RNS Number:9231W
Cardpoint PLC
21 May 2007
Monday 21 May 2007
Cardpoint plc
("Cardpoint" or the "Company")
Interim results for the six months ended 31 March 2007
Strong Earnings Growth
Cardpoint, the market leader in the independent cash machine sector in the UK
and Germany, announces the Company's interim results for the six months ended 31
March 2007.
Operating highlights
* Strengthening of the Board and operational management following the
appointment of Executive and Non-Executive Directors
* Continued growth in the UK ATM estate, particularly in higher yielding
through the wall machines
* Continued expansion in Germany with the addition of over 60 new machines
* Acquisition of the ATM estate of Travelex UK in April 2007 adding a
further 1,070 machines in the UK
* Divested non-core businesses and closure of loss-making Netherlands
business
Financial highlights
* Turnover for continuing operations of #40.8 million (2006: #40.7 million)
* Underlying profit before tax* up 250% to #3.9 million (2006: #1.1 million)
* EBITDA* up 42% to #9.9m (2006: #7.0 million)
* Strong operating cash flow up 145% to #7.4 million (2006: #3.0 million)
* Adjusted earnings per share* up 206% to 3.58p (2006: 1.17p)
* before goodwill amortisation, charges for share based payments and exceptional
items
Bob Thian, Chairman of Cardpoint, said:
"Cardpoint has made good progress during the first half of 2007, with
substantial increases in profit and earnings reflecting the encouraging start to
the year and the efforts taken to improve margins. Although we have seen a
softening in revenues we remain on budget at the half year.
"The business is making good progress and the recent acquisition of the ATM
business from Travelex will provide material earnings accretion in 2008 and
beyond."
There will be a meeting for analysts today at 9.30am, at Financial Dynamics, 26
Southampton Buildings, London WC2A 1PB. For further information please contact
Claire Rowell on 020 7831 3113.
Enquiries:
Cardpoint
Bob Thian, Chairman Today: 0207 831 3113
Philip Lanigan, Finance Director Thereafter: 01253 361 300
Financial Dynamics
David Yates / Ben Brewerton 0207 831 3113
CHAIRMAN'S REVIEW
Introduction
I am pleased to report good progress for Cardpoint during the six months ended
31 March 2007. Significant increases in EBITDA, profit* and adjusted earnings
per share* reflect the encouraging start to the year and the efforts taken to
improve margins. Major achievements include the restructuring of the Company's
Board and operational management team, the disposal of the two non-core
subsidiaries, G2 Integrated Solutions Limited and Cardpoint Merchant Services
Limited, and more recently the acquisition of the Travelex ATM business.
Trading and profitability
Turnover from continuing operations for the first half of the year was #40.8
million (2006: #40.7 million), a similar level to the previous half year as we
have continued to remove poor performing machines but also seen a softening in
revenues. Despite this and as a result of our strategy to concentrate on
improving margin and the control of direct costs, we remain on budget at the end
of the half year. EBITDA* increased 42% to #9.9 million (2006: #7.0 million),
profit before tax* increased 250% to #3.9 million (2006: #1.1 million) and
adjusted earnings per share* increased 206% to 3.58 pence per share (2006: 1.17
pence per share). Basic earnings per share shows a loss of 15.02 pence per share
(2006: loss of 14.68 pence per share) due to our policy of amortising goodwill
over the short period of five years.
Cardpoint's core business has performed well in a challenging market and
continues to be underpinned by a number of long-term contracts. Our estate of
cash machines in the UK is now over 5,100 and we operate cash machines for most
of the UK's petrol station operators, large convenience retailers and companies
in the leisure industry. We continue to operate ATMs on behalf of the Bradford
and Bingley and Norwich and Peterborough Building Societies where the
arrangements are beneficial to both parties and represent a viable outsourcing
model which we believe is attractive to other financial institutions.
