TIDMEPO
RNS Number : 0106A
Earthport PLC
21 March 2017
21 March 2017
Earthport plc
("Earthport", the "Company" or the "Group")
Unaudited Interim Results
Earthport (AIM: EPO.L), the leading network for cross-border
payments, is pleased to announce its unaudited interim results for
the six month period ended 31 December 2016.
Financial Highlights
-- Revenues grew by 34.9% to GBP14.3 million (H1 FY 2016: GBP10.6 million)
o Transactional revenues comprised 95% of H1 FY 2017 total
revenues
-- Gross profit increased by 33.8% to GBP9.9 million (H1 FY
2016: GBP7.4 million). Gross profit margin decreased by 0.6% to
69.2% (H1 FY 2016: 69.8%)
-- Adjusted Gross Margin(1) decreased by 3.1% to 70.4% (H1 FY
2016: 73.5%), due to increases in network costs but is in line with
management expectations and those achieved in the financial year
ended 30 June 2016
-- Adjusted Gross Profit(1) increased by 29.5% to GBP10.1 million (H1 FY 2016: GBP7.8million)
-- Administrative expenses decreased by 7.8% to GBP13.0 million
(H1 FY 2016: GBP14.1 million) and represent 90.9% of revenues (H1
FY 2016: 133.0%)
-- Adjusted loss before taxation(2) decreased by 52.2 % to
GBP3.2 million (H1 FY 2016: GBP6.7 million)
-- Loss before taxation decreased by 41.1% to GBP3.3 million (H1 FY 2016: GBP5.6 million)
-- Loss per share of 0.61 pence (H1 FY 2016: 1.30 pence)
-- Cash Balance at 31 December 2016 amounted to GBP11.4 million,
compared to GBP14.4 million at 30 June 2016
1. Excludes warrant charge of GBP0.23 million (H1 FY2016: GBP0.38 million)
2. Adjusted loss before taxation is stated before the unrealised
fair value gain adjustment of GBP0.94 million (H1 FY 2016: 1.3
million) and share based payment charge of GBP1.1 million (H1 FY
2016: 0.3 million)
Operational Highlights
-- Transactions and payment volume grew significantly in the
period with December 2016 setting a record month in the Company's
history
o Number of transactions reached 5 million, a growth of
approximately 85% over the prior year period (H1 FY 2016: 2.7
million)
o Payment volume increased by 97% to $7.80 billion (H1 FY 2016:
$3.95 billion)
-- The variation in growth rates of number of transactions and
revenues principally reflects the geographical mix of transactions
and the associated variability in transaction price per
corridor
o Revenue per transaction in the period was GBP2.70 (H1 FY 2016:
GBP3.26)
-- Bank of America Merrill Lynch (BofAML) CashPro(R) offering
using the Earthport network went live in February 2017 as part of
the broader strategic relationship with Bank of America Merrill
Lynch
-- In November 2016, Earthport announced the approval from the
Reserve Bank of India to operate cross-border payment services for
banks in India
o Axis Bank, India's third largest private sector bank is the
first bank in the region to connect with Earthport
Hank Uberoi, CEO of Earthport plc, commented:
"We accomplished a number of important developments in the six
months under review, including expanding our strategic relationship
with BofAML and gaining approval to provide outbound payment
services for the extensive Indian market. The performance of the
business in the past six months has been encouraging with a
substantial increase in the number of transactions and payment
volumes resulting in strong revenue growth. This positive momentum,
coupled with our unique market positioning, gives us confidence in
our continued growth and prospects."
For further information, please contact:
Earthport plc 020 7220 9700
Hank Uberoi, Chief Executive Officer
Simon Adamiyatt, Chief Financial Officer
Newgate 020 7653 9848
Bob Huxford / James Ash
N+1 Singer (Nomad and Joint Broker) 020 7496 3000
Mark Taylor / James White
Shore Capital (Joint Broker) 020 7408 4090
Bidhi Bhoma/ Toby Gibbs
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
190+ countries and territories, with local ACH (Automated Clearing
House) options in 60+ 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.L) with an institutional
investor base including World Bank IFC, Oppenheimer, Blackrock,
Henderson.
Please visit www.earthport.com for more information.
