5th Sep 2006 07:03
Datacash Group PLC05 September 2006 EMBARGOED UNTIL 7.00am ON TUESDAY 5th SEPTEMBER 2006 DATACASH GROUP PLC ('DataCash' or 'the Company') INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2006 News Item The Board of DataCash Group plc, the payment service provider, is pleased toannounce its half yearly results for the six months to 30 June 2006. Thesefigures include one month's contribution from Proc-Cyber Services (UK) Ltd("PCS") which was acquired on 1 June 2006. Overview • Adjusted pre-tax profits*, (including one month of PCS) increased to £2.25m (June 2005: £1.14m) • Adjusted pre-tax profits* (excluding PCS) up 50% to £1.71m (June 2005: £1.14m) • Over £3 billion of value processed for DataCash's UK customers • Adjusted* earnings per share (including one month of PCS) increased to 3.86p (2005: 2.43p) • Cash balances rose to £11.4m (June 2005: £4.14m) equivalent to 12.6p per share • First significant Chip and PIN Contract agreed with Laura Ashley Group • Acquisition of PCS successfully completed and progressing well * before goodwill amortisation, National Insurance provision on share optiongain and FRS20 charge on share options in issue. Commenting on the results, Ashley Head, Chairman of DataCash said: "We are confident the full year figures will show the enlarged Group hasintegrated well and is making good progress towards its goal of being theleading bank independent global Payment Service Provider for e-commerce." For further information, please contact: DataCash Group plcAndrew Dark - Chief Operating OfficerKeith Butcher - Commercial Director 0870 72 74 76 0 MJ2 Business CommunicationsStewart Harris 020 7491 8003 / 07913 065 375 DATACASH GROUP PLCINTERIM REPORT AND ACCOUNTSFOR THE SIX MONTHS ENDED 30 JUNE 2006 Chairman's Statement I am pleased to report my first set of results as Chairman of the Company whichshow another strong performance by DataCash Group plc in the period to 30 June2006. These figures include one month's contribution from Proc-Cyber Services(UK) Ltd ("PCS") which was acquired on 1 June 2006. DataCash Group revenues increased to £4.97m (2005: £2.88m), with pre-taxprofits, before goodwill amortisation, national insurance provision on shareoption gain and FRS20 charge on share options in issue ("Adjusted pre-taxprofits") increasing to £2.25m (2005: £1.14m). Excluding the PCS contribution,adjusted pre-tax profits grew by 50% in the first half, to £1.71m (2005:£1.14m). PCS's contribution for the one month of consolidation was £1.18m torevenue and £535,000 to adjusted pre-tax profits. Adjusted earnings per share rose to 3.86p (2005: 2.43p). As at 30 June 2006, the group cash balances (including PCS security deposits of£3.94m) were £11.4m (June 2005: £4.1m), after acquisition costs of £1.8m, and wecontinue to be strongly cash generative. This represents the equivalent ofapproximately 12.6p per share. We believe the strength of the balance sheetleaves us well placed to take advantage of further opportunities for growth. The first half saw continued good transaction volume growth from our coreCardholder Not Present customers, with processed transaction volumes increasing46% to 42.1m (2005: 28.8m), reflecting the growing penetration of broadbandservices and the continued improvements in e-commerce offerings for onlineshoppers. We processed over £3bn of value for our UK customers in the first halfof 2006 and we expect further growth in the second half. We have reported in the past on our strategy of providing a comprehensivepayments product to our customers, and in particular, to offer a CardholderPresent (Chip & PIN) service. Although this has taken a significant amount oftime and investment to develop, I am pleased to announce we are now processingCardholder Present transactions for some clients and particularly pleased theLaura Ashley retail group has entered into an agreement with DataCash where wewill provide an outsourced payment processing service for their entireoperations. DataCash already provides payment processingfor Laura Ashley's online operations. This extended service will commenceshortly and we are negotiating a number of similar opportunities with other UKretailers. Towards the end of 2005 we began a major investment programme to gain formalaccreditation of compliance with Visa and MasterCard's Payment Card IndustryData Security Standards (PCI DSS). I am delighted to report we completed thismajor milestone in July. All retailers are required to be PCI DSS compliant andwe believe DataCash's outsourced service is attractive