Our German business has continued to make encouraging progress and the estate
has now increased to over 760 cash machines. The German ATM market is still
immature with a lower level of withdrawals than the UK and we continue to
believe that this market has significant growth potential, in terms of
increasing the number of installed machines as well as transactions per machine.
Growth and acquisitions
Cardpoint's strategy continues to be to grow our ATM network and the volume of
transactions organically through improving the quality and deployment of our
estates. We have continued to focus on Through The Wall ('TTW') machines in high
footfall locations which, given their 24 hour availability, generate higher
transaction volumes and hence greater profitability. In addition, we will
continue to evaluate opportunities to acquire other ATM businesses provided that
they meet our criteria for synergies and earnings enhancement.
On 17 April 2007 we announced the acquisition of the ATM business of Travelex UK
Limited and Travelex ATMs Limited, for a cash consideration of #12.9 million.
This is a strategic acquisition and helps develop our machine estate in the
Company's core UK ATM market. The Travelex estate has 1,070 machines located in
prime convenience locations such as service station forecourts and convenience
food restaurants and the integration of this business should generate
significant synergy benefits for the Group. These synergies will result from
reduced maintenance, interest and overhead costs as well as the removal of loss
making machines and improved measures to reduce losses from criminal attack.
There is also an additional opportunity to improve profitability by converting a
proportion of the Travelex machines to TTW machines in a similar manner to the
approach we are taking with our existing estate of ATMs. The contribution from
this acquisition will result in material earnings accretion in 2008 and beyond.
Disposal/closure of non core or loss making businesses
G2 Integrated Solutions Limited, a company which provides cashless payment and
access control systems, was sold to G4Tech in October 2006 for #3.2 million. In
March 2007 we sold Cardpoint Merchant Services Limited, which provides the
service for mobile phone top ups, to Alphyra UK Limited for an initial
consideration of #0.7 million and estimated deferred consideration, which has
not been included in the calculation of the profit/loss on sale of the business,
of #0.7 million. Neither of these businesses complemented the core ATM business
and did not make a material contribution to the profitability of the Company.
The sale proceeds from these divestments have been used to reduce group
borrowings.
We have previously referred to the poor financial performance of the loss-making
Netherlands business and as there was no possibility of creating a profitable
business, a decision was taken to close the company in January 2007. The half
year results therefore include an exceptional loss of #0.97 million in respect
of asset write-offs and closure costs.
Cashflow and borrowings
The company continues to generate strong cashflow with operating cashflow
increasing 145% to 7.4 million (2006: #3.0 million). We have invested #5.7
million in new machines during the six month period and repaid #4.3 million of
borrowings. Net debt at 31 March 2007 has reduced to #58.5 million (2006: 62.8
million) and following the acquisition of the Travelex ATM business we have new
group bank facilities of up to #98 million to provide the resources for
continued expansion.
Management structure
We have reviewed the management structure of the Company and have made several
changes to establish a more efficient and effective operational structure to
enable the Company to achieve its objectives. Various exceptional costs have
been incurred in relation to this reoganisation and further details are provided
in the interim report. As previously announced Paul Saxton joined the board as
Chief Operating Officer and Philip Lanigan as Finance Director. David Mills,
David Golden and Lee Ginsberg have joined the Board as Non Executive Directors
and these changes provide the depth of knowledge and experience to direct the
Company during its next phase of development. Robin Gregson will be standing
down from the Board at the end of May and I would like to thank him for his
contribution to the Company's development over the past three years.
Outlook
Our objectives continue to be to improve the deployment, quality and security of
our estate; to focus on increasing the number of TTWs and improving the location
of machines, both of which lead to higher yields. We have a good sales pipeline
of machines under order, particularly of the higher yielding TTWs. The
integration of the Travelex business has commenced and we are confident this
will make a significant contribution to Group profitability in the future. We
expect it to contribute EBITDA in excess of #1 million in 2007 and in excess of
#5 million in 2008, resulting in a substantial enhancement of earnings from that
year. We are confident that the integration of Travelex together with our focus
on improvements to the existing business will enhance profitability and
shareholder value.
