TIDMESG
RNS Number : 1090K
eServGlobal Limited
24 December 2015
eServGlobal Limited (eServGlobal or the "Company")
eServGlobal Preliminary Results (LSE:AIM) and Appendix 4E (ASX):
FY2015
Paris: 24 December 2015
eServGlobal (AIM: ESG & ASX: ESV), the provider of
end-to-end mobile financial services to emerging markets, announces
its preliminary results and ASX Appendix 4E for the financial year
ended 31 October 2015.
FINANCIAL SUMMARY
-- Revenue of A$25.9m (GBP13.0m) compared to the prior year of A$31.3m (GBP17.3m)
-- EBITDA loss of A$24.2m (GBP12.2m) compared to the prior year
EBITDA profit of A$28.6m (GBP15.8m)
-- Core mobile money business adjusted EBITDA loss of A$10.4m
(GBP5.2m) compared to a prior year adjusted EBITDA profit of A$2.6m
(GBP1.4m).
-- Net loss after tax of A$33.7m (GBP17.0m) compared to a prior
year profit of A$14.2m (GBP7.9m)
-- During the financial year, technology development costs of
A$2.7m (GBP1.4m) have been capitalised in respect of the PayMobile
3.0 mobile money platform, enabling eServGlobal to sell through
channel partners and improve project margins. Development was
completed by 30 April 2015.
-- Loan funding of A$15.5m (GBP7.5m) obtained during the year
-- 10 million shares issued during the year raising a total of A$5.2m (GBP2.6m) net of expenses
-- Cash and cash equivalents at 31 October 2015 of A$5.0m
(GBP2.5m). Net cash flow used in operating activities increased
from A$4.1m (GBP2.3m) in FY14 to A$15.7m (GBP7.9m) in FY15
Summary Financials FY15 FY15 FY14 FY14
Full Full Full Full
Year Year Year Year
A$M GBPM+ A$M GBPM+
Revenue 25.9 13.0 31.3 17.3
Cost of Sales 20.6 10.3 13.4 7.4
Gross Profit 5.3 2.7 17.9 9.9
Gain recognised on
disposal of HomeSend - - -31.7 -17.5
Share of loss of associate 3.8 1.9 2.3 1.3
Adjusted Operating
Costs* 17.1 8.6 15.3 8.5
Adjusted EBITDA (Core
Business)** -10.4 -5.2 2.6 1.4
Net Interest -1.4 -0.7 -0.3 -0.1
Amortization -1.9 -1.0 0.0 0.0
Depreciation -0.1 -0.1 -0.6 -0.3
Adjusted PBT* -13.8 -7.0 1.7 1.0
Reported PBT -31.6 -15.9 27.8 15.3
Income Tax 2.1 1.1 13.5 7.5
PAT -33.7 -17.0 14.2 7.9
+Average exchange rate was 0.5021 GBP to AUD (FY2014 0.5521)
* Excludes gain recognised on disposal of HomeSend (FY2014
A$31.7m), equity-accounted share of HomeSend loss of A$3.8m (FY2014
A$2.3m), foreign exchange gains of A$0.9m (FY2014 loss of A$0.4m),
non-recurring costs of A$3.3m (FY2014 A$2.5m), interest income of
A$0.05m (FY2014 A$0.03m), share based payments of A$0.1m (FY2014
A$0.4m) goodwill impairment of A$4.0m (FY2014 nil) and debtor and
work in progress provisions made after impairment re-assessment of
prudent provisioning policies of A$6.9m (FY2014 nil)
** Excludes all items above (*) except goodwill impairment of
A$4.0m (FY2014 nil) which is included in the profit and loss
statement below the EBITDA total
Note: numbers in summary financials may not necessary total due
to rounding
John Conoley, Executive Chairman, eServGlobal, said: "These
numbers confirm the very poor year that was 2015 for eServGlobal.
The consequent effect is that working capital remains tight in
terms of operational cash flow in the short term. We expect to
begin a recovery in the second quarter of the 2016 financial year.
