PayPoint H2 2025 Earnings Report

PayPoint EPS Results

• Actual EPS: GBX 70.10
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

PayPoint Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

PayPoint Announcement Details

• Quarter: H2 2025
• Date: 6/12/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, June 12, 2025
• Conference Call Time: 4:30AM ET

PayPoint (LON:PAY) engages in the provision of payments and banking, shopping, and e-commerce services and products in the United Kingdom. The company operates through two segments: PayPoint and Love2shop. The PayPoint segment provides card payment services to retailers, including leased payment devices; EPoS; ATM cash machines; SIM cards sales; receipt advertising; bill payment services and cash top-ups to individual consumers; parcel delivery and collection services; retailer service fees solutions; and digital payment services, as well as cash through to digital services. The segment offers its products under PayPoint One, eMoney, MultiPay, CashOut, and Direct Debits platforms. The Love2shop segment is involved in the provision of shopping vouchers, cards, and e-codes which customers may redeem with participating retailers; and Christmas savings club, to which customers make regular payments throughout the year to help spread the cost of Christmas, before converting to a voucher. It serves consumers, SMEs, and convenience retailers in the commercial, not-for-profit, and public sectors. The company was founded in 1996 and is headquartered in Welwyn Garden City, the United Kingdom.

PayPoint H2 2025 Earnings Call Transcript

Key Takeaways

• PayPoint delivered a double-digit increase in EBITDA and underlying PBT in FY2025, with net revenue up 3.7% to £187.7m despite a softer consumer environment.
• The board set ambitious FY2026-28 targets of 5–8% annual net revenue growth, a modernization program for greater automation and customer service, and a share buyback to cut issued capital by ≥20% at 1.2–1.5x leverage.
• Net debt rose to £97.4m—driven by acquisitions, capex and the ongoing £120m buyback—but stayed below the £100m expectation and the £165m facilities now extend to June 2029.
• The Parcels division is expanding Collect+ to over 10,000 locations via harmonized Inpost/Yodel sites and a growing Royal Mail partnership, aiming for further transaction volume growth.
• Digital payments and Open Banking grew strongly, with 50 new MultiPay clients and 28 Open Banking wins, underpinned by a robust pipeline in government, housing and charitable sectors.

Presentation

[Operator]

Ladies and gentlemen, welcome to the Paypond Preliminary Results Conference Call. I am Valentina, the Chorus Call operator. I would like to remind you that all participants will be in listen only mode and the conference is being recorded. The presentation will be followed by Q and A session. The conference must not be recorded for publication or broadcast.

[Operator]

At this time, it's my pleasure to hand over to Nick Wiles, CEO. Please go ahead.

[Nick Wiles, Chief Executive at PayPoint]

Thank you, Valentina. Good morning, everyone, and welcome to our full year results presentation for the twelve months to March 2025. In terms of our agenda this morning, I will give a brief overview of our results and our updated financial targets for the business for the three years out to March 28. Rob will then cover the group financials in more detail, followed by an update on strategy and where our focus is in the current year, our business review and then finally, our outlook for the current year before we open up for Q and A. Turning to our full year highlights.

[Nick Wiles, Chief Executive at PayPoint]

A resilient financial performance for the year as a whole, building on our strong and really despite a more challenging trading environment in the half and a rather stalled recovery in consumer confidence. I think delivering for the year as a whole, a double digit increase in EBITDA and underlying PBT, I think, reflect the resilience of our business, some good operational management, the continued momentum in the growth areas of our business and, I think, continued strong cost disciplines. Our increase in net debt reflects the impact of our investments over the year in addition to our ongoing share buyback. And we've increased our interim dividend by 2.1% to 19.6p, making a total dividend for the year of 39p per share. In terms of divisional highlights, we've delivered net revenue growth in each of our four operating businesses, and I will go into more detail in terms of the underlying changes in mix within each business in the Business Review section later in the presentation.