The Board looks forward to continued sustainable growth and is confident of
building on the strong foundations already established in the business to make
continued progress in improving the profitability of the company.
Bob Thian
Chairman
21 May 2007
* before goodwill amortisation, charges for share based payments and exceptional
items
Consolidated Profit and Loss Account
For the 6 months ended 31 March 2007
Unaudited
6 months ended 31 March 2007
Before goodwill Goodwill and
and exceptional exceptional
items items Total
Note #'000 #'000 #'000
Turnover
Continuing operations 40,847 - 40,847
Discontinued operations 1,498 - 1,498
______ ______ ______
42,345 - 42,345
Cost of sales (30,617) - (30,617)
______ ______ ______
Gross profit 11,728 - 11,728
Administrative expenses
Amortisation of goodwill - (15,158) (15,158)
Exceptional items 3 - (3,079) (3,079)
Share based payments (750) - (750)
Other administrative expenses (5,372) - (5,372)
______ ______ ______
Total administrative expenses (6,122) (18,237) (24,359)
______ ______ ______
Operating profit/(loss)
Continuing operations 5,635 (17,925) (12,290)
Discontinued operations (29) (312) (341)
______ ______ ______
5,606 (18,237) (12,631)
Loss on sale or termination of operations - (1,018) (1,018)
Loss on disposal of fixed assets - (449) (449)
______ ______ ______
Profit/(loss) on ordinary activities before interest 5,606 (19,704) (14,098)
Net interest (2,418) - (2,418)
______ ______ ______
Profit/(loss) on ordinary activities before taxation 3,188 (19,704) (16,516)
Tax on loss on ordinary activities 4 - - -
______ ______ ______
Profit/(loss) on ordinary activities after taxation 3,188 (19,704) (16,516)
Minority interests - - -
______ ______ ______
Profit/(loss) for the financial period 3,188 (19,704) (16,516)
______ ______ ______
(Loss)/earnings per ordinary share
Basic and fully diluted 5 (15.02)p
Basic and fully diluted - continuing operations 5 (13.77)p
Basic (before goodwill amortisation and exceptional
items) 5 2.90p
Diluted adjusted (before goodwill amortisation and
exceptional items) 5 2.81p
The notes at the back of this release form an integral part of this financial
information.
Consolidated Profit and Loss Account
For the 6 months ended 31 March 2007 (continued from table above)
Unaudited Audited
Restated Restated
6 months ended 31 Year ended 30
March 2006 September 2006
Total Total
Note #'000 #'000
Turnover
Continuing operations 40,663 84,070
Discontinued operations 6,800 13,801
______ ______
47,463 97,871
Cost of sales (34,957) (67,401)
______ ______
Gross profit 12,506 30,470
Administrative expenses
Amortisation of goodwill (14,692) (30,378)
Exceptional items 3 (1,195) (1,961)
Share based payments (769) (1,538)
Other administrative expenses (9,009) (17,327)
______ ______
Total administrative expenses (25,665) (51,204)
______ ______
Operating profit/(loss)
Continuing operations (12,758) (20,665)
Discontinued operations (401) (69)
______ ______
(13,159) (20,734)
Loss on sale or termination of operations - -
Loss on disposal of fixed assets - -
______ ______
Profit/(loss) on ordinary activities before interest (13,159) (20,734)
Net interest (2,373) (4,875)
______ ______
Profit/(loss) on ordinary activities before taxation (15,532) (25,609)
Tax on loss on ordinary activities 4 - -
______ ______
Profit/(loss) on ordinary activities after taxation (15,532) (25,609)
Minority interests 103 (46)
______ ______
Profit/(loss) for the financial period (15,429) (25,655)
______ ______
(Loss)/earnings per ordinary share
Basic and fully diluted 5 (14.68)p (24.40)p
Basic and fully diluted - continuing operations 5 (14.38)p (23.50)p
Basic (before goodwill amortisation and exceptional items) 5 0.44p 7.18p
Diluted adjusted (before goodwill amortisation and
exceptional items) 5 0.42p 6.90p
The notes at the back of this release form an integral part of this financial
information.
