Interim Results
Auxinet PLC
19 September 2002
Auxinet Interim results for the six months to 30 June 2002
• Good progress in the first six months towards the expectation of becoming both
profitable and cash flow positive in the course of 2002
• Interim losses reduced to £276,000 from £1.99m (before goodwill amortisation)
on continuing business.
• DataCash processed 8.6m transactions in the first six months of 2002 compared
with 3.6m in first six months of 2001
• Introduction of the first on-line paperless Direct Debit product from a
Payment Service Provider
• Company forecast to be cash positive in second half
• We expect September to be profitable, before goodwill amortisation, and cash
generative
David Bailey, Chairman, said ' In September we confidently expect to cross the
line into profitability (before goodwill amortisation)......we also expect to
become cash generative which is a significant milestone in the Company's history
........We are exploring strategies to accelerate our rate of growth, without
incurring a significant increase in our cost base'
For further information please contact:
David Bailey, Chairman 07836 258558
or
Keith Butcher, Finance Director 0870 7274760.
AUXINET INTERIM STATEMENT
6 months to 30 June 2002
The first six months of 2002 saw the Auxinet group make good progress towards
its expectations of becoming both profitable and cash flow positive in the
course of 2002. First half revenues rose to £1.24m and losses, before
amortisation of goodwill, were reduced to £276,000 from £1.99m on continuing
business.
Overheads were reduced significantly, and we believe that the current business
infrastructure will support substantial growth at minimal additional cost.
Following sizeable increases in peak demand from our betting merchants we
invested in further system enhancements and have increased our capacity to in
excess of 100m transactions per month. The architecture is capable of further
capacity increase at very modest expense.
DataCash processed some 8.6m transactions in the first half, up from 3.6m in the
first half of 2001, and 5.6m in the second half of 2001. We have continued to
develop new products that not only support our current merchant base, but also
provides new market opportunities. This included the first on-line paperless
direct debit provided by a PSP (Payment Service Provider). These are beginning
to yield revenues, and the real benefit is expected to come through in 2003. We
have continued to build our quality merchant base, and continue to explore
commercial opportunities in the business-to-business area.
Since June the company has continued to trade well:
In September we confidently expect to cross the line into profitability (before
goodwill amortisation). Given the nature of the underlying business dynamics,
the company should continue to grow both revenues and profits.
In September we also expect to become cash generative, which is a significant
milestone in the Company's history, and to be cash positive for the second half.
We are exploring strategies to accelerate our rate of growth, without incurring
a significant increase in our cost base.
David Bailey
Chairman
19 September 2002
Auxinet plc
Consolidated profit and loss account
(unaudited)
For the 6 months ended 30 June 2002
Restated
6 months ended 6 months ended Year ended
30 June 30 June 31 December
2002 2001 2001
£000 £000 £000
Note
Turnover
Continuing operations 1,244 1,029 2,073
Discontinued operations - 1,081 971
------------ ------------ ------------
1,244 2,110 3,044
Administrative expenses
Amortisation of goodwill (988) (988) (1,975)
Reduction in provision for national
insurance on share
option gains 2 8 139 157
Severance payments - - (112)
Other (1,540) (4,919) (7,714)
------------ ------------ ------------
(2,520) (5,768) (9,644)
Operating loss
Continuing operations (1,276) (3,012) (6,170)
Discontinued operations - (646) (430)
------------ ------------ ------------
(1,276) (3,658) (6,600)
Interest receivable and similar income 12 34 65
Amounts written off investments - - (310)
Interest payable and similar charges - (3) (3)
------------ ------------ ------------
Loss on ordinary activities before (1,264) (3,627) (6,848)
taxation
Tax on loss on ordinary activities - - -
------------ ------------ ------------
Loss on ordinary activities after taxation (1,264) (3,627) (6,848)
Dividends - - -
------------ ------------ ------------
Retained loss for the period (1,264) (3,627) (6,848)
======= ======= =======
Basic and diluted loss per share 4 (2.91) (9.60) (16.96)
Diluted Earnings per Share 0 0
0 0
Adjusted basic and diluted loss per share 4 (0.65) (7.35) (12.18)
All amounts relate to continuing
activities.
There were no recognised gains or losses other than those shown in
the profit and loss account.
There are no differences between historical cost profits and losses
and those shown above.
