TIDMESG
RNS Number : 7267C
eServGlobal Limited
30 June 2016
Appendix 4D
eServGlobal Limited
ABN 59 052 947 743
Half-year report and appendix 4D
for the half-year ended 30 April 2016
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 31 October 2015 financial report.
Half-year report and appendix 4D
for the half year ended
30 April 2016
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 profit or loss and other
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 34.8% to 8,363
(Loss)/Profit after tax
attributable to members Down 59.6% to (12,311)
Dividends (distributions) Amount per Franked amount
security per security
----------------------
Current period
Interim dividend declared Nil c 0%
Final dividend paid Nil c 0%
--------------------------------- ------------ ----------------------
Previous corresponding period
Interim dividend declared Nil c 0%
Final dividend paid Nil c 0%
--------------------------------- -------------------- --------------
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 $8.363 million (2015: $12.834
million) representing a decrease of 34.8% mainly
due to the timing of pipeline conversion. EBITDA
for the period was a loss of $8.809 million (2015:
EBITDA loss $6.991 million).
The net result of the consolidated entity for
the half year ended 30 April 2016 was a loss
after tax and minority interest for the period
of $12.311 million (2015: $7.712 million loss).
Loss per share was 4.6 cents (2015: loss per
share 2.9 cents).
During the period, there was a net cash outflow
of $2.502 million primarily resulting from a
net outflow from operations of $5.563 million,
investment in the HomeSend joint venture company
of $3.905 million, repayment of the National
Australia Bank loan of $3 million and software
development costs for the Paymobile 3 platform
of $1.014 million, offset by receipt of funds
held in escrow for the HomeSend business divestment
of $5.133 million and proceeds from new borrowings
of $5.845 million. Cash at 30 April 2016 was
$1.997 million.
-----------------------------------------------------
Directors' report
The directors of eServGlobal Limited (the Company) submit
herewith the financial report of eServGlobal Limited and its
controlled entities (the Group) for the half-year ended 30 April
2016. 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:
John Conoley Executive Chairman
Stephen Baldwin Non-executive Director
Thomas Rowe Company Secretary and non-executive Director
Stephen Blundell Non-executive Director (resigned 17 December 2015)
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). The eServGlobal group has operations worldwide.
eServGlobal offers mobile money solutions which put feature-rich
services at the fingertips of users worldwide, covering the full
spectrum of mobile financial services, mobile wallet, mobile
commerce, recharge, promotions and agent management features.
eServGlobal invests heavily in product development, using
carrier-grade, next-generation technology and aligning with the
requirements of more than 65 customers in over 50 countries.
eServGlobal also builds on its extensive experience in the telco
domain to offer a comprehensive suite of sophisticated, revenue
generating Value-Added Services to engage subscribers in a dynamic
manner.
The company is partnering with MasterCard and BICS to build the
HomeSend business, the market leading international remittance
service based on eServGlobal technology and enabling mobile money
transfer in over 50 markets.
eServGlobal has been a source of innovative solutions for mobile
and financial service providers for over 30 years.
The consolidated entity achieved sales revenue for the period of
$8.363 million (2015: $12.834 million) representing a decrease of
34.8% due to the timing of pipeline conversion. EBITDA for the
period was a loss of $8.809 million (2015: EBITDA loss $6.991
million).
The net result of the consolidated entity for the half year
ended 30 April 2016 was a loss after tax and minority interest for
the period of $12.311 million (2015: $7.712 million loss). Loss per
share was 4.6 cents (2015: loss per share 2.9 cents).
During the period, there was a net cash outflow of $2.502
million primarily resulting from a net outflow from operations of
$5.563 million, investment in the HomeSend joint venture company of
$3.905 million, repayment of the National Australia Bank loan of $3
million and software development costs for the Paymobile 3 platform
of $1.014 million, offset by receipt of funds held in escrow for
the HomeSend business divestment of $5.133 million and proceeds
from new borrowings of $5.845 million. Cash at 30 April 2016 was
$1.997 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 98/100, 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
John Conoley
Executive Chairman
London, 29 June 2016
The Board of Directors
eServGlobal Limited
c/- Simpsons Solicitors
Level 2, Pier 8/9
23 Hickson Road,
Millers Point NSW 2000
30 June 2016
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 30 April 2016, 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
Michael Kaplan
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 30 April 2016, and the condensed statement
of profit or loss and other 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 19.
