Interim Results

28 March 2013

Embargoed until 07:00

Earthport plc

("Earthport", the "Company" or the "Group")

Interim Results

Earthport (AIM: EPO.L), the cross-border payments services provider, is pleased to announce its unaudited interim results for the six months ended 31 December 2012.

Financial Highlights

·; Revenue grew 32% to £1.83m (H1 2012: £1.39m)

·; Gross profit increased by 35% to £1.42m (H1 2012: £1.05m)

·; Gross margin improved to 77.7% (H1 2012: 75.6%)

·; Loss before taxation and share based payment charges decreased to £3.7m (H1 2012: £4.5m)

·; Cash at 31 December 2012 of £9.6m (31 December 2011: £10.9m)

·; Successful placing in October 2012 raised £8.0m gross

Operational Highlights

·; Transaction volumes increased 72% compared to the period ended 31 December 2011

·; 9 new customers were signed in the period and 8 customer implementations went live

o Bank of America N.A. a subsidiary bank of Bank of America Corporation (NYSE:BAC), contract announced in December 2012

·; Banking network expanded to 55 countries, with more in progress

·; Regulations, such as Dodd Frank 1073 continuing to drive sales pipeline

 Post Period Highlights

·; Continued adoption of Earthport's services by major global financial institutions:

o BB&T Corporation (NYSE: BBT), one of the largest financial services holding companies in the U.S, announced in January 2013

o hyperWALLET Systems Inc., a global payment provider and processor for corporate entities, announced in March 2013

o American Express(NYSE: AXP) announced in March 2013

Hank Uberoi, Executive Director of Earthport plc, commented:

"We are delighted with the strong progress that the Company continues to make. Our aim is to become a core part of the global low value payment infrastructure in conjunction with our Banking partners and clients.

 "Earthport is now providing cross-border payment services to some of the world's largest financial services companies. It is a great endorsement for our offering that the world's leaders in the financial industry have selected Earthport. The Company is at an exciting stage in its development, having successfully completed the reorganisation begun in 2010, and as transaction levels continue to gain momentum.

 "We are confident of capitalising on the tremendous opportunities which are now arising, and look to the future with confidence as customer launches and service roll-outs are implemented."

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About Earthport

Earthport plc, a regulated global financial services organisation, specialises in the provision of a white label cross-border payments service.

Through its innovative payments framework, specifically designed for high volumes of low value cross-border payments, Earthport provides a cost-effective and transparent service for secure international payments. Earthport's customers include banks, foreign exchange businesses, money transfer organisations, payment aggregators and e-commerce businesses. Through Earthport's well established payments infrastructure, customers can clear and settle payments directly to banked beneficiaries in over 50 countries.

The Company is headquartered in London and is listed on the Alternative Investment Market (AIM) on the London Stock Exchange. It operates globally with additional regional offices in Dubai and New York. Earthport plc is authorised and regulated by the Financial Services Authority under the Payment Service Regulations 2009 for the provision of payment services. To learn more, please visit www.earthport.com and follow us on Twitter @Earthport.

Introduction

Earthport provides a transparent and cost-effective white-labelled cross-border payments service, specifically designed to process high volumes of low value payments with a straight-through-processing efficiency rate of 99+%.

The Company's service propositions are highly attractive to a wide range of institutions needing or offering cross border payment services and who are challenged by the underdeveloped infrastructure supporting low value cross border payments as well as the emerging regulatory demands placed on legacy platforms.

During this period, Earthport enjoyed considerable success in signing contracts with some of the leading businesses across a number of key sectors - banks, corporates and payments platforms. Many of these relationships are in the early stages of implementation, and we anticipate accelerated growth going forward. Our experience is that while these contracts testify to the appeal of the Earthport service and long term growth prospects, the process of on-boarding and rolling out the service offering for large corporates is elongated.

During the period, nine new customers were signed and eight customer implementations went live.

Market developments continue to work to Earthport's advantage. The long term dynamic supporting expansion of global trade remains in place. Remittance payments are increasingly bank-to-bank payments as opposed to cash delivery, due to an ever-more global mobile workforce. eCommerce has grown through the proliferation of the internet. Regulation, particularly Dodd Frank (DFS 1073) in North America and SEPA in Europe, are seeking greater transparency in cross-border payments in terms of cost and delivery timing.

