TIDMBOX
RNS Number : 4603O
Boxhill Technologies PLC
30 January 2019
Dissemination of a Regulatory Announcement that contains inside
information according to REGULATION (EU) No 596/2014 (MAR).
Boxhill Technologies PLC
("Boxhill" or the "Company" or the "Group")
Half-Yearly Report for the period ended 31 July 2018
30 January 2019
Chairman's Statement
For the half year to 31 July 2018 the Group incurred a profit
before tax of GBP2,793,000, including an operating loss from
continuing operations of GBP668,000 (H1 17: GBP310,000 year to 31
January 2018: GBP720,000). This figure includes the exceptional
profit on disposal of the Emex businesses to MDC Nominees Limited.
This is comprised of the consideration of GBP2,000,000, combined
with the net assets disposed of and liabilities derecognised.
As announced on 28 March 2018, the Company established a new
subsidiary, Market Access, whose initial focus was on foreign
exchange and treasury services. Market Access became authorised as
an "EMD Agent" under the rules of the Financial Conduct Authority
with effect from 9 May 2018 and is thus authorised to undertake
payment processing services.
The Group has been actively engaged in providing payment
services for non-mainstream eCommerce businesses, notably those
involved in online gambling activities, since first entering the
payment services business in 2013. During the half year to 31 July
2018, the Group encountered rapidly increasing difficulties in the
transacting of payments involving non-mainstream eCommerce
merchants in certain jurisdictions ("Non-Conforming Customers"),
with a growing list of its partner banks and other financial
institutions, following recent regulatory changes, and in turn,
this is having a negative impact on its banking and payment
relationships relating to other merchants.
This resulted in reduced revenue revenue relating to payment
processing compared with the average for the period October 2017 to
January 2018 of GBP120,000 per month. As a result, 30 July 2018,
the business undertook a re-structuring of the Group with the
separation of the provision of payment services to Non-Conforming
Customers from the rest of the Group through the sale of Emex (UK)
Group Limited, Emexconsult Limited and Emex Technologies Limited to
MDC Nominees Limited.
During 2018, the Board demonstrated its commitment to resolving
the operational challenges faced through the year to 31 January
2018 and also the issues highlighted by the suspension in shares in
August 2018.
The Board has embarked on a programme of improvements across the
entire business, with a focus on control, agility and delivery.
There are immediate and planned changes to The Board, the first of
which are two executive appointments. Furthermore, the Company is
moving all operational controls into the UK and a new operational
office is being established in London, with improved facilities and
space so that all operations can be based in one place.
Reorganisation of the payments business following the sale of
the Emex Group has involved a refocus on more mainstream clients
and markets within Market Access Limited ("Market Access"). This
finds the payments business in a more competitive arena, where
margins are lower, and this is reflected in the first half results.
The reduction in revenues reported to the market on 12 July has
continued at the same level while the reorganisation continues,
with further declines in payment processing being offset by a rise
in foreign exchange business. However, we believe that in the long
term the reorganisation will enable us to produce a growth pattern
that is more stable than we have seen in the past.
Further information relating to the Group re-organisation and
re-structure can be found in the Strategic Report of the Company
accounts for the year to 31 January 2018, which have been released
concurrently with this half-year report.
The Right Honourable Lord E T Razzall CBE
Executive Chairman
For further information, contact:
Boxhill Technologies PLC 020 7493 9644
Tim Razzall, Executive Chairman
Website www.boxhillplc.com
Allenby Capital Limited (Nomad & Broker)
John Depasquale/Nick Harriss 020 3328 5656
Notes to editors:
Boxhill Technologies PLC (AIM: BOX) is an AIM quoted lottery,
software, gaming and leisure company.
Boxhill has a range of ecommerce products that suit all
merchants' and customers' needs enabling secure payments. The
Company works within both regulated frameworks and in regions where
traditional partners struggle to offer safe, secure services.
In addition, Boxhill operates the Weather Lottery, which has
been in operation since 2002 and the Company holds one of the
limited number of UK external lottery manager's licences. Over
GBP5.4 million has been raised to date for good causes and the
lottery has paid over GBP4.9 million in prizes to winners.
Boxhill also has a joint venture agreement via Soccerdome Ltd
operating a five a side football complex in Nottingham.
