29th Sep 2006 07:04
Cashbox PLC29 September 2006 Press Release 29 September 2006 Cashbox plc ("Cashbox" or "the Company") Preliminary Statement of Annual Results Cashbox (AIM:CBOX), the independent ATM deployer and operator, announces itsmaiden set of results for the year ended 30 June 2006. Highlights • Successful listing on AIM in March 2006, raising £4.5 million before expenses• Turnover increased 25% to £3.16 million (2005 - 10 months: £2.53 million), an annual equivalent increase of 4.1%• Turnover from transaction income increased 93.6% to £2.84 million (2005 - 10 months: £1.47 million), an annual equivalent increase of 61.3%• ATM estate now at over 1,200 machines, up from 845 at 31 December 2005• 96% of Cashbox's ATMs are trading above their breakeven point and 98% are available for use• Significant agreements signed with Wadworth, Chevron/Texaco, among others Commenting on the results, Carl Thomas, Chief Executive of Cashbox, said: "Weare pleased with the progress that Cashbox has achieved over the last twelvemonths. The Company's successful listing on AIM in March has obviously providedus with a good platform for the future, however, it is the quality of ourbusiness model, strong market demand for our product and pragmatic commitment ofour employees in delivering the very highest levels of service to our expandingcustomer base that has driven this business forward so successfully." "We hope that Shareholders will share the Board's satisfaction with our earlyachievements, and our confidence that with the potential offered by our marketsand the quality inherent in our people, we view the next twelve months withconsiderable optimism." - Ends - For further information:Cashbox plcCarl Thomas, Chief Executive Tel: +44 (0) 870 126 [email protected] www.cashboxplc.co.uk Seymour Pierce Limited Jeremy Porter, Corporate Finance Tel: +44 (0) 20 7107 8000 www.seymourpierce.com Media enquiries:AbchurchNeil Camp / Gareth Mead Tel: +44 (0) 20 7398 [email protected] www.abchurch-group.com CHAIRMAN'S STATEMENT It is my pleasure to introduce to you Cashbox's first results, for the yearended 30 June 2006 since the AIM float. The Company's performance was in line with our expectations - turnover was£3.16m (2005; ten months: £2.53m) and we made a loss of £2.39m, excludingexceptional items, £3.56m including exceptional items (2005; ten months:£1.89m). Operating costs increased from £2.46m for the 10 month period to 30June 2005 to £3.06m, an annualised increase of only 3.6% and gross marginincreased from 25.9% (2005) to 28.9%. ATM transaction income was up from £1.47m(2005) to £2.84m, an increase of 93.6% compared to the 10 month period and 61.3%on an annualised basis. 'The Opera of Life does not come with a programme' is an expression that Ilearned some time ago and is particularly apt when I look back at the expected,and sometimes unexpected, leaps of progress that your Company has made over thepast 12 months. To proclaim that 2006 has been an 'important year' for Cashbox would not be theusual hybristic overstatement that you would expect to read here. Cashboxreally has accomplished difficult tasks and galloped past country milestoneswith ease. • The flotation successfully raised £4.5m in equity, before expenses, and a lease finance facility of £6.1m giving us a strong financial foundation to support the growth of the Company, as well as " currency" that we could use to acquire ATM estates that are complementary to Cashbox's. • You will by now, I'm sure, have noticed the advancements that your Company has made in terms of customer and site wins. The sheer number of potential sites that we now have under contract is truly remarkable and importantly, that much of this progress has been made post the IPO is also worthy of a mention. Our portfolio of clients now includes well recognised names like: Thresher, Greene King, Chevron/Texaco, NISA Todays, Wadworths and P&H (convenience store supplier). In winning these prestigious clients Cashbox has competed successfully against all the usual IAD competitors and prevailed. • Delighted as I am about new sites, I am also in equal measure, keen to see that the machines that Cashbox deploys in the field are ready for use at all times, are achieving the necessary number of transactions and are therefore profitable. Cashbox is purpose-built to avoid the pitfalls that have caught other IADs and so during the summer, we announced to the market that 96% of our machines were trading above their breakeven point. This still remains the case and as I write 98% of the ATMs in the Cashbox estate are open for business. Both of these key performance indicators (KPIs), and more besides, are reviewed daily by Carl and his team. These KPIs indicate to the Board that the merchant fill business model is a workable and lasting solution and that Cashbox's sales, installation and customer service teams are doing their work diligently. Cashbox will continue to regularly report these two KPIs to the market so that you too can track our performance. Which brings me onto the Cashbox team. The management of your business is, bythe highest of standards, the best in its class. Carl's experience in the IADmarket is known to many while the Board that he has assembled around him aresupportive and experienced. However, any company's success depends criticallyon the quality, loyalty and dedication of its employee team and your Company isno different. The Cashbox team's experience, hard work and commitment tosuccess continues to ensure that