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LRM Lombard Risk

12.925
0.00 (0.00%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Lombard Risk LSE:LRM London Ordinary Share GB00B030JP46 ORD 0.5P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 12.925 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Lombard Risk Management PLC Half-year Report (5268U)

25/10/2017 7:00am

UK Regulatory


Lombard Risk Management (LSE:LRM)
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TIDMLRM

RNS Number : 5268U

Lombard Risk Management PLC

25 October 2017

25 October 2017

Lombard Risk Management plc

("Lombard Risk" or the "Company")

Interim Results

Lombard Risk Management plc (AIM: LRM), the leading dedicated global provider of collateral management and regulatory reporting solutions, announces its interim results for the six months ended 30 September 2017.

Financial highlights

-- First-half revenue of GBP12.7m (H1 2016: GBP15.2m), down 16.4% largely due to a temporary fall in services revenues and some delays in contract signings

-- Order book of contracted revenue at GBP9.2m (H1 2016: GBP9.2m)

-- Annually recurring revenue up 4.9% to GBP6.4m (H1 2016: GBP6.1m)

-- Sales bookings for the period down 21.9% on the previous year, with software licence bookings down 63.6%

-- Negative EBITDA of GBP3.5m (H1 2016: positive GBP1.5m) owing to lower revenue and planned increase in investment

-- Loss before tax of GBP5.9m (H1 2016: loss of GBP0.1m)

-- Capitalised development costs in the period totalled GBP2.7m (H1 2016: GBP2.8m)

-- Loss per share of 1.47p (H1 2016: loss per share of 0.05p)

-- Cash at period end of GBP0.4m (30 September 2016: GBP6.9m) with no debt (30 September 2016: GBPnil) and undrawn facilities of GBP4.5m (H1 2016: GBP0.5m)

Operational highlights

-- New client wins including first mandate for the foreign branch reporting of a Taiwanese bank

-- First client win for Australian Prudential Regulatory Authority reporting

-- Six new AgileREPORTER(R) clients signed in EMEA, including three new logos

-- Extension of partnership network with DTCC and new partnerships with SmartDX and Elixium

-- Continued build-out of Birmingham technology centre

-- Record pipeline going into the second half of the year

Alastair Brown, CEO of Lombard Risk, commented:

"We recognise that this has been a challenging first half for Lombard Risk. A number of opportunities we had hoped to secure in the period remain in the pipeline as market distractions such as MiFID II caused companies to delay on committing to new projects. This leaves us much to do in the second half, and converting our strong visible pipeline will be crucial to us meeting market forecasts.

"However, with the size and quality of our pipeline at an all-time high, we remain confident this can be achieved. During the period strong foundations have been put in place, with an improved salesforce, a new development centre in Birmingham, and a renewed effort to target new business as well as extant cross-selling opportunities. We expect delivery of a strong second half will enable the Company to meet its stated objectives of being cash generative. We believe this positions Lombard Risk well for the future and we look forward to updating the market on progress during the second half of the financial year."

For further information, please contact:

   Lombard Risk Management plc                 Tel: 020 7593 6700 

Alastair Brown, CEO

Nigel Gurney, CFO

finnCap Tel: 020 7220 0500

Stuart Andrews

Carl Holmes

Scott Mathieson

   WG Partners LLP (Joint Broker)                  Tel: 020 3705 9330 

David Wilson

Claes Spång

Chris Lee

   Newgate Communications                          Tel: 020 7653 6550 
   Bob Huxford                                                      Email: lombard@newgatecomms.com 

Charlotte Coulson

James Ash

The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

About Lombard Risk

Lombard Risk is the leading dedicated global provider of collateral management and regulatory reporting solutions to the financial services industry. Through intelligent automation and optimisation, Lombard Risk's clients are able to improve their approach to risk management, gaining the agility they need to have a competitive advantage. As well as bringing immediate and urgent solutions to clients' needs, Lombard Risk's global team of experts look beyond today's reporting and collateral management to develop technology solutions that help them adapt as industry challenges evolve.

