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Paypoint plc (PAY)

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Thursday 24 November, 2011

Paypoint plc

PayPoint plc Half Year Financial Report






                                  PayPoint plc
                           Half year financial report
                   for the six months ended 25 September 2011
HIGHLIGHTS
                            |     6 months       6 months
                            |        ended          ended
                            | 25 September   26 September   Increase
                            |         2011           2010
----------------------------+----------------------------------------
 Transaction value          |      £5,588m        £4,831m       16 %
                            |
 Revenue                    |       £95.9m         £92.9m         3%
                            |
 Net revenue(1)             |       £41.9m         £38.7m         8%
                            |
 Gross margin               |        37.5%          35.3%     2 ppts
                            |
 Operating profit           |       £16.7m         £15.3m         9%
                            |
 Profit before tax          |       £15.8m         £14.6m         9%
                            |
 Diluted earnings per share |        16.7p          14.8p        13%
                            |
 Interim dividend per share |         8.7p           7.8p        12%
----------------------------+----------------------------------------

  * 292 million transactions processed in the period, up 9%
  * UK & Ireland transactions increased 5% with net revenue up 9%
  * Internet payment transactions have grown by 34% and net revenue by 4%
  * Romanian retail network moved into profit  bill payment transactions
    increased to over 8 million in the period (2010: 5 million)
  * PayByPhone increased transactions to over 8 million, up 23% with net revenue
    up by 18%
  * Collect+ has processed over 1 million transactions, an increase of nearly
    five times and has won two national awards for its innovative parcel
    delivery and returns service
  * Earnings per share increase helped by lower UK tax charge
  * 8.7p dividend per share, up 12%

David Newlands, Chairman of PayPoint plc said:
"Our  retail network continues to  perform well, processing 5% more transactions
overall  in  the  period,  despite  there  being 5 million fewer mobile top-ups.
 Internet  payments contributed to  overall growth in  transactions of 8% in the
established business (the UK and Ireland retail networks and internet payments).
 Net revenue in the established business increased by 7%.

Our  developing business,  consisting of  our Romanian  retail network, Collect+
parcel  service and PayByPhone, also made good  progress.  In Romania, we made a
small  profit following 69% growth in bill payments and since the period end, we
have  introduced  Western  Union  money  transfer.   Collect+, our award-winning
parcels  joint venture, has won 44 new merchants and processed nearly five times
as  many parcels as in the same period last year.   PayByPhone has been selected
by  33 new clients in the period, with  a substantial number of tender decisions
still awaited.

For  the  current  financial  year,  trading  is  in  line  with  the  company's
expectations.   Our  established  business  is  strong.   We will pursue further
opportunities  to enhance  our retail  yield by  introducing new  technology and
services,  while enhanced transaction management and information services should
help  our  internet  sales  in  the  next financial year. Continuing progress is
expected  in our developing business. Our  Romanian retail network will focus on
improving  market  share  and  further  modest  network growth to improve yield.
 PayByPhone  will continue to  pursue new clients  and enhance its technology to
grow  revenue  and  improve  customer  satisfaction.  Collect+ will continue its
intensive marketing to new clients, to extend deliveries to its existing returns
clients   and  to  promote  its  consumer-to-consumer  proposition.   We  expect
PayByPhone  and  the  Collect+  parcel  service  to  turn  to profit in the next
financial year.

I am pleased to announce an interim dividend of 8.7pence per share."

The  condensed financial statements  cover the six  months from 28 March 2011 to
25 September  2011, the last  Sunday in  the month  (2010: 6 months covering the
period 29 March 2010 to 26 September 2010).

 1. Net  revenue is revenue less the cost  of mobile top-ups and SIM cards where
    PayPoint is principal and costs incurred by PayPoint, which are recharged to
    clients  and  merchants.   These  costs  include  retail  agent  commission,
    merchant  service charges levied  by card scheme  sponsors and costs for the
    provision of call centres for PayByPhone clients.  Net revenue is a measure,
    which  the  directors  believe  assists  with  a better understanding of the
    underlying performance of the group.


Management report

The management report has been prepared solely to provide additional information
to  shareholders as  a body  to assess  PayPoint's half  year performance and it
should  not be relied upon  for any other purpose.   It contains forward looking
statements  made  by  the  directors  in  good  faith,  based on the information
available  at the time  of approval of  the half yearly  financial report.  Such
statements  should be  treated with  caution due  to the  inherent uncertainties
underlying any such forecast, including both economic and business risk factors.

PayPoint  is  a  payment  service  provider  to  retailers  and consumer service
companies  and as such, has only  one operating segment.  However, reflection on
various facets helps to explain the execution of our strategy as set out on page
3 of  our annual  report and  accordingly, in  addition to  the analysis  of the
number  and value  of consumer  transactions, revenue  and net  revenue, we have
shown an analysis which separates our developing business (our retail network in
Romania,  Collect+ and  PayByPhone), from  our established  business (the UK and
Irish retail networks and internet payments).

The channel analysis is as follows:

Retail networks:
Bill and general (prepaid energy, bills, tickets and cash out payments)
Top-ups (mobile, prepaid cards and phone cards)
Retail  services (ATM, debit/credit,  parcels, money transfer,  SIMs and receipt
advertising)

Internet  (transactions between consumers  and merchants, pre-authorisations and
FraudGuard, where separately charged)

PayByPhone (parking and bicycle rental transactions)

Other for revenue and net revenue only (software development and configuration)


Operational review

During  the  period,  transactions  have  increased  to  292 million (2010: 267
million)  up  8% in  the  established  business(1)  and  37% in  the  developing
business(2).  Transaction value increased to  £5.6 billion (2010: £4.8 billion),
and is up 14% in the established business and up 78% in the developing business.

Revenue  has increased 3% overall, comprising 1% in the established business and
16% in the developing business.  Net revenue(3) increased by 8% overall.  In the
established business, net revenue increased by 7% and in the developing business
(including Collect+), by 52%.

Operating  profit in the  established business was  £17.8 million, up 9% on last
year.  The operating loss in the developing business, including our share of the
losses  of Collect+, was £2.0 million  (2010: £1.5 million). The Romanian retail
network made a small profit in the period (2010: loss of £0.3m).
                |
                |
                |   Established     Developing                 Adjust         As
                |   business(1)    business(2)   Total    Collect+(4)   reported
----------------+---------------------------------------------------------------
Transactions    |
     (million)  |
                |
   6 months 2011|           273             19     292              -        292
                |
   6 months 2010|           253             14     267              -        267
                |
 Year ended 2011|           559             31     590              -        590
----------------+---------------------------------------------------------------
Transaction     |
value  £million |
                |
   6 months 2011|         5,395            193   5,588              -      5,588
                |
   6 months 2010|         4,723            108   4,831              -      4,831
                |
 Year ended 2011|        10,316            285  10,601              -     10,601
----------------+---------------------------------------------------------------
Revenue         |
         £000   |
                |
   6 months 2011|        81,365         15,939  97,304        (1,381)     95,923
                |
   6 months 2010|        80,337         12,835  93,172          (274)     92,898
                |
Year ended 2011 |       167,700         26,535 194,235        (1,002)    193,233
----------------+---------------------------------------------------------------
Net revenue(3)  |
        £000    |
                |
   6 months 2011|        38,544          4,521  43,065        (1,135)     41,930
                |
   6 months 2010|        35,977          2,973  38,950          (222)     38,728
                |
 Year ended 2011|        76,811          6,539  83,350          (627)     82,723


In  the established  business, following  our tender  success announced in March
2011, the  UK retail  network duly  signed a  contract with  Citibank to  be the
retail  network  for  the  DWP's  replacement  for giro-cheques.  The service is
expected  to go live next  financial year and is  unlikely to affect the current
financial year's profit to any material extent.  The internet channel growth was
constrained by the impact of one large merchant changing its business model.  We
have re-started processing for this merchant since the period end.

