PayPoint outlines restructuring plan; eyes 'record' 2026 results

PayPoint PLC on Monday outlined plans to restructure its business into four main branches, whilst reaffirming a confident view on the past year’s performance.

Shares in the Hertfordshire, England-based payments processor and retailing technology provider rose 2.6% to 573.73 pence on Monday morning in London, but are down 15% over the past year.

PayPoint expects to report ‘a record financial performance’ for the year ending March 31, ‘broadly in line with expectations.’ In its results statement for the half-year ended in September, PayPoint had forecast growth in full-year underlying earnings before interest, tax, depreciation and amortisation. However, it also said it was unlikely to reach its underlying Ebitda goal of £100 million in financial 2026, though this remained ‘a key financial objective the business is confident of reaching’ in future.

Back in January, the company stressed that it remained ‘agile’, despite sales edging 0.5% lower in the third quarter ended December 31 to £52.7 million from £53.0 million on-year.

The company on Monday added that it is ‘on course to reduce its issued share capital by circa 30% in the three years to FY28 while continuing to grow the ordinary dividend, with share capital already reduced by circa 15% in the current year.’

This comes after the extension of a buyback scheme, announced in July, which has seen PayPoint repurchase a total of approximately 4.0 million shares worth £23.8 million.

Also on Monday, PayPoint outlined a new restructuring agenda, saying ‘it has taken the decision to simplify the business through a reorganisation into four business units’. These will include Network Services, Digital Payments & Open Banking, Love2shop and Merchant Services.

‘This will result in a better integrated and more transparent business with a simpler investment case,’ PayPoint noted.

‘Consistent with this reorganisation is a fundamental review of the group cost base which will lead to an unlocking of cost savings and enable reallocation of investment with a renewed focus on driving enhanced shareholder returns.’

‘The group has made significant progress on its transformation journey over the past five years, assembling additional capabilities and opening up a range of new opportunities. The next stage now is to convert these gains into meaningful and sustained growth through strong operational delivery – realising the full potential of the group,’ PayPoint added.

Network Services includes PayPoint’s convenience store operations such as bill payments and parcel collections, branded as Royal Mail shops and Collect+. By PayPoint’s estimates, the division contributed £91.3 million to revenue in financial 2026. PayPoint plans to reorganise this division into Field Services and a Retail Service Hub, serving four geographical regions.

Digital Payments & Open Banking accounted for £13.4 million of sales in financial 2026, and will operate ‘under a single management and operating structure’ going forwards.

Love2shop, which PayPoint acquired in 2023, brought in revenue of £53.2 million over the past year. The gift card, rewards and prepaid savings platform will benefit from ‘an improved focus on new business growth’ as a result of the restructuring, PayPoint said. ‘There also remain significant opportunities to integrate Love2shop more efficiently across the wider PayPoint Group and client base,’ it added.

Finally, Merchant Services, which generated around £31.5 million in annual revenue, will see ‘a fundamental reset’.

‘Today, the business delivers in-store and online card acquiring, terminal rental and business finance solutions,’ PayPoint explained. ‘Our strategy needs to adapt and respond to the changes in a highly competitive card processing market.

As a result, the company is working to bring the Merchant Services estate under a single management structure.

‘We will stop targeting low value, high-churn merchants in a market segment that has become increasingly competitive and purely price focused... In addition, we are planning a significant shift in our merchant acquiring new business go-to-market strategy,’ PayPoint said.

The company is also eyeing growth from partnerships with FreedomPay Inc and lender Lloyds Banking Group PLC.

‘The actions we are taking to simplify and optimise the business structure will better position PayPoint to prioritise resources and focus towards areas which will deliver growth for the long term despite structural change in a number of our key markets and a slower than expected pace in the roll out of some of our key growth initiatives,’ PayPoint added.

‘In terms of trading, our outlook for the year ahead is balanced between the continued growth across the group, further cost efficiency initiatives and recent trends in certain of our business units, in particular our parcels business. Overall, this indicates the business is likely to exceed the underlying profits delivered in FY26 and within the range of market expectations.’

PayPoint plans to publish financial 2026 results and further details of the restructuring on June 11, ahead of a capital markets day in September.

Copyright 2026 Alliance News Ltd. All Rights Reserved.