TIDMBOX
RNS Number : 4728Z
Boxhill Technologies PLC
27 May 2016
27 May 2016
BOXHILL TECHNOLOGIES PLC
("Boxhill", the "Group" or the "Company")
Final results for the 18 month period to 31 January 2016 &
return from suspension
The board of directors of Boxhill (the "Board") is pleased to
announce the final results for the 18 month period to 31 January
2016; details can be found below.
The Company is publishing its report and audited accounts for
the 18 month period to 31 January 2016 to its website,
www.boxhillplc.com, in accordance with the Company's article of
association.
The suspension from trading of the Company's ordinary shares of
0.1 pence each ("Ordinary Shares") on the AIM Market of the London
Stock Exchange will be lifted at 07.30 am today and trading in the
Ordinary Shares will recommence at 08.00 am today.
A further announcement regarding the reconvening of the
Company's annual general meeting ("AGM") that was adjourned on 29
January 2016 will be made within the next two weeks.
For further information contact:
Boxhill Technologies PLC 020 7493 9644
Lord Razzall, Chairman
Website www.boxhillplc.com
Allenby Capital Limited (Nomad & Broker)
John Depasquale/Nick Harriss/ Richard Short 020 3328 5656
Chairman's Statement
Operating and Financial Review
The Company continues to develop the payments business and its
growth has brought about a welcome return to operational
profitability. The future brings, with the completion of the
acquisitions of both Emex (UK) Group Limited (EMEXPAY) and
Freepaymaster Limited, a comprehensive offering as a FinTech
company.
In addition to payment processing enabling merchants to accept
traditional and alternative payments, our new services include
digital wallet accounts for businesses and individuals, peer to
peer transactions, access to foreign and crypto currency exchanges,
worldwide wire payments and other emerging transaction methods
allowing businesses and individuals to securely pay before, during
or after using a service or purchasing a product.
Financial Summary
In my review of the half-year figures to 31 January 2015 the
Group made an operating profit before exceptional items of
GBP296,000 (2014: loss GBP49,000). I am pleased to report that for
the 18 months to 31 January 2016 the Group achieved an operating
profit before exceptional items of GBP970,000 compared to
GBP626,000 for the year to 31 July 2015 (2014: loss
GBP110,000).
In summary, for the eighteen months to 31 January 2016 the Group
performance was as follows:
Revenue GBP3,286,000
Gross Profit GBP2,423,000
EBITDA GBP1,006,000
Operating profit before exceptional items GBP970,000
Exceptional Items:
Loss for the period on disposal of subsidiary (GBP430,000)
Loss on disposal of Leasehold Land and Buildings
(GBP342,000)
Taxation charge (GBP205,000)
Loss for the period (GBP1,000)
The Consolidated Income Statement shows exceptional costs of
GBP430,000 relating to the loss on sale of Pay Corporation Limited
(GBP460,000 is a non-cash item representing a write off of goodwill
and thus does not affect the ongoing business being integrated into
EMEXPAY) and a further non-cash loss of GBP342,000 in respect of
the disposal of the leasehold land and buildings. The loss on
disposal of leasehold land and buildings resulted from the creation
of the joint venture to manage the Soccerdome facility and secure
its future for the benefit of the Group, avoiding capital spend of
at least GBP200,000 and securing an income of GBP250,000 from
Soccerdome moving forward.
The significant progress made in revenue growth and operating
profit demonstrates the Board's focus on building a sustainable
business, in no short measure helped by our small team of dedicated
staff. The biggest contributor is the payment software business and
this is where the Board believes we are only just beginning on a
journey towards building a significant player in the exciting
FinTech sector. The lottery business remains steady, and has seen
behind the scenes improvements in both the technology it relies
upon and the day to day functioning of the business. It is now well
placed for growth.
In the last Annual Report and Financial Statements reference was
made to a matter relating to a subsidiary company, Pay Corporation
Limited ("Paycorp") with a possible liability for VAT and an
equivalent amount due from debtors. The auditor's concerns therein
related to proof of recoverability of this amount from those
recipients and others and the relating potential liability to HMRC.
Although the matter was not a liability of the Parent Company but
that of a wholly owned subsidiary, it was felt that a disposal of
the subsidiary would be the prudent method of removing the risk of
that potential liability affecting the Group in the future. The
Board sought specialist legal and regulatory advice prior to the
transfer into Boxhill of Paycorp's trading activity and the
subsequent sale of that subsidiary to a third party.
Operational Summary
The Board has delivered on its promise of profitability. The
Company has also concluded the acquisitions of EMEXPAY and
Freepaymaster Limited. EMEXPAY was an existing supplier of
acquiring services to the Company and brings further services into
the Group widening our appeal to customers. The expanded Company is
now able to take advantage of its increased capacity and
functionality, with improvements to existing and new services being
rolled out in the coming weeks.
Prize Provision Services Limited, which operates The Weather
Lottery, has performed in line with expectations and continues to
play an important role in raising funds for hundreds of small
charities and non-profit organisations. This period we saw a
jackpot winner. Since incorporation and to date the Company has
paid out prizes to the value of GBP4.9m and has raised GBP5.4m for
good causes. The opportunity remains to support good causes at
grass roots, a gap created when the National Lottery announced it
will only support sports at an elite level.
Outlook
The payments division continues to win new customers across all
areas of e-commerce. Working with channel sales partners we are
able to acquire customers who previously may not have been
accessible to the Company. With the additional services offered by
EMEXPAY and Freepaymaster Limited we can now provide a complete set
of traditional and alternative payment services to businesses and
individuals. The acquisitions are already bearing fruit with the
Company's newly combined services providing sales from existing and
new customers. In addition, fees paid to EMEXPAY for their services
are of course now revenue for the Group.
The joint venture with Soccerdome has secured its future. The
newly redeveloped centre opened this month and is expected to
generate a modest income whilst allowing the management team to
focus on the Company's core businesses.
Having delivered on its promise of returning to profitability
the Board will continue its focus on prudent management of costs
and realising the return on investment the expanded business will
bring about. The year ahead sees the challenge of delivering
shareholder value through the continuing growth in the payments
business which will be aided by the planned appointment of a new
chief executive in the near future.
Lord E T Razzall
Chairman
26 May 2016
Strategic Report
The Directors present their Strategic Report on the Group for
the 18 months ended 31 January 2016.
Business review and future developments
The principal activities of Boxhill Technologies PLC are that of
lottery administrators and the provision of payment processing
products and services. A review of these activities, future
developments and principal risks is provided in the Chairman's
Statement and the Principal risks and uncertainties section.
Financial key performance indicators ("KPI's")
The key performance indicators reviewed by the Group Board are
as follows:
-- Turnover
-- Operating profit
-- Profit before taxation
-- Rolling cash flow forecasts
These indicators are reviewed by the Group Board at least once a
month. Explanations are sought and given for any material variances
and the management are required to provide plans to recover any
performance failures as they occur during the year.
Principal risks and uncertainties facing the Group
Management and employees
The nature of the Group and its business model creates reliance
upon retaining and incentivising its senior management and certain
key employees, whose expertise will be important to the fortunes of
the Group going forward. The Directors have endeavoured to ensure
that the principal members of its management team are suitably
incentivised, but the retention of such staff cannot be
guaranteed.
The Group may need to recruit additional senior management and
other staff in order to further develop its business. There can be
no guarantee that such individuals will be recruited in the Group's
preferred timetable or at the cost levels anticipated by the Group.
Competition for staff is strong and therefore the Group may find it
difficult to retain key management and staff. The loss of key
personnel and the inability to recruit further key personnel could
have a material adverse effect on the future of the Group through
the impairment of the day-to-day running of the businesses and the
inability to maintain existing client relationships.
Exposure of the Group to UK economic conditions
Demand for the Group's services may be significantly affected by
the general level of economic activity and economic conditions in
the regions and sectors in which the Group operates. Therefore, a
continuation of the challenging economic environment, especially in
regions or sectors where the Group's operations are focused, could
have a material adverse effect on the Group's business and
financial results.
Competition
The Group is engaged in business activities where there are a
number of competitors. Many of these competitors are larger than
the relevant businesses carried on by the Group and have access to
greater funds than the Group, which will potentially enable them to
gain market share at the expense of the Group.
Acquisitions
The Directors cannot discount circumstances where an acquisition
would support the Company's business strategy. However, there is no
guarantee that the Company will successfully be able to identify,
attract and complete suitable acquisitions or that the acquired
business will perform in line with expectations.
Funding and working capital
Maintaining a sufficient level of working capital is essential
to enable the Group to meet its foreseeable obligations and achieve
its strategy. Failure to manage working capital could impact upon
the ability of the Group to grow.
Management of growth
The ability of the Group to implement its strategy in an
expanding market requires effective planning and management control
systems. The Directors anticipate that further expansion will be
required to respond to market opportunities and the potential
growth in its client base. The Group's growth plans may place a
significant strain on its management, operational, financial and
personnel resources. The Group's future growth and prospects will,
therefore, depend on its ability to manage the growth and to
continue to expand and improve operational, financial and
management information and quality control systems on a timely
basis, whilst at the same time maintaining effective cost controls.