CONDENSED CONSOLIDATED INCOME STATEMENT
6 month 6 month 12 month
Period ended Period ended Ended
31-Jul 31-Jul 31-Jan
2018 2017 2018
Notes (unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Continuing
Operations:
Revenue 550 233 458
Cost of Sales (124) (127) (243)
-------------------------------- ------------------------------ -----------------------
Gross Profit 426 106 215
Administrative
expenses (1,093) (416) (935)
Operating profit before
exceptional items (666) (310) (720)
Finance
expenses/(interest
income) (2) - -
Exceptional profit on
sale on sale of
subsidiaries 3,699 - -
Profit before
taxation 3,031 (310) (720)
Taxation - - -
-------------------------------- ------------------------------ -----------------------
Profit for the period
from continuing
operations 3,031 (310) (720)
Profit for the period
from discontinued
operations 4 (238) (48) (1,031)
Revaluation of equity
investment - - (58)
Revaluation of
intangible asset on
acquisition - 499 -
-------------------------------- ------------------------------ -----------------------
Total comprehensive
income 2,793 141 (1,809)
-------------------------------- ------------------------------ -----------------------
PROFIT/(LOSS) PER
SHARE
Basic (loss)/profit
per ordinary share 2 0.11p (0.00)p (0.08)p
-------------------------------- ------------------------------ -----------------------
Fully diluted (loss)/profit
per ordinary share 0.11p (0.00)p (0.08)p
-------------------------------- ------------------------------ -----------------------
There are no recognised income or expenses other than the loss
for the period.
CONDENSED CONSOLIDATED BALANCE SHEET
As at As at As at
31-Jul 31-Jul 31-Jan
2018 2017 2018
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Notes
ASSETS
Non-current assets
Property, plant and
equipment 3 2 29
Goodwill 158 1,673 1,673
Intangible assets 1,762 1,715 2,037
10-year loan notes 2,000 - -
------------------------------- ------------------------------- ---------------------
Investments in Equity
Instruments 222 280 222
------------------------------- ------------------------------- ---------------------
4,145 3,670 3,961
------------------------------- ------------------------------- ---------------------
Current assets
Trade and other
receivables 1,465 3,226 3,225
Cash and cash
equivalents 1,050 461 2,151
------------------------------- ------------------------------- ---------------------
2,515 3,687 5,376
------------------------------- ------------------------------- ---------------------
Total Assets 6,660 7,357 9,337
------------------------------- ------------------------------- ---------------------
LIABILITIES
Current liabilities
Trade and other
payables 1,212 3,710 7,142
Bank and other
borrowings 6 6 6
------------------------------- ------------------------------- ---------------------
1,218 3,716 7,148
Non-current
liabilities - - -
------------------------------- ------------------------------- ---------------------
1,218 3,716 7,148
------------------------------- ------------------------------- ---------------------
Total
Assets/(Liabilities) 5,442 3,641 2,189
------------------------------- ------------------------------- ---------------------
EQUITY
Capital and reserves attributable to equity holders
Called up share
capital 3 2,816 2,356 2,356
Share premium account 4,019 3,520 4,019
Revaluation reserve 222 280 222
Retained earnings (1,615) (2,516) (4,408)
------------------------------- ------------------------------- ---------------------
Total equity 5,442 3,641 2,189
------------------------------- ------------------------------- ---------------------
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Revaluation Retained
Capital Premium Reserve Earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
February
2017 1,856 3,020 280 (2,657) 2,499
Issue of new
shares in
the
period 500 500 - 1,000
Operating
profit
for the
period - - - (358) (358)
Valuation of
investment -
Timegrand - - - 499 499
Balance at 31
July 2017 2,356 3,520 280 (2,516) 3,641
Valuation of
investment -
Timegrand - 499 - (499) -
Revaluation
of
investment
in
equity
instrument
- Soccerdome - - (58) - (58)
Loss for the
period - - - (1,394) (1,394)
Balance at 31
January 2018 2,356 4,019 222 (4,408) 2,189
Issue of new
shares in
period 460 - - - 460
Loss for the
period from
continuing
operations - - - (668) (668)
Loss for the
period from
discontinued
operations - - - (238) (238)
Exceptional
profit
on sale of
subsidiaries - - - 3,699 3,699
Balance at 31
July 2018 2,816 4,019 222 (1,615) 5,442
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
6 month 6 month 12 month
Period ended Period ended ended
31-Jul 31-Jul 31-Jan
2018 2017 2018
Notes (unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Net cash generated
from/ (used in)
continuing
operations 5 3,449 (246) (33)
Interest and
financing costs - - -
Tax paid - - -
----------------------------------- --------------------------------- ------------------------
Net cash (used by)/generated
from operating activities 3,449 (246) (33)
Net cash (used
by)/generated from
discontinued
operating
activities 5 (4,729) 40 1,988
----------------------------------- --------------------------------- ------------------------
Net cash (outflow) from
operating activities (1,280) (206) 1,955
Cash flow from
investing
activities:
Acquisition of
property plant and
equipment - (1) (30)
Purchase of
intangible assets - (150) (5)
Development expenditure - - (587)
Disposal of assets to MDC
Nominees 179 - -
----------------------------------- --------------------------------- ------------------------
Net cash (used in) continuing
investing activities 179 (151) (622)
----------------------------------- --------------------------------- ------------------------
Net cash from
financing activities - - -
----------------------------------- --------------------------------- ------------------------
