Accelerating

together

Annual Report 2024

PayPoint Plc Annual Report 2024

Who we are

The PayPoint Group provides a multichannel payments

platform and delivers community services through over

65,000 retailer partner and SME locations.

Our Group serves a diverse range of customers:

from leading service organisations like EDF and

Monzo; retailers and SMEs from Asda to the best UK

independent stores; parcel carriers like Amazon and

Royal Mail; to the millions of consumers who pay bills,

access cash, make card payments or pick up parcels

every day at thousands of locations across the UK.

Our purpose

We deliver innovative payments solutions

and services that make people’s lives a

little easier every day.

Making

people’s lives a little easier

Financial highlights

Revenue

£306.4m

+82.7%

(FY23⁶: £167.7m)

Net corporate debt

£67.5m

-6.8%

(FY23⁶: £72.4m)

Net revenue

£181.0m

+40.4%

(FY23⁶: £128.9m)

Underlying profit

before tax

£61.7m

+21.5%

(FY23⁶: £50.8m)

Underlying EBITDA

£81.3m

+32.6%

(FY23⁶: £61.3m)

Profit before tax

£48.2m

+13.1%

(FY23⁶: £42.6m)

Diluted earnings

per share

48.8p

-1.6%

(FY23: 49.6p)

Diluted underlying

earnings per share

62.6p

+3.8%

(FY23⁶: 60.3p)

Contents

1 Net revenue is an alternative performance measure. Refer to note 4 to the financial statements

for a reconciliation to revenue.

2 Underlying EBITDA (EBITDA excluding adjusting items) is an alternative performance measure.

Refer to note 1 for the definition and the Financial review for a reconciliation to profit before tax.

3 Underlying profit before tax (profit before tax excluding adjusting items) is an alternative

performance measure. Refer to note 1 to the financial statements for a reconciliation to profit

before tax.

4 Net corporate debt (excluding IFRS 16 liabilities) is an alternative performance measure.

Refer to note 1 to the financial statements for a reconciliation to cash and cash equivalents.

5 Diluted underlying earnings per share is an alternative performance measure. Refer to notes 1 and 11

to the financial statements.

6 FY23 comparatives contain only a one month contribution from the Love2shop business

post-acquisition.

For more information go to

corporate.paypoint.com

Strategic Report

01 Financial highlights

02 PayPoint Group at a glance

04 Investment case

06 Our partnerships

08 Chief Executive’s review

12 Market overview

14 Our business model

16 Our strategy

32 Key performance indicators

34 Responsible business

58 Risk management

60 Principal risks and uncertainties

67 Viability statement

69 Financial review

Governance

76 Introduction to the Corporate Governance

report from the Chair

77 Corporate Governance statement

78 Board of Directors

80 Executive Board

82 Corporate Governance Report

85 Corporate Governance Framework

86 Division of roles and responsibilities

88 Board activities

89 Induction and training

90 Performance evaluation of the PayPoint Board

and its Committees

92 Nomination Committee Report

94 Audit Committee Report

100 Directors’ Remuneration Report

120 Directors’ Report

123 Statement of Directors’ responsibilities

Financial statements

124 Independent Auditors’ Report

130 Consolidated statement of profit or loss

131 Consolidated statement of comprehensive income

132 Consolidated statement of financial position

133 Consolidated statement of changes in equity

134 Consolidated statement of cash flows

134 Note to the consolidated statement of cash flows

135 Company statement of financial position

136 Company statement of changes in equity

137 Company statement of cash flows

138 Notes to the consolidated financial statements

Shareholder Information

175 Officers and professional advisers

Strategic report

Governance Financial statements Shareholder information

PayPoint Plc Annual Report 2024

PayPoint Group at a glance

Our purpose:

We deliver innovative

payments and services

that make people's lives

a little easier every day.

Our divisions:

We operate across four divisions:

Enabling

a multichannel payments platform and

delivering community services through

our retailer partner & SME networks.

We provide digital solutions,

technology and payment services

for SMEs and retailers to deliver

vital community services.

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’.

We deliver a channel agnostic

payment platform that gives

clients and consumers choice.

We provide employee and

customer rewards and prepaid

savings solutions to thousands

of consumers and businesses.

How we do it

• Retail services – EPoS, FMCG,

Counter Cash, ATMs.

• Card payments.

Who we work with Who we work with Who we work with Who we work with

How we do it

• E-commerce – Collect+

(Parcels Pick Up, Drop Off,

Send).

How we do it

• Digital payments – MultiPay

and Open Banking.

• Cash through to digital

payments – eMoney.

• Cash payments – bill

payments and top-ups.

How we do it

• Love2shop – the UK’s leading

digital platform for employee

and customer rewards.

• Park Christmas Savings –

the UK’s biggest Christmas

Savings Club.

Shopping

E-commerce Payments & Banking Love2shop

Read more on page 34

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.

Strategic report

Governance Financial statements Shareholder information

PayPoint Plc Annual Report 2024

Multichannel

Multichannel payments

platform and the delivery

of community services

through our retailer and

SME networks.

Investment case

PayPoint Plc Annual Report 2024

platform

Clear path to delivering

£100m EBITDA by end of FY26

We have delivered a robust financial

performance and made further progress

towards delivering £100m EBITDA by the end

of FY26, across our growth building blocks

in digital payments, card payments, parcels,

community cash access, retailer services and our

Love2shop business.

Streamlined organisational

structure and cost base to

deliver growth

Following a through review, changes were

implemented in April 2024 to simplify the

structure, enhance cross company collaboration

and deliver efficiencies to enable future

reinvestment in the business.

Leading multichannel

payments platform

We continue to diversify our multichannel

payments client base and expand the range of

digital solutions that we can deliver to support

our clients in multiple sectors, across Open

Banking, direct debit, cards, cash, Love2shop

vouchers/rewards and prepaid solutions.

Unparalleled retailer & SME

networks delivering vital

community services

Our expanded proposition helps our

SMEs and retailer partners keep pace with

changing consumer needs, expectations and

demographics. We continue to innovate and

increase the range of vital community services

provided through our in-store technology to drive

retention and deliver more opportunities to earn

for our partners, including parcels, local banking

and government services.

Enhanced rewards for

shareholders with 3-year share

buyback programme, commencing

with at least £20m over next 12

months, and increasing dividend

Three-year share buyback programme

announced, commencing with at least £20 million

over the next 12 months, with the potential to

increase in years 2 and 3 depending on business

performance, market conditions, cash generation

and the overall capital needs of the business.

Throughout this period, we will continue to

increase dividends at a nominal rate and grow

our cover ratio from the current 1.5 to 2.0

times earnings range to over 2.0 times earnings

by FY27.

Strategic report

Governance Financial statements Shareholder information

PayPoint Plc Annual Report 2024

Our partnerships

Royal Mail

Strategic partnership with Royal Mail across

Collect+ network, the leading Out of Home (OOH)

parcel pick up, drop off and send service in the UK.

The multi-year agreement will enable parcel drop

off for Royal Mail customers at 5,000 Collect+

stores in communities across the UK by Summer

2024. This partnership will combine the benefits

of Royal Mail’s online postage options with the

convenience of PayPoint’s retail partners.

The partnership will support Royal Mail’s strategy

to expand its OOH reach and local network,

providing customers with a range of flexible

choices for dropping off parcels and helping to

meet growing demand for additional delivery,

collection and drop-off options.

This partnership is an important part of Royal Mail’s

strategy to make our services even more convenient

for customers and to give them the widest possible

choice of where and when they can send parcels.”

Martin Seidenberg

Group Chief Executive of International Distributions Services

Our partnership philosophy

across the Group, combined

with an intensity and focus

on execution, is already

unlocking new markets

and revenue opportunities

for us.

Accelerating

PayPoint Plc Annual Report 2024

together

Lloyds Bank

Major partnership expansion, which will see Lloyds

Bank Cardnet become the main card acquiring partner

across the PayPoint Group’s extensive network of

over 65,000 SME and retailer partners.

The expanded partnership, starting with an initial

phase in Q2 FY25, followed by a full launch expected

in Q3 FY25, will offer merchants a market-leading

banking and card services proposition combining card

payments, a 12-month fee-free Lloyds bank business

account and a connected competitive commercial

card offering.

The enhanced proposition strengthens PayPoint

Group’s market position, accelerates growth across our

merchant estates and delivers better tools, support

and experience for its SME and retailer partners.

DVLA

PayPoint was awarded the Driver & Vehicle Licensing

Agency (DVLA) contract for providing International

Driving Permits across its extensive network of

retailer partners across the UK in January 2024,

with the service going live on 1 April 2024.

The multi-year agreement sees the service move

from the Post Office to PayPoint, adding another

important central government service to its

portfolio and maintaining vital access to this service

at the heart of communities across the UK. An

International Driving Permit is a permit that allows

you to drive in over 140 countries where a UK driving

licence alone may not be enough, including the

United Arab Emirates, South Africa, Turkey, Brazil

and Japan, with c.300,000 permits issued each year.

Citizens Advice Stevenage

PayPoint and Citizens Advice Stevenage partnered

to launch a new online customer support product

initially implemented in a trial phase from

September 2023.

The trial saw Specialist Debt Advisors at Citizens

Advice Stevenage help develop and use PayPoint’s

Financial Information Service (FIS) Customer

Support Tool, an Open Banking solution, that has

cut the time spent by Debt Advisors gathering

and reviewing financial information of individuals

seeking help from an average of three weeks per

case to just minutes.

Our partnership with PayPoint is incredibly important

for our next stage of growth and leveraging the

significant investment we are making in the Lloyds

Bank Cardnet Merchant Services business.”

Melinda Roylett

Managing Director, Lloyds Bank Merchant Services

PayPoint’s FIS tool has enabled our advisors to

achieve an almost instant, real-time view of people’s

financial circumstances, removing barriers to people

engaging with debt advice and creating momentum

for the people we help to start feeling the benefit.”

Charlotte Blizzard-Welch

CEO, Citizens Advice Stevenage

Strategic report

Governance Financial statements Shareholder information

PayPoint Plc Annual Report 2024

Chief Executive’s review

These results reflect both the

resilience of our businesses

and the transformation

delivered over the past

three years as we unlock

further opportunities and

growth across our four

business divisions."

Nick Wiles

Chief Executive

Delivering

transformation

PayPoint Plc Annual Report 2024

Partnership philosophy opening

up new revenue opportunities

Our partnership philosophy across the Group,

combined with an intensity and focus on

execution, is already unlocking new markets and

revenue opportunities for us. This includes the

recently announced partnerships with Royal Mail,

Lloyds Bank and DVLA, our success in Open

Banking working with Ovo and the Department

for Energy Security and Net Zero, and the

continued focus on our convenience retail sector

relationships, working closely with our retailer

partners and the key retail trade associations.

This approach underpins our delivery across

every business division, in addition to our growth

building blocks in digital payments, card payments,

parcels, community cash access, retailer services

and our Love2shop business.

Streamlined organisational structure

and cost base to deliver growth

During H2 FY24, we announced that we had

commenced a thorough review to ensure we had

the appropriate organisational structure and cost

base to underpin our growth ambitions and, in

part, mitigate inflationary cost pressures. Like

many organisations in the UK, we are trading

in a challenging economic climate and facing

significant inflationary cost pressures, and need to

be proactive in order to mitigate these pressures

and maintain a strong business platform. The

review concluded in March 2024 and a number

of changes were implemented in April 2024 to

simplify the structure, enhance cross company

collaboration and deliver efficiencies to enable

future reinvestment in the business, representing a

gross cost saving of circa £4 million for FY25.

Review by Division

Shopping Division

In Retail Services, we have further enhanced our

retailer propositions, with positive feedback from

our partners and additional value delivered to our

retailers through a 21.5% increase in commission

paid year on year. In November 2023, our next

generation device, PayPoint Mini, was launched

and our integrated third-party EPoS solution,

PayPoint Connect, is now rolling out across our

estate, working in partnership initially with the

Retail Data Partnership and iPosG. Our FMCG

consumer engagement proposition, PayPoint

Engage, has delivered its first seven figure net

revenue contribution, delivering campaigns for

major consumer brands, leveraging our PayPoint

One platform, advertising screens and vouchering

capability. In addition, we launched Love2shop

physical gift cards for the first time in over 2,600

locations for the Christmas 2023 gifting season,

partnering with key multiple retailers, including

One Stop, MFG, Henderson’s Retail and CJ Lang,

with a further rollout to independent retailers

underway in the current year.

In Cards, the positive momentum has continued

to grow, driven by further improvements to our

merchant proposition, including our recently

launched Handepay Rewards scheme, a

strengthened pricing governance approach and a

continued focus on proactive churn management

driven by AI and analytics. Our recently announced

major partnership expansion with Lloyds Bank will

enhance our proposition further, strengthening

our market position, accelerating growth across

our merchant estates and delivering better tools,

support and experience for our SME and retailer

partners. The expanded partnership, starting

with an initial phase in Q2 FY25, followed by a full

launch expected in Q3 FY25 (subject to regulatory

approval), will offer merchants a market-leading

banking and card services proposition combining

card payments, a 12-month fee-free Lloyds bank

business account and a connected competitive

commercial card offering.

Lloyds Bank Cardnet will be investing significantly

into their business to enhance product

development and data analytics for merchants.

In our building Community Cash Access and

Banking network, ATM performance has been

disappointing, with net revenue decreasing by

8.2% year on year. Management in this area has

been strengthened, with a new hire secured

to drive tighter operational management of

the estate and to win new estate growth

opportunities. Our Counter Cash service, offering

withdrawals and balance enquiries over the

counter, has grown to 2,150 locations, and we

have processed over £430 million of consumer

deposits for our neobank clients in the year. We

are now actively exploring how we support High

Street Bank customers with cash access for

consumer and SME deposits and withdrawals

across our extensive network.

We have continued to strengthen our retailer

partner relationships and service, including a

refreshed approach to the ‘early life’ support

provided to our retailer partners to drive adoption

of new services, the launch of a new chatbot and

automated services for day-to-day queries, more

direct communications and our strengthened

relationships with the key retail trade associations.

Our broader commitment to our retailer partners

to deliver further value and opportunities to earn

has delivered an increase to a positive NPS score

for the first time in six years. As more critical

services continue to withdraw from communities

and High Streets across the UK, we are more

focused than ever on working closely with our

retailer and industry partners to evolve our

service provision and ensure we can leverage our

extensive network to provide vital infrastructure

and accessibility to individuals close to where

they live.

Robust

financial performance

with further progress

towards delivering

£100m EBITDA by

the end of FY26.

Strategic report

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PayPoint Plc Annual Report 2024

Chief Executive’s review continued

Emerging Opportunities

• Expanded carrier relationships – broadening

range of services offered to each of our carrier

partners, leveraging our superior in-store

technology and network to drive further

volume growth.

• Network expansion – expanding from extensive

convenience retail network into new sectors

and locations, including student unions,

transport hubs and hospitals.

• Print In Store – further rollout of circa 2,000

additional Zebra label printers to widen access

to service and support new partnerships,

including Royal Mail.

Payments & Banking Division

In Payments & Banking, our integrated digital

payments platform, MultiPay, continues to

establish itself as a comprehensive payment

solution for clients across card processing, Open

Banking, direct debit and cash. We have secured

further wins in the Housing sector, with Rooftop

and Sovereign Network Group, and in the Charity

sector with East Anglian Air Ambulance. We are

in the process of onboarding Chase and Revolut

for consumer deposits into our retailer partner

network and expanding our community cash

banking solutions across the UK. We were also

pleased to have won the DVLA contract for

International Driving Permits, which went live

on 1 April 2024, marking another key central

government service that will be fulfilled via our

extensive retailer network.

Our Open Banking services continue to go from

strength to strength, supported by our partner,

OB Connect, with 25 clients live for our services,

including Ovo and AMEX for Confirmation of

Payee. In particular, our work with Citizens Advice

in Stevenage, and a growing number of Citizens

Advice offices nationally, utilising our FIS (Financial

Information Service) support tool, is having an

important impact on the work they do supporting

clients in financial distress – debt caseworkers

are now able to get an up to date, accurate and

holistic view of someone’s finances in minutes,

when it used to take weeks or even months.

Emerging Opportunities

• FMCG – further growth from our consumer

engagement platform, PayPoint Engage.

• Foreign Currency – development of our

partnership with eurochange in circa 500 stores.

• Park Christmas Savings – optimisation of our

network of Super Agents for recruiting savers.

E-commerce Division

In E-commerce, it has been a landmark year

for Collect+, with net revenue of £11.8 million

delivered and parcel transactions exceeding

100 million for the first time. This excellent

performance has been delivered against the

backdrop of an increasingly challenged UK online

retail market, with total market parcel volumes

down in each year since the recent peak of 2021

and a number of major brands failing in the year.

Our partnership with Yodel/Vinted has delivered

strong growth in our new Store to Store service,

which has been quickly adopted by consumers

and our carrier partners. We have also expanded

our Amazon network to over 7,000 stores and a

further rollout of Zebra printer technology has

also been completed in the year, underlining our

continuing commitment to invest in improving the

consumer experience in store.

Importantly, we have announced new and

expanded partnerships with Royal Mail and Yodel,

particularly via their relationship with Vinted,

reinforcing the quality and attractiveness of our

leading Out of Home network and ensuring that

we continue to deliver positive volume growth

over the current financial year. We have also

successfully expanded the Collect+ network into

new locations and demographics, including our

growing student presence working with 14 of the

top universities and student unions.

As a result, they can provide advice and information

faster, reducing the risk of debts becoming even

greater or more serious throughout the advice

process. Open Banking payments in the UK grew

90% year on year to 130m payments in 2023

and PayPoint is now one of the leading Payment

Initiation Service Providers (PISP) in the UK. This

is an important demonstration of how our digital

payments solutions are having a strong community

impact, which is underpinned by our continuing

engagement with key senior stakeholders across

the sectors we operate in, including Ofgem, UK

Finance, Pay.UK and the Department of Energy

Security and Net Zero.

In Cash, legacy energy bill payments net revenue

decreased by 10.6% for the full year, with the

rate of decline year on year moderating in H2

FY24 to -2.6% versus the sharp fall of -19.2% in

H1 FY24. The decreased H1 FY24 performance

was driven by several factors, including a shift in

consumer topping up behaviour due to the Cost

of Living challenges, unseasonably warm weather

over the period and the impact of customers

still using credit from the Energy Bills Support

Scheme (EBSS) up until the end of the half year.

In H2, energy sector performance recovered as

the EBSS scheme ended, with the rate of decline

moderating versus the prior year. In addition,

the energy price cap, updated by Ofgem on a

quarterly basis, was set at £1,928 for pre-pay

customers for January to March 2024, decreasing

over the course of FY24 from £4,358 in the same

period last year. The impact of this reduction in our

consumer energy top up frequency and volumes is

not yet clear in the current financial year.

Emerging Opportunities

• New business growth – build a more systematic

approach to growing our client base in target

sectors of Housing and Charities for our

MultiPay platform.

• Strengthening PayPoint and Love2shop

collaboration – develop closer alignment

between the corporate sales teams, driving

revenue opportunities across both client bases

and leveraging the Group’s comprehensive

payments solutions.

• Open Banking growth – further expansion of

our Open Banking services to new and existing

sectors, leveraging CCS/DPS frameworks

and working in partnership with OBConnect

and Aperidata, an innovative consumer

and business credit reporting and Open

Banking platform.

• Government services – expand range of

services provided for central and local

government, building on the DVLA International

Driving Permit service win and the existing DWP

Payment Exception Service.

PayPoint Plc Annual Report 2024

There is now a strong pipeline of new business

building into the current financial year and much

closer alignment with the business development

team in PayPoint, driving revenue opportunities

within both client bases. On highstreetvouchers.

com, a key acquisition channel for B2B sales,

we made important changes in Q4 FY24 to the

product mix and focus of the site, prioritising

corporate sales and digital products, which has

resulted in improved margin and profitability for

billings generated via this channel and where we

will continue to optimise activity into the current

financial year.

In addition, we are well-positioned to leverage

the technology platform and capabilities of MBL,

which was acquired by Love2shop in 2022, to

expand the range of products that we offer to our

corporate clients and grow gift card management

services with more retailers. This will build on

the £59.7 million of gift card value processed in

FY24 and a strong client base including Greggs,

Argos and Pizza Express. A number of major

brands were also added in the year to Love2shop

as redemption partners, including B&Q, Currys,

Adidas, WH Smith, Matalan & Blackwell’s and

a successful refresh of the Love2shop brand

was delivered.

Emerging Opportunities

• Love2shop channel and partnership expansion

- delivering further growth through new

partnerships, expanded provision of gift card

management services and acceleration of

Love2shop Business.

• Love2shop Gift Cards – grow sales within

multiple retailer network of circa 2,600 stores.

• Park Christmas Savings – expand into delivering

white label savings schemes for partners

and broaden prepaid savings occasions

beyond Christmas.

Love2shop Division

In Park Christmas Savings, it was particularly

pleasing to see a return to growth in the Christmas

2023 season, with conversion to paid for new

customers up 5%, retention rates for direct

customers the highest to date at 77%, and agency

size maintained at an average of 4.49 savers per

agent. In addition, a new closed-loop Mastercard

(Purple Card) was launched with 140+ brands,

exclusively for Park customers. The 2024 savings

season has started positively, with payment

rates +5% versus the prior year, cash collected

+1% versus the prior year and a reduction in

the number of ‘nil paid’ customers of 21%,

driven by a proactive plan to improve conversion

and encouraging savers to stay on track with

payments, leveraging PayPoint’s Pay By Link

service for when a payment has been missed. This

again reinforces the enduring appeal and vital role

this service plays in helping consumers budget

for big occasions and avoid debt, with a Trustpilot

rating of 4.6/5 and over £2 million of value

delivered to savers each year. In our first year, we

have established a Park Super Agent network

of circa 1,700 PayPoint retailer partners, with a

modest number of savers recruited and with plans

underway to improve on this early success in the

2025 season.

In Love2shop Business, we experienced a more

challenging H2, with billings down year on year

due to the broader caution from large businesses,

particularly with employee rewards.

We have now taken steps in the year to address

this, investing in additional APIs to unlock further

sales growth and establishing a restructured

corporate sales team to better manage our

existing relationships and drive new business, with

some early success already evident in Q4 FY24.

Update on claims against PayPoint

In FY24, a number of companies in the PayPoint

Group, including PayPoint Plc, received two claims

relating to issues addressed by commitments

accepted by Ofgem in November 2021 as a

resolution of Ofgem’s concerns raised in its

Statement of Objections received by the PayPoint

Group in September 2020. The Ofgem resolution

did not include any infringement findings.

The first claim was served by Utilita Energy

Limited and Utilita Services Limited (subsequently

renamed Luxion Sales Limited) (“Utilita”) on

16 June 2023. The second claim was served

by Global-365 plc and Global Prepaid Solution

Limited (“Global 365”) on 18 July 2023. PayPoint

can confirm that a first Case Management

Conference (CMC) was held on 31 October 2023

at the Competition Appeal Tribunal relating to

these claims. The focus of the first CMC was to

agree disclosure and a timetable for proceedings.

PayPoint can also confirm that a second CMC was

held on 26 April 2024 to agree further disclosure

and the appointment of expert witnesses for all

parties. A provisional date for a third CMC was set

for 28 October 2024. Both claims have been listed

for a joint trial at the Competition Appeal Tribunal

starting on 10 June 2025.

The Group’s position remains unchanged: it is

confident that it will successfully defend the

claim by Utilita, which does not provide any

clear evidence to support the cause of action

or the amount claimed, and also that it will

successfully defend the claim by Global 365,

which fundamentally misunderstands the energy

market and the relationships between the relevant

Group companies and the major energy providers,

whilst also over-estimating the opportunity

available, if any, for the products offered by

Global 365. Consequently, no accounting provision

has been made for these claims.

The Group will continue to update the market

on a quarterly basis as part of its financial

reporting cycle.

Outlook And Dividend

The streamlining of our organisational structure

and delivery of our FY24 financial performance are

important building blocks to achieving our financial

targets, including the delivery of £100 million

EBITDA by the end of FY26.

In the current year, consumer behaviour across

a number of our businesses remains subdued,

reflecting continued tighter family budgets and

a generally flat economy. Our expectation is that

this consumer outlook will improve during the

course of the year.

Against this background, our confidence in the

prospects for the business is underpinned by

the actions we are taking in each of our divisions

to accelerate performance and identify new

opportunities. In addition, our commitment

today to a three-year share buyback programme,

commencing with at least £20 million over the

next twelve months, will enhance shareholder

returns and is reflective of our long-term

confidence in the business and our underlying

cash flow. The Board has proposed an ordinary

final dividend of 19.2p per share, an increase of

3.2% vs the prior year final dividend of 18.6p per

share, consistent with our dividend policy and

target cover range of 1.5 to 2.0 times earnings

excluding exceptional items.

We remain confident in delivering further progress

in the current year and achieving our medium-term

financial goals.

Nick Wiles

Chief Executive

12 June 2024

Strategic report

Governance Financial statements Shareholder information

PayPoint Plc Annual Report 2024

Key market

Market overview

Key market insights across

our four business divisions.

PayPoint Plc Annual Report 2024

UK Open Banking payments

130m

Total UK convenience stores

49,388

Total UK parcel volumes

3.8bn

Total UK Gift Card sales

£3.4bn

Shopping

• The UK convenience sector generated over £47.1billion in sales over

the last year, and is forecast to grow to over £50.9 billion by 2026.

There are 49,388 convenience stores in the UK, a marginal increase

year on year of 438 stores

• In 2022, there were over 23 billion debit card payments made in the

UK, up from 19.5 billion the previous year. It is forecast that this will

grow to 27 billion payments by 2027

Payments & Banking

• Open Banking payments in the UK grew 90% year on year to

130m payments in 2023

. PayPoint is now one of the leading

PISP processors in the UK.

• The energy price cap, updated by Ofgem on a quarterly basis, was

set at £1,928 for pre-pay customers for January to March 2024,

decreasing from £4,358 in the same period last year

E-commerce

• Latest available data from Ofcom showed total UK parcel volumes

decreased by 4.8% in 2022-23

to 3.8bn. By contrast, Collect+

delivered a record year in FY24, growing parcel transactions by 77.5%.

• According to the ONS, internet sales as a percentage of total

retail sales remained flat year on year in 2023 at 26.6%

Love2shop

• The enduring appeal of Park Christmas Savings in helping consumers

avoid high-cost debt was reinforced with research showing over 56% of

consumers having got into debt over Christmas 2023, a rise in households

borrowing from unlicensed lenders and a 17% rise in the use of Buy Now Pay

Later products over the past year

• Over £3.4bn

worth of gift cards were sold in the UK in 2023, with 59% for

B2B and 41% for B2C. Gift cards continue to encourage additional spend with

retailers, with 43.3% of gift card users spending more than the gift card value.

insights

1 ACS Local Shop Report 2023.

2 UK Finance – UK Payments Market Summary 2023.

3 Ofcom Post Monitoring Report 2022-23.

4 https://www.ons.gov.uk/businessindustryandtrade/retailindustry/timeseries/j4mc/drsi.

5 OpenBanking.org Impact Report March 2024.

6 https://www.ofgem.gov.uk/energy-price-cap.

7 Money Expert: Cost of Christmas 2023 – https://www.moneyexpert.com/news/the-

cost-of-christmas-2023/; FCA – Deferred Payment Credit Research Oct 2023; abrdn

Financial Fairness Trust Research – Dec 2023.

8 KPMG GCVA Market Reports - H1 and H2 2023.

Read more on page 28

Innovating

How we deliver innovative services

PayPoint Plc Annual Report 2024

What makes our model work Delivered to our stakeholders

Transactions

per year

735.4m

Retailer and

SME locations

65,933

No. of employees

968

Final dividend

declared

19.2p

Population within

one mile

99.3%

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.

Retailers and SMEs

We deliver vital community services that enhance the retailer

proposition and consumer experience, driving footfall, and

new commission opportunities for thousands of SMEs and

retailers across the UK.

Employees

We create a dynamic and innovative place to work

for our employees across the PayPoint Group.

Investors

We aim to deliver a sustainable and rewarding business

model and superior returns for our investors.

Local communities

We provide vital services to hundreds of communities across

the UK, at over 28,000 locations, with 99.3% of the population

living within one mile of a PayPoint location in urban areas.

Our

drivers

of success

The

value

we create

Unparalleled network of retailer partners and SMEs

• The enlarged PayPoint Group now delivers technology and services to a universe of over

65,000 SME and retailer partner locations across multiple sectors, including food services,

convenience retail, garages and hospitality.

Leading multichannel payments platform

• Our comprehensive payments platform gives our clients and their customers choice in how to

make and receive payments quickly and conveniently. This includes our channel-agnostic digital

payments platform, MultiPay, offering solutions to clients across Open Banking, direct debit,

card payments and cash, and our Love2shop voucher, rewards and prepaid savings solutions.

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, Vinted, FedEx, DPD, DHL,

HubBox, Royal Mail, Wish.com and Parcels2Go.

• 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 Monzo.

• Our Love2shop division provides gifting and rewards solutions for thousands of consumers and

employees, working with the biggest retailers and brands, such as M&S, Primark, Aldi and John Lewis.

Cutting-edge technology

• We pride ourselves on delivering innovative technology and services across the Group, whether

through PayPoint Mini, helping our convenience retailer partners run their businesses more

efficiently; our leading employee engagement and reward solutions for large corporate clients;

or our proprietary parcel software 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.

Strategic report

Governance Financial statements Shareholder information

PayPoint Plc Annual Report 2024

Our strategy

Shopping

Delivering

How we deliver

We provide digital solutions, technology and payment services

for SMEs and retailers to deliver vital community services.

Retail Services

• PayPoint One, EPoS, Counter Cash, FMCG, ATMs, Business Finance, Home Delivery.

Card payments

• PayPoint, Handepay/Merchant Rentals & RSM 2000.

Highlights

• Service fee net revenue increased by 10.1% to £19.7million, reflecting growth in the

number of revenue-generating PayPoint One/Mini sites to 19,297 (31 March 2023:

18,453 sites).

• Card payment net revenue increased by 2.8% to £32.7 million, with further site

growth in the EVO estate to 19,682 (31 March 2023: 18,397) and in the Lloyds

Cardnet estate to 10,064 (31 March 2023: 9,541).

• UK retail network increased to 29,149 sites (31 March 2023: 28,478), with 70.0% in

independent retailer partners and 30.0% in multiple retail groups.

Emerging Opportunities

• FMCG – further growth from our consumer engagement platform, PayPoint Engage.

• Foreign Currency – development of our partnership with eurochange in circa

500 stores.

• Park Christmas Savings – optimisation of our network of Super Agents for

recruiting savers.

PayPoint Plc Annual Report 2024

vital services

Estate Growth

31 March 2023 31 March 2024

Card Payments

FY23

Net revenue

£31.8m

FY24

Net revenue

£32.7m

+2.8%

Retail Services

FY23

Net revenue

£30.2m

FY24

Net revenue

£31.7m

+5.2%

Sub-divisional performance

PayPoint One/Mini

18,453

ATM

3,470

Lloyds Cardnet

9,541

Counter Cash

1,930

Evo

18,397

19,297

3,485

10,064

2,150

19,682

FY23

Net revenue

£62.0m

FY24

Net revenue

£64.4m

+3.9%

Divisional Performance

Risks (see pages 60 to 66)

Consumer behaviours and

Markets

Client services

Operational Delivery

PayPoint Plc Annual Report 2024

Strategic report

Governance Financial statements Shareholder information

Our strategy continued

Shopping continued

Our portfolio of services continues

to grow, and is now delivering real

commission earning opportunities

to our retailer partners, with overall

commission paid up 21.5% year on year.”

Anthony Sappor

Retail Proposition and Partnerships Director

Q&A

with Anthony Sappor, Retail Proposition

and Partnerships Director

PayPoint Plc Annual Report 2024

How has PayPoint’s technology evolved

over the last 12 months?

We launched our new device, PayPoint Mini, in

November 2023, delivering faster transaction

times and a smaller, mobile device. Feedback has

been very positive from our retailer partners and

we are now rolling out our integrated solution,

PayPoint Connect, partnering with third party

EPoS suppliers to widen availability of our services

and open up further integrated card payments

opportunities within our extensive network.

What have been the big developments in

your retailer proposition this year?

Our consumer engagement platform for FMCG

brands, PayPoint Engage, has driven campaigns,

sales and consumer footfall into more of our

stores over the year, with a healthy pipeline of

activity continuing into the current financial year.

In addition, we will be expanding this service by

introducing a terminal-based app that will enable

retailers to engage with these brands digitally,

earning rewards for stocking certain products and

providing insights. In addition, we have trialled

a foreign currency service, in partnership with

eurochange, and will continue to optimise this

over the coming months. Our portfolio of services

continues to grow, and is now delivering real

commission earning opportunities to our retailer

partners, with overall commission paid up 21.5%

year on year.

What is the focus for the year ahead?

A big focus is on how we drive further retailer

adoption and engagement with all of these vital

community services that we have developed.

We know that the majority of our retailers have

started to see the benefits of these services in

their earnings, but there are a lot of our retailer

partners who could be making more from the

services we deliver. All of our efforts are focused

on how we help them unlock these opportunities,

with advice and training to identify the right

services for their store, customers and location.

Delivering

vital community

services through

our extensive

network

Commission paid to retailer partners

+21.5% YoY

PayPoint Plc Annual Report 2024

Strategic report

Governance Financial statements Shareholder information

Our strategy continued

E-commerce

How we deliver

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 software capability and expertise with

continuous investment and innovation in the in-store experience.

• Consumer pick up, drop off and send.

• 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.

Highlights

• Record year for Collect+ as parcel transactions grew strongly by 77.5% to 100.1 million

(FY23: 56.4 million), including regularly achieving over 2 million parcels processed per week.

• Collect+ network increased to 11,786 (31 March 2023: 10,514), with further expansion to support

volume growth.

• Print in Store service now available in over 80% of network across circa 9,100 sites, enabled by the

further rollout of Zebra label printers.

Emerging Opportunities

• Expanded carrier relationships – broadening range of services offered to each of our carrier partners,

leveraging our superior in-store technology and network to drive further volume growth.

• Network expansion – expanding from extensive convenience retail network into new sectors and locations,

including student unions, transport hubs and hospitals.

• Print In Store – further rollout of circa 2,000 additional Zebra label printers to widen access to service and

support new partnerships, including Royal Mail.

Enabling

PayPoint Plc Annual Report 2024

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’.

Estate Growth

Risks (see pages 60 to 66)

Consumer behaviours and

Markets

Emerging Technology

IT Transformation

Operational Delivery

31 March 2023

31 March 2024

Collect+ sites

10,514

Our partners

FY23

Net revenue

£7.3m

FY23

Parcel transactions

56.4m

FY24

Net revenue

£11.8m

Collect+ sites

11,786

FY24

Parcel transactions

100.1m

+61.6%

+77.5%

great journeys

PayPoint Plc Annual Report 2024

Strategic report

Governance Financial statements Shareholder information

Our strategy continued

E-commerce continued

There will be further expansion

beyond our traditional convenience

retail stores into new sectors and

locations, including student unions,

transport hubs and hospitals.”

Nick Williams

Parcel Services Director

Q&A

with Nick Williams, Parcel Services Director

PayPoint Plc Annual Report 2024

Enabling

best-in-class

e-commerce

journeys

Parcel transactions

100.1m

What have been the key factors in

the success of parcels over the past

12 months?

Our positive performance has been driven by the

same three important areas as the previous year:

the investment we have made over the past few

years in ‘print-in-store’ technology which has

unlocked significant additional volume, particularly

from Vinted; building on the strong relationships

we have with our carrier partners; and, of course,

our fantastic retailer partners who continue to do

such a great job of providing an exemplary service

to consumers across the UK every day.

Why do you think the Collect+

proposition is so attractive for your

retailer partners?

With more and more people returning to office

life post-pandemic, the importance of having a

convenient place to pick up and drop off parcels is

becoming increasingly significant again – bringing

those customers into our retailers' stores and

giving them the opportunity to experience the

friendliness and efficiency of the convenience

store format, as well as the retailer earning a

healthy commission from the service, is vital.

What’s your focus for the next

12 months?

We will continue to work closely with our carrier

partners to expand the range of services that we

offer, as well as growing the number of locations

to support the additional volume of parcel

transactions flowing through our network. There

will be further expansion beyond our traditional

convenience retail stores into new sectors and

locations, including student unions, transport hubs

and hospitals.

PayPoint Plc Annual Report 2024

Strategic report

Governance Financial statements Shareholder information

Our strategy continued

Payments & Banking

How we deliver

Digital – Open Banking and MultiPay digital payments platform.

Cash through to digital – Gifting, gaming and Neobanks.

Cash - Bill payments and top ups.

Highlights

• Continued growth through our MultiPay platform, with underlying net revenue increasing by 29.3% to £5.3 million

(FY23: £4.1 million). Total digital net revenue decreased by 12.7% to £13.8 million (FY23: £15.8 million), with the prior year

including the one-off benefit of £3.5 million from the Energy Bills Support Scheme.

• Cash through to digital net revenue now stabilised to £6.8 million in the year (FY23: £6.9 million), with a new baseline set for

the category and continued growth in banking with over £430 million of deposits processed for neobanks.

• Cash payments net revenue decreased by 2.5% to £32.8 million (FY23: £33.6 million). Legacy energy sector net revenue

decreased by 10.6% for the year as a whole, the rate of decline moderating in H2 FY24 to -2.6% versus the sharp fall of

-19.2% in H1 FY24.

Emerging Opportunities

• New business growth – build a more systematic approach to growing our client base in target sectors of Housing and

Charities for our MultiPay platform.

• Strengthening PayPoint and Love2shop collaboration – develop closer alignment between the corporate sales teams, driving

revenue opportunities across both client bases and leveraging the Group’s comprehensive payments solutions.

• Open Banking growth – further expansion of our Open Banking services to new and existing sectors, leveraging CCS/DPS

frameworks and working in partnership with OBConnect and Aperidata.

• Government services – expand range of services provided for central and local government, building on the DVLA

International Driving Permit service win and the existing DWP Payment Exception Service.

Innovating

PayPoint Plc Annual Report 2024

solutions

Divisional Performance

FY23 FY24

Digital

FY23

Net revenue

£15.8m

Net revenue

£56.2m

Digital (Exc. EBSS)

FY23

Net revenue

£12.3m

Cash through to digital

FY23

Net revenue

£6.9m

Cash

FY23

Net revenue

£33.6m

FY24

Net revenue

£13.8m

Net revenue

£53.5m

FY24

Net revenue

£13.5m

FY24

Net revenue

£6.8m

FY24

Net revenue

£32.8m

-12.7%

-4.8%

+9.8%

Flat -2.5%

Subdivision Performance

Risks (see pages 60 to 66)

Consumer behaviours and

Markets

Emerging Technology

IT Transformation

Operational Delivery

We deliver a channel-agnostic

payment platform that gives

clients and consumers choice.

PayPoint Plc Annual Report 2024

Strategic report

Governance Financial statements Shareholder information

Our strategy continued

Payments & Banking continued

Q&A

with Jo Toolan, Managing Director, Payments

Open Banking continues to grow,

with over 25 clients secured

for our Confirmation of Payee

service and great work launched

in the year with Citizens Advice

leveraging our FIS tool.”

Jo Toolan

Managing Director, Payments

PayPoint Plc Annual Report 2024

What progress has been made with

PayPoint’s integrated payments

platform over the past 12 months?

Our enhanced capabilities, across Open Banking,

cards, cash and Direct Debit, have given us a

strong platform to secure a record level of new

business this year, with further clients secured in

the Housing sector, our first major Charity client

in East Anglian Air Ambulance and continued

progress in energy, local and central government.

We were also delighted to have secured the DVLA

contract for International Driving Permits, which

launched on 1 April 2024.

What do you think has driven the

success here?

Our partnership philosophy with our clients is

key here - taking the time to understand their

needs, challenges and how we can help address

them with our extensive solutions and enhanced

platform. Like many parts of the Group, this

approach is opening up new opportunities for us,

as well as working more closely on developing

Group-wide cross-sell opportunities with the

Love2shop business.

Innovating

in digital

payments

solutions

What’s the one big future opportunity

that you’re working on?

Open Banking continues to grow, with over 25

clients secured for our Confirmation of Payee

service and great work launched in the year with

Citizens Advice leveraging our FIS tool. Key to

this has been working closely with our partners,

OB Connect and Aperidata, to mobilise solutions

quickly for our expanding client base so that we

can accelerate growth in this important area.

Digital transactions

46.9m

PayPoint Plc Annual Report 2024

Strategic report

Governance Financial statements Shareholder information

Love2shop

How we deliver

We provide gifting, employee engagement, consumer incentive and prepaid

savings solutions to thousands of consumers and businesses.

Love2shop

The UK’s leading digital platform for

employee and customer rewards.

Highlights

• Park Christmas Savings returned to growth, delivering £162.6 million of billings for the Christmas 2023 season,

an increase of 1.2% versus the prior year (Christmas 2022: £160.7 million¹). The Christmas 2024 season has

started positively, with payment rates +5% versus the prior year and a reduction in the number of ‘nil paid’

customers of 21%, driven by a proactive plan to improve conversion and completion of savings targets.

• Love2shop Business experienced a weaker billings performance than expected in H2, with £162.8 million

delivered in FY24 (FY23: £170.3 million¹). This was seen particularly in employee rewards, reflecting the

broader caution from large businesses and the overall challenging economic situation. New corporate APIs

were launched in November 2023, with the first clients onboarded shortly after, and a restructured corporate

sales team now in place.

• MBL, the leading gift card technology platform acquired by Love2shop in June 2022, processed £59.7 million of

gift card value in the year (FY23: £43.6 million¹) for its extensive client base, including Greggs, B&M and Argos.

Emerging Opportunities

• Love2shop channel and partnership expansion - delivering further growth through new partnerships,

expanded provision of gift card management services and acceleration of Love2shop Business.

• Love2shop Gift Cards – grow sales within multiple retailer network of circa 2,600 stores.

• Park Christmas Savings – expand into delivering white label savings schemes for partners and

broaden prepaid savings occasions beyond Christmas.

Our strategy continued

Accelerating

Park Christmas Savings

The UK’s biggest Christmas

Savings Club.

PayPoint Plc Annual Report 2024

Divisional performance

FY23

Net revenue

£3.4m

Love2shop

FY23

Billings

£170.3m

Park Christmas Savings

FY23

Billings

£160.7m

FY24

Net revenue

£51.3m

FY24

Billings

£162.8m

FY24

Billings

£162.6m

-4.4% +1.2%

Subdivision Performance

growth

1 FY23 comparatives contained only one

month contribution from Love2shop

business post-acquisition.

PayPoint Plc Annual Report 2024

Strategic report

Governance Financial statements Shareholder information

Strategic report

Governance Financial statements Shareholder information

Q&A

with Julian Coghlan, Managing Director,

Love2shop and Park Christmas Savings

Our strategy continued

Love2shop continued

We have benefitted hugely from being

part of the wider Group, with several

positive changes delivered to increase

momentum and pace across the

business to deliver future growth.”

Julian Coghlan

Managing Director, Love2shop and Park Christmas Savings

PayPoint Plc Annual Report 2024

Strategic report

Governance Financial statements Shareholder information

How do you think Love2shop has

evolved over the past 12 months?

Since we joined the Group in February 2023,

there has been positive progress across the

business, with Park Christmas Savings returning

to growth for the first time in six years, a reshaped

Love2shop Business team now in place to deliver

further corporate sales growth, and Love2shop

physical gift cards launched for the first time into

the PayPoint network last year.

What do you think has driven

the success here?

We have benefitted hugely from being part of

the wider Group, with several positive changes

delivered to increase momentum and pace across

the business to deliver future growth. Similarly,

as we have transitioned to a Group operating

model, we now have access to a wider pool of

expertise and resource to develop our offer, grow

our business pipeline and increase the resiliency of

our platform, leveraging the broader capabilities of

the Group.

What future opportunities

are you working on?

Building on the work delivered in the past year, we

are well underway with plans to open up further

new distribution channels for Love2shop, whether

developing further partnerships to broaden our

reach, creating white label versions of our key

products and services to support our partners,

or leveraging the MBL technology platform

to expand the range of gift card management

services we provide to retailers.

Accelerating

growth in

rewards

and gifting

Park Christmas Savings Trustpilot score

4.6/5

PayPoint Plc Annual Report 2024

Strategic report

Governance Financial statements Shareholder information

Strategic report

Governance Financial statements Shareholder information

FY23 128.9 FY23 61.3

FY23 50.8 FY23 72.4

FY22 115.1 FY22 58.2

FY22 48.0 FY22 43.9

FY24 181.0 FY24 81.3

FY24 61.7 FY24 67.5

Key performance indicators

The PayPoint Group

has identified the

following KPIs to

measure progress of

business performance:

NB. FY23 comparatives

contained only one-month

contribution from Love2shop

post acquisition.

Net revenue

(£ million)

£181.0m

+40.4%

Underlying EBITDA

(£ million)

£81.3m

+32.6%

Underlying profit before tax

(profit before tax excluding adjusting items) (£ million)

£61.7m

+21.5%

Net corporate debt

(£ million)

£67.5m

(6.8)%

Description, purpose and reference: Revenue from continuing

operations less commissions paid to retailers and Park Christmas

savings agents and costs where the Group is principal for SIM

cards and single retailer vouchers. This reflects the benefit

attributable to the Group’s performance eliminating pass-through

costs and is an important measure of the overall success of

our strategy.

Description, purpose and reference: This measures our

earnings before interest, tax, depreciation and amortisation, net

movements in convertible loan notes, and exceptional items. This

is an important measure as it is widely used by investors, analysts

and other interested parties to evaluate profitability of companies.

Description, purpose and reference: Underlying profit before tax

(profit before tax excluding adjusting items), provides a measure

of the operational performance of the Group. This reflects the

rebalancing of the business towards growth opportunities, the

shift away from our legacy cash payments business and is an

important measure of the overall success of our strategy.

Description, purpose and reference: Net corporate debt

represents cash and cash equivalents excluding cash recognised

as clients’ funds, retailer partners’ deposits, and card and voucher

deposits, less amounts borrowed under financing facilities

(excluding IFRS 16 liabilities). This shows how the Group is utilising

its finance facilities to invest in growth, and will be an important

measure of how the Group intends to maintain a target leverage

ratio of around 1.0 times net debt/EBITDA.

See Financial Review – page 69

See Financial review – ‘Group statement of financial position’ on page 74

See Financial Review – page 70

See Financial Review – page 69

Overall performance

Shareholder returns

Non-financial

PayPoint Plc Annual Report 2024

FY23 71 FY23 10.0

FY23 60.3

FY22 72 FY22 14.3

FY22 55.4

FY24 73 FY24 9.4

FY24 62.6

Employee engagement

(%)

73%

+2pp

ESG

(Tonnes CO

9.4

(7.0)%

Diluted underlying earnings per share

(pence)

62.6p

+3.8%

Description, purpose and reference: Measures the overall

employee engagement, 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.

Description, purpose and reference: Measures the green

house gas (GHG) emission for scope 1, 2 and 3 per employee.

This is recorded in accordance with the Companies Act 2006

(Strategic Report and Directors Report Regulations 2013).

Description, purpose and reference: Diluted underlying earnings

per share (earnings from continuing operations excluding adjusting

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 11 to the financial information on page 154

See page 39 in the Strategic Report

PayPoint Plc Annual Report 2024

Strategic report

Governance Financial statements Shareholder information

We hold ourselves accountable

for delivering positive outcomes

for all of our stakeholders

through the implementation

of a meaningful ESG strategy

and measures.

efficiently &

Responsible business

How we operate

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.

PayPoint Plc Annual Report 2024

During the year we made good progress towards

delivering the commitments outlined in last year’s

report including the delivery of a year on year

reduction in emissions per fleet car of over 50%

and a year on year reduction in average emissions

per retailer network terminal of 1% following the

launch of PayPoint Mini. PayPoint Mini uses 85%

less electricity than its predecessor PayPoint One,

and will enable greater reductions in emissions

generated by the use of sold products as it

rolls out across our estate. Further information

regarding our progress along with targets for the

current financial year can be found on pages 36

and 37.

The ESG Working Group continues to meet

regularly to review progress, consider 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.

responsibly

Anti-bribery & corruption

Waste

management

Our people

Transparency

Diversity & inclusion

Partners

Society

Risk management

Regulation

Natural

resources

Climate change

Innovation

ESG

Environment

SocialGovernance

PayPoint Plc Annual Report 2024

Strategic report

Governance Financial statements Shareholder information

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 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 offsetting residual

GHG emissions that cannot be eliminated.

Responsible business continued

1. 3.2.

Achieve net-zero in our own operations

(scope 1 and 2 emissions) by 2030. For

us, this means reducing CO

emissions

as much as possible, and then ensuring

that any ongoing emissions are

balanced by removals.

Support a reduction in employee

commuting emissions by encouraging

the transition to electric vehicles.

Achieve a 30% reduction in emissions

generated by use of sold products

by 2030, compared to 2022.

• Moving to carbon-neutral gas and electricity

contracts at contract renewal.

• Retiring diesel company cars, and ordering

electric vehicles only by the end of 2025, subject

to the required charging infrastructure being

in place.

• Assessing options to reduce company

car mileage.

Delivered in year

• Carbon neutral gas and renewable electricity

procured for Haydock.

• Emissions per fleet car reduced from 119.7g/

km in March 2023 to 58.5g/km in March 2024.

• Continued use of Salesforce Maps and

territory optimisation dashboard to plan

routes efficiently.

