pushpay holdings limited unaudited interim financial ... - NZX.com
PUSHPAY HOLDINGS LIMITED UNAUDITED INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014
Pushpay Holdings Limited Consolidated Statement of Comprehensive Income For the six months ended 30 September 2014
Notes
6 months
6 months
30 September 2014
30 September 2013
(Unaudited) $’000
(Unaudited) $’000
1,519
90
94
-
1,613
90
(4,497)
(661)
(2,884)
(571)
312
-
(2,572)
(571)
(145)
3
(2,717)
(568)
(6.77)
(2.48)
Unaudited Interim Financial Statements
Pushpay Holdings Limited
Revenue Operating Revenue Other Income Total Revenue and Other Income Operating Expenses
4
Operating loss before income tax Income tax benefit Operating loss for the period after tax Other comprehensive income Items that may be reclassified subsequently to profit or loss: Translation of foreign operations Total comprehensive loss for the period attributable to the shareholders of the company (Loss) per share Basic (loss) per share (cents) Calculated on a weighted average basis of the number of shares on issue. Adjusted for share subdivision on 3 June 2014.
The accompanying notes form part of these financial statements. Page
2
Unaudited Interim Financial Statements
Pushpay Holdings Limited
Pushpay Holdings Limited Consolidated Statement of Changes in Equity For the six months ended 30 September 2014 Share Foreign
Based
Share
Currency
Payment
Accumulated
Total
Capital
Reserve
Reserve
Losses
Equity
$'000
$'000
$'000
$'000
$'000
979
5
-
(573)
411
Loss for the period
-
-
-
(571)
(571)
Currency translation movements
-
3
-
-
3
979
8
-
(1,144)
(157)
520
-
-
-
520
-
-
-
-
-
Balance as at 30 September 2013 (unaudited)
1,499
8
-
(1,144)
363
Balance at 1 April 2014 (audited)
1,860
39
92
(2,211)
(220)
Loss for the period
-
-
-
(2,572)
(2,572)
Currency translation movements
-
(145)
-
-
(145)
1,860
(106)
92
(4,783)
(2,937)
Issue of shares
12,568
-
-
-
12,568
Conversion of preference shares
2,000
-
-
-
2,000
(51)
-
-
-
(51)
-
-
35
-
35
16,377
(106)
127
(4,783)
11,615
Notes
Balance at 1 April 2013 (unaudited) Comprehensive loss
Total comprehensive income Transactions with owners Issue of shares Capital raising costs
Comprehensive loss
Total comprehensive income Transactions with owners
Capital raising costs Share based payments Balance as at 30 September 2014 (unaudited)
The accompanying notes form part of these financial statements. Page
3
Pushpay Holdings Limited Consolidated Statement of Financial Position As at 30 September 2014
Notes
30 September 2014
31 March 2014
(Unaudited) $'000
(Audited) $'000
5,599
2,746
75
-
Unaudited Interim Financial Statements
Pushpay Holdings Limited
Assets Current assets Cash and cash equivalents Restricted cash balance Trade and other receivables
1,516
185
Total current assets
7,190
2,931
295
64
Intangible assets
6,043
803
Total non-current assets
6,338
867
13,528
3,798
1,790
351
123
24
Preference shares
-
2,000
Capital contributions in advance
-
1,643
1,913
4,018
-
-
1,913
4,018
11,615
(220)
16,377
1,860
(106)
39
127
92
(4,783)
(2,211)
11,615
(220)
Non-current assets Property, plant and equipment
Total assets Liabilities Current liabilities Trade and other payables Employee benefits
Total current liabilities Total non-current liabilities Total liabilities Net assets / (liabilities) Equity Share capital
5
Foreign currency translation reserve Share based payment reserve Accumulated losses Total equity
The accompanying notes form part of these financial statements. Page
4
Unaudited Interim Financial Statements
Pushpay Holdings Limited
Pushpay Holdings Limited Consolidated Statement of Cash Flows For the six months ended 30 September 2014
Notes
6 months to
6 months to
30 September 2014
30 September 2013
(Unaudited) $'000
(Unaudited) $'000
578
60
68
-
(3,431)
(569)
(2,785)
(509)
-
2
Cash flows from operating activities Cash was provided from (applied to): Receipts from customers Interest received Payment to suppliers & employees Net cash (outflow) from operating activities
11
Cash flows from investing activities Cash was provided from (applied to): Proceeds from sale of fixed assets Purchase of property, plant and equipment
(186)
(2)
Capitalised development costs and intangible assets
(730)
(295)
(3,600)
-
(75)
-
(4,591)
(295)
10,374
520
-
22
Purchase of business – Run the Red Limited Restricted cash balance Net cash (outflow) from investing activities Cash flows from financing activities Cash was provided from (applied to): Issue of ordinary shares (net of costs) Proceeds from shareholder advances Net cash inflow from financing activities
10,374
542
Net increase/(decrease) in cash held
2,998
(262)
Foreign currency translation adjustment
(145)
3
Add cash and cash equivalents at start of period
2,746
271
Balance at end of period
5,599
12
5,599
12
Comprised of: Cash and cash equivalents
The accompanying notes form part of these financial statements. Page
5
Pushpay Holdings Limited Condensed Notes to the Unaudited Interim Financial Statements For the six months ended 30 September 2014
Unaudited Interim Financial Statements
Pushpay Holdings Limited
