PayPoint Plc Annual Report 2023
Enabling
Annual Report 2023
payments and commerce
Our purpose
We deliver innovative services that make people’s lives a little easier every day.
Who we are
Making
people’s lives
a little easier
For more information go to
corporate.paypoint.com
Strategic report Governance Financial statements Shareholder information01 PayPoint Plc Annual Report 2023
Financial highlights
Contents
Strategic report
01 Financial highlights
02 PayPoint Group at a glance
04 Investment case
06 Acquisition of Appreciate Group
10 Chief Executive’s review
14 Market overview
18 Our business model
20 Our strategy
36 Key performance indicators
38 Responsible business
61 Risk management
62 Principal risks and uncertainties
69 Viability statement
71 Financial review
Governance report
79 Introduction to the Corporate Governance report
from the Chairman
82 Board of Directors
84 Executive Board
88 Corporate Governance Report
94 Nomination Committee Report
96 Audit Committee Report
104 Directors’ Remuneration Report
124 Directors’ Report
127 Statement of Directors’ responsibilities
Financial statements
128 Independent Auditor’s Report
134 Consolidated statement of profit or loss
135 Consolidated statement of comprehensive income
136 Consolidated statement of financial position
137 Consolidated statement of changes in equity
138 Consolidated statement of cash flows
138 Reconciliation of cash and cash equivalents
139 Company statement of financial position
140 Company statement of changes in equity
141 Company statement of cash flows
142 Notes to the consolidated financial statements
Shareholder information
182 Notice of Annual General Meeting
185 Notes to the Notice of Annual General Meeting
187 Explanatory notes to certain of the resolutions to
be proposed at the Annual General Meeting
190 Officers and professional advisers
1 Net revenue is an alternative performance measure. Refer to note 4 to the financial information 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.
3 Underlying profit before tax (profit before tax excluding adjusting items) is an alternative performance measure. Refer to note 1 to the financial information for a reconciliation.
4 Cash generation is an alternative performance measure. Refer to the Financial review – cash flow and liquidity for a reconciliation from profit before tax.
5 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.
Revenue from
continuing operations
£167.7m
+15.6%
(FY22: £145.1m)
Underlying profit before tax
3
(profit before tax excluding adjusting items)
£50.8m
+5.8%
(FY22: £48.0m)
Net corporate debt
5
£72.4m
+65.0%
(FY22: £43.9m)
Ordinary paid dividend
per share
34.6p
+3.0%
(FY22: 33.6p)
Underlying EBITDA
2
£61.3m
+5.2%
(FY22: £58.2m)
Ordinary reported
dividend per share
37.0 p
+5.7%
(FY22: 35.0p)
Cash generation
4
£62.3m
+15.6%
(FY22: £53.9m)
Profit before tax
£42.6m
-45.8%
(FY22: £78.5m)
Diluted earnings per share excluding
adjusting items
60.3p
+8.8%
(FY22: 55.4p)
Net revenue from
continuing operations
1
£128.9m
+11.9%
(FY22: £115.1m)
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02 PayPoint Plc Annual Report 2023
PayPoint Group at a glance
Enabling
payments and commerce for the
public and private sector
This has been another
strong year for the
PayPoint Group
where we have made
significant steps to
materially enhance
our platform and
capabilities to deliver
sustainable, profitable
growth and enhanced
rewards for our
shareholders.
What we do:
We enable payments and commerce
for the public and private sector,
connecting millions of consumers
with over 60,000 retailer partner
and SME locations.
Our divisions:
We operate across four divisions:
Shopping E-commerce Payments & Banking
Love2shop
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,
Home delivery
How we do it
• E-commerce – Collect+
(Parcels Pick Up, Drop O,
Send)
How we do it
• Digital payments – MultiPay
and PayPoint OpenPay
• 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
Who we work with
Who we work with Who we work with Who we work with
Read more on page 20
Read more on page 24 Read more on page 28
Read more on page 32
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Strategic report Governance Financial statements Shareholder information03 PayPoint Plc Annual Report 2023
Our approach: PayPoint Group
in numbers
Our purpose Our vision
Why we exist
We deliver innovative services
that make millions of people’s lives
a little easier every day
What we aim to achieve
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
Our values
How we bring our vision to life
Ambitious Results focused Accountable
Collaborative Can do
Our strategy
Embed PayPoint Group at the heart of SME and
convenience retail businesses
Become the definitive technology-based e-commerce
delivery platform for first and last mile customer journeys
Grow integrated payments platform across cards,
Direct Debit and Open Banking
Reinforce leadership position in giing, rewards and
prepaid solutions
Building a delivery-focused and inclusive organisation
Read more on page 18
ESG
Creating long-term value
for all our stakeholders
We are committed to delivering sustainable, essential services that have a positive
impact on our customers, UK communities and the world we live in
Read more on page 38
PayPoint sites
28,478
Card payment sites
31,777
Parcel transactions
56.4m
Card payment
transactions
386.7m
Retailer partner and
SME locations
62,610
PayPoint Trustpilot
score
4.9/5
Good colleague
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PayPoint Plc Annual Report 202304
We enable payments and commerce
for the public and private sector,
connecting
millions of consumers with
brands, retailers and SMEs
Investment case
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Strategic report Governance Financial statements Shareholder information05 PayPoint Plc Annual Report 2023
Materially enhanced platform
and capabilities, underpinned
by partnership philosophy
Strong SME and retailer
partner proposition
Expanded integrated
payments platform
Excellence in e-commerce
customer experience
and technology
Enterprise platform for
future growth in new
and existing markets
Growth-focused
deployment of
financial resources
In the past year, we have materially enhanced
our platform and capabilities across the Group,
including the new opportunities delivered through
the acquisition of the Appreciate Group. This
will unlock and deliver sustainable, profitable
growth and enhanced rewards for shareholders,
underpinned by our business-wide
partnership philosophy
and intensity of execution.
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
services provided through our in-store technology
to drive retention and deliver more opportunities
to earn for our partners.
We continue to diversify our digital payments
client base and expand the range of digital
solutions that we can deliver to support our
clients across multiple sectors, including local
and central government, local authorities,
housing associations and charities.
Collect+ is the number one carrier agnostic,
out-of-home network, driving excellent volume
growth and a superior in-store experience,
supported by the impactful investment in ‘print
in store’ devices over the last two years. The
service is a ‘must-have’ for retailer partners,
delivering additional revenue and footfall.
With the addition of Love2shop and prepaid
solutions to our capabilities, our materially enhanced
platform gives us the potential to unlock new
markets, partners and revenue streams, combined
with our partnership philosophy and an intensity
and focus on execution.
We remain committed to maintaining our
strong capital discipline and cash flow, whilst
continuing to invest in growth areas across
the Group to further enhance our capabilities,
unlock opportunities and accelerate our growth.
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06 PayPoint Plc Annual Report 2023
Acquisition of Appreciate Group
The UK’s number one digital platform for
employee and customer rewards, helping
brands and businesses attract, retain
and delight customers and employees.
• Customer engagement platform, driving consumer rewards, giing and
retention across multiple channels.
• Employee rewards and engagement platform, helping businesses drive
satisfaction, retention and rewards for their people.
• Leading technology platform with powerful CRM and end to end customer
lifecycle management.
• 8 million prepaid products distributed every year, working in partnership with
over 140 retail brands online and on the High St in over 23,000 locations.
value & opportunities
Creating further
Corporate and Consumer Consumer
• Employee rewards
and engagement
• Customer rewards, giing
and retention
• FY23 billings of £207m*
• Prepaid savings solutions
for key events
• Over 330,000 families helped
over last two year
• FY23 billings of £161m*
* Full year of billings pre and post acquisition.
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Strategic report Governance Financial statements Shareholder information07 PayPoint Plc Annual Report 2023
What have been your first impressions
since joining the PayPoint Group
in February?
It’s clear from the first few months that there
is a fantastic cultural alignment between the
two businesses. The PayPoint Group has great,
experienced people at all levels and my team have
been made to feel very welcome. The breadth
of solutions that the wider Group now has is
powerful and Love2shop just adds to those
capabilities, creating lots of opportunities to
expand into new verticals and markets.
And what do you believe the benefits are
of being part of a larger business now?
One of the key benefits is about broadening our
reach much wider and further than we would
have operating as a standalone business. The
opportunities and connections to new markets,
customers and opportunities are significant, as
well as Love2shop benefitting from the breadth
of skills, experience and resources across the
PayPoint Group. This collaborative, partnership
approach is at the heart of how the Group does its
business, and I can see clearly how this will benefit
our extensive range of partners and clients.
Why do you think Love2shop are set
for further growth over the next
few years?
We have the market leading multi retailer prepaid
technology platform and product available in
a wide choice of formats (physical and digital)
for giing, reward, recognition, incentives and
broader prepaid solutions. We are committed to
investing further in our brand, product, people
and technology to ensure our solutions remain
market-leading. In our Corporate business, we
help businesses solve real challenges around
the retention and acquisition of customers
along with helping businesses with their own
employee reward and recognition programmes.
Moreover, our prepaid Christmas model (Park
Christmas Saving) is relevant for today’s market
and economic challenges, and can expand to
help consumers with other events in the future.
Q&A
with Julian Coghlan
Managing Director, Love2shop
What opportunities are you most
excited about for the next 12 months?
The whole team are looking forward to becoming
further integrated into the Group, taking
advantage of the clear customer and technology
synergies and getting deeper into the wider
capabilities that can help our current customer
base. I’m particularly excited about the Fed
(Federation of Independent Retailers) deal
recently announced, working together to create a
network of Park Super Agents within the PayPoint
retailer partner network – this is a great example
of what the PayPoint Group brings to help
expand and grow our propositions. Similarly, the
development of our broader prepayment products
and technology platform, to assist with innovative
payment opportunities beyond our current
propositions and verticals, is another area that
will have a big focus for us in the next 12 months.
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08 PayPoint Plc Annual Report 2023
Acquisition of Appreciate Group continued
The UK giing market
Love2shop has a well-established technology platform, more than
400,000 customers, a network of popular brand partners and significant
headroom for growth across the large and growing UK gi card and
voucher market, which is valued in excess of £7.2 billion per annum.
Source: UK Gi Card and Voucher Association
Total current UK Gi card market
valued at over £8bn
Opportunity to grow market share
in key areas
67% B2C
63.5% purchased via physical stores
70.8% for giing
21.8% for self-use
Budget/Saving – Park Christmas
Savings proposition targeting
cost-conscious consumers
Corporate Rewards/Incentives –
Appreciate Business Services providing
employee reward solutions in a segment
forecasting long-term growth
B2C – Love2shop brand building
its position at the first choice for
consumer giing
33% B2B
Consumer
usage
16–34
35–54
55+
66.7% spend more
than the value of
the gi card
31% of 35–54 year olds
become regular customers
aer using a gi card with
the brand
25.9%
37.0%
37.1%
Consumer
segments
Spend
and loyalty
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Strategic report Governance Financial statements Shareholder information09 PayPoint Plc Annual Report 2023
Growth in digital rewards and engagement
Significant revenue opportunities across three key areas
of the business identified at time of acquisition
Enabling enterprise
level solutions
Adding Love2shop and prepaid solutions to our capabilities creates
a materially enhanced platform across the Group, which gives us the
potential to unlock new markets, partners and revenue streams
Retail
The Fed – new partnership announced to create a Park Christmas Savings
Super Agent network of 1,500 retailer partners, combining PayPoint One,
Parcels and Park Savings and creating an earning opportunity of circa £1k
per annum for participating retailers
Clients
Local Authorities – expanding range of disbursement solutions
to local authorities with Love2shop Essentials, leveraging prepaid solutions
and enabling funds to be issued for specific uses
e.g. clothing, food
Carriers
Parcel Carriers – in addition to our core Pick Up Drop O service, we are
enhancing our proposition with Love2shop gi card solutions to enable
carriers to issue customers rewards/service apologies and improve their
employee engagement programmes
New Sectors
Multi-channel retailer – combining our expertise in giing, loyalty, card
processing and technology to provide online and in-store solutions,
supporting their multichannel growth ambitions and strategic goals
Events and Brand Activation – enhancing a successful major events
business with our prepaid solutions and PayFac capability to expand
their oering, improve the event-goer experience and expand their
brand activation programme via our network of 28k stores
Prepayment
saving
1. FY24 cycle for Christmas saving – launch of digital tools
and proactive support for agents to reduce saver churn and
improve recruitment
2. Partnership launched with The Fed to establish third channel
of 1,500 PayPoint retailer Super Agents managing 30–50 new
savers each, saving c.£400 each, expanding geographical reach
through extensive PayPoint network
3. Leverage Collect+ network for distribution of vouchers, inc.
on-demand print/greeting card solution maximising existing
investment in label printers
Corporate
rewards & giing
1. Continuing Appreciate Business Services in broadening
out corporate client base and open up opportunities within
PayPoint client base for rewards and giing
2. Add Appreciate services to existing PayPoint government
frameworks, inc. G-Cloud
3. Develop white-label solutions and further uses of prepaid
cards for corporates/large retailers in public and private sector
specific use vouchers for credit unions to issue for purchase
of white goods
4. Cross-sell of PayPoint integrated payments platform into
Appreciate client base
Consumer
giing
1. Expansion of physical gi cards into retailer partner network
of over 18.000 independent retail stores and opportunity to
displace incumbents within larger retailers
2. Develop Love2shop Local proposition, enabling redemption
across a range of SMEs and retailers across the PayPoint Group
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PayPoint Plc Annual Report 202310
Chief Executive’s review
a materially enhanced
platform to deliver sustainable
Building
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Strategic report Governance Financial statements Shareholder information11 PayPoint Plc Annual Report 2023
“This has been another
strong year for the
PayPoint Group where we
have made significant steps
to materially enhance our
platform and capabilities
to deliver sustainable,
profitable growth and
enhanced rewards for
our shareholders.”
Nick Wiles
Chief Executive
Expanded capabilities and partnership
philosophy opening up new
revenue opportunities
Strategically, we were particularly delighted to
complete the acquisition of Appreciate Group
(now known as Love2shop) in February 2023,
one of the UK’s leading digital platforms for
employee and customer rewards, helping brands
and businesses attract, retain and delight
customers and employees. Appreciate Group
has a well-established technology platform, more
than 400,000 customers, a network of popular
brand partners, and significant headroom for
growth across the large and growing UK gi card
and voucher market, which is valued in excess of
£8 billion per annum. As indicated previously, the
acquisition is expected to be earnings enhancing
in FY24 and will deliver attractive returns for
shareholders, opening up further revenue
opportunities and expanding our capabilities in
the giing, rewards and prepaid savings markets.
Our partnership philosophy across the Group,
combined with an intensity and focus on
execution, is already unlocking new markets and
revenue opportunities for us. We were particularly
delighted to announce our new partnership
with The Federation of Independent Retailers
(The Fed) on 3 May 2023 to create a network
of Park Christmas Savings Super Agents. This
is the first major initiative announced following
the completion of the acquisition of Appreciate
Group. The deal will see our two organisations
working together to create an initial network of
1,500 Super Agents in FY24 for the Christmas
2024 savings season, with retailers recruiting
savers in their area and creating an additional
opportunity to earn over £1,000 per annum from
the service. This is reflective of the strength of
our relationship with The Fed, their executive
team and member base, and more broadly the
partnership approach that we have adopted
across the Group to enhance our relationships
and unlock further growth opportunities across
new and existing markets.
Furthermore, our Open Banking partnership
with OBConnect has enhanced our integrated
payments platform and already yielded positive
results, particularly with our new PayPoint
OpenPay service with Ovo to support Alternative
Fuel Payments and rolling out our Confirmation
of Payee service with the Department of Energy
Security and Net-zero. We see Open Banking
as a key growth area where we can partner with
organisations in the public and private sector
to enhance their payment oering and improve
customer support to those in need.
Accelerated revenue growth and
momentum across all business divisions
Shopping
In Shopping, our retailer partner and SME
propositions have been enhanced further with
strong take up and positive feedback from our
partners. The overall PayPoint network and
PayPoint One estate have grown again this year
and our broader commitment to our retailer
partners to deliver further value and opportunities
to earn has delivered an increase to retailer
commission paid out of over +15% year on year.
New services and transaction volumes have
driven this positive impact to retailer partner
revenues, including our Counter Cash solution,
which is now enabled in 5,680 sites, with 1,930
sites transacting regularly and over £42.9 million
withdrawn in the financial year, and good growth
in our FMCG consumer engagement proposition,
PayPoint Engage, delivering brand campaigns
leveraging our PayPoint One platform, advertising
screens and i-movo vouchering capability.
In Handepay, we have ended the year with our
strongest ever sales performance in H2 FY23 and
have returned the EVO merchant book back to
growth, ending the year at 18,397 sites, with the
sales team now at full headcount and in spite of
recruitment challenges experienced earlier in the
financial year.
This positive progress since H1 FY23 has been
driven by the enhanced proposition, new Android
terminal and the increased optimisation of our
sales eorts in the Handepay business; and in
PayPoint, improved cards pricing and next day
settlement were launched for new and existing
merchants. As we move into the new financial
year, we look forward to accelerating our cards
business further and proactively targeting
the mid-market merchant segment with a
dedicated team. We will continue our focus on
equipping our people with better data, AI tools
and analytics to have quality conversations with
retailer partners/SMEs and a stronger focus on
retention and yielding improved conversion rates.
In addition, the positive performance of Business
Finance via YouLend across both PayPoint and
Handepay was particularly pleasing, supporting
our retailer and SME partners during the current
economic challenges.
We have continued our extensive eorts to
strengthen our retailer partner relationships and
drive adoption of these new opportunities to
earn, including regular face to face store visits and
‘cash and carry’ days, new retailer forums, more
direct communications and our strengthened
relationships with the key trade associations,
including the Association of Convenience Stores
(ACS), the Scottish Grocers’ Federation (SGF) and
the Federation of Independent Retailers (the Fed).
The feedback and support received from these
organisations has been critical to our continued
commitment to support our retailer partners in
delivering vital community services across the UK
and responding to changing consumer needs in
the UK convenience sector.
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12 PayPoint Plc Annual Report 2023
Chief Executive’s review continued
E-commerce
In E-commerce, our year-on-year performance
has been excellent, driven by our strength in the
clothing and fashion categories, the continued
expansion of new services with carrier partners,
including Amazon and Wish.com, and the in-store
experience from investment made in Zebra label
printers over the past 18 months. In each of our
carrier relationships, we have developed plans for
the year ahead to grow volumes further through
our network and to continue enhancing the in-
store customer experience. We were also pleased
to support Royal Mail business customers in 1,455
sites in September and October to keep mail
moving during the recent industrial action.
Payments & Banking
In Payments and Banking, we continue to diversify
our digital payments client base and strengthen
our integrated payments platform as we expand
the range of digital solutions that we can deliver
to support our clients across multiple sectors,
including government, local authorities and
housing associations. Our Payment Exception
Service, delivered for the Department for Work
and Pensions, recorded significant growth year on
year, aer launching in August 2021 and making a
contribution for half of the previous financial year.
We were delighted that the service received three
industry accolades for Social Inclusion in Financial
Services at the recent Payment Awards, FSTech
Awards and Card and Payments Awards, underlining
the vital role our solutions play in serving some of
the most vulnerable people in the UK.
Similarly, over £246 million of Energy Bills Support
Scheme vouchers were redeemed across our
extensive network of over 28,000 retailer partners
from October 2022 to March 2023, providing
a £400 payment over the winter months to
households across the UK. This vital support
for consumers to help with the Cost of Living
leveraged our CashOut digital capability. All of
these eorts have been underpinned with greater
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.
Further progress on our ESG
commitments
Our Environment, Social and Governance (ESG)
strategy has also developed further in the year, as
we consider our social responsibility and impact
as an Executive team and business towards each
of these key areas. In July 2022, we fulfilled our
commitment to ensure all employees are paid a
minimum of the Real Living Wage and Electric
Vehicle charging points have now been installed
at our head oce, supporting the use of electric
vehicles by our employees and visitors. An
inaugural Pride Month programme was launched in
June 2022, as part of our ‘Welcoming Everyone’
activities, providing educational content, further
meetings of our LGBTQ+ network and events
to bring colleagues together, building on our
commitments to diversity, equity and inclusion and
supporting our vision to create a dynamic place
to work. We also partnered with Citizens Advice
and Advice Scotland to support important Cost
of Living targeted consumer campaigns across our
network, via receipt advertising, social media and
retailer communications.
Update on claims against PayPoint
As announced on 29 March 2023, the Group
received ‘letter before action’ correspondence
from a small number of market participants
relating to 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
Ofgem resolution to the case did not include any
infringement findings.
Claims have now been served by Utilita Energy
Limited and Utilita Services Limited (“Utilita”)
and Global-365 plc and Global Prepaid Solutions
Limited (“Global-365”). The Group is continuing
to take legal advice on these two claims and its
position is unchanged. It rejects both claims in
their entirety and intends to vigorously defend
its position.
The Group 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 oered by Global 365.
The Group will continue to update the market
on a quarterly basis as part of its financial
reporting cycle.
Outlook and dividend
Our enhanced platform and expanded capabilities
across the Group, combined with our business-
wide partnership philosophy and intensity of
execution, give the Board confidence in delivering
further progress in the current financial year and
meeting expectations.
The opportunity to deliver enterprise level
solutions, combining our extensive capabilities,
is significant and enables us to deepen our
relationships with existing clients as well as
expanding into new verticals.
Trading early in the current financial year has been
positive, as we have confirmed in our Q1 FY24
trading update, continuing the performance seen
in FY23. We have detailed execution plans in place
to capitalise on the positive momentum built up
in our key growth areas of card processing, Open
Banking, parcels, integrated payments and the
new Love2shop division, delivering profitable
growth in our retail and card estates, further
enhancements to our proposition and positive
new business growth in key target sectors.
As we continue to integrate the Appreciate Group
into our business, we have been giving careful
thought as to the key performance metrics for
the L2S activities, considering the importance of
growing billings as an early indicator of progress,
strong cash generation and its contribution to
the EBITDA of the business as a whole and the
recognition of profit from a business model
which incorporates, management / service fees,
interest on cash balances and revenue from
non-redemption income. In the current year
we are focused on driving the immediate key
performance indicator of billings in Park Christmas
Savings and Love2shop through our extensive
plans to grow the core business, expand areas
of cooperation across the business and unlock
new revenue opportunities as we leverage the
expanded capabilities of the wider Group.
In confirming our own positive trading outlook,
we are alert to the potential impact on consumers
from the broader economic challenges, including
any changes to consumer behaviours in the energy
sector, all of which we monitor closely across
the business.
The Board has proposed an ordinary final dividend
of 18.6p per share, an increase of 3.3% vs the
final dividend declared on 26 May 2022 of 18.0
pence per share, consistent with our progressive
dividend policy of a target cover range of 1.5
to 2.0 times earnings excluding exceptional
items, reflecting our long-term confidence in the
business, the strength of our underlying cash
flow, and the enhanced growth prospects across
the Group.
Our compelling characteristics of strong cash
flow and resilient earnings remain constant, and
our materially enhanced platform is positioned to
deliver sustainable and profitable growth for our
shareholders, and further progress in the delivery
of these objectives in the current year.
Nick Wiles
Chief Executive
27 July 2023
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Strategic report Governance Financial statements Shareholder information13 PayPoint Plc Annual Report 2023
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PayPoint Plc Annual Report 202314
Market overview
Our markets
Expanding
opportunities
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Strategic report Governance Financial statements Shareholder information15 PayPoint Plc Annual Report 2023
“We are committed to
supporting our clients,
retailer partners,
and consumers in
navigating the current
macroeconomic
challenges. We oer a
wide range of solutions
to help them manage
their finances, grow their
businesses, and succeed
in the long-term.”
Steve O'Neill
Corporate Aairs and
Marketing Director
Key trends and
changes in the
FY22/23 financial year
in the UK markets
in which PayPoint
operates include:
Macro economic factors
• The Consumer Prices Index (CPI) grew to
10.2% in March 2023, driven by increased
food and energy costs
1
.
• The GfK UK Consumer Confidence Index
rose six points to -30 in April 2023 (vs -36 in
March 2023), and up 19 points from a historic
low of -49 in September 2022 and -45 in
January2023
2
.
• UK retail sales volumes rose by 0.6% in the
three months to March 2023 when compared
with the previous three months; the first three-
month on three-month rise since August 2021
3
.
• GDP is projected to contract in 2023 as
tighter financial conditions weigh on consumer
spending – which accounts for around
two-thirds of the economy
4
.
Convenience retail
• Lumina Intelligence's current full-year valuation
estimate for the UK convenience market
is £47.1 billion, up 4.1% from £45.2 billion
in 2022
5
.
• Convenience shoppers are reducing frequency
of visits (-4%). However, high inflation and an
increase in basket size has driven an increase
in average basket spend of £7.70, +12.7%
year-on-year with the average basket size
up 4% to 2.8 items
6
.
• In-store purchasing has increased year-on-year
up 2.4%, with delivery occasions losing 2.2%
of share. Shoppers are using delivery services
less frequently due to a shi towards returning
to pre-pandemic habits as well as increased
price sensitivity
7
.
• PayPoint One basket data shows the average
goods only convenience store average basket
spend (May 2022 to April 2023) increased to
£7.06 vs £6.92 the previous period. 66% of
the purchases were made by cash and 34%
by card which is a 3% decrease in cash use on
the previous period
8
.
• Total UK convenience store numbers remained
resilient in 2022, with marginal growth of 0.6%
to 47,861
9
.
• In 2022 the sector saw the biggest growth in
the number of Co-Operatives up 78 (+2.3%)
to 3,394 and a decline of 71 (-1.5%) to 4,790
in Forecourt convenience stores
10
.
• In a Consumer Home Delivery review 2022/23,
IMRG found consumers prefer to collect
orders, purchased via click and collect from a
convenience store (60%) than a retailer’s own
store (48.7%)
11
.
Card payments
• In 2021, 57% of all payments in the UK were
made using cards
12
.
• From February 2022 to February 2023, there
were 25.8 billion card transactions in the UK
13
.
• In the financial year, card payment volumes
increased by 4.5% year on year across the
PayPoint Group, with growth seen across the
Handepay, PayPoint and RSM 2000 books.
• Latest UK Finance data shows £57.7 billion
was spent on debit cards in February 2023
up 8.2% on February 2022 and £17.3 billion
on credit cards which was a 9.8% increase on
the previous year. The number of debit card
transactions were up 9% to 1,800 million and
credit transactions were up 7.1% year on year
to 304 million transactions
14
.
• In the SME markets that our Handepay
business serves, businesses employing 0–49
people, account for 99% (5.47 million) of the
total UK business population, 77% (4.1 million)
of the businesses have no employees, with
12% (1.1 million) classed as micro-businesses
with 0–9 employees. Retail, auto trade and
hospitality businesses make up circa 14%
of the SME sector
15
.
Cash Economy
• From October 2022 to March 2023, £249
million in £400 payments were distributed
across our network of 28,000 stores for the
Governments Energy Bills Support Scheme.
• Our Payment Exception Service, run for the
Department for Work and Pensions won
three industry awards for Social Inclusion
in Financial Services and has grown year on
year underlining the continuing importance
of delivering cash payments to those without
access to a standard bank account.
• Latest data from LINK’s March 2023 report
show ATM transactions were 127 million, 5.4%
lower than March 2022 and that each month in
2023 has seen volumes below 2022, however
it was 11% higher than March 2021 which was
still during a period of lockdown. The value
withdrawn also fell by 1.7% compared to March
2022, a smaller reduction than volumes as the
average withdrawal value continued to rise and
the £6.8 billion withdrawn in March remains a
very significant amount of cash.
• ATM coverage across the UK in 2023 continues
to be broadly stable and consistent, with a
very slow decline in non-branch free-to-use
ATMs in the last year. Branch and charging ATM
numbers continue to decline at a faster rate as
bank branches close and host locations decide
they no longer need charging ATMs or no
longer take in enough cash to replenish them
16
.
• PayPoint’s Counter Cash service, which oers
cashback without purchase and balance
enquiries over the counter continues to grow
and is now available in over 5,680 PayPoint
stores across the UK with over £1m of
withdrawals per week with almost a third of the
withdrawals for amounts not available from
traditional cash machines.
Contents Generation – Page Contents Generation – Sub PageContents Generation – Section
16 PayPoint Plc Annual Report 2023
Parcels
• According to IMRG’s Consumer Home Delivery
Report UK, online retail sales fell -10.5% year
on year in 2022.
• Consumers choosing a third-party click and
collect location prefer a staed location (55%)
rather than a self-serve locker-type site (13%),
and they generally would travel two to five
miles (68.2%) to pick up the item
17
.
• Click & collect from a retailer’s store is the
standout consumer choice, but when asked
if they could choose a click & collect location,
more consumers selected a convenience store/
supermarket (60%) than the retailer’s own
store (48.7%)
18
.
• UK, non-food retail sales are forecasted
to increase from £242.7bn to £248.9bn in
2023 – an increase of £6.2bn or 2.6% in value
terms. However, volume growth is predicted to
decline 4.9% which reflects an inflationary rise
in prices rather than an actual increase in the
quantity of goods purchased
19
.
• This contrasts with the strong performance
seen in the Collect+ network which has
seen excellent volume growth year on year
in Collect+, driven by strong partnership
approach with carrier partners, our positive
reputation as the leading carrier agnostic
Out of Home network, and backed up by
continued investment into the in-store
customer experience.
• The Out of Home (OOH) market comprises
click and collect, returns and send propositions.
The click and collect market is 11% of all
volumes with 150 million parcels per year and
is expected to double by 2025
20
. Returns
and send volumes are estimated at c.185
million and c.380 million parcels per year
respectively
21
.
Bill payments and top-ups
• 2022 was a much more stable year for the
energy supplier market with only four suppliers
exiting the market leaving 23 active suppliers,
down from 51 suppliers at the beginning
of 2021
22
.
• In October 2022, the UK Government
introduced the Energy Bills Support Scheme
which gave every household a £400 discount
on their household energy bills which was
paid in instalments over six months from
October 2022 to March 2023.
• In August 2022, Ofgem announced the Default
Tari Cap would be updated on a quarterly
basis rather than every six months so that
it can reflect the changes in the cost of
energy sooner.
• The dual fuel energy price cap for prepay
customers for April to June 2023 decreased
to £3,325 from the high of January to March
2023 of £4,358
23
.
• Non-Big Six energy providers combined market
share increased marginally to 29.6% at the end
of January 2022 (29% as of 31 March 2021)
24
.
• At the end of 2022, 31.3 million smart
and advanced meters were in homes and
businesses across the UK, with 55% of all
meters are now smart or advanced. A total
of 3,7 million meters were installed in 2022
a decrease of 4% on 2021 total
25
.
• PayPoint data shows the average number of
customer energy top-ups per year is slightly
down at 38.3 vs. 38.9 top-up transactions
with the overall average spend increasing to
£708.25 vs £578.80 the previous year due to
the increase in energy prices
26
.
• The number of mobile prepay (pay-as-you-go)
subscriptions declined to 21.5 million in April
2022, from 22.2 million in April 2021
27
.
Open Banking
• Over 7 million consumers and businesses
(of which 750,000 are SMEs) are using
innovative Open Banking enabled products
and services to manage their money and to
make payments
28
.
• In 2022, Authorised Push Payment (APP) fraud
losses were £485.2 million (down 17%) with
protections such as Confirmation of Payee
cited as having an impact on the reduction.
With our partners obconnect we have
processed 25 million CoP requests in the last
year, with an estimated 12% of those could
have prevented fraudulent transactions
29
.
• Open Banking payments have more than
doubled, with over 68 million Open Banking
payments in 2022 (up from 25 million in
2021)
28
.
• Since going live with our PISP payment
solution at the beginning of May 23, PayPoint
has processed over 57,000 payments for our
first energy client with the number rising each
day as customers begin to adopt this new
payment method.
• OpenBanking.org have highlighted some of
the most common financial challenges and
how Open Banking enabled tools can oer
ways for consumers to take greater control
of their finances, by consenting to share their
banking data, they can get a clear view of all
their incomings and outgoings to help them
better understand their finances, access
aordable credit, particularly if they don’t meet
traditional lending criteria and to understand
their eligibility to switch to an aordable
energy tari
30
.
Gi Cards and Vouchers
• The UK Gi Card market is estimated to be
worth £7.2 billion in 2022, up from £6.8 billion
in 2021. The year-on-year growth was driven
by the rise of contactless payments, and the
growing trend of employers oering gi cards
as a perk to employees
31
.
• Gi cards continue to encourage additional
spend, with around two-thirds of shoppers
typically spending more than the value of
gi card they received over 2022. Younger
shoppers (Gen Z) are willing to spend triple
the amount of a gi card they are redeeming
32
.
• The B2C market has grown 13.3% against
a backdrop of retail sales that have faced
diculties due to inflation and cost of living
32
.
• The B2B sector represents 57.4% of the total
market in 2022 below the highs of 67.3% seen
in 2020 which bring the market more in line
with the B2C market post Covid-19
32
.
• The average monthly proportion of UK
consumers purchasing gi cards for someone
else remained robust over 2022, at 18.0% vs
18.5% in 2021
32
.
• UK retail spend forecasted to be £380bn
+3% on PY due to inflation +7.7%, triggering
a -4.6% decline in volume of shoppers
(particularly the less auent)
32
.
• In April 2023, 34.5% of UK consumers bought
gis and gi cards. A decline on PY April
from 37.5%
32
.
• 11% of those that did not purchase gi cards
said this was because they have cut back on
non-essential spending
32
.
• Proportion of consumers purchasing gi cards
for someone else in April was 15.8% compared
to 16.7% on PY April (a notable decline)
32
.
• 7.4% purchasing for self use was also lower
than 7.8% on PY April
32
.
• Digital continues to increase in popularity.
The proportion of digital cards through
employee benefit programme was 12.2%,
+9.3% on the month prior
32
.
Market overview continued
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Strategic report Governance Financial statements Shareholder information17 PayPoint Plc Annual Report 2023
• Proportion of gi card buyers purchasing digital
cards in April increased to 26.8% from 25.9%
during the month prior – a continuing trend
32
.
• This is at the expense of online purchasing
on physical gi cards: 33.1% of gi buyers
in April 2023 compared to 40.4% in PY
32
.
1 https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/march2023
2 https://www.gfk.com/press/UK-Consumer-confidence-up-six-points-in-April 3 https://www.gfk.com/press/UK-consumer-confidence-tumbles-to-new-low-of-49-in-September
3 https://www.ons.gov.uk/businessindustryandtrade/retailindustry/bulletins/retailsales/march2023
4 https://www.natwest.com/content/dam/natwest/business-insights/documents/nw-retail-and-leisure-outlook-2023.pdf page 5
5 Source: Lumina Intelligence Convenience Market Data 2023
6 Lumina Intelligence CTP 12WE-05.03.23 & Convenience Strategy Forum Debrief – Q1 2023
7 Lumina Intelligence CTP 12WE-05.03.23 & Convenience Strategy Forum Debrief – Q1 2023
8 PayPoint internal data
9 Source: PayPoint Dashboard Report page 25 (Lumina Intelligence, July 2022)
10 Source: PayPoint Dashboard Report page 25 (Lumina Intelligence, July 2022)
11 IMRG Consumer Home Delivery Review 2022/23 – page 27
12 https://www.ukfinance.org.uk/system/files/2022-8/UKF%20Payment%20Markets%20Summary%202022.pdf page 3
13 UK Finance Card Spending Update for February 2023
14 UK Finance Card Spending Update for February 2023
15 https://researchbriefings.files.parliament.uk/documents/SN06152/SN06152.pdf page 4
16 https://www.link.co.uk/media/2199/monthly-report-mar-23-final.pdf 17.
17 IMRG’s Consumer Home Delivery Report UK
18 IMRG’s Consumer Home Delivery Report UK
19 Metapack e-commerce delivery report 2023
20 https://www.imrg.org/uploads/mediadefault/0001/08/2477f50ad2fee946cdf5ed23ebb8df21f2489d09.pdf?st.
21 OC&C analysis
22 https://www.ofgem.gov.uk/retail-market-indicators
23 https://www.ofgem.gov.uk/energy-data-and-research/data-portal/all-available-charts?keyword=breakdown%20of%20the%20default%20tari%20price%20cap&sort=relevance
24 https://www.ofgem.gov.uk/energy-data-and-research/data-portal/all-available-charts?keyword=breakdown%20of%20the%20default%20tari%20price%20cap&sort=relevance
25 https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1143890/Q4_2022_Smart_Meters_Statistics_Report.pdf
26 PayPoint Data – Databased on regular customers only, ones transacting before the beginning of the two-year period and in the last three months of the date range
27 https://www.ofcom.org.uk/__data/assets/pdf_file/0018/240930/Communications-Market-Report-2022.pdf
28 https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1150988/JROC_report_recommendations_and_actions_paper_April_2023.pdf
29 https://www.ukfinance.org.uk/system/files/2023-05/Annual%20Fraud%20Report%202023_0.pdf
30 https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1150988/JROC_report_recommendations_and_actions_paper_April_2023.pdf
31 https://www.openbanking.org.uk/insights/how-open-banking-can-help-consumers-manage-cost-of-living-challenges/
32 GCVA Consumer Report May 2023
33 GCVA-State-of-the-Nation-March-2022
• Multistore gi cards see more significant YOY
decline: share of 33.9% in April 2023 compared
to 41.1% in April 2022. However, they should be
well placed to benefit from the post pandemic
return to physical shopping as a hobby. Retail
gi cards have experienced a lower decline as a
result of this activity
32
.
• 18.2% purchased experience gi cards in April
compared to 26.6% in 2022. Those purchasing
for leisure activities also saw a decline from
18.2% in 2022 to 14% in 2023
32
.
• 39.5% of consumers receiving at least one gi
card over the last three years through work
rewards or incentives
33
.
Open Banking Payments
68m in 2022
– more than
double the
25m in 2021
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18 PayPoint Plc Annual Report 2023
Our business model
Innovating
How we deliver innovative services
How we create value
Our four business divisions
driving growth in the UK
Connecting millions of consumers with over
60,000 retailer partner and SME locations
Shopping E-commerce
We enable the delivery of best-
in-class customer journeys for
e-commerce brands over the first
and last mile in c.10,000 locations
through our Collect+ brand, helping
consumers pick up and drop o
online shopping or send parcels
across the UK
Payments & Banking
We have continued our
diversification to digital payments,
helping organisations seamlessly
and eectively serve their
customers. Our market-leading
omnichannel solution – MultiPay –
is an integrated solution oering
a full suite of digital payments
Love2shop
We provide giing, employee
engagement, consumer incentive
and prepaid savings solutions
to thousands of consumers
and businesses
Delivering giing and rewards
for the moments that matter
Read more on page 32
Delivering a channel-agnostic
payment platform
Read more on page 28 Read more on page 24
Delivering great
customer journeys
We provide digital solutions to
help our retailer and SME partners
keep pace with changing shopper
needs, service expectations and
demographics, oering everything
a modern business needs, including
EPoS, parcel services, Counter
Cash, card and bill payments, home
delivery and digital vouchering
Read more on page 20
Creating a better
in-store experience
Our purpose is to deliver innovative services that make
millions of people’s lives a little easier every day
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Strategic report Governance Financial statements Shareholder information19 PayPoint Plc Annual Report 2023
Our drivers
of success
The value
we create
Delivered to your stakeholders
What makes our model work
Population within one mile
99.3%
Dividends paid per share
34.6p
No. of employees
944
Retailer and SME locations
62,610
Transactions per year
698.6m
Local communities
We provide essential 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
Investors
We aim to deliver a sustainable and rewarding business model and
superior returns for our investors
Employees
We create a dynamic and innovative place to work for our employees
across the PayPoint Group
Retailers and SMEs
We enhance the retailer proposition and consumer experience, driving
footfall, new commission opportunities and better store management
tools for thousands of SMEs and retailers across the UK
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
Unparalleled network of retailer partners
and SMEs
• The enlarged PayPoint Group now delivers technology and services to a
universe of over 60,000 SME and retailer partner locations across multiple
sectors, including food services, convenience retail, garages and hospitality.
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, 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 giing 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 all
our business divisions, whether through PayPoint One, helping our convenience
retailer partners run their businesses more eciently, or our proprietary
e-commerce soware 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.
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PayPoint Plc Annual Report 202320
Our strategy
Shopping
Strategic Priority:
Embed the PayPoint
Group at the heart of
SME and convenience
retail businesses
We provide digital solutions, technology and payment services
for SMEs and retailers to deliver vital community services.
Retail services – we help our retailer and SME partners keep pace with
changing consumer needs, service expectations and demographics.
Our retail services platform, PayPoint One, is live in over 18,453 stores
across the UK and oers everything a modern convenience store needs,
including EPoS, parcel services, card and bill payments, home delivery
and digital vouchering.
This empowers our retailer partners to grow their businesses profitably, achieving
higher footfall and increased spend. We also provide access to cash solutions via our
network of 3,470 ATMs and our pioneering Counter Cash service, oering cashback
without purchase and balance enquiries over the counter, is now enabled in 5,680 sites.
