PayPoint plc - Notice of EGM

13 October 2006

NOTICE OF EGM

PayPoint plc (the "Company") advises that it will issue a shareholder
circular today relating  to the proposed  cancellation of the  entire
amount standing to the  credit of each of  its share premium  account
and capital redemption reserve  and an amendment  of its articles  of
association ("Articles").

Following a review of its capital structure, and in order to  provide
greater flexibility  to pay  dividends  and, if  appropriate,  return
capital to Shareholders, the Company  is now proposing to cancel  the
entire amount standing  to the credit  of each of  its share  premium
account and capital redemption reserve ("Cancellations"). This  would
increase  the  level  of  the  Company's  distributable  reserves  by
approximately £38.1 million.

As the limits on the Company's borrowing powers are set by  reference
to the paid up share capital and reserves of the Company, unless  the
Company's Articles  are  amended,  the Cancellations  will  have  the
effect of reducing such borrowing powers. Accordingly it is  proposed
to amend  the Articles  so that  the Company's  borrowing powers  are
calculated by reference to the  consolidated earnings of the  Company
and its subsidiaries.

Background to and reasons for the Cancellations

As at  31  March 2006,  the  amount standing  to  the credit  of  the
Company's share premium account  was approximately £23.9 million.  As
at the same date the amount  standing to the credit of the  Company's
capital  redemption  reserve  (which  arose  upon  the  purchase  and
cancellation  by  the  Company  of  deferred  shares  in  2004)   was
approximately £14.2 million.


Amendments to the Articles

The Company's borrowing limits are contained in the Articles and  are
calculated by  reference  to,  inter alia,  the  Company's  reserves.
Therefore, if  the  Cancellations  become  effective,  the  Company's
borrowing powers will be reduced.

It is therefore proposed to amend the Articles so that the  Company's
borrowing powers  are calculated  by  reference to  the  consolidated
earnings of the Company and its subsidiaries.

Approval of Shareholders

Shareholders  will  be  invited  to  approve  the  Cancellations  and
amendments to  the  Articles  by  voting in  favour  of  the  special
resolution at an extraordinary general meeting ("EGM") which will  be
held at 1 The  Boulevard, Shire Park, Welwyn  Garden City, Herts  AL7
1EL at 12.00 p.m. on 8 November 2006.

Confirmation by the Court

If the proposed Cancellations are approved by Shareholders, they must
be confirmed  by the  Court  in order  to  become effective.  If  the
special resolution is passed at the EGM, application will be made  to
the Court as soon  a practicable thereafter  to obtain the  necessary
confirmation.

The Company has  been advised  that the  Court will  not confirm  the
Cancellations unless the Company has either obtained the consent  of,
or taken adequate measures to  protect the interest of, its  existing
creditors. The Company has obtained  all necessary consents from  its
creditors.

It is envisaged that, if the special resolution is passed, the  order
from the Court confirming  the Cancellations will  be obtained on  or
around 6 December 2006. The Cancellations will then take effect  upon
registration of the Court order with the Registrar of Companies.


Enquiries
Susan Court             01707 600 316

Finsbury Group             020 7251 3801

Rollo Head
Don Hunter

About PayPoint

PayPoint is  a  leading  branded  payment  collection  network  used,
primarily, for the cash payment of bills and services and prepayments
for mobile telephones and energy meters. There are over 15,000 retail
outlets using PayPoint's payment terminals.

PayPoint began  trading  in  1996 and  initially  collected  payments
through  its  network  of  retail  agents  for  its  founder   client
investors, who included  British Gas,  BT, BBC  TV Licensing,  London
Electricity (now part of EDF Energy) and four water companies.

Its clients include the UK and Ireland's major energy, cable,  mobile
and fixed line telephony  companies. Its blue  chip client list  also
extends to numerous  water companies, local  authorities and  housing
associations and a growing transport and travel base.

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