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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Toople Plc | LSE:TOOP | London | Ordinary Share | GB00BZ8TP087 | ORD 0.01P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.0085 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMTOOP
RNS Number : 5238V
Toople PLC
31 January 2017
31 January 2017
Toople Plc
("Toople" or the "Company" or the "Group")
Final Results
Publication of Annual Report
Toople Plc (LSE: TOOP), a provider of bespoke telecom services to UK SMEs, is pleased to announce its final results for the year ended 30 September 2016.
Highlights:
- Launch of the Toople brand in May 2016
- Strong growth in the second half of the year, driven by consolidation of the wholesale business and acquisition of the Company's first SME customers
- Revenue for the year to 30 September increased to GBP957,749 (2015 GBP36,799) - Revenue grew to GBP555,140 in H2; representing a 38% increase on H1 - Gross margin was GBP77,641 (8.1%) - Loss before Taxation of GBP1,733,578
- Cash at 30 September 2016 of GBP743,824, following one-off costs of listing, repayment of debt, launch of the brand and expansion of the Group's services
Post period highlights:
- Orders across channels steadily increasing, reaching over 200 new orders on average per month since market entry up to 31(st) December2016
- Finessed digital marketing strategy resulting in consistent new customer growth - Expect to achieve a 30% margin over the contract life of a typical customer - Breadth of portfolio driving additional "bolt-on" product sales
- Increased 4G capabilities with the addition of O2 and Vodafone to the offered networks, complementing its existing EE services
- The launch of Toople's new broad cloud business telephony service is expected to be a key driver for new customer acquisition with attractive margins
- The Group is now able to offer a unified communications package
- Accredited by more than 30 of the UKs biggest B2B cashback and comparison sites, with the most notable listings on; uSwitch, Quidco, Topcashback, and Broadband Genie
- Achieved an average customer satisfaction score of 8.5 out of 10 via Trustpilot with its "Right first time" customer service strategy
Andy Hollingworth, CEO, Toople Plc, said, "Since our Standard Listing on the Official List in May 2016, our focus has been to validate the Toople concept and opportunity, and asses the market's willingness to accept a new brand. The Company remains at an early stage and performance thus far has been encouraging, with consistently increasing customer numbers, new product launches and high customer satisfaction scores.
The foundations are in place for us to continue on this positive trajectory, with a scalable platform and experienced Management team. As such, the Company is on course towards its strategic ambition of becoming the UK's leading provider of bespoke telecom services to UK SMEs."
A copy of the Company's Annual Report is available on the Company's website: www.toople.com. An electronic version has been submitted to the National Storage Mechanism, which will shortly be available for inspection at http://www.morningstar.co.uk/uk/NSM. Notice of the Company's Annual General Meeting will be sent to shareholders in due course.
-S -
For further information:
Toople PLC 0800 0499 499
Andy Hollingworth, Chief Executive Officer
Cairn Financial Advisers LLP 020 7 213 0880
Emma Earl / Rebecca Anderson, Financial Adviser
Vicarage Capital 020 3651 2911
Broker
Rupert Williams / Jeremy Woodgate
Redleaf Communications 020 7382 4730
Rebecca Sanders-Hewett toople@redleafpr.com
Sarah Fabietti-Dallison
Sam Modlin
Chairman's Statement
I am pleased to announce the maiden annual results of the Company following its successful admission to the Main Market on 10 May 2016.
The year to 30 September 2016 saw the formation of the Toople Plc Group of companies, following the acquisition of the business of Toople.com in April 2016. This initial period has very much been about validating the Toople concept and the market opportunity, together with assessing the market's willingness to accept a new brand. We are pleased with the results of this process, which has given the Board confidence that there is a real opportunity for a Company such as Toople to build a profitable and cash generative business in the Small Business Sector. Furthermore, the experience gained during the period endorses the Board's belief that the business can deliver strong growth without significantly increasing its direct cost base.
As a result of this activity, it is pleasing to note that the Company delivered strong trading growth in the second half of the year, with revenue growth of 38% compared to the first half of the year. This growth was driven by both the consolidation of the wholesale business and the acquisition of the first SME customers.
Following admission to the market, the initial phase of targeted digital marketing proved to be too competitive and so far, more expensive than anticipated. Management enacted a number of demand generation campaigns in order to determine the most effective method to balance customer acquisition costs relative to the investment and customer lifetime value. The Board is highly cognizant of the need to balance customer acquisition against upfront cash investment and long-term sustainable profitability.
Since the year end, our finessed digital marketing strategy has resulted in consistent new customer growth. The breadth of our portfolio is also driving additional "bolt-on" product sales, which is expected to lead to further half on half revenue growth during 2017.
The year under review has involved a huge amount of sustained activity from management and staff alike. We have gained admission to the Main Market, built the capability of the business, launched the brand, and acquired customers. The Board would therefore like to thank everyone involved for their hard work and contribution during this time.
Richard Horsman
Non-Executive Chairman
Chief Executive Officer's Review
Introduction
During the course of the year, the Group has progressed towards its strategic ambition of becoming the UK's leading provider of bespoke telecom services to UK SMEs.
Since going live in the market less than six months ago, progress has been encouraging, and gives the Board confidence that the Company will deliver further growth in the coming months. Revenue grew to GBP555,140 in the second half of the year, representing a 38% increase on H1, with customer numbers continuing to grow during H1 of 2017.
As at February 2016, there were around 5.4 million SME businesses in the UK. Of these, more than 5 million (96%) fall into the category of having less than 50 employees: this group represents the Group's Target Market. BT are the largest telecoms provider, receiving nearly 50% of the total market fixed line revenues. The Board believes that this market size and share represents a significant opportunity, with early trading suggesting that Toople's brand, price, and approach can be successful.
Strategy and business overview
The Group provides a range of telecoms services primarily targeted at the UK SME market. Its services offered include business broadband, fibre, data services (Ethernet First Mile and Ethernet), business mobile phones, cloud PBX and traditional services (calls and lines), all of which are delivered and managed through Merlin, the Group's proprietary software platform.
The Directors believe that the Merlin platform is a key differentiator for the Group. Merlin provides an end-to-end automated process that allows customers to place orders easily, and enables the business to grow its customer base, without the need to scale expensive resources.
As a result of the in-house Merlin capability, Toople can be very agile in the market. The business had initially assumed that its margins would largely be driven by customers purchasing broadband and calls. Whilst this remains true, the business has also recognised the high-growth, profitable market opportunity that Hosted telephony is fast becoming. Accordingly, the Company has recently brought its global Broad cloud platform to market, with its first customers already signed up.