The Board and management are targeting generating operational cash
in 2016 based on better management, better control, better sales
execution, and the substantially lower cost base."
"eServGlobal's Board remain confident in the long term prospects
for the HomeSend joint venture based on continued progress in 2015.
HomeSend achieved 386% growth in live corridors during the 12
months to 30 November 2015. The joint venture has seen growing
traction with the world's leading money transfer operations on the
sending side and the opening of key new markets, such as China, on
the receiving side. The coming year is crucial as the business
transitions from the start-up phase, focussing on structural
development, into a growing business beginning to focus on growing
volumes through a widening number of active corridors. The Board of
eServGlobal expects significant progress in 2016"
For further information, please
contact:
www.eservglobal.com
eServGlobal
Tom Rowe, Company Secretary T: +61 (0)2 8014
Alison Cheek, VP Corporate Communications 5050
Canaccord Genuity Limited (Nomad www.canaccordgenuity.com
and Broker) T: +44 (0) 20 7523
Simon Bridges / Cameron Duncan 8000
/ Emma Gabriel
About eServGlobal
eServGlobal (AIM:ESG, ASX:ESV) offers mobile money solutions
which put feature-rich services at the fingertips of users
worldwide, covering the full spectrum of mobile financial services,
mobile wallet, mobile commerce, recharge, promotions and agent
management features. eServGlobal invests heavily in product
development, using carrier-grade, next-generation technology and
aligning with the requirements of customers in over 50
countries.
Together with MasterCard and BICS, eServGlobal is a joint
venture partner of the HomeSend global payment hub, a market
leading solution based on eServGlobal technology and enabling
cross-border money transfer between mobile money accounts, payment
cards, bank accounts or cash outlets from anywhere in the world
regardless of the users location.
eServGlobal also builds on its extensive experience in the telco
domain to offer a comprehensive suite of sophisticated, revenue
generating Value-Added Services to engage subscribers in a dynamic
manner. eServGlobal has been a source of innovative solutions for
mobile and financial service providers for 30 years.
FINANCIAL REVIEW
The consolidated entity achieved sales revenue for the year of
A$25.9 million (2014: A$31.3 million).
Earnings before interest, tax, depreciation and amortisation
("EBITDA") was a loss of A$24.2 million after foreign exchange
gains of A$0.9 million and share based payments of A$0.1 million
(2014: EBITDA profit of A$28.6 million after foreign exchange
losses of A$0.4 million and share based payments of A$0.4
million).
The net result of the consolidated entity for the year to 31
October 2015 was a loss after tax and minority interest for the
period of A$33.7 million (2014: profit after tax and minority
interest A$14.2 million). Included in this result was an income tax
expense of A$2.1 million (2014: income tax expense of A$13.5
million). Loss per share was 12.8 cents (2014: earnings per share
5.6 cents).
The operating cash flow for the year was a net outflow of A$15.7
million (2014: net outflow A$4.1 million). Total cash flow for the
period was a net inflow of A$1.0 million (2014: net outflow of
A$1.3 million). Cash at 31 October 2015 was A$5.0 million.
Adjusted EBITDA for the core business was a loss of A$10.4
million. The main adjustments to the total EBITDA loss of A$24.2
million are for the equity-accounted share of the losses of the
HomeSend joint venture company of A$3.8 million, non-recurring
costs of A$3.3 million and the debtor and work in progress
provisions of A$6.9 million made after impairment re-assessment of
prudent provisioning policies.
The loss for the year includes significant provisions for old
debtors and work in progress, together with a full impairment of
the carrying value of goodwill.
The group operates in jurisdictions where delays are frequently
encountered in receipting invoiced receivables due to banking and
other regulatory issues, and where political instability and other
factors can cause delays in provision of contractual services to
customers. This has led to a historical and continuing high level
of trade receivables and work in progress relative to the group's
operational revenues. In the current year the new management team
have undertaken a detailed review of the trade debtors and work in
progress position and have changed the method adopted in estimating
the required provision against these balances. The new method
requires, unless particular circumstances dictate otherwise, a full
provision to be adopted against trade receivables where these are
overdue by more than 12 months and a full provision against
recorded work in progress to be adopted where there has been
inactivity on a particular contract (beyond the control of the
group) for a period of 12 months or longer. These new provisioning
estimation methods have resulted in the significant provisioning
expense being recorded in the current year of A$4.6 million in
respect of trade receivables and A$2.3 million in respect of work
in progress. Management are confident that these policies are
prudent and appropriate in recognition of the particular regulatory
and political hurdles the company faces in the geographical regions
in which it presently operates.
