TIDMFFX
RNS Number : 9095S
FAIRFX Group PLC
30 September 2014
30 September 2014
FAIRFX Group plc
("FAIRFX" or "the Group" or "the Company")
Interim Results for the six months
ended 30 June 2014
Further strong customer and revenue growth in first half
FAIRFX, a leading low cost, multi-currency payments provider,
which joined AIM in August 2014, announces its maiden interim
results* for the six months ended 30 June 2014.
Key Financial Highlights
-- Revenue up 68% to GBP223 million (H1 2013: GBP133 million)
-- Gross profit up 42% to GBP1.82 million (H1 2013: GBP1.28 million)
Key Operational Highlights
-- Retail Customer numbers increased in the first half by 44,094
(H1 2013: 26,175) to a total of 362,407, a growth rate of 68%,
principally fuelled by increased and targeted marketing spend
-- Growth in each multi-payment and single-payment category
-- Continued investment in technological R&D - P2P matching platform provides major edge
-- Top ranked by consumer ratings companies
-- Significant upgrades to website, mobile and Apps expected by year end
Post Period End
-- Net cash position strengthened by approximately GBP1.5m net
post half year following Placing and Admission to AIM at 45pence
per share
-- Net proceeds of the Placing to primarily fund the Group's
marketing and IT development programme
Commenting on the results and outlook, Chief Executive Officer,
Ian Strafford-Taylor, said:
"As expected, the Group enjoyed another period of strong growth
in revenues.
We are carrying on our strategy of deployment of marketing
resources allied to ongoing technological innovation to drive
market share across our four segments of Cards, Physical Currency,
FairPay and Dealing. Trading has continued to be very encouraging
into the second half and the Board sees significant market share
opportunities both in the UK and overseas. Consequently, we view
the future with confidence."
Enquiries:
FAIRFX Group plc +44 (0) 20 7778 9308
Ian Strafford-Taylor, CEO
Square1 Consulting +44 (0) 20 7929 5599
David Bick/Mark Longson
Cenkos Securities plc +44 (0) 20 7397 8925
Max Hartley/Callum Davidson
About FAIRFX
FAIRFX
FAIRFX is a leading international payment services provider,
incorporated in the UK in 2005. The Company has developed a
cloud-based peer-to-peer payments platform that enables personal
and business customers to make easy, low-cost multi-currency
payments in a broad range of currencies and across a range of FX
products all via one integrated system. The FAIRFX platform
facilitates payments either direct to Bank Accounts or at 30
million merchants and over 1 million ATM's in a broad range of
countries globally via Mobile apps, the Internet, SMS, wire
transfer and MasterCard/VISA debit cards.
FAIRFX operates within the rapidly growing online multi-currency
payments market and provides transactional services to both
personal and business customers through four channels being
Currency Cards, Physical Currency, FairPay and Dealing. The
Currency Card and Physical Currency offerings facilitate multiple
overseas payments at points of sale and ATM's whereas the FairPay
and Dealing products support wire transfer foreign exchange
transactions direct to Bank Accounts.
In addition, FAIRFX has entered into a number of "white-label"
arrangements for the use of its P2P matching platform. Customers
include easyjet, ThinkMoney and Pitney Bowes. FAIRFX has also
partnered with Concur Technologies, Inc. a leading provider of
integrated travel and expense management solutions with over 25
million users globally. Such relationships provide strong support
for FAIRFX's customer acquisition strategy.
Introduction
The six months ended 30 June 2014 has seen the Group continue
the strong growth trajectory of 2013, with all product lines
expanding rapidly.
Group revenues for the period were GBP222.8 million (H1 2013:
133.3 million), an increase of 68 per cent. Gross profits were
GBP1.82 million (H1 2013: GBP1.28 million), an increase of 42 per
cent. The Group incurred a loss for the period of GBP0.58 million
(H1 2013: GBP0.16 million), reflecting the increased marketing and
IT spend as well as the growth in headcount to support the Group's
aggressive customer acquisition strategy.
Operational Summary
FAIRFX has continued to expand its business across all four
segments. As at 30 June 2014, the Group's personal customers
totalled 362,407 and had approximately 1,000 business customer,
including Alexander McQueen, Aston Martin, Comic Relief, Freemantle
Media, Grant Thornton, Harrods, KFC, Trinity Mirror and Toyota.
The Group continues to be top ranked for its Currency Card
offering in respect of rates and customer satisfaction by consumer
ratings companies MoneySupermarket.com and
MoneySavingExpert.com.
During the period, the Group has continued to expand both its
marketing and front end IT budgets with the aim of acquiring new
customers by raising awareness through targeted advertising and
improving the functionality and usability of the FAIRFX systems to
be "light touch". This strategy has been key to driving growth to
date and the AIM IPO proceeds are being similarly invested.
