GlobalData Regulatory News (DATA)

6 May 2008 07:03

Datacash Group PLC06 May 2008 DataCash Group Plc: DATA / Index: AIM / Sector: Support Services DATACASH GROUP PLC ('DataCash' or 'the Group') FINAL RESULTS DataCash Group Plc, the AIM listed payments service provider, announces itsresults for the 12 months to 31 December 2007. Financial Highlights •Adjusted Group pre-tax profit* up 43% to £11.2m (2006: £7.8m) •Adjusted earnings per share of 9.4p (2006: 8.0p) •Group turnover increased by 25% to £20.45m (2006: £16.41m) •Cash balance of £17.90m** (19p per issued share) (2006 £15.28m - 17p per issued share) •Dividend payment increased by 40% to 1.4p per share recommended (2006: 1p) * before goodwill amortization and impairment, National Insurance provision on share option gain and exceptional items. ** including security deposits of £1.2m. Operational Highlights •Acquisition of Eurocommerce call centre solutions Limited to focus on airline and travel sector. •Transactions with a cash value of over £12bn processed through the Group's systems in 2006 (2006: £7.3bn). •Investment in key infra-structure projects on track and budget •Significant expansion in core service offer for 2008 and beyond •High profile, new contract wins and renewals from existing blue chip clients •Accelerated marketing efforts into the European, Asian and South American markets. •The Board looks forward to an interesting and exciting year in 2008. Contacts: Paul Burton Chief Finance Officer, DataCash Group Plc 0870 7274760Adrew Dark Chief Operating Officer, DataCash Group Plc 0870 7274760 Chairman's Statement 2007 was another successful year for DataCash Group. Revenues, profit and cashbalances all rose satisfactorily, and we implemented some significant technologyenhancements that will provide strong growth opportunities for 2008 and beyond.We also acquired a foothold in the airlines sector through the acquisition ofEurocommerce. In the year we grew revenues to £20.45m (2006 £16.41m); Adjusted Pre-tax Profitsto £11.2m (2006 £7.8m) and adjusted earnings per share from 8p to 9.4p. Havingpaid our first interim dividend of 0.3p in November, the Board is pleased toannounce an increased final dividend of 1.1p per share, making a total dividendincrease for the year of 40% to 1.4p (2006 1p). The Group has a strategy to provide the most comprehensive set of payment andrisk management solutions to both UK and international merchants, with aparticular focus on domestic and cross-border e-commerce. We made good progressin 2007 towards achieving this. The value of transactions processed in 2007, for the Group as a whole, rose tosome £12bn (2006: £7.3bn), which places us at the forefront of European paymentand risk service providers. Our range of products also sets us apart from ourcompetitors. Historically we offered our UK customers only a card processingsolution. Now, in addition to the e-commerce payment processing services, weprovide card holder present processing for leading UK high street retailers andsportsbook operators, middle and back office processing for international casinoand poker operators, risk management services for UK and internationale-commerce merchants, access to various alternative payment types such asPayPal, UKash and a wide range of e-wallets as well as international bankaccount management and reconciliation services for our customers. This providesa deeper and closer relationship with our customers and enables us to betterunderstand and service their individual needs. One of our objectives for 2007 was to offer the increasingly wide range ofservice offerings to all our customers, both present and putative, from a singletechnology platform. This required significant analysis and investment, but isnow being deployed, so that we can easily make available our wide range ofservices to all our clients, and allows us to quickly integrate futureacquisitions into our offering. The materially improved functionality that theintegration provides will, we believe, provide growth opportunities for manyyears to come. The Eurocommerce acquisition, announced in the Autumn, brought importantconnections to airlines and, in particular, the reservation and booking systemsthat airlines use. It also provided new connections to European banks and wellestablished financial instruments highly pertinent to our existing customers andprospects. Although it was a small acquisition, and is expected to beloss-making through 2008, we believe that the global opportunities in the travelmarket are very significant and that by utilising our skills in risk managementand in payment types other than credit and debit cards, we can become a globalleader in supplying this market sector. As a result of the uncompleted acquisition of NetGiro Systems AB, a Swedishbased Payment service provider, DataCash received an exceptional payment of£941,000, net of costs. The acquisition offered to provide both a European and aNorth American sales capability. We have since recruited a North American