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 30 April
2016 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 review 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 30 April 2016 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.
Material Uncertainty Regarding Going Concern
Without modifying our review conclusion, we draw your attention
to Note 1(c) Going Concern in the half-year financial report which
indicates that the consolidated entity incurred a loss after tax of
$12.215 million and had net cash outflows from operations of $5.563
million during the half-year ended 30 April 2016. These conditions,
along with the matters set forth in Note 1(c) Going Concern,
indicate the existence of a material uncertainty which may cast
significant doubt about the ability of the consolidated entity to
continue as a going concern and therefore, it may be unable to
realise its assets and extinguish its liabilities in the normal
course of business and at the amounts stated in the half-year
financial report.
DELOITTE TOUCHE TOHMATSU
Michael Kaplan
Partner
Chartered Accountants
Sydney, 30 June 2016
Directors' declaration
The directors declare that:
a) based on the matters set out in Note 1(c), 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
John Conoley
Executive Chairman
London, 29 June 2016
Condensed consolidated statement of profit or loss and other
comprehensive income for the half-year ended 30 April 2016
Consolidated
Half-Year Half-Year
Ended Ended
30 April 30 April
2016 2015
$'000 $'000
---------- ----------
Revenue 8,363 12,834
Cost of sales (7,910) (6,422)
---------- ----------
Gross profit 453 6,412
Interest income 24 23
Foreign exchange(loss)/gain 1,878 (510)
Research and development
expenses (1,284) (931)
Sales and marketing expenses (2,296) (3,324)
Administration expenses (4,933) (7,122)
Share of loss of associate (2,651) (1,539)
(Loss)/profit before interest
expense, tax, depreciation
and amortisation (EBITDA) (8,809) (6,991)
Amortisation expense (1,413) (397)
Depreciation expense (48) (71)
(Loss)/profit before interest
expense and tax (10,270) (7,459)
Finance costs (1,679) (164)
Loss before tax (11,949) (7,623)
Income tax expense (266) (23)
---------- ----------
Loss for the period (12,215) (7,646)
========== ==========
Other comprehensive income
(loss), net of tax
Items that may be reclassified
subsequently to profit or
loss
Exchange differences arising
on the translation of foreign
operations (nil tax impact) (2,390) (153)
---------- ----------
Total comprehensive (loss)/profit
for the period (14,605) (7,799)
========== ==========
(Loss)/profit attributable
to:
Equity holders of the parent (12,311) (7,712)
Non controlling interest 96 66
---------- ----------
(12,215) (7,646)
========== ==========
Total comprehensive (loss)/income
attributable to:
Equity holders of the parent (14,684) (7,859)
Non controlling interest 79 60
---------- ----------
(14,605) (7,799)
========== ==========
(Loss)/profit per share:
Basic (cents per share) (4.6) (2.9)
Diluted (cents per share) (4.6) (2.9)
Notes to the Financial Statements are included on pages 12 to
19
Condensed consolidated statement of financial position
as at 30 April 2016
Consolidated
----------------------
31 October
30 April 2015
2016
Note $'000 $'000
----- --------- -----------
Current Assets
Cash and cash equivalents 1,997 4,976
Trade, other receivables
and work in progress 2 15,948 24,403
Deferred sales proceeds 3 - 5,343
Inventories 72 66
Current tax assets 790 107
--------- -----------
Total Current Assets 18,807 34,895
--------- -----------
Non-Current Assets
Investment in associate 27,593 31,473
Property, plant and equipment 54 84
Research & development
tax refund receivable 1,123 976
Other intangible assets
- capitalised research
& development 6,842 6,939
Other non-current assets 4 3,612 3,456
--------- -----------
Total Non-Current Assets 39,224 42,928
--------- -----------
Total Assets 58,031 77,823
--------- -----------
Current Liabilities
Trade and other payables 11,417 19,619
Borrowings 8 - 3,000
Current tax payables 202 235
Provisions 1,238 1,380
Other 5 1,768 1,286
--------- -----------
Total Current Liabilities 14,625 25,520
--------- -----------
Non-Current Liabilities
Borrowings 8 21,832 16,531
Derivative financial liability
- share options at fair
value 2,495 2,058
Provisions 908 943
--------- -----------
Total Non-Current Liabilities 25,235 19,532
--------- -----------
Total Liabilities 39,860 45,052
--------- -----------
Net Assets 18,171 32,771
========= ===========
Equity
Issued capital 9 116,074 116,074
Reserves 10 (2,194) 174
