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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Access Intelligence Plc | LSE:ACC | London | Ordinary Share | GB00BGQVB052 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 54.50 | 54.00 | 55.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Computer Related Svcs, Nec | 65.71M | -4.19M | -0.0328 | -16.62 | 69.6M |
From Apr 2019 to Apr 2024
TIDMACC
RNS Number : 5054G
Access Intelligence PLC
02 March 2018
2 March 2018
ACCESS INTELLIGENCE PLC
("Access Intelligence", the "Company" or the "Group")
FINAL RESULTS FOR THE YEARED 30 NOVEMBER 2017
Access Intelligence Plc (AIM: ACC), a leader in corporate communications and reputation management software, announces its final results for the year ended 30 November 2017.
Strategic highlights
-- The launch of the new Vuelio offering with a unique integrated PR, public affairs and social engagement solution has been positively received by the UK market
-- A strong performance in new business and increased upsell into the existing client base reflects the relevance of the Group's combined portfolio offering
-- The Vuelio platform is increasingly playing the role of communications memory for client organisations, boosted by stringent audit requirements imposed by incoming General Data Protection Regulation
-- The Group has achieved significant cost reductions through renegotiated supplier contracts, office consolidation and headcount reduction, with the latter achieved while maintaining high levels of customer support, reflected in improved renewal rates
-- Addition of a significant number of blue-chip clients, including Dyson, RAC, PZ Cussons, CPPIB, NICE, Greater Anglia, Highways England, Smith & Nephew and Deutsche Lufthansa
Financial highlights
-- The Group achieved Annual Contract Value (ACV) growth of GBP600k over the second half of the year, an annualised growth rate of nearly 15%. The benefit of this will flow through into revenue in the 2018 financial year
-- Total future contracted revenue grew 35% to GBP7.1 million, reflecting net growth in ACV combined with success at selling multi-year contracts. This provides us with good visibility of long-term, recurring revenue growth
-- During the year, the Group invested a further GBP1.6 million into the development of the Vuelio platform, delivering a product that is stable, secure and fully integrated to support the full range of client requirements
-- The Group has 99% recurring revenue, with sales teams incentivised to focus on high contribution SaaS products
-- In December 2017 the Group received notices from all holders of its GBP2.35 million convertible loan notes to convert these into equity. This has significantly strengthened the Group's Balance Sheet and resulted in an ongoing annual interest saving of approximately GBP0.2 million
Michael Jackson, Non-Executive Chairman of Access Intelligence, commented: "I am delighted that our 2015 acquisition and last year's integration work has resulted in a stable and growing business. Cost savings created in the second half of 2017 will impact fully in 2018, and, combined with our ACV growth, provide a strong platform for growth as we continue to disrupt and transform the communications management market."
For further information:
Access Intelligence Plc Michael Jackson (Non-Executive Chairman) 0843 659 2940 Joanna Arnold (CEO) Allenby Capital Limited 020 3328 5656 David Worlidge / Nick Chambers
Forward looking statements
This announcement contains forward-looking statements.
These statements appear in a number of places in this announcement and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, revenue, financial condition, liquidity, prospects, growth, strategies, new products, the level of product launches and the markets in which we operate.
Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those in the forward-looking statements as a result of various factors.
These factors include any adverse change in regulations, unforeseen operational or technical problems, the nature of the competition that we will encounter, wider economic conditions including economic downturns and changes in financial and equity markets. We undertake no obligation publicly to update or revise any forward-looking statements, except as may be required by law.
Chairman's Statement
I am pleased to announce our results for the year ended 30 November 2017.
When we concluded our restructuring in Q1 2017, Access Intelligence had transformed from a diverse portfolio into a streamlined operation focused on the Vuelio brand, and launched a unique reputation management platform integrating solutions for PR, public affairs and social engagement.
Throughout the remainder of 2017, this new Vuelio platform allowed us to grow our Annual Contract Value ('ACV') base through upsells into the existing customer base and increasing the number and value of new customer wins - all while maintaining industry-leading rates of customer retention.
New business sales increased from an average of GBP65,000 per month in August to October 2016 to an average of GBP160,000 per month from the second quarter 2017 onwards; customer retention is up from 56 per cent to a consistent performance of over 80 per cent by value; and we have achieved ACV growth of GBP600,000 over the past six months, reflecting an annualised run rate of GBP1.2 million net ACV growth. By 30 November 2017, our total future contracted revenue had increased 35% year on year to GBP7.1 million.
Simply put, the business is now stable and growing. From October 2017 onwards, having dramatically reduced our operational costs over the previous nine months we have started to generate cash. Through renegotiating supplier contracts, consolidating office space and reducing headcount by almost 50 per cent, we have achieved annualised savings of GBP1.2 million over the past 12 months - all while maintaining high levels of customer support reflected in our improved renewal rates.
The new year has brought further stability. In December 2017 we received notices from all holders of the GBP2.35 million convertible loan notes to convert these into equity. This has significantly strengthened our Balance Sheet and will result in an ongoing interest saving of around GBP0.2 million each year. 2018 also offers significant opportunity in the form of General Data Protection Regulation (GDPR) - Vuelio is uniquely positioned to help the communications market meet these stringent new data privacy requirements.
In the past six months we have welcomed a number of major brands as new customers, including Dyson, RAC, PZ Cussons, CPPIB, NICE, Greater Anglia, Highways England, Smith & Nephew and Deutsche Lufthansa. We are delighted that clients of this calibre will be joining us for the next stage of Access Intelligence's journey, as we continue to invest in our people and our product to disrupt and transform the communications management market.
I would like to take this opportunity to thank you on behalf of the board for your continued support of Access Intelligence.
Sincerely
M Jackson
Chairman
Strategic Report (extract)
Results
2017 has seen the Group transition from a business focussing on the integration of acquired operations and customers into one with a unique product focussing on growth.
One of the key financial metrics monitored by the board is the change in customer Annual Contract Value ('ACV') base year on year. This metric reflects the annual value of new business won, plus upsells into our existing client base, less any customer losses. It is an important metric for the Group as it is a leading indicator of future revenue. During 2017, the Group's annual contract value base grew by GBP750,000, with the growth accelerating in the second half of the year and an average growth of GBP100,000 per month from June to November 2017, an annualised growth rate of nearly 15%.
The Group also monitors total contracted future revenue, comprising deferred income plus contracted revenue not invoiced. At 30 November 2017, total contracted future revenue grew by 35% to GBP7,123,000 (2016: GBP5,291,000). Included within this total was an amount relating to contracted revenue not invoiced of GBP2,986,000 (2016: GBP1,720,000). This is also an important metric for the Group as it is a leading indicator of multi-year growth in the business.
A.I. Talent Limited has been moved to Held for Sale. The comparative consolidated statement of comprehensive income has been re-presented to show the results of A.I. Talent Limited as discontinued operations separately from continuing operations.
Revenue from continuing operations reduced by 11% year on year to GBP8,063,000 (2016 restated: GBP9,108,000), with recurring revenue comprising 99% of the total (2016 restated: 99%). with sales teams incentivised to focus on high contribution SaaS products. The decrease in revenue, which brought about a reduction in gross margin to 65% during the year (2016 restated: 68%), reflects the decision by management to exit non-profitable contracts in combination with expected client churn. Due to the majority of the growth in the Group's annual contract value base occurring in the second half of the year, the benefit will flow through into revenue in the 2018 financial year.