24/25 priorities & targets

• Continue to switch to green energy contracts

at contract renewal.

• Continue to identify and implement actions to

reduce electricity usage in company premises.

• Complete groupwide ISO14001 submission by

March 2025.

• Charging points to be installed at office

locations where feasible.

• Electric car leasing scheme to be considered

for introduction.

• Relaunching our cycle-to-work scheme

with an enhanced purchase limit.

• Continue hybrid working policy delivered in 2021.

Delivered in year

• Electric/hybrid car leasing scheme rolled out

to all entities during the year.

• Cycle to work scheme now available across

the Group following roll out to Love2shop in

November 2023.

• Environmental considerations built into

travel policy.

24/25 priorities & targets

• Continue to promote the use of green modes

of transport.

• Incentivise lift sharing for business travel.

• Replacing PayPoint One devices with

alternatives that are more energy efficient.

• Considering energy consumption in

product design.

• Encouraging retailer partners to use renewable

energy and minimise consumption.

Delivered in year

• PayPoint Mini roll out commenced in November

2023. PayPoint Mini emissions are 85% lower

than the PayPoint One.

• 970 PayPoint Mini terminals rolled out to the

estate by March 2024, comprising 1% of the

total terminal estate.

24/25 priorities & targets

• Deliver a further year on year reduction

in average emissions per new retailer

network terminal.

We commit to:

PayPoint Plc Annual Report 2024

5.4. 6.

Achieve net-zero across our

entire value chain by 2040.

Engage and educate our people on

ESG matters to drive engagement

and build ESG considerations into

our every day.

Continue to develop an

inclusive culture.

• 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.

Delivered in year

• Growth in digital product sales in Love2shop

from 11.69% of total sales in FY23 to 12.06%

in FY24.

• Overall CO

equivalent emissions increased

from 7,129 tonnes in FY23 to 9,046 tonnes

in FY24, driven by the inclusion of a full year

of Love2shop and the purchase and use of

terminals as we continue to grow our estate.

• Overall emissions per employee fell by 7%.

24/25 priorities & targets

• Assessment of data centre usage to identify

opportunities to reduce emissions.

• Continue to demonstrate progress in transition

from board to digital cards in Love2shop.

• Regular programme of communication

and training to be implemented.

Delivered in year

• Diversity and inclusion training completed

annually.

• ESG training module developed to be rolled

out in FY 2025.

• Volunteering policy developed to be launched

in Q1 FY25.

24/25 priorities & targets

• Online training module to be completed by

all employees.

• Launch volunteering policy, offering every

employee a volunteering opportunity during

the year.

• Embedding of ‘Welcoming Everyone’ approach

to inclusion (see pages 47 and 48).

Delivered in year

• Women in Tech Forum launched across the

Group with participants from a variety of

departments including IT, Client and Legal.

Membership gives access to monthly events

and masterclasses as well as a leadership

podcast series.

• Pride month celebrated with lunch and

learn, quiz night and employees sharing their

personal stories.

• Positive results received on diversity questions

in Great Place to Work engagement survey.

24/25 priorities & targets

• Continue Women in Tech Forum and support

for Pride, International Women’s Day and other

relevant events.

PayPoint Plc Annual Report 2024

Strategic report

Governance Financial statements Shareholder information

Responsible business continued

Environment

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.

PayPoint Plc Annual Report 2024

In line with our climate strategy, tonnes CO

per employee in our own operations (scope 1

and 2) reduced during the year by a further 67%

from 0.24 to 0.08 tonnes CO

e per employee,

demonstrating significant progress towards our

target of achieving net-zero in our own operations

by 2030.

All gas and electricity used in the Welwyn Garden

City and Haydock offices is now carbon-neutral/

renewable. We introduced new hybrid company

cars to our car fleet in April 2023, replacing diesel

cars and petrol hire cars and have installed electric

charging points at our offices in Welwyn Garden

City. During the year we also rolled out an electric/

hybrid car leasing scheme to all employees and

continue to promote sustainable travel options

including cycle to work, car sharing and the use

of public transport where viable. Our Salesforce

platform optimises the journeys of our field team

and we continue to seek options to reduce their

emissions even further.

Our latest phase 3 Energy Saving Opportunity

Scheme assessment was completed in May 2024

(the last assessment was completed in November

2019) and we are using this to identify and

implement actions to further reduce energy usage.

Energy consumed for the year ended March 2024

under scope 1 was 319k kWh and under scope 2

was 1,132k kWh.

Scope 3 emissions increased during the year as

a result of the inclusion of a full year of data for

Love2shop and the purchase and use of additional

products as we continue to grow our terminal

estate. However, we can demonstrate progress

in year with a 1% reduction in average energy

usage per retailer network terminal following

the introduction of PayPoint Mini and we expect

to see a more significant reduction in future

years as the roll out continues. Total emissions

per employee decreased from 10.00 tonnes to

9.35 tonnes CO

We remain confident that we are making the

progress necessary to achieve our overall

objectives of achieving net-zero in our own

operations by 2030 and net-zero across our entire

value chain by 2040.

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.

Waste management

We recycle wherever possible, including paper,

cans, plastic, cardboard, computer equipment and

PayPoint terminals.

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.

Innovation

Our innovative digital solutions support a

reduction in our environmental impact. Recent

examples include:

• Continued growth in our pioneering Counter

Cash Service, a ‘cashback without purchase’

solution that enables cash withdrawals without

the need for ATMs. This service is now enabled

in 5,680 sites.

• Further expansion of our parcels service which

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 offices. They

promote sustainable practice throughout the

office including recycling.

Climate change

The PayPoint Group is a low impact, low carbon

intensive business. We remain committed

to improving our environmental impact as

demonstrated by the commitments and actions

outlined on pages 36 and 37.

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 effect on 1 April 2019 and we follow the

guidelines to comply with these 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.

GHG emissions Units

Year ended

31 March

2024

Year ended

31 March

2023

Year ended

31 March

2022

Year ended

31 March

2021

Scope 1 (fuel combustion) tonnes CO

e 67 101 151 60

Scope 2 (purchased electricity) tonnes CO

e 13 71 293 320

Total scope 1 & 2 tonnes CO

e 80 172 444 380

No. of employees for 31 March 2024 968 714 670 519

Total scope 1 & 2 per employee tonnes CO

e 0.08 0.24 0.66 0.73

Scope 3

tonnes CO

e 8,966 6,957 9,104 4,740

Total scope 1,2 & 3 per employee tonnes CO

e 9.35 10.00 14.25 9.87

1 Scope 3 emissions includes purchased goods and services, waste generated in operations, business travel, employee commuting

and use of sold products.

PayPoint Plc Annual Report 2024

Strategic report

Governance Financial statements Shareholder information

Responsible business continued

TCFD

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 2024.

PayPoint Plc Annual Report 2024

We consider our climate-related financial disclosures to be consistent with the TCFD Recommendations

and Recommended Disclosures and are therefore consistent with the requirements of Listing Rule 9.8.6(8).

In preparing our disclosures, 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 TCFD Recommendations and Recommended Disclosures. Following the acquisition of

Love2shop, year-on-year comparatives for GHG emissions are not directly comparable as there was only

one month of contribution in the last financial year.

Our disclosures have all been made within the ‘Responsible Business’ section of this Annual report, and

locations are detailed in the table below. We have considered all relevant material in the TCFD guidance,

including Section C of the Annex (Guidance for all Sectors).

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:

Governance

Describe the Board’s oversight of climate-related risks and opportunities

The Board sets the Group’s overall strategy and risk appetite incorporating our approach to sustainability,

the environment and carbon emissions. The Executive Board recommends and defines actions required

to achieve the strategic objectives as set by the Board. This ensures ESG considerations are embedded

into our day-to-day strategic decision-making. The ESG Working Group, which includes representatives

from the Executive Board, oversees PayPoint’s management of environment, climate and TCFD related

matters. The Group also provides formal updates of progress of agreed initiatives, priority actions and

targets to the Board at least twice a year, thus enabling the Board to provide appropriate oversight and

strategic guidance in embedding the agreed corporate approach into our operational activities. The

corporate governance framework on page 85 provides 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, environmental and

carbon-emission strategy. The ESG Working Group, which includes representatives from both functional

business areas as well as senior management and Executive Board members, meets regularly throughout

the year to review and discuss priorities and actions as agreed and set by the Executive Board. The ESG

working group will also discuss and debate potential new initiatives as developed and defined by ESG

members The Group’s members are informed about climate related issues through reviews of emerging

regulations and trends. See the corporate governance framework on page 85 for more details.

Strategy

Describe the climate-related risks and opportunities the organisation has

identified over the short, medium, and long-term

We have reviewed our business activities and our identified climate related risks and opportunities

to support the development of a short-term to long-term plan for the Group. We have defined the

short-term to be 0–5 years, the medium-term 5–15 years and the long-term 15–30 years. The risks

identified all arise from our business operations within the United Kingdom.

A minority of the bonus award made to Executive Board members, including Executive Directors, may

be based on strategic/personal/ESG targets. An ESG target was introduced for the financial year

ended March 2024 to reward progress made in the delivery of ESG commitments including climate

related commitments.

When risks and opportunities are identified, we assess 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

44 to 45.

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, and 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 66 of the risk

management section. Climate and carbon emissions form part of our financial and strategic planning

and decision-making process as follows:

• We continue to review our own energy usage and during the year procured carbon neutral gas and

renewable energy electricity for our Haydock premises, having already procured it for our head

office in Welwyn Garden City. We have also installed submetering in our offices in Welwyn Garden

City to support reduced energy usage.

• We consider climate impact from our working practices and as a result have increased the number

of hybrid vehicles within our fleet, installed car charging points where possible and reviewed our

hybrid office and field sales working arrangements.

• During the year we have launched a number of climate friendly work schemes, such as the cycle to

work scheme and the electric/hybrid card leasing scheme. We have also incorporated a number of

initiatives into our business travel policy to encourage a climate friendly approach to business travel.

• We launched the PayPoint Mini terminal in October, which will result in a reduced carbon emission

footprint by our retailer network.

• We recognise that income from our energy payments businesses fluctuate with the weather and

have, over the last few years, diversified our business to reduce reliance on this sector.

PayPoint Plc Annual Report 2024

Strategic report

Governance Financial statements Shareholder information

Strategy continued

Describe the resilience of the organisation’s strategy, taking into consideration

different 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

two climate-related scenarios in the financial year.

A rise of up to 2°C, which would create some risks and uncertainties for our business, for example we

have a number of clients in the energy sector who may be impacted with potential knock-on impacts

for PayPoint. However, we consider the risk is low as there would be sufficient time to evolve our

business model and activities to mitigate the risks.

The “BAU” scenario as described in the Representative Concentration Pathway 8.5 which would see

global mean temperature rise by 2.6 to 4.8°C and the global mean sea level to rise by 0.45 to 0.82

metres by the late-21st century was considered. This scenario is now thought to be unlikely but

has been modelled as an extreme eventuality. It could impact about 550 (out of over 29,000) of our

retailers in low-lying coastal areas. This would have a small impact on our revenue from terminals. As

with the first scenario, some of our clients may be impacted, with knock on impacts for the volume

and value of our energy transactions. However, the likelihood is considered low, and we actively

monitor changes in this area and include mitigating strategies in our business. Key inputs used to

model this scenario were an analysis of the geographical location of our retailer partners, overlaid with

a map of areas likely to flood in the event of the aforementioned rise in global temperatures.

Responsible business continued

Risk management

Describe the organisation’s processes for identifying and assessing

climate-related risks

In accordance with our current assessment, 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 as part of our governance framework, we identify, assess and seek to mitigate business risks,

including climate risks. 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. Key inputs into this process are data on our Scope1–3 emissions, and analyses

of new services and products, consumer trends and market changes. These are reviewed by the ESG

Working Group.

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 effectiveness of risk management

throughout the organisation. The Board are updated on climate risks and set targets to reduce carbon

emissions in alignment with stated strategic goals. We have modelled the potential impact on our

revenue if climate related risks were to crystallise. As described above, we monitor it closely so that

we can amend our strategy as necessary. Climate change could also impact our costs, especially our

energy usage and the potential cost of offsetting in order to meet targets. We have implemented

several measures to reduce our CO

emissions as much as possible. The ESG working group continues to

monitor this closely and will seek to implement further measures as necessary.

Describe how processes for identifying, assessing, and managing climate-

related risks are integrated into the organisation’s overall risk management

Risks presented by climate change have been embedded into our risk management framework

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 that

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. The ESG working group continue to

seek ways to ensure that climate friendly initiatives are considered and embedded in the Group's

cultural framework.

PayPoint Plc Annual Report 2024

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 CO

emitted, in line with the GHG emissions disclosures. We use third party

sustainability software 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. We have a stated target to achieve a 30% reduction in emissions

generated by use of sold products by 2030, compared to 2022. Good progress has been made in the

year, with the launch of our new device, PayPoint Mini, with emissions that are 85% lower than the

PayPoint One.

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 39. Scope 3 material emissions

include purchased goods and services covering terminal and IT purchases, waste generated in

operations, business travel, employee commuting and use of sold products which is 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 has set two primary targets. Firstly to achieve Net-zero in our own operations b 2030

and secondly to achieve net-zero across our entire value chain by 2040. We have set out a number

of commitments that demonstrate how we plan to achieve these targets and specific actions and

targets are agreed each year. Further information can be found on pages 36 and 37. The ESG Working

Group monitors performance against targets throughout the year and reports performance to the

Executive Board and Board.

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. These time-frames were selected as they

align with our business strategy planning timelines.

These timelines differ from those considered

in our viability assessment because these are

not the most material risks to our viability. 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 our contribution to

climate change and maximising opportunities.

Key risks and opportunities over this time

horizon include:

• Increase in climate related regulations

and emissions reporting obligations.

• Increased energy prices as we switch

to carbon-neutral energy contracts for

our offices.

• Substitution of existing products and

services with lower emission options.

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.

• Increased manufacturing costs.

• Lost business opportunities if unable

to meet customer and partner

climate requirements.

• Changes to markets and consumer trends.

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.

• Shift in market trends and

customer behaviour.

• Changes in precipitation patterns and

extreme variability in weather patterns.

• Increased concern from shareholders

and other stakeholders.

• Rising temperatures.

Strategy

PayPoint Plc Annual Report 2024

Strategic report

Governance Financial statements Shareholder information

Risk Management

Responsible business continued

We have conducted a comprehensive assessment of climate-related risks and

opportunities, including any potential financial impact. The table below lists our

most important risks and opportunities. These do not currently have a material

financial impact. However, they are closely monitored by our ESG Working Group

and mitigations are implemented as described below.

Risks Transition Risks

Governance and regulatory

Risk: Non-compliance with increased emissions regulations and reporting obligations

Potential impact Mitigation strategy

Potential impact on costs, such as for energy

use or replacement of energy inefficient stock

or equipment. Revenue may be impacted

by changes in customer demand driven by

changes in regulations, and business operations

may need to be amended to make them more

energy efficient. Staff or consultancy costs may

increase as reporting obligations increase.

• 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.

• Review of energy contracts when the existing contracts expire to

lower carbon but still cost effective alternatives.

Technology

Risk: Substitution of existing products and services with lower emissions options

Potential impact Mitigation strategy

Costs to adopt and implement new products

and processes.

• Careful management of the roll out of more energy

efficient terminals.

Market

Risk: Changes to markets and consumer trends

Potential impact Mitigation strategy

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 14% of PayPoint’s revenue

is from energy clients and the transition

to carbon neutral energy may impact

these clients.

• 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.

Market continued

Risk: Increased manufacturing costs

Potential impact Mitigation strategy

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.

Risk: Increased energy prices

Potential impact Mitigation strategy

Increased operating costs from our own

energy usage, and potentially lower demand

for our energy related products.

• We keep the amount of office space utilised under close review

and close sections of the office where feasible, to reduce

heating and cooling requirements.

• Ongoing assessment of office gas and electricity usage to

identify reduction opportunities.

• Ongoing assessment of business travel requirements to

minimise car journeys and identify reduction opportunities.

Reputation

Risk: Lost business opportunities if unable to meet customer and partner climate requirements

Potential impact Mitigation strategy

Reduction in revenue. • Environmental policy continually assessed and updated

to ensure PayPoint meets customer and partner

climate requirements.

Risk: Increased concern from shareholders and other stakeholders

Potential impact Mitigation strategy

Reduction in capital availability. • Transparency through our annual TCFD disclosures in the

Annual Report.

Risks Physical Risks

Weather

Risk: Changes in precipitation patterns and extreme variability in weather patterns

Potential impact Mitigation strategy

Increased costs from damage to buildings. • Ongoing improvement of our buildings.

Risk: Rising temperatures

Potential impact Mitigation strategy

Increased cooling costs. • Switch to renewable electricity contract at contract renewal.

• Assessing air conditioning requirements for our offices.

PayPoint Plc Annual Report 2024

Opportunities

The table below details the main climate-related opportunities and their potential impact on our business,

along with the current status.

Resource efficiency

Opportunity: Recycling

Potential impact Mitigation strategy

Reduced construction costs. • We engage with our electrical waste suppliers to ensure there is a high

component of reuse and recycling of our retired terminals and IT equipment.

Opportunity: Office space kept under review

Potential impact Mitigation strategy

Reduced office costs. • We keep the amount of office space utilised under close review and

close sections of the office where feasible to reduce heating and cooling

requirements. One floor of one of our head office buildings has been closed

for the last year as our warehousing requirements have reduced.

Opportunity: Reduced water consumption

Potential impact Mitigation strategy

Reduced office costs. • We keep the amount of water used at our offices under close review and have

fitted timed flow taps to ensure taps are not left running.

Opportunity: Terminal economic life

Potential impact Mitigation strategy

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 reduces manufacturing requirements, transport and

disposal costs.

• We refurbish all our terminal models to ensure their economic life is maximised.

Energy source

Opportunity: Use of lower-emission energy sources

Potential impact Mitigation strategy

Increased reputational benefits. • We have already switched our electricity and gas contracts to carbon neutral

contracts for our head office and Haydock office and plan to do the same for

other premises as the contracts come up for renewal.

Energy source continued

Opportunity: Use of new technologies

Potential impact Mitigation strategy

Increased reputational benefits.

Reduced office costs.

• We encourage the use of more efficient modes of transport through the

installation of Electric Vehicle ‘EV’ charging stations at our offices where

possible. We have increased our car fleet to c30 hybrid cars which has

reduced our car fleet CO

by over 50%.

• We have reused an existing air conditioning system to replace the door

cooling system in our server room to reduce emissions. We have also

installed a sub-metering solution to identify areas of high energy usage.

We will continue to closely review the heating and cooling systems used in

our offices.

• We have rolled out a territory optimisation dashboard which helps to

ensure that field sales journeys are planned efficiently and therefore reduce

unnecessary mileage.

Products and services

Opportunity: Development and migration to lower emission products and services

Potential impact Mitigation strategy

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 efficient 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

Opportunity: Reduced electricity consumption

Potential impact Mitigation strategy

Reduced operating costs. • We have reviewed the amount, type, and storage method of our electronic

data. By deleting duplicative or obsolete data, we have reduced our stored

electronic data by a third. We are also migrating from our old server file to

Microsoft OneDrive and Sharepoint. These measures have contributed to

reducing our data centre energy consumption.

PayPoint Plc Annual Report 2024

Strategic report

Governance Financial statements Shareholder information

Social

Responsible business continued

We hold ourselves

accountable for delivering

positive and inclusive

outcomes for society

including our people,

retailer and client

partners, consumers and

the wider community.

PayPoint Plc Annual Report 2024

Our employee forum held two formal meetings

during the year to discuss topics including

Executive Remuneration, the employee survey and

general engagement. The forum is chaired by our

Chief People Officer, 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.

We continue to operate a discretionary all-

employee bonus scheme in order to engage all of

our people in delivering our objectives for the year.

In recognition of the hard work and commitment

of all of our people in delivering our performance

during the period all eligible employees will receive

a bonus of £500.

Promoting mental health

and wellbeing

Wellbeing at the PayPoint Group provides

resources and opportunities to support our

people across four key pillars of wellbeing - social,

physical, mental and emotional and financial -

enabling them to be their best self and in turn,

deliver brilliant results.

We update people regularly with useful resources

and awareness events and during the year held

a number of very well attended and informative

sessions on topics including suicide awareness

and domestic violence awareness.

Our Employee Assistance Programme is now

available to all employees across the Group,

offering support in all areas of wellbeing. We

also continue to operate ‘My pay my way’ with

Wagestream, offering further financial wellbeing

support 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 apprentices studying for a variety

of qualifications including Coaching, Team Leading

and Data Science. We also run a Management

Development Programme for line managers and

aspiring line managers across the Group and have

recently become members of the Women in Tech

Forum, providing a number of women from across

the organisation with access to monthly virtual

events, monthly masterclasses with dedicated

tracks in Engineering and Sales, a leadership

podcast series and in-person networking events.

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 different backgrounds and

identities, valuing their contribution to achieving

our strategic priorities. At the PayPoint Group, we

call this ‘Welcoming Everyone’.

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. Following the integration of Love2shop we

employed c1,000 people across the Group on

31 March 2024.

Engagement

We participated in the Great Place to Work

Survey across the Group for the first time in

2023, a survey that was previously used by

Love2shop. Great Place To Work® surveyed

over 250,000 employees to determine the top

companies recognised as the 2024 UK’s Best

Workplaces and PayPoint Group was delighted

to be named as a Best Workplace within the large

category (200–1,000 employees).

We were particularly pleased with the positive

feedback received in relation to diversity and

inclusion with questions relating to fair treatment

in respect of gender, ethnic origin and sexual

orientation receiving scores in excess of the

Best Workplaces benchmark, reflecting the

continued positive impact of our ‘Welcoming

Everyone’ approach.

People and culture

Gender balance as at 31 March 2024

Board Executive Board All employees

Female 33% Female 29% Female 42%

Male 67% Male 71% Male 58%

1 https://www.paypoint.com/modern-slavery-act.

PayPoint Plc Annual Report 2024

Strategic report

Governance Financial statements Shareholder information

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.

During the year we rolled out additional diversity

and inclusion training to all employees and our

LGBTQ+ forum recognised Pride month with a

number of events including a lunch and learn

session, quiz night, and employees sharing their

personal stories. The impact of the work we

have done in respect of diversity and inclusion is

reflected in feedback received in the Great Place

to Work Survey with questions relating to fair

treatment in respect of gender, ethnic origin and

sexual orientation receiving scores in excess of the

Best Workplaces benchmark.

We also continue to work with local schools to

support the development of aspirations in young

people (socio-economic diversity).

The overall gender balance across all employees

within the business on 31 March 2024 was 42%

female and 58% male. We recently published our

seventh gender pay gap report, which can be

found on our website

.We were pleased to see

our gap reduce during the year, however a pay

gap persists within 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 have launched the

Women in Tech forum in order to help drive more

diversity and support women within the business

to achieve their full potential.

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 offering 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

. Our 2024

modern slavery statement will be available on our

website in September 2024.

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 99 in the Audit

Committee Report.

Responsible business continued

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 2024

A strong and supportive

proposition for all

stakeholders

We provide a broad range of innovative

services and technology, connecting

millions of consumers with over 65,000

retailer partner and SME locations across

multiple sectors.

Our recently announced major partnership

expansion with Lloyds Bank will enhance our

proposition further, delivering better tools, support

and experience for our SME and retailer partners

including a market-leading banking and card

services proposition combining card payments, a

12-month fee-free Lloyds bank business account

and a connected competitive commercial card

offering. Lloyds Bank Cardnet will be investing

significantly into their business to enhance product

development and data analytics for merchants.

We have continued to strengthen our retailer

partner relationships and service, including a

refreshed approach to the ‘early life’ support

provided to our retailer partners to drive adoption

of new services, the launch of a new chatbot and

automated services for day-to-day queries, more

direct communications and our strengthened

relationships with the key retail trade associations.

Our broader commitment to our retailer partners

to deliver further value and opportunities to earn

has delivered an increase to a positive NPS score

for the first time in six years.

Enabling clients to provide vital

services in the community

We partner with over 500 payments and banking

clients in the UK, providing omnichannel payment

solutions that enable them to seamlessly and

effectively serve their customers. 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 over 11,000 locations through our

Collect+ brand, helping consumers pick up and

drop off online shopping or send parcels across

the UK. During the year we have announced new

and expanded partnerships with Royal Mail, Yodel/

Vinted and InPost and have successfully expanded

into new locations and demographics including

our growing student presence working with 14 of

the top universities and student unions.

During the reporting period, we delivered further

expansion of our client relationships. In total 70

new client services were delivered for MultiPay

and our Open Banking services continued to

grow, supported by our partner OB Connect, with

25 clients live for our services including Ovo and

AMEX. In particular, our work with Citizens Advice

in Stevenage is having an important impact on

the work they do supporting clients in financial

distress – debt caseworkers are now able to

get an up to date, accurate and holistic view of

someone’s finances in minutes when it used to

take weeks or even months. As a result, they can

provide advice and information faster, reducing

the risk of debts becoming even greater or more

serious throughout the advice process. PayPoint is

now one of the leading PISP processors in the UK

with a strong community impact underpinned by

our continuing engagement with key stakeholders

across the sectors we operate in, including Ofgem,

UK Finance, Pay.UK and the Department of Energy

Security and Net Zero.

We continue to operate the Payment Exception

Service, delivered for the Department for

Work and Pensions, to serve some of the most

vulnerable people in the UK, and were pleased to

win the DVLA contract for International Driving

Permits, which went live on 1 April 2024, marking

another key central government service that will

be provided in the community via our extensive

retailer partner network.

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 29,000

stores is bigger than all banks, supermarkets and

post offices 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 Payment Exception Service, run for the

Department for Work and Pensions via our i-movo

business, further underlines the continuing

importance of delivering cash payments to those

without access to a standard bank account, and

our work with the Citizens Advice in Stevenage is

having an important impact on the work they do

supporting clients in financial distress.

We provide a leading and differentiated set

of services, through highly reliable technology

that enables our retailer partners to run their

businesses more efficiently as well as generating

consumer footfall from their surrounding

communities. The breadth of products and

services offered by PayPoint is greater than any

other provider.

We continue to enhance our retailer partner

propositions to help respond to consumer trends

and drive additional revenue opportunities.

Our next generation device, PayPoint Mini, was

launched in November 2023 and our integrated

third-party EPoS solution, PayPoint Connect, is

now rolling out across our estate. In addition, we

launched Love2shop physical gift cards for the

first time in over 2,600 locations for the Christmas

2023 gifting season, and were pleased to have

won the DVLA contract for International Driving

Permits, which went live in our retailer partner

network on 1 April 2024.

PayPoint Plc Annual Report 2024

Strategic report

Governance Financial statements Shareholder information

The PayPoint Counter Cash service, offering

cashback without purchase and balance enquiries

over the counter, is now live in over 2,150 stores,

providing cash withdrawals at the counter.

Park Christmas Savings is the UK’s biggest

Christmas savings club, helping over 350,000

families manage the cost of Christmas, by offering

a huge range of gift cards and vouchers from

some of the biggest high street names.

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 80% of our ATM network is ‘voice guidance

enabled’, enabling people with visual impairments

to withdraw cash independently.

As more critical services continue to withdraw

from communities and High Streets across the

UK, we are more focused than ever on working

closely with our retailer and industry partners to

evolve our service provision and ensure we can

leverage our extensive network to provide vital

infrastructure and accessibility to individuals close

to where they live.

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. In April 2023 we

signed a partnership with Children With Cancer

to be our national charity partner. In addition the

Charity Committee continues to support charities

local to our office locations and support our

people with their own fundraising efforts.

The Committee organised a number of fundraising

events including quiz nights, bake sales, raffles and

a book appeal to provide gifts for families facing

cancer treatment during the festive season. We

were also delighted that 8 runners from across the

PayPoint Group ran the London Marathon 2024 in

aid of Children with Cancer. In total over £20,000

was donated to local and national charities. In

addition, we were pleased to be able to provide

advertising services and volunteer support to

Children with Cancer, free of charge.

We also continue to offer 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 adviser 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 careers fairs, mock interviews and

‘work ready’ workshops. We also hosted an annual

Work Experience Week for students from local

schools. 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.

Responsible business continued

PayPoint Plc Annual Report 2024

values

Purpose, vision &

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 34.

Value award winner: Darren Shepherd

Darren is a Team Leader in the

Customer Support Team. He was

nominated for his positive attitude,

passion and willingness to help which

enabled the team to continue to offer

an excellent service to merchants

during a period of change.

Value award winner: Amy Peebles

Amy is Social Media Manager in the

Marketing Team. She was nominated

for her collaborative approach to

delivering Social Media training to

colleagues. She put a lot of time and

effort into organising a very valuable

session which was well received by

all attendees.

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.

PayPoint Plc Annual Report 2024

Strategic report

Governance Financial statements Shareholder information

Governance

Responsible business continued

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.

PayPoint Plc Annual Report 2024

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 123 and in the Risk Management Report,

on pages 58 to 68. In addition, our anti-bribery

and corruption policy is set out in the Audit

Committee Report on page 99. The ESG Working

Group provides regular updates on progress to the

Board. A summary of progress over the past year

can be found on pages 36 to 37. Compliance with

current mandatory disclosures for our greenhouse

gas emissions are detailed on page 43.

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 pages 36 to 37.

Updated disclosures in accordance with TCFD can

be found on pages 40 to 45.

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. In 2023 we received a

Fast Payer Award from Good Business Pays which

recognised that PayPoint is a business that pays

suppliers in less than 30 days (on average) and

also pays over 95% of invoices on time, over a

rolling 12 month period.

Finally, the following section sets out our Group

Non-Financial and Sustainability Information

statement. A description of our business model

and strategy, as well as the non-financial KPIs

relevant to our business, can be found on pages

14 to 33.

Non-financial and sustainability information statement

The tables below outline where the key content requirements of the non-financial and sustainability information statement can be found within this document

(as required by sections 414CA and 414CB of the Companies Act 2006).

Reporting requirement Where to find further information Page Relevant policies if applicable

Environmental matters Responsible business 38 Environmental

Employees Responsible business

Principal risks

Audit Committee Report

Diversity

Recruitment and Selection

Health and Safety

Whistleblowing

Code of Ethics

Society and communities Responsible business 49 Charitable donations

Respect for human rights Responsible business and

https://www.paypoint.com/modern-slavery-act

47 Modern Slavery Statement

Human Rights

Anti-bribery and corruption Audit Committee Report 99 Anti-bribery and Corruption

Companies Act (2006) climate-related financial disclosures

Companies Act climate-related financial disclosure Location of disclosure Page

a) a description of the company’s governance arrangements in relation to assessing and managing

climate-related risks and opportunities;

TCFD - Governance 41

b) a description of how the company identifies, assesses, and manages climate-related risks

and opportunities;

TCFD – Governance 41

c) a description of how processes for identifying, assessing, and managing climate-related risks are

integrated into the company’s overall risk management process;

TCFD – Governance and Strategy 41,42

d) a description of:

a. the principal climate-related risks and opportunities arising in connection with the company’s

operations, and

b. the time periods by reference to which those risks and opportunities are assessed;

TCFD – Risk Management 44

e) a description of the actual and potential impacts of the principal climate-related risks and

opportunities on the company’s business model and strategy;

TCFD – Strategy

TCFD – Risk Management

43,44

f) an analysis of the resilience of the company’s business model and strategy, taking into

consideration different climate-related scenarios;

TCFD – Strategy 42

g) a description of the targets used by the company to manage climate-related risks and to realise

climate-related opportunities and of performance against those targets; and

TCFD – Metrics and Targets 43

h) a description of the key performance indicators used to assess progress against targets used to

manage climate-related risks and realise climate-related opportunities and of the calculations on

which those key performance indicators are based.

TCFD – Metrics and Targets 43

PayPoint Plc Annual Report 2024

Strategic report

Governance Financial statements Shareholder information

Responsible business continued

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.

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 2024, we are recommending a final dividend

of 19.2 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.

Employees are consulted via the Employee

Forum and in the last year Gill Barr, Non Executive

Director and Rakesh Sharma, SID and Chair of

the Remuneration Committee, have met with

the forum to discuss topics including executive

remuneration and the results of the employee

survey. Further information about how the

Company engages with all of its stakeholders can

be found on pages 55 to 57 of this report.

The Strategic Report was approved by the Board

of Directors and signed on its behalf by:

Nick Wiles

Chief Executive

12 June 2024

PayPoint Plc Annual Report 2024

with our stakeholders

Engaging

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 2024

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

staff briefings and functions hold their own team

meetings and engagement forums (see page

47 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.

Key topics discussed included

Executive Remuneration,

the engagement survey and

general engagement.

Gill Barr, the Board representative for the

Employee Forum, facilitates the flow of

communication between the forum and

the Board. During the year Rakesh Sharma

attended the forum to discuss Executive

Remuneration and Simon Coles, CTO,

attended to discuss IT strategy.

The Chief People Officer 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 forum provided regular feedback

to the Chief People Officer regarding

employee sentiment and key

questions during the organisational

review in March 2024.

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 made significant steps to

materially enhance our platform and

capabilities to deliver sustainable,

profitable growth and enhanced

rewards for shareholders.

A final dividend of 19.2 pence per

share has been declared for approval

by shareholders and share buyback

programme announced.

PayPoint Plc Annual Report 2024

Strategic report

Governance Financial statements Shareholder information

Responsible business continued

Our stakeholders How we engage Key topics discussed How the Board engages/is kept informed Key outcomes in 2024

Convenience

retailer partners

Our retailer partners offer

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. 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

‘The Fed’.

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.

Enhancements to the retailer

proposition include the launch

of our next generation device,

PayPoint Mini and our integrated

third party EPoS solution, creation

of Park Super Agent Network and

the launch of Love2shop physical

gift cards.

Service enhancements include

refreshed ‘early life’ support and

the launch of a new chatbot and

automated services for day to

day queries.

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.

Proposition enhanced with launch of

Handepay Rewards Scheme.

Major partnership expansion

with Lloyds Bank announced

that will offer merchants a

market leading banking and card

services proposition.

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.

Continued evolution of retailer

proposition in response to consumer

needs including Park Christmas

Savings, International Driving

Permits, Love2shop physical gift

cards and continued growth in

Counter Cash.

Our Open Banking services are

being used to support consumers

in financial distress.

PayPoint Plc Annual Report 2024

Our stakeholders How we engage Key topics discussed How the Board engages/is kept informed Key outcomes in 2024

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 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.

Our integrated digital payments

platform, MultiPay, provides a

comprehensive payment solution

for clients across card processing,

Open Banking, direct debit in cash

securing further wins in the housing

and charity sectors.

Open Banking services launched

with 25 clients during the

period including Ovo, AMEX and

Citizens Advice.

Over 70 new client services went

live in the year.

Local communities

Our network and activities

place 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 adviser to a

local secondary school, supporting the transition

between school and the workplace.

Our Charity Committee agrees which

charities we should support.

The Chief People Officer updates the Board

via a formal presentation once a year.

Page 50 details our charitable work

and support provided for young

people in the community.

Regulators

We maintain open channels of communication

with our regulators, including discharging our

reporting and notification requirements under

the relevant legislation and regulations that apply

to the Group businesses. In addition, we actively

support the regulators by providing responses to

consultations and surveys.

The FRC wrote to the Company

during the year to provide feedback

on its review of the audit undertaken

by KPMG LLP and a review by the

Corporate Reporting Review team

on the annual report and accounts

for the year ended 31 March 2023.

We provided a response to the

FCA Access to Cash Consultation

in December 2023 and PayPoint

Payment Services Limited

participated in an FCA survey on the

Consumer Duty in January 2024.

The Board and its Committee receives

updates on any engagement activities with

the Group's regulators such as the Financial

Conduct Authority and the Financial

Reporting Council. For more information see

page 94 of the Audit Committee report.

The observations made by the FRC

were given full consideration by

management. Additional disclosures

have been included in this annual

report where relevant to do so.

PayPoint Plc Annual Report 2024

Strategic report

Governance Financial statements Shareholder information

managing risk

Robust approach to

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 with objective oversight from

the Head of Risk, Compliance 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 achieves

this. Risks are assessed through PayPoint’s risk

management and internal control framework which

is 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 effectively. The Audit Committee

supports the Board in reviewing the effectiveness

of risk management and internal controls and

performs an annual assessment. The results of this

year’s assessment are detailed on page 96 of the

Audit Committee section.

Risk appetite

PayPoint’s risk appetite is set by the Board

and these statements of appetite align to 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 risk management and 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 management

PayPoint Plc Annual Report 2024

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 effectively manage risk.

Executive Board

Monitors key risks facing

the business and agrees

internal controls.

Management

Responsible for

identifying and managing

risks and ensuring the

effective operation of

internal controls.

Risk & Internal Audit

Manages the risk

framework and

assesses internal

control effectiveness.

The Audit Committee

Oversees the risk

framework and monitors

assurance activity and internal

control effectiveness.

Risk

identification

Identifying risks which may

impede achieving objectives.

Monitoring

and review

Monitoring of risks and controls

by the Executive Board and

Audit Committee who advise

the Board.

Inherent risk

assessment

Assessing the level of

inherent risk.

Control

assessment

Assessing the existence

and strength of controls to

mitigate risks.

Residual risk

assessment

Assessing the level of residual

risk after mitigation from

controls.

Risk reporting

Reporting the status of the most

significant risks to the Executive

Board and Audit Committee.

PayPoint Plc Annual Report 2024

Strategic report

Governance Financial statements Shareholder information

effectively

Mitigating risk

Principal risks and uncertainties

Continuous development and

review, whilst maintaining a dynamic

and effective risk management

process, is vital to support the

business in achievement of its

strategy and business objectives.

Risk management continues to

be an essential part of PayPoint’s

Corporate Governance.

Changes to principal risks

New risks and disclosures

The integration of Love2shop into the wider

PayPoint Group has continued over the financial

year, including the roll-out of PayPoint’s risk

management framework into Love2shop. Our risk

appetite remains the same as last year.

It is defined as:

Risk appetite Impact on profit before tax

Low Under £2 million

Medium Under £5 million

High Over £5 million

Changing risks

Competition & Markets – Recognising the

increase importance of consumer behaviours

and their impact on our business model, this risk

has been relabelled as “Consumer Behaviours

and Markets” to reflect the composition of this

risk more fully. The appetite for this risk has been

assigned as “high” to reflect the relationship

between this risk and value creation/reward.

Operating Model – This risk has now been

renamed as “Client Services” to reflect clients

becoming increasingly demanding in terms

of need and service expectations, along with

the compliance requirements accompanying

those services.

Emerging Risks

ESG and Climate Risk remains an emerging risk.

Whilst we recognise the impact climate change is

having globally, we continue to be a low-carbon

producing company and, as such, these risks do

not pose an immediate risk to our operations. We

have embedded a strategy of reducing our carbon

emissions, with a goal of becoming fully net-zero

by 2040 (2030 for our own operations). Details of

how we plan to achieve this are set out on pages

36 and 37.

In 2022, we 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 caused by climate change

have been embedded into our enterprise risk

management framework including our financial

planning processes, business case development

and our overall risk identification and management

processes as detailed on page 59.

The table on pages 61 to 66 sets out our principal

and emerging risks and includes: details of the

potential impact; mitigation strategies; status of

each risk; risk appetite; and exposure trend. They

do not comprise all risks faced by the Group and

are not set out in order of priority.

PayPoint Plc Annual Report 2024

Market Risks

Potential Impact Mitigation Strategies Status Risk Trend & Appetite

Consumer

Behaviours

and Markets

PayPoint’s markets and competitors continue to evolve.

The decline in legacy business cash usage is expected

to continue prompting the need for further business

diversification. The current economic climate, of continually

rising prices and lower spend levels by consumers, has

continued from the previous financial year. The impact

in particular markets, such as the Cards market, has

been noticeable with transaction process volumes

remaining subdued.

The Executive Board closely monitors consumer trends and

spending behaviour, regularly re-assessing our markets,

competitor activity, along with any opportunities to further

de-risk its legacy business. We continue to develop our

service offerings and to adapt to changes in consumer

needs and behaviours, including strategic acquisitions or

investments, where appropriate.

Risk is increasing as cost of living pressures have continued in

the year causing changes in consumer activities, particularly in

spending behaviours. This, along with the continued decline in

cash legacy business has impacted income streams for certain

parts of the business.

Trend =

Appetite =

High

Potential Impact Mitigation Strategies Status Risk Trend & Appetite

Emerging

Technology

As our markets continue to evolve, so does the technology

supporting the service provision. Pressures to deliver new

and innovative products remain and failure to keep pace

with this technological change is a risk for the Group.

We continually review technological developments

(including the evolution of AI) to understand how new

technologies can be used to support and enhance our

service offerings. The Executive Board closely monitors

emerging technologies and the impact they may have

on the Group. We also develop and implement our own

innovative technology, where appropriate.

Risk is stable as Group acquisitions, investments and

partnerships have helped to mitigate risks associated with

emerging technologies. The ongoing programme of re-

platforming our digital proposition will facilitate the further

expansion of our presence in digital payment markets. We

continue to roll out the new, updated version of our retailer

terminal – the PayPoint Mini.

Trend =

Appetite =

Medium

Principal risks

Change in status and trend

Increased Stable Decreased

PayPoint Plc Annual Report 2024

Strategic report

Governance Financial statements Shareholder information

Strategic Risks

Potential Impact Mitigation Strategies Status Risk Trend & Appetite

Transformation

Several significant IT projects are in our 3-year plan and

the delivery of these projects will be key to delivering

our business strategy and growth aspirations, along with

platform resilience.

The Executive Board is accountable for the management

and delivery of these projects, with oversight from the

Group Board.

Risk is increasing as several of these projects have been

mobilised after the FY24 year end and will be delivered

over the course of the next 2 – 3 years.

Trend =

Appetite =

Medium

Business Risks

Potential Impact Mitigation Strategies Status Risk Trend & Appetite

Client Services

Clients' expectations in terms of service level standards

and compliance are increasing as the business diversifies

into new products/channels (such as community banking).

Client retention and the exposure to clients developing in

house solutions as an alternative to our services remains an

ongoing risk, along with customer concentration risk, such

as in Parcels.

PayPoint builds and carefully manages strategic

relationships with key clients, retailers, redemption partners

and suppliers. We continually seek to improve and diversify

services through new initiatives, products and technology

and our involvement in new and innovative markets.

Risk is increasing. We continue to renew contracts and

onboard new retailers, clients, merchants and redemption

partners in line with expectations. We have built on our

services and continue to encourage our clients to diversify

and utilise more than one of our service provisions.

Working with our clients to continue to understand their

requirements and how best we can meet our clients needs

remains a priority for the Group.

Trend =

Appetite =

Medium

Principal risks

Principal risks and uncertainties continued

Change in status and trend

Increased Stable Decreased

PayPoint Plc Annual Report 2024

Business Risks continued

Potential Impact Mitigation Strategies Status Risk Trend & Appetite

Legal and

Regulatory

PayPoint is required to comply with numerous contractual,

legal, and continuously evolving regulatory requirements.

Failure to anticipate and meet obligations may result

in fines, penalties, prosecution and reputational

damage. Increased levels of regulatory supervision, the

implementation of consumer duty and the addition of new

service offerings, such as open banking and PISP, have all

increased the complexity of the regulatory environment in

which we operate.

Our Legal and Compliance teams work closely with the

business on all legal and regulatory matters and adopt

strategies to ensure PayPoint is appropriately protected

and complies with regulatory requirements. The teams

advise 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.

Risk is stable. We continue to manage new legal and

regulatory exposures through our risk management

framework and this framework has been rolled out across

our Love2shop business following its acquisition in 2023.

As referenced in note 31, the two claims served on a

number of companies in the Group in relation to the

matters addressed by commitments made to Ofgem in

2021 in resolution of Ofgem’s competition concerns are

still ongoing. The Group's position remains unchanged

and we are confident that we will successfully defend

these claims.

Trend =

Appetite =

Low

Potential Impact Mitigation Strategies Status Risk Trend & Appetite

People

Failure to retain and attract key talent impacts many areas

of our business. A key element of the 3 year plan is revenue

growth, and we need to be confident we can attract/

retain those individuals who are instrumental in driving top

line growth, along with individuals who will support the

operational transformation of our business. Key person

dependencies, at both executive and senior management

levels, have been noted as a key risk.

The Executive Board continues to monitor this risk, with

oversight from the Remuneration Committee. We continue

to invest in our people, with a clear focus on retaining talent

and key person dependency. PayPoint’s purpose, vision

and values, are defined and embedded within the business,

our expected behaviours and our review and monitoring

processes. An employee forum comprising employees from

across the business engages directly with the Executive Board

on employee matters.

Risk is increasing. The delivery of £100m EBITDA requires

significant revenue growth over FY25 and FY26 and a key

element of this is retaining and attracting key talent to

support delivery of this growth. Employee engagement

surveys remain positive and key actions around cost-of-

living support, better employee interaction and flexible

working have been implemented.

Trend =

Appetite =

Low

Change in status and trend

Increased Stable Decreased

PayPoint Plc Annual Report 2024

Strategic report

Governance Financial statements Shareholder information

Operational Risks

Potential Impact Mitigation Strategies Status Risk Trend & Appetite

Cyber Security

Cyber security risk continues to grow due to the growing

volume and ever-increasing sophistication of the nature

of these attacks and our expanding digital footprint. Such

attacks may significantly impact service delivery and data

protection causing harm to PayPoint, our customers and

stakeholders. As the geographical instability has continued

and increased over the last year, cyber-crime and its

potential impact on our Group continues to increase as do

our efforts to mitigate the likelihood of such an attack and

in monitoring activities for potential instances of attack.

Recognising the importance and potential impact this

risk poses to our business, the Executive Board regularly

assesses PayPoint’s cyber security and data protection

framework, and the Cyber Security and IT Sub-Committee

of the Audit Committee maintains 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 have implemented tools to assist in

quick identification of potential threats. We operate a

robust incident response framework to address potential

and actual breaches in our estate or within our supply

chain. We engage with stakeholders, including suppliers on

cyber-crime and proactively manage adherence with data

protection requirements.

Risk is increasing because of the growing volume and

sophistication of cyber-attacks, coupled with our

expanding digital footprint. 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 and have implemented strong monitoring

capability across the Group.

Trend =

Appetite =

Low

Potential Impact Mitigation Strategies Status Risk Trend & Appetite

Business

Interruption

Failure to provide a stable infrastructure environment or

to promptly recover failed services following an incident

can lead to loss of service provision, and financial and

reputational loss. Interruptions may be caused by system

failures, cyber-attack, failure by a third party or failure of an

internal process. Recovery of the service can be hampered

by lack of appropriate resilience levels.

PayPoint’s has developed a comprehensive and robust

business continuity framework. This is reviewed by the

Executive Board and the Cyber Security and IT sub-

Committee of the Audit Committee maintains oversight of

the framework and its implementation. 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. Risk

from supplier failure is managed through contractual

arrangements, alternative supplier arrangements and

business continuity plans.

Risk is increasing. System disruption is an inherent

business risk. However, we recognise that the acquisition

of Love2shop, our IT transformation projects and our

expansion into different products contribute to an

increasing complexity of our operations. Better staff

training and retention has enhanced our ability to detect

and recover from service issues.

Trend =

Appetite =

Low

Principal risks

Principal risks and uncertainties continued

Change in status and trend

Increased Stable Decreased

PayPoint Plc Annual Report 2024

Operational Risks continued

Potential Impact Mitigation Strategies Status Risk Trend & Appetite

Credit and

Liquidity/

Treasury

Management

The Group has significant exposures to large clients/

retailers, redemption partners and other counterparties. We

process high volumes of payments which are dependent

upon effective operational controls. The Group also

operates a number of debt/banking covenants and interest

expenses which must be carefully managed. Cashflow

management plays an increasingly important role in the

Group’s operations.

PayPoint has effective credit and operational processes

and controls.

Retailers and counterparties are subject to ongoing credit

reviews, and effective debt management processes

are implemented. Settlement systems and controls are

continually assessed and enhanced with new technology.

We have effective 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. Residual risk

associated with potential default of gift card providers is

mitigated through insurance.

Risk is stable. Cost of living pressures may impact our client

and retail estate. However, we have robust monitoring and an

increase in support payment processing in place to reduce

default rates and impacts.

The risk profile of our business operations remains stable. We

continue to review and enhance our operational processes

and controls, and relationships with our funding partners.

We successfully refinanced to support the acquisition of

Love2shop and our cash generation remains robust. We also

successfully refinanced our facility in June 2024. Liquidity

targets as planned for the year have been met.

Trend =

Appetite =

Low

Potential Impact Mitigation Strategies Status Risk Trend & Appetite

10.

Operational

Delivery

Delivery of key initiatives and strategic objectives, including

sales and service delivery growth, is key to achieving the

desired success levels anticipated for the group. Successful

planning, forecasting and successful execution of all

business function areas are key to ensuring operational

delivery. Supply chain management is also a key factor in

delivering our operational targets. Failure to manage this

risk would hamper our business performance, impact our

stakeholders, and lead to regulatory or legal sanctions.

The Executive Board has overall responsibility for delivering

key initiatives implementing a robust control framework.

The Executive Board have implemented a robust and

effective reporting suite to ensure management of BAU

activity is supported by timely and accurate business

analysis. We continue to develop our Business Intelligence

and Management information reporting capabilities to

enhance, support and develop our management functions.

Our project management methodology ensures projects

are prioritised and governed effectively. Our existing

processes are continuously reviewed to make sure they are

efficient and well controlled.

Risk is stable. We continue to focus on effective integration

of Love2shop into our business. We continue to develop new

services and enhance existing capabilities.

