Annual Report
For the year ended 25 March 2012 OUR BUSINESS
Contents
Highlights Page
Highlights 1
Chairman’s statement 2
Business review
Chief Executive’s review 3
Key performance indicators 6
Operating and ﬁnancial review 7
Risks 12
Corporate social responsibility 14
Governance
Governance 17
Board of directors 20
Directors’ report 21
Remuneration committee report 23
Statement of directors’ 
responsibilities 
29
Independent auditor’s report to 
the members of PayPoint plc 
30
Financial statements
Consolidated income statement 31
Consolidated statement of 
comprehensive income
31
Consolidated balance sheet 32
Consolidated statement of 
changes in equity
33
Consolidated cash ﬂow 
statement 
33
Company balance sheet 34
Company statement of changes 
in equity
35
Company cash ﬂow statement 35
Notes to the ﬁnancial statements 36
Annual general 
meeting
Notice of annual general meeting 50
Form of proxy 55
Ofﬁcers & professional advisers Inside 
back 
cover
PayPoint is a leading international operator of systems for 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 £12 billion from 659 million transactions annually for more than 6,000 
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 24,000 terminals situated in local shops (including 
Co-op, Spar, McColls, Costcutter, Sainsbury’s Local, One Stop, Asda, Londis and 
thousands of independent outlets) across the UK. Our terminals 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 6,730 terminals located in local 
shops across the country and is expanding.  Our terminals process cash bill payments 
for utilities and mobile phone top-ups. In the Republic of Ireland, we have over 500 
terminals 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 have a consumer parcel drop off and collection service using 
PayPoint’s retail network through Collect+, a joint venture with Yodel. This service is 
available in 4,700 of our convenience retail agents. Clients include ASOS, New Look, 
Boden, House of Fraser, ASDA Direct and Very.  In addition, in the UK, we have over 
2,500 LINK branded ATMs, mainly located in the same sites as our terminals. 
Internet payments
PayPoint.net is an internet payment service provider, linking into 16 major acquiring 
banks in the UK, Europe and North America delivering secure online credit and 
debit card payments for over 5,600 web merchants, including Stan James, 32Red, 
Sportingbet, PKR, Betsson, Moonpig, WHSmith, Moneysupermarket.com, Hungryhouse 
and British Gas Home Vend.  We offer a comprehensive set of products ranging from 
a bureau service, in which we take the merchant credit risk and manage settlement for 
the merchants, to a transaction gateway.  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 payments
PayByPhone is a leading international provider of services to parking authorities which 
enables 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 home vending solutions allow consumers 
to pay across the internet as well as through our retail network. PayPoint plc annual report 2012 1
HIGHLIGHTS
Year ended  
25 March
2012
Year ended
27 March
2011
Increase/
(decrease) %
Revenue £200.0m £193.2m 3.5
Net revenue
1
£90.4m £82.7m 9.3
Gross margin 39.1% 36.6% 2.5ppts
Operating proﬁt £38.9m £36.1m 7.8
Proﬁt before tax £37.2m £34.5m 8.0
Diluted earnings per 
share
39.8p 35.1p 13.4
Dividend per share  
(full year)
26.5p 23.4p 13.2
• Record group transaction volume at 659 million, with growth in  
all channels  
• UK & Ireland retail network transactions increased 9%, with retail 
services continued strong growth of 25%  
• 19 million Romanian bill payment transactions, up 56%, and 
Romanian network now proﬁtable after prior years’ losses 
• 73 million internet transactions processed, up 24% 
• PayByPhone transaction volumes of 17 million, up 23% 
• Collect+ transaction volumes increased to just under 4 million, up 
over 3.5 times on last year 
• Proposed ﬁnal dividend of 17.8p, up 14% on prior year 
• Year end cash of £35.5 million (2011: £26.5 million) with no debt
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
1
2009 2010 2011 2012
77.4 77.4 82.7 90.4
Operating proﬁt
33.7 34.1 36.1 38.9
2009 2010 2011 2012
Dividend per share
2009 2010 2011 2012
17.6 21.8 23.4 26.5 2 PayPoint plc annual report 2012
CHAIRMAN’S STATEMENT
I am pleased to report the growth in earnings continued, as a result of good performance 
by our UK retail network and the turnaround to proﬁt in our Romanian network.  
Although losses in Collect+ and PayByPhone have increased, growth in Collect+ remained 
strong with commercial deliveries and consumer to consumer deliveries contributing well 
and we have achieved success in winning new business in PayByPhone.  We have made 
progress in technology, with preparation towards the introduction of the Simple Payment 
service (replacing cheques, due for introduction later this year) for the Department for 
Work and Pensions (DWP), installing virtual terminals, completing the development of a 
broadband communications solution for faster transactions and rolling out new services for 
our retail network, including cash out and money transfer.
In the UK retail network, retail services delivered healthy growth, although mobile top-ups 
continued to decline.  The introduction of the Simple Payment service for the DWP should 
help fuel future growth.
We have made progress in developing transaction reporting tools for PayPoint.net which 
should go live in the second half of the current year and help to secure merchants in 
the gaming sector and win new business.  We expect to develop this reporting tool for 
extension into other channels and markets.  Further investment in a new transaction 
processing platform will also bring more functionality and ﬂexibility in multi-currency, more 
frequent settlement and transaction optimisation.
We have continued to invest in our Romanian retail network by increasing our full service 
terminal estate by 735 sites.  We accept bill payments for 36 clients and transaction 
volumes have increased by 56%. We have started to introduce money transfer under our 
contract with Western Union
®
.
We have extended our parcels service through Collect+, our joint venture with Yodel, 
across our UK retail network. Momentum is strong, with considerable interest among 
major high street and internet retailers and internet marketplaces.  We have over 4,700 
sites handling Collect+ parcels and over 125 online and multichannel retailers live, 
including some of the most respected customer service leaders, including ASOS, New 
Look, Boden, House of Fraser, ASDA Direct and Very.  During the year, parcel volumes  
were up over 3.5 times and, based on March 2012, we handle a run rate of 5 million 
parcels per annum.
In PayByPhone, we have increased the resources in sales, marketing and delivery more than 
we originally planned, to address the increased opportunity.  New mobile phone apps have 
been introduced, making registration and parking easier and we have launched one of 
the largest deployments in near ﬁeld communications in San Francisco.  The costs of the 
increased sales and technology spend have come ahead of the revenue as installations lag sales 
success.  We will continue to invest to stay at the leading edge of this fast moving market.
The combination of sound, proﬁtable growth in both the UK retail network and our 
internet business, substantive progress towards proﬁtable growth in our Romanian retail 
network, gathering momentum in Collect+ and proper resourcing of PayByPhone, have 
positioned the group for further substantial growth.  We are proposing a ﬁnal dividend of 
17.8 pence per share, making a total for the year of 26.5 pence, an increase of 13.2 per 
cent, marking another year of uninterrupted dividend growth since our listing.
For the current ﬁnancial year, trading is in line with the company’s expectations.  This 
is an important year for investment in infrastructure and tools to ensure the efﬁcient 
delivery of future growth.  Our established business (UK and Irish retail networks and 
internet payments) is strong, with further opportunities to enhance retail yield through 
the introduction of new technology and services.  In addition, improvements in our service 
offering to online merchants will provide opportunities for growth. We will beneﬁt from 
rolling out services in our developing business (Collect+, PayByPhone and the Romanian 
retail network), growing our market share and improving proﬁtability.  Together, our 
businesses provide a solid foundation to deliver increasing value for our shareholders.
MyPayPoint 
MyPayPoint, a new extranet, makes it 
easier for agents to keep track of their 
PayPoint payments, commissions and 
other documents. The new system is 
accessed securely over the internet and 
allows agents to check weekly statements 
and payments records, as well as accessing 
commonly used forms, FAQs and a library 
of bulletins and communications normally 
sent by post.  MyPayPoint also has a real 
environmental advantage as, in time, 
it will eliminate the 1 million sheets or 
approximately 5 tonnes of paper used 
annually for sending weekly statements  
to agents.
“Online statements are a clear priority for 
me. With the unreliability of the post and 
paper-based ﬁnancial documents easily 
being lost or misplaced in a busy shop, I 
am delighted that we now have a system 
that makes them available anywhere, any 
time I want them.”  
Mani Dhesi, Nisa Retail, Glasgow
Collect+
Collect+ has extended its service to enable 
consumers and small businesses to send 
parcels to each other and to pick up goods 
bought from retailers online from their 
local Collect+ shop.  Major online retailers 
already providing their customers with this 
option include House of Fraser, ASOS and 
Very, for whom up to one in ﬁve packages 
are now being delivered to Collect+ stores 
for customer collection.
“Consumers are increasingly looking for 
delivery options that ﬁt in with their busy 
lives and our online sales have beneﬁted 
from providing our customers with the 
option to have their purchases delivered to 
a Collect+ shop.”  
Keith Basnett, Group Chief Operating 
Ofﬁcer, Shop Direct Group
David Newlands
24 May 2012 PayPoint plc annual report 2012 3
CHIEF EXECUTIVE’S REVIEW
PayPoint.net ﬁghts online fraud
FraudGuard 4 from PayPoint.net is one of the 
most powerful defences available to online 
businesses against online fraud, ID theft and 
exposure to global fraud risks. Its ﬂexible 
real-time functionality enables them to make 
quick and safe decisions to accept business 
and revenue, according to a predetermined 
acceptable level of risk.  Clients can verify 
and process legitimate transactions without 
delay while tracking signs of possible ID theft, 
such as mis-use or multiple use of a card, IP 
address, email address or billing address.
“As a leading online gaming provider, 
the ability to accept or deny transactions 
immediately is vital.  Our customers are using 
a real-time service so we have to make quick 
decisions as to whether payments are genuine 
or not.  We rely on FraudGuard 4 to automate 
the decision making as far as possible, while 
minimising our exposure to risk. FraudGuard’s 
ﬂexibility in assessing risk helps us to accept 
more payments and improve our service to 
customers.” 
Motie Bring, Head of Transaction Services, PKR
Western Union
®
 in Romania
PayPoint Romania’s agents are now able to 
offer their customers a money transfer service 
via Western Union
®
 on PayPoint’s multi-
function terminal.  Romanian consumers can 
now go to their local convenience store to 
send and receive money in the local currency.  
Being able to offer Western Union
®
 is a major 
beneﬁt for PayPoint retailers.  Not only can 
they provide a further valuable local service 
to their customers, but it also earns additional 
commission income and generates incremental 
footfall by attracting new customers.
“Joining forces with PayPoint in Romania will 
ensure that the service is available to more 
people at the most convenient time and 
location, making it more convenient to send 
money to loved ones abroad and to receive 
payments sent to Romania.”
Declan Daly, Regional Vice President,  
Central Europe, Western Union
®
PayPoint has had another good year, in which we have delivered earnings growth 
in line with market expectations and our strategic plans.  Our UK and Irish retail 
business has continued to grow and remains highly proﬁtable and cash generative, our 
Romanian business is now proﬁtable with good prospects for further growth and our 
Collect+ and PayByPhone businesses have made good progress.
The essence of the group’s capability is the processing of high volume, consumer 
transactions, whether for payment or value added services, for example, parcel 
fulﬁlment, through a ﬂexible platform, adding value to clients in speciﬁc vertical 
markets.  In the case of payments, these are low value transactions and embrace retail, 
internet and mobile technologies and include money ﬂowing to, as well as from, the 
consumer.  The platform is connected to retailers and internet merchants across a 
number of different geographies, to whom we seek to add value through the provision 
of relevant additional services.  Core to our proposition is to provide consumers with 
greater convenience.   We are able to grow the business through targeting more clients 
in vertical markets, more verticals, more retailers and more merchants, driving more 
consumers to use our services.
Our strategy:
Our strategy remains unchanged.  Since the ﬂotation of the original UK & Irish retail 
network business in 2004, PayPoint has evolved into a specialist payments company. 
Our strategy has four key elements:
• Breadth of payments capability
The acceptance of a broad range of payments (cash, cards, e-money, etc.) through 
multiple channels (retail, internet and mobile phone)
• Strength in vertical markets
Targeting sectors with high volume, recurring consumer payments
• Value added content/services
Providing additional content or services to the payment channels and chosen vertical 
markets to create differentiation
• Geographic reach
Identifying regions with attractive payment dynamics to create value through 
exporting our know-how
PayPoint has succeeded in introducing this broad payment hub capability to clients 
in a number of key vertical markets (energy/utilities, telecoms and media, ﬁnancial, 
transport/parking, public sector/social housing, retail and gaming/leisure), with the 
ability to process payments using the consumer’s preferred method of payment 
and channel.  The delivery of payments from consumers to our clients encompasses 
transaction authorisation, processing, clearing and settlement and interfacing to banks, 
card schemes/networks and other ﬁnancial intermediaries.  PayPoint also provides 
value added content and services within each channel, to differentiate the PayPoint 
proposition from those of its competitors. 
In our retail channels, differentiation is achieved through providing retailers with a 
broad range of retail services, including ATMs, credit and debit card processing, parcel 
collections and returns service, SIM cards and international money transfer.  The high 
quality of service delivery to retailers is also critical to differentiation.
In the internet channel, differentiation to merchants is driven through a widening base 
of acquiring bank relationships (increasingly in different geographies) and payment 
types, together with the quality of our fraud screening and reporting products. 
Our mobile channel, delivered through PayByPhone, will similarly drive differentiation 
through its ability to leverage our cash retail payment capability and internet payment 
services, combined with improving the consumer experience.
The extension of our geographic reach is progressing. 4 PayPoint plc annual report 2012
CHIEF EXECUTIVE’S REVIEW continued
Growth and prospectslo
Technology
Technology is at the heart of our service delivery and differentiation in all our 
businesses and we plan to invest heavily in this area.  We see increasing opportunities 
to integrate our payment channel technologies to provide better, more efﬁcient and 
complete solutions to our clients across a single platform, irrespective of whether 
their customer has paid in a store, online or on their phone.  As our businesses grow, 
investments in improved reporting and retail agent management systems will continue 
to enhance our ability to provide customers with a unique service and will contribute to 
further proﬁtable growth.  The reporting system under development for internet clients 
will be developed further for extension to other clients across all distribution channels.  
As we invest in this more integrated solution, we also plan to consolidate our data 
centres on two hosted sites.    
In our UK retail network, we have rolled out our virtual terminal to multiple retailers -  
a software variant of our terminal which is integrated into the retailers’ till systems, in 
conjunction with a bespoke PayPoint plug-in reader to provide the full functionality 
of the physical terminal more efﬁciently and at lower cost. In-store, this allows our 
service to be available at every check-out lane, eliminates the need for reconciliation 
with the main till system, accelerates transaction speed and saves communications and 
till roll costs.  Over 2,600 sites now have this technology in retailers such as McColls 
and One Stop and these stores have beneﬁtted not only from increased efﬁciency, but 
also an uplift in volume.  Where existing terminals are replaced by virtual terminals, we 
refurbish them for deployment in Romania.
An increasing number of our terminals are being connected through broadband links 
rather than dial-up, dramatically improving the speed of online transactions and the 
breadth of services that we can potentially offer the retailer in-store.  The transition to 
broadband links will continue through the year. 
We have introduced an agent extranet for our UK agents.  Currently, agent invoicing 
and ﬁnancial details for each agent are available using this facility.  We plan to roll this 
out to all agents, which will reduce paper, postage and some incoming agent calls to 
the call centre.  We will further develop the agent extranet as a means of marketing to 
and communicating with our retail agents. 
Development work on cash out services, the Simple Payment service for the DWP , is at 
an advanced stage and will be ready for implementation during the course of this year.  
As a result, our retailer settlement systems will be more streamlined, reducing exposure 
to retailers and will allow the cash balances we generate through bill payment to be 
recycled back to consumers, saving retailers bank charges and increasing in-store spend.
In Romania, we have completed the development of our money transfer proposition on 
the terminal and the service is now live and showing encouraging growth. 
In the internet channel, we are developing substantial improvements to our services to 
online merchants.  These include transaction optimisation, an advanced management 
and reporting solution, a PCI compliance offering and additional payment methods, 
which should provide signiﬁcant competitive advantage.  PayByPhone is introducing a 
new, consumer friendly mobile web parking registration and payment system.
UK retail network
We are focused on providing increased retail services through our retail networks and 
have increased the size of the ﬁeld sales force by 50 per cent to help deliver growth 
in revenue.  Net revenues from these services increased 28 per cent last year.  These 
services include parcels, ATMs, SIM cards, debit and credit card acceptance, advertising 
on till receipts and money transfer.  We will continue to invest in the retail network 
with technologies such as our virtual terminal and broadband communication links, 
and in new ATMs to optimise the growth of existing and future retail services.  We 
are planning to launch our Simple Payment service for the DWP (to replace cheque 
beneﬁt payments later in the year), which will provide us with a larger scale cash out 
opportunity to supplement existing cash out schemes.  
Romanian retail network
The Romanian network is now proﬁtable, driven by the optimisation of existing sites 
and increasing bill payment volumes and which we expect to continue as we market 
to consumers.  The launch of money transfer, as the ﬁrst retail service proposition, is 
showing early signs of success as Romanians opt for the convenience provided by their 
local shop instead of travelling to a bank.
Direct partnerships with the  
housing sector
PayPoint accepts cash payments for more 
than 750 housing associations across the UK, 
as well as over 260 local authorities.  Having 
traditionally partnered with third parties to 
work with these organisations, PayPoint has 
developed the facility to become their exclusive 
payment services provider and is already 
handling all cash payments made by some 
90,000 housing association tenants for rent, 
repairs and other services.  Building further on 
the synergies offered by group companies, we 
also enable tenants to make their payments 
over the internet using a new online payments 
website, developed by PayPoint and powered 
by PayPoint.net. 
 
With more extensive coverage throughout 
the UK of any retail network and a familiar 
brand to many of their residents and 
tenants, PayPoint is the most accessible and 
cost-effective partner for local authorities 
and housing associations to manage cash 
collections. 
Home top-up for online meter 
payments
Utility customers with prepayment meters have 
traditionally gone to a PayPoint agent for top-
ups, using a plastic card or key, which is then 
inserted into the meter.  However, as some 
meter customers do not need to pay in cash 
and increasingly have access to e-commerce, 
PayPoint has developed a new service in 
partnership with its utility clients and meter 
manufacturers Itron and Siemens for those 
customers with ‘home top-up’ units to top up 
certain electricity and gas meters by visiting 
the clients’ websites to make a debit card 
payment at any time of day or night. They can 
also use the system to monitor their usage. 
The payment processing capability is managed 
by PayPoint.net.
 
Home Energy customers often highlight 
home top-up as one of the main reasons 
they stay with their current supplier and, as 
a result, churn of home top-up customers is 
signiﬁcantly lower than other top-up standard 
pay as you go customers. PayPoint plc annual report 2012 5
Internet
Alongside the introduction of the new integrated systems referred to under Technology 
above, we expect to sign up further new merchants and to beneﬁt from the launch of 
a new enterprise level, real-time data reporting platform.  This will offer PayPoint.net 
the opportunity to differentiate further its payments capability to merchants both in the 
UK and abroad and will add proﬁtable growth.
PayByPhone
PayByPhone, one of the worldwide leaders in mobile phone parking, has the potential 
to replace traditional parking meters or provide a system for payment for parking 
where none exists in many major cities around the world.  We have added signiﬁcant 
sales and development resources and we are currently tendering to several large 
parking authorities as well as a large number of smaller opportunities in the UK, 
France and North America. Sales lead times are extended in this market and somewhat 
unpredictable, but our momentum continues to be encouraging, with wins in Hackney, 
Lambeth, City of London, Swindon, Coral Gables in Florida and Ottawa in Canada 
amongst others over the past year.  We have also made encouraging progress in 
applying our mobile payment capability beyond parking, in winning a tolling contract 
for a major road bridge in Canada, further bicycle rental contracts in France and an 
integration into Veolia’s French bus ticketing system.
We continue to focus on improving the consumer experience through mobile phone 
apps and improved registration processes as well as reducing the cost to serve.  The 
launch of our contactless NFC parking solution in San Francisco was one of the world’s 
largest implementations of NFC technology and is being adopted by other cities in 
North America and Europe.  PayByPhone is now integrated into PayPoint.net and is 
now able to beneﬁt from the latter’s payment processing capability.  We have spent 
more than we anticipated in addressing the sales opportunities, including expenditure 
on technology.  This expenditure has been rewarded by 66 new business wins, more 
than any of our competitors, but the revenue lags the win as it takes time to contract, 
install and ramp up the service.  We will continue to invest at this high rate, the 
consequence of which will be a further loss in the current year.
Collect+
Our parcels joint venture (50:50) with Yodel has continued to progress strongly, with 
substantial endorsement from the online retailing community and resulting growth in 
transaction volumes.  Collect+ has been recognised in prestigious industry awards for 
its innovative parcel delivery and returns service.  Yodel’s current integration of two 
businesses into one completes in the ﬁrst half of our current reporting year.  Collect+ 
processes over ﬁve million transactions per annum (based on transaction volumes in 
March 2012) and is making good progress towards breakeven volume.
Our plans for the current year
We will continue to make further progress in the four elements of our strategy to 
increase shareholder value: more payment/channel options, specialisation in vertical 
markets, value added services and geographic reach.  We plan to make good progress 
in both the established and developing businesses, notably through continuing growth 
of retail services (in both the UK and Romania) and internet payments and by adding 
new customers to Collect+ and PayByPhone.
Early beneﬁts from the synergy between our various business streams, with more 
clients in our selected verticals taking multi-channel services have encouraged us to 
push this dynamic more strongly as newer business areas bed in and system platforms 
can be developed across the group.  We have strengthened the management in our 
UK retail network with the appointment of a UK Managing Director and the business is 
already beneﬁting from his increased level of focus. 
PayPoint is one of the companies best placed to make further gains in the fast moving 
payment industry, particularly in e-commerce, and has a market leading position in 
retail services, on which we intend to build.
Dominic Taylor
Chief Executive
24 May 2012
CHIEF EXECUTIVE’S REVIEW continued
NFC-enabled cashless parking with 
PayByPhone 
PayByPhone has launched one of the largest 
deployments of near ﬁeld communications 
(NFC) payment solutions in the world.  The 
San Francisco Municipal Transportation 
Agency (SFMTA) selected PayByPhone to give 
drivers the option automatically to launch the 
PayByPhone app with NFC-enabled mobile 
phones.  The PayByPhone NFC stickers on the 
city’s 30,800 parking meters have a passive 
electronic chip that does not require a battery 
and stores information that can be read 
wirelessly by any NFC-enabled phone.  The 
motorist simply waves the phone close to the 
sticker and the system recognises the user and 
identiﬁes the individual parking location. 
“It is our aim to offer greater choice and 
convenience to drivers in San Francisco. 
Drivers no longer have to worry about 
carrying sufﬁcient coins; they get text message 
reminders before parking time expires and can 
add time by phone without returning  
to their car when they have not exceeded any 
maximum stay restrictions.  Including  
NFC technology in this service allows us to 
take advantage of the expected beneﬁts in  
the future.” 
PayPoint Rapid
PayPoint has introduced a new payments 
terminal which speeds up transaction times 
using a standard broadband connection, 
leading to improved customer service.  The 
PayPoint Rapid terminal beneﬁts busy shops 
doing a high volume of mobile top-ups and 
other online transactions such as Western 
Union
®
, prepaid cards and vouchers, by 
speeding up transactions and reducing the 
time spent by staff putting them through  
the terminal.  
PayPoint Rapid is designed to improve 
the overall service PayPoint provides to its 
agents.  It is complemented by an exclusive 
discounted broadband deal, which PayPoint 
has negotiated on behalf of its agents, to help 
them access the latest technology at the same 
time as reducing their operating costs.   6 PayPoint plc annual report 2012
KEY PERFORMANCE INDICATORS (KPIs)
In order to realise its strategic aims, PayPoint has identiﬁed areas of strategic focus and records a number of KPIs to measure progress 
against them.  Whilst these KPIs are helpful in measuring the group’s performance, they are not exhaustive and the group uses many 
other measures to monitor progress.
Measuring our performance
Strategic focus KPI Description 2012 2011
Shareholder return Earnings per share 
(diluted)
Proﬁt after tax attributable to equity holders of the 
parent divided by the weighted average number of 
ordinary shares in issue during the year (including 
the impact of shares which are likely to be issued 
under share schemes)
39.8p 35.1p
Dividends per share Proposed ﬁnal dividend and interim dividend 
divided by the number of fully paid shares at the 
end of the year
26.5p 23.4p
Economic proﬁt Operating proﬁt after tax and a charge for capital 
employed based upon the group’s cost of capital
£20.4 million £17.4 million
Growth Retail networks 
transactions
Number of transactions processed in the year on our 
terminals, ATMs and on our retailers’ EPoS systems
569 million 517 million
Internet transactions Number of transactions processed in the year by 
PayPoint.net
73 million 59 million
PayByPhone Number of PayByPhone transactions processed in 
the year
17 million 14 million
Transaction value The value of transactions processed via our 
terminals, retailers’ EPoS systems, internet 
merchants, ATMs, PayByPhone and the sale of 
other retail services
£12.1 billion £10.6 billion
Net revenue
1
Revenue less: commissions paid to retail agents; 
the cost of mobile top-ups and SIM cards where 
PayPoint is principal; acquiring bank charges and 
call centre costs recharged to clients
£90 million £83 million
Operating margin Operating proﬁt including our share of joint 
venture results as a percentage of net revenue
1
41.0% 41.7%
Asset optimisation Return on capital 
employed 
T otal operating proﬁt for the year divided by average 
month end capital employed excluding cash
58% 53%
People Labour turnover Number of permanent employees who left  
during the year divided by average total 
permanent employees:
  
