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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:0072P
e-pay Asia Limited
29 February 2008
ASX/AIM: EPY
e-pay Asia Limited
("e-pay Asia" or the "Company")
e-pay Asia Limited is the leading provider of electronic
payment solutions and top up services for prepaid mobile users in South East
Asia
Preliminary results for the year ended 31 December 2007
Highlights
* New management team appointed in July
* Business realignment completed - focused on strong Malaysian core
business
* Revenue from Malaysia up 11% to A$11.3m (2006: A$10.2m)
* Revenue for the year was A$14.3m (2006: A$19.3m)
* A$14.5m of positive net operating cash during the year
* Cash balance was A$13.4m and Net Debt was A$0.4m at year end (2006:
A$8.9m and A$3.9m respectively)
* Earnings per share of 0.08 cents (A$) (2006: 3.05 cents)
* Net profit attributable to members of A$0.2m (2006: A$6.0m)
* Long term strategy in place for entry into significant Chinese market
John Croft, Chairman of e-pay Asia, commented:
"While this has been a challenging year, we believe the Company now has the team
and the structures in place to drive the business forward in 2008. We expect to
continue to grow our core Malaysian business and are excited about our prospects
in new territories such as China. I look forward to updating shareholders in due
course"
Enquiries
Yap Chih Ming Shane Dolan David Newton
Chief Financial Director Director
Officer
e-pay Asia Limited Biddicks Seymour Pierce Limited
Tel: +6017 229 1616 London, United Kingdom London, United Kingdom
+603 5632 2488 Tel: +44 207 448 1000 Tel: +44 207 107 8000
investor@epay-asia.com shane.dolan@biddicks.co.uk davidnewton@seymourpierce.com
Chairman's Statement
The period under review has been a difficult year for your company with the
decision to close our Indonesian operation as a result of challenging trading
conditions. Changes in Telco trading policies which would have resulted in
substantially increased operating costs made continued operations in that market
unsustainable. As a result, we refocused on the growth opportunities that exist
both in our core Malaysian business and opportunities that exist in new markets.
Revenue for the year ended 31 December 2007 decreased by A$5m as a result of the
closure of our Indonesian operation and lower software licences sales. Software
licences sales revenue declined to A$2.6m (2006: A$7.2) as a result of the
decision announced in July to change our strategy and move away from direct
licence sales in order to secure better long term returns for the business via
joint ventures. EBITDA decreased to A$4.6m (2006: A$10.3m), again mainly due to
lower software licence sales. EBITDA margin was 32% (2006: 52%) for the full
year with reported basic earnings per share of 0.08 cents (A$) (2006: 3.05
cents)
The Company retains a strong financial position with cash balances of A$13.4m,
(2006: A$8.9m) and net debt of A$0.4m, (2006: A$3.9m). In addition, there was a
significant improvement in key business metrics for the period with trade
debtors turnover reduced to 2 days (2006: 7 days) and stock turnover improved to
5 days (2006: 7 days).
In terms of our core Malaysian business, I am pleased to report that revenues
were up 11% over the previous comparable period with encouraging prospects for
2008 as we anticipate accelerating conversion from scratch card top up to
electronic top up, a market in which we enjoy a dominant position. This trend
will be driven partly by the arrival of new Telco players such as MVNO and WIMAX
. Increased competition among Telcos is underpinning their move to electronic
top-up in order to reduce their delivery costs and improve margins.
This provides the Company with good growth prospects as it will enable it to
capitalise on the needs of these new networks via its physical terminal outlets,
which are located throughout Malaysia. In addition, during 2008, we expect to
broaden our service coverage further via the addition of significant new retail
partners in tandem with enhanced product offerings.
With regards to international markets, our long term strategy for entry into the
Chinese market has evolved. As previously announced, we will now do this via a
joint venture to ensure we have a strong, local presence in this territory. This
approach, the Board believes, improves the likelihood of long term success and
is a stronger proposition than our original approach of selling software
licenses outright.
