TIDMBOX
RNS Number : 4445K
Boxhill Technologies PLC
07 July 2017
7 July 2017
BOXHILL TECHNOLOGIES PLC
("Boxhill", the "Group" or the "Company")
Full Year Results for the Year to 31 January 2017
The Company announces its audited financial results for the year
to 31 January 2017. Full details can be found below.
A copy of the Company's annual report and audited accounts for
the year to 31 January 2017 has been published on the Company's
website, http://www.boxhillplc.com/, and in accordance with the
Company's articles of association is made available to
shareholders. The Company expects to provide a trading update for
the period since the end of the financial year prior to the
Company's Annual General Meeting on 28 July 2017.
For further information, contact:
Boxhill Technologies PLC 020 7493 9644
Lord Razzall, Executive Chairman
Website www.boxhillplc.com
Allenby Capital Limited (Nomad & Broker)
John Depasquale/Nick Harriss/ Richard Short 020 3328 5656
Strategic report
The Directors present their Strategic Report on the Group for
the 12 months ended 31 January 2017.
Operating and Financial Review
The principal activities of Boxhill Technologies PLC are that of
lottery administrators and the provision of payment processing
products and services.
The Group's focus continues to be the development of the payment
technologies and services business and despite the market changes
which have slightly delayed planned growth the Group has continued
to run its core business operations profitably. Looking forward the
Group will see continued realisation of the benefits the Emex
acquisitions are bringing, particularly in credit card and
alternative (non-card) based payment services. Our range of card
and non-card services, which are global, mean that we provide the
mechanisms to manage the acceptance, payment and distribution of
money for many types of individuals and companies, including our
traditional base of gaming, FX and e-commerce companies.
It is well recognised that the growth of electronic transactions
is continuing. Boxhill's payment processing capabilities enable
merchants to accept traditional and alternative payment methods.
Our digital wallet accounts for businesses and individuals will
soon have unique virtual IBANs making them instantly more flexible
and easier to use. We already offer instant peer to peer
transactions, access to foreign and crypto currency exchanges,
worldwide wire payments and other transaction methods allowing
businesses and individuals to securely pay before, during or after
using a service or purchasing a product.
Financial Summary
For the full year to 31 January 2017 the Group achieved a profit
after tax of GBP2,000 compared to a loss after tax of GBP1,000 for
the 18 months to 31 January 2016.
In summary, for the year to 31 January 2017 the Group
performance was as follows (the comparatives are for the 18 month
period to 31 January 2016):
Revenue GBP1,727,000 (2016: GBP3,286,000)
Gross Profit GBP1,165,000 (2016: GBP2,423,000)
Operating profit GBP12,000 (2016: 970,000)
Profit after tax GBP2,000 (2016: Loss of GBP1,000)
During the year to 31 January 2017 trade and other receivables
increased by GBP1,028,000; with trade and other payables also
increasing by GBP1,535,000; together these were the major drivers
of the increase in bank and cash balances as at 31 January 2017 to
GBP818,000 (2016: GBP291,000). Additionally during the year the
GBP1,600,000 of loan stock which was issued on 31 January 2016 for
the acquisition of Emex (UK) Group Limited and Freepaymaster
Limited (now Emex Technologies Limited), converted into 400,000,000
Ordinary Shares on 7 June 2016. Together this has resulted in an
increase in net current assets at 31 January 2017 to GBP478,000
(2016: net current liabilities of GBP1,142,000) and net assets
increasing to GBP2,499,000 (2016: GBP959,000).
Although the operating profit for the year of GBP12,000 was
significantly less than the prior year (2016: GBP970,000) the cash
generated from operations in the year increased to GBP546,000
(2016: GBP344,000). This along with nil cash utilised on financing
activities saw an improvement in cash balances held as at 31
January 2017 to GBP818,000 (2016: GBP291,000).
As can be seen in note 3, both the Lottery business and Payment
processing businesses made a profit during the year to 31 January
2017 (GBP46,000 and GBP337,000 respectively, offset largely by
unallocated costs of GBP381,000).
During the 18 months to 31 January 2016, the Lottery business
and Payment processing businesses made a profit of GBP30,000 and
GBP787,000 respectively, offset by a loss in Soccerdome of
GBP360,000 and unallocated costs of GBP458,000.
In February of 2017 we announced that there had been some
changes made by the card schemes which gave us the opportunity to
enhance and develop some of our services - we now have a
regionalised structure better suited to meet the requirements of
the card schemes. We have begun to see the return of growth in the
card based payment services and expect fees generated from card
processing to be a significant contributor to the Group's results
in the second half of FY2018.
The lottery business remains steady, and has seen improvements
in its sales and marketing functions and we expect to see
improvements in new sales in new lines across many of its customers
as a result.
Operational Summary
The Board has again demonstrated its commitment to delivering
profitable services. The Group has seen the contributions made by
Emex and also concluded the acquisition of Timegrand Limited in
April 2017. Timegrand's reporting and analysis capabilities will
help streamline some of our backend processes, therefore improving
customer service. The enlarged Group can now ensure it is able to
take advantage of its continuing increased capability and
functionality, with improvements to customer delivery and
administration.
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. The Weather Lottery is
unique in its support for local and small charities. The
opportunity remains to support good causes, especially local sport
at grass roots, a gap created and which still remains when the
National Lottery announced it will only support sports at an elite
level.
Outlook
The payments division has dealt with the changes in the card
payment market and has seen an increase in the number of
individuals and companies opening digital wallet accounts to take
advantage of the full range of alternative payment methods offered.
We continue to work with channel sales partners to broaden our
reach. We now provide a complete set of traditional and alternative
payment services to businesses and individuals. By adding improved
reporting and administrative services we are ensuring that all the
elements for driving growth are in place.
The Board's focus on prudent management of costs has seen a
break-even year. The year ahead sees the challenge of delivering
shareholder value through the growth in the payments business which
will be aided by the planned appointment of a new chief executive
in the near future.
Financial key performance indicators ("KPI's")
KPIs provide an illustration of management's ability to
successfully deliver against the Group's strategic objectives. The
Board periodically reviews the KPIs of the Group taking into
account the strategic objectives and the challenges facing
implementation of such. The measures reflect the Group's
development focused strategy, the importance of a positive cash
position and our underlying commitment to ensuring safe operations.
These KPI's can be categorised into operational and financial.
These include, but are not limited to:
-- Revenue
-- Gross profit
-- Operating profit
-- Profit after taxation
The Group Board review these indicators at least once a month.
Explanations are sought and given for any material variances and
the management are required to provide plans to resolve any
performance failures as they occur during the year.
Principal risks and uncertainties facing the Group
There are a number of potential risks and uncertainties that
could have a material impact on the Group's long-term performance,
and the Group takes a positive approach to risk management.
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.
Economic risk
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.
Financial Risk
The Group's financial risk management strategy is based on sound
economic objectives and corporate practices. The main financial
risks concern the availability of funds to meet obligations as they
arise (liquidity risk) and fluctuations in exchange rates (exchange
rate risk).
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 Group's business strategy. However, there is no
guarantee that the Group 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 or to collect
receivables such as amounts due from Phillite D UK Limited of
GBP1,767,536 in a timely manner 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 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 with
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.
In addition, there is an ongoing legal action with Eupay Group
Limited. On the basis of cost awards made by the courts, the
Directors are confident that legal expenses of GBP138,000 incurred
by Boxhill Technologies Plc thus far will be recoverable from Eupay
Group Limited and so have recorded these amounts as a receivable
rather than expensing these costs in the year.
By order of the board.
A J Flitcroft 7 July 2017
Director
Lord E T Razzall 7 July 2017
Chairman
Directors' report
The Directors present their Report and Financial Statements for
the year ended 31 January 2017.
Principal activities
The principal activity of the Company is that of a holding
company.
The principal activities of the Group in the year to 31 January
2017 was that of lottery administrators and the provision of
payment processing products and services.
Financial risk management
The Group's financial risk management policies are disclosed in
the accounting policies and note 24 within the financial
statements.
Research and development
The group is committed to research and development activities
principally in relation to process improvements surrounding card
payment services. Internal development during the year was
complemented by the post year end acquisition of Timegrand, whose
reporting and analytics will help streamline processes and improve
customer service.
Financial instruments
Details of the group's financial risk management policies and
objectives in respect of its use of financial instruments are
included in Note 24 to the financial statements together with a
description of its exposure, including to market risk, credit risk,
liquidity risk and capital risk of the Group arising from such
financial instruments.
Proposed dividend
The directors do not recommend the payment of a dividend for the
year ended 31 January 2017 (18 months to 31 January 2016:
GBPnil).
Directors
The directors who held office during the year were as
follows:
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 year ended 31 January
2017 had the following interests in the shares of the Company,
including family interests:
Ordinary shares of 0.1p each
At 31 January At 31 January
2017 2016
Lord E T Razzall 62,965,986 62,965,986
A J A Flitcroft 25,674,408 25,674,408
The following share options had been issued to the Directors of
the Group, but have now lapsed:
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 26 to the
Financial Statements.
