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Trading Update

Wed, 7th Oct 2015 07:00

RNS Number : 4551B
Boxhill Technologies PLC
07 October 2015

7 October 2015

Boxhill Technologies plc

("Boxhill" or the "Company")

Trading Update

The Board of Boxhill, the payment software and lottery group, is pleased to provide a post year-end trading update. For the year to 31 July 2015 the Company anticipates to generate an operating profit of between £600,000 and £650,000 on revenues of between £2.0m and £2.1m, based on unaudited management figures. The Company expects to publish its audited annual report and accounts for the year to 31 July 2015 in November 2015. Revenues are expected to be 40-50% above last year, compared with previous management expectations of at least double. This has been due to certain contracted business falling into the new financial year that was anticipated to be in the year to 31 July 2015, which in turn has resulted in the current year getting off to a strong start. Operating profits continue to increase, not just compared with the year to 31 July 2014, but also comparing the second and first halves of the year to 31 July 2015.

HIGHLIGHTS

· Significant increase in channel sales partners

· Broadening spread of customers

· New casino games

Payments Division

The payments division has made progress in developing sales channel partners in the UK, Europe and Australia giving access to a diverse range of customers across all types of e-commerce. The board of Boxhill believe that the potential value of these customers is significant and it is hoped that the Company will realise a significant uplift in revenues without significant increase in costs during the current financial year.

Casino Cash Machines

The Casino Cash machines remain in redevelopment, implementing improvements based on the lessons from the pilot scheme which are taking a little longer than planned. Additionally, the funding model for the machines, now that the Company is profitable, will change to reflect the Company's stronger operational and financial position with the aim of improving the effect on cash flow and finding a solution that reflects shareholders' needs.

Lottery Division

Prize Provision Services Limited ("PPSL"), the Company's lottery operating subsidiary, continues to make progress with technology upgrades and the Company can now look forward to improving its performance on the new platform. PPSL is now making upgrades to its client administration area, which are due to be completed in Q4 this year, and introducing Paperless Direct Debit for player registrations across all customers following a successful trial of Direct Debit which commenced in July 2015. The introduction of Paperless Direct Debit will give an improved quality of service to PPSL clients and offers efficiency benefits to PPSL through the elimination of much of the paperwork and postage costs associated with Direct Debit. Telesales techniques can also be employed to help increase sales conversions.

Soccerdome

The Company is working with Nottingham Council to open 5 and 7-a-side pitches at the newly opened state-of-the-art Harvey Hadden Sports Village in Billborough, Nottingham ("HHSV"). The £16m redevelopment of HHSV is the largest single investment under Nottingham City Council's Leisure Transformation Programme.

Details of HHSV can be found at http://www.nottinghamcity.gov.uk/harveyhadden.

The Company is currently negotiating a joint venture to operate and finance the expansion of the Soccerdome business now that HHSV is open (the "JV"). The JV would remove the capital cost of financing the expansion of the site from the Company's balance sheet, while providing the Company's shareholders with an attractive return on its investment to date. The Company's proposed partner in the JV is a company controlled by James Rose, a substantial shareholder in the Company and a director of PPSL, so any transaction between Boxhill and the proposed JV partner is likely to constitute a related party transaction under the AIM Rules for Companies. Further details of the proposed JV are expected to be announced in October 2015.

Phil Jackson, Chief Executive, commented:

"Our work on improving profitability has clearly shown the results we wanted, and we continue to win new business, with the biggest opportunities achieved by partnering with larger organisations who do not have the technology or knowhow to deal with the more lucrative sectors in e-commerce, where we have the technology to help them access or improve their performance in these higher margin markets. Bringing on these new larger partners lead to some delays in contracted business going live, meaning that revenues coming on stream were later than planned.

Since the last update we have successfully integrated with two larger payment companies who have already delivered eight large customers, with the goal of adding one major customer per week. We also continue to win direct business.

In addition, new gaming opportunities are being developed including mobile slots games developed in conjunction with one of our customers, with an inbuilt payment and profit share system that encourages players to effectively become affiliates, creating a viral distribution network.

The team is working hard and I believe by concentrating on the fundamentals of improving profits, winning customers and carefully adding services we will deliver continuously improving results and, in turn, shareholder value."

For further information contact:

Boxhill Technologies PLC

020 7618 9000

Philip Jackson, CEO

Website www.boxhillplc.com

Allenby Capital Limited (Nomad & Broker)

020 3328 5656

Nick Harriss/Nick Athanas/James Reeve

Walbrook PR - Financial PR

020 7933 8780

Nick Rome/Sam Allen

boxhill@walbrookpr.com

This information is provided by RNS
The company news service from the London Stock Exchange
END
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