Source - RNS
RNS Number : 3764K
Mi-Pay Group PLC
21 September 2016
 

21 September 2016

 

This announcement contains inside information

 

Mi-Pay Group plc

('Mi-Pay', the 'Group', or the 'Company')

 

Interim Results

 

Mi-Pay (AIM: MPAY), the leading provider of outsourced and fully managed digital transformation and mobile payment solutions to Tier 1 Mobile Network Operators and Mobile Virtual Network Operators, is pleased to present its unaudited Interim Results for the six months ended 30 June 2016.  

 

Operational Highlights

·      During the period we were the first provider to deliver Amazon Payments as a Mobile Wallet payment solution to the Mobile Operator community enhancing our on-device digital payments capabilities and continue to see an increase in payments via mobile wallet solutions.

·      Increasing focus and use by consumers of on device payment solutions such as 'Mobile Optimised Web Pages' and 'Mobile Applications'.

·      We have continued to deliver high payment success rates and low fraud levels in line with internal targets during the period, enabling us to improve commercial terms with our partners as our volumes grow in the longer term and to realise the benefits of our internal fraud solution.

·      IBM global Beacon award winner for "Outstanding Solution Hosted on IBM Cloud" for our globally secure data centre platform.

·      Successfully delivered annual PCI DSS level 1 accreditation for 2016/2017.

 

Financial Highlights

 

·      Value of transactions processed in the period increased by 34% to £39.1 million versus H1 2015.

·      Total revenue increased to £1.6 million (H1 2015: £1.5 million). Transaction revenue growth of 9% was lower than our volume growth of 34%, as one customer, on contract renewal opted to pay the merchant acquiring fee directly rather than through the Mi-Pay contract which now covers our highest value services, having no overall impact on our gross profit.

·      Transaction growth and enhanced processing efficiency delivered a 33% improvement in Gross profit to £1.0 million (H1 2015 £0.7 million), underpinned by a 13 percentage point improvement in gross margin to 62% (H1 2015: 49%).

·      £0.5m reduction in total administrative expenses to £1.2 million (H1 2015: £1.7 million).

·      Operating loss reduced by £0.7 million to £0.3 million for the period (H1 2015: £1.0 million).

·      Cash & cash equivalents as at 30 June 2016 were £3.4 million (H1 2015: £3.8 million).

·      Net cash out flows, excluding movements in amounts due to clients, cash flow from financing and investing activities and one off exception expenditure reduced to £0.1 million for the period. (H1 2015: Net cash outflow £0.7 million).

·      Basic and diluted loss per share 0.6 pence (H1 2015: 3 pence loss per share).

 

Seamus Keating, Chairman of Mi-Pay Group plc commented:

"The Board is pleased with the progress made during the first half of 2016 and specifically the continued improvement in gross profits and lower operating costs, making further progress towards profitability.

We are seeing increasing opportunities with our clients as they start to embrace the need for a robust digital payment strategy and, in parallel, focus their attention on how they will deal with the increasing global risks of payment fraud and data security. Our proven capabilities in both of these areas means our solution is becoming increasingly relevant in our market.  This strengthening business environment together with a strong closing cash position allows us to continue to invest to evolve and future-proof our product and service offerings."

 

 For further information, please contact:

 

Mi-Pay Group plc

IFC Advisory

Zeus Capital 

Tel: +44 207 112 2129

Tel: +44 20 3053 8671

Tel: +44 161 831 1512

Seamus Keating, Chairman

Graham Herring

Nick Cowles

John Beale, CFO

Tim Metcalfe

Heather Armstrong

 

Jamie Peel

 

Founded in 2003, Mi-Pay Group enables clients to transform their customers' payment journey and move them from paper to digital, improving the overall customer experience and delivering more choice and flexibility for pre-paid customers.  Our product offering provides the infrastructure to enable pre-paid mobile devices to be topped up via a variety of channels such as websites, mobile applications and social media applications.  Customers include Mobile Network Operators (MNOs) and Mobile Virtual Network Operators (MVNOs). Our fully outsourced online payments solutions are enhanced by a fully integrated suite of risk management tools to provide the highest level of payment fraud management and data security for our clients and their customers. Mi-Pay sells, integrates and operates its products and solutions on a global basis.  For further information, please visit www.Mi-Pay.com or the contact details as shown above.