In order to support our overall strategy, management changes have been made with
the appointment of Wong Yin Ching, previously Group Chief Operating Officer, as
Chief Executive Officer and Yap Chih Ming, who was Director of Finance, as Chief
Financial Officer. We also appointed two non-executive directors over the
period, Jack Tan and James Huey, while I stepped up to the position of Chairman
following the resignation of Michael Lee.
I would to take this opportunity to thank all of the Company's employees,
business partners and associates for their significant contribution to the
business during the period under review
The Company now has a solid management team in place and, after having faced and
resolved a series of challenges, the Board is confident of steady progress in
the year ahead.
John Croft
Chairman
29 February 2008
Chief Executive Officer's Review
Financials
The performance of the Company during the period under review was adversely
affected by a number of factors. Firstly, the Board decided to change strategy
with regard to entry to the lucrative market in China by moving from selling
software licences to forming a joint venture. This has resulted in software
revenues reducing by A$4.6m. The Board believes that the long term success of
EPY is best achieved by having a physical presence in this market.
In addition to this, our operations in Indonesia were closed due to operating
costs increasing dramatically as a result of changing Telco trading policies.
Revenue for the year was A$14.3m (2006: A$19.3m) while net profit attributable
to members was A$0.2m (2006: A$6.0m). The Company generated A$14.5m positive
net operating cash during the year giving closing cash balances of A$13.4m and
net debt of A$0.4m (2006: A$8.9m and A$3.9m respectively). Earnings per share
were 0.08 cents (A$) with no dividend proposed for the period. These results
were achieved despite the closure of our Indonesian operation in October and the
decision to stop selling software licences directly as detailed above. The
Company's Dividend policy will be reviewed periodically depending on the overall
performance of the business.
Operational efficiencies post restructuring have improved markedly with a
significant reduction in trade debtors turnover and an improved stock turnover
position reflecting the success of our restructuring programme.
Strategy
Our core market in Malaysia of prepaid airtime sales continues to be strong,
registering an 11% growth in revenue over the year. Our strategy for 2007 was
one of consolidation and focus in driving productivity of our existing
terminals. As part of this strategy, we focused on:
a. Identifying unproductive terminal locations and replacing them with retailers
who demonstrate better market potential
b. Continuing to target new channels and retailers. This is an ongoing exercise
c. Initiating various advertising and marketing activities programmes to up
sell e-pay Asia products and services
d. Consolidating and improving on internal processes to continue to make our
services more attractive to retailers
e. Putting together a highly motivated sales team to manage the market
The new management team's first task since taking on its responsibilities was to
review all our existing businesses in the region and to identify the
opportunities and problem areas. The decision to close the Company's Indonesian
operations resulted from this detailed review which, as highlighted above,
identified the increasing complexities and challenges faced by the Company in
operating there.
New markets
During the period, e-pay Asia began to lay the foundation for successful entry
into our key new markets. While we ended strategic alliance discussions with
India's E-Charge Tech Pvt Ltd, the Company's strategy with regard to the
significant Indian market remains unchanged. We will continue to be on the look
out for opportunities in the Indian mobile telecommunication market.
More significantly, we announced in September that we had signed an agreement
with AsiaNet Technology Limited ('ANTL') to mark our first move to address the
sizeable electronic mobile top-up market opportunities in China.
ANTL is a special purpose vehicle incorporated in Hong Kong which has strategic
partnership alliances within the telecoms sector in certain provinces in China
and intends to embark on a mobile prepaid top-up business in these territories.
The Board believes that this is a significant opportunity for the Company. China
has a population of 1.32 billion with mobile phone subscriptions standing at 480
million in March 2007, expected to rise to 520 million in 2008 and 600 million
by 2010.
This agreement allows e-pay Asia to work through a local partner, which as
previously stated will enable the business to become embedded within the Chinese
mobile services sector, thereby securing longer term benefits and returns.
Further progress will be announced in due course once the various agreements and
licences have been secured.
Outlook
2007 has been a challenging year but we believe that the actions we have taken
throughout the course of the period have laid a more solid foundation from which
to grow our business in 2008. Malaysia remains a strong market for us as we
continue to grow our business here, in tandem with addressing the opportunities
which exist in new growth markets such as China.
