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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Access Intelligence Plc | LSE:ACC | London | Ordinary Share | GB00BGQVB052 | ORD 5P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 53.00 | 52.00 | 54.00 | 53.00 | 53.00 | 53.00 | 0.00 | 08:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Computer Related Svcs, Nec | 65.71M | -4.19M | -0.0328 | -16.16 | 67.68M |
TIDMACC
RNS Number : 7849D
Access Intelligence PLC
02 May 2017
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement via a Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.
2 May 2017
ACCESS INTELLIGENCE PLC
("Access Intelligence", "the Company" or "the Group")
FINAL RESULTS FOR THE YEARED 30 NOVEMBER 2016
Access Intelligence Plc (AIM: ACC), a leader in corporate communications and reputation management software, announces its final results for the year ended 30 November 2016.
Strategic Highlights:
-- Group now focused solely on corporate communications and reputation management. Three non-core business divestments completed, two before year end, one after.
-- Integration of June 2015 asset acquisition complete, resulting in the migration of 1,192 profitable customers to the new Vuelio platform.
-- Exited loss-making customer contracts acquired as part of the acquisition before the migrations to protect gross margins.
-- Launch of the new Vuelio offering with a unique integrated PR, public affairs and social engagement solution in the UK market.
Financial highlights:
-- Recurring revenue from continuing operations increased by 39% and total revenue from continuing operations increased by 43%, reflecting the full year impact of the acquisition in June 2015.
-- Gross margin reduced to 69% excluding one-time expenses, again reflecting the full year impact of the acquisition. The gross margin reduction was minimised through exiting non-profitable contracts during H2 2016 instead of migrating them to the Vuelio platform, with the resulting revenue impact to flow through in the 2017 financial year.
-- Total development and technical expense in the Consolidated Statement of Comprehensive Income relating to continuing operations increased to GBP1,664,000 in FY16 from GBP650,000 in the prior year as a result of investment in the Vuelio platform.
-- A further GBP522,000 of development expenditure relating to continuing operations was capitalised in 2016 compared to GBP417,000 in 2015.
-- Monthly operational spend excluding 3rd party content and hosting, restructuring, and migration expense reduced from GBP825,000 in Q4 2015 to GBP629,000 in Q4 2016, with further forecast savings bringing it down to GBP517,000 by Q4 2017.
-- The Group had cash balances in excess of GBP1.1 million at the year end.
Michael Jackson, Non-Executive Chairman of Access Intelligence, commented:
"Over the last twelve months, we have continued the realignment of the Access Intelligence portfolio to position and support Vuelio as its flagship brand, one poised to take advantage of big opportunities in the communications management market. We have effectively built a new Vuelio business, in part through the integration of assets acquired in 2015, but also through an accelerated programme of development and product upgrades for longstanding Vuelio customers. Having completed the all-encompassing migration project, the first four months of 2017 trading have seen improved new business sales and renewal rates and we are confident that we have the makings of a good business."
For further information:
Access Intelligence Plc 0843 659 2940
Michael Jackson (Non-Executive Chairman)
Joanna Arnold (CEO)
Allenby Capital Limited
David Worlidge / James Thomas
020 3328 5656
Forward looking statements
This announcement contains forward-looking statements.
These statements appear in a number of places in this announcement and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, revenue, financial condition, liquidity, prospects, growth, strategies, new products, the level of product launches and the markets in which we operate.
Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those in the forward-looking statements as a result of various factors.
These factors include any adverse change in regulations, unforeseen operational or technical problems, the nature of the competition that we will encounter, wider economic conditions including economic downturns and changes in financial and equity markets. We undertake no obligation publicly to update or revise any forward-looking statements, except as may be required by law.
Chairman's Statement
I am pleased to announce our results for the year ended 30 November 2016.
Over the last twelve months, we have continued the realignment of the Access Intelligence portfolio to position and support Vuelio as its flagship brand, one poised to take advantage of big opportunities in the communications management market. We have effectively built a new Vuelio business, in part through the integration of assets acquired from our competitor Cision in 2015, but also with an accelerated programme of development and product upgrades for longstanding Vuelio customers.
The integration centred on a large migration project bringing more than a thousand customers - worth millions of pounds of revenue - on to the Vuelio platform, in conjunction with restructuring of both operational and commercial parts of the business. This restructuring and refocusing on Vuelio included the divestment of non-core subsidiary companies Due North Limited and AITrackRecord Limited during the year, as well as AIControlPoint Limited after the year end. At the same time, the development work, essential for migration, has protected our existing business and opened new opportunities. With costs associated with reorganisations and migrations, it was always going to be a challenging year, I'm pleased to say it has also been rewarding and operationally successful.
Following this hard work of integration, our 2017 strategy is largely one of consolidation providing a foundation for incremental growth from 2018 onwards. We believe there are significant short-term opportunities for Vuelio in the UK market: a number of major competitors are still engaged in their own M&A activity; at the same time, the unique mix of the Vuelio portfolio leads us to believe that the business will benefit from recent political upheaval and attendant growth in the market for integrated PR and public affairs solutions. 2017 will also bring the launch of mobile, networked communications services, the first outputs from an innovative roadmap that we expect will secure sustainable growth through 2018 and beyond.
