Last checked at 19 Dec 2013 07:00
eServGlobal Limited (eServGlobal or the "Company")
eServGlobal Preliminary Results (LSE:AIM) and Appendix 4E (ASX): FY2013
Paris: 19 December 2013
eServGlobal (LSE: ESG & ASX: ESV), the provider of end-to-end mobile financial services to emerging markets, is pleased to announce its preliminary results and ASX Appendix 4E for the financial year ended 31 October 2013.
FINANCIAL HIGHLIGHTS
· Net profit after tax of A$10.4m (£6.6m) compared to a prior year loss of A$15.6m (£10.2m)
· FY2013 adjusted EBITDA profit of A$1.7m (£1.1m) compared to an EBITDA loss of A$1.9m (£1.6m) in FY2012
· FY2013 revenues up 17% to A$31.0m (£19.6m) (FY2012: A$26.5m excluding USP legacy revenues of A$1.6m generated in FY2012)
· FY2013 gross margin up 6% to 62% (FY2012: 56%)
· Total costs decreased 2% to A$29.3m (£18.6m) (FY2012: A$30.0m). Restructuring is now largely complete
· Cash and cash equivalents at 31 October 2013 of A$4.9m excluding restricted cash of A$1.0m (FY2012: A$3.8m)
FY13 | FY13 | FY12 | FY12 | |
Summary Financials | Full Year | Full Year | Full Year | Full Year |
A$M | £M+ | A$M | £M+ | |
Revenue | 31.0 | 19.6 | 28.1 | 18.3 |
Cost of sales | 11.8 | 7.5 | 12.3 | 8.0 |
Gross profit | 19.2 | 12.2 | 15.8 | 10.4 |
Adjusted Operating Costs* | 17.5 | 11.1 | 17.7 | 11.7 |
Adjusted EBITDA* | 1.7 | 1.1 | -1.9 | -1.3 |
Net Interest | -0.4 | -0.2 | -1.0 | -0.7 |
Amortization | -1.9 | -1.2 | -4.7 | -3.1 |
Depreciation | -0.5 | -0.3 | -0.7 | -0.4 |
Adjusted PBT* | -1.1 | -0.6 | -8.3 | -5.5 |
Reported PBT | 4.5 | 2.8 | -15.4 | -10.1 |
Income tax | 5.9 | 3.7 | -0.2 | -0.1 |
PAT | 10.4 | 6.6 | -15.6 | -10.2 |
OPERATIONAL HIGHLIGHTS
· 100+ customers using eServGlobal's mobile money, international remittance, recharge and value-added services technologies including HomeSend (+16% in the past year).
· 10 new core mobile money business customers, bringing the total number of core business customers to 65 (excluding HomeSend).
o Significant group frame agreement with the Zain Group resulting in estimated revenue of US$12m over three years
· Continued expansion of footprint within the existing customer base
o Four new product deployments at existing customers in addition to regular extension projects including NFC payments and companion cards
· HomeSend exceeded 1.2 billion subscribers under contract coverage and is now in the next strategic phase of development, deploying live corridors. As of November 2013, the HomeSend service is connecting 51 countries for remittance, exceeding the target for 50 deployed countries by year end, as well as 76 countries for airtime transfer resulting in over 690 live corridors for both services.
· Sizable new contracts signed just prior to year-end have contributed to a healthy backlog of work and a positive outlook for FY14.
Post period end:
eServGlobal has today announced a joint venture with MasterCard and BICS to take HomeSend into its next phase of global expansion. The joint vVenture will enable cross border remittances and domestic person-to-person (P2P) transfers to and from mobile money accounts, bank accounts or cash outlets. MasterCard will have a majority share of the joint venture while eServGlobal will hold 35%. This investment by MasterCard validates the work both eServGlobal and BICS have undertaken during their five-year strategic partnership and will propel the service to a new operating level.MasterCard will contribute cash for its interest in the joint venture with eServGlobal to receive €9m in cash of which €3.45m are subject to a two year escrow arrangement.
