Latest Results
Interim Results for the six months ended 31st December 2007
Cashbox (AIM:CBOX), the independent Automated Teller Machine (“ATM”) installer and operator, announces its interim results for the six months ended 31 December 2007 (H1 07/08).
H1 07/08 6m ended 31 Dec 07 unaudited |
H2 06/07 6m ended 30 Jun 07 unaudited |
H1 06/07 6m ended 31 Dec 06 unaudited |
|
| Machines installed at period end | 1,820
|
1,442
|
1,245
|
| Turnover £ 000 | 2,271
|
2,137
|
2,243
|
| Gross Margin % | 36%
|
27%
|
26%
|
| EBITDA * † £ 000 | (1,119)
|
(2,199)
|
(1,311)
|
| Loss before exceptionals* £ 000 | (1,609)
|
(2,431)
|
(1,625)
|
| Loss after exceptionals £ 000 | (1,609)
|
(5,116)
|
(1,625)
|
| Loss per share before exceptionals (p)* | (1.9)p
|
(3.7)p
|
(2.6)p
|
| Loss per share after exceptionals (p) | (1.9)p
|
(7.9)p
|
(2.6)p
|
| Net debt † (£000) | 5,022
|
1,340
|
2,204
|
* before exceptional items in H2 06/07 of £2,000,000 relating to settlement of litigation and £685,000 lease termination penalties.
† A non GAAP measure, these are defined in note 14.
Highlights
| • | Installed machines reach 1,820 |
| • | Transaction revenues increased by 5% over H2 and 15% over H1 06/07 |
| • | Gross profits increased and gross margin improved to 36% |
| • | Losses measured by EBITDA, operating loss, loss for the period, and loss per share all improved |
| • | Hanco litigation settled in October 2007 at a cost of £1.8m bringing the total settlement to £2.0m. |
| • | New funding of £1.0m in December 2007 |
Chairman's Statement
I am pleased to present my first interim report to shareholders as the Chairman of Cashbox PLC. For the six months to December 2007 your Company incurred a loss of £1.6m on turnover of £2.3m. The loss was incurred principally due to the slower than expected roll out of ATM’s due to delays from suppliers in the first quarter and the delayed refinancing at the end of last year. However, Cashbox has seen a reduction in losses before exceptional items and an encouraging increase in gross margins.
Although this has been a difficult period in your Company’s history there is much to give encouragement. The new executive management team has worked hard to rid Cashbox of distractions to its core business; including the necessary settlement of the Hanco litigation.
Installations in Q1 2007 were 104 rising substantially to 274 for Q2, bringing the total to 378 ATM’s for the period. The total number of ATM’s in Cashbox’s estate was 1,820 at the end of December 2007. Cashbox now has the 5th largest ATM estate in the UK.
Moving forward we are focusing all our efforts on increasing the number of new installations initially to 100 per month with the intention of exceeding this number from the summer onwards. This is made possible by the new banking facilities secured from Bank of Scotland and the additional £1.0m of convertible debt and unsecured debt funding raised in December 2007.
As with all businesses at the same stage of Cashbox’s evolution there needs to be an ever vigilant approach to cost controls and I am pleased to report that after a review of operations carried out during the period annual overheads have been reduced.
The increased focus on installations with the ‘Placement Model’, in which Cashbox receives a larger proportion of the transaction revenues has resulted in nearly half the estate being in that category. This has brought about increased margins and bodes well for future profitability.
Increasing the number of ATM’s in our estate is a primary focus, however the performance of existing machines is constantly assessed and wherever possible those ATM’s that appear to have a low number of transactions are removed and placed on sites where utilisation levels will be materially higher.
Your Board and management are confident that opportunities are available to continue to increase market share. The excellent systems that have been developed coupled with the customer service that this affords give distinct competitive advantage. This is clearly evidencing itself as we increase our penetration of major organisations who value this level of professionalism.
