TIDMESG
RNS Number : 9262V
eServGlobal Limited
18 December 2013
eServGlobal Limited (eServGlobal or the "Company")
eServGlobal Preliminary Results (LSE:AIM) and Appendix 4E (ASX):
FY2013
Paris: 19 December 2013
eServGlobal (LSE: ESG & ASX: ESV), the provider of
end-to-end mobile financial services to emerging markets, is
pleased to announce its preliminary results and ASX Appendix 4E for
the financial year ended 31 October 2013.
FINANCIAL HIGHLIGHTS
-- Net profit after tax of A$10.4m (GBP6.6m) compared to a prior
year loss of A$15.6m (GBP10.2m)
-- FY2013 adjusted EBITDA profit of A$1.7m (GBP1.1m) compared to
an EBITDA loss of A$1.9m (GBP1.6m) in FY2012
-- FY2013 revenues up 17% to A$31.0m (GBP19.6m) (FY2012: A$26.5m
excluding USP legacy revenues of A$1.6m generated in FY2012)
-- FY2013 gross margin up 6% to 62% (FY2012: 56%)
-- Total costs decreased 2% to A$29.3m (GBP18.6m) (FY2012:
A$30.0m). Restructuring is now largely complete
-- Cash and cash equivalents at 31 October 2013 of A$4.9m
excluding restricted cash of A$1.0m (FY2012: A$3.8m)
FY13 FY13 FY12 FY12
Summary Financials Full Full Full Full
Year Year Year Year
A$M GBPM(+) A$M GBPM(+)
Revenue 31.0 19.6 28.1 18.3
Cost of sales 11.8 7.5 12.3 8.0
Gross profit 19.2 12.2 15.8 10.4
Adjusted Operating
Costs* 17.5 11.1 17.7 11.7
Adjusted EBITDA* 1.7 1.1 -1.9 -1.3
Net Interest -0.4 -0.2 -1.0 -0.7
Amortization -1.9 -1.2 -4.7 -3.1
Depreciation -0.5 -0.3 -0.7 -0.4
Adjusted PBT* -1.1 -0.6 -8.3 -5.5
Reported PBT 4.5 2.8 -15.4 -10.1
Income tax 5.9 3.7 -0.2 -0.1
PAT 10.4 6.6 -15.6 -10.2
OPERATIONAL HIGHLIGHTS
-- 100+ customers using eServGlobal's mobile money,
international remittance, recharge and value-added services
technologies including HomeSend (+16% in the past year).
-- 10 new core mobile money business customers, bringing the
total number of core business customers to 65 (excluding
HomeSend).
o Significant group frame agreement with the Zain Group
resulting in estimated revenue of US$12m over three years
-- Continued expansion of footprint within the existing customer base
o Four new product deployments at existing customers in addition
to regular extension projects including NFC payments and companion
cards
-- HomeSend exceeded 1.2 billion subscribers under contract
coverage and is now in the next strategic phase of development,
deploying live corridors. As of November 2013, the HomeSend service
is connecting 51 countries for remittance, exceeding the target for
50 deployed countries by year end, as well as 76 countries for
airtime transfer resulting in over 690 live corridors for both
services.
-- Sizable new contracts signed just prior to year-end have
contributed to a healthy backlog of work and a positive outlook for
FY14.
Post period end:
eServGlobal has today announced a joint venture with MasterCard
and BICS to take HomeSend into its next phase of global expansion.
The joint vVenture will enable cross border remittances and
domestic person-to-person (P2P) transfers to and from mobile money
accounts, bank accounts or cash outlets. MasterCard will have a
majority share of the joint venture while eServGlobal will hold
35%. This investment by MasterCard validates the work both
eServGlobal and BICS have undertaken during their five-year
strategic partnership and will propel the service to a new
operating level.MasterCard will contribute cash for its interest in
the joint venture with eServGlobal to receive EUR9m in cash of
which EUR3.45m are subject to a two year escrow arrangement.
