TIDMESG
RNS Number : 0821I
eServGlobal Limited
28 June 2013
H1 FY2013 Interim Results
Revenue increase of 24%
25% increase in customer base over the past 12 months
Strategic partnership with MasterCard
A$15m+ revenue backlog
Paris: 28 June 2013
eServGlobal (LSE: ESG & ASX: ESV), the provider of
end-to-end mobile financial services to emerging markets, is
pleased to provide results for the six month period ended 30 April
2013 ("H1 FY2013").
Financial Highlights:
-- H1 FY2013 revenue of A$13.6m (GBP9.1m(1) )
o 24% increase over H1 FY2012 revenues of A$11.0m, excluding
legacy revenues(2)
o Strong pipeline moving into the second half of the year
o Revenue backlog in excess of A$15m due to significant new
deals and partnerships in
the first half
-- Total costs in H1 2013 of A$14.3m (15% lower than in H1
FY2012)(3)
-- H1 FY2013 reported EBITDA loss of A$0.3m (GBP0.2m) showing
significant improvement over H1
FY2012 (loss of A$8.1m)
-- Gross margin of 61% shows strong improvement over H1 FY2012
(40%)
-- Placing and subscription completed 6 December raising A$9.5m
(GBP6.2m), and secondary element
completed in January raising A$7.3m (GBP4.8m)Shareholder loans
repaid in full during the period;
no debt on the balance sheet
Operational Highlights:
-- Signed new strategic partnership with MasterCard enabling
eServGlobal to offer mobile money
solutions compatible with the legacy payment environment
including merchant point of sales,
legacy ATMs, etc.
-- Secured largest mobile money deal to date: a strategic
framework contract with a major operator
group in the Middle East and North Africa, expected to realise
revenues in excess of US$12m
over the next three years.
-- Significant investment in mobile money technology platform,
including the migration of
PayMobile to the latest Service Oriented Architecture and the
ability to integrate the platform
with Near Field Communication ("NFC") technology
-- Previously announced Board and management changes now in
effect, with Paolo Montessori
assuming the role of CEO and Managing Director and Steve
Blundell, Chief Financial Officer,
joining the Board as Finance Director.
-- HomeSend now live in 32 markets in Europe, the Middle East,
Africa and Asia and covering
approximately 1.2 billion potential customers (+316% in the past
year)
-- 19 new customers added in the past year (including HomeSend
customers and Group Frame
Agreements) (+25% in the past year)
-- Moving into the second half with a strong pipeline of new and
existing customers
Paolo Montessori, Chief Executive Officer, commented:
"Following the strong support from our shareholders earlier in
the year in the form of a capital raise, we are pleased to see
early evidence that a stronger balance sheet has enhanced our
ability to work with larger partners and compete for larger
contracts. Since the capital raise, we have successfully executed
on our stated goals: we signed a strategic partnership with
MasterCard and won our largest mobile money deal to date with an
estimated value of US$12m over the next three years. In addition to
repaying all debt, we have made significant investments in our
technology; our new Service-Oriented Architecture has been critical
to our success in key bids and we have taken international airtime
transfer live on the HomeSend platform.
"Looking forward, we are excited by the future and by our
ability to work with some of the world's leaders in mobility and
financial services. With partners like MasterCard, Oracle, BICS,
and Wincor Nixdorf, we are well-positioned for the years
ahead."
(1) Average exchange rate over the period was 0.6645 GBP to AUD (2) Legacy revenues of A$1.6m were recognized in H1 FY2012 as part of the now completed contract coverage performed as part of the divestiture of the USP assets and business unit to Oracle in 2010. (3) Non-recurring items, foreign exchange gains and losses and share based payments in the half resulted in a net gain of A$0.4m, primarily as a result of foreign exchange fluctuations with the Australian Dollar.
For further information, please contact:
eServGlobal www.eservglobal.com
Tom Rowe, Company Secretary T: +61 (0)2 8014 5050
Christina Tubb, Head of Investor Relations & Corp. Development
Cenkos Securities plc www.cenkos.com
Ivonne Cantú/Stephen Keys (Nomad) T: +44 (0) 20 7397 8980
Julian Morse/Alex Aylen
Newgate Threadneedle www.newgatethreadneedle.com
Caroline Evans-Jones/Josh Royston/Hilary Millar T: +44 (0) 20 7653 9850
Charles Stanley Securities www.csysecurities.com
Dugald Carlean/Paul Brotherhood T: +44 (0) 20 7149 6000
Introduction
This first six months of the financial year have established
eServGlobal as a leading provider of end-to-end mobile money
solutions in emerging markets. We have secured significant new
mobile money customers and partners, made significant investments
in our mobile money offerings and grown our HomeSend addressable
market to over 1.2 billion people. New customer wins in our core
mobile money and value-added services business have led to revenue
growth of 24% in the first half above those in the first half of
last year (H1 FY2012: A$11.0M(4) ).
Total operational costs for the period (costs of goods sold and
operating costs) were A$14.3m (15% lower than those in H1 FY2012:
A$16.9m), resulting in a significant reported EBITDA improvement
over H1 FY2012 (A$0.3m loss in H1 FY2013 vs. A$8.1m loss in H1
FY2012). Gross margin was 61%, which was a significant improvement
on H1 FY2012: 40%.