 

 

 

Chief Executive Officer's review

 

H1 2016 Overview

 

Mi-Pay has continued to deliver improvements in its trading performance seeing further strong growth in the value of transactions processed, our core long term growth engine. This in turn has driven increased gross profits. The transaction growth has enabled us to deliver our services more efficiently on our platform and increased our ability to negotiate improved terms with our partners further enhancing gross margins, and reducing our cost base.

We continue to see the natural migration of consumers to the direct, on-line digital sales channel from that of the traditional retail store 'paper' voucher model. We expect this to continue as our clients increasingly recognise this channel as a strategic requirement for marketing, growth and customer retention. Our clients' digital transformation strategies, alongside financial risk aversion and an ever increasing cybersecurity risk increases the attractiveness of Mi-Pay as a partner to help drive this transition with our flexible, simple and secure outsourced solutions.  We believe that our proven ability to provide a market leading digital content delivery platform and an optimised on device seamless payment experience in a risk free environment puts us in a strong position to take advantage of this continuing migration trend.

 

Strategy

'The changing world of payments enhances our position as a consolidator of the market to de-risk our client's future access to their customers'

As consumers continue to migrate from customer-present, paper payment methods to making payments virtually, using digital channels, the Mi-Pay proposition becomes increasingly relevant to our target audiences - in terms of growth, customer retention, risk mitigation and data security.  Furthermore, against the back-drop of the economic uncertainty caused by Brexit and the likelihood of client's having a renewed focus on driving business cost efficiencies, our outsourced model adds another compelling reason for potential clients to work with Mi-Pay.

Our strategy is to deliver outsourced person not present, primarily on-line payment solutions, in the main to Mobile Operators enabling them to better serve their pre-paid subscriber base. Our value proposition provides an excellent and complete outsourced end-user experience and where required, indemnifies our clients against fraudulent transactions and takes the responsibility of securing their customers data. Mi-Pay's products also increase revenue through better customer payment experience maximising payment success rates. In addition, our products provide an invaluable tool for customer relationship management - reducing churn rates and enabling online payment solutions as a marketing tool. Critically we are payment agnostic and will facilitate across our client base, the relevant market leading payment methods, applying our own experience and optimisation techniques to enhance the existing customer experience. This approach both improves the customer journey and future proofs our clients' payment, security and risk management capabilities.

We aim to offer our clients a multi-faceted payment solution to enhance their customer retention strategies. This will enable them to deliver long term direct channel strategies transitioning their customers from traditional unregistered 'card' payment, to 'one click', recurring, secure, multi-channel payment. As a result, our clients will also be able to market directly to their consumers via our channels, helping them to drive long term value.

 

Through our connections to major operators in the UK, Europe and Asia Pacific we continue to see strong migration onto the digital channel. We are targeting growth in volumes from existing clients as they continue to look for competitive solutions to retain and better manage their consumer bases. Our ability to consolidate multiple payment options, fraud and security solutions together with multiple customer contact channels de-risks our client's future access to their customers.

Asia Pacific is a market of significant potential for Mi-Pay where the penetration of consumers with both smartphones and bank accounts is growing to a level of critical mass. The global investments of Visa, MasterCard and subsequent payment specialists such as PayPal continue to drive the growth of consumers with bank accounts, facilitating our future growth in Asia Pacific and enabling us to engage with new and existing clients across the region.

Our solution provides a high value and risk free option to the Mobile Operators, whilst at the same time it provides our payment partners with access to growing markets. In Asia specifically our experience in optimising online payment solutions whilst managing fraud provides a clear competitive advantage as the market develops.

