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Real-Time news about Daily Internet (London Stock Exchange): 0 recent articles
|tiltonboy: I feel there has been good progress over the last year, and slowly the weak holders have been exiting.
It would be nice to see the share price firmly above 2p to coincide with the next acquisition, which at long last looks a possibility.|
|liquid millionaire: Would prefer a take over to come later at a much higher share price i.e. 10p+|
|liquid millionaire: One to watch are DAIP as they are imo on the cusp of a chart break out with a share price target of 10p+|
|fenseal3: clocktower....most companies that have got through the last 4 years are strong companies, if they where to do as you say that would have happened a long time ago, they have gained a good reputation and are growing quickly, look at COMS ran before they could walk, think, if COMS had taken it's time and grown organically they would not have dropped from 10p to 0.5p, this is just my opinion, i think this has the hallmarks of a great growth share, i'm not talking years before the share price goes up i'm talking next results.|
I have generally been positive about the company. My argument all along was that on an earnings basis the shares were up with events. Let us not forget that our original postings were 9 months ago, and earnings have subsequently proved disappointing and further downgraded, so I think I was accurate with my assessment back then. Additionally, the share price is lower now than it was then.|
|liquid millionaire: Daily Internet plc
("Daily Internet" or "the Company" or "the Group")
Acquisition of Q4Ex Limited
Issue of Equity
Related Party Transaction
Daily Internet (AIM: DAIP) is pleased to announce the acquisition by the Company of Q4Ex Ltd ("Q4Ex"), a Liverpool based cloud Software as a Service ("SaaS") provider (the "Acquisition"). The initial consideration payable by the Company for Q4Ex will be GBP520,000, to be comprised of 30,588,235 ordinary shares of 0.5 pence each in the Company ("Ordinary Shares"), valued at 1.7 pence per Ordinary Share ("Initial Consideration Shares").
The Initial Consideration Shares will be issued at a premium of over 21 per cent. to the Company's closing share price on 8 December 2014, which the Directors believe shows both the faith of the vendors of Q4Ex in the Company , and the added value within the enlarged entity that the Company will become.
Background on Q4Ex
Founded in March 2014 and based in Liverpool, Q4Ex is a UK based cloud services provider focussed on bringing the highest levels of customer service to clients in the builders merchant and distribution sector. Services include infrastructure as a service (IaaS), platform as a service (PaaS) and SaaS along with associated advisory and support.
Q4Ex combines exceptional technical and operational skills along with a wealth of experience in ERP applications for vertical markets solutions, which offer true end-to-end service for its clients.
The key management team consists of individuals with over 60 years combined experience in providing IT solutions, from software development to ERP consultancy.
Q4Ex raised its first invoice in March of 2014, and built its first VMware Cloud Platform in June 2014. It brought on board its first "anchor" client in the sector which outsourced all of its on-premise IT into the Cloud. Its pipeline has grown rapidly and together with its anchor client validates its business model and market proposition in a sector that has a higher barrier to entry than simple "cloud".
Extracts from the management accounts of Q4Ex for the nine months from 1 March 2014 to 30 November 2014 show revenues of GBP175k, gross profit of GBP143k and EBITDA of GBP92k. It is anticipated to have net cash balances on completion of approximately GBP40k.
Rationale for the Acquisition
Q4Ex is seeing increasing interest from larger potential clients and whilst in the past it has undertaken joint pitches with Netplan, it has now been agreed that the relationship with Netplan should be cemented through an amalgamation of the two businesses.
The Boards of Q4Ex and the Group acknowledged the strength in bringing these companies together, culminating in the announcement being made today.
The Group's management team will be greatly strengthened through the acquisition. Arthur Duffy, Managing Director of Q4Ex, and Paul Jones, Services & Support Director of Q4Ex, will join the Netplan Board as Managing Director and Services and Support Director respectively. Arthur and Paul formerly held similar roles at a leading ERP provider.
Terms of the Acquisition
Further to the Initial Consideration Shares, there are certain further potential deferred consideration hurdle payments that may be made to the shareholders of Q4Ex, on the basis of the future EBITDA of the enlarged division formed by the Acquisition. The maximum further potential deferred consideration could total up to GBP1,456,000, to be comprised of Ordinary Shares in the Company valued at 1.7 pence per Ordinary Share ("Potential Deferred Consideration Shares"). The earn out period for the Potential Deferred Consideration Shares is 36 months and the future EBITDA is to be assessed on a rolling 12 month basis and is the EBITDA derived from the Q4Ex operations adjusted for a charge relating to shared central charges.
Abby Hardoon, CEO of the Company, is to become Non-Executive director on completion of the transaction. Christopher Evans will become CEO and as such will lead the strategic changes to the Group. Abby will continue to be involved as a highly engaged NED, for which the Board are greatly appreciative.
Related Party Transaction & Director Holding
Christopher Evans, Non-Executive Director and holder of 8,108,939 Ordinary Shares in the Company, is also a director and 32% shareholder in Q4Ex. Accordingly, he is due to be issued 9,803,821 Initial Consideration Shares as part of the Acquisition. As Mr Evans qualifies as a related party under the AIM Rules for Companies, under AIM Rule 13 the Acquisition is classified as a related party transaction. The independent directors of the Company (in this case being all the directors of the Company apart from Christopher Evans), having consulted with Sanlam Securities UK Limited, the Company's nominated adviser, consider that the terms of the Acquisition are fair and reasonable insofar as the Company's shareholders are concerned.