Card payments – we provide card payments services for over 30,000 SMEs and
convenience retailers across the hospitality, convenience retail, auto trade, clothing
and household goods sectors via our PayPoint, Handepay, Merchant Rentals and RSM
2000 brands.
FY23 Progress
• Further expansion of Counter Cash, now enabled in 5,680 sites
and with 1,930 sites transacting regularly in the year, with over
£42.9 million withdrawn in the financial year, oering vital access
to cash over the counter and complementing existing ATM estate.
• SME and retailer proposition enhanced across Handepay and
PayPoint card services: new Android terminal launched in Handepay
with positive merchant feedback, supported by one-month contracts
and next day settlement delivered in last financial year; improved
pricing and next day settlement launched for new PayPoint card
payment merchants from 1 July 2022 and to existing customers
in October 2022, boosting cash flow to our retailer partners.
• Strongest ever sales performance delivered by end of the financial
year and a largely full-strength sales team recruited across Handepay
and PayPoint, following recruitment challenges experienced in H1
FY23. This positive momentum has been supported by our most
competitive and attractive proposition ever and allied with a more
detailed focus on customer service and retention, leveraging our
AI and data analytics capabilities.
• Positive performance of Business Finance via YouLend with over £12.5 million lent,
supporting our retailer and SME partners during the current economic challenges.
• New acquiring partnership with EVO, becoming the single acquirer across the Group.
The move enables our merchant estate acceleration plans and mid-market segment
focus, increases our eciency as an ISO and begins the journey to becoming a fully
integrated Payment Facilitator.
• FMCG – good progress with a number of FMCG brand campaigns delivered in the
second half and strong pipeline of future activity, partnering with Coca-Cola, Amazon,
AG Barr and JTI. Our consumer engagement solution for brands, PayPoint Engage,
leverages our PayPoint One platform, advertising screens and i-movo vouchering
capability to help our retailer partners drive sales and help brands engage thousands
of consumers across our network, with redemption rates of up to 40%.
• Retailer engagement – positive progress made on retailer partner Net
Promoter Score and satisfaction, supported by regular engagement with key
trade associations, launch of new retailer forums with the Scottish Grocer’s
Federation and National Federation of Retail Newsagents and a comprehensive
communications programme to drive new services and opportunities to drive
revenue for our retailer partners.
FY24 Priorities
• Continue to enhance retailer proposition, driving retention
and delivering more opportunities to earn for retailer partners.
• Launch next generation retail technology into PayPoint network.
• Build on strong momentum in Cards business, with a continued focus on sales and
retention and the development of our SME proposition.
• Begin the process to become a Payment Facilitator, bringing all new business under
a single acquirer.
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Strategic report Governance Financial statements Shareholder information21 PayPoint Plc Annual Report 2023
Key drivers
• Growth in PayPoint One and service fee.
• Growth in card payments and acquisition
of Handepay/Merchant Rentals.
• Enhancement of retailer proposition and
engagement, inc. Counter Cash, FMCG,
MyStore+, Home Delivery.
The transformation
of the PayPoint Group
over the past few
years has driven new
growth opportunities
How we deliver
Retail Services
• PayPoint One, EPoS, Counter Cash, FMCG, ATMs, Business Finance,
Home Delivery.
Card payments
• PayPoint & Handepay/Merchant Rentals & RSM 2000.
FY22 FY23
Net revenue
£58.7m
Percentage of Group
51.0%
Net revenue
£62.0m
Percentage of Group
48.1%
+5.6%
Retail Service Cards
Net revenue
£28.3m
Percentage of Group
24.6%
Net revenue
£30.2m
Percentage of Group
23.4%
Net revenue
£30.4m
Percentage of Group
26.4%
Net revenue
£31.8m
Percentage of Group
24.7%
+6.7% +4.6%
FY22
FY22FY23 FY23
Subdivision Performance
KPI’s
Card payment transactions
386.0m
(FY22: 369.3m)
PayPoint One sites
18,453
(FY22: 18,120)
Risks
1
4
10
Competition and Markets
Operating Model
Operational Delivery
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PayPoint Plc Annual Report 202322
Our strategy continued
Shopping continued
the retailer proposition
& consumer experience
Enhancing
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Strategic report Governance Financial statements Shareholder information23 PayPoint Plc Annual Report 2023
Case study
Shopping
PayPoint One Sites
18,453
What have been the key developments
for PayPoint’s retailer proposition over
the last 12 months?
We have continued to evolve and improve
our proposition to deliver more value and
opportunities to earn for our retailer partners,
whether through our Counter Cash service, the
fantastic growth in parcels, our most competitive
cards proposition or the new opportunities that
we have delivered via our FMCG activity working
with leading brands in the sector.
How are you looking to evolve your
technology oer in the future?
It’s important to never stand still when it comes
to in-store technology and we have spent a lot
of time listening to feedback from our retailer
partners on how we develop our next generation
of technology. The first step will be delivered this
year through our PayPoint Connect proposition,
creating an improved, integrated technology oer
into third party EPoS systems which will enable an
enhanced customer experience, greater access to
new services and a growing opportunity for cards
business. This will be supported through a new,
mobile device, PayPoint Mini, which will become
our principal in-store device for new customers
later this year.
What’s the one big future opportunity
that you’re working on?
With the addition of the Love2shop giing
capability to the Group, there are many
opportunities to enhance and grow the solutions
that we oer to support FMCG brands through
our PayPoint Engage platform. This already
leverages our PayPoint One platform, advertising
screens and i-movo vouchering capability to help
our retailer partners drive sales and help leading
brands engage thousands of consumers across
our network.
Q&A
with Anthony Sappor
Retail Proposition and Partnerships Director
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24 PayPoint Plc Annual Report 2023
Our strategy continued
E-commerce
Strategic Priority:
Become the definitive
technology-based
e-commerce delivery
platform for first and last
mile customer journeys
FY23 Progress
FY24 Priorities
• Excellent parcel transaction growth of +69.8% year on year, driven by
our strength in clothing/fashion categories, the continued expansion
of new services with carrier partners and the in-store experience from
investment made in Zebra label printers over the past 18 months.
• New partnerships launched in Q4 FY23 with InPost for locker to store
parcels and Yodel for store to store parcels.
• Partnership launched with Wish.com in H1 FY23, one of the largest
e-commerce marketplaces in the world, enabling consumers to click-
and-collect at over 1,600 Collect+ sites.
• Amazon returns rollout expanded to over 2,000 sites and further
integrations rolled out for Print In Store, which saw significant growth
in H2 FY23.
• Rapid rollout of 1,455 Collect+ sites in September and October to
support Royal Mail business customers, helping keep mail moving
during industrial action.
• Deliver carrier expansion plans ahead of peak 2023 trading, including
rolling out additional sites and volume for Amazon, DPD and Yodel.
• Expand successful print in-store service to entire Collect+ store network.
• Launch new Yodel Store to Store service for Vinted, building on excellent
volume growth over last 12 months.
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 soware
capability and expertise with continuous investment and innovation
in the in-store experience.
We deliver all of this in over 10,000 locations through our Collect+ brand,
helping consumers pick up and drop o online shopping or send parcels
across the UK.
We work with a comprehensive range of partners, including Amazon, eBay,
Yodel, Fedex, DPD, DHL, HubBox, Wish.com, Royal Mail and Parcels2Go.
Our proprietary PUDO soware solutions are built in-house, with a
singular focus on the delivery of great consumer experiences and
confidence in the crucial first and last mile of parcel journeys. These
solutions are easily deployable in thousands of diverse locations across
multiple sectors through the PayPoint Group. Our unique blend of in-
depth parcel operations experience, consumer interaction and agile IT
development capability has been built over years of delivering best-in-class
customer experiences.
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Strategic report Governance Financial statements Shareholder information25 PayPoint Plc Annual Report 2023
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’
Key drivers
• Development of e-commerce delivery platform
yielding strong year on year transaction growth.
• Continued investment in technology and
in-store experience, inc. label printers and app.
• Reshaped carrier relationships, expansion of
brand portfolio and service provision.
FY22 FY23
Net revenue
£4.9m
Percentage
of Group
4.3%
Net revenue
£7.3m
Percentage
of Group
5.6%
+46.5%
How we deliver
• Consumer parcel pick up, drop o 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.
Our partners
KPI’s
Parcel
transactions
56.4m
(FY22: 33.3m)
Parcel net
revenue
£7.3m
(FY22: £4.9m)
Risks
1
2
10
3
Competition and Markets
Emerging Technology
Transformation
Operational Delivery
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26 PayPoint Plc Annual Report 2023
Our strategy continued
E-commerce continued
best-in-class
e-commerce journeys
Providing
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Strategic report Governance Financial statements Shareholder information27 PayPoint Plc Annual Report 2023
Case study
E-commerce
Parcel transactions
56.4m
Parcel net revenue
£7.3m
Q&A
with Nick Williams
Parcel Services Director
What have been the key factors in
the success of parcels over the past
12 months?
Our positive performance has been driven by
three important areas: the investment we have
made over the past few years in ‘print-in-store’
technology which has unlocked additional volume;
the strong relationships we have with our carrier
partners; and, of course, our fantastic retailer
partners who 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?
Parcels is an important part of any modern
convenience store’s oering and Collect+ has
the widest range of carriers, fits seamlessly into
the operations of a store and delivers incremental
revenue for participating retailers. Consumers
increasingly want greater convenience when
shopping online and our retailer network is ideally
placed to meet that need, right at the heart of
communities nationwide.
What’s your focus for the next
12 months?
Clearly we want to build on the positive
momentum in the past year to provide further
opportunities for our retailer partners. Given it’s
success, we want to expand our print in-store
service to the entire Collect+ store network, which
will support the launch of a new Yodel Store to
Store service for Vinted. We will also continue our
expansion into student union sites in selected
universities, as well as trialling a locker solution
with OOHPod in Northern Ireland.
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28 PayPoint Plc Annual Report 2023
Our strategy continued
Payments & Banking
We deliver a channel-agnostic payment platform that gives clients
and consumers choice.
Digital – we have continued our diversification to digital payments, helping
organisations seamlessly and eectively serve their customers. Our channel
agnostic, multisector payments platform (MultiPay) has delivered strong growth
year on year, supporting integrated payments across cash, Direct Debit, cards,
Open Banking and support tools. Our CashOut service, delivered via i-movo, also
enables the rapid dispersal of funds through secure digital channels and is actively
used by local and central government, including over £246 million of Energy Bills
Support Scheme vouchers to support consumers with their energy bills over the
winter period and the Department for Work and Pensions Payment Exception
Service, digitising benefit payments and replacing the Post Oce Card Account.
Cash through to digital – we enable consumers to access digital brands and
services through a comprehensive portfolio of giing, e-banking and gaming
partners, including Amazon, Google Play, Monzo, Revolut, JPMorgan Chase, Xbox,
PlayStation, Paysafe, Monzo and Love2shop. Consumers simply pay for a ‘pin on
receipt’ code in cash in any of our 28,478 retail locations and then can use that
value online with the digital brand or service chosen. For our challenger bank
partners, consumers can deposit cash into their accounts across our extensive
retail network.
Cash – we provide vital access to cash payment services across the UK by helping
millions of people every week control their household finances, make essential
payments and access in-store services. Our UK retail network of more than
28,000 stores is bigger than all banks, supermarkets and Post Oces put together,
putting us at the heart of communities nationwide.
Strategic Priority:
Grow integrated
payments platform
across cards,
Direct Debit and
Open Banking
• Continued strong progress in digital transactions, with growth of +53.0% year
on year, and further expansion of our client relationships with our enhanced
integrated payments platform, including launching Direct Debit with POBL
Housing, our new PayPoint OpenPay service with Ovo to support Alternative Fuel
Payments, and rolling out our Confirmation of Payee service with the Department
of Energy Security and Net-zero, leveraging our Open Banking capability.
• Our Payment Exception Service, delivered for the Department for Work and
Pensions, recorded significant growth year on year with net revenue +179%
to £4.4m (FY22: £1.6m) and transactions +317% to 12.5m (FY22: 3.0m).
The service received three industry accolades for Social Inclusion in Financial
Services at the recent Payment Awards, FSTech Awards and Card and Payments
Awards, underlining the vital role our solutions play in serving some of the most
vulnerable people in the UK.
• Over £246 million of Energy Bills Support Scheme vouchers redeemed across
our extensive network of over 28,000 retailer partners from October 2022 to
March 2023. PayPoint partnered with 9 energy providers to deliver the Energy
Bills Support Scheme, providing a £400 payment over the winter months to
households across the UK. This vital support for consumers to help with the
Cost of Living leveraged our CashOut digital capability.
• Cash through to digital – good progress in expanding client base and services
provided in giing (Netflix and Google Play) and neo banks (Monzo and JP
Morgan Chase), to complement existing gaming portfolio.
• Cash through to digital consumer awareness campaign for giing expanded
with over 10,000 display units rolled out to stores across the UK ahead of
key Christmas trading period, including major multiple groups like Midcounties
Co-operative.
FY23 Progress
FY24 Priorities
• Drive further growth in our integrated payments platform, MultiPay, with
a continued sector focus on housing, charities and local government.
• Build on strong momentum in Open Banking, working with obconnect,
to expand services for existing and new clients.
• Reinforce PayPoint’s position as the leader in disbursement services for
central and local government.
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Strategic report Governance Financial statements Shareholder information29 PayPoint Plc Annual Report 2023
We deliver a channel-
agnostic payment
platform that
gives clients and
consumers choice
Key drivers
• Built payment channel agnostic platform,
supporting diversification to digital.
• Investment in capabilities to secure business
in new sectors, including government,
newspapers, housing and charities.
• Further strengthen relationships and new
service adoption in energy and existing clients.
• Accelerated decline of cash in legacy business.
Subdivision Performance
Digital
Cash through to digital
Subdivision Performance
Net revenue
£51.5m
Percentage of Group
44.7%
Net revenue
£56.2m
Percentage of Group
43.6%
+9.1%
FY22 FY23
Net revenue
£7.8m
Percentage of Group
6.8%
Net revenue
£15.7m
Percentage of Group
12.2%
+102.7%
FY22 FY23
Net revenue
8.2m
Percentage of Group
7.1%
Net revenue
£6.9m
Percentage of Group
5.4%
Net revenue
£35.5m
Percentage of Group
30.8%
Net revenue
£33.6m
Percentage of Group
26.0%
-16.5% -5.4%
FY22 FY22FY23 FY23
Cash
KPI’s
Digital transactions
52.3m
(FY22: 34.2m)
Digital transaction value
£1.3bn
(FY22: £756.6m)
Risks
1
2
10
3
Competition and Markets
Emerging Technology
Transformation
Operational Delivery
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30 PayPoint Plc Annual Report 2023
Our strategy continued
Payments & Banking continued
a payment channel
agnostic platform
Creating
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Strategic report Governance Financial statements Shareholder information31 PayPoint Plc Annual Report 2023
Case study
Payments
& Banking
Digital transactions
52.3m
Q&A
with Jo Toolan
Client Services Director
How do you think PayPoint’s integrated
payments platform has evolved over the
past 12 months?
Our enhanced capabilities, particularly in Open
Banking, Direct Debit and digital payments,
have given us fantastic opportunities to expand
the range of services we provide to our existing
clients and as well as providing new opportunities
in new sectors, particularly in housing, local and
central government.
What do you think has driven the
success here?
We have worked hard to develop our partnership
philosophy with our clients, taking the time to
understand their needs, challenges and how
we can help address them with our extensive
solutions and enhanced platform. The other key
factor here has been our improved engagement
with our broader industry stakeholders, including
Ofgem, UK Finance, Pay.UK and the Department
of Energy Security and Net-zero. PayPoint is
very much at the heart of delivering vital digital
services across the UK.
What’s the one big future opportunity
that you’re working on?
Open Banking will continue to grow in importance,
working closely with our partner, OBConnect.
We are all excited by what Open Banking enables
for our clients in how they service their customers,
building on the positive results we have seen
with our new PayPoint OpenPay service delivered
with Ovo to support Alternative Fuel Payments
and rolling out Confirmation of Payee for the
Department for Energy Security and Net-zero.
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32 PayPoint Plc Annual Report 2023
Our strategy continued
gifting and rewards for the
moments that matter
Delivering
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Strategic report Governance Financial statements Shareholder information33 PayPoint Plc Annual Report 2023
Love2shop
Strategic Priority:
Reinforce leadership
position in giing,
rewards and prepaid
solutions
FY23 Progress
FY24 Priorities
• Park Christmas Savings completed fulfilment of its Christmas 2022
order book – this was 2% lower than prior year which was a significant
improvement on recent trends and ahead of expectations, underpinned
by record levels of retention and conversion. The savings cycle for
Christmas 2023 is well under way and as part of the strategy to return
to growth, the order book is expected to be c2% higher than prior year,
the first growth in the order book in 6 years.
• Love2shop Business saw strong levels of new business growth in client
numbers, increasing by 19% on prior year.
• 49 new retail partners added across the Love2shop platforms, adding
to appeal and breadth of choice for consumers, including Sports Direct,
The Entertainer and B&M, and Trustpilot score increased to 4.8/5.
• Building on the strong momentum in both Park Christmas Savings
and Love2shop, integration work is already well under way, unlocking
commercial revenue enhancements and continuing our focus on
organisational alignment.
• A small profit was generated in March 2023, before taking into account
any acquisition related amortisation and financing costs. This is due to
the seasonal nature of the business where profit is primarily generated
in Q3 of the financial year.
• Strengthen Love2shop’s position as the market-leading, multi-retailer
giing provider.
• Grow Park Christmas Savings billings, through enhanced marketing
activity and launch of Super Agent network across PayPoint retailer base.
• Unlock further growth in Corporate business for Love2shop, leveraging
client base across PayPoint Group.
• Accelerate technology development plans to enhance client integrations
and capabilities.
We provide giing, employee engagement, consumer incentive and
prepaid savings solutions to thousands of consumers and businesses.
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34 PayPoint Plc Annual Report 2023
Our strategy continued
a delivery-focused
and inclusive organisation
Building
Risks
6
10
KPI’s
Employee engagement –
collaboration score
71
(FY22: 72)
Operational Delivery
People
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Strategic report Governance Financial statements Shareholder information35 PayPoint Plc Annual Report 2023
PayPoint Group
Strategic Priority:
Building a delivery-
focused and inclusive
organisation
FY23 Progress
FY24 Priorities
• Good progress against our ESG programme, including commitment
to ensure all employees are paid a minimum of the Real Living Wage
delivered in July 2022, 5 electric vehicle charging points installed at
our Welwyn Garden City head oce in November 2022, and Diversity,
Equity and Inclusion training delivered in January 2023.
• Comprehensive programme of ‘Welcoming Everyone’ activities
delivered, building on our commitments to diversity, equity and inclusion
and supporting our vision to create a dynamic place to work: including
our inaugural Pride Month programme launched in June 2022, providing
educational content and further meetings of our LGBTQ+ network;
International Women’s Day events across the Group; and an external
speaker session focused on life over 50.
• Love2shop (formerly known as Appreciate Group) recognised as one
of the UK’s Best Workplaces™ 2023 by Great Place to Work® UK.
• Partnered with Citizens Advice and Advice Scotland to support
important Cost of Living targeted consumer campaigns
across our network, via receipt advertising, social media and
retailer communications.
• Continued progress on improving our IT service delivery through the
transformation into cross-functional product engineering teams with
full responsibility for service delivery and product development of each
service, the completion of infrastructure consolidation work resulting
in reduced energy use at the PayPoint head oce, the highest levels
of service availability delivered with 100% uptime achieved on core
processing systems and a continued focus on cyber-security, with the
rollout of a new SAST and DAST scanning tool across engineering teams
and the launch of a Bug Bounty programme.
• Complete successful integration of Love2shop and launch of
Northern Hub.
• Deliver secure and resilient technology platform and services to all
partners and launch improvements to core billing/settlement systems.
• Make further progress on our ESG approach across the enlarged business
to deliver responsible and sustainable value for shareholders.
• Continue our ‘Welcoming Everyone’ programme.
• Execute with intensity and accountability.
Underpinning the PayPoint Group’s future success is the
continued development and investment in our people,
systems and organisation.
We aim to create a dynamic place to work for our people, enabling us to
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.
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36 PayPoint Plc Annual Report 2023
FY22
FY21
55.4
43.4
FY23
60.3
FY22
FY21
33.6
31.2
FY22
FY21
53.9
46.9
FY23 62.3 FY23
34.6
FY22
FY21
58.2
46.6
FY23 61.3
FY22
FY21
43.9
68.2
FY23 72.4
FY22
FY21
48.0
36.9
FY23
50.8
FY23
FY22
FY21
128.9
115.1
97.1
Key performance indicators
The PayPoint
Group has
following KPIs to
measure progress
of business
performance:
Financial
Net revenue
(£ million) (UK)
£128.9m
11.9%
Description and purpose: Revenue from continuing
operations less commissions paid to retailers and
Park Christmas 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. FY23 includes one month contribution of
Appreciate Group.
See Financial Review –
‘Overview’ on page 72
Underlying profit before tax (profit
before tax excluding adjusting items)
(£ million) (UK)
£50.8m
5.8%
Description and purpose: 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 shi
away from our legacy cash payments business and
is an important measure of the overall success of
our strategy.
See Financial Review –
‘Overview’ on page 72
Diluted earnings per share
excluding adjusting items
(pence) (Group)
60.3p
8.8%
Description and purpose: Diluted earnings per share
excluding adjusting items (earnings from continuing
operations before 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 12 to the financial statements
on page 163
Dividends paid per share
(pence) (Group)
34.6p
3.0%
Description and purpose: Dividends (ordinary and
additional) paid during the financial year divided by
number of ordinary shares in issue at reporting date.
Dividends paid per share provides a measure of the
return to shareholders.
See Financial Review –
‘Dividends’ on page 78
Underlying EBITDA
(£ million) (UK)
£61.3m
5.2%
Net corporate debt
(£ million) (UK)
£72.4m
65.0%
Description and purpose: Net corporate debt
represents cash and cash equivalents excluding cash
recognised as clients’ funds, retailer partners’ deposits,
and cash 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 deleverage over
the next few years.
See Financial Review –
‘Net corporate debt’ on page 76
Description and purpose: This measures our
earnings from continuing operations before interest,
tax, depreciation and amortisation 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.
See Financial Review –
‘EBITDA’ on page 73
Cash generation from continuing
operations excluding exceptional
items (£ million) (UK)
£62.3m
15.6%
Description and purpose: Profit before tax from
continuing operations excluding exceptional items,
tax, depreciation and amortisation, and adjusted
for corporate working capital movements (excludes
movement in clients’ funds, retailers’ deposits, and
card and voucher deposits). This represents the
cash generated by operations which is available for
investments, capex, taxation and dividend payments.
See Financial Review –
‘Group cash flow and liquidity’ on page 77
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Strategic report Governance Financial statements Shareholder information37 PayPoint Plc Annual Report 2023
FY22
FY21
98.2
98.3
FY23
98.5
FY22
FY21
99.2
99.4
FY23
99.3
FY22
FY21 3.6
FY23
FY22
FY21
72.0
77.0
FY23
71.0
7.2
5.3
Non-financial
Network stability one-mile
urban population cover (%)
99.3%
0.1ppts
Description and purpose: Total urban population
covered within a one-mile radius of a PayPoint site.
This is monitored to ensure PayPoint is above our
minimum service level agreement of 95%.
Network stability five-mile rural
population cover (%) (UK)
98.5%
0.3ppts
Description and purpose: Total rural population
covered within a five-mile radius of a PayPoint site.
This is monitored to ensure PayPoint is above our
minimum service level agreement of 95%.
Retailer partner site churn
(%) (UK)
7.2%
1.9ppts
Description and purpose: The percentage of the
retailer partner network that on an annual basis exits
PayPoint. This is calculated by taking the number of
retailers which exited PayPoint in the period (excluding
suspended sites), divided by the average number of
total UK retailer partner sites for the period. This helps
track the movement in total UK retailer partner sites.
Employee engagement
(%) (UK)
71%
(0.1)ppts
Description and purpose: 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.
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38 PayPoint Plc Annual Report 2023
Responsible business
We hold ourselves accountable for delivering positive
outcomes for all of our stakeholders through the
implementation of a meaningful ESG strategy and measures.
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.
During the year we made good progress towards
delivering the commitments outlined in last
year’s report including the installation of electric
charging points, ensuring all of our people are
paid a minimum of the Real Living Wage and the
development of a more energy ecient terminal
to replace the PayPoint One. Further information
regarding our progress along with targets for the
current financial year can be found on pages 39
and 40.
Anti-bribery
& corruption
Waste
management
Our peopleTransparency
Diversity &
inclusion
Partners
SocietyRisk management
Regulation
Natural
resources
Climate
change
Innovation
ESG
Environment
SocialGovernance
The ESG Working Group has been expanded to
include colleagues from Love2shop following
the acquisition of Appreciate in February
2023. The purpose of the Working Group is
to review 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. Updated targets incorporating
Love2shop can be found on pages 39 and 40.
All of our environmental commitments are now
aligned with the Task Force on Climate-related
Financial Disclosures (TCFD) framework.
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Strategic report Governance Financial statements Shareholder information39 PayPoint Plc Annual Report 2023
Our commitments and targets
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
.
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 osetting residual GHG emissions that cannot be eliminated.
We commit to: By Delivered in year 23/24 priorities & targets
1.
Achieve Net-zero in our own
operations (scope 1 and 2
emissions) by 2030. For us, this
means reducing CO
2
emissions
as much as possible, and then
ensuring that any ongoing
emissions are balanced by removals
• Moving to carbon-neutral gas and
electricity contracts in Haydock at contract
renewal in 2024 (already achieved in
Welwyn Garden City). This is energy that
has been generated in a way that osets
the CO
2
emitted.
• Retiring diesel company cars, introducing
an electric company car option in addition
to hybrid model in FY23 and stopping
ordering new hybrid models by the end
of 2025, subject to the required charging
infrastructure being in place.
• Assessing options to reduce company
car mileage.
• New hybrid vehicles introduced to fleet in April 2023
replacing diesel company cars and petrol hire cars.
• Territory optimisation dashboard rolled out which, in
conjunction with Salesforce Maps, helps to ensure that
field sales journeys are planned eciently and therefore
reduce unnecessary mileage.
• Actions taken to reduce energy usage in oces
including closure of under utilised oce space. Sub
metering solution installed in WGC oces to identify
opportunities for further reductions.
• Carbon neutral gas and
renewable electricity to be
procured for Haydock at
contract renewal.
• Year on year reduction in
emissions per fleet car.
• Update business travel policy
to reflect environmental
considerations and promote
use of public transport and
car sharing.
• Continue to identify and
implement actions to
reduce electricity usage
in company premises.
2.
Achieve a 30% reduction in
emissions generated by use
of sold products by 2030,
compared to 2022
• Replacing PayPoint One devices with
alternatives that are more energy ecient.
• Considering energy consumption in
product design.
• Encouraging retailer partners
to use renewable energy and
minimise consumption.
• Good progress made with development of more energy
ecient terminal to replace the PayPoint One – roll out
to commence in 2023.
• New Saturn card terminals rolled out to replace legacy
card terminal. Emissions are greater than the legacy
terminals due to the additional capabilities required to
integrate additional services such as EPoS and loyalty
which avoids the need for additional separate devices
in store.
• Regular communications to retailers including Citizens
Advice Bureau campaign and pointing to advice issued
by trade organisations.
• Reduction in average emissions
per new retailer network terminal
to be achieved by March 2024.
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40 PayPoint Plc Annual Report 2023
We commit to: By Delivered in year 23/24 priorities & targets
3.
Support a reduction in employee
commuting emissions by
encouraging the transition
to electric vehicles
• Charging points to be installed at oce
locations in FY23.
• Electric car leasing scheme to be
considered for introduction in FY23.
• Relaunching our cycle-to-work scheme
with an enhanced purchase limit in FY23.
• Continue hybrid working policy delivered
in 2021.
• ‘Think before you travel’ guidance to be
developed and issued.
• Electric car charging points installed at our Welwyn
Garden City oces with plans to introduce at other
sites where possible.
• Cycle to work scheme relaunched.
• Electric car leasing scheme agreed and will be rolled
out during 2023.
• Hybrid working continues albeit with some teams
spending more time in the oce.
• Electric charging point to be
installed at Haydock premises.
• Roll out electric/hybrid car
leasing scheme to all employees.
• Promotion of car sharing and
cycle to work scheme.
4.
Engage and educate our people on
ESG matters to drive engagement
and build ESG considerations into
our every day
• Regular programme of communication
and training to be implemented.
• ESG commitments and progress shared in
Sta briefings.
• Diversity and inclusion training rolled out in
January 2023.
• Online training module to be
completed by all employees.
• Commitment to oer every
employee a volunteering
opportunity during the year.
5.
Achieve Net-zero across our
entire value chain by 2040
• Achieving the targets set out above.
• 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.
• CO
2
equivalent emissions reduced from 9,548 tonnes
in the year ending March 2022 to 7,129 tonnes for the
year ending March 2023. Reductions achieved as a result
of the switch to 100% carbon neutral gas and 100%
renewable electricity in Welwyn Garden City premises,
lower levels of procurement and the sale of PayPoint’s
investment in Snappy Shopper.
• Understand digital data storage
and take action to reduce it
as a way of reducing scope
3 emissions.
• Demonstrate progress in
transition from board to
digital cards in Love2shop.
6.
Ensure all of our employees are
paid a minimum of the Real Living
Wage from July 2022
• Increasing salaries at pay review in July
2022 and reviewing annually thereaer.
• Salaries increased in July 2022 and again in January
2023 in recognition of the increased cost of living. All
employees paid a minimum of £11.14 per hour with
salaries to be reviewed again in July 2023.
• Continue with commitment to
pay all employees a minimum
of the Real Living Wage.
7.
Continue to develop an
inclusive culture
• Embedding of ‘Welcoming Everyone’
approach to inclusion (see page 52).
• Pride month recognised with a number of activities
including an online forum, educational learning and colour
the rainbow day to increase awareness and support
inclusivity in the workplace.
• Online event held with external speaker from 55
redefined, celebrating live for the over 50’s and
challenging ageism.
• Score of the Employee Survey question ‘I feel
comfortable being myself at work’ was 81, 7 higher than
the external benchmark. This was also recognised as our
top strength.
• Women’s network event held for international Women’s
Day with attendance from all sites including our new
colleagues in Liverpool.
• Launch Women in Tech forum to
identify and implement actions
in support of increasing the
number of women in technology
roles across the Group.
Responsible business continued
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Strategic report Governance Financial statements Shareholder information41 PayPoint Plc Annual Report 2023
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42 PayPoint Plc Annual Report 2023
Responsible business continued
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.
Environment
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Strategic report Governance Financial statements Shareholder information43 PayPoint Plc Annual Report 2023
Our next phase 3 Energy Saving Opportunity
Scheme assessment is due in December 2023
(the last assessment was completed in
November 2019).
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.
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 39 and 40.
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 eect on 1 April 2019 and we follow the
guidelines to comply with these new 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.
In line with our climate strategy, tonnes CO
2
e
per employee in our own operations (scope 1
and 2) reduced during the year from 0.66 to
0.24 tonnes CO
2
e per employee. This reflects
continued energy saving initiatives in our oces
and switching energy contracts for our head oce
to carbon-neutral gas and renewable electricity.
Emissions from gas and electricity used in
company facilities have reduced by over 70%
as a result of these actions.
Tonnes CO
2
e per employee across our entire
value chain (scope 1, 2 and 3) decreased during
the year from 14.25 to 10 tonnes CO
2
e per
employee which is driven by a reduction in the
purchase of manufactured goods, the sale of the
company’s investment in Snappy Shopper as well
as benefitting from the transition to renewable
energy more generally.
All gas and electricity used in the Welwyn Garden
City oces is now carbon-neutral/renewable,
and we are committed to implementing this in
our Haydock oce at contract renewal in 2024.
We have 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 oces in Welwyn Garden
City. We will be rolling out an electric/hybrid car
leasing scheme to all employees in 2023 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
CO
2
emissions even further.
Being a responsible business means that we need
to be mindful of our environmental impact beyond
our own operations. An ESG questionnaire is used
in our procurement process to ensure that ESG
matters are considered in decision-making and to
ensure that our existing suppliers are aligned with
our ESG policies and commitments.
Innovation
Our innovative digital solutions support
a reduction in our environmental impact.
Recent examples include:
• Increased use of our CashOut secure
digital vouchering capability which enabled
over £246 millions of Energy Bills Support
Scheme vouchers to be redeemed across
the PayPoint Network.
• 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.
• Our parcels service 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 oces.
They promote sustainable practice throughout
the oce including recycling.
GHG emissions Units
Year ended
31 March
2023
Year ended
31 March
2022
Year ended
31 March
2021
Scope 1 (fuel combustion) tonnes CO
2
e 101 151 60
Scope 2 (purchased electricity) tonnes CO
2
e 71 293 320
Total scope 1 & 2 tonnes CO
2
e 172 444 380
No. of employees 31 March 2023 714 670 519
Total scope 1 & 2 per employee tonnes CO
2
e 0.24 0.66 0.73
Scope 3 tonnes CO
2
e 6,957 9,104 4,740
Total scope 1,2 & 3 per employee tonnes CO
2
e 10 14.25 9.87
NB. Data for the year ended 31 March 2023 includes data for Love2shop with eect from 28th February 2023.
A pro rata number of Love2shop employees has been included in order to calculate scope per employee
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44 PayPoint Plc Annual Report 2023
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 2023.
We consider our climate-related financial disclosures to be consistent with the TCFD
Recommendations and Recommended Disclosures and are therefore compliant 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, with the exception of
the year-on-year comparatives for GHG emissions, as we did not have directly comparable data
for the period before the acquisition of the Appreciate Group.
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 including in relation to sustainability, the environment and carbon emissions. The Executive Board sets PayPoint’s climate
and TCFD responsibility agendas and recommends strategy to the Board, thus ensuring ESG considerations are embedded into strategic decision-making. Our ESG Working Group,
which includes Executive Board members, oversees PayPoint’s environment, climate and TCFD matters and provides formal updates to the Board at least twice a year. This feeds into
strategic decisions around procurement for our own use (in particular energy contracts), management of our employees and oces, and the CO
2
emissions of the equipment that we
supply to our retailer partners and agents. The corporate governance organisation chart on page 89 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, environment and carbon-emission strategy. The ESG Working Group that was formed last
year is now fully embedded and has overseen various sustainability initiatives throughout the year. The Group’s members are informed about climate related issues through reviews of
emerging regulation sand trends. See the corporate governance organisation chart on page 89 for more details.
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.
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Strategic report Governance Financial statements Shareholder information45 PayPoint Plc Annual Report 2023
Strategy
Describe the climate-related risks
and opportunities the organisation
has identified over the short,
medium, and long-term
PayPoint has furthered its comprehensive assessment of its business activities to identify any climate-related physical and transition risks and opportunities over the short, medium,
and long-term. For the assessment, we considered the short-term to be 0–5 years, the medium-term 5–15 years and the long-term 15–30 years. These timelines align with our
business strategy planning schedules. These risks all arise from our UK operations in Financial and Retail Services. They do not currently have a material financial impact.
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 2023 to reward progress made in the delivery of ESG commitments including climate related commitments. Further detail can be found on page 115.
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 48 to 49.
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 particularly in our own operations, but even across our entire value chain, 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 68 of the risk management section. Climate and carbon emissions form part of our financial and strategic planning and decision-making process as follows:
• We review our own energy usage and replace contracts with lower carbon emitting alternatives as the current ones come up for renewal. The pricing of these new contracts may
represent additional costs or savings compared to the current ones.
• We consider climate impact from our working practices and as a result have replaced our car fleet with hybrid vehicles, installed car charging points where possible and reviewed our
hybrid oce and field sales working arrangements.
• We take climate considerations into account when renewing the equipment that we supply to our retailer partners so that overall, we are reducing the emissions from our terminals.
• 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.
Describe the resilience of the
organisation’s strategy, taking
into consideration dierent
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 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 sucient 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 to 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
450 (out of over 28,000) of our retailers in our 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.
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46 PayPoint Plc Annual Report 2023
Responsible business continued
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
2
emitted, in line with the GHG emissions disclosures.
We use third party sustainability soware 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.
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 43. The largest scope 3 areas are Purchased Goods & Services covering terminal and IT purchases and
Use of Sold Products covering 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 sets absolute targets during the year to manage climate-related risks and opportunities which were approved by the Board. The targets include reducing carbon
emissions in our own business, scope 1 and 2, and across our value chain with the target of being fully Net-zero by 2040. We have also set more detailed targets of how we
plan to achieve our Net-zero aims and these are detailed on pages 39 and 40. The ESG Working Group monitors performance against targets throughout the year and reports
performance to the Executive Board and Board.
Risk management
Describe the organisation’s
processes for identifying and
assessing climate-related risks
PayPoint recognises the impact climate change is having globally and that it presents a risk and uncertainty to our business. As last year, 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 we focus on key risks which could impact achievement
of our strategic goals and business performance. 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 emerging regulations, consumer
trends and societal shis. These are reviewed bythe 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 eectiveness
of risk management throughout the organisation. See our risk management framework on page 61 for further detail. We work towards a medium to low risk profile, ensuring we have
mitigating controls to bring each risk within the risk appetite set by the Board. The Board are updated on climate risks and set targets to reduce carbon emissions in alignment with
perceived risks. 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 osetting in order to meet targets. We have implemented
several measures to reduce our CO
2
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
We have embedded into our culture the consideration of climate and environmental risks and opportunities as part of all business decisions. 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 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.
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Strategy
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 dier 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 oces.
• Substitution of existing products and
services with lower emissions 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.
• Shi 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.
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48 PayPoint Plc Annual Report 2023
Responsible business continued
Risk Management
Risks
Transition risks
Risk Potential impact Mitigation strategy
Governance
and regulatory
Non-compliance with increased emissions
regulations and reporting obligations
Potential impact on costs, such as for energy use or
replacement of energy inecient 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
ecient. Sta 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
eective alternatives.
Technology
Substitution of existing products and
services with lower emissions options
Costs to adopt and implement new products
and processes
• Careful management of the roll out of more energy ecient terminals.
Market
Changes to markets and consumer trends 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 and PayPoint’s
• 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.
Increased manufacturing costs 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.
Increased energy prices Increased operating costs from our own energy usage, and
potentially lower demand for our energy related products
• We keep the amount of oce space utilised under close review and close sections of the
oce where feasible, to reduce heating and cooling requirements.
• Ongoing assessment of oce gas and electricity usage to identify reduction opportunities.
• Ongoing assessment of business travel requirements to minimise car journeys and identify
reduction opportunities.
Reputation
Lost business opportunities if unable to meet
customer and partner climate requirements
Reduction in revenue • Environmental policy continually assessed and updated to ensure PayPoint meets customer
and partner climate requirements.
Increased concern from shareholders and
other stakeholders
Reduction in capital availability • Transparency through our annual TCFD disclosures in the Annual Report.
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.
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Opportunities
The table below details the main climate-related opportunities and their potential impact on our business, along with the current status.
Opportunity Potential impact Status
Resource
eciency
Recycling Reduced construction costs • We engage with our electrical waste suppliers to ensure there is a high component of reuse and recycling of our
retired terminal and IT equipment.
Oce space kept under review Reduced oce costs • We keep the amount of oce space utilised under close review and close sections of the oce where feasible to
reduce heating and cooling requirements. One floor of one of our head oce buildings has been closed for the last
year as our warehousing requirements have reduced.
Reduced water consumption Reduced oce costs • We keep the amount of water used at our oces under close review and have fitted timed flow taps to ensure taps
are not le running.
Terminal economic life 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 reduced
manufacturing requirements, transport and disposal costs.
• We refurbish all our terminal models to ensure their economic life is maximised.
Energy source
Use of lower-emission energy sources Increased reputational benefits • We have already switched our electricity and gas contracts to carbon neutral contracts for our head oce and plan to
do the same for our Northern oces as they come up for renewal.
Use of new technologies Increased reputational benefits
Reduced oce costs
• We encourage the use of more ecient modes of transport through the installation of Electric Vehicle ‘EV’ charging
stations at our oces. We have increased our car fleet to over 30 hybrid cars which will reduce our car fleet CO
2
by
close to 50%. We have one diesel car le in circulation, and plan to retire it this year.
• 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 oces.
• We have rolled out a territory optimisation dashboard which helps to ensure that field sales journeys are planned
eciently and therefore reduce unnecessary mileage.
Products
and services
Development and migration to lower
emission products and services
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 ecient 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
Reduced electricity consumption 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 Microso
OneDrive and Sharepoint. These measures have contributed to reducing our data centre energy consumption.
Physical Risks
Risk Potential impact Mitigation strategy
Weather
Changes in precipitation patterns and
extreme variability in weather patterns
Increased costs from damage to buildings • Ongoing improvement of our buildings.
Rising temperatures Increased cooling costs • Switch to renewable electricity contract at our main oce.