In light of the Group's poor performance in the current year,
and in response to the Goodwill impairment assessment that has been
undertaken by management as is required under Accounting Standards,
the directors have resolved to fully impair the recorded carrying
value of Goodwill in the statement of financial position totalling
A$4.0 million. Whilst the historical Goodwill balance was
attributable to the overall cash generating unit in which the group
presently operates, the Goodwill is not seen to be directly related
to the primary current and future income streams of the business
and has therefore been impaired in full in the current year's
accounts.
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The full unaudited accounts are presented in the Appendix
4E.
OPERATIONAL REVIEW
In FY15, eServGlobal reported an adjusted EBITDA loss of A$10.4M
(GBP5.2M) for the core business. As previously announced, delays in
closing certain high margin orders before year-end have impacted
the Company's FY15 results, however these projects remain largely
in the pipeline and it is expected they will be booked in FY16. In
addition to these contract slippages, significant additional costs
were incurred in delivering prior period projects, in turn causing
further delay in recognising work in progress.
Total overheads in FY2016 are planned to be below A$14M, against
a backdrop of approximately A$20M incurred for FY2015. The Company
is targeting revenues of A$31 - A$34M in FY2016 and expects to be
EBITDA positive for the year (a reduced cost base and improved sale
process is expected to support a breakeven point of A$29 - A$31M in
revenues). Substantial changes, including changes to the sales
process and structure, are now largely complete and the Company
will continue to focus on cost and process optimisation going
forward.
With a streamlined and revitalised Board and management team,
the Company is now better positioned to drive effective cash
collection and deliver revenue growth. PayMobile 3 is the platform
on which eServGlobal can execute. The Company's attention is now
firmly on improving gross margins and revenue generation, and with
our improved sales processes and streamlined costs, the Company is
capable of exceeding a 20% EBITDA margin and with greater
predictability. eServGlobal, however, remains cognisant of the
usual macro and execution risks that any company may face
(particularly in the emerging markets in which the Company
operates).
During FY2015, Duncan Lewis, Francois Barrault and Paolo
Montessori left the Board of Directors of the Company, with Stephen
Blundell stepping down after year-end.
Core business: Mobile money and mobile financial services
eServGlobal offers best-in-breed mobile money and advanced
recharge for emerging markets. eServGlobal develops and implements
technology solutions which enable simple and secure financial
inclusion, through the mobile phone, for people across the
world.
Developments throughout the year:
-- Completion of the PayMobile 3.0 platform, a mobile money and
advanced recharge technology for emerging markets.
o PayMobile 3.0 is now live in 5 customer sites and the Company
is realising the benefits of offering a true industrialised
product. The first end-to-end implementation of the standardised
platform was completed for a customer in Botswana. This project was
completed 35% faster than previous projects on PayMobile 2.0,
allowing payment milestones to be reached earlier while investing
less time and resources in development.
o Adoption of a new hardware architecture and a new handling
process with PayMobile 3.0, making significant time savings through
software standardisation. This approach brings the average project
duration down from 6 - 8 months to 3 - 5 months, which equals to a
43% average saving in time and resources costs.
o Opportunities for both gross margin enhancement over time and
for easier cash collection.
-- eServGlobal launched a white-label smartphone app to cater to
the increasing penetration of low-cost smartphones in emerging
markets. The app has already been sold to five existing customers,
including services in Armenia and Somalia. The app will make
eServGlobal's PayMobile 3.0 solution more attractive to new
customers looking for a comprehensive mobile money solution. It
will also encourage the subscribers of existing customers to
increase usage of their mobile wallet, therefore generating
extension and upgrade projects.