our customers receive unparalleled service andsupport, thereby creating a lasting impression that we are a professional andsteadfast enterprise that sees itself 'in partnership' with its customers.Since the Company's IPO we have augmented our already adept team with some highcalibre individuals that we believe will create both value for investors and aneffective service for our customers. Outlook Looking forward for the next 12 months, it is apparent to all here at Cashboxthat for our business at least, the market is in a rapid growth mode.Retailers, publicans and forecourt owners are becoming extremely aware that anATM will markedly increase their turnover and that, 'customers with more money,spend more money' is a truthful dictum. During the course of the next 12 months we expect Cashbox to announce new ATMestate wins. Our sales teams have been extremely successful in their work andCashbox now has some prominent companies that are eager to rollout ATMs intotheir estates - watch this space. Furthermore, it is becoming very clear that the global market is alsoconsolidating and producing good returns for shareholders, as evidenced by theUS IAD Cardtronics' acquisition of Bank Machine for £50 million and Cardpoint'sacquisition of Moneybox for £87million. It is worth mentioning to you thatduring the last few months the owners of AIM-listed Scott Tod decided to selltheir business to the highest bidder. Cashbox participated in this process butfor a number of reasons your Board took the decision not to pursue thepossibility further. Your Board felt it prudent to stay its hand for future,possibly more strategic, acquisitions. We are now of the firm belief that therewill be more strategic opportunities like this for us in the forthcoming 12months. Lastly, I do not want to leave you with the impression that we are comfortablewith Cashbox being a loss making business, as making losses over anything otherthan the short-mid term in this business is unacceptable. Therefore I want toassure you that the management team and I are making every effort to bringCashbox into profit as quickly as we can. Please be aware that this is anotherone of those KPIs that we watch closely. All that's left for me now is to thank you our Shareholders, my fellow Boardmembers and all the Cashbox employees for your time and your support in 2005/6. The future, as they say, is a different country but one in which Cashboxdefinitely has a visa. Anthony Sharp Chairman 29 September 2006 CHIEF EXECUTIVE'S REVIEW I am extremely happy to report that in the last 3 months, a huge percentage ofour ATMs are trading above their breakeven point and are available for use.Certainly in my experience in the IAD industry, this percentage of profitableATMs in any estate is unprecedented. Building on our placement model Hopefully by now you will have noticed a clear illustration of the main benefitsof Cashbox's placement model and the potential market opportunity available as aresult. Our existing and fast evolving customer base already providesavailability for further significant ATM installations. This adds up to nearly27,000 sites, defined as the total number of sites owned or operated by Cashboxcustomers, including those with an associated membership network. As a matterof policy, Cashbox is willing to provide an unlimited number of machines in anyestate as long as it is economically viable. As a LINK member, we continue to monitor changes in the industry with a hawk'seye. We, like all other LINK members, are closely involved with formulatingpolicy and the regulations as they develop. Therefore, Cashbox welcomed the newLINK regulations on signage as we were already compliant. It is worth bearing in mind that Cashbox was the first IAD estate in the UK tobe Triple DES compliant. We completed the EMV (chip and PIN) upgrade within animpressive 14 days. Hand in hand and working with our manufacturers, I am also pleased to reportthat we will be fully compliant with the new RoHS (Restriction on HazardousSubstances) European directives that came into force on July 1st 2006. We increasingly live in a cash-rich, time poor, culture. It is therefore nosurprise to me to report to you that we have encountered little resistance toour raising the surcharge across the estate from £1.50 to £1.75. We expect tohave 100% of our estate migrated to this new charge by the year end. My experience in the industry has taught me that many an IAD has fallen folly ofthe mistake of assuming that an ATM in any site can generate revenue. This isnot the case. Cashbox surveys ALL of its sites prior to installation of ALL ofits machines. I will not allow a machine to be installed that is NOTprofitable. The survey process that I have put in place, along with the teamthat carry out this important process, ensures this. Whilst looking at our progress in building the business, there are four broadareas we are constantly reviewing:• increasing our installed base of ATMs • driving transactions at each individual site • refining our KPI monitoring systems • ensuring that the organisation is ready and capable of integrating any acquired estates Sales organisation In addition to our high profile, Blue Chip customers, we also have a rapidgrowing customer base that consists of independent and SME sites. Since theIPO, I have put in place an experienced sales team that are targeting thislucrative sector. More specifically the teams are split into three groups toaddress the market: • independent small customers with anything from 