1. Corporate Information Pushpay Holdings Limited is a limited liability company (the “Company”), domiciled and incorporated in New Zealand and registered under the New Zealand Companies Act 1993 and listed on the NZX Alternative Market. The registered office of the Company is Ground floor Microsoft House, 22 Viaduct Harbour Avenue, Auckland 1010, New Zealand. The unaudited interim financial statements presented are for Pushpay Holdings Limited and its subsidiaries (together “the Group”) for the six months ended 30 September 2014. These statements were authorised for issue in accordance with a resolution of the Directors on 13 November 2014. The Group’s principal activity is the provision of a platform for mobile commerce and electronic payments and tools for merchants to engage with consumers. 2. Basis of preparation These general purpose financial statements for the six months ended 30 September 2014 have been prepared in accordance with NZ IAS 34, Interim Financial Reporting. In complying with NZ IAS 34, these interim financial statements also comply with IAS 34 interim financial reporting. These interim financial statements do not include all the notes of the type normally included in an annual financial report. Accordingly, this report should be read in conjunction with the audited financial statements of Pushpay Holdings Limited and its Subsidiaries for the period ended 31 March 2014 which have been prepared in accordance with the New Zealand equivalents to International Financial Reporting Standards (NZ IFRS) and International Financial Reporting Standards (IFRS). The Company is designated as profit-oriented entity and an issuer for the purposes of the Financial Reporting Act 2013. All significant accounting policies have been applied on a basis consistent with those used in the audited financial statements of Pushpay Holdings Limited and its Subsidiaries for the period ended 31 March 2014. The financial statements are presented in thousands of New Zealand dollars. 3. Additional accounting policies subsequent to 31 March 2014 Consolidation Subsidiaries are fully consolidated from the date on which control is transferred to the parent. The acquisition method of accounting is used to account for the acquisition of subsidiaries by the parent. The consideration transferred for an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange. Costs directly attributable to the acquisition are expensed in the income statement. Inter-company transactions, balances and unrealised gains and losses on transactions between Group companies are eliminated. Goodwill Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any noncontrolling interests in the acquiree and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any Page
6
Unaudited Interim Financial Statements
Pushpay Holdings Limited
Pushpay Holdings Limited Condensed Notes to the Unaudited Interim Financial Statements For the six months ended 30 September 2014 (continued) 3. Additional accounting policies subsequent to 31 March 2014 (continued) non-controlling interests in the acquiree and the fair value of the acquirer’s previously held interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain. Goodwill is not amortised but is reviewed for impairment at least annually. For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period. On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on disposal. 4. Expenses
Notes
6 months to 30
6 months to 30
September 2014
September 2013
(Unaudited) $'000
(Unaudited) $'000
228
25
Operating expenses include: Amortisation of intangible assets Depreciation Employee benefits/entitlements Share based payments
29
4
1,855
389
35
-
5. Share capital & shares Share capital
Number of Shares Notes
12 months to
Number
31 March 2014 of Shares
12 months to 31 March 2013
000's
(Audited) $'000
000's
(Unaudited) $'000
1,373
979
1,000
80
209
820
236
929
Share issue costs
-
(4)
-
(30)
Capital raised on employee share scheme allotment
-
65
-
-
Issue of shares to Pushpay Trustees Limited
-
-
137
-
1,582
1,860
1,373
979
Balance at 1 April 2013 Movements during the period Issue of shares
Balance as at 31 March 2014
Page
7
Unaudited Interim Financial Statements
Pushpay Holdings Limited
Pushpay Holdings Limited Condensed Notes to the Unaudited Interim Financial Statements For the six months ended 30 September 2014 (continued) 5. Share capital & shares (continued) 6 months to 30 Number September 2014
12 months to Number
31 March 2014
of Shares
(Unaudited)
of Shares
(Audited)
000's
$'000
000's
$'000
1,582
1,860
1,373
979
384
2,000
-
-
261
2,779
209
820
Issue of shares to Pushpay Trustees Limited
4
-
-
-
Share issue costs
-
(26)
-
(4)
Capital raised on employee share scheme allotment
-
-
-
65
2,231
6,613
1,582
1,860
40,500
-
9,000
9,000
500
500
Share issue costs
-
(25)
Capital raised on employee share scheme allotment
-
289
50,000
16,377
Notes
Balance as at 31 March 2014 Movements during the period Preference shares converted to ordinary shares Issue of shares
Balance prior to share subdivision 3 June 2014 Share subdivision 3 June 2014 -18.1554 per 1 share Issue of shares Issue of shares – purchase Run the Red Limited
Balance at 30 September 2014