The Group's continuing operations delivered an adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) loss for the year of GBP1,364,000 (2016 restated: GBP358,000). This figure being adjusted for non-recurring items of GBP854,000 (2016 restated: GBP1,529,000), a share of loss of associate of GBP254,000 (2016: GBP91,000) and a share based payments charge of GBPNil (2016: GBP13,000), the EBITDA loss from continuing operations for the year was GBP2,472,000 (2016 restated: loss of GBP1,991,000).
Operating loss from continuing operations was GBP3,450,000 (2016 restated: GBP3,001,000). In arriving at the operating loss, the Group has incurred GBP1,595,000 (2016 restated: GBP1,059,000) in research and development expenditure, GBP107,000 (2016: GBP285,000) in restructuring costs and charged GBP978,000 (2016 restated: GBP1,010,000) in depreciation and amortisation.
The Group made a profit for the year from discontinued operations of GBP558,000 (2016 restated: GBP1,437,000). Further information relating to discontinued operations is provided within the Strategic Report and within note 6 to the consolidated financial statements.
2018 will see continued focus on growth in revenue and gross margin, whilst the Group further develops the Vuelio product.
Loss per share
The basic loss per share from continuing operations was 1.01p (2016 restated: 1.08p). Basic earnings per share from discontinued operations was 0.17p (2016 restated: 0.46p).
Cash
In July 2017, the Group raised GBP1,020,000 by the issue of 31,384,615 Ordinary Shares at a price of 3.25p per share. Cash at the year-end stood at GBP673,000 (2016: GBP1,162,000) whilst net debt, calculated as loan notes and other loans less cash held, was GBP2,700,000 (2016: GBP2,113,000) at the year end.
Key performance indicators
On a monthly basis management accounts are prepared which provide performance indicators covering revenue, gross margins, EBITDA, result before tax, result after tax, cash balances and recurring revenue. The key performance indicators for the year are:
GBP'000 2017 2016 restated Continuing Operations ----------------------- ------- ------------- Revenue 8,063 9,108 Gross margin (%) 65% 68% Adjusted EBITDA - loss (1,364) (358) EBITDA - loss (2,472) (1,991) Loss before taxation (3,793) (3,396) Loss after taxation (3,335) (3,400) Cash balances 673 1,162 Recurring revenue 8,020 8,834
These performance indicators are measured against both an approved budget and the previous year's actual results.
Each month the Board assesses the performance of the Group based on key performance indicators. These are used in conjunction with the controls described in the corporate governance statement and relate to a wide variety of aspects of the business, including: new business and renewal sales performance; marketing, development and research activity; year to date financial performance, profitability forecasting and cash flow forecasting.
Dividend
As a result of the significant investment the Company has made in the strategic product innovation and sales development, the directors do not propose to pay a dividend for 2017 (2016: GBPNil).
Consolidated Statement of Comprehensive Income
Year ended 30 November 2017
Hot Features
Premium
Note 2017 2016 (restated)
GBP'000 GBP'000
Revenue 3 8,063 9,108
Cost of sales (2,823) (2,892)
-------- ---------------
Gross profit 5,240 6,216
Administrative expenses (6,604) (6,574)
-------- ---------------
Adjusted EBITDA (1,364) (358)
Non-recurring items 5 (854) (1,529)
Share of loss of associate 14 (254) (91)
Share based payments 24 - (13)
-------- ---------------
EBITDA (2,472) (1,991)
Depreciation of tangible
fixed assets 15 (71) (176)
Amortisation of intangible
assets acquired through business
combination 13 (558) (558)
Amortisation of software
and development intangible
assets 13 (349) (276)
-------- ---------------
Operating loss 5 (3,450) (3,001)
Financial expense 9 (343) (395)
-------- ---------------
Loss before taxation (3,793) (3,396)
Taxation credit/(charge) 10 458 (4)
-------- ---------------
Loss for the year from continuing
operations (3,335) (3,400)
Profit for the year from
discontinued operations 6 558 1,437
-------- ---------------
Loss for the year (2,777) (1,963)
Other comprehensive income - -
-------- ---------------
Total comprehensive income
for the period attributable
to the owners of the Parent
Company (2,777) (1,963)
======== ===============
Earnings per share Note Continuing Operations Continuing
Operations
2016
2017 (restated)
Basic loss per share 12 (1.01)p (1.08)p
Diluted loss per share 12 (1.01)p (1.08)p
Continuing and Continuing
Discontinued Operations
Operations 2017 2016 (restated)
Basic loss per share 12 (0.84)p (0.62)p
Diluted loss per share 12 (0.84)p (0.62)p
Consolidated Statement of Financial Position
As at 30 November 2017
Note 2017 2016
GBP'000 GBP'000
Non-current assets
Intangible assets 13 6,231 7,062
Investment in associate 14 280 534
Property, plant and equipment 15 146 100
Deferred tax assets 22 206 230
-------- --------
Total non-current assets 6,863 7,926
-------- --------
Current assets
Trade and other receivables 16 2,968 2,565
Current tax receivables 458 436
Cash and cash equivalents 25 673 1,162
Assets classified as held
for sale 7 270 381
-------- --------
Total current assets 4,369 4,544
-------- --------
Total assets 11,232 12,470
-------- --------
Current liabilities
Trade and other payables 18 1,558 1,301
Accruals 1,149 941
Provisions 26 - 27
Deferred revenue 19 4,137 3,772
Interest bearing loans and
borrowings 17 2,489 1,374
Liabilities classified as
held for sale 7 260 507
-------- --------
Total current liabilities 9,593 7,922
-------- --------
Non-current liabilities
Provisions 26 226 374
Interest bearing loans and
borrowings 17 884 1,901
Deferred tax liabilities 22 206 230
-------- --------
Total non-current liabilities 1,316 2,505
-------- --------
Total liabilities 10,909 10,427
-------- --------
Net assets 323 2,043
======== ========
Equity
Share capital 23 1,743 1,580
Treasury shares (148) (148)
Share premium account 2,352 1,458
Capital redemption reserve 191 191
Share option reserve 348 377
Equity reserve 255 255
Retained earnings (4,418) (1,670)
-------- --------
Total equity attributable
to the equity holders of
the Parent Company 323 2,043
======== ========
.
Consolidated Statement of Changes in Equity
Year ended 30 November 2017
Share Treasury Share Capital Share Equity Retained Total
capital shares premium redemption option reserve earnings GBP'000
GBP'000 GBP'000 account reserve reserve GBP'000 GBP'000
GBP'000 GBP'000 GBP'000
At 1 December
2015 1,535 (148) 1,271 191 364 255 293 3,761
Total
comprehensive
loss for the
year - - - - - - (1,963) (1,963)
Transactions
with owners
Issue of share
capital 45 - 187 - - - - 232
Share-based
payments - - - - 13 - - 13
----------- --------- ----------- ---------------- ----------- ----------- --------- -----------
At 1
December
2016 1,580 (148) 1,458 191 377 255 (1,670) 2,043
Total
comprehensive
loss for the
year - - - - - - (2,777) (2,777)
Transactions
with owners
Issue of share
capital 163 - 894 - - - - 1,057
Share-based
payments - - - - (29) - 29 -
----------- --------- ----------- ---------------- ----------- ----------- --------- -----------
At 30 November
2017 1,743 (148) 2,352 191 348 255 (4,418) 323
=========== ========= =========== ================ =========== =========== ========= ===========
Share capital and share premium account
When shares are issued, the nominal value of the shares is credited to the share capital reserve. Any premium paid above the nominal value is taken to the share premium account. Access Intelligence plc shares have a nominal value of 0.5p per share. Directly attributable transaction costs associated with the issue of equity investments are accounted for as a reduction from the share premium account.
