Billing Services : Results for the Year Ended December 31, 2018

For Immediate Release

Billing Services Group Limited

("BSG" or the "Company")

Audited results for the year ended December 31, 2018

EXPENSE CONTROL LEADS TO STABLE EBITDA

(March 29, 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 audited results for the year ended December 31, 2018.

Financial Highlights
(All amounts in US$)
		Year Ended December 31
		2018		2017____
Revenues	$	16.1 million	$	21.1 million
Gross margin		60.4%		56.6%
Cash operating expenses	$	9.0 million	$	11.0 million
EBITDA (1)	$	0.8 million	$	0.9 million
Net loss	$	(7.8) million	$	(6.7) million
Net loss per basic share	$	(0.05) per share	$	( 0.02) per share
Cash balance at end
of period	$	$9.2 million	$	11.5 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 $5.0 million decline in revenue ($16.1 million vs. $21.1 million in 2017) due largely to discontinuation of third-party billing by Verizon, a large local exchange carrier (LEC)

∙Improved gross margin by 3.8 percentage points (60.4% vs. 56.6% in 2017)

∙Reduced operating expenses by $2.0 million ($9.0 million vs. $11.0 million in 2017)

∙Generated $0.8 million of EBITDA (2017: $0.9 million)

∙Recognized $10.0 million of non-cash impairment charges against goodwill (2017: $15.3 million)

∙Distributed $1.2 million in cash dividends

∙Ended year with $9.2 million of cash (2017: $11.5 million)

∙Ended year with $6.6 million of working capital (2017: $5.9 million)

BSG Wireless and Third Party Verification ("TPV") Operational Highlights

∙Renewed our hub and WLDS contract with AT&T with new terms that increase monthly revenue potential

∙Renegotiated our hub and mobile applications contracts with Comcast to increase the revenue opportunity

∙Signed a new hub contract with Spectrum (Charter)

∙Reduced expenses at BSG Wireless by $1.7 million on an annualized basis

∙Reduced costs and improved stability by replacing the legacy UK data center with new cloud infrastructure

∙Renewed our contract with a national cable company, including additional TPV volume in new markets

∙Launched new TPV markets with Constellation Energy

∙Increased both TPV volumes and revenues with Direct Energy

Current Trading and Strategy

∙In 2016, 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 four 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 2018

∙Following a sale of any portion of the group's businesses, the Board will consider further cash distributions and other actions with respect to any remaining assets or business lines.

∙Trading for the year ended December 31, 2018 was in line with the Board's expectations and consistent with the recent trading conditions experienced by the Company.

∙During the second half of 2018, the Company recognized $10.0 million of non-cash impairment charges relating to goodwill recorded in its wireline billing and clearing business and its third-party verification business. Goodwill impairment charges during 2018 eliminated all goodwill recorded on the Company's balance sheet.

∙The Company will not provide guidance on projected future financial performance at this time.

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

"The 2018 results demonstrate both the Company's disciplined response to challenging circumstances and the resiliency of its business model. The $0.8 million of EBITDA generated during the year enabled the Company to pay $1.2 million of cash dividends and maintain a strong balance sheet."

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).

CHIEF EXECUTIVE'S STATEMENT

Our 2018 financial performance reflects the resilience of our business model. The Company generated $0.8 million of EBITDA, in line with 2017 EBITDA of $0.9 million, on revenues which declined by $5.0 million. We distributed $1.2 million in cash dividends and ended the year with $9.2 million in cash and $6.6 million of working capital.

Financial performance

Proactive measures allowed the Company to maintain positive EBITDA despite a 24% decline in revenues.

The sizable decrease in revenues was expected. As announced in May 2017, Verizon withdrew from third-party billing services effective January 1, 2018. Verizon's action paralleled AT&T's withdrawal effective in December 2016.

To lessen the earnings effect from Verizon's discontinuation of third-party billing, we reduced operating expenses by $2.0 million. Much of this was accomplished through the realignment of BSG Wireless, our Wi-Fi data solutions business. Specifically, we moved a portion of sales, data management, accounting and financial functions from the UK to the US. The realignment resulted in a substantial reduction in compensation and other expenses. The Company's gross margin concurrently improved by 3.8 percentage points, largely as a result of a mix of revenues favoring higher margin services.

BSG's $9.4 million pre-tax loss in 2018 largely reflects $10.0 million of non-cash impairment charges to goodwill. The impairment charges related to our wireline billing and clearing business and our third-party verification business. During 2017, the Company had partially written down the goodwill value carried in both businesses. The additional impairment charges during 2018 eliminated all goodwill value carried in both businesses.

Business lines

BSG's core business, a billing and clearing service for wireline phone transactions, is far smaller than it was a decade ago because of an unfavorable secular trend in wireline phone usage and the more recent withdrawals of AT&T and Verizon from third-party billing. Scale has been the historically essential ingredient to financial success in the business, because major components of operating costs are largely fixed. The erosion over time of transaction volume has extensively affected the profitability of the business.

We have taken several actions aimed to ensure the viability of the business. In 2016, for example, we introduced a direct billing service under which BSG submits invoices and collects funds directly from consumers, rather than bill through LECs. The direct billing service is a good fit, because it operates efficiently using the Company's third-party billing platform to perform all critical data management functions.

In our TPV business, branded as VoiceLog, we independently confirm transactions mostly for utility services, cable/telecommunication companies and healthcare providers in the US. The business is growing as we add high-volume customers.

Our wireless business (BSG Wireless) provides Wi-Fi data clearing services to wireless network operators in the US and Europe. As discussed above, we made substantial expense reductions within the operation during 2018.

Strategic Review

In 2016, the Company initiated a strategic review to assist the Board in determining the future composition of the group, including capital structure and business lines. The following are the most visible actions taken to date in connection with the strategic review:

∙2017 Engaged in discussions with possible acquirers of BSG Wireless

∙2017 Completed a $5.0 million tender offer

∙2018 Distributed $1.2 million in a cash dividend

∙2018 Renewed discussions with possible buyers for all or parts of the business

Going Forward

Our pursuit of strategic objectives is not diminishing our focus on the fundamentals of the business lines. We are endeavouring to maximize cash flow through better pricing, new sources of revenue, expense control and opportunities to leverage the billing platform. The Board will remain focused on the future composition of the group and the optimization of capital allocation.

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

Our Board and Employees

We have a small Board-twonon-executive directors (who serve as Co-Chairmen) and me. The three of us own (or represent parties who own) approximately 55% of shares outstanding. For that reason, shareholder interests are of paramount importance to all three of us. The Co-Chairmen are highly engaged in strategic decisions. Their insights and guidance have added value for shareholders and management.

It would be impossible for me to overstate the dedication and innovation of our employees. They thoroughly understand the subtleties of all our business services. They collaborate and implement changes with extraordinary teamwork and precision. They have been able to make operations run smoothly, even under the strain of lower headcount and the ever-increasing complexity of our businesses. To them, I extend my heartfelt thanks.

Sincerely,

Norman M. Phipps

Chief Executive Officer