2017 has started well with the completion of migrations of the final and most complex customers onto our enhanced Vuelio platform. Following the consolidation of the 1,192 migrated acquisition customers with our existing PR and Communications customer base, we expect to see a small increase in our contracted Software as a Service (SaaS) customer base through 2017.
Revenue from continuing operations in March 2017 was GBP653,000 with gross margin of 66%, a reduction as a result of exiting non-profitable customer contracts pre-migration to minimise gross margin reduction. We have seen a significant improvement in new business sales performance and retention rates in the first four months of the current year and expect this to continue as our enhanced product gains further traction in the market.
The full benefit of the restructuring undertaken during H2 2016 will not be seen until 2017, with monthly operational spend excluding 3(rd) party content and hosting, restructuring, and migration expense expected to reduce from GBP629,000 in Q4 2016 to GBP517,000 by Q4 2017. This represents an annualised saving of GBP1.3 million. After emerging from an all-encompassing period of acquisition integration, we are confident that we have the makings of a good business.
I would like to take this opportunity to thank you on behalf of the board for your continued support of Access Intelligence.
Michael Jackson
Non-Executive Chairman
Strategic Report (Extract)
Results
2016 has been another year of transformation with the further integration of the business assets acquired in June 2015. It has included the build and launch of our new Vuelio platform, the successful migration of 1,192 customers to this platform and the divestment of two, non-core businesses.
Recurring revenues from continuing operations increased 39% to GBP8,834,000 (2015: GBP6,366,000) including the full year contribution from the business acquired in June 2015, with recurring revenues constituting 92% of revenues (2015: 95%).
Gross margin from continuing operations declined to 56% (2015: 72%), primarily due to the full year impact of the acquired business which runs at a lower margin than the other parts of the business due to the cost associated with the provision of third party data content to support monitoring and insights services in the software platform. The gross margin also reflects GBP1,244,000 (2015: GBP332,000) of one-off costs associated with the transitional hosting and migration of the 1,192 migrated customers to our new Vuelio platform. The gross margin excluding these one-time costs was 69% (2015: 77%).
The Group continued to undertake extensive restructuring during the year, integrating the acquired business, divesting non-core businesses in the second half of the year, and restructuring and reducing costs in the remaining business. The full year benefit of this second half activity is not fully reflected in the 2016 financial performance, however administrative expenses include one-off redundancy and legal costs associated with this restructuring of GBP285,000 (2015: GBP260,000).
As a result of the restructuring and refocusing of the business during the year, earnings before interest, tax, depreciation and amortisation (EBITDA) from continuing operations declined to a loss of GBP2,027,000 (2015: loss GBP951,000 before impairment charges of GBP30,000). Excluding the one-off expenses referenced above, EBITDA from continuing operations was a loss of GBP498,000 (2015: loss of GBP359,000).
Operating loss from continuing operations before impairments was GBP3,042,000 (2015: loss GBP1,541,000). In arriving at the operating loss the Group has incurred GBP1,664,000 (2015: GBP650,000) in research and development expenditure and charged GBP1,015,000 (2015: GBP590,000) for depreciation and amortisation, GBPNil (2015: GBP153,000) in acquisition costs, GBPNil (2015: GBP70,000) loss on disposal of fixed assets and GBP285,000 (2015: GBP260,000) in restructuring costs.
The Group made a profit for the year from discontinued operations of GBP1,511,000 (2015: loss of GBP1,934,000). Further information relating to discontinued operations is provided on page 28 of the Strategic Report and within note 6 to the consolidated financial statements.
2017 will see continued restructuring of the business and investment in the Vuelio brand with the full benefits expected to come through towards the end of the current financial year and into 2018.
Loss per share
The basic loss per share from continuing operations was 1.10p (2015: loss 0.52p). Basic earnings per share from discontinued operations was 0.48p (2015: loss 0.76p).
Cash
Cash at the year-end stood at GBP1,162,000 (2015: GBP1,523,000) whilst net debt, calculated as loan notes less cash held, decreased to GBP2,113,000 (2015: GBP2,593,000) during the year.
Dividend
As a result of the significant investment the Company has made in the strategic product innovation and sales development, the directors do not propose to pay a dividend for 2016 (2015: GBPNil).
Disposal of non-core assets
During the year and after the reporting date, the Group has continued to divest non-core subsidiary companies as part of its strategy to focus on the Vuelio reputation and communications management business.
Due North Limited
On 3 February 2016, Access Intelligence agreed terms to dispose of 100% of the issued share capital of its subsidiary Due North Limited, for a consideration totalling GBP4,500,000. Group profit on disposal of Due North Limited was GBP1,664,000. Company profit on disposal was GBP3,076,000.