(Decrease)/increase in cash
and cash equivalents:
(Decrease)/increase in cash
and cash equivalents (1,101) (357) 1,333
Cash and cash equivalents
at beginning of period 2,151 818 818
Cash and cash equivalents at
end of period 1,050 461 2,151
----------------------------------- --------------------------------- ------------------------
Comprising of:
Cash and cash equivalents per
the balance sheet 1,050 461 2,151
Less:
Bank overdraft - - -
----------------------------------- --------------------------------- ------------------------
Cash and cash
equivalents for
cash flow statement
purposes 1,050 461 2,151
----------------------------------- --------------------------------- ------------------------
NOTES TO THE INTERIM FINANCIAL REPORT
1. Accounting policies
Basis of Accounting and Preparation
These interim results for the six months ended 31 July 2018 have
been prepared using the historical cost and fair value conventions
on the basis of the accounting policies set out below. This interim
report has been prepared in accordance with International Financial
Reporting Standards as adopted by the EU ("Adopted IFRSs"), it is
not in accordance with IAS 34 and therefore is not fully compliant
with IFRS.
These interim results have been prepared under the historical
cost convention. Areas where other bases are applied are identified
in the accounting policies below.
The financial information set out in this interim report does
not constitute statutory accounts as defined in the Companies Act
2006. The Company's statutory financial statements for the year
ended 31 January 2018 have been filed with the Registrar of
Companies. The auditor's report on those financial statements was
unqualified with a material uncertainty relating to going
concern.
This announcement contains certain forward-looking statements
with respect to the operations, performance and financial position
of the Group. By their nature, these statements involve uncertainty
since future events and circumstances can cause results and
developments to differ materially from those anticipated. The
forward-looking statements reflect knowledge and information
available at the date of the preparation of this announcement and
the Company undertakes no obligation to update these
forward-looking statements. Nothing in this Interim Financial
Report should be construed as a profit forecast.
The results for the six months ended 31 July 2018 were approved
by the Board on 29 January 2019.
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the Company
(its subsidiaries) made up to 31 January and 31 July each year.
Control is achieved where the Company has the power to govern the
financial and operating policies so as to obtain benefits from its
activities.
The results of subsidiaries acquired or disposed of during the
year are included in the consolidated income statement from the
effective date of acquisition or up to the effective date of
disposal, as appropriate.
Where necessary, adjustments are made to the Financial
Statements of subsidiaries to bring the accounting policies used
into line with those used by the Group.
Business combinations
All business combinations are accounted for by applying the
acquisition method. Business combinations are accounted for using
the acquisition method as at the acquisition date, which is the
date on which control is transferred to the Group.
The Group measures goodwill at the acquisition date as:
the fair value of the consideration transferred; plus
the recognised amount of any non-controlling interests in the
acquiree; plus
the fair value of the existing equity interest in the acquiree;
less
the net recognised amount (generally fair value) of the
identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is
recognised immediately in profit or loss.
Costs related to the acquisition, other than those associated
with the issue of debt or equity securities, are expensed as
incurred.
Any contingent consideration payable is recognised at fair value
at the acquisition date. If the contingent consideration is
classified as equity, it is not remeasured and settlement is
accounted for within equity. Otherwise, subsequent changes to the
fair value of the contingent consideration are recognised in profit
or loss.
Where fair values are estimated on a provisional basis they are
finalised within 12 months of acquisition with consequent changes
to the amount of goodwill.
Intra-group balances and transactions, and any unrealised income
and expenses arising from intra-group transactions, are eliminated.
Unrealised gains arising from transactions with equity-accounted
investees are eliminated against the investment to the extent of
the Group's interest in the investee. Unrealised losses are
eliminated in the same way as unrealised gains, but only to the
extent that there is no evidence of impairment.
Intangible assets
Expenditure on research activities is recognised in the income
statement as an expense as incurred.
Expenditure on development activities is capitalised if the
product or process is technically and commercially feasible and the
Group intends to and has the technical ability and sufficient
resources to complete development, future economic benefits are
probable and if the Group can measure reliably the expenditure
attributable to the intangible asset during its development.
Development activities involve a plan or design for the production
of new or substantially improved products or processes. The
expenditure capitalised includes the cost of materials, direct
labour and an appropriate proportion of overheads and capitalised
borrowing costs. Other development expenditure is recognised in the
income statement as an expense as incurred. Capitalised development
expenditure is stated at cost less accumulated amortisation and
less accumulated impairment losses.