Operational Review
eSe rvGlobal product portfolio (excluding HomeSend)
Over 70 businesses worldwide are now deploying elements of our
mobile financial services. We are enjoying a growing momentum in
the business, with new entrants to the mobile money industry taking
note of our performance in this high-growth market and coming to us
for solutions.
We are collaborating with some of the world's leading innovators
in the payments and mobility space. For example:
-- We are working with MasterCard as part of their Mobile Money
Partnership Program (MMPP).
Together we are proposing cohesive solutions that address the
needs of both banked and under
banked users with a seamless end-user experience.
-- Oracle continues to be an important partner with
opportunities to deploy our Value Added
Services solutions on top of their offering, resulting in two
new mobile operator wins during the
half year.
-- Wincor Nixdorf, one of the world's largest payment terminal
vendors, is showcasing
eServGlobal's mobility offerings. With our combined solution,
mobile money users can transact
directly at Wincor terminals without the need for a card or a
bank account.
As the market evolves, mobile operators are approaching the
second phase of mobile money with an eye for mature solutions. Many
of these operators are working with eServGlobal to provide
increasingly sophisticated mobile financial services. The
competitive strengths of our platform and approach include:
-- eServGlobal's new PayMobile platform is able to incorporate
years of data on customer
behaviour for airtime top-up and predict where mobile money
funds will flow, what liquidity
management tools are required and which customers are the most
credit-worthy.
-- Our end-to-end approach to mobile money enabled us to win
significant deals in the previous 12
months, starting with a A$1.6m deal with a South East Asian
Conglomerate and building to our
recent landmark US$12m deal (over three years) with a major
mobile operator group in the
Middle East and North Africa. Looking forward, there is a
significant pipeline of multinational
groups looking to centralize and mature their approach to mobile
money. (4) Legacy revenues of A$1.6m were recognized in H1 FY2012
as part of the now completed contract coverage performed as part of
the divestiture of the USP assets and business unit in 2010.
International Mobile Remittance: HomeSend
HomeSend, our disruptive mobile to mobile multilateral
remittance hub, exceeded our objectives for subscriber coverage in
2012, and as of April 2013 covered 1.2 billion potential users
around the world in 32 markets, both of which were an increase of
over 300% over the year.
Key developments include:
-- HomeSend is now attracting established regional Money
Transfer Organizations who are seeking
to extend their footprint into new markets without investing in
building brick & mortar agencies.
-- HomeSend covers the majority of subscribers in Africa through
agreements with Ooredoo,
Vodafone, Airtel Africa, MTN, Maroc Telecom, and Wafacash.
-- UAE Exchange, the largest Money Transfer Organization in the
Middle East is undergoing pre-
launch testing with HomeSend to start sending funds to
Africa.
-- European deployments are accelerating as we work with
innovative players including
WorldRemit, MoneyTrans, and LycaMobile.
This success means the hub has now entered the next strategic
stage of development - technical deployments. Technical deployment
in each market involves technical connection, necessary regulatory
approvals and soft launches to test functionality. The objective
for 2013 is to have achieved technical deployments in 50
markets.
Market
The mobile money industry continues to expand, particularly in
the developing markets to which eServGlobal caters. According to
Berg Insight, the number of active mobile money users in emerging
markets is expected to grow to 381 million by 2017, based on a
compound annual growth rate (CAGR) of 36%.(5) This growth is
largely expected to be driven by Mobile Network Operators (MNOs)
which run 72% of live mobile money deployments(6) . In addition,
deployments are reaching a new age of maturity. MNOs and customers
are looking for whole of market visibility and a trusted partner
that can deliver a comprehensive mobile money solution.
As the mobile money ecosystem continues to evolve and mature,
service providers are building on successful services such as
airtime transfer and bill payment to extend more advanced mobile
financial services such as micro insurance, savings and loans.
eServGlobal's technology is positioned to cater to this demand,
offering the full spectrum of mobile financial services from
recharge and agent management features through to mobile wallet and
mobile commerce.
An emerging trend is the replacement of 'first-generation'
mobile money deployments. 19.5% of mobile money service launches in
2012 were re-launches or replacements of existing services(7) .
This evolution represents an important opportunity for eServGlobal
as service providers are seeking experienced vendors with the
ability to supply comprehensive solutions, particularly across
multiple affiliates in a Group.
The World Bank continues to predict growth in remittance flows
to developing countries at an average annual rate of 8.8% to reach
around $515 billion in 2015, while the average cost of sending
money remained broadly unchanged in 2012 at just above 9%. These
findings position HomeSend well to capitalize on a growing market
and extend an affordable international mobile money transfer
alternative to migrant workers.
(5) Berg Insight -- berginsight.com (6) GSMA Mobile Money for the Unbanked -- State of the Industry Global Mobile Money Adoption Survey (7) GSMA Mobile Money for the Unbanked-- State of the Industry Global Mobile Money Adoption Survey
Product Development
eServGlobal has migrated its flagship mobile money product
PayMobile to the latest Service Oriented Architecture. This modular
and scalable architecture is enabling us to deliver and integrate
our solutions in a more flexible and cost effective manner.
In anticipation of the market moving towards more advanced
financial services, eServGlobal's PayMobile platform now offers
sophisticated financial service capabilities, such as the ability
to manage the creation, distribution and support of insurance,
savings and loans products.