Paolo Montessori, CEO and Managing Director, eServGlobal, said:
"Our efforts over the last few years have seen us grow the
business, reduce our cost structure and return to EBITDA
profitability. Our continued investment in innovative product
development has ensured we remain competitive and relevant to our
customers' needs. We are well positioned to continue the forward
momentum that we have worked so hard to achieve and look forward to
the year ahead.
"Separately announced today, our joint venture agreement with
MasterCard and BICS for HomeSend validates our strategic approach
to align ourselves with the world's largest payment organisations
in the financial, telecommunications, global roaming and
international remittances sectors."
+Average exchange rate was 0.633 GBP to AUD (FY2012 0.655)
*Excludes foreign exchange gains of A$8.0m (FY2012 loss of
A$3.4m), non-recurring costs of A$2.0m (FY2012 A$2.9m) and share
based payments of A$0.5m (FY2012 A$0.6m)
For further information, please contact:
eServGlobal www.eservglobal.com
Tom Rowe, Company Secretary T: +61 (0)2 8014
Alison Cheek, Communications Manager 5050
investors@eservglobal.com
Cenkos Securities plc www.cenkos.com
Ivonne Cantú /Stephen Keys T: +44 (0) 20 7397
(Nomad) 8980
Charles Stanley Securities www.csysecurities.com
Dugald Carlean / Paul Brotherhood T: +44 (0) 20 7149
6000
Newgate Threadneedle www.newgatethreadneedle.com
Hilary Millar / Caroline Evans-Jones T: +44 (0) 20 7653
/ Josh Royston / Jasper Randall 9850
About eServGlobal
eServGlobal (LSE: ESG, ASX:ESV) offers mobile money solutions
which put feature-rich mobile financial services at the fingertips
of users worldwide, covering the full spectrum of mobile wallet,
mobile commerce, recharge and agent management features.
eServGlobal invests heavily in product development, using
carrier-grade, next-generation technology and aligning with the
requirements of 65 customers in 50 countries. eServGlobal is
partnering with MasterCard and BICS to build the HomeSend joint
venture, 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 30 years.
Follow us on Twitter @eServGlobal.
INTRODUCTION
In the past year eServGlobal has consolidated its position as
one of the top mobile money vendors in the industry. The Company is
widely regarded as a leading technology provider of end-to-end
mobile money and mobile financial service solutions for emerging
markets. The past year has seen the core business win new customers
along with signing a significant Group framework agreement with the
Zain group. This year we have also expanded our product offering
into areas such as NFC (Near Field Communications), companion cards
and mobile financial services.
The achievements in the core business have been complemented
with the continued rollout of the HomeSend international mobile
money transfer hub. This continued success has been the driving
force behind the joint venture with MasterCard and BICS announced
today. The past year has seen HomeSend progress to its next
strategic stage - customer deployments. After initially setting a
target of live corridors in 50 countries by year end, HomeSend
exceeded this goal with corridors live in 51 countries for
remittance and 76 countries for airtime transfer as of November
2013. The individual service providers in these countries are
connected via more than 690 corridors.
Facilitated by the new HomeSend joint venture with MasterCard
and BICS, eServGlobal's will continue to offer international
remittance as part of it mobile money product portfolio.
eServGlobal is a 35% shareholder in the JV. This JV will accelerate
HomeSend's move into a new phase, one in which the hub will become
open to new markets while enabling the full weight of MasterCard's
marketing and distribution network to be brought to bear.
OPERATIONAL REVIEW
Overview
Our efforts over the last few years have seen us reduce our cost
structure and return to EBITDA profitability. The new contracts
signed in FY13 have contributed to our top line growth and to a
healthy backlog of work which will flow into FY14.
In our core mobile money business, we continued our efforts to
build an eco-system of partners, including an agreement with
MasterCard to join their mobile money partnership program. Our
focus on partnerships led to securing new projects in NFC payments,
while our partnership with MasterCard enabled us to answer
requirements for a mobile money project which will offer a
companion card.