UK & Ireland 26% 25%
Rest of world 28% 35%
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. PayPoint plc annual report 2012 7
OPERATING AND FINANCIAL REVIEW
The operating and ﬁnancial review complies with the guidance 
set out in the Accounting Standards Board’s Reporting 
Statement: Operating and Financial Review and is prepared 
solely to provide additional information to shareholders as 
a body to assess PayPoint’s strategies and their potential to 
succeed. It should not be relied upon for any other purpose. 
It contains forward looking statements that have been made 
by the directors in good faith, based on the information 
available at the time of approval of the annual report and such 
statements should be treated with caution due to the inherent 
uncertainties, including both economic and business risk factors, 
underlying any such forward looking information.
Our key performance indicators are shown on page 6.
PayPoint is a payment service provider for consumer and 
business payment transactions and, as such, has only one 
operating segment.  However, reﬂection on various facets helps 
explanation of the execution of our strategy in developing the 
group and, accordingly, in addition to the analysis of the number 
and value of transactions, revenue and net revenue, we have 
shown an analysis which separates our developing business (bill 
payment and top-ups in Romania, Collect+ and PayByPhone), 
from our established business (the UK and Irish retail networks 
and internet channel).
In addition, we have analysed our results by channel as follows:
Retail networks
Bill and general (prepaid energy, bills and transport tickets)
Top-ups (mobile, prepaid cards, phone cards and  
The Health Lottery)
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, 
conﬁguration and customisation and settlement of claims)
Growth opportunities include: retail services in the UK retail 
network; new merchants for internet payments; the expansion 
of the retail network and new retail services in Romania; 
new parking contracts and driving consumer adoption for 
PayByPhone and building and developing Collect+.
OPERATING REVIEW
Transactions have increased to 659 million (2011: 590 million), 
up 11% in the established business and 34% in the  
developing business.
Transaction value increased to £12.1 billion (2011:  
£10.6 billion), up 13% in the established business and up 54% 
in the developing business.
Revenue in the developing business was up 24%, with the 
strongest contribution coming from Collect+.  Established 
business revenue was up 2%, with growth in UK bill and 
general, retail services and internet payments offsetting the 
reduction in mobile top-ups. 
Net revenue in the developing business was up 44%, with 
strong growth in Romanian bill payment, Collect+ and 
PayByPhone.  Established business net revenue was up 9% 
despite being held back by the decline in mobile volumes. 
Operating proﬁt in the established business was £41.2 million 
(2011: £38.4 million) and the operating loss, including our share 
of Collect+, in the developing business was £4.2 million (2011: 
£3.9 million), an increase of £0.3 million.  The small increase in 
the loss in the developing business is the result of the increased 
loss in the year in Collect+ and PayByPhone offset by an 
improved performance in Romania.
Established 
business
1
Developing 
business
2
Total
Adjust
Collect+
3
As 
reported
Transactions
million
2012 618 41 659 - 659
2011 559 31 590 - 590
Transaction  
value
£million
2012 11,682 438 12,120 - 12,120
2011 10,316 285 10,601 - 10,601
Revenue
£000
2012 171,008 33,036 204,044 (4,015) 200,029
2011 167,700 26,535 194,235 (1,002) 193,233
Net 
revenue
4
£000
2012 83,598 9,412 93,010 (2,568) 90,442
2011 76,811 6,539 83,350 (627) 82,723
1. Established business includes the UK and Irish retail networks and the internet payment channel.
2. Developing business includes Romania, PayByPhone and for Collect+, revenue and net revenue only.
3. Collect+ revenue and net revenue is included in developing business revenue and net revenue, but as Collect+ is reported in the consolidated income statement on a proﬁt before 
tax only basis, revenue and net revenue needs to be eliminated to reconcile to reported revenue and net revenue.
4. 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. 8 PayPoint plc annual report 2012
OPERATING AND FINANCIAL REVIEW continued
Analysis of transactions
There has been growth in transaction volumes across all services, 
despite the continued decline in mobile top-ups in all territories 
except Romania, where a small increase was driven by the 
increase in terminals. Mobile operators are offering more value 
for the same or lower cost per top-up to consumers, resulting in 
fewer transactions and, in the UK in particular, mobile operators 
promote monthly contracts over prepay to migrate prepaid 
consumers to contracts.
Transactions
Year
ended 
25 March
2012
‘000
Year
ended 
27 March
2011
‘000
Increase/
(decrease)
%
Retail networks
  Bill and general 383,332 350,970 9.2
  Top-ups 125,163 117,670 6.4
  Retail services 60,493 48,425 24.9
Internet payments 72,820 58,544 24.4
PayByPhone 17,307 14,059 23.1
Total 659,115 589,668 11.8
UK & Ireland bill and general transactions increased by 8% 
despite the relatively mild winter compared to the previous year.  
The increase was due to a 12% rise in prepaid energy volumes 
driven by the impact of the British Gas contract, under which 
PayPoint became one of only two providers in July 2011, offset 
by a decline in post bill payment.
Bill payments in Romania have continued to grow, as more 
terminal sites are rolled out and consumers become aware of 
the service. In the year, we processed just under 19 million bill 
payment transactions, an increase of 56% on the previous year.
Top-ups increased versus last year despite mobile top-ups in UK 
and Ireland being down 10% overall, the same as last year. The 
overall growth was driven by the introduction of The Health 
Lottery, for which 18 million transactions were processed, and a 
small increase in Romanian mobile top-ups resulting from retail 
network growth.  E-money top-ups were also ahead compared 
to last year.
Retail services transaction volumes have increased across most 
products including ATMs, debit/credit, parcels and SIMs. Debit/
credit card transactions were up 25% on last year.  We sold 
just under one million SIMs in the year (2011: 700,000). Parcel 
volumes grew over 3.5 times on last year to just over 3.8 million 
transactions.
Internet transactions of 73 million were up 24% on last year, 
as we continued to add new merchants and existing merchants 
grew organically.
PayByPhone transactions increased by 23% on last year.  
PayByPhone continues to see the number of tenders issued by 
councils and parking authorities increase as they look for a more 
cost effective method for collecting parking charges.
Transaction value
There has been substantial growth in the value paid by 
consumers (transaction value), primarily in bill and general 
payments, internet payments and PayByPhone. 
 
Year
ended 
25 March
2012
£000
Year
ended 
27 March
2011
£000
Increase/
(decrease)
%
Retail networks
  Bill and general 6,757,902 6,198,171 9.0
  Top-ups 1,071,947 1,114,809 (3.8)
  Retail services 426,527 394,727 8.1
Internet payments 3,796,569 2,838,147 33.8
PayByPhone 66,949 55,020 21.7
Total 12,119,894 10,600,874 14.3
Growth in bill and general transaction value reﬂected the 
increase in transactions with the average transaction value 
similar to last year.
The reduction in top-ups transaction value reﬂects the overall 
decline in the prepay mobile market.  The additional transaction 
value of The Health Lottery transactions was not enough to 
offset the overall drop as the average value per transaction is 
lower than that of mobile top-ups.
Retail services transaction value is relatively small as SIM sales are 
low value and debit/credit transactions (where the card sponsor 
settles direct with our retailer), parcel transactions and terminal 
advertising have no associated transaction value.
Internet transaction value has increased by 34% as a 
consequence of the increase in the number of transactions, 
combined with higher average transaction value at £52.14 
(2011: £48.47).
PayByPhone value reﬂects the impact of the delivery of the new 
contracts with average transaction value broadly similar to last year.  PayPoint plc annual report 2012 9
Revenue
Year
ended 
25 March
2012
£000
Year
ended 
27 March
2011
£000
Increase/
(decrease)
%
Retail networks
  Bill and general 62,990 57,889 8.8
  Top-ups 94,450 98,843 (4.4)
  Retail services 23,659 19,602 20.7
Internet payments 9,670 8,939 8.2
PayByPhone 4,751 4,501 5.6
Other 4,509 3,459 30.4
Total 200,029 193,233 3.5
The growth in bill and general payments revenue reﬂected 
the growth in UK prepaid energy volumes and Romanian bill 
payments (driven by growth in terminal sites and increased 
consumer awareness).
In Romania and Ireland, PayPoint acts as principal for mobile 
phone top-ups for which the sales value is recorded as revenue, 
and the purchase cost is recorded in cost of sales. In the UK, 
PayPoint acts as an agent and only the commission income 
is recorded as revenue.  In the UK and Ireland, mobile top-up 
revenues have declined broadly in line with transaction volumes.  
The Health Lottery, e-money top-up and Romanian mobile top-
up revenue increased.
Retail services revenue grew strongly across several products as 
more retailers took the additional services on offer, including 
parcels, SIMs, debit/credit and money transfer.  Revenue has 
grown more slowly than transactions as not all services earn 
revenue based on transactions.
Internet payment revenue growth was less than transaction and 
value growth due to high transaction growth in some large, key 
merchants who have lower average transaction revenues.
PayByPhone revenue increased less than transaction and value 
growth predominantly due to the reduction in call centre 
income which is recharged to some clients.  The reduction in 
call centre recharges reﬂects the drive to shift customer volume 
away from the costly interface of an operator telephone call to a 
web-based mobile application or interactive voice response.
Other revenue includes rechargeable software development work, 
conﬁguration and customisation, early settlement and claims.
OPERATING AND FINANCIAL REVIEW continued
Net revenue
Net revenue is revenue less retail agent commission, merchant 
service charges levied by card scheme sponsors, costs of SIM 
cards, recharges for the provision of call centres for PayByPhone 
clients and the purchase value of Romanian and Irish mobile 
top-ups for which we act as principal.
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.
Year
ended 
25 March
2012
£000
Year
ended 
27 March
2011
£000
Increase/
(decrease)
%
Retail networks
  Bill and general 36,379 33,806 7.6
  Top-ups 22,756 22,683 0.3
  Retail services 13,844 10,827 27.9
Internet payments 9,670 8,939 8.2
PayByPhone 3,284 3,009 9.1
Other 4,509 3,459 30.4
Total 90,442 82,723 9.3
Bill and general net revenue increased less than revenue as 
prepaid energy transactions have lower average net revenue 
than other transactions.
Top-ups net revenue was broadly similar to the prior year as a 
result of the introduction of The Health Lottery and increased 
e-money top-ups.
Retail services net revenue has increased more than revenue 
as there is no commission payable on some services, including 
debit/credit transactions and receipt advertising.
Internet net revenue is the same as revenue because merchant 
service charges are levied directly to our merchants by the card 
scheme sponsors.
Collect+ 
During the year, we processed over 3.8 million transactions 
for 125 clients (2011: 1.1 million transactions for 30 clients). 
Transaction volumes continue to grow and our annual run rate, 
based on March 2012, is now over 5 million transactions. 10 PayPoint plc annual report 2012
OPERATING AND FINANCIAL REVIEW continued
Network growth 
Terminal sites overall have increased by 6% to 31,117.
In the UK and Ireland, sites increased by 874, an increase of 
4%. During the year, we continued to roll out our new EPoS 
integrated solution to 2,600 retailers, which combines a virtual 
terminal through software in the retailer’s till system with plug-in 
reader to provide full functionality at lower costs. As well as 
enhancing our service to retailers, this frees terminals for use  
in Romania. 
In Romania, we installed 735 net new full service terminals in 
the year.
In our internet channel, we added over 450 new merchants 
during the year, an increase of almost 9%.
We continued to add more Collect+ sites as transaction volumes 
increased and as retailers recognised the beneﬁts of offering  
this service.
Analysis of sites
 
25 March
2012
27 March
2011
Increase/
(decrease)
%
UK & Ireland terminal sites 24,387 23,513 3.7
Romania terminal sites 6,730 5,995 12.3
Total terminal sites 31,117 29,508 5.5
Internet merchants 5,670 5,213 8.8
Collect+ sites 4,721 3,668 28.7
FINANCIAL REVIEW
Income statement
Revenue for the year was 3.5% higher at £200 million (2011: 
£193 million). The increase results from growth across the 
majority of services.  Cost of sales reduced to £122 million 
(2011: £123 million). Agents’ commission decreased to 
£70 million (2011: £71 million) due to fewer mobile top-up 
transactions, which pay a higher than average commission, and 
reductions in the amount paid for commission by the mobile 
operators.  The cost of mobile top-ups in Ireland and Romania
1
 
