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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Eservglobal Limited | LSE:ESG | London | Ordinary Share | AU000000ESV3 | ORD NPV (DI) |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 5.45 | 5.40 | 5.50 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMESG
RNS Number : 1090K
eServGlobal Limited
24 December 2015
eServGlobal Limited (eServGlobal or the "Company")
eServGlobal Preliminary Results (LSE:AIM) and Appendix 4E (ASX): FY2015
Paris: 24 December 2015
eServGlobal (AIM: ESG & ASX: ESV), the provider of end-to-end mobile financial services to emerging markets, announces its preliminary results and ASX Appendix 4E for the financial year ended 31 October 2015.
FINANCIAL SUMMARY
-- Revenue of A$25.9m (GBP13.0m) compared to the prior year of A$31.3m (GBP17.3m)
-- EBITDA loss of A$24.2m (GBP12.2m) compared to the prior year EBITDA profit of A$28.6m (GBP15.8m)
-- Core mobile money business adjusted EBITDA loss of A$10.4m (GBP5.2m) compared to a prior year adjusted EBITDA profit of A$2.6m (GBP1.4m).
-- Net loss after tax of A$33.7m (GBP17.0m) compared to a prior year profit of A$14.2m (GBP7.9m)
-- During the financial year, technology development costs of A$2.7m (GBP1.4m) have been capitalised in respect of the PayMobile 3.0 mobile money platform, enabling eServGlobal to sell through channel partners and improve project margins. Development was completed by 30 April 2015.
-- Loan funding of A$15.5m (GBP7.5m) obtained during the year -- 10 million shares issued during the year raising a total of A$5.2m (GBP2.6m) net of expenses
-- Cash and cash equivalents at 31 October 2015 of A$5.0m (GBP2.5m). Net cash flow used in operating activities increased from A$4.1m (GBP2.3m) in FY14 to A$15.7m (GBP7.9m) in FY15
Summary Financials FY15 FY15 FY14 FY14 Full Full Full Full Year Year Year Year A$M GBPM+ A$M GBPM+ Revenue 25.9 13.0 31.3 17.3 Cost of Sales 20.6 10.3 13.4 7.4 Gross Profit 5.3 2.7 17.9 9.9 Gain recognised on disposal of HomeSend - - -31.7 -17.5 Share of loss of associate 3.8 1.9 2.3 1.3 Adjusted Operating Costs* 17.1 8.6 15.3 8.5 Adjusted EBITDA (Core Business)** -10.4 -5.2 2.6 1.4 Net Interest -1.4 -0.7 -0.3 -0.1 Amortization -1.9 -1.0 0.0 0.0 Depreciation -0.1 -0.1 -0.6 -0.3 Adjusted PBT* -13.8 -7.0 1.7 1.0 Reported PBT -31.6 -15.9 27.8 15.3 Income Tax 2.1 1.1 13.5 7.5 PAT -33.7 -17.0 14.2 7.9
+Average exchange rate was 0.5021 GBP to AUD (FY2014 0.5521)
* Excludes gain recognised on disposal of HomeSend (FY2014 A$31.7m), equity-accounted share of HomeSend loss of A$3.8m (FY2014 A$2.3m), foreign exchange gains of A$0.9m (FY2014 loss of A$0.4m), non-recurring costs of A$3.3m (FY2014 A$2.5m), interest income of A$0.05m (FY2014 A$0.03m), share based payments of A$0.1m (FY2014 A$0.4m) goodwill impairment of A$4.0m (FY2014 nil) and debtor and work in progress provisions made after impairment re-assessment of prudent provisioning policies of A$6.9m (FY2014 nil)
** Excludes all items above (*) except goodwill impairment of A$4.0m (FY2014 nil) which is included in the profit and loss statement below the EBITDA total
Note: numbers in summary financials may not necessary total due to rounding
John Conoley, Executive Chairman, eServGlobal, said: "These numbers confirm the very poor year that was 2015 for eServGlobal. The consequent effect is that working capital remains tight in terms of operational cash flow in the short term. We expect to begin a recovery in the second quarter of the 2016 financial year. The Board and management are targeting generating operational cash in 2016 based on better management, better control, better sales execution, and the substantially lower cost base."