Directors' remuneration
In accordance with AIM Rule 19, the remuneration of the
Directors, who served during the year is detailed below:
Salary, Bonus Pension Total
fees & contributions
benefits
in kind
GBP'000 GBP'000 GBP'000 GBP'000
Lord E T Razzall 24 - - 24
A J A Flitcroft 33 - - 33
P I Jackson 30 - - 30
C M Hyman 14 - - 14
A Rudolf 14 - - 14
Substantial shareholdings
As at 31 January 2017 the Group has been notified of the
following substantial holdings (3% or more) of ordinary 0.1p
shares:
Percentage No.of shares
holding
-------------------------- ----------- -------------
Management Express Ltd** 12.75% 236,656,580
-------------------------- ----------- -------------
Lord E T Razzall 3.4% 62,965,986
-------------------------- ----------- -------------
Since the period end and to the date of approval of this report,
there have been movements in the substantial holdings - as at 30
June 2017 the company had been notified of the following
substantial holdings (3% or more) of ordinary 0.1p shares:
Percentage No.of shares
holding
-------------------------- ----------- -------------
Empire Global Management
Ltd 21.2% 500,000,000
-------------------------- ----------- -------------
Management Express Ltd** 10.1% 236,656,580
-------------------------- ----------- -------------
** 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 21. 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.
Donations
Neither the Company nor any of its subsidiaries made any
political or charitable donations or incurred any political
expenditure during either the year to 31 January 2017 or the 18
months to 31 January 2016.
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 2017, the Group had an average of 80
days (2016: 111 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 minimise its consumption of
resources and 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 the Directors consider it to be practicable and
appropriate for a public company of its size and nature.
The Group has in place both an Audit Committee and a
Remuneration Committee. The Audit Committee 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. The
Remuneration Committee determines the terms and conditions of
service of the executive Directors, including their remuneration
and grant of options. The Audit Committee consists of Mr Hyman
(Chair) and Mr Rudolf. The Remuneration Committee consists of Mr
Rudolf (Chair) and Lord Razzall. The Group also has an 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 in respect of the
Annual Report and the financial statements
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 they are required to
prepare the group financial statements in accordance with IFRSs as
adopted by the EU and applicable law and have elected to prepare
the parent company financial statements in accordance with UK
Accounting Standards and applicable law (UK Generally Accepted
Accounting Practice), including FRS 102 The Financial Reporting
Standard applicable in the UK and Republic of Ireland.
Under company law the directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the group and parent company and of
their profit or loss for that period. 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;
and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the group and the parent
company will continue in business.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the parent
company's transactions and disclose with reasonable accuracy at any
time the financial position of the parent company and enable them
to ensure that its financial statements comply with the Companies
Act 2006. They have general responsibility for taking such steps as
are reasonably open to them to safeguard the assets of the group
and to prevent and detect fraud and other irregularities.
The directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
company's website. Legislation in the UK governing the preparation
and dissemination of financial statements may differ from
legislation in other jurisdictions.
Disclosure of information to auditor
The directors who held office at the date of approval of this
directors' report confirm that, so far as they are each aware,
there is no relevant audit information of which the company's
auditor is unaware; and each director has taken all the steps that
he ought to have taken as a director to make himself aware of any
relevant audit information and to establish that the company's
auditors is aware of that information.
Other information
An indication of likely future developments in the business and
particulars of significant events which have occurred since the end
of the financial year have been included in the Strategic Report
beginning on page 1.
Auditor
During the year the Company ran a competitive tender process and
KPMG LLP was appointed as auditor. In accordance with Section 489
of the Companies Act 2006, a resolution for the re-appointment of
KPMG LLP as auditor of the company is to be proposed at the
forthcoming Annual General Meeting.
By order of the board
A J A Flitcroft 7 July 2017
Director
39 St James's Street
London
SW1A 1JD
Independent auditor's report to the members of Boxhill
Technologies Plc
We have audited the financial statements of Boxhill Technologies
Plc for the year ended 31 January 2017 set out on pages 12 to 53.
The financial reporting framework that has been applied in the
preparation of the group financial statements is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by
the EU. The financial reporting framework that has been applied in
the preparation of the parent company financial statements is
applicable law and UK Accounting Standards (UK Generally Accepted
Accounting Practice), including FRS 102 The Financial Reporting
Standard applicable in the UK and Republic of Ireland.
This report is made solely to the company's members, as a body,
in accordance with Chapter 3 of 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 auditor's 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 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 auditor
As explained more fully in the Directors' Responsibilities
Statement set out on page 8, 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 Ethical Standards for
Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements
is provided on the Financial Reporting Council's website at
www.frc.org.uk/auditscopeukprivate.
Opinion on 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 2017 and of the group's profit for the year then ended;
-- the group financial statements have been properly prepared in
accordance with IFRSs as adopted by the EU;
-- the parent company financial statements have been properly
prepared in accordance with UK Generally Accepted Accounting
Practice;
-- 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
the Directors' Report for the financial year is consistent with the
financial statements.
Based solely on the work required to be undertaken in the course
of the audit of the financial statements and from reading the
Strategic report and the Directors' report:
-- we have not identified material misstatements in those
reports; and
-- in our opinion, those reports have been prepared in
accordance with the Companies Act 2006.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters
where the Companies Act 2006 requires us 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.
Simon Richardson (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square
London,
E14 5GL
7 July 2017
Consolidated Statement of Profit and Loss and Other
Comprehensive Income
for year ended 31 January 2017
Note 2017 2016*
GBP000 GBP000
Revenue 4 1,727 3,286
Cost of sales 5 (562) (863)
Gross profit 1,165 2,423
Administrative expenses 5,6,7 (1,153) (1,453)
Operating profit 12 970
Financial income 8 - 6
Financial expenses 8 (10) -
Loss on disposal of Leasehold,
Land & Buildings - (342)
Loss on sale of subsidiary - (430)
Profit before tax 2 204
Taxation 9 - (205)
Profit/(Loss) for the year
from continuing operations 2 (1)
Other comprehensive (loss)/income
Items that are or may be
reclassified subsequently
to profit or loss:
Revaluation of equity investment (62) 342
Other Comprehensive (loss)/income
for the year, net of income
tax (62) 342
Total comprehensive (loss)/income
income for the year (60) 341
Earnings per share
Basic earnings per ordinary
share 10 0.00 (0.00)
Diluted earnings per ordinary
share 10 0.00 (0.00)
--------------- ----------
*18 months to January 2016
All of the profit/(loss) for the period is attributable to
equity holders of the Parent Company.
The notes on pages 16 to 53 form part of these financial
statements.
Consolidated Balance Sheet
At 31 January 2017
Note 2017 2016
GBP000 GBP000
Non-current assets
Property, plant and equipment 11 1 1
Goodwill 13 1,673 1,673
Other intangible assets 12 67 85
Investments in equity instruments 14 280 342
Total non-current assets 2,021 2,101
Current assets
Trade and other receivables 16 1,949 921
Cash and cash equivalents 17 818 291
Total current assets 2,767 1,212
Total assets 4,788 3,313
Current liabilities
Trade and other payables 19 2,283 748
Bank and other borrowings 18 6 6
Convertible loan stock - 1,600
Total current liabilities 2,289 2,354
Total liabilities 2,289 2,354
Net assets 2,499 959
Equity attributable to equity
holders of the parent
Share capital 21 1,856 1,456
Share premium 22 3,020 1,820
Revaluation reserves 14 280 342
Retained earnings 14 (2,657) (2,659)
Total equity attributable
to equity holders of the
Parent 2,499 959
These financial statements were approved by the board of
directors on 7 July 2017.
and were signed on its behalf by:
A J A Flitcroft
Director
Company registered number: 04458947
The notes on pages 16 to 53 form part of these financial
statements.
Consolidated Statement of Changes in Equity
Share Share Revaluation Retained Total
capital premium reserve earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 31 July
2014 1,427 1,723 - (2,658) 492
Issue of share capital 29 15 - - 44
Revaluation gain - - 342 - 342
Profit on treasury
shares - 82 - - 82
(Loss) for the period - - - (1) (1)
Balance at 31 January
2016 1,456 1,820 342 (2,659) 959
Issue of share capital 400 1,200 - - 1,600
Profit for the period - - - 2 2
Revaluation loss - - (62) - (62)
Balance at 31 January
2017 1,856 3,020 280 (2,657) 2,499
The notes on pages 16 to 53 form part of these financial
statements.
