Final Results
Datacash Group PLC
06 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 its
results 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 7274760
Adrew Dark Chief Operating Officer, DataCash Group Plc 0870 7274760
Chairman's Statement
2007 was another successful year for DataCash Group. Revenues, profit and cash
balances all rose satisfactorily, and we implemented some significant technology
enhancements that will provide strong growth opportunities for 2008 and beyond.
We also acquired a foothold in the airlines sector through the acquisition of
Eurocommerce.
In the year we grew revenues to £20.45m (2006 £16.41m); Adjusted Pre-tax Profits
to £11.2m (2006 £7.8m) and adjusted earnings per share from 8p to 9.4p. Having
paid our first interim dividend of 0.3p in November, the Board is pleased to
announce an increased final dividend of 1.1p per share, making a total dividend
increase for the year of 40% to 1.4p (2006 1p).
The Group has a strategy to provide the most comprehensive set of payment and
risk management solutions to both UK and international merchants, with a
particular focus on domestic and cross-border e-commerce. We made good progress
in 2007 towards achieving this.
The value of transactions processed in 2007, for the Group as a whole, rose to
some £12bn (2006: £7.3bn), which places us at the forefront of European payment
and risk service providers. Our range of products also sets us apart from our
competitors. Historically we offered our UK customers only a card processing
solution. Now, in addition to the e-commerce payment processing services, we
provide card holder present processing for leading UK high street retailers and
sportsbook operators, middle and back office processing for international casino
and poker operators, risk management services for UK and international
e-commerce merchants, access to various alternative payment types such as
PayPal, UKash and a wide range of e-wallets as well as international bank
account management and reconciliation services for our customers. This provides
a deeper and closer relationship with our customers and enables us to better
understand and service their individual needs.
One of our objectives for 2007 was to offer the increasingly wide range of
service offerings to all our customers, both present and putative, from a single
technology platform. This required significant analysis and investment, but is
now being deployed, so that we can easily make available our wide range of
services to all our clients, and allows us to quickly integrate future
acquisitions into our offering. The materially improved functionality that the
integration provides will, we believe, provide growth opportunities for many
years to come.
The Eurocommerce acquisition, announced in the Autumn, brought important
connections to airlines and, in particular, the reservation and booking systems
that airlines use. It also provided new connections to European banks and well
established financial instruments highly pertinent to our existing customers and
prospects. Although it was a small acquisition, and is expected to be
loss-making through 2008, we believe that the global opportunities in the travel
market are very significant and that by utilising our skills in risk management
and in payment types other than credit and debit cards, we can become a global
leader in supplying this market sector.
As a result of the uncompleted acquisition of NetGiro Systems AB, a Swedish
based Payment service provider, DataCash received an exceptional payment of
£941,000, net of costs. The acquisition offered to provide both a European and a
North American sales capability. We have since recruited a North American sales
resource and the Eurocommerce acquisition has given us access to an
internationally focussed sales resource.
We continue to explore acquisition opportunities in both geographic and vertical
market sectors. We anticipate that most of the consideration for any deals is
likely to come from our existing cash resources.
Net Cash (including security deposits) as at December 2007 stood at £17.90m or
19p per share (2006 £15.28m), after sizeable IT expenditure, share purchases in
to our Employee Share Ownership Trust as well as the initial Eurocommerce
purchase consideration.
However, the Group remains highly cash generative, and we expect cash balances
(subject to any acquisition expenditure) to rise considerably in 2008. We are
therefore pleased to continue our progressive dividend policy with an overall
increase 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 matched
our expectations. Growth in transaction processing in 2007 increased by 28% a
trend which has continued into 2008. We see the growth of e-commerce, both in
the UK and internationally, will continue to be strong, and that the continued
attempts from organised crime to use card fraud as a prime source of income will
maintain the heightened demand for our global Risk services offer. UK retailers
continue to view the outsource of cardholder present payment services as an
increasingly attractive option and we believe the combined strength of our
domestic and international product offering will see the Group maintain its
position as one of the leading global solution providers of payment and risk
services and place it in a premium position to take advantage of the growth in
all sectors.
