TIDMSJH
RNS Number : 9748E
St James House PLC
09 July 2019
Dissemination of a Regulatory Announcement that contains inside
information according to REGULATION (EU) No 596/2014 (MAR).
St James House plc
Final Results and Audited Annual Report and Accounts for the
Year to 31 January 2019
& Trading Update
("SJH" the "Group" or the "Company")
9 July 2019
Final Results
The Board of Directors of SJH is pleased to announce the
publication of the audited annual report and accounts for the year
to 31 January 2019 (the "Annual Report").
The Annual Report will be published on the Company's website in
compliance with its articles of association and the electronic
communications provisions of the Companies Act 2006. A copy of the
Annual Report can also be accessed through the link below.
Annual Report
http://www.rns-pdf.londonstockexchange.com/rns/9748E_1-2019-7-9.pdf
Key extracts from the Annual Report can also be viewed
below.
Graeme Paton, the Group CEO commented, "The period covered by
these accounts was a difficult and challenging one for all of us
working in the Group, as well as for our shareholders. Since the
new year, we believe we have made solid progress, and approach the
second half of the year with optimism and confidence."
Trading Update
The Board is delighted to announce that Market Access Ltd,
through its "Another" B2C brand, has signed a contract to deliver a
pre-paid card programme with an innovative technology partner based
in the UK.
The card programme is for an initial 100,000 prepaid cards, with
5,000 cards due immediately. It is expected that 25,000 cards will
be activated within two months of launch and 100,000 within the
first nine months. Each card is expected to produce revenues to the
Group of between GBP3 and GBP5 per month.
Since the last trading update announced on 29 May 2019, the
Group has continued to make solid progress in its primary business
areas.
Within the Payment division, the two key areas of focus have
been the integration of Another (please refer to the announcement
of 5 July 2019 for further details) and the roll-out of the
much-improved payment card processing service to our clients,
including over a dozen new clients expected to be actively
transacting business by the end of July through the integration of
the "Another-Pay" gateway . This is now generating material levels
of card processing commissions for the Group after a trial and
integration period with several key clients.
The Lottery division has seen continued progress with the
Unite2Win lottery on behalf of the Unite the Union Benevolent Fund,
resulting in total lines played increasing by approximately
one-third during the last year. These increased levels of growth,
if maintained, will see the Lottery division making a positive
contribution to the Group during the second half of the year.
Lord Razzall, Chairman, commented, "Our new client is an
exciting and novel business with strong ecological values and a
sound offer, for whom prepaid cards are expected to play a
significant role in their success. Our recent acquisition of
"Another", combined with the existing Market Access infrastructure,
has meant we are able to immediately service their requirements.
The increase in payment card processing business, both from
existing Market Access efforts and through the acquisition of
Another are encouraging for the second half of the year."
For further information, contact:
St. James House PLC
Lord Razzall, Chairman
Website www.sjhplc.com 020 7493 9644
Allenby Capital Limited
(Nomad, Financial Adviser & Broker)
John Depasquale / Nick Harriss 020 3328 5656
Strategic report
Operating and Financial Review for the year ending 31 January
2019
The principal activities of St James House plc (formerly Boxhill
Technologies plc) are that of lottery administrators and the
provision of payment processing products and services.
Prize Provision Services Limited ('PPSL') is licensed by the UK
Gambling Commission as an External Lottery Manager ('ELM') to
provide administration services to societies. It administers all
aspects such as lottery draws, prizes, player accounts, financial
and data administration required by law to run a lottery.
During the year to 31 January 2019, a number of organisational
and structural changes were made to the business in order to
deliver future revenue growth:
Launch of Market Access
During 2018, St James House PLC established Market Access
Limited ('Market Access') as a wholly owned subsidiary to operate a
foreign exchange ("FX") and treasury services business and provide
payment processing to low risk clients, with the intention of
generating a more stable growth pattern than had been seen with
Emex's traditional customer base (referred to as Non-Conforming
Customers). Additionally, the management is based in London and
benefits from the additional direct support the Board and the team
based there can offer.
Sale of Emex
On 30 July 2018, the Group separated the provision of payment
services to Non-Conforming Customers from the rest of the Group
through the sale of Emex (UK) Group Limited, Emexconsult Limited
and Emex Technologies Limited (collectively "Emex") to MDC Nominees
Limited. This included the disposal of all assets and liabilities
that formed part of the Payment Processing operating segment as at
and for the year ended 31 January 2018 (the "Transaction"). The
consideration for Emex was GBP2,000,000, satisfied through the
issue by MDC Nominees Limited of a Loan Note, which has the
following key terms:
-- Amount - GBP2,000,000
-- Term - 10 years
-- Interest rate - 0 per cent
-- Security - A debenture over the issued share capital of Emex
Technologies Limited, Emexconsult Ltd, Net World Limited and Emex
(UK) Group Limited
-- Repayment - by way of the establishment of a sinking fund
into which the net revenues of Emex resulting from the customers
left in place at the time of the transaction or any new
Non-Conforming Customers referred by Market Access shall be
transferred on a monthly basis and used for general working capital
purposes and any balance outstanding at the end of 10 years, after
the above sinking fund has been extinguished, by MDC Nominees
Limited.
As part of the Transaction, whilst Non-Conforming Customers of
Emex remained with the Emex Group, Conforming customers were given
the opportunity from October 2018 to engage with Market Access
Limited as part of the transaction, clear of any liabilities. In
consideration of this arrangement for the Conforming Customers, St
James House plc agreed to issue 100,000,000 Shares
(pre-consolidation) to MDC Nominees Limited.
Under the terms of the Transaction, Market Access continues to
have an ongoing commercial relationship with MDC Nominees Limited,
with Market Access referring any new Non-Conforming Customers to
MDC Nominees Limited and Market Access providing certain ongoing
support services. Once the Loan Note is fully repaid, Market Access
will receive a commission of 50 per cent of the net revenues
resulting from the Non-Conforming Customers both in place at the
time of the Transaction and those subsequently referred to MDC
Nominees Ltd by Market Access.
