RNS Number:3244M
Cardpoint PLC
16 May 2005
16 May 2005
Cardpoint plc
Interim results for the 6 months ended 31 March 2005
Cardpoint announces strong growth and significant progress on the integration of
the HBOS acquisition
Cardpoint is a provider of electronic payment transactions and is the market
leader in the independent Cash Machine sector.
"I am delighted to announce very encouraging results which demonstrate the
growth in our core business with turnover for the six months ended 31 March 2005
having increased by 92% to #26.6m (2004: #13.8m). Particularly pleasing is the
further progress made in the conversion of the HBOS Cash Machine estate to
charging despite a number of unforeseeable delays. The profit per machine once
converted to charging has been higher than anticipated due to higher retention
and charging rates and we now confidently expect to convert not less than 275
machines to charging by the year-end, exceeding our target of 250.
Whilst the delay in the migration to charging will have a short term impact on
our expectations for the current year, we will start the next financial year
from a stronger base as more machines will have been converted to charging than
previously anticipated. The benefits of the HBOS acquisition will be proven by
the quantum and quality of earnings that it delivers following this transitional
year. These earnings will be delivered from the acquisition that will have cost
the Company considerably less at around #50m compared to #76.6m envisaged at the
time of the acquisition."
Mark Mills, CEO Cardpoint plc
Strong growth in turnover, despite seasonal nature of business
* Turnover up 92% to #26.6m (2004: #13.8m)
* EBITDA up 151% to #3.1m (2004: #1.2m)
* Profit before tax and goodwill amortisation up 43% to #0.4m (2004: #0.3m)
Very encouraging progress in integrating the HBOS acquisition
* Profit generated from HBOS machines converted to charging has exceeded
expectations, due to higher retention and charging rates
* Despite additional time needed to achieve the conversion of machines
to charging, we now expect not less than 275 machines to be converted by
year-end, exceeding our target of 250
* New important agreements secured
* Cost of HBOS acquisition significantly lower at circa #50m as opposed
to a maximum of #76.6m
Confidence in the future
* The findings of the Treasury Select Committee report are welcomed
* Encouraging success has been made in Germany with a strong pipeline of
new sites
* Management looks forward to strong trading in 2006, now that the firm
foundations of this transitional year have been laid
* Improved transaction levels are anticipated in the normally busier
second half of the year
FINANCIAL HIGHLIGHTS
Unaudited Unaudited Change %
6 months ended 31 6 months ended 31
March 2005 March 2004
#'000 #'000
Turnover 26,614 13,847 +92%
Gross profit 4,488 3,774 +47%
EBITDA 3,083 1,226 +151%
Profit before taxation and goodwill 443 309 +43%
amortisation
Net assets 31,452 6,116 +414%
ENDS
Enquiries
Mark Mills, Chief Executive Officer Ed Gascoigne-Pees
Cardpoint plc - 01253 361300 Financial Dynamics - 020 7269 7132
Robin Gregson, Finance Director Geoffrey Pelham-Lane
Cardpoint plc - 01253 361327 Financial Dynamics - 020 7269 7194
Dear Shareholder
I am delighted to announce very encouraging results which demonstrate the growth
in our core business with turnover for the six months ended 31 March 2005 having
increased by 92% to #26.6m (2004: #13.8m). Particularly pleasing is the further
progress made in the conversion of the HBOS Cash Machine estate to charging
despite a number of unforeseeable delays. The profit per machine once converted
to charging has been higher than anticipated due to higher retention and
charging rates and we now confidently expect to convert not less than 275
machines to charging by the year-end, exceeding our target of 250.
