance of an open dialogue with its
institutional shareholders and welcomes correspondence from private
investors. Meetings are held with investors throughout the year both
at their oces and in the form of site visits to PayPoint’s operations.
The Senior Independent Director is available to address any unresolved
shareholder concerns.
Accountability
Financial and business reporting
Please refer to the following pages of this annual report for information
on how the Board has carried out the financial and business reporting
obligations as stipulated under the Code:
• page 104 for the Board’s responsibility statement setting out the
steps taken to present a fair, balanced and understandable
assessment of the Company’s position and prospects
• pages 02 to 33 for the strategy and business model which explains
how the Company generates and preserves value over the longer
term and the strategy for delivering the objectives of the Company
• page 103 for the statement that the financial statements have been
prepared on a going concern basis
Risk management and internal control
The Board has overall responsibility for establishing and maintaining
sound risk management and internal control systems and the monitoring
of these systems to ensure that they are eective and fit for purpose.
The Audit Committee provides support to the Board in this regard and
oversees the monitoring process. Further information on the risk
management and internal control system is set out in the Risk
Management Report on page 54.
The Board has carried out a robust assessment of the nature and extent
of the emerging and principal risks facing the Group and how these risks
could aect the business, financial condition or operations of the Group.
The explanation of these principal risks including how they are being
mitigated can be found on pages 56 to 58, and a statement on how the
Directors have assessed the prospects of the Group taking into account
the current position and principal risks is on page 59.
Remuneration
Details of how the provisions of the Code have been applied in respect
of Directors’ remuneration are set out in the Remuneration Committee
Report on pages 90 to 101.
Brian McLelland
Company Secretary
17 June 2022
PayPoint Plc Annual Report 202282
Nomination Committee Report
Nomination Committee responsibilities
The Committee’s key role is to ensure that the Board has the
appropriate skills, knowledge and experience to operate eectively
and deliver our strategy. It is responsible for regularly reviewing
the size, structure and composition of both the Board and its
Committees taking into account the challenges and opportunities
facing the Company. The Committee identifies and recommends to
the Board candidates to fill Board vacancies based on merit and
objective criteria, and ensures that appointment processes are
formal, rigorous and transparent. The Committee also oversees the
development of a diverse pipeline for succession. The Chairman
invites the Chief Executive to attend its meetings and the HR
Director as and when required. The Company Secretary acts as
secretary to the Committee. Further details of the Committee’s
responsibilities can be found in its terms of reference, on the
Company’s website www.corporate.paypoint.com.
Dear Shareholders,
On behalf of the members of the Nomination Committee, I am pleased
to present the Nomination Committee Report for the year ended
31 March 2022.
The Committee met three times during the year. The key areas of focus
included the:
• review of the structure and development of the Board and the
Executive Board
• review of the result of the 2021 external performance evaluation
• approval of the report of the Committee for inclusion in the 2022
annual report and accounts
• organisational development
• review of the Board’s policy on diversity, equity and inclusion
• annual review of the Directors’ length of service
• annual review of the Directors’ conflicts of interest register and
number of external directorships held
• annual review of its terms of reference
During the year, a review of the progress of the NED mentoring
programme and succession planning were covered at a meeting of the
Board of Directors.
Following each Committee meeting, a summary of the Committee’s
activity is provided to the Board together with any recommendations.
Giles Kerr
Chairman,
Nomination Committee
A key area of focus has been
on succession planning for the
Board, Executive Board and
management to ensure we
have the right pipeline of talent
coming through the business.
Membership and attendance
Attendance at meetings
during the year
Current members Date appointed as member
Eligible to
attend Attended
Giles Kerr
(Chairman)
20 November 2015,
assuming chairmanship
in May 2020 3 3
Gill Barr 1 June 2015 3 2¹
Rakesh Sharma 12 May 2017 3 3
Rosie Shapland 2 October 2020 3 3
Ben Wishart 14 November 2019 3 2
2
1. Gill Barr was unable to attend the meeting held in March 2022 due to a
family bereavement.
2. Ben Wishart was unable to attend the meeting held in May 2021 due to
an unscheduled Ahold Delhaize management meeting.
Financial statements Shareholder information 83Strategic report Governance
Directors’ time commitment and length of service
All Directors are aware of the need to allocate sucient time to PayPoint
Plc in order to discharge their responsibilities eectively. The Nomination
Committee monitors attendance, Committee composition, length of
service and the extent of the Directors’ external commitments on an
ongoing basis.
Giles Kerr’s second three-year term expired on 20 November 2021.
Following Giles’s agreement, the Committee recommended to the
Board that he be reappointed for a further three years.
All Directors, in accordance with the Code, will be oering themselves
for reelection at the annual general meeting on 20 July 2022.
The terms and conditions of appointment of Non-Executive Directors
and the service contracts of Executive Directors are made available for
inspection at the annual general meeting.
Directors’ conflicts of interest
The Nomination Committee annually reviews and considers the interests
and other external appointments held by the members of the Board.
Conflicts declared are recorded in our register of conflicts of interest
and this was reviewed and approved by the Committee at its meeting
in March 2022. The Directors have a continuing duty to inform the Board
of any potential conflicts immediately so that such conflicts may be
considered and, if authorised, included within the register of conflicts
of interest. We recognise that the Non-Executive Directors have other
business interests outside of PayPoint Plc and that other directorships
bring significant benefits to the Board. All key external roles are given
within the Director biographies on pages 72 to 73. Non-Executive
Directors are required to obtain the approval of the Chairman before
accepting any further appointments.
A register of related parties is also maintained and updated by the
Company Secretary in order that any related party transactions are
identified and the necessary disclosures made.
The Nomination Committee Report was approved by the Board on
17 June 2022.
Succession planning
In addition to having succession planning in place for the Board and
Executive Board, we also focus on the succession plans for key
management to ensure we have the right pipeline of talent coming
through the business to support the future needs of the Group.
Diversity
The Board’s policy on diversity, equity and inclusion, which is reviewed
annually by the Committee, sits alongside PayPoint’s employee policy,
which sets out the Company’s commitments to create a positive and
inclusive environment where everyone can learn, grow and shine. The
Board policy addresses the specific requirements of the UK Corporate
Governance Code in relation to the Board and the recommended targets
set out in the reports on diversity of Sir Philip Hampton and Dame Helen
Alexander, and of Sir John Parker.
In accordance with the Policy Statement on,“Diversity and Inclusion
on company boards and executive management” published by the
FCA April 2022, which propose changes to the Listing Rules in order
to provide disclosure of certain diversity targets on a comply or explain
basis. The targets are:
• at least 40% are women
• at least one of the senior Board positions (Chair, Chief Executive
Ocer (‘CEO’), Senior Independent Director (‘SID’) or Chief
Financial Ocer (‘CFO’) is a woman
• at least one member of the Board is from a minority ethnic
background (which is defined by reference to categories
recommended by the Oce for National Statistics (‘ONS’) excluding
those listed, by the ONS, as coming from a white ethnic background
All Board appointments are made on merit, in the context of the balance
of skills, experience, independence and knowledge which the Board as a
whole requires to be eective, taking account of diversity in the manner
described above. Responsibility has been delegated to our HR Director
for the operation of the diversity and inclusion policy across the rest of
the Group and ensuring its maintenance and review. Eorts to increase
diversity in the senior management pipeline towards Executive Board
positions continues to be supported, and the development of diversity
in senior management roles within the Group is encouraged.
As at the date of this report, PayPoint Plc continues to have two female
members on the Board who represent 28.5% of the Board members. The
Board has approved the appointment of a further female Non-Executive
Director to the Board in FY 22-23 and will engage with executive search
firms in a manner which enhances opportunities for diverse candidates
to be considered for appointment. The Board will also consider female
appointments to the senior Board positions identified by the FCA above,
at the next available opportunity. Additionally PayPoint Plc meets the
targets set out in the Parker Review and the FCA in respect of ethnic
diversity on UK boards.
For more information on our diversity, equity and inclusion policy please
refer to page 45.
Giles Kerr
Chairman,
Nomination Committee
17 June 2022
PayPoint Plc Annual Report 202284
Audit Committee Report
Rosie Shapland
Chair,
Audit Committee
Membership and attendance¹
Attendance at meetings
during the year
Current members Date appointed as member
Eligible to
attend Attended
Rosie Shapland
(Chair)
2 October 2020,
becoming Chair
in December 2020
4 4
Gill Barr 1 June 2015 4 3²
Rakesh Sharma 12 May 2017 4 4
Ben Wishart 14 November 2019 4 4
1. The Audit Committee invites the Head of Risk and Internal Audit to
attend and provide updates to the Committee at each meeting covering
the matters set out in the risk management section of this report.
The external auditors KPMG are also in attendance at each meeting
along with the Chief Executive, Finance Director and Chairman. Other
members of management attend as and when requested. The Company
Secretary acts as secretary to the Committee.
2. Gill Barr was unable to attend the meeting held in March 2022 due to a
family bereavement.
We have sought to ensure
the annual report is fair, balanced
and understandable to provide
the information necessary for
shareholders to assess the
Company’s performance,
business model and strategy.
Audit Committee responsibilities
The Committee’s key role is to support the Board in fulfilling its
oversight responsibilities by reviewing and monitoring the integrity
of the Company’s financial reporting to shareholders and any formal
announcements relating to the Company’s financial performance.
The Committee also supports the Board in matters relating to the
relationship with the external auditor and in respect of the internal
control and risk management systems of the business. Significant
financial reporting issues and judgements, together with any
changes in accounting principles, are reviewed by the Committee
and reported through to the Board. As requested by the Board,
the Committee reviews the content of the annual report and
accounts and advises the Board on whether, taken as a whole, it
is fair, balanced and understandable and provides the information
necessary for shareholders to assess the Company’s performance,
business model and strategy. Further details of the Committee’s
responsibilities can be found in its terms of reference, on the
Company’s website www.corporate.paypoint.com.
Dear Shareholders,
As Chair of the Audit Committee (the ‘Committee’) I am pleased to
present the Audit Committee Report for the year ended 31 March
2022. The report sets out the remit of the Committee, its areas of focus
for this financial year and the Company’s relationship with its external
auditors, KPMG LLP.
The Committee met four times during the year, with meetings timed
to coincide with the financial and reporting cycles of the Company. We
also met on 19 May 2022 to review the 31 March 2022 annual eport
and accounts and the findings of the external auditor. In addition, the
Committee met with both the Company’s external auditor and Head of
Risk and Internal Audit during the year without management being present.
The Committee has satisfied itself that the PayPoint Plc 2022
annual report and accounts is fair and balanced. We have
sought to make the annual report as clear, understandable and
informative as possible to provide the information necessary for
shareholders to assess the Company’s performance, business
model and strategy. The Committee therefore supports the
Board in making its formal statement on page 104.
Financial statements Shareholder information 85Strategic report Governance
Governance
• considered quarterly updates from the Head of Risk and Internal
Audit on the Group risks
• carried out an annual review of the Committee’s terms of reference
• carried out reviews of the Board Delegated Authority
• received reports from the Chairman of the Cyber Security and
Information Technology Sub-Committee. See page 88 for details
on the role of the Sub-Committee
The Audit Committee and Cyber and IT Sub-Committee support the
Board with monitoring risk management and internal control systems
and reviewing their eectiveness. Internal controls are used to mitigate
risks faced by the Group within the risk appetite set by the Board in
order to safeguard shareholders’ investments and Group assets. The
Audit Committee reviews eectiveness of the risk management and
internal control framework by receiving regular and comprehensive
reports and information from Risk and Compliance teams. The Board
has defined its risk appetite for all principal risks which are categorised
under market, strategic, business and operational risk. A standard risk
assessment methodology is applied across the Group to evaluate gross
and residual risk and comparing residual risk against risk appetite.
As required by the Code, the Board via the Audit Committee, has carried
out a robust assessment of the principal and emerging risks facing the
Group, including those that could threaten its business model, future
performance, solvency or liquidity. This is more fully described on pages
56 to 58. The following key procedures and monitoring processes are in
place to provide eective internal control:
• the Board approves key Group policies and authorities delegated to
the Executive Board and senior management. Internal Audits assess
adherence and exceptions are reported in Internal Audit reports
which are made available to the Audit Committee
• there is an ongoing process to identify, evaluate and manage risks via
functional and entity Risk and Control registers and significant risks
are reported to the Board and Audit Committee
• the Group’s Risk and Compliance teams continuously review
processes that have been correctly followed across the Group and
exceptions are reported to the Audit Committee and Cyber and
Information Technology Sub-Committee
• on behalf of the Board, the Audit Committee reviews fraud, anti-
bribery and whistleblowing – there were no instances of fraud,
whistleblowing or identified instances of bribery or corruption during
the year
• during the year the Environmental, Social and Governance
(‘ESG’) Working Group was implemented to oversee the Group’s
environmental and social related risks and to make recommendations
to the Board, as well as reviewing the TCFD disclosures in the 2022
annual report and accounts
• Executive and Finance management annually attest that to their
knowledge they and their teams adhered with Group policies,
delegated authorities and year-end procedures; and that relevant
Risk and Controls registers are a fair representation of risks, and
the controls listed operated eectively during the year. Attestation
details are reported to the Audit Committee
• the Audit Committee reviews risk appetite for principal risks and
compliance with risk appetite is monitored through the Group’s risk
assessment processes
In the year under review the work undertaken by the Audit Committee
was as follows:
Financial reporting
• reviewed the annual and interim financial statements
• considered significant accounting policies, financial reporting
issues, judgements and estimates, most notably in relation to recent
acquisitions
• considered the provision in relation to the Ofgem Statement of
Objections and the commitments volunteered by the Company
which were formally accepted on 23 November 2021
• considered findings as set out in the reports from the external auditors
• considered and recommended to the Board the going concern basis
for preparation of the financial statements
• considered and recommended to the Board the viability statement
and the period over which the Company’s viability is measured.
In doing so the Committee had regard to an assessment which
modelled the possible occurrence of significant risks and events,
and which showed that the Company would continue to be viable
and profitable over the three-year period
• reviewed PayPoint’s treasury policy
• approved PayPoint’s annual tax strategy
• the Committee continued to focus on revenue recognition during
the year due to the level of transactions and the complexity of the
systems. We have enhanced the accounting policy and revenue
note disclosures to aid understanding of this important area.
Internal audit
• approved the annual audit plan
• monitored progress against the approved audit plan
• received copies of audit reports and assessed key findings and
implementation of recommendations
• assessed the audit universe and audit cycle
• monitored resource requirements for internal audit and approved
the annual internal audit budget
• carried out an annual review of and approved the internal audit charter
Risk management and internal controls
• carried out a review of the Group’s insurance coverage
• approved various policies including whistleblowing and anti-bribery
and corruption
• considered any reported frauds and any concerns raised via the
Company’s whistleblowing process
• reviewed the Company’s risk framework and any changes thereto
prior to approving the principal and emerging risks for inclusion in the
annual report
• approved the UK SOX proposed project plan to ensure it
incorporates appropriate processes and controls
• considered quarterly updates from the Group’s Compliance Ocer
which provide an overview of compliance within the Group’s
regulated entities
PayPoint Plc Annual Report 202286
Significant financial judgements and critical estimates
for the year ended 31 March 2022
How the Audit Committee addressed these significant
financial judgements and critical estimates
Business combinations: recognition of goodwill and
intangible assets and creation of cash generating unit
(critical estimate and significant judgement)
During the year PayPoint acquired RSM 2000.
Accounting for the acquisition requires an assessment of the
existence, fair value and expected useful economic lives of separable
intangible assets such as customer relationships and regulatory
licences at the date of acquisition.
The fair value attributed to intangible assets arising on acquisition is
recognised in accordance with IAS 38 Intangible Assets and is based
on a number of estimates, including the long-term revenue growth
rate of the related business and discount rate.
PayPoint acquired RSM 2000 as part of its digital strategy and this
now forms a key part of PayPoint’s new Digital Cash Generating
Unit (‘CGU’). As part of this strategy Paypoint’s MultiPay business
has been brought together with the RSM 2000 business to form this
new CGU. This will be used to provide a seamless digital proposition
to clients going forward into existing and growing markets such as
housing and charities.
The Committee reviewed and approved management’s paper on the
acquisition supported by a report from a third-party valuation specialist.
The Committee reviewed the valuation methodology for the acquired
assets, with particular focus on the goodwill and intangible assets,
and is satisfied that the acquisition accounting and related disclosures
are appropriate.
The Committee has challenged management on the key assumptions
that drive the valuation of acquired assets; the costs to recreate the
regulatory licences;and for customer relationships, the expected future
income streams and discount rate.
The Committee reviewed, discussed and approved a further management
paper setting out the rationale and background to the formation of the
Digital CGU. The paper summarised the background to the CGU and the
constituent elements that make up the relevant income and cost elements
that will form the basis for the value-in-use calculation.
The Committee also gave further consideration to the implication of
the new Digital CGU on the recognition of operating segments for the
Group and agreed that no changes were required.
Valuation of the goodwill relating to cash generating unit
(critical estimate)
In the current and prior year Paypoint has acquired four subsidiaries.
An annual impairment review is required on the carrying value of
goodwill relating to each of the resulting four cash generating units
that have been identified.
These are i-movo, Handepay and Merchant Rentals and RSM 2000.
The first three subsidiaries were acquired in the prior year and are
distinct CGUs whilst RSM 2000 was acquired in the current year
and is now part of the Digital CGU.
Impairment models have been built which consider future cash flows
based on the Board-approved plan and these are discounted to a
net present value for comparison to the carrying value. The Board
approved plan forecasts cash flows for the initial three years and then
appropriate assumptions are applied to forecast a further two years,
before prudent long-term growth rates are applied to the fih year
to calculate terminal values.
Sensitivity analysis has been applied to determine the impacts
of reasonably possible changes in the assumptions used for the value-
in-use calculations.
The Committee reviewed and approved a paper setting out
management’s impairment assessments for the carrying values of
goodwill, acquired intangible assets and investments associated with
the relevant acquisitions.
The Committee reviewed the methodology and assumptions set out
in the paper for the impairment tests and is satisfied that the valuation,
headroom and related disclosures are appropriate.
The Committee has challenged the key assumptions that drive each of
the models for the impairment tests including specific growth drivers
for each business, discount rates applied and long-term growth rates.
Audit Committee Report continued
• the Audit Committee reviews key risks presented by the Head of
Risk and Internal Audit at each meeting to ensure management
eectively implements preventative and detective controls to
monitor and mitigate risk
• the Cyber and Information Technology Sub-Committee reviews
key IT and cyber risks to ensure the Group’s IT function eectively
implements preventative and detective controls to monitor and
mitigate risk
On the basis of the above procedures and monitoring processes,
the Board, supported by the Audit Committee, has reviewed the
eectiveness of the risk management and internal control systems.
No significant control failings or weaknesses were identified during
the period under review. The Directors confirm that the processes
described above have been in place during the financial year and
up to the date of the approval of the Annual Report and Accounts.
External audit
• agreed the scope of the 2022 audit together with the fees and
terms of engagement. Details of the amounts paid to the external
auditors for the audit services for 2022 are given on page 131,
note 8 to the financial statements
• received the external auditor’s plan for the financial year, reviewing
materiality thresholds and areas of risk where the auditor would
focus their work
• reviewed the eectiveness of the external audit process, by
discussing the results of the auditor’s work and their views on
material accounting issues and key judgements and estimates
• reviewed the robustness of the audit process and reviewed the
2021 Audit Quality Review Report, regarding the overall quality
of audit work provided by KPMG for listed companies
• reviewed and monitored the independence of the external auditor
and approved their provision of non-audit services
• recommended KPMG for reappointment at the 2022 annual
general meeting
• considered the regulations contained within the Competition and
Markets Authority Audit Order to ensure that the Company carries
out specific functions in relation to audit services
Significant judgements and critical estimates in relation to the
financial statements
In preparing the financial statements for 2022, there were several areas
requiring the exercise by management of judgement or a high degree
of estimation. Throughout the year, the finance team worked closely
with the external auditor to ensure the Company provides the required
level of disclosure. The tables below outline the significant areas of
judgement and estimation together with other financial reporting
matters that have been considered by the Committee in discussion with
management and the external auditor.
Financial statements Shareholder information 87Strategic report Governance
Significant financial judgements and critical estimates
for the year ended 31 March 2022
How the Audit Committee addressed these significant
financial judgements and critical estimates
Recognition of cash and cash equivalents
(Significant judgement)
The nature of bill payments and Direct-Debit services means that
PayPoint collects and holds funds on behalf of clients as those
funds pass through the settlement process and also retains retailer
partners’ deposits as security for some of those collections.
A critical judgement in this area is whether clients’ funds and retailer
partners’ deposits are recognised in the statement of financial
position. This includes evaluating:
(a) the existence of a binding agreement clearly identifying the
beneficiary of the funds
(b) the identification, ability to allocate and separability of funds
(c) the identification of the holder of those funds at any point in time
(d) whether PayPoint bears the credit risk
Where there is a binding agreement specifying that PayPoint holds funds
on behalf of the client (i.e. acting in the capacity of a trustee) and those
funds have been separately identified as belonging to that beneficiary, the
cash and the related liability are not included in the statement of financial
position. In all other situations the cash and corresponding liability are
recognised on the statement of financial position.
The Committee reviewed and approved the accounting policy on cash
and cash equivalents and considers the treatment of transactions with
management.
The Group continues not to recognise clients’ funds and retailer
partners’ deposits on the statement of financial position where there
is a binding agreement specifying that PayPoint holds the cash in trust
accounts on behalf of clients or retailer partners (i.e. acting in the
capacity of a trustee) and that is separately identified as belonging to
that beneficiary.
The Audit Committee considered the impacts of the April 2022 IFRIC
agenda decision on demand deposits with restrictions on use arising
from a contract with a third party and is satisfied with management’s
conclusion that the IFRIC does not result in any changes to the Group’s
existing accounting policy for cash and cash equivalents.
Other financial reporting matters for the year ended
31 March 2022
How the Audit Committee addressed these financial
reporting matters
i-movo deferred consideration
During the year management have considered the accounting for
the i-movo deferred consideration which is contingent on future
performance over the 29-month earnout period from acquisition.
It is linked to four revenue growth targets on two potential key
revenue streams.
As a result of the actual performance compared to the targets set
out in the purchase agreement, two of the targets were met and
consideration was paid in the year.
Management have reviewed the Board approved plans which
indicate the remaining two revenue targets are unlikely to be met
by the dates specified in the purchase agreement and as a result
the remaining provision for deferred contingent consideration was
released in the year.
The Committee reviewed and approved a paper supporting
management’s decision to release the remaining element of the
deferred contingent consideration not yet paid.
This involved reviewing the background to the deferred contingent
consideration and the revenue targets and dates set out in the
purchase agreement, the actual performance to date against
targets and the forecast performance included in the latest Board
approved plan.
The Committee agreed with management’s conclusion that the
remaining provision for deferred contingent consideration should
be released.
Viability and going concern
Each year the Directors consider the Group’s viability over a three-year
period. This is consistent with the Group’s strategic planning period.
For the purposes of assessing the going concern assumption cash
flow forecast scenarios have been prepared for a period of at least
12 months from the date of approval of these financial statements,
taking into account the Group’s current financial and trading position,
the principal risks and uncertainties and the strategic plans.
Additionally, the Directors have carried out an assessment of the
principal risks and uncertainties and applied several severe but
plausible scenarios to further test the Group viability.
Based on a satisfactory assessment the Directors conclude that
it is appropriate to prepare the financial statements on a going
concern basis.
The Committee reviewed management’s assessment of going concern
and the viability statement.
The review included consideration of forecast cash flows, relevant
sensitives and the impacts of these on the Group’s cash position over
the 12-month forecast period.
The Group’s viability has been further tested by applying a number of
severe but plausible downside scenarios and considering mitigating
actions and the impact of such scenarios on the Group’s future
financial position. The Committee reviewed and discussed these and
the potential mitigations.
PayPoint Plc Annual Report 202288
External audit
The eectiveness of the audit process is underpinned by appropriate
audit planning and risk identification at the outset of the audit cycle.
The auditor provides a detailed audit plan identifying their assessment
of the risks and other key matters for review. For the year ended
31 March 2022, the significant audit risks identified were: RSM 2000
acquisition accounting; valuation of i-movo contingent consideration;
recoverability of i-movo goodwill; and management override of controls
and recoverability of parent company’s investments in subsidiaries.
The Committee reviews and challenges the work undertaken by the
auditor to test management’s assumptions on these matters. An
assessment of the eectiveness of the audit process in addressing
these items is based on the auditor’s reports for the half-year and
full year. The Chair of the Committee meets regularly with the auditor
throughout the audit process and during the year, the auditor attends
all Committee meetings to present their audit plan and the results of
their work, and the Committee seeks feedback from management on the
eectiveness of the audit process. No significant issues were raised with
respect to the audit process for the period and the quality of the audit
process was assessed to be good.
In accordance with its policy on auditor independence and the
provision of non-audit services by the external auditor, the Committee
reviews and monitors the auditor’s independence and objectivity. This
is done by considering the auditor’s statement of confirmation of
independence, and discussing any identified threats to independence
and the safeguards applied to mitigate those threats. The Committee
also considers all relationships between the Company and the audit firm,
including their network firms and whether those relationships appear to
impair the auditor’s independence and objectivity. As part of the audit
planning process, the auditor provided a statement of confirmation of
independence to the Board and the Audit Committee, which confirmed
that in their professional judgement KPMG was independent within the
meaning of regulatory and professional requirements and the objectivity
of the partner and audit sta remained unimpaired.
KPMG was appointed as the Company’s auditor on 15 August 2017
following a formal audit tender process. The lead audit partner, James
Tracey replaced Michael Harper in September 2021. The Committee
considers that it would be appropriate to conduct an external audit
tender by no later than the year ending 2028. During the year the
Committee reviewed KPMG’s scores following their inspection by
the AQR for audit engagements during FY2021; 59% of KPMG’s
audits were rated ‘good or limited improvements required’, while one
required significant improvements. The Committee recommends that
KPMG be reappointed as the Company’s statutory auditor for the year
ending 31 March 2023. It believes the independence and objectivity
of the external auditor and the eectiveness of the audit process are
safeguarded and remain strong. There are no contractual obligations
restricting the Committee’s choice of auditor. The Notice of Annual
General Meeting at which a resolution for reappointment of the auditor
will be proposed, can be found on pages 156 to 162.
Cyber Security & Information Technology Sub-Committee
The Cyber Security & Information Technology Sub-Committee
(‘Sub-Committee’) is a sub-committee of the Audit Committee
overseeing Group cyber security and IT matters.
Its key responsibilities include to:
• advise the Audit Committee on cyber and information security
risks faced by the Group
• assess the adequacy of policies, resources and funding for cyber
and information security
• review the Group’s cyber and information security breach
response plan
• review cyber incident reports and assess the adequacy of
proposed actions
• ensure eective business continuity plans
• oversee cyber security training and awareness
The Sub-Committee comprises two Non-Executive Directors: Rakesh
Sharma and Ben Wishart as Chairman of the Sub-Committee; the Finance
Director, the Chief Technology Ocer (who is a member of the Executive
Board) and the IT & Service Operations Director (who joined the Executive
Board in the year). The Company Secretary is the secretary to the
Sub-Committee.
During the year the Sub-Committee held two meetings at which the
Head of IT Risk, the Head of Risk and Internal Audit and the Chair of the
Audit Committee were also in attendance by invitation. The matters
considered by the Sub-Committee during the year included: the monitoring
of cyber security issues and vulnerabilities and implementing remediation
and improvements as required; assessing the Company’s security controls
and overall IT governance & control framework; results of IT audits
carried out by Internal Audit and implementing improvements that were
recommended; and the annual review of both the cyber security policy
and the Sub-Committee’s terms of reference and membership.
Audit Committee Report continued
Financial statements Shareholder information 89Strategic report Governance
Whistleblowing
PayPoint continuously seeks to prevent malpractice in its business.
However, if it occurs, whistleblowing processes have been implemented
to provide employees with guidance and ensure concerns raised are
appropriately addressed. Our whistleblowing policy ensures colleagues
are encouraged to raise concerns about the conduct of others, breaches
and irregularities, without fear of reprisal. Whistleblowing is discussed
at each Committee meeting and all whistleblowing occurrences are
reported to the Committee together with details of investigations and
any corrective action necessary.
Anti-bribery and corruption
PayPoint has a zero-tolerance approach to bribery and has an anti-
bribery and corruption policy detailing employee responsibilities to
ensure the Group’s employees remain compliant with anti-bribery
and corruption laws. All employees undertake anti-bribery and
corruption training at induction and ongoing role-based training is
provided. Anti-bribery and corruption risk management is discussed
at Committee meetings.
The Audit Committee Report was approved by the Board on
17 June 2022.
Non-audit services
In accordance with the FRC Revised Ethical Standard 2019, the Committee
has a policy on auditor independence and the provision of non-audit
services by the external auditor. This policy is a guide to the types of work
that are acceptable for the external auditor to undertake, and provides
clarity on the process to be followed for approval of the provision of non-
audit services by the external auditor. The policy also covers the 70% cap
on non-audit fees as prescribed by the FRC Revised Ethical Standard 2019.
It states that subject to prior approval by the Finance Director, the fees for
permitted non-audit services provided by the external auditor must not
exceed a specified amount and must have a cumulative annual total of less
than 70% of the average audit fee over the three proceeding years.
The ratio of non-audit fees to audit fees paid to the auditor for the year
was 7.5%, with non-audit services limited to assurance services for the
half year review. Details of the auditor’s remuneration for the statutory audit
and non-audit services are set out in note 8 to the financial statements.
Risk management and internal control
The Board is responsible for establishing and maintaining the Group’s
internal control framework and regularly reviewing its eectiveness.
The Board has delegated responsibility for reviewing the eectiveness
of risk management and internal controls to the Committee. The
Committee performs robust assessments of the risks which could
significantly impact the Group’s performance, future prospects and
reputation.
The Company’s management of risks and its internal control framework
are detailed on page 54.
Internal audit
Internal audit is an independent assurance function providing services
to the Committee and all levels of management. Internal audit helps the
Group accomplish its objectives by bringing a systematic, disciplined
approach to risk management. Its remit is to provide independent and
objective assurance, assist management in implementing eective
controls and help protect the Group. Internal audit’s responsibilities
include delivering the annual audit plan, driving remediation of audit
issues, assessing eectiveness of internal controls, the prevention
and detection of fraud, and supporting management in assessing and
mitigating risks.
The Committee is responsible for ensuring the Group has a rigorous
internal audit programme covering all business areas and risks.
Rosie Shapland
Chair,
Audit Committee
17 June 2022
PayPoint Plc Annual Report 202290
Rakesh Sharma
Chairman,
Remuneration Committee
Remuneration Committee responsibilities
The Committee’s key roles are to ensure that the Remuneration
Policy and practices of the Company are aligned with the
Company’s purpose and business strategy, promote long-term
sustainable success and reward fairly and responsibly with a clear
link to corporate and individual performance. The Committee’s
decision-making process takes account of legislation, regulation,
corporate governance standards, guidance issued by regulators,
shareholders and shareholder representative bodies and has access
to the advice of independent remuneration consultants. To avoid
conflicts of interest, no Committee member or attendee is present
when matters relating to his or her own remuneration are discussed.
Full terms of reference for the Committee are available on the
Company’s website.
Dear Shareholders,
I am pleased to present our Directors’ Remuneration Report for the
financial year ended 31 March 2022 which has been prepared in
accordance with Schedule 8 of the Large and Medium-sized Companies
and Groups (Accounts and Reports) (Amendment) Regulations 2013,
the Listing Rules of the UK Listing Authority and the prevailing UK
Corporate Governance Code (the ‘Code’). The Directors’ Remuneration
Report will be subject to an advisory shareholder vote at the annual
general meeting on 20 July 2022.
The report is divided into three sections:
• this Annual Statement of the Remuneration Committee Chairman
for the year ended 31 March 2022, which summarises remuneration
outcomes for the year ended 31 March 2022
• the Directors’ Remuneration Policy – at a glance, which sets out
the key elements of our Remuneration Policy which was approved
by shareholders at the 2020 annual general meeting. Full details of
our current policy can be found within our 2020 annual report on
our website
• the Annual Report on Remuneration, which provides further detail
on how the Remuneration Policy was implemented in the year ended
31 March 2022 and how it will be implemented in the year ending
31 March 2023
Committee activities during the year
The Committee met twice during 2021/22. The main Committee
activities during the year (full details of which are set out in the relevant
sections of this report) included:
• approving the 2020/21 Directors’ Remuneration Report
• setting the performance targets for the 2021/22 annual bonus
and bonus deferral levels
• approving the release of the 2018 deferred bonus awards
• confiming the lapse of the 2018 Long-Term Incentive Plan (‘LTIP’)
awards due to the respective performance conditions not being met
• approving the vesting of the 2018 restricted share plan awards
(granted below Board level)
• agreeing the 2021 Restricted Share Plan (annual and adhoc) awards
Membership and attendance
Attendance at meetings
during the year
Current members Date appointed as member
Eligible to
attend Attended
Rakesh Sharma
(Chairman)
12 May 2017 2 2
Gill Barr 1 June 2015 2 1
2
Giles Kerr 20 November 2015 2 2
Rosie Shapland 2 October 2020 2 2
Ben Wishart 14 November 2019 2 1
1
1. Gill was unable to make the meeting held in March 2022
due to a family bereavement.
2. Ben was unable to attend the meeting held in May 2021 due
to an unscheduled Ahold Delhaize management meeting.
The members of the Committee and their attendance at
meetings are set out in the table above. In addition to the
members of the Committee, the HR Director and the Company’s
independent advisor from FIT Remuneration Consultants LLP
(‘FIT’), may attend and receive papers for each meeting. The
Company Secretary acts as secretary of the Committee. Aer
each meeting, the Chairman of the Committee reports to the
Board on the matters discussed and recommendations and/or
actions to be taken.