AITrackRecord Limited
On 1 July 2016, Access Intelligence agreed terms to dispose of 100% of its subsidiary AITrackRecord Limited to TrackRecord Holdings Limited, a newly formed company. Consideration comprised 20% of the share capital of TrackRecord Holdings Limited and a deferred cash payment of GBP101,000. Group profit on disposal of AITrackRecord Limited was GBP585,000. Company profit on disposal was GBP632,000.
AIControlPoint
On 14 March 2017, Access Intelligence Plc transferred the trade and assets of its division AIControlPoint to its subsidiary company formed during the year, AIControlPoint Limited. On 16 March 2017, Access Intelligence Plc disposed of 100% of the issued share capital of AIControlPoint Limited for a consideration totalling GBP782,000. Group profit on disposal of the subsidiary was GBP588,000, Company profit on disposal was GBP639,000.
Consolidated Statement of Comprehensive Income
Year ended 30 November 2016
2016 2015 (restated) Note GBP'000 GBP'000 Revenue 3 9,598 6,687 Cost of sales (4,241) (1,881) Gross profit 5,357 4,806 Administrative expenses (8,295) (6,321) Share of loss of associate (91) - Share-based payment (13) (26) Operating loss before impairment (3,042) (1,541) Impairment of intangibles 11 - (30) Operating loss (3,042) (1,571) Financial income - 1 Financial expense (395) (266) Loss before taxation (3,437) (1,836) Taxation (charge)/credit 8 (37) 527 Loss for the year from continuing operations (3,474) (1,309) Profit/(loss) for the year from discontinued operations 6 1,511 (1,934) Loss for the year (1,963) (3,243) Other comprehensive income - - Total comprehensive income for the period attributable to the owners of the Parent Company (1,963) (3,243)
Earnings per share
Note Continuing Continuing Operations Operations 2015 2016 (restated) Basic loss per share 10 (1.10)p (0.52)p Diluted loss per share 10 (1.10)p (0.52)p Continuing Continuing and Discontinued and Discontinued Operations Operations 2016 2015 GBP'000 GBP'000 Basic loss per share 10 (0.62)p (1.28)p Diluted loss per share 10 (0.62)p (1.28)p
Consolidated Statement of Financial Position
At 30 November 2016 Note 2016 2015 GBP'000 GBP'000 Non-current assets Property, plant and equipment 100 273 Intangible assets 11 7,062 7,423 Investments in associates 534 - Deferred tax assets 230 865 Total non-current assets 7,926 8,561 Current assets Trade and other receivables 2,565 3,628 Current tax receivables 436 101 Cash and cash equivalents 1,162 1,523 Assets classified as held for sale 7 381 3,869 Total current assets 4,544 9,121 Total assets 12,470 17,682 Current liabilities Trade and other payables 1,301 1,225 Accruals 941 1,625 Provisions 27 130 Deferred revenue 3,772 4,643 Interest bearing loans and borrowings 12 1,374 1,277 Liabilities classified as held for sale 7 507 1,455 Total current liabilities 7,922 10,355 Non-current liabilities Provisions 374 391 Interest bearing loans and borrowings 12 1,901 2,839 Deferred tax liabilities 230 336 Total non-current liabilities 2,505 3,566 Total liabilities 10,427 13,921 Net assets 2,043 3,761 Equity Share capital 1,580 1,535 Treasury shares (148) (148) Share premium account 1,458 1,271 Capital redemption reserve 191 191 Share option reserve 377 364 Equity reserve 255 255 Retained earnings (1,670) 293 Total equity attributable to the equity holders of the Parent Company 2,043 3,761
Consolidated Statement of Changes in Equity
Year ended 30 November 2016
Share Treasury Share Capital Share Equity Retained Total capital shares premium redemption option reserve earnings GBP'000 GBP'000 GBP'000 account reserve reserve GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Group At 1 December 2014 1,324 (148) 224 191 338 126 3,536 5,591 Total comprehensive loss for the year - - - - - - (3,243) (3,243) Equity component of convertible loan notes net of deferred tax - - - - - 129 - 129 Transactions with owners Issue of share capital 211 - 1,047 - - - - 1,258 Share-based payments - - - - 26 - - 26 At 1 December 2015 1,535 (148) 1,271 191 364 255 293 3,761 Total comprehensive loss for the year - - - - - - (1,963) (1,963) Transactions with owners Issue of share capital 45 - 187 - - - - 232 Share-based
payments - - - - 13 - - 13 At 30 November 2016 1,580 (148) 1,458 191 377 255 (1,670) 2,043
Consolidated Statement of Cash Flow
Year ended 30 November 2016
