Smartpay Restructures Business To Deliver Profit

Smartpay Restructures Business To Deliver Profit And Cashflow

Auckland, 30 September 2008 - SmartPay (NZX: SPY) today announced it has implemented a restructuring programme that will focus the Company on its three main market segments of telecommunications, music/media and the taxi transaction payment market to better deliver profit and cashflow.

The announcement follows earlier news that the Company had appointed Ian Bailey, former founder and Managing Director of Cadmus Technology, as its new Managing Director. Mr Bailey is also a major shareholder of SmartPay via his technology investment company Riverhorse Investments Limited and has also invested in the latest Rights issue.

The key appointment of Bailey has led to a full strategic review of all aspects of SmartPay's business, including a reassessment of its priorities and the performance of each operating division. As a result, Ian Bailey says that SmartPay has undergone a restructuring which has reduced overheads by consolidating all staff into one building, reviewing its headcount, consolidating its multiple operating entities into a single entity, and implementing new accounting and reporting systems.

"SmartPay is now focused on the delivery of its merchant services and products in three key areas - media (including retail instore music and advertising); telecommunications (including VOIP, IP-POS/EFTPOS, Wi-Fi, and prepaid services); and the taxi transaction payment market in Australia and New Zealand," says Bailey.

"We re-financed the business by completing a successful shareholder rights issue earlier this year, which has strengthened the balance sheet." Bailey says.

"Dedicated management have now been tasked with the performance of each division and are responsible for their respective sales growth and profitability."

In addition, Bailey also notes that SmartPay is actively investigating significant market opportunities that will accelerate its growth within its three key strategic areas.

"We are very excited by the revenue generating opportunities ahead as SmartPay is expecting to conclude several major new contracts in the next few months."

"We are finalising funding lines to ensure that Smartpay has the funding resources it requires to implement the clear and manageable strategy which will see the Company becoming cash flow positive within the next few months at an operating level and profitable before June 2009."

"We are also looking to grow via organic growth and synergistic acquisitions to efficiently build greater market share. We want to build on SmartPay's significant assets in the form of Intellectual Property, customer bases and ongoing revenues.

"We will continue to review our involvement and performance in each market segment with a view to maximising shareholder value, and we will evaluate further acquisitions and/or divestment opportunities as they arise."

"The telecommunications market has been identified as one area of potential significant growth as we have the platforms and technology to allow us to readily expand in this market segment. We are actively looking for strategic acquisitions that will rapidly increase our reach and customer base" he said.

SmartPay is New Zealand's leading integrated merchant services provider and electronic product provider with a range of merchant services utilising the internet and broadband as a delivery mechanism.

SmartPay's product set includes:

1. Telecommunications products and services including Voice Over IP, Broadband, EFTPOS connectivity via secure broadband, prepayment products and Wi-Fi

2. Advertising/media/music services via its Retail Radio brand

3. The largest provider of payment and network services to the Taxi industry in NZ

For more information please see our website - www.smartpay.co.nz

ENDS

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