TIDMMPAY
RNS Number : 5324N
Mi-Pay Group PLC
25 September 2019
25 September 2019
Mi-Pay Group plc
('Mi-Pay', the 'Group', or the 'Company')
Interim Results
Mi-Pay (AIM: MPAY), a leading provider of digital
transformation, mobile payment and payment fraud management
solutions to Tier 1 Mobile Network Operators, Mobile Virtual
Network Operators and digital content providers, is pleased to
present its unaudited interim results for the six months ended 30
June 2019.
Operational Highlights
-- Renewed contracts with 2 major Clients:
o 2-year extension to 31 March 2022 with our largest client (31%
of annual revenue in 2018).
o 5-year extension from 1 January 2019 with our third largest
client (12% of annual revenue in 2018).
-- Continued to deliver operational excellence with high payment
success rates and low fraud levels.
-- Delivered an 85% reduction in payment fraud levels within our
direct managed fraud service resulting in a 46% gross margin (H1
2018: 7%).
-- Significant investment in delivering Mi-Pay's full compliance
to the new European wide payment regulation framework PSD2 (Payment
Services Directive) ahead of the majority of the market and the
implementation date, mitigating our clients' risks.
Financial Highlights
-- Delivered a 15% increase in fully managed payments to GBP58.1
million (H1 2018: GBP50.2 million).
-- Successfully managed and indemnified GBP29.2 million of
payments for fraud versus GBP17.8 million for the first 6 months of
2018, driving an increase in revenue of GBP0.1 million.
-- Total revenue recognised in the period was GBP1.7 million (H1 2018: GBP1.6 million).
-- Total gross margin remained strong at 63% (H1 2018: 62%).
-- Total gross profit increased to GBP1.1 million (H1 2018: GBP1.0 million).
-- Administrative expenses flat at GBP1.1 million (H1 2018:
GBP1.1 million) despite continuing volume growth.
-- Approximately breakeven at EBITDA level (H1 2018: GBP0.1 million loss).
-- Cash & cash equivalents as at 30 June 2019 remained at
GBP3.1 million (30 June 2018: GBP3.1 million).
-- Operational cash outflow for the period of GBP0.2 million (H1
2018: GBP0.3 million outflow) which is expected to be offset post
period end by the receipt of a GBP0.3 million annual research and
development tax credit in October 2019.
-- Basic and diluted loss per share 0.2 pence (H1 2018: 0.3 pence loss per share).
Michael Dickerson, Chairman of Mi-Pay Group plc commented:
"In the six-month period to 30 June 2019, we delivered further
growth as consumers transferred to our on-line digital payment
services, building on our previous periods of growth to EBITDA
profitability. We are pleased to have further supported this by
extending two of our major contracts and expect these clients to
increase their volumes over the longer term. Our growth has enabled
us to maintain our EBITDA break-even position for the 12 months to
30 June 2019.
We have continued to invest in delivering new market compliance
regulations and are well placed to take advantage of the ongoing
uncertainty this is bringing. Short-term growth is impacted by this
uncertainty and the previously announced Client consolidation. Over
the longer term, we expect to continue to build on our long term,
naturally growing transaction flows and proven ability to deliver
our secure payment services into the expanding and increasingly
complex e-commerce market, underpinned with our ongoing investment
in our solutions and our free cash position."
For further information, please contact:
Mi-Pay Group plc Allenby Capital Limited
Tel: +44 207 112 2129 Tel: +44 203 328 5656
Michael Dickerson, Chairman James Reeve
John Beale, CEO Asha Chotai
Chief Executive Officer's review
H1 2019 Operational Review
Trading
We have continued to grow and have now delivered an
approximately breakeven Earnings Before Interest, Tax and
Depreciation (EBITDA) for the 12 months to June 2019 (GBP0.3
million loss for the 12 month period to June 2018).
Our processed payment transactions grew during the period to
GBP58.1 million (H1 2018: GBP50.2 million) driven from existing
clients. The period under review represents our tenth consecutive
six-month period of growth in terms of payment values processed,
and this growth was underpinned by the renewal and extension of two
of our major clients' contracts. Our fully indemnified payment
fraud management service delivered GBP0.2m million of revenue in
the period (H1 2018: GBP0.1 million), from GBP29.2 million of
payment transactions (H1 2018: GBP17.8 million). We achieved gross
profit margins of 46% on our revenue of GBP0.2 million (H1 2018:
7%) as we continued to enhance the solution.
