Last checked at 4 Sep 2008 07:00
EMBARGOED UNTIL 7.00am ON THURSDAY 4th SEPTEMBER 2008
DATACASH GROUP PLC ('DataCash' or 'the Company')
INTERIM RESULTS
FOR THE SIX MONTHS
ENDED 30 JUNE 2008
4th September 2008
DataCash Group Plc: DATA / Index: AIM / Sector: Support Services
DataCash Group Plc ('the Company')
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2008
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 2008.
Overview:
Revenues increased to £12.2m (June 2007: £9.86m) Adjusted* pre-tax profits, increased to £6.3m (June 2007: £5.3m) Adjusted* earnings per share increased to 5.04p (2007: 4.07p) Cash balances of £19.1m (June 2007: £19.2m) equivalent to 20.7p per share, after acquisition payments for ACK and EuroCommerce.* Before goodwill amortisation and impairment, National Insurance provision on share option gain and notional interest on deferred consideration.
Commenting on the results, Ashley Head, Chairman of DataCash said:
"Overall, the Board is pleased with the progress of implementing our strategy to both broaden our product range and international coverage. Despite the current pessimism regarding the UK economy, the Board is confident of achieving its full year outlook."
- END -
For further information please contact:
DataCash Group PLC
David Bailey Tel:+ 44 (0)20 7421 8451
Non-Executive Deputy Chairman Mob:+44 (0)7836 258 558
Carly Smith Tel: +44 (0)20 7421 9283 Marketing & Communications Email: Carly.Smith@datacash.com
Paul Burton Tel:+44 (0)20 7421 8453
Finance Director E-mail: Paul.Burton@datacash.com
Andrew Dark Tel:+44 (0)20 7421 9289
Chief Executive E-mail: Andrew.Dark@datacash.com
Website: www.datacash.com General enquiries Tel: +44 (0)870 727 4761
About DataCash
DataCash Group Plc (AIM: DATA), a market leading provider of payment processing
solutions, provides merchants with a single interface that allows them to process secure payments, both on and offline, anywhere in the world.
DataCash also provides a range of value added services with its fraud and Risk
Management solutions supporting AVS/CV2, 3-D Secure (Verified by Visa and
MasterCard Secure Code) together with traditional rules-based screening.
DataCash provides first-class service reliability at a fraction of the price of an in-house solution, servicing clients within the retail, travel, telecommunications and gaming sectors.
DataCash Group Plc
Interim Report & Accounts for the six months ended 30 June 2008
Chairman's Statement
The Board of DataCash Group Plc is pleased to report that the Group had a very satisfactory first six months trading. Revenues increased by 24% to £12.2m, adjusted pre-tax profits (before goodwill amortization and impairment, National Insurance provision on share option gain and notional interest on deferred consideration) rose by 18.5% to £6.3m and underlying earnings rose by 23.8% to 5.04 pence per share. The prospects for the second half are good, and with strong cash generation an ongoing feature of the business, the Board is pleased to announce an increase in the interim dividend of one third, to 0.4p per share to be paid on 28th November 2008 to those shareholders on the register on 24 October 2008
The Group saw continued strong transaction volume growth, but also started to reap the benefits of broadening our historically UK centric product and service set into more international, added value areas. DataCash's increased range of new and different types of payment and new services (PayPal; European Debit Payments; Dynamic Currency Conversion; Local Acquiring Services etc) is providing new income streams and improving our competitiveness. In addition our focus into new geographies and vertical sectors is starting to show results. We have signed sizeable deals in Ireland, taken our first contracts for delivering services into Europe for US based entities and increased the numbers of clients taking our broadened range of localised products outside of the UK.
The recently announced acquisition of ACK is already generating enhanced opportunities in the UK and Irish retail markets, and EuroCommerce, the Dublin-based business targeted at the airline industry, has made good progress, albeit losing more than forecast as a consequence of the airline industry facing some well-documented challenges. We remain confident that the opportunities in this area are significant, as indicated by the successful implementation of our risk system to a number of EuroCommerce's customers.
We have completed the development of the DataCash Universal Gateway that allows clients to connect to any of the functionality contained within the Group's diverse platforms through a single interface. This is both live and with transactions being successfully processed. The pipeline of clients developing links into the DataCash Universal Gateway continues to grow, demonstrating the demand for the broader range of functionality and services that we have developed or acquired. Our major overhaul of infrastructure is close to completion, ensuring that we have the capacity on demand to continue to meet our customers' and prospects' needs.
As mentioned above, DataCash is a naturally cash generative business and, despite acquisition payments, we finished the half year with cash balances (including business related deposits) of £19.1m, 20.7p per share. We continue to seek earnings accretive strategic acquisitions to develop the business and to evaluate the opportunities that m-commerce and pre-pay may provide in the future.