Mobile money and mobile financial services:
eServGlobal's 'core' business consists of a comprehensive suite
of mobile money and mobile financial solutions for domestic
transactions in emerging markets. We bridge the telco and financial
service worlds offering 'end-to-end' and 'any account to any
account' mobile financial services. Our mobile money and mobile
financial service solutions are being delivered to customers
worldwide.
eServGlobal has evolved through the diversification of payment
means and draws on 30 years' experience working with telcos to find
innovative ways for subscribers to store and transfer value.
Through the PayMobile platform, eServGlobal provides a seamless
migration path from traditional voucher and electronic top-up for
prepaid subscribers in emerging markets to a mobile money and
mobile financial service solution.
In the past year, eServGlobal consolidated its position as a top
vendor in this landscape through the addition of 10 new customers
for the core mobile money business, including the high profile
announcement of the Zain Group selection of eServGlobal as their
supplier for electronic recharge and mobile money.
Developments and customer growth through the year:
-- Significant 3-year framework agreement with the Zain Group,
valued at over US$12m, to deliver a mobile money and electronic
top-up solution to the eight Zain affiliates in the Middle East and
Africa. Zain Group coverage extends to more than 44 million
subscribers and includes several markets where over 90% of the
population does not have access to banking facilities.
-- Expanded our footprint within the Ooredoo (QTel) group
through a strategic deal with Indosat, an Indonesian Mobile Network
Operator (MNO) and a member of the Ooredoo Group. eServGlobal will
supply its PayMobile platform to Indosat to provide voucher
recharge for its subscriber base of more than 50 million users.
Indonesia is one of the largest mobile markets in South East Asia
and recharge is an essential feature in this predominantly prepaid
market.
-- Deployment of our first NFC project for an operator in the
Middle East, with our partner Airtag. The project featured an NFC
transport application with an architectural framework for an easy
upgrade to a full mobile wallet solution, enabling bill payment,
person-to-person transfers and loyalty schemes.
-- In addition eServGlobal was named as a member of MasterCard's
Mobile Money Partnership Program, an initiative aimed at helping
the more than 2.5 billion financially underserved consumers
worldwide gain access to mainstream financial services through
their mobile phone.
HomeSend
As separately announced today, the joint venture between
eServGlobal, MasterCard and BICS comes on the back of a very
successful year for the HomeSend hub. This investment by MasterCard
validates the work both eServGlobal and BICS have undertaken during
their five-year strategic partnership and will propel the service
to a new operating level.
Highlights:
-- Exceeded the objective for live corridors connecting 50
countries. As of November 2013, live HomeSend corridors connected
51 countries for remittance and 76 countries for airtime transfer.
The individual service providers in these countries are connected
by over 690 live corridors.
-- Japanese Mobile Transfer Operator (MTO), Brastel Remit joined
the hub and will launch new sending remittance corridors from Japan
to key markets in Russia, CIS countries, the Philippines and
Africa.
-- Lycamoney and MTN launched remittance corridors between the
UK & Ghana, allowing Lycamoney Card users in the UK to send
money instantly and cost effectively to their relatives and friends
using MTN Mobile Money services in Ghana.
-- Malaysian (Mobile Virtual Network Operator) (MVNO),
Merchantrade joined the hub extending access to key Asian receiving
markets. Merchantrade is Malaysia's leading licensed money services
company, offering money transfer services with over 170,000 payout
locations as part of its strong and rapidly expanding payout
presence across South Asia and South East Asia.
-- Telesom, the leading mobile network operator in Somaliland,
launched remittance services through HomeSend. Telesom operates a
successful mobile money program called Telesom ZAAD which was
recognised by the GSMA as a 'Mobile Money Sprinter', acknowledged
as one of the most successful mobile money services for the
unbanked in the world.
-- Post Finance, one of the largest financial institutions in
Switzerland, launched services with HomeSend to allow subscribers
to remit money via e-banking.
