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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Ubisense | LSE:UBI | London | Ordinary Share | GB00B3NCXX73 | ORD 2P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 67.50 | 65.00 | 70.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2019 to May 2024
TIDMUBI
RNS Number : 2326H
Ubisense Group PLC
16 August 2016
Ubisense Group plc
Interim results for the six months ended 30 June 2016
Ubisense Group plc ("Ubisense" or the "Company") (AIM: UBI), a market leader in enterprise location intelligence solutions, announces its interim results for the six months ended 30 June 2016.
Hot Features
Premium
Overview * First half revenues marginally ahead of 2015 achieved
on a significantly reduced cost base
* Focused on delivering operational efficiencies for
our customers and expanding their deployments, whilst
building a pipeline of new opportunities.
============= ==============================================================
Financial * Total revenue was GBP10.7m (H1 2015: GBP10.4m)
highlights
* Adjusted EBITDA* loss of GBP0.6m (H1 2015: GBP3.7m
loss)
* Reported operating loss of GBP0.8m (H1 2015: GBP7.3m
loss)
* Adjusted diluted loss per share** 1.2p (H1 2015:
19.0p loss)
* Placing of new shares raised GBP4.8m before expenses
to strengthen the balance sheet and invest in the
growth of the business
* Cash and cash equivalents of GBP5.0m and net funds of
GBP1.0m
============= ==============================================================
Operational
highlights * RTLS wins delivering growth in Japan, as well as
extension orders from existing customers in other
geographies
* Launched new generation single sensor RTLS system,
AngleID, suitable for selling through third party
channels
* New Geospatial myWorld utility customer contracted
together with additional licence sales to existing
Geospatial myWorld North American communication
network operators
* Extensions and incremental Geospatial services
contracts won with existing long term customers
============= ==============================================================
Peter Harverson, Executive Chairman, commented,
"The results for the first half show significant progress in stabilising the business on a lower cost base. Our continued investment in product development is focused on providing large scale enterprise solutions that deliver proven return on investment. Our priority now is on growing revenues with new and existing customers as well as leveraging our partner relationships."
* Measured as operating profit excluding depreciation, amortisation and non-recurring costs such as intercompany foreign exchange and reorganisation costs.
** Earnings measured as profit for the period excluding amortisation on acquired intangible assets and non-recurring costs such as acquisition and reorganisation costs.
Contact Ubisense Group plc Tel: + 44 (0) 1223 535170 Peter Harverson, Tim Gingell Numis Securities Limited Tel: + 44 (0) 20 7260 Simon Willis, Jamie Lillywhite, 1000 Toby Adcock Redleaf Communications Tel: +44 (0) 20 7382 Rebecca Sanders-Hewett, 4730 David Ison, Sam Modlin ================================== ==========================
About Ubisense
Ubisense (AIM: UBI), a global leader in enterprise location intelligence solutions, helps businesses in sectors including manufacturing, communications and utilities to improve operational efficiency and boost profitability. Ubisense location intelligence systems bring clarity to complexity, enabling customers to revolutionise their operational effectiveness in a measurable way. Founded in 2002, Ubisense is headquartered in Cambridge, England, with offices in North America, France, Germany and Japan. For more information visit: www.ubisense.net.
Interim management report
Overview
In the first half of 2016, the Group traded in line with the Board's expectations in both divisions, with some revenue growth, and costs significantly below the first half of 2015. Contract wins were achieved from both new and existing customers in both divisions despite the challenging economic environment.
Strategy
The strategy of the Group is:
-- Maintain and expand the significant deployments of Ubisense solutions with major enterprises in both divisions
-- Develop next-generation platforms & applications that deliver strong ROI to our customers, and enable value to be realised from our intellectual property
-- Use strategic partners to extend reach within our vertical markets, expand our delivery capability and enhance margin growth
Business development
In our RTLS business, considerable effort and investment in Europe and North America has resulted in Ubisense delivering large scale enterprise solutions to major manufacturing customers with global presence. The first half of 2016 has seen growth in Ubisense's newest RTLS market, Japan, together with deployment extensions in the other geographies.
Ubisense launched its AngleID product providing an easy to install single sensor RTLS solution which will suit certain applications requiring less accuracy and a lower total cost of ownership. AngleID should provide incremental RTLS revenues in 2017 with partners being key to driving volumes.
The Geospatial business delivered myWorld contract wins with our existing North American communication network operators as well as a new North American utility. Our position in the North American market continues to strengthen as customers recognize the importance of our new myWorld product releases further enabling workforce mobility, as well as the enhanced integration functionality to work with multiple GIS databases.
The Geospatial services business secured contract renewals and extensions with its largest customers who recognize the value of our long term relationship in terms of cost effective, knowledgeable and well managed delivery.
The Company continues to build its partnership activities in both divisions and across all geographies, and sees developing these partner relationships as key to the future growth of the Company.