Directors’ Remuneration Report
The Committee
continues to ensure the clear
linkage of Executive Directors’
pay and performance to the
strategy and enhancement
of shareholder value.
Financial statements Shareholder information 91Strategic report Governance
Financial year
ended 31 March
2020
The Committee chose to exercise discretion by
accepting the proposal of the Executive Board to
waive their entitlement to bonuses for the year ended
31 March 2020
Financial year
ended 31 March
2021
The Committee chose to exercise discretion by
accepting the proposal of the Executive Board to waive
their entitlement to salary review in July 2020 and the
proposal of the Chief Executive to reduce his base salary
by 20% for a period of three months with eect from
1 April 2020
Financial year
ended 31 March
2022
The Committee did not increase the base salary levels
of the Chief Executive and Finance Director in July 2021
when increases were applied to the general workforce
In addition to the above it should be noted that Non-Executive Director
fees have remained flat since April 2019. A 3% increase will be applied in
July 2022, in alignment with the minimum increase that will be applied to
the general workforce.
Policy implementation for the year ending 31 March 2023
A summary of the proposed approach to the implementation of the
Policy is as follows:
• the salaries of the Chief Executive and Finance Director will be
increased by 3% to £484,100 and £309,000 respectively in July
2022, in line with the minimum increase that will be applied to the
general workforce
• the annual bonus potential for the year to 31 March 2023 will remain
at 106% of base salary and the performance targets will continue to
be based on profit before tax, net revenue and stretching strategic
targets. 25% of any bonus will continue to be deferred in shares for
three years
• Restricted Share Awards (‘RSAs’) to be granted in 2022 will:
– be set at 75% of salary for the Chief Executive and 62.5% of
salary for the Finance Director
– vest 50% aer three years from grant, 25% aer four years from
grant and 25% aer five years from grant, subject to continued
employment, satisfactory individual performance and a positive
assessment of performance against an underpin. No shares
can be sold until at least five years from grant, other than those
required to settle any taxes
Conclusion
In accordance with its terms of reference, the Committee continues to
ensure the clear linkage of Executive Directors’ pay and performance to
the strategy and enhancement of shareholder value and is comfortable
that remuneration for the year ended 31 March 2022 is appropriately
aligned to the Company’s performance.
Rakesh Sharma
Chairman,
Remuneration Committee
• agreeing not to award salary increases to the Executive Directors in
July 2021 given that they were set at appointment during the year
ended 31 March 2021
• reviewing and agreeing the salary review applied to the workforce
below Board level including the increases applied to the
Executive Board
• carrying out an internal evaluation of its performance and reviewing
its terms of reference
Pay and performance
In accordance with its terms of reference, the Committee continues to
ensure the clear linkage of Executive Directors’ pay and performance
to the strategy and enhancement of shareholder value.
In assessing the performance of the 2021/22 annual bonus, the
Committee considered the financial and operational performance of
the Group as well as the progress made in the continuing delivery of
the strategy. Annual bonuses for the year have been awarded at 76% of
maximum, reflecting the delivery of a strong financial performance for
the year against the backdrop of growing macroeconomic uncertainty
in the wider economy, disruption in energy markets and an acceleration
of cost pressures through the year. The Executive Team continues
to build on the strategic step change they have been managing in
the business to deliver a significantly enhanced platform with strong
shareholder returns, including opening up further growth opportunities
across the business and delivering a broader range of innovative services
and technology.
Group profit before tax of £45.6 million was ahead of target and all
strategic targets were achieved. Net revenue from continuing operations
increased by £18 million to £115.1 million, a strong performance
against the backdrop of growing uncertainty in the wider economy and
disruption in our energy markets, but below the stretching targets that
were set for bonus purposes.
The deferred annual bonus awards which were granted in 2019 in
respect of the 2018/19 annual bonus awards will vest in June 2022.
The LTIP awards granted in 2019 will be performance-tested in July
2022 but the current indication, based on a review of the formulaic
outcome of the performance conditions, is that these awards are
unlikely to vest.
Discretion
No discretion has been exercised in the year ended 31 March 2022.
Over the last two years the Committee has exercised restraint with
regards to pay and bonus awards in response to the Covid-19 pandemic
and continued cost pressures within the business. PayPoint remained
fully operational throughout the Covid-19 pandemic, did not request or
receive any government support, did not furlough any of its employees
or make any redundancies as a result of Covid-19. Dividends have
continued to be paid. A summary of the discretion exercised and
decisions made is set out in the following table:
PayPoint Plc Annual Report 202292
Directors’ Remuneration Policy – At a glance
Our Remuneration Policy, for which shareholder approval was obtained at the 2020 annual general meeting, will continue to apply without
amendment for the forthcoming year. The Policy applies to the Chairman, Executive Directors and Non–Executive Directors and full details
of this Policy can be found in the 2020 annual report which is on the Company’s website.
Executive Directors’ remuneration
The table below gives an overview of the remuneration package for Executive Directors:
Fixed pay Short-term incentives Long-term incentives
Base salary – normal salary increases should
be broadly in line with general workforce
Benefits – maximum 15% of salary
Pension – aligned with general workforce as a
% of salary
Annual Bonus and Deferred Annual Bonus
Scheme (‘DABS’) – maximum opportunity
150% of salary – 25% of any bonus is
deferred into shares for three years
Restricted Share Awards (‘RSAs’) –
maximum opportunity 75% of salary
Shareholding guidelines – 200% of salary
All-employee share plans – HMRC approved
Non-Executive Directors’ remuneration
Remuneration is set within the limits set by the Articles of Association. Non-Executive Directors are not entitled to pension contributions or other
benefits provided by the Company and do not participate in any bonus plan or receive share awards. A Non-Executive Director base fee is paid with
additional fees payable for roles with additional responsibilities.
Pay scenario charts
The charts below provide an illustration of the potential reward opportunities for the Executive Directors, and the potential split between the
dierent elements of remuneration under four dierent performance scenarios: minimum, target, maximum and maximum with share price growth.
1,800,000
1,600,000
1,400,000
1,300,000
1,000,000
800,000
600,000
400,000
200,000
0
Minimum – £907,380
Minimum – £532,575
Target – £1,317,897
Target – £794,607
Maximum – £1,420,526
Maximum – £860,115
Maximum with share price
growth – £1,602,064
Maximum with share
price growth – £956,678
Share price growth
RSA
Annual bonus
Fixed pay
Chief Executive
Finance Director
60% 41% 38% 34% 64% 43% 39% 35%
40% 31%
28%
36%
26%
32%
23%
11%
36% 33%
24% 23% 20%
10%
38% 34%
In illustrating potential reward opportunities, the following assumptions have been made for each Executive Director:
• salary eective 1 July 2022
• an approximated annual value of benefits
• 5% of salary pension provision
• a 106% of salary maximum annual bonus (with target assumed to be 80% of the maximum)
• a 75% of salary RSA for the Chief Executive and a 62.5% of salary RSA for the Finance Director. These awards vest over five years with 50%
vesting aer three years and 25% aer four and five years. Awards vest subject to continued service, satisfactory performance and a positive
assessment of performance against an underpin
• share appreciation of 50% for the RSA. Awards vest subject to continued service, satisfactory performance and a positive assessment of
performance against an underpin
• for simplicity, the value of any SIP awards are excluded
Directors’ Remuneration Report continued
Financial statements Shareholder information 93Strategic report Governance
Annual report on remuneration
The following section provides details of how PayPoint’s Remuneration Policy was implemented during the financial year ended 31 March 2022
and how it will be implemented for the year ending 31 March 2023. The following pages contain information that is required to be audited in
compliance with the Directors’ remuneration requirements of the Companies Act 2006. All narrative and quantitative tables are unaudited, unless
otherwise stated.
Role of the Remuneration Committee
The Remuneration Committee is responsible for developing policy on remuneration for Executive Directors, the Executive Board and senior
managers, and for determining specific remuneration packages for each of the Executive Directors. The Committee also reviews workforce
remuneration and related policies and the alignment of incentives and rewards with culture. The Remuneration Committee is formally constituted
with written terms of reference which set out the full remit of the Committee. The terms of reference are also available on the Company’s website
at www.corporate.paypoint.com.
During the year, the Committee sought internal support from the Chief Executive and the HR Director, who attended Committee meetings by
invitation from the Chairman, to advise on specific questions raised by the Committee and on matters relating to the performance and remuneration
of the Executive Board and senior managers. None of the above were present for any discussions that related directly to their own remuneration.
The Company Secretary attended each meeting as secretary to the Committee.
In undertaking its responsibilities, the Committee seeks independent external advice as necessary. To this end, the Committee continued to retain
the services of FIT Remuneration Consultants LLP as the principal external advisors to the Committee during the financial year. The Committee is
comfortable that the FIT team provide independent remuneration advice to the Committee and do not have any other connections with PayPoint
that may impair their independence. FIT is a founding member and signatory of the Code of Conduct for Remuneration Consultants, details of which
can be found at www.remunerationconsultantsgroup.com. During the year, FIT provided independent advice on a range of remuneration matters
including remuneration benchmarking. FIT provides no other services to the Company. The fees paid to FIT (on the basis of time and materials) in
respect of work carried out for the year under review were £15,577 (excluding VAT).
Summary of shareholder voting
The following table shows the results of the binding vote on the Remuneration Policy Report at the 24 July 2020 annual general meeting and the
advisory vote on the 2021 Annual Report on Remuneration at the 21 July 2021 annual general meeting:
Remuneration Policy Remuneration Report
Total number
of votes % of votes cast
Total number
of votes % of votes cast
For (including discretionary) 45,225,049 87.32% 44,941,726 96.77%
Against 6,565,202 12.68% 1,498,626 3.23%
Total votes cast (excluding withheld votes) 51,790,251 46,440,352
Total votes withheld
1
315,310 2,785,736
Total votes cast (including withheld votes) 52,105,561 49,226,088
1. A withheld vote is not a vote in law and is not counted in the calculation of the proportion of votes cast for and against a resolution.
Single total figure of remuneration for Executive Directors (audited)
The table below sets out a single figure for the total remuneration received by each Executive Director for the year ended 31 March 2022 and the
prior year:
Nick Wiles¹ Alan Dale²
£’000 £’000
2022 2021 2022 2021
Base salary earned 470 447 300 109
Taxable benefits³ 36 35 15 5
Pension⁴ 23 19 15 5
Total fixed pay 529 501 330 119
Annual bonus⁵ 380 499 242 115
Long-term incentives⁶ – – – –
Other⁷ 2 1 2 1
Total variable pay 382 500 244 116
Total remuneration 911 1001 574 235
1. No pay increase was awarded to the Chief Executive during the year ended 31 March 2022. Nick Wiles took a voluntary 20% reduction in pay from April-June 2020, this is
reflected in the 2021 base salary figure. Nick Wiles is a Board member of Snappy Shopper Limited although he receives no fees for this.
2. No pay increase was awarded to the Finance Director during the year ended 31 March 2022. Alan Dale was promoted to Finance Director in November 2020. The 2021
figures reflected a partial year in role.
3. Taxable value of benefits received in the year by Executive Directors relates to a benefits allowance and hotel costs (Chief Executive), car allowance, petrol, medical
insurance, life assurance and permanent health insurance (Finance Director).
4. Pension during the year: the pension rate for Executive Directors was 5% of base salary, in line with the rate oered to the wider workforce.
5. Annual bonus: this is the total bonus earned in respect of performance during the relevant year, including any deferred amounts. 25% of the annual bonus is normally
deferred in shares under the DABS.
6. Long-term incentives: for 2022 no values have been included for the 2019 LTIP award vesting as, based on interim performance measured to 31 March 2022, these awards
are unlikely to vest.
7. SIP matching and dividend shares awarded in the period valued at the average share price calculated over three months to 31 March 2022 of £6.35 (2021: £6.07).
The SIP is an HMRC-approved plan that allows participants to purchase shares using gross salary and receive matching awards from the Company. There are no
performance conditions.
PayPoint Plc Annual Report 202294
Single total figure of remuneration for the Chairman and Non-Executive Directors (audited)
The table below sets out a single figure for the total remuneration received by the Chairman and each Non-Executive Director for the year ended
31 March 2022 and the prior year:
Base fee
£’000
Committee
Chair fees
£’000
Senior Independent
Director fees
£’000
Chairman fees
£’000
Total fixed
remuneration
£’000
Total Variable
Remuneration
£’000
2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
Chairman
Giles Kerr¹ – – – – – – 165 143 165 143 – –
Non-Executive Directors
Gill Barr 49 49 – – – – – – 49 49 – –
Giles Kerr – 6 – 1 – 1 – – – 8 – –
Rakesh Sharma² 49 49 9 9 6 5 – – 64 63 – –
Ben Wishart 49 49 – – – – – – 49 49 – –
Rosie Shapland³ 49 25 9 2 – – – – 58 27 – –
Total 196 178 18 12 6 6 165 143 385 339 – –
1. Giles Kerr was appointed Chairman from May 2020.
2. Rakesh Sharma was appointed Senior Independent Director in May 2020.
3. Rosie Shapland joined the Board as an Independent Non Executive Director eective 2 October 2020 and as Chair of the Audit Committee eective 1 December 2020.
Non-Executive Directors do not receive any variable remuneration.
No changes to the fees paid to Non-Executive Directors were made during the period. Changes in total fixed remuneration reflect changes in roles
and responsibilities and appointments made during the year ended 31 March 2021.
Shareholding guidelines
PayPoint’s shareholding guidelines encourage a long-term focus and align the interests of Executive Directors with Shareholders. Executive
Directors are required to build up a shareholding in the Company equal in value to 200% of their base salary. In employment they are required to
retain 50% of any share award acquired on vesting (net of tax) until the guideline is achieved. Post-employment they are required to retain shares
equal to 100% of the shareholding guideline up until the first anniversary of cessation. Between the first and second anniversary of cessation they
will need to retain shares equal to 50% of the guideline. Executive Directors leaving the employment of PayPoint would be required to self-certify
annually in writing post-cessation that they still hold the required shares as part of their termination agreement.
Incentive outcomes for the year ended 31 March 2022
Annual bonus in respect of 2021/2022 performance (audited)
The annual bonus for the year ended 31 March 2022 was based on a combination of Group profit before tax excluding exceptional items (‘PBT’),
net revenue and strategic targets.
Details of the performance against the Group profit before tax, net revenue and strategic targets are set out below.
Profit before tax and net revenue targets:
Measure Maximum value
Threshold
(20% of maximum)
£’000
Target
(80% of maximum)
£’000
Stretch
(100% of maximum)
£’000
Actual
achieved
£’000 Nick Wiles Alan Dale
Group profit
before tax
1
64% of salary 42,500
(96.5% of target)
44,000
(100% of target)
45,500
(103.4% of target)
45,600¹ 64% of salary
(100 % of max)
64% of salary
(100% of max)
Net revenue 21% of salary 119,600
(96.5% of target)
123,900
(100% of target)
128,200
(103.4% of target)
115,100 0% of salary 0% of salary
1. The Group profit before tax value stated above excludes exceptional items which do not reflect underlying performance.
Directors’ Remuneration Report continued
Financial statements Shareholder information 95Strategic report Governance
Strategic targets:
Strategic targets for the annual bonus are set each year based on the Company’s prevailing strategic objectives at that time. Targets are set on a
measurable, quantifiable basis where possible, but due to the nature of the objective, may require some subjective assessment.
Target Performance and bonus earned
Integration of
acquisitions
Maximum value
5.3% of salary
Deliver synergies and growth opportunities through integrating acquisitions of Handepay, Merchant Rentals, i-movo and
RSM 2000.
Delivered: Integration work for acquisitions of Handepay, Merchant Rentals, RSM 2000 and i-movo completed, including
a united sales team under a new Sales Director. YouLend business finance product oered to PayPoint retailers. Card
switching proposition launched in PayPoint.
Assessment: Achieved at target. Payout 4.3% of salary (80% of maximum).
Systems resiliency
Maximum value
5.3% of salary
Invest to further improve systems resiliency and application code quality.
Delivered: New IT organisation and strategy implemented including two appointments to the Executive Board and new
role leading settlement and billing engineering. Tooling implemented to manage code quality and third party library risks.
Assessment: Achieved at target. Payout 4.3% of salary (80% of maximum).
Retailer proposition
Maximum value
5.3% of salary
Deliver further enhancements to our retailer proposition.
Delivered: Proposition significantly enhanced with launch of new products including Counter Cash live in 2,624 sites,
YouLend business finance product launched to PayPoint retailers, in excess of 1500 retailer leads introduced to Snappy
Shopper of which 269 sites are live, enhanced e-commerce oering including Randox Covid-19 test kits and in-store
merchandising of digital voucher category including Love2Shop. FMCG proposition launched with Blakemore (SPAR);
initial campaign successful.
Assessment: Achieved at target. Payout 4.3% of salary (80% of maximum).
Digital payments
platform
Maximum value
5.3% of salary
Launch new digital payments platform.
Delivered: Enhanced Direct Debit platform developed and live with Optivo. Strong pipeline of housing clients and charity
team hired to build charity sector pipeline. MultiPay new product developments launched including next generation
PayByLink service oering more payment and message options, app balance enquiries, recurring payments and low
balance notifications via text rolled out. PayByLink and card payments integration complete with Northgate.
Assessment: Achieved at target. Payout 4.3% of salary (80% of maximum).
Maximum value 21% of salary.
% of potential award 80% of maximum.
% of salary award 17% of salary.
The above objectives have been assessed as achieved and the Remuneration Committee approved a payout of 80% of maximum of this part of the
bonus award.
Total bonus awards
The above performance resulted in the following bonus awards for the year:
% of award Maximum Actual
PBT 60% 64% of salary 64% of salary
Net revenue 20% 21% of salary 0% of salary
Strategic targets 20% 21% of salary 17% of salary
Total 100% 106% of salary 81% of salary
(76% of maximum)
The Committee considers that the outcomes indicated above are reflective of the performance delivered over the year.
25% of the total bonus awarded to the Executive Directors will be deferred into shares which will vest aer three years from grant, subject to
continued employment.
PayPoint Plc Annual Report 202296
2019 LTIP vesting (audited)
With respect to the LTIP awards granted on 10 June 2019, vesting is based 50% on TSR and 50% on earnings per share (‘EPS’). The three-year
performance period for these awards ends on 10 June 2022 for the TSR element and ended on 31 March 2022 for the EPS element with vesting on
the third anniversary of the date of grant. Further details relating to these awards are provided in the table below, based on TSR calculations run to
31 March 2022:
Measure Weighting Targets
Outcome to
31 March 2022¹ % vesting¹
Relative TSR vs FTSE 250 Index
(excluding companies in the oil and gas,
mining and utilities sectors)
50% 0% vesting below median
25% vesting at median
100% vesting at upper quartile
Straight-line vesting between these points
Below threshold 0%
EPS 50% 0% vesting at less than 5% p.a.
25% vesting at 5% p.a.
100% vesting at 12% p.a. or more
Straight-line vesting between these points
Below threshold 0%
Total LTIP vesting 0%
1. Estimate based on an assessment of performance measured to 31 March 2022.
Alan Dale is the only current Executive Director for whom any awards may vest as follows:
Director
Interests
held
Implied %
vesting
Number
of shares
vesting
Date of
vesting
Value
£’000
Alan Dale 4,502 0% 0 10 June 2022 0
Scheme interests awarded in the year ended 31 March 2022 (audited)
RSAs
In the year under review, RSAs were granted with a face value of 75% of salary for the Chief Executive and 62.5% of salary for the Finance Director.
The RSAs made to Executive Directors once vested may not be sold until at least five years from grant date other than to settle any tax due.
Executive
Director
Basis of
award Number of shares Face value¹ Vesting profile Performance measures
Nick Wiles 75%
of salary
55,863 £352,495 50% aer three years
from grant, 25% aer
four years from grant
and 25% aer five
years from grant
(a) continued service;
(b) satisfactory individual performance: and
(c) a positive assessment of performance against
an underpin.
Underpin: the Committee must be satisfied that
PayPoint’s underlying performance and delivery
against its strategy and plans are sucient to
justify the level of vesting, having regard to
such factors as the Committee considers to
be appropriate in the round (including revenue,
earnings and share price performance) and the
shareholder experience more generally (including
the risk of windfall gains).
Alan Dale 62.5%
of salary
29,714 £187,495 50% aer three years
from grant, 25% aer
four years from grant
and 25% aer five
years from grant
1. Face value is based on the middle market quotation of a share in the capital of the Company on the preceding dealing day of award, 12 August 2021, of £6.31.
Directors’ Remuneration Report continued
Financial statements Shareholder information 97Strategic report Governance
Payments for loss of oce and to past Directors (audited)
• There were no payments for loss of oce in the year ended 31 March 2022.
• Rachel Kentleton stepped down from her position as Finance Director in June 2020 and details of final payments were noted in last year’s report.
On 4 June 2021 her deferred annual bonus awards granted in 2018 vested and she received 6,720 shares with a gross value of £40,387. Her LTIP
award granted in 2018 did not vest as the threshold performance conditions were not met.
• Dominic Taylor stepped down as a Director with eect from 1 April 2019. On 4 June 2021 his deferred annual bonus awards granted in 2018
vested and he received 32,210 shares with a gross value of £193,582. His LTIP award granted in 2018 did not vest as the threshold performance
conditions were not met.
• Tim Watkin-Rees stepped down as a Director with eect from 31 March 2018. On 4 June 2021 his deferred annual bonus awards granted in 2018
vested and he received 7,107 shares with a gross value of £42,713.
CEO pay ratio
The data shows how the Chief Executive’s single figure remuneration for the year ended 31 March 2022 (as taken from the single figure
remuneration table) compares to the equivalent single figure remuneration for full-time equivalent UK employees, on a Group basis, ranked at the
25th, 50th and 75th percentiles. The reduction in the pay ratio since 2021 is driven by the fact that no pay increase was awarded to the Chief
Executive during the period and the bonus award made to the Chief Executive in respect of the year ended 31 March 2022 was lower than the
award made in respect of the prior year.
CEO single figure: £910,644
Year Method
25th percentile
pay ratio Median pay ratio
75th percentile
pay ratio
2022 Option A 34:1 23:1 15:1
2021 Option A 42:1 29:1 17:1
No components of pay and benefits have been omitted for the purpose of the above calculations. Option A was selected given that this method of
calculation was considered to be the robust approach in respect of gathering the required data.
The underlying quartiles for salary and total remuneration numbers for full-time equivalent UK employees are set out below.
Salary Total pay and benefits
Year 25th percentile Median 75th percentile 25th percentile Median 75th percentile
2022 £22,255 £30,000 £51,587 £27,073 £39,138 £60,798
2021 £21,935 £30,000 £53,321 £23,663 £34,977 £59,399
The data for the three employees identified have been considered and fairly reflect pay at the relevant quartiles amongst the employee population.
Annual percentage change in remuneration of Directors and employees
The table below shows the percentage change in Director remuneration, comprising salary, taxable benefits and annual bonus, and comparable data
for the average of all employees on a full-time equivalent basis within the Company. The data in this table has been calculated based on a combined
total of the values paid for both the Chief Executive and Finance Director roles as disclosed in the single total figure table above.
Base salary/Fee Benefits Annual bonus
Executive Directors
Nick Wiles
1
N/A N/A N/A
Alan Dale
2
N/A N/A N/A
Non-Executive Directors
Gill Barr 0% N/A N/A
Giles Kerr
3
N/A N/A N/A
Rakesh Sharma
4
N/A N/A N/A
Ben Wishart 0% N/A N/A
Rosie Shapland
5
N/A N/A N/A
Employee population
6
6.2% -3.3%
7
-0.3%
1. Nick Wiles was appointed Chief Executive in May 2020 so there is no full-year comparison.
2. Alan Dale was appointed Finance Director in November 2020 so there is no full-year comparison.
3. Giles Kerr was appointed Chairman from May 2020 so there is no full-year comparison.
4. Rakesh Sharma was appointed Senior Independent Director in May 2020 and receives an annual fee for this so there is no full-year comparison.
5. Rosie Shapland joined the board in October 2020, there is no full-year comparison for this.
6. The data is based on employees who were employed by PayPoint for the entirety of both financial years but excludes those who were promoted to a new role.
7. There have been no changes to taxable benefits but the cost of providing these benefits has reduced.
PayPoint Plc Annual Report 202298
Relative importance of spend on pay
The table below shows the Company’s actual expenditure on shareholder distributions (including dividends and share buybacks) and total employee
pay expenditure for the financial years ended 31 March 2021 and 31 March 2022.
Total employee
pay expenditure
£’000
Distributions
to shareholders
£’000
2022 34,076 23,096
2021 34,212 21,385
% change -4.5% 8%
The reduction in expenditure for the year ended 31 March 2022 is driven mainly by a reduction in redundancy and termination costs compared to the
prior year.
Pay for performance
The graph below compares the value of £100 invested in PayPoint shares, including reinvested dividends, with the FTSE 250 Index (excluding
investment trusts) over the last ten years. This index was selected because it is considered to be the most appropriate index against which the
Total Shareholder Return of PayPoint could be measured.
Total Shareholder Return (’TSR’) (rebased to 100)
300
200
100
0
31 March
2012
31 March
2013
31 March
2014
31 March
2015
31 March
2016
31 March
2017
31 March
2018
31 March
2019
31 March
2020
31 March
2021
31 March
2022
PayPoint plc FTSE 250 Index (excluding Investment Trusts)
Chief Executive single figure of remuneration (£’000) 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Annual bonus payout (as % of maximum) 86% 91% 88% 31% 64% 66% 71% 0% 100% 76%
LTIP vesting (as % of maximum) 100% 100% 0% 0% 0% 30% 100% 32% 0% 0%
Directors’ shareholdings (audited)
The shareholdings of the Directors and their connected persons in the ordinary shares of the Company against their respective shareholding
requirement as at 31 March 2022:
Shares held Shareholding guidelines
Owned
outright or
vested¹
Unvested DABS
and SIP awards
subject to
holding period²
Unvested LTIP
awards subject
to holding period
and performance
conditions³
Unvested RSA
awards subject
to holding period
and underpin
Current
Shareholding⁴
Guideline
% of salary
Guideline
number of
shares⁵ Met?
Nick Wiles 70,361 20,178 115,306 80,677 200 150,883 No
Alan Dale 9,161 9,207 4,502 38,988 12,948 200 96,308 No
Giles Kerr 7,50 0
Gill Barr 2,595
Rakesh Sharma 4,270
Ben Wishart –
Rosie Shapland –
1. Includes SIP shares other than SIP matching shares and SIP dividend shares subject to a holding period.
2. Includes unvested DABS shares, SIP matching shares and SIP dividend shares subject to a holding period.
3. Unvested LTIP awards.
4. Current shareholding includes unvested deferred bonus shares and SIP shares not subject to a holding period, on a net of tax basis.
5. A three-month average share price to 31 March 2022 of £6.23 has been used to calculate the holding relative to this guideline.
The market price of the Company’s shares on 31 March 2022 was £5.82 per share (31 March 2021: £6.07 per share) and the low and high share
prices during the period were £5.22 and £7.41 respectively.
Directors’ Remuneration Report continued
Financial statements Shareholder information 99Strategic report Governance
Directors’ interests in shares in PayPoint long-term incentive plans and all-employee plans
Long-Term Incentive Awards (audited)
Type of
awards
Number of
shares at
31 March
2021
1
Number
of shares
awarded
during the
period
Number
of shares
released
during the
period
Number
of shares
lapsed
during the
period
Number of
shares at
31 March
2022
Share price
at grant
£
Value of
shares
awarded
Date of
grant
Lapse/
Release
Nick Wiles RSA¹
RSA¹
59,443
–
–
55,863
–
–
–
–
59,443
55,863
5.93
6.31
352,497
352,497
27.07.20
13.08.21
27.07.23
-27.07.25
13.08.24
-13.08.26
Alan Dale² LTIP³ 4,566 – – 4,566 – 10.10 04.06.18 04.06.21
LTIP³ 4,502 – – – 4,502 10.50 47, 271 10.06.19 10.06.22
RSA¹ 9, 274 – – – 9,274 5.93 54,995 27.07. 20 27.07. 23
RSA¹ – 29,714 – – 29,714 6.31 187,495 13.08.21 13.08.24
-13.08.26
1. For RSAs to vest the Committee must be satisfied that PayPoint’s underlying performance and delivery against its strategy and plans are sucient to justify the level
of vesting having regard to such factors as the Committee considers to be appropriate in the round (including revenue, earnings and share price performance) and the
shareholder experience more generally (including the risk of windfall gains).
2. The awards granted to Alan Dale in 2018, 2019 and 2020 were made prior to his appointment to the Board.
3. 50% of LTIP awards will only vest if the Company’s comparative TSR performance is equal to or greater than the median level of performance over the three-year
performance period, at which point 25% of awards will vest, with full vesting occurring for upper quartile performance with pro rata vesting between points. 50% of LTIP
awards will only vest if the Company’s EPS grows by 4% p.a., at which point 25% of awards will vest, with full vesting occurring for EPS growth of 10% p.a. with pro rata
vesting between points.
Deferred Annual Bonus Scheme¹ (audited)
Number of
shares at
31 March
2021
Number
of shares
awarded
during the
period
Number
of shares
released
during the
period
Number
of shares
lapsed
during the
period
Number of
shares at
31 March
2022
Share price
at grant
£
Value of
shares
awarded
£ Date of grant
Lapse/
Release
Nick Wiles – 19,785 – – 19,785 6.31 124,843 13.08.21 13.08.24
Alan Dale² 709 – 709 – – 10.10 7,161 04.06.18 04.06.21
1,025 – – – 1,025 10.50 10,763 10.06.19 10.06.22
– 7, 231 – – 7,231 6.31 45,627 13.08.21 13.08.24
1. The release of shares is dependent upon continuous employment for a period of three years from the date of grant.
2. The awards granted to Alan Dale in 2018 and 2019 were made prior to his appointment to the Board.
Share Incentive Plan (audited)
Number of
partnership
shares
purchased
at 31 March
2021
Number of
matching
shares
awarded at
31 March
2021
Number of
dividend
Shares¹
acquired at
31 March
2021
Total
shares at
31 March
2021
Number of
partnership
shares²
purchased
during the
period
Number of
matching
Shares³
awarded
during the
period
Number of
dividend
Shares
acquired
during the
period
Dates of release
of matching and
dividend Shares⁴
Total
shares at
31 March
2022
Nick Wiles 126 126 3 255 235 235 29 22.04.2024
-22.03.2025
754
Alan Dale 761 761 208 1,730 236 236 112 22.04.2024
-22.03.2025
2,314
1. Dividend shares are ordinary shares of the Company purchased with the value of dividends paid in respect of all other shares held in the plan.
2. Partnership shares are ordinary shares of the Company purchased on a monthly basis during the period (at prices from £5.91 to £7.10).
3. Matching shares are ordinary shares of the Company awarded conditionally on a monthly basis during the period (at prices from £5.91 to £7.10).
4. The dates used are based on the earliest allocation of the matching shares.
PayPoint Plc Annual Report 2022100
Service contracts and exit policy
Executive Directors
Executive Director service contracts, including arrangements for early termination, are carefully considered by the Committee. In accordance with
general market practice, each of the Executive Directors has a rolling service contract requiring 12 months’ notice of termination on either side.
Executive Director service contracts are available to view at the Company’s registered oce. Details of the service contracts of the Executive
Directors of the Company are as follows:
Name Company notice period Contract date
Nick Wiles 12 months 19 May 2020
Alan Dale 12 months 20 November 2020
There are no special provisions in service contracts relating to cessation of employment or change of control. The policy on termination is that the
Company does not make payments beyond its contractual obligations and Executive Directors will be expected to mitigate their loss. In addition, the
Remuneration Committee ensures that there are no unjustified payments for failure. Under normal circumstances, Executive Directors may receive
termination payments in lieu of notice equal to pay and benefits for the length of their contractual notice period.
Non-Executive Directors
The Non-Executive Directors do not have service contracts, rather they have letters of appointment which are subject to a three-year term. Details
of the terms of appointment of the Non-Executive Directors are set out in the table below:
Name
Start of current
three-year term
Unexpired term as at
31 March 2022 Date of appointment Notice period
Gill Barr 2 June 2021 26 months 1 June 2015 One month
Giles Kerr 20 November 2021 32½ months 20 November 2015 One month
Rakesh Sharma 12 May 2020 22½ months 12 May 2017 One month
Ben Wishart 14 November 2019 7½ months 14 November 2019 One month
Rosie Shapland 2 October 2020 18 months 2 October 2020 One month
Under the Company’s Articles of Association, all Directors are required to submit themselves for re-election every three years. However, in order to
comply with the Code, all Directors will be subject to annual re-election. Non-Executive Directors’ letters of appointment are available to view at the
Company’s registered oce.
Shareholding guidelines
PayPoint’s shareholding guidelines encourage a long-term focus and align the interests of Executive Directors with Shareholders. Executive
Directors are required to build up a shareholding in the Company equal in value to 200% of their base salary. In employment they are required to
retain 50% of any share award acquired on vesting (net of tax) until the guideline has been met. Post-employment they are required to retain shares
equal to 100% of the shareholding guideline up until the first anniversary of cessation. Between the first and second anniversary of cessation they
will need to retain shares equal to 50% of the guideline. Executive Directors leaving the employment of PayPoint would be required to self-certify
annually in writing post-cessation that they still hold the required shares as part of their termination agreement.
Implementation of Remuneration Policy for year ending 31 March 2023
Base salary
Current base salary levels, and those from 1 July 2022 (the normal salary review date), are as follows:
From
1 July 2022
From
1 July 2021 % increase
Nick Wiles £484,100 £470,000 3%
Alan Dale £309,000 £300,000 3%
Benefits
Nick Wiles will continue to receive a £25,000 annual benefits allowance in respect of car allowance, petrol, life assurance, medical insurance and
permanent health insurance. Alan Dale’s benefits will continue to comprise a car allowance, petrol, medical insurance, life assurance and permanent
health insurance.