Paolo Montessori, CEO and Managing Director, eServGlobal, said: "Our efforts over the last few years have seen us grow the business, reduce our cost structure and return to EBITDA profitability. Our continued investment in innovative product development has ensured we remain competitive and relevant to our customers' needs. We are well positioned to continue the forward momentum that we have worked so hard to achieve and look forward to the year ahead.
"Separately announced today, our joint venture agreement with MasterCard and BICS for HomeSend validates our strategic approach to align ourselves with the world's largest payment organisations in the financial, telecommunications, global roaming and international remittances sectors."
+Average exchange rate was 0.633 GBP to AUD (FY2012 0.655)
*Excludes foreign exchange gains of A$8.0m (FY2012 loss of A$3.4m), non-recurring costs of A$2.0m (FY2012 A$2.9m) and share based payments of A$0.5m (FY2012 A$0.6m)
For further information, please contact:
eServGlobal | www.eservglobal.com |
Tom Rowe, Company Secretary Alison Cheek, Communications Manager | T: +61 (0)2 8014 5050 investors@eservglobal.com
|
Cenkos Securities plc Ivonne Cantú /Stephen Keys (Nomad) | www.cenkos.com T: +44 (0) 20 7397 8980 |
Charles Stanley Securities Dugald Carlean / Paul Brotherhood | www.csysecurities.com T: +44 (0) 20 7149 6000
|
Newgate Threadneedle Hilary Millar / Caroline Evans-Jones / Josh Royston / Jasper Randall | www.newgatethreadneedle.com T: +44 (0) 20 7653 9850 |
About eServGlobal
eServGlobal (LSE: ESG, ASX:ESV) offers mobile money solutions which put feature-rich mobile financial services at the fingertips of users worldwide, covering the full spectrum of mobile wallet, mobile commerce, recharge and agent management features. eServGlobal invests heavily in product development, using carrier-grade, next-generation technology and aligning with the requirements of 65 customers in 50 countries. eServGlobal is partnering with MasterCard and BICS to build the HomeSend joint venture, the market leading international remittance service based on eServGlobal technology and enabling mobile money transfer in over 50 markets. eServGlobal has been a source of innovative solutions for mobile and financial service providers for 30 years. Follow us on Twitter @eServGlobal.
INTRODUCTION
In the past year eServGlobal has consolidated its position as one of the top mobile money vendors in the industry. The Company is widely regarded as a leading technology provider of end-to-end mobile money and mobile financial service solutions for emerging markets. The past year has seen the core business win new customers along with signing a significant Group framework agreement with the Zain group. This year we have also expanded our product offering into areas such as NFC (Near Field Communications), companion cards and mobile financial services.
The achievements in the core business have been complemented with the continued rollout of the HomeSend international mobile money transfer hub. This continued success has been the driving force behind the joint venture with MasterCard and BICS announced today. The past year has seen HomeSend progress to its next strategic stage - customer deployments. After initially setting a target of live corridors in 50 countries by year end, HomeSend exceeded this goal with corridors live in 51 countries for remittance and 76 countries for airtime transfer as of November 2013. The individual service providers in these countries are connected via more than 690 corridors.
Facilitated by the new HomeSend joint venture with MasterCard and BICS, eServGlobal's will continue to offer international remittance as part of it mobile money product portfolio. eServGlobal is a 35% shareholder in the JV. This JV will accelerate HomeSend's move into a new phase, one in which the hub will become open to new markets while enabling the full weight of MasterCard's marketing and distribution network to be brought to bear.
OPERATIONAL REVIEW
Overview
Our efforts over the last few years have seen us reduce our cost structure and return to EBITDA profitability. The new contracts signed in FY13 have contributed to our top line growth and to a healthy backlog of work which will flow into FY14.
