Interim Results

RNS Number : 3704S

Datacash Group PLC

09 September 2010

 



EMBARGOED UNTIL 7.00am ON THURSDAY 9^th SEPTEMBER 2010

DATACASH GROUP PLC ('DataCash' or 'the Company')

INTERIM RESULTS

FOR THE SIX MONTHS

ENDED 30 JUNE 2010

 

9 September 2010

DataCash Group Plc: DATA / Index: AIM / Sector: Support Services

DataCash Group Plc ('the Company')

INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2010

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 2010.

 

Overview:

·      Revenues increased to £19.2m (June 2009: £18.0m)

·      Adjusted pre-tax profits*, increased to £8.25m (June 2009: £7.53m)

·      Adjusted* earnings per share increased to 6.5p (June 2009: 5.9p)

·      Cash balances of £19.5m (December 2009: £18.6m)

* Before goodwill amortisation and impairment and foreign exchange gains on deferred consideration.

For further information please contact:

DataCash Group PLC

Carly Smith                                       Tel: [phone]
Marketing & Communications                Email: [e-mail]

David Bailey                                      Tel:+ 44 (0)20 7421 8451

Non-Executive Deputy Chairman           Mob:[phone]

Paul Burton                                        Tel:[phone]

Finance Director                                  E-mail: [e-mail]

Website: www.datacash.com               General enquiries Tel: [phone]

About DataCash  

DataCash is one of the leading European payment service providers, offering a single interface that provides e-commerce merchants with the ability to process secure payments across the world. DataCash also develops and provides outsourced electronic payment solutions, fraud prevention, alternative payment options, back office reconciliation and solutions for merchants selling via multiple channels. The company has a leading fraud solutions and technology platform.

DataCash Group Plc

Interim Report & Accounts for the six months ended 30 June 2010

Operating Review

The Board of DataCash is pleased to report on another satisfactory performance for the six month period to 30 June 2010. Headline revenues increased by 7% to £19.2m (June: 2009 £18.0m). Adjusted Group pre-tax profit (before amortisation and impairment of goodwill and foreign exchange gains on deferred consideration payments) rose by 9.7% to £8.25m and Adjusted earnings per share grew by 11% to 6.5p per share.

The continued strength of the Rand has put pressure on our cost base due to our substantial support operation in Cape Town. Despite this the Group has been able to improve operational profit margins to 41.9% (June 2009: 40.7%).

The Group continues to generate cash, and as at 30 June, cash balances were £19.5m (£18.6m as at 31 December 2009), approximately 21.1p a share.

As set out in the announcement made on 19 August 2010, the Boards of directors of MasterCard and DataCash have reached an agreement on the terms of a recommended cash offer of 360 pence per DataCash share for the entire issued and to be issued share capital of DataCash Group plc, to be made by a wholly owned subsidiary of MasterCard.

It is intended that the acquisition will be implemented by way of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006.

Ashley Head
Chairman

9^th September 2010

Datacash Group PLC
Condensed Consolidated Statement of Comprehensive Income
For the period ended 30 June 2010
												6 months ended 30 June					6 months ended 30 June									Year ended 31 Dec
												2010 Unaudited					2009 Unaudited									2009 Audited
								Note				£000					£000									£000
Revenue									2			19,192					18,009									36,887
Administrative expenses												(11,157)					(10,677)									(20,967)
Operating profit before impairment and amortisation												8,035					7,332									15,920
Impairment and amortisation									2			(3,323)					(5,136)									(8,619)
Total operating profit												4,712					2,196									7,301
Finance Income												271					224									727
Finance Cost - notional interest on deferred consideration												(13)						(43)									(49)
Foreign exchange gains on deferred consideration												36					282									156
Share of (loss)/profit from joint ventures												(40)					12									(15)
Profit before taxation												4,966					2,671									8,120
Taxation									6			(1,389)					(1,187)									(2,901)
Profit for the period												3,577					1,484									5,219
Other comprehensive income:
Exchange differences on translation of overseas operations												(1,192)					(1,983)									(940)
Other comprehensive income for the period												(1,192)					(1,983)									(940)
Total comprehensive income for the period												2,385					(499)									4,279
Profit attributable to: Owners of the parent												3,538					1,472									5,153
Non controlling interest												39					12									66
Profit for the period												3,577					1,484									5,219
Total comprehensive income attributable to: Owners of the parent												2,346					(511)									4,213
Non controlling interest												39					12									66
Total comprehensive income for the period												2,385					(499)									4,279
Basic earnings per share									7			3.86		p			1.59					p				5.62			p
Diluted earnings per share									7			3.84		p			1.59					p				5.59			p