Any failure to expand and improve operational, financial and
management information and quality control systems in line with the
Group's growth could have a material adverse effect on its
business, financial condition and results of operations.
Market developments
Any failure to expand the Group's service offering in response
to customer demand and/or industry developments may have an adverse
effect on the Group's financial performance and prospects.
Reliance on Partners
Much of the Group's business is dependent on partners (acquiring
banks, charities, clubs, etc.). Changes in key relationships within
those partners, change of strategic direction by partner
organisations, changes in the viability of partner-owned
technology, economic and other business circumstances could all
have an adverse effect on the financial performance of the
Group.
Legal and regulatory matters
The Group is subject to a considerable degree of regulation and
legislation. Changes in or extensions of laws and regulations
affecting the industry in which the Group operates (or those in
which its customers operate) and the rules of industry
organisations could restrict or complicate the Group's business
activities, with the potential to increase compliance/legal costs
significantly.
A J A Flitcroft
Director
26 May 2016
Director's Report
The Directors present their Report and Financial Statements for
the 18 month period ended 31 January 2016.
Principal activities
The principal activity of the Company is that of a holding
company.
The principal activities of the Group in the period was that of
lottery administrators and the provision of payment processing
products and services. The floodlit football astroturf pitches have
been divested on favourable terms and the Group maintains a
minority shareholding in that company. The acquisition of EMEXPAY
and Freepaymaster Limited has broadened the services in the payment
processing business, which is now the Group's largest division and
the driver of growth.
Legal matters
As required by section 656 of the Companies Act 2006, the
Directors are required to point out that the net assets of the
Company are less than 50% of the aggregate of share capital and the
share premium account. The Board will discuss at the AGM the ways
it will seek to rectify this position.
Financial risk management
The Group's financial risk management policies are disclosed in
the accounting policies and note 23 within the financial
statements.
Dividends
The Directors do not recommend a dividend for the eighteen
months ended 31 January 2016 (2014: GBPNil).
Directors
The following Directors held office during the eighteen months
ended 31 January 2016:
Lord E T Razzall
A J A Flitcroft
P I Jackson (resigned 20 May 2016)
On 20 May 2016 C M Hyman and A Rudolf were appointed to the
Board of Directors.
Directors' interests in shares and warrants
The Directors who held office during the eighteen months ended
31 January 2016 and those holding office as at the date of these
accounts had the following interests in the shares of the Company,
including family interests:
Ordinary shares of 0.1p each
At 31 July 2014
(or date of
At 31 January 2016 appointment, if later)
Lord E T Razzall 62,965,986 80,965,986
A J A Flitcroft 25,674,408 25,674,408
P I Jackson (resigned 20 May 2016) - -
C M Hyman (appointed 20 May 2016) - -
A Rudolf (appointed 20 May 2016) - -
The following share options have been issued to the Directors of
the Company, none were exercised in the year to 31 July 2015 and
all were still held at the end of the eighteen months to 31 January
2016:
Number Exercise Exercise period
price
Lord E T Razzall 3,200,000 0.75p - 8 June 2010
1.25p - 2 June 2017
Further details of these options are given in note 27 to the
Financial Statements.
Directors' remuneration
In accordance with AIM Rule 19, the remuneration of the
Directors, who served during the eighteen months is detailed
below:
Salary, Bonus Pension Total
fees & contributions
benefits
in kind
GBP'000 GBP'000 GBP'000 GBP'000
Lord E T Razzall 36 - - 36
A J A Flitcroft 48 - - 48
P I Jackson 45 - - 45
Substantial shareholdings
As at 31 January 2016 the Company has been notified of the
following substantial holdings (3% or more) of ordinary 0.1p
shares:
Percentage No. of
holding shares
Management Express Ltd** 16.26% 236,656,580
SmartePay Limited 6.14% 89,405,798
Lord E T Razzall 4.33% 62,965,986
J Malone 3.31% 48,236,391
Robert Gerald Wall 3.08% 44,870,216
Since the period end and to the date of approval of this report,
there have been no movements in the substantial holdings.
** Management Express Ltd is beneficially owned by James Rose, a
director of Prize Provision Services Limited, a wholly owned
subsidiary of the Company.
No other person has notified an interest in the ordinary shares
of the Company as required to be disclosed to the Company.
Capital structure
Details of the issued share capital are shown in note 25. There
are no special restrictions on the size of a holding nor on the
transfer of shares, which are both governed by the general
provisions of the Articles of Association and prevailing
legislation. The Directors are not aware of any agreements between
holders of the Company's shares that may result in restriction on
the transfer of securities or on voting rights. No one has any
special rights of control over the Company's share capital and all
issued shares are fully paid.
Under its Articles of Association, the Company has authority to
issue the amount of shares shown in note 25.
Donations
Charitable and political donations made by the Group during the
period amounted to GBPNil (2014: GBPNil).
Creditor payment policy and practice
It is the Group's policy to establish terms of payments with
suppliers when agreeing each transaction or series of transactions,
to ensure that suppliers are aware of these terms of payment and to
abide by them. At 31 January 2016, the Group had an average of 111
days (2014: 91 days) of purchases outstanding in trade
creditors.
Going concern
UK Company Law requires Directors to consider whether it is
appropriate to prepare the financial statements on the basis that
the Company and the Group are going concerns. Throughout the
financial statements there are various disclosures relating to
Group funding and operational risks. The Directors' report
summarises the key themes.
The Group does have some exposure to current economic conditions
which have the potential to impact annual revenues. The Directors
are confident that the Group has sufficient resources and support
to ensure that the profit and cash generation derived from future
trading are sufficient to meet the Group's future requirements. As
a result of these reviews, the Directors are of the opinion that
the Group has adequate resources to continue in operation for the
foreseeable future. For this reason, they consider it appropriate
to adopt the going concern basis in preparing the financial
statements.
Environment policies
The Group is always seeking ways to improve its consumption of
resources and ways to protect the environment.
Employee policies
The Group places considerable value on the involvement of the
employees and keeps them informed on matters affecting them as
employees and on relevant matters affecting the performance of the
Group.
The Group's employment policies include a commitment to equal
opportunities regardless of sex, age, race, sexual orientation or
ethnic origin.
The Group's policy is to give full and fair consideration to
applications for employment made by disabled persons, bearing in
mind the respective aptitudes of the applicants concerned. In the
event of staff becoming disabled every effort would be made to
ensure their continued employment within the Group and to provide
specialised training where appropriate.
Information to shareholders
The Group has its own website (www.boxhillplc.com) for the
purposes of improving information flow to shareholders as well as
potential investors.
Corporate governance
The Group intends to continue with measures previously put in
place to ensure that it complies with the Corporate Governance Code
in so far as is practicable and appropriate for a public company of
its size and nature.
The Group has put into place an Audit Committee and a
Remuneration Committee under the control of A J A Flitcroft,
Finance Director during the period of this report. It has primary
responsibility for monitoring the quality of internal control and
ensuring the financial performance of the Group is properly
measured and reported on and for reviewing reports from the Group's
auditors relating to its accounting and internal controls. In all
cases due regard is given to the interests of the shareholders. It
also determines the terms and conditions of service of the
executive Directors, including their remuneration and grant of
options. Subsequent to the appointment of Mr Hyman and Mr Rudolf,
the members of the board committees was changed. The Audit
Committee now consists of Mr Hyman (Chair) and Mr Rudolf. The
Remuneration Committee consists of Mr Rudolf (Chair) and Lord
Razzall. The Company has also constituted a new AIM Committee,
consisting of Lord Razzall (Chair) and Mr Hyman.
The Directors intend to comply with Rule 21 of the AIM Rules for
Companies relating to Directors' dealings as applicable to AIM
companies and will also take all reasonable steps to ensure
compliance by the Group's applicable employees. In line with the
AIM rules for Companies, the Group has adopted an AIM rules
compliance policy setting out the procedures to be followed in
order that the Company will fully comply with the AIM Rules for
Companies.
Relations with shareholders
The Chairman is the Group's principal spokesperson with
investors, fund managers, the press and other interested parties.
At the Annual General Meeting, private investors are given the
opportunity to question the Board.
Internal control
The Board acknowledges its responsibility for establishing and
monitoring the Group's systems of internal control. Although no
system of internal control can provide absolute assurance against
material misstatement or loss, the Group's systems are designed to
provide the Directors with reasonable assurance that problems are
identified on a timely basis and so can be dealt with
appropriately.
Statement of Directors' responsibilities
The Directors are responsible for preparing the Annual Report
and the Group and Parent Company financial statements in accordance
with applicable law and regulations. Company law requires the
Directors to prepare Group and Parent Company financial statements
for each financial year. As required by the AIM Rules of the London
Stock Exchange the Directors are required to prepare the Group
Financial Statements in accordance with IFRSs as adopted by the EU
and applicable laws and have elected to prepare the Parent Company
financial statements in accordance with UK Accounting Standards and
Applicable Law (UK Generally Accepted Accounting Practice).
The Group financial statements are required by law and IFRSs as
adopted by the EU to present fairly the financial position and the
performance of the Group; the Companies Act 2006 provides in
relation to such financial statements that references in the
relevant part of that Act to financial statements giving a true and
fair view are references to their achieving a fair
presentation.
