TIDMESG
RNS Number : 9330B
eServGlobal Limited
28 February 2011
Appendix 4D
eServGlobal Limited
ABN 59 052 947 743
Half-year report and appendix 4D
for the half-year ended 31 December 2010
The half-year financial report does not include notes of the
type normally included in an annual financial report and should be
read in conjunction with the 2010 annual financial report.
Half-year report and appendix 4D
for the half year ended
31 December 2010
Contents
Results for announcement to the market 1
Directors' Report 2
Auditor's Independence Declaration 4
Independent Review Report 5
Directors' Declaration 7
Condensed consolidated Statement of Comprehensive Income 8
Condensed consolidated Statement of Financial Position 9
Condensed consolidated Statement of Changes in Equity 10
Condensed consolidated Statement of Cash Flows 11
Notes to the condensed consolidated Financial Statements 12
Results for announcement to the market
Results A$ '000
--------------------------------------- -----------------------------------
Revenues Down 48.7% to 22,471
(Loss) Profit after tax attributable
to members Up >100% to 53,040
Dividends (distributions) Amount per Franked amount
security per security
------------------
Current period Nil c 0%
Interim dividend declared Nil c 0%
Final dividend paid
--------------------------------------- --------------- ------------------
Previous corresponding period Nil c 0%
Interim dividend declared Nil c 0%
Final dividend paid
--------------------------------------- --------------- ------------------
Record date for determining N/A
entitlements to the dividend.
-----------------------------------
Brief explanation of revenue, net profit and dividends
(distributions). The consolidated entity achieved sales revenue
for the period of $22.471 million (2009 $43.763 million) - a
decrease of 48.7% due to the sale of the USP business and
assets. The gross profit realised was $8.527 million (gross
profit margin: 38%) (2009 $20.207 million (gross profit margin:
46%)). EBITDA for the period was a profit of $63.501 million
(2009 EBITDA loss $7.746 million). The net result of the
consolidated entity for the half year ended 31 December 2010 was
a profit after tax and minority interest for the period of
$53.04 million (2009 $11.926 million loss after tax). Earnings
per share were 26.9 cents (2009: loss per share 6.1cents). In
accordance with the Group's accounting policies, development
expenditure incurred during the period of $0.749 million was
capitalised in the Statement of Financial Position. The
expenditure related to internally generated software comprising
the HomeSend platform. During the period, the cash flow for the
period was a net inflow of $74.028 million primarily resulting
from proceeds received of $79.439 million following the disposal
of the USP business and assets. Cash at 31 December 2010 was
$70.447 million.
------------------------------------------------------------------------------
Directors' report
The directors of eServGlobal Limited submit herewith the
financial report of eServGlobal Limited and its controlled entities
(the Group) for the half-year ended 31 December 2010. In order to
comply with the provisions of the Corporations Act 2001, the
directors report as follows:
Directors
The names of the directors of the company during or since the
end of the half year are:
Richard Mathews Non Executive Chairman
Craig Halliday Chief Executive Officer & Director (appointed
on 18 January 2011)
David Smart Non Executive Director
Francois Barrault Non Executive Director
Anthony M Eisen Non Executive Director
Michael Jefferies Alternate Non Executive Director for Anthony M
Eisen
Jamie Brooke Non Executive Director (appointed on 26 July
2010)
Review of Operations
This report is to be read in conjunction with other reports
issued contemporaneously.
eServGlobal Limited is a public company listed on the Australian
Securities Exchange (ASX:ESV) and the London Stock Exchange (AIM)
(LSE:ESG). Along with its Head Office in Brisbane, Australia, the
eServGlobal group has operations worldwide.
eServGlobal specializes in mobile money solutions and
value-added services (including promotions, loyalty, messaging, and
multiplay) to help telecom service providers increase their revenue
and gain and maintain customer ownership.
eServGlobal invests heavily in product development, using
carrier-grade, next-generation technology and aligning with the
requirements of more than 60 customers in over 45 countries. For 24
years, mobile, fixed, internet and multiplay telecom providers have
used eServGlobal's capabilities to lead and innovate in their local
markets, leveraging their core assets and their trusted agent and
subscriber relationships.
With 13 offices globally, eServGlobal provides full "end-to-end"
and "any account to any account" mobile financial services and
international money transfers.
The consolidated entity achieved sales revenue for the period of
$22.471 million (2009 $43.763 million) - a decrease of 48.7%. The
gross profit realised was $8.527 million (gross profit margin: 38%)
(2009 $20.207 million (gross profit margin: 46%)). EBITDA for the
period was a profit of $63.501 million (2009 EBITDA loss $7.746
million).