Trend =

Appetite =

Low

Change in status and trend

Increased Stable Decreased

PayPoint Plc Annual Report 2024

Strategic report

Governance Financial statements Shareholder information

Emerging Risks

Potential Impact Mitigation Strategies Status Risk Trend & Appetite

11.

ESG and

Climate

We continue to focus on environmental, social and

governance matters and recognise that our business needs

to be environmentally responsible to create shared value for

all stakeholders.

PayPoint continues to seek ways to reduce carbon

emissions and its environmental impact.

We continue 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 they recommend strategy

to the Board. PayPoint aligns its business with reducing

carbon emissions, and continually assesses its 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.

Our ESG working group has implemented various

measures as we embed low carbon strategies into our

working practices and business strategy. The roll out of

the PayPoint Mini, our new terminal, supports reduction

of our carbon footprint through production of lower

emissions. We continue the move toward electric cars for

our company fleet, helping our field team to travel in more

environmentally friendly ways.

We run an employee forum and have implemented various

measures as a result, such as cost of living support.

Trend =

Appetite =

Medium

Principal risks

Principal risks and uncertainties continued

Change in status and trend

Increased Stable Decreased

PayPoint Plc Annual Report 2024

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 61 to 66)

and the strategic plans that are reviewed at least

annually by the Board.

Assessment period

The Directors have determined that the Group’s

strategic planning period of three years remains

an appropriate timeframe 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 current financing facilities are in place

until June 2028, broadly in line with this period.

Assessment of prospects

The Directors assess the Group’s prospects

through the annual strategy day, held this year

in November 2023, and review of the Group’s

three-year Plan, which was most recently in

March 2024. The planning process forecasts

the Group’s financial performance that include

cash flows, allowing the Directors to assess both

the Group’s liquidity and adequacy of funding.

In its assessment of the Group’s prospects, the

Directors have considered the following:

The Group’s strategy and how

it addresses changing economic

environments in context of our clients,

parcel partnerships, merchants and

retailer requirements

In each of our business divisions, we evolve

our proposition to specifically address the

requirements of our clients and merchants. In our

Shopping division, our partnership with Lloyds

Bank will provide a market-leading banking and

card services proposition. In the e-Commerce

division, the new partnerships with Royal Mail

and Yodel/Vinted, together with new locations in

Student unions creates additional convenience for

online shoppers. In Payments and Banking, we are

expanding our community cash banking solutions

across the UK providing much needed access

to cash for consumers. In Love2shop, we have

added the ‘Essentials’ product to key government

procurement frameworks and integrated this

product into our PayPoint OpenPay service

enabling consumers choice of cash or vouchers.

The Group’s inherent resilience to risk

The Group has an inherent resilience to risk from

its diversified proposition across many sectors.

This means there are substantial opportunities to

continue to provide more key services across all

our customers (Retailers, SMEs, Clients, prepay

savers and Parcel partnerships). This will ensure

we are more integral to all of our customers. The

business remains highly cash generative, enabling

continued investment in key areas of growth to

support the Group’s longer-term viability.

Expectations of the future

economic environment

The economic environment remains uncertain.

Higher inflation and cost of borrowing have

and continue to impact consumer behaviours

and confidence. The diversity and necessity

of our proposition ensures the business can

adapt to ongoing and unexpected changes.

A good example of this is the Yodel/Vinted

partnership which supports many value seeking

consumers with purchases in the previously loved

clothing market.

The Group’s financial position

As at 31 May 2024 the Group had £66.2 million

of net debt, split £11.6 million cash and £77.8

million utilised facilities. Compared to the total

facility of £135m means the Group has substantial

headroom of £68.8m. This level of liquidity is

sufficient for all viability scenarios.

Assessment of viability

To assess our viability, we modelled different

scenarios by considering the potential impact

of the principal risks (as shown in the table on

pages 61 to 66). Risks are broadly unchanged,

the additional investments required to realise our

integration and plan targets are included in the

plan financial projections. We have reassessed the

group’s scenarios to reflect the progress made in

delivering our strategy. All ten principal risks were

used in our modelling. They were chosen because

they combine to represent plausible scenarios

covering a range of different operational and

financial impacts on the business.

In total, three severe but plausible individual

scenarios have been modelled, with a fourth

reverse stress test scenario. These scenarios and

the assumptions within are detailed in the table

below. Theoretically all these scenarios, with

differing causes could occur together, with varying

levels of impact. However, we have not included a

combined scenario of scenarios A to C.

None of the separate scenarios modelled was

found to impact the long-term viability of the

Group over the assessment period. In assessing

each of the scenarios, we have taken account of

the mitigating actions available to us, including,

but not limited to reducing discretionary

operating spend, reducing non-committed capital

expenditure, repricing our products and services,

freezing recruitment, reducing variable incentives

and temporary suspension of dividend payments.

Conclusion

Having assessed the Group’s current position,

potential impacts of principal risks, managing

adverse conditions in the past, potential

mitigating actions and prospects of the Group,

the Directors confirm they have a reasonable

expectation that the Group will be able to

continue in operation, remain solvent and meet

its liabilities as they fall due over the three-year

assessment period.

Viability statement

PayPoint Plc Annual Report 2024

Strategic report

Governance Financial statements Shareholder information

Scenario modelled Linked to principal risk Assumptions

Scenario A

A sharp economic decline in

the economy and our markets

causes material divergence on

planned product growth rates or

accelerated declines.

Risk (1) Competition and markets

Risk (2) Emerging technology

Risk (4) Operating model

Risk (10) Operational delivery

Transactions/merchants/estate

Areas of growth have been reduced or held flat and in areas of decline have been assumed to continue or accelerate those declines.

Margins, revenue rates per transaction/merchants or estate

Margins and rates have been held in line with planned levels.

Costs

No cost savings assumed however bonus would not be paid.

All of the above are assumed to impact for FY24/25 with a slow recovery in FY25/26 back to planned levels in FY26/27.

Dividends and Share Buy-Back

Dividends are unchanged as per the dividend policy. Share buy-back is maintained.

Scenario B

Our transformation and

integration projects do not

deliver the planned growth.

Risk (3) Transformation

Risk (6) People

Revenue Growth

Planned transformational revenue growth rates are assumed to halve over the life of the plan.

Costs

Costs, linked to transformational revenue growth are assumed to increase by 5% p.a. above planned levels to achieve

transformational execution and cover retention issues or unforeseen skills gaps.

Dividends and Share Buy-Back

Dividends are unchanged as per the dividend policy. Share buy-back is maintained.

Scenario C

A one-off event, such as a legal,

regulatory, cyber security or a

significant credit loss event.

Risk (5) Regulatory and legal

(grouping all the one-off hits together)

Risk (7) Cyber security

Risk (8) Business interruption

Risk (9) Credit and liquidity/

Treasury Management

Revenue

No impact is assumed as PayPoint would adjust to change or correct any breach so that level of business could continue.

Costs

It is assumed that an average of all possible maximum fines, £26.9m, is incurred in FY24/25 but no other associated costs together

with a credit risk of £12.1m totalling £39m.

Dividends and Share Buy-Back

No interim dividend would be paid in FY2526, the year impacted. Otherwise, dividends are unchanged as per the dividend policy.

Share buy-back is maintained.

Scenario D

Two reverse stress tests scenario

were undertaken.

The first: adopting the principles

of Scenarios A and B where a

continuously monthly impact has

been modelled to understand

when our funding limits would

be breached.

The second: adopting the

principles of Scenario C to

determine the quantum of a one-

off impact to breach covenants or

exceed funding availability.

Risk (1) Competition and markets

Risk (2) Emerging technology

Risk (3) Transformation

Risk (4) Operating model

Risk (6) People

Risk (10) Operational delivery

For the first scenario, no dividends paid across the three years, other than the final dividend in respect of FY24. The share-buyback

is assumed to continue.

For the second scenario, In this reverse stress test, it is assumed no dividends are paid in the year of the event and therefore from a

cash perspective, we save c.£13m in FY26 and FY27.

For both tests, the share buyback is assumed and therefore remains a management 'lever'.

Viability statement continued

PayPoint Plc Annual Report 2024

Financial review

£m

Year ended

31 March 2024

Year ended

31 March 2023 Change %

PayPoint segment 169.8 160.1 6.0%

Love2shop segment 136.6 7.6 n/m

Total revenue 306.4 167.7 82.7%

PayPoint segment 129.7 125.5 3.3%

Love2shop segment 51.3 3.4 n/m

Total net revenue

181.0 128.9 40.4%

PayPoint segment (79.2) (75.2) 5.3%

Love2shop segment (40.1) (2.9) n/m

Total costs (excluding adjusting

items) (119.3) (78.1) 52.8%

PayPoint segment 50.5 50.3 0.4%

Love2shop segment 11.2 0.5 n/m

Underlying profit before tax

61.7 50.8 21.5%

Adjusting items:

Amortisation of intangible

assets arising on acquisition (8.1) (2.6) n/m

Net movement in convertible loan notes (0.2) – –

Exceptional items (5.2) (5.6) 7.1%

Profit before tax 48.2 42.6 13.1%

Underlying EBITDA

81.3 61.3 32.6%

Net corporate debt

(67.5) (72.4) 6.8%

1 Net revenue is an alternative performance measure. Refer to note 4 to the financial information for a reconciliation to revenue.

2 Underlying profit before tax is an alternative performance measure. Refer to note 1 to the financial information for a reconciliation.

3 Underlying EBITDA is an alternative performance measure. Refer to note 1 to the financial information for a reconciliation.

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.

Total revenue increased by £138.7 million (82.7%) to £306.4 million (2023: £167.7 million). Net revenue

increased by £52.1 million (40.4%) to £181.0 million (2023: £128.9 million), with the Love2shop (L2s)

segment contributing an increase of £47.9 million with a full year of revenue compared to one month

in the previous year. Revenue from the PayPoint segment increased by £9.7 million to £169.8 million

(2023: £160.1 million), predominately driven by the growth in e-commerce with parcel transactions

exceeding 100 million in the year, partially offset by the cash payments decline in Payments & Banking.

Total costs increased by £41.2 million to £119.3 million (2023: £78.1 million). The increase in costs was

driven by the £37.2 million additional costs from a full year of L2s compared to one month in the previous

year, together with increases in transactional costs of revenue and depreciation of terminals and devices

used to drive revenue in the business.

Further

progress

towards delivering £100m

EBITDA by the end of FY26.

The Group has delivered a robust financial

performance in FY24, with underlying EBITDA

of £81.3 million, up 32.6% vs FY23 following

a full year contribution from Love2shop.”

Rob Harding

Chief Financial Officer

12 June 2024

PayPoint Plc Annual Report 2024

Strategic report

Governance Financial statements Shareholder information

Exceptional costs of £5.2 million, which are one-off, non-recurring and do not reflect current operational

performance, consisted of £2.0 million restructuring costs, £2.1 million in relation to legal fees incurred

as a result of the Group’s defence of claims served against it and £1.1m in relation to costs associated

with refinancing for the Group. The underlying profit before tax for the Group increased by £10.9 million

(21.5%) to £61.7 million (2023: £50.8 million). This result includes 12 months of contribution from L2s

leading to an increase of £10.7 million in underlying profit before tax.

Profit before tax of £48.2 million (2023: £42.6 million) increased by £5.6 million (13.1%). The increase

reflects a full year of profit contribution from the L2s segment compared to the prior year which only

included one month.

EBITDA/Underlying EBITDA (£m)

Year ended

31 March 2024

Year ended

31 March 2023

Profit before tax 48.2 42.6

Add back:

Net interest expense 7.0 2.6

Depreciation & Amortisation – including amortisation of

intangible assets arising on acquisition 20.7 10.5

EBITDA (£m) 75.9 55.7

Exceptional items and net movement in convertible loan notes 5.4 5.6

Underlying EBITDA (£m) 81.3 61.3

Underlying EBITDA increased by £20.0 million to £81.3 million (2023: £61.3 million), which comprises

£17.8 million for the L2s segment and £63.5 million for the PayPoint segment.

Cash generation reduced by £2.5 million to £57.9 million (2023: £60.4 million), delivered from profit

before tax of £48.2 million (2023: £42.6 million). There was a net working capital outflow of £11.8 million,

of this £3.2 million related to payment of costs accrued for the Appreciate acquisition at the prior

year end, £3.7million for the extension of payment terms with a key customer, £3.0 million following an

exceptionally high year of non redemption income releases in L2s and £2.8 million resulting from the

timing of redemption and expiry of various types of L2s products.

Net corporate debt decreased by £4.9 million to £67.5 million (2022: £72.4 million) following cash

generation of £57.9 million partially offset by tax, capital expenditure and dividends. At 31 March 2024

loans and borrowings were £93.9 million (2023: £94.4 million).

PayPoint Segment

£m

Year ended

31 March 2024

Year ended

31 March 2023

Change

Revenue 169.7 160.1 6.0%

Shopping 64.4 62.0 3.9%

E-commerce 11.8 7.3 61.6%

Payments & Banking 53.5 56.2 (4.8)%

Net revenue 129.7 125.5 3.3%

Other costs of revenue (16.9) (17.6) (4.0)%

Depreciation and amortisation (costs of revenue) (9.7) (7. 2) 34.7%

Depreciation and amortisation (administrative

expenses) excluding amortisation of intangible

assets arising on acquisition (0.4) (0.4) –

Other administrative costs –

excluding exceptional items (49.3) (47.7) 3.4%

Net finance costs – excluding exceptional costs (2.9) (2.3) 26.1%

Total costs (79.2) (75.2) 5.3%

Underlying profit before tax

(excluding adjusting items) 50.5 50.3 0.4%

Shopping net revenue increased by £2.4 million (3.9%) to £64.4 million (2023: £62.0 million). Service fees

net revenue increased by £1.8 million (10.1%) driven by the implementation of the annual RPI increase

and additional PayPoint sites. Cards net revenue increased by £0.9 million (2.8%), with site growth

delivered in the Handepay EVO and PayPoint Lloyds Cardnet estates. ATM and Counter Cash net revenue

decreased by £0.6 million (6.4%) due to a reduction in transactions driven by the continuing trend of

reduced demand for cash across the economy. FMCG voucher revenue increased by £0.5 million (75.4%)

to £1.1 million (2023: £0.6 million) following further campaigns run in the year.

E-commerce net revenue increased by £4.5 million (61.6%) to £11.8 million (2023: £7.3 million), driven by

strong growth in total transactions which increased by 77.5%. This was due to our strength in clothing/

fashion categories, the investment in the in-store experience with Zebra label printers over the past

18 months and the continued expansion from new services and carrier partners.

Payments & Banking net revenue decreased by £2.7 million (4.8%) to £53.5 million (2023: £56.2 million).

Cash bill payments and top ups revenue decreased by £2.2 million (7.3%) to £27.8 million

(2023: £30.0 million) driven by a 12.2% reduction in transactions following the reduced usage of cash

and the continued switch to digital payments. Digital net revenue decreased by £2.0 million (12.7%) to

£13.8 million (2023: £15.8 million) as a result of the EBSS scheme which benefited the previous year by

£3.0 million. This was partially offset by an increase in interest income received on client balances resulting

from the increase in interest rates.

Financial review continued

PayPoint Plc Annual Report 2024

The cost of commission to retailers increased by £7.4 million (21.5%) to £41.8 million (2023: £34.4 million).

This increase in payment to our retailer partners reflects an increase in the number of transactions

processed as well as more with higher commission rates per transaction.

Total costs (excluding adjusting items) increased by £4.0 million (5.3%) to £79.2 million

(2023: £75.2 million), primarily as a result of further investment in our people and field sales

team to support growth in sales.

Sector Analysis

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, terminal leasing, ATMs, Counter Cash and FMCG vouchering.

Net revenue (£m)

Year ended

31 March 2024

Year ended

31 March 2023

Change

Service fees 19.7 17.9 10.1%

Card payments 32.7 31.8 2.8%

ATMs and Counter Cash 8.8 9.4 (6.4)%

Other shopping 3.2 2.9 10.3%

Total net revenue (£m) 64.4 62.0 3.9%

Net revenue increased by £2.4 million (3.9%) to £64.4 million (2023: £62.0 million) primarily due to the

growth in service fees and Handepay/Merchant Rentals card payments. The net revenue of each of our

key products is separately addressed below.

Service fees from terminals

Year ended

31 March 2024

Year ended

31 March 2023

Change

Net Revenue (£m) 19.7 17.9 10.1%

PayPoint terminal sites (No.)

PayPoint One Terminals 18,428 18,453 (0.1)%

PayPoint Mini 869 – –

Total PayPoint One/Mini 19,297 18,453 4.6%

Legacy (T2) 17 142 (88.0)%

PPoS 9,164 9,174 (0.1)%

PayPoint One – non-revenue generating 671 709 (5.4)%

Total terminal sites in PayPoint network 29,149 28,478 2.4%

PayPoint One average weekly service

fee per site (£) 19.1 17. 8 7.3%

As at 31 March 2024, PayPoint had a live terminal in 29,149 UK sites, an increase of 2.4% primarily as a

result of new PayPoint mini sales.

Service fees: This is a core growth area and consists of service fees from PayPoint One, PayPoint mini

and our legacy terminals. Service fee net revenue increased by £1.8 million (10.1%) to £19.7 million

driven by the additional revenue generating sites compared to the prior year.

The PayPoint One average weekly service fee per site increased by 7.3% to £19.1, following an annual

RPI increase.

Card Payments and leases

Year ended

31 March 2024

Re-presented

Year ended

31 March 2023

Change

Net Revenue (£m)

Card payments – Acquiring 23.3 23.5 (0.9)%

Card payments – Rentals 8.8 7.8 12.8%

Card payments – Lending and other 0.6 0.5 20.0%

Services in Live sites (No.)

Card payments – Handepay – EVO 19,682 18,397 7.0%

Card payments – Handepay – Worldpay 2,572 3,839 (33.0)%

Card payments – PayPoint 10,064 9,541 5.5%

Card terminals – Merchant Rentals 49,844 47,0 85 5.9%

Transaction value (Millions)

Card payments – Handepay 4,612 4,421 4.3%

Card payments – PayPoint 2,561 2,457 4.2%

1 Card payment and leases analysis has been re-presented to better aggregate revenue streams and key KPIs.

Card payments: Card payments acquiring services generated £23.3 million net revenue in the year, a

reduction of £0.2 million from the previous year (2023: £23.5 million). Transaction values overall have

increased by 4.3% to £7,173 million (2023 £6,878 million) and Handepay new site sales increased in the

year supported by the one-month proposition, but sites have been impacted by higher churn, particularly

in our Worldpay back book in this very competitive market.

Card payment rentals have increased by £1.0 million (2023: £7.8 million) mainly as a result of a change

in the sales mix of operating leases compared to finance leases. Operating leases also have associated

costs included in the profit and loss account.

PayPoint Plc Annual Report 2024

Strategic report

Governance Financial statements Shareholder information

ATMs and Counter Cash

Year ended

31 March 2024

Year ended

31 March 2023

Change

Net Revenue (£m) 8.8 9.4 (6.4)%

Services in Live sites (No.) 9,599 9,150 4.9%

Active sites (No.) 5,635 5,400 4.4%

Transactions (Millions) 28.5 30.1 (5.3)%

ATMs and Counter Cash: Net revenue reduced by £0.6 million (6.4%) to £8.8 million (2023: £9.4 million)

as transactions reduced by 5.3% to 28.5 million. This is attributable to the continued reduced demand

for cash across the economy. Although our new product, Counter Cash, continues to grow. ATM and

Counter Cash active sites increased 4.4% to 5,635 mainly as a result of the continued roll out of Counter

Cash sites and PayPoint continued to optimise its ATM network by relocating existing machines to better

performing locations.

Other: Other shopping services increased by £0.3 million (10.3%) to £3.2 million (2023: £2.9 million) this

includes FMCG voucher campaigns which have increased by 75.4%.

E-commerce

Parcels

Year ended

31 March 2024

Year ended

31 March 2023

Change

Net Revenue (£m) 11.8 7.3 61.6%

Services in Live sites (No.) 11,786 10,514 12.1%

Transactions (Millions) 100.1 56.4 77.5%

E-commerce net revenue increased by £4.5 million (61.6%) to £11.8 million following a record year for

Collect+ as parcel transactions grew strongly by 77.5% to 100.1 million. This was driven by our strength

in clothing/fashion categories and the investment in the in-store experience with Zebra label printers

over the past 18 months. There has been continued expansion from new services, Yodel store to store

and Amazon returns, and new carrier partnerships with Royal Mail. Parcel sites increased by 12.1% to

11,786 sites.

Payments & Banking

Net revenue (£m)

Year ended

31 March 2024

Re-presented

Year ended

31 March 2023

Change

Cash – bill payments & top ups 27.8 30.0 (7.3)%

Digital 13.8 15.8 (12.7)%

Cash through to digital 6.8 6.9 (1.4)%

Other payments and banking 5.1 3.5 45.7%

Total net revenue (£m) 53.5 56.2 (4.8)%

Payments & Banking divisional net revenue decreased by 4.8% to £53.5 million mainly as a result of

the Energy Bills Support Scheme impacting the previous year, fewer cash bill payments and top up

transactions and margin erosion, this has been partially offset by continued growth in digital transactions

and higher interest received on customer balances.

Cash – bill payments & top ups

Year ended

31 March 2024

Re-presented

Year ended

31 March 2023

Change

Net revenue (£m) 27. 8 30.0 (7.3)%

Transactions (millions) 145.2 165.4 (12.2)%

Transaction value (£m) 4,062 4,483 (9.4)%

Average transaction value (£) 28.0 27.1 3.3%

Net revenue per transaction (pence) 19.1 18.1 5.5%

1 Payments & Banking analysis has been re-presented to better aggregate revenue streams and key KPIs.

Financial review continued

PayPoint Plc Annual Report 2024

Cash – bill payments & top ups net revenue decreased by £2.2 million (7.3%) to £27.8 million. The year

on year decrease in energy transactions was 6.8%, however the Government’s EBSS reduced the number

of top ups in H2 FY23, and without this impact on the prior year, the rate of decrease in energy

transactions and net revenue year on year would have been greater.

Digital

Year ended

31 March 2024

Re-presented

Year ended

31 March 2023

Change

Net revenue (£m) 13.8 15.8 (12.7)%

Transactions (millions) 46.9 52.3 (10.3)%

Transaction value (£m) 962.7 1, 307.6 (26.3)%

Average transaction value (£) 20.5 25.0 (18.0)%

Net revenue per transaction (pence) 29.4 30.4 (3.3)%

1 Payments & Banking analysis has been re-presented to better aggregate revenue streams and key KPIs.

Digital (MultiPay, Cash Out, COP and Direct Debits) net revenue decreased by £2.0 million (12.7%)

to £13.8 million and digital transactions decreased by 5.4 million (10.3%) to 46.9 million. MultiPay net

revenue increased by £1.2 million to £5.3 million (2023: £4.1 million) with transactions growing by

2.5 million to 36.1 million. The DWP Payment Exception Service contributed £3.9 million net revenue in

the year (2023: £4.4 million) following the expected decrease in customers. Cashout revenue decreased

by £2.9 million (49.1%) to £3.0 million (2023: £5.9 million), with the prior year including the one-off

benefit of £3.5 million from the Energy Bills Support Scheme.

Cash through to digital

Year ended

31 March 2024

Year ended

31 March 2023

Change

Net revenue (£m) 6.8 6.9 (1.4)%

Transactions (millions) 8.2 8.5 (3.5)%

Transaction value (£m) 545.0 496.3 9.8%

Average transaction value (£) 66.3 58.1 14.1%

Net revenue per transaction (pence) 82.7 81.2 1.8%

Cash through to digital (eMoney) net revenue decreased by £0.1 million (1.4%) to £6.8 million

(2023: £6.9 million) and transactions decreased by 0.3 million (3.5%) to 8.2 million (2023: 8.5 million)

with volumes returning to pre-Covid-19 levels and a new baseline set for the category. eMoney

transactions derive a substantially higher fee per transaction than traditional top-up transactions as

they are more complex to process.

Other payments & banking net revenue includes interest income from client balances, SIM sales and other

ad-hoc items which contributed £5.1 million (2023: £3.5 million) net revenue. The year on year increase is

driven by the impact of increased interest rates on our client cash balances.

Love2shop Segment

£m

Year ended

31 March 2024

One month in

the Year ended

31 March 2023

Billings 359.3 14.8

Revenue 136.6 7.6

Net revenue 51.3 3.4

Other costs of revenue (7.0) (0.6)

Depreciation and amortisation (administrative expenses) excluding

amortisation on intangible assets arising on acquisition (2.5) (0.2)

Other administrative costs (26.5) (1.8)

Net finance costs (4.1) (0.3)

Total cos ts (40.1) (2.9)

Underlying profit before tax (excluding adjusting items) 11.2 0.5

L2s has generated £359.3 million of total billings in the year. The primary focus of the business is the

sale of multi-retailer redemption products. Revenue from these products is largely service fee received

from retail partners when the products are spent, non-redemption income when the product expires, and

interest income earned on prepaid funds. L2s also sells cards and vouchers that can only be redeemed

at a single retailer, effectively acting as a reseller. For these products, L2s acts as the principal, and

revenue is recognised at the full value of billings at the time of dispatch. Net revenue however is stated

after deducting the costs for the single retailer product, reflecting the actual income generated from

the sale. Net revenue for the year was £51.3 million with the previous period only including one month of

contribution following the acquisition.

The business is seasonal in nature, and profit is primarily generated in the second half of the financial year,

which represents the peak trading period for L2s corporate business and the dispatch of Park Christmas

Savings prepaid products around Christmas.

PayPoint Plc Annual Report 2024

Strategic report

Governance Financial statements Shareholder information

Profit before tax and Taxation

The income tax charge of £12.5 million (2023: £7.9 million) on profit before tax of £48.2 million

(2023: £42.6 million) represents an effective tax rate of 25.9% (2023: 18.5%). This is higher than the UK

statutory rate of 25% mainly due to adjustments in respect of share based payments. The effective tax

rate is higher than the prior year primarily as a result of the UK statutory rate of tax increasing from 19%

to 25%.

Group statement of financial position

Net assets of £121.2 million (2023: £111.7 million) increased by £9.5 million reflecting the growth in

retained earnings. Current assets increased by £44.7 million to £296.6 million (2023: £251.9 million)

due to an increase in the balance for items in the course of collection, an equal but opposite increase

in the settlement payables is included in current liabilities. Non-current assets of £222.5 million

(2023: £228.1 million) decreased by £5.6 million due to amortisation of intangible assets partially

offset by additional investment in terminals.

Total liabilities increased by £29.7 million to £398.0 million (2023: £368.3 million) due to an increase in

the settlement payables, as noted above.

Net corporate debt was £67.5 million (2023: £72.4 million) and has decreased by £4.9 million from the

previous year. Positive cash generation from trading has been offset by working capital requirements

in the year along with tax payments, capital expenditure and dividend requirements. Total loans and

borrowings (excluding IFRS16 lease liabilities) were £93.9 million at the year end, reducing by £0.5 million

from 31 March 2023. These consisted of a £36.0 million amortising term loan, £57.5 million drawdown

of the £90.0 million revolving credit facility and £0.4 million of accrued interest (2023: £46.5 million

drawdown from the revolving credit facility, £46.8 million of amortising term loans and £1.1 million of

asset financing balances and accrued interest).

Group Cash Flow and Liquidity

The following table summarises the cash flow and net debt movements during the year.

£m

Year ended

31 March 2024

Year ended

31 March 2023 Change %

Profit before tax 48.2 42.6 13.1%

Non cash other exceptional items 0.2 1.3 (84.6)%

Depreciation and amortisation 20.7 10.5 97.1%

Share-based payments and other items 0.6 2.4 (75.0)%

Working capital changes (corporate) (11.8) 3.6 n/m

Cash generation 57.9 60.4 (4.1)%

Taxation payments (8.4) (6.2) 35.5%

Capital expenditure (16.2) (13.0) 24.6%

Acquisitions and disposals of strategic investments and

acquisitions (0.1) (44.4) n/m

Leases paid (1.0) (0.2) n/m

Dividends paid (27. 3) (25.1) 8.8%

Net increase/(decrease) in net corporate debt 4.9 (28.5) n/m

Net corporate debt at the beginning of the year (72.4) (43.9) 64.9%

Net corporate debt at the end of year (67.5) (72.4) (6.8)%

Comprising:

Corporate cash less overdraft 26.4 22.0

Loans and borrowings (93.9) (94.4)

Cash generation reduced £2.5 million to £57.9 million (2023: £60.4 million) delivered from profit before

tax of £48.2 million (2023: £42.6 million). There was a net working capital outflow of £11.8 million, of

this £3.2 million related to payment of costs accrued for the Appreciate acquisition at the prior year end,

£3.7m for the extension of payment terms with a key customer, £3.0 million following an exceptionally

high year of non redemption income releases in L2s and £2.8 million resulting from the timing of

redemption and expiry of various types of L2s products.

Taxation payments on account of £8.4 million (2023: £6.2 million) were higher compared to the prior

period, with the increase in the corporation tax rate from 19% to 25%. Dividend payments were higher

compared to the prior period following an increased interim and final ordinary dividend per share from the

prior year ended 31 March 2023.

Capital expenditure of £16.2 million (2023: £13.0 million) was £3.2 million higher than the prior year.

Capital expenditure primarily consists of PayPoint One and card terminals, terminal development, the

enhancement to the Direct Debit platform and IT hardware. The increase in capital expenditure is primarily

the result of the inclusion of L2s, which accounts for £2.2 million of the £3.2 million.

Financial review continued

PayPoint Plc Annual Report 2024

Dividends

We have declared an increase of 3.2% in the final dividend to 19.2 pence per share (2023: 18.6 pence

per share) payable in equal instalments of 9.6 pence per share (2023: 9.3 pence per share) on 6 August

2024 and 27 September 2024 to shareholders on the register on 5 July 2024 and 30 August 2024

respectively. The final dividend is subject to the approval of shareholders at the annual general meeting

on 1 August 2024.

The final dividend will result in £14.0 million (2023: £13.5 million) being paid to shareholders from

the standalone statement of financial position of the Company which, as at 31 March 2024, had

approximately £102.2 million (2023: £44.2 million) of distributable reserves.

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 returns to shareholders and cash for investments. The Group’s capital allocation

priorities have been updated as follows:

• investment in the business through small investments and capital expenditure in innovation to drive

future revenue streams and improve the resilience and efficiency of our operations;

• progressive ordinary dividends targeting a growth of our earnings cover ratio from the current 1.5

to 2.0 times range to over 2.0 times by FY27;

• a 3 year share buyback programme returning at least £20 million over the next 12 months, with the

potential to increase in years 2 and 3 depending on business performance, market conditions, cash

generation and the overall capital needs of the business; and

• targeting an appropriate leverage ratio of around 1.0 times net debt/EBITDA.

Going Concern

The financial statements have been prepared on a going concern basis having regard to the identified

principal risks and uncertainties and the viability statement on page 67. Our cash and borrowing capacity

provides sufficient funds to meet the foreseeable needs of the Group including dividends.

Rob Harding

Chief Financial Officer

12 June 2024

PayPoint Plc Annual Report 2024

Strategic report

Governance Financial statements Shareholder information

Introduction to the Corporate Governance report from the Chair

Dear Shareholders,

I am pleased to introduce the governance section

of this year’s Annual Report. This section gives

more detail on the governance framework we have

in place and how this supports effective decision

making and the Board’s oversight of the delivery of

our strategic plans. Effective governance and the

Board’s strong leadership has provided structure

and stability to the business during the year so that

we are now well placed to deliver on our ambitions.

Board composition

This year there have been two new appointments

which have strengthened the Board and will

support our ability to deliver the Group’s long-

term strategic ambitions.

Following the successful integration of the

Love2shop business into PayPoint, Guy Parsons

has confirmed his intention to retire from the

Board at this year’s Annual General Meeting. In

addition, Gill Barr will also be retiring from the

Board at the Annual General Meeting having

completed nine years’ service.

In addition to the Board changes outlined above,

Ben Wishart has agreed to succeed Rakesh

Sharma as Chair of the Remuneration Committee,

with effect from the conclusion of the Annual

General Meeting. Ben has over 12 months

experience as a member of the Remuneration

Committee as required by the UK Corporate

Governance Code. Rakesh will continue to serve

as the Senior Independent Director, as well as

a member of the Remuneration Committee,

Nomination Committee, Audit Committee and the

Cyber Security and Information Technology

Sub-Committee.

The composition of the Board, including diversity

in its widest sense, is constantly kept under review

by both the Board and Nomination Committee,

to ensure that the right skills and experience are

present on the Board. In addition, we continue

to consider the size of the Board to ensure that

it is reflective of the size of the organisation

and to create an effective working relationship

with management to support the delivery of

our strategy.

Having consulted with shareholders and

following a recommendation by the Nomination

Committee, the Board has invited me to stand for

re-election at the 2024 Annual General Meeting

and to continue to lead the Board for a limited

time, which I am delighted to accept. This will be

my second three-year term as Chair, having first

been appointed as Chair in May 2020.

This is consistent with Provision 19 of the UK

Corporate Governance Code, which provides for

the extension of the normal nine year limit for a

limited period to facilitate the effective succession

planning and the development of a diverse Board.

The Board is supportive of the rationale for doing

so, which includes facilitating the effective and

orderly succession planning for the role of the Chair

and providing stability in leadership to support

with the delivery of our strategy. Further details

on this recommendation are set out on page 92 of

the Nomination Committee report. These reasons

were shared with major shareholders in a recent

consultation and I am pleased to report that my

proposed extension of term was well supported.

We are pleased to present our Board diversity

and inclusion statement in accordance with the

FCA Listing Rule requirements (LR 9.8.6R(9)). Our

statement is set out on page 84. In addition, the

prescribed diversity data for the Board and Executive

Board, as required under LR 9.8.6R (10) and LR

14.3.33R(2), are set out in the tables on page 84.

The Board is committed to improving diversity at

all levels of the business to ensure we continue

to support and enhance our people culture,

in particular taking into consideration the

ambitions set out in the FTSE Women Leaders

Review and the Parker Review as part of our

succession planning.

Returning value to shareholders

With the strength of business performance

during the year, and with the Board’s confidence

underpinned by our sustained strong cash flow

and good progress towards delivery of continued

growth and achievement of our financial targets,

the Board has carefully considered opportunities

to engage in a share buyback programme to

further enhance shareholder returns. We are

pleased to announce our commitment to a

progressive share buyback programme of at least

£20 million over the next twelve months, which

will enhance shareholder returns. In addition, the

Board has proposed a final dividend of 19.2 pence

per share to be approved by shareholders at the

Annual General Meeting.

Stakeholder Engagement

The Board is committed to taking account of the

needs and views of our wider stakeholders when

making decisions for the long-term success of

the business.

On pages 55 to 57 we set out how we engage

with different stakeholder groups, and how their

needs and views were taken into account in our

Board decision-making.

This year the Board has

overseen the successful

integration of the

Love2shop business, as

well as the Executive’s

continued delivery of

our strategic plans to

achieve £100m EBITDA

by the end of FY26.”

Giles Kerr

Chair

Board changes during the year

• Rob Harding joined as Chief Financial Officer

on 1 August 2023, replacing Alan Dale who

retired as a Director in September 2023.

• Lan Tu joined as an independent Non-

Executive Director in March 2024, bringing

valuable payment services experience.

2024 Annual General Meeting (AGM)

The Company’s AGM will be held at PayPoint’s

registered office on 1 August 2024 at 12noon

where you will have the opportunity to meet

the Board. The matters to be approved by

shareholders are set out in our Notice of

Annual General Meeting which will be posted

to shareholders in July 2024.

PayPoint Plc Annual Report 2024

Corporate Governance statement

For the year ended 31 March 2024, the Board considers that the company has complied with all

applicable principles and provisions of the UK Corporate Governance Code 2018 (the ‘Code’).

This governance report and the strategic report set out how PayPoint has applied the principles

of the Code throughout the year.

The Board supports the value that good corporate governance brings to achieving the long-term

sustainable success of the company and continues to assess its approach to governance and the

application of the Code. The Board is responsible for ensuring that the Group has in place appropriate

frameworks to comply with the Code’s requirements.

During the year ahead, the Board and its Committees will assess any changes required in response to

the new UK Corporate Governance Code published by the FRC in January 2024, which will apply to

PayPoint’s financial year beginning on 1 April 2025.

Further information on the Code can be found on the Financial Reporting Council’s website at

www.frc.org.uk

Principles of the Code More information

Board Leadership and Company Purpose Pages 82, 83

Division of Responsibilities Pages 86, 87

Composition, Succession and Evaluation Page 92

Audit, Risk and Internal Control Page 94

Remuneration Page 100

Corporate Governance Code

The Company’s statement of compliance with the

UK Corporate Governance Code 2018 (the ‘Code’)

can be found on page 77. I’m pleased to report

that during the year the Company complied with all

applicable principles and provisions of the Code.

The Board has noted changes to the Code

requirements being introduced for financial years

commencing on or after 1 January 2025 and will

be making preparations to ensure it continues to

apply the new Code’s principles and comply with

the Code’s provisions, as appropriate.

Conclusion

I would like to finish by offering my sincere thanks to

my fellow directors for their significant contributions

over the past year to the success of the Group and

to Nick Wiles and his Executive team for their skilled

and continued transformative management of the

business. I would also like to record the Board’s

appreciation of Gill Barr for her extended period of

service, of Rakesh Sharma for his leadership of the

Remuneration Committee over the past seven years,

and of Guy Parsons for his considerable help with

the integration of Love2shop.

If you wish to discuss any aspect of our

governance arrangements, please contact

me via our Company Secretary by email

CompanySecretary@paypoint.com.

Giles Kerr

Chair

12 June 2024

PayPoint Plc Annual Report 2024 Strategic report

Governance

Financial statements Shareholder information

Rakesh Sharma OBE FREng CPhys

Senior Independent Director

Board of Directors

Giles Kerr

Chair

Nick Wiles

Chief Executive

Rob Harding

Chief Financial Officer

Appointed to the Board in November 2015

as an Independent Non-Executive Director

and Chair of the Audit Committee. Assumed

the role of Senior Independent Director in

May 2017 and became Chair of the Board

in May 2020.

Career

Giles’ former roles include chief financial

officer at the University of Oxford, group

finance director at Amersham plc and national

partner at Arthur Andersen & Co. Former

non-executive director roles include BTG

plc, Victrex plc, Elan Corporation Inc and

Abcam plc.

Board skills and experience

Giles brings extensive knowledge and

experience in corporate finance, accounting

and risk management.

Other principal roles

Non-executive director and member of

the audit, remuneration and nomination

committees of Halma plc.

Committee memberships

Chair of the Nomination Committee and a

member of the Remuneration Committee.

Appointed to the Board in October 2009,

becoming Chair in May 2015, Executive

Chair in December 2019 and Chief

Executive in May 2020.

Career

Nick retired as Chairman of Nomura in 2012

after 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 chair 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

MedX plc.

Board skills and experience

Nick brings executive director experience in

investment banking, corporate finance, equity

markets, investor sentiment and relations.

Committee memberships

Member of the Market Disclosure Committee.

Appointed as Chief Financial Officer in

August 2023 and appointed to the Board

in September 2023.

Career

Rob is a qualified chartered accountant

with more than 25 years’ experience across

financial services with Co-Op Insurance,

Swinton Insurance and Aviva plc, professional

services with Arthur Andersen and Ernst

& Young and chief financial officer at

De La Rue Plc.

Board skills and experience

Rob is a chartered accountant and brings

extensive experience in professional and

financial services, working with multinational

companies on strategic change initiatives

and efficiency programmes. Having

served as a Chief Risk Officer, Rob also

brings a deep understanding of risk

management and working in a challenging

regulatory environment.

Committee memberships

Member of the Market Disclosure Committee.

Appointed to the Board in May 2017.

becoming Senior Independent Director

in May 2020.

Career

Rakesh was chief executive of Ultra

Electronics Holdings Plc, having held several

senior positions and managed businesses and

divisions across the 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.

His long association in the global security

sector brings skills in cyber security and

information technology.

Other principal roles

Chair of Kromek Group plc; Chair of

Horizon Technologies Consultants Limited;

Lay member at The University of

Nottingham; Non-executive director of

Moneysupermarket.com Group plc.; Director

of the Sidney Stringer Multi Academy Trust

and Partner of Sharma Capital Partners Ltd.

Committee memberships

Chair of the Remuneration Committee

and a member of the Audit, Nomination

Committees and Cyber Security & Information

Technology Sub-Committee.

Ben Wishart

Independent Non-Executive Director

Appointed to the Board in November 2019.

Career

Ben has previously served as chief

information officer (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.

PayPoint Plc Annual Report 2024

Rosie Shapland

Independent Non-Executive Director

Gill Barr

Independent Non-Executive Director

Guy Parsons

Independent Non-Executive Director

Lan Tu

Independent Non-Executive Director

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

Senior independent 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 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

senior independent director at N Brown

Group plc and non-executive director of

Morgan Sindall plc, McCarthy & Stone plc and

until 2024 Wincanton PLC.

Board skills and experience

Gill brings her extensive experience as a

retailer and offers a strategic perspective

on drivers of growth. As a Non-Executive

Director she is able to provide remuneration

expertise owing to her roles as chair of the

remuneration committees of the companies

detailed below.

Other principal roles

Non-executive director of DFS Furniture plc.

Committee memberships

Member of the Audit, Nomination and

Remuneration Committees. Board

representative for the employee forum.

Appointed to the Board in March 2023.

Career

Guy was formerly executive chair of

Appreciate Group. Guy held senior sales,

marketing and operations roles at Accor UK

and Whitbread plc, before first becoming

CEO of Travelodge and then easyHotel

plc. He was previously chair of online sofa

retailer, Snug, and a non-executive director of

Yorkshire Building Society.

Board skills and experience

Guy brings extensive knowledge of

leadership, strategy, management, sales

and marketing.

Other principal roles

Trustee of Goodenough College and chair of

Goodenough Ventures Ltd.

Committee memberships

Member of the Audit, Remuneration and

Nomination Committees.

Appointed to the Board in March 2024.

Career

Lan was formerly chief executive officer until

2021 of Virgin Money Investments, a joint

venture between Standard Life Aberdeen

and Virgin Money. She also held several senior

executive positions in Standard Life, American

Express and McKinsey & Co.

Board skills and experience

Lan brings experience in business leadership

at scale, and an executive background in the

payments industry and has broad experience

as an executive and non-executive director, in

board and committee roles.

Other principal roles

Senior independent director at Shawbrook

Group plc and a director of its subsidiary,

Shawbrook Bank; Independent non-executive

director and chair of the remuneration

committee of WNS (Holdings) Limited and

vice-chair of the College Council at King’s

College London University.

Committee memberships

A member of the Audit, Remuneration and

Nomination Committees and Cyber Security

& Information Technology Sub-Committee.

Other Directors serving

during the year

During the year Alan Dale served as

Finance Director and was an Executive

Director of the Company until the

conclusion of the Company’s annual

general meeting on 7 September 2023.

Company Secretary

Indigo Corporate Secretary, part of

the specialist corporate governance

consultancy, Indigo: Independent

Governance, is appointed as Company

Secretary to the Board. Indigo is

represented at all Company Board and

Committee meetings by Julia Herd,

ACG, who is a Chartered Governance

Professional with significant experience

of supporting the governance of

listed companies.

PayPoint Plc Annual Report 2024 Strategic report

Governance

Financial statements Shareholder information

Julian Coghlan

Managing Director, Love2shop & Park Savings

Ben Ford

Customer Experience Director

Mark Latham

Managing Director, Card Services

Executive Board

Nick Wiles

Chief Executive

Nick Williams

Parcels Services Director

For the Executive Board biographies go to

corporate.paypoint.com/our-company/team

Jo Toolan

Managing Director, Payments

Anna Holness

Sales & Customer Life Cycle Director

Rob Harding

Chief Financial Officer

PayPoint Plc Annual Report 2024

Anthony Sappor

Retail Proposition and Partnerships Director

Chris Paul

Corporate Finance Director

Katy Wilde

Chief People Officer

Steve O’Neill

Chief Marketing and Corporate Affairs Officer

Simon Coles

Chief Technology Officer

Tanya Murphy

General Counsel

Executive

Board diversity

Gender

Female 29%

Male 71%

Ethnicity

Ethnic minority

British 7%

White British 93%

PayPoint Plc Annual Report 2024 Strategic report

Governance

Financial statements Shareholder information

The Directors have disclosed all their significant external commitments. These have been considered

by the Board which is satisfied that all the Directors are able to allocate sufficient time to the Company

to discharge their responsibilities effectively.

Independence statement

The Board considers its Non-Executive Directors to be independent. The Chair was considered

independent on appointment. The Board has determined that each is independent in character and

judgement and is free from any business or other relationship which could affect the exercise of his/

her judgement.

Corporate Governance Report

Membership and attendance at scheduled Board meetings held during the year

The table below shows Directors’ attendance at 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 6 6

Rob Harding

Chief Financial Officer 3 3

Alan Dale

Finance Director 3 3

Non-Executive Directors

Giles Kerr Chairman 6 6

Gill Barr Independent Non-Executive Director 6 6

Guy Parsons Independent Non-Executive Director 6 6

Rosie Shapland Independent Non-Executive Director 6 6

Rakesh Sharma Senior Independent Director 6 6

Ben Wishart Independent Non-Executive Director 6 6

Lan Tu

Independent Non-Executive Director 1 1

1 Rob Harding attended three Board meetings during the financial year, being those held since his appointment on 7 September 2023.

2 Alan Dale stood down from the Board and relevant Committees on 7 September 2023.

3 Lan Tu attended one Board meeting during the financial year, being those held since her appointment on 15 March 2024.

In addition to the six scheduled meetings, the Board met a further five times during the year to give

consideration to, and to approve, ad hoc matters in accordance with the schedule of matters reserved

to the Board.

Board composition

At the date of this report, the Board comprised nine Directors: the Chair; the Chief Executive; the Chief

Financial Officer; the Senior Independent Director; and five Independent Non-Executive Directors. The

Non-Executive Directors have a broad range of skills and experience bringing balance and diversity to the

Board. The biographies, skills and competencies of each of our Directors are set out on pages 78 to 79.

The size and composition of the Board is subject to ongoing review and a key consideration for any new

Board appointment will be the breadth of knowledge and experience the new Director could bring as well

as other diversity factors.

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 office during normal business

hours and at the annual general meeting. In accordance with the provisions of the UK Corporate

Governance Code, all Directors will submit themselves for election or re-election at each annual general

meeting. The Board’s recommendations in respect of the election/re-election of each Director, which

have been informed by the recommendations of the nominations committee, can be found in the Notice

of Annual General Meeting.

Under 12 months 2

1 to 3 years 2

4+ years 5

Board diversity

Gender

Ethnicity

Female 33%

Ethnic minority

British 22%

Male 67%

White British 78%

Tenure of Board

PayPoint Plc Annual Report 2024

Directors’ 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 100 to 119.

Engagement with stakeholders

In its decision-making, the Board has regard to each Director’s duty to promote the success of the

Company, taking account of the interests of the Company’s stakeholders. In particular it seeks to foster

strong relationships with colleagues, shareholders, convenience retailer partners, SMEs, consumers,

clients and local communities and therefore takes account of the likely effect of the principal decisions

taken during the financial year on these stakeholders. For more information see pages 55 to 57.

Engagement with, and feedback from, our people across the business is vital. This year the employee

forum continued to provide feedback on executive remuneration, the results from the employee

engagement survey and general engagement. Gill Barr, our Board representative for the employee forum,

feeds back issues raised by the members of the forum for consideration by the Board. During the year the

Senior Independent Director attended a meeting of the employee forum to discuss remuneration.

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 a good 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 institutional investors.

The Board acknowledges the importance of an open dialogue with its institutional shareholders and

welcomes engagement from all investors. Meetings are held with investors throughout the year both at

their offices and in the form of site visits to PayPoint’s operations. The Senior Independent Director is

available to address any unresolved shareholder concerns.

The Board has proposed resolutions at the forthcoming annual general meeting that will enable it to offer

opportunities for retail shareholders to participate in any future non-pre-emptive share placings.

Conflicts of interest

In accordance with the Companies Act 2006 and the Articles of Association, Directors are required

to report actual or potential conflicts of interest to the Board for consideration and, if appropriate,

authorisation. If such conflicts exist, Directors recuse themselves from consideration of the relevant

matter. 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 significant conflict of interest.

A register of interests is maintained by the Company Secretary. No material conflicts were reported by

the Directors during the year. For further information see the Nomination Committee report on page 92.

Whistleblowing

The Company’s Whistleblowing Policy is reviewed annually by the Audit Committee and any changes

are recommended to the Board for approval. Colleagues and others are encouraged to speak up openly

and raise any concerns to their line manager in the first instance. In cases where employees feel they

need to speak elsewhere, the Whistleblowing Officer, Chief People Officer, Senior Independent Director

and General Counsel are additional points of contact. Should colleagues or third parties feel the need to

raise concerns which cannot be resolved through the normal channels, the Company offers a third-party

anonymous point of contact, Protect, where concerns can be raised in confidence. Information about

the whistleblowing service is widely publicised and referred to in policies and training provided to all

colleagues. The Whistleblowing Policy was reviewed by the Audit Committee and approved by the Board

in November 2023. There have been no instances of whistleblowing reported during the year.

Culture

The Board is responsible for setting the Company’s culture, values and standards and their ongoing

review. The Executive Board defines and advocates PayPoint’s purpose, vision and values and ensures

there is continuous focus on culture, ethics and diversity. Our Code of Business Conduct defines the

behaviours expected by colleagues and is supported by other Group policies and mandatory training.