The Parent Company financial statements are required by law to
give a true and fair view of the state of affairs of the Parent
Company. In preparing each of the Group and Parent Company
financial statements, the Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and estimates that are reasonable and prudent;
-- for the Group financial statements, state whether they have
been prepared in accordance with IFRSs as adopted by the EU;
-- for the Parent Company financial statements, state whether
applicable UK Accounting Standards have been followed, subject to
any material departures disclosed and explained in the financial
statements; and
-- prepare the financial statements on a going concern basis,
unless it is inappropriate to presume that the Group and Parent
Company will continue in business.
The Directors are responsible for keeping proper accounting
records, for safeguarding the assets of the Group and for taking
reasonable steps for the prevention and detection of fraud and
other irregularities. The Directors are responsible for ensuring
that the Directors Report and other information contained in the
Annual Report is prepared in accordance with company law in the
United Kingdom.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included in the
Company's website. Legislation in the UK governing the preparation
and dissemination of the financial statements may differ from
legislation in other jurisdictions.
Disclosure of information to auditors
The Directors who held office at the date of approval of this
Directors' Report each confirm the following:
-- so far as they are aware, there is no relevant audit
information of which the Group's auditors are unaware, and
-- they have taken all the steps that they ought to have taken
as Directors in order to make themselves aware of any relevant
audit information and to establish that the Group's auditors are
aware of that information.
A J A Flitcroft
Director
26 May 2016
Independent Auditors' Report
We have audited the financial statements of Boxhill Technologies
PLC for the period ended 31 January 2016 which comprise the
Consolidated Income Statement, the Consolidated Statement of
Financial Position and Parent Company Balance Sheet, the
Consolidated Statement of Changes in Equity, the Consolidated
Statement of Cash Flows and the related notes. The financial
reporting framework that has been applied in the preparation of the
consolidated financial statements is Applicable Law and
International Financial Reporting Standards (IFRSs) as adopted by
the European Union. The financial reporting framework that has been
applied in the preparation of the Parent Company Financial
Statements is applicable law and United Kingdom Accounting
Standards (United Kingdom Generally Accepted Accounting
Practice).
This report is made solely to the Company's members, as a body,
in accordance with chapter 3 part 16 of the Companies Act 2006. Our
audit work has been undertaken so that we might state to the
Company's members those matters we are required to state to them in
an Auditors' Report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the Group and the Company and the Company's
members as a body, for our audit work, for this report, or for the
opinions we have formed.
Respective responsibilities of directors and auditors
As explained more fully in the Directors' Responsibilities
Statement (set out on pages 12 and 13), the directors are
responsible for the preparation of the financial statements and for
being satisfied that they give a true and fair view. Our
responsibility is to audit and express an opinion on the financial
statements in accordance with Applicable Law and International
Standards on Auditing (UK and Ireland). Those standards require us
to comply with the Auditing Practices Board's (APB's) Ethical
Standard for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and
disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from
material misstatement, whether caused by fraud or error. This
includes an assessment of: whether the accounting policies are
appropriate to the Group's and the Parent Company's circumstances
and have been consistently applied and adequately disclosed; the
reasonableness of significant accounting estimates made by the
directors; and the overall presentation of the financial
statements. In addition we read all the financial and non-financial
information in the Chairman's Statement, Strategic Report and
Directors' Report to identify any information that is apparently
materially incorrect based on, or materially inconsistent with, the
knowledge acquired by us in the course of performing the audit. If
we become aware of any apparent material misstatements or
inconsistencies we consider the implications for our report.
Opinion on the financial statements
In our opinion:
-- the financial statements give a true and fair view of the
state of the Group's and of the Parent Company's affairs as at 31
January 2016 and of the Group's loss for the period then ended;
-- the Group financial statements have been properly prepared in
accordance with IFRSs as adopted by the European Union;
-- the Parent Company financial statements have been properly
prepared in accordance with United Kingdom Generally Accepted
Accounting Practice; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
Opinion on other matters prescribed by the Companies Act
2006
In our opinion the information given in the Strategic Report and
Directors' Report for the financial period for which the financial
statements are prepared is consistent with the financial
statements
Matters on which we are required to report by exception
We have nothing to report in respect of the following:
Under the Companies Act 2006 we are required to report to you
if, in our opinion:
-- adequate accounting records have not been kept by the Parent
Company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the Parent Company financial statements are not in agreement
with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Paul Dawson (Senior Statutory Auditor)
For and on behalf of Hart Shaw LLP (Statutory Auditor)
Chartered Accountants and Business Advisers
Europa Link
Sheffield Business Park
Sheffield
South Yorkshire
S9 1XU
26 May 2016
BOXHILL TECHNOLOGIES PLC
CONSOLIDATED INCOME STATEMENT
For the 18 months ended 31 January 2016
Note 2016 2014
GBP'000 GBP'000
Continuing Operations
Revenue 3,286 1,410
Cost of sales 6 (863) (473)
----------------------------------- -----------------------------------
Gross profit 2,423 937
Administrative
expenses 6 (1,453) (1,047)
----------------------------------- -----------------------------------
Operating profit/(loss)
before exceptional
items 970 (110)
Loss on disposal (342)
of Leasehold Land -
& Buildings (430) -
Loss on sale of
subsidiary
----------------------------------- -----------------------------------
Profit/(Loss)
before interest 198 (110)
Finance income 10 6 -
Finance costs 10 - (77)
----------------------------------- -----------------------------------
Profit/(Loss)
before taxation 204 (187)
Tax expense 11 (205) -
----------------------------------- -----------------------------------
Profit/(Loss)
for the period
from continuing
operations (1) (187)
=================================== ===================================
Discontinued operations
(Loss) for the
period from discontinued
operations 8 - (496)
(Loss) for the
period (1) (683)
=================================== ===================================
Other comprehensive
income
Revaluation of
equity investment 16 342 -
Total comprehensive
income 341 (683)
=================================== ===================================
Profit/(Loss)
per share
Basic profit/(loss)
per ordinary share 12 (0.00) (0.06)
Diluted profit/(loss)
per ordinary share 12 (0.00) (0.06)
======== =================================== ===================================
All of the profit/(loss) for the period is attributable to
equity holders of the Parent Company.
The Notes form part of these financial statements.
BOXHILL TECHNOLOGIES PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 January 2016
Registered Number: 04458947 (England and Wales)
Note 2016 2014
GBP'000 GBP'000
ASSETS
Non-current assets
Property, plant
and equipment 15 55 383
Goodwill 13 1,673 618
Other intangible
assets 14 31 28
Investment in equity
instruments 16 342 -
--------- ---------
Total non-current
assets 2,101 1,029
--------- ---------
Current assets
Inventories 18 2 2
Trade and other
receivables 19 919 1,651
Cash and cash equivalents 19 291 258
--------- ---------
Total current assets 1,212 1,911
--------- ---------
Total assets 3,313 2,940
--------- ---------
LIABILITIES
Current liabilities
Trade and other
payables 22 748 1,959
Bank and other
borrowings 20 6 489
Convertible loan
stock 28 1,600 -
Total current liabilities 2,354 2,448
--------- ---------
Non-current liabilities
Trade and other
payables
Bank and other 20 - -
borrowings
Deferred tax provision 24 - -
--------- ---------
Total non-current - -
liabilities
--------- ---------
Total liabilities 2,354 2,448
--------- ---------
Net assets 959 492
========= =========
EQUITY
Share capital 25 1,456 1,427
Share premium account 26 1,820 1,723
Revaluation reserve 26 342 -
Retained earnings 26 (2,659) (2,658)
Equity attributable
to equity holders
of the Parent 959 492
========= =========
The financial statements were approved by the Board of Directors
and authorised for issue on 26 May 2016. They were signed on its
behalf by:
A J A Flitcroft
Director
The Notes part of these financial statements.
BOXHILL TECHNOLOGIES PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the 18 months ended 31 January 2016
Called Share premium Revaluation Retained
up share account Reserve Earnings Total Equity
capital
GBP'000 GBP'000 GBP'000 GBP'000
GBP'000
Balance
31 July
2013 795 1,463 - (1,975) 283
Shares
issued
in period
less costs 632 260 - - 892
(Loss)
for the
period - - - (683) (683)
---------- -------------- ------------ ----------- ---------------
Balance
31 July
2014 1,427 1,723 - (2,658) 492
Issued
in period
less costs 29 15 44
Revaluation
of investment
in equity
instrument 342 342
Profit
on treasury
shares 82 82
(Loss)
for the
period (1) (1)
---------- -------------- ------------ ----------- ---------------
Balance
31 January
2016 1,456 1,820 342 (2,659) 959
The Notes form part of these financial statements.
