Interim Results

Auxinet PLC 19 September 2002 Auxinet Interim results for the six months to 30 June 2002 â€¢ Good progress in the first six months towards the expectation of becoming both profitable and cash flow positive in the course of 2002 â€¢ Interim losses reduced to Â£276,000 from Â£1.99m (before goodwill amortisation) on continuing business. â€¢ DataCash processed 8.6m transactions in the first six months of 2002 compared with 3.6m in first six months of 2001 â€¢ Introduction of the first on-line paperless Direct Debit product from a Payment Service Provider â€¢ Company forecast to be cash positive in second half â€¢ We expect September to be profitable, before goodwill amortisation, and cash generative David Bailey, Chairman, said ' In September we confidently expect to cross the line into profitability (before goodwill amortisation)......we also expect to become cash generative which is a significant milestone in the Company's history ........We are exploring strategies to accelerate our rate of growth, without incurring a significant increase in our cost base' For further information please contact: David Bailey, Chairman 07836 258558 or Keith Butcher, Finance Director 0870 7274760. AUXINET INTERIM STATEMENT 6 months to 30 June 2002 The first six months of 2002 saw the Auxinet group make good progress towards its expectations of becoming both profitable and cash flow positive in the course of 2002. First half revenues rose to Â£1.24m and losses, before amortisation of goodwill, were reduced to Â£276,000 from Â£1.99m on continuing business. Overheads were reduced significantly, and we believe that the current business infrastructure will support substantial growth at minimal additional cost. Following sizeable increases in peak demand from our betting merchants we invested in further system enhancements and have increased our capacity to in excess of 100m transactions per month. The architecture is capable of further capacity increase at very modest expense. DataCash processed some 8.6m transactions in the first half, up from 3.6m in the first half of 2001, and 5.6m in the second half of 2001. We have continued to develop new products that not only support our current merchant base, but also provides new market opportunities. This included the first on-line paperless direct debit provided by a PSP (Payment Service Provider). These are beginning to yield revenues, and the real benefit is expected to come through in 2003. We have continued to build our quality merchant base, and continue to explore commercial opportunities in the business-to-business area. Since June the company has continued to trade well: In September we confidently expect to cross the line into profitability (before goodwill amortisation). Given the nature of the underlying business dynamics, the company should continue to grow both revenues and profits. In September we also expect to become cash generative, which is a significant milestone in the Company's history, and to be cash positive for the second half. We are exploring strategies to accelerate our rate of growth, without incurring a significant increase in our cost base. David Bailey Chairman 19 September 2002 Auxinet plc Consolidated profit and loss account (unaudited) For the 6 months ended 30 June 2002 Restated 6 months ended 6 months ended Year ended 30 June 30 June 31 December 2002 2001 2001 Â£000 Â£000 Â£000 Note Turnover Continuing operations 1,244 1,029 2,073 Discontinued operations - 1,081 971 ------------ ------------ ------------ 1,244 2,110 3,044 Administrative expenses Amortisation of goodwill (988) (988) (1,975) Reduction in provision for national insurance on share option gains 2 8 139 157 Severance payments - - (112) Other (1,540) (4,919) (7,714) ------------ ------------ ------------ (2,520) (5,768) (9,644) Operating loss Continuing operations (1,276) (3,012) (6,170) Discontinued operations - (646) (430) ------------ ------------ ------------ (1,276) (3,658) (6,600) Interest receivable and similar income 12 34 65 Amounts written off investments - - (310) Interest payable and similar charges - (3) (3) ------------ ------------ ------------ Loss on ordinary activities before (1,264) (3,627) (6,848) taxation Tax on loss on ordinary activities - - - ------------ ------------ ------------ Loss on ordinary activities after taxation (1,264) (3,627) (6,848) Dividends - - - ------------ ------------ ------------ Retained loss for the period (1,264) (3,627) (6,848) ======= ======= ======= Basic and diluted loss per share 4 (2.91) (9.60) (16.96) Diluted Earnings per Share 0 0 0 0 Adjusted basic and diluted loss per share 4 (0.65) (7.35) (12.18) All amounts relate to continuing activities. There were no recognised gains or losses other than those shown in the profit and loss account. There are no differences between historical cost profits and losses and those shown above. Auxinet plc Consolidated balance sheet (unaudited) As at 30 June 2002 Restated As at As at As at 30 June 30 June 31 December 2002 2001 2001 Â£000 Â£000 Â£000 Fixed assets Intangible assets 15,249 17,225 16,237 Tangible assets 252 2,222 312 Investments 170 520 210 ------------ ------------ ------------ 15,671 19,967 16,759 ------------ ------------ ------------ Current assets Debtors 513 1,069 728 Cash at bank and in hand 748 453 951 ------------ ------------ ------------ 1,261 1,522 1,679 ------------ ------------ ------------ Creditors Amounts falling due within one year (1,161) (2,081) (1,466) ------------ ------------ ------------ Net current assets/(liabilities) 100 (559) 213 ------------ ------------ ------------ Total assets less current liabilities 15,771 19,408 16,972 Creditors Amounts falling due after more than one year - - - Provisions for liabilities and charges (517) (33) (525) ------------ ------------ ------------ Net assets 15,254 19,375 16,447 ======= ======= ======= Capital and reserves Called up share capital 436 379 432 Share premium account 9,509 7,452 9,442 Share scheme reserve 4 19 19 Merger reserve (124) (124) (124) Other reserve 18,889 18,889 18,889 Profit and loss account (13,461) (7,240) (12,211) ------------ ------------ ------------ Equity shareholders' funds 15,254 19,375 16,447 ======= ======= ======= Auxinet plc Consolidated cash flow statement (unaudited) For the 6 months ended 30 June 2002 Restated 6 months 6 months ended 30 ended 30 Year ended 31 June June December 2002 2001 2001 Â£000 Â£000 Â£000 Net cash outflow from operating activities Note (5) (296) (1,620) (3,885) ------------ ------------ ------------ Returns on investments and servicing of finance Interest received 12 34 65 Interest paid - (3) (3) Interest element of finance lease rental payments - (4) - Net cash inflow from returns on investments ------------ ------------ ------------ and servicing of finance 12 27 62 ------------ ------------ ------------ Capital expenditure and financial investment Purchase of tangible fixed assets (30) (988) (277) Sale of tangible fixed assets - - 35 Decrease/(increase) in investment loans 40 (50) (50) ------------ ------------ ------------ Net cash inflow/(outflow) from capital expenditure and 10 (1,038) (292) financial investments ------------ ------------ ------------ ------------ ------------ ------------ Net cash outflow before management of liquid resources (274) (2,631) (4,115) and financing Management of liquid resources Decrease in short term bank deposits 404 2,526 1,837 ------------ ------------ ------------ Net cash inflow from management of liquid resources 404 2,526 1,837 ------------ ------------ ------------ Financing Capital element of finance lease rental payments - (13) (58) Issue of Ordinary Share Capital including premium net of - - 2,027 expenses Exercise of share options 71 17 18 ------------ ------------ ------------ Net cash inflow from financing 71 4 1,987 ------------ ------------ ------------ ------------ ------------ ------------ Increase/(decrease) in cash in the period 201 (101) (291) ======= ======= ======= Notes 1. Basis of preparation The results for the six months ended 30 June 2002 and the comparative figures for the six months ended 30 June 2001 are unaudited. They have been prepared on accounting bases and policies that are consistent with those used in the preparation of the financial statements of the Group for the year ended 31 December 2001. The financial information contained in this report does not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985 (as amended). The results for the year ended 31 December 2001 were reported on by the auditors and received an unqualified report and contained no statement under Section 237(2) or (3) of the Companies Act 1985 (as amended). Full accounts have been delivered to the Registrar of Companies and are available on request. Continuing operations relate entirely to the electronic payments business, which remains as the principal activity of the group. The discontinued operations relate to the recruitment business, which the group exited in August 2001. 2. Exceptional item The exceptional item in 2002 relates to a release in provisions of Â£8,000 representing national insurance contributions on share option gains. 3. Restatement of 6 months ended 30 June 2001 The comparative results for the six months ended 30 June 2001 have been restated to take account of the change in accounting policy as reported in the accounts for the year ended 31 December 2001. This is to reflect the directors belief that software development costs of the group's core business should be expensed as they are incurred. The effect of the change in accounting policy is to decrease the reported operating profit for the six months to June 2001 by Â£927,000, which has been presented for comparative purposes only. 4. Earnings per share Basic and diluted loss per share for the six months ended 30 June 2002 have been calculated on the basis of the loss after taxation for the period of Â£1,264,000 and the average number of shares in issue during the period of 43,515,260. The adjusted loss per share figure is calculated on the loss before administrative items based on the same weighted average number of shares in issue. 5. Reconciliation of operating loss to operating cash flows Six months Six months Year ended 30 June ended 30 June ended 31 2002 2001 December 2001 Â£000 Â£000 Â£000 Operating loss (1,276) (2,731) (6,600) Amortisation 988 988 1976 Depreciation 89 176 351 Loss on sale of fixed assets 1 - 166 Decrease in debtors 215 836 1,177 Decrease in creditors (305) (750) (1,307) Decrease in provision for national (8) (139) (157) insurance on share option gains Increase in provision for creditors 510 Net cash outflow from operating ------------ ------------ ----------- activities (296) (1,620) (3,885) ------------ ------------ ----------- (6) Analysis of Net Funds At Cash Flow At 1 January 2002 Â£000 30 June 2002 Â£000 Â£000 Cash in hand and at bank 39 201 240 Short term bank deposits 912 (404) 508 ------------ ------------ ------------ 951 (203) 748 ------------ ------------ ------------ This information is provided by RNS The company news service from the London Stock Exchange

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