Overall, the Board is pleased with the progress of implementing our strategy to both broaden our product range and international coverage. Despite the current pessimism regarding the UK economy, the Board is confident of achieving its full year outlook.
Ashley Head Chairman
4th September 2008
DataCash Group plc
Consolidated Income Statement
For the 6 months ended 30 June 2008
| Unaudited 6 months ended 30 June 2008 £'000 | Unaudited 6 months ended 30 June 2007 £'000 | Audited Year ended 31 Dec 2007 £'000 | |||||
| Revenue | 12,228 | 9,860 | 20,451 | ||||
| Administrative expenses | (6,750) | (4,898) | (10,189) | ||||
| Share option charge | 22 | (74) | (262) | ||||
| Total administrative expenses | (6,728) | (4,972) | (10,451) | ||||
| Operating profit before impairment and amortisation | 5,500 | 4,888 | 10,000 | ||||
| Impairment and amortisation | (2,983) | (2,672) | (5,022) | ||||
| Total operating profit | 2,517 | 2,216 | 4,978 | ||||
| Finance costs (notional interest on deferred consideration) | (154) | - | - | ||||
| Finance income | 739 | 343 | 910 | ||||
| Other gains | - | - | 941 | ||||
| Share of profit/(loss) in venture | 63 | (8) | (7) | ||||
| Profit before taxation | 3,165 | 2,551 | 6,822 | ||||
| Taxation | (1,625) | (1,581) | (2,508) | ||||
| Profit on ordinary activities after taxation | 1,540 | 970 | 4,314 | ||||
| Basic earnings per share | 1.68 p | 1.07 p | 4.73 p | ||||
| Diluted earnings per share | 1.67 p | 1.06 p | 4.69 p | ||||
DataCash Group plc
Consolidated Balance Sheet
As at 30 June 2008
| Unaudited As at 30 June 2008 £'000 | Unaudited As at 30 June 2007 £'000 | Audited As at 31 Dec 2006 £'000 | |
| Non current assets | |||
| Intangible assets | 13,494 | 23,173 | 14,193 |
| Goodwill | 52,095 | 32,695 | 51,517 |
| Property, plant and equipment | 2,357 | 873 | 1,790 |
| Investments in joint ventures | 73 | (14) | (13) |
| Investments | - | 163 | - |
| Deferred tax assets | 108 | 140 | 146 |
| 68,127 | 57,030 | 67,633 | |
| Current assets | |||
| Trade and other receivables | 5,247 | 6,262 | 6,443 |
| Cash and cash equivalents | 19,110 | 18,187 | 16,716 |
| 24,357 | 24,449 | 23,159 | |
| Total assets | 92,484 | 81,479 | 90,792 |
| Current liabilities | |||
| Trade and other payables | (3,070) | (4,472) | (3,510) |
| Deferred consideration Current tax liabilities | (2,478) (2,222) | - (535) | (2,125) (1,734) |
| (7,770) | (5,007) | (7,369) | |
| Net current assets | 16,587 | 19,442 | 15,790 |
| Total assets less current liabilities | 84,714 | 76,472 | 83,423 |
| Non-current liabilities | |||
| Deferred tax liability | (3,298) | - | (3,434) |
| Deferred consideration | (2,203) | - | (1,762) |
| Other liabilities | (117) | (291) | (262) |
| (5,618) | (291) | (5,458) | |
| Total liabilities | (13,388) | (5,298) | (12,827) |
| Net assets | 79,096 | 76,181 | 77,965 |
| Capital and reserves | |||
| Share capital | 921 | 917 | 919 |
| Share premium | 10,757 | 10,479 | 10,640 |
| Own shares | (1,268) | - | (685) |
| Foreign currency translation reserve | (295) | (63) | (224) |
| Share option reserve | 1,278 | 1,082 | 1,152 |
| Other reserves | 94,676 | 94,774 | 94,676 |
| Retained earnings | (26,973) | (31,008) | (28,513) |
| Total equity | 79,096 | 76,181 | 77,965 |
DataCash Group plc
Cash flow statement
For the 6 months ended 30 June 2008
| Unaudited 6 months ended 30 June 2008 £'000 | Unaudited 6 months ended 30 June 2007 £'000 | Audited Year ended 31 Dec 2007 £'000 | |
| Net cash inflow from operations | 6,272 | 7,990 | 13,371 |
| Interest received | 739 | 343 | 910 |
| Compensation for loss of acquisition | - | - | 941 |
| Tax paid | (1,447) | (1,581) | (2,890) |
| Net cash inflow from operating activities | 5,563 | 6,752 | 12,332 |
| Cash flow from investing activities | |||
| Acquisition of subsidiary (net of cash) | (1,680) | - | (875) |
| Investment in joint ventures | - | - | (277) |
| Purchase of property plant and equipment | (892) | (141) | (1,220) |
