17th Sep 2009 07:00
NEOVIA Financial Plc
Interim Results for the half year ended 30 June 2009
First half in line in a difficult year
Thursday, 17 September 2009 - NEOVIA Financial Plc ("NEOVIA" or the "Company" or the "Group"), (NEO.L), the independent online payments business, today announces its results for the half year ended 30 June 2009.
Financial Results:
1Income from operations defined as gross profit less general and administrative costs
Business Highlights:
Dale Johnson, Chairman of NEOVIA, commented:
"The first half's trading results were in line with management's expectations given the continuing difficult market conditions that prevailed throughout the period. The Newteller platform will launch fully in early 2010 as anticipated, creating much needed flexibility for developing functionality to meet evolving market needs. During this period the Group faces both challenges and opportunities, but remains focused on maximising revenues, controlling costs and preserving cash to deliver value for shareholders. We expect trading conditions to remain tough in the second half, with the Company delivering revenue similar to the first half, with prospects for 2010 looking promising. We are pleased to have recruited Mark Mayhew to lead NEOVIA as President & CEO, and the Board remains confident about the Group's future prospects."
Mark Mayhew, President & CEO of NEOVIA, added:
"I am very pleased to have joined NEOVIA and am reassured by these results which demonstrate the resilience of the Company's business model even in the toughest of economic environments. I shall be concentrating on creating substantial shareholder wealth in the future and the board is fully supportive of this aim. Over the next few months, one of my prime objectives is to focus the Group's efforts on re-energising our offering in order to grow revenues demonstrably. I am confident that we can tune our strategy and execution to reflect evolving market needs and to create renewed success, and I look forward to communicating our efforts and results in this regard as we progress."
For further information contact:
|
NEOVIA Financial Plc |
||
|
Dale Johnson |
Chairman |
+ 44 (0) 207 638 9571 |
|
Mark Mayhew |
President & CEO |
|
|
Doug Terry |
CFO |
|
|
Andrew Gilchrist |
VP Communications |
+44 (0) 1624 698 713 |
|
Email: [email protected] |
||
|
Twitter: https://twitter.com/neovia |
||
|
Citigate Dewe Rogerson |
+ 44 (0) 207 638 9571 |
|
|
Sarah Gestetner / George Cazenove |
||
|
Daniel Stewart & Co Plc |
+ 44 (0) 207 776 6550 |
|
|
Paul Shackleton |
||
* * * * *
About NEOVIA Financial
Trusted by consumers and merchants in over 160 countries to move and manage billions of dollars each year, NEOVIA Financial 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.
NEOVIA Financial Plc is quoted on the London Stock Exchange's AIM market, with a ticker symbol of NEO. 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 or subscribe at www.neovia.com/feeds/.
* * * * *
The Group will host a meeting for invited UK-based analysts this morning to be held at the offices of Citigate Dewe Rogerson at 9.00 a.m. A copy of the slide presentation given at the meeting will be available on the Group's website later today. In addition, there will be a conference call for international investors and analysts on Thursday 17 September 2009 starting at 2.00 p.m. BST (9.00 a.m. EST), details of which are set out below:
|
Participant Dial-in numbers: |
UK Free Call: |
0808 109 0700 |
|
USA Free Call: |
1 866 966 5335 |
|
|
Standard International: |
+44 203 003 2666 |
|
|
Password: |
Neovia Financial |
In order to ensure access to the call, attendees should please confirm their attendance in advance by emailing NEOVIA Investor Relations at: [email protected]. A recording of the conference call will be available for 7 days following the call.
BUSINESS REVIEW
Introduction
The first six months of trading in 2009 have demonstrated the resilience of NEOVIA's business model which brings together gateway, e-wallet and card businesses under the NEOVIA Payment Suite offering to merchants and consumers. The results also reflect the challenges the Group faces in increasing its active customer base and revenue in the current difficult market.
Fee revenue was down 4% to $31.5 million from H1 2008. Revenues from the NETELLER e-wallet declined 9% and gateway revenues from the NETBANX Europe and Asia businesses were up 12%, each compared to the same period in 2008. Strong growth in revenues from the Asian gateway business continued, growing 40% to $6.9 million. Quarter-on-quarter, total revenues declined 2% from $16.4 million in Q1 2009 to $16.2 million in Q2 2009. Low interest rates worldwide continued to have an impact on interest income, which was $1.1 million in H1 2009 compared to $3.1 million for the same period in 2008.
Factors that have resulted in the year-on-year revenue decline include the difficult macro-economic environment which has affected the Group's gaming merchant base, including regulatory difficulties experienced by some key merchants. In addition, focus on the Group's Newteller platform project has delayed several revenue uplift initiatives by a few months. Despite this, the Group is well placed to take advantage of any improvements in the economy in the second half of the year.
Increasing volumes in NETBANX Asia's business, which has a lower gross margin, contributed to a margin of 56.2% for H1 2009 compared to 61.6% in H1 2008. Cost management remains a core objective in the second half, with initiatives such as migrating certain call centre operations to the Group's Asian locations expected to generate further cost savings.
The Group achieved income from operations of $5.4 million in H1 2009, down from $7.0 million in H1 2008. Focus on the Group's cost base, together with foreign exchange benefits as the majority of the Group's operational costs are in non US dollar currencies, meant that general and administrative expenses decreased to $13.0 million from $15.1 million in H1 2008. The Group incurred $5.5 million of impairment expense relating to fees and other costs incurred in unsuccessful acquisitions and investments. As part of the Group's restructuring, three senior executives left the Group in the period. Total restructuring expenses, including severance payments, legal fees and other supplier settlements, were $1.6 million.
The Group's financial position remains solid with cash and cash equivalents of $73.4 million at 30 June 2009, resulting in "free cash" of approximately $30.2 million. Ongoing investment in the Newteller platform project represented the main use of cash in the first half of 2009. The Group is committed to prudent cash management and will therefore not be declaring a dividend for the first six month period of 2009, taking into account the results to date and current uncertain economic outlook.
Product innovation and development
The Group continued to invest in enhancing its offering to both consumers and merchants in the first half of 2009, with additional payment options and new countries added to the NETELLER e-wallet service. The Group added six further countries to its full service offering (e-wallet, P2P and Money Transfer) in the first half of 2009. Further payment options were added to the NETBANX Unified Pay Page, launched in late 2008, which allows NETBANX merchants to offer multiple payment options via a single integration.
Progress has been made in our key revenue generation initiatives, although some of these are a few months behind schedule due to the intense focus on Newteller and other factors. Successes include a focused active customer program and new major contact wins with international merchants like SBOBET, a leading sports betting operator, which will process payments using both the NETELLER e-wallet and NETBANX gateway, and MindArk, operator of the virtual world Entropia Universe. This latter contract also signals the Group's successful entry into the multi-billion dollar Massive Multiplayer Online Gaming (MMOG) market, a key vertical that will be well served by our Payment Suite.
