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Paypoint Plc LSE:PAY London Ordinary Share GB00B02QND93 ORD 1/3P
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Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Support Services 127.7 19.4 31.5 18.7 404

Paypoint plc Paypoint Plc: Preliminary Results Year Ended 31 March 2021

27/05/2021 7:00am

UK Regulatory (RNS & others)


 
TIDMPAY 
 
   PayPoint Plc 
 
   Preliminary Results 
 
   Year ended 31 March 2021 
 
   Transformative year for the PayPoint Group with significant step change 
in strategic delivery 
 
 
 
 
                                                        Restated(1) 
Year ended 31 March 2021                       2021        2020       Change 
------------------------------------------ 
Revenue from continuing operations           GBP127.7m    GBP144.3m    (11.5)% 
Net revenue from continuing operations(2)     GBP97.1m    GBP106.8m     (9.1)% 
Operating margin from continuing 
 operations before exceptional 
 items(3)                                        38.0%        47.2%  (9.2)ppts 
Profit before tax from continuing 
 operations(4)                                GBP19.4m     GBP50.0m    (61.1)% 
Profit before tax from discontinued 
 operations                                    GBP7.6m      GBP6.8m      10.8% 
------------------------------------------ 
Underlying profit before tax from 
 continuing operations(5)                     GBP35.5m     GBP44.1m    (19.3%) 
------------------------------------------  ----------  -----------  --------- 
Diluted earnings per share                       31.3p        66.3p    (52.8)% 
Diluted earnings per share from 
 continuing operations(4)                        21.9p        58.1p    (62.3)% 
Ordinary dividend paid per share                 31.2p        47.2p    (34.0)% 
Additional dividend paid per share                   -        36.8p          - 
Ordinary reported dividend per 
 share                                           32.2p        39.2p    (17.9)% 
Final dividend                                   16.6p        15.6p       6.4% 
------------------------------------------ 
Cash generation(6)                            GBP52.2m     GBP66.4m    (21.4)% 
Cash generation from continuing 
 operations                                   GBP44.1m     GBP57.9m    (23.8)% 
Net corporate debt(7)                       GBP(68.2)m   GBP(12.0)m   (465.8)% 
Cash and cash equivalents                     GBP64.8m     GBP93.8m    (30.9)% 
------------------------------------------ 
 
 
   KEY HEADLINES 
 
 
   -- Transformative year for the Group with significant step change in 
      strategic delivery and a solid financial performance against the backdrop 
      of Covid-19 
 
   -- Strategic repositioning of the business for growth driven through 
      acquisitions of Handepay/Merchant Rentals, i-movo, RSM 2000 and 
      investments in our core UK market 
 
   -- Disposal of Romanian business completed on 8 April 2021, with proceeds of 
      GBP48 million, including a full year trading performance of GBP7.6 
      million profit before tax 
 
   -- Enlarged PayPoint Group now delivering a broader range of innovative 
      services and technology connecting millions of consumers with an expanded 
      universe of over 60,000 retailer partner and SME locations across 
      multiple sectors 
 
   -- Full ownership of Collect+ secured in April 2020, establishing a 
      technology-based delivery platform to deliver best-in-class customer 
      journeys for e-commerce brands and their customers and expand our 
      consumer Send service 
 
   -- Major client relationships renewed and expanded to digital services with 
      contract renewal programme now complete 
 
   -- Strengthened the proposition for clients and retailer partners, improved 
      engagement and service to deliver better value and support to customers, 
      and identified new areas of growth in our core UK market 
 
   -- Strong transaction growth in card payment, eMoney and parcels reflecting 
      the PayPoint Group's position to take advantage of the trends accelerated 
      through Covid-19, including the continued shift from cash to digital 
      payments, the growing demand for online shopping fulfilment and the 
      increase in shopping local 
 
   -- Provision of GBP12.5 million made as current best estimate for a 
      resolution of Ofgem's Statement of Objections 
 
   -- Final dividend declared of 16.6p, an increase of 6.4%, reflecting our 
      long-term confidence in the business 
 
 
   Nick Wiles, Chief Executive of PayPoint plc, said: 
 
   "This has been an exceptional year for PayPoint in which we have 
delivered a step change in our strategy while responding to the impact 
of Covid-19 on the business, our clients, retailer partners and their 
customers. This has required huge commitment and adaptability from 
everyone in the business to respond to these challenging circumstances 
and I would like to thank the team for their hard work throughout the 
year in supporting our clients, retailer partners and the communities 
they serve. 
 
   Against the background of delivering a solid financial performance for 
the year, we have been focused on delivering a step change in our 
strategic delivery through making the necessary business acquisitions 
and investments to strengthen our capabilities, broaden our retailer 
proposition, improve engagement and service quality for our clients and 
retailers and identify new areas of growth in our core UK market. We 
have made positive progress in this transformation of the business with 
more to achieve in the year ahead to strengthen our platform and 
maximise the opportunities available. 
 
   Further to our announcement on 30 September 2020, we continue to 
consider our response with respect to Ofgem's provisional views set out 
in its Statement of Objections. In accordance with IFRS, the Board has 
made a provision of GBP12.5 million as a current best estimate for a 
resolution of this matter. 
 
   While early in the year, we are already seeing some encouraging signs of 
continuing renewed activity in a number of areas of our business, in 
particular in card processing and parcels. We are also encouraged by the 
early performance and rapid integration of i-movo and Handepay/Merchant 
Rentals into the PayPoint business and the new opportunities arising 
from the recently completed acquisition of RSM 2000. I am confident the 
steps we have taken during the financial year have strengthened the 
business and better positioned us for both recovery in our legacy 
businesses and growth in our developing markets. As a result, we are 
confident in the business delivering further progress in the year ahead 
as we take advantage of the accelerated growth opportunities across our 
key markets." 
 
   FINANCIAL HIGHLIGHTS 
 
 
   -- Net revenue from continuing operations of GBP97.1 million (2020: GBP106.8 
      million) decreased by 9.1% on a reported basis, driven by the impact of 
      Covid-19 on UK bill payments, ATM and parcels, and partially offset by 
      growth in UK card payments, eMoney and service fees. The prior year 
      included GBP3.8 million net revenue from the British Gas contract now 
      ended; excluding this expected impact, net revenue from continuing 
      operations decreased by GBP5.9 million. Revenue from continuing 
      operations decreased by GBP16.6 million (11.5%) to GBP127.7 million 
      (2020: GBP144.3 million) with the ending of the British Gas contract 
      contributing GBP6.1 million of the decrease 
 
   -- Exceptional items of GBP16.1 million includes expenses relating to 
      acquisitions and refinancing and a provision of GBP12.5 million made in 
      relation to Ofgem's Statement of Objections. The provision is our current 
      best estimate for a resolution of this matter 
 
   -- Profit before tax from continuing operations of GBP19.4 million (2020: 
      GBP50.0 million), decreased by GBP30.6 million. This reflects the 
      decrease in net revenue from continuing operations and GBP16.1 million of 
      exceptional items 
 
   -- Profit before tax from discontinued operations of GBP7.6 million (2020: 
      GBP6.8 million) increased by GBP0.8m driven by margin improvement in bill 
      payments and top-ups 
 
   -- Underlying profit before tax from continuing operations of GBP35.5 
      million, which excludes exceptional items (2020: GBP44.1 million) 
      decreased by 19.3%. The prior year underlying profit has been adjusted to 
      exclude the impact of the British Gas contract which ended in December 
      2019, the prior year variable pay benefit from the decision to cancel 
      management bonuses and release of share based payment accruals 
 
   -- Underlying total costs from continuing operations8 of GBP61.6 million 
      (2020: GBP58.9 million) increased by 4.6%. This includes GBP2.0 million 
      of costs associated with Handepay/Merchant Rentals and i-movo since 
      acquisition. Excluding these associated costs, underlying total costs 
      from continuing operations have increased GBP0.7 million or 1.1% 
 
   -- Net corporate debt9 of GBP68.2 million (2020: GBP12.0 million) reflects 
      the impact of the strategic acquisitions made in the year. This includes 
      corporate cash balances of GBP18.3 million and borrowings of GBP86.6 
      million from the revolving credit facility, term loan and block loans as 
      of 31 March 2021. This was also prior to the benefit of the GBP48m 
      proceeds from the disposal of our Romanian business, completed shortly 
      after year end. The Romanian business generated a full year trading 
      performance of GBP7.6 million profit before tax 
 
   -- Final ordinary dividend of 16.6 pence per share (2020: 15.6 pence per 
      share) declared, representing an increase of 6.4%. The dividend will be 
      paid to shareholders in equal instalments of 8.3 pence per share on 29 
      July 2021 and 30 September 2021. The additional dividend programme ended 
      in the prior year 
 
 
   OPERATIONAL HIGHLIGHTS 
 
   Strategic repositioning of the business for growth driven through 
acquisitions and investments in core UK market 
 
 
   -- Enlarged PayPoint Group now delivering broader range of innovative 
      services and technology connecting millions of consumers with an expanded 
      universe of over 60,000 retailer partner and SME locations across 
      multiple sectors 
 
   -- Acquisition of Handepay and Merchant Rentals, completed in February 2021, 
      creates national card payments business with over 30,000 SME customers 
      and reach into food services, garages and hospitality sectors 
 
   -- Completion of i-movo acquisition in November 2020, enhances our EPoS 
      proposition with its leading secure digital voucher platform, creating 
      new opportunities with Newspaper, Government, FMCG, Utilities and banking 
      clients 
 
   -- Full ownership of Collect+ secured in April 2020, establishing a 
      technology-based delivery platform to deliver best-in-class customer 
      journeys for e-commerce brands and their customers and a platform for 
      Send service expansion 
 
   -- RSM 2000, acquired in early April 2021, enhances our digital payments 
      capability, bringing strategic Direct Debit platform, adding innovative 
      mobile payment products and enabling reach into new sectors, including 
      charities, not-for-profit organisations, events and SMEs in the UK 
 
   -- Disposal of Romanian business to Innova Capital completed on 8 April 
      2021, underpinning UK-focused strategy 
 
 
   Strong progress against strategic priorities, delivering growth and 
unlocking incremental opportunities 
 
   1.   Embed PayPoint at the heart of convenience retail 
 
 
   -- PayPoint One sites increased by 1,707 to 17,805 since 31 March 2020 
 
   -- PayPoint card payments transactions grew significantly by 53.8% to 210.4 
      million, benefiting from the increase in convenience store sales and the 
      preference of consumers and stores for paying by card 
 
   -- Good progress on enhancing our retailer proposition to increase footfall, 
      revenue opportunities, service and engagement with our retailer partners 
      through a number of important initiatives ready to launch in 2021, 
      including FMCG proposition that uses digital vouchering, digital screen 
      advertising, sales data, and PayPoint's retailer engagement channels, to 
      drive in-store activity and execution 
 
   -- Home delivery proposition on target for launch in Summer 2021, in 
      partnership with Snappy Shopper, fulfilling customer orders from 
      partnered stores with home delivery and click and collect 
 
   -- Strengthened EPoS adoption and support to retailers through the Try 
      Before You Buy initiative in Q2 2020 
 
   -- Driven significant improvements in retailer partner experience, including 
      introduction of Retail Services Hub to align retailer-facing service 
      resource, new phone system enabling improvement in calls answered to 97% 
      and improved Trustpilot score of 4.8/5 
 
   -- Positive progress on our banking proposition with our pioneering LINK 
      Counter Service 'cashback without purchase' solution -- trial now 
      extended till October 2021, with legislation now implemented enabling 
      full rollout across the retail network in late 2021 
 
 
   2.   PayPoint becomes the definitive parcel point solution 
 
 
   -- 10,509 live parcel sites as of 31 March 2021 -- increase of 1,863 sites 
      since 31 March 2020 
 
   -- Good growth in transaction volumes to 26.6 million, an increase of 8.3% 
      year on year (2020: 24.5 million), in spite of the impact of lockdowns 
      earlier in the year 
 
   -- Three new partnerships successfully launched with DPD, Hubbox and 
      Parcels2Go, adding to comprehensive portfolio of leading e-commerce 
      brands, including Amazon, eBay, DHL, Yodel and Fedex 
 
   -- Secured full ownership of Collect+ in April and new Collect+ website 
      launched, giving control of consumer experience as well as a platform for 
      Send service expansion 
 
   -- Investment in 3,600 Zebra thermal printers yielded improved customer 
      experience and transaction growth -- 32% of returns (351k transactions) 
      were printed in store in March 2021 with 52% of those transactions using 
      the new technology 
 
   -- Send service, enabling customers to send parcels from our network, 
      successfully launched in March 2021, with supporting marketing trial in 
      progress in Manchester -- early interest and volumes promising in first 
      few weeks 
 
 
   3.   Sustain leadership in 'pay-as-you-go' and grow digital bill 
payments 
 
 
   -- Major relationships renewed and expanded to digital services with client 
      contract renewal programme now complete -- 36 renewals completed in the 
      period, including EON, securing multiple year commitments and delivering 
      a broader range of services from our MultiPay digital payments portfolio 
 
   -- Continued diversification from cash to digital solutions - 34 new clients 
      signed, with 23 coming from non-energy sectors and 8 taking digital 
      payments solutions, including Nursing and Midwifery Council, BBC TV 
      Licensing and Curo Group 
 
   -- Continued strong growth in eMoney, with transactions increasing by 24.9% 
      and a 25.8% increase in net revenue 
 
   -- Continued demand for our Cash Out service due to ongoing Government meal 
      voucher schemes and Covid-19 related hardship funds, supporting local 
      authorities and charities in the rapid disbursement of emergency funds 
 
 
   Several MultiPay product portfolio enhancements launched in year, 
including Direct Debit, PayByLink (reducing collections payment friction 
and debt management support via personalised SMS reminders containing a 
payment link) and Event Streamer (enabling view of live cash 
transactions in real-time in MultiPay platform, alongside other digital 
payments channels) 
 
   4.   Building a delivery focused organisation and culture 
 
 
   -- Good progress on integration of Handepay, Merchant Rentals and i-movo 
      acquisitions, with work well underway for RSM2000 acquisition completed 
      on 12 April 2021 
 
   -- Executive Board strengthened to deliver growth and focus on UK market 
 
   -- Number of internal promotions within the business to strengthen our 
      efforts on retailer partner product delivery and IT 
 
   -- Alan Dale was appointed to the Board as Finance Director on 20 November 
      2020, after acting as Interim Finance Director since July 2020 
 
   -- Rosie Shapland was appointed to the Board as an Independent Non-Executive 
      Director and assumed chairmanship of the Audit Committee from 1 December 
      2020 
 
   -- Greater focus on systems resilience and service delivery to support our 
      clients, retailer partners and consumers 
 
   -- Next phase of CRM now fully rolled out to Contact Centre, enabling 
      'single customer view' of retailer, enhanced retailer experience and 
      Salesforce Maps functionality now being rolled out to optimise field team 
      journeys and productivity 
 
 
   Responding to the structural changes in our legacy markets and the 
impact of Covid-19 
 
   Going into the 2020/21 financial year, management recognised the need to 
reposition the business in response to the impact of structural changes 
in our traditional legacy markets. In addition to the full year impact 
from the loss of the British Gas contract (GBP3.8m), the business faced 
the impact of declining bill payment transactions, rate reductions to a 
number of energy client contracts on renewal and the long-term decline 
of cash usage, with its effect on our ATM business and more broadly 
across bill payments, a trend accelerated during the early days of 
Covid-19. Our response has been to: 
 
 
   -- strengthen our relationships and broaden our digital payments solutions 
      for our core energy clients 
 
   -- broaden our digital payment offer and capabilities into non-energy 
      sectors, including housing and local authorities 
 
   -- expand our cash through to digital payment capabilities and proposition, 
      including Direct Debit and card payments 
 
   -- revitalise and enhance our service and retailer proposition through a 
      combination of targeted acquisition and investment 
 
   -- establish Collect+ as the pre-eminent technology-enabled e-commerce 
      delivery platform 
 
   -- optimise our ATM estate and develop new innovative 'access to cash' 
      solutions, such as the LINK Counter Service 
 
   -- broaden our retailer proposition to deliver increased value to our 
      retailer partners, through initiatives such as launching new eMoney 
      partnerships and developing home delivery and FMCG propositions 
 
 
   Our resilient service delivery and solid trading performance through 
Covid-19 was delivered through a proactive network and product recovery 
following the first lockdown, which was then sustained over later 
national lockdowns, and supported by our resilient, sustainable 
operating model, as evidenced by the tables below. Digital payments 
(eMoney) grew strongly and card payments have continued their strong 
performance with transactions in the fourth quarter 33.6% above the 
comparative period, benefitting from the broader consumer shift from 
cash to card and to more local shopping. After the first quarter, parcel 
volumes maintained year-on-year increases throughout the rest of the 
financial year. In the first month of the current financial year, we are 
seeing encouraging signs of continuing renewed activity in our card 
payment, parcel and ATM businesses. 
 
 
 
 
                    Q1 20/21 vs                                                     Q4 20/21 vs 
                        19/20                                                           19/20 
                     % increase/     Q2 20/21 vs 19/20        Q3 20/21 vs 19/20      % increase/ 
Service              (decrease)    % increase/ (decrease)   % increase/ (decrease)   (decrease) 
------------------  ------------  -----------------------  -----------------------  ------------ 
UK bill payment 
 transactions(10)        (25.0%)                  (18.7%)                  (25.3%)       (23.7%) 
------------------  ------------  -----------------------  -----------------------  ------------ 
UK mobile top-up 
 transactions            (20.0%)                  (19.0%)                  (16.9%)       (16.6%) 
------------------  ------------  -----------------------  -----------------------  ------------ 
UK eMoney 
 transactions              12.4%                    18.4%                    25.8%         41.4% 
------------------  ------------  -----------------------  -----------------------  ------------ 
ATM transactions         (30.3%)                  (19.2%)                  (23.1%)       (24.3%) 
------------------  ------------  -----------------------  -----------------------  ------------ 
Card payment 
 transactions(11)          80.3%                    57.7%                    46.2%         33.6% 
------------------  ------------  -----------------------  -----------------------  ------------ 
Parcel 
 transactions            (13.0%)                     7.5%                     6.6%         33.8% 
------------------  ------------  -----------------------  -----------------------  ------------ 
 
 
 
 
 
 
Sites temporarily 
 suspended          As at 31 March  As at 30 June  As at 30 September  At 31 December  As at 31 March 
 due to Covid-19         2020            2020             2020              2020            2021 
------------------  --------------  -------------  ------------------  --------------  -------------- 
UK PayPoint One                328             79                  29              44              46 
------------------  --------------  -------------  ------------------  --------------  -------------- 
UK ATMs                        283            212                  26             108             124 
------------------  --------------  -------------  ------------------  --------------  -------------- 
UK Card 
 payments(2)                   293             47                  15              23              26 
------------------  --------------  -------------  ------------------  --------------  -------------- 
UK Parcels                     208             87                  18              36              42 
------------------  --------------  -------------  ------------------  --------------  -------------- 
 
 
   Well ahead of the first national lockdown, we had swiftly moved to a 
revised operating model combining remote working, some essential 
office-based activity and continued field-based support for our retailer 
partners. The safety of our people was paramount, along with actively 
minimising any disruption to services and the support provided to 
clients, consumers and retailer partners. PayPoint has not furloughed 
any of its employees or accessed any of the available government 
assistance, instead focusing on tight cost management and deployment of 
resources, as well as suspending annual salary reviews and cancelling 
management bonuses for the previous financial year. Following the 
completion of the acquisition of Handepay/Merchant Rentals, we brought 
back their employees from furlough in March 2021 to return to sales 
activity and customer support. 
 
   The resilient performance of the business through the pandemic was 
further underpinned by a series of proactive initiatives to support 
clients, retailer partners and consumers. These included launching a 
partnership with Deliveroo to give our retailer partners the capability 
to deliver goods to their local communities, the PayPoint Retailer 
Heroes awards recognising retailers who had gone above and beyond to 
support consumers through the pandemic, the waiving of service fees for 
stores closed due to Covid-19, the postponement of the annual RPI 
service fee increase and a GBP25,000 contribution to the NFRN Covid-19 
Hardship Fund, helping retailers adversely affected by Covid-19. 
 
   We believe as a result of our recognition and response to the structural 
changes in our traditional legacy markets, the business is now 
positioned with stronger and more relevant capabilities to deliver 
growth and take advantage of the enduring trends that have accelerated 
through Covid-19, including the continued shift from cash to digital 
payments, the growing demand for e-commerce fulfilment and the increase 
in shopping local. 
 
 
 
 
Enquiries 
PayPoint plc                          Finsbury (telephone: 0207 2513 
                                       801) 
Nick Wiles, Chief Executive (Mobile   Rollo Head 
 07768 636 801) 
Alan Dale, Finance Director (Mobile:  Nidaa Lone 
 07778043962) 
                                      (Email: Paypoint@finsbury.com) 
 
 
   A presentation for analysts is being held at 9.30am today, 27 May 2021, 
via webcast. This announcement is available on the PayPoint plc website: 
https://www.globenewswire.com/Tracker?data=9Q7aKMkUTfkN7o14Ph6sR1fD_7JPEx0V_lu8_KxQerQOUhAuJb97XMUXPJdZ-QGmkXCYhpuVyONj-Q3wb6ZstQ== 
corporate. 
https://www.globenewswire.com/Tracker?data=gnIoURQAJXqghXaIvA87XpW1J0aQJEIHQnagbKSJ_f-CEUuStal7Ny1X_FoeqntxSzvf-sYSKSqQsG3Ub7jvpw== 
paypoint.com 
 
   CHAIRMAN'S STATEMENT 
 
   2020 was my first year as Chairman of the PayPoint Group and also one of 
the toughest years the business has ever faced. I am delighted with the 
way the management team led by Nick Wiles and all the employees of the 
Group have responded to the challenges of the global pandemic, to be 
reporting a solid performance despite the challenges and to have 
delivered great progress against our strategic objectives. 
 
   Governance 
 
   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. The Board has this year begun to 
review the disclosures and management of climate related risks in 
readiness for the Task Force on Climate-Related Financial Disclosures. 
Full disclosure in accordance with those new regulations will be 
provided in our 2022 Annual Report. 
 
   Board succession 
 
   As announced earlier in the year, Nick became our Chief Executive in May, 
Alan Dale was appointed Finance Director in November, having acted as 
Interim Finance Director since July 2020 and Rakesh Sharma took over the 
role of Senior Independent Director from myself in May 2020. In addition, 
we welcomed Rosie Shapland, who joined the Board, in October 2020, as an 
Independent Non-Executive Director assuming the role of Chair of the 
Audit Committee in December 2020. 
 
   We have also seen some changes in the members of our Executive Board 
this year. We have welcomed Tanya Murphy, General Counsel and Head of 
Compliance; Ben Ford, Retail Services Director;; Mark Latham, Card 
Services Director, following our acquisition of Handepay/Merchant 
Rentals; and more recently Simon Coles, Chief Technology Officer 
 
   Board Evaluation 
 
   Our 2020 evaluation of the Board, its committees and individual 
Directors was externally facilitated by Oliver Zeihn of Lintstock Ltd. 
We are pleased to receive external confirmation that our Board and 
committees continue to operate effectively. 
 
   Annual General Meeting 
 
   The Company's Annual General Meeting will be held at PayPoint's 
registered office on 21 July 2021 where you will have the opportunity to 
meet the Board and members of the Executive Board. The matters to be 
approved by shareholders is set out in our Notice of Annual General 
Meeting which will be mailed to shareholders towards the end of June. 
 
   Ofgem Statement of Objections 
 
   On 30 September 2020, we announced that we had received a Statement of 
Objections from Ofgem setting out its provisional views that PayPoint 
infringed competition law through entering into certain contractual 
terms with certain energy suppliers and retailers for the provision of 
payment services to prepayment energy customers. We are considering 
Ofgem's provisional views set out in the Statement of Objections. In 
accordance with IFRS, the Board has made a provision of GBP12.5 million 
as a current best estimate for a resolution of this matter. 
 