Accumulated losses (96,200) (83,889)
--------- -----------
Equity attributable to
owners of the parent 17,680 32,359
Non controlling interest 491 412
Total Equity 18,171 32,771
========= ===========
Notes to the Financial Statements are included on pages 12 to
19
Condensed consolidated statement of changes in equity
for the half-year ended 30 April 2016
Foreign 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 November
2015 116,074 (2,791) 2,965 (83,889) 32,359 412 32,771
========= ============= =============== ============ ============= ============= =========
Profit/(loss)
for the
period - - - (12,311) (12,311) 96 (12,215)
Exchange
differences
arising
on translation
of foreign
operations - (2,373) - - (2,373) (17) (2,390)
--------- ------------- --------------- ------------ ------------- ------------- ---------
Total comprehensive
income/(loss)
for the
period - (2,373) - (12,311) (14,684) 79 (14,605)
Equity settled
payments - - 5 - 5 - 5
--------- ------------- --------------- ------------ ------------- ------------- ---------
Balance
at 30 April
2016 116,074 (5,164) 2,970 (96,200) 17,680 491 18,171
========= ============= =============== ============ ============= ============= =========
Balance
at 1 November
2014 110,574 (7,066) 2,911 (51,349) 55,070 224 55,294
========= ============= =============== ============ ============= ============= =========
Profit for
the period - - - (7,712) (7,712) 66 (7,646)
Exchange
differences
arising
on translation
of foreign
operations - (147) - - (147) (6) (153)
--------- ------------- --------------- ------------ ------------- ------------- ---------
Total comprehensive
income for
the period - (147) - (7,712) (7,859) 60 (7,799)
Issue of
new shares 5,500 - - - 5,500 - 5,500
Equity settled
payments - - 54 - 54 - 54
--------- ------------- --------------- ------------ ------------- ------------- ---------
Balance
at 30 April
2015 116,074 (7,213) 2,965 (59,061) 52,765 284 53,049
========= ============= =============== ============ ============= ============= =========
Notes to the Financial Statements are included on pages 12 to
19
Condensed consolidated statement of cash flows
for the half-year ended 30 April 2016
Consolidated
Half-Year Half-Year
Ended Ended
30 April 30 April
2016 2015
$'000 $'000
---------- ----------
Cash Flows from Operating
Activities
Receipts from customers 10,362 13,527
Payments to suppliers and
employees (14,969) (15,575)
Interest and other costs
of finance paid (92) (166)
Income tax paid (864) (1,353)
Net cash used in operating
activities (5,563) (3,567)
---------- ----------
Cash Flows From Investing
Activities
Proceeds from HomeSend business
divestment 5,133 -
Investment in HomeSend joint
venture company (3,905) -
Interest received 24 3
Payment for property, plant
and equipment (22) (149)
Software development costs (1,014) (2,758)
---------- ----------
Net cash from/ (used in)
from investing activities 216 (2,904)
---------- ----------
Cash Flows From Financing
Activities
Proceeds from issue of shares - 5,788
Payment for share issue costs - (288)
Proceeds from borrowings 5,845 -
Repayment of bank loan (3,000) -
---------- ----------
Net cash from financing activities 2,845 5,500
---------- ----------
Net (Decrease)/Increase In
Cash and Cash Equivalents (2,502) (971)
Cash At The Beginning Of
The Period 4,976 3,679
Effects of exchange rate
changes on the balance of
cash held in foreign currencies (477) (86)
---------- ----------
Cash and Cash Equivalents
At The End Of The Period 1,997 2,622
========== ==========
Notes to the Financial Statements are included on pages 12 to
19
Notes to the condensed consolidated financial statements
1. Significant accounting policies
(a) 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.
(b) Basis of preparation
The condensed consolidated 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, unless otherwise
noted.
The Company is a company of the kind referred to in ASIC Class
Order 98/100, 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 to 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 2015 annual
financial report for the financial year ended 31 October 2015,
except for the impact of the Standards and Interpretations
described below. These accounting policies are consistent with
Australian Accounting Standards and with International Financial
Reporting Standards.
New, revised or amending Accounting Standards and
Interpretations adopted
The Group adopted all of the relevant new, revised or amending
Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board ('AASB') that are mandatory for the
current reporting period.