salesresource and the Eurocommerce acquisition has given us access to aninternationally focussed sales resource. We continue to explore acquisition opportunities in both geographic and verticalmarket sectors. We anticipate that most of the consideration for any deals islikely to come from our existing cash resources. Net Cash (including security deposits) as at December 2007 stood at £17.90m or19p per share (2006 £15.28m), after sizeable IT expenditure, share purchases into our Employee Share Ownership Trust as well as the initial Eurocommercepurchase consideration. However, the Group remains highly cash generative, and we expect cash balances(subject to any acquisition expenditure) to rise considerably in 2008. We aretherefore pleased to continue our progressive dividend policy with an overallincrease of 40% by announcing a final dividend of 1.1p per share. The prospects for DataCash for 2008 are good and the first quarter has matchedour expectations. Growth in transaction processing in 2007 increased by 28% atrend which has continued into 2008. We see the growth of e-commerce, both inthe UK and internationally, will continue to be strong, and that the continuedattempts from organised crime to use card fraud as a prime source of income willmaintain the heightened demand for our global Risk services offer. UK retailerscontinue to view the outsource of cardholder present payment services as anincreasingly attractive option and we believe the combined strength of ourdomestic and international product offering will see the Group maintain itsposition as one of the leading global solution providers of payment and riskservices and place it in a premium position to take advantage of the growth inall sectors. As reported previously, Gavin Breeze, the founder of DataCash, stepped down fromthe Board at the end of March, although he remains an active consultant to theGroup. The Board would like to express our thanks for his contributions. Andrew Dark, currently the Chief Operating Officer, will become the ChiefExecutive of the Group with effect from June 1st. Andrew joined the business inJanuary 2006 and has made significant contributions to the integration of ourPCS acquisition and the development of our technology platform. We are delightedthat he will take the lead in driving the Group towards achieving our goals. Ashley Head Chairman Adoption of IFRS DataCash Group Plc will be adopting International Financial Reporting Standardsas its primary accounting basis for the year ending 31 December 2007. As part ofthis transition, Datacash is presenting unaudited financial information preparedin accordance with IFRS for the year ended 31 December 2006 and for the yearended 31 December 2007. The principal changes to the Group's reported financial information under UKGAAP*** arising from the adoption of IFRS are as a result of: •the recognition of intangible assets from business combinations; •the related impairment of these intangible assets; and •the recognition of deferred tax assets and liabilities on a different basis. For the year ended 31 December 2007 the expected impact of the adoption of IFRSis to reduce profit attributable to equity shareholders by £5.02m, comprisingprincipally the amortisation and impairment of intangible assets, and to reducenet assets for the Group at 31 December 2007 from £90.82m to £77.96m. *** throughout this statement 'UK GAAP' means the accounting standards andframework in issue at 31 December 2006, which were applied to the financialstatements of the Group for the year ended 31 December 2006. 1. BASIS OF PREPARATION The financial information presented in this documentation has been preparedusing accounting policies consistent with International Financial ReportingStandards (IFRS) as adopted by the European Union and International Financial Reporting Interpretations Committee (IFRIC) interpretations that are applicablefor the year ending 31 December 2007 The financial information contained in this document does not constitutestatutory financial statements as defined by S240 of the Companies Act 1985.The figures for the year ended 31st December 2006 have been based on the auditedfinancial statements.Those financial statements which were prepared under UKGAAP have been reported on by the Group's auditors and delivered to theregistrar of companies. The audit report was unqualified, did not includereferences to matters to which the auditors drew attention by way of emphasiswithout qualifying their report and did not contain a statement under section237(2) or (3) of the Companies Act 2005. The disclosures required by IFRS 1 concerning the transition from UK GAAP toIFRS are given below The financial statements have been prepared under the historical cost basis. 