   If you wish to discuss any aspect of our governance arrangements, please 
contact me via our Company Secretary, Sarah Carne via email at 
sarahcarne@paypoint.com. 
 
   Giles Kerr 
 
   Chairman 
 
   26 May 2021 
 
   CHIEF EXECUTIVE'S REVIEW 
 
   This has been a transformative year for the PayPoint Group with a 
significant step change in strategic delivery and a resilient 
performance delivered across the business against the backdrop of 
Covid-19 government restrictions and structural changes to our 
traditional legacy cash business. Operationally, we have remained 
focused on managing our business by supporting our people, our clients 
and retailer partner network and the most vulnerable in the community. 
In addition, we have taken important steps to strengthen our operating 
model and organisational structure and to identify and support growth 
opportunities in our core UK business. 
 
   In spite of the challenges faced in the past year, the overall 
performance of the Group has been driven by our robust, agile response 
to Covid-19, focused on customer support, service development and 
enabling our people to work successfully and productively. After a 
challenging first quarter, this approach yielded a swift transaction and 
site recovery as government restrictions eased after the first lockdown 
and learnings were successfully applied to minimise the impact of 
further lockdowns in the year, which is testament to the focus and 
dedication of the whole business. 
 
   We have made good progress against our strategic priorities: embedding 
PayPoint at the heart of convenience retail; becoming the definitive 
parcels solution; sustaining leadership in 'pay as you go' and growing 
digital bill payments and building a delivery-focused organisation and 
culture. During the year, we have made a number of important steps to 
underpin this strategy through the acquisition of i-movo, 
Handepay/Merchant Rentals and RSM 2000 and securing full ownership of 
Collect+. In addition, we announced the successful disposal of our 
Romanian business in early April for a total consideration (including 
the trading profit for the year) of GBP48 million. 
 
   These steps, together with our internal investment plans, reinforce the 
focus on our UK markets and our confidence in the accelerated growth 
opportunities we see for the business. 
 
   The Executive Board has also been strengthened in key areas to deliver 
growth and focus on the UK market: Ben Ford, joined as Retail Services 
Director in July 2020; Tanya Murphy joined as General Counsel and Head 
of Compliance in September 2020; Mark Latham, joined as Card Services 
Director in February 2021 following the completion of the 
Handepay/Merchant Rentals acquisition; and Simon Coles, our Chief 
Technology Officer since 2017, has now joined the Executive Board. Our 
Environment, Social and Governance (ESG) agenda has also gathered pace 
in the year, as we consider our social responsibility and impact as a 
management team and business towards each of these key areas. Already, 
we have done important work to deliver a refresh of our purpose, vision 
and values, reflecting the enlarged PayPoint Group and how we deliver 
innovative, sustainable services and value for all our stakeholders. 
There is more for us to do in the year ahead in developing our overall 
ESG strategy and to ensure its principles are embedded in our strategy 
and value creation. 
 
   On 30 September 2020, we announced that we had received a Statement of 
Objections from Ofgem setting out its provisional views that PayPoint 
infringed competition law through entering into certain contractual 
terms with certain energy suppliers that confer exclusivity to PayPoint 
for the provision of payment services to prepayment energy customers in 
combination with exclusivity in retailer arrangements. Ofgem's findings 
in the Statement of Objections are provisional and Ofgem states that no 
conclusion should be drawn that there has been an infringement at this 
stage. We are considering Ofgem's provisional views set out in the 
Statement of Objections and based on the range of potential outcomes in 
such proceedings, we believe there will likely be a future outflow of 
funds in the next financial year. Our current best estimate for a 
resolution of this matter is GBP12.5m and we have accordingly made a 
provision for this in the current year. This estimated provision is not 
an admission of liability in relation to Ofgem's provisional views in 
the Statement of Objections. 
 
   We are now much better positioned for growth and to take advantage of 
the enduring structural trends that have accelerated through the 
Covid-19 pandemic, including the continued shift from cash to digital 
payments, the growing demand for online shopping fulfilment and the 
increase in shopping local. 
 
   Outlook and dividend 
 
   As we begin the new financial year, we are already seeing some 
encouraging signs of continuing renewed activity in a number of areas of 
our business, in particular in card processing and parcels. We are also 
encouraged by the early performance and rapid integration of i-movo and 
Handepay/Merchant Rentals into the PayPoint Group and the new 
opportunities arising from the recently completed acquisition of RSM 
2000. I am confident the steps we have taken during the 20/21 financial 
year have strengthened the business and better positioned us for both 
recovery in our legacy businesses and growth in our developing markets. 
As a result, we are confident in the business delivering further 
progress in the year ahead in response to the accelerated growth 
opportunities across our key markets 
 
   The Board has proposed a final dividend of 16.6p per share, an increase 
of 6.4%, consistent with our dividend policy of a target cover range of 
1.2 to 1.5 times earnings, which reflects our long-term confidence in 
the business, the strength of our underlying cash flow and the enhanced 
growth prospects from the steps we have taken in the past year. In 
determining the level of dividend, the Board has sought to ensure a 
prudent level of earnings coverage for the dividend and to ensure that 
leverage is not substantially increased even in a scenario whereby the 
trading patterns seen through the pandemic period continue until the end 
of December 2021. 
 
   Nick Wiles 
 
   Chief Executive 
 
   26 May 2021 
 
   MARKET OVERVIEW 
 
   Changing market dynamics are creating significant opportunities for 
PayPoint, with the business uniquely placed to take advantage of the 
continued shift from cash to digital payments, the growing demand for 
online shopping fulfilment and the increase in shopping local. 
 
   Key trends and changes since the end of the 19/20 financial year in the 
UK markets in which PayPoint operates include: 
 
   Convenience retail 
 
 
   -- The UK convenience sector has been one of the main beneficiaries of the 
      increase in shopping local through Covid-19, with consumers choosing to 
      stay closer to home, avoid busier stores and support businesses in their 
      local community 
 
   -- PayPoint consumer research12 shows two in three people said their local 
      convenience store has become more important to them over the past 12 
      months and 22% relied on their local convenience store to supply 
      essentials unavailable elsewhere (e.g. supermarkets) during lockdown. 27% 
      will continue to do more local shopping as restrictions ease 
 
   -- Total UK convenience sector is expected to have grown by GBP3.8bn in 
      2020, a 9.2% increase on 201913 
 
   -- PayPoint One basket data shows overall convenience store average basket 
      spend has grown by 10% in 2020, with a peak of GBP8.43 in December 202014 
 
   -- Total UK convenience store numbers remained resilient, with marginal 
      growth to 47,000 and numbers of independently-owned stores gaining 3% in 
      the year15 
 
 
   Card payments 
 
 
   -- Growth in this sector has again been driven by the shift from cash to 
      card payments accelerated by Covid-19 
 
   -- Forecast growth in UK debit card market by 2027 to 19.7bn payments, with 
      36% contactless16 
 
   -- In FY 20/21, PayPoint has seen card payment volume increase by 53.8% year 
      on year 
 
   -- UK convenience store card payments transactions overall increased by 
      27.2%17 
 
 
   Cash Out 
 
 
   -- Despite the shift from cash usage during Covid-19, PayPoint's Cash Out 
      service has grown significantly year on year, driven by ongoing 
      Government meal voucher schemes and Covid-19 related hardship funds 
 
   -- LINK's ATM transactions declined by 46%18 year on year to c100 million 
      transactions and the number of ATMs in the UK reduced by 12% year on year 
      to 53,216 in the latest data from February 2021 
 
   -- Some sites with multiple ATMs have closed one or more ATMs to aid social 
      distancing 
 
   -- Access to cash remains a key priority in the UK. The FCA (Financial 
      Conduct Authority) and PSR (Payment Services Regulator) are taking a 
      joint approach to maintaining services for the many people who continue 
      to rely on cash as a vital way of making payments, despite the changes 
      brought by Covid-19. In April 2021, an amendment to the Financial 
      Services Bill was supported by the Government enabling the full rollout 
      of the LINK Counter Service with PayPoint in late 2021, providing 
      cashback without purchase for consumers. PayPoint will be playing an 
      active role in the provision of this service through its extensive 
      network 
 
 
   Parcels 
 
 
   -- Overall online sales increased during the first lockdown in 2020, with 
      overall volumes up by 45% in April and May 202019, particularly in 
      electronics, leisure equipment and grocery, as consumers were restricted 
      at home. The full year growth rate for 2020 was up 35% year on year 
 
   -- Collect+ share of the pick-up and drop-off (PUDO) market grew in the year, 
      experiencing a faster recovery than the broader PUDO/out of home market 
      due to the non-fashion focus of new carrier partners like eBay and 
      increase in convenience store footfall. Transactions were up 33.8% year 
      on year in Q4 20/21 
 
   -- Latest data20 shows that 87% of UK consumers have shopped more online 
      during the pandemic, with 71% having returned a product. Delivery 
      preference is key in the e-commerce journey, with 56% considering it the 
      most important factor when shopping online. Home delivery is still the 
      preferred channel for 82% of consumers, with PUDO at 8% and lockers at 2% 
 
   -- The PUDO market comprises Click and Collect, returns and send 
      propositions. The Click and Collect market is 11% of all volumes, c.150 
      million parcels per year and is expected to double by 202521. Returns and 
      send volumes are estimated at c.185 million and c.380 million parcels per 
      year respectively22 
 
 
   Bill payments and top-ups 
 
 
   -- The price cap for pre-pay customers reduced to GBP1,164 for the six 
      months to September 2020. This is 6%23 lower than the cap set in 
      September 2019. This reduced further to GBP1,070 in the six months from 
      October 2020 to March 2021. From 1 April 2021, the price cap increased to 
      GBP1,138 for the six months to September 2021 
 
   -- Non-Big Six energy providers combined market share increased marginally 
      to c29%24 
 
   -- The rollout of smart meters has slowed further with the impact of 
      Covid-19 impacting installations with only 3.2m meters installed in 
      202025 versus 4.5m in 2019. The deadline for completion of the rollout 
      has now been extended to 30 June 2025 
 
   -- PayPoint data shows average transaction values for dual fuel had grown to 
      GBP13.60 in December 2020, from GBP12.54 in the previous year, affecting 
      frequency of visits and transaction volumes 
 
   -- The number of PAYG mobile subscribers declined by 7% to 23.1 million 
      subscribers26 in September 2020, from 24.9 million in 2019 
 
 
   PROGRESS AGAINST OUR STRATEGIC PRIORITIES 
 
   PayPoint is well placed to take advantage of the trends that have 
accelerated over the past financial year due to Covid-19, including the 
continued shift from cash to digital payments, the growing demand for 
online shopping fulfilment and the increase in shopping local. 
 
   Our core strategic priorities for the business are: 
 
   1.        Embed PayPoint at the heart of convenience retail 
 
   2.        PayPoint becomes the definitive parcel point solution 
 
   3.        Sustain leadership in 'pay-as-you-go' and grow digital bill 
payments 
 
   4.        Building a delivery focused organisation and culture 
 
   During the past year, we have taken a number of important steps to 
underpin this strategy through the acquisition of i-movo, 
Handepay/Merchant Rentals and RSM 2000, gaining full ownership of the 
Collect+ brand and the disposal of our Romanian business. The enlarged 
PayPoint Group now delivers a broader range of innovative services and 
technology connecting millions of consumers with an expanded universe of 
over 60,000 retailer partner and SME locations across multiple sectors. 
 
 
   -- As the UK's leading secure digital vouchering system, i-movo enhances our 
      EPOS, terminal services and digital vouchering proposition and creates 
      new opportunities with Newspaper, Government, FMCG, Utilities and banking 
      clients 
 
   -- Our acquisition of Handepay/Merchant Rentals, completed in February 2021, 
      creates a national card payments business with over 30,000 SME customers 
      and reach into food services, garages and hospitality sectors. Merchant 
      Rentals also brings terminal leasing opportunities within the sectors we 
      serve 
 
   -- RSM 2000, acquired in early April 2021, enhances our digital payments 
      capability, bringing strategic Direct Debit platform, adding innovative 
      mobile payment products and enabling reach into new sectors, including 
      charities, not-for-profit organisations, events and SMEs in the UK 
 
   -- Full ownership of Collect+ secured in April 2020, establishing a 
      technology-based delivery platform to deliver best-in-class customer 
      journeys for e-commerce brands and their customers, and enabling further 
      partner and store expansion, direct ownership of consumer interactions 
      and a platform for Send service expansion 
 
   -- We believe the sale of our Romanian business is well timed, delivering a 
      strong profit on its disposal and ahead of the next stage of development 
      and investment in this business 
 
 
   These steps, together with our internal investment plans, underpin the 
focus on our UK markets and our confidence in the accelerated growth 
opportunities we see for the business. 
 
   Progress against the core strategic priorities is set out below: 
 
   PRIORITY 1: EMBED PAYPOINT AT THE HEART OF CONVENIENCE RETAIL 
 
   PayPoint continues to provide digital solutions, technology, payment 
services, increased footfall and basket spend to our retailer partners. 
Our UK network of more than 28,000 stores is bigger than all banks, 
supermarkets and Post Offices together, putting us at the heart of 
communities nationwide and comprising the best multiple, symbol and 
independent retailers in the UK. Our superior network means 99.4% of the 
urban population live within one mile of a PayPoint retailer partner and 
98.3% of the rural population live within five miles. 
 
   Our network is enabled with technology designed to create a platform for 
growth and provide retailer partners with everything a modern 
convenience store needs. Core to this priority is PayPoint One, which 
includes EPoS and bill payment functionality, and other products such as 
card payments and ATMs. More broadly, we also provide card payments 
services to thousands of growing SMEs across the hospitality, auto trade, 
clothing and households goods sectors. 
 
   FY 20/21 Progress 
 
   PayPoint One 
 
 
   -- PayPoint One sites increased by 1,707 to 17,805 since 31 March 2020, 
      including 282 fewer Covid-19 suspended sites 
 
   -- Service fee net revenue increased by 11.5% to GBP14.6 million (2020: 
      GBP13.1 million) driven by the roll out of PayPoint One to additional 
      sites, an increase in Core and Pro sites and despite no Retail Price 
      Index increase in the year 
 
   -- The PayPoint One average weekly service fee per site increased by 5.8% to 
      GBP16.3 since 31 March 2020, benefiting from the increase in Core and Pro 
      sites which are charged at a higher rate. EPoS Pro and Core sites 
      increased by 402 and 1,351 respectively since 31 March 2020, mainly due 
      to new sales, the EPoS Try Before You Buy initiative and Covid-19 
      suspended sites returning 
 
   -- Good progress on enhancing our retailer proposition to increase footfall, 
      revenue opportunities, service and engagement with our retailer partners 
      through a number of important initiatives now ready to launch in 2021, 
      including FMCG proposition that uses digital vouchering, digital screen 
      advertising, sales data, and PayPoint's retailer engagement channels, to 
      drive in-store activity and execution; delivering better retailer and 
      consumer engagement for brands, and commercial rewards and incentives for 
      retailers 
 
   -- Driven significant improvements in retailer partner experience through 
      several initiatives over the year that have contributed positively to our 
      retailer partner NPS -- introduction of Retail Services Hub to align 
      retailer-facing service resource; new CRM functionality giving single 
      customer view; new phone system enabling improvement in call answered to 
      97%; same day resolution targets introduced for retailer queries and 
      first event driven surveys tracking satisfaction at key moments of truth 
      e.g. installation of technology 
 
   -- Strengthened EPoS adoption and support to retailers through the Try 
      Before You Buy initiative in Q2 2020 
 
   -- Home delivery and click and collect proposition developed and ready for 
      launch in Summer 2021, in partnership with Snappy Shopper, fulfilling 
      customer orders from partnered stores with home delivery 
 
 
   ATM 
 
 
   -- ATM services were live in 3,626 sites at 31 March 2021, an increase of 6 
      sites since 31 March 2020, with Covid-19 suspended sites decreasing by 
      159. However, 124 sites continued to remain suspended as at 31 March 
      2021, particularly in non-convenience store locations unable to re-open 
      due to ongoing government restrictions 
 
   -- ATM net revenue decreased by 17.9% to GBP9.7 million (2020: GBP11.9 
      million) due to a 24.3% reduction in transactions, mainly due to the 
      continuing trend of reduced demand for cash across the economy and the 
      impact of Covid-19 
 
   -- Positive progress on our banking proposition with our pioneering LINK 
      Counter Service 'cashback without purchase' solution The trial was 
      launched in October 2020 and has now been extended to October 2021, with 
      legislation now implemented enabling full rollout in late 2021. The trial, 
      partnering with LINK, provides cash withdrawals over the counter without 
      a purchase in communities with limited access to cash and has been well 
      received by industry, Government bodies and consumers. Since launch 
      across 12 locations, c.11,000 withdrawals have been made with GBP750k 
      dispensed 
 
 
   Card Services: 
 
 
   -- PayPoint card payments transactions grew significantly by 53.8% to 210.4 
      million and PayPoint card payments net revenue increased by 39.1% to 
      GBP12.1 million, benefiting from the increase in convenience store sales 
      and the preference of stores to take payment by card. Handepay/Merchant 
      Rentals contributed a further GBP2.5m card payments net revenue for the 
      two months since acquisition 
 
   -- PayPoint card payment services were live in 9,930 sites at 31 March 2021, 
      an increase of 495 sites since 31 March 2020, mainly due to new sales and 
      Covid-19 suspended sites returning. The average transaction value for the 
      year increased to GBP12.40 (2020: GBP11.96), driven by the increase in 
      contactless limit to GBP45 in 2020 along with the increasing average 
      basket size in the convenience sector. Handepay card payment services 
      were live in 18,805 sites at 31 March 2021 
 
   -- Use of PayPoint's card payments net settlement functionality continues to 
      grow and is now active in 1,602 sites, an increase of 1,245 sites since 
      31 March 2020 
 
 
   PRIORITY 2: PAYPOINT BECOMES THE DEFINITIVE PARCEL POINT SOLUTION 
 
   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', supported by an extensive parcel pick-up and 
drop-off network, which comprises over 10,500 sites. We provide a 
footfall driver for retailer partners and a solution for carriers, 
including Amazon, eBay, DHL, DPD, Fedex, Hubbox, Parcels2Go and Yodel. 
Delivering high levels of consumer satisfaction with a Trustpilot rating 
of 4.5/5, our offering enables our carrier partners to improve service 
levels for their consumers in the crucial 'last mile' of deliveries, 
balancing the continued growth in online retail shopping with the 
realities of operating in a competitive low-margin market. 
 
   FY 20/21 Progress 
 
 
   -- 10,509 live parcel sites as of 31 March 2021 -- increase of 1,863 sites 
      since 31 March 2020 driven by new carrier partners and Covid-19 affected 
      sites re-opening 
 
   -- Good growth in transaction volumes to 26.6 million, an increase of 8.3% 
      year on year (2020: 24.5 million), in spite of the impact of lockdowns 
      earlier in the year 
 
   -- Net revenue declined by 10.1% year on year, with overall transaction 
      increases diluted by lower margin from our print in store service 
 
   -- Three new partnerships successfully launched with DPD, Hubbox and 
      Parcels2Go, adding to the comprehensive portfolio of e-commerce brands 
      serviced by our first and last mile technology-enabled delivery platform 
      -- Amazon, eBay, DHL, Yodel and Fedex 
 
   -- Secured full ownership of Collect+ in April 2020, maintaining Yodel as 
      key carrier partner and enabling further partner and store expansion 
 
   -- New Collect+ website launched -- secures control and ownership of store 
      locator, consumer experience and online parcel tracking, as well as a 
      platform for our Send service and further integrations with our carrier 
      partners 
 
   -- Investment in 3,600 Zebra thermal printers yielded improved customer 
      experience and transaction growth -- 32% of returns (351k transactions) 
      were printed in store in March 2021 (March 2020: 6%) with 52% of those 
      transactions using the new printer technology, highlighting growing 
      popularity and consumer demand for the service 
 
   -- Send service successfully launched in March 2021, with supporting 
      marketing trial in progress in Manchester -- early interest and volumes 
      have been promising 
 
   -- Parcels Operational Support Team now fully integrated into the wider 
      Retail Services function, with retailer and carrier partners seeing 
      improved response times 
 
 
   PRIORITY 3: SUSTAIN LEADERSHIP IN 'PAY-AS-YOU-GO' AND GROW DIGITAL BILL 
PAYMENTS 
 
   PayPoint is pioneering new ways of using digital payments so 
organisations can seamlessly and effectively serve their customers. Our 
market-leading omnichannel solution -- MultiPay -- is an integrated 
solution offering a full suite of digital payments. It enables 
transactions online and through smartphone apps and text messages, as 
well as over the counter, over the phone and via interactive voice 
response (IVR) systems. It also supports a full range of Direct Debit 
options, including scheduling collections, as well as new product 
developments such as PayByLink, recurring payments and Event Streamer. 
 
   Over-the-counter payments remain an important part of the UK economy, 
particularly for the 8 million UK consumers who rely on using cash for 
payments(27) . We will continue to retain our leadership in this area, 
through our superior retail network, coverage and service proposition. 
This business remains highly cash generative and enables us to invest in 
future growth and innovation 
 
   FY 20/21 Progress 
 
   Major relationships renewal programme complete and expanding to digital 
services: 
 
 
   -- Major client contract renewal programme now complete -- 36 renewals 
      completed in the period, including EON, securing multiple year 
      commitments and delivering a broader range of services from our MultiPay 
      digital payments portfolio 
 
   -- Continued diversification from cash to digital - 34 new clients signed, 
      with 23 coming from non-energy sectors and 8 taking digital payments 
      solutions, including Nursing and Midwifery Council, BBC TV Licensing, 
      Curo Group 
 
   -- Key multiple retailer contracts renewed - McColl's, Sainsburys, EG Group, 
      CJ Lang (Spar) and several regional Co-ops (Southern, Mid-Counties, East 
      of England, Lincolnshire) contract renewals signed, reflecting the 
      strength of our proposition and the ongoing quality and prominence of our 
      network 
 
 
   Digital payments growth and expanding portfolio: 
 
 
   -- Continued strong growth in eMoney, with transactions increasing by 24.9% 
      and a 25.8% increase in net revenue 
 
   -- BBC TV Licensing app was launched, generating strong volumes since launch 
 
   -- Continued demand for our Cash Out service, with transactions increasing 
      80.4% year on year, due to ongoing Government meal voucher schemes and 
      Covid-19 related hardship funds 
 
   -- Several MultiPay product portfolio enhancements launched in year, 
      including Direct Debit, PayByLink (reducing collections payment friction 
      via personalised SMS reminders containing a payment link) and Event 
      Streamer (enabling view of live cash transactions in real-time in 
      MultiPay platform, alongside other digital payments channels) 
 
 
   Overall performance: 
 
 
   -- UK top-up transactions reduced by 18.2% due to further declines in the 
      prepaid mobile sector, Covid-19 impacts and higher average transaction 
      values 
 
   -- Bill payments net revenue decreased by 29.3% on a reported basis, or by 
      23.4% excluding the GBP3.8 million prior year net revenue from British 
      Gas. Excluding British Gas, transactions decreased by 23.4%. This was 
      primarily due to the impacts of Covid-19, where consumers are making 
      fewer and larger payments, structural changes in this market and the 
      reduced energy price cap which came into effect on 1 October 2020 
 
   -- As expected, MultiPay net revenue decreased by 5.0%, driven by the 
      anticipated lower volumes from Utilita as they move customers to their 
      in-house solutions 
 
 
   PRIORITY 4: BUILDING A DELIVERY FOCUSED ORGANISATION AND CULTURE 
 
   Underpinning PayPoint's future success is the continued development and 
investment in our people, systems and organisation with the aim to 
create an efficient and high performance based culture with a focus on 
empowerment, engagement and customer service. 
 