Overview
In H1 FY 2017, we delivered strong revenue growth and continue
to make consistent progress on our strategy, by further deepening
our relationships with customers, extending our market reach, and
developing our technology, unique product offerings, compliance
processes and people capabilities. We are continuing to capitalise
on our strong market position as the leading cross-border payment
solutions provider.
Our strategy is focused on helping our customers to prosper, by
using our payments expertise and insight to increase their sales,
and reduce their costs and risk. It is designed to ensure the
continued success of our business in a competitive and rapidly
changing market, in order to deliver sustainable value to our
customers, colleagues and shareholders.
During the period Earthport successfully extended its global
network across different geographies and industries and is
developing a strong pipeline of opportunities. We expect that
realising the full potential of our business model and strategy
will drive robust, visible and recurring organic revenue growth
over the medium and long term.
Financial Review
During the period the number of transactions increased by
approximately 85% to 5 million (H1 FY 2016: 2.7 million) and
payment volumes grew by 97% to $7.80 billion (H1 FY 2016: $3.95
billion). Transactional and payment volumes were the highest in the
Company's history in December 2016 and have continued to increase
during the first two months of H2 FY 2017.
Revenues grew by 35% to GBP14.3 million (H1 FY 2016: GBP10.6
million) with 95% of H1 FY 2017 revenues being transactional
revenues. The increase is predominantly from existing customers, as
the service becomes more robust, as well as the continued expansion
of our global network and a significant growth of ecommerce
payments. The variation in growth rates of number of transactions
and revenues principally reflects the geographical mix of
transactions and the associated variability in transaction price
per corridor. During the period, the Company saw a significant
contribution from the European corridor which has a lower price per
transaction. It is important to note that the company's gross
margin has remained consistent at approximately 70%.
The Adjusted Gross Margin decreased by 3.1% to 70.4% (H1 FY
2016: 73.5%) due to increases in network costs, but is in-line with
the management expectations and those achieved in the financial
year ended 30 June 2016. Gross Profit for the period increased by
34% to GBP9.9 million (H1 FY 2016: GBP7.4 million).
Administrative expenses decreased by 7.8% to GBP13.0 million (H1
FY 2016: GBP14.1 million), mainly resulting from operational
efficiency and the restructuring of certain parts of the business
completed in the prior financial year.
Adjusted Loss before Taxation, excluding share based payment
charges of GBP1.1 million (H1 FY 2016: GBP0.3 million) and
unrealised fair gain value of GBP0.94 million (H1 FY 2016: GBP1.3
million) decreased by 52.2% to GBP3.2 million (H1 FY 2016: GBP6.7
million).The unrealised fair value adjustment of GBP0.9 million
arises on the translation of unsettled transactions at 31 December
2016 and this gain would only crystallise in the event that any
parties to the transactions defaulted.
The reported loss before taxation decreased by 41.1% to GBP3.3
million (H1 FY 2016: GBP5.6 million).
Loss per share decreased by 53.1% to 0.61 pence (H1 FY 2016:
1.30 pence).
Net cash used in operating activities decreased by 59.2% to
GBP2.0 million (H1 FY 2016: GBP4.9 million), reflecting the Board's
focus on cash used in operations versus revenue growth. The Cash
Balance at 31 December 2016 amounted to GBP11.4 million, compared
to GBP14.4 million at 30 June 2016 (H1 FY 2016: GBP24.1
million).
Recovery activities related to the GBP5m loss continue,
involving law enforcement and insurance companies. There can be no
certainty about the likelihood, amount or timing of any recovery in
connection with this loss.
Operational and Network Review
Earthport continues to hold the premier position as one of the
most versatile and trusted cross-border payments provider among
banks, eCommerce companies, Money Transfer Organisations, and
payments aggregators.
The Company launched client relationships with a number of new
banks and business enterprises across the world in H1 FY17.
In November 2016, the Reserve Bank of India ("RBI") granted
Earthport approval for operating outbound cross border payment
services for banks in India. The subsequent agreement with Axis
Bank, one of India's most prominent systemic financial
institutions, was the first organisation in the region to entrust
Earthport with their cross-border payments business.