The Board is committed to embedding a ‘Welcoming Everyone’ approach to inclusion and has celebrated

various events during the year from Pride month to International Women’s Day. The Board receives

updates from the Non-Executive Director representative for the employee forum, as well as feedback

from the Chief People Officer and CEO, regularly on employee matters.

Consumer Duty Regulations

In line with the introduction of the new Consumer Duty regulations by the FCA, a consumer duty

champion has been appointed for each of the Group’s regulated entities and each entity has

implemented detailed policies and procedures which outline our commitment to the new requirements

and our approach to meeting the obligations and the spirit of the new Consumer Duty requirements.

PayPoint Plc Annual Report 2024 Strategic report

Governance

Financial statements Shareholder information

Corporate Governance Report continued

Diversity Statement in accordance with LR 9.8.6

Board Diversity

As at 31 March 2024

the Board comprises four male Non-Executive Directors (including the Chair of

the Board), three female Non-Executive Directors and two male Executive Directors. Although female

representation on the Board has increased during the year following the appointment of Lan Tu, the Board

has not yet met the Listing Rules gender diversity targets. In addition, none of the four leadership roles

specified in the Listing Rules are currently held by a woman. The Board has two Directors from a minority

ethnic background and therefore meets this Listing Rules diversity target.

The composition of the Board is kept under review by the Nomination Committee to ensure that the

Board has an appropriate balance of skills, knowledge and experience to support the business. Diversity

is a vital part of the continued assessment and the Board recognises the benefits of diversity among

its members. The Board has adopted a Board Diversity, Equality and Inclusion Policy, which sets out the

Board’s commitment to making progress towards achieving the FCA targets in the longer term.

Business Diversity

In line with our colleague Diversity, Equality and Inclusion Policy, the Board remains committed to

improving gender diversity at all levels. Members of the Executive Board

comprise four female and ten

male members, representing a gender split of 29% female and 71% male. The senior leadership team

(direct reports to the Executive Board) have a gender split of 51% female and 49% male. The gender split

for all colleagues is 58% female and 42% male.

In accordance with Listing Rule 9.8.6R(10), the prescribed numerical data on the ethnic background and

the gender identity of the Board and the Executive Board is set out in the tables below. For the purposes

of making these disclosures, the Company has collected this data by asking each Director or officer of the

Company to confirm their gender identity and ethnic background directly and entering the responses onto

the Company’s HR system.

Number of

Board members

Percentage of

the Board

Number of senior

positions on the

Board (CEO, CFO,

SID & Chair)

Number in

executive

management

Percentage

of executive

management

Men 6 67% 4 10 71%

Women 3 33% 0 4 29%

Number

of Board

members

Percentage

of the Board

Number of

senior positions

on the Board

(CEO, CFO, SID

& Chair)

Number in

executive

management

Percentage

of executive

management

White British or other White

(including minority-white groups) 7 78% 3 13 93%

Asian/Asian British 2 22% 1 – –

Black/African/Caribbean/Black British – – – 1 7%

1 31 March 2024 is the Company’s chosen reference date for the purposes of reporting against Listing Rule 9.8.6R(9).

2 Executive Board means ‘senior management’ for the purposes of the UK Corporate Governance Code 2018 (Provision 26) and

excludes the Company Secretary.

PayPoint Plc Annual Report 2024

Corporate Governance Framework

The Board provides effective leadership to the Group within a wider corporate governance framework with clearly defined roles and responsibilities as illustrated below. The governance framework supports the

Board’s strategic decision-making and scrutiny of performance, risk management, and progress towards objectives. It ensures there is appropriate accountability for delivery of the Company’s strategic aims, taking

due account of the interests of shareholders as well as our wider stakeholders.

The Board

The Board is collectively responsible for the long-term success of the Group and is accountable to the Company’s shareholders. The Board provides effective leadership by setting the Group’s strategic goals and overseeing

the efficient implementation of these aims in order to achieve sustainable growth. It monitors operational and financial performance against agreed objectives, whilst ensuring that the appropriate controls and systems exist

to manage risk. The Board ensures that the necessary financial resources and people are available within the business to achieve the strategic goals the Board has set. The Nomination, Audit and Remuneration Committees

support the Board in carrying out its responsibilities. The Board has approved a schedule of ‘the Matters Reserved to the Board’, being those decisions that will not be delegated and full details of which can be found on the

Company’s website www.corporate.paypoint.com.

Audit Committee

The key role of the Committee is to assist the board

in fulfilling its oversight responsibilities by reviewing

and monitoring the integrity of the Company’s

financial reporting to shareholders, the system of

internal controls and risk management, the internal

and external audit process and auditors, and the

processes for compliance with laws, regulations and

ethical codes of practice. Read more on page 94.

Cyber Security & Information

Technology Sub-Committee

The Cyber Security & Information Technology

Sub-Committee 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 (FRN: 608277)

• RSM 2000 Limited

4 (frn: 729928 & 715057)

• Handepay Limited

(FRN: 673564) • Park Card Services Limited

5 (frn: 900016#0

• Merchant Rentals Limited

3 (frn: 720500)

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 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.

3 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.

4 This is an authorised payment institution regulated by the FCA with permission to provide regulated payment services under the Payment Services Regulations

2017 and is also 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.

5 This is an Authorised Electronic Money Institution regulated by the FCA with permissions to issue electronic money (e-money) and provide payment services.

Executive Board

The Executive Board is led by the Chief Executive and comprises: the Chief Financial Officer, the Chief People Officer, the Customer Experience Director, the Managing

Director of Card Services, the General Counsel, the Chief Technology Officer, the Sales & Customer Life Cycle Director, the Client Services Director, the Chief Marketing

and Corporate Affairs Officer, the Corporate Finance Director, the Retail Propositions and Partnerships Director, the Parcel Services Director and the Managing Director

of Love2shop and Park Christmas Savings. 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 key role of the Nomination Committee is to

ensure there is a formal procedure for appointment

to the Board, ensure composition is regularly

reviewed, ensure plans are in place for orderly and

diverse succession for the Board and executive

team and to work with other board committees to

ensure the appropriate remuneration package is

offered to the Board. Read more on page 92.

Remuneration Committee

The role of the Committee is to ensure that

remuneration policy and practices of the Company

are designed to support strategy and promote

long-term sustainable success, reward fairly and

responsibly, with a clear link to corporate and

individual performance, having regard to statutory

and regulatory requirements; and executive

remuneration is aligned to Company purpose and

values and linked to delivery of the Company’s

long-term strategy. Read more on page 100.

Market Disclosure Committee

The Market Disclosure Committee oversees the

disclosure of information by the Company to ensure

that it meets its obligations under the Market

Abuse Regulations and the Financial Conduct

Authority’s Listing Rules and Disclosure Guidance

and Transparency Rules. Its members are the Chief

Executive, the Chief Financial Officer, Company

Secretary and the General Counsel.

ESG Working Group

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 management responsibility for ESG

matters and hears progress reports from the ESG Working Group (a working

party of the Executive Board comprising the Chief People Officer, the Head

of Risk and Internal Audit, the Chief Marketing and Corporate Affairs Officer,

the Head of Financial Control and others to progress ESG matters and TCFD

reporting through regular meetings). The Group met throughout 2023–24 and

progressed various aspects of TCFD reporting and ESG matters that were

considered and approved by the Executive Board and Board. The ESG Working

Group monitors performance against targets throughout the year and reports

performance to the Executive Board and Board.

PayPoint Plc Annual Report 2024 Strategic report

Governance

Financial statements Shareholder information

Division of roles and responsibilities

There is clear and effective division of roles and responsibilities of the Board as shown opposite:

Board leadership

Chair – Giles Kerr

Giles Kerr is responsible for the effective 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 sufficient and timely

consideration is 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 effective and complementary Board, and to facilitate the appointment of

effective and suitable members and Chairs of Board Committees;

• ensuring effective dialogue with shareholders, led by the Chief Executive, sharing feedback so that

members of the Board develop an understanding of the views of major investors; and

• 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 managing the Group’s business and for proposing and developing the

Group’s strategy and overall commercial objectives. He leads the Executive Board, the members of

which are set out on pages 80 to 81. 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 Chair is alerted to forthcoming complex, contentious or sensitive issues affecting

the Group;

• providing information and advice to the Chair and Nominations Committee in respect of succession

planning for membership of the Executive Board;

• leading investor dialogue activities; and

• acting as director of various subsidiaries of the Group.

Chief Financial Officer – Rob Harding

Rob Harding is responsible for all financial reporting, 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. Rob is also a chair and director of various subsidiaries of the Group and acts as Consumer

Duty Champion.

Executive Board

The Executive Board comprises the MD of each division and the heads of each enabling function

and are identified on pages 80 to 81. The Board’s approved Delegation of Authorities sets out the

Executive Board’s responsibilities which include:

• preparing the annual business plan and reforecasts in conjunction with the Chief Executive Officer

and Chief Financial Officer;

• approving the entering into of significant contracts consistent with the limits set out in the

delegation of authority;

• management of divisional/functional headcount and employment costs, in line with the approved

financial plan and in conjunction with Finance and HR partners; and

• assessing employee performance and awarding bonuses in accordance with scheme rules and in

conjunction with the Chief People Officer.

PayPoint Plc Annual Report 2024

Constructive challenge and independent oversight

Senior Independent Director – Rakesh Sharma

Rakesh Sharma supports the Chair in his role by acting as a sounding board for the Chair and a trusted

intermediary for other Directors. His other main responsibilities include:

• chairing the Nomination Committee when it is considering succession to the role of Chair of

the Board;

• Chairing the Remuneration Committee;

• meeting with the Non-Executive Directors at least once a year to appraise the Chair’s performance

and on such other occasions as are deemed appropriate;

• being available to shareholders if they have concerns where contact through the normal channels

of the Chief Executive, Chief Financial Officer or Chair has failed to resolve or for which such

contact is inappropriate; and

• having sufficient contact with major shareholders to obtain a balanced understanding of their issues

and concerns.

Independent Non-Executive Directors – Gill Barr, Rosie Shapland, Ben Wishart,

Guy Parsons and Lan Tu

The Independent Non-Executive Directors bring a strong independent element to the Board and

provide constructive challenge and support on strategic and governance matters. 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 Chair held meetings with the Non-Executive Directors without the presence of

the Executive Directors. There were no unresolved concerns about the running of the business.

Board support

Company Secretary – Indigo Corporate Secretary Limited

Indigo Corporate Secretary Limited was appointed as Company Secretary to the Board and all its

Committees in December 2023. Julia Herd, ACG, on behalf of Indigo, provides advice and assistance

to the Board to ensure good governance practices, compliance with company law, Listing Rules,

Disclosure Guidance and Transparency Rules and the Market Abuse Regulations, and the smooth

running of the Board and its Committees. Her other responsibilities include:

• supporting the Board and Committee Chairs in setting the agendas and ensuring appropriate

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 an annual internal Board and Committee evaluation or facilitating an external review

as appropriate;

• membership of the Market Disclosure Committee of the Board; and

• acting as secretary to the subsidiaries.

PayPoint Plc Annual Report 2024 Strategic report

Governance

Financial statements Shareholder information

Board activities

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.

A Board strategy session was also held in September 2023.

The Board is updated on progress against the strategic plan and any new initiatives to grow and

develop the PayPoint Group.

The Chair sets the agenda for each Board meeting and ensures that adequate time is available for

discussion of all agenda items. He ensures informed decisions are reached in an effective 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 advisers are held when necessary to aid the

Board’s decision-making process. The table that follows shows the key areas of Board activity during

the year ended 31 March 2024.

Strategy and business review

• One scheduled strategy session followed by

progress reviews throughout the year.

• Regular business and performance updates

across all divisions.

• Received regular updates on the integration

of Love2shop.

Internal control and risk management

• Assessed the IT infrastructure and cyber risks

generally and specifically.

• Assessed the effectiveness 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 affect the

business, financial condition or operations of

the Group.

Financial

• Approved half-year and full-year financial

statements and quarterly trading updates.

• Approved interim dividends and

recommended the final dividend to be paid to

shareholders during the financial year ended

31 March 2024.

• Reviewed management presentations to

analysts for the full and half-year results.

• Considered and approved the three-year

plan for the financial years ending 31 March

2025–27.

• Reviewed Group forecasts and scrutinised

the built-in risks and opportunities.

• Received monthly management accounts.

• Received management reports.

Governance

• Approved the appointment of the Chief

Financial Officer and Non-Executive Director.

• Approved the fees for the Non-Executive

Directors.

• Approved the 2023 Notice of Annual

General Meeting.

• Reviewed and approved the Board policy on

Diversity, Equality and Inclusion.

• Reviewed investor feedback from the full and

half-year roadshows.

• Approved the Modern Slavery Statement.

• Reviewed the progress of the ESG

Working Group.

• Considered the feedback received from

the employee fora when making decisions

regarding working patterns, engagement

surveys and ESG.

• Discussed feedback from the external

effectiveness review.

• Carried out a performance evaluation of the

Board and its Committees.

• Approved revisions to the terms of reference

of the Audit, Remuneration and Nomination

Committees and the Cyber Security and IT

Sub-Committee.

• 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

• Approved the organisation restructure.

• Reviewed the Group health and

safety reports.

• Discussed the annual people update

delivered by the Chief People Officer.

• Received regular updates on employee

forum matters from Gill Barr, Non-Executive

Director, the appointed Board representative

for the employee forum.

• Discussed the composition of the Executive

Board and reviewed succession planning.

PayPoint Plc Annual Report 2024

Induction and training

On joining the Board, all new Directors receive a full, formal and tailored induction. Meetings are held

with each member of the Executive Board and other senior management in the business and external

advisers as appropriate. The induction includes the provision of relevant current and historical information

about the Company together with applicable business policies. In addition as part of their induction new

Directors are provided with a number of retail site visits with Sales teams to better acquaint themselves

with PayPoint products and services and to receive first hand customer feedback. 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.

This year’s induction programmes included:

• meetings and introductions with the Board of Directors, Executive Board and senior management;

• operational management and Group services presentations;

• introductions with colleagues across the Company;

• overview of customer service journey and listening to calls in the Retail Service Hub; and

• a day in the field to see PayPoint, Collect+ and Handepay activity in stores.

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 affect

their roles both on the Board and on the Board

Committees. Experts and advisers 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.

Members of the Executive Board receive

training on site from external providers. During

the period data management, cyber risk, IT

and outsourcing and payments training was

provided. In addition a cyber security exercise

was undertaken by an external provider.

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.

PayPoint Plc Annual Report 2024 Strategic report

Governance

Financial statements Shareholder information

Performance evaluation of the PayPoint Board and its Committees

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. This year’s annual

Board effectiveness review was facilitated externally by Fidelio Partners Board Development &

Executive Search Ltd (‘Fidelio’), an independent specialist consultancy. A competitive tender process

was undertaken, which involved the Chair of the Board and Board Members meeting with a short list

of providers and giving feedback to the Board. Fidelio had no previous connection with the Company.

The Board was satisfied that the reviewer was suitably qualified and experienced to conduct the

effectiveness review and that Fidelio followed the principles set out in the Code of Practice for

independent reviewers.

The review included: one-on-one interviews with each Board member and individual meetings with two

members of the Executive Board; a quantitative survey undertaken by Board members, a review of the

recent Board and Committee papers and governance materials; and observation of the January 2024

Board meeting.

The Fidelio report concluded that the Board and its Committees continue to be effective. A discussion of

the Board effectiveness review report and its recommendations, as well as the Board’s current strengths

and challenges took place at the March 2024 Board meeting. Following the Board’s discussion a specific

action plan has been developed and was agreed covering the following themes:

1. ensure effective, well considered Board discussion on key issues;

2. continue to align Board composition to the needs of PayPoint;

3. make sure Board members are comfortable with discussions on risk and strategy;

4. continue to increase Committee effectiveness;

5. develop Board oversight of, and contribution to, shareholder and stakeholder engagement;

6. continue focus and guidance on the people agenda; and

7. provide a focused Board learning programme.

Progress against the action plan will be reviewed on a regular basis by the Nomination Committee during

the year ahead.

Chair’s Performance Review

In accordance with the UK Corporate Governance Code, Rakesh Sharma, as Senior Independent

Director, led a review of the Chair’s performance by the Directors. The review concluded that the

Directors were satisfied with the Chair’s performance and that he continues to operate effectively.

Individual Directors’ Performance Reviews

The individual directors’ performance reviews were carried out by the Chair during the year through

a continual review process, which included having individual conversations with the directors on

their performance and contribution to the Board.

PayPoint Plc Annual Report 2024

Progress against the 2023 internal evaluation output

Set out below is the progress made against the actions identified through the 2023 internal effectiveness review of the Board and its Committee undertaken by the Chair, supported by the Company Secretary, via a

questionnaire circulated to each Director for their views on the performance of the Board and its Committees.

Key issues identified Proposed action plan Progress during the year ended 31 March 2024

Challenging audit process and significant

workload and resource required from both

the auditors and the Group.

Earlier and more detailed planning, earlier audit resource, strengthening the

finance team and greater efforts from auditors and Plc to identify potential

audit challenges and their remedy earlier.

New auditors appointed during the year. Additional resourcing for finance was

provided at Welwyn Garden City and Haydock. Additional time was allowed to

complete the audit and further audit resources applied.

General risk and controls reporting needs

strengthening and greater challenge from

risk function needed.

Appointment of new Head of Risk and Internal Audit. As part of the organisational restructure that commenced in March 2024, the

risk function was restructured to create a new Head of Risk, Compliance and

Internal Audit position.

In addition, during the year work commenced to make the risk framework more

robust and consistent across the Group, including Love2shop. This enabled

greater support and challenge to ongoing operational activities, project delivery

and strategic risks.

Board should improve wider engagement

with management and staff.

NEDs should attend employee fora and a series of business workshops was to

be added to the Board calendar giving added exposure to management team.

During the year two Non-Executive Directors attended employee fora and

business workshops took place during the year. For more information see

page 83.

Resource constraints given the scale of

projects in the past 12 months having an

impact on timely reporting to the Board.

Better recognition from within the Executive of the importance of timely report

delivery and better resourcing to address constrained areas.

Timely reporting has been a focus during the year and continues to be a priority.

PayPoint Plc Annual Report 2024 Strategic report

Governance

Financial statements Shareholder information

Nomination Committee responsibilities

The Committee’s key role is to ensure that the Board has the appropriate skills, knowledge

and experience to operate effectively 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 business. The Committee

identifies and recommends to the Board candidates to fill Board vacancies based on merit

and objective criteria, including diversity factors, and ensures that appointment processes

are formal, rigorous and transparent. The Committee also oversees the development of

a diverse pipeline for executive succession. The Chairman invites the Chief Executive to

attend its meetings together with the Chief People Officer 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.

Membership and attendance

Nomination Committee Report

We are focused on

ensuring the Board

has the right skills

and experience to

support the business

to deliver our strategy.

Board composition and

succession planning

will continue to be an

important focus area

for the Committee in

the year ahead.”

Giles Kerr

Chair, Nomination Committee

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 2024.

The Committee met three times during the year.

The key areas of focus included:

• the appointments of Rob Harding and Lan Tu

as Directors;

• the proposed extension of the Chair’s term

of office;

• reviewing the directors’ suitability for re-election,

including an assessment of their independence,

their contribution to the Board and the time they

are able to commit to their duties in accordance

with the requirements set out in the CG code; and

• the annual review of the Committee’s

effectiveness and terms of reference.

Following each Committee meeting, a summary of

the Committee’s activity is provided to the Board

together with any recommendations.

Board changes

I am delighted to welcome Lan Tu to the Board.

Lan is an experienced Non-Executive Director

and is currently, amongst other roles, senior

independent director of Shawbrook Group plc and

vice-chair of the College Council at King’s College

London University. Lan has had a career in senior

roles within financial services firms, including

the payments industry. She possesses broad

experience in board and committee roles.

The Board also welcomed Rob Harding as an

Executive Director in September 2023. Rob, who

joined the Company as Chief Financial Officer in

August 2023, replaced Alan Dale who retired from

the Board in September 2023.

During the year the Committee has considered

the orderly succession planning for the Board,

including the changes noted on page 76. This will

continue to be a key focus for the year ahead,

including succession planning for the role of the

Chair and the development of a diverse Board.

Giles Kerr (Chairman)

Appointed: 20 November 2015, assuming chairmanship in May 2020

3/3

Gill Barr

Appointed: 1 June 2015

3/3

Rosie Shapland

Appointed: 2 October 2020

3/3

Ben Wishart

Appointed: 14 November 2019

3/3

Rakesh Sharma

Appointed: 12 May 2017

3/3

Guy Parsons

Appointed: 23 March 2023

3/3

Lan Tu

Appointed: 15 March 2024

1/1

1 Lan Tu attended the one Nomination Committee meeting held since her appointment on 15 March 2024.

PayPoint Plc Annual Report 2024

The Board unanimously agreed to undertake

a consultation with major shareholders on the

recommendation that the Chair’s appointment

should be extended by one additional three-

year term, subject to annual re-election.

Consultation on the proposal with the Company’s

major shareholders was undertaken and the

consolidated feedback was positive in nature.

Consequently, the Nomination Committee’s

recommendation that the Chair be reappointed to

the Board is proposed to shareholders for approval

at the forthcoming annual general meeting.

Diversity

The Board’s policy on diversity, equity and inclusion

(DE&I), 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. This year the Committee

recommended an amendment to the Board’s

DE&I policy to extend the principles to cover the

membership of all of the Board’s Committees. The

Board policy addresses the specific requirements of

the UK Corporate Governance Code in relation to the

Board and its Committees and the recommended

targets set out by the FTSE Women Leader’s Review,

Sir John Parker and the Listing Rules.

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 effective, taking account of

diversity in the manner described above.

Responsibility has been delegated to our Chief

People Officer for the operation of the diversity

and inclusion policy across the rest of the Group

and ensuring its maintenance and review.

Efforts to increase diversity in the senior

management pipeline towards Executive Board

positions continue to be supported, and the

development of diversity in senior management

roles within the Group is encouraged.

Chair succession planning

During the year, the Senior Independent

Director led a discussion at the Nomination

Committee on succession planning for the

Chair’s role, without the Chair being present.

The Committee agreed that the Chair

continued to demonstrate strong leadership

and commitment and promoted a culture of

inclusivity and openness, encouraging robust

debate amongst the Board. The Chair has

established a strong working relationship with

the Chief Executive and management, which

the Committee considers to be of particular

value as management continues to focus on

achieving the Group’s £100m EBITDA target

by the end of FY26.

The Committee notes that the Chief Executive

has been in post for four years and during that

time has met or exceeded performance targets

each year and has over seen a highly successful

transformation of the business away from its

dependence on cash bill payments to a broadly

based payments and e-commerce platform.

The Committee wished to continue with the

successful combination of Chair and Chief

Executive that has over seen this period of

excellent progress in the business.

As part of the deliberations the Committee

was mindful of the nine-year tenure period

recommended for Chairs and the flexibility

permitted to extend this period for a limited

time to facilitate effective succession

planning as set out in the 2018 UK Corporate

Governance Code. Having only been appointed

as Chair in May 2020, this would be Giles

Kerr’s second three-year term as Chair. The

Committee considered the overall length of the

Chair’s service and it was felt that extending the

Chair’s appointment for an additional three-

year term would ensure orderly and effective

succession planning for the Board and be in

the best interests of the Company by providing

leadership stability to support the delivery of

the Group’s strategy.

As at the date of this report, following the

appointment of Lan Tu as an independent Non-

Executive Director in March 2023, PayPoint

Plc has three female members on the Board,

representing 33.33% of Directors.

The Board will also consider female appointments

to the senior Board positions at the next available

opportunity. PayPoint Plc meets the targets set

out in the Parker Review and the Listing Rules in

respect of ethnic diversity on UK boards.

For more information on our diversity, equity and

inclusion policy please refer to page 47.

Appointments process

Teneo People Advisory (Teneo), which has no

connection with PayPoint or any of its Directors, was

selected to carry out the search for the appointment

of the new Non-Executive Director. Teneo is

committed to DE&I, with their work underpinned by

a conviction that diverse and inclusive teams create

more value and deliver better results for businesses

and their stakeholders. Two out of the five

shortlisted candidates for the role were female with

the successful candidate selected based on merit.

The search and selection process for the

appointment of the Chief Financial Officer

was undertaken during the financial year ending

31 March 2023 and was reported in the 2023

annual report and financial statements.

Directors’ time commitment and

length of service

All Directors are aware of the need to allocate

sufficient time to their Board role in order to

discharge their responsibilities effectively.

The Nomination Committee monitors meeting

attendance, length of service and the extent

of each Director’s external commitments on an

ongoing basis.

During the year, I received approval from the Board

to accept the position as a non-executive director

of Halma Plc. The Board noted the proposed time

commitment required for this position and was

satisfied that I would continue to have sufficient

time to fulfil my duties as PayPoint’s Chair.

All Directors who are not stepping down, in

accordance with the Code, will be offering

themselves for re-election or election, as relevant,

at the annual general meeting on 1 August 2024.

The terms and conditions of appointment of Non-

Executive Directors and the service contracts

of Executive Directors will be 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.

External interests that have been declared are recorded

in our register of interests and this was reviewed and

approved by the Committee at its meeting in March

2024. 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 their experience with other

directorships brings significant benefits to the Board.

All key external roles are set out within the Directors’

biographies on pages 78 to 79. Non-Executive

Directors are required to obtain the approval of the

Chair 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.

This Nomination Committee Report was approved

by the Committee on 12 June 2024.

Giles Kerr

Chair, Nomination Committee

12 June 2024

PayPoint Plc Annual Report 2024 Strategic report

Governance

Financial statements Shareholder information

Audit Committee Report

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 2024. 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 auditor,

PricewaterhouseCoopers LLP (“PwC”), who were

appointed during the year following a formal

tender process, as described in last year’s report.

The Committee held four scheduled meetings

during the year, with meetings timed to coincide

with the financial and reporting cycles of the

Company. In addition, the Committee held two

further meetings to consider progress with the

audit of the 2023 financial statements, in particular

in connection with the statutory accounting and

audit work related to the acquisition of Love2shop.

The Committee reviewed and discussed the final

report from the external auditor and recommended

the 2023 Annual Report and Accounts to the

Board prior to their approval. In addition, the

Committee met with both the Company’s outgoing

and incoming external auditors and the Head of

Risk and Internal Audit during the year without

management being present.

The Committee also met on 23 May 2024 to

review the 31 March 2024 Annual Report and

Accounts and the preliminary findings of the

external auditor and again on 7 June to receive the

auditor’s final reporting.

In the period since our previous report, the

work undertaken by the Audit Committee was

as follows:

Financial reporting and policies

• Reviewed the annual and interim

financial statements.

• Considered significant accounting policies,

financial reporting issues, judgements

and estimates. In particular the reassessment

of the Group’s Cards division cash generating

units, and of the description and analysis of

cash and cash equivalents and restricted funds

held on deposit.

Audit Committee responsibilities

The Committee’s key role is to support the Board in fulfilling its responsibility for oversight of 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 assessing the

relationship with the external auditor and their effectiveness, as well as reviewing the effectiveness

of the internal control and risk management framework of the business. Significant financial reporting

issues and judgements, together with any changes in accounting principles and policies, and any

material control recommendations 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 https://corporate.paypoint.com.

Membership and attendance

“The Committee has

continued to focus on

the integration of the

Love2shop business into

the Group’s financial

reporting and risk and

control framework and

has overseen the smooth

transition to our new

external auditor during

the year.”

Rosie Shapland

Chair, Audit Committee

Rosie Shapland (Chair)

Appointed: 2 October 2020, becoming Chair in December 2020

6/6

Gill Barr

1 June 2015

6/6

Rakesh Sharma

12 May 2017

6/6

Guy Parsons

23 March 2023

6/6

Ben Wishart

14 November 2019

6/6

Lan Tu

15 March 2024

1/1

1 The Audit Committee invites the external auditor to

attend each meeting, along with the Chief Executive,

Chief Financial Officer and Chair of the Board. Other

members of management attend as and when

requested. The Company Secretary acts as secretary to

the Committee.

PayPoint Plc Annual Report 2024

• Continued to focus on revenue recognition

during the year due to the level of transactions,

the complexity of the systems and the number

of different revenue streams, particularly

following the acquisition of Love2shop.

• Considered the findings set out in the reports

from the external auditor.

• 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 Group 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 Group would continue to be viable and

profitable over a three-year period.

• Considered the disclosures in the 2024 annual

financial statements in respect of the letters

before action and subsequent claims served by

Utilita and Global-365 (as further described on

page 173) relating to the matters addressed

by commitments made by PayPoint and

accepted by Ofgem in 2021 in resolution of its

competition concerns.

• Reviewed PayPoint’s treasury policy.

• Approved PayPoint’s annual tax strategy.

Internal audit

• Assessed the audit universe and audit cycle.

• Approved the annual audit plan for FY2024.

• Approved arrangements for including

Love2shop in the annual internal audit plan,

including bringing their internal audit function

in-house.

• Monitored resource requirements for internal

audit, including for Love2shop, and approved

the annual internal audit budget for FY2024.

• Monitored progress against the year’s

audit plan.

• Received copies of audit reports and

assessed key findings and implementation

of recommendations.

Risk management and internal controls

• Carried out a review of the Group’s insurance

coverage and approved amendments to

include Love2shop.

• Considered any reported frauds and

any concerns raised via the Company’s

whistleblowing process.

• Reviewed the Company’s risk management

framework and any changes thereto prior to

recommending the principal and emerging risks

for approval and discussion at the Board.

• Considered quarterly updates from the Head

of Risk and Internal Audit on the Group risks.

• Considered quarterly updates from the

Group’s Compliance Officer which provide an

overview of compliance within the Group’s

regulated entities.

• Received reports from the Chairman of the

Cyber Security and Information Technology

Sub-Committee. See page 98 for details on the

role of the Sub-Committee.

• Reviewed the results of the annual safeguarding

audit for Love2shop.

• Received updates on the implementation plans

for compliance with the HMRC SAO regime

following the acquisition of Love2shop.

Governance

• Considered the change of Auditor approved at

the 2023 AGM and approved their fees.

• Carried out an annual review of the Committee’s

terms of reference.

• Carried out reviews of the Board

Delegated Authority.

• Approved various policies including (but not

limited to) whistleblowing and non-audit

fees policy.

• Remained up to date with developments

following the BEIS consultation on restoring

trust in audit and corporate governance,

including the changes to the UK Corporate

Governance Code, particularly in relation to

internal controls.

Review of risk management

framework and internal controls

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 61 to 66.

As part of the integration of Love2shop during

the year, functional areas have been absorbed into

the equivalent PayPoint functions and policies and

supporting frameworks and procedures have been

updated to ensure consistency across the Group.

For the Group the following key procedures and

monitoring processes are in place to provide

effective 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 monitor that processes have been

correctly followed across the Group. Exceptions

are reported to the Audit Committee and Cyber

Security and IT Sub-Committee.

• On behalf of the Board, the Audit Committee

reviews fraud, anti-bribery and whistleblowing

– there were no instances of significant fraud,

whistleblowing or identified instances of bribery

or corruption within the Group during the year.

• During the year the Environmental, Social and

Governance (‘ESG’) Working Group continued

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 2023 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 effectively 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.

• The Audit Committee reviews key risks

presented by the Head of Risk and Internal

Audit at each meeting to ensure management

effectively implements preventative and

detective controls to monitor and mitigate risk.

• The Cyber Security and IT Sub-Committee reviews

key IT and cyber risks to ensure the Group’s IT

function effectively implements preventative and

detective controls to monitor and mitigate risk.

• The Chair of the Sub-Committee reports

to the Committee after each of the Sub-

Committee meetings.

On the basis of the above procedures and

monitoring processes, the Board, supported by the

Audit Committee, has reviewed the effectiveness

of the PayPoint risk management and internal

control systems. The Directors confirm that the

processes described have been in place during the

financial year and up to the date of the approval of

the annual report and accounts.

Under the leadership of the new Chief Financial

Officer, the Group’s risk management processes

and framework are under review. As part of the

review and the organisational restructure, which

completed in April 2024, the risk and internal

audit and compliance functions have been

amalgamated and a new Head of Risk, Compliance

and Internal Audit appointed. This has provided

an opportunity to enhance the internal audit

function’s understanding of the Group’s regulatory

requirements, whilst providing the knowledge and

expertise to support the audit review process and

will enable a more integrated approach to internal

audit. Oversight of the implementation of the new

risk management reporting framework will be a

key activity for the Audit Committee during the

year ahead.

PayPoint Plc Annual Report 2024 Strategic report

Governance

Financial statements Shareholder information

Audit Committee Report continued

Review of effectiveness of internal controls and risk management

The Audit Committee and Cyber Security and IT Sub-Committee support the Board with monitoring

risk management and internal control systems and reviewing their effectiveness. The Audit Committee

reviews effectiveness 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, as described on page 60. A standard risk assessment methodology

is applied across the Group to evaluate gross and residual risk and compare residual risk against

risk appetite.

External audit

In relation to the Group’s external audit, the Committee carried out the following activities during the year:

• Agreed the scope of the 2024 audit together with the fees and terms of engagement. Details of the

amounts paid to the external auditor for the audit and other services for FY24 are given on page 153

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 effectiveness 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 2023 Audit Quality Review Report,

regarding the overall quality of audit work provided by PwC for listed companies.

• Reviewed and monitored the independence of the external auditor and approved their provision of

non-audit services.

Significant judgements and critical estimates in relation to the financial statements

In preparing the financial statements for 2024, 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.

Significant financial judgements and critical estimates for the year ended 31 March 2024

How the Audit Committee addressed these significant financial judgements and critical estimates

Recognition of cash and cash equivalents and restricted funds held on deposit

(Critical judgement)

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 retains retailer partners’ deposits as

security for those collections. Following the acquisition of Love2shop, it also holds in trust, gift card voucher

deposits on behalf of agents, cardholders and redeemers and prepay savers’ cash on behalf of savers.

A critical judgement in this area is whether each of the above categories of funds and restricted funds

held on deposit, are recognised on the consolidated statement of financial position, and whether they are

included in cash and cash equivalents for the purpose of the statement of consolidated cash flows. 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;

(d) whether the Group bears the credit risk.

Management have also reviewed and proposed changes to the presentation of cash and cash equivalents

and restricted funds held on deposit, these proposed changes required a representation of the prior year

notes to the financial statements to provide greater clarity and additional analysis.

The Committee reviewed and approved the accounting policy on cash and cash equivalents and

considered management’s approach to the treatment of restricted funds held on deposit.

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.

For restricted funds held on deposit, the Committee reviewed and agreed with management’s decision

to categorise cash and cash equivalents and restricted funds held on deposit separately. This was after

considering the legal status of the trust, who has access to the interest and the terms and conditions

around movement of funds.

The Committee concurs with management’s proposed presentational changes to cash and cash

equivalents and restricted funds held on deposit.

PayPoint Plc Annual Report 2024

Significant financial judgements and critical estimates for the year ended 31 March 2024

How the Audit Committee addressed these significant financial judgements and critical estimates

Cash Generating Units (CGU) for the Cards business (Critical judgement)

Following the agreement of a new partnership with Lloyds Banking Group’s “Cardnet” Division, as announced

in March 2024, management have reassessed the Group’s Cards business CGU’s as previously presented in

the financial statements. In doing so, they have also considered the operational interaction of the two entities

acquired in FY21 (Handepay and Merchant Rentals) and how their revenue streams are inextricably linked.

Management’s conclusion is that the Group’s Cards business should be considered a single CGU as cash

inflows from the various components are not largely independent of each other and the resources that

generate those cash flows are not separable. The lowest level of aggregation of assets that generate

largely independent cash flows is the Cards business.

The Committee reviewed management’s assessment of the cards business CGU. This included:

• A review of the business model

• Assessment of cash inflows

• Historic approach

• Internal management reporting

• Relevant technical guidance

The Committee concurs with management’s conclusion that the Group’s Cards business should be

treated as one CGU.

Valuation of defined benefit pension scheme obligations (Critical estimate)

The Group has an obligation to pay pension benefits to members of the defined benefit pension scheme

in its Love2shop segment. The present value of the obligations associated with these future benefits

depends on the assumptions selected for several factors. Management selects appropriate actuarial

assumptions for each factor, based on historical and current trends and with input from a qualified actuary.

The Committee reviewed and challenged the assumptions used by management in valuing pension

liabilities, including discount rates, inflation and mortality rates and related sensitivities. The Committee

concurs with the assumptions adopted by management in valuing pension liabilities.

Other financial reporting matters for the year ended 31 March 2024 How the Audit Committee addressed these financial reporting matters

Distributions and return of capital to shareholders

For the year ended 31 March 2024 management presented proposals for distributions (dividends and

share buy-backs).

Having regard to the distributable reserves available to the Company, the Committee reviewed and

reported to the Board on management’s proposals for a final dividend for the financial year ended

31 March 2024 of 19.2p per share along with a share buyback programme of £20m over the next 12

months. The Committee assessed the level of distributable reserves along with the impact of a stress test.

The Committee made a recommendation to the Board to approve management’s proposals.

Items to be presented as adjusting items

Adjusting items consist of exceptional items, amortisation of intangible assets arising on acquisition and

movements on convertible loan notes. Management proposed to treat these items as adjusting items in

the consolidated statement of profit or loss, as they do not reflect the underlying operational performance

of the Group.

The Committee assessed whether the reporting of those items as adjusting, was in line with the

Group’s accounting policy, and that sufficient disclosure was provided in the financial statements.

The Committee concurs with management’s view and considered the disclosures to be appropriate

and clear.

Viability and going concern

Each year the Directors are required to consider the Group’s viability over a three-year period. This is

consistent with the Group’s strategic planning period. Additionally, management carry out an assessment

of the principal risks and uncertainties.

For the purposes of assessing the going concern assumption, cash flow forecast scenarios are prepared

by management 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.

The Group’s viability has been further tested by applying a number of severe but plausible downside

scenarios, performing a reverse stress test and considering mitigating actions and the impact of such

scenarios on the Group’s future financial position.

Based on a satisfactory assessment management has concluded that it is appropriate to prepare the

financial statements on a going concern basis and that they have a reasonable expectation the Group

will be able to continue in operation over the three-year assessment period.

The Committee reviewed management’s assessment of going concern, the viability statement and the

proposed disclosures for the Annual Report and Accounts.

The review included consideration of forecast cash flows, relevant sensitivities and the impacts of these on

the Group’s cash position while also taking into account the Group’s financing facilities.

The Committee reviewed and discussed the various scenarios and the potential mitigations, and

considered the results of the reverse stress tests.

The Committee reviewed the disclosures for both going concern and viability to ensure they are in line

with the FRC recommendations.

The Committee concurs with management’s conclusion that they have a reasonable expectation that

the Group will be able to continue in operation, remain solvent and meet its liabilities as they fall due

over the three-year assessment period.

The Committee made a recommendation to the Board to approve the going concern basis of

accounting for the financial statements and the viability statement drafted by management.

PayPoint Plc Annual Report 2024 Strategic report

Governance

Financial statements Shareholder information

Audit Committee Report continued

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 effective business continuity plans.

• Oversee cyber security training

and awareness.

The Sub-Committee comprises: three Non-

Executive Directors (Rakesh Sharma, Lan

Tu and Ben Wishart as Chair of the Sub-

Committee), the Chief Financial Officer and the

Chief Technology Officer (who is a member of

the Executive Board). 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.

External audit

The effectiveness 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 2024, the significant audit risks

identified were: impairment of goodwill relating

to the Handepay and Merchant Rentals CGU’s;

valuation of pension liabilities; management

override of controls; and fraud in revenue

recognition. An elevated risk of the classification

of exceptional items was also identified.

The Committee reviews and challenges the work

undertaken by the auditor on these matters. An

assessment of the effectiveness 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 effectiveness

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, 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 and again at

the conclusion of the audit, the auditor provided a

statement of confirmation of independence to the

Board and the Audit Committee, which confirmed

that in their professional judgement PwC was

independent within the meaning of regulatory and

professional requirements and the objectivity of

the partner and audit staff remained unimpaired.

Following a full and competitive tender process, as

described in last year’s report, PwC was appointed

as the new auditor of PayPoint Plc at the AGM

in September 2023. The lead audit partner is

David Beer. The Committee reviews each year

the reappointment of the current external auditor

and makes a recommendation to the Board.

Based on the performance of the auditor, the

Committee believes that it is in the best interests

of shareholders to continue to recommend PwC

as the external auditor and a resolution for PwC’s

reappointment will, accordingly, be proposed

to shareholders at the forthcoming annual

general meeting.

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 ratio of non-audit fees to audit fees paid to

the auditor for the year was 3.6%, 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. There

were no non-audit fees received during the year

from KPMG.

Interactions with the Financial

Reporting Council

During the year, the Audit Committee Chair

received correspondence from the Financial

Reporting Council (FRC) following a review of the

Company’s Annual Report and Accounts for the

year ended 31 March 2023. The review into the

Annual Report raised no specific questions but

raised a small number of disclosure improvements.

These were discussed by the Audit Committee

Chair with management and PwC, as the incoming

auditor. The observations made by the FRC were

given full consideration by management when

preparing the financial statements for the year-

ended 31 March 2024 and additional disclosures

are included in this Annual Report and Accounts

where relevant to do so. The review conducted

by the FRC was based solely on the annual report

and accounts. The FRC’s review does not provide

assurance that the annual report and accounts are

correct in all material respects; the FRC’s role is to

consider compliance with reporting requirements,

not to verify the information provided and the

FRC accepts no liability for reliance placed

upon their review. The Audit Committee Chair

also received correspondence from the FRC

following their inspection of KPMG’s audit of the

Group’s financial statements for the year ended

31 March 2023.

PayPoint Plc Annual Report 2024

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

effective controls and help protect the Group.

Internal audit’s responsibilities include delivering

the annual internal audit plan, driving remediation

of audit issues, assessing effectiveness 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.

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 speak up in confidence 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. There were

no whistleblowing incidents during the year.

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 and its 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

also provided. Anti-bribery and corruption risk

management is discussed at Committee meetings.

Fair, balanced and understandable

The Committee has satisfied itself that the

PayPoint Plc 2024 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 122.

The Audit Committee Report was approved by

the Committee and the Board on 12 June 2024.

Rosie Shapland

Chair, Audit Committee

12 June 2024

PayPoint Plc Annual Report 2024 Strategic report

Governance

Financial statements Shareholder information

Directors’ Remuneration Report

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 www.corporate.paypoint.com.

The members of the Committee and their attendance at meetings are set out in the table below.

In addition to the members of the Committee, the Chief People Officer and the Company’s independent

adviser from FIT Remuneration Consultants LLP (‘FIT’), may attend and receive papers for each meeting.

The Company Secretary acts as secretary of the Committee. After each meeting, the Chairman of the

Committee reports to the Board on the matters discussed and recommendations and/or actions to

be taken.

Membership and attendance

The Committee continues

to ensure the clear linkage

of Executive Directors’

pay and performance

to the strategy and

enhancement of

shareholder value.”

Rakesh Sharma

Chairman, Remuneration Committee

Rakesh Sharma (Chairman)

Appointed: 12 May 2017

4/4

Guy Parsons

23 March 2023

4/4

Gill Barr

1 June 2015

4/4

Lan Tu

15 March 2024

1/1

Rosie Shapland

2 October 2020

4/4

Ben Wishart

14 November 2019

4/4

Giles Kerr

20 November 2015

4/4

Annual Statement

Dear Shareholders,

I am pleased to present our Directors’ Remuneration

Report for the financial year ended 31 March

2024 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 report is divided into three sections:

• This Annual Statement of the Remuneration

Committee Chairman for the year ended 31

March 2024, which summarises remuneration

outcomes for the year ended 31 March 2024

and the Committee’s proposed approach for

the year ending 31 March 2025.

• The Directors’ Remuneration Policy – (the

“Policy”), which presents the proposed revised

Policy, to be approved by shareholders at the

2024 Annual General Meeting (‘AGM’).

• The Annual Report on Remuneration,

which provides further detail on how the

Remuneration Policy was implemented in

the year ended 31 March 2024 and how the

proposed Policy will be implemented in the year

ending 31 March 2025.

Committee activities during the year

The Committee met 4 times during 2023/24.

The main Committee activities during the year

(full details of which are set out in the relevant

sections of this report) included:

• Approving the 2022/23 Directors’

Remuneration Report.

• Agreeing Executive Director base salary

increases from July 2023.

• Reviewing and agreeing the salary review

applied to the workforce below Board

level including the increases applied to the

Executive Board.

• Approving the release of the 2020 restricted

share plan awards for the Executive Board.

• Approving the vesting of the below Board 2020

and 2021 restricted share plan awards.

100

PayPoint Plc Annual Report 2024

• Agreeing the 2023 Restricted Share Plan awards.

• Agreeing the performance against targets and

payout for the 2022/23 annual bonus.

• Setting the performance targets for the

2023/24 annual bonus and bonus deferral levels.

• Considering the retention of the Chief

Executive Officer.

• Approving leaver treatments for relevant

senior executives.

• Carrying out an internal evaluation of

its performance and reviewing its terms

of reference.

Pay and performance for the year

ended 31 March 2024

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 2023/24

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. An assessment

of performance against bonus targets indicated

a bonus award for the year of 93% of maximum,

reflecting the delivery of a robust financial

performance with significant progress made in

the year in a number of key growth areas and the

delivery of strategic initiatives including growth

in open banking and digital payments, progress in

the delivery of ESG commitments, the integration

of Appreciate Group, launch of the next

generation terminal technology with the roll out

of PayPoint Mini, growth in the EVO and Lloyds

Cardnet estates and the securing of a major

strategic partnership with Lloyds Cardnet.

However, in light of work undertaken to streamline

the organisation and cost base, the Executive

Board unanimously proposed to waive any bonus

award in excess of target.

The Remuneration Committee was grateful for

the leadership shown in this regard and as such,

accepted the proposal which resulted in an

on-target (80% of maximum) bonus award to all

members of the Executive Board including the

Executive Directors.

The second tranche of the RSA awards granted in

2020 will vest in July 2024 and the first tranche

of the RSA awards granted in 2021 will vest in

August 2024, subject to the Committee being

satisfied in respect of performance against the

discretionary underpin.

The Committee is comfortable that remuneration

for the year ended 31 March 2024 is appropriately

aligned to the Company’s performance.

Discretion

No discretion has been exercised by the

Committee in respect of the year ended 31

March 2024 (albeit it should be noted that the

Committee accepted management’s proposal

to reduce the bonus out-turn for 2023/24 to an

on-target award) and is grateful for the leadership

shown in this regard.

Policy change and implementation

for the year ending 31 March 2025

Shareholders approved our current Policy at

the 2023 AGM with over 97% of votes cast in

favour. However, following a review of the current

Directors’ Remuneration Policy and following

discussions with PayPoint’s major shareholders,

the Remuneration Committee wishes to ensure

that Nick Wiles is sufficiently retained in the

business. While Nick currently receives annual

grants of Restricted Share Awards (RSAs) over

shares equal to 75% of salary, the Committee

has concluded that the current approach is not

sufficient to ensure Nick stays with the business

over the next three years. As such, the Committee

has consulted major shareholders and the main

representative bodies in respect of the grant

of a one-off LTIP to Nick Wiles over shares

equal to 150% of salary. Given that the current

Directors’ Remuneration Policy only permits the

grant of Restricted Share Awards, we are seeking

shareholder approval at the 2024 AGM to amend

the Remuneration Policy to introduce the ability to

grant a one-off LTIP to the Chief Executive Officer

in the year ending 31 March 2025. Details of the

proposed award, which is subject to shareholder

approval, are follows:

Nick Wiles will be granted a one-off LTIP award

over shares equal to 150% of salary immediately

following the 2024 AGM.

The LTIP will vest 3 years from grant subject to

continued service and the following performance

targets based on EBITDA performance in respect

of the year ending 31 March 2027:

FY EBITDA Vesting %

£100m 0% of awards vest

Between £100m

and £107m

Pro-rata between

0% and 100% of

awards vest

£107m or above 100% of awards vest

Dividend equivalents will be applied to the extent

that the LTIP award vests.

The LTIP will be in addition to his normal 2024 RSA

(expected to be granted in the normal 42-day

window following the announcement of results).

Post vesting, a two year holding period will apply.

Our standard leaver/change of control and malus/

clawback provisions will operate as per the

shareholder approved Directors’ Remuneration Policy.

Any shares which vest will count towards the

in-employment and post cessation shareholding

guidelines as relevant.

The majority of PayPoint’s largest shareholders have

confirmed their support for the retention award.

Noting the proposed LTIP award to the CEO

detailed above, a summary of how the Committee

intends to implement the remainder of the Policy

for the year ending 31 March 2025 is as follows:

• Salary – the salaries of the Chief Executive

and Chief Financial Officer will be increased by

2% to £508,595 and £326,400 respectively

from 1 July 2023, consistent with the minimum

increase applied to the general workforce and

below the average increase applied to the

general workforce of 3%.

• Pension – Executive Directors will continue

to receive a 5% of salary workforce-aligned

pension contribution.

• Annual bonus – The maximum annual bonus

opportunity will remain at 106% of base salary,

with the majority of the bonus opportunity

based on a profit measure and a minority

based on the achievement of net revenue and

strategic/ESG-based targets. Bonus deferral,

at 25% of any award for 3 years, will continue

to operate. Full retrospective disclosure of

the performance metrics, targets (which

are currently considered to be commercially

sensitive) and outturns will be provided in the

Directors’ Remuneration Report for the year

ending 31 March 2025.