Our professional services revenue remained flat at GBP0.2
million for the period and continues to be supported by our secure
card vault solution that collects and processes all the payment
transactions for a major UK Mobile Network Operator, securely
transferring over GBP292 million of payments in the period (H1
2018: GBP264 million).
Our total revenue therefore increased to GBP1.7 million (H1
2018: GBP1.6 million) against which we continued to deliver strong
gross profit margins of 63% (H1 2018: 62%).
Whilst we have continued to grow over the period and secured
over 43% of our 2018 revenues in longer contracts, it is
disappointing that, due to an internal restructure, during
September 2019 one of our larger clients (13% revenue in 2018)
consolidated their payment transactions to another existing
provider as they restructure and downsize their own operation. When
combined with the slowing of new business growth due to the market
challenges with new legislation, this will affect our full year
performance growth expectations. Over the longer term, we will
continue to build on our naturally growing client base and have
taken positive action in relation to budgets and spending to
mitigate such losses to seek to ensure that the Group remains
EBITDA positive and continues to invest in and develop its
solutions.
From an investment and market perspective, we have continued to
invest and develop the key areas of the business, which we are able
to do efficiently with our in-house teams:
Payment Compliance and Optimisation
From September 2019, the new Payment Services Directive (PSD2)
comes into effect across Europe, which affects all e-commerce
payment providers. The regulation has required significant internal
development to ensure we protect our Clients and retain compliance.
We are on track and expect to meet all requirements in full.
However, it is clear that many areas of the payment market will not
be compliant in the original targeted timeframe and, as such, we
expect to see a challenging period of adoption in H2 2019 and into
2020. We have ensured Mi-Pay is in a strong position to take
advantage of these new opportunities to support retailers and
solution providers struggling to navigate the challenges. We will
monitor this closely and adapt accordingly. Regulators have
recently announced delays of up to 18 months on this directive and
as such we expect short term impacts to be reduced.
Payment Fraud Management
Whilst the new payment directives "Strong Customer
Authentication" mandates card issuers to adopt stronger consumer
authentication practices to prevent payment fraud risk, this
mandate excludes recurring, voice activated and low value
transactions; which are the majority of our managed payments.
Therefore, our current fraud management capability will remain
highly relevant in our market and, as such, we will continue to
invest and build on our market leading performance in the area of
payment risk management. We will continue to introduce new
additional capabilities to improve performance and enhance our
proven capability in optimising and managing risk in lower value,
high-risk transactions.
Business Intelligence
Given all the changes in the processing regime and its
increasing complexity, our Clients will need enhanced intelligence
on how their consumers use their service and the impact of the new
regulations. Through our systems we are able to provide deeper
analysis on consumer behaviour than more traditional payment
institutions and will look to use this to help drive new revenues
for the Company and help our Clients better understand their
e-commerce solutions.
The growth of our solution in Asia remains slow, however we
continue to work with our contracted client in the region to drive
growth via new payment methods and wider country expansion.
