Preliminary Final Report

Results

A$ '000

Revenue

Down

45.1%

to

$42,808

Profit after tax

Up

>100%

to

$39,159

Profit after tax attributable to members

Up

>100%

to

$39,011

Dividends (distributions)

Amount per security

Franked amount per security

Current period

Interim dividend declared

Final dividend paid

Nil ¢

Nil ¢

0%

0%

Previous corresponding period

Interim dividend declared

Final dividend paid

Nil ¢

¢

0%

0%

Record date for determining entitlements to the dividend.

N/A

Brief explanation of the figures above

The consolidated entity achieved sales revenue for the period of $42.8M (2010 $78.0M) - a decrease of 45.1%. This decrease in revenue was forecast and was a consequence of the completion of the sale of the USP business and assets to Oracle on August 3 2010.

The EBITDA profit was $52.2M (2010 EBITDA loss $20.6M). The net result of the consolidated entity for the full year ended 30 June 2011 was a profit after tax and minority interest for the period of $39.2M (2010 loss after tax and minority interest $32.3M). Profit per share was 19.8 cents (2010: loss per share: 16.5 cents).

In accordance with the group's accounting policies, development expenditure incurred during the period of $1.4M (2010: $2.2M) was capitalised in the Statement of Financial Position. This expenditure related to internally generated software comprising the HomeSend platform.

Foreign exchange losses for the year totalled $1.5M (2010: Foreign exchange loss of $3.0M).

The operating cash flow for the period was a net outflow of $9.6M primarily resulting from the settlement of termination payments to departing employees. Total cash flow for the period was a net inflow of $58.7M with net proceeds received of $73.3M (net of disposal related costs) following the disposal of the USP business and assets. Cash at 30 June 2011 was $60.8M.

Subsequent Events

Claim from Oracle

On 26 May 2010, eserv Global Limited entered into a conditional agreement to sell its USP assets and undertakings to Oracle Australia Pty Limited. The sale was completed on 3 August 2010. The total proceeds on sale were $103.0 million of which $79.4 million were received on 4 August 2010 and the balance of $23.6 million is held in escrow in an interest bearing account for a period of 2 years from completion date. $11.8 million of the sales proceeds excluding accrued interest income held in escrow was due for release on 3 August 2011 and the remaining balance of sales proceeds of $11.8 million excluding interest is due to be released from escrow on 3 August 2012.

On 30 July 2011 eServGlobal received notification from Oracle claiming that it has or anticipates incurring losses in connection with three alleged joint customer billing issues and is entitled to be indemnified by eServGlobal pursuant to the transaction agreements in connection with these losses. Oracle has claimed against the escrow fund in connection with these losses for the amount of $11.5 million.

eServGlobal strongly disagrees with the claims made and considers these claims largely unsubstantiated. eServGlobal has lodged an objection and intends to vigorously defend these claims.

The second and final escrow payment of $11.8 million excluding interest is due to be released by the escrow agent in August 2012. This balance is also subject to indemnification provisions within the transaction agreements. However, at the date of this report, the Directors are not aware of any other matter or circumstance other than that referred to above that has arisen since the end of the financial year that would affect the full receipt of the second and final escrow payment.

Shareholder Distribution

On 8 August 2011, the Company's shareholders approved a return to shareholders after the completion of the sale of the Company's USP assets to Oracle.

On 23rd August 2011 a total of $0.29 per share was distributed by way of a capital return of $0.16854 per share and a special dividend of $0.12146 per share (franked amount $0.083 per share).

Year Ended

30 June 2011

$'000

Year Ended

30 June 2010

$'000

Revenue

42,808

78,015

Cost of sales

(19,452)

(43,427)

Gross profit

23,356

34,588

Gain on disposal of business

69,340

-

Interest income

3,975

-

Research and development expenses

(5,311)

(9,992)

Sales and marketing expenses

(8,755)

(13,908)

Administration expenses

(30,432)

(31,262)

52,173

(20,574)

Amortisation expense

(5,493)

(6,877)

Depreciation expense

(1,377)

(2,685)

45,303

(30,136)

Finance costs

(162)

(355)

Profit/(Loss) before tax

45,141

(30,491)

Income tax expense

(5,982)

(1,795)

Profit/(Loss) for the period

39,159

(32,286)

Other comprehensive (loss) income

Exchange differences arising on the translation of foreign operations

(1,070)

(5,813)

Total comprehensive income/(loss) for the period

38,089

(38,099)

Profit/(Loss) attributable to:

Equity holders of the parent

39,011

(32,443)

Non controlling interest

148

157

39,159

(32,286)

Total comprehensive income/(loss) attributable to:

Equity holders of the parent

37,952

(38,229)

Non controlling interest

137

130

38,089

(38,099)

Profit/(Loss) per share:

Basic (cents per share)

19.8

(16.5)

Diluted (cents per share)

19.8

(16.5)

30 June 2011

$'000

30 June 2010

$'000

Current Assets

Cash and cash equivalents

60,820

2,225

Trade and other receivables

33,722

31,143

Inventories

279

853

Current tax assets

90

4,897

94,911

39,118

Assets classified as held for sale

-

27,528

Total Current Assets

94,911

66,646

Non-Current Assets

Property, plant and equipment

1,841

3,071

Deferred tax assets

4,937

1,907

Goodwill

6,499

6,820

Other receivables

12,208

-

Other intangible assets

8,012

12,727

Total Non-Current Assets

33,497

24,525

Total Assets

128,408

91,171

Current Liabilities

Trade and other payables

16,195

13,349

Borrowings

-

5,794

Current tax payables

6,741

535

Provisions (employee benefits)