Bank of America Merrill Lynch launched its CashPro(R) service,
which utilises the Earthport network, in February 2017. This
service will add new countries and currencies to the bank's online
and file-based banking portal, CashPro(R), further expanding the
bank's international ACH payment capabilities. BofAML clients can
now access cross currency payments in more than 60 countries and
nearly 25 currencies. This expanded access represents a significant
development of the strategic relationship between Earthport and
BofAML that was first announced in 2013.
The Company continues to execute upon its growth strategy
to:
o Expand geographically including India and other Emerging
Markets
o Improve internal processes and enhance technology
infrastructure
o Augment our network resilience by establishing relationships
with additional partner banks
o Enhance our service offerings with the development of new
products such as an Enhanced FX Offering, Faster Payments, Global
Receivables, Alias Payments, Global Treasury Netting, and further
expanding the Distributed Ledger offering
Earthport continues to grow its network, providing its clients
with additional routes and destinations. The Company executes
payments across 181 countries and destinations in 51
currencies.
Board and Management changes
During the period, Sajeev Viswanathan stepped down from the
board on 3(rd) November 2016 as an Executive Director to pursue
other opportunities and Dr Caroline A. Brown joined Earthport's
Board on 17 January 2017 as an Independent Non-Executive
Director.
Dr Brown is an experienced finance executive and board member of
listed companies. She currently chairs the audit committee of
Luceco plc, an industrial technology business, which was admitted
to trading on the Main Market of the London Stock Exchange in
October 2016. Dr Brown is a qualified accountant and has also
worked in corporate finance at Merrill Lynch, UBS and HSBC.
Michael R. Steinharter also joined Earthport on 3 November 2016
in the new position of Chief Commercial Officer. Mike brings a
great range of experience to Earthport, building, managing and
growing successful sales organisations at some of the largest and
most respected technology service companies. Among his many roles,
Mike spent over 20 years selling to the financial services sector
at IBM with significant management responsibility in New York,
London, and Sydney. Mike has also served as president of Reuters
America and built a significant financial services practice at
Computer Sciences Corporation (CSC).
Outlook
Earthport's performance in H1 FY 2017 reflects its continued
progress as the leading cross-border payments company and the
Company will continue to invest in its operational platform to
ensure platform scalability and resilience as well as expanding its
geographical presence and product capabilities.
The number of transactions processed and payments volumes have
continued to increase month on month in January and February 2017
and the Board expects these core operational metrics to continue to
improve in the second half of the fiscal year.
Given current business and operational trajectory, the Board
remains confident that FY 2017 revenues and year end cash balance
will be broadly in-line with market projections. In addition, the
Board is focused on balancing its objective of becoming cash flow
breakeven whilst addressing the significant demand emerging due to
our strong market position. While cash usage is continuing to
decrease, we will not achieve cash flow breakeven in Q4 FY 2017, as
previously communicated in order to capitalise on these
opportunities.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 31 December 2016
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Dec 31 Dec 30 Jun
2016 2015 2016
Continuing operations: Notes GBP'000 GBP'000 GBP'000
Revenue 14,335 10,612 22,772
Cost of sales (4,250) (2,809) (6,849)
---------- ---------- ----------
Adjusted gross profit 10,085 7,803 15,923
Cost of sales - warrant
charge (229) (379) (578)
---------- ---------- ----------
Gross profit 9,856 7,424 15,345
Administrative expenses (13,017) (14,105) (25,780)
---------- ---------- ----------
Adjusted operating loss (3,161) (6,681) (10,435)
Share-based payment charge (1,058) (287) (620)
Unrealised fair value
gain 11 939 1,333 8,224
Exceptional item - EarthportFX
(Baydonhill) loss - - (5,000)
Exceptional item - impairment
of available for sale
investment - - (250)
Operating loss (3,280) (5,635) (8,081)
Finance income 3 13 20
Decrease in contingent
consideration liability
