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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| E-Pay Asia | LSE:EPY | London | Ordinary Share | AU000000EPY3 | ORD NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.75 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number : 1359C
e-pay Asia Limited
27 August 2008
ASX/AIM: EPY
27 August 2008
e-pay Asia Limited
(*e-pay Asia*, the *Company* or the *Group*)
Interim Results for the six months ended 30 June 2008
Highlights:
§ 220% increase in net earnings compared to the same period last year
§ 38.7% reduction in revenue was mainly due to changed upfront software sales strategy and closure of Indonesia operation
§ Core Malaysian business continues to generate positive cash-flow
§ Management focuses on improving shareholder value by rationalising listings and reducing overhead costs
§ Directors remain confident of prospects over the medium and longer term
John Croft, Non-executive Chairman, said:
*The Group has focused on its core market in Malaysia in the first half, which has shown steady progress with increased profitability. We
expect marketing activities launched in first half of 2008 will further improve revenue in the second half of this year. The 38.7% reduction
in sales compared to same period last year was mainly result of discontinued software sales and closure of our operations in Indonesia. The
Management has also strived to improve shareholder value through an ongoing programme of rationalisation. The AIM de-listing exercise is
expected to contribute positively to profitability through significant cost savings.
*The first half of 2008 has been a challenging period with global pressure on high fuel and food prices. Malaysia inevitably experienced
inflationary pressures, which has had a negative impact on consumer spending. If it continues, these pressures may affect the Company*s
second half performance. However, the Directors expect the impact will not be significant and are confident of the Company*s prospects over
the medium and longer term.
*Our Board members have recently purchased shares in the Company, which helps align the interest of the Board with those of our shareholders
is a reflection of their confidence in the future prospects of the business.
*The Company continues to explore opportunities for growth across the South East Asian region. We will update the market of developments as
they unfold.*
For further information, please contact:
Yap Chih MingChief Financial John Sarah Jacobs/
Officere-pay Asia LimitedTel: CroftNon-executive Parimal KumarSeymour
+6017 229 Chairmane-pay Asia Pierce
1616investor@epay-asia.com LimitedTel:+44 7785 LimitedLondon,
315 United KingdomTel:
588jcroft@epay-asia. +44 20 7107 8000
com
ABOUT epay Asia Limited
e-pay Asia Limited is one of the leading providers of electronic top up services for prepaid mobile users in South East Asia. The e-pay
Asia*s electronic top up services operates in 3 countries namely Malaysia, Thailand and Pakistan with approximately 15,000 point of sales.
e-pay Asia processes more than 100 million prepaid mobile top up transactions per year.
www.epay-asia.com
Chairman*s Statement
Review of operations
e-pay Asia has focused on growing and strengthening the Malaysian business during the period under review, and we are pleased to report
steady progress. Market opportunities in Malaysia continue to expand as the telecommunication industry develops and usage of electronic
top-up services increases.
Additionally, the closure of Mobiepay DOO Serbia and e-pay Indonesia last year has resulted in significant operating cost savings and other
cost-cutting measures underway since last year have shown favourable results with overall operational costs reduced.
The Group generated positive operating cashflow of A$3.0m. This represents a reduction of 66% on the same period last year, which was the
direct result of the changed upfront software sales strategy and the closure of Indonesia operations, which contributed A$2.5m in the same
period in 2007.
Total revenue for the period was A$4.8m (2007: A$7.8m) with EBITDA of A$2.4m (2007: A$2.2m). Profit after tax was A$0.4m (2007: A$0.1m).
Diluted earnings per share were 0.13 cents (2007: 0.05 cents).
e-pay Malaysia
The business in Malaysia remains stable, with positive operating cash flow of A$3.3m (2007:A$4.5m). The management continues to streamline
the business processes to enhance operational efficiency in anticipation of achieving further cost savings.