Wong Yin Ching
CEO
29 February 2008
Preliminary final report (Appendix 4E)
1. Company details
Name of entity
---------------------------------------------------
E-PAY ASIA LIMITED
ABN No. 99 089 227 887
---------------------------------------------------
Financial year ended ('current period') Financial year ended ('previous period')
----------------------- ----------------------------
31 December 2007 31 December 2006
----------------------- ----------------------------
2. Key Information on: Results for announcement to the market
$A'000's
----- ------------------------ ---------------------------
2.1 Revenue Down 26 % to 14,278
2.2 Profit (loss) after tax Down 97 % to 206
attributable to members
2.3 Net profit (loss) for the Down 97 % to 206
----- period attributable to
members
------------------------
-------- ---------------------
2.4 Dividends Amount per security Franked amount per security
----- ------------------------ -------- ---------------------
Final dividend declared - c - c
----- subsequent to 31 December -------- ---------------------
2007
------------------------
Interim dividend 1.36 c - c
----- ------------------------ -------- ---------------------
2.5 Record date for determining entitlements to the final
dividend:
Date dividend is declared
Date dividend is payable
----- -------------------------------- --------------
9th March 2007
--------------
--------------
27th February 2007
--------------
--------------
10th April 2007
--------------
--------------
----- -------------------------------------------------
2.6 As at 31st December 2007
Total number of issued ordinary shares 281,656,343
Weighted average number of issued ordinary shares in 2007 258,515,950
Diluted weighted average number of issued ordinary shares 258,515,950
----- -------------------------------------------------
3. e-pay Asia Limited
Income Statement
Financial year ended 31 December 2007
----------------------- ------- ------------- -------------
Notes Consolidated Consolidated
2007 2006
$ $
Revenue 3(a) 14,278,381 19,347,341
Other Income 3(b) - 106,586
Employee benefits expense (3,803,054) (3,946,361)
Advertising and marketing promotions (300,257) (563,464)
Accommodation and travelling expenses (543,983) (794,748)
Telephone and utility charges (600,323) (987,962)
Professional and consultancy fees (942,399) (1,219,955)
Operating lease rentals (249,232) (287,263)
Terminal installation and maintenance
fees (245,336) (267,326)
Legal settlement expenses - (189,511)
Other operating expenses (1,249,873) (927,380)
------------- -------------
Profit before finance costs,
depreciation & amortisation, impairment
losses and income tax 6,343,924 10,269,957
Finance costs (1,503,954) (795,519)
Impairment of goodwill (928,501) -
Impairment of plant and equipment (618,329) (4,544)
Impairment of amounts due from associate
entities (151,811) -
------------- -------------
Depreciation and amortisation expense (2,084,298) (1,777,032)
------------- -------------
Profit before income tax 1,057,031 7,692,862
Income tax expense (348,872) (80,194)
------------- -------------
Profit for the year 708,159 7,612,668
============= =============
Attributable to :
Equity holders of the parent entity 206,287 6,011,365
Minority interest 501,872 1,601,303
------------- -------------
708,159 7,612,668
============= =============
Basic earnings per share (cents) 0.08 3.05
Diluted earnings per share (cents) 0.08 2.93
----------------------- ------- ------------- -------------
The accompanying notes form an integral part of this Income Statement.