As reported previously, Gavin Breeze, the founder of DataCash, stepped down from
the Board at the end of March, although he remains an active consultant to the
Group. The Board would like to express our thanks for his contributions.
Andrew Dark, currently the Chief Operating Officer, will become the Chief
Executive of the Group with effect from June 1st. Andrew joined the business in
January 2006 and has made significant contributions to the integration of our
PCS acquisition and the development of our technology platform. We are delighted
that 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 Standards
as its primary accounting basis for the year ending 31 December 2007. As part of
this transition, Datacash is presenting unaudited financial information prepared
in accordance with IFRS for the year ended 31 December 2006 and for the year
ended 31 December 2007.
The principal changes to the Group's reported financial information under UK
GAAP*** 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 IFRS
is to reduce profit attributable to equity shareholders by £5.02m, comprising
principally the amortisation and impairment of intangible assets, and to reduce
net assets for the Group at 31 December 2007 from £90.82m to £77.96m.
*** throughout this statement 'UK GAAP' means the accounting standards and
framework in issue at 31 December 2006, which were applied to the financial
statements of the Group for the year ended 31 December 2006.
1. BASIS OF PREPARATION
The financial information presented in this documentation has been prepared
using accounting policies consistent with International Financial Reporting
Standards (IFRS) as adopted by the European Union and International Financial
Reporting Interpretations Committee (IFRIC) interpretations that are applicable
for the year ending 31 December 2007
The financial information contained in this document does not constitute
statutory 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 audited
financial statements.Those financial statements which were prepared under UK
GAAP have been reported on by the Group's auditors and delivered to the
registrar of companies. The audit report was unqualified, did not include
references to matters to which the auditors drew attention by way of emphasis
without qualifying their report and did not contain a statement under section
237(2) or (3) of the Companies Act 2005.
The disclosures required by IFRS 1 concerning the transition from UK GAAP to
IFRS 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 requires
that the Group establishes its IFRS accounting policies at its date of
transition, 1 January 2006, and applies these prospectively. The standard allows
a number of optional exemptions on transition to help companies simplify the
move 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 transition
to 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 provisions
of FRS 20 are in line with IFRS 2 and no changes to the comparative figures are
required.
The Group has adopted the exemption to apply IFRS 2 'Share-based payment' only
to 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 accordance
with IAS 1 'Presentation of financial information' from that presented under UK
GAAP. 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 of
the company and entities controlled by the company (its subsidiaries) for the
year ended 31 December 2007. Control is achieved where the company has the power
to govern the financial and operating policies of an investee entity so as to
obtain benefits from its activities.
Where necessary, adjustments are made to the financial statements of
subsidiaries to bring the accounting policies used into line with those used by
the Group. All intra-Group transactions, balances, income and expenses are
eliminated on consolidation.
(b) Acquisition method of accounting
The cost of the acquisition is measured at the aggregate of the fair values, at
the date of exchange, of assets given, liabilities incurred or assumed, and
equity instruments issued by the Group in exchange for control of the acquiree,
plus any costs directly attributable to the business combination. The acquiree's
identifiable assets, liabilities and contingent liabilities that meet the
conditions for recognition under IFRS 3 are recognised at their fair value at
the acquisition date.
(c) Merger method of accounting
Under IFRS 1, the Group is not required to restate acquisitions or business
combinations prior to the date of transition. Therefore, the Group is permitted
to retain its historical merger accounting position in the consolidated
accounts.
(d) Goodwill
Goodwill arising on consolidation represents the excess of the cost of
acquisition over the Group's interest in the fair value of the identifiable
assets and liabilities of a subsidiary. Goodwill is initially recognised as an
asset at cost and is subsequently measured at cost less any accumulated
impairment losses.