• Assessing air conditioning requirements for our oces.
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PayPoint Plc Annual Report 202350
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.
Social
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• A simple food oering was made available
in oces from December 2022.
• A bonus advance of £300 was paid in
December 2022 to participants below
Executive Board.
Engagement
We continued to use the Glint engagement
survey to monitor the engagement of our people
with 82% of people responding to our employee
survey conducted in September 2022. The
overall engagement score remained stable at 71
and we were delighted to receive very positive
scores in the areas of authenticity, communication
and performance management which were all
significantly ahead of external benchmarks. We
were particularly proud of the feedback received
in relation to authenticity which reflects the
impact of our ‘Welcoming Everyone’ approach
and in particular the work of our LGBTQ+ forum
(see page 52).
Each team is responsible for developing and
implementing actions that are relevant to them
and at a Group level plans are developed in
conjunction with our employee forum. This
year the actions were focused on supporting
employees with the cost of living and building
connection and engagement in a hybrid setting.
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. We were delighted to welcome employees
from Appreciate Group to the PayPoint Group
in February 2023 meaning that we now employ
c1,000 people across the Group. Talent retention
and attraction remained a key priority during
the year although employee turnover reduced
compared to the prior year as the external
recruitment market slowed.
A key focus during the year has been how we
support our people with the cost of living. A
number of actions were implemented to support
our people including:
• All employees paid in excess of the Real Living
Wage with eect from July 2022.
• C175 employees received an additional pay
rise in January 2023 when our minimum salary
was increased to £11.14 per hour.
• Promotion of existing benefits and free advice.
• Wagestream launched in June in 2023 oering
financial planning, budgeting tools, advice and
salary advances.
Our employee forum held two formal meetings
during the year to discuss topics including Group
strategy and priorities, the employee survey and
supporting employees with the cost of living.
New representatives were elected in July 2022
and the forum now consists of 14 representatives
from around the business. The forum is chaired
by our HR Director, 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.
Love2shop participate in the Great Place to Work
survey and were delighted to be named as one of
the UK’s best places to work in April 2023. 81% of
Love2shop employees agreed that it is indeed a
Great Place to Work and the business achieved a
score of 78% in the Trust Index.
We continue to see a high level of participation in
our share incentive plan with a 40% participation
rate across the Group. We also continued 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 and the continued cost of living
crisis, all eligible employees received an enhanced
bonus of £700.
Promoting mental health and wellbeing
Wellbeing at the PayPoint Group provides
resources and opportunities to support our
people across four key pillars of wellbeing,
enabling them to be their best self and in turn,
deliver brilliant results. Our strategy was updated
during the year to include support for social
wellbeing in addition to physical, mental and
emotional wellbeing and financial wellbeing.
We update people regularly with useful resources
and awareness events including support for
financial wellbeing in light of the increased cost
of living and resources to support with stress
during stress awareness month. Our Employee
Assistance Programme was relaunched to the
business including ‘My Healthy Advantage App’
oering support in all areas of wellbeing. We have
also launched ‘My pay my way’ with Wagestream
oering 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 Team Leading,
Soware Development, Accounting and Project
Management. During the period we hired a number
of apprentices into our technology team. We also
ran a Management Development Programme for
line managers and aspiring line managers across
the group.
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.
People and culture
Gender balance as at 31 March 2023
Board Executive Board All employees
Female 25%
Male 75%
Female 24%
Male 76%
Female 43%
Male 57%
1 https://www.paypoint.com/modern-slavery-act.
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52 PayPoint Plc Annual Report 2023
Responsible business continued
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 dierent backgrounds and
identities, valuing their contribution to achieving
our strategic priorities. At the PayPoint Group, we
call this ‘Welcoming Everyone’.
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 embedded our Welcoming
Everyone approach supported by updated
equality & diversity training rolled out to all
employees and the launch of an updated and
rolled out to all employees in December 2022.
Our LGBTQ+ forum, open to all employees, was
launched to provide a safe space for people to
share experiences and suggest and discuss ideas
to enhance inclusivity at the PayPoint Group
for those in the LGBTQ+ community including a
number of events to recognise Pride month.
We introduced a new question to our employee
survey to measure inclusivity and were delighted
that ‘I feel comfortable being myself at work’
achieved a score of 81 which is 7 points above the
external benchmark and recognises the positive
impact of the LGBTQ+ forum within the business.
We also continued to support other aspects
of diversity and inclusion within the business
including a session led by an external speaker from
55 Redefined to address age related bias and the
opportunity for older people to contribute in the
workforce, and Women’s Network and Menopause
Support Group sessions facilitated by HR. 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 2023 was 43%
female and 57% male. We recently published our
sixth gender pay gap report, which can be found
on our website
2
.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. The talent pool for IT and field sales
remains predominantly male and progress has
therefore been slow.
We are launching a new Women in Tech forum
in order to better understand the challenges
facing women in these roles and identify what
more can be done to support the development
of our existing people as well as attract more
diverse applicants.
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 oering 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
3
. Our 2023
modern slavery statement will be available on our
website in September 2023.
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 96 in the Audit
Committee report.
2 https://corporate.paypoint.com/downloads/csr/gender_pay_report_2020.pdf.
3 https://corporate.paypoint.com/downloads/investorcentre/ethical-principles-2020.pdf.
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Strategic report Governance Financial statements Shareholder information53 PayPoint Plc Annual Report 2023
supportive
A strong and
proposition for retailer
partners and SMEs
We provide a broad range of innovative services and
technology, connecting millions of consumers with over 60,000
retailer partner and SME locations across multiple sectors.
We provide a leading and dierentiated set
of services, through highly reliable technology
that enables our retailer partners to run their
businesses more eciently as well as generating
consumer footfall from their surrounding
communities. The breadth of products and
services oered by PayPoint is greater than any
other provider.
We continue to enhance our retailer partner
proposition to help respond to consumer trends
and drive revenue opportunities in a challenging
economic environment. During the period, this
included the launch of the new Saturn Android
terminals in the Handepay Cards Business, the
continued roll out of Counter Cash, which is now
enabled in 5,680 sites, and PayPoint Engage –
our FMCG consumer engagement proposition,
delivering brand campaigns leveraging our
PayPoint One platform, advertising screens
and i-movo vouchering capability. Further
enhancements to our proposition following the
acquisition of Love2shop include the recently
announced partnership with The Fed to launch a
network of Park Christmas Savings Super Agents.
Our Business Finance oering via Youlend across
both PayPoint and Handepay provides support
to our retailer and SME partners during the
challenging economic environment.
We have continued our extensive eorts to
strengthen our retailer partner relationships and
drive adoption of these new opportunities to
earn, including regular face to face store visits and
‘cash and carry’ days, new retailer forums, more
direct communications and our strengthened
relationships with key trade associations including
the Association of Convenience Retail Stores
(ACS), the Scottish Grocers’ Federation, ‘SGF’
and the National Federation of Retail Newsagents
‘The Fed’. We continue to oer free ACS
membership to PayPoint One retailer partners,
providing access to industry events, advice and
best practice.
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54 PayPoint Plc Annual Report 2023
Enabling clients to provide vital
services in the community
We partner with over 500 clients in the UK,
providing omnichannel payment solutions that
enable them to seamlessly and eectively 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 10,000 locations through our
Collect+ brand, helping consumers pick up and
drop o online shopping or send parcels across
the UK. We were pleased to support Royal Mail
business customers in 1,455 sites in September
and October to keep mail moving during the
recent industrial action.
During the reporting period, we delivered further
expansion of our client relationships. In total 46
new client services went live with 42 taking digital
payments/CashOut solutions including the launch
of Direct Debit with POBL Housing.
Our integrated payments platform MultiPay was
further enhanced as a result of our Open Banking
partnership with OB Connect which enabled the
introduction of our new PayPoint OpenPay service
with Ovo to support Alternative Fuel Payments
and the roll out of our Confirmation of Payee
service with the Department of Energy Security
and Net-zero.
Our Payment Exception Service, delivered for
the Department for Work and Pensions, received
three industry accolades for Social Inclusion in
Financial Services at the recent Payment Awards,
FSTech Awards and the Card and Payments
Awards, underlining the vital role our solutions play
in serving some of the most vulnerable people in
the UK.
Similarly, over £246 million of Energy Bills Support
Scheme vouchers were redeemed across our
extensive network of over 28,000 retailer partners
from October 2022 to March 2023, providing
a £400 payment over the winter months to
households across the UK providing vital support
for consumers to help with the Cost of Living.
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 28,000
stores is bigger than all banks, supermarkets and
post oces 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.
The PayPoint Counter Cash service, oering
cashback without purchase and balance enquiries
over the counter, is now live in over 5,600 stores,
with over £42.9 million withdrawn in the last
financial year.
Park Christmas Savings, now part of the PayPoint
Group, is the UK’s biggest Christmas savings club,
helping over 330,000 families manage the cost of
Christmas, by oering a huge range of gi cards
and vouchers from some of the biggest high
street names. Our recently launched partnership
with The Fed will see the creation of an initial
network of 1,500 Super Agents for the Christmas
2024 savings season, enabling retailer partners
to oer another vital service to customers in
their community.
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 85% of our ATM network is ‘speech enabled’,
enabling people with visual impairments to
withdraw cash independently.
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.
During the year the Committee organised a
number of company-wide events including a
World Food Festival in aid of Cancer Research,
Haydock Charity Quiz Night, Sepsis Awareness
month and numerous bake sales. The Committee
also continued to support our people with their
own fundraising eorts. In total over £22,000 was
donated to local and national charities.
In April 2023 we signed a partnership with
Children With Cancer and are working with them
to develop a plan that achieves our objectives of:
1
Align closely with ESG, purpose and
business strategy.
2
Engage, motivate and be relevant and
meaningful to our employees.
3
Raise the profile of PayPoint with our clients,
customers and the local communities in which
we operate.
4
Provide development and teambuilding
opportunities for our employees via
volunteering activities and events as well
as fundraising.
We continue to oer 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 a number of virtual careers fairs
and interview skills events. Face to face events
returned in 2022 and we were able to support a
number of workshops and careers fairs in the local
community with positive feedback received from
the schools involved, as well as hosting a Work
Experience Week held in July 2022 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
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Strategic report Governance Financial statements Shareholder information55 PayPoint Plc Annual Report 2023
Purpose, vision
and values
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 38.
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.
Value award winner: Zoe Smallshaw
Zoe works in the recruitment team and was nominated under the
collaborative and good colleague values. Zoe works relentlessly
sourcing great candidates to support headcount growth in field
sales and was recognised for her strong internal relationships,
communication and positivity.
Value award winner: Chris Sadler
Chris is a soware engineer who was instrumental in building the
Confirmation of Payee service. He was nominated for his can do and
results focussed approach to get the service live on a tight deadline
and support the first clients to use the service.
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56 PayPoint Plc Annual Report 2023
Q&A with Simon Coles, Chief Technology Ocer
What key innovations have you
been most proud of the team
delivering in the past year?
There are three that stand out: the
fantastic work we did to deliver the
Government’s Energy Bills Support
Scheme, the launch of PayPoint
OpenPay, and the creation of a store-
to-store Collect+ delivery service.
All of these leveraged our extensive
capabilities such as our voucher
and parcel management platforms,
combined with strong supply-chain
partnerships we’ve worked hard to
create over the past couple of years.
EBSS and OpenPay are making a real
positive impact to customers lives
across the UK, and Collect+ store-
to-store helps retail marketplaces
optimise last mile deliveries and better
manage their carbon impact.
Increasingly, innovation in embedded
finance will require us to combine our
own capabilities with those of our key
partners, and I’m very optimistic about
the opportunities this approach is
creating for us.
How important were PayPoint to
the delivery of the Energy Bills
Support Scheme (EBSS)?
PayPoint have always played a pivotal
role in supporting some of the most
vulnerable customers in society, and
this scheme was no dierent. As a
response to the Cost of Living crisis,
the Government put in place a support
package to provide a £400 payment
to all households over the winter
months. We worked collaboratively
with industry partners, including the
Department for Energy Security and
Net-zero and 9 energy suppliers, to
mobilise our CashOut service across
our extensive network of retailer
partners. Over £246 million of EBSS
vouchers were redeemed over 6
months and with 94% of customers
saying they found it easy to use and
receive this vital support.
What role did the new PayPoint
OpenPay service play this year?
One of our strengths has always been
how we combine existing capabilities
in our integrated payments platform
with newer solutions, such as Open
Banking – PayPoint OpenPay is a
perfect example of that.
Working in partnership with OVO to
help deliver Alternative Fuel payments
to their customers, the service delivered
a unique, cost-eective alternative
to cheques and bank transfers, giving
them the means to oer customers the
choice of depositing the payment into
their bank account using a QR code or
collecting payments in cash at one of
PayPoint’s 28,000 retailers. In addition,
OVO commissioned the use of our
Confirmation of Payee name and bank
account checking service, part of our
extensive Open Banking solutions, to
protect their customers against fraud.
Over 30% of customers redeemed
payments straight into their bank
account, and their feedback confirmed
the ease and convenience of the
PayPoint OpenPay service. For the
customers who opted for cash, the
service provides a quick, simple,
and familiar in-store experience.
Supporting Access to Cash is very
important to PayPoint and the way
OpenPay blends cash access with
digital innovation has made it easy for
our customers to access these funds
in whichever way works best for them.
Responsible business continued
Innovating
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Strategic report Governance Financial statements Shareholder information57 PayPoint Plc Annual Report 2023
Governance
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.
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 79 to 127 and
in the Risk Management Report, on pages 61 to 68. In addition, our
anti-bribery and corruption policy is set out in the Audit Committee
Report on page 96. 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 39 to 40. 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 39 to 40.
Updated disclosures in accordance with TCFD can be found on
pages 44 to 49.
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 2022 we received a Fast
Payer Award from Good Business Pays which recognised that
PayPoint was one of only 8% of 5000 reporting businesses that pay
not just on time but quickly.
Finally, the following table sets out our Group Non-Financial
Information statement, prepared in order to comply with sections
414C and 414CB of the Companies Act 2006. A description of
our business model and strategy, as well as the non-financial KPIs
relevant to our business, can be found on pages 18 to 37.
Reporting requirement Where to find further information Page Relevant policies if applicable
Environmental matters Responsible business 38 to 49 Environmental
Employees Responsible business
Principal risks
Audit Committee Report
52
65
96 to 103
Diversity
Recruitment and Selection
Health and Safety
Whistleblowing
Code of Ethics
Society and communities Responsible business 50 to 55 Charitable donations
Respect for human rights Responsible business and
https://www.paypoint.com/modern-slavery-act
51
–
Modern Slavery Statement
Human Rights
Anti-bribery and corruption Audit Committee Report 96 to 103 Anti-bribery and Corruption
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58 PayPoint Plc Annual Report 2023
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 2023, we are recommending a final
dividend of 18.6 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 Nick Wiles, Chief Executive, Gill
Barr, Non Executive Director and Rakesh Sharma,
SID and Chair of the Remuneration Committee,
have all met with the forum to discuss topics
including business strategy & priorities, executive
remuneration and the results of the employee
survey. Feedback from the forum has influenced
decision including the action taken by the
company to support employees with the cost of
living as outlined on page 51. Further information
about how the Company engages with all of its
stakeholders can be found on pages 59 to 60 of
this report.
The Strategic Report was approved by the
Board of Directors and signed on its behalf by:
Nick Wiles
Chief Executive
27 July 2023
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Strategic report Governance Financial statements Shareholder information59 PayPoint Plc Annual Report 2023
with our stakeholders
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 2023
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 sta briefings and functions hold
their own team meetings and engagement forums (see page
51 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 business
strategy and priorities, the results of
the employee survey and supporting
employees with the cost of living. In April
2023, Rakesh Sharma attended the forum
to discuss Executive Remuneration.
Gill Barr, the Board representative of the Employee
Forum, facilitates the flow of communication
between the forum and the Board. During the
year the Chief Executive met with the forum to
discuss strategy and priorities and in April 2023
Rakesh Sharma attended the forum to discus
Executive Remuneration.
The HR Director 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 employee forum helped shape
survey actions with a particular
focus on the cost of living. Actions
implemented included an additional
salary increase to lower paid
employees in January 2023, an
advance bonus payment in December
2022 and the introduction of a simple
food oering in our oces.
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 18.6 pence per
share has been declared for approval
by shareholders.
Convenience
retailer partners
Our retailer partners oer
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. Independent retailers are also
represented by a retailer partner forum, which has regular
meetings across the year. 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 ‘NFRN’.
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 continued
roll out of Counter Cash, introduction
of PayPoint Engage and Park
Christmas Savings.
Positive progress made in retailer
partner net promoter score.
Engaging
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60 PayPoint Plc Annual Report 2023
Responsible business continued
Our stakeholders How we engage Key topics discussed How the Board engages/is kept informed Key outcomes in 2023
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.
Maintaining an excellent Trustpilot
score in Handepay.
New Saturn Android terminal
launched and loyalty app being
rolled out.
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 continued growth in
Counter Cash, redemption of EBSS
vouchers providing vital support with
the cost of living and the introduction
of Park Christmas Savings.
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 will 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.
Further enhancements to MultiPay
platform as a result of Open Banking
partnership with OB Connect
enabling new OpenPay service to
support Alternative Fuel Payments
and Confirmation of Payee services.
Payment Exception Service
delivered for the Department
for Work and Pensions received
three industry accolades.
46 new client services went live in
the year.
Local communities
Our network places 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 HR Director updates the Board via a formal
presentation each January.
Page 52 details our charitable work
and support provided for young
people in the community.
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Strategic report Governance Financial statements Shareholder information61 PayPoint Plc Annual Report 2023
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 eectively manage risk
Executive Board
Monitors key risks facing
the business and agrees
internal controls
Management
Responsible for identifying
and managing risks and ensuring the
eective operation of internal controls
Risk & Internal Audit
Manages the risk framework
and assesses internal control
eectiveness
The Audit Committee
Oversees the risk framework and
monitors assurance activity and
internal control eectiveness
Risk management
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 and Head of Risk and
Executive Board members and discussed with
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.
This year, attention will be focussed on
aligning the Appreciate and legacy PayPoint
risk frameworks, and around streamlining the
processes for identifying and controlling risks
in readiness for compliance with HMRC’s SAO
framework and the expected ‘UK SOX’ regime.
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 achieve
this. Risks are assessed through PayPoint’s risk
management and internal control framework
which are 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 eectively. The Audit
Committee supports the Board in reviewing the
eectiveness of risk management and internal
controls and performs an annual assessment.
The results of this year’s assessment are detailed
on page 98 of the Audit Committee section.
Risk appetite
PayPoint’s risk appetite is set by the Board and
aligns 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 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.
1. Risk identification
Identifying risks which may impede
achieving objectives
2. Inherent risk assessment
Assessing the level of inherent risk
3. Control assessment
Assessing the existence and strength
of controls to mitigate risks
4. Residual risk assessment
Assessing the level of residual risk
aer mitigation from controls
5. Risk reporting
Reporting the status of the most
significant risks to the Executive
Board and Audit Committee
6. Monitoring and review
Monitoring of risks and controls by the
Executive Board and Audit Committee
who advise the Board
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62 PayPoint Plc Annual Report 2023
Mitigating risk
Principal risks and uncertainties
Like all businesses, we face a number of risks and uncertainties
and successful management of existing and emerging risks is
critical to the achievement of strategic objectives and to the
long-term success of any business. Therefore, risk management
is an integral part of PayPoint’s Corporate Governance.
Changes to principal risks
New risks and disclosures
This year, principal risks from the Love2Shop
business have been considered and incorporated,
and our risks are assessed below on a Group-wide
basis.
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
Credit and Operational – This risk is renamed as
Credit and Liquidity / Treasury Management as
operations are now considered under Operational
Delivery. This is because operation of our
processes and controls are now more intrinsically
linked with operational delivery of key projects
than with credit management.
Other principal risks have remained the same
as last year, although they now include a
consideration of how they aect Love2Shop as
well as the existing PayPoint business.
Receding risks
There were no receding risks. The outlook of all
the risks has been reassessed, as shown in the
table below.
Emerging risks
ESG and Climate Risk remains an emerging
risk. We recognise the impact climate change
is having globally; however, we are intrinsically
a low-carbon producing company and climate
change does not pose an immediate risk to
our operations. However, 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 can be found on page 39.
Last year 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. The risks presented by climate
change have been embedded into our enterprise
risk management framework including financial
planning processes, business cases and our overall
risk identification and management processes
detailed on page 48.
The table on pages 63 to 68 sets out our principal
and emerging risks, including details of the
potential impact, mitigation strategies and status.
The table also details risk movement during the
year and risk appetite. They do not comprise all
risks faced by the Group and are not set out in
order of priority.
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Strategic report Governance Financial statements Shareholder information63 PayPoint Plc Annual Report 2023
Principal risks
Change in status and trend
Increased Stable Decreased
Market
PayPoint risks Group risks Mitigation strategies Status Change
1.
Competition
and markets
PayPoint’s markets and competitors continue to evolve;
failure to anticipate and respond to these will reduce market
share, revenue and profits. The decline in cash usage is
expected to continue, which will reduce revenue from those
aected business areas. Inflationary and cost of living
pressures may impact fee margins and discretionary spend,
which will in turn aect growth opportunities in parts of the
business. Keen pricing by competitors may further serve to
narrow profit margins, as would excessive reliance on key
clients or market segments.
The Executive Board regularly reviews markets, competitor
activity, trading opportunities and potential acquisitions
and so oversees and challenges strategic direction. It also
closely monitors consumer and technological trends and
engages with clients, retailers and other stakeholders to
improve our proposition. PayPoint continually develops
products, services and systems to adapt to changes in
consumer trends and technology and make strategic
acquisitions where appropriate.
Risk is increasing as competition has intensified, and
cost of living pressures are causing a downward push on
margins. Also, the use of cash continues to decrease, which
reduces our income from certain parts of the business.
However, we continue to strengthen our card and digital
payment businesses. Levels of global investment in our
Fintech competitors slowed in the last year, which presents
opportunities for PayPoint in the digital space. Finally, the
recent acquisition has further diversified the Group into the
giing and rewards business.
Risk appetite
Medium
2.
Emerging
technology
There is risk to our business if our oering fails to keep pace
and we do not exploit new technologies and markets to
evolve our proposition. New and emerging technologies are
changing the way consumers pay for goods and services;
failure to keep up with alternative payment solutions will
reduce our market share and profitability.
PayPoint continually develops products with the latest
technology and evolves them to take advantage of new
and expanding markets. The Executive Board closely
monitors emerging technologies and the impact they may
have on PayPoint. We also develop and implement our own
innovative technology where possible. Emerging technology
from recent acquisitions has been developed further and
used to deepen and widen our customer relationships.
Risk is stable as recent acquisitions have accelerated our
ability to mitigate the impact of emerging technologies,
and the re-platforming of our digital proposition will better
enable us to expand our presence in digital payment
markets. We are engaged in various government schemes
involving new technology, for example, the Department for
Work and Pensions Payment Exception Service. We are
rolling out a new, updated version of our retailer terminal –
the PayPoint mini, and have developed solutions in our open
banking and open pay propositions. We are also tracking the
fast evolution of generative AI, as this has potential to be
highly transformative.
Risk appetite
Medium
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64 PayPoint Plc Annual Report 2023
Principal risks and uncertainties continued
Principal risks
Change in status and trend
Increased Stable Decreased
Strategic
PayPoint risks Group risks Mitigation strategies Status Change
3.
Transformation
Our business relies on implementation of continued
innovation to keep pace with emerging technology and
changing markets. Furthermore, we need to remain agile to
continually improve our processes and controls, as failure to
do so would reduce eciency, increase costs, and increase
the likelihood of poor customer service. Failure to invest
and improve would also reduce our capacity to capitalise
on opportunities for growth.
The Executive Board drives, challenges and assesses
our response to change as part of the strategic planning
process. PayPoint is committed to diversifying its
product oering and client base by delivering innovative,
ecient and robust processes in a range of sectors,
and by continuous improvement in existing systems
and processes.
Risk is increasing; the acquisition of Appreciate is
now complete and work has started to integrate their
operations where appropriate, and to add their system
improvements into the Group roadmap. Our other major
projects include Payment Facilitation and the roll out of the
PayPoint mini terminal, a project that started in 2021.These
require considerable investment in technology and systems
as well as infrastructure channels and in developing people.
Risk appetite
Medium
Business
PayPoint risks Group risks Mitigation strategies Status Change
4.
Operating
model
It is important we have a diversified and varied operating
model, so we are not overly exposed to any particular
markets, clients, suppliers or SMEs. Our core business
relies on an appropriate mix of clients operating in diverse
industry sectors, retailers and redemption partners,
supported by a robust supply chain and operating
processes. Failure to maintain attractive propositions for
clients retailers and redemption partners may result in
losses of key clients, or a reduction in fees and margins.
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.
We have further diversified our business this year through
the acquisition of Appreciate Group which gives us access
to new markets, SMEs, retailers, clients and technology.
We maintain strong relationships with suppliers to reduce
concentration risk in this area.
Risk is stable; recent acquisitions have diversified our
operations into the giing ad rewards business. We
continue to renew contracts with clients and onboard new
retailers, merchants and redemption partners in line with
expectations. We have built on the counter cash, FMCG and
newspaper propositions with campaigns and onboarding
new SMEs, with more in the pipeline. We have however
noted that retailers and SMEs are under increasing financial
pressure, which may lead to an increase in defaults. We are
monitoring this situation carefully.
Risk appetite
Medium
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Strategic report Governance Financial statements Shareholder information65 PayPoint Plc Annual Report 2023
Principal risks
Change in status and trend
Increased Stable Decreased
PayPoint risks Group risks Mitigation strategies Status Change
5.
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.
Recent acquisitions have increased the number
of regulated entities, which further increases the
regulatory risk.
Commitments made to Ofgem in 2021 regarding its
Competition law concerns have been implemented.
Our Legal and Compliance teams work closely with
management 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. The
compliance team has been expanded and developed to
meet the ever-changing requirements of both existing and
new legislation, and external counsel is engaged where
required. We respond promptly and comprehensively to
all legal and regulatory enquiries.
Risk is increasing due to two key factors.
Firstly, following completion of the Appreciate acquisition,
additional support has been required to ensure a coherent
group approach to compliance is implemented.
Secondly, as referenced in Note 34, two claims have now
been 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.
Key new regulations this year have been the PSR and
Consumer Duty, which we are addressing in line with
regulatory deadlines.
Risk appetite
Low
6.
People
Failure to attract and retain key talent impacts many areas
of our business including service delivery and achieving
strategic objectives. Maintaining a strong culture of ethical
behaviours and employee wellbeing is also vital in ensuring
our business, people, customers and other stakeholders
are safeguarded, and our operations remain ecient and
profitable. Maintaining competitive remuneration levels
ensures we retain our talent pool.
The Executive Board defines and advocates PayPoint’s
purpose, vision and values, and an employee forum
comprising employees from across the business engages
directly with the Executive Board on employee matters. We
continue to invest in, and support our people. We have well
established processes for recruiting and retaining key talent
and developing our people, and there is continued focus on
culture, ethics and diversity.
Risk is increasing. Following completion of the Appreciate
Group acquisition, we announced a rationalisation of our
Northern oces, which has caused some sta turnover.
Inflationary pressures mean salaries remain high and, hybrid
working serves to exacerbate this trend. Therefore, there
remain a number of vacancies, especially in specialist fields.
However, we have recruited some extra sta in accordance
with our planned headcount increase for the year.
Recruitment and retention have eased somewhat from
earlier in the year due to redundancies and recruitment
freezes elsewhere.
Employee engagement surveys remain positive and key
actions around cost-of-living support, better employee
interaction and flexible working have been implemented.
Risk appetite
Low
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66 PayPoint Plc Annual Report 2023
Principal risks and uncertainties continued
Principal risks
Change in status and trend
Increased Stable Decreased
Operational
PayPoint risks Group risks Mitigation strategies Status Change
7.
Cyber Security
Cyber-attacks may significantly impact service delivery and
data protection causing harm to PayPoint, our customers
and other stakeholders. Recent acquisitions have increased
the number of IT environments, products and systems
we need to protect. PayPoint has multiple cyber security
systems, capabilities and controls however cyber-attacks
are constantly evolving and remain a persistent threat.
The Executive Board assesses PayPoint’s cyber
security and data protection framework, and the Cyber
Security and IT Sub-Committee of the Audit Committee
maintain 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 simple reporting
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. Due to the current geopolitical
instability, the NCSC has issued a warning regarding
targeted threats to organisations supporting critical
services in the UK.
Group security standards and systems are being applied to
our acquired IT environments and 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.
Risk appetite
Low
8.
Business
interruption
Our clients and stakeholders rely on our systems, products
and services being resilient to maintain continuous
service delivery. Failure to maintain stable infrastructure
or processes, or to promptly recover services following an
incident may result in financial loss, reputational harm and
potential regulatory scrutiny.
Interruptions may be caused by system failure, cyber-
attack, failure by a third party, or failure of an internal
process. Recovery may be hampered by a lack of resilience
planning and testing.
The Executive Board reviews PayPoint’s business
continuity framework and the Cyber Security and IT Sub-
Committee of the Audit Committee maintains oversight.
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. The acquisition of Appreciate and our
expansion into dierent product contribute to an increasing
complexity of our operations. We have not suered any
significant outages during the year, however system
disruption is an inherent business risk. Therefore, we have
upgraded the processing environments for our core switch
and some core services that are hosted in the data centres.
This has resulted in a reduction in critical incidents, and
availability of the core processing switch has improved. Better
sta training and retention has enhanced our ability to detect
and recover from service issues.
Risk appetite
Low
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Strategic report Governance Financial statements Shareholder information67 PayPoint Plc Annual Report 2023
Principal risks
Change in status and trend
Increased Stable Decreased
PayPoint risks Group risks Mitigation strategies Status Change
9.
Credit and
liquidity /
Treasury
management
PayPoint has material credit exposures with large retailers,
redemption partners, and other counterparties; in the
event of a default, significant financial loss may result,
as demonstrated with the McColl’s collapse.
We process large volumes of payments daily, therefore
eective operational controls are essential to ensure
funds are settled accurately, securely and promptly.
We have a number of debt / banking covenants and
interest expenses which must be managed carefully.
Absent or ineective controls in these processes could
result in fraud, liquidity risk, reputational damage or other
financial loss.
PayPoint has eective credit and operational processes
and controls.
Retailers and counterparties are subject to ongoing credit
reviews, and eective debt management processes are
implemented. Residual risk associated with potential
default of gi card providers is mitigated through
insurance. Settlement systems and controls are continually
assessed and enhanced with new systems and technology.
We have eective 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.
Risk is stable. Credit losses remain low. Cost of living
pressures may impact our retailers, which may increase the
default rate. 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 Appreciate and our cash generation
remains robust.
Risk appetite
Low
10.
Operational
delivery
Successful delivery of key initiatives and strategic
objectives is central to achieving our day-to-day and
transformation aims. Successful operational delivery
depends on eective forecasting, planning and well
controlled execution both within the Group and in its
supplier chain. 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
over BAU activities.
Our project management methodology ensures projects
are prioritised and governed eectively. Our existing
processes are continuously reviewed to make sure they
are ecient and well controlled.
Risk is stable. The Appreciate acquisition will require
considerable management time and eort to integrate. The
combined group is now large enough to qualify for the SAO
regime, which means the risk and control documentation
must be reviewed and brought in line with HMRC
requirements. There have been a number of new products
in the year, e.g. EBSS and Open Banking, which have been
challenging and demanded prioritisation of resources.
Risk appetite
Low
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68 PayPoint Plc Annual Report 2023
Principal risks and uncertainties continued
Principal risks
Change in status and trend
Increased Stable Decreased
Emerging risks
PayPoint risks Group risks Mitigation strategies Status Change
11.
ESG and
Climate
Focus on environmental, social and governance matters
continues to increase, and our business needs to be
environmentally responsible to create shared value for
all stakeholders.
Climate risk is a key priority for governments and
organisations globally, and PayPoint needs to play its part
in reducing carbon emissions and its environmental impact.
Approximately 17% of our revenue is derived from energy
and fuel markets and as the UK transitions to Net-zero
carbon emission economy by 2050, we need 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. We will be rolling out our
new PayPoint terminal, which generates lower emissions
than previous models. We are moving toward electric cars
for our company fleet and 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.
Love2shop was named one of the UK’s best places to work
in April 2023.
Risk appetite
Medium
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Strategic report Governance Financial statements Shareholder information69 PayPoint Plc Annual Report 2023
Viability statement
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 63 to 68)
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 time frame 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 February 2026 broadly in line with this period.
Assessment of prospects
The Directors assess the Group’s prospects
through the annual strategy day and review of
the Group’s three-year Plan. The strategy day
in February 2023 and Plan review day in March
2023 both considered the impact on future
plans of the Appreciate Group acquisition on
28 February 2023. The planning process forecasts
the Group’s financial performance including cash
flows which allows 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 the
context of our clients, parcel partnerships,
merchants and retailer requirements
We continue to evolve and execute our strategy
and invest for growth. We recently acquired
the Appreciate Group and are integrating this
business at pace so that the commercial synergies
can commence realisation in the 2023/24 financial
year including the launch of super-agents via our
retailer partner network.
Through a broad range of products and services
combined with our eective sales team we
continue to successfully embed PayPoint Group
at the heart of SME and convenience retail
businesses. In the e-Commerce division, we are
continuing to roll out Zebra printers which will
enable store to store deliveries, further improving
the e-commerce delivery platform for first and
last mile customer journeys. In the Payments
and Banking division, we continued facilitating
government support in the current economic
climate and grew our integrated payments
solution across cards and Direct Debit together
with the addition of Open Banking to our portfolio
of payment methods.
The Group’s inherent resilience to risk
The Group has an inherent resilience to risk,
provided by the diversified nature of our
operations across many sectors. The business
remains highly cash generative which has enabled
the Group to continue to invest in key areas of
growth and support its longer-term viability.
The Appreciate acquisition has further broadened
our products set, client base and has enabled
more opportunities to provide more key services
across all our customers (retailers, SMEs, clients,
redemption partners and parcel partnerships).
This will ensure we are more integral to all of
our customers.
Expectations of the future economic
environment
Uncertainty remains over macroeconomic risks.
This has resulted in higher inflation and cost
of borrowing, reduced consumer confidence
and the UK government facing higher budget
deficits. However, the diversity of our proposition
ensures the business can adapt to ongoing and
unexpected changes. This was demonstrated this
year as we supported the government with its
cost-of-living support.
The Group’s financial position
The Group retains a strong financial position and
has a £75m revolving credit facility (RCF) expiring
February 2026 together with a total of £46.8m
amortising term loans. The arrangement also
includes a £30m accordion (uncommitted) facility.
At 30 June 2023 the Group had utilised £44.5m
of the RCF. The available balance of £30.5m
and the corporate cash provides the Group with
liquidity of c£35m. This level of liquidity is deemed
sucient for all the viability scenarios analysed.
The Group has proven robust performance and
cash generation in previous economic downturns.
Assessment of viability
To assess our viability, we modelled dierent
scenarios identified by considering the potential
impact of the principal risks (as shown in the
table on pages 63 to 68). Our development of
scenarios included reviewing the risks of both the
PayPoint and Appreciate businesses. Risks are
broadly unchanged and the additional investments
required to realise our integration and targets
are included in the Plan financial projections. We
have reassessed the enlarged group’s scenarios
to reflect the progress made in delivering our
strategy. In total, nine principal risks were used in
our modelling. They were chosen because they
combine to represent plausible scenarios covering
a range of dierent operational and financial
impacts on the business.
The principal risk not specifically modelled was
Risk 6 – people as failure in recruiting and retaining
the right talent in the organisation would have
similar impacts to scenario A and B.
In total, four severe but plausible individual
scenarios have been modelled, with a fih reverse
stress test scenario. These scenarios and the
assumptions within are detailed in the table on
page 70.
We also considered the combined impact of
scenarios A and B as these are the most likely
to materialise together. Theoretically all these
scenarios, with diering causes could occur
together, with varying levels of impact. However,
we have not included a combined scenario of
scenarios A to D, due to the one-o nature
of scenarios C and D, with scenario A already
including a significant one-o item creating similar
financial pressure.
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 and reducing
variable incentives and temporary suspension of
dividend payments.
Conclusion
Having assessed the Group’s current position,
potential impacts of principal risks, proven
management of 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.
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70 PayPoint Plc Annual Report 2023
Viability statement continued
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 (9) Credit and operational
Transactions/merchants/estate
In areas of the business where declines have been experienced, these have been doubled. In areas of the business in growth, this
growth has been reduced to zero.
Margins, revenue rates per transaction/merchants or estate
In areas where there is a decline, this has been doubled and growth reduced to zero.
Economic backdrop will also cause a credit risk of c£11m if several of our largest retailers fail.
Costs
No cost savings assumed.
All the above are assumed to impact for FY23/24 with a slow recovery in FY24/25 back to planned levels in FY25/26.
Dividends
Dividends are reduced in line with dividend policy.
Scenario B
Failure with our transformation
and integration projects impacts
the profit delivery from the
planned growth.
Risk (3) Transformation
Risk (10) Operational delivery
Revenue Growth
Planned transformational revenue growth rates are assumed to halve over the life of the plan.
Costs/synergies
Costs are assumed to increase by 20% and the benefit of synergies halved across the three-year plan.
Scenario C
Legislation or regulatory
reforms cause a situation
of non-compliance.
Risk (5) Regulatory and legal
(grouping all the one-o hits together)
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 amount of the possible fines and associated costs of £30m is incurred in FY23/24.
Dividends
Reduced in line with dividend policy.
Scenario D
Cybersecurity and
business continuity.
Risk (7) Cyber security
Risk (8) Business interruption
Revenue
No revenue generation for three weeks.
Costs
Compensation payment equal to the lost revenue.
Dividends
Reduced in line with dividend policy.
Scenario E
Reverse stress test.
N/A Adopting the principles of Scenarios A and B, a continuous monthly impact has been modelled to understand when our funding limits
would be reached. Similarly, for scenarios C and D, which are one os, a single month impact has been calculated to reach funding limits.
In this stress test, it is assumed no dividends are paid. The outcome of these tests were a sustained EBITDA reduction of £3m per
month, indefinitely or a one-o reduction in EBITDA of £40m would take the Group to its funding limits. At this point the Group would
require further mitigations to those listed above and engaging financiers for further support or relaxation of covenants.
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Shareholder informationFinancial statementsGovernanceStrategic reportPayPoint Plc Annual Report 202371
Financial review
Growing
The transformation of the business continues
apace, with our compelling characteristics
of strong cash flow and resilient earnings
remaining constant.
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72 PayPoint Plc Annual Report 2023
“The Group has delivered
a strong performance,
with net revenue growth
across all divisions and
a profit before tax
excluding adjusting items
in the PayPoint segment
of £50.3 million, up 4.8%
vs FY22.”
Alan Dale
Finance Director
£m
Year ended
31 March
2023
Year ended
31 March
2022
Change
%
PayPoint segment 160.1 145.1 10.3%
Love2shop segment 7.6 – n/m
Total revenue continuing operations 167.7 145.1 15.6%
PayPoint segment 125.5 115.1 9.1%
Love2shop segment 3.4 – n/m
Total net revenue continuing operations
1
128.9 115.1 11.9%
PayPoint segment (75.2) (67.1) 12.1%
Love2shop segment (2.9) – n/m
Total costs continuing operations (78.1) (67.1) 16.4%
PayPoint segment 50.3 48.0 4.8%
Love2shop segment 0.5 – n/m
Underlying profit before tax 50.8 48.0 5.8%
Adjusting items:
Amortisation of intangible assets arising on acquisition
Exceptional items
(2.6)
(5.6)
(2.4)
2.9
–
n/m
Profit before tax from continuing operations 42.6 48.5 (12.4)%
Profit before tax from discontinued operations – 30.0 n/m
Profit before tax 42.6 78.5 n/m
Underlying EBITDA
3
61.3 58.2 5.2%
Cash generation from continuing operations excluding
exceptional items 62.3 53.9 15.6%
Net corporate debt
2
(72.4) (43.9) 65.0%
1 Net revenue is an alternative performance measure. Refer to note 4 to the financial information for a reconciliation to revenue.
2 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.
3 Underlying EBITDA is an alternative performance measure. Refer to note 1 to the financial information for a reconciliation.
The Appreciate acquisition is now referred to as
our Love2shop (L2S) division and is reported as a
separate segment. The financial review discusses
the whole Group as well as the two segments so
that shareholders can understand the one-month
L2S impact separately from our historic PayPoint
business which had another strong year.
Profit before tax from continuing operations of
£42.6 million (2022: £48.5 million) decreased by
£5.9 million (12.4%). The decrease reflects current
year exceptional costs incurred of £5.6 million
against the prior year exceptional income of
£2.9 million.
The underlying profit before tax increased by
£2.8 million (5.8%) to £50.8 million (2022:
£48.0 million). This result includes £0.5 million
profit on the L2S segment for one month. This is
due to the seasonal nature of the business where
profit is primarily generated in Q3 of the financial
year. The historic PayPoint segment underlying
profit before tax increased by £2.3 million (4.8%)
to £50.3 million (2022: £48.0 million).