Operational Review

Trading

We delivered a 34% increase in total transaction value processed to £39.1 million versus £29.2 million for the same period in 2015, continuing our prior year trends of an annual 30% + per annum growth. This drove a 33% increase in gross profit to £1.0 million and our gross margin increased again from 49% in H1 2015 to 62% in H1 2016 as the increased transaction values enabled us to deliver improved terms with our partners and better manage our fraud risks.

 

Our total revenue increased to £1.6 million (£1.5 million H1 2015). Our revenue growth was impacted by a £0.2 million reduction in revenue over the comparative periods due to changes in the way we trade with a major client who insourced the lower value payment processing element of our service that we traditionally charge at cost. Our flexibility enabled us to re-sign a two-year contract extension and continue to deliver our higher value customer relationship channels, fraud and data security solutions with the change having no negative impact on our profits. This demonstrates our ability to flexibly adapt our commercial model to our customers' requirements without impacting our performance levels.

 

The growth in transactions continued to be delivered primarily from our existing European clients through the implementation of new services as we see the natural migration of their consumers to the on-line, digital channel. Additionally, we are seeing increasing client focus on security - both payment fraud management and cyber security to enhance the protection of consumer data. We see these trends continuing and Mi-Pay's solution has an increasing relevance in managing these challenges.

 

Whilst we continue to see the natural migration of consumers from the traditional 'in-store' paper voucher solutions onto the direct, digital solutions, we are now increasingly seeing our customers choosing website and 'on-device' payment channels such as Mobile Apps and Device Optimised Web pages. This now accounts for over 52% of our transactions processed (42% January 2015) versus that of the traditional Interactive Voice Solutions, which has reduced to less than 36% (41% January 2015). In addition, our consumers are now showing an increased preference for mobile wallet based payment solutions such as PayPal and Amazon Payments which have grown from 7% of our total volume to over 12% since January 2015. These are key areas for investment for Mi-Pay and one where we expect to see real growth helping to drive consumers onto the digital channel where we operate our services. During the last 12 months we have successfully delivered 'In-APP' payments to our two largest clients and have been the first payment provider to deliver Amazon Payments, alongside PayPal to the Operator community and expect to follow this up in H2 2016 with further new investments. We will continue to invest in market leading on-device payment solutions and on device delivery mechanisms.

 

Our service in the Philippines remains live with a major Mobile Operator, but we continue to see delays in marketing the solution and now expect the Mobile Operator to launch its marketing campaign later in 2016. In the United Kingdom we have seen 3 Virtual Mobile Network Operators close their service in the UK (Mobile By Sainsbury, Post Office Mobile and Globe Telecom) however we expect the majority of their customers to migrate to other client's services that we offer over time and this should therefore have limited impact over the long term.

 

Security and stability remains at our heart and the increasing risks that have been seen in the 'cyber community' in the last 12 months increases our solutions value to our clients and their customers. We are firstly pleased to see good infrastructure stability following the data center migration project in late 2015, which additionally led to a global IBM Cloud Solution award, and secondly, the continued stability in our employee base following the restructure in 2014 has led to improved solutions and reductions in our operational costs. We additionally continue to invest in our data security and were pleased to again achieve PCI DSS (3.2) level 1 accreditation for 2016/ 2017 for the 6th year running. We will deliver full data encryption, not simply payment data across our whole infrastructure to ensure all of our client's personal data is fully protected, but also to future proof and protect our clients to the highest level.