-- WorldRemit, the world's largest dedicated online money
transfer business, joined HomeSend to further extend its services
into emerging markets.
MARKET REVIEW
Domestic mobile money services: Mobile money and mobile
financial services is a large market which continues to expand,
year-on-year exceeding analysts' growth expectations. This market
expansion has been particularly strong in emerging markets where
mobile penetration rates are high and access to traditional
financial services is limited. In these markets, the mobile network
operators and financial service providers are moving quickly to
position themselves to be able to extend these new services to
their users. eServGlobal is well positioned to service this growing
market, with extensive experience in holding customer balances and
an in-depth understanding of the mobile infrastructure.
Berg Insight predicts the total value of mobile money
transactions to grow from US$44b in 2011 at a CAGR of 44 percent to
US$395b in 2017 (Berg Insight, Mobile Money in Emerging Markets,
2013).
The GSMA's Mobile Money for the Unbanked (MMU) project reports
that as of November 2013 there are 208 live deployments which
extend mobile-based financial services in developing and emerging
markets and a further 117 planned deployments. This represents 38%
percent growth during 2012 and a 90% increase since 2011,
signifying the growing demand for mobile financial services in
markets where traditional financial services are unable to reach
all users.
We are also starting to see the beginning of a systems
replacement market; half of the GSMA's fourteen 'mobile money
sprinters' are in the process of migrating or are planning to
migrate their platforms to a more scalable and flexible platform.
As we turn the corner into a new age of mobile money, the trend is
towards a more mature, considered and holistic approach to
deployments. Operator groups are seeking cost efficiency and are
increasingly looking for a single vendor strategy.
International Remittance: The World Bank estimates that by 2014,
around 75 million foreign workers will use m-remittance to transfer
payments from Europe, the US, Australia, Japan and the United Arab
Emirates to India, China, Mexico, Indonesia and the Philippines.
The developing world is expected to receive US$414b in migrant
remittances in 2013, an increase of 6.3 percent over the previous
year. This is projected to rise to US$540b by 2016. Globally, the
world's 232 million international migrants are expected to remit
earnings worth US$550b this year and over US$700b by 2016.
Juniper Research recently reported that, nearly 400m mobile
phone users worldwide are expected to use their handsets for mobile
money transfer by 2018, up from just under 150m this year. Growth
is expected to be driven primarily by deployments of domestic money
transfer services, with multinational network operators
increasingly launching products on a group-wide rather than an ad
hoc basis.
According to the findings, the launch of mobile money services,
primarily in emerging markets, is an evolutionary process in which
several steps are necessary to achieve full financial inclusivity.
Once the mobile wallet has been deployed, the first services to be
introduced (almost always at the same time as wallet deployment)
involve remittance, whether in the form of airtime or in a cash
transaction. Following this, mobile money services typically move
to offer payment facilities, both bill payment and payment at a
merchant and then to full financial inclusivity by offering
micro-insurance, loan disbursement and loan repayment.
FINANCIAL REVIEW
The full unaudited accounts are presented in the Appendix 4E
below.
OUTLOOK
The focus for the core business in the coming year will be to
consolidate our market position and continue our organic growth as
well as to deliver successful implementations with innovative
services to our customers while successfully completing the
transition of the HomeSend business to the joint venture.
The new contracts signed in FY13 have contributed to a healthy
backlog of work which will flow into FY14. This, combined with a
strengthened financial position and continued strong trading in the
early months of the new year, leave the Board confident in the
future prospects for the business.
