RNS Number:9174R
eServGlobal Limited
27 February 2007
Appendix 4D
eServGlobal Limited
ABN 59 052 947 743
Half-year report and appendix 4D
for the half-year ended 31 December 2006
The half-year financial report does not include notes of the type normally
included in an annual financial report and should be read in conjunction with
the 2006 annual financial report.
Half-year report and appendix 4D
for the half year ended
31 December 2006
Contents
Results for announcement to the market 1
Directors' Report 2
Auditor's Independence Declaration 4
Independent Review Report 5
Directors' Declaration 7
Consolidated Income Statement 8
Consolidated Balance Sheet 9
Consolidated Statement of Recognised Income and Expenses 10
Consolidated Cash Flow Statement 11
Notes to the Consolidated Financial Statements 12
eServGlobal Limited
Half year ended
31 December 2006
Results for announcement to the market
Results A$ '000
Revenues Up 127% to 74,202
Profit after tax attributable to members Up 1,047% to 2,203
Dividends (distributions) Amount per security Franked amount per
security
Current period
Interim dividend declared Nilc -%
Final dividend paid 1.2 c 100%
Previous corresponding period
Interim dividend declared Nil c -%
Final dividend paid 1 c 100%
Record date for determining entitlements to the N/A
dividend.
Brief explanation of revenue, net profit and dividends (distributions).
The consolidated entity achieved sales revenue for the period of $74.202million
(2005 $32.711million) - an increase of 127%. The gross profit realised was
$26.400million (36%) (2005 $11.040million (34%)). EBITDA for the period was
$9.022million (2005 EBITDA $1.69million).
The net result of the consolidated entity for the half year ended 31 December
2006 was a profit after tax and minority interest for the period of $2,203,000
(2005 $192,000). Earnings per share were 1.3cents (2005 0.1cents)
The operating cash flow for the period was a net inflow of $1.041million. Cash
at 31 December 2006 was $6.076 million.
1
eServGlobal Limited
Half year ended
31 December 2006
Directors' report
The directors of eServGlobal Limited submit herewith the financial report for
the half-year ended 31 December 2006. In order to comply with the provisions of
the Corporations Act 2001, the directors report as follows:
Directors
The names of the directors of the company during or since the end of the half
year are:
Ian Buddery Executive Chairman & Chief Executive Officer
Francois Barrault Non Executive Director
Anthony Gilbert Non Executive Director
Graham Libbesson Non Executive Director
Jim Pratt Non Executive Director
David Smart Non Executive Director
Roger Agniel (former Chief Executive Officer and Director) ceased 18 January 2007
Review of Operations
This report is to be read in conjunction with other reports issued
contemporaneously.
eServGlobal Limited is a public company listed on the Australian Stock Exchange
and the London Stock Exchange (AIM). With its Head Office in Sydney, Australia,
the eServGlobal group has operations throughout the world.
eServGlobal (LSE: ESG & ASX:ESV) specialises in enhanced multimedia
communication services and real-time multi-networks control solutions. Our
systems enable Service Providers to maximize today's proven revenue streams
whilst ensuring service continuity and new revenue opportunities when evolving
to next generation networks.
eServGlobal solutions are designed for use in all types of networks from fixed
to mobile to NGN/IMS. eServGlobal provides cost-effective and reliable
multimedia messaging delivery from voice to video mail; from SMS routing,
antispam control and value-added services to instant messaging and presence
services. eServGlobal delivers the most advanced prepaid top-up methods and
real-time rating enabling innovative marketing and prepaid-postpaid convergence
eServGlobal has operations worldwide. More than 75 Service Providers in over 50
countries are taking advantage of our advanced solutions and multi-network
expertise to successfully address their business challenges.
In addition to its Sydney office, the group has offices in Paris (France),
Wellington (NZ), Hong Kong, Ipswich (UK), Brussels (Belgium), the Netherlands,
Denmark, India, Egypt, Singapore, Indonesia, Beijing, Romania and Poland.
