GlobalData Regulatory News (DATA)

17 Apr 2007 07:03

Datacash Group PLC17 April 2007 Not for release before 7.00am, Tuesday 17th April 2007 DataCash Group Plc: DATA / Index: AIM / Sector: Support Services DATACASH GROUP PLC ('DataCash' or 'the Company') FINAL RESULTS DataCash Group Plc, the AIM listed payments service provider, announces itsresults for the 12 months to 31 December 2006. Financial Highlights • Adjusted Group pre-tax profit* up 270% to £7.8m (2005: £2.6m)• Adjusted earnings per share of 8.0p (2005: 4.1p)• Group turnover increased by 168% to £16.41m (2005: £6.12m)• Cash balance of £15.28m** (17p per issued share) (2005 £4.90m - 11p per issued share)• Dividend payment increased by 33% to 1p per share recommended (2005: 0.75p) which is payable on 18 July 2007 to shareholders on the register at 22 June 2007. * before goodwill amortisation, National Insurance provision on share optiongain and exceptional items. ** including security deposits of £4.0m. Operational Highlights • Acquisition of Proc-Cyber Services (UK) Limited ("PCS").• Transactions with a cash value of over £7.3bn processed through the Group's systems in 2006 (2005: £5.2bn).• Growth achieved by both the original DataCash business and PCS (now DataCash Services Limited).• High profile contract wins, including the first outsourced solutions for retailers - allowing them integrated payment processing through e-commerce sites, high street shops and contact-centres.• Accelerated marketing efforts into the European, Asian and South American markets.• Board looks forward to an interesting and exciting year in 2007. Contacts: Paul Burton Chief Finance Officer, DataCash Group Plc 0870 7274760Tim McCall Managing Director, MJ2 Business Communications 020 74917776 Chairman's Statement 2006 was an important year for DataCash. We acquired ProcCyber Services (UK)Limited ("PCS"), won our first cardholder present contracts and continued togrow the business rapidly. For clarity and ease of understanding, as the acquisition of PCS has only beenaccounted for since June 1st 2006, this statement highlights the performance ofthe different elements of the business. In future we will only report on theGroup as a whole. Including the contribution from PCS from June 1st 2006, DataCash Group producedtotal revenues of £16.75m with pre-tax profits, before amortisation of goodwill,NI provision on share option gains and exceptionals ("Adjusted pre-tax profits")of £7.8m. Adjusted diluted earnings per share, on average capital grew by 95%to 8.0p (2005: 4.1p). Cash balances (including security deposits) grew from£4.90m to £15.28m. The Board is pleased to recommend a final dividend for theyear of 1p (2005: 0.75p). The Group has now utilised all its accumulated tax losses and we expect to pay afull tax charge in 2007. The original DataCash business saw good growth in 2006, driven by a 46% increasein transaction volumes to 92m. Revenues increased by 30% (from £6.1m to £8.0m)and Adjusted, pre-tax profits, increased by 44% to £3.50m (2005: £2.36m). Ourstrategy of providing a complete outsourced solution for retailers, allowingthem integrated payment processing from their e-commerce sites, high streetshops and contact-centres gained increasing traction and was adopted by majorbrands including Laura Ashley and Odeon Cinemas. There are a number of furtheropportunities which are currently under discussion and this remains a goodsource of growth for the Group. Other recent notable contracts were signed with FlyBe (to include BAConnect),Arcadia (CNP), Lucky8, Mansion and MedicExchange. We have also announced thatLloyds Bank has awarded preferred Payment Service Provider status to the Group. PCS (now DataCash Services Limited) had an excellent year, seeing very stronggrowth. It contributed £8.4m to revenue and £3.94m to Adjusted pre-tax profitsfor the 7 months included in the period under review. As announced in October2006 and in our trading update in January 2007, the Group was adversely impactedby the Safe Ports Act in the United States, which forced us to withdraw fromprocessing US originated gaming related payments towards the end of last year.While this will inevitably impact our growth in 2007 it is also providing addedimpetus to our development plans. Non-US related revenues grew stronglythroughout 2006, but with the additional marketing focus being applied by ourgaming merchants to non-US activities we expect even faster growth from thisarea in 2007. Unfortunately, the impact of the Safe Ports Act resulted in some necessaryreductions in headcount in our Cape Town operation, and I would like to thankall our staff for their professionalism and understanding of a situation beyondour control. The DataCash Group as a whole processed "value" (i.e. the cash value oftransactions processed through our systems) in excess of £7.3bn in 2006 (2005:£5.2bn). Our model of using this aggregated business flow to ensure the bestrates for our customers is a key to our future success. The changes to the Group in 2006 added significant new capabilities andchallenges to the Group. With the majority of staff in Cape Town, but also withassociated businesses in Cyprus and China, which were part of the PCSacquisition, our horizon broadened significantly, and we now employ 276 staff.The enlarged Group has a different business model to the original DataCashbusiness, offering a number of middle and back office services to