Pension
Pension provision for Nick Wiles and Alan Dale, oered in the form of pension and/or a salary supplement, will continue to be 5% of salary, in line with
the current workforce pension provision.
Annual bonus
Annual bonus potential will continue to be set at 106% of salary for both the Chief Executive and Finance Director. Full details of the annual bonus
targets for the 2022/23 financial year and performance against the targets will be disclosed in next year’s Annual Report on Remuneration.
Directors’ Remuneration Report continued
Financial statements Shareholder information 101Strategic report Governance
RSA
RSAs to be granted in 2022 will continue to:
• be set at 75% of salary for the Chief Executive and 62.5% of salary for the Finance Director
• vest 50% aer three years from the grant date, 25% aer four years from grant and 25% aer five years from grant, subject to continued
employment, satisfactory individual performance and a positive assessment of performance against the underpin (see below)
No shares can be sold until at least five years from grant, other than those required to settle any taxes.
For RSAs granted to Executive Directors to vest, in addition to continued service, the Committee must be satisfied that PayPoint’s underlying
performance and delivery against its strategy and plans are sucient to justify the level of vesting, having regard to such factors as the Committee
considers to be appropriate in the round (including revenue, earnings and share price performance) and the shareholder experience more generally
(including the risk of windfall gains).
Chairman and Non-Executive Director fees
Chairman and Non-Executive Director fees are as follows:
From
1 July 2022
1
From
1 April 2021
Base fees
Chairman £169,950 £165,000
Non-Executive Director £49,955 £48,500
Additional fees
Chairman, Audit Committee £9,476 £9,200
Chairman, Remuneration Committee £9,476 £9,200
Senior Independent Director £6,283 £6,100
1. A 3% increase in Non-Executive Director fees has been agreed in line with the minimum increase being applied to the general workforce. Fees were last increased in
April 2019.
This Report covers the remuneration of all Directors who served during the period and was approved by the Board on 17 June 2022.
Rakesh Sharma
Chairman,
Remuneration Committee
17 June 2022
PayPoint Plc Annual Report 2022102
Directors’ Report
As at 31 March 2022:
Name of holder
Number of
ordinary shares
Percentage of
issued capital
Asteriscos Patrimonial and its group 13,751,061 19.95%
Liontrust Asset Management 8,627,139 12.52%
Schroder Investment Management
1
5,104,448 7.41%
Sanford Deland Asset Management 3,915,000 5.68%
Brown Capital Management 3, 831,743 5.56%
Columbia Threadneedle Investments 3, 457,15 0 5.02%
Premier Miton Investors 2,428,926 3.52%
The following notification(s) have been received since 1 April 2022
up to 17 June 2022. Any subsequent notifications can be found on
our website: corporate.paypoint.com/investor-centre/announcements.
Name of holder
Number of
ordinary shares
Percentage of
issued capital
Asteriscos Patrimonial and its group 14,480,095 21.011%
Liontrust Asset Management 8,578,190 12.446%
All notifications made to the Company under DTR 5 are published
via a Regulatory Information Service and made available on the
Company’s website.
Share capital
As at 31 March 2022 68,921,442 ordinary shares of 0.03 pence each
have been issued and fully paid up and are quoted on the London
Stock Exchange. During the year ended 31 March 2022, 103,193
ordinary shares were issued under the Company’s share schemes and
155, 851 shares were issued following the acquisition of i-movo in
FY2021. The rights and obligations attaching to the Company’s ordinary
shares, as well as the powers of the Company’s Directors are set out in
the Company’s Articles of Association, copies of which can be obtained
from Companies House or by writing to the Company Secretary.
There are no restrictions on the voting rights attaching to the ordinary
shares or on the transfer of securities in the Company. No person holds
securities in the Company carrying special rights with regard to control
of the Company. The Company is not aware of any agreements between
holders of securities that may result in restrictions on the transfer of
securities or on voting rights. Unless expressly specified to the contrary
in the Articles of Association of the Company, the Company’s Articles
of Association may be amended by a special resolution of the
Company’s shareholders.
As at 31 March 2022, the PayPoint Network Limited Employee Incentive
Trust (the ‘Trust’) held 769 ordinary shares in the Company for allocation
under the Company’s share schemes. Any voting or other similar
decisions in relation to the shares held by the Trust would be taken by
the trustees, who may take account of any recommendations of the
Company. The Trustees have waived their right to receive dividends of
the shares held in the Company.
At the annual general meeting on 20 July 2021, the Directors were given
authority to purchase up to 10% of the Company’s issued share capital,
allot relevant securities up to an aggregate nominal amount of £152,570
and to disapply pre-emption rights in respect of allotments of relevant
securities up to an aggregate nominal amount of £11,443 with a further
£11,443 for limited purposes. Resolutions to renew these authorities will
be proposed at the 2022 annual general meeting, details of which are
set out in the Notice of Annual General Meeting on pages 156 to 162.
Directors
The names of the Directors at the date of this report and their
biographical details are on pages 72 to 73. Their interests in the ordinary
shares of the Company are on page 98. Directors are appointed and
replaced in accordance with the Company’s Articles of Association,
the Companies Act 2006 and the Code. The powers of the Directors
are set out in the Articles of Association and the Companies Act 2006.
PayPoint Plc (the ‘Company’) is a public limited company incorporated
in England and Wales, registration number 3581541. The Company is
a holding company and its subsidiaries (a complete list of which can be
found in note 15 on pages 139 to 140) are engaged in providing
innovative services and technology connecting millions of consumers
with over 60,000 retailer partner and SME locations across multiple
sectors. The Strategic Report on pages 01 to 69 provides a review of
the business, the Group’s trading for the period ended 31 March 2022,
key performance indicators and an indication of future developments.
Directors’ Report content
As required by the Companies Act 2006 and the Disclosure Guidance
and Transparency Rule (‘DTR’) 4.1.8.R, the Directors’ Report for PayPoint
Plc comprises these pages 102 to 103 together with information in the
following sections of the annual report and accounts, all of which are
incorporated into this Directors’ Report by reference:
Information Location in annual report
Review of the business, principal
risks and uncertainties, emerging
risks and KPIs
Chief Executive’s Review; Our
Business Model; Year in Review;
Our Strategy; Key Performance
Indicators, Financial Review and
Principal Risks and Uncertainties
(includes emerging risks)
Strategy and business model Our Strategy; Our Business model
Future business developments Our Strategy
GHG emissions and non-financial
reporting:
Environmental matters
Anti-corruption and Anti-bribery
Responsible Business and
Audit Committee Report
Employment for disabled persons
and employee engagement
throughout the workforce
Responsible business,
Corporate Governance Report
S.172(1) Statement
Gender diversity Responsible Business
Business relationships,
stakeholders and their eect
on decisions
Engagement with stakeholders
and S.172(1) Statement
Use of financial instruments
and credit
Financial Review and note 27
This annual report has been prepared for, and only for, the members
of the Company, as a body, and no other persons. The Company, its
Directors, employees, agents or advisors do not accept or assume
responsibility to any other person to whom this document is shown or
into whose hands it may come and any such responsibility or liability is
expressly disclaimed.
By their nature, the statements concerning the risks and uncertainties
facing the Group in this annual report involve uncertainty since future
events and circumstances can cause results and developments to dier
materially from those anticipated. The forward-looking statements
reflect knowledge and information available at the date of preparation of
this annual report and the Company undertakes no obligation to update
these forward-looking statements. Nothing in this annual report should
be construed as a profit forecast.
Substantial shareholdings
The Company had been notified of the following disclosable interests
in the voting rights of the Company as required by DTR 5 of the FCA’s
Disclosure Guidance and Transparency Rules.
1. Holding includes CFD 1,918 shares.
Financial statements Shareholder information 103Strategic report Governance
Going concern
As at 31 March 2022 the Group had £43.9 million of net debt. As
at 31 March 2022, the Group had cash and cash equivalents of
£24.3 million, including £16.6 million of clients’ funds and retailer
partners’ deposits. In addition, following the Group-wide refinancing in
the prior year and a subsequent one-year extension which was secured
aer the end of the current financial year, the Group’s borrowing
facilities consist of a £21.7 million amortising term loan which is due
to be fully repaid over the next two financial years and an unsecured
£75.0 million revolving credit facility with a £30.0 million accordion
facility (uncommitted) expiring in February 2025. The Company’s cash
and borrowing capacity is adequate to meet the foreseeable needs
of the Group, taking into account any risks (see pages 55 to 58). The
Directors are satisfied that the Group has adequate resources to
continue in operational existence for the foreseeable future, a period
of not less than 12 months from the date of this report. Therefore, the
financial statements have been prepared on a going concern basis.
The Group’s liquidity review and commentary on the current economic
climate are shown on page 59 of the Strategic Report and commentary
on financial risk management is shown in note 27.
Independent auditor
KPMG LLP have expressed their willingness to continue as the
Company’s auditor and a resolution for their reappointment will be
proposed at the forthcoming annual general meeting. The Notice
of Annual General Meeting can be found on pages 156 to 162.
Corporate governance statement
The information that fulfils the requirements of the Corporate
Governance Statement for the purposes of the FCA’s Disclosure
Guidance and Transparency Rules can be found in this Directors’
Report and in the Corporate Governance section on pages 76 to 81
(which is incorporated into this Directors’ Report by reference).
Statement as to disclosure of information to auditor
Each of the persons who is a Director at the date of approval of this
report confirms that:
1. So far as the Director is aware, there is no relevant audit information
of which the Company’s auditor is unaware
2. The Director has taken all the steps that he/she ought reasonably
to have taken as a Director in order to make themselves aware of
any relevant audit information and to establish that the Company’s
auditor is aware of that information
This confirmation is given and should be interpreted in accordance with
the provisions of section 418 of the Companies Act 2006.
Annual general meeting
The annual general meeting will be held at PayPoint’s head oce,
1 The Boulevard, Shire Park, Welwyn Garden City AL7 1EL on 20 July
2022 at 12 noon.
The Notice of Annual General Meeting and explanatory information on
the resolutions to be passed at the annual general meeting can be found
on pages 156 to 162.
The Directors’ Report was approved by the Board and signed on its
behalf by:
Results for the year
The consolidated statements of profit or loss, comprehensive income,
financial position, changes in equity and cash flows for the year ended
31 March 2022 are set out on pages 111 to 116. An analysis of risk
is set out on pages 55 to 58, and of risk management on page 54.
Indemnity provisions for the benefits of Directors
In addition to the indemnity provisions in the Articles of Association,
the Company has entered into direct indemnity agreements with each
of the Directors. These indemnities constitute qualifying indemnities
for the purposes of the Companies Act 2006 and remain in force at the
date of approval of this report without any payment having been made
under them. The Company also maintains directors’ and ocers’ liability
insurance which gives appropriate cover for any legal action brought
against its Directors.
Change of control
All of the Company’s share schemes contain provisions relating to a
change of control. Outstanding options and awards would be prorated
for time and normally vest on a change of control, subject to the
satisfaction of any performance conditions at that time.
The Company has a revolving term credit facility for £70 million,
£5 million ancillary facilities; and a £21.7 million term loan, which expire
on 11 February 2024, with the option to extend for one year. The terms
of the facility (which includes the ancillary facilities and loan) allow for
termination on a change of control, subject to certain conditions.
There are no other significant contracts in place that would take eect,
alter or terminate on the change of control of the Company, including
compensation for loss of oce as a result of a takeover bid.
Suppliers’ payment policy
Terms of payment are agreed with individual suppliers prior to supply.
The Group aims to pay its creditors promptly, in accordance with terms
agreed for payment, provided the supplier has provided the goods or
services in accordance with the agreed terms and conditions. Further
information can be obtained from the government’s payment practice
reporting portal.
Charitable and political donations
The Group made no political donations during the year (2021: nil).
Details of the charitable donations policy can be found within the
Responsible Business section of the annual report on page 47.
Related party transactions
Related party transactions that took place during the year can be found
in note 30.
Dividends
Dividends are paid quarterly in July, September, December and March.
We have declared a final dividend of 18.0 pence per share (2021:
16.6 pence per share) payable in equal instalments of 9.0 pence per
share (2021: 8.3 pence per share) on 25 July 2022 and 30 September
2022 to shareholders on the register on 10 June 2022 and 2 September
2022 respectively. The final dividend is subject to the approval of the
shareholders at the annual general meeting on 20 July 2022.
The final dividends will result in £12.4 million (2021: £11.4 million)
being paid to shareholders from the standalone statement of financial
position of the Company which, as at 31 March 2022, had approximately
£67.9 million (2021: £59.7 million) of distributable reserves.
An interim ordinary dividend of 17.0 pence (2021: 15.6 pence) was
paid in equal instalments of 8.5 pence on 30 December 2021 and
7 March 2022.
The dividend policy including all the dividends declared during the year
is set out in the Financial Review on page 68.
Brian McLelland
Company Secretary
17 June 2022
PayPoint Plc Annual Report 2022104
Statement of Directors’ responsibilities
in respect of the annual report and the financial statements
Under applicable law and regulations, the directors are also responsible
for preparing a Strategic Report, Directors’ Report, Directors’
Remuneration Report and Corporate Governance Statement that
complies with that law and those regulations.
The directors are responsible for the maintenance and integrity of the
corporate and financial information included on the company’s website.
Legislation in the UK governing the preparation and dissemination of
financial statements may dier from legislation in other jurisdictions.
In accordance with Disclosure Guidance and Transparency Rule 4.1.14R,
the financial statements will form part of the annual financial report
prepared using the single electronic reporting format under the TD ESEF
Regulation. The auditor’s report on these financial statements provides
no assurance over the ESEF format.
Responsibility statement of the directors in respect of the
annual financial report
We confirm that to the best of our knowledge:
• the financial statements, prepared in accordance with the applicable
set of accounting standards, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the company and the
undertakings included in the consolidation taken as a whole; and
• the strategic report includes a fair review of the development and
performance of the business and the position of the issuer and
the undertakings included in the consolidation taken as a whole,
together with a description of the principal risks and uncertainties
that they face.
We consider the annual report and accounts, taken as a whole, is fair,
balanced and understandable and provides the information necessary
for shareholders to assess the Group’s position and performance,
business model and strategy.
The directors are responsible for preparing the Annual Report and
the Group and parent Company financial statements in accordance
with applicable law and regulations.
Company law requires the directors to prepare Group and parent
Company financial statements for each financial year. Under that
law they are required to prepare the Group financial statements in
accordance with UK-adopted international accounting standards
and applicable law and have elected to prepare the parent Company
financial statements on the same basis.
Under company law the directors must not approve the financial
statements unless they are satisfied that they give a true and fair view
of the state of aairs of the Group and parent Company and of the
Group’s profit or loss for that period. In preparing each of the Group
and parent Company financial statements, the directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable, relevant
and reliable;
• state whether they have been prepared in accordance with
international accounting standards in conformity with the
requirements of the Companies Act 2006 and, as regards the Group
financial statements UK-adopted international accounting standards;
• assess the Group and parent Company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern; and
• use the going concern basis of accounting unless they either
intend to liquidate the Group or the parent Company or to
cease operations, or have no realistic alternative but to do so.
The directors are responsible for keeping adequate accounting
records that are sucient to show and explain the parent Company’s
transactions and disclose with reasonable accuracy at any time the
financial position of the parent Company and enable them to ensure
that its financial statements comply with the Companies Act 2006.
They are responsible for such internal control as they determine is
necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error, and have
general responsibility for taking such steps as are reasonably open to
them to safeguard the assets of the Group and to prevent and detect
fraud and other irregularities.
Alan Dale
Finance Director
17 June 2022
Shareholder information 105Strategic report Governance Financial statements
Independent Auditor’s Report
We were first appointed as auditor by the directors on 15 August 2017.
The period of total uninterrupted engagement is for the five financial
years ended 31 March 2022. We have fulfilled our ethical responsibilities
under, and we remain independent of the Group in accordance with, UK
ethical requirements including the FRC Ethical Standard as applied to
listed public interest entities. No non-audit services prohibited by that
standard were provided.
2 Key audit matters: our assessment of risks of material
misstatement
Key audit matters are those matters that, in our professional judgement,
were of most significance in the audit of the financial statements and
include the most significant assessed risks of material misstatement
(whether or not due to fraud) identified by us, including those which
had the greatest eect on: the overall audit strategy; the allocation
of resources in the audit; and directing the eorts of the engagement
team. We summarise below the key audit matters, in decreasing order
of audit significance, in arriving at our audit opinion above, together
with our key audit procedures to address those matters and, as required
for public interest entities, our results from those procedures. These
matters were addressed, and our results are based on procedures
undertaken, in the context of, and solely for the purpose of, our audit of
the financial statements as a whole, and in forming our opinion thereon,
and consequently are incidental to that opinion, and we do not provide a
separate opinion on these matters.
1 Our opinion is unmodified
We have audited the financial statements of PayPoint plc (“the
Company”) for the year ended 31 March 2022 which comprise the
Consolidated Statement of Profit or Loss, Consolidated Statement of
Comprehensive Income, Consolidated Statement of Financial Position,
Consolidated Statement of Changes in Equity, Consolidated Statement
of Cash Flows, Company Statement of Financial Position, Company
Statement of Changes in Equity, Company Statement of Cash Flows
and the related notes, including the accounting policies in note 1.
In our opinion:
• the financial statements give a true and fair view of the state of the
Group’s and of the parent Company’s aairs as at 31 March 2022
and of the Group’s profit for the year then ended;
• the Group financial statements have been properly prepared in
accordance with UK-adopted international accounting standards;
• the parent Company financial statements have been properly
prepared in accordance with UK-adopted international accounting
standards as applied in accordance with the provisions of the
Companies Act 2006; and
• the financial statements have been prepared in accordance with
the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on
Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are
described below. We believe that the audit evidence we have obtained
is a sucient and appropriate basis for our opinion. Our audit opinion is
consistent with our report to the audit committee.
The risk Our response
Revenue recognition
(part of the revenue
within a total of
£145.1 million;
2021: £127.7 million).
Refer to page 85 (Audit
Committee Report),
page 121 (accounting
policy) and page 127
(financial disclosures).
Data capture and processing error:
The risk is that revenue transacted
through the groups network of terminals
is misstated due to inherent complexities
involved in capturing and processing the
high volume of low value transactions
generated across the Company’s o-site
terminal network. IT systems may not
be configured appropriately such that
data does not correctly flow through
the IT systems.
Our procedures included:
• Control design and operation: Testing controls, and mitigating
controls over the general IT environment, with the support of our
IT specialists to assess whether the transaction recording, billing
and general ledger systems are appropriately controlled. These
procedures included testing access to programs and data, program
change and development to address the risk of unauthorised
changes being made to the operation of IT application controls;
• Control operation: Testing key automated controls (with the
support of our IT specialists) and manual controls, including controls
that are designed to ensure reconciliations are performed between
system reports used to generate invoices and o-site terminal
network systems;
• Tests of details: Using data analytical tools to test that revenue
invoiced agrees through to cash received; and
• Tests of details: On a statistical sample basis, agreeing revenue
recorded back to supporting documentation including examination
of cash receipts from clients or third-party confirmations.
Our results
The results of our procedures were satisfactory, and we considered the
amount of revenue recognised to be acceptable (2021: acceptable).
PayPoint Plc Annual Report 2022106
2 Key audit matters: our assessment of risks of material misstatement continued
The risk Our response
Acquisition accounting
in relation to RSM 2000
(£5.6 million; 2021: nil).
Refer to page 86 (Audit
Committee Report),
page 124 (accounting
policy) and page 140
(financial disclosures).
Accounting application:
On 12 April 2021 PayPoint plc acquired
the entire share capital of RSM 2000
Limited for consideration of £6.9 million.
We identify the valuation of RSM 2000
intangibles at acquisition as a risk because
of the inherent complexity, and judgement
involved in determining an appropriate
valuation methodology, the proportion
of goodwill recorded versus acquired
intangibles, and because of the size of the
acquisition. Auditor judgement is required
to assess whether the Group’s overall
judgement reached is acceptable.
The eect of these matters is that, as
part of our risk assessment for audit
planning purposes, we determined that
the recorded intangibles had a high degree
of estimation uncertainty, with a potential
range of reasonable outcomes greater
than our materiality for the financial
statements as a whole. In conducting our
final audit work, we reassessed the degree
of estimation uncertainty to be less than
that of materiality.
Our procedures included:
• Our valuation expertise: Engaging our valuation specialists to
support the audit team to review the valuation methodology
applied and certain key assumptions included within;
• Assessing forecasts: Assessing the forecasts prepared by
management in relation to buyer-specific synergies;
• Management discussions: Discussing the rationale for the
acquisition with relevant members of the management team
to corroborate the ongoing value of assets such as the licences,
the RSM 2000 brand, and IT systems; and
• Assessing transparency: Assessing whether the Group’s
disclosures detailing the sensitivity relating to key assumptions
on the valuation of acquired intangibles are adequate.
We performed the tests above rather than seeking to rely on any
of the Group’s controls because the small number of transactions
meant that detailed testing is inherently the most eective means
of obtaining audit evidence.
Our results
We found the resulting treatment of RSM 2000 acquisition
accounting to be acceptable. We found the Group’s disclosures
to be acceptable in their description of the accounting treatment
relating to the acquisition of RSM 2000.
Acquisition accounting
in relation to i-movo
(£nil; 2021: £5.7 million).
Refer to page 87 (Audit
Committee Report),
page 126 (accounting
policy) and page 144
(financial disclosures).
Subjective estimate:
Acquisition-related liabilities include
performance based earnouts which are
estimated future payments to previous
owners of the i-movo business, which
was acquired in 2021.
The estimated future payments are based
on four revenue related targets of the
acquired entity. The potential earnout
liability is material to the Group financial
statements.
The eect of these matters is that, as part
of our risk assessment for audit planning
purposes, we determined that the recorded
liability had a high degree of estimation
uncertainty, with a potential range of
reasonable outcomes greater than our
materiality for the financial statements
as a whole. In conducting our final audit
work, we reassessed the degree of
estimation uncertainty to be less than
that of materiality.
Our procedures included:
• Accounting analysis: Using our accounting expertise to assess
the appropriateness of the approach to valuation;
• Tests of details: Assessing whether the basis of the calculation
of the earnout payment remains appropriate with reference to the
terms of the Sale and Purchase Agreement; and
• Assessing transparency: Assessing the adequacy of the Group’s
disclosures in relation to the earnout liability.
We performed the tests above rather than seeking to rely on any
of the Group’s controls because the small number of transactions
meant that detailed testing is inherently the most eective means
of obtaining audit evidence.
Our results
We found the earnout liability balance and related disclosures to
be acceptable.
Independent Auditor’s Report continued
Shareholder information 107Strategic report Governance Financial statements
The risk Our response
Recoverability of group
goodwill in relation to
i-movo and of parent’s
investment in subsidiary
in relation to i-movo
(Group: £8.8 million;
2021: £9.0 million;
Parent: £8.4 million;
2021: £8.4 million).
Refer to page 86 (Audit
Committee Report),
pages 124 and 125
(accounting policy)
and pages 135 and 139
(financial disclosures).
Forecast-based assessment:
Goodwill in the group and the carrying
amount of the parent Company’s
investment in subsidiary are significant
and at risk of irrecoverability due to the
performance of aspects of the i-movo
business versus prior forecasts. The
estimated recoverable amount of these
balances is subjective due to the inherent
uncertainty involved in forecasting and
discounting future cash flows.
The eect of these matters is that,
as part of our risk assessment, we
determined that the value in use of
goodwill and the recoverable amount of
the cost of investment in subsidiary have
a high degree of estimation uncertainty,
with a potential range of reasonable
outcomes greater than our materiality
for the financial statements as a whole,
and possibly many times that amount.
Our procedures included:
• Our sector experience: Evaluating the current level of trading,
in particular trade relating to a government contract, and the
newspaper business by considering our knowledge of the Group
and the market;
• Benchmarking assumptions: Benchmarking the assumptions
used in the cash flows included in the budgets based on key
inputs such as numbers of newspaper subscribers and government
contract users;
• Sensitivity analysis: Performing sensitivity analysis which
considered reasonably possible changes in the key assumptions
that had the greatest judgements and their impact on the valuation,
including newspaper subscribers and government contract users;
• Historical comparisons: Assessing the reasonableness of the
budgets by considering the historical accuracy of the Group’s ability
to forecast accurately and comparing to previous assumptions; and
• Assessing transparency: Assessing the adequacy of the Group’s
disclosures in respect of goodwill recoverability, and parent
Company’s disclosures in respect of the investment in subsidiary.
We performed the detailed tests above rather than seeking to rely on
any of the Group or parent Company’s controls because our knowledge
of the design of these controls indicated that we would not be able to
obtain the required evidence to support reliance on controls.
Our results
We found the goodwill balance without any impairment in the period
in the group, and the parent Company’s investment in subsidiary to
be acceptable.
We agreed to report to the Audit Committee any corrected or
uncorrected identified misstatements exceeding £0.1 million
(2021: £0.1 million), in addition to other identified misstatements
that warranted reporting on qualitative grounds.
Of the group’s 14 (2021: 13) reporting components, we subjected six
(2021: five) to full scope audits for group purposes.
The group team performed procedures on the items excluded from
normalised group profit before tax.
The components within the scope of our work accounted for the
percentages illustrated on the following page.
For the residual components, we performed analysis at an aggregated
group level to re-examine our assessment that there were no significant
risks of material misstatement within these.
The Group team approved the component materialities, which ranged
from £0.35 million to £1.40 million (2021: £0.80 million to £1.60 million),
having regard to the mix of size and risk profile of the Group across the
components. The work on all components, including the audit of the
parent Company, was performed by the Group audit team. In the prior
year, work on one component was performed by the component auditor.
We were able to rely upon the Group’s internal control over financial
reporting in several areas of our audit, where our controls testing
supported this approach, which enabled us to reduce the scope of our
substantive audit work; in the other areas the scope of the audit work
performed was fully substantive.
Last year, in response to a material acquisition in the period, we reported
the valuation of Handepay and Merchant Rentals intangible assets as a
key audit matter. We have not identified the valuation of assets of the
business combination – forecast based valuation, arising in the current
year as a risk of significant importance.
3 Our application of materiality and an overview of the scope
of our audit
Materiality for the Group financial statements as a whole was set at
£2.0m (2021: £2.0m), determined with reference to a benchmark of
Group profit before tax from continuing operations normalised to
exclude this year’s exceptional items as disclosed in note 6 (2021:
Group profit before tax from continuing operations normalised to
exclude exceptional items as disclosed in note 6 and by averaging over
three years to address the volatility due to Covid-19, of £46.1 million)
of which it represents 4.4% (2021: 4.4%).
Materiality for the parent company financial statements as a whole was
set at £1.0 million (2021: £0.8 million), determined with reference to
a benchmark of Company total assets, of which it represents 0.57%
(2021: 0.75%).
In line with our audit methodology, our procedures on individual
account balances and disclosures were performed to a lower threshold,
performance materiality, so as to reduce to an acceptable level the risk
that individually immaterial misstatements in individual account balances
add up to a material amount across the financial statements as a whole.
Performance materiality was set at 75% (2021: 75%) of materiality
for the financial statements as a whole, which equates to £1.5 million
(2021: £1.5 million) for the group and £0.75 million (2021: £0.6
million) for the parent company. We applied this percentage in our
determination of performance materiality because we did not identify
any factors indicating an elevated level of risk.
PayPoint Plc Annual Report 2022108
Group normalised profit before
tax from continuing operations
£45.6m (2021: PBT £46.1m)
Group materiality
£2.0m (2021: £2.0m)
£2.0m
Whole financial
statements materiality
(2021: £2.0m)
£1.5m
Range of materiality
at six components
(£1.40m to £0.35m)
(2021: £1.6m to £0.8m)
£100k
Misstatements reported
to the Audit Committee
(2021: £100k)
Group normalised
profit before tax from
continuing operations
Group materiality
4 Impact of climate change on our audit
In planning our audit we have considered the potential impacts of climate
change on the Group’s business and its financial statements. The Group’s
business model does not include extractive or high pollutive activities
that are a significant contributor to climate change. The Group’s main
exposure to climate risk is the shiing expectations from business
stakeholders to transition to low-carbon supply chains and greater
emphasis on climate related disclosures in the annual report.
As part of our audit we made enquiries of management and inspected
minutes from the Climate Risk Committee meetings held throughout
the year, to understand the Group’s assessment and preparedness
for climate change. We have performed a risk assessment on how the
impact of climate change may aect the financial statements and our
audit, and taking into account headroom on goodwill and nature of the
Group’s assets and liabilities, concluded that there was no significant
impact on our key audit matters, including impairment forecasts, or key
areas of our audit.
We have also read the Group’s and Parent Company’s disclosure of
climate related information in the front half of the annual report as set
out on pages 38 to 43 and considered consistency with the financial
statements and our audit knowledge.
5 Going concern
The directors have prepared the financial statements on the going
concern basis as they do not intend to liquidate the Group or the
Company or to cease their operations, and as they have concluded
that the Group’s and the Company’s financial position means that
this is realistic. They have also concluded that there are no material
uncertainties that could have cast significant doubt over their ability
to continue as a going concern for at least a year from the date of
approval of the financial statements (“the going concern period”).
We used our knowledge of the Group, its industry, and the general
economic environment to identify the inherent risks to its business
model and analysed how those risks might aect the Group’s and
Company’s financial resources or ability to continue operations over
the going concern period. The risk that we considered most likely
to adversely aect the Group’s and Company’s available financial
resources over this period was lower than expected trading volumes.
We also considered less predictable but realistic second order impacts,
such as a significant cyber incidence, or the erosion of customer or
supplier confidence, which could result in a rapid reduction of available
financial resources.
We considered whether these risks could plausibly aect the liquidity or
covenant compliance in the going concern period by comparing severe,
but plausible downside scenarios that could arise from these risks
individually and collectively against the level of available financial resources
and covenants indicated by the Group and Company’s financial forecasts.
We considered whether the going concern disclosure in note 1 to
the financial statements gives a full and accurate description of the
Directors’ assessment of going concern, including the identified risks
and related sensitivities.
Our conclusions based on this work:
• we consider that the directors’ use of the going concern basis
of accounting in the preparation of the financial statements is
appropriate;
• we have not identified, and concur with the directors’ assessment
that there is not, a material uncertainty related to events or
conditions that, individually or collectively, may cast significant doubt
on the Group’s or Company’s ability to continue as a going concern
for the going concern period;
• we have nothing material to add or draw attention to in relation to
the directors’ statement in note 1 to the financial statements on
the use of the going concern basis of accounting with no material
uncertainties that may cast significant doubt over the Group and
Company’s use of that basis for the going concern period, and we
found the going concern disclosure in note 1 to be acceptable; and
Independent Auditor’s Report continued
Full scope for Group
audit purposes 2022
Full scope for Group
audit purposes 2021
Residual components
94%
(2021: 97%)
95%
(2021: 95%)
94%
(2021: 94%)
Group revenue Group profit before tax
Group total assets Group normalised
profit before tax from
continuing operations
94
97
94
94
92%
(2021: 94%)
92
94
95
95
Shareholder information 109Strategic report Governance Financial statements
• the related statement under the Listing Rules set out on page 103
is materially consistent with the financial statements and our audit
knowledge.
However, as we cannot predict all future events or conditions and as
subsequent events may result in outcomes that are inconsistent with
judgements that were reasonable at the time they were made, the above
conclusions are not a guarantee that the Group or the Company will
continue in operation.
6 Fraud and breaches of laws and regulations – ability to detect
Identifying and responding to risks of material misstatement due
to fraud
To identify risks of material misstatement due to fraud (“fraud risks”)
we assessed events or conditions that could indicate an incentive or
pressure to commit fraud or provide an opportunity to commit fraud.
Our risk assessment procedures included:
• Enquiring of directors, the audit committee, internal audit and
inspection of policy documentation as to the Group and Company’s
high-level policies and procedures to prevent and detect fraud,
including the internal audit function, and the Group and Company’s
channel for “whistleblowing”, as well as whether they have knowledge
of any actual, suspected or alleged fraud.
• Reading Board minutes, and by attending Audit Committee meetings.
• Considering remuneration incentive schemes and performance
targets for management, and directors including the profit before tax
and net revenue targets for management remuneration.
• Using analytical procedures to identify any unusual or unexpected
relationships.
• Our forensic specialists assisted us in identifying key fraud risks.
This included holding a discussion with the engagement partner,
engagement manager and engagement quality control reviewer, and
assisting with designing relevant audit procedures to respond to the
identified fraud risks.
We communicated identified fraud risks throughout the audit team and
remained alert to any indications of fraud throughout the audit.
As required by auditing standards, and taking into account possible
pressures to meet profit targets, we perform procedures to address the
risk of management override of controls, in particular the risk that Group
and component management may be in a position to make inappropriate
accounting entries. On this audit we do not believe there is a fraud risk
related to revenue recognition because the revenue recognition policy
is simple and its application involves a low degree of estimation and
judgement.
We did not identify any additional fraud risks.
We performed procedures including:
• Identifying journal entries to test for all full scope components
based on risk criteria and comparing the identified entries to
supporting documentation. These included those posted to
unusual accounts, and round number adjustments to provisions.
• Evaluated the business purpose of significant unusual transactions.
• Assessing whether the judgements made in making accounting
estimates are indicative of a potential bias.
We discussed with the Audit Committee matters related to actual or
suspected fraud, for which disclosure is not necessary, and considered
any implications for our audit.
Identifying and responding to risks of material misstatement
related to compliance with laws and regulations
We identified areas of laws and regulations that could reasonably be
expected to have a material eect on the financial statements from our
general commercial and sector experience, and through discussion with
the directors and other management (as required by auditing standards)
and discussed with the directors and other management the policies and
procedures regarding compliance with laws and regulations.
As the Group is regulated, our assessment of risks involved gaining
an understanding of the control environment including the entity’s
procedures for complying with regulatory requirements.