Financial Review

The number of transactions processed increased by 72% compared to the prior period. This growth occurred primarily from existing and live clients, and therefore does not reflect as yet the full impact of the contracts signed over the last year. Revenue for the six months ended 31 December 2012, increased by 32% to £1.83m (H1 2012: £1.39m). A portion of growth is attributable to Earthport processing domestic payments (non-cross border) for customers which generate a lower fee per transaction, but maintain the overall transactional margin level.

Gross profit for the period was £1.42m (H1 2012: £1.05m) and gross margin increased to 77.7% from 75.6% compared with the prior period.

Administrative expenses fell by 7% to £5.16m (H1 2012: £5.55m), this is mainly due to the capitalisation of IT development costs amounting to £0.65m.

Operating loss, before a share based payment charge of £0.77m, for the six months (H1 2012: £0.66m) decreased by 17% to £3.74m (H1 2012: £4.50m).

Overall, Earthport's loss before and after taxation fell by 13% to £4.51m (H1 2012: £5.19m).

Cash and cash equivalents as at 31 December 2012 were £9.6m (31 December 2011: £10.9m) following a successful placing, raising gross proceeds of £8.0m with both existing and new institutional investors in October 2012. The funds raised will facilitate the continued growth of Earthport, particularly the expansion of country coverage, further geographical expansion, direct sales and channel partner programs.

Review of the Period

Strong progress was achieved during the first half of the financial year, with several major customer signings and systems going live. In addition, both network coverage and transaction volumes increased throughout the period. Transaction volumes grew by approximately 72% compared to the prior period. Costs have stabilised and were in-line with the previous period. Base costs are not expected to increase other than related to specific revenue producing activities such as delivery of professional services.

During the period, three large banks were signed. These include Bank of America N.A. which contracted with Earthport to expand its low-value, cross-border service capability and BB&T Corporation, which will use the Earthport service for retail person to person payments, providing a transparent service in line with the requirements under Dodd Frank 1073 regulation.

Changing regulation, particularly in North America, has driven increased traction in the sales pipeline, resulting in the agreement with BB&T and two significant ($100,000+) consulting engagements; one with an existing customer and one with a new customer. We expect both engagements to lead to full implementations in due course. Two further consulting agreements, unrelated to Dodd Frank, have also been signed with a major international bank and one of our channel partners.

The Company focused significant effort on supporting the previously announced partner relationships. Since the start of the financial year, these partners have contracted with three clients; two of which are large banks and one is an Asian remittance business. This is our second Asian based customer following the signing of the Company's first Asian client earlier in the period.

While some of the activities detailed above generated integration and professional services revenues in the first half of the year, minimal transactional revenue from the above mentioned clients is included in the revenues to 31 December 2012. Several of these relationships are expected to start generating transactional revenues in the second half as services are launched and go-live.

With some of the world's largest financial services brands now using Earthport, the business has seen heightened interest in all forms of cross border activity. In light of a business focus to serve the banking community, the Company has strived to improve the quality of customers and transactions. As a result of a business review, Earthport has taken the step of discontinuing transacting relationships with three revenue generating clients who do not align to the Company's stated strategic direction.

From the traction to date, it is clear that Earthport's low-value, cross-border payments service is starting to be viewed as a mainstream function of the banking industry. We expect to have increasing momentum in this space. Transaction volumes follow four to eight months after contracting with a client, with larger clients taking longer than smaller ones to adopt the service. Minimum transaction commitments and professional services revenues are now providing a significant revenue contribution during the integration and adoption phase.

Outlook

Earthport's addressable market is significant, and while early transaction volume increases have been encouraging, they do not as yet represent the potential scale of the business. Customers that are signed and live are at the earliest stage of their evolution and are expected to grow for many years to come. Additionally, there are several significant customers signed and yet to go live, and many more potential customers in early discussion stages.

The timing of growth in each customer is difficult to predict as the sales and implementation process can be protracted. Earthport's service is replacing an incumbent process within a conservative market that is historically reticent to implement change; however expansion is now taking place at an increasing pace. Over the last 18 months in particular, Earthport has experienced increasing traction with the largest players within the financial services industry.

The strength of our sales pipeline means our main focus is now the closure and implementation of deals in our core geographies of North America, Europe, Russia and the CIS. This will continue into 2013. Areas relatively unexploited thus far by Earthport include Asia, Latin America and Africa. The Company has made substantial progress in building out its network to encompass these regions; providing a base for expansion. Earthport may explore accelerating its presence through a partnership program ahead of direct expansion into these regions in future years.