Expenditure on internally generated goodwill and brands is
recognised in the income statement as an expense as incurred.
Other intangible assets that are acquired by the Group are
stated at cost less accumulated amortisation and accumulated
impairment losses.
Amortisation is charged to the income statement on a
straight-line basis over the estimated useful lives of intangible
assets unless such lives are indefinite. Intangible assets with an
indefinite useful life and goodwill are systematically tested for
impairment at each balance sheet date. Other intangible assets are
amortised from the date they are available for use. The estimated
useful lives are as follows:
Licences, patents and trademarks 25 years
Software 3 to 10 years
In addition to amortisation, at each balance sheet date the
Group reviews the carrying amounts of its intangible assets to
determine whether there is any indication that those assets have
suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine
the extent of the impairment loss (if any). Recoverable amount is
the higher of fair value less costs to sell and value in use. An
impairment loss is recognised as an expense immediately, unless the
relevant asset is carried at a revalued amount, in which case the
impairment loss is treated as a revaluation decrease. Where an
impairment loss subsequently reverses, the carrying amount of the
asset is increased to the revised estimate of its recoverable
amount, but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had no
impairment loss been recognised for the asset in prior years.
Financial instruments
Financial assets and financial liabilities are recognised on the
Group's balance sheet when the Group becomes a party to the
contractual provisions of the instrument.
Goodwill
Goodwill arising on consolidation represents the excess cost of
acquisition over the Group's interest in the fair value of the
identifiable assets and liabilities of a subsidiary at the date of
acquisition. Goodwill is initially recognised as an asset and
reviewed for impairment at least annually. Any impairment is
recognised immediately in the income statement and is not
subsequently reviewed.
Goodwill is stated at cost less any accumulated impairment
losses. Goodwill is allocated to cash-generating units and is not
amortised but is tested annually for impairment. In respect of
equity accounted investees, the carrying amount of goodwill is
included in the carrying amount of the investment in the
investee.
Revenue recognition
Revenue is recognised when the service is rendered:
-- Lottery business revenue represents takings received for
entry into the lottery prize draws. Revenue is recognised on the
date that the draw takes place.
-- Football pitch revenue represents cash takings received for
pitch bookings, recognised on the day of use by the customer.
-- Payment processing revenue represents the consideration
received or receivable from the merchants for services provided.
Key revenue streams the company reports are transaction service
charges that relate to services provided to process transactions
between the customer and an acquiring bank, which is a bank that
accepts card payments from the card-issuing banks. Revenue is
recognised when the transactions are successfully processed and is
recognised per transaction. Process fees are charged per
transaction for providing gateway services.
-- Digital wallet revenue is recognised at the point when a chargeable transaction occurs.
Taxation
Tax on the profit or loss for the year comprises current and
deferred tax. Tax is recognised in the income statement except to
the extent that it relates to items recognised directly in equity,
in which case it is recognised in equity.
Current tax is the expected tax payable or receivable on the
taxable income or loss for the year, using tax rates enacted or
substantively enacted at the balance sheet date, and any adjustment
to tax payable in respect of previous years.
Deferred tax is provided on temporary differences between the
carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes. The following
temporary differences are not provided for: the initial recognition
of goodwill; the initial recognition of assets or liabilities that
affect neither accounting nor taxable profit other than in a
business combination, and differences relating to investments in
subsidiaries to the extent that they will probably not reverse in
the foreseeable future. The amount of deferred tax provided is
based on the expected manner of realisation or settlement of the
carrying amount of assets and liabilities, using tax rates enacted
or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is
probable that future taxable profits will be available against
which the temporary difference can be utilised.
Property, plant and equipment
Property, plant and equipment are stated at cost less
accumulated depreciation and any recognised accumulated impairment
losses. Useful lives are reviewed annually by the Directors.
Where parts of an item of property, plant and equipment have
different useful lives, they are accounted for as separate items of
property, plant and equipment.
Leases in which the Group assumes substantially all the risks
and rewards of ownership of the leased asset are classified as
finance leases. Where land and buildings are held under leases the
accounting treatment of the land is considered separately from that
of the buildings. Leased assets acquired by way of finance lease
are stated at an amount equal to the lower of their fair value and
the present value of the minimum lease payments at inception of the
lease, less accumulated depreciation and less accumulated
impairment losses. Lease payments are accounted for as described
below.
Depreciation is charged to the income statement on a
straight-line basis over the estimated useful lives of each part of
an item of property, plant and equipment. The estimated useful
lives are as follows:
-- office equipment 4 years
-- vehicles 5 years
Depreciation methods, useful lives and residual values are
reviewed at each balance sheet date.