   FY 20/21 Progress 
 
 
   -- Good progress on integration of Handepay/Merchant Rentals and i-movo 
      acquisitions, with work well underway for RSM 2000 acquisition completed 
      on 12 April 2021 
 
   -- Executive Board strengthened to deliver growth and focus on UK market: 
 
          -- Ben Ford, joined as Retail Services Director in July 2020 to lead 
             our retail proposition, servicing and engagement strategy; 
 
          -- Tanya Murphy, joined as General Counsel and Head of Compliance in 
             September 2020 to lead on legal and regulatory matters across the 
             group; 
 
          -- Mark Latham, joined as Card Services Director in February 2021, 
             following the completion of the Handepay/Merchant Rentals 
             acquisition, to lead our card services business and strategy; 
 
          -- Simon Coles, our Chief Technology Officer since 2017, has now 
             joined the Executive Board, to lead our systems and technology 
             strategy 
 
   -- Alan Dale was appointed to the Board as Finance Director on 20 November 
      2020, after acting as Interim Finance Director since July 2020 
 
   -- Rosie Shapland was appointed to the Board as an Independent Non-Executive 
      Director and became Chair of the Audit Committee from 1 December 2020 
 
   -- Greater focus on systems resilience and service delivery to support our 
      clients, retailer partners and consumers 
 
   -- Next phase of CRM now fully rolled out to Contact Centre, enabling 
      'single customer view' of retailer, enhanced retailer experience and 
      Salesforce Maps functionality now being rolled out to optimise field team 
      journeys and productivity 
 
   -- In-house warehouse operations extended to products and consumables, 
      giving complete control of experience and key moments of retailer 
      lifecycle 
 
 
   STRATEGY, BUSINESS DIVISIONS AND PRIORITIES FOR 2021/22 
 
   After a transformational year for the PayPoint Group, we are now much 
better positioned for growth in the UK with significant opportunities to 
deliver shareholder value as we maximise the opportunities available to 
the business. The enlarged PayPoint Group delivers a broader range of 
innovative services and technology connecting millions of consumers with 
an expanded universe of over 60,000 retailer partner and SME locations 
across multiple sectors. 
 
   What is now clear is that we are developing a strong portfolio of brands 
and businesses within the PayPoint Group, supporting our clients and 
retailer partners with innovative solutions and product offerings. As 
the business develops further in the year ahead, the intention is to 
develop these brands and businesses into different sizes of network 
within this expanded universe. 
 
   As we look to the future, and given the expansion and enhancement of the 
PayPoint Group's capabilities, we will be updating how we describe and 
report on the business to reflect more accurately the market 
opportunities and service innovation driving growth in the UK. An 
outline of the reshaped business is provided below and this will be 
expanded on in greater detail at a Capital Markets Day later in the 
year: 
 
   PayPoint Group -- what we do 
 
   We deliver innovative services and technology connecting millions of 
consumers with over 60,000 retailer partner and SME locations 
 
   Our three business divisions driving growth: 
 
   1.   Payments & Banking 
 
   What we do: 
 
   We help consumers conveniently make and receive payments online and 
in-store for the biggest service brands in the UK 
 
   How we do it: 
 
 
   -- Digital - we are developing new ways of using digital payments so 
      organisations can seamlessly and effectively serve their customers. Our 
      market-leading omnichannel solution -- MultiPay -- is an integrated 
      solution offering a full suite of digital payments. It enables 
      transactions online and through smartphone apps and text messages, as 
      well as event payments, over the counter, over the phone and via 
      interactive voice response (IVR) systems. It also supports a full range 
      of Direct Debit options, including scheduling collections, as well as new 
      product developments such as PayByLink, recurring payments and Event 
      Streamer. MultiPay customers benefit from real-time visibility of all 
      payments received, through one easy-to-use portal that is fully PCI 
      compliant, and allows visibility of all payment channels - including 
      cash. The platform is used by a growing number of organisations across 
      the UK, including many housing associations, local government authorities 
      and utility providers. Our Cash Out service also enables the rapid 
      dispersal of funds through secure digital channels and is actively used 
      by local authorities and charities to distribute emergency funds 
 
   -- Cash to digital -- we enable consumers to access digital brands and 
      services through a comprehensive portfolio of banking, e-Commerce, gaming 
      and loyalty card partners, including Amazon, Xbox, Playstation, Paysafe, 
      Monzo and the Appreciate Group. Consumers simply pay for a 'pin on 
      receipt' code in cash in any of our 28,000 retail locations and then can 
      use that value online with the digital brand or service chosen. For our 
      digital banking partners, consumers can deposit cash into their accounts 
      across our extensive retail network 
 
   -- Cash - we provide vital access to cash across the UK by helping millions 
      of people every week control their household finances, make essential 
      payments and access in-store services. Our UK network of more than 28,000 
      stores is bigger than all banks, supermarkets and Post Offices together, 
      putting us at the heart of communities nationwide 
 
   2.   Shopping 
 
   What we do: 
 
   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 
 
   How we do it: 
 
 
   -- Retail services 
 
          -- We provide digital solutions to help our retailer and SME partners 
             keep pace with changing shopper needs, service expectations and 
             demographics. Our retail services platform, PayPoint One, is live 
             in over 17,800 stores across the UK and offers 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 achieve higher footfall and increased 
             spend so they can grow their businesses profitably. 
 
          -- We also provide access to cash solutions via our network of circa 
             3,600 ATMs and our pioneering 'cashback without purchase' solution, 
             partnering with LINK and due to launch in late 2021 
 
   -- Card payments -- we provide card payments services for over 30,000 
      retailer partners and SMEs across the hospitality, convenience retail, 
      garages, clothing and households goods sectors via our PayPoint, Handepay 
      and Merchant Rentals brands. 
 
   3.   E-Commerce 
 
   What we do: 
 
   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' 
 
   How we do it: 
 
 
   -- E-Commerce -- we enable the delivery of best-in-class customer journeys 
      for e-commerce brands over the first and last mile in circa 10,000 
      locations through our Collect+ brand, helping consumers pick up and drop 
      off online shopping or send parcels across the UK. We work with the most 
      comprehensive range of partners, including Amazon, eBay, Yodel, Fedex, 
      DPD, DHL, Hubbox and Parcels2Go. Our proprietary software 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. 
 
 
   PRIORITIES FOR 2021/22 
 
   To further reflect this positioning of the PayPoint Group, we are also 
making some adjustments to how we describe our strategic priorities to 
more accurately reflect the opportunities we see across the markets we 
serve. The priorities are as follows: 
 
 
   1. Embed PayPoint Group at the heart of SME and convenience retail 
      businesses (Shopping business division) 
 
   2. Become the definitive technology-based e-commerce delivery platform for 
      first and last mile customer journeys (E-commerce business division) 
 
   3. Sustain leadership in 'pay as you go' and grow digital payments (Payments 
      & Banking business division) 
 
   4. Building a delivery focused organisation and culture (PayPoint Group) 
 
 
   Priority 1: Embed PayPoint Group at the heart of SME and convenience 
retail businesses (Shopping business division) 
 
   FY 21/22 Priorities 
 
 
   -- Embed the combined and restructured sales teams across PayPoint, focused 
      on new business and retailer relationship development 
 
   -- Invest to deliver further enhancements to our retailer proposition, 
      including: launch FMCG proposition (combining digital vouchering, digital 
      screen advertising, sales data, and PayPoint's retailer engagement 
      channels); develop commercial rewards and incentives for retailers; 
      launch new eMoney clients offering richer retailer commission, including 
      Love2Shop 
 
   -- Continue to strengthen EPoS adoption and support to retailers 
 
   -- Develop next generation terminal strategy to deliver an easy-to-use 
      platform built for future service and product developments 
 
   -- Home delivery and click and collect rollout in Summer 2021, in 
      partnership with Snappy Shopper 
 
   -- Card Services: 
 
          -- Bring all new business across PayPoint retail and Handepay under a 
             single acquiring service provider, delivering commercial, 
             operational and proposition enhancements 
 
          -- In PayPoint retail, launch a switching proposition in Q2 to assist 
             customers switching to us from other providers. Deliver additional 
             value enhancing services such as a faster settlement option 
 
          -- Drive additional value from existing introducer relationships in 
             Merchant Rentals and sign new introducer partnerships. Extend 
             supplier agreements to cover other key service providers 
 
   -- LINK Counter Service -- support extended trial to 31 October 2021 and 
      commence deployment of a scaled solution from November 2021, working with 
      LINK and their member base, providing access to cash and supporting 
      Government initiatives 
 
   -- Retailer Experience -- launch of our Retailer Services Hub as a central 
      resource to service our retailer partners, with a view to opening new 
      channels to serve our retailers in 21/22. Continue to deliver 
      transformation programme on how we partner, communicate and support our 
      retailers, continually improving the retailer experience when connecting 
      with any team within PayPoint and leveraging investment in technology and 
      Salesforce CRM 
 
 
   Priority 2: Become the definitive technology-based e-commerce delivery 
platform for first and last mile customer journeys (E-commerce business 
division) 
 
   FY 21/22 Priorities 
 
 
   -- Scale our Send service in H1 21/22, supported by significant marketing 
      investment plan 
 
   -- Add further partners in 2021 in time to ensure BAU for Peak trading 
      volumes 
 
   -- Expand service proposition to existing partners, including staged send 
      and in-store printing leveraging Zebra printer investment in 20/21, for 
      example, DHL will be able to offer Print in Store returns from May 2021 
      across 3,000 sites 
 
   -- Deliver further improvements to in-store consumer and retailer partner 
      experience, including enhanced StoreScan app to replicate all terminal 
      functionality and proactive inventory management ahead of Peak 2021 
 
 
   Priority 3: Sustain leadership in 'pay as you go' and grow digital 
payments (Payments & Banking business division) 
 
   FY 21/22 Priorities 
 
 
   -- Leverage the RSM 2000 acquisition with enhanced digital payments 
      capability and new sector reach, including investment to enhance Direct 
      Debit platform capability 
 
   -- Invest in new verticals and deliver new business wins, particularly 
      within housing, events, charities and not-for-profit sectors: 
 
          -- Clear plan to be finalised by June 2021 to grow Events proposition 
             beyond current base into larger opportunities, such as sporting 
             events 
 
          -- Develop plan to leverage PayPoint's digital payments capability in 
             charity and not-for-profit sector 
 
   -- Creation of a bid management team focussing on larger and more complex 
      tenders centred around digital payments 
 
   -- Launch comprehensive digital payments offering by the end of the calendar 
      year to develop further our MultiPay product, including Open Banking 
      capability, and grow a strong order book of customers 
 
   -- Continue to diversify and secure broader opportunities beyond 'pay as you 
      go' with existing clients, including the RSM 2000 portfolio 
 
 
   Priority 4: Building a delivery focused organisation and culture 
(PayPoint Group) 
 
   FY 21/22 Priorities 
 
 
   -- Deliver synergies and growth opportunities through integrating 
      acquisitions of Handepay, Merchant Rentals, i-movo and RSM 2000 
 
   -- Embed new PayPoint Group purpose and values across business and further 
      develop ESG approach to deliver responsible and sustainable value for 
      shareholders 
 
   -- Implement a smooth and effective return to office for our people, that 
      blends the benefits of face to face interaction with working flexibly 
 
   -- Continue pace of change and investment required to reposition our 
      business in response to changes in our markets and the needs of our 
      clients, retailer partners and consumers 
 
   -- Invest to build further resilience into our service delivery, including 
      improving quality and speed of agile delivery, reviewing 'heritage' 
      systems and settlement infrastructure, enhancing customer support, 
      accelerating cloud data centre strategy and maintaining Salesforce CRM 
      now fully adopted across the business 
 
 
   KEY PERFORMANCE INDICATORS 
 
   PayPoint Group has identified the following KPIs to measure progress of 
business performance: 
 
 
 
 
                        KPI                    Description, purpose and reference           2020/21  2019/20(28)  2018/19(1) 
--------------  --------------------  ----------------------------------------------------  -------  -----------  ---------- 
                                      Revenue from continuing operations less commissions 
                                       paid to retailers and the cost of top-ups 
                                       and SIM cards where PayPoint is principal. 
                                       This reflects the benefit attributable to 
                Net revenue            PayPoint's performance eliminating pass-through 
                 from continuing       costs and is an important measure of the 
                 operations            overall success of our strategy. 
   Overall       (GBP million)         (See Financial review -- 'Overview' on page 
  performance    (UK)                  17)                                                     97.1        106.8       103.6 
--------------  --------------------  ----------------------------------------------------  -------  -----------  ---------- 
 Operating             Operating profit from continuing operations 
  margin from           before exceptional items as a percentage 
  continuing            of net revenue. Operating margin provides 
  operations            a broad overview of the efficient and effective 
  before exceptional    management of the cost base enabling shareholder 
  items                 returns and investment in the business. 
  (%)                   (See Financial review -- 'Operating margin' 
  (UK)                  on page 22)                                                            38.0         47.2        46.5 
 --------------------  -------------------------------------------------------------------  -------  -----------  ---------- 
                       Earnings from continuing operations before 
                        exceptional items, tax, depreciation and 
                        amortisation adjusted for corporate working 
                        capital movements (excludes movement in clients' 
                        funds and retailers' deposits). This represents 
                        the cash generated by operations which is 
                        available for investments, capex, taxation 
 Cash generation        and dividend payments. 
  (GBP million)         (See Financial review -- 'Cash flow and liquidity' 
  (UK)                  on page 22)                                                            52.2         66.4        62.8 
 --------------------  -------------------------------------------------------------------  -------  -----------  ---------- 
                                      Diluted earnings from continuing operations 
                Diluted                divided by the weighted average number of 
                 earnings              ordinary shares in issue during the year 
                 per share             (including potentially dilutive ordinary 
                 from continuing       shares). Earnings per share is a measure 
                 operations            of the profit attributable to each share. 
 Shareholder     (Pence)               (See note 8 to the financial information 
    returns      (UK)                  on page 42)                                             21.9         58.1        57.5 
--------------  --------------------  ----------------------------------------------------  -------  -----------  ---------- 
                       Dividends (ordinary and additional) paid 
                        during the financial year divided by number 
 Dividends              of ordinary shares in issue at reporting 
  paid per              date. Dividends paid per share provides a 
  share                 measure of the return to shareholders. 
  (Pence)               (See Financial review -- 'Dividends' on page 
  (Group)               23)                                                                    31.2         84.0        82.9 
 --------------------  -------------------------------------------------------------------  -------  -----------  ---------- 
                Network 
                 stability 
                 one-mile             Total urban population covered within a one-mile 
                 urban population      radius of a PayPoint site. This is monitored 
                 cover                 to ensure PayPoint are above our minimum 
Non-financial    (%)                   SLA of 95%.                                             99.4         99.5        99.5 
--------------  --------------------  ----------------------------------------------------  -------  -----------  ---------- 
 Network 
  stability 
  five-mile 
  rural population     Total rural population covered within a five-mile 
  cover                 radius of a PayPoint site. This is monitored 
  (%)                   to ensure PayPoint are above our minimum 
  (UK)                  SLA of 95%.                                                            98.3         98.3        98.5 
 --------------------  -------------------------------------------------------------------  -------  -----------  ---------- 
                       The % of the retailer partner network, that 
                        on an annual basis, exits PayPoint. This 
                        is calculated by taking the number of retailers 
 Retailer               who exited PayPoint in the period (excluding 
  partner               suspended sites), divided by the average 
  site churn            number of total UK retailer partner sites 
  (%)                   for the period. This tracks the movement 
  (UK)                  in total UK retailer partner sites.                                     3.6          8.4         5.2 
 --------------------  -------------------------------------------------------------------  -------  -----------  ---------- 
                       Measures the overall employee engagement 
                        of our UK population, calculated by our survey 
                        provider. The survey provides insight into 
 Employee               the health of our organisation, enabling 
  engagement            the identification of what is important to 
  (%)                   our people so that appropriate action can 
  (UK)                  be taken.                                                              77.0         68.0        69.0 
 --------------------  -------------------------------------------------------------------  -------  -----------  ---------- 
 
 
   FINANCIAL REVIEW 
 
   OVERVIEW 
 
 
 
 
                                                                            Restated(29) 
                                                          Year ended         Year ended 
                                                           31 March           31 March     Change 
 GBPm                                                        2021               2020          % 
-------------------------------------------------- 
Net revenue(30) 
Continuing operations 
   UK retail services                                                 45.0          41.0      9.8% 
   UK bill payments and top-ups                                       52.1          65.8   (20.8%) 
                                                                      97.1         106.8    (9.1%) 
Discontinued operation 
Romania                                                               15.3          14.6      4.8% 
-------------------------------------------------- 
Total net revenue                                                    112.4         121.4    (7.4%) 
 
Total costs from continuing operations (excluding 
 exceptional costs)(31)                                               61.5          56.8      8.3% 
Total costs from discontinued operation                                7.8           7.8    (1.3%) 
Exceptional costs                                                     16.1             - 
-------------------------------------------------- 
Profit before tax                                                     27.0          56.8   (52.5%) 
 
    Profit before tax from continuing operations                      19.4          50.0   (61.1%) 
    Profit before tax from discontinued operation                      7.6           6.8     10.8% 
 
Underlying profit before tax from continuing 
 operations(32)                                                       35.5          44.1   (19.3%) 
 
Cash generation(33)                                                   52.2          66.4   (21.4%) 
Cash generation from continuing operations                            44.1          57.9   (23.8%) 
Net corporate debt(34)                                              (68.2)        (12.0)  (465.8%) 
 
 
   In addition to the impacts from a number of headwinds and Covid-19, the 
above results reflect a number of corporate changes within the Group and 
some exceptional costs. The Romanian business has been sold and has been 
classified as a discontinued operation whilst the results of i-movo have 
been included from December 2020 and Handepay/Merchant Rentals from 
February 2021. A reconciliation of profit before tax from continuing 
operations to underlying profit before tax from continuing operations is 
provided on page 18 to aid clarity on performance. 
 
   Profit before tax from continuing operations of GBP19.4 million (2020: 
GBP50.0 million) decreased by GBP30.6 million (61.1%). This reflects the 
one-off expected prior year GBP3.8 million impact of the British Gas 
contract which ended in December 2019, the GBP2.1 million prior year 
variable pay benefit and GBP16.1 million current year exceptional costs 
which includes GBP3.6 million of expenses relating to the acquisitions 
and refinancing and a GBP12.5 million provision made in relation to the 
Ofgem Statement of Objections. Adjusting for these items, underlying 
profit before tax from continuing operations of GBP35.5 million (2020: 
GBP44.1 million) decreased by GBP8.5 million (19.3%). 
 
   Revenue from continuing operations decreased by GBP16.6 million (11.5%) 
to GBP127.7 million (2020: GBP144.3 million) with the ending of the 
British Gas contract contributing GBP6.1 million of the decrease. Net 
revenue from continuing operations decreased by GBP9.7 million (9.1%) to 
GBP97.1 million (2020: GBP106.8 million) including the GBP3.8 million 
British Gas impact. Underlying net revenue from continuing operations, 
which excludes the GBP3.8m British Gas impact, decreased by GBP5.9 
million (5.7%) to GBP97.1 million (2020: GBP103.0 million). This was 
driven by headwinds of structural changes and margin pressure on UK bill 
payments and impacts of Covid-19 on UK bill payments, ATM and parcels. 
These were partially offset by growth in UK card payments, eMoney and 
service fees and acquisitions. 
 
   UK retail services net revenue increased by GBP4.0 million (10.6%) but 
was impacted by Covid-19 with a number of sites temporarily closed and 
consumer behaviour affecting volumes. PayPoint card payments net revenue 
increased by GBP3.4 million (39.1%) due to a significant increase in 
transactions (53.8%) with consumers using cards rather than cash due to 
Covid-19. Handepay/Merchant Rentals contributed a further GBP2.5m card 
payments and terminal leasing net revenue for the two months since 
acquisition. Service fees net revenue increased by GBP1.5 million 
(11.5%) driven by additional sales of PayPoint One and despite PayPoint 
not implementing the annual RPI increase to help retailer partners. ATM 
net revenue decreased by GBP2.2 million (17.9%) due to a reduction in 
transactions driven by the continuing trend of reduced demand for cash 
across the economy, accentuated by Covid-19, and the temporary closure 
of some sites due to Covid-19. Parcels and other net revenue decreased 
by GBP1.2 million (16.3%), impacted by Covid-19 reducing demand with 
consumers at home and, although overall transactions increased, these 
were diluted by lower margin from our print in store service 
transactions. 
 
   UK bill payments and top-ups net revenue of GBP52.1 million decreased by 
GBP13.7 million (20.8%) which included the GBP3.8 million impact of the 
British Gas contract which ended in December 2019. UK bill payments 
(including Mulitpay) net revenue decreased by GBP14.3 million (31.5%), 
or GBP10.5 million (25.4%) on an underlying basis (excludes the GBP3.8 
million prior period net revenue from British Gas), due to the headwinds 
of structural changes and margin pressure and impacts of Covid-19, where 
consumers made less frequent and larger payments. MultiPay net revenue 
decreased by GBP0.3 million (6.8%) driven by a decrease in transactions 
due to Utilita moving customers to their own in-house app. UK top-ups 
and eMoney net revenue increased by GBP0.8 million (5.0%) with GBP1.8 
million (25.8%) growth in e-money partially offset by GBP1.0 million 
(10.4%) decline in top-ups from Covid-19 and the continuing structural 
declines in the prepaid mobile sector. 
 
   Net revenue from the discontinued operation (Romania) increased by 
GBP0.7m (4.8%) to GBP15.3 million (2020: GBP14.6 million) through margin 
improvement in bill payments and top-ups. 
 
   Total costs from continuing operations of GBP61.5 million increased by 
GBP4.7 million (2020: GBP56.8 million). Underlying total costs, which 
exclude the GBP2.1 million prior year variable pay benefit, increased by 
GBP2.6 million (2020: GBP58.9 million) which was mainly driven by the 
additional cost base in relation to the newly acquired businesses, 
higher depreciation and amortisation (arising from investment in our 
back-office systems and the Collect+ brand asset) and higher finance 
costs due to use of the finance facility in case of Covid-19 impacts, 
partially offset by lower other costs of revenue associated with 
transaction volumes. 
 
   Total costs from the discontinued operation remained stable at GBP7.8 
million, with higher administrative costs offset by lower depreciation 
and amortisation in the current year on assets classified as held for 
sale. 
 
   Exceptional costs of GBP16.1 million, which are one-off, non-recurring 
and do not reflect current operational performance, consisted of GBP2.8 
million acquisition costs, GBP0.8 million refinancing costs on renewing 
and increasing our financing facilities to GBP107.5 million and the 
GBP12.5 million provision made in relation to the Ofgem Statement of 
Objections. 
 
   Reconciliation from profit before tax from continuing operations to 
underlying profit before tax from continuing operations 
 
 
 
 
                                                             Year ended  Year ended 
 GBPm                                                          31 March    31 March 
                                                                   2021        2020 
----------------------------------------------------------- 
Profit before tax from continuing operations                   GBP19.4m  GBP50.0m 
Adjusted for: 
   Current year exceptional costs -- administrative             GBP3.1m  - 
   expenses 
    Current year exceptional costs -- finance costs             GBP0.5m  - 
  Current year provision in relation to the Ofgem Statement    GBP12.5m  - 
   of Objections 
Prior year variable pay benefit                                       -  (GBP2.1m) 
   Prior year net revenue from British Gas contract                   -  (GBP3.8m) 
Underlying profit before tax from continuing operations        GBP35.5m    GBP44.1m 
 
 
   Underlying performance measures allow shareholders to better understand 
the underlying operational performance in the year. Prior year 
underlying profit before tax has been restated to exclude the variable 
pay benefit, as last year it was disclosed as a one-off benefit, and 
exclude the profit from the British Gas contract ending, as it was the 
largest contract in the business and this impact makes it more difficult 
to assess trends in financial performance. 
 