We communicated identified laws and regulations throughout our team and
remained alert to any indications of non-compliance throughout the audit.
The potential eect of these laws and regulations on the financial
statements varies considerably.
Firstly, the Group is subject to laws and regulations that directly
aect the financial statements including financial reporting legislation
(including related companies legislation), distributable profits legislation,
and taxation legislation, and we assessed the extent of compliance with
these laws and regulations as part of our procedures on the related
financial statement items.
Secondly, the Group is subject to many other laws and regulations where
the consequences of non-compliance could have a material eect on
amounts or disclosures in the financial statements, for instance through
the imposition of fines or litigation. We identified the following areas as
those most likely to have such an eect: payment services legislation,
data protection laws, anti-bribery, regulatory capital and liquidity,
and certain aspects of company legislation recognising the financial
and regulated nature of the Group’s activities to provide payments
services and its legal form. Auditing standards limit the required audit
procedures to identify non-compliance with these laws and regulations
to enquiry of the directors and other management and inspection of
regulatory and legal correspondence, if any. Therefore if a breach of
operational regulations is not disclosed to us or evident from relevant
correspondence, an audit will not detect that breach.
For the regulatory matter discussed in note 21 we assessed disclosures
against our understanding from regulatory correspondence and used our
compliance specialists to help us assess the treatment and disclosure.
Context of the ability of the audit to detect fraud or breaches of
law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable
risk that we may not have detected some material misstatements in
the financial statements, even though we have properly planned and
performed our audit in accordance with auditing standards. For example,
the further removed non-compliance with laws and regulations is from
the events and transactions reflected in the financial statements,
the less likely the inherently limited procedures required by auditing
standards would identify it.
In addition, as with any audit, there remained a higher risk of non-
detection of fraud, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal controls. Our
audit procedures are designed to detect material misstatement. We are
not responsible for preventing non-compliance or fraud and cannot be
expected to detect non-compliance with all laws and regulations.
7 We have nothing to report on the other information in the
Annual Report
The directors are responsible for the other information presented in
the Annual Report together with the financial statements. Our opinion
on the financial statements does not cover the other information and,
accordingly, we do not express an audit opinion or, except as explicitly
stated below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so,
consider whether, based on our financial statements audit work, the
information therein is materially misstated or inconsistent with the
financial statements or our audit knowledge. Based solely on that work
we have not identified material misstatements in the other information.
The Company is required to include these financial statements in an
annual financial report prepared using the single electronic reporting
format specified in the TD ESEF Regulation. This auditor’s report
provides no assurance over whether the annual financial report has been
prepared in accordance with that format.
PayPoint Plc Annual Report 2022110
Strategic report and directors’ report
Based solely on our work on the other information:
• we have not identified material misstatements in the strategic
report and the directors’ report;
• in our opinion the information given in those reports for the
financial year is consistent with the financial statements; and
• in our opinion those reports have been prepared in accordance
with the Companies Act 2006.
Directors’ remuneration report
In our opinion the part of the Directors’ Remuneration Report to
be audited has been properly prepared in accordance with the
Companies Act 2006.
Disclosures of emerging and principal risks and
longer-term viability
We are required to perform procedures to identify whether there is a
material inconsistency between the directors’ disclosures in respect
of emerging and principal risks and the viability statement, and the
financial statements and our audit knowledge.
Based on those procedures, we have nothing material to add or draw
attention to in relation to:
• the directors’ confirmation within the Corporate Governance
Report on page 55 that they have carried out a robust assessment
of the emerging and principal risks facing the Group, including those
that would threaten its business model, future performance, solvency
and liquidity;
• the Principal risks and uncertainties disclosures describing these
risks and how emerging risks are identified, and explaining how
they are being managed and mitigated; and
• the directors’ explanation in the viability statement of how they have
assessed the prospects of the Group, over what period they have
done so and why they considered that period to be appropriate, and
their statement as to whether they have a reasonable expectation
that the Group will be able to continue in operation and meet
its liabilities as they fall due over the period of their assessment,
including any related disclosures drawing attention to any necessary
qualifications or assumptions.
We are also required to review the viability statement, set out on
page 59 under the Listing Rules. Based on the above procedures,
we have concluded that the above disclosures are materially
consistent with the financial statements and our audit knowledge.
Our work is limited to assessing these matters in the context of only
the knowledge acquired during our financial statements audit. As we
cannot predict all future events or conditions and as subsequent events
may result in outcomes that are inconsistent with judgements that
were reasonable at the time they were made, the absence of anything
to report on these statements is not a guarantee as to the Group’s and
Company’s longer-term viability.
Corporate governance disclosures
We are required to perform procedures to identify whether there is a
material inconsistency between the directors’ corporate governance
disclosures and the financial statements and our audit knowledge.
Based on those procedures, we have concluded that each of the
following is materially consistent with the financial statements and
our audit knowledge:
• the directors’ statement that they consider that the annual
report and financial statements taken as a whole is fair, balanced
and understandable, and provides the information necessary for
shareholders to assess the Group’s position and performance,
business model and strategy;
• the section of the annual report describing the work of the
Audit Committee, including the significant issues that the audit
committee considered in relation to the financial statements,
and how these issues were addressed; and
• the section of the annual report that describes the review of
the eectiveness of the Group’s risk management and internal
control systems.
We are required to review the part of the Corporate Governance
Statement relating to the Group’s compliance with the provisions
of the UK Corporate Governance Code specified by the Listing Rules
for our review. We have nothing to report in this respect.
8 We have nothing to report on the other matters on which we
are required to report by exception
Under the Companies Act 2006, we are required to report to you if, in
our opinion:
• adequate accounting records have not been kept by the parent
Company, or returns adequate for our audit have not been received
from branches not visited by us; or
• the parent Company financial statements and the part of the
Directors’ Remuneration Report to be audited are not in agreement
with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not
made; or
• we have not received all the information and explanations we require
for our audit.
We have nothing to report in these respects.
9 Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 104, the
directors are responsible for: the preparation of the financial statements
including being satisfied that they give a true and fair view; such internal
control as they determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether
due to fraud or error; assessing the Group and parent Company’s ability
to continue as a going concern, disclosing, as applicable, matters related
to going concern; and using the going concern basis of accounting
unless they either intend to liquidate the Group or the parent Company
or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether the
financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue our opinion in an auditor’s
report. Reasonable assurance is a high level of assurance, but does
not guarantee that an audit conducted in accordance with ISAs
(UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in aggregate, they could reasonably be
expected to influence the economic decisions of users taken on
the basis of the financial statements.
A fuller description of our responsibilities is provided on the FRC’s
website at www.frc.org.uk/auditorsresponsibilities.
10 The purpose of our audit work and to whom we owe our
responsibilities
This report is made solely to the Company’s members, as a body, in
accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
Company’s members those matters we are required to state to them
in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone
other than the Company and the Company’s members, as a body, for
our audit work, for this report, or for the opinions we have formed.
Chartered Accountants
15 Canada Square
Canary Wharf
E14 5GL
Independent Auditor’s Report continued
James Tracey
(Senior Statutory Auditor)
for and on behalf of KPMG LLP,
Statutory Auditor
17 June 2022
Shareholder information 111Strategic report Governance Financial statements
Note
Year ended
31 March
2022
£’000
Restated
1
Year ended
31 March
2021
£’000
Continuing operations
Revenue 2,3 145,144 1 2 7, 74 7
Cost of revenue 5 (4 8,725 ) (45 , 4 8 5 )
Gross profit 96 , 419 82, 262
Administrative expenses – excluding exceptional items (4 8 ,75 1 ) (4 4 , 3 7 3 )
Operating profit before exceptional items 47, 6 6 8 3 7, 8 8 9
Exceptional item – revaluation of deferred, contingent consideration liability 6 2, 880 –
Exceptional item – administrative expenses 6 – (1 5, 6 0 0 )
Operating profit 50,548 22,2 89
Finance income 13 22
Finance costs – excluding exceptional items (2 ,046 ) (1 ,4 0 9 )
Exceptional item – finance costs 6 – (4 5 9 )
Profit before tax from continuing operations 48 ,51 5 20, 4 43
Tax on continuing operations 9 (8 ,986 ) (4, 524 )
Profit from continuing operations 39 ,529 15,919
Discontinued operation
Profit from discontinued operation, net of tax 11 148 6 ,423
Exceptional item – gain on disposal of discontinued operation, net of tax 11 29,863 –
Profit for the year attributable to equity holders of the parent 69, 54 0 22, 3 42
Note
Year ended
31 March
2022
Restated
1
Year ended
31 March
2021
Earnings per share
Basic 10 101 .3 p 32 .7 p
Diluted 10 10 0.2 p 32 .4 p
Earnings per share – continuing operations
Basic 10 57. 6 p 23. 3 p
Diluted 10 5 7. 0 p 2 3.1 p
Earnings per share – continuing operations before exceptional items
Basic 10 53.4 p 43.1 p
Diluted 10 52 . 8 p 42 .9 p
Consolidated statement of comprehensive income
Note
Year ended
31 March
2022
£’000
Restated
1
Year ended
31 March
2021
£’000
Items that may subsequently be reclassified to the consolidated statement of profit or loss:
Exchange dierences on translation of foreign operation – (91 2 )
Exchange dierences on disposal of discontinued operation reclassified to profit or loss 11 1 , 645 –
Other comprehensive income/(loss) for the year 1 ,6 45 (91 2 )
Profit for the year 69, 54 0 22, 3 42
Total comprehensive income for the year attributable to equity holders of the parent 71 ,1 85 21, 43 0
1. The prior year comparatives have been restated for the retrospective application of the Group’s change in accounting policy on intangible assets. Refer to note 1 and note 32.
PayPoint Plc Annual Report 2022112
Note
31 March
2022
£’000
Restated
1
31 March
2021
£’000
Restated
1
31 March
2020
£’000
Non-current assets
Goodwill 12 57, 6 6 8 52, 0 8 5 11, 8 53
Other intangible assets 13 35, 9 9 0 3 5 , 7 17 10 , 293
Investment in associate 17 6,73 9 – –
Convertible loan note 15 75 0 – –
Property, plant and equipment 14 21 ,782 21 , 379 24 , 8 4 0
Net investment in finance lease receivables 29 4, 407 6 , 51 1 –
Deferred tax asset 23 – – 565
Total non-current assets 127,336 1 15,692 4 7, 5 51
Current assets
Inventories 332 525 214
Trade and other receivables 18 75 , 975 6 9 , 5 76 10 8 , 3 6 8
Current tax asset 4 ,1 91 2, 832 1,099
Cash and cash equivalents – clients’ funds and retailer partners’ deposits 19 16 ,6 46 28,4 0 5 35,7 3 9
Cash and cash equivalents – corporate cash 19 7, 6 5 3 10 , 535 58,03 5
Assets held for sale 11 – 5 7, 3 5 3 –
Total current assets 10 4 ,797 16 9, 226 20 3, 455
Total assets 232 , 1 33 28 4 , 918 251 , 0 0 6
Current liabilities
Trade and other payables 20 92 , 375 102, 50 4 148 , 6 21
Provision 21 – 12, 50 0 –
Deferred consideration liability 22 1,000 1 ,4 62 –
Lease liabilities 29 200 194 1 97
Loans and borrowings 28 39,6 43 63,627 70 ,000
Liabilities directly associated with the assets held for sale 11 – 4 0, 86 6 –
Total current liabilities 133 ,2 18 221 , 15 3 218, 818
Non-current liabilities
Trade and other payables – – 95
Deferred consideration liability 22 – 4, 28 5 –
Lease liabilities 29 60 253 74 4
Loans and borrowings 28 11 ,8 91 22, 95 6 –
Deferred tax liability 23 3,70 6 2 , 971 –
Total non-current liabilities 15 , 6 57 30,46 5 839
Total liabilities 1 4 8 , 875 251 , 61 8 2 19 , 657
Net assets 83,258 33, 3 0 0 31 , 3 4 9
Equity
Share capital 24 230 22 9 228
Share premium 24 1 ,000 4, 975 4, 485
Merger reserve 24 999 999 –
Share-based payment reserve 1 , 570 2,0 0 5 1 , 875
Translation reserve – (1,6 45 ) (733 )
Retained earnings 79,459 26 ,7 37 25, 49 4
Total equity attributable to equity holders of the parent 83,258 33, 3 0 0 31 , 3 4 9
1. The prior year comparatives and beginning of the preceding period have been restated for the retrospective application of the Group’s change in accounting policy on
intangible assets. Refer to note 1 and note 32. The prior year comparatives have also been restated for a retrospective measurement period adjustment to goodwill and
inventories. Refer to note 12.
These financial statements were approved by the Board of Directors and authorised for issue on 17 June 2022 and were signed on behalf of the
Board of Directors.
Nick Wiles
Chief Executive
17 June 2022
Shareholder information 113Strategic report Governance Financial statements
Note
Share capital
£’000
Share
premium
£’000
Merger
reserve
£’000
Share-based
payment
reserve
£’000
Translation
reserve
£’000
Restated
1
Retained
earnings
£’000
Restated
1
Total equity
£’000
Opening equity at 1 April 2020,
previously stated
1
Reversal of previously capitalised SaaS
implementation costs
1
Opening equity at 1 April 2020, restated
1
Profit for the year, restated
1
Exchange dierences on translation
of foreign operation – – – – (912 ) – (912 )
Comprehensive income for the year – – – – (912 ) 22, 342 21 , 430
Issue of shares 24 1 – 999 – – – 1,000
Equity-settled share-based
payment expense 25 – – – 1,066 – – 1,066
Vesting of share scheme 25 – 49 0 – (926 ) – 286 (1 50 )
Deferred tax on share-based payments 23 – – – (10 ) – – (10 )
Dividends 26 – – – – – (21, 3 8 5 ) (21 , 3 8 5 )
Closing equity at 31 March 2021, restated
1
Profit for the year – – – – – 69, 54 0 69, 54 0
Exchange dierences on translation of
foreign operation 11 – – – – 1 , 645 – 1 , 645
Comprehensive income for the year – – – – 1 ,645 6 9,5 40 71 ,1 85
Issue of shares 24 1 1 ,000 – – – – 1 ,0 01
Equity-settled share-based
payment expense 25 – – – 868 – – 868
Vesting of share scheme 25 – – – (1 , 303 ) – 1 , 303 –
Reclassification of share premium
into retained earnings 1 – (4 , 9 75 ) – – – 4 , 975 –
Dividends 26 – – – – – (23,0 96 ) (23 ,09 6 )
Closing equity at 31 March 2022 230 1,000 999 1 , 57 0 – 7 9, 459 83, 258
1. The prior year comparatives have been restated for the retrospective application of the Group’s change in accounting policy on intangible assets. Refer to note 1 and note 32.
PayPoint Plc Annual Report 2022114
Note
Year ended
31 March
2022
£’000
Restated¹
Year ended
31 March
2021
£’000
Net cash inflow from operating activities 31 22 , 552 54 ,6 43
Investing activities
Investment income 13 332
Purchases of property, plant and equipment (5, 185 ) (3, 287 )
Purchases of intangible assets (5,627 ) (7, 9 5 0 )
Acquisitions of subsidiaries net of cash acquired 16 (4,543 ) (60,800 )
Contingent consideration cash paid 22 (2,000 ) –
Purchase of investment in associate 17 (6 ,7 39 ) –
Purchase of convertible loan note 15 (75 0 ) –
Proceeds from disposal of discontinued operation net of cash disposed 11 20,159 21
Net cash used in investing activities (4 , 6 72 ) (7 1,684 )
Financing activities
Dividends paid 26 (23,0 96 ) (21 , 3 85 )
Proceeds from issue of share capital 1 1
Repayments of loans and borrowings 28 (61 , 4 6 9 ) (7 0,000 )
Proceeds from loans and borrowings 28 2 6, 420 81, 2 59
Payment of lease liabilities 29 (243 ) (2 11 )
Net cash used in financing activities (58,3 87 ) (10, 3 36 )
Net decrease in cash and cash equivalents (4 0 , 5 07 ) (2 7, 37 7 )
Cash and cash equivalents at beginning of year 64,806 9 3 , 7 74
Eect of foreign exchange rate changes – (1 , 59 1 )
Cash and cash equivalents at end of year 24,2 99 6 4, 80 6
1. The prior year comparatives have been restated for the retrospective application of the Group’s change in accounting policy on intangible assets. Refer to note 1 and note 32.
Note
31 March
2022
£’000
31 March
2021
£’000
Continuing operations
Corporate cash 7, 6 5 3 10, 53 5
Clients’ funds and retailer partners’ deposits 16 ,6 46 28,4 0 5
Cash and cash equivalents on the consolidated statement of financial position 19 2 4, 29 9 38, 940
Discontinued operation
Corporate cash – 7, 8 1 4
Clients’ funds and retailer partners’ deposits – 18,05 2
Cash and cash equivalents (discontinued operation) – 25, 8 66
Cash and cash equivalents (continuing and discontinued operations) 24 ,2 99 6 4, 80 6
Shareholder information 115Strategic report Governance Financial statements
Note
31 March
2022
£’000
31 March
2021
£’000
Non-current assets
Other intangible assets 13 – 5,539
Investments in wholly owned subsidiaries 15 139,105 138,539
Investment in associate 17 6,739 –
Convertible loan note 15 750 –
Trade and other receivables 18 26,155 27,517
Total non-current assets 172,749 171,595
Current assets
Trade and other receivables 18 3,108 9,269
Current tax asset – 2,378
Cash and cash equivalents – corporate cash 301 524
Total current assets 3,409 12,171
Total assets 176,158 183,766
Current liabilities
Trade and other payables 20 54,765 15,625
Provision 21 – 12,500
Deferred consideration liability 22 1,000 1,462
Loans and borrowings 28 37, 833 60,333
Total current liabilities 93,598 89,920
Non-current liabilities
Deferred consideration liability 22 – 4,285
Loans and borrowings 28 10,833 21,667
Total liabilities 104,431 115,872
Net assets 71,727 67,894
Equity
Share capital 24 230 229
Share premium 24 1,000 4,975
Merger reserve 24 999 999
Share-based payment reserve 1,570 2,005
Retained earnings 67,92 8 59,686
Total equity attributable to equity holders of the parent 71,727 67,89 4
The Company has taken advantage of the exemption under section 408 of the Companies Act 2006 and consequently the statement of profit
or loss of the Company is not presented as part of these financial statements. The profit of the Company for the financial year was £25.1 million
(2021: £22.3 million).
These financial statements were approved by the Board of Directors and authorised for issue on 17 June 2022 and were signed on behalf of the
Board of Directors.
Nick Wiles
Chief Executive
17 June 2022
PayPoint Plc Annual Report 2022116
Note
Share capital
£’000
Share
premium
£’000
Merger
reserve
£’000
Share-based
payment
reserve
£’000
Retained
earnings
£’000
Total equity
£’000
Opening equity at 1 April 2020 228 4,485 – 1,865 58,530 65,108
Profit for the year – – – – 22,255 22,255
Issue of shares 24 1 – 999 – – 1,000
Equity-settled share-based payment expense 25 – – – 1,066 – 1,066
Vesting of share scheme 25 – 490 – (926) 286 (150)
Dividends 26 – – – – (21,385) (21,385)
Closing equity at 31 March 2021 229 4,975 999 2,005 59,686 67,89 4
Profit for the year – – – – 25,060 25,060
Issue of shares 24 1 1,000 – – – 1,001
Equity-settled share-based payment expense 25 – – – 868 – 868
Vesting of share scheme 25 – – – (1,303) 1,303 –
Reclassification of share premium into retained earnings 1 – (4,975) – – 4,975 –
Dividends 26 – – – – (23,096) (23,096)
Closing equity at 31 March 2022 230 1,000 999 1,570 67, 928 71,727
Note
Year ended
31 March
2022
£’000
Year ended
31 March
2021
£’000
Net cash inflow from operating activities 31 28,575 5,501
Investing activities
Dividend income – 38,548
Investment income – 13
Purchases of intangible assets – (6,042)
Increased capitalisation of existing investments 15 (5,000) (1,001)
Acquisition transaction costs 15 – (2,796)
Acquisitions of subsidiaries 16 (5,944) (67, 9 03)
Contingent consideration cash paid 22 (2,000) –
Purchase of investment in associate 17 (6,739) –
Purchase of convertible loan note 15 (750) –
Proceeds from disposal of discontinued operation 11 48,063 21
Net cash from/(used in) investing activities 27,630 (39,160)
Financing activities
Dividends paid 26 (23,096) (21,385)
Proceeds from issue of share capital 1 1
Repayments of loans and borrowings 28 (57, 833) (70,000)
Proceeds from loans and borrowings 28 24,500 82,000
Net cash used in financing activities (56,428) (9,384)
Net decrease in cash and cash equivalents (223) (43,043)
Cash and cash equivalents at beginning of year 524 43,567
Cash and cash equivalents at end of year 301 524
Shareholder information 117Strategic report Governance Financial statements
1. Accounting policies
Statement of compliance with IFRS and basis of preparation
Act 2006. The Company’s ordinary shares are traded on the London Stock Exchange. The Group and Company financial statements have been
prepared in accordance with UK-adopted International Accounting Standards (“UK-adopted IFRS”), and with the requirements of the Companies Act
2006 as applicable to companies reporting under those standards.
These financial statements are presented in Pounds Sterling rounded to thousands (£’000). The Pound Sterling is the currency of the primary
economic environment in which the Group operates.
Adoption of standards and policies
The accounting policies adopted by the Group in the financial statements for the year ended 31 March 2022 have been applied consistently to
all periods set out in these group financial statements, with the exception of the following policies which are set out below and are applicable for
the first time in the year ended 31 March 2022: i) investments in associates and ii) capitalisation of costs incurred in the implementation of cloud
computing “Soware as a Service” (SaaS) arrangements.
Investments in associates
Investments in associates are accounted for using the equity method and are initially recognised at cost. The carrying amounts of the associates
are subsequently adjusted where material to recognise the Group’s share of the profit or loss aer tax, distributions received and any impairment in
value of the associates. Where the Group’s share of losses in associates exceeds the value of the investment, the Group ceases to recognise further
losses because no obligation exists for the Group to fund the losses. Where a change in net assets has been recognised directly in the associate’s
equity, the Group recognises its share of those changes in the consolidated statement of changes in equity when applicable. Adjustments are made
to align the accounting policies of the associates with the Group and to eliminate the Group’s share of unrealised gains and losses on transactions
between the Group and its associates.
Prior year restatement for implementation costs of cloud computing SaaS arrangements
During the year, the Group updated its accounting policy on intangible assets following the April 2021 International Financial Reporting Interpretations
Committee (“IFRIC”) agenda decision on the configuration and customisation costs incurred in implementing cloud computing SaaS arrangements.
The Group’s previously capitalised SaaS related costs primarily relate to the implementation costs for PayPoint’s cloud-hosted SaaS CRM platform.
Under the revised accounting policy, costs incurred in the configuration and customisation of cloud-hosted SaaS arrangements are now expensed
where they do not give rise to an identifiable intangible asset which the Group controls. Amounts paid to the cloud vendor for configuration
and customisation that are not distinct from access to the cloud soware are expensed over the SaaS contract term. In limited circumstances,
configuration and customisation costs may give rise to an identifiable intangible asset, for example, where code is created that is controlled by
the Group. The revision to the accounting policy has been accounted for retrospectively, resulting in a prior year restatement. See note 32 for the
impacts of the restatement.
The restatement represents a non-cash adjustment. The Group consolidated prior year comparatives have been restated to derecognise previously
capitalised SaaS related costs amounting to £0.8 million in the year ended 31 March 2021 which no longer meet the criteria for recognition as an
asset under IAS 38. Also, amortisation on previously capitalised intangible assets of £1.8 million for the prior year ended 31 March 2021 has been
reversed and the tax charge for the prior year ended 31 March 2021 has increased by £0.2 million. The impact of the restatements has decreased
the restated opening Group retained earnings at 1 April 2020 by £7.0 million, increased the Group’s profit for the prior year ended 31 March 2021
by £0.8 million and decreased total Group assets on the prior year balance sheet by £6.2 million.
Reclassification of Company brand intangible asset in relation to Collect+ joint arrangement
During the year ended 31 March 2017, PayPoint restructured an arrangement with Yodel Delivery Network Limited (Yodel) in the form of a 50:50
joint venture becoming a joint operation in Collect+ Group (consisting of Collect+ Holdings Limited and its wholly owned subsidiary Collect+ Brand
Limited). The joint operation licensed the use of the Collect+ brand to both Yodel and PayPoint. In the Company statement of financial position, the
arrangement was recognised as a £5.9 million investment in Collect+ Group.
At the start of the year ended 31 March 2021, PayPoint acquired the remaining 50% interest in Collect+ that Yodel owned for £6.0 million. In
the Company statement of financial position, the remaining 50% interest in Collect+ was recognised as a £6.0 million brand intangible asset and
amortised over its useful economic life of 12 years. During the current year, management reviewed the accounting treatment in the Company
financial statements in relation to its interest in Collect+ and concluded that it should have presented a brand intangible asset whilst the
arrangement was a joint operation, and transferred that asset together with the additional consideration paid into an investment in a wholly owned
subsidiary when control was obtained.
Management has decided not to re-present the prior year comparatives relating to the above item, as the adjustment is not considered material
to the Company financial statements. In the current year the £6.0 million was reclassified from a brand intangible asset to an investment on the
Company statement of financial position and £0.5m of accumulated amortisation was reversed through the Company statement of profit or loss.
The revision has no impact on the Group consolidated financial statements and represents a non-cash adjustment in the Company financial statements.
PayPoint Plc Annual Report 2022118
continued
1. Accounting policies continued
Reclassification of share premium balance
Management has reviewed the treatment of the share premium balance as at 31 March 2021 and concluded that an amount of £5.0 million should
have been presented within retained earnings. This balance was previously presented within share premium on the consolidated and Company
statements of financial position and statements of changes in equity, and relates entirely to share awards which have vested and been recycled from
the share-based payment reserve.
Management has decided not to re-present the prior year comparatives relating to the above item, as it has no impact on the consolidated
statement of profit or loss or the consolidated statement of cash flows for the prior year ended 31 March 2021 and the adjustment is not
considered significant compared to the overall amount in the consolidated statement of financial position and/or the captions aected. The revision
has not reduced distributable reserves and has not had any impact on operating profit, profit for the year, assets and liabilities or cash flows for the
year ended 31 March 2022, where the revised presentation has been adopted, or periods prior to this current year.
New and revised IFRS in issue but not yet eective
Other than the IFRIC agenda decision on the configuration and customisation costs incurred in implementing cloud computing SaaS arrangements,
no new standards or interpretations have been adopted in the Group’s accounting policies in the year ended 31 March 2022. At the date of
authorisation of these financial statements, new and revised standards issued but not yet eective are set out below. It is anticipated the adoption
of these standards and interpretations in future periods will have no material impact on the financial statements of the Group. These have not been
adopted in the Group’s accounting policies:
• IFRS 17 Insurance Contracts (eective date to be confirmed).
• Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current and Classification of Liabilities
as Current or Non-current (eective date to be confirmed).
• Amendments to IAS 37: Onerous Contracts—Cost of Fulfilling a Contract (eective date to be confirmed).
• Amendments to References to the Conceptual Framework in IFRS 3 (eective date to be confirmed).
• Amendments to IAS 16: Property, Plant and Equipment—Proceeds before Intended Use (eective date to be confirmed).
• Annual Improvements to IFRS Standards 2018-2020 (eective date to be confirmed).
• Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors to introduce a new definition for accounting estimates
(eective date to be confirmed).
• Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statements 2 Making Materiality Judgements (eective date to
be confirmed).
• Amendments to IAS 12 Income Taxes – Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction (eective date to
be confirmed).
Going concern
The financial statements have been prepared on a going concern basis. The Group manages its capital to ensure that entities in the Group will be
able to continue as a going concern while maximising the return to shareholders through the optimisation of the debt to equity balance. The capital
structure of the Group consists of debt, cash and cash equivalents and equity attributable to equity holders of the parent comprising capital,
reserves and retained earnings.
The Group’s policy is to borrow centrally to meet anticipated funding requirements. Our cash and borrowing capacity provides sucient funds to
meet the foreseeable needs of the Group. At 31 March 2022, the Group had cash and cash equivalents of £24.3 million, consisting of £7.7 million
corporate cash and £16.6 million of clients’ funds and retailer partners’ deposits. In addition, following the group-wide refinancing in the prior year
and a subsequent one-year extension which was secured aer the end of the current financial year, the Group’s borrowing facilities consist of a
£21.7 million amortising term loan which is due to be fully repaid over the next two financial years and an unsecured £75.0 million revolving credit
facility with a £30.0 million accordion facility (uncommitted) expiring in February 2025. At 31 March 2022, £27.0 million (2021: £49.5 million) was
drawn down from the revolving credit facility. At 31 March 2022 the Group also had £2.9 million (2021: £4.6 million) of block loan balances.
The Group has a strengthened statement of financial position, with net assets of £83.3 million as at 31 March 2022, having made a profit for the year
of £69.5 million and delivered net cash flows from operating activities of £22.6 million for the year then ended. During the current year the Group
received £48.6 million proceeds from the sale of the Romanian business. The proceeds were used to partly repay the revolving credit facility in April
2021. The Group had net current liabilities of £28.4 million (2021 restated: £51.9 million), with no assets or liabilities held for sale in the current
year following the sale of the Romanian business in April 2021, partial repayment of the revolving credit facility using proceeds from the sale of the
Romanian business and full utilisation of the £12.5 million Ofgem provision recognised in the prior year.
The Directors have prepared cash flow forecast scenarios for a period of at least 12 months from the date of approval of these financial statements,
taking into account the Group’s current financial and trading position, the principal risks and uncertainties and the strategic plans that are reviewed
at least annually by the Board. Additionally, the Directors have carried out an assessment of the principal risks and uncertainties and applied several
severe but plausible scenarios to further test the Group viability, which included a reduction in the volume of transactions, loss of key contracts and
under-performance of acquisitions and new products or service lines. As mitigating actions we have assumed achievable reductions in expenditure
and a reduction in the level of future dividends following the payment of the final dividend of 18.0 pence per share declared in respect of financial
year ended 31 March 2022.
The cash flow forecasts included an analysis and stress test for the above scenarios to ensure working capital movements within a reporting period
do not trigger a covenant breach. Based on this assessment, the Directors confirm that they have a reasonable expectation that the Group will be
able to continue in operation and meet its liabilities as they fall due over the period of not less than 12 months from the date of approval of these
financial statements and therefore have prepared the financial statements on a going concern basis.
Shareholder information 119Strategic report Governance Financial statements
Use of judgements and estimates
In the application of the Group’s accounting policies, the Directors are required to make judgements, estimates and assumptions about the carrying
amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant. Actual results may dier from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision aects only that period, or in the period of the revision and future periods if the revision aects both current and
future periods.
Critical judgement: initial recognition of acquired intangible assets and goodwill at fair value on acquisition of RSM 2000
The goodwill arising on a business combination represents the excess of fair value of consideration paid over the net of the identifiable assets
acquired and liabilities assumed at the acquisition date, including the recognition of acquired intangible assets. Those acquired intangible assets
are required to be recognised at fair value which reflects the exit price that would be received to sell those assets in an orderly transaction between
market participants at the measurement date and excludes buyer-specific intentions. The fair value of acquired intangible assets (acquired customer
relationships and acquired regulatory licences) recognised on the acquisition of RSM 2000 amounted to £0.4 million (6.3% of total consideration),
resulting in goodwill of £5.6 million (80.4% of total consideration). A critical judgement arises in relation to the fair value measurement of those
acquired intangible assets and therefore the residual value of goodwill, as the acquired intangible assets were not purchased in separate transactions
but rather as part of the wider RSM 2000 business combination, which makes the ‘market participant’ perspective hypothetical. Therefore, in
measuring the acquired intangible assets at fair value, management considered the types of potential market participants (e.g. competitors and
comparable companies) in order to apply assumptions that were consistent with the assumptions that market participants would use when pricing
the intangible assets. Given that the acquired intangible assets are not traded on an active market, have no recent market transactions and are
unique to RSM 2000, the customer relationships were valued using a multi period excess earnings method (MEEM) income approach and the
regulatory licenses were valued using the cost to recreate approach. The MEEM approach reflects market participant fair value by including forecast
lifetime earnings which were specifically attributable only to the customer relationships existing at the acquisition date. The discount rate applied to
the MEEM incorporates general market rates of return at the acquisition date as well as industry risks and the risks of the asset to a typical market
participant, based on an analysis of comparable companies. The cost to recreate approach reflects market participant fair value by assessing the
costs which a third party would have incurred to replace the acquired regulatory licences at the acquisition date. The residual £5.6 million goodwill
represents the future economic benefits arising from the acquisition that were not individually identified and separately recognised at the acquisition
date. The buyer-specific synergies subsumed into goodwill did not exist at the market-participant level at the acquisition date because i) they result
from combining the digital operations of PayPoint and RSM 2000 which enables PayPoint to oer new customers the full scope of digital payments
capabilities post-acquisition; ii) the new customer relationships and sectors are anticipated to arise post-acquisition but were not identifiable at the
acquisition date (including charities, not-for profit organisations, events, housing and SMEs in the UK) and iii) the workforce, operating expertise and
detailed knowledge of direct debit processing are not separately identifiable intangible assets.
Critical estimate: Valuation of the goodwill relating to cash generating unit
Accounting for goodwill and other intangible assets with an indefinite useful life, requires an annual impairment review. Paypoint has acquired four
subsidiaries I-movo, Handepay, Merchant Rentals and RSM 2000. The first three subsidiaries were acquired in the prior year and are distinct Cash
Generating Units (CGU) whilst RSM 2000 was acquired in the current year and is now part of the Digital CGU.
When testing for impairment, the recoverable amount of the CGU is measured at its value in use by discounting future expected cash flows
from the assets in that CGU. Impairment models have been built which consider expected future cash flows based on the Board approved plan.