has risen to £38 million (2011: £37 million). 
Net revenue
2 
of £90 million (2011: £83 million) was up 9.3%.
Operating costs (administrative expenses) were 14% higher at 
£39 million (2011: £35 million) as a result of increasing our IT 
operations and development resources across the group ahead 
of major infrastructure projects expenditure.  In addition, the 
UK retail network now has a separate management team, a 
larger ﬁeld force (increased by 50%) to deliver sales growth and 
increased resources to deliver the Simple Payment service for the 
DWP .  We also increased sales resources in PayByPhone.
Operating margin
3
 was broadly similar at 41.0% (2011: 41.7%) 
as a consequence of the increase in operating costs.
Our share of the loss in developing Collect+ was £1.8 million 
(2011: loss of £1.5 million).  Slower than expected integration 
of new merchants for commercial deliveries and the consumer 
proposition led to the increased losses.
Proﬁt before tax was £37.2 million (2011: £34.5 million) an 
increase of 8.0%. The tax charge of £10.3 million (2011:  
£10.6 million) represents an effective rate of 27.6% (2011: 
30.8%). The tax charge is lower than last year mainly because  
of the reduction in UK corporation tax rates and was higher 
than the UK nominal rate of 26% because of unrelieved losses 
in Canada.  The reduction in UK corporation tax to 25% 
became effective after the year end.
Balance sheet
Net assets of £91.4 million (2011: £80.6 million) reﬂect a strong 
balance sheet, including cash of £35.5 million (2011: £26.5 
million) and no debt.
Cash ﬂow
Cash generated by operations was £43.3 million (2011: 
£42.1 million), reﬂecting strong conversion of proﬁt to cash. 
Corporation tax of £10.4 million (2011: £11.0 million) was paid. 
Capital expenditure of £5.3 million (2011: £3.2 million)  
reﬂected spend on virtual terminal rollout, ATMs, IT equipment 
and software.  Net interest received was £0.2 million (2011:  
£0.1 million net expense).  Equity dividends paid were  
£16.4 million (2011: £15.0 million).  Cash and cash equivalents 
were £35.5 million (including client cash of £5.1 million), up 
from £26.4 million (including client cash of £6.1 million).
Economic proﬁt
PayPoint’s economic proﬁt (operating proﬁt less tax and capital 
charge) was £20.4 million (2011: £17.4 million), an increase  
of 17%.
Dividend
We propose to pay a ﬁnal dividend of 17.8p per share on  
30 July 2012 (2011: 15.6p) to shareholders on the register on 
29 June 2012, subject to the approval of the shareholders at the 
annual general meeting.  An interim dividend of 8.7p (2011: 
7.8p) per share was paid on 21 December 2011, making a total 
dividend for the year of 26.5p (2011: 23.4p), up 13.2%, broadly 
in line with earnings.
Liquidity and going concern
The group has cash of £35.5 million (including client cash of 
£5.1 million) and had, at the year end, an undrawn, unsecured 
loan facility of £35 million, which was agreed at the start of 
the ﬁnancial year, with an unexpired term of four years.  Cash 
and borrowing capacity is adequate to meet the foreseeable 
needs of the group, taking account of risks (page 12). The ﬁnancial 
statements have therefore been prepared on a going concern basis.
1. In Ireland and Romania, PayPoint is principal in the sale of mobile top-ups and, accordingly, the face value of the top-up is included in sales and the corresponding 
costs in cost of sales.
2. 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.
3. Operating margin is calculated as operating proﬁt, including our share of Collect+ losses as a percentage of net revenue. PayPoint plc annual report 2012 11
OPERATING AND FINANCIAL REVIEW continued
Financing and treasury policy
The ﬁnancing and treasury policy requires a prudent approach to 
the investment of surplus funds, external ﬁnancing, settlement, 
foreign exchange risk and internal control structures.  The policy 
prohibits the use of ﬁnancial derivatives and sets limits for gearing.
Charitable donations
During the year, the group made charitable donations of 
£23,075 (2011: £19,400) to charities serving the communities 
in which the group operates.  We encourage employees to raise 
funds for charity and the company matches funds raised by the 
employees, subject to certain limits.
During the year, our UK retail network acted as a collection 
agent for the BBC Children in Need telethon.
Employees
Our success depends upon the continuing support and 
commitment of all our staff.  We would like to take this 
opportunity to thank PayPoint’s employees for their commitment, 
energy and enthusiasm in the delivery of these results.
Strategy, risks and corporate social responsibility
Details of the company’s strategy are included in the Chief 
Executive’s review on page 3.  An analysis of risks facing the 
company is set out on page 12.  The company’s approach to 
corporate social responsibility is set out in a separate statement 
on page 14.
Economic climate
The company’s bill and general payments service, which 
accounts for 40% (2011: 41%) of our net revenue, has 
continued to be resilient, as consumers’ discretion in expenditure 
is limited for essential services and our service continues to be 
popular. Utility providers continue to install new prepay gas and 
electricity meters, which will have a beneﬁcial impact on our 
transaction volumes.  The internet payment market continues 
to grow substantially.  There has been an adverse impact on 
our mobile top-ups as mobile operators continue to offer more 
airtime at lower cost and to promote prepay less than contract. 
PayByPhone is able to offer parking authorities a more  
cost-effective collection system for parking compared to pay 
and display machines.  This has led to an increase in the number of 
tenders being issued as parking authorities try to reduce their costs. 
PayPoint’s exposure to retail agent debt is limited as credit 
granted to retail agents is restricted by daily direct debiting for 
all UK and Irish transactions, other than EPoS mobile top-ups 
(which are collected weekly).  There is some concentration of 
risk in multiple retail agents.  Most of PayPoint’s clients in the 
UK, other than for top-ups, bear the cost of retail agent bad 
debt.  In PayPoint Romania, the risk of bad debt lies with the 
company.  In PayPoint.net, exposure is limited to receivables 
from merchants for fees, except in the case of bureau internet 
merchants, where PayPoint.net retains credit risk on merchant 
default for credit card charge backs, a risk mitigated in part by 
cash retention.  In PayByPhone, exposure is limited to receivables 
from parking authorities.
Outlook
For the current ﬁnancial year, trading is in line with the 
company’s expectations. This is an important year for investment 
in infrastructure and tools to ensure the efﬁcient delivery of 
future growth.  Our established business (UK and Irish retail 
networks and internet payments) is strong, with further 
opportunities to enhance retail yield through the introduction of 
new technology and services.  In addition, improvements in our 
service offering to online merchants will provide opportunities 
for growth.  We will beneﬁt from rolling out services in our 
developing business (Collect+, PayByPhone and the Romanian 
retail network), growing our market share and improving 
proﬁtability. Together, our businesses provide a solid foundation 
to deliver value for our shareholders.
24 May 2012 12 PayPoint plc annual report 2012
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. The group’s risk 
management policies and procedures are also discussed in the governance statement on pages 18 and 19.
Risk area Potential impact Mitigation strategies
Loss or inappropriate usage  
of data
The group’s business requires the appropriate 
and secure use of consumer and other sensitive 
information. Mobile telephone and internet-based 
electronic commerce requires the secure transmission 
of conﬁdential information over public networks, 
and several of our products are accessed through the 
internet. Fraudulent activity or security breaches in 
connection with maintaining data and the delivery of 
our products and services could harm our reputation, 
business and operating results.
The group has established rigorous information 
security, anti-fraud and whistleblowing standards, 
procedures, and recruitment and training schemes, 
which are embedded throughout its business 
operations. The group also screens new employees 
carefully. Continued investments are made in IT 
security infrastructure, including the signiﬁcant use 
of data and communications encryption technology.
Dependence upon third parties 
to provide data and certain 
operational services
The group’s business model is dependent upon 
third parties to provide operational services, the 
loss of which could signiﬁcantly impact the quality 
of our services. Similarly, if one of our outsource 
providers, 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.
The group selects and negotiates agreements with 
strategic suppliers and agents based on criteria 
such as delivery assurance and reliability.  Single 
points of failure are avoided, where practicable 
and economically feasible. Controls are continually 
reviewed and improved to minimise risk of retailer 
churn caused by ﬁnancial loss to retailers through 
fraudulent third party activity.
Exposure to legislation or 
regulatory reforms and risk of 
non-compliance
The group is largely unregulated by ﬁnancial services 
regulators. The group’s agents which offer money 
transfer are licensed as Money Service Businesses by 
HMRC. Our internet and mobile phone distribution 
channels are subject to Payment Card Industry 
Data Security Standards regulated by the card 
schemes. Regulatory reform could increase the 
cost of the group’s operations or deny access to 
certain territories in the provision of certain services.  
Non-compliance with law, regulation, privacy 
or information security laws could have serious 
implications in cost and reputational damage to  
the group.
The group’s legal department works closely with 
senior management to adopt strategies to educate 
lawmakers, regulators, consumer and privacy 
advocates and other stakeholders to support the 
public policy debate, where appropriate, to ensure 
regulation does not have unintended consequences 
over the group’s services. The group has in place 
a business ethics policy which requires compliance 
with local legislation in all the territories in 
which the group operates.  A central compliance 
department co-ordinates all compliance monitoring 
and reporting. Managing and ﬁnance directors are 
required to sign annual compliance statements.
Interruptions in business 
processes or systems
The group’s ability to provide reliable services 
largely depends on the efﬁcient and uninterrupted 
operation of our computer network systems, 
ﬁnancial settlement systems, data and call centres, as 
well as maintaining sufﬁcient stafﬁng levels. System 
or network interruptions, recovery from fraud or 
security incidents or the unavailability of key staff or 
management resulting from a pandemic outbreak 
could delay and disrupt our ability to develop, deliver 
or maintain our products and services, causing harm 
to our business and reputation and resulting in loss 
of customers or revenue.
Comprehensive business continuity plans and 
incident management programmes are maintained 
to minimise business and operational disruptions, 
including fraudulent activity, system failure 
or pandemic incidents. The group maintains 
full duplication of all information contained in 
databases and runs back-up data centres. Support 
arrangements have been established with third party 
vendors and there are strict standards, procedures 
and training schemes for business continuity. 
Dependence on recruitment 
and retention of highly skilled 
personnel
The ability of the group to meet the demands of the 
market and compete effectively is, to a large extent, 
dependent on the skills, experience and performance 
of its personnel. Demand is high for individuals with 
appropriate knowledge and experience in payments, 
IT and support services. The 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. 
Effective recruitment programmes are ongoing 
across all business areas, as well as personal and 
career development initiatives. The executive 
management reviews talent potential at quarterly 
meetings. Compensation and beneﬁts programmes 
are competitive and also reviewed regularly. PayPoint plc annual report 2012 13
RISKS continued
Risk area Potential impact Mitigation strategies
Exposure to materially adverse 
litigation
The group contracts with a number of large service 
organisations for which it provides services essential 
to their customers.  Failure to perform in accordance 
with contractual terms could give rise to litigation.
The group seeks to limit exposure in its contracts.  
Mitigating actions are taken where contractual 
exposures are above the norm, including  
insurance coverage, where appropriate and 
economically sustainable.
Exposure to country and 
regional risk (political, ﬁnancial, 
economic, social) in North 
America, United Kingdom, 
Romania, France and Ireland
The group’s geographic footprint subjects its 
businesses to economic, political and other risks 
associated with international sales and operations. 
A variety of factors, including changes in a speciﬁc 
country’s or region’s political, economic or regulatory 
requirements, as well as the potential for 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.
The group’s portfolio is diversiﬁed by geography, by 
product, by sector and by client in order to protect 
itself against many of these ﬂuctuations, especially 
those that are restricted to individual territories and 
market sectors, although the bulk of its operations 
and revenues are UK based.
Exposure to consolidation 
among clients and markets
Consolidation of retailers and clients could result 
in reductions in the group’s revenue and proﬁts 
through price compression from combined service 
agreements or through a reduced number of clients.
No single client accounts for more than 9% of the 
group’s net revenue, and no single retailer accounts 
for more than 8% of the group’s net revenue, 
which reduces the probability of this 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 
expectations
The group’s acquisitions, strategic alliances and joint 
ventures may result in ﬁnancial outcomes that are 
different than expected.
The group assesses all acquisitions rigorously, using 
both in-house experts and professional advisers. 
In addition, the group conducts extensive post-
acquisition reviews to ensure, as far as is possible, 
that performance remains consistent with the 
acquisition business plan.
Exposure to the unpredictability 
of ﬁnancial markets (foreign 
exchange, interest rate and 
other ﬁnancial risks)
As the group operates on an international basis, it is 
exposed to the risk of currency ﬂuctuations and the 
unpredictability of ﬁnancial markets in which  
it operates.
The group’s ﬁnancial risk management focuses on 
the unpredictability of ﬁnancial markets and seeks to 
minimise potentially adverse effects on the group’s 
ﬁnancial performance.
Exposure to increasing 
competition
The group operates in a number of geographic, 
product and service markets that are highly 
competitive and subject to technological 
developments.  Competitors 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, 
merchants and retailers or a reduction in revenue. 
The group is committed to continued research and 
investment in new data sources, people, technology 
and products to support its strategic plan.
Loss or infringement of 
intellectual property rights
The group’s success depends, in part, upon 
proprietary technology and related intellectual 
property rights. Some protection can be achieved 
but in many cases, little protection can be secured. 
Third parties may claim that the group is infringing 
their intellectual property rights or our intellectual 
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.
The group, where appropriate and feasible, relies 
upon a combination of patent, copyright, trademark 
and trade secret laws, as well as various contractual 
restrictions, to protect our proprietary technology and 
continues to monitor this situation. The group also 
vigorously defends all third party infringement claims.
Data centre security breaches The group is highly dependent on information 
technology networks and systems to process, 
transmit and store electronic information.  
Fraudulent or unauthorised access, including security 
breaches of our data centres, could create system 
disruptions, shutdowns or unauthorised disclosure of 
conﬁdential information.
The group’s data centres are protected against 
physical break-ins. The group has strict standards 
and procedures for security and fraud prevention. 14 PayPoint plc annual report 2012
CORPORATE SOCIAL RESPONSIBILITY
PayPoint is committed to dealing fairly and with a high level of integrity with all its stakeholders, including clients, retailers, 
merchants, consumers, local communities and shareholders.  We comply with statutory obligations in all areas and subject our 
practices to high levels of scrutiny through regular compliance audits.  We publish results twice each year and provide two interim 
management statements, complying with reporting and disclosure obligations.  The corporate social responsibility report sets out our 
approach and the way we measure our success in dealing with each group of stakeholders.
Clients and 
merchants
Retailers and 
consumers
Local communities Shareholders
Information 
on 
stakeholders
Over 6,000 clients and 
online merchants in six 
countries.
Over 31,000 retailers 
in three countries and 
provide a service to 
millions of consumers.
Where our employees 
live and work.
587 shareholders at  
25 March 2012.
Impact Provision of convenient 
services for consumer 
payments.
To provide a stable and 
reliable service and 
generate consumer 
footfall for retailers.
Financial support to 
local charities.
Maximise shareholder 
return.
Engagement Provision of a high 
standard of service to 
our clients and open 
communication. Client 
contracts contain service 
level agreements, which 
are set to a high standard. 
Speciﬁc performance 
is measured for key 
elements, including system 
availability and ﬁle delivery. 
We seek to provide 
an unparalleled 
service to our retailers  
and consumers.
Staff are encouraged to 
nominate local charities 
and fund raising events. 
PayPoint has adopted a 
charitable giving policy 
which supports the local 
communities in which its 
employees live and work 
by matching funds raised 
by employees, subject to 
certain limits.
PayPoint focuses 
on maximising 
economic value.
How we 
interact and 
support the 
stakeholders
Communication -  
major clients have 
regular review meetings 
with dedicated  
sector managers.
In the UK, terminal 
availability is over 99% 
and when a terminal 
needs to be replaced, it is 
achieved within four hours 
across the UK in 97% 
of cases. The breadth 
of products offered by 
PayPoint is greater than 
any other network. 
An annual retailer 
survey is carried out to 
understand how we can 
improve our service. We 
also invite retailers to 
attend an annual forum to 
discuss new products and 
obtain retailer feedback.
Major multiple retailers 
have regular review 
meetings with dedicated 
account managers.
During the year, PayPoint 
donated £23,075 to local 
and national charities, 
which was supplemented 
by employees who also 
donate to some of these 
charities through various 
schemes. 
We offer our network to 
collect for certain charities 
free of charge, including 
the BBC Children in Need 
telethon.
Shareholders are invited to 
attend the annual general 
meeting and major 
shareholders are visited 
twice a year to discuss the 
group’s results. PayPoint plc annual report 2012 15
CORPORATE SOCIAL RESPONSIBILITY continued
Environment 
PayPoint’s main impact on the environment stems from our use 
of resources to run ofﬁces in the UK, Ireland, Romania, Canada 
and France and our communications with our retailers. 
We measure our carbon footprint in accordance with the Green 
House Gas protocol.  This allows us to monitor, by region, our 
carbon footprint and implement, where practical, targets to 
reduce our carbon footprint.
The two primary sources of PayPoint’s carbon emissions are 
business travel and energy consumption. We visit existing and 
prospective retailers in the UK, Ireland and Romania.  Routes are 
pre-planned to ensure efﬁciency where possible.  Management 
regularly visits our businesses to review and improve 
performance.  We aim to avoid unnecessary travel.  Energy 
consumption arises from our ofﬁces in the UK, Romania and 
Canada. Since the year end, we have promoted a cycle to work 
scheme for our UK employees.
We recycle wherever possible, including paper, cans, plastic 
cups, cardboard, toners and print cartridges.  We also recycle 
computer equipment.  This has resulted in an increase in the 
proportion of waste recycled to 48% of all waste generated 
(2011: 45%).
CO
2
 Tonnes
Consumption
measure per 
employee
Year
ended 
25 March
2012
Year
ended 
27 March
2011
Year
ended 
25 March
2012
Year
ended 
27 March
2011
Business 
travel 1,059 965 7,113km 6,097km
Energy 
purchased 1,130 1,256 4,395kwh 4,756kwh
Water 
consumed 2 1 8.59m
3
8.84m
3
Waste 8 7
Total 2,199 2,229
Year
ended 
25 March
2012
Tonnes
Year
ended 
27 March
2011
Tonnes Change %
Waste
Landﬁll 14.4 15.4 (6.5)
Recycled 13.1 12.5 4.8
Total 27.5 27.9 (1.4)
% recycled 47.7% 44.8% 2.9ppts
Employees
PayPoint employed, on average, 580 members of staff during 
the year. We operate an equal opportunities policy.  PayPoint’s 
culture is one of openness, honesty and accountability and we 
recognise that all employees play a part in delivering the  
group’s performance.
PayPoint seeks to improve its employees’ working environment. 
Employees are invited to participate in two staff meetings 
a year where the directors present the performance of the 
group.  Management presents twice a year to employees on 
key points of topical interest and functional meetings take place 
throughout the year at our various ofﬁces.  PayPoint believes 
that keeping its employees informed of new developments 
and products as well as the ﬁnancial performance of the group 
motivates the employees and helps them understand the 
group’s progress towards its goals and objectives.
 
PayPoint’s employment policies are designed to attract, retain 
and motivate the best people.  All staff are given two appraisals 
per annum, which cover performance management, employee 
development, training and succession planning where applicable.  
Training is undertaken locally and all employees are given equal 
opportunities to develop their experience and their careers.
Employees in the UK, Ireland and Romania are asked annually to 
complete an anonymous employee engagement survey which 
covers a wide range of subjects, including health and safety, 
work environment, training, reward and recognition and staff 
behaviour.  This survey is used to agree with employees the 
actions necessary for improvement. 
PayPoint has the following policies in place:
equal opportunities - we treat job applicants, employees 
and temporary staff equally, regardless of their sex, sexual 
orientation, age, race, ethnic origin or disability.  It is also the 
group’s policy to retain employees who may become disabled 
while in service and provide appropriate training as necessary;
whistle-blowing - we are committed to ensuring that 
malpractice is prevented and immediately dealt with, should it 
arise.  We encourage employees to raise their concerns about 
any malpractice promptly and we have an established procedure 
for raising any such concerns;
health and safety - we recognise that effective health and 
safety management is fundamental to running a successful 
business.  We are committed to operating high standards, 
designed to minimise the risk of injuries and ill health to 
employees, contractors, visitors and others who come into 
contact with the business, so far as is reasonably practicable;
disciplinary and grievance procedures - we provide a fair 
and consistent method of dealing with disciplinary problems 
and treat misconduct with appropriate action.  We ensure that 
we treat any grievance an employee may have relating to their 
employment in a fair and reasonable manner;
bullying and harassment - we promote a working 
environment free of harassment and individuals who believe 
that they are being subjected to any form of harassment are 
encouraged to come forward to have the issue resolved;  16 PayPoint plc annual report 2012
CORPORATE SOCIAL RESPONSIBILITY continued
business ethics - we set out clear standards for ethical 
relationships and conduct to be maintained by employees and 
sub-contractors and conduct our business in accordance with 
the highest ethical standards.  We do not offer or accept any 
bribes; and
training and development - all employees meet twice a 
year with their line manager to discuss performance and any 
development needs.  Training is provided either in-house 
or externally.  We also sponsor employees through further 
professional and technical qualiﬁcations.  We promote internally, 
where appropriate.
PayPoint’s employees
UK Rest of the World
2
Year 
ended 
25 March 
2012
Year
 ended 
27 March 
2011
Year 
ended 
25 March 
2012
Year
 ended 
27 March 
2011
General
1
Average 
number of staff 
employed during 
the year 432 390 148 159
Average length 
of service 4 years 4 years 3 years 3 years
Average staff 
turnover during 
year 26% 25% 28% 35%
Sickness absence 
rate 1.3% 1.6% 2.0% 1.0%
% working part-
time 20% 20% 2% 2%
Women
1
Number 
of women 
employed 200 185 54 50
% of women 
employed 43% 47% 37% 30%
% of 
management 
grades 13% 14% 14% 12%
Ethnic 
minorities
1
% of all 
employees 16% 18% 4% 6%
% of 
management 
grades 3% 3% 1% 1%
Disabled 
employees
1
% of all 
employees 1% 1% 1% 1%
Age proﬁle
1
 
employees      
under 25 46 36 12 20
employees           
25 to 29 103 81 31 35
employees           
30 to 49 224 209 101 96
employees           
50 and over 63 64 4 8
1. Numbers based on employees employed at the end of the relevant year
2. Rest of the world includes Ireland, Romania, Canada and France PayPoint plc annual report 2012 17
GOVERNANCE
The directors recognise the importance of sound corporate 
governance, whilst taking into account the size and nature 
of the company.  The company has fully complied with the 
provisions set out in the Financial Reporting Council’s UK 
Corporate Governance (the Code) for the year ended 25 March 
2012, a copy of which can be found at 
www.frc.org.uk/corporate/ukcgcode.cfm.
This statement describes how the principles of corporate 
governance in the Code are applied by the company.
The board
The board comprises nine directors: David Newlands, the non-
executive Chairman, three executive directors, Dominic Taylor, 
George Earle and Tim Watkin-Rees, and ﬁve non-executive 
directors, Eric Anstee, David Morrison, Andrew Robb, Stephen 
Rowley and Nick Wiles. 
The board considers that David Newlands, Eric Anstee, Andrew 
Robb, Stephen Rowley and Nick Wiles are independent for the 
purposes of the Code.  Given the size of the company and its 
ownership structure, the board has concluded that the proportion 
of independent non-executive directors is appropriate.
The Chairman is responsible for the leadership of the board and 
ensuring the effectiveness on all aspects of its role.  The board 
is comprised of an appropriate balance of skills, experience, 
independence and knowledge, which enables it to discharge its 
responsibilities effectively.  The balance of independence creates 
an environment that encourages the effective challenge and 
development of proposals on strategy.  All the non-executive 
directors bring considerable knowledge and experience to board 
deliberations.  Non-executive directors do not participate in any 
of the company’s share schemes or bonus schemes and their 
service is non-pensionable. 
Biographical details of each of the current serving directors 
are set out on page 20. Procedures exist to allow the directors 
to seek independent professional advice in respect of their 
duties at the company’s expense where the circumstances are 
appropriate.  All directors have access to the Company Secretary.
The terms and conditions of appointment of the non-executive 
directors and the executive directors’ service contracts are 
available for inspection at the company’s registered ofﬁce 
during normal business hours and will be available at the annual 
general meeting.
The Chairman, David Newlands, chairs board meetings and 
regularly consults with the executive directors regarding ongoing 
business.  His other signiﬁcant commitments are disclosed in 
his biography on page 20.  The board considers that these 
commitments do not hinder his ability to discharge his 
responsibilities to the company and its subsidiaries (the  
group) effectively.
The directors believe it is essential for the company to be led 
and controlled by an effective board which monitors progress 
through monthly reports and management accounts.  The board 
has a schedule of matters reserved for its approval. The most 
signiﬁcant of these are the approval of:
• corporate strategy of the group and the annual operating 
and capital expenditure budgets;
• the appointment of the Chief Executive, other directors and 
the Company Secretary;
• major capital investments;
• annual and half yearly ﬁnancial statements;
• interim management statements; and
• acquisitions and disposals.
The board met six times during the year and all meetings were 
attended by all board members except for Eric Anstee and 
Steve Rowley who were each unable to attend one meeting. 
Where a director is unable to attend, he provides input through 
discussion with the Chairman in advance of the meeting.
A formal performance evaluation of the board, its committees 
and individual directors took place during the year.  The 
performance of individual executive directors is appraised 
annually by the Chief Executive, to whom they report.  The 
performance of the Chairman is reviewed by the non-executive 
directors, led by Andrew Robb, Senior Independent Director, 
taking into account the views of the executive directors. 
The performance review of the Chief Executive is conducted by 
the Chairman, taking into account the views of other directors. 
Non-executive directors’ performance is reviewed by the 
Chairman, taking into account the views of other directors.
The performance evaluation conﬁrmed that the members of 
the board were satisﬁed with the board’s overall performance 
and there were no material changes recommended.  In addition 
to the evaluation of board members, the various committees 
carried out self-assessments to determine whether their terms 
of reference had been satisfactorily fulﬁlled and how their 
processes could be improved. 
An external performance evaluation of the board will take place 
once every three years in line with the requirements of the Code.
Every member of the board will offer himself for re-election 
at the 2012 annual general meeting.  The board’s 
recommendations in respect of the re-election of each director 
can be found in the notice of meeting on pages 50 to 54.
The Chief Executive proactively manages succession planning 
for the executives and senior management team and keeps the 
board updated on developments as necessary. 18 PayPoint plc annual report 2012
GOVERNANCE continued
Committees of the board
The following formally constituted committees deal with speciﬁc 
aspects of the group’s affairs in accordance with the duties and 
responsibilities formally delegated to them by the board.  The 
terms of reference for each of the committees are available on 
the company’s website at www.paypoint.com.
Audit committee
The audit committee comprises Eric Anstee, Andrew Robb, 
Stephen Rowley and Nick Wiles.  The board considers Eric 
Anstee, who is Chairman of the audit committee, to have recent 
and relevant ﬁnancial experience in accordance with the Code.  It 
met ﬁve times during the year.  All members were in attendance 
with the exception of Eric Anstee, who was unable to attend one 
of the meetings. On that occasion, it was chaired by Andrew Robb.
The audit committee is primarily responsible for monitoring that 
the ﬁnancial performance of the group is properly measured 
and reported and appropriate ﬁnancial control systems and 
procedures are in place.  During the year, the committee: 
reviewed reports from the auditor relating to the group’s 
accounting and internal controls; advised the board on the 
appointment, performance, independence and objectivity of 
the auditor and the internal auditor; reviewed the effectiveness 
of the group’s systems of internal control, including fraud 
prevention; reviewed the appropriateness of the internal audit 
programme and the reports of the internal auditor. 
The committee considered the level of non-audit fees for 
services provided by the auditor in order to satisfy itself that 
auditor independence is safeguarded.  The group has a policy 
which prohibits the auditor providing certain services which 
might impair its independence.  The committee monitors 
compliance with the policy safeguarding the independence 
of the external auditor.  The policy also prescribes that any 
non-audit services to be performed by the auditor in any one 
year (excluding tax services) are to be provisionally capped at 
an aggregate total equivalent to the level of the annual audit 
fee.  Any proposal to use the auditor for non-audit services 
exceeding this will be subject to the prior approval of the audit 
committee.  In determining the most appropriate provider of 
non-audit services, the committee will consider the knowledge 
and expertise of the potential providers and the proposed costs. 
Non-audit services will only be undertaken by the auditor where 
they are deemed to be the preferred provider and the provision 
of services poses no threat to its independence.  Details of the 
remuneration paid to the auditor for the statutory audit and 
non-audit services, which normally are limited to assurance and 
tax advice, are set out in note 5. 
The audit committee meets the external auditor without 
the executive directors being present and procedures are in 
place which allow access at any time of both external and 
internal auditor to the audit committee.  The Chairman of the 
committee reports the outcome of each meeting to the board, 
which is provided with the minutes of all committee meetings.
Remuneration committee
The role, composition and activities of the remuneration 
committee and details of how the company applies the principles 
of the Code in respect of directors’ remuneration are set out in 
the remuneration committee report on pages 23 to 28.
Nomination committee
The nomination committee comprises Eric Anstee, Andrew 
Robb, Stephen Rowley, David Morrison, Nick Wiles and David 
Newlands, who is its Chairman.  It met once during the year and 
all members were in attendance. 
The committee is responsible for considering and making 
recommendations on the appointment of additional directors, 
the retirement of existing directors and for reviewing the size, 
structure and composition of the board and membership of board 
committees, which are considered against objective criteria. 
The committee considers the need for progressive refreshment 
and keeps the balance of skills, knowledge, diversity and 
experience of the board under review.  During considerations 
on the appointment and retention of non-executive directors, 
the committee has regard to the need for particularly rigorous 
review and the need to progressively refresh the board where 
terms of appointment are beyond six years.
The Senior Independent Director would chair discussions relating 
to succession planning for the Chairman.  
Conﬂicts of interest
Under the articles of association, the board has authority to 
approve any conﬂicts or potential conﬂicts of interest that are 
declared by individual directors; conditions may be attached to 
such approvals and directors will generally not be entitled to 
participate in discussions or vote on matters in which they have 
or may have a conﬂict of interest.
A register of conﬂicts is maintained and is reviewed at least 
annually to ensure all details are kept up-to-date.  Authorisation 
is sought prior to the appointment of any new director or if any 
new conﬂicts arise.
The appointment of Deloitte LLP as external auditor is kept 
under annual review. Rather than adopting a policy on 
tendering frequency, an annual review of the effectiveness 
of the external audit is undertaken by the committee.  The 
committee’s assessment of the external auditor’s performance 
and independence, if satisfactory, underpins its recommendation 
to the board to propose to shareholders the re-appointment of 
Deloitte LLP as auditor.  A resolution for its re-appointment will 
be proposed at the forthcoming annual general meeting, the 
notice for which can be found on pages 50 to 54. PayPoint plc annual report 2012 19
GOVERNANCE continued
Risk management and internal control 
The directors are responsible for establishing and maintaining 
the group’s system of internal control, and for regularly 
reviewing its effectiveness.  Procedures have been designed 
to meet the particular needs of the group and its risks, 
safeguarding shareholders’ investments and the company’s 
assets.  Such a system is designed to manage, rather than 
eliminate, the risk of failure to achieve business objectives and 
can only provide reasonable and not absolute assurance against 
material misstatement or loss.  There is an ongoing process of 
identifying, evaluating and managing the signiﬁcant risks faced 
by the group. 
All procedures necessary to comply with the FRC’s ‘Internal 
Control: Revised Guidance for Directors on the Combined 
Code’ have been in place throughout the year under review and 
up to the date of approval of the annual report and ﬁnancial 
statements.  The directors have conducted a formal review of 
the effectiveness of the group’s system of internal control during 
the year. No signiﬁcant failings or weaknesses were identiﬁed 
during the review.
The operational management of the group is delegated to 
senior managers who are appointed by the Chief Executive.   
The responsibilities of the senior management group include the 
regular review of the main business risks to the group.
The group has prepared a detailed risk register which includes 
analysis of all the main operational risks covering all parts of 
the group’s business activities, including ﬁnancial risks.  The 
group evaluates and prioritises the identiﬁed key operational 
risks.  In order to ensure that this process is managed effectively, 
responsibility for each key risk area is assigned to a member 
of senior management, who must conﬁrm in writing that the 
potential threats in each area have been properly identiﬁed 
and recorded and the appropriate action taken to mitigate risks 
so far as possible.  This process has been fully embedded into 
the operations of the business.  The audit committee receives 
regular updates on the ongoing risk management, control 
systems and processes, which are discussed at their meetings.
KPMG is the internal auditor and conducts a rigorous internal 
audit programme covering all the group’s key business areas. 
The audit committee approved the current programme in March 
2011 and, each year, the programme is reviewed to ensure that 
account is taken, where necessary, of any change.  In addition, 
independent internal audits are conducted for assessment: of 
compliance with ISO/IEC 27001:2005 (information security 
management), which takes place twice annually; by LINK 
auditors, on an annual basis, which assesses control over LINK 
related ATM systems; by independent assessors for Payment 
Card Industry Data Security Standard compliance; and audits by 
our clients from time to time.
Shareholder relations
The directors consider that the annual report and accounts 
play an important role in providing shareholders with an 
evaluation of the company’s position and prospects.  The board 
aims to achieve clear reporting of ﬁnancial performance to all 
shareholders.  The board acknowledges the importance of an 
open dialogue with its institutional shareholders and welcomes 
correspondence from private investors.
We believe that, in addition to the annual report and the 
company’s website, the annual general meeting is an ideal 
forum at which to communicate with investors, and the board 
encourages their participation.  The Senior Independent Director 
is available to address any unresolved shareholder concerns.
The company held brieﬁngs with institutional fund managers, 
analysts and other investors following the announcement of half 
yearly results and feedback from these has been reported to the 
board.  Meetings have been held at other times during the year 
when appropriate. 20 PayPoint plc annual report 2012
BOARD OF DIRECTORS
David Newlands, non-executive Chairman (aged 65), 
appointed 4 August 1998
David has been Chairman of PayPoint since 1998. He was 
previously Finance Director of The General Electric Company 
plc, non-executive Chairman of Britax International plc, deputy 
Chairman of The Standard Life Assurance Company plc, non-
executive Chairman of Tomkins plc and is currently Chairman of 
Kesa Electricals plc, and a non-executive director of a number of 
other companies.
Dominic Taylor, Chief Executive (aged 53), appointed
4 August 1998
Dominic joined PayPoint in 1997 as Retail Director and was 
appointed to his current role in August 1998. He was a Royal 
Naval ofﬁcer for 12 years, following which he completed an 
MBA at the Cranﬁeld School of Management.  In 1991, Dominic 
joined the Vodafone Group where he led a number of initiatives 
including the development of its SMS service and a bid for the 
National Lottery, before becoming Sales and Marketing Director 
for the indirect sales of mobile phones to retailers.  In 1996, 
Dominic joined Granada plc as a director of Granada Technology 
Group and Managing Director of Granada Business Technology, 
supplying ﬁlm and telecommunications products into the hotel 
and leisure sectors.
George Earle, ACA, Finance Director (aged 58), appointed 
20 September 2004
George joined PayPoint in September 2004 and is responsible 
for the ﬁnancial affairs of the group.  George qualiﬁed as a 
chartered accountant with Touche Ross & Co (now Deloitte LLP) 
in 1979, where he served in the corporate ﬁnance and audit 
groups, becoming a partner in 1984. In 1987, George moved 
to Saatchi & Saatchi plc, serving as Deputy Finance Director. 
George subsequently moved to GEC in 1989, where, until 2001, 
he fulﬁlled the role of Financial Services Director. George left 
Marconi (formerly GEC) in 2001 to work as Group Director, 
Chief Executive’s Ofﬁce at Centrica plc, and in 2003 was 
appointed as Director of Financial Control.
Tim Watkin-Rees, Business Development Director  
(aged 49), appointed 22 September 1998
Tim was the founder Sales and Marketing Director of PayPoint 
in 1996. Since 2000, he has been responsible for strategic 
business development.  Prior to PayPoint, he was a specialist in 
retail banking and payment systems, starting with Lloyds Bank 
in 1984, then as a Senior Consultant with KPMG Management 
Consultants in 1988 and Head of Business Planning and Director 
of Consulting with Nexus (later Sligos and now Atos Origin) 
from 1989.  He is an Associate of the Chartered Institute of 
Bankers.
David Morrison, non-executive director (aged 53), 
appointed 12 January 1999
David has been Chief Executive of Prospect Investment 
Management (Prospect) since 1999, when he started the 
company. He became a director of PayPoint in 1999 following 
an investment in the company by clients of Prospect.  Prior to 
establishing Prospect, he had worked in the venture capital 
sector with 3i, Abingworth Management and Botts & Company. 
He is currently a non-executive director of Record plc and several 
private companies.
Andrew Robb, non-executive director (aged 69), 
appointed 18 August 2004
Andrew worked for P&O Steam Navigation Co. from 1971 to 
1989, initially as Financial Controller and, from 1983, as Group 
Finance Director.  From 1989 to 2001, he was Group Finance 
Director of Pilkington plc and remained an Executive Director 
until 2003. Andrew is a Fellow of the Chartered Institute of   
Cost and Management Accountants and is currently a non-
executive director and Chairman of the audit committee of Kesa 
Electricals plc and Jaguar Land Rover plc.  He is also a non-
executive director of Tata Steel Limited, a company quoted in 
India, and Chairman of Tata Steel Europe Limited.
Eric Anstee, non-executive director (aged 61), appointed 
16 September 2008
Eric Anstee is currently Chief Executive of City of London  
Group plc, an LSE listed investment company.  He is also a non-
executive director of Sun Life Financial of Canada (UK) Limited 
and Insight Asset Management, the institutional investment 
arm of Bank of New York Mellon.  He is also a member of 
the Takeover Panel appeals board.  His former non-executive 
appointments include: The Financial Reporting Council; 
Chairman of Mansell plc and non-executive director of Severn 
Trent plc, where he was Chairman of the treasury and audit 
committees.  His former executive appointments include: Chief 
Executive Ofﬁcer of the Institute of Chartered Accountants in 
England and Wales; Chief Executive at Old Mutual Financial 
Services; Group Finance Director at Old Mutual plc and Finance 
Director of The Energy Group plc. 
 