New Telecommunications operators (*Telcos*) have been granted licenses to operate 3G and WIMAX services in Malaysia and are expected to
launch their services starting in Q3 2008. These new products present fresh opportunities for the Company. We believe the new Telcos will
prefer electronic top-up solutions for their prepaid products rather than traditional scratch card, due to the much lower production and
distribution costs that electronic top-up provides. MNP (Mobile Network Portability), which is expected to be launched in October 2008, will
inevitably further heighten competition amongst Telcos. They will need to offer better call packages to retain or attract consumers. This
may erode Telcos* margins, so switching from scratch card to electronic top-up will be one way to decrease costs and maintain
profitability.
The Company continues to focus on introducing more products and services in its market offering to broaden its revenue stream. Opportunities
to offer services like the collection of TV subscriptions and toll road charges are in the pipeline and should be commercialised in the near
future.
New markets
The Chinese market joint venture progress has been delayed due to the demerger of the telecommunication industry in China. The Chinese
Government expects the entire telecommunication industry restructuring process to be completed by end of September. Despite the potential
risks, the Board remains convinced that this strategy will secure better long-term returns for the business.
Outlook
Despite an uncertain global economic outlook, the Company*s core business in Malaysia remains stable. The management will focus on
operational efficiency to counteract any adverse impact on the business. The continuous positive operating cash position reduces the
reliance on external financing and adequate banking facilities are available to underpin business expansion. The Board is confident of
prospects over the medium and longer term and looks forward to updating shareholders on progress in due course.
John Croft
Chairman
London, 27 August 2008
e-pay Asia Limited
ABN 99 089 227 887
AND CONTROLLED ENTITIES
AUDITOR*S INDEPENDENCE DECLARATION UNDER SECTION 307C OF
THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF E-PAY ASIA LIMITED
AND CONTROLLED ENTITIES
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2008 there have been :
· no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in
relation to this audit; and
· no contraventions of any applicable code of professional conduct in relation to the audit.
Hall Chadwick
Level 29, St Martins Tower
31 Market Street, Sydney NSW 2000
DREW TOWNSEND
Partner
Date: 27 August 2008
e-pay Asia Limited
Consolidated Income Statement
For the half-year ended 30 June 2008
Half-year
2008 2007
Notes A$ A$
Revenue 4,798,931 7,834,736
Other income 81,757 20,640
Employee benefits (1,297,603) (2,146,303)
Impairment of goodwill 5 - (926,797)
Other operating expenses (1,186,010) (2,546,847)
Profit before finance costs, 2,397,075 2,235,429
depreciation, and income tax
Finance costs (564,712) (882,740)
Depreciation & amortisation (847,220) (1,111,923)
Profit before income tax 985,143 240,766
Income tax benefit/(expense) 15,312 (25,844)
Net profit after income tax 1,000,455 214,922
Net profit attributable to outside (645,273) (103,766)
equity interests
Net profit attributable to members of 355,182 111,156
the parent entity
Earnings per share for profit from
continuing operations attributable to
the ordinary equity holders of the
company:
Basic earnings per share (cents) 0.13 cents 0.05 cents
Diluted earnings per share (cents) 0.13 cents 0.05 cents
The above consolidated income statement should be read in conjunction with the accompanying notes.