In  the developing business, our Romanian retail network has turned from loss to
a  small profit in the first half of  the year and will introduce money transfer
with  Western  Union  in  the  second  half.   PayByPhone  has  made substantial
progress, winning 33 new clients, including London Borough of Lambeth, Ottawa in
Canada  and Coral Gables in Florida, USA.   PayByPhone parking is due to go live
in  San Francisco across 22,000 spaces this year. Cash payments for parking have
been  introduced in  Barnet and  Islington.  Collect+  has extended its consumer
proposition by introducing two resellers, Parcel2Go and myParcelDelivery and has
also  won  44 new  merchants  for  returns,  including  JD  Sports,  Monsoon and
Accessorize,  Asda Direct,  Argos Outlet,  Aurora (Karen  Millen and  Oasis) and
Wiggle.   Collect+  has  been  recognised  with  prestigious industry awards for
logistics  and innovation. Since the period end, Collect+ has started processing
deliveries for on-line clothing retailer, M and M Direct.

 1. The established business includes the UK and Irish retail networks and
    internet payments.
 2. The developing business includes the Romanian retail network, Collect+ and
    PayByPhone.
 3. Net revenue is revenue less the cost of mobile top-ups and SIM cards where
    PayPoint is principal and costs incurred by PayPoint, which are recharged to
    clients and merchants.  These costs include retail agent commission,
    merchant service charges levied by card scheme sponsors and costs for the
    provision of call centres for PayByPhone clients.  Net revenue is a measure,
    which the directors believe assists with a better understanding of the
    underlying performance of the group.
 4. Collect+  revenue and net revenue is included in the developing business
    revenue and net revenue, but as Collect+ is reported in the Consolidated
    Income Statement on a profit after tax only basis, revenue and net revenue
    needs to be eliminated to reconcile to reported revenue and net revenue.


Analysis of transactions

There has been growth in transaction volumes across all payments types except UK
and Ireland mobile top-ups, which have decreased as a result of market decline.

                            |    6 months     6 months                 Year
                            |       ended        ended                ended
                            |25 September 26 September Increase /  27 March
                            |        2011         2010 (decrease)      2011
                            |   thousands    thousands          % thousands
----------------------------+----------------------------------------------
Retail networks             |
                            |
   Bill and general payments|     165,419      152,286          9   350,970
                            |
   Top-ups                  |      55,496       60,597        (8)   117,670
                            |
   Retail services          |      29,108       22,658         28    48,425
                            |
Internet payments           |      33,914       25,326         34    58,544
                            |
                            |
PayByPhone                  |       8,068        6,557         23    14,059
----------------------------+----------------------------------------------
Total                       |     292,005      267,424          9   589,668
----------------------------+----------------------------------------------

Bill and general payment transactions were ahead of the same period last year as
a  result of an 11% increase in prepaid energy volumes.  There was strong growth
in Romania, where we processed over 8 million transactions (2010: 5 million).

In  the UK and Ireland,  mobile top-up volumes were  down 9%. In Romania, mobile
top-up  volumes increased 8% although  the net revenue  per transaction fell. E-
currency  volumes in the UK  continue to grow and  were up 9% on the same period
last year, with over 3 million transactions processed.

Retail  services volumes have  increased across most  products. ATM transactions
increased  by 14%, credit and debit transactions  by 29%, SIM card sales by 56%
and parcels by five times over the same period last year.

Internet  transactions were  up 34% to  34 million as  we continue  to add large
merchants and through organic growth in our existing merchants.

PayByPhone transactions have increased 23% as we have started to implement
PayByPhone in new parking authorities and some existing authorities have removed
other payment options.


Transaction value

There has been growth in the transaction value paid by consumers, primarily in
bill and general, and internet payments.


                     |     6 months       6 months                         Year
                     |        ended          ended                        ended
                     | 25 September   26 September      Increase /     27 March
                     |         2011           2010      (decrease)         2011
                     |         £000           £000               %         £000
---------------------+----------------------------------------------------------
 Retail networks     |
                     |
    Bill and general |    3,005,334      2,759,418               9    6,198,171
                     |
    Top-ups          |      549,448        573,689             (4)    1,114,809
                     |
                     |
    Retail services  |      211,005        194,174               9      394,727
                     |
 Internet payments   |    1,790,612      1,277,867              40    2,838,147
                     |
 PayByPhone          |       31,916         26,252              22       55,020
---------------------+----------------------------------------------------------
 Transaction value   |    5,588,315      4,831,400              16   10,600,874
---------------------+----------------------------------------------------------
The  increase  in  bill  and  general  transaction  value  results  from  higher
transaction volumes with broadly similar average values.

The  reduction in top-up transaction value is primarily as a result of a decline
in  the  prepay  mobile  market,  partially  offset  by increases in the average
transaction  values  in  the  UK  and  Ireland  and  an  increase  in e-currency
transactions.

The  increase in retail services  is accounted for by  ATM cash withdrawals. The
transaction  value in other retail services is relatively small as SIM sales are
low  value  transactions  and  for  credit  and  debit  card transactions (where
merchants  are settled by  the card sponsor,  not PayPoint), receipt advertising
and parcels, there is no transaction value.

Internet  consumer spending has increased by  40% over the same period last year
and the average transaction value has increased 5% to £52.80 (2010: £50.46).

PayByPhone  transaction values  have increased  by 22%.  The  average value of a
transaction has remained broadly the same.


Revenue

                     |     6 months       6 months                        Year
                     |        ended          ended                       ended
                     | 25 September   26 September       Increase /   27 March
                     |         2011           2010     (Decrease)         2011
                     |         £000           £000                %       £000
---------------------+---------------------------------------------------------
 Retail networks     |
                     |
    Bill and general |       28,032         25,429               10     57,889
                     |
                     |
                     |
    Top-ups          |       47,066         50,177              (6)     98,843
                     |
    Retail services  |       11,693          9,437               24     19,602
                     |
 Internet payments   |        4,372          4,190                4      8,939
                     |
 PayByPhone          |        2,560          2,183               17      4,501
                     |
 Other               |        2,200          1,482               48      3,459
---------------------+---------------------------------------------------------
 Revenue             |       95,923         92,898                3    193,233
---------------------+---------------------------------------------------------


Bill and general payment revenue is higher than the same period last year mainly
as a result of growth in prepaid energy and local authority housing transactions
in the UK and 70% growth in Romanian bill payment transactions.

The  reduction in mobile  top-up revenue is  driven by the  migration of prepaid
consumers  to contract in the  UK and greater value  for money offered by mobile
operators.

Retail  services revenue has  increased as a  result of an  increase in both the
number  of retailers taking  the services and  increased volumes of SIM, parcel,
debit and credit card, and ATM transactions.

Internet payment revenue growth has been explained on page 3.

PayByPhone  revenues  are  up  17% against  the  same period last year. Although
PayByPhone  has won a  good share of  tenders as a  consequence of the increased
resources  we have put in, client delays in implementations have delayed revenue
growth into the second half of the year.

