PAYCORP PLC

('Paycorp' or the 'Company')

Interim Results

Six months ended 30 June 2008

Chairman's Statement

We are pleased to announce the inaugural results for Paycorp plc (the 'Group') for the six month period ended 30th June 2008. The Group is a payments service provider delivering electronic payment, billing and risk management solutions, business process outsourcing and professional services to financial institutions, government departments and other companies across Australia and New Zealand.

On 22nd April 2008, Birch Partners plc made the reverse acquisition of Paycorp Payments Solutions Pty Limited and the Group was admitted to trading on PLUS. The consolidation of the Group with its trading subsidiaries for the period ended 30th June 2008 has been accounted for as a reverse acquisition in accordance with IFRS 3 - Business Combinations. Therefore, the income statement for the period ended 30th June 2008 reflects the trading results of the subsidiary companies throughout that period and the post acquisition results of the parent entity. The comparative figures reflect the results, assets and liabilities of the subsidiaries only and accordingly, a direct comparison of the results shown in these interim financial statements is not possible.

Group revenue of £1,239,000 and loss before tax of £82,000 for the period ended 30th June 2008 are slightly behind the Board's budget but they do show an improving trend against prior periods. In addition, administrative expenses include a one-off charge of £128,000 in respect of the costs of admission to PLUS Markets. At 30th June 2008, the Group had cash and bank balances of £1,087,000 and short term bank borrowings of £249,000.

The financial results for the year ending 31st December 2008 are expected to be broadly in line with the Board's forecast. In order to achieve the targeted revenue growth beyond the current financial year, we have already commenced a significant investment programme in the Group's infrastructure. In addition, the Group is in negotiations with a number of potential new clients, some of which are expected to provide new business opportunities within the next six months.

D R Southworth

Chairman

24th September 2008

The Directors of Paycorp accept responsibility for this announcement.

For further information please contact:

Paycorp plc                                                                                                                              0161 975 5757

Michael Edelson

Ian Aspinall

Zeus Capital                                                                                                                            0161 831 1512

Ross Andrews

  PAYCORP PLC

CONSOLIDATED INCOME STATEMENT

FOR THE SIX MONTHS ENDED 30 JUNE 2008

	1 January 2008 to	1 July  2007 to	1 July 2006 to
	30 June 2008	31 December 2007	30 June 2007
	£000	£000	£000
Revenue	1,239	677	1,034
Administrative expenses	(1,270)	(818)	(1,346)
Operating loss	(31)	(141)	(312)
Finance income	8	3	-
Finance costs	(59)	(13)	(19)
Loss before tax	(82)	(151)	(331)
Income tax credit	-	-	115
Loss for the financial period	(82)	(151)	(216)
Loss per share - basic and diluted	(0.01p)	(0.02p)	(0.03p)

  PAYCORP PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 JUNE 2008

	Share capital	Share premium account	Other reserves	Retained losses	Total
	£000	£000	£000	£000	£000
As at 1 July 2006	-	-	-	(503)	(503)
Loss for the financial period	-	-	-	(216)	(216)
As at 30 June 2007	-	-	-	(719)	(719)
Acquisition of minority interest	-	-	-	(131)	(131)
Effect of common control transaction	1	-	345	-	346
Loss for the financial period	-	-	-	(151)	(151)
As at 31 December 2007	1	-	345	(1,001)	(655)
Issue of Share Capital	874	252	-	-	1,126
Expenses of share issue	-	(53)	-	-	(53)
Effects of reverse acquisition	241	1,324	(45)	(95)	1,425
Loss for the financial period	-	-	-	(82)	(82)
As at 30 June 2008	1,116	1,523	300	(1,178)	1,761

  

PAYCORP PLC

CONSOLIDATED BALANCE SHEET

AS AT 30 JUNE 2008

	As at 30 June 2008	As at 31 December 2007	As at 30 June 2007
	£000	£000	£000
Non-current assets
Intangible assets	416	407	254
Goodwill	1,992	360	19
Property, plant and equipment	113	137	162
Total non-current assets	2,521	904	435
Current assets
Trade and other receivables	116	109	127
Current tax assets	-	151	276
Other current assets	12	16	9
Cash and cash equivalents	1,087	122	-
Total current assets	1,215	398	412
Current liabilities
Trade and other payables	(489)	(504)	(1,268)
Current tax liabilities	(183)	(168)	(161)
Current borrowings	(249)	(227)	(137)
Total current liabilities	(921)	(899)	(1,566)
Net current assets/(liabilities)	294	(501)	(1,154)
Non-current liabilities
Non-current borrowings	(1,054)	(1,058)	-
Total non-current liabilities	(1,054)	(1,058)	-
Net assets/(liabilities)	1,761	(655)	(719)
Equity
Called up share capital	1,116	1	-
Share premium account	1,523	-	-
Reverse acquisition reserve	274	-	-
Other reserves	26	345	-
Retained losses	(1,178)	(1,001)	(719)
Total equity	1,761	(655)	(719)