"eServGlobal's Board remain confident in the long term prospects for the HomeSend joint venture based on continued progress in 2015. HomeSend achieved 386% growth in live corridors during the 12 months to 30 November 2015. The joint venture has seen growing traction with the world's leading money transfer operations on the sending side and the opening of key new markets, such as China, on the receiving side. The coming year is crucial as the business transitions from the start-up phase, focussing on structural development, into a growing business beginning to focus on growing volumes through a widening number of active corridors. The Board of eServGlobal expects significant progress in 2016"
For further information, please contact: www.eservglobal.com eServGlobal Tom Rowe, Company Secretary T: +61 (0)2 8014 Alison Cheek, VP Corporate Communications 5050 Canaccord Genuity Limited (Nomad www.canaccordgenuity.com and Broker) T: +44 (0) 20 7523 Simon Bridges / Cameron Duncan 8000 / Emma Gabriel
About eServGlobal
eServGlobal (AIM:ESG, ASX:ESV) offers mobile money solutions which put feature-rich services at the fingertips of users worldwide, covering the full spectrum of mobile financial services, mobile wallet, mobile commerce, recharge, promotions and agent management features. eServGlobal invests heavily in product development, using carrier-grade, next-generation technology and aligning with the requirements of customers in over 50 countries.
Together with MasterCard and BICS, eServGlobal is a joint venture partner of the HomeSend global payment hub, a market leading solution based on eServGlobal technology and enabling cross-border money transfer between mobile money accounts, payment cards, bank accounts or cash outlets from anywhere in the world regardless of the users location.
eServGlobal also builds on its extensive experience in the telco domain to offer a comprehensive suite of sophisticated, revenue generating Value-Added Services to engage subscribers in a dynamic manner. eServGlobal has been a source of innovative solutions for mobile and financial service providers for 30 years.
FINANCIAL REVIEW
The consolidated entity achieved sales revenue for the year of A$25.9 million (2014: A$31.3 million).
Earnings before interest, tax, depreciation and amortisation ("EBITDA") was a loss of A$24.2 million after foreign exchange gains of A$0.9 million and share based payments of A$0.1 million (2014: EBITDA profit of A$28.6 million after foreign exchange losses of A$0.4 million and share based payments of A$0.4 million).
The net result of the consolidated entity for the year to 31 October 2015 was a loss after tax and minority interest for the period of A$33.7 million (2014: profit after tax and minority interest A$14.2 million). Included in this result was an income tax expense of A$2.1 million (2014: income tax expense of A$13.5 million). Loss per share was 12.8 cents (2014: earnings per share 5.6 cents).
The operating cash flow for the year was a net outflow of A$15.7 million (2014: net outflow A$4.1 million). Total cash flow for the period was a net inflow of A$1.0 million (2014: net outflow of A$1.3 million). Cash at 31 October 2015 was A$5.0 million.
Adjusted EBITDA for the core business was a loss of A$10.4 million. The main adjustments to the total EBITDA loss of A$24.2 million are for the equity-accounted share of the losses of the HomeSend joint venture company of A$3.8 million, non-recurring costs of A$3.3 million and the debtor and work in progress provisions of A$6.9 million made after impairment re-assessment of prudent provisioning policies.
The loss for the year includes significant provisions for old debtors and work in progress, together with a full impairment of the carrying value of goodwill.