The paid up capital comprises ordinary shares. The total number of ordinary shares on issue as at 30 September 2014 was 50,000,000 shares. The shares have no par value. All ordinary shares rank equally with one vote attached to each fully paid ordinary share. Preference shares At 1 April 2014 the company had 383,679 preference shares on issue at a total value of $2,000,000 classified as liabilities. On 26 May 2014 these shares were converted to ordinary shares and re-classified as equity at a rate of one ordinary share for each preference share. They rank equally with ordinary shares in all respects. 6. Share based payments In April 2013 the Group established an employee share scheme that entitles selected directors, executives and employees to purchase shares in the Company. In August 2014 this scheme was disestablished and replaced by a new scheme. Under this scheme the ordinary shares in Pushpay Holdings Limited are issued to a Trustee, Pushpay Trustee Limited, a wholly owned subsidiary and allocated to participants on a grant date using funds lent to them by the company. All shares are held by the Trustee in accordance with the rules and trust deed of the scheme.
Page
8
Pushpay Holdings Limited Condensed Notes to the Unaudited Interim Financial Statements For the six months ended 30 September 2014 (continued)
Unaudited Interim Financial Statements
Pushpay Holdings Limited
6. Share based payments (continued) During the six month period ended 30 September 2014 the number and grant price is as follows:Issue Price
Total on issue at 31 March 2014
Number of Shares
86,380
Granted during the period
6.22
27,116
Granted during the period
10.68
8,492 121,988
Share subdivision 3 June 2014 -18.1554 per 1 share
2,214,736
Less transferred to employees in period
756,527
Total at 30 September 2014
1,458,209
The fair value of services received in return for the shares granted is based on the fair value of shares granted and Black Scholes model with the following inputs:Issue date – (adjusted for share subdivision)
01/04/2014
11/04/2014
0.063 - 0.198
0.108 - 0.263
0.343
0.588
Expected volatility
40%
40%
Risk free interest rate
3.5%
3.5%
Estimated fair value per share at granted date Exercise price per share
Expected volatility was estimated by reference to the volatility of listed equity securities for businesses of a similar nature to the Company operating in the technology industry. 7. Segment reporting The Company is organised into one operating segment, providing the development and deployment of mobile commerce and payment solutions and text mobile messaging services. The segment result is reflected in the financial statements. The Company operated principally in New Zealand during the six months ended 30 September 2014. It also has a presence in the US and Australia. 8. Related Parties 1) Independent director’s fees Independent director’s fees have been paid to Bruce Gordon during the period of $17,500. 2) Share transactions On 11 April 2014 new capital was raised totalling $2,778,910. The following directors participated in this issue:•
Bruce Gordon through associated party in East Street Trust: $125,000
•
Christopher Huljich through beneficial ownership in Christopher & Banks Private Equity V Limited: $1,008,280 Page
9
Pushpay Holdings Limited Condensed Notes to the Unaudited Interim Financial Statements For the six months ended 30 September 2014 (continued)
Unaudited Interim Financial Statements
Pushpay Holdings Limited
8. Related Parties (continued) •
Christopher Huljich through beneficial related ownership in other entities: $780,000
•
Rodney Macdonald through beneficial related ownership in Sol Solis Trust: $120,160
On 4 July 2014 new capital was raised totaling $9,000,000. The following directors participated in this issue:•
Christopher Huljich through beneficial ownership in Christopher & Banks Private Equity V Limited: $2,201,000
•
Christopher Huljich through beneficial related ownership in other entities: $1,969,000
On 9 May 2014 Christopher & Banks Private Equity V Limited entered into an underwriting agreement with the Company to underwrite a capital raise of $9,000,000. On 11 June 2014 Pushpay Trustees Limited transferred the following shares to the following directors as beneficial owners:•
Bruce Gordon through beneficial ownership in Geelong Investments Limited: 137,109 shares
•
Christopher Heaslip through beneficial ownership in Dorchester Trust: 263,843 shares
•
Eliot Crowther through beneficial ownership in Crowther Family Trust: 263,843 shares
3) Remuneration Key management personnel are defined as those persons having authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly and include the Chief Executive and his direct reports. The following summarises remuneration paid to key management personnel:-
Directors fees Short term employee benefits
6 months to 30
6 months to 30
September 2014
September 2013
(Unaudited) $'000
(Unaudited) $'000
17
-
559
157
9. Business Combination On 15 May 2014 Pushpay Holdings Limited entered into an agreement for the purchase of all the assets from a text messaging service company, Run the Red Limited for settlement on 31 May 2014. Consideration was to be a maximum of $5,000,000 based on several variables and although the final purchase price will not be known until 30 May 2015, Pushpay has determined that the maximum purchase price will now be no more than $4,500,000. The business delivers over 150 million texts and other mobile messages per annum in New Zealand and other countries and enables the company to deliver integrated mobile commerce communication and payments solutions to customers. The purchase price was satisfied or will be satisfied in cash from existing sources and the issue of new capital.