The market opportunity for Hosted telephony is supported by the latest forecasts from Gartner, Inc., which projects the worldwide public cloud services market to be worth $208.6 billion in 2016*. *Gartner, Inc.: Forecast Analysis: Public Cloud Services, Worldwide, 2Q16 Update Report.
Financial summary
The financial results for the year ended 30 September 2016 include the full year financial results for the operating companies acquired by Toople Plc in April 2016. Revenue for the year ended 30 September 2016 was GBP957,749, which generated a Gross Margin of GBP77,641 (8.1%), recognising the predominance of wholesale revenues across the full year period. Operating Losses were GBP1,714,559 and Losses before Taxation of GBP1,733,578. Loss per share was 2.76p. This includes pre-admission costs in the subsidiaries.
At 30 September 2016, the Group had cash balances totaling GBP743,824. Cash raised on admission was GBP2m: this funded the one-off cost of admission to the market, GBP0.343m (including GBP0.080m recognised in share premium in the year); the repayment of a short-term loan to David Breith, GBP0.065m; and the repayment of the overdraft in the subsidiary businesses, GBP0.103m. The residual cash balance of GBP1.489m has been utilised in the business to fund working capital and to make investments in building the brand, acquiring customers and increasing the capability of the business.
At 30 September 2016, the Group was partially financed by loans from David Breith, a major shareholder. The loans cannot be recalled until the third anniversary of the agreement, and after this date only if the Board consider the Company to be in a position to service the debt.
Operational update
Henry Howard Finance Agreements
In May, the Group announced an agreement with Henry Howard Finance plc ("HHF"), to facilitate the launch of its mobile phone offering, without the need for a large, and risky, cash outlay to fund handsets. Since then, the favourable commercial terms the Company has with its suppliers, has changed the funding model, so that the Company retains the risk and cashflow benefits, without the need to use the HHF facility.
Increased mobile network propositions
Also in May, the Company added both O2 and Vodafone to the networks supporting its mobile offering on 4G capability, to complement its existing EE services. This was 5 months ahead of the original target date, allowing the Company to launch its mobile propositions earlier than planned. The Company's mobile propositions are aligned with Toople's values, offering highly competitive fixed price calls, texts and data bundles, to SMEs.
Post period update
Customer numbers
Since launch, the Company has been steadily increasing the number of customers it attracts to its platform, with orders across all its channels steadily increasing, reaching over 200 new orders on average per month, since market entry up to 31st December 2016. The Directors are targeting an increased average monthly order rate during 2017.
As the business grows, absolute customer numbers will become a less relevant metric due to the increase in the number of customers taking more than one product. Going forward, the Company believes it is appropriate to report on Revenue Generating Units ("RGUs"), which will represent the number of individual services that result in recurring billable revenue and margin. This can encompass telephone lines; broadband lines, data lines, sim cards and hosted seats. This performance measure is in line with industry standards.
Marketing opportunities
The management team continues to use its telecoms experience to identify marketing opportunities that it considers to offer the best return on investment. The current cost of customer acquisition ranges between GBP40 and GBP91 per customer. The Company expects to achieve a 30% margin over the contract life of a typical customer. The majority of customer contracts are 24 months on broadband and mobile and 36 months on hosted telephony
Comparison site recognition
Toople has been accredited by more than 30 of the UKs biggest business-to-business cashback and comparison sites, with the most notable listings on; uSwitch, Quidco, Topcashback, Money Supermarket and Broadband Genie. Orders online and over the phone have already started to be received through these websites. Brand presence on these sites will also drive overall brand recognition for the Company resulting in organic brand search achieving lower customer acquisition costs overall.
Customer service
Customer service is central to Toople's strategy and Toople.com aims to attract and retain its customers by delivering "right first time" UK based customer service. It is therefore pleased to have achieved an average customer satisfaction score of 8.5 out of 10 via Trustpilot, which is significantly higher than the average scores achieved by the leading companies operating in the sector. Customer experience is critical to delivering best in class retention rates: and as customer contracts mature, provides the Company the best opportunity to sell more than one product to re-contracting customers.
Wholesale customers
In addition to its SME customer base, the Group provides telecoms services (minutes, lines, broadband, cloud PBX) and billing functionality, through the Company's bespoke telecoms platform, Merlin, to a number of wholesale customers. These services are provided on a license fee and provision agreement.
There continues to be a number of orders for these services, and whilst the wholesale market is not the strategic focus of the Company, it will continue to monitor and review potential opportunities for revenue and margin growth going forward.
Senior management changes
On 21 November, 2016, Mark Evans was appointed Chief Operating Officer, having joined Toople shortly after admission. Mark had been leading the Company's digital channel sales and contact centre strategy since launch.
With more than 14 years' industry experience and having previously held senior positions at O2, Mark now leads the Toople customer engagement functions both from a people, software and channel marketing perspective. Mark and the team are focused on ensuring the Group's back office process is best in class and delivering a great customer experience to small businesses.
Telephony Service Launch
In H1 2017 the Company launched a new cloud business telephony service for its SME target market, and wholesale customers. The two simple propositions: Toople.com Classic and Toople.com Premium, provide an efficient way for small businesses to have a reliable, maintenance free phone system that requires minimum capital expenditure and no advance payment.
These products can be ordered on line or over the phone, with unlimited calls bundles for a fixed monthly fee and come with the handset included in the seat price. Toople.com Premium provides customers with full phone system functionality and mobility via an additional IOS or Andriod app on their mobile, tablet or laptop. Customers will be able to take their office with them on any device, ensuring they never miss a call.
The services also offer the added ability to cross sell and up sell into the existing customer base, which the business is already seeing early signs of success with.
The launch of Toople's business phone systems enables the Company to deliver complete unified communications to its small business customers. The Company believes this service will become an increasingly important part of its proposition mix, being a great value-add for existing customers, and a key driver for new customer acquisition with good margin and cash generation for the Company.
Merlin platform
The integration of the Group's proprietary bespoke telecoms platform, Merlin, into the business has been completed. Toople continues to own the full Intellectual Property Rights for the platform.
EU Referendum / Brexit
Whilst the process to leave the EU will provide a period of uncertainty for UK small businesses, the Company believes that Toople's transparency, fixed prices and service levels will continue to appeal to business owners.
Ofcom regulation
Ofcom's plans to close the gap in fibre deployment between the UK and some continental European countries, in order to ensure everyone has the right to request service of 10 megabits per second by 2020, is fully supported by the Board. The Board considers the proposed changes to BT Group Plc's network to ease access for competitors, to be an opportunity for a new company to enter and establish itself in the UK market. Toople believes it will give transparency for infrastructure investment, R&D and a cost base equitable to all service providers. However, there is still a way to go to guarantee the speeds that countries such as Spain and Japan deliver.