Other  revenue  includes  one-off  set-up  fees  and the recharge of development
costs,  but is not expected to continue at  the same rate for the second half of
the current year.



Net revenue

Net  revenue is  revenue less  the cost  of mobile  top-ups and  SIM cards where
PayPoint  is principal  and costs  incurred by  PayPoint which  are recharged to
clients  and merchants.  These  costs include retail  agent commission, merchant
service charges levied by card scheme sponsors and for PayByPhone clients, costs
for the provision of call centres.  Net revenue is a measure which the directors
believe assists with a better understanding of the underlying performance of the
group and is shown in the table below:


                     |     6 months       6 months                    Year
                     |        ended          ended                   ended
                     | 25 September   26 September   Increase /   27 March
                     |         2011           2010   (decrease)       2011
                     |         £000           £000            %       £000
---------------------+-----------------------------------------------------
 Retail networks     |
                     |
    Bill and general |       16,179         14,892            9     33,806
                     |
    Top-ups          |       10,747         11,539          (7)     22,683
                     |
    Retail services  |        6,671          5,137           30     10,827
                     |
 Internet payments   |        4,372          4,190            4      8,939
                     |
 PayByPhone          |        1,761          1,488           18      3,009
                     |
 Other               |        2,200          1,482           48      3,459
---------------------+-----------------------------------------------------
 Net revenue         |       41,930         38,728            8     82,723
---------------------+-----------------------------------------------------
Net  revenue on bill  and general payments  has increased from  volume growth in
energy  prepayment and  local authority  housing in  the UK  and bill payment in
Romania,  offset by some UK clients migrating bill payments to direct debit. Net
revenue is in line with transaction growth.

Top-up  net revenue has decreased slightly  more than revenue because margins in
Romania and Ireland have reduced, offset by the positive impact of mix in the UK
where  the reduction in top-ups in independents  is less severe than in multiple
retailers.  Retail services  net revenue  has a  larger percentage increase than
revenue,  as credit and  debit card transactions  and receipt advertising do not
attract retail agent commission.

Growth in net revenue from internet transactions has been explained on page 3.

PayByPhone  net revenue  was up  18%, lower than  the growth  in transactions as
margin in the UK has reduced.



Network growth

Outlets  have increased to 30,545 (March 2011: 29,508), an increase of 1,037. In
the  UK  and  Ireland,  outlets  increased  by  649, more  than  expected,  as a
consequence  of unfulfilled orders  at last year  end and lower  churn.  Our new
virtual  terminal, a software  variant which can  be loaded onto retailers' till
systems,  has been rolled  out to 1,400 outlets.  Our focus in  the UK since the
year  end  remains  on  increasing  retail  agent  yield.   In  Romania, we have
installed 388 outlets.

In  our internet payments  channel, we have  added over 250 new merchants during
the  period, focussing on winning higher volume merchants, rather than start-ups
that process little volume.

We  introduced  Collect+  to  584 of  our  retail outlets, bringing the total to
4,252.

                    |
                    |           At             At      Increase /         At
                    | 25 September   26 September   (decrease)(1)   27 March
                    |         2011           2010               %       2011
--------------------+--------------------------------------------------------
 UK and Ireland     |       24,162         23,021               3     23,513
                    |
 Romania            |        6,383          5,012               6      5,995
--------------------+--------------------------------------------------------
 Total              |       30,545         28,033               4     29,508
--------------------+--------------------------------------------------------
 Internet merchants |        5,464          5,522               5      5,213
                    |
 Collect+ outlets   |        4,252          3,350              16      3,668
--------------------+--------------------------------------------------------


((1)) Increase/(decrease) measured against position at 27 March 2011

Financial review

Movement  in  revenue  and  net  revenue  have been addressed in the operational
review above.

Gross  profit was  £36.0 million  (2010: £32.8  million), up  9.7% and the gross
profit  margin improved to  37.5% (2010: 35.3%) as a  result of the reduction in
agent commission, due to lower mobile top-ups.

Operating  costs  (administrative  expenses)  were  £19.3  million  (2010: £17.5
million),  up  10.3%, due  to  some  initial  costs  relating  our  new benefits
contract,  signage for Collect+ sites and our continuing investment in increased
resources for PayByPhone.

Operating  profit was  £16.7 million  (2010: £15.3  million), up 9.0%, excluding
PayPoint's  share  of  losses  in  Collect+.   The operating margin(1) increased
slightly to 39.8% (2010: 39.5%), mainly as result of improved performance in the
UK retail network.

Our  share, in the period,  of the loss in  our parcels joint venture, Collect+,
increased  to £0.9  million (2010:  £0.7 million)  as it  continues to invest in
resources to grow the business.

Profit  before tax was £15.8 million (2010:  £14.6 million), up 8.7% on the same
period  last year.  The tax charge was £4.5 million (2010: £4.5 million) and the
estimated effective tax rate for the current financial year is 28.5% (year ended
27 March  2011: 30.9%). The reduction in tax rates  reflects the decrease in the
UK corporate tax rate.

Operating  cash flow was £8.1 million (2010: £9.4 million) after corporation tax
payments  of £5.3  million (2010:  £5.9 million).   Capital expenditure  of £1.7
million  (2010: £1.1 million)  comprised expenditure on  new terminals, software
development  and ATMs.  Collect+ funding was  £0.8m (2010: £0.4 million). Equity
dividends  paid  were  £10.6  million  (2010:  £9.8  million). Net cash and cash
equivalents  at the period end were £21.5 million (27 March 2011 £26.5 million),
including client cash of £3.0 million, down from £6.1 million at 27 March 2011.
The reduction in client cash results from a change in practice in respect of ATM
monies,  which LINK recommended be  held in trust for  the benefit of retailers,
which at the period end were £3.1 million (27 March 2011 £3.3 million).

(1)         Operating margin is  operating profit (which excludes Collect+) as a
percentage of net revenue.



Related party transactions

Related party transactions are disclosed in note 5.

Risks

Risks  to PayPoint's business, financial  condition and operations are disclosed
on pages 22 and 23.

Dividend

We  have declared an interim dividend  of 8.7p per share (2010: 7.8p) which will
be paid on 21 December 2011 to shareholders on the register at 2 December 2011.


Liquidity and going concern

The  group is  profitable, cash  generative, had  cash of  £21.5 million  at the
period  end and an  undrawn £35 million  revolving term credit  facility with an
unexpired  term of over four years.  Cash  and borrowing capacity is adequate to
meet  the foreseeable needs of the group, taking account of any risks (pages 22
and  23).  The  financial  statements  have  therefore  been prepared on a going
concern basis.

Economic climate

Bill  and general payments which account for 39% (2010: 38%) of our net revenue,
have  continued  to  be  resilient,  as  consumers' discretion in expenditure is
limited for essential services and our service continues to be popular.  Utility
providers  in the UK continue to install  new prepay gas and electricity meters,
which  will have a  beneficial impact on  our transaction volumes.     There has
been  adverse impact on  our top-up volumes  as a consequence  of migration from
prepaid  to contract and more value for money being offered to consumers. Mobile
top-ups  account for 23% of  our net revenue  (2010: 27%).  The internet payment
market  continues to  grow substantially.   PayByPhone is  able to offer parking
authorities  a more cost effective collection system for parking compared to pay
and  display  machines,  which  should  continue  to  make PayByPhone's services
attractive.  The convenient service for users  of the fast growing online market
provided  by  Collect+  offers  opportunity  for  substantial  growth  in parcel
volumes.