Marketing has been, and will continue to be, focused on targeted
television advertising, Pay-per-click, Google adverts, Search
Engine Optimisation and Affiliate marketing. Significant resources
are being focused on the Group's user interfaces, namely website,
mobile and Apps to add new functionality combined with an enhanced
user experience. Management expects to launch upgrades of all its
user interfaces by the end of the year.
The Group has continued to invest in upselling multi-pay
customers into the higher income single-pay products, the success
of which has been borne out by the 93 per cent. increase in
single-pay revenue in the first six months of 2014.
FAIRFX retains its ambition to expand its operations beyond the
UK with a targeted launch in Ireland by the end of the year using
the Group's EEA-wide licence.
Financial Review
The six months ended 30 June 2014 has seen the Group continue
the strong growth trajectory of 2013, with all product lines
expanding rapidly. Group revenues were 66 per cent. higher at
GBP222.8 million (H1 2013: GBP133.3 million). Multi-pay product
lines were up 52 per cent. on the equivalent period in 2013,
growing from GBP82 million to GBP125 million with the Single-pay
offering increasing by 93 per cent. from GBP50 million to GBP97
million. Customer numbers have expanded rapidly, with an aggregate
44,094 retail customers added during the six month period to 30
June 2014, bringing the total to 362,407, compared with the
addition of 26,175 in the equivalent six month period in 2013, a
growth rate of 68 per cent.
Gross profits of the Group for the period were GBP1.82 million
(H1 2013: GBP1.28 million), an increase of 42 per cent. The Group
incurred a loss for the period of GBP0.58 million (H1 2013: GBP0.16
million), reflecting the Group's increased marketing and IT spend
and growth in headcount to support the Group's aggressive customer
acquisition strategy. Marketing spend increased to approximately
GBP750,000 in the first six months compared to approximately
GBP500,000 during the comparable period in 2013. Headcount rose
from 41 to 50 during the period, compared to 35 people employed as
at 30 June 2013.
The Group's net cash position was strengthened by approximately
GBP1.5 million post the half year following the Placing and
Admission to AIM at 45 pence per share, resulting in a current cash
position of approximately GBP1.7 million.
*FAIRFX Group plc ("FairFX" or the "Company" or the "Group"),
includes in this announcement its first unaudited half year results
following the Company's Admission to AIM on 5 August 2014. Whilst
the Company did not trade in the period to 30 June 2014, the
Company acquired FAIRFX (UK) Limited (previously named FAIRFX Group
Limited) and its trading subsidiaries on 22 July 2014. These
accounts have been prepared as if FAIRFX (UK) Limited had been
owned and controlled by the Company since FAIRFX (UK) Limited
commenced trading.
Current Trading and Outlook
FAIRFX has performed strongly in the first half and the Board
looks ahead with confidence.
The Group has continued the trend of growing its customer base,
with a total of 393,509 customers as at 28(th) September 2014. In
addition, management is focused on improving its customer user
experience through website, mobile and app.
Consolidated Statement of Comprehensive Income
Notes Unaudited Unaudited Audited
6 months 6 months Year ended
ended 30 ended 30 31 December
June 14 June 13 2013
GBP GBP GBP
Revenue 4 222,787,418 133,253,550 322,384,612
Cost of sales (220,970,365) (131,972,077) (319,611,662)
-------------- -------------- --------------
Gross profit 1,817,053 1,281,473 2,772,950
Administrative expenses (2,400,037) (1,444,385) (2,643,689)
Operating ( loss )/ profit before tax (582,984) (162,912) 129,261
(582,984) (162,912) 129,261
-------------- -------------- --------------
Tax expense 5 - - -
-------------- -------------- --------------
(Loss)/profit and total comprehensive income for the period
attributable to shareholders (582,984) (162,912) 129,261
All amounts relate to continuing activities.
Loss per ordinary share (pence)
attributable to shareholders
Basic 6 (0.95)p (0.27)p 0.21p
Diluted (0.95)p (0.27)p 0.20p
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Capital Merger Reserve Retained Total equity
GBP GBP Deficit attributable
GBP to shareholders
GBP
Balance as at 1 January
2013 614,744 5,416,082 (5,361,309) 669,517
Loss for the period (162,912) (162,912)
-------------- --------------- ------------ -----------------
Balance as at 30 June
2013 614,744 5,416,082 (5,524,221) 506,605
Balance as at 1 January
2013 614,744 5,416,082 (5,361,309) 669,517
Profit for the year 129,261 129,261
-------------- --------------- ------------ -----------------
Balance as at 31 December
2013 614,744 5,416,082 (5,232,048) 798,778
Loss for the period (582,984) (582,984)
Balance as at 30 June
2014 614,744 5,416,082 (5,815,032) 215,794
-------------- --------------- ------------ -----------------
The following describes the nature and purpose of each reserve
within owners' equity:
Share capital amount subscribed for shares at nominal value.
