For Immediate Release

Billing Services Group Limited

("BSG" or the "Company")

Audited results for the year ended December 31, 2017

POSITIVE CASH FLOW FROM OPERATIONS AND RETURN OF $5.0 MILLION TO SHAREHOLDERS

(March 26, 2018) San Antonio, Texas, USA and Aldermaston, United Kingdom - 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, 2017.

Financial Highlights

(All amounts in US$)

	Year Ended December 31
	2017		2016

Revenues	$ 21.1	million	$ 30.2	million
EBITDA ⁽¹⁾	$ 0.9	million	$ 5.7	million
Net (loss) income	$ (6.7)	million	$ 10.9	million
Net (loss) income per
basic and diluted share	$ (0.02)	per share	$ 0.04	per share

⁽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).

· Completed a $5.0 million cash tender offer under which the Company purchased 117,647,059 shares at a price per share of $0.0425, reducing outstanding shares from 282,415,748 to 164,768,689

· Repaid $2.1 million to the Federal Trade Commission pursuant to the 2016 settlement ($1.0 million outstanding balance owed as of the date of this announcement)

· Generated $0.9 million of EBITDA (2016: $5.7 million)

· Provided $1.1 million of cash from operating activities (2016: used $0.5 million)

· Improved gross margin by 3.6 percentage points (56.6% in 2017 vs. 53.0% in 2016)

· Recognized $15.3 million of non-cash impairment charges against goodwill (no impairment in 2016)

· Ended the year with $11.5 million of cash (2016: $15.1 million)

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

· Completed the delivery of the new Wi-Fi Location Data Service (WLDS) product to AT&T, Boingo and Telus

· Signed a new contract with XLN (a UK-based business telecom provider) to provide Wi-Fi hub services

· Extended our hotspot finder and connection product suite with delivery to VAST Networks (a Wi-Fi network infrastructure provider based in South Africa)

· Enhanced the hub service product suite to include Alerting and delivered to AT&T

· Deployed TPV services to 14 states on behalf of 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. The decision to initiate and complete a $5.0 million cash tender offer (completion of which was announced on December 15, 2017) was one of the initial conclusions of the review. In addition, the Company is in discussions to sell its Wi-Fi data solutions business. Following a successful sale of the Wi-Fi data solutions business, if any, the Board will consider further cash distributions and other actions with respect to its remaining business lines.

· During the second half of 2017, the Company recognized $15.3 million of impairment charges relating to its wireline billing and clearing business and its third-party verification business. The impairment charges were necessitated due to declining operating income in the affected business lines, attributable in large part to the discontinuation of third-party billing by AT&T and Verizon.

· The Company's direct billing initiative has developed solid traction, and we expect this to continue over the course of 2018. However, as evidenced by our 2017 financial performance, this initiative did not offset the effects of AT&T's discontinuation of third-party billing during 2017, and it will not offset the effects of Verizon's discontinuation during 2018.

· The Company expects that revenues and earnings in 2018 will compare unfavorably with 2017 due largely to Verizon's discontinuation of third-party billing in December 2017, as described in the Company's announcement dated May 24, 2017.

· The Company will not be providing any additional financial performance guidance at this time.

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

"The 2017 results demonstrate the Company's agility under difficult circumstance and our commitment to maximize shareholder value. Most significantly, the Company succeeded in returning $5.0 million of cash to shareholders through the tender offer, and delivering $1.1 million of cash flow from operating activities."

INQUIRIES:

Billing Services Group Limited +1 210 949 7000

Norman M. Phipps

finnCap Limited +44 (0) 20 7220 0500

Stuart Andrews/ Scott Mathieson

About BSG:

BSG has locations in San Antonio, Texas, USA and Aldermaston, United Kingdom. The Company is traded on the London Stock Exchange (AIM: BILL). For more information on BSG, visit ( www.bsgclearing.com ).

Chief Executive's Statement

2017 unfolded within a particularly challenging environment. Revenues and earnings declined, and we wrote down $15.3 million of goodwill. On the positive side, the Company generated $0.9 million of EBITDA, provided $1.1 million of cash from operating activities and returned $5.0 million to shareholders by way of a tender offer, the completion of which was announced on December 15, 2017. The Company's performance in 2017 demonstrated once again its agility in adapting to changing circumstances.

Our largest challenge in 2017 arose from AT&T's decision to discontinue third-party billing in December 2016. AT&T was our largest third-party biller. Their withdrawal from the market had a significant effect on our 2017 revenues, which declined by 30% (from $30.2 million to $21.1 million). In May 2017, Verizon informed us of its similar withdrawal from third-party billing, which took effect at the end of 2017. We will feel the financial effects of Verizon's action in our 2018 results.