Stephen Rowley, non-executive director (aged 53), 
appointed 16 September 2008
Stephen Rowley is currently Chief Executive of Torex and was 
formerly CEO of Anite plc.  His former executive appointments 
include: Senior Vice President Corporate Business Development 
for 3Com Corporation; Marketing and Sales Director of Cellnet 
(now O2) and Director at IBM UK, where he also held a variety 
of other positions.
Nick Wiles, non-executive director (aged 50), appointed 
22 October 2009
Nick Wiles is currently Chairman of UK investment banking at 
Nomura.  He has worked in banking for more than 20 years, 
with the majority of this time at Cazenove & Co, where he was 
a partner prior to incorporation.  He is a non-executive director 
of Strutt & Parker. PayPoint plc annual report 2012 21
DIRECTORS’ REPORT
The directors present their annual report on the affairs of 
the company and of the group, together with the ﬁnancial 
statements and independent auditor’s report, for the year ended 
25 March 2012.
The Chairman’s statement, Chief Executive’s review, operating 
and ﬁnancial review and corporate governance statement form 
part of this directors’ report.
Principal activity
The company is a holding company and its subsidiaries are 
engaged in providing clients with specialist consumer payment 
transaction processing and settlement. 
PayPoint UK & Ireland processes transactions and collects 
payments on behalf of the UK and Ireland’s leading utility 
and customer service organisations, and there are 24,387 
convenience retail outlets using PayPoint’s terminals.  On 
average, 10.5 million consumer transactions are processed 
weekly by PayPoint.  At a PayPoint outlet, consumers are 
provided with a one stop shop for making cash payments 
for the wide range of PayPoint’s clients. In addition, PayPoint 
provides other services to retail outlets.
PayPoint.net provides secure credit and debit card payments 
services for web merchants. 
PayPoint Romania provides electronic mobile top-ups and 
scratch cards and a bill payment service to consumers.
PayByPhone allows consumers to pay for their car parking by 
credit or debit card from their mobile phones.
PayPoint has a 50% interest in Drop & Collect Limited which 
trades as Collect+, a joint venture with Yodel, which provides a 
parcel service through PayPoint outlets.
Substantial shareholdings
On 24 May 2012, the company had been notiﬁed of the 
following disclosable interests in the voting rights of the 
company as required by provision 5.1.2 of the FSA’s Disclosure 
and Transparency Rules:
Name of holder 
No. of 
ordinary 
shares 
Percentage 
of issued 
capital 
Invesco Limited 19,788,134 29.19%
Troy Asset Management (UK) 7,433,708 10.97%
RIT Capital Partners plc 4,821,057 7.11%
Liontrust Asset Management PLC 4,160,805 6.14%
Legal & General Investment 
Management Limited (UK) 3,368,663 4.97%
Threadneedle Asset Management 
Ltd 3,104,300 4.58%
Share Capital
As at the date of this report, 67,823,744 ordinary shares of 
1/3p each have been issued and fully paid up and are quoted 
on the London Stock Exchange.  During the year ended 25 
March 2012, 20,117 ordinary shares were issued under the 
company’s share schemes.  The rights and obligations attaching 
to the company’s ordinary shares, as well as the powers of the 
company’s directors are set out in the company’s articles of 
association, copies of which can be obtained from Companies 
House or by writing to the Company Secretary.
There are no restrictions on the voting rights attaching to the 
ordinary shares or on the transfer of securities in the company. 
No person holds securities in the company carrying special 
rights with regard to control of the company.  The company 
is not aware of any agreements between holders of securities 
that may result in restrictions on the transfer of securities or on 
voting rights.  Unless expressly speciﬁed to the contrary in the 
articles of association of the company, the company’s articles 
of association may be amended by a special resolution of the 
company’s shareholders.
At the annual general meeting on 15 July 2011, the directors 
were given authority to purchase 14.99% of its issued share 
capital, allot relevant securities up to an aggregate nominal 
amount of £76,757 and to disapply pre-emption rights in 
respect of allotments of relevant securities up to an aggregate 
nominal amount of £10,163.  Resolutions to renew these 
authorities will be proposed at the 2012 annual general 
meeting, details of which are set out in the notice of meeting on 
pages 50 to 54.
The company’s authorised and issued share capital as at 25 
March 2012, together with details of purchases of own shares 
during the year, are set out in note 24.
Directors
The names of the directors at the date of this report and their 
biographical details are given on page 20 and their interests in 
the ordinary shares of the company are given on page 28. 
Results for the year
The consolidated income statement, balance sheet and cash 
ﬂow statement for the year ended 25 March 2012 are set 
out on pages 31 to 33.  The business review of the group 
for the year ended 25 March 2012, which complies with the 
Accounting Standards Board’s 2006 Statement on Operating 
and Financial Reviews, including an analysis of the group’s key 
performance indicators and ﬁnancing and treasury policy, is set 
out on pages 6 to 11 and forms part of the directors’ report. 
An analysis of risk is set out on pages 12 to 13 and of risk 
management on page 19.  The balance sheet and cash ﬂow 
statement of the holding company for the year ended on 25 
March 2012 are set out on pages 34 and 35.  Since the year 
ended 25 March 2012, there have been no material events likely 
to impact the future development of the company.
The accounting year end in the current year falls on 31 March, 
the last Sunday in the month.  The results will cover the period 
from 26 March 2012.  Subsequent accounting years will end on 
31 March.
Qualifying third party indemnity provisions for 
the beneﬁts of directors
Under sections 236 (1) (a) and (b) of the Companies Act 2006, 
companies are obliged to disclose any indemnities which are 
in force in favour of their directors.  The current articles of 
association of the company contain an indemnity in favour 
of the directors of the company which indemniﬁes them in 
respect of certain liabilities and costs that they might incur 
in the execution of duties as directors.  Copies of the articles 
of association can be obtained from Companies House or by 
writing to the Company Secretary and will be available at the 
venue of the annual general meeting from 15 minutes before 
the meeting until it ends. 22 PayPoint plc annual report 2012
Change of control
All of the company’s share schemes contain provisions relating 
to a change of control.  Outstanding options and awards would 
normally vest and become exercisable on a change of control, 
subject to the satisfaction of any performance conditions at  
that time.
The company has a revolving term credit facility for £35 million 
with a remaining term of over four years.  The terms of the 
facility allow for termination on a change of control, subject to 
certain conditions.  There are no other signiﬁcant contracts in 
place that would take effect, alter or terminate on the change 
of control of the company, including compensation for loss of 
ofﬁce as a result of a takeover bid.
Suppliers’ payment policy
Terms of payment are agreed with individual suppliers prior 
to supply.  The group aims to pay its creditors promptly, in 
accordance with terms agreed for payment, provided the 
supplier has provided the goods or services in accordance with 
the agreed terms and conditions.  The group had 33 days’ 
purchases outstanding at 25 March 2012 (2011: 28 days), based 
on the average daily amount invoiced by suppliers during the year.
Charitable and political donations
The group made no political donations during the year (2011: 
£nil).  Details of the charitable donations policy can be found 
within the operating and ﬁnancial review on page 11.
Employee matters and environmental issues
Employee matters and environmental issues are discussed in the 
corporate social responsibility report on pages 14 to 16.
Future developments
Future developments are discussed in the operating and 
ﬁnancial review on pages 7 to 11.
Dividends
The directors recommend the payment of a ﬁnal dividend 
of 17.8p (2011: 15.6p) per ordinary share amounting to 
£12,074,000 (2011: £10,576,000) to be paid on 30 July 2012 to 
members on the register on 29 June 2012.  An interim dividend 
was declared and paid during the year of 8.7p per share (2010: 
7.8p per share) amounting to £5,885,000 (2011: £5,276,000).
Related party transactions
Related party transactions that took place during the year can 
be found in note 28.
Going concern 
At the end of the year, the group had cash of £35 million, and 
had an undrawn, unsecured loan facility of £35 million, expiring 
in May 2016.  The company’s cash and borrowing capacity is 
adequate to meet the foreseeable needs of the group, taking into 
account any risks (see pages 12 to 13).  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.  Therefore, the ﬁnancial 
statements have been prepared on a going concern basis.
The group’s liquidity review and commentary on the current 
economic climate are shown on page 11 of the operating and 
ﬁnancial review and commentary on ﬁnancial risk management 
is shown in note 27.
DIRECTORS’ REPORT continued
Independent auditor
Deloitte LLP has expressed its willingness to continue as the 
company’s auditor and a resolution for its re-appointment will 
be proposed at the forthcoming annual general meeting.  The 
notice of the annual general meeting can be found on pages 50 
to 54.
Directors’ report
Pages 2 to 22, inclusive, of this annual report comprise a report 
of the directors that has been drawn up and presented in 
accordance with English company law and the liabilities of the 
directors in connection with that report shall be subject to the 
limitations and restrictions provided by such law.  In particular, 
directors would be liable to the company (but not to any third 
party) if the directors’ report contains errors as a result of 
recklessness or knowing misstatement or dishonest concealment 
of a material fact, but would not otherwise be liable.
Statement as to disclosure of information  
to auditor
Each of the persons who is a director at the date of approval of 
this report conﬁrms that:
1.    so far as the director is aware, there is no relevant audit 
information of which the company’s auditor is unaware; 
and 
2.    the director has taken all the steps that he ought reasonably 
to have taken as a director in order to make himself aware 
of any relevant audit information and to establish that the 
company’s auditor is aware of that information.
This conﬁrmation is given and should be interpreted in 
accordance with the provisions of S.418 of the Companies  
Act 2006.
Annual general meeting
The annual general meeting will be held at the ofﬁces of  
PayPoint plc, 1 The Boulevard, Shire Park, Welwyn Garden City, 
Hertfordshire AL7 1EL, on 27 July 2012.  The notice of meeting 
and explanatory information on the resolutions to be passed at 
the annual general meeting can be found on pages 50 to 54 of 
the annual report. 
Approved by the board of directors and signed on behalf of  
the board.
Susan Court
Company Secretary
24 May 2012 PayPoint plc annual report 2012 23
REMUNERATION COMMITTEE REPORT
Introduction
This report has been prepared in accordance with Schedule 
8 to the Accounting Regulations under the Companies Act 
2006.  The report also meets the relevant requirements of the 
Listing Rules of the Financial Services Authority and describes 
how the board has applied the principles relating to directors’ 
remuneration in the UK Code on Corporate Governance (the 
Code). As required by the Act, a resolution to approve the report 
will be proposed at the annual general meeting of the company 
at which the ﬁnancial statements will be approved.
The Act requires the auditor to report to the company’s 
members on certain parts of the directors’ remuneration report 
and to state whether, in its opinion, those parts of the report 
have been properly prepared in accordance with the Accounting 
Regulations.  The report has, therefore, been divided into 
separate sections for audited and unaudited information.
Unaudited information
Remuneration committee
The remuneration committee is responsible for developing policy 
on remuneration for executive directors and senior management 
and for determining speciﬁc remuneration packages for each 
of the executive directors.  The committee members are all 
independent directors.  Andrew Robb is Chairman of the 
committee, with Eric Anstee, Stephen Rowley and Nick Wiles 
acting as committee members.
The remuneration committee received wholly independent 
advice on executive compensation and incentives from Kepler 
Associates during the year.  No other services were provided 
to the company by Kepler Associates during the year.  The 
remuneration committee is formally constituted with written 
terms of reference which set out the full remit of the committee. 
A copy of the terms of reference is available to shareholders 
by writing to the Company Secretary, whose contact details 
are set out on page 57.  The terms of reference are also 
available on the company’s website at www.paypoint.com.  
The remuneration committee met twice during the year and 
all members were in attendance except Eric Anstee who was 
absent from one meeting. 
Remuneration policy overview
The committee has adopted a remuneration policy so that total 
levels of compensation encourage and reward high performance 
and attract and retain individuals of the right calibre to ensure 
the company meets its objectives.  It is the opinion of the 
remuneration committee that shareholders’ interests are best 
served by focusing a greater proportion of total potential 
remuneration on performance-related compensation.
Short and long-term incentives are structured so as to align 
directors’ interests with those of shareholders by rewarding 
them for enhancing shareholder value.  It should be noted 
that the real value received by the executive directors under 
the share incentive arrangements will be dependent upon the 
degree to which the associated performance conditions have 
been satisﬁed at the end of the three year performance period 
and the share price of the company at this time.  This ensures 
that substantial rewards are only received when value has been 
created in the business.
The company’s comparator group for the purposes of 
benchmarking comparative total shareholder return (TSR) 
performance under the PayPoint Long-Term Incentive Plan (the 
LTIP) for awards granted to the end of the year under review 
was based on the FTSE 250 constituents (excluding investment 
trusts) at the date of the awards. 
Basic salary 
The remuneration committee’s policy is to set base salaries at 
median level.  Salaries are reviewed annually.  When determining 
the salary of the executive directors, the remuneration 
committee takes into consideration the levels of base salary for 
similar positions with comparable status, responsibility and skills 
in organisations of broadly similar size and complexity. These 
factors are considered in parallel with the following:
• the performance of the individual executive director;
• the individual executive director’s experience and 
responsibilities; and
• pay and conditions throughout the company.
Annual performance-related bonus
The annual bonus plan for the year ended 25 March 2012 
provided for a maximum cash bonus of 100% of salary. 
Executive directors were also eligible to participate in the 
PayPoint plc Deferred Share Bonus Plan (DSB).  Bonus recipients 
are subject to a 25% compulsory and maximum further 25% 
voluntary deferral.  The deferred bonus will be utilised for the  
acquisition of shares (Bonus Shares), with the opportunity of an 
additional award of shares (Matching Shares) of an equivalent 
value to the gross bonus deferred (i.e. up to 50% of salary), 
which equates to a maximum bonus potential of 150% of salary. 
 