Notes 2016 2015 GBP'000 GBP'000 Loss for the year (1,963) (3,243) Adjusted for: Taxation 8 64 (734) Depreciation and amortisation 1,078 948 Impairment of intangible assets 11 - 1,899 Share option charge 13 26 Financial income - (1) Financial expense 395 266 Loss on disposal of property, plant and equipment - 70 Share of loss of associate 91 - Profit on sale of Due North Limited 6 (1,664) - Profit on sale of AITrackRecord Limited 6 (585) - Profit on sale of Willow Starcom Limited 6 - (900) Operating cash outflow before changes in working capital (2,571) (1,669) Decrease/(Increase) in trade and other receivables 934 (496) Decrease in inventories - 8 (Decrease)/Increase in trade and other payables (1,228) 345 Net cash outflow from operations before taxation (2,865) (1,812) Taxation received - 237 Net cash outflow from operations (2,865) (1,575) Cash flows from investing Interest received - 1 Acquisition of property, plant and equipment and software licences (17) (66) Cost of software development (579) (1,541) Acquisition of trade and assets - (1,340) Disposal of Due North Limited (net of expenses) 4,030 - less: cash and cash equivalents disposed of 77 - Disposal of AITrackRecord Limited (net of expenses) 7 - less: cash and cash equivalents disposed of (10) - Disposal of Willow Starcom Limited (net of expenses) - 1,487 less: cash and cash equivalents disposed of - (346) Move to held for sale of Due North Limited - (207) Net cash inflow/(outflow) from investing 3,508 (2,011) Cash flows from financing activities Interest paid (336) (192) Issue of shares - 1,200 Exercise of share options 232 58 (Repayment)/issue of loan notes (900) 2,900 Net cash (outflow)/inflow from financing (1,004) 3,966 Net (decrease)/increase in cash and cash equivalents (361) 379 Opening cash and cash equivalents 1,523 1,144 Closing cash and cash equivalents 1,162 1,523
Notes to the Consolidated Statements
1. Basis of preparation
The financial information set out in the announcement does not constitute the company's statutory accounts for the years ended 30 November 2016 or 2015. The financial information for the year ended 30 November 2015 is derived from the statutory accounts for that year, which were prepared under IFRSs, and which have been delivered to the Registrar of Companies. The auditor's report on those accounts was unqualified, did not contain a statement under either Section 498(2) or Section 498(3) of the Companies Act 2006 and did not include references to any matters to which the auditors drew attention by way of emphasis.
The financial information for the year ended 30 November 2016 is derived from the audited statutory accounts for the year ended 30 November 2016 on which the auditor has given an unqualified report, that did not contain a statement under section 498(2) or 498(3) of the Companies Act 2006 and did not include references to any matters to which the auditors drew attention by way of emphasis. The statutory accounts will be delivered to the Registrar of Companies following the Company's Annual General Meeting.
These extracts from the financial statements have been prepared in accordance with International Financial Reporting Standards ('IFRS's') as adopted by the European Union, and with those parts of the Companies Acts applicable to companies reporting under IFRS.
The extracts from the consolidated financial statements have been prepared under the historical cost convention and on a going concern basis.
2. Basis of consolidation
The Group results comprise the financial statements of Access Intelligence plc and its subsidiaries as at 30th November 2016. They are presented in Sterling and all values are rounded to the nearest thousand pounds (GBP'000).
3. Revenue
The Group's revenue is primarily derived from the rendering of services with the value of sales of goods or delivery of infrastructure not being significant in relation to total Group revenue.
The Group's revenue was split into the following territories:
Continuing Continuing Operations Operations 2015 2016 GBP'000 GBP'000 United Kingdom 8,484 6,067 European Union 390 234 Rest of the world 724 386 9,598 6,687 4. Segment Reporting
Segment information is presented in respect of the Group's operating segments which are based upon the Group's management and internal business reporting.
Inter-segment pricing is determined on an arm's length basis.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly head office expenses.
Segment non-current asset additions show the amounts relating to property, plant and equipment and intangible assets including goodwill. All non-current assets are located in the UK.