These businesses were in a significant net liabilities position
which had arisen from the working capital shortfall between cash
balances and client fund liabilities in EmexGo. Therefore, their
disposal helps to establish a better balance sheet position for the
continuing Group. Subsequent to the disposal, Emex Technologies
Limited has entered into Administration. The Directors, having
taken external legal advice, are satisfied that the Group has no
further obligations or liabilities related to this matter.
MDC Nominees Limited is owned by John Botros, a director of
certain Group subsidiaries and a substantial shareholder (as
defined by the AIM Rules) of St James House plc. The Transaction
therefore constituted a related party transaction under the AIM
Rules.
Whilst, the loan note of GBP2,000,000 was issued with 0%
interest, the value of the investment is reflected in the Balance
sheet as at 31 January 2019 at a value of GBP1,722,000 (2018:
GBPnil), reflecting a 2.5% discount rate over the expected
repayment period. Interest income relating to the investment of
GBP22,000 was included in the loss before tax for the year ending
31 January 2019 (2018: GBPnil)
Issue of Equity
On 23 April 2018 (admitted to trade on AIM with effect from 30
April 2018), new shares totalling 410,000,000 Ordinary Shares
(pre-consolidation) of 0.1 pence each ('Ordinary Shares') were
issued in settlement of amounts invoiced:
1. 140,000,000 Ordinary Shares for consultancy fees totalling
GBP140,000 from Moorhen Limited, a company controlled by Phil
Jackson, in relation to his contracted ongoing role within the
payment services division of the Group.
2. 10,000,000 Ordinary Shares for consultancy fees totalling
GBP10,000 from FS Business Limited, a company controlled by Andrew
Flitcroft, in relation to his contracted services as Finance
Director and company secretary of the Group.
3. The Board agreed contractual terms with John Botros trading
as St. James Street Chambers in relation to the legal work involved
in the integration of Timegrand Limited with the newly established
Market Access in February 2018 and post-acquisition dealings with
the Gambling Commission for a total consideration of
GBP100,000.
4. The Board agreed contractual terms with Bluedale Corporate
Limited ('Bluedale') in relation to the corporate finance work
involved in the establishment of Market Access Limited (announced
on 28 March 2018) and post-establishment activities for a total
consideration of GBP160,000. Bluedale is a company controlled by
John Botros.
Also, on 23 April 2018, 20,000,000 share options were granted to
each of Clive Hyman, Arno Rudolf and Cath McCormick at an exercise
price of 0.1 pence per share and a life of 5 years.
In addition, on 9 May 2018 (admitted to trade on AIM with effect
from 14 May 2018), new shares totalling 50,000,000 Ordinary Shares
of 0.1 pence each were issued in settlement of invoices for
consultancy fees totalling GBP50,000 from Nineteen Twelve
Management Limited, a company controlled by James Rose.
Suspension of Shares
On 1 August 2018 trading in the Company's Ordinary Shares were
suspended on AIM. This was as a result of the Company being unable
to finalise the annual report and consolidated accounts for the
year to 31 January 2018. As stated in the announcement to the
market on 1 August 2018, certain outstanding information from one
of the Company's banks remained outstanding along with the final
risk review relating to the high value transfer service ("HVTS")
announced on 28 July 2017. Whilst the final risk review for the
HVTS was resolved in early September 2018 (and announced to the
Market on 17 September 2018), the obtaining of the necessary
information related to a bank account in the name of Networld Ltd
proved much harder than originally expected. Following the
dismissal of a former subsidiary director (the "FSD"), a change to
the bank account mandate for this bank account (where the FSD was
the sole authorised signatory) was not possible.
These issues also delayed the introduction of payment processing
services by Market Access and the receipt of amounts from MDC
Nominees Limited.
Following the publication of the accounts for the year ended 31
January 2018, along with those for the six months to 31 July 2018,
the suspension of share trading was lifted and trading in the
Company's Ordinary Shares resumed on AIM on 30 January 2019.
Change in Head Office
In order to deliver improved centralised and fewer regional
controls the company opened operational offices in London and
senior staff based in UK now have direct operational and financial
responsibility for overseas operations, ensuring changes in focus
are reflected quickly and directly in our domestic and overseas
activities and continue to support our clients as changes in
regulations and technology mean that we must remain agile and open
to change as the market develops in a post Brexit world.
Change in Senior Management/Board
With effect from 30 January 2019, Graeme Paton and Cath
McCormick were appointment to the Board of St James House PLC as
Chief Executive Officer and Finance Director respectively.
Lottery Product Offerings
In April 2018, Prize Provision Services Ltd (PPSL) entered into
an agreement with Unite, one of the UK's largest membership
organisations. The size of the deal generates an opportunity to
significantly increase the size of the lottery business on its own.
PPSL provides lottery administration, marketing and promotional
services along with a standalone website operated under a bespoke
brand. The minimum viable product launched on December 1(st) , 2018
and the first players entered into draws in January 2019.
In addition, a scratch-card product has recently been launched
which will be available to all lottery clients. The product offers
further choice and flexibility to all clients to be able to produce
a product which both immediately appeals to their supporters while
giving a good profit margin.
Expected to retail at GBP1 with a GBP1,000 top prize, the
scratch-cards are expected to best benefit those societies who
regularly meet face to face with supporters in any environment and
offer an impulse purchase which a subscription lottery does
not.
In addition, there is a strong pipeline of new Weather Lottery
and Sports Club Lottery charities and societies.
Financial key performance indicators ("KPI's")
KPIs provide an illustration of management's ability to
successfully deliver against the Group's strategic objectives. The
Board periodically reviews the KPIs of the Group taking into
account the strategic objectives and the challenges facing
implementation of such. The measures reflect the Group's
development focused strategy, the importance of a positive cash
position and our underlying commitment to ensuring safe operations.
