PAYCORP PLC

('Paycorp' or the 'Company')

Interim Results

Six Months ended 30 June 2009

Chairman's Statement

I am pleased to announce the interim results of Paycorp Plc ('the Group') for the six month period ended 30 June 2009. The Group is a payments service provider delivering bank independent payments processing, electronic bill presentment, receivables management, hosted payment platforms and PCI DSS card data security solutions to financial institutions, government departments and other enterprises across Australia and New Zealand.

The Group loss for the period was £31,000 (six month period ended 30 June 2008 - £82,000 loss) based on Group revenues of £1,232,000 (six month period ended 30 June 2008 - £1,239,000). Cash and cash equivalents at 30 June 2009 were £317,000 (30 June 2008 - £1,087,000) and there were short term borrowings of £225,000 (30 June 2008 - £249,000). These results are broadly in line with the Board's expectations.

The financial benefits to the Group arising from the cost reduction programme undertaken in the latter part of the 2008 financial year and the first quarter of the 2009 financial year, are now being seen. Accordingly, the financial results for the year ending 31 December 2009 are expected to continue to improve. In the meantime, the Board remains conscious of the need to keep a tight control over Group costs.

  

There have been no significant changes in the going concern status of the Group since the release of the audited financial statements for the eighteen month period ended 31 December 2008. Accordingly, the Board has prepared the interim report on the going concern basis.

The financial benefits of the recently developed PCI Risk Management Solution 'Card Vault' will begin to be seen during the second half of the current financial year and beyond, and this product has already attracted strong interest from a broad range of enterprise level businesses. Given the development and introduction of new products and the continued demand for our existing suite of innovative payment and risk management solutions, the Board believes that the Group is well positioned for growth, particularly in light of the fact that in the current economic climate, out target clients need to reduce overheads, increase efficiency and optimise cash flow and as such we are well placed to win new orders and to enable them to achieve their goals.

As notified on 7 August 2009, at the AGM shareholders did not approve the re-election of David Southworth (who had earlier in the day notified the Board of his intention to resign) or Adrian Roche to the Board.  Discussions are ongoing with Adrian Roche and his advisers.  

I agreed to become Executive Chairman following the AGM with immediate effect and have assumed full day to day responsibility for the operation of the Group. Michael Edelson and I are looking to make further Executive and Non-Executive appointments as we restructure the Boards of the Company and its operating subsidiaries in due course and we will keep shareholders fully informed.  

J P Caliguri

Chairman

30 September 2009

The Directors of Paycorp accept responsibility for this announcement.

For further information please contact:

Paycorp Plc

Michael Edelson Tel: 0161 975 5757

Ian Aspinall

Zeus Capital

Ross Andrews Tel 0161 831 1512

Condensed Consolidated Statement of Comprehensive Income for the six months ended 30 June 2009

	1 January 2009 to	1 January  2008 to	1 July  2007 to
	30 June 2009 (unaudited) £000	30 June 2008 (unaudited) £000	31 December 2008 (audited) £000
Revenue	1,232	1,239	3,093
Administrative expenses	(1,226)	(1,270)	(3,534)
Operating profit/(loss)	6	(31)	(441)
Investment income	1	8	29
Finance costs	(38)	(59)	(110)
Loss before tax	(31)	(82)	(522)
Tax credit	-	-	131
Loss for the financial period	(31)	(82)	(391)
Other comprehensive income
Foreign currency translation differences for foreign operations	-	80	9
Total comprehensive loss for the period	(31)	(2)	(382)
Loss per share - basic and diluted	(0.00p)	(0.01p)	(0.04p)

Condensed Consolidated Statement of Changes in Total Equity for the six months ended 30 June 2009

	1 January 2009 to	1 January  2008 to	1 July  2007 to
	30 June 2009 (unaudited) £000	30 June 2008 (unaudited) £000	31 December 2008 (audited) £000
Balance at start of period	2,393	(453)	(231)
Total comprehensive loss for the period
Loss for the period	(31)	(2)	(382)
Other comprehensive income/(expense)
Foreign exchange translation differences	(11)	(61)	(53)
Effects of reverse acquisition	-	3,059	3,059
Balance at end of period	2,351	2,543	2,393

Condensed Consolidated Statement of Financial Position as at 30 June 2009

	As at 30 June 2009 (unaudited) £000	As at 30 June 2008 (unaudited) £000	As at 31 December 2008 (audited) £000
Non-current assets
Intangible assets	383	416	387
Goodwill	2,591	2,591	2,591
Property, plant and equipment	67	113	87
	3,041	3,120	3,065
Current assets
Trade and other receivables	241	128	231
Current tax assets	138	-	136
Cash and cash equivalents	317	1,087	503
	696	1,215	870
Total assets	3,737	4,335	3,935
Current liabilities
Trade and other payables	(440)	(489)	(492)
Current borrowings	(225)	(249)	(233)
Total current liabilities	(665)	(738)	(725)
Net current assets	31	477	145
Non-current liabilities
Non-current borrowings	(721)	(1,054)	(817)
	(721)	(1,054)	(817)
Total liabilities	(1,386)	(1,792)	(1,542)
Net assets	2,351	2,543	2,393
Equity
Called up share capital	1,116	1,116	1,116
Share premium account	1,516	1,516	1,516
Reverse acquisition reserve	427	427	427
Other reserves	(64)	(61)	(53)
Retained losses	(644)	(455)	(613)
Total equity	2,351	2,543	2,393