The group operates in jurisdictions where delays are frequently encountered in receipting invoiced receivables due to banking and other regulatory issues, and where political instability and other factors can cause delays in provision of contractual services to customers. This has led to a historical and continuing high level of trade receivables and work in progress relative to the group's operational revenues. In the current year the new management team have undertaken a detailed review of the trade debtors and work in progress position and have changed the method adopted in estimating the required provision against these balances. The new method requires, unless particular circumstances dictate otherwise, a full provision to be adopted against trade receivables where these are overdue by more than 12 months and a full provision against recorded work in progress to be adopted where there has been inactivity on a particular contract (beyond the control of the group) for a period of 12 months or longer. These new provisioning estimation methods have resulted in the significant provisioning expense being recorded in the current year of A$4.6 million in respect of trade receivables and A$2.3 million in respect of work in progress. Management are confident that these policies are prudent and appropriate in recognition of the particular regulatory and political hurdles the company faces in the geographical regions in which it presently operates.
In light of the Group's poor performance in the current year, and in response to the Goodwill impairment assessment that has been undertaken by management as is required under Accounting Standards, the directors have resolved to fully impair the recorded carrying value of Goodwill in the statement of financial position totalling A$4.0 million. Whilst the historical Goodwill balance was attributable to the overall cash generating unit in which the group presently operates, the Goodwill is not seen to be directly related to the primary current and future income streams of the business and has therefore been impaired in full in the current year's accounts.
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The full unaudited accounts are presented in the Appendix 4E.
OPERATIONAL REVIEW
In FY15, eServGlobal reported an adjusted EBITDA loss of A$10.4M (GBP5.2M) for the core business. As previously announced, delays in closing certain high margin orders before year-end have impacted the Company's FY15 results, however these projects remain largely in the pipeline and it is expected they will be booked in FY16. In addition to these contract slippages, significant additional costs were incurred in delivering prior period projects, in turn causing further delay in recognising work in progress.
Total overheads in FY2016 are planned to be below A$14M, against a backdrop of approximately A$20M incurred for FY2015. The Company is targeting revenues of A$31 - A$34M in FY2016 and expects to be EBITDA positive for the year (a reduced cost base and improved sale process is expected to support a breakeven point of A$29 - A$31M in revenues). Substantial changes, including changes to the sales process and structure, are now largely complete and the Company will continue to focus on cost and process optimisation going forward.
With a streamlined and revitalised Board and management team, the Company is now better positioned to drive effective cash collection and deliver revenue growth. PayMobile 3 is the platform on which eServGlobal can execute. The Company's attention is now firmly on improving gross margins and revenue generation, and with our improved sales processes and streamlined costs, the Company is capable of exceeding a 20% EBITDA margin and with greater predictability. eServGlobal, however, remains cognisant of the usual macro and execution risks that any company may face (particularly in the emerging markets in which the Company operates).
During FY2015, Duncan Lewis, Francois Barrault and Paolo Montessori left the Board of Directors of the Company, with Stephen Blundell stepping down after year-end.
Core business: Mobile money and mobile financial services
eServGlobal offers best-in-breed mobile money and advanced recharge for emerging markets. eServGlobal develops and implements technology solutions which enable simple and secure financial inclusion, through the mobile phone, for people across the world.
Developments throughout the year:
-- Completion of the PayMobile 3.0 platform, a mobile money and advanced recharge technology for emerging markets.
o PayMobile 3.0 is now live in 5 customer sites and the Company is realising the benefits of offering a true industrialised product. The first end-to-end implementation of the standardised platform was completed for a customer in Botswana. This project was completed 35% faster than previous projects on PayMobile 2.0, allowing payment milestones to be reached earlier while investing less time and resources in development.
o Adoption of a new hardware architecture and a new handling process with PayMobile 3.0, making significant time savings through software standardisation. This approach brings the average project duration down from 6 - 8 months to 3 - 5 months, which equals to a 43% average saving in time and resources costs.
o Opportunities for both gross margin enhancement over time and for easier cash collection.
-- eServGlobal launched a white-label smartphone app to cater to the increasing penetration of low-cost smartphones in emerging markets. The app has already been sold to five existing customers, including services in Armenia and Somalia. The app will make eServGlobal's PayMobile 3.0 solution more attractive to new customers looking for a comprehensive mobile money solution. It will also encourage the subscribers of existing customers to increase usage of their mobile wallet, therefore generating extension and upgrade projects.