Appendix 4E
Preliminary Final Report
for the year ended 31 October 2013
eServGlobal Limited
ABN 59 052 947 743
1. Reporting Period
Current reporting period : Financial year ended 31 October
2013
Previous reporting period : Financial year ended 31 October
2012
2. Results (unaudited) for announcement to the market
Results A$ '000
--------------------------------------- --------------------------------------------
--
Revenue Up -- 10.4% to -- 31,003
--
Profit/(Loss) after tax Up -- >100% to -- 10,374
Profit/(Loss) after tax attributable --
to members Up -- >100% to -- 10,248
Dividends (distributions) Amount per Franked amount
security per security
------------------------------
Current period
Interim dividend Nil c 0%
Final dividend Nil c 0%
--------------------------------------- ------------ ------------------------------
Previous corresponding period
Interim dividend Nil c 0%
Final dividend Nil c 0%
--------------------------------------- ------------ ------------------------------
Record date for determining -- -
entitlements to the dividend.
--------------------------------------------
Brief explanation of the figures above
The consolidated entity achieved sales revenue for
the year of $31.0 million (2012 $28.1 million).
The EBITDA profit was $7.3 million after restructuring
costs of $2.0 million, foreign exchange gains of $8.0
million and share based payments of $0.5 million (2012
EBITDA loss $8.7 million after restructuring costs
of $2.9 million, foreign exchange losses of $3.4 million
and share based payments of $0.6 million). The net
result of the consolidated entity for the year to 31
October 2013 was a profit after tax and minority interest
for the period of $10.3 million (2012 loss after tax
and minority interest $15.7 million). Included in this
result was an income tax credit of $5.9 million (2012
income tax expense of $0.2 million). Earnings per share
were 4.3 cents (2012: loss per share: 8.0 cents).
The operating cash flow for the period was a net outflow
of $8.9 million. Total cash flow for the period was
a net inflow of $0.9 million. Cash at 31 October 2013
was $4.9 million.
Subsequent Events
On 19 December 2013 eServGlobal announced an agreement
to create a new joint venture with MasterCard and BICS
(eServGlobal's current partner in HomeSend) for the
international mobile money transfer service, HomeSend.
Under the terms of the agreement, eServGlobal and BICS
will contribute all of the assets, including staff,
that are directly related to the HomeSend business
into a newly formed company ("NewCo"). Following the
transaction, MasterCard will own 55% of NewCo, eServGlobal
will own 35% and BICS will own 10%. Based on the initial
shareholdings, MasterCard will be entitled to appoint
three directors to the Board of NewCo, eServGlobal
will be entitled to make two appointments and BICS
will be entitled to nominate one director.
MasterCard will contribute cash for its interest in
NewCo with eServGlobal to receive EUR9.0m ($13.6 million)
in cash, which includes EUR3.45 million ($5.21 million)
to be held in escrow, net of a pro rata of NewCo's
estimated working capital requirements for the medium
term. In addition, MasterCard will enter into a commercial
agreement with HomeSend which will have an initial
duration of three years and automatic yearly renewal
thereafter. The commercial agreement will require MasterCard
to use its best endeavors to promote the HomeSend service
utilising MasterCard's sales channels.
There are conditions precedent to the creation of the
HomeSend joint venture and those conditions, together
with a summary of the material terms and conditions
of the HomeSend joint venture have been included in
the regulatory announcement dated 19 December 2013.
The assets attributable to the HomeSend business (including
the allocated goodwill component) have been classified
as "Assets classified as held for sale" in the Consolidated
Statement of Financial Position as at 31 October 2013.
The creation of the HomeSend joint venture has given
rise to an income tax credit, and deferred tax asset,
of EUR4.7 million ($7.2 million) at 31 October 2013.
