Slovar Limited — Interim / Quarterly Report 2012

Feb 28, 2012

MONEY3 CORPORATION LIMITED
(ABN: 63 117 296 143)
HALF YEAR FINANCIAL REPORT
31 December 2011
APPENDIX 4D

Head Office:
Unit 4, 60-70 Mahoneys Road
Thomastown VIC 3074

Registered Office:
Level 1, 48 High Street
Northcote VIC 3070

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MONEY3 Corporation Limited
half year ended 31 December 2011

APPENDIX 4D

Half Year Report to the Australian Stock Exchange

Name of Entity	Money3 Corporation Limited
ABN	63 117 296 143
Half Year Ended	31 December 2011
Previous Corresponding Reporting Period	31 December 2010

Results for Announcement to the Market

		$	Percentage increase /(decrease) over previous corresponding period
Revenue from ordinary activities		7,075,450	5.61%
Profit from ordinary activities after tax attributable to members		1,037,576	(16.27%)
Net profit for the period attributable to members		1,037,576	(16.27%)
Dividends (distributions)	Amount per security		Franked amount per security
Final Dividend	2.5 cents (paid on 28/10/11)		2.5 cents
Interim Dividend	1.75 cents		1.75 cents
Record date for determining entitlements to the dividends (if any)		16 March 2012
Brief explanation of any of the figures reported above necessary to enable the figures to be understood: For an explanation of revenue and profit from continuing operations, see commentary on results included in the accompanying preliminary final report.

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MONEY3 Corporation Limited
half year ended 31 December 2011

Dividends

Date the dividend is payable	27 April 2012
Record date to determine entitlement to the dividend	16 March 2012
Amount per security	1.75 cents
Total dividend	$756,638
Amount per security of foreign sourced dividend or distribution	N/A
Dividend reinvestment plans in operation	Yes
The last date for receipt of an election notice for participation in any dividend reinvestment plans	29 March 2012

NTA Backing

	Current Period	Previous corresponding period
Net tangible asset backing per ordinary security (cents per share)	34.6	33.4

Control Gained Over Entities Having Material Effect

Name of entity (or group of entities)	N/A
Date control gained	N/A
Profit / (loss) from ordinary activities after tax of the controlled entity since the date in the current period on which control was acquired.	N/A
Profit / (loss) from ordinary activities after tax of the controlled entity (or group of entities) for the whole of the previous corresponding period.	N/A

Loss of Control Gained Over Entities Having Material Effect

Name of entity (or group of entities)	N/A

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MONEY3 Corporation Limited
half year ended 31 December 2011

Details of Associates and Joint Venture Entities

Name of Entity (or group of entities)	N/A

Foreign Entities Accounting Framework

| For foreign entities provide details of which accounting standards have been adopted (e.g. International Accounting Standards)
N/A |
| --- |

Audit/Review Status

| This report is based on accounts to which one of the following applies:
(Tick one) | | | |
| --- | --- | --- | --- |
| The accounts have been audited | | The accounts have been subject to review | ☑ |
| If the accounts are subject to audit dispute or qualification, a description of the dispute or qualification: N/A | | | |

Attachments Forming Part of Appendix 4E

Attachment #	Details
1	Half Year Financial Report
2	Independent Auditor’s Review Report
Signed By (Director/Company Secretary)
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Print Name
Date

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MONEY3 Corporation Limited
half year ended 31 December 2011

DIRECTORS' REPORT

The Directors of Money3 are pleased to announce a solid first half of the 2011/2012 financial year, delivering $7,075,450 in revenue and $1,037,576 of net profit after tax.

In the first half of the year the company incurred a significant number of one off costs which have impacted on the result which is 16.2% below last year, Similar costs are not expected to be incurred in the second half. The costs include:

• Legal and professional fees regarding legislation issues $125,000
• New branch rollout costs $154,000

The Directors have resolved to pay a dividend of 1.75 cents per share which is unchanged to the previous half.

Directors

The following persons were directors of Money3 Corporation Limited during or since the end of the half year are:

• Geoff Joseph Sam - Chairman and Non-Executive Director
• Bettina Evert - Non Executive Director
• Robert James Bryant - Chief Executive Officer and Executive Director
• Kang Hong Tan - Non Executive Director
• Christopher James Baldwin - Non Executive Director
• Scott Joseph Baldwin - Chief Operation Officer and Executive Director

None of the Company's Directors hold directorships in other listed companies.