 

 

Financial Review

 

Unaudited

Six months ended 30 June 2016

£

Unaudited

Six months ended 30 June 2015

£

Audited

Year

ended 31 Dec 2015

 

£

Transactional Services: Gross Revenue

39,051,426

29,158,408

64,666,714

 

 

 

 

Transaction Services Revenue excluding contractual change

1,158,998

904,951

1,994,111

Impacted Client Transaction Services Revenue

48,818

206,408

263,019

 

 

 

 

Transaction Services Revenue

1,207,816

1,111,359

2,257,130

Professional Services Revenue

378,122

388,713

757,044

Revenue

1,585,938

1,500,072

3,014,174

 

 

 

 

Gross profit

982,513

736,229

1,691,342

Gross profit %

62%

49%

56%

 

 

 

 

Administrative Expenses

(1,236,982)

(1,739,601)

(3,130,318)

Operating loss

(254,469)

(1,003,372)

(1,438,976)

 

 

 

 

Cash and cash equivalents at beginning of period

3,530,154

2,002,698

2,002,698

Adjusted Net cash flow from operating activities¹

(131,679)

(679,206)

(681,258)

Exceptional items

(50,902)

-

(4,360)

Cash inflow from management of client payments

152,950

865,254

707,478

Capital Expenditure

(27,113)

(45,958)

(74,899)

Cash flow from financing

(33,000)

1,613,495

1,580,495

Cash and cash equivalents at end of period

3,440,410

3,756,283

3,530,154

 

 

 

 

Basic and diluted loss per ordinary share

(0.6)p

(3)p

(3.6)p

 

¹Adjusted Net cash flow from operating activities excludes cash flows from the management of client payments and exceptional items

 

With transaction values, revenues and gross profits all growing, we are pleased to report a 33% increase in gross profits to £1.0 million, with a 13 percentage point improvement in gross margins. Additionally, we continued to manage effectively our administrative expenses, reducing these by a further £0.5 million against the same period in 2015 to £1.2 million which led to a reduction in our Operating losses of £0.7 million to £0.3 million. In addition, this loss included £0.1 million relating to deferred salaries not paid to Directors and £0.1 million of costs related to one-off exceptional activities. 

Our balance sheet remained consistent with prior periods with no material movements to report and our working capital requirements remain minimal due to our business model of collecting payments at source. Cumulative amounts due to Directors for deferred salaries unpaid closed the period at £0.2 million and we closed the period expecting to recover £0.4 million in cash for research and development tax credits due for the 18-month period to June 2016, £0.3 million of which was paid in August 2016.

The Group ended the period with £3.4 million in cash and cash equivalents (£3.8 million at 30 June 2015), noting that of this balance, £2.3 million related to the operation of managing client payments (£2.3 million as at 30 June 2015). Excluding a £0.1 million positive working capital movement due to client related cash balances as our transaction volumes grew, capital expenditure, finance lease payments and one off exceptional items, net cash outflow from operating activities was £0.1 million (£0.7 million for the 6-month period to 30 June 2015). In August 2016 we subsequently received a cash inflow of £0.3 million for research and development tax credits relating to the 12-month period to 31 December 2015.

Employees

We recognise that the performance achieved in this period would not have been possible without the support and continued dedication of our staff who have supported the new delivery model and continued to deliver solutions to our clients, support the strong transaction growth and develop improved, secure technologies despite the restructure during the period. They are our most valuable resource and we would like to thank them for their efforts.

Outlook

Mi-Pay has made significant progress towards delivering its short term objective of becoming cash generative. Having invested heavily in 2014 the benefits of this are now being demonstrated in the Group's performance at every level with increased revenues, gross profits and reduced administrative expenses. We expect to continue to reduce cash burn on a month-by-month basis, see continued revenue growth from all of our clients and continue to improve our gross margins.

Continued investment into our fraud management capabilities and delivery in 2015 of a flexible, highly secure and market compliant global infrastructure environment, will provide us with a platform to grow more effectively and with greater stability. Our focus for the rest of 2016 and beyond is to achieve profitability, continue to support and grow our existing client bases and deliver new clients, specifically targeting the increasing need for more mobile and social media based payment experiences in a safe, secure and fully managed environment.

For the full year, we expect transaction value processed to be in the region of £80 million (2015: £65 million). Together with our current visibility of professional services projects, we expect total revenue for 2016 in the range of £3.2-3.5 million with gross margins expected to be in line with those experienced in H1. The Board is confident that good progress is being made towards profitability and cash flow break even.