Statement of total recognised gains and losses
For the 6 months ended 31 March 2007
Unaudited Unaudited Audited
Restated Restated
6 months ended 6 months ended Year ended
31 March 31 March 30 September
2007 2006 2006
#'000 #'000 #'000
Loss for the financial period (16,516) (15,429) (25,655)
Currency differences on foreign currency net (14) (9) (26)
investments
______ ______ ______
Total recognised gains and losses for the financial (16,530) (15,438) (25,681)
period ______ ______ ______
Consolidated Balance Sheet
As at 31 March 2007
Unaudited Unaudited Audited
As at As at As at
31 March 31 March 30 September
2007 2006 2006
Note #'000 #'000 #'000
Fixed assets
Intangible assets 85,370 111,919 101,025
Tangible assets 28,108 31,573 30,352
______ ______ ______
113,478 143,492 131,377
______ ______ ______
Current assets
Stocks 301 3,402 1,471
Debtors 6,059 9,102 8,967
Cash at bank and in hand 8,086 6,736 8,044
______ ______ ______
14,446 19,240 18,482
Creditors: amounts falling due within one year (30,261) (29,907) (33,386)
______ ______ ______
Net current liabilities (15,815) (10,667) (14,904)
______ ______ ______
Total assets less current liabilities 97,663 132.825 116,473
Creditors: amounts falling due after more than one (58,495) (70,104) (63,199)
year ______ ______ ______
Net assets 39,168 62,721 53,274
______ ______ ______
Capital and reserves
Called up share capital 6 5,596 5,256 5,274
Share premium account 6 89,747 88,154 88,379
Merger reserve 6 354 354 354
Profit and loss account 6 (56,634) (31,299) (40,838)
______ ______ ______
Shareholders' funds 39,063 62,465 53,169
Minority interests 105 256 105
______ ______ ______
39,168 62,721 53,274
______ ______ ______
The notes at the back of this release form an integral part of this financial
information.
Consolidated Cash Flow Statement
For the 6 months ended 31 March 2007
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
31 March 31 March 30 September
2007 2006 2006
Note #'000 #'000 #'000
Net cash inflow from operating activities 7 7,396 3,016 12,881
______ ______ ______
Returns on investments and servicing of finance
Net interest paid (2,369) (2,324) (4,778)
______ ______ ______
Net cash outflow from returns on investments and
servicing of finance (2,369) (2,324) (4,778)
______ ______ ______
Tax received - - 4
______ ______ ______
Capital expenditure and financial investment
Purchase of tangible fixed assets (5,743) (3,354) (5,966)
Proceeds from disposal of tangible fixed assets 729 56 93
______ ______ ______
Net cash outflow from capital expenditure and
financial investment (5,014) (3,298) (5,873)
______ ______ ______
Acquisitions and disposals
Proceeds from disposal of businesses 3,642 - -
Payments in relation to businesses acquired in prior
periods, including costs (450) (6,416) (6,034)
Net cash transferred with disposed businesses (584) - -
______ ______ ______
Net cash inflow/(outflow) from acquisitions and 2,608 (6,416) (6,034)
disposals
______ ______ ______
Net cash inflow/(outflow) before financing 2,621 (9,022) (3,800)
______ ______ ______
Financing
Issue of share capital (net of issue costs) 1,674 (978) (860)
Receipts from borrowings - 7,741 4,241
Repayment of borrowings (4,253) (111) (202)
______ ______ ______
Net cash (outflow)/inflow from financing (2,579) 6,652 3,179
______ ______ ______
Increase/(decrease) in cash in the period 42 (2,370) (621)
______ ______ ______
The notes at the back of this release 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 2006 to 31
March 2007, is unaudited and does not constitute statutory financial statements.
