RNS Number:8733G
Cardpoint PLC
02 November 2007
Friday 2 November 2007
Cardpoint plc
("Cardpoint" or the "Company")
Preliminary results for the year ended 30 September 2007
Cardpoint, the UK's leading independent cash machine deployer with operations in
the UK and Germany, announces preliminary results for the full year ended 30
September 2007.
Operating highlights
* Acquisition and successful integration of 1,000+ ATMs acquired from Travelex
o Current ATM estate of approximately 6,000 machines
* Implemented strategy to increase the quality of the estate
o Removal of loss making machines
* Business refocused on profit rather than revenue growth
o Disposal of non-core businesses
o Closure of loss-making Netherlands business
* Strong pipeline of pending high yield Through-The-Wall ("TTW") installations
* Proposed merger with alphyra offers significant opportunity to grow the
estate
Financial highlights
* Turnover from ongoing ATM business up 3.5% to #87.0m (2006: #84.1m)
* EBITDA* up 9.7% to #21.7m (2006: #19.8m) including #1.2m contribution
from Travelex
* EBITA* increased 6.6% to #14.0m (2006: #13.1m)
* Operating margins increased to 14.3% (2006: 13.3%)
* Profit before tax** down 2.7% to #6.6m (2006: #6.8m) due to increased
depreciation charges, debt costs and share based payments
* Loss per share of 28.88p (2006: (24.35p))
* Adjusted earnings per share** of 5.72p (2006: 6.40p), impacted by higher
number of shares in issue
Bob Thian, Chairman of Cardpoint, said:
"Cardpoint has made good progress during an eventful year of change. The
business has been reshaped to give it a clearer focus and an emphasis on
improving the quality of the estate while reducing operational costs.
The merger with alphyra, to create Payzone plc, will present a number of
additional growth opportunities. Alphyra has a strong presence in the retail
market and the complementary nature of its services presents a significant
opportunity for Cardpoint to deploy additional machines in its core UK and
German markets, as well as offering openings in new European markets."
There will be a conference call for analysts today at 9.00am. For further
information please contact Claire Rowell on 0207 269 7285.
Enquiries:
Cardpoint
Bob Thian, Chairman Today: 0207 831 3113
Philip Lanigan, Finance Director Thereafter: 01253 361 300
Financial Dynamics
David Yates / Ben Brewerton 0207 831 3113
* before goodwill amortisation, charges for share based payments and exceptional
items
** before goodwill amortisation and exceptional items
CHAIRMAN'S REVIEW
I am pleased to report Cardpoint's results for the year ended 30 September 2007,
a period of significant restructuring and repositioning for the business. The
Company disposed of its non-core operations to focus on the business of owning
and operating Automated Teller Machines ("ATM"). The Company also has been
active in the continuing consolidation of the Independent ATM Deployment ("IAD")
market with the #12.9 million acquisition of the ATM business of Travelex UK
Limited and Travelex ATMs Limited in April 2007. On 28 September, we announced
the proposed merger with alphyra Holdings Limited ("alphyra") to create a
leading European consumer payments and cash distribution group. The merger is
expected to complete on 5 December 2007.
Cardpoint performed well in challenging market conditions. In common with other
IADs revenues per ATM were down on prior year. The usage of a charging cash
machine is a convenience purchase, and the tightening UK consumer economic
environment and the poor summer weather reduced transaction volumes.
Revenues from the ATM business for the year were #87.0 million (2006: #84.1
million), up 3.5%, including a #7.9 million contribution from Travelex. EBITDA*
increased 9.7% to #21.7 million (2006: #19.8 million) as the removal of loss
making machines and control over direct costs contributed to an improvement in
the margins earned by the Company. The increased depreciation charges, higher
share based payments and costs of financing the debt resulted in profit before
tax** decreasing by 2.7% to #6.6 million (2006: #6.8 million). Adjusted earnings
per share** decreased to 5.72 pence per share (2006: 6.40 pence per share),
impacted by the increased number of shares in issue.