Counting 30 of the world's "Top 50"' financial institutions among its clients, Lombard Risk has been a trusted partner for 28 years. Founded in 1989 and headquartered in London, it has offices in Europe (Birmingham and Frankfurt), New York and Asia Pacific (Hong Kong, Shanghai and Singapore), and representative offices in Atlanta, Cape Town, Sydney and Tokyo. Find out more at lombardrisk.com.

Chief Executive Officer's statement

A number of factors have combined to make the first half of the current financial year slower than in the same period of the previous year. However, we created a large number of good opportunities, many of which we are confident can be realised in the second half of this financial year. A number of geographies faced unexpected headwinds, resulting in banks' resources being tied up in other commitments and ultimately causing slippage in our pipeline.

As indicated in our AGM statement in July, this slower first half was anticipated and we expect the full year 2018 to be significantly weighted towards the second half, in what is traditionally a second half weighted business. Business development activity to build a sustainable pipeline going forward has been extremely intensive during the period, and I am pleased to report that the current pipeline is at an all-time high. This underpins the Board's confidence in the ultimate outcome of the year, recovering to our stated ambition of becoming cash generative.

Continued investment in the salesforce

Building a professional salesforce was a major contributor to our success in the prior financial year, improving discipline around servicing clients through upsell and early renewals. The first half of the current year has seen this focus extend to new business development by investing in sales talent with dedicated financial services experience, capable of increasing the rate at which we generate new opportunities in addition to mining the existing customer base.

This investment did not occur early enough to generate results in terms of securing new business in the first half of this year and as such was in part responsible for the shortfall in activity which resulted in a decline in bookings for software licence sales of 63.6% compared to the corresponding period last year. In addition, our services revenues experienced a temporary decline, as two major long-term projects were completed and there was a hiatus while resources were redeployed. However, this continued investment has now seen a major uptick in the twelve-month rolling pipeline and it is this that gives the Board confidence in the second half of the year. Our concerted efforts on this front saw a number of new regulatory reporting opportunities added to the pipeline with some closing in the first half. The equally intensive work on the collateral side of the business has taken longer to flow through given the nature of these opportunities and the longer lead times. However, this process is now industrialised, and the pipeline for the second half is not only higher quality than previous periods, but also, as mentioned above, at an all-time high, with the global pipeline up 44% since the beginning of the financial year.

Success in Asia and Australia

We commented on the challenges faced in Asia at the year end, and set out a plan for reinvesting in a region where Lombard Risk has numerous clients, and has enjoyed previous success. We are pleased to report that this investment has started to deliver, with new regulatory reporting wins displacing the competition and winning new logos in both Hong Kong and Singapore. Further, we have built on our extensive experience supporting Indian and Chinese banks with their foreign branches in Hong Kong and Singapore, by winning our first mandate for the foreign branch of a Taiwanese bank.

Lombard Risk has been working closely with existing clients and other industry participants in anticipation of the new Australian Prudential Regulatory Authority ("APRA") regulations due to come into force in 2018 and 2019. We were delighted to close our first APRA client in the first half, and are looking forward to supporting existing clients with their Australian branches as well as demonstrating the powerful capabilities AgileREPORTER(R) offers to new prospects seeking a multi-geography, multi-regulator solution.

The new team is now fully established developing our business in Hong Kong, Singapore, Japan and Australia, and with the new Singapore MAS 610 regime, in addition to the APRA changes, we see significant opportunities in the region going forward. We have yet to enjoy the success with COLLINE(R) in Asia Pacific that we have enjoyed in other regions, and again the new team brings significant collateral experience which is now adding to the regional pipeline for this product line. We anticipate Asia Pacific being an increasingly important region for Lombard Risk going forward.