Toople will remain a strong voice within the UK SME regulatory and legislative environment, its core customer segment.
Prospects
While it is still early days for the Company, its performance thus far is encouraging. The upward trend in orders and revenue demonstrates that the SME market is prepared to accept a new brand and Toople remains well placed to take advantage of the market opportunity that exists, with its competitive propositions in broadband, mobile, and increasingly, Hosted telephony. The Toople brand and its associated values is now successfully launched in the market, and the Board believes it will generate future growth. The Company will always follow a profitable market share growth strategy rather than just market share at all costs.
My thanks go to customers, shareholders, and most importantly the team here at Toople for what has been delivered so far.
Andrew Hollingworth
Chief Executive Officer
Strategic Report
The Directors present the Strategic Report of Toople Plc for the year ended 30 September 2016.
Principal Activities
The Company is newly incorporated, on 2 March 2016, for the purpose of becoming a holding company for the Group. The Group consists of the Company and a number of wholly owned subsidiaries with the main operating entities being Toople.com Limited and AskMerlin Limited. In April 2016, the Company successfully completed the acquisition of the business of Toople.com and in May 2016 completed the fundraising necessary to develop the business.
Toople.com is a business that provides a range of telecoms services primarily targeted at the UK SME market. Services offered by the business include business broadband, fibre, Ethernet First Mile and Ethernet data services, business mobile phones, cloud PBX and SIP Trunking and traditional services (calls and lines) all of which are delivered and managed through Merlin, the Group's proprietary software platform.
Review of business in the year
Details of the Company's strategy, business model, results and prospects are set out in the Chairman's Statement and in the Chief Executive Officer's Review on pages 3 - 6.
Key Performance Indicators
At this stage in its development, the Company is focusing on the establishment and development of the business of Toople.com.
The Group monitors its key performance indicators (KPI's) regularly. In this, its first period of trading as a Group, the KPI's are set out below:
Hot Features
Premium
Revenue Gross profit Loss per share
GBP'000 GBP'000 (pence)
------ --------- ------------- ---------------
2016 958 78 (2.76)
------ --------- ------------- ---------------
2015 37 (39) (1.02)
------ --------- ------------- ---------------
In future periods, when the activities of the Group are more developed, the Directors intend to publish additional KPI's including:
-- Cost of acquisition per customer -- New orders serviced (Revenue Generating Units) -- Customer satisfaction scores
Social/Community/Human rights matters
The Company operates a gender diverse business, and would ensure any future employment took into account the necessary diversity requirements and compliance with all employment law. The Board has experience in dealing with such issues and sufficient training/qualifications to ensure they would meet all requirements.
Principal risks and uncertainties relating to the Company's business strategy
The Group operates in an uncertain environment and is subject to a number of risk factors.
The Company's prospectus included a detailed assessment of the risks facing the business. The Directors consider the following risk factors are of particular relevance to the Group's activities, although it should be noted that the list is not exhaustive and that other risk factors not presently known or currently deemed immaterial may apply.
-- The Company will be dependent on the ability of the Directors to identify suitable investment opportunities and to implement the Company's strategy. There is no assurance that the Company's business strategy will ultimately be successfully developed
-- As the Group has a limited trading history, actual performance may differ materially from expectations and the Group may generate sustained losses
-- The Group anticipates being able to sell multiple products to customers in a competitive market. The marketing investment estimated to be required by the Group may not be sufficient to attract the number of customers that the Group intends to target
-- The loss of, or inability to attract key personnel could adversely affect the business of the Group
-- The technology upon which the Group's products and services are based may become obsolete; in particular, the Group is reliant on the technical robustness of its software platform
-- An increase in supplier costs could result in significantly reduced gross profit margins
-- The ownership and use of intellectual property by the Group may be challenged by third parties or otherwise disputed
-- The Group may require additional capital in the medium to long term and no assurance can be given that such capital will be available on terms acceptable to the Group, or at all
-- By the very nature of the Group's business, it is expected that from time to time the Group will be subject to complaints or claims in the normal course of business
-- The Company is exposed to the risk that third parties that owe the Group money, securities or other assets may not fulfil their obligations. These parties may default on their obligations due to bankruptcy, lack of liquidity, operational failure or other reasons
-- The Group's performance could be adversely affected by poor economic conditions in the UK
-- The Group's infrastructure and systems could be targeted by cyber attacks
-- The pricing environment in the telecoms industry could become more difficult than anticipated
-- The UK telecoms market is subject to regulation by Ofcom and subject to high incidence of fraud and bad debt risk
The Directors seek to mitigate these risks by applying their considerable experience of operating businesses in the sector and by devising trading and operating strategies designed to seek out and exploit profitable trading opportunities whilst seeking to protect the business from downside risks.
Composition of the Board
A full analysis of the Board, its function, composition and policies, is included in the remuneration report. A gender analysis is included in the governance report.
Capital structure
The Company's capital consists of ordinary shares which rank pari passu in all respects which are traded on the Standard segment of the Main Market of the London Stock Exchange. David Breith and Andrew Hollingworth, who together own 65% of the Company's ordinary share capital, have entered into a relationship agreement with the Company to ensure that the Board of the Company operates independently of them and that all decisions taken by the Board will be made for the benefit of shareholders as a whole. There are no restrictions on the transfer of securities in the Company or restrictions on voting rights and none of the Company's shares are owned or controlled by employee share schemes. There are no arrangements in place between shareholders that are known to the Company that may restrict voting rights, restrict the transfer of securities, result in the appointment or replacement of directors amend the Company's articles of association or restrict the powers of the Company's directors, including in relation to the issuing or buying back by the company of its shares or any significant agreements to which the company is a party that take effect after or terminate upon, a change of control of the company following a takeover bid or arrangements between the Company and its directors or employees providing for compensation for loss of office or employment (whether through resignation, purported redundancy or otherwise) that may occur because of a takeover bid.
Environmental and other regulatory requirements
In the event of a breach with any environmental or regulatory requirements this may give rise to reputational, financial or other sanctions against the Company, and therefore the Board considers these risks seriously and designs, maintains and reviews its policies and processes so as to mitigate or avoid these risks.
Approved by the Board on 30 January 2017.
Richard Horsman
Chairman
Independent auditor's report to the members of Toople Plc
Opinion on financial statements
In our opinion the financial statements:
-- give a true and fair view of the Group's and of the Parent Company's state of affairs as at 30 September 2016 and of the Group's loss for the year then ended;
-- have been properly prepared in accordance with IFRSs as adopted by the European Union;
-- the parent Company financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006; and
-- have been prepared in accordance with the requirements of the Companies Act 2006 and, as regards the group financial statements, Article 4 of the IAS Regulation.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion:
-- the part of the Directors' Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006; and
-- the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements.
