Interim Results

21 November 2007
PayPoint plc
Interim results
For the 27 weeks ended 30 September 2007


HIGHLIGHTS

                             27 weeks     26 weeks
                                ended        ended
                         30 September 24 September
                                 2007         2006
                             £million     £million Increase
Revenue                         103.9         71.0      46%
Net revenue[1],[3]               34.2         25.8      32%
Operating profit                 13.9         10.4      35%
Profit before tax                14.5         11.0      32%

Basic earnings per share        15.0p        11.3p      33%
Interim dividend                 5.3p         4.6p      15%



  * Transactions were up 33% at 236 million with strong growth in all
    sectors.
  * Operating margin[2],[3] increased to 41% from 40%.
  * PayPoint UK and Irish terminal outlets have increased to over
    19,000, up 16% on September 2006 and up 8% on March 2007.
  * Acquired Pay Store SRL, a mobile top-up provider in Romania.
  * Completion of the integration of Metacharge and SECPay is on
    track for financial year end.


David Newlands, Chairman of PayPoint, said "Good growth in the first
half has been complemented by the BBC TV Licence contract, which
became exclusive from 1 August 2006, and an extra week of trading.
Our UK terminal estate has expanded ahead of plan and we have
strengthened our contractual relationships with multiple retailers.
Product innovation and implementation, improved terms from credit and
debit acquirers and winning back a major reseller for housing and
local authority clients have laid the foundations for continuing
growth. We have made good progress in driving the major change
programmes in our newly acquired internet and Romanian businesses,
which will set them on the path to growth next year. We are confident
in the group's continuing progress."

The financial statements cover the 27 week period from the 26 March
2007 to 30 September 2007, the last Sunday in the month (2006: 26
weeks).

A presentation for analysts will be held at 11.30am today at
Finsbury, Tenter House, 45 Moorfields, London EC2Y 9AE.

1    Net revenue is revenue less commissions paid to retail agents,
acquiring bank charges and the cost of mobile top-
ups where PayPoint is the principal.
2    Operating margin is operating profit as a percentage of net
revenue.
3    Net revenue and operating margin are measures which the
directors believe assist with a better understanding of
 the underlying performance of the group. The reconciliation of net
revenue to statutory amounts can be
 found in note 2

ABOUT PAYPOINT

PayPoint is the leading cash and internet payments company in the UK
and Ireland, handling in excess of
£6 billion in over 470 million transactions annually for more than
5,000 clients and merchants. The company operates with several
payment networks:


  * The PayPoint branded retail network numbers over 19,000 terminal
    outlets located in local shops (including Co-op, Spar,
    Costcutter, Sainsburys Local, One Stop, Londis and thousands of
    independents) in all parts of the UK and Ireland. Terminals
    handle gas and electricity meter prepayments, cash bill payments,
    mobile phone top-ups, transport tickets, London Congestion
    charges, BBC TV licences and a wide variety of other payment
    types for all of the leading utilities, telecommunications
    suppliers and many consumer service companies. This network is
    used by consumers, free of charge, 8 million times a week. The
    network has 97.3% population cover on a 1 mile urban or 5 miles
    rural measure;
  * Additional multiple retailer connections into the electronic till
    systems of nearly 4,000 outlets in the UK including BP,
    Somerfield and Superdrug for mobile top-ups and selected payments
    from the PayPoint range;
  * The PayPoint ATM network has over 1,950 'LINK' branded machines
    across the UK, also typically in convenience stores;
  * PayPoint Internet Payment Services (PPIPS), trading as Metacharge
    and SECPay, provides secure credit and debit card payments for
    over 4,500 web merchants linking into all the major UK acquiring
    banks; and
  * PayPoint International has recently acquired a Romanian mobile
    top-up operator to which a bill payment service will be added,
    emulating the UK branded retail network. PayPoint International
    also operates Irish bill payment and top-up services.


PayPoint floated on the London Stock Exchange in September 2004 and
the company's market capitalisation at 30 September 2007 was £406
million. PayPoint current holds a Queen's Award for Enterprise and is
widely recognised for its leadership in prepayment systems, smart
technology and consumer service.

21 November 2007


Enquiries:

PayPoint plc       01707 600 300
Dominic Taylor, Chief Executive
George Earle, Finance Director


Finsbury       020 7251 3801
Rollo Head
Don Hunter

This announcement is available on the PayPoint plc website:
www.paypoint.co.uk.

BUSINESS REVIEW

The business review has been prepared solely to provide additional
information to shareholders as a body to assess PayPoint's strategies
and their potential to succeed, and it should not be relied upon for
any other purpose. It contains forward looking statements that have
been made by the directors in good faith based on the information
available at the time of approval of the interim results and such
statements should be treated with caution due to the inherent
uncertainties, including both economic and business risk factors,
underlying any such forward looking information.