Financial Review
Unaudited Unaudited Audited
Six months Six months Year
ended 30 June ended 30 ended 31
2019 June 2018 Dec 2018
GBP GBP GBP
Payment Transaction Value Processed 58,066,174 50,216,383 105,968,398
Transaction Services Revenue 1,298,214 1,249,174 2,606,781
Fraud Services Revenue 203,833 134,486 329,602
Professional Services Revenue 176,267 180,379 400,642
Revenue 1,678,314 1,564,039 3,337,025
----------------------------------------- --------------- ------------ ------------
Transaction Services Gross profit 815,133 815,726 1,629,602
Fraud Services Gross profit 98,377 10,081 129,092
Professional Services Gross profit 137,231 144,807 320,894
Gross profit 1,050,741 970,614 2,079,588
Gross profit % 63% 62% 62%
----------------------------------------- --------------- ------------ ------------
Administrative expenses excluding
depreciation (1,083,874) (1,060,993) (2,181,144)
Adjusted Operating profit / (loss) (33,133) (90,379) (101,556)
----------------------------------------- --------------- ------------ ------------
Depreciation (65,655) (55,571) (120,345)
----------------------------------------- --------------- ------------ ------------
Operating profit / (loss) (98,788) (145,950) (221,901)
----------------------------------------- --------------- ------------ ------------
Cash and cash equivalents at beginning
of period 3,487,185 2,925,766 2,925,766
Cash (outflow) / inflow from management
of client payments (29,258) 342,337 569,322
Adjusted Net cash flow from operating
activities(1) (212,271) (315,584) (156,460)
Capital Expenditure (43,647) (12,223) (84,785)
Adjusted Cash flow from financing(2) (72,582) 205,446 233,342
Cash and cash equivalents at end
of period 3,129,427 3,145,742 3,487,185
Total equity attributable to the
equity shareholders of the parent 223,095 369,340 21,920
Basic and diluted loss per ordinary
share (0.2)p (0.3)p (0.5)p
----------------------------------------- --------------- ------------ ------------
(1)Adjusted Net cash flow from operating activities excludes
cash flows from the management of client payments, exceptional
items and GBP273,750 payments made to Directors for settlement of
deferred salaries, subsequently fully reinvested as Ordinary share
capital on 1 March 2018
(2)Adjusted Cash flow from financing excludes GBP273,750 cash
inflow from the settlement of deferred salaries, subsequently fully
reinvested as Ordinary share capital on 1 March 2018
Our strong performance in transaction volume growth and improved
fraud management performance drove revenues and gross profits up by
GBP0.1 million for the period, enabling us to deliver a gross
margin of 63% (H1 2018: 62%). Our overall margins remained
strong.
Our administrative expenses remained stable at GBP1.1 million
for the period (H1 2018: GBP1.1 million) as we continued to see the
benefits of cost reductions delivered in 2018. We will target
further efficiencies through better use of technology and align our
costs appropriately with revenue as we adjust to changes in the
market. The growth in gross profit led to an improvement in our
operating loss excluding depreciation, reducing from a GBP0.1
million loss in H1 2018 to GBPnil for the period, in line with our
expectations, following on from our H2 2018 breakeven EBITDA.
On our balance sheet, compared to as at 31 December 2018, our
trade and other receivables increased by GBP0.4 million due to
increases in amounts owed to us in relation to payment transactions
processed. This was offset in trade and other payables which also
increased by GBP0.4 million, reflecting the increased amounts due
to our Clients. There were no other material movements.
The Group ended the period with GBP3.1 million in cash and cash
equivalents (GBP3.5 million at 31 December 2018), noting that of
this balance, GBP2.8 million related to the management of client
payments (GBP2.9 million as at 31 December 2018). Excluding the
client related cash movements, cash outflow was GBP0.3 million in
the period, comprising:
-- GBP0.2 million outflow due to net operational expenditure
-- GBP0.1 million related to capital investment and lease payments.
We expect this outflow to be offset by a receipt of GBP0.3
million for our 2018 research and development tax credits which is
expected to be received in October 2019, based upon our experience
in previous periods. The Company remains free of any long-term
debt.
Brexit
We continue to review the risks associated with Brexit. 43% of
our revenue during the period was related to clients based in
Europe, primarily in Ireland for payment services (29%) and our
fraud services in Holland (12%). We see these two regions as our
largest risks in relation to Brexit. Our solutions are primarily
local domestic payment solutions, delivered on behalf of local
entities for their local customers and we believe this reduces our
risk. For our Irish client, our services are directly supported by
an Irish registered payment institution which will enable us to
transact locally via a local entity should this be required,
underpinned by a long-term contract. We process successfully using
this methodology today in Asia pacific. Our fraud service is a
software solution that does not involve the processing of cash and
can be managed and processed locally if required. Whilst some
incremental costs and administration effort would be involved, we
do not believe this will be material. For our resources, where the
majority of our support teams are based in Europe, this operates as
a stand-alone trading entity, abiding by all local laws, taxes and
compliance. We expect this to have minimal impact given the
flexibility we have across the Group. Crucially, we are committed
to continue to comply with the most rigorous data protection
regulation and, as such, will retain full compliance with the
European Union 'General Data Protection Regulation' regime and will
retain our global PCI data security standard.