due to amendment as per
the CVR deed - - 842
---------- ---------- ----------
Loss before taxation (3,277) (5,622) (7,219)
Income tax credit/(expense) 393 (469) (996)
---------- ---------- ----------
Loss for the period and
total comprehensive income
attributable to owners
of the parent (2,884) (6,091) (8,215)
========== ========== ==========
Loss per share attributable
to the owners of the parent
- basic and diluted 4 (0.61p) (1.30p) (1.74p)
========== ========== ==========
There were no items of other comprehensive income for the
year.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 31 December 2016
Unaudited Unaudited Audited
as at as at as at
31 Dec 31 Dec 30 Jun
2016 2015 2016
Notes GBP'000 GBP'000 GBP'000
Non-current assets
Goodwill 2,709 2,709 2,709
Intangible assets 5,917 6,312 6,249
Investment - 273 -
Property, plant and equipment 484 604 597
9,110 9,898 9,555
----------- ----------- ----------
Current assets
Trade and other receivables 5 12,892 4,102 11,290
Derivative financial assets 5,051 2,197 6,253
Cash and cash equivalents 11,375 24,154 14,429
----------- ----------- ----------
29,318 30,453 31,972
----------- ----------- ----------
Total assets 38,428 40,351 41,527
Current liabilities
Trade and other payables 6 (4,077) (3,326) (5,676)
Derivative financial liabilities (1,796) (750) (1,368)
Earn-out consideration (135) - (2,295)
(6,008) (4,076) (9,339)
----------- ----------- ----------
Non-current liabilities
Earn-out consideration - (3,292) -
Deferred tax liability (1,283) (879) (1,676)
----------- ----------- ----------
(1,283) (4,171) (1,676)
----------- ----------- ----------
Total liabilities (7,291) (8,247) (11,015)
NET ASSETS 31,137 32,104 30,512
=========== =========== ==========
Equity
Capital and reserves
Ordinary shares 7 71,834 70,738 70,738
Share premium 8 79,120 78,331 78,064
Interest in own shares 9 (883) (1,220) (953)
Merger reserve 9,200 9,200 9,200
Share-based payment reserve 13,085 12,647 12,164
Warrant reserve 1,852 1,424 1,623
Retained earnings (143,071) (139,016) (140,324)
EQUITY ATTRIBUTABLE TO 31,137 32,104 30,512
=========== =========== ==========
OWNERS OF THE PARENT
CONSOLIDATED STATEMENT OF CASH FLOWS
for the six months ended 31 December 2016
Restated
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Dec 31 Dec 30 Jun
2016 2015 2016
Notes GBP'000 GBP'000 GBP'000
Net cash used in operating
activities 10 (2,031) (4,946) (12,388)
Investing activities
Purchase of property,
plant and equipment (99) (129) (392)
Capitalised intangible
fixed assets (924) (1,077) (2,265)
Purchase of trade investment - (23) -
Part payment of contingent
consideration - - (855)
Net cash used in investing
activities (1,023) (1,229) (3,512)
Financing activities
Proceeds on exercise
of options - 134 134
Net cash from financing
activities - 134 134
Net decrease in cash
and (3,054) (6,041) (15,766)
cash equivalents
Cash and cash equivalents
at the beginning of
the period 14,429 30,195 30,195
---------- ---------- ----------
Cash and cash equivalents
at the end of the period 11,375 24,154 14,429
========== ========== ==========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 31 December 2015 (Unaudited)
Attributable to the owners of the Parent
Interest Share-based
Share Share In own Merger Payment Warrant Retained
Capital Premium Shares Reserve Reserve Reserve Earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
July 2015 70,695 78,272 (1,252) 9,200 12,557 1,045 (133,122) 37,395
------- ------- -------- ------- ----------- ------- --------- --------
Loss for the
period, being
total
comprehensive
income for
the period - - - - - - (6,091) (6,091)
Transactions
with owners
Share-based
payments
- employee share
options 43 59 32 - (197) - 197 134
* employee share options charge - - - - 287 - - 287
- warrants - - - - - 379 - 379
Total
transactions
with owners of
the Parent,
recognised
directly in
equity 43 59 32 - 90 379 (5,894) (5,291)
Balance at 31
December 2015 70,738 78,331 (1,220) 9,200 12,647 1,424 (139,016) 32,104
------- ------- -------- ------- ----------- ------- --------- --------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 31 December 2016 (Unaudited)
Attributable to the owners of the Parent
Interest Share-based
Share Share In own Merger Payment Warrant Retained
Capital Premium Shares Reserve Reserve Reserve Earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
July 2016 70,738 78,064 (953) 9,200 12,164 1,623 (140,324) 30,512
------- ------- -------- ------- ----------- ------- --------- --------
Loss for the
period, being
total
comprehensive
income for