Outlook

For  the  current  financial  year,  trading  is  in  line  with  the  company's
expectations.   Our  established  business  is  strong.   We will pursue further
opportunities  to  enhance  UK  retail  yield  by introducing new technology and
services,  while enhanced transaction management and information services should
help  our internet  sales in  the next  financial year.   Continuing progress is
expected  in our developing business. Our  Romanian retail network will focus on
improving  market share with modest network growth to improve yield.  PayByPhone
will  continue to pursue new  clients and the development  of technology to grow
revenue and improve customer satisfaction.  Collect+ will continue its intensive
marketing  to new clients, to extend  deliveries to its existing returns clients
and  promote its consumer to consumer proposition.  We expect PayByPhone and the
Collect+ parcel service to turn to profit next financial year.


 David Newlands     Dominic Taylor
 Chairman           Chief Executive

 24 November 2011




CONDENSED CONSOLIDATED INCOME STATEMENT

                                       Unaudited    Unaudited   Audited
                                        6 months     6 months      Year
                                           ended        ended     ended
                                    25 September 26 September  27 March
                                            2011         2010      2011
Continuing operations          Note         £000         £000      £000
-----------------------------------------------------------------------
Revenue                           2       95,923       92,898   193,233

Cost of sales                     2     (59,913)     (60,079) (122,567)
-----------------------------------------------------------------------
Gross profit                              36,010       32,819    70,666

Administrative expenses                 (19,316)     (17,510)  (34,614)
-----------------------------------------------------------------------
Operating profit                          16,694       15,309    36,502

Share of loss of joint venture             (935)        (726)   (1,541)

Investment income                             87           38        88

Finance costs                               (23)         (64)     (143)
-----------------------------------------------------------------------
Profit before tax                         15,823       14,557    34,456

Tax                               3      (4,510)      (4,496)  (10,614)
-----------------------------------------------------------------------
Profit for the period                     11,313       10,061    23,842
-----------------------------------------------------------------------




Attributable to:

Equity holders of the parent              11,329       10,061    23,883

Non-controlling interest                    (16)            -      (41)
-----------------------------------------------------------------------
                                          11,313       10,061    23,842
-----------------------------------------------------------------------


Earnings per share

-----------------------------------------------------------------------
Basic                             4        16.7p        14.9p     35.2p
-----------------------------------------------------------------------
Diluted                           4        16.7p        14.8p     35.1p
-----------------------------------------------------------------------
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

                                                 Unaudited    Unaudited  Audited
                                                  6 months     6 months     Year
                                                     ended        ended    ended
                                              25 September 26 September 27 March
                                                      2011         2010     2011
                                         Note         £000         £000     £000

Exchange differences on translation of
foreign operations                          8          655        (837)     (72)
--------------------------------------------------------------------------------
Other comprehensive income / (loss) for
the period                                             655        (837)     (72)

Profit for the period                               11,313       10,061   23,842
--------------------------------------------------------------------------------
Total comprehensive income for the                  11,968        9,224   23,770
period
--------------------------------------------------------------------------------
Attributable to:
--------------------------------------------------------------------------------
Equity holders of the parent                        11,984        9,224   23,811

Non-controlling interest                              (16)            -     (41)
--------------------------------------------------------------------------------
                                                    11,968        9,224   23,770
--------------------------------------------------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEET

                                                 Unaudited    Unaudited  Audited
                                              25 September 26 September 27 March
                                                      2011         2010     2011
                                         Note         £000         £000     £000
--------------------------------------------------------------------------------
Non-current assets

Goodwill                                            56,744       56,058   57,133

Other intangible assets                              1,344        1,277    1,329

Property, plant and equipment                       14,566       13,851   14,520

Investment in joint venture                              -            -      135

Deferred tax asset                                   1,079          904    1,116


Investment                                             435          405      435
--------------------------------------------------------------------------------
                                            2       74,168       72,495   74,668
--------------------------------------------------------------------------------
Current assets

Inventories                                          1,412        1,582      915

Trade and other receivables                         19,006       18,470   17,103

Cash and cash equivalents                   7       21,511       22,928   26,464
--------------------------------------------------------------------------------
                                                    41,929       42,980   44,482
--------------------------------------------------------------------------------
Total assets                                       116,097      115,475  119,150
--------------------------------------------------------------------------------
Current liabilities


Trade and other payables                            28,834       30,563   32,996

Current tax liabilities                              4,491        3,930    5,287

Short-term borrowings                                    -       10,000        -

Obligations under finance leases                         9           11       32
--------------------------------------------------------------------------------
                                                    33,334       44,504   38,315
--------------------------------------------------------------------------------
Non-current liabilities


Other liabilities                                      225          175      240
--------------------------------------------------------------------------------
                                                       225          175      240
--------------------------------------------------------------------------------
Total liabilities                                   33,559       44,679   38,555
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Net assets                                          82,538       70,796   80,595
--------------------------------------------------------------------------------
Equity


Share capital                               8          226          226      226

Investment in own shares                    8        (216)        (216)    (216)

Share premium                               8           25           25       25

Share based payment reserve                 8        2,566        2,476    3,005


Translation reserve                         8        1,126        (294)      471

Retained earnings                           8       78,868       68,579   77,125
--------------------------------------------------------------------------------
Total equity attributable to equity                 82,595       70,796   80,636
holders of the parent company
--------------------------------------------------------------------------------
Non-controlling interest                              (57)            -     (41)
--------------------------------------------------------------------------------
Total equity                                        82,538       70,796   80,595
--------------------------------------------------------------------------------
Condensed Consolidated statement of changes in equity


                                                 Unaudited    Unaudited  Audited
                                                  6 months     6 months     Year
                                                     ended        ended    ended
                                         Note 25 September 26 September 27 March
                                                      2011         2010     2011
                                                      £000         £000     £000
--------------------------------------------------------------------------------
Opening equity                                      80,595       70,744   70,744

Profit for the period                               11,313       10,061   23,842

Dividends paid                                    (10,565)      (9,765) (15,041)


Movement in own shares                      5            -          154      154

Exchange differences on translation of
foreign operations                                     655        (837)     (72)

Movement in share based payment reserve
                                                     (439)        (208)      321

Adjustment on share schemes vesting                    979          647      647
--------------------------------------------------------------------------------
Closing equity                                      82,538       70,796   80,595
--------------------------------------------------------------------------------
CONDENSED CONSOLIDATED CASH FLOW STATEMENT


                                                 Unaudited    Unaudited  Audited
                                                  6 months     6 months     Year
                                                     ended        ended    ended
                                         Note 25 September 26 September 27 March
                                                      2011         2010     2011
                                                      £000         £000     £000
--------------------------------------------------------------------------------
Net cash flow from operating activities     9        8,098        9,444   31,137

--------------------------------------------------------------------------------
Investing activities

Investment income                                       69           30       70

Purchase of property, plant and
equipment                                          (1,670)      (1,051)  (3,160)


Proceeds from disposal of property,
plant and equipment                                     23            -       61


Investment                                               -            -     (30)

Loan to joint venture                       5        (800)        (400)  (1,350)
--------------------------------------------------------------------------------
Net cash used in investing activities              (2,378)      (1,421)  (4,409)

--------------------------------------------------------------------------------
Financing activities


Repayments of obligations under  finance
leases                                                (23)          (3)     (22)


Receipt / (repayment) of short-term                      -        4,000  (6,000)
borrowings

Dividends paid                                    (10,565)      (9,765) (15,041)

--------------------------------------------------------------------------------
Net cash used in financing activities             (10,588)      (5,768) (21,063)
--------------------------------------------------------------------------------
Net  (decrease)/increase in cash and
cash equivalents                                   (4,868)        2,255    5,665

Cash and cash equivalents at beginning
of period                                           26,464       20,769   20,769


Effect of foreign exchange rate changes               (85)         (96)       30
--------------------------------------------------------------------------------
Cash and cash equivalents at end of
period                                              21,511       22,928   26,464
--------------------------------------------------------------------------------
NOTES TO CONDENSED FINANCIAL STATEMENTS

1. Accounting policies
These  condensed financial statements have been  prepared in accordance with IAS
34 as  adopted by the  European Union on  an historical cost  basis and the same
accounting  policies,  presentation  methods  and  methods  of  computation  are
followed in this condensed set of financial statements as applied in the group's
latest annual audited financial statements.

