Interim Results

Datacash Group PLC 25 September 2007 DataCash Group PLC 25 September 2007 EMBARGOED UNTIL 7.00am ON TUESDAY 25th SEPTEMBER 2007 DATACASH GROUP PLC ('DataCash' or 'the Company') INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2007 News Item The Board of DataCash Group plc, the payment service provider, is pleased to announce its half yearly results for the six months to 30 June 2007 which are presented under International Financial Reporting Standards (IFRS) for the first time. Overview • Adjusted pre-tax profits* up 135% to £5.30m (June 2006: £2.25m**) • Revenue increased to £10.00m (June 2006: £4.97m) • Adjusted* earnings per share increased to 4.07p (2006: 3.86p) • Cash balances rose to £19.4m (including £1.2m security deposits) (June 2006: £11.4m) equivalent to 21.1p per share • Significant wins in Retail and Travel sectors • Interim Dividend of 0.3p (2006: nil) • Settlement payment received in relation to dispute relating to attempted acquisition of Netgiro Systems AB * before Non-recurring items, National Insurance provision on share option gain and FRS20 charge on share options in issue ** 2006 comparatives include one month of contribution from the acquisition of Proc Cyber Services UK Limited ("Proc Cyber") (acquired 1 June 06) *** 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. For further information, please contact: DataCash Group plc Ashley Head - Executive Director 0870 72 74 76 1 Paul Burton - Chief Financial Officer 0870 72 74 76 1 DATACASH GROUP PLC INTERIM REPORT AND ACCOUNTS FOR THE SIX MONTHS ENDED 30 JUNE 2007 Chairman's Statement The Board of DataCash is pleased with the Group's performance in the first half of 2007. Revenues grew by 101% to £10.00m (2006: £4.97m. which included one months revenue from the Proc Cyber acquisition), while adjusted pre-tax profits, grew by 135% to £5.3m (2006: £2.25m). Cash balances as at 30 June 2007 were £19.4m (21p per share) up from £11.4m the previous year. With our strong cash position and our confidence in the future prospects for the business, the Board is pleased to announce an interim dividend of 0.3p per share. We continue to benefit from the growth of eCommerce both here and internationally. We have had good new sales, especially into the travel and retail industries. We are pleased with the progress of our strategy to provide a comprehensive service across all channels, internet, call centres and High Street. Our gaming-related business has continued to show good growth, and we anticipate some further opportunities in this area as UK-based companies look overseas. We have signed a three year agreement with Sportingbet to process their online transactions. Our risk management and reconciliation services add significant extra value in these international markets. We are in the process of deploying a series of technology initiatives that will offer clients a simplified route to access our services through a single interface. The technology also provides a flexible, scaleable infrastructure to accommodate both future growth and facilitate the integration of future acquisitions. Implementation is expected to be completed by the end of the year. As announced on 7th September, we reached agreement with Netgiro Systems AB and one of its shareholders to settle our legal claim. Dividend The Board is pleased to announce the payment of its first interim dividend of 0.3p per share. The dividend will be paid on 28th November 2007 to those shareholders on the register at 12th October 2007. Outlook We continue to seek opportunities to broaden our service offering to our customer base on an increasingly global basis. The Group remains confident in the future growth of the business. Ashley Head Chairman 25 September 2007 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 six months ended 30 June 2006 and 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 six months ended 30 June 2007 the expected impact of the adoption of IFRS is to reduce profit attributable to equity shareholders by £2.640m, comprising principally the amortisation of intangible assets of £2.627m; and a deferred tax adjustment of £14k and to reduce net assets for the Group at 30 June 2007 from £94.4m to £76.18m. Consolidated Income Statement For the 6 months ended 30 June 2007 Unaudited Unaudited Unaudited 6 months 6 months Year ended ended 30 June