Consolidated Cash Flow Statement
for year ended 31 January 2017
Note 2017 2016*
GBP000 GBP000
Cash flows from operating
activities
Profit for the year 2 (1)
Adjustments for:
Depreciation, amortisation
and impairment 11-14 26 36
Financial income 8 - (6)
Financial expense 8 10 -
Loss on disposal in subsidiary - 430
Loss on disposal of Leasehold
Land & Buildings 14 - 342
Tax charge - 205
Movement in working capital:
(Increase)/decrease in trade
and other receivables (1,028) (972)
(Decrease)/increase in trade
and other payables 1,536 310
Cash generated by operations 546 344
Interest received/(paid) (10) 6
Tax paid - (205)
Net cash from operating
activities 536 145
Cash flows from investing
activities:
Payment for fixed/intangible
assets (9) (10)
Net cash inflow on acquisition
of subsidiary - 80
Purchases of property, plant - -
and equipment
Net cash (used/generated
from) investing activities (9) 70
Cash flows from financing
activities
Proceeds from issue of equity
instruments of the Company - 44
Proceeds from sale of treasury
shares - 257
Proceeds from borrowings - -
Repayment of borrowings - (483)
Net cash used in financing
activities - (182)
Net increase in cash and
cash equivalents 527 33
Cash and cash equivalents
at start of period 291 258
Cash and cash equivalents
at end of period 818 291
*18 months to January 2016
There is no material difference between the fair value and the
book value of cash and cash equivalents.
The notes on pages 16 to 53 form part of these financial
statements.
Notes
(forming part of the financial statements)
1 Accounting policies
Boxhill Technologies PLC is a public company incorporated,
domiciled and registered in the UK under the Companies Act 2006.
The registered number is 04458947 and the registered address is 39
St James's Street, London, SW1A 1JD.
The group financial statements consolidate those of the Company
and its subsidiaries (together referred to as the "Group"). The
parent company financial statements present information about the
Company as a separate entity and not about its group.
The group financial statements have been prepared and approved
by the directors in accordance with International Financial
Reporting Standards as adopted by the EU ("Adopted IFRSs"). The
Company has elected to prepare its parent company financial
statements in accordance with FRS 102; these are presented on pages
46 to 53.
The financial statements, upon which this financial information
is based, have been prepared under the historical cost basis except
where specifically noted.
Operating profit is defined to be revenue less cost of sales and
administrative expenses and so excludes losses on disposal of
subsidiaries or leasehold land and buildings.
The accounting policies set out below have, unless otherwise
stated, been applied consistently to all periods presented in these
group financial statements.
Judgements made by the directors, in the application of these
accounting policies that have a significant effect on the financial
statements and estimates with a significant risk of material
adjustment in the next year are discussed in note 28.
1.1 Change in accounting policy
There have been no changes in accounting policies during the
year to 31 January 2017.
1.2 Adopted IFRS not yet applied
The following standards that are not yet effective will be
adopted by the Group in future periods:
IFRS 9 - 'Financial instruments'
The standard is effective for reporting periods beginning on or
after 1 January 2018. The expected date of adoption by the Group
will be 1 February 2018.
IFRS 9 includes new classification of financial assets and
liabilities as either measured at amortised cost, fair value
through other comprehensive income (FVOCI) and fair value through
Profit or loss (FVTPL).
The assessment of IFRS 9's impact on the Group's financial
statements is not yet complete.
IFRS 15 - 'Revenue from Contracts with Customers'
The standard is effective for reporting periods beginning on or
after I January 2018. The expected date of adoption by the Group
will be 1 February 2018.
IFRS 15 introduces a new revenue recognition model that
recognises revenue either at a point in time or over time. The
model features a contract-based five-step analysis of transactions
to determine whether, how much and when revenue is recognised.
The assessment of IFRS 15's impact on the Group's financial
statements is not yet complete.
1.3 Measurement convention
The financial statements are prepared on the historical cost
basis.
1.4 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.
1.5 Basis of consolidation
Subsidiaries
Subsidiaries are entities controlled by the Group. The Group
controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity.
In assessing control, the Group takes into consideration potential
voting rights. The acquisition date is the date on which control is
transferred to the acquirer. The financial statements of
subsidiaries are included in the consolidated financial statements
from the date that control commences until the date that control
ceases. Losses applicable to the non-controlling interests in a
subsidiary are allocated to the non-controlling interests even if
doing so causes the non-controlling interests to have a deficit
balance.
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income
and expenses arising from intra-group transactions, are eliminated.
Unrealised gains arising from transactions with equity-accounted
investees are eliminated against the investment to the extent of
the Group's interest in the investee. Unrealised losses are
eliminated in the same way as unrealised gains, but only to the
extent that there is no evidence of impairment.
1.6 Foreign currency
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 purposes 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 each company, and the
presentational currency for the consolidated Financial
statements.
Transactions in foreign currencies are translated to the
respective functional currencies of Group entities at the foreign
exchange rate ruling at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies at the
balance sheet date are retranslated to the functional currency at
the foreign exchange rate ruling at that date. Foreign exchange
differences arising on translation are recognised in the income
statement. Non-monetary assets and liabilities that are measured in
terms of historical cost in a foreign currency are translated using
the exchange rate at the date of the transaction. Non-monetary
assets and liabilities denominated in foreign currencies that are
stated at fair value are retranslated to the functional currency at
foreign exchange rates ruling at the dates the fair value was
determined.
1.7 Classification of financial instruments issued by the Group
Following the adoption of IAS 32, financial instruments issued
by the Group are treated as equity only to the extent that they
meet the following two conditions:
(a) they include no contractual obligations upon the group to
deliver cash or other financial assets or to exchange financial
assets or financial liabilities with another party under conditions
that are potentially unfavourable to the group; and
(b) where the instrument will or may be settled in the company's
own equity instruments, it is either a non-derivative that includes
no obligation to deliver a variable number of the company's own
equity instruments or is a derivative that will be settled by the
company's exchanging a fixed amount of cash or other financial
assets for a fixed number of its own equity instruments.
To the extent that this definition is not met, the proceeds of
issue are classified as a financial liability. Where the instrument
so classified takes the legal form of the company's own shares, the
amounts presented in these financial statements for called up share
capital and share premium account exclude amounts in relation to
those shares.
Where a financial instrument that contains both equity and
financial liability components exists these components are
separated and accounted for individually under the above
policy.
1.8 Non-derivative financial instruments
Non-derivative financial instruments comprise investments in
equity and debt securities, trade and other receivables, cash and
cash equivalents, loans and borrowings, and trade and other
payables.
Trade and other receivables
Trade and other receivables are recognised initially at fair
value. Subsequent to initial recognition they are measured at
amortised cost using the effective interest method, less any
impairment losses.
Trade and other payables
Trade and other payables are recognised initially at fair value.
Subsequent to initial recognition they are measured at amortised
cost using the effective interest method.
Investments in debt and equity securities
Investments in debt and equity securities are stated at
amortised cost less impairment. Financial instruments held for
trading or designated upon initial recognition are stated at fair
value, with any resultant gain or loss recognised in profit or
loss.
Other investments in debt and equity securities held by the
Group are classified as being available-for-sale and are stated at
fair value, with any resultant gain or loss being recognised
directly in equity (in the fair value reserve), except for
impairment losses and, in the case of monetary items such as debt
securities, foreign exchange gains and losses. When these
investments are derecognised, the cumulative gain or loss
previously recognised directly in equity is recognised in profit or
loss.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call
deposits. Bank overdrafts that are repayable on demand and form an
integral part of the Group's cash management are included as a
component of cash and cash equivalents for the purpose only of the
cash flow statement.
Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair
value less attributable transaction costs. Subsequent to initial
recognition, interest-bearing borrowings are stated at amortised
cost using the effective interest method, less any impairment
losses.
1.9 Derivative financial instruments and hedging
At 31 January 2017 and 31 January 2016, the Group had no
derivatives in place for cash flow hedging purposes.
1.10 Property, plant and equipment
Property, plant and equipment are stated at cost less
accumulated depreciation and any recognised accumulated impairment
losses. Useful lives are reviewed annually by the Directors.
Where parts of an item of property, plant and equipment have
different useful lives, they are accounted for as separate items of
property, plant and equipment.
Leases in which the Group assumes substantially all the risks
and rewards of ownership of the leased asset are classified as
finance leases. Where land and buildings are held under leases the
accounting treatment of the land is considered separately from that
of the buildings. Leased assets acquired by way of finance lease
are stated at an amount equal to the lower of their fair value and
the present value of the minimum lease payments at inception of the
lease, less accumulated depreciation and less accumulated
impairment losses. Lease payments are accounted for as described
below.
Depreciation is charged to the income statement on a
straight-line basis over the estimated useful lives of each part of
an item of property, plant and equipment. Land is not depreciated.
The estimated useful lives are as follows:
-- buildings 20 years
-- plant and equipment 4 years
-- fixtures and fittings 4 years
Depreciation methods, useful lives and residual values are
reviewed at each balance sheet date.
1.11 Business combinations
All business combinations are accounted for by applying the
acquisition method. Business combinations are accounted for using
the acquisition method as at the acquisition date, which is the
date on which control is transferred to the Group.
The Group measures goodwill at the acquisition date as:
the fair value of the consideration transferred; plus
the recognised amount of any non-controlling interests in the
acquiree; plus
the fair value of the existing equity interest in the acquiree;
less
the net recognised amount (generally fair value) of the
identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is
recognised immediately in profit or loss.
Costs related to the acquisition, other than those associated
with the issue of debt or equity securities, are expensed as
incurred.