e-pay Asia Limited
Consolidated Balance Sheet
As at 30 June 2008
Notes 30 June 2008 31 December 2007
A$ A$
Current Assets
Cash & cash equivalents 6 9,070,427 13,367,423
Trade and other receivables 3,249,378 3,141,979
Other financial assets 3 2,717,000 2,624,000
Prepaid airtime top-ups 5,795,135 8,374,507
Current tax assets 16,562 -
Other assets 152,439 178,996
Total Current Assets 21,000,941 27,686,905
Non-Current Assets
Property, plant and equipment 2,360,103 2,817,727
Intangible assets 1,844,162 2,293,034
Available-for-sale financial 33,734 84,337
assets
Total Non-Current Assets 4,237,999 5,195,098
Total Assets 25,238,940 32,882,003
Current Liabilities
Trade and other payables 5,700,815 7,078,777
Short-term financial liabilities 6,407,391 12,073,563
Current tax liabilities - 1,834
Short-term provisions 72,668 84,476
Other-deferred income - 70,000
Total Current Liabilities 12,180,874 19,308,650
Non-Current Liabilities
Long-term financial liabilities 446,904 906,719
Deferred tax liabilities 68,800 74,111
Long-term provisions 84,047 118,325
Total Non-Current Liabilities 599,751 1,099,155
Total Liabilities 12,780,625 20,407,805
Net Assets 12,458,315 12,474,198
Equity
Contributed equity 4 12,163,687 12,163,687
Reserves 477,215 1,067,199
Accumulated losses (2,741,605) (3,096,786)
Parent Entity Interest 9,899,297 10,134,100
Minority equity interest 2,559,018 2,340,098
Total Equity 12,458,315 12,474,198
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
e-pay Asia Limited
Consolidated Statement of Changes in Equity
For the half-year ended 30 June 2008
Half-year
2008 2007
Notes A$ A$
Total equity at the beginning 12,474,198 14,055,593
of financial year
Adjustment from translation of (722,930) (378,943)
foreign controlled entities
Minority equity interest share (242,806) -
of dividend paid
Available-for-sale financial (50,602) -
assets, net of tax
Net income and (expenses) (1,016,338) (378,943)
recognised directly in equity
Profit for the half-year 1,000,455 214,922
Total recognised income and (15,883) (164,021)
(expense) for the year
Transactions with equity - -- 56,734
holders in their capacity as 798,725(2,780,256)
equity holders: -
Contributions of equity, net
of transaction costs
- Conversion of convertible
notes by way of issue of
equity - Interim dividend
declared
- (1,924,797)
Total equity at the end of the 12,458,315 11,966,775
half-year
Total recognised income and
expense for the half-year is
attributable to:
Members of e-pay Asia Limited 355,182 111,156
Minority equity interest 645,273 103,766
1,000,455 214,922
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
e-pay Asia Limited
Consolidated Cash Flow Statement
For the half-year ended 30 June 2008
Half-year
2008 2007
A$ A$
Cash flows from operating activities
Receipts from customers 260,892,911 285,821,387
Payments to suppliers and employees (257,748,711) (276,511,758)
Interest paid (331,024) (531,738)
Interest received 152,266 207,460
Income tax paid (3,085) (83,972)
Net cash inflow from operating 2,962,357 8,901,379
activities
Cash flows for investing activities
Purchase of plant and equipment (261,606) (271,411)
Proceeds from sale of plant and 2,029 70,600
equipment
Net cash outflow for investing (259,577) (200,811)
activities
Cash flows from financing activities
Proceeds from issue of shares - 56,734
Dividend paid by parent entity - (2,780,256)
Proceeds from borrowings - 8,774,458
Repayments of borrowings (6,659,785) (4,995,668)
Net cash inflow from investing (6,659,785) 1,055,268
activities
Net (decrease)/ increase in cash held (3,957,005) 9,755,836
Cash at beginning of financial period 13,367,423 8,882,440
Effect on exchange rates on cash (339,991) (780,596)
holdings in foreign currencies
Cash at end of financial period 6 9,070,427 17,857,680
The above consolidated cash flow should be read in conjunction with the accompanying notes.
e-pay Asia Limited ABN 99 089 227 887 and Controlled Entities
Notes to the Financial Statements for the half year ended 30 June 2008
Note 1 : Basis of preparation
The half-year consolidated financial statements are a general purpose financial report prepared in accordance with the requirements of the
Corporations Act 2001, Australian Accounting Standard AASB 134: Interim Financial Reporting, Australian Accounting Interpretations and other
authoritative pronouncements of the Australian Accounting Standards Board.
It is recommended that this financial report be read in conjunction with the annual financial report for the year ended 31 December 2007 and
any public announcements made by e-pay Asia Limited and its controlled entities during the half-year in accordance with continuous
disclosure requirements arising under the Corporations Act 2001.
The accounting policies have been consistently applied by the entities in the consolidated group and are consistent with those in the
December 2007 financial report.
The half-year report does not include full disclosures of the type normally included in an annual financial report.