Restructuring
Whilst the significant restructuring that commenced in 2015 is now substantially complete, we continue to closely monitor our cost base to ensure that it remains aligned to revenues.
First half results included non-recurring items of GBP1.5 million net profit (H1 2015: GBP1.9 million costs). This related to a foreign exchange gain of GBP1.6 million on intercompany trading balances (H1 2015: GBP0.4 million costs) offset by a GBP0.1m loss on redundancy and reorganisation costs (H1 2015: GBP1.5 million).
Board changes and management team
On 18 May 2016, the Company announced that Richard Green would leave the company. Peter Harverson has become executive chairman taking on responsibility for the strategy and operations of the Company. The Board is actively engaged in seeking a replacement CEO. The Company also announced the appointment of Oliver Scott as a non-executive director.
On 10 August 2016, the Company announced that Tim Gingell was confirmed in the role of Chief Financial Officer and appointed to the Board.
Interim management report
Operating and financial review
Orders
Customer orders in the first half of 2016 were GBP11.7 million (H1 2015: GBP8.5 million), and the order book backlog as at 30 June 2016 stood at GBP10.4 million (H1 2015: GBP9.4 million).
Revenue
The Company has been reorganized into two separate business divisions RTLS and Geospatial which are based on the Company's Smart Factory and myWorld product suites respectively. Each division provides software solutions and services to enterprise customers.
In the first half of 2016, total revenues were GBP10.7 million (H1 2015: GBP10.4 million). RTLS revenue was GBP2.7 million (H1 2015: GBP2.9 million). Geospatial revenue was GBP8.0 million (H1 2015: GBP7.5 million).
As an international business with activities focused in Europe, the Americas and Asia Pacific, the reported results are subject to exchange rate volatility. At the end of the period, following the Brexit vote, sterling weakened against the US dollar, Euro and Japanese Yen currencies in which the Company derives the majority of its revenues. If currency exchange rates had remained constant in H1 2016 compared to H1 2015, the Company estimates that reported revenues would have been GBP0.4 million lower.
To mitigate the impact of exchange rate volatility, the Company's policy is to maintain natural hedges where possible by matching foreign currency revenues and expenditure. The Board reviews the forecast currency requirements and, at this stage, does not consider external hedging arrangements for profit and loss items to be appropriate for the Company.
Gross margin
The overall gross margin increased by 10 percentage points to 41% (H1 2015: 31%) following the restructuring and refocus of the Company in 2015. Gross margin is significantly impacted by the revenue mix between product, maintenance and support, and services work, which is in turn dependent on the type and delivery stage of a particular contract.
For the RTLS division, the gross margin increased to 41% (H1 2015 20%), whilst for the Geospatial division the gross margin increased to 40% (H1 2015 38%).
Operating expenses
Operating expenses decreased to GBP5.1 million (H1 2015: GBP10.5 million) and included GBP1.5 million non-recurring income (H1 2015: GBP1.9 million costs). The reduction in operating expenses demonstrates the ongoing cost run-rate impact of the 2015 restructuring of the business together with a GBP1.6 million gain relating to foreign exchange on unrealized intercompany trading balances. Operating expenses include sales and marketing, product marketing, product development, general and administration, foreign exchange and exceptional costs.
Other operating expenses (which excludes depreciation, amortisation and non-recurring costs) decreased to GBP5.0m (H1 2015: GBP6.9m, H2 2015: GBP6.0m).
Gross expenditure on product development was GBP0.9 million (H1 2015: GBP1.4 million) reflecting continued investment in our flagship Smart Factory and myWorld products. Capitalised product development costs of GBP0.9 million (H1 2015: GBP1.2 million) represented 93% (H1 2015: 86 %) of gross development spend whilst amortisation of the capitalised development costs was GBP1.34 million (H1 2015: GBP1.3million).
EBITDA and operating profit
The Company made an adjusted EBITDA loss for the period of GBP0.6 million (H1 2015: GBP3.7 million loss) excluding non-recurring items. The operating loss for the period was GBP0.8 million (H1 2015: GBP7.3 million loss) and loss before tax for the period was GBP0.9 million (H1 2015: GBP7.5 million loss). The operating loss and loss before tax includes amortisation and depreciation charges of GBP1.6 million (H1 2015: GBP1.7 million).
Interim management report
Operating and financial review (continued)
Interest and tax
Net interest payable for the period was GBP146,000 (H1 2015: GBP192,000).
The Company has a net tax credit of GBP112,000 (H1 2015: GBP44,000 net credit), primarily as a result of non-cash deferred tax on capitalised development costs and acquired intangible assets. Management's best estimate of the effective current tax rate in all other group companies is nil due to the availability of prior years' losses.
EPS and dividends
Adjusted diluted loss per share was 1.2 pence (H1 2015: 19.0 pence loss). Reported basic and diluted loss per share was 1.8 pence (H1 2015: 27.3 pence loss). The Board does not feel it appropriate at this time to commence paying dividends.