The cumulative fallout from the actions by AT&T and Verizon was largely responsible for $15.3 million of non-cash goodwill impairment charges recorded during 2017. A substantial portion of the underlying goodwill had been originally recorded in 2003, when the predecessor to BSG purchased the wireline billing and clearing business. The non-cash goodwill impairment charges in 2017 were largely responsible for the $6.7 million ($0.02 per share) net loss incurred during the year. In the absence of any goodwill impairment charges, the Company would have earned $6.3 million of pre-tax income.

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 most visible action taken to date pursuant to the strategic review was a $5.0 million cash tender offer initiated and completed in December 2017. The amount of the tender offer reflected due consideration of foreseeable cash requirements in our operating business units and the maintenance of reserves for unforeseeable events. At the end of 2017, after completion of the tender offer, the Company held $11.5 million of cash.

Less visible, but equally significant, was the decision to engage in discussions to sell BSG Wireless, our Wi-Fi data solutions business. In the event of a successful sale of the Wi-Fi data solutions business, the Board will consider further cash distributions to shareholders and other actions with respect to its remaining business lines.

We will not be providing financial performance guidance at this time.

Business lines

BSG's core business, a billing and clearing service for wireline phone transactions, is far smaller than it was a decade ago as a result 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 of transaction volume over time has extensively affected the profitability of the business.

We have taken several actions aimed to ensure the viability of the business. Most importantly, we introduced a direct billing option at the end of 2016 under which BSG submits invoices and collect funds directly from consumers, rather than bill through local exchange carriers (LECs). The direct billing service relies on the Company's third-party billing platform to perform all critical data management functions.

The direct billing service gained traction in 2017 for our customers who previously relied on AT&T for third-party billing. Many of our customers now affected by Verizon's action have also converted to our direct billing service. The effect of such conversions is not readily discernible in our income statement, however, because revenue from a direct billing transaction is much lower than for a third-party billing transaction.

Our TPV business, branded as VoiceLog, in which we independently confirm transactions mostly for utility services, cable companies, health care and long distance providers, is enjoying a higher level of transaction volume due to several new customers added during the second half of 2017.

Capital management

Capital structure and capital allocation continue to be of paramount importance to our management and Board of Directors, whose current members directly represent parties owning 56% of the Company's outstanding shares. The most significant capital allocation action taken in 2017, as discussed above, was the Company's repurchase of $5.0 million of shares by way of a tender offer. The corresponding reduction in cash did not alter the conservative character of the Company's balance sheet and capitalization. At December 31, 2017, the Company had $11.5 million of cash, $5.9 million of working capital, minimal long-term debt and $10.1 million of tangible net worth.

Special thanks to retired directors

Patrick D. Heneghan, Leighton W. Smith and Greg M. Carter all retired from the Board at the end of 2017. Pat and Leighton served as directors from the formation of BSG in 2005. Greg served as our CEO from 2008 to 2012. All three typically looked at issues from different perspectives reflecting their varied backgrounds, and all three could be counted on for insightful and constructive counsel. We thank them for their service.

Employees

Employees have stepped up to every challenge during the transformation and recalibration of our business. Their enthusiasm and willingness to stretch have never wavered. I am proud of each one of them.

Sincerely,

Norman M. Phipps

Chief Executive Officer

FINANCIAL REVIEW

Financial Review of the Year Ended December 31, 2017

The Company's audited results for the year ended December 31, 2017 are compared against the year ended December 31, 2016 in the accompanying consolidated financial statements. BSG's consolidated financial statements are prepared in conformity with United States GAAP.

Certain Terms

Revenues. Revenues are derived primarily from fees charged to wireline and wireless service providers for data clearing, financial settlement, information management, payment and financial risk management, third-party verification and customer service functions. During 2016, the Company introduced a direct billing service under which end-user consumers are invoiced directly by the Company, rather than through LECs as third-party billers. Revenue recognized under third-party billing includes the Company's service fees plus amounts necessary to compensate the LECs for their third-party billing services. Revenue for direct billing does not include any components other than the Company's service fees.

Cost of Services and Gross Profit . Cost of services arises primarily in the Company's wireline billing and clearing business. Cost of services includes billing and collection fees charged by LECs and other service providers for payment processing. Such fees are assessed for each record submitted and for each bill rendered to end-user consumers. BSG charges its customers a negotiated fee for billing and collection services. Accordingly, gross profit is generally dependent upon transaction volume, processing fees charged per transaction and any differential between the fees charged to customers by BSG and the related fees charged to BSG by LECs and other service providers.

Operating Expenses. Operating expenses include all selling, marketing, customer service, facilities and administrative costs (including payroll and related expenses) incurred in support of operations, substantially all of which are settled through the payment of cash.