Reporting Basis and Conventions
The half-year report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of selected
non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied.
e-pay Asia Limited ABN 99 089 227 887 and Controlled Entities
Notes to the Financial Statements for the half year ended 30 June 2008
Note 2 : Segment information
Primary Reporting - Business Segments
PrepaidTop-up Software Solutions Corporate/ Total
unallocated
Segment revenue Half Year2008A$ Half year2008 Half Year2008A$ Half Year2008A$
A$
Sales to external customers 4,598,610 68,483 131,838 4,798,931
Other revenue 74,621 - 7,136 81,757
Total revenue 4,673,231 68,483 138,974 4,880,688
Segment result 1,588,471 (220,779) (382,549) 985,143
Profit before income tax 985,143
expense
Income tax expense 15,312
Profit after income tax 1,000,455
Segment assets 19,779,382 1,685,078 3,774,480 25,238,940
Segment liabilities 11,697,873 800 1,081,952 12,780,625
Acquisition of plant and 17,655 - - 17,655
equipment and intangibles
Depreciation andamortisation 568,611 266,223 12,386 847,220
expenses
Primary Reporting - Business Segments
PrepaidTop-up Telecommunications Software Solutions Corporate/ Total
unallocated
Segment revenue Half Year2007A$ Half Year2007A$ Half year2007 Half Year2007A$ Half Year2007A$
A$
Sales to external customers 5,332,828 - 2,401,579 100,329 7,834,736
Other revenue - - - 20,640 20,640
Total revenue 5,332,828 - 2,401,579 120,969 7,855,376
Segment result 178,422 - 1,329,576 (1,267,233) 240,766
Profit before income tax 240,766
expense
Income tax expense (25,844)
Profit after income tax 214,922
Segment assets 30,817,769 20,000 4,526,163 3,737,282 39,101,214
Segment liabilities 23,857,920 - 291,894 2,984,625 27,134,439
Acquisition of plant and 271,411 - - - 271,411
equipment and intangibles
Depreciation andamortisation 805,872 - 293,665 12,386 1,111,923
expenses
e-pay Asia Limited ABN 99 089 227 887 and Controlled Entities
Notes to the Financial Statements for the half year ended 30 June 2008
Note 2 : Segment information (continued)
Geographical Segment
The consolidated entity operates mainly in Asia in prepaid mobile top-up services in Malaysia, Thailand and Pakistan, prepaid diesel top-up
services in Malaysia, and software solutions business throughout the Asian region.
Note 3 : Other Financial Assets
The group subscribed for a convertible note (*note*) issued by a company on 10 September 2007. The subscription price of the note is
$2,500,000 and the note is non-interest bearing, unsecured and expires on 10 September 2008. The note was measured at its amortised cost
using the effective interest method resulting in a carrying value of $2,469,000 and a fair value of $248,000 for the option premium issued
as part of the convertible note. The group has the option of either converting the note into ordinary fully paid shares in the issuer of the
note or may request the subscription price to be repaid in full.
At 30 June 2008, the company who issued the convertible notes was in the process of establishing a business based on telecommunications
products distribution arrangements in China. The directors are of the opinion that upon the successful negotiation of the above, the new
business venture will earn a return equivalent or greater than the above carrying values.
Note 4 : Equity securities issued
2008 2007 2008 2007
Shares Shares $ $
Issues of ordinary shares
during the half-year
Exercise of options issued - 283,670 - 56,734
Deferred Consideration of - 72,500,000 - -*
acquisition of e-pay Asia
Holdings Ltd
Issued as a result of - 2,732,349 - 798,725
conversion of convertible note
during the period
- 75,516,019 - 15,355,459
e-pay Asia Limited ABN 99 089 227 887 and Controlled Entities
Notes to the Financial Statements for the half year ended 30 June 2008
Note 4 : Equity securities issued (continued)
* the issue of 72,500,000 shares to e-pay Asia Holdings Limited has been accounted for as an adjustment to the initial accounting for the
cost of combination arising from the reverse take-over of e-pay Asia Limited by e-pay Asia Holdings Limited in the 2005 financial year.
Refer further details in Note 2 to the 31 December 2006 Annual Report.