Balance sheet, cash and cash flow
The Company's balance sheet has shareholder funds at 30 June 2016 of GBP15.3 million (31 December 2015: GBP11.9 million), having raised GBP4.5 million net in April 2016 through a placing of 19,230,000 shares in the Company.
As at 30 June 2016, the Company had a three year working capital facility with HSBC bank of GBP8.0 million (31 December 2015: GBP8.0 million) of which GBP4.0 million was drawn down (31 December 2015: GBP4.5 million). HSBC confirmed to the Company that it waived its right to take action in relation to certain notified covenant defaults that existed at 31 December 2015 and 31 March 2016. There have been no further covenant defaults since these dates. The Company has agreed the outline terms of a 5 year repayment loan with HSBC bank which will replace the existing working capital facility.
The 200 million Japanese Yen (JPY) denominated loan (GBP1.3 million) with Mizuho Bank was repaid in March 2016.
Cash held on the balance sheet at 30 June 2016 was GBP5.0 million (31 December 2015: GBP5.4 million) and net funds at 30 June 2016 were GBP1.0 million (31 December 2015: GBP1.2 million net debt).
The main components of the cash movements in the first six months of 2016 included net receipts of GBP4.5 million from a placing to institutional shareholders (H1 2015: GBP9.6 million); the net repayment of bank loans of GBP1.8 million (H1 2015: GBP1.5 million drawdown); outflows of GBP0.9 million (H1 2015: GBP1.3 million) for capital investment in product development and plant and equipment; and an operating cash outflow of GBP2.6 million (H1 2015: GBP3.5 million outflow) of which GBP1.9 million outflow is working capital related (GBP0.8 million related to non-recurring costs accrued in 2015).
Capital structure
The issued share capital at 30 June 2016 was 55,883,154 (31 December 2015: 36,620,247) ordinary shares of GBP0.02 each. The increase of 19,262,907 shares relates to 19,230,000 shares issued in the April 2016 placing and 32,907 share option exercises by employees. No share options were granted to employees in the period, and the total number of unexercised share options at 30 June 2016 was 1,150,448.
Risks and uncertainties
The Board continuously assesses and monitors the key risks of the business. With the exception of general risks arising from the UK EU Referendum result, to which the Company is exposed in a similar way to other exporters, the key risks that could affect the Company's performance, and the factors which mitigate these risks, have not significantly changed from those set out on pages 25 to 27 of the Company's Annual Report for 2015 (a copy of which is available from our website www.ubisense.net).
Current trading and outlook
The Company separation of the Group's activities into two distinct operating units has enabled the Board to develop clearer strategies for each division. Although we have reduced the Group's cost base, we continue to invest in next-generation platforms and applications that deliver strong ROI to our customers. Our priority now is to expand the number and size of deployments of Ubisense solutions with major enterprise customers in both divisions. We are also developing our channel partner relationships to extend reach within our vertical markets, expand our delivery capability and enhance margin growth. The Company is on track to deliver full year results in line with the Board's expectations.
Interim income statement
For the six months ended 30 June 2016
6 months 6 months 12 months
to to to
30 June 30 June 31 December
2016 2015 2015
unaudited unaudited audited
Notes GBP'000 GBP'000 GBP'000
----------------------------- ------ ----------- ----------- -------------
Revenues 4.1 10,674 10,357 21,982
Cost of revenues (6,344) (7,133) (14,290)
============================= ====== =========== =========== =============
Gross profit 4,330 3,224 7,692
Operating expenses (5,081) (10,541) (24,671)
============================= ====== =========== =========== =============
Operating loss (751) (7,317) (16,979)
Analysed as:
Gross profit 4,330 3,224 7,692
Other operating expenses (4,967) (6,910) (12,914)
============================= ====== =========== =========== =============
Adjusted EBITDA (637) (3,686) (5,222)
Depreciation (175) (204) (388)
Amortisation of acquired
intangible assets (91) (156) (309)
Amortisation of other
intangible assets (1,378) (1,343) (6,985)
Non-recurring items 5 1,530 (1,928) (4,075)
============================= ====== =========== =========== =============
Operating loss (751) (7,317) (16,979)
Net finance costs (146) (192) (289)
============================= ====== =========== =========== =============
Loss before tax (897) (7,509) (17,268)
Income tax 112 44 632
----------------------------- ------ ----------- ----------- -------------
Loss for the period (785) (7,465) (16,636)
----------------------------- ------ ----------- ----------- -------------
Loss attributable
to:
Equity shareholders
of the Company (778) (7,330) (16,569)
Non-controlling interest (7) (135) (67)
----------------------------- ------ ----------- ----------- -------------
Loss per share attributable
to equity shareholders
of the parent (pence)
----------------------------- ------ ----------- ----------- -------------
Basic 6 (1.8) (27.3) (52.3)
Diluted 6 (1.8) (27.3) (52.3)
The notes 1 to 10 are an integral part of these
condensed interim financial statements.