The adoption of these Accounting Standards and Interpretations
did not have any significant impact on the financial performance or
position of the Group during the half year ended 30 April 2016 and
are not expected to have any significant impact for the full
financial year ending 31 October 2016. Any new, revised or amending
Accounting Standards or Interpretations that are not yet mandatory
have not been early adopted.
(c) Going concern
The condensed consolidated statement of profit or loss and other
comprehensive income for the financial period ended 30 April 2016
reflects a loss after tax of $12.215 million, and the condensed
consolidated statement of cash flows reflects net cash outflows
from operations of $5.563 million. The Directors have reviewed a
financial budget and cash flow forecast prepared by management for
the period through to 30 June 2017. The cash flow forecast
indicates that the Group will have sufficient funding to operate as
a going concern during the forecast period, and on this basis the
Directors have prepared the financial statements on the going
concern basis.
Notes to the condensed consolidated financial statements
1. Significant accounting policies (continued)
(c) Going concern (continued)
The Directors' assessment of the cash flow forecast includes the
proceeds from an institutional placement announced to the market on
7 June 2016, comprising a firm placement of GBP1.3 million ($2.4
million) which was completed on 16 June 2016 and a conditional
placement of GBP10.7 million ($19.8 million) which is subject to
shareholders approval and other conditions. The purpose of these
funds will be to restructure the existing debt facility (including
payment of related fees), to carry out further internal
restructuring and for working capital. The Group has also announced
an open offer (non renounceable rights issue under Australian law)
to qualifying shareholders of up to GBP3.0 million ($5.5 million)
which funds, if any, will be used to strengthen the Group's balance
sheet position, and subject to working capital requirements, may be
used to further reduce the debt facility. Refer further details on
the share placements in Subsequent Events note 14.
If the Group is unable to generate its expected levels of
operating performance and cash flows through to 30 June 2017, and
obtain shareholder approval and meet other conditions required to
complete the conditional institutional share placement, and if
required, secure additional capital (including proceeds from the
proposed open offer placement) and/or alternative funding,
significant uncertainty would exist as to whether the Group will be
able to continue as a going concern and therefore whether it will
realise its assets and extinguish its liabilities in the normal
course of business and at the amounts stated in the financial
statements.
The financial statements do not include adjustments relating to
the recoverability and classification of recorded asset amounts nor
to the amounts and classification of liabilities that might be
necessary should the Group not continue as a going concern.
Notes to the condensed consolidated financial statements
2. Trade, other receivables and work in progress
30 April 31 October
2016 2015
$'000 $'000
Trade receivables 3,966 11,515
Work in progress 9,102 10,071
Other receivables 409 554
Deposits and prepayments 2,471 2,263
-------------- -----------------
Total trade, other receivables
and work in progress 15,948 24,403
-------------- -----------------
3. Deferred sales proceeds
Deferred sales proceeds totalling $5.3 million,
which related to the sale of the HomeSend business
to the associate company HomeSend SRCL, were
received by the Company on 3 April 2016.
4. Other non-current assets 30 April 31 October
2016 2015
$'000 $'000
Unamortised loan facility
cost 3,612 3,456
--------- -----------
Unamortised loan facility cost relates to related
party shareholder borrowings, and includes loan
establishment costs (net of amortisation) of
$0.390 million (2015: $0.334 million) and fair
value of share options issued associated with
the loans (net of amortisation) of $3.222 million
(2015: $3.122 million). The facility costs are
being amortised on an effective interest basis
over the loan terms.
5. Other Current Liabilities
30 April 31 October
2016 2015
$'000 $'000
Deferred income 1,768 1,286
--------- -----------
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. Accordingly, all
reported information in the financial report relates to this single
segment.
Notes to the condensed consolidated financial statements
7. Issuances, repurchases and repayment of securities
During the current period the company did not issue any shares
(2015: 10,000,000 shares issued raising a total of $5.212 million,
net of expenses.
The company issued 3,000,000 share options over ordinary shares
to its Executive Chairman at an option exercise price of $0.21 per
share, and the vesting date being the earlier of 14 March 2018 or a
change in control of the business or Company.
On 23 March 2016, 8,000,000 options were issued to Henderson as
a facility fee for the loan agreement entered into on the same day
with Alphagen Volantis Fund Limited and the Alphagen Volantis
Catalyst Fund Limited for an interest bearing loan facility of
GBP1million ($1.9 million) which is repayable on 4 June 2017. The
exercise price for these options will be the lesser of 4.375 pence
or a 20% discount to the 60 day Volume Weighted Average Price for a
depository interest in the company on AIM for the period commencing
22 March 2016. The expiry date of these options is 5 October
2020.