ended 30 June 31 December 2007 2006 2006 £000 £000 £000 Revenue: group and share of joint 9,998 4,974 16,750 ventures Less: share of Joint venture revenue (138) - (345) Revenue 9,860 4,974 16,405 Administrative expenses (4,898) (2,843) (8,933) Share option charge (2) (21) (34) National Insurance on share option (72) (226) (2) charge Total administrative expenses (4,972) (3,090) (8,969) Operating profit before non-recurring 4,888 1,884 7,436 items Non-recurring items (2,672) - (21,801) Group Operating profit/(loss) 2,216 1,884 (14,365) Share of loss in joint venture (8) - (6) Total Operating profit/(loss) 2,208 1,884 (14,371) Finance Income 343 118 351 Profit/(loss) before taxation 2,551 2,002 (14,020) Taxation (1,581) (126) (2,070) Profit/(loss) on ordinary activities 970 1,876 (16,090) after taxation Basic earnings/(loss) per share 1.07p 3.58p (22.42)p Diluted earnings/(loss) per share 1.06p 3.41p (22.42)p The figures at 30 June 2006 and 31 December 2006 have been restated in accordance with IFRS Consolidated balance sheet As at 30 June 2007 Unaudited Unaudited Unaudited As at As at 30 Restated 30 June 30 June 31 December 2007 2006 2006 £'000 £'000 £'000 Non current assets Intangible assets 23,173 29,808 23,173 Goodwill 32,695 49,886 35,388 Property, plant and equipment 873 908 1,000 Investments in joint ventures: (14) - (6) Investments 163 192 163 Deferred tax asset 140 31 128 57,030 80,825 59,846 Current assets Trade and other receivables 6,262 3,724 8,380 Cash and cash equivalents 18,187 11,393 11,280 24,449 15,117 19,660 Current liabilities Trade and other payables (4,472) (1,911) (2,612) Current tax liabilities (535) (1,228) (1,517) Net current assets 19,442 11,978 15,531 Non-current liabilities (291) (427) (179) Net assets 76,181 92,376 75,198 Capital and reserves Share Capital 917 907 908 Share premium 10,479 10,148 10,192 Foreign currency translation (63) (287) (121) reserve Share option reserve 1,082 1,060 1,081 Other reserves 94,774 94,553 95,116 Retained earnings (31,978) (14,005) (31,978) Current year retained profit 970 Total equity 76,181 92,376 75,195 Consolidated cash flow statement For the 6 month ended 30 June 2007 Unaudited Unaudited Unaudited 6 months 6 months Year ended ended 30 June ended 30 June 31 December 2007 2006 2006 £000 £000 £000 Cashflow from operating activities Operating profit/(loss) before taxation 2,216 1,884 (14,365) Impairment of Goodwill and intangibles 2,738 - 21,801 Depreciation 221 87 282 Share option charge 2 21 34 Exchange movements (283) - - Changes in trade and other receivables 2,106 (2,267) (934) Changes in trade and other payables 878 1,667 52 Increase in provisions 112 403 31 Net Cash inflow from operations 7,990 1,795 6,901 Interest received 343 118 351 Net cash inflow from operations 8,333 1,913 7,252 Taxation (1,581) (39) (991) Cashflows from investing activities Acquisition of subsidiaries - (1,710) (1,710) Cash acquired with subsidiaries - 6,422 2,404 Purchase of tangible fixed assets (141) (95) (432) Net cash (outflow)/inflow from investing (141) 4,617 262 activities Cash flows from financing activities Net proceeds from issue of share capital 296 345 199 Equity dividends paid - (338) (337) Net cash inflow from financing activities 296 7 (138) Net cash inflow 6,907 6,498 6,385 Cash and cash equivalents at the start of 11,280 4,895 4,895 the period Cash and cash equivalents at the end of the 18,187 11,393 11,280 period DataCash Group plc Consolidated Statement of Changes in Equity For the 6 months ended 30 June 2007 Share Share Foreign Share Other Retained Total Capital Premium Currency Option Reserves Earnings Equity Translation Reserve Reserve £000 £000 £000 £000 £000 £000 £000 At 1 January 2006 449 9,811 - 34 18,765 (15,551) 13,508 Exchange differences on - - (287) - - - (287) translation of overseas operations Profit for the period - - - - - 1,883 1,883 Total recognised income for - - (287) - - 1,883 1,596 the period Dividends paid - - - - - (337) (337) Issue of Shares 458 337 - - - - 795 Share-based payments - - - 1,026 - - 1,026 Merger reserve on acquisition - - - - 75,788 75,788 of subsidiary At 30 June 2006 907 10,148 (287) 1,060 94,553 (14,005) 92,376 Exchange differences on - - 166 - - - 166 translation of overseas operations Loss for the period - - - - - (17,973) (17,973) Total recognised income for - - 166 - - (17,973) (17,807) the