Interim statement of comprehensive income
For the six months ended 30 June 2016
6 months 6 months 12 months
to to to
30 June 30 June 31 December
2016 2015 2015
unaudited unaudited audited
GBP'000 GBP'000 GBP'000
-------------------------------- ----------- ----------- -------------
Loss for the period (785) (7,465) (16,636)
Other comprehensive income:
Items that may be reclassified
subsequently to profit
and loss
Exchange difference on
retranslation of net assets
and results of overseas
subsidiaries (378) 29 139
Total comprehensive income
for the period (1,163) (7,436) (16,497)
-------------------------------- ----------- ----------- -------------
Interim statement of changes in equity
For the six months ended 30 June 2016
Share
based
Share Share payment Translation Retained Non-controlling
capital premium reserve reserve earnings Subtotal interest Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
================== ========= ========= ========== ============ ========== ========= ================ =========
Balance at 1
January 2015
(audited) 501 28,051 821 (685) (10,427) 18,261 530 18,791
================== ========= ========= ========== ============ ========== ========= ================ =========
Loss for the
period - - - - (7,330) (7,330) (135) (7,465)
Exchange
difference
on retranslation
of net assets
and results of
overseas
subsidiaries - - - 58 - 58 (29) 29
================== ========= ========= ========== ============ ========== ========= ================ =========
Total
comprehensive
income for the
period - - - 58 (7,330) (7,272) (164) (7,436)
Reserve credit
for
equity-settled
share-based
payment - - 33 - - 33 - 33
Issue of new
share capital 225 - - - - 225 - 225
Premium on new
share capital - 9,806 - - - 9,806 - 9,806
Share issue costs - (448) (448) (448)
Transactions
with owners 225 9,358 33 - - 9,616 - 9,616
================== ========= ========= ========== ============ ========== ========= ================ =========
Balance at 30
June 2015
(unaudited) 726 37,409 854 (627) (17,757) 20,605 366 20,971
================== ========= ========= ========== ============ ========== ========= ================ =========
Loss for the
period - - - - (9,239) (9,239) 68 (9,171)
Exchange
difference
on retranslation
of net assets
and results of
overseas
subsidiaries - - - 88 - 88 22 110
Total
comprehensive
income for the
period - - - 88 (9,239) (9,151) 90 (9,061)
Reserve credit
for
equity-settled
share-based
payment - - 21 - - 21 - 21
Issue of new
share capital 6 - 6 6
Premium on new
share capital - 39 - - - 39 - 39
Share issue costs - (26) (26) (26)
Transactions
with owners 6 13 21 - - 40 - 40
================== ========= ========= ========== ============ ========== ========= ================ =========
Balance at 31
December 2015 732 37,422 875 (539) (26,996) 11,494 456 11,950
================== ========= ========= ========== ============ ========== ========= ================ =========
Loss for the
period - - - - (778) (778) (7) (785)
Exchange
difference
on retranslation
of net assets
and results of
overseas
subsidiaries - - - (469) - (469) 91 (378)
Total
comprehensive
income for the
period - - - (469) (778) (1,247) 84 (1,163)
Reserve credit
for
equity-settled
share-based
payment - - 43 - - 43 - 43
Issue of new
share capital 386 - - - - 386 - 386
Premium on new
share capital - 4,427 - - - 4,427 - 4,427
Share issue costs - (295) - - - (295) - (295)
Transactions
with owners 386 4,132 43 - - 4,561 - 4,561
================== ========= ========= ========== ============ ========== ========= ================ =========
Balance at 30
June 2016
(unaudited) 1,118 41,554 918 (1,008) (27,774) 14,808 540 15,348
================== ========= ========= ========== ============ ========== ========= ================ =========
Interim statement of financial position
At 30 June 2016
At At At
30 June 30 June 31 December
2016 2015 2015
unaudited unaudited audited
Notes GBP'000 GBP'000 GBP'000
------------------------------- ------ ----------- ----------- --------------
Assets
Non-current assets
Intangible assets 7 10,113 13,872 9,786
Property, plant and
equipment 871 1,064 943
=============================== ====== =========== =========== ==============
Total non-current assets 10,984 14,936 10,729
=============================== ====== =========== =========== ==============
Current assets
Inventories 2,703 2,509 2,815
Trade and other receivables 8,946 10,123 9,277
Cash and cash equivalents 5,049 7,806 5,392
=============================== ====== =========== =========== ==============
Total current assets 16,698 20,438 17,484
=============================== ====== =========== =========== ==============
Total assets 27,682 35,374 28,213
=============================== ====== =========== =========== ==============
Liabilities
Current liabilities
Bank loans 10 - (829) (1,123)
Trade and other payables (6,420) (7,217) (8,629)
=============================== ====== =========== =========== ==============
Total current liabilities (6,420) (8,046) (9,752)
=============================== ====== =========== =========== ==============
Non-current liabilities
Deferred tax liability (1,146) (1,191) (1,157)
Bank loans 10 (4,000) (4,500) (4,500)
Other liabilities 9 (768) (666) (854)
=============================== ====== =========== =========== ==============
Total non-current liabilities (5,914) (6,357) (6,511)
=============================== ====== =========== =========== ==============
Total liabilities (12,334) (14,403) (16,263)
=============================== ====== =========== =========== ==============
Net assets 15,348 20,971 11,950
=============================== ====== =========== =========== ==============
Equity
Equity attributable
to owners of the parent
company
Share capital 8 1,118 726 732
Share premium 41,554 37,409 37,422
Share based payment reserve 918 854 875 Translation reserve (1,008) (627) (539) Retained earnings (27,774) (17,757) (26,996) =============================== ====== =========== =========== ============== Equity attributable to owners of the parent company 14,808 (20,605) 11,494 =============================== ====== =========== =========== ============== Non-controlling interests 540 366 456 =============================== ====== =========== =========== ============== Total equity 15,348 20,971 11,950 =============================== ====== =========== =========== ============== The notes 1 to 10 are an integral part of these condensed interim financial statements.