DataCash Group PLC
Condensed Consolidated Balance Sheet
As at 30 June 2010
		30 June		30 June		31 December
		2010  Unaudited		2009  Unaudited		2009 Audited
	Note	£000		£000		£000
Non current assets
Intangible assets		7,567		13,526		10,879
Goodwill	4	55,041		54,512		55,887
Property, plant and equipment		1,808		2,231		2,012
Investments in joint ventures		33		99		72
Investments		4,181		3,902		4,181
		68,630		74,270		73,031
Current assets
Trade and other receivables		5,952		3,910		6,123
Cash and cash equivalents	8	19,497		13,785		18,583
		25,449		17,695		24,706
Total assets		94,079		91,965		97,737
Current liabilities
Trade and other payables		(3,163)		(3,348)		(3,698)
Current tax liabilities		(2,114)		(1,587)		(2,744)
Provisions - deferred consideration	10	(735)		(1,617)		(1,592)
		(6,012)		(6,552)		(8,034)
Net current assets		19,437		11,143		16,672
Non current liabilities
Deferred tax liability		(1,771)		(3,110)		(2,620)
Provisions - deferred consideration	10	(465)		-		(333)
Other liabilities		(26)		(44)		(26)
		(2,262)		(3,154)		(2,979)
Total liabilities		(8,274)		(9,706)		(11,013)
Net assets		85,805		82,259		86,724
Capital and reserves
Share capital	11	925		923		923
Share premium account		11,164		10,986		10,986
Own Shares	11	(1,303)		(1,512)		(1,512)
Foreign currency translation reserve		1,903		2,052		3,095
Share option reserve		1,692		1,356		1,502
Merger reserve		63,603		63,603		63,603
Retained earnings		7,821		4,078		7,301
Equity attributable to owners of the parent Non controlling interest	12	85,805 -		81,486 773		85,898 826
Total equity		85,805		82,259		86,724

DataCash Group PLC
Condensed Consolidated Cash Flow Statement
For the period ended 30 June 2010			6 months		6 months		Year
			Ended		Ended		Ended
			30 June		30 June		31 December
	Note		2010 Unaudited		2009 Unaudited		2009 Audited
			£000		£000		£000
Net cash inflow from operations	9		8,354		7,992		15,442
Interest received			271		224		727
Tax paid			(2,868)		(3,068)		(4,115)
Net cash inflow from operating activities			5,757		5,148		12,054
Cashflow from investing activities
Acquisition of subsidiaries (net of cash acquired)			-		(2,378)		(2,378)
Payment of deferred consideration	10		(1,589)		(3,928)		(4,676)
Investments			-		-		(279)
Purchase of property, plant and equipment			(256)		(386)		(680)
Capitalised development expenditure			(261)		(231)		(874)
Net cash outflow from investing activities			(2,106)		(6,923)		(8,887)
Cashflow from financing activities
Acquisition of non controlling interest	12		(1,182)		-		-
Net proceeds from issue of share capital	11		181		-		-
Equity dividends paid			(1,605)		(1,285)		(1,743)
Net cash outflow from financing activities			(2,606)		(1,285)		(1,743)
Net cash inflow/(outflow) for the period			1,045		(3,060)		1,424
Cash and cash equivalents at start of the period	8		18,583		16,641		16,641
Exchange (losses)/gains on cash and cash equivalents			(131)		204		518
Cash and cash equivalents at the end of the period	8		19,497		13,785		18,583