The Board approved plan forecasts cash flows for three years and then appropriate assumptions were applied to forecast a further two years,
before appropriate long term growth rates were applied to the fih year to calculate terminal values. The discount rate used is built up from the
PayPoint WACC and then adjusted for specific risks associated with the CGU’s estimated cash flows, in particular for i-movo and Digital, higher
small entity risk. Sensitivity analysis has been applied to determine the impacts of reasonably possible changes in the assumptions used for the
value-in-use calculations.
The critical estimates when calculating the value-in-use in these impairment models are the timing of key revenue streams and the impact of
revenue growth prospects. For some recently acquired businesses, significant Directors’ judgement is required in setting these estimates as there is
invariably no relevant external or historic benchmark to suggest how well these businesses will perform once integrated as members of the Group.
Consequently, in setting estimates of high single or double digit growth in the early years following acquisition for a number of the newly acquired
businesses, the Directors are judging that PayPoint’s existing infrastructure and capabilities will facilitate such growth rates alongside those of the
acquired entities.
The CGUs are dierent sizes and at dierent stages of maturity. i-movo is a CGU with considerable growth forecast as its most significant current
contract, with DWP, only commenced in August 2021 and is expected to reach maturity for transaction levels in FY 22/23. The model assumes
ongoing continuation of this contract, or replacement by other revenue streams. The newspaper and FMCG revenue streams contribute an
insignificant amount of revenue but are forecast to grow strongly in the near term, and the Directors have confidence in the viability of the product
oering following successful pilots and other proof of concept activities this year.
Handepay and Merchant Rentals CGUs are both mature businesses in the cards sector, a highly competitive marketplace, with growth forecast to
come from increased sales activity and changes in Handepay’s acquirer relationship.
Digital CGU forecast growth is a mix of organic growth in existing business, DD and Multipay, and growth in the Housing and Charities sectors for the
combined proposition.
PayPoint Plc Annual Report 2022120
continued
1. Accounting policies continued
Critical judgement: recognition of cash and cash equivalents
The nature of payments and banking services means that PayPoint collects and holds funds on behalf of clients as those funds pass through the
settlement process and also retains retailer partners’ deposits as security for those collections.
A critical judgement in this area is whether clients’ funds and retailer partners’ deposits are recognised in the statement of financial position.
This includes evaluating:
(a) the existence of a binding agreement clearly identifying the beneficiary of the funds
(b) the identification of funds, ability to allocate and separability of funds
(c) the identification of the holder of those funds at any point in time
(d) whether PayPoint bears the credit risk
The Group evaluated the April 2022 IFRIC agenda decision on demand deposits with restrictions on use arising from a contract with a third party
and concluded that it did not have any impact on the Group’s existing accounting policy for cash and cash equivalents. Where there is a binding
agreement specifying that PayPoint holds funds on behalf of the client (i.e. acting in the capacity of a trustee) and those funds have been separately
identified as belonging to that beneficiary, the cash and the related liability are not included in the statement of financial position. In all other
situations the cash and corresponding liability are recognised on the statement of financial position. Corporate cash and clients’ funds and retailer
partners’ deposits are presented as separate line items within cash and cash equivalents on the statement of financial position.
Prior year critical judgements and estimates
Revenue recognition (agent vs principal) which was a critical judgement in the prior financial year ended 31 March 2021, is no longer considered
to be a critical judgement. The Romanian business, which was where most of the Group’s revenue as principal was recognised, was disposed of
on 8 April 2021. The cost of mobile top-ups and SIM cards as principal was £1.1 million in the current year (2021: £46.9 million), refer to note 4.
Therefore, at 31 March 2022, this judgement no longer has a significant risk of resulting in material adjustment to the amount of revenue recognised
within the next financial year.
The valuation of the deferred, contingent consideration liability arising from the i-movo acquisition, which was a critical estimate in the prior financial
year ended 31 March 2021, is no longer considered to be a critical estimate. The i-movo sale and purchase agreement includes four elements of
deferred consideration which are contingent on future performance over the earnout period and are linked to four monthly revenue growth targets
on two potential key revenue streams. The £nil valuation of the deferred, contingent consideration liability at 31 March 2022 (31 March 2021:
£5.7 million) is based on estimated future performance of the related business over the earnout period using management’s latest forecasts and
does not have a significant risk of resulting in material adjustment to the carrying amount of the deferred, contingent consideration liability within
the next financial year.
Alternative performance measures
Non-IFRS measures or alternative performance measures are used by the Directors and management for performance analysis, planning, reporting
and incentive-setting purposes and have remained consistent with the prior year. These measures are included in these financial statements to
provide additional useful information on performance and trends to shareholders.
These measures are not defined terms under IFRS and therefore they may not be comparable with similarly titled measures reported by other
companies. They are not intended to be a substitute for, or superior to, IFRS measures.
Underlying performance measures (non-IFRS measures)
Underlying performance measures allow shareholders to better understand the underlying operational performance in the year, to facilitate
comparison with prior years and to better assess trends in financial performance. They usually exclude the impact of one-o, non-recurring and
exceptional items. A reconciliation from profit before tax from continuing operations to underlying profit before tax from continuing operations is
included in note 6.
Net revenue (non-IFRS measure)
Net revenue is revenue less commissions paid to retailer partners and the cost of mobile top-ups and SIM cards where PayPoint is principal. This
reflects the benefit attributable to PayPoint’s performance eliminating pass-through costs which creates comparability where PayPoint is agent
or principal and is an important measure of the overall success of our strategy. A reconciliation from revenue to net revenue is included in note 4.
Eective tax rate (non-IFRS measure)
Eective tax rate (note 9) is the tax cost as a percentage of the net profit before tax.
Reported dividends (non-IFRS measure)
Reported dividends are based on a financial year’s results from which the dividend is declared and consist of the interim dividend paid and final
dividend declared (note 26). This is dierent to statutory dividends where the final dividend on ordinary shares is recognised in the following year
when they are approved by the Company’s shareholders.
Cash generation (non-IFRS measure)
Cash generation reflects earnings before tax, depreciation, amortisation and exceptional items adjusted for working capital (excluding movement in
clients’ funds and retailer partners’ deposits) as detailed in note 31 to the financial statements. This measures the cash generated which can be used
for tax payments, new investments and financing activities.
Total costs (non-IFRS measure)
Total costs comprise other cost of revenue (note 5), administrative expenses, finance income and finance costs. Total costs excludes
exceptional costs.
Shareholder information 121Strategic report Governance Financial statements
Underlying earnings per share from continuing operations (non-IFRS measure)
Underlying earnings per share from continuing operations (note 10) is calculated by dividing the net profit from continuing operations before
exceptional items attributable to equity holders of the parent by the basic or diluted weighted average number of ordinary shares in issue.
Underlying operating margin (non-IFRS measure)
Underlying operating margin is calculated by dividing operating profit before exceptional items from continuing operations by net revenue from
continuing operations. This measure reflects the eciency of converting revenue into profits. The calculation of operating margin before exceptional
items is as follows:
Year ended
31 March
2022
£’000
Restated
1
Year ended
31 March
2021
£’000
Operating profit from continuing operations 50,548 22,289
Adjust for:
Exceptional items – (administrative income)/expenses (2,880) 15,600
Operating profit from continuing operations before exceptional items 47,6 68 37, 8 8 9
Net revenue from continuing operations (note 4) 115,112 97,138
Underlying operating margin 41.4% 39.0%
1. The prior year comparatives have been restated for the retrospective application of the Group’s change in accounting policy on intangible assets. Refer to note 1 and
note 32.
Net corporate debt (non-IFRS measure)
Net corporate debt represents cash and cash equivalents excluding cash recognised as clients’ funds and retailer partners’ deposits, less amounts
borrowed under financing facilities (excluding IFRS 16 liabilities). The reconciliation of cash and cash equivalents to net corporate debt is as follows:
31 March
2022
£’000
31 March
2021
£’000
Cash and cash equivalents – corporate cash from continuing operations 7,653 10,535
Cash and cash equivalents – corporate cash from discontinued operation – 7, 814
Less:
Loans and borrowings (note 28) (51,534) (86,583)
Net corporate debt (43,881) (68,234)
Significant accounting policies
Basis of consolidation
PayPoint Plc (the ‘Company’) acts as a holding company. The accounts of the Company and its investments in entities controlled by the Company
(its subsidiaries) are consolidated in the Group accounts. Control is achieved when the Company has power over an entity, exposure to variable
returns and the ability to use that power to aect its returns from the entity. The Company reassesses its control over an entity if facts and
circumstances indicate that there is a change to any of the three elements of control listed above. The results of subsidiaries acquired or sold are
consolidated for the periods from or to the date on which control exists. All intergroup transactions, balances, income and expenses are eliminated
on consolidation. All the subsidiaries in the Group, a list of which are presented in note 15 of the financial statements, apply accounting policies
which are consistent with those of the Group.
The Company has an investment in an associate over which it has significant influence but not control. The results of the associate are not
consolidated but instead accounted for using the equity method as disclosed in the accounting policy for investments in associates.
Revenue
Revenue represents the value of services and goods delivered or sold to clients, retailer partners and SME partners which is measured using the
fair value of the consideration received or receivable, net of value added tax. Performance obligations are identified at contract inception and the
revenue is recognised once the performance obligations are satisfied. Upfront payments for management fees and set-up and development fees in
respect of contracts with clients, retailer partners and SME partners are deferred and recognised on a straight-line basis over the contracted period,
which appropriately reflects that the clients, retailer partners and SME partners receive and consume the benefits of those performance obligations
evenly throughout the contract.
PayPoint provides shopping and e-commerce services to retailer partners, which form part of PayPoint’s network, and SME partners. Shopping
(retail services) revenue comprises:
• Service fees from retailers that use PayPoint One, legacy terminals and EPoS, all of which are charged for on a weekly or monthly basis, and
recognised on a straight-line basis over the period of the contract. Retailers simultaneously receive and consume the benefits related to the
services fee; therefore, a straight-line approach appropriately reflects the transfer of the service.
• ATM and Counter Cash transaction fees which are recognised when each transaction is processed.
• Home delivery revenue from PayPoint’s partnership with Snappy Shopper which enables local store to door delivery and click and collect for
retailer partners. PayPoint earns a commission on the turnover which is recognised when the corresponding transactions are processed.
• Fees for receipt advertising and FMCG revenue from digital vouchering, digital screen advertising, sales data, and PayPoint’s retailer engagement
channels which is recognised over the period of the campaign on a straight-line basis.
• Operating lease income from ATMs which is recognised on a straight-line basis over the expected lease term.
• Other retail services revenue including failed Direct Debits which are recognised at the time the transaction occurs.
PayPoint Plc Annual Report 2022122
continued
1. Accounting policies continued
Shopping (card payments) revenue comprises:
• Commissions and fees from card payments which are recognised when each transaction is processed.
• Finance lease income from card terminals is recognised over the expected lease term using the sum of digits method.
• Operating lease income from card terminals which is recognised on a straight-line basis over the expected lease term.
• Commissions from PayPoint’s Business Finance products in partnership with YouLend which is earned on the loan amounts outstanding from
card payment retailers and recognised when the commission is processed.
e-commerce revenue comprises:
• Fees earned for processing parcels which are recognised when each parcel has been delivered or returned through the PayPoint network.
• Royalty income from the Collect+ brand which is recognised as the parcels are processed.
Payments and banking revenue is recognised as performance obligations are satisfied which is usually at the point in time each transaction is
processed. Other than for the sale of SIM cards as principal, PayPoint is contracted as agent in the supply of payments and banking services and
accordingly the commission earned from clients for processing transactions is recognised as revenue when each transaction is processed. Payments
and banking revenue comprises:
• Cash bill payments: customers of PayPoint’s clients can pay their bills (due to the client) over-the-counter at any of PayPoint’s retailer partners.
PayPoint provides the technology for recording the payment of bills and transmission of that payment data to the client. PayPoint then collects
bill payment funds from retailer partners and remits those funds to clients.
• Cash top-ups: customers of PayPoint’s clients can top up their mobiles over-the-counter at any of PayPoint’s retailer partners. This category also
includes revenue from the sale of SIM cards which is primarily earned from the mobile operators based on the value of top-ups aer the initial
activation. This revenue is contingent on the customer actions and is recognised at the point in time when the consumer tops up the SIM card.
PayPoint contracts as principal for SIM card sales as it obtains control of the SIM cards before transferring control to the customer, therefore
revenue is recognised at the gross sale price and cost of revenue includes the related cost.
• Digital payments: MultiPay is an integrated solution oering a full suite of digital payments. It enables transactions online and through
smartphone apps and text messages, as well as event payments, over the counter, over the phone and via interactive voice response (IVR)
systems. It also supports a full range of Direct Debit options, including scheduling collections, as well as new product developments such as
PayByLink, recurring payments and Event Streamer. CashOut enables the rapid dispersal of funds through secure digital channels, including the
Payment Exception Service which is run for the Department for Work and Pensions by i-movo, delivering payments to those without access to
a standard bank account. i-movo also issues digital newspaper vouchers which enable newspaper publishers to digitise consumer subscription
services and home news delivery in local convenience stores.
• Cash through to digital: PayPoint provides the physical network of retail locations for consumers to convert cash into electronic funds with online
organisations. Consumers pay for a ‘pin on receipt’ code in any of PayPoint’s retail locations and then can use that value online with their chosen
digital brand or service across a comprehensive portfolio of banking, e-commerce, gaming and loyalty card partners.
Cost of revenue
Cost of revenue primarily consists of expenses related to delivering our services and products. These include retailer commissions, cost of SIM cards
(where PayPoint is principal), depreciation and amortisation of assets used to deliver services, field sales costs, transaction costs, terminal and ATM
maintenance costs and telecommunications costs.
Foreign currency
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transaction. At each
reporting date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the statement of
financial position date. Non-monetary assets and liabilities carried at fair value that are denominated in foreign currency are translated at the rates
prevailing at the date when fair value was determined. Gains and losses arising on translation are included in net profit or loss for the year.
The Group does not have any overseas operations at 31 March 2022, following the disposal of the Romanian business on 8 April 2021, which was
classified as held for sale at 31 March 2021. The assets and liabilities of that foreign discontinued operation were translated at exchange rates
prevailing on the statement of financial position date. Cash flows and income statement items were translated at the average exchange rates for the
year. Exchange dierences arising on consolidation were recorded in a separate component of equity titled the translation reserve.
Goodwill and fair value adjustments arising on the acquisition of the foreign operation were historically treated as assets and liabilities of the foreign
operation and translated at the closing rate. Exchange dierences arising were recognised in other comprehensive income.
Exchange rates used for translation
31 March 2021
£’000
Romania Leu – average 5.44
Romania Leu – year end 5.77
Euro – average 1.12
Euro – year end 1.17
Financial instruments
The financial asset or liability is initially recognised when the Group becomes party to the contractual instrument. The Group classifies derivative
financial instruments, which consist of foreign exchange contracts, as held for trading and measures the financial instruments at fair value through
profit or loss. The Group’s derivative financial instruments are valued using forward exchange rates at the balance sheet date.
Shareholder information 123Strategic report Governance Financial statements
The Group discloses the fair value measurements of financial assets and liabilities using three levels as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly
(i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.
Pension costs
The Group makes payments to a number of defined contribution pension schemes. Pension costs are recognised as an expense when employees
have rendered services entitling them to the contributions. Dierences between contributions payable in the year and contributions actually paid
are shown as either accruals or prepayments in the statement of financial position.
Share-based payments
Share-based payment arrangements are equity settled. Equity-settled share-based payments are measured at fair value at the date of grant.
The fair value at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period and
adjusted for non-market-based conditions where they will not vest (i.e. leavers). For equity-settled share-based payment arrangements with
market-based vesting conditions, fair value is measured by use of a Monte Carlo simulation. The fair value of other equity-settled share-based
payment arrangements where no market-based vesting conditions exist is based on the share price at the date of the grant.
Finance income
Finance income comprises bank deposit interest received on cash and cash equivalents held at financial institutions. Interest is recognised as earned
which reflects the eective interest rate method.
Finance costs
Finance costs comprises interest costs on loans and borrowings and bank overdras. Finance costs are recognised as an expense in the period in
which they are incurred.
Retailer partner commission costs
Retailer partner commission costs represent the fees due to PayPoint’s retailer partners for providing PayPoint’s services in their store. These costs
are recognised as an expense within cost of revenue when the transaction or parcel is processed. PayPoint owns the relationship with the retailer and
accordingly recognises the cost as a principal, rather than as a pass-through cost for clients.
Exceptional items
The Group presents on the face of the consolidated statement of profit or loss those material items of income and expense which, because of the
nature and expected infrequency of the events giving rise to them, merit separate presentation to allow shareholders to understand better the
elements of financial performance in the year, to facilitate comparison with prior years and to better assess trends in financial performance.
Exceptional items are non-recurring or intermittent, and because of their nature and expected infrequency of the events giving rise to them, do not
reflect current operational performance. Examples of exceptional items include, but are not limited to:
• costs incurred as part of the acquisition and integration of acquired businesses as these are non-operational, non-recurring and material (mainly
legal, due diligence, valuation and IT integration costs and stamp duty)
• revaluation of the deferred, contingent consideration liability to fair value, as this is material and not a reflection of overall underlying operational
performance of the Group
• profit or loss items arising from changes to the Group’s capital structure, including significant refinancing, which are non-operational and material
(legal and advisory fees and write-o of unamortised arrangement fees on the old facility)
• other one-o profit or loss items which are non-recurring, material and do not reflect underlying operational performance, such as the profit from
disposal of the discontinued operation
Taxation
Until disposal of the discontinued foreign operation the Group operated in two dierent tax jurisdictions which led to some complexity in tax matters.
The Group’s policy is to pay tax when due but to minimise tax payments where practically possible, without engaging in aggressive tax schemes.
The tax expense represents the amount payable in respect of the year under review based on the taxable profit for the year and the provision for
deferred tax. Taxable profit diers from net profit as reported in the income statement because it excludes items of income or expense that are
taxable or deductible in other years and items that are not taxable or deductible.
The Group’s liability for current tax is calculated using tax rates that are applicable to the current year.
Deferred tax is provided in full on taxable temporary dierences between the tax bases of assets and liabilities and their carrying amounts. Deferred
tax is calculated using tax rates that have been substantively enacted by the balance sheet date. Deferred tax assets are recognised on deductible
temporary dierences to the extent that it is probable that future taxable profit will be available against which the tax asset will be realised. Deferred
tax liabilities are recognised for taxable temporary dierences arising on investments in subsidiaries, except where the Group is able to control the
reversal of the temporary dierence and it is probable that the temporary dierence will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that
sucient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is charged or credited in the statement of
profit or loss, except when it relates to items charged or credited to other comprehensive income or equity, in which case the deferred tax is recorded
in other comprehensive income or equity.
PayPoint Plc Annual Report 2022124
continued
1. Accounting policies continued
Business combinations
The acquisition of subsidiaries is accounted for using the acquisition method. Acquisition-related costs are recognised in profit or loss as incurred.
The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed,
and equity instruments issued by the Group in exchange for control of the acquiree. The acquired identifiable assets, liabilities and contingent
liabilities that meet the conditions for recognition under IFRS 3 Business Combinations are recognised at their fair value at the acquisition date.
When the initial accounting for a business combination is determined, it is done so on a provisional basis. Measurement period adjustments to these
provisional values may be made within 12 months of the acquisition date and are eective as at the acquisition date, if new information about facts
and circumstances that existed at the acquisition date is obtained and, if known, would have resulted in the recognition of those assets and liabilities
at that date.
Non-current assets held for sale and discontinued
A non-current asset or a group of assets containing a non-current asset (a disposal group) is classified as held for sale if its carrying amount will be
recovered through sale rather than through continuing use, it is available for immediate sale and sale is highly probable within one year.
On initial classification as held for sale, non-current assets and disposal groups are measured at the lower of previous carrying amount and fair value
less costs to sell with any adjustments taken to profit or loss. The same applies to gains and losses on subsequent remeasurement although gains
are not recognised in excess of any cumulative impairment loss. Any impairment loss on a disposal group is first allocated to goodwill, and then to
remaining assets and liabilities on pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets, employee benefit
assets and investment property, which continue to be measured in accordance with the Group’s accounting policies. Intangible assets and property,
plant and equipment once classified as held for sale or distribution are not amortised or depreciated.
A discontinued operation is a component of the Group’s business that represents a separate major line of business or geographical area of
operations that has been disposed of or is held for sale, or is a subsidiary acquired exclusively with a view to resale. Classification as a discontinued
operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. The post-tax profit or loss of the
discontinued operations is shown as a single line on the face of the consolidated income statement, separate from the continuing operating results
of the Group. When an operation is classified as a discontinued operation, the comparative income statement is restated as if the operation had
been discontinued from the start of the comparative period.
Goodwill
Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group’s interest in the fair value of the identifiable
assets and liabilities of a subsidiary at the date of acquisition. Goodwill is not amortised and is measured at the amount initially recognised less any
accumulated impairment losses.
For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units or groups of cash-generating units. The
cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication of
impairment. This is done by determining the recoverable amount. If the recoverable amount of the cash-generating unit is less than the carrying
amount, an impairment loss is recognised by first allocating the impairment to goodwill and then to the other assets on a pro-rata basis of the
carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised immediately in profit or loss and is not reversed in
subsequent years.
On disposal of a cash-generating unit, the related goodwill is included in the determination of the profit or loss on disposal.
Impairment of property, plant and equipment and other intangible assets
At each reporting date, the Group reviews the carrying amounts of its property, plant and equipment and intangible assets to determine whether
there is any indication that those assets have suered an impairment loss. If any such indication exists, the recoverable amount of the asset is
estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent
from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. An intangible asset with an
indefinite useful life and intangible assets not yet available for use are tested for impairment annually and whenever there is an indication that the
asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or
cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately.
The reversal of any impairment loss is limited by the net book value to which the relevant asset would have been reduced, had no impairment
occurred. A reversal of an impairment loss is recognised as income.
Intangible assets
Recognition on acquisition
The Group has recognised acquired brands, customer relationships and developed technology intangible assets at fair value in accordance with
IAS 38 Intangible Assets, which are amortised over their estimated useful economic lives as follows:
Brands – eleven to fieen years
Customer relationships – four to thirteen years
Developed technology – one to seven years
Shareholder information 125Strategic report Governance Financial statements
Acquired brands are valued using the relief-from-royalty method using an estimation of future revenues and a market-based royalty rate that an
acquirer would pay in an arm’s length licensing arrangement to secure access to the same rights. The theoretical royalty payments are discounted
to obtain the cash flows to determine the present asset value. A tax amortisation benefit is applied to reflect the present value of the expected
benefits of amortising the value of the intangible asset over its useful tax life.
Acquired customer relationships are valued using the multi-period excess earnings method (‘MEEM approach’) by estimating the total expected
income streams from customer relationships and deducting portions of the cash flow that can be attributed to supporting or contributory assets
(including workforce). The residual income streams are discounted. No tax amortisation benefit is applied.
Acquired developed technology is valued using a depreciated replacement cost method, which requires an estimate of all the costs a typical market
participant would incur to generate an exact replica of the intangible asset in the context of the acquired business. The depreciated replacement
cost method takes into account factors including economic and technological obsolescence.
The useful life of acquired intangible assets is based on factors including the expected usage of the asset, typical product lifecycles for the asset
(reflecting the ability to generate the expected future economic benefits with reasonably low levels of required maintenance expenditure), technical,
technological, commercial or other types of obsolescence, expected actions by competitors and the period of the contractual or other legal rights
over which the entity expects to use the asset including renewal, which determines future amortisation charges.
Development expenditure
The Group develops soware and other intangible assets including EPoS services and the digital payments platform which generate future
economic benefits through revenue from clients, retailer partners and SME partners or internal use. Development expenditure on large projects is
recognised as an intangible asset if the product or process is technically and commercially feasible and the Group intends to and has the technical
ability and sucient resources to complete development, future economic benefits are probable and if the Group can measure reliably the
expenditure attributable to the intangible asset during its development. The costs that are capitalised are the directly attributable costs necessary
to create and prepare the asset for operations. Development costs recognised as an intangible asset are amortised on a straight-line basis over its
useful life, which is between five and seven years. Other soware costs are recognised in administrative expenses when incurred.
Costs incurred in the configuration and customisation of cloud-hosted SaaS arrangements are expensed where they do not give rise to an
identifiable intangible asset which the Group controls. Amounts paid to the cloud vendor for configuration and customisation that are not distinct
from access to the cloud soware are expensed over the SaaS contract term. In limited circumstances, configuration and customisation costs may
give rise to an identifiable intangible asset, for example, where code is created that is controlled by the Group.
Property, plant and equipment
Property, plant and equipment are carried at cost less accumulated depreciation and impairment. Depreciation is provided at rates calculated to write
o the cost, less estimated residual value, of each asset on a straight-line basis over its expected useful life. The estimated useful lives are as follows
and are reviewed on an annual basis:
Freehold building fiy years
Leasehold improvements over the life of the lease
PayPoint One terminals seven years
Card terminals three to seven years
Other terminals five years
ATMs five years
Other classes of assets three to five years
The gain or loss arising on the disposal or retirement of an asset is determined as the dierence between the sale proceeds and the carrying amount
of the asset and is recognised in profit or loss.
Investments
Investments in subsidiaries and associates in the Company accounts are stated at cost less accumulated impairments.
Investments in associates in the Group accounts are initially recognised at cost and subsequently adjusted, where material, for the Group’s share of
the profit or loss aer tax, distributions received and accumulated impairments using the equity method.
Investments in convertible debt instruments (embedded derivatives) in the Group and Company accounts are stated at fair value.
Inventories
Inventories comprises stocks of SIM cards and card terminals. These are stated at the lower of cost or net realisable value.
Where PayPoint trades as principal for the sale of SIM cards, the cost of these is included in inventories. Where PayPoint acts as an agent, the cost
of these is not included in inventories.
Trade and other receivables
Trade receivables are initially recorded at fair value and represent the amount of commission due from clients or fees from retailers for which
payment has not been received, less an allowance for doubtful accounts that is estimated based on factors such as the credit rating of the customer,
historical trends, the current economic environment and other information.
PayPoint has used the expected credit loss (‘ECL’) model and has adopted an allowance matrix for trade receivables, whereby these are segmented
according to number of days outstanding and an appropriate probability of impairment is applied to each category based on historical loss
experience and adjusted for information about current and reasonable supportable future conditions.
Items in the course of collection represent gross transaction values received by retailer partners for clients which have not yet been collected by
PayPoint. PayPoint bears the credit risk for these amounts.
PayPoint Plc Annual Report 2022126
continued
1. Accounting policies continued
Accrued income
Unbilled revenue is a receivable and is presented as accrued income on the balance sheet.
Cash and cash equivalents
For the purpose of the statement of cash flows and statement of financial position, cash and cash equivalents comprise cash at bank and in hand
and short-term deposits with original maturity of less than three months and are subject to insignificant risk of changes in value. Cash consists of
both corporate cash and clients’ funds and retailer partners’ deposits.
Corporate cash consists of cash available to PayPoint for its daily operations. Clients’ funds consists of cash collected on behalf of clients from
retailer partners, but not yet transferred to clients and is held in PayPoint’s bank accounts. Retailer partners’ deposits consists of retailer partners’
funds held as security against default, except if held in trust which is disclosed o balance sheet.
Trade and other payables
Trade payables are initially recorded at fair value and represent the value of invoices received from suppliers for purchases of goods and services for
which payment has not been made.
Settlement payables represent gross transaction values received by retail agents that have not yet been settled to clients.
Deferred consideration
Where a business combination agreement provides for an adjustment to the consideration, the Group accrues the fair value, based on the estimated
additional consideration payable as a liability at the acquisition date. To the extent that the consideration is payable aer more than one year from
the acquisition date, the consideration is discounted at an appropriate interest rate and carried at net present value in the consolidated statement
of financial position. The discount component is then unwound as a finance cost in the consolidated statement of profit or loss over the life of the
earnout. Where the deferred consideration is contingent on future performance over the contractual earnout period, the liability is measured against
the contractually agreed performance targets at each subsequent reporting date with any adjustments recognised in the consolidated statement
of profit or loss. Where the contingent consideration is contractually linked to ongoing employment of the founders over the contractual period it is
treated as an expense and recognised in the consolidated statement of profit or loss.
Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of
resources will be required to settle the obligation and the amount can be reliably estimated.
Leases
The Group assesses whether a contract is a lease at inception of the contract. Where the Group is lessee, it recognises a right-of-use asset and a
corresponding lease liability, except for short-term leases and leases of low value assets. For these leases, the Group recognises the lease payment
as an operating expense on a straight-line basis over the term of the lease.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the
interest rate implicit in the lease. The lease liability is subsequently increased by the interest cost on the lease and decreased by payments made. The
lease liability is presented as a separate line in the consolidated statement of financial position. The Group remeasures the lease liability and makes
a corresponding adjustment to the right-of-use asset whenever there has been a lease payment change, the lease contract is modified or any other
significant event.
The right-of-use asset is initially measured at cost and subsequently recognised at cost less accumulated depreciation and impairment losses. The
right-of-use asset is depreciated over the shorter of the period of the expected lease term and useful life of the underlying asset. The depreciation
starts at the commencement date of the lease. The right-of-use asset is presented within property, plant and equipment. The Group applies IAS 36
to determine whether a right-of-use asset is impaired and accounts for any identified loss as described in the ‘Property, plant and equipment’ policy.
Where the Group leases assets to a third party as a lessor, the Group assesses whether the contract is a finance lease or operating lease, depending
on whether the lease transfers substantially all the risks and rewards incidental to ownership of the underlying asset.
Where the lease is a finance lease, the Group recognises as a receivable an amount equal to the net investment in the finance lease i.e. the minimum
lease payments receivable under the lease discounted at the interest rate implicit in the lease. Incremental initial direct costs of obtaining the lease
are included in the initial measurement of the net investment in the lease. This receivable is reduced as the lessee makes capital payments over the
term of the lease. The terminal lease income is recognised over the expected lease term.
Where the lease is an operating lease, lease payments are recognised as income on a straight-line basis which reflects the pattern in which economic
benefits from leasing the underlying asset are derived. The underlying asset is capitalised as property, plant and equipment and costs, including
depreciation, incurred in earning the lease income are recognised as an expense. Initial direct costs incurred in obtaining the operating lease are added
to the carrying amount of the underlying asset and recognised as an expense over the expected lease term on the same basis as the lease income.
Loans and borrowings
Loans and borrowings are initially measured at fair value, net of any attributable transaction costs, and are subsequently measured at amortised cost
using the eective interest rate method.
Dividends
Final dividends on ordinary shares are recognised in equity in the year in which they are approved by the Company’s shareholders. Interim ordinary
dividends are recognised when paid.
In the Company accounts, dividend income from investments is recognised when the shareholders’ rights to receive payment have been established.
Shareholder information 127Strategic report Governance Financial statements
Merger reserve
Merger reserve represents consideration in excess of the nominal value of shares issued on certain acquisitions.
2. Segment reporting
Segment information
The Group provides a number of dierent services and products. However, these do not meet the definition of dierent segments under IFRS 8,
as the chief operating decision maker, the Executive Board, does not review those separately to make decisions about resource allocation and
performance. Therefore, the Group has only one operating segment. A business division analysis of revenue has been provided in note 3.
Geographic information
Revenue
Year ended
31 March
2022
£’000
Year ended
31 March
2021
£’000
Continuing operations – UK 145,144 127,747
Discontinued operation
1
– Romania (note 9) 1,258 67,742
Total 146,402 195,489
1. The current year revenue from the discontinued operation represents the revenue from Romania between 1 and 8 April 2021 prior to disposal.
The total £127.3 million (2021 restated: £115.7 million) non-current assets at 31 March 2022 are geographically located within the UK.
3. Revenue
Disaggregation of revenue
Year ended
31 March
2022
£’000
Year ended
31 March
2021
£’000
Continuing operations
Shopping
Service fees 16,575 14,649
Card payments 24,951 14,058
Card terminal leases 5,566 974
ATMs 13,858 13,956
Other shopping 1,936 1,219
Shopping total 62,886 44,856
e-commerce total 13,600 11,074
Payments and banking
Cash – bill payments 36,660 39,889
Cash – top-ups 12,898 14,166
Digital 8,224 6,050
Cash through to digital 9,411 9,983
Other payments and banking 1,465 1,729
Payments and banking total 68,658 71,817
Total continuing operations 145,144 127,747
Discontinued operation – Romania
1
1,258 67,742
Total 146,402 195,489
1. The current year revenue from the discontinued operation represents the revenue from Romania between 1 and 8 April 2021 prior to disposal.
Service fee revenue of £16.6 million (2021: £14.6 million) and management fees, set-up fees and upfront lump sum payments of £1.2 million (2021:
£1.2 million) are recognised on a straight-line basis over the period of the contract. Card terminal leasing revenue of £5.6 million (2021: £1.0 million
for the 2 months since the acquisition of Merchant Rentals) is recognised over the expected lease term using the sum of digits method for finance
leases and on a straight-line basis for operating leases. The remainder of revenue is recognised at the point in time when each transaction is
processed. The usual timing of payment by customers is on fourteen-day terms.
Revenue subject to variable consideration of £10.7 million (2021: £10.3 million) exists where the consideration which PayPoint is entitled to varies
according to transaction volumes processed and rate per transaction. Management estimates the total transaction price using the expected value
method at contract inception, which is reassessed at the end of each reporting period, by applying a blended rate per transaction to estimated
transaction volumes. Any required adjustment is made against the transaction prices in the period to which it relates. The revenue is recognised at
the constrained amount to the extent that it is highly probable that the inclusion will not result in a significant revenue reversal in the future, with
the estimates based on projected transaction volumes and historical experience. The potential range in outcomes for revenue subject to variable
consideration resulting from changes in these estimates is not material.