   Cash generation remained strong with GBP52.2 million (2020: GBP66.4 
million) delivered from profit before tax of GBP27.0 million (2020: 
GBP56.8 million). There was a net working capital inflow of GBP0.8 
million primarily benefiting from the VAT deferral offered by HMRC. Tax 
payments were lower than the prior year due to HMRC having brought 
payments on account forward by six months in the prior year. Dividend 
payments were lower compared to the prior year due to the end of the 
additional dividend programme. 
 
   Net corporate debt increased by GBP56.2 million to GBP68.2 million 
(2020: GBP12.0 million) due to the acquisitions made in the current 
year. At 31 March 2021 loans and borrowings were GBP86.6 million (2020: 
GBP70.0 million) which included GBP4.6 million of asset financing from 
the Merchant Rentals acquisition. New increased financing facilities 
were put in place in February 2021 to support the acquisition programme 
whilst the disposal of the Romanian business completed on 8 April 2021 
and so the GBP48.3 million proceeds are not reflected in the year end 
numbers. The proceeds were used to reduce net debt. 
 
   SECTOR ANALYSIS 
 
   UK retail services 
 
   UK retail services are 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, ATMs, parcels, terminal leasing and 
SIMs. 
 
 
 
 
                                 Year ended         Year ended 
                                31 March 2021      31 March 2020      Change % 
----------------------------- 
PayPoint terminal sites (No.) 
        PayPoint One(35)               17,805                 16,098     10.6% 
        Legacy (T2)                     1,441                  2,496   (42.3%) 
        PPoS(36)                        8,821                  8,235      7.1% 
----------------------------- 
        Total sites in 
         PayPoint Network              28,067                 26,829      4.6% 
-----------------------------  --------------  ---------------------  -------- 
 
Services in live sites (No.) 
        PayPoint One Base               8,258                  8,304    (0.6%) 
        EPoS Core                       8,307                  6,956     19.4% 
        EPoS Pro                        1,240                    838     48.0% 
        Card payments - 
         PayPoint                       9,930                  9,435      5.2% 
        Card payments -- 
         Handepay                      18,805                      -         - 
Card terminal lessees -- 
 Merchant Rentals                      26,017                      -         - 
        ATMs                            3,626                  3,620    (0.2%) 
Parcels                                10,509                  8,646     21.5% 
 
Transactions (Millions) 
        Card payments -- 
         PayPoint                       210.4                  136.8     53.8% 
Card payments -- Handepay 
 (two months)                            14.6                      -         - 
        ATMs                             30.6                   40.4   (24.3%) 
        Parcels                          26.6                   24.5      8.3% 
PayPoint One average weekly 
 service fee per site (GBP)              16.3                   15.4      5.8% 
Net revenue (GBPm) 
        Service fees                     14.6                   13.1     11.5% 
        Card payments -- 
         PayPoint                        12.1                    8.7     39.1% 
  Card payments -- Handepay 
   (two months)                           1.5                      -         - 
Card terminal lessees -- 
 Merchant Rentals (two 
 months)                                  1.0                      -         - 
  ATMs                                    9.7                   11.9   (17.9%) 
Parcels                                   3.6                    4.0   (10.1%) 
        Other                             2.5                    3.3   (24.1%) 
----------------------------- 
        Total net revenue 
         (GBPm)                          45.0                   41.0     10.6% 
 
 
   As at 31 March 2021, PayPoint had a live terminal in 28,067 UK sites 
(2020: 26,829 sites), an increase of 4.6% from 31 March 2020, primarily 
as a result of new sales and temporarily suspended sites due to Covid-19 
returning to the network. PayPoint One sites increased by 10.6% to 
17,805 sites (2020: 16,098 sites) since 31 March 2020 due to installs 
and 282 fewer Covid-19 suspended sites. 
 
   The following table shows the impact of Covid-19 on services provided in 
sites: 
 
 
 
 
                                                        As at 30 
Sites temporarily suspended    As at 31     As at 30    September  At 31 December   As at 31 
 due to Covid-19               March 2020   June 2020     2020          2020        March 2021 
----------------------------  -----------  ----------  ----------  --------------  ----------- 
UK PayPoint One                       328          79          29              44           46 
----------------------------  -----------  ----------  ----------  --------------  ----------- 
UK ATMs                               283         212          26             108          124 
----------------------------  -----------  ----------  ----------  --------------  ----------- 
UK Card payments(37)                  293          47          15              23           26 
----------------------------  -----------  ----------  ----------  --------------  ----------- 
UK Parcels                            208          87          18              36           42 
----------------------------  -----------  ----------  ----------  --------------  ----------- 
 
 
   Net revenue increased by GBP4.0 million (10.6%) to GBP45.0 million 
(2020: GBP41.0 million). The net revenue of each of our key products is 
separately addressed below. 
 
   Service fees: This is a core growth area and consists of service fees 
from PayPoint One and our legacy terminal. Service fee revenue increased 
by GBP1.5 million (11.5%) to GBP14.6 million (2020: GBP13.1 million) 
driven by 1,707 additional PayPoint One sites since 31 March 2020, with 
increases in the higher price point EPoS Core and Pro sites. EPoS Core 
and Pro sites increased by 1,351 and 402 respectively since 31 March 
2020, due to new sales, the EPoS Try Before You Buy trial and Covid-19 
suspended sites returning. The PayPoint One average weekly fee per site 
increased by 5.8% to GBP16.3 (2020: GBP15.4), benefiting from the 
increase in EPoS Core and Pro sites which are charged at a higher rate 
and despite PayPoint not implementing the annual RPI increase to help 
retailer partners in the Covid-19 pandemic. Retailers taking the Core 
version of the product represent 46.7% (2020: 43.2%) of all PayPoint One 
sites and the Pro version represent 7.0% (2020: 5.2%). Legacy terminals 
now just remain in our multiple retailer partners. 
 
   Card payments: PayPoint card payments transaction volumes increased 
significantly by 53.8% to 210.4 million (2020: 136.8 million) benefiting 
from consumers using cards rather than cash due to Covid-19, with the 
preference of stores to take payment by card, and the increase in the 
contactless payment limit. Across our network there were 9,930 (2020: 
9,435) PayPoint card payments sites, 495 sites more than the prior year 
due to new sales and Covid-19 suspended sites returning. PayPoint card 
payments net revenue increased by 39.1% to GBP12.1 million (2020: GBP8.7 
million), this includes the GBP0.4 million impact of a goodwill gesture 
to retailer partners following a card services outage. 
 
   The new acquisitions of Handepay and Merchant Rentals generated GBP2.5m 
net revenue for the two months since acquisition. Handepay contributed 
GBP1.5 million from card payments and still had 10.4% of its SME 
partners not transacting at year end due to Covid-19. Merchant Rentals 
contributed GBP1.0 million from its terminal leasing business. 
 
   ATMs: ATM net revenue decreased by GBP2.2 million (17.9%) to GBP9.7 
million (2020: GBP11.9 million) due to a 24.3% reduction in transactions 
to 30.6 million (2020: 40.4 million). This is attributable to a 
combination of the continued reduced demand for cash across the economy, 
accentuated by the Covid-19 preference for card use, and suspended sites 
from Covid-19. ATM sites remained stable at 3,626 sites (2020: 3,620 
sites) with 159 fewer Covid-19 suspended sites. PayPoint continued to 
optimise its ATM network by relocating existing machines to better 
performing locations. 
 
   Parcels: Parcels net revenue decreased by 10.1% to GBP3.6 million (2020: 
GBP4.0 million), due to the impact of overall parcel transaction 
increases being diluted by lower margins for our print in store service. 
Parcel transactions increased by 8.3% to 26.6 million (2020: 24.5 
million). Parcel sites increased by 1,863 from 31 March 2020 to 10,509 
sites (31 March 2020: 8,646 sites), due to additional sites for the 
newer parcel partners and Covid-19 suspended sites returning. 
 
   Other: Other services provided include SIM sales and other ad hoc items 
which contributed GBP2.5 million net revenue. The decrease reflects the 
continuing decline in SIM sales, accentuated by the impact of Covid-19 
on tourism. 
 
   UK bill payments 
 
   Bill payments is our most established category and consists of prepaid 
energy, bill payments and CashOut services. This sector also includes 
MultiPay which is our digital proposition, the seamlessly integrated 
omnichannel solution is a one-stop shop for digital and other customer 
payments, via any channel and on any device. 
 
 
 
 
                                                    Restated(38) 
Year ended 31 March                       2021          2020          Change % 
---------------------------------------- 
        Bill payments transactions 
         (millions)                       170.2                264.1   (35.6%) 
Bill payments average transaction value 
 (GBP)                                     25.4                 21.1     20.5% 
Bill payments net revenue (GBPm)           30.9                 45.1   (31.5%) 
Bill payments net revenue per 
 transaction (pence)                       18.2                 17.1      6.3% 
        MultiPay transactions (millions)   25.3                 32.9   (23.1%) 
     MultiPay average transaction value 
      (GBP)                                17.0                 16.4      4.1% 
        MultiPay net revenue (GBPm)         4.2                  4.5    (6.8%) 
        MultiPay net revenue per 
         transaction (pence)               16.6                 13.7     21.1% 
 
 
   UK bill payments net revenue decreased by 35.6% to GBP30.9 million 
(2020: GBP45.1 million). Excluding the GBP3.8 million prior year net 
revenue from British Gas, net revenue decreased by GBP10.4 million 
(25.1%). Net revenue per transaction continued to increase and was up by 
1.1 pence (6.3%) due to a 14.1% increase in the average transaction 
value for prepay energy and the ongoing improvement in mix to higher 
yielding clients. Transactions decreased by 93.9 million (35.6%), 
excluding British Gas transactions decreased by 23.5%. The decrease in 
bill payments transactions was primarily as a result of the continued 
switch to digital payment methods along with the impacts of Covid-19, 
where consumers are making larger payments and less frequently. UK bill 
payments revenue was restated to include the intercompany revenue 
recharge for transactional services with the discontinued operation. 
 
   MultiPay net revenue decreased by 6.8% to GBP4.2 million (2020: GBP4.5 
million) and MultiPay transactions decreased by 7.6 million (23.1%) to 
25.3 million (2020: 32.9 million) due to the planned Utilita switch to 
their in-house app. The non-Utilita MultiPay business net revenue 
increased by GBP0.4 million (14.1%) as a result of more clients taking 
the digital services and contribution from the new functionalities of 
Direct Debit and PayByLink. 
 
   UK top-ups & eMoney 
 
   Top-ups include transactions where consumers can top up their mobiles, 
prepaid debit cards and lottery tickets. This category also includes 
eMoney transactions where PayPoint provides the physical network for 
consumers to convert cash into electronic funds with online 
organisations. 
 
 
 
 
Year ended 31 March            2021                    2020           Change % 
-------------------- 
Top-ups transactions 
 (millions)                             24.3                    30.4   (20.0%) 
Top-ups average 
 transaction value 
 (GBP)                                  11.9                    11.1      7.6% 
Top-ups net revenue 
 (GBPm)                                  8.3                     9.3   (10.4%) 
Top-ups net revenue 
 per transaction 
 (pence)                                34.2                    30.5     11.9% 
eMoney transactions 
 (millions)                             11.4                     9.1     24.9% 
eMoney average 
 transaction value 
 (GBP)                                  41.6                    38.1      9.1% 
  eMoney net revenue 
   (GBPm)                                8.7                     6.9     25.8% 
        eMoney net 
         revenue per 
         transaction 
         (pence)                        76.1                    75.6      0.7% 
 
 
   Top-ups net revenue decreased by GBP1.0 million (10.4%). Top-ups 
transactions decreased by 6.1 million (20.0%) to 24.3 million (2020: 
30.4 million) due to further market declines in the prepaid mobile 
sector whereby UK direct debit pay monthly options displace UK prepay 
mobile and Covid-19 impacts where consumers are making larger payments 
and less frequently. 
 
   eMoney net revenue increased by GBP1.8 million (25.8%) and transactions 
increased by 2.3 million (24.9%) to 11.4 million (2020: 9.1 million). 
eMoney transactions derive a substantially higher fee per transaction 
than traditional top-up transactions. 
 
   Romania (discontinued operation) 
 
   The sale of the Romanian business completed after the end of the 
financial year on 8 April 2021. The Romanian business comprised mainly 
of bill payments and top-ups operating on a similar basis to our UK 
business. 
 
 
 
 
Year ended 31 March                    2021    2020   Change % 
------------------------------------ 
PayPoint terminal sites (No.)         18,849  19,257    (2.1%) 
Transaction value (GBPm)               2,542   2,296     10.7% 
        Transactions (millions) 
        Bill payments                   98.1   100.0    (1.9%) 
        Top-ups                         12.5    12.4      1.3% 
        Other                            3.6     2.2     65.1% 
------------------------------------ 
Total transactions                     114.2   114.6    (0.3%) 
Net revenue (GBPm)                      15.3    14.6      4.8% 
Net revenue per transaction (pence)     13.4    12.8      5.0% 
 
 
   The number of sites decreased by 408 to 18,849 (2020: 19,257) due to an 
exercise to close non-performing sites. Bill payments transactions 
decreased by 1.9% to 98.1 million (2020: 100.0 million) and top-ups 
transactions increased by 1.3% to 12.5 million (2020: 12.4 million). The 
growth in other transactions was driven by card payments transactions. 
Net revenue increased by 4.8% which was driven by margin improvement in 
bill payments and top-ups. 
 
   TOTAL COSTS 
 
 
 
 
                                                                                Restated(39) 
Year ended 31 March (GBPm)                                       2021               2020      Change % 
  Continuing operations 
  Other costs of revenue                                                   7.0           7.3    (4.1%) 
  Depreciation and amortisation (included 
   within costs of revenue)                                                9.6           8.3     16.9% 
  Depreciation and amortisation (included 
   within administrative expenses)                                         0.9           0.4    125.0% 
  Administrative costs (included within administrative 
   expenses)                                                              42.7          40.3      6.0% 
  Net finance costs                                                        1.3           0.5    160.0% 
------------------------------------------------------- 
                                                                          61.5          56.8      8.5% 
  Add: prior year variable pay benefit                                       -           2.1 
------------------------------------------------------- 
  Underlying costs from continuing operations                             61.5          58.9      4.4% 
  Discontinued operation 
  Romania                                                                  7.8           7.8    (1.3%) 
------------------------------------------------------- 
  Total costs (excluding exceptional items)                               69.3          64.7      7.1% 
  Underlying total costs                                                  69.3          66.8      3.7% 
 
 
   Underlying costs from continuing operations, which exclude the current 
year exceptional costs and adjust for the GBP2.1m prior year variable 
pay benefit, increased by GBP2.6 million (4.4%). Excluding the cost base 
in relation to the newly acquired businesses of GBP2.0 million, 
underlying costs have increased by GBP0.7 million (1.1%). The 
anticipated cost increases in depreciation and amortisation relate to 
the investment in our back-office systems, together with the 
amortisation on the Collect+ brand asset. Finance costs increased due to 
the refinancing in the year to support acquisitions made and to ensure 
that in the longer term, PayPoint remains in a strong position to 
withstand a sustained period of disruption to trading should it occur as 
a result of Covid-19. 
 
   OPERATING MARGIN(40) 
 
   Operating margin from continuing operations before exceptional items of 
38.0% (2020: 47.2%) declined by 9.2ppts due to a 9.1% decrease in net 
revenue from continuing operations. 
 
   PROFIT BEFORE TAX AND TAXATION 
 
   The tax charge for continuing operations of GBP4.3 million (2020: 
GBP10.0 million) on profit before tax from continuing operations of 
GBP19.4 million (2020: GBP50.0 million) represents an effective tax 
rate(41) of 22.3% (2020: 19.9%), 2.4ppts higher than prior year due to 
an increase in disallowable expenses associated with the one-off 
acquisition and disposal costs. 
 
   STATEMENT OF FINANCIAL POSITION 
 
   Net assets of GBP39.5 million (2020: GBP38.3 million) increased by 
GBP1.2 million. Current assets decreased by GBP33.6 million to GBP169.9 
million (2020: GBP203.5 million) with a lower cash balance due to 
consideration paid for acquisitions made in the year. Non-current assets 
of GBP121.1 million (2020: GBP54.5 million) increased by GBP66.6 million 
mainly due to the acquired businesses. Non-current liabilities of 
GBP30.5 million (2020: GBP0.8 million) increased mainly by the 
non-current portion of the 3 year term loan. 
 
   CASH FLOW AND LIQUIDITY 
 
   The following table summarises the cash flow movements during the year. 
 
 
 
 
Year ended 31 March (GBPm)                             2021    2020   Change % 
Profit before tax from continuing and discontinued 
 operations                                             27.0    56.8   (52.5%) 
  Provision in relation to the Ofgem Statement 
   of Objections                                        12.5       -         - 
        Depreciation and amortisation                   10.9     9.5     14.7% 
        VAT and other non-cash items                     0.1     0.4   (75.0%) 
        Share-based payments and other items             0.9   (0.4)  (325.0%) 
        Working capital changes (corporate)              0.8     0.1    700.0% 
 
Cash generation                                         52.2    66.4   (21.4%) 
        Taxation payments                              (8.4)  (15.8)   (46.8%) 
Capital expenditure                                    (6.0)   (8.4) 
 Acquisition of Collect+ brand                         (6.0)       -   (28.6%) 
                                                                             - 
        Acquisitions of subsidiaries net of cash 
         acquired                                     (60.8)       -         - 
Movement in loans and borrowings                        11.3    70.0     83.9% 
Lease payments                                         (0.2)   (0.3)   (33.3%) 
        Dividends paid                                (21.4)  (57.4)   (62.8%) 
Net (decrease)/increase in corporate cash 
 and cash equivalents                                 (39.3)    54.5  (172.1%) 
        Net change in clients' funds and retailers' 
         deposits                                       11.9     1.4    750.0% 
Net (decrease)/increase in cash and cash 
 equivalents                                          (27.4)    55.9  (149.0%) 
        Cash and cash equivalents at the beginning 
         of year                                        93.8    37.5    150.1% 
        Effect of foreign exchange rate changes        (1.6)     0.4  (500.0%) 
Cash and cash equivalents at the end of 
 year                                                   64.8    93.8   (30.9%) 
Comprising: 
Corporate cash                                          18.3    58.0   (68.4)% 
Clients' funds and retailers' deposits                  46.5    35.7     30.3% 
                                                                      -------- 
 
 
 
 
 
 
Year ended 31 March (GBPm)                       2021  2020   Change % 
Profit before tax from continuing operations     19.4   50.0   (61.1)% 
  Provision in relation to the Ofgem Statement 
   of Objections                                 12.5      -         - 
        Depreciation and amortisation            10.5    8.7     20.7% 
        VAT and other non-cash items              0.1    0.4   (75.0)% 
        Share-based payments and other items      0.9  (0.4)  (325.0)% 
        Working capital changes (corporate)       0.7  (0.8)  (187.5)% 
Cash generation from continuing operations       44.1   57.9   (23.8)% 
 
 
   Cash generation remained strong with GBP52.2 million (2020: GBP66.4 
million) delivered from profit before tax from continuing and 
discontinued operations of GBP39.5 million (2020: GBP56.8 million). 
There was a net working capital inflow of GBP0.8 million benefiting 
primarily from the VAT deferral offered by HMRC. 
 
   Taxation payments on account of GBP8.4 million (2019: GBP15.8 million) 
were lower than prior year due to HMRC bringing payments on account 
forward by six months in the prior year and a further GBP1.5 million 
corporation tax refund is expected early in the next financial year. 
 
   Capital expenditure of GBP6.0 million (2020: GBP8.4 million) was GBP2.4 
million lower than the prior year. Capital expenditure primarily 
consists of IT hardware, PayPoint One terminals, EPoS and CRM 
development and T4 terminals in Romania. The reduction in capital 
expenditure was due to reduced CRM development as the core platform is 
now live partially offset by the purchase of T4 terminals in Romania. 
There was also an acquisition of the remaining 50% Collect+ brand asset 
that Yodel owned for GBP6.0 million. 
 
   At 31 March 2021 net corporate debt was GBP68.2 million (2020: GBP12.0 
million). Total loans and borrowings of GBP86.6 million consisted of a 
GBP32.5 million term loan, GBP49.5 million drawdown of the GBP75.0 
million revolving credit facility and GBP4.6 million of asset financing 
balances (2020: GBP70.0 million drawdown from the old revolving credit 
facility). A refinancing took place to support the acquisitions made 
during the year whilst the disposal of the Romanian business completed 
on 8 April 2021 and so the GBP48.3 million proceeds are not reflected in 
the year end numbers. The proceeds were used to reduce net debt. 
 
   DIVIDS 
 
 
 
 
Year ended 31 March                              2021           2020  Change % 
-------------------------------------- 
Ordinary dividends per share (pence) 
        Interim (paid)                                    15.6  23.6   (33.9%) 
        Final (proposed)                                  16.6  15.6      6.4% 
Additional dividend per share (pence) 
        Interim (paid)                                       -  18.4  (100.0%) 
        Final                                                -     -      0.0% 
-------------------------------------- 
Total dividend per share (pence)                          32.2  57.6   (45.8%) 
 
Total dividends paid in year (GBPm)                       21.4  57.4   (62.8%) 
 
 
   Due to the need to preserve cash at a time of uncertainty as a result of 
Covid-19, the additional dividend programme announced in May 2016 was 
suspended in March 2020 and we confirmed in the prior year financial 
statements that it will not be reinstated. 
 
   We have declared an increase of 6.4% in the final dividend of 16.6 pence 
per share (2020: 15.6 pence per share) payable in equal instalments of 
8.3 pence per share (2020: 7.8 pence per share) on 29 July 2021 and 30 
September 2021 to shareholders on the register on 24 June 2021 and 26 
August 2021 respectively. The final dividend is subject to the approval 
of the shareholders at the annual general meeting on 20 July 2021. No 
additional dividend has been declared (2020: no final additional 
dividend was declared). 
 
   The final dividends will result in GBP11.4 million (2020: GBP10.7 
million) being paid to shareholders from the standalone statement of 
financial position of the Company which, as at 31 March 2021, had 
approximately GBP56.9 million (2020: GBP58.5 million) of distributable 
reserves. 
 
   An interim ordinary dividend of 15.6 pence (2020: 15.6 pence) and no 
additional interim ordinary dividend (2020: 18.4 pence) was paid in 
equal instalments of 7.8 pence on 29 December 2020 and 8 March 2021. 
 
   CAPITAL ALLOCATION 
 
   The Board's immediate priority is to continue to preserve PayPoint's 
balance sheet strength to ensure PayPoint emerges in a strong position 
following the Covid-19 crisis. 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 not materially changed since the 
prior year end and 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 efficiency of 
      our operations; 
 
   -- Investment in opportunities such as the purchase of the 50% of the 
      Collect+ brand not previously owned by PayPoint in April 2020 and the 
      acquisitions of i-movo, Handepay/Merchant Rentals and RSM 2000 in 
      November 2020, February 2021 and April 2021 respectively; 
 
   -- Progressive ordinary dividends targeting a cover ratio of 1.2 to 1.542 
      times earnings. 
 
 
   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 pages 25 to 29. Our cash and borrowing capacity 
provides sufficient funds to meet the foreseeable needs of the Group 
including dividends. 
 
   Alan Dale 
 
   Finance Director 
 
   26 May 2021 
 
   PRINCIPAL RISKS AND UNCERTAINTIES 
 
   The Board considers these to be the most significant risks and 
uncertainties faced by the Group. 
 
   Strategy 
 
   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 manage rather 
than eliminate risk. The Board is responsible for overseeing the risk 
management process and approves levels of acceptable risk. The Board is 
also responsible for maintaining an appropriate control environment to 
manage risk effectively. The Audit Committee supports the Board in 
reviewing the effectiveness of risk management and internal controls to 
the Audit Committee. The risk management and internal control frameworks 
aim to provide assurance and confidence to stakeholders about PayPoint's 
ability to deliver its objectives and manage risks. 
 