During the year, Cardpoint has focussed on improving the quality of its estate
both in terms of improving locations to target high retail footfall, as well as
increasing the proportion of Through-The-Wall ("TTW") machines as their 24 hour
availability delivers a significantly higher transaction volume than other types
of cash machine. We now operate cash machines for most of the UK's petrol
station operators, large convenience retailers and leisure industry operators
and are continuing to expand our estate at key transport locations.
The Company has several hundred sites signed up for ATMs. However, the rate at
which these were installed was disappointing in the early part of the financial
year falling short of our expectations. The installation rate has improved over
the past three months and is increasing, but it still takes significantly longer
to install a TTW machine than other types of machine.
The integration of the Travelex estate has progressed well and the business
contributed #1.2 million of EBITDA since its acquisition. We have been
successful in reducing operating costs by transferring a number of services onto
Cardpoint contractual terms. Prior to the acquisition the estate incurred attack
loss costs significantly higher than that experienced by Cardpoint. I am pleased
to report that through a series of security enhancement measures, we are
starting to experience an improved trend in the costs of criminal attack on this
estate.
Our German business units continued to make progress over the past twelve
months. We added an additional 94 machines to our estate over the past twelve
months and now have approximately 900 machines in Germany. All of these machines
are now operational through sponsorship arrangements with GE Money Bank
(Germany) and these arrangements have been re-negotiated and now run until 2013.
Cardpoint continues to operate ATMs on behalf of the Bradford and Bingley bank,
and the Norwich and Peterborough Building Society. The arrangements are long
term and profitable and allow us to develop business models attractive to other
financial institutions.
G2 Integrated Solutions Limited, a company which provides cashless payment and
access control systems, was sold to G4Tech in October 2006 for #3.2 million. In
March 2007, Cardpoint Merchant Services Limited, which provides the service for
mobile phone top ups, was sold to alphyra UK Limited for an initial
consideration of #0.7 million with further consideration contingent on future
sales. A decision was taken in January 2007 to close the loss-making Netherlands
business.
Outlook
The Company has been transitioned over the past year into a focussed ATM
operator seeking to maximise profit rather than revenue from its estate. This
has delivered growth despite the more challenging economic climate and
competitive environment in which we operate. There is a strong pipeline of
retail sites awaiting the installation of a TTW, with growth expected to come
from increasing the size of our high quality estate and the longer installation
cycle for TTWs determining the speed of that growth.
The merger with alphyra, to create Payzone plc, will present a number of
additional growth opportunities. alphyra has a strong presence in the retail
market and the complementary nature of its services presents a significant
opportunity for Cardpoint to deploy additional machines in its core UK and
German markets as well as offering openings in new European markets. There are
also cost synergies in putting the two businesses together.
Finally, I would like to express my thanks to the Cardpoint management team for
their unstinting efforts over the past year.
Bob Thian
Chairman
1 November 2007
* before goodwill amortisation, charges for share based payments and exceptional
items
** before goodwill amortisation and exceptional items
FINANCE DIRECTOR'S REVIEW
Group results
Turnover, excluding businesses discontinued or sold, was up #3.0 million (3.5%)
including turnover of #7.9 million from the ATMs acquired from Travelex. Revenue
from the existing Cardpoint estate was down #5.0 million (5.9%) on the prior
year due to the Group's focus on improving the quality of its estate by removing
a number of poorly performing machines which delivered revenue but contributed
little profit, and the loss of the contract with Esso which ceased in March
2007. The businesses sold or discontinued in the current financial year
contributed #1.5m (2006: #13.8m) to turnover in the financial year.
Operating profit before exceptional items, depreciation, goodwill amortisation
and impairment and charges for share based payments (EBITDA) increased by 9.7%
to #21.7 million with the ATMs acquired from Travelex contributing #1.2 million
to Group EBITDA. Profit before tax, goodwill amortisation, and exceptional items
fell to #6.6 million compared to #6.8 million in 2006 due to the increased
depreciation charges, debt costs and share based payments.
