Latest Results
Interim Results for the six months ended 31st December 2009
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
OPERATIONAL AND FINANCIAL REVIEW
Performance for the current period, the six months ended 31 December 2009 (H1 09/10), is measured against both the comparable period being the first half of the prior year, the six months ended 31 December 2008 (H1 08/09), and the period immediately preceding the period under review being the six months ended 30 June 2009 (H2 08/09).
The installed base of ATMs increased to 2,528 by 31 December 2009, compared to 2,438 at 30 June 2009, but showed a decrease from 2,838 at 31 December 2008. However, transaction volumes in the period under review increased by 38% compared to the H1 08/09.
The increases in transaction volumes led to a significant increase of 13% in total revenue as compared to H1 08/09, up from £2.9m to £3.4m.
The period saw an increase in gross margin to 38% from the 36% experienced for the previous twelve months mainly due to better commercial contracts being negotiated and the loss of the Thresher estate (which generated below average gross margins for the Company).
Adjusted administration costs continued to fall and the period showed a further reduction of 18% as compared to H1 08/09 mainly due to a 23% fall in salaries for the period, with headcount at 39, down from 43 at H2 08/09 and 45 at H1 08/09.
The profitability of the company, represented by adjusted EBITDA (earnings before interest, tax, depreciation, amortisation, share-based payments and exceptional items) continued to improve dramatically, falling from a loss of £0.9m and £0.7m (in H2 08/09 and H1 08/09 respectively) to £0.1m for a 78% improvement.
Interest costs increased substantially as borrowings increased from £9.3m to £10.2m as compared to the corresponding period in 2008/2009.
Net cash from operating activities was an outflow of £0.6m, a significant improvement over the £2.1m and £2.5m in H2 08/09 and H1 08/09 respectively. The effect of not purchasing any assets for the period and obtaining additional funding of £0.8m in December 2009 was that the Company increased its cash reserves by £0.1m for the period.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 31 December 2009
| unaudited | unaudited | ||||
| 6 months to | 6 months to | Year to | |||
| 31-12-2009 | 31-12-2008 | 30-06-2009 | |||
| Notes | £ 000 | £ 000 | £ 000 | ||
| Revenue | 2 | 3,367 | 2,986 | 6,419 | |
| Cost of sales | (2,089) | (1,903) | (4,107) | ||
| Gross profit | 1,278 | 1,083 | 2,312 | ||
| Administration expenses | 3 | (2,028) | (2,171) | (5,123) | |
| Gain on bargain purchases | - | - | 1,199 | ||
| Total administration expenses | (2,028) | (2,171) | (3,923) | ||
| Operating loss | (750) | (1,088) | (1,612) | ||
| Finance income | - | 15 | 16 | ||
| Finance costs | 4 | (454) | (381) | (885) | |
| (454) | (367) | (869) | |||
| Loss attributable to the equity holders of the parent company | (1,204) | (1,454) | (2,481) | ||
| Loss per ordinary share (in pence) | 5 | ||||
| Basic | (0.8) | (1.0) | (1.8) | ||
| Diluted | (0.8) | (1.0) | (1.8) |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 31 December 2009
| unaudited | unaudited | |||||||
| 6 months to | 6 months to | Year to | ||||||
| 31-12-2009 | 31-12-2008 | 30-06-2009 | ||||||
| £ 000 | £ 000 | £ 000 | ||||||
| Opening shareholders' deficit | (5,015) | (5,348) | (5,348) | |||||
| Loss for financial period being the total recognised loss | (1,204) | (1,454) | (2,481) | |||||