Our retention solution, PromoMax now offers couponing, loyalty
and customer segmentation features and is powering the PayMobile
promotion capability. This was highlighted as a key competitive
differentiator by the Middle East Operator Group who selected our
Mobile Money solution.
eServGlobal can now integrate its portfolio with NFC
accessibility. Through a partnership with AIRTAG, a leading
provider of mobile shopping eco-system innovations and secure
applications, eServGlobal will supply NFC mobile transit app for a
leading mobile network operator in the Middle East.
Our leading mobile remittance platform HomeSend has been
migrated to a new scalable architecture running on virtualized
servers. Enhancements have been added on different levels including
security, Customer Care, KPI indicators and connectivity with
Xpress Money.
Financial Review
The consolidated entity achieved sales revenue for the period of
A$13.621 million (2012: A$12.599 million) - an increase of 8.1% due
to new customer wins and existing customers extending their Mobile
Money and Value Added Services footprint. Excluding legacy revenues
recognised in H1 2012 this represents 24% revenue growth. The gross
profit realised was A$8.349 million (gross profit margin: 61%)
(2012: A$4.990 million (gross profit margin: 40%)). EBITDA for the
period was a loss of A$0.327 million (2012: EBITDA loss A$7.764
million including interest income of A$0.290 million).
Non-recurring items, foreign exchange gains and losses and share
based payments in the half resulted in a net gain of A$0.4m,
primarily as a result of foreign exchange fluctuations with the
Australian Dollar.
The net result of the consolidated entity for the half year
ended 30 April 2013 was a loss after tax and minority interest for
the period of A$2.539 million (2012: A$11.278 million loss). Loss
per share was 1.1 cents (2012: loss per share 5.7 cents).
In accordance with the Group's accounting policies, development
expenditure incurred during the period of A$0.862 million (2012:
A$0.586 million) was capitalised in the Statement of Financial
Position. This expenditure related to internally generated software
comprising the HomeSend platform.
The cash flow for the period was a net inflow of A$1.275 million
primarily resulting from the issuance of 52,198,291 new ordinary
shares at 21 pence (A$0.32) generating net cash receipts of
A$15.925 million and the full repayment of A$7.200 million of
shareholder loans. Cash at 30 April 2013 was A$5.087 million.
Placing
The company completed a Placing and Subscription on 6 December,
raising gross proceeds of A$9.5m (GBP6.2m). These proceeds have
been used to strengthen the Company's balance sheet, enhance the
Company's ability to compete for larger contracts and partnerships,
and further accelerate technology development. This placing has
enabled eServGlobal to win its largest ever mobile money contract.
An additional Second Placing was completed in January 2013, raising
A$7.3m (GBP4.8m), which was used to repay outstanding shareholder
loans.
Outlook
The Board is pleased to report that the pipeline remains strong
and the Company is on strong footing for FY2013. Results in the
first half of FY2012 comprised 42% of full year revenues(8) ; the
Board is pleased with revenue growth from H1 FY2012 to H1 FY2013.
Given our market leading technology, robust financials and strong
customer base, we are confident that we are well positioned to
continue to benefit from the growth of the mobile money industry in
emerging markets.
About eServGlobal
eServGlobal has been a source of innovative solutions for mobile
and financial service providers for 30 years. eServGlobal invests
heavily in product development, using carrier-grade,
next-generation technology and aligning with the requirements of
more than 90 customers in over 65 countries.
Our mobile money solutions put feature-rich mobile financial
services at the fingertips of users worldwide, covering the full
spectrum of mobile wallet, mobile commerce, recharge and agent
management features.
The international remittance service HomeSend(R), based on
eServGlobal technology and offered by our strategic business
partner BICS, is the only mobile-centric hub endorsed by the
GSMA.
eServGlobal also offers a comprehensive suite of sophisticated,
revenue generating Value-Added Services to engage subscribers in a
dynamic manner. These services can be seamlessly integrated with
our mobile money portfolio to extend loyalty and promotion
offers.
(8) Excluding legacy revenues. Legacy revenues of A$1.6m were
recognized in H1 FY2012 as part of the now completed contract
coverage performed as part of the divestiture of the USP assets and
business unit to Oracle in 2010.
Appendix 4D
eServGlobal Limited
ABN 59 052 947 743
Half-year report and appendix 4D
for the half-year ended 30 April 2013
The half-year financial report does not include notes of the
type normally included in an annual financial report and should be
read in conjunction with the October 2012 financial report.
Half-year report and appendix 4D
for the half year ended
30 April 2013
Contents
Results for announcement to the market 1
Directors' Report 2
Auditor's Independence Declaration 4
Independent Review Report 5
Directors' Declaration 7
Condensed consolidated Statement of Profit or Loss and Other Comprehensive Income 8
Condensed consolidated Statement of Financial Position 9
Condensed consolidated Statement of Changes in Equity 10
Condensed consolidated Statement of Cash Flows 11
Notes to the condensed consolidated Financial Statements
12
Results for announcement to the market
Results A$ '000
--------------------------------- -----------------------------------
Revenues Up 8.1% to 13,621
Loss after tax attributable
to members Down 77.5% to (2,539)
Dividends (distributions) Amount per Franked amount
security per security
---------------------
Current period
Interim dividend declared Nil c 0%
Final dividend paid Nil c 0%
--------------------------------- ------------ ---------------------
Previous corresponding period
Interim dividend declared Nil c 0%
Final dividend paid Nil c 0%
--------------------------------- -------------------- -------------
Record date for determining N/A
entitlements to the dividend.