Retained deficit Cumulative profit and losses are attributable
to equity shareholders.
ConsolidatedStatement of Financial Position
Unaudited at Unaudited at Audited at
30 June 14 30 June 13 31 December
GBP GBP 2013
GBP
ASSETS
Non- Current assets
Property, plant and equipment 84,497 39,270 34,152
84,497 39,270 34,152
------------ ------------ ------------
Current assets
Inventories 58,133 141,453 76,281
Trade and other receivables 7,253,086 5,821,035 9,035,474
Cash and cash equivalents 3,955,424 3,000,082 2,006,288
------------ ------------ ------------
11,266,643 8,962,570 11,118,043
------------ ------------ ------------
TOTAL ASSETS 11,351,140 9,001,840 11,152,195
------------ ------------ ------------
EQUITY AND LIABLITIES
Equity attributable to Equity
holders
Share capital 614,744 614,744 614,744
Merger reserve 5,416,082 5,416,082 5,416,082
Retained deficit (5,815,032) (5,524,221) (5,232,048)
------------ ------------ ------------
Total equity 215,794 506,605 798,778
------------ ------------ ------------
Non-Current Liabilities
Trade and other payables 446,510 446,510 -
------------ ------------ ------------
446,510 446,510 -
------------ ------------ ------------
Current Liabilities
Trade and other payables 10,688,836 8,048,725 10,353,417
------------ ------------ ------------
10,688,836 8,048,725 10,353,417
------------ ------------ ------------
TOTAL EQUITY AND LIABLITIES 11,351,140 9,001,840 11,152,195
------------ ------------ ------------
Consolidated Statement of Cashflow
Unaudited Unaudited Audited
6 months 6 months ended year ended
ended 30 30 June 13 31 December
June 14 GBP 2013
GBP GBP
(Loss)/ profit for period/
year (582,984) (162,912) 129,261
Cash flow from operating activities
Adjustments for:
Depreciation 9,000 6,000 23,558
Decrease/ (increase) in trade
and other receivables 1,782,388 (2,606,205) (5,820,644)
Increase in trade and other
payables 781,929 3,503,728 5,361,910
Decrease/ (increase) in inventories 18,148 (68,815) (3,643)
Net cash generated from operating
activities 2,008,481 671,796 (309,558)
Cash flows from investing
activities
Purchases of property, plant
and equipment (59,345) (7,660) (20,100)
Net cash used in investing
activities (59,345) (7,660) (20,100)
Net increase/ (decrease) in
cash and cash equivalents 1,949,136 664,136 (329,658)
Cash and cash equivalents
at the beginning of the period 2,006,288 2,335,946 2,335,946
Cash and cash equivalents
at end of the period 3,955,424 3,000,082 2,006,288
Included in cash and cash equivalents at 30 June 2014 was GBP3.6
million of customer trading funds. (30 June 2013: GBP2.6 million,
31 December 2013: GBP1.3 million)
Notes to the unaudited interim results
1. Basis of preparation and accounting policies
The interim financial statements have been prepared in
accordance with the AIM rules and the basis of accounting policies
set out in the accounts of the Group for the year ended 31 December
2013. The consolidated interim financial statements have been
prepared using recognition and measurement principles of IFRS as
adopted for use in the European Union. The IASB has issued a number
of IFRS and IFRIC amendments or interpretations since the last
annual report was published. It is not expected that any of these
will have a material impact on the Group and therefore accounting
policies applied are consistent with those disclosed in the annual
financial statements for the year ended 31 December 2013.
The interim financial statements are unaudited and were approved
by the Board of Directors for issue on 29(th) September 2014. The
information set out herein is abbreviated and does not constitute
statutory accounts within the meaning of Section 434 of the
Companies Act 2006. These interim consolidated financial statements
do not include all disclosures which would be required in a
complete set of financial statements and should be read in
conjunction with the 2013 Annual Report. The results for the year
ended 31 December 2013 are in abbreviated form and have been
extracted from the published financial statements of the Group.
There were audited and reported upon without qualification by
Gerald Edelman LLP and did not contain a statement under Section
498 (2) or (3) of the Companies Act 2006.
The Group has not applied IAS 34 "Interim Financial Reporting"
(which is not mandatory for UK Groups) in the preparation of this
interim report.