2. FIRST TIME ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS The rules for first-time adoption of IFRS are set out in IFRS 1, which requiresthat the Group establishes its IFRS accounting policies at its date oftransition, 1 January 2006, and applies these prospectively. The standard allowsa number of optional exemptions on transition to help companies simplify themove to IFRS. The exemptions selected by the Group are set out below: (a) Business Combinations (IFRS 3) The Group has elected to apply IFRS 3 prospectively from the date of transitionto IFRS rather than to restate previous business combinations. (b) Share-based Payment The Group has previously adopted the provisions of FRS 20 'Share-based payment'in its financial statements for the year ended 31 December 2006. The provisionsof FRS 20 are in line with IFRS 2 and no changes to the comparative figures arerequired. The Group has adopted the exemption to apply IFRS 2 'Share-based payment' onlyto awards granted after 7 November 2002 that had not vested by 1 January 2006. (c) Presentation of financial information The layout of the primary financial information has been amended in accordancewith IAS 1 'Presentation of financial information' from that presented under UKGAAP. This format and presentation may require modification as practice and industry consensus develops. 3. SIGNIFICANT ACCOUNTING POLICIES The principal IFRS accounting policies adopted by the Group are set out below. (a) Basis of consolidation The consolidated financial statements incorporate the financial statements ofthe company and entities controlled by the company (its subsidiaries) for theyear ended 31 December 2007. Control is achieved where the company has the powerto govern the financial and operating policies of an investee entity so as toobtain benefits from its activities. Where necessary, adjustments are made to the financial statements ofsubsidiaries to bring the accounting policies used into line with those used bythe Group. All intra-Group transactions, balances, income and expenses areeliminated on consolidation. (b) Acquisition method of accountingThe cost of the acquisition is measured at the aggregate of the fair values, atthe date of exchange, of assets given, liabilities incurred or assumed, andequity instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree'sidentifiable assets, liabilities and contingent liabilities that meet theconditions for recognition under IFRS 3 are recognised at their fair value atthe acquisition date. (c) Merger method of accounting Under IFRS 1, the Group is not required to restate acquisitions or businesscombinations prior to the date of transition. Therefore, the Group is permittedto retain its historical merger accounting position in the consolidated accounts. (d) Goodwill Goodwill arising on consolidation represents the excess of the cost ofacquisition over the Group's interest in the fair value of the identifiableassets and liabilities of a subsidiary. Goodwill is initially recognised as anasset at cost and is subsequently measured at cost less any accumulatedimpairment losses. For the purpose of impairment testing, goodwill is allocated to each of theGroup's cash-generating units expected to benefit from the synergies of thecombination. Cash-generating units to which goodwill has been allocated aretested for impairment annually, or more frequently when there is an indicationthat the goodwill may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairmentloss is allocated first to reduce the carrying amount of any goodwill allocatedto the unit and then to the other assets of the unit pro rata on the basis ofthe carrying amount of each asset in the unit. An impairment loss is recognised immediately in the income statement and is not subsequently reversed. Goodwill arising on other acquisitions before the date of transition to IFRS hasbeen retained at the previous UK GAAP net book value subject to being testedfor impairment at that date. (e) Revenue recognition Revenue is measured at the fair value of the consideration received orreceivable and represents amounts receivable for services provided in thenormal course of business, net of discounts, VAT and other sales related taxes.Income is recognised when services are delivered to customers. (f) Operating profit Operating profit is stated after charging exceptional costs or income, butbefore finance income and finance costs. (g) Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciationand any provision for impairment. Cost comprises all costs that are directlyattributable to bringing the asset into working condition for its intended use. Depreciation is calculated to write down the cost of assets to their residualvalues on a straight-line basis over the following estimated useful economiclives: Leasehold improvements - Over the period of the lease Plant and machinery - 33% per annum Fixtures and fittings - 20% per annum No depreciation is provided on land. (h) Impairment of tangible and intangible assets excluding goodwill Tangible and intangible assets are reviewed for impairment whenever events orchanges in circumstances indicate that the carrying amount may not berecoverable. An impairment loss is recognised for the amount by which theasset's carrying