BOXHILL TECHNOLOGIES PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
For the 18 months ended 31 January 2016
18 months ended Year ended 31
31 Jan 2016 July
GBP'000 2014
GBP'000
Note
Cash Flow from operating
activities
Profit/(Loss) for
the period/year (1) (683)
Adjustment for:
Finance costs recognised
in profit or loss - 77
Finance income recognised
in profit or loss (6)
Depreciation and amortisation
of non-current assets 36 29
Loss from discontinued
activities 8 - 496
Loss on disposal of
subsidiary 29 430 -
Loss on disposal of
Leasehold Land & Buildings 16 342 -
Expense recognised
in respect of shares
issued in exchange
for consulting services - 89
-------- -------- -------- --------
802 691
-------- -------- --------
Operating Cash Flow 801 8
Movement in working
capital:
Decrease / (Increase)
in receivables (972) (1,327)
(Decrease) / Increase
in payables 515 1,165
(457) (162)
-------- -------- --------
Cash generated by/(used)
in operations 344 (154)
Interest received/(paid) 6 (77)
Tax paid (205) -
-------- -------- -------- --------
Net cash generated
by/(used in) continuing
operating activities 145 (231)
Net cash generated
from/(used by) discontinued
operating activities - (102)
-------- -------- --------
Net cash generated
by/(used in) operating
activities 145 (333)
-------- -------- --------
Cash flows from investing
activities:
Payment for intangible
assets (10) (6)
Net cash inflow on
acquisition of subsidiary 80 13
Purchases of property,
plant and equipment - (34)
-------- -------- -------- --------
Net cash (used in)
continuing investing
activities 70 (27)
Cash flows from financing
activities
Proceeds from issue
of equity instruments
of the Company 44 174
Proceeds from sale
of treasury shares 26 257 -
Proceeds from borrowings - 394
Repayment of borrowings (483) (206)
-------- -------- -------- --------
Net cash generated
from continuing financing
activities (182) 362
-------- -------- --------
Net increase in cash
and cash equivalents 33 2
Cash and cash equivalents
at 1 August 2014 258 256
-------------- ------
Cash and cash equivalents
at 31 January 2016 291 258
============== ======
Comprising of:
Cash and cash equivalents
per the balance sheet 291 258
Cash and cash equivalents
for cash flow statement
purposes 291 258
As described in the accounting policies, bank overdrafts and
borrowings repayable on demand fluctuate from being positive to
overdrawn and are considered an integral part of the Group's cash
management for cash flow statement purposes.
There is no material difference between the fair value and the
book value of cash and cash equivalents.
The Notes form part of these financial statements.
BOXHILL TECHNOLOGIES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the 18 months ended 31 January 2016
1. General Information
Boxhill Technologies PLC is a company incorporated in the United
Kingdom under the Companies Act 2006. The address of the registered
office is 39 St James's Street, London, SW1X 1JD. The nature of the
Group's operations and its principal activities are described in
the Directors' Report.
These financial statements are presented in Pounds Sterling
because that is the currency of the primary economic environment in
which the Group operates.
2. Adoption of new and revised International Financial Reporting Standards
In the current period, the Group has adopted all of the new and
revised Standards and Interpretations issued by the International
Accounting Standards Board (the IASB) and the International
Financial Reporting Interpretations Committee (IFRIC) of the IASB
that are relevant to its operations and effective for accounting
periods beginning on or after 1 August 2014.
At the date of authorisation of these financial statements, the
following Standards and Interpretations which have not been applied
in these financial statements were in issue but not yet
effective:
IFRS Amendment Improvement review
5
------ ---------- -----------------------------------------
IFRS Amendment Improvement review
7
------ ---------- -----------------------------------------
IFRS Financial Instruments
9
------ ---------- -----------------------------------------
IFRS Amendment Consolidation exception and
10 sale or contribution of assets
between investor and joint venture
------ ---------- -----------------------------------------
IFRS Amendment Accounting for acquisitions
11 of interests in joint ventures
------ ---------- -----------------------------------------
IFRS Amendment Investment entities and consolidation
12 exceptions
------ ---------- -----------------------------------------
IFRS Regulatory deferral accounts
14
------ ---------- -----------------------------------------
IFRS Revenue from contracts with
15 customers
------ ---------- -----------------------------------------
IAS Amendment Resulting from the disclosure
1 initiative
------ ---------- -----------------------------------------
IAS16 Amendment Acceptable methods of depreciation
and and amortisation and proportionate
IAS restatement of accumulated depreciation
38 on revaluation.
------ ---------- -----------------------------------------
IAS Amendment Employee benefit contributions
19 and improvement review
------ ---------- -----------------------------------------
IAS Amendment Investment entities and equity
27 method
------ ---------- -----------------------------------------
IAS Amendment Consolidation exception and
28 sale or contribution of assets
between investor and joint venture
------ ---------- -----------------------------------------
IAS Amendment Improvement review
34
------ ---------- -----------------------------------------
IAS Amendment Novation of derivatives and
39 continuation of hedge accounting
------ ---------- -----------------------------------------
IAS Amendment Agriculture - bearer plants
41
------ ---------- -----------------------------------------
These Standards and Interpretations are not expected to have any
significant impact on the Group's financial statements in their
periods of initial application.
3. Significant accounting policies
Basis of accounting
The financial statements, upon which this financial information
is based, have been prepared using accounting policies consistent
with International Financial Reporting Standards (IFRSs).
The financial information has been prepared on a going concern
basis, as at 31 January 2016, in accordance with International
Financial Reporting Standards ("IFRSs") as issued by the
International Accounting Standards Board ("IASB") as well as all
interpretations issued by the International Financial Reporting
Interpretations Committee ("IFRIC"). The Group has not availed
itself of early adoption options in such standards and
interpretations.
The financial statements, upon which this financial information
is based, have been prepared under the historical cost basis except
where specifically noted. The principal accounting policies adopted
are set out below:
Going concern
The financial statements have been prepared on a going concern
basis.
The Directors' cash flow forecasts indicate that the Group will
be able to operate within its existing bank facilities in the
future. As with any business, there are uncertainties in the
forecast, but as at the date of approval of these financial
statements the Directors are unaware of any indications that would
suggest inappropriate assumptions have been made in relation to
trading volumes. As a result of these, the Directors are of the
opinion that the Company and the Group have adequate resources to
continue in operational existence for the foreseeable future and
have continued to adopt the going concern basis in preparing the
financial statements. The financial statements do not include any
adjustments which would result from this basis of preparation being
inappropriate.
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the Company
(its subsidiaries) made up to 31 January 2016 and 31 July 2014.
Control is achieved where the Company has the power to govern the
financial and operating policies so as to obtain benefits from its
activities.
The results of subsidiaries acquired or disposed of during the
period are included in the Consolidated Income Statement from the
effective date of acquisition or up to the effective date of
disposal, as appropriate.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring the accounting policies used in
line with those used by the Group.
All intra-group transactions, balances, income and expenses are
eliminated on consolidation.
Business combinations
The purchase method of accounting is used for all acquired
businesses as defined by IFRS 3 - Business Combinations.
As a result of the application of the purchase method of
accounting, goodwill is initially recognised as an asset being the
excess at the date of acquisition of the fair value of the purchase
consideration plus directly attributable costs of acquisition over
the net fair values of the identifiable assets, liabilities and
contingent liabilities of the subsidiaries acquired. Where fair
values are estimated on a provisional basis they are finalised
within 12 months of acquisition with consequent changes to the
amount of goodwill.
Intangible assets
Identifiable intangible assets acquired as part of a business
combination are initially recognised separately from goodwill if
the assets fair value can be measured reliably, irrespective of
whether the asset had been recognised by the acquirer before the
business combination was affected. An intangible asset is
considered identifiable only if it is separable or arises from
contractual or other legal rights, regardless of whether those
rights are transferable or separable from the entity or from other
rights and obligations.
Intangible assets relate to the development of the lottery and
on-line gaming (software and related costs). It is considered that
the software has a finite useful life and amortisation has been
calculated so as to write off the carrying value of it over its
useful economic life of 5 years.
Goodwill
Goodwill arising on consolidation represents the excess cost of
acquisition over the Group's interest in the fair value of the
identifiable assets and liabilities of a subsidiary at the date of
acquisition. Goodwill is initially recognised as an asset and
reviewed for impairment at least annually. Any impairment is
recognised immediately in the income statement and is not
subsequently reversed.
For the purpose of impairment testing, goodwill is allocated to
each of the Group's cash generating units expected to benefit from
the synergies of the combination. Cash-generating units to which
goodwill has been allocated are tested for impairment annually, or
more frequently when there is an indication of impairment. The
amount of the impairment loss is allocated first to reduce the
carrying amount of any goodwill allocated to the unit and then to
the other assets of the unit pro-rata on the basis of the carrying
amount of each asset in the unit. An impairment loss recognised for
goodwill is not reversed in a subsequent period.
On disposal of a subsidiary the attributable amount of goodwill
is included in the determination of the profit or loss on
disposal.
Negative goodwill arising on consolidation is credited to the
income statement where the Directors consider that the fair value
of the assets is reliable and do not need adjustment and that the
negative goodwill relates to a true bargain purchase.
Investments
Equity investments are measured at fair value, gains and losses
are recognised in other comprehensive income (fair value through
other comprehensive income, FVTOCI). Any dividend income will be
recognised in profit and loss.
Revenue recognition
Lottery turnover represents takings received for entry into the
lottery prize draws. Revenue is recognised upon receipt of the
money for the period that the draw takes place. Football pitch
turnover represents cash takings received. Payment processing
turnover is recognised when transactions are processed.