Condensed Consolidated Statement Cash Flows for the six months ended 30 June 2009

	1 January 2009 to 30 June 2009 (unaudited) £000	1 January 2008 to 30 June 2008 (unaudited) £000	1 July 2007 to 31 December 2008 (audited) £000
Cash flows from operating activities
Loss after tax	(31)	(82)	(391)
Adjustments for:
Loss on disposal of property, plant and equipment	-	-	6
Depreciation and amortisation	91	71	181
Investment income	(1)	(8)	(29)
Finance costs	38	59	110
Tax receipts	-	140	140
Operating cash flows before movements in working capital	97	180	17
(Increase)/decrease in trade and other receivables	(10)	257	1,499
Decrease in trade and other payables	(52)	(289)	(1,385)
Net cash from operating activities	35	148	131
Cash (used in)/from investing activities Purchase of business, net of cash acquired	-	938	938
Investment income received	1	8	29
Purchase of property, plant and equipment	-	(5)	(69)
Purchase of intangible assets	(67)	-	(5)
Net cash (used in)/from investing activities	(66)	941	893
Cash used in financing activities
Repayment of borrowings	(104)	(104)	(285)
Finance costs paid	(38)	(59)	(110)
Net cash used in financing activities	(142)	(163)	(395)
Net (decrease)/increase in cash and cash equivalents	(173)	926	629
Cash and cash equivalents at the beginning of the period	503	122	18
Foreign exchange differences	(13)	39	(144)
Cash and cash equivalents at the end of the period	317	1,087	503

Paycorp plc (the 'Company') is a company registered in England and Wales. These condensed consolidated interim financial statements of the Company for the six month period ended 30 June 2009 comprise the Company and its subsidiaries (together the 'Group').

The consolidated financial statements of the Group for the period ended 31 December 2008 are available upon request from the Company's registered office by writing to the Company Secretary, Paycorp plc, Number 14 The Embankment, Vale Road, Heaton Mersey, Stockport SK4 3GN or can be obtained from the Company's website which is http://www.paycorpplc.com. 

These condensed consolidated interim financial statements have been prepared on the basis of the recognition and measurement requirements of IFRS in issue that are either endorsed by the EU and effective (or available for early adoption) at 31 December 2009.

These condensed consolidated interim financial statements should be read in conjunction with the Report and Accounts for the period ended 31 December 2008, which were approved for issue by the Board of Directors on 25 June 2009, as it provides an update of previously reported information. The comparative figures for the period ended 31 December 2008 are not the Company's statutory accounts for that financial period.

The comparative figures for the period ended 31 December 2008 were derived from the statutory accounts for that period which have been delivered to the Registrar of Companies. Those accounts received an unqualified audit report which did not contain statements under sections 498 (2) or (3) of the Companies Act 2006.

These condensed consolidated interim financial statements were approved by the Board on 30 September 2009. The financial information contained therein for the six month period ended 30 June 2009 and similarly the six month period ended 30 June 2008 has neither been audited nor reviewed.  

The accounting policies used in the presentation of these condensed consolidated interim financial statements are consistent with those used in the consolidated financial statements for the period ended 31 December 2008.

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the period ended 31 December 2008.

The Group's business segments are its payment processing operations in Australia and its head office in the United Kingdom. This is the basis on which the Group reports its primary segmental information. In the table below, all revenues are generated by sales to external parties.        

	Payment processing	Paycorp plc	Total
	£000	£000	£000
Performance by activity:
Revenue:
- six months ended 30 June 2009	1,232	-	1,232
- six months ended 30 June 2008	1,239	-	1,239
- period ended 31 December 2008	3,093	-	3,093
Operating profit/(loss):
- six months ended 30 June 2009	100	(94)	6
- six months ended 30 June 2008	(4)	(27)	(31)
- period ended 31 December 2008	(333)	(108)	(441)
Total assets:
- 30 June 2009	1,452	2,285	3,737
- 30 June 2008	1,325	3,010	4,335
- 31 December 2008	1,478	2,457	3,935

The Group operates in a sector where no significant seasonal or cyclical variations in revenues and operating results are experienced during the financial year.

The Group's financial risk management objectives and policies are consistent with those disclosed in the consolidated financial statements for the period ended 31 December 2008.

Basic loss per share has been calculated using the loss for the period of £31,000 (£82,000 loss for the six month period ended 30 June 2008 and £391,000 loss for the eighteen month period ended 31 December 2008) and a weighted average number of ordinary shares in issue during the period of 1,116,000,000 (952,307,692 for the six month period ended 30 June 2008 and 972,843,636 for the eighteen month period ended 31 December 2008).  

Diluted loss per share is calculated by adjusting the weighted average number of ordinary shares in issue assuming conversion of all dilutive potential ordinary shares.  The Company's potential ordinary shares consist of share options, warrants and deferred consideration.  Due to losses in the current and comparative periods there are no dilutive ordinary shares.

8.         Dividends

No dividend is proposed for the six month period ended 30 June 2009. No dividend was paid in or proposed for the period ended 31 December 2008.

9.         Copies of this Interim Report

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

ENDIR EAXNNAAFNEFE