The net result of the consolidated entity for the half year
ended 31 December 2010 was a profit after tax and minority interest
for the period of $53.04 million (2009 $11.926 million loss after
tax). Earnings per share were 26.9 cents (2009: loss per share
6.1cents).
In accordance with the Group's accounting policies, development
expenditure incurred during the period of $0.749 million was
capitalised in the Statement of Financial Position. The expenditure
related to internally generated software comprising the HomeSend
platform.
During the period, the cash flow for the period was a net inflow
of $74.028 million primarily resulting from proceeds received of
$79.439 million following the disposal of the USP business and
assets. Cash at 31 December 2010 was $70.447 million.
Auditor's independence declaration
The auditor's independence declaration is included on page 4 of
the half-year financial report.
Rounding off of amounts
The company is a company of the kind referred to in ASIC Class
Order 98/0100, dated 10 July 1998, and in accordance with that
Class Order amounts in the directors' report and the financial
report are rounded off to the nearest thousand dollars, unless
otherwise indicated.
Signed in accordance with a resolution of the directors, made
pursuant to s.306(3) of the Corporations Act 2001.
On behalf of the directors
Richard Mathews
Chairman
Brisbane, 28 February 2011
The Board of Directors
eServGlobal Limited
Suite 5, 30 Florence Street
Newstead, QLD 4006
Australia
28 February 2011
Dear Board Members,
eServGlobal Limited
In accordance with section 307C of the Corporations Act 2001, I
am pleased to provide the following declaration of independence to
the directors of eServGlobal Limited.
As lead audit partner for the review of the financial statements
of eServGlobal Limited for the half year ended 31 December 2010, I
declare that to the best of my knowledge and belief, there have
been no contraventions of:
(i) the auditor independence requirements of the Corporations
Act 2001 in relation to the review; and
(ii) any applicable code of professional conduct in relation to
the review.
Yours sincerely
DELOITTE TOUCHE TOHMATSU
Weng W Ching
Partner
Chartered Accountants
Independent Auditor's Review Report
to the Members of eServGlobal Limited
We have reviewed the accompanying half-year financial report of
eServGlobal Limited, which comprises the condensed statement of
financial position as at 31 December 2010, and the condensed
statement of comprehensive income, the condensed statement of cash
flows and the condensed statement of changes in equity for the
half-year ended on that date, selected explanatory notes and, the
directors' declaration of the consolidated entity comprising the
company and the entities it controlled at the end of the half-year
or from time to time during the half-year as set out on pages 7 to
14.
Directors' Responsibility for the Half-Year Financial Report
The directors of the company are responsible for the preparation
of the half-year financial report that gives a true and fair view
in accordance with Australian Accounting Standards and the
Corporations Act 2001 and for such internal control as the
directors determine is necessary to enable the preparation of the
half-year financial report that is free from material misstatement,
whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express a conclusion on the half-year
financial report based on our review. We conducted our review in
accordance with Auditing Standard on Review Engagements ASRE 2410
Review of a Financial Report Performed by the Independent Auditor
of the Entity, in order to state whether, on the basis of the
procedures described, we have become aware of any matter that makes
us believe that the half-year financial report is not in accordance
with the Corporations Act 2001 including: giving a true and fair
view of the consolidated entity's financial position as at 31
December 2010 and its performance for the half-year ended on that
date; and complying with Accounting Standard AASB 134 Interim
Financial Reporting and the Corporations Regulations 2001. As the
auditor of eServGlobal Limited, ASRE 2410 requires that we comply
with the ethical requirements relevant to the audit of the annual
financial report.
A review of a half-year financial report consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with Australian Auditing Standards and
consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
Auditor's Independence Declaration
In conducting our review, we have complied with the independence
requirements of the Corporations Act 2001. We confirm that the
independence declaration required by the Corporations Act 2001,
which has been given to the directors of eServGlobal Limited, would
be in the same terms if given to the directors as at the time of
this auditor's report.
Conclusion
Based on our review, which is not an audit, we have not become
aware of any matter that makes us believe that the half-year
financial report of eServGlobal Limited is not in accordance with
the Corporations Act 2001, including:
(a) giving a true and fair view of the consolidated entity's
financial position as at 31 December 2010 and of its performance
for the half-year ended on that date; and
(b) complying with Accounting Standard AASB 134 Interim
Financial Reporting and the Corporations Regulations 2001.