-- The company has made continued progress within the Zain Group. eServGlobal was featured as a key Technology Partner at the Zain Group's Technology Conference in December 2015.
o eServGlobal now has live services in four Zain affiliates.
HomeSend: International remittance
HomeSend is a disruptive, multilateral global payments hub that allows all players in the global payments space to interoperate via a single connection. HomeSend, as a B2B solution, plays a unique role in offering interconnectivity between MTOs, Telcos, Banks, Mobile Money Providers and Financial Service Providers. Through a connection to HomeSend, hub members can offer their subscribers (individuals, business, state bodies or NGOs) the ability to send money to and from bank accounts, mobile money accounts, payment cards or cash outlets - regardless of their location or that of the receiver. HomeSend natively interfaces with eServGlobal's domestic mobile money platform, providing a synergy between the two solutions.
HomeSend has been operating as a joint venture of MasterCard, eServGlobal and BICS since April 2014. During FY15, the joint venture has made substantial progress in corridor deployment; expanding customer coverage, both geographically and in terms of the types of partnerships; and progress on strategic initiatives such as the payment institution licence and move to a new PCI-DSS compliant data centre.
Developments and highlights throughout the year:
-- Significant progress in corridor deployments with 2,362 live corridors at end of November 2015, a 50% increase from June 2015 and a 386% increase since November 2014. New connections are going live each month, connecting over 200 sending countries and 33 receiving countries, representing more than 100% increase in sending countries since November 2014.
-- As new corridors go live, the number and volume of transactions continues to climb. 301% annual growth in transaction volume compared to November 2014.
-- HomeSend is establishing itself as the backbone of the mobile money transfer ecosystem. During FY15 the hub significantly expanded its coverage, both geographically and in terms of the types of service providers:
o HomeSend's customers include several of the Top 10 MTOs worldwide, including MoneyGram, WorldRemit and Skrill. In FY15 HomeSend added to this with the launch of live services for Azimo and Transfer Galaxy.
o In November 2015, HomeSend announced an agreement with GeoSwift, opening the substantial Chinese market to the hub. HomeSend's global partners can now send money directly to consumers and businesses in China, in local currency.
o Throughout the year, HomeSend also announced agreements in several new markets including Armenia, South Africa, Sir Lanka, Nigeria, Zimbabwe and Fiji.
-- MasterCard continues to show strong support for the joint venture, opening several new opportunities throughout the year. HomeSend will facilitate the international remittance capabilities for MasterCard Send, an end-to-end, digital platform that will leverage the industry-leading MasterCard network, paired with key capabilities from other personal payments platforms including HomeSend.
-- During FY15 the HomeSend Management team presented a strategy to accelerate growth to capitalise on current demand. The strategy includes:
o Co-funded marketing initiatives to stimulate subscriber demand
o Requirement for a new data center which is PCI-DSS compliant as a pre-requisite to connect to the MasterCard network
o Acquisition of payment institution license (required to provide services in several key markets)
The requirement for extra capital from JV partners (EUR3.5 million eServGlobal contribution) was approved by the Board in September 2015. eServGlobal paid EUR0.875 million ($1.353 million) on 14 October 2015 and is required to pay the balance of EUR2.625 million ($4.059) on 15 April 2016.
HomeSend's aspiration is to become the largest processor of digital remittances and to drive the shift to digital.
OUTLOOK
The Company expects to achieve a small EBITDA surplus for the core business in the 2016 financial year with some revenue growth and a substantially lower cost base.
Working capital remains tight in terms of operational cash flow in the short term. A recovery is expected to start in the second quarter of FY16. The company expects to require the second tranche of the loan facility from Henderson Global Investors of GBP2.5 million (A$ 5.0 million) before 31 March 2016, partly to underpin working capital requirements and also to repay the National Australia Bank loan of A$3.0 million which is due for repayment on 31 March 2016. The Board and management are targeting generating operational cash in 2016 based on better management, better control, better sales execution, and the substantially lower cost base.