The company cancelled 631,945 expired share options over
ordinary shares under its executive and employee share option plan
during the period.
No employee share options were exercised in the period (2015:
800,000 employee share options exercised at an option price of
$0.36 per share, raising a total of $0.288 million).
8. Borrowings
30 April 31 October
2016 2015
$'000 $'000
Interest bearing loans
Current (a) - 3,000
Non-current (b) 21,832 16,531
21,832 19,531
--------- -----------
(a) The National Australia Bank loan of $3 million was repaid in full on 23 March 2016.
(b) Borrowings at 30 April 2016 represent $21.832 million loans
from related party shareholders Alphagen Volantis Fund Limited and
Alphagen Volantis Catalyst Fund Limited. The loans are interest
bearing and are secured by way of a fixed and floating charge over
the total assets of the Group. The total amortised cost of the loan
as at 30 April 2016 is $18.220 million being $21.832 million per
above less unamortised facility cost of $3.612 million shown in
other non-current assets at Note 4.
Notes to the condensed consolidated financial statements
9. Issued Capital
31 October
30 April 2016 2015
$'000 $'000
265,774,052 fully paid
ordinary shares (31 October
2015: 265,774,052) 116,074 116,074
-------------- -----------
30 April 2016 31 October
2015
No. $'000 No. $'000
'000 '000
-------- -------- -------- --------
Fully Paid Ordinary Shares
Balance at the beginning
of the financial period 265,774 116,074 254,974 110,574
Issue of shares under
the Company's employee
share option plan - - 800 288
Shares issued in the period - - 10,000 5,500
Costs of share issue - - - (288)
Balance at the end of
the financial period 265,774 116,074 265,774 116,074
10. Reserves
30 April 2016 31 October
2015
$'000 $'000
Employee equity-settled
benefit 2,970 2,965
Foreign currency translation (5,164) (2,791)
-------------- -----------
(2,194) 174
-------------- -----------
Notes to the condensed consolidated financial statements
11. Financial Instruments
This note provides information about how the Group determines
fair values of various financial assets and financial
liabilities.
11.1 Fair value of the Group's financial assets and financial
liabilities that are measured at fair value on a recurring
basis
Derivative financial liability of $2.495 million relation to
share options associated with non-current borrowings is measured at
fair value (31 October 2015: $2.058 million). None of the Group's
other financial assets and financial liabilities are measured at
fair value as at 30 April 2016.
11.2 Fair value of financial assets and financial liabilities
that are not measured at fair value on a recurring basis (but fair
value disclosures are required)
The directors consider that the carrying amounts of the
following financial assets and financial liabilities recognised in
the condensed consolidated financial statements approximate their
fair values:
30 April 31 October
2016 2015
$'000 $'000
Financial assets
Trade, other receivables and
work in progress 15,948 24,403
Deferred sales proceeds - 5,343
Cash and cash equivalents 1,997 4,976
Financial liabilities
Trade and other payables 11,417 19,619
Borrowings 21,832 19,531
12. Dividends
Half Year ended Half Year Ended
30 April 2016 30 April 2015
Cents Total Cents Total
per share $'000 per share $'000
Fully paid ordinary
shares
Recognised amounts
Final dividend paid
in respect of prior
financial year - - - -
----------- ------- ----------- -------
Notes to the condensed consolidated financial statements
13. Investment in associate
Details of the material investment in associate at the end of
the reporting period are as follows:
Name Principal Place of Proportion of ownership
of associate activity incorporation interest and voting
and principal rights held by the
place of Group
business
--------------- ------------------- ---------------- --------------------------
30 April 31 October
2016 2015
--------------- ------------------- ---------------- ----------- -------------
Provision
Homesend of international
SRCL mobile money Brussels,
(a) services Belgium 35% 35%
--------------- ------------------- ---------------- ----------- -------------
a) HomeSend SRCL was formed on 3 April 2014. The directors have
determined that the Group exercises significant influence over
HomeSend SRCL by virtue of its 35% voting power in shareholders
meetings and its contractual right to appoint two out of six
directors to the board of directors of that company. The associate
is accounted for using the equity method in these condensed
consolidated financial statements.
b) Reconciliation of the carrying amount of the investment in associate:
30 April 31 October
2016 2015
$000 $000
Opening balance 31,473 27,777
Investment in associate (i) - 5,412
Share of current period loss
of the associate (2,651) (3,831)
Effects of foreign currency
exchange movements (1,229) 2,115
--------- -----------
Closing balance 27,593 31,473
--------- -----------
(i) On 5(th) October 2015 the company agreed to invest
additional $5.412 million with full voting rights, in the HomeSend
joint venture company so as to maintain its shareholding at
35%.