to customers looking tomitigate the costs and time to market of compliance, including those who havealready deployed Chip and PIN solutions. The Board is pleased with progress since the acquisition of PCS in June and theopportunities this presents. Contracts have been signed with the first existingDataCash customer for the PCS Risk Sentinel service and a number of othercustomers have expressed an interest in the additional services offered by PCS. The acquisition of PCS fundamentally changes the overall nature of our business.Not only does it bring some sizeable revenue and profit contributions but itsinternational customer profile and rich product and service offerings provideconsiderable new opportunities to the enlarged group. The combination of theDataCash and PCS payment infrastructure and risk management system is being usedto build a global payment service business we believe will provide unparalleledchoices of payment instruments, currencies and settlement to online customersaround the world. This project will take time and investment but we believe weare in a strong position to deliver this ambition and look forward to reportingon progress at the year end. PCS saw strong growth in both revenue and profit in the first half of the year,and we are confident the full year figures will show the enlarged Group hasintegrated well and is making good progress towards its goal of being theleading bank independent global Payment Service Provider for e-commerce. As part of the integration process, Paul Burton has been appointed as ChiefFinancial Officer for the Group (previously Managing Director SA) and AndrewDark has been appointed Chief Operating Officer for the Group (previouslyManaging Director UK). No interim dividend is being proposed (2005: Nil), although the Board expects torecommend a final dividend for the year to 31 December 2006. Ashley HeadChairman5 September 2006 Consolidated profit and loss accountFor the 6 months ended 30 June 2006 Unaudited Unaudited Unaudited Unaudited Acquisitions Total Restated 6 months 1 month 6 months 6 months Restated ended ended ended ended Year ended 30 June 30 June 30 June 30 June 31 Dec 2006 2006 2006 2005 2005 £'000 £'000 £'000 £'000 £'000 Turnover 3,792 1,182 4,974 2,882 6,116 Administrative expenses (2,181) (662) (2,843) (1,812) (3,754)Share option charge (21) - (21) (20) (26)National Insurance on shareoption charge (226) - (226) (44) (34) ----------------------------------------------------------------------Total administrative expenses (2,428) (662) (3,090) (1,876) (3,814) ----------------------------------------------------------------------Operating profit before goodwill and exceptional items 1,364 520 1,884 1,006 2,302 Goodwill amortisation (988) (591) (1,579) (988) (1,975)Severance payments - - - - (73)Aborted acquisition costs - - - - (402) ---------------------------------------------------------------------- Operating profit 376 (71) 305 18 (148) Interest receivable and similar income 118 72 167 --------------------------------------------Profit on ordinary activities before taxation 423 90 19 Taxation (126) (33) (687) --------------------------------------------Profit on ordinary activities after taxation 297 57 (668) -------------------------------------------- Basic earnings/(loss) per share 0.57p 0.13p (1.46)pDiluted earnings/(loss) per share 0.54p 0.12p (1.46)p All amounts relate to continuing activities. There are no differences between historical cost profits and losses and those shown above. Consolidated statement of total recognised gains and lossesFor the 6 months ended 30 June 2006 Unaudited Unaudited Restated Restated 6 months ended 6 months ended Year ended 30 June 2006 30 June 2005 31 Dec 2005 £'000 £'000 £'000 Profit/(loss) for the financial period 297 57 668 -----------------------------------------------------Currency translation differences on foreign currency net investments (287) - -Total recognised gains and losses relating to the period 10 57 668 -------------------------------------Prior year adjustment (see note 8) (26) ----------------Total gains and losses recognised since last annual report (16) ---------------- Consolidated balance sheetAs at 30 June 2006 Unaudited Unaudited As at Restated Restated 30 June 30 June 31 December 2006 2005 2006 £'000 £'000 £'000 Fixed assetsIntangible assets 78,115 9,324 8,337Tangible assets 908 168 161Investments 192 - - ----------------------------------------------- 79,215 9,492 8,498 ----------------------------------------------- Current assetsDebtors 3,724 889 