Ann: GENERAL: SPY: SPY ANNOUNCES MANAGEMENT CHANG

• Release Date: 20/02/12 18:25
• Summary: GENERAL: SPY: SPY ANNOUNCES MANAGEMENT CHANGES, RECAPITALISATION PLAN
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SPY
20/02/2012 16:25
GENERAL

REL: 1625 HRS Smartpay Holdings Limited

GENERAL: SPY: SPY ANNOUNCES MANAGEMENT CHANGES, RECAPITALISATION PLAN

AUCKLAND, 20th February 2012 - SmartPay (NZX: SPY), a leading provider of
payments and transactional solutions in New Zealand and Australia, today
announced it has restructured its management team, has a major
recapitalisation process underway and has implemented a new strategy and
business plan.

Management Restructure

Consistent with his previously stated intention to retire from his executive
role within the Company, the board announces Ian Bailey will retire his role
as Managing Director, effective March 30 2012. Mr. Bailey will remain
available to support the CEO and the management team with regards to sales
and technical development.

Recently appointed Group CEO, Bradley Gerdis, is expected to be appointed
Managing Director on or around the listing of the Company on the ASX which
continues to be a near term focus for the Company.

As a founding executive of Customers Limited, an ASX listed ATM and payments
company, Gerdis was instrumental in the growth of that company from a start
up to become Australia's largest ATM operator. The Customers Ltd business was
focused on contracted transactional based revenue streams, a strategy Gerdis
aims to implement at SPY.

During his time at Customers Ltd, Gerdis also played a lead role in the
development of Strategic Payments Services Pty Ltd ("SPS"), Australia's
leading independent payments processing company and a joint venture between
Customers Ltd, Bendigo Bank and MasterCard International.  SPY is currently
completing the certification of its PAX EFTPOS terminal on the SPS switch
which is expected to be completed by mid March, which will provide SPY with
immediate access into the Australian banking system in addition to its
current certifications with Westpac in Australia.

As a significant shareholder and Group CEO of Smartpay, Gerdis will be
focusing on growth opportunities and strategic direction of the Group with a
view to significantly increasing shareholder value.

It is expected that Gerdis will make a small number of senior executive
appointments to support the evolving strategy for the business.

Recapitalisation Plan and Strategy Update

A review of the current business model by Gerdis has resulted in a new
strategy to de-risk the business by moving away from the previous model of
discounting the rental book cash flows to external financiers towards a model
of maintaining the contracted rental cash flows within the business.

Gerdis says "the current model, whilst key to funding the rapid growth of the
Company in the recent past, the company results are characterised by lumpy
and unpredictable revenue, earnings and cash flow.  Going forward our aim is
to retain the annuity style cash flow from the rental contracts within the
business which will smooth revenue, earnings and cash flow and in so doing
de-risk the business while setting the foundation for our future growth
plans."

"To achieve this we have begun a major recapitalisation plan aimed at moving
away from the Company's previous high cost securitisation funding model
towards a conventional bank funding model with the aim to materially reduce
the cost of funding and put in place the necessary facilities to achieve our
growth objectives.  While we are in the early stages of this process with no
firm commitments as yet, the level of early engagement we have received from
potential banks both within New Zealand and Australia is encouraging" Gerdis
said.

Gerdis added "In terms of the broader strategy, the opportunity into
Australia is real, sizable and immediate.  This is expected to include strong
organic growth which will in all likelihood be accelerated through strategic
acquisitions aimed at fast tracking our capability, resources and scale into
this market which has the potential to significantly exceed our current New
Zealand business.

"The focus in New Zealand is to continue to build on our leading market
position with a particular focus on extracting incremental value from our
extensive existing merchant base.  The business has an enviable reputation
for technology innovation, a function of our existing IP base and our
internal technology development capability.  This is a core differentiator
and will form the basis for the delivery of additional revenue generating
products to our existing and growing merchant base".

Says SmartPay Chairman Wayne Johnson "Bradley has the complete support of the
Board in developing and implementing the new direction for the Group.  He has
a clear understanding of what needs to be done and has demonstrated a track
record of delivering a very similar strategy in a very similar industry and
importantly in our core growth market. The Board is confident that once the
recapitalisation process is complete and appropriate funding structures are
in place, Bradley will have what he needs to take the Company through its
next growth phase."

Johnson notes, "As advised previously, we remain committed to appointing
additional directors over time to further strengthen the company's board,
especially in Australia."

ENDS

For further information contact:

Wayne Johnson, Chairman SmartPay Mobile +61 411 544 449
Bradley Gerdis, Group CEO, SmartPay, +61 410 623 338
Julien Leys, JML Communications, +64 21 655 598

About SmartPay Limited
SmartPay is a leading provider of integrated merchant services utilising the
Internet and broadband connectivity.

SmartPay's product set includes:
1. Telecommunications products and services including Voice Over IP,
Broadband, EFTPOS terminals and secure EFTPOS internet connectivity
2. Audio and video, music, messaging and media via its Retail Radio product
set.
3. Prepayment products and transactional processing services for the taxi
industry.

SmartPay Core Products include:

o     Wi-Fi - one of the largest networks in New Zealand
o     In-store Audio Visual Promotional Systems - Retail Radio
o     Internet enabled EFTPOS equipment sales and rental
o     Gift Cards
o     Secure Internet Payments
o     Mobile Top-up
o     Calling Cards
o     Bill Payment Solutions
o     Voice over IP (VOIP)
o    Online Payments

For more information visit - www.smartpayltd.com
End CA:00219754 For:SPY    Type:GENERAL    Time:2012-02-20 16:25:51