Page
10
Pushpay Holdings Limited Condensed Notes to the Unaudited Interim Financial Statements For the six months ended 30 September 2014 (continued)
Unaudited Interim Financial Statements
Pushpay Holdings Limited
9. Business Combination (continued) Assets were purchased at fair value consisted of: Fixed assets
$’000
74
Intellectual property
1,202
Customer contracts
680
Brand name
433
Deferred tax liabilities
(312)
Total identifiable net assets
2,077
Goodwill
2,423
Total consideration paid or payable
4,500
Consideration was paid or is payable in: Cash (paid)
3,600
Shares issued 4 July 2014
500
Deferred payment amount subject to completion of supplier assignment
400 4,500
The goodwill arising from the acquisition reflects expected future synergies, integration and growth prospects of Run the Red Limited. The business contributed sales revenue and a net profit after tax to the Consolidated Statement of Comprehensive Income since acquisition of $1,155,000 and $302,000 respectively. Had the business been acquired at 1 April 2014 the sales revenue and net profit after tax are estimated at $1,750,000 and $380,000 respectively. 10. Transactions involving not for profit activity Part of Run the Red Limited’s activities involves the collection of charity revenues for on-forwarding to registered charities and organisations. As at 30 September 2014 the following balances relating to charities were included in these classifications:30 September 2014
31 March 2014
(Unaudited) $'000
(Audited) $'000
Cash and cash equivalents
247
-
Trade and other receivables
238
-
Trade and other payables
297
-
Page
11
Unaudited Interim Financial Statements
Pushpay Holdings Limited
Pushpay Holdings Limited Condensed Notes to the Unaudited Interim Financial Statements For the six months ended 30 September 2014 (continued) 11. Reconciliation of net (loss) with cash flows from operating activities
Notes
6 months to 30
6 months to 30
September 2014
September 2013
(Unaudited) $'000
(Unaudited) $'000
(2,572)
(571)
Net (loss) for the period Adjustments for non-cash items: Depreciation
4
29
4
Amortisation of development costs and intangibles
4
228
25
35
-
Share based payment expense Deferred tax benefit
(312)
-
(2,592)
(542)
(1,331)
(56)
1,138
89
Movements in working capital: Accounts receivable Accounts payable and accruals Net cash (outflow) from operating activities
(193)
33
(2,785)
(509)
12. Contingent liabilities As at balance date there were no material contingent liabilities. (2013: nil). 13. Capital commitments and operating lease commitments As at balance date there were no material capital commitments. (2013: nil). Non-cancellable operating lease commitments are:-