Basis of preparation
The  condensed financial statements contained in  this report are unaudited, but
have  been formally reviewed by the auditors  and their report to the company is
set  out on page 24.  The  information shown for the  year ended 27 March 2011,
which is prepared under International Financial Reporting Standards (IFRS), does
not  constitute  statutory  accounts  within  the  meaning of section 434 of the
Companies  Act 2006.  The report  of the auditors  on the statutory accounts for
the year ended 27 March 2011, prepared under IFRS, was unqualified, did not draw
attention  to any  matters by  way of  emphasis and  did not contain a statement
under  sections 498 (2) or (3) of the Companies Act 2006 and has been filed with
the Registrar of Companies.

The directors are satisfied that the group has adequate resources to continue in
operational  existence for the foreseeable future, a period of not less than 12
months  from the date of  this report.  The group's  liquidity and going concern
review can be found in the Management Report on page 9.



2. Segmental reporting, net revenue analysis and cost of sales

(i)   Segmental information

PayPoint  is a service provider for  consumer payment transactions (payments and
receipts)  through various  distribution channels,  involving the  processing of
high  volume transactions, the  management of retail  agents, clients and online
merchants,   the   settlement   of   funds  (collection  and  transmission)  and
transmission of data in secure environments, by the application of technology.

The  application of  technology is  directed on  a group  basis from the group's
executive  team (consisting  of the  Chief Executive  Officer, Finance Director,
Business Development Director and Chief Information Officer) to develop products
across  the  business,  prioritised  on  an  economic  value basis (generally by
product),  rather than on a subsidiary by subsidiary basis.  As the business has
high  fixed operating costs, the company regards  the analysis of net revenue as
the  most reliable indication of contribution on  a product by product basis and
analysis of net revenue is shown in the Management Report.

Whilst  the group  has a  number of  different products,  these do  not meet the
definition of different segments under IFRS 8 and, therefore, the group has only
one  reportable class of business, being a payment service provider for consumer
payment transactions.

(ii) Reconciliation of revenue to net revenue, analysis of cost of sales

Revenue comprises the value of sales (excluding VAT and sales taxes) of products
and services in the normal course of business.

Net  revenue is  revenue less  the cost  of mobile  top-ups and  SIM cards where
PayPoint  is principal  and costs  incurred by  PayPoint which  are recharged to
clients  and merchants.  These  costs include retail  agent commission, merchant
service  charges levied by  card scheme sponsors  and cost for  the provision of
call centres to PayByPhone clients.





Net revenue


                                                  6 months     6 months     Year
                                                     ended        ended    ended
                                              25 September 26 September 27 March
                                                      2011         2010     2011
                                                      £000         £000     £000
--------------------------------------------------------------------------------
Revenue - transaction processing                    95,240       92,135  191,742

               - rental income of ATMs                 683          763    1,491
--------------------------------------------------------------------------------
Revenue                                             95,923       92,898  193,233


less:


Commission payable to retail agents               (33,120)     (34,579) (71,322)

Cost of mobile top-ups and SIM cards as
principal                                         (20,076)     (18,896) (37,696)


Card scheme sponsors' charges and call centre
charges                                              (797)        (695)  (1,492)
--------------------------------------------------------------------------------
Net revenue                                         41,930       38,728   82,723

--------------------------------------------------------------------------------





Cost of sales










                                                  6 months     6 months     Year
                                                     ended        ended    ended
                                              25 September 26 September 27 March
                                                      2011         2010     2011
                                                      £000         £000     £000
--------------------------------------------------------------------------------
Cost of sales


Commission payable to retail agents                 33,120       34,579   71,322

Cost of mobile top-ups and SIM cards as
principal                                           20,076       18,896   37,696


Card scheme sponsors' charges and call centre
charges                                                797          695    1,492

Depreciation and amortisation                        1,652        1,912    3,612

Other                                                4,268        3,997    8,445
--------------------------------------------------------------------------------
Total cost of sales                                 59,913       60,079  122,567
--------------------------------------------------------------------------------





Geographical information:
                          6 months       6 months       Year
                             ended          ended      ended
                      25 September   26 September   27 March
                              2011           2010       2011
                              £000           £000       £000
-------------------------------------------------------------
 Revenue

 UK                         72,136         71,675    148,737

 Ireland                    11,006         11,204     22,475

 Romania                    11,998          9,559     21,036

 North America                 783            460        985
-------------------------------------------------------------
 Total                      95,923         92,898    193,233
-------------------------------------------------------------


 Non-current assets

 UK                         71,642         70,486     71,850

 Ireland                         -             44          -

 Romania                     2,108          1,711      2,329

 North America                 418            254        489
-------------------------------------------------------------
 Total                      74,168         72,495     74,668
-------------------------------------------------------------





3. Tax on profit of ordinary activities

                    6 months       6 months       Year
                       ended          ended      ended
                25 September   26 September   27 March
                        2011           2010       2011
                        £000           £000       £000
-------------------------------------------------------
 Current tax           4,473          4,233     10,565

 Deferred tax                                       49
                          37            263
-------------------------------------------------------
 Total                 4,510          4,496     10,614
-------------------------------------------------------
4.  Earnings per share

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

                                                6 months     6 months       Year
                                                   ended        ended      ended
                                            25 September 26 September   27 March
                                                    2011         2010       2011
                                                    £000         £000       £000
--------------------------------------------------------------------------------
Profit for the period attributable to
equity holders of the parent                      11,329       10,061     23,883
--------------------------------------------------------------------------------
                                               Number of    Number of  Number of
                                                  shares       shares     shares
--------------------------------------------------------------------------------
Weighted average number of shares
(for basic earnings per share)                67,772,332   67,675,017 67,721,190

Potential dilutive ordinary shares:

Deferred share bonus                             157,996      117,565    157,914


--------------------------------------------------------------------------------
Diluted basis                                 67,930,328   67,792,582 67,879,104
--------------------------------------------------------------------------------
Earnings per share
--------------------------------------------
Basic                                              16.7p        14.9p      35.2p

--------------------------------------------
Diluted                                            16.7p        14.8p      35.1p

--------------------------------------------------------------------------------
5. Related party transactions

PayByPhone

During the period, the company subscribed for additional share capital in Verrus
Mobile  Technology Inc for  £1,756,000 and Verrus  UK Limited has subscribed for
additional share capital in Mobile Payment Services SAS for £133,000.