Leased assets
Payments made under operating leases are recognised in the
income statement on a straight-line basis over the term of the
lease. Lease incentives received are recognised in the income
statement as an integral part of the total lease expense.
Finance lease payments
Minimum lease payments are apportioned between the finance
charge and the reduction of the outstanding liability. The finance
charge is allocated to each period during the lease term so as to
produce a constant periodic rate of interest on the remaining
balance of the liability.
Financing income and expenses
Financing expenses comprise interest payable and finance charges
recognised in profit or loss using the effective interest method,
unwinding of the discount on provisions, and net foreign exchange
losses that are recognised in the income statement (see foreign
currency accounting policy. Financing income comprise interest
receivable on funds invested, dividend income, and net foreign
exchange gains.
Interest income and interest payable is recognised in profit or
loss as it accrues, using the effective interest method. Dividend
income is recognised in the income statement on the date the
entity's right to receive payments is established. Foreign currency
gains and losses are reported on a net basis.
Impairment of tangible and intangible assets excluding
goodwill
The carrying amounts of the Group's non-financial assets, other
than investment property, inventories and deferred tax assets, are
reviewed at each reporting date to determine whether there is any
indication of impairment. If any such indication exists, then the
asset's recoverable amount is estimated. For goodwill, and
intangible assets that have indefinite useful lives or that are not
yet available for use, the recoverable amount is estimated each
year at the same time.
The recoverable amount of an asset or cash-generating unit is
the greater of its value in use and its fair value less costs to
sell. In assessing value in use, the estimated future cash flows
are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money
and the risks specific to the asset.
An impairment loss in respect of goodwill is not reversed. In
respect of other assets, impairment losses recognised in prior
periods are assessed at each reporting date for any indications
that the loss has decreased or no longer exists. An impairment loss
is reversed if there has been a change in the estimates used to
determine the recoverable amount. An impairment loss is reversed
only to the extent that the asset's carrying amount does not exceed
the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been
recognised.
Foreign currencies
The individual financial statements of each Group company are
prepared in the currency of the primary economic environment in
which it operates (its functional currency). For the purposes of
the consolidated financial statements, the results and financial
position of each Group company are expressed in Pounds Sterling,
which is the functional currency of the parent company, and the
presentational currency for the consolidated Financial
statements.
Transactions in foreign currencies are translated to the
respective functional currencies of Group entities at the foreign
exchange rate ruling at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies at the
balance sheet date are retranslated to the functional currency at
the foreign exchange rate ruling at that date. Foreign exchange
differences arising on translation are recognised in the income
statement. Non-monetary assets and liabilities that are measured in
terms of historical cost in a foreign currency are translated using
the exchange rate at the date of the transaction. Non-monetary
assets and liabilities denominated in foreign currencies that are
stated at fair value are retranslated to the functional currency at
foreign exchange rates ruling at the dates the fair value was
determined.
Share based payments
Share-based payment arrangements in which the Group receives
goods or services as consideration for its own equity instruments
are accounted for as equity-settled share-based payment
transactions, regardless of how the equity instruments are obtained
by the Group.
The grant date fair value of share-based payment awards granted
to employees is recognised as an employee expense, with a
corresponding increase in equity, over the period that the
employees become unconditionally entitled to the awards. The fair
value of the options granted is measured using an option valuation
model, taking into account the terms and conditions upon which the
options were granted. The amount recognised as an expense is
adjusted to reflect the actual number of awards for which the
related service and non-market vesting conditions are expected to
be met, such that the amount ultimately recognised as an expense is
based on the number of awards that do meet the related service and
non-market performance conditions at the vesting date. For
share-based payment awards with non-vesting conditions, the grant
date fair value of the share-based payment is measured to reflect
such conditions and there is no true-up for differences between
expected and actual outcomes.
Share-based payment transactions in which the Group receives
goods or services by incurring a liability to transfer cash or
other assets that is based on the price of the Group's equity
instruments are accounted for as cash-settled share-based payments.
The fair value of the amount payable to employees is recognised as
an expense, with a corresponding increase in liabilities, over the
period in which the employees become unconditionally entitled to
payment. The liability is remeasured at each balance sheet date and
at settlement date. Any changes in the fair value of the liability
are recognised as personnel expense in profit or loss.
Other than for business combinations, the only share based
payments of the Group are equity settled share options and certain
liability settlements. The Group has applied the requirements of
IFRS 2 - Share-based Payments.