The company’s bonus plan for the year ended 25 March 2012 
was based on the achievement of an economic proﬁt (operating 
proﬁt after tax and a charge for capital employed based on the 
company’s cost of capital) target.  Based upon the actual results 
for the year, 88.7% of the maximum bonus is payable. 
The remuneration committee believes that the use of economic 
proﬁt as the measure of performance for the annual bonus plan 
will encourage a focus on both proﬁt and capital efﬁciency, 
which are key to driving forward shareholder value and which 
are implicit in the calculation of economic proﬁt. 
The remuneration committee reviews and agrees targets at 
the beginning of each ﬁnancial year and may subsequently 
adjust those targets as appropriate for investments and start up 
costs that are approved after the targets have been set.  Bonus 
payments are not pensionable. 24 PayPoint plc annual report 2012
REMUNERATION COMMITTEE REPORT continued
The results are set out below:
 
70% 
payment
threshold
for 95% 
of plan 
delivery
£000
80%
payment 
threshold 
for plan 
delivery
£000
100% 
payment
threshold 
for 110% 
of plan 
delivery
£000
Actual 
results
£000
Economic 
proﬁt 18,590 19,568 21,525 20,415
Deferred Share Bonus Plan (DSB)
The current DSB plan was adopted at the 2009 annual general 
meeting.  
Executive Directors are required to defer at least 25% of their 
cash bonus under the plan.  Deferred awards are eligible for 
matching shares, which is subject to:
• minimum earnings per share growth of RPI+3% p.a. over a 
three year period; and
• the participant still being employed by the company at the 
end of the three year deferral period.      
In addition to the 25% mandatory deferral, the executive 
directors may elect to defer up to a further 25% of their cash 
bonus received in respect of the year ending 25 March 2012 
into company shares.  Any additional deferral will also be 
eligible for matching shares.  
Details of the awards made under the DSB during the year 
are set out on page 27.  If a participant disposes of any of 
their deferred shares during the three year deferral period, 
a corresponding proportion of matching shares is forfeited.  
The committee also has discretion to increase or decrease 
award sizes under the annual bonus and deferred plan, taking 
into account the appropriate level of total compensation of 
executives of the company.  Senior managers of the company 
are also able to participate in the DSB and receive matching 
awards based on tailored performance conditions.
No matching shares were released in the current year.
Long Term Incentive Plan (LTIP)
The current LTIP plan was adopted at the 2009 annual general 
meeting to replace the previous plan that expired in  
September 2009.  
Executive directors and senior managers are eligible to 
participate in the LTIP .  Under the current rules, the maximum 
annual award that can be made to an individual is 150% of 
salary. In exceptional circumstances, this limit may be exceeded 
but grant levels will be subject to acceptable market practice 
and remain below a maximum approved by the remuneration 
committee.  There is no present intention to exceed the stated 
maximum of 150% of salary. 
Eligible executives are awarded rights to a maximum number of 
shares at the beginning of a three year period, a proportion of 
which they will be entitled to acquire at the end of that period 
depending on the extent to which (if at all) the performance 
conditions set by the remuneration committee at the time of the 
allocation is made are satisﬁed.
During the year, Dominic Taylor received an LTIP award 
equivalent to 120% of salary and George Earle and Tim Watkin-
Rees received LTIP awards equivalent to 100% of salary.  Awards 
made in the period were granted as conditional awards of 
shares.  During the year, the ﬁfth tranche of the LTIP awards, 
which were granted in 2008, failed to meet the performance 
conditions, resulting in a nil vesting.  Details of the LTIP awards 
made to the executive directors during the year are set out on 
page 26.
The performance conditions for the awards made during the 
year under the LTIP are set out in the following table:
Total Shareholder Return (TSR)  
position against comparator group 
LTIP % of shares 
released 
Below median 0% 
Median 30%* 
Upper quartile 100%* 
*There is proportionate vesting between points.
In addition to the above comparative TSR performance of 
the company, the remuneration committee will, in any event, 
satisfy itself that the recorded TSR is a genuine reﬂection of the 
underlying ﬁnancial performance of the company before the 
release of any share awards under the LTIP , in accordance with 
the ABI guidelines.
Comparative TSR was selected as the performance condition for 
LTIP awards by the remuneration committee, as it ensures that 
the executives have outperformed their peers in the comparator 
group over the measurement period in delivering shareholder 
value, before being entitled to receive any of their awards, 
irrespective of general market conditions.
Performance measurement
The remuneration committee determines whether the 
performance conditions for share awards are satisﬁed.  Where 
the performance requirements are based on earnings per 
share, the remuneration committee will use the principles 
behind the audited ﬁgures disclosed in the company’s ﬁnancial 
statements and may take advice from independent advisers as 
to whether any adjustments are required to ensure consistency 
in accordance with the terms of the performance conditions. 
Where used as a performance measure, TSR shall be calculated 
by the remuneration committee’s independent advisers. 
Performance conditions under the LTIP and DSB are not subject 
to re-testing. PayPoint plc annual report 2012 25
Total Shareholder Return (TSR) 
performance graph
REMUNERATION COMMITTEE REPORT continued
The graph shows the company’s performance, measured by TSR, 
compared with the company’s comparator (FTSE 250 excluding 
investment trusts).
Share Incentive Plan (SIP)
The SIP was approved by shareholders prior to admission and 
adopted by the company at admission.
The board’s objective is to give employees the opportunity to:
• invest part of their salary in company shares; and
• build up a shareholding in the company.
The company is currently offering eligible employees, including 
executive directors and senior managers, the opportunity to 
purchase £1,500 of shares a year out of pre-tax salary and 
provide additional matching shares on a one matching share 
for every share purchased basis.  These matching shares will 
normally be released three years after they have been awarded 
provided that the associated shares purchased by the employee 
have been retained and provided the employee is still employed 
by a group company at the time.
Details of shares held in the SIP by executive directors are set out 
on page 27. 
Dilution
In accordance with the ABI guidelines, the company can issue 
a maximum of 10% of its issued share capital in a rolling ten 
year period to employees under all its share plans.  The company 
can only use half of the maximum (5%) to satisfy awards under 
discretionary or executive plans.
Pension
The company pays the equivalent of 12% of the executive 
director’s basic salary for personal pension plans. 
Executive directors’ contracts
Details of the service contracts of the executive directors of the 
company are as follows:
Name Company notice period Contract date
D Taylor 12 months 13 September 2004
G Earle 12 months 30 September 2004
T Watkin-Rees 12 months 13 September 2004















There are no special provisions in service contracts relating to 
cessation of employment or change of control.  The policy 
on termination is that the company does not make payments 
beyond its contractual obligations and executive directors will be 
expected to mitigate their loss.
In addition, the remuneration committee ensures that there are 
no unjustiﬁed payments for failure.
Non-executive directors 
The remuneration of the non-executive directors is determined 
by the board based upon recommendations from the Chairman 
and Chief Executive (or, in the case of the Chairman, based on 
recommendations from the Senior Independent Director and 
the Chief Executive) and is within the limits set by the articles 
of association.  Non-executive directors do not participate in 
any bonus plan or share incentive programme operated by the 
company and are not entitled to pension contributions or other 
beneﬁts provided by the company.  The non-executive directors 
do not have service contracts.  They are appointed under letters 
of appointment which are subject to a three year term. Details 
of the terms of appointment of the non-executive directors are 
set out in the table below:
Name Date of appointment Expiry date 
D Morrison 10 August 2004 10 August 2013 
D Newlands 10 August 2004 10 August 2013 
A Robb 10 August 2004 10 August 2013 
E Anstee 16 September 2008 10 August 2013
S Rowley 16 September 2008 10 August 2013
N Wiles 22 October 2009 10 August 2013
Under the company’s articles of association, all directors are 
required to submit themselves for re-election every three years. 
However, in order to comply with the Code and as reported last 
year, all directors will be subject to annual re-election.  
Compliance
The board has reviewed the group’s compliance with the Code 
on remuneration related matters. It is the opinion of the board 
that the group had complied with all remuneration related 
aspects of the Code during the period since admission. 26 PayPoint plc annual report 2012
REMUNERATION COMMITTEE REPORT continued
Audited information
Directors’ emoluments
 Salary
1
Bonus
Beneﬁts in
kind
2
Total Pension
3
Total
2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011
£000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000
Executive 
D Taylor 409 392 352 228 10 7 771 627 48 46 819 673
G Earle 313 300 267 173 15 11 595 484 75 59 670 543
T Watkin-Rees 287 258 244 148 8 6 539 412 33 29 572 441
Non-executive       
D Newlands 125 120 - - - - 125 120 - - 125 120
A Robb 45 43 - - - - 45 43 - - 45 43
D Morrison 38 36 - - - - 38 36 - - 38 36
R Wood
4 
- 10 - - - - - 10 - - - 10
E Anstee 45 43 - - - - 45 43 - - 45 43
S Rowley 38 36 - - - - 38 36 - - 38 36
N Wiles 38 36 - - - - 38 36 - - 38 36
Total 1,338 1,274 863 549 33 24 2,234 1,847 156 134 2,390 1,981
Number of 
shares at 
27 March 
2011 
Number of
 shares 
awarded 
during 
the year
3
Number of 
shares
 lapsed 
during the 
year
Number of 
shares at 
25 March 
2012
Value of
 shares 
awarded Date of grant Date lapsed Release date
D Taylor 55,512
3
55,512
4
£336,958 04.06.08 04.06.11
86,445
2
86,445 £456,000 04.06.09 04.06.12
162,857
5
162,857 £456,000 28.05.10 28.05.13
96,266
6
96,266 £476,517 27.05.11 27.05.14
G Earle 37,693
3
37,693
4
 £228,797 04.06.08 04.06.11
54,526
2
54,526 £287,625 04.06.09 04.06.12
102,723
5
102,723 £287,624 28.05.10 28.05.13
60,720
6
60,720 £300,564 27.05.11 27.05.14
T Watkin-Rees 31,474
3
31,474
4
 £191,047 04.06.08 04.06.11
46,578
2
46,578 £245,700 04.06.09 04.06.12
87,750
5
87,750 £245,700 28.05.10 28.05.13
55,555
6
55,555 £274,997 27.05.11 27.05.14
1. Salary is the total salary paid during the year and includes payment of a car allowance as part of the contract of employment.  From 1 April 2012, executive directors 
base salaries were: D. Taylor £409,013; G Earle £310,000; T Watkin-Rees £284,000.
2. Beneﬁts include private medical cover, permanent health insurance and life assurance.
3. Deﬁned contribution pension scheme, of which two current directors are members.  The remuneration committee has agreed that G Earle’s pension contributions will 
be paid direct to him (grossed up for tax).
4. R Wood retired on 7 July 2010.
Long Term Incentive Plan
1
1. Awards under the LTIP will only vest if the company’s comparative TSR performance is equal to or greater than the median level of performance over the three year 
holding period, at which point 30% of awards will vest, with full vesting occurring for upper quartile performance (proportionate vesting between points).
2. Awards were granted at a price of £5.28 per share (the closing price on the preceding dealing day).
3. Granted as a conditional award of shares.
4. At the date of lapse, the market value was £5.32 per share.
5. Awards were granted at a price of £2.80 per share (the closing price on the preceding dealing day).
6. Awards were granted at a price of £4.95 per share. PayPoint plc annual report 2012 27
REMUNERATION COMMITTEE REPORT continued
Deferred Share Bonus Plan
Number 
of Bonus 
Shares 
purchased 
at 
27 March 
2011
2
Number of 
Matching 
Shares 
awarded at
27 March
2011
3
Number 
of Bonus 
Shares 
purchased/ 
(released) 
during the 
year
Number of 
Matching 
Shares 
awarded/ 
(lapsed) 
during the 
year
Number 
of Bonus 
Shares 
purchased 
at 
25 March 
2012
Number 
of 
Matching 
Shares 
awarded 
at 
25 March
2012
Value of 
Matching 
Shares 
awarded
Date of 
grant
Date 
lapsed/
release 
date
4
D Taylor 5,865 9,942 (5,865) (9,942) -- £61,626 04.06.08 04.06.11
9,241
1
15,663
1
9,241
1
15,663
1
£83,014 04.06.09 04.06.12
16,150
5
27,905
5
16,150
5
27,905
5
£80,273 01.06.10 01.06.13
10,785
6
22,469
6
10,785
6
22,469
6
£115,282 02.06.11 02.06.14
31,256 53,510 4,920 12,527 36,176 66,037
   
G Earle 4,779 8,101 (4,779) (8,101) -- £50,215 04.06.08 04.06.11
7,097
1
12,029
1
7,097
1
12,029
1
£63,754 04.06.09 04.06.12
12,224
5
21,122
5
12,224
5
21,122
5
£60,761 01.06.10 01.06.13
8,163
6
17,007
6
8,163
6
17,007
6
£87,258 02.06.11 02.06.14
24,100 41,252 3,384 8,906 27,484 50,158
   
T Watkin-Rees 3,990 6,764 (3,990) (6,764) -- £41,927 04.06.08 04.06.11
6,035
1
10,228
1
6,035
1
10,228
1
£54,208 04.06.09 04.06.12
10,442
5
18,043
5
10,442
5
18,043
5
£51,903 01.06.10 01.06.13
6,973
6
14,528
6
6,973
6
14,528
6
£74,539 02.06.11 02.06.14
20,467 35,035 2,983 7,764 23,450 42,799
1. The Bonus Shares were purchased and the Matching Shares awarded at a share price of £5.30.
2. Bonus Shares are purchased with the bonus deferred after the deduction of tax.
3. Matching Shares are awarded based on the value of the gross bonus deferred.
4. No Matching Shares will be released unless the company’s earnings per share growth is 3% p.a. in excess of the Retail Prices Index over the three year holding period.
5. The Bonus Shares were purchased and the Matching Shares awarded at a share price of £2.88.
6. The Bonus Shares were purchased and the Matching Shares awarded at a share price of £5.13.
Number of 
Partnership 
Shares 
purchased 
at 27 March 
2011
Number of 
Matching 
Shares 
awarded at 
27 March 
2011
Number 
of Free 
Shares
1
 
awarded at  
27 March 
2011
Dividend 
Shares
2
 
acquired at 
27 March 
2011
Total 
shares at 
27 March 
2011
Number of 
Partnership 
Shares
3
 
purchased 
during the 
year
Matching 
Shares
4
 
awarded 
during the 
year
Dividend 
Shares 
acquired 
during the 
year
Dates of 
release of 
Matching 
and Free 
Dividend 
Shares
Total 
shares at 
25 March 
2012
D Taylor 2,259 2,259 1,562 930 7,010 288 288 296 15.04.11 – 
15.03.14
7,882
G Earle 2,282 2,282 – 591 5,155 288 288 258 15.04.11 – 
15.03.14
5,989
T Watkin-Rees 2,282 2,282 1,562 932 7,058 288 288 297 15.04.11 – 
15.03.14
7,931
Share Incentive Plan
1. Free Shares are ordinary shares of the company awarded conditionally on 24 September 2004 based on the share price on admission of £1.92. 
2. Dividend Shares are ordinary shares of the company purchased with the value of dividends paid in respect of all other shares held in the plan.
3. Partnership Shares are ordinary shares of the company purchased on a monthly basis during the year (at prices from £4.57 to £6.15).
4. Matching Shares are ordinary shares of the company awarded conditionally on a monthly basis during the year (at prices from £4.57 to £6.15) in conjunction with two 
share purchases. 28 PayPoint plc annual report 2012
Ordinary shares of 
1/3p each 
25 March 
2012
E Anstee 1,700
G Earle
1
 208,590
D Morrison
2
 35,000
D Newlands
3
241,599
A Robb 18,000
S Rowley 21,116
D Taylor 1,659,068
T Watkin-Rees
4 
726,743
N Wiles 25,000
REMUNERATION COMMITTEE REPORT continued
Directors’ shareholdings
The directors serving during the period who had interests in the shares of the company were as follows:
1. Includes 208,590 shares held by Mrs C Earle.
2. Held by Prospect Investment Management Limited in which David Morrison has a 74% beneﬁcial interest.
3. D Newlands holds a non-beneﬁcial interest in a further 900,000 shares held in various trusts of which he is a trustee (2011: 900,000).
4. Includes 516,623 shares held by Mrs E Watkin-Rees.
Between the end of the year and 24 May 2012, D Taylor, G Earle and T Watkin-Rees each acquired 39 Partnership and Matching Shares.
The market price of the company’s shares on 25 March 2012 was £6.04 (27 March 2011: £4.18) per share and the low and high 
share prices during the year were £4.15 and £6.38 respectively.
This report covers the remuneration of all directors that served during the year.
This report has been approved by the remuneration committee.
Andrew Robb
Chairman, remuneration committee
24 May 2012 PayPoint plc annual report 2012 29
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The directors are responsible for preparing the annual report and the ﬁnancial statements in accordance with applicable law and 
regulations.
Company law requires the directors to prepare ﬁnancial statements for each ﬁnancial year.  Under that law, the directors are required 
to prepare the group ﬁnancial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the 
European Union and Article 4 of the IAS Regulation and have also chosen to prepare the parent company ﬁnancial statements under 
IFRS as adopted by the European Union.  Under company law, the directors must not approve the accounts unless they are satisﬁed 
that they give a true and fair view of the state of affairs of the company and of the proﬁt or loss of the company for that period.  In 
preparing these ﬁnancial statements, International Accounting Standard 1 requires that directors:
• properly select and apply accounting policies;
• present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable 
information; 
• provide additional disclosures when compliance with the speciﬁc requirements in IFRS are insufﬁcient to enable users to 
understand the impact of particular transactions, other events and conditions on the entity’s ﬁnancial position and ﬁnancial 
performance; and
• make an assessment of the company’s ability to continue as a going concern.
The directors are responsible for keeping adequate accounting records that are sufﬁcient to show and explain the company’s 
transactions and disclose with reasonable accuracy at any time the ﬁnancial position of the company and enable them to ensure 
that the ﬁnancial statements comply with the Companies Act 2006.  They are also responsible for safeguarding the assets of the 
company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and ﬁnancial information included on the company’s 
website.  Legislation in the United Kingdom governing the preparation and dissemination of ﬁnancial statements may differ from 
legislation in other jurisdictions.
Responsibility statement 
We conﬁrm that to the best of our knowledge:
• the ﬁnancial statements, prepared in accordance with IFRS, give a true and fair view of the assets, liabilities, ﬁnancial position and 
proﬁt or loss of the company and the undertakings included in the consolidation taken as a whole; and
• the management report, which is incorporated into the directors’ report, includes a fair review of the development and 
performance of the business and the position of the company and the undertakings included in the consolidation taken as a 
whole, together with a description of the principal risks and uncertainties that they face.
Dominic Taylor 
Chief Executive
24 May 2012 30 PayPoint plc annual report 2012
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF PAYPOINT PLC
We have audited the ﬁnancial statements of PayPoint plc for the 
year ended 25 March 2012 which comprise the consolidated 
income statement, consolidated statement of comprehensive 
income, the consolidated and parent company balance sheets, 
the consolidated and parent company cash ﬂow statements, 
the consolidated and parent statement of changes in equity and 
the related notes 1 to 29.  The ﬁnancial reporting framework 
that has been applied in their preparation is applicable law and 
International Financial Reporting Standards (IFRS) as adopted by 
the European Union.
This report is made solely to the company’s members, as a body, 
in accordance with Chapter 3 of Part 16 of the Companies Act 
2006.  Our audit work has been undertaken so that we might 
state to the company’s members those matters we are required 
to state to them in an auditor’s 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 and 
the company’s members as a body, for our audit work, for this 
report, or for the opinions we have formed.
Respective responsibilities of directors  
and auditor
As explained more fully in the statement of directors’ 
responsibilities, the directors are responsible for the preparation 
of the ﬁnancial statements and for being satisﬁed that they give 
a true and fair view.  Our responsibility is to audit and express 
an opinion on the ﬁnancial statements in accordance with 
applicable law and International Standards on Auditing (UK 
and Ireland).  Those standards require us to comply with the 
Auditing Practices Board’s Ethical Standards for Auditors.
Scope of the audit of the ﬁnancial statements
An audit involves obtaining evidence about the amounts 
and disclosures in the ﬁnancial statements sufﬁcient to give 
reasonable assurance that the ﬁnancial statements are free 
from material misstatement, whether caused by fraud or 
error.  This includes an assessment of: whether the accounting 
policies are appropriate to the company’s circumstances and 
have been consistently applied and adequately disclosed; the 
reasonableness of signiﬁcant accounting estimates made by 
the directors; and the overall presentation of the ﬁnancial 
statements.  In addition, we read all the ﬁnancial and non-
ﬁnancial information in the annual report to identify material 
inconsistencies with the audited ﬁnancial statements.  If we 
become aware of any apparent material misstatements or 
inconsistencies, we consider the implications for our report.
Opinion on ﬁnancial statements
In our opinion, the ﬁnancial statements:
• give a true and fair view of the state of the group’s affairs as 
at 25 March 2012 and of its proﬁt for the year then ended;
• have been properly prepared in accordance with IFRSs as 
adopted by the European Union; and
• have been prepared in accordance with the requirements of 
the Companies Act 2006.
Opinion on other matters prescribed by the 
Companies Act 2006
In our opinion:
• the part of the directors’ remuneration report to be 
audited has been properly prepared in accordance with the 
Companies Act 2006; and
• the information given in the directors’ report for the ﬁnancial 
year for which the ﬁnancial statements are prepared is 
consistent with the ﬁnancial statements.
Matters on which we are required to report  
by exception
We have nothing to report in respect of the following:
Under the Companies Act 2006, we are required to report to 
you if, in our opinion:
• adequate accounting records have not been kept, or returns 
adequate for our audit have not been received from branches 
not visited by us; or
• the ﬁnancial statements and the part of the directors’ 
remuneration report to be audited are not in agreement with 
the accounting records and returns; or
• certain disclosures of directors’ remuneration speciﬁed by law 
are not made; or
• we have not received all the information and explanations we 
require for our audit.
Under the Listing Rules,we are required to review:
• the directors’ statement, contained within the directors’ 
report, in relation to going concern;
• the part of the corporate governance statement relating to 
the group’s compliance with the nine provisions of the UK 
Corporate Governance Code speciﬁed for our review; and
• certain elements of the report to the shareholders by the 
board on directors’ remuneration.
Edward Hanson ACA (Senior Statutory Auditor)
for and on behalf of Deloitte LLP
Chartered Accountants and Statutory Auditors 
London, UK
24 May 2012 PayPoint plc annual report 2012 31
CONSOLIDATED INCOME STATEMENT
Note
Year 
ended
25 March 
2012 
£000
Year 
ended
27 March 
2011
£000
Continuing operations
Revenue 2 200,029 193,233
Cost of sales (121,778) (122,567)
Gross proﬁt 78,251 70,666
Administrative expenses (39,385) (34,614)
Operating proﬁt 5 38,866 36,052
Share of loss of joint venture 13 (1,828) (1,541)
Investment income 6 195 88
Finance costs 6 (32) (143)
Proﬁt before tax 37,201 34,456
Tax 7 (10,262) (10,614)
Proﬁt for the year 24 26,939 23,842
  
Attributable to:  
Equity holders of the parent 26,975 23,883
Non-controlling interests 25 (36) (41)
26,939 23,842
  
Earnings per share  
Basic 9 39.8p 35.2p
Diluted 9 39.8p 35.1p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Note
Year 
ended
25 March 
2012 
£000
Year 
ended
27 March 
2011
£000
Exchange differences on translation of foreign operations 24 (831) (72)
Net income recognised directly in equity (831) (72)
Proﬁt for the year 26,939 23,842
Total recognised income and expenses for the year 26,108 23,770
  