the period - - - - - - (2,884) (2,884)
Transactions
with owners
Share-based
payments
- employee share
options - (70) 70 - (137) - 137 -
* employee share options charge - - - - 1,058 - - 1,058
- warrants - - - - - 229 - 229
Issue of ordinary
shares
- CVR holders 1,080 1,080 - - - - - 2,160
Issue of ordinary
shares
- in lieu of
fee 16 46 - - - - - 62
Total
transactions
with owners of
the Parent,
recognised
directly in
equity 1,096 1,056 70 - 921 229 (2,747) 625
Balance
at
31
December
2016 71,834 79,120 (883) 9,200 13,085 1,852 (143,071) 31,137
------- ------- -------- ------- ----------- ------- --------- --------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Year ended 30 June 2016 (Audited)
Interest Share-based
Share Share In own Merger Payment Warrant Retained
Capital Premium Shares Reserve Reserve Reserve Earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
July 2015 70,695 78,272 (1,252) 9,200 12,557 1,045 (133,122) 37,395
------- ------- -------- ------- ----------- ------- --------- --------
Loss for the
year, being total
comprehensive
Income for the
year - - - - - - (8,215) (8,215)
Transactions
with owners
Share-based payments
- employee share
options 43 (208) 299 - (1,013) - 1,013 134
- employee share
options charge - - - - 620 - - 620
- warrants - - - - - 578 - 578
Total
transactions
with owners of
the Parent,
recognised
directly in
equity 43 (208) 299 - (393) 578 (7,202) (6,883)
Balance at
30 June 2016 70,738 78,064 (953) 9,200 12,164 1,623 (140,324) 30,512
------- ------- -------- ------- ----------- ------- --------- --------
notes to the UNAUDITED INTERIM results
for the six months ended 31 December 2016
1. GENERAL INFORMATION
Earthport plc is a public limited company listed on the AIM
Market of London Stock Exchange, incorporated and domiciled in the
England and Wales under the Companies Act 2006. The address of its
principal place of business and registered office is 140 Aldersgate
Street, London EC1A 4HY.
2. GOING CONCERN
The interim financial information has been prepared on the
assumption that the Group is a going concern.
When assessing the foreseeable future the directors have looked
at a period of twelve months from the date of approval of the
interim financial information. The directors believe that the Group
has demonstrated further progress in achieving its objective of
positioning the Group as an infrastructure supplier to the global
payments industry, and with net cash used in the operating
activities having decreased significantly to GBP2.0 million in the
six month period to 31 December 2016 compared with GBP4.9 million
for the six month period to 31 December 2015 as well as revenue
growth of 35%, the directors consider that it is appropriate to
prepare the Group's interim financial information on a going
concern basis, which assumes that the Company is to continue in
operational existence for the foreseeable future.
3. ACCOUNTING POLICIES
Basis of preparation
The interim financial information is prepared using accounting
policies consistent with International Financial Reporting
Standards ("IFRS") as adopted by the European Union.
The financial statements have been prepared under the historical
cost convention and the principal accounting policies are set out
in the 30 June 2016 financial statements.
notes to the UNAUDITED INTERIM results
for the six months ended 31 December 2016
4. LOSS PER SHARE
Loss per share is calculated by dividing the loss attributable
to equity holders of the Company by the weighted average number of
ordinary shares in issue during the period.
Unaudited Unaudited Audited
6 months 6 months 12 months
ended Ended ended
31 Dec 31 Dec 30 Jun
2016 2015 2016
GBP'000 GBP'000 GBP'000
Loss attributable to
owners of the parent (2,884) (6,091) (8,215)
========== ========== ==========
Number Number Number
Weighted average number
of ordinary shares in
issue (thousands) 478,227 476,458 476,674
Less: own shares held
(thousands) (4,958) (6,926) (5,369)
---------- ---------- ----------
473,269 469,532 471,305
========== ========== ==========
Basic and fully diluted
loss per share (pence) (0.61p) (1.30p) (1.74p)
========== ========== ==========
The loss attributable to Ordinary shareholders and weighted
average number of ordinary shares for the purposes of calculating
the diluted loss per share are identical to those used for basic
loss per ordinary share. This is because the exercise of share
options and other benefits would have the effect of reducing loss
per share and is therefore not dilutive under the terms of IAS33
"Earnings per share".