Operating Segments
The Group operating segments have been decided upon according to their revenue model and product or service offering being the information provided to the Chief Executive Officer and the Board. The Reputation and Governance, Risk & Compliance segments derive their revenues from software licence sales and support and training revenues. As a result of the Group's divestments and acquisitions during the year the segments reported have changed to reflect the Board's focus. The segments are:
-- Reputation -- Governance, Risk & Compliance -- Discontinued - Disposals & Held for Sale -- Head Office
The segment information for the year ended 30 November 2016 is as follows:
Reputation Governance Head Consolidation Continuing Discontinued Discontinued Consolidated Discontinued Total GBP'000 Risk office adjustment operations Disposals Held adjustment operations GBP'000 and GBP'000 GBP'000 GBP'000 GBP'000 for GBP'000 GBP'000 Compliance sale GBP'000 GBP'000 External revenue 9,108 490 - - 9,598 544 789 - 1,333 10,931 Operating (loss)/profit (2,784) (41) (432) 306 (2,951) (714) (16) 40 (690) (3,641) Share of loss of associate - - (91) - (91) - - - (91) Profit on sale of subsidiary - - - - - - - 2,228 2,228 2,228 Financial income - - 2,500 (2,500) - - - - - - Financial expense - - (395) - (395) - - - - (395) Taxation 56 (33) (73) 13 (37) - (27) - (27) (64) (Loss)/profit after taxation (2,728) (74) 1,509 (2,181) (3,474) (714) (43) 2,268 1,511 (1,963) Reportable segment assets 10,058 409 9,468 (7,757) 12,178 - 292 - 292 12,470 Reportable segment liabilities 12,648 215 4,747 (7,690) 9,920 - 507 - 507 10,427 Other information: Additions to property, plant and equipment 14 - 4 - 17 - - - - 17 Depreciation and
amortisation 1,304 5 54 (348) 1,015 55 8 - 63 1,078
The segment information for the year ended 30 November 2015 (restated) is as follows:
Reputation Governance Head Consolidation Continuing Discontinued Discontinued Consolidated Discontinued Total GBP'000 Risk office adjustment operations Disposals Held adjustment operations GBP'000 and GBP'000 GBP'000 GBP'000 GBP'000 for GBP'000 GBP'000 Compliance sale GBP'000 GBP'000 External revenue 6,119 568 - - 6,687 3,441 728 - 4,169 10,856 Operating (loss)/profit (1,716) (175) 760 (410) (1,541) (863) (309) - (1,172) (2,712) Profit on sale of subsidiary - - - - - - - 900 900 900 Impairment - (30) - - (30) (1,692) (177) - (1,869) (1,899) Financial income - - 1 - 1 - - - - 1 Financial expense - - (266) - (266) - - - - (266) Taxation 401 23 82 21 527 266 (59) - 207 734 (Loss)/profit after taxation (1,315) (182) 577 (389) (1,309) (2,289) (545) 900 (1,934) (3,243) Reportable segment assets 13,393 374 10,853 (11,658) 12,962 4,555 165 - 4,720 17,682 Reportable segment liabilities 10,909 2,124 9,630 (13,605) 9,058 3,676 1,186 - 4,862 13,921 Other information: Additions to property, plant and equipment 12 1 10 - 23 44 - - 44 66 Depreciation and amortisation 577 22 102 (110) 591 338 15 - 353 944 5. Operating Loss
Operating loss is stated after charging:
2016 2015 GBP'000 GBP'000 Depreciation of property, plant and equipment 176 162 Amortisation of development costs 218 124 Amortisation of brand values 60 60 Amortisation of software licences 63 36 Amortisation of database 272 138 Amortisation of customer list 226 70 Loss on disposal of property, plant and equipment - 70 Impairment of intangible assets - 30 (Profit) on foreign currency translation (6) - Exceptional costs (see below) 285 260 Operating lease charges - land and buildings 571 574 Auditor's remuneration (see below) 62 85 Share based payments 13 26 Research and development and other technical expenditure (income statement) (a further GBP522,000 (2015: GBP417,000) was capitalised) 1,664 650 Increase in provision for receivables 39 46
Exceptional costs in the year ended 30 November 2016 were incurred as a result of restructuring and non-recurring one off termination of employment costs for staff and directors, along with associated legal fees. The exceptional costs are made up of the following:
2016 2015 GBP'000 GBP'000 Compensation for loss of office - directors - 88 Compensation and notice payments - all staff 285 134 Legal costs incurred on compensation of loss of office for directors - 38 285 260 6. Discontinued operations
The following tables provide combined information for all discontinued operations. The current year figures include the results of Due North Limited, AITrackRecord Limited and AIControlPoint plus consolidation adjustments. The prior year comparative figures also include the results of Willow Starcom Limited which was sold during the year ended 30 November 2015.
2016 2015 GBP'000 GBP'000 Results of discontinued operation Revenue 1,333 4,169 Expenses (2,023) (6,310) Results from operating activities (690) (2,141) Tax (27) 207 Results from operating activities, net of tax (717) (1,935) Gain on sale of discontinued operation 2,228 - Tax on gain on sale - - of discontinued operation Profit/(loss) for the year 1,511 (1,935) Basic earnings per share 0.48p (0.77)p Diluted earnings per share 0.48p (0.77)p
The profit/(loss) from discontinued operations of GBP1,511,000 (2015: loss of GBP1,935,000) is entirely attributable to the owners of the Company.
2016 2015 GBP'000 GBP'000 Cash flows from/(used in) discontinued operation Net cash from operating activities 257 1,162 Net cash used in investing activities (15) (977) Net cash used in financing activities (465) - Net cash flows for the year (222) (185)
The following is a breakdown of the effects of the disposal of Due North Limited and AITrackRecord Limited on the financial position of the Group:
2016 GBP'000 Goodwill 412 Property, plant and equipment 95 Intangible assets 2,614 Trade and other receivables 465 Cash and cash equivalents 140 Deferred tax assets (409) Trade and other payables (905) Net assets and liabilities 2,412 Consideration received, satisfied in shares of TrackRecord Holdings Limited 625 Consideration received, satisfied in cash 4,601 Cash and cash equivalents disposed of 140 7. Disposal group held for sale
AIControlPoint, a branch of the Parent Company is presented as a disposal group held for sale following the commitment of the Group's management in 2016 to a plan to sell the business. Efforts to sell the disposal group had therefore commenced before the year end, with the sale being completed on 16 March 2017 (see note 30).
