TIDMPCIP
RNS Number : 4875X
PCI-PAL PLC
22 February 2017
PCI-PAL PLC
('PCI-PAL', the 'Company' and, together with its subsidiaries,
the 'Group')
Interim results for the six months ended 31 December 2016
PCI-PAL PLC (AIM: 'PCIP'), the provider of products and services
that enable organisations to take customer payments securely,
de-risking their business from the threat of data loss and
cybercrime, announces its unaudited interim results for the six
months ended 31 December 2016.
The period being reported on includes the strategic sale of the
call centre operations of the Group which completed on 30 September
2016 (the 'Disposal'). As such, the results being reported reflect
both discontinued and continuing operations. Since the Disposal,
PCI-PAL has focussed exclusively on its suite of secure payment
products.
Financial Highlights
Restated
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
2016 2015 2016
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Continuing activities 975 561 1,103
Discontinued activities 1,845 3,495 7,163
----- ----- -----
Revenue 2,820 4,056 8,266
----- ----- -----
Profit/(loss) after
taxation
Continuing activities (611) (370) (299)
Profit from Discontinued
activities, net of tax 6,331 586 456
----- ----- -----
Profit/(loss) after
taxation 5,720 216 157
----- ----- -----
Basic and diluted earnings per share (EPS)
(1.94) (1.17) (0.95)
From Continuing activities p p p
From Discontinued activities 20.06 p 1.86 p 1.45 p
----- ----- -----
Basic and diluted earnings
per share (EPS) 18.12 p 0.69p 0.50 p
----- ----- -----
-- Closing cash and cash equivalents as at 31 December 2016:
GBP2.9m - following the proceeds from the Disposal, and the sale of
the Ipswich office at Melford Court (31 December 2015: GBP0.8m; 30
June 2016: GBP0.9m).
-- GBP3.35m of the GBP6.70m consideration receivable by the
Group from the Disposal was satisfied by the issue of secured loan
notes by the buyer to the Group, which are redeemable within the
42-month period from completion.
-- Following the Disposal, GBP1.0m was returned to shareholders
by way of an interim dividend paid on 9 December 2016.
-- Development costs associated with the cloud platform expensed
- circa GBP100k in the period.
Operational highlights for continuing operations:
-- Transaction volumes through PCI-PAL services have increased
58% compared to July-December 2015, reflecting buoyant client
activity.
-- Contracts signed with total initial value of GBP1.8m (2015:
GBP0.5m), of which GBP0.4m recognised in the period (2015:
GBP0.1m).
-- PCI-PAL revenue increased by GBP414k to GBP975k (+74%) (2015: GBP561k).
-- Recurring revenues increased to GBP595k representing 61% of
total turnover (2015: GBP353k, 63%).
-- Continued strong customer commitment with complete client
retention and excellent referrals from our existing blue chip
client base.
-- Significant investment in expanding our cloud platform to
enhance support for global clients.
-- In December 2016, the Group revealed its refreshed corporate
branding and new website, reflecting the new focus and strategy,
www.pcipal.com.
-- Following the Disposal and the sale of the Melford Court
Ipswich office, the team relocated to new offices nearby at The
Masterlord Estate, Ipswich, and maintains the sales suite at 1
Cornhill, London.
Post period events for continuing operations:
-- Since 31 December 2016, the Company has secured an
international order for the supply of its services to the world's
largest electrical heating business.
-- Recruitment of several key professional voice and software engineers.
Commenting on the results and prospects, William Catchpole,
Chief Executive Officer, said:
"We are delighted with the trading performance of the new
streamlined business with significant increases year-on-year in
signed contract numbers and recurring revenue.
"Most of these deals were won against our main competitors. As
these new contracts come on-line they will deliver revenue and
enhanced customer value over the longer term.
"We continue to invest in the security of our services and the
development of our global cloud platform to support multi-national
brands. We remain confident in our new strategy for the Group and
in its delivery against ambitious growth plans over the next few
years."
Interim Report - Copies of this interim report can be downloaded
from the Company's website (https://www.pcipal.com/)
For further information, please contact:
PCI-PAL PLC Via Walbrook PR
William Catchpole, Chief
Executive Officer
N+1 Singer (Nominated
Adviser and Broker) +44 (0) 20 7496 3000
Aubrey Powell/James White
Walbrook PR +44 (0) 20 7933 8780
Tom Cooper/Paul Vann +44 (0) 797 122 1972
tom.cooper@walbrookpr.com
Notes to Editors:
PCI-PAL provides products and services enabling organisations to
take customer payments securely, processing credit card data
securely, and thereby de-risking their business from the threat of
data loss and cybercrime. PCI-PAL solutions are currently used in
more than 60 organisations, many of which are multi-national
businesses in the retail, services, utilities and public sectors,
utilising PCI-PAL technology to ensure they meet payment card
industry rules and regulations governing customer data
protection.