These KPI's can be categorised into operational and financial.
These include, but are not limited to:
-- Revenue
-- Gross profit
-- EBITDA
-- Profit before taxation
The Group Board review these indicators at least once a month.
Explanations are sought and given for any material variances and
the management are required to provide plans to resolve any
performance failures as they occur during the year.
As the business grows and increases its expenditure on
internally generated and externally purchased tangible and
intangible assets, resulting in increased depreciation and
amortisation, the business has moved to measuring performance using
EBITDA as it provides a better measurement of underlying
operational performance.
EBITDA is defined as profit before tax, net finance costs,
depreciation and amortisation.
Financial Summary
For the full year to 31 January 2019 the Group recorded total
comprehensive income of GBP398,000 compared to a loss of
GBP1,809,000 for the ended 31 January 2018 and an EBITDA loss of
GBP2,176,000 compared to an EBITDA loss of GBP1,628,000 for the
year ended 31 January 2018.
In summary, for the year to 31 January 2019 the Group
performance was as follows:
Revenue : GBP938,000 (2018: GBP458,000)
Gross Profit : GBP686,000 (2018: GBP215,000)
EBITDA : Loss of GBP2,285,000 (2018 : Loss of GBP604,808)
Depreciation & Amortisation : GBP498,000 (2018 :
GBP116,000)
(Loss)/profit before tax : Loss of GBP2,755,000 (2018: Loss of GBP721,000)
The above figures exclude the gain on the sale of the Emex group
of companies of GBP3,505,000, as detailed in note 8.
Including both activity from discontinued operations and the
profit on sale of the Emex group, results in a total comprehensive
income of GBP398,000 (2018: loss of GBP1,809,000).
As can be seen in note 2, the overall loss after tax comprised a
loss of GBP56,000 (2018: Loss of GBP16,000) in the Lottery business
and a loss of GBP979,000 (2018: Loss of GBP1,147,000) in the
Payment processing businesses, further reduced by unallocated
central costs of GBP1,622,000 (2018: GBP588,000).
Depreciation and Amortisation in the year to 31 January 2019 was
GBP498,000 (2018: GBP122,000), with the increase compared to the
previous year relating to an amortisation catch-up resulting from a
change in the useful life of the Timegrand software from 10 to 5
years.
Performance in the payments processing business in the year to
31 January 2019 was impacted by the corporate changes undertaken by
the Group as it realigned itself and began to build a presence in a
more competitive market.
Payments processing income during the year to 31 January 2019
was GBP575,000 (2018: GBP909,000), with the reduction resulting
from the time taken to develop the products, services and
infrastructure required to deliver a full suite of financial
products through Market Access Limited. In addition, the Board,
upon a review of the underlying performance of Emex, found that
prior to its sale, the team in Malta had failed to deliver either
the growth in revenues or the cost savings required to ensure that
the Company operated at an acceptably profitable level. The
anticipated returns on investments in people, travel and expenses
were not delivered.
Following the previous year's consolidatory work, PPSL
implemented its growth strategy for the business. In addition to
the continued development of client services, 2018 saw the launch
of the Sports Club Lottery, designed to support sporting societies
raise money through their own lottery.
As a result, the trend of reducing revenue experienced in the
Lottery segment for several years was halted in Autumn 2017, and
through the year to 31 January 2019 small month-on-month revenue
growth was experienced, with that trend continuing through the
first quarter of 2019.
Lottery administration expenses in the year to 31 January 2019
were GBP38,000 higher compared to the prior year as a result of
increased marketing and staff costs associated with the set up and
launch of the SCL.
Unallocated central costs, largely borne by the parent company,
were GBP1,034,000 higher in the year to 31 January 2019 compared to
the year to 31 January 2018, largely as a result of legal fees
associated with the changes in corporate structure, which were
settled in shares and the costs associated with the process
undertaken by the business in order to return to the AIM market
following its suspension on 1 August 2018.
During the year to 31 January 2018 trade and other receivables
reduced by GBP1,776,000, largely driven by the sale of the Emex
businesses to MDC Nominees Limited on 30 July 2018, in particular,
the high value transaction service with Phillite D UK Limited as
announced to the market in November 2017 was included as part of
the sale.
In addition, the client balances within other payables (as can
be seen in note 20) decreased by GBP5,477,000 reflecting the
liabilities sold to MDC Nominees Limited of the Emex companies.
Together these were the major drivers of the decrease in bank
and cash balances as at 31 January 2019 to GBP371,000 (2018:
GBP2,151,000), offset by cash absorbed in the operating
activities.
Post Balance Sheet events
Change in Senior Management/Board
With effect from 1 February 2019, Andrew Flitcroft stepped down
from the Board of St James House plc, but continues in the role of
Company Secretary for the Group.
In addition, having overseen the reorganisation of the business,
including the sale of Emex to MDC Nominees Ltd, Clive Hyman
(Non-Executive Director) and Tim Razzall (Executive Chairman) will
not be seeking re-election at the Annual General Meeting for the
year to 31 January 2019, which is to be held on 31 July 2019. Lord
Razzall became chairman of the Company in 2010. In accordance with
corporate governance best practice, he is standing down from the
board after nine years in the chair. The Company is in the final
stages of recruiting a Non-Executive Chairman and a Senior
Independent Non-Executive Director with the successful candidates
announced once the recruitment process is complete.
Issuing of shares
On 21 February 2019, new shares totalling 200,000,230 Ordinary
Shares of 0.1 pence each ("Ordinary Shares") were issued in
settlement of amounts owed:
1. 30,000,000 Ordinary Shares at a price of 0.1 pence per share
in settlement of invoices for director and consultancy fees
totalling GBP30,000 from RT Associates, a partnership controlled by
Lord Tim Razzall, a director of the Company, in relation to his
contracted services as Executive Chairman of the Company.