[Nick Wiles, Chief Executive at PayPoint]

Turning to our new targets for the three years out to FY 2028. We are establishing today new targets for the business for the next three years, which we believe reflect our ambition, our confidence in our growing capabilities and our continued commitment to delivering enhanced returns for our shareholders. These targets are clearly in addition to our EBITDA target of £100,000,000 for the current year. Firstly, we set ourselves the target of achieving net revenue growth in the range of 5% to 8% per annum, the target in our view, which brings to life the strategy we've implemented over the past five years to transform the business and our capabilities from our cash, legacy bill payments routes, to create a more robust and higher growth organic platform and a mix of business and growth building blocks that together support consistent and attractive growth. Secondly, to support the delivery of our growth plans, establish a modern organizational framework designed to deliver better and lower cost operational performance and a higher level of customer service and experience.

[Nick Wiles, Chief Executive at PayPoint]

To achieve this, we've needed outside expertise to support us such that we can develop and execute on a plan to deliver greater automation, simpler business processes and agility in the way we do our business. This step and the need for the business to modernize is critical in our view to the delivery of our longer term plans, and we will continue to update shareholders further on these plans as they take shape in the coming months. And our final target is to accelerate our share buyback program with a clear objective of reducing our issued share capital by at least 20% over the next three years within a prudent capital structure of 1.2 to 1.5 times leverage. As I said already, we believe these new targets are ambitious, clear and provide a pathway for the business over the next three years. And with that, I'll now hand to Rob, who'll take you through the financials in more detail.

[Rob Harding, CFO at PayPoint]

Thank you, Nick, and good morning, everybody. If I start with the income statement, net revenue of $187,700,000 is up 3.7% on the prior year of 181,000,000 Total costs are broadly flat year on year at 119,700,000.0. So this combination drives double digit increase to our underlying profit before tax from GBP 61,700,000.0 to GBP 68,000,000 or up 10.2%. I'll cover the key revenue and cost deltas in the slides to follow, but you can see from this slide the breakdown of profits into our two segments, with Paidpoint profits up 5.7% to 53,400,000.0 and Loftus Shop profits up 30.4% to $14,600,000 Further down this page in terms of adjusting items, the key drivers of the $41,700,000 are $20,600,000 in respective legal costs, which includes a provision of $14,200,000 for the settlement reached with the utility in May net movements on our convertible loan notes and other instruments and $8,700,000 in respective amortization of acquired intangibles. Deducting these items gives profits on a statutory basis of $26,300,000 Our underlying profit growth supports underlying EBITDA growth of 10.7% to 19,000,000 and diluted underlying earnings per share up 10.4% to GBP 69.1.

[Rob Harding, CFO at PayPoint]

Finally, on this page, net debt of GBP 97,400,000.0 lands within market expectations of below 100,000,000, and I'll cover this in more detail shortly. Moving on to net revenue analysis. This slide breaks revenue down by segment and business area. Starting with shopping, revenues rose 1.2% to 65,200,000.0 with double digit growth in service fee income. E commerce revenues grew 39 to $16,400,000 off the back of strong transaction growth of 33.3%.

[Rob Harding, CFO at PayPoint]

Payments and banking revenue rose 1.7%, driven by double digit growth in digital, which includes £1,800,000 year in year contribution from Obi Connect. These three areas drive 4.9% revenue growth for the Paypoint segment. Loftus Shop revenues of £51,700,000 were marginally up year on year, with overall billings up 2.3%. So combined, these two segments give overall group revenue of 187,700,000 This slide gives an underlying profit progression view from the $61,700,000 in FY 2024 to the $68,000,000 for FY 2025. The four blocks are revenue related, which I've covered already: $800,000 revenue growth from shopping 4,600,000.0 from Parcels, 900,000.0 from Payments and Banking and $400,000 from Love to Shop.

[Rob Harding, CFO at PayPoint]

The last column is costs, and you can see that costs only grew by $400,000 year on year, with Paypoint segment cost growth of 4.3% and Loftic Shops costs actually falling by 7.5%. So this gives overall profits of GBP 68,000,000. This slide gives the main drivers of the 400,000 delta in terms of costs year on year and how we managed to maintain this broadly flat. The block you can see is inflationary cost pressures of GBP 2,800,000.0. The next block is Obi Connect's costs, including those is $1,500,000 for the year.