Interim statement of cash flows
For the six months ended 30 June 2016
6 months 6 months 12 months
to to to
30 June 30 June 31 December
2016 2015 2015
unaudited unaudited audited
GBP'000 GBP'000 GBP'000
---------------------------------- ----------- ----------- -------------
Loss before tax (897) (7,509) (17,268)
Adjustments for:
Depreciation 175 204 388
Amortisation 1,469 1,499 7,294
Loss on disposal of
property, plant and
equipment 10 - -
Share-based payment
charge 27 33 54
Non-cash non-recurring
items (1,651) 602 -
Finance income (26) (12) (12)
Finance costs 172 204 301
------------------------------------ ----------- ----------- -------------
Operating cash flows
before working capital
movements (721) (4,979) (9,243)
Change in inventories 112 (231) 66
Change in receivables 331 5,365 6,264
Change in payables (2,295) (2,536) (1,010)
------------------------------------ ----------- ----------- -------------
Cash used in operations
before tax (2,573) (2,381) (3,923)
==================================== =========== =========== =============
Net income taxes received/(paid) 3 (1) 436
------------------------------------ ----------- ----------- -------------
Net cash flows from
operating activities (2,570) (2,382) (3,487)
------------------------------------ ----------- ----------- -------------
Cash flows from investing
activities
Disposal of subsidiaries,
net of cash disposed - - (3)
Purchases of property,
plant and equipment (36) (99) (196)
Proceeds on disposal
of property, plant
and equipment - - 4
Expenditure on intangible
assets (873) (1,154) (2,652)
Interest received 26 12 12
------------------------------------ ----------- ----------- -------------
Net cash flows from
investing activities (883) (1,241) (2,835)
------------------------------------ ----------- ----------- -------------
Cash flows from financing
activities
Proceeds of borrowings - 4,500 522
Repayment of borrowings (1,623) (6,000) (2,000)
Interest paid (172) (191) (277)
Proceeds from the issue
of share capital 4,517 9,582 9,602
------------------------------------ ----------- ----------- -------------
Net cash flows from
financing activities 2,722 7,891 7,847
Net increase in cash
and cash equivalents (731) 4,268 1,525
Cash and cash equivalents
at start of period 5,392 3,697 3,697
Exchange differences
on cash and cash equivalents 388 (159) 170
------------------------------------ ----------- ----------- -------------
Cash and cash equivalents
at end of period 5,049 7,806 5,392
------------------------------------ ----------- ----------- -------------
Notes to the interim financial statements
1 General information
Ubisense Group plc ('the Company') and its subsidiaries (together, 'the Group') deliver mission-critical location-based smart technology which enables companies to optimise their business processes.
The Group has operations in the UK, USA, Canada, France, Germany and Japan, selling mainly to customers in the Americas, Europe and Asia Pacific.
The Company is a public limited company which is listed on the Alternative Investment Market ('AIM') of the London Stock Exchange (UBI) and is incorporated and domiciled in the UK. The address of its registered office is St. Andrew's House, St. Andrew's Road, Chesterton, Cambridge, CB4 1DL.
The condensed consolidated interim financial statements were approved by the Board of Directors for issue on 15 August 2016.
The condensed consolidated interim financial statements do not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2015 were approved by the Board of Directors on 6 April 2016 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498 of the Companies Act 2006.
The condensed consolidated interim financial statements have been reviewed, not audited.
2 Basis of preparation
The condensed consolidated interim financial statements should be read in conjunction with the annual financial statements of the Group and are prepared in accordance with IFRSs as adopted by the European Union.
Going concern basis
The Group's forecasts and projections, taking account of reasonably possible changes in trading performance, support the conclusion that there is a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future, a period of not less than twelve months from the date of this report. The Group therefore continues to adopt the going concern basis in preparing its condensed consolidated interim financial statements.