In our core mobile money business, we continued our efforts to build an eco-system of partners, including an agreement with MasterCard to join their mobile money partnership program. Our focus on partnerships led to securing new projects in NFC payments, while our partnership with MasterCard enabled us to answer requirements for a mobile money project which will offer a companion card.
Mobile money and mobile financial services:
eServGlobal's 'core' business consists of a comprehensive suite of mobile money and mobile financial solutions for domestic transactions in emerging markets. We bridge the telco and financial service worlds offering 'end-to-end' and 'any account to any account' mobile financial services. Our mobile money and mobile financial service solutions are being delivered to customers worldwide.
eServGlobal has evolved through the diversification of payment means and draws on 30 years' experience working with telcos to find innovative ways for subscribers to store and transfer value. Through the PayMobile platform, eServGlobal provides a seamless migration path from traditional voucher and electronic top-up for prepaid subscribers in emerging markets to a mobile money and mobile financial service solution.
In the past year, eServGlobal consolidated its position as a top vendor in this landscape through the addition of 10 new customers for the core mobile money business, including the high profile announcement of the Zain Group selection of eServGlobal as their supplier for electronic recharge and mobile money.
Developments and customer growth through the year:
· Significant 3-year framework agreement with the Zain Group, valued at over US$12m, to deliver a mobile money and electronic top-up solution to the eight Zain affiliates in the Middle East and Africa. Zain Group coverage extends to more than 44 million subscribers and includes several markets where over 90% of the population does not have access to banking facilities.
· Expanded our footprint within the Ooredoo (QTel) group through a strategic deal with Indosat, an Indonesian Mobile Network Operator (MNO) and a member of the Ooredoo Group. eServGlobal will supply its PayMobile platform to Indosat to provide voucher recharge for its subscriber base of more than 50 million users. Indonesia is one of the largest mobile markets in South East Asia and recharge is an essential feature in this predominantly prepaid market.
· Deployment of our first NFC project for an operator in the Middle East, with our partner Airtag. The project featured an NFC transport application with an architectural framework for an easy upgrade to a full mobile wallet solution, enabling bill payment, person-to-person transfers and loyalty schemes.
· In addition eServGlobal was named as a member of MasterCard's Mobile Money Partnership Program, an initiative aimed at helping the more than 2.5 billion financially underserved consumers worldwide gain access to mainstream financial services through their mobile phone.
HomeSend
As separately announced today, the joint venture between eServGlobal, MasterCard and BICS comes on the back of a very successful year for the HomeSend hub. This investment by MasterCard validates the work both eServGlobal and BICS have undertaken during their five-year strategic partnership and will propel the service to a new operating level.
Highlights:
· Exceeded the objective for live corridors connecting 50 countries. As of November 2013, live HomeSend corridors connected 51 countries for remittance and 76 countries for airtime transfer. The individual service providers in these countries are connected by over 690 live corridors.
· Japanese Mobile Transfer Operator (MTO), Brastel Remit joined the hub and will launch new sending remittance corridors from Japan to key markets in Russia, CIS countries, the Philippines and Africa.
· Lycamoney and MTN launched remittance corridors between the UK & Ghana, allowing Lycamoney Card users in the UK to send money instantly and cost effectively to their relatives and friends using MTN Mobile Money services in Ghana.
· Malaysian (Mobile Virtual Network Operator) (MVNO), Merchantrade joined the hub extending access to key Asian receiving markets. Merchantrade is Malaysia's leading licensed money services company, offering money transfer services with over 170,000 payout locations as part of its strong and rapidly expanding payout presence across South Asia and South East Asia.
· Telesom, the leading mobile network operator in Somaliland, launched remittance services through HomeSend. Telesom operates a successful mobile money program called Telesom ZAAD which was recognised by the GSMA as a 'Mobile Money Sprinter', acknowledged as one of the most successful mobile money services for the unbanked in the world.
· Post Finance, one of the largest financial institutions in Switzerland, launched services with HomeSend to allow subscribers to remit money via e-banking.