Principal Activities

The principal activities of the consolidated entity during the period were providing financial services specialising in the delivery of small cash loans, personal loans, vehicle financing, equipment rental, cheque cashing and international money transfer. There has been no significant change in nature of principal activities during the financial period.

Financial Review

Money3's revenue for the half year ended 31 December 2011 was $7,075,450 a 5.61% increase on the previous corresponding half year's revenue of $6,699,571.

Money3's net profit after tax for the half year ended 31 December 2011 was $1,037,576 compared to the previous corresponding half year's profit of $1,239,270.

Basic earnings per share have decreased to 2.46 cents per share compared to the previous half of 3.90 cents per share. This decrease is largely due to the additional shares issue as part of the rights issue in February 2011.

Funds that were raised in February 2011 via a rights issue have been used to write longer term loans resulting in the loan receivables increasing by $2.7m.

Net tangible assets have increased to 34.6m from 33.4m.

Review of operations

Money3 has continued to expand and consolidate its business over the six months ended 31 December 2011. In the first six months the Company opened 9 new stores, 4 Greenfield sites and 5 via the acquisition of Personal Finance Co. The Company will see the benefits from these branches in the second half of the year. The company has also set up a rental division and launched its first product in October 2011 being the vehicle rental product. The Company expects that the rental division will complement our customers' needs and is expecting significant grow in this product.

Regulatory Environment

Money3 welcomed the recommendations made by 2 Committees on Phase 2 reforms in the Consumer Credit and Corporations Legislation (Enhancements) Bill 2011 in early December 2011.

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MONEY3 Corporation Limited

half year ended 31 December 2011

DIRECTORS' REPORT

Both Committees concluded that the proposed fee caps are unworkable. The Senate committee report said "Like the Parliamentary Joint Committee, however, the committee is concerned that these provisions do not strike the right balance between consumer protection and industry viability. Further, in some cases, there appear to be unintended consequences from the provisions which may hurt consumers. There is also concern that some of the provisions may be ineffectual."

The Committees have recommended that the Government revisit key aspects of its reform package with further industry consultation.

Money3 intends to keep working with the Government and all stakeholders to achieve solutions that will be viable for the industry and provide protection for consumers.

Outlook

The outlook for the second half of the 2011/12 financial year is positive. The company expects to see strong growth for the vehicle financing and personal loan business. The company will also look for new branch expansion opportunities and is currently opening a new store in Tasmania and its first vehicle rental store in Melbourne. The company is continuing to review acquisition opportunities as they come forward, and are being assessed to grow Money3 in the financial services sector in the best interests of all stakeholders.

Auditor's independence declaration

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 7.

Signed in accordance with a resolution of directors made pursuant to s306(3) of the Corporations Act 2001.

On behalf of the directors,

Geoff Sam OAM
Chairman

Robert Bryant
CEO and Executive Director

Melbourne
28 February 2012

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MONEY3 Corporation Limited
half year ended 31 December 2011

PKF

Chartered Accountants & Business Advisers

LEAD AUDITOR'S INDEPENDENCE DECLARATION

UNDER SECTION 307C OF THE CORPORATIONS ACT 2001

To: The Directors

Money3 Corporation Limited and the entities it controlled during the year

I declare to the best of my knowledge and belief, in relation to the review of the financial half-year ended 31 December 2011 there have been:

• no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the review, and
• no contraventions of any applicable code of professional conduct in relation to the review.

R A Dean
Partner
PKF

28 February 2012
Melbourne

Tel: 61 3 9603 1700 | Fax: 61 3 9602 3870 | www.pkf.com.au
PKF | ABN 83 236 985 726
Level 14, 140 William Street | Melbourne | Victoria 3000 | Australia
GPO Box 5099 | Melbourne | Victoria 3001

The PKF East Coast Practice is a member of the PKF International Limited network of legally independent member firms. The PKF East Coast Practice is also a member of the PKF Australia Limited national network of legally independent firms each trading as PKF. PKF East Coast Practice has offices in NSW, Victoria and Brisbane. PKF East Coast Practice does not accept responsibility or liability for the actions or inactions on the part of any other individual member firm or firms.

Liability limited by a scheme approved under Professional Standards Legislation.

