PayPoint has Thursday reported a steady half-year performance as the payments and parcels provider leans on new services – including BankLocal and Royal Mail Shop – to drive growth across its 31,000-strong UK retail network.
For the six months to 30 September 2025, group revenue rose 6.7 per cent to £144.1m, though net revenue was broadly flat at £84.7m. Underlying EBITDA dipped slightly by 0.5 per cent to £37.3m, while profit before tax fell nearly 14 per cent to £19.9m.
Chief executive Nick Wiles said PayPoint had delivered “important milestones” despite a weak economic backdrop and two notable business challenges: disruption from the InPost/Yodel network harmonisation, and slower-than-expected monetisation within open-banking subsidiary obconnect.
“In the first half, the underlying business performance has continued to trade in line with expectations and, throughout the Group, we have continued to broaden the adoption of our enhanced capabilities into our existing client base, develop and execute on strong new business pipelines and accelerate the execution of our key strategic projects,” he noted.
Retailer-facing services advance
Across the Shopping division, which includes PayPoint One, service fee net revenue grew 8.4 per cent to £11.6m as the number of revenue-generating PayPoint One/Mini sites climbed to 20,389. Card payments revenue fell 3 per cent to £16.1m, reflecting estate changes, though the company said it had sharpened its focus on merchant profitability.
Overall, Shopping divisional net revenue increased by 0.6 per cent to £33.1m.
Significantly, PayPoint has rolled out a new Store Growth Specialist team to work more closely with independent retailers on revenue-driving opportunities, backed by more targeted data and field team support.
ATM performance has also stabilised after operational changes brought transaction levels back in line with LINK benchmarks.
UK retail network increased to 30,962 sites (31 March 2025: 30,712), with 70 per cent in independent retailer partners and 30 per cent in multiple retail groups.
Collect+ boosted by Royal Mail investment
The e-commerce division saw net revenue rise 7.5 per cent to £8.6m, powered by a 20 per cent jump in Collect+ parcel volumes to 74.3 million.
Royal Mail’s £43.9m strategic investment in Collect+, announced in September, is set to significantly expand services available to convenience stores. More than 3,000 sites have already been rebranded as Royal Mail Shop, enabling in-store postage purchases as well as parcel send, collect and returns. The rollout will extend to the full 8,000-site Collect+ Royal Mail network over the next six months, including the introduction of self-service kiosks in Q4 FY26.
PayPoint said it had taken proactive steps to mitigate disruption from the InPost/Yodel network merger, including priority routing for high-volume stores and dedicated PUDO-only routes.
BankLocal deposits rising fast
The Payments & Banking division posted 4.4 per cent growth to £26m. A highlight for retailers is the rapid rollout of BankLocal, which went live in August for Lloyds Banking Group customers. It allows app-based cash deposits across more than 30,000 PayPoint locations, with card-based deposits added in 3,000 stores in September – particularly benefiting customers without digital banking access.
PayPoint processed over £10m in deposits through the service by mid-November. With many transactions taking place outside traditional banking hours, the company said the network’s extended opening times underscore its essential role in community access to cash.
Open banking activity also accelerated, with new wins including the Department for Work and Pensions, and AccessPay. Digital net revenue jumped nearly 40 per cent to £8.8m, including a £1.9m contribution from obconnect.
Love2shop stabilising ahead of peak
Love2shop revenues dipped 9.6 per cent to £17m due to changes in revenue-recognition timing, though the business delivered growth in billings and continues to expand distribution through partners such as Sainsbury’s Local and The Range. A new digital Mastercard gift card is due to launch in early 2026.
Outlook: cautious but confident
Despite the parcels disruption and slower obconnect growth, PayPoint expects FY26 underlying EBITDA to be ahead of last year and in line with market expectations. The company has reiterated its long-term ambition to reach £100m underlying EBITDA, though Wiles acknowledged this will “take longer” than originally planned.
“Consumer uncertainty and tightening household budgets are not new factors as we enter the peak trading period for several of our businesses,” Wiles said.
“Our continued confidence in the growth opportunities in the business and making further progress in our long-term objectives has provided the platform for the Board to further enhance shareholder returns in the current year.”