amount exceeds its recoverable amount. The recoverable amountis the higher of an asset's fair value (less disposal costs) and value in use. Value in use is based on the present value of the future cash flows relating tothe asset. For the purpose of assessing impairment, assets are Grouped at thelowest levels for which there are separately identifiable cash flows (CashGenerating Units). (i) Intangible assets - arising on business combinations In accordance with IFRS 3 Business Combinations, goodwill arising onacquisitions is capitalised as an intangible asset. Other intangible assetsare also then identified and amortised over their useful economic lives. Examples of these are client contracts. Goodwill is not amortised. (j) Internally generated intangible assets - research and development expenditure Expenditure on research activities is recognized as an expense in the period inwhich it was incurred. An internally generated intangible asset arising from the development ofsoftware is recognized only if all of the following conditions have been met: • It is probable that the asset will create future economic benefits;• The development costs can be measured reliably;• Technical feasibility of completing the intangible asset can be demonstrated;• There is intention to complete the asset and use or sell it; and• Adequate technical, financial and other resources to complete the development and to use or sell the asset are available. Internally generated intangible assets are amortised over their estimated usefullives which is between three to six years. Where no internally generatedintangible asset can be recognized, development expenditure is charged to incomestatement in the period in which it is incurred. (k) Cash and cash equivalents Cash and cash equivalents include cash at bank and in hand and short-termdeposits with an original maturity period of three months or less. (l) Trade receivables Trade receivables are recognized initially at fair value and subsequentlymeasured at amortised cost using the effective interest rate method lessprovision for impairment. A provision for impairment of trade receivables is established where there is objective evidence that the Group will not be able tocollect all amounts due according to the original terms of the receivables.Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganization and default or delinquency inpayments are considered indicators that the trade receivable is impaired. When a trade receivable is uncollectible, it is written off against theprovision for trade receivables. Subsequent recoveries of amounts previouslywritten off are credited against selling and administrative expenses in theincome statement. (m) Trade payables Trade payables represent the amount of invoices received from suppliers forpurchases of goods and services for which payment has not been made. Tradepayables are recognised at fair value and subsequently measured at amortisedcost using the effective interest method. (n) Taxation Income tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on taxable profit for the year. Taxableprofit differs from profit as reported in the income statement because itexcludes items of income or expense that are taxable or deductible in otheryears and it further excludes items that are never taxable or deductible. TheGroup's liability for current tax is calculated using tax rates that have beenenacted or substantively enacted by the balance sheet date. Deferred tax is recognized on differences between the carrying amounts of theassets and liabilities in the financial statements and the corresponding taxbases used in the computation of taxable profit and is accounted for using the balance sheet liability method. Deferred tax liabilities are generallyrecognised for all taxable temporary differences. Deferred tax assets arerecognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilized. Suchassets and liabilities are not recognized if the temporary difference arisesfrom goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affectsneither the taxable profit nor accounting profit. Deferred tax liabilities are recognized for taxable temporary differencesarising on investments in subsidiaries and associates and interests in jointventures, except where the Group is able to control the reversal of thetemporary difference and it is probable that the temporary difference will notreverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at each balance sheetdate and reduced to the extent that it is no longer probable that sufficienttaxable profits will be available to allow all or part of the asset to berecovered. Deferred tax is calculated at the tax rates that are expected to apply in theperiod when the liability is settled or the asset realized based on the taxrates that have been enacted or substantively enacted at the balance sheet date.Deferred tax and current tax are charged or credited to profit and loss, exceptwhen it relates to items charged or credited directly to