[Rob Harding, CFO at PayPoint]

We then have $2,100,000 more depreciation and amortization. That's primarily from our cards business. And lastly, we can see the impact of streamlining our organizational structure, which we commented on last year's results. The impact of this being a $6,000,000 reduction to our costs, with the majority of this benefiting the Lottery Shop segment. In terms of cash generation and net debt, overall, you can see midway down this slide that cash generation of $69,000,000 for the year is up $11,100,000 on FY 2024 after various add backs of adjusting items, D and A, share based payments and a working capital outflow of £10,300,000 The working capital outflow is a combination inventory build, which is largely in our Cars and Love to Shop business and also receivables growth to support Parcels growth and other revenue initiatives.

[Rob Harding, CFO at PayPoint]

Further down, we have outflows from tax, capital expenditure of $19,700,000 acquisitions and investments of $25,100,000 which is in respect of Yodle, Aperidata and Obi Connect the share buyback of $14.9 which is the ninetwelve of the year $120,000,000 we commenced in July of last year and $27,800,000 in respect of dividends. This gives an overall cash outflow for the year of $29,900,000 and a closing net debt of 97,400,000.0 In terms of the balance sheet, the key movements year on year are goodwill increasing by 12,300,000.0 and intangibles by $4,800,000 and that's really driven by the inclusion of Obi Connect following our majority stake in the year. Corporate cash and cash equivalents are covered in the cash flow slide. Cash is down $21,500,000 and loans are up 8.4 and that gives the overall outflow of 29,900,000.0 that we saw on the previous slide. Non corporate cash, cash equivalents is down $32,100,000 as we shifted our cash to restricted funds, which are up $33,300,000 and that's really to give the group access to higher interest income.

[Rob Harding, CFO at PayPoint]

Further down the balance sheet, the main swing is working capital, where you see the outflow of $13,900,000 and that's driven by the inventories and receivables that I covered previously. And at the bottom of this slide, overall assets of 97,300,000.0 at year end. Finally, before I pass back to Nick, on capital allocation, we are targeting leverage of 1.2 to 1.5 times. And with normal increase of dividends of circa 2%, we expect to see dividend cover to move from its current range of 1.5 to two times to above two over the next three years. On the share buyback, returning at least £30,000,000 per year for the next three years targets a reduction of over 20% in our equity base, and this level of buyback will be based on business performance, market conditions and the overall capital needs of the business.

[Rob Harding, CFO at PayPoint]

To the right of this slide, our future cash requirements are similar to the prior year. We'll have an outflow in respect of dividends, the share buyback and CapEx as well, which normalizes around about GBP 20,000,000. Finally, on our facility, we exercised a plus one year extension to this, so it now ends in June of twenty twenty nine. And as part of this extension, we've added MUFG, or Mitsubishi, to our banking group, and the facility is now a GBP 75,000,000 non amortizing loan and GBP 90,000,000 RCF, and this fully supports our capital allocation policy and the future needs of our business. I'll now pass you back to Nick.

[Nick Wiles, Chief Executive at PayPoint]

Thanks, Rob. And in the next few slides, I will give an update on the delivery of our strategy before covering the divisional business review and outlook. Our core building blocks for growth remain in place, and our progress across these will be the key drivers to us achieving our financial targets over the next three years. Rather than update on each of the interim stage, the main focus today will be on the three or four levers which will have the greatest impact in the current year: Parcels, open banking and digital payments, access to cash and local banking and the next phase in our engagement with our retailers and their customers in the delivery of our services. Firstly, building on another strong year, our focus in the current year for Parcels remains on continuing to build and optimize our Collect plus network to meet the needs of our carrier partners and their customers and to grow the network in areas such as the university locations, large format supermarkets and some additional niche areas which enhance the network is out of home convenience for consumers. Following the combination of Inpost and Yodel, as businesses to support the harmonization of locations across our network, support further parcel growth from this key and then large carrier partner and to accelerate the network and growth and parcel services for our Royal Mail partnership and their customers with a view to establishing a network of over 10,000 locations and to continue to work in partnership with the key online marketplaces, including the Chinese, to provide an out of home network for collection and returns, and we continue to make good progress in this regard.