Treasury shares
The returned shares are now held in treasury and attract no voting rights. The return of shares has been accounted for in accordance with IAS 32 'Financial instruments: Presentation' such that the instruments have been deducted from equity with no gain or loss recognised in profit or loss.
Share option reserve
This reserve arises as a result of amounts being recognised in the income statement relating to share- based payment transactions granted under the Group's share option scheme. The reserve will fall as share options vest and are exercised over the life of the options.
Capital redemption reserve
This reserve arises as a result of keeping with the doctrine of capital maintenance when the Company purchases and redeems its own shares. The amounts transferred into/out from this reserve from a purchase/redemption is equal to the amount by which share capital has been reduced/increased, when the purchase/redemption has been financed wholly out of distributable profits and is the amount by which the nominal value exceeds the proceeds of any new issue of share capital, when the purchase/ redemption has been financed partly out of distributable profits.
Equity reserve
The equity reserve arises as a result of the equity component that has been recognised on the convertible loan notes that have been issued by the Group (see note 17: 'Interest bearing loans and borrowings'). The reserve is determined by deducting the amount of the liability component from the fair value of the convertible loan notes as a whole, net of income tax effects and the relative proportion of the directly attributable transaction costs associated with the issue of the compound instruments.
Retained earnings
The retained earnings reserve records the accumulated profits and losses of the Group since inception of the business. Where subsidiary undertakings are acquired, only profits and losses arising from the date of acquisition are included.
Consolidated Statement of Cash Flow
Year ended 30 November 2017
Note 2017 2016
GBP'000 GBP'000
Loss for the year (2,777) (1,963)
Adjusted for:
Taxation 10 (458) 64
Depreciation and amortisation 13,15 978 1,078
Share option charge 24 - 13
Financial expense 9 343 395
Loss on disposal of property,
plant and equipment 15 - -
Share of loss of associate 254 91
Profit on sale of AIControlPoint
Limited 6 (592) -
Profit on sale of Due North
Limited 6 - (1,664)
Profit on sale of AITrackRecord
Limited 6 - (585)
-------- --------
Operating cash outflow before
changes in working capital (2,252) (2,571)
(Increase)/Decrease in trade
and other receivables (576) 934
Increase/(Decrease) in trade
and other payables 731 (1,228)
-------- --------
Net cash outflow from operations
before taxation (2,097) (2,865)
Taxation received 436 -
-------- --------
Net cash outflow from operations (1,661) (2,865)
-------- --------
Cash flows from investing
Acquisition of property, plant
and equipment 15 (118) (17)
Acquisition of software licenses 13 (79) (57)
Cost of software development 13 - (522)
Disposal of AIControlPoint
(net of expenses) 6 615 -
Disposal of Due North Limited
(net of expenses) 6 - 4,030
less: cash and cash equivalents
disposed of 6 - 77
Disposal of AITrackRecord Limited
(net of expenses) 6 - 7
less: cash and cash equivalents
disposed of 6 - (10)
Move to held for sale of A.I.
Talent Limited (5) -
-------- --------
Net cash inflow from investing 413 3,508
-------- --------
Cash flows from financing activities
Interest paid (298) (336)
Issue of shares 23 1,017 -
Exercise of share options 23 40 232
Repayment of loan notes 17 - (900)
-------- --------
Net cash inflow/(outflow) from
financing 759 (1,004)
-------- --------
Net decrease in cash and cash
equivalents 25 (489) (361)
Opening cash and cash equivalents 25 1,162 1,523
-------- --------
Closing cash and cash equivalents 25 673 1,162
======== ========
Notes to the Consolidated Financial Statements
1. Basis of preparation
The financial information set out in the announcement does not constitute the company's statutory accounts for the years ended 30 November 2017 or 2016. The financial information for the year ended 30 November 2016 is derived from the statutory accounts for that year, which were prepared under IFRSs, and which have been delivered to the Registrar of Companies. The auditor's report on those accounts was unqualified, did not contain a statement under either Section 498(2) or Section 498(3) of the Companies Act 2006 and did not include references to any matters to which the auditors drew attention by way of emphasis.
The financial information for the year ended 30 November 2017 is derived from the audited statutory accounts for the year ended 30 November 2017 on which the auditor has given an unqualified report, that did not contain a statement under section 498(2) or 498(3) of the Companies Act 2006 and did not include references to any matters to which the auditors drew attention by way of emphasis. The statutory accounts will be delivered to the Registrar of Companies following the Company's Annual General Meeting.
These extracts from the financial statements have been prepared in accordance with International Financial Reporting Standards ('IFRS's') as adopted by the European Union, and with those parts of the Companies Acts applicable to companies reporting under IFRS.
The extracts from the consolidated financial statements have been prepared under the historical cost convention and on a going concern basis.
2. Basis of consolidation
The Group results comprise the financial statements of Access Intelligence plc and its subsidiaries as at 30th November 2017. They are presented in Sterling and all values are rounded to the nearest thousand pounds (GBP'000).
3. Revenue
The Group's revenue is primarily derived from the rendering of services with the value of sales of goods or delivery of infrastructure not being significant in relation to total Group revenue.
The Group's revenue was generated from the following territories:
Continuing Continuing
Operations Operations
2017 2016
GBP'000 GBP'000
United Kingdom 7,296 8,333
European Union 448 390
Rest of the world 319 385
----------- -----------
8,063 9,108
=========== ===========
4. Segment reporting
Segment information is presented in respect of the Group's operating segments which are based upon the Group's management and internal business reporting.
Inter-segment pricing is determined on an arm's length basis.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly head office expenses.
Segment non-current asset additions show the amounts relating to property, plant and equipment and intangible assets including goodwill. All non-current assets are located in the UK.