Whilst the delay in the migration to charging will have a short term impact on
our expectations for the current year, we will start the next financial year
from a stronger base as more machines will have been converted to charging than
previously anticipated. The benefits of the HBOS acquisition will be proven by
the quantum and quality of earnings that it delivers following this transitional
year. These earnings will be delivered from the acquisition that will have cost
the Company considerably less at around #50m compared to #76.6m envisaged at the
time of the acquisition
Highlights
* Turnover increased by 92% to #26.6m (2004: #13.8m)
* Gross profit increased by 47% to #4.5m (2004: #3.1m)
* EBITDA increased by 151% to #3.1m (2004: #1.2m)
* Profit before tax and goodwill amortisation increased by 43% to #443k (2004:
#304k)
* Seasonal business with greater revenue in the second half and a largely fixed
cost base
* Core Cash Machine estate income increased 9% like for like
* Significant progress on the HBOS acquisition with our expectation of the
number of sites converted to charging by September 30th 2005 raised from 250
to 275 sites
* Higher profit generated from converted HBOS machines than anticipated, due to
higher retention and charging rates
* Cost of HBOS acquisition significantly lower at circa #50m as opposed to
maximum of #76.6m
This is the first time that the HBOS acquisition has impacted, albeit partially,
on Cardpoint's financial results, increasing turnover and demonstrating
encouraging trends.
The acquisition of the HBOS Cash Machine estate built on Cardpoint's strengths
and the retention and charging rates have been higher than anticipated when
machines have been converted to charging with the profit generated by each
machine exceeding expectations. We expect the acquisition to deliver future
earnings in line with expectations, once the transitional year to 30 September
2005 has been completed, providing a strong platform for further growth during
2006.
Additional time has been required to complete the complex transition from free
machines to highly profitable charging machines owing to the nature of some
Retailer agreements and due to a specific supplier issue. The effect of the
short term delay is allayed to an extent by the much lower consideration payable
for the estate and the quality of the future maintainable earnings. The
acquisition will have cost the Company considerably less at around #50m compared
to #76.6m envisaged at the time of the acquisition. Due to significant new
contractual progress, we now have excellent visibility and a robust roll-out
plan with not less than 275 machines to be converted to charging by 30 September
2005, exceeding the number predicted at 31 March 2005.
The last six months have been both challenging and rewarding for the Company and
we have further refined our business, redeploying poor performing machines,
concentrating as always on quality new installations and focusing on securing
important agreements to facilitate the migration of HBOS machines from free to
charging. The trends underlying our business are encouraging and in Germany, we
are deploying machines carefully from our strong pipeline of new sites.
The Treasury Select Committee has recommended that additional signage be
installed in and around Cash Machines forewarning of charges. This is in line
with the acceptance question which has been posed to each and every customer
withdrawing cash since the Company's inception and in the Directors' opinion
will not have a material adverse affect.
Cardpoint is suitably positioned to build on its strong base and to expand
organically and by acquisition and we anticipate continued success as the
increased usage during the normally busier second half of the year continues.
Mark Mills
Chief Executive Officer
16 May 2005
Consolidated Profit and Loss Account
For the 6 months ended 31 March 2005
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
31 March 31 March 30 September
2005 2004 2004
Notes #'000 #'000 #'000
Turnover - continuing operations 3 26,614 13,847 36,812
Cost of sales (22,126) (10,790) (29,025)
Gross profit 4,488 3,057 7,787
Administrative expenses
Amortisation of goodwill (5,538) (1,135) (4,834)
Other (3,575) (2,698) (5,694)
Total administrative expenses (9,113) (3,833) (10,528)
Operating loss - continuing (4,625) (776) (2,741)
operations
Net interest (470) (50) (315)
Loss on ordinary activities
before taxation (5,095) (826) (3,056)
Tax on loss on ordinary 4 - - -
activities
Loss for the financial period (5,095) (826) (3,056)
(Loss)/earnings per ordinary
share
Basic and fully diluted 5 (8.38)p (2.53)p (7.56)p
Basic (before goodwill 5 0.73p 0.95p 4.40p
amortisation)
Diluted adjusted (before
goodwill amortisation) 5 0.68p 0.87p 4.09p
There were no recognised gains and losses other than those shown in the profit
and loss account.