-- The company has made continued progress within the Zain
Group. eServGlobal was featured as a key Technology Partner at the
Zain Group's Technology Conference in December 2015.
o eServGlobal now has live services in four Zain affiliates.
HomeSend: International remittance
HomeSend is a disruptive, multilateral global payments hub that
allows all players in the global payments space to interoperate via
a single connection. HomeSend, as a B2B solution, plays a unique
role in offering interconnectivity between MTOs, Telcos, Banks,
Mobile Money Providers and Financial Service Providers. Through a
connection to HomeSend, hub members can offer their subscribers
(individuals, business, state bodies or NGOs) the ability to send
money to and from bank accounts, mobile money accounts, payment
cards or cash outlets - regardless of their location or that of the
receiver. HomeSend natively interfaces with eServGlobal's domestic
mobile money platform, providing a synergy between the two
solutions.
HomeSend has been operating as a joint venture of MasterCard,
eServGlobal and BICS since April 2014. During FY15, the joint
venture has made substantial progress in corridor deployment;
expanding customer coverage, both geographically and in terms of
the types of partnerships; and progress on strategic initiatives
such as the payment institution licence and move to a new PCI-DSS
compliant data centre.
Developments and highlights throughout the year:
-- Significant progress in corridor deployments with 2,362 live
corridors at end of November 2015, a 50% increase from June 2015
and a 386% increase since November 2014. New connections are going
live each month, connecting over 200 sending countries and 33
receiving countries, representing more than 100% increase in
sending countries since November 2014.
-- As new corridors go live, the number and volume of
transactions continues to climb. 301% annual growth in transaction
volume compared to November 2014.
-- HomeSend is establishing itself as the backbone of the mobile
money transfer ecosystem. During FY15 the hub significantly
expanded its coverage, both geographically and in terms of the
types of service providers:
o HomeSend's customers include several of the Top 10 MTOs
worldwide, including MoneyGram, WorldRemit and Skrill. In FY15
HomeSend added to this with the launch of live services for Azimo
and Transfer Galaxy.
o In November 2015, HomeSend announced an agreement with
GeoSwift, opening the substantial Chinese market to the hub.
HomeSend's global partners can now send money directly to consumers
and businesses in China, in local currency.
o Throughout the year, HomeSend also announced agreements in
several new markets including Armenia, South Africa, Sir Lanka,
Nigeria, Zimbabwe and Fiji.
-- MasterCard continues to show strong support for the joint
venture, opening several new opportunities throughout the year.
HomeSend will facilitate the international remittance capabilities
for MasterCard Send, an end-to-end, digital platform that will
leverage the industry-leading MasterCard network, paired with key
capabilities from other personal payments platforms including
HomeSend.
-- During FY15 the HomeSend Management team presented a strategy
to accelerate growth to capitalise on current demand. The strategy
includes:
o Co-funded marketing initiatives to stimulate subscriber
demand
o Requirement for a new data center which is PCI-DSS compliant
as a pre-requisite to connect to the MasterCard network
o Acquisition of payment institution license (required to
provide services in several key markets)
The requirement for extra capital from JV partners (EUR3.5
million eServGlobal contribution) was approved by the Board in
September 2015. eServGlobal paid EUR0.875 million ($1.353 million)
on 14 October 2015 and is required to pay the balance of EUR2.625
million ($4.059) on 15 April 2016.
HomeSend's aspiration is to become the largest processor of
digital remittances and to drive the shift to digital.
OUTLOOK
The Company expects to achieve a small EBITDA surplus for the
core business in the 2016 financial year with some revenue growth
and a substantially lower cost base.
Working capital remains tight in terms of operational cash flow
in the short term. A recovery is expected to start in the second
quarter of FY16. The company expects to require the second tranche
of the loan facility from Henderson Global Investors of GBP2.5
million (A$ 5.0 million) before 31 March 2016, partly to underpin
working capital requirements and also to repay the National
Australia Bank loan of A$3.0 million which is due for repayment on
31 March 2016. The Board and management are targeting generating
operational cash in 2016 based on better management, better
control, better sales execution, and the substantially lower cost
base.