Any contingent consideration payable is recognised at fair value
at the acquisition date. If the contingent consideration is
classified as equity, it is not remeasured and settlement is
accounted for within equity. Otherwise, subsequent changes to the
fair value of the contingent consideration are recognised in profit
or loss.
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.
1.12 Intangible assets and goodwill
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 reviewed.
Goodwill is stated at cost less any accumulated impairment
losses. Goodwill is allocated to cash-generating units and is not
amortised but is tested annually for impairment. In respect of
equity accounted investees, the carrying amount of goodwill is
included in the carrying amount of the investment in the
investee.
Research and development
Expenditure on research activities is recognised in the income
statement as an expense as incurred.
Expenditure on development activities is capitalised if the
product or process is technically and commercially feasible and the
Group intends to and has the technical ability and sufficient
resources to complete development, future economic benefits are
probable and if the Group can measure reliably the expenditure
attributable to the intangible asset during its development.
Development activities involve a plan or design for the production
of new or substantially improved products or processes. The
expenditure capitalised includes the cost of materials, direct
labour and an appropriate proportion of overheads and capitalised
borrowing costs. Other development expenditure is recognised in the
income statement as an expense as incurred. Capitalised development
expenditure is stated at cost less accumulated amortisation and
less accumulated impairment losses.
Other intangible assets
Expenditure on internally generated goodwill and brands is
recognised in the income statement as an expense as incurred.
Other intangible assets that are acquired by the Group are
stated at cost less accumulated amortisation and accumulated
impairment losses.
Amortisation
Amortisation is charged to the income statement on a
straight-line basis over the estimated useful lives of intangible
assets unless such lives are indefinite. Intangible assets with an
indefinite useful life and goodwill are systematically tested for
impairment at each balance sheet date. Other intangible assets are
amortised from the date they are available for use. The estimated
useful lives are as follows:
Licences, patents and trademarks 25 years
Capitalised development costs 10 years
1.13 Impairment excluding inventories, investment properties and deferred tax assets
Financial assets (including receivables)
A financial asset not carried at fair value through profit or
loss is assessed at each reporting date to determine whether there
is objective evidence that it is impaired. A financial asset is
impaired if objective evidence indicates that a loss event has
occurred after the initial recognition of the asset, and that the
loss event had a negative effect on the estimated future cash flows
of that asset that can be estimated reliably.
An impairment loss in respect of a financial asset measured at
amortised cost is calculated as the difference between its carrying
amount and the present value of the estimated future cash flows
discounted at the asset's original effective interest rate.
Interest on the impaired asset continues to be recognised through
the unwinding of the discount. When a subsequent event causes the
amount of impairment loss to decrease, the decrease in impairment
loss is reversed through profit or loss.
Trade receivables do not carry any interest and are stated at
their nominal value as reduced by appropriate allowances for
estimated irrecoverable amounts.
Non-financial assets
The carrying amounts of the Group's non-financial assets, other
than investment property, inventories and deferred tax assets, are
reviewed at each reporting date to determine whether there is any
indication of impairment. If any such indication exists, then the
asset's recoverable amount is estimated. For goodwill, and
intangible assets that have indefinite useful lives or that are not
yet available for use, the recoverable amount is estimated each
year at the same time.
The recoverable amount of an asset or cash-generating unit is
the greater of its value in use and its fair value less costs to
sell. 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.
An impairment loss in respect of goodwill is not reversed. In
respect of other assets, impairment losses recognised in prior
periods are assessed at each reporting date for any indications
that the loss has decreased or no longer exists. An impairment loss
is reversed if there has been a change in the estimates used to
determine the recoverable amount. An impairment loss is reversed
only to the extent that the asset's carrying amount does not exceed
the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been
recognised.
1.14 Employee benefits
Short-term benefits
Short-term employee benefit obligations are measured on an
undiscounted basis and are expensed as the related service is
provided. A liability is recognised for the amount expected to be
paid under short-term cash bonus or profit-sharing plans if the
Group has a present legal or constructive obligation to pay this
amount as a result of past service provided by the employee and the
obligation can be estimated reliably.
Share-based payment transactions
Share-based payment arrangements in which the Group receives
goods or services as consideration for its own equity instruments
are accounted for as equity-settled share-based payment
transactions, regardless of how the equity instruments are obtained
by the Group.
The grant date fair value of share-based payment awards granted
to employees is recognised as an employee expense, with a
corresponding increase in equity, over the period that the
employees become unconditionally entitled to the awards. The fair
value of the options granted is measured using an option valuation
model, taking into account the terms and conditions upon which the
options were granted. The amount recognised as an expense is
adjusted to reflect the actual number of awards for which the
related service and non-market vesting conditions are expected to
be met, such that the amount ultimately recognised as an expense is
based on the number of awards that do meet the related service and
non-market performance conditions at the vesting date. For
share-based payment awards with non-vesting conditions, the grant
date fair value of the share-based payment is measured to reflect
such conditions and there is no true-up for differences between
expected and actual outcomes.
Share-based payment transactions in which the Group receives
goods or services by incurring a liability to transfer cash or
other assets that is based on the price of the Group's equity
instruments are accounted for as cash-settled share-based payments.
The fair value of the amount payable to employees is recognised as
an expense, with a corresponding increase in liabilities, over the
period in which the employees become unconditionally entitled to
payment. The liability is remeasured at each balance sheet date and
at settlement date. Any changes in the fair value of the liability
are recognised as personnel expense in profit or loss.
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.
1.15 Provisions
A provision is recognised in the balance sheet when the Group
has a present legal or constructive obligation as a result of a
past event, that can be reliably measured and it is probable that
an outflow of economic benefits will be required to settle the
obligation. Provisions are determined by discounting the expected
future cash flows at a pre-tax rate that reflects risks specific to
the liability.
1.16 Revenue
Revenue is recognised when the service is rendered:
-- Lottery business revenue represents takings received for
entry into the lottery prize draws. Revenue is recognised on the
date that the draw takes place.
-- Football pitch revenue represents cash takings received for
pitch bookings, recognised on the day of use by the customer.
-- Payment processing revenue is recognised when transactions
are processed.
-- Digital wallet revenue is recognised at the point when a
chargeable transaction occurs.
1.17 Expenses
Operating lease payments
Payments made under operating leases are recognised in the
income statement on a straight-line basis over the term of the
lease. Lease incentives received are recognised in the income
statement as an integral part of the total lease expense.
Finance lease payments
Minimum lease payments are apportioned between the finance
charge and the reduction of the outstanding liability. The finance
charge is allocated to each period during the lease term so as to
produce a constant periodic rate of interest on the remaining
balance of the liability.
Financing income and expenses
Financing expenses comprise interest payable, finance charges on
shares classified as liabilities and finance leases recognised in
profit or loss using the effective interest method, unwinding of
the discount on provisions, and net foreign exchange losses that
are recognised in the income statement (see foreign currency
accounting policy). Borrowing costs that are directly attributable
to the acquisition, construction or production of an asset that
takes a substantial time to be prepared for use, are capitalised as
part of the cost of that asset. Financing income comprise interest
receivable on funds invested, dividend income, and net foreign
exchange gains.
Interest income and interest payable is recognised in profit or
loss as it accrues, using the effective interest method. Dividend
income is recognised in the income statement on the date the
entity's right to receive payments is established. Foreign currency
gains and losses are reported on a net basis.
1.18 Taxation
Tax on the profit or loss for the year comprises current and
deferred tax. Tax is recognised in the income statement except to
the extent that it relates to items recognised directly in equity,
in which case it is recognised in equity.
Current tax is the expected tax payable or receivable on the
taxable income or loss for the year, using tax rates enacted or
substantively enacted at the balance sheet date, and any adjustment
to tax payable in respect of previous years.
Deferred tax is provided on temporary differences between the
carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes. The following
temporary differences are not provided for: the initial recognition
of goodwill; the initial recognition of assets or liabilities that
affect neither accounting nor taxable profit other than in a
business combination, and differences relating to investments in
subsidiaries to the extent that they will probably not reverse in
the foreseeable future. The amount of deferred tax provided is
based on the expected manner of realisation or settlement of the
carrying amount of assets and liabilities, using tax rates enacted
or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is
probable that future taxable profits will be available against
which the temporary difference can be utilised.
1.19 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.
1.20 Trade Payables
Trade payables are not interest-bearing and are stated at their
nominal value.
2 Business combinations
2.1 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
Emex Technologies
Ltd (Freepaymaster Payment 31 January
Ltd) processing 2016 100% 1,005
Consideration transferred
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.
On 31 January 2016 and reflecting this consideration, the
Company issued GBP1.6m of 0% unsecured, undated, convertible loan
stock which converted into 400,000,000 Ordinary Shares and were
allotted to loan stock holders on 7 June 2016 and were admitted to
trading on AIM on 15 June 2016.