For share options granted an option pricing model is used to
estimate the fair value of each option at grant date. That fair
value is charged on a straight line basis as an expense in the
income statement over the period that the holder becomes
unconditionally entitled to the options (vesting period), with a
corresponding increase in equity.
For shares issued in settlement of fees and/or liabilities, the
Directors estimate the fair value of the shares at issue date and
that value is charged on a straight line basis as an expense in the
income statement (for fees) or reduction in the balance sheet
liability (for liabilities) with a corresponding increase in
equity.
Inventories
Inventories are stated at the lower of cost and net recognised
value. Cost comprises direct materials using the first in first out
(FIFO) basis. Net recognised value represents the estimated selling
price less estimated costs of completion, marketing and
selling.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call
deposits. Bank overdrafts that are repayable on demand and form an
integral part of the Group's cash management are included as a
component of cash and cash equivalents for the purpose only of the
cash flow statement.
Trade receivables
Trade receivables are measured at initial recognition at fair
value, and are subsequently measured at amortised cost using the
effective interest rate method. Appropriate allowances for
estimated irrecoverable amounts are recognised in profit and loss
when there is objective evidence that the asset is impaired. The
allowance recognised is measured as the difference between the
asset's carrying amount and the present value of estimated future
cash flows discounted at the effective interest rate compound at
initial recognition.
Trade receivables are stated at their nominal value as reduced
by appropriate allowances for estimated irrecoverable amounts.
Investments in debt and equity securities
Investments in debt and equity securities held by the Group are
classified as being available-for-sale and are stated at fair
value, with any resultant gain or loss being recognised directly in
equity (in the fair value reserve), except for impairment losses
and, in the case of monetary items such as debt securities, foreign
exchange gains and losses. When these investments are derecognised,
the cumulative gain or loss previously recognised directly in
equity is recognised in profit or loss.
Financial instruments held for trading or designated upon
initial recognition are stated at fair value, with any resultant
gain or loss recognised in profit or loss.
Investments in debt and equity securities whose fair value
cannot be reliably measured are stated at amortised cost less
impairment.
Financial liability and equity
Financial liabilities are classified according to the substance
of the contractual agreements entered into. An equity instrument is
any contract that evidences a residual interest in the assets of
the Group after deducting all of its liabilities. Equity
instruments are recognised at the amount of proceeds received net
of costs directly attributable to the transaction. To the extent
that those proceeds exceed the par value of the shares issued they
are credited to a share premium account.
Bank borrowings
Interest-bearing borrowings are recognised initially at fair
value less attributable transaction costs. Subsequent to initial
recognition, interest-bearing borrowings are stated at amortised
cost using the effective interest method, less any impairment
losses.
Trade payables
Trade payables are not interest-bearing and are stated at their
nominal value.
Provisions
A provision is recognised in the balance sheet when the Group
has a present legal or constructive obligation as a result of a
past event, that can be reliably measured and it is probable that
an outflow of economic benefits will be required to settle the
obligation. Provisions are determined by discounting the expected
future cash flows at a pre-tax rate that reflects risks specific to
the liability.
2. Earnings per ordinary share
The calculation of basic earnings per share and diluted earnings
per share is based on the results and weighted average number of
ordinary shares as follows:
6 month 6 month 12 month
Period ended Period ended ended
31-Jul 31-Jul 31-Jan
2018 2017 2018
(unaudited) (unaudited) (audited)
Attributable to
equity 2,793 141 (1,751)
------------------------------- ----------------------------- -------------------------
Weighted average
number of
ordinary shares:
Basic 2,654,163,103 2,147,496,437 2,272,496,437
------------------------------- ----------------------------- -------------------------
On 31 January 2016 the Company issued GBP1.6m of 0% unsecured,
undated, convertible loan stock which converted into 400,000,000
Ordinary Shares and were allotted to loan stock holders on 7 June
2016 and were admitted to trading on AIM on 15 June 2016. The
shares were consideration for the acquisition of Emex (UK) Group
Limited, and the associated company, Freepaymaster Limited
(collectively, "Emex").
On 10 April 2017, the Company acquired all of the ordinary
shares in Timegrand Limited for GBP1,000,000 satisfied in full by
the issue of 500,000,000 ordinary shares of 0.1p nominal each in
the Company with a consideration value of 0.2p per share.
On 23 April 2018 new shares totalling 410,000,000 Ordinary
Shares of 0.1 pence each ("Ordinary Shares") were issued in
settlement of amounts invoiced from key management personnel. In
addition, 60,000,000 share options were granted to Directors and
key management.
On 9 May, new shares totalling 50,000,000 Ordinary Shares of 0.1
pence each were issued in settlement of invoices for consultancy
fees totalling GBP50,000 from Nineteen Twelve Management Limited, a
company controlled by James Rose.