Early in the first quarter, our Person-to-Person (P2P) service was extended to NETELLER Express-level members, allowing instant transfer of funds between NETELLER e-wallet members. Building on this, the NETELLER Money Transfer service (www.sendmoney.neteller.com) went live in July 2009 and is already showing promising trends for new sign ups and volumes of funds transferred. In late August changes were made to the Net+ virtual MasterCard, making it available to qualified NETELLER Express-level members.
The first half saw the Group's commitment to innovation recognised with a number of industry awards. The Net+ Card, a virtual and physical prepaid card loaded via the NETELLER e-wallet, won the Best New Prepaid Card Product Launch at the Cards & Payments Europe 2009 Awards, and was recognised in the FinExtra Innovation Showcase, which highlights the most innovative technologies and products in financial services. The NETELLER e-wallet was chosen by the affiliate industry as the Best Payment System for Affiliates for the second consecutive year at the Casino Affiliate Programme Awards.
Newteller platform investment
Substantial progress was made in the Group's Newteller platform project during the first half and deployment is scheduled to occur during Q3 and Q4 2009. The Newteller platform is already running in production where it will shadow the existing platform with a planned and sequential cut-across until the process is complete in early 2010. The anticipated benefits of Newteller include cost savings by automating numerous processes, greater operating efficiencies by migrating multiple current systems on to a single platform and flexibility to rapidly develop new functionalities to meet evolving market opportunities. In addition, Newteller will provide enhanced capability in such key areas as disaster recovery, service availability, risk management and significantly reduced new product development and deployment lead times. A number of exciting product initiatives are already being worked on to take advantage of the availability of the Newteller platform in 2010.
Strategic investments
The first half saw the Group investigate and pursue a number of potential strategic opportunities, including the unsuccessful acquisition of IDT Financial Services Holding Limited. This resulted in acquisition-related costs of $0.9 million being incurred in the Group's results for the first half. The Group also conducted a review of its strategic investment in Centricom Pty Limited and determined that due to its performance over the past two years, the Group would provide no further funding to the business. This resulted in the recognition of an impairment loss in the period of $4.6 million in relation to the Group's investment.
Directors and senior management
The appointment of Mark Mayhew as President & CEO with effect from 1 September 2009 was announced on 19 August 2009. Two additional non-executive directors, John Bateson and Jonathan Comerford, were appointed to the Board on 20 January 2009. Ron Martin, former President & CEO, stepped down from his role and the Board on 31 May 2009.
US update
The Group announced on 21 August 2009 that the Deferred Prosecution Agreement ("DPA") entered into effective 18 July 2007 with the US Attorney's Office for the Southern District of New York has expired as scheduled. The Company also received a copy of the Notice of Dismissal of the Complaint filed against it in this matter in the United States District Court for the Southern District of New York. The Company has complied with the DPA and will no longer be subject to oversight by the Monitor appointed pursuant to the DPA.
Current trading and outlook
The Group's overall revenue in the first two months of the third quarter is slightly below expectations. July's e-wallet revenue was flat compared to June. Somewhat more encouraging was that August's e-wallet revenue increased by approximately 6% from July due in part to a targeted VIP bonus promotion. Sign-ups from 1 July to 13 September averaged 1,119 per day, compared to 1,022 in Q2 2009. The increase can be partly attributed to the new Money Transfer service initiated in early Q3 2009.
Whilst acknowledging near term challenges, the Board continues to be optimistic about the outlook for NEOVIA and remains confident about the Group's prospects going forward.
FINANCIAL REVIEW
Key Performance Indicators
The Group's primary driver of fee revenue from its e-wallet is the active e-wallet user base. An active e-wallet user is defined as a consumer whose e-wallet account balance has changed during the past quarter. The change in balance may be due to adding, removing, transferring or receiving funds. Active e-wallet users increased 3% in Q2 2009 to 95,492 from 92,757 in Q1 2009. Several Q2 marketing promotions and significant sporting events helped to improve activity in the quarter. However, the year on year overall decline of 5% from Q2 2008 actives of 100,760 was reflective of adverse economic and regulatory factors impacting the online gaming sector. The active e-wallet users by region are shown in the table below:
|
Active e-wallet users |
Q2 2009 |
Q2 2008 |
% change Q2 2009 vs. Q2 2008 |
Q1 2009 |
% change Q2 2009 vs. Q1 2009 |
|
Europe |
73,696 |
78,280 |
-6% |
73,418 |
0% |
|
Asia Pacific |
14,627 |
17,490 |
-16% |
13,097 |
12% |
|
Rest Of World |
7,169 |
4,990 |
44% |
6,242 |
15% |
|
Total |
95,492 |
100,760 |
-5% |
92,757 |
3% |
|
Total signed up e-wallet users |
1,534,816 |
1,187,812 |
29% |
1,442,815 |
6% |
Total signed up e-wallet users (excluding North America) at 30 June 2009 were 1,534,816 compared to 1,187,812 at 30 June 2008.
Average daily deposits increased to $475,266 in Q2 2009 from $396,413 in Q1 2009. Increased deposit volume has allowed revenue to remain stable while revenue per active e-wallet user has declined. E-wallet revenue per active e-wallet user by region is shown in the table below:
|
E-wallet revenue per active e-wallet user ($) |
Q2 2009 |
Q2 2008 |
% change Q2 2009 vs. Q2 2008 |
Q1 2009 |
% change Q2 2009 vs. Q1 2009 |
|
Europe |
112 |
133 |
-16% |
121 |
-7% |
|
Asia Pacific |
132 |
122 |
8% |
129 |
2% |
|
Rest Of World |
77 |
99 |
-22% |
80 |
-5% |
|
Total |
112 |
130 |
-14% |
119 |
-6% |
In Europe, Q2 2009 fees per active user of $112 were down 7% from Q1 2009 and 16% from Q2 2008. In contrast, Asia Pacific fees per active user in Q2 2009 were $132, up 2% over Q1 2009 and 8% over Q2 2008. The European fees per active user decreased because of fee rebate programs run throughout H1 2009. The more developed European market is more competitive, necessitating active marketing programs.
|
Average daily sign ups (excluding North America) |
Q2 2009 |
Q1 2009 |
% change Q2 2009 vs. Q1 2009 |
H1 2009 |
H1 2008 |
% change H1 2009 vs. H1 2008 |
|
Europe |
675 |
721 |
-6% |
698 |
756 |
-8% |
|
Asia Pacific |
164 |
148 |
11% |
156 |
183 |
-15% |
|
Rest Of World |
172 |
154 |
12% |
163 |
108 |
51% |
|
Total |
1,011 |
1,023 |
-1% |
1,017 |
1,047 |
-3% |
Average daily sign ups of 1,017 in H1 2009 remained relatively consistent from 1,047 in H1 2008 (decrease of 3%) and 925 in H2 2008 (increase of 10%). On a quarterly basis, average daily sign ups of 1,011 in Q2 2009 was up from 993 in Q2 2008 (increase of 2%) and down 1% from 1,023 in Q1 2009.