Attributable to:  
Equity holders of the parent 26,144 23,811
Non-controlling interests (36) (41)
26,108 23,770 32 PayPoint plc annual report 2012
CONSOLIDATED BALANCE SHEET
Note
25 March
2012
£000
27 March
2011
£000
Non-current assets 
Goodwill 10 56,076 57,133
Other intangible assets 11 2,304 1,329
Property, plant and equipment 12 15,212 14,520
Investment in joint venture 13 58 135
Deferred tax asset 14 901 1,116
Investments 15 435 435
74,986 74,668
Current assets  
Inventories 16 1,284 915
Trade and other receivables 17 21,443 17,103
Cash and cash equivalents 18 35,487 26,464
58,214 44,482
Total assets 133,200 119,150
Current liabilities  
Trade and other payables 19 36,650 32,996
Current tax liabilities 4,938 5,287
Obligations under ﬁnance leases - 32
41,588 38,315
Non-current liabilities  
Other liabilities 22 247 240
247 240
Total liabilities 41,835 38,555
Net assets 91,365 80,595
Equity  
Share capital 24 226 226
Share premium 24 25 25
Investment in own shares 24 (216) (216)
Share-based payment reserve 24 3,138 3,005
Translation reserve 24 (360) 471
Retained earnings 24 88,629 77,125
Total equity attributable to equity holders of the parent company 91,442 80,636
Non-controlling interest 25 (77) (41)
Total equity 91,365 80,595
These ﬁnancial statements were approved by the board of directors and authorised for issue on 24 May 2012 and signed on behalf 
of the board of directors.
Dominic Taylor
Chief Executive 
24 May 2012 PayPoint plc annual report 2012 33
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Note
Year 
ended
25 March 
2012 
£000
Year 
ended
27 March 
2011
£000
Opening equity 80,595 70,744
Proﬁt for the year 26,939 23,842
Dividends paid 8 (16,450) (15,041)
Movement in investment in own shares 24 - 154
Exchange differences on translation of foreign operations 24 (831) (72)
Movement in share-based payment reserve 24 133 321
Adjustment in share scheme vesting 24 979 647
Closing equity 91,365 80,595
CONSOLIDATED CASH FLOW STATEMENT
Note
Year 
ended
25 March 
2012 
£000
Year 
ended
27 March 
2011
£000
Net cash ﬂow from operating activities 29 32,868 31,137
Investing activities   
Investment income - 70
Purchases of property, plant and equipment and technology (5,263) (3,160)
Proceeds from disposal of property, plant and equipment 20 61
Investment - (30)
Loan to joint venture 15 (1,750) (1,350)
Net cash used in investing activities (6,993) (4,409)
Financing activities  
Repayments of obligations under ﬁnance leases (32) (22)
Dividends paid 8 (16,450) (15,041)
Repayment of short-term borrowings 20 - (6,000)
Net cash used in ﬁnancing activities (16,482) (21,063)
Net increase in cash and cash equivalents 9,393 5,665
Cash and cash equivalents at beginning of year 26,464 20,769
Effect of foreign exchange rate changes (370) 30
Cash and cash equivalents at end of year 35,487 26,464 34 PayPoint plc annual report 2012
COMPANY BALANCE SHEET
Note
25 March
2012
£000
27 March
2011
£000
Non-current assets 
Investments 15 114,689 109,808
114,689 109,808
Current assets   
Trade and other receivables 17 487 511
Cash and cash equivalents 45 19
532 530
Total assets 115,221 110,338
Current liabilities   
Trade and other payables 19 - 54
Non-current liabilities   
Other liabilities 22 3,372 87,628
Total liabilities 3,372 87,682
Net assets 111,849 22,656
Equity   
Share capital 24 226 226
Share premium 24 25 25
Investment in own shares 24 (216) (216)
Share-based payment reserve 24 3,138 3,005
Retained earnings 24 108,676 19,616
Total equity 111,849 22,656
These ﬁnancial statements were approved by the board of directors and authorised for issue on 24 May 2012 and signed on behalf 
of the board of directors.
Dominic Taylor
Chief Executive
24 May 2011 PayPoint plc annual report 2012 35
COMPANY STATEMENT OF CHANGES IN EQUITY
Note
Year 
ended
25 March
2012 
£000
Year 
ended
27 March
2011 
£000
Opening equity 22,656 33,808
(Loss)/proﬁt for the year (469) 267
Dividends paid 8 (16,450) (15,041)
Dividends receivable 105,000 2,500
Movement in investment in own shares 24 - 154
Movement in share-based payment reserve 24 133 321
Adjustment in share scheme vesting 24 979 647
Closing equity 111,849 22,656
COMPANY CASH FLOW STATEMENT
Note
Year 
ended
25 March
2012 
£000
Year 
ended
27 March
2011 
£000
Net cash ﬂow from operating activities 29 21,358 21,604
Investing activities   
Investment - (30)
Loan to joint venture 15 (1,750) (1,350)
Investment in group companies 15 (3,132) (2,373)
Net cash used in investing activities (4,882) (3,753)
Financing activities  
Dividends received - 2,500
Dividends paid 8 (16,450) (15,041)
Repayment of short-term borrowings - (6,000)
Net cash used in ﬁnancing activities (16,450) (18,541)
Net increase/(decrease) in cash and cash equivalents 26 (690)
Cash and cash equivalents at beginning of year 19 709
Cash and cash equivalents at end of year 45 19 36 PayPoint plc annual report 2012
NOTES TO THE FINANCIAL STATEMENTS
1. Accounting policies
These ﬁnancial statements have been prepared on an historical 
cost basis and on the basis of the policies set out below.
Basis of preparation
The ﬁnancial statements have been prepared in accordance with 
International Financial Reporting Standards (IFRS) as adopted for 
use in the European Union and therefore comply with Article 4 
of the EU IAS Regulation.
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 review can be found in the operating and 
ﬁnancial review on page 10.  The group’s going concern position 
is further discussed in the directors’ report on page 22.  The 
ﬁnancial statements are prepared on a going concern basis.
At the date of authorisation of these ﬁnancial statements, the 
following standards and interpretations which have not been 
applied in these ﬁnancial statements were in issue but not yet 
effective:
IFRS 1 (amended) Severe Hyperinﬂation and Removal of Fixed 
Dates for First-time Adopters
Government Loans
IAS 12 (amended) Deferred Tax: Recovery of Underlying Assets
IAS 1 (amended) Presentation of items of other 
comprehensive income
IAS 19 (amended) Employee beneﬁts
IFRS 7 and IAS 32 
(amended)
Offsetting ﬁnancial assets and ﬁnancial 
liabilities
IFRS 9 Financial Instruments
IFRS 10 Consolidated ﬁnancial statements
IFRS 11 Joint arrangements
IFRS 12 Disclosure of interests in other entities
IAS 27 Separate ﬁnancial statements (2011)
IAS 28 Investments in associates and joint  
ventures (2011)
IFRS 13 Fair value measurement
Improvements to 
IFRS 2011 
Annual improvements to IFRS 2011
The group does not consider that these standards and 
interpretations will have a material impact on the ﬁnancial 
statements of the group when the respective standards or 
interpretations come into effect. 
The ﬁnancial statements are presented in pounds sterling 
because it is the currency of the primary economic environment 
in which the group operates.
The principal accounting policies adopted are set out below.
Basis of consolidation
PayPoint plc (the company) acts as a holding company.  The 
group accounts consolidate the accounts of the company and 
entities controlled by the company (its subsidiaries) drawn up 
to March each year.  Control is achieved where the company 
has the power to govern the ﬁnancial and operating policies 
of an entity in which it invests, so as to obtain beneﬁts from 
its activities.  The results of subsidiaries acquired or sold are 
consolidated for the periods from or to the date on which 
control passed.  All intergroup transactions, balances, income 
and expenses are eliminated on consolidation except for joint 
ventures.
Business combinations
The acquisition of subsidiaries is accounted for using the 
purchase method.  Investments are stated at cost less any 
required provision for impairment.  The cost of the acquisition 
is measured at the aggregate of the fair values, at the date of 
exchange, of assets given, liabilities incurred or assumed, and 
equity instruments issued by the group in exchange for control 
of the acquiree.  The acquired identiﬁable assets, liabilities and 
contingent liabilities that meet the conditions for recognition 
under IFRS 3 revised are recognised at their fair value at the 
acquisition date, except for non-current assets that are classiﬁed 
as held for resale in accordance with IFRS 5 Non-Current 
Assets Held for Sale and Discontinued Operations, which are 
recognised and measured at fair value less costs to sell.
Goodwill
Goodwill arising on consolidation represents the excess of the 
cost of acquisition over the group’s interest in the fair value of 
the identiﬁable assets and liabilities of a subsidiary, associate 
or jointly controlled entity at the date of acquisition.  Goodwill 
is initially recognised as an asset at cost and is subsequently 
measured at cost less any accumulated impairment losses. 
For the purpose of impairment testing, goodwill is allocated to 
each of the group’s cash-generating units expected to beneﬁt 
from the synergies of the combination.  Cash-generating units 
to which goodwill has been allocated are tested for impairment 
annually, or more frequently when there is an indication that the 
unit may be impaired. If the recoverable amount of the cash-
generating unit is less than the carrying amount of the unit, the 
impairment loss is allocated ﬁrst to reduce the carrying amount 
of any goodwill allocated to the unit and then to the other 
assets of the unit pro-rata on the basis of the carrying amount 
of each asset in the unit.  Any impairment loss for goodwill is 
recognised immediately in proﬁt or loss and is not reversed in a 
subsequent year. PayPoint plc annual report 2012 37
NOTES TO THE FINANCIAL STATEMENTS continued
Impairment of tangible and intangible assets 
other than goodwill
At each balance sheet date, the group reviews the carrying 
amounts of its tangible and intangible assets to determine 
whether there is any indication that those assets have suffered 
an impairment loss.  If any such indication exists, the recoverable 
amount of the asset is estimated in order to determine the 
extent of the impairment loss (if any).  Where the asset does not 
generate cash ﬂows that are independent from other assets, the 
group estimates the recoverable amount of the cash-generating 
unit to which the asset belongs.  An intangible asset with an 
indeﬁnite useful life is tested for impairment annually and 
whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell 
and value in use.  In assessing value in use, the estimated future 
cash ﬂows are discounted to their present value using a pre-tax 
discount rate that reﬂects current market assessments of the 
time value of money and the risks speciﬁc to the asset for which 
the estimates of future cash ﬂows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) 
is estimated to be less than its carrying amount, the carrying 
amount of the asset (or cash-generating unit) is reduced to its 
recoverable amount.  An impairment loss is recognised as an 
expense immediately.
The reversal of any impairment loss is limited by the net book 
value to which the relevant asset would have been reduced, had 
no impairment occurred.  A reversal of an impairment loss is 
recognised as income immediately.
Revenue
Revenue is measured at the fair value of the consideration 
received or receivable and comprises the value of sales of 
services (excluding sales taxes) in the normal course of business.
Revenue and cost of sales are recorded according to the 
actual transactions that occur in a given period.  In Ireland and 
Romania, PayPoint is principal in the supply chain for prepaid 
mobile top-ups.  Accordingly, revenue includes the sale price of 
the mobile top-ups and the cost of sales includes the cost of the 
mobile top-ups to PayPoint.
Dividend income from investments is recognised when the 
shareholders’ rights to receive payment have been established.
Cost of sales
Cost of sales includes agents’ commission, the cost of mobile 
top-ups and SIM cards where PayPoint acts as principal in their 
purchase and sale, consumables, communications, maintenance, 
depreciation and ﬁeld service costs and any external processing 
charges levied by credit card scheme sponsors.  All other costs 
are allocated to administrative expenses.
Pension costs
The group makes payments to a number of deﬁned contribution 
pension schemes.  The amounts charged to the proﬁt and loss 
account in respect of pension costs represent contributions 
payable in the year.  Differences between contributions payable 
in the year and contributions actually paid are shown as either 
accruals or prepayments in the balance sheet.
Share-based payments
Equity-settled share-based payments are measured at fair 
value at the date of grant.  The fair value determined at 
the grant date of the equity-settled share-based payments 
is expensed on a straight line basis over the vesting period, 
based upon independent advice that the shares will eventually 
vest.  Fair value is measured by use of either a Monte Carlo 
simulation or Black Scholes model depending upon the 
scheme.  The expected life used in the model has been 
adjusted, based on management’s best estimate, for the effects 
of non-transferability, exercise restrictions and behavioural 
considerations.
Interest income
Interest income is accrued on a time basis, by reference to 
the principal outstanding and at the effective interest rate 
applicable, which is the rate that exactly discounts estimated 
future cash receipts through the expected life of the ﬁnancial 
asset to that asset’s net carrying amount. 
Taxation
The group operates in a number of different tax jurisdictions 
which leads to some complexity in tax matters.  This requires a 
degree of estimation of liabilities and delays resolution of issues. 
The ﬁnal resolution of tax issues may give rise to variances in 
proﬁt and loss and cash.  The group’s policy is to pay tax when 
due but to minimise tax payments where practically possible, 
without engaging in aggressive tax schemes.
The tax expense represents the sum of the tax currently payable 
and deferred tax.  The tax currently payable is based on taxable 
proﬁt for the year.  Taxable proﬁt differs from net proﬁt as 
reported in the income statement because it excludes items of 
income or expense that are taxable or deductible in other years 
and items that are never taxable or deductible.  The group’s 
liability for current tax is calculated using tax rates that have been 
enacted or substantively enacted by the balance sheet date. 
Deferred tax is provided in full on temporary differences 
between the tax bases of assets and liabilities and their carrying 
amounts in the consolidated ﬁnancial statements.  The provision 
is calculated using tax rates that have been substantively 
enacted by the balance sheet date.  Deferred tax assets are 
recognised to the extent that it is probable that future taxable 
proﬁt will be available against which the tax will be realised.
Deferred tax liabilities are recognised for taxable temporary 
differences arising on investments in subsidiaries and interests 
in joint ventures, except where the group is able to control the 
reversal of the temporary difference and it is probable that the 
temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each 
balance sheet date and reduced to the extent that it is no longer 
probable that sufﬁcient taxable proﬁts will be available to allow 
all or part of the asset to be recovered.  Deferred tax is charged 
or credited in the income statement, except when it relates to 
items charged or credited directly to equity, in which case the 
deferred tax is also dealt with in equity. 38 PayPoint plc annual report 2012
NOTES TO THE FINANCIAL STATEMENTS continued
Foreign currency
Foreign currency transactions are translated into the functional 
currency using the exchange rates prevailing at the dates of 
the transaction.  At each balance sheet date, monetary assets 
and liabilities that are denominated in foreign currencies are 
retranslated at the rates prevailing on the balance sheet date. 
Non-monetary assets and liabilities carried at fair value that 
are denominated in foreign currency are translated at the rates 
prevailing at the date when fair value was determined.  Gains 
and losses arising on retranslation are included in net proﬁt or 
loss for the year, except for exchange differences arising on non-
monetary assets and liabilities where the changes in fair value 
are recognised directly in equity.
On consolidation, the assets and liabilities of the group’s 
overseas operations are translated at exchange rates prevailing 
on the balance sheet date. Income and expense items are 
translated at the average exchange rates for the period unless 
exchange rates ﬂuctuate signiﬁcantly.  Exchange differences 
arising, if any, are classiﬁed as equity and transferred to the 
group’s translation reserve.  Such translation differences are 
recognised as income or as expenses in the year of disposal of 
the operation.
Intangible assets
On acquisitions, the group has recognised contracts with 
merchants and technology, based on their estimated fair values 
as intangible assets.
Contracts with merchants are amortised on a straight-line 
basis, generally between one and ﬁve years, and technology is 
amortised over its estimated useful economic life of ten years.
Software development expenditure
The group develops computer software for internal use. 
Software development expenditure on large projects is 
recognised as an intangible asset if it is probable that the asset 
will generate future economic beneﬁts.  The costs that are 
capitalised are the directly attributable costs necessary to create 
and prepare the asset for operations.  Software development 
costs recognised as an intangible asset are amortised on a 
straight-line basis over its useful life.  Other software costs are 
recognised in administrative expenses when incurred. 
Property, plant and equipment
Property, plant and equipment are stated at cost, net of 
depreciation less provision for impairment.  Depreciation is 
provided at rates calculated to write off the cost, less estimated 
residual value, of each asset on a straight-line basis over its 
expected useful life.  The estimated useful lives are as follows 
and are reviewed on an annual basis: 
• freehold building – 50 years;
• leasehold improvements – over the life of the lease;
• terminals – 5 years;
• automatic teller machines – 4 years; and
• other classes of assets – 3 to 5 years. 
The gain or loss arising on the disposal or retirement of an asset 
is determined as the difference between the sales proceeds and 
the carrying amount of the asset and is recognised as income.
Inventories
Inventories are valued at the lower of cost or net realisable value.
Joint ventures
A joint venture entity is an entity in which the group holds a 
long term interest and shares joint control over the strategic, 
ﬁnancial and operating decisions with one or more other 
ventures under a contractual arrangement.  The group’s share of 
net assets, post tax proﬁt and loss and dividends are accounted 
for using the equity method of accounting.
Leases
Assets held under ﬁnance leases, which confer rights and 
obligations similar to those attached to owned assets, 
are capitalised as property, plant and equipment and are 
depreciated over the shorter of the lease terms and their useful 
lives.  The capital elements of future lease obligations are 
recorded as liabilities, while the interest elements are charged 
to the proﬁt and loss account over the period of the leases to 
produce a constant rate of charge on the remaining balance 
of liability.  Rentals under operating leases are charged on a 
straight-line basis over the lease term, even if the payments 
are not made on such a basis.  Beneﬁts received and receivable 
as an incentive to sign an operating lease are similarly spread 
on a straight-line basis over the lease term, except where the 
period to the review date on which the rent is ﬁrst expected to 
be adjusted to the prevailing market rate is shorter than the full 
lease term, in which case the shorter period is used.  Rentals 
received for ATMs from retail agents under operating leases are 
credited to income on a straight-line basis over the lease term.
Bank and other loans
Bank and other loans are initially measured at fair value, net  
of any attributable transaction costs, if any, and are 
subsequently measured at amortised cost using the effective 
interest rate method.
Dividends
Final dividends on ordinary shares are recognised in equity in the 
year in which they are approved by the company’s shareholders. 
Interim dividends are recognised when declared.
Own shares
PayPoint purchases its own shares for the purpose of employee 
share-based payment schemes.  Such shares are deducted from 
equity and no proﬁt or loss is recognised on the transactions.
Cash and cash equivalents
For the purpose of the cash ﬂow statement, cash and cash 
equivalents comprise cash at bank and in hand and short-term 
deposits maturing within three months and are subject to 
insigniﬁcant risk of changes in value.
Critical accounting judgments
The critical accounting judgments and key sources of estimation 
uncertainty in the business are the valuation of goodwill of 
£56.1 million at 25 March 2012 (2011: £57.1 million) and other 
intangible assets of £2.3 million at 25 March 2012 (2011:  
£1.3 million).  Management reviews goodwill for any 
impairment on an annual basis (note 10). Intangible assets 
are amortised over their economic useful life (note 11).  The 
accounting policies for goodwill and intangible assets are 
included above in this note 1. PayPoint plc annual report 2012 39
NOTES TO THE FINANCIAL STATEMENTS continued
2. Segmental reporting, revenue, net revenue
    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 retailers and clients, the settlement of funds 
(collection and transmission) and transmission of data in a 
secure environment by the application of technology.
The application of technology is directed on a group basis by 
the group’s executive (comprising 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 net revenue analysis is shown in 
the operating and ﬁnancial review. 
Whilst the group has a number of different services and 
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 service provider for consumer payment 
and value added transactions.
(ii) Revenue, net revenue and cost of sales
Revenue comprises the value of sales (excluding sales taxes) of 
services in the normal course of business. 
 
Revenue performance of the business is measured by net 
revenue, which is calculated as the total revenue from clients 
less commissions paid to retail agents, 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
Year 
ended
25 March 
2012
£000
Year 
ended
27 March 
2011
£000
Revenue – transaction processing 198,699 191,742
              – service charge income 
                 from ATMs 1,330 1,491
200,029 193,233
less:   
Commission payable to retail agents (69,541) (71,322)
Cost of mobile top-ups and SIM 
cards as principal (38,579) (37,696)
Card scheme sponsors’ charges (1,467) (1,492)
Net revenue 90,442 82,723
  
Cost of sales
Year 
ended
25 March 
2012
£000
Year 
ended
27 March 
2011
£000
Cost of sales 
Commission payable to retail agents 69,541 71,322
Cost of mobile top-ups and SIM 
cards as principal 38,579 37,696
Card scheme sponsors’ charges 1,467 1,492
Depreciation and amortisation 3,333 3,612
Other 8,858 8,445
Total cost of sales 121,778 122,567
Geographical information
Revenue 
UK 153,734 148,737
Ireland 20,537 22,475
Romania 24,275 21,036
North America 1,483 985
Total 200,029 193,233
Non-current assets
UK 72,765 71,850
Romania 1,766 2,329
North America 455 489
Total 74,986 74,668
3. Employee information
Group Company
2012 2011 2012 2011
Average number of 
persons employed 
Sales, distribution and 
marketing 205 180 - -
Operations and 
administration 375 369 6 6
580 549 6 6
Staff costs during 
the year (including 
directors) £000 £000 £000 £000 
Wages and salaries 22,888 19,185 625 399
Social security costs 2,304 2,339 47 36
Pension costs  
(note 26) 713 674 21 -
25,905 22,198 693 435
Directors’ emoluments, pension contributions and share options 
are disclosed in the remuneration committee report on pages 
23 to 28. Included within staff costs is a share based payment 
charge (note 24) of £1,112,000 (2011: £1,088,000). 40 PayPoint plc annual report 2012
NOTES TO THE FINANCIAL STATEMENTS continued
4. Proﬁt of parent company
The company has taken advantage of the exemption under 
S.408 of the Companies Act 2006 and consequently the income 
statement of the parent company is not presented as part of 
these ﬁnancial statements.  The loss of the parent company 
for the ﬁnancial year amounted to £469,000 (2011: proﬁt 
£267,000).
5. Operating proﬁt
        Group
Year 
ended
25 March 
2012
£000
Year 
ended
27 March 
2011
£000
Operating proﬁt is after charging/
(crediting): 
Inventory expensed – cost of mobile 
top-ups and SIM cards as principal 40,046 37,696
Depreciation on owned assets 3,085 3,295
Loss on disposal of property, plant 
and equipment 16 115
Amortisation of intangible assets 248 317
Operating leases: 
– other operating lease charges 277 270
– ATM service charge income (1,330) (1,491)
Auditor’s remuneration (note below) 265 292
Staff costs (note 3) 25,905 22,198
2012
£000
2011
£000 
Auditor’s remuneration: 
Fees payable to the company’s 
auditor for the audit of the 
company’s annual accounts 10 10
Fees payable to the company’s 
auditor for the audit of the 
company’s subsidiaries 137 125
Total audit fees 147 135
Fees payable to the group’s auditor 
for the review of the interim results 22 21
Audit-related assurance services 22 21
Fees payable to the group’s auditor 
and its associates for other services to 
the group:  
Tax compliance services 64 70
Tax advisory services 32 60
Other – assurance services - 6
Total other services 96 136
Total auditor’s remuneration 265 292
Fees payable to Deloitte LLP and its associates for non-audit 
services to the company are not required to be disclosed because 
the consolidated ﬁnancial statements are required to disclose 
such fees on a consolidated basis.  A description of the work 
of the audit committee is set out on page 18 and includes an 
explanation of how auditor independence is safeguarded where 
non-audit services are provided by the auditor.
6. Investment income and ﬁnance costs 
Investment income comprises interest on current and deposit 
accounts.
Investment income
Year 
ended
25 March 
2012
£000
Year 
ended
27 March 
2011
£000
Bank deposit interest 195 88
Finance costs
Year 
ended
25 March 
2012
£000
Year 
ended
27 March 
2011
£000
Bank charges 32 55
Finance charges - 88
32 143 PayPoint plc annual report 2012 41
NOTES TO THE FINANCIAL STATEMENTS continued
7. Tax
Year 
ended
25 March 
2012
£000
Year 
ended
27 March 
2011
£000
Current tax
Charge for current year 10,270 10,869
Adjustment in respect of prior years (223) (304)
Current tax charge 10,047 10,565
  
Deferred tax  
Charge/(credit) for current year 153 (51)
Adjustment in respect of prior years 62 100
Deferred tax charge (note 14) 215 49
  
Total income tax  
Income tax charge 10,262 10,614
  
The income tax charge is based on 
the United Kingdom statutory rate of 
corporation tax for the year of 26% 
(2011: 28%)
  
The charge for the year can be 
reconciled to the proﬁt before tax as 
set out in the consolidated income 
statement 
  
Proﬁt before tax 
37,201 34,456
Tax at the UK corporation tax rate of 
26% (2011: 28%) 
9,672 9,648
Tax effects of:
(Losses)/income in countries where 
the tax rate is different to the UK 
(17) 109
Disallowable expenses 
28 61
Utilisation of tax losses not previously 
recognised 
- (85)
Losses in companies where a 
deferred tax asset is not recognised 
576 652
Adjustments in respect of prior years
(161) (204)
Research and development 
allowance
(291) -
Tax impact of share-based payments
396 393
Revaluation of deferred tax asset 
from 27% to 25% 59 40
Actual amount of tax charge 10,262 10,614
 8. Dividends on equity shares
Year 
ended
25 March 
2012
£000
Year 
ended
27 March 
2011
£000
Equity dividends on ordinary 
shares: 
Interim dividend paid of 8.7p per 
share (2011: 7.8p) 5,885 5,276
Proposed ﬁnal dividend of 17.8p 
per share (2011: paid 15.6p per 
share) 12,074 10,576
Total dividends paid and 
recommended of 26.5p per share 
(2011: 23.4p per share) 17,959 15,852
Amounts distributed to equity 
holders in the year:   
Final dividend for the prior year 10,565 9,765
Interim dividend for the current 
year 5,885 5,276
16,450 15,041
The proposed ﬁnal dividend is subject to approval by 
shareholders at the annual general meeting and has not been 
included as a liability in these ﬁnancial statements.
9. Earnings per share
Basic earnings per share
Basic and diluted earnings per share are calculated on the 
following proﬁts and number of shares.
Year 
ended
25 March 
2012
£000
Year 
ended
27 March 
2011
£000
Proﬁt for basic and diluted 
earnings per share is the net proﬁt 
attributable to equity holders of 
the parent 26,975 23,883
25 March 
2012
Number of 
shares
27 March
2011
Number of 
shares
Weighted average number of 
ordinary shares in issue (for basic 
earnings per share) 67,766,430 67,721,190
Potential dilutive ordinary 
shares: 
Long-term incentive plan - -
Deferred share bonus - 157,914
Diluted basis 67,766,430 67,879,104 42 PayPoint plc annual report 2012
NOTES TO THE FINANCIAL STATEMENTS continued
10. Goodwill
The group tests goodwill annually for impairment or more 
frequently if there are indications that goodwill might be 
impaired.  The recoverable amounts of the cash generating 
units are determined from value in use calculations.  The key 
assumptions for the value in use calculations are those regarding 
the discount rates, growth rates and expected changes to 
selling prices and direct costs during the period.  Management 
estimates discount rates using pre-tax rates that reﬂect current 
market assessments of the time value of money and the risks 
speciﬁc to the cash generating units.  The growth rates are 
based on industry growth forecasts.  Changes in selling prices 
and direct costs are based on past experience and expectation 
of future changes in the market.
The group prepares cash ﬂow forecasts derived from the most 
recent ﬁnancial budgets approved by management for the next 
four years and extends cash ﬂows to perpetuity.  Terminal values 
are based on growth rates that do not exceed 3%.  The post 
tax rate used to discount the forecast cash ﬂows is based on the 
group’s estimated weighted average cost of capital of 8.5%, 
adjusted for country or business speciﬁc risk premiums of up to 
1.5%.
Total 
£000
Cost 
At 27 March 2011 57,133
Exchange rate adjustment (1,057)
At 25 March 2012 56,076 
Accumulated impairment losses  
At 27 March 2011 - 
 