equity, in which casethe deferred tax is also dealt with in equity. Tax assets and liabilities are offset when there is a legally enforceable rightto set off current assets against current tax liabilities and when they relateto income tax levies by the same taxation authority and the Group intends tosettle its current tax assets and liabilities on a net basis. In recognizing income tax assets and liabilities, management makes estimates ofthe likely outcome of decisions by tax authorities on transactions and eventswhose treatment for tax purposes is uncertain. Where the financial outcome of such matters is different, or expected to be different, from previousassessments made by management, a change to the carrying value of income taxassets and liabilities will be recorded in a period in which such adetermination is made. The carrying values of income taxes and liabilities aredisclosed separately in the Consolidated Balance Sheet. (o) Foreign currency translation The individual financial statements of each Group entity are presented in thecurrency of the primary economic environment in which the entity operates (itsfunctional currency). For the purpose of the consolidated financial statements,the results and financial position of each entity are expressed in PoundsSterling, which is the functional currency of the company and presentationalcurrency for the consolidated financial statements. In preparing the financial statements of the individual entities, transactionsin currencies other than the entity's functional currency ("foreigncurrencies") are recorded at the rates of exchange prevailing on the dates ofthe transactions. At each balance sheet date, monetary items denominated inforeign currencies are retranslated at the rates prevailing on the balancesheet date. Non-monetary items carried at the fair value that are denominated inforeign currencies are retranslated at the rates prevailing on the date when thefair value was determined. Non-monetary items that are measured in terms ofhistorical cost in a foreign currency are not retranslated. Exchange differences arising on the settlement of monetary items and on theretranslation of monetary items, are included in profit and loss for theperiod. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in the profit and loss for the period exceptfor differences arising on the retranslation of non-monetary items in respectof which gains and losses are recognized directly in equity. For such non-monetary items, any exchange component of that gain or loss is also recognizeddirectly in equity. For the purpose of presenting consolidated financial statements, the assets andliabilities of the Group's foreign operations (including comparatives) areexpressed in Pounds Sterling using exchange rates prevailing on the balance sheet date. Income and expense items (including comparatives) are translated atthe average exchange rates for the period, in which case the exchange rates atthe dates of the transactions are used. Exchange differences arising, if any,are classified as equity and transferred to the Group's translation reserve. Goodwill and fair value adjustments arising on the acquisition of a foreignoperation are treated as assets and liabilities of the foreign operation andtranslated at the closing rate. When a foreign operation is partially disposed of or sold, exchange differencesthat were recorded in equity are recognized in the income statement as part ofthe gain or loss on sale. (p) Leasing An operating lease does not transfer the risk or rewards of ownership to theGroup. Rentals payable under operating leases are charged to income on astraight-line basis over the term of the original lease. Benefits received and receivable as an incentive to enter into an operating lease are also spread on astraight-line basis over the lease term. (q) Equity share-based employee remuneration The Group issues options to certain employees. The fair value of optionsgranted is recognised as an employee expense, with a corresponding increase inequity reserves. The fair value is recognised at the grant date and spread overthe period until the employees become unconditionally entitled to the options.The fair value of the options granted is measured using either the BlackScholes or Binomial option pricing model, taking into account the terms andconditions on which the options were granted. The amount recognised as anexpense is adjusted to reflect the actual number of share options expected tovest and adjusts for the effect of non-market-based vesting conditions. (r) Retirement benefit costs Contributions to the Group's defined contribution pension schemes are charged tothe income statement in the period in which they become payable. (s) Provisions Provisions are recognised when the Group has a present obligation as a result ofa past event, and it is probable that the Group will be required to settle thatobligation. Provisions are measured at the directors' best estimate of the expenditure required to settle the