3 Accounting policies
The accounting policies adopted in the preparation of the condensed consolidated interim financial statements are unchanged from those set out in the Group's consolidated financial statements for the year ended 31 December 2015. These policies have been consistently applied to all the periods presented.
The operations of the Group display a degree of seasonality with stronger performance typically seen in the second half of the year. This is due to customers' budgetary cycles and the capital nature of the products sold by the Group.
Notes to the interim financial statements
4 Segmental information
Management has determined the operating segments to be the group's Divisions based on the information reported to the Chief Operating Decision Maker (CODM) for the purpose of assessing performance and allocating resources. The CODM is the Executive Chairman.
The Real-Time Locations Systems (RTLS) Division takes real-time location date from Ubisense's own sensing hardware, or from standards-based integration with third party hardware, and transforms this data into high value spatial event information, delivering highly reliable, automatic, adaptive asset identification, precise real-time location and spatial monitoring to offer meaningful insights that help businesses make smarter decisions.
The Geospatial division delivers software solutions that integrates data from any source - geographic, real-time asset, GPS, location, corporate and external cloud based sources - into a live geospatial common operating picture, empowering all users in the customer's organisation to access, input and analyse operational intelligence to proactively manage their networks, respond quickly to emergency events and effectively manage day-to-day operations.
Each operating segment is managed separately by a business unit leader as each deal with different technologies and predominately separate customer bases. The performance of the operating segments is assessed on a measure of contribution, being gross profit less sales and business unit marketing expenditure. Assets and liabilities are not presented to the CODM on a divisional basis.
Costs incurred centrally or not directly attributable to either the RTLS or Geospatial division are reported in the Central division. The results of each segment are prepared using accounting policies consistent with those of the Group as a whole. No intra-segmental transactions are reported.
6 months ended 30 RTLS Geospatial Central Total
June 2016 GBP'000 GBP'000 GBP'000 GBP'000
---------------------- --------- ----------- --------- ---------
Revenue 2,654 7,973 47 10,674
Cost of sales (1,553) (4,782) (9) (6,344)
====================== ========= =========== ========= =========
Gross profit 1,101 3,191 38 4,330
Other administrative
expenses (1,503) (840) (2,624) (4,967)
====================== ========= =========== ========= =========
Adjusted EBITDA (402) 2,351 (2,586) (637)
Amortisation (1,469) (1,469)
Depreciation (175) (175)
Non-recurring items 1,530 1,530
Operating loss (2,700) (751)
Finance income 26 26
Finance costs (172) (172)
====================== ========= =========== ========= =========
Loss before tax (2,846) (897)
====================== ========= =========== ========= =========
Notes to the interim financial statements
4 Segmental information (continued)
6 months ended 30 RTLS Geospatial Central Total
June 2015 GBP'000 GBP'000 GBP'000 GBP'000
---------------------- --------- ----------- --------- ---------
Revenue 2,851 7,462 44 10,357
Cost of sales (2,293) (4,640) (200) (7,133)
====================== ========= =========== ========= =========
Gross profit 559 2,821 (156) 3,224
Other administrative
expenses (2,444) (1,358) (3,108) (6,910)
====================== ========= =========== ========= =========
Adjusted EBITDA (1,885) 1,463 (3,264) (3,686)
Amortisation (1,499) (1,499)
Depreciation (204) (204)
Non-recurring items (1,928) (1,928)
Operating loss (6,895) (7,317)
Finance income 12 12
Finance costs (204) (204)
====================== ========= =========== ========= =========
Loss before tax (7,087) (7,509)
====================== ========= =========== ========= =========
12 months ended RTLS Geospatial Central Total
31 December 2015 GBP'000 GBP'000 GBP'000 GBP'000
---------------------- --------- ----------- --------- ---------
Revenue 6,445 15,458 79 21,982
Cost of sales (3,694) (10,544) (51) (14,290)
====================== ========= =========== ========= =========
Gross profit 2,751 4,913 28 7,692
Other administrative
expenses (2,810) (1,800) (8,304) (12,914)
====================== ========= =========== ========= =========
Adjusted EBITDA (59) 3,113 (8,276) (5,222)
Amortisation (7,294) (7,294)
Depreciation (388) (388)
Non-recurring items (4,075) (4,075)
Operating loss (20,033) (16,979)
Finance income 12 12
Finance costs (301) (301)
====================== ========= =========== ========= =========
Loss before tax (20,322) (17,268)
====================== ========= =========== ========= =========
Notes to the interim financial statements
4.1 Revenue by geography
The Board and Management Team also review the revenues on a geographical basis, based around the regions where the Group has its significant subsidiaries or markets.
The Group's revenue from external customers in the Group's domicile, the UK, and its major worldwide markets have been identified on the basis of the customers' geographical location.