The consolidated entity achieved sales revenue for the period of $74.202million
(2005 $32.711million) - an increase of 127%. The gross profit realised was
$26.400million (36%) (2005 $11.040million (34%)). EBITDA for the period was
$9.022million (2005 EBITDA $1.69million).
The net result of the consolidated entity for the half year ended 31 December
2006 was a profit after tax and minority interest for the period of $2,203,000
(2005 $192,000).
The operating cash flow for the period was a net inflow of $1.041million. Cash
at 31 December 2006 was $6.076million.
2
eServGlobal Limited
Half year ended
31 December 2006
Auditor's independence declaration
The auditor's independence declaration is included on page 4 of the half-year
financial report.
Rounding off of amounts
The company is a company of the kind referred to in ASIC Class Order 98/0100,
dated 10 July 1998, and in accordance with that Class Order amounts in the
directors' report and the financial report are rounded off to the nearest
thousand dollars, unless otherwise indicated.
Signed in accordance with a resolution of the directors, made pursuant to s.306
(3) of the Corporations Act 2001.
On behalf of the directors
Ian Buddery
Executive Chairman & Chief Executive Officer
Sydney, 26 February 2007
3
Deloitte Touche Tohmatsu
A.B.N. 74 490 121 060
Grosvenor Place
225 George Street
Sydney NSW 2000
PO Box N250 Grosvenor Place
Sydney NSW 1220 Australia
DX 10307SSE
Tel: +61 (0) 2 9322 7000
Fax: +61 (0) 2 9322 7001
www.deloitte.com.au
The Board of Directors
eServGlobal Limited
10 Spring Street
Sydney NSW 2000
26 February 2007
Dear Board Members
eServGlobal Limited
In accordance with section 307C of the Corporations Act 2001, I am pleased to
provide the following declaration of independence to the directors of
eServGlobal Limited.
As lead audit partner for the review of the financial statements of eServGlobal
Limited for the half-year ended 31 December 2006 I declare that to the best of
my knowledge and belief, there have been no contraventions of:
(i) the auditor independence requirements of the Corporations Act 2001 in
relation to the review; and
(ii) any applicable code of professional conduct in relation to the review.
Yours sincerely
DELOITTE TOUCHE TOHMATSU
Catherine Hill
Partner
Chartered Accountants
Sydney, 26 February 2007
Liability limited by a scheme approved under Professional Standards Legislation
4
Deloitte Touche Tohmatsu
A.B.N. 74 490 121 060
Grosvenor Place
225 George Street
Sydney NSW 2000
PO Box N250 Grosvenor Place
Sydney NSW 1220 Australia
DX 10307SSE
Tel: +61 (0) 2 9322 7000
Fax: +61 (0) 2 9322 7001
www.deloitte.com.au
Independent review report to the members of
eServGlobal Limited
Report on the Half-Year Financial Report
We have reviewed the accompanying half-year financial report of eServGlobal
Limited, which comprises the balance sheet as at 31 December 2006, and the
income statement, cash flow statement, statement of recognised income and
expense for the half-year ended on that date, selected explanatory notes and the
directors' declaration of the consolidated entity comprising the company and the
entities it controlled at the end of the half-year or from time to time during
the half year as set out on pages 7 to 14.
Directors' Responsibility for the Half-Year Financial Report
The directors of the company are responsible for the preparation and fair
presentation of the half-year financial report in accordance with Australian
Accounting Standards (including the Australian Accounting Interpretations) and
the Corporations Act 2001. This responsibility includes designing, implementing
and maintaining internal control relevant to the preparation and fair
presentation of the half-year financial report that is free from material
misstatement, whether due to fraud or error; selecting and applying appropriate
accounting policies; and making accounting estimates that are reasonable in the
circumstances.
