Billing Services : Interim Results for Six Months Ended June 30, 2019

For Immediate Release

Billing Services Group Limited

("BSG" or the "Company")

Unaudited interim results for the six months ended June 30, 2019

IMPROVED EBITDA DRIVEN BY HIGHER GROSS MARGIN

AND LOWER OPERATING EXPENSES

(September 20, 2019) San Antonio, Texas, USA - BSG, a leading provider of telecommunications clearing and financial settlement products, Wi-Fi data solutions and verification services, today announces its unaudited results for the six months ended June 30, 2019.

Financial Highlights
(All amounts in US$)
		Six Months Ended June 30
		2019		2018
Revenues	$	7.0 million	$	8.4 million
Gross margin		64.4%		58.3%
Cash operating expenses	$	4.0 million	$	4.5 million
EBITDA (1)	$	0.5 million	$	0.3 million
Net income (loss)	$	0.0 million	$	(0.6) million
Net income (loss) per basic share	$	0.00 per share	$	(0.00) per share
Cash balance at end of period	$	7.1 million	$	9.0 million

• 1. EBITDA is computed as earnings before interest, income taxes, depreciation, amortization and other non-cash and nonrecurring income or expense items. EBITDA is not a recognized measure under generally accepted accounting principles (GAAP).
• Experienced a $1.4 million decline in revenue ($7.0 million vs. $8.4 million in the first half of 2018)
• Improved gross margin by 6.1 percentage points (64.4% vs. 58.3% in the first half of 2018)
• Reduced operating expenses by $0.5 million ($4.0 million vs. $4.5 million in the first half of 2018)
• Generated $0.5 million of EBITDA (2018: $0.3 million)
• Paid $1.3 million in cash dividends

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• Ended the period with $7.1 million of cash (December 31, 2018: $9.2 million)
• Ended the period with $5.4 million of working capital (December 31, 2018: $6.6
  .million)

BSG Wireless Operational Highlights

• Renewed the web application contract with British Telecom
• Signed a new authentication service contract with Comcast
• Signed two new mobile application development and service contracts with Comcast
• Renewed our WLDS two year contract with Telus

Third Party Verification ("VoiceLog") Operational Highlights

• Completed an Electronic Letter of Authorization product offering that has been deployed with our first client
• Implemented processes to begin handling telemarketing sales with Direct Energy
• Completed organizational and certain partner changes that streamlined operations and delivery updates and resulted in cost savings

Current Trading and Strategy

• As described in previous announcements, the Company performed a strategic review to assist the Board in determining the future composition of the group, including capital structure and business lines. There have been five material actions taken as a result of the review:
• • Completed a $5.0 million cash tender offer in December 2017
  • Engaged investment banks and initiated discussions to sell BSG Wireless in 2017
  • Paid a $1.2 million cash dividend in July 2018
  • Renewed discussions with possible buyers for all or parts of the business in 2019
  • Paid a $1.3 million cash dividend in April 2019
• Following a sale of any portion of BSG's businesses, the Board will consider further cash distributions and other actions with respect to any remaining assets or business lines.
• Trading for the six months ended June 30, 2019 was in line with the Board's expectations and consistent with the recent trading conditions experienced by the Company.
• The Company will not provide guidance on projected future financial performance at this time.

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Commenting on the results, Denham H.N. Eke and Jason R. Wolff, Non-Executive Co- Chairmen, said:

"The first-half results demonstrate the Company's disciplined execution of its business plan. Improved gross margins and lower operating expenses enabled the Company to generate a higher level of EBITDA despite lower revenues."

INQUIRIES:
Billing Services Group Limited	[phone]
Norman M. Phipps
finnCap Limited	[phone]
Stuart Andrews/Scott Mathieson

About BSG:

BSG's headquarters is located in San Antonio, Texas, USA. The Company's shares are traded on the London Stock Exchange (AIM: BILL). For more information on BSG, visit (www.bsgclearing.com).

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CHIEF EXECUTIVE'S STATEMENT

Our first-half results for 2019 demonstrate an effective execution of the business plan. The Company generated $0.5 million of EBITDA, which was an improvement over the $0.3 million generated in the same period last year. The $0.2 million improvement in EBITDA is particularly noteworthy, because revenues declined $1.4 million (17%) compared to the first half of last year.

The Company paid a $1.3 million cash dividend in April 2019. At June 30, 2019, the Company held $7.1 million in cash.

Financial Performance

Revenues. The decline in revenues was expected. For the past several years, we have regularly commented on the secular decline in transaction volumes associated with our legacy business line - billing and clearing services relatedrenderedto wireline telecommunication providers. The trend will continue as wireless communications displace wireline phone usage. It is also important to reiterate that a decision by the remaining local exchange carriers (LECs) to exit third-party billing will have a material adverse effect on this business segment and the overall business.

BSG operates two other business lines designed to complement the legacy business segment and diversify revenue streams. The first, BSG Wireless, provides Wi-Fi data clearing services to wireless network operators in North America and Europe. Unlike our legacy business, BSG Wireless is a beneficiary of growth in wireless communications. Our other business line, VoiceLog, provides independent transaction confirmations for US customers, including utility services, cable/telecommunication companies and healthcare providers. VoiceLog is unaffected by trends in wireline and wireless communications. Combined revenues from these two business lines compare favorably to last year, but in an amount insufficient to offset the revenue decline in our legacy business line.

EBITDA. The improvement in this year's first-half EBITDA resulted from an expansion of gross margin and expense reductions. Gross margin improved by 6.1 percentage points due to (i) more favorable pricing on services related torendered inour legacy business line and (ii) revenue growth in BSG Wireless, which operates at a higher gross margin level than the legacy business. Additionally, EBITDA benefitted from $0.5 million of expense reductions, which largely resulted from moving a portion of BSG Wireless' UK-based sales, data management, accounting and financial functions into the Company's San Antonio facility. The realignment reduced compensation and other expenses. The expense reduction actions were taken in steps during the first half of 2018. A full six-month effect of the on-going savings was realized during the first half of 2019.

Balance Sheet. The Company's balance sheet at June 30, 2019 is strong, with $7.1 million of cash and $5.4 million of working capital. The reduction in cash balance and working capital during the first half of 2019 is largely attributable to the $1.3 million cash dividend paid in April and the adoption of the new lease accounting standard (see Note 4).

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Strategic Review

As described in previous announcements, the Company initiated a strategic review to assist the Board in determining the future composition of the group, including capital structure and business lines. There have been five material actions taken as a result of the review:

• Completed a $5.0 million cash tender offer in December 2017
• Engaged investment banks and initiated discussions to sell BSG Wireless in 2017
• Paid a $1.2 million cash dividend in July 2018
• Renewed discussions with possible buyers for all or parts of the business in 2019
• Paid a $1.3 million cash dividend in April 2019

The actions listed above have cumulatively returned $7.5 million in cash to shareholders over the past 18 months.

Going Forward

Management continues to focus on actions that will improve earnings and cash flow. The Board remains focused on the future composition of the group, including creating liquidity events for our shareholders, and the optimization of capital allocation.

In light of the potentially significant changes in the business, we will not provide guidance on projected future financial performance.

Sincerely,

Norman M. Phipps

Chief Executive Officer

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