Impairment losses for the year 
At 25 March 2012 - 
 
Carrying amount  
At 25 March 2012 56,076
At 27 March 2011 57,133
Total 
£000
Cost 
At 28 March 2010 56,872 
Adjustment 446
Exchange rate adjustment (185)
At 27 March 2011 57,133
Accumulated impairment losses 
At 28 March 2010 - 
Impairment losses for the year
At 27 March 2011 - 
Carrying amount
At 27 March 2011 57,133
At 28 March 2010 56,872 
25 March
2012
£000
27 March
2011
£000
PayPoint.net 18,207 18,207
PayPoint Romania 8,547 9,312
PayByPhone 29,322 29,614
Total 56,076 57,133
Goodwill arising on acquisition:
For PayPoint Romania, the difference between the recoverable 
amount and the carrying amount at year end was £9.7 million. 
Headroom would reduce to £nil if either the forecast average 
growth in net revenue for the next four years of 12.3% reduced 
to 6.0% per annum or if the discount rate applied to the 
forecast cash ﬂows were to increase from 10.0% to 15.3%. 
Management does not consider that a reasonably possible 
change in one or more key assumptions during the next 
year could cause the recoverable amount of the other cash 
generating units to fall below their carrying amount.
11. Other intangible assets
Technology
£000
Contracts 
with 
merchants
£000
Total
£000 
Cost 
At 27 March 2011 2,018 2,080 4,098
Additions 1,251 - 1,251
Exchange rate 
adjustment - (28) (28)
At 25 March 2012 3,269 2,052 5,321
  
Amortisation  
At 27 March 2011 785 1,984 2,769
Charge for the year 180 68 248
At 25 March 2012 965 2,052 3,017
  
Carrying amount  
At 25 March 2012 2,304 - 2,304
At 27 March 2011 1,233 96 1,329 PayPoint plc annual report 2012 43
NOTES TO THE FINANCIAL STATEMENTS continued
11. Other intangible assets continued
Technology
£000
Contracts 
with 
merchants
£000
Total
£000  
Cost 
At 28 March 2010 1,800 2,052 3,852
Additions 218 - 218
Exchange rate 
adjustment - 28 28
At 27 March 2011 2,018 2,080 4,098
    
Amortisation    
At 28 March 2010 605 1,847 2,452
Charge for the year 180 137 317
At 27 March 2011 785 1,984 2,769
    
Carrying amount   
At 27 March 2011 1,233 96 1,329
At 28 March 2010 1,195 205 1,400
The amortisation period for technology costs incurred is 
between 5 years and 10 years and amortisation of merchant 
contracts is between 1.9 years and 4.6 years depending upon 
the merchant churn in the relevant acquired company.
12. Property, plant and equipment
Group
Terminals 
and 
ATMs 
£000 
Fixtures, 
ﬁttings  
and 
equipment 
£000 
Land 
and 
buildings
£000
Total 
£000
Cost 
At 27 March 2011 33,071 6,072 6,412 45,555
Additions 3,510 554 -4,064
Disposals (271) (51) -(322)
Exchange rate 
adjustment (431) (80) - (511)
At 25 March 2012 35,879 6,495 6,412 48,786
Accumulated depreciation 
At 27 March 2011 27,632 3,204 199 31,035
Charge for the year 2,479 518 88 3,085
Disposals (244) (42) -(286)
Exchange rate 
adjustment (207) (53) - (260)
At 25 March 2012 29,660 3,627 287 33,574
Net book value
At 25 March 2012 6,219 2,868 6,125 15,212
At 27 March 2011 5,439 2,868 6,213 14,520
The net book value of assets held under ﬁnance leases is  
£0.0 million (2011: £0.1 million).  The cost of ATMs provided to 
retail agents under operating leases is £7.7 million (2011:  
£6.5 million) and the accumulated depreciation is £6.2 million 
(2011: £5.8 million).  At 25 March 2012, the group had entered 
into contractual commitments for the acquisition of terminals 
and ATMs amounting to £1.6 million (2011: £0.9 million).
Group
Terminals 
and 
ATMs 
£000 
Fixtures, 
ﬁttings 
and 
equipment 
£000 
Land 
and 
buildings
£000
Total 
£000 
Cost 
At 28 March 2010 32,206 5,895 6,412 44,513
Additions 2,581 682 - 3,263
Disposals (1,640) (479) - (2,119)
Exchange rate 
adjustment (76) (26) - (102)
At 27 March 2011 33,071 6,072 6,412 45,555
Accumulated depreciation 
At 28 March 2010 26,315 3,320 111 29,746
Charge for the year 2,988 219 88 3,295
Disposals (1,630) (312) - (1,942)
Exchange rate 
adjustment (41) (23) - (64)
At 27 March 2011 27,632 3,204 199 31,035
Net book value
At 27 March 2011 5,439 2,868 6,213 14,520
At 28 March 2010 5,891 2,575 6,301 14,767
13. Investment in joint venture
On 5 February 2009, PayPoint entered a 50:50 joint venture 
with Yodel (formerly Home Delivery Network).  The joint venture 
company, Drop and Collect Limited, trades as Collect+.  PayPoint 
subscribed to £500,000 of ordinary shares in the company. The 
joint venture company has the same accounting reference date 
as PayPoint plc.
PayPoint’s share of aggregated 
amounts relating to joint ventures
25 March 
2012
£000 
27 March
2011
£000
Total assets 1,223 644
Total liabilities (6,015) (3,609)
Share of net assets (4,792) (2,965)
Loan to joint venture (note 15) 4,850 3,100
Investment in joint venture 58 135
Year 
ended
25 March 
2012
£000
Year 
ended
27 March 
2011
£000
Revenues 4,015 1,002
Loss for year (1,828) (1,541) 44 PayPoint plc annual report 2012
NOTES TO THE FINANCIAL STATEMENTS continued
14. Deferred tax asset
27 March
2011
£000
Credit / 
(charge) 
to income 
statement
£000
25 March
2012
£000
Tax depreciation 1,304 (192) 1,112
Share-based payments 107 (107) -
Tax losses - - -
Intangibles (293) 84 (209)
Short term temporary 
differences (2) - (2)
Total 1,116 (215) 901
28 March
2010
£000
Credit / 
(charge) 
to income 
statement
£000
27 March
2011
£000
Tax depreciation 1,320 (16) 1,304
Share-based payments 239 (132) 107
Tax losses - - -
Intangibles (392) 99 (293)
Short term temporary 
differences - (2) (2)
Total 1,167 (51) 1,116
At the balance sheet date, a deferred tax asset of £0.9 million 
(2011: £1.1 million) is recognised on the basis that there will be 
sufﬁcient future taxable proﬁts against which the deferred tax 
asset can be recovered, based on management forecasts.
At the balance sheet date, the group had unused tax losses 
of £9.5 million (2011: £7.6 million) available for offset against 
future proﬁts for which no deferred tax asset is recognised. 
Included in unrecognised tax losses are losses of £1.9 million, 
which will expire in less than three years, and £3.0 million that 
will expire within four to seven years.  Other losses may be 
carried forward indeﬁnitely.
No deferred tax liability has been recognised in respect 
of temporary differences associated with investments in 
subsidiaries because the group is in a position to control the 
timing of the reversal of the temporary differences and it is 
probable that such differences will not reverse in the foreseeable 
future.  The aggregate amount of these differences was not 
material at the balance sheet date.
The government has announced a further reduction in the 
main rate of corporation tax from 26% to 24%, effective from 
1 April 2012, which was substantially enacted after 25 March 
2012. The deferred tax calculations have been calculated using 
the 25% corporation tax rate, instead of the 24% rate, as this 
was the substantively enacted rate at the year end.  Note the 
substantive enactment of the new rate occurred on 26 March 
2012.  The government has also indicated that it intends to 
enact future reductions in the main tax rate of 1% each year 
down to 22% by 1 April 2014.  The future 1% main tax rate 
reductions are expected to have a similar impact as for 2012; 
however, the actual impact will be dependent on the deferred 
tax position at that time.
15. Investments
Subsidiary undertakings 
The company, a holding company, has investments (directly or 
indirectly) in the following subsidiary undertakings.
Subsidiary of the 
company 
Principal activity Country of 
registration
PayPoint 
Network Limited 
Management of an  
electronic payment service
England and 
Wales
PayPoint 
Collections 
Limited 
Provision of a payment 
collection service 
England and 
Wales
PayPoint Retail 
Solutions Limited 
Provision of retail services England and 
Wales
PayPoint Ireland 
Limited 
Holding company in Ireland Ireland
PayPoint 
Network Ireland 
Limited 
Management of an 
electronic payment service 
in Ireland
Ireland
PayPoint 
Collections 
Ireland Limited 
Payment collection service 
in Ireland 
Ireland
PayPoint Services 
Romania SRL 
Management of an 
electronic and payment 
collection service in 
Romania
Romania
Metacharge 
Limited 
Internet payment service 
provider 
England and 
Wales
PayPoint.net 
Limited
Internet payment service 
provider 
England and 
Wales
Counter Payment 
Managers 
Limited 
ESOP scheme Isle of Man
PayByPhone 
Limited
Provision of a payment by 
phone service
England and 
Wales
PayByPhone 
Mobile 
Technologies Inc.
Provision of a payment by 
phone service
Canada
PayPoint 
Technologies 
Canada inc.
Holding Company in 
Canada
Canada
Mobile Payment 
Services SAS
Provision of a payment by 
phone service
France
The company holds 100% of the issued share capital of the 
above companies except Mobile Payment Services SAS, where it 
holds 78.95% of the issued ordinary share capital. PayPoint plc annual report 2012 45
NOTES TO THE FINANCIAL STATEMENTS continued
15. Investments continued
Group Company
25 March 
2012
£000
27 March
2011
£000
25 March 
2012
£000
27 March
2011
£000
Investments 
carried at 
cost:
Investment in 
OB10 Limited 
(note 28) 435 435 435 435
Investments in 
subsidiaries and 
joint venture - - 114,254 109,373
435 435 114,689 109,808
During the year, the company loaned Collect+ (note 13) £1.75 
million (2011: £1.4 million).  The company also subscribed for 
additional share capital in PayByPhone Mobile Technologies Inc. 
for £3.1 million (2011: £1.7 million to PayPoint Romania and 
£0.7 million to PayByPhone Mobile Technologies Inc.).
16. Inventories
In Ireland and Romania, PayPoint trades as principal for the 
processing and sale of mobile phone top-ups.  In addition, 
PayPoint Romania purchases and sells mobile scratch cards and 
SIM cards. In the UK, PayPoint purchases SIM cards. Stocks of 
e-vouchers, scratch cards and SIM cards are held at cost.
17. Trade and other receivables
Group Company
25 March 
2012
£000
27 March
2011
£000
25 March 
2012
£000
27 March
2011
£000
Trade 
receivables
1
19,184 14,572 - -
Allowance for 
doubtful debts (1,331) (1,850) - -
17,853 12,722 - -
Other 
receivables 743 1,024 485 485
Prepayments 
and accrued 
income 2,847 3,357 2 26
21,443 17,103 487 511
1. The average credit period on the sale of goods is 34 days (2011: 31 days).
Included in the group’s trade receivable balance are debtors 
with a carrying amount of £6,678,275 (2011: £3,983,000), 
which are past due at the reporting date, for which the group 
has not provided as there has not been a signiﬁcant change in 
credit quality and the group believes that the amounts are still 
considered recoverable.  The average age of these receivables is 
34 days (2011: 33 days) and of the total balance, £4,796,951 is 
past due by fewer than 30 days.
Movement in the allowance for doubtful debts
Group Company
25 March 
2012
£000
27 March
2011
£000
25 March 
2012
£000
27 March
2011
£000
Balance at the 
beginning of 
the year 1,850 1,623 - -
Amounts 
recovered 
during the year - (15) - -
Amounts 
utilised in  
the year (607) (109) - -
Increase in 
allowance 88 351 - -
Balance at end 
of the year 1,331 1,850 - -
In determining the recoverability of the trade receivables, the 
group considers any change in the credit quality of the trade 
receivables from the date credit was initially granted up to the 
reporting date.  The concentration of credit risk is limited due to 
the spread of the retail agent, merchant and client bases.
18. Cash and cash equivalents
Included within group cash and cash equivalents is £5,073,000 
(2011: £6,132,000) relating to monies collected on behalf of 
clients where the group has title to the funds (client cash).  An 
equivalent balance is included within trade payables (note 19).
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 March 2012, the group’s cash 
was £35,487,000 (2011: £26,464,000). 46 PayPoint plc annual report 2012
NOTES TO THE FINANCIAL STATEMENTS continued
19. Trade and other payables
Group Company
25 March 
2012
£000
27 March
2011
£000
25 March 
2012
£000
27 March
2011
£000
Amounts 
owed in 
respect of 
client cash
1
 5,073 6,132 - -
Other trade 
payables
2 
17,034 14,891 - 49
Trade payables 22,107 21,023 - 49
Other taxes 
and social 
security 2,673 2,916 - -
Other payables 1,574 1,405 - -
Accruals 6,189 7,110 - 5
Deferred 
income 4,107 542 - -
36,650 32,996 - 54
1. Included within trade payables is £5,073,000 (2011: £6,132,000) relating 
to monies collected on behalf of clients where the group has title to the 
funds (client cash).  An equivalent balance is included within cash and cash 
equivalents (note 18). 
2. The group aims to pay its creditors promptly, in accordance with terms agreed 
for payment. The group had 33 days’ purchases outstanding at 25 March 
2012 (2011: 28 days) based on the average daily amount invoiced by suppliers 
during the year.
20. Short-term borrowings
During 2011, the £6 million loan was repaid and the balance 
outstanding at the end of 2011 and 2012 was £nil.
21. Operating lease receivables
25 March
 2012
£000
27 March
2011
£000
Amounts receivable under operating 
leases:
Within one year 883 1,142
Within two to ﬁve years 1,475 1,959
After ﬁve years - -
2,358 3,101
The group enters into operating leases with some of its agents 
for the supply of ATMs. The average term of each lease entered 
into is ﬁve years.
22. Other non-current liabilities
Group Company
25 March 
2012
£000
27 March
2011
£000
25 March 
2012
£000
27 March
2011
£000
Deferred income 247 240 - - 
Amounts 
owed to group 
companies - - 3,372 87,628
247 240 3,372 87,628
23. Financial commitments
Obligations under ﬁnance leases
25 March
 2012
£000
27 March
2011
£000
Minimum lease payments due: 
Within one year - 32
Within two to ﬁve years - -
- 32
Finance charges allocated to  
future periods - 4
- 36
Operating lease commitments
25 March
2012
27 March
2011
Land and 
buildings 
£000
Other
£000 
Land and 
buildings 
£000 
Other 
£000 
Leases which 
expire: 
Within one year 608 - 669 -
Within two to 
ﬁve years 1,105 - 1,823 -
After ﬁve years -- -- PayPoint plc annual report 2012 47
NOTES TO THE FINANCIAL STATEMENTS continued
24. Equity
Share-based payments equity settled share scheme
The group has a number of share schemes as deﬁned in the 
remuneration committee report on pages 23 to 28.  The vesting 
period for all awards is three years and they are forfeited if the 
employee leaves the group before shares vest.  All awards made 
are free shares.  The amount charged to the income statement 
in the year was £1,112,000 (2011: £1,088,000).
Details of the share awards outstanding during the year are  
as follows:
Number
of shares
2012
Number
of shares
2011
Outstanding at the beginning of  
the year: 1,114,103 773,435
Granted during the year – Long 
Term Incentive Plan (LTIP) 312,532 488,772
Granted during the year – Deferred 
Share Bonus (DSB) 73,075 82,787
Lapsed during the year (237,263) (159,071)
Forfeited during the year (46,223) (43,156)
Released during the year - (28,664)
Outstanding at end of the year 1,216,224 1,114,103
Awards granted 
Number of 
shares Vesting date 
LTIP 4 June 2009 270,518 4 June 2012
DSB 4 June 2009 50,969 4 June 2012
LTIP 28 May 2010 488,772 28 May 2013
DSB 1 June 2010 82,787 1 June 2013
LTIP 27 May 2011 312,532 28 May 2014
DSB 2 June 2011 73,075 1 June 2014
The long term incentive plan tranche did not vest on  
16 May 2011 because the group did not meet the performance 
measure. Under IFRS 2, the fair value charges of £732,000 
relating to this tranche, that had been previously charged to the 
income statement, are reversed through equity.  The deferred 
share bonus also did not vest in May 2011 and, accordingly, the 
fair value charge of £247,000 was also released through equity.
The inputs into the Black Scholes model for the DSB and  
Monte Carlo model for LTIP and DSB awards during the year are 
as follows:
2012 2011
LTIP DSB LTIP DSB
Weighted average  
share price 3.03 4.24 1.45 2.39
Expected volatility 51%  48%
Expected life 3 years 3 years 3 years 3 years
Risk free rate 1.49%  1.53%
Expected dividend yield 6.90% 6.80% 6.00% 6.00%
Other share-based payment plans
The employee Share Incentive Plan is open to all employees 
of PayPoint Network, PayPoint Collections, PayPoint Retail 
Solutions and PayPoint.net and provides for a purchase price 
equal to the market price on the date of purchase.  The shares 
are purchased each month (or employees can opt to purchase 
12 months at the start of each year) and are placed in the 
employee share savings plan for a three to ﬁve year period.
Group Company
2012
£000
2011
£000
2012
£000 
2011
£000
Authorised share 
capital 
4,365,352,200 ordinary 
shares of 1/3p each 
(2011: 4,365,352,200 
ordinary shares of 1/3p 
each) 14,551 14,551 14,551 14,551
14,551 14,551 14,551 14,551
Called up, allotted 
and fully paid share 
capital
67,815,819 ordinary 
shares of 1/3p each 
(2011: 67,795,702 
ordinary shares of 
1/3p each) 226 226 226 226
226 226 226 226
Called up share 
capital
At start of year 226 226 226 226
At end of year 226 226 226 226
Investment in own 
shares
At start of year (216) (370) (216) (370)
Acquired in year - - - -
Used on share scheme 
vesting - 154 - 154
At end of year (216) (216) (216) (216)
Share premium
At start of year 25 25 25 25
Arising on issue of 
shares - - - -
At end of year 25 25 25 25
Share based 
payment reserve
At start of year 3,005 2,684 3,005 2,684
Additions in year 1,112 1,088 1,112 1,088
Released in year (979) (801) (979) (801)
Current tax on awards - - - -
Other adjustments - 34 - 34
At end of year 3,138 3,005 3,138 3,005
Translation reserve
At start of year 471 543 - -
Movement during year (831) (72) - -
At end of year (360) 471 - -
Retained earnings
At start of year 77,125 67,636 19,616 31,243
Proﬁt/(loss) for year 26,939 23,842 (469) 267
Non-controlling 
interest loss for year 
included in above 
(note 25) 36 41 - -
Dividends paid (16,450) (15,041) (16,450) (15,041)
Dividends received - - 105,000 2,500
Adjustment on share 
scheme vesting  979 647 979 647
At end of year 88,629 77,125 108,676 19,616 48 PayPoint plc annual report 2012
NOTES TO THE FINANCIAL STATEMENTS continued
25. Non-controlling interest
25 March
 2012
£000
27 March
2011
£000
At start of year 41 -
Share of loss for year 36 41
At end of year 77 41
26. Pension arrangements
The group administers a non-contributory deﬁned contribution 
scheme for executive directors and employees.  The amount 
charged in the consolidated income statement for the year for 
pension costs of the group under the scheme was £713,000   
(2011: £674,000).  There were no accrual pension contributions 
at the balance sheet date (2011: £nil).
27. Derivatives and other ﬁnancial instruments
The group’s ﬁnancial instruments comprise cash and various 
items such as trade receivables, trade payables, other payables, 
bank loans and accruals, which arise directly from the group’s 
operations.  The group’s policy is not to undertake speculative 
trading in ﬁnancial instruments.
The main risks arising from the group’s ﬁnancial instruments 
are interest rate risk and liquidity risk.  The directors review 
and agree policies for managing each of these risks which are 
summarised below.  These policies have remained unchanged 
during the year.  The group has not used derivative instruments 
to manage its foreign exchange exposure.
(a) Interest rate risk
The group had no interest bearing ﬁnancial assets at 25 March 
2012 other than sterling, euro, Romanian lei, US dollars and 
Canadian dollars deposits of £35,487,000 (2011: £26,464,000). 
Of these deposits, £5,073,000 (2011: £6,132,000) relates to 
monies held on behalf of clients where PayPoint has title to the 
funds for periods of up to seven days.
All sterling funds earn interest at the prevailing rate.  The funds 
are deposited on short-term deposits (normally weekly or 
monthly) or held in current accounts in cash.  The group seeks 
to maximise interest receipts within these parameters.
Finance lease interest is charged on leases at ﬁxed contractual rates. 
(b) Liquidity risk
The group’s policy throughout the year ended 25 March 2012 
regarding liquidity has been to maximise the return on funds 
placed on deposit whilst minimising the associated risk.
The group had no ﬁnancial liabilities at 25 March 2012 other 
than short-term payables such as trade payables and accruals.
(c) Foreign exchange risk
To date, the group has not engaged in an active programme of 
foreign exchange risk management.  Given the size and nature 
of the group’s non-sterling denominated balances, the directors 
do not consider hedging necessary. 
The group’s currency exposures comprise those transactional 
exposures that give rise to the net currency gains and losses 
recognised in the income statement.  Such exposures comprise 
the monetary assets and monetary liabilities of the group that 
are not denominated in the operating (or functional) currency of 
the operating unit involved.  At 25 March 2012, these exposures 
were £nil (2011: £6,000).
(d) Borrowing facilities
At the year end, the group had an undrawn, unsecured ﬁve year 
£35 million revolving loan facility which was agreed in May 2011.
(e) Fair value of ﬁnancial assets and liabilities
The directors consider there to be no material difference 
between the book value and the fair value of the group’s 
ﬁnancial instruments at 25 March 2012.
(f) Market price risk
The group’s exposure to market price risk comprises interest 
rate exposure.  Group funds are invested in money market 
cash deposits with the objective of maintaining a balance 
between accessibility of funds and competitive rates of return.  
In practice, this has meant that no deposits were made with a 
maturity greater than 30 days during the year.
(g) Capital risk management
The group’ s objectives when managing capital are to safeguard the 
group’ s ability to continue as a going concern in order to provide 
returns for shareholders and beneﬁts for other stakeholders.
(h) Credit risk
The group’s ﬁnancial assets are cash, trade and other receivables 
and investments.  The group’s credit risk is primarily attributable 
to its trade receivables and off balance sheet agent debt to 
the extent that PayPoint bears the credit risk.  Clients, agents 
and merchants are credit checked to mitigate credit risk and in 
all new client contracts we have the right of set-off of funds 
collected against monies due.  The group’s maximum exposure, 
at 25 March 2012, was £54,002,000 (2011: £40,718,000).
(i) Financial instrument sensitivities
Financial instruments affected by market risk include deposits, 
trade receivables and trade payables.  Any changes in market 
variables (exchange rates and interest rates) will have an 
immaterial effect on these instruments. PayPoint plc annual report 2012 49
NOTES TO THE FINANCIAL STATEMENTS continued
28. Related party transactions
Remuneration of the directors, who are the key management of 
the group, is disclosed in the audited part of the remuneration 
committee report on pages 23 to 28.
PayPoint has entered into a loan agreement with its 50:50 
joint venture Drop and Collect Limited (trading as Collect+) 
and, during the year, it has lent Drop and Collect Limited an 
additional £1.75 million, bringing the total loan to £4.85 million.
The terms of the loan are:
• Interest payable annually at a rate of 3 months LIBOR; and
• Repayable upon termination of the joint venture or upon 
demand by the lender. 
The company and its subsidiaries, in the ordinary course 
of business, enter into various sales, purchase and service 
transactions with Collect+.  These transactions are under terms 
that are no less favourable than those arranged with third 
parties. These transactions are not considered to be signiﬁcant.
PayPoint has a small investment in OB10, a company that 
specialises in electronic invoicing. 
In the view of the directors, the aggregate cost of £435,000 
represents the fair value of the investment in the shares.
David Newlands, Dominic Taylor, George Earle, Eric Anstee and 
Nick Wiles all hold shareholdings in OB10 as follows:
Directors’ shareholding in OB10
Year 
ended
25 March 
2012
Year 
ended
27 March 
2011
% %
David Newlands 2.87 2.87
Dominic Taylor 1.44 1.44
George Earle 0.40 0.40
Nick Wiles 1.02 1.02
Eric Anstee 0.08 0.08
29. Notes to the cash ﬂow statement
Group Company
Year 
ended
25 March 
2012
£000
Year 
ended
27 March 
2011
£000
Year 
ended
25 March 
2012
£000
Year 
ended
27 March 
2011
£000
Proﬁt/(loss) before tax 37,201 34,456 (469) 267
Adjustments for:   
Depreciation of 
property, plant and 
equipment 3,085 3,295 - -
Amortisation of 
intangible assets 248 317 - -
Share of losses in joint 
venture 1,828 1,541 - -
Net interest (income)/
expense (163) 55 - (789)
Share-based payment 
charge 1,112 1,088 1,112 1,088
Operating cash ﬂows 
before movements in 
working capital 43,311 40,752 643 566
(Increase)/decrease in 
inventories (369) 209 - -
(Increase)/decrease in 
receivables (4,545) 6,337 22 436
(Decrease)/increase in 
payables
– client cash (1,059) (686) - -
– other payables 6,010 (4,476) 20,693 20,602
Cash generated by 
operations 43,348 42,136 21,358 21,604
Corporation tax paid (10,448) (10,950) - -
Interest and bank 
charges paid (32) (49) - -
Net cash from/
(used in) operating 
activities 32,868 31,137 21,358 21,604
Trading history
 Year ended
2005  
£m
2006  
£m
2007  
£m
2008  
£m
2009  
£m
2010  
£m
2011  
£m
2012  
£m
Revenue 89.1 120.0 157.1 212.1 224.4 196.6 193.2 200.0
Net Revenue 36.9 46.1 57.7 69.9 77.4 77.4 82.7 90.4
Proﬁt before tax 8.1 20.3 26.6 30.4 34.6 32.6 34.5 37.2
Tax 2.2 3.4 7.9 9.4 10.8 10.5 10.6 10.3
Proﬁt after tax 5.8 16.9 18.7 21.0 23.8 22.1 23.8 26.9
Earnings per share 
Basic EPS 8.7p 25.0p 27.7p 31.1p 35.6p 32.9p 35.2p 39.8p
Diluted EPS 8.7p 24.7p 27.3p 30.8p 35.3p 32.7p 35.1p 39.8p
Dividend per share 5.2p 7.5p 9.1p 10.4p 11.6p 21.8p 23.4p 26.5p
This table does not form part of the audited ﬁnancial statements or notes (as listed in the Independent Auditor’s Report on page 30).  All numbers quoted are reported 
under IFRS. 50 PayPoint plc annual report 2012
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.
If you are in any doubt as to any aspect of the proposals referred to in this document or as to the action you should take, you should 
seek your own advice from a stockbroker, bank manager, solicitor, tax adviser, accountant or other independent professional adviser. 
If you have recently sold or otherwise transferred all of your shares in PayPoint plc, please pass this document together with the 
accompanying documents to the purchaser or transferee, or to the person who arranged the sale or transfer, so they can pass these 
documents to the person who now holds the shares as soon as possible.
PayPoint plc
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the 2012 annual general meeting of PayPoint plc will be held at the ofﬁces of PayPoint plc, 1 The Boulevard, 
Shire Park, Welwyn Garden City, Hertfordshire AL7 1EL, on Friday 27 July 2012 at 12 noon.  You will be asked to consider and pass the 
resolutions below.  Resolutions 16, 17 and 18 will be proposed as special resolutions.  All other resolutions will be proposed as ordinary 
resolutions.
ORDINARY BUSINESS
1.  To receive the ﬁnancial statements and the reports of the directors and the auditor thereon for the year ended 25 March 2012. 
2. To receive the directors’ remuneration report for the year ended 25 March 2012. 
3. To declare a ﬁnal dividend of 17.8p per ordinary share of the company. 
4.  To re-elect Mr Eric Anstee as a director. 
5. To re-elect Mr George Earle as a director. 
6.  To re-elect Mr David Morrison as a director. 
7. To re-elect Mr David Newlands as a director. 
8.  To re-elect Mr Andrew Robb as a director. 
9.  To re-elect Mr Stephen Rowley as a director. 
10.  To re-elect Mr Dominic Taylor as a director.  
11.  To re-elect Mr Tim Watkin-Rees as a director.  
12.  To re-elect Mr Nick Wiles as a director. 
13.  To re-appoint Deloitte LLP as auditor of the company.  
14. To authorise the directors to determine the auditor’s remuneration.  
SPECIAL BUSINESS 
15. That the directors are authorised in accordance with section 551 of the Companies Act 2006 (the Act) to exercise all the powers of 
the company to allot relevant securities (as deﬁned in section 560 of the Act) up to an aggregate nominal amount of £75,284.36 
provided that this authority shall expire on the conclusion of the annual general meeting of the company to be held in 2013 or, if 
earlier, on the date which is 15 months from the date of this resolution, save that the company shall be entitled to make offers or 
agreements before the expiry of such authority which would or might require relevant securities to be allotted after such expiry and 
the directors shall be entitled to allot relevant securities pursuant to any such offer or agreement as if this authority had not expired; 
and all unexercised authorities previously granted to the directors to allot relevant securities are revoked. 
16. That the directors are empowered in accordance with sections 570 and 573 of the Act to allot equity securities (as deﬁned in 
section 560 of the Act) for cash (under the authority conferred by resolution 15 above) or by way of a sale of treasury shares as 
if section 561(1) of the Act did not apply to any such allotment, provided that this power shall be limited to: 
(a)  the allotment of equity securities in connection with a rights issue, open offer or other offer of securities in favour of the 
holders of ordinary shares on the register of members at such record date(s) as the directors may determine where the 
equity securities respectively attributable to the interests of the ordinary shareholders are proportionate (as nearly as may be) 
to the respective numbers of ordinary shares held by them on any such record date(s), subject to such exclusions or other 
arrangements as the directors may deem necessary or expedient to deal with fractional entitlements or legal or practical 
problems arising under the laws of any overseas territory or the requirements of any regulatory body or stock exchange or  PayPoint plc annual report 2012 51
by virtue of shares being represented by depositary receipts or any other matter whatever; and
(b)  the allotment (otherwise than under sub-paragraph (a) above) to any person or persons of equity securities up to an 
aggregate nominal amount of £11,303.96; 
and shall expire upon the expiry of the general authority conferred by resolution 15 above, save that the company shall be 
entitled to make offers or agreements before the expiry of such power which would or might require equity securities to be 
allotted after such expiry and the directors shall be entitled to allot equity securities pursuant to any such offer or agreement as 
if the power conferred hereby had not expired. 
17.  That subject to, and in accordance with the company’s articles of association and pursuant to section 701 of the Act, the 
company is authorised to make market purchases (within the meaning of section 693(4) of the Act) of ordinary shares of 1/3  
pence of the company provided that:
(a)  the maximum number of ordinary shares to be acquired is 10,160,567;
(b)  the minimum price (exclusive of expenses) which may be paid for an ordinary share is the nominal value of such share;
(c)  the maximum price (exclusive of expenses) which may be paid for an ordinary share shall not be more than the higher of:
 (i)  105 per cent of the average of the middle market quotations for an ordinary share taken from and calculated by 
reference to the London Stock Exchange Daily Ofﬁcial List for the ﬁve business days immediately preceding the day on 
which the ordinary share is purchased; and 
 (ii)  the higher of the price of the last independent trade and the highest current independent bid for an ordinary share in the 
company on the trading venue where the purchase is carried out;
(d)  this authority shall expire on the conclusion of the annual general meeting of the company to be held in 2013 or, if earlier, 
on the date which is 15 months from the date of this resolution; and
(e)  the company may make any purchase of its ordinary shares under a contract concluded before this authority expires and 
which will or may be executed wholly or partly after the expiry of such authority.
 