3. Share capital
As at As at As at
31-Jul 31-Jul 31-Jan
2018 2017 2018
GBP'000 GBP'000 GBP'000
Issued and fully paid:
2,355,829,770 ordinary shares of 0.1p
each 2,816 2,356 2,356
---------------------- --------------------------- ------------------
4. Profit and loss of discontinued operations
Period ended Period ended Period ended
31-Jul 31-Jul 31-Jan
2018 2017 2018
GBP'000 GBP'000 GBP'000
Revenue 119 326 909
Cost of Sales - - (210)
Gross Profit 119 326 699
Administrative expenses (357) (374) (1,730)
Operating profit before
exceptional items (238) (48) (1,031)
Finance expenses/(interest
income) - - -
Profit before taxation (238) (48) (1,031)
Taxation - - -
Profit for the period from
discontinued operations (238) (48) (716)
--------------------------- --------------------------- ---------------------
5. Assets disposed and liabilities derecognised at the date of disposal (prior year)
Emex*
GBP'000
Goodwill 1,515
Property, Plant & Equipment 24
Intangible Assets 179
Cash and cash equivalents 152
Trade and other receivables 3,308
Trade and other payables (6,877)
-------------------------------
Net liabilities derecognised (1,699)
------------------------------- ----------
GBP'000
Consideration received** 2,000
Plus: carrying value of net
liabilities disposed 1,699
---------------------------------------- --------
Gain on sale of disposed subsidiaries 3,699
---------------------------------------- --------
*Emexconsult Limited, Emex Technologies Limited and Emex Group
(UK) Limited.
** Payment is by way of the establishment of a sinking fund into
which the net revenues of Emex resulting from the customers left in
place at the time of the transaction or any new Non-Conforming
Customers referred by Market Access shall be transferred on a
monthly basis and used for general working capital purposes and any
balance outstanding at the end of 10 years, after the above sinking
fund has been extinguished, by MDC Nominees Limited.
6. Cash used in continuing operations
Period ended Period ended Period ended
31-Jul 31-Jul 31-Jan
2018 2017 2018
GBP'000 GBP'000 GBP'000
Profit/(Loss)
attributable to
equity holders 3,031 (310) (720)
Finance costs 2 - -
Finance income - - -
Depreciation,
amortisation and
impairment 86 1 116
Exceptional profit on
sale of subsidiaries (3,699)
Decrease/(increase)
in debtors (2,179) (68) 1,524
(Decrease)/increase
in creditors 2,510 131 (953)
--------------------------------- ------------------------------- -----------------------
Cash generated from/
(used in) continuing
operations (3,449) (246) (33)
--------------------------------- ------------------------------- -----------------------
7. Cash used in discontinued operations
Profit/(Loss)
attributable to
equity holders (238) (48) (1,031)
Finance costs - - -
Finance income - - -
Depreciation,
amortisation and
impairment 8 1 6
Tax credit - - -
Decrease/(increase)
in debtors 3,940 (1,209) (2,799)
(Decrease)/increase
in creditors (8,439) 1,296 5,812
--------------------------------- -------------------------------- -------------------------
Cash generated from/
(used in)
discontinued
operations (4,729) 40 1,988
--------------------------------- -------------------------------- -------------------------
Cashflow figures include changes in debtors and creditors as a
result of disposal of assets and derecognition of liabilities on
the disposal of Emex to MDC Nominees Limited.
8. Transactions with related parties
The transactions set out below took place between the Group and
certain related parties.
Lord E T Razzall
Lord E T Razzall, a director, charged the Group GBP12,000 (six
months ended Jul 2017: GBP12,000; twelve months ended Jan 2018:
GBP24,000) in the period, for directorship services provided, via
an entity trading as R T Associates. At the period end R T
Associates was owed GBP1,400 (Jul 2017: GBP29,400; Jan 2018:
GBP17,932).
Andrew J A Flitcroft
Andrew Flitcroft, a director, charged the Group GBP16,500 (six
months ended Jul 2017 GBP16,500; twelve months ended Jan 2018:
GBP33,000) in the period, for directorship and company secretarial
services provided, via an entity FS Business Limited. At the period
end FS Business Limited was owed GBP33,650 (Jul 2017: GBP69,450;
Jan 2018: GBP77,250).
Philip I Jackson and John M Botros
John Botros was appointed as a Director of Phillite D UK Limited
on 27 December 2017.
Philip Jackson resigned as a Director of Phillite D UK Limited
on 2 January 2018.
During the period the Group earned net fees from the provision
of services to Group clients by PhilliteD UK Limited of GBPnil (six
months ended Jul 2017 GBPnil; twelve months ended Jan 2018:
GBPnil).