Operating segments
The Group operating segments have been decided upon according to their revenue model and product or service offering being the information provided to the Chief Executive Officer and the Board. The Reputation segment derives its revenues from software subscription sales and support and training revenues. As a result of the Group's divestments during the year the segments reported have changed to reflect the Board's focus. The segments are:
-- Reputation -- Discontinued - Disposals & Held for Sale -- Head Office
2017
The segment information for the year ended 30 November 2017, is as follows:
Reputation Head Consolidation Continuing Discontinued Discontinued Consolidated Discontinued Total
GBP'000 office adjustment Operations operations Held adjustment operations GBP'000
GBP'000 GBP'000 GBP'000 GBP'000 for GBP'000 GBP'000
Sale
GBP'000
External
revenue 8,063 - - 8,063 328 388 - 716 8,779
Operating
(loss)/profit (3,297) (303) 404 (3,196) 151 (185) - (34) (3,230)
Share
of loss
of associate - (254) - (254) - - - - (254)
Profit
on sale
of subsidiary - - - - - - 592 592 592
Financial - - - - - - - - -
income
Financial
expense (5) (338) - (343) - - - - (343)
Taxation 458 - - 458 - - - - 458
(Loss)/Profit
after
taxation (2,844) (895) 404 (3,335) 151 (185) 592 558 (2,777)
Reportable
segment
assets 8,583 9,751 (7,324) 10,980 - 270 - 270 11,250
Reportable
segment
liabilities 13,996 4,262 (7,591) 10,667 - 260 - 260 10,927
Other
information:
Additions
to property,
plant
and equipment 28 90 - 118 - - - - 118
Depreciation
and
amortisation 1,366 35 (423) 978 - 6 - 6 984
2016
The segment information for the year ended 30 November 2016, is as follows:
Reputation Head Consolidation Continuing Discontinued Discontinued Consolidated Discontinued Total
GBP'000 office adjustment Operations operations Held adjustment operations GBP'000
GBP'000 GBP'000 GBP'000 GBP'000 for GBP'000 GBP'000
Sale
GBP'000
External
revenue 9,108 - - 9,108 1,333 490 - 1,823 10,931
Operating
(loss)/profit (2,784) (432) 306 (2,910) (730) (41) 40 (731) (3,641)
Share
of loss
of associate - (91) - (91) - - - (91)
Profit
on sale
of subsidiary - - - - - - 2,228 2,228 2,228
Financial
income - 2,500 (2,500) - - - - - -
Financial
expense - (395) - (395) - - - - (395)
Taxation 56 (73) 13 (4) (27) (33) - (60) (64)
(Loss)/Profit
after
taxation (2,728) 1,509 (2,181) (3,400) (757) (74) 2,268 1,437 (1,963)
Reportable
segment
assets 10,058 9,468 (7,757) 11,769 292 409 - 701 12,470
Reportable
segment
liabilities 12,648 4,747 (7,690) 9,705 507 215 - 722 10,427
Other
information:
Additions
to property,
plant
and equipment 14 3 - 17 - - - - 17
Depreciation
and
amortisation 1,304 54 (348) 1,010 63 5 - 68 1,078
5. Operating Loss
Operating loss is stated after charging
2017 2016
GBP'000 GBP'000
Depreciation of property, plant and equipment 71 184
Amortisation of development costs 287 265
Amortisation of brand values 60 60
Amortisation of software licences 62 71
Amortisation of database 332 272
Amortisation of customer list 166 226
Loss/(Profit) on foreign currency translation 11 (6)
Non-recurring items (see below) 854 1,529
Operating lease charges - land and buildings 509 571
Auditor's remuneration (see below) 55 62
Share based payments - 13
Research and development and other technical expenditure
(income statement) (a further GBPNil (2016: GBP522,000)
was capitalised) 1,595 1,664
Increase in provision for receivables 54 39
Non-recurring items in the year ended 30 November 2017 were incurred as a result of restructuring and one off termination of employment costs for staff, along with associated legal fees. The non-recurring costs are made up of the following:
2017 2016
GBP'000 GBP'000
Compensation and notice payments
- all staff 107 285
Non-recurring transitional hosting
and migration costs 747 1,244
-------- --------
854 1,529
======== ========
Auditor's remuneration is further analysed as:
2017 2016
GBP'000 GBP'000
Fees payable to the Company's auditor
for the audit of the Company's
annual accounts 24 25
The audit of the Company's subsidiaries,
pursuant to legislation 23 27
Tax services 8 10
-------- --------
55 62
======== ========
6. Discontinued operations
Due North Limited
In February 2016, the Group sold its subsidiary Due North Limited.
2017 2016
GBP'000 GBP'000
Results of discontinued operation
Revenue - 258
Expenses - (308)
Results from operating activities - (50)
Tax - -
Results from operating activities,
net of tax - (50)
Gain on sale of discontinued operation - 1,664
Tax on gain on sale of discontinued - -
operation
Profit for the year - 1,614
Basic earnings per share 0.0p 0.51p
Diluted earnings per share 0.0p 0.51p
2017 2016
GBP'000 GBP'000
Cash flows from/(used in) discontinued
operation
Net cash from operating activities - 403
Net cash used in investing activities - (15)
Net cash used in financing activities - (465)
Net cash flows for the year - (77)
AITrackRecord Limited
In July 2016, the Group sold its subsidiary AITrackRecord Limited.
2017 2016
GBP'000 GBP'000
Results of discontinued operation
Revenue - 285
Expenses - 1,352
Results from operating activities - 1,637
Tax - -
Results from operating activities,
net of tax - 1,637
Gain on sale of discontinued operation - 585
Tax on gain on sale of discontinued - -
operation
Profit for the year - 2,222
Basic earnings per share 0.0p 0.70p
Diluted earnings per share 0.0p 0.70p
2017 2016
GBP'000 GBP'000
Cash flows from/(used in) discontinued
operation
Net cash from operating activities - (145)
Net cash used in investing activities - -
Net cash used in financing activities - -
Net cash flows for the year - (145)
AIControlPoint Limited
In March 2017, the Group sold its subsidiary AIControlPoint Limited for cash consideration of GBP745,000. This business unit had been reported as a discontinued operation and classified as held for sale at 30 November 2016 following the commitment of the Group's management in 2016 to sell the entity.
2017 2016
GBP'000 GBP'000
Results of discontinued operation
Revenue 328 789
Expenses (178) 43
Results from operating activities 151 833
Tax - (27)
Results from operating activities,
net of tax 151 805
Gain on sale of discontinued operation 592 -
Tax on gain on sale of discontinued - -
operation
Profit for the year 743 805
Basic earnings per share 0.23p 0.26p
Diluted earnings per share 0.23p 0.26p
2017 2016
GBP'000 GBP'000
Cash flows from/(used in) discontinued
operation
Net cash from operating activities - -
Net cash used in investing activities - -
Net cash used in financing activities - -
Net cash flows for the year - -
The following is a breakdown of the effects of the disposal of AIControlPoint Limited on the financial position of the Group:
2017
GBP'000
Goodwill 89
Property, plant and equipment 9
Intangible assets -
Trade and other receivables 166
Cash and cash equivalents -
Deferred tax assets 6
Trade and other payables (247)
Net assets 23
Consideration received, satisfied in cash 745
Cash and cash equivalents disposed of -
A.I. Talent Limited
A.I. Talent Limited is presented as a disposal group held for sale following the commitment of the Group's management in 2017, to sell the business. This business unit had not been reported as a discontinued operation or classified as held for sale at 30 November 2016 and the comparative consolidated statement of comprehensive income has been re-presented to show the results of discontinued operations separately from continuing operations.
2017 2016
GBP'000 GBP'000
Results of discontinued operation
Revenue 388 490
Expenses (573) (531)
-------- --------
Results from operating activities (185) (41)
Tax - (33)
-------- --------
Results from operating activities,
net of tax (185) (74)
Gain on sale of discontinued operation - -
Tax on gain on sale of discontinued - -
operation
-------- --------
Loss for the year (185) (74)
======== ========
Basic earnings per share (0.06) (0.02)
Diluted earnings per share (0.06) (0.02)
2017 2016
GBP'000 GBP'000
Cash flows from/(used in) discontinued
operation
Net cash from operating activities (236) 86
Net cash used in investing activities - -
Net cash used in financing activities - -
-------- --------
Net cash flows for the year (236) 86
======== ========
All discontinued operations
The following tables provide combined information for all discontinued operations. The current year figures include the results of AIControlPoint Limited and A.I. Talent Limited plus consolidation adjustments. The prior year comparative figures also include the results of Due North Limited and AITrackRecord Limited which were sold during the year ended 30 November 2016.
2017 2016
GBP'000 GBP'000
Results of discontinued operation
Revenue 716 1,823
Expenses (750) (2,554)
-------- --------
Results from operating activities (34) (731)
Tax - (60)
-------- --------
Results from operating activities,
net of tax (34) (791)
Gain on sale of discontinued operation 592 2,228
Tax on gain on sale of discontinued - -
operation
-------- --------
Profit for the year 558 1,437
======== ========
Basic earnings per share 0.17p 0.46p
Diluted earnings per share 0.17p 0.46p
The profit from discontinued operations of GBP558,000 (2016: GBP1,437,000) is entirely attributable to the owners of the Company.