Taxation
The tax expense represents the sum of the tax currently payable
and deferred tax.
The tax currently payable is based on taxable profits for the
period. Taxable profit differs from net profit as reported in the
income statement because it excludes items of income or expense
that are taxable or deductible in other years and it further
excludes items that are never taxable or deductible. The Group's
liability for current tax is calculated using tax rates that have
been enacted or substantively enacted by the balance sheet
date.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements and corresponding tax bases used in the
computation of taxable profit, and is accounted for using the
balance sheet liability method. Deferred tax liabilities are
generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which
deductible temporary differences can be utilised. Such assets and
liabilities are not recognised if the temporary difference arises
from goodwill or from the initial recognition (other than in a
business combination) of other assets and liabilities in a
transaction that affects neither the tax profit nor the accounting
profit.
The carrying amount of deferred tax assets is reviewed at each
balance sheet date and reduced to the extent that is no longer
probable that sufficient taxable profits will be available to allow
all, or part, of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset is
realised. Deferred tax is charged or credited in the income
statement, except when it relates to items charged or credited
directly to equity, in which case the deferred tax is also dealt
with in equity.
Property, plant and equipment
Property, plant and equipment are stated at cost less
accumulated depreciation and any recognised impairment loss. Useful
lives are reviewed annually by the Directors.
Depreciation is charged so as to write off the cost or valuation
of assets over their estimated useful lives using the straight-line
method, on the following bases:
Property - 5% per annum
Fixtures, fittings and equipment - 25% per annum
The gain or loss arising on the disposal or retirement of an
asset is determined as the difference between the sales proceeds
and the carrying amount of the asset and is recognised in income.
Where there is evidence of impairment, fixed assets are written
down to their recoverable amount.
Leased assets
Rentals payable under non-onerous operating leases are expensed
in the income statement on a straight-line basis over the lease
term.
Impairment of tangible and intangible assets excluding
goodwill
At each balance sheet date, the Group reviews the carrying
amounts of its tangible and intangible assets to determine whether
there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent
of the impairment loss (if any). Where the asset does not generate
cash flows that are independent from other assets, the Group
estimates the recoverable amount of the cash-generating unit to
which the asset belongs. An intangible asset with an indefinite
useful life is tested for impairment annually and whenever there is
an indication that the asset may be impaired.
Recoverable amount is the higher of fair values less costs to
sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset for
which the estimate of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised as an expense
immediately, unless the relevant asset is carried at a revalued
amount, in which case the impairment loss is treated as a
revaluation decrease.
Where an impairment loss subsequently reverses, the carrying
amount of the asset (cash-generating unit) is increased to the
revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised
for the asset (cash-generating unit) in prior years. A reversal of
an impairment loss is recognised as income immediately, unless the
relevant asset is carried at a revalued amount, in which case the
reversal of the impairment loss is treated as a revaluation
increase.
Foreign currencies
The individual financial statements of each Group company are
presented in the currency of the primary economic environment in
which it operates (its functional currency). For the purpose of the
consolidated financial statements, the results and financial
position of each Group company are expressed in Pounds Sterling,
which is the functional currency of the Group, and the presentation
currency for the consolidated financial statements.
In preparing the financial statements of the individual
companies, transactions in currencies other than the entity's
function currency (foreign currencies) are recorded at the rates of
exchange prevailing on the dates of the transactions. At each
balance sheet date, monetary assets and liabilities that are
denominated in foreign currencies are retranslated at the rates
prevailing on the balance sheet date. Non-monetary items carried at
fair value that are denominated in foreign currencies are
translated at the rates prevailing at the date when the fair value
was determined. Non-monetary items that are measured in terms of
historical costs in a foreign currency are not retranslated.
Exchange differences are recognised in profit or loss in the
period in which they arise.
Share based payments
Other than for business combinations, the only share based
payments of the Group are equity settled share options and certain
liability settlements. The Group has applied the requirements of
IFRS 2 - Share-based Payments.
For share options granted an option pricing model is used to
estimate the fair value of each option at grant date. That fair
value is charged on a straight line basis as an expense in the
income statement over the period that the holder becomes
unconditionally entitled to the options (vesting period), with a
corresponding increase in equity.
For shares issued in settlement of fees and/or liabilities, the
Directors estimate the fair value of the shares at issue date and
that value is charged on a straight line basis as an expense in the
income statement (for fees) or reduction in the balance sheet
liability (for liabilities) with a corresponding increase in
equity.
Inventories
Inventories are stated at the lower of cost and net recognised
value. Cost comprises direct materials using the first in first out
(FIFO) basis. Net recognised value represents the estimated selling
price less estimated costs of completion, marketing and
selling.
Cash and cash equivalents
Cash and cash equivalents comprise of cash on hand and demand
deposits and are subject to an insignificant risk of changes in
value.
Trade receivables
Trade receivables are measured at initial recognition at fair
value, and are subsequently measured at amortised cost using the
effective interest rate method. Appropriate allowances for
estimated irrecoverable amounts are recognised in profit and loss
when there is objective evidence that the asset is impaired. The
allowance recognised is measured as the difference between the
asset's carrying amount and the present value of estimated future
cash flows discounted at the effective interest rate compound at
initial recognition.
Trade receivables do not carry any interest and are stated at
their nominal value as reduced by appropriate allowances for
estimated irrecoverable amounts.
Financial liability and equity
Financial liabilities and equity instruments are classified
according to the substance of the contractual agreements entered
into. An equity instrument is any contract that evidences a
residual interest in the assets of the Group after deducting all of
its liabilities. Equity instruments are recognised at the amount of
proceeds received net of costs directly attributable to the
transaction. To the extent that those proceeds exceed the par value
of the shares issued they are credited to a share premium
account.
Bank borrowings
Interest-bearing bank loans and overdrafts are recorded at the
proceeds received, net of direct issue costs. Finance charges,
including premiums payable on settlement or redemption and direct
issue costs, are accounted for on an accrual basis in profit or
loss using effective interest rate method and are added to the
carrying amount of the instrument to the extent that they are not
settled in the period in which they arise.
Trade payables
Trade payables are not interest-bearing and are stated at their
nominal value.
Provisions
Provisions are recognised when the Group has a present
obligation as a result of a past event, and it is probable that the
Group will be required to settle that obligation. Provisions are
measured at the Directors' best estimate of the expenditure
required to settle the obligation at the balance sheet date, and
are discounted to present value where the effect is material.
4. Critical accounting judgements and key sources of estimation uncertainty
In application of the Group's accounting policies above, the
Directors are required to make judgements, estimates and
assumptions about the carrying amount of assets and liabilities.
These estimates and assumptions are based on historical experience
and other factors considered relevant. Actual results may differ
from estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period which the estimate is revised if the revision affects
only that period or in the period of the revision and future
payments if the revision affects both current and future
periods.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources
of estimation uncertainty at the balance sheet date, that have a
significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year,
are discussed below.
Impairment of goodwill
Determining whether goodwill is impaired requires an estimation
of the value in use of cash generating units to which goodwill has
been allocated. The value in use calculation requires the entity to
estimate the future cash flows expected to arise from the
cash-generating unit and a suitable discount rate in order to
calculate present value.
Share-based payments
Share-based payments are measured at grant date fair value. For
share options granted to employees, in many cases market prices are
not available and therefore the fair value of the options granted
shall be estimated by applying an option pricing model. Such models
need input data such as expected volatility of share price,
expected dividends or the risk-free interest rate for the life of
the option. The overall objective is to approximate the
expectations that would be reflected in a current market price or
negotiated exchange price for the option. Such assumptions are
subject to judgements and may turn out to be significantly
different to expected.
5. Segment analysis
The primary reporting format is by business segment, based on
the different services offered by the operating companies within
the Group. The Directors consider that the Group has three business
segments, namely that of lottery administration, IT payment
facilities and Astroturf football pitches. The Group operates
solely in one geographical area, the United Kingdom.