our customersas well as the payment processing function. In particular, we now have a RiskManagement capability that is a key differentiator to the future of the enlargedbusiness. DataCash has delivered world class service in both performance and reliability.This is a testament to our staff and technology and we are confident that we cancontinue to scale the business. We continue to invest in our infrastructure andtechnology and have a number of initiatives in 2007 targeted at enhancing ourefficiency and scalability as well as permitting faster integration of newpayment types to extend our geographical reach. This, we believe, will increaseour competitiveness as more customers seek to offer their products and servicesacross international borders. We are confident our blend of local andinternational payments support will attract increasing numbers of customers toour services. Our strategic goal is to provide a world-wide platform to enable our customersto process payments efficiently and cost effectively anywhere in the world. Therealignment of marketing activity by our gaming customers away from the USA hasaccelerated our efforts into the European, Asian and South American markets.Gaming revenues as a percentage of our total revenues are expected to fall,which is strategically beneficial as it diversifies our markets. In February 2007 we entered into an agreement with NetGiro International AB ("NetGiro International") to acquire the issued share capital of NetGiro SystemsAB, a Swedish based PSP, ("SPA"). As previously announced, the Board of DataCashdecided to terminate the SPA on 13 April 2007 due to breaches of the SPA byNetGiro International. DataCash now intends to take legal action against NetGiroInternational to seek damages as a result of these breaches and also intends totake legal action against one of the shareholders of NetGiro Internationalarising out of the conduct of that shareholder in the period leading up to theextraordinary general meeting of NetGiro International held on the 30 March 2007("EGM") and at the EGM itself. 2007 will be an interesting and exciting year for the Group, with many decisionsto be made as to priorities and how best to grasp the opportunities that areopen to us. We are firmly of the belief that we have the staff and themanagement to take this company forward strongly, and the challenges of the pastsix months have only reinforced this belief. We look forward to reporting onprogress as the year evolves. The Board is confident that the Group can continueto deliver robust and sustainable, cash generative growth. Ashley Head Chairman Consolidated Profit & Loss AccountFor the year ended 31 December 2006 Continuing Operations Acquisitions Restated Year ended 31 Year ended 31 Year ended 31 Year ended 31 Dec 2006 Dec 2006 Dec 2006 Dec 2005 £'000 £'000 £'000 £'000 Turnover : group and share of joint ventures 7,957 8,793 16,750 6,116Less:share of joint venture - (345) (345) - Turnover 7,957 8,448 16,405 6,116 Administrative expensesAmortisation of Goodwill (1,975) (4,203) (6,178) (1,975)National insurance on share option charge (2) - (2) (34)Share option charge (34) - (34) (34)Severance payments - (73)Aborted acquisition costs - (402)Other operating expenses (4,462) (4,471) (8,933) (3,720)Total administrative expenses (6,473) (8,674) (15,147) (6,238) Group operating profit/(loss) 1,484 (226) 1,258 (122)Share of operating loss in joint venture (6) -Total operating profit/(loss) 1,252 (122)Interest receivable and similar income 351 167Profit on ordinary activities 1,603 45before taxationTaxation (2,070) (687)Loss on ordinary activities after taxation (467) (642) Basic loss per share - note 2 (0.65)p (1.43)pDiluted loss per share - note 2 (0.65)p (1.43)p Operating profit for the year arises from the groups' continuing operations. Consolidated Statement of Total Recognised Gains and LossesFor the year ended 31 December 2006 Restated Year ended Year ended 31 December 31 December 2006 2005 £000 £000 Loss for the financial year (467) (642)Currency translation differences on foreign currency net investments (121) -Total recognised gains and losses relating to the year (588) (642)Prior year adjustment (34)Total Recognised gains and losses since last annual report (622) Consolidated Balance SheetAs at 31 December 2006 Restated Note 31 December 31 December 2006 2005 £000 £000Fixed assetsIntangible assets 74,184 8,337Tangible assets 1,000 161Investments in joint ventures: Share of gross assets 323 - Share of gross liabilities (329) -Investments 163 - 75,341 8,498Current assetsDebtors 8,380 966Debtors - deferred tax asset 128 522Cash at bank and in hand 11,280 4,895 19,788 6,383CreditorsAmounts falling due within one year (4,129) (1,225) Net current assets 15,659 5,158 Total assets less current liabilities 91,000 13,656 Provisions for liabilities and charges (179) (148) 90,821 13,508Capital and reservesCalled up share capital 908 449Share premium account 10,192 9,811 Foreign Currency Translation Reserve (121) -Share option reserve 1,081 34Other reserve 95,116 18,765Profit and loss account (16,355) (15,551) Equity shareholders' funds 5 90,821 13,508 Consolidated Cash Flow StatementFor the year ended 31 December 2006 Year ended 31 Year ended 31 December 2006 December 2005 £000 £000 Note Net cash inflow from operating activities 3 6,901 1,775 Returns on investments and servicing of financeInterest received 351 167Net