DataCash Group plc

Condensed Consolidated Statement of Changes in Equity 

Unaudited	Share  capital	Share premium account	Own  shares	Foreign currency translation reserve	Share option  reserve	Merger  reserve	Retained earnings	Total	Non controlling interest	Total  equity
	£000	£000	£000	£000	£000	£000	£000	£000	£000	£000
At 1 January 2010	923	10,986	(1,512)	3,095	1,502	63,603	7,301	85,898	826	86,724
Comprehensive income
Profit for the period	-	-	-	-	-	-	3,538	3,538	39	3,577
Other comprehensive income:
Exchange differences on translation of overseas operations	-	-	-	(1,192)	-	-	-	(1,192)	-	(1,192)
Total other comprehensive income	-	-	-	(1,192)	-	-	-	(1,192)	-	(1,192)
Total comprehensive income for the year	-	-	-	(1,192)	-	-	3,538	2,346	39	2,385
Transactions with owners
Share-based payments	-	-	-	-	190	-	-	190	-	190
Issue of ESOT shares	-	-	209	-	-	-	(209)	-	-	-
Issue of shares	2	178	-	-	-	-	-	180	-	180
Dividends paid	-	-	-	-		-	(1,605)	(1,605)	-	(1,605)
Total contributions by and distributions to owners	2	178	209	-	190	-	(1,814)	(1,235)	-	(1,235)
Changes in ownership interests of subsidiary not resulting in loss of control:
Purchase of non controlling interest	-	-	-	-	-	-	(1,204)	(1,204)	(865)	(2,069)
Total transactions with owners	2	178	209	-	190	-	(3,018)	(2,439)	(865)	(3,304)
At 30 June 2010	925	11,164	(1,303)	1,903	1,692	63,603	7,821	85,805	-	85,805
At 1 January 2009	923	10,986	(1,512)	4,035	1,365	63,603	3,891	83,291	-	83,291
Comprehensive income
Profit for the year	-	-	-	-	-	-	5,153	5,153	66	5,219
Other comprehensive income:
Exchange differences on translation of overseas operations	-	-	-	(940)	-	-	-	(940)	-	(940)
Total other comprehensive income	-	-	-	(940)	-	-	-	(940)	-	(940)
Total comprehensive income for the year	-	-	-	(940)	-	-	5,153	4,213	66	4,279
Transactions with owners
Share-based payments	-	-	-	-	137	-	-	137	-	137
Dividends paid	-	-	-	-	-	-	(1,743)	(1,743)	-	(1,743)
Total contributions by and distributions to owners	-	-	-	-	137	-	(1,743)	(1,606)	-	(1,606)
Changes in ownership interests of subsidiary not resulting in loss of control:
Purchase of non controlling interest	-	-	-	-	-	-	-	-	760	760
Total transactions with owners	-	-	-	-	137	-	(1,743)	(1,606)	760	(846)
At 31 December 2009	923	10,986	(1,512)	3,095	1,502	63,603	7,301	85,898	826	86,724

