Final Results

Auxinet PLC 08 April 2003 Auxinet PLC FINAL RESULTS Year ended 31 December 2002 Highlights â€¢ 2002 Operating Loss reduced to Â£391,000 (2001: Â£4.195m) before goodwill amortisation â€¢ Profitable since September 2002 â€¢ Cash generative since September 2002 â€¢ Forecasting sustainable profitability and cash generation in 2003 â€¢ Recommending changing name to DataCash Group plc at AGM â€¢ Seeking permission to buy back up to 10% of shares David Bailey, Chairman of Auxinet plc, said: 'The Board's stated objective of underlying sustainable, profitable, cash generative growth has been realised since September 2002. In 2003 we expect to capitalise on our strengths, our world class technology, experienced staff and impressive client base...........we will do it with the additional confidence of sustainable profitability and growing cash balances. The Board will recommend changing the name of the Group to DataCash Group plc... and will seek authority to buy back up to 10% of the issued ordinary share capital'. For further information contact: David Bailey (Chairman): 0870 7274760 Keith Butcher (Finance Director): 0870 7274760 CHAIRMAN'S STATEMENT 2002 was the first full year where the Group was solely focused on our payments system, DataCash, now the only active trading company within the Group. DataCash's turnover grew by 30% from Â£2.07m to Â£2.70m. In September 2002 the company reached the significant milestone of becoming both profitable and cash generative. Group losses, before goodwill amortisation, were significantly reduced to Â£391,000 (2001: Â£4.87m). The second half produced a loss of Â£114,000. Our revenue derives from a combination of annual licensing fees and monthly transaction fees. The transaction fees rise as the volume of transactions grows. In the last year the number of transactions processed grew strongly to 18 million. Since DataCash's inception in September 1997 there has been growth in both transactions and revenues in every quarter (adjusting for one-off receipts). The underlying business model provides the framework for the Board to have confidence that this trend will continue. The Board's stated objective of underlying sustainable, profitable, cash generative growth has been realised since September 2002. We reduced our overheads significantly from 2001 levels and our costs for the current year are expected to remain at around the same levels as in 2002. Both the organisation and systems have the capacity to support further significant growth in transactions, which is expected to result in increased profits. The Group has no borrowings. Cash balances fell from Â£951,000 to Â£667,000 in the year. Importantly, cash balances grew from September 2002 and we expect to be significantly cash generative in 2003. In 2002 we invested in systems and in extending our product range. As previously reported, we have increased the capacity of the system to a theoretical 100 million transactions per month, approximately 50 times current volumes. During the year we introduced a number of new products and are pleased that we met our customers' needs for the support of new and additional payment methods. Our customer base is changing, moving away from new Internet companies towards more established high volume customers. We are pleased that a number of international customers have selected DataCash as their payment solution provider in the UK, reflecting our leadership in this market. We are seeing large customers, who hitherto had their own in-house systems, now moving to outsource this service due to the growing complexities and cost of providing and supporting, a payments service. This is providing opportunities to move from purely e-commerce 'Card Holder Not Present' (CNP) transactions to physical, 'Card Holder Present' (CHP), point of sale transactions. This CHP market is estimated to be 30-40 times larger than the CNP market. It is a different market, but one we believe will contribute to our growth in the future. It is encouraging that our staff have all been with us for a considerable time, providing a stable base from which to grow. I would like to take this opportunity to thank them for their loyalty and commitment through 2002. In 2003 we expect to be able to capitalise further on our strengths; our world class technology, experienced staff and impressive client base. This year we will do it with the additional confidence of sustainable profitability and growing cash balances. We look forward to reporting on progress. At the 2003 Annual General Meeting the Board will recommend changing the name of the Group to DataCash Group plc. The name 'Auxinet' was an umbrella name under which to trade both the payments and the recruitment businesses. As we are now purely involved in payment processing it seems sensible to change the Group name to reflect that. We also intend to seek authority to potentially buy back up to 10% of the Company's issued ordinary share capital. David Bailey Chairman Auxinet plc Consolidated Profit and Loss Account For the year ended 31 December 2002 Year ended Year ended 31 December 31 December 2002 2001 Â£000 Â£000 Turnover Continuing operations 2,703 2,073 Discontinued operations - 971 Total Turnover 2,703 3,044 Administrative expenses Amortisation of Goodwill (1,975) (1,975) National insurance on share option credit - 157 Severance payments - (112) Other operating expenses (3,113) (7,714) ------------ ------------ Total administrative expenses (5,088) (9,644) ------------ ------------ Operating loss Continuing operations (2,385) (6,170) Discontinued operations - (430) ------------ ------------ Total operating loss (2,385) (6,600) Interest receivable and similar income 19 65 Amounts written off investments - (310) Interest payable and similar charges - (3) ------------ ------------ Loss on ordinary activities before and after taxation (2,366) (6,848) ------------ ------------ Basic and diluted loss per share (5.44)p (16.96)p Adjusted basic and diluted loss per share (0.90)p (12.18)p Consolidated Balance Sheet As at 31 December 2002 31 December 31 December 2002 2001 Â£000 Â£000 Fixed assets Intangible assets 14,262 16,237 Tangible assets 170 312 Investments 160 210 ------------ ------------ 14,592 16,759 ------------ ------------ Current assets Debtors 641 728 Cash at bank and in hand 667 951 ------------ ------------ 1,308 1,679 ------------ ------------ Creditors Amounts falling due within one year (959) (1,466) ------------ ------------ Net current assets 349 213 ------------ ------------ Total assets less current liabilities 14,941 16,972 Provisions for liabilities and charges (789) (525) ------------ ------------ 14,152 16,447 ------------ ------------ Capital and Reserves Called up share capital 436 432 Share premium account 9,509 9,442 Share scheme reserve 4 19 Merger reserve (124) (124) Other reserve 18,889 18,889 Profit and loss account (14,562) (12,211) ------------ ------------ Equity shareholders' funds 14,152 16,447 ------------ ------------ Company Balance Sheet As at 31 December 2002 31 December 31 December 2002 2001 Â£000 Â£000 Fixed assets Tangible assets 22 20 Investments 472 597 ------------ ------------ 494 617 ------------ ------------ Current assets Debtors 9,922 9,072 Cash at bank and in hand 551 918 ------------ ------------ 10,473 9,990 ------------ ------------ Creditors Amounts falling due within one year (126) (304) ------------ ------------ Net current assets 10,347 9,686 ------------ ------------ Total assets less current liabilities 10,841 10,303 Provisions for liabilities and charges (784) - ------------ ------------ 10,057 10,303 Capital and Reserves ------------ ------------ Called up share capital 436 432 Share premium account 9,509 9,442 Share scheme reserve 4 19 Profit and loss account 108 410 ------------ ------------ Equity shareholders' funds 10,057 10,303 ------------ ------------ Consolidated Cash Flow Statement For the year ended 31 December 2002 Year ended Year ended 31 December 31 December 2002 2001 Â£000 Â£000 Net cash outflow from operating activities (357) (3,885) Returns on investments and servicing of finance Interest received 19 65 Interest paid - (3) Net cash inflow from returns on investments ------------ ------------ and servicing of finance 19 62 ------------ ------------ Capital expenditure and financial investment Purchase of tangible fixed assets (67) (277) Sale of tangible fixed assets - 35 Decrease/(Increase) in investment loans 50 (50) ------------ ------------ Net cash outflow from capital expenditure and financial investments (17) (292) ------------ ------------ Net cash outflow before management of liquid resources and financing (355) (4,115) ------------ ------------ Management of liquid resources Decrease in short term bank deposits 364 1,837 ------------ ------------ Net cash inflow from management of liquid resources 364 1,837 ------------ ------------ Financing Capital element of finance lease rental payments - (57) Issue of ordinary share capital including premium (net of expenses) - 2,027 Exercise of share options 71 18 ------------ ------------ Net cash inflow from financing 71 1,988 ------------ ------------ Increase/(decrease) in cash in the year 80 (291) ------------ ------------ Reconciliation of Net Cash Flow to Movement in Net Funds For the year ended 31 December 2002 Year ended Year ended 31 December 31 December 2002 2001 Â£000 Â£000 Increase/(decrease) in cash in the year 80 (291) Cash outflow from lease financing - 57 Cash outflow from management of liquid resources (364) (1,837) ------------ ------------ Movement in net funds (284) (2,071) Opening net funds 951 3,022 ------------ ------------ Closing net funds 667 951 ------------ ------------ NOTE The above financial information does not constitute statutory accounts as defined by section 240 of the Companies Act 1985. It is an extract from the 2002 financial statements which have not yet been filed with the Registrar of Companies. The Auditors' Report, dated 07 April 2003, on the financial statements for the year ended 31 December 2002, which received an unqualified opinion, does not contain a statement under section 237(2) or (3) of the Companies Act 1985. The comparative information is an extract from the statutory accounts for the financial year ended 31 December 2001. Those accounts, on which the Auditors issued an unqualified opinion, which does not contain a statement under either section 237(2) or (3) of the Companies Act 1985, have been filed with the Registrar of Companies. A copy of the full accounts will be sent to shareholders on the Register Of Members as at 07 April 2003 or can be obtained from the Secretary, Auxinet plc, Descartes House, 8 Gate Street, London WC2A 3HP ANNUAL GENERAL MEETING The Company's AGM will be held on Wednesday, 28 May 2003 at 12.00 noon at Descartes House, 8 Gate Street, London WC2A 3HP ================================================================================ This information is provided by RNS The company news service from the London Stock Exchange

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