Bill and general payments have grown strongly across the board,
including the benefit of the BBC TV licensing contract, which reached
its first anniversary in August and an extra week of trading compared
to the first half of last year. Mobile volumes have grown as a result
of the enlarged terminal estate, the addition of Somerfield to our
EPoS based retailers and the acquisition of Pay Store. PayPoint is
the market leader in UK over-the-counter cash payments and is widely
recognised for service excellence. Pay Store will introduce
bill payments next year.

We aim to create increasing economic value for shareholders by
expanding:

  * UK cash payments for bills, general payments, mobile top-ups,
    ticketing, money transfer and ATM cash withdrawals building on
    the strength of our brand;
  * electronic and mobile - commerce payments and services building
    on our internet payments subsidiaries, Metacharge and SECPay and
    PayPoint service innovations; and
  * international growth for cash payment networks and as an
    e-commerce payment service provider.


Operational overview

In the first 27 weeks of the financial year, PayPoint processed 236
million transactions, with a value of
£3.5 billion (2006: 178 million transactions with a value of £2.3
billion), an increase of 33% in transactions and 51% in value. TV
licence payments and the additional week's trading have contributed
to the growth.  Commissions paid to retail agents were £41.5 million,
up 16%.   There has been strong growth in transaction volumes across
all sectors:

                              27 weeks     26 weeks              Year
                                 ended        ended             Ended
                          30 September 24 September          25 March
                                  2007         2006 Increase     2007
                              millions     millions        % millions
Bill and general                   141          109       29      267
payments(1)

Mobile top-ups                      77           63       22      130

ATMs                                 7            6       23       13

Internet payments                   11            -        -        4

Total(2)                           236          178       33      414



(1)  Includes debit/credit transactions
(2)  Included within the total is 9 million of international bill and
general payments and mobile top-ups.

Bill and general payments

PayPoint has performed well in this sector with growth stimulated by
increased agent numbers, client payment options and brand awareness.
Migration of market share away from the Post Office, as a result of
its branch closure programme, the launch of the BBC TV licence
contract which became exclusive to PayPoint from 1 August 2006 and
the additional week of trading, have contributed to growth in
transactions.

In prepaid energy, volumes have increased over the prior period
despite recent reductions in domestic prices. The increase is as a
result of our network growth and increasing our market share,
particularly in the Midlands, where a competitor lost exclusivity.

In transport, we have extended our geographical coverage by signing
new contracts with transport authorities, in addition to our existing
contracts with Arriva, National Express, Lothian, First and Greater
Manchester Travelcards. Whilst current volumes in transport ticketing
are relatively modest, there is potential for long-term growth if
transport authorities take steps to move ticket purchasing off buses.
We are also
discussing contracts with other operators and transport executives.

PayPoint has also achieved strong growth in the rest of the sector
(energy bill payments, communications, water, local authorities, and
others) in particular from the growth in BBC TV Licensing.


Mobile top-ups

Mobile top-up volumes have increased by 22% over the same period last
year (15% excluding Pay Store, which was acquired on 15 May 2007). In
the UK our overall market share of cash mobile top-ups is still
currently c.30% (March 2007: c.30%). The two most popular methods for
topping up are e-voucher and electronic top-up which account for
c.75% of all top-ups in the UK. The increase in other payment methods
which include ATMs, debit and credit cards and SMS has adversely
affected the growth through our channels.

Network growth

Terminal sites have increased to 22,624 (25 March 2007: 17,537).  The
retail network in the UK and Ireland has grown to 19,017 terminal
sites against our target of 19,500 by the end of the year on the
strong continuing demand from retailers for the PayPoint terminal.
The acquisition of Pay Store brings a further 3,607 terminal sites.

2,525 sites (2006: 2,461) with our terminals also have EPoS
connections to allow mobile top-up transactions over the retailers'
own till systems. There are a further 3,672 EPoS only sites (2006:
3,740).

Analysis of sites                  At           At                At
                         30 September 24 September Increase 25 March
                                 2007         2006        %     2007
PP terminal only               16,492       13,864       19   15,049

PP terminal and EPoS            2,525        2,461        3    2,488

PP terminal sites              19,017       16,325       16   17,537

Pay Store terminal sites        3,607            -        -        -
Total terminal sites           22,624       16,325       39   17,537

ATM sites                       1,957        1,655       18    1,860

Internet merchants              4,545            -        -    4,249


These figures exclude EPoS only sites in the UK and sites in Romania
that sell only scratch cards.

ATMs
New machines continued to be rolled out at an average of over 40 per
month. The removal for redeployment of ATMs from poorly performing
sites, including 40 non-transactors in September, reduced this to a
net increase of 17 per month. Average transactions at 600 per month
were affected by the higher level of non-transactors.