Total revenue from continuing operations
increased by £22.6 million (15.6%) to
£167.7 million (2022: £145.1 million). Net revenue
from continuing operations increased by
£13.8 million (11.9%) to £128.9 million (2022:
£115.1 million), the one month of L2S segment
contributing £3.6 million. There were increases
across all our PayPoint segment business divisions
with E-commerce doing particularly well with
46.3% increase in net revenue over the year.
Total costs from continuing operations
increased by £11.0 million to £78.1 million
(2022: £67.1 million). The increase in costs was
driven by the £2.9 million one-month additional
cost base from L2S segment together with
increases in transactional costs of revenue in
relation to the growth of net revenue in Payments
Financial review continued
The completion of the acquisition of Appreciate
Group plc (Appreciate) in February 2023 was the
latest step in the three years of our transformation
away from our traditional cash markets towards
digital. Our Corporate activity started in April 2020
with the buyout of our JV partner in Collect+, our
parcels business, then acquisitions of i-movo for
digital vouchering, Handepay/Merchant Rentals for
cards business and RSM2000 for Direct Debits.
In addition, investments have been made in
OBConnect, our Open Banking partner and Optus
Homes in the Housing sector.
PayPoint sold its Romanian business at the start
of the prior year and that is the discontinued
operations in the table above. The focus of the
review therefore is on continuing operations.
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Strategic report Governance Financial statements Shareholder information73 PayPoint Plc Annual Report 2023
and Banking. Exceptional costs of £5.6 million, which are one-o, non-recurring and do not reflect current
operational performance, consisted of £4.0 million acquisition costs plus £0.3 million interest cost as part
of the acquisition proof of funds requirement and £1.3 million in relation to the loss on disposal of our
investment in Snappy Shopper Ltd in October 2022. The prior year exceptional income was the reversal of
the i-movo deferred, contingent consideration liability.
During the year the Group updated its presentation of the expense for amortisation of intangible
assets arising on acquisition. In order for the user to better understand the operational performance of
the business, the Group has changed from presenting “Operating Profit before exceptional items” to
“Operating Profit before adjusting items”. The impact of the re-presentation is to decrease prior year
“Administrative expenses – excluding adjusting items” by £2.4 million.
EBITDA is a new performance indicator highlighted this year, as it is widely used by investors, analysts
and other interested parties to evaluate profitability of companies. Our key focus and KPI is on Underlying
EBITDA to understand the operational performance, which excludes exceptional items and amortisation
of intangible assets arising on acquisition.
EBITDA / Underlying EBITDA (£m)
Year ended
31 March
2023
Year ended
31 March
2022
Profit before tax 42.6 48.5
Add back:
Net interest expense 2.6 2.0
Depreciation 4.9 4.8
Amortisation – including amortisation of intangible assets arising on
acquisition 5.6 5.8
EBITDA (£m) 55.7 61.1
Exceptional items 5.6 (2.9)
Underlying EBITDA (£m) 61.3 58.2
Cash generation from continuing operations excluding exceptional items grew to £62.3 million
(2022: £53.9 million), delivered from underlying profit before tax of £50.8 million (2022: £48.0 million).
There was a net working capital inflow of £1.2 million primarily as a result of the net investment in finance
lease receivable reducing in line with expected repayments and new terminal lease sales being made
under the one month operating lease proposition.
Net corporate debt increased by £28.5 million to £72.4 million (2022: £43.9 million) due to financing
the acquisition of Appreciate which had a £61.9 million cash element. At 31 March 2023 loans and
borrowings were £94.4 million (2022: £51.5 million) which included £0.6 million (2022: £2.1 million) of
asset financing in Merchant Rentals.
PayPoint segment
Continuing operations
£m
Year ended
31 March
2023
Year ended
31 March
2022
Change
%
Revenue 160.1 145.1 10.3%
Shopping 62.0 58.7 5.6%
E-commerce 7.3 4.9 46.3%
Payments & Banking 56.2 51.5 9.1%
Net revenue 125.5 115.1 9.1%
Other costs of revenue (17.6) (11.0) 60.1%
Depreciation and amortisation (costs of revenue) (7.2) ( 7.6 ) (5.2)%
Depreciation and amortisation (administrative expenses)
excluding amortisation of intangible assets arising on
acquisition (0.4) (0.5) (5.0)%
Other administrative costs – excluding exceptional items (47.7 ) (46.0) 3.6%
Net finance costs – excluding exceptional costs (2.3) (2.0) (14.7)%
Total costs (75.2) (67.1) 12.1%
Underlying Profit before tax (excluding adjusting items) 50.3 48.0 4.8%
Shopping net revenue increased by £3.3 million (5.6%) to £62.0 million (2022: £58.7 million). Service fees
net revenue increased by £1.3 million (8.3%) driven by additional PayPoint One sites and implementing
the annual RPI increase. Cards net revenue increased by £1.3 million (4.3%) from Handepay/Merchant
Rentals performance partially oset by PayPoint cards. ATM and Counter Cash net revenue decreased by
£0.4 million (4.2%) due to a reduction in transactions driven by the continuing trend of reduced demand
for cash across the economy. FMCG revenue also increased by £0.3 million (330.0%) to £0.4 million
(2022: £0.1 million) following further campaigns run in the year.
E-commerce net revenue increased by £2.4 million (46.3%) to £7.3 million (2022: £4.9 million), driven by
strong growth in total transactions which increased by 69.6% 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.
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74 PayPoint Plc Annual Report 2023
Payments & Banking net revenue increased by £4.7 million (9.1%) to £56.2 million (2022: £51.5 million).
Cash bill payments net revenue decreased by £1.7 million (6.5%) as a result of a decrease in bill payment
transactions from the increase in energy prices, Energy Bills Support Scheme (EBSS) and the continued
switch to digital payments. Cash top-ups net revenue decreased by £0.5 million (6.2%) with volumes
down 10.3% driven by the continuing structural declines in the prepaid mobile sector. Digital net revenue
increased by £7.9 million (102.7%) driven by our Cash Out services including a full year of the DWP
Payment Exception Service, delivered via i-movo, and MultiPay transactions increased 24.6% as a result
of more clients taking the digital services. Cash through to digital, eMoney, net revenue decreased by
£1.3 million (16.5%) as a result of a 19.6% decrease in volumes as the category is returning to pre-
Covid-19 levels and a new baseline is set for the category.
Commission to retailers cost increased by £4.6 million (15.2%) to £34.4 million (2022: £29.8 million).
This increase in payment to our retailer partners is as a result of them processing increased transactions
as well as ones with higher commission rates per transaction (e-Commerce and digital).
Total costs from continuing operations (excluding adjusting items) increased by £8.1 million (12.1%) to
£75.2 million, primarily driven by transactional costs of revenue in relation to the growth of net revenue, in
particular the Energy Bills Support Scheme printing and postage. There were inflationary cost increases
in administrative expenses of £1.0 million along with a one-o provision of £0.7 million for outstanding
funds due from McColls with a claim for full recovery being progressed with the administrator. This was
partially oset by £0.5 million lower depreciation and amortisation with some legacy assets coming to
the end of their life.
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
2023
Year ended
31 March
2022 Change %
Service fees 17. 9 16.6 8.3%
Card payments 31.8 30.4 4.3%
ATMs and Counter Cash 9.4 9.8 (4.2%)
Other shopping 2.9 1.9 56.6%
Total net revenue (£m) 62.0 58.7 5.6%
Net revenue increased by £3.3 million (5.6%) to £62.0 million (2022: £58.7 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
2023
Year ended
31 March
2022 Change %
Net Revenue (£m) 17.9 16.6 8.3%
PayPoint terminal sites (No.)
PayPoint One Base 6,787 7, 392 (8.2%)
PayPoint One EPoS Core 10,775 9,639 11.8%
PayPoint One EPoS Pro 891 1,089 (18.2%)
Total PayPoint One – revenue generating 18,453 18,120 1.8%
PayPoint One Base non-revenue generating 709 671 5.7%
Total PayPoint One 19,162 18,791 2.0%
Legacy (T2) 142 214 (33.6%)
PPoS 9,174 9,249 (0.8%)
Total terminal sites in PayPoint network 28,478 28,254 0.8%
PayPoint One average weekly service fee per site (£) 17.8 17.0 4.7%
As at 31 March 2023, PayPoint had a live terminal in 28,478 UK sites, an increase of 0.8% primarily as a
result of new PayPoint One sites which increased by 2.0% to 19,162 sites.
Service fees is a core growth area and consists of service fees from PayPoint One and our legacy
terminals. Service fee net revenue increased by £1.3 million (8.3%) to £17.9 million driven by the
additional 333 PayPoint One revenue generating sites compared to the prior year. The higher price point
EPoS Core sites increased by 1,136 due to new sales and upselling whilst EPOS Pro sites decreased by
198 due to normal churn and no longer being actively marketed.
The PayPoint One average weekly service fee per site increased by 4.7% to £17.8, benefiting from the
increase in EPoS Core sites which are charged at a higher rate and the annual RPI increase. Retailers
taking the Core version of the product represent 56.2% (2022: 51.3%) of all PayPoint One sites and
the Pro version now just represent 4.6% (2022: 5.8%). Legacy terminals now just remain in a few of
our multiple retailer partners but are being actively replaced.
Financial review continued
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Strategic report Governance Financial statements Shareholder information75 PayPoint Plc Annual Report 2023
Card payments and leases
Year ended
31 March
2023
Year ended
31 March
2022 Change %
Net Revenue (£m)
Card payments – Handepay and Merchant Rentals 19.9 18.5 7.2%
Card payments – PayPoint and RSM 2000 11.9 11.9 (0.2%)
Services in Live sites (No.)
Card payments – Handepay 22,236 22,796 (2.5%)
Card terminal lessees – Merchant Rentals 34,132 35,403 (3.6%)
Card payments – PayPoint 9,541 9,666 (1.3%)
Card payments – RSM 2000 138 147 (6.1%)
Transactions (Millions)
Card payments – Handepay 150.1 145.0 3.9%
Card payments – PayPoint 228.8 217.8 5.1%
Card payments – RSM 2000 7.1 6.5 9.0%
Handepay and Merchant Rentals generated £19.9 million net revenue in the year. Handepay card
payments transactions increased by 3.9% to 150.1 million, maintaining strong transaction volumes seen
in the previous year but at a lower average transaction value of £29.30 (2022: £30.90). There were
22,236 Handepay card payments sites, a decrease of 560 sites (2.5%) since 31 March 2022. Handepay
EVO sales increased in the year supported by the one-month operating lease proposition but sites have
been impacted by higher churn, particularly in our Worldpay back book in this very competitive market.
The sales momentum in the second half of the year has increased following the sales team being fully
staed and the launch of the new android device.
PayPoint card payments transactions increased by 5.1% to 228.8 million while net revenue decreased
by 3.1% to £10.7 million, maintaining strong transaction volumes seen in the previous year but at a lower
average transaction value £10.70 (2022: £11.30). Across our network there were 9,541 PayPoint card
payments sites, a decrease of 125 sites (1.3%) since 31 March 2022.
ATMs and Counter Cash
Year ended
31 March
2023
Year ended
31 March
2022 Change %
Net Revenue (£m) 9.4 9.8 (4.2%)
Services in Live sites (No.) 9,150 6,310 45.0%
Transactions (Millions) 30.1 30.6 (1.7%)
Net revenue reduced by £0.4m (4.2%) to £9.4 million (2022: £9.8 million) as transactions reduced by
1.7% to 30.1 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 sites increased
45.0% to 9,150 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. Counter
Cash contributed 7% of transactions (2022: 1%) with over £42.9 million withdrawn in the financial year.
Other: Other shopping services increased by £1.0 million (56.6%) to £2.8 million (2022: £1.8 million)
this includes the partnership with Snappy Shopper and FMCG campaigns.
E-commerce
Parcels
Year ended
31 March
2023
Year ended
31 March
2022 Change %
Net Revenue (£m) 7.3 4.9 46.5%
Services in Live sites (No.) 10,514 10,049 4.6%
Transactions (Millions) 56.4 33.3 69.6%
E-commerce net revenue increased by £2.4 million (46.5%) to £7.3 million due to the increase in total
parcels transactions by 69.6% to 56.4 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 Wish.com and Inpost. Parcel sites increased by 4.6% to
10,514 sites.
Payments & Banking
Net revenue (£m)
Year ended
31 March
2023
Year ended
31 March
2022 Change %
Cash – bill payments 25.0 26.7 (6.5%)
Cash – top-ups 7.3 7.8 (6.2%)
Digital 15.7 7.8 102.7%
Cash through to digital 6.9 8.2 (16.5%)
Other payments and banking 1.3 1.0 42.3%
Total net revenue (£m) 56.2 51.5 9.1%
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76 PayPoint Plc Annual Report 2023
Payments & Banking divisional net revenue increased by 9.1% to £56.2 million as a result of continued
growth in digital transactions, particularly within the cash-out sector, partially oset by fewer cash bill
payments and top up transactions and margin erosion from prior year client contract renewals.
Cash – bill payments
Year ended
31 March
2023
Year ended
31 March
2022
Change
%
Net revenue (£m) 25.0 26.7 (6.5%)
Transactions (millions) 146.3 157. 2 (6.9%)
Transaction value (£m) 4,245.9 3,932.3 8.0%
Average transaction value (£) 29.0 25.0 16.0%
Net revenue per transaction (pence) 17. 1 17.0 0.6%
Cash – bill payments net revenue only decreased by £1.7 million (6.5%) to £25.0 million changing from
the much larger decrease trends seen in recent years. The increase in energy prices had seen customers
in the front half of the year topping up more frequently and with increased average transaction values.
Transactions were impacted in the second half of the year with the government’s Energy Bills Support
Scheme (EBSS), although this benefitted our digital business and the continued switch to digital
payment methods. Cash – bill payments transactions decreased by 10.9 million (6.9%) to 146.3 million.
Cash – bill payments net revenue per transaction increased by 0.1 pence (0.6%) due to higher average
transaction value.
Cash – top-ups
Year ended
31 March
2023
Year ended
31 March
2022
Change
%
Net revenue (£m) 7.3 7.8 (6.2%)
Transactions (millions) 19.0 21.2 (10.3%)
Transaction value (£m) 236.8 257.6 (8.1%)
Average transaction value (£) 12.4 12.1 2.5%
Net revenue per transaction (pence) 38.4 36.8 4.4%
Cash top-ups net revenue decreased by £0.5 million (6.2%) to £7.3 million. Cash top-ups transactions
decreased by 2.2 million (10.3%) to 19.0 million due to further market declines in the prepaid mobile
sector whereby UK Direct Debit pay-monthly options displace UK prepay mobile.
Digital
Year ended
31 March
2023
Year ended
31 March
2022
Change
%
Net revenue (£m) 15.7 7.8 102.7%
Transactions (millions) 52.3 34.2 53.0%
Transaction value (£m) 1 ,307.6 756.6 72.8%
Average transaction value (£) 25.0 22.2 13.0%
Net revenue per transaction (pence) 30.4 22.5 35.0%
Digital (MultiPay, CashOut and Direct Debits) net revenue increased by £7.9 million (102.7%) to
£15.7 million and digital transactions increased by 18.1 million (53.0%) to 52.3 million. MultiPay net
revenue increased by £0.9 million to £4.1 million (2022: £3.3 million) with transactions growing by 6.6
million to 33.6 million. The DWP Payment Exception Service contributed £4.4 million net revenue in the
period (2022: £1.6 million) following a full year of transactions compared to six months in FY22. Cashout
revenue increased by £4.2 million (258.4%) to £5.9 million (2022: £1.6 million) driven by Governments
EBSS scheme in the second half of the year with over £246 million worth of vouchers redeemed.
Cash through to digital
Year ended
31 March
2023
Year ended
31 March
2022
Change
%
Net revenue (£m) 6.9 8.2 (16.5)%
Transactions (millions) 8.5 10.6 (19.6)%
Transaction value (£m) 496.3 505.2 (1.8)%
Average transaction value (£) 58.1 47. 5 22.2%
Net revenue per transaction (pence) 81.2 77.4 4.9%
Cash through to digital (eMoney) net revenue decreased by £1.3 million (16.5%) to £6.9 million (2022: £8.2
million) and transactions decreased by 2.1 million (19.6%) to 8.5 million (2022: 10.6 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 SIM sales, interest generated by investing cash received
on client funds and other ad hoc items which contributed £1.3 million (2022: £1.0 million) net revenue.
Love2shop segment
Continuing operations
£m
Year ended
31 March
2023
Revenue 7.6
Net revenue 3.4
Other costs of revenue (0.6)
Depreciation and amortisation (administrative expenses) (0.2)
Other administrative costs (1.8)
Net finance costs (0.3)
Total costs (2.9)
Underlying profit before tax (excluding adjusting items) 0.5
1 Eective tax rate is the tax cost as a percentage of profit before tax.
Financial review continued
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Strategic report Governance Financial statements Shareholder information77 PayPoint Plc Annual Report 2023
Love2shop (L2S) results reflect the one month since the acquisition on 28 February 2023. L2S had
£14.8 million of Billings which represents value of goods and services sold. This reduces to £7.6 million
of revenue to adjust for the portion where the performance obligation occurs later as the cards and
vouchers are redeemed. When L2S sells a card or voucher that can be redeemed at a single retailer the
full value is treated as revenue as L2S acts as the principal. When the product is multi-retailer, L2S only
recognises the service fee earned as agent rather than the full sales value, along with other revenue,
comprising interest income and non-redemption income. Net revenue is then stated aer deducting the
costs for the single retailer product. The business is seasonal and profit is primarily generated in Q3 of
the financial year.
Other costs of revenue are the production and distribution costs of the cards and vouchers, with
administrative costs being the regular costs to run the business. Finance costs include the costs of
borrowings specifically for the acquisition. Amortisation of intangible assets arising on acquisition is an
adjusting item and excluded from the underlying profit in the table above.
Profit before tax and taxation
The income tax charge of £7.9 million (2022: £9.0 million) on profit before tax from continuing operations
of £42.6 million (2022: £48.5 million from continuing operations) represents an eective tax rate of
18.5% (2022: 18.5% for continuing operations). This is lower than the UK statutory rate of 19% due to
adjustments in respect of prior year, non-taxable exceptional items and disallowable expenses.
Group statement of financial position
Net assets of £111.7 million (2022: £83.3 million) increased by £28.4 million reflecting the shares issued
as part of the acquisition of Appreciate and the £10.5 million growth in retained earnings. Current
assets increased by £147.1 million to £251.9 million (2022: £104.8 million) due to the monies held in
trust and cash held on behalf of clients of £119.7 million acquired with Appreciate. Non-current assets
of £227.9 million (2022: £127.3 million) increased by £100.6 million due to the Appreciate acquisition
goodwill and intangible assets and the investment in terminals.
Current liabilities increased by £181.9 million due to the liabilities matching the cash held on behalf of
clients and monies held in trust and an increase in borrowings from the RCF drawdown, required for the
acquisition. Non-current liabilities of £52.9 million (2022: £15.7 million) increased by £37.2 million due to
the new £36.0 million amortising term loan taken out to fund the acquisition and deferred tax liabilities
arising from the acquisition.
Net debt is a key measure for the business and has increased to finance the acquisition of Appreciate.
Although the cash element of the purchase price was £61.9 million the net increase is only £28.5 million
due to our strong cash generation and cash acquired.
Year ended
31 March
2023
Year ended
31 March
2022
Change
%
Cash and cash equivalents-net corporate cash from
continuing operations 22.0 7.6 187.7%
Less:
Loans and borrowings (94.4) (51.5) 83.2%
Net debt (72.4) (43.9) 65.0%
Total loans and borrowings of £94.4 million have increased by £42.8 million and consist of a £10.8 million
amortising term loan A, £36.0 million amortising term loan B, £46.5 million drawdown of the
£75.0 million revolving credit facility and £1.1 million of asset financing balances and accrued interest
(2022: £27.0 million drawdown from the revolving credit facility, £21.7 million amortising term loan A and
£2.9 million of asset financing balances).
Group cash flow and liquidity
The following table summarises the cash flow movements during the year.
Year ended
31 March
2023
Year ended
31 March
2022
Change
%
Profit before tax from continuing and
discontinued operations 42.6 78.5 (45.97)
Ofgem provision – cash payment – (12.5) –
Non-cash exceptional items 1.3 (2.9) 144.8%
Gain on disposal of investments Romania – (30.0) –
Depreciation and amortisation 10.5 10.6 (0.9%)
Share-based payments and other items 2.4 0.9 166.7%
Working capital changes (corporate) 3.6 (3.2) 215.6%
Cash generation 60.4 41.4 46.1%
Taxation payments (6.2) (9.2) (32.6%)
Capital expenditure (12.7) (10.8) 17.6 %
Acquisitions of subsidiaries net of cash acquired (45.6) (4.5) n/m
Contingent consideration cash paid (1.0) (2.0) (50.0%)
Sale/(purchase) of investment in associate 5.5 (6.7) n/m
Purchase of convertible loan note and other investment (3.3) (0.8) n/m
Disposals of business net of cash disposed – 20.2 –
Movement in loans and borrowings (42.4) (35.0) (221.1%)
Lease payments (0.2) (0.2) –
Dividends paid (25.1) (23.1) 8.7%
Net increase/(decrease) in corporate cash and cash
equivalents 14.2 (30.7) 146.3%
Net change in clients’ funds and retailers’ deposits 39.3 (9.7) 505.2%
Net increase/(decrease) in cash and cash equivalents 53.5 (40.4) 139.1%
Cash and cash equivalents at the beginning of year 24.4 64.8 (62.3%)
Cash and cash equivalents at the end of year 77.9 24.4 –
Comprising:
Corporate cash net of overdra 22.0 7.7 185.7%
Clients’ funds and retailers’ deposits 55.9 16.7 236.7%
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78 PayPoint Plc Annual Report 2023
The following table summarises the cash generation from continuing operations excluding
exceptional items:
Year ended
31 March
2023
Year ended
31 March
2022
Change
%
Profit before tax from continuing operations 42.6 48.5 (12.2%)
Exceptional items 5.6 (2.9) n/m
Profit before tax from continuing operations excluding
exceptional items 48.2 45.6 5.7%
Depreciation and amortisation 10.5 10.6 (0.9%)
VAT and other non-cash items
Share-based payments and other items 2.4 0.9 166.7%
Working capital changes (corporate) 1.2 (3.2) (135.3%)
Cash generation from continuing operations excluding
exceptional items 62.3 53.9 15.6%
Cash generation grew to £60.4 million (2022: £41.4 million) delivered from profit before tax from
continuing operations of £42.6 million (2022: £48.5 million). The previous year cash generation was
impacted by the £12.5 million payment in relation to the Ofgem Statement of Objections. Adjusting
for exceptional items, cash generation from continuing operations improved by 15.6% to £62.3 million.
There was a net working capital inflow of £2.5 million related to costs incurred for the Appreciate
acquisition that will cause an outflow of working capital in FY24.
Taxation payments on account of £6.2 million (2022: £9.2 million) are lower compared to the prior period
due to a tax refund of £3.3 million following the closure of March 2021 tax filings. Dividend payments
were higher compared to the prior period due to the increase in the current year interim and the final
ordinary dividend paid per share for the prior year ended 31 March 2022.
Capital expenditure of £12.7 million (2022: £10.8 million) was £1.9 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
driven by the roll out of terminals in Merchant Rentals where the principal product is now an operating
lease rather than finance lease.
Dividends
Year ended
31 March
2023
Year ended
31 March
2022
Change
%
Ordinary reported dividends per share (pence)
Interim (paid) 18.4 17.0 8.2%
Final (proposed) 18.6 18.0 3.3%
Total reported dividend per share (pence) 37.0 35.0 5.7%
Total dividends paid per share 34.6 33.6 3.0%
Total dividends paid in year (£m) 25.1 23.1 8.7%
We have declared an increase of 3.3% in the final dividend to 18.6 pence per share (2022: 18.0 pence
per share). One to be paid as an interim dividend and one to paid as a final dividend. This is payable in
equal instalments of 9.3 pence per share (2022: 9.0 pence per share) on 1 September 2023 and 22
September 2023 to shareholders on the register on 11 August 2023. The final dividend is subject to the
approval of shareholders at the annual general meeting on 7 September 2023.
The final dividend will result in £13.5 million (2022: £12.4 million) being paid to shareholders from
the standalone statement of financial position of the Company which, as at 31 March 2023, had
approximately £45.0 million (2022: £67.9 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 dividends and cash for investment through capital expenditure and acquisitions.
The Board’s approach to the setting of the ordinary dividend has been updated since the prior year in
relation to cover ratio to strengthen the capital position and now follows the following capital allocation
priorities:
• Investment in the business through capital expenditure in innovation to drive future revenue streams
and improve the resilience and eciency of our operations.
• Investment in opportunities such as the acquisition of Appreciate in February 2023 and investment
in OBConnect convertible loan.
• Progressive ordinary dividends targeting a cover ratio of 1.5 to 2.0 times earnings from continuing
operations excluding exceptional items.
Going concern
The financial statements have been prepared on a going concern basis having regard to the identified
principal risks and uncertainties and viability statement on page 69. Our cash and borrowing capacity
provides sucient funds to meet the foreseeable needs of the Group including dividends.
Alan Dale
Finance Director
27 July 2023
Financial review continued
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Financial statements Shareholder information79 PayPoint Plc Annual Report 2023 Strategic report Governance
Introduction to the Corporate Governance report from the Chairman
“This has been another
strong year for the
PayPoint Group as the
business has built on
the transformation and
strategic step change
delivered over the past
three years.”
Giles Kerr
Chairman
Dear Shareholders,
I am pleased to introduce the governance section of this year’s
Annual Report. This section gives more detail on the governance
structure we have in place and how we comply with the UK
Corporate Governance Code. I am pleased to report that for the year
under review, we have consistently applied the Principles of Good
Governance contained in the 2018 UK Corporate Governance Code
save that we have not carried out a review of the eectiveness of
Appreciate Group’s (“Appreciate”) risk management and internal
control systems (with respect to Provision 29 of the Code) due to
the proximity of the acquisition of Appreciate, which occurred on 28
February 2023, to our financial year end.
The Board has carried out a review of the disclosures and
management of climate related risks for the Task Force On Climate
Related Financial Disclosures. Detailed disclosure is provided in the
Annual Report, along with the further progress made on developing
our broader ESG strategy.
The year in review
The business has maintained momentum in delivering against
its strategic plan as we have continued our diversification away
from legacy cash bill payments with growth in recently acquired
businesses and through the acquisition of Appreciate. Eective
governance together with the strong leadership from the Board
has provided structure and stability to the business.
Executive and Plc Boards
The Board and Nomination Committee has continued to work on
succession planning and Board composition. We have worked
actively with Teneo People Advisory to ensure the Board has
the necessary skills, experience and knowledge and following an
extensive search process we were delighted to appoint Rob Harding
as Chief Financial Ocer. Rob will be joining the Company on 1
August 2023 and will replace Alan Dale who is retiring. I would like to
express my gratitude for Alan’s contribution to the company.
We also welcome Guy Parsons as Non-Executive Director
to the Board having previously been Executive Chairman of
Appreciate Group.
During the year the Executive Board was strengthened in key areas
to: a) drive growth (Nick Williams-Parcels-and Anthony Sappor-
Retail Proposition and Partnerships) and b) enhance integration with
Appreciate Group (Julian Coghlan and Talha Ahmed-respectively
Managing Director and Finance Director of Love2shop & Park Savings).
Board Evaluation
Following last year’s internal evaluation, we have again this year
conducted an internal evaluation of the Board, its Committees and
the Chair, which confirmed that our Board and Committees continue
to operate eectively. More information on the process and results
of that evaluation can be found on page 80. We have also completed
a tender for an external third party to carry out the Board evaluation
in 2023–24. This is being progressed in H1 FY 2024.
Stakeholder Engagement
The success of PayPoint depends upon the Board making informed
decisions for the benefit of shareholders having regard to the wider
requirements of all our stakeholders. The Board receives regular
investor updates throughout the course of the year. The Company’s
Annual General Meeting will be held at PayPoint’s registered oce
on 7 September 2023 where you will have the opportunity to meet
the Board and members of the Executive Board. The matters to be
approved by shareholders are set out in our Notice of Annual General
Meeting which will be mailed to shareholders in August.
This year we continued to develop our work force engagement
activities including receiving a full briefing on the employee
engagement survey results and Directors meeting directly with
employees. Full details of our people and culture activities are set
out in the strategic report.
Our retail partners and SMEs remain central to our business and the
Board continued to receive regular briefings throughout the year on
our retailer engagement proposition and the work we do to enable
clients to provide vital services in the community.
Conclusion
I would like to conclude by thanking my Board colleagues for their
continued support and commitment over the past year and to
thank Nick Wiles and the whole Executive team for their dynamic
management of a rapidly changing business environment in dicult
economic circumstances.
If you wish to discuss any aspect of our governance arrangements,
please contact me via our interim Company Secretary, Brian
McLelland, via email at CompanySecretary@paypoint.com.
Giles Kerr
Chairman
27 July 2023
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80 PayPoint Plc Annual Report 2023
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. The last such external evaluation
was carried out in 2021 and the Board in 2023 carried out tendering for an agency to carry out the external board evaluation in 2024. A preferred agency has been chosen and the process is due to commence in
November/December 2023.
2023 internal evaluation process and output
The Chairman, supported by the Company Secretary, circulated a questionnaire to each Director for their views on the performance of the Board and its Committees which covered: delivery and implementation of
strategic plan; integration of newly acquired businesses; approach to ESG; performance of management; and the composition, quality and processes of the Board and its Committees.
The Chairman presented the findings of the evaluation at the February 2023 Board meeting and the following actions were agreed:
Key issues identified Proposed action plan
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 eorts from auditors and Plc to identify potential audit
challenges and their remedy earlier.
Actions to date:
Additional resourcing for finance has been provided at Welwyn Garden City and Haydock. Additional time 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.
Actions to date:
Tutu Kamara was appointed as Head of Risk and Internal Audit in February 2023. She was joined by Nigel Tuppen as a new Risk & Controls Manager on 2 May
2023. Work has commenced to make the risk framework more robust and consistent across the Group, including in Appreciate. This will enable greater support
and challenge to ongoing operational activities, project delivery and strategic risks.
Board should improve wider
engagement with management
and sta.
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.
Actions to date:
NEDs have been invited to future fora. See 3) on p81.
Business workshops have also been diarised and the first two have occurred-see p81 5) Deep Dives.
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.
Actions to date:
Reports have been provided on time for the Board for the period November 2022 – June 2023.
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Financial statements Shareholder information81 PayPoint Plc Annual Report 2023 Strategic report Governance
The actions of the 2022 internal evaluation have also been progressed accordingly:
1) Presentation of risk: 2) Engagement with stakeholders: 3) Extend the employee forum for the NEDs: 4) ESG: 5) Deep Dives:
The work on risk was felt to be good
with a high level of diligence but it was
considered that the presentations
to the Board could be snappier with
greater focus on four or five key issues
which could be pre-agreed with the
Audit Committee Chair/Finance Director
prior to the meeting.
Actions to date:
This progression will continue following
the appointment in February 2023
of Tutu Kamara as Head of Risk
and Internal Audit. See General
risk and controls reporting needs
strengthening-p80 Actions to date.
The Board acknowledged it was
important to engage with stakeholders.
Actions to date:
We have made eorts to strengthen
our retailer partner relationships and
drive adoption of new opportunities to
earn, including regular ‘cash and carry’
days, more direct communications
and more regular meetings with the
key trade associations, including the
Association of Convenience Stores
(ACS), the Scottish Grocers’ Federation
(SGF) and the National Federation of
Retail Newsagents (NFRN). The Board
for instance met with the CEO of the
ACS in February 2023 to learn more
about the ACS and to discuss areas
of opportunity.
Earlier in the financial year the Board
also received a presentation from Chris
Hemsley, Managing Director of the
Payment Systems Regulator, and was
able to engage with the same on future
regulatory developments and how such
could impact the Company.
The Chairman of the Board and the
CEO engaged with key shareholders
throughout the year and reported to the
Board on issues discussed.
Members of the Board, Executive Board
and senior management met with the
Company’s shareholders and presented
on a number of business matters
throughout the year. The Remuneration
Committee Chair also engaged with
shareholders on executive pay including
the proposed Remuneration Policy for
approval at the 2023 AGM.
It was thought beneficial for the NEDs
to attend some employee fora to
engage one-to-one.
Actions to date:
Gill Barr continued her attendance of
the meetings as she has done for the
last three years and invitations have
been extended to other NEDs to attend
in future.
During the year the SID and Chair of
the Remuneration Committee attended
a meeting of the employee forum to
discuss remuneration. Nick Wiles also
attended and presented on operations
and strategy and Guy Parsons as part of
his induction has been invited to attend.
Further actions on ESG reporting and
monitoring would continue in 2023/24
including monitoring initiatives in
equality, diversity and inclusion, the
gender pay gap, the structure of
rewards, recruitment and retention,
corporate actions on culture and
engagement, monitoring and assessing
climate risk and issues relating to
integration of the businesses acquired
during the financial year.
Work continues-see page 38 for more.
The Company’s ESG Strategy was
presented to the Board twice during
the year so that progress could be
monitored, analysed and challenged.
The ESG Working Group continues to
meet regularly to progress actions and
membership has been broadened by
participation from Appreciate Group.
It was agreed that deep dives of various
business sectors should occur.
Actions to date:
Deep dive workshops from various
parts of the business occurred
(e.g. Newspapers) during the year
and three are scheduled for the 2023
calendar year to focus on:
1) Digital Payments and Open Banking
(held in March 2023).
2) Parcels (held in June 2023).
3) Retail Proposition and Technology.
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82 PayPoint Plc Annual Report 2023
Board of Directors
Giles Kerr (ACA)
Chairman
Nick Wiles
Chief Executive
Alan Dale
(ACA)
Finance Director
Gill Barr
Independent Non-Executive Director
Appointed to the Board in November 2015 as
an Independent Non-Executive Director and
Chairman of the Audit Committee. Assumed
the role of Senior Independent Director in
May 2017 and became Chairman in May 2020.
Career
Giles’ former roles include chief financial ocer at
the University of Oxford, Group finance director at
Amersham plc and Arthur Andersen & Co and non-
executive director roles at BTG plc, Victrex plc, Elan
Corporation Inc and Adaptimmune Therapeutics plc.
Board skills and experience
Corporate finance, accounting, risk management.
Other principal roles
Non-executive director of Senior plc, Abcam plc and
Arix Bioscience plc.
Committee memberships
Chairman of the Nomination Committee and
a member of the Remuneration Committee.
Appointed to the Board in October 2009,
Chairman in May 2015, Executive Chairman
in December 2019 and Chief Executive in
May 2020.
Career
Nick retired as Chairman of Nomura in 2012 aer
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 chairman 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
Investment banking, corporate finance, equity
markets, investor sentiment and relations.
Other principal roles
None.
Committee memberships
Member of the Market Disclosure Committee.
Appointed to the Board as Finance
Director in November 2020 having acted as
Interim Finance Director since July 2020.
He joined PayPoint in August 2017 as Head
of UK Finance.
Career
Alan is a chartered accountant with over 30 years’
experience in the financial services sector. Prior to
joining PayPoint he held a number of senior finance
roles with financial institutions including GE Capital.
Board skills and experience
Corporate finance, accounting, risk management.
Other principal roles
None.
Committee memberships
Member of the Market Disclosure Committee,
the Cyber Security & Information Technology
Sub-Committee and ESG Working Group.
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 a non-executive director of Morgan
Sindall plc and McCarthy & Stone plc.
Board skills and experience
Gill brings her extensive experience as a retailer and
oers a strategic perspective on drivers of growth.
As a Non-Executive Director she is able to provide
remuneration expertise owing to her chairmanship
of the remuneration committees of the companies
detailed below.
Other principal roles
Senior independent director of N Brown Group plc
(retired 10 July 2023) and non-executive director of
Wincanton and DFS Furniture plcs.
Committee memberships
Member of the Audit, Nomination and Remuneration
Committees. Board representative for the
employee forum.
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Financial statements Shareholder information83 PayPoint Plc Annual Report 2023 Strategic report Governance
Rakesh Sharma
(OBE FREng CPhys MInstP)
Senior Independent Director
Ben Wishart
Independent Non-Executive
Director
Rosie Shapland
(FCA)
Independent Non-Executive
Director
Guy Parsons
Independent Non-Executive
Director
Appointed to the Board in May
2017 becoming Senior Independent
Director in May 2020.
Career
Rakesh was chief executive of Ultra
Electronics Holdings Plc (‘Ultra’) having
previously held several senior and
management positions within Ultra and has
managed businesses and divisions across
the full range of that 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.
Additionally, his long association in the global
security sector brings skills in cyber security
and information technology. Rakesh supports
the younger generation though his pro bono
activities for a multi academy trust and
Riverbank Academy, a special educational
needs school. He is also a Lay Council
member at The University of Nottingham.
Other principal roles
Chairman of Kromek Group plc.
Committee memberships
Chairman of the Remuneration Committee
and a member of the Audit, Nomination
Committees and Cyber Security &
Information Technology Sub-Committee.
Appointed to the Board in
November 2019.
Career
Ben has previously served as chief
information ocer (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.
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 March
2023.
Career
Guy is formerly Executive Chair of
Appreciate Group. Guy held senior
sales, marketing and operations roles
at Accor UK and Whitbread plc, before
becoming CEO of first Travelodge and
then easyHotel plc. He was previously
Chair at online sofa retailer, Snug and
Non-Executive Director at Yorkshire
Building Society.
Board skills and experience
Guy brings extensive knowledge of
leadership, strategy, management,
sales and marketing.
Other principal roles
None.
Committee memberships
A member of the Audit, Remuneration
and Nomination Committees.
Board experience
Board diversity
Cyber security
and IT
25%
Finance
62.5%
Risk
management
50%
Operational
37.5%
Gender
Ethnicity
Female 25%
Male 75%
Ethnic minority British 1
White British 7
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84 PayPoint Plc Annual Report 2023
Executive Board
Nick Wiles
Chief Executive
See Board of Directors for biography.
Alan Dale
Finance Director
See Board of Directors for biography.
Simon Coles
Chief Technology Ocer
Simon joined the Executive Board in
April 2021. He was appointed as Chief
Technology Ocer in May 2017, having
previously managed the IT team at
PayPoint’s Mobile and Online subsidiary
prior to its sale.
Simon has worked in both the payments
and retail wealth management sectors for
over 30 years as an engineer, manager,
consultant and IT executive. He has
launched and managed card processing
systems for several banks and consulted
on payments in the UK, USA and Australia.
Prior to joining PayPoint, Simon was
a management consultant for several
years and has delivered significant IT
programmes for several banks, wealth
managers and insurance firms.
Danny Vant
Managing Director,
Client Services
Danny joined the business in 2019
and was promoted to his current role
of Managing Director, Client Services
in 2023, leading the commercial and
strategic development of the client
portfolio and managing relationships
with the multiple retailers.
Before joining PayPoint Danny worked
for Mitie plc in the FM sector managing
a number of businesses, predominantly
within the security sector. Danny also
worked in consultancy for Newton
Europe specialising in process eciency
improvements across a diverse range
of sectors, including healthcare
and defence.
Prior to this Danny started his career
as a graduate in the logistics industry,
spending six years working in the parcel
carrier industry for Target Express.
Katy Wilde
HR Director
Katy joined PayPoint as HR Director
in 2012 with responsibility for the
development and implementation
of our people agenda.
Prior to joining PayPoint, Katy worked
for RSA Insurance Group where she
held a number of senior business
partnering roles in the UK and latterly in
the emerging markets business where
she was responsible for ensuring the
delivery of the HR agenda across 22
countries in Central and Eastern Europe,
Asia, the Middle East and Latin America.
Prior to that Katy spent seven years
at General Electric where she held HR
roles in both its consumer finance and
insurance businesses. Katy has a degree
in International Business and Modern
Languages from Aston University and
is a Chartered Member of the CIPD.
Katy is a member of the ESG Working
Group and chairs the Employee Forum.
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Financial statements Shareholder information85 PayPoint Plc Annual Report 2023 Strategic report Governance
Ben Ford
Customer Experience Director
Ben Ford joined the Executive Board in
July 2020 as Retail Services Director
and transitioned to the role of Customer
Experience Director in October 2021
following the acquisition of Handepay
and Merchant Rentals. Ben is responsible
for ensuring that our proposition is
underpinned by the delivery of excellent
customer service to our retailers,
merchants and consumers.
Ben was previously at Addison Lee
where he was head of Global Customer
Experience and Operations responsible
for global service delivery of customers,
clients, drivers, and fleet. Prior to joining
Addison Lee Ben worked in similar roles
for companies including Premier Inn,
Danone, Joules and Boden.