PAYCORP PLC

CONSOLIDATED CASH FLOW STATEMENT

FOR THE SIX MONTHS ENDED 30 JUNE 2008

	1 January 2008 to	1 July 2007 to	1 July 2006 to
	30 June 2008	31 December 2007	30 June 2007
	£000	£000	£000
Cash flows from operating activities
Loss before tax	(82)	(151)	(331)
Adjustments for:
Depreciation and amortisation	71	46	125
Decrease/(Increase) in trade and other receivables	247	24	(33)
Decrease/(Increase) in other current assets	10	10	(143)
(Decrease)/Increase in trade and other payables	(309)	16	138
Increase in other liabilities	-	-	30
Finance income	(8)	(3)	-
Income taxes received	165	137	115
Finance costs	59	13	19
Net cash from/(used in) operating activities	153	92	(80)
Cash flow from investing activities Finance income received	8	3	-
Purchase of property, plant and equipment	(5)	(12)	(301)
Cash from business combinations	1,232	33	-
Net cash from/(used in) investing activities	1,235	24	(301)
Cash flow from financing activities
Costs of share issues	(260)	-	-
Proceeds from borrowings	-	-	68
Repayment of borrowings	(104)	-	(19)
Proceeds from related party loans	-	30	-
Finance costs paid	(59)	(13)	(19)
Net cash (used in)/from financing activities	(423)	17	30
Net increase/(decrease) in cash and cash equivalents	965	133	(351)
Cash and cash equivalents at the beginning of the period	122	(11)	340
Cash and cash equivalents at the end of the period	1,087	122	(11)

  PAYCORP PLC

NOTES TO THE INTERIM REPORT

FOR THE SIX MONTHS ENDED 30 JUNE 2008

1.    The interim financial statements have not been audited and they do not constitute full financial statements within the meaning of s240 of the Companies Act 1985.  The statutory accounts of Paycorp plc for the year ended 31 December 2007 have been delivered to the Registrar of Companies.  The auditors' opinion on those financial statements was unqualified and did not contain a statement under s237(2) or s237(3) of the Companies act 1985.

2.    The interim financial statements have been prepared in accordance with the accounting policies anticipated to apply to the statutory accounts for the period ending 31 December 2008, which will be prepared in accordance with International Financial Reporting Standards as adopted by the EU (IFRS).

3.    In April 2008 Paycorp plc acquired Paycorp Payment Solutions Pty Limited ('PPS') and its subsidiary companies Business Interface Services Pty Limited ('BIS'), Paycorp Holdings Pty Limited ('PH') and Paycorp Australia Pty Limited ('PA'). In the period ended 31 December 2007, PPS had become the parent entity to BIS, PH and PA by a common control transaction. Such transactions are outside the scope of IFRS 3 - Business Combinations and the directors have decided to apply predecessor accounting to this transaction which does not give rise to goodwill and results are restated as if both entities had always been combined.  

4.    The consolidation of Paycorp plc with its trading subsidiaries in the period ended 30 June 2008 has been accounted for as a reverse acquisition in accordance with IFRS 3 - Business Combinations. In accordance with this method, the legal parent entity is treated as the subsidiary and the legal subsidiary is treated as the parent.  Therefore, the income statement for the period ended 30 June 2008 reflects the trading results of the subsidiary companies throughout that period and the post acquisition results of the parent entity.  The comparative figures reflect the results, assets and liabilities of the subsidiaries only.

5.    In accordance with the principles of reverse acquisition accounting, goodwill has been calculated as the excess of the fair value of consideration effectively transferred over the fair value of the net assets of Paycorp plc on the acquisition date.  The fair value of consideration effectively transferred was calculated by reference to the fair value of Paycorp plc's issued equity instruments on the date of the business combination.

  PAYCORP PLC

NOTES TO THE INTERIM REPORT

FOR THE SIX MONTHS ENDED 30 JUNE 2008

6.    Basic loss per share has been calculated using the loss for the period of £82,000 (£151,000 loss for the six month period ended 31 December 2007 and £216,000 loss for the year ended 30 June 2007) and a weighted average number of ordinary shares in issue during the period of 588,150,000 (850,000,000 for the six month period ended 31 December 2007 and 850,000,000 for the year ended 30 June 2007). In accordance with IFRS 3 relating to reverse acquisitions for the purpose of calculating the weighted average number of shares, the weighted average number of ordinary shares outstanding (the denominator) during the period in which the reverse acquisition occurs is:

• the number of ordinary shares outstanding from the beginning of that period to the acquisition date is deemed to be the number of ordinary shares issued by the legal parent to the owners of the legal subsidiary; and

• the number of ordinary shares outstanding from the acquisition date to the end of that period is the actual number of ordinary shares of the legal parent outstanding during that period.

    The basic loss per share disclosed for each comparative period before the acquisition date that is presented is calculated by dividing the profit or loss of the legal subsidiary attributable to ordinary shareholders in each of those periods by the number of ordinary shares issued by the legal parent to the owners of the legal subsidiary in the reverse acquisition.

    Due to losses in the current and comparative periods there are no dilutive ordinary shares and, therefore, basic and diluted loss per share figures are the same.

7.    Copies of this interim report will be posted to all of the Company's shareholders shortly.  Further copies can be obtained by writing to The Company Secretary, Paycorp plc, Number 14, The Embankment, Vale Road, Heaton Mersey, Stockport, Cheshire, SK4 3GN, England.

EDITOR'S NOTES

INFORMATION ON PAYCORP PLC

With the headquarters in Sydney, Australia, Paycorp is an established payments solutions service provider of secure payments, billing and business continuity solutions. Paycorp supports in excess of 40,000 clients and processes in excess of AU$5.8 billion of payments per annum.

Paycorp's clients are supported from two operating divisions: (i) electronic payments; and (ii) business process outsourcing, each delivering integrated solutions to financial institutions, government agencies and the corporate sector.

In particular, Paycorp delivers integrated enterprise solutions developed to meet the specific requirements of industry verticals some of which include: banking and financial services, telecommunications, real estate and superannuation pension scheme participants.

Paycorp's revenue streams are delivered from monthly subscriptions, hosting and services retainers and fees on a per transaction basis. 

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