Hanco Litigation Update
In October 2007 we agreed a full and final settlement with Hanco in respect of the litigation between the two companies. In the settlement, Cashbox ATM Systems Limited will pay an additional £1.8m, on top of the £200,000 already paid. Cashbox ATM Systems Limited has the benefit of a joint and several indemnity from Carl Thomas and Anthony Sharp in connection with this litigation, which the directors intend to enforce to recover the £2m. The Board did not believe that continuing with the litigation was in the best interests of shareholders.
Financing
In December 2007 we raised additional operating capital through the issue of a convertible loan at the same time as restructuring our arrangements with Bank of Scotland. This increased the headroom on the financial covenants while the facility was reduced from £8m previously agreed to £6m but extended through to December 2009 when repayment is due to commence. This has the effect of giving additional flexibility for the financing of machines. In March 2008 we are finalising arrangements to raise further operating capital as set out in the Annual Report and at the AGM. The holders of the convertible loan have given notice that they intend to convert on 1 April 2008 thereby further reducing the Company’s gearing.
Board Update
As advised in the Annual Report, a number of Board changes took place following the AGM on 22 January 2008. Matthew Thomas, CTO, and Andrew Wilmot, Technical Director, stepped down from the PLC Board to concentrate upon the organic growth of the business, and sit on the Board of Cashbox ATM Systems Limited.
Stephen Brown, Non-Executive Director, and John Maples, Chairman, stepped down from the Board after successfully assisting with the stabilisation of the business.
The Board of Cashbox PLC now comprises Robin Saunders as Non Executive Chairman, Ciaran Morton (Chief Executive), David Auger (Chief Financial Officer) and William Hughes as a non executive director.
Outlook
Shareholders have reason to feel optimistic about Cashbox’s prospects as we move into 2008. A number of significant hurdles, not least the Hanco litigation and the re-financing of the business, have been successfully completed. This now enables the management to concentrate upon two key areas: the organic growth of the core business, and deriving value from a consolidating market. The Board and the Executive Management teams remain wholly focussed upon these primary goals, and are confident that the business will demonstrate accelerated growth in installations and revenues in the second half of the year.
Robin Saunders
Non Executive Chairman
27 March 2008
INTERNATIONAL FINANCIAL REPORTING STANDARDS
This is the first interim report of the Group produced in accordance with International Financial Reporting Standards (“IFRS”). The transition date for the adoption of IFRS is 1 July 2006. All comparative data in this report has been restated accordingly and a reconciliation is included in note 15.
OPERATING AND FINANCIAL REVIEW
Performance for the current period, the six months ended 31 December 2007 (H1 07/08) is measured against both the comparable period being the first half of the prior year being the six months ended 31 December 2006 (H1 06/07) and the period immediately preceding the period under review being the six months ended 30 June 2007 (H2 06/07). The comparison to the second half of the prior year is considered to be meaningful as the Company is growing with the installation of new ATMs increasing the size of the installed base.
The installed base of ATMs increased to 1,820 machines by 31 December 2007 compared to 1,442 machines at 30 June 2007 and 1,245 machines at 31 December 2006. The average number of machines in the first half of the year was 21% higher than the preceding six months and 42% higher than the comparable period following the acceleration of installations, particularly in the second quarter.
Surcharging transactions for the six months were 1.3 million, up on both the six months ended June 2007 H2 06/07, 1.2 million, and December 2006 H1 06/07, 1.2 million, following the increase in the size of the ATM estate which offset a slight decline in transactions per machine.
Turnover for the first half of the year was £2.3m, up 6% on the preceding six months H2 06/07 and 1% on the comparable period H1 06/07. Transaction income was up 5% and 15% respectively as the increased installed base of machines contributed, offsetting the decline in transaction volumes per machine seen during the period.
Gross margins improved to 36% as a result of the higher margins on transaction fee revenues compared to ATM sale revenues as well as the increase in the proportion of “Placement model” ATMs where ownership of the ATM is retained by the Cashbox Group in return for a higher share of the transaction revenues. At 31 December 2007, Placement machines represented just under half of the total estate. This resulted in the gross profit for the period being £0.8m, up on the £0.6m for both the six months ended December 2006 and June 2007.
