RNS Number:2822S
Cardpoint PLC
20 November 2003
Press Release 20 November 2003
Cardpoint plc
Preliminary Results for the year ended 30 September 2003
Cardpoint plc, the provider of electronic payment transactions, which owns and
operates 1,900 ATMs and approximately 3,000 mobile phone top-up terminals,
reports its Preliminary Results for the year ended 30 September 2003.
Highlights
- All key financial metrics ahead of market expectations
- Turnover at #12,166,000 up nearly fourfold (2002: #3,104,000)
- EBITDA of #1,296,000 (2002: EBITDA loss #242,000)
- Significant cash inflow from operating activities
- Pre-tax profit, before goodwill of #50,000 (2002: loss of #757,000)
- Acquisition of Green Machine and Securicor Cash Machine Limited for
#1.3 million and up to #9.2 million respectively, adding a total of 1,317
ATMs to the estate at acquisition
- Acquisition of PT Distribution for #1.7 million, facilitating Cardpoint's
entry into complementary markets
- Reduced operating costs through an outsourcing agreement with Securicor Cash
Services Limited
- ATMs regularly dispense over #50 million cash per month and the mobile
top-up business distributes airtime value of #7 million per month
Commenting on the Preliminary Results, Mark Mills, Chief Executive Officer,
said: "Cardpoint has grown substantially in the last year, both organically and
by way of acquisition. This has been reflected in the Results and also is a
measure of the Group's dedication to integrating the new businesses quickly
whilst maintaining the high quality service that our customers have come to
expect.
"Our planned transition from a pure ATM operator to a provider and facilitator
of electronic payment transactions is part of our strategy to diversify our
business and take advantage of synergistic markets that will add to the bottom
line and increase shareholder value. Our most recent acquisition, PT
Distribution, marks the start of this strategy and the Group will continue to
grow organically as well as assess similar businesses to those in our current
portfolio. We look forward to a successful year."
For further information, please contact:
Enquiries:
Cardpoint plc
Mark Mills, Chief Executive Officer Tel: +44 (0) 1253 785 808
mark.mills@cardpointplc.com www.cardpointplc.com
Evolution Beeson Gregory
Mike Brennan / Henry Turcan Tel: +44 020 7071 4310
henry.turcan@evbg.com www.evbg.com
Media enquiries:
Bankside Tel: +44 (0) 20 7444 4140
Henry Harrison-Topham / Ariane Vacher
henry.ht@bankside.com www.bankside.com
- Ends -
Chief Executive Officer's Report
Cardpoint plc has made excellent progress in the year ended 30 September 2003
and has delivered ahead of all business and market expectations.
As part of an ongoing strategy and in order to diversify the product portfolio
through complementary businesses, Cardpoint has transformed itself from a pure
operator of automated teller machines (ATMs) into a provider and facilitator of
electronic payment transactions.
Results
In the year to 30 September 2003, turnover reached #12,166,000, a nearly
fourfold increase on the year to 30 September 2002, when turnover was
#3,104,000. Cardpoint generated an EBITDA of #1,296,000 during the year,
compared to a loss of #242,000 for the previous year, and generated a profit
before tax and goodwill of #50,000 (2002: loss of #757,000).
The substantial increase in turnover was generated by a combination of enhanced
performance by Cardpoint's existing ATM estate, the addition by way of organic
growth of 257 new ATMs to the existing estate, and three significant
acquisitions that are outlined below.
The Directors do not propose the payment of a dividend, which is in line with
the policy set out in the flotation prospectus.
Acquisitions
In October 2002, Cardpoint acquired the business of Green Machine from ATM
Express Limited, and the 105 ATMs are now maturing in line with expectations and
contributing to the Group.
In June 2003, Cardpoint acquired Securicor Cash Machine Limited (renamed
Cardpoint Cash Machine Limited) and its estate of 1,232 ATMs for an initial cash
consideration of #5.0 million and further deferred payments of up to #4.2
million over two financial years. To fund the acquisition, the Group raised
#6.0 million of new equity and increased its debt facility with Bank of Scotland
to #7.0 million and as at 30 September 2003, #3.5 million of this facility had
been drawn down.