· WorldRemit, the world's largest dedicated online money transfer business, joined HomeSend to further extend its services into emerging markets.
MARKET REVIEW
Domestic mobile money services: Mobile money and mobile financial services is a large market which continues to expand, year-on-year exceeding analysts' growth expectations. This market expansion has been particularly strong in emerging markets where mobile penetration rates are high and access to traditional financial services is limited. In these markets, the mobile network operators and financial service providers are moving quickly to position themselves to be able to extend these new services to their users. eServGlobal is well positioned to service this growing market, with extensive experience in holding customer balances and an in-depth understanding of the mobile infrastructure.
Berg Insight predicts the total value of mobile money transactions to grow from US$44b in 2011 at a CAGR of 44 percent to US$395b in 2017 (Berg Insight, Mobile Money in Emerging Markets, 2013).
The GSMA's Mobile Money for the Unbanked (MMU) project reports that as of November 2013 there are 208 live deployments which extend mobile-based financial services in developing and emerging markets and a further 117 planned deployments. This represents 38% percent growth during 2012 and a 90% increase since 2011, signifying the growing demand for mobile financial services in markets where traditional financial services are unable to reach all users.
We are also starting to see the beginning of a systems replacement market; half of the GSMA's fourteen 'mobile money sprinters' are in the process of migrating or are planning to migrate their platforms to a more scalable and flexible platform. As we turn the corner into a new age of mobile money, the trend is towards a more mature, considered and holistic approach to deployments. Operator groups are seeking cost efficiency and are increasingly looking for a single vendor strategy.
International Remittance: The World Bank estimates that by 2014, around 75 million foreign workers will use m-remittance to transfer payments from Europe, the US, Australia, Japan and the United Arab Emirates to India, China, Mexico, Indonesia and the Philippines. The developing world is expected to receive US$414b in migrant remittances in 2013, an increase of 6.3 percent over the previous year. This is projected to rise to US$540b by 2016. Globally, the world's 232 million international migrants are expected to remit earnings worth US$550b this year and over US$700b by 2016.
Juniper Research recently reported that, nearly 400m mobile phone users worldwide are expected to use their handsets for mobile money transfer by 2018, up from just under 150m this year. Growth is expected to be driven primarily by deployments of domestic money transfer services, with multinational network operators increasingly launching products on a group-wide rather than an ad hoc basis.
According to the findings, the launch of mobile money services, primarily in emerging markets, is an evolutionary process in which several steps are necessary to achieve full financial inclusivity. Once the mobile wallet has been deployed, the first services to be introduced (almost always at the same time as wallet deployment) involve remittance, whether in the form of airtime or in a cash transaction. Following this, mobile money services typically move to offer payment facilities, both bill payment and payment at a merchant and then to full financial inclusivity by offering micro-insurance, loan disbursement and loan repayment.
FINANCIAL REVIEW
The full unaudited accounts are presented in the Appendix 4E below.
OUTLOOK
The focus for the core business in the coming year will be to consolidate our market position and continue our organic growth as well as to deliver successful implementations with innovative services to our customers while successfully completing the transition of the HomeSend business to the joint venture.
The new contracts signed in FY13 have contributed to a healthy backlog of work which will flow into FY14. This, combined with a strengthened financial position and continued strong trading in the early months of the new year, leave the Board confident in the future prospects for the business.
