PayPoint (LSE:PAY) said trading in the three months to 30 June was consistent with its expectations, keeping the payments and services group on track to meet market forecasts for the 2027 financial year.
The UK-listed technology and payments operator, which runs a national retail network of more than 30,000 convenience stores, reported divisional net revenue declines in Network Services, to £7.7 million from £8.2 million, and Love2shop, to £7.0 million from £7.8 million, alongside growth in Digital Payments & Open Banking, up to £3.2 million from £3.1 million.
Network Services net revenue fell to £21.6 million from £23.1 million a year earlier, as the parcels business continued to rebase, with growing Royal Mail and other carrier volumes not yet offsetting the impact of a new commercial agreement with InPost and lower store-to-store volumes.
Love2shop billings rose strongly to £44.9 million from £38.4 million, with in-store billings up 108% year on year and July's "Thank You Teacher" campaign delivering card sales up 103%.
"Our underlying business performance for the quarter was consistent with our expectations and, against a strong prior year comparator, has established a solid platform for the year ahead," said chief executive Nick Wiles, adding that the group expects a greater weighting of performance towards the second half.
The group returned £5 million to shareholders in the quarter through its buyback programme, bringing total returns since the programme began to £50 million, and expects total FY27 buybacks to reach £30 million.
PayPoint will hold a Capital Markets Day on 29 September to set out its investment case and three-year growth targets.
News Intelligence what this means for the company
PayPoint's Q1 FY27 trading came in line with guidance, keeping the company on track for full-year market expectations. Network Services revenue fell 6.5% year-on-year to £21.6m as a new InPost commercial agreement and lower store-to-store volumes offset growth in Royal Mail and other carrier volumes; Love2shop billings surged 17% to £44.9m despite divisional net revenue declining, while Digital Payments & Open Banking grew modestly. The company is returning capital via buybacks (£5m in the quarter, £30m expected for FY27) and will outline three-year growth targets at a Capital Markets Day on 29 September.
The quarter confirms PayPoint is executing to plan, but the divergence between Love2shop's strong billings growth and falling divisional net revenue, combined with ongoing Network Services headwinds from the InPost deal, suggests margin pressure persists. The September Capital Markets Day will be critical to clarify whether management can reignite divisional revenue growth or if the current trajectory represents a structural reset.
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