7,024

4,123

Other (Deferred revenue)

2,122

5,268

32,082

29,069

Liabilities directly associated with assets classified as held for sale

-

750

Total Current Liabilities

32,082

29,819

Non-Current Liabilities

Deferred tax liabilities

1,068

4,083

Provisions (employee benefits)

448

505

Total Non-Current Liabilities

1,516

4,588

Total Liabilities

33,598

34,407

Net Assets

94,810

56,764

Equity

Issued capital

123,946

123,946

Reserves

(2,390)

(1,566)

Accumulated Losses

(26,770)

(65,781)

Parent entity interest

94,786

56,599

Non controlling interest

24

165

Total Equity

94,810

56,764

Issued Capital $'000

Foreign Currency Translation Reserve

$'000

Employee equity-settled benefits Reserve

$'000

Retained Earnings (Accumu-lated Losses) $'000

Attributable to owners of the parent

$'000

Non controlling Interest

$'000

Total $'000

Consolidated

Balance at 1 July 2010

123,946

(2,463)

897

(65,781)

56,599

165

56,764

Profit/(Loss) for the period

-

-

-

39,011

39,011

148

39,159

Exchange differences arising on translation of foreign operations

-

(1,059)

-

-

(1,059)

(11)

(1,070)

Total comprehensive income for the period

-

(1,059)

-

39,011

37,952

137

38,089

Distribution to non-controlling interest

-

-

-

-

-

(278)

(278)

Equity settled payments

-

-

235

-

235

-

235

Balance at 30 June 2011

123,946

(3,522)

1,132

(26,770)

94,786

24

94,810

Balance at 1 July 2009

123,946

3,323

1,088

(33,338)

95,019

35

95,054

Profit/(Loss) for the period

-

-

-

(32,443)

(32,443)

157

(32,286)

Exchange differences arising on translation of foreign operations

-

(5,786)

-

-

(5,786)

(27)

(5,813)

Total comprehensive (loss) for the period

-

(5,786)

-

(32,443)

(38,229)

130

(38,099)

Equity settled payments

-

-

(191)

-

(191)

-

(191)

Balance at 30 June 2010

123,946

(2,463)

897

(65,781)

56,599

165

56,764

Year Ended

30 June 2011

$'000

Year Ended

30 June 2010

$'000

Receipts from customers

49,739

108,521

Payments to suppliers and employees

(60,164)

(122,651)

Interest and other finance cost paid

(162)

(355)

Income tax refunded

1,022

1,444

Net cash used in operating activities

(9,565)

(13,041)

Cash Flows From Investing Activities

Proceeds from disposal of assets, net of transaction cost

73,335

-

Interest received

2,947

-

Payment for property, plant and equipment

(580)

(2,214)

Software development costs

(1,364)

(2,195)

Net cash provided by (used in) investing activities

74,338

(4,409)

Cash Flows From Financing Activities

Dividends paid

(278)

-

Net cash (used in) financing activities

(278)

-

Net Increase/(decrease) In Cash and Cash Equivalents

64,495

(17,450)

Cash At The Beginning Of The Period

(3,569)

14,135

Effects of exchange rate changes on the balance of cash held in foreign currencies

(106)

(254)

Cash and Cash Equivalents At The End Of The Period

60,820

(3,569)

6.1 Notes to the consolidated statement of cash flows

2011$'000

2010$'000

a) Reconciliation of cash

Cash and cash equivalents

60,820

2,225

2011$'000

2010$'000

b) Reconciliation of profit (loss) for the year to net cash flows from operating activities

Profit/(Loss) for the year

39,159

(32,286)

Interest received

(3,975)

-

Depreciation of non-current assets

1,377

2,685

Amortisation of non-current assets

5,493

6,877

Loss/(profit) on disposal of non-current assets

533

62

Equity settled share-based payments

235

(191)

Gain on disposal of business

(69,340)

-

Increase/(decrease) in current income tax balances

11,013

2,076

Increase/(decrease) in deferred tax balances

(6,045)

(2,934)

Changes in net assets and liabilities, net of effects from acquisition of businesses:

- (Increase)/decrease in assets:

- Receivables

8,889

32,166

- Inventories

574

(231)

Increase/(decrease) in liabilities:

- Trade payables

2,791

(18,594)

- Provisions

2,914

(1,229)

- Other liabilities

(3,183)

(1,442)

(9,565)

(13,041)

2011$'000

2010$'000

c) Gain on disposal of business

Consideration received (i)

103,055

-

Net assets disposed

(27,620)

-

Disposal related costs

(6,095)

-

69,340

-

(i) Consideration received

Cash consideration received

79,439

-

Deferred sales proceeds (note 11)

23,616

-

Total consideration received

103,055

-

June 2011

June 2010

Net tangible assets per security

40.8 cents

5.3 cents

Amount

Amount per security

Franked amount per security at 30% tax

Amount per security of foreign source dividend

Date paid/ payable

Interim dividend: Current year

Nil

N/A

N/A

N/A

N/A

Previous year

Nil

N/A

N/A

N/A

N/A

Final dividend paid in respect of previous financial year:

Current period:

Final dividend

Previous corresponding period:

Final dividend

Nil

Nil

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

Name of entity

Percentage of ownership interest held at end of period

Aggregate share of net profit (loss) contributed to the reporting entity

Current

period

Previous corresponding period

Current period

$A'000

Previous corresponding period

$A'000

Total

N/A

N/A

N/A

N/A