These measures of performance are considered before goodwill amortisation, which
is presently written off over five years. The policy is prudent but the varying
amounts of amortisation have the effect of distorting a like for like comparison
of pre-tax profit in assessing the financial performance of the company.
The results were satisfactory given the tougher trading conditions experienced
over the past year. The Group has worked hard to improve the quality of the
estate and control the direct costs of the business. This has assisted in
improving the margins of the business with operating margins increasing from
13.3% to 14.3%.
A number of organisational changes have been made over the past year to improve
the operational efficiency of the business and ensure that we achieve the cost
benefits from operating an estate of 6,000 machines. These include changes in
management structure, reporting responsibilities and process to better focus our
resource on improving the profitability of the estate. This reorganisation was
instrumental in ensuring the smooth integration of Travelex into the Group. The
Group has grown by acquisition and there remains further scope to rationalise
costs and achieve further cost synergies as long term contracts inherited as
part of the acquired businesses expire over the next two years.
During the year, careful management of our cash requirements has enabled the
Group to improve its direct costs for use of bank notes despite the increase in
bank base rates. In addition, the work undertaken on security measures over the
past two years has continued to benefit the Group with a reduced cost from
criminal attacks on our machines.
After goodwill amortisation and impairment of #33.9 million (2006: #30.4
million), the result for the year was a loss before tax of #31.8 million
compared to a loss of #25.6 million in 2006, the increase being a result of the
exceptional charges (#4.6 million) incurred in the period (2006: #2.0 million).
Interest charges and taxation
Interest charges show a significant increase from #4.9 million to #5.8 million.
The financing costs include the amortisation of debt issue costs of #0.2 million
(2006: #0.1 million). The increase is attributable to the increases in UK
interest rates over the past 18 months and the additional debt taken on to
finance the Travelex acquisition. Group borrowings are at variable interest
rates although 45% of the term loan is covered by interest rate hedging
arrangements.
The tax charge for the year arises in Germany where the increasing profitability
of the business exceeds the value of the tax losses that can be utilised in each
fiscal year. In the UK no tax charge arises for the year and there are in excess
of #40 million of tax losses carried forward which has the benefit that no
significant amounts of UK corporation tax are likely to be paid in the
foreseeable future.
Earnings per share and dividends
Adjusted earnings per share before goodwill amortisation and exceptional items
have decreased from 6.40p last year to 5.72p, a change of 0.68p per share. We
believe this measure of earnings per share is a fairer reflection of the Group's
performance compared to a consideration of basic earnings per share, which is
affected by goodwill amortisation and shows a loss per share of 28.88p compared
to a loss of 24.35p last year. This increase in the loss per share is primarily
due to higher levels of depreciation, goodwill amortisation and financing
charges this year, together with an increase in the number of shares in issue.
As in previous years the Company does not propose to pay a dividend although the
Board will keep this situation under review as the underlying profitability of
the business continues to improve.
Exceptional items
The profit and loss account includes exceptional items of #4.6m of which #3.0m
relates to the costs incurred on the reorganisation and restructuring of the
Group as well as changes to the Board which occurred during the year. Other
exceptional costs include those incurred in relation to unsolicited takeover
approaches and abortive acquisition costs.
The loss on fixed asset disposals arose on the sale of the estate of ATMs sited
on Esso petrol station forecourts. The assets which comprised approximately 140
machines were disposed of in March 2007 following the loss of the contract in a
re-tender exercise in 2006. The loss on the disposal of the Electronic Top Up
business (#0.4 million) and the termination of the Netherlands operation (#1.0
million) is partially offset by the profit on the sale of the G2IS business
(#0.5 million).
Cash flow and capital expenditure
The cash inflow from operating activities for the year was #12.2 million
compared to #12.9 million in the previous year. Capital expenditure was #10.5
million compared to #6.0 million the previous year. The majority of capital
expenditure was on ATM installations in the UK and Germany, with an increasing
proportion being TTWs.