6 months 6 months 12 months
to to to
30 June 30 June 31 December
2016 2015 2015
unaudited unaudited audited
GBP'000 GBP'000 GBP'000
-------------------- ----------- ----------- -------------
United Kingdom 217 196 487
Germany 1,215 1,283 3,074
France 257 234 616
Spain 247 28 212
Europe other 191 92 368
USA 5,613 5,867 12,131
Canada 833 809 1,423
Japan 2,085 1,718 3,330
Asia Pacific other 5 130 337
Rest of World 11 - 4
Total revenues 10,674 10,357 21,982
---------------------- ----------- ----------- -------------
5 Non-recurring items
During the period, the Group recognized non-recurring items of GBP1,530,000 with GBP1,651,000 relating to unrealised foreign exchange gains on intercompany trading balances and GBP121,000 for reorganisation costs mainly comprising redundancy payments.
During 2015, the Group incurred non-recurring items of GBP4,075,000. GBP1,928,000 was incurred in H1 2015 relating to unrealized foreign exchange losses on intercompany trading balances GBP393,000, redundancy and reorganisation costs totaling GBP1,535,000. GBP2,147,000 was incurred in H2 2015 mainly relating to reorganisation costs.
Notes to the interim financial statements
6 Earnings per share
6 months 6 months 12 months
to to to
30 June 30 June 31 December
2016 2015 2015
unaudited Unaudited Audited
------------------------------- ----------- ----------- -------------
Earnings
Loss for the period (GBP'000) (778) (7,330) (16,569)
================================ =========== =========== =============
Loss for the purposes
of diluted earnings per
share (GBP'000) (778) (7,330) (16,569)
================================ =========== =========== =============
Number of shares
Basic weighted average
number of shares ('000) 43,529 26,850 31,657
Effect of dilutive potential
ordinary shares:
- Share options ('000) 225 639 418
Diluted weighted average
number of shares ('000) 43,754 27,489 32,075
================================ =========== =========== =============
Basic loss per share
(pence) (1.8) (27.3) (52.3)
================================ =========== =========== =============
Diluted loss per share
(pence) (1.8) (27.3) (52.3)
================================ =========== =========== =============
Basic earnings per share is calculated by dividing profit for the period attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. For diluted earnings per share, the weighted average number of shares is adjusted to allow for the effects of dilutive share options. Options have no dilutive effect in loss-making years, and hence the diluted loss per share for the periods ended 30 June 2016 and 2015 and 31 December 2015 is the same as the basic loss per share.
The Group also presents an adjusted diluted earnings per share figure which excludes amortisation on acquired intangible assets, share-based payments charge and non-recurring expenditure such as reorganisation costs from the measurement of profit for the period.
6 months 6 months 12 months
to to to
30 June 30 June 31 December
Adjusted diluted earnings 2016 2015 2015
per share unaudited unaudited audited
----------------------------- ----------- ----------- -------------
Loss for the purposes of
diluted earnings per share
(GBP'000) (778) (7,330) (16,569)
Adjustments
Reversal of amortisation
on acquired intangible
assets (GBP'000) 91 156 309
Impairment of goodwill
and acquired intangible
assets (GBP'000) - - 4,043
Reversal of share-based
payments charge (GBP'000) 43 33 54 Reversal of exceptional items (GBP'000) 121 1,928 4,075 ============================= =========== =========== ============= Net adjustments (GBP'000) 255 2,117 8,481 ----------------------------- ----------- ----------- ------------- Adjusted earnings (GBP'000) (523) (5,213) (8,088) ----------------------------- ----------- ----------- ------------- Adjusted diluted loss per share (pence) (1.2) (19.0) (25.2) ----------------------------- ----------- ----------- -------------
Notes to the interim financial statements
7 Intangible assets
At At At
30 June 30 June 31 December
2016 2015 2015
unaudited unaudited audited
Net book amount GBP'000 GBP'000 GBP'000
======================== =========== =========== =============
Goodwill 4,891 8,155 4,271
Capitalised product
development costs 3,604 4,045 3,980
Software 443 604 539
Acquired software
products 75 162 114
Acquired customer
relationships and
backlog 1,100 906 882
-------------------------- ----------- ----------- -------------
Total other intangible
assets 10,113 13,872 9,786
-------------------------- ----------- ----------- -------------
8 Share capital
At At At
30 June 30 June 31 December
2016 2015 2015
Allotted, called-up unaudited unaudited audited
and fully paid GBP'000 GBP'000 GBP'000
--------------------- ----------- ----------- -------------
Ordinary shares of
GBP0.02 each 1,118 726 732
----------------------- ----------- ----------- -------------
At At At
30 June 30 June 31 December
2016 2015 2015
Movement in number unaudited unaudited audited
of shares GBP'000 GBP'000 GBP'000
-------------------------- ------------ ----------- -------------
Number of shares
at beginning of period 36,620,247 25,062,842 25,062,842
---------------------------- ------------ ----------- -------------
Issued under placing 19,230,000 11,111,112 11,111,112
Issued under share-based
payment plans 32,907 121,981 446,293
Change in number
of shares in period 19,262,907 11,233,093 11,557,405
============================ ============ =========== =============
Number of shares
at end of period 55,883,154 36,295,935 36,620,247
---------------------------- ------------ ----------- -------------
Share capital movements
During the period, the Company issued 19,262,907 shares, increasing the total number of shares in issue from 36,620,247 to 55,883,154 as follows:
-- 19,230,000 shares at GBP0.25 per share for a total gross cash consideration of GBP4,807,500, with share issue costs of GBP295,000 written off against the share premium account; and
-- 32,907 share options exercised with an exercise price of GBP0.14 per share for total cash consideration of GBP4,607.