Administration costs were slightly lower then the preceding period but up on the same period last year. Excluding depreciation, which increased following the greater number of owned machines, the administration costs were £2.0m, a reduction on prior periods with the benefits of the cost saving measures being felt. Salary costs, including related items such as recruitment costs, were inline with prior periods despite the increase in headcount from 39 in H1 06/07 to 50 in H2 06/07 (giving average of 44 for the year ended June 2007) to 52 for the current six months. Professional fees remain higher than would be liked as a consequence of the costs associated with reaching settlement with Hanco ATM Systems Limited, the financing undertaken towards the end of the half year and the pursuit of Anthony Sharp and Carl Thomas under the indemnity given by them at the time of the flotation of the Company on AIM.
Earnings before interest, tax, depreciation and amortisation, share based payments and exceptionals, EBITDA, for the period was a loss of £1.1m, a significant improvement from the £2.1m loss in H2 06/07 and £1.3m loss in H1 06/07.
Total operating loss was £1.4m for the period, an improvement on prior periods of £1.6m in H1 06/07 and £4.4m in H2 06/07 with the higher gross profits and lower administration costs.
Interest costs were up with the increased debt financing from Bank of Scotland, and included interest on the Hanco settlement monies, resulting in a loss before tax for the period of £1.6m.
Net cash from operating activities was an outflow of £1.9m with adverse movements in working capital principally being the payment of creditors. Purchase of fixed assets was £0.9m as placement machines were installed during the period. The outflows were financed by draw downs on the Bank of Scotland facility and the issue of the convertible loan in December 2007. Overall there was a decrease in cash of £0.9m during the period.
CONSOLIDATED INCOME STATEMENT
For the six months ended 31 December 2007
unaudited
|
unaudited
|
unaudited
|
||
6m ended 31-12-07 |
6m ended 31-12-06 |
Year ended 30-6-07 |
||
Notes
|
£ 000
|
£ 000
|
£ 000
|
|
| Revenue | 2
|
2,271
|
2,243
|
4,380
|
| Cost of sales | (1,455)
|
(1,655)
|
(3,219)
|
|
| Gross Profit | 816
|
588
|
1,161
|
|
| Administration expenses | 4
|
(2,217)
|
(2,146)
|
(5,093)
|
| Exceptional items: | ||||
| Litigation settlement costs | 3
|
-
|
-
|
(2,000)
|
| Total administration expenses | (2,217)
|
(2,146)
|
(7,093)
|
|
| Operating loss | (1,401)
|
(1,558)
|
(5,932)
|
|
| Finance income | 27
|
11
|
37
|
|
| Finance costs | 5
|
(235)
|
(78)
|
(161)
|
| Exceptional finance charges | 3
|
-
|
(685)
|
|
(208)
|
(67)
|
(809)
|
||
| Loss for the period attributable to the equity holders of the parent | (1,609)
|
(1,625)
|
(6,741)
|
|
| Loss per ordinary share (pence) | 6
|
|||
| Basic | (1.9)p
|
(2.6)p
|
(10.5)
|
|
| Diluted | (1.9)p
|
(2.6)p
|
(10.5)
|
|
| Loss for the period excluding exceptional costs attributable to the equity holders of the parent | (1,609)
|
(1,625)
|
(4,056)
|
|
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 31 December 2007
unaudited
|
unaudited
|
unaudited
|
||
6m ended
31-12-07
|
6m ended
31-12-06
|
Year ended
30-6-07