2.2 Assets acquired and liabilities recognised at the date of acquisition
Emex Technologies
Emex (UK) Ltd (Freepaymaster
Group Ltd Ltd) Total
GBP'000 GBP'000 GBP'000
Current assets
Cash and cash equivalents 80 - 80
Trade and other receivables - - -
Non-current assets
Office Equipment 1 - 1
Licences, patents
and trademarks 54 - 54
Trade and other receivables - - -
Current liabilities
Trade and other payables (42) - (42)
93 - 93
============ ==================== ==========
2.3 Goodwill arising on acquisition
Emex Technologies
Emex (UK) Ltd (Freepaymaster
Group Ltd)
Ltd GBP'000 Total
GBP'000 GBP'000
Consideration Transferred 603 1,005 1,608
Less: fair value of identifiable
net assets acquired (93) - (93)
Goodwill arising on acquisition 510 1,005 1,515
============ ==================== ==========
2.4 Net cash inflow on acquisition
Period
ended
31 January
2016
GBP'000
Consideration paid in cash -
Plus: cash and cash equivalent
balances acquired 80
------------
80
============
2.5 Disposals
Principal Date of Proportion Consideration
activity disposal of voting received
interests GBP'000
disposed
Pay Corporation Payment 29 January 100% -
Ltd processing 2016
2.6 Assets disposed and liabilities derecognised at the date of disposal (prior year)
Pay Corporation
Ltd Total
GBP'000 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: carrying value of net
assets disposed (430)
------------------
Loss on sale of disposed subsidiary (430)
==================
2.7 Acquisitions in the current period
During the year to 31 January 2017 there were no
acquisitions.
On 10 April 2017, the Company acquired all of the ordinary
shares in Timegrand Limited for GBP1,000,000 satisfied in full by
the issue of 500,000,000 ordinary shares of 0.1p nominal each in
the Company with a consideration value of 0.2p per share. Timegrand
Limited holds intellectual property, software and knowhow including
a new 10-year licence, granted on 10 April 2017, to use an advanced
payment gateway software system called the WPJ Services Control
Center, with advanced analytics and security/fraud management as
well as finance and administration services. The acquisition of
Timegrand Limited further enhances the offering of the Payments
Division and includes gateway processing software with enhanced
reporting capabilities, fraud management software and finance and
administration services bringing about improved efficiencies
between our delivery and internal finance functions. On acquisition
Timegrand Limited had no trading record and the licence to use the
WPJ Services Control Center software is newly issued, thus no
profits or losses are attributable to the assets being
acquired.
3 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 following the commencement
of the venture between Soccerdome and with Nineteen Twelve Holdings
Limited, the football pitch business is no longer an operating
segment and as such the Group has two business segments, namely
that of lottery administration and payment processing facilities.
The Group operates solely in one geographical area, the United
Kingdom.
The analysis of continuing operations per segment for the year
ended 31 January 2017 is as follows:
Lottery Payment Unallocated Group total
Admin Processing
GBP'000 GBP'000 GBP'000 GBP'000
Revenue 506 1,221 - 1,727
Amortisation (2) - - (2)
Depreciation - (8) (18) (26)
Operating
profit/(loss) 46 337 (371) 12
Finance
income/(costs) - - (10) (10)
Profit/(Loss)
before tax 46 337 (381) 2
Tax charge - - - -
Profit/(Loss)
for the
period 46 337 (381) 2
The same analysis for the 18 months to the end of 31 January
2016 was 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)
Performance across the segments has remained relatively
consistent during the year to 31 January 2017 compared to the prior
period (on a pro-rata basis), with increased profit in the lottery
business reflecting reduced operating costs due to less reliance on
consultancy fees.
There has been an increase in unallocated overheads during the
year to 31 January 2017 compared to the prior period (on a pro-rata
basis), as the business builds its infrastructure to manage
anticipated growth in future years.
The balance sheet analysis as at 31 January 2017 is as
follows:
Lottery Payment Unallocated Group total
Admin Processing
GBP'000 GBP'000 GBP'000 GBP'000
Balance
Sheet
Total
assets 322 1,758 2,708 4,788
========= ============ ============ ============
Total
liabilities 353 17 1,919 2,289
========= ============ ============ ============
The balance sheet analysis as at 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
Balance
Sheet
Total
assets 259 134 342 2,578 3,313
========= ============ ========= ============ =========
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 2017:
2017 2016
GBP'000 GBP'000
Assets
Intangible fixed assets 4 22
Tangible fixed assets 1 4
Investments 1,953 1,673
Other receivables 739 865
Cash and cash equivalents 11 14
------------------- -------------------
2,708 2,578
------------------- -------------------
Liabilities
Trade and other payables 1,903 315
Borrowings 6 6
Convertible loan notes - 1,600
------------------- -------------------
1,919 1,921
------------------- -------------------
4 Revenue
2017 2016
GBP000 GBP000
Lottery 506 910
Payment Processing 1,221 2,376
Total revenues 1,727 3,286
5 Expenses
The following expenses comprise cost of sales:
2017 2016
GBP'000 GBP'000
Fees and integration costs 52 217
Affiliate/agent commission 258 214
Fees to lottery clients 212 349
Prizes payable 40 83
562 863
The following material expenses are included in administrative
expenses:
2017 2016
GBP'000 GBP'000
Consultancy fees 98 251
Software development and maintenance
fees 143 240
Office rent and rates 117 59
Hotel and travel 38 18
Professional fees 125 174
Bank charges 14 15
6 Operating profit
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 (loss)/profit for the period after
taxation was (GBP142,000) (2016: GBP647,000).
Operating profit/(loss) has been stated after
charging/(crediting) the following:
2017 2016
GBP'000 GBP'000
Depreciation of tangible
fixed assets - 35
Amortisation of intangible
assets 8 1
Impairment of intangible 18 -
assets
Auditor's remuneration -
Audit services to the Parent
Company 5 14
Auditor's remuneration -
Audit services to the Group 37 21
Auditor's remuneration -
Taxation services 8 5
========= =========
KPMG LLP's fees for the current year are GBP58,000 for audit
services and GBP17,000 for tax related services (2016: Hart Shaw
GBP37,000 and GBP8,000 respectively.)
7 Staff numbers and costs
The average number of persons employed by the group (including
directors) during the year, analysed by category, was as
follows:
2017 2016
No. No.
12 9
======== ========
The split of employees by
function within the Group No. No.
is as follows:
Administration and Sales 7 5
Management 5 4
-------- --------
Total 12 9
======== ========
2017 2016
Their aggregate remuneration GBP'000 GBP'000
comprised:
Wages and salaries 284 225
Social security costs 4 19
Directors' remuneration 175 219
-------- --------
463 463
-------- --------
Directors' emoluments:
Number of Directors accruing
benefits
under money purchase schemes - -
======== ========
Aggregate emoluments of
highest paid Director 30 45
======== ========
The salary of James Rose (2017: GBP60,000, 2016: GBP90,000) is
included in Directors' remuneration above, but is excluded from the
Directors' remuneration section on page 6 of the Directors' report
as he is a director of Prize Provision Services Limited and
Soccerdome Limited but not a Director of the Group.
Included within Directors' emoluments is GBP117,000 (2016:
GBP175,500) paid to directors via related companies, as detailed in
note 26.
8 Finance income and expense
Recognised in profit or loss
2017 2016
GBP000 GBP000
Finance income
- 6
Finance expense
10 -
9 Taxation
Recognised in the income statement
2017 2016
GBP000 GBP000
Current year - 205
Adjustments for prior years - -
Current tax expense - 205
Deferred tax credit - -
Total tax expense - 205
Reconciliation of effective tax rate
2017 2016
GBP000 GBP000
Profit before tax 2 204
Tax using the UK corporation tax
rate of 20% (2016 : 20.44 %) - 42
Adjusted for the effect of:
Non-deductible expenses 1 245
Depreciation in excess of capital
allowances - 7
Utilisation of previously unrecognised
tax losses (1) (89)
Total tax expense for the year - 205
10 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:
2017 2016
Numerator: earnings attributable
to equity (GBP'000) 2 (1)
Denominator: weighted average
number of equity shares
(No.) 1,722,496,437 1,452,352,425
============== ================
The denominator as at 31 January 2017 is calculated as the
weighted average of the 1,455,829,770 equity shares as at 1
February 2016 plus the 400,000,000 shares issued in June 2016.
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. As the exercise price for all of these
options was greater than the average share price in both periods,
the options are not dilutive and therefore diluted earnings per
share is the same as basic earnings per share.
On 31 January 2016 the Company issued GBP1.6m of 0% unsecured,
undated, convertible loan stock which converted into 400,000,000
Ordinary Shares and were allotted to loan stock holders on 7 June
2016 and were admitted to trading on AIM on 15 June 2016.