Basis for opinion
We have audited the financial statements of Toople Plc for the year ended 30 September 2016 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated and parent company statement of Financial Position, the Consolidated and parent company statement of Cash Flows, the Consolidated and parent company Statement of Changes in Equity and the related notes numbered 1 - 19.
The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
Respective responsibilities of Directors and auditors
As explained more fully in the Statement of Directors Responsibilities, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit an express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Out audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements on our audit and on the financial statements. For the purposes of determining whether the financial statements are free from material misstatement we define materiality as the magnitude of misstatement that makes it probable that the economic decisions of a reasonably knowledgeable person, relying on the financial statements, would be changed or influenced. We also determine a level of performance materiality which we use to determine the extent of testing needed to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the financial statements as a whole.
Independent auditor's report to the members of Toople Plc (continued)
When establishing our overall audit strategy, we determined a magnitude of uncorrected misstatements that we judged would be material for the financial statements as a whole. We determined materiality for the Company to be GBP60,000, which is approximately 4% of the loss before taxation for the period after adjusting for admission costs charged as an expense. Our objective in adopting this approach is to ensure that total detected and undetected audit differences do not exceed our materiality of GBP60,000 for the financial statements as whole. We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of GBP1,000, as well as differences below that threshold that, in our view, warranted reporting.
The Scope of our audit
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Directors; and the overall presentation of the financial statements. In addition we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
Our assessment of risks of material misstatement
We identified the risks that we believe to have had the greatest impact on our audit strategy and scope. We scoped our response to the significant risks identified as follows:
Risk Response
-------------------------------------------------------- ------------------------------------------------------------
The basis of preparation and accounting for the We reviewed the accounting treatment adopted, discussed
share for share exchange in which the Company acquired alternative treatments with management and concluded
its subsidiaries is a judgemental area and could that the accounting treatment adopted best reflects
give rise to a material misstatement the substance of the share for share exchange transaction.
-------------------------------------------------------- ------------------------------------------------------------
The fair value of long term financial liabilities We reviewed the loan documentation to agree the
with interest charges at below market rates may terms of the underlying loan. We reviewed management's
be misstated calculation of the present value of the loan and
the discount rate applied. We reviewed the accounting
entries recording the fair value of the liability
at the recognition date and the subsequent recognition
of the interest charge to the year end.
-------------------------------------------------------- ------------------------------------------------------------
Matters on which we are required to report by exception
We have nothing to report in respect of the following:
Under the International Standards on Auditing (UK and Ireland), we are required to report to you if, in our opinion, information in the annual report is:
-- materially inconsistent with the information in the audited financial statements; or
-- apparently materially incorrect based on, or materially inconsistent with, our knowledge of the Company acquired in the course of performing our audit; or
-- otherwise misleading
Independent auditor's report to the members of Toople Plc (continued)
In particular, we are required to report to you if;
-- we have identified any inconsistencies between our knowledge acquired during the audit and the Directors' statement that they consider the annual report is fair, balanced and understandable; or
-- the annual report appropriately discloses those matters that we communicated to the audit committee which we consider should have been disclosed.
Under the Companies Act 2006, we are required to report to you if, in our opinion:
-- certain disclosures of Directors' remuneration specified by law are not made; -- we have not received all the information and explanations we require for our audit;
-- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-- the financial statements are not in agreement with the accounting records and returns.
We also confirm that we do not have anything material to add or to draw attention to in relation to:
-- the Directors' confirmation in the annual report that they have carried out a robust assessment of the principal risks facing the group including those that would threaten its business model, future performance, solvency or liquidity;
-- the disclosures in the annual report that describe those risks and explain how they are being managed or mitigated;
-- the Directors' statement in the financial statements about whether they have considered it appropriate to adopt the going concern basis of accounting in preparing them, and their identification of any material uncertainties to the group's ability to continue to do so over a period of at least twelve months from the date of approval of the financial statements; and
-- the Directors' explanation in the annual report as to how they have assessed the prospects of the Group, over what period they have done so and why they consider that period to be appropriate, and their statement as to whether they have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment, including any related disclosures drawing attention to any necessary qualifications or assumptions.
Stephen Bullock
Senior Statutory Auditor
For and on behalf of
Crowe Clark Whitehill LLP
Statutory Auditor
London
30 January 2017
Consolidated statement of comprehensive income
NOTE Year ended Year ended
30 Sep 2016 30 Sep 2015
-------------------------------------- ----- ------------ ------------
Continuing operations GBP GBP
Revenue 957,749 36,799
Cost of sales (880,108) (76,083)
------------ ------------
Gross profit/(loss) 77,641 (39,284)
Administrative expenses (1,792,200) (381,278)
Operating loss (1,714,559) (420,562)
Interest payable and similar charges (20,041) -
Interest receivable 1,023 -
Loss before taxation 3 (1,733,578) (420,562)
------------ ------------
Taxation 4 - 21,336
Loss for the year (1,733,578) (399,226)
------------ ------------
Other comprehensive loss for the - -
year
Total comprehensive loss for the
year attributable to the equity
owners of the parent (1,733,578) (399,226)
Loss per share
Basic and diluted loss per share
(pence) 5 (2.76) (1.02)
The notes to the financial statements form an integral part of these financial statements.