The analysis of continuing operations per segment for the 18
months ended 31 January 2016 is as follows:
Lottery Payment Football Unallocated Group
Admin Processing Pitches total
GBP'000 GBP'000 GBP'000 GBP'000
GBP'000
Revenue 911 2,375 - - 3,286
Amortisation (1) - - - (1)
Depreciation - (17) (18) - (35)
Operating
profit/(loss) 30 992 (360) (464) 198
Finance
income/(costs) - - - 6 6
Profit/(Loss)
before tax 30 992 (360) (458) 204
Tax charge - (205) - - (205)
Profit/(Loss)
for the
period 30 787 (360) (458) (1)
========= ============ ========= ============ =========
5. Segment analysis (continued)
Lottery Payment Football Unallocated Group
Admin Processing Pitches total
GBP'000 GBP'000 GBP'000 GBP'000
GBP'000
Balance
Sheet
Total
assets 259 134 342 2,578 3,313
========= ============ ========= ============ =========
Non-current
asset
additions 13 55 68
========= ============ ========= ============ =========
Total
liabilities 314 111 8 1,921 2,354
========= ============ ========= ============ =========
The following table analyses assets and liabilities not
allocated to business segments as at 31
January 2016:
GBP'000
Assets
Intangible fixed assets 22
Tangible fixed assets 4
Investments 1,673
Other receivables 865
Cash and cash equivalents 14
------------------
2,578
------------------
Liabilities
Trade and other payables 315
Borrowings 6
Convertible loan notes 1,600
------------------
1,921
------------------
6. Expenses
The following material expenses are included in cost of
sales:
2016 2014
GBP'000 GBP'000
Fees and integration costs 217 64
Affiliate/agent commission 138 1
Fees to clients 349 275
Prizes payable 83 74
6. Expenses (continued)
The following material expenses are included in administrative
expenses:
2016 2014
GBP'000 GBP'000
Consultancy fees 251 262
Software development and 240 -
maintenance fees
Office rent and rates 59 (22)
Hotel and travel 18 74
Professional fees 174 182
Bank charges 15 13
7. Operating profit/(loss)
Operating profit/(loss) has been stated after
charging/(crediting) the following:
2016 2014
GBP'000 GBP'000
Depreciation of tangible
fixed assets 35 29
Amortisation of intangible 1 -
assets
Auditors' remuneration -
Audit services to the Parent
Company 14 10
Auditors' remuneration -
Audit services to the Group 21 15
Auditors' remuneration -
Taxation services 5 3
========= =========
As permitted by Section 408 of the Companies Act 2006, the
holding company's profit and loss account has not been included in
these financial statements. The profit/(loss) for the period after
taxation was GBP647,000 (2014: (GBP662,000).
8. Discontinued activities
2016 2014
GBP'000 GBP'000
Revenue - 780
Costs and expenses - (871)
---------- ---------
(Loss)/Profit on discontinued
activities - (91)
(Loss) and impairment of
intangibles on discontinued
activities - (405)
---------- ---------
(Loss) on discontinued activities - (496)
========== =========
9. Personnel costs
2016 2014
The average monthly number No. No.
of employees
(including executive and 9 12
non-executive Directors)
was
======== ========
The split of employees by
function within the Group No. No.
is as follows:
Administration and Sales 5 7
Management 4 5
-------- --------
Total 9 12
======== ========
2016 2014
Their aggregate remuneration GBP'000 GBP'000
comprised:
Wages and salaries 225 217
Social security costs 19 21
Directors remuneration 219 149
-------- --------
463 387
-------- --------
Directors' emoluments: GBP'000 GBP'000
Emoluments 183 125
Sums paid to third parties
for director services 36 24
219 149
======== ========
Number of Directors accruing No. No.
benefits
under money purchase schemes - -
======== ========
Aggregate emoluments of
highest paid Director 45 30
======== ========
Included within Directors' emoluments is GBP85,500 (2014:
GBP54,000) paid to directors via related companies, as detailed in
note 31.
10. Finance income and costs
2016 2014
GBP'000 GBP'000
Finance income 6 -
========== =========
Finance charges - 77
=========== =========
11. Income taxes
2016 2014
GBP'000 GBP'000
Current:
Current tax for the 18 205 -
months /year
--------- ---------
Total current tax charge 205 -
Deferred tax credit (Note - -
24)
--------- ---------
Total income taxes 205 -
========= =========
Tax rate reconciliation
2016 2014
GBP'000 GBP'000
Profit/(Loss) for the 18
months /year 204 (683)
========= =========
Corporation tax charge
thereon at 20.44% 42 (137)
Adjusted for the effects
of:
Disallowed net expenses/(income)
for tax purposes 245 123
Depreciation in excess 7 -
of capital allowances
Taxable losses and excess
charges carried forward (89) 14
--------- ---------
Income tax expense for 205 -
the 18 months /year
========= =========
12. Earnings per share
The calculation is based on the earnings attributable to
ordinary shareholders divided by the weighted average number of
Ordinary Shares in issue during the period as follows:
2016 2014
Numerator: earnings attributable
to equity (GBP'000) (1) (683)
Denominator: weighted average
number of equity shares
(No.) 1,452,352,425 1,103,220,540
============== ================
In June 2010 the Company issued 24 million options to subscribe
for Ordinary Shares of 0.1p each. At the period end 8.1 million
options were outstanding. None of these options were exercised in
either the prior or the current period.
On 31 January 2016 the Company issued GBP1.6m of 0% unsecured,
undated, convertible loan stock will compulsorily convert into
400,000,000 Ordinary Shares within 14 days of the Company's
Ordinary Shares returning to trading on AIM.
Both of these scenarios will lead to an increase in the weighted
average number of equity shares to 1,860,452,425 (2014:
1,111,320,540) and this amount is used in the calculation of
diluted earnings per share.
Basic and diluted earnings per share for 2014 have been restated
due to using an incorrect weighted average number of shares. The
prior periods restated basic and diluted earnings per share is
GBP0.06 compared to prior periods annual account disclosure of
GBP0.13.
13. Goodwill
GBP'000
At 31 July 2014 618
Additions (Note 29) 1,515
Disposals (Note 29) (460)
Impairment -
--------
At 31 January 2016 1,673
========
Included within goodwill is an amount relating to the
subsidiaries Prize Provision Services Limited, Freepaymaster
Limited and Emex (UK) Group Limited. The carrying amount for
goodwill for these respective subsidiaries is GBP158,000,
GBP1,005,000 and GBP510,397 respectively.
The principal assumptions made (in both 2016 and 2014) in
determining the value in use of the cash-generating unit were:
-- Basis on which recoverable amount determined - value in
use;
-- Period covered by management plans used in calculation - 1
year;
-- Pre-tax discount rate applied to cash flow projection -
5%;
-- Growth rate used to extrapolate cash flows beyond management
plan - 3%;
-- Difference between above growth rate and long term rate for
UK - 0.5%
The calculation of value in use shown above is most sensitive to
the assumptions on discount rates and growth rates. The assumptions
used are considered to be realistically achievable in light of
economic and industry measures and forecasts. The Directors believe
that any reasonable possible change in the key assumptions on which
the recoverable amount is based would not cause its carrying amount
to exceed its recoverable amount.
Whilst there can be no certainty that the forecasts used in the
impairment calculation will be achieved, the carrying value of
goodwill at 31 January 2016 reflects the Directors best estimate
based on their knowledge of the business at 26 May 2016 and
reflects all matters of which the Directors are aware as at the
date of approval of these financial statements.
14. Other intangible assets
Website and software
design and development
2016 2014
GBP'000 GBP'000
Cost
At 1 August 2014 28 258
Additions 10 6
Disposals (6) (236)
------------ ------------
At 31 January 2016 32 28
============ ============
Amortisation
At 1 August 2014 - 224
Charge for the 18 months 1 -
/year
Disposals - (224)
============ ============
At 31 January 2016 1 -
============ ============
Net Book Value
At 31 January 2016 31 28
============ ============
15. Property and office equipment
Land and Office Total
buildings equipment
2016
GBP'000 GBP'000 GBP'000
Cost or valuation
At 1 August 2014 503 49 552
Acquisitions through - 55 55
business combinations
Disposals (503) (34) (537)
At 31 January
2016 - 70 70
----------------- ----------------------------- ========
Depreciation
At 1 August 2014 143 26 169
Charge for the
18 months /year 18 17 35
Impairment - - -
Disposals (161) (28) (189)
At 31 January
2016 - 15 15
Net Book Value
At 31 January
2016 - 55 55
----------------- ----------------------------- --------
At 31 July 2014 360 23 383
----------------- ----------------------------- ========
16. Investment in equity instruments
2016
GBP'000
Cost
At 1 August 2014 -
Valuation 342
Disposals -
--------
At 31 January 2016 342
========
Valuation
At 31 January 2016 342
========
The investment in equity relates to a 10% investment in Nineteen
Twelve Holdings Limited. This investment has been designated to be
valued at fair value through other comprehensive income. This has
been designated at fair value through other comprehensive income as
the equity investment is not held for trading. No dividends have
been recognised during the period. Nineteen Twelve Holdings Limited
has entered into a joint venture with Soccerdome Limited, a
subsidiary of Boxhill Technologies Limited.
17. Subsidiaries
Details of the Company's subsidiaries at 31 January 2016 are as
follows:
Place of Proportion
incorporation of ownership
(or registration) interest
Name of Company and operation & voting Holding Principal
Subsidiary number power activity
held
Prize Provision
Services England Ordinary
Limited 03152966 and Wales 100% shares Lottery provider
Operates
Soccerdome England Ordinary floodlit
Limited 02948017 and Wales 100% shares pitches
Barrington England Ordinary
Lewis Limited 07190212 and Wales 100% shares Dormant
The Weather
Lottery England Ordinary
Limited 08648931 and Wales 100% shares Dormant
Isle of Ordinary
Poseve Limited 126971C Man 100% shares Dormant
Freepaymaster England Ordinary
Limited 09261233 and Wales 100% shares Payment processing
Emex (UK) SC518243 Scotland 100% Ordinary Intermediary
Group Limited Shares Holding Company
Emex Consult NI614354 Northern 100% by Ordinary Payment processing
Ltd Ireland Emex (UK) shares
Group
Limited
18. Inventories
2016 2014
GBP'000 GBP'000
Finished goods 2 2
======== ========
19. Other financial assets
Trade and other
receivables
2016 2014
GBP'000 GBP'000
Trade receivables 783 -
Other receivables 93 1,605
Prepayments and
accrued income 43 46
-------- --------
919 1,651
======== ========
The Group has provided fully for all receivables which are not
considered recoverable. In determining the recoverability of all
receivables, the Group considers any change in the credit quality
of the receivable up to the reporting date. (See note 4).
