News

Interim Results for the six months ended 31st December 2009

03 March 2010

Cashbox (AIM:CBOX), the independent ATM deployer and operator, announces its interim results for the six months ended 31 December 2009 (H1 09/10). 

 

				H1 09/10	H2 08/09	H1 08/09
				unaudited	unaudited	unaudited
				6 months to	6 months to	6 months to
				31-12-2009	30-06-2009	31-12-2008
Machines installed at period end				2,528	2,438	2,838
Number of transactions				2,928,760	2,799,206	2,121,499
Revenue (£ 000)				3,367	3,433	2,986
Gross profit (£ 000)				1,278	1,229	1,083
Gross margin %				38	36	36
Adjusted EBITDA (£ 000) *				(143)	(862)	(659)
Adjusted loss attributable to equity holders (£ 000) **				(1,204)	(1,897)	(1,454)
Loss per share (p)				(0.8)	(0.8)	(1.0)
Net debt (£ 000) *				9,870	9,268	8,096

* Adjusted EBITDA (earnings before interest, tax, depreciation, amortisation, exceptional items, share-based payments, fair value movements on valuations for acquisitions and derivatives) and net debt are as defined in note 12.

** Adjusted loss attributable to equity holders is the loss for the period less accumulated professional fees written-back and excluding the gain on the valuation of the estate purchases of Cash4All and MyATM in H2 08/09.

Highlights

• Installed machines reach 2,528, after uplifting over 300 First Quench (Thresher) ATMs
• Transaction volumes increased by 38% over H1 08/09 and 5% over H2 08/09, despite the loss of First Quench ATMs driven by Thresher administration
• Ownership of over 300 Thresher ATMs transfers to Cashbox
• Gross profits increased in line with gross margin improvements
• EBITDA loss reduced by 78% on comparable period in 2008
• New funding of £800,000 convertible loan notes raised in period
• £5.7m bank facility restructured, reducing and deferring capital repayments

CHAIRMAN'S STATEMENT

The encouraging trend established during the prior year has continued with a significant reduction in losses at EBITDA level, while building upon previous gross margin improvements.  For the six months ended 31 December 2009 your Company incurred a loss of £1.2m on turnover of £3.4m.

During the period under review, your Company has delivered solid progress in its organic growth strategy.  New contracts have been signed with Orchid Group, Tattershall Castle Group, Reel Cinemas and Calco West Midlands amongst others, whilst contracts with existing clients, such as Mitchells and Butlers PLC, have been expanded to encompass considerably more sites.

The growth impact of these new business wins has been partially mitigated by the loss, in November 2009, of over 300 ATMs which Cashbox supported on behalf of Threshers, following the move into administration of First Quench Retailing.  Revenue and EBITDA performance in the third quarter will be adversely affected, but your Company has worked hard to redeploy these Thresher ATMs, which we have acquired as payment for services rendered during the administration, into newly won sites, thus negating any long-term impact.  As these 300 ATMs are now owned by Cashbox, once redeployed they should generate higher retained income for your Company than when they comprised the Thresher ATM estate.  As a result of this, the Board remains very confident of meeting market expectations for the full year.

Over the period, after prolonged trials of the concept, your Company has successfully launched a “Free to Use” (FTU) business model, which has quickly grown to over 7% of the installed base and is currently generating over 15% of the transaction volumes. Income from the FTU model is sourced from the banking system and not the actual ATM user.

Increasing the number of ATMs in our estate is a primary focus, however it is equally important to monitor the performance of existing machines. Wherever possible, those ATMs that have a low number of transactions are removed and placed on sites where utilisation levels are assessed to be materially higher.

The impact of these three initiatives: strong organic growth; launch of the FTU business; and an increased focus on the redeployment of underperforming ATMs has had a dramatic impact on transaction volumes, which are up 38% (over 800,000 transactions) over the same period in the prior year.  This year will see the Company increase its emphasis upon transaction volumes in preference to simple estate size as the Board believes that this key performance indicator (“KPI”) more clearly and accurately indicates the performance of the business.

As with all businesses, there needs to be a continually vigilant approach to cost control and it is appropriate to report that annual overheads have been further reduced, with significant reductions in senior management costs.

Financing
As a currently loss-making business, the Company is mindful of the need to ensure access to working capital whilst reducing cash outflows.  With that in mind, the £5.7m facility with Bank of Scotland was restructured in December 2009 to the Company's advantage by reducing and deferring regular capital repayments in exchange for a more significant bullet repayment at the end of the term of the facility. This change to the facility will result in cash savings for the Company in the initial years of up to £1.2m per year.

The Company is also pleased to announce that it has secured a further £800,000 convertible secured loan from Synergy Capital, taking the total loan to £2.3m. The principal terms of the new loan are the same as those of the original loan (announced on 31 December 2008) save that the loan is for three years, the interest rate chargeable is 12% per annum.

Outlook
Your Board is particularly mindful to target, as a key objective, continuing the current trend of reduction in losses at EBITDA level. The first quarter of this year delivered breakeven at an EBITDA level and the Board is confident that this achievement will be consistently reproduced as the impact of the Thresher loss diminishes proportionately with new ATM installations, in line with market expectations.

 

Ciaran Morton
Chairman & Chief Executive Officer

3rd March 2010

 

For further information:

Cashbox plc
Ciaran Morton, Chief Executive Officer	Tel: +44 (0) 1256 441 000
	www.cashboxplc.co.uk
Seymour Pierce Limited
Jonathan Wright	Tel: +44 (0) 207 107 8000
	www.seymourpierce.com
Fairfax I.S. PLC
Ewan Leggat	Tel: +44 (0) 207 598 5368
	www.fairfaxplc.com

Media enquiries:

Threadneedle Communications
Josh Royston / Graham Herring	Tel: +44 (0) 207 653 9850
	www.threadneedlepr.co.uk

 

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