[Nick Wiles, Chief Executive at PayPoint]

Provided we get these key building blocks for our parcel business flight, there remains significant opportunity for further growth in this business from a growing market, new parcel channels and the continued consumer adoption of out of home while also, of course, delivering strong commissions and additional consumer footfall into our retailer network. Secondly, in Open Banking and digital payments, our investment in recent years has ensured we now have, through a combination of MultiPay and OP Connect, a comprehensive multichannel payment proposition, in which to do more with our existing clients and expand into new sectors with our payment services. Our strategy in Open Banking and division of responsibility between the Obi Connect and PayPoint teams is clear. The PayPoint team are focused on winning business with new and existing clients, leveraging the OB Connect open banking platform and its capabilities, and evidence of success is in the addition of a further 28 clients in year. In the meantime, the Obi Connect team are focused on major and longer term opportunities around the world and providing support and expertise to deliver data sharing ecosystems for major banks and jurisdictions, very much building on their success in New Zealand with the New Zealand Banking Association.

[Nick Wiles, Chief Executive at PayPoint]

In addition, the OB Connect team are focused on the next generation of open banking technology and capabilities to drive our future pipeline. In our multi pay business, our focus is on cross and upselling our enhanced payment capabilities to our existing clients from a strong relationship base while continuing to grow in new areas such as the housing associations, charities, local and central government, where we're looking to bring innovation, technology to improve customer experiences, increase choice and reduce cost. In both Obi Connect and MultiPay, our new business pipelines are strong, with a growing number of important tenders now live and some early year wins already secured. It's clear across these two businesses, we have significant further opportunity for growth. Turning now to access to cash and local banking.

[Nick Wiles, Chief Executive at PayPoint]

Look, for those of us in the business, this opportunity has been a major project for a considerable time as we've developed and worked in collaboration with a number of high street banks to build both an app and a card enabled consumer cash deposit solution. And we're now finally ready to roll this out across our retailer network. This service very much builds on our success today with a number of the neo banks who use our network to enable consumer deposits. And we're now at a stage where, over the next few months, we'll be rolling out our two major high street banks for the consumer deposit service via our network, supported by a strong marketing campaign in collaboration with these banking clients to increase both retailer and bank customer awareness and the adoption of this key community service. Our experience with the neobanks tells us that this will be an attractive service to bank customers, giving them an extensive network of over 30,000 locations with long and flexible opening hours for both deposit and withdrawal of cash.

[Nick Wiles, Chief Executive at PayPoint]

Our next stage in local banking will be the rollout of our SME deposit service for the High Street banks for our network early in 2026. And finally, turning to community services and how we continue to encourage better adoption of our range of services by both our retailer partners and their customers. As I indicated at our interims, engagement with our retailers is more important than ever, so we continue to roll out our new services through the network. And a key tool in this challenge is the use of data and analytics to drive better support to our retailers. In getting this right, there is clearly a major prize, higher level of commissions for our retailers and greater value from being a Paypoint retailer and, of course, increased revenue for ourselves from better optimizing our retailer network and service adoption.

[Nick Wiles, Chief Executive at PayPoint]

In addition to the work we've been doing in terms of improving our retailer communications, early life training and support, we are now in the early stages of rolling out a new support team, our store growth specialists, dedicated to supporting our retail estate through store visits driven by targeted data and support. Armed with tailored dashboards, leveraging over 11,000,000 data points from across our retailer estate, this team had the necessary tools and experience to support our retailers to drive better adoption and revenue growth. While it's still early in the rollout of this initiative, the signs are good, and it's clear this team is having an impact on the performance of the stores already visited. And it very much lays the foundation for achieving higher adoption and community service delivery. Naturally, we intend to monitor the service performance closely and the consistency of the impact they are delivering from the retailer sites that have been targeted.

[Nick Wiles, Chief Executive at PayPoint]

It's clear encouraging retailer adoption of both new and existing pay point services is a challenging process. But as I've said already, there is a major opportunity in getting this right. Turning now to the business review. In shopping, we've continued the positive momentum established in the first half with estate growth in the majority of our products and services continuing. In Retail Services, we've delivered overall net revenue growth of 3.5%, with our service fee net revenue increasing by over 10%.

[Nick Wiles, Chief Executive at PayPoint]

And in FMCG, we've continued to build presence with 18 campaigns delivered in the year for a number of major consumer brands with a strong and growing pipeline in prospects for the current year. Progress in our ATM business continues to be frustrating. Although, as we indicated at our interims, we remain convinced we are taking the right actions but need time to see these reflected in the performance of our estate. The financial performance of our Cars business reflects the impact of a tougher half, with both our net revenue and process volume suffering from subdued consumer spending and confidence for the year as a whole. Operationally, we have further strengthened the foundations of the cask business with an enhanced proposition, improved merchant experience and setting live our full partnership with Lloyd's.