The Directors consider that the carrying amount of the
receivables approximates their fair value.
Cash and cash equivalents
2016 2014
GBP'000 GBP'000
Cash and cash equivalents 291 258
======== ========
Cash and cash equivalents comprises cash held by the Group and
short-term bank deposits with an original maturity of 6 months or
less. The carrying amount of these assets approximates their fair
value.
20. Borrowings
Borrowings at 31 January 2016 include a loan of GBP6,000 (2014:
GBP489,000). The loan is repayable on a fixed monthly repayment
basis and due for settlement within 12 months.
21. Derivatives financial instruments and hedge accounting
At 31 January 2016 and 31 July 2014 the Group had no derivatives
in place for cash flow hedging purposes.
22. Other financial liabilities
Trade and other payables
2016 2014
GBP'000 GBP'000
Trade payables 290 296
Other payables 290 1,574
Accrued liabilities and
deferred income 168 89
--------------- --------
748 1,959
=============== ========
Other payables comprise:
GBP'000 GBP'000
Social security and other
taxes (8) 1,249
Other 298 325
--------------- --------
290 1,574
=============== ========
Presented as:
* Current 748 1,959
- -
* Non-current
=============== ========
Accrued liabilities and deferred income represents miscellaneous
contractual liabilities that relate to expenses that were incurred,
but not paid for at the period end and income received during the
period, for which the Group had not supplied the goods or services
at the end of the period.
The Directors consider that the book value of trade payables,
accrued liabilities and deferred income approximates to their fair
value at the balance sheet date.
The average credit period taken for trade purchases is 111 days
(2014: 91 days).
23. Financial instruments: information on financial risks
Financial risks are discussed in the Directors' Report and
below.
Capital risk management
The Group manages its capital to ensure that the Group as a
whole will be able to continue as a going concern while maximising
the return to stakeholders through the optimisation of the debt and
equity balance. The capital structure of the Group consists of
debt, which includes the borrowings disclosed in note 20, cash and
cash equivalents and equity attributable to equity holders of the
parent, comprising issued capital, reserves and retained earnings
as disclosed in notes 25 to 26.
Gearing ratio
As at 31 July 2014 the Group gearing ratio was 46.95%. As at 31
January 2016 the gearing ratio is as follows:
GBP'000
Debt (1,606)
Cash and cash equivalents 291
------------
Net Cash and cash equivalents (1,315)
------------
Equity 959
------------
Net debt to equity ratio (137.12%)
============
Debt is defined as long and short-term borrowings.
Equity includes all capital and reserves of the Group
attributable to equity holders of the parent.
Financial risk management objectives
The main market risks to which the Group is exposed are interest
rates. There is also exposure to credit risk and liquidity risk.
The Group monitors these risks and will take appropriate action to
minimize any exposure.
Credit risk
The Group's exposure to credit risk is minimal due to turnover
being in the main recognised upon cash receipt, hence the amount of
trade receivables is negligible.
Liquidity risk
Ultimate responsibility for liquidity risk management rests with
the Board of Directors, which has built an appropriate liquidity
risk management framework for the management of the Group's short,
medium and long-term funding and liquidity management requirements.
The Group manages liquidity risk by maintaining adequate reserves,
banking facilities and reserve borrowing facilities by continuously
monitoring forecast and actual cash flows and matching the maturity
profiles of financial assets and liabilities.
Regulatory compliance risk
Regulatory compliance risk is the risk of material adverse
impact resulting from failure to comply with laws, regulations, and
codes of conduct or standards of good practice governing the sector
in which the Group operates. The Group is monitored by the
financial director who is responsible for meeting regulatory and
compliance obligations.
Interest rate risk
The Group's exposure to interest rate risk mainly concerns
financial assets and liabilities, which are subject to floating
rates in the Group. At present the Group's loans are on fixed rate
interest rates and hence it is not exposed to risk on these should
rates move.
24. Deferred taxation
A deferred tax asset has not been recognised in the period ended
31 January 2016 nor 31 July
2014 in respect of taxable losses carried forward of
approximately GBP770,000 (2014: GBP770,000) as there is
insufficient historic evidence that it will be recoverable in full
against taxable profits during the next 12 months.
There are not considered to be any material temporary
differences associated with investments in subsidiaries for which
deferred tax liabilities have not been recognised.
25. Equity share capital
2016 2014
GBP'000 GBP'000
Allotted, called up and fully
paid
1,455,829,770 (2014: 1,426,983,616)
Ordinary Shares of 0.1p each 1,456 1,427
======== ========
During the period the Company issued 28,846,154 Ordinary shares
of 0.1p at a price of 0.1625 pence per share on conversion of the
remaining GBP46,875 of the GBP250,000 loan announced on 13
September 2013.
26. Other reserves
Share premium Revaluation Profit and
reserve loss
account
GBP'000 GBP'000 GBP'000
At 1 August
2014 1,723 - (2,658)
Shares issued 15 - -
less costs
Profit on 82 - -
treasury
shares
Revaluation - 342 -
on equity
investment
Result for
the period - - (1)
-------------- ------------ -----------
At 31 January
2016 1,820 342 (2,659)
-------------- ------------ -----------
On 11 July 2014 the Company issued 120 million shares to a
supplier which was to provide software services to the Group. The
supplier was unable to deliver those services and therefore the
shares issued were sold in the market and the proceeds returned to
the Company. These proceeds were used by the Company and Group for
general working capital purposes, including to purchase for cash
similar services to those that were to be provided by the supplier.
The sale of these shares is treated as a sale of treasury shares
for accountancy purposes, but the shares concerned were not
treasury shares for the purposes of the Companies Act 2006 or the
AIM Rules for Companies.
27. Share-based payments
Certain Directors and key management were issued with share
options on 8 June 2010, exercisable immediately at a price fixed at
the date of issue. If the options remain unexercised after a period
of seven years from the date of grant the options expire.
Details of options granted to date and still outstanding at the
end of the period are as follows:
Date of 2015 Exercise Exercise period
Grant price
No.
GBP'000
8 June 8 June 2010 to 2
2010 2,700,000 0.75p June 2017
8 June 8 June 2010 to 2
2010 2,700,000 1.0p June 2017
8 June 8 June 2010 to 2
2010 2,700,000 1.25p June 2017
All of the above options were outstanding at the period end. The
options had a weighted average exercise price of 1p and a remaining
contractual life of 1.8 years. The Directors consider that the
estimated fair values of the options at grant date was GBPnil due
to the prevailing market price being lower than the exercise price.
As the fair value is currently considered to be GBPnil, no amount
has been recognised in either the income statement or in equity in
respect of these options.
28. Issue of Convertible Loan Notes
On 31 January 2016 the Company issued GBP1.6m of 0% unsecured,
undated, convertible loan stock. This loan stock will compulsorily
convert into 400,000,000 Ordinary Shares within 14 days of the
Company's Ordinary Shares returning to trading on AIM (the "Loan
Stock"). The Loan Stock is the consideration for the acquisition of
Emex (UK) Group Limited, and the associated company, Freepaymaster
Limited (collectively, "Emex"). The assets of Emex on acquisition
and calculation of goodwill are shown in Notes 29 and 30.
29. Business combinations
Acquisitions
Principal Date of Proportion Consideration
activity acquisition of voting transferred
interests GBP'000
acquired
Emex (UK) Payment 31 January
Group Limited processing 2016 100% 603
Freepaymaster Payment 31 January
Limited processing 2016 100% 1,005
Consideration transferred
Emex Freepaymaster
(UK) Ltd
Group GBP'000
Ltd
GBP'000
Convertible loan
stock 603 1,005
--------- --------------
603 1,005
========= ==============
Assets acquired and liabilities recognised at the date of
acquisition
Freepaymaster
Emex (UK) Ltd
Group Ltd GBP'000 Total
GBP'000 GBP'000
Current assets
Cash and cash equivalents 80 0 80
Trade and other receivables 0 0 0
Non-current assets
Property, plant and
machinery 55 0 55
Trade and other receivables 0 0 0
Current liabilities
Trade and other payables (42) 0 (42)
93 0 93
============ ============== ==========
Disposals
Principal Date of Proportion Consideration
activity disposed of voting received
interests GBP'000
disposed
Pay Corporation Payment 29 January 100% -
Ltd processing 2016
Assets disposed and liabilities derecognised at the date of
disposal
Pay Corporation
Ltd
GBP'000 Total
GBP'000
Goodwill 460 460
Property, plant and
machinery 13 13
Trade and other receivables 1,529 1,529
Trade and other payables (1,572) (1,572)
430 430
================== ==========
GBP'000
Consideration received -
Less: fair value of net assets
disposed (430)
------------------
Loss on sale of disposed subsidiary (430)
==================
30. Goodwill arising on acquisition
Emex (UK) Freepay
Group master
Ltd Ltd Total
GBP'000 GBP'000 GBP'000
Consideration Transferred 603 1,005 1,608
Less: fair value of identifiable
net assets acquired (93) 0 (93)
Goodwill arising on acquisition 510 1,005 1,515
============ ========== ==========
Total consideration transferred of GBP1,608,000 for the
acquisitions of Emex (UK) Group Limited and Freepaymaster Limited
includes stamp duty payable of GBP8,000.