All shares purchased shall either:
(i)  be cancelled immediately on completion of the purchase; or 
(ii)  be held, sold, transferred or otherwise dealt with as treasury shares in accordance with the provisions of the Act.
18. That any general meeting of the company that is not an annual general meeting may be called on not less than 14 clear  
days’ notice.  
BY ORDER OF THE BOARD
Susan Court
Company Secretary
24 May 2012
Registered Ofﬁce: 
1 The Boulevard
Shire Park
Welwyn Garden City
Hertfordshire
AL7 1EL 52 PayPoint plc annual report 2012
NOTES TO THE NOTICE OF ANNUAL GENERAL MEETING
1.    A form of proxy is enclosed with this notice for use by shareholders. To be valid, a proxy must be received by the company’s 
registrars, Capita Registrars, PXS, 34 Beckenham Road, Beckenham, Kent BR3 4TU, not less than 48 hours before the time 
of the annual general meeting.  Appointment of a proxy does not preclude a shareholder from attending the annual general 
meeting and voting in person.
2.  A member entitled to attend, speak and vote at the annual general meeting may appoint one or more proxies (who need not 
be a member of the company) to attend and, on a poll, to vote on his or her behalf.  To appoint more than one proxy, you may 
photocopy the proxy form.  Please indicate the proxy holder’s name and the number of shares in relation to which they are 
authorised to act as your proxy (which, in aggregate, should not exceed the number of shares held by you).  Please also indicate 
if the proxy instruction is one of multiple instructions being given.  All forms must be signed and should be returned together in 
the same envelope. 
 
In order to be valid, an appointment of proxy must be returned by one of the following methods:
• in hard copy form by post, by courier or by hand to the company’s registrars, Capita Registrars, PXS, 34 Beckenham Road, 
Beckenham, Kent BR3 4TU; or
• in the case of CREST members, by utilising the CREST electronic proxy appointment service in accordance with the 
procedures set out below; 
and in each case must be received by the company not less than 48 hours before the time of the meeting.
3. Any person to whom this notice is sent who is a person nominated under section 146 of the Companies Act 2006 to enjoy 
information rights (a “Nominated Person”) may, under an agreement between him/her and the shareholder by whom he/she 
was nominated, have a right to be appointed (or to have someone else appointed) as a proxy for the annual general meeting.  
If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may, under any such 
agreement, have a right to give instructions to the shareholder as to the exercise of voting rights.
4.  The statement of the rights of shareholders to appoint a proxy in paragraphs one and two above does not apply to Nominated 
Persons.  The rights described in these paragraphs can only be exercised by shareholders of the company.
5. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so 
for the annual general meeting and any adjournment thereof by using the procedures described in the CREST manual. CREST 
personal members or other CREST sponsored members, and those CREST members who have appointed a voting service 
provider(s) should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action 
on their behalf. In order for a proxy appointment, or instruction, made by means of CREST to be valid, the appropriate CREST 
message (a CREST proxy instruction) must be properly authenticated in accordance with Euroclear UK & Ireland Limited’s (EUI) 
speciﬁcations and must contain the information required for such instructions, as described in the CREST manual.  The message, 
regardless of whether it relates to the appointment of a proxy or to an amendment to the instruction given to a previously 
appointed proxy must, in order to be valid, be transmitted so as to be received by the issuer’s agent (ID RA10) by the latest 
time(s) for receipt of proxy appointments speciﬁed in the notice of annual general meeting.  For this purpose, the time of receipt 
will be taken to be the time (as determined by the timestamp applied to the message by the CREST applications host) from 
which the issuer’s agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. The company 
may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5) of the Uncertiﬁcated Securities 
Regulations 2001. CREST members and, where applicable, their CREST sponsors or voting service providers should note that 
EUI does not make available special procedure in CREST for any particular messages. Normal system timings and limitations 
will therefore apply in relation to the input of CREST proxy instructions.  It is therefore the responsibility of the CREST member 
concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed a voting 
service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to 
ensure that a message is transmitted by means of the CREST system by any particular time.  In this connection, CREST members 
and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST 
manual concerning practical limitations of the CREST system and timings.
6.   To be entitled to attend and vote at the annual general meeting or any adjournment thereof (and also for the purpose of 
calculating how many votes a person may cast), a person must have his/her name entered on the register of members of the 
company by 6 pm on 25 July 2012 (or 6 pm on the date being two days before any adjourned meeting).  Changes to entries 
on the register of members after this time shall be disregarded in determining the rights of any person to attend or vote at the 
meeting.
7.  Biographical details of the directors of the company are shown on page 20 of the 2012 annual report. PayPoint plc annual report 2012 53
8.  Each member attending the meeting has the right to ask questions relating to the business being dealt with at the meeting 
which, in accordance with section 319A of the Companies Act 2006 and subject to some exceptions, the company must cause 
to be answered.  However, no such answer need be given if:
(a) to do so would interfere unduly with the preparation for the meeting or involve the disclosure of conﬁdential information;
(b) the answer has already been given on a website in the form of an answer to a question; or
(c) it is undesirable in the interests of the company or the good order of the meeting that the question be answered.
9. Information relating to the meeting which the company is required by section 311A of the Companies Act 2006 to publish on 
a website in advance of the meeting may be viewed at www.paypoint.com.  A member may not use any electronic address 
provided by the company in this document or with any proxy appointment form or in any website for communicating with the 
company for any purpose in relation to the meeting other than as expressly stated in it.
10. It is possible that, pursuant to members’ requests made in accordance with section 527 of the Companies Act 2006, the 
company will be required to publish on a website a statement in accordance with section 528 of that Act setting out any matter 
that the members concerned propose to raise at the meeting relating to the audit of the company’s latest audited accounts. 
The company cannot require the members concerned to pay its expenses in complying with those sections.  The company must 
forward any such statement to its auditor by the time it makes the statement available on the website. The business which may 
be dealt with at the meeting includes any such statement.
11.  The issued share capital of the company as at 24 May 2012 was 67,823,744 ordinary shares of 1/3 pence each.  The company 
holds 39,717 shares for the purpose of employee share schemes; therefore, the total number of voting rights in the company on 
24 May 2012 was 67,782,301.
12.  The following documents are available for inspection at the registered ofﬁce of the company during normal business hours on 
any weekday and will be available at the place of the annual general meeting from 15 minutes before the meeting until it ends:
•  the directors’ service agreements and letters of appointment; and
•  copies of the current articles of association of the company. 
Recommendation and voting intentions
The directors consider that all the resolutions to be put to the meeting are in the best interests of the company and its shareholders 
as a whole and most likely to promote the success of the company for the beneﬁt of those shareholders.  Those directors who are 
shareholders will be voting in favour of the resolutions and unanimously recommend that you do so as well.  54 PayPoint plc annual report 2012
Explanatory notes to certain of the resolutions to be 
proposed at the annual general meeting
Resolution 15: directors’ authority to allot shares
By virtue of section 551 of the Companies Act 2006 (the Act), the directors require the authority of shareholders of the company 
to allot shares or other relevant securities.  The resolution numbered 15 authorises the directors to make allotments of up to  
22,607,914 ordinary shares (representing approximately one-third of the issued share capital of the company (excluding treasury 
shares) as at the date of this document).  This amount is in line with ABI guidelines.  If approved at the forthcoming annual general 
meeting, the authority will expire no later than 15 months from the date on which the resolution is passed or on the conclusion of 
the annual general meeting of the company to be held in 2013, whichever is the sooner.  The directors have no present intention of 
exercising the authority proposed to be conferred pursuant to resolution 15. 
Resolution 16: authority for disapplication of statutory pre-emption rights
By virtue of section 561 of the Act, any issue by the company of equity capital for cash made otherwise than to existing shareholders 
on a proportional basis requires the consent of shareholders of the company unless the company has obtained their authority under 
sections 570 and 573 of the Act.  The resolution numbered 16 is for that purpose.  It authorises the directors to allot shares by 
way of rights issue or pursuant to an open offer or otherwise than strictly pro rata when the directors consider that it is expedient 
to do so and also allows them to issue for cash up to 3,391,187 ordinary shares (representing approximately ﬁve per cent) of the 
issued share capital of the company (excluding treasury shares) as at the date of this document other than on a pre-emptive basis.  If 
approved at the forthcoming annual general meeting, the authority will expire no later than 15 months from the date on which the 
resolution is passed or on the conclusion of the annual general meeting of the company to be held in 2013, whichever is the sooner. 
Resolution 17: authority to make market purchases of ordinary shares
By virtue of section 701 of the Act, the company may make market purchases of its own ordinary shares if authorised to do so by 
shareholders. Under resolution 17, the directors seek to renew an annual authority to make market purchases of shares: each year 
the directors will seek to further renew this authority at the company’s annual general meeting.  Any ordinary shares purchased 
under this authority would either be:
(i)  cancelled immediately on completion of the purchase and the number of ordinary shares in issue reduced accordingly; 
(ii)  held, sold, transferred or otherwise dealt with as treasury shares in accordance with the provisions of the Act; or 
(iii) transferred to an employee beneﬁt trust for the satisfaction of awards under the company’s existing share schemes. 
The maximum number of ordinary shares which could be purchased under this authority is 10,160,567, being 14.99 per cent of the 
issued share capital of the company (excluding treasury shares) as at the date of this document.  Any repurchase of ordinary shares 
carried out by the company would be at a maximum price per ordinary share of 105 per cent of the average middle market price of 
such a share for the ﬁve business days immediately preceding the date of the purchase, the price equal to the last independent trade 
or the highest current independent bid and at a minimum price equal to the nominal value. The authority to repurchase ordinary 
shares will, if approved by shareholders, only be exercised after careful consideration by the directors and if such exercise would 
result in an increase in earnings per share and be in the best interests of shareholders generally.  If approved at the forthcoming 
annual general meeting, the authority will expire no later than 15 months from the date on which the resolution is passed, or on the 
conclusion of the annual general meeting of the company to be held in 2013, whichever is the sooner.
Resolution 18: authority to allow any general meeting of the company that is not an annual general meeting to be called on not less 
than 14 clear days’ notice
Further to the implementation of the shareholder rights regulations, the directors seek authority to hold general meetings, other 
than annual general meetings, on 14 rather than 21 days notice.  If approved at the forthcoming annual general meeting, the 
authority will expire no later than 15 months from the date on which the resolution is passed, or on the conclusion of the annual 
general meeting of the company to be held in 2013, whichever is the sooner.  PayPoint plc annual report 2012 55
FORM OF PROXY









 To receive the ﬁnancial statements and the reports of the directors and the auditor thereon for the year ended  
25 March 2012.
 To receive the directors’ remuneration report for the year ended 25 March 2012.
 To declare a ﬁnal dividend of 17.8p per ordinary share of the company.
 To re-elect Mr Eric Anstee as a director of the company.
 To re-elect Mr George Earle as a director of the company.
 To re-elect Mr David Morrison as a director of the company.
 To re-elect Mr David Newlands as a director of the company.
 To re-elect Mr Andrew Robb as a director of the company.
 To re-elect Mr Stephen Rowley as a director of the company.
 To re-elect Mr Dominic Taylor as a director of the company.
 To re-elect Mr Tim Watkin-Rees as a director of the company.
 To re-elect Mr Nick Wiles as a director of the company.
 To re-appoint Deloitte LLP as auditor of the company.
 To authorise the directors to determine the auditor’s remuneration.
 ORDINARY RESOLUTION: To authorise the directors to allot shares pursuant to Section 551 of the Companies  
Act 2006.
 SPECIAL RESOLUTION: To disapply statutory pre-emption rights pursuant to Section 570 of the Companies Act 2006.
 SPECIAL RESOLUTION: To authorise the company to make market purchases of its ordinary shares up to 14.99% of the 
issued share capital.
 SPECIAL RESOLUTION: To allow any general meeting (other than an annual general meeting) to be called on 14 days’ 
notice.























  Ofﬁcers and professional 
advisers
Directors
E E Anstee*
G D Earle
D J Morrison*
D B Newlands (Chairman)*
A M Robb*
S P Rowley*
D C Taylor
T D Watkin-Rees
N Wiles*
* Non-executive directors
Company Secretary
S C Court 
Registered ofﬁce
1 The Boulevard
Shire Park
Welwyn Garden City
Hertfordshire, AL7 1EL
United Kingdom 
Registered in England and Wales 
number 3581541
Independent auditor
Deloitte LLP
2 New Street Square
London, EC4A 3BZ
United Kingdom
Brokers
J. P . Morgan Cazenove
20 Moorgate 
London, EC2R 6DA
United Kingdom
Cannacord Genuity Limited
88 Wood Street
London, EC2V 7QR
United Kingdom
Registrars
Capita Registrars
The Registry
34 Beckenham Road 
Beckenham
Kent, BR3 4TU
United Kingdom
This annual report has been produced using ISO 14001 and FSC certiﬁed
environmental print technology, together with vegetable based inks.
Furthermore, we have worked in partnership with the CarbonNeutral Company
to carbon offset the entire production and distribution of this document. PayPoint plc