For the purpose of impairment testing, goodwill is allocated to each of the
Group's cash-generating units expected to benefit from the synergies of the
combination. Cash-generating units to which goodwill has been allocated are
tested for impairment annually, or more frequently when there is an indication
that the goodwill may be impaired. If the recoverable amount of the cash-
generating unit is less than the carrying amount of the unit, the impairment
loss is allocated first to reduce the carrying amount of any goodwill allocated
to the unit and then to the other assets of the unit pro rata on the basis of
the 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 has
been retained at the previous UK GAAP net book value subject to being tested
for impairment at that date.
(e) Revenue recognition
Revenue is measured at the fair value of the consideration received or
receivable and represents amounts receivable for services provided in the
normal 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, but
before finance income and finance costs.
(g) Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation
and any provision for impairment. Cost comprises all costs that are directly
attributable to bringing the asset into working condition for its intended use.
Depreciation is calculated to write down the cost of assets to their residual
values on a straight-line basis over the following estimated useful economic
lives:
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 or
changes in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognised for the amount by which the
asset's carrying amount exceeds its recoverable amount. The recoverable amount
is 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 to
the asset. For the purpose of assessing impairment, assets are Grouped at the
lowest levels for which there are separately identifiable cash flows (Cash
Generating Units).
(i) Intangible assets - arising on business combinations
In accordance with IFRS 3 Business Combinations, goodwill arising on
acquisitions is capitalised as an intangible asset. Other intangible assets
are 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 in
which it was incurred.
An internally generated intangible asset arising from the development of
software 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 useful
lives which is between three to six years. Where no internally generated
intangible asset can be recognized, development expenditure is charged to income
statement 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-term
deposits with an original maturity period of three months or less.
(l) Trade receivables
Trade receivables are recognized initially at fair value and subsequently
measured at amortised cost using the effective interest rate method less
provision for impairment. A provision for impairment of trade receivables is
established where there is objective evidence that the Group will not be able to
collect 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 in
payments are considered indicators that the trade receivable is impaired.
When a trade receivable is uncollectible, it is written off against the
provision for trade receivables. Subsequent recoveries of amounts previously
written off are credited against selling and administrative expenses in the
income statement.
(m) Trade payables
Trade payables represent the amount of invoices received from suppliers for
purchases of goods and services for which payment has not been made. Trade
payables are recognised at fair value and subsequently measured at amortised
cost 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. Taxable
profit differs from profit as reported in the income statement because it
excludes items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible. The
Group's liability for current tax is calculated using tax rates that have been
enacted or substantively enacted by the balance sheet date.
Deferred tax is recognized on differences between the carrying amounts of the
assets and liabilities in the financial statements and the corresponding tax
bases used in the computation of taxable profit and is accounted for using the
balance sheet liability method. Deferred tax liabilities are generally
recognised for all taxable temporary differences. Deferred tax assets are
recognised to the extent that it is probable that taxable profits will be
available against which deductible temporary differences can be utilized. Such
assets and liabilities are not recognized if the temporary difference arises
from goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that affects
neither the taxable profit nor accounting profit.
Deferred tax liabilities are recognized for taxable temporary differences
arising on investments in subsidiaries and associates and interests in joint
ventures, except where the Group is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset realized based on the tax
rates 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, except
when it relates to items charged or credited directly to equity, in which case
the deferred tax is also dealt with in equity.
Tax assets and liabilities are offset when there is a legally enforceable right
to set off current assets against current tax liabilities and when they relate
to income tax levies by the same taxation authority and the Group intends to
settle its current tax assets and liabilities on a net basis.
In recognizing income tax assets and liabilities, management makes estimates of
the likely outcome of decisions by tax authorities on transactions and events
whose treatment for tax purposes is uncertain. Where the financial outcome of
such matters is different, or expected to be different, from previous
assessments made by management, a change to the carrying value of income tax
assets and liabilities will be recorded in a period in which such a
determination is made. The carrying values of income taxes and liabilities are
disclosed separately in the Consolidated Balance Sheet.