	Share  capital	Share premium account	Own  shares	Foreign currency translation reserve	Share option  reserve	Merger  reserve	Retained earnings	Total	Non controlling interest	Total  equity
	£000	£000	£000	£000	£000	£000	£000	£000	£000	£000
At 1 January 2009	923	10,986	(1,512)	4,035	1,365	63,603	3,891	83,291	-	83,291
Comprehensive income
Profit for the period	-	-	-	-	-	-	1,472	1,472	12	1,484
Other comprehensive income:
Exchange differences on translation of overseas operations	-	-	-	(1,983)	-	-	-	(1,983)	-	(1,983)
Total other comprehensive income	-	-	-	(1,983)	-	-	-	(1,983)	-	-
Total comprehensive income for the period	-	-	-	(1,983)	-	-	1,472	(511)	12	(499)
Transactions with owners
Share-based payments	-	-	-	-	(9)	-	-	(9)	-	(9)
Dividends paid	-	-	-	-	-	-	(1,285)	(1,285)	-	(1,285)
Total contributions by and distributions to owners	-	-	-	-	(9)	-	(1,285)	(1,294)	-	(1,294)
Changes in ownership interests of subsidiary not resulting in loss of control:
Minority interest arising on business combinations	-	-	-	-	-	-	-	-	760	760
Total transactions with owners	-	-	-	-	(9)	-	(1,285)	(1,294)	760	(534)
At 30 June 2009	923	10,986	(1,512)	2,052	1,356	63,603	4,078	81,486	772	82,258

Notes to the Unaudited Condensed Financial Information

For the 6 months to 30 June 2010

1.     Basis of Preparation

This Report for the 6 months ended 30 June 2010 was approved by the directors on 8 September 2010.  The report has been prepared under the historical cost convention as modified to include the revaluation of available-for-sale financial assets, on a going concern basis and in accordance with International Accounting Standard (`IAS') 34 `International Financial Reporting'.

Except as detailed below, the current and the comparative 6 months to June have been prepared using accounting policies and practices consistent with those adopted in the accounts for the year ended 31 December 2009 but are unaudited and are also consistent with those which will be adopted in the 2010 Annual Report and Accounts, which will be in accordance with International Financial Reporting Standards ("IFRS") as adopted by the EU and those parts of the Companies Act 2006 that remain applicable to companies reporting under IFRS.

Basis of new and revised standards

The following standards and interpretations have been applied in these financial statements:-

IFRS 2        Share-based payment (amendment)

IFRS 3        Business Combinations (Revised 2008)

IFRS 5        Non-current Assets held for Sale and Discontinued Operations (amendment)

IFRS 8        Operating Segments (amendment)

IAS 1          Presentation of Financial Statements (amendment)

IAS 7          Statement of Cash Flows (amendment)

IAS 17        Leases (amendment)

IAS 18        Revenue (amendment)

IAS 27        Consolidated and Separate Financial Statements (Revised 2008)

IAS 28        Investments in Associates

IAS 31        Investments in Joint Ventures

IAS 36        Impairment of Assets (amendment)

IAS 38        Intangible Assets (amendment)

IAS 39        Eligible Hedged Items (amendment)

IAS 39        Financial Instruments: Recognition and Measurement (amendment)

IFRS 2        Group Cash-settled Share-Based Payment Transactions (amendment)

IFRIC 9       Reassessment of Embedded Derivatives (amendment)

IFRIC 16      Hedges of a Net Investment in a Foreign Operation

IFRIC 17      Distributions of Non-cash Assets to Owners

IFRIC 18      Transfers of Assets to Customers

The directors consider the adoption of new and revised standards and interpretations as appropriate has had no material impact on the financial statements, except for IAS 27 (revised) and IFRS 3 (revised) as detailed in note 12.

The financial information contained in this Report does not constitute statutory accounts as defined by Section 434 of the Companies Act 2006.

The figures for the year ended 31 December 2009 have been extracted from the statutory accounts, which have been filed with the Registrar of Companies.  The audit report was unqualified, did not include references to matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

Copies of this announcement are available from the company's website, www.datacash.com.

2. Operating segments

Information regarding the Group's reportable segments is presented below.  All income in the period is derived from the rendering of outsourced payment processing services.