Net cash inflow on acquisition
Period
ended
31 January
2016
GBP'000
Consideration paid in cash -
Less: cash and cash equivalent
balances acquired 80
------------
80
============
31. Transactions with related parties
The transactions set out below took place between the Group and
certain related parties.
Lord E T Razzall
Lord E T Razzall, a director, charged the Group GBP36,000 (2014:
GBP24,000) in the period, for directorship services provided, via
an entity trading as R T Associates. At the period end R T
Associates was owed GBP16,200 (2014: GBP9,600).
Andrew J A Flitcroft
Andrew Flitcroft, a director, charged the Group GBP49,500 (2014:
GBP30,000) in the period, for directorship and company secretarial
services provided, via an entity FS Business Limited. At the period
end FS Business Limited was owed GBP52,650 (2014: GBP23,100).
Mr Flitcroft is a director of SVS Securities PLC, during the
period the Group earned fees of GBP9,228 (2014: GBPnil) from SVS
Securities PLC.
Philip I Jackson
During the period Philip Jackson was a director of EuPay Group
Limited and PhilliteD UK Limited. During the period the Group
earned net fees from the provision of services to Group clients by
EuPay Group Limited and PhilliteD UK Limited of GBP1,025,497 and
GBP1,155,466 respectively (2014: GBP695,818 and GBPnil). At the
period end the Group was owed GBP225,235 and GBP727,833 from EuPay
Group Limited and PhilliteD UK Limited respectively (2014: GBPnil
and GBPnil). The services provided to the Group's clients by EuPay
Group Limited and PhilliteD Limited were at cost to the Group with
no profit or uplift being made by either of EuPay Group Limited or
PhilliteD Limited.
James Rose
James Rose is a director of Prize Provision Services Limited
("PPSL") a wholly owned subsidiary of Boxhill Technologies PLC.
During the period James Rose charged PPSL GBP90,000 for consultancy
services via an entity 1912 Management Limited (2014: GBP65,000).
At the period end 1912 Management Services Limited was owed
GBP95,458 (2014: GBP78,000).
Remuneration of key management personnel
The remuneration of the Directors, who are the key management
personnel of the Group, is as referred to above, and on page 7
within the Directors Report and in Note 9.
Issue of Equity
As referred to in Note 27, share options were granted in 2010 to
Directors and key management, all of which were outstanding at the
period end. The following options were held by the Directors and
key management at the period end:
Options No. Option details
Lord E T Razzall 3,300,000 See A below
J M Botros 4,800,000 See B below
A - 1,100,000 at 0.75p, 1,100,000 at 1p and 1,100,000 at
1.25p
B - 1,600,000 at 0.75p, 1,600,000 at 1p and 1,600,000 at
1.25p
All of the options are exercisable by 2 June 2017.
32. Operating lease commitments
At the balance sheet date, the Group had outstanding commitments
for future minimum lease payments under non-cancellable operating
leases, which fall due as follows:
2016 2014
GBP'000 GBP'000
Land and buildings:
Within one year 5 -
In the second to fifth
years inclusive - 16
After five years - -
Operating lease payments represent rentals payable by the Group
for office premises. Leases are negotiated over the term considered
most relevant to the individual subsidiary and rentals are fixed
where possible for that term.
33. Controlling Party
No single individual has sole control of the company.
34. Events after the balance sheet date
There are no events to note after the balance sheet date.
35. Going Concern
The Group made an after taxation (loss) for the period of
(GBP1,000) (2014: (GBP683,000)) and an EBITDA profit/(loss) of
GBP1,006,000 (2014: (GBP172,000)).
The management have controlled costs and continued with the
expansion of the business based on past acquisitions to produce a
profitable Group of companies in the period ended 31 January 2016.
The Group is forecasting further turnover growth, both organic and
from the recent acquisition, and improved profitability in the
forthcoming year.
Given the trading results to 31 January 2016 and expected
continuing and improving profitability for the forthcoming year,
together with the additional capital available from the supporting
shareholders, the Directors consider that the Group continues to be
a going concern and they forecast that that there is sufficient
funding in place to enable the continuance of the Group.
BOXHILL TECHNOLOGIES PLC
PARENT COMPANY BALANCE SHEET
As at 31 January 2016
Registered Number: 04458947 (England and Wales)
Note 2016 2014
GBP'000 GBP'000
Fixed assets
Intangible fixed assets III 18 18
Property, plant and equipment III - -
Investments III 2,003 817
---------- --------
2,021 835
Current assets
Debtors IV 896 206
Cash at bank and in hand 14 3
---------- --------
910 209
Creditors: Amounts falling
due within one year V (2,027) (913)
---------- --------
Net current (liabilities) (1,117) (704)
---------- --------
Total assets less current
liabilities 904 131
Creditors: Amounts falling V - -
due over one year
---------- --------
Net assets 904 131
========== ========
Capital and Reserves
Share capital VI 1,456 1,427
Share premium Vl 1,820 1,723
Profit and loss account VII (2,372) (3,019)
Equity shareholders' funds 904 131
========== ========
The Financial Statements were approved by the Board of Directors
and authorised for issue on 26 May 2016. They were signed on its
behalf by:
A J A Flitcroft
Director
BOXHILL TECHNOLOGIES PLC
NOTES TO PARENT COMPANY FINANCIAL STATEMENTS
For the 18 months ended 31 January 2016
I. Accounting policies
There are no material differences between the accounting
policies of the Group except as
detailed below:
Investments in subsidiaries are stated at cost less, where
appropriate, provisions for impairment.
The separate Financial Statements of the Company are presented
as required by the Companies Act 2006. As permitted by that Act,
the separate financial statements have been prepared in accordance
with United Kingdom accounting standards.
The Company's financial risk management policies are disclosed
in the consolidated financial statements.
II. Operating profit
The Auditors' remuneration for audit and other services is
disclosed in note 7 of the consolidated financial statements.
In the current period the Company had no employees other than
the Directors, who are all remunerated by the Company.
III. Fixed Assets
The Company's intangible assets consist of research and
development costs of GBP18,000 (2014: GBP18,000) as detailed in
note 14 of the consolidated financial statements. There was no
amortisation in the period due to the amount being considered
immaterial.
The Company's tangible fixed assets consist equipment with a net
book value of GBPnil when rounded to GBP'000s.
The Company's investments consist of investments in subsidiaries
of GBP2,003,000 (2014: GBP817,000).
Details of the Company's subsidiaries at 31 January 2016 can be
found in note 17 of the attached consolidated financial
statements.
Cost and net book value of 2016 2014
Shares in subsidiary undertakings
GBP'000 GBP'000
Cost as at 1 August 2014 817 745
Additions 1,608 422
Disposal (422) -
Impairment - (350)
-------- --------
Net Book Value at 31 January
2016 2,003 817
======== ========
IV. Debtors
2016 2014
GBP'000 GBP'000
Amounts due from subsidiary 3 -
undertakings
Other debtors 874 194
Prepayments and accrued income 19 12
-------- --------
896 206
======== ========
Other debtors of GBP874,000 include a net amount owing of
GBP682,000 in respect of trade debtors collectible by Boxhill
Technologies plc under a deed of assignment with and following the
disposal of Pay Corporation Limited
V. Creditors
2016 2014
GBP'000 GBP'000
Amounts falling due within
one year
Amounts due to subsidiary
undertakings 43 133
Bank and other borrowings - 480
Trade creditors 162 164
Other creditors 61 50
Accruals and deferred income 161 86
Convertible loan notes 1,600 -
-------- --------
2,027 913
======== ========
Amounts falling due over
one year
Trade Creditors - -
Bank and other borrowings
======== ========
VI. Share capital and share premium account
The movements on share capital and share premium are disclosed
in notes 25 and 26 to the consolidated financial statements.
VII. Profit and loss reserves
2016 2014
GBP'000 GBP'000
Balance at 1 August
2014 (3,019) (2,357)
Profit/(Loss) for
the period 647 (662)
---------- ----------
Balance at 31 January
2016 (2,372) (3,019)
========== ==========
VIII. Controlling party
No single individual has sole control of the Company.
IX. Related parties
The transactions set out below took place between the Parent
Company and its subsidiaries.
2016 2014
GBP,000 GBP,000
Management charge to:
Prize Provision
Services Limited 93 132
Balance included in
creditors:
Prize Provision Services
Limited 95 103
Soccerdome Limited 20 20
Pay Corporation Ltd - 10
Balance included in - -
receivables:
Pay Corporation Ltd
750 -
Dividend received
Pay Corporation Ltd
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR LLFIDERIRFIR
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May 27, 2016 02:00 ET (06:00 GMT)
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