Escher Group Holdings Regulatory News (ESCH)

6 August 2012

Escher Group Holdings plc ("Escher" or the "Group")

Half year trading update

Escher Group Holdings plc ("Escher" or the "Group"), a world-leading provider of outsourced, point-of-service software to the postal industry, provides an update on trading performance for the half year to 30 June 2012.

Escher has made good progress in the first half of the year, securing a number of customer wins, including the Group's largest ever win with the United States Postal Service (USPS). Revenue for the Group for the six months ended 30 June 2012 is expected to be approximately US$8.7 million (2011:US$6.5m), ahead of budget. During the period, the Group continued its programme of investment, including hiring 25 new employees and opening a new office in Washington D.C. in order to support the needs of our current and developing customer base. Consequently costs to 30 June 2012 are also ahead of budget. The Group's provision of services to its customers is progressing well and is ahead of budget, accounting for a large proportion of the increased revenues and costs.

The level of interest in the Group's products remains high and the Board remains confident of closing additional new business in the second half. Thus, the Board expects profit for the full year to be in line with market expectations.

The Group cash position at 30 June 2012 was US$4.0 million.

Commenting on the trading update, CEO Liam Church said:

"Sales of systems to new customers continues to lead our revenue mix, and the associated recurring income will become an increasingly material component of our revenues. We delivered a strong first half performance and we remain confident about the outlook for the rest of the year."

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Notes to Editors

Escher is a world leading developer and provider of outsourced, point of service software for use in the postal industry worldwide. Its core software, RiposteEssential, enables post offices to expand upon their traditional offering, providing additional new services, reducing costs and increasing efficiency. Riposte is a messaging middleware that enables applications operating on different computers to communicate with each other. The Riposte software manages data, monitors the system status and communicates across the network. Escher operates across two divisions - its Retail Software Division and its Message Based Communications Division.

The Retail Software Solution (RiposteEssential) serves the postal and courier markets. Transactions include mail and financial services and the system is integrated with utilities and financial services companies, banks and central and local governments.

Escher's Message Based Communications Division (RiposteTrEx) is based on a digital post office box model and is designed to provide a national digital infrastructure linking governments, businesses and citizens via a secure platform.