   Risk appetite 
 
   PayPoint's risk appetite is set by the Board with the goal of aligning 
the level of risk considered appropriate to achieving strategic 
objectives, increasing financial returns and adhering with statutory 
requirements. The Board and the Chief Executive have key roles in 
implementing the risk appetite through PayPoint's policies and 
procedures, delegated authorities and internal controls. Risk appetite 
is embedded in all core processes across the Group. 
 
   Risk identification and management 
 
   The risk management process assesses strategic and operational risk 
across all areas of the business and functional risk registers are 
maintained which form an important component of our governance 
framework. Risks are identified by senior management and Executive Board 
members for each functional area and discussed with The Head of Risk and 
Internal Audit. Risks identified are documented in functional risk 
registers which contain a risk description, assessment of materiality, 
probability, mitigating controls, residual risk and risk owners. In 
addition to bottom-up functional risk identification. The risk framework 
also encompasses top-down assessment processes and horizon scanning to 
identify emerging risks trends and technologies as well as identifying 
and preparing for new legislation and regulation. At least annually, 
risks are assessed and agreed with Executive Board members and form the 
basis of 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. 
 
   The principal risks are similar to last year however there are some key 
changes. Key partners and suppliers is no longer considered a principal 
risk and the underlying risk of disruption is included under the 
business interruption principal risk. Losing key clients and retailers 
risk is incorporated into a new operating model principal risk and an 
emerging risk regarding emerging technology was elevated to a principal 
risk during the year. Risk to the business from Covid-19 impact many 
principal risks and each incorporate specific Covid-19 risks where 
applicable. 
 
   The table below sets out our principal risks and emerging risks, the 
potential impact, mitigation strategies, status and their movement 
during the year. They do not comprise all risks faced by the Group and 
are not set out in order of priority. 
 
 
 
 
 
 
   Risk & Trend            Potential Impact                     Mitigation Strategies              Status 
   ----------------------  -----------------------------------  ---------------------------------  ------------------------------ 
Principal Risks 
--------------------------------------------------------------------------------------------------------------------------------- 
1  Competition             PayPoint's markets, and              The Executive Board                Risk is considered 
    and Markets             the competition in those             regularly reviews markets,         stable as acquisitions 
    Unchanged               markets, continue to                 competitor activity,               during the year expand 
    Market                  evolve and failure to                trading opportunities              and strengthen our 
                            deliver effective strategies         and potential acquisitions         card and online payment 
                            to respond to market                 and the Board oversee              businesses as well 
                            changes and competition              and challenge strategic            as diversify our business 
                            will reduce market share,            direction. We closely              into new markets. 
                            revenue and profits.                 monitor consumer and               Taking full ownership 
                            Covid-19 has adversely               technological trends               of Collect+ in April 
                            impacted some of our                 and engage with clients,           2020 has strengthened 
                            markets and may continue             retailers and other                our parcels proposition 
                            to do so if further lockdowns        stakeholders to improve            to capitalise on the 
                            occur. The decline in                our proposition in                 growth in online sales, 
                            cash usage and other                 existing markets. We               particularly since 
                            changes in consumer trends           continually develop                Covid-19. We continue 
                            adversely impact some                products, services                 to closely monitor 
                            markets, and competition             and technology to adapt            competition and no 
                            from direct competitors              to changes in consumer             key clients or retailers 
                            and new and alternative              trends, and make acquisitions      were lost to competitors 
                            payment solutions also               to expand into new                 during the year. However, 
                            impact margins.                      and growing markets                competition is placing 
                                                                 such as card and online            downward pressure 
                                                                 payments as consumers              on margins in our 
                                                                 move away from cash.               bill payments market. 
   ----------------------  -----------------------------------  ---------------------------------  ------------------------------ 
2  Operating               Our core business relies             PayPoint builds strategic          Risk is considered 
    Model                   on an appropriate mix                relationships with                 stable as we made 
    Unchanged               of clients and retailers             key clients and retailers          good progress during 
    Business                and failure to maintain              and we continually                 the year on retailer 
                            attractive client and                seek to improve service            engagement with our 
                            retailer propositions                levels through new                 October 2020 engagement 
                            with relevant products               initiatives, products              survey results significantly 
                            and technology, may cause            and technology and                 improving on prior 
                            attrition adversely impacting        we monitor performance             years. We did not 
                            our business model. Other            through regular retailer           lose any key clients 
                            business areas such as               engagement and other               or retailers during 
                            card payments may also               surveys. New clients,              the year and we continue 
                            rely on key partner relationships    retailers and merchants            to renew contracts 
                            and it is important strong           are routinely onboarded,           and onboard new retailers, 
                            relationships are maintained         many on long-term contracts,       clients and merchants 
                            and alternative partners             ensuring a stable model            in line with expectations. 
                            are contracted where                 and balanced and diversified       Our acquisition of 
                            possible, to ensure a                portfolio.                         Handepay and Merchant 
                            resilient operating model.           Where products rely                Rentals increases 
                                                                 on key partners including          our card acquirer 
                                                                 our ATM and card payment           partnerships and we 
                                                                 businesses, we invest              are expanding our 
                                                                 in our relationships               relationship with 
                                                                 and processes to maintain          LINK through the new 
                                                                 effective partnerships             LINK counter service 
                                                                 and we seek to embed               initiative. 
                                                                 contingency where possible. 
   ----------------------  -----------------------------------  ---------------------------------  ------------------------------ 
3  Trans-formation         Failure to integrate                 The Executive Board                Risk is increasing 
    & Acquisition           acquisitions and effectively         assess transformation              due to the amount 
    Integration             manage significant change            as part of the strategic           of change during the 
    Increased               and will impede business             planning process, including        year. Although recent 
    Strategic               performance and our ability          acquisition opportunities,         acquisitions significantly 
                            to achieve strategic                 and the Board oversee              rebalance our business 
                            goals. Our business relies           and challenge strategic            away from cash to 
                            on continued innovation              direction.                         digital channels, 
                            and implementations and              PayPoint is committed              the significant change 
                            failure to effectively               to its transition from             and integration work 
                            manage our transition                cash to digital, whilst            increases risk until 
                            from cash to digital                 continuing to innovate             complete. Acquisition 
                            will ultimately reduce               and invest in our legacy           integration is on 
                            revenue. Continued system            products. The Executive            track with Handepay 
                            infrastructure improvements          Board oversee all major            and Merchant Rentals 
                            are essential in providing           projects to ensure                 integrated into a 
                            resilient and effective              effective governance,              new Card Services 
                            services, and a lack                 and implementation                 Executive led function, 
                            of investment or poor                and steering groups                and re-platforming 
                            implementation will impact           were implemented to                of our online payment 
                            business performance.                oversee integration                products is underway. 
                            Additionally, we sold                of our recent acquisitions.        In 2020 we implemented 
                            PayPoint Romania, for                Product and infrastructure         Salesforce as our 
                            which we still provide               reviews are conducted              enterprise Customer 
                            IT services which need               to identify improvements           Relationship Management 
                            effective separation                 and architecture, systems          platform transforming 
                            in line with the sale                and products are routinely         our retail partner 
                            agreement.                           upgraded.                          infrastructure, and 
                                                                                                    we continue to make 
                                                                                                    progress with upgrade 
                                                                                                    initiatives including 
                                                                                                    migration to the cloud. 
                                                                                                    We are reviewing our 
                                                                                                    legacy architecture 
                                                                                                    and numerous infrastructure 
                                                                                                    improvement programmes 
                                                                                                    are underway and the 
                                                                                                    separation of Romania 
                                                                                                    IT infrastructure 
                                                                                                    is on track. 
   ----------------------  -----------------------------------  ---------------------------------  ------------------------------ 
4  Emerging                New and emerging technologies        We continually develop             Risk is increasing 
    Technology              are changing the way                 products with the latest           as new technology 
    Increased               consumers pay for goods              technology, evolving               such as SMET2 gas 
    Market                  and services impacting               them to take advantage             and electric smart 
                            our products and markets.            of new and expanding               meters are eroding 
                            For many years cash was              markets created by                 legacy bill payments 
                            the principal payment                the UK's digital transformation.   and mobile top up 
                            method for topping up                The Executive Board                markets. However, 
                            gas and electricity however          closely monitors emerging          our recent acquisitions 
                            this is changing and                 technologies, and the              have accelerated our 
                            PayPoint therefore needs             impact they may have               ability to mitigate 
                            to evolve its proposition            on PayPoint, and mitigating        the impact of emerging 
                            to capitalise on new                 strategies are implemented         technologies and we 
                            technology and payment               where possible. Emerging           are already re-platforming 
                            methods. New disruptive              technology is a key                RSM 2000's online 
                            fintech products, and                component of our acquisition       payment product which 
                            large tech companies                 strategy with acquisitions         will better enable 
                            who are increasingly                 focussed on digital                us to expand our presence 
                            advancing into payment               products.                          in digital payment 
                            solutions, have the potential                                           markets. We are engaged 
                            to significantly impact                                                 in various government 
                            our business. Covid-19                                                  schemes involving 
                            has accelerated global                                                  new technology as 
                            digital transformation                                                  well as other technological 
                            and there is risk to                                                    product advances. 
                            our business if our digital                                             We also continually 
                            transformation fails                                                    assess our terminal 
                            to keep pace and we do                                                  estate to maximise 
                            not exploit new technologies                                            the benefit to retailer 
                            and markets to evolve                                                   partners. 
                            our proposition. 
   ----------------------  -----------------------------------  ---------------------------------  ------------------------------ 
5  Legal and               PayPoint is required                 Our Legal and Regulatory           Risk is considered 
    Regulatory              to comply with numerous              Compliance teams work              to be increasing due 
    Increased               contractual, legal and               closely with management            to the increase in 
    Business                regulatory requirements              on all legal and regulatory        regulated entities. 
                            and failure to meet obligations      matters and adopt strategies       A new Executive Board 
                            may result in fines,                 to ensure PayPoint                 General Counsel and 
                            penalties, prosecution,              is appropriately protected         Head of Compliance 
                            financial loss and reputational      and complies with regulatory       joined during the 
                            damage. Recent acquisitions          requirements. They                 year and is evolving 
                            have increased the number            engage on all key contracts        our legal and regulatory 
                            of regulated entities                and legal matters and              compliance organisation 
                            and as regulatory landscapes         oversee regulatory                 to meet the needs 
                            evolve, there is a risk              compliance programmes,             of our increased portfolio 
                            that changes may adversely           monitoring and reporting.          of regulated businesses. 
                            impact our business.                 Emerging regulations               We are investing in 
                            In September 2020, PayPoint          are incorporated into              our Regulatory Compliance 
                            received a Statement                 strategic planning,                team and framework 
                            of Objections from Ofgem             and we engage with                 to ensure we have 
                            under the Competition                regulators to ensure               strong processes. 
                            Act, and possible outcomes           our frameworks are                 Our work responding 
                            from the Statement of                appropriate to support             to Ofgem's Statement 
                            Objections are a risk                new products and initiatives.      of Objections continues. 
                            for the Company..                    External counsel is                No other signficiant 
                                                                 engaged where required             legal matters occurred 
                                                                 and we respond promptly            during the year. 
                                                                 and comprehensively 
                                                                 to all regulatory enquiries. 
   ----------------------  -----------------------------------  ---------------------------------  ------------------------------ 
6  Cyber                   Cyberattacks on systems              The Executive Board                Cyber security continues 
    Security                and networks may significantly       assess PayPoint's cyber            to be a key focus 
    and                     impact service delivery              security and data protection       however risk is considered 
    Data                    and data protection causing          framework and processes            to be increasing because 
    Protection              harm to PayPoint, our                and the Cyber Security             of the external threat 
    Increased               customers and other stakeholders.    and IT sub-committee               landscape and the 
    Operational             Covid-19 resulted in                 of the Audit Committee             introduction of new 
                            a global increase in                 maintain oversight.                IT environments into 
                            criminals exploiting                 Our IT security framework          the Group. 
                            vulnerabilities, and                 is comprehensive with              However, PayPoint 
                            recent acquisitions have             multiple security systems          has not experienced 
                            increased the number                 and controls deployed              a material change 
                            of IT environments, products         across the group. We               in cyber threat activity 
                            and systems we need to               are ISO27001 and PCI               during the year or 
                            protect. Although PayPoint           DSS Level 1 certified              experienced any material 
                            has multiple cyber security          and systems are constantly         attacks or data breaches. 
                            systems, capabilities                monitored for attacks              Group security standards 
                            and controls, businesses             with response plans                and systems are being 
                            have experienced increased           implemented and tested.            applied to the IT 
                            ransomware attacks over              Employees receive regular          environments acquired 
                            the last year and attacks            cyber security training,           during the year before 
                            are a constant threat.               and awareness is promoted          environments are integrated. 
                            Failure to safeguard                 through phishing simulations       During the year we 
                            systems, networks and                and other initiatives.             engaged a third party 
                            data and comply with                 We engage with stakeholders        to assess our cyber 
                            data protection requirements         on cyber-crime and                 defences and we are 
                            may result in significant            proactively manage                 strengthening controls 
                            financial loss and reputational      adherence with data                for recommendations 
                            damage.                              protection requirements.           made. We are also 
                                                                                                    enhancing our cyber 
                                                                                                    monitoring and response 
                                                                                                    capabilities including 
                                                                                                    the introduction of 
                                                                                                    a Security Operations 
                                                                                                    Centre. 
   ----------------------  -----------------------------------  ---------------------------------  ------------------------------ 
7  Business                Clients, retailers and               The Executive Board                Risk is considered 
    Interruption            consumers rely on our                reviews PayPoint's                 stable as much of 
    Unchanged               systems being resilient              business continuity                the business continued 
    Operational             with continued service               framework and the Cyber            trading throughout 
                            delivery, and failure                Security and IT sub-committee      Covid-19 lockdowns 
                            to promptly recover services         of the Audit Committee             and we adapted well 
                            may result in financial              maintains oversight.               to home working with 
                            loss and reputational                Business continuity,               the change having 
                            harm. Integrating recent             disaster recovery and              little to no impact 
                            acquisitions, and transforming       major incident response            on business operations. 
                            our infrastructure as                plans are maintained               Only one supplier 
                            we transition our business           and tested with failover           failed during the 
                            from cash to digital,                capabilities across                year without causing 
                            increases the risk of                third party data centres           disruption. However, 
                            disruptive events and                and the cloud. Systems             an IT supplier performance 
                            change must be carefully             are routinely upgraded             issue caused a service 
                            managed to avoid business            with numerous change               outage in November 
                            interruption. Our infrastructure     management processes               2020 primarily impacting 
                            and service delivery                 deployed and resilience            card payments. Numerous 
                            is supported by multiple             embedded where possible.           internal and external 
                            suppliers and poor supplier          Supplier failure can               reviews were conducted 
                            performance or supplier              disrupt PayPoint's                 following the incident 
                            failure may adversely                service delivery and               and we are making 
                            impact our business.                 risk is managed through            substantial changes 
                                                                 contractual arrangements,          to our infrastructure 
                                                                 alternative supplier               and processes which 
                                                                 arrangements and business          will significantly 
                                                                 continuity plans.                  strengthen our continuity 
                                                                                                    controls. Card payment 
                                                                                                    transactions have 
                                                                                                    already been re-routed 
                                                                                                    for nearly all retail 
                                                                                                    partners which would 
                                                                                                    prevent a repeat incident. 
   ----------------------  -----------------------------------  ---------------------------------  ------------------------------ 
8  Credit and              Material credit exposures            PayPoint has effective             Risk is considered 
    Operational             exist with large retailers           credit and operational             stable as there were 
    Unchanged               and other counterparties,            processes and controls.            no material credit 
    Operational             and failure of a large               Retailers and counterparties       losses, frauds or 
                            retailer or counterparty             are subject to ongoing             processing errors 
                            could result in significant          credit assessments                 during the year and 
                            financial loss. PayPoint             and effective debt                 our credit exposure 
                            processes large volumes              management processes               has not been materially 
                            of payments and is exposed           are implemented. Settlement        impacted by Covid-19. 
                            to risk of direct or                 processes and controls             We adapted well to 
                            indirect loss from failed            are continually assessed           home working during 
                            or inadequate processes.             and enhanced with new              Covid-19 which had 
                            Effective operational                systems and technology             little to no impact 
                            controls are essential               implemented. We have               on our control environment. 
                            to ensure funds are settled          effective governance               We continue to enhance 
                            securely and timely,                 with oversight committees,         our governance, controls 
                            and inadequate or failed             delegated authorities              and systems and during 
                            controls could result                and policies for key               the year we implemented 
                            in fraud, liquidity risk,            processes. Segregation             a new payment platform 
                            contractual breaches                 of duties and approvals            with increased resilience 
                            or other financial loss.             are implemented for                and controls. For 
                                                                 all areas where fraud              the recently acquired 
                                                                 or material error may              companies, we are 
                                                                 occur.                             conducting assessments 
                                                                                                    of operational processes 
                                                                                                    and controls and making 
                                                                                                    enhancements where 
                                                                                                    necessary. 
   ----------------------  -----------------------------------  ---------------------------------  ------------------------------ 
9  People and              Failure to attract and               The Executive Board                Risk is considered 
    Culture                 retain key talent, and               clearly define and                 stable as during the 
    Unchanged               appropriately integrate              advocate PayPoint's                year employee engagement 
    Business                acquisition employees,               purpose, vision and                survey results improved 
                            may impact service levels            values. An Employee                and staff turnover 
                            and delivery of strategic            Forum comprising employees         reduced. Acquisition 
                            objectives. An inability             from across the business           integration is on 
                            to maintain a strong                 engages directly with              track and our next 
                            culture of ethical behaviours        the Board on employee              engagement survey 
                            and employee wellbeing               matters. Integrating               to assess progress 
                            creates risk to our business,        acquisition employees              is underway. We continue 
                            people customers and                 is a strategic priority            to follow government 
                            other stakeholders. As               and we continue to                 guidance on Covid-19 
                            we move to new hybrid                invest in, and support             working practices 
                            way of working with increased        our people, particularly           and have implemented 
                            home working, in addition            through Covid-19 where             numerous initiatives 
                            to integrating cultures              numerous steps have                to protect our people 
                            from recent acquisitions,            been taken to ensure               and ensure their wellbeing. 
                            it is important our people           employee wellbeing.                Additionally, the 
                            are well supported to                We have well established           Executive Board recently 
                            ensure strong service                processes for talent               revised PayPoint's 
                            delivery and achievement             management and people              purpose, vision and 
                            of strategic objectives.             development and there              values and the Employee 
                                                                 is continued focus                 Forum continues to 
                                                                 on culture and ethics.             play an active role 
                                                                                                    in employee engagement, 
                                                                                                    particularly regarding 
                                                                                                    return to work plans 
                                                                                                    following the Covid-19 
                                                                                                    lockdown. 
   ----------------------  -----------------------------------  ---------------------------------  ------------------------------ 
Emerging Risks 
--------------------------------------------------------------------------------------------------------------------------------- 
1  Government              Changes in government                The Board monitors                 Two main areas of 
    policy                  policy cannot be reliably            government policy changes          government policy 
                            predicted and may lead               impacting products                 impacting our markets 
                            to adverse impacts on                and markets and incorporates       are the Access to 
                            our proposition and markets.         changes into strategic             Cash Review and the 
                            Material policy changes              decisions where feasible.          Payment Systems Regulator 
                            may structurally impact              PayPoint is a member               Market review into 
                            our markets and it is                of industry bodies                 the supply of card 
                            important we plan for                who consult with government        acquiring services. 
                            possible policy outcomes             policy makers to help              For Access to Cash, 
                            where impacts are identified         them make informed                 we continue to engage 
                            to ensure our ability                decisions. We also                 HM Treasury and the 
                            to respond, adapt and                engage with key government         FCA. We are also closely 
                            take advantage of changes            stakeholders including             monitoring developments 
                            where they may arise.                HM Treasury and Department         from the review into 
                                                                 for Environment, Food              card acquiring services 
                                                                 and Rural Affairs on               and modelling the 
                                                                 matters impacting PayPoint's       impact of possible 
                                                                 markets and continually            outcomes on our business. 
                                                                 assess our approach                As government policy 
                                                                 to engagement.                     grows in importance 
                                                                                                    to our business, we 
                                                                                                    are increasing our 
                                                                                                    focus on government 
                                                                                                    engagement. 
   ----------------------  -----------------------------------  ---------------------------------  ------------------------------ 
2  Climate &               Climate risk is increasingly         The Executive Board                During the year we 
    Social Responsibility   becoming a key priority              sets PayPoint's climate            reviewed and enhanced 
                            for governments and organisations,   and social responsibility          our climate and environmental 
                            and PayPoint needs to                agendas and recommends             impact processes to 
                            play its part in reducing            strategy to the Board.             better understand 
                            carbon emissions and                 We continually review              and measure our impact 
                            its impact on the environment.       our approach to climate            on the environment 
                            Approximately 25% of                 risk and social responsibility     and identify steps 
                            our revenue is derived               and as we move forward             to reduce emissions 
                            from the energy market               environmental and social           and our impact on 
                            and we need to closely               responsibility will                the environment. We 
                            monitor the impact on                be integral in decision            have already taken 
                            our energy clients of                making. We aim to align            significant steps 
                            the UK moving to net                 our business model                 to reduce our environmental 
                            zero emissions by 2050,              with reducing carbon               impact including moving 
                            to ensure our revenue                emissions such as our              to hybrid working 
                            streams are sustainable.             parcel proposition                 model reducing journeys 
                            We anticipate climate                which eliminates the               to the office and 
                            considerations to impact             need for couriers to               we engaged a new supplier 
                            all areas of business                drive the last mile                to dispose of terminals 
                            going forward including              to people's homes.                 sustainably by promoting 
                            terminal manufacture                 We have multiple policies          reuse and recycling. 
                            and disposal, office                 and processes governing            We are also rationalising 
                            space and travel. Additionally,      our social responsibility          the amount of office 
                            there is increasing focus            strategy and we continually        space needed following 
                            on social responsibility             assess and evolve our              acquisitions. We have 
                            and we need to ensure                strategy and working               strengthened our anti-slavery 
                            our business creates                 practices to ensure                and anti-bribery processes 
                            shared value to all stakeholders     the best outcomes for              and new products and 
                            to protect our brand                 stakeholders and the               initiatives will assist 
                            and ensure sustainability.           environment.                       reducing emissions 
                                                                                                    such as LINK counter 
                                                                                                    service which would 
                                                                                                    reduce the need for 
                                                                                                    physical ATM terminal 
                                                                                                    manufacture. 
   ----------------------  -----------------------------------  ---------------------------------  ------------------------------ 
 
 
   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 25 to 28) and 
the strategic plans that are reviewed at least annually by the Board. 
 
   The Directors believe that a three-year period remains an appropriate 
period over which a reasonable expectation of the Group's longer-term 
viability can be evaluated and is aligned with the Group's most recent 
strategic and financial planning time horizon, which was reviewed by the 
Board in March 2021. It reflects the nature of PayPoint's key product 
and client relationships and the markets in which we operate as 
described on page 8 of this report. 
 
   PayPoint's strategic and financial planning process reflects the 
Directors' best estimate of the prospects for the Group including 
assumptions around key client renewals, new client and sector targets, 
integration of acquisitions and the development of existing and new key 
products and service lines. 
 
   The Directors have carried out an assessment of the principal risks and 
uncertainties (which are set out on pages 25 to 28) and applied several 
different but plausible scenarios arising from those risks to test the 
Group's viability. These scenarios include: 
 
   Competition and Markets and operating model: 
 
 
   -- Failure to maintain significant client contracts resulting in 20% to 40% 
      reduction in transaction volumes depending on the nature of clients and 
      their contracts and 
 
   -- Inadequate recruitment or excessive churn in the retail network with the 
      estate reducing by a third. 
 