At the prior year end, Due North Limited was presented as a disposal group held for sale following the commitment of the Group's management to a plan to sell the entity with the sale being completed on 3 February 2016 (see note 6).
At 30 November, the disposal group comprised the following assets and liabilities:
Assets classified as held for sale
2016 2015 GBP'000 GBP'000 Goodwill 89 412 Development costs - 2,661 Other intangible fixed assets 3 Property, plant and equipment - 75 Trade and other receivables 289 514 Cash and cash equivalents - 207 381 3,869
Liabilities classified as held for sale
2016 2015 GBP'000 GBP'000 Trade and other payables 75 401 Deferred income 432 621 Deferred tax liabilities - 433 507 1,455 8. Taxation 2016 2015 GBP'000 GBP'000 Current income taxes credit: UK corporation tax credit for the year (333) - Adjustment in respect of prior year (103) - Total current income tax credit (436) - Deferred tax (note 23) Impact of change in tax rate - 27 De-recognition of deferred tax assets 194 80 Origination and reversal of temporary differences 279 (634) Total deferred tax 473 (527) Total tax charge/(credit) 37 (527)
As shown above the tax assessed on the loss on ordinary activities for the year is higher than (2015: higher than) the standard rate of corporation tax in the UK of 20% (2015: 20.3%).
The differences are explained as follows:
Factors affecting tax credit
2016 2015 GBP'000 GBP'000 Loss on ordinary activities before tax from continuing operations (3,437) (1,836) Profit/(loss) on ordinary activities before tax from discontinued operations 1,538 (2,141) Loss on ordinary activities before tax (1,899) (3,977) Loss on ordinary activities multiplied by effective rate of tax (380) (809) Expenses not deductible for tax purposes 666 274 Adjustment in respect of prior year (103) - De-recognition of deferred tax assets 141 80 Additional R&D claim CTA 2009 (260) (279) Total tax charge/(credit) 64 (734) Tax charge/(credit) reported in the Consolidated Statement of Comprehensive Income 37 (527) Tax charge/(credit) attributable to discontinued operations 27 (207) Total tax charge/(credit) 64 (734)
Factors that may affect future tax expenses
A reduction in the UK corporation tax rate from 20% to 19% (effective from 1 April 2017) was substantively enacted in October 2015. A further reduction in the tax rate from 19% to 17% (effective from 1 April 2020) was substantively enacted in September 2016. These rates there- fore have been
considered when calculating the deferred tax at the reporting date. 9. Dividend paid
Due to the significant and ongoing investment in developing our products, the directors do not propose a dividend in respect of the year ended 30 November 2016.
10. Earnings per share
The calculation of earnings per share is based upon the total Group loss for the year of GBP1,963,000 (2015: loss of GBP3,243,000) divided by the weighted average number of ordinary shares in issue during the year which was 315,301,844 (2015: 252,593,681).
In 2016 and 2015 potential ordinary shares from the share option schemes and convertible loan notes have an anti- dilutive effect due to the Group being in a loss position. As a result, dilutive loss per share is disclosed as the same value as basic loss per share.
This has been computed as follows:
Continuing Discontinued Total Continuing Discontinued Total Operations Operations Operations Operations 2016 2016 2016 2015 2015 2015 Numerator GBP'000 GBP'000 GBP'000 (restated) (restated) GBP'000 GBP'000 GBP'000 (Loss)/Profit for the year and earnings used in basic EPS (3,474) 1,511 (1,963) (1,309) (1,934) (3,243) Earnings used in diluted EPS (3,474) 1,511 (1,963) (1,309) (1,934) (3,243) Denominator '000 '000 '000 '000 '000 '000 Weighted average number of shares used in basic EPS 315,302 315,302 315,302 252,594 252,594 252,594 Effects of: Dilutive N/A N/A N/A N /A N/A N/A effect of options Dilutive effect N/A N/A N/A N /A N/A N/A of loan note conversion Weighted average number of shares used in diluted EPS 315,302 315,302 315,302 252,594 252,594 252,594 Basic (Loss)/ earnings per share (pence) (1.10) 0.48 (0.62) (0.52) (0.76) (1.28) Diluted loss per share for the year (pence) (1.10) 0.48 (0.62) (0.52) (0.76) (1.28)
The total number of options and warrants granted at 30 November 2016 of 24,353,073 (2015: 33,958,676)
would generate GBP716,379 (2015: GBP984,626) in cash if exercised. At 30 November 2016, 220,000 (2015: 545,000) were priced above the mid-market closing price of 4.625p per share (2015: 5.13p per share) and 24,133,073 (2015: 33,413,676) were below.
