Paypoint (LSE:PAY) shares fell almost 19% to 528p after the payment network said reaching a milestone of £100 million of underlying earnings would take longer than previously hoped, though the current year is expected to be in line with forecasts.
Chief executive Nick Wiles said: "We expect underlying EBITDA for FY26 to be ahead of last year and broadly in line with current market expectations.
"While we continue to make progress towards delivering underlying EBITDA of £100 million in the current financial year – which remains a key financial objective the business is confident of reaching – it is likely we will take longer to do so."
He blamed two issues that have become apparent during the current year.
The first is a greater impact from the disruption to the parcels network from the harmonisation of InPost and Yodel services combined with the commercial terms of a new three-year contract has.
Secondly, obconnect, the open banking solution, has continued to build a new business pipeline and range of opportunities, but the pace of growth and monetising of these opportunities in year is slower than planned.
In the six months to 30 September, underlying EBITDA fell 0.5% to £37.3 million, principally due to the timing of revenue recognition for expiry of cards at Love 2Shop, which is expected to balance out in the second half.
Successful major growth projects delivered in the period included the launch of Local Banking for Lloyds Banking Group with 10m of deposits to date via app and card; the launch of Royal Mail Shop partnership, with branding and postage services now in c.3k sites, and all 8k sites live by end of FY26; growth in InComm partnership in Love2shop, with sales +43.5% since launch a year ago.