obligation at the balance sheet date, and arediscounted to present value where the effect is material. (t) Critical accounting estimates and judgments In preparing the Consolidated Financial Statements, management has to makejudgements on how to apply the Group's accounting policies and make estimatesabout the future. The critical judgements that have been made in arriving at theamounts recognized in the Consolidated Financial Statements and the key sourcesof estimation uncertainty that have a significant risk of causing a materialadjustment to the carrying value of assets and liabilities in the next financialyear, as discussed below: AcquisitionsWhen acquiring a business, we have to make judgements and best estimates aboutthe fair value of the assets, liabilities and contingent liabilities acquired.We seek appropriate competent and professional advice before making suchallocations. Impairment reviewsThe Group tests annually whether goodwill has suffered any impairment. Inaccordance with the accounting policy stated above. The recoverable amounts ofcash-generating units have been determined based on value-in-use calculations.These calculations require the use of estimates including discount rates andgrowth rates. The transition to international financial reporting standards ("IFRS") Key impacts of the transition to IFRS The analysis below sets out the most significant adjustments arising from the transition to IFRS. 1) Intangible assets Goodwill and acquired intangible asset amortisation IFRS 3 Business Combinations requires that, when businesses are acquired, anyintangible assets acquired within the business are valued separately andcapitalised as an intangible asset. Any residual difference between the consideration paid or payable and the net fair value of the identifiable assets,liabilities and contingent liabilities acquired is recognised as goodwill. IFRS 3 also requires that goodwill is not amortised but is instead subject to anannual impairment review, whereas intangible assets are amortised over theiruseful lives. The Group has recognised intangible assets on acquisition in relation tocontracts. The amount in the Group balance sheet in respect of all intangibleassets under IFRS was £58m at 31 December 2006. Under IFRS, these intangible assets are amortised over their useful lives. Management has assessed their useful lives and the effect of amortising theseassets was £15.6 m for the year ended 31 December 2006. Under IAS 36 Impairment of assets, the carrying values of all intangible assetsare reviewed annually for impairment on the basis stipulated in IAS 36 andadjusted to the recoverable amount. Typically, such a review will entail an assessment of the present value of projected returns from the asset. The amountof impairment charged to the income statement was £22m for the year ended 31December 2006. 2) Deferred and current taxes The scope of IAS 12 Income Taxes is wider than the corresponding UK GAAPstandards, and requires deferred tax to be provided on the majority oftemporary differences, rather than just on timing differences as under UK GAAP. In particular this has resulted in deferred tax assets and liabilities beingset up in respect of differences between the net book value and the tax base ofintangible assets. A deferred tax liability has been set up on creation of these intangibles and isreleased over the period over which the assets are amortised. The impact onthe income statement of changing elements of the liability is a charge £4.2 m for the year ended 31 December 2006. The deferred tax liability in respect ofintangibles stood at £4.4 m at 31 December 2006. The consolidated cash flow statement presented under IFRS presents substantiallythe same information as that required under UK GAAP. Datacash Group plc Consolidated IncomestatementFor the year ended 31December 2007 Continuing Operations Acquisitions Total Year Year Year Year ended ended ended ended 31 December 31 December 31 December 31 December 2007 2007 2007 2006 £000 £000 £000 £000 Revenue 19,989 462 20,451 16,405 Administrativeexpenses National insurance onshare option charge (191) - (191) (2)Share option charge (71) - (71) (34)Administrative expenses (9,380) (809) (10,189) (8,933) Total administrative expenses (9,642) (809) (10,451) (8,969) Operating profit beforeexceptional items 10,347 (347) 10,000 7,436 Exceptional items (5,022) (21,801) Total operating profit/(loss) 4,978 (14,365) Finance Income 910 351 Compensation for abortedacquisition (net of costs) 941 - Share of loss in jointventure (7) (6) Profit/(loss) beforetaxation 6,822 (14,020) Taxation (2,508) 174 Profit/(loss) on ordinaryactivities after taxation 4,314 (13,846) Basic earnings/(loss)per share 4.73 p (19.29) p Diluted earnings/(loss)per share 4.69 p (19.29) p Consolidated Balance Sheet As at 31 December 2007 31 December 31 December 2007 2006 £000 £000 Non current assets Intangible assets 14,193 15,143 Goodwill 51,517 47,818 Property, plant and equipment 1,790 1,000 Investments in joint