The notes on pages 8 to 11 form an integral part of this financial information.
Consolidated Balance Sheet
As at 31 March 2005
Unaudited Unaudited Audited
As at As at As at
31 March 31 March 30 September
2005 2004 2004
Notes #'000 #'000 #'000
Fixed assets
Tangible assets 16,095 6,139 16,817
Intangible assets 44,343 9,553 49,881
60,438 15,692 66,698
Current assets
Stocks 4 309 4
Debtors 5,351 2,318 3,452
Cash at bank and in hand 6 3,395 2,923 3,264
8,750 5,550 6,720
Creditors: amounts falling due
within one year (24,613) (14,987) (26,026)
Net current liabilities (15,863) (9,437) (19,306)
Total assets less current 44,575 6,255 47,392
liabilities
Creditors: amounts falling due
after more than one year (13,123) (139) (11,000)
Net assets 31,452 6,116 36,392
Capital and reserves
Called up share capital 7 3,039 1,634 3,039
Share premium account 7 38,825 7,823 38,825
Merger reserve 7 354 354 354
Profit and loss account 7 (10,766) (3,695) (5,826)
Equity shareholders' funds 31,452 6,116 36,392
The notes on pages 8 to 11 form an integral part of this financial information.
Consolidated Cash Flow Statement
For the 6 months ended 31 March 2005
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
31 March 31 March 30 September
2005 2004 2004
Notes #'000 #'000 #'000
Net cash inflow from 8 404 997 3,006
operating activities
Returns on investments and
servicing of finance
Net interest paid (468) (38) (298)
Finance lease interest paid (2) (12) (17)
Net cash outflow from
returns on investments and
servicing of finance (470) (50) (315)
Tax paid - - (31)
Capital expenditure and
financial investment
Purchase of tangible fixed (1,093) (1,456) (3,267)
assets
Proceeds from disposal of
tangible fixed assets 88 48 148
Net cash outflow from
capital expenditure and
financial investment (1,005) (1,408) (3,119)
Acquisitions and disposals
Purchase of acquired - - (41,696)
businesses
Deferred consideration (1,662) (59) (829)
Net cash outflow from
acquisitions and disposals (1,662) (59) (42,525)
Net cash outflow before (2,733) (520) (42,984)
financing
Financing
Issue of share capital (net - - 32,407
of issue costs)
Receipts from borrowings 2,923 - 13,000
Repayment of borrowings - (500) (3,500)
Capital element of finance (17) (112) (184)
lease rentals
Net cash inflow/(outflow)
from financing 2,906 (612) 41,723
Increase/(decrease) in cash 173 (1,132) (1,261)
in the period
The notes on pages 8 to 11 form an integral part of this financial information.
Notes to the interim financial information
1. INTERIM FINANCIAL INFORMATION
The interim financial information covers the period from 1 October 2004 to 31
March 2005, is unaudited and does not constitute statutory financial statements.
The financial information for the year ended 30 September 2004 has been
extracted from the audited financial statements of Cardpoint plc which have been
filed with the Registrar of Companies. The auditors' opinion on those accounts
was unqualified and contained no statement under section 237(2) or (3) of the
Companies act 1985.
2. PRINCIPAL ACCOUNTING POLICIES
The interim financial information has been prepared on the same basis and using
the same accounting policies as used in the financial statements for the year
ended 30 September 2004.
3. TURNOVER
Of the turnover for the period ended 31 March 2005, #12,279,000 was derived from
businesses acquired during the year ended 30 September 2004 (6 months ended 31
March 2004: #nil and year ended 30 September 2004: #6,784,000).
4. TAX ON LOSS ON ORDINARY ACTIVITIES
There is no corporation tax charge for the period (2004: #nil) due to the losses
incurred.