Cash outflows on servicing the Group's debt increased by #1.1 million to #5.9
million. New bank facilities were arranged with Bank of Scotland and Royal Bank
of Scotland at the time of the Travelex acquisition, and #16.7 million was drawn
down to fund the acquisition and repay the debts acquired with the acquisition.
Shareholders' funds and financing
Shareholders' funds have reduced from #53.3 million to #24.9 million as the
amortisation of goodwill more than offsets profits generated by the business.
Group borrowings have increased from #62.8 million to #73.4 million as further
funding was raised to complete the acquisition of the Travelex ATM estate.
The Group's banking facilities with Bank of Scotland and Royal Bank of Scotland
were finalised in April 2007 to fund the acquisition of the Travelex ATM estate
and provide working capital facilities to the enlarged group. The facilities
consist of a medium term loan of up to #85 million which is repayable over 7
years, a #5 million revolving credit facility and an additional loan facility of
#8 million to fund capital expenditure. At 30 September 2007 total facilities
amounted to #96 million of which #83 million was being utilised.
International Financial Reporting Standards
International Financial Reporting Standards ('IFRS') are now mandatory for UK
listed companies and the London Stock Exchange has mandated IFRS for AIM
companies for periods beginning on or after 1 January 2007. The first accounting
period where IFRS would apply to Cardpoint would therefore be the year ended 30
September 2008.
The Company is currently assessing the changes that will be required under IFRS
in order to plan the transition from UK Accounting Standards. This includes a
detailed comparison of the Group's existing accounting policies with IFRS and an
evaluation of the impact on the financial statements in terms of presentation
and reported performance.
Philip Nicholas Lanigan
Finance Director
1 November 2007
Consolidated profit and loss account
for the year ended 30 September 2007
2007
Note Before
goodwill Goodwill
amortisation amortisation
and and
exceptional exceptional
items itmes Total
#000 #000 #000
Turnover
Continuing operations 79,089 - 79,089
Acquisitions 7,938 - 7,938
________ _______ ________
87,027 - 87,027
Discontinued operations 1,498 - 1,498
________ _______ ________
88,525 - 88,525
Cost of sales (56,884) - (56,884)
________ _______ ________
Gross profit 31,641 - 31,641
Administrative expenses
Goodwill amortisation and impairment - (33,868) (33,868)
Exceptional items 2 - (3,171) (3,171)
Share based payments (1,626) - (1,626)
Other (17,628) - (17,628)
________ _______ ________
Total administrative expenses (19,254) (37,039) (56,293)
________ _______ ________
Operating profit/(loss)
Continuing operations 11,940 (35,800) (23,860)
Acquisitions 477 (1,083) (606)
________ _______ ________
12,417 (36,883) (24,466)
Discontinued operations (30) (156) (186)
________ _______ ________
12,387 (37,039) (24,652)
Exceptional item: Loss on disposal
and termination of discontinued
operations 2 - (948) (948)
Exceptional item: Loss on the
disposal of fixed assets
(continuing operations) 2 - (449) (449)
Net interest (5,791) - (5,791)
________ _______ ________
Profit/(loss) on ordinary activities
before taxation 6,596 (38,436) (31,840)
________ _______ ________
Tax on loss on ordinary activities (242)
________
Loss on ordinary activities after
taxation (32,082)
Equity minority interests -
________
Loss for the financial year
transferred to reserves 6 (32,082)
________
Loss per ordinary share
Basic and fully diluted 3 (28.88)p
_________
Basic and fully diluted continuing
operations 3 (27.86)p
_________
(continued from table above)
2006
Restated
Note Before Goodwill Total
goodwill amortisation
amortisation and
and exceptional
exceptional items
items
#000 #000 #000
Turnover
Continuing operations 84,070 - 84,070
Acquisitions - - -
________ _______ ________
84,070 - 84,070
Discontinued operations 13,801 - 13,801
________ _______ ________
97,871 - 97,871
Cost of sales (67,401) - (67,401)
________ _______ ________
Gross profit 30,470 - 30,470
Administrative expenses
Goodwill amortisation and impairment - (30,378) (30,378)
Exceptional items 2 - (1,961) (1,961)
Share based payments (1,492) - (1,492)
Other (17,327) - (17,327)
________ _______ ________
Total administrative expenses (18,819) (32,339) (51,158)
________ _______ ________
Operating profit/(loss)
Continuing operations 11,202 (31,821) (20,619)
Acquisitions - - -
________ _______ ________
11,202 (31,821) (20,619)
Discontinued operations 449 (518) (69)