Collect+

During  the period, PayPoint has lent  Drop and Collect Limited (its 50/50 joint
venture  with  Yodel,  which  trades  as  Collect+) £800,000, bringing the total
amount  of the loan outstanding to £3,900,000 (27 March 2011: £3,100,000).  This
has been treated as part of the investment in the joint venture.

At  25 September 2011, there were £28,000 of unrecognised losses in Collect+ (27
March 2011: £Nil).
Investment in OB10

OB10  specialises  in  electronic  invoicing.   PayPoint's  shareholding  at 25
September  2011 represented  1.02% of  the  issued  capital  of  OB10  (27 March
2011: 1.02%).


                          6 months       6 months       Year
                             ended          ended      ended
                      25 September   26 September   27 March
                              2011           2010       2011
                              £000           £000       £000
-------------------------------------------------------------
 Investment at cost            435            405        435
-------------------------------------------------------------

In the view of the directors, the aggregate cost of £435,000 represents the fair
value of the investment in the shares.





David Newlands, who is also Chairman of OB10, Dominic Taylor, George Earle, Eric
Anstee and Nick Wiles hold shareholdings in OB10 as follows:


                                       6 months       6 months       Year
                                          ended          ended      ended
 Directors' shareholding in OB10   25 September   26 September   27 March
                                           2011           2010       2011
                                              %              %          %
--------------------------------------------------------------------------
 David Newlands                            2.87           4.73       2.87

 Dominic Taylor                            1.44           1.42       1.44

 George Earle                              0.40           0.42        0.4

 Nick Wiles                                1.02           1.04       1.02

 Eric Anstee                               0.08           0.08       0.08

Share based payments
During  the period, the Deferred Share Bonus  plan (DSB) and long term incentive
plan  (LTIP) did not vest and, as a  result, no treasury shares were released to
the relevant executive directors and senior managers.


6. Dividend
The  interim dividend of 8.7p (2010: 7.8p) was declared on 24 November 2011 and,
accordingly,  has not been recorded as a liability as at 25 September 2011.  The
total dividend in respect of the year ended 27 March 2011 was 23.4p per share.



7. Cash and cash equivalents

Included  within cash and cash equivalents  is £3.0 million (25 September 2010:
£6.7  million,  27 March  2011: £6.1  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. The decrease in client
cash  results from of a  change in the practice  in respect of ATM monies, where
LINK  recommended  that  monies  owed  to  retailers  be held in trust accounts.
Accordingly,  the  balance  held  in  trade  creditors has decreased by the same
amount.  At 25 September, amounts held in trust, owed to retailers in respect of
ATM  monies amounted to £3.1 million (held by PayPoint, not in trust at 27 March
2011: £3.3 million).

The group operates cash pooling amongst its various bank accounts in the UK and,
therefore, individual accounts can be overdrawn without penalties being incurred
so  long as the overall position is in credit. At 25 September 2011, the group's
cash was £21.5 million (27 March 2011: £26.5 million).



8. Share capital and reserves

                                                  6 months     6 months     Year
                                                     ended        ended    ended
                                              25 September 26 September 27 March
                                                      2011         2010     2011
                                                      £000         £000     £000
--------------------------------------------------------------------------------
Authorised share capital


4,365,352,200 ordinary shares of 1/3p each          14,551       14,551   14,551
--------------------------------------------------------------------------------
Called up, allotted and fully paid share
capital


67,806,973 ordinary shares of 1/3p each                226          226      226
--------------------------------------------------------------------------------
Investment in own shares



At start of period                                   (216)        (370)    (370)

Used on share scheme vesting                             -          154      154
--------------------------------------------------------------------------------
At end of period                                     (216)        (216)    (216)
--------------------------------------------------------------------------------
Share premium

At start of period                                      25           25       25
--------------------------------------------------------------------------------
At end of period                                        25           25       25
--------------------------------------------------------------------------------
Share based payment reserve

At start of period                                   3,005        2,684    2,684

Additions in period                                    540          558    1,088

Released in period                                   (979)        (801)    (801)

Other adjustments                                        -           35       34
--------------------------------------------------------------------------------
At end of period                                     2,566        2,476    3,005
--------------------------------------------------------------------------------
Translation reserve

At start of period                                     471          543      543

Movement in the period                                 655        (837)     (72)
--------------------------------------------------------------------------------
At end of period                                     1,126        (294)      471
--------------------------------------------------------------------------------
Retained earnings


At start of period                                  77,125       67,636   67,636

Profit for the period                               11,313       10,061   23,842

Non-controlling interest  in loss for year
included in above                                       16            -       41

Dividends paid                                    (10,565)      (9,765) (15,041)

Adjustment on share scheme vesting                     979          647      647
--------------------------------------------------------------------------------
At end of period                                    78,868       68,579   77,125
--------------------------------------------------------------------------------
9. Notes to the cash flow statement

                                                  6 months     6 months     Year
                                                     ended        ended    ended
                                              25 September 26 September 27 March
                                                      2011         2010     2011
                                                      £000         £000     £000
--------------------------------------------------------------------------------
Profit before tax                                   15,823       14,557   34,456

Adjustments for items that do not affect
cash:


Depreciation on property, plant and equipment        1,494        1,753    3,295


Amortisation of intangible assets                      158          159      317


Share of losses in joint venture                       935          726    1,541

Net interest (income) / expense                       (64)           26       55

Share based payment expense                            540          593    1,088
--------------------------------------------------------------------------------
Operating cash flows before
movements in working capital                        18,886       17,814   40,752
--------------------------------------------------------------------------------
Increase in inventories                              (497)         (15)      209

(Increase) / decrease in receivables               (1,706)        4,732    6,337

(Decrease) / increase in payables


- client cash                                      (3,128)          224    (686)

- other payables                                     (152)      (7,389)  (4,476)
--------------------------------------------------------------------------------
Cash generated by operations                        13,403       15,366   42,136

Corporation tax paid                               (5,289)      (5,886) (10,950)

Interest and bank charges paid                        (16)         (36)     (49)
--------------------------------------------------------------------------------
Net cash from operating activities                   8,098        9,444   31,137
--------------------------------------------------------------------------------
RESPONSIBILITY STATEMENT

We confirm that to the best of our knowledge:

 a. the  condensed  set  of  financial  statements  which  has  been prepared in
    accordance  with IAS  34 Interim Financial  Reporting gives  a true and fair
    view  of the assets, liabilities, financial position and profit of the group
    as required by DTR 4.2.4R;
 b. the  half yearly financial report includes  a fair review of the information
    required  by DTR 4.2.7R (indication of important events during the first 24
    weeks and description of principal risks and uncertainties for the remaining
    28 weeks of the year); and
 c. the  half yearly financial report includes  a fair review of the information
    required  by  DTR  4.2.8R (disclosure  of  related parties' transactions and
    changes therein).


By order of the board.




 David Newlands     Dominic Taylor
 Chairman           Chief Executive

 24 November 2011


RISKS
PayPoint's  business, financial condition or  operations could be materially and
adversely  affected  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 the crystallisation of some or all of such risks.