-----------------------------------
Brief explanation of revenue, net profit and
dividends (distributions).
The consolidated entity achieved sales revenue
for the period of $13.621 million (2012: $12.599
million) - an increase of 8.1% due to new customer
wins and existing customers extending their Mobile
Money and Value Added Services footprint. The
gross profit realised was $8.349 million (gross
profit margin: 61%) (2012: $4.990 million (gross
profit margin: 40%)). EBITDA for the period was
a loss of $0.327 million (2012: EBITDA loss $7.764
million).
The net result of the consolidated entity for
the half year ended 30 April 2013 was a loss
after tax and minority interest for the period
of $2.539 million (2012: $11.278 million loss).
Loss per share was 1.1 cents (2012: loss per
share 5.7 cents).
In accordance with the Group's accounting policies,
development expenditure incurred during the period
of $0.862 million (2012: $0.586 million) was
capitalised in the Statement of Financial Position.
The expenditure related to internally generated
software comprising the HomeSend platform.
During the period, the cash flow for the period
was a net inflow of $1.275 million primarily
resulting from the issuance of 52,198,291 new
ordinary shares at 21 pence ($0.32) generating
net cash receipts of $15.925 million and the
full repayment of $7.200 million of shareholder
loans. Cash at 30 April 2013 was $5.087 million.
-----------------------------------------------------
Directors' report
The directors of eServGlobal Limited submit herewith the
financial report of eServGlobal Limited and its controlled entities
(the Group) for the half-year ended 30 April 2013. In order to
comply with the provisions of the Corporations Act 2001, the
directors report as follows:
Directors
The names of the directors of the company during or since the
end of the half year are:
Richard Mathews Non Executive Chairman
Craig Halliday Chief Executive Officer & Director
François Barrault Non Executive Director
Stephen Baldwin Non Executive Director
Stephen Blundell Chief Finance Officer & Director (appointed 30 April 2013)
Paolo Montessori Chief Operating Officer & Director (appointed 30 April 2013)
John Conoley Non Executive Director (appointed 01 May 2013)
David Smart Non Executive Director (resigned 22 March 2013)
Jamie Brooke Non Executive Director (resigned 01 May 2013)
Review of Operations
This report is to be read in conjunction with other reports
issued contemporaneously.
eServGlobal Limited is a public company listed on the Australian
Securities Exchange (ASX:ESV) and the London Stock Exchange (AIM)
(LSE:ESG). Along with its Head Office in Sydney, Australia, the
eServGlobal group has operations worldwide.
eServGlobal specializes in mobile money solutions and
value-added services (including promotions, loyalty, messaging, and
multiplay) to help telecom service providers increase their revenue
and gain and maintain customer ownership.
eServGlobal has been a source of innovative solutions for mobile
and financial service providers for over 30 years. eServGlobal
invests heavily in product development, using carrier-grade,
next-generation technology and aligning with the requirements of
more than 90 customers in 65 countries. Our mobile money solutions
put feature-rich mobile financial services at the fingertips of
users worldwide, covering the full spectrum of mobile wallet,
mobile commerce, recharge and agent management features.
The international remittance service HomeSend(R), based on
eServGlobal technology and offered by our strategic business
partner Belgacom International Carrier Services (BICS), is the
market leader in mobile-to-mobile multilateral money transfer.
In addition eServGlobal also offers a comprehensive suite of
sophisticated, revenue generating Value-Added Services to engage
subscribers in a dynamic manner. These services can be seamlessly
integrated with our mobile money portfolio to extend loyalty and
promotion offers.
The consolidated entity achieved sales revenue for the period of
$13.621 million (2012: $12.599 million) - an increase of 8.1% due
to new customer wins and existing customers extending their Mobile
Money and Value Added Services footprint. The gross profit realised
was $8.349 million (gross profit margin: 61%) (2012: $4.990 million
(gross profit margin: 40%)). EBITDA for the period was a loss of
$0.327 million (2012: EBITDA loss $7.764 million).
The net result of the consolidated entity for the half year
ended 30 April 2013 was a loss after tax and minority interest for
the period of $2.539 million (2012 $11.278 million loss). Loss per
share was 1.1 cents (2012: loss per share 5.7 cents).
In accordance with the Group's accounting policies, development
expenditure incurred during the period of $0.862 million (2012:
$0.586 million) was capitalised in the Statement of Financial
Position. The expenditure related to internally generated software
comprising the HomeSend platform.
During the period, the cash flow for the period was a net inflow
of $1.275 million primarily resulting from the issuance of
52,198,291 new ordinary shares at 21 pence ($0.32) generating net
cash receipts of $15.925 million and the full repayment of $7.200
million of shareholder loans. Cash at 30 April 2013 was $5.087
million.
Auditor's independence declaration
The auditor's independence declaration is included on page 4 of
the half-year financial report.
Rounding off of amounts
The company is a company of the kind referred to in ASIC Class
Order 98/100, dated 10 July 1998, and in accordance with that Class
Order amounts in the directors' report and the financial report are
rounded off to the nearest thousand dollars, unless otherwise
indicated.
Signed in accordance with a resolution of the directors, made
pursuant to s.306(3) of the Corporations Act 2001.