Not only did this acquisition remove a significant competitor from the market
place, but it also provided the Group with critical mass, a route to faster
growth, and greater profitability. Additionally, Cardpoint has benefited from a
reduction in operating costs, through a new outsourcing agreement with Securicor
Cash Services Limited, and new customer opportunities.
In July 2003, PT Distribution Limited (renamed Cardpoint Merchant Services
Limited) was acquired from Project Telecom plc, now part of Vodafone plc, for a
cash consideration, including expenses, of #1.7 million. This business owns and
operates 3,000 mobile phone top-up terminals situated in retail outlets and has
advanced Cardpoint's development as a provider and facilitator of electronic
payment transactions.
The mobile phone top-up business operates in a comparable manner to Cardpoint's
ATM business, with similar retailer and customer bases making it a strategically
appropriate acquisition for the ongoing expansion of the Group. This
acquisition also strengthened our field based service team, which installs
signage and promotional material for the ATMs and top-up terminals.
Operating review and current developments
At the year end, Cardpoint had 1,875 ATMs and 3,012 top-up terminals. The
Company regularly dispenses more than #50 million of cash per month through its
ATMs and the mobile phone top-up business distributes a monthly airtime value of
#7 million.
During the year, Cardpoint migrated the processing of its transactions across
the entire ATM estate to TNS, a processor previously used by Green Machine. As
a result, the Group has benefited from improved transaction times and lower
processing costs. Given the scaling up of the business, Cardpoint now operates
an in-house ATM helpdesk to enhance the service offering to customers.
Since the year end, Cardpoint Merchant Services has announced a new agreement to
provide the Thresher Group with up to 1,000 top-up terminals and we expect this
part of the business to develop further.
Operating Board and Staff
This year saw the creation of an Operating Board comprising the directors of the
Group. This Operating Board has been further strengthened with the recent
appointments of Andrew Martin and Roy Dodd, both of whom were previously
directors of Securicor Cash Services Limited.
Cardpoint has always benefited from a committed team of management and staff.
This year, with three acquisitions, the introduction of a new transaction
processor, and the implementation of an in-house helpdesk, the whole team pulled
together and worked to ensure that our ATMs and top-up terminals were accessible
to our customers.
We also wish to formally welcome those new employees who we have recruited or
have joined us as a result of an acquisition. The Cardpoint team is now nearly
60 people strong and the Board is confident that the appropriate depth and
breadth exists to allow the Group to expand its operations.
The Board sincerely thanks all of our employees for an outstanding effort during
the year.
Prospects
Cardpoint has retained its key customers and acquired new ones both organically
and via acquisitions. The outsourcing agreement with Securicor Cash Services
Limited will see lower operating costs and greater availability of ATMs to
customers.
As a result of the funds raised during the year, the increased facility from
Bank of Scotland, and the cash flow generated from operations, the Group is well
funded for continued growth.
Cardpoint now operates from a broad and profitable platform and will continue to
grow organically and through appropriate acquisitions. We look forward to a
successful year.
Mark Mills
Chief Executive Officer
20 November 2003
Consolidated profit and loss account
for the year ended 30 September 2003
Note 2003 2002
#000 #000
Turnover
Continuing operations 5,824 3,104
Acquisitions 6,342 -
12,166 3,104
Cost of sales (9,602) (2,728)
Gross profit 2,564 376
Administrative expenses (3,052) (1,035)
Operating (loss)/profit
Continuing operations (604) (659)
Acquisitions 116 -
(488) (659)
Net interest (120) (98)
Loss on ordinary activities before taxation (608) (757)
Tax on loss on ordinary activities - -
Loss for the financial year 4 (608) (757)
(Loss)/earnings per ordinary share
Basic and fully diluted 2 (2.50)p (5.39)p
Basic before goodwill charges 2 0.21p (5.39)p
Diluted before goodwill charges 2 0.19p (5.39)p
The group has no recognised gains or losses for the year other than those stated
above and therefore no separate statement of total recognised gains and losses
has been presented.