The financial information, with the exception of the impact of the prior period
adjustment as disclosed in note 2, for the year ended 30 September 2006 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 2006, with the exception of the implementation of FRS 20 '
Share Based Payments' which has resulted in a prior period adjustment to the
comparative figures in the profit and loss account.
3. EXCEPTIONAL ITEMS
Exceptional items included within administrative expenses are summarised below:
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
31 March 31 March 30 September
2007 2006 2006
#'000 #'000 #'000
Reorganisation and restructuring costs (i) (2,850) (1,195) (1,542)
Post closure costs for the Netherlands business (157) - -
Costs in relation to unsolicited takeover approaches (72) - (41)
______ ______ ______
Other exceptional costs - - (378)
Total exceptional costs included within administrative
expenses (3,079) (1,195) (1,961)
______ ______ ______
(i) Reorganisation and restructuring costs for the current period relate to the
reorganisation of the group as well as including changes to the board of
directors which occurred during the year.
4. TAX ON LOSS ON ORDINARY ACTIVITIES
There is no corporation tax charge for the period (2006: #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 #16,516,000 (31 March 2006: #15,429,000) by
the weighted average number of ordinary shares in issue during the period of
109,993,433 (31 March 2006: 105,115,504). The basic and fully diluted loss per
ordinary share on continuing operations is calculated by dividing the loss for
the period on continuing operations of #15,148,000 (31 March 2006: #15,118,000)
by the weighted average number of ordinary shares. The adjusted earnings per
ordinary share is calculated by reducing the loss for the period by the goodwill
amortisation and exceptional items of #19,704,000 (31 March 2006: #15,887,000).
The company's share options are anti-dilutive in respect of the basic earnings
per share calculation. The calculation of 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 3,404,167 (31 March
2006: 4,663,287).
6. SHARE CAPITAL AND RESERVES
Unaudited Unaudited Unaudited Unaudited
Share capital Share Premium Merger Reserve Profit and loss
account
#'000 #'000 #'000 #'000
At 1 October 2006 5,274 88,379 354 (40,838)
Issue of share capital 322 1,368 - -
Loss for the financial period - - - (16,516)
Foreign currency losses - - - (14)
Credit for equity settled share-based
payments - - - 734
______ ______ ______ ______
At 31 March 2007 5,596 89,747 354 (56,634)
______ ______ ______ ______
7. RECONCILIATION OF OPERATING LOSS TO NET CASH INFLOW FROM OPERATING ACTIVITIES
Unaudited Unaudited Audited
Restated Restated
6 months ended 6 months ended Year ended
31 March 31 March 30 September
2007 2006 2006
#'000 #'000 #'000
Operating loss (12,631) (13,159) (20,734)
Depreciation 3,523 3,484 6,626
(Profit)/loss on disposal of fixed assets (46) 123 211
Amortisation of goodwill 15,158 14,692 30,378
Equity settled share-based payments 750 769 1,538
Foreign currency losses (14) (9) (26)
Decrease/(increase) in stocks 43 (845) (463)
Decrease in debtors 615 1,967 1,598
Decrease in creditors (2) (4,006) (6,247)
______ ______ ______
Net cash inflow from operating activities 7,396 3,016 12,881
______ ______ ______
8. ANALYSIS OF CHANGE IN NET DEBT
Audited Unaudited Unaudited Unaudited
At 1 October Non-cash At 31 March
2006 Cash flow Movements 2007
#'000 #'000 #'000 #'000
Cash at bank and in hand 8,044 42 - 8,086
Bank loans (70,419) 4,125 (49) (66,343)
Other loans (403) 128 - (275)
______ ______ ______ ______
(62,778) 4,295 (49) (58,532)
______ ______ ______ ______
9. INTERIM REPORT
This Interim Report was approved by the Directors on 21 May 2007. 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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