Appendix 4E
Preliminary Final Report
for the year ended 31 October 2013
eServGlobal Limited
ABN 59 052 947 743
1. Reporting Period
Current reporting period : Financial year ended 31 October 2013
Previous reporting period : Financial year ended 31 October 2012
2. Results (unaudited) for announcement to the market
Results | A$ '000
| ||||||
Revenue
| Up | · 10.4% | · to | · 31,003 | |||
Profit/(Loss) after tax | Up | · >100% | · to | · 10,374 | |||
|
|
| |||||
Profit/(Loss) after tax attributable to members | Up | · >100% | · to | · 10,248 | |||
| |||||||
Dividends (distributions) | Amount per security | Franked amount per security | |||||
Current period Interim dividend Final dividend
|
Nil ¢ Nil ¢ |
0% 0%
| |||||
Previous corresponding period Interim dividend Final dividend
|
Nil ¢ Nil ¢
|
0% 0% | |||||
Record date for determining entitlements to the dividend. | · - | ||||||
| |||||||
Brief explanation of the figures above
The consolidated entity achieved sales revenue for the year of $31.0 million (2012 $28.1 million).
The EBITDA profit was $7.3 million after restructuring costs of $2.0 million, foreign exchange gains of $8.0 million and share based payments of $0.5 million (2012 EBITDA loss $8.7 million after restructuring costs of $2.9 million, foreign exchange losses of $3.4 million and share based payments of $0.6 million). The net result of the consolidated entity for the year to 31 October 2013 was a profit after tax and minority interest for the period of $10.3 million (2012 loss after tax and minority interest $15.7 million). Included in this result was an income tax credit of $5.9 million (2012 income tax expense of $0.2 million). Earnings per share were 4.3 cents (2012: loss per share: 8.0 cents).
The operating cash flow for the period was a net outflow of $8.9 million. Total cash flow for the period was a net inflow of $0.9 million. Cash at 31 October 2013 was $4.9 million.
Subsequent Events
On 19 December 2013 eServGlobal announced an agreement to create a new joint venture with MasterCard and BICS (eServGlobal's current partner in HomeSend) for the international mobile money transfer service, HomeSend. Under the terms of the agreement, eServGlobal and BICS will contribute all of the assets, including staff, that are directly related to the HomeSend business into a newly formed company ("NewCo"). Following the transaction, MasterCard will own 55% of NewCo, eServGlobal will own 35% and BICS will own 10%. Based on the initial shareholdings, MasterCard will be entitled to appoint three directors to the Board of NewCo, eServGlobal will be entitled to make two appointments and BICS will be entitled to nominate one director.
MasterCard will contribute cash for its interest in NewCo with eServGlobal to receive €9.0m ($13.6 million) in cash, which includes €3.45 million ($5.21 million) to be held in escrow, net of a pro rata of NewCo's estimated working capital requirements for the medium term. In addition, MasterCard will enter into a commercial agreement with HomeSend which will have an initial duration of three years and automatic yearly renewal thereafter. The commercial agreement will require MasterCard to use its best endeavors to promote the HomeSend service utilising MasterCard's sales channels.
There are conditions precedent to the creation of the HomeSend joint venture and those conditions, together with a summary of the material terms and conditions of the HomeSend joint venture have been included in the regulatory announcement dated 19 December 2013.
The assets attributable to the HomeSend business (including the allocated goodwill component) have been classified as "Assets classified as held for sale" in the Consolidated Statement of Financial Position as at 31 October 2013.