Notes to Income Statement
Income Statement Items Consolidated Consolidated
2007 2006
$ $
3(a) Revenue:
Software sales revenue 2,569,379 7,209,023
Airtime commission revenue 10,766,259 11,401,818
Interest income 561,039 160,560
Licensing fees income - 129,582
Other revenue 381,704 446,358
Total revenue 14,278,381 19,347,341
3(b) Other income:
Foreign exchange gain - 27,426
Profit on sale of W Home business assets - 79,160
Total Other Income - 106,586
3(c) Profit before Income Tax includes the
following Net Gains and Expenses:
(i) Gains
Foreign exchange gains - 27,426
(ii) Expenses
Depreciation and amortisation :
Depreciation of:
- Leasehold improvements - 2,420
- Plant and equipment 1,415,287 1,557,077
Total depreciation 1,415,287 1,559,497
Amortisation of:
- Software 647,212 194,803
- Other intangible assets 21,799 22,732
Total amortisation 669,011 217,535
Total depreciation and amortisation 2,084,298 1,777,032
Impairment of trade receivables 149,022 15,384
Impairment of amounts due from associate
entities 151,811 -
Impairment of goodwill 928,501 -
Impairment of plant and equipment 618,329 4,544
Loss on disposal of plant and equipment 5,371 13,223
Operating lease rentals-minimum lease payments 249,232 287,263
Finance costs 1,503,954 795,519
4. e-pay Asia Limited
Balance Sheet as at 31 December 2007
Consolidated Consolidated
2007 2006
$ $
Current Assets
Cash and cash equivalents 13,367,423 10,505,432
Receivables 3,141,979 11,229,753
Other financial asset 2,624,000 -
Prepaid airtime top-up value 8,374,507 10,192,144
Other - deposits and prepayments 178,996 282,432
Total Current Assets 27,686,905 32,209,761
Non-Current Assets
Property, plant and equipment 2,817,727 4,479,523
Intangible assets- Goodwill - 928,501
- Software 2,249,946 2,949,237
- Others 43,088 67,425
Investments - equity accounted - -
Available-for-sale financial assets 84,337 126,504
Deferred tax assets - 41,709
Total Non-Current Assets 5,195,098 8,592,899
Total Assets 32,882,003 40,802,660
Current Liabilities
Payables 7,078,777 10,932,431
Borrowings 12,073,563 12,441,408
Current tax liabilities 1,834 61,444
Provisions 84,476 117,776
Others-deferred income 70,000 322,000
Total Current Liabilities 19,308,650 23,875,059
Non-Current Liabilities
Payables - 586,702
Borrowings 906,719 2,002,783
Deferred tax liability 74,111 77,314
Provisions 118,325 205,209
Total Non-Current Liabilities 1,099,155 2,872,008
Total Liabilities 20,407,805 26,747,067
Net Assets 12,474,198 14,055,593
Equity
Issued capital 12,163,687 11,187,177
Reserves 1,067,199 1,463,437
Accumulated losses (3,096,786) (522,818)
Equity attributable to equity holders of the
parent entity 10,134,100 12,127,796
Minority Interest 2,340,098 1,927,797
Total Equity 12,474,198 14,055,593
5. e-pay Asia Limited
Statement of Changes in Equity for the financial year ended 31 December 2007
Consolidated Consolidated
2007 2006
$ $
Balance at the beginning of the year 14,055,593 1,576,686
Exchange difference on translation (443,641) (24,124)
of foreign operations
Available for sale financial assets, (42,167) (48,496)
net of tax
Net income (loss) recognised directly in equity (485,808) (72,620)
Profit for the year 708,159 7,612,668
Total recognised profit (loss) for the period
attributable to members of 222,351 7,540,048
e-pay Asia Limited
Investment acquisitions settled by issue of
equity - 2,523,960
Liabilities/expenses settled by the issue of
equity 919,776 1,148,695
Contributions of equity, net of transaction
costs 56,734 845,155
Value of options issued in connection - 855,374
with issue of convertible notes
Value of conversion rights - 138,300
- convertible notes
Purchase of minority interest in - (419,866)
subsidiary
Interim dividend declared (2,780,256) -
Dividend declared to minority interest - (603,759)
in subsidiaries - 451,000
Contribution by equity holder
Total equity at year end 12,474,198 14,055,593
6. e-pay Asia Limited
Cash Flow Statement for the financial year ended 31 December 2007
Notes Consolidated Consolidated
2007 2006
$ $
Cash flows from operating activities
Receipts from customers 581,677,305 513,802,917
Payments to suppliers and employees (566,324,316) (510,902,503)
Interest received 437,039 160,560
Interest paid (1,216,652) (690,837)
Tax paid (109,836) (96,254)
Net operating cash flows 6(b) 14,463,540 2,273,883
Cash flows from investing activities
Proceeds from disposal of plant and
equipment 165,250 131,485
Payments for plant and equipment (846,091) (3,421,133)
Subscription of convertible loan note (2,500,000) -
Payments for investments - (1,381,418)
Net investing cash flows (3,180,841) (4,671,066)
Cash flows from financing activities
Proceeds from issues of shares and
options 56,734 845,157
Proceeds from borrowings 2,607,615 8,941,111
Repayments of borrowings (6,111,273) (1,354,222)
Capital raising expenses - (537,115)
Dividends paid (2,780,256) -
Net financing cash flows (6,227,180) 7,894,931
Net increase in cash held 5,055,519 5,497,748
Cash at the beginning of the financial
period 8,882,440 3,469,223
Currency translation difference (570,536) (84,531)
Cash at the end of the financial year 6(a) 13,367,423 8,882,440
The accompanying notes form an integral part of this Cash Flow Statement.