The Board remains confident that our total market opportunity continues to increase as the digital payments market expands globally and our solutions become increasingly relevant to a wider set of customers and geographies, and our growing relationship with all of our clients keeps us in a strong position to take advantage of this. The key market of Asia remains an opportunity and one that we expect to deliver growth for us over the longer term.

 

 

 

Michael Dickerson                                             Seamus Keating

CEO                                                                  Chairman

 

 

 

 

Consolidated Statement of Comprehensive Income

For the period of six months ended 30 June 2016

 

 

Note

Unaudited

Six months ended

30 June 2016

                       £

Unaudited

Six months

ended

30 June 2015

£

Audited

Year

ended

31 Dec 2015

£

Transactional Services: Gross Revenue

 

39,051,426

29,158,408

64,666,714

 

 

 

 

 

Transactional Services: Net Commission Revenue

 

1,207,816

1,111,359

2,257,130

Professional Services Revenue

 

378,122

388,713

757,044

Revenue

 

1,585,938

1,500,072

3,014,174

Cost of sales

 

(603,425)

 (763,843)

(1,322,832)

Gross profit

2

982,513

736,229

1,691,342

 

 

 

 

 

Administrative expenses

 

 

 

 

 

 

 

 

 

General and administration

 

(1,014,919)

 (1,218,696)

(2,287,618)

Research and development

 

(104,089)

(237,390)

(384,909)

Depreciation

 

(67,072)

(81,042)

(127,121)

Share-based payment

 

-

(202,473)

(326,310)

Exceptional items

3

(50,902)

-

(4,360)

Total administrative expenses

 

(1,236,982)

(1,739,601)

(3,130,318)

 

 

 

 

 

Operating loss

 

(254,469)

(1,003,372)

(1,438,976)

 

 

 

 

 

Finance income

 

1,791

1,031

3,512

Finance expense

 

(30)

(471)

(478)

Loss before taxation

 

(252,708)

 (1,002,812)

(1,435,942)

 

 

 

 

 

Taxation

4

-

(3,149)

(3,149)

 

 

 

 

 

Loss for the period/year

 

(252,708)

 (1,005,961)

(1,439,091)

 

 

 

 

 

Other Comprehensive expense for the year

 

 

 

 

Exchange differences on translation of foreign operations

 

(645)

(1,927)

(695)

 

 

 

 

 

Loss and total comprehensive expense for period

attributable to the owners of the parent

 

(253,353)

 (1,007,888)

 

(1,439,786)

 

 

 

 

 

Basic and diluted loss per ordinary share

5

(0.6)p

(3)p

(3.6)p

 

 

 

Consolidated Statement of Financial Position

As at 30 June 2016

 

 

Note

Unaudited

Six months ended

30 June 2016

£

Unaudited

Six months ended

30 June 2015

£

Audited

Year

ended

31 Dec 2015

£

ASSETS

 

 

 

 

Non-current assets

 

 

 

 

Property, plant and equipment

 

218,101

275,197

258,059

Total non-current assets

 

218,101

275,197

258,059

 

 

 

 

 

Current assets

 

 

 

 

Trade and other receivables

6

772,411

966,705

724,335

R&D tax credit receivable

 

374,375

451,512

203,657

Cash and cash equivalents

 

3,440,410

3,756,283

3,530,154

Total current assets

 

4,587,196

5,174,500

4,458,146

 

 

 

 

 

Total assets

 

4,805,297

5,449,697

4,716,205

 

 

 

 

 

LIABILITIES

 

 

 

 

Current liabilities

 

 

 

 

Trade and other payables

7

(3,849,186)

(3,866,172)

(3,473,741)

Obligations under finance lease

 

(66,000)

(66,000)

(66,000)

Total current liabilities

 

(3,915,186)

(3,932,172)

(3,539,741)

 

 

 

 

 

Non-current liabilities

 

 

 

 

Obligations under finance lease

 

(66,000)

(132,000)

(99,000)

Total non-current liabilities

 

(66,000)

(132,000)