The Company remains confident in the long term prospects for the
HomeSend joint venture based on continued progress in 2015.
HomeSend achieved 386% growth in live corridors during the 12
months to 30 November 2015. The joint venture has seen growing
traction with the world's leading money transfer operations on the
sending side and the opening of key new markets, such as China, on
the receiving side. The coming year is crucial as HomeSend
transitions from the start-up phase, focussing on structural
development, into a growing business beginning to focus on growing
volumes through a widening number of active corridors. eServGlobal
remains satisfied with the continuing progress of the HomeSend
joint venture and expects significant progress in 2016.
Appendix 4E
Preliminary Final Report
for the year ended 31 October 2015
eServGlobal Limited
ABN 59 052 947 743
1. Reporting Period
Current reporting period : Financial year ended 31 October
2015
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Previous reporting period : Financial year ended 31 October
2014
2. Results (unaudited) for announcement to the market
Results A$ '000
--------------------------------------- ------------------------------------
Revenue Down 17.3% to 25,866
Profit/(Loss) after tax Down >100% to (33,654)
Profit/(Loss) after tax attributable
to members Down >100% to (33,820)
Dividends (distributions) Amount per Franked amount
security per security
----------------------
Current period
Interim dividend Nil c 0%
Final dividend Nil c 0%
--------------------------------------- ------------ ----------------------
Previous corresponding period
Interim dividend Nil c 0%
Final dividend Nil c 0%
--------------------------------------- ------------ ----------------------
Record date for determining -
entitlements to the dividend.
------------------------------------
Brief explanation of the figures above
The consolidated entity achieved sales revenue for
the year of $25.9 million (2014: $31.3 million).
Earnings before interest, tax, depreciation and amortisation
and goodwill impairment ("EBITDA") was a loss of $24.2
million, inclusive of foreign exchange gains of $0.9
million and share based payments of $0.1 million (2014:
EBITDA profit of $28.6 million inclusive of foreign
exchange losses of $0.4 million and share based payments
of $0.4 million).
The net result of the consolidated entity for the year
to 31 October 2015 was a loss after tax and minority
interest for the period of $33.7 million (2014: profit
after tax and minority interest of $14.2 million).
Included in this result was an income tax expense of
$2.1 million (2014: income tax expense of $13.5 million).
Loss per share was 12.8 cents (2014: earnings per share
5.6 cents).
The operating cash flow for the year was a net outflow
of $15.7 million (2014: net outflow $4.1 million).
Total cash flow for the period was a net inflow of
$1.0 million inclusive of net proceeds from the issue
of shares of $5.5 million and proceeds from borrowings
of $15.5 million (2014: net outflow of $1.3 million
inclusive of net proceeds from the issue of shares
of $3.9m). Cash at 31 October 2015 was $5.0 million.
Subsequent Events
There has not been any matter or circumstance that
has arisen since the end of the financial year 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.