2. 20,000,000 Ordinary Shares at a price of 0.1 pence per share
in settlement of invoices for consultancy fees totalling GBP20,000
from FS Business Limited, a company controlled by Andrew Flitcroft,
the company secretary and a former director of the Company, in
relation to his contracted services as Finance Director and company
secretary of the Company.
3. 50,000,000 Ordinary Shares at a price of 0.1 pence per share
in settlement of salaried amounts outstanding totalling GBP50,000
for Cath McCormick, a director of the Company, in relation to her
contracted employment with the Company.
4. The Board agreed contractual terms with John Botros t/a St.
James Street Chambers in relation to the legal work involved in the
issues surrounding Net World Ltd and its impact on the delayed
audit of the Company (as announced on 30 January 2019) for a total
consideration of GBP100,000.23 (the "Legal Services"). The Board
and Mr Botros agreed to the issue of 100,000,230 Ordinary Shares at
a price of 0.1 pence per share in settlement of the invoice for the
Legal Services. John Botros is a director of a Group company.
At a general meeting held on 30 July 2018, Shareholders approved
the sale of Emex. As part of the terms of the Disposal, shares were
to be issued to MDC, but due to the suspension, these were not
issued at the time of the Disposal. The Board approved the issue
and allotment of the shares to MDC (as published 30 January 2019)
and an application was made to admit those shares to trading on AIM
with effect from 21 February 2019.
Purchase of Shares by PDMR
Since 1 February 2019, a number of shares have been purchased by
Persons Discharging Managerial Responsibility ("PDMR") under the
Market Abuse Regulations:
1. On 4 February 2019, Phil Jackson purchased 29,577,728
Ordinary Shares at a price of 0.0623p and a further 2,739,726 at a
price of 0.0732p
2. On 19 March 2019 (and after the Share Consolidation discussed
below), James Rose purchased 12,265 Ordinary Shares at a price of
GBP0.40
Share Consolidation
The Board considered that having nearly three billion shares
issued created a negative perception of the Company and also
exposes Shareholders to undue volatility. Following discussion with
the Company's financial adviser, the Board proposed a share
restructuring, which was approved by the Board on 4 March 2019.
The share capital restructuring consisted of a sub-division of
each Ordinary Share followed by a consolidation at a ratio of
1:1,000.
Each Ordinary Share of the Company was sub-divided into one new
ordinary share of 0.001 pence each ("Interim Ordinary Shares") and
one deferred share of 0.099 pence each ("Deferred Shares"),
followed by a consolidation of every 1,000 Interim Ordinary Shares
into one consolidated new ordinary share of 1 pence each ("New
Ordinary Shares"). Therefore, the existing 3,115,830,000 Ordinary
Shares became 3,115,830 New Ordinary Shares and 3,115,830,000
Deferred Shares (the "Restructuring"). Fractional entitlements
arising from the Restructuring were aggregated and sold in the
market for the benefit of the Company. Following the Restructuring,
there were 3,115,830 New Ordinary Shares in issue, each with one
voting right per share.
The Deferred Shares have no right to vote, attend or speak at
general meetings of the Company and have no right to receive any
dividend or other distribution and have only limited rights to
participate in any return of capital on a winding-up or liquidation
of the Company. No application will be made to the London Stock
Exchange for admission of the Deferred Shares to trading on AIM.
There will be 3,115,830,000 immediately following the
Restructuring.
The outstanding options over 60,000,000 Ordinary Shares
exercisable at 0.1 pence per Ordinary Share (as announced 24 April
2018), all held by Board members, will be adjusted for the
Restructuring to become options over 60,000 New Ordinary Shares,
exercisable at 100 pence per share. The life of the options remains
unchanged at 5 years from 23 April 2018.
Change of Company Name
To reflect the change in ongoing strategy of the Group and the
significant changes that have occurred during the last year, the
Board believed that a change of the Company's name was appropriate.
Following GM approval, Boxhill Technologies plc changed its name to
St James House plc on 4 March 2019.
Acquisition of Another Ops Ltd
On 23 May 2019, St James House plc completed the acquisition of
Another Ops Limited, trading as "another", whose website is
https://an-other.co.uk/ ("Another"). Another Ops Limited offer
prepaid payment card and merchant solutions which provide a
complementary product to the merchant, international payment and
foreign exchange services provided by the Company's Market Access
division.
The acquisition was for 100 percent of the issued share capital
of Another, consisting of 350,000 ordinary shares of GBP1.00 each,
of which an aggregate amount of GBP210,000 is currently unpaid, for
a consideration of GBP5.00. Another has an existing trading
relationship with the Group and had net liabilities to the Group of
around GBP140,000 as at the date of the acquisition.
Another has principally been engaged in product and service
development since incorporation in 2017, so is an early stage
business. Another is yet to publish final accounts for the period
from incorporation (13 July 2017) to 31 July 2018. with management
accounts showing a loss for the period of GBP258,615 on sales of
GBP108,497 and net assets of GBP91,385 (including GBP210,000 of
unpaid share capital, as outlined above); for the six-months to
31/1/19, management accounts show further losses of GBP155,519 on
sales of GBP126,784. The Board is confident that the technology
developed by Another, once integrated into the existing SJH
infrastructure will result in this becoming an exciting additional
business line for the Group. Another will form part of the Group's
payments division and it is the intention to utilise the "another"
brand for the Group's retail payments offering, while the Group's
existing Market Access business is focussed on the business and
institutional markets.
New Lottery Joint Venture
On 8 March 2019, the Board of Directors of St James House PLC
announced it had agreed terms, subject to contract, to establish a
new lottery joint venture in Malta. The Company's partner in this
joint venture is ZeU Crypto Networks Limited ("ZeU"), a wholly
owned subsidiary of St-Georges Eco-Mining Corp. of Montreal, Canada
("SGEM"), whose shares are quoted on the Canadian Securities
Exchange (The "Lottery JV").