DELOITTE TOUCHE TOHMATSU
Weng W Ching
Partner
Chartered Accountants
Sydney, 28 February 2011
Directors' declaration
The directors declare that:
a) in the directors' opinion, there are reasonable grounds to
believe the company will be able to pay its debts as and when they
become due and payable; and
b) in the directors' opinion, the attached financial statements
and notes thereto are in accordance with the Corporations Act 2001,
including compliance with accounting standards and giving a true
and fair view of the financial position and performance of the
consolidated entity.
Signed in accordance with a resolution of the directors made
pursuant to s.303(5) of the Corporations Act 2001.
On behalf of the directors
Richard Mathews
Chairman
Brisbane, 28 February 2011
Condensed consolidated statement of comprehensive income
for the half-year ended 31 December 2010
Consolidated
Half-Year Half-Year
Ended Ended
31 December 31 December
2010 2009
$'000 $'000
------------- -------------
Revenue 22,471 43,763
Cost of sales (13,944) (23,556)
------------- -------------
Gross profit 8,527 20,207
Gain on disposal of business 72,088 -
Interest income 1,839 59
Research and development expenses (3,135) (4,840)
Sales and marketing expenses (4,854) (6,432)
Administration expenses (10,964) (16,740)
Earnings / (loss) before interest
expense, tax, depreciation and
amortisation 63,501 (7,746)
Amortisation expense (3,193) (3,505)
Depreciation expense (816) (1,486)
Earnings / (loss) before interest
expense and tax 59,492 (12,737)
Finance costs (69) (83)
Profit / (loss) before tax 59,423 (12,820)
Income tax benefit / (expense) (6,234) 980
------------- -------------
Profit / (loss) for the period 53,189 (11,840)
============= =============
Other comprehensive income (loss)
Exchange differences arising on
the translation of foreign operations (1,443) (1,525)
------------- -------------
Total comprehensive income (loss)
for the period 51,746 (13,365)
============= =============
Profit (loss) attributable to:
Equity holders of the parent 53,040 (11,926)
Non controlling interest 149 86
------------- -------------
53,189 (11,840)
============= =============
Total comprehensive income (loss)
attributable to:
Equity holders of the parent 51,597 (13,451)
Non controlling interest 149 86
------------- -------------
51,746 (13,365)
============= =============
Earnings (loss) per share:
Basic (cents per share) 26.9 (6.1)
Diluted (cents per share) 26.9 (6.1)
Notes to the Financial Statements are included on pages 12 to 14
Condensed consolidated statement of financial position
as at 31 December 2010
Consolidated
-----------------------
31 December 30 June
2010 2010
Note $'000 $'000
----- ------------ ---------
Current Assets
Cash and cash equivalents 70,447 2,225
Trade and other receivables 2 33,572 31,143
Inventories 385 853
Current tax assets 1,986 4,897
------------ ---------
106,390 39,118
Assets classified as held for sale - 27,528
------------ ---------
Total Current Assets 106,390 66,646
------------ ---------
Non-Current Assets
Property, plant and equipment 2,265 3,071
Deferred tax assets 1,196 1,907
Goodwill 6,295 6,820
Other receivables 11,984 -
Other intangible assets 3 9,285 12,727
------------ ---------
Total Non-Current Assets 31,025 24,525
------------ ---------
Total Assets 137,415 91,171
------------ ---------
Current Liabilities
Trade and other payables 13,568 13,349
Borrowings - 5,794
Current tax payables 6,857 535
Provisions 1,973 4,123
Other 4 4,465 5,268
------------ ---------
26,863 29,069
Liabilities directly associated
with assets classified as held
for sale - 750
------------ ---------
Total Current Liabilities 26,863 29,819
------------ ---------
Non-Current Liabilities
Deferred tax liabilities 1,591 4,083
Provisions 461 505
------------ ---------
Total Non-Current Liabilities 2,052 4,588
------------ ---------
Total Liabilities 28,915 34,407
------------ ---------
Net Assets 108,500 56,764
============ =========
Equity
Issued capital 9 123,946 123,946
Reserves 10 (3,019) (1,566)
Accumulated Losses (12,741) (65,781)
------------ ---------
Parent entity interest 108,186 56,599
Non controlling interest 314 165
Total Equity 108,500 56,764
============ =========
Notes to the Financial Statements are included on pages 12 to 14
Condensed consolidated statement of changes in equity
for the half-year ended 31 December 2010
Foreign Employee Attributable
Currency equity-settled to owners Non
Issued Translation benefits Accumulated of the controlling
Capital Reserve Reserve Losses parent Interest Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000
------------------- ------------------- ----------------- -------------------- -------------------- --------------- --------------------
Consolidated
Balance at
1 July 2010 123,946 (2,463) 897 (65,781) 56,599 165 56,764
=================== =================== ================= ==================== ==================== =============== ====================
Profit for
the period - - - 53,040 53,040 149 53,189
Exchange
differences
arising on
translation
of foreign
operations - (1,443) - - (1,443) - (1,443)