966Debtors - deferred tax asset 31 1,141 522Cash at bank and in hand 11,393 4,138 4,895 ----------------------------------------------- 15,148 6,168 6,383 ----------------------------------------------- CreditorsAmounts falling due within one year (3,139) (1,311) (1,225) -----------------------------------------------Net current assets 12,009 4,857 5,158 ----------------------------------------------- Total assets less current liabilities 91,224 14,349 13,656 Provisions for liabilities and charges (427) (168) (148) -----------------------------------------------Net assets 90,797 14,181 13,508 ----------------------------------------------- Capital and reservesCalled up share capital 907 448 449Share premium account 10,148 9,766 9,811Foreign currency translation reserve (287) - -Share option reserve 1,060 20 26Other reserves 94,553 18,765 18,765Profit and loss account (15,543) (14,818) (15,543)Current year retained loss (41) - - -----------------------------------------------Equity shareholders' funds 90,797 14,181 13,508 ----------------------------------------------- Consolidated cash flow statementFor the 6 months ended 30 June 2006 Unaudited Unaudited 6 months 6 months ended ended Year ended 30 June 2006 30 June 2005 31 Dec 2005 £'000 £'000 £'000 Net cash inflow from operating activities 1,795 871 1,775 ------------------------------------------------ Returns on investments and servicing of financeInterest received 118 72 167 ------------------------------------------------ Net cash inflow from returns on investments and servicing of finance 118 72 167 ------------------------------------------------ Taxation (39) - (17) Capital expenditure and financial investmentPurchase of tangible fixed assets (95) (29) (73) ------------------------------------------------ Net cash outflow from capital expenditure and financial investments (95) (29) (73) ------------------------------------------------ Equity dividends paid (338) - (224) Acquisitions and disposalsInvestment in subsidiary undertakings (1,710) - -Cash acquired with subsidiaries 6,422 - - ------------------------------------------------Net cash inflow from acquisitions and disposals 4,712 - - ------------------------------------------------ ------------------------------------------------Net cash inflow before management of liquid resources and financing 6,153 914 1,628 ------------------------------------------------ Management of liquid resourcesIncrease in short term bank deposits (3,960) (2,653) (3,289) ------------------------------------------------Net cash outflow from management of liquid resources (3,960) (2,653) (3,289) ------------------------------------------------ FinancingExercise of share options 345 18 61 ------------------------------------------------Net cash inflow from financing 345 18 61 ------------------------------------------------ Increase/(decrease) in cash in the period 2,538 (1,721) (1,600) ------------------------------------------------ Reconciliation of net cash flow to movement in net fundsFor the 6 months ended 30 June 2006 6 months ended 6 months ended 30 June 30 June Year ended 2006 2005 31 Dec 2005 £'000 £'000 £'000 Increase/(decrease) in cash in the period 2,538 (1,721) (1,600) Cash inflow from management of liquid resources 3,960 2,653 3,289 ------------------------------------------------------- Movement in net funds 6,498 932 1,689 Opening net funds 4,895 3,206 3,206 -------------------------------------------------------Closing net funds 11,393 4,138 4,895 ------------------------------------------------------- Notes to the Financial StatementsFor the 6 months to 30 June 2006 1. Basis of Preparation The results for the six months ended 30 June 2006 and the comparative figures for the six months ended 30 June 2005 are unaudited. They have been prepared on accounting bases and policies that will be used in the preparation of the financial statements of the Group for the year ended 31 December 2006. The financial information contained in this report does not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. The results for the year ended 31 December 2005 are based on the audited accounts (which received an unqualified report) as amended for the prior year adjustment with regard to Financial Reporting Standard 20. Full accounts have been delivered to the Registrar of Companies and are available on request. 2. Earnings per Share The calculations of profit/(loss) per share are based on the following profitsand numbers of shares: The adjusted profit/(loss) per share is based on the profit/(loss) after taxbefore goodwill amortisation and exceptional items. 