________ _______ ________
11,651 (32,339) (20,688)
Exceptional item: Loss on disposal
and termination of discontinued
operations 2 - - -
Exceptional item: Loss on the
disposal of fixed assets
(continuing operations) 2 - - -
Net interest (4,875) - (4,875)
________ _______ ________
Profit/(loss) on ordinary activities
before taxation 6,776 (32,339) (25,563)
________ _______ ________
Tax on loss on ordinary activities -
________
Loss on ordinary activities after
taxation (25,563)
Equity minority interests (46)
________
Loss for the financial year
transferred to reserves 6 (25,609)
________
Loss per ordinary share
Basic and fully diluted 3 (24.35)p
________
Basic and fully diluted continuing
operations 3 (24.21)p
________
Statement of total recognised gains and losses
for the year ended 30 September 2007
Restated
2007 2006
#000 #000
Loss for the financial year (32,082) (25,609)
Currency differences on foreign currency
net investments 289 (26)
________ ________
Total recognised gains and losses for the
year (31,793) (25,635)
________ ________
Consolidated balance sheet
at 30 September 2007
Note 2007 2006
#000 #000
Fixed assets
Intangible assets 78,499 101,025
Tangible assets 37,181 30,352
________ ________
115,680 131,377
________ ________
Current assets
Stocks 455 1,471
Debtors 5,455 8,967
Cash at bank and in hand 8,676 8,044
________ ________
14,586 18,482
Creditors: amounts falling due within
one year (26,662) (33,386)
________ ________
Net current liabilities (12,076) (14,904)
________ ________
Total assets less current liabilities 103,604 116,473
Creditors: amounts falling due after
more than one year (76,552) (63,199)
Provisions for liabilities (2,136) -
________ ________
Net assets 24,916 53,274
________ ________
Capital and reserves
Called up share capital 5,620 5,274
Share premium account 89,842 88,379
Merger reserve 354 354
Profit and loss account (71,005) (40,838)
________ ________
Shareholders' funds 6 24,811 53,169
Minority interests 105 105
________ ________
24,916 53,274
________ ________
Consolidated cash flow statement
for the year ended 30 September 2007
Note 2007 2006
#000 #000
Net cash inflow from operating activities 7 12,156 12,881
________ ________
Return on investments and servicing of finance
Interest received 268 160
Interest payable (6,167) (4,938)
________ ________
Net cash outflow from returns on investments and
servicing of finance (5,899) (4,778)
________ ________
Taxation received - 4
________ ________
Capital expenditure and financial investment
Purchase of tangible fixed assets (10,513) (5,966)
Proceeds from disposal of tangible fixed assets 841 93
________ ________
Net cash outflow from capital expenditure and
financial investment (9,672) (5,873)
________ ________
Acquisitions and disposals
Purchase of acquired businesses 4 (4,654) -
Net cash acquired with subsidiaries 4 3,004 -
Proceeds from sale of businesses 5 3,827 -
Net cash disposed of with subsidiaries 5 (581) -
Payments in relation to closure of business (478) -
Payments in relation to businesses acquired in prior
periods, including costs - (6,034)
________ ________
Net cash inflow/(outflow) from acquisitions and
disposals 1,118 (6,034)
________ ________
Net cash outflow before financing (2,297) (3,800)
________ ________
Financing
Issue of share capital, including payment of share
issue expenses 1,809 (860)
Receipts from borrowings 16,696 4,241
Repayment of borrowings (16,303) (202)
________ ________
Net cash inflow from financing 2,202 3,179
________ ________
Decrease in cash in the year 8 (95) (621)
________ ________
1. Basis of preparation and financial information
The financial information in this preliminary announcement has been prepared in
accordance with the accounting policies set out in the financial statements of
Cardpoint plc for the year ended 30 September 2006 which have remained unchanged
for the financial year ended 30 September 2007 with the exception of the
implementation of FRS20, "Share Based Payments", which has resulted in a prior
period adjustment to the comparative figures in the profit and loss account. The
financial information in this document does not constitute the Company's
statutory accounts for the year ended 30 September 2007 or 2006, but is derived
from those accounts. Statutory accounts for 2006 have been delivered to the
Registrar of Companies and those for 2007 will be delivered following the
company's Annual General Meeting. The auditors have reported on these accounts
and their reports were unqualified and did not contain statements under sections
237(2) or (3) of the Companies Act 1985.