|
||
£ 000
|
£ 000
|
£ 000
|
||
Opening shareholders’ deficit
|
(3,520)
|
(180)
|
(180)
|
|
Loss for the financial period being total income and expenditure recognised in the period
|
(1,609)
|
(1,625)
|
(6,741)
|
|
Share based payments
|
73
|
117
|
138
|
|
(1,536)
|
(1,508)
|
(6,603)
|
||
Issue of shares including premium
|
-
|
-
|
3,263
|
|
Equity component of convertible loan
|
38
|
-
|
-
|
|
Movement in shareholders’ funds
|
(1,498)
|
(1,508)
|
(3,340)
|
|
Closing shareholders’ deficit
|
(5,018)
|
(1,688)
|
(3,520)
|
|
CONSOLIDATED BALANCE SHEET
As at 31 December 2007
unaudited
|
unaudited
|
unaudited
|
||
31-12-07
|
31-12-06
|
30-6-07
|
||
Notes
|
£ 000
|
£ 000
|
£ 000
|
|
ASSETS
|
||||
Non current assets
|
||||
Intangible assets
|
55
|
10
|
13
|
|
Property, plant and equipment
|
1,796
|
1,157
|
1,077
|
|
1,851
|
1,167
|
1,090
|
||
Current Assets
|
||||
Inventories
|
56
|
27
|
110
|
|
Trade and other receivables
|
7
|
861
|
822
|
850
|
Cash and cash equivalents
|
1,160
|
1,161
|
1,452
|
|
2,077
|
2,010
|
2,412
|
||
TOTAL ASSETS
|
3,928
|
3,177
|
3,502
|
|
LIABILITIES AND EQUITY
|
||||
Current liabilities
|
||||
Trade and other payables
|
8
|
3,922
|
3,392
|
4,715
|
Borrowings
|
9
|
620
|
1,473
|
2
|
4,542
|
4,865
|
4,717
|
||
Non current liabilities
|
||||
Borrowings
|
9
|
4,404
|
-
|
2,305
|
TOTAL LIABILITIES
|
8,946
|
4,865
|
7,022
|
|
Capital and reserves attributable to equity holders of the parent
|
||||
Share capital
|
10
|
832
|
614
|
832
|
Share premium account
|
10
|
6,925
|
3,880
|
6,925
|
Merger reserve
|
10
|
2,180
|
2,180
|
2,180
|
Equity component of Convertible debt
|
10
|
38
|
-
|
-
|
Warrants reserve
|
10
|
-
|
37
|
-
|
Accumulated losses
|
10
|
(14,993)
|
(8,399)
|
(13,457)
|
(5,018)
|
(1,688)
|
(3,520)
|
||
TOTAL EQUITY AND LIABILITIES
|
3,928
|
3,177
|
3,502
|
|
CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 31 December 2007unaudited
|
Unaudited
|
unaudited
|
||
6m ended
31-12-07
|
6m ended
31-12-06
|
Year ended
30-6-07
|
||
£ 000
|
£ 000
|
£ 000
|
||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||
Cash used in operations
|
11
|
(1,927)
|
863
|
(2,440)
|
Interest paid
|
(158)
|
(41)
|
(150)
|
|
Net cash used in operating activities
|
(2,085)
|
822
|
(2,590)
|
|
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Purchase of property plant and equipment
|
(857)
|
(623)
|
(687)
|
|
Purchase of intangible fixed assets
|
(52)
|
-
|
(6)
|
|
Net cash used in investing activities
|
(909)
|
(623)
|
(693)
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||
Issue of ordinary shares for cash
|
-
|
-
|
584
|
|
Proceeds from convertible loans
|
584
|
-
|
-
|
|
Proceeds from borrowings
|
1,500
|
500
|
5,600
|
|
Repayments of borrowings
|
-
|
-
|
(130)
|
|
Capital repayments on finance leases
|
(1)
|
(74)
|
(1,388)
|
|
Lease termination costs paid
|
3
|
-
|
-
|
(467)
|
Net cash generated from financing activities
|
2,083
|
426
|
4,199
|
|
Net (decrease) / increase in cash
|
(911)
|
625
|
916
|
|
Cash and cash equivalents at the beginning of the period
|
1,452
|
536
|
536
|
|
Cash and cash equivalents at the end of the period
|
541
|
1,161
|
1,452
|
|
Notes to the Consolidated Financial Statements
The notes are available in the PDF download.