On behalf of the directors
Richard Mathews
Chairman
Brisbane, 28 June 2013
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Grosvenor Place
225 George Street
Sydney NSW 2000
PO Box N250 Grosvenor Place
Sydney NSW 1220 Australia
DX: 10307SSE
Tel: +61 (0) 2 9322 7000
Fax: +61 (02) 9322 7001
www.deloitte.com.au
The Board of Directors
eServGlobal Limited
c/- Simpsons Solicitors
Level 2, Pier 8/9
23 Hickson Road,
Millers Point NSW 2000
28 June 2013
Dear Board Members,
eServGlobal Limited
In accordance with section 307C of the Corporations Act 2001, I
am pleased to provide the following declaration of independence to
the directors of eServGlobal Limited.
As lead audit partner for the review of the financial statements
of eServGlobal Limited for the half year ended 30 April 2013, I
declare that to the best of my knowledge and belief, there have
been no contraventions of:
(i) the auditor independence requirements of the Corporations
Act 2001 in relation to the review; and
(ii) any applicable code of professional conduct in relation to the review.
Yours sincerely
DELOITTE TOUCHE TOHMATSU
Michael Kaplan
Partner
Chartered Accountants
Liability limited by a scheme approved under Professional
Standards Legislation.
Member of Deloitte Touche Tohmatsu Limited
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Grosvenor Place
225 George Street
Sydney NSW 2000
PO Box N250 Grosvenor Place
Sydney NSW 1220 Australia
DX: 10307SSE
Tel: +61 (0) 2 9322 7000
Fax: +61 (02) 9322 7001
www.deloitte.com.au
Independent Auditor's Review Report
to the Members of eServGlobal Limited
We have reviewed the accompanying half-year financial report of
eServGlobal Limited, which comprises the condensed consolidated
statement of financial position as at 30 April 2013, and the
condensed consolidated statement of profit or loss and other
comprehensive income, the condensed consolidated statement of cash
flows and the condensed consolidated statement of changes in equity
for the half-year ended on that date, selected explanatory notes
and, the directors' declaration of the consolidated entity
comprising the company and the entities it controlled at the end of
the half-year or from time to time during the half-year as set out
on pages 7 to 15.
Directors' Responsibility for the Half-Year Financial Report
The directors of the company are responsible for the preparation
of the half-year financial report that gives a true and fair view
in accordance with Australian Accounting Standards and the
Corporations Act 2001 and for such internal control as the
directors determine is necessary to enable the preparation of the
half-year financial report that is free from material misstatement,
whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express a conclusion on the half-year
financial report based on our review. We conducted our review in
accordance with Auditing Standard on Review Engagements ASRE 2410
Review of a Financial Report Performed by the Independent Auditor
of the Entity, in order to state whether, on the basis of the
procedures described, we have become aware of any matter that makes
us believe that the half-year financial report is not in accordance
with the Corporations Act 2001 including: giving a true and fair
view of the consolidated entity's financial position as at 30 April
2013 and its performance for the half-year ended on that date; and
complying with Accounting Standard AASB 134 Interim Financial
Reporting and the Corporations Regulations 2001. As the auditor of
eServGlobal Limited, ASRE 2410 requires that we comply with the
ethical requirements relevant to the audit of the annual financial
report.
A review of a half-year financial report consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with Australian Auditing Standards and
consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
Auditor's Independence Declaration
In conducting our review, we have complied with the independence
requirements of the Corporations Act 2001. We confirm that the
independence declaration required by the Corporations Act 2001,
which has been given to the directors of eServGlobal Limited, would
be in the same terms if given to the directors as at the time of
this auditor's review report.
Conclusion
Based on our review, which is not an audit, we have not become
aware of any matter that makes us believe that the half-year
financial report of eServGlobal Limited is not in accordance with
the Corporations Act 2001, including:
(a) giving a true and fair view of the consolidated entity's
financial position as at 30 April 2013 and of its performance for
the half-year ended on that date; and
(b) complying with Accounting Standard AASB 134 Interim
Financial Reporting and the Corporations Regulations 2001.
DELOITTE TOUCHE TOHMATSU
Michael Kaplan
Partner
Chartered Accountants
Sydney, 28 June 2013
Liability limited by a scheme approved under Professional
Standards Legislation.
Member of Deloitte Touche Tohmatsu Limited
Directors' declaration
The directors declare that:
a) in the directors' opinion, there are reasonable grounds to
believe the company will be able to pay its debts as and when they
become due and payable; and
b) in the directors' opinion, the attached financial statements
and notes thereto are in accordance with the Corporations Act 2001,
including compliance with accounting standards and giving a true
and fair view of the financial position and performance of the
consolidated entity.
Signed in accordance with a resolution of the directors made
pursuant to s.303(5) of the Corporations Act 2001.