79860_1.DOCX

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MONEY3 Corporation Limited

half year ended 31 December 2011

Consolidated Statement of Comprehensive Income
FOR THE HALF YEAR ENDED 31 DECEMBER 2011

	Consolidated Six months ended 31 December 2011 $	Consolidated Six months ended 31 December 2010 $
Continuing Operations
Revenue (Note 2)	6,991,239	6,691,219
Other income (Note 2)	84,211	8,352
Total revenue	7,075,450	6,699,571
Expenses from operating activities:
Administration	427,899	394,136
Employment	2,906,638	2,441,766
Advertising and sales	386,779	203,033
Occupancy costs	625,151	479,669
Bad debts	624,522	896,492
Depreciation and amortisation	183,297	127,061
Communication	149,291	89,651
Legal and professional	195,423	209,043
Interest expenses	81,338	88,334
Profit before tax	1,495,112	1,770,386
Income tax expense	(457,536)	(531,116)
Net profit attributable to members	1,037,576	1,239,270
Other comprehensive income	(4,544)	-
Total comprehensive income for the period	1,033,032	1,239,270
Profit attributable to:
Owners of Money3 Corporation Limited	1,057,283	1,239,270
Non-controlling interest	(19,707)	-
	1,037,576	1,239,270
Total comprehensive income attributable to:
Owners of Money3 Corporation Limited	1,052,739	1,239,270
Non-controlling interest	(19,707)	-
	1,033,032	1,239,270
Earnings per share –continuing operations
Basic	2.46 cents	3.90 cents
Diluted	2.41 cents	3.57 cents

The above statement of comprehensive income should be read in conjunction with the attached notes.

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MONEY3 Corporation Limited

half year ended 31 December 2011

STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2011

	Consolidated 31 December 2011 $	Consolidated 30 June 2011 $
Current assets
Cash and cash equivalents	1,895,856	4,790,715
Trade and other receivables (Note 5)	10,409,973	8,251,132
Other assets	205,355	71,111
Total current assets	12,511,184	13,112,958
Non-current assets
Trade and other receivables (Note 5)	4,104,288	3,587,888
Other assets	161,555	154,195
Property, plant & equipment	2,115,794	1,677,439
Deferred tax assets	302,603	398,947
Intangible assets	15,363,487	15,351,487
Total non-current assets	22,047,727	21,169,956
Total assets	34,558,911	34,282,914
Current Liabilities
Trade and other payables	974,271	835,992
Borrowings	1,519,344	1,521,058
Current tax payables	830,390	797,899
Provisions	299,844	194,791
Total current liabilities	3,623,849	3,349,740
Non-current liabilities
Trade and other payables	181,500	280,500
Provisions	72,675	85,253
Borrowings	38,033	42,945
Total non-current liabilities	292,208	408,698
Total liabilities	3,916,057	3,758,438
Net assets	30,642,854	30,524,476
Equity
Issued Capital	26,857,665	26,701,073
Reserves	19,596	24,140
Non-controlling interest	(36,646)	(16,939)
Retained earnings	3,802,239	3,816,202
Total equity	30,642,854	30,524,476

The statement of financial position should be read in conjunction with the attached notes.

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MONEY3 Corporation Limited

half year ended 31 December 2011

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF YEAR ENDED 31 DECEMBER 2011

	Issued Capital	Accumulated Profit	Reserves	Non-controlling interest	Total
	$	$	$	$	$
At 1 July 2011	26,701,073	3,816,202	24,140	(16,939)	30,524,476
Total comprehensive income for the year	-	1,057,283	(4,544)	(19,707)	1,033,032
Transactions with owners in their capacity as owners:
Issue of shares	156,592	-	-	-	156,592
Dividend paid	-	(1,071,246)	-	-	(1,071,246)
Closing balance as at 31 December 2011	26,857,665	3,802,239	19,596	(36,646)	30,642,854
At 1 July 2010	22,726,416	2,210,054	514,301	-	25,450,771
Total comprehensive income for the year	-	1,239,270	-	-	1,239,270
Transactions with owners in their capacity as owners:
Issue of shares	110,130	-	-	-	110,130
Employee share options -value of employees service	-	-	8,480	-	8,480
Dividend paid	-	(792,712)	-	-	(792,712)
Closing balance as at 31 December 2010	22,836,546	2,656,612	522,781	-	26,015,939

The statement of changes in equity should be read in conjunction with the attached notes.