------------------- ------------------- ----------------- -------------------- -------------------- --------------- --------------------
Total
comprehensive
profit for
the period - (1,443) - 53,040 51,597 149 51,746
Equity settled
payments - - (10) - (10) - (10)
------------------- ------------------- ----------------- -------------------- -------------------- --------------- --------------------
Balance at
31 December
2010 123,946 (3,906) 887 (12,741) 108,186 314 108,500
=================== =================== ================= ==================== ==================== =============== ====================
Balance at
1 July 2009 123,946 3,323 1,088 (33,338) 95,019 35 95,054
=================== =================== ================= ==================== ==================== =============== ====================
Loss for the
period - - - (11,926) (11,926) 86 (11,840)
Exchange
differences
arising on
translation
of foreign
operations - (1,525) - - (1,525) - (1,525)
Total
comprehensive
income for
the period - (1,525) - (11,926) (13,451) 86 (13,365)
Equity settled
payments - - (140) - (140) - (140)
Balance at
31 December
2009 123,946 1,798 948 (45,264) 81,428 121 81,549
=================== =================== ================= ==================== ==================== =============== ====================
Notes to the Financial Statements are included on pages 12 to 14
Condensed consolidated statement of cash flows
for the half-year ended 31 December 2010
Consolidated
Half-Year Half-Year
Ended Ended
31 December 31 December
2010 2009
$'000 $'000
------------- -------------
Cash Flows from Operating Activities
Receipts from customers 30,490 64,518
Payments to suppliers and employees (38,139) (71,320)
Interest and other costs of finance
paid (69) (83)
Income tax refunded / (paid) 1,217 (206)
Net cash used in operating activities (6,501) (7,091)
------------- -------------
Cash Flows From Investing Activities
Proceeds from disposal of assets 79,439 -
Interest received 1,839 59
Payment for property, plant and equipment - (2,255)
Software development costs (749) (1,289)
Net cash from/ (used in) investing
activities 80,529 (3,485)
------------- -------------
Net increase/(decrease) In Cash and
Cash Equivalents 74,028 (10,576)
Cash At The Beginning Of The Period (3,569) 14,135
Effects of exchange rate changes on
the balance of cash held in foreign
currencies (12) (139)
------------- -------------
Cash and Cash Equivalents At The End
Of The Period 70,447 3,420
============= =============
Notes to the Financial Statements are included on pages 12 to
14
Notes to the consolidated financial statements
1. Significant accounting policies
Statement of compliance
The half-year financial report is a general purpose financial
report prepared in accordance with the Corporations Act 2001 and
AASB 134 Interim Financial Reporting. Compliance with AASB 134
ensures compliance with International Financial Reporting Standard
IAS 34 Interim Financial Reporting. The half-year financial report
does not include notes of the type normally included in an annual
financial report and should be read in conjunction with the most
recent annual financial report.
Basis of preparation
The condensed financial statements have been prepared on the
basis of historical cost. Cost is based on the fair values of the
consideration given in exchange for assets. All amounts are
presented in Australian dollars.
The company is a company of the kind referred to in ASIC Class
Order 98/010, dated 10 July 1998, and in accordance with that Class
Order amounts in the directors' report and the half-year financial
report are rounded off the nearest thousand dollars, unless
otherwise indicated.
The accounting policies and methods of computation adopted in
the preparation of the half-year financial report are consistent
with those adopted and disclosed in the company's 2010 annual
financial report for the financial year ended 30 June 2010, unless
otherwise stated.
Adoption of New and Revised Accounting Standards
The company has adopted all of the new and revised Standards and
Interpretations issued by the Australian Accounting Standards Board
(the AASB) that are relevant to their operations and effective for
the current reporting period:
-- Amendments to AASB 5, 8, 101, 107, 117, 118, 136 and 139 as a
consequence of AASB 2009-5 Further Amendments to Australian
Accounting Standards arising from the Annual Improvements
Project.
AASB 2009-5 introduces amendments into Accounting Standards that
are equivalent to those made by the IASB under its program of
annual improvements to its standards. A number of the amendments
are largely technical, clarifying particular terms, or eliminating
unintended consequences. Other changes are more substantial, such
as the current/non-current classification of convertible
instruments, the classification of expenditures on unrecognised
assets in the statement of cash flows and the classification of
leases of land and buildings.
The adoption of these amendments has not resulted in any changes
to the company's accounting policies and have no affect on the
amounts reported for the current or prior periods.