Market-leading products

On the regulatory reporting side of the business, and having completed the investment necessary to start the Oracle Financial Services Analytical Application ("OFSAA") partnership, Lombard Risk's attention has been focussed on developing our flagship product, AgileREPORTER(R), for our loyal 200-plus reporting client base and new customers alike. Following our success in FY 2017 deploying AgileREPORTER(R) to support North American clients needing to file FR 2052a returns, we initiated a European campaign, immediately signing up three customers to the upgrade programme in addition to winning three new logos, including the first to purchase our cloud-based version of the reporting solution. With the five Oracle OFSAA and Lombard Risk customers already taking the flagship solution, in addition to our advances in Australia utilising the AgileREPORTER(R) platform, the product development momentum is significant, and bodes well for the second half.

On the collateral management side of our business, we have continued to build out the sophisticated Exchange Traded Derivatives ("ETD") solution that we added to the array of asset classes that COLLINE(R) supports last year. Working in close partnership with one of the industry's largest prime brokers has allowed us to develop a new module which will meet the ETD requirements of any market participant, with the added benefit of COLLINE(R)'s cross-product margining capabilities, which remain a key differentiator.

Externally, we have been actively building our network of partnerships, adding SmartDX and Elixium and extending our relationship with DTCC to ensure that COLLINE(R) remains at the heart of the post-trade ecosystem. This continued investment in our product gives clients and prospects alike full confidence that Lombard Risk remains fully committed to keeping abreast of the rapid evolution of the derivatives landscape.

Partnership revenue

We experienced delays to building further on our successful partnership with Oracle in the first half. With AgileREPORTER(R), as an OFSAA on top of the Oracle Financial Services Data Foundation ("FSDF"), now live and filing reports at a number of our five existing clients, both parties have been working tirelessly to build pipeline in North America, Europe and Asia Pacific, which we believe will come through in H2. These enterprise-wide data projects are much bigger than the individual regulator date-driven opportunities for which Lombard Risk has traditionally provided solutions. Consequently, sales lead times are both longer and less predictable than is typical, with potential clients exercising caution as they consider major transformational investment decisions. That said, the volume of opportunities has risen dramatically over the last year, and we remain optimistic about the long-term value of this key partnership.

Partnerships remain a key component of our growth plan, and in addition to the strategic relationships we have made to extend the collateral ecosystem, we are working with several other potential partners in each region to increase the reach of our solutions. We look forward to providing further updates regarding these developments in due course.

A world-class development centre

A key objective for the current year is to build out our new development centre in Birmingham. This ambitious project remains on track, with over forty engineers now in place, and hiring proceeding as expected to reach full operational capability by June 2018. The first software deliveries have been completed, with two COLLINE(R) releases shipped, and the AgileREPORTER(R) Analysis Centre functionality developed in time for the launch at our highly successful regulatory reporting conferences in New York and London in September.

Amongst the many benefits the Birmingham Technology Centre brings the firm is an advanced user experience capability, which is developing the next generation of intuitive, time-saving interfaces for both our product lines. This is allowing Lombard Risk to offer the best in class of modern financial and regulatory technology, married to our extensive historical investment in the product itself, backed up with our track record of delivery. We expect this to continue to be a differentiator in the modern financial services software marketplace.

Financial review

Recognised revenue of GBP12.7m (H1 2016: GBP15.2m) was down 16.4% against the comparable period last year. Annually recurring revenues for the half year totalled GBP6.4m (H1 2016: GBP6.1m) representing 50.4% (H1 2016: 40.1%) of total revenues. Regulatory Reporting revenues rose by 8.5% to GBP7.7m (H1 2016: GBP7.1m) while Risk Management revenues fell by 38.3% to GBP5.0m (H1 2016: GBP8.1m). The fall in revenues was not restricted to one region: EMEA revenues fell by 25% to GBP5.7m (H1 2016: GBP7.6m); North America revenues were flat at GBP5.2m (H1 2016: GBP5.2m); and Asia Pacific revenues fell by 29.2% to GBP1.7m (H1 2016: GBP2.4m).