PayPoint Internet Payment Services
Metacharge and SECPay, which were acquired in the last financial year
and form PayPoint Internet Payment Services (PPIPs), are trading
profitably. The first phase of the integration of these two
businesses, which is nearing completion, is the co-location of their
hardware platforms at a hosted data centre, the provision of full
disaster recovery and a single billing platform. The second phase
which will allow each brand's products to be delivered by the other
will be completed early in the new financial year.

PayPoint in Romania
Pay Store SRL was acquired on 15 May 2007 for ¤16 million (£10.9
million) from the RTC group with potential for a further ¤1 million
payable or recoverable, on the performance of the business in the
first year after acquisition. The company is trading at a small loss,
as expected. Pay Store is one of the largest independent mobile
top-up providers in Romania, selling both electronic top-ups and
paper scratch cards.  Nearly all Romanians pay bills in cash and are
poorly served by existing payment channels. Since acquisition, we now
have the ability to process mobile top-ups at our transaction
processing centre in Welwyn Garden City. We plan to launch a PayPoint
branded bill payment service next year.

Pay Store is well placed to benefit from the migration from scratch
cards to electronic top-ups, and following the introduction of bill
payments in the New Year, to capture a significant share of the bill
payment market as privatised utilities look to rationalise current
inefficient and costly cash collection channels.

New services
PayPoint continues to introduce a wide range of new services to
stimulate further transaction growth in both cash and new economy
payments. For example, we are well-placed to benefit from the
expected increases in transaction volumes in the electronic money
sector from services such as gift cards, prepay debit cards, saving
schemes, internet currencies, stored value cards and money transfers.
We have continued to attract through our clients the following
brands, The Sun, Daily Mirror, Virgin Money and Argos. We are
established as the premier convenience loading channel for cash on to
both prepay and stored value cards, which have developed into strong
sectors in the USA and are now being marketed with increasing success
in the UK.

Financial overview
Revenue for the first 27 weeks was £103.9 million (2006: £71.0
million), up 46% driven by a 33% increase in transaction volumes and
further growth in mobile volumes[1] where PayPoint acts as principal.
Cost of sales was £76.6 million (2006: £50.7 million), an increase of
51%, which is greater than the rate of increase in revenue because of
the increase in mobile top-ups where PayPoint is principal. Agents'
commission increased by 16% to £41.5 million (2006: £35.9 million),
which is at a lower rate than the increase in revenue mainly because
the growth in mobile was lower than the growth in other areas.
Depreciation and amortisation have increased to £2.6 million (2006:
£1.7 million) up 56% as a result of the terminal roll out,
refurbishment of our operations base in Welwyn Garden City and our
acquisitions.

Net revenue[2] of £34.2 million (2006: £25.8 million) was up 32%,
driven primarily by volume growth.

Gross profit improved to £27.3 million (2006: £20.3 million), 34%
ahead of the same period last year, with a gross margin of 26% (2006:
29%). The rate of increase in mobile top-ups in Ireland and
Romania[1] is greater than the rate of increase from other sources,
which depressed gross margin, mitigated by lower rates of increase in
other costs. Gross margin, excluding the cost of Irish and Romanian
mobile-top-ups[1] improved to 35% (2006: 33%).


[1]   In Ireland and Romania, PayPoint is principal in the sale of
mobile top-ups and accordingly the face value of the top-up is
included in sales and the corresponding cost in cost of sales
[2]   Net revenue is revenue less commissions paid to retail agents
and the cost of mobile top-ups where PayPoint is the principal


Operating costs (administrative expenses) have risen to £13.4 million
(2006: £10.0 million), an increase of 34%, the inclusion of
Metacharge, SECPay and Pay Store have accounted for 28% of the 34%
increase.

Operating profit was £13.9 million (2006: £10.4 million), up 35% with
an associated increase in operating margin[1] to 41% (2006: 40%).

Profit before tax was £14.5 million (2006: £11.0 million), up 32%.
The tax charge was £4.4 million (2006: £3.3 million) and the
effective tax rate was 30%.

Operating cash flow was £10.9 million including an inflow of £0.5
million of client cash[2] (2006: £12.1 million after an inflow of
£0.8 million in respect of client cash), reflecting strong conversion
of profit to cash. Capital expenditure of £1.9 million (2006: £5.6
million including the £3.4 million refurbishment of our operations
base
£3.4 million) reflected spend on new terminals, ATMs, and the
international processing platform.
Net interest received was £0.6 million (2006: £0.7 million) and
equity dividends paid were £6.2 million
(2006: £5.1 million).

Related party transactions
Related party transactions are disclosed in note 6.

Risks
Risks to PayPoint's business, financial condition or operations are
disclosed on page 17.