----------------------------------------------------------------
3. Consolidated statement of profit or loss and other comprehensive income
Year Ended Year Ended
31 Oct
2015 31 Oct 2014
Note $'000 $'000
----------- -------------
Revenue 25,866 31,261
Cost of sales (20,608) (13,359)
----------- -------------
Gross profit 5,258 17,902
Gain recognised on disposal
of HomeSend business - 31,684
Foreign exchange (loss)/
gain 883 (449)
Research and development
expenses (931) (2,151)
Sales and marketing expenses (7,008) (5,218)
Administration expenses (18,522) (10,900)
Share of loss of associate (3,831) (2,275)
Earnings before interest,
tax,
depreciation, amortisation
and goodwill impairment (24,151) 28,593
Amortisation expense (1,883) -
Depreciation expense (137) (584)
Impairment of goodwill 10 (4,002) -
Earnings before interest
and tax (30,173) 28,009
Finance cost (1,356) (254)
(Loss)/ Profit before tax (31,529) 27,755
Income tax credit/(expense) (2,125) (13,515)
----------- -------------
(Loss)/ Profit for the year (33,654) 14,240
=========== =============
Other comprehensive income/(loss)
Items that may be reclassified
subsequently to profit or
loss:
Exchange differences arising
on the translation of foreign
operations (nil tax impact) 4,297 (471)
----------- -------------
Total comprehensive (loss)/income
for the year (29,357) 13,769
=========== =============
(Loss)/Profit attributable
to:
Equity holders of the parent (33,820) 14,102
Non-controlling interest 166 138
----------- -------------
(33,654) 14,240
=========== =============
Total comprehensive (loss)/income
attributable to:
Equity holders of the parent (29,545) 13,599
Non-controlling interest 188 170
----------- -------------
(29,357) 13,769
=========== =============
Earnings per share:
Basic (cents per share) (12.8) 5.6
Diluted (cents per share) (12.8) 5.5
4. Consolidated statement of financial position
31 Oct 2015 31 Oct 2014
Note $'000 $'000
----- ------------ ------------
Current Assets
Cash and cash equivalents 4,976 3,679
Trade, other receivables
and work in progress 8 22,140 24,620
Other current assets 9(a) 7,606 2,191
Inventories 66 173
Current tax assets 107 98
------------ ------------
Total Current Assets 34,895 30,761
Non-Current Assets
Investment in associate 13 31,473 27,777
Property, plant and equipment 84 3
Deferred tax assets 976 1,701
Goodwill 10 - 3,568
Other intangible assets
- capitalised software
development 6,939 5,443
Other non-current assets 9(b) 3,456 4,939
------------ ------------
Total Non-Current Assets 42,928 43,431
------------ ------------
Total Assets 77,823 74,192
------------ ------------
Current Liabilities
Trade and other payables 11 19,619 10,719
Borrowings 12 3,000 3,000
Current tax payables 235 2,023
Provisions 1,380 1,174
Deferred revenue 1,286 1,117
------------ ------------
Total Current Liabilities 25,520 18,033
------------ ------------
Non-Current Liabilities
Borrowings 12 16,531 -
Provisions 943 865
------------ ------------
Total Non-Current Liabilities 17,474 865
------------ ------------
Total Liabilities 42,994 18,898
------------ ------------
Net Assets 34,829 55,294
============ ============
Equity
5,
Issued capital 6 116,074 110,574
Reserves 5 3,512 (4,155)
Accumulated Losses (85,169) (51,349)
------------ ------------
Parent entity interest 34,417 55,070
Non-controlling interest 412 224
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Total Equity 34,829 55,294
============ ============
5. Consolidated statement of changes in equity
Foreign Share Attributable
Currency Based to owners
Issued Translation Payments Accumu-lated of the Non-controlling
Capital Reserve Reserve Losses parent Interest Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000
--------- ------------- ---------- -------------- ------------- ---------------- ---------
Balance at 1
November
2014 110,574 (7,066) 2,911 (51,349) 55,070 224 55,294
========= ============= ========== ============== ============= ================ =========
(Loss)/Profit
for the year - - - (33,820) (33,820) 166 (33,654)
Exchange
differences
arising on
translation
of foreign
operations - 4,275 - - 4,275 22 4,297
--------- ------------- ---------- -------------- ------------- ---------------- ---------
Total comprehensive
income for the
year (net of tax) - 4,275 - (33,820) (29,545) 188 (29,357)
--------- ------------- ---------- -------------- ------------- ---------------- ---------
Issue of new shares
(Note 6) 5,500 - - - 5,500 - 5,500
Equity settled
payments - - 3,392 - 3,392 - 3,392
--------- ------------- ---------- -------------- ------------- ---------------- ---------
Balance at 31
October 2015 116,074 (2,791) 6,303 (85,169) 34,417 412 34,829
========= ============= ========== ============== ============= ================ =========
Balance at 1
November
2013 106,695 (6,563) 2,473 (65,451) 37,154 200 37,354
========= ============= ========== ============== ============= ================ =========
Profit for the
year - - - 14,102 14,102 138 14,240
Exchange
differences
arising on
translation
of foreign
operations - (503) - - (503) 32 (471)
--------- ------------- ---------- -------------- ------------- ---------------- ---------
Total comprehensive
income for the
year (net of tax) - (503) - 14,102 13,599 170 13,769
--------- ------------- ---------- -------------- ------------- ---------------- ---------
Issue of new shares
(Note 6) 3,879 - - - 3,879 - 3,879
Payment of
dividends - - - - - (146) (146)
Equity settled
payments - - 438 - 438 - 438
--------- ------------- ---------- -------------- ------------- ---------------- ---------
Balance at 31
October 2014 110,574 (7,066) 2,911 (51,349) 55,070 224 55,294
========= ============= ========== ============== ============= ================ =========
6. Issue of new shares
During the current year the company issued a total of 10,000,000
shares (2014: 5,928,055), raising a total of $5.212 million net of
expenses (2014: $3.879 million).