[Nick Wiles, Chief Executive at PayPoint]

In terms of future growth, we continue to develop our sales channels, making changes and enhancements where necessary, with a particularly strong performance from our telesales team in the year. We are targeting a further reduction in our merchant churn rates in the current year and adding further to our merchant proposition through our mobile app, reward scheme, expansion to our business finance offer, the launch of adoption of additional EPOS integrations and the relaunch of our ecom product. In Parcels, another strong year, with net revenue and parcel transactions increasing by more than 30%. We've continued to grow the Collect plus Estate in locations where we can add value for our carrier partners. And in support of in post Yodel, we're now harmonizing their network locations to support further growth.

[Nick Wiles, Chief Executive at PayPoint]

We continue to build volume in our expanding Royal Mail network, and we're now seeing the parcels through our network from the Chinese marketplaces, all of which will create a strong platform, as I described earlier, for further growth in the current year. In Payments and Banking, we continue to make progress in the repositioning of this business towards MultiPay, our digital payments platform and our Open Banking proposition, as I described earlier. In Digital Payments, our net revenue increased by over 12%, with 50 new client services going live across a range of sectors. And in Open Banking, again, as I said earlier, we added a further 28 clients. You will see we've given greater detail in the Cash Through to Digital segment of the business, which shows continued strong growth in the cash banking services we provide for a number of the neo banks, a flat performance from our gifting activities and a decline in the net revenue from online gaming, principally with Paysafe.

[Nick Wiles, Chief Executive at PayPoint]

As we look forward, in addition to continued transaction growth with our neo banking clients, we see significant potential consumer demand for our brand products in store. These are products such as roadblocks, PlayStation and Netflix. And currently, we have underway a project to merchandise a combined Love to Shop physical card and e code card top up display unit to over 5,000 locations within the Paypoint estate. We believe with the right support from our field sales team and positioning in store, this initiative will both drive revenue and footfall. We expect these units to be fully rolled out and live during the second quarter of the current year.

[Nick Wiles, Chief Executive at PayPoint]

Our cash payments revenue was down 2.7% for the year as a whole, consistent with our expectations, with energy being the key driver to this. Finally, turning to Love Shop. Another strong performance for the year with a modest increase in revenue and a 30% increase in net profit. The Love to Shop business delivered a more than 5% increase in billings for the year, with a strong performance from both existing clients and new business. Park Christmas savings delivered another solid performance, and NBL has continued to grow strongly in terms of process value.

[Nick Wiles, Chief Executive at PayPoint]

Highstreetvouchers.com delivered a strong performance and well ahead of plan, and our ecom partnership launched just ahead of peak, brought a new channel for our Love to Shop physical card into a number of high street brands and major grocers, has had a terrific start with over £2,900,000 of billings in year. And that number has now grown to over £4,000,000 towards the May. Building on this excellent year, plans are already underway for further growth and expansion. In Love to Shop business, we expect to deliver further billings growth in year with higher client retention rates and improved new business pipelines. In MBL, revenue opportunities continue to grow as we provide gift card management services to a growing number of clients.

[Nick Wiles, Chief Executive at PayPoint]

And we're seeing a growing number of cross group opportunities, particularly from procurement frameworks and selling into the Paypoint client base. In our prepaid payment platform, we've had an encouraging start to the Par Christmas Savings twenty twenty five Christmas savings season. With improved customer acquisition, better client retention and the launch of a number of new digital tools, including our agent app to support savers through the year. We also have a number of new initiatives underway to support the white label expansion of our prepayment savings platform and the launch through the year of a new sales channel and enhanced product. As I've said already, after a strong start to the income partnership, we expect to see further expansion and presence within the major retail gift card malls ahead of the peak sales period.

