Final Results
Datacash Group PLC
11 April 2006
Tuesday 11th April 2006
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 its
results for the 12 months to 31 December 2005.
Overview
• Adjusted pre-tax profit* up 66% to £2.53m (2004: £1.52m) - equivalent to an
underlying EPS of 5.65p (2004: 3.40p)
• Turnover up 32% to £6.12m (2004: £4.64m)
• Cash balance of £4.90m (11p per share) (2004: £3.21m)
• Continued strong growth of the core Card Holder Not Present transaction
processing business - transaction volumes increased by more than 50%
year-on-year to 63 million
• Strong growth from retail and gaming customers
• Ongoing investment in technology infrastructure and new product offerings
• High profile contract wins in 2006 and a healthy pipeline of target
customers
• Increased dividend payment of 0.75p per share recommended (2004: 0.50p)
which is payable on 16 June 2006 to shareholders on the register at 12 May
2006.
• Board looks forward to the future with confidence.
* before goodwill amortisation, National Insurance provision on share option
gain and exceptional items.
Contacts:
Keith Butcher Finance Director, DataCash Group Plc 0870 7274760
Isabel Crossley St Brides Media & Finance Ltd 020 7242 4477
Chairman's Statement
DataCash Group plc made further good progress in 2005, with pre-tax profits,
before amortisation of goodwill, NI provision on share option gains and
exceptionals ("Adjusted pre-tax profits") rising more than 60% to £2.53m (2004:
£1.52m) and cash balances growing by £1.69m to £4.90m (2004: £3.21m). The Board
is pleased to recommend a 50% increase in the dividend for the year to 0.75p
(2004: 0.50p).
Turnover grew by more than 30% from £4.64m to £6.12m in 2005, reflecting the
continued growth of the core business of Card Holder Not Present transaction
processing. Costs also increased (by 17%) as we invested in our core technology
infrastructure and in our sales function.
Adjusted pre-tax profits grew by £1m to £2.53m (2004: £1.52m) and underlying
earnings per share were 5.65p (2004: 3.40p). We continue to benefit from
accumulated tax losses.
Transaction growth remained strong, rising by 22m to 63m (2004: 41m), with
particular progress from our retail customers, reflecting the increasing
willingness of UK consumers to buy on-line and the increased penetration of
broadband. The gaming market, which provides in excess of 50% of all our
transactions, continued to see good growth. Our strategy of using skills we have
developed to support the gaming sector to broaden our wider market opportunity
has been vindicated. We are confident of further significant growth in all our
target markets in 2006.
The strategy of offering a complete service to merchants, and not to restrict
ourselves to the online world, has taken some considerable investment and, so
far, has generated very little return. However, we are now seeing a growing
acceptance of the benefits of our approach and are confident the opportunity we
identified more than two years ago will make a contribution.
Product and infrastructure development saw significant investment in 2005 and
this will continue into 2006. The Group also sought to broaden its position both
in terms of product and geographical penetration which included an aborted
acquisition. Unfortunately, the due diligence process revealed issues that meant
the deal could not be consummated upon the terms previously agreed. The cost of
this is shown as an exceptional item of £402,000.
Andrew Dark joined the Group in January 2006 as CEO, bringing considerable
experience of payment systems. Andrew has already made a very positive
contribution and we welcome him to the Group.
I would like to thank all the employees of DataCash, especially Jane Reedy, who
was a Board director until May 2005 and who will retire shortly, for their
contribution during 2005, a year that saw good progress towards achieving our
strategic goals.
The Board looks forward with confidence and expectations of good revenue and
profits growth in 2006.
David Bailey
Chairman
Consolidated Profit & Loss Account
For the year ended 31 December 2005
Restated
Year ended 31 Dec Year ended 31 Dec
2005 2004
£'000 £'000
Note
Turnover 6,116 4,643
Administrative expenses
Amortisation of Goodwill (1,975) (1,975)
National insurance on share option charge (34) (125)
Severance payments (73) -
Aborted acquisition costs (402) -
Other operating expenses (3,754) (3,210)
Total administrative expenses (6,238) (5,310)
Operating loss (122) (667)
Interest receivable and similar income 167 87
Profit/(Loss) on ordinary activities before taxation 45 (580)
Taxation (687) 228
Loss on ordinary activities after taxation (642) (352)
Basic and diluted loss per share 2 (1.43)p (0.79)p
The group's loss for the year arises from the groups' continuing operations.
All recognised gains and losses are included in the profit and loss account.