Auxinet plc
Consolidated balance sheet (unaudited)
As at 30 June 2002 Restated
As at As at As at
30 June 30 June 31 December
2002 2001 2001
£000 £000 £000
Fixed assets
Intangible assets 15,249 17,225 16,237
Tangible assets 252 2,222 312
Investments 170 520 210
------------ ------------ ------------
15,671 19,967 16,759
------------ ------------ ------------
Current assets
Debtors 513 1,069 728
Cash at bank and in hand 748 453 951
------------ ------------ ------------
1,261 1,522 1,679
------------ ------------ ------------
Creditors
Amounts falling due within one year (1,161) (2,081) (1,466)
------------ ------------ ------------
Net current assets/(liabilities) 100 (559) 213
------------ ------------ ------------
Total assets less current liabilities 15,771 19,408 16,972
Creditors
Amounts falling due after more than one year - - -
Provisions for liabilities and charges (517) (33) (525)
------------ ------------ ------------
Net assets 15,254 19,375 16,447
======= ======= =======
Capital and reserves
Called up share capital 436 379 432
Share premium account 9,509 7,452 9,442
Share scheme reserve 4 19 19
Merger reserve (124) (124) (124)
Other reserve 18,889 18,889 18,889
Profit and loss account (13,461) (7,240) (12,211)
------------ ------------ ------------
Equity shareholders' funds 15,254 19,375 16,447
======= ======= =======
Auxinet plc
Consolidated cash flow statement (unaudited)
For the 6 months ended 30 June 2002 Restated
6 months 6 months
ended 30 ended 30 Year ended 31
June June December
2002 2001 2001
£000 £000 £000
Net cash outflow from operating activities Note (5) (296) (1,620) (3,885)
------------ ------------ ------------
Returns on investments and servicing of finance
Interest received 12 34 65
Interest paid - (3) (3)
Interest element of finance lease rental payments - (4) -
Net cash inflow from returns on investments
------------ ------------ ------------
and servicing of finance 12 27 62
------------ ------------ ------------
Capital expenditure and financial investment
Purchase of tangible fixed assets (30) (988) (277)
Sale of tangible fixed assets - - 35
Decrease/(increase) in investment loans 40 (50) (50)
------------ ------------ ------------
Net cash inflow/(outflow) from capital expenditure and 10 (1,038) (292)
financial investments
------------ ------------ ------------
------------ ------------ ------------
Net cash outflow before management of liquid resources (274) (2,631) (4,115)
and financing
Management of liquid resources
Decrease in short term bank deposits 404 2,526 1,837
------------ ------------ ------------
Net cash inflow from management of liquid resources 404 2,526 1,837
------------ ------------ ------------
Financing
Capital element of finance lease rental payments - (13) (58)
Issue of Ordinary Share Capital including premium net of - - 2,027
expenses
Exercise of share options 71 17 18
------------ ------------ ------------
Net cash inflow from financing 71 4 1,987
------------ ------------ ------------
------------ ------------ ------------
Increase/(decrease) in cash in the period 201 (101) (291)
======= ======= =======
Notes
1. Basis of preparation
The results for the six months ended 30 June 2002 and the comparative
figures for the six months ended 30 June 2001 are unaudited. They have
been prepared on accounting bases and policies that are consistent with
those used in the preparation of the financial statements of the Group
for the year ended 31 December 2001.
The financial information contained in this report does not constitute
statutory accounts within the meaning of Section 240 of the Companies
Act 1985 (as amended). The results for the year ended 31 December 2001
were reported on by the auditors and received an unqualified report and
contained no statement under Section 237(2) or (3) of the Companies Act
1985 (as amended). Full accounts have been delivered to the Registrar of
Companies and are available on request.
Continuing operations relate entirely to the electronic payments
business, which remains as the principal activity of the group. The
discontinued operations relate to the recruitment business, which the
group exited in August 2001.
2. Exceptional item
The exceptional item in 2002 relates to a release in provisions of £8,000
representing national insurance contributions on share option gains.
3. Restatement of 6 months ended 30 June 2001
The comparative results for the six months ended 30 June 2001 have been
restated to take account of the change in accounting policy as reported in
the accounts for the year ended 31 December 2001. This is to reflect the
directors belief that software development costs of the group's core
business should be expensed as they are incurred.
The effect of the change in accounting policy is to decrease the reported
operating profit for the six months to June 2001 by £927,000, which has been
presented for comparative purposes only.
4. Earnings per share
Basic and diluted loss per share for the six months ended 30 June 2002 have
been calculated on the basis of the loss after taxation for the period of
£1,264,000 and the average number of shares in issue during the period of
43,515,260.
The adjusted loss per share figure is calculated on the loss before
administrative items based on the same weighted average number of shares in
issue.
5. Reconciliation of operating loss to operating cash flows
Six months Six months Year
ended 30 June ended 30 June ended 31
2002 2001 December 2001
£000 £000 £000
Operating loss (1,276) (2,731) (6,600)
Amortisation 988 988 1976
Depreciation 89 176 351
Loss on sale of fixed assets 1 - 166
Decrease in debtors 215 836 1,177
Decrease in creditors (305) (750) (1,307)
Decrease in provision for national (8) (139) (157)
insurance on share option gains
Increase in provision for creditors 510
Net cash outflow from operating ------------ ------------ -----------
activities
(296) (1,620) (3,885)
------------ ------------ -----------
(6) Analysis of Net Funds
At Cash Flow At
1 January 2002 £000 30 June 2002
£000 £000
Cash in hand and at bank 39 201 240
Short term bank deposits 912 (404) 508
------------ ------------ ------------
951 (203) 748
------------ ------------ ------------
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