[Nick Wiles, Chief Executive at PayPoint]

Overall, this business continues to offer significant growth opportunities from a strengthened technology platform, a broadening range of physical and digital products and a growing number of channels to the market. Finally, turning to our outlook for the current year. We've established new targets for the business for the next three years, which we believe are challenging and will deliver enhanced shareholder value and returns. We've had an encouraging start to the current year and are clear on the key actions needed across our growth building blocks to deliver our objectives for the year. We've committed to an increase in extended share buyback program alongside a continued growth in the dividend, all within a prudent capital structure, and we remain confident delivering further progress in the current year, meeting expectations and achieving our financial goals over the next three years.

[Nick Wiles, Chief Executive at PayPoint]

And with that, I'm very happy to open up to any questions.

[Operator]

We will now begin the question and answer session. The question comes from Michael Donnelly from Investec. Please go ahead.

[Michael Donnelly, Equity Analyst at Investec]

Thanks very much. Can you hear me okay, Nick?

[Nick Wiles, Chief Executive at PayPoint]

Yes. Good morning, Michael. Hi.

[Michael Donnelly, Equity Analyst at Investec]

Good morning. Just two straightforward ones for me, please. Firstly, given the sales success that you've had with organizations like DWP and DBLA and the focus on efficiency in yesterday's spending review. Do you think you've got enough sales focus on growing the government business? And might you consider partnering with any providers who already have strong links into expanding government departments to maybe complement their services?

[Michael Donnelly, Equity Analyst at Investec]

And then secondly, on parcels, it seems the pricing grew about 6% there just simplistically comparing net revenues to volumes. Am I reading that right as a reversal of perhaps lower pricing in recent years to support volume growth? And how much more scope is there for pricing increases as your strong growth in that estate continues? Thanks.

[Nick Wiles, Chief Executive at PayPoint]

Yes. Look, two great questions. Thank you. In terms of central government, I mean, you're absolutely right. I mean, there's a very sort of formal way in which actually government departments procure services.

[Nick Wiles, Chief Executive at PayPoint]

And certainly, we're increasingly focused on how we best engage with those procurement frameworks. We have been investing more resource in the team, and we've got one or two things in the pipeline at the moment to strengthen further that team. Because I think you're right, I think it almost goes hand in hand with the growing capabilities that we've got, particularly around Open Banking. So I think having now got the suite of skills and including, for example, bringing Love to Shop Essentials into that mix as well, I think we've got a lot more to offer specific government departments, whether that's the DWP, the DVLA more broadly across government. So I think we've got more in the toolkit.

[Nick Wiles, Chief Executive at PayPoint]

And I think we're thinking harder about how we harness the right resource to engage actually and sort of really make the most of those procurement frameworks. So I think there's more to come from us in that area. Clearly, the reality is they're competitive. The outcomes are obviously binary. And I think the sort of the preparation period actually ahead of actually sort of the procurement process is actually probably longer.

[Nick Wiles, Chief Executive at PayPoint]

But I think the prize is clearly a material one. And I think if you win these contracts and you deliver well, then I think that you're well embedded actually for a long period. So for us, I think you're absolutely right. There's a greater opportunity perhaps than there's ever been in terms of actually sort of offering our services into central government. We are doing already more with the DWP.

[Nick Wiles, Chief Executive at PayPoint]

We're talking particularly around the open banking opportunity. And I think you should expect us to be seen to be doing other things with other government departments. On Parcels, I think to be fair, that's more a function of mix in terms of the sort of, if you like, the rate card across carrier and also across the particular sort of service, whether it's actually a collect service, whether it's a return or whether it's a store to store. We haven't seen any positive movement in terms of pricing. I would say pricing remains competitive in the parcels market.

[Nick Wiles, Chief Executive at PayPoint]

So I think it's more a function of mix than it is actually of actually changing the rate card.

[Michael Donnelly, Equity Analyst at Investec]

That's great. Thank you.

[Operator]

The next question comes from Joe Brandt from Panmur Liberum. Please go ahead.

[Joe Brent, Equity Analyst - Business Services & Construction at Panmure Liberum Limited]

Morning. Three questions, if I may.

[Nick Wiles, Chief Executive at PayPoint]

Good morning, Joe. Hi.

