Paypoint to make special payout as Royal Mail owner buys into Connect+

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https://www.lse.co.uk/news/paypoint-to- ... jjv9z.html

Paypoint PLC on Tuesday said it will pay a 50 pence per share special dividend after securing an investment into its Collect+ business.

In response, shares in the Hertfordshire, England-based payments and retailing technology firm rose 8.6% to 731.63 pence each in London on Tuesday, the best performing stock on the FTSE 250.

Paypoint said Royal Mail owner International Distribution Services will make a GBP43.9 million investment in Collect+, and take 49% ownership, valuing the Collect+ business at GBP90 million.

Collect+ is a UK parcel service that uses a network of local shops and convenience stores for customers to pick up and drop off packages.

It currently has a network of over 14,000 out of home locations in the UK, of which almost 8,000 offer Royal Mail collect.

As part of the next stage in this partnership between Paypoint and IDS, an initial 500 of these sites have been upgraded to deliver Royal Mail over the counter services, enabling customers to buy postage in store, 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 the first quarter of 2026.

Chief Executive Nick Wiles said: "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."

As a result of the transaction, PayPoint announced 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 October 17.

As a whole, Paypoint expects the deal to be earnings per share 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.

More details will be provided with interim results due on November 20.

In the meantime, current trading remans in line with expectations ahead of the business moving into the important peak trading period, Paypoint added.