Risk area                 Potential impact           Mitigation strategies
--------------------------------------------------------------------------------

Loss or inappropriate     The    group's    business The  group  has established
usage of data             requires  the  appropriate rigorous        information
                          and secure use of consumer security          policies,
                          and     other    sensitive standards,  procedures, and
                          information.        Mobile recruitment   and  training
                          telephone   and  internet- schemes, which are embedded
                          based  electronic commerce throughout   its   business
                          requires     the    secure operations.  The group also
                          transmission            of screens    new    employees
                          confidential   information carefully.        Continued
                          over  public networks, and investments  are made in IT
                          several  of  our  products security    infrastructure,
                          are  accessed  through the including  the  significant
                          internet.         Security use     of     data     and
                          breaches   in   connection communications   encryption
                          with  maintaining data and technology.
                          the    delivery   of   our
                          products    and   services
                          could harm our reputation,
                          business   and   operating
                          results.
--------------------------------------------------------------------------------


Dependence upon third     The group's business model The   group   selects   and
parties to provide data   is  dependent  upon  third negotiates  agreements with
and certain operational   parties     to     provide strategic  suppliers  based
services                  operational  services, the on    criteria    such   as
                          loss    of   which   could delivery    assurance   and
                          significantly  impact  the reliability.  Single points
                          quality  of  our services. of   failure  are  avoided,
                          Similarly,  if one  of our where    practicable    and
                          outsource       providers, economically feasible.
                          including   third  parties
                          with    whom    we    have
                          strategic   relationships,
                          were     to     experience
                          financial  or  operational
                          difficulties,        their
                          services   to   us   would
                          suffer   or  they  may  no
                          longer  be able to provide
                          services  to  us  at  all,
                          significantly    impacting
                          delivery  of  our products
                          or services.
--------------------------------------------------------------------------------


Exposure to legislation   The   group   is   largely The      group's      legal
or regulatory reforms and unregulated  by  financial department   works  closely
risk of non-compliance    services  regulators.  The with  senior  management to
                          group's agents which offer adopt strategies to educate
                          money     transfer     are lawmakers,      regulators,
                          licensed  as Money Service consumer     and    privacy
                          Businesses  by  HMRC.  Our advocates,     and    other
                          internet  and mobile phone stakeholders to support the
                          distribution  channels are public policy debate, where
                          subject  to  Payment  Card appropriate,    to   ensure
                          Industry   Data   Security regulation  does  not  have
                          Standards regulated by the unintended     consequences
                          card  schemes.  Regulatory over  the group's services.
                          reform  could increase the The  group  has  in place a
                          cost    of   the   group's business    ethics   policy
                          operations  or deny access which  requires  compliance
                          to  certain territories in with  local  legislation in
                          the  provision  of certain all   the   territories  in
                          services.   Non-compliance which  the  group operates.
                          with    law,   regulation,  A    central    compliance
                          privacy   or   information department co-ordinates all
                          security  laws  could have compliance  monitoring  and
                          serious   implications  in reporting.   Managing   and
                          cost    and   reputational finance    directors    are
                          damage to the group.       required   to  sign  annual
                                                     compliance statements.
--------------------------------------------------------------------------------


Interruptions in business The   group's  ability  to Comprehensive      business
processes or systems      provide  reliable services continuity     plans    and
                          largely   depends  on  the incident         management
                          efficient              and programmes  are  maintained
                          uninterrupted operation of to  minimise  business  and
                          our    computer    network operational    disruptions,
                          systems,   data  and  call including          pandemic
                          centres,    as   well   as incidents.     The    group
                          maintaining     sufficient maintains  full duplication
                          staffing levels. System or of      all     information
                          network  interruptions, or contained  in databases and
                          the  unavailability of key runs  back-up data centres.
                          staff     or    management Support  arrangements  have
                          resulting  from a pandemic been established with third
                          outbreak,  could delay and party vendors and there are
                          disrupt   our  ability  to strict           standards,
                          develop,     deliver    or procedures   and   training
                          maintain  our products and schemes     for    business
                          services,  causing harm to continuity.
                          our      business      and
                          reputation  and  resulting
                          in  loss  of  customers or
                          revenue.
--------------------------------------------------------------------------------


Dependence on recruitment The  ability of  the group Effective       recruitment
and retention of highly   to meet the demands of the programmes    are   ongoing
skilled personnel         market     and     compete across  all business areas,
                          effectively is, to a large as  well  as  personal  and
                          extent,  dependent  on the career          development
                          skills,   experience   and initiatives.  The executive
                          performance     of     its management  reviews  talent
                          personnel.  Demand is high potential    at   quarterly
                          for    individuals    with meetings.  Compensation and
                          appropriate  knowledge and benefits   programmes   are
                          experience in payments, IT competitive     and    also
                          and  support services. The reviewed regularly.
                          inability    to   attract,
                          motivate   or  retain  key
                          talent    could   have   a
                          serious consequence on the
                          group's ability to service
                          client   commitments   and
                          grow our business.



Risk area                  Potential impact           Mitigation strategies
--------------------------------------------------------------------------------

Exposure to failure to     The group contracts with a The  group seeks  to limit
meet contractual           number  of  large  service exposure  in its contracts
obligations and materially organisations          and but  such  limits  can  be
adverse litigation         governments  for  which it high  and  in  some cases,
                           provides          services obligations are unlimited.
                           essential   to  consumers.  Mitigating   actions  are
                            Failure   to  perform  in taken   where  contractual
                           accordance            with exposures  are  above  the
                           contractual   terms  could norm,  including insurance
                           give   rise   to  material coverage,            where
                           penalties and litigation.  appropriate            and
                                                      economically sustainable.
--------------------------------------------------------------------------------


Exposure  to  country  and The   group's   geographic The  group's  portfolio is
regional  risk (political, footprint   subjects   its diversified  by geography,
financial,       economic, businesses   to  economic, by  product, by sector and
social)  in North America, political  and other risks by   client  in  order  to
United  Kingdom,  Romania, associated            with protect   itself   against
France and Ireland         international   sales  and many        of       these
                           operations.  A  variety of fluctuations,   especially
                           factors, including changes those  that are restricted
                           in a specific country's or to  individual territories
                           region's        political, and     market    sectors,
                           economic   or   regulatory although  the bulk  of its
                           requirements,  as  well as operations   and  revenues
                           the      potential     for are UK based.
                           geopolitical      turmoil,
                           including   terrorism  and
                           war,  could result in loss
                           of  services,  prevent our
                           ability   to   respond  to
                           agreed  service  levels or
                           fulfil  other obligations.
                           These  risks are generally
                           outside the control of the
                           group.
--------------------------------------------------------------------------------


Exposure  to consolidation Consolidation of retailers No  single client accounts
among clients and markets  and  clients  could result for  more  than  9% of the
                           in   reductions   in   the group's  net  revenue, and
                           group's     revenue    and no     single     retailer
                           profits    through   price accounts for more than 8%
                           compression  from combined of    the    group's   net
                           service    agreements   or revenue, which reduces the
                           through  a  reduced number probability     of    this
                           of clients.                potential  risk  having  a
                                                      significant  impact on the
                                                      group's    business.    In
                                                      addition,     the    group
                                                      continues to expand in its
                                                      developing  businesses and
                                                      in cash out (reversing the
                                                      flow  of money through its
                                                      retail networks).
--------------------------------------------------------------------------------


Acquisitions may not meet  The  group's acquisitions, The   group  assesses  all
expectations               strategic   alliances  and acquisitions   rigorously,
                           joint  ventures may result using     both    in-house
                           in financial outcomes that experts  and  professional
                           are     different     than advisers. In addition, the
                           expected.                  group  conducts  extensive
                                                      post-acquisition   reviews
                                                      to  ensure,  as  far as it
                                                      possible, that performance
                                                      remains   consistent  with
                                                      the  acquisition  business
                                                      plan.
--------------------------------------------------------------------------------