Tanya Murphy
General Counsel and Head
of Compliance
Tanya joined PayPoint as General
Counsel and Head of Compliance in
September 2020 and leads PayPoint’s
Legal and Compliance teams advising all
companies across the PayPoint Group on
legal and regulatory matters relating to
their businesses.
Prior to joining PayPoint, Tanya worked
at Zurich Insurance for 11 years where
she held a number of roles including
Head of the UK Corporate & Commercial
Legal team.
Tanya qualified as a solicitor in 1996 at
the international law firm Lovell White
Durrant, now Hogan Lovells LLP, where
she worked as a solicitor for 12 years
specialising in corporate and commercial
law across a number of business sectors.
Mark Latham
Managing Director,
Card Services
Mark joined the Executive Board in
February 2021 following the acquisition
of Handepay and Merchant Rentals and
was appointed Banking Services Director
in October 2021 in recognition of our
growing banking proposition including
ATMs and Counter Cash and he retains
his responsibility for our cards business.
Prior to this, Mark was chief commercial
ocer at Handepay from 2013 where he
developed the market-leading customer
proposition and led the marketing and
customer management teams.
Mark has previously held international
product management positions with
global payment processor Elavon, where
he was responsible for mobile payment,
currency conversion and gi card
solutions. Mark began his career in the
payment industry in 2002, supporting
major acquiring and retail customers
for Ingenico.
Anna Holness
Sales & Customer
Life Cycle Director
Anna joined PayPoint as Sales Director
in January 2022 before being promoted
to her current role in March 2023. Anna
has responsibility for new business
generation for all our products and
services, customer retention and also
relationship management across the
current PayPoint estate. Prior to joining
PayPoint, Anna worked for Worldpay from
FIS, where as VP of SME sales Anna was
responsible for new business generation
across SME and mid market sectors.
Before moving into Payments, Anna spent
over 20 years in the telecommunications
sector, predominantly at Telefonica/
O2 where Anna held a number of senior
positions across both B2B and B2C
(Retail), including head of franchising,
head of stores, head of global sales. Anna
has a broad experience; from leading
stores teams of up to 800 in retail and
managing relationships with some of
the world’s largest organisations across
multiple global locations, from her time
in global sales.
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86 PayPoint Plc Annual Report 2023
Executive Board continued
Chris Paul
Head of Corporate Finance
Chris joined PayPoint in 2016 and
is Head of Corporate Development,
leading the organisation’s growth and
development activities and overseeing
treasury strategy.
Prior to joining PayPoint, Chris worked
at LMAX as Head of Financial Reporting,
where he was responsible for developing
the finance function following its MBO
from Betfair.
He is a qualified accountant with 20
years’ experience in senior finance
positions in financial services, telecoms
and gaming sectors, including TalkTalk
and Tsogo Sun Gaming.
Jay Payne
IT Service & Operations
Director
Jay joined PayPoint in January 2019 as
IT Service and Operations Director and
leads the delivery of IT services across
the PayPoint Group.
With over 25 years’ experience, Jay
has been responsible for delivery and
design of services supporting card
issuing, merchant acquiring and specialist
subscription billing for clients across
all industries.
Previous positions have included
responsibility for the delivery of payment
optimisation consultancy for clients in
publishing and broadcasting with a focus
on subscription churn reduction.
Prior to commencing his career in
payments, Jay spent eight years
serving with the Royal Navy.
Jo Toolan
Client Services Director
Jo joined PayPoint in 2011 and is
currently Client Services Director, with
responsibility for a portfolio of client
service sectors including energy, local
authorities, DWP and eMoney.
Prior to PayPoint, she supported
bluechip organisations with their CSR
programmes in schools, including
developing programmes for BT and
Grant Thornton, following her early
career in the education sector.
Steve O’Neill
Corporate Aairs and
Marketing Director
Steve joined PayPoint originally in 2014,
and then again in 2020 as Corporate
Aairs and Marketing Director, leading
our marketing, PR and investor relations
eorts for the Group.
He has spent over 20 years in
marketing and PR leadership roles
for large consumer organisations in
the UK and Europe, across the retail,
telecommunications and financial
services sectors. Aer starting his career
at the John Lewis Partnership on their
graduate scheme, Steve has worked for
Orange, Carphone Warehouse, HSBC
and Amigo.
Steve is also a member of the ESG
Working Group.
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Financial statements Shareholder information87 PayPoint Plc Annual Report 2023 Strategic report Governance
Julian Coghlan
Managing Director Love2Shop
& Park Savings
Julian joined PayPoint as Managing
Director of Love2shop and Park
Christmas Savings following the
successful acquisition of Appreciate
Group PLC in February 2023. Julian is
responsible for the Strategy, Commercial
performance, Clients and Sales &
Marketing functions with a focus on
driving revenues in line with key financial
targets. Julian successfully served as
Interim CEO of Appreciate Group plc
(AG) throughout the acquisition period.
Julian joined AG in August 2017, initially
as Group Operations Director then as
Chief Commercial Ocer. Prior to this,
he held senior commercial executive
roles at Adare Group, the customer
communications services group, for
18 years following a career in the
automotive and electronics industry.
Talha Ahmed
Finance Director Love2Shop
& Park Savings
Talha qualified as a Chartered Accountant
in Pakistan in 2009 and spent over
fieen years working in professional
services firms with experience in four
countries, including roles in Aberdeen and
Manchester with EY and PwC, working
with companies in both the regulated
financial services and consumer product
sectors. Talha joined Appreciate Group
Plc in November 2021 as Director of
Finance and was appointed to the role
of Interim Chief Financial Ocer on 6
July 2022 but was not appointed as a
statutory Board director at that time.
He has since been appointed to the
Executive Board as Finance Director
of Love2Shop and Park Savings.
Anthony Sappor
Retail Proposition and
Partnerships Director
Anthony joined the business in 2013
following seven years with convenience
retailer SPAR. Since joining PayPoint
he has held a number of leadership
roles across retail relationships and
product management, culminating in
his appointment to the Board as Retail
Proposition & Partnerships Director in
April 2023. Anthony leads the strategic
development of our retail devices
and accompanying services, our ATM
business, our consumer engagement
proposition, and our partnerships with
large-scale corporate retail groups such
as Asda, Co-op, and One-Stop.
Nick Williams
Parcels Services Director
Nick Williams joined PayPoint in
September 2017 and is currently Parcel
Services Director, having previously
managed the parcels operational team
before taking on responsibility for the
wider PayPoint parcels product. Nick
has overseen the transformation and
growth of the Collect+ brand in recent
years into a truly carrier agnostic and
customer centric solution.With 30 years
industry experience Nick formerly held
key positions within both Hermes and
TNT where he was responsible for various
commercial and operational teams.
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88 PayPoint Plc Annual Report 2023
Corporate Governance Report
The Board considers that throughout the year under review it has complied with the provisions of the UK
Corporate Governance Code (the ‘Code’) as published by the Financial Reporting Council in July 2018
save that we have not carried out a review of the eectiveness of Appreciate’s risk management
and internal control systems (with respect to Provision 29 of the Code) due to the proximity of the
acquisition of Appreciate to the year end, which occurred on 28 February 2023.
This report describes how the provisions of the Code have been applied by the Company.
Membership and attendance at scheduled Board meetings held during the year
The table below shows Directors’ attendance of the 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 9 9
Alan Dale Finance Director 9 9
Non-Executive Directors
Giles Kerr Chairman 9 9
Gill Barr Independent Non-Executive Director 9 9
Guy Parsons
1
Independent Non-Executive Director 1 1
Rosie Shapland Independent Non-Executive Director 9 9
Rakesh Sharma Senior Independent Director 9 9
Ben Wishart Independent Non-Executive Director 9 9
1 Guy Parsons attended one Board meeting of the financial year upon his appointment as of 23 March 2023.
In addition to the nine scheduled meetings, the Board met a further seven times during the year to give
consideration to and to approve ad hoc matters including the Appreciate Group acquisition in accordance
with the schedule of matters reserved to the Board.
Corporate governance framework
The Board provides eective leadership to the Group within a wider corporate governance framework
with clearly defined roles and responsibilities as illustrated in the chart opposite. The governance
framework supports the rigorous challenge by the Board of strategy, performance and accountability,
which encourages the proper implementation of the strategic aims of the Company. This results in
the growth of the business and protection of the interests of shareholders and wider stakeholders.
Board composition
At the date of this report, the Board comprises eight Directors: the Chairman; the Chief Executive; the
Finance Director; the Senior Independent Director; and four Independent Non-Executive Directors.
The size of our Board allows time for full discussion and debate of matters and enables all Directors’
views to be heard. The Non-Executive Directors have a broad range of skills and experience bringing
balance and diversity to the Board. The biographies, skills and competences of each of our Directors are
set out on pages 82 to 83.
The composition of the Board is subject to ongoing review and a key consideration for any new Board
appointment will be the additional breadth a new Director could bring.
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 oce during normal
business hours and at the annual general meeting. In accordance with the provisions of the Code all
Directors 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 can be found in the Notice
of Annual General Meeting on page 180.
Tenure of Board
Under 12 months 1
1 to 3 years 3
4+ years 4
The Directors have disclosed all their significant external commitments which the Board has considered
and the Board is satisfied that all the Directors are able to allocate sucient time to the Company to
discharge their responsibilities eectively.
Independence statement
The Board considers its Non-Executive Directors to be independent. The Board has determined that
each is independent in character and judgement and is free from any business or other relationship which
could aect the exercise of his/her judgement.
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Financial statements Shareholder information89 PayPoint Plc Annual Report 2023 Strategic report Governance
Corporate Governance Framework
The Board
The Board is collectively responsible for the long-term success of the Group and is accountable to the shareholders of the Group. The Board provides eective leadership by setting the strategic aims of the
Group and overseeing the ecient implementation of these aims in order to achieve sustainable growth of the business. It monitors operational and financial performance against agreed goals and objectives
whilst ensuring that the appropriate controls and systems exist to manage risk. The Board ensures that there are the necessary financial resources and people with the necessary skills to achieve the strategic
goals the Board has set. The Nomination, Audit and Remuneration Committees support the Board in carrying out its role, which is formally set out in ‘the Matters Reserved to the Board’, full details of which can
be found on the Company’s website www.corporate.paypoint.com. The details of the roles of each of those Committees can be found on pages 94-123.In addition, the Executive Board carries out strategic
objectives delegated to it by the Board and the roles of each member of the Executive Board are set out on pages 84-87.
Audit Committee
The key role of this Committee is to ensure the
integrity of the Company’s financial reporting to
shareholders. Read more on pages 96-103.
Cyber Security & Information Technology
Sub-Committee
This is a sub-committee of the Audit Committee.
The role of the Committee is to oversee Group
cyber-security and IT matters.
Nomination Committee
The Nomination Committee is responsible for
reviewing the composition of the Board to
ensure its members have the right skills and
experience to implement the strategy of the
Company. Read more on pages 94-95.
Remuneration Committee
The Committee’s key responsibility is to
determine and apply the Remuneration Policy to
ensure it promotes the delivery of the Group’s
strategy. Read more on pages 104-123.
Executive Board
The Executive Board is led by the Chief Executive and comprises: the Finance Director, the HR Director, the Managing Director of Client Services, the
Customer Experience Director, the Managing Director of Card Services, the General Counsel and Head of Compliance, the Chief Technology Ocer; the
Sales & Customer Life cycle Director, the IT Service & Operations Director; the Client Services Director; the Corporate Aairs & Marketing Director, the Head
of Corporate Finance, the Retail Propositions and Partnerships Director, the Parcel Services Director, the Managing Director of Love2Shop and the Finance
Director of Love2Shop. 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.
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
• Handepay Limited
2
• Merchant Rentals Limited
3
• RSM 2000 Limited
4
• Park Card Services Limited
5
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 control on ESG
and hears progress reports from the ESG Working Group
(a working party of the Executive Board comprising the
Finance Director, the HR Director, the Head of Risk and
Internal Audit, the Corporate Aairs and Marketing Director,
the Company Secretary and others to progress ESG matters
and TCFD Reporting through regular meetings). The Group
met throughout 2022–23 and progressed various aspects
on TCFD and ESG that were considered and approved by the
Executive Board and Group Board. The ESG Working Group
monitors performance against targets throughout the year
and reports performance to the Executive Board and Board.
Market Disclosure Committee
This Committee oversees the disclosure of
information by the Company to ensure that
it meets its obligations under the Market
Abuse Regulations. Its members are the
Chief Executive, Finance Director, Company
Secretary and the General Counsel and Head
of Compliance.
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 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 and also an authorised payment institution regulated by the FCA with permission to provide regulated payment services under the Payment Services Regulations 2017.
5 This is an Authorised Electronic Money Institution regulated by the FCA with permissions to issue electronic money (e-money) and provide payment services.
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90 PayPoint Plc Annual Report 2023
Induction
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 was carried out this year
following the appointment of Guy Parsons and feedback provided to the Chair.
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 aect 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 risks, IT and outsourcing and legal and regulatory aspects were covered and
a financial crime and anti-money laundering workshop was also held.
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.
Insurance
The Company maintains appropriate insurance cover in respect of legal action against the Directors.
Conflicts of interest
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 conflict of interest. Guy Parsons was asked to continue
serving as an executive director of Park Card Services Limited temporarily following the acquisition of
Appreciate Group Plc to provide continuity whilst a new, PayPoint aligned, post acquisition governance
framework is implemented. He will step down when Rob Harding is appointed to the role which is
expected to take place in August 2023. His role in Park Card Services is unremunerated and the Board
considers that no conflict of interest exists and he remains independent in character and judgement.
A register of conflicts of interest is maintained by the Company Secretary. No material conflicts were
reported by the Directors during the year.
Meetings
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 that may arise.
Two strategy sessions are also held each year, the first in September followed by a session in February.
The Board is updated on progress against the strategic plan and any new initiatives to grow and develop
the PayPoint Group.
The Chairman sets the agenda for the Board and ensures that adequate time is available for discussion of
all agenda items. He ensures informed decisions are reached in an eective 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 2023.
Strategy and business review
• Two scheduled strategy sessions followed by progress reviews throughout the year.
• Regular business and performance updates across all divisions.
• Divestment of Snappy Shopper, acquisition of Appreciate Group Plc and investment in OB Connect.
• Received regular updates with respect to the acquisition of Appreciate.
Internal control and risk management
• Assessed the IT infrastructure and cyber risks generally and specifically.
• Assessed the eectiveness 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 aect the business, financial condition
or operations of the Group.
Financial
• Approved half-year and full-year financial statements and quarterly trading updates.
• Approved dividends paid to shareholders during the financial year ended 31 March 2023.
• Reviewed management presentations to analysts for the full and half-year results.
• Considered and approved the plan for the financial year ending 31 March 2024.
• Reviewed Group forecasts and scrutinised the built-in risks and opportunities.
• Received monthly management accounts.
• Received management reports.
Corporate Governance Report continued
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Financial statements Shareholder information91 PayPoint Plc Annual Report 2023 Strategic report Governance
Governance
• Approved the Notice of Annual General Meeting.
• Reviewed and approved the Board policy on Diversity and Inclusion.
• Reviewed investor feedback from the full and half-year roadshows.
• Approved the Modern Slavery Statement.
• Approved scope 1, 2 & 3 GHG reduction targets.
• Approved Net-zero targets.
• Considered the feedback received from the employee fora when making decisions regarding working
patterns, engagement surveys and ESG.
• Carried out an internal 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
• Reviewed the Group health and safety reports.
• Annual people update delivered by the HR Director in January of each year.
• Received regular updates on employee forum matters from Gill Barr, Non-Executive Director, the
appointed Board representative for the employee forum.
• Reviewed the PayPoint Gender Pay Gap report and approved the commitments and actions therein,
prior to publication of the report.
• Reviewed proposals to support employees with the cost of living.
• Discussed the composition of the Executive Board and reviewed succession planning.
Division of roles and responsibilities
There is clear and eective division of roles and responsibilities of the Board as shown opposite:
Board leadership
Chairman – Giles Kerr
Giles Kerr is responsible for the eective 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 sucient time and
consideration are 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 eective and complementary Board, and to facilitate the appointment of eective
and suitable members and Chairs of Board Committees.
• Ensuring eective communication with shareholders led by the Chief Executive and ensuring that
members of the Board develop an understanding of the views of major investors.
• Meeting a number of key investors.
• Promoting the highest standards of integrity, probity and corporate governance at Board level and
throughout the Group.
Running the business
Chief Executive – Nick Wiles Finance Director – Alan Dale
Nick Wiles is responsible for running the Group’s
business and for proposing and developing the
Group’s strategy and overall commercial objectives.
He leads the Executive Board, the responsibilities
of which are set out on page 89. 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 Chairman is alerted to
forthcoming complex, contentious or sensitive
issues aecting the Group.
• Providing information and advice to the
Chairman in respect of succession planning
for membership of the Executive Board.
• Leading the communication programme
with shareholders.
• Acting as Director of various subsidiaries
of the Group.
Alan Dale 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. Alan is also a Chair and Director of
various subsidiaries of the Group and a member of
the ESG Working Group. He also acts as Consumer
Duty Champion.
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92 PayPoint Plc Annual Report 2023
Constructive challenge and independent oversight
Senior Independent Director – Rakesh Sharma Independent Non-Executive Directors –
Gill Barr, Rosie Shapland, Ben Wishart
and Guy Parsons
Rakesh Sharma supports the Chairman in his role
by acting as a sounding board for the Chairman
and a trusted intermediary for other Directors in
resolution of any significant issues that may arise.
His other main responsibilities include:
• Chairing the Nomination Committee when it is
considering succession to the role of Chairman
of the Board.
• Chairing the Remuneration Committee.
• Meeting with the Non-Executive Directors at
least once a year to appraise the Chairman’s
performance and on such other occasions
as are deemed appropriate.
• Being available to shareholders if they have
concerns which contact through the normal
channels of the Chief Executive or Finance
Director has failed to resolve or for which such
contact is inappropriate.
• Having sucient contact with major
shareholders to obtain a balanced understanding
of the issues and concerns of such shareholders.
The Independent Non-Executive Directors bring
a strong independent element to the Board and
provide constructive challenge and support
to strategic and other matters addressed by
the Board. 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 Chairman held meetings
with the Non-Executive Directors without the
presence of the Executive Directors. There were
no unresolved concerns about the running of
the Company.
Corporate Governance Report continued
Board support
Interim Company Secretary – Brian McLelland
Brian was appointed as Interim Company Secretary
to the Board and all its Committees in January
2022. He provides advice and assistance to the
Board to ensure good governance practices
and compliance with company law, Listing Rules,
Disclosure Guidance and Transparency Rules
and the Market Abuse Regulations. His other
responsibilities include:
• Supporting the Board and Committee Chairs in
setting the agendas and ensuring 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 internal Board and Committee
evaluations at the request of the Chairman.
• Membership of the Market Disclosure
Committee of the Board.
• Acting as secretary to the subsidiaries of
the Group.
• Membership of the ESG Working Group.
Accountability
Financial and business reporting
Please refer to the following pages of this annual report for information on how the Board has carried out
the financial and business reporting obligations as stipulated under the Code:
• Page 127 for the Board’s responsibility statement setting out the steps taken to present a fair,
balanced and understandable assessment of the Company’s position and prospects.
• Pages 18 to 36 for the strategy and business model which explains how the Company generates and
preserves value over the longer term and the strategy for delivering the objectives of the Company.
• Page 125 for the statement that the financial statements have been prepared on a going
concern basis.
Risk management and internal control
The Board has overall responsibility for establishing and maintaining sound risk management and internal
control systems and the monitoring of these systems to ensure that they are eective and fit for
purpose. The Audit Committee provides support to the Board in this regard and oversees the monitoring
process. Further information on the risk management and internal control system is set out in the Risk
Management Report on page 61.
The Board has carried out a robust assessment of the nature and extent of the emerging and principal
risks facing the Group and how these risks could aect the business, financial condition or operations of
the Group. The explanation of these principal risks including how they are being mitigated can be found
on pages 62 to 68 and a statement on how the Directors have assessed the prospects of the Group
taking into account the current position and principal risks is on page 69.
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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 104 to 124.
Engagement with stakeholders
In its decision-making, the Board has regard to each Director’s duty to promote the success of the
Company on behalf of the Company’s stakeholders, to foster the Company’s relationships with its
people, shareholders, convenience retailer partners, SMEs, consumers, clients and local communities and
to consider the eect of the principal decisions taken by the Company during the financial year on the
Company’s stakeholders. For more information see pages 51 to 52.
Engagement with and feedback from our people across the business is vital. This year the employee
forum continued to provide feedback on cost of living pressures, the results from the employee
engagement survey, the conditions of the working environment 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 Chief Executive and the Senior Independent Director
attended meetings of the employee forum to discuss operations, strategy and 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 an ideal 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 investors.
The Board acknowledges the importance of an open dialogue with its institutional shareholders and
welcomes engagement from private investors. Meetings are held with investors throughout the year both
at their oces and in the form of site visits to PayPoint’s operations. The Senior Independent Director is
available to address any unresolved shareholder concerns.
Brian McLelland
Interim Company Secretary
27 July 2023
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94 PayPoint Plc Annual Report 2023
Nomination Committee Report
“A key area of focus
has been on succession
planning for the Board,
Executive Board and
management to ensure
we have the right pipeline
of talent coming through
the business.”
Giles Kerr
Chairman, Nomination Committee
Nomination Committee responsibilities
The Committee’s key role is to ensure that the Board
has the appropriate skills, knowledge and experience
to operate eectively 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 Company. The Committee identifies and
recommends to the Board candidates to fill Board
vacancies based on merit and objective criteria, and
ensures that appointment processes are formal,
rigorous and transparent. The Committee also oversees
the development of a diverse pipeline for succession.
The Chairman invites the Chief Executive to attend its
meetings and the HR Director 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.
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 2023.
The Committee met five times during the year. The key areas of
focus included the:
• Review of the structure and development of the Board and the
Executive Board.
• Review of the result of the 2022 internal performance evaluation.
• Approval of the report of the Committee for inclusion in the 2023
annual report and accounts.
• Review of the Board’s policy on diversity, equity and inclusion.
• Annual review of the Directors’ length of service.
• Annual review of the Directors’ conflicts of interest register and
number of external directorships held.
• Annual review of its terms of reference.
• Appointment of Rob Harding as Chief Financial Ocer
succeeding Alan Dale who is retiring.
• Appointment of Guy Parsons as Non-Executive Director.
During the year, a review of the training programme for directors
and succession planning was covered at a meeting of the Board
of Directors.
Following each Committee meeting, a summary of the
Committee’s activity is provided to the Board together with
any recommendations.
Membership and attendance
Attendance at meetings
during the year
Current members Date appointed as member Eligible to attend Attended
Giles Kerr (Chairman) 20 November 2015, assuming
chairmanship in May 2020 5 5
Gill Barr 1 June 2015 5 5
Guy Parsons
1
23 March 2023 1 1
Rosie Shapland 2 October 2020 5 5
Rakesh Sharma 12 May 2017 5 5
Ben Wishart 14 November 2019 5 5
1 Guy Parsons attended one Nomination Committee of the financial year upon his appointment as of 23 March 2023.
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Responsibility has been delegated to our HR Director for the
operation of the diversity and inclusion policy across the rest of the
Group and ensuring its maintenance and review. Eorts to increase
diversity in the senior management pipeline towards Executive
Board positions continues to be supported, and the development of
diversity in senior management roles within the Group is encouraged.
As at the date of this report, PayPoint Plc continues to have two
female members on the Board who represent 25% of the Board
members. The percentage of female members of the Board declined
from last year due to the appointment of Guy Parsons on 23 March
2023 following the acquisition of Appreciate Group. The Board has
appointed a male Chief Financial Ocer (“CFO”), Rob Harding, who
will take over from Alan Dale later in the year. Teneo People Advisory
(Teneo”) were selected to carry out the search.
Teneo are committed to DE&I and their work is 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 Board is
committed to making progress towards achieving the FCA targets
on gender diversity and has approved the appointment of a further
female Non-Executive Director to the Board and will engage with
executive search firms in a manner which enhances opportunities
for diverse candidates to be considered for appointment. The Board
will also consider female appointments to the senior Board positions
identified by the FCA above, at the next available opportunity.
PayPoint Plc meets the targets set out in the Parker Review and
the FCA in respect of ethnic diversity on UK boards.
During the year the Board received a presentation from Teneo
(executive search consultants) to provide feedback on the CFO
recruitment process and to discuss market trends, opportunities
and challenges in the recruitment of senior executives and
non-executives. Discussion occurred on diversity, hybrid
working, senior employment retention and succession planning.
For more information on our diversity, equity and inclusion policy
please refer to page 52.
Succession planning
We have succession planning in place for the Board and Executive
Board to ensure we have the right pipeline of talent coming through
the business to support the future needs of the Group.
Board changes
I am delighted to welcome Rob Harding to the Board. Rob is a
Chartered Accountant with more than 25 years’ experience across
financial services and is currently Chief Financial Ocer at De La Rue
Plc. Rob was chosen following an extensive external search process
conducted by Teneo People Advisory (“Teneo”). Rob will replace
Alan Dale who is retiring and I would like to express my gratitude for
Alan’s contribution to the company.
The Board has also been strengthened by the appointment of
Guy Parsons. Formerly Executive Chairman of Appreciate Group plc,
Guy also served as CEO of Travelodge and easyHotel plc and was a
Non-Executive Director at Yorkshire Building Society.
Diversity
The Board’s policy on diversity, equity and inclusion, 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 where everyone can
learn, grow and shine. The Board policy addresses the specific
requirements of the UK Corporate Governance Code in relation to
the Board and the recommended targets set out by the FCA and
Sir John Parker. The targets are:
• At least 40% of the Board should be women.
• At least one of the senior Board positions (Chair, Chief Executive
Ocer (‘CEO’), Senior Independent Director (‘SID’) or Chief
Financial Ocer (‘CFO’) should be a woman.
• t least one member of the Board should be from a minority
ethnic background (which is defined by reference to categories
recommended by the Oce for National Statistics (‘ONS’)
excluding those listed, by the ONS, as coming from a white
ethnic background.
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 eective, taking account of
diversity in the manner described above.
Directors’ time commitment and length of service
All Directors are aware of the need to allocate sucient time to
PayPoint Plc in order to discharge their responsibilities eectively.
The Nomination Committee monitors attendance, Committee
composition, length of service and the extent of the Directors’
external commitments on an ongoing basis.
Ben Wishart’s first three-year term expired on 14 November 2022.
Following Ben’s agreement, the Committee recommended to the
Board that he be reappointed for a further three years. Following this
on the same basis the Committee also recommended to the Board
the reappointments of Rakesh Sharma and Rosie Shapland for a
further three year period.
All Directors who are not retiring, in accordance with the Code,
will be oering themselves for re-election or election, as relevant,
at the annual general meeting on 18 August 2023.
The terms and conditions of appointment of Non-Executive
Directors and the service contracts of Executive Directors are
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. Conflicts declared are recorded in our register of conflicts
of interest and this was reviewed and approved by the Committee
at its meeting in March 2023. 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 other directorships bring significant benefits
to the Board. All key external roles are given within the Director
biographies on pages 82-83. Non-Executive Directors are required
to obtain the approval of the Chairman 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.
The Nomination Committee Report was approved by the Board on
27 July 2023.
Giles Kerr
Chairman, Nomination Committee
27 July 2023
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96 PayPoint Plc Annual Report 2023
Audit Committee Report
“We have sought to
ensure the annual
report is fair, balanced
and understandable to
provide the information
necessary for shareholders
to assess the Company’s
performance, business
model and strategy.”
Rosie Shapland
Chair, Audit Committee
Audit Committee responsibilities
The Committee’s key role is to support the Board in
fulfilling its oversight responsibilities by reviewing and
monitoring 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 matters relating to
the relationship with the external auditor and in respect
of the internal control and risk management systems of
the business. Significant financial reporting issues and
judgements, together with any changes in accounting
principles and policies, 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
1
Attendance at meetings
during the year
Current members Date appointed as member Eligible to attend Attended
Rosie Shapland (Chair) 2 October 2020, becoming
Chair in December 2020 5 5
Gill Barr 1 June 2015 5 5
Guy Parsons 23 March 2023 1 1
Rakesh Sharma 12 May 2017 5 5
Ben Wishart 14 November 2019 5 5
1 The Audit Committee invites the Head of Risk and Internal Audit to attend and provide updates to the Committee at
each meeting covering the matters set out in the risk management section of this report. The external auditors KPMG
are also in attendance at each meeting along with the Chief Executive, Finance Director and Chair of the Board. Other
members of management attend as and when requested. The Company Secretary acts as secretary to the Committee.
The Committee has satisfied itself that the PayPoint Plc
2023 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 127.
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Financial statements Shareholder information97 PayPoint Plc Annual Report 2023 Strategic report Governance
particularly following the acquisition of Appreciate. Management
has enhanced the accounting policy and revenue note
disclosures to aid understanding of this important area.
• onsidered findings as set out in the reports from the
external auditor.
• onsidered and recommended to the Board the going concern
basis for preparation of the financial statements.
• onsidered 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 the
three-year period.
• Considered the disclosure in respect of the letters before
action and subsequent claims served by Utilita and Global-365
(as further described on page 181) relating to the matters
addressed by commitments made by PayPoint and accepted
by Ofgem in 2021 in resolution of its competition concerns.
• eviewed PayPoint’s treasury policy.
• pproved PayPoint’s annual tax strategy. Following the
acquisition of Appreciate, HMRC’s SAO regime now applies
to the enlarged PayPoint Group.
• Reviewed the results of the annual safeguarding audit
for Appreciate.
Internal audit
• ppointed Tutu Kamara in February 2023 to lead the Risk and
Internal Audit functions.
• onitored progress against the year’s audit plan.
• eceived copies of audit reports and assessed key findings and
implementation of recommendations.
• ssessed the audit universe and audit cycle.
• pproved the annual audit plan for FY2024.
• onitored resource requirements for internal audit, including
for Appreciate, and approved the annual internal audit budget
for FY2024.
• eviewed and approved the internal audit charter.
• pproved arrangements for including Appreciate into the
annual audit plan, including bringing their Internal Audit function
in-house.
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
2023. 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 auditors, KPMG LLP.
The Committee met five times during the year, with meetings timed
to coincide with the financial and reporting cycles of the Company.
We also met on 18 May to consider progress with the year end
financial reporting and the audit, 29 June 2023 to review the 31
March 2023 annual report and accounts and the findings of the
external auditor, and 27 July 2023 to consider the final report from
the external auditor and to recommend the Annual Report and
Accounts to the Board prior to approval. In addition, the Committee
met with both the Company’s external auditor and Head of Risk and
Internal Audit during the year without management being present.
The Company completed the acquisition of Appreciate Group plc
(“Appreciate”) on 28 February 2023, following FCA approval.
This created significant additional work for the Group’s finance team
and our auditor, in finalising the year-end reporting. Consequently,
we took the decision to extend our reporting timetable for six weeks
to enable the work for the enlarged group to be completed. As
detailed on pages 99 to 100, the Committee has had to consider a
number of accounting judgements and estimates, both in relation to
the acquisition accounting itself and to our segmental reporting and
areas of accounting specific to Appreciate. In the period since our
previous report the work undertaken by the Audit Committee was
as follows:
Financial reporting
• eviewed the annual and interim financial statements, including
the impact of the February 2023 acquisition of Appreciate.
• onsidered significant accounting policies, financial reporting
issues, judgements and estimates, most notably in relation to the
acquisition of Appreciate.
• he Committee continued to focus on revenue recognition
during the year due to the level of transactions, the complexity
of the systems and the number of dierent revenue streams,
Risk management and internal controls
• arried out a review of the Group’s insurance coverage and
approved amendments to include Appreciate.
• pproved various policies including (but not limited to)
whistleblowing and anti-bribery and corruption.
• onsidered any reported frauds and any concerns raised via the
Company’s whistleblowing process.
• eviewed the Company’s risk management framework and any
changes thereto prior to approving the principal and emerging
risks for inclusion in the annual report.
• pproved proposed project plans for compliance with the HMRC
SAO regime for the year ended 31 March 2024, to ensure it
incorporates appropriate processes and controls.
• onsidered quarterly updates from the Group’s Compliance
Ocer which provide an overview of compliance within the
Group’s regulated entities.
• eceived reports from the Chairman of the Cyber Security and
Information Technology Sub-Committee. See page 89 for details
on the role of the Sub-Committee.
Governance
• onsidered quarterly updates from the Head of Risk and Internal
Audit on the Group risks.
• arried out an annual review of the Committee’s terms
of reference.
• arried out reviews of the Board Delegated Authority.
• Kept up to date with developments following the BEIS
consultation on restoring trust in audit and corporate
governance, including the proposed changes to the Combined
Code, particularly in relation to internal controls.
The Audit Committee and Cyber Security and IT Sub-Committee
support the Board with monitoring risk management and internal
control systems and reviewing their eectiveness. Internal controls
are used to mitigate risks faced by the Group within the risk appetite
set by the Board in order to safeguard shareholders’ investments
and Group assets. The Audit Committee reviews eectiveness 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 62. A standard risk assessment
methodology is applied across the Group to evaluate gross and
residual risk and comparing residual risk against risk appetite.
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98 PayPoint Plc Annual Report 2023
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 62 to 68. For the legacy PayPoint Group the
following key procedures and monitoring processes are in place to provide eective internal control:
• he 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.
• here 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.
• he 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.
• n 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.
• uring 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 eectively
during the year. Attestation details are reported to the Audit Committee.
• he Audit Committee reviews risk appetite for principal risks and compliance with risk appetite is
monitored through the Group’s risk assessment processes.
• he Audit Committee reviews key risks presented by the Head of Risk and Internal Audit at each
meeting to ensure management eectively implements preventative and detective controls to
monitor and mitigate risk.
• he Cyber Security and IT Sub-Committee reviews key IT and cyber risks to ensure the Group’s IT
function eectively implements preventative and detective controls to monitor and mitigate risk.
• The Chair of the Sub-committee reports to the Committee aer 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 eectiveness 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.
For Appreciate, it has not been possible for the Committee to perform a full assessment of the operating
eectiveness of the risk management framework and internal controls, due to the timing of the
acquisition. However, the Head of Risk and Internal audit has reported to the Committee on the review of
Appreciate that she and her team have completed. This covered their review of:
• The existing Appreciate risk management and internal controls framework, which has largely remained
in place since acquisition and included risk identification and mitigation procedures.
• The internal audit reports completed in FY2023 by KPMG and the follow up of their
recommendations, which are now reported to the Committee at each meeting.
• The policies and procedures in place and the delegated authorities.
• The IT and information security governance framework.
The Committee has also discussed the findings of the Company’s external auditor, arising from their
work over the acquisition and year-end balance sheets of Appreciate and the loss for the one-month
period since acquisition. From the above procedures, no significant control failings or weaknesses
were identified.
As part of the ongoing integration, the Appreciate functional areas are being absorbed into the
equivalent PayPoint functions, to ensure policies and supporting frameworks and procedures are applied
consistently across the enlarged Group.
External audit
• greed the scope of the 2023 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 2023 are given on page 161
note 8 to the financial statements.
• eceived the external auditor’s plan for the financial year, reviewing materiality thresholds and areas
of risk where the auditor would focus their work, including the updated plan following the acquisition
of Appreciate.
• eviewed the eectiveness 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.
• eviewed the robustness of the audit process and reviewed the 2022 Audit Quality Review Report,
regarding the overall quality of audit work provided by KPMG for listed companies.
• eviewed 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 2023, 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.
Audit Committee Report continued
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Financial statements Shareholder information99 PayPoint Plc Annual Report 2023 Strategic report Governance
Significant financial judgements and critical estimates for the year ended 31 March 2023 How the Audit Committee addressed these significant financial judgements and critical estimates
Business combinations: recognition of goodwill and intangible assets
(Critical estimate)
On 28 February 2023, PayPoint acquired Appreciate Group plc (“Appreciate”).
Accounting for each business acquisition requires an assessment of the existence, fair value and
expected useful economic lives of separable intangible assets such as brands, customer relationships
and developed technology assets at the date of acquisition.
The fair value attributed to intangible assets arising on acquisition is recognised in accordance with
IAS 38 Intangible Assets and is based on a number of estimates, including the long-term revenue
growth rate of the related business and discount rate. In forecasting future revenues, management have
considered the accounting policy for revenue recognition for each of the relevant revenue streams.
Management have assessed the useful economic lives of each asset based on a number of factors
including the expected usage of the asset, typical product life cycles for the asset, 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.
As a result of the acquisition the Group identified £30.3 million of acquired intangible assets (net of
deferred tax) and £59.8 million of goodwill. The Committee reviewed and approved management’s
paper on the acquisition accounting supported by a report from a third-party valuation specialist.
The Committee considered and discussed the valuation methodology for the acquired assets, with
particular focus on the intangible assets arising on acquisition, brands and customer relationships,
including the revenue recognition policy applied to the dierent revenue streams.
The Committee challenged management on the key assumptions that drive the valuation of acquired
assets; for customer relationships, the expected future income streams and discount rate; for brands,
the royalty rate and for developed soware, the cost to recreate. The Committee have also reviewed
and challenged management’s assessment of useful economic lives.
The Committee is satisfied that the acquisition accounting and related disclosures are appropriate.
Recognition of cash and cash equivalents (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 Appreciate, it also holds monies in trust on
behalf of agents, customers, cardholders and redeemers.
A critical judgement in this area is whether clients’ funds, retailer partners’ deposits and monies held in
trust are recognised in the statement of financial position. 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.
(c) The identification of the holder of those funds at any point in time.
(d) Whether the Group bears the credit risk.
The Committee reviewed and approved the accounting policy on cash and cash equivalents and
considered management’s approach to the treatment of monies held in trust following the acquisition
of Appreciate.
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.
Following the Appreciate acquisition, a new caption was introduced on the face of the statement of
financial position, Monies held in trust. The Committee reviewed and agreed with management’s decision
to categorise cash and cash equivalents and monies held in trust separately. This was aer considering
the legal status of the trust, who has access to the interest and the terms and conditions around
movement of funds.
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100 PayPoint Plc Annual Report 2023
Significant financial judgements and critical estimates for the year ended 31 March 2023 How the Audit Committee addressed these significant financial judgements and critical estimates
Valuation of the goodwill relating to cash generating units (Critical estimate)
In the current and prior years PayPoint has acquired five businesses. An annual impairment review is
required on the carrying value of goodwill relating to each of the resulting five cash generating units
that have been identified.
Impairment models have been built which consider future cash flows based on the Board-approved Plan
and these are discounted to a net present value for comparison to the carrying value.
The Board-approved Plan forecasts cash flows for the initial three years and then appropriate
assumptions are applied to forecast a further two years, before prudent long-term growth rates are
applied to the fih year to calculate terminal values. Sensitivity analysis has been applied to determine
the impacts of reasonably possible changes in the assumptions used for the value.
The most sensitive of these models was the Handepay CGU. Key input assumptions into the model were
the discount rate and sales growth rates applied.
For the Love2Shop CGU management decided that given the proximity of the timing of the
acquisition to the year end, fair value less costs of disposal was an appropriate alternative measure
of recoverable amount.
The Committee reviewed and approved a paper setting out management’s impairment assessments for
the carrying values of goodwill, acquired intangible assets and investments associated with
the relevant acquisition.
The Committee has challenged the key assumptions that drive the models for the impairment tests
including specific growth drivers for each business, discount rates applied and long-term growth rates.
As part of the process the Committee requested the calculation of the appropriate discount rates to be
used in each model, to be supported by third-party valuation specialists. These rates were reviewed and
challenged by the Committee.
Having challenged and discussed the methodology and assumptions set out in the paper for the
impairment tests, the Committee is satisfied that the valuation of CGU recoverable amounts, impairment
headroom and related disclosures of key sensitivities are appropriate.
The Audit Committee concurs with management’s decision to use an alternate valuation technique for
the Love2Shop CGU.
Audit Committee Report continued
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Financial statements Shareholder information101 PayPoint Plc Annual Report 2023 Strategic report Governance
Other financial reporting matters for the year ended 31 March 2023 How the Audit Committee addressed these financial reporting matters
Pensions (defined benefit scheme from Appreciate acquisition)
Following the acquisition of Appreciate, PayPoint now has to account for a defined benefit pension
scheme which includes a judgement on the recognition of the current surplus, while estimates are
required for the valuation of the pension assets and liabilities.
The Committee reviewed and approved a paper setting out management’s accounting for the defined
benefit pension scheme in line with IAS19, as at the year-end and for the one-month period ended on
that date, and at the date of the Appreciate acquisition. The valuations were supported by reports from
a third-party valuation specialist.
The Committee agrees with management’s conclusion that the pension surplus can be recognised in
full at the year-end and acquisition dates and estimates used by management are in line with the advice
provided by the third-party valuation specialists in this area.
Cash Generating Units (CGU’s) for Love2Shop
With the acquisition of Appreciate, management has considered the appropriate approach for CGUs
for the Love2Shop business for the purposes of allocating the goodwill on acquisition and for future
reporting. Love2Shop operates through several channels to provide its products and services.