The Company remains confident in the long term prospects for the HomeSend joint venture based on continued progress in 2015. HomeSend achieved 386% growth in live corridors during the 12 months to 30 November 2015. The joint venture has seen growing traction with the world's leading money transfer operations on the sending side and the opening of key new markets, such as China, on the receiving side. The coming year is crucial as HomeSend transitions from the start-up phase, focussing on structural development, into a growing business beginning to focus on growing volumes through a widening number of active corridors. eServGlobal remains satisfied with the continuing progress of the HomeSend joint venture and expects significant progress in 2016.
Appendix 4E
Preliminary Final Report
for the year ended 31 October 2015
eServGlobal Limited
ABN 59 052 947 743
1. Reporting Period
Current reporting period : Financial year ended 31 October 2015
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Previous reporting period : Financial year ended 31 October 2014
2. Results (unaudited) for announcement to the market Results A$ '000 --------------------------------------- ------------------------------------ Revenue Down 17.3% to 25,866 Profit/(Loss) after tax Down >100% to (33,654) Profit/(Loss) after tax attributable to members Down >100% to (33,820) Dividends (distributions) Amount per Franked amount security per security ---------------------- Current period Interim dividend Nil c 0% Final dividend Nil c 0% --------------------------------------- ------------ ---------------------- Previous corresponding period Interim dividend Nil c 0% Final dividend Nil c 0% --------------------------------------- ------------ ---------------------- Record date for determining - entitlements to the dividend. ------------------------------------ Brief explanation of the figures above The consolidated entity achieved sales revenue for the year of $25.9 million (2014: $31.3 million). Earnings before interest, tax, depreciation and amortisation and goodwill impairment ("EBITDA") was a loss of $24.2 million, inclusive of foreign exchange gains of $0.9 million and share based payments of $0.1 million (2014: EBITDA profit of $28.6 million inclusive of foreign exchange losses of $0.4 million and share based payments of $0.4 million). The net result of the consolidated entity for the year to 31 October 2015 was a loss after tax and minority interest for the period of $33.7 million (2014: profit after tax and minority interest of $14.2 million). Included in this result was an income tax expense of $2.1 million (2014: income tax expense of $13.5 million). Loss per share was 12.8 cents (2014: earnings per share 5.6 cents). The operating cash flow for the year was a net outflow of $15.7 million (2014: net outflow $4.1 million). Total cash flow for the period was a net inflow of $1.0 million inclusive of net proceeds from the issue of shares of $5.5 million and proceeds from borrowings of $15.5 million (2014: net outflow of $1.3 million inclusive of net proceeds from the issue of shares of $3.9m). Cash at 31 October 2015 was $5.0 million. Subsequent Events There has not been any matter or circumstance that has arisen since the end of the financial year that has significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years. ---------------------------------------------------------------- 3. Consolidated statement of profit or loss and other comprehensive income Year Ended Year Ended 31 Oct 2015 31 Oct 2014 Note $'000 $'000 ----------- ------------- Revenue 25,866 31,261 Cost of sales (20,608) (13,359) ----------- ------------- Gross profit 5,258 17,902 Gain recognised on disposal of HomeSend business - 31,684 Foreign exchange (loss)/ gain 883 (449) Research and development expenses (931) (2,151) Sales and marketing expenses (7,008) (5,218) Administration expenses (18,522) (10,900) Share of loss of associate (3,831) (2,275) Earnings before interest, tax, depreciation, amortisation and goodwill impairment (24,151) 28,593 Amortisation expense (1,883) - Depreciation expense (137) (584) Impairment of goodwill 10 (4,002) - Earnings before interest and tax (30,173) 28,009 Finance cost (1,356) (254) (Loss)/ Profit before tax (31,529) 27,755 Income tax credit/(expense) (2,125) (13,515) ----------- ------------- (Loss)/ Profit for the year (33,654) 14,240 =========== ============= Other comprehensive income/(loss) Items that may be reclassified subsequently to profit or loss: Exchange differences arising on the translation of foreign operations (nil tax impact) 4,297 (471) ----------- ------------- Total