• RSAs – The Committee intends to grant the

2024 RSAs at 75% of salary for Nick Wiles

and 62.5% of salary for Rob Harding. Awards

will normally vest after three years, subject to

continued service and the Committee being

satisfied in respect of performance against the

underpin, with a two year holding period.

• Malus and clawback – Provisions will continue

to operate for both the annual bonus, deferred

bonus and RSAs.

Conclusion

I hope you are supportive of our approach to

Policy implementation for the year ending

31 March 2025 which is a continuation of our

considered approach to remuneration at PayPoint,

and that you will therefore vote in favour of the

remuneration-related resolutions that will be

tabled at the forthcoming AGM.

Rakesh Sharma OBE FREng CPhys

Chairman, Remuneration Committee

12 June 2024

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PayPoint Plc Annual Report 2024 Strategic report

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Financial statements Shareholder information

Directors’ Remuneration Report continued

The Directors’ Remuneration Policy

This part of the Directors’ Remuneration Report sets out the proposed Director’s Remuneration Policy

(‘Policy’) for the Group. This Policy will be put to shareholders for approval in a binding vote at the 2024

AGM and if approved it will be effective from that date. The Remuneration Committee’s current intention

is that the revised policy will operate for the three-year period to the 2027 AGM.

Policy scope

The Policy applies to the Chairman, Executive Directors and Non-Executive Directors.

Summary of Policy Change

Shareholders approved our current Policy at the 2023 AGM with over 97% of votes cast in favour.

However, following a review of the current Directors’ Remuneration Policy and following discussions

with PayPoint’s major shareholders as detailed in the Annual Statement, the Remuneration Committee

wishes to ensure that Nick Wiles is sufficiently retained in the business. While Nick currently receives

annual grants of Restricted Share Awards (RSAs) over shares equal to 75% of salary, the Committee has

concluded that the current approach is not sufficient to ensure Nick stays with the business over the

next three years.

As such, the Committee has consulted major shareholders and the main representative bodies in respect

of the grant of a one-off LTIP to Nick Wiles over shares equal to 150% of salary. Given that the current

Directors’ Remuneration Policy only permits the grant of Restricted Share Awards, we are seeking

shareholder approval at the 2024 AGM to amend the Remuneration Policy to introduce the ability to

grant the one-off LTIP to the Chief Executive Officer in the year ending 31 March 2025.

Consideration of conditions elsewhere in the Company

When making decisions on Executive Director remuneration, the Committee considers pay and

conditions across PayPoint. In particular, it is anticipated that salary increases for senior executives will

have regard to those of salaried employees as a whole.

Consideration of shareholder views

The Remuneration Committee maintains a regular dialogue with its major shareholders and when

determining remuneration, takes into account the guidelines of investor bodies and shareholder views.

The Committee continues to monitor trends and developments in corporate governance and market

practice to ensure the structure of the executive remuneration remains appropriate and commits to

undergo a shareholder consultation in advance of any material changes to the Policy.

Executive Directors’ remuneration

The table that follows summarises our policy on each element of the remuneration package for

Executive Directors.

Fixed

Element and link to strategy: Base salary

Takes account of personal contribution and performance against Company strategy.

Operation Opportunity Performance metrics

Reviewed annually, with account taken

of responsibility and skills, the individual

Director’s performance and experience,

pay for comparable roles and pay and

conditions throughout the Company.

Any base salary increases are applied

in line with the outcome of the annual

review and normal salary increases

will have regard to those of salaried

employees as a whole.

Salary increases will be limited to no

more than 15% a year, unless there is

an exceptional change in the size or

structure of the business which materially

changes the scope of responsibilities

(there will be no cap on salary levels for

new recruits or promotions to the Board,

or promotions within the Board).

The salary review

takes into account

individual and Company

performance.

Element and link to strategy: Pension

Provides market appropriate benefits.

Operation Opportunity Performance metrics

The Company makes contributions

to personal pension plans or cash

allowance in lieu of pension.

In line with the general workforce

(as a percentage of salary).

None.

Element and link to strategy: Benefits

Provides market appropriate benefits.

Operation Opportunity Performance metrics

Benefits may include, but are not limited

to car allowance, health insurance and

employee share plans.

In certain circumstances, the Committee

may also approve the provision of

additional allowances relating to the

relocation of an Executive Director and

other expatriate benefits to perform his

or her role.

All reasonable business related expenses

will be reimbursed (including any tax

due thereon).

Benefits vary by role and individual

circumstances and are reviewed

periodically. Benefits will not normally

exceed 15% of salary.

The Committee retains discretion to

approve a higher cost in exceptional

circumstances (e.g. relocation) or in

circumstances where factors outside

the Company’s control have changed

materially (e.g. increases in insurance

premiums).

None.

102

PayPoint Plc Annual Report 2024

Variable

Element and link to strategy: Annual bonus and Deferred Annual Bonus Scheme (‘DABS’)

Rewards delivery of the Group’s annual financial and strategic goals and supports retention.

Operation Opportunity Performance metrics

The Remuneration Committee

reviews and agrees measures,

targets and weightings at the

beginning of each financial year.

At the end of the year, the

Remuneration Committee

determines the extent to which

targets have been achieved.

Under the DABS at least 25% of any

annual bonus award is deferred into

conditional share awards, deferred

cash or nil-cost options for at least

three years, subject to continued

employment.

Dividends accrue on deferred

awards as additional share

entitlements over the deferral period

to the extent that awards vest.

Awards are subject to clawback and

malus provisions (see notes to the

Policy table).

150% of salary

A minority of

the bonus would

be payable for

achieving threshold

performance.

Where appropriate,

a sliding scale

between threshold

and maximum

performance will be

used to determine

the payout under

each metric.

The majority of the award will be based on

financial targets.

A minority of the award may be based

on strategic/personal/ESG targets. The

Remuneration Committee reviews and agrees

targets at the beginning of each financial year

and may subsequently adjust those targets

as detailed in the notes to this table.

The Remuneration Committee also has the

discretion to adjust the formulaic bonus

outcomes both upwards (within the plan

limits) and downwards, to ensure that

payments are a true reflection of performance

of the Company over the performance period,

e.g. in the event of unforeseen circumstances

outside of management control. Any use of

discretion will be explained in the respective

Annual Report on Remuneration.

Element and link to strategy: Restricted share awards

Drives sustained long-term performance, aids retention and aligns the interests of Executive Directors

with shareholders.

Operation Opportunity Performance metrics

Awards will normally vest on the

third anniversary of grant.

Once vested, awards may not be

sold until at least five years from

the grant date.

Dividends may accrue as

additional share entitlements

over the vesting period and any

holding period to the extent that

awards vest.

75% of salary. Although no formal performance

measures apply to RSAs, the extent to

which an award vests may be reduced by

the Committee if a discretionary underpin

assessed to the end of the financial year

preceding the date of vesting is not

achieved. In addition, the Committee

may reduce the extent to which an award

vests if it believes this better reflects the

underlying performance of the Company

over the relevant period.

Element and link to strategy: Long Term Incentive Plan award

To aid the retention of the CEO while ensuring his interests are aligned with shareholders.

Operation Opportunity Performance metrics

Awards will normally vest on the third anniversary

of grant.

Post vesting, a two year post-vesting holding period

will operate.

Dividends may accrue as additional share entitlements

over the vesting period and any holding period to the

extent that awards vest.

150% of salary

one-off award for

the CEO in the year

ending 31 March

2025.

Sliding EBITDA

targets.

Element and link to strategy: Shareholding guidelines

Encourages a long-term focus and aligns the interests of Executive Directors with shareholders.

Operation Opportunity Performance metrics

Shareholding guidelines require Executive Directors to

acquire a specified shareholding.

In employment: Executive Directors are required to

retain 50% of any share award acquired on vesting

(net of tax) until the guideline level is achieved.

Acquired holdings may be held by spouses or

dependent family members.

Post-employment: Executive Directors will need

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. Own shares purchased, shares acquired

through buyout awards and share awards granted

prior to the 2020 AGM will be excluded from the post

cessation guideline

200% of salary. N/A

1 The Committee’s current intention is that annual bonus potential for Executive Directors will continue to be capped at 106%

of salary (noting that this is below the 150% of salary permitted under the Policy). Reflecting the below-market annual bonus

maximum for Executive Directors, and as per past practice and as aligned to practice below Board, on-target bonus potential

will continue to operate at 80% of the maximum. However, noting that the on-target bonus is higher than typical, and maximum

potential is lower than market, should bonus potential be increased from 106% of salary to a more market aligned 150% of salary in

the future, the on-target bonus potential will be reduced to 50% of maximum in line with market norms.

2 Executive Directors leaving the employment of PayPoint would normally be required to self-certify annually in writing post-

cessation that they still hold the required shares as part of their termination agreement.

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PayPoint Plc Annual Report 2024 Strategic report

Governance

Financial statements Shareholder information

Directors’ Remuneration Report continued

Element and link to strategy: All-employee share plans

Encourage share ownership across all employees.

Operation Opportunity Performance metrics

Operation of an HMRC approved all-employee

share plan (currently a SIP).

Executive Directors may participate on the same

basis as all other eligible employees.

Up to the prevailing

HMRC approved

limits.

None.

Notes to the policy table

Clawback (aka recovery) and malus (aka withholding) provisions

Clawback and malus provisions operate based on the following triggers:

• Misconduct

• Material misstatement

• Error in calculation

• Serious reputational damage to the Company

• Corporate failure

• Insolvency

Shareholder approvals

At the 2024 AGM on 1 August 2024, the Company will be asking shareholders to vote on four separate

remuneration-related resolutions as follows:

• a binding vote on the amended Directors’ Remuneration Policy, which will, subject to shareholder

approval, become formally effective as at the date of the AGM;

• an advisory vote on the Directors’ Remuneration Report (excluding the Policy), which provides details

of the remuneration earned by Directors for performance in the year ended 31 March 2024 and how

we intend to remunerate Directors in the year ending 31 March 2025;

• a binding vote on amendments to the PayPoint Restricted Share Plan (to be renamed the PayPoint

Executive Share Plan) to create an omnibus shareplan. Following the Deferred Bonus Plan reaching the

end its 10 year life, the Company wishes to operate a single discretionary share plan to enable share

awards to be granted on consistent terms going forwards; and

• the renewal of the PayPoint plc Share Incentive Plan, which is an HMRC tax-advantaged

“all-employee” scheme, which is nearing the end of its ten-year life.

Use of discretion

The Remuneration Committee may exercise discretion in two broad areas for each element of remuneration:

• To ensure fairness and align Executive Director remuneration with underlying individual and Company

performance, the Committee may adjust upwards or downwards the outcome of any short-term or

long-term incentive plan payment within the limits of the relevant plan rules. Any adjustments in light

of corporate events will be made on a neutral basis, i.e. the intention of any adjustment will be that

the event is not to the benefit or detriment of participants. Adjustments to underlying performance

may be made in exceptional circumstances to ensure outcomes are fair, both to shareholders

and participants.

• In the case of a non-regular event occurring, the Committee may apply its discretion to ensure

fairness and seek alignment with business objectives. Non-regular events in this context include, but

are not limited to: corporate transactions; changes in the Company’s accounting policies; minor or

administrative matters; internal promotions and external recruitment and terminations. Any use of

discretion by the Committee during the financial year will be detailed in the relevant Annual Report

on Remuneration.

Performance measure selection

Profit and net revenue are normally the primary financial measures for the annual bonus plan. At the sole

discretion of the Remuneration Committee, exceptional items may be removed from operating profit and

revenue where the inclusion of such items would be inconsistent with fair measurement, and actual tax

may be adjusted to normalised rates if they are considered unsustainable. Performance targets relating

to the annual bonus plan are set from the Company’s annual budget, which is reviewed and signed off by

the Board prior to the start of each financial year. Targets are based on a number of internal and external

reference points. Targets are set to be stretching but achievable, with regard to the particular strategic

priorities and economic environment in a given year.

Strategic, personal and/or ESG targets for the annual bonus may be set each year based on the

Company’s prevailing strategic objectives at that time. Targets will be set on a measurable, quantifiable

basis where possible, but due to the nature of the objective, may require some subjective assessment.

In respect of the RSAs granted to Executive Directors, the Committee must be satisfied that PayPoint’s

underlying performance and delivery against its strategy and plans is sufficient to justify the level

of vesting having regard to such factors as the Committee considers to be appropriate in the round

(including revenue, earnings, share price performance and the delivery of the Company’s ESG strategy)

and the shareholder experience more generally.

In respect of the one-off LTIP to be granted to the CEO, subject to shareholder approval, sliding scale

EBITDA targets will be operated.

The Committee retains the discretion to alter the weighting, substitute or use new performance

measures for future incentive awards, if they are believed to better support the strategy of the business

at that time.

104

PayPoint Plc Annual Report 2024

Remuneration policy for other employees

PayPoint’s approach to annual salary reviews is consistent across the Group, with consideration given to

the level of experience, responsibility, individual performance and salary levels in comparable companies.

All UK employees are eligible to participate in the Company’s SIP. Senior managers participate in the

annual bonus scheme with the same profit measure as is set for the Executive Directors. Members of

the Executive Board and senior managers (c.15 individuals) are eligible to receive RSAs as part of their

reward package. Performance conditions are consistent for all participants, while award sizes vary by

organisational level. One-off RSA awards are made to other employees below the Executive Board who

are critical to the success of the business.

Non-Executive Director remuneration

The remuneration of the Non-Executive Directors is within the limits set by the Articles of Association.

Non-Executive Directors do not participate in any bonus plan or share incentive programme operated by

the Company and are not entitled to pension contributions or other benefits provided by the Company.

Element and link to strategy: Fees

To attract and retain Non-Executive Directors of the highest calibre with broad commercial and other

experience relevant to the Company.

Operation Opportunity Performance metrics

Fee levels are normally reviewed

annually. The remuneration of

the Non-Executive Directors is

determined by the Board based

upon recommendations from the

Chairman and Chief Executive (or, in

the case of the Chairman, based on

recommendations of the Committee).

Additional fees are payable for

roles with additional responsibilities

including, but not limited to, the

SID and the Chairs of the Audit and

Remuneration Committees.

Fee levels are benchmarked against

sector comparators and companies

of similar size and complexity. Time

commitment and responsibility are

taken into account when reviewing

fee levels.

All reasonable business-related

expenses may be reimbursed

(including any tax due thereon).

Non-Executive Director fee increases are

applied in line with the outcome of the

annual fee review. Fees paid in respect

of the year under review (and for the

following year) are disclosed in the Annual

Report on Remuneration.

It is expected that Non-Executive

Director fee levels will generally be

positioned around the median but may fall

within the second and third quartiles. Any

increases will also have regard to general

increases in Non-Executive Directors’

fees across the market. In the event that

there is a material misalignment with the

market or a change in the complexity,

responsibility or time commitment

required to fulfil a Non-Executive Director

role, or specific recruitment needs,

the Board has discretion to make an

appropriate adjustment to fee levels.

Aggregate fees are also limited by the

cap contained in the Company’s Articles

of Association.

Continued strong

and objective

contribution.

Pay scenario charts

The charts below provide an illustration of the potential annual future reward opportunities for the

Chief Executive and Chief Financial Officer, and the potential split between the different elements of

remuneration under four different performance scenarios: minimum, target, maximum and maximum with

share price.

19%

Remuneration

(£’000)

£3.000

£1,500

£0

£2,500

£1,000

£2,000

£500

Minimum MinimumTarget TargetMaximum MaximumMaximum +

Share Price

Maximum +

Share Price

100%

£584

£368

£849

£918

£1,020

24%

43%

£1,778

£2,267

£2,840

50%

33% 26%

21%

33%

43% 40% 36%

38%

22%

20%

34%

10%

24%

40%

20%

Nick Wiles - Chief Executive Rob Harding - Chief Financial Officer

Share price appreciationAnnual bonus

RSA (+2024 LTIP for the CEO)

Fixed pay

100%

Assumptions:

Minimum

• Base salary as at 1/7/2024

• An approximated annual value of benefits

• 5% of salary pension

Target

Minimum remuneration plus:

• 80% of maximum on-target bonus (85% of salary)

• 75% of salary RSA for the CEO, 62.5% of salary RSA for the CFO

• 50% of max LTIP for the CEO (75% of salary)

Max

• Minimum remuneration plus:

• 100% of maximum on-target bonus (106% of salary)

• 75% of salary RSA for the CEO, 62.5% of salary RSA for the CFO

• 100% of max LTIP for the CEO (150% of salary)

Maximum + Share Price

• Share appreciation of 50% for the RSAs and CEO’s 2024 LTIP award

For simplicity, the values of any SIP awards are excluded.

105

PayPoint Plc Annual Report 2024 Strategic report

Governance

Financial statements Shareholder information

Directors’ Remuneration Report continued

Approach to recruitment remuneration

External appointment

In the cases of hiring or appointing a new Executive Director from outside the Company, the

Remuneration Committee may make use of all the existing components of remuneration, as follows:

Component Approach Maximum

Base salary

The base salaries of new appointees will be determined by reference

to similar positions with comparative status, responsibility and skills

in parallel with the individual Director’s performance, experience and

responsibilities, and pay conditions throughout the Company. Where

new appointees have initial basic salaries set below market, any shortfall

may be managed with phased increases over a period of two to three

years, subject to the individual’s development in the role.

N/A

Pension

New appointees will receive contributions to personal pension plans in

line with the workforce.

Benefits

New appointees will be eligible to receive benefits in line with existing

policy. Reasonable relocation support may be provided if necessary.

SIP

New appointees will be eligible to participate in the SIP in line with

existing policy.

Annual bonus

The structure described in the policy table will apply to new appointees

with the relevant maximum being prorated to reflect the proportion of

employment over the year.

Depending on the timing of the appointment, it may be appropriate to

operate different performance measures for the remainder of that initial

bonus period.

150% of salary

RSA

New appointees will be granted awards under the RSP on the same

terms as other executives, as described in the policy table.

75% of salary

In determining appropriate remuneration, the Remuneration Committee will take into consideration

all relevant factors (including quantum, nature of remuneration and the jurisdiction from which the

candidate was recruited) to ensure that arrangements are in the best interests of both PayPoint and

its shareholders. In addition to the above elements of remuneration, the Committee may consider it

appropriate to grant an award under a different structure in order to facilitate the recruitment of an

individual, exercising the discretion available under the relevant Listing Rule (LR 9.4.2 R) to replace

incentive arrangements forfeited on leaving a previous employer. Such buyout awards would have a

fair value no higher than that of the awards forfeited. In doing so, the Committee will consider relevant

factors including any performance conditions attached to these awards, the likelihood of those

conditions being met and the proportion of the vesting period remaining.

Internal appointment

In cases of appointing a new Executive Director by way of internal promotion, the Remuneration

Committee and Board will be consistent with the policy for external appointees detailed above. Where

an individual has contractual commitments made prior to their promotion to the Board, the Company will

continue to honour these arrangements.

Non-Executive Directors

In recruiting a new Non-Executive Director, the Remuneration Committee will utilise the prevailing

shareholder-approved Policy.

Service contracts and exit policy

Executive Directors

Executive Director service contracts, including arrangements for early termination, are carefully

considered by the Committee. Nick Wiles has a rolling service contract requiring 12 months’ notice of

termination on either side. In line with current market practice, Rob Harding, has a rolling service contract

requiring 6 months’ notice on either side. Executive Director service contracts are available to view at the

Company’s registered office. 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

Rob Harding 6 months 30 January 2023

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.

When considering exit payments, the Committee reviews all potential incentive outcomes to ensure they

are fair to both shareholders and participants. The table on the next page summarises how the awards

under the annual bonus and share incentive plans are typically treated in specific circumstances. Whilst

the Committee retains overall discretion on determining good leaver status, it typically defines a good

leaver in circumstances such as death, ill health, injury or disability, retirement with the Company’s consent,

redundancy or any other reason that the Committee determines. Bad leavers include those leaving

employment due to resignation or misconduct, and retirement without agreement of the Company.

Final treatment is subject to the Committee’s discretion:

Event Timing/vesting of award Calculation of vesting/payment

Annual bonus

Good leaver Paid at the same time as

continuing employees.

Eligible for an award to the extent that performance targets

are satisfied and the award is normally pro-rated for the

proportion of the financial year served.

Bad leaver No annual bonus payable. Not applicable.

Change

of control

Paid immediately on the

effective date of change

of control.

Eligible for an award to the extent that performance targets

are satisfied up to the change of control and the award is

normally prorated for the proportion of the financial year

served to the effective date of change of control.

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PayPoint Plc Annual Report 2024

DABS

Good leaver Continue until the normal

vesting date. In the event of

death of a participant, the

award would vest immediately.

Outstanding awards normally vest at the normal vesting date

on a time prorated basis, although time prorating may be

disapplied in full or in part.

Bad leaver Outstanding awards lapse. Not applicable.

Change

of control

Paid immediately on the

effective date of change

of control.

Outstanding awards normally vest on a time prorated basis

to reflect the length of the vesting period served, although

time prorating may be disapplied.

RSA/CEO’s 2024 LTIP Award

Good leaver Continue until the normal

vesting date or vest

immediately, at the discretion

of the Committee.

Outstanding awards vest subject to the Committee’s

assessment of any underpin or performance target as

relevant, with time prorating normally applied.

Bad leaver Outstanding awards lapse. Not applicable.

Change

of control

Vest immediately on the

effective date of change

of control.

Outstanding awards vest at the effective date of change

of control, subject to the Committee’s assessment of any

underpin or performance target as relevant, with time pro-

rating applied, unless the Board decides otherwise.

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

Effective date

of letter

Unexpired term

as at 31 March 2024 Date of appointment Notice period

Gill Barr 2 June 2021 2 months 1 June 2015 One month

Giles Kerr 20 November 2021 7½ months 20 November 2015 One month

Guy Parsons 23 March 2023 23½ months 23 March 2023 One month

Rosie Shapland 2 October 2023 30 months 2 October 2020 One month

Rakesh Sharma 12 May 2023 26½ months 12 May 2017 One month

Lan Tu 15 March 2024 35½ months 15 March 2024 One month

Ben Wishart 14 November 2022 19½ months 14 November 2019 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 office.

Annual Report on Remuneration

The following section provides details of how PayPoint’s Remuneration Policy was implemented during

the financial year ended 31 March 2024 and how it will be implemented for the year ending 31 March

2025. 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 Chief People

Officer, 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. Neither 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 advisers 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 £29,971

(excluding VAT).

107

PayPoint Plc Annual Report 2024 Strategic report

Governance

Financial statements Shareholder information

Directors’ Remuneration Report continued

Summary of shareholder voting

The following table shows the results of the binding vote on the Remuneration Policy Report and the

advisory vote on the 2023 Annual Report on Remuneration at the 7 September 2023 AGM:

Remuneration Policy Remuneration Report

Total number

of votes

% of votes

cast

Total number

of votes

% of votes

cast

For 49,553,507 96.9% 50,888,082 99.4%

Against 1,600,997 3.1% 287,10 5 0.6%

Total votes cast (excluding withheld votes) 51,154,504 51,175,187

Total votes withheld

33,454 12,771

Total votes cast (including withheld votes) 51,187,958 51,187,958

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 2024 and the prior year:

Nick Wiles

£’000

Rob Harding

£’000

Alan Dale (Former Director

)

£’000

2024 2023 2024 2023 2024 2023

Base salary

495 481 213 – 135 307

Taxable benefits

54 61 22 – 7 14

Pension

25 24 11 – 7 15

Total fixed pay 574 566 246 – 149 336

Annual bonus

424 459 182 – 115 293

Long-term incentives

217 147 0 – 60 46

Other

2 2 1 – 1 2

Total variable pay 643 608 183 – 176 341

Total remuneration 1,217 1,174 429 – 325 677

1 A base salary increase of 3% was awarded to the Chief Executive and Finance Director in July 2023, in line with the minimum

increase awarded to the general workforce.

2 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, permanent health insurance and hotel costs (Finance Director/

Chief Financial Officer).

3 Pension during the year: the pension rate for Executive Directors was 5% of base salary, in line with the rate offered to the

wider workforce. Payments to Nick Wiles and Alan Dale were made as cash allowances.

4 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 into shares under the DABS. Awards vest after 3 years).

5 Long-term incentives reflects the value of the second tranche of Restricted Share Awards granted in 2020 which are due to vest

in July 2024 and the first tranche of the Restricted Share Awards granted in 2021 which are due to vest in August 2024, subject to

an assessment of the discretionary underpin. The value of the awards has been calculated based on the three month average share

price to 31 March 2024 (£5.07).

6 SIP matching and dividend shares awarded in the period valued at the average share price calculated over three months to

31 March 2024 of £5.07 (2023: £4.93). 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.

7 Alan Dale stepped down as a Director on 7 September 2023. Further details can be found on page 113.

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 2024 and the prior year:

Base fee

£’000

Committee

Chair fees

£’000

Senior

Independent

Director fees

£’000

Total fixed

remuneration

£’000

Total Variable

Remuneration

£’000

2024 2023 2024 2023 2024 2023 2024 2023 2024 2023

Chairman

Giles Kerr 174 169 – – – – 174 169 – –

Non-Executive

Directors

Gill Barr 51 50 – – – – 51 50 – –

Guy Parsons 51 1 – – – – 51 1 – –

Rosie Shapland

51 50 20 9 – – 71 59 – –

Rakesh Sharma 51 50 10 9 6 6 67 65 – –

Lan Tu

2 – – – – – 2 – – –

Ben Wishart 51 50 – – – – 51 50 – –

Total 431 370 20 18 6 6 467 394 – –

1 Rosie Shapland’s chair fee was supplemented by an additional fees of £10,000 in respect of significant additional time that was

spent closing the 2022/23 audit.

2 Lan Tu was appointed as a Non-Executive Director on 15 March 2024.

Fees paid to Non-Executive Directors were increased by 3% from 1 July 2023 consistent with the

minimum increase applied to the general workforce. Non-Executive Directors do not receive any

variable remuneration.

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PayPoint Plc Annual Report 2024

Incentive outcomes for the year ended 31 March 2024

Annual bonus in respect of 2023/2024 performance (audited)

The annual bonus for the year ended 31 March 2024 was based on a combination of PayPoint segment profit before tax excluding exceptional items (‘PBT’), net revenue and strategic targets.

Details of the performance against the PayPoint segment 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 max)

£’000

Target

(80% of max)

£’000

Stretch

(100% of max)

£’000

Actual achieved

£’000 Payout

Underlying Profit Before Tax

64% of salary

58,000

(96.7% of target)

60,000

(100% of target)

62,000

(103.3% of target)

61,700

(102.8% of target)

61.8% of salary

(97% of max)

Net revenue 16% of salary

168,000

(97.1% of target)

173,000

(100% of target)

178,000

(102.9% of target)

181,000

(104.6% of target)

16% of salary

(100% of max)

1 Underlying Profit Before Tax excluding adjusting items. Adjusting items consist of exceptional items and amortisation of intangible assets arising on acquisition.

Strategic targets: (audited)

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

Direct Debit and Open Banking

Maximum value

5.3% of salary

Drive further growth in integrated payments platform and build on strong momentum in Open Banking, working with OB Connect to expand services for existing

and new clients.

Delivered: Increase in annualised recurring net revenue delivered across Housing, Charities and Government including DVLA, Sovereign and Guinness. Open Banking

services delivered into 38 new or existing clients including Go Cardless, AMEX and Creditsafe with strong pipeline of opportunities for next financial year.

Assessment: Growth delivered with strong pipeline for next financial year. Payout 4.25% of salary (80% of maximum).

ESG

Maximum value

5.3% of salary

Demonstrate progress in delivery of ESG commitments.

Delivered: The Committee noted strong progress in year in respect of the roll out of the PayPoint Mini which will deliver reduced emissions per terminal, year on year reduction

in emissions per fleet car following the introduction of additional hybrid vehicles to the fleet and an increase in the percentage mix of digital vs physical product across

Love2shop products. See pages 36 to 37 for more information.

Assessment: Material ESG progress delivered. Payout 4.25% of salary (80% of maximum).

Integration of Appreciate Group

Maximum value

5.3% of salary

Deliver in year organisation integration plans and develop enlarged group commercial synergies.

Delivered: Functional team alignment implemented at completion with plans for fully integrated functions developed and communicated in March 2024. Northern Hub

established in July 2023 and key people processes rolled out. Park Christmas Savings returned to growth for the first time in six years. PayPoint Super Agent network

launched to over 1,700 retailers in partnership with The Fed. L2S launched into multiple retailers with planned roll out to independent network.

Assessment: Organisation integration delivered to plan with good progress made in the delivery of commercial synergies. Payout 4.25% of salary (80% of maximum).

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Target Performance and bonus earned

Next Generation

Terminal Technology

Maximum value

5.3% of salary

Launch next generation terminal technology including the launch of PayPoint Mini and the continued roll out of the Saturn terminal to Cardnet merchants outside the

PayPoint Network.

Delivered: PayPoint Mini pilot completed as planned and launched in November 2023. Saturn is now the default terminal for Handepay field sales. All Saturn terminals have

Payment Loyalty, Smart Volution Register, EPOS, Collect+ Merchant Send, Lawbite, YouLend and Funding Circle embedded.

Assessment: Significant progress made. Payout 4.25% of salary (80% of maximum).

Cards proposition

Maximum value

5.3% of salary

Establish infrastructure for Payfac and initiate cards acceleration plans.

Delivered: Payfac discovery phase completed to plan. Approach to acquiror changed to focus on Cardnet as a single provider for new business. Major partnership expansion

with Lloyds Cardnet agreed and going into pilot in Q2 FY24/25.

Assessment: New approach will further enhance proposition and strengthen market position. Payout 4.25% of salary (80% of maximum).

Maximum value 27% of salary.

% of potential award 80% of max.

% of salary award 21.25% of salary.

Given the progress made in respect of direct debit and open banking, delivery of ESG commitments, integration of Appreciate Group, the roll out of next generation terminal technology and cards proposition, 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 % of max

PBT 60% 97%

Net Revenue 15% 100%

Strategic Targets 25% 80%

Total 100% 93%

Total (Post Management Waiver) 80%*

* The Committee considered that the actual outcomes indicated above are reflective of the performance delivered over the year. However, in light of work undertaken to streamline the organisation and cost base the Executive Board unanimously proposed to waive any

bonus award in excess of target. The Remuneration Committee accepted this proposal after careful consideration, resulting in a bonus award at target (80% of maximum) to all members of the Executive Board including the Executive Directors. As such, actual bonus

awards for Nick Wiles, Rob Harding and Alan Dale were £423,830, £182,030 (pro-rated from 1 August 2023 to 31 March 2024), and £115,162 (pro-rated from 1 April 2023 to 7 September 2023) respectively.

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PayPoint Plc Annual Report 2024

% of

award Maximum Actual

Actual Waived Received

Nick Wiles Rob Harding Alan Dale Nick Wiles Rob Harding Alan Dale % of salary Nick Wiles Rob Harding Alan Dale

PBT

60% 64% of salary 61.8% of salary £308,336 £132,427 £83,780 £54,038 £23,209 £14,683 51% of salary £254,298 £109,218 £69,097

Net revenue 15% 16% of salary 16% of salary £79,468 £34,131 £21,593 £15,894 £6,826 £4,319 13% of salary £63,574 £27,305 £17, 274

Strategic targets 25% 26% of salary 21.3% of salary £105,957 £45,508 £28,790 £0 £0 £0 21% of salary £105,957 £45,508 £28,790

Total 100% 106% of salary 99% of salary £493,762 £212,066 £134,164 £69,932 £30,035 £19,002 85% of salary £423,830 £182,031 £115,162

(93% of max) (80% of max) (80% of max) (80% of max)

1 Payouts for Rob Harding and Alan Dale have been pro rated to reflect time in role (1 August 2023 to 31 March 2024 in respect of Rob Harding, 1 April 2023 to 7 September 2023 in respect of Alan Dale).

25% of the total bonus awarded to Nick Wiles and Rob Harding will be deferred into shares which will vest after three years from grant, subject to continued employment, in line with the Directors’

Remuneration Policy.

2020 and 2021 RSA awards vesting (audited)

With respect to the RSA awards granted on:

• 27 July 2020, 50% of the awards made to Nick Wiles vested in July 2023, 25% are due to vest four years from grant on 27 July 2024 and 25% after five years from grant; and

• 13 August 2021 to Nick Wiles and Alan Dale, 50% of the awards are due to vest on 13 August 2024, 25% are due to vest four years from grant and 25% after five years from grant.

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.

Details of awards due to vest in 2024 can be found in the table below:

Interests

held in RSA

Vesting

Number of

shares due to vest

(% award granted) Value

Face Value of

Shares at Grant

Value Change

Linked to Share

Price Movement

Nick Wiles

RSA 2020

29,722 50% 14,861 £75,345 £88,126 -£12,781

RSA 2021³ 55,863 50% 27,932 £141,615 £176,251 -£34,646

Total 85,585 42,793 £216,960 £264,377 -£47,427

Alan Dale RSA 2021⁴ 17,463 50% 8,732 £44,271 £55,099 -£10,828

1 Value calculated based on the three-month average share price to 31 March 2024 of £5.07. In addition to this, dividend equivalents will be credited to shares under award to the extent they vest.

2 Of the 59,443 RSAs originally granted in July 2020, 29,721 (50% of awards) vested in July 2023 and the remaining 25% is due to vest in July 2025.

3 Of the 55,863 RSAs originally grated in August 2021, a further 25% will vest in August 2025 and a further 25% will vest in August 2026.

4 Of the 29,714 RSAs originally grated in August 2021 (reduced to 17,473 after time pro-rating), a further 25% will vest in August 2025 and a further 25% will vest in August 2026.

5 Based on the number of shares vesting in 2024 and a share price at grant of £5.93 for the 2020 RSAs and £6.31 for the 2021 RSAs.

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Vesting is subject to continued service, satisfactory individual performance and a positive assessment of performance against the following underpin:

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 sufficient

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).

The Committee considered a near-final assessment of the underpins as at 31 March 2024 in respect of the 25% of the CEO’s July 2020 grant which is expected to vest in July 2024, and in respect of the 50% of the

CEO and FD (Alan Dale)’s July 2021 grant which is expected to vest in August 2024 and found no cause to reduce the vesting outcome. Details of the Committee’s assessment (which will be revisited just prior to

vesting) are as follows:

• PayPoint has continued to deliver a robust financial performance, making good progress towards delivering £100m EBITDA by the end of FY26. This reflects both the resilience of the business and the

transformation delivered over the past three years to unlock further opportunities and growth against its four business divisions.

• Over the relevant four (2020 RSA) and three (2021 RSA) years ending 31 March 2024, PayPoint’s:

– Net revenue has increased by c.70% and c.86% respectively with accelerated revenue growth across all three business divisions.

– PBT from continuing operations (excluding exceptional items) has grown by c.7% and c.52% respectively.

– The business has executed a significant transformation to deliver a rapid transition from the legacy cash business towards a broader digital payments and services business supporting a wider range of client

sectors and strengthened retailer proposition.

– Total Shareholder Return (i.e. share price plus dividends) was -0.5% and 14.1% respectively.

• In addition, PayPoint’s ordinary reported dividend per share has grown from 32.2p to 38.2p since 2021 following the end of the additional dividend programme in March 2020.

• On the basis that the share price at 31 March 2024 (£4.86) is below the 2020 grant price (£5.93) and 2021 grant price (£6.31), there is no windfall gain as at the date of this report.

Scheme interests awarded in the year ended 31 March 2024 (audited)

RSAs

In the year under review, RSAs were granted on 11 September 2023 with a face value of 75% of salary for the Chief Executive and 62.5% of salary for the Chief Financial Officer. 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 value

Vesting profile Performance measures

Nick Wiles 75% of salary 67,079 £378,326

100% after three years from grant

(a) continued service

(b) satisfactory individual performance

Rob Harding 62.5% of salary 35,874 £202,329

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 of £5.64.

2 Underpin: The Committee must be satisfied that PayPoint’s underlying performance and delivery against its strategy and plans are sufficient 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 delivery of the Company’s ESG strategy) and the shareholder experience more generally (including the risk of windfall gains).

Buyout Award

As highlighted in last year’s Annual Report on Remuneration, the Remuneration Committee agreed to grant Rob Harding a buyout award in PayPoint Plc shares to mirror the value of deferred share awards forfeited

upon cessation of his previous employment. As such, and in line with the shareholder approved Remuneration Policy, Rob Harding was granted a nil cost option award over 4,506 PayPoint Plc shares on 1 August

2023. The Buyout Award will ordinarily vest in two tranches - 50% on 1 August 2024 and 50% on 1 August 2025 - subject to continued employment with PayPoint Group and was granted under Listing Rule 9.4.2(2)

and therefore limited to settlement with market purchase Ordinary Shares.

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PayPoint Plc Annual Report 2024

Payments to past Directors (audited)

As per the announcements on 31 January 2023 and 7 September 2023, following Alan Dale’s notification of his intention to retire, Alan Dale stepped down from his position as Finance Director on 7th September

2023, continuing as an employee until 31 December 2023 to ensure a thorough transition and handover. During this period Alan continued to receive salary, benefits and pension of £106k.

As detailed in the bonus section on page 111, Alan will receive an annual bonus award of £115k in respect of the period served as Finance Director to 7th September 2023, payable at the normal payment date.

Unvested deferred annual bonus and RSA awards will continue to vest at the normal vesting dates and in respect of the RSA awards, vesting will be subject to a positive assessment of performance against the

discretionary underpin and time pro-rating to 21 September 2023 (i.e. one year following the announcement of his retirement). Once vested, RSA awards may not be sold until at least five years from the relevant

grant date.

PayPoint’s post-employment shareholding guideline (outlined on page 103) will apply for two years post cessation of employment. Shares granted before Alan was appointed as an Executive Director in November

2020 are excluded from the post cessation guideline.

No payments were made in respect of loss of office.

CEO pay ratio

The data shows how the Chief Executive’s single figure remuneration for the year ended 31 March 2024 (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 ratio compared to the prior year reflects the fact that the bonus awarded to the CEO was lower in 2024 than in 2023 and that lower paid employees have received proportionately higher pay

awards than the CEO.

CEO single figure: £1,217,187

Year Method 25th percentile pay ratio Median pay ratio 75th percentile pay ratio

2024 Option B 39:1 27:1 18:1

2023 Option A 44:1 29:1 18:1

2022 Option A 34:1 23:1 15:1

2021 Option A 42:1 29:1 17:1

2020 Option A 21:1 14:1 9:1

No components of pay and benefits have been omitted for the purpose of the above calculations. Option B was selected in order to use the same data as used to calculate the gender pay gap.

The underlying quartiles for salary and total remuneration numbers for full-time equivalent UK employees are set out below.

Year

Salary Total pay and benefits

25th percentile Median 75th percentile 25th percentile Median 75th percentile

2024 £27,863 £41,364 £62,250 £30,885 £44,467 £67,091

2023 £24,783 £35,732 £30,675 £26,564 £40,514 £64,339

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

2020 £22,440 £30,251 £53,674 £24,484 £37,352 £59,603

The data for the three employees identified has been considered and fairly reflects pay at the relevant quartiles amongst the employee population. The Remuneration Committee considers the median pay ratio to be

representative of pay and progression policies at the company.

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Directors’ Remuneration Report continued

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 all employees within the Group. The data in this table has been

calculated based on the data disclosed in the single total figure tables on page 108.

2020–2021 2021–2022 2022–2023 2023–2024

Base

salary/Fee Benefits

Annual

bonus

Base

salary/Fee Benefits

Annual

bonus

Base

salary/Fee Benefits

Annual

bonus

Base

salary/Fee Benefits

Annual

bonus

Executive Directors

Nick Wiles 2.3% -1.33% 21.1% 3% -6.5% -7.4%

Non-Executive Directors

Gill Barr 0% 0% 2.3% 3%

Giles Kerr 0% 0% 2.3% 3%

Rosie Shapland 2.3% 3%

Rakesh Sharma 0% 0% 2.3% 3%

Ben Wishart 0% 2.3% 3%

Former Director

Alan Dale 2.3% 43.4% 21.1%

Employee population 0.5% -6.5% 100% 6.2% -3.3% -0.3% 6.1% 5.3% 37.1% 7% 7.2% 0.0%

Fields are blank where there is no comparator data due to new appointment, changes in responsibility or departures from the Board .Directors and Non-Executive Directors feature in the table following completion of two full years of service. Guy Parsons was appointed to

the board on 23 March 2023. Lan Tu was appointed to the Board on 15th March 2024 and Rob Harding was appointed to the Board on 5th September 2023, therefore they do not feature.

1 Non-Executive Directors receive fixed fees rather than salary and do not receive any variable pay or benefits.

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 2023 and

31 March 2024. Total employee pay expenditure has increased as a result of an additional 11 months of Love2shop compared to the prior year.

Total employee

pay expenditure

£’000

Distributions to

shareholders

£’000

2024 56,937 27,325

2023 38,234 25,107

% change 49% 9%

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PayPoint Plc Annual Report 2024

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)

Total shareholder return

(rebased to 100)

200

100

31 March 2014 31 March 201831 March 2015 31 March 201931 March 2016 31 March 202031 March 2017 31 March 2021 31 March 2022 31 March 2023 31 March 2024

PayPoint Plc

Source: Datastream (a LSEG product)

FTSE 250 Index (excluding Investment Trusts)

Chief Executive single figure of remuneration (£’000) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Annual bonus payout (as % of maximum) 88% 31% 64% 66% 71% 0% 100% 76% 89% 80%

LTIP vesting (as % of maximum) 0% 0% 0% 30% 100% 32% 0% 0% – –

RSA vesting (as % of maximum) – – – – – – – – 100% 100%

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Directors’ Remuneration Report continued

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 2024:

Shares held Shareholding guidelines

Owned outright

or vested

Unvested DABS and

SIP awards subject to

holding period

Unvested RSA awards

subject to holding period

and underpin

Current

shareholding

Guideline %

of salary

Guideline number

of shares

Met

Gill Barr 2,595 – – – – – –

Rob Harding 90 4,682 35,874 2,571 200 126,233 No

Giles Kerr 7,500 – – – – – –

Guy Parsons 5,136 – – – – – –

Rosie Shapland – – – – – – –

Rakesh Sharma 4,270 – – – – – –

Lan Tu

Nick Wiles 158,776 60,966 214,506 190,538 200 196,695 No

Ben Wishart 3,500 – – – – – –

Alan Dale (former Director) 21,811 32,855 29,228 39,224 200% 121,893 No

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 and continued employment. In respect of Rob Harding this also includes buyout award of 4,506 shares granted in August 2023 subject to continued employment.

3 Current shareholding includes unvested deferred bonus shares and SIP shares not subject to a holding period, on a net of tax basis.

4 A three-month average share price to 31 March 2024 of £5.07 has been used to calculate the holding relative to this guideline.

The market price of the Company’s shares on 31 March 2024 was £4.86 per share (31 March 2023: £4.53 per share) and the low and high share prices during the financial year were £3.78 and £5.76 respectively.

There have been no changes to shareholdings between 31 March 2024 and 31 May 2024 other than the purchase of 46 Partnership Shares (and the award of 46 Matching Shares on a 1:1 ratio) by both Nick Wiles

and Rob Harding in connection with the SIP.

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Directors’ interests in shares in PayPoint long-term incentive plans and all-employee plans

Long-Term Incentive Awards and Restricted Share Awards (audited)

Name Type of awards

Number of

shares at

31 March 2023

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 2024

Share price

at grant £

Value of shares

awarded £ Date of grant Lapse/Release

Nick Wiles RSA 2020 59,443 – 29,721 – 29,722 5.93 352,497 27.07.20 27.07.23 – 27.07.25

Nick Wiles RSA 2020 (Div Equiv) 4,623 4,623 5.93 27,414 27.07.20 27.07.25

Nick Wiles RSA 2021 55,863 – – – 55,863 6.31 352,496 13.08.21 13.08.24 – 13.08.26

Nick Wiles RSA 2022 61,842 – – – 61,842 5.70 352,499 10.06.22 10.06.25 – 10.06.27

Nick Wiles RSA 2023 – 67,079 – – 67,079 5.575 373,965 08.09.23 08.09.26

Alan Dale RSA 2020 9,274 – 9,274 – – 5.93 54,995 27.07.20 27.07.23

Alan Dale RSA 2020 (Div Equiv) 1,439 1,439 5.93 8,533 27.07.20 27.07.25

Alan Dale RSA 2021 29,714 – – 12,251 17,463 6.31 187,495 13.08.21 13.08.24 – 13.08.26

Alan Dale RSA 2022 32,894 – – 21,129 11,765 5.70 187,496 10.06.22 10.06.25 – 10.06.27

Rob Harding RSA 2023 Buyout – 4,506 – – 4,506 5.34 24,062 01.08.23 01.08.24 – 01.08.25

Rob Harding RSA 2023 – 35,874 – – 35,874 5.575 199,998 08.09.23 08.09.26

1 For RSAs to vest the Committee must be satisfied that PayPoint’s underlying performance and delivery against its strategy and plans are sufficient 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).

Deferred Annual Bonus Scheme

(audited)

Name

Number of shares at

31 March 2023

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 2024

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

Nick Wiles 16,645 – – – 16,645 5.70 94,877 10.06.22 10.06.25

Nick Wiles – 23,498 – – 23,498 4.89 114,846 31.07.23 31.07.26

Alan Dale 7,231 – – – 7,231 6.31 45,628 13.08.21 13.08.24

Alan Dale 10,625 – – – 10,625 5.70 60,563 10.06.22 10.06.25

Alan Dale – 14,999 – – 14,999 4.89 73,308 31.07.23 31.07.26

1 The release of shares is dependent upon continuous employment for a period of three years from the date of grant. Good leaver status was granted to Alan Dale who retired from the Group in 2023.

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Directors’ Remuneration Report continued

Share Incentive Plan (audited)

Name

Number of partnership

shares purchased at

31 March 2023

Number of matching

shares awarded at

31 March 2023

Number of dividend

acquired at

31 March 2023

Total shares at

31 March 2023

Number of

partnership shares

purchased during

the period

Number of matching

awarded

during the period

Number of dividend

Shares acquired

during the period

Dates of release of matching

and dividend Shares

Total Shares at

31 March 2024

Nick Wiles 633 633 103 1,369 305 305 126 22.04.2026 – 22.03.2027 2,105

Alan Dale 1,268 1,268 499 3,035 230 230 176 22.04.2026 – 22.03.2027 0

Rob Harding 0 0 0 0 169 169 7 22.09.2026 – 22.03.2027 345

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 £4.21 to £5.50).

3 Matching shares are ordinary shares of the Company awarded conditionally on a monthly basis during the period (at prices from £4.21 to £5.50).

4 The dates used are based on the earliest allocation of the matching shares.

Implementation of Remuneration Policy for year ending 31 March 2025

Noting the proposed LTIP award to the CEO detailed in the Annual Statement, a summary of how the Committee intends to implement the remainder of the Policy for the year ending 31 March 2025 is as follows:

Base salary

Current base salary levels, and those from 1 July 2024 (the normal salary review date), are as follows:

From 1 July 2024 From 1 July 2023 % increase

Nick Wiles £508,595 £498,623 2%

Rob Harding £326,400 £320,000 2%

Benefits

No changes will be made to benefits provision which will be in line with the Policy.

Pension

Pension provision will be 5% of salary, offered in the form of pension and/or a salary supplement.

Annual bonus

Annual bonus potential will continue to be set at 106% of salary. Full details of the annual bonus targets for the 2024/25 financial year and performance against the targets will be disclosed in next year’s

Annual Report on Remuneration.

RSA

RSAs to be granted in 2024 will:

• be set at 75% of salary for the Chief Executive and 62.5% of salary for the Chief Financial Officer; and

• vest after three years from the grant date, subject to continued employment, satisfactory individual performance and a positive assessment of performance against the discretionary underpin (i.e. the Committee

must be satisfied that PayPoint’s underlying performance and delivery against its strategy and plans are sufficient 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 delivery of the Company’s ESG strategy) and the shareholder experience more generally (including the risk of windfall gains).

No shares may be sold until at least five years from grant, other than those required to settle any taxes.

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Chairman and Non-Executive Director fees

Chairman and Non-Executive Director fees are as follows:

From 1 July 2024

From 1 July 2023

% Increase

Base fees

Chairman £178,550 £175,049 2%

Non-Executive Director 52,483 £51,454 2%

Additional fees

Chairman, Audit Committee £9,955 £9,760 2%

Chairman, Remuneration Committee £9,955 £9,760 2%

Senior Independent Director £6,600 £6,471 2%

1 A 2% increase in Non-Executive Director fees has been agreed in line with the minimum increase being applied to the general workforce.

This Report covers the remuneration of all Directors who served during the period and was approved by the Board on 12 June 2024.

Rakesh Sharma OBE FREng CPhys

Chairman, Remuneration Committee

12 June 2024

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Governance

Financial statements Shareholder information

The Directors present their report, together with the audited accounts for

the period ended 31 March 2024.

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 14 on pages 156 and 157) are engaged in providing innovative services and

technology connecting millions of consumers with over 65,000 retailer partner and SME locations across

multiple sectors.