Auditor's Responsibility
Our responsibility is to express a conclusion on the half-year financial report
based on our review. We conducted our review in accordance with Auditing
Standard on Review Engagements ASRE 2410 Review of an Interim Financial Report
Performed by the Independent Auditor of the Entity, in order to state whether,
on the basis of the procedures described, we have become aware of any matter
that makes us believe that the financial report not accordance with the
Corporations Act 2001 including: giving a true and fair view of the consolidated
entity's financial position as at 31 December 2006 and its performance for the
half-year ended on that date; and complying with Accounting Standard AASB 134
Interim Financial Reporting and the Corporations Regulations 2001. As the
auditor of eServGlobal Limited, ASRE 2410 requires that we comply with the
ethical requirements relevant to the audit of the annual financial report.
5
A review of a half-year financial report consists of making inquiries, primarily
of persons responsible for financial and accounting matters, and applying
analytical and other review procedures. A review is substantially less in scope
than an audit conducted in accordance with Australian Auditing Standards and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion
Auditor's Independence Declaration
In conducting our review, we have complied with the independence requirements of
the Corporations Act 2001.
Conclusion
Based on our review, which is not an audit, we have not become aware of any
matter that makes us believe that the half-year financial report of eServGlobal
Limited is not in accordance with the Corporations Act 2001, including:
(a) giving a true and fair view of the consolidated entity's
financial position as at 31 December 2006 and of its performance for the
half-year ended on that date; and
(b) complying with Accounting Standards AASB 134 Interim Financial
Reporting and the Corporations Regulations 2001.
DELOITTE TOUCHE TOHMATSU
Catherine Hill
Partner
Chartered Accountants
Sydney, 26 February 2007
Liability limited by a scheme approved under Professional Standards Legislation
6
eServGlobal Limited
Half year ended
31 December 2006
Directors' declaration
The directors declare that:
a) in the directors' opinion, there are reasonable grounds to believe
the company will be able to pay its debts as and when they become due and
payable; and
b) in the directors' opinion, the attached financial statements and
notes thereto are in accordance with the Corporations Act 2001, including
compliance with accounting standards and giving a true and fair view of the
financial position and performance of the consolidated entity.
Signed in accordance with a resolution of the directors made pursuant to s.303
(5) of the Corporations Act 2001.
On behalf of the directors
Ian Buddery
Executive Chairman & Chief Executive Officer
Sydney, 26 February 2007
7
eServGlobal Limited
Half year ended
31 December 2006
Consolidated income statement
for the half-year ended 31 December 2006
Consolidated
Half-Year Half-Year
Ended Ended
31 December 2006 31 December 2005
$'000 $'000
Revenue 74,202 32,711
Cost of sales (47,802) (21,671)
Gross profit 26,400 11,040
Other income 3 193
Sales and marketing expenses (6,579) (4,747)
Administration expenses (15,482) (5,533)
Finance costs (133) (57)
Profit before tax 4,209 896
Income tax expense (1,942) (719)
Profit for the period 2,267 177
Attributable to:
Equity holders of the parent 2,203 192
Minority interest 64 (15)
2,267 177
Earnings per share:
Basic (cents per share) 1.3 0.1
Diluted (cents per share) 1.3 0.1
Notes to the Financial Statements are included on pages 12 to 14
8
eServGlobal Limited
Half year ended
31 December 2006
Consolidated balance sheet
as at 31 December 2006
Consolidated
Note 31 December 30 June
2006 2006
$'000 $'000
Current Assets
Cash and cash equivalents 6,076 7,471
Trade and other receivables 75,144 71,366
Inventories 1,300 2,569
Current tax assets 117 1,341
Total Current Assets 82,637 82,747
Non-Current Assets