Notes
Less than one year After one year but not more than five years
6 months to 30
6 months to 30
September 2014
September 2013
(Unaudited) $'000
(Unaudited) $'000
333
-
1,493
-
1,826
-
14. Subsequent Events There were no material events subsequent to the balance date.
Page
12
Directory Company Number
3481675
Registered Office
Ground Floor, Microsoft House
Unaudited Interim Financial Statements
Pushpay Holdings Limited
22 Viaduct Harbour Avenue Auckland 1010 New Zealand +64 9 442 5040
Solicitor
Buddle Findlay Level 18, PwC Tower 188 Quay Street Auckland 1010 New Zealand +64 9 358 2555
Auditor
Deloitte Level 18, Deloitte Centre 80 Queen Street Auckland 1010 New Zealand +64 9 303 0700
Accountant
Battley & Johnson Level 4, 3 Ferncroft Street Grafton Auckland 1010 New Zealand +64 9 379 3900
Share Registrar
Link Market Services Limited Level 7, Zurich House 21 Queen Street Auckland 1010 New Zealand +64 9 375 5998
Directors of Pushpay
Bruce Patrick Gordon Christopher Peter Huljich Douglas David Kemsley Christopher Heaslip Rodney John Macdonald Eliot Barry Crowther
Website
www.pushpay.com
Page
13
Pushpay Holdings Limited Consolidated Statement of Comprehensive Income For the six months ended 30 September 2014
Notes
6 months
6 months
30 September 2014
30 September 2013
(Unaudited) $’000
(Unaudited) $’000
1,519
90
94
-
1,613
90
(4,497)
(661)
(2,884)
(571)
312
-
(2,572)
(571)
(145)
3
(2,717)
(568)
(6.77)
(2.48)
Unaudited Interim Financial Statements
Pushpay Holdings Limited
Revenue Operating Revenue Other Income Total Revenue and Other Income Operating Expenses
4
Operating loss before income tax Income tax benefit Operating loss for the period after tax Other comprehensive income Items that may be reclassified subsequently to profit or loss: Translation of foreign operations Total comprehensive loss for the period attributable to the shareholders of the company (Loss) per share Basic (loss) per share (cents) Calculated on a weighted average basis of the number of shares on issue. Adjusted for share subdivision on 3 June 2014.
The accompanying notes form part of these financial statements. Page
2
Unaudited Interim Financial Statements
Pushpay Holdings Limited
Pushpay Holdings Limited Consolidated Statement of Changes in Equity For the six months ended 30 September 2014 Share Foreign
Based
Share
Currency
Payment
Accumulated
Total
Capital
Reserve
Reserve
Losses
Equity
$'000
$'000
$'000
$'000
$'000
979
5
-
(573)
411
Loss for the period
-
-
-
(571)
(571)
Currency translation movements
-
3
-
-
3
979
8
-
(1,144)
(157)
520
-
-
-
520
-
-
-
-
-
Balance as at 30 September 2013 (unaudited)
1,499
8
-
(1,144)
363
Balance at 1 April 2014 (audited)
1,860
39
92
(2,211)
(220)
Loss for the period
-
-
-
(2,572)
(2,572)
Currency translation movements
-
(145)
-
-
(145)
1,860
(106)
92
(4,783)
(2,937)
Issue of shares
12,568
-
-
-
12,568
Conversion of preference shares
2,000
-
-
-
2,000
(51)
-
-
-
(51)
-
-
35
-
35
16,377
(106)
127
(4,783)
11,615
Notes
Balance at 1 April 2013 (unaudited) Comprehensive loss
Total comprehensive income Transactions with owners Issue of shares Capital raising costs
Comprehensive loss
Total comprehensive income Transactions with owners
Capital raising costs Share based payments Balance as at 30 September 2014 (unaudited)
The accompanying notes form part of these financial statements. Page
3
Pushpay Holdings Limited Consolidated Statement of Financial Position As at 30 September 2014
Notes
30 September 2014
31 March 2014
(Unaudited) $'000
(Audited) $'000
5,599
2,746
75
-
Unaudited Interim Financial Statements
Pushpay Holdings Limited
Assets Current assets Cash and cash equivalents Restricted cash balance Trade and other receivables
1,516
185
Total current assets
7,190
2,931
295
64
Intangible assets
6,043
803
Total non-current assets
6,338
867
13,528
3,798
1,790
351
123
24
Preference shares
-
2,000
Capital contributions in advance
-
1,643
1,913
4,018
-
-
1,913
4,018
11,615
(220)
16,377
1,860
(106)
39
127
92
(4,783)
(2,211)
11,615
(220)
Non-current assets Property, plant and equipment
Total assets Liabilities Current liabilities Trade and other payables Employee benefits
Total current liabilities Total non-current liabilities Total liabilities Net assets / (liabilities) Equity Share capital
5
Foreign currency translation reserve Share based payment reserve Accumulated losses Total equity
The accompanying notes form part of these financial statements. Page
4
Unaudited Interim Financial Statements
Pushpay Holdings Limited
Pushpay Holdings Limited Consolidated Statement of Cash Flows For the six months ended 30 September 2014
Notes
6 months to
6 months to
30 September 2014
30 September 2013
(Unaudited) $'000
(Unaudited) $'000
578
60
68
-
(3,431)
(569)
(2,785)
(509)
-
2
Cash flows from operating activities Cash was provided from (applied to): Receipts from customers Interest received Payment to suppliers & employees Net cash (outflow) from operating activities
11
Cash flows from investing activities Cash was provided from (applied to): Proceeds from sale of fixed assets Purchase of property, plant and equipment
(186)
(2)
Capitalised development costs and intangible assets
(730)
(295)
(3,600)
-
(75)
-
(4,591)
(295)
10,374
520
-
22
Purchase of business – Run the Red Limited Restricted cash balance Net cash (outflow) from investing activities Cash flows from financing activities Cash was provided from (applied to): Issue of ordinary shares (net of costs) Proceeds from shareholder advances Net cash inflow from financing activities
10,374
542
Net increase/(decrease) in cash held
2,998
(262)
Foreign currency translation adjustment
(145)
3
Add cash and cash equivalents at start of period
2,746
271
Balance at end of period