Consolidated statement of financial position
As at As at
Note 30 Sep 2016 30 Sep 2015
GBP GBP
----------------------------------------- ------------ ------------
Assets
Non-current assets
Intangible assets 6 14,546 2,328
------------ ------------
14,546 2,328
------------ ------------
Current assets
Trade and other receivables 7 223,674 194,758
Cash and cash equivalents 8 743,824 130,853
------------ ------------
967,498 325,611
------------ ------------
Total assets 982,044 327,939
------------ ------------
Equity and liabilities
Share capital 9 66,700 26,013
Share premium 1,900,245 -
Merger reserve (25,813) (25,813)
Share based payment reserve 24,130 -
Capital contribution reserve 137,616 -
Accumulated deficit (1,975,364) (260,851)
------------ ------------
Total equity 127,514 (260,651)
------------ ------------
Current liabilities
Trade and other payables 10 385,390 588,590
------------ ------------
385,390 588,590
------------ ------------
Non-current liabilities
Financial liabilities - borrowings 10 469,140 -
------------ ------------
469,140 -
------------ ------------
Total equity and liabilities 982,044 327,939
------------ ------------
The notes to the financial statements form an integral part of these financial statements
This report was approved by the Board and authorised for issue on and signed on its behalf by;
Andrew Hollingworth
Director
30 January 2017
Company Registration Number: 10037980
Consolidated statement of changes in equity
Share Share premium Share Capital Accumulated Total
capital Merger based contribution deficit
reserve payment Reserve
reserve
GBP GBP GBP GBP GBP GBP GBP
--------------------- --------- -------------- --------- --------- -------------- ------------ ------------
Brought
forward
at 1 October
2015 26,013 - (25,813) - - (260,851) (260,651)
Loss for
the year - - - - - (1,733,578) (1,733,578)
--------- -------------- --------- --------- -------------- ------------ ------------
Total comprehensive
loss for
the year - - - - - (1,733,578) (1,733,578)
Transactions with owners
Share based
payment
charge
credited
to equity - - - 24,130 - 24,130
Issue of
share capital
net of
share issue
costs 40,687 1,900,245 - - - 1,940,932
Equity
component
of interest
free loan - - - - 156,681 - 156,681
Transfer
of interest
accrued - - - - (19,065) 19,065 -
--------- -------------- --------- --------- -------------- ------------ ------------
At 30 September
2016 66,700 1,900,245 (25,813) 24,130 137,616 (1,975,364) 127,514
--------- -------------- --------- --------- -------------- ------------ ------------
Consolidated statement of changes in equity (continued)
Share based Capital
Share Merger payment contribution Accumulated
capital Share premium reserve reserve deficit Total
GBP GBP GBP GBP GBP GBP GBP
------------------- -------------- -------------- --------- ------------ -------------- ------------ ----------
Brought forward
at 1 October
2014 26,013 - (25,813) - - 138,375 138,575
Loss for
the year - - - - - (399,226) (399,226)
-------------- -------------- --------- ------------ -------------- ------------ ----------
Total
comprehensive
loss for
the year - - - - - (399,226) (399,226)
Transactions with owners
Issue of
share capital
net of share
issue costs - - - - - - -
-------------- -------------- --------- ------------ -------------- ------------ ----------
At 30 September
2015 26,013 - (25,813) - - (260,851) (260,651)
-------------- -------------- --------- ------------ -------------- ------------ ----------
Share capital comprises the ordinary share capital of the Company.
Share premium represents the aggregated excess of the fair value of consideration received for shares issued over par value in respect of shares issued by the Company net of attributable share issue costs and other permitted reductions.
The merger reserve arose on the share for share exchange is described in note 2a.
Share based payments reserve represents the cumulative value of share based payments recognised through equity.
Capital contribution reserve represents the present value adjustment to the interest free loan detailed in note 10.
Accumulated deficit represent the aggregate retained deficit of the Group.
The notes to the financial statements form an integral part of these financial statements.
Consolidated statement of cash flows
Year ended 30 Year ended
Sep 2016 30 Sep 2015
GBP GBP
---------------------------------------------- -------------- -------------
Cash flows from operating activities
Operating loss (1,714,559) (420,562)
Adjustments for:
Depreciation and amortisation 4,914 8,861
Loss on disposal of fixed assets 2,328 35,411
Share based payment charge 21,050 -
Changes in working capital
Increase in receivables (28,916) (96,082)
Increase/(decrease) in payables 292,318 (66,094)
Net cash outflow from operating
activities (1,422,865) (573,877)
-------------- -------------
Cash flows from financing activities
Proceeds from issues of share
capital net of issue costs 1,940,932 -
Finance costs (976) -
Proceeds from shareholder loan 177,657 512,141
Repayment of loan (65,000) -
Net cash from financing activities 2,052,613 512,141
-------------- -------------
Cash flows from investing activities
Acquisition of intangible fixed
assets (17,800) (2,328)
Finance income 1,023 -
Net proceeds from disposal
of fixed assets - 194,436
Net cash (used in)/from investing
activities (16,777) 192,108
-------------- -------------
Net increase in cash and cash equivalents 612,971 130,372
Cash and cash equivalents at
start of year 130,853 481
-------------- -------------
Cash and cash equivalents at
end of year 8 743,824 130,853
-------------- -------------
The notes to the financial statements form an integral part of these financial statements
Notes to the consolidated financial statements
1. General Information a) Nature of operations
The Company was incorporated in England and Wales on 2 March 2016 as a public limited company. The Company's registered office is located at PO Box 501, The Nexus Building, Broadway, Letchworth Garden City, Hertfordshire, SG6 9BL.
The Group provides a range of telecoms services primarily targeted at the UK SME market. Services offered by the Group include business broadband, fibre, Ethernet First Mile and Ethernet data services, business mobile phones, cloud PBX and SIP Trunking and traditional services (calls and lines) all of which are delivered and managed through Merlin, the Group's proprietary software platform.
b) Component undertakings
The undertakings included in the financial statements are as follows:
Name Incorporated Activities Capital % held ------------------- ----------------- ---------------------- ----------------- ------- Toople.com Provision of Limited England & Wales telecoms services Ordinary shares 100% ------------------- ----------------- ---------------------- ----------------- ------- Ask Merlin Limited England & Wales Software development Ordinary shares 100% ------------------- ----------------- ---------------------- ----------------- ------- Toople Finance Limited England & Wales Dormant Ordinary shares 100% ------------------- ----------------- ---------------------- ----------------- ------- Toople Management Services Limited England & Wales Dormant Ordinary shares 100% ------------------- ----------------- ---------------------- ----------------- ------- Ask Merlin Poland sp Zoo* Poland Software development Ordinary shares 100% ------------------- ----------------- ---------------------- ----------------- ------- -- Owned by Ask Merlin Limited 2. Summary of Significant Accounting Policies
The principal accounting policies adopted by the Company in preparation of these financial statements are set out below:
a) Basis of Preparation
The financial statements have been prepared in accordance with International Financial
Reporting Standards ("IFRS") as adopted for use by the European Union, and effective,
or issued and early adopted, as at the date of these statements. The financial statements
have been prepared under the historical cost convention.
On 15 April 2016, the Company entered into four share for share exchange agreements with David Breith pursuant to which the Company acquired the entire issued share capital of each of Toople.com Limited, Toople Finance Limited, Toople Management Services Limited and AskMerlin Limited (together the "Subsidiaries") in consideration for the issue and allotment to David Breith of 39,000,000 ordinary shares in the Company.
The Directors consider the substance of the acquisition of the Subsidiaries by the Company to have been a reverse asset acquisition by the Subsidiaries and that the substance of the Subsidiaries was that of a single business under common ownership and control. Further, the Directors consider that the Company did not meet the definition of a business set out in IFRS3 'Business combinations'. As a consequence, the Directors consider that the transaction which gave rise to the formation of the Group fell outside the scope of IFRS3 and have applied the business reorganisation principles of UK GAAP to account for the combination. The consolidated financial statements therefore present the combination as a continuation of the combined financial information of the Subsidiaries with no goodwill arising on the transaction. The financial information prior to the date of the combination on 15 April 2016 is pro forma.