PayPoint Plc Annual Report 2022128
continued
3. Revenue continued
Contract balances
Notes
31 March
2022
£’000
31 March
2021
£’000
Trade receivables 18 10,316 10,772
Net investment in finance lease receivables 29 6,221 10,575
Accrued income 18 4,315 3,320
Contract assets – capitalisation of fulfilment costs 18 2,057 1,889
Contract liabilities – deferral of set-up and development fees 20 (788) (1,472)
Deferred income 20 (401) (565)
PayPoint’s contract balances arise from dierences between timing of cash flow and revenue recognition, which is usually at the point in time each
transaction is processed or on a straight-line basis over the contracted period for management fees, set-up fees or upfront lump sum payments.
• The trade receivables represent PayPoint’s entitlement to consideration from clients and SME and retailer partners for services and goods
delivered and invoiced at the reporting date, where the right to payment is unconditional except for the passage of time.
• The net investment in finance lease receivables balance represents the total minimum lease payments receivable to PayPoint as lessor under
finance leases, adjusted for the incremental initial direct costs of obtaining that lease, discounted at the interest rate implicit in those leases,
with corresponding card terminal finance leasing revenue recognised over the expected lease term using the sum of digits method.
• The accrued income is a receivable which represents PayPoint’s entitlement to consideration from clients and SME and retailer partners for
services and goods delivered but not yet invoiced at the reporting date.
• The contract assets are mainly capitalised employee costs directly relating to the implementation services which are expected to be recovered
from the customer and are amortised on a straight-line basis over the period of the contract.
• The contract liabilities represent set-up and development fees which are released on a straight-line basis over the period of the contract.
• The deferred income is a contract liability which represents advance consideration received from clients and SME and retailer partners at the
reporting date, which is released with revenue recognised upon delivery of the performance obligations.
4. Net revenue (alternative performance measure)
Year ended
31 March
2022
£’000
Year ended
31 March
2021
£’000
Continuing operations
Service revenue 141,310 123,886
Sale of goods 1,183 1,343
Royalties 2,651 2,518
Total revenue from continuing operations 145,144 127,747
Less:
Retailer partners’ commissions (29,827) (30,272)
Cost of SIM card sales as principal (205) (337)
Net revenue from continuing operations 115,112 97,13 8
Discontinued operation
1
Service revenue 366 17, 842
Sale of goods 892 49,900
Total revenue from discontinued operation 1,258 67,742
Less:
Retailer partners’ commissions (101) (5,847)
Cost of mobile top-ups and SIM card sales as principal (897) (46,567)
Net revenue from discontinued operation 260 15,328
Total net revenue 115,372 112,466
1. The current year revenue and net revenue from the discontinued operation represents the revenue and net revenue from Romania between 1 and 8 April 2021 prior
to disposal.
Shareholder information 129Strategic report Governance Financial statements
5. Cost of revenue
Year ended
31 March
2022
£’000
Restated¹
Year ended
31 March
2021
£’000
Continuing operations
Retailer partners’ commissions 29,827 30,272
Cost of mobile top-ups and SIM cards as principal 205 337
Total cost of revenue deducted for net revenue 30,032 30,609
Depreciation and amortisation 7,626 7, 86 0
Field sales costs 7,548 3,174
Other 3,519 3,842
Total other costs of revenue 18,693 14,876
Total cost of revenue from continuing operations 48,725 45,485
Discontinued operation
2
Retailer partners’ commissions 101 5,847
Cost of mobile top-ups and SIM cards as principal 897 46,567
Total cost of revenue deducted for net revenue 998 52,414
Depreciation and amortisation 10 381
Other (10) 331
Total other costs of revenue – 712
Total cost of revenue from discontinued operation 998 53,126
Total cost of revenue 49,723 98,611
1. The prior year comparatives have been restated for the retrospective application of the Group’s change in accounting policy on intangible assets. Refer to note 1 and
note 32.
2. The current year cost of revenue from the discontinued operation represents the cost of revenue from Romania between 1 and 8 April 2021 prior to disposal.
6. Exceptional items
Year ended
31 March
2022
£’000
Year ended
31 March
2021
£’000
Revaluation of deferred, contingent consideration liability – administrative expenses 2,880 –
Acquisition costs expensed – administrative expenses – (2,796)
Provision in relation to Ofgem Statement of Objections – administrative expenses – (12,500)
Refinancing costs expensed – administrative expenses – (304)
Total exceptional items included in operating profit 2,880 (15,600)
Gain on disposal of discontinued operation, net of tax 29,863 –
Refinancing costs expensed – finance costs – (459)
Total exceptional items included in profit or loss 32,743 (16,059)
Reconciliation of profit before tax from continuing operations to underlying profit before tax from continuing operations
Year ended
31 March
2022
£’000
Restated¹
Year ended
31 March
2021
£’000
Profit before tax from continuing operations 48,515 20,443
Exceptional items (2,880) 16,059
Underlying profit before tax from continuing operations 45,635 36,502
1. The prior year comparatives have been restated for the retrospective application of the Group’s change in accounting policy on intangible assets. Refer to note 1 and
note 32.
PayPoint Plc Annual Report 2022130
continued
6. Exceptional items continued
Reconciliation of earnings from continuing operations to underlying earnings from continuing operations
Year ended
31 March
2022
£’000
Restated¹
Year ended
31 March
2021
£’000
Earnings from continuing operations 39,529 15,919
Exceptional items (2,880) 16,059
Tax on exceptional items – (2,462)
Underlying earnings from continuing operations 36,649 29,516
1. The prior year comparatives have been restated for the retrospective application of the Group’s change in accounting policy on intangible assets. Refer to note 1 and
note 32.
7. Employee information
Year ended
31 March
2022
£’000
Year ended
31 March
2021
£’000
Average number of employees
Sales, distribution and marketing 201 206
Operations and administration 469 503
Total 670 709
Employee costs during the year (including Directors)
Wages and salaries 28,682 28,500
Social security costs 2,902 2,411
Pension costs 2,365 2,005
Redundancy and termination costs 127 1,296
Total 34,076 34,212
Directors’ emoluments, pension contributions and share options are disclosed in the Remuneration Committee Report on pages 90 to 101.
Included within wages and salaries is a share-based payment charge of £0.9 million (2021: £1.1 million). Refer to note 25 for disclosure of share
awards made in the year.
Pension arrangements
The Group administers a number of non-contributory defined contribution schemes for employees. The amount charged in the consolidated
statement of profit or loss for the year for pension costs of the Group under the schemes was £2.4 million (2021: £2.0 million). There was no accrual
for pension contributions at the statement of financial position date (2021: £nil).
8. Profit for the year
Year ended
31 March
2022
£’000
Restated¹
Year ended
31 March
2021
£’000
Profit from continuing operations is aer (charging)/crediting:
Inventory expensed – cost of mobile top-ups and SIM cards as principal (205) (337)
Inventory expensed – Merchant Rentals card terminals 316 25
Depreciation on property, plant and equipment – cost of revenue (4,221) (4,116)
Amortisation of intangible assets – cost of revenue (3,405) (3,744)
Depreciation of property, plant and equipment – administrative expenses (547) (478)
Amortisation of intangible assets – administrative expenses (2,396) (379)
Loss on disposal of property, plant and equipment – administrative expenses (59) (57)
Government grant income (HMRC furlough scheme for Handepay and Merchant Rentals) – administrative expenses – 189
Research and development costs – administrative expenses (808) (1,093)
1. The prior year comparatives have been restated for the retrospective application of the Group’s change in accounting policy on intangible assets. Refer to note 1 and
note 32.
Shareholder information 131Strategic report Governance Financial statements
Year ended
31 March
2022
£’000
Year ended
31 March
2021
£’000
Auditor’s remuneration:
Fees payable to the Company’s auditor for the audit of the Company’s annual accounts 100 103
Fees payable to the Company’s auditor for the audit of the Company’s subsidiaries 347 367
Total audit fees 447 470
Fees payable to the Group’s auditor for the review of the interim results 38 38
Audit-related assurance services 38 38
Total auditor’s remuneration 485 508
There were no other audit-related services or fees provided in the current and prior years.
A description of the work of the Audit Committee is set out on pages 84 to 85 and includes an explanation of how auditor independence is
safeguarded by limitation of non-audit services.
Group profit before tax from continuing and discontinued operations
Year ended
31 March
2022
£’000
Restated¹
Year ended
31 March
2021
£’000
Profit before tax from continuing operations 48,515 20,443
Gain on disposal aer tax from discontinued operation (note 11) 148 7, 551
Profit up to date of disposal from discontinued operation (note 11) 29,863 –
Group profit before tax from continuing and discontinued operations 78,526 27, 9 94
1. The prior year comparatives have been restated for the retrospective application of the Group’s change in accounting policy on intangible assets. Refer to note 1 and
note 32.
9. Tax
Year ended
31 March
2022
£’000
Restated¹
Year ended
31 March
2021
£’000
Continuing operations
Current tax
Charge for current year 8,254 4,911
Adjustment in respect of prior years 86 (146)
Current tax charge 8,340 4,765
Deferred tax
Charge/(credit) for current year 577 (444)
Adjustment in respect of prior years 69 203
Deferred tax charge/(credit) 646 (241)
Total income tax charge on continuing operations 8,986 4,524
Discontinued operation
Current tax
Charge for current year – 1,107
Current tax charge – 1,107
Deferred tax
Charge for current year – 21
Deferred tax charge – 21
Total income tax charge on discontinued operation – 1,128
Total income tax charge 8,986 5,652
1. The prior year comparatives have been restated for the retrospective application of the Group’s change in accounting policy on intangible assets. Refer to note 1 and
note 32.
PayPoint Plc Annual Report 2022132
continued
9. Tax continued
The income tax charge on continuing operations is based on the UK statutory rate of corporation tax for the year of 19% (2021: 19%). Temporary
dierences have been measured using the enacted tax rates that are expected to apply when the liability is settled or the asset realised. During the
financial year, an increase in the main rate of UK corporation tax from 19% to 25% with eect from 1 April 2023 was enacted. Deferred tax has been
calculated based on the rate applicable at the date timing dierences are expected to reverse.
The income tax charge on continuing operations of £9.0 million (2021: £4.5 million) on profit before tax of £48.5 million (2021: £20.4 million)
represents an eective tax rate
1
of 18.5% (2021: 22.1%). This is lower than the UK statutory rate of 19% due to expenditure qualifying for the
capital allowances super deduction, research and development credits and the non-taxable exceptional item in the current year, partially oset by
the impact of revaluing the deferred tax liability following the enactment of the increased main rate of UK corporation tax from 19% to 25% with
eect from 1 April 2023. The eective tax rate is lower than the prior year due to the disallowable acquisition and disposal costs in the prior year
together with the super deduction, research and development credits and the non-taxable exceptional item in the current year, partially oset by the
impact of revaluing the deferred tax liability following the enactment of the increased main rate of UK corporation tax from 19% to 25% with eect
from 1 April 2023.
1. Eective tax rate is the tax cost as a percentage of profit before tax on continuing operations.
Year ended
31 March
2022
£’000
Restated¹
Year ended
31 March
2021
£’000
Profit before tax from continuing operations 48,515 20,443
Tax at the UK corporation tax rate of 19% (2021: 19%) 9,218 3,884
Tax eects of:
(Non-taxable income)/disallowable expenses (726) 508
Adjustments in respect of prior years 155 57
Tax impact of share-based payments (3) 75
Revaluation of deferred tax liability 889 –
Non-taxable exceptional item (547) –
Actual amount of tax charge on continuing operations 8,986 4,524
1. The prior year comparatives have been restated for the retrospective application of the Group’s change in accounting policy on intangible assets. Refer to note 1 and
note 32.
The eective tax rate on the discontinued operation was 0.0% (2021: 14.9%) because the gain on disposal of the discontinued operation was
exempt from UK corporation tax under the substantial shareholding exemption.
10. Earnings per share
Basic and diluted earnings per share are calculated on the following profit and number of shares.
Year ended
31 March
2022
£’000
Restated¹
Year ended
31 March
2021
£’000
Total profit for basic and diluted earnings per share is the net profit attributable to equity holders of the parent 69,540 22,342
Continuing operations
Profit for basic and diluted earnings per share is the net profit from continuing operations attributable to equity
holders of the parent 39,529 15,919
Continuing operations – underlying
Profit for basic and diluted earnings per share is the net profit from continuing operations before exceptional items
attributable to equity holders of the parent 36,649 29,516
Discontinued operation
Profit for basic and diluted earnings per share is the net profit from discontinued operation attributable to equity holders
of the parent 30,011 6,423
Shareholder information 133Strategic report Governance Financial statements
31 March
2022
Number
of shares
Thousands
31 March
2021
Number
of shares
Thousands
Weighted average number of ordinary shares in issue (for basic earnings per share) 68,631 68,406
Potential dilutive ordinary shares:
Long-term incentive plan 164 164
Restricted share awards 408 197
Deferred annual bonus scheme 108 62
SIP and other 58 50
Weighted average number of ordinary shares in issue (for diluted earnings per share) 69,369 68,879
Earnings per share (pence)
Year ended
31 March
2022
Restated¹
Year ended
31 March
2021
Basic 101.3 32.7
Diluted 100.2 32.4
1. The prior year comparatives have been restated for the retrospective application of the Group’s change in accounting policy on intangible assets. Refer to note 1 and
note 32.
Earnings per share – continuing operations (pence)
Year ended
31 March
2022
Restated¹
Year ended
31 March
2021
Basic 57.6 23.3
Diluted 57.0 23.1
Underlying earnings per share – continuing operations before exceptional items (pence)
Year ended
31 March
2022
Restated¹
Year ended
31 March
2021
Basic 53.4 43.1
Diluted 52.8 42.9
Earnings per share – discontinued operation (pence)
Year ended
31 March
2022
Year ended
31 March
2021
Basic 43.7 9.4
Diluted 43.2 9.3
1. The prior year comparatives have been restated for the retrospective application of the Group’s change in accounting policy on intangible assets. Refer to note 1 and
note 32.
11. Discontinued operation
The sale of the Romanian business, PayPoint Services SRL, to Innova Capital completed on 8 April 2021 following regulatory and other customary
approvals. The sale was consistent with PayPoint’s focus on its key strategic priorities and the delivery of enhanced growth and value in its core
UK markets.
Cash proceeds of £48.3 million were received in April 2021 and were used to partly repay the revolving credit facility and reduce net corporate debt.
A further £0.3m working capital adjustment was received on 2 November 2021. The Group profit from the discontinued operation was £30.0 million:
Group
Year ended
31 March
2022
£’000
Total disposal proceeds received 48,585
Costs of disposal (1,010)
Carrying amount of net assets sold (16,067)
Gain on sale before income tax and reclassification of foreign currency translation reserve 31,508
Reclassification of foreign currency translation reserve to profit or loss (1,645)
Tax charge on discontinued operation –
Gain on disposal aer tax 29,863
Profit up to date of disposal 148
Profit from discontinued operation (attributable to owners of the Company) 30,011
PayPoint Plc Annual Report 2022134
continued
11. Discontinued operation continued
Company
Year ended
31 March
2022
£’000
Total disposal proceeds received 48,585
Costs of disposal (522)
Carrying value of investment in discontinued operation in Company statement of financial position (note 15) (17,420)
Profit from discontinued operation (attributable to owners of the Company) 30,643
The gain on disposal of the discontinued operation was exempt from UK corporation tax under the substantial shareholding exemption.
The major classes of assets and liabilities comprising the carrying amount of net assets sold (and classified as held for sale in the prior year) were
as follows:
8 April
2021
£’000
31 March
2021
£’000
Assets
Goodwill 11,149 11,149
Other intangible assets 455 455
Property, plant and equipment 2,242 2,242
Deferred tax asset – –
Inventories 124 124
Trade and other receivables 20,033 17,517
Corporate cash 7,814 7, 814
Clients’ funds and retailer partners’ deposits 20,090 18,052
Total assets of discontinued operation 61,907 57, 353
Liabilities
Trade and other payables 44,928 39,954
Lease liabilities 707 707
Current tax liability 201 201
Deferred tax liability 4 4
Total liabilities of discontinued operation 45,840 40,866
Net assets of discontinued operation 16,067 16,487
The net assets of the discontinued operation were assessed to ensure their fair value less costs to sell were greater than their carrying value. The
proceeds of the disposal substantially exceeded the carrying amount of the related net assets and accordingly no impairment loss was recognised
prior to disposal.
The current period results of the discontinued operation up to the date of disposal and the gain on disposal aer tax have been included in the total
Group profit for the year as follows:
Period from
1 to 8 April
2021
£’000
Year ended
31 March
2021
£’000
Revenue 1,258 67,742
Cost of revenue (998) (53,126)
Gross profit 260 14,616
Expenses (112) ( 7,188)
Operating profit 148 7,428
Finance income – 311
Finance costs – (188)
Profit before tax 148 7, 551
Tax – (1,128)
Gain on disposal 29,863 –
Post-tax profit from discontinued operation attributable to equity holders of the parent 30,011 6,423
Shareholder information 135Strategic report Governance Financial statements
Cash flows from discontinued operation
Period from
1 to 8 April
2021
£’000
Year ended
31 March
2021
£’000
Net cash from operations 2,038 11,018
Net cash used in investing activities – (689)
Net cash used in financing activities – dividends paid to the Company – ( 7,146 )
Net cash disposed as part of discontinued operation (27,904) –
Net (decrease)/increase in cash and cash equivalents (25,866) 3,183
Cash and cash equivalents at beginning of year 25,866 24,328
Eect of foreign exchange rate changes – (1,645)
Cash and cash equivalents at end of year – 25,866
The Group proceeds from the disposal of the discontinued operation net of cash disposed were £20.2 million:
Group
Year ended
31 March
2022
£’000
Total disposal proceeds received 48,585
Costs of disposal (522)
Corporate cash held for sale in the discontinued operation (7,814)
Clients’ funds and retailer partners’ deposits held for sale in the discontinued operation (20,090)
Proceeds from disposal of the discontinued operation net of cash disposed 20,159
Company
Year ended
31 March
2022
£’000
Total disposal proceeds received 48,585
Costs of disposal (522)
Proceeds from disposal of the discontinued operation 48,063
12. Goodwill
The Group tests goodwill for impairment annually and more frequently if there are indicators of impairment as set out in note 1. The Group’s cash-
generating units (‘CGUs’) have been assessed based on independently managed cash flows. When testing for impairment, recoverable amounts
for the Group’s CGUs are measured at their value-in-use by discounting the future expected cash flows from the assets in the CGUs. The Group
prepares five-year cash flow forecasts derived from the most recent three-year financial budgets approved by the Board which are extrapolated for
a further two years and subsequently extended to perpetuity. A key source of estimation in the impairment tests is the short-term revenue growth
rates applied within the cash flow forecasts, which are determined using an estimate of future results based on the latest business forecasts and
appropriately reflect expected performance of the CGU. The estimates of future cash flows are based on past experience adjusted for estimates of
future performance, including the continued shi from cash to digital payments.
Terminal values are based on long-term growth rates that do not exceed 2%, which appropriately reflects the expected long-term rate of GDP
growth in the UK. The pre-tax risk adjusted discount rates have been used to discount the forecast cash flows calculated by reference to the
weighted average cost of capital (‘WACC’) of each CGU. The cost of equity is based on the risk-free rate for long-term UK government bonds,
which is adjusted for the beta (reflecting the systemic risk of PayPoint relative to the market as a whole), the equity market risk premium (reflecting
the required return over and above a risk-free rate by an investor who is investing in the market as a whole) and a CGU specific risk adjustment
(reflecting other systemic risks specific to each CGU and the markets in which it operates).
All CGUs assessed generate value-in-use in excess of their carrying values. Sensitivity analysis applied to WACC and gross margin demonstrated that
no reasonably possible change in any of the above assumptions would cause the carrying values of the CGUs to exceed their recoverable amounts.
Group – goodwill values
Romania
CGU
£’000
i-movo
CGU
£’000
Handepay
CGU
£’000
Restated
Merchant
Rentals
CGU
£’000
Digital
payments
CGU
£’000
Total
CGUs
£’000
At 31 March 2020 11,853 – – – – 11,853
Acquisitions of businesses – 6,867 35,632 9,052 – 51,551
Exchange rate adjustment (704) – – – – (704)
Balance reclassified as held for sale (11,149) – – – – (11,149)
At 31 March 2021, previously reported – 6,867 35,632 9,052 – 51,551
Measurement period adjustment – Merchant Rentals – – – 534 – 534
At 31 March 2021, restated – 6,867 35,632 9,586 – 52,085
Acquisition of business – – – – 5,583 5,583
At 31 March 2022 – 6,867 35,632 9,586 5,583 57,6 68
PayPoint Plc Annual Report 2022136
continued
12. Goodwill continued
The prior year comparatives have been restated for a retrospective measurement period adjustment which resulted in an increase in the goodwill
attributable to the Merchant Rentals acquisition by £0.5 million. New information about facts and circumstances that existed at the acquisition date
was obtained within the measurement period which, if known, would have resulted in an adjustment to reduce the fair value of inventories purchased
at the acquisition date. There were no other measurement period adjustments to the fair values of the identifiable assets purchased and liabilities
assumed as presented for the Handepay and i-movo acquisitions in the financial statements for the year ended 31 March 2021.
Assumptions used for annual impairment tests
i-movo
CGU
Handepay
CGU
Merchant
Rentals
CGU
Digital
payments
CGU
At 31 March 2022
Carrying value of cash generating unit £8.8m £46.8m £22.6m £10.5m
Pre-tax risk adjusted discount rate 15.0% 11.8% 11.8% 15.6%
Terminal growth rate 0.0% 2.0% (5.0)%-2.0% 2.0%
At 31 March 2021
Carrying value of cash generating unit £9.0m £48.1m £27.9m –
Pre-tax risk adjusted discount rate 12.0% 15.1% 15.1% –
Terminal growth rate 2.0% 2.0% 2.0% 2.0%
Given the proximity of the timing of the acquisitions to the prior year end, fair value less costs of disposal was also considered as an alternative
measure of recoverable amount and indicated that no impairment was required at the prior year end.
13. Other intangible assets
Group
Development
costs
£’000
Customer
relationships
£’000
Brands and
trademarks
£’000
Regulatory
licences £’000
Developed
technology
£’000
Total
£’000
Cost
At 31 March 2021, restated
1
26,512 18,404 8,951 – 306 54,173
Acquisitions of businesses 7 204 – 236 – 447
Additions 5,627 – – – – 5,627
Disposals – – – – – –
At 31 March 2022 32,146 18,608 8,951 236 306 60,247
Accumulated amortisation
At 31 March 2021, restated
1
17,574 293 538 – 51 18,456
Charge for the year 2,903 1,905 714 24 255 5,801
Disposals – – – – – –
At 31 March 2022 20,477 2,198 1,252 24 306 24,257
Carrying amount
At 31 March 2022 11,669 16,410 7,6 99 212 – 35,990
At 31 March 2021, restated¹ 8,938 18,111 8,413 – 255 35,717
1. The prior year comparatives have been restated for the retrospective application of the Group’s change in accounting policy on intangible assets. Refer to note 1 and
note 32.
Included within development costs at 31 March 2022 are £3.6 million (2021: £nil) of assets under construction which were not being amortised at
31 March 2022.
At 31 March 2022, the Group had entered into contractual commitments for development cost additions amounting to £1.0 million (2021: £nil).
Shareholder information 137Strategic report Governance Financial statements
Group
Restated¹
Development
costs
£’000
Customer
relationships
£’000
Brands and
trademarks
£’000
Developed
technology
£’000
Restated¹
Total
£’000
Cost
At 31 March 2020, previously reported 31,938 – 259 – 32,197
Reversal of previously capitalised SaaS implementation costs (7,401) – – – (7,401)
At 31 March 2020, restated
1
24,537 – 259 – 24,796
Acquisitions of businesses 626 18,404 2,909 306 22,245
Additions, restated
1
1,805 – 6,042 – 7,847
Disposals (169) – – – (169)
Exchange rate adjustment (40) – (15) – (55)
Balance reclassified as held for sale (247) – (244) – (491)
At 31 March 2021, restated
1
26,512 18,404 8,951 306 54,173
Accumulated amortisation
At 31 March 2020, previously reported 14,793 – 130 – 14,923
Reversal of accumulated amortisation on previously capitalised SaaS
implementation costs (420) – – – (420)
At 31 March 2020, restated
1
14,373 – 130 – 14,503
Charge for the year, restated
1
3,251 293 590 51 4,185
Disposals (169) – – – (169)
Exchange rate adjustment (16) – (11) – (27)
Balance reclassified as held for sale 135 – (171) – (36)
At 31 March 2021, restated
1
17, 574 293 538 51 18,456
Carrying amount
At 31 March 2021, restated¹ 8,938 18,111 8,413 255 35,717
At 31 March 2020, restated¹ 10,164 – 129 – 10,293
1. The prior year comparatives have been restated for the retrospective application of the Group’s change in accounting policy on intangible assets. Refer to note 1 and
note 32.
Company
Brand
£’000
Cost
At 31 March 2021 6,042
Reclassification of Collect+ arrangement from brand intangible asset to investment (6,042)
Additions –
Disposals –
At 31 March 2022 –
Accumulated amortisation
At 31 March 2021 503
Reversal of accumulated amortisation on previously recognised Collect+ brand intangible asset (503)
Disposals –
At 31 March 2022 –
Carrying amount
At 31 March 2022 –
At 31 March 2021 5,539
In the current year on the Company statement of financial position, the £6.0 million Collect+ arrangement was reclassified from a brand intangible
asset to a wholly owned investment in subsidiary. The £6.0 million investment relates to the Company’s acquisition of the remaining 50% interest in
Collect+ that Yodel owned in the prior year, which resulted in Collect+ becoming a fully owned subsidiary controlled by the Company. Refer to note 1.
PayPoint Plc Annual Report 2022138
continued
13. Other intangible assets continued
Company
Brand
£’000
Cost
At 31 March 2020 –
Additions 6,042
Disposals –
At 31 March 2021 6,042
Accumulated amortisation
At 31 March 2020 –
Charge for the year 503
Disposals –
At 31 March 2021 503
Carrying amount
At 31 March 2021 5,539
At 31 March 2020 –
14. Property, plant and equipment
Terminals
and ATMs
£’000
Fixtures,
fittings and
equipment
£’000
Land and
buildings
£’000
Right-of-use
assets
£’000
Total
£’000
Cost
At 31 March 2021 37, 473 3,479 11,081 428 52,461
Acquisitions of businesses 12 – – 34 46
Additions 4,982 202 – – 5,184
Disposals (1,129) (8) – – (1,137)
At 31 March 2022 41,338 3,673 11,081 462 56,554
Accumulated depreciation
At 31 March 2021 27, 495 1,737 1,827 23 31,082
Charge for the year 4,118 185 274 191 4,768
Disposals (1,078) – – – (1,078)
At 31 March 2022 30,535 1,922 2,101 214 34,772
Carrying amount
At 31 March 2022 10,803 1,751 8,980 248 21,782
At 31 March 2021 9,978 1,742 9,254 405 21,379
At 31 March 2022, the Group had entered into contractual commitments for the acquisition of property, plant and equipment amounting to
£2.1 million (2021: £0.5 million).
Shareholder information 139Strategic report Governance Financial statements
Terminals
and ATMs
£’000
Fixtures,
fittings and
equipment
£’000
Land and
buildings
£’000
Right-of-use
assets
£’000
Total
£’000
Cost
At 31 March 2020 40,618 4,666 10,974 1,549 57, 8 07
Acquisitions of businesses 5 75 50 298 428
Additions 3,141 175 57 86 3,459
Disposals (2,279) (23) – – (2,302)
Exchange rate adjustment (276) (90) – (89) (455)
Balance reclassified as held for sale (3,736) (1,324) – (1,416) (6,476)
At 31 March 2021 37, 473 3,479 11,081 428 52,461
Accumulated depreciation
At 31 March 2020 28,469 2,261 1,573 664 32,967
Charge for the year 4,218 308 254 133 4,913
Disposals (2,209) (23) – – (2,232)
Exchange rate adjustment (232) (54) – (46) (332)
Balance reclassified as held for sale (2,751) (755) – (728) (4,234)
At 31 March 2021 27,495 1,737 1,827 23 31,082
Carrying amount
At 31 March 2021 9,978 1,742 9,254 405 21,379
At 31 March 2020 12,149 2,405 9,401 885 24,840
15. Investments
The Company, a holding company, has investments (directly or indirectly) in the following undertakings which are wholly owned subsidiaries, other
than Snappy Shopper Limited (investment in associate) and Optus Homes Limited (purchase of convertible loan note):
Investments in wholly owned subsidiaries
Company name
Direct or indirect
investment Principal activity (registered address) Country of registration
PayPoint Network Limited Direct Management of an electronic payment service
(1 The Boulevard, Shire Park, Welwyn Garden City,
Hertfordshire AL7 1EL)
England and Wales
PayPoint Collections Limited Direct Provision of a payment collection service (1 The Boulevard,
Shire Park, Welwyn Garden City, Hertfordshire AL7 1EL)
England and Wales
PayPoint Retail Solutions Limited Direct Provision of retail services (1 The Boulevard, Shire Park,
Welwyn Garden City, Hertfordshire AL7 1EL)
England and Wales
PayPoint Payment Services Limited Direct Provision of regulated payments services (1 The Boulevard,
Shire Park, Welwyn Garden City, Hertfordshire AL7 1EL)
England and Wales
i-movo Holdings Limited Direct Holding company (1 The Boulevard, Shire Park, Welwyn
Garden City, Hertfordshire AL7 1EL)
England and Wales
i-movo Limited Indirect Provision of digital voucher service (1 The Boulevard, Shire
Park, Welwyn Garden City, Hertfordshire AL7 1EL)
England and Wales
Handepay Limited Direct Sales business in merchant acquiring industry
(1 The Boulevard, Shire Park, Welwyn Garden City,
Hertfordshire AL7 1EL)
England and Wales
Merchant Rentals Limited Direct Provision of asset finance and leasing solutions to merchant
acquiring industry (1 The Boulevard, Shire Park, Welwyn
Garden City, Hertfordshire AL7 1EL)
England and Wales
Collect+ Holdings Limited Direct Holding company (1 The Boulevard, Shire Park, Welwyn
Garden City, Hertfordshire AL7 1EL)
England and Wales
Collect+ Brand Limited Indirect Holder of Collect+ brand (1 The Boulevard, Shire Park,
Welwyn Garden City, Hertfordshire AL7 1EL)
England and Wales
RSM 2000 Limited Direct Provision of regulated payments services (1 The Boulevard,
Shire Park, Welwyn Garden City, Hertfordshire AL7 1EL)
England and Wales
Event Payment Services Limited Indirect Provision of business support services (1 The Boulevard,
Shire Park, Welwyn Garden City, Hertfordshire AL7 1EL)
England and Wales
PayPoint Trust Managers Limited Indirect Dormant company (1 The Boulevard, Shire Park, Welwyn
Garden City, Hertfordshire AL7 1EL)
England and Wales
PayPoint Plc Annual Report 2022140
continued
15. Investments continued
Investment in associate
Company name
Direct or indirect
investment Principal activity (registered address) Country of registration
Snappy Shopper Limited Direct Associate of PayPoint Plc, 9.35% holding in ordinary share
capital (29 Commercial Street, Dundee, Scotland, DD1 3DG)
Scotland
The Group acquired 100% interest in RSM 2000 Limited on 12 April 2021.
PayPoint Plc subscribed to 9.35% of the ordinary share capital (conferring 13.04% of voting rights) in Snappy Shopper Ltd on 7 July 2021.
PayPoint Plc purchased a convertible loan note of nominal amount £750,000 from Optus Homes Ltd on 25 March 2022, which is classified as an
embedded derivative convertible debt instrument.
The Group’s previously held interests in the Romanian businesses PayPoint Services SRL, Payzone SA and SC P.P. Network Progresimo SRL
were disposed on 8 April 2021.
PayPoint Collections Ireland Limited was liquidated on 17 May 2021. PayPoint Network Ireland Limited was liquidated on 9 June 2021.
PayPoint Ireland Limited was liquidated on 16 June 2021.
Movement in investments in wholly owned subsidiaries
Company
31 March
2022
£’000
31 March
2021
£’000
Balance at the beginning of the year 138,539 60,170
Reclassification of Collect+ arrangement from brand intangible asset to investment (note 1) 6,042 –
Acquisitions of wholly owned subsidiaries (note 16) 6,944 74,593
Acquisition transaction costs capitalised – 2,796
Increased capitalisation of existing investments in wholly owned subsidiaries 5,000 1,001
Disposal of investments in wholly owned subsidiaries (note 11) (17,420) –
Liquidation of investments in wholly owned subsidiaries – (21)
Balance at the end of the year 139,105 138,539
In the current year on the Company statement of financial position, the £6.0 million Collect+ arrangement was reclassified from a brand intangible
asset to a wholly owned investment in subsidiary. The £6.0 million investment relates to the Company’s acquisition of the remaining 50% interest in
Collect+ that Yodel owned in the prior year, which resulted in Collect+ becoming a fully owned subsidiary controlled by the Company. Refer to note 1.
In the current year the Company increased its investment in RSM 2000 by £5.0 million. RSM 2000 allotted and issued £5.0 million of additional
shares (5.0 million additional shares at nominal value of £1 each) in satisfaction of the increased investment.
The Company’s investments in the Romanian businesses PayPoint Services SRL, Payzone SA and SC P.P. Network Progresimo SRL were disposed on
8 April 2021 at their carrying value of £17.4 million, with proceeds received of £48.6 million.
An impairment test was performed on the Company’s investments in subsidiaries which indicated that no impairment was required. Recoverable
amounts for the Company’s investments are measured at their value-in-use by discounting the future expected cash flows, derived from the most
recent financial budgets approved by the Board which are extended to perpetuity. The estimates of future cash flows are based on past experience
adjusted for management’s expectations of future performance.