Management has performed a detailed review considering the requirements of the accounting standards,
previous external reporting by Appreciate, the acquisition business case, current management reporting,
how business performance is measured and decisions taken both at divisional and Group levels.
Management’s conclusion is that the entire Love2Shop business should be considered a single CGU as
cash inflows from its various sales channels 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 Love2Shop segment.
The Committee reviewed management’s assessment of Love2Shop’s CGUs. 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 business should be treated as one CGU.
Segmental reporting
The Group provides a number of dierent services and products. Prior to the acquisition of Appreciate on
28 February 2023, the dierent services and products provided by the Group did not meet the definition
of separate operating segments under IFRS 8.
The Group considers the Appreciate business to be a separate segment from the existing PayPoint
business, since discrete financial information is prepared and it oers dierent products and services.
Furthermore, the CODM reviews monthly internal management reports (including financial information)
for each of PayPoint (pre-Appreciate acquisition) and Love2Shop, to allocate resources and
assess performance.
The Committee considered management’s assessment of segmental reporting and the introduction of a
new segment. This included:
• A review of the information flow (internal reports) that the entity’s Chief Operating Decision Maker
(CODM) regularly reviews in allocating resources to segments and in assessing their performance.
• Reviewing historic Appreciate reporting and considering how the business will be managed
going forward.
• The proposed disclosure in the annual report.
The Committee agrees with management’s conclusion that there are two operating segments, one for
historic PayPoint, consistent with prior years, and one for the newly acquired Love2Shop.
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102 PayPoint Plc Annual Report 2023
Other financial reporting matters for the year ended 31 March 2023 How the Audit Committee addressed these financial reporting matters
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.
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 increased 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 draed by management.
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:
• dvise the Audit Committee on cyber and information security risks faced by the Group.
• ssess the adequacy of policies, resources and funding for cyber and information security.
• eview the Group’s cyber and information security breach response plan.
• eview cyber incident reports and assess the adequacy of proposed actions.
• nsure eective business continuity plans.
• versee cyber security training and awareness.
The Sub-Committee comprises two Non-Executive Directors: Rakesh Sharma and Ben Wishart as
Chairman of the Sub-Committee; the Finance Director, the Chief Technology Ocer (who is a member
of the Executive Board) and the IT & Service Operations Director (who joined the Executive Board in the
year). 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 eectiveness 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 2023,
the significant audit risks identified were: Appreciate purchase price allocation; Recoverability of
goodwill related to Handepay; Management override of controls; Handepay investment impairment
(Parent Company).
The Committee reviews and challenges the work undertaken by the auditor to test management’s
assumptions on these matters. An assessment of the eectiveness 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 eectiveness 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, and 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.
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When PayPoint acquired Appreciate, KPMG was providing Internal Audit services and BDO LLP was
providing risk consultancy services, including a risk management system. Due to their involvement in the
audits of the financial statements at the acquisition date and at the Group year end, they were required
to resign from providing these services.
As part of the audit planning process, the auditor provided a statement of confirmation of independence
to the Board and the Audit Committee, which confirmed that in their professional judgement KPMG was
independent within the meaning of regulatory and professional requirements and the objectivity of the
partner and audit sta remained unimpaired.
During the year the Committee tendered the Group’s external audit. Four firms were initially invited to
tender and in compliance with Ethical Standards, the firms invited to tender were informed that the main
focus of their remit was for the provision of audit services. A data room was provided and interested
firms were given wide access to the business, including meetings with members of the Board, Executive
Board and finance team personnel, in order to develop their audit approach, prior to presenting to a panel
comprising the Committee Chair, and certain members of the Executive Board.
Following this process, a recommendation based on quality, knowledge and experience and structure
of the team was made to the Board which then considered and approved the appointment of PwC as
auditor for the financial year ending 31 March 2024, subject to shareholder approval at the 2023 AGM.
KPMG will therefore not be appointed at the forthcoming AGM.
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 policy also covers the 70% cap on non-audit fees as prescribed by the FRC Revised Ethical
Standard 2019. It states that subject to prior approval by the Finance Director, the fees for permitted
non-audit services provided by the external auditor must not exceed a specified amount and must have
a cumulative annual total of less than 70% of the average audit fee over the three proceeding years.
The ratio of non-audit fees to audit fees paid to the auditor for the year was 3.1%, 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.
Risk management and internal control
The Board is responsible for establishing and maintaining the Group’s internal control framework
and regularly reviewing its eectiveness. The Board has delegated responsibility for reviewing the
eectiveness of risk management and internal controls to the Committee. The Committee performs
robust assessments of the risks which could significantly impact the Group’s performance, future
prospects and reputation.
The Company’s management of risks and its internal control framework are detailed on page 61.
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 eective controls and help protect the Group. Internal audit’s
responsibilities include delivering the annual audit plan, driving remediation of audit issues, assessing
eectiveness 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 raise concerns
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.
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’s 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 provided. Anti-bribery and corruption risk management is discussed
at Committee meetings.
The Audit Committee Report was approved by the Board on 27 July 2023.
Rosie Shapland
Chair, Audit Committee
27 July 2023
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104 PayPoint Plc Annual Report 2023
Directors’ Remuneration Report
'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
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 above. In addition to
the members of the Committee, the HR Director 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. Aer 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
1
Attendance at meetings
during the year
Current members Date appointed as member Eligible to attend Attended
Rakesh Sharma (Chairman) 12 May 2017 5 5
Gill Barr 1 June 2015 5 5
Giles Kerr 20 November 2015 5 5
Guy Parsons 23 March 2023 1 1
Rosie Shapland 2 October 2020 5 5
Ben Wishart 14 November 2019 5 5
1 Guy Parsons attended one Remuneration Committee meeting in the year ended 31 March 2023 following his
appointment on 23 March 2023.
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Financial statements Shareholder information105 PayPoint Plc Annual Report 2023 Strategic report Governance
• pproving the vesting of the below Board 2019 restricted share
plan awards.
• greeing the 2022 Restricted Share Plan awards.
• greeing the performance against targets and payout for the
2021/22 annual bonus.
• etting the performance targets for the 2022/23 annual bonus
and bonus deferral levels.
• pproving leaver treatments for relevant senior executives.
• greeing the remuneration package for Rob Harding as Chief
Financial Ocer.
• arrying out an internal evaluation of its performance and
reviewing its terms of reference.
Pay and performance
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 2022/23 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. Annual bonuses for the year have been awarded at 89%
of maximum, reflecting the delivery of a strong financial performance
with accelerated revenue growth across all three business divisions
and profit before tax at the top end of market expectations. This was
supported by the delivery of strategic objectives that have materially
enhanced growth opportunities for the current financial year,
particularly in card processing, Open Banking and digital payments.
No Executive Director deferred annual bonus awards are due to vest
in 2023 as a result of the Executive Board waiving their entitlement
to a bonus in respect of the year 2019/20 in light of the challenges
facing the business at that time due to Covid-19.
RSA awards granted in 2020 will vest in July 2023, subject to the
Committee being satisfied in respect of performance against the
discretionary underpin.
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
and is comfortable that remuneration for the year ended 31 March
2023 is appropriately aligned to the Company’s performance.
Discretion
No discretion has been exercised in respect of the year ended
31 March 2023.
Annual Statement
Dear Shareholders,
I am pleased to present our Directors’ Remuneration Report for
the financial year ended 31 March 2023 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 Directors’
Remuneration Report will be subject to an advisory shareholder vote at
the annual general meeting (‘AGM’) on 7 September 2023.
The report is divided into three sections:
• his Annual Statement of the Remuneration Committee
Chairman for the year ended 31 March 2023, which summarises
remuneration outcomes for the year ended 31 March 2023.
• he Directors’ Remuneration Policy – (the “Policy”), which presents
our proposed Remuneration Policy given that our current Policy,
originally approved by shareholders at the 2020 annual general
meeting, will shortly reach the end of its three-year life.
• he Annual Report on Remuneration, which provides further
detail on how the Remuneration Policy was implemented in the
year ended 31 March 2023 and how the proposed Policy will be
implemented in the year ending 31 March 2024.
The Directors’ Remuneration Report excluding the Policy will be
subject to an advisory shareholder vote at the 2023 AGM. The
proposed Policy, which is intended to last for three years from the
forthcoming AGM or until another Policy is approved in a general
meeting, will be subject to a binding vote at the same meeting.
Committee activities during the year
The Committee met five times during 2022/23. The main Committee
activities during the year (full details of which are set out in the
relevant sections of this report) included:
• pproving the 2021/22 Directors’ Remuneration Report.
• greeing Executive Director base salary increases from July 2022.
• eviewing and agreeing the salary review applied to the
workforce below Board level including the increases applied to
the Executive Board.
• arrying out a review and update of the Remuneration Policy for
approval by shareholders.
• ommunicating with and considering feedback from key
investors on the proposed Policy.
• pproving the release of the 2019 deferred bonus awards.
• onfirming the lapse of the 2019 Long-Term Incentive Plan
(‘LTIP’) awards due to the respective performance conditions
not being met.
Directors’ Remuneration Policy-Proposed changes
to the Policy
Following a review of the Policy, which is nearing the end of its three-
year life, and following consultation with major investors and investor
representatives, the following changes to the Policy will be proposed:
• Restricted Share Awards (RSAs) – A simplification of the vesting
profile for RSAs granted to Executive Directors. Under the current
RSA Policy, RSAs granted to Executive Directors vest over three
years (50% of awards), four years (25% of awards) and five years
(25% of awards) subject to an assessment of the discretionary
underpin. Once RSAs have vested, a holding period applies such that
any resulting shares, other than those sold to pay employee taxes,
may not be sold until at least five years from the grant date. However,
going forward, the Committee wishes to simplify the vesting
such that RSAs granted to Executive Directors aer the 2023
AGM will vest aer three years from grant (subject to satisfaction
of the underpin) with a two-year post vesting holding period.
No changes will be made to existing awards. Such a change will
simplify the approach going forwards, significantly reducing the
administration surrounding multiple vesting dates across multiple
awards, and will align with the approach to granting RSAs below
Board level. In addition, as evidenced during the recent search for
our incoming CFO, a three-year vesting with a two-year holding
period will more closely align PayPoint’s approach to evolving RSA
market practice.
• Pension Policy – The maximum value of pension provision in the
current Policy for current Executive Directors is 15% of salary.
However, noting that the Chief Executive has received, and the
incoming Chief Financial Ocer will receive, a workforce-aligned
pension provision from appointment, the 15% of salary Policy
maximum will be replaced by a requirement to oer workforce
aligned pension provision (which is currently 5% of salary) to
Executive Directors.
• Annual bonus – 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 (and as permitted under the
current Policy), the on-target bonus potential will be reduced to
50% of maximum in line with market norms.
• Introduction of ESG Performance Metrics – A widening of
potential performance metrics in respect of both the annual
bonus and RSA underpin to explicitly permit the operation of
ESG-based targets going forward to the extent that this is
considered appropriate.
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106 PayPoint Plc Annual Report 2023
Policy implementation for the year ending 31 March 2024
Noting the above, a summary of how the Committee intends to implement the new Policy for the year
ending 31 March 2024, subject to shareholder approval at the 2023 AGM, is as follows:
• Salary – Nick Wiles’ base salary will be increased by 3% to £498,623 from 1 July 2023, consistent
with the minimum increase applied to the general workforce. Rob Harding, the incoming Chief Financial
Ocer, will receive a salary of £320,000 from appointment with his first salary review date expected
to be 1 July 2024.
• Pension – The Chief Executive will continue to receive a 5% of salary workforce-aligned pension
contribution (with the incoming Chief Financial Ocer receiving the same).
• 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 and outturns
will be provided in the Directors’ Remuneration Report for the year ending 31 March 2024.
• RSAs – The Committee intends to grant the 2023 RSAs following the 2023 AGM at 75% of salary for
Nick Wiles and 62.5% of salary for Rob Harding. As detailed above, subject to shareholder approval of
the revised Policy, RSAs granted aer the 2023 AGM will normally vest aer three years, subject to
continued service and the Committee being satisfied in respect of performance against the underpin,
with a two year holding period. A specific reference to the delivery of the Company’s ESG strategy will
be added to the RSA underpin for 2023 RSAs onwards.
• Malus and clawback – Provisions will continue to operate for both the annual bonus, deferred bonus
and RSAs.
Consultation in respect of the new Policy
In formulating our proposed Policy, the Committee consulted with our largest (c.15) shareholders and the
main representative bodies. Feedback received from shareholders was considered in the development of
the final proposals and the Committee is grateful for the level of engagement received.
Conclusion
I hope you are supportive of our proposed Policy and the approach to Policy implementation for the year
ending 31 March 2024 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
Chairman, Remuneration Committee
27 July 2023
The Directors’ Remuneration Policy
Policy scope
The Policy applies to the Chairman, Executive Directors and Non-Executive Directors.
Policy duration
Given that the current Directors’ Remuneration Policy (approved at the 2020 AGM) will shortly reach the
end of its three-year life, a new Policy will be put to shareholders for approval at the 2023 AGM. Subject
to approval, the new Policy will apply from that date for a maximum of three years.
Changes from the current Policy
Following consultation with the Company’s major investors and the main representative bodies, the
Committee has concluded that the current Policy should continue to operate albeit with a small number
of proposed changes.
The Committee’s rationale for continuing to operate the Restricted Share Plan is as follows:
• he Committee favours the simplicity of Restricted Share Awards compared with LTIPs.
• ewards are much less volatile and therefore significantly more eective over time in respect of
retention and incentivisation.
• t achieves the desirable objective of internal alignment, given that the RSA is operated widely
below Board.
In addition, while the diculties of setting robust, three year performance targets during the pandemic
are behind us, the current market volatility and broader macro economic landscape make the setting of
robust three-year targets for incentive purposes challenging.
The proposed changes to the Policy are included in the summary table overleaf and set out below
as follows:
• Restricted Share Awards ('RSAs') – Under the current RSA Policy, RSAs granted to Executive
Directors vest over three years (50% of awards), four years (25% of awards) and five years (25% of
awards) subject to an assessment of the performance underpin. Once RSAs have vested, a holding
period applies such that any resulting shares, other than those sold to pay employee taxes, may not
be sold until at least five years from the grant date. However, going forward, the Committee wishes to
simplify the vesting such that RSAs granted to Executive Directors aer the 2023 AGM will vest aer
three years from grant (subject to satisfaction of the discretionary underpin) with a two-year post
vesting holding period. No changes will be made to existing awards.
• Pension Policy – A reduction to the pension policy from 15% of salary to a workforce-aligned
pension (currently 5% of salary) to reflect current and future practice.
• Annual Bonus – A formal commitment that should bonus potential be increased from 106% of salary
to a more market-aligned 150% of salary in the future (as permitted under the current Policy), the on-
target bonus potential will be reduced to 50% of maximum in line with market norms.
• Introduction of ESG Performance Metrics – In respect of both the annual bonus and RSA underpin,
the Policy will permit the introduction of ESG-based targets going forward.
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.
Directors’ Remuneration Report continued
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Financial statements Shareholder information107 PayPoint Plc Annual Report 2023 Strategic report Governance
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 below summarises our policy on each element of the remuneration package for Executive Directors.
Element and link to strategy Operation Opportunity Performance metrics
Fixed
Base salary
Takes account of personal
contribution and performance
against Company strategy.
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.
Pension
Provides market
appropriate benefits.
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.
Benefits
Provides market appropriate
benefits.
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.
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108 PayPoint Plc Annual Report 2023
Element and link to strategy Operation Opportunity Performance metrics
Variable
Annual bonus and Deferred
Annual Bonus Scheme ('DABS')
Rewards delivery of the Group’s
annual financial and strategic
goals and supports retention.
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
1
.
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.
Restricted share awards
Drives sustained long-term
performance, aids retention and
aligns the interests of Executive
Directors with shareholders.
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.
Shareholding guidelines
Encourages a long-term focus and
aligns the interests of Executive
Directors with shareholders.
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
2
.
200% of salary. N/A
All-employee share plans
Encourage share ownership
across all employees.
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.
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.
Directors’ Remuneration Report continued
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Financial statements Shareholder information109 PayPoint Plc Annual Report 2023 Strategic report Governance
Notes to the policy table
Payments from previous awards
The Company will honour any commitments entered into prior to the approval and implementation of the
Policy as detailed in this report. Executive Directors will be eligible to receive payment from any historical
share awards made.
Clawback (aka recovery) and malus (aka withholding) provisions
Clawback and malus provisions operate based on the following triggers:
• isconduct
• aterial misstatement
• rror in calculation
• erious reputational damage to the Company
• orporate failure
• nsolvency
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 o 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 sucient 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.
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.
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-o RSA awards are made to other employees below the Executive Board who
are critical to the success of the business.
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110 PayPoint Plc Annual Report 2023
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 Operation Opportunity Performance metrics
Fees
To attract and retain
Non-Executive Directors of
the highest calibre with broad
commercial and other experience
relevant to the Company.
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.
Directors’ Remuneration Report continued
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Financial statements Shareholder information111 PayPoint Plc Annual Report 2023 Strategic report Governance
Pay scenario charts
The charts below provide an illustration of the potential annual future reward opportunities for the
Chief Executive and Chief Financial Ocer, and the potential split between the dierent elements of
remuneration under four dierent performance scenarios: minimum, target, maximum and maximum with
share price.
Remuneration
(£’000)
£1,800
£1,200
£600
£0
£1,600
£1,000
£400
£1,400
£800
£200
Minimum –
£957,521
Minimum –
£551,000
Target –
£1,380,354
Target –
£822,360
Maximum –
£1,486,062
Maximum –
£890,200
Maximum
with share
price growth
– £1,673,045
Maximum
with share
price growth
– £990,200
61%
39%
31%
36%
27%
25%
42% 39% 35%
64% 42% 40% 35%
36%
33%
38%
22%
34%
20%
11%
25%
32%
22%
11%
Chief Executive Chief Financial Officer
Share price growthAnnual bonus RSAFixed pay
Assumptions:
• Base salary: As at 1/7/2023 (or date of joining if later).
• n approximated annual value of benefits.
• 5% of salary pension.
• 106% of salary maximum annual bonus (with target assumed to be 80% of the maximum).
• 75% of salary RSA for the Chief Executive and a 62.5% of salary RSA for the Chief Financial Ocer.
• hare appreciation of 50% for the RSA.
• or simplicity, the values of any SIP awards are excluded.
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 dierent
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 dierent 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.
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112 PayPoint Plc Annual Report 2023
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, the incoming Chief Financial
Ocer, 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 oce. 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 below 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
eective 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 eective date
of change of control.
Event Timing/vesting of award Calculation of vesting/payment
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 to reflect the
length of the vesting period served, although time
prorating may be disapplied.
Bad leaver Outstanding awards lapse. Not applicable.
Change
of control
Paid immediately on the
eective 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
Good leaver Continue until the normal
vesting date or vest
immediately, at the discretion
of the Committee.
Outstanding awards vest and the awards are prorated
to reflect the length of the vesting period served,
unless the Board decides otherwise.
Bad leaver Outstanding awards lapse. Not applicable.
Change
of control
Vest immediately on the
eective date of change
of control.
Outstanding awards vest at the eective date of
change of control, and the award is prorated for
the proportion of the vesting period served to the
eective date of change of control, 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 Eective date of letter
Unexpired term as
at 31 March 2023 Date of appointment Notice period
Gill Barr 2 June 2021 14 months 1 June 2015 One month
Giles Kerr 20 November 2021 19 ½ months 20 November 2015 One month
Guy Parsons 23 March 2023 35 months 23 March 2023 One month
Rosie Shapland 2 October 2020 6 months 2 October 2020 One month
Rakesh Sharma 12 May 2020 1½ months 12 May 2017 One month
Ben Wishart 14 November 2022 31 ½ 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 oce.
Directors’ Remuneration Report continued
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Annual Report on Remuneration
The following section provides details of how PayPoint’s Remuneration Policy was implemented
during the financial year ended 31 March 2023 and how it will be implemented for the year ending
31 March 2024. 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 HR Director,
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 £39,245 (excluding VAT).
Summary of shareholder voting
The following table shows the results of the binding vote on the Remuneration Policy Report at
the 24 July 2020 AGM and the advisory vote on the 2022 Annual Report on Remuneration at the
20 July 2022 AGM:
Remuneration Policy Remuneration Report
Total number
of votes
% of
votes cast
Total number
of votes
% of
votes cast
For (including discretionary) 45,225,049 87. 3% 51,711,637 98.7%
Against 6,565,202 12.7% 667,70 8 1.3%
Total votes cast
(excluding withheld votes) 51,790,251 52,379,345
Total votes withheld
1
315,310 3,537,958
Total votes cast
(including withheld votes) 52,105,561 55, 917, 303
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 2023 and the prior year:
Nick Wiles
£’000
Alan Dale
£’000
2023 2022 2023 2022
Base salary
1
481 470 307 300
Taxable benefits
2
61 36 14 15
Pension
3
24 23 15 15
Total fixed pay 566 529 336 330
Annual bonus
4
459 380 293 242
Long-term incentives
5
147 – 46 –
Other
6
2 2 2 2
Total variable pay 608 382 341 244
Total remuneration 1,174 911 677 574
1 A base salary increase of 3% was awarded to the Chief Executive and Finance Director in July 2022, 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 and permanent health insurance (Finance Director).
3 Pension during the year: the pension rate for Executive Directors was 5% of base salary, in line with the rate oered to the
wider workforce.
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 aer 3 years).
5 Long-term incentives reflects the value of Restricted Share Awards granted in 2020 which are due to vest in July 2023 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 2023 (£4.93).
6 SIP matching and dividend shares awarded in the period valued at the average share price calculated over three months to
31 March 2023 of £4.93 (2022: £6.35). 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.
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114 PayPoint Plc Annual Report 2023
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 2023 and the prior year:
Base fee
£’000
Committee Chair fees
£’000
Senior Independent
Director fees
£’000
Total fixed remuneration
£’000
Total Variable Remuneration
£’000
2023 2022 2023 2022 2023 2022 2023 2022 2023 2022
Chairman
Giles Kerr 169 165 – – – – 169 165 – –
Non-Executive Directors
Gill Barr 50 49 – – – – 50 49 – –
Guy Parsons
1
1 – – – – – 1 – – –
Rosie Shapland 50 49 9 9 – – 59 58 – –
Rakesh Sharma 50 49 9 9 6 6 65 64 – –
Ben Wishart 50 49 – – – – 50 49 – –
Total 370 361 18 18 6 6 394 385 – –
1 Guy Parsons was appointed as a Non-Executive Director on 23 March 2023.
Fees paid to Non-Executive Directors were increased by 3% from 1 July 2022. Non-Executive Directors do not receive any variable remuneration.
Incentive outcomes for the year ended 31 March 2023
Annual bonus in respect of 2022/2023 performance (audited)
The annual bonus for the year ended 31 March 2023 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 Nick Wiles Alan Dale
PayPoint segment profit before tax
1
64% of salary
46,000
(96.8% of target)
47,500
(100% of target)
49,000
(103.2% of target) 48,183
1
57% of salary
(89% of max)
57% of salary
(89% of max)
Net revenue 16% of salary
121,500
(96.8% of target)
125,500
(100% of target)
129,500
(103.2% of target) 124,990
12% of salary
(72% of max)
12% of salary
(72% of max)
1 The Group profit before tax value stated above is for the PayPoint segment and excludes exceptional items which do not reflect underlying performance.
Directors’ Remuneration Report continued
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Strategic targets:
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
Retailer relationships
Maximum value
5.3% of salary
Implement ‘opportunities to earn’ and cyclical retailer visits to enhance retailer relationships and build understanding of proposition leading to reduced churn.
Delivered: Opportunities to earn implemented along with cyclical RRM visits. Retention test and learn demonstrated value of dedicated resourcing leading to
increase in revenue from low/non transacting sites. Permanent team now created.
Assessment: Retailer relationships significantly enhanced. Payout 5.3% of salary (100% of maximum).
ESG
Maximum value
5.3% of salary
Deliver in year ESG commitments.
Delivered: The Committee noted strong progress in year in respect of retiring diesel company cars, installation of electric charging points, progress made
in development of a more energy-ecient terminal, real living wage implemented and 'welcoming everyone' approach embedded. See page 52 for more
information.
Assessment: Material ESG progress delivered. Payout 5.3% of salary (100% of maximum).
IT Service and Operations model
Maximum value
5.3% of salary
Strengthen operating model in IT Service & Operations to deliver improved monitoring and availability.
Delivered: Team restructured to created dedicated information security team, embed service resiliency and availability responsibilities into platform
engineering and strengthened leadership. Significant progress made with infrastructure projects resulting in improved availability across Postilion and the core
on premises infrastructure and network.
Assessment: IT Service and Operations model restructured and enhanced. Payout 5.3% of salary (100% of maximum).
Digital payments platform
Maximum value
5.3% of salary
Continue to enhance digital payments oering in order to generate additional revenue opportunities.
Delivered: Enhancements include a fully integrated Open Banking solution (with a prepayment solution for energy companies), APM capability being
added to the payment journey (Apple Pay and Google Pay), and an MVP proposition for charities with Gi Aid capability. Open banking also introduced
into platform (COP, AISP, and PISP). A number of opportunities won including EBSS energy schemes and pipeline of potential customers has grown and
diversified significantly.
Assessment: Significant progress made. Payout 5.3% of salary (100% of maximum).
Cards proposition
Maximum value
5.3% of salary
Continue to enhance cards proposition by launching a new cards terminal and adding a new service.
Delivered: New Android terminal launched, EPoS app piloted in March, Payfac discovery phase underway.
Assessment: Target met in full. Payout 5.3% of salary (100% of maximum).
Maximum value 27% of salary.
% of potential award 100% of max.
% of salary award 27% of salary.
Given the progress made in respect of retailer relationships, delivering ESG commitments, strengthening the IT Service & Operations model and enhancing the digital payments platform and cards proposition,
the above objectives have been assessed as achieved and the Remuneration Committee approved a payout of 100% of maximum of this part of the bonus award.
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116 PayPoint Plc Annual Report 2023
Total bonus awards
The above performance resulted in the following bonus awards for the year:
% of award Maximum Actual
PBT 60% 64% of salary 57% of salary
Net revenue 15% 16% of salary 12% of salary
Strategic targets 25% 27% of salary 27% of salary
Total 100% 106% of salary 95% of salary
(89% of max)
The Committee considers that the outcomes indicated above are reflective of the performance delivered over the year.
25% of the total bonus awarded to the Executive Directors will be deferred into shares which will vest aer three years from grant, subject to continued employment.
2020 RSA awards vesting
With respect to the RSA awards granted on 27 July 2020, 50% of the awards made to Nick Wiles are due to vest aer three years from grant on 27 July 2023, 25% aer four years from grant and 25% aer 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 July 2023 can be found in the table below:
Director
Interests held in 2020
RSA Vesting
Number of shares
due to vest (% of
award granted) Value
1
Nick Wiles 59,443 50% 29,721 (50%) £146,525
Alan Dale
2
9, 274 100% 9,274 (100%) £45,721
1 Value calculated based on the three-month average share price to 31 March 2023 of £4.93. In addition to this, dividend equivalents will be credited to shares under award to the extent they vest.
2 The RSA awards granted to Alan Dale were granted before his appointment as an Executive Director. These awards vest in full aer three years from grant on 27 July 2023 and are not subject to a post-vesting holding period.
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 sucient
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).
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The Committee considered a near-final assessment of the underpin as at 31 March 2023 and found no cause to reduce the vesting outcome. Details of the Committee’s assessment (which will be revisited just prior
to vesting) in respect of the 50% of the CEO’s July 2020 grant which is expected to vest in July 2023, are as follows:
Underlying performance Over the three-year vesting period:
• Net revenue has increased by 29% since 2021 with accelerated revenue growth across all three business divisions for the year ended March 2023.
• Profit Before Tax from continuing operations (excluding exceptional items) has grown by 36% since 2021 to £48.2 million for the year ended 31 March 2023,
at the top end of the range of market expectations.
Strategic delivery • 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. Highlights include:
– A renewed purpose, vision and values that clearly reflect the aspirations for the business and the culture required to deliver them.
– Delivery of a significant M&A agenda during the period with the disposal of PayPoint Romania and acquisitions of i-movo, Handepay & Merchant Rentals,
RSM2000 and Appreciate Group.
– Significant progress has been made in respect of the development of MultiPay, PayPoint’s channel-agnostic, multi-sector payments platform, supporting
integrated payments across cash, Direct Debit, card payments, Open Banking and support tools.
– PayPoint’s Retailer & SME network has grown to over 60,000, supported by a range of tailored propositions, including bill payments, card services, parcels,
ATMs, Counter Cash, eMoney and FMCG.
– The business has entered the new financial year in a materially enhanced position across the Group: a full-strength sales team delivering high conversion
rates; healthy pipelines for our FMCG and integrated payments propositions; a business-wide partnership philosophy yielding further revenue opportunities;
and a dynamic platform of innovative technology and solutions enabling integrated payments and commerce for our extensive base of clients, retailer
partners and SMEs.
Shareholder experience and windfall gains • PayPoint’s Total Shareholder Return (i.e. share price plus dividends) over the three years to 31 March 2023 was 0.2%. which is not considered to be reflective of
the strategic progress made.
• PayPoint’s ordinary reported dividend per share has grown from 32.2p to 37.0p since 2021 following the end of the additional dividend programme.
• On the basis that the share price is below the £5.93 grant price, there is no windfall gain as at the date of this report.
Scheme interests awarded in the year ended 31 March 2023 (audited)
RSAs
In the year under review, RSAs were granted on 10 June 2022 with a face value of 75% of salary for the Chief Executive and 62.5% of salary for the Finance Director. 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
1
Vesting profile Performance measures
Nick Wiles 75% of salary 61,842 £352,499 50% aer three years from grant,
25% aer four years from grant and
25% aer five years from grant
(a) continued service
(b) satisfactory individual performance
(c) a positive assessment of performance against the underpin
2
Alan Dale 62.5% of salary 32,894 £187,495
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 £5.70.
2 Underpin: The Committee must be satisfied that PayPoint’s underlying performance and delivery against its strategy and plans are sucient 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).
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118 PayPoint Plc Annual Report 2023
Board Changes
As per the announcements on 22nd September 2022 and 31 January 2023, Alan Dale informed the Board of his intention to retire from his position as Finance Director and Executive Director of the Company during
2023 and he will step down from the Board following the publication of PayPoint’s annual results, continuing as an employee until 31 December 2023 to ensure a thorough transition and handover.
In respect of Alan’s retirement arrangements, he will continue to receive his base salary, benefits and pension until cessation of employment on 31 December 2023, be entitled to participate in the annual bonus plan in
respect of the period worked and be treated as a good leaver in respect of his RSA and deferred annual bonus awards with awards vesting on the normal vesting dates, and in respect of the RSA, subject to time prorating.
He will not be eligible to receive an RSA in 2023. Details of Alan’s remuneration arrangements will be published at the point Alan steps down from the Board in accordance with section 430(2B) of the Companies Act 2006
and in next year’s Directors’ Remuneration Report.
As per the announcement on 31 January 2023, Rob Harding has been appointed as Chief Financial Ocer and Executive Director of the Company and will join in August 2023. A summary of the main elements of his
remuneration arrangements is as follows:
• Base salary – £320,000.
• Pension – 5% of salary per annum in line with the current workforce pension provision.
• Annual bonus – maximum bonus potential of 106%.
• RSA – Annual RSA award of 62.5% of salary with the first award to be granted as soon as practicable aer joining.
In addition, Rob will receive a buyout out in PayPoint Plc shares equivalent to the value of deferred share awards forfeited upon cessation of his previous employment. Details of the awards forfeited, and the terms of
the buyout award intended to mirror the value forgone, will be set out in the relevant RNS and in next year’s Directors’ Remuneration Report.
Payments to past Directors (audited)
Rachel Kentleton stepped down from her position as Finance Director in June 2020 and details of her termination arrangements were noted in the 2021 report. On 10 June 2022, her 2019 deferred annual bonus
awards vested and she received 6,908 shares with a gross value at vesting of £39,194. Her 2019 LTIP award granted in 2019 lapsed in full as a result of the threshold performance conditions not being met.
CEO pay ratio
The data shows how the Chief Executive’s single figure remuneration for the year ended 31 March 2023 (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 increase in the pay ratio since 2022 is driven by the increase in the annual bonus award and the vesting of the 2020 RSA award in 2023.
CEO single figure: £1,172,831
Year Method
25th percentile
pay ratio
Median
pay ratio
75th percentile
pay ratio
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
No components of pay and benefits have been omitted for the purpose of the above calculations. Option A was selected given that this method of calculation was considered to be the robust approach in respect of
gathering the required data.
The underlying quartiles for salary and total remuneration numbers for full-time equivalent UK employees are set out below. Note that the employee at the 75th percentile has a lower salary than the employee at
median because they work in a sales role with a higher proportion of variable pay.
Year
Salary Total pay and benefits
25th percentile Median 75th percentile 25th percentile Median 75th percentile
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
Directors’ Remuneration Report continued
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The data for the three employees identified has been considered and fairly reflects pay at the relevant quartiles amongst the employee population.
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 the average of all employees on a full-time equivalent basis
within the Company. The data in this table has been calculated based on a combined total of the values paid for both the Chief Executive and Finance Director roles as disclosed in the single total figure table above.
2020–2021 2021–2022 2022–2023
Base
salary/Fee Benefits
6
Annual bonus
Base
salary/Fee Benefits
6
Annual bonus
Base
salary/Fee Benefits
6
Annual bonus
Executive Directors
Alan Dale N/A
1
N/A
1
N/A
1
N/A
1
N/A
1
N/A
1
2.3% -1.33% 21.1%
Nick Wiles N/A
1
N/A
1
N/A
1
N/A
1
N/A
1
N/A
1
2.3% 43.4% 21.1%
Non-Executive Directors
Gill Barr 0% N/A
2
N/A
2
0% N/A
2
N/A
2
2.3% N/A
2
N/A
2
Giles Kerr 135.9%
3
N/A
2
N/A
2
N/A
1
N/A
2
N/A
2
2.3% N/A
2
N/A
2
Guy Parsons N/A
1
N/A
2
N/A
2
N/A
1
N/A
2
N/A
2
N/A
1
N/A
2
N/A
2
Rosie Shapland N/A
1
N/A
2
N/A
2
N/A
1
N/A
2
N/A
2
2.3% N/A
2
N/A
2
Rakesh Sharma 8.6%
4
N/A
2
N/A
2
N/A
1
N/A
2
N/A
2
2.3% N/A
2
N/A
2
Ben Wishart N/A
1
N/A
2
N/A
2
0% N/A
2
N/A
2
2.3% N/A
2
N/A
2
Employee population
5
0.5% -6.5%
6
100%
7
6.2% -3.3%
6
-0.3% 6.1% 5.3% 37.1%
1 Appointed to the role in year or prior year, so no full year comparison.
2 Non-Executive Directors receive fixed fees rather than salary and do not receive any variable pay.
3 Giles Kerr was appointed as Chairman from 20 May 2020 and his annual fee was increased to £165,000 p.a.
4 Rakesh Sharma was appointed as Senior Independent Director eective 20 May 2020 and receives an additional fee for this role.
5 Based on employees who were employed by PayPoint for the entirety of both financial years but excludes those who were promoted to a new role.
6 There have been no changes to taxable benefits oered but the cost of providing these has varied during the period.
7 No bonus payout was made to UK-based employees for FY2019/20.
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 2022 and
31 March 2023.
Total employee pay
expenditure
£’000
Distributions
to shareholders
£’000
2023 38,234 25,107
2022 34,076 23,096
% change 12% 9%
The 12% increase in employee pay expenditure includes one month of Appreciate Group. Excluding Appreciate Group, total employee pay expenditure increased by 8%.
Contents Generation – Page Contents Generation – Sub PageContents Generation – Section
120 PayPoint Plc Annual Report 2023
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
0
100
31 March 2013 31 March 201731 March 2014 31 March 201831 March 2015 31 March 201931 March 2016 31 March 2020 31 March 2021 31 March 2022 31 March 2023
PayPoint Plc FTSE 250 Index (excluding Investment Trusts)
Source: Datastream (a Refinitive product)
Chief Executive single figure of remuneration (£’000) 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Annual bonus payout (as % of maximum) 91% 88% 31% 64% 66% 71% 0% 100% 76% 89%
LTIP vesting (as % of maximum) 100% 0% 0% 0% 30% 100% 32% 0% 0% –
RSA vesting (as % of maximum) – – – – – – – – – 100%
Directors’ Remuneration Report continued
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Financial statements Shareholder information121 PayPoint Plc Annual Report 2023 Strategic report Governance
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 2023:
Shares held Shareholding guidelines
Owned outright
or vested
1
Unvested DABS and SIP awards
subject to holding period
2
Unvested RSA awards subject to
holding period and underpin
Current
shareholding
3
Guideline %
of salary
Guideline number
of shares
4
Met?
Gill Barr 2,595 – – – – – –
Alan Dale 14,284 19,067 71,882 23,080 200 125,355 No
Giles Kerr 7,500 – – – – – –
Guy Parsons 5,136 – – – – – –
Rosie Shapland – – – – – – –
Rakesh Sharma 4,270 – – – – – –
Nick Wiles 90,633 37,166 177,148 109,643 200 196,389 No
Ben Wishart – – – – – – –
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.
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 2023 of £4.93 has been used to calculate the holding relative to this guideline.
The market price of the Company’s shares on 31 March 2023 was £4.55 per share (31 March 2022: £5.82 per share) and the low and high share prices during the period were £4.55 and £6.52 respectively.
Directors’ interests in shares in PayPoint long-term incentive plans and all-employee plans
Long-Term Incentive Awards and Restricted Share Awards (audited)
Type of awards
Number of
shares at
31 March 2022
1
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 2023
Share price
at grant
£
Value of
shares awarded Date of grant Lapse/Release
Nick Wiles RSA 2020
1
59,443 – – – 59,443 5.93 352,497 27.07. 20 27.07.23–27.07.25
RSA 2021
1
55,863 – – – 55,863 6.31 352,495 13.08.21 13.08.24–13.08.26
RSA 2022
1
– 61,842 – – 61,842 5.70 352,499 10.06.22 10.06.25–10.06.27
Alan Dale
2
LTIP 2019
3
4,502 – – 4,502 – 10.50 47, 271 10.06.19 10.06.22
RSA 2020
1
9, 274 – – – 9,274 5.93 54,995 27. 07.20 27.07.23
RSA 2021
1
29,714 – – – 29,714 6.31 187, 495 13.08.21 13.08.24–13.08.26
RSA 2022
1
– 32,894 – – 32,894 5.70 187, 49 6 10.06.22 10.06.25–10.06.27
1 For RSAs to vest the Committee must be satisfied that PayPoint’s underlying performance and delivery against its strategy and plans are sucient 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).
2 The awards granted to Alan Dale in 2019 and 2020 were made prior to his appointment to the Board.
3 LTIP awards granted in 2019 lapsed as the TSR and EPS performance conditions were not met.
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122 PayPoint Plc Annual Report 2023
Deferred Annual Bonus Scheme
1
(audited)
Number of
shares at
31 March 2022
Number of
shares awarded
during the period
Number of
shares released
during the period
3
Number of
shares lapsed
during the period
Number of
shares at
31 March 2023
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
– 16,645 – – 16,645 5.70 94,876 10.06.22 10.06.25
Alan Dale
2
1,025 – 1,025 – – 10.50 10,763 10.06.19 10.06.22
7, 231 – – – 7,231 6.31 45,627 13.08.21 13.08.24
– 10,625 – – 10,625 5.70 60,562 10.06.22 10.06.25
1 The release of shares is dependent upon continuous employment for a period of three years from the date of grant.
2 The awards granted to Alan Dale in 2018 and 2019 were made prior to his appointment to the Board.
3 Alan Dale received 267 dividend shares on his exercised award with a value of £1,516.
Share Incentive Plan (audited)
Number of partnership
shares purchased at
31 March 2022
Number of matching
shares awarded at
31 March 2022
Number of dividend
Shares
1
acquired at
31 March 2022
Total shares at
31 March 2022
Number of partnership
shares
2
purchased
during the period
Number of matching
Shares
3
awarded
during the period
Number of dividend
Shares acquired
during the period
Dates of release of matching
and dividend Shares
4
Total shares at
31 March 2023
Nick Wiles 361 361 32 754 272 272 71 22.04.2025–22.03.2026 1,369
Alan Dale 997 997 320 2,314 271 271 179 22.04.2025–22.03.2026 3,035
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 £4.64 to £6.35).
3 Matching shares are ordinary shares of the Company awarded conditionally on a monthly basis during the period (at prices from £4.64 to £6.35).
4 The dates used are based on the earliest allocation of the matching shares.
Service contracts and exit policy
Executive Directors
Executive Director service contracts, including arrangements for early termination, are carefully considered by the Committee. The Chief Executive and Finance Director both have a rolling service contract requiring
12 months’ notice of termination on either side. In line with market practice, Rob Harding, the incoming Chief Financial Ocer, 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 oce. 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
Alan Dale 12 months 20 November 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.