At the date of approval of these financial statements, certain new standards, amendments and interpretations have been published by the International Accounting Standards Board but are not as yet effective and have not been adopted early by the Group. All relevant standards, amendments and interpretations will be adopted in the Group's accounting policies in the first period beginning on or after the effective date of the relevant pronouncement.
The Directors do not anticipate that the adoption of these standards, amendments and interpretations will have a material impact on the Group's financial statements in the periods of initial application except that:
IFRS15 'Revenue from contracts with customers' may have an impact on revenue recognition and related disclosures. IFRS15 is effective for annual periods beginning on or after 1 January 2018 and will be applied retrospectively. At this point it is not practicable for the Directors to provide an estimate of the effect of IFRS15 as a detailed review of this standard is ongoing in light of the Group's evolving business model.
IFRS16 'Leases' is expected to result in the capitalisation of a significant portion of the Group's operating leases. IFRS16 is effective for annual periods beginning on or after 1 January 2019 and may be applied retrospectively.
b) Going Concern
The Group's business activities and financial position, together with the factors likely to affect its future development, performance and position are set out in the front end of the financial statements.
The Directors have carried out a detailed assessment of going concern as part of the financial reporting process, taking into consideration a number of matters including forecast cash flows for a period of at least 12 months from the date of approval of the FS, medium and long term business plans and expectations.
On the basis of their assessment, the Directors have concluded that it is appropriate to prepare the financial statements on a going concern basis, see note 2 (c).
c) Significant accounting judgements, estimates and assumptions
Management consider the significant accounting judgements, estimates and assumptions used within the financial statements to be:
Going concern
At 30 September 2016 the Group had GBP743k of cash and net assets of GBP128k, this includes the non-current liability owed to a shareholder that (at the option of the company) is not payable until 2019, and then only at the Boards discretion with reference to liquidity of the business. Having undertaken a detailed budgeting exercise covering a period of at least 12 months from the date of approval of the financial statements, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future and therefore continue to adopt the going concern basis of accounting in preparing the annual financial statements.
The going concern basis of accounting has been applied based on management's consideration of financial projections and business plan for the business, these include a number of forward looking assumptions about the future growth in the customer base and a reduction in costs following the successful website development, digital marketing, and Merlin integration with its associated consultants and agencies.
d) Financial Instruments
Financial assets and liabilities are recognised in the Company's statement of financial position when the Company becomes a party to the contractual provisions of the instrument. The Company currently does not use derivative financial instruments to manage or hedge financial exposures or liabilities.
e) Trade and Other Receivables and Payables
Trade and other receivables and trade and other payables are initially recognised at fair value. Fair value is considered to be the original invoice amount, discounted where material, for short-term receivables and payables. Long term receivables and payables are measured at amortised cost using the effective interest rate method.
f) Taxation
Current tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the tax authorities. The tax rates and the tax laws used to compute the amount are those that are enacted or substantively enacted by the statement of financial position date.
Deferred tax
Deferred income tax is recognised on all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements, with the following exceptions:
-- deferred income tax assets are recognised only to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, carried forward tax credits or tax losses can be utilised. Deferred income tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply when the related asset is realised or liability is settled, based on tax rates and laws enacted or substantively enacted at the statement of financial position date.
g) Revenue recognition
Revenue is measured at the fair value of consideration received and receivable and represents amounts received for services provided in the course of ordinary activities, net of discounts and sales related taxes.
Services and installation- the Group provides multiple services including the provision of broadband, mobile phones, telephony calls and minutes and wholesale services; revenue is recognised as the services are performed with up front connection fees charges charged at point of installation and a fixed monthly fee on all services. Calls to certain destinations can be bought by customers under fixed price bundles which are recognised as monthly fees. Where calls are made outside these bundles, they are treated as a variable revenue stream based on a number of minutes multiplied by unit price, recognised at the point of usage.
h) Segmental reporting
For the purpose of IFRS 8 the chief operating decision maker ("CODM") is the Board of Directors. The Directors are of the opinion that the business comprises a single economic activity, being the provision of telephony services and that currently this activity is undertaken solely in the United Kingdom. All of the income and non-current assets are derived from the United Kingdom. The Company has a single customer that, in the reporting period, amounted to more than 10% of the Company revenue, revenue generated from this customer amounted to GBP568,796. At meetings of the Directors, income, expenditure, cash flows, assets and liabilities are reviewed on a whole Group basis. Based on the above considerations there is considered to be one reportable segment only namely telephony services.
Therefore, the financial information of the single segment is the same as that set out in the consolidated statement of comprehensive income, consolidated statement of financial position, consolidated statement of changes to equity and the consolidated statement of cash flows.
i) Share based payments
The cost of equity settled transactions is recognised, together with any corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date when the individuals become fully entitled to the award ('vesting period'). The cumulative expense recognised for equity settled transactions at each reporting date until the vesting date has expired represents the Group's best estimate of the number of equity instruments and the value which will ultimately vest. The statement of comprehensive income charge for the period represents the movement in the cumulative expense recognised at the end of that period.
The fair value of share based remuneration is determined at the date of grant and recognised as a expense in the statement of comprehensive income on a straight line basis over the vesting period taking into account the estimated number of shares that will vest. Unless otherwise stated the value is determined by use of a Black-Scholes model.
j) Financial risk management objectives and policies
The Group does not enter into any forward exchange rate contracts.
The main financial risks arising from the Group's activities are cash flow interest rate risk, liquidity risk, price risk (fair value) and credit risk. The Board reviews and agrees policies for managing each of these risks and they are summarised as:
Cash flow interest rate risk - the Group's exposure to the risk of changes in market interest rates relates primarily to the Group's overdraft accounts with major banking institutions and on loans from shareholders
Liquidity risk - the Company raises funds as required on the basis of budgeted expenditure and inflows. When funds are sought, the Company balances the costs and benefits of equity and debt financing. When funds are received they are deposited with banks of high standing in order to obtain market interest rates.
Credit risk - with respect to credit risk arising from other financial assets of the Group, which comprise cash deposits and accounts receivable, the Group's exposure to credit risk arises from default of the counterparty, with a minimum exposure equal to the carrying amount of these instruments. The credit risk on cash is limited as cash is placed with substantial financial institutions.
k) Borrowings
Borrowings are recorded in accordance with IAS 32.
l) Equity
Equity instruments issued by the Company are recorded net at proceeds after direct issue costs.
m) Intangible assets
All intangible assets, are stated at cost less accumulated amortisation and any accumulated impairment losses. The Group's intangible assets arise from expenditure relating to website development.