Net cash at 30 September 2017 was GBP0.4m (H1 2016: GBP6.9m) as a result of both the disappointing revenue performance and the continued investment in both the Company's products and infrastructure as envisaged at the time of our fundraise in the summer of 2016. This has resulted in a loss before tax of GBP5.9m (H1 2016: GBP0.1m). Earnings before interest, taxation, depreciation and amortisation ("EBITDA") were negative GBP3.5m (H1 2016: positive GBP1.5m). As reported in the annual report for the year ended 31 March 2017, the Company has in place a revolving credit facility of GBP4.0m with Barclays Bank Plc in addition to an overdraft facility of GBP0.5m to cover short-term funding needs.

Headcount as at 30 September 2017 was 337 (H1 2016: 378) as the Company has rationalised its resources across a number of key areas, in particular product and development.

The Company's accounting policies allow for the capitalisation and amortisation of certain software development costs. Capitalised development costs in the period totalled GBP2.7m (H1 2016: GBP2.8m) representing 43.5% (H1 2016: 46.6%) of total technology and support costs. The increase in total technology costs reflects both the continued investment in the Company's next-generation products and costs associated with the transition of certain development activities to the new software development facility in Birmingham.

The capitalisation of development costs affects the interpretation of the financial performance of the Company. Internally the Company's operating budget and monthly management accounts measure financial performance assuming no such capitalisation. Applying this assumption would result in negative EBITDA for the six-month period of GBP6.1m (H1 2016: negative EBITDA of GBP1.2m) and a loss before tax of GBP6.5m (H1 2016: GBP1.4m).

Focussing on costs

As anticipated, the migration to Birmingham, conducted against a background of intensive delivery commitments, has resulted in transition costs which will largely fall in the current fiscal year. Honouring our promises to clients and ensuring comprehensive knowledge transfer are our top priorities, and are vital for the future of the firm. As anticipated, the migration has already allowed us to streamline some aspects of our product and technology organisation, and we anticipate future cost savings both from similar organisational simplification, as well as improvements in quality arising from closer interaction with the customer services and implementation teams.

Across the firm, we have taken opportunities to streamline costs after the planned period of investment in the previous fiscal year. This cost management process is progressing according to expectations and the Board and the Executive Committee remain fully focussed on transitioning the firm to cash profitability, and we have taken additional cost reduction action to partially offset the revenue delays experienced during the period under review.

Outlook

We recognise that this has been a challenging first half for Lombard Risk. A number of opportunities we had hoped to secure in the period remain in the pipeline as market distractions such as MiFID II caused companies to delay on committing to new projects. This leaves us much to do in the second half, and converting our strong visible pipeline will be crucial in us meeting market forecasts.

However, with the size and quality of our pipeline at an all-time high, we remain confident this can be achieved. During the period strong foundations have been put in place, with an improved salesforce, a new development centre in Birmingham, and a renewed effort to target new business as well as extant cross-selling opportunities. We believe this positions Lombard Risk well for the future and delivery of a strong second half will enable the Company to meet its stated objectives of being cash generative. We look forward to updating the market on progress during the second half of the financial year.