period Issue of shares 1 44 - - - - 45 Share-based payments - - - 21 - - 21 Merger reserve on acquisition - - - - 563 - 563 of subsidiary At 31 December 2006 908 10,192 (121) 1,081 95,116 (31,978) 75,198 Exchange differences on - - 58 - - - 58 translation of overseas operations Profit for the period - - - - - 970 970 Total recognised income for - - 58 - - 970 1,028 the period Issue of shares 9 287 - - - - 296 Share-based payments - - - 1 - - 1 Merger reserve on acquisition - - - - (342) - (342) of subsidiary At 30 June 2007 917 10,479 (63) 1,082 94,774 (31,008) 76,181 Notes to the Interim Results 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 expected to be applicable for the year ending 31 December 2007. These are subject to ongoing review and endorsement by the European Commission, and possible amendment by the International Accounting Standards Board (IASB), and are therefore subject to possible change. Further standards or interpretations may also be issued that could be applicable for the year ending 31 December 2007. These potential changes could result in the need to change the basis of accounting or presentation of certain financial information from that presented in this document. The group may need to review some accounting treatments used for the purpose of this document as a result of emerging industry consensus on practical application of IFRS and further technical opinions. This could mean that the financial information in this document may require modification until the group prepares its first complete set of IFRS financial statements for the year ending 31 December 2007. The comparative figures for the year ended 31 December 2006 are not statutory accounts as defined by S240 of the Companies Act 1985. Those accounts 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 IFRSs are given at the end of these notes to the interim results. 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 adopted the provisions of FRS 20 'Share-based payment' in its financial statements for the six months ended 30 June 2006 and 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 chosen to apply IFRS 2 'Share-based payment' only to awards made 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 interim financial statements incorporate the financial statements of the company and entities controlled by the company (its subsidiaries) for the six months ended 30 June 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) Purchase 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 Although IFRS 3 does not permit merger 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. Goodwill which is recognised as an asset is reviewed for impairment at least annually. Any impairment is recognised immediately in the income statement and is not subsequently reversed. 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 unit 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 recognised for goodwill is not reversed in a subsequent period. (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 non-recurring costs, 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 fixed 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 or assets yet to be brought into use. (h) Impairment Fixed 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) 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 fixed 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. (j) Cash and cash equivalents For the purpose of preparation of the cash flow statement, 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. (k) Trade receivables and trade payables Trade receivables are recognized initially at fair value and subsequently measured 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. Trade payables are recognised initially at fair value and subsequently measured at amortised cost. (l) 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 period. 