Directors’ Report content

As required by the Companies Act 2006 and the Disclosure Guidance and Transparency Rule 4.1.8.R,

the management report comprises the relevant parts of the Directors’ Report together with information

in the Strategic Report and 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;

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

Employee engagement throughout

the workforce

Responsible Business; Corporate Governance

Report;

S.172(1) Statement

Gender diversity Responsible Business; Corporate Governance Report

Business relationships, stakeholders

and their effect on decisions

S.172(1) Statement

Use of financial instruments and credit Financial Review and note 28

Statement of compliance with the UK

Corporate Governance Code

Page 77

Post balance sheet events Note 32

Disclosures required pursuant to Listing Rule 9.8.4R can be found on the following pages:

Information Location in annual report

Statement of capitalised interest n/a

Allotment for cash of equity securities Note 25

Waiver of dividends Page 121

The Company has chosen, in accordance with Section 414C(11) of the Companies Act 2006, and as

noted in this Directors’ report, to include certain matters in its Strategic Report that would otherwise be

required to be disclosed in this Directors’ report. The Strategic Report on pages 1 to 75 provides a review

of the business, the Group’s trading for the period ended 31 March 2024, key performance indicators and

an indication of future developments.

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 advisers 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 differ 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

As at 31 March 2024, 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

(DTR). There have been no further notifications received under Rule 5 of the DTR since 31 March 2024

up to 12 June 2024.

As at 31 March 2024:

Name of holder Percentage of total voting rights

Asteriscos Patrimonial SLU 29.00

1 Percentages are shown as a percentage of the Company’s total voting rights as at the date the Company was notified of the

change in holding.

All notifications made to the Company under DTR 5 are published via a Regulatory Information Service

and made available on the Company’s website.

Directors’ Report

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Share capital

As at 31 March 2024, the Company’s share capital consisted of 72,693,673 ordinary shares of 1/3

pence each, all of which were issued and fully paid-up and are quoted on the London Stock Exchange.

During the year ended 31 March 2024, 130,439 ordinary shares were issued under the Company’s share

schemes. 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 regards

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.

As at 31 March 2024, 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 7 September 2023, 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 £145,152.19; and to disapply pre-emption rights in respect of allotments of relevant

securities up to an aggregate nominal amount of £21,772.83, with a further £21,772.83 for limited

purposes. Resolutions to renew these authorities in accordance with the updated Pre-Emption Group

guidelines and model provisions will be proposed at the 2024 annual general meeting, details of which

are set out in the 2024 Notice of Annual General Meeting. A copy of the 2024 Notice of Annual General

Meeting can be found on our website at www.corporate.paypoint.com.

Directors

The names of the current serving Directors as at the date of this report and their biographical details are

on pages 78 to 79. During the year ended 31 March 2024, Alan Dale served as Finance Director and an

Executive Director of the Company until the conclusion of the Company’s annual general meeting on 7

September 2023. Lan Tu was appointed as a Non-Executive Director on 15 March 2024.The Directors’

interests in the ordinary shares of the Company are on page 116. Directors are appointed and replaced in

accordance with the Company’s Articles of Association, the Companies Act 2006 and the UK Corporate

Governance Code 2018. The powers of the Directors are set out in the Articles of Association and the

Companies Act 2006.

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 2024 are set out on pages 130 to 137. An analysis

of risk is set out on pages 61 to 66, and of risk management on page 60. The management report

contained in the strategic report and the directors’ report includes a fair review of the development and

performance of the business and the position of the Group and the Company together with a description

of the principal risks and uncertainties they face.

Research and development activities

During the ordinary course of business, the Group developed new products and services including:

the launch of the PayPoint Mini next generation device; further development of Open Banking driven

products, including the launch of PayPoint OpenPay; and the launch of Handepay rewards scheme for

card processing merchants.

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 who served during the financial year. These indemnities

constitute qualifying indemnities for the purposes of the Companies Act 2006 and remain in force for

all current serving Directors at the date of approval of this report without any payment having been

made under them. The Company also maintains directors’ and officers’ liability insurance which gives

appropriate cover for any legal action brought against its Directors.

Articles of Association

Unless expressly specified to the contrary in the Articles of Association of the Company, the Company’s

Articles of Association may only be amended by special resolution at a general meeting of the shareholders.

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.

On 6 June 2024, the Group carried out a refinancing of its facilities. The Company now has an unsecured

revolving term credit facility for £90 million, a non-amortising loan of £45m, and an accordion of £30m

(uncommitted), which expires in June 2028, with an option (subject to lenders’ approval) to extend for a

further 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 effect, alter or terminate on the change

of control of the Company, including compensation for loss of office 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 on the PayPoint

segment can be obtained from the Government’s payment practice reporting portal.

Charitable and political donations

The Group made no political donations during the year (2023: nil). Details of the charitable donations

policy can be found within the Responsible Business section of the annual report on page 50.

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Listing Rule 9.8.6R Compliance Statement

The Company has complied with all of the requirements of LR 9.8.6R by including climate-related

financial disclosures which are set out within the Strategic Report on pages 34 to 57 (and in the

information available at the locations referenced therein) consistent with the TCFD recommendations.

Related-party transactions

Related-party transactions that took place during the year can be found in note 29.

Dividends

The Directors have declared dividends as follows during the period ended 31 March 2024:

• An interim ordinary dividend of 9.3 pence per share was paid on 1 September 2023.

• A final ordinary dividend of 9.3 pence per share was paid on 22 September 2023.

• An interim ordinary dividend of 19.0 pence (2023: 18.4 pence) was paid in equal instalments of

9.5 pence on 29 December 2023 and 5 March 2024.

The Directors have proposed a final dividend of 19.2 pence per share (2023: 18.6 pence per share)

payable in equal instalments to shareholders on 6 August 2024 and 27 September 2024 to shareholders

on the register on 5 July 2024 and 30 August 2024 respectively. This final dividend is subject to the

approval of shareholders at the annual general meeting on 1 August 2024.

The dividend policy including all the dividends declared during the year is set out in the Financial Review

on page 75.

Share buyback

The Board intends to return at least £20 million over the next 12 months through a three-year share

buyback programme in respect of the Company’s ordinary shares. The share buyback programme is

intended to commence as soon as is practicable. The Company intends to use the authority for the

repurchase of ordinary shares granted to it at the 2023 AGM to implement the proposed share buyback.

Details of the existing authorities are set out above. Shareholders will be asked to renew this authority at

the 2024 AGM, in line with common practice.

Going concern

As at 31 March 2024, the Group had £67.5 million of net debt (2023: £72.4 million). As at 31 March

2024, the Group had corporate cash and cash equivalents of £26.4 million (2023: £22 million). In addition,

the Group has an unsecured £90 million revolving credit facility, a non-amortising loan of £45 million and

a £30 million accordion facility (uncommitted) expiring in June 2028, with an option (subject to lenders’

approval) to extend for a further year. The Company’s cash and borrowing capacity is adequate to meet

the foreseeable needs of the Group, taking into account any risks (see pages 61 to 66). 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 67 and

68 of the Strategic Report and commentary on financial risk management is shown in note 28.

Independent auditor

A resolution for the re-appointment of PricewaterhouseCoopers LLP as the Company’s auditor will be

proposed at the forthcoming annual general meeting.

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 131 (which is incorporated into this Directors’

Report by reference).

Post balance sheet events

Details of events since the date of the balance sheet are provided in note 32 on page 174.

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; and

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 office, 1 The Boulevard, Shire Park,

Welwyn Garden City AL7 1EL on 1 August 2024 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 our website at www.corporate.paypoint.com. A copy of

the Notice of Annual General Meeting has also been sent to all shareholders.

The Directors’ Report was approved by the Board and signed on its behalf by:

Rob Harding

Chief Financial Officer

12 June 2024

Directors’ Report continued

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PayPoint Plc Annual Report 2024

Statement of Directors’ responsibilities in respect of the financial statements

The directors are responsible for preparing the Annual Report and the financial statements in accordance

with applicable law and regulation.

Company law requires the directors to prepare financial statements for each financial year. Under the

law directors have prepared the Group and the Company financial statements in accordance with UK-

adopted international accounting standards.

Under company law, directors must not approve the financial statements unless they are satisfied that

they give a true and fair view of the state of affairs of the Group and Company and of the profit or loss of

the Group for that period. In preparing the financial statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently;

• state whether applicable UK-adopted international accounting standards have been followed, subject

to any material departures disclosed and explained in the financial statements;

• make judgments and accounting estimates that are reasonable and prudent; and

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that

the Group and Company will continue in business.

The Directors are responsible for safeguarding the assets of the Group and Company and hence for

taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are also responsible for keeping adequate accounting records that are sufficient to show

and explain the Group’s and Company’s transactions and disclose with reasonable accuracy at any time

the financial position of the Group and Company and enable them to ensure that its financial statements

and the Directors’ Remuneration Report comply with the Companies Act 2006.

The Directors are responsible for the maintenance and integrity of the Company’s website. Legislation in

the United Kingdom governing the preparation and dissemination of financial statements may differ from

legislation in other jurisdictions.

Directors’ confirmations

The Directors consider that 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 and

Company’s position and performance, business model and strategy.

Each of the Directors, whose names and functions are listed in the Directors’ Report confirm that, to the

best of their knowledge:

• the Group and Company financial statements, which have been prepared in accordance with UK-

adopted international accounting standards, give a true and fair view of the assets, liabilities and

financial position of the Group and Company, and of the profit of the group; and

• the Directors’ Report includes a fair review of the development and performance of the business

and the position of the Group and Company, together with a description of the principal risks and

uncertainties that it faces.

In the case of each Director in office at the date the Directors’ Report is approved:

• so far as the Director is aware, there is no relevant audit information of which the Group’s and

Company’s auditors are unaware; and

• they have taken all the steps that they ought to have taken as a Director in order to make themselves

aware of any relevant audit information and to establish that the Group’s and Company’s auditors are

aware of that information.

The Statement of Directors’ Responsibilities has been approved by the Board of Directors and is signed

on their behalf by:

Rob Harding

Chief Financial Officer

12 June 2024

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PayPoint Plc Annual Report 2024

Independent Auditors’ Report to the members of PayPoint Plc

Report on the audit of the financial statements

Opinion

In our opinion, PayPoint Plc’s group financial statements and company financial statements (the “financial

statements”):

• give a true and fair view of the state of the group’s and of the company’s affairs as at 31 March 2024

and of the group’s profit and the group’s and company’s cash flows for the year then ended;

• 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

• have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements, included within the Annual Report, which comprise:

the Consolidated statement of financial position and Company statement of financial position as

at 31 March 2024; the Consolidated statement of profit or loss, the Consolidated statement of

comprehensive income, the Consolidated statement of cash flows, the Company statement of cash

flows, the Consolidated statement of changes in equity and the Company statement of changes in

equity for the year then ended; and the notes to the financial statements, comprising material accounting

policy information and other explanatory information.

Our opinion is consistent with our reporting to the Audit Committee.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and

applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities

for the audit of the financial statements section of our report. We believe that the audit evidence we

have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We remained independent of the group in accordance with the ethical requirements that are relevant to

our audit of the financial statements in the UK, which includes the FRC’s Ethical Standard, as applicable

to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with

these requirements.

To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s

Ethical Standard were not provided.

Other than those disclosed in Note 8 to the consolidated financial statements, we have provided no non-

audit services to the company or its controlled undertakings in the period under audit.

Our audit approach

Context

This is the first year we have been engaged to perform the group and company’s audit. We have

performed professional inquiries with the previous auditors and we have reviewed the prior year auditors

working papers to ensure we have obtained comfort over the 2023 opening balances. We have focused

our efforts on obtaining an understanding of the Group’s processes and business. This has assisted

us with efficiently scoping the audit to ensure sufficient coverage as well as determining the key audit

matters which have been included in our report.

The group acquired the Love2shop business in the prior year and therefore have seen the benefit of a full

year of trade for this division in the current year. The group have completed a refinancing of their current

facilities post year end and have incurred restructuring costs in the year.

Overview

Audit scope

• The scope of our audit determines where we go and what we do, the best types of audit evidence to

obtain, the right areas of operations to focus on and the resources needed to deliver this. As this was

a first year audit, we performed additional procedures to understand the group, including reviewing

prior year working papers and prior year audit committee papers. As group auditors we are required to

obtain sufficient audit evidence from the components of the group. We have determined there are five

components for group reporting purposes:

• Love2shop

• PayPoint Network

• PayPoint Retail Solutions

• PayPoint Collections

• PayPoint Plc

• Further procedures in relation to other areas, including revenue, have been performed over

Merchant Rentals.

Key audit matters

• Impairment of Handepay and Merchant Rentals (group and parent)

• Valuation of pensions liabilities (group)

Materiality

• Overall group materiality: £2,409,000 based on 5% of profit before tax.

• Overall company materiality: £2,200,000 based on 1% of total assets.

• Performance materiality: £1,566,000 (group) and £1,430,000 (company).

The scope of our audit

As part of designing our audit, we determined materiality and assessed the risks of material

misstatement in the financial statements.

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Shareholder information

Key audit matters

Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial statements of the current period and include the most significant assessed

risks of material misstatement (whether or not due to fraud) identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and

directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures thereon, were addressed in the context of our audit of the financial statements as a whole,

and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

This is not a complete list of all risks identified by our audit.

Key audit matter How our audit addressed the key audit matter

Impairment of Handepay and Merchant Rentals (group and parent)

In the prior year, the Group had goodwill balances in relation to Handepay and Merchant Rentals of

£35.6m and £9.6m respectively. In the current year, as set out in Note 1 and 12, management have

outlined their reassessment of Cash Generating Units (CGUs). Management determined that Handepay,

Merchant Rentals and the existing PayPoint cards division should be considered one CGU, due to

a number of factors, including that the activities of the cards business has one active market, the

businesses perform the same service and utilise the same resources in provision of their service to

customers, such as a new agreement with Lloyds Cardnet.

This is considered a significant judgement.

Management has performed a value in use calculation to assess the recoverability of the goodwill. This

involves key estimates in relation to management’s assumptions used, including the short term growth

rates and the discount rate.

Separately, in respect of the Parent Company, the investments in subsidiaries in relation to Handepay

Limited and Merchant Rentals Limited have been assessed for risk of impairment.

The change to the CGU determination in the year is considered a significant judgement. We assessed

whether the accounting judgments underpinning the change in CGUs for the goodwill assessment was in

line with IAS 36, consulting with our accounting technical specialists.

We obtained evidence to support management’s judgement, including understanding the interdependency

of the cash flows and inspecting the new commercial agreement with Lloyds Cardnet.

The recoverable value of goodwill was determined from the discounted future cash flows of the cards

division. We obtained management’s value in use impairment assessment and ensured the calculations

were mathematically accurate. We evaluated the inputs in the value in use calculation and challenged the

key assumptions including:

• The short term cash flows and growth rates applied;

• Calculating an independent WACC rate range, with reference to comparable businesses using our

valuation experts; and

• Assessing the long term growth rate applied using our valuation experts;

For the Parent Company, the valuation of the investment in subsidiaries was assessed in the same way,

considering the discounted cash flows of each investment.

Based on our procedures we did not identify any matters indicating that management’s models were

inappropriate, with the exception of the discount rate applied. We considered this to be outside of a

reasonable range, however this had no impact on the conclusion. We consider no impairment charge

being required to be appropriate. We have assessed the disclosures provided and consider them to be

materially appropriate.

Valuation of pensions liabilities (group)

The group has gross defined benefit obligations totalling £15.9m at 31 March 2024 (2023: £17.3m).

The valuation of pension plan liabilities requires estimation in determining appropriate assumptions such

as salary increases, mortality rates, discount rates and inflation levels. Movement in these assumptions

in aggregate can have a material impact on the determination of the liability. Management uses

external actuaries to assist in determining these assumptions, and these assumptions are considered

to be the significant audit risk. Refer to note 16 and the use of judgements and estimates section in

Note 1. Refer to the Audit Committee report on page 97 for a description of its assessment of this

significant estimate.

We used our actuarial experts to assess whether the assumptions used in calculating the defined benefit

liabilities were reasonable and in line with accounting standards. We assessed whether mortality rate

assumptions were appropriate for the plan and, where applicable, incorporated considerations of relevant

national actuarial data. We also assessed whether the discount rate and inflation rates were consistent with

our internally developed benchmarks and in line with market information. We examined the salary increase

assumptions to consider whether they represent management’s best estimate. We evaluated the calculations

prepared by the external actuaries to assess the consistency of the assumptions used. Outside of our audit

procedures in relation to the significant risk, we performed two-way testing of the listings of active members

back to the scheme administrator records, or alternate procedures where appropriate. We have reviewed the

controls report of the administrators where available and identified no exceptions relating to members’ data.

Based on procedures performed we consider that the assumptions used to value the pension obligation

are within an acceptable range. We assessed the appropriateness of the related disclosures in note 16 of

the financial statements and consider them to be appropriate.

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Independent Auditors’ Report to the members of PayPoint Plc continued

How we tailored the audit scope

We tailored the scope of our audit to ensure that we performed enough work to be able to give an

opinion on the financial statements as a whole, taking into account the structure of the group and the

company, the accounting processes and controls, and the industry in which they operate.

The Group is organised into two operating divisions, PayPoint and Love2shop. There are 13 reporting

units within the consolidation. We have defined a component as a business unit where legal entities

have been grouped together based on the fact they have the same management, the same control

environment and also considering the way the component reports to the group. We have determined

there are five components in scope for Group reporting as follows: PayPoint Network, PayPoint Retail

Solutions, PayPoint Collections, Love2shop and PayPoint Plc.

The impact of climate risk on our audit

As part of our audit we made enquiries of management to understand the extent of the potential

impact of climate risk on the group’s and company’s financial statements, and we remained alert when

performing our audit procedures for any indicators of the impact of climate risk. Our procedures did not

identify any material impact as a result of climate risk on the group’s and company’s financial statements.

Materiality

The scope of our audit was influenced by our application of materiality. We set certain quantitative

thresholds for materiality. These, together with qualitative considerations, helped us to determine the

scope of our audit and the nature, timing and extent of our audit procedures on the individual financial

statement line items and disclosures and in evaluating the effect of misstatements, both individually and

in aggregate on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole

as follows:

Financial statements – group Financial statements – company

Overall

materiality £2,409,000 £2,200,000

How we

determined it 5% of profit before tax 1% of total assets

Rationale for

benchmark

applied

Based on the benchmarks used in the

financial statements, profit before tax

is the primary measure used by the

shareholders in assessing the performance

of the Group and is a generally accepted

auditing benchmark.

PayPoint Plc is a holding company for

the Group and therefore the materiality

benchmark has been determined to be

based on total assets which is a generally

accepted auditing benchmark.

For each component in the scope of our group audit, we allocated a materiality that is less than our

overall group materiality. The range of materiality allocated across components was between £580,000

to £2,200,000. Certain components were audited to a local statutory audit materiality that was also less

than our overall group materiality.

We use performance materiality to reduce to an appropriately low level the probability that the

aggregate of uncorrected and undetected misstatements exceeds overall materiality. Specifically, we use

performance materiality in determining the scope of our audit and the nature and extent of our testing of

account balances, classes of transactions and disclosures, for example in determining sample sizes. Our

performance materiality was 65% of overall materiality, amounting to £1,566,000 for the group financial

statements and £1,430,000 for the company financial statements.

In determining the performance materiality, we considered a number of factors – the history of

misstatements, risk assessment and aggregation risk and the effectiveness of controls – and concluded

that an amount in the middle of our normal range was appropriate.

We agreed with the Audit Committee that we would report to them misstatements identified during

our audit above £120,500 (group audit) and £110,000 (company audit) as well as misstatements below

those amounts that, in our view, warranted reporting for qualitative reasons.

Conclusions relating to going concern

Our evaluation of the directors’ assessment of the group’s and the company’s ability to continue to

adopt the going concern basis of accounting included:

• obtaining and agreeing management’s going concern assessment to the business’s board approved

plan and ensuring that the base case scenario indicates that the business generates sufficient cash

flows to meets its obligations within the going concern assessment period while complying with

covenant arrangements;

• considering the extent to which the group’s and company’s future cash flows might be adversely

affected by the impact of contingent liabilities and other factors such as the impact of the increased

cost of living;

• reviewing management’s cash flow forecasts, assessing the debt available to the group and

considering the overall impact on liquidity;

• testing the mathematical accuracy of the models;

• evaluating management’s severe but plausible scenario and ensuring this is appropriately modelled

through the cash flows;

• considering the risk of breach of the covenant arrangements in place for external borrowings under the

severe but plausible scenario;

• performing further stress tests on the severe but plausible scenario;

• considering the adequacy of the disclosures in the financial statements.

Based on the work we have performed, we have not identified any material uncertainties relating to

events or conditions that, individually or collectively, may cast significant doubt on the group’s and the

company’s ability to continue as a going concern for a period of at least twelve months from when the

financial statements are authorised for issue.

In auditing the financial statements, we have concluded that the directors’ use of the going concern basis

of accounting in the preparation of the financial statements is appropriate.

However, because not all future events or conditions can be predicted, this conclusion is not a guarantee

as to the group’s and the company’s ability to continue as a going concern.

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Shareholder information

In relation to the directors’ reporting on how they have applied the UK Corporate Governance Code, we

have nothing material to add or draw attention to in relation to the directors’ statement in the financial

statements about whether the directors considered it appropriate to adopt the going concern basis of

accounting.

Our responsibilities and the responsibilities of the directors with respect to going concern are described

in the relevant sections of this report.

Reporting on other information

The other information comprises all of the information in the Annual Report other than the financial

statements and our auditors’ report thereon. The directors are responsible for the other information. Our

opinion on the financial statements does not cover the other information and, accordingly, we do not

express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of

assurance thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information

and, in doing so, consider whether the other information is materially inconsistent with the financial

statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If we identify an apparent material inconsistency or material misstatement, we are required to perform

procedures to conclude whether there is a material misstatement of the financial statements or a material

misstatement of the other information. If, based on the work we have performed, we conclude that there

is a material misstatement of this other information, we are required to report that fact. We have nothing

to report based on these responsibilities.

With respect to the Strategic report and Director’s Report, we also considered whether the disclosures

required by the UK Companies Act 2006 have been included.

Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to

report certain opinions and matters as described below.

Strategic report and Director’s Report

In our opinion, based on the work undertaken in the course of the audit, the information given in the

Strategic report and Director’s Report for the year ended 31 March 2024 is consistent with the financial

statements and has been prepared in accordance with applicable legal requirements.

In light of the knowledge and understanding of the group and company and their environment obtained

in the course of the audit, we did not identify any material misstatements in the Strategic Report and

Director’s Report.

Directors’ Remuneration

In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly prepared

in accordance with the Companies Act 2006.

Corporate governance statement

The Listing Rules require us to review the directors’ statements in relation to going concern, longer-term

viability and that part of the corporate governance statement relating to the company’s compliance

with the provisions of the UK Corporate Governance Code specified for our review. Our additional

responsibilities with respect to the corporate governance statement as other information are described

in the Reporting on other information section of this report.

Based on the work undertaken as part of our audit, we have concluded that each of the following

elements of the corporate governance statement is materially consistent with the financial statements

and our knowledge obtained during the audit, and we have nothing material to add or draw attention to in

relation to:

• The directors’ confirmation that they have carried out a robust assessment of the emerging and

principal risks;

• The disclosures in the Annual Report that describe those principal risks, what procedures are in place

to identify emerging risks and an explanation of how these are being managed or mitigated;

• The directors’ statement in the financial statements about whether they considered it appropriate to

adopt the going concern basis of accounting in preparing them, and their identification of any material

uncertainties to the group’s and company’s ability to continue to do so over a period of at least twelve

months from the date of approval of the financial statements;

• The directors’ explanation as to their assessment of the group’s and company’s prospects, the period

this assessment covers and why the period is appropriate; and

• The directors’ statement as to whether they have a reasonable expectation that the company will be

able to continue in operation and meet its liabilities as they fall due over the period of its assessment,

including any related disclosures drawing attention to any necessary qualifications or assumptions.

Our review of the directors’ statement regarding the longer-term viability of the group and company

was substantially less in scope than an audit and only consisted of making inquiries and considering

the directors’ process supporting their statement; checking that the statement is in alignment with the

relevant provisions of the UK Corporate Governance Code; and considering whether the statement

is consistent with the financial statements and our knowledge and understanding of the group and

company and their environment obtained in the course of the audit.

In addition, based on the work undertaken as part of our audit, we have concluded that each of the

following elements of the corporate governance statement is materially consistent with the financial

statements and our knowledge obtained during the audit:

• The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and

understandable, and provides the information necessary for the members to assess the group’s and

company’s position, performance, business model and strategy;

• The section of the Annual Report that describes the review of effectiveness of risk management and

internal control systems; and

• The section of the Annual Report describing the work of the Audit Committee.

We have nothing to report in respect of our responsibility to report when the directors’ statement

relating to the company’s compliance with the Code does not properly disclose a departure from a

relevant provision of the Code specified under the Listing Rules for review by the auditors.

128

PayPoint Plc Annual Report 2024

Independent Auditors’ Report to the members of PayPoint Plc continued

Responsibilities for the financial statements and the audit

Responsibilities of the directors for the financial statements

As explained more fully in the Statement of Director’s Responsibilities, the directors are responsible for

the preparation of the financial statements in accordance with the applicable framework and for being

satisfied that they give a true and fair view. The directors are also 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.

In preparing the financial statements, the directors are responsible for assessing the group’s and the

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 the directors either intend to liquidate

the group or the company or to cease operations, or have no realistic alternative but to do so.

Auditors’ responsibilities for the audit of the financial statements

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 an auditors’ report that

includes our opinion. Reasonable assurance is a high level of assurance, but is not a 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 the aggregate,

they could reasonably be expected to influence the economic decisions of users taken on the basis of

these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design

procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of

irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,

including fraud, is detailed below.

Based on our understanding of the group and industry, we identified that the principal risks of non-

compliance with laws and regulations related to breaches of data protection regulations and employment

law, and we considered the extent to which non-compliance might have a material effect on the financial

statements. We also considered those laws and regulations that have a direct impact on the financial

statements such as Companies Act 2006 and UK tax legislation. We evaluated management’s incentives

and opportunities for fraudulent manipulation of the financial statements (including the risk of override

of controls), and determined that the principal risks were related to posting inappropriate journal entries

to increase revenue and management bias in accounting estimates. The group engagement team

shared this risk assessment with the component auditors so that they could include appropriate audit

procedures in response to such risks in their work. Audit procedures performed by the group engagement

team and/or component auditors included:

• Enquiries with the directors, the Audit Committee and company General Counsel, review of board

meeting minutes and consideration of known or suspected instances of non-compliance with laws,

regulations and fraud including discussions with external legal counsel;

• Identifying and testing a sample of journal entries, in particular certain journal entries posted with

unusual account combinations which result in an increase in revenue; and

• Challenging assumptions and judgements made by management in determining significant accounting

estimates, in particular in relation to impairment assessment of Merchant Rentals and Handepay and

the valuation of defined benefit scheme obligations.

There are inherent limitations in the audit procedures described above. We are less likely to become aware

of instances of non-compliance with laws and regulations that are not closely related to events and

transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement

due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve

deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

Our audit testing might include testing complete populations of certain transactions and balances,

possibly using data auditing techniques. However, it typically involves selecting a limited number of items

for testing, rather than testing complete populations. We will often seek to target particular items for

testing based on their size or risk characteristics. In other cases, we will use audit sampling to enable us

to draw a conclusion about the population from which the sample is selected.

A further description of our responsibilities for the audit of the financial statements is located on the

FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’

report.

Use of this report

This report, including the opinions, has been prepared for and only for the company’s members as a body

in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do

not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person

to whom this report is shown or into whose hands it may come save where expressly agreed by our prior

consent in writing.

Other required reporting

Companies Act 2006 exception reporting

Under the Companies Act 2006 we are required to report to you if, in our opinion:

• we have not obtained all the information and explanations we require for our audit; or

• adequate accounting records have not been kept by the company, or returns adequate for our audit

have not been received from branches not visited by us; or

• certain disclosures of directors’ remuneration specified by law are not made; or

• the company financial statements and the part of the Directors’ Remuneration Report to be audited

are not in agreement with the accounting records and returns.

We have no exceptions to report arising from this responsibility.

Appointment

Following the recommendation of the Audit Committee, we were appointed by the members on

14 September 2023 to audit the financial statements for the year ended 31 March 2024 and subsequent

financial periods. This is therefore our first year of uninterrupted engagement.

129

PayPoint Plc Annual Report 2024 Strategic report Governance

Financial statements

Shareholder information

Other matter

The company is required by the Financial Conduct Authority Disclosure Guidance and Transparency Rules

to include these financial statements in an annual financial report prepared under the structured digital

format required by DTR 4.1.15R – 4.1.18R and filed on the National Storage Mechanism of the Financial

Conduct Authority. This auditors’ report provides no assurance over whether the structured digital

format annual financial report has been prepared in accordance with those requirements.

David Beer (Senior Statutory Auditor)

for and on behalf of PricewaterhouseCoopers LLP

Chartered Accountants and Statutory Auditors

Watford

12 June 2024

Consolidated statement of profit or loss

Note

		Year ended	Year ended
		31 March 2024	31 March 2023
		£’000	£’000
Revenue	2,3	277,816	165, 220
Other revenue	2,3	28 , 551	2, 503
Total revenue		306 ,367	1 6 7, 7 2 3
Cost of revenue	5	(1 58,964)	(64 , 257)
Gross profit		1 4 7, 4 0 3	103, 46 6
Administrative expenses – excluding adjusting items		(78 ,722)	(50, 08 3)
Operating profit before adjusting items		68,68 1	53, 383
Adjusting items:
Exceptional items – administrative expenses	6	(4, 120)	(5 , 317)
Amortisation of acquired intangible assets		(8 , 076)	(2 , 5 74)
Movement on convertible loan notes		(186)	–
Operating profit after adjusting items		56,2 99	4 5,492
Finance income	9	1 ,39 0	87
Finance costs	9	(8,40 8)	(2 ,718)
Exceptional item – finance costs	6	(1 ,0 99)	(287)
Profit before tax		48 ,182	4 2 , 5 74
Tax	10	(12, 495)	(7, 8 6 4)
Profit after tax		35,6 87	34 ,710
		Year ended	Year ended
Earnings per share (pence)		31 March 2024	31 March 2023
Basic		49.1	50 .1
Diluted		48.8	49.6
		Year ended	Year ended
Underlying earnings per share – before adjusting items (pence)		31 March 2024	31 March 2023
Basic		63.0	61 .0
Diluted		62.6	60. 3

130

PayPoint Plc Annual Report 2024

Consolidated statement of comprehensive income

Note

		Year ended	Year ended
		31 March 2024	31 March 2023
		£’000	£’000
Items that will not be reclassified to the consolidated statement of profit or loss:
Remeasurement of defined benefit pension scheme asset	16	(32 8)	353
Deferred tax on remeasurement of defined benefit pension scheme asset	10	82	(86)
Other comprehensive (expense)/income for the year		(246)	267
Profit for the year		35,6 87	34 ,710
Total comprehensive income for the year attributable to equity holders of the parent		35,4 41	34,977

131

PayPoint Plc Annual Report 2024 Strategic report Governance

Financial statements

Shareholder information

Note

			Re-presented
		31 March 2024	31 March 2023
		£’000	£’000
Non-current assets
Goodwill	12	1 1 7, 4 2 7	1 1 7, 4 2 7
Other intangible assets	13	6 7, 0 5 2	75 , 293
Convertible loan notes	14	3,68 9	3 ,750
Other investment	14	251	251
Property, plant and equipment	15	33, 2 92	2 9, 257
Net investment in finance lease receivables	23	51 2	1,7 11
Retirement benefit asset	16	286	41 1
Total non-current assets		222, 50 9	228,10 0
Current assets
Inventories	17	3,26 0	3, 152
Trade and other receivables	18	122 ,9 50	82, 055
Current tax asset		5, 423	6 , 2 31
Cash and cash equivalents – corporate	19	26,392	22, 5 46
Cash and cash equivalents – non-corporate	19	6 0, 378	55, 9 05
Restricted funds held on deposit (non-corporate)	19	78 ,19 8	8 2,000
Total current assets		2 96, 601	2 51 , 8 8 9
Total assets		519 , 110	47 9, 9 8 9
Current liabilities
Trade and other payables	20	281 ,8 64	255, 526
Lease liabilities	23	879	862
Provisions	21	1 ,85 0	–
Loans and borrowings	24	16, 4 35	11,745
Bank overdraft	19	–	525
Total current liabilities		301,028	268 ,65 8
Non-current liabilities
Trade and other payables	20	–	11 5
Lease liabilities	23	3 ,956	4 ,6 17
Loans and borrowings	24	7 7, 5 0 0	8 2, 670
Deferred tax liability	22	15, 466	12 ,21 5
Total non-current liabilities		96 , 922	9 9 , 617
Total liabilities		397,950	36 8 , 275
Net assets		121 , 160	111 ,714
Equity
Share capital	25	242	24 2
Share premium	25	1,000	1,000
Merger reserve	25	1 8,243	1 8 , 243
Share-based payment reserve		2 ,9 92	2, 28 6
Retained earnings		98,6 83	8 9,9 43
Total equity attributable to equity holders of the parent		121 , 160	111 ,714

1 See note 1 for an explanation of the re-presentation.

These financial statements were approved by the Board of Directors and authorised for issue on 12 June 2024 and were signed on behalf of the Board of Directors.

Nick Wiles

Chief Executive

12 June 2024

Consolidated statement of financial position

132

PayPoint Plc Annual Report 2024

Note

					Share-based
			Share	Merger	payment	Retained
		Share capital	premium	reserve	reserve	earnings	Total equity
		£’000	£’000	£’000	£’000	£’000	£’000
Opening equity at 1 April 2022		230	1,000	999	1 , 570	79, 459	8 3, 258
Profit for the year		–	–	–	–	34 ,710	34 ,710
Total other comprehensive income		–	–	–	–	267	267
Comprehensive income for the year		–	–	–	–	34, 977	34,977
Issue of shares	25	12	–	17, 24 4	–	–	17, 25 6
Equity-settled share-based payment expense	26	–	–	–	1 , 330	–	1 , 330
Vesting of share scheme	26	–	–	–	(614)	614	–
Dividends	27	–	–	–	–	(2 5,1 07)	(25 ,107)
Closing equity at 31 March 2023		242	1,000	1 8,243	2,28 6	89, 943	111 ,714
Profit for the year		–	–	–	–	35,6 87	35,6 87
Total other comprehensive expense		–	–	–	–	(246)	(246)
Comprehensive income for the year		–	–	–	–	35 ,4 41	35 ,4 41
Equity-settled share-based payment expense	26	–	–	–	1,669	(339)	1 , 330
Vesting of share scheme	26	–	–	–	(9 63)	963	–
Dividends	27	–	–	–	–	(2 7, 3 2 5)	( 2 7, 3 2 5)
Closing equity at 31 March 2024		242	1,000	1 8,243	2 , 992	98,6 83	121 ,1 60

Consolidated statement of changes in equity

133

PayPoint Plc Annual Report 2024 Strategic report Governance

Financial statements

Shareholder information

Note

			Restated and
			re-presented
		Year ended	Year ended
		31 March 2024	31 March 2023
		£’000	£’000
Cash flows from operating activities
Cash generated from operations	30	6 5,70 6	62,923
Corporation tax paid		(8 , 354)	(6 , 20 4)
Interest received		534	609
Interest paid		(7 ,609)	(2, 973)
Movement in restricted funds held on deposit (non-corporate)		3, 802	(35 ,000)
Movement in payables – non-corporate		(91)	9, 299
Net cash inflow from operating activities		53, 98 8	28, 654
Investing activities
Purchases of property, plant and equipment		(11 ,10 0)	( 7, 8 0 2)
Purchases of intangible assets		(5, 106)	(4 , 9 0 0)
Acquisitions of subsidiaries net of cash and cash equivalents acquired		–	19, 38 0
Contingent consideration cash paid		–	(1,000)
Disposal of investment in associate	14	–	5, 487
Purchase of convertible loan note	14	(125)	(3 ,000)
Purchase of other investment	14	–	(2 51)
Net cash (used in)/generated from investing activities		(1 6, 331)	7, 9 1 4
Financing activities
Dividends paid	27	(2 7, 3 2 5)	(25 ,107)
Proceeds from issue of share capital		–	1
Payment of lease liabilities	23	(1 ,0 08)	(2 61)
Repayments of loans and borrowings	24	(4 4 , 9 8 0)	(2 2 , 0 74)
Proceeds from loans and borrowings	24	44,500	6 4,50 0
Net cash (used in)/generated from financing activities		(28 , 813)	1 7, 0 5 9
Net increase in cash and cash equivalents		8,844	53, 627
Cash and cash equivalents at beginning of year		7 7, 9 2 6	24, 2 9 9
Cash and cash equivalents at end of year		86 ,770	7 7, 9 2 6

1 See note 1 for explanations of the restatement and re-presentation.

Note to the consolidated statement of cash flows -

reconciliation of cash and cash equivalents

Note

		31 March 2024	31 March 2023
		£’000	£’000
Corporate cash		26, 392	22, 5 46
Non-corporate cash		6 0, 378	55, 9 05
Bank overdraft		–	(525)
Cash and cash equivalents	19	8 6 ,770	7 7, 9 2 6

Consolidated statement of cash flows

134

PayPoint Plc Annual Report 2024

Note

31 March 2024

£’000

Re-presented

31 March 2023

£’000

Non-current assets

Investments in wholly owned subsidiaries 14 221,837 221,837

Convertible loan notes 14 3,689 3,750

Other investment 14 251 251

Trade and other receivables 18 12,025 11,477

Total non-current assets 237,802 237,315

Current assets

Trade and other receivables 18 75 2,530

Current tax asset 7,59 8 1,984

Cash and cash equivalents – corporate 7 1,186

Total current assets 7,6 8 0 5,700

Total assets 245,482 243,015

Current liabilities

Trade and other payables 20 26,622 83,298

Loans and borrowings 24 16,435 11,288

Total current liabilities 43,057 94,586

Non-current liabilities

Loans and borrowings 24 77,500 82,500

Provisions 21 230 –

Total liabilities 120,787 177,086

Net assets 124,695 65,929

Equity

Share capital 25 242 242

Share premium 25 1,000 1,000

Merger reserve 25 18,243 18,243

Share-based payment reserve 2,992 2,286

Retained earnings 102,218 44,158

Total equity attributable to equity holders of the parent 124,695 65,929

1 See note 1 for an explanation of the re-presentation.

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 £84.8 million (2023: £0.7 million).

These ﬁnancial statements were approved by the Board of Directors and authorised for issue on 12 June 2024 and were signed on behalf of the Board of Directors.

Nick Wiles

Chief Executive

12 June 2024

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135

PayPoint Plc Annual Report 2024 Strategic report Governance

0SXKXMSKV]^K^OWOX^]

Shareholder information

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 2022 230 1,000 999 1,570 67,928 71,727

Proﬁt for the year ––––723723

Issue of shares 25 12 – 17,244 – – 17,256

Equity-settled share-based payment expense 26–––1,330–1,330

Vesting of share scheme 26–––(614)614–

Dividends 27––––(25,107)(25,107)

Closing equity at 31 March 2023 242 1,000 18,243 2,286 44,158 65,929

Proﬁt for the year ––––84,76184,761

Issue of shares 25 ––––––

Equity-settled share-based payment expense 26 –––1,669(339)1,330

Vesting of share scheme 26 –––(963)963–

Dividends 27 ––––(27,325)(27,325)

Closing equity at 31 March 2024 242 1,000 18,243 2,992 102,218 124,695

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136

PayPoint Plc Annual Report 2024

Note

Year ended

31 March 2024

£’000

Year ended

31 March 2023

£’000

Cash ﬂows from operating activities

Cash generated from operations 30 33,349 46,658

Interest received – 2

Interest paid (7,225) (2,810)

Net cash inﬂow from operating activities 26,124 43,850

Investing activities

Acquisition transaction costs – (1,837)

Acquisitions of subsidiaries – (61,925)

Contingent consideration cash paid – (1,000)

Proceeds from investment in associate 14 – 5,487

Purchase of convertible loan note 14 (125) (3,000)

Purchase of other investment 14 – (251)

Net cash used in investing activities (125) (62,526)

Financing activities

Dividends paid 27 (27,325) (25,107)

Proceeds from issue of share capital – 1

Repayments of loans and borrowings 24 (44,353) (19,833)

Proceeds from loans and borrowings 24 44,500 64,500

Net cash (used in)/generated from ﬁnancing activities (27,178) 19,561

Net (decrease)/increase in cash and cash equivalents (1,179) 885

Cash and cash equivalents at beginning of year 1,186 301

Cash and cash equivalents at end of year 7 1,186

137

PayPoint Plc Annual Report 2024 Strategic report Governance

0SXKXMSKV]^K^OWOX^]

Shareholder information

8Y^O]^Y^ROMYX]YVSNK^ON¨XKXMSKV]^K^OWOX^]

1. Signiﬁcant Accounting policies

Basis of preparation

PayPoint Plc (‘PayPoint’ or the ‘Company’) is a public limited company and is incorporated and registered

in England in the UK under the Companies 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

2024 have been applied consistently to all periods set out in these group ﬁnancial statements.

New and revised IFRS in issue but not yet effective

No new standards or interpretations have been adopted in the Group’s accounting policies in the year

ended 31 March 2024.

Revised standards issued but not yet effective

At the date of authorisation of these ﬁnancial statements, revised standards issued but not yet effective

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:

• Amendment to IAS1: Presentation of Financial Statements and IFRS Practice Statement 2: Making

Materiality Judgements – Non-current liabilities with covenants (effective date 1 January 2024).

• Amendments to IFRS16 Leases – Lease liability in a sale and leaseback (effective date 1 January 2024).

• Amendments to IAS 1 Presentation of Financial Statements – Classiﬁcation of liabilities as current or

non-current (effective date 1 January 2024).

• Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments – Disclosures:

supplier ﬁnance arrangements (effective date 1 January 2024).

New standards issued but not yet effective

IFRS18 Presentation and disclosure in the Financial Statements has been issued and is effective from 1

January 2024. It will replace IAS1 Presentation of Financial Statements and will have an impact on the

presentation of the Group’s Consolidated statement of proﬁt or loss, with new statutory proﬁt or loss

sub-totals and income and expenses classiﬁed into Operating, Investing and Financing categories.

Restatement of comparative ﬁgures in the Consolidated statement of cash ﬂows,

and the related note, for the recognition of acquired cash and cash equivalents in

Appreciate Group PLC

On 28 February 2023 the Group acquired Appreciate Group PLC for consideration of £79,181,000,

comprising cash of £61,925,000 plus equity of £17,256,000. In its Consolidated statement of cash

ﬂows for the year ended 31 March 2023, the Group reported a net cash and cash equivalent outﬂow of

£(45,580,000) for Acquisitions of subsidiaries net of cash acquired. This ﬁgure was the net of the cash

outﬂow of the £61,925,000 referred to above less £16,345,000 corporate cash and bank overdraft

acquired from Appreciate.

The acquired cash and cash equivalents should also have included £64,960,000 of Appreciate’s

non-corporate cash and cash equivalents, comprising Gift card voucher cash and Prepay savers’

cash. The total cash and cash equivalents acquired should therefore have been £81,305,000, and the

Acquisitions of subsidiaries net of cash acquired a net inﬂow of £19,380,000, rather than a net outﬂow

of £(45,580,000). The Movement in clients’ funds, retailer partners’ deposits and card and voucher

deposits in the prior year note to the Consolidated statement of cash ﬂows should have excluded the

£64,960,000 of acquired non-corporate cash and cash equivalents and should therefore have been

reported as an outﬂow of £(25,701,000) rather than an inﬂow of £39,259,000.

The restatement of the comparative ﬁgures in the Group’s Consolidated statement of cash ﬂows and

the related note reduces Cash generated from operations by £64,960,000. It has no impact on the

Group’s opening cash and cash equivalents, net assets or retained earnings. The re-presentation of the

comparative ﬁgures in the Group Consolidated statement of cash ﬂows and the related note, arising

from the changes explained below to the treatment of the movements in Restricted funds held on

deposit (non-corporate) and in Payables – non-corporate, increases Cash generated from operations

by £25,701,000. The net impact of the restatement and the re-presentation is therefore a reduction of

£39,259,000, from the inﬂow of £102,182,000 reported in the prior year ﬁnancial statements, to the

inﬂow of £62,923,000 reported as the comparative ﬁgure in the current year ﬁnancial statements.

Re-presentation of comparative ﬁgures

Consolidated statement of ﬁnancial position and Company statement of ﬁnancial position

In its ﬁnancial statements for the year ended 31 March 2023, the Group classiﬁed its revolving credit

facility as a current liability. The Group reclassiﬁed the liability to non-current as at 31 March 2024, having

adopted early the International Accounting Standard Board’s Non-current Liabilities with Covenants,

which amended IAS 1 Presentation of Financial Statements.

Consolidated statement of cash ﬂows and Note to consolidated statement of cash ﬂows

In its ﬁnancial statements for the year ended 31 March 2023, the Group did not show separately

Movement in Restricted funds held on deposit (non-corporate) and in Movement in payables – non-

corporate. Their inclusion in the current year improves the year-on-year comparability of Cash generated

from operations by excluding movements in Cash and cash equivalents – non-corporate and in Restricted

funds held on deposit (non-corporate).

Note 20. Trade and other payables and note 28. Financial instruments and risk

In its ﬁnancial statements for the year-ended 31 March 2023, the Group included payables in respect

of prepay savers within Trade payables. In the current year, it has included payables in respect of prepay

savers within Payables in respect of gift card vouchers and prepay savers. Trade payables – corporate

therefore represents amounts due unrelated to Cash and cash equivalents – non-corporate and

Restricted funds held on deposit (non-corporate). Additionally, the Group included the net liability in

respect of day one discounts to Love2shop corporate customers and deferred income on Love2shop

service fees within Trade payables. In the current year it has included the net amount within Deferred

income and re-presented the prior year amount.

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, restricted funds held on deposit and equity

attributable to equity holders of the parent company comprising capital, reserves and retained earnings.

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The Group’s policy is to borrow centrally to meet anticipated funding requirements. Our cash and

borrowing capacity provides sufficient funds to meet the foreseeable needs of the Group. At 31 March

2024, the Group had corporate cash of £26.4 million.

The Group carried out a reﬁnancing, completed on 6 June 2024, following which its borrowing facilities

consist of:

• a £45.0 million non-amortising term loan expiring in June 2028;

• a £90.0 million unsecured revolving credit facility expiring in June 2028; and

• a £30.0 million accordion facility (uncommitted) expiring in June 2028 with an option, subject to lender

approval, to extend by a further year.

At 31 March 2024, £57.5 million (2023: £46.5 million) was drawn down from the previous £90.0 million

revolving credit facility and the outstanding balance of the previous amortising term loan was £36.0 million.

The Group has a strengthened statement of ﬁnancial position, with net assets of £121.2 million as at

31 March 2024 (£111.7 million as at 31 March 2023), having made a proﬁt for the year of £35.7 million

(2023: £34.7 million) and generated cash from operations of £65.7 million for the year then ended (2023:

£62.9 million). The Group had net current liabilities of £4.4 million (2023 re-presented: £16.8 million).

The Directors have prepared cash ﬂow forecast scenarios for a period of 3 years from the date of

approval of these ﬁnancial statements, which take 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. In this ‘base case’ scenario, the cash ﬂow forecasts show considerable liquidity headroom

and debt covenants will be met throughout the period.

Additionally, the Directors have carried out an assessment of the principal risks and uncertainties and

applied severe but plausible scenarios to test further the Group going concern assumption. These

scenarios included a reduction in the volume of transactions caused by a severe economic downturn,

transformation and growth plans not delivering intended beneﬁts and material one-off impacts of

regulatory, IT or credit loss events. 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 19.2 pence per share declared in respect of the ﬁnancial year ended 31 March 2024. 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.

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 relevant. Actual results may differ 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 affects only that period, or in the

period of the revision and future periods if the revision affects both current and future periods.

Critical judgement: recognition of cash and cash equivalents and restricted funds held on deposit

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 retains retailer partners’ deposits

as security for those collections. Following the Appreciate acquisition, it also holds, in trust, gift card

voucher deposits on behalf of agents, cardholders and redeemers and prepay savers’ cash on behalf

of savers.

A critical judgement in this area is whether each of the above categories of funds, and restricted funds

held on deposit, are recognised on the consolidated statement of ﬁnancial position, and whether they are

included in cash and cash equivalents for the purpose of the Statement of consolidated cash ﬂows. This

includes evaluating:

(a) the existence of a binding agreement, such as a legal trust, clearly identifying the beneﬁciary of the funds;

(b) the identiﬁcation of funds, ability to allocate and separability of funds;

(d) whether the Group 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 (referred to as ‘Clients’ own funds’) and the related liability are not included on the

consolidated statement of ﬁnancial position.

In all other cases, the Group has access to the interest on such monies and can, having met certain

conditions, withdraw the funds. The cash and corresponding liability are therefore recognised on the

consolidated statement of ﬁnancial position. Corporate cash and cash equivalents consists of cash

freely available to the Group for use in its daily operations and is presented as a separate line item on the

consolidated statement of ﬁnancial position from non-corporate cash and cash equivalents, which is not

freely available to the Group, either because of self-regulation and segregation or due to contractual or

regulatory requirements. Non-corporate cash and cash equivalents comprises:

• Clients’ cash – cash collected on behalf of clients from retailer partners but not yet transferred to

clients. Clients’ cash is held in PayPoint’s bank accounts.

• Gift card voucher cash – cash collected on the issue of gift card vouchers which have not yet expired

or been redeemed.

• Prepay savers’ cash – cash received from customers under a prepayment scheme accumulating

towards their selected savings target. It is converted to gift card vouchers once the target is reached.

• Retailer partners’ deposits – cash received from retailers held as security against their default.

Both corporate cash and non-corporate cash are included within cash and cash equivalents on the

Consolidated statement of cash ﬂows.