Depreciation and Amortization. Depreciation expense applies to software, furniture and fixtures, telecommunications and computer equipment. Amortization expense relates to definite-lived intangible assets that are amortized in accordance with Accounting Standards Codification (ASC) 350, Intangibles - Goodwill and Other. These assets consist of contracts with customers and LECs. Assets are depreciated or amortized, as applicable, over their respective useful lives.

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA). Earnings before interest, income taxes, depreciation and amortization, a non-GAAP metric, is a measurement of profitability often used by investors and lenders. The computation of EBITDA also excludes other non-cash and nonrecurring items as additions or deductions to earnings.

Third-Party Payables . Third-party payables include amounts owed to customers in the ordinary course of clearinghouse activities and additional amounts maintained as reserves for retrospective charges from LECs and other parties. In its clearinghouse business, the Company aggregates call records received from its customers. It then submits the call records either to (i) LECs for billing to end-user consumers; or (ii) end-user consumers. The Company collects funds from LECs and directly-billed end-user consumers each day.

Under normal circumstances, funds collected from LECs are distributed to the Company's customers approximately ten days after receipt, under weekly settlement protocols. The Company withholds a portion of the funds received from LECs to pay (i) the Company's processing fees, (ii) billing and collection fees of LECs, (iii) sales and other taxes paid by the Company and (iv) an amount deemed necessary to serve as a reserve against retrospective charges from LECs.

Funds collected from directly-billed end-user consumers are credited to the Company's customers when received. The Company withholds a portion of the funds received from end-user consumers to pay (i) the Company's processing fees, (ii) sales and other taxes paid by the Company and (iii) an amount deemed necessary to serve as a reserve against retrospective charges from payment processors or other parties.

When LECs, payment processors and other parties make payments to the Company, they withhold funds to cover a variety of expenses and potential retrospective charges. As noted above, the Company similarly withholds funds from its customers to cover expenses and retrospective charges. The third-party payables balance is computed as the excess of (i) funds owed to the Company's customers, inclusive of reserves for retrospective charges, over the sum of (ii) amounts owed from the Company's customers and (iii) reserves withheld for retrospective charges by LECs, payment processors and other parties.

Comparison of Results for the Year Ended December 31, 2017 to the Year Ended December 31, 2016

Total Revenues. Total revenues of $21.1 million in 2017 were $9.1 million, or 30%, lower than the $30.2 million of revenues recorded during 2016. The $9.1 million decrease reflects lower transaction volumes across all clearing, settlement and customer service activities provided for wireline service providers, partially offset by higher managed service fees from BSG Wireless' offerings.

Cost of Services and Gross Profit. C ost of services in 2017 was $9.1 million, compared to $14.2 million in 2016. The $5.1 million, or 36%, decrease in cost of services largely reflects lower fees for billing and collection services related to the lower level of transaction volumes. The Company generated $11.9 million of gross profit in 2017, compared to $16.0 million in 2016. The gross margin of 56.6% in 2017 is 3.6 percentage points higher than the 53.0% margin achieved in 2016. The improved gross margin in 2017 resulted from a larger percentage of revenue from the wireless business, which operates at a higher gross margin level than the wireline business.

Operating Expenses. Operating expenses were $11.0 million in 2017, compared to $10.3 million in 2016. The $0.7 million, or 7%, increase largely reflects a $0.8 million increase in fees for legal and professional services.

Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"). The Company generated $0.9 million of EBITDA during 2017, compared to $5.7 million during 2016. A reconciliation of net income and EBITDA in each period follows:

			Year Ended December 31
$ millions			2017		2016
	Net (loss) income		$	(6.7)	$	10.9
	Depreciation expense			1.3		1.4
	Amortization of intangibles			0.6		0.6
	Impairment charges			15.3		-
	Income tax (benefit) expense			(2.4)		2.4
	Other income, net			(7.5)		(9.6)
	All other, net			0.3		-
		EBITDA		$ 0.9		$ 5.7

Depreciation and Amortization Expense. Depreciation and amortization expenses totaled $1.9 million in 2017, compared to $2.0 million in 2016. The $0.1 million decline reflects cessation of depreciation charges on components of capitalized software development costs for which accumulated depreciation reached the assets' respective gross carrying values.

Impairment Charges . The Company recorded $15.3 million of non-cash impairment charges against goodwill during 2017. Goodwill, which resulted from acquisitions made by the Company over ten years ago, was deemed impaired as a result of reduced transaction volumes and operating income. The non-cash impairment charges were not included as deductions to earnings for purposes of calculating EBITDA.

Other Income, Net. The Company realized $7.5 million of other income, net during 2017, compared to $9.6 million in 2016. Other income, net in 2017 was largely attributable to adjustments to indemnification reserves and customer accounts in connection with their indemnification obligations to the Company under class action litigation. Other income, net in 2016 was largely attributable to accounting treatment adjustments to indemnification amounts under class action litigation and a net gain arising from the translation of assets and liabilities denominated in British Sterling.

