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MPAY Mi-pay Group Plc

1.20
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Last Updated: 00:00:00
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Share Name Share Symbol Market Type Share ISIN Share Description
Mi-pay Group Plc LSE:MPAY London Ordinary Share GB00B0N59376 ORD 10P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 1.20 1.00 1.40 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Mi-Pay Group PLC Interim Results (3764K)

21/09/2016 7:00am

UK Regulatory


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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 GBP39.1 million versus H1 2015.

-- Total revenue increased to GBP1.6 million (H1 2015: GBP1.5 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 GBP1.0 million (H1 2015 GBP0.7 million), underpinned by a 13 percentage point improvement in gross margin to 62% (H1 2015: 49%).

-- GBP0.5m reduction in total administrative expenses to GBP1.2 million (H1 2015: GBP1.7 million).

-- Operating loss reduced by GBP0.7 million to GBP0.3 million for the period (H1 2015: GBP1.0 million).

   --      Cash & cash equivalents as at 30 June 2016 were GBP3.4 million (H1 2015: GBP3.8 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 GBP0.1 million for the period. (H1 2015: Net cash outflow GBP0.7 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   Tel: +44 20 3053     Tel: +44 161 831 
  2129               8671                 1512 
 Seamus Keating,    Graham Herring       Nick Cowles 
  Chairman 
 John Beale, CFO    Tim Metcalfe         Jamie Peel 
                     Heather Armstrong 
 

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 GBP39.1 million versus GBP29.2 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 GBP1.0 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 GBP1.6 million (GBP1.5 million H1 2015). Our revenue growth was impacted by a GBP0.2 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 6(th) 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     Unaudited       Audited 
                                   Six months    Six months          Year 
                                        ended         ended         ended 
                                      30 June       30 June        31 Dec 
                                         2016          2015          2015 
                                          GBP           GBP 
                                                                      GBP 
 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 activities(1)           (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 
-------------------------------  ------------  ------------  ------------ 
 

(1)Adjusted 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 GBP1.0 million, with a 13 percentage point improvement in gross margins. Additionally, we continued to manage effectively our administrative expenses, reducing these by a further GBP0.5 million against the same period in 2015 to GBP1.2 million which led to a reduction in our Operating losses of GBP0.7 million to GBP0.3 million. In addition, this loss included GBP0.1 million relating to deferred salaries not paid to Directors and GBP0.1 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 GBP0.2 million and we closed the period expecting to recover GBP0.4 million in cash for research and development tax credits due for the 18-month period to June 2016, GBP0.3 million of which was paid in August 2016.

The Group ended the period with GBP3.4 million in cash and cash equivalents (GBP3.8 million at 30 June 2015), noting that of this balance, GBP2.3 million related to the operation of managing client payments (GBP2.3 million as at 30 June 2015). Excluding a GBP0.1 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 GBP0.1 million (GBP0.7 million for the 6-month period to 30 June 2015). In August 2016 we subsequently received a cash inflow of GBP0.3 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 GBP80 million (2015: GBP65 million). Together with our current visibility of professional services projects, we expect total revenue for 2016 in the range of GBP3.2-3.5 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

 
                                         Unaudited       Unaudited         Audited 
                                         Six months     Six months            Year 
                                           ended             ended           ended 
                                          30 June          30 June          31 Dec 
                                            2016              2015            2015 
                                 Note       GBP                GBP             GBP 
------------------------------  -----  ------------  -------------  -------------- 
 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

 
                                            Unaudited      Unaudited        Audited 
                                           Six months     Six months           Year 
                                                ended          ended          ended 
                                              30 June        30 June         31 Dec 
                                                 2016           2015           2015 
                                  Note            GBP            GBP            GBP 
-------------------------------  -----  -------------  -------------  ------------- 
 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

 
                                              Unaudited     Unaudited       Audited 
                                             Six months    Six months          Year 
                                                  ended         ended         ended 
                                                30 June       30 June        31 Dec 
                                                   2016          2015          2015 
                                    Note            GBP           GBP           GBP 
---------------------------------  ------  ------------  ------------  ------------ 
 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

 
                                                           Share        Reverse 
 For the period ended 30            Share       Share    options    acquisition      Merger       Retained 
  June 2016                       capital     premium    reserve        reserve     reserve        deficit       Total 
                                      GBP         GBP        GBP            GBP         GBP            GBP         GBP 
-----------------------------  ----------  ----------  ---------  -------------  ----------  -------------  ---------- 
 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

 
                                                         Share        Reverse 
 For the period ended 30          Share       Share    options    acquisition      Merger       Retained 
  June 2015                     capital     premium    reserve        reserve     reserve        deficit         Total 
                                    GBP         GBP        GBP            GBP         GBP            GBP           GBP 
---------------------------  ----------  ----------  ---------  -------------  ----------  -------------  ------------ 
 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

 
                                                         Share        Reverse 
 For the year ended 31            Share       Share    options    acquisition      Merger       Retained 
  December 2015                 capital     premium    reserve        reserve     reserve        deficit         Total 
                                    GBP         GBP        GBP            GBP         GBP            GBP           GBP 
---------------------------  ----------  ----------  ---------  -------------  ----------  -------------  ------------ 
 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     Unaudited     Audited 
                           Six months    Six months        Year 
                                ended         ended       ended 
                              30 June       30 June      31 Dec 
                                 2016          2015        2015 
                                  GBP           GBP         GBP 
 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      Unaudited   Audited 
                             Six months     Six months      Year 
                                  ended          ended     ended 
                                30 June        30 June    31 Dec 
                                   2016           2015      2015 
                                    GBP            GBP       GBP 
------------------------  -------------   ------------  -------- 
 
 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     Unaudited       Audited 
                           Six months    Six months          Year 
                                ended         ended         ended 
                              30 June       30 June        31 Dec 
                                 2016          2015          2015 
                                  GBP           GBP           GBP 
-----------------------  ------------  ------------  ------------ 
 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     Unaudited   Audited 
                                    Six months    Six months      Year 
                                         ended         ended     ended 
                                       30 June       30 June    31 Dec 
                                          2016          2015      2015 
                                           GBP           GBP       GBP 
 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     Unaudited     Audited 
                                    Six months    Six months        Year 
                                         ended         ended       ended 
                                       30 June       30 June      31 Dec 
                                          2016          2015        2015 
                                           GBP           GBP         GBP 
 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

IR URSNRNUAKUAR

(END) Dow Jones Newswires

September 21, 2016 02:00 ET (06:00 GMT)

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