| Purchase of intangible fixed assets | (134) | - | (116) |
| Net cash outflow from investing activities | (2,706) | (141) | (2,488) |
| Cash flow from financing activities | |||
| Net proceeds from issue of share capital | 119 | 296 | 459 |
| Repayment of loan | - | - | (2,989) |
| Purchase of own shares | (583) | - | (685) |
| Equity dividends paid | - | - | (1,193) |
| Net cash (outflow)/inflow from financing activities | (464) | 296 | (4,408) |
| Net Cash inflow | 2,394 | 6,907 | 5,436 |
| Cash and cash equivalents at start of period | 16,716 | 11,280 | 11,280 |
| Cash and cash equivalents at the end of the period | 19,110 | 18,187 | 16,716 |
DataCash Group plc
Consolidated Statement of Changes in Equity
For the 6 months ended 30 June 2008
| Share Capital | Share Premium | Foreign Currency Translation Reserve | Share Option Reserve | Own Shares | Other Reserves | Retained Earnings | Total equity attributable to the equity holders of the parent. | |
| At 1 January 2007 | 908 | 10,192 | (121) | 1081 | - | 95,116 | (31,816) | 75,360 |
| Exchange differences on translation of overseas operations | - | - | 58 | - | - | - | - | 58 |
| Tax effect in equity | - | - | - | - | - | - | (162) | (162) |
| Net income and expense recognised directly in equity | - | - | 58 | - | - | - | (162) | (104) |
| Profit for the period | - | - | - | - | - | - | 970 | 970 |
| Total recognised income and expense for 6 months to June 2007 | - | - | 58 | - | - | - | 808 | 866 |
| Share-based payments | - | - | - | 1 | - | - | - | 1 |
| Merger reserve on acquisition of subsidiary | - | - | - | - | - | (342) | - | (342) |
| Issue of shares | 9 | 287 | - | - | - | - | - | 296 |
| At 30 June 2007 | 917 | 10,479 | (63) | 1,082 | - | 94,774 | (31,008) | 76,181 |
| Exchange differences on translation of overseas operations | - | - | (161) | - | - | - | - | (161) |
| Tax effect in equity | - | - | - | - | - | - | 344 | 344 |
| Net income and expense recognised directly in equity | - | - | (161) | - | - | - | 344 | 183 |
| Profit for the period | - | - | - | - | - | - | 3,344 | 3,344 |
| Total recognised income and expense for 2007 | - | - | (161) | - | - | - | 3,688 | 3,527 |
| Share-based payments | - | - | - | 70 | - | - | - | 70 |
| Merger reserve on acquisition of subsidiary | - | - | - | - | - | (98) | (98) | |
| Dividends paid | - | - | - | - | - | - | (1,193) | (1,193) |
| Own shares | - | - | - | - | (685) | - | - | (685) |
| Issue of shares | 2 | 161 | - | - | - | - | - | 163 |
| At 31 December 2007 | 919 | 10,640 | (224) | 1,152 | (685) | 94,676 | (28,513) | 77,965 |
| Exchange differences on translation of overseas operations | - | - | (71) | - | - | - | - | (71) |
| Tax effect in equity | - | - | - | - | - | - | - | - |
| Net income and expense recognised directly in equity | - | - | (71) | - | - | - | - | (71) |
| Loss for the period | - | - | - | - | - | - | 1,540 | 1,540 |
| Total recognised income and expenses for 6 months to June 2008 | - | - | (71) | - | - | - | 1,540 | 1,469 |
| Share-based payments | - | - | - | 126 | - | - | - | 126 |
| Dividends paid | - | - | - | - | - | - | - | - |
| Own shares | - | - | - | - | (583) | - | - | (583) |
| Issue of shares | 2 | 117 | - | - | - | - | - | 119 |
| At 30 June 2008 | 921 | 10,757 | (295) | 1,278 | (1,268) | 94,676 | (26,973) | 79,096 |
Notes to the Financial Statements
For the 6 months to 30 June 2008
1. Basis of Preparation
This Report for the 6 months ended 30 June 2008 was approved by the directors on 4 September 2008.
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 2007 but are unaudited, and are also consistent with those which will be adopted in the 2008 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 1985 that remain applicable to companies reporting under IFRS.
The financial information contained in this Report does not contribute statutory accounts as defined by Section 240 of the Companies Act 1985.