PCI-PAL floated under the name of CountyWeb.com PLC on the AIM
market of the London Stock Exchange in September 2000. The PCI-PAL
product suite was launched in 2011 and since the disposal of its
contact centre operations in September 2016, the Group has been
solely focused on its PCI-PAL business.
JOINT REPORT FROM THE CHAIRMAN AND THE CHIEF EXECUTIVE
OFFICER
In the reported period we completed the GBP6.70m disposal of the
Ansaback call centre business and the CallScripter software
business (the 'Disposal'), to focus all our efforts on our rapidly
developing PCI-PAL secure payment business; PCI being the
recognised market acronym for Payment Card Industry.
As part of the Disposal, the freehold Ipswich office was sold
and leased back and then transferred to the new acquirer,
generating further cash of GBP0.8m for the Group. The PCI-PAL
business relocated to a new office in Ipswich which is also the new
registered office.
Reflecting this change, we renamed the holding company PCI-PAL
PLC on 3 October 2016.
Following the Disposal, James Barham joined the PLC Board as
Commercial Director and Sadie Ahier was appointed Operational
Director for the PCI-PAL (UK) Ltd operating company. Andy
Francombe, having supported the Company through the Disposal and
its initial transition to a secure payment solutions provider, is
stepping down from the Board. The search for his successor is well
under way. The existing PCI-PAL technical team were relocated from
the freehold offices at Melford Court, Ipswich, to a modern 1,500
square feet office on the Masterlord Business Park less than
quarter of a mile away. The Sales and Marketing suite at Cornhill,
London was retained.
Strategy
The Board continues to execute on its growth strategy, at the
core of which is a solid commercial, operational and financial
platform. The initial steps were taken several years ago to create
a stable platform which could support a large number of
simultaneous transactions and had sufficient redundancy and back-up
to give clients unparalleled transactional uptime.
The Group's growth strategy is as follows:
- Attraction and retention of new clients through the delivery
of best-in-class, secure payment solutions;
- Retention and broadening of relationships with existing and
new customers through high levels of support and service offerings
and a proactive approach to upselling the PCI-PAL range of
solutions;
- Recruitment and retention of a high calibre, highly skilled workforce; and
- Targeted investment in the technology platform and product suite.
As an example of the security challenges facing those in
business, the most recently publicised data loss concerned the
Royal & Sun Alliance Insurance PLC, following the loss of the
personal information of nearly 60,000 customers. Such breaches
create a significant opportunity for PCI-PAL.
The planned implementation of the General Data Protection
Regulation (GDPR) in May 2018 and the higher potential financial
penalties for non-compliance that the regulation entails will
increase the focus businesses place on data security, making
PCI-PAL products even more attractive to potential customers.
The Board is not proposing an interim dividend for the period,
prioritising investment in the growth of the business.
Performance overview
PCI-PAL had an excellent six months, securing new contracts
across a range of industry verticals including retail, services,
leisure, public and the charity sector. Transaction volumes through
PCI-PAL services for the period July-December 2016 were 58% higher
compared to 2015, with a valuable stream of referrals from our
existing client base providing quality leads in addition to our own
sales initiatives. The continued evolution of the PCI-PAL product
suite to provide a wide range of payment security solutions has
allowed us to broaden and extend the value proposition to both
existing clients and new business prospects.
Investment in expansion of the cloud platform continues to
ensure that PCI-PAL's clients can be confident of best in class
products and services.
Recurring revenues have grown 69% year-on-year, with an
additional healthy pipeline of contracted business yet to go live.
The increase in administration expenses reflects the additional
personnel costs of building the team required to execute the growth
strategy, in addition to the central PLC costs which include the
Board and AIM costs.
Platform availability remains the cornerstone of our product
suite. Uptime and availability is continually monitored and has
remained exceptional.
Outlook
Cybersecurity and data protection remain high on boardroom
agendas and, with the market fuelled by well publicised data
breaches across multiple vertical industries, more and more
companies are looking to find cost effective, outsourced technical
solutions to protect customer data and de-risk their businesses
from the threat of data loss. We anticipate this focus will
continue for years to come, and we are well placed to capitalise on
the growth opportunity, with a broad and scalable product set which
meets clients' needs and a strong, growing base of reference
clients.
Whilst the volume and value of new business are good indicators
of market traction and performance, the continuation of licences
sold in prior years is of critical importance to the Group's
strategy. It is therefore very encouraging that all customers who
have used the PCI-PAL platform remain users.
Following the disposal of non-core businesses, the Group remains
in a strong financial position with a gross cash balance of GBP2.9m
and GBP3.35m of deferred loan notes at the period end, which will
enable us to invest in support of our growth plans.