The fundraising was by way of subscription agreements with
existing and new Australian institutional investors at an issue
price of $0.55 per share.
In addition, 800,000 employee share options were exercised
during the period at an option price of $0.36 per share, raising a
total of $0.288 million.
7. Consolidated statement of cash flows
Year Ended Year Ended
31 Oct 2015 31 Oct 2014
$'000 $'000
------------- -------------
Cash Flows from Operating
Activities
Receipts from customers 21,244 24,290
Payments to suppliers and
employees (33,374) (30,100)
Refund of research & development
tax credits - 2,738
Interest and other finance
cost paid (426) (282)
Income tax paid (3,148) (720)
Net cash used in operating
activities (15,704) (4,074)
------------- -------------
Cash Flows From Investing
Activities
Proceeds from HomeSend business
divestment, net of transaction
costs - 5,418
Investment in HomeSend joint
venture company (1,353) -
Interest received 3 11
Payment for property, plant
and equipment (163) (76)
Software development costs (2,758) (6,327)
Net cash used in investing
activities (4,271) (974)
------------- -------------
Cash Flows From Financing
Activities
Proceeds from issue of shares 5,788 3,889
Payment for share issue costs (288) (10)
Dividend paid by controlled
entity to non-controlling
interest - (146)
Proceeds from borrowings 15,457 -
Net cash provided by financing
activities 20,957 3,733
------------- -------------
Net increase/(decrease) in
Cash and Cash Equivalents 982 (1,315)
Cash At The Beginning Of The
Year 3,679 4,909
Effects of exchange rate changes
on the balance of cash held
in foreign currencies 315 85
------------- -------------
Cash and Cash Equivalents
At The End Of The Year 4,976 3,679
============= =============
7.1 Notes to the consolidated statement of cash
flows
31 Oct 31 Oct
2015 2014
$'000 $'000
a) Reconciliation of
cash
Cash and cash equivalents 4,976 3,679
---------- ---------
Year Ended Year Ended
31 Oct 31 Oct
2015 2014
$'000 $'000
b) Reconciliation of (loss)/
profit for the year to
net cash flows from operating
activities
(Loss)/Profit for the year (33,654) 14,240
Interest received (3) (11)
Depreciation of non-current
assets 137 584
Amortisation of non-current 1,883 -
assets
(Profit)/Loss on disposal
of non-current assets - 2
Foreign exchange (gain)/loss,
including changes in foreign
currency net assets and
liabilities 373 (718)
Equity settled share-based
payments 54 438
Non cash finance cost 977 -
Gain on disposal of business - (31,684)
Share of loss of associate 3,831 2,275
(Increase)/decrease in
current income tax balances (1,798) 6,048
(Increase)/decrease in
deferred tax balances 726 8,624
Impairment of goodwill 4,002 -
Impairment loss recognised
on trade receivables and
work in progress 7,193 245
Changes in net assets and
liabilities:
(Increase)/decrease in
assets:
- Trade receivables, work
in progress and other assets (4,825) (6,003)
- Inventories 106 (99)
Increase/(decrease) in
liabilities:
- Trade and other payables 4,840 3,369
- Provisions 284 (511)
- Other liabilities 170 (873)
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