On behalf of the directors
Richard Mathews
Chairman
Brisbane, 28 June 2013
Condensed consolidated statement of profit or loss and other
comprehensive income for the half-year ended 30 April 2013
Consolidated
Half-Year Half-Year
Ended Ended
30 April 30 April
2013 2012
$'000 $'000
---------- ----------
Revenue 13,621 12,599
Cost of sales (5,272) (7,609)
---------- ----------
Gross profit 8,349 4,990
Interest income 13 290
Foreign exchange gain/(loss) 1,066 (2,379)
Research and development
expenses (855) (893)
Sales and marketing expenses (2,356) (3,282)
Administration expenses (6,544) (6,490)
Loss before interest expense,
tax, depreciation and amortisation (327) (7,764)
Amortisation expense (1,171) (2,306)
Depreciation expense (290) (353)
Loss before interest expense
and tax (1,788) (10,423)
Finance costs (325) (674)
Loss before tax (2,113) (11,097)
Income tax expense (364) (114)
---------- ----------
Loss for the period (2,477) (11,211)
========== ==========
Other comprehensive income
(loss), net of tax
Items that may be reclassified
subsequently to profit or
loss
Exchange differences arising
on the translation of foreign
operations (1,095) 614
---------- ----------
Total comprehensive loss
for the period (3,572) (10,597)
========== ==========
Profit (loss) attributable
to:
Equity holders of the parent (2,539) (11,278)
Non controlling interest 62 67
---------- ----------
(2,477) (11,211)
========== ==========
Total comprehensive income
(loss) attributable to:
Equity holders of the parent (3,635) (10,630)
Non controlling interest 63 33
---------- ----------
(3,572) (10,597)
========== ==========
Loss per share:
Basic (cents per share) (1.1) (5.7)
Diluted (cents per share) (1.1) (5.7)
Notes to the Financial Statements are included on pages 12 to
15
Condensed consolidated statement of financial position
as at 30 April 2013
Consolidated
----------------------
31 October
30 April 2012
2013
Note $'000 $'000
----- --------- -----------
Current Assets
Cash and cash equivalents 5,087 3,794
Trade and other receivables 2 17,492 14,094
Inventories 170 158
Current tax assets 90 90
--------- -----------
Total Current Assets 22,839 18,136
--------- -----------
Non-Current Assets
Property, plant and equipment 600 912
Deferred tax assets 6,135 6,005
Goodwill 5,974 5,878
Other intangible assets 3 3,297 3,508
--------- -----------
Total Non-Current Assets 16,006 16,303
--------- -----------
Total Assets 38,845 34,439
--------- -----------
Current Liabilities
Trade and other payables 6,476 7,816
Borrowings 8 - 1,200
Current tax payables 63 69
Provisions 1,729 1,724
Other 4 2,578 2,125
--------- -----------
Total Current Liabilities 10,846 12,934
--------- -----------
Non-Current Liabilities
Borrowings 8 - 6,000
Provisions 436 431
--------- -----------
Total Non-Current Liabilities 436 6,431
--------- -----------
Total Liabilities 11,282 19,365
--------- -----------
Net Assets 27,563 15,074
========= ===========
Equity
Issued capital 9 106,695 90,770
Reserves 10 (1,042) (82)
Accumulated Losses (78,238) (75,699)
--------- -----------
Parent entity interest 27,415 14,989
Non controlling interest 148 85
Total Equity 27,563 15,074
========= ===========
Notes to the Financial Statements are included on pages 12 to
15
Condensed consolidated statement of changes in equity
for the half-year ended 30 April 2013
Foreign Employee Attributable
Currency equity-settled to owners Non
Issued Translation benefits Accumulated of the controlling
Capital Reserve Reserve Losses parent Interest Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000
----------- ------------- --------------- ------------ ------------- ------------- ------------
Consolidated
Balance
at 1 November
2012 90,770 (2,099) 2,017 (75,699) 14,989 85 15,074
=========== ============= =============== ============ ============= ============= ============
Profit/(loss)
for the
period - - - (2,539) (2,539) 62 (2,477)
Exchange
differences
arising
on
translation
of foreign
operations - (1,096) - - (1,096) 1 (1,095)
----------- ------------- --------------- ------------ ------------- ------------- ------------
Total
comprehensive
income/(loss)
for the
period - (1,096) - (2,539) (3,635) 63 (3,572)
Issue of
new shares 15,925 - - - 15,925 - 15,925
Equity settled
payments - - 136 - 136 - 136
----------- ------------- --------------- ------------ ------------- ------------- ------------
Balance
at 30 April
2013 106,695 (3,195) 2,153 (78,238) 27,415 148 27,563
=========== ============= =============== ============ ============= ============= ============
Balance
at 1 November
2011 90,770 (3,376) 1,393 (59,984) 28,803 70 28,873
=========== ============= =============== ============ ============= ============= ============
Profit/(loss)
for the
period - - - (11,278) (11,278) 67 (11,211)
Exchange
differences
arising
on
translation
of foreign
operations - 648 - - 648 (34) 614
Total
comprehensive
income/(loss)
for the
period - 648 - (11,278) (10,630) 33 (10,597)
Equity settled - - - - - - -
payments
Balance
at 30 April
2012 90,770 (2,728) 1,393 (71,262) 18,173 103 18,276
=========== ============= =============== ============ ============= ============= ============
Notes to the Financial Statements are included on pages 12 to
15
Condensed consolidated statement of cash flows
for the half-year ended 30 April 2013
Consolidated
Half-Year Half-Year
Ended Ended
30 April 30 April
2013 2012
$'000 $'000
---------- ----------
Cash Flows from Operating
Activities
Receipts from customers 10,685 15,424
Payments to suppliers and
employees (16,641) (27,017)
Interest and other costs
of finance paid (468) (654)
Income tax paid (163) (7,556)
Net cash used in operating
activities (6,587) (19,803)
---------- ----------
Cash Flows From Investing
Activities
Proceeds from disposal of
assets - 11,500
Interest received 7 968
Payment for property, plant
and equipment (14) (35)
Software development costs (856) (586)
---------- ----------
Net cash (used in)/from investing
activities (863) 11,847
---------- ----------
Cash Flows From Financing
Activities
Proceeds from issue of shares 16,802 -
Payment for share issue costs (877) -
Repayment of loan (7,200) (2,000)
Proceeds from borrowings - 2,500
---------- ----------
Net cash from financing activities 8,725 500
---------- ----------
Net increase/(decrease) In
Cash and Cash Equivalents 1,275 (7,456)
Cash At The Beginning Of
The Period 3,794 10,129
Effects of exchange rate
changes on the balance of
cash held in foreign currencies 18 (47)
---------- ----------
Cash and Cash Equivalents
At The End Of The Period 5,087 2,626
========== ==========
Notes to the Financial Statements are included on pages 12 to
15
Notes to the consolidated financial statements
1. Significant accounting policies
Statement of compliance
The half-year financial report is a general purpose financial
report prepared in accordance with the Corporations Act 2001 and
AASB 134 'Interim Financial Reporting'. Compliance with AASB 134
ensures compliance with International Financial Reporting Standard
IAS 34 'Interim Financial Reporting'. The half-year financial
report does not include notes of the type normally included in an
annual financial report and should be read in conjunction with the
most recent annual financial report.
