PayPoint Group – the recent Q1 Update was positive, but latest deal opens up massive potential, shares 750p, brokers TP 1100p

Mark Watson-Mitchell
Aug 15
3 min read

15.08.2025

I do like the way that Nick Wiles, CEO, and his Board at the PayPoint Group (LON:PAY) seem to be steering the progress of this payments business – especially after the latest bit of corporate news.

The Business

Did you know that over 99.5% of people live within one mile of a PayPoint location, with stores open for long hours, over seven days a week.

For tens of thousands of businesses and millions of consumers, it delivers innovative technology and services that make life a little easier.

The PayPoint Group serves a diverse range of organisations, from SME and convenience retailer partners, to local authorities, government, multinational service providers and e-commerce brands.

Massive Lloyds Partnership

Earlier this week, on Tuesday 12^th August, the company announced that it is partnering with Lloyds Banking Group to deliver over 30,000 cash deposit points across the UK.

The partnership will look to enable consumer cash deposits at over 30,000 locations through its leading retail network across the UK.

Lloyds, Halifax and Bank of Scotland, part of Lloyds Banking Group, will be the first high street banks to use PayPoint's BankLocal service, giving greater access to cash services at the heart of communities across the UK.

Rolling out from Tuesday, 26^th August, the new service gives Lloyds, Halifax and Bank of Scotland customers a simple and convenient way to pay in up to £300 a day in notes and coins, with the money showing in their account within minutes.

Management Comment

The £520m-capitalised group recently reported an encouraging start to its current trading year when it declared its Q1 statement.

Upon the new partnership, CEO Nick Wiles stated that:

"Our leading retail network provides a vast range of essential services at the heart of communities across the UK, for everything from banking, utility, parcel, cash and government services.

The ability of Lloyds customers to make cash deposits into their accounts at over 30,000 PayPoint locations will deliver more convenience and access for customers close to where they live."

Local Banking and Access to cash are key organic building blocks for growth for the PayPoint Group, contributing towards the delivery of its £100m EBITDA target in the current year and its longer-term growth targets for the next three years to the end of FY28.

Broker’s Views

Analysts Joe Brent and Joe Walker, at Panmure Liberum, rate the group’s shares as a Buy, with a Target Price of 1100p.

For the year to end-March 2026, they estimate that group sales could rise to £199.0m (£188.0m), while pre-tax profits should be around £72.1m (£68.0m), lifting earnings to 75.7p (69.1p), enabling a healthy dividend payment of 39.4p (39.0p) per share.

For the 2027 year, they see £211.0m sales, £80.3m profits, with earnings of 90.2p and a 39.8p per share dividend.

My View

PayPoint’s shares look totally wrongly priced at just 750p, even after yesterday’s rise.

I see them lifting a lot higher, possibly penetrating the 870p barrier again very soon, possibly on or before the Interims are declared in late November.

In fact, I will now set a new Target Price of 900p for the group’s shares.