Employees
We recognise that the performance achieved in this period would
not have been possible without the support and continued dedication
of our staff. They continue to support our delivery model and
enhance the solutions to our clients, support the strong
transaction growth, develop, and deliver improved, secure
technologies. In particular, their focus on adapting our technology
to ensure we deliver payment compliance has been a critical
investment, and our focus on driving improved fraud management
solutions and a fully stable infrastructure delivers enhanced
overall financial performance. They are our most valuable resource
and we would like to thank them for their efforts and the stability
they give to the Group. We encourage a strong, innovative culture
and our resources in the United Kingdom and Romania offer a highly
skilled, experienced and stable delivery structure with a proven
capacity to scale efficiently as we grow. In H2 2019, we will look
to invest further in our security, fraud and business intelligence
solutions, product delivery and commercial resources with their
support.
Outlook
We will continue to drive growth from our long-term clients and
enhance our solutions and payments services to support their
transition from retail to digital solutions. In addition, we have
ensured our solutions are adapted to the new compliance
environment, securing stability for the future. This will allow us
to target potential new opportunities where Clients face challenges
in adapting to change. As we look to grow outside of our
traditional mobile operator market, we will focus on new verticals
where payment risk and transaction optimisation is key to success,
such as the fast growing digital content and gifting markets where
we see similar experiences to that of the mobile pre-pay
market.
Our challenges over the coming period relate to the economic
uncertainties of Brexit and new compliance requirements creating
uncertainty in the market, restricting Client investments and
increasing the likelihood of internal consolidation. We will
mitigate the impact by growing existing services to clients and
manage our cost base accordingly.
The Board remains confident that our total market opportunity
continues to increase as the digital payments market expands
globally and our solutions become increasingly relevant to a wider
set of customers, geographies and vertical markets. Our fully
compliant risk management solutions retain our strong position,
allowing us to take advantage of this consumer migration to digital
e-commerce.
John Beale
CEO
Consolidated Statement of Comprehensive Income
For the period of six months ended 30 June 2019
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 2019 30 June 2018 31 Dec
GBP GBP 2018
Note GBP
------------------------------------- ----- -------------- ---------------------------- ------------
Payment Transaction Value
Processed 58,066,174 50,216,383 105,968,398
Transaction Services Revenue 1,298,214 1,3249,174 2,606,781
Fraud Services Revenue 203,833 134,486 329,602
Professional Services Revenue 176,267 180,379 400,642
------------------------------------- ----- -------------- ---------------------------- ------------
Revenue 1,678,314 1,564,039 3,337,025
------------------------------------- ----- -------------- ---------------------------- ------------
Cost of sales (627,573) (593,425) (1,257,437)
------------------------------------- ----- -------------- ---------------------------- ------------
Gross profit 2 1,050,741 970,614 2,079,588
Administrative expenses
------------------------------------- ----- -------------- ---------------------------- ------------
General and administration (785,742) (775,472) (1,495,603)
Research and development (298,132) (285,521) (646,549)
Depreciation (65,655) (55,571) (120,345)
Share Based payments - - (38,992)
------------------------------------- ----- -------------- ---------------------------- ------------
Total administrative expenses (1,149,529) (1,116,564) (2,301,489)
Operating loss 3 (98,788) (145,950) (221,901)
Finance income 691 210 721
Finance expense (1) (24) (34)
------------------------------------- ----- -------------- ---------------------------- ------------
Loss before taxation (98,098) (145,764) (221,214)
Taxation (73) (1,941) (14,122)
------------------------------------- ----- -------------- ---------------------------- ------------
Loss for the period/year (98,171) (147,705) (235,336)
------------------------------------- ----- -------------- ---------------------------- ------------
Other Comprehensive expense
for the year
Exchange differences on translation
of foreign operations 1,150 4,152 3,567
Loss and total comprehensive
expense for period
attributable to the owners
of the parent (97,021) (143,553) (231,769)