---------------------------------------------------------------
3. Consolidated statement of profit or loss and other comprehensive income
Year Ended Year Ended
31 Oct
2013 31 Oct 2012
Note $'000 $'000
----------- -------------
Revenue 31,003 28,070
Cost of sales (11,789) (12,267)
----------- -------------
Gross profit 19,214 15,803
Interest income 55 389
Foreign exchange gain/(loss) 8,024 (3,387)
Research and development
expenses (2,717) (2,289)
Sales and marketing expenses (4,683) (6,132)
Administration expenses (12,614) (13,040)
Earnings/(Loss) before interest
expense, tax,
depreciation and amortisation 7,279 (8,656)
Amortisation expense (1,875) (4,704)
Depreciation expense (468) (637)
Earnings/(Loss) before interest
expense and tax 4,936 (13,997)
Interest expense (441) (1,405)
Profit/(Loss) before tax 4,495 (15,402)
Income tax credit/(expense) 5,879 (187)
----------- -------------
Profit/(Loss) for the year 10,374 (15,589)
=========== =============
Other comprehensive income/(loss)
Items that may be reclassified
subsequently to profit or
loss:
Exchange differences arising
on the translation of foreign
operations (nil tax impact) (4,475) 1,277
----------- -------------
Total comprehensive income/(loss)
for the year 5,899 (14,312)
=========== =============
Profit/(Loss) attributable
to:
Equity holders of the parent 10,248 (15,715)
Non controlling interest 126 126
----------- -------------
10,374 (15,589)
=========== =============
Total comprehensive income/(loss)
attributable to:
Equity holders of the parent 5,784 (14,438)
Non controlling interest 115 126
----------- -------------
5,899 (14,312)
=========== =============
Earnings/(Loss) per share:
Basic (cents per share) 4.3 (8.0)
Diluted (cents per share) 4.2 (8.0)
4. Consolidated statement of financial position
31 Oct 2013 31 Oct 2012
Note $'000 $'000
----- ------------ ------------
Current Assets
Cash and cash equivalents 4,909 3,794
Trade and other receivables 21,846 14,094
Inventories 74 158
Current tax assets 4,272 90
------------ ------------
31,101 18,136
Assets classified as held
for sale 13 7,754 -
------------ ------------
Total Current Assets 38,855 18,136
------------ ------------
Non-Current Assets
Property, plant and equipment 482 912
Deferred tax assets 10,325 6,005
Goodwill 3,523 5,878
Other intangible assets - 3,508
------------ ------------
Total Non-Current Assets 14,330 16,303
------------ ------------
Total Assets 53,185 34,439
------------ ------------
Current Liabilities
Trade and other payables 8,143 7,816
Borrowings 7 3,000 1,200
Current tax payables 150 69
Provisions 1,800 1,724
Deferred revenue 1,989 2,125
------------ ------------
Total Current Liabilities 15,082 12,934
------------ ------------
Non-Current Liabilities
Borrowings 7 - 6,000
Provisions 749 431
------------ ------------
Total Non-Current Liabilities 749 6,431
------------ ------------
Total Liabilities 15,831 19,365
------------ ------------
Net Assets 37,354 15,074
============ ============
Equity
5,
Issued capital 6 106,695 90,770
Reserves 5 (4,090) (82)
Accumulated Losses (65,451) (75,699)
------------ ------------
Parent entity interest 37,154 14,989
Non controlling interest 200 85
Total Equity 37,354 15,074
============ ============
5. Consolidated statement of changes in equity
Foreign Employee Attributable
Currency equity-settled to owners Non
Issued Translation benefits Accumu-lated of the controlling
Capital Reserve Reserve Losses parent Interest Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000
--------- ------------- ---------------- -------------- ------------- ------------- ---------
Balance at 1
November
2012 90,770 (2,099) 2,017 (75,699) 14,989 85 15,074
========= ============= ================ ============== ============= ============= =========
Profit for the
year - - - 10,248 10,248 126 10,374
Exchange
differences
arising on
translation
of foreign
operations - (4,464) - - (4,464) (11) (4,475)
--------- ------------- ---------------- -------------- ------------- ------------- ---------
Total
comprehensive
income for the
year (net of
tax) - (4,464) - 10,248 5,784 115 5,899