(o) Foreign currency translation
The individual financial statements of each Group entity are presented in the
currency of the primary economic environment in which the entity operates (its
functional currency). For the purpose of the consolidated financial statements,
the results and financial position of each entity are expressed in Pounds
Sterling, which is the functional currency of the company and presentational
currency for the consolidated financial statements.
In preparing the financial statements of the individual entities, transactions
in currencies other than the entity's functional currency ("foreign
currencies") are recorded at the rates of exchange prevailing on the dates of
the transactions. At each balance sheet date, monetary items denominated in
foreign currencies are retranslated at the rates prevailing on the balance
sheet date. Non-monetary items carried at the fair value that are denominated in
foreign currencies are retranslated at the rates prevailing on the date when the
fair value was determined. Non-monetary items that are measured in terms of
historical cost in a foreign currency are not retranslated.
Exchange differences arising on the settlement of monetary items and on the
retranslation of monetary items, are included in profit and loss for the
period. Exchange differences arising on the retranslation of non-monetary items
carried at fair value are included in the profit and loss for the period except
for differences arising on the retranslation of non-monetary items in respect
of which gains and losses are recognized directly in equity. For such non-
monetary items, any exchange component of that gain or loss is also recognized
directly in equity.
For the purpose of presenting consolidated financial statements, the assets and
liabilities of the Group's foreign operations (including comparatives) are
expressed in Pounds Sterling using exchange rates prevailing on the balance
sheet date. Income and expense items (including comparatives) are translated at
the average exchange rates for the period, in which case the exchange rates at
the 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 foreign
operation are treated as assets and liabilities of the foreign operation and
translated at the closing rate.
When a foreign operation is partially disposed of or sold, exchange differences
that were recorded in equity are recognized in the income statement as part of
the gain or loss on sale.
(p) Leasing
An operating lease does not transfer the risk or rewards of ownership to the
Group. Rentals payable under operating leases are charged to income on a
straight-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 a
straight-line basis over the lease term.
(q) Equity share-based employee remuneration
The Group issues options to certain employees. The fair value of options
granted is recognised as an employee expense, with a corresponding increase in
equity reserves. The fair value is recognised at the grant date and spread over
the period until the employees become unconditionally entitled to the options.
The fair value of the options granted is measured using either the Black
Scholes or Binomial option pricing model, taking into account the terms and
conditions on which the options were granted. The amount recognised as an
expense is adjusted to reflect the actual number of share options expected to
vest 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 to
the 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 of
a past event, and it is probable that the Group will be required to settle that
obligation. Provisions are measured at the directors' best estimate of the
expenditure required to settle the obligation at the balance sheet date, and are
discounted to present value where the effect is material.
(t) Critical accounting estimates and judgments
In preparing the Consolidated Financial Statements, management has to make
judgements on how to apply the Group's accounting policies and make estimates
about the future. The critical judgements that have been made in arriving at the
amounts recognized in the Consolidated Financial Statements and the key sources
of estimation uncertainty that have a significant risk of causing a material
adjustment to the carrying value of assets and liabilities in the next financial
year, as discussed below:
Acquisitions
When acquiring a business, we have to make judgements and best estimates about
the fair value of the assets, liabilities and contingent liabilities acquired.
We seek appropriate competent and professional advice before making such
allocations.
Impairment reviews
The Group tests annually whether goodwill has suffered any impairment. In
accordance with the accounting policy stated above. The recoverable amounts of
cash-generating units have been determined based on value-in-use calculations.
These calculations require the use of estimates including discount rates and
growth 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, any
intangible assets acquired within the business are valued separately and
capitalised 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 an
annual impairment review, whereas intangible assets are amortised over their
useful lives.
The Group has recognised intangible assets on acquisition in relation to
contracts. The amount in the Group balance sheet in respect of all intangible
assets 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 these
assets was £15.6 m for the year ended 31 December 2006.
Under IAS 36 Impairment of assets, the carrying values of all intangible assets
are reviewed annually for impairment on the basis stipulated in IAS 36 and
adjusted to the recoverable amount. Typically, such a review will entail an
assessment of the present value of projected returns from the asset. The amount
of impairment charged to the income statement was £22m for the year ended 31
December 2006.
