Trading Update and Special Dividend Declaration

Fonix plc, the mobile payments and messaging provider, is pleased to provide an update on trading for the 6 months ended 31 December 2024 (the "Period").

Financial highlights:

• Gross profit and adjusted EBITDA1 in H1 FY25 have grown in line with management's expectations.
• Gross profit in the Period grew by 6.5% to £9.8m (H1 FY24: £9.2m).
• Adjusted EBITDA1 in the Period grew by 6.8% to £7.8m (H1 FY24: £7.3m).
• Fonix intends to pay an increased interim dividend in March 2025, in line with the Company's progressive dividend policy to pay out at least 75% of adjusted earnings per share.

Special dividend

● In addition to the interim dividend, Fonix Plc is pleased to announce the declaration of a special dividend, reflecting the Company's continued robust financial performance and strong cash generation. The Board has approved a payment of 3.0p per share, which will be paid on 12 February 2025 to those shareholders who are on the register at the close of business on 31 January 2025 (record date), with a corresponding ex-dividend date of 30 January 2025. This special dividend underscores our continued confidence in our business model and our ability to generate sustainable returns for stakeholders while maintaining a disciplined approach to capital allocation.

Operating highlights:

• Contracts in place with all major mobile network operators in Portugal, marking a significant milestone in expanding our international reach. Additionally, the Company has entered into a strategic commercial partnership with NOS, one of Portugal's leading telecommunications providers. This collaboration strengthens the business' position in the market and will enable it to deliver its Campaign Manager product to NOS' numerous existing broadcast customers.
• The Company has recently launched interactive services with News UK, a prominent multinational media organisation, across its talkSPORT and Virgin Radio brands in the UK.
• The business continues to grow its product portfolio with the recent launch of two innovative solutions, unlocking new revenue opportunities from existing customers:

○ PayFlex: A cutting-edge tool that streamlines the recovery of failed mobile payments by integrating Apple Pay, Google Pay, and PayPal.

○ DonationPortal: A tailor-made solution for charities, featuring custom-branded donation pages, effortless Gift Aid processing, and real-time analytics to boost donor engagement and simplify the giving process.

• The business continues to accelerate its investment in organic international expansion, and is in early discussions with a number of mobile network operators and prospective broadcaster customers across several new European markets, which the management team believe has the potential to provide significant growth opportunities in the years ahead.
• Michael Foulkes has recently been appointed CFOO (Chief Financial & Operating Officer) of Fonix. This has been a natural evolution of his role within the Company, and is required now due to the acceleration of our international expansion goals at the same time as the broadening of our product portfolio. Michael will have Board responsibility for product development and delivery.
• Total payment volume ("TPV") of mobile payments in the Period was £150m (H1 FY24: £158m) due to fewer charity customer campaigns, a reduction in some very low margin voice telephony services and the discontinuation of some gambling customers who have exited the UK market.
• 100% platform uptime throughout the Period.
• Fonix's key business segments of payments and messaging have both grown in the Period and the business retains a growing pipeline of client prospects going into H2 FY25.2

Outlook:

With high levels of existing recurring income, recent new customer wins, and advanced partnership opportunities in Portugal, the Board anticipates a stronger H2 weighting than usual and remains confident in meeting management expectations for FY25. Additionally, with the business's expanding product suite and clear growth opportunities in several other European markets, the Board remains very confident in Fonix's long-term growth potential.

Rob Weisz, CEO, commented:

"We are delighted to have once again delivered strong progress on our growth strategy. In Portugal, we have now secured contracts with all mobile network operators and a strategic partnership with a leading telecommunications provider, unlocking immediate opportunities to deliver Campaign Manager and our other interactive services to their significant base of TV and radio customers.

At the same time, we continue to make good progress on exploring new opportunities in other European markets and advancing innovations on our product roadmap, which we expect to drive revenue growth from FY26 onwards. These achievements position us well for long-term success."

Notes:

All financials based on unaudited figures.

1 Adjusted EBITDA excludes share-based payment charges along with depreciation, amortisation, interest, research and development tax credits and tax from the measure of profit.

2 All financial numbers contained within this announcement are unaudited.

596/2014) which is part of UK law by virtue of the European Union (Withdrawal) Act 2018.