Earthport continued to broaden its reach and consolidate its market position, and the Board believes the Company is well positioned to exploit its significant market opportunity.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the six months ended 31 December 2012

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

at 31 December 2012

CONSOLIDATED STATEMENT OF CASH FLOWS

for the six months ended 31 December 2012

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Six months ended 31 December 2011 (Unaudited)

Six months ended 31 December 2012 (Unaudited)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Year ended 30 June 2012 (Audited)

notes to the INTERIM results

for the six months ended 31 December 2012

1. GENERAL INFORMATION

Earthport plc is a public limited company incorporated and domiciled in the England and Wales under the Companies Act 2006. The address of its principal place of business and registered office is 21 New Street, London EC2M 4TP.

2. GOING CONCERN

The interim financial information has been prepared on the assumption that the Group is a going concern.

When assessing the foreseeable future the directors have looked at a period of twelve months from the date of approval of the interim financial information. The forecast cash-flow requirement of the business is contingent upon the ability of the Group to generate future sales. The uncertainty as to the timing of the future growth in sales, together with the potential impact on the follow-on funding arrangements require the directors to consider the Group's ability to continue as a going concern. Notwithstanding this uncertainly, the directors believe that the Group has demonstrated progress in achieving its objective of positioning the Group as an infrastructure supplier to the global payments industry, and therefore consider that it is appropriate to prepare the Group's interim financial information on a going concern basis, which assumes that the Company is to continue in operational existence for the foreseeable future.

3. ACCOUNTING POLICIES

Basis of preparation

The interim financial information is prepared using accounting policies consistent with International Financial Reporting Standards ("IFRS'') as adopted by the European Union.

The financial statements have been prepared under the historical cost convention and the principal accounting policies are set out in the 30 June 2012 financial statements.

notes to the INTERIM results

for the six months ended 31 December 2012

4. LOSS PER SHARE

Loss per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period.

The loss attributable to Ordinary shareholders and weighted average number of ordinary shares for the purposes of calculating the diluted loss per share are identical to those used for basic loss per ordinary share. This is because the exercise of share options and other benefits would have the effect of reducing loss per share and is therefore not dilutive under the terms of IAS33 "Earnings per share".

5. TRADE AND OTHER RECEIVABLES

notes to the INTERIM results

for the six months ended 31 December 2012

6. TRADE AND OTHER PAYABLES

Trade payables and accruals principally comprise amounts outstanding in respect of operating costs. The directors consider that the carrying amounts for trade and other payables approximate their fair value.

7. SHARE CAPITAL

Authorised

The Articles of Association were amended on 24 March 2010. The Company has no authorised share capital limit.

Issued

On 22 October 2012 the Company raised gross proceeds of £8m by placing and issuing 55,186,372 new ordinary shares of 10p each.

Deferred shares carry no rights to receive any dividend nor other distribution. The holders of the deferred shares have no rights to receive notice, nor attend, speak or vote at any general meeting of the Company. On a return of capital on liquidation or otherwise, the holders of the deferred shares are entitled to receive the nominal amount paid up on the deferred shares after the repayment of £10,000,000 per ordinary share.

notes to the INTERIM results

for the six months ended 31 December 2012

8. SHARE PREMIUM

9. OWN SHARES

10. RECONCILIATION OF LOSS BEFORE TAX TO NET CASH OUTFLOW FROM

OPERATING ACTIVITIES

notes to the INTERIM results

for the six months ended 31 December 2012

11. PUBLICATION OF NON-STATUTORY FINANCIAL STATEMENTS

The results for the six months ended 31 December 2012 and 31 December 2011 are unaudited and have not been reviewed by the auditor. The results for the year ended 30 June 2012 do not constitute statutory financial statements as defined in section 434 of the Companies Act 2006, but have been derived from the full audited financial statements for the year ended 30 June 2012. Statutory accounts for the year ended 30 June 2012, on which the auditors gave an audit report which was unqualified and did not contain a statement under section 498(2) or (3) of the Companies Act 2006, have been filed with the Registrar of Companies.

12. The interim results for the six months ended 31 December 2012 are available on the Company's website: www.earthport.com.