REG-Strategic Investment in Collect+ by International Distribution Services

PayPointAnnouncement

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30 September 2025

PayPoint Plc
Strategic Investment in Collect+ by International Distribution Services 

Proposed Special Dividend and associated Share Consolidation
Publication of Circular and Notice of General Meeting

PayPoint Plc and International Distribution Services (IDS), owner of Royal
Mail, are pleased to announce the next stage in their partnership through a
strategic investment in Collect+ to take a 49% ownership, with an investment
of £43.9 million, valuing the Collect+ business at £90 million.

Currently, Collect+ has a network of over 14,000 Out of Home locations in the
UK, of which almost 8,000 offer Royal Mail collect, send and return parcel
services today. As part of the next stage in this partnership, an initial 500
of these sites have been upgraded to deliver Royal Mail over the counter
services, enabling customers to buy postage in store from today, as part of
almost 8,000 sites which will have Royal Mail Shop branding rolled out from
October. Over the next 12 months, the intention is to expand the rollout of
Royal Mail over the counter services through the network, including the launch
of self-service kiosks during Q1 2026.

The establishing of this partnership is important to the next stage of growth
for Collect+ and its positioning as the leading OOH store network in the UK.
As an open network, Collect+ will continue to work closely with the carrier
partners with whom it has well-established relationships to support the
increasing consumer adoption of OOH services across the UK.

As a result of this transaction, PayPoint is today announcing a special
dividend of 50.0p per share combined with a share consolidation of 12 for 13
to be proposed for shareholder approval at a Special General Meeting on 17
October 2025. The Board anticipates the transaction as a whole to be EPS
enhancing in the first full year to March 2027, through a combination of the
special dividend, share consolidation and expected growth in volumes from the
Royal Mail services through the Collect + network. The detailed financial
impact of the transaction will be included in PayPoint’s interim results due
to be announced on 20 November 2025. In the meantime, current trading remans
in line with expectations ahead of the business moving into the important peak
trading period.

Nick Wiles, Chief Executive of PayPoint, said:

“We are delighted that Royal Mail has invested into the Collect+ business,
which has seen strong growth over the past 5 years as we have established it
as the leading open OOH store network in the UK. The addition of Royal Mail
over the counter services and Royal Mail Shop branding is an exciting
development for our retailer network and is another example of how we deliver
vital community services across the UK, including local banking, parcels and
broader access to cash services. We are also pleased today to be announcing a
proposed special dividend and share consolidation, which combined with our
ordinary dividend and continuing in year share buyback, will result in over
£90 million of returns to shareholders in the current financial year.”

Alistair Cochrane, interim Chief Executive of Royal Mail, said:

“The launch of the Royal Mail Shop brand creates a new and improved high
street destination for all of our customers’ parcel needs in one location.
With postage available to buy in store, and opening hours including evening
and weekends, the shops are giving customers greater flexibility in how they
collect, send and return their parcels.

“This investment is one of the ways we’re making Royal Mail more
convenient. We have the UK’s largest network of out-of-home parcel points
— from lockers to solar-powered postboxes — and we’re focused on being
the nearest and simplest choice for our customers.”

Following completion of the Investment, PayPoint is pleased to announce that a
circular setting out details of a proposed special dividend and associated
share consolidation, as well as incorporating a notice of General Meeting (the
“Circular”) has been published today.

The Circular outlines that, in line with the Company’s capital allocation
policy and ongoing commitment to enhance shareholder returns, PayPoint intends
to return approximately £34.5 million to Shareholders by way of a special
dividend of 50.0 pence per Existing Ordinary Share. In addition, and to
maintain comparability, so far as possible, of the Company’s share price
before and after the Special Dividend, the Company also proposes to undertake
a Share Consolidation of its Existing Ordinary Shares, resulting in Ordinary
Shareholders receiving 12 New Ordinary Shares with a nominal value of 0.3611
pence each for every 13 Existing Ordinary Shares held.

The Circular contains further details of these matters as well as a notice
convening a General Meeting of Shareholders to be held at the Company’s head
office, 1 The Boulevard, Shire Park, Welwyn Garden City, Hertfordshire AL7 1EL
at 11.00 a.m. on 17 October 2025 to propose the Resolutions seeking
Shareholder approval of, amongst other things, the Special Dividend and the
Share Consolidation.

Special Dividend

As noted above, the Special Dividend is subject to the approval of
Shareholders at the General Meeting. It is also conditional on: (i) the
approval by the Shareholders of the Share Consolidation; and (ii) Admission in
respect of the New Ordinary Shares becoming effective at 8.00 a.m. on 20
October 2025 (or such later time and / or date as the Directors may in their
absolute discretion determine).

Assuming these conditions are satisfied, the Board is proposing to pay the
Special Dividend to Shareholders on the register of members of the Company as
at 6.00 p.m. on 17 October 2025. The Special Dividend is expected to be paid
to such Shareholders on 31 October 2025.