Period ended 30 June 2010	Datacash Services Limited	DataCash Limited		Eurocom-merce		Easydebit		Third Man		Inter-segment		Total
	£000	£000		£000		£000		£000		£000		£000
Segment revenue	8,526	6,746		1,390		1,601		1,040		(111)		19,192
Segment profit	4,618	2,528		356		356		329		(152)		8,035
Impairment	-	-		-		-		-		-		-
Amortisation	(1,726)	(361)		(286)		(308)		(642)		-		(3,323)
Share of operating loss in joint venture												(40)
Finance Income												271
Finance costs												(13)
Foreign exchange gains on deferred consideration												36
Profit before tax												4,966
Segment assets	43,843	58,843		3,784		7,950		4,953		(45,804)		73,569
Elimination of balances due from parent												5,819
Cash held by parent												10,259
Investments												4,181
Unallocated assets												251
Total assets												94,079
Segment liabilities	19,813	22,029		5,099		239		1,305		(45,804)		2,681
Deferred consideration												1,200
Deferred taxation												1,771
Unallocated liabilities												2,622
Total liabilities												8,274

Period ended 30 June 2009	Datacash Services Limited	DataCash Limited		Eurocom-merce		Easydebit		Third Man		Inter-segment		Total
	£000	£000		£000		£000		£000		£000		£000
Segment revenue	8,083	6,463		1,117		1,575		771		-		18,009
Segment profit/(loss)	4,736	2,422		(77)		261		49		(59)		7,332
Impairment	-	-		(1,569)		-		-		-		(1,569)
Amortisation	(2,184)	(227)		(297)		(323)		(536)		-		(3,567)
Share of operating profit in joint venture												12
Finance Income												224
Finance costs												(43)
Foreign exchange losses on deferred consideration												282
Profit before tax												2,671
Segment assets	62,890	18,778		3,919		7,829		4,260		(9,372)		88,305
Elimination of balances due from parent												(6,769)
Cash held by parent												6,127
Investments												3,902
Unallocated assets												400
Total assets												91,965
Segment liabilities	5,724	2,432		5,438		490		209		(9,372)		4,921
Deferred consideration												1,617
Deferred taxation												3,111
Unallocated liabilities												57
Total liabilities												9,706

Year ended 31 December 2009	Datacash Services Limited	DataCash Limited		Eurocom-merce		Easydebit		Third Man		Inter-segment		Total
	£000	£000		£000		£000		£000		£000		£000
Segment revenue	16,948	13,176		2,174		3,130		1,698		(239)		36,887
Segment profit	9,119	5,758		117		661		265		-		15,920
Impairment	-	-		(1,566)		-		-		-		(1,566)
Amortisation	(3,912)	(581)		(611)		(665)		(1,284)		-		(7,053)
Share of operating loss in joint venture												(15)
Finance Income												727
Finance costs												(49)
Foreign exchange gains on deferred consideration												156
Profit before tax												8,120
Segment assets	59,398	21,639		4,142		9,099		3,843		(5,485)		92,636
Elimination of balances due from parent												(9,405)
Cash held by parent												9,972
Investments												4,180
Unallocated assets												354
Total assets												97,737
Segment liabilities	2,399	2,417		5,748		719		420		(5,485)		6,218
Deferred consideration												1,925
Deferred taxation												2,620
Unallocated liabilities												250
Total liabilities												11,013

3.   Dividends

	6 months ended 30 June 2010		6 months ended 30 June 2009		Year ended 31 December 2009
	£000		£000		£000
Ordinary:
Final paid for the year ended 31 December 2008 1.4p	-		1,284		1,284
Interim dividend paid in respect of the year ended 31 December 2009 - 0.5p	-		-		459
Second interim dividend paid in respect of the year ended 31 December 2009 - 1.75p	1,605		-		-
	1,605		1,284		1,743