------------------------------------- ----- -------------- ---------------------------- ------------
Basic and diluted loss per
ordinary share 5 (0.2)p (0.3)p (0.5)p
------------------------------------- ----- -------------- ---------------------------- ------------
Consolidated Statement of Financial Position
As at 30 June 2019
Unaudited Unaudited
Six months Six months Audited
ended ended Year
30 June 30 June ended
2019 2018 31 Dec 2018
Note GBP GBP GBP
--------------------------------- ----- ------------- ------------- -------------
ASSETS
Non-current assets
Property, plant and equipment 349,692 44,363 371,699
Total non-current assets 349,692 44,363 371,699
Current assets
Trade and other receivables 6 1,655,057 1,330,143 1,208,358
R&D tax credit receivable 386,074 364,477 200,000
Cash and cash equivalents 3,129,427 3,145,742 3,487,185
Total current assets 5,170,558 4,840,362 4,895,543
Total assets 5,520,250 4,884,725 5,267,242
--------------------------------- ----- ------------- ------------- -------------
LIABILITIES
Current liabilities
Trade and other payables 7 (5,020,455) (4,494,142) (4,597,844)
Obligations under finance lease (95,548) (21,243) (137,938)
--------------------------------- ----- ------------- ------------- -------------
Total current liabilities (5,116,003) (4,515,385) (4,735,782)
Non-current liabilities
Obligations under finance lease (181,152) - (211,344)
--------------------------------- ----- ------------- ------------- -------------
Total non-current liabilities (181,152) - (211,344)
Total liabilities (5,297,155) (4,515,385) (4,947,126)
--------------------------------- ----- ------------- ------------- -------------
Net assets 223,095 369,340 320,116
--------------------------------- ----- ------------- ------------- -------------
Equity
Share capital 8 4,573,429 4,573,429 4,573,429
Share premium 1,480,791 1,480,791 1,480,791
Share options reserve 9 38,992 - 38,992
Reverse acquisition reserve 6,920,115 6,920,115 6,920,115
Merger reserve 6,808,742 6,808,742 6,808,742
Retained deficit (19,598,974) (19,413,737) (19,501,953)
--------------------------------- ----- ------------- ------------- -------------
Total equity attributable to
the equity shareholders of
the parent 223,095 369,340 320,116
John Nicholas Beale
Chief Executive Officer
Consolidated Statement of Cash Flows
For the period of six months ended 30 June 2019
Unaudited Unaudited
Six months Six months Audited
ended ended Year
30 June 30 June ended
2019 2018 31 Dec 2018
Note GBP GBP GBP
-------------------------------------- ------ ------------ ------------ -------------
Cash flows from operating activities
Loss before tax from continuing
operations (98,098) (145,764) (221,214)
---------------------------------------------- ------------ ------------ -------------
Adjusted for:
Depreciation 65,655 55,571 120,345
Exchange differences on translation
of foreign operations 1,150 4,152 3,567
Finance income (691) (210) (721)
Finance expense 1 24 34
Share based payment 0 0 38,992
R&D credits (186,074) (134,477) (254,081)
(Increase) / decrease in trade
and other receivables (446,699) (191,867) (70,081)
Increase / (decrease) in trade
and other payables 422,611 167,329 528,662
Adjusted profit/(loss) from
operations after changes in
working capital (242,145) (245,242) 145,503
Interest received 691 210 721
Interest paid (1) (24) (34)
Income taxes paid (73) 0 (14,122)
Corporation tax (paid)/received
(inc R&D credits) 0 (1,941) 284,081
Net cash (outflow) / inflow
from operating activities (241,528) (246,997) 416,149
Cash flows from investing activities
Purchase of property, plant
and equipment (43,648) (12,223) (35,501)
Net cash outflows from investing
activities (43,648) (12,223) (35,501)
Cash flows from financing activities
Proceeds from issue of share
capital, net of issue costs 0 490,973 233,342
Finance lease payments (72,582) (11,777) (52,571)
Net cash (outflow) / inflows
from financing activities (72,582) 479,196 180,771
Net increase / (decrease) in
cash and cash equivalents (357,758) 219,976 561,419
Cash and cash equivalents at
beginning of period 3,487,185 2,925,766 2,925,766
---------------------------------------------- ------------ ------------ -------------
Cash and cash equivalents at
end of period 3,129,427 3,145,742 3,487,185
---------------------------------------------- ------------ ------------ -------------
Consolidated Statement of Changes in Equity
For the period of six months ended 30 June 2019
Reverse
For the period Share Share options acquisition Merger Retained
ended 30 June 2019 capital Share premium reserve reserve reserve deficit Total
GBP GBP GBP GBP GBP GBP GBP
-------------------- ---------- -------------- -------------- ------------- ---------- ------------- ----------