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 assets are recognized 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 realised 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 recognising 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. (m) 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 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 recognised directly in equity. For such non-monetary items, any exchange component of that gain or loss is also recognised 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 recognised in the income statement as part of the gain or loss on sale. (n) Leasing 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. (o) Share-based employee remuneration For all grants of share options, the fair value as at the date of grant is calculated using the option price model and the corresponding expense is recognised over the vesting period. The share based payments expense is recognised as a staff cost and the associated credit entry is made to reserves. (p) 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. (q) 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. (r) Adoption of new and revised International Financial Reporting Standards ("IFRS") At the date of approval of these financial statements, the following standards, interpretations and amendments there to were issued but not yet mandatory effective for the Group. International Financial Reporting Standards ("IFRS") • IFRS 8 "Operating Segments" International Financial Reporting Interpretations Committee ("IFRIC") • IFRIC 11 "IFRS 2: Group and Treasury Share Transactions" • IFRIC 12 "Service Concession Arrangements" • IFRIC 13 "Customer loyalty programmes" • IFRIC 14 "IAS 19 - The limit on defined benefit assets" Amendments to existing standards Amendment to IAS 1 "Presentation of Financial Statements" - Capital disclosures Amendments to IAS 19 "Employee Benefits" - Actuarial Gains and Losses, Group Plans and Disclosures Amendments to IAS 21 "The Effects of Changes in Foreign Exchange Rates" - Net Investments in Foreign Operation. Amendments to IAS 39 "Financial Instruments: Recognition and Measurement"- Cash flow hedge accounting of forecast intra-group transactions, The Fair Value Option. Amendments to IAS 39 "Financial Instruments: Recognition and Measurement" and IFRS 4 "Insurance Contracts" Amendments to IFRS 1 "First-time adoption of International Financial Reporting Standards" The directors anticipate that the future adoption of those standards, interpretations and amendments listed above that have not been adopted early will not have a material impact on the Consolidated Financial Statements. (s) Critical accounting estimates and judgements 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 allocation of the purchase price. We seek appropriate competent and professional advise before making such allocations. We test the valuation of goodwill at each financial period and whenever such events or changes to circumstances indicate that the carrying amounts may not be recoverable. These tests require the use of estimates. Impairment reviews The Group tests at each financial period 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. Income taxes The Group is subject to income taxes. Judgement is required in determining the worldwide provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes are due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which the determination is made. 4. SEGMENTAL REPORTING The groups primary segment is geographical. The group's sole activity is the provision of outsourced and multi-channel electronic payment and fraud solutions. 5. EARNINGS PER SHARE 6 months 6 months Year ended ended ended 31 Dec 2006 30 June 2007 30 June 2006 Weighted average number of 1p ordinary shares in issue during the period For basic earnings per share 90,670,958 52,423,711 71,768,371 Share Options 524,171 2,549,977 265,230 For diluted earnings per share 91,195,129 54,973,688 72,033,601 Profit for the financial period £000 £000 £000 Profit for headline earnings per 3,716 2,123 5,747 share Amortisation of intangibles (2,672) - (21,801) Share based payments expense (2) (21) (34) NI on share Option gains (72) (226) (2) Profit/(loss) for earnings/(loss) per 970 1,876 (16,090) share Basic earnings/(loss) per share 1.07p 3.58p (22.42)p Diluted earnings/(loss) per share 1.06p 3.41p (22.42)p Headline basic earnings per share 4.10p 4.05p 8.01p Headline diluted earnings per share 4.07p 3.86p 7.98p 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. 6. DIVIDEND An interim dividend of 0.3p (2006: nil) per ordinary share is recommended. In accordance with IAS 10 Events after the Balance Sheet Date, this dividend has not been recognised in the accounts at 30 June 2007, but will be recognised in the accounting period ending 31 December 2007. 