Revenue
Fee revenue decreased in H1 2009 to $31.5 million from H1 2008 revenue of $32.8 million. The 4% decline was the result of adverse economic and other factors as described earlier.
|
Revenue ($ millions) |
H1 2009 |
H1 2008 |
% growth |
Q2 2009 |
Q1 2009 |
% growth |
|
Europe |
17.4 |
19.9 |
-13% |
8.4 |
9.0 |
-8% |
|
Asia Pacific |
3.7 |
3.7 |
0% |
1.9 |
1.7 |
11% |
|
Rest of World |
1.1 |
0.9 |
21% |
0.6 |
0.5 |
8% |
|
North America |
0.2 |
- |
nm |
0.1 |
0.1 |
8% |
|
E-wallet revenue |
22.3 |
24.5 |
-9% |
11,0 |
11.3 |
-4% |
|
NETBANX Europe |
2.3 |
3.4 |
-33% |
1.2 |
1.1 |
13% |
|
NETBANX Asia |
6.9 |
4.9 |
40% |
3.5 |
3.4 |
5% |
|
Fee Revenue |
31.5 |
32.8 |
-4% |
15.7 |
15.8 |
-1% |
|
Interest |
1.1 |
3.1 |
-64% |
0.5 |
0.6 |
-19% |
|
Total |
32.6 |
35.9 |
-9% |
16.2 |
16.4 |
-2% |
The European market has experienced the most pronounced recession-induced impact, where e-wallet revenues declined 13% from H1 2008 to H1 2009. Fee rebates were introduced in H2 2008 to incentivise VIP customers. Asia e-wallet revenue stayed flat between H1 2009 and H1 2008 where less rebates are used in marketing. Partially offsetting the decline in e-wallet revenue were fees generated from the Net+ debit card, which has been well accepted by customers. In early Q3 2009, the Group entered the remittance market with the launch of NETELLER Money Transfer Service for instant online movement of funds, which will contribute new revenue.
Gateway fees continued to improve due to NETBANX Asia. Fees in H1 2009 increased 40% to $6.9 million from $4.9 million in H1 2008. NETBANX Asia has a robust and trusted solution for merchants seeking new market opportunities in Asia Pacific. NETBANX Europe revenue declined 33% from $3.4 million in H1 2008 to $2.3 million in H1 2009. The 25% depreciation of the pound sterling from H1 2008 to H1 2009 accounted for the majority of the decrease, as NETBANX Europe operates mainly in the UK.
Interest revenue declined significantly from $3.1 million in H1 2008 to $1.1 million in H1 2009. The 64% decline was due to the dramatic reduction in interest rates globally. Average investment returns of 2.6% in H1 2008 declined to less than 1% on average in H1 2009. The Group expects continuing low interest revenue as returns on cash investments remain below 1%.
Gross Margin
Gross margin decreased from 61.6% in H1 2008 to 56.2% in H1 2009. The decrease is the result of both increased volume from NETBANX Asia which has a lower gross margin, as well as additional server hosting costs for the Newteller platform. This was partially offset by cost savings in customer support, marketing and promotions. Q2 2009 gross margin of 54.4% was lower than anticipated (and lower than that reported for Q1 2009 of 58.0%) primarily due to one-off and temporary additional server hosting costs related to Newteller and lower than anticipated returns on investment rollovers in the period.
Customer support costs decreased as a percentage of revenue from 15% in H1 2008 to 12% in H1 2009. The Canadian based call centre realised savings as a result of the decline in value of the Canadian dollar (operating currency) relative to the US dollar (reporting currency) of approximately 14%. Other savings resulted from rationalising call centre roles and functions. The Group expects continued savings as certain call centre operations are migrated to offices in Asia during the second half of the year.
Website maintenance costs increased to 7% of revenue in H1 2009 from 5% in H2 2008. The increase was due to additional server hosting and related infrastructure requirements for the Newteller platform and the new emergency recovery data centre.
Marketing and Promotion costs decreased by 73% to $0.2 million in H1 2009 from $0.8 million in H1 2008. The targeted bonus program in 2008 was not implemented in H1 2009, accounting for the decline.
Deposit and withdrawal fees increased by 26% to $7.4 million in H1 2009 from $5.9 million in H1 2008. The increase was due to two factors: firstly, the growth of the NETBANX Asia gateway (as it is lower margin business, the growth in revenue results in a higher proportionate growth in the cost of sales via higher deposit and withdrawal costs); and secondly, the operation of the Net+ prepaid card (where fees are paid to third party service providers).
Bad debt expense of $0.4 million in H1 2009 also increased from $nil in H1 2008. H1 2008 expense was offset by one time recoveries of previously written off accounts.
Operating Expenses and Other
General and administrative expenses decreased by 14% to $13.0 million in H1 2009 from $15.1 million in H1 2008. The depreciation of the Canadian dollar and British pound from H1 2008 to H1 2009 was mostly responsible for the reduced costs incurred by the Canadian and UK based operations.
Employee stock option expense was relatively consistent between H1 2009 and H1 2008 at $1.4 million.
The Group recognised that its investment in Centricom Pty Limited may not have any recoverable value. An impairment loss of $4.6 million has been recorded as at 30 June 2009.
Restructuring costs of $1.6 million in H1 2009 consisted of severance payments made for further business rationalisation as a result of the continuing economic downturn and additional costs related to the Group's withdrawal from the US market.
Acquisition costs of $0.9 million relating to the unsuccessful acquisition of IDT Financial Services Holdings Limited were recognised in the consolidated statement of income for H1 2009 as an impairment loss.
Income Tax Expense
The tax model is based on the mark-up of services provided by various subsidiaries to the Group's parent in the Isle of Man, where source revenues are subject to a tax rate of zero per cent. The recovery of income taxes at 30 June 2009 of $0.3 million was due to a successful application for the refund of tax payments made in 2008 to Canadian authorities.
Cash Position of the Group
The cash and cash equivalents balance at 30 June 2009 of $73.4 million represented the unrestricted cash of the Group. Cash available to the Group of $78.1 million was the total of "Cash and cash equivalents", "Restricted cash" and the excess of "Qualifying liquid assets" over "Payable to European customers".
The working capital position of the Group, defined as current assets less current liabilities, was approximately $60.2 million. Required cash inventory comprising amount held at processors, operating account balances to cover payouts and the buffer on trust accounts was approximately $30.0 million, resulting in available "free cash" of approximately $30.2 million.