--------- ------------- ---------------- -------------- ------------- ------------- ---------
Issue of new
shares
(Note 6) 15,925 - - - 15,925 - 15,925
Equity settled
payments - - 456 - 456 - 456
--------- ------------- ---------------- -------------- ------------- ------------- ---------
Balance at 31
October 2013 106,695 (6,563) 2,473 (65,451) 37,154 200 37,354
========= ============= ================ ============== ============= ============= =========
Balance at 1
November
2011 90,770 (3,376) 1,393 (59,984) 28,803 70 28,873
========= ============= ================ ============== ============= ============= =========
Loss for the
year - - - (15,715) (15,715) 126 (15,589)
Exchange
differences
arising on
translation
of foreign
operations - 1,277 - - 1,277 - 1,277
--------- ------------- ---------------- -------------- ------------- ------------- ---------
Total
comprehensive
loss for the
year
(net of tax) - 1,277 - (15,715) (14,438) 126 (14,312)
--------- ------------- ---------------- -------------- ------------- ------------- ---------
Payment of
dividends - - - - - (111) (111)
Equity settled
payments - - 624 - 624 - 624
Balance at 31
October 2012 90,770 (2,099) 2,017 (75,699) 14,989 85 15,074
========= ============= ================ ============== ============= ============= =========
6. Issue of new shares
The company issued a total of 52,198,291 shares during the year
(2012: nil) at $0.32 per share, raising a total of $15.925m net of
expenses. The Company now has 249,045,997 ordinary shares on
issue.
7. Borrowings
During the year the remaining $7.2 million shareholder loans
were fully repaid. The company entered into a bank loan facility
agreement for $3.0 million which was drawn down in full on 14(th)
June 2013. The loan is secured by means of a fixed and floating
charge over the whole of the assets and undertakings of eServGlobal
Limited and is due for repayment on 30(th) April 2014.
8. Consolidated statement of cash flows
Year Ended Year Ended
31 Oct 2013 31 Oct 2012
$'000 $'000
------------- -------------
Cash Flows from Operating
Activities
Receipts from customers 23,851 30,182
Payments to suppliers and
employees (31,058) (42,083)
Interest and other finance
cost paid (591) (1,536)
Income tax paid (1,088) (7,813)
Net cash used in operating
activities (8,886) (21,250)
------------- -------------
Cash Flows From Investing
Activities
Proceeds from asset disposal
escrow deposit - 23,307
Interest received 11 562
Payment for property, plant
and equipment (111) (140)
Software development costs (1,839) (1,826)
Net cash (used in)/provided
by investing activities (1,939) 21,903
------------- -------------
Cash Flows From Financing
Activities
Proceeds from issue of shares 16,802 -
Payment for share issue costs (877) -
Dividend paid by controlled
entity to non-controlling
interest - (111)
Proceeds from borrowings 3,000 2,500
Repayment of borrowings (7,200) (9,300)
Net cash provided by/(used
in) financing activities 11,725 (6,911)
------------- -------------
Net increase/(decrease) in
Cash and Cash Equivalents 900 (6,258)
Cash At The Beginning Of The
Year 3,794 10,129
Effects of exchange rate changes
on the balance of cash held
in foreign currencies 215 (77)
------------- -------------
Cash and Cash Equivalents
At The End Of The Year 4,909 3,794
============= =============
8.1 Notes to the consolidated statement of cash
flows
31 Oct 31 Oct
2013 2012
$'000 $'000
a) Reconciliation of
cash
Cash and cash equivalents 4,909 3,794
---------- ---------
Year Ended Year Ended
31 Oct 31 Oct
2013 2012
$'000 $'000
b) Reconciliation of
profit/(loss) for the
year to net cash flows
from operating activities
Profit/(Loss) for the
year 10,374 (15,589)
Interest received (11) (562)
Depreciation of non-current
assets 468 637
Amortisation of non-current
assets 1,875 4,704
(Profit)/Loss on disposal
of non-current assets (10) 123
Foreign exchange (gain)/loss,
including changes in
foreign currency net
assets and liabilities (6,534) 2,290
Equity settled share-based
payments 456 624
Proceeds from asset disposal
escrow deposit - (23,307)
(Increase)/decrease in
current income tax balances (4,101) (6,835)
(Increase)/decrease in
deferred tax balances (4,320) (1,435)