   -- Transformation and acquisition integration: Acquisitions and new products 
      or service lines do not deliver to expectations with minimal contribution 
      from new products and the synergies of acquisitions not coming to 
      fruition 
 
   -- Legal and regulatory: Fines / reputational damage amounting to GBP18 
      million (being the higher of 4% of turnover or Eur 20 million fine as 
      referenced in EU General Data Protection Regulations) 
 
   -- Cyber security and business interruption: The financial impact of 
      technical failure from cyber-attacks resulting in a network outage for up 
      to seven days 
 
   -- Credit and operational: Multiple retailer groups entering receivership 
      assuming a 10% loss of client funds, where PayPoint is liable, across all 
      large multiple groups 
 
   In the unusual set of circumstances of all the above significant 
scenarios occurring together, the viability scenario also factors 
mitigations including achievable reductions in expenditure and a 
reduction in level of dividends following the payment of the final 
dividend of 16.6p declared in respect of financial year ending 31 March 
2021. 
 
   In last year's annual report there was a specific consideration of a 
Covid-19 scenario but based on the solid business performance in the 
financial year the Directors consider this is no longer required. 
 
   Based on this assessment and the availability of sufficient financing 
facilities, the Directors confirm that 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 viability period. 
 
   CONSOLIDATED STATEMENT OF PROFIT OR LOSS 
 
 
 
 
                                                                   Restated(43) 
Year ended 31 March (GBP000)                       Note    2021        2020 
Continuing operations 
Revenue                                             2,3   127,747       144,289 
Cost of revenue                                       4  (47,280)      (53,142) 
Gross profit                                               80,467        91,147 
Administrative expenses -- excluding exceptional 
 items                                                   (43,578)      (40,687) 
Exceptional items -- administrative expenses          5  (15,600) 
Operating profit                                           21,289        50,460 
Finance income                                                 22           149 
Finance costs -- excluding exceptional 
 items                                                    (1,352)         (626) 
Discount unwind of deferred, contingent 
 consideration liability                             15      (57)             - 
Exceptional items -- finance costs                    5     (459)             - 
Profit before tax from continuing operations               19,443        49,983 
Tax on continuing operations                          6   (4,335)       (9,961) 
Profit from continuing operations                          15,108        40,022 
Discontinued operation 
Profit from discontinued operation, net 
 of tax                                               9     6,423         5,646 
Profit for the year attributable to equity 
 holders of the parent                                     21,531        45,668 
-------------------------------------------------  ----  --------  ------------ 
 
Earnings per share 
Basic                                               8       31.5p         66.9p 
Diluted                                             8       31.3p         66.3p 
-------------------------------------------------  ----  --------  ------------ 
 
Earnings per share -- continuing operations 
Basic                                               8       22.1p         58.6p 
Diluted                                             8       21.9p         58.1p 
-------------------------------------------------  ----  --------  ------------ 
 
 
   CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 
 
 
 
 
 
 Year ended 31 March (GBP000)                   2021    2020 
Items that may subsequently be reclassified 
 to the consolidated statement of profit 
 or loss: 
Exchange differences on translation of 
 foreign operations                             (912)     256 
Other comprehensive (loss)/income for 
 the year                                       (912)     256 
Profit for the year                            21,531  45,668 
Total comprehensive income for the year 
 attributable to equity holders of the 
 parent                                        20,619  45,924 
---------------------------------------------  ------  ------ 
 
 
 
   CONSOLIDATED STATEMENT OF FINANCIAL POSITION 
 
 
 
 
As at 31 March (GBP000)                        Note   2021     2020 
Non-current assets 
Goodwill                                         10   51,551   11,853 
Other intangible assets                               41,698   17,274 
Property, plant and equipment                         21,379   24,840 
Net investment in finance lease receivables            6,511        - 
Deferred tax asset                                         -      565 
Total non-current assets                             121,139   54,532 
---------------------------------------------  ----  -------  ------- 
Current assets 
Inventories                                            1,059      214 
Trade and other receivables                      11   69,576  108,368 
Current tax asset                                      3,021    1,099 
Cash and cash equivalents                        12   38,940   93,774 
                                                     112,596  203,455 
Assets held for sale                              9   57,353        - 
Total current assets                                 169,949  203,455 
Total assets                                         291,088  257,987 
---------------------------------------------  ----  -------  ------- 
Current liabilities 
Trade and other payables                         13  102,504  148,621 
Provision                                        14   12,500 
Deferred, contingent consideration liability     15    1,462        - 
Lease liabilities                                        194      197 
Loans and borrowings                             18   63,627   70,000 
                                                     180,287  218,818 
Liabilities directly associated with the 
 assets held for sale                             9   40,866        - 
Total current liabilities                            221,153  218,818 
---------------------------------------------  ----  -------  ------- 
Non-current liabilities 
Trade and other payables                         13        -       95 
Deferred, contingent consideration liability     15    4,285        - 
Lease liabilities                                        253      744 
Loans and borrowings                             18   22,956        - 
Deferred tax liability                                 2,971        - 
Total non-current liabilities                         30,465      839 
Total liabilities                                    251,618  219,657 
---------------------------------------------  ----  -------  ------- 
Net assets                                            39,470   38,330 
Equity 
Share capital                                    16      229      228 
Share premium                                          4,975    4,485 
Merger reserve                                   16      999        - 
Share-based payment reserve                      17    2,005    1,875 
Translation reserve                                  (1,645)    (733) 
Retained earnings                                     32,907   32,475 
Total equity attributable to equity holders 
 of the parent                                        39,470   38,330 
---------------------------------------------  ----  -------  ------- 
 
 
   The financial statements were approved by the Board of Directors and 
authorised for issue on 26 May 2021 and were signed on behalf of the 
Board of Directors. 
 
   Nick Wiles 
 
   Chief Executive 
 
   26 May 2021 
 
   CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 
 
 
 
 
                                                                   Share-based 
                                Share     Share                      payment    Translation  Retained 
                                capital   premium  Merger reserve    reserve      reserve     earnings  Total equity 
                         Note   GBP000    GBP000       GBP000         GBP000       GBP000      GBP000      GBP000 
Opening equity 
 1 April 2019                       227     3,352               -        2,684        (989)     44,876        50,150 
Profit for the 
 year                                 -         -               -            -            -     45,668        45,668 
Exchange differences 
 on translation 
 of foreign operations      9         -         -               -            -          256          -           256 
Comprehensive 
 income for the 
 year                                 -         -               -            -          256     45,668        45,924 
Adoption of 
 IFRS 16                              -         -               -            -            -       (73)          (73) 
Issue of shares            16         1         -               -            -            -          -             1 
Equity-settled 
 share-based 
 payment expense           17         -         -               -          631            -          -           631 
Vesting of share 
 scheme                    17         -     1,133               -      (1,416)            -      (746)       (1,029) 
Deferred tax 
 on share-based 
 payments                             -         -               -         (24)            -        169           145 
Dividends                   7         -         -               -            -            -   (57,419)      (57,419) 
Closing equity 
 31 March 2020                      228     4,485               -        1,875        (733)     32,475        38,330 
-----------------------  ----  --------  --------  --------------  -----------  -----------  ---------  ------------ 
Profit for the 
 year                                 -         -               -            -            -     21,531        21,531 
Exchange differences 
 on translation 
 of foreign operations                -         -               -            -        (912)          -         (912) 
Comprehensive 
 income for the 
 year                                 -         -               -            -        (912)     21,531        20,619 
Issue of shares            16         1         -             999            -            -          -         1,000 
Equity-settled 
 share-based 
 payment expense           17         -         -               -        1,066            -          -         1,066 
Vesting of share 
 scheme                    17         -       490               -        (926)            -        286         (150) 
Deferred tax 
 on share-based 
 payments                             -         -               -         (10)            -          -          (10) 
Dividends                   7         -         -               -            -            -   (21,385)      (21,385) 
Closing equity 
 31 March 2021                      229     4,975             999        2,005      (1,645)     32,907        39,470 
-----------------------  ----  --------  --------  --------------  -----------  -----------  ---------  ------------ 
 
 
 
   CONSOLIDATED STATEMENT OF CASH FLOWS 
 
 
 
 
Year ended 31 March (GBP000)                         Note    2021      2020 
Net cash inflow from operating activities              19    55,438    51,481 
 
Investing activities 
        Investment income                                       332       531 
        Purchases of property, plant and equipment          (3,287)   (2,963) 
        Purchases of intangible assets                      (8,745)   (5,445) 
        Acquisitions of subsidiaries net of cash 
         acquired                                          (60,800)         - 
        Proceeds from restructuring discontinued 
         operation                                               21         - 
Net cash used in investing activities                      (72,479)   (7,877) 
 
Financing activities 
Dividends paid                                          7  (21,385)  (57,419) 
Proceeds from issue of share capital                              1         1 
Repayment of loans and borrowings                      18  (70,000)         - 
Proceeds from loans and borrowings                     18    81,259    70,000 
Payment of lease liabilities                                  (211)     (271) 
Net cash (used in)/from financing activities               (10,336)    12,311 
 
Net (decrease)/increase in cash and cash 
 equivalents                                               (27,377)    55,915 
Cash and cash equivalents at beginning 
 of year                                                     93,774    37,485 
Effect of foreign exchange rate changes                     (1,591)       374 
Cash and cash equivalents at end of year                     64,806    93,774 
---------------------------------------------------  ----  --------  -------- 
 
 
   Reconciliation of cash and cash equivalents 
 
 
 
 
As at 31 March (GBP000)                          2021    2020 
Continuing operations 
Corporate cash                                  10,535  49,349 
Clients' funds and retailers' deposits          28,405  20,097 
                                                38,940  69,446 
Discontinued operation 
Corporate cash                                   7,814   8,686 
Clients' funds and retailers' deposits          18,052  15,642 
                                                25,866  24,328 
Cash and cash equivalents on the statement of 
 financial position 12                          64,806  93,774 
----------------------------------------------  ------  ------ 
 
 
   NOTES TO THE FINANCIAL STATEMENTS 
 
   1.  Significant accounting policies 
 
   Basis of preparation 
 
   This preliminary announcement does not constitute the Company's 
statutory accounts for the years ended 31 March 2021 or 31 March 2020, 
but is derived from the statutory accounts and has complied with 
International Financial Reporting Standards (IFRS). This announcement 
does not contain sufficient information to fully comply with IFRS. The 
Company expects to publish full financial statements that comply with 
IFRS in due course. 
 
   Statutory accounts for 2020 have been delivered to the Registrar of 
Companies and those for 2021 will be delivered following the Company's 
annual general meeting. The auditors have reported on those accounts and 
the report was unqualified, did not draw attention to any emphasis of 
matters and did not contain statements under s498(2) or (3) of the 
Companies Act 2006. 
 
   This preliminary announcement complies with the recognition and 
measurement criteria of IFRS, and with the accounting policies of the 
Group which are set out in the 2021 Annual Report. The accounting 
policies applied are consistent with the prior year apart from 
non-current assets held for sale and discontinued operations and 
deferred, contingent consideration as set out in the 2021 Annual Report. 
No subsequent material changes have been made to the Group's accounting 
policies with selected accounting policies included below. 
 
   The financial statements have been prepared on a going concern basis. 
The Group manages its capital to ensure that entities in the Group will 
be able to continue as a going concern while maximising the return to 
shareholders through the optimisation of the debt to equity balance. The 
capital structure of the Group consists of debt, cash and cash 
equivalents and equity attributable to equity holders of the parent 
comprising capital, reserves and retained earnings. The Group's policy 
is to borrow centrally to meet anticipated funding requirements. Our 
cash and borrowing capacity provides sufficient funds to meet the 
foreseeable needs of the Group. At 31 March 2021, the Group had cash and 
cash equivalents of GBP64.8 million, including GBP46.5 million of 
clients' funds and retailer partners' deposits. At 31 March 2021, the 
Group had cash and cash equivalents from continuing operations of 
GBP38.9 million, including GBP28.4 million of clients' funds and 
retailer partners' deposits. In addition, following refinancing in the 
year the Group has in place a three-year GBP32.5m amortising term loan 
and a three-year unsecured GBP75 million revolving credit facility 
expiring in February 2024. At 31 March 2021, GBP49.5 million (2020: 
GBP70 million) was drawn down from the revolving credit facility to 
finance the acquisitions made in the year. At 31 March 2021 the Group 
also had GBP4.6 million (2020: GBPnil) of block loan balances. The Group 
has a strong statement of financial position, with net assets of GBP39.5 
million as at 31 March 2021, having made a profit for the year of 
GBP21.5 million and delivered net cash flows from operating activities 
of GBP55.4 million for the year then ended. The Group has net current 
liabilities of GBP51.2m (2020: GBP15.4m). On 8 April 2021 the Group 
received GBP48.3 million proceeds from the disposal of the Romanian 
business. The proceeds were used to reduce net debt. 
 
   The Directors have prepared cash flow forecast scenarios for a period of 
at least 12 months from the date of this announcement, taking into 
account the Group's current financial and trading position, the 
principal risks and uncertainties and the strategic plans that are 
reviewed at least annually by the Board. Additionally, the Directors 
have carried out an assessment of the principal risks and uncertainties 
and applied several severe but plausible scenarios to further test the 
Group viability, these included a reduction in the volume of 
transactions, loss of key contracts and under-performance of 
acquisitions and new products or service lines. As mitigating actions we 
have assumed achievable reductions in expenditure and a reduction in the 
level of future dividends following the payment of the final dividend of 
16.6 pence per share declared in respect of financial year ending 31 
March 2021. 
 
   The cash flow forecasts included an analysis and stress test for the 
above scenarios to ensure working capital movements within a reporting 
period do not trigger a covenant breach. Based on this assessment, the 
Directors confirm that 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 not less than 12 months from the date of 
this announcement and therefore have prepared the financial statements 
on a going concern basis. 
 
   Adoption of standards 
 
   The accounting policies applied by the Group in the financial statements 
for the year ended 31 March 2021 are the same as those set out in the 
Group's Annual Report for the year ended 31 March 2020, apart from 
non-current assets held for sale and discontinued operations, deferred, 
contingent consideration and government grants which are detailed below. 
 
   Non-current assets held for sale and discontinued operations 
 
   A non-current asset or a group of assets containing a non-current asset 
(a disposal group) is classified as held for sale if its carrying amount 
will be recovered principally through sale rather than through 
continuing use, it is available for immediate sale and sale is highly 
probable within one year. 
 
   On initial classification as held for sale, non-current assets and 
disposal groups are measured at the lower of previous carrying amount 
and fair value less costs to sell with any adjustments taken to profit 
or loss. The same applies to gains and losses on subsequent 
remeasurement although gains are not recognised in excess of any 
cumulative impairment loss. Any impairment loss on a disposal group is 
first allocated to goodwill, and then to remaining assets and 
liabilities on pro rata basis, except that no loss is allocated to 
inventories, financial assets, deferred tax assets, employee benefit 
assets and investment property, which continue to be measured in 
accordance with the Group's accounting policies. Intangible assets and 
property, plant and equipment once classified as held for sale or 
distribution are not amortised or depreciated. 
 
   A discontinued operation is a component of the Group's business that 
represents a separate major line of business or geographical area of 
operations that has been disposed of or is held for sale, or is a 
subsidiary acquired exclusively with a view to resale. Classification as 
a discontinued operation occurs upon disposal or when the operation 
meets the criteria to be classified as held for sale, if earlier. The 
post-tax profit or loss of the discontinued operations is shown as a 
single line on the face of the consolidated income statement, separate 
from the continuing operating results of the Group. When an operation is 
classified as a discontinued operation, the comparative income statement 
is restated as if the operation had been discontinued from the start of 
the comparative period. 
 
   Deferred, contingent consideration 
 
   Where a business combination agreement provides for an adjustment to the 
consideration, contingent on future performance over the contractual 
earnout period, the Group accrues the fair value, based on the estimated 
additional consideration payable as a liability at the acquisition date. 
To the extent that the contingent consideration is payable after more 
than one year from the acquisition date, the contingent consideration is 
discounted at an appropriate interest rate and carried at net present 
value in the consolidated statement of financial position. The discount 
component is then unwound as a finance cost in the consolidated 
statement of profit or loss over the life of the earnout. The liability 
is measured against the contractually agreed performance targets at each 
subsequent reporting date with any adjustments recognised in the 
consolidated statement of profit or loss. Where the contingent 
consideration is contractually linked to ongoing employment of the 
founders over the contractual period it is treated as an expense and 
recognised in the consolidated statement of profit or loss. 
 
   Government grants 
 
   Government grants have been accounted for in line with IAS 20 Accounting 
for Government Grants and Disclosure of Government Assistance. Grants 
for the reimbursement of operating expenditure are deducted from the 
related category of costs in the income statement. 
 
   Alternative performance measures 
 
   Non-IFRS measures or alternative performance measures are used by the 
Directors and management for performance analysis, planning, reporting 
and incentive-setting purposes and have remained consistent with the 
prior year, other than underlying performance measures as defined below. 
These measures are included in these financial statements to provide 
additional useful information on performance and trends to shareholders. 
 
   These measures are not defined terms under IFRS and therefore they may 
not be comparable with similarly titled measures reported by other 
companies. They are not intended to be a substitute for, or superior to, 
IFRS measures. 
 
   Underlying performance measures (non-IFRS measures) 
 
   Underlying performance measures allow shareholders to better understand 
the underlying operational performance in the year, to facilitate 
comparison with prior years and to better assess trends in financial 
performance. They usually exclude the impact of one-off, non-recurring 
and exceptional items (exceptional items are disclosed in note 5). 
 
   Net revenue (non-IFRS measure) 
 
   Net revenue is revenue less commissions paid to retailer partners and 
the cost of mobile top-ups and SIM cards where PayPoint is principal. 
This reflects the benefit attributable to PayPoint's performance 
eliminating pass-through costs which creates comparability where 
PayPoint is agent or principal and is an important measure of the 
overall success of our strategy. 
 
   The reconciliation of revenue to net revenue is as follows: 
 
 
 
 
                                                    Restated(44) 
Year ended 31 March (GBP000)                2021        2020 
Continuing operations 
Service revenue                            123,886       141,280 
Sale of goods                                1,343         1,793 
Royalties                                    2,518         1,216 
Total revenue                              127,747       144,289 
less: 
Retailer partners' commissions            (30,272)      (37,243) 
Cost of mobile top-ups and SIM cards as 
 principal                                   (337)         (286) 
Net revenue from continuing operations      97,138       106,760 
----------------------------------------  --------  ------------ 
Discontinued operation 
Service revenue                             17,842        16,192 
Sale of goods                               49,900        53,519 
Total revenue                               67,742        69,711 
less: 
Retailer partners' commissions             (5,847)       (4,976) 
Cost of mobile top-ups and SIM cards as 
 principal                                (46,567)      (50,102) 
Net revenue from discontinued operation     15,328        14,633 
Total net revenue                          112,466       121,393 
----------------------------------------  --------  ------------ 
 
 
   (1) Comparative information has been restated for the discontinued 
operation (note 9). 
 
   Effective tax rate (non-IFRS measure) 
 
   Effective tax rate is the ongoing tax cost as a percentage of the net 
profit before tax. 
 
   Reported dividends (non-IFRS measure) 
 
   Reported dividends are based on a financial year's results from which 
the dividend is declared and consist of an interim and final dividend. 
This is different to statutory dividends where the final dividend on 
ordinary shares is recognised in the following year when they are 
approved by the Company's shareholders. 
 
   Cash generation (non-IFRS measure) 
 
   Cash generation reflects earnings before tax, depreciation, amortisation 
and exceptional items adjusted for working capital (excluding movement 
in clients' funds and retailers' deposits) as detailed in note 19. This 
measures the cash generated which can be used for tax payments, new 
investments and financing activities. 
 
   Total costs (non-IFRS measure) 
 
   Total costs comprise other costs of revenue (note 4), administrative 
expenses, finance income and finance costs. Total costs exclude 
exceptional costs. 
 
   Operating margin before exceptional items (non-IFRS measure) 
 
   Operating margin before exceptional items is calculated by dividing 
operating profit before exceptional items by net revenue. This measure 
reflects the efficiency of converting revenue into profits. 
 
   Net corporate debt (non-IFRS measure) 
 
   Net corporate debt represents cash and cash equivalents excluding cash 
recognised as clients' funds and retailers' deposits, less amounts 
borrowed under financing facilities (excluding IFRS 16 liabilities). 
 
   The reconciliation of cash and cash equivalents to net corporate debt is 
as follows: 
 
 
 
 
As at 31 March (GBP000)                         2021      2020 
Cash and cash equivalents from continuing 
 operations                                     38,940    69,446 
Cash and cash equivalents from discontinued 
 operation                                      25,866    24,328 
less: 
Clients' funds and retailers' deposits from 
 continuing operations                        (28,405)  (20,097) 
Clients' funds and retailers' deposits from 
 discontinued operation                       (18,052)  (15,642) 
Loans and borrowings                          (86,583)  (70,000) 
Net corporate debt                            (68,234)  (11,965) 
--------------------------------------------  --------  -------- 
 
 
   Revenue accounting policy 
 
   Revenue represents the value of services and goods delivered or sold to 
clients and SME and retailer partners which is measured using the fair 
value of the consideration received or receivable, net of value added 
tax. Performance obligations are identified at contract inception and 
the revenue is recognised once the performance obligations are 
satisfied. 
 
   Revenue from bill payments comprises fees from clients for providing 
over-the-counter payments, digital bill payments and CashOut services. 
Over-the-counter and digital payments services are products where 
customers of PayPoint's clients can pay their bills (due to the client) 
at any of PayPoint's retailer partners or online. PayPoint provides the 
technology for recording the payment of bills and transmission of that 
payment data to the client. PayPoint also collects bill payment funds 
from retailer partners and remits those funds to clients. Revenue is 
recognised as performance obligations are satisfied which is usually at 
the point in time each transaction is processed. Management fees, set-up 
fees or up-front lump sum payments are deferred and recognised on a 
straight-line basis over the contracted period with the client. 
 
   Top-ups and eMoney revenue comprises revenue from top-ups for mobile 
phones, eVouchers, prepaid debit cards and lottery tickets. Revenue is 
recognised at the point in time each top-up is sold. Other than as 
described below, PayPoint is contracted as agent in the supply of 
top-ups and accordingly the commission earned from clients is recognised 
as revenue. In Romania, PayPoint contracts as principal for mobile 
top-ups and revenue is recognised at the gross sale price and cost of 
revenue includes the related cost. 
 
   Retail services revenue from SME and retailer partners comprises: 
 
 
   -- service fees from retailers that use our technology to facilitate card 
      payments, PayPoint One and legacy terminals and EPoS, all of which are 
      charged for on a weekly or monthly basis, and recognised on a 
      straight-line basis over the period of the contract. Retailers 
      simultaneously receive and consume the benefits related to the services 
      fee, therefore a straight-line approach appropriately depicts the 
      transfer of the service 
 
   -- commissions, rebates and fees from card payment, ATM transaction fees and 
      money transfer transactions are recognised when each transaction is 
      processed 
 
   -- lease income from card terminals is recognised over the lease term 
 
   -- fees earned for processing parcels are recognised when each parcel has 
      been delivered or returned through the PayPoint network 
 
   -- commissions from sale of SIM cards is primarily earned from the mobile 
      operators based on the value of top-ups after the initial activation. 
      This revenue is contingent on the customer actions and is recognised as 
      the consumer tops up the SIM card 
 
   -- fees for receipt advertising and failed direct debits which are 
      recognised at the time the transaction occurs 
 
   -- royalty income from the Collect+ brand which is recognised as the parcels 
      are processed 
 
 
   Exceptional items 
 
   Exceptional items (note 5) are typically non-recurring or intermittent, 
and because of their nature and expected infrequency of the events 
giving rise to them, do not reflect current operational performance. 
Examples of exceptional items include, but are not limited to: 
 
 
   -- Costs incurred as part of the acquisition and integration of acquired 
      businesses as these are non-operational, non-recurring and material 
      (mainly legal, due diligence, valuation and IT integration costs and 
      stamp duty). 
 