| Share-based remuneration | 22 | 30 | 101 | |||||
| Issue of shares for cash including premium net of costs | - | 2,035 | 1,485 | |||||
| Issue of shares for acquisition | - | - | 573 | |||||
| Equity component of convertible loan | - | 1,002 | - | |||||
| Issue of shares for conversion of debt | 200 | - | - | |||||
| Issue of shares including premium on conversion of loan stock | - | - | 655 | |||||
| Closing shareholders' deficit | (5,997) | (3,735) | (5,015) | |||||
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2009
5621143
| unaudited | unaudited | |||||||
| 31-12-2009 | 31-12-2008 | 30-06-2009 | ||||||
| Notes | £ 000 | £ 000 | £ 000 | |||||
| ASSETS | ||||||||
| Non-current assets | ||||||||
| Intangible assets | 1,636 | 730 | 1,701 | |||||
| Property, plant and equipment | 2,715 | 3,453 | 3,239 | |||||
| 4,351 | 4,183 | 4,940 | ||||||
| Current assets | ||||||||
| Inventories | 301 | 453 | 257 | |||||
| Trade and other receivables | 6 | 532 | 946 | 495 | ||||
| Cash and cash equivalents | 711 | 1,122 | 594 | |||||
| 1,544 | 2,521 | 1,346 | ||||||
| TOTAL ASSETS | 5,895 | 6,704 | 6,286 | |||||
| LIABILITIES AND EQUITY | ||||||||
| Current liabilities | ||||||||
| Trade and other payables | 7 | 1,691 | 1,688 | 1,958 | ||||
| Borrowings | 8 | 6,535 | 849 | 6,583 | ||||
| 8,226 | 2,537 | 8,541 | ||||||
| Non current liabilities | ||||||||
| Borrowings | 8 | 3,666 | 7,902 | 2,760 | ||||
| 3,666 | 7,902 | 2,760 | ||||||
| TOTAL LIABILITIES | 11,892 | 10,439 | 11,301 | |||||
| Capital and reserves attributable to equity holders | ||||||||
| Share capital | 9 | 1,502 | 1,445 | 1,445 | ||||
| Share premium account | 9 | 8,962 | 9,389 | 8,823 | ||||
| Merger reserve | 9 | 2,661 | 2,180 | 2,661 | ||||
| Equity reserve | 9 | 655 | 1,002 | 655 | ||||
| Warrant reserve | 9 | 112 | - | 108 | ||||
| Retained earnings | 9 | (19,889) | (17,751) | (18,707) | ||||
| (5,997) | (3,735) | (5,015) | ||||||
| TOTAL EQUITY AND LIABILITIES | 5,895 | 6,704 | 6,286 | |||||
CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 31 December 2009
| unaudited | unaudited | ||||
| 6 months to | 6 months to | Year to | |||
| 31-12-2009 | 31-12-2008 | 30-06-2009 | |||
| Note | £ 000 | £ 000 | £ 000 | ||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||
| Cash used in operations | 10 | (286) | (1,799) | (1,986) | |
| Finance income | - | 15 | 16 | ||
| Finance costs | (321) | (324) | (582) | ||
| Net cash used in operating activities | (607) | (2,108) | (2,552) | ||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||
| Purchase of property, plant and equipment | - | (1,539) | (426) | ||
| Purchase of intangible fixed assets | - | (51) | (11) | ||
| Acquisition of MyATM | - | - | (319) | ||
| Acquisition of Cash4All | - | (311) | (1,238) | ||
| Net cash used in investing activities | - | (1,901) | (1,994) | ||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||
| Proceeds of issue of ordinary shares for cash (net of issue costs) | - | 1,485 | 1,485 | ||
| Proceeds from borrowings | 800 | 2,537 | 2,546 | ||
| Capital repayments on bank loan | (75) | - | - | ||
| Capital repayments on finance leases | (1) | (1) | (3) | ||
| Net cash generated from financing activities | 724 | 4,021 | 4,028 | ||
| Net increase/(decrease) in cash | 117 | 12 | (518) | ||
| Cash and cash equivalents at the beginning of the year | 594 | 1,112 | 1,112 | ||
| Cash and cash equivalents at the end of the year | 711 | 1,124 | 594 | ||
Notes
The notes are available in the PDF download