Phillite D UK Limited performed regulated services on behalf of
the Group between December 2014 and November 2016, which gave the
Group the regulatory authorisation to perform payment processing.
The revenue recognised and costs associated with this processing
was reflected within the parent company (Boxhill Technologies Plc).
Between November 2016 and July 2018, Phillite D UK Limited's
services were undertaken within the Group by Emex Technologies
Limited which obtained the necessary Financial Conduct Authority
licences in May 2016.
In the year to 31 January 2018, the Company launched a high
value transfer service facilitating transactions in excess of
EUR10,000,000 for corporate and individual customers ("HVTS"). The
development of HVTS has involved substantial investment. It was
agreed that part of this investment would be funded by Phillite D
UK Limited ("PDU"), a company which between December 2014 and
November 2016 undertook certain regulated payment processing
activities on behalf of the Group. PDU markets HVTS to its clients
as part of its offering of payment services, charging fees
independently and not receiving any share of the Processing Fees.
PDU's share of the investment costs, GBP1,600,000 will be met from
future receipts secured by PDU on HVTS transactions where PDU will
in some circumstances be acting as the principal and other
circumstances as an agent. PDU's share of the investment costs are
currently represented on the Boxhill balance sheet as a trade
receivable (the "Agreement").
As at 31 January 2018, the Group was owed GBP2,820,544 from
Phillite D UK Limited (31 January 2017: GBP1,767,536), the increase
reflecting the costs of the HVTS, less amounts paid back to the
Group. The services provided to the Group's clients by Phillite D
UK Limited were at cost to the Group with no profit or uplift being
made by Phillite D UK Limited.
Also, included within prepayments is GBP301,000 relating to the
historic legal matters surrounding the Company's relationship with
its former regulated payment processor, EUPay Group Limited
("EUPay") which has now been settled. Phillite D UK Limited has
independently of the Company taken responsibility for the amounts
owed by EUPay to the Group.
On 30 July 2018, the ownership of the HVTS was transferred to
MDC Nominees Limited, along with the amounts owing from Phillite D
UK Limited, as part of the wider sale of the Emex companies and
company restructure.
At the period end the Group was owed GBP980,643 from PhilliteD
UK Limited (Jul 2017: GBP2,955,392; Jan 2018: GBP2,820,544).
In addition, John Botros, a director of Emexconsult Limited,
Emex Technologies Limited, Emex (UK) Group Limited, Soccerdome
Limited and Market Access Limited, charged the Group GBP12,000 (six
months ended Jul 2017: GBPnil, twelve months ended Jan 2018:
GBP3,000) in the period, for Legal services provided, via St James
Chambers. In addition, John Botros was awarded shares totalling
260,000,000 in settlement of amounts invoiced:
-- St. James Street Chambers in relation to the legal work
involved in the integration of Timegrand Limited with the newly
established Market Access in February 2018 and post-acquisition
dealings with the Gambling Commission for a total consideration of
GBP100,000.
-- Bluedale Corporate Limited in relation to the corporate
finance work involved in the establishment of Market Access Limited
(announced on 28 March 2018) and post-establishment activities for
a total consideration of GBP160,000. Bluedale is a company
controlled by John Botros.
At the period end St James Chambers was owed GBP6,000 (Jul 2017:
GBP10,000; Jan 2018: GBP14,000).
Clive Hyman
Clive Hyman, a Non-Executive director, charged the Group
GBP10,000 (six months ended Jul 2016: GBP10,000; twelve months
ended Jan 2017: GBP20,000) in the period, for directorship services
provided, via an entity trading as Hyman Capital Limited. At the
period end Hyman Capital Services Limited was owed GBPnil (Jul
2017: GBP10,000; Jan 2018: GBP14,000).
James Rose
James Rose is a director of Prize Provision Services Limited
("PPSL") a wholly owned subsidiary of Boxhill Technologies PLC.
During the period James Rose charged PPSL GBP30,000 for consultancy
services via an entity 1912 Management Limited (six months ended
Jul 2017: GBP30,000; twelve months ended Jan 2018: GBP60,000). At
the period end 1912 Management Services Limited was owed GBP88,200
(Jul 2017: GBP145,700; Jan 2018: GBP141,200).
9. Interim Financial Report
The unaudited interim financial report, which is the
responsibility of the directors and was approved by them on 29
January 2019, does not constitute statutory accounts within the
meaning of Section 435 of the Companies Act 2006.
This report is available on Boxhill Technologies PLC's website
at www.boxhillplc.com. Copies are available from the Company at its
registered office:
39 St James's Street, London, SW1A 1JD, United Kingdom
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 CKCDDOBKDADB
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