11 Property, plant and equipment
Land and Office Total
buildings equipment
GBP000 GBP000 GBP000
Cost
Balance at 1 August 2014 503 49 552
Acquisitions through - - -
business combinations
Disposals (503) (34) (537)
Balance at 31 January
2016 - 15 15
Acquisitions through - - -
business combinations
Other acquisitions - 1 1
Disposals - - -
Balance at 31 January
2017 - 16 16
Depreciation and impairment
Balance at 1 August 2014 143 26 169
Depreciation charge for
the 18 months 18 17 35
Impairment losses - - -
Disposals (161) (28) (189)
Balance at 31 January
2016 - 15 15
Depreciation charge for - - -
the year
Impairment losses - - -
Disposals - - -
Balance at 31 January
2017 - 15 15
Net book value
At 1 August 2014 360 23 383
At 31 January 2016 and
1 February 2016 - 1 1
At 31 January 2017 - 1 1
Impairment loss and subsequent reversal
During the year to 31 January 2017, there were no impairment
losses.
The depreciation charge for the year (rounded to GBPnil) is
recognised in administrative expenses in the income statement.
12 Intangible assets
Website Licences, Total
and software patents
design and trademarks
& development
GBP000 GBP000 GBP000
Cost
Balance at 1 August 2014 28 - 28
Acquisitions through
business combinations - 54 54
Other acquisitions -
externally purchased 10 - 10
Disposals (6) - (6)
Balance at 31 January
2016 32 54 86
Acquisitions through - - -
business combinations
Other acquisitions -
externally purchased 8 - 8
Disposals - - -
Balance at 31 January
2017 40 54 94
Amortisation and impairment
Balance at 1 August 2014 - - -
Amortisation for the
18 months 1 - 1
Impairment charge - - -
Disposals - - -
Balance at 31 January
2016 1 - 1
Amortisation for the
year 1 7 8
Impairment charge 18 - 18
Disposals - - -
Balance at 31 January
2017 20 7 27
Net book value
At 1 August 2014 28 - -
At 31 January 2016 and
1 February 2016 31 54 85
At 31 January 2017 20 47 67
Impairment loss and subsequent reversal
During the year to 31 January 2017, an impairment of GBP18,000
relating to historical Research & Development was taken.
Amortisation and impairment charge
The amortisation and impairment charge is recognised in the
following line items in the income statement:
2017 2016
GBP000 GBP000
Administrative expenses 26 1
13 Goodwill
Goodwill
GBP000
Balance at 1 August 2014 618
Additions (Note 2) 1,515
Disposals (Note 2) (460)
Impairment -
Balance at 31 January
2016 1,673
Additions -
Disposals -
Impairment -
Balance at 31 January
2017 1,673
Impairment loss and subsequent reversal
Included within goodwill is an amount relating to the
subsidiaries Prize Provision Services Limited, Emex Technologies
Ltd (formerly Freepaymaster Limited) and Emex (UK) Group Limited.
The carrying amount for goodwill for these respective subsidiaries,
each considered to be a separate CGU, is GBP158,000, GBP1,005,000
and GBP510,397 respectively.
The principal assumptions made in 2017 in testing the goodwill
for impairment were as follows:
Prize Provision Services Limited
The recoverable amount was determined based on an assessment of
sale value less costs associated with sale as indicated by a recent
arms length offer to acquire the business, which was significantly
in excess of the carrying value of goodwill.
Emex (UK) Group Limited
The recoverable amount was calculated based on determining the
value in use of this cash generating unit. The following key
assumptions were used in this calculation.
-- Period covered by management plans used in calculation - 5
years;
-- Annual growth rates is 0% with a 10% pre-tax discount rate
applied to cash flow projections.
Sensitivity analyses were performed on the forecast:
The calculation of value in use shown above is sensitive to the
assumptions on growth rates.
The forecast could absorb a 20% reduction in revenue combined
with a 20% increase in costs without any impact on the level of
goodwill carried on the balance sheet.
The forecast is not sensitive to discount rate. Even at a
discount rate of 25% the forecast would not suggest that an
impairment to goodwill would be required.
Emex Technologies Limited
The recoverable amount was calculated based on determining the
value in use of this cash generating unit. The following key
assumptions were used in this calculation.
-- Period covered by management plans used in calculation - 5
years;
-- Revenue during year 1 reflects significant growth during the
first year of trading, with subsequent annual growth rates of 5%
and a 10% pre-tax discount rate applied to cash flow
projections.
This business commenced trading in 2016 and as such is still in
its initial growth phase, which is why growth rates are predicted
to be above the long-term growth rate for the industry.
Sensitivity analyses were performed on the forecast:
The calculation of value in use shown above is sensitive to the
assumptions on growth rates.
The forecast could absorb a 20% reduction in revenue combined
with a 10% increase in costs without any impact on the level of
goodwill carried on the balance sheet.
The forecast is not sensitive to discount rate. Even at a
discount rate of 25% the forecast would not suggest that an
impairment to goodwill would be required.
As a result of the above sensitivity analysis, 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 2017 reflects the cost less any provision
for impairment. Given the outcome of the sensitivity analysis
above, there is no chance of impairment from any reasonable
possible change in assumption. The forecasts reflect all matters of
which the Directors are aware as at the date of approval of these
financial statements.
14 Investment in equity instruments
2016
GBP'000
Cost
At 1 August 2014 -
Valuation 342
Disposals -
--------
At 31 January 2016 342
========
Valuation
Fair value adjustment (62)
At 31 January 2017 280
========
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 venture with Soccerdome Limited, a subsidiary of
Boxhill Technologies Plc.
Given that the Group only holds 10% of the share capital of
Nineteen Twelve Holdings Limited and correspondingly only 10% of
the voting rights and furthermore management and operating
decisions are taken by the other equity holder, it is deemed that
the Group does not hold control or have significant influence over
Nineteen Twelve Holdings Limited.
The principal assumptions made in 2017 in determining fair value
were as follows:
The fair value was calculated using a discounted cash flow
model. The following key assumptions were used in this
calculation.
-- The period covered by management plans used in calculation is
9 years.
-- The annualised long term-growth rate takes the business, to a
year 9 pitch utilisation rate of 21% (Prime/evening pitch time
utilisation rate of 57% and Non-prime/daytime utilisation rate of
12%). This reflects the phase of rapid growth that the business is
in following its refurbishment in May 2016.
-- The pre-tax discount rate applied to cash flow projection -
10%;
The period covered by this forecast reflects the specific terms
in the articles of association of Nineteen Twelve Holdings Limited,
which entitles Boxhill Technologies Plc to the first GBP250,000 of
post tax profits over that period.
Sensitivity analyses were performed on the forecast:
The fair value calculation above is sensitive to the assumptions
on growth rates and discount rates.
A 5% increase in revenues over the course of the time period
covered, would result in an additional increase in fair value of
GBP15,000 and the same for an equivalent decrease.
A 5% decrease in the discount rate used would result in an
increase in fair value of GBP16,000 and a 5% decrease would
decrease the fair value by GBP15,000.
15 Investments in subsidiaries
Details of the Company's subsidiaries at 31 January 2017 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
Soccerdome England Ordinary Investment
Limited 02948017 and Wales 100% shares Holding Company
Barrington England Ordinary
Lewis Limited 07190212 and Wales 100% shares Dormant
Emex Technologies
Ltd (formerly
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
The registered office address for each subsidiary is as
follows:
Name of Registered office address
Subsidiary
Prize Provision Suite 3 20, Market Hill, Buckingham,
Services Buckinghamshire,
Limited England, MK18 1JX
Soccerdome 39 St. James's Street, London,
Limited SW1A 1JD
Barrington 39 St. James's Street, London,
Lewis Limited SW1A 1JD
Emex Technologies 39 St. James's Street, London,
Ltd (formerly SW1A 1JD
Freepaymaster
Limited)
Emex (UK) Unit 17/18 Alpha Freight, Prestwick
Group Limited Intl' Airport,
Prestwick, South Ayrshire,
Scotland, KA9 2PL
Emex Consult Forsythe House, Cromac Square,
Ltd Belfast, Northern Ireland,
BT2 8LA
16 Trade and other receivables
2017 2016
GBP000 GBP000
Trade receivables 1,750 783
Other receivables 6 95
Prepayments and accrued income 158 43
VAT receivable 35 -
1,949 921
Included within trade and other receivables is GBPnil (2016:
GBPnil) expected to be recovered in more than 12 months.
Included within prepayments is GBP138,000 legal fees that are
expected to be recovered from the ongoing legal case with Eupay
Group Limited.
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.
The Directors consider that the carrying amount of the
receivables approximates their fair value.
17 Cash and cash equivalents/ bank overdrafts
2017 2016
GBP000 GBP000
Cash and cash equivalents per balance
sheet 818 291
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.
Within the cash balance of GBP818,000 is an amount of GBP116,730
held in designated trust accounts for the benefit of clients of
Prize Provision Services Limited (2016: GBP266,455).
18 Other interest-bearing loans and borrowings
Borrowings
Borrowings at 31 January 2017 include a loan of GBP6,100 (2016:
GBP6,100). The loan is repayable on a fixed monthly repayment basis
and due for settlement within 12 months.
19 Trade and other payables
2017 2016
GBP000 GBP000
Trade payables 450 290
Other payables 1,687 290
Accrued liabilities and deferred
income 146 168
2,283 748
Other payables comprise:
Social security and other taxes 6 (8)
Amounts owing to customers 1,457 -
Other 224 298
1,687 290
Presented as:
Current 2,283 748
Non-current - -
Included within trade and other payables is GBPnil (2016 :
GBPnil) expected to be settled in more than 12 months.