   -- Revaluation of the deferred, contingent consideration liability to fair 
      value, as this is not a reflection of underlying operational performance 
      and material. 
 
   -- Profit or loss items arising from changes to the Group's capital 
      structure, including significant refinancing, which are non-operational, 
      non-recurring and material (legal and advisory fees and write-off of 
      unamortised arrangement fees on the old facility). 
 
   -- Other one-off profit or loss items which are non-recurring, material and 
      do not reflect underlying operational performance. 
 
 
   Use of judgements and estimates 
 
   In the application of the Group's accounting policies, the Directors are 
required to make judgements, estimates and assumptions about the 
carrying amounts of assets and liabilities that are not readily apparent 
from other sources. The estimates and associated assumptions are based 
on historical experience and other factors that are considered to be 
relevant. Actual results may differ from these estimates. 
 
   Estimates and underlying assumptions are reviewed on an ongoing basis. 
Revisions to accounting estimates are recognised in the period in which 
the estimate is revised if the revision affects only that period, or in 
the period of the revision and future periods if the revision affects 
both current and future periods. 
 
   Critical judgement: recognition of cash and cash equivalents 
 
   The nature of bill payments services means that PayPoint collects and 
holds funds on behalf of clients as those funds pass through the 
settlement process and also retains retailer partners' deposits as 
security for those collections. 
 
   A critical judgement in this area is whether clients' funds and retailer 
partners' deposits are recognised in the statement of financial 
position. This includes evaluating: 
 
   (a) existence of a binding agreement clearly identifying the beneficiary 
of the funds 
 
   (b) the identification, ability to allocate and separability of funds 
 
   (c) identification of the holder of those funds at any point in time 
 
   (d) whether PayPoint bears the credit risk 
 
   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 is not included in the 
statement of financial position. In all other situations the cash and 
corresponding liability are recognised on the statement of financial 
position. 
 
   Critical judgement: agent vs principal 
 
   A critical judgement for revenue recognition is PayPoint's assessment of 
whether it is acting as a principal or agent. This includes evaluating: 
 
   (a) which party was responsible for fulfilling the promise to provide 
the service 
 
   (b) inventory risk before the service is transferred to a customer 
 
   (c) discretion in establishing the price for the service 
 
   In most cases it is clear that PayPoint acts in the capacity of an agent 
for clients, however in the case of mobile top-ups, due to the nature of 
the product, this becomes a key judgement area. Revenues are recognised 
on the principal basis considering the level of service responsibility, 
inventory risk and price discretion held by PayPoint. This is consistent 
with the judgement in prior years. 
 
   The cost of mobile top-ups and SIM cards as principal was GBP46.9 
million (2020: GBP50.3 million), refer to note 4. 
 
   Critical estimate: Business combinations: Initial recognition of 
goodwill and intangible assets 
 
   Accounting for a business combination 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. The fair value of acquired intangible assets in the year 
relating to Handepay and Merchant Rentals amounted to GBP20.1 million 
whilst GBP44.7 million was recognised as goodwill. Of the intangible 
assets recognised on the acquisition of Handepay and Merchant Rentals, 
the Handepay and Merchant Rentals customer relationship intangible 
assets are deemed to be critical estimates. 
 
   Acquired customer relationships attributed to Handepay and Merchant 
Rentals are valued using the multi-period excess earnings method ("MEEM 
approach") by estimating the total expected income streams from customer 
relationships and deducting portions of the cash flow that can be 
attributed to supporting, or contributory, assets (including workforce). 
The residual income streams are discounted. No tax amortisation benefit 
is applied. The key inputs to this method are the customer churn rate, 
revenue growth rate and discount rate applied to future forecasts of the 
businesses. A reasonably possible change to these assumptions in 
aggregation, or to customer churn rate in isolation, impacts on the 
financial statements as follows: 
 
 
 
 
 
     Handepay acquired      Merchant Rentals 
   customer relationships   acquired customer 
                              relationships 
 
 
 
 
 
 
Valuation per financial statements         GBP10.2m              GBP6.7m 
Discount rate applied                     13.8-15.8%           16.8-18.8% 
------------------------------------  -------------------  ------------------- 
Revenue growth rate applied                            2%                   2% 
------------------------------------  -------------------  ------------------- 
Customer churn rate applied                2.0-2.1%             1.0-3.0% 
------------------------------------  -------------------  ------------------- 
2% change in discount rate                  GBP0.5m              GBP0.3m 
------------------------------------  -------------------  ------------------- 
(5%) / 5% change in revenue growth    (GBP0.5m) / GBP0.5m  (GBP0.3m) / GBP0.3m 
 rate 
------------------------------------  -------------------  ------------------- 
(1%) / 1% change in customer churn    GBP3.8m / (GBP3.8m)  GBP1.4m / (GBP1.4m) 
 rate 
------------------------------------  -------------------  ------------------- 
 
   Critical estimate: Valuation of deferred, contingent consideration 
 
   Where a sale and purchase agreement provides for an adjustment to the 
consideration, contingent on future performance over a contractual 
earn-out period, the Group recognises the discounted fair value as a 
liability in the consolidated statement of financial position , based on 
the estimated additional consideration payable at the acquisition date. 
At each subsequent reporting date, the liability is measured against the 
contractually agreed performance targets with any fair value adjustments 
recognised in the consolidated statement of profit or loss. The 
estimation of the liability requires the Directors to make an estimate 
of future performance of the related business over the earnout period, 
based on Board-approved forecasts. For the revenue-linked contingent 
consideration recognised on PayPoint's consolidated statement of 
financial position, the range of reasonably possible outcomes for the 
fair value of the undiscounted earnout is GBP4.5 million to GBP6.0 
million by applying a reasonably possible 20% sensitivity to the 
board-approved revenue forecasts. 
 
   Prior year critical estimates 
 
   Capitalised development expenditure and useful economic lives of 
intangibles assets, which were critical estimates in the previous 
financial year, are no longer considered to be critical estimates. At 31 
March 2021 these estimates no longer have a significant risk of 
resulting in material adjustment to the carrying amounts of intangible 
assets within the next financial year. The useful economic lives of 
intangible assets including capitalised development expenditure are 
reviewed annually. Potential write-offs and revisions to the useful 
lives of intangible assets are not expected to materially impact the 
annual amortisation charge and the carrying amounts of intangible assets 
in the next financial year. 
 
   2.   Segment reporting 
 
   Segment information 
 
   The Group provides a number of different services and products, however 
these do not meet the definition of different segments under IFRS 8, as 
the chief operating decision maker, the Executive Board, does not review 
those separately for resource allocations purposes, therefore the Group 
has only one operating segment. A sector analysis has been provided in 
the Financial review on pages 19 to 21. 
 
   Geographical information 
 
   Revenue 
 
 
 
 
                                        Restated(45) 
Year ended 31 March (GBP000)    2021        2020 
Continuing operations 
UK                             127,747       144,290 
Discontinued operation 
Romania                         67,742        69,711 
Total                          195,489       214,001 
 
 
   Comparative information has been restated for the discontinued operation 
(note 9). 
 
   Non-current assets 
 
 
 
 
 
 As at 31 March (GBP000)    2021     2020 
Continuing operations 
UK                         121,139  40,493 
Discontinued operation 
Romania                          -  14,039 
Total                      121,139  54,532 
 
   3.   Revenue 
 
   Disaggregation of revenue 
 
 
 
 
                                        Restated(1) 
Year ended 31 March (GBP000)    2021       2020 
Continuing operations 
Bill payments                   45,938       65,004 
Top-ups and eMoney              24,150       24,203 
Retail services                 57,659       55,083 
                               127,747      144,290 
-----------------------------  -------  ----------- 
Discontinued operation 
Romania                         67,742       69,711 
Total                          195,489      214,001 
-----------------------------  -------  ----------- 
 
 
   (1) Comparative information has been restated for the discontinued 
operation (note 9). 
 
   Service fee revenue of GBP14.6m (2020: GBP13.1m) and management fees, 
set-up fees and up-front lump sum payments of GBP1.2m (2020: GBP1.5m) 
are recognised on a straight-line basis over the period of the contract. 
The remainder of revenue is recognised at the point in time when each 
transaction is processed. The normal timing of payment by customers is 
usually on fourteen day terms. 
 
   Seasonality of operations 
 
   PayPoint operates in many sectors each with their own form of 
seasonality. The energy bill payment and parcel sectors are the most 
seasonal sectors with the energy sector generating more transactions 
during the winter months and parcels generating higher volumes in the 
lead up to Christmas. As a result, higher revenue and operating profits 
are usually expected in the second half of the year rather than in the 
first six months. This does not constitute "highly seasonal" as 
considered by IAS 34 Interim Financial Reporting. 
 
   Contract balances 
 
 
 
 
As at 31 March (GBP000)                            2021     2020 
Trade receivables                                  10,772   12,346 
Net investment in finance lease 
 receivables                                       10,575        - 
Accrued income                                      3,320    2,518 
Contract assets - capitalisation of fulfilment 
 costs                                              1,889    2,862 
Contract liabilities - deferral 
 of setup and development fees                    (1,472)  (1,965) 
Deferred income                                     (565)    (328) 
Total                                              24,519   15,433 
------------------------------------------------  -------  ------- 
 
 
   The net investment in finance lease receivables balance of GBP10.6m 
(2020: GBPnil) increased in the current year due to the acquisition of 
Merchant Rentals in February 2021. 
 
   4.  Cost of revenue 
 
 
 
 
                                                   Restated(1) 
Year ended 31 March (GBP000)               2021       2020 
Continuing operations 
Retailers' commissions                     30,272       37,243 
Cost of mobile top-ups and SIM cards as 
 principal                                    337          286 
Total cost of revenue deducted for net 
 revenue                                   30,609       37,529 
----------------------------------------  -------  ----------- 
Depreciation and amortisation               9,655        8,295 
Other                                       7,016        7,318 
Total other costs of revenue               16,671       15,613 
Total cost of revenue from continuing 
 operations                                47,280       53,142 
----------------------------------------  -------  ----------- 
Discontinued operation 
Retailers' commissions                      5,847        4,976 
Cost of mobile top-ups and SIM cards as 
 principal                                 46,567       50,021 
Total cost of revenue deducted for net 
 revenue                                   52,414       54,997 
----------------------------------------  -------  ----------- 
Depreciation and amortisation                 381          798 
Other                                         331          683 
Total other costs of revenue                  712        1,481 
----------------------------------------  -------  ----------- 
Total cost of revenue from discontinued 
 operation                                 53,126       56,478 
Total cost of revenue                     100,406      109,621 
----------------------------------------  -------  ----------- 
 
 
   (1) Comparative information has been restated for the discontinued 
operation (note 9). 
 
   5.  Exceptional items 
 
 
 
 
                                                        Restated(1) 
Year ended 31 March (GBP000)                     2021      2020 
----------------------------------------------  ------  ----------- 
Acquisition costs expensed -- administrative 
 expenses                                        2,796            - 
----------------------------------------------  ------  ----------- 
Provision in relation to Ofgem Statement 
 of Objections -- administrative expenses       12,500            - 
----------------------------------------------  ------  ----------- 
Refinancing costs expensed -- administrative 
 expenses                                          304            - 
----------------------------------------------  ------  ----------- 
Total exceptional items included in operating 
 profit                                         15,600            - 
----------------------------------------------  ------  ----------- 
Refinancing costs expensed -- finance 
 costs                                             459            - 
Total exceptional items included in profit 
 or loss                                        16,059            - 
----------------------------------------------  ------  ----------- 
 
 
 
 
 
 
Reconciliation of profit before tax from continuing operations to underlying 
 profit before tax from continuing operations 
                                                                    Restated(1) 
Year ended 31 March (GBP000)                              2021          2020 
------------------------------------------------------  ---------  -------------- 
Profit before tax from continuing operations               19,443          49,983 
Current year exceptional items                             16,059               - 
Prior year variable pay benefit                                 -         (2,081) 
Prior year net revenue from British Gas 
 contract                                                       -         (3,848) 
Underlying profit before tax from continuing 
 operations                                                35,502          44,054 
------------------------------------------------------  ---------  -------------- 
 
 
   (1) Comparative information has been restated for the discontinued 
operation (note 9). Underlying performance measures allow shareholders 
to better understand the underlying operational performance in the year. 
Prior year underlying profit before tax has been restated to exclude the 
variable pay benefit, as last year it was disclosed as a one-off benefit, 
and exclude the profit from the British Gas contract ending, as it was 
the largest contract in the business and this impact makes it more 
difficult to assess trends in financial performance. 
 
   6.  Tax 
 
 
 
 
                                                          Restated(1) 
Year ended 31 March (GBP000)                       2021      2020 
-------------------------------------------------  -----  ----------- 
Continuing operations 
Current tax 
Charge for current year                            4,722        9,510 
                                                          ----------- 
Adjustment in respect of prior years               (146)          268 
-------------------------------------------------  -----  ----------- 
Current tax charge                                 4,576        9,778 
-------------------------------------------------  -----  ----------- 
 
Deferred tax 
-------------------------------------------------         ----------- 
(Credit)/charge for current year                   (444)          155 
-------------------------------------------------         ----------- 
Adjustment in respect of prior years                 203           28 
-------------------------------------------------  -----  ----------- 
Deferred tax (credit)/charge                       (241)          183 
-------------------------------------------------  -----  ----------- 
Total income tax charge on continuing operations   4,335        9,961 
-------------------------------------------------  -----  ----------- 
 
Discontinued operation 
Current tax 
Charge for current year                            1,107        1,162 
Adjustment in respect of prior years                   -            - 
-------------------------------------------------  -----  ----------- 
Current tax charge                                 1,107        1,162 
-------------------------------------------------  -----  ----------- 
 
Deferred tax 
Charge for current year                               21            8 
Adjustment in respect of prior years                   -            - 
-------------------------------------------------  -----  ----------- 
Deferred tax charge                                   21            8 
-------------------------------------------------  -----  ----------- 
Total income tax charge on discontinued 
 operation                                         1,128        1,170 
-------------------------------------------------  -----  ----------- 
Total income tax charge                            5,463       11,131 
-------------------------------------------------  -----  ----------- 
 
 
   (1) Comparative information has been restated for the discontinued 
operation (note 9). 
 
   The income tax charge is based primarily on the United Kingdom statutory 
rate of corporation tax for the year of 19% (2020: 19%). The tax charge 
on continuing operations for the year is reconciled to profit before tax 
from continuing operations, as set out in the consolidated statement of 
profit or loss, as follows: 
 
 
 
 
                                                       Restated(1) 
Year ended 31 March (GBP000)                    2021      2020 
Profit before tax from continuing operations   19,443       49,983 
Tax at the UK corporation tax rate of 19% 
 (2019: 19%)                                    3,694        9,497 
Tax effects of: 
Disallowable expenses and non-taxable income      509          158 
Adjustments in respect of prior years              57          296 
Tax impact of share-based payments                 75          130 
Revaluation of deferred tax asset                   -        (120) 
Actual amount of tax charge on continuing 
 operations                                     4,335        9,961 
---------------------------------------------  ------  ----------- 
 
 
   (1) Comparative information has been restated for the discontinued 
operation (note 9). 
 
   7.  Dividends on equity shares 
 
 
 
 
                                                    2021         2020 
                                                      pence per            pence 
Year ended 31 March                           GBP000    share    GBP000   per share 
Reported dividends on ordinary shares: 
Interim ordinary dividend                     10,708       15.6  16,133        23.6 
Proposed final ordinary dividend              11,397       16.6  10,667        15.6 
Total ordinary dividends                      22,105       32.2  26,800        39.2 
--------------------------------------------  ------  ---------  ------  ---------- 
Interim additional dividend                        -          -  12,577        18.4 
Proposed additional final dividend                 -          -       -           - 
Total additional dividend                          -          -  12,577        18.4 
Total reported dividends (Non-IFRS measure)   22,105       32.2  39,377        57.6 
--------------------------------------------  ------  ---------  ------  ---------- 
 
Dividends paid on ordinary shares: 
Final ordinary dividend for the prior year    10,676       15.6  16,133        23.6 
Interim dividend for the current year         10,709       15.6  16,133        23.6 
Total ordinary dividend paid                  21,385       31.2  32,266        47.2 
--------------------------------------------  ------  ---------  ------  ---------- 
Final additional dividend for the prior 
 year                                              -          -  12,576        18.4 
Additional interim dividend for the current 
 year                                              -          -  12,577        18.4 
Total additional dividend paid                     -          -  25,153        36.8 
Total dividends paid                          21,385       31.2  57,419        84.0 
--------------------------------------------  ------  ---------  ------  ---------- 
 
Number of shares in issue used for purposes 
 of dividends per share calculations             68,656,907          68,376,750 
 
 
   The proposed final ordinary dividend is subject to approval by 
shareholders at the annual general meeting and has not been included as 
a liability in these financial statements. 
 
   8.  Earnings per share 
 
   Basic and diluted earnings per share are calculated on the following 
profit and number of shares: 
 
 
 
 
Year ended 31 March (GBP000)                      2021    2020 
-----------------------------------------------  ------  ------ 
Total profit for basic and diluted earnings 
 per share is the net profit attributable 
 to equity holders of the parent                 21,531  45,668 
-----------------------------------------------  ------  ------ 
 
 Continuing operations 
-----------------------------------------------  ------  ------ 
Profit for basic and diluted earnings 
 per share is the net profit from continuing 
 operations attributable to equity holders 
 of the parent                                   15,108  40,022 
-----------------------------------------------  ------  ------ 
 
 Discontinued operation 
-----------------------------------------------  ------  ------ 
Profit for basic and diluted earnings 
 per share is the net profit from discontinued 
 operation attributable to equity holders 
 of the parent                                    6,423  40,022 
-----------------------------------------------  ------  ------ 
 
 
 
 
 
 
As at 31 March (Number of shares)               2021    2020 
---------------------------------------------  ------  ------ 
Weighted average number of ordinary shares 
 in issue (for basic earnings per share)       68,406  68,264 
---------------------------------------------          ------ 
Potential dilutive ordinary shares: 
---------------------------------------------          ------ 
Long-term incentive plan                          164     417 
---------------------------------------------          ------ 
Restricted share awards                           197      45 
---------------------------------------------          ------ 
Deferred annual bonus scheme                       62      73 
---------------------------------------------          ------ 
SIP and other                                      50      35 
---------------------------------------------  ------  ------ 
Weighted average number of ordinary shares 
 in issue (for diluted earnings per share)     68,879  68,834 
---------------------------------------------  ------  ------ 
 
Earnings per share (pence)                       2021    2020 
---------------------------------------------  ------  ------ 
Basic                                            31.5    66.9 
---------------------------------------------  ------  ------ 
Diluted                                          31.3    66.3 
---------------------------------------------  ------  ------ 
 
Earnings per share -- continuing operations 
 (pence)                                         2021    2020 
Basic                                            22.1    58.6 
---------------------------------------------  ------  ------ 
Diluted                                          21.9    58.1 
---------------------------------------------  ------  ------ 
 
Earnings per share -- discontinued operation 
 (pence)                                         2021    2020 
---------------------------------------------  ------  ------ 
Basic                                             9.4     8.3 
---------------------------------------------  ------  ------ 
Diluted                                           9.3     8.2 
---------------------------------------------  ------  ------ 
 
   9.   Discontinued operation 
 
   On 21 October 2020, PayPoint announced that it had signed an agreement 
to sell its Romanian business, PayPoint Services SRL, to Innova Capital 
(the sale included Payzone SA, which was legally merged with PayPoint 
Services SRL on 27 March 2021). The sale was consistent with PayPoint's 
focus on its key strategic priorities and the delivery of enhanced 
growth and value in its core UK markets. The sale was subject to 
regulatory and other customary approvals, as well as other conditions 
precedent, and completed on 8 April 2021, following the end of the 
financial year ended 31 March 2021 (note 20). Cash proceeds received 
were GBP48.3 million net of working capital adjustments. The Romanian 
business has been classified as a discontinued operation for the year 
ended 31 March 2021. 
 
   As the sale completed following the end of the financial year the major 
classes of assets and liabilities comprising the discontinued operation 
were classified as held for sale as at 31 March 2021 as follows: 
 
 
 
 
Year ended 31 March (GBP000)                   2021    2020 
Assets 
Goodwill                                      11,149  11,853 
Other intangible assets                          455     336 
Property, plant and equipment                  2,242   1,835 
Deferred tax asset                                 -      16 
Inventories                                      124     151 
Trade and other receivables                   17,517  20,368 
Corporate cash                                 7,814   8,686 
Clients' funds and retailer partners' 
 deposits                                     18,052  15,642 
Total assets of discontinued operation        57,353  58,887 
--------------------------------------------  ------  ------ 
Liabilities 
Trade and other payables                      39,954  40,307 
Lease liabilities                                707     912 
Current tax liability                            201     334 
Deferred tax liability                             4       - 
Total liabilities of discontinued operation   40,866  41,553 
--------------------------------------------  ------  ------ 
Net assets of discontinued operation          16,487  17,334 
--------------------------------------------  ------  ------ 
 
 
   The Romanian business was not previously classified as a discontinued 
operation. The comparative consolidated statement of profit or loss has 
been restated to show the discontinued operation separately from 
continuing operations. 
 
   UK revenue has been restated to include the GBP0.6 million (2020 GBP0.7 
million) intercompany revenue recharge for transactional services with 
the discontinued operation. Subsequent to the disposal, the Group will 
continue to recharge the discontinued operation for transactional 
services. Although intra-group transactions have been fully eliminated 
in the consolidated financial results, PayPoint has elected to attribute 
the elimination of transactions between the continuing and discontinued 
operation before the disposal in a way that best reflects the 
continuance of these transactions subsequent to the disposal. To achieve 
this presentation, the discontinued operation results include the 
intercompany cost for transactional services within the expenses line 
below. 
 
   The results of the discontinued operation, which have been included in 
the profit for the period, were as follows: 
 
 
 
 
Year ended 31 March (GBP000)                      2021      2020 
Revenue                                           67,742    69,711 
Cost of revenue                                 (53,126)  (56,478) 
Gross profit                                      14,616    13,233 
Expenses                                         (7,188)   (6,704) 
Operating profit                                   7,428     6,529 
Finance income                                       311       382 
Finance costs                                      (188)      (95) 
Profit before tax                                  7,551     6,816 
Tax                                              (1,128)   (1,170) 
Post-tax profit from discontinued operation 
 attributable to equity holders of the parent      6,423     5,646 
----------------------------------------------  --------  -------- 
 
 
   The results of the discontinued operation do not reflect GBP0.4m 
depreciation and amortisation relating to the period over which its 
assets were classified as held for sale, in accordance with IFRS 5. 
 
   Cash flows from discontinued operation 
 
 
 
 
Year ended 31 March (GBP000)                    2021     2020 
Net cash from operations                        11,018   6,942 
Net cash (used in)/from investing activities     (689)     678 
Net cash used in financing activities -- 
 dividends paid to parent company              (7,146)   (920) 
Net increase in cash and cash equivalents        3,183   6,700 
---------------------------------------------  -------  ------ 
Cash and cash equivalents at beginning 
 of year                                        24,328  17,263 
Effect of foreign exchange rate changes        (1,645)     365 
Net cash flow for the period                    25,866  24,328 
---------------------------------------------  -------  ------ 
 
   10.   Acquisitions 
 
   Collect+ Group 
 
   On 6 April 2020, PayPoint plc acquired the remaining 50% of the asset 
that Yodel owned, resulting in Collect+ becoming a fully owned brand 
within the PayPoint Group. From 6 April 2020, Collect+ Holdings Limited 
and Collect+ Brand Limited (Collect+ Group) were fully owned and 
controlled subsidiaries. 
 