Directors’ Remuneration Report continued
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Financial statements Shareholder information123 PayPoint Plc Annual Report 2023 Strategic report Governance
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
Start of current
three-year term
Unexpired term as
at 31 March 2023 Date of appointment Notice period
Gill Barr 2 June 2021 14 months 1 June 2015 One month
Giles Kerr 20 November 2021 19½ months 20 November 2015 One month
Guy Parsons 23 March 2023 35 months 23 March 2023 One month
Rosie Shapland 2 October 2020 6 months 2 October 2020 One month
Rakesh Sharma 12 May 2020 1½ months 12 May 2017 One month
Ben Wishart 14 November 2022 31½ 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 oce.
Implementation of Remuneration Policy for year ending 31 March 2024
Base salary
Current base salary levels, and those from 1 July 2023 (the normal salary review date), are as follows:
From 1 July 2023 From 1 July 2022 % increase
Nick Wiles
1
£498,623 £484,100 3%
Rob Harding
2
£320,000 – –
1 Nick Wiles’ salary will be increased by 3% in line with the minimum increase applied to the general workforce.
2 Rob Harding as been appointed Chief Financial Ocer and is due to commence his position in summer 2023. His salary at
commencement will be £320,000.
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, oered 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 2023/24 financial year and performance against the targets will be disclosed in next year’s
Annual Report on Remuneration.
RSA
RSAs to be granted in 2023 will be:
• set at 75% of salary for the Chief Executive and 62.5% of salary for the Chief Financial Ocer; and
• subject to shareholder approval of the remuneration policy, awards will vest aer three years from
the grant date, subject to continued employment, satisfactory individual performance and a positive
assessment of performance against the discretionary underpin (see below).
No shares may be sold until at least five years from grant, other than those required to settle any taxes.
For RSAs granted to Executive Directors in 2023 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 sucient 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).
Chairman and Non-Executive Director fees
Chairman and Non-Executive Director fees are as follows:
From 1 July 2023
1
From 1 July 2022
1
% Increase
Base fees
Chairman £175,049 £169,950 3%
Non-Executive Director £51,454 £49,955 3%
Additional fees
Chairman, Audit Committee £9,760 £9,476 3%
Chairman, Remuneration Committee £9,760 £9,476 3%
Senior Independent Director £6,471 £6,283 3%
1 A 3% 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 27 July 2023.
Rakesh Sharma
Chairman, Remuneration Committee
27 July 2023
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124 PayPoint Plc Annual Report 2023
Directors’ Report
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 15 on pages 165 to 168) are engaged in providing innovative services and technology
connecting millions of consumers with over 60,000 retailer partner and SME locations across multiple
sectors. The Strategic Report on pages 1 to 78 provides a review of the business, the Group’s trading for
the period ended 31 March 2023, key performance indicators and an indication of future developments.
Directors’ Report content
As required by the Companies Act 2006 and the Disclosure Guidance and Transparency Rule (‘DTR’)
4.1.8.R, the Directors’ Report for PayPoint Plc comprises these pages 124 to 126 together with
information in 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;
Year in Review; 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 and employee
engagement throughout the workforce
Responsible business,
Corporate Governance Report
S.172(1) Statement
Gender diversity Responsible Business
Business relationships, stakeholders and their
eect on decisions
Engagement with stakeholders and
S.172(1) Statement
Use of financial instruments and credit Financial Review and note 27
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 dier 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
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.
As at 31 March 2023:
Name of holder
Number of
ordinary shares
Percentage of
issued capital
Asteriscos Patrimonial and its group 18, 8 87, 911 26.03%
Liontrust Asset Management 7,606,699 10.48%
Schroder Investment Management 5,264,667 7. 26 %
Columbia Threadneedle Investments 5,166,552 7.12%
Brown Capital Management 4,506,212 6.21%
Premier Miton Investors 3, 0 07,427 4.14%
Credit Suisse Private Banking 2,724,535 3.75%
The following notification(s) have been received since 1 April 2023 up to 10 July 2023. Any subsequent
notifications can be found on our website: corporate.paypoint.com/investor-centre/announcements.
Name of holder
Number of
ordinary shares
Percentage of
issued capital
Asteriscos Patrimonial and its group 19,597,482 27.01%
Liontrust Asset Management 6,073,861 8.37%
Schroder Investment Management 5,452,146 7. 51%
Brown Capital Management 4,716,645 6.50%
Columbia Threadneedle Investments 4,412,166 6.08%
Credit Suisse Private Banking 3,591,035 4.95%
Premier Miton Investors 3, 0 07,427 4.14%
All notifications made to the Company under DTR 5 are published via a Regulatory Information Service
and made available on the Company’s website.
Share capital
As at 31 March 2023 72,563,234 ordinary shares of 0.03 pence each have been issued and fully paid-up and
are quoted on the London Stock Exchange. During the year ended 31 March 2023, 76,770 ordinary shares
were issued under the Company’s share schemes and 3,565,382 shares were issued following the acquisition
of Appreciate Group on 28 February 2023. 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 regard
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. Unless expressly specified
to the contrary in the Articles of Association of the Company, the Company’s Articles of Association may
be amended by a special resolution of the Company’s shareholders.
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Financial statements Shareholder information125 PayPoint Plc Annual Report 2023 Strategic report Governance
As at 31 March 2023, 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 20 July 2022, 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 £137,854 and to disapply pre-emption rights in respect of allotments of relevant securities up to an
aggregate nominal amount of £10,339 with a further £10,339 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 2023 annual general meeting, details of which are set out in the Notice of Annual
General Meeting on pages 185 to 187.
Directors
The names of the Directors at the date of this report and their biographical details are on pages 82 to
83. Their interests in the ordinary shares of the Company are on page 121. Directors are appointed and
replaced in accordance with the Company’s Articles of Association, the Companies Act 2006 and the Code.
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 2023 are set out on pages 138 to 145. An analysis of
risk is set out on pages 63 to 68, and of risk management on page 62.
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. These indemnities constitute qualifying indemnities
for the purposes of the Companies Act 2006 and remain in force at the date of approval of this report
without any payment having been made under them. The Company also maintains directors’ and ocers’
liability insurance which gives appropriate cover for any legal action brought against its Directors.
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.
The Company has a revolving term credit facility for £75 million and a £10.8 million term loan, which
expires on 11 February 2024, and a £36.0 million term loan which expires on 11 February 2026. 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 eect, alter or terminate on the change
of control of the Company, including compensation for loss of oce 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 (2022: nil). Details of the charitable donations
policy can be found within the Responsible Business section of the annual report on page 54.
Related-party transactions
Related-party transactions that took place during the year can be found in note 32.
Dividends
Dividends are typically paid quarterly in July, September, December and March. In 2023 because of
the acquisition of Appreciate Group and some extended audit requirements which have aected the
date of the AGM for 2023 a third interim dividend of 9.3 pence per share is being paid on 1 September
to shareholders on the register on 11 August 2023 followed by a final dividend of 9.3 pence (In total
18.6 pence).
We have declared a final dividend of 9.3 pence per share (2022: 18.0 pence per share) payable on
22 September 2023 to shareholders on the register on 11 August 2023. The final dividend is subject to
the approval of the shareholders at the annual general meeting on 7 September 2023.
The third interim and final dividends will result in £13.5 million (2022: £12.4 million) being paid to
shareholders from the standalone statement of financial position of the Company which, as at
31 March 2023, had approximately £44.2 million (2022: £67.9 million) of distributable reserves.
An earlier interim ordinary dividend of 18.4 pence (2022: 17.0 pence) was paid in equal instalments of
9.2 pence on 30 December 2022 and 6 March 2023.
The dividend policy including all the dividends declared during the year is set out in the Financial Review
on page 78.
Going concern
As at 31 March 2023 the Group had £72.4 million of net debt. As at 31 March 2023, the Group had
corporate cash and cash equivalents of £22 million. In addition, following the Group-wide refinancing
the Group’s borrowing facilities consist of a £10.8 million amortising term loan which is due to be fully
repaid over the next financial year, an unsecured £75.0 million revolving credit facility with a £30.0
million accordion facility (uncommitted) expiring in February 2026 and a £36 million term loan. The
Company’s cash and borrowing capacity is adequate to meet the foreseeable needs of the Group, taking
into account any risks (see pages 63 to 68). 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 69 and
70 of the Strategic Report and commentary on financial risk management is shown in note 31.
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126 PayPoint Plc Annual Report 2023
Independent auditor
KPMG LLP will not be continuing as the Company’s auditor and a resolution for the appointment of
PricewaterhouseCoopers LLP as the Company’s new auditor will be proposed at the forthcoming annual
general meeting. The Notice of Annual General Meeting can be found on pages 185 to 192.
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 88-92 (which is incorporated into this Directors’ Report
by reference).
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 oce, 1 The Boulevard, Shire Park, Welwyn
Garden City AL7 1EL on 7 September 2023 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 pages 185 to 192.
The Directors’ Report was approved by the Board and signed on its behalf by:
Brian McLelland
Company Secretary
27 July 2023
Directors’ Report continued
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Financial statements Shareholder information127 PayPoint Plc Annual Report 2023 Strategic report Governance
The directors are responsible for preparing the Annual Report and the Group and parent Company
financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare Group and parent Company financial statements for each
financial year. Under that law they are required to prepare the Group financial statements in accordance
with UK-adopted international accounting standards and applicable law and have elected to prepare the
parent Company financial statements on the same basis.
Under company law the directors must not approve the financial statements unless they are satisfied
that they give a true and fair view of the state of aairs of the Group and parent Company and of the
Group’s profit or loss for that period. In preparing each of the Group and parent Company financial
statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgments and estimates that are reasonable, relevant and reliable;
• state whether they have been prepared in accordance with UK-adopted international accounting
standards;
• assess the Group and parent Company’s ability to continue as a going concern, disclosing, as
pplicable, matters related to going concern; and
• use the going concern basis of accounting unless they either intend to liquidate the Group or the
parent Company or to cease operations, or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting records that are sucient to show
and explain the parent Company’s transactions and disclose with reasonable accuracy at any time
the financial position of the parent Company and enable them to ensure that its financial statements
comply with the Companies Act 2006. They are 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, and have general responsibility for taking such steps as are reasonably open
to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report,
Directors’ Report, Directors’ Remuneration Report and Corporate Governance Statement that complies
with that law and those regulations.
The Directors are responsible for the maintenance and integrity of the corporate and financial information
included on the Company’s website. Legislation in the UK governing the preparation and dissemination of
financial statements may dier from legislation in other jurisdictions.
In accordance with Disclosure Guidance and Transparency Rule 4.1.14R, the financial statements will
form part of the annual financial report prepared using the single electronic reporting format under the
TD ESEF Regulation. The auditor’s report on these financial statements provides no assurance over the
ESEF format.
Responsibility statement of the Directors in respect of the annual financial report
We confirm that to the best of our knowledge:
• the financial statements, prepared in accordance with the applicable set of accounting standards,
give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company
and the undertakings included in the consolidation taken as a whole; and
• the Strategic Report includes a fair review of the development and performance of the business
and the position of the issuer and the undertakings included in the consolidation taken as a whole,
together with a description of the principal risks and uncertainties that they face.
We consider 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 position and performance,
business model and strategy.
Alan Dale
Finance Director
27 July 2023
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128 PayPoint Plc Annual Report 2023
Independent Auditor’s Report to the Members of PayPoint Plc
1 Our opinion is unmodified
We have audited the financial statements of PayPoint Plc (“the Company”) for the year ended
31 March 2023 which comprise the Consolidated Statement of Profit or Loss, Consolidated Statement
of Comprehensive Income, Consolidated Statement of Financial Position, Consolidated Statement of
Changes in Equity, Consolidated Statement of Cash Flows, Company Statement of Financial Position,
Company Statement of Changes in Equity, Company Statement of Cash Flows and the related notes,
including the accounting policies in note 1.
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and of the parent
Company’s aairs as at 31 March 2023 and of the Group’s profit for the year then ended;
• the Group financial statements have been properly prepared in accordance with UK-adopted
international accounting standards;
• the parent Company financial statements 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
• the financial statements have been prepared in accordance with the requirements of the Companies
Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and
applicable law. Our responsibilities are described below. We believe that the audit evidence we have
obtained is a sucient and appropriate basis for our opinion. Our audit opinion is consistent with our
report to the audit committee.
We were first appointed as auditor by the directors on 15 August 2017. The period of total
uninterrupted engagement is for the six financial years ended 31 March 2023. We have fulfilled our
ethical responsibilities under, and we remain independent of the Group in accordance with, UK ethical
requirements including the FRC Ethical Standard as applied to listed public interest entities. No non-audit
services prohibited by that standard were provided.
2 Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most significance
in the audit of the financial statements and include the most significant assessed risks of material
misstatement (whether or not due to fraud) identified by us, including those which had the greatest
eect on: the overall audit strategy; the allocation of resources in the audit; and directing the eorts
of the engagement team. We summarise below the key audit matters, in decreasing order of audit
significance, in arriving at our audit opinion above, together with our key audit procedures to address
those matters and, as required for public interest entities, our results from those procedures. These
matters were addressed, and our results are based on procedures undertaken, in the context of, and
solely for the purpose of, our audit of the financial statements as a whole, and in forming our opinion
thereon, and consequently are incidental to that opinion, and we do not provide a separate opinion on
these matters.
The risk Our response
Identification and valuation
of Appreciate Group ABS
non-contractual customer
relationship and Park and
Love2Shop brand intangible
assets (New risk)
(ABS non-contractual customer
relationship: £8.8 million;
2022: nil; Park brand: £4.2million;
2022: nil; Love2Shop brand:
£7.6 million; 2022: nil)
Refer to page 99 (Audit
Committee Report), page 150
(accounting policy) and page
165 (financial disclosures).
Subjective estimate:
PayPoint Plc acquired the entire share capital of the Appreciate Group on
28 February 2023 for consideration of approximately £79.2 million.
There is an inherent complexity in identifying acquired intangibles.
Additionally we considered the valuation of Appreciate Group customer
relationship and brand intangibles as a risk because of the inherent
complexity, estimation uncertainty, and judgements involvement in
determining and applying assumptions to assess their fair value, and
because of the size of the acquisition. Auditor judgement is required
to assess whether the Group’s estimate of the valuation of customer
relationship and brand intangible asset, taking into account key inputs
and assumptions, fall within an acceptable range.
The eect of these matters is that, as part of our risk assessment for
audit planning purposes, we determined that the recorded intangible
assets had a high degree of estimation uncertainty, with a potential
range of reasonable outcomes greater than our materiality for the
financial statements as a whole.
Our procedures included:
• Our valuation expertise: Engaging our valuation specialists we assessed the appropriateness
of the intangible assets identified, critically assessed the valuation methodology applied and key
assumptions included within (discount rate, attrition rate and pre-tax royalty rate);
• Benchmarking assumptions: Comparing the Group’s assumptions to externally derived data in
relation to key inputs such as discount rate, and pre-tax royalty rate;
• Historical comparison: Assessing the accuracy of previous forecasts by comparing those forecasts
to actual performance of the acquired entities; and
• Assessing transparency: Assessing whether the Group’s disclosures detailing the sensitivity of the
valuation of acquired intangibles to discount rate, pre-tax royalty rate and attrition rate are adequate.
We performed the tests above rather than seeking to rely on any of the Group’s controls because
the nature of the balance is such that we would expect to obtain audit evidence primarily through the
detailed procedures described.
Our results:
We found the identification and valuation of Appreciate Group customer relationship and brand
intangible assets to be acceptable.
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Shareholder information129 PayPoint Plc Annual Report 2023 Strategic report Financial statementsGovernance
The risk Our response
Revenue recognition
(Risk vs 2022: unchanged)
(part of the revenue within
a total of £165.2 million;
2022: £145.1 million)
Refer to page 97 (Audit
Committee Report), page 147
(accounting policy) and page
154 (financial disclosures).
Data capture and processing error:
The risk is that revenue transacted through the group’s network of
terminals is misstated due to inherent complexities involved in capturing
and processing the high volume of low value transactions generated
across the Company’s o-site terminal network. IT systems may not be
configured appropriately such that data does not correctly flow through
the IT systems.
Our procedures included:
• Control design and operation: Assessing the design and operation of controls over the general
IT environment supporting the transaction recording, billing and general ledger systems. These
procedures included testing access to programs and data, program change and development to
address the risk of unauthorised changes being made to the operation of IT application controls;
• Control design and operation: Testing key automated controls (with the support of our IT
specialists) and manual controls, including controls that are designed to ensure reconciliations
are performed between system reports used to generate invoices and o-site terminal network
systems;
• Tests of details: Using data analytical tools to test that revenue invoiced agrees through to cash
received; and
• Tests of details: On a statistical sample basis, recalculated revenue recorded by inspecting the rate
per transaction in the customer contract, and the number of transactions within the system reports.
Our results:
The results of our procedures were satisfactory, and we considered the amount of revenue recognised
to be acceptable (2022: acceptable).
Recoverability of group
goodwill in relation to
Handepay and of parent’s
investment in subsidiary
in relation to Handepay
(New risk)
(Group: £45.6 million;
2022: £43.9 million; Parent:
£39.8 million; 2022: £43 million)
Refer to page 100 (Audit
Committee Report), page 144
(accounting policy) and page
161 (financial disclosures).
Forecast-based assessment:
Goodwill in the group and the carrying amount of the parent Company’s
investment in subsidiary are significant and at risk of irrecoverability
due to Handepay’s trading performance when compared to the original
projections produced at a time of the Handepay’s acquisition. The
estimated recoverable amount of these balances is subjective due to the
inherent uncertainty involved in forecasting and discounting future cash
flows, particularly in light of more challenging economic circumstances.
The eect of these matters is that, as part of our risk assessment,
we determined that the value in use of goodwill has a high degree of
estimation uncertainty, with a potential range of reasonable outcomes
greater than our materiality for the financial statements as a whole, and
possibly many times that amount.
For the cost of investment in subsidiary, as part of our risk assessment
for audit planning purposes, we determined that the value in use had
a high degree of estimation uncertainty, with a potential range of
reasonable outcomes greater than our materiality for the financial
statements as a whole. Following completion of our procedures, we
concluded that reasonably possible changes to the value in use of cost
of investment in subsidiary would not be expected to result in a material
impairment.
Our procedures included:
• Our sector experience: We challenged the Group’s assumptions with reference to our knowledge of
the Group, including from our inspection of board approved strategy plans;
• Benchmarking assumptions: Comparing the Group’s assumptions to externally derived data in
relation to revenue growth rates;
• Sensitivity analysis: Performing sensitivity analysis which considered reasonably possible changes
in the key assumptions that had the greatest judgements and their impact on the valuation, including
discount rates and revenue growth rates;
• Independent reperformance: We developed our own estimate of a range of reasonably possible
discount rates for the CGU, based on external market data and our understanding of the business,
and compared this to the discount rate determined by the Group;
• Historical comparisons: Assessing the director’s ability to forecast by comparing previous forecasts
to actual performance; and
• Assessing transparency: Assessing whether the Group’s disclosures about the sensitivity of the
outcome of the impairment assessment to changes in key assumptions reflected the risks inherent in
the recoverable amount of goodwill.
We performed the detailed tests above rather than seeking to rely on any of the Group or parent
Company’s controls because the nature of the balance is such that we would expect to obtain audit
evidence primarily through the detailed procedures described.
Our results:
We found the Group’s conclusion that there is no impairment of goodwill or the parent Company’s
investment in subsidiary to be acceptable.
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130 PayPoint Plc Annual Report 2023
Normalised PBT
90%
(2022: 94%)
Normalised group profit before tax £46.6m (2022: Normalised group
profit before tax before tax from continuous operations £45.6m)
Group revenue
Group materiality
Full scope for group audit purposes 2023
Full scope for group audit purposes 2022
Residual components
0.0
4.5
£2.0m
Whole financial statements materiality (2022: £2.0m)
Group materiality
£2.0m (2022: £2.0m)
£1.5m
Whole financial statements performance materiality (2022: £1.5m)
£1.3m
Range of materiality at seven components (£1.3m – £0.35m)
(2022: £1.4m – £0.35m)
£100k
Misstatements reported to the audit committee
(2022: £100k)
94%
90%
86%
(2022: 95%)
Group profit before tax
95%
86%
95%
(2022: 94%)
Group total assets
94%
95%
87%
(2022: 92%)
Group normalised profit before tax
92%
87%
Independent Auditor’s Report to the Members of PayPoint Plc continued
We continue to perform procedures over the Recoverability of group goodwill in relation to i-movo and
of parent’s investment in subsidiary in relation to i-movo. However, following improved performance of
i-movo business, we have not assessed this as one of the most significant risks in our current year audit
and, therefore, it is not separately identified in our report this year.
3 Our application of materiality and an overview of the scope of our audit
Materiality for the Group financial statements as a whole was set at £2.0m (2022: £2.0m), determined
with reference to a benchmark of Group profit before tax from continuing operations normalised to
exclude this year’s exceptional items relating to acquisitions as disclosed in note 6 (2022: Group profit
before tax from continuing operations normalised to exclude exceptional items relating to acquisitions
as disclosed in note 6) of which it represents 4.3% (2022: 4.4%).
Materiality for the parent company financial statements as a whole was set at £1.0 million
(2022: £1.0 million), determined with reference to a benchmark of Company total assets, of which it
represents 0.41% (2022: 0.58%).
In line with our audit methodology, our procedures on individual account balances and disclosures were
performed to a lower threshold, performance materiality, so as to reduce to an acceptable level the risk
that individually immaterial misstatements in individual account balances add up to a material amount
across the financial statements as a whole.
Performance materiality was set at 75% (2022: 75%) of materiality for the financial statements
as a whole, which equates to £1.5 million (2022: £1.5 million) for the group and £0.75 million
(2022: £0.75 million) for the parent company. We applied this percentage in our determination of
performance materiality because we did not identify any factors indicating an elevated level of risk.
We agreed to report to the Audit Committee any corrected or uncorrected identified misstatements
exceeding £0.1 million (2022: £0.1 million), in addition to other identified misstatements that warranted
reporting on qualitative grounds.
Of the group’s 13 (2022: 12) reporting components, we subjected seven (2022: six) to full scope audits
for group purposes.
The group team performed procedures on the items excluded from normalised group profit before tax.
The components within the scope of our work accounted for the percentages illustrated opposite.
For the residual components, we performed analysis at an aggregated group level to re-examine our
assessment that there were no significant risks of material misstatement within these.
The Group team instructed component auditors as to the significant areas to be covered, including
the relevant risks detailed above and the information to be reported back. The Group team approved
the component materialities, which ranged from £0.35 million to £1.30 million (2022: £0.35 million to
£1.40 million), having regard to the mix of size and risk profile of the Group across the components.
The work on one of the seven components (2022: zero of the six) was performed by component auditors
and the rest, including the audit of the parent Company, was performed by the Group team.
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Video and telephone conference meetings were held with the component auditor of Appreciate, and
the Group team visited the component team to discuss the audit risk and strategy and to assess the
audit work performed. During these meetings, the findings reported to the Group team were discussed
in more detail, and any further work required by the Group team was then performed by the component
auditor. The Group team also inspected the component team’s key work papers to evaluate the quality
of execution of the audit of the component with a particular focus on payables in respect of cards
and vouchers.
We were able to rely upon the Group’s internal control over financial reporting on Revenue recognition,
where our controls testing supported this approach, which enabled us to reduce the scope of our
substantive audit work; in the other areas the scope of the audit work performed was fully substantive.
4 Impact of climate change on our audit
In planning our audit we have considered the potential impacts of climate change on the Group’s
business and its financial statements. The Group’s main exposure to climate risk is the shiing
expectations from business stakeholders to transition to low-carbon supply chains and greater emphasis
on climate related disclosures in the annual report.
As part of our audit we made enquiries of management to understand the Group’s assessment and
preparedness for climate change. We have performed a risk assessment on how the impact of climate
change may aect the financial statements and our audit and, taking into account the nature of the
business and the limited impact of climate change on the assumptions in impairment testing, we have
not assessed climate related risk to be significant to our audit this year.
We have also read the Group’s and Parent Company’s disclosure of climate related information in the
front half of the annual report as set out on pages 42 to 49 and considered consistency with the financial
statements and our audit knowledge.
5 Going concern
The directors have prepared the financial statements on the going concern basis as they do not intend
to liquidate the Group or the Company or to cease their operations, and as they have concluded that the
Group’s and the Company’s financial position means that this is realistic. They have also concluded that
there are no material uncertainties that could have cast significant doubt over their ability to continue
as a going concern for at least a year from the date of approval of the financial statements (“the going
concern period”).
We used our knowledge of the Group, its industry, and the general economic environment to identify
the inherent risks to its business model and analysed how those risks might aect the Group’s and
Company’s financial resources or ability to continue operations over the going concern period.
The risk that we considered most likely to adversely aect the Group’s and Company’s available
financial resources and metrics relevant to debt covenants over this period was lower than expected
trading volumes.
We also considered less predictable but realistic second order impacts, such as a significant cyber
incidence, or the erosion of customer or supplier confidence, which could result in a rapid reduction of
available financial resources.
We considered whether these risks could plausibly aect the liquidity or covenant compliance in the
going concern period by comparing severe, but plausible downside scenarios that could arise from these
risks individually and collectively against the level of available financial resources and covenants indicated
by the Group and Company’s financial forecasts.
We considered whether the going concern disclosure in note 1 to the financial statements gives a full
and accurate description of the Directors’ assessment of going concern, including the identified risks and
related sensitivities.
Our conclusions based on this work:
• we consider that the directors’ use of the going concern basis of accounting in the preparation of the
financial statements is appropriate;
• we have not identified, and concur with the directors’ assessment that there is not, a material
uncertainty related to events or conditions that, individually or collectively, may cast significant doubt
on the Group’s or Company’s ability to continue as a going concern for the going concern period;
• we have nothing material to add or draw attention to in relation to the directors’ statement in note
1 to the financial statements on the use of the going concern basis of accounting with no material
uncertainties that may cast significant doubt over the Group and Company’s use of that basis for the
going concern period, and we found the going concern disclosure in note 1 to be acceptable; and
• the related statement under the Listing Rules set out on page 125 is materially consistent with the
financial statements and our audit knowledge.
However, as we cannot predict all future events or conditions and as subsequent events may result in
outcomes that are inconsistent with judgements that were reasonable at the time they were made, the
above conclusions are not a guarantee that the Group or the Company will continue in operation.
6 Fraud and breaches of laws and regulations – ability to detect
Identifying and responding to risks of material misstatement due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions
that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud.
Our risk assessment procedures included:
• Enquiring of directors, the audit committee, internal audit and inspection of policy documentation as
to the Group and Company’s high-level policies and procedures to prevent and detect fraud, including
the internal audit function, and the Group and Company’s channel for “whistleblowing”, as well as
whether they have knowledge of any actual, suspected or alleged fraud.
• Reading Board minutes, and by attending Audit Committee meetings.
• Considering remuneration incentive schemes and performance targets for management, and directors
including the profit before tax and net revenue targets for management and directors remuneration.
• Using analytical procedures to identify any unusual or unexpected relationships.
• Our forensic specialists assisted us in identifying key fraud risks. This included holding a discussion
with the engagement partner, engagement manager and engagement quality control reviewer, and
assisting with designing relevant audit procedures to respond to the identified fraud risks.
We communicated identified fraud risks throughout the audit team and remained alert to any indications
of fraud throughout the audit. This included communication from the Group audit team to full scope
component audit team of relevant fraud risks identified at the Group level and request to full scope
component audit teams to report to the Group audit team any instances of fraud that could give rise to a
material misstatement at the Group level.
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132 PayPoint Plc Annual Report 2023
Independent Auditor’s Report to the Members of PayPoint Plc continued
As required by auditing standards, and taking into account possible pressures to meet profit targets, we
perform procedures to address the risk of management override of controls, in particular the risk that
Group and component management may be in a position to make inappropriate accounting entries. On
this audit we do not believe there is a fraud risk related to revenue recognition because application of the
revenue policy involves a low degree of estimation and judgement.
We did not identify any additional fraud risks.
We performed procedures including:
• Identifying journal entries to test for all full scope components based on risk criteria and comparing
the identified entries to supporting documentation. These included those posted to unusual or
unrelated revenue and cost accounts, and journal entries with an unexpected double entry to cash,
loans or borrowings.
• Evaluating the business purpose of significant unusual transactions.
• Assessing whether the judgements made in making accounting estimates are indicative of a
potential bias.
Identifying and responding to risks of material misstatement related to compliance with laws
and regulations
We identified areas of laws and regulations that could reasonably be expected to have a material eect
on the financial statements from our general commercial and sector experience, and through discussion
with the directors and other management (as required by auditing standards) and discussed with the
directors and other management the policies and procedures regarding compliance with laws and
regulations.
As the Group is regulated, our assessment of risks involved gaining an understanding of the control
environment including the entity’s procedures for complying with regulatory requirements.
We communicated identified laws and regulations throughout our team and remained alert to any
indications of non-compliance throughout the audit. This included communication from the Group audit
team to full scope component audit teams of relevant laws and regulations identified at the Group level
and a request for full scope component auditors to report to the Group audit team any instances of
non-compliance with laws and regulations that could give rise to a material misstatement in the Group
financial statements.
The potential eect of these laws and regulations on the financial statements varies considerably.
Firstly, the Group is subject to laws and regulations that directly aect the financial statements including
financial reporting legislation (including related companies legislation), distributable profits legislation,
and taxation legislation, and we assessed the extent of compliance with these laws and regulations as
part of our procedures on the related financial statement items.
Secondly, the Group is subject to many other laws and regulations where the consequences of non-
compliance could have a material eect on amounts or disclosures in the financial statements, for
instance through the imposition of fines or litigation. We identified the following areas as those most
likely to have such an eect: payment services legislation, data protection laws, anti-bribery, regulatory
capital and liquidity, and certain aspects of company legislation recognising the financial and regulated
nature of the Group’s activities to provide payments services and its legal form. Auditing standards
limit the required audit procedures to identify non-compliance with these laws and regulations to
enquiry of the directors and other management and inspection of regulatory and legal correspondence,
if any. Therefore if a breach of operational regulations is not disclosed to us or evident from relevant
correspondence, an audit will not detect that breach.
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected
some material misstatements in the financial statements, even though we have properly planned and
performed our audit in accordance with auditing standards. For example, the further removed non-
compliance with laws and regulations is from the events and transactions reflected in the financial
statements, the less likely the inherently limited procedures required by auditing standards would
identify it.
In addition, as with any audit, there remained a higher risk of non-detection of fraud, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit
procedures are designed to detect material misstatement. We are not responsible for preventing non-
compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.
7 We have nothing to report on the other information in the Annual Report
The directors are responsible for the other information presented in the Annual Report together with
the financial statements. Our opinion on the financial statements does not cover the other information
and, accordingly, we do not express an audit opinion or, except as explicitly stated below, any form of
assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether, based on our
financial statements audit work, the information therein is materially misstated or inconsistent with the
financial statements or our audit knowledge. Based solely on that work we have not identified material
misstatements in the other information.
Strategic report and directors’ report
Based solely on our work on the other information:
• we have not identified material misstatements in the strategic report and the directors’ report;
• in our opinion the information given in those reports for the financial year is consistent with the
financial statements; and
• in our opinion those reports have been prepared in accordance with the Companies Act 2006.
Directors’ remuneration report
In our opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared
in accordance with the Companies Act 2006.
Disclosures of emerging and principal risks and longer-term viability
We are required to perform procedures to identify whether there is a material inconsistency between
the directors’ disclosures in respect of emerging and principal risks and the viability statement, and the
financial statements and our audit knowledge.
Based on those procedures, we have nothing material to add or draw attention to in relation to:
• the directors’ confirmation within the Corporate Governance Report on page 90 that they have
carried out a robust assessment of the emerging and principal risks facing the Group, including those
that would threaten its business model, future performance, solvency and liquidity;
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• the Principal risks and uncertainties disclosures describing these risks and how emerging risks are
identified, and explaining how they are being managed and mitigated; and
• the directors’ explanation in the viability statement of how they have assessed the prospects of the
Group, over what period they have done so and why they considered that period to be appropriate,
and their statement as to whether 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 their assessment,
including any related disclosures drawing attention to any necessary qualifications or assumptions.
We are also required to review the viability statement, set out on page 69 under the Listing Rules. Based
on the above procedures, we have concluded that the above disclosures are materially consistent with
the financial statements and our audit knowledge.
Our work is limited to assessing these matters in the context of only the knowledge acquired during
our financial statements audit. As we cannot predict all future events or conditions and as subsequent
events may result in outcomes that are inconsistent with judgements that were reasonable at the time
they were made, the absence of anything to report on these statements is not a guarantee as to the
Group’s and Company’s longer-term viability.
Corporate governance disclosures
We are required to perform procedures to identify whether there is a material inconsistency between the
directors’ corporate governance disclosures and the financial statements and our audit knowledge.
Based on those procedures, we have concluded that each of the following is materially consistent with
the financial statements and our audit knowledge:
• the directors’ statement that they consider that the annual report and financial statements taken as
a whole is fair, balanced and understandable, and provides the information necessary for shareholders
to assess the Group’s position and performance, business model and strategy;
• the section of the annual report describing the work of the Audit Committee, including the significant
issues that the audit committee considered in relation to the financial statements, and how these
issues were addressed; and
• the section of the annual report that describes the review of the eectiveness of the Group’s risk
management and internal control systems.
We are required to review the part of the Corporate Governance Statement relating to the Group’s
compliance with the provisions of the UK Corporate Governance Code specified by the Listing Rules for
our review. We have nothing to report in this respect.
8 We have nothing to report on the other matters on which we are required to report
by exception
Under the Companies Act 2006, we are required to report to you if, in our opinion:
• adequate accounting records have not been kept by the parent Company, or returns adequate for our
audit have not been received from branches not visited by us; or
• the parent Company financial statements and the part of the Directors’ Remuneration Report to be
audited are not in agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
We have nothing to report in these respects.
9 Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 127, the directors are responsible for: the
preparation of the financial statements including being satisfied that they give a true and fair view; 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; assessing the Group and parent
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 they either intend to liquidate the
Group or the parent Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities
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 our opinion in an
auditor’s report. Reasonable assurance is a high level of assurance, but does not 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 aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of
the financial statements.
A fuller description of our responsibilities is provided on the FRC’s website at
www.frc.org.uk/auditorsresponsibilities.
The Company is required to include the financial statements in an annual financial report prepared using
the single electronic reporting format specified in the TD ESEF Regulation. This auditor’s report provides
no assurance over whether the annual financial report has been prepared in accordance with that format.
10 The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part
16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the
Company’s members those matters we are required to state to them in an auditor’s report and for no
other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the Company and the Company’s members, as a body, for our audit work, for this
report, or for the opinions we have formed.
James Tracey (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square
Canary Wharf
London
E14 5GL
27 July 2023
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134 PayPoint Plc Annual Report 2023
Note
Year ended
31 March 2023
£’000
Re-presented
1
Year ended
31 March 2022
£’000
Continuing operations
Revenue 2,3 165 , 220 145, 14 4
Other revenue 2,3 2, 503 -
Total revenue 1 6 7, 7 2 3 145 ,14 4
Cost of revenue 5 (6 4 , 257 ) (4 8 , 7 2 5 )
Gross profit 103, 4 66 96,419
Administrative expenses – excluding adjusting items (50,083 ) (4 6 , 3 5 7 )
Operating profit before adjusting items 53,383 50,0 62
Adjusting items:
Exceptional items – administrative expenses 6 (5, 317 ) 2,8 80
Amortisation of intangible assets arising on acquisition – administrative expenses (2 , 5 74 ) (2, 39 4 )
Operating profit 45,492 50, 54 8
Finance income 9 87 13
Finance costs 9 (2 ,71 8 ) (2,046 )
Exceptional item – finance costs 6 (287 ) –
Profit before tax from continuing operations 4 2 , 5 74 4 8 , 51 5
Tax on continuing operations 10 (7, 8 6 4 ) (8,986 )
Profit from continuing operations 34 ,7 10 3 9, 529
Discontinued operation
Profit from discontinued operation, net of tax 11 – 148
Exceptional item – gain on disposal of discontinued operation, net of tax 11 – 29, 86 3
Profit for the year attributable to equity holders of the parent 34 ,7 10 69,540
1 Amortisation of intangible assets arising on acquisition were not identified as adjusting items in the prior year financial statements (see note 1).
Earnings per share (pence)
Year ended
31 March 2023
Year ended
31 March 2022
Basic 50.1 101 . 3
Diluted 49.6 10 0 . 2
Earnings per share – continuing operations (pence)
Year ended
31 March 2023
Year ended
31 March 2022
Basic 50.1 5 7. 6
Diluted 49.6 5 7. 0
Underlying earnings per share – continuing operations before adjusting items (pence)
Year ended
31 March 2023
Year ended
31 March 2022
Basic 61 .0 56.0
Diluted 60. 3 55.4
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Shareholder information135 PayPoint Plc Annual Report 2023 Strategic report Financial statementsGovernance
Consolidated statement of comprehensive income
Note
Year ended
31 March
2023
£’000
Year ended
31 March
2022
£’000
Items that will not be reclassified to the consolidated statement of profit or loss:
Remeasurement of defined benefit pension scheme 18 353 –
Deferred tax on defined benefit pension scheme 10 (86 ) –
Items that may subsequently be reclassified to the consolidated statement of profit or loss:
Exchange dierences on disposal of discontinued operation reclassified to profit or loss 11 – 1, 6 45
Other comprehensive income for the year 267 1 , 645
Profit for the year 34 ,7 10 69,540
Total comprehensive income for the year attributable to equity holders of the parent 34 , 977 71 ,1 85
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136 PayPoint Plc Annual Report 2023
Note
31 March
2023
£’000
31 March
2022
£’000
Non-current assets
Goodwill 13 1 1 7, 4 2 7
Other intangible assets 14 75, 2 93 35, 99 0
Investment in associate 15 – 6 ,73 9
Convertible loan notes 15 3 ,75 0 750
Other investment 15 251 –
Property, plant and equipment 17 2 9 , 2 57 21,782
Net investment in finance lease receivables 26 1 ,711 4, 4 07
Retirement benefit asset 18 411 –
Total non-current assets 228 , 10 0 127,336
Current assets
Inventories 19 3, 1 52 332
Trade and other receivables 20 82 ,055 75 , 975
Current tax asset 6, 231 4, 1 91
Cash and cash equivalents – clients’ funds, retailer partners’ deposits and card and voucher deposits 21 55,90 5 16, 6 4 6
Cash and cash equivalents – corporate cash 21 22 , 5 46 7, 6 5 3
Monies held in trust 21 82,000 –
Total current assets 251 , 8 8 9 1 0 4 ,797
Total assets 479 , 9 8 9 2 32, 1 33
Current liabilities
Trade and other payables 22 25 5, 52 6 9 2 , 375
Deferred consideration liability 24 – 1, 000
Lease liabilities 26 8 62 20 0
Loans and borrowings 27 5 8 ,2 45 39, 6 43
Bank overdra 21 525 –
Total current liabilities 315,158 133 , 218
Non-current liabilities
Trade and other payables 22 115 –
Lease liabilities 26 4 ,6 17 60
Loans and borrowings 27 36 , 17 0 1 1, 8 91
Deferred tax liability 25 12,2 15 3,7 0 6
Total non-current liabilities 53, 117 1 5, 6 57
Total liabilities 36 8 , 2 75 14 8 , 8 75
Net assets 111 ,71 4 83, 258
Equity
Share capital 28 2 42 230
Share premium 28 1 ,000 1, 000
Merger reserve 28 1 8, 243 999
Share-based payment reserve 2,286 1 , 570
Retained earnings 89, 94 3 79,4 59
Total equity attributable to equity holders of the parent 111 ,71 4 83, 258
These financial statements were approved by the Board of Directors and authorised for issue on 27 July 2023 and were signed on behalf of the Board of Directors.