2017 2016
GBP'000 GBP'000
Cash flows from/(used in) discontinued
operation
Net cash from operating activities (236) 344
Net cash used in investing activities - (15)
Net cash used in financing activities - (465)
Net cash flows for the year (236) (136)
7. Disposal group held for sale
A.I. Talent Limited is presented as a disposal group held for sale following the commitment of the Group's management in 2017 to sell the business. Efforts to sell the disposal group had therefore commenced before the year end.
At the prior year end, AIControlPoint Limited was presented as a disposal group held for sale following the commitment of the Group's management to a plan to sell the entity with the sale being completed on 14 March 2017 (see note 29).
At 30 November 2017 the disposal group comprised the following assets and liabilities:
Assets classified as held for sale
2017 2016
GBP'000 GBP'000
Goodwill - 89
Development costs - -
Other intangible fixed assets 2 3
Property, plant and equipment - -
Trade and other receivables 263 289
Cash and cash equivalents 5 -
270 381
Liabilities classified as held for sale
2017 2016
GBP'000 GBP'000
Trade and other payables 12 75
Deferred income 248 432
Deferred tax liabilities - -
260 507
8. Particulars of employees
2017 2016
The average number of persons (including
directors) employed by the Group
during the year was:
Technical and support 41 87
Commercial 40 80
Finance and administration 13 19
94 186
Costs incurred in respect of these employees were:
2017 2016
GBP'000 GBP'000
Wages and salaries costs 4,054 6,637
Social security costs 452 699
Pension costs 130 191
Health insurance 16 30
Employee benefits - 13
Compensation for loss of office 107 285
4,758 7,855
The compensation for loss of office charge of GBP107,000 (2016: GBP285,000) relates to 16 employees (2016: 22 employees) who were made redundant during the year.
The reportable key management personnel are considered to be comprised of the Company directors, the remuneration for whose services during the year is detailed in the table below.
Directors' remuneration
Salaries Fees 2017 2016
GBP GBP
Executive Directors
J Arnold 212,225 - 212,225 209,981
Non-Executive Directors
M Jackson 40,000 - 40,000 40,000
D Lowe 20,000 - 20,000 30,000
C Pilling - 30,000 30,000 30,000
J Hamer - 5,000 5,000 -
272,225 35,000 307,225 309,981
J Arnold received health insurance benefits during the year of GBP615 (2016: GBP883).
J Arnold received payments into a personal retirement money purchase pension scheme during the year of GBP7,725 (2016: GBP7,731).
No other directors received any other benefits other than those detailed above.
The number of directors at 30 November 2017 accruing retirement benefits under money purchase schemes was one (2016: one).
The interests of the directors in share options are detailed in the Directors' Report within the Annual Report. No directors exercised share options during the year.
9. Financial expense
2017 2016
GBP'000 GBP'000
Effective interest charged on convertible
loan notes 231 217
Interest charged on non-convertible
loan notes 106 178
Other interest 6 -
Total financial expense 343 395
10. Taxation
2017 2016
GBP'000 GBP'000
Current income taxes credit:
UK corporation tax credit for the
year (458) (333)
Adjustment in respect of prior
year - (103)
-------- --------
Total current income tax credit (458) (436)
-------- --------
Deferred tax (note 22)
Impact of change in tax rate - -
De-recognition of deferred tax
assets - 194
Origination and reversal of temporary
differences - 306
-------- --------
Total deferred tax - 500
-------- --------
Total tax (credit)/charge (458) 64
======== ========
As shown above the tax assessed on the loss on ordinary activities for the year is higher than (2016: higher
than) the standard rate of corporation tax in the UK of 20% (2016: 20%).
The differences are explained as follows:
Factors affecting tax credit:
2017 2016
GBP'000 GBP'000
Loss on ordinary activities before
tax from continuing operations (3,793) (3,396)
Profit on ordinary activities before
tax from discontinued operations 558 1,497
Loss on ordinary activities before
tax (3,235) (1,899)
Loss on ordinary activities multiplied
by effective rate of tax (647) (380)
Items not deductible for tax purposes 25 666
Items not taxable for tax purposes (85) -
Adjustment in respect of prior
year - (103)
Additional R&D claim CTA 2009 (193) (260)
Deferred tax not recognised 442 141
Total tax (credit)/charge (458) 64
Tax (credit)/charge reported in
the Consolidated Statement of
Comprehensive Income (458) 4
Tax charge attributable to discontinued
operations - 60
Total tax (credit)/charge (458) 64
Factors that may affect future tax expenses
A reduction in the UK corporation tax rate from 20% to 19% (effective from 1 April 2017) was substantively enacted in October 2015. A further reduction in the tax rate from 19% to 17% (effective from 1 April 2020) was substantively enacted in September 2016. These rates therefore have been considered when calculating the deferred tax at the reporting date.
11. Dividend paid
Due to the significant and ongoing investment in developing our products, the directors do not propose a dividend in respect of the year ended 30 November 2017.
12. Earnings per share
The calculation of earnings per share is based upon the total Group loss for the year of GBP2,777,000 (2016: loss of GBP1,963,000) divided by the weighted average number of ordinary shares in issue during the year which was 328,645,382 (2016: 315,301,844).
In 2017 and 2016 potential ordinary shares from the share option schemes and convertible loan notes have an anti- dilutive effect due to the Group being in a loss position. As a result, dilutive loss per share is disclosed as the same value as basic loss per share.
This has been computed as follows:
Continuing Discontinued Total Continuing Discontinued Total
Operations Operations Operations Operations
Numerator 2017 2017 2017 2016 2016 2016
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
(Loss)/Profit
for the year
and earnings
used in basic
EPS (3,335) 558 (2,777) (3,400) 1,437 (1,963)
Earnings used
in
diluted EPS (3,335) 558 (2,777) (3,400) 1,437 (1,963)
Denominator
Weighted
average
number of
shares used
in basic EPS
('000) 328,645 328,645 328,645 315,302 315,302 315,302
Effects of:
Dilutive N/A N/A N/A N/A N/A N/A
effect
of options
Dilutive
effect N/A N/A N/A N/A N/A N/A
of loan note
conversion
Weighted
average
number of
shares used
in diluted
EPS
('000) 328,645 328,645 328,645 315,302 315,302 315,302
Basic (Loss)/
earnings per
share (pence) (1.01) 0.17 (0.84) (1.08) 0.46 (0.62)
Diluted loss
per share
for the year
(pence) (1.01) 0.17 (0.84) (1.08) 0.46 (0.62)
The total number of options and warrants granted at 30 November 2017 of 19,518,379 (2016: 24,353,073) would generate GBP567,305 (2016: GBP716,379) in cash if exercised. At 30 November 2017, 2,220,000 (2016: 220,000) were priced above the mid-market closing price of 4.0p per share (2016: 4.625p per share) and 17,298,379 (2016: 24,133,073) were below.
At 30 November 2017 3,220,000 (2016: 7,872,941) staff options were eligible for exercising at an average price of 2.69p (2016: 2.96p). Also eligible for exercising are the 14,298,379 (2016: 14,491,897) warrants priced at 2.75p per share held by Elderstreet VCT plc, D Lowe and other individuals consequent to an initial investment in the Company in October 2008.
The below table shows the amount of outstanding convertible loan notes at 30 November 2017 and the amount of shares they subsequently converted into as a result of the holders serving the Company notice to convert on 28 December 2017.
