Earthport PLC Restatement of Fair Value Adjustments (9504F)
November 01 2018 - 3:00AM
UK Regulatory
TIDMEPO
RNS Number : 9504F
Earthport PLC
01 November 2018
1 November 2018
Earthport plc
("Earthport", the "Company" or the "Group")
Restatement of Fair Value Adjustments
Earthport (AIM: EPO.L), the leading payment network for
cross-border transactions, today provides an update regarding the
restatement of fair value adjustments relating to Earthport FX
Limited (previously Baydonhill) ahead of the announcement of its
preliminary results for the year ended 30 June 2018, which are
scheduled to be released later this month.
Following the appointments of Amanda Mesler and Alexander
Filshie, as CEO and CFO respectively, a review has been conducted
of the accounting for forward foreign exchange transactions in one
of the Group's subsidiaries, EPFX Limited. As a result of this
review, the Board has become aware of a number of reporting errors
relating to the incorrect treatment of forward foreign exchange
contracts in prior years.
These accounting errors were identified as part of the review of
Earthport's reporting system and controls and management and the
Board are in the process of implementing internal control and
reporting improvements to prevent the recurrence of such
errors.
The review has resulted in prior year adjustments as follows: a
GBP0.2 million increase in the fair value loss, to GBP5.0 million,
in the year ended 30 June 2017: a reduction in the net assets of
the Group by GBP6.3 million to GBP16.6 million as at 30 June 2017:
a reduction in the net assets of the Group by GBP6.2 million to
GBP24.3 million as at 30 June 2016. These prior year adjustments do
not affect the current cash position of the Group. They do,
however, reduce the Group's previously reported retained earnings
at 30 June 2017 by GBP6.3 million to GBP(158.3) million.
As announced in the trading update released on 25 July 2018, the
underlying financial performance of the Group for the year ended 30
June 2018 remains unchanged as outlined below:
-- Revenue grew by approximately 5.3% to GBP31.9 million (FY 2017: GBP30.3 million);
-- Adjusted gross margin decreased by 1.2% to 67.1% (compared to
68.3% in FY 2017) due to network delivery costs and mix of
business;
-- Administrative expenses increased by approximately 9.1% to
GBP28.8 million (FY 2017: GBP26.4 million), representing 90% of
revenues (FY 2017: 87%);
-- The loss after tax for FY 2018 was approximately GBP7.7
million (FY 2017: GBP12.2 million - previously reported loss for FY
2017 of GBP12.1 million, adjusted by fair value adjustment
restatement).
-- The cash Balance at 30 June 2018 amounted to GBP28.3 million,
compared to GBP11.9 million at 30 June 2017. This includes net
proceeds of GBP24 million raised in October 2017.
Earthport's preliminary results will be released in November
2018 and a Notice of Results announcement will be issued in due
course.
For further information, please contact:
Earthport Plc 020 7220 9700
Amanda Mesler, Chief Executive Officer
Alexander Filshie, Chief Financial Officer
Newgate 020 7653 9848
Bob Huxford/Ian Silvera/Imogen Humphreys
N+1 Singer (Nomad & Joint Broker) 020 7496 3000
Mark Taylor/James White
Shore Capital (Joint Broker) 020 7408 4090
Toby Gibbs/Stephane Auton
About Earthport
Earthport provides cross-border payment services to banks and
businesses. Through a single relationship with Earthport, clients
can seamlessly manage payments to almost any bank account in the
world, reducing costs and complexity to meet their customers'
evolving expectations of price, speed and transparency.
Earthport offers clients access to global payment capability in
200+ countries and territories, with local ACH options in 88
countries and an evolving suite of currencies and settlement
options.
Earthport continues to invest in the establishment of in-country
bank partnerships across the world, bringing together its deep
market and regulatory expertise in order to maintain compliant and
commercially competitive services.
The result - a global payments network accessed via a single
relationship, delivering significant cost and operating
efficiencies for banks and businesses servicing high volumes of
lower value payments.
Headquartered in London with regional offices in New York,
Dubai, Miami and Singapore, Earthport is a public company, traded
on the London Stock Exchange (AIM: EPO).
Please visit www.earthport.com for more information.
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END
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