6 months 6 months Year ended ended 30 ended 30 31 Dec 2005 June 2006 June 2005 £'000 £'000 £'000Weighted average number of 1p ordinary shares in issue during the period For basic earnings per share 52,423,711 44,778,180 44,816,905Dilutive effect of options 2,549,977 1,126,273 979,005 ------------------------------------------For diluted earnings per share 54,973,688 45,904,453 45,795,910 Profit for the financial period £'000 £'000 £'000 Profit for adjusted earnings per share 2,102 1,089 1,782Adjustment for goodwill amortisation (1,579) (988) (1,975)Adjustment for exceptional costs (226) (44) (475) ------------------------------------------Profit/(loss) for earnings per share 297 57 (668) ------------------------------------------ Diluted adjusted earnings per share 3.82p 2.37p 3.91p 3. Reconciliation of operating profit/(loss) to operating cash flows 6 months 6 months ended ended Year ended 30 June 2006 30 June 2005 31 Dec 2005 £'000 £'000 £'000 Operating profit/(loss) 305 18 (148)Amortisation 1,579 988 1,975Depreciation 87 51 102Share option charge 21 20 26Equity dividends paid - - (224)Increase in debtors (2,267) (148) (224)Increase/(decrease) in creditors 1,667 (101) 279Increase in provisions 403 43 (11) ------------------------------------------Net cash inflow from operating activities 1,795 871 1,775 ------------------------------------------ 4. Analysis of Net Funds At 1 January Cash Flow At 30 June 2006 £'000 2006 £'000 £'000 Cash in hand and at bank 717 2,538 3,255Short term bank deposits 4,178 3,960 8,138 -------------------------------------------- 4,895 6,498 11,393 -------------------------------------------- 5. Reconciliation of movement in shareholders' funds At 31 At 30 June At 30 June December 2006 2005 2005 £'000 £'000 £'000 Profit/(loss) for the period 297 57 (668)Transfer to share option reserve 21 20 26Foreign currency translation adjustments (287) - -Merger reserve 76,801 - -Dividends paid (338) (224) (224)Issue of ordinary share capital 795 15 61 ------------------------------------------Net movement in shareholders' funds 77,289 (132) (805) Opening shareholders' funds 13,508 14,313 14,313 ------------------------------------------Closing shareholders' funds 90,797 14,181 13,508 ------------------------------------------ 6. Acquisitions On 1 June 2006, the company acquired the entire issued share capital of Proc Cyber Services (UK) Limited. Consideration for the purchase was satisfied by the issue of 44,913,111 new fully paid shares. In calculating goodwill arising on consolidation as of 1 June 2006, the book values of the assets and liabilities of Proc Cyber Services (UK) Limited, which are not considered materially different from their fair values, are as follows: £'000 £'000 Tangible fixed assets 766Investments 192 Debtors 2,419Cash 6,422Creditors (2,197)Foreign Currency Translation Reserve 346 ----------------Net assets 7,948 ---------------- ConsiderationFair value of shares issued 77,251Share option charge 1,013Acquisition costs 1,710 ----------------Total consideration 79,973 ----------------Goodwill arising on acquisition 72,025 ---------------- Goodwill arising on the acquisition is capitalised and amortised through the profit and loss account over 10 years, which is a period considered by the directors to be appropriate. 7. Taxation The current tax rate of 30% has been used for the basis of the tax provision. 8. Prior year adjustment The adoption of FRS 20 - share based payments requires a prior year adjustment to be made in respect of unexercised employee share options. This has decreased the profit and loss reserve by £46k. Of this amount £26k is attributable to the year ended 31 December 2005. At At 30 June At 30 June 31 December 2006 2005 2005 £'000 £'000 £'000 Opening equity shareholders' funds:As previously reported 13,508 14,312 14,312Prior year adjustment - (20) (26) ------------------------------------------As restated 13,508 14,292 14,286 Retained profit for the period 297 77 (642)Transfer to share option reserve 21 20 26Transfer to other reserves 76,801 - -Foreign currency translation adjustments (287) - -Issue of share capital 795 16 62Dividends paid (338) (224) (224) ------------------------------------------Closing equity shareholders' funds 90,797 14,181 13,508 ------------------------------------------ This information is provided by RNS The company news service from the London Stock Exchange END This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
GlobalData