Basis of preparation
The condensed financial statements have been prepared on the
basis of historical cost. Cost is based on the fair values of the
consideration given in exchange for assets. All amounts are
presented in Australian dollars.
The company is a company of the kind referred to in ASIC Class
Order 98/100, dated 10 July 1998, and in accordance with that Class
Order amounts in the directors' report and the half-year financial
report are rounded off the nearest thousand dollars, unless
otherwise indicated.
The accounting policies and methods of computation adopted in
the preparation of the half-year financial report are consistent
with those adopted and disclosed in the company's 2012 financial
report for the financial period ended 31 October 2012, unless
otherwise stated. These accounting policies are consistent with
Australian Accounting Standards and with International Financial
Reporting Standards.
The Group has adopted all of the new and revised Standards and
Interpretations issued by the Australian Accounting Standards Board
(the AASB) that are relevant to their operations and effective for
the current reporting period.
New and revised standards and amendments thereof and
interpretations effective for the current half year that are
relevant to the Group include:
-- Amendments to AASB 1, 5, 7, 101, 112, 120, 121, 132, 133 and
134 as a consequence of AASB 2011-9 'Amendments to Australian
Accounting Standards - Presentation of Items of Other Comprehensive
Income'.
The adoption of all the new and revised standards and
interpretations has not resulted in any changes to the Group's
accounting policies and has no effect on the amounts reported for
the current or prior half years. However, the application of AASB
2011-9 has resulted in changes to the Group's presentation of, or
disclosure in, its half year financial statements.
AASB 2011-9 introduces new terminology for the statement of
comprehensive income and income statement. Under the amendments to
AASB 101, the statement of comprehensive income is renamed as a
statement of profit or loss and other comprehensive income and the
income statement is renamed as a statement of profit or loss. The
amendments to AASB 101 retain the option to present profit or loss
and other comprehensive income in either a single statement or in
two separate but consecutive statements. However, the amendments to
AASB 101 require items of other comprehensive income to be grouped
into two categories in the other comprehensive income section: (a)
items that will not be reclassified subsequently to the profit or
loss and (b) items that may be reclassified subsequently to profit
or loss when specific conditions are met.
Income tax on items of other comprehensive income is required to
be allocated on the same basis - the amendments do not change the
option to present items of other comprehensive income either before
tax or net of tax. The amendments have been applied
retrospectively, and hence the presentation of items of other
comprehensive income has been modified to reflect the changes.
Other than the above mentioned presentation changes, the
application of the amendments to AASB 101 does not result in any
impact on profit or loss, Other comprehensive income and total
comprehensive income.
2. Current trade and other receivables
Consolidated
----------------------
30 April 31 October
2013 2012
$'000 $'000
Trade receivables 8,216 8,791
Work in progress 7,590 3,602
Other receivables 685 461
Deposits and prepayments 1,001 1,240
--------- -----------
17,492 14,094
--------- -----------
3. Other intangible assets
Customer Software Total
Relationships Develop-ment
$'000
$'000 $'000
Carrying value at
1 November 2012 - 3,508 3,508
Internally developed - 862 862
Amortisation expense
for the period - (1,171) (1,171)
Effects of foreign
exchange movements - 98 98
---------------- -------------- --------
Carrying value at
30 April 2013 - 3,297 3,297
---------------- -------------- --------
Carrying value at
1 November 2011 2,630 4,178 6,808
Internally developed - 1,826 1,826
Amortisation expense
for the period (2,479) (2,225) (4,704)
Effects of foreign
exchange movements (151) (271) (422)
-------- ------- --------
Carrying value at
31 October 2012 - 3,508 3,508
-------- ------- --------
4. Other Current Liabilities
Consolidated
----------------------
30 April 31 October
2013 2012
$'000 $'000
Deferred income 2,578 2,125
--------- -----------
5. Dividends
Half Year ended Half Year Ended
30 April 2013 30 April 2012
Cents Total Cents Total
per share $'000 per share $'000
Fully paid ordinary
shares
Recognised amounts
Final dividend paid
in respect of prior
financial year - - - -
----------- ------- ----------- -------
6. Segment Information
AASB 8 requires operating segments to be identified on the basis
of internal reports about components of the Group that are
regularly reviewed by the chief operating decision maker in order
to allocate resources to the segment and to assess its
performance.