Share Consolidation

As is common for UK companies with shares admitted to listing and trading on
the London Stock Exchange, when an amount representing a significant
proportion of the market capitalisation of a company is returned to
shareholders, the Board recommends that the Special Dividend be combined with
an associated Share Consolidation.

The effect of the Share Consolidation will be to reduce the number of Ordinary
Shares in issue to reflect the amount of cash to be returned to Shareholders
(approximately 7.5 per cent as at the Latest Practicable Date), but
Shareholders will, immediately following the Share Consolidation, own the same
proportion of the ordinary share capital of PayPoint as they did previously
(subject to adjustment for any fractional entitlements which shall be dealt
with in accordance with the process outlined in the Circular). As such, the
market price of each Ordinary Share in PayPoint is intended to remain at a
broadly similar level following the Special Dividend and the Share
Consolidation.

Although New Ordinary Shares will have a different nominal value (being 0.3611
pence each) to the Existing Ordinary Shares as a result of the Share
Consolidation, each New Ordinary Share will be equivalent in all respects to
the Existing Ordinary Shares, including their dividend, voting and other
rights, and will be admitted to listing and trading in the same way as the
Existing Ordinary Shares

The Share Consolidation will apply to Shareholders on the register of members
of the Company as at 6.00 p.m. on 17 October 2025 and is subject to
Shareholder approval at the General Meeting. It is also conditional on
Admission becoming effective at 8.00 a.m. on 20 October 2025 (or such later
time and / or date as the Directors may in their absolute discretion
determine).

Additional resolutions

At the General Meeting, approval by Shareholders will also be sought to renew
the annual authorities to enable PayPoint to make market purchases of its own
shares, as well as to allot Ordinary Shares and to disapply pre-emption
rights, to cover the period between the date of the General Meeting and the
annual general meeting of the Company to be held in 2026.   These
resolutions are conditional on the approval of the Shareholders of the Special
Dividend and the Share Consolidation. Further details of these additional
resolutions are set out in the Circular.

Expected Timetable

The expected timetable for the General Meeting, the Special Dividend and Share
Consolidation is set out below:

 Latest time and date for receipt of proxy appointments via Proximity, Forms of Proxy, CREST Proxy instructions and electronic registrations of proxy appointment                                                                        11.00 a.m. on 15 October 2025  
 Record time and date for entitlement to vote at the General Meeting                                                                                                                                                                     6.30 p.m. on 15 October 2025   
 General Meeting                                                                                                                                                                                                                         11.00 a.m. on 17 October 2025  
 Latest time and date for dealings in Existing Ordinary Shares                                                                                                                                                                           4.30 p.m. on 17 October 2025   
 Record time and date for entitlement to the Special Dividend and to determine the Existing Ordinary Shares subject to the Share Consolidation (Existing Ordinary Share register closed and Existing Ordinary Shares disabled in CREST)  6.00 p.m. on 17 October 2025   
 Existing Ordinary Shares marked ex-Special Dividend                                                                                                                                                                                     8.00 a.m. on 20 October 2025   
 Effective time and date for the Share Consolidation                                                                                                                                                                                     8.00 a.m. on 20 October 2025   
 Admission of the New Ordinary Shares                                                                                                                                                                                                    8.00 a.m. on 20 October 2025   
 Dealings in the New Ordinary Shares commence (after Share Consolidation)                                                                                                                                                                8.00 a.m. on 20 October 2025   
 CREST accounts credited with New Ordinary Shares (after Share Consolidation)                                                                                                                                                            20 October 2025                
 Dispatch of share certificates in respect of certificated New Ordinary Shares                                                                                                                                                             31 October 2025                
 Payment of Special Dividend to Shareholders (by CREST payment or by cheque)                                                                                                                                                             31 October 2025                

References to time in this announcement are to London time. All dates are
subject to change. If any of the above times or dates change, the revised
times and/or dates will be notified to Shareholders by an announcement on a
Regulatory Information Service.

Availability of the Circular

Printed copies of the Circular will be posted today to Shareholders and any
other person entitled to receive a copy (other than those who have elected
for, or who have been deemed to have elected for, notification by electronic
communication).

A copy of the Circular and certain other documents in relation to the Special
Dividend and Share Consolidation are available for inspection on PayPoint’s
website at https://www.paypointbusiness.com/corporate/investor-centre.

A copy of the Circular (containing the Notice of General Meeting) has been
submitted to the National Storage Mechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism), where it will
shortly be available for inspection.

Capitalised terms used but not otherwise defined in this announcement have the
same meaning given to them in the Circular.