Exposure to the            As  the group  operates on The group's financial risk
unpredictability of        an international basis, it management  focuses on the
financial markets (foreign is  exposed to the risk of unpredictability        of
exchange, interest rate    currency  fluctuations and financial    markets   and
and other financial risks) the   unpredictability  of seeks      to     minimise
                           financial markets in which potentially        adverse
                           it operates.               effects   on  the  group's
                                                      financial performance.
--------------------------------------------------------------------------------


Exposure to increasing     The  group  operates  in a The  group is committed to
competition                number    of   geographic, continued   research   and
                           product     and    service investment   in  new  data
                           markets  that  are  highly sources,           people,
                           competitive and subject to technology and products to
                           technological              support    its   strategic
                           developments.  Competitors plan.
                           may  develop  products and
                           services that are superior
                           to  ours  or  that achieve
                           greater  market acceptance
                           than   our   products  and
                           services,    which   could
                           result   in  the  loss  of
                           clients  or  reduction  in
                           revenue.
--------------------------------------------------------------------------------


Loss or infringement of    The     group's    success The      group,      where
intellectual property      depends,   in  part,  upon appropriate  and feasible,
rights                     proprietary technology and relies  upon a combination
                           related       intellectual of    patent,   copyright,
                           property    rights.   Some trademark and trade secret
                           protection can be achieved laws,  as well  as various
                           but, in many cases, little contractual  restrictions,
                           protection can be secured. to protect our proprietary
                           Third  parties  may  claim technology  and  continues
                           that    the    group    is to monitor this situation.
                           infringing           their The  group also vigorously
                           intellectual      property defends  all  third  party
                           rights or our intellectual infringement claims.
                           property  rights  could be
                           infringed     by     third
                           parties.   If  we  do  not
                           enforce     the    group's
                           intellectual      property
                           rights  successfully,  our
                           competitive  position  may
                           suffer,  which  could harm
                           our operating results.
--------------------------------------------------------------------------------


Data centre security       The    group   is   highly The  group's  data centres
breaches                   dependent  on  information are    protected   against
                           technology   networks  and physical   break-ins.  The
                           systems     to    process, group has strict standards
                           transmit     and     store and     procedures     for
                           electronic    information. security.
                           Security  breaches  of our
                           data  centres could create
                           system        disruptions,
                           shutdowns  or unauthorised
                           disclosure of confidential
                           information.



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 25 September
2011, which comprises the condensed consolidated income statement, the condensed
consolidated  statement  of  comprehensive  income,  the  condensed consolidated
balance  sheet, the condensed  consolidated statement of  changes in equity, the
condensed  consolidated cash  flow statement  and related  notes 1 to 9. We have
read  the other  information contained  in the  half-yearly financial report and
considered   whether   it   contains  any  apparent  misstatements  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  (UK  and  Ireland)  2410 "Review  of  Interim
Financial  Information  Performed  by  the  Independent  Auditor of the Entity",
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 it 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 Kingdom's 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.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe
that  the condensed  set of  financial statements  in the  half-yearly financial
report  for the period ended 25 September  2011 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 LLP
Chartered Accountants and Statutory Auditor
London, United Kingdom
24 November 2011




DIRECTORS & KEY CONTACTS


Directors                              Dominic Taylor (Chief Executive)
                                       George Earle (Finance Director)
                                       Tim Watkin-Rees (Business Development
                                       Director)
                                       Eric Anstee*
                                       David Morrison*
                                       David Newlands* (Chairman)
                                       Andrew Robb*
                                       Stephen Rowley*
                                       Nick Wiles *

                                       * 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
                                       Woodsome Park
                                       Fenay Bridge
                                       Huddersfield
                                       West Yorkshire
                                       HD8 0LA
                                       Telephone 0870 162 3100


Press and investor relations enquiries Finsbury
                                       Tenter House
                                       45 Moorfields
                                       London
                                       EC2Y 9AE
                                       Telephone No. 020 7251 3801





ABOUT PAYPOINT
PayPoint  is a leading  international provider of  convenient payments and value
added services to major consumer service organisations in the utility, telecoms,
media,  financial  services,  transport,  retail,  gaming and public sectors. We
handle  over £11  billion from  over 600 million  transactions annually for more
than  5,000 clients and merchants.   We deliver payments  and services through a
uniquely  strong combination  of local  shops, internet  and mobile distribution
channels.

Retail networks
PayPoint  operates branded retail networks in  the UK, Ireland and Romania.  The
network  in the UK  numbers over 23,000 local  shops with our  terminals, or the
terminal  software on retailers' till  systems, (including Co-op, Spar, McColls,
Costcutter, Sainsburys Local, One Stop, Londis and thousands of independents) in
all  parts of the UK. These outlets  process energy 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 and many telecoms and
consumer service companies.

In Romania, the branded retail network numbers over 6,500 outlets across Romania
and  is expanding.  These  outlets process cash  bill payments for utilities and
mobile  phone top-ups. In the  Republic of Ireland, we  have over 500 outlets in
shops and Credit Unions processing mobile top-ups and bill payments.

We  also supply added value  services to our retail  agents to improve the yield
from our network.  In the UK, we offer a consumer parcel drop-off and collection
service  using PayPoint's retail network through  Collect+, a joint venture with
Yodel  This  service  is  already  available  in 4,200 of our convenience retail
agents.  Clients  include  ASOS,  Littlewoods,  New Look, Dorothy Perkins, Very,
Virgin  Media, Asda Direct,  Argos Outlet, JD  Sports Monsoon & Accessorize.  In
addition, in the UK, we have over 2,500 LINK branded ATMs.

Internet channel
PayPoint.net  is an internet payment service provider, linking into all major UK
acquiring banks to deliver secure online credit and debit card payments for over
5,000 web  merchants, including PKR, Betsson, Moneysupermarket.com, Severn Trent
Water,  Ann Summers and British Gas Home  Vend.  We offer a comprehensive set of
products  ranging from  a transaction  gateway through  to a  bureau service, in
which  we take the merchant credit risk and manage settlement for the merchants.
 We  offer  real-time  reporting  for  merchant  transactions and FraudGuard, an
advanced   service   to  mitigate  the  risk  of  fraud  for  card  not  present
transactions.

Mobile channel
PayByPhone   is   a  leading  international  provider  of  services  to  parking
authorities  allowing  consumers  to  use  their  mobile phones to pay for their
parking  by credit or debit  card.  It has contracts  in the UK, Canada, USA and
France.

PayPoint  is  widely  recognised  for  its  leadership in payment systems, smart
technology and consumer service. Our high quality services are backed by a 24/7
operations centre with dual site processing for business continuity.
PayPoint  sustains its  competitive differentiation  by aiming  to meet clients'
payment  needs, not  just through  a wide  spectrum of  payments, but  also with
products  that span payment channels.  For example, PayCash enables cash payment
for  internet transactions  at PayPoint  retail agents  and our new home vending
solutions  allow consumers  to pay  across the  internet as  well as through our
retail  network.  Our  combination of  distribution channels  makes us unique in
this regard.


24 November 2011

Enquiries:

PayPoint plc                                                     01707 600 300

Dominic Taylor, Chief Executive

George Earle, Finance Director


 RLM Finsbury                                                     020 7251 3801

 Rollo Head

 Don Hunter



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




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