Other income arises from miscellaneous items typically of a nonrecurring nature. Accordingly, other income items were not included as earnings for purposes of calculating EBITDA.

Change in Cash . BSG's cash balance at December 31, 2017 was $11.5 million, compared to $15.1 million at December 31, 2016. The $3.6 million decrease in cash during 2017 is largely attributable to a $5.0 million tender offer implemented in December 2017 under which the Company repurchased 117,647,059 million shares of stock and to $0.9 million in capital expenditures, partially offset by $1.1 million of cash provided by operating activities, $0.8 million released from restricted cash and $0.1 million of exchange rate differences.

Change in Restricted Cash . In the ordinary course of business, LECs withhold funds from their payments to the Company in order to create a reserve securing potential future obligations of the Company to the LEC. Through December 31, 2015, pursuant to a 2012 agreement with one LEC, the LEC released a net of $9.3 million of cash reserves. The cash was transferred into a restricted Company bank account to be used for funding the Company's indemnification obligation under pending class action litigation against the LEC. During 2016 and 2017, net amounts of $7.7 million and $0.8 million, respectively, were transferred from the restricted cash account to satisfy indemnification obligations, reducing restricted cash to $0.8 million at December 31, 2017.

Change in Third-Party Payables. Third-party payables at December 31, 2017, inclusive of long-term liabilities, were $6.7 million, compared to $10.3 million at December 31, 2016. The $3.6 million decrease in third-party payables during 2017 resulted largely from $3.3 million of net adjustments to customer accounts in connection with their indemnification obligations to the Company and from $0.3 million of ordinary course settlement activities.

Change in Accrued Liabilities . Accrued liabilities at December 31, 2017 were $2.9 million, compared to $6.3 million at December 31, 2016. The $3.4 million decrease in accrued liabilities resulted from $2.1 million of settlement payments to the Federal Trade Commission, $0.6 million of net payments and adjustments to indemnification liabilities to LECs under pending class action litigation and $0.7 million of net reductions arising from ordinary course payments and adjustments.

Capital Expenditures. During 2017, the Company invested $0.9 million in capital expenditures, primarily for capitalized software development costs and computer equipment. In 2016, capital expenditures totaled $1.3 million.

Cash Flows for the Year Ended December 31, 2017

Cash flow provided by operating activities . Net cash provided by operating activities was $1.1 million during 2017. Net cash provided was principally attributable to a $15.3 million of non-cash impairment charges to goodwill, $1.9 million of depreciation and amortization and a $0.7 million decrease in trade accounts receivable, offset by a $6.7 million net loss, a $3.6 million reduction in third-party payables, a $3.4 million reduction in accrued liabilities, a $2.3 million reduction in deferred taxes and a $0.8 million decrease in accounts payable.

Cash flow used in investing activities . Net cash used in investing activities was $0.6 million, reflecting $0.9 million of capital expenditures offset by $0.3 million of net receipts on purchased receivables.

Cash flow used in financing activities . Cash used in financing activities was $4.1 million, principally attributable to stock purchases totaling $5.0 million under a tender offer, offset by a $0.8 million reduction in restricted cash.

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A copy of this statement is available on the Company's website (www.bsgclearing.com), and copies are available from BSG's Nominated Advisor at the address below:

Billing Services Group Limited

c/o finnCap Limited

60 New Broad Street

London EC2M 1JJ

United Kingdom

Forward Looking Statements

This report contains certain "forward?looking" statements and information relating to the plans, objectives, expectations and intentions of the Company that are based on the beliefs of the Company's management as well as assumptions made by and information currently available to the Company's management. When used in this report, the words "anticipate," "believe," "estimate," "expect," "intend," "projects," "could," "should," "will" and words or phrases of similar meaning are intended to identify forward?looking statements. Forward-looking statements reflect the Company's current views with respect to future events and financial performance. Such statements, including certain information set forth herein under "Financial Review" that is not historical fact or statement of current condition, reflect management's assessment of the current risks, uncertainties and assumptions related to certain factors including, without limitation, the competitive environment, general economic conditions, customer relations, relationships with local exchange carriers and other vendors, availability of credit, borrowing terms, interest rates, foreign exchange rates, litigation, governmental regulation and supervision, capital expenditures, product development, product acceptance, technological change and disruption, changes in industry practices, one-time events and other factors described herein. Based upon changing conditions or circumstances arising from any one or more of these risks or uncertainties, or should any underlying assumptions prove incorrect, actual results may vary materially from historical or anticipated results as described herein.

Readers are cautioned not to place undue reliance on forward-looking statements. The Company does not intend to update or revise these forward?looking statements, whether as a result of new information, future events or otherwise.

Full report available here:

http://www.rns-pdf.londonstockexchange.com/rns/1269J_-2018-3-27.pdf