5. (LOSS)/EARNINGS PER ORDINARY SHARE
The basic and fully diluted loss per ordinary share is calculated by dividing
the loss for the period after tax of #5,095,000 (31 March 2004: #826,000) by the
weighted average number of ordinary shares in issue during the period of
60,772,125 (31 March 2004: 32,686,334). The adjusted earnings per ordinary
share is calculated by reducing the loss for the period by the goodwill
amortisation of #5,538,000 (31 March 2004: #1,135,000). The company's share
options are anti-dilutive in respect of the basic earnings per share
calculation. The calculation of adjusted earnings per share on a diluted basis
takes account of the potentially dilutive effect of outstanding share options by
increasing the weighted average ordinary shares in issue by 4,136,835 (31 March
2004: 2,895,428).
6. CASH AT BANK AND IN HAND
Included within cash at bank and in hand is an amount of #1,222,000 (31 March
2004: #1,241,000) held in a trust account. The monies held in this account,
which is administered by the group's payment collection agent, are designated
for payment to suppliers.
7. CAPITAL AND RESERVES
Unaudited Unaudited Unaudited Unaudited
Share capital Share Premium Merger Profit and loss
Reserve account
#'000 #'000 #'000 #'000
At 1 October 2004 3,039 38,825 354 (5,826)
Loss for the financial period - - - (5,095)
Credit for equity settled
share-based payments - - - 155
At 31 March 2005 3,039 38,825 354 (10,766)
8. RECONCILIATION OF OPERATING LOSS TO NET CASH INFLOW FROM OPERATING ACTIVITIES
Unaudited Unaudited Audited
6 months ended 6 months Year
ended ended
31 March 31 March 30 September
2005 2004 2004
#'000 #'000 #'000
Operating loss (4,625) (776) (2,741)
Depreciation 2,170 862 2,331
(Profit)/loss on disposal of fixed (7) 5 (2)
assets
Amortisation of goodwill 5,538 1,135 4,834
Equity settled share-based payments 155 - 99
Decrease in stocks - 13 -
(Increase)/decrease in debtors (1,899) 1,856 722
Decrease in creditors (928) (2,098) (2,237)
Net cash inflow from operating 404 997 3,006
activities
9. ANALYSIS OF CHANGE IN NET DEBT
Audited Unaudited Unaudited
At 1 At 31
October March
2004 Cash flow 2005
#'000 #'000 #'000
Cash at bank and in hand 3,264 131 3,395
Bank overdrafts (470) 42 (428)
2,794 173 2,967
Bank loans (13,000) (2,923) (15,923)
Obligations under finance leases (31) 17 (14)
(10,237) (2,733) (12,970)
10. INTERIM REPORT
This Interim Report was approved by the Directors on 16 May 2005. A copy of the
Interim Report will be posted to shareholders and will also be available from
the Company's registered office at Transaction House, Skyways Commercial Campus,
Amy Johnson Way, Blackpool, Lancashire, FY4 3RS.
Financial Review
Three year summary profit and loss 6 months ended 12 months 12 months 12 months
account 31 March ended 30 ended 30 ended 30
September September September
2005 2004 2003 2002
#'000 #'000 #'000 #'000
Turnover 26,614 36,812 12,166 3,104
EBITDA 3,083 4,424 1,296 (242)
Depreciation (2,170) (2,331) (1,126) (417)
Goodwill amortisation (5,538) (4,834) (658) -
Net interest (470) (315) (120) (98)
Loss on ordinary activities before
taxation (5,095) (3,056) (608) (757)
Profit/(loss) before tax and
goodwill amortisation 443 1,778 50 (757)
Three year summary balance sheet
Intangible fixed assets 44,343 49,881 10,688 -
Tangible fixed assets 16,095 16,817 5,035 2,856
Current assets 8,750 6,720 9,114 914
Current liabilities (24,613) (26,026) (16,834) (2,054)
Long-term liabilities (13,123) (11,000) (1,061) (216)
Net assets 31,452 36,392 6,942 1,500
This information is provided by RNS
The company news service from the London Stock Exchange
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