Dividend
The board have declared an interim dividend payable on 21 December of
5.3p per share (2006: 4.6p) to shareholders on the register at 30
November 2007.

Outlook
There is opportunity to grow revenue in the UK by increasing market
share in bill and general payments, mobile top-ups and ATMs and from
Post Office closures within the next year. We will continue to roll
out terminals in the UK next year.  PayPoint will also continue its
focus in developing new markets including transport to drive
transaction volumes in the longer term as well as launching bill
payments in Romania and offering PPIPs to existing PayPoint clients.
Trading in the second half of the current year has started well with
October's results in line with management's expectations.

The directors are confident of continuing growth although the benefit
of the exclusivity of the TV licence contract from 1 August 2006 and
the extra week of trading will not be repeated in the second half and
the impact of the reductions, in the latter half of last year, in
domestic gas prices on prepay transaction volumes will be greater
than in the first half.

David Newlands             Dominic Taylor
Chairman                   Chief Executive

21 November 2007



[1]    Operating margin is operating profit as a percentage of net
revenue
[2]    Client cash is held on behalf of clients where PayPoint has
title to the funds. An equivalent balance is included within trade
payables.


CONDENSED CONSOLIDATED INCOME STATEMENT

                             Unaudited    Unaudited    Audited
                             27 weeks     26 weeks     year
                             ended        ended        ended
                             30 September 24 September 25 March
                             2007         2006         2007
Continuing operations   Note £000         £000         £000
Revenue                 2    103,950      70,974       157,068
Cost of sales           2    (76,645)     (50,661)     (111,068)

Gross profit            2    27,305       20,313       46,000
Administrative expenses      (13,359)     (9,950)      (20,798)

Operating profit             13,946       10,363       25,202
Investment income            586          691          1,470
Finance costs                (43)         (38)         (75)

Profit before tax            14,489       11,016       26,597
Tax                     3    (4,353)      (3,341)      (7,859)

Profit for the period        10,136       7,675        18,738
Earnings per share
Basic                   5    15.0p        11.3p        27.7p
Diluted                 5    14.7p        11.2p        27.3p



CONDENSED CONSOLIDATED STATEMENT OF RECOGNISED INCOME & EXPENSE

                                   Unaudited    Unaudited    Audited
                                   27 weeks     26 weeks     year
                                   ended        ended        ended
                                   30 September 24 September 25 March
                                   2007         2006         2007
                              Note £000         £000         £000
Exchange differences on       9    34           -            -
translation of foreign
operations
Net income recognised              34           -            -
directly in
equity
Profit for the period              10,136       7,675        18,738

Total recognised income and        10,170       7,675        18,738
expenses for the period



CONDENSED CONSOLIDATED BALANCE SHEET

                                   Unaudited    Unaudited    Audited
                                   30 September 24 September 25 March
                                   2007         2006         2007
                              Note £000         £000         £000
Non-current assets
Goodwill                           26,256       -            18,207
Other intangible assets            3,222        -            2,839
Property, plant and equipment      13,428       13,383       11,844
Deferred tax asset                 1,552        1,174        1,572
                                   44,458       14,557       34,462
Current assets
Inventories                        1,088        908          1,651
Trade and other receivables        25,431       12,238       20,671
Cash and cash equivalents     7    15,981       31,456       24,324
                                   42,500       44,602       46,646
Total assets                       86,958       59,159       81,108
Current liabilities
Trade and other payables           40,125       23,581       36,228
Current tax liabilities            4,858        3,361        4,115
Obligations under finance          156          -            -
leases

                                   45,139       26,942       40,343
Non-current liabilities
Other liabilities                  274          396          392
                                   274          396          392
Total liabilities                  45,413       27,338       40,735

Net assets                         41,545       31,821       40,373
Equity
Share capital                 8    226          226          226
Share premium account              -            23,976       -
Capital redemption reserve         -            14,193       -
Investment in own shares      8    (935)        (1)          (1)
Share option and SIP reserve  8    1,789        1,110        1,712
Reserve for exchange          8    34           -            -
differences
on translation of foreign
operations

Retained earnings             8    40,431       (7,683)      38,436

Total equity                  9    41,545       31,821       40,373



CONDENSED CONSOLIDATED CASH FLOW STATEMENT

                                   Unaudited    Unaudited    Audited
                                   27 weeks     26 weeks     year
                                   ended        ended        ended
                              Note 30 September 24 September 25 March
                                   2007         2006         2007
                                   £000         £000         £000
Net cash from operating       11   10,920       12,109       28,181
activities

Investing activities

Interest received                  549          739          1,310

Purchase of property, plant        (1,854)      (5,645)      (6,646)
and
equipment
Proceeds from disposal of          53           101          194
property, plant
and equipment
Acquisition of subsidiary     10   (8,219)      -            (19,754)