At 1 January 2019 4,573,429 1,480,791 38,992 6,920,115 6,808,742 (19,501,953) 320,116
Loss for the period
from continuing
operations - - - - - (98,171) (98,171)
-------------------- ---------- -------------- -------------- ------------- ---------- ------------- ----------
Other comprehensive
expense for
the period - - - - - 1,150 1,150
At 30 June 2019 4,573,429 1,480,791 38,992 6,920,115 6,808,742 (19,598,974) 223,095
==================== ========== ============== ============== ============= ========== ============= ==========
Consolidated Statement of Changes in Equity
For the period of six months ended 30 June 2018
Reverse
For the period Share Share options acquisition Merger Retained
ended 30 June 2018 capital Share premium reserve reserve reserve deficit Total
GBP GBP GBP GBP GBP GBP GBP
-------------------- ---------- -------------- -------------- ------------- ---------- ------------- ----------
At 1 January 2018 4,159,324 1,403,923 624,729 6,920,115 6,808,742 (19,894,913) 21,920
New Issue of Shares 414,105 76,868 - - - - 490,973
Share Options
Lapsed (624,729) 624,729 -
Loss for the period
from continuing
operations - - - - - (147,705) (147,705)
-------------------- ---------- -------------- -------------- ------------- ---------- ------------- ----------
Other comprehensive
expense for
the period - - - - 4,152 4,152
At 30 June 2018 4,573,429 1,480,791 - 6,920,115 6,808,742 (19,413,737) 369,340
==================== ========== ============== ============== ============= ========== ============= ==========
Consolidated Statement of Changes in Equity
For the year ended 31 December 2018
For the year ended Reverse
31 December Share Share options acquisition Merger Retained
2018 capital Share premium reserve reserve reserve deficit Total
GBP GBP GBP GBP GBP GBP GBP
-------------------- ---------- -------------- -------------- ------------- ---------- ------------- ----------
At 1 January 2018 4,159,324 1,403,923 624,729 6,920,115 6,808,742 (19,894,913) 21,920
Loss for the period
from continuing
operations (235,336) (235,336)
Other comprehensive
income for
the year - - - - - 3,567 3,567
-------------------- ---------- -------------- -------------- ------------- ---------- ------------- ----------
Total comprehensive
income for
the year - - - - - (231,769) (231,769)
Shares issues in
year 414,105 76,868 - - - - 490,973
Share options
issued 38,992 - - - 38,992
Share options
cancelled - - (624,729) - - 624,729 -
-------------------- ---------- -------------- -------------- ------------- ---------- ------------- ----------
Total contribution
by and
distribution
to owners 414,105 76,868 (585,737) - - 624,729 529,965
-------------------- ---------- -------------- -------------- ------------- ---------- ------------- ----------
At 31 December 2018 4,573,429 1,480,791 38,992 6,920,115 6,808,742 (19,501,953) 320,116
==================== ========== ============== ============== ============= ========== ============= ==========
Notes to the Financial Information
1. Basis of preparation
The unaudited consolidated half-yearly financial information in
this report has been prepared on the basis of the accounting
policies expected to apply for the financial year to 31 December
2019 and in accordance with recognition and measurement principles
of International Financial Reporting Standards (IFRSs) as endorsed
by the European Union. The accounting policies applied in the
preparation of this half-yearly financial information are
consistent with those used in the financial statements for the year
ended 31 December 2018. There has been no material impact from the
application of IFRS16. This interim report has not been reviewed by
the Group's auditors, and does not constitute statutory accounts
within the meaning of the Companies Act 2006. The financial
information for the six months ended 30 June 2018 and 30 June 2017
is not audited.
The financial information contained in this document does not
include all of the information required for full annual financial
statements and do not comply with all of the disclosures in IAS34
'Interim Financial Reporting'. Accordingly, whilst this financial
information has been prepared in accordance with IFRS they cannot
be construed as being in full compliance with IFRS.
The financial information for the year ended 31 December 2018
does not constitute the full statutory accounts for that period.
The Annual Report and Accounts for 31 December 2018 have been filed
with the Registrar of Companies. The Independent Auditors' Report
on the Annual Report and Accounts for 2018 was unqualified and did
not include references to any matters which the auditors drew
attention to by way of emphasis without qualifying their report and
did not contain statements under Section 498(2) or 498(3) of the
Companies Act 2006.