Alastair Brown

Chief Executive Officer

25 October 2017

Consolidated unaudited interim statement of comprehensive income

For the six months ended 30 September 2017

 
                                                 Unaudited       Unaudited 
                                                Six months      Six months       Audited 
                                                     ended           ended    Year ended 
                                              30 September    30 September      31 March 
                                                      2017            2016          2017 
                                Note                GBP000          GBP000        GBP000 
-----------------------------  -----  --------------------  --------------  ------------ 
 Continuing operations 
 Revenue                                            12,690          15,196        34,331 
 Cost of sales                                        (94)            (26)         (122) 
-----------------------------  -----  --------------------  --------------  ------------ 
 Gross profit                                       12,596          15,170        34,209 
 Administrative expenses                          (16,065)        (13,663)      (31,836) 
-----------------------------  -----  --------------------  --------------  ------------ 
 EBITDA                                            (3,469)           1,507         2,373 
 Depreciation, amortisation 
  and impairment                                   (2,425)         (1,686)       (4,061) 
 Net finance income                                      -              66            71 
-----------------------------  -----  --------------------  --------------  ------------ 
 Loss before taxation                              (5,894)           (113)       (1,617) 
 Taxation charge                   3                   (1)            (75)           917 
-----------------------------  -----  --------------------  --------------  ------------ 
 Loss for the period 
  from continuing operations                       (5,895)           (188)         (700) 
-----------------------------  -----  --------------------  --------------  ------------ 
 Loss for the period 
  from continuing operations 
  attributable to: 
 Owners of the Parent                              (5,895)           (188)         (700) 
-----------------------------  -----  --------------------  --------------  ------------ 
 Other comprehensive 
  income 
 Exchange differences 
  on translating foreign 
  operations                                          (39)             103           103 
-----------------------------  -----  --------------------  --------------  ------------ 
 Total comprehensive 
  income for the period                            (5,934)            (85)         (597) 
-----------------------------  -----  --------------------  --------------  ------------ 
 Loss per share 
 Basic (pence)                     2                (1.47)          (0.05)        (0.18) 
 Diluted (pence)                   2                (1.47)          (0.05)        (0.18) 
-----------------------------  -----  --------------------  --------------  ------------ 
 

Consolidated unaudited interim statement of financial position

As at 30 September 2017

 
                                    Unaudited       Unaudited     Audited 
                                        as at           as at       as at 
                                 30 September    30 September    31 March 
                                         2017            2016        2017 
                                       GBP000          GBP000      GBP000 
-----------------------------  --------------  --------------  ---------- 
 Non-current assets 
 Property, plant and 
  equipment                               781             610         942 
 Goodwill                               5,974           6,013       6,013 
 Other intangible assets               21,123          17,920      20,517 
 Trade and other receivables            2,074           1,843       1,758 
 Deferred tax asset                       493             221         493 
-----------------------------  --------------  --------------  ---------- 
                                       30,445          26,607      29,723 
-----------------------------  --------------  --------------  ---------- 
 Current assets 
 Trade and other receivables            6,484           7,770       9,438 
 Cash and cash equivalents                406           6,868       7,008 
-----------------------------  --------------  --------------  ---------- 
                                        6,890          14,638      16,446 
-----------------------------  --------------  --------------  ---------- 
 Total assets                          37,335          41,245      46,169 
-----------------------------  --------------  --------------  ---------- 
 Current liabilities 
 Trade and other payables             (5,539)         (3,784)     (6,373) 
 Deferred income                      (8,343)         (7,812)    (10,460) 
-----------------------------  --------------  --------------  ---------- 
                                     (13,882)        (11,596)    (16,833) 
 Non-current liabilities 
 Trade and other payables                (86)               -       (122) 
-----------------------------  --------------  --------------  ---------- 
 Total liabilities                   (13,968)        (11,596)    (16,955) 
-----------------------------  --------------  --------------  ---------- 
 Net assets                            23,367          29,649      29,214 
-----------------------------  --------------  --------------  ---------- 
 Equity 
 Share capital                          2,433           2,433       2,433 
 Share premium account                 20,620          20,620      20,620 
 Foreign exchange reserves                 41              80          80 
 Other reserves                         2,038           1,908       1,981 
 Retained profit                      (1,765)           4,608       4,100 
-----------------------------  --------------  --------------  ---------- 
 Equity attributable 
  to owners of the Parent              23,367          29,649      29,214 
-----------------------------  --------------  --------------  ---------- 
 