(99,000)

 

 

 

 

 

Total liabilities

 

(3,981,186)

 (4,064,172)

(3,638,741)

 

 

 

 

 

Net assets

 

824,111

1,385,525

1,077,464

 

 

 

 

 

Equity

 

 

 

 

Share capital

 

4,159,323

4,159,323

4,159,323

Share premium

 

1,403,923

1,403,923

1,403,923

Share options reserve

 

624,729

500,892

624,729

Reverse acquisition reserve

 

6,920,115

6,920,115

6,920,115

Merger reserve

 

6,808,742

6,808,742

6,808,742

Retained deficit

 

(19,092,721)

(18,407,470)

(18,839,368)

Total equity attributable to the equity shareholders of the parent

 

824,111

1,385,525

1,077,464

 

 

 

 

Michael Clay Dickerson

Chief executive officer

 

 

Consolidated Statement of Cash Flows

For the period of six months ended 30 June 2016

 

 

Note

Unaudited

Six months ended

30 June 2016

£

Unaudited

Six months ended

30 June 2015

£

Audited

Year

 ended

31 Dec 2015

£

Cash flows from operating activities

 

 

 

 

Loss before tax from continuing operations

 

(252,708)

(1,002,812)

(1,435,942)

 

 

 

 

 

Adjusted for:

 

 

 

 

Depreciation

 

67,072

81,042

127,121

Finance income

 

(1,791)

(1,031)

(3,512)

Finance expense

 

30

 471

478

Share based payment

 

-

 202,473

326,310

R&D credits

 

(170,808)

(81,395)

(203,657)

(Increase) / decrease in trade and other receivables

 

(48,632)

(238,346)

34,808

Increase / (decrease) in trade and other payables

 

375,445

1,228,235

833,887

 

 

 

 

 

Adjusted profit/(loss) from operations after changes in working capital

 

(31,392)

188,637

(320,507)

 

 

 

 

 

Interest received

 

1,791

1,031

3,512

Interest paid

 

(30)

(471)

(478)

Corporation tax (paid)/received (inc R&D credits)

 

-

(3,149)

339,333

 

 

 

 

 

Net cash flows from operating activities

 

(29,631)

186,048

21,860

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

Purchase of property, plant and equipment

 

(27,113)

(45,958)

(74,899)

 

 

 

 

 

Net cash flows from investing activities

 

(27,113)

(45,958)

(74,899)

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

Proceeds from issue of share capital, net of issue costs

 

-

1,646,495

1,646,945

Finance lease payments

 

(33,000)

(33,000)

(66,000)

 

 

 

 

 

Net cash flows from financing activities

 

(33,000)

1,613,495

1,580,495

 

 

 

 

 

Net increase / (decrease) in cash and cash equivalents

 

(89,744)

1,753,585

1,527,456

Cash and cash equivalents at beginning of period

 

3,530,154

2,002,698

2,002,698

 

 

 

 

 

Cash  and cash equivalents at end of period

 

3,440,410

3,756,283

3,530,154

 

Consolidated Statement of Changes in Equity

For the period of six months ended 30 June 2016

 

For the period ended 30 June 2016

Share

capital

Share premium

Share options reserve

Reverse acquisition reserve

Merger

reserve

Retained deficit

 

Total

 

£

£

£

£

£

£

£

At 1 January 2016

4,159,323

1,403,923

624,729

6,920,115

6,808,742

(18,839,368)

1,077,464

Loss for the period from continuing operations

-

-

-

-

-

(252,708)

(252,708)

Other comprehensive expense for the period

-

-

-

-

-

(645)

(645)

At 30 June 2016

4,159,323 

1,403,923 

624,729

6,920,115

6,808,742

(19,092,721)

824,111

 

 

 

 

Consolidated Statement of Changes in Equity

For the period of six months ended 30 June 2015

 

For the period ended 30 June 2015

Share

capital

Share premium

Share options reserve

Reverse acquisition reserve

Merger

reserve

Retained deficit

 