These are amortised over their useful lives which are individually assessed:
Website development - 2 years
3. Loss before taxation
The loss before taxation is stated after charging:
Year ended Year ended
30 Sep 16 30 Sep 15
----------- -----------
GBP GBP
Depreciation and amortisation 4,914 8,861
Loss on disposal of intangible fixed 2,328 -
assets
Loss on disposal of tangible fixed
assets - 35,411
Impairment of trade receivables 15,864
Fees payable to the Company's auditor
for the audit of the Company's annual
accounts 21,000 1,000
Payments made under operating leases 92,283 8,347
Share based payment charges 21,050 -
Administrative expenses include:
Admission costs* 263,136 - Marketing costs 342,552 105,504 Wages (including Directors) 322,600 107,796 Social security (including Directors) 30,279 11,661 Customer service 147,193 -
* A commission of GBP80,000 was payable to the brokers following the Company's listing on the London Stock Exchange and this has been recognised against the share premium account.
4. Taxation
Analysis of charge in the year
Year ended Year ended
30 Sept 30 Sept
2016 2015
GBP GBP
Current tax:
UK corporation tax on loss for - -
the year
Deferred tax release - 21,336
--------------- -----------------
Tax on loss on ordinary activities - 21,336
Loss on ordinary activities
before tax (1,733,578) (420,562)
Analysis of charge in the year
Loss on ordinary activities
multiplied by small companies
rate of corporation tax in the
UK of 20% (346,716) (84,112)
Tax effects of:
Non-deductible expenses 810 -
Trading losses carried forward 345,906 84,112
Deferred tax release - 21,336
-------------- --------------
- 21,336
Current tax charge for the year
as above
The Group has accumulated tax losses arising in the UK of approximately GBP2,150,000 (2015: GBP421,000) that are available, under current legislation, to be carried forward against future profits.
No deferred tax asset has been recognised in respect to these losses due to the uncertainty of future trading profits.
5. Loss per share
The calculation of loss per share is based on the following loss and number of shares:
Year ended Year ended
30 Sep 16 30 Sep 15
------------ -----------
Loss for the year from
continuing operations (1,733,578) (399,225)
------------ -----------
Weighted average shares in issue
Basic and diluted number
of shares 62,898,630 39,000,000
Basic and diluted loss
per share (2.76) (1.02)
As detailed in note 2a, the consolidated financial statements present the combination as a continuation of the combined financial information of the Subsidiaries with no goodwill arising on the transaction. Basic loss per share is calculated by dividing the loss for the year from continuing operations of the Company by the weighted average number of ordinary shares in issue during the year.
The Company has in issue warrants at 30 September 2016, these are detailed in note 9. The inclusion of the warrants in the weighted average number of shares in issue would be anti dilutive and therefore they have not been included.
6. Intangible assets
Website Development Year ended Year ended
costs 30 Sep 16 30 Sep 15
GBP GBP
Cost or valuation
Costs brought forward 2,328 -
Additions 17,800 2,328
Disposals (2,328) -
----------- -----------
Costs carried forward 17,800 2,328
----------- -----------
Accumulated amortisation
Amortisation brought - -
forward
Charge for the year 3,254 -
----------- -----------
Amortisation carried 3,254 -
forward
----------- -----------
Net book value 14,546 2,328
----------- -----------
Assets are amortised at 50% on a straight- line basis over their expected useful lives.
7. Trade and other receivables
As at As at
30 Sep 16 30 Sep 15
Current GBP GBP
Trade receivables 16,912 44,371
Other receivables 125,312 150,387
Prepayments and accrued 81,450 -
income
223,674 194,758
----------- -----------
There are no material differences between the fair value of trade and other receivables and their carrying value at the year end.
At 30 September 2015 no receivables were past due or impaired, at 30 September 2016 management reviewed the trade receivables balance and have recognised an impairment charge of GBP15,864 against receivables where there is uncertainty over recoverability.
8. Cash and cash equivalents
30 Sep 16 30 Sep 15
GBP GBP
Bank current account 743,824 130,853
----------- -----------
9. Called up share capital
Ordinary shares of 0.0667 pence No Nominal value
per share GBP
On incorporation 36,000,000 24,012
Shares issued on acquisition
of Subsidiaries 39,000,000 26,013
Share placing 25,000,000 16,675
Share capital at 30 September
2016 100,000,000 66,700
------------ --------------
On incorporation, the Company had an unlimited authorised share capital and an issued share capital of 36,000,000 ordinary shares of par value 0.0667 pence each.
On 15 April 2016, 39,000,000 ordinary shares were issued and allotted to David Breith in accordance with the terms of the share exchange agreements in relation to the acquisition of the subsidiaries
On 10 May 2016 following the Company's listing on the London Stock Exchange, 25,000,000 ordinary shares of par value 0.0667 pence each were issued, fully paid at GBP0.08 per share. A commission of GBP80,000 was payable to the brokers and this has been recognised against the share premium account.
Also on 10 May 2016 following the Company's listing on the London Stock Exchange, the Company issued warrants over 8,100,000 ordinary shares as follows:
-- 3,000,000 warrants to the Non-Executive Directors to subscribe for one new ordinary share at GBP0.08 per share at any time during the period commencing on the second anniversary of admission ("Vesting Date") and at the second anniversary of the Vesting Date, a vesting condition of the warrants is that the holder is a director of the Company on the date of vesting;
-- 5,000,000 warrants to the subscribers to the placing to subscribe for one new ordinary share at GBP0.16 per share at any time during the period commencing on admission and expiring at midnight on the second anniversary thereof save that in the event that the closing price of the ordinary shares is equal to or in excess of GBP0.24
pence for 10 consecutive trading days then the Company may serve notice on the warrant holders requesting that they exercise their warrants within 14 days in lieu of which they shall lapse; and
-- 100,000 warrants to Cairn Financial Advisers to subscribe for one new ordinary share at GBP0.08 per share at any time during the period commencing on admission and expiring at midnight on the second anniversary thereof
The ordinary shares have attached to them full voting, dividend and capital distribution rights (including on a winding up). The ordinary shares do not confer any rights of redemption.
The fair value of the 3,000,000 warrants issued to the Non-Executive Directors and of the 100,000 warrants issued to Cairn Financial Advisers have been determined using the Black-Scholes option pricing model. The fair value at the date of grant per warrant was GBP0.04 for the 3,000,000 tranche and GBP0.03 for the 100,000 tranche. The fair value of the warrants issued to the Non-Executive Directors has been charged to the income statement evenly over the vesting period resulting in a charge in the current period of GBP21,050. The fair value of the warrants issued to Cairn Financial Advisers of GBP3,080 has been included in the costs of the Company's and placing and therefore debited to share premium.