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 80 days
(2016: 111 days).
20 Deferred taxation
A deferred tax asset has not been recognised in the year ended
31 January 2017 nor the 18 months ending 31 January 2016 in respect
of taxable losses carried forward.
As at 31 January 2016, there were GBP782,486 of unused tax
losses, of which GBP1,000 was utilised in the year to 31 January
2017.
There are not considered to be any material temporary
differences associated with investments in subsidiaries for which
deferred tax liabilities have not been recognised.
21 Equity Share capital
2017 2016
GBP'000 GBP'000
Allotted, called up and fully
paid
1,855,829,770 (2016: 1,455,829,770)
Ordinary Shares of 0.1p each 1,856 1,456
======== ========
On 31 January 2016 the Company issued GBP1.6m of 0% unsecured,
undated, convertible loan stock which converted into 400,000,000
Ordinary Shares and were allotted to loan stock holders on 7 June
2016 and were admitted to trading on AIM on 15 June 2016.
The shares were 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 Note 2.
22 Capital and reserves
Dividends
No dividends were recognised in either the period to 31 January
2017 or to 31 January 2016.
Share Premium
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.
23 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. As at 2 June 2017 none of these options had been
exercised and therefore all options expired on this date.
Details of options granted were as follows:
Date of No. Exercise Exercise period
Grant GBP'000 price
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 and so lapsed on 2
June 2017.
24 Financial instruments
The key risks and uncertainties faced by the Group are managed
within a risk management framework. The Group's day to day working
capital is funded by its cash and cash equivalents. The key risks
identified for the Group are discussed below.
The company has exposure to credit risk, market risk and
liquidity risk that arises through the normal course of the Group's
business.
24 (a) Fair values of financial instruments
The Directors consider that there is no material difference
between the asset and liability values in the balance sheet and
their fair value.
All assets and liabilities held at fair value are tier 1, with
the exception of the Investment in Equity Instrument of GBP280k
(2016: GBP342k) which is Tier 3. This asset has been valued using a
discounted cash flow model to determine its value in use and
adjusted accordingly. The key assumptions for this calculation are
in note 14.
24 (b) Credit risk
Financial risk management
Credit risk is the risk of financial loss to the Group if a
customer or counterparty to a financial instrument fails to meet
its contractual obligations, and arises principally from the
Group's receivables from customers and investment securities.
Exposure to credit risk
The maximum exposure to credit risk at the balance sheet date by
class of financial instrument was;
2017 2016
GBP000 GBP000
Trade receivables 1,750 783
Other receivables 6 95
1,756 878
As at 31 January 2017, all trade receivables were generated from
within the UK.
Credit quality of financial assets and impairment losses
The aging of trade receivables at the balance sheet date
was:
2017 2016
GBP000 GBP000
Not past due 181 -
Past due [0-30 days] 108 -
Past due [31-120 days] 514 55
More than 120 days 947 728
1,750 783
The majority of the GBP947,000 that was in excess of 120 days
past due as at 31 January 2017 was due from a related party
(Phillite D Limited). The Directors are confident of its recovery
and therefore there is no allowance for impairment.
In both the year to 31 January 2017 there were GBP34,000 of
trade receivables that were impaired (2016: GBPnil).
24 (c) Liquidity risk
Financial risk management
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations as they fall due.
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.
As at 31 January 2017, the Group held a GBP6,100 loan (2016:
GBP6,100).
In addition, as at 31 January 2017, the Group had Trade and
other payables of GBP,2,283,000 (2016: GBP748,000), of which all is
due within the next 12 months.
The Directors consider that there is no material difference
between the value in the balance sheet and its fair value.
24 (d) Market risk
Financial risk management
Market risk is the risk that changes in market prices, such as
foreign exchange rates, interest rates and equity prices will
affect the Group's income or the value of its holdings of financial
instruments
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.
The Group's treasury function is responsible for managing cash
flow management, interest and foreign exchange exposure to ensure
adequate liquidity at all times to meet cash requirements.
Market risk - Foreign currency risk
The Group's exposure to foreign currency risk is as follows.
This is based on the carrying amount for monetary financial
instruments.
31 January 2017
Sterling Euro US Dollar Other Total
GBP000 GBP000 GBP000 GBP000 GBP000
Cash and cash equivalents 311 69 438 - 818
Trade and other receivables 1,037 640 79 - 1,756
Bank loans 6 - - - 6
Trade and other payables 683 725 728 - 2,136
Net exposure 2,071 1,434 1,245 - 4,716
Sensitivity analysis
A 1% percent weakening of the following currencies against the
pound sterling at 31 January 2017 would have increased profit
before tax by the amounts shown below. This calculation assumes
that the change occurred at the balance sheet date and had been
applied to risk exposures existing at that date.
This analysis assumes that all other variables, in particular
other exchange rates and interest rates, remain constant. The
analysis is performed on the same basis for the 18 months to 31
January 2016.
Equity Equity
2017 2016
GBP000 GBP000
EUR 14 -
$ 12 -
A 1% percent strengthening of the above currencies against the
pound sterling at 31 January 2017 would have had the equal but
opposite effect on the above currencies to the amounts shown above,
on the basis that all other variables remain constant.
Market risk - Interest rate risk
During both the year to 31 January 2017 and 18 months to 31
January 2016, the Company's surplus funds were placed in deposits
at floating rates. 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.
Market risk - Equity price risk
The Group does not currently have any exposure to equity price
risk. As at 31 January 2017, the Group did not have any investments
in quoted equity securities
24 (e) Capital management
The objective of the Company's capital management is to ensure
that there is sufficient liquidity within the Company to carry out
the committed and forecast investment and expenditure. The Company
monitors the long-term cash flow requirements of the business in
order to assess the requirement for changes to the capital
structure to meet that objective and to maintain flexibility. The
capital structure of the Group consists of debt, which includes the
borrowings disclosed in note 18, cash and cash equivalents and
equity attributable to equity holders of the parent, comprising
issued capital, reserves and retained earnings as disclosed in the
consolidated statement of changes in equity. The Board manages the
structure of its capital and makes necessary adjustments to
accommodate the changes in the economic conditions. To maintain or
adjust the capital structure, the Board may issue new shares for
cash. No significant changes were made in the objectives, policies
or processes during the period ended 31 January 2017.
25 Operating leases
Non-cancellable operating lease rentals are payable as
follows:
2017 2016
GBP000 GBP000
Less than one year 19 5
Between one and five years - -
More than five years - -
19 5
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.
During the year to 31 January 2017 GBP33,000 was recognised as
an expense in the income statement in respect of operating leases
(2016: GBP44,000).
26 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 GBP24,000 (2016:
GBP36,000) in the period, for directorship services provided, via
an entity trading as R T Associates. At the period end R T
Associates was owed GBP35,400 (2016: GBP16,200).
Andrew J A Flitcroft
Andrew Flitcroft, a director, charged the Group GBP33,000 (2016:
GBP49,500) 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 GBP59,550 (2016: GBP52,650).
Mr Flitcroft is a director of SVS Securities PLC, during the
period the Group earned GBPnil (2016: GBP9,228) from SVS Securities
PLC.
Philip I Jackson
During the period Philip Jackson was a director of Phillite D UK
Limited (and also EuPay Group Limited during the 18 months to 31
January 2016). During the year to 31 January 2017 the Group earned
net fees from the provision of services to Group clients by
Phillite D UK Limited of GBP626,723 (2016: GBP1,155,466).
Phillite D UK Limited performed regulated services on behalf of
the Group between December 2014 and November 2016, which gave the
Group the regulatory authorisation to perform payment processing.
The revenue recognised and costs associated with this processing
was reflected within the parent company (Boxhill Technologies Plc).
Since November 2016, Phillite D UK Limited's services have been
undertaken within the Group by Emex Technologies Limited which
obtained the necessary Financial Conduct Authority licences in May
2016.
During the 18 months to 31 January 2016 the Group earned net
fees from the provision of services to Group clients by EuPay Group
Limited of GBP1,025,497.
At the period end the Group was owed GBPnil and GBP1,767,536
from EuPay Group Limited and Phillite D UK Limited respectively
(2016: GBP225,235 and GBP727,833). The services provided to the
Group's clients by EuPay Group Limited and Phillite D UK Limited
were at cost to the Group with no profit or uplift being made by
either of EuPay Group Limited or Phillite D UK 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 GBP60,000 for consultancy
services via an entity 1912 Management Limited (2016: GBP90,000).
At the period end 1912 Management Limited was owed GBP134,450
(2016: GBP95,458).
Mr Rose is a director of House of V Ltd, during the period the
Group was charged GBP2,112 (2016: GBPnil) from House of V
Limited.
Remuneration of key management personnel
The remuneration of the Directors and Phil Jackson, who are the
key management personnel of the Group, is as referred to above, and
on page 6 within the Directors' Report and in Note 7.