The Lottery JV will be established as a new company in Malta and
will combine the Company's expertise in regulated lottery
management and administration with ZeU's innovative
blockchain-based technology. The Group will hold a 45 per cent
equity interest in the Lottery JV and the other shareholders will
be Zeu with 19.9 per cent, SGEM with 19.9 per cent and the balance
with outside shareholders. All costs of the Lottery JV will be met
by ZeU and in return, ZeU will charge a service fee that will not
exceed 90% of the revenues from the Lottery JV. The remaining 10
per cent of the revenues of the Lottery JV will be distributed as a
dividend to the shareholders, i.e. the Group will receive 4.5 per
cent of the revenues of the Lottery JV by way of a dividend. St
James House PLC will appoint three directors to the Lottery JV and
ZeU will appoint one director. The Lottery JV will apply to the
Maltese authorities for the appropriate licence to operate a
lottery.
The Group's interest in the Lottery JV will be held by PPS
Blockchain Limited, a wholly owned subsidiary of SJH ("PPSB"). PPSB
will issue 100,000 non-voting, zero-coupon redeemable preference
shares of 2 pence each to ZeU (the "Preference Shares"). The
Preference Shares will be redeemable in 21 years, the redemption
price of the Preference Shares to be fixed within 3 months after
the issue of the audited accounts of the Lottery JV for the second
year of trading and will be based on an independent valuation
report of the value of the Group's equity interest. At the
discretion of ZeU, the Preference Shares may be exchanged on the
basis of one Preference Share for two ordinary shares of 1 pence
each in SJH ("Ordinary Shares"), with notice to be given one day
before the preference shares are due to be redeemed in 21 years,
i.e. a maximum of 200,000 Ordinary Shares may be issued.
Lord Razzall, the Non-Executive Chairman of SJH is a director of
ZeU and holds no common shares in ZeU, he owns less than 1 per cent
of the common shares of SGEM and is not a director of SGEM.
Change of Auditor
The Board has appointed MHA MacIntyre Hudson as auditors to the
Group in replacement of KPMG LLP. The Board believes MHA MacIntyre
Hudson to be more suited to the Group's size and business
activities.
Operational Summary
The Payments Division continues to make progress after the
difficulties of 2018. Market Access is now actively adding new
clients to its payment card processing service. To enhance its
competitiveness in this sector, it has added further acquiring
institutions to its payment gateway. The acquisition of Another Ops
Limited ("Another"), as announced on 23 May 2019, will add to the
Group's offering within the payment card space, through the
addition of prepaid cards, mobile payments, point of sale terminals
and pay by link services, as well as bringing additional acquiring
relationships.
Market Access' foreign exchange and international payments
service is gaining increasing traction, with the number of
transactions in May expected to be around three times those
undertaken in April, based on the number completed to date. Market
Access has been granted a BIC (business identifier code) by SWIFT
(The Society for Worldwide Interbank Financial Telecommunication),
the global payment network for financial institutions, which will
considerably enhance the Group's ability to make international
payments. Market Access has also signed agreements to provide Union
Pay, AliPay and WePay, (the major Chinese domestic payment systems)
services internationally, as well as commencing several further
international banking relationships.
Outlook
Payment Services
The combination of services offered by Market Access with the
addition of Another means that the Company now has a full range of
card and payment services designed to meet the needs of individuals
and businesses. Prepaid card programmes are being rolled out on
behalf of Bandania Bank and 4New Limited with a target of more than
100,000 active cardholders in 2019. Each activated card is expected
to generate revenue between GBP3 and GBP5 per month. Merchants
Services has seen an increase in number of clients and transactions
handled and is set for significant growth throughout 2019, both
Prepaid and Merchant services generate Foreign Exchange business
further supporting the Company's strategy moving forward.
Lottery
PPSL has completed roll out of a number of technology
improvements and rolled out the Sports Club Lottery, focused on
raising funds for sports clubs including over 100 league and
non-league football clubs, alongside the Weather Lottery which
supports hundreds of local and national health and education
programmes.
In November 2018 PPSL announced that it is to operate the
lottery for Unite, one of the UK's largest membership organisation.
Already players are being recruited following the soft launch in
December 2018, followed by the full launch in late H1 2019. The
remainder of 2019 will see a number of player recruitment
activities in order to raise funds for the organisation's
benevolent fund. This includes dedicated online and offline
marketing activity and inclusion of lottery information with
recruitment and membership initiatives.
Principal risks and uncertainties facing the Group
There are a number of potential risks and uncertainties that
could have a material impact on the Group's long-term performance,
and the Group takes a positive approach to risk management.
Management and employees
The nature of the Group and its business model creates reliance
upon retaining and incentivising its senior management and certain
key employees, whose expertise will be important to the fortunes of
the Group going forward. The Directors have endeavoured to ensure
that the principal members of its management team are suitably
incentivised, but the retention of such staff cannot be
guaranteed.
The Group may need to recruit additional senior management and
other staff in order to further develop its business. There can be
no guarantee that such individuals will be recruited in the Group's
preferred timetable or at the cost levels anticipated by the Group.
Competition for staff is strong and therefore the Group may find it
difficult to retain key management and staff. The loss of key
personnel and the inability to recruit further key personnel could
have a material adverse effect on the future of the Group through
the impairment of the day-to-day running of the businesses and the
inability to maintain existing client relationships.
Economic risk
Demand for the Group's services may be significantly affected by
the general level of economic activity and economic conditions in
the regions and sectors in which the Group operates. Therefore, a
continuation of the challenging economic environment, especially in
regions or sectors where the Group's operations are focused, could
have a material adverse effect on the Group's business and
financial results.
Financial Risk
The Group's financial risk management strategy is based on sound
economic objectives and corporate practices. The main financial
risks concern the availability of funds to meet obligations as they
arise (liquidity risk) and fluctuations in exchange rates (exchange
rate risk).