At 30 November 2016 7,872,941 (2015: 9,258,676) staff options were eligible for exercising at an average price of 2.96p (2015: 3.2p). Also eligible for exercising are the 14,491,897 warrants priced at 2.75p per share held by Elderstreet VCT plc, D Lowe and other individuals consequent to an initial investment in the Company in October 2008.
The below table shows the amount of outstanding convertible loan notes at 30 November 2016 and the amount of shares they would convert into if the holder chooses the conversion option:
Holder Loan Notes Convert into Date of conversion GBP'000 shares '000 31 December Elderstreet VCT 500 12,500 2017 31 December Unicorn AIM VCT 750 18,750 2017 4 December Elderstreet VCT 200 6,667 2019 4 December Hawk Investments 300 10,000 2019 Kestrel Partners 4 December LLP 400 13,333 2019 4 December Octopus AIM VCT 200 6,667 2019 Total 2,350 67,917
11. Intangible fixed assets
Brand Goodwill Development Software Database Customer Total Value GBP'000 Costs Licences GBP'000 relationships GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Cost At 1 December 2014 1,369 12,005 4,692 160 - - 18,226 Capitalised during the year - - 1,533 68 - - 1,601 Additions through business combination - 2,043 - 8 997 830 3,878 Disposals - (1,430) - - - - (1,430) Held for sale - (1,481) (2,846) - - - (4,327) At 1 December 2015 1,369 11,137 3,379 236 997 830 17,948 Capitalised during the year - - 522 57 - - 579 Disposals - (1,872) (1,800) - - - (3,672) Held for sale - (89) (183) (150) - - (422) At 30 November 2016 1,369 9,176 1,918 143 997 830 14,433 Amortisation and impairment At 1 December 2014 409 8,776 552 83 - - 9,820 Charge for the year 60 - 378 44 138 70 690 Disposals - (630) - - - - (630) Held for sale - (1,069) (185) - - - (1,254) Impairment in year - - 1,899 - - - 1,899 At 1 December 2015 469 7,077 2,644 127 138 70 10,525 Charge for the year 60 - 265 71 272 226 894
Disposals - (1,872) (1,846) - - - (3,718) Held for sale - - (183) (147) - - (330) At 30 November 2016 529 5,205 880 51 410 296 7,371 Net Book Value At 30 November 2016 840 3,971 1,038 92 587 534 7,062 At 30 November 2015 900 4,060 735 109 859 760 7,423
For the purpose of impairment testing, goodwill is allocated by entity, which represent the Group's CGUs and the lowest level within the Group at which the goodwill is monitored.
The carrying value of capitalised development costs which are not yet being amortised and goodwill, allocated to each CGU are:
2016 Development Goodwill Costs GBP'000 GBP'000 Continuing operations Access Intelligence plc - - Access Intelligence Media and Communications Ltd - 1,928 AIMediaData Ltd. - 2,043 - 3,971 2015 Development Goodwill Costs GBP'000 GBP'000 Continuing operations Access Intelligence plc - 89 Access Intelligence Media and Communications Ltd - 1,928 AIMediaData Ltd. 78 2,043 - 4,060
At the reporting date, impairment tests were undertaken by comparing the carrying values of goodwill, capitalised development costs and other assets with the recoverable amount of the CGU to which the goodwill, capitalised development costs and other assets have been allocated. The recoverable amount of the CGU is based on value-in- use calculations. These calculations use pre-tax cash flow projections covering a five-year period based on financial budgets and forecasts as approved by the Board with a terminal value for goodwill impairment assessment and covering a ten-year period based on financial budgets and forecasts as approved by the Board with no terminal value for other intangible assets. Ten years were selected as this represents the estimated lifetime of the software platforms.
The key assumptions used for value-in-use calculations are those regarding revenue growth rates and discount rates over the forecast period. Growth rates are based on past experience, the anticipated impact of the CGUs significant investment in research and development, and expectations of future changes in the market. The value in use calculations use information from approved budgets and forecasts in the first three years, followed by applying specific growth rates for which the key assumptions in respect of annual revenue growth rates range between 0% and 7% from year 4 onwards.
The discount rate used for all companies was 12%, based on an assessment of the Group's cost of capital and on comparison with other listed technology companies. The terminal growth rate used for the purposes of goodwill impairment assessments was 2.5%. The Board considered that no impairment to goodwill is necessary based on the value-in-use reviews of Access Intelligence Media & Communications Limited and AIMediaData Limited.
The value-in-use calculations for Access Intelligence Media & Communications Limited and AIMediaData Limited exceeded the carrying values of goodwill and relating to those companies.
Sensitivity analysis has been performed on reasonably possible changes in assumptions upon which recoverable amounts have been estimated. Based on the sensitivity analysis, a reduction of 51% in EBITDA delivered by Access Intelligence Media & Communications Limited would result in the carrying value of its goodwill being to equal its recoverable amount. For AIMediaData Limited, a 36% reduction in EBITDA would result in the carrying value of its goodwill being equal to its recoverable amount. For both companies, an increase in the discount rate by 12 percentage points would still not result in the carrying value of goodwill exceeding the recoverable amount.