[Joe Brent, Equity Analyst - Business Services & Construction at Panmure Liberum Limited]

Firstly, can you tell us a little more about the progress you're making with the high street banks and the scale of the opportunity there? Secondly, it's good to see the growth with Royal Mail. Can you give us an indication of the ramp up and when this might reach maturity? And finally, you delivered £6,000,000 of savings in FY 2025. Are there any further savings in FY 2026 or any annualization benefit from the savings you made last year?

[Nick Wiles, Chief Executive at PayPoint]

Sure. If I may, I'll take the two. And I think, Rob, it'd be great if you could actually pick up the last one. Progress for the high street banks. I think as I said, look, for those of us in the business, this has been a really, really long term project.

[Nick Wiles, Chief Executive at PayPoint]

And the reality is that in rolling out to the for the two high street banks over the next few months. I think one for the app enabled consumer deposit, one for the card enabled consumer deposit. I think, for the time, there was a note here, and I think it's really exciting. The high street banks are thinking about how we're going to use our network, I think the quality of our network and I think the breadth of it. So I think look, I don't want to oversell this on the way in, but I think that I think there's a lot of commitment from both banks to the way they can they sort of communicate and actually market this to their customers.

[Nick Wiles, Chief Executive at PayPoint]

I think it absolutely enables that to actually access cash deposit and cash withdrawals. So I think it could be quite material for us. And I think certainly, the focus we've got on its operational delivery, I think, demonstrates to us certainly how important it is. And certainly, I think we'll better give some early indications when we get to our November interims as to how that's landed and sort of the early adoption. On raw mail, I mean, look, we're very early days.

[Nick Wiles, Chief Executive at PayPoint]

I mean, look, we're at 7,500 locations. Royal Mail want to push that up to 10 quickly and actually 15 longer term. And we are seeing you may have seen some marketing over the summer. I think Royal Mail are increasingly ramping up that marketing. As you know, they've gone through a change of ownership and are now owned by EP, the Kratinsky Group.

[Nick Wiles, Chief Executive at PayPoint]

And I think there is a real commitment from them to commitment to out of home, away from doorstep. And I think PUDO for them and I think Collect plus particularly is a real focus. And I think, again, you will see further progress in volumes from raw mail by the time we get to November. And certainly, think we're in the very best position we can be in the early preparation for peak. And I would expect to see a really material ramp up in the volumes we're seeing there at the moment.

[Nick Wiles, Chief Executive at PayPoint]

Our current run rate from memory is around the 3,000,000 to 4,000,000 annualized, and I would expect that to grow very materially from here. Rob, do you want to pick up the last question?

[Rob Harding, CFO at PayPoint]

Yes. Andrew, in terms of the point around potential future savings, I think it really ties back into the new target that Nick spoke about in terms of driving greater automation and agility. And obviously, we've appointed an external party to support that, taking a very restructured approach to say, well, where are the opportunities to look at automation and agility to improve process efficiencies internally and also the customer experience as well. So we've gone through an initial discovery phase there. We haven't yet gone out with any kind of potential upsides from a financial perspective, but I do strongly believe there's a significant opportunity through automation and increasing the kind of the simplicity of how we do business.

[Rob Harding, CFO at PayPoint]

I think that's probably something we'll update on probably for the midyear perspective in terms of our progress. So it's a little bit too early to tell inside in terms of what the size of the price is in terms of cost savings for the future. But I do think there's significant potential there.

[Joe Brent, Equity Analyst - Business Services & Construction at Panmure Liberum Limited]

Thank you, Rob. And then just to clarify, am I right that there's nothing in consensus yet for the savings you might make out of that automation and greater agility?

[Rob Harding, CFO at PayPoint]

There's nothing in there in terms of consensus.

[Joe Brent, Equity Analyst - Business Services & Construction at Panmure Liberum Limited]

Thank you.

[Operator]

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Nick Wise for any closing remarks.

[Nick Wiles, Chief Executive at PayPoint]

Thank you again, and thank you everybody for joining us this morning. As I said already, I think good progress in the year. I hope we've been very clear as to the targets for the business over the next three years, And we look forward to updating you again with our interim results in November. So thank you. Have a good day.

[Operator]

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

Participants

Executives

• Nick Wiles, Chief Executive
• Rob Harding, CFO

Analysts

• Michael Donnelly, Equity Analyst at Investec
• Joe Brent, Equity Analyst - Business Services & Construction at Panmure Liberum Limited