comprehensive (loss)/income for the year (29,357) 13,769 =========== ============= (Loss)/Profit attributable to: Equity holders of the parent (33,820) 14,102 Non-controlling interest 166 138 ----------- ------------- (33,654) 14,240 =========== ============= Total comprehensive (loss)/income attributable to: Equity holders of the parent (29,545) 13,599 Non-controlling interest 188 170 ----------- ------------- (29,357) 13,769 =========== ============= Earnings per share: Basic (cents per share) (12.8) 5.6 Diluted (cents per share) (12.8) 5.5 4. Consolidated statement of financial position 31 Oct 2015 31 Oct 2014 Note $'000 $'000 ----- ------------ ------------ Current Assets Cash and cash equivalents 4,976 3,679 Trade, other receivables and work in progress 8 22,140 24,620 Other current assets 9(a) 7,606 2,191 Inventories 66 173 Current tax assets 107 98 ------------ ------------ Total Current Assets 34,895 30,761 Non-Current Assets Investment in associate 13 31,473 27,777 Property, plant and equipment 84 3 Deferred tax assets 976 1,701 Goodwill 10 - 3,568 Other intangible assets - capitalised software development 6,939 5,443 Other non-current assets 9(b) 3,456 4,939 ------------ ------------ Total Non-Current Assets 42,928 43,431 ------------ ------------ Total Assets 77,823 74,192 ------------ ------------ Current Liabilities Trade and other payables 11 19,619 10,719 Borrowings 12 3,000 3,000 Current tax payables 235 2,023 Provisions 1,380 1,174 Deferred revenue 1,286 1,117 ------------ ------------ Total Current Liabilities 25,520 18,033 ------------ ------------ Non-Current Liabilities Borrowings 12 16,531 - Provisions 943 865 ------------ ------------ Total Non-Current Liabilities 17,474 865 ------------ ------------ Total Liabilities 42,994 18,898 ------------ ------------ Net Assets 34,829 55,294 ============ ============ Equity 5, Issued capital 6 116,074 110,574 Reserves 5 3,512 (4,155) Accumulated Losses (85,169) (51,349) ------------ ------------ Parent entity interest 34,417 55,070 Non-controlling interest 412 224
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Total Equity 34,829 55,294 ============ ============ 5. Consolidated statement of changes in equity Foreign Share Attributable Currency Based to owners Issued Translation Payments Accumu-lated of the Non-controlling Capital Reserve Reserve Losses parent Interest Total $'000 $'000 $'000 $'000 $'000 $'000 $'000 --------- ------------- ---------- -------------- ------------- ---------------- --------- Balance at 1 November 2014 110,574 (7,066) 2,911 (51,349) 55,070 224 55,294 ========= ============= ========== ============== ============= ================ ========= (Loss)/Profit for the year - - - (33,820) (33,820) 166 (33,654) Exchange differences arising on translation of foreign operations - 4,275 - - 4,275 22 4,297 --------- ------------- ---------- -------------- ------------- ---------------- --------- Total comprehensive income for the year (net of tax) - 4,275 - (33,820) (29,545) 188 (29,357) --------- ------------- ---------- -------------- ------------- ---------------- --------- Issue of new shares (Note 6) 5,500 - - - 5,500 - 5,500 Equity settled payments - - 3,392 - 3,392 - 3,392 --------- ------------- ---------- -------------- ------------- ---------------- --------- Balance at 31 October 2015 116,074 (2,791) 6,303 (85,169) 34,417 412 34,829 ========= ============= ========== ============== ============= ================ ========= Balance at 1 November 2013 106,695 (6,563) 2,473 (65,451) 37,154 200 37,354 ========= ============= ========== ============== ============= ================ ========= Profit for the year - - - 14,102 14,102 138 14,240 Exchange differences arising on translation of foreign operations - (503) - - (503) 32 (471) --------- ------------- ---------- -------------- ------------- ---------------- --------- Total comprehensive income for the year (net of tax) - (503) - 14,102 13,599 170 13,769 --------- ------------- ---------- -------------- ------------- ---------------- --------- Issue of new shares (Note 6) 3,879 - - - 3,879 - 3,879 Payment of dividends - - - - - (146) (146) Equity settled payments - - 438 - 438 - 438 --------- ------------- ---------- -------------- ------------- ---------------- --------- Balance at 31 October 2014 110,574 (7,066) 2,911 (51,349) 55,070 224 55,294 ========= ============= ========== ============== ============= ================ ========= 6. Issue of new shares
During the current year the company issued a total of 10,000,000 shares (2014: 5,928,055), raising a total of $5.212 million net of expenses (2014: $3.879 million).