The creation of the HomeSend joint venture has given rise to an income tax credit, and deferred tax asset, of €4.7 million ($7.2 million) at 31 October 2013. |
3. Consolidated statement of profit or loss and other comprehensive income
| Note | Year Ended 31 Oct 2013 $'000 | Year Ended 31 Oct 2012 $'000 |
Revenue | 31,003 | 28,070 | |
Cost of sales | (11,789) | (12,267) | |
Gross profit | 19,214 | 15,803 | |
Interest income | 55 | 389 | |
Foreign exchange gain/(loss) | 8,024 | (3,387) | |
Research and development expenses | (2,717) | (2,289) | |
Sales and marketing expenses | (4,683) | (6,132) | |
Administration expenses | (12,614) | (13,040) | |
Earnings/(Loss) before interest expense, tax, depreciation and amortisation | 7,279 | (8,656) | |
Amortisation expense | (1,875) | (4,704) | |
Depreciation expense | (468) | (637) | |
Earnings/(Loss) before interest expense and tax | 4,936 | (13,997) | |
Interest expense | (441) | (1,405) | |
Profit/(Loss) before tax | 4,495 | (15,402) | |
Income tax credit/(expense) | 5,879 | (187) | |
Profit/(Loss) for the year | 10,374 | (15,589) | |
Other comprehensive income/(loss) | |||
Items that may be reclassified subsequently to profit or loss: | |||
Exchange differences arising on the translation of foreign operations (nil tax impact) | (4,475) | 1,277 | |
Total comprehensive income/(loss) for the year | 5,899 | (14,312) | |
Profit/(Loss) attributable to: | |||
Equity holders of the parent | 10,248 | (15,715) | |
Non controlling interest | 126 | 126 | |
10,374 | (15,589) | ||
Total comprehensive income/(loss) attributable to: | |||
Equity holders of the parent | 5,784 | (14,438) | |
Non controlling interest | 115 | 126 | |
5,899 | (14,312) | ||
Earnings/(Loss) per share: | |||
Basic (cents per share) | 4.3 | (8.0) | |
Diluted (cents per share) | 4.2 | (8.0) |
4. Consolidated statement of financial position
Note | 31 Oct 2013 $'000 | 31 Oct 2012 $'000 | |
Current Assets | |||
Cash and cash equivalents | 4,909 | 3,794 | |
Trade and other receivables | 21,846 | 14,094 | |
Inventories | 74 | 158 | |
Current tax assets | 4,272 | 90 | |
31,101 | 18,136 | ||
Assets classified as held for sale | 13 | 7,754 | - |
Total Current Assets | 38,855 | 18,136 | |
Non-Current Assets | |||
Property, plant and equipment | 482 | 912 | |
Deferred tax assets | 10,325 | 6,005 | |
Goodwill | 3,523 | 5,878 | |
Other intangible assets | - | 3,508 | |
Total Non-Current Assets | 14,330 | 16,303 | |
Total Assets | 53,185 | 34,439 | |
Current Liabilities | |||
Trade and other payables | 8,143 | 7,816 | |
Borrowings | 7 | 3,000 | 1,200 |
Current tax payables | 150 | 69 | |
Provisions | 1,800 | 1,724 | |
Deferred revenue | 1,989 | 2,125 | |
Total Current Liabilities | 15,082 | 12,934 | |
Non-Current Liabilities | |||
Borrowings | 7 | - | 6,000 |
Provisions | 749 | 431 | |
Total Non-Current Liabilities | 749 | 6,431 | |
Total Liabilities | 15,831 | 19,365 | |
Net Assets | 37,354 | 15,074 | |
| |||
Equity | |||
Issued capital | 5, 6 | 106,695 | 90,770 |
Reserves | 5 | (4,090) | (82) |
Accumulated Losses | (65,451) | (75,699) | |
Parent entity interest | 37,154 | 14,989 | |
Non controlling interest | 200 | 85 | |
Total Equity | 37,354 | 15,074 | |
5. Consolidated statement of changes in equity
Issued Capital $'000 | Foreign Currency Translation Reserve $'000 | Employee equity-settled benefits Reserve $'000 | Accumu-lated Losses $'000 | Attributable to owners of the parent $'000 | Non controlling Interest $'000 | Total $'000 | |
Balance at 1 November 2012 | 90,770 | (2,099) | 2,017 | (75,699) | 14,989 | 85 | 15,074 |
Profit for the year | - | - | - | 10,248 | 10,248 | 126 | 10,374 |
Exchange differences arising on translation of foreign operations | - | (4,464) | - | - | (4,464) | (11) | (4,475) |
Total comprehensive income for the year (net of tax) | - | (4,464) | - | 10,248 | 5,784 | 115 | 5,899 |
Issue of new shares (Note 6) | 15,925 | - | - | - | 15,925 | - | 15,925 |
Equity settled payments | - | - | 456 | - | 456 | - | 456 |
Balance at 31 October 2013 | 106,695 | (6,563) | 2,473 | (65,451) | 37,154 | 200 | 37,354 |
Balance at 1 November 2011 | 90,770 | (3,376) | 1,393 | (59,984) | 28,803 | 70 | 28,873 |
Loss for the year | - | - | - | (15,715) | (15,715) | 126 | (15,589) |
Exchange differences arising on translation of foreign operations | - | 1,277 | - | - | 1,277 | - | 1,277 |
Total comprehensive loss for the year (net of tax) | - | 1,277 | - | (15,715) | (14,438) | 126 | (14,312) |
Payment of dividends | - | - | - | - | - | (111) | (111) |
Equity settled payments | - | - | 624 | - | 624 | - | 624 |
Balance at 31 October 2012 | 90,770 | (2,099) | 2,017 | (75,699) | 14,989 | 85 | 15,074 |
6. Issue of new shares
The company issued a total of 52,198,291 shares during the year (2012: nil) at $0.32 per share, raising a total of $15.925m net of expenses. The Company now has 249,045,997 ordinary shares on issue.