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MONEY3 Corporation Limited
half year ended 31 December 2011

CONSOLIDATED CASH FLOW STATEMENT

FOR THE HALF YEAR ENDED 31 DECEMBER 2011

	Consolidated six months ended 31 December 2011	Consolidated six months ended 31 December 2010
	$	$
Cash flows from operating activities
Receipts from customers	6,366,717	5,794,728
Payments to suppliers and employees	(4,804,246)	(3,866,745)
Interest received	84,211	8,352
Interest paid	(81,338)	(88,334)
Income tax paid	(328,702)	(397,805)
Net cash provided by operating activities	1,236,642	1,450,195
Cash flows from investing activities
Payment for property, plant and equipment	(621,654)	(151,155)
Payment for purchase of business in prior period	(12,000)	-
Proceeds from purchase of business (Note 10)	98,662	-
Net funds advanced to and repayments from customers for loans	(2,675,238)	(3,144,536)
Net cash used in investing activities	(3,210,230)	(3,295,691)
Cash flows from financing activities
Repayment of Hire Purchase	(6,626)	(4,912)
Proceeds of borrowings	-	550,000
Dividend paid	(914,645)	(682,582)
Net cash used in financing activities	(921,271)	(137,494)
Net decrease in cash held	(2,894,859)	(1,982,990)
Cash at the beginning of the period	4,790,715	2,275,755
Cash at the end of the period	1,895,856	292,765

The statement of cash flows should be read in conjunction with the attached notes.

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MONEY3 Corporation Limited
half year ended 31 December 2011

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2011

INTRODUCTION

The financial report of Money3 Corporation Limited ("Money3") for the half year ended 31 December 2011 was authorised for issue in accordance with a resolution of directors on 28 February 2011. Money3 is a company incorporated in Australia and limited by shares which are publicly traded on the Australian Stock Exchange. The financial report is presented in Australian dollars. The nature of the operations and principal activities of the Group are described in Note 6.

NOTE 1. Significant accounting policies

These general purpose financial statements for the interim half-year reporting period ended 31 December 2011 have been prepared in accordance with Australian Accounting Standard AASB 134 "Interim Financial Reporting" and the Corporations Act 2001.

These general purpose financial statements do not include all the notes of the type normally included in the annual financial statements. Accordingly, these financial statements are to be read in conjunction with the annual report for the year ended 30 June 2011 and any public announcements made by the company during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period.

New, revised or amending Accounting Standards and Interpretations adopted

The consolidated entity has adopted all new standards and / or revised standards, amendments and interpretations that are relevant to its operations and are effective for the current reporting period. The adoption of these new and revised standards, amendments and interpretations did not have a material effect on the position or performance of the consolidated entity. The consolidated entity has not elected to early adopt any other new standards, amendments and interpretations that are issued but not yet effective.

NOTE 2. Revenue

	Consolidated Six months ended 31 December 2011 $	Consolidated Six months ended 31 December 2010 $
Continuing operations:
Revenue from operating activities
Loan fees	6,423,557	6,109,107
Cheque cashing fees	463,499	454,618
Other services	104,183	127,494
	6,991,239	6,691,219
Revenue from non-operating activities
Interest income from financial institutions	84,211	8,352
Total revenue from continuing operations	7,075,450	6,699,571

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MONEY3 Corporation Limited

half year ended 31 December 2011

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE HALF YEAR ENDED 31 DECEMBER 2011

NOTE 3. Dividends

	For the six months ended 31 December 2011 $	For the six months ended 31 December 2010 $
Dividends paid during the half year on ordinary shares:	1,071,246	792,712
-Final franked dividend for the financial year ended 30 June 2011: 2.5 cents, paid on 28 October 2011 (2010: 2.5 cents)
Dividends proposed and not yet recognised as a liability:	756,638	596,904
- Interim franked dividend for the half year ended 31 December 2011: 1.75 cents, proposed to be paid on 27 April 2012 (2010: 1.75 cents)

NOTE 4. Contributed equity

	Consolidated		Consolidated
	December 2011		June 2011
	Number of ordinary shares	Value $	Number of ordinary shares	Value $
Balance at the beginning of the financial period	42,849,811	26,701,073	31,708,374	22,726,416
Issued during the year:
Issue of shares to public at $0.366 each	-	-	10,659,153	3,943,886
Share issue costs	-	-	-	(255,817)
Deferred tax credit	-	-	-	76,745
Issue of shares to employees at $0.37 each	-	-	40,545	15,000
Issue of shares on DRP	386,648	156,592	441,739	194,843
Balance at end of the financial period	43,236,459	26,857,665	42,849,811	26,701,073