2) Deferred and current taxes
The scope of IAS 12 Income Taxes is wider than the corresponding UK GAAP
standards, and requires deferred tax to be provided on the majority of
temporary differences, rather than just on timing differences as under UK GAAP.
In particular this has resulted in deferred tax assets and liabilities being
set up in respect of differences between the net book value and the tax base of
intangible assets.
A deferred tax liability has been set up on creation of these intangibles and is
released over the period over which the assets are amortised. The impact on
the 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 of
intangibles stood at £4.4 m at 31 December 2006.
The consolidated cash flow statement presented under IFRS presents substantially
the same information as that required under UK GAAP.
Datacash Group plc
Consolidated Income
statement
For the year ended 31
December 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
Administrative
expenses
National insurance on
share 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 before
exceptional 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 aborted
acquisition (net of costs) 941 -
Share of loss in joint
venture (7) (6)
Profit/(loss) before
taxation 6,822 (14,020)
Taxation (2,508) 174
Profit/(loss) on ordinary
activities 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 Statement
For 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 910 351
Compensation for acquisition 941 -
Tax Paid (2,890) (193)
Net cash inflow from operating activities 9,343 6,069
Cashflow from investing activities
Acquisition of subsidiaries (net of cash) (875) 694
Investment 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 activities
Net proceeds from issue of share capital 459 391
Redemption 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
DataCash
Group plc
Consolidated Statement of Changes in Equity
For 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 £000
At 1 January
2006 449 9,811 - 34 - 18,765 (15,551) 13,508
Profit for
the
period - - - - - (13,846) (13,846)
Exchange
differences on
translation of
overseas
operations - - (121) - - - (121)
Total
recognised
income and
expense for
2006 449 9,811 (121) 34 - 18,765 (29,397) (459)
Share-based
payments - - - 1,047 - - 1,047
Merger
reserve
on
acquisition
of
subsidiary - - - - 76,351 - 76,351
Tax Effect
in
Equity 443 (2,525) (2,082)
Dividends
paid - - - - - (337) (337)
Issue of
shares 459 381 - - - - 840
At 31
December
2006 908 10,192 (121) 1,524 - 95,116 (32,259) 75,360
Profit for
the
period - - - - - 4,314 4,314
Exchange
differences on
translation of
overseas
operations - - (103) - - - (103)
Total
recognised
income and
expense for
2007 908 10,192 (224) 1,524 - 95,116 (27,945) 79,571
Share-based
payments - - - 71 - - - 71
Tax Effect
in
Equity 182 182
Merger
reserve
on
acquisition
of
subsidiary - - - - - (440) - (440)
Dividends
paid - - - - - - (1,193) (1,193)
Own shares - - - - (685) - - (685)
Issue of
shares 11 448 - - - - - 459
At 31
December
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 ordinary
activities after tax of £4,314,000 (2006: £13,846,000 loss). The weighted
average number of ordinary shares outstanding during the period used in the
calculation 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 share
options, has been calculated on 91,862,448 (2006: 72,033,691) Ordinary Shares.
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.
The calculations of profit/(loss) per share are based on the following profits
and numbers of shares:
The adjusted profit/(loss) per share is based on the profit/(loss) after tax
before 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 71,768,371
Share 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 7,991
Amortisation 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) p
Diluted earnings per share 4.69 p (19.29) p
Headline basic earnings per share 10.52 p 11.13 p
Headline diluted earnings per share 10.44 p 11.13 p
Basic earnings per share has been calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average number of
ordinary shares in issue during the period, determined in accordance with IAS33
Earnings per share.
Diluted earnings per share is calculated by adjusting the weighted average
number of ordinary shares in issue on the assumption of conversion of all the
potentially dilutive ordinary shares for which all the conditions have been met.
Headline earnings per share is calculated after adjusting earnings for share
based payment expenses and National Insurance on share option gains.