7. ANALYSIS OF NET FUNDS At 1 January Cash Flow At 30 June 2007 2007 £'000 £'000 £'000 Cash in hand and at bank 4,851 1,877 6,728 Short term bank deposits 6,429 5,030 11,459 11,280 6,907 18,187 8. DATE OF APPROVAL OF INTERIM REPORT This interim report was approved by the Board of directors on 25th September 2007. Copies of this statement are being sent to all shareholders. Copies are also available at the registered office of the company: Explanatory Notes to the UK GAAP to IFRS Reconciliations Introduction The group financial statements have been prepared using accounting polisies consistent with International Accounting and Financial Reporting Standards ('IFRS') and are presented in UK sterling. The reconciliations below have been prepared on the basis that all IFRSs, International Financial Reporting Interpretation Committee ('IFRIC') interpretations, and current IASB exposure drafts will be issued as final standards and adopted by the European Commission. The main differences between the group financial statements prepared according to UK GAAP and those under International Accounting Standards are that goodwill is not amortised, but instead is subject to an annual impairment review and that provision is made for a vacation accrual at each period end. The consolidated financial statements have been prepared on a historical cost basis. 1. Transition date and first-time adoption of IFRS: the group's transition date to IFRS is 1 January 2006. All adjustments on first-time adoption were recorded in shareholders' equity on the date of transition. IFRS 1 'First-Time Adoption of International Financial Reporting Standards' sets out the transition rules which must be applied when IFRS is adopted for the first time. As a result, certain of the requirements and options in IFRS 1 may result in a different application of accounting policies in the 2006 restated financial information from that which would apply if the 2006 financial statements were the first financial statements. The standard sets out certain mandatory exemptions to retrospective application and certain optional exemptions. The most significant optional exemptions available that have been taken by the group are as follows: (a) Business combinations effected before 1 January 2006, including those that were accounted for using the merger method of accounting under UK accounting standards, have not been restated. The carrying amount of capitalised goodwill at 31 December 2005 that arose on business combinations accounted for using the acquisition method under UK GAAP was frozen at this amount and tested for impairment at 1 January 2006. 2. Goodwill amortisation and impairment: under UK GAAP goodwill was amortised through the Income Statement on a straight-line basis and impairment reviews were carried out periodically or when a specific event occurred. Under IAS 38, goodwill is not amortised through the Income Statement but instead is subject to a test for impairment at the end of each financial period which may result in adjustments in the Income Statement and the Balance Sheet. Explanation of principal differences between the cash flow statements presented under UK GAAP and the cash flow statements presented under IFRS. The cash flow statement has been prepared in conformity with IAS 7 'Cash Flow Statements'. The principal differences between the 2006 cash flow statement presented in accordance with UK GAAP and the cash flow statement presented in accordance with IFRS for the same periods are as follows: (i) Under UK GAAP, net cash flow from operating activities was determined before considering cash outflows from (a) returns on investments and servicing of finance, and (b) taxes paid. Under IFRS, these two sections of the cash flow statement do not exist and the related cash flows are categorised as operating, investing or financing as appropriate. (ii) Under UK GAAP, acquisitions are separately classified, while under IFRS, they are included within investing activities. DataCash Group plc Reconciliation of Consolidated Income Statement For the 6 months ended 30 June 2006 Reported IFRS3 Total Effect Restated Under UK Business of under IFRS GAAP Combinations transition to IFRS £000 £000 £000 £000 Revenue: group and share of joint 4,974 4,974 ventures Less: share of Joint venture revenue Revenue 4,974 4,974 Administrative expenses (2,843) (2,843) Share