Cash flow from operations remained positive in H1 2009. However, the development of the Newteller platform was a major use of cash resulting in an overall net decrease in cash of $5.4 million from 31 December 2008.
The Board has decided that it would not be appropriate to pay a dividend given the first half results and the current uncertain economic outlook.
* * *
|
NEOVIA Financial Plc Consolidated Balance Sheet (Unaudited) As at 30 June 2009 |
|
30 June 2009 |
31 December 2008 |
|
|
$ |
$ |
|
|
ASSETS |
||
|
CURRENT ASSETS |
||
|
Cash and cash equivalents |
73,350,736 |
76,246,169 |
|
Restricted cash (Note 3) |
2,923,646 |
2,941,543 |
|
Qualifying Liquid Assets held for European customers (Note 4) |
68,929,913 |
63,444,278 |
|
Receivable from customers |
1,115,000 |
702,000 |
|
Trade and other receivables |
1,408,879 |
1,253,586 |
|
Prepaid expenses and deposits |
2,455,815 |
3,309,125 |
|
150,183,989 |
147,896,701 |
|
|
NON-CURRENT ASSETS |
||
|
Mortgage receivable |
647,949 |
616,119 |
|
Property, plant & equipment (Note 5) |
6,886,720 |
8,759,068 |
|
Intangible assets (Note 6) |
26,950,538 |
17,872,820 |
|
Investment in associate (Note 7) |
- |
5,085,074 |
|
184,669,196 |
180,229,782 |
|
|
LIABILITIES |
||
|
CURRENT LIABILITIES |
||
|
Trade and other payables (Note 8) |
21,477,753 |
18,318,683 |
|
Payable to European customers (Note 4) |
67,087,784 |
60,307,346 |
|
Income taxes payable |
1,453,366 |
1,904,472 |
|
90,018,903 |
80,530,501 |
|
|
SHAREHOLDERS' EQUITY |
||
|
Share capital (Note 10) |
39,725 |
39,725 |
|
Share premium |
50,554,492 |
50,554,492 |
|
Capital redemption reserve |
147 |
147 |
|
Equity reserve on share option issuance |
7,313,208 |
5,954,728 |
|
Translation reserve |
(1,011,709) |
(1,320,417) |
|
Retained earnings |
37,754,430 |
44,470,606 |
|
94,650,293 |
99,699,281 |
|
|
184,669,196 |
180,229,782 |
|
See accompanying notes to the consolidated financial statements
|
NEOVIA Financial Plc Consolidated Income Statement for the six month period ended 30 June 2009 (Unaudited) |
|
Six month period ended 30 June 2009 $ |
Six month period ended 30 June 2008 $ |
|
|
Revenue |
||
|
Transaction fees |
31,512,139 |
32,790,083 |
|
Investment income |
1,118,016 |
3,099,848 |
|
32,630,155 |
35,889,931 |
|
|
Cost of sales |
||
|
Customer support |
3,960,749 |
5,205,101 |
|
Website maintenance |
2,223,582 |
1,867,983 |
|
Marketing and promotions |
210,043 |
765,306 |
|
Deposit and withdrawal fees |
7,447,032 |
5,901,655 |
|
Bad debts and collections |
439,068 |
31,949 |
|
14,280,474 |
13,771,994 |
|
|
Gross profit |
18,349,681 |
22,117,937 |
|
Operating expenses |
||
|
General and administrative |
12,986,291 |
15,126,559 |
|
Share option expense (Note 13) |
1,358,479 |
1,442,235 |
|
Management bonus |
435,000 |
899,971 |
|
Foreign exchange loss/(gain) |
96,189 |
(150,638) |
|
Depreciation and amortisation |
2,806,281 |
3,172,613 |
|
Investment loss |
533,116 |
382,520 |
|
18,215,356 |
20,873,260 |
|
|
Profit before other items |
134,325 |
1,244,677 |
|
Other items Impairment loss (Note 7) |
||
|
4,568,511 |
- |
|
|
Restructuring costs (Note 11) |
1,623,114 |
92,484 |
|
Loss on disposal of assets |
4,133 |
- |
|
Acquisition costs impairment (Note 14) |
928,527 |
- |
|
(Loss)/profit before tax |
(6,989,960) |
1,152,193 |
|
Income tax (recovery)/expense |
(273,784) |
4,409 |
|
Net (loss)/profit for the period |
(6,716,176) |
1,147,784 |
|
Basic (loss)/earnings per share (Note 12) |
$(0.06) |
$0.01 |
|
Fully diluted (loss)/earnings per share (Note 12) |
$(0.06) |
$0.01 |
See accompanying notes to the consolidated financial statements.
|
NEOVIA Financial Plc Consolidated Statement of Changes in Equity (Unaudited) For the six month period ended 30 June 2009 |
|
Share capital - ordinary shares |
Share capital - deferred shares |
Total share capital |
Share premium |
Equity reserve on share option issuance |
Translation reserve on foreign operations |
Capital redemption reserve |
Retained earnings |
Total $ |
|||||||
|
Balance as at 1 January 2008 |
21,725 |
18,000 |
39,725 |
50,554,492 |
3,219,506 |
9,412,813 |
147 |
52,557,227 |
115,783,910 |
||||||
|
Equity reserve on option issuance |
- |
- |
- |
- |
1,442,234 |
- |
- |
- |
1,442,234 |
||||||
|
Translation reserve on foreign operations |
- |
- |
- |
- |
- |
(838,734) |
- |
- |
(838,734) |
||||||
|
Net profit for the period |
- |
- |
- |
- |
- |
- |
- |
1,147,784 |
1,147,784 |
||||||
|
Balance as at 30 June 2008 |
21,725 |
18,000 |
39,725 |
50,554,492 |
4,661,740 |
8,574,079 |
147 |
53,705,011 |
117,535,194 |
||||||
|
Equity reserve on option issuance |
- |
- |
- |
- |
1,292,988 |
- |
- |
- |
1,292,988 |
||||||
|
Translation reserve on foreign operations |
- |
- |
- |
- |
- |
(9,894,496) |
- |
- |
(9,894,496) |
||||||
|
Net loss for the period |
- |
- |
- |
- |
- |
- |
- |
(9,234,405) |
(9,234,405) |
||||||
|
Balance as at 1 January 2009 |
21,725 |
18,000 |
39,725 |
50,554,492 |
5,954,728 |
(1,320,417) |
147 |
44,470,606 |
99,699,281 |
||||||
|
|
|
||||||||||||||
|
Equity reserve on option issuance |
- |
- |
- |
- |
1,358,480 |
- |
- |
- |
1,358,480 |
||||||
|
Translation reserve on foreign operations |
- |
- |
- |
- |
- |
308,708 |
- |
- |
308,708 |