Consolidated unaudited interim statement of changes in equity

For the six months ended 30 September 2017

 
                                                                                                     Total 
                                                                                              attributable 
                                                                                                        to 
                                                                                                       the 
                                                                                    Profit          owners 
                                                  Share     Foreign                    and              of 
                                       Share    premium    exchange       Other       loss             the 
                                     capital    account    reserves    reserves    account         Company 
                                      GBP000     GBP000      GBP000      GBP000     GBP000          GBP000 
---------------------------------  ---------  ---------  ----------  ----------  ---------  -------------- 
 Balance at 1 April 2016               1,958     13,221        (23)       1,800      4,785          21,741 
---------------------------------  ---------  ---------  ----------  ----------  ---------  -------------- 
 Issue of share capital                  475      7,399           -           -          -           7,874 
 Share-based payment charge                -          -           -         119          -             119 
 Share options lapsed or 
  exercised                                -          -           -        (11)         11               - 
 Transaction with owners 
  directly in equity                     475      7,399           -         108         11           7,993 
---------------------------------  ---------  ---------  ----------  ----------  ---------  -------------- 
 Loss for the period                       -          -           -           -      (188)           (188) 
 Other comprehensive income 
 Exchange differences on 
  translating foreign operations           -          -         103           -          -             103 
---------------------------------  ---------  ---------  ----------  ----------  ---------  -------------- 
 Total comprehensive income 
  for the period                           -          -         103           -      (188)            (85) 
---------------------------------  ---------  ---------  ----------  ----------  ---------  -------------- 
 Balance at 30 September 
  2016                                 2,433     20,620          80       1,908      4,608          29,649 
---------------------------------  ---------  ---------  ----------  ----------  ---------  -------------- 
 
 
                                                                                                     Total 
                                                                                              attributable 
                                                                                                        to 
                                                                                                       the 
                                                                                    Profit          owners 
                                                  Share     Foreign                    and              of 
                                       Share    premium    exchange       Other       loss             the 
                                     capital    account    reserves    reserves    account         Company 
                                      GBP000     GBP000      GBP000      GBP000     GBP000          GBP000 
---------------------------------  ---------  ---------  ----------  ----------  ---------  -------------- 
 Balance at 1 October 2016             2,433     20,620          80       1,908      4,608          29,649 
---------------------------------  ---------  ---------  ----------  ----------  ---------  -------------- 
 Share-based payment charge                -          -           -          77          -              77 
 Share options lapsed or 
  exercised                                -          -           -         (4)          4               - 
 Transaction with owners 
  directly in equity                       -          -           -          73          4              77 
---------------------------------  ---------  ---------  ----------  ----------  ---------  -------------- 
 Loss profit for the year                  -          -           -           -      (512)           (512) 
 Other comprehensive income 
 Exchange differences on 
  translating foreign operations           -          -           -           -          -               - 
---------------------------------  ---------  ---------  ----------  ----------  ---------  -------------- 
 Total comprehensive income 
  for the year                             -          -           -           -      (512)           (512) 
---------------------------------  ---------  ---------  ----------  ----------  ---------  -------------- 
 Balance at 31 March 2017              2,433     20,620          80       1,981      4,100          29,214 
---------------------------------  ---------  ---------  ----------  ----------  ---------  -------------- 
 