2. Exceptional items
2007 2006
#000 #000
Operating exceptional items
Reorganisation and restructuring costs (i) 3,045 1,542
Costs in relation to unsolicited takeover approaches and
abortive acquisition costs 126 41
Other exceptional costs (ii) - 378
________ ________
3,171 1,961
Non-operating exceptional items
Profit on disposal of G2 Integrated Solutions Limited (see
note 5) (462) -
Loss on disposal of Cardpoint Merchant Services Limited (see
note 5) 431 -
Loss on disposal of fixed assets 449 -
Loss on termination of the Netherlands business 979 -
________ ________
1,397 -
________ ________
Total exceptional costs 4,568 1,961
________ ________
(i) Reorganisation and restructuring costs relate to the reorganisation of the
Group and integration of current and prior year acquisitions into the enlarged
Group's ATM estate.
(ii) Other exceptional costs in the prior year include #293,000 relating to
insurance claims for cash losses from ATMs operated by the Group where valid
insurance cover was in place, but the underwriter refused to honour the claims
in line with the policy conditions. The Group is taking legal action to recover
the outstanding monies from its insurance broker and has been advised there is a
strong case in favour of the Group. This category also includes #85,000 in
respect of losses incurred in Germany following the business failure of a cash
in transit supplier.
3. (Loss)/earnings per ordinary share
Basic loss per ordinary share and adjusted earnings per ordinary share (before
exceptional items and amortisation of goodwill) are calculated below. Adjusted
earnings per share are shown by reference to earnings before goodwill
amortisation and exceptional items, since the directors consider that this gives
a more meaningful measure of the underlying performance of the Group.
2007
(Loss)/ Weighted (Loss)/
profit average earnings
ordinary per
shares in ordinary
issue share
#000 '000 Pence
Basic loss per share (32,082) 111,074 (28.88)
Goodwill amortisation and impairment 33,868 - 30.49
Exceptional items 4,568 - 4.11
Adjusted earnings per share 6,354 - 5.72
______ ______ ______
(continued from table above)
2006
Restated
(Loss)/ Weighted (Loss)/
profit average earnings
ordinary per
shares in ordinary
issue share
#000 '000 pence
Basic loss per share (25,609) 105,181 (24.35)
Goodwill amortisation and impairment 30,378 - 28.89
Exceptional items 1,961 - 1.86
Adjusted earnings per share 6,730 - 6.40
______ ______ ______
The basic loss per share can be analysed into that derived from continuing and
discontinued operations as set out below. For the purposes of this analysis,
results from acquired operations are included within continuing operations:
2007
Loss Weighted Loss per
average ordinary
ordinary share
shares in
issue
#000 '000 Pence
Basic loss per share
- continuing operations (30,948) 111,074 (27.86)
- discontinued operations (1,134) - (1.02)
(32,082) - (28.88)
______ ______ ______
(continued from above)
2006
Restated
Loss Weighted Loss per
average ordinary
ordinary share
shares in
issue
#000 '000 Pence
Basic loss per share
- continuing operations (25,467) 105,181 (24.21)
- discontinued operations (142) - (0.14)
______ ______ ______
(25,609) - (24.35)
______ ______ ______
The share options are anti-dilutive in respect of the basic earnings per share
calculation. A diluted adjusted earnings per share has been calculated as
follows.