||||||
|
Net loss for the period |
- |
- |
- |
- |
- |
- |
- |
(6,716,176) |
(6,716,176) |
||||||
|
Balance as at 30 June 2009 |
21,725 |
18,000 |
39,725 |
50,554,492 |
7,313,208 |
(1,011,709) |
147 |
37,754,430 |
94,650,293 |
||||||
See accompanying notes to the consolidated financial statements
|
NEOVIA Financial Plc Consolidated Statement of Cash Flows (Unaudited) For the six month period ended 30 June 2009 |
|
Six months ended 30 June 2009 |
Six months ended 30 June 2008 |
|
|
$ |
$ |
|
|
OPERATING ACTIVITIES |
||
|
(Loss)/profit before tax |
(6,989,960) |
1,152,193 |
|
Adjustments for: |
||
|
Depreciation and amortisation |
2,806,281 |
3,172,613 |
|
Unrealised foreign exchange (gain)/loss |
(2,452,591) |
1,784,305 |
|
Share option expense |
1,358,479 |
1,442,235 |
|
Investment loss |
533,116 |
382,520 |
|
Impairment loss (Note 7) |
4,568,511 |
- |
|
Asset disposal |
4,133 |
- |
|
Operating cash flows before movements in working capital |
(172,031) |
7,933,866 |
|
Increase in receivable from customers |
(413,000) |
(100,000) |
|
Increase in trade and other receivables |
(155,294) |
364,375 |
|
Decrease in prepaid expenses and deposits |
853,310 |
226,759 |
|
Increase in trade and other payables |
2,889,278 |
1,917,981 |
|
Forfeiture payable (Note 9) |
- |
(38,250,415) |
|
Cash generated/(consumed) by operations |
3,002,263 |
(27,907,434) |
|
Tax paid |
(177,322) |
(399,759) |
|
Net cash generated/(consumed) by operating activities |
2,824,941 |
(28,307,193) |
|
INVESTING ACTIVITIES |
||
|
Increase in payable to European customers |
6,780,438 |
7,766,440 |
|
Purchase of property, plant & equipment and intangible assets |
(9,507,290) |
(5,073,922) |
|
Decrease in restricted cash accounts |
17,896 |
8,343,376 |
|
Increase in Qualifying Liquid Assets held for European customers |
(5,485,635) |
(5,512,862) |
|
Investment in associate |
(16,553) |
- |
|
Investment in joint venture |
- |
(156,791) |
|
Net cash (consumed)/generated by investing activities |
(8,211,144) |
5,366,241 |
|
FINANCING ACTIVITIES |
||
|
Mortgage receivable |
(31,830) |
26,352 |
|
Net cash (consumed)/generated by financing activities |
(31,830) |
26,352 |
|
DECREASE IN CASH AND CASH EQUIVALENTS |
||
|
DURING THE PERIOD |
(5,418,033) |
(22,914,600) |
|
NET EFFECT OF FOREIGN EXCHANGE ON |
||
|
CASH AND CASH EQUIVALENTS |
2,722,386 |
(1,510,721) |
|
TRANSLATION OF FOREIGN OPERATIONS |
(199,786) |
305,966 |
|
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD |
76,246,169 |
80,750,283 |
|
CASH AND CASH EQUIVALENTS, END OF PERIOD |
73,350,736 |
56,630,928 |
See accompanying notes to the consolidated financial statements
|
NEOVIA Financial Plc Notes to the Consolidated Financial Statements For the six month period ended 30 June 2009 (Unaudited) |
1. Basis of presentation
The principal operating currency of the Group is US dollars and accordingly the financial statements have been prepared in US dollars. The interim results for the period ended 30 June 2009 are unaudited and do not constitute statutory accounts within the meaning of the Companies Acts 1931 to 2004. The statutory accounts of NEOVIA Financial Plc for the year ended 31 December 2008 contain an unqualified audit report. Further copies can be obtained from the Registered Office of the Company, Audax House, Finch Road, Douglas, Isle of Man, IM1 2PT
2. Significant accounting policies
The interim results for the period ended 30 June 2009 have been prepared in accordance with the accounting policies adopted in the accounts for the year ended 31 December 2008 and in accordance with IAS 34 "Interim Financial Reporting".
3. Restricted cash
For merchants and non-European customers, the Group maintains bank accounts with the Company's principal bankers which are segregated from operating funds and which contain funds held on behalf of customers, representing pooled customer funds. Balances in the segregated accounts are maintained at a sufficient level to fully offset amounts owing to the Group's merchants and customers. A legal right of offset exists between the balances owing to the merchants (excluding NetBanx & Netbanx Asia merchant liabilities) and customers and the cash balances segregated in the client accounts. As such, only the net balance of surplus cash is disclosed on the balance sheet as Restricted Cash.
At 30 June 2009, the Group had the following balances:
|
CLIENT ACCOUNT FUNDS |
BALANCE OWING |
RESTRICTED CASH |
|
|
$ |
$ |
$ |
|
|
Non-European Customers |
24,950,233 |
24,013,266 |
936,967 |
|
Merchants |
56,944,725 |
54,958,046 |
1,986,679 |
|
81,894,958 |
78,971,312 |
2,923,646 |
At 31 December 2008, the Group had the following balances:
|
CLIENT ACCOUNT FUNDS |
BALANCE OWING |
RESTRICTED CASH |
|
|
$ |
$ |
$ |
|
|
Non-European Customers |
24,062,805 |
23,489,751 |
573,054 |
|
Merchants |
61,934,429 |
59,565,940 |
2,368,489 |
|
85,997,234 |
83,055,691 |
2,941,543 |
4. Qualifying Liquid Assets held for European customers
In compliance with the Financial Services Authority rules and regulations, the Group holds Qualifying Liquid Assets at least equal to the amounts owing to European customers. These amounts are maintained in accounts which are segregated from operating funds.