Loan notes Convert into Date of conversion
GBP'000 shares '000
31 December
Elderstreet VCT 500 12,500 2017
31 December
Unicorn AIM VCT 750 18,750 2017
29 January
Elderstreet VCT 200 6,667 2018
29 January
Hawk Investments 300 10,000 2018
29 January
Kestrel Partners LLP 400 13,333 2018
29 January
Octopus AIM VCT 200 6,667 2018
Total 2,350 67,917
13. Intangible fixed assets
Brand Goodwill Development Software Database Customer Total
Value GBP'000 Costs Licences GBP'000 relationships GBP'000
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 December
2015 1,369 11,137 3,379 236 997 830 17,948
Capitalised
during the
year - - 522 57 - - 579
Disposals - (1,872) (1,800) - - - (3,672)
Held for sale - (89) (183) (150) - - (422)
At 30
November
2016 1,369 9,176 1,918 143 997 830 14,433
Capitalised
during the
year - - - 79 - - 79
Disposals - - - - - - -
Held for sale - - (765) (26) - - (791)
At 30
November
2017 1,369 9,176 1,153 196 997 830 13,721
Amortisation
and
impairment
At 1 December
2015 469 7,077 2,644 127 138 70 10,525
Charge for
the year 60 - 265 71 272 226 894
Disposals - (1,872) (1,846) - - - (3,718)
Held for sale - - (183) (147) - - (330)
At 30
November
2016 529 5,205 880 51 410 296 7,371
Charge for
the year 60 - 287 62 332 166 907
Disposals - - - - - - -
Held for sale - - (765) (23) - - (788)
At 30
November
2017 589 5,205 402 90 742 462 7,490
Net Book
Value
At 30
November
2017 780 3,971 751 106 255 368 6,231
At 30
November
2016 840 3,971 1,038 92 587 534 7,062
The carrying value and remaining amortisation period of individually material intangible assets are as follows:
Carrying Remaining
amount amortisation
period
2017 2016 2017 2016
GBP'000 GBP'000 Years Years
Brand
Access Intelligence Media and Communications 780 840 13 14
Development Costs
Access Intelligence Media and Communications
- Vuelio Platform Development 210 338 4 5
AIMediaData - Vuelio Platform Development 541 700 4 5
Database
AIMediaData - PR & Media Contacts
Database 255 587 1 2
Customer Relationships
AIMediaData - Acquired Customer Relationships 368 534 3 4
For the purpose of impairment testing, goodwill is allocated by entity, which represent the Group's CGUs and the lowest level within the Group at which the goodwill is monitored.
The carrying value of goodwill allocated to each CGU is:
2017 Goodwill
GBP'000
Continuing operations
Access Intelligence Media and Communications
Limited 1,928
AIMediaData Limited 2,043
3,971
2016 Goodwill
GBP'000
Continuing operations
Access Intelligence Media and Communications
Limited 1,928
AIMediaData Limited 2,043
3,971
At the reporting date, impairment tests were undertaken by comparing the carrying values of goodwill, capitalised development costs and other assets with the recoverable amount of the CGU to which the goodwill, capitalised development costs and other assets have been allocated. The recoverable amount of the CGU is based on value-in-use calculations.
These calculations use pre-tax cash flow projections covering a five-year period based on approved budgets and forecasts in the first three years, followed by applying specific growth rates for which the key assumptions in respect of annual revenue growth rates range between 0% and 7% from year 4 onwards, with a terminal value after
year five.
The key assumptions used for value-in-use calculations are those regarding revenue growth rates and discount rates over the forecast period. Growth rates are based on past experience, the anticipated impact of the CGUs significant investment in research and development, and expectations of future changes in the market.
The discount rate used for all companies was 12%, based on an assessment of the Group's cost of capital and on comparison with other listed technology companies. The terminal growth rate used for the purposes of goodwill impairment assessments was 2.5%. The Board considered that no impairment to goodwill is necessary based on the value-in-use reviews of Access Intelligence Media and Communications Limited and AIMediaData Limited as the value-in-use calculations exceeded the carrying values of goodwill relating to those companies.
Sensitivity analysis has been performed on reasonably possible changes in assumptions upon which recoverable amounts have been estimated. Based on the sensitivity analysis, a reduction of 43% in EBITDA delivered by Access Intelligence Media and Communications Limited would result in the carrying value of its goodwill and intangible assets being equal to the recoverable amount. For AIMediaData Limited, a 37% reduction in EBITDA would result in the carrying value of its goodwill and intangible assets being equal to the recoverable amount. For both companies, an increase in the discount rate by 12 percentage points would result in the carrying value of goodwill and intangible assets being equal to the recoverable amount.
Other impairments
Other intangible assets are tested for impairment if indicators of an impairment exist. Such indicators include performance falling short of expectation.
In 2017, no development costs (2016: GBPNil) were impaired as a result of projects that did not perform as expected.
The directors considered that there were no indicators of impairment relating to the remaining intangible fixed assets at 30 November 2017.
14. Investment in associate
Investment
in associate
GBP'000
Cost
At 1 December 2015 -
Additions 625
At 30 November 2016 625
Additions -
At 30 November 2017 625
Share of loss of associate and impairment
At 1 December 2015 -
Share of loss of associate 91
At 30 November 2016 91
Share of loss of associate 254
At 30 November 2017 345
Net Book Value
At 30 November 2017 280
At 30 November 2016 534
As part of the consideration for the disposal of AITrackRecord Limited during the prior year, the Group received a 20% shareholding in TrackRecord Holdings Limited, a company registered in England and Wales. The fair value of this shareholding based on the funding raised by TrackRecord Holdings Limited was GBP625,000. The shareholding in TrackRecord Holdings Limited is treated as an investment in associates as the Group is not able to exercise control over the company, but is able to exercise significant influence over the company by way of its 20% shareholding and through J Arnold being the Group's representative on the board of TrackRecord Holdings Limited.
During the period of ownership, the Group's share of the loss of TrackRecord Holdings Limited was GBP254,000 (2016: GBP91,000). As the Group applies the equity method of accounting for its investment in TrackRecord Holdings Limited, the carrying value of investments in associates is reduced by this share of loss at the year-end.
Summarised financial information for associate
The tables below provide summarised financial information for TrackRecord Holdings Limited, an associate which is considered material to the Group. The information disclosed reflects the amounts presented in the financial statements of TrackRecord Holdings Limited and not Access Intelligence Plc's share of those amounts.
Track Record Holdings Track Record Holdings
Limited Limited
2017 2016
GBP'000 GBP'000
Total current assets 799 2,160
Total non-current assets 787 703
Total current liabilities (187) (193)
Net assets 1,399 2,670
Access Intelligence Plc
share of net assets (20%) 280 534
Reconciliation to carrying amounts
Track Record Holdings Track Record Holdings
Limited Limited
2017 2016
GBP'000 GBP'000
Opening net assets 1 December 2,670 -
Issue of share capital - 313
Share premium on issue of
shares - 2,812
Loss for the period (1,271) (455)
Net assets 1,399 2,670
Summarised statement of comprehensive income
Track Record Holdings Track Record Holdings
Limited Limited
2017 2016
GBP'000 GBP'000
Revenue 430 359
Loss for the period from
continuing operations (1,271) (455)
Other comprehensive income - -
Total comprehensive income (1,271) (455)
15. Property, plant and equipment
Fixtures, fitting Leasehold improvements Total
and GBP'000 GBP'000
equipment
GBP'000
Cost
At 1 December 2015 576 187 763
Additions 17 - 17
Disposals (115) - (115)
Classified as held
for sale (2) - (2)
At 1 December 2016 476 187 663
Additions 26 92 118
Disposals (1) - (1)
Classified as held
for sale (47) - (47)
At 30 November
2017 454 279 733
Depreciation
At 1 December 2015 436 54 490
Charge for the
year 90 94 184
Disposals (109) - (109)
Classified as held
for sale (2) - (2)
At 1 December 2016 415 148 563
Charge for the
year 50 21 71
Disposals (1) - (1)
Classified as held
for sale (46) - (46)
At 30 November
2017 418 169 587
Net Book Value
At 30 November
2017 36 110 146
At 30 November
2016 61 39 100
16. Trade and other receivables
2017 2016
GBP'000 GBP'000
Current assets
Trade receivables 1,925 1,780
Less: provision for impairment
of trade receivables (137) (78)
1,788 1,702
Prepayments and other receivables 1,180 863
2,968 2,565
All trade receivables are reviewed by management and are considered collectible. The ageing of trade receivables which are past due and not impaired is as follows:
2017 2016
GBP'000 GBP'000
Days outstanding:
31-60 days 505 829
61-90 days 157 119
91-180 days 377 178
1,039 1,127
Movements on the Group provision for impairment of trade receivables are as follows:
2017 2016
GBP'000 GBP'000
At 1 December 78 330
Increase in provision 84 39
Written off in year (25) (291)
At 30 November 137 78
Ageing of impaired debt
2017 2016
GBP'000 GBP'000
Days outstanding
91-180 days 18 26
181-270 days 21 25
More than 270 days 98 27
137 78
The creation and release of a provision for impaired receivables has been included in 'administrative expenses' in the income statement. Amounts charged to the allowance account are generally written off, where there is no expectation of recovering additional cash.
