PRESS RELEASE

Acquisition of Fixed and WiFi Internet Business of Broadreach Networks Ltd

Spectrum Interactive Plc (“Spectrum”) (LSE:SIN), a leading operator of internet and payphone terminals in the UK and Germany, today announces that it has acquired almost all of the assets of the fixed and wireless public internet access business of Broadreach Networks Limited (“BRN”). Terms of the transaction are not being disclosed, but Spectrum expect to see turnover in their Internet business rise by at least £500,000 pa as a result of the deal.

Spectrum is acquiring approximately 400 fixed and wireless internet units from BRN to complement Spectrum’s existing public internet terminal business and broaden Spectrum’s existing focus on airport and hotel sites to retail establishments.

The acquisition of BRN means Spectrum will operate in excess of 1600 internet terminals and 300 WiFi hotspots in the UK.  Spectrum acquired UK Explorer Ltd in February 2005.

BRN, which was founded in 2000, provides fixed and wireless internet access services at sites across the UK to customers such as Virgin Megastores, Queens Moat House Hotels, Premier Travel Inns, Choice Hotels, Moto and Sainsbury. 

Mark Lewarne, Chief Executive of Spectrum, commented:

“Following our successful acquisition and integration of UK Explorer in February 2005, this acquisition further strengthens our public internet access offering, bringing additional customers into our core sectors of travel and hospitality. Importantly, this deal also moves Spectrum into new sectors such as retail where BRN have a good presence.

We continue to see excellent growth prospects in the public internet access area and I am therefore delighted we have been able to conclude this transaction, which will be earnings enhancing. This is our second transaction in the internet access space this year and we are confident that further acquisition opportunities will develop in the UK and overseas during the next 12 months”.

Enquires

Spectrum Interactive plc                                      
Mark Lewarne, Chief Executive Officer                 spectruminteractive.co.uk
Philip Congdon, Chief Financial Officer
Daniel Gray, Head of Marketing & Communications

Citigate Dewe Rogerson                                        
Sarah Gestetner / George Cazenove                  

Seymour Pierce                                                       
Mark Percy / Jeremy Porter           

Notes to editors:

Spectrum Interactive plc, which listed on AIM in April 2005, operates over 10,000 payphones and internet terminals across the UK and Germany.

·         Spectrum is leveraging its payphone units as a strategic asset to generate new revenue streams, including advertising, hosting microcell units for mobile operators and cash machines for ATM operators.

·         Spectrum has developed a significant and growing base of public internet access terminals, and in February 2005, acquired UK Explorer, which increased its base of UK internet terminals to 1,000 units. Following the acquisition of BRN’s assets and ongoing organic growth, the base will rise to in excess of 1,600 units, which will bring Spectrum’s Internet business to approximately 20% of the total turnover.

·         The Company deploys new payphones in high revenue generating locations and redeploys sites from low revenue to high revenue locations.

·         In the UK, Spectrum has rolled out 750 new street payphones following an acquisition made in 2004, and in Germany, the Company is actively growing its estate in a less competitive market.

·         Spectrum announced its maiden final results for the year ended 30 June 2005 on 27th Sept. Financial highlights from release include:

·         Underlying group turnover rose to £17.0m from £15.9m

·         Underlying gross profit margins maintained at 47%

·         Profit after tax £2.46m

·         Basic earnings per share of 9.81p per share

·         Successful flotation on AIM: raised £5.5m used to restructure company; net debt reduced to £5.1m

·         Strong balance sheet: £2.0m cash at year end

·         Dividend of 1.09p per share

A copy of the release is available from the website spectruminteractive.co.uk