The company paid 0.875 million Euros ($1.353 million) on 14(th)
October 2015 and the balance of 2.625 million Euros ($4.059
million) on 4 April 2016.
Notes to the condensed consolidated financial statements
14. Subsequent events
The balance remaining of GBP0.5 million ($0.9 million) on the
GBP1 million ($1.9 million) loan facility agreed with Alphagen
Volantis Fund Limited and the Alphagen Volantis Catalyst Fund
Limited on 23 March 2016 was drawn down on 20 May 2016.
On 7 June 2016, the Company announced an institutional placement
of 300,000,000 new fully paid ordinary shares at a price of 4 pence
per share (or, for placees in Australia, AUS$0.08 per share) to
raise GBP12.0 million ($22.2 million) (before expenses). The
Company also announced an open offer (non-renounceable rights issue
under Australian law) of up to 74,409,944 new fully paid ordinary
shares at a price of 4 pence/AUS$0.08 per share to raise up to
GBP2.98 million ($5.96 million). The open offer is not
underwritten.
The net proceeds of the placings will be used to repay and
refinance debt, accelerate sales and marketing and reduce costs in
the core business and for general working capital purposes.
Of the 300,000,000 new fully paid ordinary shares placed,
31,866,107 shares were issued on 16 June 2016 raising GBP1.27
million ($2.36 million) (before expenses).
The issue of the balance of the shares under the institutional
placement (Conditional Placing Shares) is conditional on, inter
alia, the approval of the issue of the Conditional Placing Shares
by shareholders and the issue of shares to the Company's secured
lenders as a part of the Debt Restructure described below. The
Company has called an extraordinary general meeting to occur on 22
July 2016 to approve the issue of the Conditional Placing Shares
and the Debt Restructure. If approved, the Conditional Placing
Shares will be issued on 25 July 2016.
The Company has agreed with its Lenders (Alphagen Volantis Fund
Limited and Alphagen Volantis Catalyst Limited) a restructuring of
its existing loan facilities, conditional on, inter alia, the
approval of shareholders to (i) issue the Conditional Placing
Shares and (ii) complete the Debt Restructure. Under the Debt
Restructure, the existing indebtedness to the Lenders will be
discharged and the loan facilities will be replaced with a new
loan, pursuant to which the Lenders shall make available a term
loan of GBP7 million ($13 million) due on 30 June 2019. The Lenders
have agreed to subscribe for 110,141,050 of the Conditional Placing
Shares for a total consideration of GBP4.41 million ($8.15 million)
and the Company and the Lenders have agreed that such amount shall
be satisfied by the waiver of GBP4.41 million of the existing
indebtedness. The Lenders will receive a rearrangement fee of
GBP1.80 million ($3.33 million) for entering into the Debt
Restructure. Lenders have also agreed to forfeit all the existing
unlisted options on completion of the Debt Restructure.
Other information required to be given to ASX under listing rule
4.2A.3
Net tangible assets Current period 31October
per security 2015
Net tangible assets 4.3 cents 9.7 cents
per security
-------------------- --------------- -----------
Dividends
Amount Amount Franked Amount Date paid/
per amount per security payable
security per security of foreign
at 30% source
tax dividend
-----------
Interim dividend: Nil N/A N/A N/A N/A
Current year
Previous period Nil N/A N/A N/A N/A
-----------
Final dividend
paid in respect
of previous financial
year: Nil N/A N/A N/A N/A
Current period:
Final dividend
Previous corresponding Nil N/A N/A N/A N/A
period:
Special dividend
Final dividend
------------------------- ------- ---------- -------------- -------------- -----------
The dividend or distribution plans shown below
are in operation.
N/A.
---------------------------------------------------
The last date(s) for receipt
of election notices for N/A
the dividend or distribution
plans
-------
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR FBLBXQQFFBBD
(END) Dow Jones Newswires
June 30, 2016 02:01 ET (06:01 GMT)
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