ventures (13) (6) Investments - 163 Deferred tax assets 146 290 67,633 64,408 Current assets Trade and other receivables 6,443 8,380 Cash and cash equivalents 16,716 11,280 23,159 19,660 Total assets 90,792 84,068 Current liabilities Trade and other payables (5,635) (2,612) Current tax liabilities (1,734) (1,517) (7,369) (4,129) Net current assets 15,790 15,531 Non current liabilities (5,458) (4,579) Total liabilities (12,827) (8,708) Net assets 77,965 75,360 Capital and reserves Share capital 919 908 Share premium account 10,640 10,192 Own Shares (685) - Foreign currency translation reserve (224) (121) Share option reserve 1,777 1,524 Other reserve 94,676 95,116 Retained earnings (29,138) (32,259) Equity shareholders' funds 77,965 75,360 Consolidated Cash Flow StatementFor the year ended 31 December 2007 Year ended Year ended 31 December 31 December 2007 2006 £000 £000 Net cash inflow/(outflow) from operating activities Net cash inflow from operating activities 10,382 5,911 Interest Received 910 351Compensation for acquisition 941 -Tax Paid (2,890) (193) Net cash inflow from operating activities 9,343 6,069 Cashflow from investing activitiesAcquisition of subsidiaries (net of cash) (875) 694Investment in joint ventures (277) -Purchase of tangible fixed assets (1,220) (432)Purchase of intangible fixed assets (116) -Net cash inflow from investing activities (2,488) 262 Cashflow from financing activitiesNet proceeds from issue of share capital 459 391Redemption of share capital (685) -Equity dividends paid (1,193) (337)Net cash from financing activities (1,419) 54 Net cash inflow 5,436 6,385 Cash and cash equivalents at start of period 11,280 4,895 Cash and cash equivalents at the end of the period 16,716 11,280 DataCashGroup plc Consolidated Statement of Changes in EquityFor the year ended 31 December 2007 Share Share Foreign Share Own Other Retained Total Capital Premium Currency Option Shares Reserves earnings Equity Translation Reserve Reserve £000 £000 £000 £000 £000 £000 £000 £000At 1 January2006 449 9,811 - 34 - 18,765 (15,551) 13,508 Profit forthe period - - - - - (13,846) (13,846) Exchangedifferences ontranslation ofoverseasoperations - - (121) - - - (121) Totalrecognisedincome andexpense for2006 449 9,811 (121) 34 - 18,765 (29,397) (459) Share-basedpayments - - - 1,047 - - 1,047 Mergerreserveon acquisitionofsubsidiary - - - - 76,351 - 76,351 Tax Effectin Equity 443 (2,525) (2,082) Dividends paid - - - - - (337) (337) Issue of shares 459 381 - - - - 840 At 31December 2006 908 10,192 (121) 1,524 - 95,116 (32,259) 75,360 Profit forthe period - - - - - 4,314 4,314 Exchangedifferences ontranslation ofoverseasoperations - - (103) - - - (103) Totalrecognisedincome andexpense for2007 908 10,192 (224) 1,524 - 95,116 (27,945) 79,571 Share-basedpayments - - - 71 - - - 71 Tax Effectin Equity 182 182 Mergerreserveon acquisitionofsubsidiary - - - - - (440) - (440) Dividends paid - - - - - - (1,193) (1,193) Own shares - - - - (685) - - (685) Issue of shares 11 448 - - - - - 459 At 31December 2007 919 10,640 (224) 1,777 (685) 94,676 (29,139) 77,965 Earnings per Share From continuing operations The basic and diluted earnings per share is based on the profit on ordinaryactivities after tax of £4,314,000 (2006: £13,846,000 loss). The weightedaverage number of ordinary shares outstanding during the period used in thecalculation of basic loss per share was 91,195,129 (2006: 71,768,371). The fully diluted earnings per share, which assumes the full exercise of shareoptions, has been calculated on 91,862,448 (2006: 72,033,691) Ordinary Shares. An adjusted earnings per share figure is presented below. The directors believethat the adjusted earnings per share figure assists in the presentation of theGroup's underlying performance. The calculations of profit/(loss) per share are based on the following profitsand numbers of shares: The adjusted profit/(loss) per share is based on the profit/(loss) after taxbefore goodwill amortisation and exceptional items. Year ended 31 Year ended December 2007 December 2006 Weighted average number of 1p ordinary shares in issue during the period For basic earnings per share 91,195,129 71,768,371Share options 719,171 265,320 ---------- ----------For diluted earnings per share 91,914,300 72,033,691 ---------- ---------- Profit for the financial period £'000s £'000s Profit for adjusted earnings per share 9,598 7,991Amortisation of intangibles (5,022) (21,801)Share based payments expense (71) (34)NI on share option gains (191) (2) ---------- ----------Profit/(loss) for earnings per share 4,314 (13,846) ---------- ---------- Basic earnings per share 4.73 p (19.29) pDiluted earnings per share 4.69 p (19.29) p Headline basic earnings per share 10.52 p 11.13 pHeadline diluted earnings per share 10.44 p 11.13 p Basic earnings per share has been calculated by dividing the earningsattributable to ordinary shareholders by the weighted average number ofordinary shares in issue during the period, determined in accordance with