Purchase of own shares        6    (3,489)      -            -

Net cash used in investing         (12,960)     (4,805)      (24,896)
activities


Financing activities

Repayments of obligations          (144)        (67)         (67)
under finance
leases
Dividends paid                     (6,159)      (5,076)      (8,189)

Net cash used in financing         (6,303)      (5,143)      (8,256)
activities

Net (decrease)/increase in         (8,343)      2,161        (4,971)
cash and
cash equivalents
Cash and cash equivalents at       24,324       29,295       29,295
beginning
of period
Cash and cash equivalents at       15,981       31,456       24,324
end of
period



NOTES TO CONDENSED FINANCIAL STATEMENTS

1. Accounting policies
These financial statements have been prepared on a historical cost
basis and on the policies set out below.

Basis of preparation
The financial information contained in this report is unaudited, but
has been formally reviewed by the auditors and their report to the
Company is set out on page 18. The information shown for the 52 weeks
ended 25 March 2007, which is prepared under IFRS, does not
constitute statutory accounts within the meaning of section 240 of
the Companies Act 1985. The report of the auditors on the statutory
accounts for the year ended 25 March 2007, prepared under
International Financial Reporting Standards (IFRS), was unqualified
and did not contain a statement under section 237 of the Companies
Act 1985 and has been filed with the Registrar of Companies.

At the date of authorisation of these condensed financial statements,
the following standards and interpretations which have not been
applied in these condensed financial statements were in issue but not
yet effective:
IFRS 7:        Financial Instruments: Disclosures
IFRS 8:        Operating Segments
IFRIC 12:      Service Concession Arrangements.
IFRIC 13:      Customer Loyalty Programs
IFRIC 14:      IAS 19 - The Limit on a Defined Benefit Asset, Minimum
Funding requirements and their Interaction

The directors do not anticipate that the adoption of these standards
and interpretations will have a material impact on the condensed
financial statements of the group. The condensed financial statements
are presented in pounds sterling because it is the currency of the
primary economic environment in which the group operates. The
directors consider that there are no critical accounting judgements
and key sources of estimation uncertainty in applying the group's
accounting policies.

2. Segmental reporting, net revenue analysis and gross throughput

(i)  Segmental information
(a)      Geographical segments. The group operates in the UK,
Republic of Ireland and Romania but the group has only one reportable
geographical segment as defined in International Accounting Standard
14 Segment Reporting due to the fact that principally all operations
occur in the UK.
(b)      Classes of business. The group has one class of business,
being payment collection and distribution services.

(ii) Analysis of net revenues by sector, cost of sales and gross
throughput
Group revenue comprises the value of sales (excluding VAT) of
services in the normal course of business and includes amounts billed
to customers to be passed on to retail agents as commission payable,
the face value of mobile top-ups where PayPoint acts as principal and
for Metacharge, it includes external processing charges which are
amounts billed to merchants that are passed onto the acquiring bank.
Cost of sales includes the cost to the group of the sale, including
commission to retail agents and the cost of mobile top-ups where
PayPoint is the principal in the supply chain and acquiring bank
charges.

Revenue performance of the business is measured by net revenue which
is calculated as the total revenue from clients less commission
payable to retail agents, acquiring bank charges and the cost of
mobile top-ups where PayPoint is the principal in the supply chain.

Although there is only one class of business, since the risks and
returns are similar across markets in which the group operates, the
group monitors net revenue (see below) with reference to each sector.

Gross throughput represents payments made by consumers using the
PayPoint service, for bill and general payments, mobile top-ups
(including scratch cards), cash withdrawals from ATMs and the value
of transactions via the internet.


                                 27 weeks     26 weeks     Year ended
                                 ended        ended        25 March
                                 30 September 24 September 2007
                                 2007         2006         £000
                                 £000         £000
Revenue - transaction processing 103,030      70,304       155,659
- lease rental of ATMs           920          670          1,409
Revenue                          103,950      70,974       157,068
less:
Commission payable to retail     (41,463)     (35,886)     (76,986)
agents
Cost of mobile top-ups as        (26,688)     (9,255)      (21,050)
principal
Acquiring bank charges           (1,618)      -            (1,333)
Net revenue                      34,181       25,833       57,699
Net revenue by sector
Bill payments                    13,644       11,399       25,737
Mobile top-ups                   12,834       10,741       22,633
ATMs                             3,275        2,730        5,751
Internet payments                3,124        -            1,623
Other                            1,304        963          1,955
Net revenue                      34,181       25,833       57,699
UK                               32,709       25,455       56,757
International(1)                 1,472        378          942
Net revenue                      34,181       25,833       57,699
Profit and loss
Revenue                          103,950      70,974       157,068
Cost of sales
Commission payable to retail     (41,463)     (35,886)     (76,986)
agents
Cost o f mobile top-ups as       (26,688)     (9,255)      (21,050)
principal
Acquiring bank charges           (1,618)      -            (1,333)
Other                            (6,876)      (5,520)      (11,699)
Total cost of sales              (76,645)     (50,661)     (111,068)
Gross profit                     27,305       20,313       46,000
Gross throughput
Transactions via PayPoint        2,774,365    2,159,212    4,826,632
terminals, retailer
EPoS systems and sale of scratch
cards
Withdrawals via ATMs             167,961      144,398      293,287
Internet transactions            545,619      -            117,180
Gross throughput                 3,487,945    2,303,610    5,237,099