Competition
The Group is engaged in business activities where there are a
number of competitors. Many of these competitors are larger than
the relevant businesses carried on by the Group and have access to
greater funds than the Group, which will potentially enable them to
gain market share at the expense of the Group.
Acquisitions
The Directors cannot discount circumstances where an acquisition
would support the Group's business strategy. However, there is no
guarantee that the Group will successfully be able to identify,
attract and complete suitable acquisitions or that the acquired
business will perform in line with expectations.
Funding and working capital
Maintaining a sufficient level of working capital is essential
to enable the Group to meet its foreseeable obligations and achieve
its strategy. Failure to manage working capital or to collect
receivables such as amounts due from Phillite D UK Limited of
GBP1,241,000 in a timely manner could impact upon the ability of
the Group to grow.
Management of growth
The ability of the Group to implement its strategy in an
expanding market requires effective planning and management control
systems. The Group's growth plans may place a significant strain on
its management, operational, financial and personnel resources. The
Group's future growth and prospects will, therefore, depend on its
ability to manage the growth and to continue to expand and improve
operational, financial and management information and quality
control systems on a timely basis, whilst at the same time
maintaining effective cost controls. Any failure to expand and
improve operational, financial and management information and
quality control systems in line with the Group's growth could have
a material adverse effect on its business, financial condition and
results of operations.
Market developments
Any failure to expand the Group's service offering in response
to customer demand and/or industry developments may have an adverse
effect on the Group's financial performance and prospects.
Reliance on Partners
Much of the Group's business is dependent on partners (acquiring
banks, charities, clubs, etc.). Changes in key relationships with
those partners, change of strategic direction by partner
organisations, changes in the viability of partner-owned
technology, economic and other business circumstances could all
have an adverse effect on the financial performance of the
Group.
Legal and regulatory matters
The Group is subject to a considerable degree of regulation and
legislation. Changes in or extensions of laws and regulations
affecting the industry in which the Group operates (or those in
which its customers operate) and the rules of industry
organisations could restrict or complicate the Group's business
activities, with the potential to increase compliance/legal costs
significantly.
As announced on 31 October 2017, the historic legal matters
surrounding the Company's relationship with its former regulated
payment processor, EUPay Group Limited ("EUPay") has been settled.
Phillite D UK Limited has independently of the Company taken
responsibility for the amounts owed by EUPay to the Group. As a
result of the settlement, Phillite D UK Limited is now in a
position to pursue the collection of these amounts without any
hindrance from litigation. This will facilitate the repayment of
the amounts outstanding to the Group.
Going concern
As a result of the challenges faced by the business in recent
periods, and as a result of the restructuring undertaken in the
last year, the Group is in the relatively early phases of its
longer-term strategy and, excluding the exceptional gain on the
disposal of Emex, has generated operating losses in the year ended
31 January 2019 and subsequently. As a result, there is a risk that
it is not able to achieve the forecast growth in revenue, profits
and cash flows and as a result it may not be able to continue as a
going concern without raising additional capital. Further details
are provided in the Directors' Report and in Note 1 to the
financial statements.
Independent auditor's report to the members of St James House
plc (formerly Boxhill Technologies plc)
1. Our opinion is unmodified
We have audited the financial statements of St James House plc
(formerly Boxhill Technologies plc) ("the Company") for the year
ended 31 January 2019 which comprise the Consolidated Statement of
Profit and Loss and Other Comprehensive Income, Consolidated
Balance Sheet, Consolidated Statement of Changes in Equity,
Consolidated Cash Flow Statement, Company Balance Sheet, Company
Statement of Changes in Equity, and the related notes, including
the accounting policies in note 1.
In our opinion:
-- the financial statements give a true and fair view of the
state of the Group's and of the parent Company's affairs as at 31
January 2019 and of the Group's profit for the year then ended;
-- the Group financial statements have been properly prepared in
accordance with International Financial Reporting Standards as
adopted by the European Union;
-- the parent Company financial statements have been properly
prepared in accordance with UK accounting standards, including FRS
102 The Financial Reporting Standard applicable in the UK and
Republic of Ireland; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) ("ISAs (UK)") and applicable law. Our
responsibilities are described below. We have fulfilled our ethical
responsibilities under, and are independent of the Group in
accordance with, UK ethical requirements including the FRC Ethical
Standard as applied to listed entities. We believe that the audit
evidence we have obtained is a sufficient and appropriate basis for
our opinion.
2. Material uncertainty related to going concern
We draw attention to note 1 to the financial statements which
indicates that the Group's and the parent Company's ability to
continue as a going concern is dependent upon the substantial
achievement of forecast cash flows. These events and conditions
represent a material uncertainty that may cast significant doubt on
the Group's and Parent Company's ability to continue as a going
concern. Our opinion is not modified in respect of this matter.
The risk - Disclosure quality
Following a significant restructuring of the Group's Payment
Processing business, the Group is in the relatively early phases of
its longer-term strategy and has generated losses in the year ended
31 January 2019 and subsequently. Projections for the period to 31
October 2020 have been prepared, indicating that the Group has
taken action to address current cash flow shortfalls, and that the
Payment Processing business will generate profit and cash inflows
within a short period of time, which will enable the Group and the
Company to meet its liabilities as they fall due for the
foreseeable future. The financial statements explain how the
Directors have formed a judgement that it is appropriate to prepare
the accounts of the Group and Parent Company on a going concern
basis. However, the Directors have concluded that the factors
discussed in note 1 represent a material uncertainty that may cast
significant doubt regarding the Group's and parent Company's
ability to continue as a going concern.
As this assessment involves a consideration of future events
there is a risk that the judgement is inappropriate. Furthermore,
clear and full disclosure of the facts and the directors' rationale
for the use of the going concern basis of preparation, including
that there is a related material uncertainty, is a key financial
statement disclosure. Auditing standards require such matters to be
reported as a key audit matter.