Consolidated Balance Sheet
As at 31 December 2005
Restated
31 Dec 2005 31 Dec 2004
Note £'000 £'000
Fixed assets
Intangible assets 8,337 10,312
Tangible assets 161 190
Investments - -
8,498 10,502
Current assets
Debtors 966 741
Debtors - deferred tax asset 522 1,175
Cash at bank and in hand 4,895 3,206
6,383 5,122
Creditors
Amounts falling due within one year (1,225) (1,187)
Net current assets 5,158 3,935
Total assets less current liabilities 13,656 14,437
Provisions for liabilities and charges (148) (125)
13,508 14,312
Capital and reserves
Called up share capital 449 448
Share premium account 9,811 9,750
Merger reserve (124) (124)
Other reserve 18,889 18,889
Profit and loss account (15,517) (14,651)
Equity shareholders' funds 5 13,508 14,312
Consolidated Cash Flow Statement
For the year ended 31 December 2005
Year ended 31 Dec Year ended 31 Dec
2005 2004
£'000 £'000
Note
Net cash inflow from operating activities 3 1,775 1,678
Returns on investments and servicing of finance
Interest received 167 87
Net cash inflow from returns on investments and servicing
of finance 167 87
Taxation (17) -
Capital expenditure and financial investment
Purchase of tangible fixed assets (73) (158)
Sale of tangible fixed assets - 1
Net cash outflow from capital expenditure and financial (73) (157)
investments
Equity dividends paid (224) -
Net cash inflow before management of liquid resources and
financing 1,628 1,608
Management of liquid resources
(Increase)/Decrease in short term bank deposits (3,289) 112
Net cash (outflow)/inflow from management of liquid
resources (3,289) 112
Financing
Exercise of share options 61 50
Net cash inflow from financing 61 50
(Decrease)/Increase in cash in the year (1,600) 1,770
Reconciliation of Net Cash Flow to Movement in Net Funds
For the year ended 31 December 2005
Year ended 31 Dec Year ended 31 Dec
2005 2004
£'000 £'000
(Decrease)/increase in cash in the year (1,600) 1,770
Cash inflow/(outflow) from management of liquid resources 3,289 (112)
Movement in net funds 1,689 1,658
Opening net funds 3,206 1,548
Closing net funds 4,895 3,206
Notes to the Financial Statements
For the year ended 31 December 2005
1. Basis of Preparation
The results for the year ended 31 December 2005 have been prepared on accounting
bases and policies which are consistent with those used in the preparation of
the financial statements of the Group for the year ended 31 December 2004 with
the exception of the prior year adjustment explained below.
In the current year, the group has adopted FRS 21 - Post Balance Sheets Events -
for the first time. As a result dividends can only be recognised once they have
been passed at a General meeting of the members, in the case of final dividends,
and the period in which they were paid in the case of Interim dividends.
This has had the effect of increasing the brought forward profit and loss
reserve by reversing the proposed dividend of £224,000 - 2004 accounts and
reducing the creditor (proposed dividend) by the same amount.
The above financial information does not constitute statutory accounts as
defined by section 240 of the Companies Act 1985. It is an extract from the 2005
financial statements, which have not yet been filed with the Registrar of
Companies. The Auditors' Report, dated 11 April 2006, on the financial
statements for the year ended 31 December 2005, which received an unqualified
opinion, does not contain a statement under section 237(2) or (3) of the
Companies Act 1985. The comparative information is an extract from the statutory
accounts for the financial year ended 31 December 2004. Those accounts, on which
the Auditors issued an unqualified opinion, in accordance with section 235 of
the Companies Act 1985, have been filed with the Registrar of Companies.
2. Loss per Share
The basic and diluted loss per share is based on the loss on ordinary activities
after tax of £642,000 (December 2004: loss £352,000). The weighted average
number of ordinary shares outstanding during the period used in the calculation
of basic loss per share was 44,816,905 (December 2004: 44,737,684).
Due to the loss incurred in the year and the prior year, there is no dilutive
effect from the issue of share options.
An adjusted earnings per share figure is presented below. The directors believe
that the adjusted earnings per share figure assists in the presentation of the
group's underlying performance.
Year ended 31 Dec Year ended 31 Dec
2005 2004
£'000 £'000
Loss on ordinary activities after taxation (642) (352)
Amortisation of Goodwill 1,975 1,975
Provision for national insurance on share option gains 34 125
Severance payments 73 -
Aborted acquisition costs 402 -
Profit on ordinary activities before goodwill, NI on share option 1,842 1,748
gains and exceptionals
No. of shares No. of shares
Weighted average number of shares 44,816,905 44,737,684
Dilutive effect of options 979,005 1,380,649
45,795,910 46,118,333
Diluted Adjusted Earnings per share 4.02p 3.79p
3. Reconciliation of operating loss to operating cash flows
Year ended 31 Dec Year ended 31 Dec
2005 2004
£'000 £'000
Operating loss (122) (667)
Amortisation 1,975 1,975
Depreciation 102 94
Profit on disposal of fixed assets - (1)
Increase in debtors (225) (88)
Increase in creditors 22 262
Increase in provisions 23 103
Net cash inflow from operating activities 1,775 1,678
4 Analysis of Net Funds
At 1 January Cash Flow At 31 December
2005 2005
£'000 £'000 £'000
Cash in hand and at bank 2,317 (1,600) 717
Short term bank deposits 889 3,289 4,178
Total 3,206 1,689 4,895
5. Reconciliation of movement in shareholders' funds
Restated
Year ended 31 Dec Year ended 31 Dec
2005 2004
£'000 £'000
Loss for the year (642) (576)
Prior year adjustment - 224
As restated (642) (352)
Dividend paid (224) -
Issue of Ordinary Share Capital including premium 61 50
Net movement in shareholders' funds (805) (302)
Opening shareholders' funds 14,313 14,615
Net cash inflow from operating activities 13,508 14,313
NOTE
A copy of the full accounts will be sent to shareholders on the Register Of
Members as at 11 April 2006 or can be obtained from the Secretary, DataCash
Group plc, Descartes House, 8 Gate Street, London WC2A 3HP.
ANNUAL GENERAL MEETING
The Company's AGM will be held on 17th May 2006 at 12.00 noon at Descartes
House, 8 Gate Street, London WC2A 3HP
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Wednesday, 15th May 2024
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