1- 10 sites • commercial medium sized organisations with 10 - 200 sites • corporate large organisations with in excess of 200 sites Each of the groups is targeting three primary sectors: convenience stores,garage forecourts, and pubs and leisure. Essential to any new sales push is the need for an experienced marketing team.This is now in place and will, going forward, be rolling out a consistent andintelligent message to both existing and potential customers. Optimising transaction levels An estate that is used more generates more profit. It is one of my key goals toensure that all machines in our estate are fulfilling their full potential everymonth. The advanced systems we now have in place continuously monitortransaction levels in real time and the ability to identify sites that are notfulfilling their full potential is paramount. Our systems can not only spotabnormal trends in individual machines but we are also now able to gather marketintelligence of the different sectors they operate in and periodically carry outa trend analysis exercise. Our marketing strategy will also include communicating with the end user toensure we drive up usage of our machines. In the next twelve months, Cashboxwill be developing a combination of incentives and advertising suitable for eachof our sites. Our market leading ATM offering continues to evolve with many new and excitingfeatures being made available to our customers. We expect to roll out theWindows CE version over the coming year which will in turn expand our ability todevelop the ATM screens for advertising and issuing of coupons by the individualsites. This is an additional revenue stream and a service that I believe willdrive transactions higher. Maximising uptime The systems I have put in place ensure that I am aware of any machines that arenot transacting in any one day. I then ensure action is taken immediately. The advanced, bespoke diagnostic capability we have in place is an invaluabletool to ensure that our in-house, 24/7 Helpdesk team can efficiently maximise uptime. As I write, this is currently running at 98%. Another interesting KPIworth mentioning is that over 90% of support requests to the team are dealt withon the phone. This swift resolution is a valuable benefit to our customers andallows our engineers to focus more of their time installing the fast growingpipeline. Versatile infrastructure The majority of our estate is equipped with the Tidel 3400. During the last 12months, Cashbox acquired a competitor's estate and therefore by design for thefirst time, we now have Triton machines in our ATM portfolio. Cashbox is now inthe enviable position where its LINK node can process nearly all majormanufacturers of ATMs. Therefore we can quickly integrate previouslycompetitor-owned estates into our portfolio with ease. I am very excited at theprospect of winning similar estates going forward. Conclusion Last but by no means least I would like to acknowledge and thank my entire teamat Cashbox who are undoubtedly committed to our success. 2006/2007 is going to be not only an important year for Cashbox but one for theindustry as a whole as it goes through changes and consolidations that willbenefit shareholders and industry players alike. I look forward to meeting you at the AGM. Carl Thomas Chief Executive 29 September 2006 CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 30 JUNE 2006 Note 2006 2005 10 months £'000 £'000 (unaudited) Turnover 3,159 2,525 Cost of sales (2,245) (1,870) Gross profit 914 655 Administrative expenses (3,060) (2,462) Exceptional items: Share based remuneration (options) charge (570) - Listing costs (605) - Total exceptional costs (1,175) - Total administrative expenses (4,235) (2,462) Operating loss (3,321) (1,807) Interest receivable and similar income 13 6Interest payable and similar charges (254) (86) Loss on ordinary activities before and after taxation (3,562) (1,887) Loss per ordinary share (pence) 2 Basic (8.3) (10.5) Diluted (8.3) (10.5) Loss on ordinary activities excluding exceptional costsand before and after taxation (2,387) (1,887) All amounts relate to continuing activities All recognised gains and losses are included in the profit and loss account CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2006 Note 2006 2006 2005 2005 £'000 £'000 £'000 £'000 (unaudited) (unaudited)Fixed assets Tangible assets 674 128 Current assets Stocks 22 211 Debtors 1,492 198 Cash at bank and in hand 536 51 2,050 460 Creditors: amounts falling due within one year (2,225) (3,633) Net current liabilities (175) (3,173) Total assets less current liabilities 499 (3,045) Creditors: amounts falling due after more than one year (679) - Net liabilities (180) (3,045) Capital and reserves Called up share capital 614 380 Share premium account 3,880 - Merger reserve 2,180 474 Warrants reserve 37 - Profit and loss account (6,891) (3,899) Shareholders' deficit 3 (180) (3,045) CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2006 2006 2005 10 months £'000 £'000 (unaudited) Net cash outflow from operating activities (4,327) (1,447) Returns on investments and servicing of finance Interest received 13 6 Interest paid (254) (86) Net cash outflow from returns on investmentand servicing of finance (241) (80) Capital expenditure and financial investment Purchase of tangible fixed assets (44) (81) Net cash outflow from capital expenditureand financial investment (44) (81) Cash outflow before use of liquid resources andfinancing (4,612) (1,608) Financing Issue of ordinary