cash inflow from returns on investments and servicingof finance 351 167 Taxation (991) (17) Capital expenditure and financial investmentPurchase of tangible fixed assets (432) (73) Net cash outflow from capital expenditure and financialinvestments (432) (73) Equity dividends paid (337) (224) Acquisitions and disposals Investment in subsidiary undertakings (1,710) - Cash acquired with subsidiaries 2,404 - Net cash inflow from acquisitions and disposals 694 - Net cash inflow before management of liquid resources andfinancing 6,186 1,628 Management of liquid resourcesIncrease in short term bank deposits (2,251) (3,289) Net cash outflow from management of liquid resources (2,251) (3,289) Financing Issue of ordinary share capital including premium 199 61 Net cash inflow from financing 199 61 Increase/(decrease) in cash in the year 4,134 (1,600) Reconciliation of Net Cash Flow to Movement in Net FundsFor the year ended 31 December 2006 Year ended 31 Year ended 31 December 2006 December 2005 £000 £000 Increase/(decrease) in cash in the year 4,134 (1,600) Cash inflow from management of liquid resources 2,251 3,289Movement in net funds 6,385 1,689 Opening net funds 4,895 3,206 Closing net funds 11,280 4,895 Notes to the Financial StatementsFor the year ended 31 December 2006 1. Basis of Preparation The results for the year ended 31 December 2006 have been prepared on accountingbases and policies which are consistent with those used in the preparation ofthe financial statements of the Group for the year ended 31 December 2005 withthe exception of the prior year adjustment explained below. The adoption of FRS 20 - share based payments requires a prior year adjustmentto be made in respect of unexercised employee share options. This has decreasedthe profit and loss reserve by £68,000. Of this amount £34,000 is attributableto the year ended 31 December 2005. The consolidated financial information for the year ended 31 December 2006 hasbeen prepared on a basis consistent with the previous year and in accordancewith applicable UK accounting standards. The preliminary announcement does notconstitute the Group's statutory financial statements within the meaning ofs.240 of the Companies Act 1985. The financial information included in this announcement has been extracted fromthe un-audited financial statements for the year ended 31 December 2006 and theaudited financial statements for the year ended 31 December 2005. The Group's 2006 Annual Report and Financial statements are to be delivered tothe Registrar of Companies following the Company's Annual General Meeting on 29June 2007. The Group's 2005 accounts, which contain an unqualified auditreport, have been filed with the Registrar of Companies. 2. Earnings per Share The basic and diluted loss per share is based on the loss on ordinary activitiesafter tax of £467,000 (2005: £642,000 loss). The weighted average number ofordinary shares outstanding during the period used in the calculation of basicloss per share was 71,768,371 (2005: 44,816,905). The fully diluted earnings per share, which assumes the full exercise of shareoptions, has been calculated on 72,033,691 (2005: 45,795,910) Ordinary Share. 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. Year ended 31 Year ended 31 December 2006 December 2005 £000 £000 Loss on ordinary activities after taxation (467) (642) Amortisation of Goodwill 6,178 1,975Provision for national insurance on share option gains 2 34Share option charge 34 34Severance payments - 73Aborted acquisition costs - 402 Profit on ordinary activities before goodwill, NI on share option 5,747 1,876gains and exceptionals 2006 2005 No. of shares No. of sharesWeighted average number of shares 71,768,371 44,816,905Dilutive effect of options 265,320 979,005 72,033,691 45,795,910 Diluted Adjusted Earnings per share 7.98p 4.10p 3. Reconciliation of operating profit/(loss) to operating cash flows Year ended 31 Year ended 31 December 2006 December 2005 £000 £000 Operating profit / (loss) 1,258 (122) Amortisation 6,178 1,975 Operating profit before exceptional charges 7,436 1,853 Depreciation 282 102Exchange movements 77 -Increase in debtors (977) (225)Increase in creditors 742 22Increase in provisions 31 23 Net cash inflow from operating activities 6,901 1,775 4. Analysis of Net Funds At 1 At 31 January December 2006 Cash Flow 2006 £000 £000 £000 Cash in hand and at bank 717 4,134 4,851 Short term bank deposits 4,178 2,251 6,429 Total 4,895 6,385 11,280 5. Reconciliation of movement in shareholders' funds Restated Year ended 31 Dec Year ended 31 Dec 2006 2005 £000 £000 Loss for the year (467) (642) Prior year adjustment - (34)As restated (467) (676) Dividend paid (337) (224)Issue of Ordinary Share Capital including premium 840 61 Foreign currency translation reserve (121) - Other reserves 76,351 - Share scheme charge 1,047 34 Net movement in shareholders' funds 77,313 (805) Opening shareholders' funds 13,508 14,313 Closing shareholders' funds 90,821 13,508 NOTE A copy of the full accounts will be sent to shareholders on the Register OfMembers as at 22 June 2007 or can be obtained from the Secretary, DataCash Groupplc, Descartes House, 8 Gate Street, London WC2A 3HP. ANNUAL GENERAL MEETING The Company's AGM will be held on 29th June 2007 at 12.00 noon at DescartesHouse, 8 Gate Street, London WC2A 3HP This information is provided by RNS The company news service from the London Stock Exchange