Earthport Regulatory News (EPO)

25 February 2016

Earthport plc

("Earthport", the "Company" or the "Group")

Notification of Potential Loss at Baydonhill

Earthport plc (AIM: EPO.L) announces that its wholly owned foreign exchange subsidiary, Baydonhill, has experienced a potentially material financial loss relating to one of its corporate customers. As a result of this incident, the Company is exposed to a maximum potential loss of £5 million.

The customer in question failed to honour pre-confirmed bank payment instructions, on the basis of which Baydonhill made payments on the client's behalf in accordance with an established procedure which has been in place for over a year. Investigations were immediately initiated which indicated that the customer may have intentionally engaged in fraudulent activity. Additional enquiries found that the customer had filed notice to appoint an administrator. All relevant regulatory and law enforcement authorities have been informed and the Company plans to explore all avenues to recover this loss, but there are no assurances of any recovery.

It is important to note that no client funds were affected in this transaction, nor are any other client funds at risk of future loss in connection to this incident or the payment processes currently in place at Baydonhill. The incident is limited to this particular customer relationship at Baydonhill and does not impact the rest of Baydonhill's activities, which continue as normal.

Furthermore, there is no impact on Earthport's core business where no such exposure exists due to its cleared funds model, whereby no payments are processed until cleared funds are received from the client. While the potential financial impact of this incident is material, Earthport possesses sufficient capital (£24 million of cash as of 31 December 2015, per Earthport's Interim Trading Update) to continue pursuing its growth strategy while maintaining a substantial capital buffer.

Further announcements will be made as and where appropriate.

For further information, please contact:

Earthport plc 020 7220 9700

Hank Uberoi, Chief Executive Officer

Simon Adamiyatt, Chief Financial Officer

Panmure Gordon (Nomad and Joint Broker) 020 7886 2500

Fred Walsh / Duncan Monteith

N+1 Singer (Joint Broker) 020 7496 3000

Shaun Dobson / James White

Shore Capital (Joint Broker) 020 7408 4090

Bidhi Bhoma / Toby Gibbs

Newgate Communications 020 7653 9848

Bob Huxford / Helena Bogle

About Earthport:

Earthport plc is a financial services organisation providing cross-border payments services to banks, e-commerce providers, money transfer companies and payment administrators. Earthport is headquartered in London with regional offices in New York, Miami, Dubai and Singapore.

One of the FinTech50 2015 - judged to be the game-changers transforming the future of finance - Earthport is also the winner of the Grant Thornton Quoted Company Awards 2015 Technology company of the year award and FStech/Retail Systems' B2B Payments Innovation of the Year (2014).

Earthport provides the industry with access to a global payment network through a single contract, a single technical integration, and a single service relationship. Worldwide, more than 50 banks are connected into Earthport's network for the efficient clearing of low value payments. Through a single relationship, clients benefit from sophisticated validation, message transformation and compliance services, efficiently serving their customers with more innovative payment products.

Earthport is listed on the Alternative Investment Market (AIM) on the London Stock Exchange.

Earthport plc is authorised and regulated by the Financial Conduct Authority under the Payment Service Regulations 2009 for the provision of payment services.

Find out more at www.earthport.com 

and on Twitter @Earthport, LinkedIn, Youtube, Slideshare and Google+.