Datacash Group plc
Reconciliation of
Consolidated Balance Sheet
As 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 £000
Non current assets
Intangible assets 8,337 - - 8,337
Tangible assets 161 - 161
Investments in joint ventures - - -
Investments - - -
Deferred tax asset 522 - 522
------- --------- ------ ------- -------
9,020 - - - 9,020
------- --------- ------ ------- -------
Current assets
Debtors 966 - 966
Cash at bank and in hand 4,895 - 4,895
------- --------- ------ ------- -------
5,861 - - 5,861
------- --------- ------ ------- -------
Current liabilities
Amounts falling due within
one year (1,225) 34 34 (1191)
Current tax liabilities - (34) (34) (34)
------- --------- ------ ------- -------
Net current assets 4,636 - - - 4,636
------- --------- ------ ------- -------
Total assets less current
liabilities 13,656 - - - 13,656
Non-current liabilities (148) - (148)
------- --------- ------ ------- -------
Net assets 13,508 - - - 13,508
======= ========= ====== ======= =======
Capital and reserves
Called up share capital 449 - 449
Share premium account 9,811 - 9,811
Foreign Currency Translation - - -
Reserve
Share Option Reserve 34 - 34
Other Reserves 18,765 - 18,765
Profit and loss account (15,551) - - - (15,551)
------- --------- ------- ------- -------
Total equity 13,508 - - - 13,508
======= ========= ======= ======= =======
Reconciliation of Consolidated Balance Sheet
As 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 assets
Intangible assets - 15,143 - 15,143 15,143
Goodwill 74,184 (30,766) 4,400 (26,366) 47,818
Tangible assets 1,000 - 1,000
Investments in joint (6) - (6)
ventures
Investments 163 - 163
Deferred tax asset 128 162 162 290
75,469 (15,461) 4,400 (11,061) 64,408
Current assets
Trade and other receivables 8,380 - 8,380
Cash at bank and in hand 11,280 - 11,280
19,660 - - 19,660
Current liabilities
Trade 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 current
liabilities 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 reserves
Called up share capital 908 - 908
Share premium account 10,192 - 10,192
Foreign Currency
Translation (121) - (121)
Reserve
Merger Reserve - - -
Share Option Reserve 1,081 443 443 1,524
Other Reserves 95,116 - 95,116
Profit 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 Statement
For 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 £000
Revenue: Group and
share of joint ventures 16,750 16,750
Less: share of joint
venture turnover (345) (345)
Revenue 16,405 - - 16,405
Administrative
expenses (8,933) - (8,933)
Share option charge (34) - (34)
National Insurance
on share option
charge (2) - (2)
Total administrative
expenses (8,969) - - (8,969)
Operating profit
before goodwill and
exceptional items 7,436 - - 7,436
Goodwill
amortisation (6,178) (15,623) (15,623) (21,801)
Group operating
profit 1,258 (15,623) (15,623) (14,365)
Share of operating
loss in joint
venture (6) - (6)
Total operating
profit 1,252 (15,623) (15,623) (14,371)
Finance income 351 - 351
Compensation for - - -
aborted acquisition
(net of costs)
Profit on ordinary
activities before
taxation 1,603 (15,623) (15,623) (14,020)
Taxation (2,070) 2,244 2,244 174
Profit on ordinary
activities after
taxation (467) (13,379) (13,379) (13,846)
Basic
earnings/(loss) per
share (0.65) p (18.64) p (18.64) p (19.29) p
Diluted
earnings/(loss) per
share (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 2,070
Finance Income (910) (351)
Compensation for loss of acquisition (941) -
Impairment of goodwill and 5,022 21,801
intangibles
Depreciation 482 282
Loss from sale of fixed assets 5 -
Loss on Joint Venture 7 6
Share option charge 71 34
Exchange movements (102) (44)
Changes in trade and other 2,121 (1,052)
receivables
Changes in trade and other payables (2,278) (776)
Increase in provisions 82 31
Cash generated from continuing 10,382 5,911
operations
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