The fundraising was by way of subscription agreements with existing and new Australian institutional investors at an issue price of $0.55 per share.
In addition, 800,000 employee share options were exercised during the period at an option price of $0.36 per share, raising a total of $0.288 million.
7. Consolidated statement of cash flows Year Ended Year Ended 31 Oct 2015 31 Oct 2014 $'000 $'000 ------------- ------------- Cash Flows from Operating Activities Receipts from customers 21,244 24,290 Payments to suppliers and employees (33,374) (30,100) Refund of research & development tax credits - 2,738 Interest and other finance cost paid (426) (282) Income tax paid (3,148) (720) Net cash used in operating activities (15,704) (4,074) ------------- ------------- Cash Flows From Investing Activities Proceeds from HomeSend business divestment, net of transaction costs - 5,418 Investment in HomeSend joint venture company (1,353) - Interest received 3 11 Payment for property, plant and equipment (163) (76) Software development costs (2,758) (6,327) Net cash used in investing activities (4,271) (974) ------------- ------------- Cash Flows From Financing Activities Proceeds from issue of shares 5,788 3,889 Payment for share issue costs (288) (10) Dividend paid by controlled entity to non-controlling interest - (146) Proceeds from borrowings 15,457 - Net cash provided by financing activities 20,957 3,733 ------------- ------------- Net increase/(decrease) in Cash and Cash Equivalents 982 (1,315) Cash At The Beginning Of The Year 3,679 4,909 Effects of exchange rate changes on the balance of cash held in foreign currencies 315 85 ------------- ------------- Cash and Cash Equivalents At The End Of The Year 4,976 3,679 ============= ============= 7.1 Notes to the consolidated statement of cash flows 31 Oct 31 Oct 2015 2014 $'000 $'000 a) Reconciliation of cash Cash and cash equivalents 4,976 3,679 ---------- --------- Year Ended Year Ended 31 Oct 31 Oct 2015 2014 $'000 $'000 b) Reconciliation of (loss)/ profit for the year to net cash flows from operating activities (Loss)/Profit for the year (33,654) 14,240 Interest received (3) (11) Depreciation of non-current assets 137 584 Amortisation of non-current 1,883 - assets (Profit)/Loss on disposal of non-current assets - 2 Foreign exchange (gain)/loss, including changes in foreign currency net assets and liabilities 373 (718) Equity settled share-based payments 54 438 Non cash finance cost 977 - Gain on disposal of business - (31,684) Share of loss of associate 3,831 2,275 (Increase)/decrease in current income tax balances (1,798) 6,048 (Increase)/decrease in deferred tax balances 726 8,624 Impairment of goodwill 4,002 - Impairment loss recognised on trade receivables and work in progress 7,193 245 Changes in net assets and liabilities: (Increase)/decrease in assets: - Trade receivables, work in progress and other assets (4,825) (6,003) - Inventories 106 (99) Increase/(decrease) in liabilities: - Trade and other payables 4,840 3,369 - Provisions 284 (511) - Other liabilities 170 (873)
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