PCI-PAL continues to perform well against its ambitious organic
growth strategy. The recurring revenue base continues to grow and
the contracted forward order book has also increased
substantially.
The Board is confident in its strategy and believes that PCI-PAL
continues to have exciting growth prospects over the next few
years.
Chris Fielding William Catchpole
Chairman Chief Executive Officer
22 February 2017
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Restated
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
2016 2015 2016
Note (unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Revenue 975 561 1,103
Cost of sales (557) (288) (534)
----- ----- -----
Gross profit 418 273 569
Administrative expenses (1,029) (661) (871)
----- ----- -----
Operating loss (611) (388) (302)
Finance income 5 18 33
Finance costs (5) - (30)
----- ----- -----
Loss before taxation (611) (370) (299)
Income tax credit/(charge) - - -
----- ----- -----
Loss for year from
Continuing activities (611) (370) (299)
Profit for the period
from Discontinued
activities 6,331 586 456
----- ----- -----
Profit and total comprehensive
income attributable
to equity holders
of the parent company 5,720 216 157
Basic and diluted
earnings/(losses)
per share
(1.17) (0.95)
From Continuing activities (1.94) p p p
From Discontinued 1.45
activities 20.06 p 1.86 p p
----- ----- -----
Basic and diluted 0.50
earnings per share 3 18.12 p 0.69 p p
----- ----- -----
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 December 31 December 30 June
2016 2015 2016
Note (unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Assets
Non-current assets
Land and buildings - 1,627 1,601
Plant and equipment 66 298 252
Deferred tax assets - - -
Non-current deferred
consideration 4 2,393 - -
----- ----- -----
Non-current assets 2,459 1,925 1,853
----- ----- -----
Current assets
Trade and other receivables 705 1,832 1,483
Other debtors 80 - -
Current deferred consideration 4 957 - -
Cash and cash equivalents 2,928 846 895
----- ----- -----
Current assets 4,670 2,678 2,378
----- ----- -----
Total assets 6 7,129 4,603 4,231
Liabilities
Current liabilities
Trade and other payables (403) (1,224) (1,000)
Current portion of
long-term borrowings - (79) (62)
----- ----- -----
Current liabilities (403) (1,303) (1,062)
Non-current liabilities
Long-term borrowings - (1,219) (1,147)
----- ----- -----
Non-current liabilities - (1,219) (1,147)
----- ----- -----
Total liabilities (403) (2,522) (2,209)
Net assets 6,726 2,081 2,022
Equity
Equity attributable
to shareholders of
the parent
Share capital 317 317 317
Share premium 89 89 89
Other reserves - 18 18
Profit and loss account 6,320 1,657 1,598
----- ----- -----
Total equity 6,726 2,081 2,022
CONSOLIDATED STATEMENT OF CASH FLOWS
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
2016 2015 2016
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Cash flows from operating
activities
Profit/(loss) after
taxation 5,720 216 157
Adjustments for:
Depreciation 7 99 207
Interest income (5) (2) (3)
Interest expense 5 16 29
Interest element of
finance leases - 1 4
Income taxes received (99)
Profit from Discontinued
activities (6,331) (586) (455)
Profit on sale of Ancora
Solutions - (86)
Decrease/(increase)
in trade and other
receivables (335) (46) (77)
(Decrease)/increase
in trade and other
payables 39 23 39
----- ----- -----
Cash used in operating
activities (900) (464) (99)
Dividend paid (997) (47) (47)
Income taxes received - 99 99
Interest paid (5) (16) (29)
Interest element of
finance leases - (1) (4)
----- ----- -----
Net cash used in Continuing
operating activities (1,902) (429) (80)
----- ----- -----
Net cash (used in)/generated
from Discontinued activities (632) 311 171
----- ----- -----
Net cash (used in)/generated
from operating activities (2,534) (118) 91
----- ----- -----
Cash flows from investing
activities
Consideration for sale
of Ansaback and CallScripter 3,773 - -
Divisions
Proceeds from disposal 1,950 - -
of property
Purchase of land, buildings,
plant and equipment (59) (52) (182)
Interest received 5 2 3
----- ----- -----
Net cash generated
from/(used in) investing
activities 5,669 (50) (179)
----- ----- -----
CONSOLIDATED STATEMENT OF CASH FLOWS (continued)
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
2016 2015 2016
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Cash flows from financing
activities
Repayment of mortgage on
disposed property (1,102) (9) (22)
Capital element of finance
leases - (18) (36)
----- ----- -----
Net cash used in financing
activities (1,102) (27) (58)
----- ----- -----
Net increase/(decrease)
in cash and cash equivalents 2,033 (195) (146)
Cash and cash equivalents
at beginning of the period 895 1,041 1,041
Net increase/(decrease)
in cash and cash equivalents 2,033 (195) (146)
Cash and cash equivalents
at the end of the period 2,928 846 895
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Profit
And
Share Share Other Loss Total
Capital Premium Reserves Account Equity
GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1 July
2015 317 89 18 1,487 1,911
Dividend paid - - - (47) (47)
---- ---- ---- ---- ----
Transactions with
owners - - - (47) (47)
Loss and total recognised
income
and expense for
the period - - - 216 216
