Press Release

First Quarter Trading Update and AGM Statement

NETELLER Plc (LSE: NLR), a leading online money transfer service provider, is pleased to provide the following update on trading for the first quarter of operations ending 31 March 2006 and also an update on current trading in advance of its third Annual General Meeting which is being held later today in the Isle of Man.

Highlights

First Quarter to 31 March 2006

• Average daily sign ups for the quarter: 3,609; total customers at quarter end: 2,645,502 
• Average daily receipts from customers: $ 4.69m, up from $ 2.87m in Q1 2005 
• Revenues $ 57.9m, up 69 % over Q1 2005; gross margin for quarter of 73.5 % 
• Continued investment in IT and product teams resulted in higher G&A expense 
• Income before tax $ 27.7m; net income after tax: $ 26.5m; basic EPS $ 0.22

Current trading and recent events update

• Current trading in line with seasonal variations and analysts’ expectations for 2006 
• Launch of localised websites in five major European and Asian countries (France, Germany, Italy, Spain, China) 
• Transition of existing member application technology to a more scalable JAVA platform completed

Ron Martin, President & CEO, commented “Our growth in the first quarter demonstrates the potential of the ‘deepen and extend’ strategy within our core business, through innovative product developments such as our European localisation program, our Asian e-wallet launch and credit card decline initiative. We are committed to improving NETELLER’s offering to its customers and merchants, through continued investment in quality people and technology. The Board is confident that NETELLER will continue to enjoy growth in line with historic seasonal variations and meet analysts’ expectations for the full year.”

• Average daily receipts from customers for the quarter were $ 4.69 million which was up 64 % on Q1 2005 and up 12 % on Q4 2005. Total receipts from customers during the first quarter of 2006 were $ 422.3 million.

• The Company surpassed two and half million customers in mid February 2006 and closed the first quarter with 2,645,502 customers. Daily sign ups averaged 3,609 customers for the quarter which was up 26 % from 2,862 in Q1 2005. Quarter-on-quarter sign up growth continues with an increase of 13 % from the 3,197 average daily sign ups recorded for Q4 2005.

• Revenue for the quarter was $ 57.9 million which is up 69 % from $ 34.2 million in Q1 2005, and an increase of 8% from $ 53.6 million in Q4 2005. The revenue composition for Q1 2006 has shown an increase as a % of revenue from the Direct Accept product and foreign exchange fees. Interest revenue also increased due to increased interest rates and funds under management to 6% of total revenue (5% in Q4 2005).

• Gross margin of 73.5 % has improved from 72.7 % recorded for the first quarter of 2005, and remains stable compared with the 73.5 % gross margin recorded for the whole of 2005, largely as a result of changing cost composition. Bad debts for the quarter at approximately 12 % were in line with the overall bad debt level for 2005, although this represented an increase on Q4 2005 levels. Direct salary costs fell from 8 % in Q4 2005 to 6 % in Q1 2006 primarily due to accounting allocations from direct to indirect costs of approximately $ 1.3 million. Other direct costs showed a slight increase in Q1 2006 from Q4 2005.

• Operating income improved 62 % to $ 33.8 million in the first quarter compared with $ 20.8 million in Q1 2005. The Company has experienced an increase in general and administrative costs to $ 8.8 million in the first quarter 2005, up from $ 6.1 million in Q4 2005. The Company has continued to invest heavily in new talent and IT during Q1 2006 as part of its "extend and deepen" strategy, and expects to see the full benefits of this during the latter part of the year. Of the $ 2.7 million in increased general and administrative costs, $ 1.3 million was a result of reclassifying costs from direct costs and a further $ 0.5 million was from the introduction of a profit sharing plan for a large number of the Company’s employees. NETELLER’s primary labour market in Calgary, Canada has recently experienced unexpectedly tight labour conditions resulting in increased costs, and this is expected to continue for the foreseeable future.

• Income before tax improved 53 % to $ 27.7 million in the first quarter compared with $ 18.2 million in Q1 2005. The Company incurred a loss on foreign exchange of $ 0.5 million in Q1 2006 which compared with a gain of $ 0.5 million in Q4 2005. The Company continues to manage this exposure through an active hedging strategy.

Net income

• Net income for the quarter rose to $ 26.5 million (up 62 % from $ 16.4 million in Q1 2005). Net income margin was 45.9 % for the quarter. The first quarter traditionally has the lowest net margin due to the annual management bonus.

Earnings per share

• The earnings per share for Q1 2006 was US $ 0.22 per share for the quarter based on the number of shares outstanding for the period of 120,353,025.

Other First Quarter Highlights

• The Company officially launched an updated version of its Japanese language service following successful beta-testing. This new version is already starting to drive increased sign-ups as merchants expand their offerings in this region. The Company expects to add additional payment options for Japan during the second half of 2006. 
• Additionally, having completed the formal testing of a new Asian e-wallet during the first quarter, the Company announced the official launch of this service, based on the Quick Access 1-Pay platform, in April 2006. 
• The Company continues to improve executive bench strength. During the first quarter, Rohit Joshi was promoted to Executive Vice President of Products, and the Company recently appointed Chris Carlson as Vice President of Technology. These appointments continue to drive NETELLER’s transition from a technology-driven to a product-focused organisation. 
• The acceleration of investment in the business and expansion into new markets are key elements of the Company’s "deepen and extend" strategy for 2006. The Company believes the full benefits of these initiatives will be achieved in the latter part of this year and beyond.

Current Trading & AGM Statement

Since the end of March, trading has continued to show positive growth trends in both sign ups and average daily receipts, in line with typical seasonal variations. The Company looks forward to a promising second quarter and is confident that it will meet analysts’ expectations for the full year ending 31 December 2006.

The Company launched localised websites in four European countries (France, Germany, Italy and Spain) towards the end of April 2006 which should generate additional revenue opportunities for the Group, particularly with the FIFA 2006 World Cup. Since the release to customers on 25^th April, early indications are already showing a significant growth in sign-up rates from new customers, particularly in Germany and France. Furthermore, the launch of the Asian e-wallet should provide merchants and customers with localised payment capability supported by NETELLER’s traditionally strong support offering.

As previously announced, the Board is due to confirm the appointment of Gord Herman as Executive Chairman of NETELLER Plc at the Company’s board meeting later this morning.

The next update on trading is expected to be in early September 2006 when NETELLER will announce its Interim Results for the half year to 30 June 2006.

First Quarter 2006 Unaudited Financial Information

About NEOVIA Financial Plc

Trusted by consumers and merchants in over 160 countries to move and manage billions of dollars each year, NEOVIA Financial Plc (formerly NETELLER Plc) operates the world's leading independent online payments business. Through its Payment Suite, featuring NETELLER®, NETBANX®, Net+™ and 1-PAY™ brands, NEOVIA specialises in providing innovative and instant payment services where money transfer is difficult or risky due to identity, trust, currency exchange, or distance. Being independent has allowed NEOVIA to support thousands of retailers and merchants in many geographies and across multiple industries.

Subsidiary company NETELLER (UK) Limited is authorised by the Financial Services Authority (FSA) to operate as a regulated e-money issuer. For more information about NEOVIA Financial visit www.neovia.com.

NEOVIA Financial Plc recently changed its corporate identify from NETELLER Plc to better reflect the strength and breadth of its individual product brands. At the same time its ticker symbol changed from NLR to NEO.

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