Interim Results
Datacash Group PLC
05 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 to
announce its half yearly results for the six months to 30 June 2006. These
figures 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 option
gain 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 has
integrated well and is making good progress towards its goal of being the
leading bank independent global Payment Service Provider for e-commerce."
For further information, please contact:
DataCash Group plc
Andrew Dark - Chief Operating Officer
Keith Butcher - Commercial Director 0870 72 74 76 0
MJ2 Business Communications
Stewart Harris 020 7491 8003 / 07913 065 375
DATACASH GROUP PLC
INTERIM REPORT AND ACCOUNTS
FOR 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 which
show another strong performance by DataCash Group plc in the period to 30 June
2006. 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-tax
profits, before goodwill amortisation, national insurance provision on share
option gain and FRS20 charge on share options in issue ("Adjusted pre-tax
profits") 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 to
revenue 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 we
continue to be strongly cash generative. This represents the equivalent of
approximately 12.6p per share. We believe the strength of the balance sheet
leaves us well placed to take advantage of further opportunities for growth.
The first half saw continued good transaction volume growth from our core
Cardholder Not Present customers, with processed transaction volumes increasing
46% to 42.1m (2005: 28.8m), reflecting the growing penetration of broadband
services and the continued improvements in e-commerce offerings for online
shoppers. We processed over £3bn of value for our UK customers in the first half
of 2006 and we expect further growth in the second half.
We have reported in the past on our strategy of providing a comprehensive
payments product to our customers, and in particular, to offer a Cardholder
Present (Chip & PIN) service. Although this has taken a significant amount of
time and investment to develop, I am pleased to announce we are now processing
Cardholder Present transactions for some clients and particularly pleased the
Laura Ashley retail group has entered into an agreement with DataCash where we
will provide an outsourced payment processing service for their entire
operations. DataCash already provides payment processing
for Laura Ashley's online operations. This extended service will commence
shortly and we are negotiating a number of similar opportunities with other UK
retailers.
Towards the end of 2005 we began a major investment programme to gain formal
accreditation of compliance with Visa and MasterCard's Payment Card Industry
Data Security Standards (PCI DSS). I am delighted to report we completed this
major milestone in July. All retailers are required to be PCI DSS compliant and
we believe DataCash's outsourced service is attractive to customers looking to
mitigate the costs and time to market of compliance, including those who have
already deployed Chip and PIN solutions.
The Board is pleased with progress since the acquisition of PCS in June and the
opportunities this presents. Contracts have been signed with the first existing
DataCash customer for the PCS Risk Sentinel service and a number of other
customers 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 its
international customer profile and rich product and service offerings provide
considerable new opportunities to the enlarged group. The combination of the
DataCash and PCS payment infrastructure and risk management system is being used
to build a global payment service business we believe will provide unparalleled
choices of payment instruments, currencies and settlement to online customers
around the world. This project will take time and investment but we believe we
are in a strong position to deliver this ambition and look forward to reporting
on 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 has
integrated well and is making good progress towards its goal of being the
leading bank independent global Payment Service Provider for e-commerce.
As part of the integration process, Paul Burton has been appointed as Chief
Financial Officer for the Group (previously Managing Director SA) and Andrew
Dark has been appointed Chief Operating Officer for the Group (previously
Managing Director UK).
No interim dividend is being proposed (2005: Nil), although the Board expects to
recommend a final dividend for the year to 31 December 2006.
Ashley Head
Chairman
5 September 2006
Consolidated profit and loss account
For 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 share
option 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)p
Diluted 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 losses
For 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 sheet
As at 30 June 2006
Unaudited Unaudited
As at Restated Restated
30 June 30 June 31 December
2006 2005 2006
£'000 £'000 £'000
Fixed assets
Intangible assets 78,115 9,324 8,337
Tangible assets 908 168 161
Investments 192 - -
-----------------------------------------------
79,215 9,492 8,498
-----------------------------------------------
Current assets
Debtors 3,724 889 966
Debtors - deferred tax asset 31 1,141 522
Cash at bank and in hand 11,393 4,138 4,895
-----------------------------------------------
15,148 6,168 6,383
-----------------------------------------------
Creditors
Amounts 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 reserves
Called up share capital 907 448 449
Share premium account 10,148 9,766 9,811
Foreign currency translation reserve (287) - -
Share option reserve 1,060 20 26
Other reserves 94,553 18,765 18,765
Profit 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 statement
For 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 finance
Interest 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 investment
Purchase 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 disposals
Investment 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 resources
Increase 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)
------------------------------------------------
Financing
Exercise 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 funds
For 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 Statements
For 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 profits
and numbers of shares:
The adjusted profit/(loss) per share is based on the profit/(loss) after tax
before goodwill amortisation and exceptional items.
6 months 6 months Year ended
ended 30 ended 30 31 Dec 2005
June 2006 June 2005
£'000 £'000 £'000
Weighted average number of 1p
ordinary shares in issue during
the period
For basic earnings per share 52,423,711 44,778,180 44,816,905
Dilutive 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 1,782
Adjustment 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 1,975
Depreciation 87 51 102
Share option charge 21 20 26
Equity dividends paid - - (224)
Increase in debtors (2,267) (148) (224)
Increase/(decrease) in creditors 1,667 (101) 279
Increase 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 3,255
Short 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 26
Foreign 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 766
Investments 192
Debtors 2,419
Cash 6,422
Creditors (2,197)
Foreign Currency Translation Reserve 346
----------------
Net assets 7,948
----------------
Consideration
Fair value of shares issued 77,251
Share option charge 1,013
Acquisition 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 14,312
Prior 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 26
Transfer to other reserves 76,801 - -
Foreign currency translation adjustments (287) - -
Issue of share capital 795 16 62
Dividends 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 Exchange
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