Earthport (AIM: EPO.L), the leading payment network for cross-border payments, is pleased to provide an unaudited trading update for the six month period ended 31 December 2015 (“H1 FY16”).

• Financial and Transactional Highlights
• Revenues expected to be in excess of £10.5 million
  • An increase of 18% compared to H1 FY15
• Revenue growth would be higher without the impact of restructuring certain business lines as detailed below.

o    Transactional revenues comprised more than 85% of total revenue

o    Gross margin remained consistent at approximately 75%

• Cash balance at period end was over £24 million following accelerated investments in regional expansion and product development described below
• Monetary value of transactions processed increased more than 60% from H1 FY15
• Year-end run-rate in excess of $11 billion and growing
• Transaction volume increased more than 70% from H1 FY15
• Market Position and Strategic Progress
• The Earthport Payment Network recognised as a unique and credible solution for resolving the inefficiencies and short-comings of the traditional cross-border payments model
• Client growth and accelerating adoption has been achieved across all market segments:
  • 6 of the top 25 global Banks
• 9 of the top traditional and emerging Money Transfer Organisation’s
• 7 of the key “challenger” international payment companies
• Processing payments for some of the fastest growing and leading ecommerce and shared economy companies
• Continued focus on expansion of the Earthport Payments Network with the successful establishment of new network partnerships in major Asian and Caribbean markets
• Executed payments across 182 destination countries, in 54 currencies
• Distributed Ledger (“DL”) Strategy
• Earthport has a uniquely strong competitive advantage in realising the potential of DL for cross-border payments:
• Earthport provides the first and the only solution to solve the compliance challenges of utilising DL technology for cross-border payments. This solution bridges existing cross-border payments methods and emerging DL offerings, accessed via a single API with full compliance capability:

• Earthport Ripple gateway partnership announced August 2015
• Earthport Distributed Ledger Hub for multiple ledgers announced January 2016. This has been designed to provide full connectivity to additional DL’s as they emerge, all available via a single Earthport API
• This supports Earthport’s core product capability and aligns directly with our mission to provide access to as many countries, currencies, accounts and payment types as possible through a single API. “Future Proofing” payments for our clients
• Pipeline of Customers Growing on Multiple Fronts
• Size and volume of prospective new business is growing across all regions
• While Bank clients continue to be the core focus of the Earthport commercial strategy – the credibility and strategic position of the platform is increasingly attracting clients from multiple sectors and geographies that have the potential to scale faster
• Ecommerce and Shared Economy marketplaces
• Networks of Post Offices
• Significant opportunities continue to unfold in new geographies across Asia and the Middle East
• Expect accelerating revenue growth from Non-European and Non-US clients
• Enhancing the Management Team and Board of Directors
• The Management Team and the Board benefited from two additions:
• Peter Klein, former Head of FX Brokerage at Bank of America, joined Earthport as Global Head of FX, in charge of all FX products across the Earthport Group
• Simon Adamiyatt, Earthport Chief Financial Officer, was elected to the Board of Directors
• Status of Restructuring Initiatives
• Prioritised resource and capital deployment to benefit from the Company’s market position given scale and scope of available opportunities
• Earthport has instituted a plan of focused selection of customer and product initiatives based on value and scalability of each opportunity:
• Certain non-core businesses were modified, thus resulting in some foregone short-term revenues in favour of more scalable prospective opportunities
• De-emphasised businesses include some traditional FX activities as well as activities focused on individual clients
• Enhanced focus areas include expansion into Asia and certain specific large opportunities in India and the Middle East-Asia corridors, details of which will be shared as they progress
• Awards and Recognitions
• Cfi.co Finance Awards, Best Cross-Border Money Transfer Solution 2015

o    Fintech Excellence Awards 2015, Cross-Border Payment Network of the Year

• Payments Awards 2015
  • Best Alternative Payments Project
• Payment Pioneer Award: Hank Uberoi, Earthport CEO