Issue of Equity
As referred to in Note 23, 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 lapsed on 2 June 2017.
John Botros is a Director of Barrington Lewis Limited and
Soccerdome Limited.
Transactions with key management personnel
Directors of the Company and their immediate relatives control
18.43% of the voting shares of the Company.
The compensation of key management personnel is as follows:
2017 2016
GBP000 GBP000
Key management remuneration including
social security costs 175 219
175 219
27 Subsequent events
Subsequent to the balance sheet date, the purchase of Timegrand
Ltd was completed on 10 April 2017.
Details of which can be found in section 2.7.
28 Accounting estimates and judgements
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. Further detail of the key assumptions and
sensitivities are included in note 13.
Valuation of investment in equity instrument carried at fair
value
Determining fair value requires the entity to estimate the
future cash flow expected to arise from the investment and a
suitable discount rate in order to calculate present value. Further
details of the key assumptions an sensitivities are included in
note 14.
29 Controlling Party
No single individual has sole control of the company.
Company Balance Sheet
At 31 January 2017
Note 2017 2016
GBP000 GBP000
Non-current assets
Property, plant and equipment 4 1 -
Intangible assets 3 - 18
Investments 6 1,902 2,003
Total non-current assets 1,903 2,021
Current assets
Trade and other debtors 6 945 896
Cash and cash equivalents 7 11 14
Total current assets 956 910
Total assets 2,859 2,931
Current liabilities
Trade and other payables 8 497 427
Convertible loan stock 8 - 1,600
Total current liabilities 497 2,027
Total liabilities 497 2,027
Net assets 2,362 904
Capital and reserves
Share capital 9 1,856 1,456
Share premium 9 3,020 1,820
Retained earnings 9 (2,514) (2,372)
Equity shareholders' funds 2.362 904
The accompanying notes form an integral part of these financial
statements.
These financial statements were approved by the board of
directors on 7 July 2017.
and were signed on its behalf by:
A J A Flitcroft
Director
Company registered number: 04458947
Company Statement of Changes in Equity
Share Share Retained Total
capital premium earnings equity
GBP000 GBP000 GBP000 GBP000
Balance at 31 July 2014 1,427 1,723 (3,019) 131
Shares issued in period
less costs 29 15 - 44
Profit on treasury shares - 82 - 82
Gain for the period - - 647 647
Balance at 31 January 2016 1,456 1,820 (2,372) 904
Shares issued in period
less costs 400 1,200 - 1,600
Profit for the period - - (142) (142)
Balance at 31 January 2017 1,856 3,020 (2,514) 2,362
The accompanying notes form an integral part of these financial
statements.
Notes
(forming part of the financial statements)
1 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 Company's financial risk management policies are disclosed
in the consolidated financial statements.
The following accounting policies have been applied consistently
in dealing with items which are considered material in relation to
the financial statements.
2 Basis of preparation
These financial statements were prepared in accordance with
Financial Reporting Standard 102 The Financial Reporting Standard
applicable in the UK and Republic of Ireland ("FRS 102") as issued
in August 2014. The amendments to FRS 102 issued in July 2015 have
been applied. The presentation currency of these financial
statements is sterling. All amounts in the financial statements
have been rounded to the nearest GBP1,000.
Under section s408 of the Companies Act 2006 the company is
exempt from the requirement to present its own profit and loss
account.
In the transition to FRS 102 from old UK GAAP, the Company has
made no measurement and recognition adjustments.
In these financial statements, the company is considered to be a
qualifying entity (for the purposes of this FRS) and has applied
the exemptions available under FRS 102 in respect of the following
disclosures:
-- Reconciliation of the number of shares outstanding from the beginning to end of the period;
-- Cash Flow Statement and related notes; and
-- Key Management Personnel compensation.
As the consolidated financial statements of the Company include
the equivalent disclosures, the Company has also taken the
exemptions under FRS 102 available in respect of the following
disclosures:
-- Certain disclosures required by FRS 102.26 Share Based Payments; and,
-- Certain disclosures required by FRS 102.11 Basic Financial
Instruments and FRS 102.12 Other Financial Instrument Issues in
respect of financial instruments not falling within the fair value
accounting rules of Paragraph 36(4) of Schedule 1.
3 Intangible assets and goodwill
The Company's intangible assets consist of research and
development costs as detailed in note 12 of the consolidated
financial statements. This was written-off during the year to 31
January 2017 as current technology supersedes the research work
undertaken at the time.
Research
& development
GBP000
Cost
Balance at 1 August 20014 18
Acquisitions -
Disposals -
Balance at 31 January
2016 18
Acquisitions -
Disposals -
Balance at 31 January
2017 18
Amortisation and impairment
Balance at 1 August 2014 -
Amortisation for the -
18 months
Impairment charge -
Disposals -
Balance at 31 January -
2016
Amortisation for the -
year
Impairment charge 18
Disposals -
Balance at 31 January
2017 18
Net book value
At 1 August 2014 18
At 31 January 2016 and
1 February 2016 18
At 31 January 2017 -
Amortisation and impairment charge
The amortisation, impairment charge and impairment reversals are
recognised in the following line items in the profit and loss
account:
2017 2016
GBP000 GBP000
Administrative expenses 18 -
18 -
4 Tangible fixed assets
The Company's tangible fixed assets consist of equipment with a
net book value of GBP1,000 (2016: GBPnil) when rounded to
GBP'000s.
Office equipment
GBP000
Cost
Balance at 1 August 2014 -
Acquisitions -
Disposals -
Balance at 31 January -
2016
Acquisitions 1
Disposals -
Balance at 31 January
2017 1
Depreciation and impairment
Balance at 1 August 2014 -
Depreciation charge for -
the 18 months
Impairment losses -
Disposals -
Balance at 31 January -
2016
Depreciation charge for -
the year
Impairment losses -
Disposals -
Balance at 31 January -
2017
Net book value
At 1 August 2014 -
At 31 January 2016 and -
1 February 2016
At 31 January 2017 1
5 Fixed asset investments
The Company's investments consist of investments in subsidiaries
of GBP1,902,000 (2016: GBP2,003,000).
Subsidiary Investment Investment
held held
2017 2016
GBP'000 GBP'000
Prize Provision
Services Limited 14 14
Soccerdome Limited 280 381
Barrington Lewis - -
Limited
Emex Technologies
Ltd (formerly Freepaymaster
Limited) 1,005 1,005
Emex (UK) Group
Limited 603 603
Emex Consult Ltd
1,902 2,003
Details of the Company's subsidiaries at 31 January 2017 can be
found in note 15 of the consolidated financial statements.
6 Debtors
2017 2016
GBP000 GBP000
Amounts due from subsidiary undertaking 3 3
Trade receivables 582 -
Other receivables 208 874
Prepayments and accrued income 152 19
945 896
Included within trade and other receivables is GBPnil (2016:
GBPnil) expected to be recovered in more than 12 months.
7 Cash and cash equivalents/ bank overdrafts
2017 2016
GBP000 GBP000
Cash at bank and in hand 11 14
Cash and cash equivalents 11 14
8 Current liabilities
2017 2016
GBP000 GBP000
Amounts due to subsidiary undertakings 37 43
Trade payables 300 162
Other payables 21 61
Accrued liabilities and deferred
income 139 161
Convertible loan notes - 1,600
497 2,027
Presented as:
Current 497 2,027
Non-current - -
Included within trade and other payables is GBPnil (2016:
GBPnil) expected to be settled in more than 12 months.
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 company 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.
9 Capital and reserves
The movements on share capital are disclosed in notes 21 and the
movements in share premium in the Consolidated statement of changes
in equity to the consolidated financial statements.
10 Operating leases
All operating leases have been included in note 25 in the
Consolidated financial statements.
11 Commitments
Capital commitments
The Company had no contractual commitments to purchase tangible
fixed assets as at 31 January 2017. (2016: GBPnil)
12 Employee benefits
Share based payments
In the current period, there were no share based payments, other
than existing share options for Directors as covered in the
Consolidated financial statements in note 26.
13 Acquisitions of businesses
All acquisitions have been covered in note 2 of the Consolidated
financial statements.
14 Related party disclosures
Identity of related parties with which the Company has
transacted
The transactions set out below took place between the Parent
Company and its subsidiaries.
2017 2016
GBP'000 GBP'000
Management charge to
Prize Provision Services
Limited 12 93
Balance included in
debtors
Emex Consult Ltd 1 -
Barrington Lewis Ltd 3 8
Emex Technologies Ltd 4 -
Balance included in
creditors:
Prize Provision Services
Limited 18 95
Soccerdome Limited 20 20
Dividend received
Pay Corporation Ltd - 750
Transactions with key management personnel
Total compensation of key management personnel (including the
directors) is covered in note 7 of the consolidated financial
statements.
15 Subsequent events
All post balance sheet significant events have been covered in
notes 2 and 27 of the Consolidated financial statements.
16 Controlling party
No single individual has sole control of the Company.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EAPXXELKXEEF
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July 07, 2017 05:00 ET (09:00 GMT)
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