 
                                                                                                     Total 
                                                                                              attributable 
                                                                                                        to 
                                                                                                       the 
                                                                                    Profit          owners 
                                                  Share     Foreign                    and              of 
                                       Share    premium    exchange       Other       loss             the 
                                     capital    account    reserves    reserves    account         Company 
                                      GBP000     GBP000      GBP000      GBP000     GBP000          GBP000 
---------------------------------  ---------  ---------  ----------  ----------  ---------  -------------- 
 Balance at 1 April 2017               2,433     20,620          80       1,981      4,100          29,214 
---------------------------------  ---------  ---------  ----------  ----------  ---------  -------------- 
 Share-based payment charge                -          -           -          87          -              87 
 Share options lapsed or 
  exercised                                -          -           -        (30)         30               - 
---------------------------------  ---------  ---------  ----------  ----------  ---------  -------------- 
 Transaction with owners 
  directly in equity                       -          -           -          57         30              87 
---------------------------------  ---------  ---------  ----------  ----------  ---------  -------------- 
 Loss for the period                       -          -           -           -    (5,895)         (5,895) 
 Other comprehensive income 
 Exchange differences on 
  translating foreign operations           -          -        (39)           -          -            (39) 
---------------------------------  ---------  ---------  ----------  ----------  ---------  -------------- 
 Total comprehensive income 
  for the period                           -          -        (39)           -    (5,895)         (5,934) 
---------------------------------  ---------  ---------  ----------  ----------  ---------  -------------- 
 Balance at 30 September 
  2017                                 2,433     20,620          41       2,038    (1,765)          23,367 
---------------------------------  ---------  ---------  ----------  ----------  ---------  -------------- 
 

Consolidated unaudited interim statement of cash flow

For the six months ended 30 September 2017

 
                                          Unaudited       Unaudited 
                                         Six months      Six months       Audited 
                                              ended           ended    Year ended 
                                       30 September    30 September      31 March 
                                               2017            2016          2017 
                                             GBP000          GBP000        GBP000 
-----------------------------------  --------------  --------------  ------------ 
 Cash flows from operating 
  activities 
 Loss for the period                        (5,895)           (188)         (700) 
 Tax charge                                       1              75         (917) 
 Net finance income                               -            (66)          (71) 
-----------------------------------  --------------  --------------  ------------ 
 Operating loss                             (5,894)           (179)       (1,688) 
 Adjustments for: 
 Depreciation                                   277             211           414 
 Amortisation and impairment                  2,148           1,475         3,647 
 Share-based payment charge                      87             119           196 
 Decrease / (increase) in trade 
  and other receivables                       1,940         (2,647)       (3,528) 
 (Decrease) / increase in trade 
  and other payables                          (844)           (579)         1,949 
 (Decrease) / increase in deferred 
  income                                    (2,117)             486         3,134 
 Foreign exchange difference                    (2)             103          (18) 
-----------------------------------  --------------  --------------  ------------ 
 Cash (used in) / generated 
  by operations                             (4,405)         (1,011)         4,106 
 Tax credit received / (paid)                   700            (34)          (14) 
-----------------------------------  --------------  --------------  ------------ 
 Net cash (used in) / generated 
  by operating activities                   (3,705)         (1,045)         4,092 
-----------------------------------  --------------  --------------  ------------ 
 Cash flows from investing 
  activities 
 Interest received                                -              66            71 
 Purchase of property, plant 
  and equipment and computer 
  software                                    (183)           (572)         (849) 
 Capitalisation of development 
  expenditure                               (2,688)         (2,797)       (7,505) 
-----------------------------------  --------------  --------------  ------------ 
 Net cash used in investing 
  activities                                (2,871)         (3,303)       (8,283) 
-----------------------------------  --------------  --------------  ------------ 
 Cash flows from financing 
  activities 
 Shares issued, net of issue 
  costs                                           -           7,874         7,874 
 Finance lease payments                        (26)               -          (17) 
-----------------------------------  --------------  --------------  ------------ 
 Net cash (used in) / generated 
  by financing activities                      (26)           7,874         7,857 
-----------------------------------  --------------  --------------  ------------ 
 Net (decrease) / increase 
  in cash and cash equivalents              (6,602)           3,526         3,666 
 Cash and cash equivalents 
  at beginning of period                      7,008           3,342         3,342 
-----------------------------------  --------------  --------------  ------------ 
 Cash and cash equivalents 
  at end of period                              406           6,868         7,008 
-----------------------------------  --------------  --------------  ------------ 
 

Notes to the interim report

For the six months ended 30 September 2017

1. Basis of preparation

This interim report was approved by the Board on 24 October 2017.