The inputs to the Black-Scholes model were as follows:
Warrants granted 3,100,000 ------------------ ---------------- Stock price 8p ------------------ ---------------- Exercise price 8p ------------------ ---------------- Risk free rate 1% ------------------ ---------------- Volatility 70% ------------------ ---------------- Time to maturity 4 years/2 years ------------------ ----------------
The Company has recently listed on the main market of the London Stock Exchange. It is difficult to calculate the expected volatility of its share price at the year end. Management have therefore considered volatility of listed entities in similar operating environments to calculate the expected volatility.
The fair value of the 5,000,000 warrants issued to subscribers to the placing is considered to comprise a component of the fair value of the ordinary shares issued in the placing. The Directors do not consider the fair value of the warrants to be a material component of the fair value of the shares issued in the placing.
10. Trade and other payables
As at As at
30 Sep 16 30 Sep 15
GBP GBP
Trade payables 187,087 69,449
Social security and other taxes 56,606 -
Other payables 10,271 -
Shareholder loan account - 512,141
Accruals and deferred income 131,426 7,000
----------- -----------
385,390 588,590
----------- -----------
As at As at
30 Sep 16 30 Sep 15
Non - current liabilities
----------- -----------
Shareholder loan account 469,140 -
----------- -----------
Financial liabilities, with the exception of the shareholder loan included within trade and other payables are all considered to be repayable within 30 days.
On 3 May 2016, the Company put in place formal documentation relating to the balance owed to David Breith, the majority shareholder. The balance cannot be recalled by the shareholder until the third anniversary of the agreement and after this anniversary only repayable if the Board consider the Company in a position to service the debt. Therefore, the balance has been classified as non-current in the financial statements but is shown as current in the comparative.
The loan is interest free and has a cash value of GBP606,756, the Directors consider the market rate of interest that they may be able to obtain for a similar borrowing from a 3(rd) party to be 10%. The present value of the loan is GBP469,140 and the present value adjustment has been recognised as a capital contribution within equity. The value of the interest that has been recognised in the statement of comprehensive income at 30 September 2016 is GBP19,065.
11. Related party disclosures
12 months to 12 months
30 Sep 2016 to 30 Sep
2015
Goods/services purchased from Vitrx
Limited 4,362 6,000
Goods/services purchased from Blabbermouth
Marketing Limited - 15,767
Goods/services purchased from Diffrenet
Limited 8,368
Goods/services purchased from Dotfusion 60,000 -
Limited
Goods/services supplied to Vitrx Limited 74,510 21,790
Goods/services supplied to Diffrenet
Limited 546
The above companies are disclosed as related parties due to the nature of the business relationship with Mr David Breith, a major shareholder of Toople PLC. Mr David Breith is a Director or co-owner of the above companies, excluding Dotfusion.
Mr Piotr Kwiatowski is the owner of Dotfusion and is a shareholder in Toople PLC, there were no balances outstanding between the parties at 30 September 2016.
There were no balances outstanding between the parties at 30 September 2016.
During the year to 30 September 2016 Toople Plc recharged certain administrative expenses to its subsidiaries through a management fee. The total amount charged was GBP501,375. At 30 September 2016 Toople Plc was owed GBP1,400,175 from its subsidiaries.
12. Directors, key management and employees
Details of the Directors and key management personnel are set out on pages 7 to 8.
Details of Directors' remuneration are set out in the Remuneration Committee Report on page 20 to 25.
The total remuneration of the directors and key management personnel is GBP141,383, as set out below in aggregate for each of the categories specified in IAS24:
Directors
2016 2015
GBP GBP
Short term benefits - Salaries and 120,333 -
fees
Share based payments 21,050 -
-------- -----
Total 141,383 -
-------- -----
The average number of persons employed by the Group (excluding Directors) during the year was 14 (2015: 4), analysed by category as follows:
30 Sept 30 Sept
2016 2015
Management and Finance 1 0
Sales and Marketing 1 1
Administration 1 1
Operations 11 2
-------- --------
Total 14 4
-------- --------
13. Financial instruments
The Group's principal financial instruments comprise cash balances, accounts payable and accounts receivable arising in the normal course of its operations.
The financial instruments of the Group at year-end were:
30 Sept 30 Sept
2016 2015
-------- --------
GBP GBP
Loans and receivables - Cash and cash
equivalents 743,824 130,853
Loans and receivables - Trade and other
receivables 142,224 194,758
Financial liabilities
Financial liabilities measured at amortised -
cost - Cash and cash equivalents -
Financial liabilities measured at amortised
cost - Trade and other payables 854,530 588,590
-------- --------
a) Interest rate risk
The Group has floating rate financial assets in the form of deposit accounts with major banking institutions; however, it is not currently subjected to any other interest rate risk.
Based on cash balances at the statement of financial position date, a rise in interest rates of 1% would not have a material impact on the profit and loss of the Group.
b) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group's exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities.
The Group maintains a level of cash and cash equivalents and bank facilities deemed adequate by management to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they fall due. All current liabilities are considered to be repayable on demand.
c) Credit risk
The Group had receivables of GBP223,674 at 30 September 2016. Receivables at the year-end were not past due, and the Directors consider there to be no significant credit risk arising from these receivables. At 30 September 2016, the directors management reviewed all trade and other receivables that were greater than 60 days old and included a provision for impairment of GBP15,864.
d) Capital risk management
The Group defines capital as the total equity of the Company and its subsidiaries. The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for shareholders of the Company and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
e) Fair value of financial assets and liabilities
There are no material differences between the fair value of the Group's financial assets and liabilities and their carrying values in the financial information.
14. Pension Commitments
The Group had no pension commitments outstanding at the year end.
15. Dividends
No dividends have been proposed or paid for either the current or previous reporting periods.
16. Ultimate Controlling Party
The Directors have determined that there is no controlling party as no individual shareholder holds a controlling interest in the Company.
17. Subsequent events
There were no subsequent events.
18. Operating leases
The amounts of minimum lease payments under non-cancellable operating leases are as follows:
Operating leases which are due: 30 Sept 2016 30 Sept 2015 Within one year 92,283 92,283 In the second to fifth years inclusive 207,212 299,495 Over five years - - The Company has entered into operating leases on its premises and certain computer equipment and fixtures and fittings. Lease terms are between three and five years. 19. Copies of the Annual Report
Copies of the annual report will be available on the Company's website at www.toople.com and from the Company's registered office.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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January 31, 2017 02:00 ET (07:00 GMT)
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