Changes in net assets
and liabilities:
- (Increase)/decrease
in assets:
- Trade Receivables (7,752) 26,331
- Inventories 84 12
Increase/(decrease) in
liabilities:
- Trade and other payables 327 (7,428)
- Provisions 394 (747)
- Other liabilities (136) (68)
Net cash used in operating
activities (8,886) (21,250)
----------- -----------
9. Net Tangible Assets per security
31 October 31 October
2013 2012
Net tangible assets -- 10.5 cents -- 2.9 cents
per security
-------------------- -------------- -------------
10. Dividends
Amount Amount Franked Amount Date
per amount per security paid/
security per security of foreign payable
at 30% source
tax dividend
----------------------------------
Interim -- -- -- -- --
dividend: Nil N/A N/A N/A N/A
Current
year
Previous -- -- -- N/A -- --
year Nil N/A N/A N/A
----------------------------------
Final -- -- -- -- --
dividend: Nil N/A N/A N/A N/A
Current
year
Previous -- -- -- -- --
year Nil N/A N/A N/A N/A
----------- ---------------------------------- ---------------------------------- ---------------------------------- ---------------------------------- ----------------------------------
There are no Dividend Reinvestment Plans.
11. Control gained over entities
N/A
11.1 Loss of control over entities
N/A
12. Details of associates and joint venture entities
Name of entity Percentage of Aggregate share
ownership interest of net profit
held at end of (loss) contributed
period to the reporting
entity
------------------------- -------------------------
Current Previous Current Previous
period corresponding period corresponding
period period
$A'000 $A'000
--------------- -------- --------------- -------- ---------------
Total -- N/A -- N/A -- N/A -- N/A
--------------- -------- --------------- -------- ---------------
13. Subsequent Events
On 19 December 2013 eServGlobal announced an agreement to create
a new joint venture with MasterCard and BICS (eServGlobal's current
partner in HomeSend) for the international mobile money transfer
service, HomeSend. Under the terms of the agreement, eServGlobal
and BICS will contribute all of the assets, including staff, that
are directly related to the HomeSend business into a newly formed
company ("NewCo"). Following the transaction, MasterCard will own
55% of NewCo, eServGlobal will own 35% and BICS will own 10%. Based
on the initial shareholdings, MasterCard will be entitled to
appoint three directors to the Board of NewCo, eServGlobal will be
entitled to make two appointments and BICS will be entitled to
nominate one director.
MasterCard will contribute cash for its interest in NewCo with
eServGlobal to receive EUR9.0m ($13.6 million) in cash, which
includes EUR3.45 million ($5.21 million) to be held in escrow, net
of a pro rata of NewCo's estimated working capital requirements for
the medium term. In addition, MasterCard will enter into a
commercial agreement with HomeSend which will have an initial
duration of three years and automatic yearly renewal thereafter.
The commercial agreement will require MasterCard to use its best
endeavors to promote the HomeSend service utilising MasterCard's
sales channels.
There are conditions precedent to the creation of the HomeSend
joint venture and those conditions, together with a summary of the
material terms and conditions of the HomeSend joint venture have
been included in the regulatory announcement dated 19 December
2013.
The assets attributable to the HomeSend business (including the
allocated goodwill component)have been classified as "Assets
classified as held for sale" in the Consolidated Statement of
Financial Position as at 31 October 2013.
The creation of the HomeSend joint venture has given rise to an
income tax credit, and deferred tax asset, of EUR4.7 million ($7.2
million) at 31 October 2013.
14. Commentary on Results for the Period
Refer to the explanation of results in Section 2.
15. Accounts
This report is based on accounts which are in the process of
being audited.
Director
Print name: PAOLO MONTESSORI Date : 19 December 2013
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR LFFSFFALTLIV
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