Consolidated balance sheet
at 30 September 2003
Note 2003 2002
#000 #000
Fixed assets
Intangible assets 10,688 -
Tangible assets 5,035 2,856
15,723 2,856
Current assets
Stocks 885 14
Debtors 4,174 155
Cash at bank and in hand 4,055 745
9,114 914
Creditors: amounts falling due within one year (16,834) (2,054)
Net current liabilities (7,720) (1,140)
Total assets less current liabilities 8,003 1,716
Creditors: amounts falling due after more than one year (1,061) (216)
Net assets 6,942 1,500
Capital and reserves
Called up share capital 1,634 927
Share premium account 4 7,823 2,480
Merger reserve 4 354 354
Profit and loss account 4 (2,869) (2,261)
Equity shareholders' funds 6,942 1,500
Consolidated cash flow statement
for the year ended 30 September 2003
Note 2003 2002
#000 #000
Net cash inflow/(outflow) from operating activities 5 3,708 (66)
Return on investments and servicing of finance
Interest received 46 19
Finance lease interest paid (59) (117)
Other interest payable (107) -
Net cash outflow from returns on investments and servicing of
finance (120) (98)
Taxation paid (4) -
Capital expenditure and financial investment
Purchase of tangible fixed assets (2,103) (1,312)
Proceeds from disposal of tangible fixed assets 69 2
Net cash outflow from capital expenditure and financial investment (2,034) (1,310)
Acquisitions and disposals
Purchase of acquired businesses 3 (8,182) -
Net cash acquired with subsidiaries 3 1,097 -
Net cash outflow from acquisitions and disposals (7,085) -
Net cash outflow before financing (5,535) (1,474)
Financing
Issue of share capital (net of issue costs) 5,643 2,128
Receipts from borrowings 3,500 -
Capital element of finance lease rentals (298) (265)
Net cash inflow from financing 8,845 1,863
Increase in cash in the year 6 3,310 389
1. Basis of preparation and financial information
The financial information in this preliminary announcement has been prepared in
accordance with the accounting policies set out in the financial statements of
Cardpoint plc for the year ended 30 September 2002, which have remained
unchanged for the financial year ended 30 September 2003. The financial
information in this document does not constitute the company's statutory
accounts for the year ended 30 September 2003 or 2002, but is derived from those
accounts. Statutory accounts for 2002 have been delivered to the Registrar of
Companies and those for 2003 will be delivered following the company's Annual
General Meeting. The auditors have reported on these accounts; their reports
were unqualified and did not contain statements under sections 237(2) or (3) of
the Companies Act 1985.
2 (Loss)/earnings per ordinary share
Basic loss per ordinary share and adjusted earnings per ordinary share (before
amortisation of goodwill) are calculated as follows:
2003 2002
Weighted Weighted
average (Loss)/ average
ordinary earnings ordinary Loss per
(Loss) / shares in per ordinary shares in ordinary
profit issue share Loss issue share
#000 '000 Pence #000 '000 Pence
Basic loss per share (608) 24,321 (2.50) (757) 14,047 (5.39)
Amortisation of goodwill 658 - - - - -
Adjusted earnings per share 50 24,321 0.21 (757) 14,047 (5.39)
The share options are anti-dilutive in respect of the basic earnings per share
calculation. A diluted adjusted earnings per share has been calculated for 2003
as follows:
2003
Weighted
average Earnings
ordinary per
shares in ordinary
Profit issue share
#000 000 Pence
Adjusted earnings per share 50 24,321 0.21
Dilutive effect of share options - 1,587 -
50 25,908 0.19
3. Acquisitions
The acquisitions of the group in the year were as follows:
On 2 October 2002 the group acquired the business and assets of ATM Express
Limited, trading as Green Machine, for a total consideration of #1,258,000. The
consideration was satisfied by the issue of 1,147,886 shares at a value of
#407,000 and cash of #851,000.
On 20 June 2003 the group acquired the entire issued share capital of Securicor
Cash Machine Limited for an initial cash consideration of #5,000,000. Further
consideration will be payable up to a maximum of #4,200,000 contingent upon the
achievement of certain performance targets. The directors have provided for
deferred and contingent consideration of #2,000,000 based on the performance of
the business in the year ended 30 September 2003 and the budgeted performance
for the year ending 30 September 2004, of which #350,000 had been paid at 30
September 2003.
On 1 July 2003 the group acquired the entire issued share capital of PT
Distribution Limited for a consideration of #1,546,000 satisfied in cash.