Property, plant and equipment 3,910 3,897
Deferred tax assets 7,984 9,234
Goodwill 46,282 45,685
Other intangible assets 33,327 35,784
Total Non-Current Assets 91,503 94,600
Total Assets 174,140 177,347
Current Liabilities
Trade and other payables 32,268 31,159
Borrowings 2,750 2,000
Current tax payables 134 -
Provisions 3,984 5,746
Other 2 8,608 11,684
Total Current Liabilities 47,744 50,589
Non-Current Liabilities
Deferred tax liabilities 11,631 12,619
Provisions 1,366 1,288
Total Non-Current Liabilities 12,997 13,907
Total Liabilities 60,741 64,496
Net Assets 113,399 112,851
Equity
Issued Capital 6 114,984 114,896
Reserves 7 2,050 1,769
Retained earnings (3,669) (3,832)
Parent Entity Interest 113,365 112,833
Minority Interest 34 18
Total Equity 113,399 112,851
Notes to the Financial Statements are included on pages 12 to 14
9
eServGlobal Limited
Half year ended
31 December 2006
Consolidated statement of recognised income and expense
for the half-year ended 31 December 2006
Consolidated
Half-year Half-year
ended 31 ended 31
December 2006 December 2005
$'000 $'000
Exchange differences arising on the translation of foreign (248) 152
operations
Employee equity-benefit reserve 168 312
Net income recognised directly in equity 80 464
Profit for the period 2,267 177
Total recognised income and expense for the period 2,347 641
Attributable to:
Equity holders of the parent 2,283 656
Minority interest 64 (15)
2,347 641
Notes to the Financial Statements are included on pages 12 to 14
10
eServGlobal Limited
Half year ended
31 December 2006
Consolidated cash flow statement
for the half-year ended 31 December 2006
Consolidated
Half-year ended Half-year ended
31 December 2006 31 December 2005
$'000 $'000
Cash Flows from Operating Activities
Receipts from customers 69,128 33,417
Payments to suppliers and employees (66,614) (31,231)
Interest received 3 193
Interest and other costs of finance paid (133) (58)
Income tax paid (1,343) (4)
Net cash provided by operating activities 1,041 2,317
Cash Flows From Investing Activities
Payment for property, plant and equipment (1,170) (838)
Payment for business - (63,007)
Proceeds from sale of property, plant and equipment - 7
Net cash used in investing activities (1,170) (63,838)
Cash Flows From Financing Activities
Proceeds from issues of equity securities 57 62,954
Payment for share issue costs - (2,809)
Proceeds from borrowings 750 1,000
Dividends paid to members of parent company (2,040) (1,099)
Net cash provided by financing activities (1,233) 60,046
Net Decrease In Cash and Cash Equivalents (1,362) (1,475)
Cash At The Beginning Of The Period 7,471 11,742
Effects of exchange rate changes on the balance of cash held in (33) 383
foreign currencies
Cash and Cash Equivalents At The End Of The Period 6,076 10,650
Notes to the Financial Statements are included on pages 12 to 14
11
eServGlobal Limited
Half year ended
31 December 2006
Notes to the consolidated financial statements
1. Significant accounting policies
Statement of compliance
The half-year financial report is a general purpose financial report prepared in
accordance with the Corporations Act 2001 and AASB 134 Interim Financial
Reporting. Compliance with AASB 134 ensures compliance with International
Financial Reporting Standard IAS 34 Interim Financial Reporting. The half-year
financial report does not include notes of the type normally included in an
annual financial report and should be read in conjunction with the most recent
annual financial report.
Basis of preparation
The condensed financial statements have been prepared on the basis of historical
cost, except for the revaluation of certain non-current assets and financial
instruments. Cost is based on the fair values of the consideration given in
exchange for assets. All amounts are presented in Australian dollars.
The accounting policies and methods of computation adopted in the preparation of
the half-year financial report are consistent with those adopted and disclosed
in the company's 2006 annual financial report for the financial year ended 30
June 2006.