Notes to the interim financial statements
9 Interest in subsidiaries
Contingent consideration
The consideration to acquire the Geoplan group in December 2013 included cash, issue of Ubisense shares, deferred consideration and contingent consideration. The deferred consideration was paid in full in January 2014.
Under the contingent cash consideration arrangement, the Group is required to pay additional amounts to vendors based on the achievement of two separate performance milestones that may arise between 2014 and 2017 with combined undiscounted range of outcomes between nil and 149 million Japanese Yen (JPY) (GBPnil to GBP892,000).
At acquisition, the fair value of the contingent consideration was 136 million JPY (GBP816,000) being management's best estimate of the probability-adjusted estimated discounted future cashflows. The discount rate used is 3.5%, based on the Group's estimated incremental borrowing rate for unsecured liabilities at the reporting date, and therefore reflects the Group's credit position. The fair value amount recognised for this arrangement is revised based on the most recent management estimates and, as the liability is denominated in JPY, it is subject to the impact of exchange rates.
At 30 June 2016, the contingent consideration payable is GBP580,000 and is included in other non-current liabilities.
10 Bank loans
In June 2015, the Group renewed its working capital loan facilities and repaid its acquisition bank loan. As at 30 June 2016, the Group had an GBP8.0 million bank loan facility agreed with HSBC Bank Plc to provide working capital for the Group. This loan is repayable in full in June 2018 by Ubisense Ltd, is secured on the fixed and floating assets of the Group and attracts an interest charge of LIBOR + 3%. As at 30 June 2016, GBP4.0 million of the GBP8.0 million facility was drawn down and is subject to certain operating and net worth covenants of the business, being:
-- Total senior debt (net of cash balances) not exceeding 2x Adjusted EBITDA;
-- Interest charges and repayments of principal due in the next 12 months in respect of borrowings whose original stated term to maturity exceed 12 months not exceeding 3x Adjusted EBITDA; and
-- Total senior debt (net of cash balances) not exceeding 2.5x the aggregate of trade debtors (net of provisions) and work-in-progress (Amounts recoverable on contracts).
As at 15 August 2016 the Group is finalising a new repayment loan facility for GBP4.0 million with HSBC Bank Plc and will repay the outstanding balance on the existing GBP8.0 million facility. In line with the previous agreement, the new loan will be secured on the fixed and floating assets of the Group and attracts an interest charge of LIBOR + 3%. Repayments of the loan by Ubisense Ltd are set at GBP0.75 million per annum on 31 December. The loan is subject to an operating covenant linked to "operating cashflow" performance (profit or loss before tax adding back any non-recurring items, finance costs, foreign exchange costs, depreciation, amortization or capitalization of product development) as follows: 2016 GBP2.25 million negative, 2017 GBPnil, 2018 and beyond GBP1 million positive.
The Group repaid a six month loan facility of 200 million Japanese Yen (JPY) in March 2016.
Independent review report to Ubisense Group plc
Introduction
We have been engaged by the company to review the financial information in the half-yearly financial report for the six months ended 30 June 2016 which comprises the interim income statement, interim statement of comprehensive income, interim statement of changes in equity, interim statement of financial position, interim statement of cash flows and the related explanatory notes. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the company in accordance with guidance contained in ISRE (UK and Ireland) 2410, 'Review of Interim Financial Information performed by the Independent Auditor of the Entity'. Our review work has been undertaken so that we might state to the company those matters we are required to state to them in a review 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, for our review work, for this report, or for the conclusion we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The AIM rules of the London Stock Exchange require that the accounting policies and presentation applied to the financial information in the half-yearly financial report are consistent with those which will be adopted in the annual accounts having regard to the accounting standards applicable for such accounts.
As disclosed in Note 2, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The financial information in the half-yearly financial report has been prepared in accordance with the basis of preparation in Note 2.
Our responsibility
Our responsibility is to express to the Company a conclusion on the financial information in the half-yearly financial report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the financial information in the half-yearly financial report for the six months ended 30 June 2016 is not prepared, in all material respects, in accordance with the basis of accounting described in Note 2.
Grant Thornton UK LLP
Chartered Accountants
Registered Auditor
Cambridge
15 August 2016
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SFAFWIFMSELA
(END) Dow Jones Newswires
August 16, 2016 02:00 ET (06:00 GMT)
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