The Group operates in a single segment being the
telecommunications software solutions business. Accordingly, all
reported information in the financial report relates to this single
segment.
7. Issuances, repurchases and repayment of securities
During the period:
a) The company issued a total of 52,198,291 shares during the
period (2012: nil), raising a total of $15.925m net of
expenses.
It raised GBP3.740 million ($5.815 million) through the placing
(the "First Placing") of 17,807,815 new ordinary shares (the "First
Placing Shares") with institutional investors in the UK and
approximately GBP2.457 million ($3.742 million) by means of a
direct subscription for 11,700,000 new ordinary shares (the
"Subscription Shares") by investors in Australia (the
"Subscription"). The issue price for the First Placing Shares and
the Subscription Shares (together the "New Shares") was 21 pence
($0.32) per share.
The First Placing and Subscription resulted in the issue of a
total of 29,507,815 new ordinary fully paid shares which
represented 14.99 percent of the current issued ordinary share
capital of the Company. Following completion of the First Placing
and Subscription, the Company had 226,355,521 ordinary shares in
issue (the "Enlarged Share Capital").
The Company subsequently raised a further GBP4.765 million
($7.245 million) through the placing (the "Second Placing") of
22,690,476 new ordinary shares (the "Second Placing Shares") with
institutional investors in the UK.
The issue price for the Second Placing Shares was 21 pence
($0.32) per share. The Second Placing Shares represented
approximately 10 percent of the Enlarged Share Capital. Following
completion of the First Placing, Subscription and Second Placing
the Company has 249,045,997 ordinary shares in issue.
b) The company issued 1,600,000 share options over ordinary
shares under its executive and employee share option plan (6 months
to 30 April 2012: 1,500,000).
c) The company cancelled 1,500,000 share options over ordinary
shares under its executive and employee share option plan.
8. Borrowings
Consolidated
---------------------------
30 April 31 October
2013 2012
$'000 $'000
Secured
Loans from current and former
shareholders (a) - 7,200
- 7,200
--------------------------------------------------- -----------
(a) During the period the remaining $7.2 million shareholder
loans were fully repaid.
(b) Subsequent to the balance sheet date the Company entered
into a loan facility agreement for $3.0 million which expires in
April 2014. The facility is subject to a range of covenants and
provisions. The facility was drawn down in full on 14(th) June
2013.
9. Issued Capital
Consolidated
---------------------------
31 October
30 April 2013 2012
$'000 $'000
249,045,997 fully paid
ordinary shares (31 October
2012: 196,847,706) 106,695 90,770
-------------- -----------
30 April 2013 31 October
2012
No. $'000 No. $'000
'000 '000
-------- -------- -------- -------
Fully Paid Ordinary Shares
Balance at the beginning
of the financial period 196,848 90,770 196,848 90,770
Shares issued in the period 52,198 16,802 - -
Costs of share issue - (877) - -
Balance at the end of
the financial period 249,046 106,695 196,848 90,770
10. Reserves
Consolidated
---------------------------
30 April 2013 31 October
2012
$'000 $'000
Employee equity-settled
benefit 2,153 2,017
Foreign currency translation (3,195) (2,099)
-------------- -----------
(1,042) (82)
-------------- -----------
11. Subsequent events
There has not been any matter or circumstance, other than those
referred to in the financial statements or notes thereto, that has
arisen since the end of the financial period, that has
significantly affected, or may significantly affect, the operations
of the Group, the results of those operations, or the state of
affairs of the Group in future financial years.
Other information required to be given to ASX under listing rule
4.2A.3
Net tangible assets Current period 31October
per security 2012
Net tangible assets 7.3 cents 2.9 cents
per security
-------------------- --------------- -----------
Dividends
Amount Amount Franked Amount Date paid/
per amount per security payable
security per security of foreign
at 30% source
tax dividend
-----------
Interim dividend: Nil N/A N/A N/A N/A
Current year
Previous period Nil N/A N/A N/A N/A
-----------
Final dividend
paid in respect
of previous financial
year: Nil N/A N/A N/A N/A
Current period:
Final dividend
Previous corresponding Nil N/A N/A N/A N/A
period:
Special dividend
Final dividend
------------------------- ------- ---------- -------------- -------------- -----------
The dividend or distribution plans shown below
are in operation.
N/A.
---------------------------------------------------
The last date(s) for receipt
of election notices for N/A
the +dividend or distribution
plans
-------
Details of associates and joint venture entities
Name of entity Percentage of Aggregate share
ownership interest of net profit
held at end of (loss) contributed
period to the reporting
entity
---------------------------------------- -------------------------------------
Current Previous Current Previous
period corresponding period corresponding
period period
$A'000 $A'000
--------------- -------------------- ------------------ -------------- ---------------------
Total N/A N/A N/A N/A
--------------- -------------------- ------------------ -------------- ---------------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR EAEKPAAEDEEF
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