---- ---- ---- ---- ----
Balance at 31 December
2015 317 89 18 1,656 2,080
---- ---- ---- ---- ----
Loss and total recognised
income
and expense for
the period - - - (58) (58)
---- ---- ---- ---- ----
Balance at 30 June
2016 317 89 18 1,598 2,022
Dividend paid - - - (998) (998)
---- ---- ---- ---- ----
Transactions with
owners - - - (998) (998)
Merger reserve written
off (18) (18)
Profit and total
recognised income
and expense for
the period - - - 5,720 5,720
---- ---- ---- ---- ----
Balance at 31 December
2016 317 89 - 6,320 6,726
Notes to the Interim Financial Statements
1. Nature of activities and general information
PCI-PAL PLC is the Group's ultimate parent company and is a
public limited company domiciled in England and Wales (registration
number 3869545). The company's registered office, which is also its
principal place of business, is Unit 7, Gamma Terrace, Masterlord
Estate, Ipswich, IP3 9FF. The Company's ordinary shares are traded
on the AIM Market of the London Stock Exchange. The Group's
consolidated interim financial statements (the "interim financial
statements") for the period ended 31 December 2016 comprise the
Company and its subsidiaries (the "Group").
The Company operates principally as a holding company. The main
subsidiary is engaged in the provision of products and services
that enable customers to securely take card payments, safely store
customer data, card data, and to de-risk their business activities
from the threat of data loss and cyber crime. PCI PAL is a cloud
based solution.
The interim financial statements are presented in pounds
sterling (GBP000), which is also the functional currency of the
parent company.
2. Basis of preparation of financial information
These interim financial statements are for the six months ended
31 December 2016. They do not include all the information required
for full annual financial statements and should be read in
conjunction with the consolidated financial statements of the Group
for the year ended 30 June 2016.
The financial information for the year ended 30 June 2016 set
out in these interim financial statements does not constitute
statutory accounts as defined by Section 434 of the Companies Act
2006. The Group's statutory financial statements for the year ended
30 June 2016 have been filed with the Registrar of Companies. The
auditor's report on those financial statements was unqualified and
did not contain statements under Section 498(2) or Section 498(3)
of the Companies Act 2006.
These interim financial statements are based on the recognition
and measurement principles of applicable International Financial
Reporting Standards in issue as adopted by the European Union and
have been prepared under the historical cost convention.
The accounting policies adopted are consistent with those
utilised in the financial statements for the year ended 30 June
2016 and have been applied consistently throughout the Group for
the purposes of preparation of these interim financial
statements.
These interim financial statements have been restated to reflect
the disposal of the Ansaback and CallScripter businesses. The
Income Statement has been adjusted to extract the Discontinued
element of the Ansaback and CallScripter disposals and the profit
from Discontinued activities is included as a single line. The
other statements and notes have also been adjusted to reflect this
policy.
The principal risks and uncertainties associated with the
Group's continuing business are described in the circular to
shareholders dated 12 September 2016 issued in connection with the
Disposal.
3. Earnings per share
The calculation of the earnings per share is based on the profit
after taxation attributable to equity holders of the parent company
divided by the weighted average number of ordinary shares in issue
during the relevant period. No diluted profit per share is shown
because all options are non-dilutive.
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
2016 2015 2016
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Profit/(loss) after
taxation
From Continuing activities (611) (370) (299)
From Discontinued activities 6,331 586 456
----- ----- -----
Profit/(loss) after
taxation 5,720 216 157
Weighted average number
of ordinary shares in
issue during the period
(000) 31,554 31,554 31,554
Basic and diluted earnings/(loss)
per share
From Continuing activities (1.94) p (1.17) p (0.95) p
From Discontinued activities 20.06 p 1.86 p 1.45 p
----- ----- -----
Basic and diluted earnings/(loss)
per share 18.12 p 0.69 p 0.50 p
----- ----- -----
4. Deferred Consideration
Part of the consideration receivable by The Group on the sale of
the Ansaback and CallScripter Divisions on 30 September 2016 was
satisfied by the issue of secured loan notes by the buyer, The
Yonder Digital Group Limited (formerly Direct Response Contact
Centres Group Limited), which are receivable as follows:
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
2016 2015 2016
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Receivable within one 957 - -
year
Receivable after one 2,393 - -
year and within four
years
---- ---- ----
3,350 - -
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR FMGZZGMDGNZZ
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