PayPoint plc

Net revenue was GBP 84.7 million, marginally up versus the prior half. Underlying profit before tax was GBP 25.7 million, down 4.5%, and reported profit before tax was GBP 19.9 million after GBP 5.8 million of deductions, including GBP 2.6 million of amortization and GBP 3.2 million of exceptional items. Underlying EBITDA was GBP 37.3 million, broadly flat, diluted underlying EPS was 26.7p, down 2.6%, and net debt was GBP 84 million, down 3.2%. PayPoint segment revenue rose 2.9%, e-commerce revenue was GBP 8.6 million and grew 7.5%, payments and banking revenue grew 4.4% including GBP 1.9 million from OBConnect, and Love2shop revenue fell 9.6% due to timing of revenue recognition. For the full year, management expects Love2shop revenue growth to unwind in the second half, year-on-year revenue growth for the segment, over GBP 90 million of shareholder returns, and net debt to rise in the second half but remain within the target leverage ratio of 1.2 to 1.5x.

Nicholas Wiles framed the half as resilient despite a weak consumer backdrop and two specific headwinds: InPost Yodel disruption in parcels and slower-than-expected OBConnect growth. He emphasized that the company is still executing on its long-term growth plan, with new launches in BankLocal, Royal Mail Shop, and Love2shop/InComm shifting the focus from rollout to consumer adoption. His tone was confident but measured, repeatedly noting that the business remains on track for medium-term growth even if the GBP 100 million EBITDA milestone will take longer than initially hoped.

Rob Harding highlighted net revenue of GBP 84.7 million, underlying PBT of GBP 25.7 million, underlying EBITDA of GBP 37.3 million, diluted underlying EPS of 26.7p, and net debt of GBP 84 million. He said costs rose GBP 1.3 million half-on-half, mainly from GBP 1.8 million of OBConnect costs, partly offset by a GBP 1.5 million reduction in people and overheads. Cash generation from operating activities was GBP 24.2 million, down from GBP 30.7 million, with the decline mainly working capital-driven; CapEx was GBP 10.9 million, legal settlement payment was GBP 10.4 million, and the company also made a GBP 43.5 million cash inflow from the part disposal of Collect+. He said the interim dividend increased 2.1% to 19.8p and reiterated that full-year shareholder returns should exceed GBP 90 million, while leverage should stay within 1.2 to 1.5x.

Analysts pressed management on the next phase of the Nile automation project, Royal Mail volume ramp-up, Lloyds Cardnet, Chinese e-tailers, and when the GBP 2 million-plus operational upside might start to show. Rob said the automation phase is now about choosing external providers and validating the business case, with implementation expected early in FY '27 after work through the current financial year; he also said costs for the transition would be treated as exceptionals. On Royal Mail, Nick said the ramp-up is meaningful but that a more material contribution from volumes will come next year, while on cards he said the estate is slightly smaller but the proposition is stronger and sales should improve in the second half. On Chinese marketplaces, he said adoption of out-of-home at checkout remains slower than hoped, even though it remains a major opportunity.