4.	Goodwill
													Goodwill on
													Consolidation
													£000
	Cost
	At 1 January 2009													76,788
	Reduction in deferred contingent consideration													(202)
	Additions													266
	Exchange differences													(2,038)
	As at 30 June 2009													74,814
	Increase in deferred contingent consideration													924
	Exchange differences													695
	As at 31 December 2009													76,433
	Exchange differences													(1,290)
	At 30 June 2010													75,143
	Aggregate impairment
	At 1 January 2009													19,116
	Impairment													1,566
	Exchange differences													(380)
	As at 30 June 2009													20,302
	Exchange differences													244
	As at 31 December 2009													20,546
	Exchange differences													(444)
	At 30 June 2010													20,102
	Carrying amount
	At 1 January 2009													57,672
	At 30 June 2009													54,512
	At 31 December 2009													55,887
	At 30 June 2010													55,041

5.   Adjusted earnings reconciliation

	6 months ended 30 June 2010		6 months ended 30 June 2009		Year ended 31 Dec 2009
	£000		£000		£000
Profit before taxation per consolidated statement of comprehensive income	4,966		2,671		8,120
Adjustments:
-  Impairment and amortisation	3,323		5,136		8,619
-  Foreign exchange gain on deferred consideration	(36)		(282)		(156)
Adjusted profit before taxation	8,253		7,525		16,583
Taxation per consolidated statement of comprehensive income	(1,389)		(1,187)		(2,901)
Tax effect of adjustments detailed above	(840)		(920)		(1,755)
Adjusted taxation	(2,229)		(2,107)		(4,656)
Adjusted profit for the period	6,024		5,418		11,927

Adjusted profit attributable to: Owners of the parent	5,985		5,406		11,861
Minority interest	39		12		66
	6,024		5,418		11,927

The Directors believe that the adjusted profit for the period and the adjusted earnings per share figure assists in the presentation of the group's underlying performance.

6.   Taxation

The group's effective tax rate for the period based on profit before taxation per the consolidated statement of comprehensive income is 28.0% (6 months to 30 June 2009: 44.4%, Full year 2009: 35.7 %).

The group's effective tax rate for the period based on the adjusted profit before taxation, as detailed in note 5 above, is 27.0% (6 months to 30 June 2009: 28.0%, Full year 2009: 28.1%).

7.   Earnings per Share

The basic and diluted earnings per share is calculated using the profit for the year as set out in the statement of comprehensive income.  The adjusted earnings per share is calculated using the adjusted profit as detailed in note 5 above.

Basic earnings per share has been calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the period, determined in accordance with IAS 33 Earnings per share.

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares in issue on the assumption of conversion of all the potentially dilutive ordinary shares for which all the conditions have been met.

Weighted average number of 1p ordinary shares in issue during the year is set out below:	6 months ended 30 June 2010		6 months ended 30 June 2009		Year ended 31 Dec 2009
	Number		Number		Number
For basic earnings per share	91,751,923		91,712,490		91,712,490
Dilutive effect of share options	346,449		473,906		546,397
For diluted earnings per share	92,098,372		92,186,396		92,258,887
Basic earnings per share	3.86 p		1.61 p		5.62 p
Diluted earnings per share	3.84 p		1.60 p		5.59 p
Adjusted basic earnings per share	6.55 p		5.89 p		12.93 p
Adjusted diluted earnings per share	6.50 p		5.86 p		12.86 p

8. Analysis of net funds

	At 1 January 2010	Cashflow	At 30 June 2010
	£000	£000	£000
Cash and cash equivalents	17,275	1,040	18,315
Restricted cash held in escrow	1,308	(126)	1,182
	18,583	914	19,497

Restricted cash held in escrow relates to amounts payable under deferred consideration agreements.