Based on the sensitivity analysis, a reduction of 49% in EBITDA delivered by Access Intelligence Media & Communications Limited would result in the carrying value of its other intangible assets being to equal its recoverable amount. For AIMediaData Limited, a 26% reduction in EBITDA would result in the carrying value of its other intangible assets being equal to its recoverable amount. For both companies, an increase in the discount rate by 12 percentage points would still not result in the carrying value of other intangible assets exceeding the recoverable amount.
Other impairments
Other intangible assets are tested for impairment if indicators of an impairment exist. Such indicators include performance falling short of expectation.
In 2016, development costs of GBPNil (2015: GBP177,000) were impaired as a result of projects that did not perform as expected.
The directors considered that there were no indicators of impairment relating to the remaining intangible fixed assets at 30 November 2016.
12. Interest bearing loans and borrowing
2016 2015 GBP'000 GBP'000 Current Convertible loan notes 1,264 1,277 Non-convertible loan notes 110 - 1,374 1,277 Non-current Convertible loan notes 1,052 1,009 Non-convertible loan notes 849 1,830 1,901 2,839
On 30th June 2009 GBP1,750,000 convertible loan notes were issued. At 30 November 2015 and 30 November 2016, GBP1,250,000 of these loan notes were in issue.
The original terms were that these loan notes were redeemable at par or convertible to ordinary shares at 4p per ordinary share on or before maturing on 30th June 2015 and carried a coupon rate of 6% per annum payable semi- annually until such time as they were repaid or were converted in accordance with their terms. The holder of the notes may convert all or part of the notes held by them into new ordinary shares in the Company on delivery to the Company of a conversion notice at 4p per share.
In 2014, the Company agreed terms with Elderstreet VCT (a company related to Chairman Michael Jackson) and Unicorn AIM VCT plc to extend the loans such that they mature on 31 December 2015, with enhanced interest at 8% during this extended period with conversion rights unchanged at 4p per share. In January 2016, the maturity dates of the loan notes were extended to 31 December 2016 with all other terms remaining unchanged. The carrying value of these loans at the prior year-end, including accrued interest, was GBP1,277,000.
In December 2016 the maturity dates of the loan notes were further extended to 31 December 2017 with all other terms remaining unchanged. These notes are classified as current at the year end.
In December 2014 the Company issued GBP1,100,000 of convertible loan notes. These loan notes are redeemable at par or convertible to ordinary shares at 3p per ordinary share on or before maturing on 3 December 2019 and carry a coupon rate of 8% per annum payable semi-annually until such time as they are repaid or converted.
No redemptions or conversions of the convertible loan stock arose in the year ended 30 November 2016.
The net proceeds received from the issues of the convertible loan notes have been split between the liability element and an equity component, representing the fair value of the embedded option to convert the liability into equity of the Company, as follows:
2016 2015 GBP'000 GBP'000 Proceeds of issue of convertible loan notes - 1,100 Existing loan notes rolled over 2,350 1,250 Equity component (255) (255) Deferred taxation (79) (79) Initial fair value of liability component 2,016 2,016 Cumulative interest charged 1,009 792 Cumulative interest paid (709) (522) Liability component at 30 November 2,316 2,286
The equity component of GBP255,000 (2015: GBP255,000) has been credited to equity reserve. The interest charged for the year is calculated by applying an effective rate of interest of 10.1% (2015: 9.8%) to the liability component for the 12-month period. The liability component is measured at amortised cost. The difference between the carrying amount of the liability component at the date of issue and the amount reported in the statement of financial position at 30 November 2016 represents the effective interest rate less interest paid to that date.
The movement on the convertible loan note liability is summarised below:
2016 2015 GBP'000 GBP'000 Opening loan liability 2,286 1,301 Issue of convertible loan notes - 941 Interest charged for the year 217 191 Interest paid in the year (187) (147) Liability component at 30 November 2,316 2,286
On 22 June 2015 the Company issued GBP1,818,000 of non-convertible loan notes which carried an interest rate of 10% for one year rising to 12% thereafter. Interest is payable quarterly in arrears. The loans notes are fully repayable in five years.
2016 2015 GBP'000 GBP'000 Opening loan liability 1,830 - Issue of non-convertible loan notes - 1,818 Costs associated with the issue of loans - (18) Repayment of non-convertible loan notes (900) - Interest charged for the year 178 75 Interest paid in the year (149) (45) Liability component at 30 November 959 1,830
13. Availability of Annual Report and AGM date
Copies of the Report and Accounts have been posted to shareholders where requested and the document is available from the Company's website (www.accessintelligence.com). It is intended that the annual general meeting will take place at the Company's registered office, Longbow House, 14-20 Chiswell Street, London, EC1Y 4TW, at 10.30am on Friday 26 May 2017.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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(END) Dow Jones Newswires
May 02, 2017 02:01 ET (06:01 GMT)
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