IAS33Earnings per share. Diluted earnings per share is calculated by adjusting the weighted averagenumber of ordinary shares in issue on the assumption of conversion of all thepotentially dilutive ordinary shares for which all the conditions have been met. Headline earnings per share is calculated after adjusting earnings for sharebased payment expenses and National Insurance on share option gains. Datacash Group plcReconciliation ofConsolidated Balance SheetAs at 1 January 2006 Total Reported IFRS 3 IAS 12 Effect of Restated Under Business Income Transition under UK GAAP Combinations taxes to IFRS IFRS £000 £000 £000 £000 £000Non current assetsIntangible assets 8,337 - - 8,337Tangible assets 161 - 161Investments in joint ventures - - -Investments - - -Deferred tax asset 522 - 522 ------- --------- ------ ------- ------- 9,020 - - - 9,020 ------- --------- ------ ------- -------Current assetsDebtors 966 - 966Cash at bank and in hand 4,895 - 4,895 ------- --------- ------ ------- ------- 5,861 - - 5,861 ------- --------- ------ ------- -------Current liabilitiesAmounts falling due withinone year (1,225) 34 34 (1191)Current tax liabilities - (34) (34) (34) ------- --------- ------ ------- -------Net current assets 4,636 - - - 4,636 ------- --------- ------ ------- ------- Total assets less currentliabilities 13,656 - - - 13,656 Non-current liabilities (148) - (148) ------- --------- ------ ------- -------Net assets 13,508 - - - 13,508 ======= ========= ====== ======= ======= Capital and reservesCalled up share capital 449 - 449Share premium account 9,811 - 9,811Foreign Currency Translation - - -ReserveShare Option Reserve 34 - 34Other Reserves 18,765 - 18,765Profit and loss account (15,551) - - - (15,551) ------- --------- ------- ------- -------Total equity 13,508 - - - 13,508 ======= ========= ======= ======= ======= Reconciliation of Consolidated Balance SheetAs at 31 December 2006 Total Reported IFRS 3 IAS 12 Effect of Restated Under Business Income Transition under UK GAAP Combinations taxes to IFRS IFRS £000 £000 £000 £000 £000 Non current assetsIntangible assets - 15,143 - 15,143 15,143Goodwill 74,184 (30,766) 4,400 (26,366) 47,818Tangible assets 1,000 - 1,000Investments in joint (6) - (6)venturesInvestments 163 - 163Deferred tax asset 128 162 162 290 75,469 (15,461) 4,400 (11,061) 64,408 Current assetsTrade and other receivables 8,380 - 8,380Cash at bank and in hand 11,280 - 11,280 19,660 - - 19,660 Current liabilitiesTrade and other payables (4,129) 1,517 1,517 (2,612)Current tax liabilities - (1,517) (1,517) (1,517) Net current liabilities 15,531 - - - 15,531 Total assets less currentliabilities 91,000 (15,461) - (11,061) 79,939 Non-current liabilities (179) (4,400) (4,400) (4,579) Net assets 90,821 (15,461) (15,461) 75,360 Capital and reservesCalled up share capital 908 - 908Share premium account 10,192 - 10,192Foreign CurrencyTranslation (121) - (121)ReserveMerger Reserve - - -Share Option Reserve 1,081 443 443 1,524Other Reserves 95,116 - 95,116Profit and loss account (16,355) (15,904) - (15,904) (32,259) Total equity 90,821 (15,461) - (15,461) 75,360 Datacash Group plc Reconciliation of Consolidated Income StatementFor the 12 months ended 31 December 2006 Total Reported IFRS 3 Effect of Restated Under Business Transition under UK GAAP Combinations to IFRS IFRS £000 £000 £000 £000Revenue: Group andshare of joint ventures 16,750 16,750 Less: share of jointventure turnover (345) (345) Revenue 16,405 - - 16,405Administrativeexpenses (8,933) - (8,933)Share option charge (34) - (34)National Insuranceon share optioncharge (2) - (2)Total administrativeexpenses (8,969) - - (8,969) Operating profitbefore goodwill andexceptional items 7,436 - - 7,436 Goodwillamortisation (6,178) (15,623) (15,623) (21,801) Group operatingprofit 1,258 (15,623) (15,623) (14,365) Share of operatingloss in jointventure (6) - (6) Total operatingprofit 1,252 (15,623) (15,623) (14,371) Finance income 351 - 351 Compensation for - - -aborted acquisition(net of costs) Profit on ordinaryactivities beforetaxation 1,603 (15,623) (15,623) (14,020) Taxation (2,070) 2,244 2,244 174 Profit on ordinaryactivities aftertaxation (467) (13,379) (13,379) (13,846) Basicearnings/(loss) pershare (0.65) p (18.64) p (18.64) p (19.29) pDilutedearnings/(loss) pershare (0.65) p (18.64) p (18.64) p (19.29) p Notes to the consolidated cash flow statement Year ended 31 December 31 December 2007 2006 £000 £000 Profit for the year 4,314 (16,090)Taxation 2,508 2,070Finance Income (910) (351)Compensation for loss of acquisition (941) -Impairment of goodwill and 5,022 21,801intangiblesDepreciation 482 282Loss from sale of fixed assets 5 -Loss on Joint Venture 7 6Share option charge 71 34Exchange movements (102) (44)Changes in trade and other 2,121 (1,052)receivablesChanges in trade and other payables (2,278) (776)Increase in provisions 82 31Cash generated from continuing 10,382 5,911operations This information is provided by RNS The company news service from the London Stock Exchange