Interim Management Statement

PayPoint plc
Interim Management Statement

The board reports on events, transactions and trading since the  last
year end. For the period to 26 July, trading has been satisfactory.

During the period, contracts with  clients and retailers were  signed
or renewed  including a  new  long term  contract with  British  Gas.
Commencing later this year,  all new gas  cards and electricity  keys
issued by British  Gas will  only operate  on the  PayPoint and  Post
Office networks, and from 2011 this  will be extended to all  British
Gas over  the  counter payments  for  cards, keys  and  regular  bill
payments.

Bill and general payment transactions in the UK are in line with  our
expectations. As  anticipated,  mobile  top-up  volumes  in  the  UK,
Romania and  Ireland  continue to  be  lower  than last  year,  as  a
consequence of  mobile  operators  offering more  airtime  for  lower
prices. The decrease in  mobile top-ups in the  UK will be  partially
mitigated by the winning of a contract in July with McColls which has
1,300 retail outlets. In  Romania, we have added  eight new bill  pay
clients since year end.

PayCash has helped PayPoint.net win new merchant contracts and we are
restructuring selectively  our merchant  acquiring base  to make  our
credit card offering to our merchants more competitive. However,  the
impact of these changes has been overshadowed by the predicted impact
of the migration of  large gaming merchants  from the Bureau  service
(where we process the transaction, arrange settlement and take credit
risk) to  our lower  margin  Gateway service  (where we  process  the
transaction only). This migration will complete in the second half of
the year.

Collect+ has had a promising  start, and has processed 60,000  parcel
returns. We intend to extend our  Collect+ network to at least  4,000
sites in support  of a service  that allows customers  to choose  our
stores as a delivery location. This will launch this autumn.

Performance(1) for the period from 30  March 2009 to 26 July  2009(2)
and financial position(1) as at 26 July 2009

Terminal sites in the UK and Ireland have increased by 488 since  the
year end  to 22,478  in  line with  expectations. Terminal  sites  in
Romania have reduced by  135 to 5,567 since  the year end  reflecting
the removal  of  low  volume,  mobile only  sites,  mitigated  by  an
increase in bill payment sites.

Transactions processed  for  the  period  were  167  million,  up  2%
compared to 163 million for the  same period last year.  Revenues  of
£64m are down  11% on the  same period as  last year as  a result  of
fewer mobile  top-ups but  other transaction  growth has  lifted  net
revenues(3) for the period to £24m, up 3%.

Earnings before tax  and interest for  the period to  26 July are  in
line  with  pro-rated  market  expectations,  taking  seasonality  of
trading into account(4).

The group has maintained a strong balance sheet with no debt and  net
cash. After the payment  of the final dividend  of £8 million and  £6
million for corporation  tax, net  cash at  26 July  was £27  million
(including client  cash  of  £7  million)  compared  to  £36  million
(including client cash of £8 million) at 30 March 2009.

(1) PayPoint's auditors have not been requested to review the
performance or financial position
(2 )Comparative data is given for the similar 17 week period last
year (i.e. 31 March to 27 July 2008)
(3 )Net revenue is revenue less commissions paid to retail agents,
the cost of mobile top-ups where PayPoint is the principal and
acquiring bank charges
(4) Last year, PayPoint reported second half earnings before interest
and taxes of nearly 60% of the full year as a result of the higher
volume of energy usage in the winter months

Enquiries
Finsbury                                    [phone]
Rollo Head/Don Hunter

Notes to Editors
PayPoint is the leading cash and internet payments company in the UK,
with operations also in Ireland and Romania. We handle nearly £9
billion from over 540 million transactions annually for more than
6,000 clients and merchants. The company operates several businesses:

* The PayPoint branded retail network numbers over 22,000 terminals
  located in local shops (including Co-op, Spar, McColls, Costcutter,
  Sainsburys Local, One Stop, Londis and thousands of independents)
  in all parts of the UK and Ireland. Our terminals process gas and
  electricity meter prepayments, cash bill payments, mobile phone
  top-ups, transport tickets, BBC TV licences and a wide variety of
  other payment types for most leading utilities, telecommunications
  suppliers and many consumer service companies;

* An ATM network which has over 2,300 'LINK' branded machines across
  the UK, typically in convenience stores;

* PayPoint.net, an internet payment service provider, delivers secure
  online credit and debit card payments for over 5,000 web merchants,
  linking into all major UK acquiring banks;

* Pay Store SRL, trading as PayPoint Romania, a mobile top-up
  operator with over 5,700 outlets equipped with electronic
  terminals. A bill payment service has been added to increase the
  breadth of PayPoint's offering in Romania, emulating the UK branded
  retail network; and

* Collect+, a joint venture with Home Delivery Network Limited,
  provides a parcel collection and drop off service at our retailers.

PayPoint floated on the London Stock Exchange in September 2004 and
the company's market capitalisation at 13 August 2009 was £362
million.

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