6(a) Reconciliation of cash
Cash at the end of the end of financial year as shown in statement of cash flows
is reconciled to items in the Balance
Sheet as follows:
-------------------------- ------------- ---------------
Consolidated Consolidated
2007 2006
$ $
Cash and cash equivalents 4,768,442 6,699,876
Term deposits 8,598,981 3,805,556
Bank overdrafts (included in current-
borrowings) - (1,622,992)
------------- ---------------
Total cash in statement of cash flows 13,367,423 8,882,440
-------------------------- ------------- ---------------
6(b) Reconciliation of net cash provided by operating activities to operating
profit after income tax
Consolidated Consolidated
2007 2006
$ $
Profit after income tax 708,159 7,612,668
Adjustments for non cash items:
- Depreciation and amortisation 2,084,298 1,777,032
- Impairment of goodwill 928,501 -
- Foreign exchange differences (215,302) (27,426)
- Impairment of trade receivables 149,022 15,384
- Loss on disposal of plant and equipment 5,371 13,223
- Impairment of plant and equipment 618,329 4,544
- Non cash interest income (124,000) -
- Amortisation of borrowing cost 456,792 104,683
- Non cash contribution by equity holder - 451,000
- Other reconciling items (13,567) 51,852
Increase (decrease) in liabilities:
- Payables (115,704) (1,237,515)
- Tax liabilities (17,901) (15,552)
- Provisions (120,183) (77,015)
( Increase) decrease in assets:
- Receivables 8,219,056 (6,940,994)
- Prepaid airtime value 1,900,669 541,999
Net operating cash inflows 14,463,540 2,273,883
7. Dividends
7.1 Individual dividends per security
------------------- --------- ------- -------- ----------
Date dividend Amount per Franked amount Amount per
is payable security per security security of
at 30% tax foreign source
dividend
------------------- --------- ------- -------- ----------
Final dividend: - -c -c -c
Current year
Previous year - -c -c -c
------------------- --------- ------- -------- ----------
Interim dividend:
Current year 10th April 2007 1.36c -c -c
Previous year - -c -c -c
------------------- --------- ------- -------- ----------
7.2 Total dividend per security (interim plus final)
--------------- ----------------
Current year Previous year
--------------- ----------------
+Ordinary securities 1.36c -c
--------------- ----------------
8. NTA backing
Current period Previous period
Net tangible asset backing per
+ordinary security 3.6 cents 5.3 cents
9. Control gained
9.1 Control gained over entities
Name of entity (or group NIL
of entities)
Date control gained NIL
Contribution of such entities to the reporting NIL
entity's profit/(loss) during the period
(where material).
Profit/(loss) of the acquired entities for the NIL
whole of the previous financial year was:
10. Details of associates and joint venture entities
Name of associate/ 1. Reporting entity's 2. Contribution to net profit
joint venture percentage holding /(loss)(where material)
Current Previous Current Previous
Period corresponding Period corresponding
period period
e-pay Pakistan
(Private)
Limited 30% 30% - -
Electronic
Payment
Network 18% 18% - -
(Thailand) Co. Ltd
11. Foreign entities
Details of origin of accounting standards used in compiling the report
In compliance with the International Financial Reporting Standards
12.
This report is based on accounts which are in the process of being audited.
Date: 29 Feb 2008
Jack Tan, Director
This information is provided by RNS
The company news service from the London Stock Exchange
END
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