9. Reconciliation of profit for the period to net cash inflow from operating activities

	6 months ended 30 June 2010		6 months ended 30 June 2009	Year ended 31 December 2009
	£'000		£'000	£'000
Profit for the period		3,577	1,484	5,219
Taxation		1,389	1,187	2,901
Finance income		(271)	(224)	(727)
Finance costs		13	43	49
Impairment and amortisation of goodwill and intangibles		3,323	5,136	8,619
Depreciation		494	571	1,149
Loss from sale of property, plant and equipment		-	-	20
Loss/(Profit) on joint ventures		40	(12)	15
Share option charge		190	(9)	137
Exchange movements		(36)	(282)	(156)
Decrease in trade and other payables		(534)	(1,439)	(1,109)
Decrease/(increase) in trade and other receivables		169	1,537	(675)
Net cash inflow from operations		8,354	7,992	15,442

10.	Deferred Consideration
	Deferred consideration is payable in respect of the acquisitions of ExperCash GmbH (formerly Easydebit GmbH) on 9 September 2008 and the non controlling interest of Datacash Fraud Services Limited on 29 March 2010.
	Details of the movements in the deferred consideration during the period are as follows:
								6 months ended 30 June 2010			6 months ended 30 June 2009		Year ended 31 December 2009
								£000			£000		£000
	At the start of the period							1,925			5,986		5,986
	Paid in year							(1,589)			(3,928)		(4,676)
	Exchange differences							(36)			(282)		(156)
	Acquisition of non controlling interest							887			-		-
	Notional interest charge							13			43		49
	(Reduced)/increased consideration							-			(202)		722
	At the end of the period							1,200			1,617		1,925
	Current							735			1,617		1,592
	Non-current							465			-		333
								1,200			1,617		1,925

11.

Share Capital

During the 6 month period 164,768 (June 2009 and December 2009: nil) share options were exercised for  total cash consideration of £180,472 (June 2009 and December 2009: £nil). As a result the company issued 164,768 1p shares and recognised a share premium of £178,825. Also during the period 81,166 (June 2009 and December 2009: nil) nil cost share options were exercised for £nil cash consideration.  These options were satisfied by the issue of 81,166 1p ordinary shares by the Datacash Group Plc Employee Share Ownership Trust ("ESOT").  These shares were originally acquired by the ESOT for £209,000.  This deficit has been deducted from retained earnings.

12.

Purchase of non-controlling interest in Datacash Fraud Services Limited

The Group completed the purchase of the non-controlling interest in Datacash Fraud Services Limited effective 29 March 2010. Based on the revised International Accounting Standard 27 'Consolidated and Separate Financial Statements' (IAS 27), which was adopted by the Group in the period, this transaction was accounted for in full as an equity transaction and not as a business combination. Therefore no additional goodwill or intangible assets were recorded.

		£000
Cash consideration		1,182
Deferred contingent consideration (see note 10)		887
		2,069
Elimination of non controlling interest		(865)
Reduction in retained earnings		1,204

INDEPENDENT REVIEW REPORT TO DATACASH GROUP PLC

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the interim financial report for the six months ended 30 June 2010 which comprises the condensed consolidated statement of comprehensive income, the condensed consolidated balance sheet, the condensed consolidated cash flow statement, the condensed consolidated statement of changes in equity and the related explanatory notes.  We have read the other information contained in the interim financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. Our review work has been undertaken so that we might state to the Company those matters we are required to state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our review work, for this report, or for the conclusions we have formed.

Directors' Responsibilities

The interim financial report, is the responsibility of, and has been approved by the directors.  The directors are responsible for preparing and presenting the interim financial report in accordance with the AIM Rules for Companies.

As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards and International Financial Reporting Interpretations Committee pronouncements as adopted by the European Union.  The condensed set of financial statements included in this interim financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting" as adopted by the European Union.

Our Responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the interim financial report based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom.  A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.  A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the interim financial report for the six months ended 30 June 2010 is not prepared, in all material respects, in accordance with International Accounting Standard 34 "Interim Financial Reporting" as adopted by the European Union and the AIM Rules for Companies.

 

 

Baker Tilly UK Audit LLP

Chartered Accountants

2 Bloomsbury Street

London, WC1B 3ST

8 September 2010

 

END

 

 

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