Nick Wiles
Chief Executive
27 July 2023
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Shareholder information137 PayPoint Plc Annual Report 2023 Strategic report Financial statementsGovernance
Note
Share capital
£’000
Share premium
£’000
Merger reserve
£’000
Share-based
payment
reserve
£’000
Translation
reserve
£’000
Retained
earnings
£’000
Total equity
£’000
Opening equity at 1 April 2021 229 4, 975 999 2,0 05 (1, 6 45 ) 26 ,737 33, 3 0 0
Profit for the year – – – – – 69,540 69,540
Exchange dierences on translation of foreign operation – – – – 1, 6 45 – 1 , 645
Comprehensive income for the year – – – – 1 ,6 45 69, 540 71 ,1 85
Issue of shares 28 1 1, 000 – – – – 1, 0 01
Equity-settled share-based payment expense 29 – – – 868 – – 868
Vesting of share scheme 29 – – – (1, 3 03 ) – 1, 3 03 –
Reclassification of share premium into retained earnings – (4 , 9 7 5 ) – – – 4, 975 –
Dividends 30 – – – – – (23, 09 6 ) (23, 0 96 )
Closing equity at 31 March 2022 230 1 ,000 999 1 , 57 0 – 7 9,45 9 83,258
Profit for the year – – – – – 34 ,71 0 34 ,7 10
Total other comprehensive income – – – – – 267 267
Comprehensive income for the year – – – – – 34 , 977 34 , 977
Issue of shares 28 12 – 17, 2 4 4 – – – 17, 2 5 6
Equity-settled share-based payment expense 29 – – – 1, 33 0 – – 1, 33 0
Vesting of share scheme 29 – – – (614 ) – 61 4 –
Dividends 30 – – – – – (25,1 07 ) (25,1 07 )
Closing equity at 31 March 2023 242 1 ,000 18,24 3 2,286 – 89, 9 43 111 ,71 4
Consolidated statement of changes in equity
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138 PayPoint Plc Annual Report 2023
Reconciliation of cash and cash equivalents
Note
Year ended
31 March
2023
£’000
Re-presented
1
Year ended
31 March
2022
£’000
Cash flows from operating activities
Net cash generated from operations 33 102, 1 82 33,6 26
Corporation tax paid (6, 20 4 ) (9 , 161 )
Interest received 609 13
Interest paid (2 , 973 ) (1 , 91 3 )
Net cash inflow from operating activities 93, 61 4 22 , 5 65
Investing activities
Purchases of property, plant and equipment (7, 8 0 2 ) (5,185 )
Purchases of intangible assets (4,900 ) (5 , 627 )
Acquisitions of subsidiaries net of cash acquired 16 (4 5 , 5 8 0 ) (4 , 5 4 3 )
Contingent consideration cash paid 24 (1, 000 ) (2 ,000 )
Disposal/(acquisition) of investment in associate 15 5 ,4 87 (6 ,73 9 )
Purchase of convertible loan note 15 (3,000 ) (75 0 )
Purchase of other investment 15 (251 ) –
Proceeds from disposal of discontinued operation net of cash disposed 11 – 20,159
Net cash used in investing activities (5 7, 0 4 6 ) (4 , 6 8 5 )
Financing activities
Dividends paid 30 (25,1 07 ) (23,0 9 6 )
Proceeds from issue of share capital 1 1
Payment of lease liabilities 26 (261 ) (24 3 )
Repayments of loans and borrowings 27 (2 2 , 0 74 ) (61,4 6 9 )
Proceeds from loans and borrowings 27 64,500 26 , 420
Net cash generated/(used) in financing activities 17, 0 5 9 (58, 387 )
Net increase/(decrease) in cash and cash equivalents 53,6 27 (4 0 , 5 0 7 )
Cash and cash equivalents at beginning of year 24, 299 64, 80 6
Cash and cash equivalents at end of year 7 7, 92 6 24, 2 9 9
1 Interest received was presented within “Investing activities” in the prior year financial statements.
Note
31 March
2023
£’000
31 March
2022
£’000
Continuing operations
Corporate cash 22 ,5 4 6 7, 6 5 3
Clients’ funds, retailer partners’ deposits and card and voucher deposits 55 ,905 16 ,6 4 6
Bank overdra (525 ) –
Cash and cash equivalents 21 7 7, 9 2 6 24 , 2 9 9
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Note
31 March
2023
£’000
31 March
2022
£’000
Non-current assets
Investments in wholly owned subsidiaries 15 221,837 139,105
Investment in associate 15 – 6,739
Convertible loan notes 15 3,750 750
Other investment 15 251 –
Trade and other receivables 20 11,477 26,155
Total non-current assets 237,315 172,749
Current assets
Trade and other receivables 20 2,530 3,108
Current tax asset 1,984 –
Cash and cash equivalents – corporate cash 1,186 301
Total current assets 5,700 3,409
Total assets 243,015 176,158
Current liabilities
Trade and other payables 22 83,298 54,765
Deferred consideration liability 24 – 1,000
Loans and borrowings 27 57,788 37, 833
Total current liabilities 141,086 93,598
Non-current liabilities
Loans and borrowings 27 36,000 10,833
Total liabilities 177,086 104,431
Net assets 65,929 71,727
Equity
Share capital 28 242 230
Share premium 28 1,000 1,000
Merger reserve 28 18,243 999
Share-based payment reserve 2,286 1,570
Retained earnings 44,158 67,928
Total equity attributable to equity holders of the parent 65,929 71,727
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 £0.7 million (2022: £25.1 million).
These financial statements were approved by the Board of Directors and authorised for issue on 27 July 2023 and were signed on behalf of the Board of Directors.
Nick Wiles
Chief Executive
27 July 2023
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140 PayPoint Plc Annual Report 2023
Company statement of changes in equity
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 2021 229 4,975 999 2,005 59,686 67,89 4
Profit for the year – – – – 25,060 25,060
Issue of shares 28 1 1,000 – – – 1,001
Equity-settled share-based payment expense 29 – – – 868 – 868
Vesting of share scheme 29 – – – (1,303) 1,303 –
Reclassification of share premium into retained earnings – (4,975) – – 4,975 –
Dividends 30 – – – – (23,096) (23,096)
Closing equity at 31 March 2022 230 1,000 999 1,570 67,928 71,727
Profit for the year – – – – 723 723
Issue of shares 28 12 – 17,244 – – 17, 256
Equity-settled share-based payment expense 29 – – – 1,330 – 1,330
Vesting of share scheme 29 – – – (614) 614 –
Dividends 30 – – – – (25,107) (25,107)
Closing equity at 31 March 2023 242 1,000 18,243 2,286 44,158 65,929
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Note
Year ended
31 March
2023
£’000
Re-presented
Year ended
31 March
2022
£’000
Cash flows from operating activities
Net cash generated from operations 33 46,658 30,230
Interest received 2 –
Interest paid (2,810) (1,655)
Net cash flow from operating activities 43,850 28,575
Investing activities
Increased capitalisation of existing investments 15 – (5,000)
Acquisition transaction costs (1,837) –
Acquisitions of subsidiaries 16 (61,925) (5,944)
Contingent consideration cash paid 24 (1,000) (2,000)
Proceeds from/(Purchase of) investment in associate 15 5,487 (6,739)
Purchase of convertible loan note 15 (3,000) (750)
Purchase of other investment 15 (251) –
Proceeds from disposal of discontinued operation 11 – 48,063
Net cash (used in)/generated from investing activities (62,526) 27,630
Financing activities
Dividends paid 30 (25,107) (23,096)
Proceeds from issue of share capital 1 1
Repayments of loans and borrowings 27 (19,833) (57, 833)
Proceeds from loans and borrowings 27 64,500 24,500
Net cash generated from/(used in) financing activities 19,561 (56,428)
Net increase/(decrease) in cash and cash equivalents 885 (223)
Cash and cash equivalents at beginning of year 301 524
Cash and cash equivalents at end of year 1,186 301
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1. Accounting policies continued
Use of judgements and estimates continued
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1. Accounting policies continued
Alternative performance measures continued
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1. Accounting policies continued
Significant accounting policies continued
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1. Accounting policies continued
Significant accounting policies continued
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1. Accounting policies continued
Significant accounting policies continued
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2. Segmental reporting continued
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15. Investments continued
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16. Acquisition of subsidiaries continued
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18. Pensions continued
Defined benefit plans continued
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21. Cash and cash equivalents and monies held in trust continued
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27. Loans and borrowings and lease liabilities continued
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31. Financial instruments and risk continued
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31. Financial instruments and risk continued
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182 PayPoint Plc Annual Report 2023
Notice of Annual General Meeting
This notice of meeting is important and requires your
immediate attention.
If you are in any doubt as to any aspect of the proposals referred to in this notice of meeting or as to the
action you should take, you should seek your own advice from a stockbroker, bank manager, solicitor, tax
adviser, accountant or other independent professional adviser.
If you have recently sold or otherwise transferred all of your ordinary shares in PayPoint Plc, please pass
this notice of meeting, together with the accompanying documents, to the purchaser or transferee, or to
the person who arranged the sale or transfer, so that they can pass these documents to the person who
now holds the shares as soon as possible.
PayPoint Plc’s annual general meeting (‘AGM’) is set to be held at PayPoint’s registered oce address.
We remain committed to engaging with our shareholders so please do send any questions you may have
for the Board, relating to the business of the meeting, to our Company Secretary at CompanySecretary@
paypoint.com by Tuesday 5 September 2023 at 12.00 noon.
Meantime, we encourage you to submit your proxy votes to the Company’s registrars, Equiniti, as early
as possible. Further information on how you can submit your proxy votes can be found on page 188.
The deadline for submitting proxy votes is 12.00 noon on Tuesday 5 September 2023.
Notice is hereby given that the 2023 Annual General Meeting of PayPoint Plc (the ‘Company’) will be
held at the Company’s head oce, 1 The Boulevard, Shire Park, Welwyn Garden City, Hertfordshire AL7
1EL on Thursday 7 September 2023 at 12.00 noon. You will be asked to consider and pass the following
resolutions. Resolutions 1 to 14 (inclusive) will be proposed as ordinary resolutions, and Resolutions
15 to 18 (inclusive) will be proposed as special resolutions.
Routine business
1. Directors’ Report and Accounts
To receive the accounts for the financial year ended 31 March 2023 together with the Directors’
report and the auditors’ report on those accounts.
2. Directors’ Remuneration Policy
To approve the Directors’ Remuneration Policy, set out on pages 104 to 123 of the annual report
2023, to take eect from 7 September 2023.
3. Directors’ Remuneration Report
To approve the Directors’ Remuneration Report (excluding the Directors’ Remuneration Policy) for
the financial year ended 31 March 2023 as set out on pages 104 to 123 of the annual report 2023.
4. Declaration of final dividend
To declare a final dividend of 9.3 pence per ordinary share of the Company for the year ended
31 March 2023.
5. Re-election of Director – Rosie Shapland
To re-elect Rosie Shapland as a Director.
6. Re-election of Director – Gill Barr
To re-elect Gill Barr as a Director.
7. Re-election of Director – Giles Kerr
To re-elect Giles Kerr as a Director.
8. Re-election of Director – Rakesh Sharma
To re-elect Rakesh Sharma as a Director.
9. Re-election of Director – Nick Wiles
To re-elect Nick Wiles as a Director.
10. Re-election of Director – Ben Wishart
To re-elect Ben Wishart as a Director.
11. Election of Director- Guy Parsons
To elect Guy Parsons as a Director who, having been appointed since the last AGM of the Company,
oers himself for election in accordance with the Company’s Articles of Association.
12. Appointment of Auditor
To confirm the appointment of Pricewaterhouse Coopers LLP as auditor of the Company until the
conclusion of the next AGM of the Company at which the accounts are laid.
13. Auditor’s remuneration
To authorise the Directors to determine the auditor’s remuneration.
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183 PayPoint Plc Annual Report 2023 Strategic report Governance Shareholder informationFinancial statements
Special business
14. Directors’ authority to allot shares
That the Board be generally and unconditionally authorised under section 551 of the Companies Act
2006 to allot shares in the Company and to grant rights to subscribe for or convert any security into
shares in the Company:
(A) up to a nominal amount of £72,576.09 (such amount to be reduced by any allotments or grants
made under paragraph (B) below in excess of such sum); and
(B) comprising equity securities (as defined in section 560(1) of the Companies Act 2006) up to a
nominal amount of £145,152.19 (such amount to be reduced by any allotments or grants made
under paragraph (A) above) in connection with an oer by way of a rights issue:
(i) to ordinary shareholders in proportion (as nearly as may be practicable) to their existing
holdings; and
(ii) to holders of other equity securities as required by the rights of those securities or as the
Board otherwise considers necessary,
and so that the Board may impose any limits or restrictions and make any arrangements which it
considers necessary or appropriate to deal with treasury shares, fractional entitlements, record
dates, legal, regulatory or practical problems in, or under the laws of, any territory or any other matter,
such authorities to apply until the close of business on 7 December 2024 or, if earlier, the AGM in
2024 but, in each case, during this period the Company may make oers and enter into agreements
which would, or might, require shares to be allotted or rights to subscribe for or convert securities
into shares to be granted aer the authority ends and the Board may allot shares or grant rights to
subscribe for or convert securities into shares under any such oer or agreement as if the authority
had not ended.
15. Disapplication of pre-emption rights
That if Resolution 14 is passed, the Board be authorised to allot equity securities (as defined in the
Companies Act 2006) for cash under the authority given by that resolution and/or to sell ordinary
shares held by the Company as treasury shares for cash as if section 561 of the Companies Act 2006
did not apply to any such allotment or sale, such authority to be limited:
(A) the allotment of equity securities and sale of treasury shares for cash in connection with an oer
of, or invitation to apply for, equity securities (but in the case of the authority granted under
paragraph (B) of Resolution 14, by way of a rights issue only):
(i) to ordinary shareholders in proportion (as nearly as may be practicable) to their existing
holdings; and
(ii) to holders of other equity securities, as required by the rights of those securities or, as the
Board otherwise considers necessary;
(B) to the allotment of equity securities or sale of treasury shares (otherwise than under paragraph
(A) above) up to a nominal amount of £21,772.83 representing approximately 10 per cent of the
aggregate nominal amount of the share capital of the Company (excluding treasury shares) as at
10 July 2023; and
(C) to the allotment of equity securities or sale of treasury shares (otherwise than under paragraph
(A) or paragraph (B) above) up to a nominal amount equal to 20% of any allotment of equity
securities or sale of treasury shares from time to time under paragraph (B) above, such authority
to be used only for the purposes of making a follow-on oer which the Board of the Company
determines to be of a kind contemplated by paragraph 3 of Section 2B of the Statement of
Principles on Disapplying Pre-emption Rights most recently published by the Pre-emption Group
prior to the date of this notice,
such authority to expire at the end of the next AGM of the Company (or, if earlier, at the close of
business on 7 December 2024 but, in each case, prior to its expiry the Company may make oers,
and enter into agreements, which would, or might, require equity securities to be allotted (and
treasury shares to be sold) aer the authority expires and the Board may allot equity securities
(and sell treasury shares) under any such oer or agreement as if the authority had not expired.
16. Additional disapplication of pre-emption rights
That if Resolution 14 granting the authority to allot shares is passed, the Board be authorised
in addition to any authority granted under Resolution 15 (first disapplication resolution) to allot
equity securities (as defined in the Companies Act 2006) for cash under the authority given by that
resolution and/or to sell ordinary shares held by the Company as treasury shares for cash as if section
561 of the Companies Act 2006 did not apply to any such allotment or sale, such authority to be:
(A) limited to the allotment of equity securities or sale of treasury shares up to a nominal amount
of £21,772.83 representing approximately 10 per cent of the aggregate nominal amount of
the share capital of the Company (excluding treasury shares) as at 10 July 2023 such authority
to be used only for the purposes of financing (or refinancing, if the authority is to be used
within 12 months aer the original transaction) a transaction which the Board of the Company
determines to be either an acquisition or a specified capital investment of a kind contemplated
by the Statement of Principles on Disapplying Pre-emption Rights most recently published by
the Pre-Emption Group prior to the date of this notice; and
(B) limited to the allotment of equity securities or sale of treasury shares (otherwise than under
paragraph (A) above) up to a nominal amount equal to 20% of any allotment of equity securities or
sale of treasury shares from time to time under paragraph (A) above, such authority to be used only
for the purposes of making a follow-on oer which the Board of the Company determines to be of
a kind contemplated by paragraph 3 of Section 2B of the Statement of Principles on Disapplying
Pre-emption Rights most recently published by the Pre-emption Group prior to the date of
this notice,
such authority to expire at the end of the next AGM of the Company (or, if earlier, at the close
of business on 7 December 2024 but, in each case, prior to its expiry the Company may make
oers, and enter into agreements, which would, or might, require equity securities to be allotted
(and treasury shares to be sold) aer the authority expires and the Board may allot equity securities
(and sell treasury shares) under any such oer or agreement as if the authority had not expired.
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184 PayPoint Plc Annual Report 2023
17. Company’s authority to purchase its own shares
That the Company be authorised for the purposes of section 701 of the Companies Act 2006 to
make one or more market purchases (as defined in section 693(4) of the Companies Act 2006)
of its ordinary shares of 1/3 pence each, provided that:
(A) the maximum number of ordinary shares hereby authorised to be purchased is 7,257,609;
(B) the minimum price which may be paid for an ordinary share is 5 pence and the maximum price
which may be paid for an ordinary share is the highest of:
(i) an amount equal to 5% above the average market value of an ordinary share for the five
business days immediately preceding the day on which that ordinary share is contracted
to be purchased; and
(ii) the higher of the price of the last independent trade of an ordinary share and the highest
current independent bid for an ordinary share on the trading venues where the purchase is
carried out at the relevant time, in each case, exclusive of expenses;
such authority to apply to apply until the close of business on 7 December 2024 or, if earlier, the
AGM in 2024 but in each case so that during this period the Company may enter into a contract to
purchase ordinary shares which would, or might be, completed or executed wholly or partly aer the
authority ends and the Company may purchase ordinary shares pursuant to any such contract as if
the authority had not ended.
18. Calling of general meetings on 14 days’ notice.
That any general meeting of the Company that is not an AGM may be called on not less than 14 clear
days’ notice.
Recommendation
With respect to Resolutions 5 to 11(inclusive), the Chairman confirms that, based on the performance
evaluation undertaken during the period, each of the retiring Directors’ performance continues to be
eective and to demonstrate commitment to the role. The Board has considered this and recommends
that each Director who wishes to serve again be proposed for election/re-election. This opinion is based
on an assessment of each Director’s relevant knowledge and experience and the conclusion that, in
each case, their informed opinions are of significant value and contribute greatly to Board discussions.
Biographies of the Directors including their areas of expertise relevant to their role as a Director are given
on pages 82 to 83 of the 2023 annual report.
The Directors believe that the proposals described in this Notice of Meeting are in the best interests of
the Company and its shareholders as a whole and recommend shareholders to support them by voting
in favour of all the resolutions, as they intend to in respect of their own beneficial shareholders.
By order of the Board
Brian McLelland
Company Secretary
27 July 2023
Registered oce:
1 The Boulevard
Shire Park
Welwyn Garden City
Hertfordshire AL7 1EL
United Kingdom
Registered in England and Wales
Company No. 03581541
Notice of Annual General Meeting continued
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185 PayPoint Plc Annual Report 2023 Strategic report Governance Shareholder informationFinancial statements
Notes to the Notice of Annual General Meeting
1. Shareholders should submit their proxy vote not less than 48 hours before the time of the AGM.
A shareholder may appoint more than one proxy in relation to the AGM provided that each proxy
is appointed to exercise the rights attached to a dierent share or shares held by that shareholder.
A proxy need not be a shareholder of the Company. To appoint a proxy or proxies shareholders
must: (a) submit a proxy appointment electronically at www.sharevote.co.uk; or (b) complete a
Form of Proxy, sign it and return it, together with the power of attorney or other authority (if any)
under which it is signed, or a notarially certified copy of such authority, to the Company’s registrars,
Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA; or (c) complete a
CREST Proxy Instruction (as set out in paragraph 5 below), in each case so that it is received no later
than 12.00 noon on 5 September 2023. To appoint more than one proxy, you will need to complete
a separate Form of Proxy in relation to each appointment. A Form of Proxy for use in connection
with the AGM is enclosed with this document. Full details of the procedure to submit a proxy
electronically are given on the website www.sharevote.co.uk. To use this service, you will need your
Voting ID, Task ID and Shareholder Reference Number printed on the Form of Proxy. If you do not
have a Form of Proxy and believe that you should, please contact the Company’s registrars, Equiniti
Limited, on +44 (0)371 384 2030 (please use the country code when calling from outside the UK) or
at Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA. Lines are open
from 8.30am to 5.30pm, Monday to Friday (except public holidays in England and Wales).
2. A member entitled to attend, speak and vote at the AGM may appoint a proxy (who need not be a
member of the Company) to exercise all or any of his or her rights to attend and to speak and vote
on his or her behalf. A member may appoint more than one proxy in relation to a meeting provided
that each proxy is appointed to exercise the rights attached to a dierent share or shares held by
him or her. To appoint more than one proxy please contact the Company’s registrar using the details
provided above. CREST members should utilise the CREST electronic proxy appointment service in
accordance with the procedures set out below, and in each case must be received by the Company
not less than 48 hours before the time of the meeting. You must inform the Company’s registrar in
writing of any termination of the authorities of a proxy.
3. Any person to whom this notice is sent who is a person nominated under section 146 of the
Companies Act 2006 to enjoy information rights (a ‘Nominated Person’) may, under an agreement
between him/her and the shareholder by whom he/she was nominated, have a right to be appointed
(or to have someone else appointed) as a proxy for the AGM. If a Nominated Person has no such
proxy appointment right or does not wish to exercise it, he/she may, under any such agreement,
have a right to give instructions to the shareholder as to the exercise of voting rights.
4. The statement of the rights of shareholders to appoint a proxy in paragraphs one and two above
does not apply to Nominated Persons. The rights described in these paragraphs can only be
exercised by shareholders of the Company. Nominated Persons are reminded that they should
contact the registered holder of their shares (and not the Company) on matters relating to their
investments in the Company.
5. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy
appointment service may do so for the AGM and any adjournment thereof by using the procedures
described in the CREST manual. CREST personal members or other CREST sponsored members, and
those CREST members who have appointed a voting service provider(s) should refer to their CREST
sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.
In order for a proxy appointment, or instruction, made by means of CREST to be valid, the appropriate
CREST message (a CREST proxy instruction) must be properly authenticated in accordance with
Euroclear UK & Ireland Limited’s (‘EUI’) specifications and must contain the information required for
such instructions, as described in the CREST manual. The message, regardless of whether it relates
to the appointment of a proxy or to an amendment to the instruction given to a previously appointed
proxy must, in order to be valid, be transmitted so as to be received by the issuer’s agent (ID RA19)
by the latest time(s) for receipt of proxy appointments specified in the notice of AGM. For this
purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to
the message by the CREST applications host) from which the issuer’s agent is able to retrieve the
message by enquiry to CREST in the manner prescribed by CREST. The Company may treat as invalid
a CREST proxy instruction in the circumstances set out in Regulation 35(5) of the Uncertificated
Securities Regulations 2001. CREST members and, where applicable, their CREST sponsors or voting
service providers should note that EUI does not make available special procedures in CREST for any
particular messages. Normal system timings and limitations will therefore apply in relation to the input
of CREST proxy instructions. It is therefore the responsibility of the CREST member concerned to
take (or, if the CREST member is a CREST personal member or sponsored member or has appointed
a voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s))
such action as shall be necessary to ensure that a message is transmitted by means of the CREST
system by any particular time. In this connection, CREST members and, where applicable, their CREST
sponsors or voting service providers are referred, in particular, to those sections of the CREST
manual concerning practical limitations of the CREST system and timings.
If you are an institutional investor you may be able to appoint a proxy electronically via the Proxymity
platform, a process which has been agreed by the Company and approved by the Registrar.
For further information regarding Proxymity, please go to www.proxymity.io. Your proxy must be
lodged by 12.00 noon on 5 September 2023 in order to be considered valid. Before you can appoint
a proxy via this process you will need to have agreed to Proxymity’s associated terms and conditions.
It is important that you read these carefully as you will be bound by them and they will govern the
electronic appointment of your proxy.
6. Any corporation which is a member can appoint one or more corporate representatives who may
exercise on its behalf all of its powers as a member provided that they do not do so in relation to the
same shares. If you hold your shares through a Nominee and wish to attend the meeting please bring
the relevant entitlement to attend documentation.
7. To be entitled to attend and vote at the AGM or any adjournment thereof (and also for the purpose
of calculating how many votes a person may cast), a person must have his/her name entered on the
register of members of the Company by 6:30pm on 5 September 2023 (or by close of business
on the date being two days before any adjourned meeting). Changes to entries on the register of
members aer this time shall be disregarded in determining the rights of any person to attend or
vote at the meeting.
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186 PayPoint Plc Annual Report 2023
8. Biographical details of the Directors of the Company are shown on pages 82-83 of the 2023
annual report.
9. Each member attending the meeting has the right to ask questions relating to the business being
dealt with at the meeting which, in accordance with section 319A of the Companies Act 2006 and
subject to some exceptions, the Company must cause such questions to be answered. However, no
such answer need be given if:
(a) to do so would interfere unduly with the preparation for the meeting or involve the disclosure
of confidential information;
(b) the answer has already been given on a website in the form of an answer to a question; or
(c) it is undesirable in the interests of the Company or the good order of the meeting that the
question be answered.
10. Information relating to the meeting which the Company is required by section 311A of the
Companies Act 2006 to publish on a website in advance of the meeting may be viewed at
www.paypoint.com. A member may not use any electronic address provided by the Company in
this document or with any proxy appointment form or in any website for communicating with the
Company for any purpose in relation to the meeting other than as expressly stated in it.
11. It is possible that, pursuant to members’ requests made in accordance with section 527 of
the Companies Act 2006, the Company will be required to publish on a website a statement in
accordance with section 528 of that Act setting out any matter that the members concerned
propose to raise at the meeting relating to: (i) the audit of the Company’s accounts (including
the auditor’s report and the conduct of the audit) that are to be laid before the AGM; or (ii) any
circumstances connected with an auditor of the Company ceasing to hold oce since the previous
meeting at which annual accounts and reports were laid. The Company cannot require the members
concerned to pay its expenses in complying with those sections. The Company must forward any
such statement to its auditor by the time it makes the statement available on the website. The
business which may be dealt with at the meeting includes any such statement.
12. The issued share capital of the Company as at 10 July 2023, the latest practicable date before
publication of this notice, was 72,576,094 ordinary shares of 0.03 pence each, carrying one vote
each. The Company holds no treasury shares. The total number of voting rights in the Company
on 10 July 2023 is 72,576,094.
13. The Directors’ service agreements, Directors’ letters of appointment and Directors’ deeds
of indemnity are available for inspection at the registered oce of the Company. Email:
CompanySecretary@paypoint.com during normal business hours on any weekday (excluding public
holidays). Copies of these documents will also be available at the place of the AGM from 15 minutes
before the meeting until it ends.
Notes to the Notice of Annual General Meeting continued
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187 PayPoint Plc Annual Report 2023 Strategic report Governance Shareholder informationFinancial statements
Explanatory notes to certain of the resolutions to be proposed at the Annual General Meeting
Resolution 1: To receive the Directors’ report and accounts
The Board asks that shareholders receive the Strategic Report, Directors’ Report and the financial
statements for the year ended 31 March 2023, together with the report of the auditor.
Resolution 2: Directors’ Remuneration Policy
There are two remuneration resolutions this year. The first is to seek approval for our future Directors
Remuneration Policy, which is intended to take eect from 7 September 2023. Our existing policy was
approved at the 2020 AGM and a new policy must be put forward for approval by shareholders at least
every three years. This resolution will be a binding vote and the Directors can only receive remuneration
if it is within the approved Remuneration Policy. If Resolution 2 is not passed, our existing Directors’
Remuneration Policy, approved at the 2020 AGM will continue in eect until a new policy is approved
by shareholders.
Shareholders are asked to approve the Directors’ Remuneration Policy that appears on pages
106-109 of the 2023 annual report. A summary of the changes made in the proposed 2023 policy
is set out below:
1) Restricted Share Awards (‘RSAs’)
Under the current RSA Policy, RSAs granted to Executive Directors vest over three years (50% of
awards), four years (25% of awards) and five years (25% of awards) subject to an assessment of the
discretionary underpin. Once RSAs have vested, a holding period applies such that any resulting shares,
other than those sold to pay employee taxes, may not be sold until at least five years from the grant date.
However, in future the Committee wishes to simplify the vesting such that RSAs granted to Executive
Directors aer the 2023 AGM will vest aer three years from grant (subject to satisfaction of the
underpin) with a two-year post vesting holding period. No changes will be made to existing awards.
Such a change simplifies the approach going forward, significantly reducing the administration
surrounding multiple vesting dates across multiple awards and will align with the approach to granting
RSAs below Board level. In addition, as evidenced during the recent search for our incoming Finance
Director, a three-year vesting with a two-year holding period will more closely align PayPoint’s approach
to evolving RSA market practice.
2) Pension Policy
The maximum value of pension provision in the current Policy for current Executive Directors is 15% of
salary. However, noting that the Chief Executive has received, and any new Finance Director will receive,
a workforce-aligned pension provision from appointment, the 15% of salary Policy maximum will be
replaced by a requirement to oer workforce aligned pension provision (which is currently 5% of salary)
to Executive Directors.
3) Annual Bonus
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, the new Policy states that should bonus potential be increased from 106% of salary to a more
market-aligned 150% of salary in the future (and as permitted under the current Policy), the on-target
bonus potential will be reduced to 50% of maximum in line with market norms. Appropriate shareholder
consultation would be carried out should Executive Director bonus potential be increased up to the
Policy maximum going forward.
4) Introduction of ESG Performance Metrics
A widening of potential performance metrics in respect of both the annual bonus and the RSA underpin
to explicitly permit the operation of ESG-based targets going forward to the extent that this is
considered appropriate.
Resolution 3: Directors’ Remuneration Report
Shareholders are asked to approve the Directors’ Remuneration Report that appears on pages 104-123
of the 2023 annual report. This vote is advisory, and the Directors’ entitlement to remuneration is not
conditional on it.
Resolution 4: Declaration of final dividend
Shareholders are being asked to approve a final dividend of 9.3 pence per ordinary share for the year
ended 31 March 2023. Subject to approval, the dividend will be paid on 22 September 2023 to the
holders of ordinary shares whose names are recorded on the register of members at the close of
business on 11 August 2023.
Resolutions 5–11: Directors
The Directors believe that the Board continues to maintain an appropriate balance of knowledge and
skills and that all the Non-Executive Directors are independent in character and judgment. This follows
a process of formal evaluation, which confirms that each Director makes an eective and valuable
contribution to the Board and demonstrates commitment to the role (including making sucient time
available for Board and Committee meetings and other duties as required). In accordance with the UK
Corporate Governance Code and in line with previous years, all Directors will again stand for election or
re-election, as relevant, at the AGM this year. Biographies are available on pages 82-83 of the annual
report. It is the Board’s view that the Directors’ biographies illustrate why each Director’s contribution
is, and continues to be, important to the Company’s long-term sustainable success.
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188 PayPoint Plc Annual Report 2023
Resolutions 12 and 13: Appointment and remuneration of auditor
The Company is required to appoint or reappoint an auditor at each general meeting at which
accounts are presented to shareholders. Following the resignation of KPMG LLP as auditor, the
Directors recommend Pricewaterhouse Coopers LLP be appointed as auditor for the financial year ending
31 March 2024. Resolution 13 grants authority to the Company to determine the auditor’s remuneration.
Resolution 14: Directors’ authority to allot shares
Paragraph (A) of this resolution would give the Directors the authority to allot ordinary shares or grant
rights to subscribe for or convert any securities into ordinary shares up to an aggregate nominal amount
equal to £72, 576.09 (representing 24,192,031 ordinary shares of 0.03 pence each). This amount
represents approximately one-third of the issued ordinary share capital of the Company as at 10 July 2023,
the latest practicable date prior to publication of this notice. In line with guidance issued by the Investment
Association, paragraph (B) of this resolution would give the Directors authority to allot ordinary shares or
grant rights to subscribe for or convert any securities into ordinary shares in connection with a rights issue
in favour of ordinary shareholders up to an aggregate nominal amount equal to £145,152.19 (representing
48,384,062 ordinary shares of 0.03 pence each), as reduced by the nominal amount of any shares issued
under paragraph (A) of this resolution. This amount (before any reduction) represents approximately
two-thirds of the issued ordinary share capital of the Company as at 10 July 2023, being the latest
practicable date prior to publication of this notice. The authorities sought under paragraphs (A) and (B) of
this resolution will expire at the close of business on 7 December 2024 or, if earlier, the AGM in 2024. The
Directors have no present intention to exercise either of the authorities sought under this resolution, other
than to allot ordinary shares as following the exercise of options and awards under the Company’s share
schemes. However, if they do exercise the authorities, the Directors intend to follow Investment Association
recommendations concerning their use. As at the date of this Notice, the Company does not hold any
shares in treasury.
Resolutions 15 and 16: Authority to disapply pre-emption rights
Resolutions 15 and 16 are proposed as special resolutions. If the Directors wish to allot new shares and
other equity securities, or sell treasury shares, for cash (other than in connection with an employee share
scheme), company law requires that these shares are first oered to shareholders in proportion to their
existing holdings.
In accordance with the Pre-emption Group’s Statement of Principles 2022 on Disapplying Pre-emption
Rights (Statement of Principles 2022), the Directors are seeking authority to disapply pre-emption rights
in two separate resolutions:
• the first, Resolution 15, seeks authority for the Directors to disapply pre-emption rights and issue
shares in connection with rights issues, or otherwise to issue shares for cash, including the sale on
a non-pre-emptive basis of any shares the Company holds in treasury for cash, up to an aggregate
nominal amount representing 10% of the Company’s issued share capital, together with authority for
a further disapplication of pre-emption rights up to an aggregate nominal amount representing 2% of
issued share capital, to be used only for the purposes of a follow-on oer (see further below); and
• the second, Resolution 16 seeks authority seeks for the Directors to disapply pre-emption rights
and allot new shares and other equity securities up pursuant to the allotment authority given by
Resolution 14 or sell treasury shares for cash up to an aggregate nominal amount representing an
additional 10% of the Company’ issued share capital but only in connection with transactions which
the Directors determine to be either an acquisition or special capital investment as defined by the
Statement of Principles 2022, with authority for a further disapplication of pre-emption rights up
to an agreed nominal amount representing 2% of the issued share capital to be used only for the
purposes of a follow-on oer.
If the Directors wish to allot new shares or other equity securities, or sell treasury shares, for cash
(other than in connection with an employee share scheme), company law requires that these shares
are first oered to shareholders in the proportion to their existing holdings. However as at previous
annual general meetings, and in line with the Statement of Principles 2022, Resolution 15 authorises
the Directors to allot equity securities for cash without first oering them to existing shareholders in
proportion to their existing holdings. In certain circumstances it may be in the best interests of the
Company to allot shares (or to grant rights over shares) for cash or to sell treasury shares for cash
without first oering them to existing shareholders in proportion to their holdings. However, the authority
granted by Resolution 15 would be limited to allotments of shares for cash or sales of treasury shares
for cash:
(i) by way of a rights issue (subject to certain exclusions); or by way of an open oer or other oer
of securities (not being a rights issue) in favour of existing shareholders in proportion to their
shareholdings (subject to certain exclusions):
(ii) up to an aggregate nominal amount of £21,772.83 (representing 7,257,609 shares); or
(iii) otherwise up to an aggregate nominal amount of £4,354.57 (representing 1,451,522 shares for the
purposes only of a follow-on oer as described in the Statement of Principles 2022).
The aggregate nominal amounts above represent approximately 10% and 2% respectively of the issued
ordinary share capital in the Company as at 10 July 2023, being the latest practicable date prior to the
publication of this Notice.
Resolution 16 gives the Directors authority to allot shares (or to sell any shares which the Company
may purchase and elect to hold as treasury shares) for cash without first oering them to existing
shareholders in proportion to their existing shareholdings up to:
(i) an additional 10% of issued share capital in connection with an acquisition or specified capital
investment; or
(ii) up to an additional 2% of issued share capital for the purposes only of a follow-on oer as described
in the Statement of Principles 2022. This is also in line with the Statement of Principles 2022.
The Directors confirm that they will only allot shares representing an additional 10% of the issued
share capital of the Company for cash pursuant to the authority referred to in Resolution 16, where
the allotment is in connection with an acquisition or specified capital investment (as defined in the
Statement of Principles 2022) which is announced contemporaneously with the allotment, or which has
taken place in the preceding 12-month period and is disclosed in the announcement of the allotment.
The authority sought by the Directors in both Resolution 15 and Resolution 16 extends the authority
to allot shares representing up to a further 2% of issued share capital in each case for the purposes of
a follow-on oer. The Statement of Principles 2022 provides for this as a possible means of enabling
smaller and retail shareholders in the Company to participate in a non-pre-emptive equity issue when
it may not be possible (for timing or other reasons) for them to participate in a particular placing being
undertaken. The Statement of Principles 2022 sets out he expected features of any such follow-on oer,
including in relation to qualifying shareholders, monetary caps on the amount qualifying shareholders can
subscribe and the issue price of the shares.
The aggregate nominal amount to be allotted under Resolutions 15 and 16 combined represents 24% of
the issued share capital of the Company as at 10 July 2023, being the latest practicable date prior to the
publication of this Notice.
Explanatory notes to certain of the resolutions to be proposed at the Annual General Meeting continued
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189 PayPoint Plc Annual Report 2023 Strategic report Governance Shareholder informationFinancial statements
In respect of Resolutions 15 and 16, the Directors confirm their intention to follow the provisions of
the Statement of Principles 2022, wherever practicable, and to consult with major shareholders (to the
extent reasonably practicable and permitted by law) in advance of the Directors exercising their authority
under either Resolution 15 or 16 to issue shares, except in connection with routine allotments under
employee share schemes.
The Directors have no present intention of exercising either of the authorities granted by Resolution
15 or 16 but they consider their grants to be appropriate in order to preserve maximum flexibility in
the future.
Both authorities will expire on the earlier of either the conclusion of the next annual general meeting
of the Company or the close of business on 7 December 2024.
Resolution 17: Authority to make market purchases of ordinary shares
Resolution 17 is another special resolution and renews the Directors’ authority granted by the
shareholders at previous AGMs to make market purchases of up to 10% of the Company’s issued
ordinary shares (excluding any treasury shares). The Company may make purchases of its own shares if,
having taken account of all major factors such as the eect on earnings and net asset value per share,
gearing levels and alternative investment opportunities, such purchases are considered to be in the
Company’s and shareholders’ best interests while maintaining an ecient capital structure.
If the Company purchases any of its ordinary shares pursuant to Resolution 17, the Company may cancel
these shares or hold them in treasury. Such decision will be made by the Directors at the time of purchase.
The minimum price, exclusive of expenses, which may be paid for an ordinary share is 5 pence. The maximum
price, exclusive of expenses, which may be paid for an ordinary share is the highest of: (i) an amount equal to
5% above the average market value for an ordinary share for the five business days immediately preceding
the date of the purchase; and (ii) the higher of the price of the last independent trade and the highest
current independent bid on the trading venues where the purchase is carried out at the relevant time.
At last year’s annual general meeting, the Company was given authority to make market purchases of
up to 6,895,790 shares. No shares have been purchased by the Company in the market since then.
Options to subscribe for a total of 699,433 shares, being 0.96% of the issued ordinary share capital, were
outstanding at 10 July 2023 (being the latest practicable date prior to the publication of this notice). If
the existing authority given at the 2022 AGM and the authority being sought under Resolution 17 were
to be fully used, these would represent 10.96% of the Company’s issued ordinary share capital at that
date. The Directors do not have any current plans to exercise the authority to be granted pursuant to
Resolution 17. The Directors will exercise this authority only when to do so would be in the best interests
of the Company, and of its shareholders generally. The authority will expire at the earlier of 7 December
2024 and the conclusion of the AGM of the Company held in 2024.
Resolution 18: Authority to allow any general meeting of the Company that is not an annual
general meeting to be called on not less than 14 clear days’ notice
The minimum notice period for general meetings of listed companies is 21 days, but companies may
reduce this period to 14 days (other than for annual general meetings) provided that:
(a) the Company oers a facility for shareholders to vote by electronic means. This condition is met if
the Company has a facility enabling all shareholders to appoint a proxy by means of a website; and
(b) on an annual basis, a shareholders’ resolution approving the reduction of the minimum notice period
from 21 days to 14 days is passed.
The Board is therefore proposing this resolution as a special resolution to approve 14 days as the
minimum period of notice for all general meetings of the Company other than an annual general meeting.
The approval of this resolution will be eective until the end of the 2024 annual general meeting of the
Company, when it is intended that the approval will be renewed. The Board intends that the shorter
notice period will only be used in limited exceptional circumstances which are time-sensitive, rather than
as a matter of routine, and only where the flexibility is merited by the business of the meeting and is
thought to be in the interests of shareholders as a whole. The Directors do not have any current intention
to exercise this authority but consider it appropriate to ensure that the Company has the necessary
flexibility to respond to all eventualities.
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190 PayPoint Plc Annual Report 2023
Directors
G Barr
1
A Dale
G Kerr
1
(Chairman)
G Parsons
1
R Shapland
1
R Sharma
1
N Wiles
B Wishart
1
Company Secretary
B McLelland
Registered oce
Registered in England and Wales
Company number 03581541
Independent auditor
KPMG LLP
15 Canada Square
London E14 5GL
United Kingdom
Registrar
Equiniti
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
United Kingdom
1 Non-Executive Directors.
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PayPoint Plc Annual Report 2023
1 The Boulevard
Shire Park
Welwyn Garden City
Hertfordshire AL7 1EL
United Kingdom
Tel +44 (0)1707 600 300
Fax +44 (0)1707 600 333
www.paypoint.com