The Group had the following balances:
|
As at 30 June 2009 $ |
As at 31 December 2008 $ |
|
|
Qualifying Liquid Assets held for European customers |
68,929,913 |
63,444,278 |
|
Payable to European customers |
(67,087,784) |
(60,307,346) |
|
1,842,129 |
3,136,932 |
|
5. Property, Plant & Equipment
The Group had the following balances:
|
COMMUNICATION EQUIPMENT $ |
FURNITURE AND EQUIPMENT $ |
COMPUTER EQUIPMENT $ |
COMPUTER SOFTWARE $ |
BUILDING AND IMPROVEMENTS $ |
LAND $ |
TOTAL $ |
||
|
Cost |
||||||||
|
As at 31 December 2007 |
4,173,212 |
2,562,164 |
4,182,918 |
7,954,073 |
29,580,155 |
6,626,100 |
55,078,622 |
|
|
Additions |
129,621 |
110,414 |
233,782 |
933,993 |
34,303 |
- |
1,442,113 |
|
|
Property held for sale |
- |
- |
- |
- |
(28,261,507) |
(6,434,350) |
(34,695,857) |
|
|
Exchange differences |
(68,586) |
(62,852) |
(114,501) |
(124,335) |
(855,167) |
(191,750) |
(1,417,191) |
|
|
As at 30 June 2008 |
4,234,247 |
2,609,726 |
4,302,199 |
8,763,731 |
497,784 |
- |
20,407,687 |
|
|
Additions |
21,085 |
22,783 |
82,103 |
987,063 |
8,523 |
- |
1,121,557 |
|
|
Disposals |
- |
(44,649) |
(13,421) |
(96,863) |
- |
- |
(154,933) |
|
|
Exchange difference |
(1,049,117) |
(408,794) |
(682,951) |
(816,278) |
(74,543) |
- |
(3,031,683) |
|
|
As at 31 December 2008 |
3,206,215 |
2,179,066 |
3,687,930 |
8,837,653 |
431,764 |
- |
18,342,628 |
|
|
Additions |
25,663 |
34,171 |
365,563 |
420,984 |
- |
- |
846,381 |
|
|
Disposals |
- |
(608) |
- |
- |
- |
- |
(608) |
|
|
Reclassification |
- 343,953 |
- 111,147 |
- 182,871 |
(1,658,622) 215,405 |
- 18,785 |
- - |
(1,658,622) 872,161 |
|
|
Exchange difference |
||||||||
|
As at 30 June 2009 |
3,575,831 |
2,323,776 |
4,236,364 |
7,815,420 |
450,549 |
- |
18,401,940 |
|
|
Accumulated depreciation |
||||||||
|
As at 31 December 2007 |
1,464,320 |
866,036 |
2,740,135 |
3,712,860 |
1,990,118 |
- |
10,773,469 |
|
|
Charge for the period |
394,611 |
207,818 |
308,908 |
597,100 |
14,127 |
- |
1,522,564 |
|
|
Property held for sale |
- |
- |
- |
- |
(1,877,097) |
- |
(1,877,097) |
|
|
Exchange difference |
(22,998) |
(22,206) |
(75,630) |
(86,669) |
(56,786) |
- |
(264,289) |
|
|
As at 30 June 2008 |
1,835,933 |
1,051,648 |
2,973,413 |
4,223,291 |
70,362 |
- |
10,154,647 |
|
|
Charge for the period |
264,459 |
135,922 |
108,776 |
917,272 |
7,536 |
- |
1,433,965 |
|
|
Disposals |
- |
(13,217) |
(9,905) |
(96,863) |
- |
- |
(119,985) |
|
|
Exchange difference |
(587,899) |
(184,204) |
(480,587) |
(625,695) |
(6,682) |
- |
(1,885,067) |
|
|
As at 31 December 2008 |
1,512,493 |
990,149 |
2,591,697 |
4,418,005 |
71,216 |
- |
9,583,560 |
|
|
Charge for the period |
267,419 |
135,334 |
196,184 |
731,187 |
8,442 |
- |
1,338,566 |
|
|
Disposals |
- |
159 |
- |
- |
- |
- |
159 |
|
|
Exchange difference |
230,385 |
59,280 |
133,227 |
167,900 |
2,143 |
- |
592,935 |
|
|
As at 30 June 2009 |
2,010,297 |
1,184,922 |
2,921,108 |
5,317,092 |
81,801 |
- |
11,515,220 |
|
|
Net book value |
||||||||
|
As at 30 June 2008 |
2,398,314 |
1,558,078 |
1,328,786 |
4,540,440 |
427,422 |
- |
10,253,040 |
|
|
Net book value |
||||||||
|
As at 31 December 2008 |
1,693,722 |
1,188,917 |
1,096,233 |
4,419,648 |
360,548 |
- |
8,759,068 |
|
|
Net book value |
||||||||
|
As at 30 June 2009 |
1,565,534 |
1,138,854 |
1,315,256 |
2,498,328 |
368,748 |
- |
6,886,720 |
|
6. Intangible Assets
The Group had the following balances:
|
INTELLECTUAL PROPERTY $ |
WEBSITE DEVELOPMENT $ |
TOTAL $ |
|
|
Cost |
|||
|
As at 31 December 2007 |
18,425,350 |
12,253,294 |
30,678,644 |
|
Additions |
6,061 |
3,625,748 |
3,631,809 |
|
Exchange difference |
15,286 |
11,360 |
26,646 |
|
As at 30 June 2008 |
18,446,697 |
15,890,402 |
34,337,099 |
|
Additions |
112,726 |
8,314,134 |
8,426,860 |
|
Impairment loss |
(8,638,039) |
- |
(8,638,039) |
|
Exchange difference |
(3,179,410) |
(1,962,728) |
(5,142,138) |
|
As at 31 December 2008 |
6,741,974 |
22,241,808 |
28,983,782 |
|
Additions |
24,884 |
8,632,661 |
8,657,545 |
|
Reclassification |
- |
1,658,622 |
1,658,622 |
|
Exchange difference |
- |
830,550 |
830,550 |
|
As at 30 June 2009 |
6,766,858 |
33,363,641 |
40,130,499 |
|
Accumulated amortization |
|||
|
As at 31 December 2007 |
9,130,885 |
3,662,031 |
12,792,916 |
|
Charge for the period |
599,418 |
1,050,631 |
1,650,049 |
|
Exchange difference |
8,530 |
9,913 |
18,443 |
|
As at 30 June 2008 |
9,738,833 |
4,722,575 |
14,461,408 |
|
Charge for the period |
542,916 |
1,202,294 |
1,745,210 |
|
Impairment loss |
(2,777,914) |
- |
(2,777,914) |
|
Exchange difference |
(955,098) |
(1,362,644) |
(2,317,742) |
|
As at 31 December 2008 |
6,548,737 |
4,562,225 |
11,110,962 |
|
Charge for the period |
41,468 |
1,426,248 |
1,467,716 |
|
Exchange difference |
- |
601,283 |
601,283 |
|
As at 30 June 2009 |
6,590,205 |
6,589,756 |
13,179,961 |
|
Net book value |
|||
|
As at 30 June 2008 |
8,707,864 |
11,167,827 |
19,875,691 |
|
Net book value |
|||
|
As at 31 December 2008 |
193,237 |
17,679,583 |
17,872,820 |
|
Net book value |
|||
|
As at 30 June 2009 |
176,653 |
26,773,885 |
26,950,538 |
Intangible asset write down
The Group performs goodwill and intangible asset impairment tests at least annually or whenever events or changes in circumstances indicate that the goodwill and intangible asset carrying value for a business unit may not be recoverable.