2007
Profit Weighted Earnings
average per
ordinary ordinary
shares in share
issue
#000 '000 Pence
Adjusted earnings per share 6,354 111,074 5.72
Dilutive effect of share options - 3,126 (0.16)
Diluted adjusted earnings per share 6,354 114,200 5.56
______ ______ ______
(continued from table above)
2006
Restated
Profit Weighted Earnings
average per
ordinary ordinary
shares in share
issue
#000 '000 Pence
Adjusted earnings per share 6,730 105,181 6.40
Dilutive effect of share options - 4,294 (0.25)
Diluted adjusted earnings per share 6,730 109,475 6.15
______ ______ ______
4. Acquisitions
On 16 April 2007, the Group acquired the entire issued share capital of Travelex
UK ATMs Limited and the ATM business and assets of Travelex UK Limited (together
"Travelex ATMs") for a total cash consideration of #3,023,000.
The acquisition has been accounted for using the acquisition method of
accounting and goodwill arising has been capitalised and will be amortised over
a period of 5 years. The book values of identifiable assets and liabilities and
their provisional fair value to the Group are shown in the table below:
Book value Adjustment Provisional
fair value
#000 #000 #000
Tangible fixed assets 11,457 (4,315) 7,142
Stocks 1,909 (1,860) 49
Debtors 554 - 554
Cash at bank and in hand 3,004 - 3,004
Loans and overdrafts (9,968) - (9,968)
Creditors (4,773) (470) (5,243)
Provisions - (2,724) (2,724)
________ ________ ________
2,183 (9,369) (7,186)
________ ________
Purchased goodwill capitalised 11,840
Acquisition costs (1,631)
________
3,023
________
Satisfied by:
Cash consideration 3,023
________
The fair value adjustments processed in these financial statements are
significant in relation to the net assets of Travelex ATMs. Whilst the directors
have taken all possible actions and made all necessary enquiries to establish
that the adjustments are fair and reasonable, there is an inherent level of
uncertainty in making the judgments necessary to assess these values at the time
of preparing the financial statements. Accordingly the fair value adjustments
made at 30 September 2007 are provisional and if necessary will be amended in
the next financial statements with a corresponding adjustment to goodwill.
The provisional fair value adjustments made in respect of the acquisition can be
summarised as follows:
#000
Write-down of ATMs following impairment review 4,315
Write-down of stocks to estimated realisable value 1,860
Provision for onerous contract losses 2,724
Provision for unrecorded liabilities 470
_________
9,369
_________
5. Disposals
During the year the Group disposed of its interest in G2 Integrated Solutions
Limited.
#000
Net assets disposed of:
Tangible fixed assets 756
Stocks 932
Debtors 2,618
Cash at bank and in hand 581
Creditors (2,397)
_________
2,490
Profit on disposal 462
_________
2,952
_________
Satisfied by:
Cash consideration 2,952
_________
During the year the Group also disposed of its interest in Cardpoint Merchant
Services Limited.
#000
Net assets disposed of:
Fixed assets 63
Debtors 745
Goodwill 498
_________
1,306
Loss on disposal (431)
_________
875
_________
Satisfied by:
Cash consideration 875
_________
The Group received an initial consideration of #720,000 and has received further
contingent payments of #212,000 up to 30 September 2007. The costs of the
disposal amounted to #57,000. The maximum total consideration payable is
#1,420,000.