shares for cash (net of issue costs) 5,339 854 Loans (457) 374 Sale and leaseback of tangible fixed assets 215 - Net cash inflow from financing 5,097 1,228 Increase / (decrease) in cash 485 (380) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006 1. Accounting policies Accounting convention The financial statements have been prepared under the historical cost conventionand in accordance with applicable United Kingdom Accounting Standards on a goingconcern basis. In preparing the financial statements for the current year, the Group hasadopted the following Financial Reporting Standards: - the presentation requirements of FRS 25: Financial Instruments: Disclosure andPresentation This Standard requires financial instruments to be presented in accordance withtheir substance. Therefore shares, which previously were always presented aspart of shareholders' funds regardless of the substance of the instrument, maynow be presented as a liability when in substance that share is equivalent to aliability. There have been no adjustments to the financial statements of thecompany on adoption of this standard. - FRS 21: Events after the balance sheet date The adoption of FRS 21 has resulted in a change in accounting policy in respectof proposed equity dividends. If the company declares dividends to the holdersof equity instruments after the balance sheet date, the company does notrecognise those dividends as a liability at the balance sheet date. Previously,where these equity dividends were proposed after the balance sheet date butbefore authorisation of the financial statements they were recorded asliabilities at the balance sheet date. As no dividend is proposed nor has beenpaid, no adjustment has been required to the financial statements for this yearnor for the period ended 30 June 2005. - FRS 22: Earnings per share FRS 22 prescribes the basis for calculating and presenting earnings per share inthe financial statements of entities whose shares are, or will be, publiclytraded and other entities that choose to disclose earnings per share. There hasbeen no adjustment to the financial statements of the Group on adoption of thisstandard. - FRS 28: Corresponding amounts FRS 28 requires corresponding amounts to be shown for items in the primaryfinancial statements and notes to the financial statements. Where correspondingamounts are not directly comparable with the amount to be shown in respect ofthe current financial year, they shall be adjusted and the basis for adjustmentdisclosed in a note to the financial statements. The FRS permits a reporting entity not to show corresponding amounts for certainitems in the notes to the financial statements that were previously exemptedunder company law. It also does not require corresponding amounts for theearliest period presented where financials statements for two or moreconsecutive periods are presented together. There has been no adjustment to thefinancial statements of the Group on adoption of this standard. The principal accounting policies of the group, which are considered to be mostappropriate to the group's circumstances, are set out below. Basis of Consolidation The consolidated financial statements of Cashbox have been presented undermerger accounting rules, as the combining entities within the group werecontrolled by the same parties both before and after the acquisition. Thismeans that the financial statements of Cashbox and those of its wholly-ownedsubsidiary, Cashbox ATM Systems Limited, have been aggregated and presented asif the two companies have always existed as a Group. Accordingly, the resultsfor both companies are reflected in the Group financial statements for the yearto 30 June 2006 and the comparative amounts for the ten month period to 30 June2005 are presented on the same basis. Investments Investments held as fixed assets are stated at cost less any provision forimpairment in value. In relation to acquisitions, where advantage can be takenof the merger relief rules, shares issued as consideration for acquisitions areaccounted for at nominal value. Turnover Turnover represents the value of goods sold and services provided derived duringthe year, stated exclusive of Value Added Tax. Income from the sale of Automated Teller Machines (ATMs) is recognised when eachATM is installed in its location and transaction income is recognised in theperiod in which the transaction took place. Depreciation Depreciation is provided on all tangible fixed assets to write off the cost,less estimated residual values, evenly over their expected useful lives. Therates used for this purpose are:• Automated Teller Machines - Straight line over five years • Furniture and Fittings - Straight line over three years • Office Equipment - Straight line over three years. Stock Stocks are valued at the lower of cost and net realisable value. Cost is basedon the cost of purchase on a first in, first out basis. Net realisable value isbased on the estimated selling price less additional costs to completion anddisposal. Foreign currency Transactions in foreign currencies are translated at the exchange rate ruling atthe date of transaction. Monetary assets and liabilities in foreign currenciesare translated at the rates of exchange ruling at the balance sheet date. Anydifferences are taken to the profit and loss account. Deferred taxation Deferred tax balances are recognised in respect of all timing differences thathave originated but not reversed by the balance sheet date except that therecognition of deferred