 Enquiries                                                                                          
 PayPoint plc                                                                                       
 Nick Wiles, Chief Executive Officer                                 Mobile: 07442 968960           
 Rob Harding, Chief Financial Officer                                Mobile: 07525 707970           
 Steve O’Neill, Chief Marketing and Corporate Affairs Officer        Mobile: 07919 488066           
 Phil Higgins, Company Secretary (Indigo Company Secretary Limited)  CompanySecretary@paypoint.com  
                                                                                                    
 FGS Global                                                                                         
 Rollo Head                                                          Telephone: 0207 251 3801       
 James Thompson                                                                                     
                                                                                                    
 Investec Bank plc                                                   Telephone: 0207 597 5970       
 Carlton Nelson                                                                                     
 Henry Reast                                                                                        
 Tom Brookhouse                                                                                     

Important notices

This announcement is not intended to, and does not constitute or form part of,
and should not be construed as, any offer, invitation, solicitation or
recommendation of an offer to purchase, sell, subscribe for or otherwise
dispose of or acquire any securities or the solicitation of any vote or
approval in any jurisdiction and neither the issue of the information nor
anything contained herein shall form the basis of or be relied upon in
connection with, or act as an inducement to enter into, any investment
activity. No shares are being offered to the public by means of this
announcement. This announcement does not constitute either advice or a
recommendation regarding any securities, or purport to contain all of the
information that may be required to evaluate any investment in PayPoint or any
of its securities and should not be relied upon to form the basis of, or be
relied on in connection with, any contract or commitment or investment
decision whatsoever. Past performance is not an indication of future results
and past performance should not be taken as a representation that trends or
activities underlying past performance will continue in the future.

Shareholders are advised to carefully read the Circular. Any response to the
Special Dividend and Share Consolidation should be made only on the basis of
the information in the Circular. If you are in any doubt as to what action you
should take in relation to this announcement or the Circular, you are
recommended to seek your own personal financial advice immediately from your
stockbroker, bank manager, solicitor, accountant or other independent
financial adviser authorised under the Financial Services and Markets Act
2000, or from another appropriately authorised independent financial adviser.

The distribution of this announcement in or into jurisdictions other than the
United Kingdom may be restricted by local law and therefore persons into whose
possession this announcement comes should inform themselves about and observe
such restrictions. Any failure to comply with these restrictions may
constitute a violation of the securities laws of any such jurisdiction.

This announcement has been prepared for the purposes of complying with the
applicable law and regulation of the United Kingdom (including the Listing
Rules and the Disclosure Guidance and Transparency Rules of the FCA) and the
information disclosed may not be the same as that which would have been
disclosed if this announcement had been prepared in accordance with the laws
and regulations of any jurisdiction outside of the United Kingdom.

Forward-looking statements

This announcement contains statements which are, or may be deemed to be,
“forward-looking statements” which are prospective in nature. All
statements other than statements of historical fact are forward-looking
statements. They are based on intentions, beliefs or current expectations and
projections about future events, and concerning, among other things, the
business, results of operations, prospects, growth and strategies of, the
Company and the Group, and are therefore subject to risks and uncertainties
which could cause actual results to differ materially from the future results
expressed or implied by the forward-looking statements. Often, but not always,
forward-looking statements can be identified by the use of forward-looking
words such as “plans”, “expects”, “is expected”, “is subject
to”, “budget”, “scheduled”, “estimates”, “forecasts”,
“goals”, “intends”, “anticipates”, “believes”, “targets”,
“aims”, “hopes”, “continues” or “projects”. Words or terms of
similar substance or the negative thereof, are forward-looking statements, as
well as variations of such words and phrases or statements that certain
actions, events or results “may”, “could”, “should”, “would”,
“might” or “will” be taken, occur or be achieved. Such statements are
qualified in their entirety by the inherent risks and uncertainties
surrounding future expectations.

Forward-looking statements include statements relating to: (a) future capital
expenditures, expenses, revenues, earnings, economic performance,
indebtedness, financial condition, dividend policy, losses and future
prospects; (b) business and management strategies and the expansion and growth
of the Company’s or the Group’s operations; and (c) the effects of
economic conditions on the Company’s or the Group’s business.

Such forward-looking statements involve known and unknown risks and
uncertainties that could significantly affect expected results and are based
on certain key assumptions. Many factors may cause actual results, performance
or achievements of the Company or the Group to be materially different from
any future results, performance or achievements expressed or implied by the
forward-looking statements. Important factors that could cause actual results,
performance or achievements of the Company or the Group to differ materially
from the expectations of the Company or the Group include, among other things,
general political, business and economic conditions, industry and market
trends, competition, changes in government and changes in law, regulation and
policy, including in relation to taxation as well as political and economic
uncertainty, stakeholder perception of the Company or the Group and/or the
sectors or markets in which it operates. Such forward-looking statements
should therefore be construed in light of such factors. Any information
contained in this announcement on the price at which shares or other
securities in the Company have been bought or sold in the past, or on the
yield on such shares or other securities, should not be relied upon as a guide
to future performance.

Neither the Company nor any of its Directors, officers or advisers provides
any representation, assurance or guarantee that the occurrence of the events
expressed or implied in any forward-looking statements in this announcement
will actually occur. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as at the date of this
announcement.

Attachment
*     RM - Announcement - Final
(https://ml-eu.globenewswire.com/Resource/Download/85b14211-a856-4e18-8a48-6906686ca361)