notes to the UNAUDITED INTERIM results
for the six months ended 31 December 2016
5. TRADE AND OTHER RECEIVABLES
Unaudited Unaudited Audited
as at as at as at
31 Dec 2016 31 Dec 2015 30 Jun 2016
GBP'000 GBP'000 GBP'000
Trade receivables 9,443 2,610 8,349
Other receivables 2,535 968 2,246
Prepayments 914 628 695
------------ ------------ ------------
12,892 4,206 11,290
Less: Provision for impairment - (104) -
------------ ------------ ------------
Trade and other receivables 12,892 4,102 11,290
============ ============ ============
Trade receivables are comprised of two components; amounts
receivable from clients in the normal course of business (GBP2.9
million), as well as amounts related to forward foreign exchange
contract payments executed with clients with the notional (GBP6.5
million) amount. These forward foreign exchange contracts are fair
valued in accordance with IAS 39 Financial Instruments: IAS 39
outlines the requirements for the recognition and measurement of
financial assets, financial liabilities, and some contracts to buy
or sell non-financial items. Financial instruments are initially
recognised when an entity becomes a party to the contractual
provisions of the instrument, and are classified into various
categories depending upon the type of instrument, which then
determines the subsequent measurement of the instrument.
6. TRADE AND OTHER PAYABLES
Unaudited Unaudited Audited
as at as at as at
31 Dec 2016 31 Dec 2015 30 Jun 2016
GBP'000 GBP'000 GBP'000
Trade payables 1,270 668 2,117
Other payables - 3 312
Other taxation and social security 312 290 334
Accruals and deferred income 2,495 2,365 2,913
------------ ------------ ------------
4,077 3,326 5,676
============ ============ ============
Trade payables and accruals principally comprise amounts
outstanding in respect of operating costs. The average credit
period taken for trade purchases is 35 days (H1 FY 2016: 33 days).
The directors consider that the carrying amounts for trade and
other payables approximate their fair value.
notes to the UNAUDITED INTERIM results
for the six months ended 31 December 2016
7. SHARE CAPITAL
Authorised
The Articles of Association were amended on 24 March 2010. The
Company has no authorised share capital limit.
Issued
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Dec 2016 31 Dec 2015 30 Jun 2016
GBP'000 GBP'000 GBP'000
At start of period 47,679 47,636 47,636
Shares issued in the period 1,080 43 43
Shares issues in lieu of consultancy fees 16 - -
At end of period 48,775 47,679 47,679
Deferred shares 23,059 23,059 23,059
------------ ------------ -------------
Total 71,834 70,738 70,738
============ ============ =============
During the period on 15 November 2016: 10,797,671 (H1 FY 2016:
432,488) ordinary shares of 10p were issued to the holders of
Contingent Value Rights from the 2013 acquisition of Baydonhill plc
(On 1 July 2016, the name was changed to EarthportFX Limited), and
155,836 (H1 FY 2016: Nil) ordinary shares of 10p were issued in
lieu of consultancy fees.
Deferred shares carry no rights to receive any dividend nor
other distribution. The holders of the deferred shares have no
rights to receive notice, nor attend, speak or vote at any general
meeting of the Company. On a return of capital on liquidation or
otherwise, the holders of the deferred shares are entitled to
receive the nominal amount paid up on the deferred shares after the
repayment of GBP10,000,000 per ordinary share.