All acquisitions have been accounted for using the acquisition method of
accounting, and goodwill arising on consolidation has been capitalised and will
be amortised over a period of 5 years. The following table sets out the book
values of the identifiable assets and liabilities acquired and their fair value
to the group:
Securicor
Cash PT
Green Machine Distribution
Machine Limited Limited Total
#000 #000 #000 #000
Tangible fixed assets 680 1,787 251 2,718
Stocks - 1,787 4 1,791
Debtors - 662 2,229 2,891
Cash at bank and in hand - - 1,097 1,097
Creditors - (1,205) (3,781) (4,986)
Net assets/(liabilities) acquired 680 3,031 (200) 3,511
Fair value adjustments - (4,618) - (4,618)
Fair value to the group 680 (1,587) (200) (1,107)
Purchased goodwill capitalised 690 8,787 1,869 11,346
1,370 7,200 1,669 10,239
Satisfied by:
Cash 851 5,000 1,546 7,397
Issue of shares 407 - - 407
Deferred and/ contingent consideration - 2,000 - 2,000
Acquisition costs 112 200 123 435
1,370 7,200 1,669 10,239
The fair value adjustments made in respect of Securicor Cash Machine Limited are
summarised as follows:
#000
Write-down of tangible fixed assets to depreciated replacement cost (982)
Write-down of stocks (un-installed ATM's) to replacement cost (799)
Provision against onerous leasing contracts (2,732)
Provision against other onerous contracts (63)
Accrued pre-acquisition expenses (42)
(4,618)
The loss after taxation of Green Machine for the period from 1 January 2002, the
beginning of the financial year to 2 October 2002, the date of acquisition, was
#900,000. The loss after taxation for the 11 month period ended 31 December
2001 was #1,275,000.
The profit after taxation of Securicor Cash Machine Limited for the period from
1 October 2002, the beginning of the financial year to 20 June, 2003, the date
of acquisition, was #3,155,000. The loss after taxation for the year ended 30
September 2002 was #694,000.
The loss after taxation of PT Distribution Limited for the period from 1 January
2003, the beginning of the financial year to 1 July 2003, the date of
acquisition, was #54,000. The profit after taxation for the year ended 31
December 2002 was #1,233,000.
The businesses acquired during the year made the following contributions to, and
utilisations of, group cash flow.
2003
#000
Net cash inflow from operating activities 1,997
Returns on investments and servicing of finance 14
Increase in cash 2,011
Analysis of net outflow of cash in respect of the acquisitions was as follows:
2003
#000
Initial cash consideration (7,397)
Contingent consideration paid (350)
Acquisition costs (435)
(8,182)
Net cash acquired with subsidiaries 1,097
Net cash outflow from acquisitions (7,085)
4 Share premium account and reserves
Group Share premium Merger Profit and
account reserve loss account
#000 #000 #000
At 1 October 2002 2,480 354 (2,261)
Retained loss for the financial year - - (608)
Issue of shares 6,208 - -
Share issue expenses (865) - -
At 30 September 2003 7,823 354 (2,869)
5 Reconciliation of operating loss to net cash inflow/(outflow) from
operating activities
2003 2002
#000 #000
Operating loss (488) (659)
Depreciation 1,126 417
Loss on disposal of fixed assets 3 -
Amortisation of goodwill 658 -
Decrease/(increase) in stocks 121 (9)
Increase in debtors (1,124) (32)
Increase in creditors 3,412 217
Net cash inflow/(outflow) from operating activities 3,708 (66)
6 Reconciliation of net cash flow to movement in net funds
2003 2002
#000 #000
Increase in cash in the year 3,310 389
Cash outflow from finance leases 298 265
Receipts from borrowings (3,500) -
Change in net funds resulting from cash flows 108 654
Inception of finance leases - (136)
Movement in net funds/(debt) in the year 108 518
Opening net funds/(debt) 232 (286)
Closing net funds 340 232
7. Copies of the preliminary announcement are available from the
company's head office at The Old Fire Station, 55 Hove Road, Lytham St. Annes,
Lancashire, FY8 1XH. The Annual Report and Accounts for the year ended 30
September 2003 will be posted to shareholders on or about 30 November 2003.
- Ends -
This information is provided by RNS
The company news service from the London Stock Exchange
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