(1) International consists of Ireland and Romania

3. Tax on profit of ordinary activities

             27 weeks     26 weeks     Year ended
             ended        ended        25 March
             30 September 24 September 2007
             2007         2006         £000
             £000         £000
Current tax  4,373        3,331        7,935
Deferred tax (20)         10           (76)
Total        4,353        3,341        7,859



4.  Dividend
The declared interim dividend is 5.3p (2006: 4.6p). The total
dividends in respect of the year ended 25 March 2007 were £9.3
million (13.7p per share).
The interim dividend was declared on 21 November 2007 and accordingly
has not been recorded as a liability as at 30 September 2007.

5.  Earnings per share
(a) Basic and diluted earnings per share

The basic and diluted earnings per share are calculated on the
following profit and number of shares.

                                 27 weeks     26 weeks     Year ended
                                 ended        ended        25 March
                                 30 September 24 September 2007
                                 2007         2006         £000
                                 £000         £000
Profit for the purposes of basic 10,136       7,675        18,738
earnings per
share being net profit
attributable to equity
holders of the parent and for
diluted earnings
                                 Number of    Number of    Number of
                                 shares       shares       shares
Weighted average number of       67,688,522   67,678,074   67,678,187
shares
(for basic earnings per share)
Potential dilutive ordinary      100,878      65,397       80,336
shares:
Deferred share bonus
Long term incentive plan         1,036,849    887,737      974,116
Diluted basis                    68,826,249   68,631,208   68,732,639



6. Related party transactions
On 24 September the company released the first tranche of its Long
Term Incentive Plan awards to the three executive directors and six
senior managers. In order to satisfy the company's obligations,
Paypoint Network Limited Employee Investment Trust (The Trust)
acquired 424,052 ordinary shares at the mid market closing price of
597.5 pence per share, in aggregate £2,533,000, from RIT Capital
Partners and the Weinstock Estate (both of which are connected to
David Morrison, a non-executive director of the company).  156,348
shares were sold at 597.5 pence per share, in aggregate £934,000, by
participating directors and managers to the Trust. Accordingly, the
company has funded £3,467,000 (excluding £22,000 deal costs) for the
purchase of its own shares.   The excess of the market value of the
shares acquired over their fair value at the date of grant of
£1,982,000 has been charged to reserves.

7. Cash and cash equivalents
Included within cash and cash equivalents is £7.8 million (September
2006: £6.4 million, March 2007: £7.3 million) relating to monies
collected on behalf of PayPoint clients where PayPoint has title to
the funds (client cash). An equivalent balance is included within
trade payables.

8. Share capital, share option and SIP reserve and retained earnings

                                 27 weeks     26 weeks     Year ended
                                 ended        ended        25 March
                                 30 September 24 September 2007
                                 2007         2006         £000
                                 £000         £000
Authorised share capital
4,365,352,200 ordinary shares of 14,551       14,551       14,551
1/3 p each
Called up, allotted and fully
paid share
67,693,368 ordinary shares of    226          226          226
1/3 p each
Share option and SIP reserve
At start of period               1,712        738          738
Additions in period              628          372          974
Options exercised in period      (551)        -            -
At end of period                 1,789        1,110        1,712
Investment in own shares
At start of period               (1)          (1)          (1)
Acquired in period (see note 6)  (2,533)      -            -
Used on share scheme vesting     1,599        -            -
At end of period                 (935)        (1)          (1)
Retained earnings
At start of period               38,436       (10,282)     (10,282)
Profit for the period            10,136       7,675        18,738
Capital reduction                -            -            38,046
Undistributable reserves         -            -            123
Dividends paid                   (6,159)      (5,076)      (8,189)
Adjustment on share scheme       (1,982)      -            -
vesting (see
At end of period                 40,431       (7,683)      38,436



9. Statement of changes in equity

                                 27 weeks     26 weeks     Year ended
                                 ended        ended        25 March
                                 30 September 24 September 2007
                                 2007         2006         £000
                                 £000         £000
Opening equity                   40,373       28,850       28,850
Profit for the period            10,136       7,675        18,738
Dividends paid                   (6,159)      (5,076)      (8,189)
Investment in own shares (see    (934)        -            -
note 6)
Adjustment on share scheme       (2,533)      -            -
vesting (see
note 6)
Exchange differences on          34           -            -
translation of
foreign operations
Additions to share option and    628          372          974
SIP reserve
Closing equity                   41,545       31,821       40,373