option charge (21) (21) National Insurance on share option (226) (226) charge Total administrative expenses (3,090) (3,090) Operating profit before goodwill and 1,884 1,884 exceptional items Intangible amortisation/impairment (1,579) 1,579 1,579 - Group Operating profit 305 1,579 1,579 1,884 Share of loss in joint venture Total Operating Profit 305 1,579 1,579 1,884 Finance Income 118 118 Taxation (126) (126) Profit for the Period 297 1,579 1,579 1,876 Basic earnings/(loss) per share 0.57p 3.01p 3.01p 3.58p Diluted earnings/(loss) per share 0.54p 2.87p 2.87p 3.41p DataCash Group plc Reconciliation of Consolidated Income Statement For the 12 months ended 31st December 2006 Reported IFRS3 Total Effect Restated Under UK Business of under IFRS GAAP Combinations transition to IFRS £000 £000 £000 £000 Revenue: group and share of joint 16,750 16,750 ventures Less: share of Joint venture revenue (345) (345) Revenue 16,405 16,405 Administrative expenses (8,933) (8,933) Share option charge (34) (34) National Insurance on share option (2) (2) charge Total administrative expenses (8,969) (8,969) Operating profit before non-recurring 7,436 7,436 items Intangible amortisation/impairment (6,178) (15,623) (15,623) (21,801) Group Operating Profit/(loss) 1,258 (15,623) (15,623) (14,365) Share of operating loss in joint (6) (6) venture Total Operating Profit/(loss) 1,252 (15,623) (15,623) (14,371) Interest receivable and similar income 351 351 Profit/(loss) on ordinary activities 1,603 (15,623) (15,623) (14,020) before taxation Taxation (2,070) (2,070) Loss for the period (467) (15,623) (15,623) (16,090) Basic loss per share (0.65)p (21.77)p (21.77)p (22.42)p Diluted loss per share (0.65)p (21.69)p (21.69)p (22.34)p Reconciliation of Consolidated balance sheet As at 1 January 2006 Reported IAS 12 Total Restated Under UK Income Effect of under IFRS GAAP £000 Taxes £000 transition £000 to IFRS £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 Trade and other payables (1,225) 346 346 (879) Current tax liabilities (346) (346) (346) 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 Share option reserve 34 34 Other reserves 18,765 18,765 Retained earnings (15,551) (15,551) Total equity 13,508 13,508 Reconciliation of Consolidated balance sheet As at 30 June 2006 Reported IFRS 3 IAS 12 Total Restated Under UK Business Income Effect of under IFRS GAAP £000 Combinations Taxes £000 transition £000 £000 to IFRS £000 Non current assets Intangible assets 78,115 1,579 1,579 79,694 Property, plant and 908 908 equipment Investments 192 192 Deferred tax asset 31 31 79,246 1,579 1,579 80,825 Current assets Debtors 3,724 3,724 Cash at bank and in hand 11,393 11,393 15,117 15,117 Current liabilities Trade and other payables (3,139) 1,228 1,228 (1,911) Current tax liabilities (1,228) (1,228) (1,228) Net current assets 11,978 11,978 Total assets less 91,224 1,579 1,579 92,803 current liabilities Non-current liabilities (427) (427) Net assets 90,797 1,579 1,579 92,376 Capital and reserves Called up share capital 907 907 Share premium account 10,148 10,148 Foreign currency (287) (287) translation reserve Share option reserve 1,060 1,060 Other reserves 94,553 94,553 Profit and Loss account (15,584) 1,579 1,579 (14,005) Total equity 90,797 1,579 1,579 92,376 Reconciliation of Consolidated balance sheet As at 31 December 2006 Reported IFRS 3 IAS 12 Total Restated Under UK Business Income Effect of under IFRS GAAP £000 Combinations Taxes £000 transition £000 £000 to IFRS £000 Non current assets Intangible assets 74,184 (15,623) (15,623) 58,561 Tangible assets 1,000 1,000 Investments in joint (6) (6) ventures Investments 163 163 Deferred tax asset 128 128 75,469 (15,623) (15,623) 59,846 Current assets Debtors 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 91,000 (15,623) (15,623) 75,377 current liabilities Non-current liabilities (179) (179) Net assets 90,821 (15,623) (15,623) 75,198 Capital and reserves Called up share capital 908 908 Share premium account 10,192 10,192 Foreign currency (121) (121) translation reserve Share option reserve 1,081 1,081 Other reserves 95,116 95,116 Profit and Loss account (16,355) (15,623) (15,623) (31,978) Total equity 90,821 (15,623) (15,623) 75,198 This information is provided by RNS The company news service from the London Stock Exchange

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