2. Other Current Liabilities
Consolidated
31 December 2006 30 June 2006
$'000 $'000
Deferred income 8,608 11,684
3. Dividends
Half Year ended Half Year ended
31 December 2006 31 December 2005
Cents Total Cents Total
per share $'000 per share $'000
Fully paid ordinary shares
Recognised amounts
Final dividend paid in respect of prior financial year 1.2 2,040 1.0 1,099
12
eServGlobal Limited
Half year ended
31 December 2006
4. Segment Information
The consolidated entity operates in one business segment, the Telecommunications
Software Solutions business, and in the following geographical segments:
Information on geographical segments (primary reporting format)
Segment Revenues
EXTERNAL SALES INTER SEGMENT TOTAL
GEOGRAPHICAL 2006 2005 2006 2005 2006 2005
$'000 $'000 $'000 $'000 $'000 $'000
Asia Pacific 499 6,282 - 834 499 7,116
Europe 73,703 25,595 - - 73,703 25,595
Total of all segments 74,202 32,711
Other Income 3 193
Consolidated 74,205 32,904
5. Issuances, repurchases and repayment of securities
During the half-year eServGlobal Limited issued 271,331 ordinary shares for $57
thousand on exercise of 271,331 share options issued under its executive and
employee share option plans. As a result of this share issue, $31 thousand was
transferred from the equity-settled employee benefits reserve of $632 thousand
to issued capital. There were no other movements in the ordinary share capital
or other issued share capital of the company in the current half-year.
eServGlobal Limited issued 1,550,000 share options (6 months to 31 December
2005: 100,000) over ordinary shares under its executive and employee share
option plan during the half-year reporting period. These share options had an
average fair value at grant date of $0.30 per share option (6 months to December
2005: $0.44).
13
eServGlobal Limited
Half year ended
31 December 2006
6. Issued Capital
Consolidated
31 December 30 June
2006 2006
$'000 $'000
170,014,142 fully paid ordinary shares (30 June 2006: 169,742,811) 114,984 114,896
31 December 2006 30 June 2006
No. '000 $ '000 No. '000 $ '000
Fully Paid Ordinary Shares 169,743 114,896 109,800 53,076
Shares issued in the period 271 57 59,943 63,781
Share issue costs - - - (2,038)
Transfer from employee equity-benefit reserve - 31 - 77
Balance at the end of the financial period 170,014 114,984 169,743 114,896
In accordance with the executive and employee share option plan employees are
entitled to purchase shares in the company. The exercise of such share options
in the period resulted in the ordinary share capital increasing by 271,331 (note
5).
7. Reserves
31 December 2006 30 June 2006
$'000 $'000
Employee equity-benefit 632 495
Foreign currency translation 1,418 1,274
2,050 1,769
14
eServGlobal Limited
Half year ended
31 December 2006
Other information required to be given to ASX under listing rule 4.2A.3
Net tangible assets per security Current period Previous corresponding
period
Net tangible assets per security 19.9 cents 20.1cents
Dividends
Amount Amount per Franked amount Amount per Date paid
security per security at security of / payable
30% tax foreign source
dividend
Interim dividend:
Current year Nil N/A N/A N/A N/A
Previous year Nil N/A N/A N/A N/A
Final dividend paid in respect of
previous financial year:
Current period:
Final dividend 2,039,890 1.2c Fully Franked N/A N/A
Previous corresponding period:
Special dividend
Final dividend 1,099,423 1.0c Fully Franked N/A
The dividend or distribution plans shown below are in operation.
N/A.
The last date(s) for receipt of election notices for the
+dividend or distribution plans N/A
15
eServGlobal Limited
Half year ended
31 December 2006
Details of associates and joint venture entities
Name of entity Percentage of ownership interest held Aggregate share of net profit (loss)
at end of period contributed to the reporting entity
Current Previous Current Previous
period corresponding period period corresponding period
$A'000 $A'000
Total N/A N/A N/A N/A
16
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The company news service from the London Stock Exchange
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