The other asset classes within trade and other receivables do not contain impaired assets.
The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above together with our cash deposits totalling GBP673,000 (2016: GBP1,162,000). The Group does not hold any collateral as security.
As disclosed in note 21, credit risk is considered according to sector and necessary allowances are made when needed by assessing changes in our customers' credit profiles and credit ratings.
17. Interest bearing loans and borrowing
2017 2016
GBP'000 GBP'000
Current
Convertible loan notes 2,359 1,264
Non-convertible loan
notes 110 110
Other 20 -
2,489 1,374
Non-current
Convertible loan notes - 1,052
Non-convertible loan
notes 844 849
Other 40 -
884 1,901
On 30th June 2009 GBP1,750,000 convertible loan notes were issued. At 30 November 2015 and 30 November 2016, GBP1,250,000 of these loan notes were in issue.
The original terms were that these loan notes were redeemable at par or convertible to ordinary shares at 4p per ordinary share on or before maturing on 30th June 2015 and carried a coupon rate of 6% per annum payable semi- annually until such time as they were repaid or were converted in accordance with their terms. The holder of the notes may convert all or part of the notes held by them into new ordinary shares in the Company on delivery to the Company of a conversion notice at 4p per share.
In 2014, the Company agreed terms with Elderstreet VCT (a company related to Chairman Michael Jackson) and Unicorn AIM VCT plc to extend the loans such that they mature on 31 December 2015, with enhanced interest at 8% during this extended period with conversion rights unchanged at 4p per share. In January 2016, the maturity dates of the loan notes were extended to 31 December 2016 with all other terms remaining unchanged. The carrying value of these loans at the prior year-end, including accrued interest, was GBP1,277,000. In December 2016 the maturity dates of the loan notes were further extended to 31 December 2017 with all other terms remaining unchanged. These notes are classified as current at the year end.
In December 2014 the Company issued GBP1,100,000 of convertible loan notes. These loan notes are redeemable at par or convertible to ordinary shares at 3p per ordinary share on or before maturing on 3 December 2019 and carry a coupon rate of 8% per annum payable semi-annually until such time as they are repaid or converted.
On 28 December 2017, the Company received notices from all of the holders of the GBP1.25 million 2009 convertible loan notes and the GBP1.1 million 2014 convertible loan notes to convert these into equity.
The 2009 convertible loan notes converted into 31,250,000 new ordinary shares at a conversion price of 4.0p, with conversion being effective on 31 December 2017 and the new shares being admitted to trading on the AIM market of the London Stock Exchange on 3 January 2018.
The 2014 convertible loan notes converted into 36,666,665 new ordinary shares at a conversion price of 3.0p, with conversion being effective and the new shares being admitted to trading on the AIM market of the London Stock Exchange on 29 January 2018.
The net proceeds received from the issues of the convertible loan notes have been split between the liability element and an equity component, representing the fair value of the embedded option to convert the liability into equity of the Company, as follows:
2017 2016
GBP'000 GBP'000
Proceeds of issue of - -
convertible loan notes
Existing loan notes
rolled over 2,350 2,350
Equity component (255) (255)
Deferred taxation (79) (79)
-------- --------
Initial fair value of
liability component 2,016 2,016
Cumulative interest
charged 1,240 1,009
Cumulative interest
paid (897) (709)
-------- --------
Liability component
at 30 November 2,359 2,316
======== ========
The equity component of GBP255,000 (2016: GBP255,000) has been credited to equity reserve. The interest charged for the year is calculated by applying an effective rate of interest of 10.1% (2016: 10.1%) to the liability component for the 12-month period. The liability component is measured at amortised cost. The difference between the carrying amount of the liability component at the date of issue and the amount reported in the statement of financial position at 30 November 2017 represents the effective interest rate less interest paid to that date.
The movement on the convertible loan note liability is summarised below:
2017 2016
GBP'000 GBP'000
Opening loan liability 2,316 2,286
Interest charged for
the year 231 217
Interest paid in the
year (188) (187)
-------- --------
Liability component
at 30 November 2,359 2,316
======== ========
On 22 June 2015 the Company issued GBP1,818,000 of non-convertible loan notes which carried an interest rate of 10% for one year rising to 12% thereafter. Interest is payable quarterly in arrears. The loans notes are fully repayable in five years. GBP900,000 of these loan notes were repaid on 22 April 2016.
2017 2016
GBP'000 GBP'000
Opening loan liability 959 1,830
Issue of non-convertible - -
loan notes
Costs associated with - -
the issue of loans
Repayment of non-convertible
loan notes - (900)
Interest charged for
the year 105 178
Interest paid in the
year (110) (149)
-------- --------
Liability component
at 30 November 954 959
======== ========
18. Trade and payables
Due within one year 2017 2016
GBP'000 GBP'000
Trade payables 1,262 1,041
Other taxes and social
security costs 206 161
VAT payable 90 99
-------- --------
1,558 1,301
======== ========
19. Deferred revenue
2017 2016
GBP'000 GBP'000
At 1 December 3,772 4,643
Invoiced during the
year 9,064 10,464
Revenue recognised during
the year (8,063) (10,931)
On disposal of business - 28
Revenue recognised on
items moved to held
for sale during the
year (388) -
Deferred revenue moved
to held for sale (248) (432)
-------- --------
At 30 November 4,137 3,772
======== ========
20. Financial instruments
The Group's treasury activities are designed to provide suitable, flexible funding arrangements to satisfy the Group's requirements. The Group uses financial instruments comprising borrowings, cash, liquid resources and items such as trade receivables and payables that arise directly from its operations. The main risks arising from the Group financial instruments relate to the maintaining of liquidity across the four group entities and debt collection. The Board reviews policies for managing each of these risks and they are summarised below.
The Group finances its operations through a combination of cash resources, loan notes and equity. Short term flexibility is provided by moving resources between the individual subsidiaries. Exposure to interest rate fluctuations is minimal as all borrowings are at fixed rates of interest. The Group also has deposit facilities on which 1.25% interest was being earned throughout 2017 (2016: 1.25%) and will be optimising the use of these accounts going forward. The Group's exposure to interest rate risk is not significant and therefore no sensitivity analysis has been performed.