7. Borrowings
During the year the remaining $7.2 million shareholder loans were fully repaid. The company entered into a bank loan facility agreement for $3.0 million which was drawn down in full on 14th June 2013. The loan is secured by means of a fixed and floating charge over the whole of the assets and undertakings of eServGlobal Limited and is due for repayment on 30th April 2014.
8. Consolidated statement of cash flows
Year Ended 31 Oct 2013 $'000 | Year Ended 31 Oct 2012 $'000 | ||
Cash Flows from Operating Activities | |||
Receipts from customers | 23,851 | 30,182 | |
Payments to suppliers and employees | (31,058) | (42,083) | |
Interest and other finance cost paid | (591) | (1,536) | |
Income tax paid | (1,088) | (7,813) | |
Net cash used in operating activities | (8,886) | (21,250) | |
Cash Flows From Investing Activities | |||
Proceeds from asset disposal escrow deposit | - | 23,307 | |
Interest received | 11 | 562 | |
Payment for property, plant and equipment | (111) | (140) | |
Software development costs | (1,839) | (1,826) | |
Net cash (used in)/provided by investing activities | (1,939) | 21,903 | |
Cash Flows From Financing Activities | |||
Proceeds from issue of shares | 16,802 | - | |
Payment for share issue costs | (877) | - | |
Dividend paid by controlled entity to non-controlling interest | - | (111) | |
Proceeds from borrowings | 3,000 | 2,500 | |
Repayment of borrowings | (7,200) | (9,300) | |
Net cash provided by/(used in) financing activities | 11,725 | (6,911) | |
Net increase/(decrease) in Cash and Cash Equivalents | 900 | (6,258) | |
Cash At The Beginning Of The Year | 3,794 | 10,129 | |
Effects of exchange rate changes on the balance of cash held in foreign currencies | 215 | (77) | |
Cash and Cash Equivalents At The End Of The Year | 4,909 | 3,794 |
8.1 Notes to the consolidated statement of cash flows
| ||||||
31 Oct 2013$'000 | 31 Oct 2012$'000 | |||||
a) Reconciliation of cash | ||||||
Cash and cash equivalents | 4,909 | 3,794 | ||||
Year Ended 31 Oct 2013 $'000 | Year Ended 31 Oct 2012 $'000 | |||||
b) Reconciliation of profit/(loss) for the year to net cash flows from operating activities | ||||||
Profit/(Loss) for the year | 10,374 | (15,589) | ||||
Interest received | (11) | (562) | ||||
Depreciation of non-current assets | 468 | 637 | ||||
Amortisation of non-current assets | 1,875 | 4,704 | ||||
(Profit)/Loss on disposal of non-current assets | (10) | 123 | ||||
Foreign exchange (gain)/loss, including changes in foreign currency net assets and liabilities | (6,534) | 2,290 | ||||
Equity settled share-based payments | 456 | 624 | ||||
Proceeds from asset disposal escrow deposit | - | (23,307) | ||||
(Increase)/decrease in current income tax balances | (4,101) | (6,835) | ||||
(Increase)/decrease in deferred tax balances | (4,320) | (1,435) | ||||
Changes in net assets and liabilities: | ||||||
- (Increase)/decrease in assets: | ||||||
- Trade Receivables | (7,752) | 26,331 | ||||
- Inventories | 84 | 12 | ||||
Increase/(decrease) in liabilities: | ||||||
- Trade and other payables | 327 | (7,428) | ||||
- Provisions | 394 | (747) | ||||
- Other liabilities | (136) | (68) | ||||
Net cash used in operating activities | (8,886) | (21,250) |
9. Net Tangible Assets per security