Our response
Our procedures included:
- Personnel interviews: inquiring of senior management and
challenging the assumptions used in the Directors' forecast models,
in particular those relating to forecast revenue, and corroborating
these against available evidence by inspecting agreements signed
with new and existing customers;
- Sensitivity analysis: we assessed reasonably possible downside
scenarios that would result in the cash flow falling below
operating expense requirements and considered whether they could be
considered to be reasonably possible; and
- Assessing transparency: Assessing the going concern disclosure
for clarity, including that there is disclosure of a material
uncertainty.
3. Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional
judgment, were of most significance in the audit of the financial
statements and include the most significant assessed risks of
material misstatement (whether or not due to fraud) identified by
us, including those which had the greatest effect on: the overall
audit strategy; the allocation of resources in the audit; and
directing the efforts of the engagement team. These matters were
addressed in the context of our audit of the financial statements
as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. In arriving at our
audit opinion above, the key audit matters, in decreasing order of
audit significance, were as follows:
Key audit matter The risk Our response
Recoverability of Forecast-based valuation Our procedures included:
Group goodwill and
of parent company's The carrying amount Benchmarking assumptions:
investment in subsidiaries of goodwill in the Comparing the Group's
Group and the parent assumptions to externally
Group goodwill: GBP158,000 company's investments derived data in relation
(2018: GBP1,673,000) in subsidiaries are to key inputs such as
Parent company's investment significant and at discount rates, growth
in subsidiaries: GBP risk of irrecoverability rates and cost inflation;
811,000 (2018: GBP1,344,000) as the Group does Sensitivity analysis:
not have a track record Performing breakeven
Refer to page 37, of profitability and analysis on the assumptions
66 (accounting policy generated a loss in noted above and considering
and page 50, 72 (financial the current year. the likelihood that
disclosures) these thresholds would
The estimated recoverable be reached;
Risk vs. 2018: Reduction amount of these balances Comparing valuations:
- the amount involved, is subjective due Comparing the sum of
particularly at the to the inherent uncertainty the discounted cash
Group level, has significantly involved in forecasting flows to the Group's
reduced. and discounting future market capitalisation
cash flows. to assess the reasonableness
of those cashflows;
and
Assessing transparency:
Assessing whether the
Group's disclosures
about the sensitivity
of the outcome of the
impairment assessment
to changes in key assumptions
reflected the risks
inherent in the valuation
of goodwill in the Group
and the parent company's
investment in subsidiaries.
----------------------------- ----------------------------------
Key audit matter The risk Our response
Capitalisation of Accounting treatment Our procedures included:
internally generated
intangible assets The Group capitalises Personnel interviews
external costs and and our business understanding:
GBP90,000 (2018: GBP586,000) eligible employment Enquiring of management
costs incurred in and the Board, and
Refer to page 38 (accounting the development of inspecting minutes
policy and page 49 software and establishment of meetings, project
(financial disclosures) of regulatory licences timelines and status
as internally generated reports throughout
Risk vs. 2018: Reduction intangible assets. the year, to support
- additionally, there Judgement is required the eligibility of
has been a significant to determine whether the costs for capitalisation
impairment of the the costs meet capitalisation in accordance with
licences in the year. criteria set out in the relevant accounting
the relevant accounting standards;
standards.
Accounting analysis:
Comparing a sample
of costs capitalised
to the narrative on
external invoices
or internal reports
of time allocation
to analyse the nature
of the costs and whether
they meet capitalisation
criteria per the applicable
accounting standards.
------------------------------- ---------------------------------
4. Our application of materiality and an overview of the scope of our audit
Materiality for the Group financial statements as a whole was
set at GBP42,001, determined with reference to a benchmark of group
profit (of which it represents 10%). We consider profit to be the
most appropriate measure of group.
Materiality for the parent company financial statements as a
whole was set at GBP42,000, determined with reference to a
benchmark of company net assets, of which it represents 2%.
We agreed to report to the Audit Committee any corrected or
uncorrected identified misstatements exceeding GBP2,100, in
addition to other identified misstatements that warranted reporting
on qualitative grounds.
Of the Group's eight (2018: 9) reporting components, we
subjected 5 (2018: 5) to full scope audits for Group purposes. For
the residual 3 components, we performed analysis at an aggregated
group level to re-examine our assessment that there were no
significant risks of material misstatement within these.
The components within the scope of our work accounted for 100%
(2018: 100%) of total group revenue, 100% (2018: 100%) of group
loss before tax and 100% (2018: 97%) of total group assets.
All component audits, including the audit of the parent company,
were performed by the Group team using component materialities,
which ranged from GBP3,000to GBP,42,000, having regard to the mix
of size and risk profile of the Group across the components.
5. We have nothing to report on the other information in the Annual Report
The directors are responsible for the other information
presented in the Annual Report together with the financial
statements. Our opinion on the financial statements does not cover
the other information and, accordingly, we do not express an audit
opinion or, except as explicitly stated below, any form of
assurance conclusion thereon.
Our responsibility is to read the other information and, in
doing so, consider whether, based on our financial statements audit
work, the information therein is materially misstated or
inconsistent with the financial statements or our audit knowledge.
Based solely on that work we have not identified material
misstatements in the other information.
Strategic report and directors' report
Based solely on our work on the other information:
-- we have not identified material misstatements in the
strategic report and the directors' report;
-- in our opinion the information given in those reports for the
financial year is consistent with the financial statements; and
-- in our opinion those reports have been prepared in accordance with the Companies Act 2006.
6. We have nothing to report on the other matters on which we
are required to report by exception
Under the Companies Act 2006, we are required to report to you
if, in our opinion:
-- adequate accounting records have not been kept by the parent
Company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the parent Company financial statements are not in agreement
with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
We have nothing to report in these respects.