16. Acquisition of RSM 2000
On 12 April 2021, PayPoint acquired 100% of the share capital of RSM 2000 Limited for initial cash consideration of £5.9 million and deferred
consideration of £1.0 million payable in cash on the first anniversary of completion. The deferred consideration is not contingent on future
performance. The acquisition resulted in a net £4.5 million cash outflow (net of cash acquired) in the current year.
The primary reasons for the acquisition were to enhance PayPoint’s digital payments capability and enable reach into new sectors, including charities,
housing, not-for-profit organisations, events and SMEs in the UK.
An RSM 2000 regulatory licences intangible asset of £0.2 million has been recognised and is being amortised over a useful life of 10 years. An RSM
2000 customer relationship intangible asset of £0.2 million has been recognised and is being amortised over a useful life of 12 years.
In the period since acquisition, RSM 2000 earned revenue of £2.1 million and reported profit before tax of £0.1 million. The result for the period
from 1 to 12 April 2021 is not considered material so RSM 2000 has been consolidated from 1 April 2021. Therefore, had the acquisition taken
place on the first day of the financial year, there would be no change to the revenue and reported profit before tax included in these consolidated
financial statements.
Shareholder information 141Strategic report Governance Financial statements
The following table summarises the provisional fair values of the identifiable assets purchased and liabilities assumed as at the date of acquisition:
12 April
2021
£’000
Acquired customer relationship asset 204
Acquired regulatory licence asset 236
Intangible assets – development costs 7
Property, plant and equipment 12
Right-of-use assets 34
Trade and other receivables 168
Cash and cash equivalents 1,401
Trade and other payables (564)
Lease liabilities (34)
Current tax liabilities (18)
Deferred tax liabilities (85)
Total identifiable net assets acquired at fair value 1,361
Initial cash consideration 5,944
Deferred consideration 1,000
Total consideration 6,944
Goodwill recognised on acquisition 5,583
Acquisition of subsidiary net of cash acquired (Group) (4,543)
Acquisition of subsidiary (Company) (5,944)
The acquired identifiable assets and liabilities have been recognised at their fair values at acquisition date and in accordance with the Group’s
accounting policies disclosed in note 1:
• The acquired customer relationships have been valued using the multi-period excess earnings method (“MEEM approach”) by estimating the
total expected income streams from the customer relationship and deducting portions of the cash flow that can be attributed to supporting, or
contributory, assets (including workforce). The residual income streams are discounted. No tax amortisation benefit is applied. The key inputs to
this method are the customer churn rate, revenue growth rate and discount rate applied to future forecasts of the businesses.
• The acquired licences have been valued using the cost-to-recreate method, representing the cost of the process to attain the licenses. This
requires an estimate of all the costs a typical market participant would incur to generate an exact replica of the intangible asset in the context of
the acquired business. The cost-to-recreate method takes into account factors including economic and technological obsolescence.
• Trade receivables and trade payables have been assessed at fair value on the basis of the contractual terms and economic conditions existing at
the acquisition date, reflecting the best estimate at the acquisition date of contractual cash flows not expected to be collected.
The values presented above other than cash and cash equivalents represent the best estimate based on information available at the acquisition
date and are therefore subject to adjustment within the measurement period if new information about facts and circumstances that existed at the
acquisition date is obtained and, if known, would have resulted in the recognition of those assets and liabilities at that date.
The £5.6 million goodwill acquired, which was previously fully allocated to the RSM 2000 CGU at the time of acquisition, is now fully allocated to the
digital payments CGU. The CGU to which the goodwill is allocated changed during the current year following the continued integration of PayPoint’s
combined digital payments capability which means that the goodwill allocated to the digital payments CGU cannot be non-arbitrarily identified or
associated with an asset group at a lower level than the digital payments CGU. The digital payments CGU represents the CGU which is expected to
benefit from the synergies of the acquisition and represents the lowest level at which the goodwill is monitored for internal management purposes.
The goodwill is attributable to workforce in place, know-how within the business (operating expertise and detailed knowledge of direct debit
processing facilitating enhanced potential to grow digital payments capabilities), new customer relationships and the growth in new sectors that is
anticipated to arise post-acquisition (including charities, not-for profit organisations, events, housing and SMEs in the UK), as well as the fair value of
expected synergies from combining the digital operations of PayPoint and RSM 2000 (the ability of PayPoint to oer new customers the full scope
of digital payments capabilities post-acquisition). Of the £5.6 million goodwill acquired, no goodwill is expected to be deductible for tax purposes.
17. Investment in associate
On 7 July 2021, PayPoint Plc subscribed to 9.35% of the ordinary share capital (conferring 13.04% of voting rights) in Snappy Shopper Ltd for total
cash consideration of £6.7 million. The investment will enable PayPoint to take advantage of the growth in consumer demand for local home delivery
and its convenience retailer partners to remain at the forefront of retail and consumer trends.
An investment is treated as an associate where the investor has significant influence over the investment. Under IAS 28 significant influence may
be evidenced by a number of factors, including representation on the Board of Directors of the investee. PayPoint is considered to have significant
influence over Snappy Shopper as the Chief Executive of PayPoint, Nick Wiles, joined their Board as a Non-Executive Director. The investment has
therefore been treated as an associate and recognised at its cost of £6.7 million under the equity method. PayPoint’s share of Snappy Shopper’s
result was immaterial for the year ended 31 March 2022 and has therefore not been recognised in the consolidated statement of profit or loss or in
the consolidated statement of financial position against the carrying value of the investment. The principal place of business for Snappy Shopper
Limited is in the United Kingdom.
PayPoint Plc Annual Report 2022142
continued
18. Trade and other receivables
Group
31 March
2022
£’000
31 March
2021
£’000
Trade receivables 10,316 10,772
Items in the course of collection
1
55,449 47,512
Revenue allowance for expected credit losses (1,058) (949)
64,707 57,335
Other receivables 134 152
Net investment in finance lease receivables (note 29) 1,814 4,064
Contract assets – capitalisation of fulfilment costs 2,057 1,889
Accrued income 4,315 3,320
Prepayments 2,948 2,816
Total 75,975 69,576
1. Items in the course of collection represent amounts collected for clients by retailer partners. An equivalent balance is included within trade and other payables
(settlement payables). Refer to note 20.
The Group’s exposure to the credit risk inherent in its trade and other receivables is discussed in note 27. The Group reviews trade receivables past
due but not impaired on a regular basis and in determining the recoverability of the trade receivables, the Group considers any change in the credit
quality of the trade receivables from the date credit was initially granted up to the reporting date.
Included in trade receivables are past due debtors with a carrying amount of £1.7 million (2021: £2.4 million). There has been a decrease compared
to prior year due to the timing of billing at the year end. The ageing of the trade receivables past due is as follows:
Less than
1 month
£’000
1-2 months
£’000
2-3 months
£’000
More than
3 months
£’000
Total
£’000
Carrying value at 31 March 2022 907 455 44 290 1, 696
Carrying value at 31 March 2021 1,238 421 107 659 2,425
The expected credit losses associated with accrued income balances are immaterial, based on historical loss experience for those customers,
adjusted for information about current and reasonable supportable future conditions.
Movement in the revenue allowance
31 March
2022
£’000
31 March
2021
£’000
Balance at the beginning of the year 949 1,379
Amounts utilised in the year (654) (802)
Increase in allowance 763 767
Foreign exchange – (23)
Balance reclassified as held for sale – (372)
Balance at end of the year 1,058 949
Age of revenue allowance
Less than
1 month
£’000
1-2 months
£’000
2-3 months
£’000
More than
3 months
£’000
Total
£’000
Carrying value at 31 March 2022 195 84 79 700 1,058
Carrying value at 31 March 2021 126 98 50 675 949
The expected credit losses associated with items in the course of collection are immaterial.
Shareholder information 143Strategic report Governance Financial statements
Company
31 March
2022
£’000
31 March
2021
£’000
Amounts owed by Group companies (non-current) 26,155 27, 517
Trade and other receivables (non-current) 26,155 27, 517
Amounts owed by Group companies (current) 2,353 8,143
Other receivables 11 8
Accrued income 12 12
Prepayments 732 1,106
Trade and other receivables (current) 3,108 9,269
Total 29,263 36,786
Amounts owned by subsidiaries are unsecured, have no fixed date of repayment and are repayable on demand. Expected credit losses are immaterial.
19. Cash and cash equivalents
Total cash and cash equivalents from continuing operations of £24.3 million (2021: £38.9 million) consists of £7.7 million (2021: £10.5 million)
corporate cash and £16.6 million (2021: £28.4 million) relating to funds collected on behalf of clients where PayPoint has title to the funds (clients’
funds) and where retailer partners have provided security deposits (retailer partners’ deposits). A balance equivalent to the latter amount is included
within trade payables. Clients’ funds held in trust which are not included in cash and cash equivalents amounted to £58.9 million (2021: £50.3 million).
During the year the Group operated cash pooling amongst most of its bank accounts in the UK whereby individual accounts could be overdrawn
without penalties being incurred so long as the overall position is in credit.
20. Trade and other payables
Group
31 March
2022
£’000
31 March
2021
£’000
Amounts owed in respect of clients’ funds and retailer partners’ deposits
1
16,646 28,405
Settlement payables
2
55,449 47, 512
Client payables 72,095 75,917
Trade payables 4,789 5,925
Other taxes and social security 3,314 6,439
Other payables 901 692
Accruals 10,087 11,494
Deferred income 401 565
Contract liabilities – deferral of set-up and development fees 788 1,472
Total 92,375 102,504
Disclosed as:
Current 92,375 102,504
Non-current – –
Total 92,375 102,504
1. Relates to monies collected on behalf of clients where the Group has title to the funds (clients’ funds and retailer partners’ deposits). An equivalent balance is included
within cash and cash equivalents (note 19).
2. Payable in respect of amounts collected for clients by retailer partners. An equivalent balance is included within trade and other receivables (items in the course of collection).
Refer to note 18.
Company (Current)
31 March
2022
£’000
31 March
2021
£’000
Amounts owed by Group companies 52,160 13,039
Other payables 240 774
Accruals 2,365 1,812
Total 54,765 15,625
PayPoint Plc Annual Report 2022144
continued
21. Provision
Group and Company
31 March
2022
£’000
31 March
2021
£’000
At beginning of year 12,500 –
Provision utilised (12,500) –
Provision recognised in relation to the Ofgem Statement of Objections (current liability) – 12,500
At end of year – 12,500
A £12.5 million donation was made to the Energy Industry Voluntary Redress Scheme as part of the commitments in resolution of the concerns
raised in Ofgem’s Statement of Objections received on 29 September 2020, resulting in full utilisation of the £12.5 million provision which was
previously recognised in the prior year ended 31 March 2021.
22. Deferred consideration liability
£’000
At 31 March 2020 –
Recognition of discounted deferred, contingent consideration liability on acquisition of i-movo 5,690
Discount unwind on deferred consideration 57
At 31 March 2021 5,747
Recognition of deferred consideration liability on acquisition of RSM 2000 1,000
Revaluation of i-movo deferred, contingent consideration liability (2,880)
Discount unwind on i-movo deferred, contingent consideration 133
Settlement of i-movo deferred, contingent consideration liability – cash consideration paid in the year (2,000)
Settlement of i-movo deferred, contingent consideration liability – shares consideration paid in the year (1,000)
At 31 March 2022 1,000
Disclosed as:
31 March
2022
£’000
31 March
2021
£’000
Current 1,000 1,462
Non-current – 4,285
Total 1,000 5,747
Of the total £1.0 million deferred consideration liability at 31 March 2022, £nil relates to the acquisition of i-movo (2021: £5.7 million) and £1.0 million
relates to the acquisition of RSM 2000 (2021: £nil).
i-movo
The £nil (2021: £5.7 million) deferred, contingent consideration liability in relation to the i-movo acquisition represents the discounted fair value of
the estimated additional consideration payable at the reporting date. The £nil i-movo deferred, contingent consideration liability was contingent
on future performance over the earnout period and was linked to four monthly revenue growth targets on two potential key revenue streams.
The £nil (2021: £5.7 million) carrying amount of the deferred, contingent consideration liability is considered to approximate to its fair value.
The fair value of the liability is categorised as Level 3 in the fair value hierarchy. The £2.9 million (2021: £nil) fair value gain recognised in the current
year consolidated statement of profit or loss was due to the revaluation of part of the previously recognised liability based on the latest forecasts.
The total contingent consideration was capped at £6.0 million (£4.0 million cash and £2.0 million shares), of which £3.0 million (£2.0 million cash
and £1.0 million shares) was settled in the current financial year.
The fair value of the expected earnout is measured against the contractually agreed performance targets at each reporting date, determined
using a probability-weighted average best estimate of discrete scenarios based on the latest revenue forecasts which are discounted to present
value. The fair value of the discounted deferred, contingent consideration liability is determined using an estimate regarding the future results.
Any subsequent revaluations to deferred, contingent consideration as a result of changes in such estimations are recognised in the consolidated
statement of profit or loss. The estimation of the liability requires an estimate of future performance of the related business over the earnout period,
based on management’s latest forecasts. The significant unobservable inputs used in the fair value measurement are the discount rate and the
forecast future revenue of the acquired business. Also, the Board have discretion to extend one or more of the earnout periods and also to make
the earnout payments (or part of them) should the relevant earnout targets not be met by the target dates.
RSM 2000
The £1.0 million (2021: £nil) RSM 2000 deferred consideration liability was paid out on the first anniversary of completion, aer the end of the
financial year (refer to note 22). It therefore has not been discounted to present value at 31 March 2022 as the discounting impact would be
immaterial. The deferred consideration is not contingent on any factors. It is measured at amortised cost. Refer to note 16 for details of the
acquisition of RSM 2000.
Shareholder information 145Strategic report Governance Financial statements
23. Deferred tax liability
31 March
2021
£’000
Acquisitions/
disposals of
businesses
£’000
Credit/
(debit) to
consolidated
statement of
profit or loss
£’000
Charge to
equity
£’000
31 March
2022
£’000
Property, plant and equipment 1,634 (2) (410) – 1,222
Intangible assets (4,790) (83) (433) – (5,306)
Share-based payments 142 – 48 – 190
Short-term temporary dierences 39 – 149 – 188
(2,975) (85) (646) – (3,706)
Balance reclassified as held for sale 4 (4) – – –
Total (2,971) (89) (646) – (3,706)
31 March
2020
£’000
Acquisitions/
disposals of
businesses
£’000
Credit/
(debit) to
consolidated
statement of
profit or loss
£’000
Charge to
equity
£’000
31 March
2021
£’000
Property, plant and equipment 943 467 224 – 1,634
Intangible assets (609) (4,237) 56 – (4,790)
Share-based payments 160 – (8) (10) 142
Short-term temporary dierences 71 19 (51) – 39
565 (3,751) 221 (10) (2,975)
Balance reclassified as held for sale – 4 – – 4
Total 565 (3,747) 221 (10) (2,971)
At the statement of financial position date, the Group had recognised unused tax losses of £257k (2021: £nil).
No deferred tax liability has been recognised in respect of temporary dierences associated with investments in subsidiaries because the Group
is able to control the timing of the reversal of the temporary dierences and it is probable that such dierences will not reverse in the foreseeable
future. The aggregate amount of these dierences is not material at the statement of financial position date.
24. Share capital, share premium and merger reserve
31 March
2022
£’000
31 March
2021
£’000
Called up, allotted and fully paid share capital
68,915,949 (2021: 68,656,907) ordinary shares of 1/3p each 230 229
The increase in share capital in the current year resulted from 155,851 shares issued (of 1/3p each) for the payment of deferred, contingent share
consideration in relation to the i-movo acquisition, 81,177 shares issued (of 1/3p each) for share awards which vested in the year and 22,014
matching shares issued (of 1/3p each) under the Employee Share Incentive Plan.
The share premium of £1.0 million (2021: £5.0 million) represents the payment of deferred, contingent share consideration in excess of the nominal
value of shares issued in relation to the i-movo acquisition.
The merger reserve of £1.0 million (2021: £1.0 million) represents initial share consideration in excess of the nominal value of shares issued on the
initial acquisition of i-movo.
25. Share-based payments
The Group’s share schemes are described in the Directors’ Remuneration Report on pages 90 to 101 and consist of the LTIP, DABS and RSA
equity-settled share schemes.
No share awards were issued under the LTIP scheme in the current year (2021: nil). The LTIP scheme was closed and replaced with the RSA scheme in
the prior year. For LTIP share awards which were granted prior to 31 March 2020 and are yet to vest or lapse, 50% of the vesting is based on TSR and
50% on EPS growth. The performance condition for the TSR element is the same as the vesting period. The performance period for the EPS element
is for three financial years from the grant date.
209,293 share awards were issued under the RSA scheme in the year (2021: 200,013), vesting over two to five years, between 30 June 2023 and
13 August 2026 subject to continued employment. The RSAs do not contain any performance conditions other than to complete the required
period of service.
45,594 share awards were issued under the DABS scheme in the year (2020: 2,532), vesting over three years to 13 August 2024 subject to
continued employment. The DABS do not contain any performance conditions other than to complete the required period of service.
PayPoint Plc Annual Report 2022146
continued
25. Share-based payments continued
The share-based payments charge in the statement of profit or loss in the year was £0.9 million (2021: £1.1 million). Of this, £0.2 million (2021:
£0.2 million) related to the Employee Share Incentive Plan. For each share purchased by the employee under the Employee Share Incentive Plan, the
Company issues a free matching share which will vest subject to the employee remaining employed with the Group for three years from the date
each share was purchased by the employee.
A total charge of £1.3 million (2021: £0.9 million), which was previously recognised directly in equity, for schemes which have now lapsed or vested,
was transferred from the share-based payments reserve to retained earnings during the year. Of this, £0.2 million (2021: £0.1 million) related to
shares which vested under the Employee Share Incentive Plan.
Share awards movement during the year
Number of
shares
31 March 2022
Number of
shares
31 March 2021
Outstanding at the beginning of the year 432,725 535,371
Granted 254,887 202,545
Lapsed – –
Exercised (112,556) (233,456)
Forfeited (72,889) (71,735)
Outstanding at end of the year 502,167 432,725
Remaining vesting period of outstanding share awards
Number of
shares
31 March 2022
Number of
shares
31 March 2021
Within one year 141,344 165,317
One to two years 121,808 108,254
Two to three years 181,365 129,432
Three years or more 57,650 29,722
Outstanding at end of the year 502,167 432,725
The fair value of the equity instruments granted during the year was determined based on the share price on the date of the grant. All awards
granted and in issue are for free shares and therefore the weighted average exercise price for all outstanding schemes is £nil.
Awards Grant date Number of shares Fair value (£) Vesting date
RSA – 2 years 30 June 2021 21,616 5.80 30 June 2023
RSA – 3 years 30 June 2021 58,309 5.80 30 June 2024
RSA – 3 years 13 August 2021 80,068 6.31 13 August 2024
RSA – 3 years 20 January 2022 6,512 6.91 3 January 2025
RSA – 4 years 13 August 2021 21,394 6.31 13 August 2025
RSA – 5 years 13 August 2021 21,394 6.31 13 August 2026
DABS 13 August 2021 45,594 6.31 13 August 2024
26. Dividends
Year ended 31 March 2022 Year ended 31 March 2021
£’000
pence
per share £’000
pence
per share
Reported dividends on ordinary shares:
Interim ordinary dividend 11,687 17.0 10,708 15.6
Proposed final ordinary dividend 12,405 18.0 11,397 16.6
Total ordinary reported dividends (non-IFRS measure) 24,092 35.0 22,105 32.2
Dividends paid on ordinary shares:
Final ordinary dividend for the prior year 11,409 16.6 10,676 15.6
Interim dividend for the current year 11,687 17.0 10,709 15.6
Total ordinary dividends paid (financing cash flows) 23,096 33.6 21,385 31.2
Number of shares in issue used for proposed final ordinary dividend
per share calculation 68,915,949 68,656,907
The proposed final ordinary dividend is subject to approval by shareholders at the annual general meeting and has not been included as a liability in
these financial statements.
Shareholder information 147Strategic report Governance Financial statements
27. Financial instruments and risk
The Group’s financial instruments comprise cash and cash equivalents, trade and other receivables, net investment in finance lease receivables, trade
and other payables, loans and borrowings and accruals, which arise directly from the Group’s operations. The Group’s policy is not to undertake
speculative trading in financial instruments.
The main risks arising from the Group’s financial instruments are credit risk, liquidity risk and foreign exchange. The Directors review and agree policies
for managing each of these risks which are summarised below. These policies have remained unchanged during the year. The Group uses hedges to
manage the foreign exchange risk of purchasing PayPoint One terminals and card terminals.
(a) Credit risk
The Group’s financial assets are cash and cash equivalents, trade and other receivables and net investment in finance lease receivables. The
Group’s credit risk is primarily attributable to its trade and other receivables and net investment in finance lease receivables. The Group has treasury
policies in place which manage the concentration of risk with individual bank counterparties. Each counterparty has an individual limit determined
by their credit ratings. In accordance with the Group’s treasury policies and exposure management practices, counterparty credit exposure limits
are monitored and no individual exposure is considered significant in the ordinary course of treasury management activity. The Company does not
expect any significant losses from non-performance by these counterparties.
To mitigate against credit risk, PayPoint credit checks clients, SME and retailer partners, holds retailer security deposits, operates terminal limits,
monitors clients and retailer partners for changes in payment profiles and in certain circumstances, has the right to set-o monies due against funds
collected. The Group’s maximum exposure, at 31 March 2022, was £34.7 million (2021: £50.6 million).
The Company, PayPoint Plc, has issued parental guarantees in favour of clients of its subsidiaries under which it has guaranteed amounts due to
clients, by the subsidiaries, for settlement of funds collected by retailer partners.
(b) Liquidity risk
The Group’s policy throughout the year ended 31 March 2022 regarding liquidity has been to maximise the return on funds placed on deposit whilst
minimising the associated risk.
Refer to part (e) of this note for details of the Group’s borrowing facilities. The following shows the exposure to liquidity risk for continuing
operations. The amounts are gross and undiscounted, and include contractual interest payments:
Contractual cash flows
31 March 2022
£’000
Carrying
amount Total
2 months
or less 2-12 months 1-2 years 2-5 years
Non-derivative financial liabilities
Revolving credit facility 27,000 (27,054) (27,054) – – –
Amortising term loan 21,667 (21,797) (2,839) (8,125) (10,833) –
Block loans 2,867 (2,867) (395) (1,299) (924) (249)
Lease liabilities 260 (271) (41) (160) (70) –
Trade payables 94,147 (94,147) (94,147) – – –
Deferred consideration liability 1,000 (1,000) (1,000) – – –
Contractual cash flows
31 March 2021
£’000
Carrying
amount Total
2 months
or less 2-12 months 1-2 years 2-5 years
Non-derivative financial liabilities
Revolving credit facility 49,500 (49,505) (49,505) – – –
Amortising term loan 32,500 (32,682) (2,891) (8,125) (10,833) (10,833)
Block loans 4,583 (4,791) (664) (2,794) (1,091) (243)
Lease liabilities 447 (479) (36) (179) (194) (70)
Trade payables 102,504 (102,504) (102,504) – – –
Provision 12,500 (12,500) – (12,500) – –
Deferred consideration liability 5,747 (4,000) – (1,000) (2,000) (1,000)
(c) Foreign exchange risk
The Group’s currency exposures comprise those transactional exposures that give rise to the net currency gains and losses recognised in the
statement of profit or loss. Such exposures comprise the monetary assets and monetary liabilities of the Group that are not denominated in the
operating (or functional) currency of the operating unit involved. At 31 March 2022, these exposures were £nil (2021: £nil).
The Group uses hedges to manage the foreign exchange risk related to PayPoint One terminal and card terminal purchases.
PayPoint Plc Annual Report 2022148
continued
27. Financial instruments and risk continued
(d) Interest rate risk
The Group had no interest-bearing financial assets at 31 March 2022 other than cash and cash equivalents which totalled £24.3 million (2021:
£38.9 million from continuing operations). The Group is also exposed to interest rate risk through use of its financing facility which incurs interest
charges based on SONIA plus 1.75% (2021: LIBOR plus 2.25%).
All funds earn interest at the prevailing rate. The funds are deposited on short-term deposits (normally weekly or monthly) or held in current
accounts. The Group seeks to maximise interest receipts within these parameters. The Group also minimises interest cost by eective central
management of cash resources to minimise the need for utilisation of the financing facility.
(e) Borrowing facilities
Following the group-wide refinancing in the prior year and a subsequent one-year extension which was secured aer the end of the current financial
year, the Group’s borrowing facilities consist of a £21.7 million amortising term loan which is due to be fully repaid over the next two financial years
and an unsecured £75.0 million revolving credit facility with a £30.0 million accordion facility (uncommitted) expiring in February 2025.
At 31 March 2022, £27.0 million (2021: £49.5 million) was drawn down from the revolving credit facility and the outstanding balance of the
amortising term loan was £21.7 million (2021: £32.5 million). The Group also had £2.9 million (2021: £4.6 million) of outstanding block loan balances
from the Merchant Rentals acquisition. The cash proceeds received from the sale of the Romanian business in April 2021 were used to partly repay
the revolving credit facility and reduce net corporate debt.
Interest is payable at SONIA plus 1.75% (2021: LIBOR plus 2.25%). PayPoint has the ability to roll over the drawdown for an additional period
between one and six months.
The Group is required to adhere to a net debt leverage of no more than three times EBITDA and an interest cover of no less than four times. The
Group operated within these limits during the financial year ended 31 March 2022.
(f) Fair value of financial assets and liabilities
All derivatives are held with an A rated bank and mature within one year. All financial assets/liabilities are measured at fair value through the profit or
loss, comprising derivative financial instruments in the form of foreign exchange contracts (classified as Level 2), the deferred consideration liability
recognised in the current year relating to the RSM 2000 acquisition (classified as Level 1), the deferred, contingent consideration liability recognised
in the prior year relating to the i-movo acquisition (classified as Level 3) and the convertible loan note instrument purchased from Optus Homes
(classified as Level 3). The fair value of the convertible loan note instrument purchased from Optus Homes was measured using the income approach
(discounted cash flow) with the significant unobservable inputs being the board-approved forecast of Optus Homes and the weighted average cost
of capital. There have been no transfers between Level 1, 2 or 3 in the current year or prior year.
The Directors consider there to be no material dierence between the book value and the fair value of the Group’s financial instruments at 31 March
2022, or 31 March 2021.
(g) Market price risk
The Group’s exposure to market price risk comprises interest rate exposure. Group funds are invested in money market cash deposits with the
objective of maintaining a balance between accessibility of funds and competitive rates of return.
(h) Capital risk management
The Group’s objectives when managing capital (the definition of which is consistent with prior year and is the Group’s assets and liabilities including
cash) are to safeguard the Group’s ability to continue as a going concern to provide returns for shareholders and benefits for other stakeholders.
The Group manages its capital by continued focus on free cash flow generation and managing the level of capital investment in the business. The final
dividend for the year ensures a prudent level of earnings coverage for the dividend and that leverage is not substantially increased.
(i) Financial instrument sensitivities
Financial instruments aected by market risk include deposits, hedges, trade receivables and trade payables. Any changes in market variables
(exchange rates and interest rates) will have an immaterial eect on these instruments.
Shareholder information 149Strategic report Governance Financial statements
28. Loans and borrowings
Group
Year ended
31 March
2022
£’000
Year ended
31 March
2021
£’000
Balance at beginning of year 86,583 70,000
Changes in financing cash flows
Repayment of old revolving credit facility (47,000) (70,000)
Drawdown of new revolving credit facility 24,500 82,000
Repayment of amortising term loan (10,833) –
Repayment of block loans (3,636) ( 741)
Funding from block loans 1,920 –
Total changes in financing cash flows (35,049) 11,259
Other liability related changes
Block loans acquired – 5,274
Interest charge expensed 1,913 1,590
Cash interest paid (1,913) (1,540)
Balance at end of year 51,534 86,583
Disclosed as:
Current 39,643 63,627
Non-current 11,891 22,956
Total loans and borrowings 51,534 86,583
Company
Year ended
31 March
2022
£’000
Year ended
31 March
2021
£’000
Balance at beginning of year 82,000 70,000
Changes in financing cash flows
Repayment of old revolving credit facility (47,000) (70,000)
Drawdown of new revolving credit facility 24,500 82,000
Repayment of amortising term loan (10,833) –
Total changes in financing cash flows (33,333) 12,000
Other liability related changes
Interest charge expensed 1,654 1,259
Cash interest paid (1,655) (1,259)
Balance at end of year 48,666 82,000
Disclosed as:
Current 37, 833 60,333
Non-current 10,833 21,667
Total loans and borrowings 48,666 82,000
29. Leases
(a) Finance lease liabilities
Property
£’000
Vehicles
£’000
Total
£’000
At 31 March 2022
Current balance 164 27 191
Non-current balance 57 12 69
Total lease liabilities 221 39 260
Interest charge for the year 25 (3) 22
At 31 March 2021
Current balance 156 38 194
Non-current balance 214 39 253
Total lease liabilities 370 77 447
Interest charge for the year – (2) (2)
PayPoint Plc Annual Report 2022150
continued
29. Leases continued
Changes in liabilities
Year ended
31 March
2022
£’000
Year ended
31 March
2021
£’000
Balance at beginning of year 447 941
Lease liabilities acquired in year 34 370
Lease liability additions – 77
Payment of lease liabilities (financing cash flows) (243) (211)
Interest on unwind of lease liabilities 22 (37)
Exchange rate adjustment – 14
Balance reclassified as held for sale – (707)
Balance at end of year 260 447
Disclosed as:
Current 200 194
Non-current 60 253
Total lease liabilities 260 447
(b) Finance lease right of use assets
Property
£’000
Vehicles
£’000
Total
£’000
At 31 March 2022 184 64 248
Depreciation charge for the year ended 31 March 2022 (151) (40) (191)
At 31 March 2021 298 107 405
Depreciation charge for the year ended 31 March 2021 (109) (24) (133)
(c) Net investment in finance lease receivables
Year ended
31 March
2022
£’000
Year ended
31 March
2021
£’000
Current balance 1,814 4,064
Non-current balance 4,407 6,511
Total net investment in finance lease receivables 6,221 10,575
Interest income (revenue) on net investment in finance lease receivables 1,701 312
The increase in the interest income on net investment in finance lease receivables in the current year is due to Merchant Rentals (acquired on
4 February 2021) being included for the full year.
Age of allowance for net investment in finance lease receivables
Less than
1 month
£’000
1-3 months
£’000
3-6 months
£’000
More than
6 months
£’000
Total
£’000
Carrying value at 31 March 2022 7 19 16 1,006 1,048
Carrying value at 31 March 2021 11 57 213 983 1,264
Contractual undiscounted cash flows for net investment in finance lease receivables
Undiscounted lease receivables
Unearned
finance
income
£’000
Less than
1 month
£’000
1-3 months
£’000
3-6 months
£’000
6 months-1
year
£’000
1 year-3
years
£’000
3 years-5
years
£’000
More than 5
years
£’000
Total
£’000
31 March 2022 (1,669) 428 790 1,063 1,703 3,528 378 – 6,221
31 March 2021 (1,995) 634 1,216 1,695 2,956 5,576 493 – 10,575
The Group earned £0.2 million (2021: £nil) income from operating leases in the year.
Shareholder information 151Strategic report Governance Financial statements
30. Related party transactions
Remuneration of the Executive Directors, who are the key management of the Group, was as follows during the year:
Year ended
31 March
2022
£’000
Year ended
31 March
2021
£’000
Short-term benefits and bonus¹ 1,443 1,380
Pension costs² 38 37
Long-term incentives³ – –
Other⁴ 4 2
Total 1,485 1,419
1. Includes salary, taxable benefits and annual bonus award.
2. Pension contributions.
3. Long-term incentives: for the years ended 31 March 2022 and 31 March 2021 no values have been included for the 2019 and 2018 LTIP award vesting as, based on
performance for the relevant three-year performance periods, these awards are unlikely to vest.
4. SIP matching and dividend shares awarded in the year.
The share-based payment charge to the statement of profit or loss for the year in relation to key management of the Group was £0.9 million
(2021: £1.1 million). Directors’ remuneration is disclosed in the Directors’ Remuneration Report on pages 90 to 101.
Company-related party transactions
The following transactions occurred between the Company and its wholly owned subsidiaries:
Year ended
31 March
2022
£’000
Year ended
31 March
2021
£’000
Amounts owed by subsidiaries 28,508 35,660
Amounts owed to subsidiaries (52,160) (13,039)
Interest paid to subsidiaries (885) (343)
Interest received from subsidiaries 826 694
Dividends received from subsidiaries – 38,548
Snappy Shopper is a related party as an associate of PayPoint Plc. In the period since the investment in the associate was made, related party
transactions consisted of £47,198 revenue, with £23,868 of accrued income at 31 March 2022.
PayPoint Plc Annual Report 2022152
continued
31. Notes to the cash flow statement
Group Note
Year ended
31 March
2022
£’000
Restated¹
Year ended
31 March
2021
£’000
Profit before tax from continuing operations 48,515 20,443
Profit before tax from discontinued operation 30,011 7, 551
Adjustments for:
Depreciation of property, plant and equipment 14 4,768 4,913
Amortisation of intangible assets 13 5,801 4,185
Profit from discontinued operation 11 (30,011) –
R&D and VAT credits (15) (54)
Exceptional item – revaluation of deferred, contingent consideration liability 22 (2,880) –
Exceptional item – non-cash provision 21 – 12,500
Loss on disposal of fixed assets 59 54
Net finance costs 2,033 1,265
Share-based payment charge 25 868 1,066
Cash-settled share-based remuneration – (151)
Operating cash flows before movements in working capital 59,149 51,772
Movement in inventories 70 (11)
Movement in trade and other receivables (526) 699
Movement in finance lease receivables 4,354 593
Movement in contract assets (24) 972
Movement in contract liabilities (684) (529)
Movement in provision in relation to Ofgem Statement of Objections 21 (12,500) –
Movement in payables (6,488) (765)
Movement in lease liabilities (7) 22
Cash generated by operations 43,344 52,753
Corporation tax paid (9,161) (8,422)
Financial costs paid 28 (1,913) (1,540)
Net cash from operating activities (corporate) 32,270 42,791
Movement in clients’ funds and retailer partners’ deposits (9,718) 11,852
Net cash inflow from operating activities
2
22,552 54,643
1. The prior year comparatives have been restated for the retrospective application of the Group’s change in accounting policy on intangible assets. Refer to note 1 and
note 32.
