Overview:

• Continuing strong transaction volume growth
• Turnover up 35% to £2.88m (June 2004: £2.14m)
• Adjusted pre-tax profits* up 70% to £1.14m (June 2004: £670,000)
• Cash balances risen to £4.14m (June 2004: £2.35m)
• Diluted adjusted earnings per share 2.42p

* before goodwill amortisation and National Insurance provision on share option gain.

Chairman's statement
The DataCash business continued to perform well in the first half of 2005. Although we significantly increased our investment in sales and marketing and in our technology infrastructure, pre-tax profits (before goodwill amortisation and NI on share option gain) rose by 70% to £1.14m (June 2004: £670,000) on revenues up by 35% to £2.88m (June 2004: £2.14m).

Cash balances again grew strongly, increasing by £930,000 in the first half, and at the end of June 2005 were £4.14m (June 2004: £2.35m). This represents the equivalent of approximately 9p a share and is expected to increase further in the second half, reflecting both levels of activity and low working capital requirements.

All our first half revenue was derived from our Card Holder Not Present (CNP) activities. Growth in CNP transactions processed continued in the first half of 2005, with volumes up more than 50% to 28.8m compared with 18.7m in the first half of 2004.

Our investment in developing sales via partner channels continues to show good growth, with transactions from partners now more than twice the level of a year ago. We believe that the partner model has considerable potential and we have invested significantly in this area.

We continued to invest in the Card Holder Present (CHP) market and we are optimistic that this still provides an important opportunity for the Group. Our partners are reporting renewed interest and prospect potential which should, we believe, enhance our future growth.

The integration with CLICK2PAY, an E-Wallet, which we announced recently, has given us the ability to support a more diverse range of international transactions and we intend to continue to support and develop additional innovative services to remain a leader in our field. Further integration and partnering initiatives will strengthen and expand our offering enabling us to address new markets and opportunities previously not available to us.

We have further invested in our operational infrastructure, including the deployment of our "second site" based in Edinburgh, which provides significantly increased processing capacity and underpins systems resilience.

No interim dividend is proposed (2004: Nil), although the Board expects to recommend a full year dividend for the year to 31 December 2005.

Your Board looks forward to the future with confidence and believes that the second half of the year will see further progress.

David Bailey
Chairman
2nd August 2005