These unaudited consolidated financial statements are for the six months ended 30 September 2017. They have been prepared in accordance with International Financial Reporting Standards ("IFRS") and IFRS Interpretations Committee interpretations as at 30 September 2017, as adopted by the European Union. They do not include any of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 March 2017.

The preparation of financial statements under IFRS requires the Board to make judgements, estimates and assumptions that affect the application of accounting policies, the reported amounts of statement of financial position items at the period end and the reported amount of revenue and expense during the reporting period. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements that are not readily apparent from other sources. However, the actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.

This condensed consolidated financial information does not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 March 2017 were approved on 23 May 2017. These accounts, which contain an unqualified audit report under Section 495 of the Companies Act 2006 and which did not make any statements under Section 498 of the Companies Act 2006, have been delivered to the Registrar of Companies in accordance with Section 441 of the Companies Act 2006.

2. Loss per share

Basic loss per share has been calculated by dividing the loss on ordinary activities after taxation attributable to the owners of the Parent by the weighted average number of ordinary shares of 0.5p each ("Ordinary Shares") in issue during each period.

Potential Ordinary Shares are treated as dilutive when, and only when, their conversion to Ordinary Shares would decrease earnings per share or increase loss per share from continuing operations. As potential Ordinary Shares for 30 September 2017 would decrease the loss per share, they are therefore not included in diluted earnings per share.

 
                                   Unaudited       Unaudited 
                                  Six months      Six months       Audited 
                                       ended           ended    Year ended 
                                30 September    30 September      31 March 
                                        2017            2016          2017 
----------------------------  --------------  --------------  ------------ 
 Loss for the period and 
  basic and diluted [loss] 
  attributable to Ordinary 
  Shareholders (GBP000)              (5,895)           (188)         (700) 
----------------------------  --------------  --------------  ------------ 
 Weighted average number 
  of Ordinary Shares             400,593,920     354,589,248   380,046,607 
 Loss per share (pence)               (1.47)          (0.05)        (0.18) 
----------------------------  --------------  --------------  ------------ 
 Effect of dilutive share 
  options: 
 Adjusted weighted average 
  number of Ordinary Shares      400,593,920     354,589,248   380,046,607 
 Diluted loss per share 
  (pence)                             (1.47)          (0.05)        (0.18) 
----------------------------  --------------  --------------  ------------ 
 

3. Taxation

The taxation charge is based on the effective tax rate expected to apply for the full year, taking into account the anticipated benefit of brought forward tax losses. The effective tax rate is higher than the standard tax rate, principally as a result of there being no movement in the deferred tax asset recognised within the Group. In addition, the charge for this interim period includes GBP1,500 of current tax paid by overseas subsidiaries. The cash flow statement includes receipt of the GBP698,000 of R&D tax credit claimed in the 31 March 2016 tax returns as an adjustment in respect of prior periods.

Company information

Company registration number

03224870

Directors

Alastair Brown

Chief Executive Officer

Nigel Gurney

Chief Financial Officer

Philip Crawford

Non-executive Chairman

John McCormick

Senior Non-executive Director

Steve Rogers

Non-executive Director

Sandy Broderick

Non-executive Director

Company Secretary

Nigel Gurney

Registered office

7th Floor

60 Gracechurch Street

London EC3V 0HR

Nominated adviser and joint broker

finnCap Limited

60 New Broad Street

London EC2M 1JJ

Joint broker

WG Partners LLP

85 Gresham Street

London EC2V 7NQ

Auditor

Grant Thornton UK LLP

Grant Thornton House

Melton Street

Euston Square

London NW1 2EP

Corporate solicitors

Memery Crystal LLP

44 Southampton Buildings

London WC2A 1AP

Registrars

Computershare Investor Services PLC

PO Box 859

The Pavilions

Bridgwater Road

Bristol BS99 1XZ

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR GXBDGCUDBGRU

(END) Dow Jones Newswires

October 25, 2017 02:00 ET (06:00 GMT)

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