5,599
12
5,599
12
Comprised of: Cash and cash equivalents
The accompanying notes form part of these financial statements. Page
5
Pushpay Holdings Limited Condensed Notes to the Unaudited Interim Financial Statements For the six months ended 30 September 2014
Unaudited Interim Financial Statements
Pushpay Holdings Limited
1. Corporate Information Pushpay Holdings Limited is a limited liability company (the “Company”), domiciled and incorporated in New Zealand and registered under the New Zealand Companies Act 1993 and listed on the NZX Alternative Market. The registered office of the Company is Ground floor Microsoft House, 22 Viaduct Harbour Avenue, Auckland 1010, New Zealand. The unaudited interim financial statements presented are for Pushpay Holdings Limited and its subsidiaries (together “the Group”) for the six months ended 30 September 2014. These statements were authorised for issue in accordance with a resolution of the Directors on 13 November 2014. The Group’s principal activity is the provision of a platform for mobile commerce and electronic payments and tools for merchants to engage with consumers. 2. Basis of preparation These general purpose financial statements for the six months ended 30 September 2014 have been prepared in accordance with NZ IAS 34, Interim Financial Reporting. In complying with NZ IAS 34, these interim financial statements also comply with IAS 34 interim financial reporting. These interim financial statements do not include all the notes of the type normally included in an annual financial report. Accordingly, this report should be read in conjunction with the audited financial statements of Pushpay Holdings Limited and its Subsidiaries for the period ended 31 March 2014 which have been prepared in accordance with the New Zealand equivalents to International Financial Reporting Standards (NZ IFRS) and International Financial Reporting Standards (IFRS). The Company is designated as profit-oriented entity and an issuer for the purposes of the Financial Reporting Act 2013. All significant accounting policies have been applied on a basis consistent with those used in the audited financial statements of Pushpay Holdings Limited and its Subsidiaries for the period ended 31 March 2014. The financial statements are presented in thousands of New Zealand dollars. 3. Additional accounting policies subsequent to 31 March 2014 Consolidation Subsidiaries are fully consolidated from the date on which control is transferred to the parent. The acquisition method of accounting is used to account for the acquisition of subsidiaries by the parent. The consideration transferred for an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange. Costs directly attributable to the acquisition are expensed in the income statement. Inter-company transactions, balances and unrealised gains and losses on transactions between Group companies are eliminated. Goodwill Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any noncontrolling interests in the acquiree and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any Page
6
Unaudited Interim Financial Statements
Pushpay Holdings Limited
Pushpay Holdings Limited Condensed Notes to the Unaudited Interim Financial Statements For the six months ended 30 September 2014 (continued) 3. Additional accounting policies subsequent to 31 March 2014 (continued) non-controlling interests in the acquiree and the fair value of the acquirer’s previously held interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain. Goodwill is not amortised but is reviewed for impairment at least annually. For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period. On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on disposal. 4. Expenses
Notes
6 months to 30
6 months to 30
September 2014
September 2013
(Unaudited) $'000
(Unaudited) $'000
228
25
Operating expenses include: Amortisation of intangible assets Depreciation Employee benefits/entitlements Share based payments
29
4
1,855
389
35
-
5. Share capital & shares Share capital
Number of Shares Notes
12 months to
Number
31 March 2014 of Shares
12 months to 31 March 2013
000's
(Audited) $'000
000's
(Unaudited) $'000
1,373
979
1,000
80
209
820
236
929
Share issue costs
-
(4)
-
(30)
Capital raised on employee share scheme allotment
-
65
-
-
Issue of shares to Pushpay Trustees Limited
-
-
137
-
1,582
1,860
1,373
979
Balance at 1 April 2013 Movements during the period Issue of shares
Balance as at 31 March 2014
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Unaudited Interim Financial Statements
Pushpay Holdings Limited
Pushpay Holdings Limited Condensed Notes to the Unaudited Interim Financial Statements For the six months ended 30 September 2014 (continued) 5. Share capital & shares (continued) 6 months to 30 Number September 2014
12 months to Number
31 March 2014
of Shares
(Unaudited)
of Shares
(Audited)
000's
$'000
000's
$'000
1,582
1,860
1,373
979
384
2,000
-
-
261
2,779
209
820
Issue of shares to Pushpay Trustees Limited
4
-
-
-
Share issue costs
-
(26)
-
(4)
Capital raised on employee share scheme allotment
-
-
-
65
2,231
6,613
1,582
1,860
40,500
-
9,000
9,000
500
500
Share issue costs
-
(25)
Capital raised on employee share scheme allotment
-
289
50,000
16,377
Notes
Balance as at 31 March 2014 Movements during the period Preference shares converted to ordinary shares Issue of shares
Balance prior to share subdivision 3 June 2014 Share subdivision 3 June 2014 -18.1554 per 1 share Issue of shares Issue of shares – purchase Run the Red Limited
Balance at 30 September 2014