7. Respective responsibilities
Directors' responsibilities
As explained more fully in their statement set out on page 24
the directors are responsible for: the preparation of the financial
statements including being satisfied that they give a true and fair
view; such internal control as they determine is necessary to
enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error; assessing the
Group and parent Company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern; and
using the going concern basis of accounting unless they either
intend to liquidate the Group or the parent Company or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue our
opinion in an auditor's report. Reasonable assurance is a high
level of assurance, but does not guarantee that an audit conducted
in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in aggregate,
they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial
statements.
A fuller description of our responsibilities is provided on the
FRC's website at: www.frc.org.uk/auditorsresponsibilities.
8. The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the Company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
Company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the Company and the Company's members, as a body,
for our audit work, for this report, or for the opinions we have
formed.
Jason Mitchell (Senior Statutory Auditor)
MHA MacIntyre Hudson
Chartered Accountants
Statutory Auditor
Pennant House
1-2 Napier Court
Reading
RG1 8BW
8 July 2019
Consolidated Statement of Profit and Loss and Other
Comprehensive Income
for year ended 31 January 2019
Note 2019 2018
GBP000 GBP000
Continuing operations
Revenue 3 938 458
Cost of sales 4 (252) (243)
Gross profit 686 215
Administrative expenses 4,5,6 (3,020) (936)
Impairment of intangible assets (440) -
Operating loss (2,774) (721)
Finance income 7 22 -
Finance expenses 7 (3) -
Loss before tax (2,755) (721)
Loss for the year from continuing
operations (2,755) (721)
Discontinuing operations
Profit/(loss) from discontinued operations,
net of tax 8 3,162 (1,030)
Profit/(loss) for the period 407 (1,751)
Other comprehensive income/(loss)
Items that are or may be reclassified
subsequently to profit or loss:
Revaluation of equity investment
- Soccerdome 14 (9) (58)
Other comprehensive loss for the
year, net of income tax (9) (58)
Total comprehensive income/(loss)
for the year 398 (1,809)
Earnings per share
Basic earnings per ordinary share
(pence per share) 10 0.13 (0.08)
Diluted earnings per ordinary share
(pence per share) 10 0.13 (0.08)
Earnings per share from continuing
operations
Basic earnings per ordinary share
(pence per share) 10 0.01 (0.03)
Diluted earnings per ordinary share
(pence per share) 10 0.01 (0.03)
All of the profit/(loss) for the period is attributable to
equity holders of the Parent Company.
The notes on pages 34 to 66 of the Annual Report form part of
these financial statements.
Consolidated Balance Sheet
At 31 January 2019
Note 2019 2018
GBP000 GBP000
Non-current assets
Property, plant and equipment 11 3 29
Goodwill 13 158 1,673
Other intangible assets 12 1,009 2,037
Investments in equity instruments 14 213 222
Investments in debt instruments 15 1,722 -
Total non-current assets 3,105 3,961
Current assets
Trade and other receivables 17 1,449 3,225
Cash and cash equivalents 18 371 2,151
Total current assets 1,820 5,376
Total assets 4,925 9,337
Current liabilities
Trade and other payables 20 1,858 7,142
Bank and other borrowings 19 6 6
Total current liabilities 1,864 7,148
Total non-current liabilities - -
Total liabilities 1,864 7,148
Net assets 3,061 2,189
Equity attributable to equity holders
of the parent
Share capital 22 2,816 2,356
Share premium 23 3,020 3,020
Merger reserve 23 999 999
Revaluation reserves 23 213 222
Retained earnings (3,987) (4,408)
Total equity attributable to equity
holders of the Parent 3,061 2,189
The notes on pages 34 to 66 of the Annual Report form part of
these financial statements.
Consolidated Cash Flow Statement
for year ended 31 January 2019
Note 2019 2018
GBP000 GBP000
Cash flows from operating activities
Profit/(loss) for the year 407 (1,751)
Adjustments for:
Depreciation and amortisation 11,12 498 122
Impairments 12 440 -
Financial expenses 7 (19) -
Share options charge 24 14 -
Gain on disposals of subsidiaries 8 (3,505)
Movement in working capital:
(Increase) in trade and other receivables (1,514) (1,275)
Increase in trade and other payables 2,145 4,859
Cash generated by operations (1,534) 1,955
Interest paid (3) -
Tax paid - -
Net cash from operating activities (1,537) 1,955
Cash flows from investing activities:
Acquisition of property, plant and
equipment 11 (1) (30)
Acquisition of intangible assets 12 (90) (5)
Development expenditure 8 - (587)
Net cash on disposal of subsidiaries 8 (152) -
Net cash used in investing activities (243) (622)
Net cash used in financing activities -
-
Net (decrease)/increase in cash and
cash equivalents (1,780) 1,333
Cash and cash equivalents at start
of period 2,151 818
Cash and cash equivalents at end
of period 18 371 2,151
There is no material difference between the fair value and the
book value of cash and cash equivalents.
The notes on pages 34 to 66 of the Annual Report form part of
these financial statements.
Notes to editors:
St. James House PLC (AIM: SJH) is an AIM quoted financial
technology and lottery company.
SJH has a range of ecommerce products that suit all merchants'
and customers' needs enabling secure payments. The Company works
within both regulated frameworks and in regions where traditional
partners struggle to offer safe, secure services.
In addition, SJH operates the Weather Lottery, which has been in
operation since 2002 and the Group holds one of the limited number
of UK external lottery manager's licences. Over GBP5.4 million has
been raised to date for good causes and the lottery has paid over
GBP4.9 million in prizes to winners.
SJH also has a joint venture agreement via Soccerdome Ltd
operating a five a side football complex in Nottingham.
The Annual Report is available on the Group's website at
https://sjhplc.com/. Copies are available from the Company at its
registered office:
30-35 Pall Mall, London SW1Y 5LP, United Kingdom
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR UKVURKVABRAR
(END) Dow Jones Newswires
July 09, 2019 09:18 ET (13:18 GMT)
Tintra (LSE:TNT)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
Tintra (LSE:TNT)
Historical Stock Chart
Von Jul 2023 bis Jul 2024