2. Segmental analysis
The chief operating decision maker has been identified as the
Chief Executive Officer (CEO) of the Group. The chief operating
decision maker is responsible for regularly assessing the
performance of the Group's operating segments and performing the
function of allocating resources. To assist the chief operating
decision maker in this process, internally generated reporting is
prepared for each operating segment.
The Group has three operating segments that it reports on. These
operating segments are:
-- Transaction Services Revenues: This segment generates revenue
from the processing of transactions on behalf of clients and is
Mi-Pay Group plc's core business.
-- Fraud Services Revenues: This segment generates revenue from
the assessment of transactions as to the likelihood of being
fraudulent and processes or rejects based on this assessment with
the company taking a risk as to the potential fraud.
-- Professional Services Revenues: This segment generates
revenue from the development, delivery and hosting of our platform
and client solutions.
The CEO assesses the performance of the operating segments based
on revenue and gross profit. The CEO uses these measures to assess
performance because they are quick to analyse and directly relevant
to evaluating the results of each segment. (1)
The segments are continuing operations and results are as
follows:
Operating Segments
Unaudited Unaudited Audited
Six months Six months Year
ended 30 ended 30 ended 31
June 2019 June 2018 Dec 2018
GBP GBP GBP
Payment Transaction Value Processed 58,066,174 50,216,383 105,968,398
Transaction Services Revenue 1,298,214 1,249,174 2,606,781
Fraud Services Revenue 203,833 134,486 329,602
Professional Services Revenue 176,267 180,379 400,642
------------ ------------ ------------
Total revenue 1,678,314 1,564,039 3,337,025
Transaction Services cost of
sales 483,081 433,448 977,179
Fraud Services cost of sales 105,456 124,405 200,510
Professional Services cost of
sales 39,036 35,572 79,748
------------ ------------ ------------
Total cost of sales 627,573 593,425 1,257,437
Transaction Services gross profit 815,133 815,726 1,629,602
Fraud Services gross profit 98,377 10,081 129,092
Professional Services gross
profit 137,231 144,807 320,894
------------ ------------ ------------
Total gross profit 1,050,741 970,614 2,079,588
============ ============ ============
Transaction Services gross profit
% 63% 65% 63%
Fraud Services gross profit
% 48% 7% 39%
Professional Services gross
profit % 78% 80% 80%
------------ ------------ ------------
Total gross profit % 63% 62% 62%
============ ============ ============
(1) There is no inter segment trading and assets and liabilities
are not allocated to segments.
3. Operating Loss
This is arrived at after charging / (crediting)
Unaudited Unaudited Audited
Six months Six months Year
ended 30 ended 30 ended
June 2019 June 2018 31 Dec
GBP GBP 2018
GBP
Expenses by nature
Staff costs - operating and
administration 461,910 269,370 790,828
Research and development (includes
staff costs) 298,132 285,521 646,550
Depreciation of property, plant
and equipment 65,655 55,571 120,345
Operating lease expense 13,731 15,978 36,376
Foreign exchange loss / (gain) 21,302 (19,926) (5,655)
Share Based payments - - 38,992
Other administration expenses 288,799 510,050 674,053
------------ ------------ ----------
Total administrative expenses 1,149,529 1,116,564 2,301,489
============ ============ ==========
4. Staff costs
Unaudited Unaudited Audited
Six months Six months Year
ended 30 ended 30 ended
June 2019 June 2018 31 Dec
GBP GBP 2018
GBP
Staff costs (including Directors
compromise):
Wages and salaries 733,746 651,723 1,359,235
Defined contribution pension
cost 11,798 13,157 20,500
Social security contributions
and similar taxes 40.475 34,575 78,142
Total staff costs 786,019 699,455 1,457,877
============ ============ ==========
5. Loss per share
Unaudited Unaudited Audited
Six months Six months Year
ended 30 ended 30 ended 31
June 2019 June 2018 Dec 2018
GBP GBP GBP
----------------------------------- ------------ ------------ -----------
Loss for the year (98,098) (145,764) (221,214)
Weight-average shares outstanding
(number) 45,734,277 44,361,554 45,044,102
----------------------------------- ------------ ------------ -----------
Basic EPS (0.2)p (0.3)p (0.5)
Diluted EPS (0.2)p (0.3)p (0.5)
=================================== ============ ============ ===========
The numerators shown above represent the total loss from
continuing operations for the period or year.