The paid up capital comprises ordinary shares. The total number of ordinary shares on issue as at 30 September 2014 was 50,000,000 shares. The shares have no par value. All ordinary shares rank equally with one vote attached to each fully paid ordinary share. Preference shares At 1 April 2014 the company had 383,679 preference shares on issue at a total value of $2,000,000 classified as liabilities. On 26 May 2014 these shares were converted to ordinary shares and re-classified as equity at a rate of one ordinary share for each preference share. They rank equally with ordinary shares in all respects. 6. Share based payments In April 2013 the Group established an employee share scheme that entitles selected directors, executives and employees to purchase shares in the Company. In August 2014 this scheme was disestablished and replaced by a new scheme. Under this scheme the ordinary shares in Pushpay Holdings Limited are issued to a Trustee, Pushpay Trustee Limited, a wholly owned subsidiary and allocated to participants on a grant date using funds lent to them by the company. All shares are held by the Trustee in accordance with the rules and trust deed of the scheme.
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8
Pushpay Holdings Limited Condensed Notes to the Unaudited Interim Financial Statements For the six months ended 30 September 2014 (continued)
Unaudited Interim Financial Statements
Pushpay Holdings Limited
6. Share based payments (continued) During the six month period ended 30 September 2014 the number and grant price is as follows:Issue Price
Total on issue at 31 March 2014
Number of Shares
86,380
Granted during the period
6.22
27,116
Granted during the period
10.68
8,492 121,988
Share subdivision 3 June 2014 -18.1554 per 1 share
2,214,736
Less transferred to employees in period
756,527
Total at 30 September 2014
1,458,209
The fair value of services received in return for the shares granted is based on the fair value of shares granted and Black Scholes model with the following inputs:Issue date – (adjusted for share subdivision)
01/04/2014
11/04/2014
0.063 - 0.198
0.108 - 0.263
0.343
0.588
Expected volatility
40%
40%
Risk free interest rate
3.5%
3.5%
Estimated fair value per share at granted date Exercise price per share
Expected volatility was estimated by reference to the volatility of listed equity securities for businesses of a similar nature to the Company operating in the technology industry. 7. Segment reporting The Company is organised into one operating segment, providing the development and deployment of mobile commerce and payment solutions and text mobile messaging services. The segment result is reflected in the financial statements. The Company operated principally in New Zealand during the six months ended 30 September 2014. It also has a presence in the US and Australia. 8. Related Parties 1) Independent director’s fees Independent director’s fees have been paid to Bruce Gordon during the period of $17,500. 2) Share transactions On 11 April 2014 new capital was raised totalling $2,778,910. The following directors participated in this issue:•
Bruce Gordon through associated party in East Street Trust: $125,000
•
Christopher Huljich through beneficial ownership in Christopher & Banks Private Equity V Limited: $1,008,280 Page
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Pushpay Holdings Limited Condensed Notes to the Unaudited Interim Financial Statements For the six months ended 30 September 2014 (continued)
Unaudited Interim Financial Statements
Pushpay Holdings Limited
8. Related Parties (continued) •
Christopher Huljich through beneficial related ownership in other entities: $780,000
•
Rodney Macdonald through beneficial related ownership in Sol Solis Trust: $120,160
On 4 July 2014 new capital was raised totaling $9,000,000. The following directors participated in this issue:•
Christopher Huljich through beneficial ownership in Christopher & Banks Private Equity V Limited: $2,201,000
•
Christopher Huljich through beneficial related ownership in other entities: $1,969,000
On 9 May 2014 Christopher & Banks Private Equity V Limited entered into an underwriting agreement with the Company to underwrite a capital raise of $9,000,000. On 11 June 2014 Pushpay Trustees Limited transferred the following shares to the following directors as beneficial owners:•
Bruce Gordon through beneficial ownership in Geelong Investments Limited: 137,109 shares
•
Christopher Heaslip through beneficial ownership in Dorchester Trust: 263,843 shares
•
Eliot Crowther through beneficial ownership in Crowther Family Trust: 263,843 shares
3) Remuneration Key management personnel are defined as those persons having authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly and include the Chief Executive and his direct reports. The following summarises remuneration paid to key management personnel:-
Directors fees Short term employee benefits
6 months to 30
6 months to 30
September 2014
September 2013
(Unaudited) $'000
(Unaudited) $'000
17
-
559
157
9. Business Combination On 15 May 2014 Pushpay Holdings Limited entered into an agreement for the purchase of all the assets from a text messaging service company, Run the Red Limited for settlement on 31 May 2014. Consideration was to be a maximum of $5,000,000 based on several variables and although the final purchase price will not be known until 30 May 2015, Pushpay has determined that the maximum purchase price will now be no more than $4,500,000. The business delivers over 150 million texts and other mobile messages per annum in New Zealand and other countries and enables the company to deliver integrated mobile commerce communication and payments solutions to customers. The purchase price was satisfied or will be satisfied in cash from existing sources and the issue of new capital.