10. Acquisition of subsidiary (Pay Store)

                                        Book    Fair
                                        Value   value
                                        £000    £000

Net assets acquired
Property, plant and equipment           2,046   2,046
Trade and other receivables             2,309   2,309
Cash and cash equivalents               1,584   1,584
Trade and other payables                (3,846) (3,846)
Intangible assets                       -       781

                                        2,093   2,874

Goodwill                                        8,049
Total consideration                             10,923

Satisfied by:
Cash                                            9,803
Deferred consideration                          1,120

                                                10,923
Net cash outflow arising on acquisition
Cash consideration                              9,803
Cash and cash equivalents acquired              (1,584)

                                                8,219



On 15 May 2007, the company acquired 100% of the issued share capital
of Pay Store for cash consideration of £10.9 million (of which £1.1
million is payable 12 months after acquisition). A further ¤1 million
is either payable or recoverable 12 months after acquisition
dependent on the performance of the business.

The goodwill arising on the acquisition of Pay Store is attributable
to the expected profitability of the company.

Pay Store contributed £13.6 million revenue and a loss of £55,000 to
the group's profit before tax for the period between the date of
acquisition and the balance sheet date. If the acquisition of Pay
Store had been completed on the first day of the financial year, it
would have contributed £18.1 million to revenue and £104,000 to
profit attributable to equity holders of the parent.

11. Notes to the cash flow statement


                                 27 weeks     26 weeks     Year ended
                                 ended        ended        25 March
                                 30 September 24 September 2007
                                 2007         2006         £000
                                 £000         £000
Operating profit                 13,946       10,363       25,202
Adjustments for:


Depreciation on property, plant  2,244        1,691        3,603
and
equipment
Amortisation of intangibles      399          -            212
Increase in share option and SIP 77           372          974
reserve
Loss on disposal of property,    -            67           -
plant and
equipment
Operating cash flows before      16,666       12,493       29,991
movements in working capital
Decrease/(increase) in           872          211          (532)
inventories
(Increase)/decrease in           (2,300)      (126)        788
receivables
Increase/(decrease) in payables
- client cash                    451          780          1,105
- other payables                 (1,037)      611          2,866
Cash generated by operations     14,652       13,969       34,218
Corporation tax paid             (3,732)      (1,822)      (6,007)
Interest and commitment fees     -            (38)         (30)
paid
Net cash from operating          10,920       12,109       28,181
activities



RESPONSIBILITY STATEMENT
We confirm that to the best of our knowledge:

a)  the condensed set of financial statements has been prepared in
accordance with IAS 34;
b)  the business review includes a fair review of the information
required by Disclosure and Transparency Rules (DTR) 4.2.7R
(indication of important events during the first six months and
description of principal risks and uncertainties for the remaining
six months of the year) ; and
c)  the business review includes a fair review of the information
required by DTR 4.2.8R (disclosure of related party transactions and
changes therein).


By order of the board


David Newlands             Dominic Taylor
Chairman                   Chief Executive

21 November 2007




RISKS

PayPoint's business, financial condition or operations could be
materially and adversely affected over the remaining six months by
the risks summarised below. Although management takes steps to
mitigate risks where possible or where the cost of doing so is
reasonable in relation to the probability and seriousness of the
risk, it may not be possible to avoid crystallisation of some or all
of such risks:


+-------------------------------------------------------------------+
| Risk                      | Future prospects depend on our        |
|                           | ability to:                           |
|                           |                                       |
|---------------------------+---------------------------------------|
| Managing growth of the    | manage growth through the employment  |
| business                  | of adequate skilled resources, whilst |
|                           | maintaining financial controls        |
|                           |                                       |
|---------------------------+---------------------------------------|
| The loss of a major       | renew contracts at expiry (over the   |
| contract                  | next six years) on attractive terms   |
|                           |                                       |
|---------------------------+---------------------------------------|
| Dependence on key         | retain and recruit key staff through  |
| executives                | a mixture of basic salary, short and  |
|                           | long-term incentive schemes           |
|                           |                                       |
|---------------------------+---------------------------------------|
| Failure of systems        | maintain financial controls, defend   |
|                           | against natural disasters, terrorist  |
|                           | attacks, sabotage and hacking         |
|                           |                                       |
|---------------------------+---------------------------------------|
| Competition               | hold and gain market share,           |
|                           | particularly in commodity services    |
|                           | such as mobile top-ups                |
|                           |                                       |
|---------------------------+---------------------------------------|
| Insolvency of a major     | avoid the consequences of insolvency  |
| multiple retail agent     | both in terms of bad debt risk (where |
|                           | we bear it) and the impact of such    |
|                           | insolvency on our network coverage    |
|                           |                                       |
|---------------------------+---------------------------------------|
| Technological changes     | keep pace with technological changes  |
|                           | and introduce new developments to     |
|                           | maintain competitive advantage        |
|                           |                                       |
|---------------------------+---------------------------------------|
| Reliance on intellectual  | stop third parties from using our     |
| property                  | products and defend the use of our    |
|                           | products from any challenge           |
|                           |                                       |
|---------------------------+---------------------------------------|
| The need to raise capital | access future capital needs on        |
| in future                 | sufficiently attractive terms to grow |
|                           | the business profitably               |
|                           |                                       |
|---------------------------+---------------------------------------|
| Economic, political,      | to deal with the impact of such       |
| legislative, taxation or  | changes without adversely affecting   |
| regulatory changes        | the growth or profitability of the    |
|                           | business                              |
|                           |                                       |
|---------------------------+---------------------------------------|
| Taxation                  | ensure the impact of any adverse      |
|                           | changes is mitigated by enhanced      |
|                           | performance                           |
|                           |                                       |
|---------------------------+---------------------------------------|
| Fraudulent or criminal    | avoid loss of client monies by the    |
| activity                  | rigorous application of controls      |
|                           |                                       |
+-------------------------------------------------------------------+



INDEPENDENT REVIEW REPORT TO PAYPOINT PLC
We have been engaged by the company to review the condensed set of
financial statements in the half-yearly financial report for the
period ended 30 September 2007 which comprises the income statement,
the balance sheet, the statement of recognised income and expense,
the cash flow statement and related notes 1 to 11. We have read the
other information contained in the half-yearly financial report and
considered whether it contains any apparent mis-statements or
material inconsistencies with the information in the condensed set of
financial statements.

This report is made solely to the company in accordance with
International Standard on Review Engagements 2410 issued by the
Auditing Practices Board. Our work has been undertaken so that we
might state to the company those matters we are required to state to
them in an independent review report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company, for our review work,
for this report, or for the conclusions we have formed.

Directors' responsibilities
The half-yearly financial report is the responsibility of, and has
been approved by, the directors. The directors are responsible for
preparing the half-yearly financial report in accordance with the
Disclosure and Transparency Rules of the United Kingdoms' Financial
Services Authority.

As disclosed in note 1, the annual financial statements of the group
are prepared in accordance with IFRS as adopted by the European
Union. The condensed set of financial statements included in this
half-yearly financial report has been prepared in accordance with
International Accounting Standard 34, Interim Financial Reporting, as
adopted by the European Union.

Our responsibility
Our responsibility is to express to the company a conclusion on the
condensed set of financial statements in the half-yearly financial
report based on our review.

Scope of Review
We conducted our review in accordance with International Standard on
Review Engagements (UK and Ireland) 2410, Review of Interim Financial
Information Performed by the Independent Auditor of the Entity issued
by the Auditing Practices Board for use in the United Kingdom. A
review of interim financial information consists of making inquiries,
primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland)
and consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.

Review conclusion
Based on our review, nothing has come to our attention that causes us
to believe that the accompanying interim financial information is not
prepared, in all material respects, in accordance with International
Accounting Standard 34 as adopted by the European Union and the
Disclosure and Transparency Rules of the United Kingdom's Financial
Services Authority.

Deloitte & Touche LLP
Chartered Accountants
21 November 2007
London, UK




Notes: A review does not provide assurance on the maintenance and
integrity of the website, including controls used to achieve this,
and in particular on whether any changes may have occurred to the
financial information since first published. These matters are the
responsibility of the directors but no control procedures can provide
absolute assurance in this area. Legislation in the United Kingdom
governing the preparation and dissemination of financial information
differs from legislation in other jurisdictions.

PayPoint plc


DIRECTORS & KEY CONTACTS


Directors                 George Earle (Finance Director)
                          Kenneth Minton*
                          David Morrison*
                          David Newlands* (Chairman)
                          Andrew Robb*
                          Dominic Taylor (Chief Executive)
                          Tim Watkin-Rees (Business Development
                          Director)
                          Roger Wood*
                          * non-executive directors

Registered office         1 The Boulevard
                          Shire Park
                          Welwyn Garden City
                          Hertfordshire
                          AL7 1EL
                          United Kingdom
                          Registered in England and Wales number
                          3581541

Registrars                Capita Registrars
                          Registration Services
                          Northern House
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                          Fenay Bridge
                          Huddersfield
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                          HD8 0LA
                          Telephone
                          0870 162 3100

Press and investor        Finsbury
relations enquiries       Tenter House
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                          Telephone No. 020 7251 3801

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