Total

 

£

£

£

£

£

£

£

At 1 January 2015

3,398,453

 518,298

298,419

6,920,115

6,808,742

(17,399,582)

544,445

Loss for the period from continuing operations

-

-

-

-

-

(1,005,961)

(1,005,961)

Other comprehensive expense for the period

-

-

-

-

-

(1,927)

(1,927)

Placing of new ordinary shares in the period

760,870

885,625

-

-

-

-

1,646,495

Share-based payment

-

-

202,473

-

-

-

202,473

 

 

 

 

 

 

 

 

At 30 June 2015

4,159,323

1,403,923

500,892

6,920,115

6,808,742

(18,407,470)

1,385,525

 

 

  

 

 

Consolidated Statement of Changes in Equity

For the year ended 31 December 2015

 

For the year ended 31 December 2015

Share

capital

Share premium

Share options reserve

Reverse acquisition reserve

Merger

reserve

Retained deficit

 

Total

 

£

£

£

£

£

£

£

At 1 January 2015

3,398,453

518,298

298,419

6,920,115

6,808,742

(17,399,582)

544,445

Loss for the year from continuing operations

-

-

-

-

-

(1,439,091)

(1,439,091)

Other comprehensive expense for the period

-

-

-

-

-

(695)

(695)

Additional placing shares

760,870

885,625

-

-

-

-

1,646,495

Share-based payment

-

-

326,310

-

-

-

326,310

 

 

 

 

 

 

 

 

At 31 December 2015

4,159,323

1,403,923

624,729

6,920,115

6,808,742

(18,839,368)

1,077,464

 

Notes to the Financial Information

 

 

1     Basis of preparation

 

The unaudited consolidated half-yearly financial information in this report has been prepared on the basis of the accounting policies expected to apply for the financial year to 31 December 2016 and in accordance with recognition and measurement principles of International Financial Reporting Standards (IFRS) as endorsed by the European Union. The accounting policies applied in the preparation of this half-yearly financial information are consistent with those used in the financial statements for the year ended 31 December 2015. This interim report has not been reviewed by the Group's auditors, and does not constitute statutory accounts within the meaning of the Companies Act 2006.  The financial information for the six months ended 30 June 2016 and 30 June 2015 is not audited.

 

The financial information contained in this document does not include all of the information required for full annual financial statements and do not comply with all of the disclosures in IAS34 'Interim Financial Reporting'.  Accordingly, whilst this financial information has been prepared in accordance with IFRS they cannot be construed as being in full compliance with IFRS.

 

The financial information for the year ended 31 December 2015 does not constitute the full statutory accounts for that period. The Annual Report and Accounts for 31 December 2015 have been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Accounts for 2015 was unqualified and did not include references to any matters which the auditors drew attention to by way of emphasis without qualifying their report and did not contain statements under Section 498(2) or 498(3) of the Companies Act 2006.

 

 

2     Segmental analysis

 

The chief operating decision maker has been identified as the Chief Executive Officer (CEO) of the group. The chief operating decision maker is responsible for regularly assessing the performance of the group's operating segments and performing the function of allocating resources. To assist the chief operating decision maker in this process, internally generated reporting is prepared for each operating segment.

 

The group has two operating segments that it reports on. These operating segments are:

 

·      Transaction Services Revenues: This segment generates revenue from the processing of transactions on behalf of clients and is Mi-Pay Group plc's core business.

·      Professional Services Revenues: This segment generates revenue from the development, delivery and hosting of our platform and client solutions.