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Pushpay Holdings Limited Condensed Notes to the Unaudited Interim Financial Statements For the six months ended 30 September 2014 (continued)
Unaudited Interim Financial Statements
Pushpay Holdings Limited
9. Business Combination (continued) Assets were purchased at fair value consisted of: Fixed assets
$’000
74
Intellectual property
1,202
Customer contracts
680
Brand name
433
Deferred tax liabilities
(312)
Total identifiable net assets
2,077
Goodwill
2,423
Total consideration paid or payable
4,500
Consideration was paid or is payable in: Cash (paid)
3,600
Shares issued 4 July 2014
500
Deferred payment amount subject to completion of supplier assignment
400 4,500
The goodwill arising from the acquisition reflects expected future synergies, integration and growth prospects of Run the Red Limited. The business contributed sales revenue and a net profit after tax to the Consolidated Statement of Comprehensive Income since acquisition of $1,155,000 and $302,000 respectively. Had the business been acquired at 1 April 2014 the sales revenue and net profit after tax are estimated at $1,750,000 and $380,000 respectively. 10. Transactions involving not for profit activity Part of Run the Red Limited’s activities involves the collection of charity revenues for on-forwarding to registered charities and organisations. As at 30 September 2014 the following balances relating to charities were included in these classifications:30 September 2014
31 March 2014
(Unaudited) $'000
(Audited) $'000
Cash and cash equivalents
247
-
Trade and other receivables
238
-
Trade and other payables
297
-
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Unaudited Interim Financial Statements
Pushpay Holdings Limited
Pushpay Holdings Limited Condensed Notes to the Unaudited Interim Financial Statements For the six months ended 30 September 2014 (continued) 11. Reconciliation of net (loss) with cash flows from operating activities
Notes
6 months to 30
6 months to 30
September 2014
September 2013
(Unaudited) $'000
(Unaudited) $'000
(2,572)
(571)
Net (loss) for the period Adjustments for non-cash items: Depreciation
4
29
4
Amortisation of development costs and intangibles
4
228
25
35
-
Share based payment expense Deferred tax benefit
(312)
-
(2,592)
(542)
(1,331)
(56)
1,138
89
Movements in working capital: Accounts receivable Accounts payable and accruals Net cash (outflow) from operating activities
(193)
33
(2,785)
(509)
12. Contingent liabilities As at balance date there were no material contingent liabilities. (2013: nil). 13. Capital commitments and operating lease commitments As at balance date there were no material capital commitments. (2013: nil). Non-cancellable operating lease commitments are:-
Notes
Less than one year After one year but not more than five years
6 months to 30
6 months to 30
September 2014
September 2013
(Unaudited) $'000
(Unaudited) $'000
333
-
1,493
-
1,826
-
14. Subsequent Events There were no material events subsequent to the balance date.
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Directory Company Number
3481675
Registered Office
Ground Floor, Microsoft House
Unaudited Interim Financial Statements
Pushpay Holdings Limited
22 Viaduct Harbour Avenue Auckland 1010 New Zealand +64 9 442 5040
Solicitor
Buddle Findlay Level 18, PwC Tower 188 Quay Street Auckland 1010 New Zealand +64 9 358 2555
Auditor
Deloitte Level 18, Deloitte Centre 80 Queen Street Auckland 1010 New Zealand +64 9 303 0700
Accountant
Battley & Johnson Level 4, 3 Ferncroft Street Grafton Auckland 1010 New Zealand +64 9 379 3900
Share Registrar
Link Market Services Limited Level 7, Zurich House 21 Queen Street Auckland 1010 New Zealand +64 9 375 5998
Directors of Pushpay
Bruce Patrick Gordon Christopher Peter Huljich Douglas David Kemsley Christopher Heaslip Rodney John Macdonald Eliot Barry Crowther
Website
www.pushpay.com
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