2. Current trade and other receivables
Consolidated
----------------------
31 December 30 June
2010 2010
$'000 $'000
Trade receivables 12,401 21,111
Work in progress 6,465 7,467
Other receivables 13,445 814
Deposits and prepayments 1,261 1,751
------------ --------
33,572 31,143
------------ --------
3. Other intangible assets
Software & Customer Software
Documentation Relationships Develop-ment Total
$'000 $'000 $'000 $'000
Carrying value at
1 July 2010 1,065 6,603 5,059 12,727
Internally
developed - - 749 749
Amortisation
expense for the
period (1,038) (1,387) (768) (3,193)
Effects of
foreign exchange
movements (23) (483) (492) (998)
--------------- --------------- -------------- --------
Carrying value at
31 December
2010 4 4,733 4,548 9,285
--------------- --------------- -------------- --------
Carrying value at 1 July
2009 5,153 11,448 3,782 20,383
Internally developed - - 1,289 1,289
Amortisation expense for
the period (1,855) (1,650) - (3,505)
Effects of foreign exchange
movements (328) (832) (297) (1,457)
-------- -------- ----- --------
Carrying value at 31 December
2009 2,970 8,966 4,774 16,710
-------- -------- ----- --------
4. Other Current Liabilities
Consolidated
----------------------
31 December 30 June
2010 2010
$'000 $'000
Deferred income 4,465 5,268
------------ --------
5. Dividends
Half Year ended Half Year ended
31 December 2010 31 December 2009
Cents per Total Cents per Total
share $'000 share $'000
Fully paid ordinary shares
Recognised amounts
Final dividend paid in respect - - - -
of prior financial year
----------- ------- ----------- -------
6. Segment Information
AASB 8 requires operating segments to be identified on the basis
of internal reports about components of the Group that are
regularly reviewed by the chief operating decision maker in order
to allocate resources to the segment and to assess its
performance.
The Group operates in a single segment being the
telecommunications software solutions business.
7. Issuances, repurchases and repayment of securities
During the half-year, the company did not issue any shares (6
months to December 2009: nil).
The company did not issue share options over ordinary shares
under its executive and employee share option plan during the
half-year reporting period (6 months to 31 December 2009: nil).
8. Facilities
Subsequent to balance date, the company renewed its $5 million
bank bill facility to 31 August 2011. The facility is subject to a
range of covenants and provisions.
9. Issued Capital
Consolidated
--------------------------------
31 December 2010 30 June 2010
$'000 $'000
196,847,706 fully paid ordinary
shares (30 June 2010: 196,847,706) 123,946 123,946
----------------- -------------
31 December 2010 31 December 2009
No. '000 $ '000 No. '000 $ '000
--------- -------- --------- --------
Fully Paid Ordinary Shares
Balance at the beginning of the
financial period 196,848 123,946 196,848 123,946
Shares issued in the period - - - -
Balance at the end of the financial
period 196,848 123,946 196,848 123,946
10. Reserves
Consolidated
--------------------------------
31 December 2010 30 June 2010
$'000 $'000
Employee equity-settled benefit 887 897
Foreign currency translation (3,906) (2,463)
----------------- -------------
(3,019) (1,566)
----------------- -------------
Other information required to be given to ASX under listing rule
4.2A.3
Net tangible assets per security Current period June 2010 December 2009
Net tangible assets per 47.2 cents 5.3 cents 16.3 cents
security
--------------------------------- --------------- ---------- --------------
Dividends
Amount Amount per Franked Amount per Date paid/
security amount per security of payable
security at foreign
30% tax source
dividend
-----------
Interim Nil N/A N/A N/A N/A
dividend:
Current year
Previous year Nil N/A N/A N/A N/A
-----------
Final Nil N/A N/A N/A N/A
dividend paid Nil N/A N/A N/A N/A
in respect of
previous
financial
year: Current
period: Final
dividend
Previous
corresponding
period:
Special
dividend
Final
dividend
-------------- ------- ------------ ------------ ------------ -----------
The dividend or distribution plans shown below are in operation.
N/A.
---------------------------------------------------------------------
The last date(s) for receipt of N/A
election notices for the +dividend
or distribution plans
---------------------------
Details of associates and joint venture entities
Name of entity Percentage of ownership Aggregate share of
interest held at end net profit (loss)
of period contributed to the
reporting entity
-------------------------- -------------------------
Current Previous Current Previous
period corresponding period corresponding
period $A'000 period
$A'000
--------------- --------- --------------- -------- ---------------
Total N/A N/A N/A N/A
--------------- --------- --------------- -------- ---------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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