PayPoint Boosts Stake in Collect+; Unveils Special Dividend and Share Consolidation

PayPoint (LON: PAY) is set to deepen its involvement with the Collect+ by International Distribution Services network through a strategic investment, while also rewarding shareholders with a special dividend and initiating a share consolidation.

The markets reacted positively to the announcement, with Paypoint shares up more than 8% following the news.

The headline numbers reveal PayPoint's investment of £43.9 million for a 49% ownership stake in Collect+, valuing the business at £90 million. A special dividend of 50.0p per share will be issued, accompanied by a 12-for-13 share consolidation.

This strategic move is expected to be EPS enhancing in the first full year to March 2027, combining the benefits of the special dividend, share consolidation, and anticipated volume growth from Royal Mail services within the Collect+ network.

The special dividend and share consolidation underscore PayPoint's commitment to returning capital to shareholders. The company intends to return approximately £34.5 million to shareholders via the special dividend.

The share consolidation is designed to maintain share price comparability before and after the dividend payout, ensuring shareholders maintain their proportion of company ownership.

The markets are likely to see increased interest in PayPoint shares, potentially leading to short-term volatility as investors digest the implications of the investment, dividend, and share consolidation.

Nick Wiles, Chief Executive of PayPoint, said: “We are delighted that Royal Mail has invested into the Collect+ business… 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.”