2. Items in the course of collection and settlement payables are included in this reconciliation on a net basis through the client cash line. The Directors have included these
items on a net basis to best reflect the operating cash flows of the business.
Shareholder information 153Strategic report Governance Financial statements
Company Note
Year ended
31 March
2022
£’000
Year ended
31 March
2021
£’000
Profit before tax 27,439 19,879
Adjustments for:
Amortisation of intangible assets
1
13 (503) 503
Exceptional item – revaluation of deferred, contingent consideration liability 22 (2,880) –
Exceptional item – non-cash provision 21 – 12,500
Dividends from subsidiaries – (38,548)
Profit from discontinued operation 11 (30,643) –
Net finance cost 1,843 954
Cash-settled share-based remuneration 392 16
Operating cash movement before movements in working capital (4,352) (4,698)
Movement in receivables 8,827 8,578
Movement in payables 25,755 2,880
Cash generated by operations 30,230 6,760
Interest and bank charges paid (1,655) (1,259)
Net cash inflow from operating activities 28,575 5,501
1.
In the current year on the Company statement of financial position, the £6.0 million Collect+ arrangement was reclassified from a brand intangible asset to a wholly owned
investment in subsidiary and £0.5m of accumulated amortisation was reversed through the Company statement of profit or loss. The £6.0 million investment relates to the
Company’s acquisition of the remaining 50% interest in Collect+ that Yodel owned in the prior year, which resulted in Collect+ becoming a fully owned subsidiary controlled
by the Company. Refer to note 1.
32. Prior year restatements for implementation costs of cloud computing SaaS arrangements
The below tables show the impacts of restating the prior year consolidated financial statements for the retrospective application of the change
in the Group’s accounting policies on intangible assets to derecognise previously capitalised SaaS related costs and amortisation which no longer
meet the criteria for recognition as an asset, following the April 2021 IFRIC agenda decision on the configuration and customisation costs incurred in
implementing cloud computing SaaS arrangements, as disclosed in note 1.
Prior year consolidated statement of profit or loss
Previously
reported
Year ended
31 March
2021
£’000
Restatement
£’000
Restated
Year ended
31 March
2021
£’000
Continuing operations
Revenue 127,747 – 127,747
Cost of revenue (47,28 0) 1,795 (45,485)
Gross profit 80,467 1,795 82,262
Administrative expenses – excluding exceptional items (43,578) (795) (44,373)
Operating profit before exceptional items 36,889 1,000 37, 88 9
Exceptional item – revaluation of deferred, contingent consideration liability – – –
Exceptional item – administrative expenses (15,600) – (15,600)
Operating profit 21,289 1,000 22,289
Finance income 22 – 22
Finance costs – excluding exceptional items (1,409) – (1,409)
Exceptional item – finance costs (459) – (459)
Profit before tax from continuing operations 19,443 1,000 20,443
Tax on continuing operations (4,335) (189) (4,524)
Profit from continuing operations 15,108 811 15,919
Discontinued operation
Profit from discontinued operation, net of tax 6,423 – 6,423
Exceptional item – gain on disposal of discontinued operation, net of tax – – –
Profit for the year attributable to equity holders of the parent 21,531 811 22,342
PayPoint Plc Annual Report 2022154
continued
32. Prior year restatements for implementation costs of cloud computing SaaS arrangements continued
Previously
reported
Year ended
31 March
2021
£’000
Restated
Year ended
31 March
2021
£’000
Earnings per share
Basic 31.5p 32.7p
Diluted 31.3p 32.4p
Earnings per share – continuing operations
Basic 22.1p 23.3p
Diluted 21.9p 23.1p
Selected extracts from the consolidated statement of financial position for the prior year ended 31 March 2021
Previously
reported
31 March
2021
£’000
Restatement
£’000
Restated¹
31 March
2021
£’000
Inventories
1
1,059 (534) 525
Current tax asset 3,021 (189) 2,832
Total current assets 169,949 (723) 169,226
Goodwill
1
51,551 534 52,085
Other intangible assets 41,698 (5,981) 35,717
Total non-current assets 121,139 (5,447) 115,692
Total assets 291,088 (6,170) 284,918
Net assets 39,470 (6,170) 33,300
Retained earnings 32,907 (6,170) 26,737
Total equity attributable to equity holders of the parent 39,470 (6,170) 33,300
1. The prior year comparatives have been restated for a retrospective measurement period adjustment to goodwill and inventories. Refer to note 12.
Selected extracts from the consolidated statement of financial position for the year ended 31 March 2020
Previously
reported
31 March
2020
£’000
Restatement
£’000
Restated
31 March
2020
£’000
Other intangible assets 17, 274 (6,981) 10,293
Total non-current assets 54,532 (6,981) 47, 551
Total assets 257, 987 (6,981) 251,006
Net assets 38,330 (6,981) 31,349
Retained earnings 32,475 (6,981) 25 494
Total equity attributable to equity holders of the parent 38,330 (6,981) 31,349
Shareholder information 155Strategic report Governance Financial statements
Selected extracts from the prior year consolidated statement of cash flows and notes to the cash flow statement
Previously
reported
31 March
2020
£’000
Restatement
£’000
Restated
Year ended
31 March
2021
£’000
Profit before tax from continuing operations 19,443 1,000 20,443
Amortisation of intangible assets 5,980 (1,795) 4,185
Operating cash flows before movements in working capital 52,567 (795) 51,772
Cash generated by operations 53,548 (795) 52,753
Net cash from operating activities (corporate) 43,586 (795) 42,791
Net cash inflow from operating activities 55,438 (795) 54,643
Purchases of intangible assets (8,745) 795 ( 7, 950)
Net cash used in investing activities (72,479) 795 (71,684)
33. Subsequent events
The £1.0 million (31 March 2021: £nil) deferred consideration liability recognised on the acquisition of RSM 2000 was paid on 12 April 2022, the first
anniversary of completion. On payment the corresponding liability was released which resulted in a £1.0 million financing cash outflow. The deferred
consideration was neither contingent on future performance nor remuneration linked i.e. linked to continuing employment of the sellers.
156
PayPoint Plc Annual Report 2022
Notice of Annual General Meeting
This notice of meeting is important and requires your immediate attention.
If you are in any doubt as to any aspect of the proposals referred to in this notice of meeting or as to the action you should take, you should seek your
own advice from a stockbroker, bank manager, solicitor, tax advisor, accountant or other independent professional advisor.
If you have recently sold or otherwise transferred all of your ordinary shares in PayPoint Plc, please pass this notice of meeting, together with the
accompanying documents, to the purchaser or transferee, or to the person who arranged the sale or transfer, so that they can pass these documents
to the person who now holds the shares as soon as possible.
In line with the UK Government’s removal of restrictions on face-to-face meetings (correct as at the date of this Notice), PayPoint Plc’s annual general
meeting (‘AGM’) is set to be held at PayPoint’s registered oce address. In the event that new guidance or restrictions on public gatherings are issued
or imposed changes to the format of the AGM will be communicated to shareholders on the investors section of our website: https://corporate.
paypoint.com/investor-centre/meeting and, where appropriate, by a stock exchange announcement in advance of the AGM. All appropriate COVID-19
related safety measures will be in place at our AGM venue, however attendees should carefully consider their own circumstances before choosing to
attend in person. We remain committed to engaging with our shareholders so please do send any questions you may have for the Board, relating to the
business of the meeting, to our Company Secretary at brianmclelland@paypoint.com by Monday 18 July 2022 at 12.00 noon.
Meantime, we encourage you to submit your proxy votes to the Company’s registrars, Equiniti, as early as possible. Further information on how you can
submit your proxy votes can be found on page 159. The deadline for submitting proxy votes is 12.00 noon on Monday 18 July 2022.
Notice is hereby given that the 2022 Annual General Meeting of PayPoint Plc (the ‘Company’) will be held at the Company’s head oce, 1 The Boulevard,
Shire Park, Welwyn Garden City, Hertfordshire AL7 1EL on Wednesday 20 July 2022 at 12.00 noon. You will be asked to consider and pass the following
resolutions. Resolutions 1 to 13 (inclusive) will be proposed as ordinary resolutions, and Resolutions 14 to 17 (inclusive) will be proposed as special
resolutions.
Routine business
1. Directors’ Report and Accounts
To receive the accounts for the financial year ended 31 March 2022 together with the Directors’ report and the auditors’ report on those accounts.
2. Directors’ Remuneration Report
To approve the Directors’ Remuneration Report for the financial year ended 31 March 2022 as set out on pages 90 to 101 of the annual report 2022.
3. Declaration of final dividend
To declare a final dividend of 18.0 pence per ordinary share of the Company for the year ended 31 March 2022.
4. Re-election of Director – Alan Dale
To re-elect Alan Dale as a Director.
5. Re-election of Director – Rosie Shapland
To elect Rosie Shapland as a Director.
6. Re-election of Director – Gill Barr
To re-elect Gill Barr as a Director.
7. Re-election of Director – Giles Kerr
To re-elect Giles Kerr as a Director.
8. Re-election of Director – Rakesh Sharma
To re-elect Rakesh Sharma as a Director.
9. Re-election of Director – Nick Wiles
To re-elect Nick Wiles as a Director.
10. Re-election of Director – Ben Wishart
To re-elect Ben Wishart as a Director.
11. Appointment of Auditor
To reappoint KPMG LLP as auditor of the Company until the conclusion of the next AGM of the Company at which the accounts are laid.
12. Auditor’s remuneration
To authorise the Directors to determine the auditor’s remuneration.
157
Strategic report Governance Financial statements Shareholder information
Special business
13. Directors’ authority to allot shares
That the Board be generally and unconditionally authorised under section 551 of the Companies Act 2006 to allot shares in the Company and to
grant rights to subscribe for or convert any security into shares in the Company:
(A) up to a nominal amount of £68,927 (such amount to be reduced by any allotments or grants made under paragraph (B) below in excess of such
sum); and
(B) comprising equity securities (as defined in section 560(1) of the Companies Act 2006) up to a nominal amount of £137,854 (such amount to be
reduced by any allotments or grants made under paragraph (A) above) in connection with an oer by way of a rights issue:
(i) to ordinary shareholders in proportion (as nearly as may be practicable) to their existing holdings; and
(ii) to holders of other equity securities as required by the rights of those securities or as the Board otherwise considers necessary,
and so that the Board may impose any limits or restrictions and make any arrangements which it considers necessary or appropriate to deal with
treasury shares, fractional entitlements, record dates, legal, regulatory or practical problems in, or under the laws of, any territory or any other
matter, such authorities to apply until the close of business on 20 October 2023 or, if earlier, the AGM in 2023 but, in each case, during this period
the Company may make oers and enter into agreements which would, or might, require shares to be allotted or rights to subscribe for or convert
securities into shares to be granted aer the authority ends and the Board may allot shares or grant rights to subscribe for or convert securities into
shares under any such oer or agreement as if the authority had not ended.
14. Disapplication of pre-emption rights
That if resolution 13 is passed, the Board be given power to allot equity securities (as defined in section 560(1) of the Companies Act 2006) for
cash under the authority given by that resolution and/or to sell ordinary shares held by the Company as treasury shares for cash as if section 561
of the Companies Act 2006 did not apply to any such allotment or sale, such power to be limited:
(A) to the allotment of equity securities and sale of treasury shares for cash in connection with an oer of, or invitation to apply for, equity securities
(but in the case of the authority granted under paragraph (B) of resolution 13, by way of a rights issue only):
(i) to ordinary shareholders in proportion (as nearly as may be practicable) to their existing holdings; and
(ii) to holders of other equity securities, as required by the rights of those securities or, as the Board otherwise considers necessary,
and so that the Board may impose any limits or restrictions and make any arrangements which it considers necessary or appropriate to deal with
treasury shares, fractional entitlements, record dates, legal, regulatory or practical problems in, or under the laws of, any territory or any other
matter;
(B) in the case of the authority granted under paragraph (A) of resolution 13 and/or in the case of any sale of treasury shares for cash, to the
allotment (otherwise than under paragraphs (A) and (B) above) of equity securities or sale of treasury shares up to a nominal amount of
£10,339, such power to apply until the close of business on 20 October 2023 or if earlier, the AGM in 2023 but, in each case, during this period
the Company may make oers and enter into agreements which would, or might, require equity securities to be allotted (and treasury shares
to be sold) aer the power ends and the Board may allot equity securities (and sell treasury shares) under any such oer or agreement as if the
power had not ended.
15. Additional disapplication of pre-emption rights
That if resolution 13 is passed, the Board be given power in addition to any power granted under resolution 14 to allot equity securities (as defined
in section 560(1) of the Companies Act 2006) for cash under the authority given by that resolution and/or to sell ordinary shares held by the
Company as treasury shares for cash as if section 561 of the Companies Act 2006 did not apply to any such allotment or sale, such authority to be:
(A) limited to the allotment of equity securities or sale of treasury shares up to a nominal amount of £10,339; and
(B) used only for the purposes of financing (or refinancing, if the authority is to be used within six months aer the original transaction) a
transaction which the Directors of the Company determine to be an acquisition or other capital investment of a kind contemplated by the
Statement of Principles on Disapplying Pre-Emption Rights most recently published by the Pre-Emption Group prior to the date of this Notice,
such power to apply until to apply until the close of business on 20 October 2023 or, if earlier, the AGM in 2023 but, in each case, during this
period the Company may make oers, and enter into agreements which would, or might, require equity securities to be allotted (and treasury
shares to be sold) aer the power ends and the Board may allot equity securities (and sell treasury shares) under any such oer or agreement
as if the power had not ended.
158
PayPoint Plc Annual Report 2022
16. Company’s authority to purchase its own shares
That the Company be authorised for the purposes of section 701 of the Companies Act 2006 to make one or more market purchases
(as defined in section 693(4) of the Companies Act 2006) of its ordinary shares of 1/3 pence each, provided that:
(A) the maximum number of ordinary shares hereby authorised to be purchased is 6,892,704;
(B) the minimum price which may be paid for an ordinary share is 5 pence and the maximum price which may be paid for an ordinary share is the
highest of:
(i) an amount equal to 5% above the average market value of an ordinary share for the five business days immediately preceding the day on
which that ordinary share is contracted to be purchased; and
(ii) the higher of the price of the last independent trade of an ordinary share and the highest current independent bid for an ordinary share on
the trading venues where the purchase is carried out at the relevant time, in each case, exclusive of expenses;
such authority to apply to apply until the close of business on 20 October 2023 or, if earlier, the AGM in 2023 but in each case so that during this
period the Company may enter into a contract to purchase ordinary shares which would, or might be, completed or executed wholly or partly aer
the authority ends and the Company may purchase ordinary shares pursuant to any such contract as if the authority had not ended.
17. Calling of general meetings on 14 days’ notice.
That any general meeting of the Company that is not an AGM may be called on not less than 14 clear days’ notice.
Recommendation
With respect to resolutions 4 to 10 (inclusive), the Chairman confirms that, based on the performance evaluation undertaken during the period,
each of the retiring Directors’ performance continues to be eective and to demonstrate commitment to the role. The Board has considered this
and recommends that each Director who wishes to serve again be proposed for election/re-election. This opinion is based on an assessment of each
Director’s relevant knowledge and experience and the conclusion that, in each case, their informed opinions are of significant value and contribute
greatly to Board discussions. Biographies of the Directors including their areas of expertise relevant to their role as a Director are given on pages
72 to 73 of the 2022 annual report.
The Directors believe that the proposals described in this Notice of Meeting are in the best interests of the Company and its shareholders as a whole
and recommend shareholders to support them by voting in favour of all the resolutions, as they intend to in respect of their own beneficial shareholders.
By order of the Board
Registered oce:
1 The Boulevard
Shire Park
Welwyn Garden City
Hertfordshire AL7 1EL
United Kingdom
Registered in England and Wales
Company No. 03581541
Notice of Annual General Meeting continued
Brian McLelland
Company Secretary
17 June 2022
159
Strategic report Governance Financial statements Shareholder information
1. Shareholders should submit their proxy vote not less than 48 hours before the time of the AGM. A shareholder may appoint more than one proxy
in relation to the AGM provided that each proxy is appointed to exercise the rights attached to a dierent share or shares held by that shareholder.
A proxy need not be a shareholder of the Company. To appoint a proxy or proxies shareholders must: (a) submit a proxy appointment electronically
at www.sharevote.co.uk; or (b) complete a Form of Proxy, sign it and return it, together with the power of attorney or other authority (if any) under
which it is signed, or a notarially certified copy of such authority, to the Company’s registrars, Equiniti Limited, Aspect House, Spencer Road,
Lancing, West Sussex BN99 6DA; or (c) complete a CREST Proxy Instruction (as set out in paragraph 5 below), in each case so that it is received
no later than 12.00 noon on 18 July 2022. To appoint more than one proxy, you will need to complete a separate Form of Proxy in relation to each
appointment. A Form of Proxy for use in connection with the AGM is enclosed with this document. Full details of the procedure to submit a proxy
electronically are given on the website www.sharevote.co.uk. To use this service, you will need your Voting ID, Task ID and Shareholder Reference
Number printed on the Form of Proxy. If you do not have a Form of Proxy and believe that you should, please contact the Company’s registrars,
Equiniti Limited, on 0371 384 2030 (or +44 121 415 7047 if calling from outside the United Kingdom) or at Equiniti Limited, Aspect House, Spencer
Road, Lancing, West Sussex BN99 6DA. Lines are open from 8.30am to 5.30pm, Monday to Friday (except public holidays in England and Wales).
2. A member entitled to attend, speak and vote at the AGM may appoint a proxy (who need not be a member of the Company) to exercise all or any of
his or her rights to attend and to speak and vote on his or her behalf. A member may appoint more than one proxy in relation to a meeting provided
that each proxy is appointed to exercise the rights attached to a dierent share or shares held by him or her. To appoint more than one proxy please
contact the Company’s registrar using the details provided above. CREST members should utilise the CREST electronic proxy appointment service
in accordance with the procedures set out below, and in each case must be received by the Company not less than 48 hours before the time of the
meeting. You must inform the Company’s registrar in writing of any termination of the authorities of a proxy.
3. Any person to whom this notice is sent who is a person nominated under section 146 of the Companies Act 2006 to enjoy information rights
(a ‘Nominated Person’) may, under an agreement between him/her and the shareholder by whom he/she was nominated, have a right to be
appointed (or to have someone else appointed) as a proxy for the AGM. If a Nominated Person has no such proxy appointment right or does not
wish to exercise it, he/she may, under any such agreement, have a right to give instructions to the shareholder as to the exercise of voting rights.
4. The statement of the rights of shareholders to appoint a proxy in paragraphs one and two above does not apply to Nominated Persons. The rights
described in these paragraphs can only be exercised by shareholders of the Company. Nominated Persons are reminded that they should contact
the registered holder of their shares (and not the Company) on matters relating to their investments in the Company.
5. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the AGM and any
adjournment thereof by using the procedures described in the CREST manual. CREST personal members or other CREST sponsored members, and
those CREST members who have appointed a voting service provider(s) should refer to their CREST sponsor or voting service provider(s), who will
be able to take the appropriate action on their behalf. In order for a proxy appointment, or instruction, made by means of CREST to be valid, the
appropriate CREST message (a CREST proxy instruction) must be properly authenticated in accordance with Euroclear UK & Ireland Limited’s
(‘EUI’) specifications and must contain the information required for such instructions, as described in the CREST manual. The message, regardless
of whether it relates to the appointment of a proxy or to an amendment to the instruction given to a previously appointed proxy must, in order to
be valid, be transmitted so as to be received by the issuer’s agent (ID RA19) by the latest time(s) for receipt of proxy appointments specified in the
notice of AGM. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the
CREST applications host) from which the issuer’s agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST.
The Company may treat as invalid a CREST proxy instruction in the circumstances set out in Regulation 35(5) of the Uncertificated Securities
Regulations 2001. CREST members and, where applicable, their CREST sponsors or voting service providers should note that EUI does not make
available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the
input of CREST proxy instructions. It is therefore the responsibility of the CREST member concerned to take (or, if the CREST member is a
CREST personal member or sponsored member or has appointed a voting service provider(s), to procure that his CREST sponsor or voting service
provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time.
In this connection, CREST members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those
sections of the CREST manual concerning practical limitations of the CREST system and timings.
If you are an institutional investor you may be able to appoint a proxy electronically via the Proximity platform, a process which has been agreed
by the Company and approved by the Registrar. For further information regarding Proxymity, please go to www.proxymity.io. Your proxy must be
lodged by 12.00 noon on 18 July 2022 in order to be considered valid. Before you can appoint a proxy via this process you will need to have agreed
to Proxymity’s associated terms and conditions. It is important that you read these carefully as you will be bound by them and they will govern the
electronic appointment of your proxy.
6. Any corporation which is a member can appoint one or more corporate representatives who may exercise on its behalf all of its powers as a member
provided that they do not do so in relation to the same shares.
7. To be entitled to attend and vote at the AGM or any adjournment thereof (and also for the purpose of calculating how many votes a person may
cast), a person must have his/her name entered on the register of members of the Company by 6:30pm on 18 July 2022 (or by close of business
on the date being two days before any adjourned meeting). Changes to entries on the register of members aer this time shall be disregarded in
determining the rights of any person to attend or vote at the meeting.
8. Biographical details of the Directors of the Company are shown on pages 72 to 73 of the 2022 annual report.
9. Each member attending the meeting has the right to ask questions relating to the business being dealt with at the meeting which, in accordance
with section 319A of the Companies Act 2006 and subject to some exceptions, the Company must cause such questions to be answered.
However, no such answer need be given if:
(a) to do so would interfere unduly with the preparation for the meeting or involve the disclosure of confidential information;
(b) the answer has already been given on a website in the form of an answer to a question; or
(c) it is undesirable in the interests of the Company or the good order of the meeting that the question be answered.
Notes to the Notice of Annual General Meeting
160
PayPoint Plc Annual Report 2022
10. Information relating to the meeting which the Company is required by section 311A of the Companies Act 2006 to publish on a website in advance
of the meeting may be viewed at www.paypoint.com. A member may not use any electronic address provided by the Company in this document or
with any proxy appointment form or in any website for communicating with the Company for any purpose in relation to the meeting other than as
expressly stated in it.
11. It is possible that, pursuant to members’ requests made in accordance with section 527 of the Companies Act 2006, the Company will be required
to publish on a website a statement in accordance with section 528 of that Act setting out any matter that the members concerned propose to
raise at the meeting relating to: (i) the audit of the Company’s accounts (including the auditor’s report and the conduct of the audit) that are to be
laid before the AGM; or (ii) any circumstances connected with an auditor of the Company ceasing to hold oce since the previous meeting at which
annual accounts and reports were laid. The Company cannot require the members concerned to pay its expenses in complying with those sections.
The Company must forward any such statement to its auditor by the time it makes the statement available on the website. The business which may
be dealt with at the meeting includes any such statement.
12. The issued share capital of the Company as at 26 May 2022, the latest practicable date before publication of this notice, was 68,927,036 ordinary
shares of 0.03 pence each, carrying one vote each. The Company holds no treasury shares. The total number of voting rights in the Company on
26 May 2022 is 68,927,036.
13. The Directors’ service agreements, Directors’ letters of appointment and Directors’ deeds of indemnity are available for inspection at the
registered oce of the Company. Email: brianmclelland@paypoint.com during normal business hours on any weekday (excluding public holidays).
Copies of these documents will also be available at the place of the AGM from 15 minutes before the meeting until it ends.
Notes to the Notice of Annual General Meeting continued
161
Strategic report Governance Financial statements Shareholder information
Explanatory notes to certain of the resolutions to be proposed
at the Annual General Meeting
Resolution 1: To receive the Directors’ report and accounts
The Board asks that shareholders receive the Strategic Report, Directors’ Report and the financial statements for the year ended 31 March 2022,
together with the report of the auditor.
Resolution 2: Directors’ Remuneration Report
Shareholders are asked to approve the Directors’ Remuneration Report that appears on pages 90 to 101 of the 2022 annual report. This vote is
advisory, and the Directors’ entitlement to remuneration is not conditional on it.
Resolution 3: Declaration of final dividend
Shareholders are being asked to approve a final dividend of 18.0 pence per ordinary share for the year ended 31 March 2022. Subject to approval, the
dividend will be paid in equal instalments of 9.0 pence per share on 25 July 2022 and 30 September 2022 to the holders of ordinary shares whose
names are recorded on the register of members at the close of business on 10 June 2022 and 2 September 2022 respectively.
Resolutions 4 – 10: Directors
The Directors believe that the Board continues to maintain an appropriate balance of knowledge and skills and that all the Non-Executive Directors are
independent in character and judgement. This follows a process of formal evaluation, which confirms that each Director makes an eective and valuable
contribution to the Board and demonstrates commitment to the role (including making sucient time available for Board and Committee meetings and
other duties as required). In accordance with the UK Corporate Governance Code and in line with previous years, all Directors will again stand for
re-election, as relevant, at the AGM this year. Biographies are available on pages 72 to 73 of the annual report. It is the Board’s view that the Directors’
biographies illustrate why each Director’s contribution is, and continues to be, important to the Company’s long-term sustainable success.
Resolutions 11 and 12: Appointment and remuneration of auditor
The Company is required to appoint or reappoint an auditor at each general meeting at which accounts are presented to shareholders. Following an
evaluation of the eectiveness and independence of KPMG LLP, the Directors recommend KPMG LLP be reappointed as auditor. Resolution 12 grants
authority to the Company to determine the auditor’s remuneration.
Resolution 13: Directors’ authority to allot shares
Paragraph (A) of this resolution would give the Directors the authority to allot ordinary shares or grant rights to subscribe for or convert any securities
into ordinary shares up to an aggregate nominal amount equal to £68,927 (representing 22,975,6379 ordinary shares of 0.03 pence each). This amount
represents approximately one-third of the issued ordinary share capital of the Company as at 26 May 2022, the latest practicable date prior to
publication of this notice. In line with guidance issued by the Investment Association, paragraph (B) of this resolution would give the Directors authority
to allot ordinary shares or grant rights to subscribe for or convert any securities into ordinary shares in connection with a rights issue in favour of
ordinary shareholders up to an aggregate nominal amount equal to £137,854 (representing 45,951,357 ordinary shares of 0.03 pence each), as reduced
by the nominal amount of any shares issued under paragraph (A) of this resolution. This amount (before any reduction) represents approximately
two-thirds of the issued ordinary share capital of the Company as at 26 May 2022, being the latest practicable date prior to publication of this notice.
The authorities sought under paragraphs (A) and (B) of this resolution will expire at the close of business on 20 October 2023 or, if earlier, the AGM in
2023. The Directors have no present intention to exercise either of the authorities sought under this resolution, other than to allot ordinary shares as
following the exercise of options and awards under the Company’s share schemes. However, if they do exercise the authorities, the Directors intend to
follow Investment Association recommendations concerning their use. As at the date of this Notice, the Company does not hold any shares in treasury.
Resolutions 14 and 15: Authority to disapply pre-emption rights
Resolutions 14 and 15 are proposed as special resolutions. If the Directors wish to allot new shares and other equity securities, or sell treasury shares,
for cash (other than in connection with an employee share scheme), company law requires that these shares are first oered to shareholders in
proportion to their existing holdings.
At last year’s AGM, a special resolution was passed, in line with institutional shareholder guidelines, empowering the Directors to allot equity securities
for cash without first oering them to existing shareholders in proportion to their existing holdings. It is proposed, under resolution 14, that this
authority be renewed. If approved, the resolution will authorise Directors to issue shares in connection with pre-emptive oers, or otherwise to issue
shares for cash up to an aggregate nominal amount of £10,339 (representing 3,432,845 ordinary shares of 0.03 pence each) which includes the sale
on a non pre-emptive basis of any shares the Company holds in treasury for cash.
The Pre-Emption Group’s Statement of Principles also support the annual disapplication of pre-emption rights in respect of allotments of shares and
other equity securities and sales of treasury shares for cash where these represent no more than an additional 5% of issued ordinary share capital
(exclusive of treasury shares) and are used only in connection with an acquisition or specified capital investment. The Pre-Emption Group’s Statement
of Principles defines ‘specified capital investment’ as meaning one or more specific capital investment related uses for the proceeds of an issue of
equity securities, in respect of which sucient information regarding the eect of the transaction on the Company, the assets the subject of the
transaction and (where appropriate) the profits attributable to them is made available to shareholders to enable them to reach an assessment of the
potential return.
Accordingly, the purpose of resolution 15 is to authorise the Directors to allot new shares and other equity securities pursuant to the allotment
authority given by resolution 13, or sell treasury shares for cash, without first being required to oer such securities to existing shareholders, up to a
further nominal amount of £10,339 (representing 3,432,845 ordinary shares of 0.03 pence each). The authority granted by this resolution, if passed,
will only be used in connection with an acquisition or specified capital investment which is announced contemporaneously with the allotment, or which
has taken place in the preceding six-month period and is disclosed in the announcement of the issue. If the authority given in resolution 15 is used, the
Company will publish details of its use in its next annual report. The authority granted by resolution 15 would be in addition to the general authority to
disapply pre-emption rights under resolution 14. The maximum nominal value of equity securities which could be allotted if both authorities were used
would be £20,678. The Directors intend to adhere to the provisions in the Pre-emption Group’s Statement of Principles and not to allot shares or other
equity securities or sell treasury shares for cash on a non pre-emptive basis pursuant to the authority in resolution 15 in excess of an amount equal to
7.5% of the total issued ordinary share capital of the Company, excluding treasury shares, within a rolling three-year period, other than: (i) With prior
consultation with shareholders; or (ii) In connection with an acquisition or specified capital investment which is announced contemporaneously with
the allotment or which has taken place in the preceding six-month period and is disclosed in the announcement of the allotment. The Directors have
no present intention of using the power under these authorities but they will have the flexibility to act in the best interests of the Company when
opportunities arise.
162
PayPoint Plc Annual Report 2022
Resolution 16: Authority to make market purchases of ordinary shares
Resolution 16 is another special resolution and renews the Directors’ authority granted by the shareholders at previous AGMs to make market
purchases of up to 10% of the Company’s issued ordinary shares (excluding any treasury shares). The Company may make purchases of its own shares
if, having taken account of all major factors such as the eect on earnings and net asset value per share, gearing levels and alternative investment
opportunities, such purchases are considered to be in the Company’s and shareholders’ best interests while maintaining an ecient capital structure.
If the Company purchases any of its ordinary shares pursuant to resolution 16, the Company may cancel these shares or hold them in treasury. Such
decision will be made by the Directors at the time of purchase. The minimum price, exclusive of expenses, which may be paid for an ordinary share is 5
pence. The maximum price, exclusive of expenses, which may be paid for an ordinary share is the highest of: (i) an amount equal to 5% above the average
market value for an ordinary share for the five business days immediately preceding the date of the purchase; and (ii) the higher of the price of the last
independent trade and the highest current independent bid on the trading venues where the purchase is carried out at the relevant time. At last year’s
AGM, the Company was given authority to make market purchases of up to 6,838,184 shares. No shares have been purchased by the Company in the
market since then. Options to subscribe for a total of 429,738 shares, being 0.6% of the issued ordinary share capital, were outstanding at 26 May 2022
(being the latest practicable date prior to the publication of this notice). If the existing authority given at the 2021 AGM and the authority being sought
under resolution 16 were to be fully used, these would represent 10.5% of the Company’s issued ordinary share capital at that date. The Directors do
not have any current plans to exercise the authority to be granted pursuant to resolution 16. The Directors will exercise this authority only when to do
so would be in the best interests of the Company, and of its shareholders generally. The authority will expire at the earlier of 22 October 2022 and the
conclusion of the AGM of the Company held in 2023.
Resolution 17: Authority to allow any general meeting of the Company that is not an annual general meeting to be called on not less than
14 clear days’ notice
The minimum notice period for general meetings of listed companies is 21 days, but companies may reduce this period to 14 days (other than for annual
general meetings) provided that:
(a) the Company oers a facility for shareholders to vote by electronic means. This condition is met if the Company has a facility enabling all
shareholders to appoint a proxy by means of a website; and
(b) on an annual basis, a shareholders’ resolution approving the reduction of the minimum notice period from 21 days to 14 days is passed.
The Board is therefore proposing this resolution as a special resolution to approve 14 days as the minimum period of notice for all general meetings of
the Company other than AGMs. The approval of this resolution will be eective until the end of the 2023 AGM of the Company, when it is intended that
the approval will be renewed. The Board intends that the shorter notice period will only be used in limited exceptional circumstances which are time-
sensitive, rather than as a matter of routine, and only where the flexibility is merited by the business of the meeting and is thought to be in the interests
of shareholders as a whole. The Directors do not have any current intention to exercise this authority but consider it appropriate to ensure that the
Company has the necessary flexibility to respond to all eventualities.
Explanatory notes to certain of the resolutions to be proposed
at the Annual General Meeting continued
163
Shareholder informationFinancial statementsGovernanceStrategic report
Directors
G Barr¹
A Dale
G Kerr¹ (Chairman)
R Shapland¹
R Sharma¹
N Wiles
B Wishart¹
Company Secretary
B McLelland
Registered oce
Registered in England and Wales
Company number 03581541
Independent auditor
KPMG LLP
15 Canada Square
London E14 5GL
United Kingdom
Registrar
Equiniti
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
1. Non-Executive Directors.
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PayPoint Group Annual Report 2022