6. Reconciliation of movements in shareholders' funds
2007 2006
#000 #000
Retained loss for the financial year (32,082) (25,609)
Credit for equity settled share based
payments 1,626 1,427
Foreign currency differences 289 (26)
Issue of share capital (net of expenses) 1,809 243
_________ _________
(28,358) (23,965)
Opening shareholders' funds 53,169 77,134
_________ _________
Closing shareholders' funds 24,811 53,169
_________ _________
7. Reconciliation of operating loss to net cash inflow from operating activities
2007 2006
#000 #000
Operating loss (24,652) (20,688)
Depreciation 7,668 6,626
Loss on disposal of fixed assets 276 211
Amortisation and impairment of goodwill 33,868 30,378
Equity settled share based payments 1,626 1,492
Increase in stocks (54) (463)
Decrease in debtors 1,348 1,598
Decrease in creditors (7,336) (6,273)
Decrease in provisions for liabilities (588) -
_________ _________
Net cash inflow from operating activities 12,156 12,881
_________ _________
8. Reconciliation of net cash flow to movement in net debt
2007 2006
#000 #000
Decrease in cash in the year (95) (621)
Receipts from borrowings (16,696) (4,241)
Repayment of borrowings 16,303 202
_________ _________
Movement in net debt arising from cash
flows (488) (4,660)
Loans acquired with subsidiary
undertaking (9,968) -
Other non-cash movements (210) (97)
_________ _________
Movement in net debt (10,666) (4,757)
Opening net debt (62,778) (58,021)
_________ _________
Closing net debt (73,444) (62,778)
_________ _________
9. Reconciliation between non-statutory and statutory financial information
2007 2006
#000 #000
EBITDA 21,681 19,769
Depreciation (7,668) (6,626)
Goodwill amortisation and impairment (33,868) (30,378)
Exceptional items (4,568) (1,961)
Charge for share based payments (1,626) (1,492)
Net interest (5,791) (4,875)
_________ _________
Loss on ordinary activities before taxation (31,840) (25,563)
_________ _________
Profit before tax, goodwill amortisation,
exceptional items and share based payments 8,222 8,268
_________ _________
10. Merger with alphyra Holdings Limited
On 28 September 2007, the Board announced that they had agreed the terms of a
merger of Cardpoint with alphyra Holdings Limited ("alphyra") to create a
leading European consumer payments and cash distribution group. The parent
company of the enlarged Group will be a newly incorporated company named Payzone
plc ("Payzone") and will be headquartered and domiciled in Ireland.
The merger is conditional upon the passing of the appropriate resolutions of
Cardpoint shareholders at the Extraordinary General Meeting on 12 November 2007
and Scheme Meeting on 12 November 2007. Irrevocable undertakings to vote in
favour of the resolutions have been received from shareholders in respect of
53.75% of the existing issued share capital. The acquisition of Cardpoint will
be effected by means of a scheme of arrangement between Cardpoint and the
Cardpoint shareholders under section 425 of the Companies Act 1985. In addition
to shareholder approval noted above the scheme requires the approval of the
Court. The other conditions to the merger have been set out in the documents
issued to shareholders and are available on the company's website
www.cardpointplc.com.
On 28 September, Cardpoint, Payzone and alphyra entered into a framework
agreement which governs the parties' respective obligations in relation to the
implementation of the merger and co-operation between the parties to effect the
merger.
At 30 September, the Company had incurred fees and expenses associated with the
merger and creation of Payzone of approximately #3.2 million. These costs have
not been included as a liability at 30 September as they will be recharged to
Payzone on completion of the transaction, and have therefore been treated as a
contingent liability in the accounts. Under the terms of the framework agreement
a break fee of #1.0 million is payable by Cardpoint under certain circumstances.
The framework agreement includes for the payment to Cardpoint of #3.5 million by
way of break fee in the event that alphyra breach their obligations and as a
direct result of the breach the merger does not complete by 31 January 2008.
11. Copies of the preliminary announcement are available from the Company's
registered office at Transaction House, Amy Johnson Way, Blackpool, Lancashire,
United Kingdom FY4 3RS. The Annual Report and Accounts for the year ended 30
September 2007 are expected to be posted to shareholders on or about 12 December
2007.
- Ends -
END
This information is provided by RNS
The company news service from the London Stock Exchange
END
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