Restricted funds held on deposit (non-corporate), comprises gift card voucher cash and prepay savers’

cash. However, unlike the gift card voucher cash and prepay savers’ cash included in non-corporate cash

and cash equivalents, restricted funds held on deposit (non-corporate) may only be accessed after

a minimum of three months. Consequently, they are excluded from cash and cash equivalents on the

Statement of ﬁnancial position and the Consolidated statement of cash ﬂows.

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1. Signiﬁcant Accounting policies continued

The amounts recognised on the Statement of ﬁnancial position as at 31 March 2024 are as follows:

	Year ended	Year ended
	31 March 2024	31 March 2023
	£’000	£’000
Corporate cash	26,392	22,546
Bank overdraft	–	(525)
Clients’ cash	17,276	12,041
GIft card voucher cash	9,779	29,527
Prepay savers’ cash	27,368	8,181
Retailer partners’ deposits	5,955	6,156
Sub-total: non-corporate cash	60,378	55,905
Total cash and cash equivalents	86,770	77,926
Restricted funds held on deposit (non-corporate)	78,198	82,000

Clients’ own funds

Clients’ cash held in trust off the Consolidated statement of ﬁnancial position as at 31 March 2024 is

£60.5 million (2023: £124.3 million).

Critical judgement: reassessment of the Group’s Cards division cash generating units (CGUs)

As explained in note 12, management reassessed its CGUs during the current period, prompted by the

signing of a new partnership with Lloyds Banking Group’s “Cardnet” division in March 2024. This resulted

in the creation of a new Cards CGU, comprising the former Handepay CGU and Merchant Rentals CGU

plus the pre-existing PayPoint cards business.

Consequently, at 31 March 2024, the Group tested for impairment the aggregate goodwill of £45.2

million which arose on the acquisitions of Handepay and Merchant Rentals, by comparing the new,

enlarged Cards CGU’s recoverable amount to its carrying value. That impairment test gave signiﬁcant

headroom, with no reasonably possible changes in any of the discounted cash ﬂow assumptions causing

the Cards CGU’s carrying value to exceed its recoverable amount.

At 31 March 2023, prior to this CGU reassessment, the Group performed separate impairment tests on the

goodwill which arose on the Handepay and Merchant Rentals acquisitions (£35.6 million and £9.6 million

respectively) by comparing the recoverable amounts to the carrying values for each of the Handepay and

Merchant Rentals CGUs. The valuation of the goodwill relating to the Handepay CGU was a critical estimate

in the ﬁnancial year ended 31 March 2023, given that reasonably possible changes in the key assumptions

used to calculate the Handepay CGU’s recoverable amount could have resulted in goodwill impairment.

Critical estimate: valuation of deﬁned beneﬁt pension scheme obligations

The Group has an obligation to pay pension beneﬁts to members of the deﬁned beneﬁt pension scheme

in its Love2shop segment. The present value of the obligations associated with these future beneﬁts

depends on the assumptions selected for several factors, including the following:

• Discount rate

• Rate of inﬂation

• Life expectancy

At each reporting period, management selects appropriate actuarial assumptions for each factor,

based on historical and current trends and with input from a qualiﬁed actuary. These assumptions

are set out in note 16 for both the current and prior reporting periods. Using the set of assumptions

selected by management at 31 March 2024, the net deﬁned beneﬁt pension scheme asset is £286,000

(31 March 2023: £411,000). This comprises scheme assets with a fair value of £16,224,000 less

obligations of £15,938,000 (31 March 2023: assets of £17,752,000 less obligations of £17,341,000).

Relatively small changes to one or more of the above assumptions could result in signiﬁcant changes to

the fair value of the scheme obligations and hence the net scheme asset or liability, as follows:

PF scheme	Change in assumption	Change in liabilities
Discount rate	decrease of 0.50% p.a.	increase by £1,068,000
Discount rate	increase of 0.50% p.a.	decrease by £972,000
Rate of inﬂation	decrease by 0.25% p.a.	decrease by £319,000
Rate of inﬂation	increase by 0.25% p.a.	increase by £367,000
Rate of mortality	decrease in life expectancy of 1 year	increase by £414,000
Rate of mortality	increase in life expectancy of 1 year	decrease by £383,000

Prior year critical judgements and estimates

As explained above, the impact of the Group’s reassessment of its Cards CGUs is that the valuation of

the goodwill relating to the Handepay CGU, which was a critical estimate in the ﬁnancial year ended 31

March 2023, is no longer considered a critical estimate at 31 March 2024.

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. They 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 IFRS measures.

Underlying performance measures (non-IFRS measures)

Underlying performance measures allow shareholders to understand the operational performance in the

year, to facilitate comparison with prior years and to assess trends in ﬁnancial performance. They usually

exclude the impact of one-off, non-recurring and exceptional items and the amortisation of intangible

assets arising on acquisition, such as brands and customer relationships.

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PayPoint Plc Annual Report 2024

Love2shop billings (non-IFRS measure relating solely to the Love2shop segment)

Billings represents the value of goods and services shipped and invoiced to customers during the year

and is recorded net of VAT, rebates and discounts. Billings is an alternative performance measure, which

the directors believe provides an additional measure of the level of activity other than total revenue. This

is due to revenue from multi-retailer redemption products being reported on a ‘net’ basis, whilst revenue

from single-retailer redemption products and other goods are reported on a ‘gross’ basis.

Net revenue (non-IFRS measure)

Net revenue is total revenue less commissions paid (to retailer partners and Park Christmas agents)

and the cost of revenue for items where the Group acts in the capacity as principal (including single-

retailer vouchers and SIM cards). This reﬂects the beneﬁt attributable to the Group’s performance,

eliminating pass-through costs to create comparability of performance under both the agent and

principal revenue models. It is a key consistent measure of the overall success of the Group’s strategy.

A reconciliation from total revenue to net revenue is included in note 4.

Adjusting items (non-IFRS measure)

Adjusting items consist of exceptional items, amortisation of intangible assets arising on acquisition and

movements on convertible loan notes. These items are presented as adjusting items in the consolidated

statement of proﬁt or loss, as they do not reﬂect the operational performance of the Group.

	Year ended	Year ended
	31 March 2024	31 March 2023
	£’000	£’000
Exceptional items – legal fees	2,143	–
Exceptional items – restructuring costs	1,977	–
Exceptional items – acquisition costs expensed	–	4,065
Exceptional items – impairment loss on reclassiﬁcation of investment in associate to asset held for sale	–	1,252
Sub-total: exceptional items – administrative expenses	4,120	5,317
Exceptional items – ﬁnance costs	1,099	287
Amortisation of intangible assets arising on acquisition	8,076	2,574
Net movement on convertible loan notes	186	–
Total adjusting items	13,481	8,178

Total costs (non-IFRS measure)

Total costs comprise other cost of revenue (note 5), administrative expenses, ﬁnance income and ﬁnance

costs. Total costs exclude adjusting items, being exceptional costs and amortisation of intangible assets

arising on acquisition.

Earnings before interest, tax, depreciation and amortisation (EBITDA) (non-IFRS measure)

The Group now presents EBITDA as it is widely used by investors, analysts and other interested parties

to evaluate proﬁtability of companies. This measures earnings before interest, tax, depreciation and

amortisation. See page 70 for a reconciliation from proﬁt before tax to EBITDA.

Adjusted earnings before interest, tax, depreciation and amortisation (Adjusted EBITDA)

(non-IFRS measure)

The Group also now presents adjusted EBITDA, which comprises EBITDA, as deﬁned above, excluding

exceptional items. See page 70 for a reconciliation from proﬁt before tax to adjusted EBITDA.

Underlying earnings per share (non-IFRS measure)

Underlying earnings per share is calculated by dividing the net proﬁt before exceptional items,

amortisation of intangible assets arising on acquisition and movement on convertible loan notes

attributable to equity holders of the parent by the basic or diluted weighted average number of ordinary

shares in issue.

Underlying proﬁt before tax (non-IFRS measure)

The calculation of underlying proﬁt before tax is as follows:

	Year ended	Year ended
	31 March 2024	31 March 2023
	£’000	£’000
Proﬁt before tax	48,182	42,574
Total adjusting items	13,481	8,178
Underlying proﬁt before tax	61,663	50,752

Underlying proﬁt after tax (non-IFRS measure)

The calculation of underlying proﬁt after tax is as follows:

	Year ended	Year ended
	31 March 2024	31 March 2023
	£’000	£’000
Proﬁt after tax	35,687	34,710
Total adjusting items	13,481	8,178
Tax on adjusting items	(3,370)	(644)
Underlying proﬁt after tax	45,798	42,244

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1. Signiﬁcant Accounting policies continued

Net corporate debt (non-IFRS measure)

Net corporate debt represents corporate cash and cash equivalents less bank overdraft and amounts

borrowed under ﬁnancing facilities (excluding IFRS 16 liabilities). The reconciliation of corporate cash and

cash equivalents to net corporate debt is as follows:

	31 March 2024	31 March 2023
	£’000	£’000
Cash and cash equivalents – corporate cash	26,392	22,546
Less:
Bank overdraft	–	(525)
Loans and borrowings (note 24)	(93,935)	(94,415)
Net corporate debt	(67,543)	(72,394)

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 affect 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 inter-group transactions, balances, income and expenses are

eliminated on consolidation. All the subsidiaries in the Group, a list of which are presented in note 14 of

the ﬁnancial statements, apply accounting policies which are consistent with those of the Group.

In the prior year, the Company disposed of its investment in an associate over which it had signiﬁcant

inﬂuence but not control. The results of the associate prior to disposal were not consolidated, but

instead accounted for using the equity method as disclosed in the accounting policy for investments

in associates.

Revenue

Revenue, as reported in the Consolidated statement of proﬁt or loss, is derived from contracts with

customers. It represents the value of services and goods delivered or sold to clients, retailer partners and

SME partners. It 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.

Principal and Agent

Under IFRS15, the Group is a principal (and records revenue on a gross basis) if it controls the promised

good or service before transferring it to the customer. The Group is an agent (and records as revenue the

net amount that it retains for its agency services) if its role is to arrange for another entity to provide the

good or service.

The Group acts as principal for the following Love2shop services:

• Single-retailer redemption products.

• Administrative support for multi-redemption cardholders.

• Multi-redemption non-redemption income.

and for the sale of SIM cards and some e-money through PayPoint.

The Group acts as agent for all services provided through PayPoint, other than the sale of SIM cards and

some e-money, and for the following multi-retailer Love2shop redemption products:

• Love2shop vouchers.

• Mastercards.

Timing of revenue recognition

1. Shopping and e-commerce

The Group 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 are 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.

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 loan is granted

to the retailer.

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PayPoint Plc Annual Report 2024

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.

2. Payments and banking

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 after 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 offering 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.

3. Love2shop

Love2shop revenue comprises:

• Multi-retailer redemption products (Love2shop vouchers, Flexecash® cards and e-codes, and

Mastercards). Service fees earned from the retailers are recognised when the products are redeemed.

• Single-retailer redemption products (Third party vouchers, cards and e-codes). Revenue is recognised

on despatch.

• Multi-retailer cardholder fees, earned for services provided to cardholders such as issue, dealing with

lost, stolen or damaged cards and post-expiry fees. Revenue is recognised when the fees are levied.

Other revenue

Other revenue, as reported in the Consolidated statement of proﬁt or loss, is IFRS9 revenue. It comprises:

1. Payments and Banking

• Interest earned on clients‘ funds and retailer partners’ deposits.

2. Love2shop

• Multi-retailer non-redemption revenue (where the end-user has the right of refund), recognised when

the product has expired and the right of refund lapsed.

• Multi-retailer non-redemption revenue (where the end-user has no right of refund), recognised

on expiry.

• Interest generated by investing cash received from customers. This applies both to cash received for

the Park Christmas Saver business where customers save with the Group throughout the year, and to

all other pre-paid products. Funds associated with customers are included in both restricted funds

held on deposit and cash and cash equivalents.

Non-redemption income represents the unused amount (i.e. the non-refundable unredeemed or unspent

funds) on a voucher, card or e-code at expiry, where there is no right of refund, or on expiry and lapse of

the refund period, where there is a right of refund.

Cost of revenue

Cost of revenue primarily consists of expenses related to delivering our services and products. These

include retailer commissions, the cost of single-retailer vouchers, cards and codes, SIM cards and

e-money (where the Group is principal), depreciation and amortisation of assets used to deliver services,

ﬁeld sales costs, transaction costs, terminal and ATM maintenance costs and telecommunications costs.

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.

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.

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1. Signiﬁcant Accounting policies continued

Pension costs

Deﬁned beneﬁt plan

The fair value of the plan assets less the present value of the deﬁned beneﬁt obligation is recognised in

the Consolidated statement of ﬁnancial position as the retirement beneﬁt asset, after applying the asset

ceiling test. The limit on the recognition of a deﬁned beneﬁt pension asset is measured as the value of

economic beneﬁt available to the Group in the form of refunds or reductions in future contributions, in

accordance with the rules of the pension schemes.

Regular valuations are prepared by independent professionally qualiﬁed actuaries on the projected

unit credit method. The valuations are carried out every three years and updated on a yearly basis for

accounting purposes. These determine the level of contribution required to fund the beneﬁts set out in

the rules of the plans and allow for the periodic increase of pensions in payment.

The scheme is closed to future years’ service but pensions are still dependent on actual ﬁnal salaries.

Consequently, the Group may have an amendment in future where salary rises differ from those

projected. For any related plan amendment, these are recognised immediately in the statement of proﬁt

or loss.

Remeasurements comprise actuarial gains and losses on the obligations and the return on scheme assets

(excluding interest). They are recognised immediately in other comprehensive income in the Consolidated

statement of comprehensive income. Net interest cost is calculated by applying the discount rate on

liabilities to the net pension liability or asset (adjusted for cash ﬂows over the accounting period) and is

recognised within administrative expenses.

Deﬁned contribution plans

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.

Differences 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

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).

The fair value of 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.

Cash-settled share-based payments represents PAYE and NI paid by the Group to HMRC on behalf

of employees receiving share awards. The number of shares issued by the Group to such employees is

correspondingly less than that which would have been issued had the employees settled their income tax

liability themselves.

Finance income

Finance income comprises bank deposit interest received on corporate cash and cash equivalents and

interest income on deﬁned beneﬁt pension scheme assets. Interest is recognised as earned, which

reﬂects the effective interest rate method.

Finance costs

Finance costs comprises interest costs on loans and borrowings and bank overdrafts and interest

expense on the deﬁned beneﬁt pension scheme obligations and leases. Finance costs are recognised as

an expense in the period in which they are incurred.

Exceptional items

Exceptional items are those which are considered signiﬁcant by virtue of their nature, size or incidence.

These items are presented as exceptional within their relevant income statement categories to assist in

the understanding of the performance and ﬁnancial results of the Group, as they do not form part of the

underlying business. The current year exceptional items are:

• £2.0 million restructuring costs related to the Group’s organisational design announced on

8 March 2024.

• £2.1 million legal fees in conjunction with the matter referred to in note 31.

• £1.1 million reﬁnancing costs related to the Group’s renewal of its borrowing facilities.

Taxation

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 differs 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 differences 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 statement of ﬁnancial position date. Deferred tax assets are recognised on deductible temporary

differences 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 differences arising on

investments in subsidiaries, except where the Group is able to control the reversal of the temporary difference

and it is probable that the temporary difference 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 sufficient 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.

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PayPoint Plc Annual Report 2024

Financial instruments

The ﬁnancial asset or liability is initially recognised when the Group becomes party to the contractual

instrument. The Group classiﬁes its derivative ﬁnancial instruments, which consist of convertible loan

note instruments, as held at fair value through proﬁt or loss.

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.

Financial liabilities

Multi-retailer products can be exchanged for goods or services with redemption partners at any

point until they are fully utilised or they expire. Redemption partners are paid the value of the product

redeemed, less the commission earned by the Group. Multi-retailer products are accounted for as a

ﬁnancial liability under IFRS 9 as there is a contractual obligation to deliver cash to the redemption

partners on behalf of the cardholder and there is no unconditional right to avoid delivering cash to settle

this contractual obligation.

A ﬁnancial liability equivalent to the value of the card is recognised at the point of sale. The ﬁnancial

liability is reduced as funds are settled to the redemption partner after the value, part or whole, is spent

with the relevant redemption partner. Proﬁts on products that expire without being redeemed are

recognised in income after the expiry date of the redemption rights, at which point the ﬁnancial liability is

also derecognised.

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 effective 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.

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.

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 – 11 to 15 years

Customer relationships – 3 to 13 years

Developed technology – 1 to 7 years

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.

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1. Signiﬁcant Accounting policies continued

Development expenditure

The Group develops software and other intangible assets including EPoS services and the digital

payments platform which generate future economic beneﬁts through cost savings or revenue from

clients, retailer partners and SME partners. 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 sufficient 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 three and ten years.

Other software 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 software 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.

Investments

Investments in subsidiaries in the Company accounts are stated at cost, including acquisition expenses,

less accumulated impairments.

Investments in convertible debt instruments in the Group and Company accounts are stated at fair value.

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 off 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 land – not depreciated

Freehold building – 40 to 50 years

Leasehold improvements – over the lease term or the useful economic life of 3 to 15 years,

whichever is lower

PayPoint terminals – 5 to 7 years

Card terminals – 3 to 7 years

Other terminals – 5 years

ATMs – 5 years

Other classes of assets – 3 to 5 years

The gain or loss arising on the disposal or retirement of an asset is determined as the difference between

the sale proceeds and the carrying amount of the asset and is recognised in proﬁt or loss.

Impairment of property, plant and equipment and 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 suffered 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.

Inventories

Inventories comprises Love2shop cards, stocks of SIM cards and card terminals. These are stated at

the lower of cost or net realisable value. Net realisable value is based on estimated selling price in the

ordinary course of business less cost of disposal having regard to the age, saleability and condition of

the inventory.

Where the Group trades as principal for the sale of Love2shop cards and SIM cards, the cost of these is

included in inventories. Where the Group 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 and fees due

from clients, fees from retailers and monies due from entities for card and voucher purchases, 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.

The Group 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 the Group, which bears the credit risk for these amounts.

Accrued income

Unbilled revenue is a receivable and is presented as accrued income on the balance sheet.

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PayPoint Plc Annual Report 2024

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. Cash and cash equivalents are subject to insigniﬁcant risk of changes in value.

Cash and cash equivalents subject to trust are recognised on the statement of ﬁnancial position where

the Group:

1) has the ability to control the cash;

2) is entitled to the interest earned on balances; and

3) bears the credit risk.

Where these conditions are not met, the funds are not are recognised on the statement of ﬁnancial

position and are referred to as “clients’ own funds”.

Cash and cash equivalents are classiﬁed as either corporate or non-corporate.

Corporate cash and cash equivalents consists of cash freely available to the Group for use in its

daily operations.

Non-corporate cash and cash equivalents consist of cash which is not freely available to the Group, either

because of self-regulation and segregation or due to contractual or regulatory requirements.

Non-corporate cash comprises:

• Clients’ cash – cash collected on behalf of clients from retailer partners but not yet transferred to

clients. Clients’ cash is held in PayPoint’s bank accounts.

• Gift card voucher cash – cash collected on the issue of gift card vouchers which have not yet expired

or been redeemed.

• Prepay savers’ cash – cash received from customers under a prepayment scheme accumulating

towards their selected savings target. It is converted to gift card vouchers once the target is reached.

• Retailer partners’ deposits – cash received from retailers held as security against their default.

Restricted funds held on deposit (non-corporate)

These are ﬁxed-term bank deposits with original maturity of more than three months. Such funds are

recognised on the statement of ﬁnancial position as the Group has access to the interest on these monies

and can, having met certain conditions, withdraw the funds. However, given the time restrictions over these

monies, they are not included in cash and cash equivalents for the purposes of the statement of cash ﬂows

and statement of ﬁnancial position.

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. An equivalent balance “Items in the course of collection” is held within Trade and other

receivables (note 18).

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.

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 after 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.

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 effective interest rate method.

Leases

The Group assesses whether a contract is, or contains, a lease at inception of the contract. A contract is,

or contains, a lease if the contract conveys the right to control the use of an identiﬁed asset for a period

of time in exchange for consideration.

At inception or on reassessment of a contract that contains a lease component, the Group allocates the

consideration in the contract to each lease component based on their relative standalone price. However,

for leases of land and buildings in which it is a lessee, the Group has elected not to segregate non-lease

components and account for the lease and non-lease components as a single lease component.

As a lessee

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 or, if that rate cannot be

readily determined, the Group’s incremental borrowing rate. 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.

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1. Signiﬁcant Accounting policies continued

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 using the straight-line method

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.

As a lessor

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.

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.

Merger reserve

Merger reserve represents amounts in excess of the nominal value of shares issued, where shares are

issued in part or full consideration of an acquisition.

2. Segmental reporting

Segmental information

The Group considers its Love2shop business to be a separate segment from its legacy PayPoint

business, since discrete ﬁnancial information is prepared for Love2shop and it offers different products

and services. Furthermore, the chief operating decision maker (CODM) reviews separate monthly internal

management reports (including ﬁnancial information) for both Love2shop and PayPoint to allocate

resources and assess performance.

The material products and services offered by each segment are as follows:

PayPoint

• Card payment services to retailers, including leased payment devices.

• ATM cash machines.

• Bill payment services and cash top-ups to individual consumers, through a network of retailers.

• Parcel delivery and collection.

• Retailer service fees.

• Digital payments.

Love2shop

• Shopping vouchers, cards and e-codes which customers may redeem with participating retailers.

These are either ‘single-retailer’ or ‘multi-retailer’. The former may only be used at the speciﬁed retailer,

whilst the latter may be redeemed at one or more of over 200 retailers.

• Christmas savings club, to which customers make regular payments throughout the year to help spread

the cost of Christmas, before converting to a voucher.

Information related to each reportable segment is set out below. Segment proﬁt/(loss) before tax and

adjusting items is used to measure performance because management believes that this information

is the most relevant in evaluating the results of the respective segments relative to other entities that

operate in the same industries.

8Y^O]^Y^ROMYX]YVSNK^ON¨XKXMSKV]^K^OWOX^] continued

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PayPoint Plc Annual Report 2024

	PayPoint	Love2shop	To ta l
Year-ended 31 March 2024	£’000	£’000	£’000
Revenue	167,717	110,099	277,816
Other revenue	2,013	26,538	28,551
Segment revenue	169,730	136,637	306,367
Segment proﬁt before tax and adjusting items	50,487	11,176	61,663
Exceptional items	(4,369)	(850)	(5,219)
Amortisation of intangible assets arising on acquisition	(2,137)	(5,939)	(8,076)
Net movement in convertible loan notes	(186)	–	(186)
Segment proﬁt before tax	43,795	4,387	48,182
Interest income	163	1,227	1,390
Interest expense	3,065	5,343	8,408
Depreciation and amortisation	12,206	8,459	20,665
Capital expenditure	13,628	2,578	16,206
Segment assets	271,068	248,042	519,110
Segment liabilities	173,280	224,670	397,950
Segment equity	97,788	23,372	121,160

A business division analysis of revenue has been provided in note 3.

The £306.4 million (2023: £167.7 million) total revenue and £222.5 million (2023: £228.1 million)

non-current assets at 31 March 2024 are geographically located within the UK.

3. Revenue

Disaggregation of revenue

Revenue

	Year ended	Year ended
	31 March 2024	31 March 2023
	£’000	£’000
Shopping
Service fees	19,653	17,947
Card payments	23,998	24,293
Card terminal leases	8,708	7,542
ATMs	11,805	12,920
Other shopping	4,071	3,355
Shopping total	68,235	66,057
e-commerce total	31,754	20,183
Payments and banking
Cash – bill payments	31,264	34,135
Cash – top-ups	11,434	11,959
Digital	16,197	18,081
Cash through to digital	7,658	7,769
Other payments and banking	1,175	1,347
Payments and banking total	67,728	73,291
Love2shop total – voucher and card service fee	110,099	5,689
Revenue	277,816	165,220

Service fee revenue of £19.7 million (2023: £17.9 million) and management fees, set-up fees and upfront

lump sum payments of £1.3 million (2023: £0.7 million) are recognised on a straight-line basis over the

period of the contract. Card terminal leasing revenue of £8.7 million (2023: £7.5 million) 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. Multi-retailer voucher, card and e-code service fee revenue is recognised on

redemption by the customer. The remainder of revenue is recognised at the point in time when each

transaction is processed. The usual timing of payment by PayPoint customers is on fourteen-day terms.

The usual timing of Love2shop’s corporate customers is 15 day terms; its consumer 14 pay on ordering .

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8Y^O]^Y^ROMYX]YVSNK^ON¨XKXMSKV]^K^OWOX^] continued

3. Revenue continued

Revenue subject to variable consideration of £13.6 million (2023: £13.5 million) exists where the

consideration to which the Group is entitled 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 price 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.

Love2shop revenue is recorded net of corporate discounts.

Other Revenue

	Year ended	Year ended
	31 March 2024	31 March 2023
	£’000	£’000
Payments and banking
Interest revenue	2,013	575
Love2shop
Interest revenue	6,453	325
Non-redemption revenue	20,085	1,603
Love2shop total	26,538	1,928
Total other revenue	28,551	2,503

Other revenue comprises:

• Multi-retailer voucher and card non-redemption revenue is recognised on expiry (where the customer

has no right of refund) or on expiry and lapse of the refund period (where the customer has a right

of refund).

• Interest revenue generated by investing clients’ funds, retailer partners’ deposits, gift card cash, prepay

savers’ cash and restricted funds held on deposit.

Contract balances

Notes

		31 March 2024	31 March 2023
		£’000	£’000
Trade receivables	18	23,666	17,703
Net investment in ﬁnance lease receivables	23	1,837	3,855
Accrued income	18	3,250	5,241
Contract assets – capitalisation of fulﬁlment costs	18	3,446	2,910
Contract liabilities – deferral of set-up and development fees	20	(267)	(710)
Deferred income (31 March 2023 re-presented 1 )	20	(3,960)	(3,363)

1 See note 1 for an explanation of the re-presentation.

The Group’s balances arise from differences 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 the Group’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 signiﬁcant increase in the balance

compared with prior year is principally due to the change in billing a major customer from weekly to

monthly invoices.

• The net investment in ﬁnance lease receivables balance represents the total minimum lease payments

receivable by 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 signiﬁcant decrease in the balance compared with prior year is due to the fact that most

new sales are now operating leases.

• The accrued income is a receivable which represents the Group’s entitlement to consideration from

clients and SME and retailer partners for services and goods delivered but not yet invoiced at the

reporting date, as well as accrued interest on restricted funds held on deposit.

• 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 at

the reporting date, which is released with revenue recognised upon delivery of the performance

obligations. The consideration is received from clients, SME and retailer partners.

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4. Alternative performance measures

Net revenue

The reconciliation between total revenue and net revenue is as follows:

	Year ended	Year ended
	31 March 2024	31 March 2023
	£’000	£’000
Service revenue – Shopping	68,235	66,057
Service revenue – e-commerce	24,946	16,085
Service revenue – Payments and banking	66,579	71,994
Service revenue – multi-retailer redemption products	18,145	1,217
Service revenue – other	4,281	128
Sale of goods – single-retailer redemption products	87,554	4,325
Sale of goods – other	1,268	1,316
Royalties – e-commerce	6,808	4,098
Other revenue – multi-retailer non-redemption income	20,085	1,603
Other revenue – interest on clients’ funds, retailer partners’ deposits, gift
card cash, prepay savers’ cash and restricted funds held on deposit	8,466	900
Total revenue	306,367	167,723
less:
Retailer partners’ commissions	(41,829)	(34,369)
Cost of single-retailer cards and vouchers	(83,403)	(4,208)
Cost of SIM card and e-money sales as principal	(163)	(199)
Total net revenue	180,972	128,947

Total costs

Total costs, excluding adjusting items, comprises:

	Year ended	Year ended
	31 March 2024	31 March 2023
	£’000	£’000
Other costs of revenue (note 5)	33,569	25,481
Administrative expenses – excluding adjusting items	78,722	50,083
Finance income (note 9)	(1,390)	(87)
Finance costs (note 9)	8,408	2,718
Total costs	119,309	78,195

5. Cost of revenue

	Year ended		Year ended
	31 March 2024		31 March 2023
	£’000		£’000
Retailer partners’ commissions	41,829		34,369
Cost of single-retailer cards and vouchers	83,403		4,208
Cost of SIM card and e-money sales as principal	163		199
Total cost of revenue deducted for net revenue	125,395		38,776
Depreciation and amortisation	9,694	7,18	6
Field sales costs	9,025		8,876
Transaction costs	5,062		3,477
ATM costs	1,195		1,148
Card fees	996		1,096
Other	7,597		3,698
Total other costs of revenue	33,569		25,481
Total cost of revenue	158,964		64,257

6. Exceptional items

	Year ended	Year ended
	31 March 2024	31 March 2023
	£’000	£’000
Legal fees – administrative expenses	2,143	–
Restructuring costs – administrative expenses	1,977	–
Acquisition costs expensed – administrative expenses	–	4,065
Impairment loss on reclassiﬁcation of investment in associate
to asset held for sale	–	1,252
Total exceptional items included in operating proﬁt	4,120	5,317
Reﬁnancing costs expensed – ﬁnance costs	1,099	287
Total exceptional items included in proﬁt or loss	5,219	5,604

The tax impact of the exceptional items is £1,305,000 (2023: £nil).

Exceptional items are those which are considered signiﬁcant by virtue of their nature, size or incidence.

These items are presented as exceptional within their relevant income statement categories to assist in

the understanding of the performance and ﬁnancial results of the Group, as they do not form part of the

underlying business.

The current period legal fees relate to the Group’s defence of two claims served on a number of its

companies in connection with issues addressed by commitments accepted by Ofgem as a resolution

of its concerns raised in Ofgem’s Statement of Objections received by the Group in September 2020.

The Group remains conﬁdent that it will successfully defend both claims. See note 31.

The current period restructuring costs relate to the organisational design of the Group communicated by

management to all staff on 6 March 2024. See note 21.

The current period reﬁnancing costs comprise legal and professional fees incurred by the Group in

respect of its new borrowing facilities referred to in note 1, and the write-off of the unamortised balance

of capitalised costs arising on the previous reﬁnancing exercise.

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7. Employee information

	Year ended	Year ended
	31 March 2024	31 March 2023
	£’000	£’000
Average number of employees
Sales, distribution and marketing	236	199
Operations and administration	732	506
Total	968	705
Employee costs during the year (including Directors)
Wages and salaries	47,612	32,257
Social security costs	4,767	3,303
Pension costs	3,765	2,588
Redundancy and termination costs	957	86
Total	57,101	38,234

Directors’ emoluments, pension contributions and share options are disclosed in the Remuneration

Committee Report on pages 100 to 119. See note 29 for Directors’ remuneration costs.

Included within wages and salaries is a share-based payment charge of £1.7 million (2023: £1.3 million.)

Refer to note 26 for disclosure of share awards made in the year.

Pension arrangements

The Group administers a number of deﬁned contribution schemes for employees, including those taken

on following the acquisition of Appreciate Group PLC. The pension charge for the year for the deﬁned

contribution schemes was £3.6 million (2023: £2.5 million).

The accrual for deﬁned contribution pension contributions at the statement of ﬁnancial position date

was £0.4 million (2023: £0.1 million).

Following the acquisition of Appreciate Group PLC, the Group also operates a deﬁned beneﬁt scheme

at 31 March 2024 (see note 16). The pension charge for the year for the deﬁned beneﬁt scheme was

£0.2 million (2023: £0.1 million).

8. Proﬁt for the year

	Year ended	Year ended
	31 March 2024	31 March 2023
	£’000	£’000
Proﬁt is after charging:
Depreciation on property, plant and equipment – cost of revenue	(5,927)	(4,336)
Amortisation of intangible assets – cost of revenue	(3,767)	(2,850)
Depreciation of property, plant and equipment – administrative expenses	(1,391)	(586)
Amortisation of intangible assets – administrative expenses	(9,580)	(2,705)
Loss on disposal of property, plant and equipment –
administrative expenses	(111)	(1,090)
Research and development costs – administrative expenses	(318)	(350)

	Year ended	Year ended
	31 March 2024	31 March 2023
	£’000	£’000
Auditor’s remuneration:
Fees payable to the Company’s auditor for the audit of the Company’s annual accounts	300	250
Fees payable to the Company’s auditor for the audit of the Company’s subsidiaries	1,290	1,300
Additional fees payable to the Company’s auditor
in respect of prior years’ audits	–	167
Total audit fees	1,590	1,717
Fees payable to the Group’s auditor for the review of the interim results	60	50
Audit-related assurance services	60	50
Total auditor’s remuneration	1,650	1,767

A description of the work of the Audit Committee is set out on pages 94 to 99 and includes an

explanation of how auditor independence is safeguarded by limitation of non-audit services.

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9. Finance income and costs

	Year ended	Year ended
	31 March 2024	31 March 2023
	£’000	£’000
Finance income
Bank interest receivable and other	554	29
Interest income on deﬁned beneﬁt pension scheme assets	836	58
	1,390	87
Finance costs
Interest on loans	7,228	2,612
Bank interest payable	86	19
Interest expense on deﬁned beneﬁt pension scheme obligations	819	55
Lease and other interest	275	32
Total ﬁnance costs	8,408	2,718

10. Tax

	Year ended	Year ended
	31 March 2024	31 March 2023
	£’000	£’000
Current tax
Charge for current year	9,293	7,829
Adjustment in respect of prior years	(131)	(806)
Current tax charge	9,162	7,023
Deferred tax
Charge for current year	3,083	1,144
Adjustment in respect of prior years	250	(303)
Deferred tax charge	3,333	841
Total income tax charge	12,495	7, 86 4

	Year ended	Year ended
	31 March 2024	31 March 2023
	£’000	£’000
Tax charged directly to other comprehensive income
Deferred tax on movement on deﬁned beneﬁt pension scheme asset	(82)	86

The income tax charge is based on the UK statutory rate of corporation tax for the year of 25%

(2023: 19%). Deferred tax has been calculated using the enacted tax rates that are expected to apply

when the liability is settled, or the asset realised. During the prior ﬁnancial year, an increase in the main

rate of UK corporation tax from 19% to 25% with effect from 1 April 2023 was enacted. Deferred tax has

been calculated based on the rate applicable at the date timing differences are expected to reverse.

The income tax charge of £12.5 million (2023: £7.9 million) on proﬁt before tax of £48.2 million

(2023: £42.6 million) represents an effective tax rate

of 25.9% (2023: 18.5%). This is higher than the UK

statutory rate of 25% due to adjustments in respect of share-based payments, disallowable expenses

and prior year adjustments.

The tax charge for the year is reconciled to proﬁt before tax, as set out in the consolidated statement of

proﬁt or loss, as follows:

	Year ended	Year ended
	31 March 2024	31 March 2023
	£’000	£’000
Proﬁt before tax	48,182	42,574
Tax at the UK corporation tax rate of 25% (2023: 19%)	12,046	8,089
Tax effects of:
Disallowable expense – exceptional items	–	1,119
Disallowable expense – other	138	1
Adjustments in respect of prior years	119	(1,109)
Capital allowance super deduction	–	(390)
Tax impact of share-based payments	192	(121)
Revaluation of deferred tax liability	–	275
Actual amount of tax charge	12,495	7,864

1 Effective tax rate is the tax cost as a percentage of proﬁt before tax.

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11. Earnings per share

Basic and diluted earnings per share are calculated on the following proﬁt and number of shares.

	Year ended	Year ended
	31 March 2024	31 March 2023
	£’000	£’000
Basic
Total proﬁt for basic and diluted earnings per share is the net proﬁt
attributable to equity holders of the parent	35,687	34,710
Underlying
Underlying proﬁt for basic and diluted earnings per share is the net
proﬁt before adjusting items attributable to equity holders of the parent (note 1)	45,798	42,244

	31 March 2024	31 March 2023
	Number	Number
	of shares	of shares
	Thousands	Thousands
Weighted average number of ordinary shares in issue
(for basic earnings per share)	72,642	69,281
Potential dilutive ordinary shares:
Restricted share awards	670	588
Deferred annual bonus scheme	184	104
SIP and other Weighted average number of ordinary shares in issue	89	60
(for diluted earnings per share)	73,585	70,033

The SIP and other dilutive shares only have a passage of time restriction on them, hence are included

above but not in the total number of outstanding share awards at the end of the year.

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.

During the year management reassessed the composition of CGUs in its Cards division. Handepay and

Merchant Rentals had, since their acquisition in February 2021, become increasingly integrated with the

Group’s pre-existing Cards business. A new partnership with Lloyds Banking Group’s “Cardnet” Division,

signed in March 2024, cemented the trend. Furthermore, the card acquiring revenue stream of Handepay

and terminal rental revenue of Merchant Rentals are inextricably linked, with the same merchant customer

base. Management therefore deems it appropriate to recognise a single Cards CGU with effect from

March 2024, covering the activities of Handepay, Merchant Rentals and its pre-existing Cards business.

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 growth revenue 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 shift 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.

All CGUs assessed generate value-in-use in excess of their carrying values. No reasonably possible

change in any of the assumptions would cause their carrying values to exceed their recoverable amounts.

Management does not consider that climate change factors would adversely impact its goodwill

impairment assessments.

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PayPoint Plc Annual Report 2024

				Merchant		Digital
	Love2shop	i-movo	Handepay	Rentals	Cards	payments	To ta l
Group – goodwill	CGU	CGU	CGU	CGU	CGU	CGU	CGUs
values	£’000	£’000	£’000	£’000	£’000	£’000	£’000
At 31 March 2022	–	6,867	35,632	9,586	–	5,583	57,668
Acquisition of business	59,759	–	–	–	–	–	59,759
At 31 March 2023	59,759	6,867	35,632	9,586	–	5,583	117,427
Reclassiﬁcation in the year	–	–	(35,632)	(9,586)	45,218	–	–
At 31 March 2024	59,759	6,867	–	–	45,218	5,583	117,427

The key assumptions used in the estimation of the recoverable amount are set out below. The values

assigned to the key assumptions represent management’s assessment of future trends in the relevant

industries and have been based on historical data from both external and internal sources.

Assumptions used for annual impairment tests

				Merchant		Digital
	Love2shop	i-movo	Handepay	Rentals	Cards	Payments
	CGU	CGU	CGU	CGU	CGU	CGU
At 31 March 2024
Carrying value of cash
generating unit	£68.0m	£9.1m	–	–	£72.8m	£11.3m
Pre-tax risk adjusted
discount rate	17.1%	17.5%	–	–	17.6%	17.1%
Terminal growth rate	2.0%	(8.0)%–2.0%	–	–	2.0%	2.0%
At 31 March 2023
Carrying value of cash
generating unit	£68.0m	£8.6m	£45.6m	£23.7m	–	£11.7m
Pre-tax risk adjusted
discount rate	16.0%	16.6%	15.7%	14.6%	–	15.1%
Terminal growth rate	2.0%	(8.0)%–2.0%	2.0%	2.0%	–	2.0%

The terminal growth rate assumption applied to the i-movo CGU in the current and prior periods reﬂects

the c. 8% p.a. revenue decline from a signiﬁcant customer of that business.

13. Other intangible assets

Group

	Development	Customer	Brands and	Regulatory	Developed
	costs	relationships	trademarks	licences	technology	Tota l
	£’000	£’000	£’000	£’000	£’000	£’000
Cost
At 31 March
2023	34,782	40,256	20,741	236	7,647	103,662
Additions	3,087	–	–	–	2,019	5,106
Disposals	(6,007)	–	–	–	–	(6,007)
At 31 March
2024	31,862	40,256	20,741	236	9,666	102,761
Accumulated
amortisation
At 31 March
2023	21,378	4,345	2,042	48	556	28,369
Charge for the year – acquired
intangible assets	–	6,929	1,123	24	–	8,076
Charge for the year – other intangible assets	3,263	–	504	–	1,504	5,271
Disposals	(6,007)	–	–	–	–	(6,007)
At 31 March
2024	18,634	11,274	3,669	72	2,060	35,709
Carrying
amount
At 31 March
2024	13,228	28,982	17,072	164	7,606	67,052
At 31 March
2023	13,404	35,911	18,699	188	7,091	75,293

Included within development costs at 31 March 2024 are £1.7 million (2023: £3.3 million) of assets under

construction which were not being amortised at 31 March 2024.

At 31 March 2024, the Group had entered into contractual commitments for development cost additions

amounting to £0.6 million (2023: £0.2 million).

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13. Other intangible assets continued

Group

	Development	Customer	Brands and	Regulatory	Developed
	costs	relationships	trademarks	licences	technology	To ta l
	£’000	£’000	£’000	£’000	£’000	£’000
Cost
At 31 March
2022	32,146	18,608	8,951	236	306	60,247
Acquisition of business	–	21,648	11,790	–	7,006	40,444
Additions	4,079	–	–	–	335	4,414
Disposals	(1,443)	–	–	–	–	(1,443)
At 31 March
2023	34,782	40,256	20,741	236	7,647	103,662
Accumulated
amortisation
At 31 March
2022	20,477	2,198	1,252	24	306	24,257
Charge for the year – acquired
intangible assets	–	2,147	286	24	117	2,574
Charge for the year – other intangible assets	2,344	–	504	–	133	2,981
Disposals	(1,443)	–	–	–	–	(1,443)
At 31 March
2023	21,378	4,345	2,042	48	556	28,369
Carrying amount
At 31 March
2023	13,404	35,911	18,699	188	7,091	75,293
At 31 March
2022	11,669	16,410	7,699	212	–	35,990

Acquisition of business in the prior year relates to Appreciate Group PLC.

14. Investments

The Company, a holding company, has investments (directly or indirectly) in wholly owned subsidiaries

and convertible loan notes, as follows:

A) Investments in wholly owned subsidiaries

Active companies

	Direct or
	indirect		Country of
Company name	investment	Principal activity (registered address)	registration
Appreciate Ltd	Direct	Holding company (Valley Road, Birkenhead, Merseyside, CH41	England
		7ED)	and Wales
Collect+ Brand Limited	Indirect	Holder of Collect+ brand (1 The Boulevard, Shire Park,	England
		Welwyn Garden City, Hertfordshire AL7 1EL)	and Wales
Collect+ Holdings	Direct	Holding company (1 The Boulevard, Shire Park,	England
Limited		Welwyn Garden City, Hertfordshire AL7 1EL)	and Wales
Event Payment	Indirect	Provision of business support services (1 The Boulevard,	England
Services Limited		Shire Park, Welwyn Garden City, Hertfordshire AL7 1EL)	and Wales
Handepay Limited	Direct	Sales business in merchant acquiring industry (1 The Boulevard,	England
		Shire Park, Welwyn Garden City, Hertfordshire AL7 1EL)	and Wales
i-movo Holdings	Direct	Holding company (1 The Boulevard, Shire Park, Welwyn Garden	England
Limited		City, Hertfordshire AL7 1EL)	and Wales
i-movo Limited	Indirect	Provision of digital voucher service (1 The Boulevard, Shire Park,	England
		Welwyn Garden City, Hertfordshire AL7 1EL)	and Wales
MBL Holdco Limited	Indirect	Holding company (Valley Road, Birkenhead, Merseyside, CH41	England
		7ED)	and Wales
MBL Solutions Limited	Indirect	Gift card processing (Valley Road, Birkenhead, Merseyside,	England
		CH41 7ED)	and Wales
Merchant Rentals	Direct	Provision of asset ﬁnance and leasing solutions to merchant	England
Limited		acquiring industry (1 The Boulevard, Shire Park, Welwyn Garden	and Wales
		City, Hertfordshire AL7 1EL)
Park Card Marketing	Indirect	Card administration support services (Valley Road, Birkenhead,	England
Services Limited		Merseyside, CH41 7ED)	and Wales
Park Card Services	Indirect	Electronic money issuer (Valley Road, Birkenhead, Merseyside,	England
Limited		CH41 7ED)	and Wales
Park Direct Credit	Indirect	Debt collection services (Valley Road, Birkenhead, Merseyside,	England
Limited		CH41 7ED)	and Wales
Park Financial Services	Indirect	Insurance broking services (Valley Road, Birkenhead, Merseyside,	England
Limited		CH41 7ED)	and Wales
Park Group UK Limited	Indirect	Holding company (Valley Road, Birkenhead, Merseyside, CH41	England
		7ED)	and Wales
Park Retail Limited	Indirect	Gifting and prepayment (Valley Road, Birkenhead, Merseyside,	England
		CH41 7ED)	and Wales
PayPoint Collections	Direct	Provision of a payment collection service (1 The Boulevard,	England
Limited		Shire Park, Welwyn Garden City, Hertfordshire AL7 1EL)	and Wales
PayPoint Network	Direct	Management of an electronic payment service (1 The Boulevard,	England
Limited		Shire Park, Welwyn Garden City, Hertfordshire AL7 1EL)	and Wales

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PayPoint Plc Annual Report 2024

		Direct or
		indirect		Country of
Company name		investment	Principal activity (registered address)	registration
PayPoint Payment		Direct	Provision of regulated payments services (1 The Boulevard,	England
Services Limited			Shire Park, Welwyn Garden City, Hertfordshire AL7 1EL)	and Wales
PayPoint Retail		Direct	Provision of retail services (1 The Boulevard, Shire Park, Welwyn	England
Solutions Limited			Garden City, Hertfordshire AL7 1EL)	and Wales
RSM 2000	Limited	Direct	Provision of regulated payments services (1 The Boulevard,	England
			Shire Park, Welwyn Garden City, Hertfordshire AL7 1EL)	and Wales

The following wholly owned UK subsidiaries will take advantage of the audit exemption set out within

Section 479A of the Companies Act 2006 for the year ended 31 March 2024.

• MBL Holdco Limited

• MBL Solutions Limited

• Park Direct Credit Limited

• Park Financial Services Limited

• Park Group UK Limited

The Company will guarantee the debts and liabilities of the above UK subsidiary undertakings at

31 March 2024 in accordance with Section 479C of the Companies Act 2006. The Company has

assessed the probability of loss under the guarantee as remote.

Dormant companies

	Direct or
	indirect		Country of
Company name	investment	Principal activity (registered address)	registration
Agency Administration	Indirect	Dormant company (Valley Road, Birkenhead, Merseyside,	England
Limited		CH41 7ED)	and Wales
Brightdot Limited	Indirect	Dormant company (Valley Road, Birkenhead, Merseyside,	England
		CH41 7ED)	and Wales
Cheshire Bank Limited	Indirect	Dormant company (Valley Road, Birkenhead, Merseyside,	England
		CH41 7ED)	and Wales
Cheshire Securities	Indirect	Dormant company (Valley Road, Birkenhead, Merseyside,	England
Limited		CH41 7ED)	and Wales
Country Christmas	Indirect	Dormant company (Valley Road, Birkenhead, Merseyside,	England
Savings Club Limited		CH41 7ED)	and Wales
Family Hampers	Indirect	Dormant company (Valley Road, Birkenhead, Merseyside,	England
Limited		CH41 7ED)	and Wales
Handling Solutions	Indirect	Dormant company (Valley Road, Birkenhead, Merseyside,	England
Limited		CH41 7ED)	and Wales
Heritage Hampers	Indirect	Dormant company (Valley Road, Birkenhead, Merseyside,	England and
Limited		CH41 7ED)	Wales
High Street Vouchers	Indirect	Dormant company (Valley Road, Birkenhead, Merseyside,	England
Limited		CH41 7ED)	and Wales
Maxim B2B Limited	Indirect	Dormant company (Valley Road, Birkenhead, Merseyside,	England
		CH41 7ED)	and Wales

	Direct or
	indirect		Country of
Company name	investment	Principal activity (registered address)	registration
Opal Loans Limited	Indirect	Dormant company (Valley Road, Birkenhead, Merseyside,	England
		CH41 7ED)	and Wales
Park Christmas	Indirect	Dormant company (Valley Road, Birkenhead, Merseyside,	England
Savings Club Limited		CH41 7ED)	and Wales
Park.com Limited	Indirect	Dormant company (Valley Road, Birkenhead, Merseyside,	England
		CH41 7ED)	and Wales
Park Connect Limited	Indirect	Dormant company (Valley Road, Birkenhead, Merseyside,	England
		CH41 7ED)	and Wales
Park Food	Indirect	Dormant company (Valley Road, Birkenhead, Merseyside,	England
(Warrington) Limited		CH41 7ED)	and Wales
Park Group Secretaries	Indirect	Dormant company (Valley Road, Birkenhead, Merseyside,	England
Limited		CH41 7ED)	and Wales
Park Hamper Company	Indirect	Dormant company (Valley Road, Birkenhead, Merseyside,	England
Limited		CH41 7ED)	and Wales
Park Travel Services	Indirect	Dormant company (Valley Road, Birkenhead, Merseyside,	England
Limited		CH41 7ED)	and Wales
PayPoint Trust	Indirect	Dormant company (1 The Boulevard, Shire Park, Welwyn Garden	England
Managers Limited		City, Hertfordshire AL7 1EL)	and Wales
The Perfect Hamper	Indirect	Dormant company (Valley Road, Birkenhead, Merseyside,	England
Co. Limited		CH41 7ED)	and Wales
Wirral Cold Store	Indirect	Dormant company (Valley Road, Birkenhead, Merseyside,	England
Limited		CH41 7ED)	and Wales

Movement in investments in wholly owned subsidiaries

Company

	31 March	31 March
	2024	2023
	£’000	£’000
Balance at the beginning of the year	221,837	139,105
Acquisitions of wholly owned subsidiaries	–	82,732
Balance at the end of the year	221,837	221,837

In the prior year, PayPoint acquired 100% of the share capital of Appreciate Group PLC for consideration

of £79.2million, comprising cash of £61.9 million plus equity of £17.3 million in the form of 3.6 million

issued shares and based on the closing share price of £4.84 per share at 28 February 2023.