tax assets is limited to the extent that the Groupanticipates making sufficient taxable profits in the future to absorb thereversal of the underlying timing differences. Deferred tax balances are not discounted. Pensions The Group operates defined contribution schemes. All contributions are chargedto the profit and loss account in the year they are payable. Share-based employee remuneration When shares and share options are awarded to employees, a charge is made to theprofit and loss account based on the difference between the market value of thecompany's shares as at the date of grant and the option exercise price, inaccordance with UITF Abstract 17 (Revised 2004) "Employee Share Schemes". TheGroup is not voluntarily applying early adoption of FRS 20. Leased assets Assets that are financed by leasing agreements that give rights approximating toownership (finance leases) are treated as if they had been purchased outright.The amount capitalised is the present value of the minimum lease paymentspayable over the term of the lease. The corresponding leasing commitments areshown as amounts payable to the lessor. Depreciation on the relevant assets ischarged to the profit and loss account over the shorter of estimated usefuleconomic life and the period of the lease. Lease payments are analysed between capital and interest components so that theinterest element of the payment is charged to the profit and loss account overthe period of the lease and is calculated so that it represents a constantproportion of the balance of capital repayments outstanding. The capital partreduces the amount payable to the lessor. All other leases are treated as operating leases. Their annual rentals arecharged to the profit and loss account on a straight-line basis over the term ofthe lease. Sale and leaseback Sale and leaseback arrangements, by means of a finance lease, are accounted forin the same manner as a standard finance lease agreement. It is not appropriateto regard an excess of sale proceeds over the carrying amount as income. Suchexcess is deferred and amortised over the lease term. Financial instruments In relation to the disclosures made in note 25: • short term debtors and creditors are not treated for disclosure purposes as financial assets or financial liabilities except for the currency disclosures; and • the Group does not hold or issue derivative financial instruments for trading purposes. 2. Loss per Share Basic and diluted loss per share has been calculated on the basis of lossesafter taxation of £3,562,000 (2005: £1,887,000) and 42,692,407 1p ordinaryshares (2005: 17,911,800 equivalent 1p ordinary shares) being the weightedaverage number of shares in issue during the year to 30 June 2006. 3. Reconciliation of movements in shareholders' funds Group 2006 2005 10 months £'000 £'000 (unaudited) Loss for the period (3,562) (1,887)Share options granted 570 - Profit and loss account (2,992) (1,887)Issue of shares 234 380Premium on shares issued 3,880 -Capital (merger) reserve 1,706 474Warrants reserve 37 -Shareholders' deficit at beginning of the period (3,045) (2,012) Shareholders' (deficit)/funds at 30 June 2006 (180) (3,045) 4. Financial Information The financial information set out in the announcement does not constitute thecompany's statutory accounts for the year ended 30 June 2006 or the period ended30 June 2005. The financial information for the period ended 30 June 2005 isderived from the statutory accounts for that period which have been delivered tothe Registrar of Companies. The auditors report in those accounts wasunqualified and did not contain a statement under s237 (2) or (3) Companies Act1985. The statutory accounts for the year ended 30 June 2006 will be finalisedon the basis of the financial information presented by the directors in thispreliminary announcement and will be delivered to the Registrar of Companiesfollowing the company's annual general meeting. 5. Dividend The Directors are not able to declare a dividend 6. Going Concern These accounts have been prepared on a going concern basis. As outlined in thecompany's admission document, and as is often the case with rapidly growingbusinesses, the business model and the forecasts based thereon contain someuncertainties. These uncertainties relate to contracts, including one significant contract,which currently are not signed, but the installations and transactions likely tobe generated from them are included in the company's forecasts. In the event ofsignificant delays in the cashflows to be derived from these contracts, ascompared with the forecasts, the directors would either seek additional fundingor implement a pre determined programme of cost saving. The directors of Cashbox are confident that these contracts (and othercontracts) will be signed in the short term and that the resulting installationsand transactions will be in line with those forecast. The directors areconfident, based on current projections and the Group's cash position at thedate of the approval of the Company's financial statements, that the Group willbe able to continue to trade for the foreseeable future. As a result of theabove, the directors consider it appropriate to prepare the financial statementson a going concern basis. Accordingly the financial statements do not reflectany adjustments that would be required in the event that the Group were unableto achieve its forecast cashflows. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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