 

The CEO assesses the performance of the operating segments based on revenue and gross profit. The CEO uses these measures to assess performance because they are quick to analyse and directly relevant to evaluating the results of each segment. ¹

 

 

 

2     Segmental analysis (continued)

 

Both segments are continuing operations and results are as follows:

 

Operating Segments

 

 

Unaudited

Six months ended 30 June 2016

£

 

Unaudited

Six months ended 30 June 2015

£

 

Audited

       Year ended 31 Dec 2015

£

Transaction Services Revenue

1,207,816

 

1,111,359

 

2,257,130

Professional Services Revenue

378,122

 

388,713

 

757,044

 

 

 

 

 

 

Total revenue

1,585,938

 

1,500,072

 

3,014,174

 

 

 

 

 

 

Transaction services cost of sales

542,866

 

670,071

 

1,167,525

Professional services cost of sales

60,559

 

93,772

 

155,307

 

 

 

 

 

 

Total cost of sales

603,425

 

763,843

 

1,322,832

 

 

 

 

 

 

Transaction services gross profit

664,950

 

441,288

 

1,089,605

Professional services gross profit

317,563

 

294,941

 

601,737

 

 

 

 

 

 

Total gross profit

982,513

 

736,229

 

1,691,342

 

 

 

 

 

 

Transaction services gross profit

55%

 

40%

 

48%

Professional services gross profit

84%

 

76%

 

79%

 

 

 

 

 

 

Total gross profit

62%

 

49%

 

56%

 

¹ There is no inter segment trading and assets and liabilities are not allocated to segments.

 

 

3     Exceptional items

 

The exceptional item recognised in the six month period to 30 June 2016 reflects costs that, in the opinion of the board of directors, are non-recurring as they relate to professional fees incurred on an aborted acquisition.

 

4     Taxation

 

Unaudited

Six months ended 30 June 2016

£

 

Unaudited

Six months ended 30 June 2015

£

 

Audited

        Year ended 31 Dec 2015

£

 

 

 

 

 

 

Foreign Tax

 

 

 

 

 

Current tax on foreign income for the year

-

 

3,149

 

3,149

 

 

 

 

 

 

Total tax charge

-

 

3,149

 

3,149

 

 

5     Loss per share

 

 

Unaudited

Six months ended 30 June 2016

£

 

Unaudited

Six months ended 30 June 2015

£

 

Audited

         Year ended 31 Dec 2015

£

Loss for the year

(252,708)

 

(1,005,961)

 

(1,439,091)

Weight-average shares outstanding (number)

41,593,229

 

38,776,750

 

40,175,719

 

 

 

 

 

 

Basic EPS

(0.6)p

 

(3)p

 

(3.6)p

Diluted EPS

(0.6)p

 

(3)p

 

(3.6)p

 

The numerators shown above represent the total loss from continuing operations for the period or year.

 

Since the Group was in a loss making position for all three periods presented, there was no difference between the weighted average number of shares used to calculate basic and diluted net loss per share.

 

 

6     Trade and other receivables

 

Unaudited

Six months ended 30 June 2016

£

 

Unaudited

Six months ended 30 June 2015

£

 

Audited

      Year ended 31 Dec 2015

£

Trade receivables

132,226

 

114,416

 

167,690

Less: provision for impairment of trade receivables

-

 

-

 

-

 

 

 

 

 

 

Trade receivables - net

132,226

 

114,416

 

167,690

 

 

 

 

 

 

Client receivables

490,243

 

749,960

 

471,428

Prepayments

117,877

 

63,861

 

65,785

Other receivables

32,065

 

38,468

 

19,432

 

 

 

 

 

 

Total trade and other receivables

772,411

 

966,705

 

724,335

 

 

7     Trade and other payables

 

Unaudited

Six months ended 30 June 2016

£

 

Unaudited

Six months ended 30 June 2015

£

 

Audited

      Year ended 31 Dec 2015

£

Trade payables

256,214

 

173,066

 

109,480

Client payables

2,822,383

 

3,068,999

 

2,626,055

Accruals

393,661

 

387,549

 

364,775

Deferred income

62,038

 

91,509

 

134,766

Other payables - tax and social security payments

44,565

 

74,473

 

95,365

Deferred directors' emoluments

213,504

 

62,796

 

138,150

Other Payables

56,821

 

7,780

 

5,150

 

 

 

 

 

 

Total trade and other payables

3,849,186

 

3,866,172

 

3,473,741

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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