Mi-Pay 2018 a year of strong progress

Mi-Pay (LON: MPAY), a leading provider of digital transformation and mobile payment solutions, is pleased to present its Final Results for the year ended 31 December 2018.

Michael Dickerson, Executive Chairman of Mi-Pay Group plc commented on the results:

“2018 has been a year of strong progress for Mi-Pay in which key milestones have been achieved. We processed over £100 million in fully managed payment transactions for the first time and successfully delivered indemnified payment fraud management services driving £0.3 million of profitable new revenue. This, combined with a continuing ability to scale efficiently and improve our cost base, delivered a material reduction in losses for the year and a profit after interest, tax, depreciation, amortisation and share based payments in H2 2018. We enter 2019 having secured long term contractual extensions for clients representing 43% of our 2018 revenue and long-term infrastructure relationships which will provide real stability as we grow and as such a strong platform for the future.”

“The market we operate in continues to change as new European payment compliance directives impact solution providers and our clients consolidate their offerings and vendors, especially as they increasingly focus on the transition to digital solutions, our core offering. This offers both opportunities and risks, however our knowledge, in house solutions and efficiencies in digital e-commerce provides a strong platform to build from.”

Financial Highlights

· £106.0m of payment transaction value processed in 2018 from 7.4 million processed transactions (2017: £94.0 million and 6.7 million respectively).

· Delivered fraud management services indemnifying £43.6m of payments against fraud, driving £0.3 million of new revenue from its first full year of trading (2017: Nil).

· Total Revenue of £3.3 million for the year (2017: £3.1 million), comprising:

o Transaction Services Revenue of £2.6 million (2017: £2.7 million);

o Fraud Services Revenue of £0.3m (2017: Nil); and

o Professional Services Revenue of £0.4 million (2017: £0.4 million).

· Gross profits increased to £2.1 million (2017: £2.0 million) due to new fraud services.

o Transaction Services gross margin remained stable at 63% (2017: 63%).

o New Fraud Services gross margin was 39% (2017: Nil).

· Administrative costs fell by £0.3m during the year as a result of the reorganisation and infrastructure cost renegotiation. These savings are expected to continue into 2019 and beyond.

· Operating loss reduction to £0.2 million (2017: £0.6 million).

· Cash and cash equivalents as at 31 December 2018 increased to £3.5 million (31 December 2017: £2.9 million).

· Basic loss per share 0.5 pence (2017: 1.5 pence).

Operational Highlights

· 12 month contract signed to deliver indemnified fraud services on mobile top up and digital content services in mainland Europe.

· Successfully integrated into our largest client’s new infrastructure, transferring their acquired customer base onto our platform, driving increased revenues.

· Post year end contract extensions announced with clients representing 43% of 2018 revenue.

· Long term extension of core transaction processing software license and global technology infrastructure delivering scalable stability and reducing our recurring cost base.

· Board restructure successfully implemented.

· Continued strong metrics from our in-house cyber security, fraud and content management solutions driving the growth in revenue and gross profits:

o Average chargeback rate 0.04% (2017: 0.06%).

o Average payment success percentage 87.8% (2017: 89.2%).

o Increased consumer data consumption drove average revenue per transaction to £14.37 (2017: £14.09).

Both the full Annual Report and Financial Statements and the notice of AGM, convening a general meeting of the Company, to be held at 30 Crown Place, London, EC2A 4ES on the 21st May 2019 at 11 a.m. are available on our website at www.mi-pay.com/investor-document-centre/ and will be posted to Shareholders shortly.

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