Since the Group was in a loss making position for all three
periods presented, there was no difference between the weighted
average number of shares used to calculate basic and diluted net
loss per share.
6. Trade and other receivables
Unaudited Unaudited Audited
Six months Six months Year
ended 30 ended 30 ended
June 2019 June 2018 31 Dec
GBP GBP 2018
GBP
Trade receivables 215,430 89,460 126,642
Less: provision for impairment - - -
of trade receivables
------------ ------------ ----------
Trade receivables - net 215,430 89,460 126,642
Client receivables 1,324,037 981,041 969,098
Prepayments 102,937 114,120 74,019
Other receivables 12,653 145,522 38,599
------------ ------------ ----------
Total trade and other receivables 1,655,057 1,330,143 1,208,358
============ ============ ==========
7. Trade and other payables
Unaudited Unaudited Audited
Six months Six months Year
ended 30 ended 30 ended 31
June 2019 June 2018 Dec 2018
GBP GBP GBP
Trade payables 331,779 228,155 235,755
Client payables 4,175,133 3,640,333 3,848,251
Accruals 209,057 321,968 214,293
Deferred income 47,327 19,763 18,933
Other payables - tax and social
security payments 47,810 65,949 59,135
Deferred directors' emoluments 149,469 149,269 149,267
Other Payables 59,880 68,705 72,210
------------ ------------ ----------
Total trade and other payables 5,020,455 4,494,142 4,597,844
============ ============ ==========
8. Share capital and premium
Number of Share Capital Share premium
shares GBP GBP
At 30 June 2018 45,734,277 4,573,429 1,480,791
At 31 December 2018 45,734,277 4,573,429 1,480,791
At 30 June 2019 45,734,277 4,573,429 1,480,791
On 1 March 2018 Mi-Pay placed 4,141,048 new ordinary shares of
10p nominal value each ('Placing Shares') at a placing price of
12.5p per share (the "Placing Price") (the 'Placing').
9. Share Based Payment
The Group operates two equity-settled share-based remuneration
(share options) schemes for employees: a United Kingdom tax
authority approved EMI share options scheme and an unapproved share
option scheme. The granting of options to employees in 2014 and
2018 was decided upon by the Group and no legal or constructive
obligation exists to grant further options in future years.
On 28 February 2018, the Group issued options over a total of
3,750,000 Ordinary Shares (under the terms of the Group's existing
share option scheme), with an exercise price of 13 pence per share.
Existing share options over 3,763,425 Ordinary Shares with an
exercise price of 41 pence have been cancelled, or forgone. As a
result of cancellation of previously issued share options, the
GBP624,729 of share option reserve as at 31 December 2017 was
transferred to retained deficit during the six month period to 30
June 2018 with no impact on the Consolidated Statement of
Comprehensive Income for the six month period to 30 June 2019. A
charge of GBP38,992 was made to the Consolidated Statement of
Comprehensive Income for the new issue during the period to 31
December 2018.
The vesting condition for employees awarded share options is to
deliver 3 consecutive months of positive Earnings before Interest
and Tax and that the individual remains an employee of the Group
over the vesting period which was achieved in the year to 31
December 2018. The contractual life of the options is ten years and
there are no cash settlement alternatives.
The movement in the number of share options in the 6 month
period to 30 June 2019 is set out below.
Exercise price Number
(GBP)
30/6/19 Period ended
30/6/19
Brought forward at 1 January 0.13 3,750,000
Lapsed/surrendered during - -
the period
Granted during the period - -
Carried forward at 30 June
2019 0.13 3,750,000
Exercisable at 30 June 2019 0.13 3,750,000
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
IR USONRKKAKUAR
(END) Dow Jones Newswires
September 25, 2019 02:00 ET (06:00 GMT)
Mi-pay (LSE:MPAY)
Historical Stock Chart
From Mar 2024 to Apr 2024
Mi-pay (LSE:MPAY)
Historical Stock Chart
From Apr 2023 to Apr 2024