notes to the UNAUDITED INTERIM results
for the six months ended 31 December 2016
8. SHARE PREMIUM
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Dec 2016 31 Dec 2015 30 June 2016
GBP'000 GBP'000 GBP'000
At start of period 78,064 78,272 78,272
New issue 1,080 - -
Exercise of share options - 59 91
Transfer to interest in own shares (70) - (299)
Share issue in lieu of consultancy fees 46 - -
------------ ------------ -------------
At end of period 79,120 78,331 78,064
============ ============ =============
9. INTEREST IN OWN SHARES
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Dec 2016 31 Dec 2015 30 June 2016
GBP'000 GBP'000 GBP'000
At start of period (953) (1,252) (1,252)
Exercise of share options 70 32 299
At end of period (883) (1,220) (953)
============ ============ =============
notes to the UNAUDITED INTERIM results
for the six months ended 31 December 2016
10. RECONCILIATION OF LOSS BEFORE TAX TO NET CASH OUTFLOW FROM
OPERATING ACTIVITIES
Restated
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Dec 2016 31 Dec 2015 30 Jun 2016
GBP'000 GBP'000 GBP'000
Loss before tax (3,277) (5,622) (7,219)
Amortisation of intangible assets 1,256 1,171 2,422
Depreciation of property, plant and equipment 212 234 504
Share-based payment charge and warrant 1,287 666 1,198
charge
Shares issued in lieu of consultancy fees 62 - -
R & D Tax Credit Received - - 270
Finance income (3) (13) (20)
Contingent consideration - - (842)
Impairment of available for sale investment - - 250
------------ ------------ ------------
Operating cash out flow before movements in (463) (3,564) (3,437)
working capital
(Increase)/Decrease in receivables (400) 3,006 (7,538)
Decrease in payables (1,171) (4,401) (1,433)
------------ ------------ ------------
Cash used by operations (2,034) (4,959) (12,408)
Interest received 3 13 20
------------ ------------ ------------
Net cash used in operating activities (2,031) (4,946) (12,388)
============ ============ ============
notes to the UNAUDITED INTERIM results
for the six months ended 31 December 2016
11. UNREALISED FAIR VALUE ADJUSTMENT
In accordance with IAS 39, the Group fair valued all currency
bank accounts (excluding client bank accounts) and forward foreign
exchange contracts. The fair value revaluation of such receivables,
payables and currency accounts gave rise to an unrealised gain of
GBP2.6 million (H1 FY 2016: loss of GBP1.9 million). All forward
foreign exchange contracts executed with clients are hedged with
bank forward foreign exchange contracts and as a result, the fair
value revaluation generated a net derivative unrealised loss of
GBP1.6 million (H1 FY 2016: gain of GBP3.2 million).
Treasury hedge client forward transactions through mirror hedge
bank trades on the amount, however the maturity date of these hedge
trades can sometimes differ from date of the original client trade.
This is industry practice to ensure the business manages the open
drawdown schedule nature associated with these client forward
transactions in combination with remaining within prescribed credit
line limits provided by the bank liquidity providers. On
settlement/maturity of the contract there is no P&L effect,
however while the contracts are open and the hedge has a different
maturity date, there is a mark to market which leads to an
unrealised fair value gain or loss. These gains and losses would
only crystallise in the event that any parties to the transaction
default.
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Dec 2016 31 Dec 2015 30 June 2016
GBP'000 GBP'000 GBP'000
Foreign exchange gain/(loss) 2,569 (1,904) 1,549
Fair value (loss)/gain on derivatives (1,630) 3,237 6,675
Total 939 1,333 8,224
============ ============ =============
notes to the UNAUDITED INTERIM results
for the six months ended 31 December 2016
12. PUBLICATION OF NON-STATUTORY FINANCIAL STATEMENTS
The results for the six months ended 31 December 2016 and 31
December 2015 are unaudited and have not been reviewed by the
auditor. The results for the year ended 30 June 2016 included in
this announcement do not constitute statutory financial statements
as defined in section 434 of the Companies Act 2006, but have been
derived from the full audited financial statements for the year
ended 30 June 2016. Statutory accounts for the year ended 30 June
2016, on which the auditors gave an audit report which was
unqualified and did not contain a statement under section 498(2) or
(3) of the Companies Act 2006, have been filed with the Registrar
of Companies.
The interim financial information has been prepared on the basis
of the same accounting policies as published in the audited
financial statements for the year ended 30 June 2016 and the
accounting policies to be adopted in the financial statements for
the year ended 30 June 2017. The annual financial statements of the
Group are prepared in accordance with International Financial
Reporting Standards and International Financial Reporting
Interpretations Committee ("IFRIC") pronouncements as adopted by
the European Union. Comparative figures for the year ended 30 June
2016 have been extracted from the statutory financial statements
for that period.
13. The interim results for the six months ended 31 December
2016 are available on the Company's website: www.earthport.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR PGUMWWUPMPUU
(END) Dow Jones Newswires
March 21, 2017 03:01 ET (07:01 GMT)
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