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MONEY3 Corporation Limited
half year ended 31 December 2011

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2011

NOTE 5. Trade and other receivables

	Consolidated 31 December 2011 $	Consolidated 30 June 2011 $
Current receivables	10,409,973	8,251,132
Non-current receivables	4,104,288	3,587,888
Total receivables	14,514,261	11,839,020
Net trade receivables	14,945,390	12,536,144
Allowance for doubtful debts	(431,129)	(697,124)
	14,514,261	11,839,020

Net trade receivables are initially recognised at fair value, and subsequently carried at amortised cost using the effective interest rate method, which represents the gross amount to be received from customers less deferred revenue relating to application, credit and monthly account keeping fees charged on personal loans.

NOTE 6. Segment information

A segment is a component of the consolidated entity that engages in business activities to provide products or services within a particular economic environment. The consolidated entity operates in one business segment, being providing financial services specialising in the delivery of small cash loans, personal loans, cheque cashing and international money transfer. The board of directors assess the operating performance of the group based on management reports that are prepared on this basis. The group has established activities in one significant geographical area, being Australia.

NOTE 7. Contingent liabilities

The Company has no contingent liabilities as at 31 December 2011

NOTE 8. Future commitments

The Company has no new future commitments as at 31 December 2011

NOTE 9. Subsequent events

No significant events have occurred since balance date which would impact on the financial position of the Company.

NOTE 10. Acquisition

The company purchased the business of Personal Finance Co. Pty Ltd on the 1 December 2011 for nil consideration. The vendor made a payment to the company for employee entitlements to the value of $98,662, other net assets were valued at nil. There are payments to be made to the vendor based on existing customers applying for and receiving a loan from Money3 within 12 months of the purchase date in the form of a referral fee. The maximum amount to be paid under this arrangement is $125,000.

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MONEY3 Corporation Limited

half year ended 31 December 2011

DIRECTORS DECLARATION

The Directors of Money3 Corporation Limited declare that they are of the opinion that:

(a) the financial statements and notes of the consolidated entity are in accordance with the Corporations Act 2001, including:

I. giving a true and fair view of the consolidated entity's financial position as at 31 December 2011 and of its performance for the half year ended on that date as represented by the results of its operations, changes in equity and its cash flows, for the half year ended on that date; and

II. comply with Accounting Standards AASB 134 "Interim Financial Reporting" and the Corporations Regulations 2001; and

(b) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

Signed in accordance with the resolution of the directors made pursuant to Section 303(5) of the Corporations Act 2001

On behalf of the directors.

Geoff Sam OAM
Chairman

Robert Bryant
Executive Director

Melbourne
28 February 2012

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MONEY3 Corporation Limited
half year ended 31 December 2011

INDEPENDENT AUDITOR'S REVIEW REPORT TO THE MEMBERS OF MONEY3 CORPORATION LIMITED

Chartered Accountants & Business Advisers

Report on the Half-Year Financial Report

We have reviewed the accompanying consolidated half-year financial report of Money3 Corporation Limited which comprises the statements of financial position as at 31 December 2011, the statements of comprehensive income, statements of changes in equity and statements of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors' declaration of the consolidated entity. The consolidated entity comprises Money3 Corporation Limited (the company) and the entities it controlled at 31 December 2011 or from time to time during the half-year ended on that date.

Directors' Responsibility for the Half-Year Financial Report

The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error.

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 a 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 is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity's financial position as at 31 December 2011 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 Money3 Corporation Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, 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.

Independence

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 the consolidated entity 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 2011 and of its performance for the half-year ended on that date; and
(b) complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations 2001.

PKF

28 February 2012
Melbourne

R A Dean
Partner

Tel: 61 3 9603 1700 | Fax: 61 3 9602 3870 | www.pkf.com.au
PKF | ABN 83 236 985 726
Level 14, 140 William Street | Melbourne | Victoria 3000 | Australia
GPO Box 5099 | Melbourne | Victoria 3001

The PKF East Coast Practice is a member of the PKF International Limited network of legally independent member firms. The PKF East Coast Practice is also a member of the PKF Australia Limited national network of legally independent firms each trading as PKF. PKF East Coast Practice has offices in NSW, Victoria and Brisbane. PKF East Coast Practice does not accept responsibility or liability for the actions or inactions on the part of any other individual member firm or firms.

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