Note 5 : Profit for the half-year
Profit for the half-year includes the following items that are unusual because of their nature, size or incidence:
Half-year
2008 2007
$ $
Expenses
Impairment of goodwill - 926,797
Less: Applicable income tax revenue - -
- 926,797
Note 6 : Cash and Cash Equivalents
June 2007 Dec 2007
$ $
Cash on hand and at bank 2,338,545 4,768,442
Term deposits a 6,731,882 8,598,981
b 9,070,427 13,367,423
a) Included in term deposits are deposits
amounting to $5,825,863 (2007 : $7,136,250)
pledged to the Group*s bankers as security
for credit facilities granted to the Group.
June 2008 June 2007
b) Reconciliation of Cash $ $
Cash and cash equivalent 9,070,427 18,183,930
Bank overdraft - (326,250)
Total cash and cash equivalent in Cash Flow 9,070,427 17,857,680
Statement
e-pay Asia Limited ABN 99 089 227 887 and Controlled Entities
Notes to the Financial Statements for the half year ended 30 June 2008
Note 7 : Events subsequent to reporting
The Group announced its intention to cancel its AIM listing on 27 August 2008 which will be effective on 30 September 2008.
Note 8 : Contingent Liabilities
There has been no change in contingent liabilities since the last annual reporting date.
e-pay Asia Limited ABN 99 089 227 887 and Controlled Entities
Directors* Declaration
The directors of the company declare that:
1. The financial statements and notes, as set out on pages 4 to 12:
a. comply with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations; and
b. give a true and fair view of the economic entity*s financial position as at 30 June 2008 and of its performance for the half-year ended
on that date.
2. In the directors* opinion there are reasonable grounds to believe that the company will be able to pay its debts as and
when they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors.
John Croft
Chairman
Dated this 27 of August 2008
e-pay Asia Limited
ABN 99 089 227 887
and Controlled Entities Independent Auditor*s Review Report
to the members of e-pay Asia Limited
Report on the Half-Year Financial Report
We have reviewed the accompanying half-year financial report of e-pay Asia Limited and Controlled Entities (the consolidated entity) which
comprises the balance sheet as at 30 June 2008, and the income statement, statement of changes in equity and cash flow statement for the
half-year ended on that date, a statement of accounting policies, other selected explanatory notes and the directors' declaration.
Directors' Responsibility for the Half Year Financial Report
The directors of the consolidated entity are responsible for the preparation and fair presentation of the half-year financial report in
accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This
responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the half-year
financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting
policies; and making accounting estimates that are reasonable in the circumstances.
Auditor's Responsibility
Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance
with Auditing Standard on Review Engagements ASRE 2410 Review of an Interim Financial Report Performed by the Independent Auditor of the
Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that
the financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity's
financial position as at 30 June 2008 and its performance for the half year ended on that date; and complying with Accounting Standard AASB
134: Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of e-pay Asia Limited and Controlled Entities, ASRE
2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.
A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance
with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Independence
In conducting our review, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence
declaration required by the Corporations Act 2001, provided to the directors of e-pay Asia Limited and Controlled Entities on 30 June 2008,
would be in the same terms if provided to the directors as at the date of this auditor's review report.
Conclusion
Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report
of e-pay Asia Limited and Controlled Entities is not in accordance with the Corporations Act 2001 including:
A. giving a true and fair view of the consolidated entity's financial position as at 30 June 2008 and of its
performance for the half-year ended on that date; and
B. complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulation 2001.
e-pay Asia Limited
ABN 99 089 227 887
and Controlled Entities Independent Auditor*s Review Report
to the members of e-pay Asia Limited
Significant uncertainty regarding the recoverability of the other financial assets
Without qualifying our conclusion, we draw attention to Note 3 in the financial report. e-pay Asia Limited have measured the carrying value
of a convertible note (*note*) subscribed to a company at its amortised cost of $2,469,000 and option premium in the same company at a fair
value of $248,000. e-pay Asia Limited has the option of either converting the note into ordinary fully paid shares in the company issuing
the note or may request for the subscription price to be repaid in full. The note was issued to fund a business in the company. If the
investment is not profitable or the amount is not repaid, the carrying value of the note and the options may be impaired.
Hall Chadwick
Level 29
31 Market Street
Sydney NSW 2000
DREW TOWNSEND
PARTNER
Date 27 August 2008
This information is provided by RNS
The company news service from the London Stock Exchange
END
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