Following the Acquisition, Christopher Evans will be interested in 17,912,760 Ordinary Shares in the Company, equal to approximately 3.73 per cent. of the Company's total issued share capital as enlarged by the Acquisition.
Application to AIM / Issued Share Capital
Application has been made to the London Stock Exchange for the Initial Consideration Shares to be admitted to trading on AIM. Admission is expected to take place on 12 December 2014. The shares will rank pari passu with the existing issued Ordinary Shares.
Following the issue of the Initial Consideration Shares, the Company's total issued share capital will consist of 479,791,101 Ordinary Shares, with each share carrying the right to one vote. The Company has no Ordinary Shares held in treasury. The total of 479,791,101 Ordinary Shares may therefore be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure and Transparency Rules.|
|liquid millionaire: Chairman's Statement
I am pleased to present the financial results for the year ended 31 March 2014. The year under review has been one of significant advancement for the Group made possible by the hard work and determination of its management and employees.
We acquired Netplan Internet Solutions Limited ("Netplan") in November 2013. Netplan provides dedicated servers to SMEs and PCI Level One hosting, enabling customers to securely manage financial transactions over the internet. The customer base of Netplan compliments that of Daily's and provides a higher average revenue and contribution per customer. Following the acquisition, Daily has focused its activities on the development of managed hosting and dedicated servers through the Netplan business.
As announced on 31 March 2014, in connection with an existing UK customer, Netplan concluded a six-figure agreement to provide Cloud offerings to the customer's parent company in New York. As a result, Netplan has established cloud and disaster recovery infrastructure in two New York data centres enabling us to offer our product portfolio to more companies within this customer's group as well as to other potential customers within the USA.
Netplan was acquired for a net cash consideration of GBP2.5 million plus an earn-out of a further GBP750,000, payable as to two-thirds in cash. The earn-out was subject to Netplan's EBIT achieving a minimum level of GBP500,000 for the year ended September 2014; and in addition it was agreed that if Netplan's EBIT for that year exceeded GBP525,000, then the earn-out consideration would increase by GBP3 for every GBP1 of the increase over this threshold.
Subsequent to the financial year end, and after Netplan's performance surpassed management's internal expectations, agreement was reached with the vendors to complete the payment of the earn-out consideration early through a final payment of GBP550,000 in cash and GBP300,000 in the form of 19,326,241 new ordinary shares in Daily. The early earn-out payment enabled Daily to pursue additional growth strategies within Netplan's business more quickly.
In January 2014, NameHOG was acquired for a cash consideration of GBP150,000. NameHOG is an established UK internet hosting provider supplying domain name registration, shared web hosting and dedicated server products to a diverse range of over 5,000 SME customers, including approximately 2,200 active customers. NameHOG now operates entirely out of Daily's existing Nottingham premises.
The Company completed two fundraisings during the year amounting to GBP3,625,000 before expenses, with the majority of the funds utilised in the acquisitions of Netplan and NameHOG. GBP3,000,000 was raised at a price of 1.5p per share in October 2013 and GBP625,000 was subsequently raised at 1.65p per share in January 2014. The current share price is 1.88p.
The Group continued to make significant progress during the financial year under review, particularly following the two acquisitions detailed above. In the second half of the financial year, the SME hosting division reversed a GBP120,000 loss in the first half into a GBP57,000 profit, with Netplan contributing GBP301,000 to EBITDA during the period since its acquisition.
The Group now provides a broad portfolio of hosting products, email and domain name registration services to large and small business users as well as consumers to satisfy all their hosting requirements. Our customer base has been enhanced by the acquisition of both NameHOG and Netplan and has continued to grow.
The contribution of Netplan is reflected in an improved Average Revenue per Customer (ARPU) during the year, rising from some GBP87 to GBP128. In addition our larger customers spent at the rate of c. GBP140,000 with us last year, an increase of around GBP35,000 from the year before.
We are now growing as a Group with synergies to be extracted through the development of our three trading brands: Daily Internet, NameHOG and Netplan. We possess a comprehensive range of products, a much larger customer base, and a robust platform to allow us to grow both organically and through acquisition. ARPU continues to grow and our larger customers are now expected to contract at over GBP200,000 per year with us.
We have re-examined all of our products and have started to prune those that are less profitable. This is expected to streamline Daily's operations and reduce the cost base.
Our stated buy and build strategy continues to target for consolidation small internet hosting businesses and also larger acquisitions with higher revenues per customer to enhance our high-end product range and significantly increase profitability.
Our management team continues to work hard with enthusiasm and energy, seeking out new technologies to capture further market share, increase revenue and consolidate our position. At the same time they endeavour to target and execute accretive acquisitions to enable us to extend our reach into new markets with new brands at a much faster rate than is possible through organic growth.
I take this opportunity to thank all our shareholders for their continued support, the Daily Group staff for their passion, dedication and commitment and of course, our customers.
Daily Internet share price data is direct from the London Stock Exchange