31 October 2013
| 31 October 2012 | |
Net tangible assets per security | · 10.5 cents | · 2.9 cents |
10. Dividends
Amount | Amount per security | Franked amount per security at 30% tax | Amount per security of foreign source dividend | Date paid/ payable | |
Interim dividend: Current year |
· Nil |
· N/A |
· N/A |
· N/A |
· N/A |
Previous year |
· Nil |
· N/A |
· N/A |
· N/A |
· N/A |
Final dividend: Current year |
· Nil |
· N/A |
· N/A |
· N/A |
· N/A |
Previous year |
· Nil |
· N/A |
· N/A |
· N/A |
· N/A |
There are no Dividend Reinvestment Plans.
11. Control gained over entities
N/A
11.1 Loss of control over entities
N/A
12. Details of associates and joint venture entities
Name of entity | Percentage of ownership interest held at end of period | Aggregate share of net profit (loss) contributed to the reporting entity | ||
Current period | Previous corresponding period | Current period
$A'000 | Previous corresponding period $A'000 | |
Total | · N/A | · N/A | · N/A | · N/A |
13. Subsequent Events
On 19 December 2013 eServGlobal announced an agreement to create a new joint venture with MasterCard and BICS (eServGlobal's current partner in HomeSend) for the international mobile money transfer service, HomeSend. Under the terms of the agreement, eServGlobal and BICS will contribute all of the assets, including staff, that are directly related to the HomeSend business into a newly formed company ("NewCo"). Following the transaction, MasterCard will own 55% of NewCo, eServGlobal will own 35% and BICS will own 10%. Based on the initial shareholdings, MasterCard will be entitled to appoint three directors to the Board of NewCo, eServGlobal will be entitled to make two appointments and BICS will be entitled to nominate one director.
MasterCard will contribute cash for its interest in NewCo with eServGlobal to receive €9.0m ($13.6 million) in cash, which includes €3.45 million ($5.21 million) to be held in escrow, net of a pro rata of NewCo's estimated working capital requirements for the medium term. In addition, MasterCard will enter into a commercial agreement with HomeSend which will have an initial duration of three years and automatic yearly renewal thereafter. The commercial agreement will require MasterCard to use its best endeavors to promote the HomeSend service utilising MasterCard's sales channels.
There are conditions precedent to the creation of the HomeSend joint venture and those conditions, together with a summary of the material terms and conditions of the HomeSend joint venture have been included in the regulatory announcement dated 19 December 2013.
The assets attributable to the HomeSend business (including the allocated goodwill component)have been classified as "Assets classified as held for sale" in the Consolidated Statement of Financial Position as at 31 October 2013.
The creation of the HomeSend joint venture has given rise to an income tax credit, and deferred tax asset, of €4.7 million ($7.2 million) at 31 October 2013.
14. Commentary on Results for the Period
Refer to the explanation of results in Section 2.
15. Accounts
This report is based on accounts which are in the process of being audited.
Director
Print name: PAOLO MONTESSORI Date : 19 December 2013