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.

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14. Investments continued

B) Convertible loan notes

The movements in the fair values of the convertible loan note investments in the prior and current years

are as follows:

	Optus Homes	OBConnect	Tota l
Group and Company	Ltd £’000	Ltd £’000	£’000
At 31 March 2022	750	–	750
Addition in the year	–	3,000	3,000
At 31 March 2023	750	3,000	3,750
Addition in the year	125	–	125
Fair value (loss)/gain through proﬁt or loss account	(875)	689	(186)
At 31 March 2024	–	3,689	3,689

No unrealised gains or losses arose in the current or prior year.

Optus Homes Ltd

The Company purchased a convertible loan note of nominal amount £750,000 from Optus Homes Ltd

on 25 March 2022, with an additional amount of £125,000 on 15 November 2023. Optus has developed

in-house software which facilitates property maintenance for the beneﬁt of landlords and tenants.

Landlords using the ‘App’ are charged a monthly fee per tenant, on a sliding scale.

The investment is structured as a two-year, zero-coupon convertible loan note of £750,000 (with

a potential extension of up to an additional £500,000 funding subject to the Company’s approval)

which will be settled into a variable number of Optus’s equity shares on 1 April 2025. Upon maturity,

the Company’s equity holding will be determined by the value of the loan as a proportion of the Optus

valuation post-conversion, based on a ‘cap and ﬂoor’ method, falling between 20%–37% (based on an

investment of £750,000) or 29%–40% (based on an investment of £1,250,000). In turn, the proportional

share depends on the number of landlords at the conversion date.

Based on the key terms of the convertible loan note and investment agreement, the investment is

recognised at fair value, with any gains or losses recognised through the statement of proﬁt or loss.

The fair value is determined by using a discounted cash ﬂow valuation applied to a 5-year forecast

extrapolated to perpetuity, using the following ﬁnancial assumptions. The discount rate reﬂects

management’s view of the level of risk associated with the business:

	31 March 2024	31 March 2023
Discount rate	23.4%	25.0%
Corporation tax rate	25.0%	25.0%
Terminal growth rate	2.0%	2.0%

The discounted cash ﬂow valuation derived from the 5-year forecast and the above assumptions are

such that management has written off to the statement of proﬁt or loss the entire £875,000 carrying

value in the current year, reported within adjusting items.

OBConnect Ltd

The Company purchased a convertible loan note of nominal amount £3.0 million on 7 July 2022 from

OBConnect Ltd, which provides open banking services to banks and other ﬁnancial institutions. The loan

converts into a 22.5% equity stake in OBConnect Ltd’s ordinary shares on 7 July 2025.

Based on the key terms of the convertible loan note and investment agreement, the investment is

recognised at fair value, with any gains or losses recognised through the statement of proﬁt or loss.

The current year discounted cash ﬂow valuation is based on a 5-year forecast extrapolated to perpetuity,

using the following ﬁnancial assumptions. The discount rate reﬂects management’s view of the level of

risk associated with the business:

	31 March 2024	31 March 2023
Discount rate	18.9%	20.0%
Corporation tax rate	25.0%	25.0%
Terminal growth rate	2.0%	2.0%

The fair value as at 31 March 2024 determined using the discounted cash ﬂow method was £3,689,000.

Management has therefore recognised a £689,000 gain in the statement of proﬁt or loss in the current

year, reported within adjusting items.

C) Other investment

In the prior period the Company acquired 2.5% of the ordinary share capital of OBConnect Ltd for

consideration of £251,000. This is in addition to the convertible loan note in OBConnect Ltd referred

to above.

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15. Property, plant and equipment

		Terminals
	Terminals	and ATMs
	and ATMs –	– non-
	Operating	operating	Fixtures,
	lease	lease	ﬁttings and	Leasehold	Land and	Right-of-
	assets	assets	equipment	improvements	buildings	use assets	Tota l
	£’000	£’000	£’000	£’000	£’000	£’000	£’000
Cost
At 31 March 2023	5,139	40,828	4,112	1,169	11,097	4,589	66,934
Additions	7,565	2,818	717	–	–	410	11,510
Disposals	(94)	(4,772)	–	–	–	(138)	(5,004)
Transfer	–	429	(429)	–	–	–	–
Remeasurement of leased asset	–	–	–	–	–	(46)	(46)
At 31 March 2024	12,610	39,303	4,400	1,169	11,097	4,815	73,394
Accumulated
depreciation
At 31 March 2023	806	31,951	2,102	9	2,362	447	37,677
Charge for the year	2,456	3,258	369	102	225	908	7,318
Disposals	(18)	(4,737)	–	–	–	(138)	(4,893)
Transfer	–	(803)	825	–	(22)	–	–
At 31 March 2024	3,244	29,669	3,296	111	2,565	1,217	40,102
Carrying amount
At 31 March 2024	9,366	9,634	1,104	1,058	8,532	3,598	33,292
At 31 March 2023	4,333	8,877	2,010	1,160	8,735	4,142	29,257

The remeasurement of leased asset relates to hosting services in the Love2shop segment. There is a

corresponding reduction in the lease liability (see note 23).

At 31 March 2024, the Group had no contractual commitments for the acquisition of property, plant and

equipment (2023: £1.0 million).

At 31 March 2024, the Group had no assets under construction which were not being depreciated

(2023: £1.4 million).

		Restated
		Terminals
	Terminals	and ATMs
	and ATMs –	– non-
	Operating	operating	Fixtures,
	lease	lease	ﬁttings and	Leasehold	Land and	Right-of-
	assets	assets	equipment	improvements	buildings	use assets	To ta l
	£’000	£’000	£’000	£’000	£’000	£’000	£’000
Cost
At 31 March 2022	1,501	39,837	3,673	–	11,081	462	56,554
Acquisition of business	–	–	328	1,169	16	4,118	5,631
Additions	4,694	3,042	111	–	–	9	7,856
Disposals	(1,056)	(2,051)	–	–	–	–	(3,107)
At 31 March 2023	5,139	40,828	4,112	1,169	11,097	4,589	66,934
Accumulated
depreciation
At 31 March 2022	101	30,434	1,922	–	2,101	214	34,772
Charge for the year	827	3,412	180	9	261	233	4,922
Disposals	(122)	(1,895)	–	–	–	–	(2,017)
At 31 March 2023	806	31,951	2,102	9	2,362	447	37,677
Carrying amount
At 31 March 2023	4,333	8,877	2,010	1,160	8,735	4,142	29,257
At 31 March 2022	1,400	9,403	1,751	–	8,980	248	21,782

1 In the ﬁnancial statements for the year ended 31 March 2023, Terminals and ATMs were not sub-divided between assets leased

out under operating leases and other assets. The restated treatment is the result of the Financial Reporting Council’s review of the

Group’s ﬁnancial statements for that ﬁnancial year.

Acquisition of business in the prior year relates to Appreciate Group PLC.

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16. Pensions

Deﬁned beneﬁt plans

Following the acquisition of Appreciate Group PLC, the Group took on the operation of two deﬁned

beneﬁt pension schemes, Park Food Group plc Pension Scheme (PF) and Park Group Pension Scheme

(PG). With the exception of £543,000 of assets and £284,000 of winding up lump sum payment

liabilities, the PG scheme assets and liabilities were transferred into the PF scheme on 30 March 2023.

In the current period, the assets left behind in the PG scheme were used to pay beneﬁts owed, winding

up costs and the winding up lump sums referred to above. The remaining £24,000 cash balance was

transferred to the PF scheme on winding up of the PG scheme.

The PF scheme (“the scheme”) provides beneﬁts based on ﬁnal pensionable pay and is closed to

future accrual of beneﬁt based on service. The assets of the scheme are held separately from those of

Appreciate Group Ltd in trustee-administered funds. Contributions to the scheme are determined by

a qualiﬁed actuary on the basis of triennial valuations, the most recent being the scheme’s statutory

funding valuation as at 31 March 2023.

The scheme is subject to the funding legislation which came into force on 30 December 2005, outlined

in the Pensions Act 2004. This, together with documents issued by the Pensions Regulator and the

Guidance Notes adopted by the Financial Reporting Council, set out the framework for funding deﬁned

beneﬁt occupational pension plans in the UK. The trustees of the scheme are required to act in the

best interests of the scheme’s beneﬁciaries and are responsible for setting the investment, funding and

governance policies of the funds. The scheme is administered by an independent trustee appointed by

the Group. Appointment of the trustees is determined by the scheme’s trust documentation.

The Group has applied IAS19 Employee Beneﬁts (revised 2011) and the following disclosures relate to

this standard. The present value of scheme liabilities is measured by discounting the best estimate of

future cashﬂows to be paid out of the schemes using the projected unit credit method. All actuarial gains

and losses have been recognised in the period in which they occur in other comprehensive income.

For the purposes of IAS19, the results of the scheme valuation as at 31 March 2023, which was carried

out by a qualiﬁed independent actuary, have been updated on an approximate basis to 31 March 2024.

There have been no changes in the valuation methodology adopted for this year’s disclosures compared

to the previous year.

The scheme typically exposes the Group to actuarial risks such as investment risk, interest rate risk, salary

growth risk, mortality risk and longevity risk.

The amounts recognised in the Statement of ﬁnancial position are as follows:

PF scheme

	31 March	31 March
	2024	2023
	£’000	£’000
Fair value of scheme assets	16,224	17,752
Present value of pension obligation	(15,938)	(17,341)
Net pension surplus	286	411
Comprising:
Schemes in asset surplus	286	411

The charges/(credits) recognised in the Consolidated statement of proﬁt or loss are as follows:

PF and PG schemes combined

	Year ended	1 month to
	31 March 2024	31 March 2023
	£’000	£’000
Past service cost	–	123
Administrative costs borne by the PG scheme	164	–
Net interest credit	(17)	(3)
Total	147	120

The administrative costs borne by the PG scheme relate to the merger with the PF scheme referred to

above. Those costs, along with the prior period past service cost, are recognised within administration

expenses in the Consolidated statement of proﬁt or loss. The net interest credit comprises interest

receivable on scheme assets and interest payable on scheme obligations, which are reported within

Finance income and Finance costs respectively in the Consolidated statement of proﬁt or loss.

Analysis of amounts recognised in Other comprehensive income:

PF and PG schemes combined

	Year ended	1 month to
	31 March 2024	31 March 2023
	£’000	£’000
(Loss)/gain on scheme assets	(1,519)	675
Experience gains arising on the deﬁned beneﬁt obligation	694	1
Gains arising from changes in the demographic assumptions underlying
the present value of the deﬁned beneﬁt obligation	416	141
Gains/(losses) arising from changes in the ﬁnancial assumptions
underlying the present value of the deﬁned beneﬁt obligation	81	(464)
Total	(328)	353

Scheme assets

It is the policy of the scheme trustees to review the investment strategy at the time of each funding

valuation. The trustees’ investment objectives and the processes undertaken to measure and manage

the risks inherent in the scheme’s investment strategy are documented in the scheme’s Statement of

Investment Principles.

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PayPoint Plc Annual Report 2024

Fair value of scheme assets:

PF scheme

	31 March 2024	31 March 2023
	£’000	£’000
Fixed Interest Gilt Fund	1,241	1,305
Diversiﬁed Growth Assets (DGA)	506	781
Gilts	2,264	2,430
LDI	2,149	2,042
Loan Fund	1,984	1,805
Multi Asset Credit	2,053	2,155
Index Linked Gilts	3,234	3,683
Cash and other	2,793	3,551
Total assets	16,224	17,752

None of the fair values of the assets shown above includes any of the Group’s own ﬁnancial instruments

or any property occupied by, or other assets used by the Group. None of the scheme assets has a quoted

market price in an active market.

The movement in the fair value of scheme assets is as follows:

PF and PG schemes combined

	Year ended	1 month to
	31 March 2024	31 March 2023
	£’000	£’000
Balance at the beginning of the period	17,752	–
Fair value of scheme assets on acquisition of Appreciate Group PLC	–	17,058
Interest income	836	58
Return on scheme assets	(1,519)	675
Beneﬁts paid	(1,031)	(39)
Administrative costs borne by the PG scheme	(164)	–
Employer contributions	350	–
Balance at the end of the period	16,224	17,752

For the PG scheme, actual return on scheme assets, including interest income, for the year ended

31 March 2024 was £1,000 (1 month to 31 March 2023: £578,000). For the PF scheme, actual return

on scheme assets, including interest income, for the year-ended 31 March 2024 was £(684,000)

(1 month to 31 March 2023: £97,000).

Present value of obligations

The movement in the present value of the deﬁned beneﬁt obligation is as follows:

PF and PG schemes combined

	Year ended	1 month to
	31 March 2024	31 March 2023
	£’000	£’000
Balance at the beginning of the period	17,341	–
Fair value of scheme obligations on acquisition of Appreciate Group PLC	–	16,880
Interest cost	819	55
Actuarial gains due to scheme experience	(694)	(1)
Actuarial gains due to changes in demographic assumptions	(416)	(141)
Actuarial (gains)/losses due to changes in ﬁnancial assumptions	(81)	464
Beneﬁts paid	(1,031)	(39)
Past service costs	–	123
Balance at the end of the period	15,938	17,341

The average duration of the PF scheme deﬁned beneﬁt obligation at 31 March 2024 is 14 years.

Signiﬁcant actuarial assumptions

The following are the principal actuarial assumptions at the reporting date (expressed as

weighted averages):

PF scheme

	31 March 2024	31 March 2023
	% per annum	% per annum
Financial and related actuarial assumptions:
Discount rate	4.90	4.90
Inﬂation (RPI)	3.10	3.20
Allowance for revaluation of deferred pensions of CPI or 8.5% p.a. if less	3.30	3.20

The mortality assumptions adopted for the PF scheme are 94% (males) and 85% (females) of the

standard tables S2PxA, year of birth, no age rating for males and females, projected using Continuous

Mortality Investigation (CMI) 2021 converging to 1.25% pa. These imply the following life expectancies:

	31 March 2024	31 March 2023
PF scheme	Years	Years
Life expectancy at age 65 for:
Male – retiring in 2024	21.7	23.9
Female – retiring in 2024	23.7	26.1
Male – retiring in 2044	23.0	25.2
Female – retiring in 2044	25.2	27.5

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16. Pensions continued

Sensitivity analysis on signiﬁcant actuarial assumptions

The following table summarises the impact on the scheme deﬁned beneﬁt obligation at the end of the

reporting period, if each of the signiﬁcant actuarial assumptions above were changed, in isolation. The

inﬂation sensitivity includes the impact of changes to the assumptions for revaluation, pension increases

and salary growth. The sensitivities shown below are approximate.

PF scheme	Change in assumption	Change in liabilities
Discount rate	decrease of 0.50% p.a.	increase by 6.7%
Discount rate	increase of 0.50% p.a.	decrease by 6.1%
Rate of inﬂation	decrease by 0.25% p.a.	decrease by 2.0%
Rate of inﬂation	increase by 0.25% p.a.	increase by 2.3%
Rate of mortality	decrease in life expectancy of 1 year	increase by 2.6%
Rate of mortality	increase in life expectancy of 1 year	decrease by 2.4%

The sensitivity assumption used in the year was 0.25% for the price inﬂation rate and 0.5% for the

discount rate This is in line with the standard sensitivity analysis used by pension advice providers in their

disclosures to clients.

The scheme typically exposes the Group to actuarial risks such as investment risk, interest rate risk, salary

growth risk, mortality risk and longevity risk. A decrease in corporate bond yields, a rise in inﬂation or an

increase in life expectancy would result in an increase to the schemes liabilities. This would detrimentally

impact on the Statement of ﬁnancial position and may give rise to increased charges in future income

statements. This effect would be partially offset by an increase in the value of the schemes’ bond

holdings. Additionally, caps on inﬂationary increases are in place to protect the scheme against

extreme inﬂation.

Funding

The Group expects to contribute £150,000 to the scheme for the accounting period commencing

1 April 2024. This is based upon the current schedule of contributions following the pension merger

and the actuarial valuation carried out as at 31 March 2023.

17. Inventories

	Year ended	Year ended
	31 March 2024	31 March 2023
	£’000	£’000
Finished goods – cards and vouchers	2,276	2,854
Finished goods – terminals	984	298
Total	3,260	3,152

The cost of inventories recognised as an expense in the year is £83.6 million (2023: £4.1 million).

18. Trade and other receivables

Group

	31 March 2024	31 March 2023
	£’000	£’000
Items in the course of collection	84,215	47,771
Trade receivables	23,666	17,703
Revenue allowance for expected credit losses	(1,545)	(1,058)
Trade receivables net of revenue allowance for expected credit losses	22,121	16,645
Other receivables	4,151	1,822
Net investment in ﬁnance lease receivables (note 23)	1,325	2,144
Contract assets – capitalisation of fulﬁlment costs	3,446	2,910
Accrued income	3,250	5,241
Prepayments	4,442	5,522
Sub-total: trade and other receivables – corporate	38,735	34,284
Total	122,950	82,055

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 28.

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 £2.1 million

(2023: £2.9 million). The ageing of the trade receivables past due is as follows:

	Less than			More than
	1 month	1–2 months	2–3 months	3 months	Tota l
	£’000	£’000	£’000	£’000	£’000
Carrying value at 31 March 2024	1,241	347	386	175	2,149
Carrying value at 31 March 2023	1,258	551	232	894	2,935

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.

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Movement in the revenue allowance

	31 March	31 March
	2024	2023
	£’000	£’000
Balance at the beginning of the year	1,058	1,058
Acquisition of business	–	251
Amounts utilised in the year	(644)	(878)
Increase in allowance	1,131	627
Balance at the end of the year	1,545	1,058

Age of revenue allowance

	Less than			More than
	1 month	1–2 months	2–3 months	3 months	Tota l
	£’000	£’000	£’000	£’000	£’000
Carrying value at 31 March 2024	289	120	106	1,030	1,545
Carrying value at 31 March 2023	230	110	116	602	1,058

The expected credit losses associated with items in the course of collection are immaterial.

Company

	31 March 2024	31 March 2023
	£’000	£’000
Amounts owed by Group companies (non-current)	12,025	11,477
Trade and other receivables (non-current)	12,025	11,477
Amounts owed by Group companies (current)	–	1,548
Accrued income	–	12
Prepayments	75	970
Trade and other receivables (current)	12,100	2,530
Total	12,100	14,007

Amounts owed 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 and restricted funds held on deposit (non-

corporate)

	31 March 2024	31 March 2023
	£’000	£’000
Corporate cash	26,392	22,546
Clients’ funds	17,276	12,041
Gift card voucher cash	9,779	29,527
Prepay savers cash	27,368	8,181
Retailer partners’ deposits	5,955	6,156
Sub-total: non-corporate cash	60,378	55,905
Cash and cash equivalent – assets	86,770	78,451
Bank overdraft	–	(525)
Total	86,770	77,926

During the year the Group operated cash pooling amongst certain corporate cash accounts, whereby

individual accounts could be overdrawn without penalty provided the overall position was in credit.

Restricted funds held on deposit (non-corporate)

	31 March 2024	31 March 2023
	£’000	£’000
Prepay savers’ cash¹	23,179	42,000
Gift card voucher cash²	55,019	40,000
Total	78,198	82,000

1 On 13 August 2007 a declaration of trust constituted the Park Prepayment Protection Trust (PPPT) to hold customer

prepayments. Park Prepayments Trustee Company Limited, as trustee of the trust, holds this money on behalf of the agents.

The conditions of the trust that allow the release of cash to the Group are summarised below:

1. Purchase of products to be supplied to customers.

2. Supply of products to customers less any amounts already received under condition 1 (above).

3. Amounts required as a security deposit to any credit card company or other surety.

4. Amounts payable for VAT.

5. Amount equal to any bond required by the Christmas Prepayments Association (CPA).

6. Residual amounts upon completion of despatch of all orders in full.

Products for this purpose means goods, vouchers, prepaid cards or other products ordered by customers. Prior to any such release

of monies under condition 6 above, the trustees of PPPT require a statement of adequacy of working capital from the directors of

Park Retail Limited, stating that it will have sufficient working capital for the year. A summary of the main provision of the deeds and

a copy of the trust deed is available at www.getpark.co.uk.

2 On 16 February 2010 a declaration of trust constituted the Park Card Services E-money Trust (PCSET) to hold the e-money ﬂoat in

accordance with regulatory requirements. The e-money ﬂoat represents the value of the obligations of Love2shop to cardholders

and redeemers.

Restricted funds held on deposit (non-corporate) are largely invested in deposit accounts with maturity dates of up to one year.

The timing of the release of the monies to the Group from PPPT is as detailed above and is expected to be within 12 months of the

year end. The release of monies from the e-money Trust occurs as the obligations fall due.

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19. Cash and cash equivalents and restricted funds held on deposit (non-

corporate continued

Clients’ own funds

Clients’ own funds held in trust but not recognised on the Consolidated statement of ﬁnancial position

amounted to £60.5 million (2023: £124.3 million) and relate to Payments and Banking revenue streams,

other than Digital (see note 3).

20. Trade and other payables

		Re-presented
	31 March 2024	31 March 2023
Group	£’000	£’000
Settlement payables	84,215	47,771
Payables in respect of clients’ funds and retailer partners’ deposits	23,231	18,197
Payables in respect of gift card vouchers and prepay savers	113,829	118,954
Sub-total: trade payables – non-corporate	137,060	137,151
Trade payables – corporate	34,735	42,484
Other taxes and social security	3,236	4,874
Other payables	4,072	4,117
Accruals	14,320	15,171
Deferred income	3,959	3,363
Contract liabilities – deferral of set-up and development fees	267	710
Sub-total: trade and other payables – corporate	60.589	70,719
Total	281 ,864	255,641
Disclosed as:
Current	281,864	255,526
Non-current (payables in respect of vouchers and cards)	–	115
Total	281 ,864	255,641

1 See note 1 for explanations of the re-presentations.

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.

3 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).

4 Payables in respect of gift card vouchers include balances due to both customers and retailers in respect of ﬂexecash © cards

and amounts due to retailers for Love2shop vouchers and cards. Payables in respect of prepay savers include Love2shop savers’

prepayment balances for products that will be supplied prior to Christmas 2024, upon conﬁrmation of order. Until orders are

conﬁrmed, savers’ prepayments are repayable on demand.

Revenue is deferred for service fees, net of discount.

The movement in deferred income is as follows:

		Re-presented 1
	31 March 2024	31 March 2023
	£’000	£’000
Balance at the beginning of the year	3,363	4,039
Revenue deferred in the year	13,427	814
Revenue recognised in the year	(12,831)	(1,490)
Balance at the end of the year	3,959	3,363

1 See note 1 for an explanation of the re-presentation.

Company (Current)

	31 March 2024	31 March 2023
	£’000	£’000
Amounts owed to Group companies	21,893	77,909
Other payables	313	1,439
Accruals	4,416	3,950
Total	26,622	83,298

21. Provisions

Group

	31 March 2024
	£’000
Balance at the beginning of the year	–
Provision recognised in relation to the group restructuring	1,850
Balance at the end of the year	1,850

Company

	31 March 2024
	£’000
Balance at the beginning of the year	–
Provision recognised in relation to the group restructuring	230
Balance at the end of the year	230

During the year PayPoint conducted a group-wide review of its organisational structure to identify

efficiencies which will enable future reinvestment in the business. The review resulted in the redundancy

of 75 roles across both segments, announced to employees on 8 March 2024. Following this, the Group

initiated, on 15 March, a 1-month consultation period for employees impacted by the restructuring. All

related payments are to be made to those employees between April and October 2024.

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PayPoint Plc Annual Report 2024

22. Deferred tax liability

			(Charge)/
			credit to
			consolidated
		Acquisition	statement of	Charge to
	31 March 2023	of business	proﬁt or loss	OCI	31 March 2024
	£’000	£’000	£’000	£’000	£’000
Property, plant and equipment	223	–	(2,334)	–	(2,111)
Intangible assets	(15,676)	–	1,908	–	(13,768)
Deﬁned beneﬁt pension
scheme	(89)	–	(51)	82	(58)
Share-based payments	409	–	(31)	–	378
Short-term temporary
differences	2,918	–	(2,825)	–	93
Total	(12,215)	–	(3,333)	82	(15,466)

			(Charge)/
			credit to
		Acquisitions/	consolidated
		disposals of	statement of	Charge to
	31 March 2022	businesses	proﬁt or loss	OCI	31 March 2023
	£’000	£’000	£’000	£’000	£’000
Property, plant and equipment	1,222	194	(1,193)	–	223
Intangible assets	(5,306)	(10,736)	366	–	(15,676)
Deﬁned beneﬁt pension
scheme	–	(29)	26	(86)	(89)
Share-based payments	190	–	219	–	409
Short-term temporary
differences	188	2,989	(259)	–	2,918
Total	(3,706)	(7,582)	(841)	(86)	(12,215)

At the statement of ﬁnancial position date, the Group had recognised unused tax losses of £nil

(2023: £11.4 million) from Love2shop.

Deferred tax assets have not been provided on brought forward trading losses of £20.7 million

(2023: £20.7 million) arising from the Love2shop acquisition as, at the year end, the Group does not

believe it is probable that the entities in which these losses reside will be able to utilise them against

future taxable income.

23. Leases

a) Finance lease liabilities

		Plant and
	Property	Equipment	Vehicles	Tota l
	£’000	£’000	£’000	£’000
At 31 March 2024
Current balance	438	305	136	879
Non-current balance	3,611	223	122	3,956
Total lease liabilities	4,049	528	258	4,835
Interest charge for the year (note 9)	230	24	21	275
At 31 March 2023
Current balance	479	371	12	862
Non-current balance	4,049	568	–	4,617
Total lease liabilities	4,528	939	12	5,479
Interest charge for the year	28	3	1	32

	31 March 2024	31 March 2023
	£’000	£’000
Balance at beginning of year	5,479	260
Acquisition in the year	–	5,448
Additions in the year	410	–
Payment of lease liabilities (ﬁnancing cash ﬂows) - principal	(1,008)	(229)
Payment of lease liabilities - interest	(275)	(32)
Interest on unwind of lease liabilities	275	32
Remeasurement in the year	(46)	–
Balance at end of year	4,835	5,479

The remeasurement in the year relates to hosting services in the Love2shop segment (see note 15).

b) Right-of-use assets

		Plant and
	Property	equipment	Vehicles	Tota l
	£’000	£’000	£’000	£’000
At 31 March 2024	2,799	526	273	3,598
Depreciation charge for the year ended 31 March 2024	(401)	(370)	(137)	(908)
At 31 March 2023	3,178	946	18	4,142
Depreciation charge for the year ended 31 March 2023	(159)	(33)	(41)	(233)

The right of use assets are shown within Property and Plant and equipment in note 15.

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23. Leases continued

c) Net investment in ﬁnance lease receivables

	Year ended	Year ended
	31 March	31 March
	2024	2023
	£’000	£’000
Current balance	1,325	2,144
Non-current balance	512	1,711
Total net investment in ﬁnance lease receivables	1,837	3,855
Interest income (revenue) on net investment in ﬁnance lease receivables	1,059	1,140

The decrease in the net investment in ﬁnance lease receivables and interest income on net investment in

ﬁnance lease receivables in the current year is due to the fact that most new sales are now operating leases.

Age of allowance for net investment in ﬁnance lease receivables

	Less than			More than
	1 month	1–3 months	3–6 months	6 months	Tota l
	£’000	£’000	£’000	£’000	£’000
Carrying value at 31 March 2024	67	128	180	522	897
Carrying value at 31 March 2023	42	72	22	818	954

Contractual undiscounted cash ﬂows for net investment in ﬁnance lease receivables

						Undiscounted lease receivables
	Unearned	Less						More
	ﬁnance	than	1–3	3–6	6 months	1 years	3 years	than 5
	income	1 month	months	months	– 1 year	– 3 years	– 5 years	years	Tota l
	£’000	£’000	£’000	£’000	£’000	£’000	£’000	£’000	£’000
31 March 2024	(469)	172	330	462	699	616	27	–	1,837
31 March 2023	(898)	106	181	530	702	1,124	1,978	132	3,885

d) Operating lease receivables

Contractual undiscounted cash ﬂows for operating lease receivables

		Undiscounted lease
		receivables
	Less than
	1 year	1–2 years	Tota l
	£’000	£’000	£’000
31 March 2024	2,329	794	3,123
31 March 2023	620	328	948

24. Loans and borrowings and lease liabilities

Group

	Loans and	Lease
	borrowings	liabilities
	£’000	£’000
At 31 March 2023	94,415	5,479
Drawdowns on revolving credit facility	44,500	–
Repayments of revolving credit facility	(33,500)	–
Repayment of amortising term loan	(10,833)	–
Repayment of block loans	(627)	–
Sub-total: repayments	(44,960)	–
Interest charge	7,228	–
Interest paid	(7,248)	–
Lease liability acquired in the year	–	410
Payment of lease liabilities	–	(1,283)
Interest on unwind of lease liabilities	–	275
Reassessment of lease liability in the year	–	(46)
At 31 March 2024	93,935	4,835
Disclosed as:
Current
Amortising term loan	16,000	–
Accrued interest	435	–
Lease liabilities	–	879
Total – current	16,435	879
Non-current
Revolving credit facility	57,500	–
Amortising term loan	20,000	–
Lease liabilities	–	3,956
Total – non-current	77,500	3,956
Balance at end of year	93,935	4,835
Other liability-related changes
Interest paid	(7,248)	–

At 31 March 2024 the Group reclassiﬁed its revolving credit facility from a current liability to a

non-current liability, having adopted early the International Accounting Standard Board’s Non-current

Liabilities with Covenants, which amended IAS 1 Presentation of Financial Statements.

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PayPoint Plc Annual Report 2024

Group

	Re-presented
	Loans and
	borrowings	Lease liabilities
	£’000	£’000
At 31 March 2022	51,534	260
Drawdowns on revolving credit facility	28,500	–
Drawdown of new amortising term loan	36,000	–
Sub-total: borrowings	64,500	–
Repayments of revolving credit facility	(9,000)	–
Repayment of amortising term loan	(10,833)	–
Repayment of block loans	(2,241)	–
Sub-total: repayments	(22,074)
Interest charge	2,612	–
Interest paid	(2,157)	–
Lease liability acquired in the year	–	5,448
Payment of lease liabilities	–	(261)
Interest on unwind of lease liabilities	–	32
At 31 March 2023	94,415	5,479
Disclosed as:
Current
Amortising term loan	10,833	–
Accrued interest	455	–
Block loans	457	–
Lease liabilities	–	862
Total – current	11,745	862
Non-current
Revolving credit facility	46,500	–
Amortising term loan	36,000	–
Block loans	170	–
Lease liabilities	–	4,617
Total – non-current	82,670	4,617
Balance at end of year	94,415	5,479
Other liability-related changes
Interest paid	(2,157)	–

1 See note 1 for an explanation of the re-presentation.

Company loans and borrowings

		Re-presented 1
	Year ended	Year ended
	31 March 2024	31 March 2023
	£’000	£’000
Balance at the beginning of the year	93,788	48,666
Drawdowns on revolving credit facility	44,500	28,500
Drawdown of new amortising term loan	–	36,000
Sub-total: borrowings	44,500	64,500
Repayments of revolving credit facility	(33,500)	(9,000)
Repayment of amortising term loan	(10,833)	(10,833)
Sub-total: repayments	(44,333)	(19,833)
Interest charge	7,205	2,498
Interest paid	(7,225)	(2,043)
Balance at the end of the year	93,935	93,788
Disclosed as:
Current
Amortising term loan	16,000	10,833
Accrued interest	435	455
Total – current	16,435	11,288
Non-current
Revolving credit facility	57,500	46,500
Amortising term loan	20,000	36,000
Total – non-current	77,500	82,500
Balance at end of year	93,935	93,788
Other liability-related changes
Interest paid	(7,225)	(2,043)

1 See note 1 for an explanation of the re-presentation.

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25. Share capital, share premium and merger reserve

			31 March	31 March
			2024	2023
			£’000	£’000
Called up, allotted and fully paid share capital
72,693,673	(2023:	72,563,234) ordinary shares of 1/3p each	242	242

The increase in share capital in the current year resulted from 95,854 shares issued (of 1/3p each) for

share awards which vested in the year and 34,585 matching shares issued (of 1/3p each) under the

Employee Share Incentive Plan.

The share premium of £1.0 million (2023: £1.0 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 £18.2 million (2023: £18.2 million) comprises £1.0 million initial share

consideration in excess of the nominal value of shares issued on the initial acquisition of i-movo and

£17.2 million share consideration in excess of the nominal value of shares issued in relation to the

Appreciate acquisition.

26. Share-based payments

The Group’s share schemes are described in the Directors’ Remuneration Report on pages 100 to 199

and consist of the LTIP, DABS and RSA equity-settled share schemes.

284,735 share awards were issued under the RSA scheme in the year (2023: 237,476), vesting over one

to three years, between 1 August 2024 and 8 September 2026 subject to continued employment. The

RSAs do not contain any performance conditions other than to complete the required period of service.

84,649 share awards were issued under the DABS scheme in the year (2023: 55,374), vesting over three

years to 31 July 2026 subject to continued employment. The DABS do not contain any performance

conditions other than to complete the required period of service.

The share-based payments charge in the statement of proﬁt or loss in the year was £1.7 million

(2023: £1.3 million). Of this, £0.2 million (2023: £0.1 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 £1.0 million (2023: £0.6 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, £0.1 million (2023: £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 2024	31 March 2023
Outstanding at the beginning of the year	691,326	502,167
Granted	369,384	292,850
Lapsed	–	(59,350)
Exercised	(67,361)	(35,589)
Forfeited	(139,563)	(8,752)
Outstanding at end of the year	853,786	691,326

Remaining vesting period of outstanding share awards

		Number of shares
	31 March	31 March
	2024	2023
Within one year	278,838	139,563
One to two years	195,835	269,094
Two to three years	361,544	213,907
Three years or more	17,569	68,762
Outstanding at end of the year	853,786	691,326

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.

		Number of
Awards	Grant date	shares	Fair value (£)	Vesting date
RSA – 1 year	1 August 2023	2,253	5.34	1 August 2024
RSA – 2 years	1 August 2023	2,253	5.34	1 August 2025
RSA – 2 years	8 September 2023	23,575	5.58	8 September 2025
RSA – 3 years	8 September 2023	256,654	5.58	8 September 2026
DABS	31 July 2023	84,649	4.89	31 July 2026

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PayPoint Plc Annual Report 2024

27. Dividends

		Year ended 31 March 2024		Year ended 31 March 2023
	£’000	pence per share	£’000	pence per share
Dividends paid on ordinary shares:
Final ordinary dividend for the prior year	13,516	18.6	12,414	18.0
Interim dividend for the current year	13,809	19.0	12,693	18.4
Total ordinary dividends paid
(ﬁnancing cash ﬂows)	27,325	3 7 .6	25,107	36 .4
Number of shares in issue used for proposed ﬁnal ordinary dividend per
share calculation		72,693,673		72,563,234

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.

28. Financial instruments and risk

The Group’s ﬁnancial instruments comprise cash and cash equivalents, monies held in trust, trade and

other receivables, convertible loan notes, net investment in ﬁnance lease receivables, trade and other

payables, payables in respect of cards and vouchers, loans and borrowings and lease liabilities, 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.

The ﬁnancial assets and liabilities of the Group and Company are detailed below:

		31 March 2024	31 March 2023
	Group Note	£’000	£’000
Financial assets
Restricted funds held on deposit (non-corporate)	19	78,198	82,000
Cash and cash equivalents	19	86,770	78,451
Net investment in ﬁnance lease	23	1,837	3,855
Convertible loan notes	14	3,689	3,750
Items in the course of collection	18	84,215	47,771
Trade receivables net of revenue allowance for expected
credit losses	18	22,121	16,645
Contract assets	18	3,446	2,910
Other receivables	18	4,151	1,822
		284,427	237,204

			Re-presented ¹
		31 March 2024	31 March 2023
	Group Note	£’000	£’000
Financial liabilities
Revolving credit facility		57,797	46,701
Amortising term loans		36,138	47,087
Block loans		–	627
Loans and borrowings		93,935	94,415
Payables in respect of clients’ cash and retailer partners’
deposits	20	23,231	18,197
Payables in respect of gift card vouchers and prepay savers	20	113,829	118,954
Trade payables – corporate	20	34,735	42,484
Other payables	20	4,071	4,117
Lease liabilities	23	4,835	5,479
Bank overdraft	19	–	525
		274,636	284,171

1 See note 1 for explanations of the re-presentations .

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28. Financial instruments and risk continued

Company Note

		31 March 2024	31 March 2023
		£’000	£’000
Financial assets
Amounts owed by group companies (non-current)	18	12,025	11,477
Financial assets (non-current)		12,025	11,477
Convertible loan notes	14	3,689	3,750
Cash and cash equivalents		7	1,186
Other receivables		–	982
Amounts owed by group companies (current)	18	–	1,548
Financial assets (current)		3,696	7,466
Total		15,721	18,943

		31 March 2024	31 March 2023
Company	Note	£’000	£’000
Financial liabilities
Revolving credit facility – non-current	24	57,500	–
Amortising term loan – non-current	24	20,000	36,000
Financial liabilities (non-current)		77,500	36,000
Revolving credit facility – current	24	297	46,701
Amortising term loans – current	24	16,138	11,087
Trade and other payables		–	4,889
Amounts owed to group companies		21,893	77,909
Financial liabilities (current)		38,328	140,586
Total		115,828	176,586

(a) Credit risk

The Group’s ﬁnancial assets are cash and cash equivalents, monies held in trust, trade and other

receivables, convertible loan notes 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. 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-off monies due against funds

collected. Additionally, the majority of Love2shop’s trade receivables are subject to credit insurance,

further reducing the Group’s risk. The Group’s maximum exposure, at 31 March 2024, was £284.4 million

(2023: £237.2 million).

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.

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 2024 regarding funds placed on deposit has

been to maximise the return on funds 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. The amounts are gross and undiscounted, and include contractual

interest payments:

					Contractual cash ﬂows
31 March 2024	Carrying		2 months	2–12	1–2	2–5	5 years
£’000	amount	Tota l	or less	months	years	years	or more
Non-derivative
ﬁnancial liabilities
Revolving credit
facility	57,797	65,679	968	3,354	61,357	–	–
Amortising term
loans	36,138	38,723	4,535	13,517	20,671	–	–
Lease liabilities	4,835	6,047	128	977	912	1,606	2,424
Payables in respect
of clients’ cash and retailer partners’
deposits	23,231	23,231	23,231	–	–	–	–
Payables in respect of gift
card vouchers and prepay savers	113,829	113,829	113,829	–	–	–	–
Trade payables –
corporate	34,735	34,735	34,735	–	–	–	–
Other payables	4,071	4,071	4,071	–	–	–	–

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PayPoint Plc Annual Report 2024

					Contractual cash ﬂows
31 March 2023	Carrying		2 months	2–12	1–2	2–5	5 years
£’000	amount	To ta l	or less	months	years	years	or more
Non-derivative
ﬁnancial liabilities
Revolving credit
facility	46,701	56,331	744	2,713	3,255	49,619	–
Amortising
term loan	47,087	50,874	3,469	10,284	37,121	–	–
Block loans	627	654	81	403	170	–	–
Lease liabilities	5,479	6,954	248	887	982	1,893	2,944
Payables in respect
of clients’ cash and retailer partners’
deposits	18,197	18,197	18,197	–	–	–	–
Payables in respect of gift
card vouchers and prepay savers	118,954	118,954	118,820	19	–	34	81
Trade payables –
corporate	42,484	42,484	42,484	–	–	–	–
Other payables	4,117	4,117	4,117	–	–	–	–

1 See note 1 for an explanation of the re-presentation.

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 2024, these exposures were £nil

(2023: £nil).

The Group uses hedges to manage the foreign exchange risk related to PayPoint One terminal and card

terminal purchases.

(d) Interest rate risk

The Group’s interest-bearing ﬁnancial assets at 31 March 2024 comprised cash and cash equivalents

which totalled £86.8 million (2023: £77.9 million) and restricted funds held on deposit (non-corporate)

£78.2 million (2023: £82.0 million). 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% (2023: SONIA plus 1.75%).

All funds earn interest at the prevailing rate. Cash and cash equivalents are deposited on short-term

deposits (normally weekly or monthly) or held in current accounts. The majority of restricted funds held

on deposit are held in deposit accounts. The Group seeks to maximise interest receipts within these

parameters. The Group also minimises interest cost by effective central management of cash resources

to minimise the need for utilisation of the ﬁnancing facility.

(e) Borrowing facilities

The Group carried out a reﬁnancing, completed on 6 June 2024, following which its borrowing facilities

consist of:

• a £45.0 million non-amortising term loan expiring in June 2028;

• a £90.0 million unsecured revolving credit facility expiring in June 2028; and

• a £30.0 million accordion facility (uncommitted) expiring in June 2028 with an option, subject to lender

approval, to extend by a further year.

At 31 March 2024, £57.8 million (2023: £46.7 million) was drawn down from the previous £90.0 million

revolving credit facility, including accrued interest of £0.3 million. The outstanding balance of the previous

amortising term loan was £36.0 million, plus accrued interest at the year-end of £0.1 million. In the prior

year the Group also had £0.6 million of outstanding block loan balances, which were repaid in full in the

current year.

Interest is payable at SONIA plus 1.75% (2023: SONIA plus 1.75%). The Group has the ability to roll over

the revolving credit facility 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 2024.

(f) Fair value of ﬁnancial assets and liabilities

The following ﬁnancial assets/liabilities are measured at fair value through the proﬁt or loss: convertible

loan note instruments purchased from Optus Homes and OBConnect (classiﬁed as Level 3). The fair values

of the convertible loan note instruments were measured using the income approach (discounted cash

ﬂow) – see note 14. There have been no transfers between Level 1, 2 or 3 in the current year or prior year.

The aggregate amount of the Group’s day one discounts yet to be recognised in the Statement

of consolidated proﬁt or loss is £2.5 million, comprising £2.8 million at 31 March 2023, £7.3 million

generated in the year, less £7.6 million released in the year. The fair value of this ﬁnancial liability differs

from the transaction price due to the discounts offered to corporate customers.

The Directors consider there to be no material difference between the book value and the fair value of

the Group’s ﬁnancial instruments at 31 March 2024, or 31 March 2023.

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PayPoint Plc Annual Report 2024 Strategic report Governance

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Shareholder information

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28. Financial instruments and risk continued

(g) Market price risk

The Group’s exposure to market price risk comprises interest rate and currency market exposure. Excess

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 affected 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

effect on these instruments.

29. Related-party transactions

Remuneration of the Executive Directors, who are the key management of the Group, was as follows

during the year:

	Year ended	Year ended
	31 March	31 March
	2024	2023
	£’000	£’000
Short-term beneﬁts and bonus	1,647	1,615
Pension costs	43	39
Long-term incentives	658	503
Other	4	4
Total	2,352	2,161

1 Includes salary, taxable beneﬁts and annual bonus award.

2 Pension contributions.

3 Long-term incentives represents the current year charge to the Statement of proﬁt or loss.

Directors’ remuneration is disclosed on page 108 of the Directors’ Remuneration Report.

Company related-party transactions

The following balances existed between the Company and its wholly owned subsidiaries:

	Year ended	Year ended
	31 March 2024	31 March 2023
	£’000	£’000
Amounts owed by subsidiaries	12,025	13,025
Amounts owed to subsidiaries	(21,893)	(77,909)
Interest paid to subsidiaries	(4,837)	(2,052)
Interest received from subsidiaries	383	702
Cash dividends received from subsidiaries	3,500	–

As an associate of PayPoint Plc, Snappy Shopper was a related party prior to its disposal in the prior year.

In the period up to the disposal date, related-party transactions consisted of £155,204 revenue, with

£38,850 of accrued revenue at 31 March 2023.

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PayPoint Plc Annual Report 2024

30. Notes to the statements of cash flow

Group Note

		Year ended	Year ended
		31 March 2024	31 March 2023
		£’000	£’000
Profit before tax		48,182	42,574
Adjustments for:
Depreciation of property, plant and equipment	15	7, 318	4,922
Amortisation of intangible assets	13	13,347	5,555
Exceptional item – non-cash movement on convertible
loan note		186	–
Exceptional item – non-cash impairment loss on reclassification of investment in associate to asset
held for sale	14	–	1,252
Loss on disposal of fixed assets		111	1,090
Finance income	9	(1,390)	(987)
Finance costs	9	8,408	2,718
Share-based payment charge	26	1,669	1,330
Cash-settled share-based remuneration		(339)	–
Operating cash flows before movements in working capital		77,492	58,454
Movement in inventories		(108)	737
Movement in trade and other receivables		(4,638)	(1,301)
Movement in finance lease receivables		2,018	2,366
Movement in contract assets		(536)	(853)
Movement in contract liabilities		(443)	(78)
Movement in provisions		1,850	–
Movement in trade and other payables – corporate		(9,929)	3,688
Movement in lease liabilities		–	(90)
Movement in working capital – corporate		(11,786)	4,469
Cash generated from operations		65,706	62,923

Company Note

		Year ended	Year ended
		31 March	31 March
		2024	2023
		£’000	£’000
Profit/(loss) before tax		79,148	(1,261)
Adjustments for:
Exceptional item – non-cash movement on convertible loan note		186	–
Exceptional item – non-cash impairment loss on reclassification
of investment in associate to asset held for sale	14	–	1,252
Non-cash dividends from subsidiaries		(98,000)	–
Finance income		(383)	(703)
Finance costs		12,043	4,549
Share-based payment charge		1,112	923
Operating cash movement before movements
in working capital		(5,894)	4,760
Movement in receivables		2,561	16,610
Movement in payables		36,452	25,288
Movement in provisions		230	–
Cash generated from operations		33,349	46,658

31. Contingent liability

Ofgem Statement of objections

In FY24, a number of companies in the PayPoint Group, including PayPoint Plc, received two claims

relating to issues addressed by commitments accepted by Ofgem in November 2021 as a resolution of

Ofgem’s concerns raised in its Statement of Objections received by the PayPoint Group in September

2020. The Ofgem resolution did not include any infringement findings.

The first claim was served by Utilita Energy Limited and Utilita Services Limited (subsequently renamed

Luxion Sales Limited) (“Utilita”) on 16 June 2023. The second claim was served by Global-365 plc and Global

Prepaid Solution Limited (“Global 365”) on 18 July 2023. PayPoint can confirm that a first Case Management

Conference (CMC) was held on 31 October 2023 at the Competition Appeal Tribunal relating to these

claims. The focus of the first CMC was to agree disclosure and a timetable for proceedings. PayPoint can also

confirm that a second CMC was held on 26 April 2024 to agree further disclosure and the appointment of

expert witnesses for all parties. A provisional date for a third CMC was set for 28 October 2024. Both claims

have been listed for a joint trial at the Competition Appeal Tribunal starting on 10 June 2025.

The Group’s position remains unchanged: it is confident that it will successfully defend the claim by

Utilita, which does not provide any clear evidence to support the cause of action or the amount claimed,

and also that it will successfully defend the claim by Global 365, which fundamentally misunderstands

the energy market and the relationships between the relevant Group companies and the major energy

providers, whilst also over-estimating the opportunity available, if any, for the products offered by Global

365. As a result, no accounting provision has been made for these claims.

The Group will continue to update the market on a quarterly basis as part of its financial reporting cycle.

173

PayPoint Plc Annual Report 2024 Strategic report Governance

Financial statements

Shareholder information

Notes to the consolidated financial statements continued

31. Contingent liability continued

HMRC assessment

In February 2024, HMRC raised an assessment on the Group’s tax position for the accounting period

ended 31 March 2021. The Group has appealed the assessment on the grounds that it is not valid from a

tax technical and administrative perspective and no provision has therefore been recognised.

32. Events after the reporting date

Share buy-back

On 13 June 2024, the Group announced a share buy-back programme of at least £20 million over the

next 12 months. See page 75 for details of the programme. This is a non-adjusting event, having no

impact on the current period financial statements.

Investment in Aperidata Limited

On 20 May 2024, the Group acquired, for consideration of £0.2 million, a 19.9% equity stake in the

ordinary shares of Aperidata Limited, which provides its customers with credit rating and open banking

services. On 23 May 2024 the Group purchased a convertible loan note of nominal amount £1.0 million

from Aperidata Limited. The loan note has the option to convert into ordinary shares on 23 May 2027,

increasing the Group’s stake to 42.8%. The May 2024 transactions referred to above are non-adjusting

events, having no impact on the current period financial statements.

Refinancing

On 6 June 2024, the Group completed a refinancing, which provides total financing facilities of

£135 million. Details of the facility are set out in note 1.

174

PayPoint Plc Annual Report 2024

Officers and professional advisers

Directors

G Kerr

(Chairman)

N Wiles

R Harding

R Sharma

G Barr

G Parsons

R Shapland

L Tu

B Wishart

Company Secretary

Julia Herd, on behalf of Indigo Corporate Secretary Limited

Registered Office

1 The Boulevard

Shire Park

Welwyn Garden City

Hertfordshire AL7 1EL

United Kingdom

Registered in England and Wales

Company number 03581541

Independent auditor

Pricewaterhouse Coopers LLP

1 Embankment Place

London WC2N 6RH

United Kingdom

Registrar

Equiniti Limited

Aspect House

Spencer Road

Lancing

West Sussex BN99 6DA

United Kingdom

1 Non-Executive Directors

175

PayPoint Plc Annual Report 2023 2024 Strategic report Governance Financial statements

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