In the fourth quarter of fiscal 2008, the Group recorded goodwill and intangible asset impairment of $8.6 million and $5.9 million respectively (net of any related accumulated amortisation) representing complete impairment of goodwill and intangible assets acquired on the purchase of NetBanx Limited in 2005. In accordance with IAS 36, an impairment loss should be recognised when the recoverable amount of an asset is less than its carrying amount. The recoverable amount was deemed to be zero, based on an analysis of the unit's future cash flow projections and management's best estimate of the set of economic conditions that will exist over the remaining useful life of the assets.
The recoverable amount of NetBanx Limited ('the cash-generating unit') was based on value-in-use calculations. Those calculations used cash flow projections based on actual operating results. A pre-tax discount rate of 5.5% was used in discounting the projected cash flows. The recoverable amount of the cash-generating unit exceeds its carrying amount. The Board believes that any reasonably possible change in the key assumptions on which the cash-generating unit's recoverable amount is based would not cause the cash-generating unit's carrying amount to exceed its recoverable amount.
7. Impairment of investment in associate
In the second quarter of fiscal 2009, the Group recorded an impairment loss of $4.6 million, representing complete impairment of the investment in Centricom Pty Ltd. In accordance with IAS 36, an impairment loss should be recognised when the recoverable amount of an asset is less than its carrying amount. The recoverable amount was deemed to be zero, based on an analysis of the unit's future cash flow projections and management's best estimate of the set of economic conditions that will exist over the remaining useful life of the assets.
8. Trade and Other Payables
The Group had the following balances:
|
As at 30 June 2009 $ |
As at 31 December 2008 $ |
|
|
Accounts payable |
15,268,378 |
11,741,354 |
|
Accrued accounts payable Payroll liabilities |
5,658,534 550,841 |
6,029,454 547,875 |
|
21,477,753 |
18,318,683 |
Included in Group accounts payable are merchant processing liabilities arising from the gateway operations of NetBanx and Netbanx Asia (1-Pay Direct). In addition, included in cash and cash equivalents is a transient cash balance that relates to merchant transactions processed via the gateway operations. The gateway operations do not fall within the EU definition of "e-money" nor does a legal right of offset exist between this cash and the corresponding merchant liabilities.
9. Forfeiture Payable
On 18 July 2007, the Company entered into a Deferred Prosecution Agreement ("DPA") with the United States Attorney's Office for the Southern District of New York ("USAO"). Pursuant to the DPA, the Company forfeited $136 million to the USAO as disgorgement of certain profits received by the Group from the activities described in the Statement of Admitted Facts attached to the DPA. This amount included approximately $57.7 million which the USAO previously seized. The Company satisfied the remaining portion of its forfeiture obligation with a payment of $40 million on 15 October 2007, and $38.25 million paid on 16 January 2008.
On 18 July 2009, the Group's Deferred Prosecution Agreement (DPA) formally expired as scheduled. Since 18 July 2007, the Group has complied with the DPA and will no longer be subject to oversight by the external audit monitor firm appointed under the DPA. The Group received a copy of the Notice of Dismissal of the Complaint filed against NETELLER on 19 August 2009.
The following details have been recorded:
|
Six months ended 30 June 2009 |
Year ended 31 December 2008 |
|
|
$ |
$ |
|
|
Opening balance |
- |
(38,250,415) |
|
16 January 2008 payment |
- |
38,250,415 |
|
Forfeiture payable at the end of the period |
- |
- |
10. Share capital
|
As at 30 June 2009 |
As at 31 December 2008 |
|
|
£ |
£ |
|
|
Authorised: |
||
|
200,000,000 ordinary shares of £0.0001 per share |
20,000 |
20,000 |
|
1,000,000 deferred shares of £0.01 per share |
10,000 |
10,000 |
|
Issued and fully paid |
US$ |
US$ |
|
119,920,953 ordinary shares of £0.0001 per share (At 31 December 2008: 119,920,953 ordinary shares of £0.0001 per share) |
21,725 |
21,725 |
|
1,000,000 deferred shares of £0.01 per share |
18,000 |
18,000 |
|
Total share capital |
39,725 |
39,725 |
Holders of the ordinary shares are entitled to receive dividends and other distributions, to attend and vote at any general meeting, and to participate in all returns of capital on winding up or otherwise.
Holders of the deferred shares are not entitled to vote at any annual general meeting of the Company, and are only entitled to receive the amount paid up on the shares after the holders of the ordinary shares have received the sum of £1,000,000 for each ordinary share held by them and shall have no other right to participate in assets of the Company.
11. Restructuring costs
The Group has incurred the following costs:
|
Six months ended 30 June 2009 $ |
Six months ended 30 June 2008 $ |
|
|
Severance payment related to departure of CEO |
568,005 |
- |
|
Severance payments to other senior management under letters of employment |
960,907 |
- |
|
Supplier contract renegotiation (recovery) |
(92,209) |
- |
|
Provision for supplier receivable |
54,765 |
- |
|
US withdrawal legal costs |
128,915 |
82,784 |
|
Other restructuring costs |
2,731 |
9,700 |
|
1,623,114 |
92,484 |
12. (Loss)/earnings per share
From continuing operations
The calculation of the basic and diluted earnings per share is based on the following data:
|
Six months ended 30 June 2009 |
Six months ended 30 June 2008 |
|
|
$ |
$ |
|
|
(Loss)/earnings |
||
|
(Loss)/earnings for the purposes of basic and diluted earnings per share being |
||
|
net profit attributable to equity share holders of the parent |
(6,716,176) |
1,147,784 |
|
Number of shares |
||
|
Weighted average number of ordinary shares for the purpose |
||
|
of basic earnings per share |
119,920,953 |
119,920,953 |
|
Effect of dilutive potential ordinary shares due to employee share options |
- |
- |
|
Weighted average number of ordinary shares for the purpose |
||
|
of diluted earnings per share |
119,920,953 |
119,920,953 |
|
Basic (loss)/earnings per share |
$(0.06) |
$0.01 |
|
Fully diluted (loss)/earnings per share |
$(0.06) |
$0.01 |
13. Share-based payments
The Company's share option plan was adopted pursuant to a resolution passed on 7 April 2004 and amended by the Board on 15 September 2008. The 2008 amendment included the addition of a new 'approved' plan for UK based employees. Under the 'approved' and 'unapproved' plans, the Board of Directors of the Company may grant share options to eligible employees including Directors of Group companies to subscribe for ordinary shares of the Company.
No consideration is payable on the grant of an option. Options may generally be exercised to the extent that they have vested. Options vest according to the relevant schedule over the grant period following the date of grant. Typically, options have been granted for a three and a half year grant period and have vested in equal thirds on or about the anniversary of the grant date. However, the Directors are permitted under the Plan Rules to alter the vesting schedule and the grant period. The exercise price is determined by the Board of Directors of the Company, and shall not be less than the market value at the date of grant. The option plan provides for a grant price to equal the average quoted market price of the Company shares on the three days prior to the date of grant. Share options are forfeited if the employee leaves the Group before the options vest. A participant of the share option plan has 30 days following the date of grant to surrender the option and if surrendered, the option will not be deemed granted.