The figures for the year ended 31 December 2007 have been extracted from the statutory accounts which have been filed with the Registrar of Companies.
2. Earnings per Share
The calculations of profit per share are based on the following profits and numbers of shares:
The adjusted profit per share based on the profit after tax before impairment and amortisation of intangibles and goodwill and other items as noted below:
| 6 months ended 30 June 2008 | 6 months ended 30 June 2007 | Year ended 31 Dec 2007 | |
| Weighted average number of 1p ordinary shares in issue during the period | |||
| For basic earnings per share | 91,945,183 | 90,670,958 | 91,195,129 |
| Share options | 337,171 | 524,171 | 719,171 |
| For diluted earnings per share | 92,282,354 | 91,195,129 | 91,914,300 |
| £'000 | £'000 | £'000 | |
| Profit for earnings per share | 1,540 | 970 | 4,314 |
| Impairment and amortisation of intangibles and goodwill | 2,983 | 2,672 | 5,022 |
| Notional interest on deferred consideration | 154 | - | - |
| Share based payments expense | 59 | 2 | 71 |
| NI on share option gains | (81) | 72 | 191 |
| Profit for adjusted earnings per share | 4,655 | 3,716 | 9,598 |
| Adjusted basic earnings per share | 5.06 p | 4.10 p | 10.52 p |
| Adjusted diluted earnings per share | 5.04 p | 4.07 p | 10.44 p |
| Basic earnings per share | 1.68 p | 1.07 p | 4.73 p |
| Diluted earnings per share | 1.67 p | 1.06 p | 4.69 p |
3. Dividend
An interim dividend of 0.4p (2007: 0.3p) per ordinary share is recommended. In accordance with IAS 10 Events after the Balance Sheet date, this dividend has not been recognised in the accounts at 30 June 2008, but will be recognised in the accounting period ending December 2008.
4. Analysis of Net Funds
| At 1 January 2008 £'000 | Cash Flow £'000 | At 30 June 2008 £'000 | |
| Cash in hand and at bank | 3,462 | 5,882 | 9,344 |
| Short term bank deposits | 13,254 | (3,488) | 9,766 |
| 16,716 | 2,394 | 19,110 |
5. Reconciliation of profit for the year to net cash inflow from operating activities
| 6 months ended 30 June 2008 | 6 months ended 30 June 2007 | Year ended 31 December 2007 | |
| £'000 | £'000 | £'000 | |
| Profit for the year | 1,540 | 970 | 4,314 |
| Taxation | 1,625 | 1,581 | 2,508 |
| Finance income | (739) | (343) | (910) |
| Finance costs | 154 | - | - |
| Compensation for loss of acquisition | - | - | (941) |
| Impairment and amortisation of goodwill and intangibles | 2,983 | 2,672 | 5,022 |
| Depreciation | 309 | 221 | 482 |
| Loss from sale of property, plant and equipment | - | - | 5 |
| (Profit)/loss on joint ventures | (63) | 8 | 7 |
| Share option charge | (22) | 2 | 71 |
| Exchange movements | (92) | (283) | (102) |
| Changes in trade and other payables | 28 | 878 | 794 |
| Changes in trade and other receivables | 549 | 2,284 | 2,121 |
| Net cash inflow from operations | 6,272 | 7,990 | 13,371 |
6. Acquisitions
On 12 June 2008, the company acquired 100% of the issued share capital of ACK Limited for cash consideration of £2,451,259 deferred consideration of £177,000 and a deferred contingent consideration of £462,950. Total goodwill arising on the acquisition is £1,404,000. The fair values of net assets acquired are based on provisional assessments pending final determination of certain assets and liabilities.
| Carrying values pre acquisition | Fair value adjustments | Fair value | |
| £000 | £000 | £000 | |
| Intangible fixed assets | - | 1,142 | 1,142 |
| Property, plant and equipment | 19 | - | 19 |
| Trade and other receivables | 188 | - | 188 |
| Cash and cash equivalents | 786 | - | 786 |
| Trade and other payables | (113) | - | (113) |
| Deferred tax liabilities | - | (320) | (320) |
| Net assets acquired | 880 | 822 | 1,702 |
| Goodwill | 1,404 | ||
| Consideration | 3,106 | ||
| Consideration satisfied by cash | 2,451 | ||
| Directly attributable costs | 15 | ||
| Deferred cash contingent consideration | 463 | ||
| Deferred cash consideration | 177 | ||
| 3,106 |
The goodwill arising on acquisition of ACK Limited represents the value of anticipated future operating synergies from the combination.
Deferred consideration has been discounted at 6%. The range of potential contingent consideration is from £700k to £nil.