The Company is a limited liability company incorporated and
domiciled in England and Wales and whose shares are quoted on AIM,
a market operated by The London Stock Exchange. The Group financial
statements are presented in pounds Sterling, which is the Group's
presentational currency.
2. Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and its subsidiary undertakings. The
company did not undertake any transactions prior to 30 June
2014.
On 5 August 2014, FAIRFX Group plc listed its shares on AIM, a
market operated by The London Stock Exchange. In preparation for
the Initial Public Offering ("IPO") the Group was restructured. The
restructure has impacted a number of the current year and
comparative primary financial statements and notes. The effect of
this reorganisation was to insert one new company into the Group, a
new ultimate parent company, FAIRFX Group plc. The impact of the
shares subscribed from the "IPO" are not included in the historical
or current six months results to 30 June 2014 as the listing
occurred after the period end.
FAIRFX Group plc acquired FAIRFX (UK) Limited (previously named
FAIRFX Group Limited) on 22 July 2014 through a share for share
exchange. For the consolidated financial statements of the Group,
prepared under IFRS, the principles of reverse acquisition under
IFRS 3 "Business Combinations" have been applied. The steps to
restructure the Group had the effect of FAIRFX Group plc being
inserted above FAIRFX (UK) Limited. The holders of the share
capital of FAIRFX (UK) Limited were issued fifty shares in FAIRFX
Group plc for one share held in FAIRFX (UK) Limited.
By applying the principles of reverse acquisition accounting,
the Group is presented as if FAIRFX Group plc had always owned and
controlled the FAIRFX group. Comparatives have also been prepared
on this basis. Accordingly, the assets and liabilities of FAIRFX
Group plc have been recognised at their historical carrying
amounts, the results for the periods prior to the date the Company
legally obtained control have been recognised and the financial
information and cash flows reflect those of the "former" FAIRFX
(UK) Limited group.
3. Going concern basis
The financial statements have been prepared on a going concern
basis. In determining the appropriate basis of preparation of the
interim statements, the Directors are required to consider whether
the Group can continue in operational existence for the foreseeable
future. The Directors are of the opinion that the Group and Company
have adequate resources to continue in operational existence for
the foreseeable future and feel it is appropriate to adopt the
going concern basis in the preparation of the interim
statements.
4. Segmental analysis
The revenue for the group is generated through the provision of
foreign currency services and this is the sole operating segment of
the group. The revenue is wholly derived from within the UK.
5. Taxation
There is no charge for current or deferred tax due to the
availability of tax losses. A deferred tax asset has not been
recognised as the directors do not believe it is probable that
future taxable profits will be available against which they can be
utilised for the foreseeable future.
6. Loss per share
The loss per ordinary share is based on a loss attributable to
equity shareholders of the parent company.
Unaudited Unaudited Year ended
6 months 6 months 31 December
ended 30 ended 30 2014
June 2014 June 2013
Earnings:
Loss for the purposes
of basic and diluted
loss per share
(LPS) being the
net loss attributable
to the owners
of the Company (582,984) (162,912) 129,261
Number of shares:
Weighted average
number of Ordinary
shares for the
purpose of basic
LPS 61,474,350 61,474,350 61,474,350
In the periods ended 30 June 2014, 30 June 2013 and 31 December
2013 there were share options in issue which could potentially have
a dilutive impact. The Group was loss making in the period to 30
June 2014 and 30 June 2013 and therefore the weighted average
number of ordinary shares for the purpose of the basic and dilutive
loss per share were the same. For the year ended 31 December 2013
the weighted number of shares including the share options was
66,297,150.
7. Dividends
The Directors do not recommend the payment of a dividend
8. Share capital and merger reserve
As at 30 June As at 30 June
2014, 2014,
30 June 2013 30 June 2013
and and
31 December 2013 31 December
2013
Number GBP
Allotted, issued and fully
paid
Ordinary shares of 1p each 61,474,350 614,744
Under the principles of reverse acquisition accounting, the
Group is presented as if FAIRFX Group plc had always owned the
FAIRFX (UK) Limited group. The comparative and current period
consolidated reserves of the Group are adjusted to reflect the
statutory share capital and merger reserve of FAIRFX Group plc as
of it had always existed.
9. Events after the reporting date
On 5 August 2014, the Company raised gross GBP2,577,000 by way
of a placing of 5,726,667 new ordinary shares at a price of 45pence
per ordinary share. Following admission of the new ordinary shares
to trading on AIM, the total number of ordinary shares in issue was
67,750,628.
10. Interim announcement
The interim report was approved by the Board of Director for
issue on 29(th) September 2014. A copy will be posted on the
Investor section of the Company's website at www.fairfx.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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