On 15 April, 2009, 78,809 options granted on 3 November 2005 with an exercise price of £7.11 expired. Also on 15 April, 7,000 options granted on 15 December 2005 with an exercise price of £7.15 expired.
Equity-settled share option plan
|
Six months ended 30 June 2009 Weighted |
Six months ended 30 June 2009 |
Year ended 31 December 2008 Weighted |
Year ended 31 December 2008 |
|
|
average exercise price |
Options |
average exercise price |
Options |
|
|
Outstanding at the beginning of period |
£1.49 |
8,216,215 |
£1.50 |
6,699,116 |
|
Granted during the period |
- |
- |
£0.53 |
2,789,100 |
|
Forfeited during the period |
£0.74 |
(321,144) |
£1.34 |
(696,149) |
|
Exercised during the period |
- |
- |
- |
- |
|
Expired during the period |
£7.11 |
(85,809) |
£5.09 |
(575,852) |
|
Outstanding at the end of period |
£0.87 |
7,809,262 |
£1.49 |
8,216,215 |
|
Exercisable at the end of the period |
£1.20 |
3,025,640 |
£1.36 |
2.799,126 |
The options outstanding at the end of the period had a weighted average remaining contractual life of 2.23 years (31 December 2008: 2.71 years).
The options granted are priced using a trinomial lattice model to reflect factors including employee exercise behaviour, option life and option forfeitures. No options were granted in the six months ended 30 June 2009. The inputs into the model are as follows:
|
Six months ended 30 June 2009 |
Year ended 31 December 2008 |
|
|
Weighted average exercise price |
n/a |
£0.53 |
|
Expected volatility |
n/a |
56% |
|
Expected life |
n/a |
4 years |
|
Risk free interest rate |
n/a |
2% |
|
Expected dividends |
n/a |
- |
|
Employee exit rate |
n/a |
6.2% |
Expected volatility was determined by calculating the historical volatility of the Group's share price from the time of issue to the date of grant. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.
The Group recognised total expenses of US$1,358,479 (Six months ended June 30, 2008: US$1,442,235) related to the equity-settled share-based payments transactions in the period.
14. Acquisition costs impairment
On 1 December 2008, the Group entered into an agreement to acquire IDT Corporation's (NYSE: IDT; IDT.C) European Prepaid Payment Services Division, IDT Financial Services Holdings Limited (IDTFSH). The proposed acquisition was subject to the approval of the Gibraltar Financial Services Commission (FSC) and MasterCard accepting the proposed change of control of IDTFSH. On 20 March 2009, the Gibraltar FSC advised the Group that it was unable to consent to the acquisition. A substantial underlying shareholder of the Company, who under Gibraltar banking law was to become a controller of IDTFSH and about whom information therefore needed to be provided to the FSC in connection with the approval process, refused to provide the requisite notification to the FSC. The FSC in these circumstances determined that it was unable to consent to the change of control of IDTFSH from IDT Corporation to the Company.
Acquisition costs of $928,527 were expensed during the first six months of 2009 (Full Year 2008: $620,439). They are considered to have no future economic benefit and have accordingly been expensed in the period.
***
|
NEOVIA Financial Plc Additional Financial Information For the six month period ended 30 June 2009 |
|
The additional information presented below has been prepared for information purposes only. |
|||||||||
|
Please note that this information is outside of the scope of the unaudited financial statements. |
|||||||||
|
|
|||||||||
|
Q2 - 2009 |
Q1 - 2009 |
Q2 - 2008 |
Q2 2009 vs Q1 2009 |
Q2 2009 vs Q2 2008 |
|||||
|
US$ |
US$ |
US$ |
% change |
% change |
|||||
|
Revenue |
16,189,419 |
16,440,736 |
18,903,049 |
-2% |
-14% |
||||
|
Direct Costs |
(7,378,490) |
(6,901,984) |
(7,354,479) |
7% |
0% |
||||
|
Gross profit |
8,810,929 |
9,538,752 |
11,548,570 |
-8% |
-24% |
||||
|
General and Admin |
(6,543,328) |
(6,442,963) |
(6,943,207) |
2% |
6% |
||||
|
Operating income |
2,267,601 |
3,095,789 |
4,605,363 |
-27% |
-51% |
||||
|
Other income (expense) |
|||||||||
|
Foreign exchange gain (loss) |
(77,865) |
(18,324) |
163,490 |
nm |
nm |
||||
|
Management bonus |
(180,000) |
(255,000) |
(448,455) |
-29% |
-60% |
||||
|
Depreciation and amortisation |
(1,413,112) |
(1,393,169) |
(1,603,809) |
1% |
-12% |
||||
|
Stock option expense |
(681,064) |
(677,416) |
(691,688) |
1% |
-2% |
||||
|
Investment loss |
(315,176) |
(217,941) |
(282,520) |
45% |
12% |
||||
|
Impairment loss |
(4,629,851) |
(867,186) |
- |
nm |
nm |
||||
|
Restructuring costs |
(1,623,114) |
(4,133) |
803 |
nm |
nm |
||||
|
Income before tax |
(6,652,580) |
(337,379) |
1,743,184 |
nm |
nm |
||||
|
Income taxes |
417,744 |
(143,960) |
493,225 |
nm |
nm |
||||
|
Net income after tax |
(6,234,837) |
(481,339) |
2,236,409 |
nm |
nm |
||||
|
KEY PERFORMANCE INDICATORS (excluding North America) |
|||||||||
|
Q2 - 2009 |
Q1 - 2009 |
Q2 - 2008 |
Q2 2009 vs Q1 2009 |
Q2 2009 vs Q2 2008 |
|||||
|
Total active e-wallet users in quarter (1) |
95,492 |
92,757 |
100,760 |
3% |
-5% |
||||
|
E-wallet revenue per active e-wallet user |
$ 112 |
$ 119 |
$ 130 |
-6% |
-14% |
||||
|
Daily sign ups |
1,022 |
1,023 |
993 |
0% |
3% |
||||
|
Total customers (at period end) |
1,534,816 |
1,442,815 |
1,187,812 |
6% |
29% |
||||
|
Average daily receipts from customers |
$ 475,266 |
$ 396,413 |
$ 418,047 |
20% |
14% |
||||
|
Total customer receipts |
$ 43,249,166 |
$35,677,694 |
$ 38,042,306 |
21% |
14% |
||||
|
1. Active e-wallet user is defined as a consumer whose e-wallet account balance has changed during the quarter. The change in balance may be due to adding, removing, transferring or receiving funds. nm not meaningful |
|||||||||
Related Shares:
Paysafe Group