Smartpay Hits Profit and Expansion with Major Acquisition
Thursday, September 24, 2009

Better Margins And Restructured Business Helps Achieve Milestone Profit. - SmartPay (NZX: SPY) today announced that it has recorded a milestone net profit for the first quarter, well before its recently announced acquisition of ProvencoCadmus.

SmartPay (NZX: SPY) today announced that it has recorded a milestone net profit for the first quarter, well before its recently announced acquisition of ProvencoCadmus.
New Zealand's leading EFTPOS and payments processing provider said that the Company had recorded a first quarter unaudited net profit of $224,000 (previous year comparison negative -$1,023,000).

The Company is confident of sustaining ongoing profitability in its own right, with the recent purchase of the ProvencoCadmus payments business expected to add further profits to the business. In February 2009, SmartPay announced to the market that it was cash flow positive at an operating level following a major restructuring in 2008.

SmartPay Managing Director Ian Bailey says the Company's profit was made on slightly lower revenues but much better overall margins. "This reflected the tight focus SmartPay has had on striving to be a better margin business, as well as the removal of a number of non-performing customers, combined with the consolidation of the Company's operation, better product lines, new technology and completion of acquisitions," says Bailey.

Bailey adds that SmartPay's profit was completely in line with the expectations.
"SmartPay has proven that its business model and its reorganisation into three operating divisions is now delivering increased margins and producing profits. We are successfully expanding the merchant base as a result of more sales from legacy EFTPOS terminals converted to broadband via our IP-POS. In addition, SmartPay's range of new products such as VoIP, expansion into WI-FI areas like the hospitality sector all will add value to the Company's ongoing profitability."
"Despite the current economic conditions, SmartPay faces the future tightly focused on its core business with the ability to grow significantly with the added value that the purchase of the ProvencoCadmus Payments business will bring. In our view this will see acceleration of our business strategy in both New Zealand and Australia and continue to look for more opportunities to expand by acquiring targets that directly relate to our core business."

Bailey says SmartPay's rapid expansion of scale have come through the key acquisitions of All Talk Communications, Merchant IP Services, FIVO and ProvencoCadmus following a clear growth strategy.
"Our growth strategy and becoming profitable is based on our strategic identification of products and services used by Australasian merchants, providing these on a subscription model but at every stage SmartPay seeks to own the technology as well as the intellectual property behind that technology."

ENDS

For further information contact:
Ian Bailey, Managing Director, SmartPay Ltd, Mobile +64 21 664 941
Julien Leys, JML Communications, Mobile 021 655 598, Ph +64 9 358 2828