   The agreement reaffirmed the long-term partnership with Yodel, 
committing to a multi-year contract to continue as a parcel carrier for 
Collect+. PayPoint also acquired the ownership of the Collect+ website 
domain which has been developed and a new Collect+ website has been 
launched. 
 
   Total consideration payable was GBP6.0 million cash paid on completion 
resulting in a net GBP5.1 million cash outflow on acquisition (net of 
cash acquired). An intangible brand asset of GBP6.0 million has been 
recognised initially at cost and will be amortised over a useful life of 
12 years. 
 
   In the period since acquisition, the Collect+ Group earned revenue of 
GBP2.5 million and profit before tax of GBP2.5 million. 
 
   i-movo 
 
   On 24 November 2020, PayPoint acquired 100% of i-movo Holdings Limited 
and its wholly owned subsidiary i-movo Limited for initial consideration 
of GBP1.7 million cash and GBP1.0 million shares, resulting in a net 
GBP1.4 million cash outflow on acquisition (net of cash acquired) and 
170,882 shares issued at a fair value of GBP5.9 per share. The increase 
in share capital and merger reserve in the current year resulted from 
the share consideration on acquisition of i-movo. The fair value of the 
ordinary shares issued was based on the average of the middle market 
listed share price for an ordinary share of the Company for each of the 
five business days immediately preceding the allotment and issue of the 
share consideration. 
 
   As the UK's leading secure digital vouchering system, i-movo will 
enhance our EPOS and terminal services proposition and create new 
opportunities with Newspaper, Government, FMCG, Utilities and banking 
clients. 
 
   There is also an element of contingent consideration over the 29-month 
earnout period linked to four monthly revenue growth targets on two 
potential key revenue streams, which is estimated to total GBP6.0 
million (on an undiscounted basis) at the acquisition date and at 31 
March 2021 based on Board-approved forecasts. The contingent 
consideration is capped at GBP6.0m (GBP4.0m cash and GBP2.0m shares). 
The Directors are required to make an estimate regarding the future 
results in order to determine the fair value of the discounted 
contingent consideration liability. Any subsequent revaluations to 
contingent consideration as a result of changes in such estimations are 
recognised in the consolidated statement of profit or loss. 
 
   An i-movo customer relationship asset of GBP1.5 million has been 
recognised and is being amortised over a useful life of 12 years. 
 
   In the period since acquisition, i-movo earned revenue of GBP0.4 million 
and reported profit before tax of GBPnil. Had the acquisition taken 
place on the first day of the financial year, revenue would be GBP0.9 
million and profit before tax would be GBPnil. Acquisition costs 
incurred in the year in relation to i-movo totalled GBP0.1 million, 
which are reported within exceptional items in profit or loss. 
 
   Handepay and Merchant Rentals 
 
   On 3 February 2021, PayPoint acquired 100% of Handepay Ltd for total 
cash consideration of GBP50.7 million and Merchant Rentals Ltd for total 
cash consideration of GBP15.5 million, resulting in a net GBP60.3 
million cash outflow on acquisition (net of cash acquired). 
 
   The acquisition of Handepay and Merchant Rentals significantly enhances 
PayPoint's existing cards business, creating access to new SME sectors 
including food services, garages and hospitality and the opportunity to 
accelerate the growth of the combined business in a growing cards market 
through clear operational initiatives, cross selling opportunities and 
synergies. 
 
   A Handepay intangible brand asset of GBP2.2 million has been recognised 
and is being amortised over a useful life of 15 years. A Merchant 
Rentals intangible brand asset of GBP0.7 million has been recognised and 
is being amortised over a useful life of 11 years. Handepay customer 
relationship assets of GBP10.2 million have been recognised and are 
being amortised over a useful life of 10 years. Merchant Rentals 
customer relationship assets of GBP6.7 million have been recognised and 
are being amortised over a useful life of 4 to 13 years. 
 
   In the period since acquisition, Handepay earned revenue of GBP1.8 
million and profit before tax of GBP0.7 million and Merchant Rentals 
earned revenue of GBP1.0 million and profit before tax of GBP0.5 million 
(on an unconsolidated basis). Had the acquisition taken place on the 
first day of the financial year, Handepay revenue would be GBP10.8 
million and profit before tax would be GBP5.2 million and Merchant 
Rentals revenue would be GBP5.3 million and profit before tax would be 
GBP1.2 million (on an unconsolidated basis). Acquisition costs incurred 
in the year in relation to Handepay and Merchant Rentals totalled GBP2.5 
million, which are reported within exceptional items in profit or loss. 
 
   The following table summarises the fair values of the identifiable 
assets purchased and liabilities assumed of the acquired companies as at 
the date of acquisition: 
 
 
 
 
                               Collect+                     Merchant 
GBP000                           Group   i-movo   Handepay  Rentals    Total 
Acquired brands                   5,975        -     2,229       680     8,884 
Acquired customer 
 relationships                        -    1,500    10,186     6,718    18,404 
Acquired developed technology         -        -       306         -       306 
Software intangible assets            -      626         -         -       626 
Property, plant and equipment         -        5        19       106       130 
Right of use assets                   -        -         -       298       298 
Deferred tax assets and 
 liabilities                          -    (285)   (2,543)     (923)   (3,751) 
Trade and other receivables           8      445     1,664       803     2,920 
Net investment in finance 
 leases                               -        -         -    11,167    11,167 
Inventories                           -        -         -       964       964 
Corporate cash                      923      136     4,957       921     6,937 
Client funds and retailer 
 deposits                             -      166         -         -       166 
Trade and other payables          (906)  (1,041)     (810)   (8,250)  (11,007) 
Lease liabilities                     -        -         -     (370)     (370) 
Current tax liabilities               -        -     (950)     (358)   (1,308) 
Loans and borrowings                  -     (50)         -   (5,274)   (5,324) 
Total identifiable net 
 assets acquired at fair 
 value                            6,000    1,502    15,058     6,482    29,042 
-----------------------------  --------  -------  --------  --------  -------- 
Initial cash consideration        6,000    1,679    50,690    15,534    73,903 
Initial share consideration           -    1,000         -         -     1,000 
Discounted contingent 
 consideration                        -    5,690         -         -     5,690 
Total consideration               6,000    8,369    50,690    15,534    80,593 
-----------------------------  --------  -------  --------  --------  -------- 
Goodwill recognised on 
 acquisition                          -    6,867    35,632     9,052    51,551 
Acquisitions of subsidiaries 
 net of cash acquired               923  (1,377)  (45,733)  (14,613)  (60,800) 
-----------------------------  --------  -------  --------  --------  -------- 
 
   The acquired identifiable assets and liabilities have been recognised at 
their fair values at acquisition date and in accordance with the Group's 
accounting policies (note 1): 
 
   -- Acquired brands have been valued using the relief-from-royalty method 
and acquired customer relationships have been valued using the 
multi-period excess earnings method. 
 
   -- Acquired software intangible assets and property, plant and equipment 
have been valued using the depreciated replacement cost method, 
considering factors including economic and technological obsolescence. 
 
   -- Inventories, trade receivables and trade payables have been assessed 
at fair value on the basis of the contractual terms and economic 
conditions existing at the acquisition date, reflecting the best 
estimate at the acquisition date of contractual cash flows not expected 
to be collected. 
 
   -- The net investment in finance lease is measured at its acquisition 
date fair value, determined based on the assumptions about discount 
rates and other factors that market participants would use. 
 
   The values presented above other than corporate cash, clients' funds and 
retailer deposits and loans and borrowings represent the best estimate 
based on information available at the acquisition date and are therefore 
subject to adjustment within the measurement period if new information 
about facts and circumstances that existed at the acquisition date is 
obtained and, if known, would have resulted in the recognition of those 
assets and liabilities at that date. 
 
   Of the GBP51.6 million (2020: GBPnil) of goodwill acquired during the 
period, no goodwill (2020: GBPnil) is expected to be deductible for tax 
purposes. The goodwill arising on acquisitions is attributable to 
workforce in place and know-how within the business, new customer 
relationships as well as the growth in new customers that is anticipated 
to arise post-acquisition and the fair value of the expected market 
participant synergies and other benefits arising from the acquisition. 
 
   11.   Trade and other receivables 
 
 
 
 
As at 31 March (GBP000)                           2021    2020 
Trade receivables                                10,772   12,346 
Items in the course of collection(1)             47,512   88,692 
Revenue allowance                                 (949)  (1,379) 
                                                 57,335   99,659 
-----------------------------------------------  ------  ------- 
Other receivables                                   152      594 
Net investment in finance lease receivables       4,064        - 
Contract assets - capitalisation of fulfilment 
 costs                                            1,889    2,862 
Accrued income                                    3,320    2,518 
Prepayments                                       2,816    2,735 
Total                                            69,576  108,368 
-----------------------------------------------  ------  ------- 
 
 
   (1) Items in the course of collection represent amounts collected for 
clients by retail partners. An equivalent balance is included within 
trade and other payables. 
 
   12.    Cash and cash equivalents 
 
   Included within continuing cash and cash equivalents of GBP38.9 million 
(2020: GBP69.4 million) are balances of GBP28.4 million (2020: GBP20.1 
million) relating to funds collected on behalf of clients where PayPoint 
has title to the funds (clients' funds) and where retailer partners have 
provided security deposits (retailer partners' deposits). An equivalent 
balance is included within trade payables (note 13). Clients' funds held 
in trust which are not included in cash and cash equivalents amounted to 
GBP50.3 million (2020: GBP41.9 million). 
 
   During the year the Group operated cash pooling amongst most of its bank 
accounts in the UK whereby individual accounts could be overdrawn 
without penalties being incurred so long as the overall position is in 
credit. 
 
   13.    Trade and other payables 
 
 
 
 
As at 31 March (GBP000)                      2021     2020 
Amounts owed in respect of clients' funds 
 and retailer partners' deposits(1)          28,405   35,739 
Settlement payables(2)                       47,512   88,692 
Client payables                              75,917  124,431 
Trade payables                                5,925    8,318 
Other taxes and social security               6,439    4,006 
Other payables                                  692    3,886 
Accruals                                     11,494    5,782 
Deferred income                                 565      328 
Contract liabilities - deferral of setup 
 and development fees                         1,472    1,965 
Total                                       102,504  148,716 
------------------------------------------  -------  ------- 
Disclosed as: 
Current                                           -  148,621 
Non-current                                       -       95 
                                                  -  148,716 
------------------------------------------  -------  ------- 
 
   (1) Relates to monies collected on behalf of clients where the Group has 
title to the funds (clients' funds and retailer partners' deposits). An 
equivalent balance is included within cash and cash equivalents. 
 
   (2) Payable in respect of amounts collected for clients by retailer 
partners. An equivalent balance is included within trade and other 
receivables. 
 
   14.   Provision 
 
 
 
 
As at 31 March (GBP000)                      2021   2020 
Provision recognised in relation to Ofgem 
 Statement of Objections (current)          12,500     - 
Total                                       12,500     - 
------------------------------------------  ------  ---- 
 
 
   Further to our announcement on 30 September 2020 we continue to engage 
with Ofgem with respect to the provisional views set out in their 
Statement of Objections. In accordance with IFRS the Board has made a 
provision of GBP12.5 million (2020: GBPnil) as a current best estimate 
for a resolution of this matter. 
 
   15.   Deferred, contingent consideration liability 
 
   The Group has a liability in respect of the deferred, contingent 
consideration under the i-movo acquisition contract (note 10). 
 
 
 
 
                                                               GBP000 
At 31 March 2020                                                 - 
Recognition of discounted deferred, contingent consideration 
 liability on acquisition                                       5,690 
Discount unwind on deferred, contingent consideration              57 
At 31 March 2021                                                5,747 
-------------------------------------------------------------  ------ 
 
 Disclosed as: 
Current                                                         1,462 
Non-current                                                     4,285 
Total                                                           5,747 
-------------------------------------------------------------  ------ 
 
 
   The total discounted deferred, contingent consideration liability of 
GBP5.7 million is categorised as Level 3 in the fair value hierarchy. 
The fair value of the expected earnout is updated at each reporting date, 
determined using a probability-weighted average best estimate of 
discrete scenarios, based on the latest revenue forecasts which were 
approved by the Board discounted to present value. There was no change 
in the valuation of the deferred, contingent consideration liability 
between acquisition and 31 March 2021. The significant unobservable 
inputs used in the fair value measurements are the discount rate and the 
forecast future revenue of the acquired business which is approved by 
the Board. The Directors consider that the carrying amount of the 
deferred, contingent consideration liability of GBP5.7 million 
approximates to its fair value. 
 
   16.   Share capital and merger reserve 
 
 
 
 
As at 31 March (GBP000)                    2021  2020 
Called up, allotted and fully paid share 
 capital 
68,656,907 (2020: 68,376,750) ordinary 
 shares of 1/3p each                        229   228 
 
 
   The increase in share capital by GBP1,000 and merger reserve by GBP0.9 
million in the current year resulted from the share consideration on 
acquisition of i-movo. 170,882 shares were issued at a fair value of 
GBP5.9 per share. The fair value of the ordinary shares issued was based 
on the average of the middle market listed share price for an ordinary 
share of the Company for each of the five business days immediately 
preceding the allotment and issue of the share consideration. 
 
   17.    Share based payments 
 
   The Group's share schemes are described in the Directors' Remuneration 
Report in the 2021 Annual Report and consist of the Long Term Incentive 
Plan (LTIP), Deferred Annual Bonus Scheme (DABS) and Restricted Share 
Awards (RSA) equity-settled share schemes. 
 
   No share awards were granted under the LTIP scheme in the year (2020: 
192,675). The LTIP scheme has been replaced with the RSA scheme in the 
current financial year. For LTIP share awards granted in previous years, 
50% of the vesting is based on Total Shareholder Return (TSR) and 50% on 
earnings per share (EPS) growth). The performance condition for the TSR 
element is the same as the vesting period. The performance period for 
the EPS element is for three financial years from the grant date. 
 
   200,013 share awards were granted under the RSA scheme in the year 
(2020: nil), vesting over two to five years, between 26 July 2022 and 26 
July 2025. The RSAs do not contain any IFRS 2 performance conditions. 
 
   2,532 share awards were granted under the DABS scheme in the year (2020: 
19,593), vesting over three years to 9 June 2023. The DABS do not 
contain any IFRS 2 performance conditions. 
 
   The amount charged to the statement of profit or loss in the year was 
GBP1.1 million (2020: GBP0.6 million). A total charge of GBP0.9 million 
(2020: GBP1.4 million) previously recognised directly to equity for 
schemes which have now lapsed or vested was transferred from the 
share-based payments reserve to retained earnings during the period. 
 
   18.   Loans and borrowings 
 
 
 
 
Year ended 31 March (GBP000)                   2021     2020 
-------------------------------------------  --------  ------ 
Changes from financing cash flows 
Balance at beginning of year                   70,000 
Repayment of old revolving credit facility   (70,000) 
Proceeds from new term loan and revolving 
 credit facility                               82,000  70,000 
Funding from block loans acquired               5,274 
Repayment of block loans                        (691) 
Balance at end of year                         86,583  70,000 
-------------------------------------------  --------  ------ 
Disclosed as: 
Current                                        63,627  70,000 
Non-current                                    22,956       - 
Other liability-related changes 
Interest paid                                 (1,540)   (720) 
 
   19.    Notes to the consolidated statement of cash flows 
 
 
 
 
Year ended 31 March (GBP000)                             2021      2020 
Profit before tax from continuing operations             19,443    49,983 
Profit before tax from discontinued operation             7,551     6,816 
Adjustments for: 
        Depreciation of property, plant and equipment     4,913     5,631 
        Amortisation of intangible assets                 5,980     3,886 
Discount unwind of deferred, contingent 
 consideration liability                                     57         - 
VAT credits                                                (54)         - 
Exceptional item -- non-cash provision                   12,500         - 
        Loss on disposal of fixed assets                     54       387 
        Net finance costs                                 1,208       189 
        Share-based payment charge                        1,066       631 
  Cash-settled share-based remuneration                   (151)   (1,028) 
Operating cash flows before movements 
 in corporate working capital                            52,567    66,495 
        Movement in inventories                            (11)      (89) 
        Movement in receivables                           1,292     1,172 
        Movement in contract assets                         972       775 
        Movement in contract liabilities                  (529)     (731) 
        Movement in payables                              (765)   (1,160) 
        Movement in lease liabilities                        22        96 
Cash generated by operations                             53,548    66,558 
        Corporation tax paid                            (8,422)  (15,770) 
        Finance charges paid                            (1,540)     (720) 
Net cash from operating activities (Corporate)           43,586    50,068 
        Movement in clients' funds and retailers' 
         deposits                                        11,852     1,413 
Net cash inflow from operating activities(46)            55,438    51,481 
 
 
   (1) Items in the course of collection and settlement payables are 
included in this reconciliation on a net basis through the client cash 
line. The Directors have included these items on a net basis to best 
reflect the operating cash flows of the business. 
 
   20.   Subsequent events 
 
   Disposal of Romanian business 
 
   The sale of the Romanian business, PayPoint Services SRL, to Innova 
Capital completed on 8 April 2021 following regulatory and other 
customary approvals. Cash proceeds of GBP48.3 million were received net 
of working capital adjustments. Since the sale completed after the end 
of the financial year, the assets and liabilities of the discontinued 
operation were classified as held for sale in the financial statements 
for the year ended 31 March 2021. The provisional gain on disposal is 
GBP29.6 million and will be presented in the financial statements for 
year ending 31 March 2022, as follows: 
 
 
 
 
                                                            GBP000 
Total disposal proceeds received                             48,274 
Costs of disposal                                           (1,011) 
Carrying amount of net assets sold                         (15,996) 
Gain on sale before income tax and reclassification of 
 foreign currency translation reserve                        31,267 
---------------------------------------------------------  -------- 
Reclassification of foreign currency translation reserve    (1,645) 
Tax charge on discontinued operation                              - 
Gain on disposal after tax                                   29,622 
---------------------------------------------------------  -------- 
 
 
   The gain on disposal of the discontinued operation is exempt from UK 
corporation tax under the substantial shareholding exemption. 
 
   Acquisition of RSM 2000 
 
   On 12 April 2021 PayPoint acquired 100% of the share capital of RSM 2000 
Limited for initial cash consideration of GBP5.9 million and deferred 
consideration of GBP1.0 million payable on the first anniversary of 
completion. The deferred consideration is not contingent on future 
performance. Beneficial ownership and control of RSM 2000 and 
consideration was transferred following regulatory approval. Acquisition 
costs incurred in the current financial year for RSM 2000 totalled 
GBP0.1 million, which are reported within exceptional items in profit or 
loss. The initial accounting of the business combination is yet to be 
finalised and therefore the allocation of the purchase price has not 
been disclosed. 
 
   (1) Comparative information has been restated for the discontinued 
operation. Refer to note 9. 
 
   (2) Net revenue is an alternative performance measure. Refer to note 1 
to the financial information for a reconciliation to revenue. 
 
   (3) Operating margin before exceptional items % is an alternative 
performance measure and is calculated by dividing operating profit 
before exceptional items by net revenue. 
 
   (4) Profit before tax from continuing operations includes GBP3.6 million 
of non-recurring costs associated with the acquisitions undertaken in 
the year and the GBP12.5 million provision made as a current best 
estimate for a resolution of Ofgem's Statement of Objections 
 
   (5) Underlying profit before tax is an alternative performance measure 
as explained in note 1 to the financial information, a reconciliation to 
profit before tax from continuing operations is included in the 
Financial review on page 18. 
 
   (6) Cash generation is an alternative performance measure. Refer to the 
Financial review -- cash flow and liquidity for a reconciliation from 
profit before tax. 
 
   (7) Net corporate (debt)/cash (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. 
 
   (8) Underlying total costs from continuing operations is an alternative 
performance measure as explained in note 1 to the financial statements, 
a reconciliation to costs is included in the Financial review on page 
22. 
 
   (9) Net corporate (debt)/cash (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. 
 
   (10) Excludes the impact of British Gas contract not being renewed. 
 
   (11) PayPoint card payment business only 
 
   (12) PayPoint Consumer Research March 2021, 2k respondents, UK consumers 
 
   (13) 
https://www.lumina-intelligence.com/blog/convenience/lockdown-boosts-the-uk-convenience-retail-market-by-3-8bn 
 
 
   (14) PayPoint One Basket Data -- Jan-Dec 2020 
 
   (15) ACS Local Shop Report 2020 
 
   (16) 
https://www.ukfinance.org.uk/system/files/Summary-UK-Payment-Markets-2018.pdf 
 
 
   (17) For the 12 months to June 2020. Analysis based on Cardnet UK 
Finance data for Miscellaneous Food stores, Off licences, Sweet Stores 
and Tobacconists, which form the majority of the Convenience store 
market. 
 
   (18) https://www.link.co.uk/media/1729/monthly-report-mar-21-final.pdf 
 
   (19) IMRG Valuing Home Delivery Review 2021 
 
   (20) Metapack E-Commerce Delivery Benchmark Report 2021 
 
   (21) 
https://www.imrg.org/uploads/media/default/0001/08/2477f50ad2fee946cdf5ed23ebb8df21f2489d09.pdf?st. 
 
 
   (22) OC&C analysis. 
 
   (23) 
https://www.ofgem.gov.uk/gas/retail-market/market-review-and-reform/implementation-cma-remedies/prepayment-meter-cap-level#::text=The%20Prepayment%20Meter%20Price%20Cap%20came%20into%20force, 
Price%20Cap%20expires%20at%20the%20end%20of%202020. 
 
   (24) https://www.ofgem.gov.uk/data-portal/retail-market-indicators 
 
   (25) 
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/968356/Q4_2020_Smart_Meters_Statistics_Reportv2.pdf 
 
 
   (26) 
https://www.statista.com/statistics/273608/number-of-prepaid-mobile-subscriber-in-the-united-kingdom-uk/ 
 
 
   (27) 
https://www.accesstocash.org.uk/media/1087/final-report-final-web.pdf 
 
   (28) Comparative KPIs have been restated for the discontinued operation. 
Refer to note 9. 
 
   (29) Comparative information has been restated for the discontinued 
operation. Refer to note 9. 
 
   (30) Net revenue is an alternative performance measure. Refer to note 1 
to the financial information for a reconciliation to revenue. 
 
   (31) Total costs is an alternative performance measure as explained in 
note 1 to the financial information, a reconciliation to costs is 
included in the Financial review on page 22. 
 
   (32) Underlying profit before tax from continuing operations is an 
alternative performance measure as explained in note 1 to the financial 
information. Refer to note 5 to the financial information for a 
reconciliation to profit before tax from continuing operations. 
 
   (33) Cash generation is an alternative performance measure. Refer to the 
Financial review -- cash flow and liquidity on page 22 for a 
reconciliation from profit before tax. 
 
   (34) 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. 
 
   (35) PayPoint One has replaced the legacy terminal in independent 
retailer partners. 
 
   (36) PPoS is a plug-in device and a virtual PayPoint terminal used on 
larger retailer partners' own EPoS systems who wish to use PayPoint 
services. 
 
   (37) PayPoint card payments business only 
 
   (38) Comparative information has been restated for the discontinued 
operation. Refer to note 9. 
 
   (39) Comparative information has been restated for the discontinued 
operation. Refer to note 9. 
 
   (40) Operating margin before exceptional items % is an alternative 
performance measure and is calculated by dividing operating profit 
before exceptional items by net revenue. 
 
   (41) Effective tax rate is the tax cost as a percentage of profit before 
tax. 
 
   (42) Dividend cover represents profit after tax divided by reported 
dividends. 
 
   (43) Comparative information has been restated for the discontinued 
operation (note 9). 
 
   Attachment 
 
 
   -- FY 2021 RNS Final 
      https://ml-eu.globenewswire.com/Resource/Download/aea3bcc0-652a-4e2d-967b-7ad2fa0504ba 
 
 
 
 
 
 
 

(END) Dow Jones Newswires

May 27, 2021 02:00 ET (06:00 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.

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