Small amounts of foreign currency risk exist in two subsidiaries which invoice in currencies other than sterling. Due to the relative size of the currency risks concerned no hedging takes place in Australian dollars, Euros or US dollars. At the year-end there were no open contracts, however the Group was holding a US dollar deposit of $2,044 (2016: $271,334) which was translated at the rate of 1.3399 (2016: 1.2481) for inclusion in the consolidated statement of financial position. This amounted to GBP1,526 (2016: GBP217,398). There are no hedges against this balance.
The Group did not hold any other significant assets or liabilities in foreign denominated currencies at the reporting date. The directors do not consider that there is a significant exposure to foreign exchange risk and therefore no sensitivity analysis has been performed.
At 30 November 2017 borrowings comprised convertible loan notes of GBP2,350,000 (2016: GBP2,350,000) and non-convertible loan notes of GBP918,000 (2016: GBP918,000).
On 28 December 2017, the Company received notices from all of the holders of the GBP1,250,000 2009 convertible loan notes and the GBP1,100,000 2014 convertible loan notes to convert these into equity.
There is no material difference between the fair values and book values of the Group's financial instruments. Short term trade receivables and payables have been excluded from the above disclosures.
The objectives of the Group's treasury activities are to manage financial risk, secure cost-effective funding where necessary and minimise the adverse effects of fluctuations in the financial markets on the value of the Group's financial assets and liabilities, on reported profitability and on the cash flow of the Group. Interest income is sought wherever possible and in 2016 produced GBPNil (2016: GBPNil) of income.
The Group's principal financial instruments for fundraising are through share issues.
Loans, receivables Total
and other payables GBP'000
GBP'000
2017
Assets per the balance
sheet
Trade and other receivables
excluding prepayments 1,788 1,788
Cash and cash equivalents 673 673
2,461 2,461
Liabilities per the balance
sheet
Trade and other payables
excluding accruals 1,558 1,558
Interest bearing loans
and borrowings 3,373 3,373
4,931 4,931
Undiscounted contractual
maturity of financial liabilities
Amounts due within one
year 1,759
Amounts due between one
and five years 1,156
Amounts that convert to
equity 2,359
5,274
Less: future interest charges (342)
Financial liabilities carrying
value 4,931
The above analysis excludes corporation tax receivable.
Loans, receivables Total
and other payables GBP'000
GBP'000
2016
Assets per the balance
sheet
Trade and other receivables
excluding prepayments 1,702 1,702
Cash and cash equivalents 1,162 1,162
2,864 2,864
Liabilities per the balance
sheet
Trade and other payables
excluding accruals 1,301 1,301
Interest bearing loans
and borrowings 3,275 3,275
4,576 4,576
Undiscounted contractual
maturity of financial liabilities
Amounts due within one
year 1,541
Amounts due between one
and five years 1,502
Amounts that convert to
equity 2,315
5,358
Less: future interest charges (782)
Financial liabilities carrying
value 4,576
The liquidity risk relating to the contractual liabilities listed above is managed on a local basis through their day to day cash management. The Group has invested significantly in restructuring the Group and building products written in current code bases, accordingly the Group is liquid with GBP673,000 (2016: GBP1,162,000) available cash resources against a liability payable within the next 12 months of GBP1,759,000 (2016: GBP1,541,000). Management monitor cash balances weekly. However should any subsidiary, or the Company, find that it does not have the liquidity to pay a debt as it becomes due an inter-company cash transfer will be made available by another member of the Group.
21. Financial and operational risk management
The Group's activities expose it to a variety of financial risks which are managed by the Group and subsidiary management teams as part of their day-to-day responsibilities. The Group's overall risk management policy concentrates on those areas of exposure most relevant to its operations. These fall into four categories:
-- Competitive risk - that our products are no longer competitive or relevant to our customers; -- Cash flow and liquidity risk - that we run out of the cash required to run the business; -- Credit risk - that our customers do not pay; -- Key personnel risk - that we cannot attract and retain talented people; and
-- Capital risk - that we do not have an optimal structure to allow for future acquisition and growth.
Further information on these risks and the Group's actions to mitigate them is provided within the Strategic Report.
22. Deferred tax assets and liabilities
The following are the major deferred tax assets and liabilities recognised by the Group and the movements thereon during the current year and the prior year:
Accelerated Convertible Share-based Tax losses Accelerated Total
depreciation loan payments tax on
GBP'000 notes GBP'000 GBP'000 assets GBP'000
GBP'000 GBP'000
At 1 December
2015 29 (29) - 719 (190) 529
Charge to profit
or loss (2) - - (511) 13 (500)
Disposal of
subsidiary 1 - - - (24) (23)
Moved to held
for sale (6) - - - - (6)
At 30 November
2016 22 (29) - 208 (201) -
At 1 December
2016 22 (29) - 208 (201) -
Charge to profit
or loss 8 - - (32) 24 -
Disposal of - - - - - -
subsidiary
Moved to held - - - - - -
for sale
At 30 November
2017 30 (29) - 176 (177) -
Attributable
to:
Continuing
operations 30 (29) - 176 (177) -
Discontinued - - - - - -
operations
Total 30 (29) - 176 (177) -
At the reporting date the Group had unused tax losses of approximately GBP7,000,000 (2016: GBP6,000,000) available for offset against future profits. A deferred tax asset has been recognised in respect of all available losses expected to be utilised against future taxable profits within three years based on the forecasts approved by the directors. The tax losses do not have any expiry date.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.
Deferred tax assets totalling GBP1,299,000 (2016: GBP923,000) arising in respect of losses have not been included in the statement of financial position due to uncertainties in regard to their recoverability.
The following is the aggregate amounts of deferred tax balances in each group entity, after allowable offset, for financial reporting purposes:
2017 2016
GBP'000 GBP'000
Deferred tax assets 206 230
Deferred tax liabilities (206) (230)
Total - -
23. Share capital
Equity: Ordinary shares of 0.5p 2017 2016
each GBP'000 GBP'000
Allotted, issued and fully paid
348,674,357 ordinary shares of
0.5p each (2016: 315,935,118
ordinary shares of 0.5p each) 1,743 1,580
2017 2016
Number of shares at 1 December 315,935,118 307,127,015
New shares issued in year 31,384,615 -
Share options exercised 1,354,624 8,808,103
----------- -----------
Number of shares at 30 November 348,674,357 315,935,118
=========== ===========
During 2017, 1,161,106 shares were issued at 3.0p as a result of a former employee exercising share options and 193,518 were issued at 2.75p as a result of the same former employee exercising warrants, and 31,384,615 ordinary shares were issued at 3.25p to existing institutional shareholders and management.
On 21 September 2011 29,666,667 ordinary shares of 0.5 pence, and with a total nominal value of GBP148,333 were returned to the Company and were held in treasury at the year end. The shares held in treasury have no voting rights, or rights to dividends and so the total issued share capital for voting and dividend purposes is 319,007,690 (2016: 286,268,451).
Transaction costs associated with share issues in the year amounted to GBP3,000 (2016: GBPNil). Transaction costs are accounted for as a reduction from the share premium account.
24. Equity-settled share based payments
The Company has a share option scheme for employees of the Group.
Ordinary share options and warrants granted and subsisting at 30 November 2017 were as follows:
Date of grant Exercise No of shares Exercisable
price between
23 October 2008 2.75p 14,298,379 No time limit
Apr 2012-Apr
03 April 2009 2.75p 1,000,000 2019
Sep 2012-Sep
29 September 2009 4.375p 2,000,000 2019
Dec 2012-Dec
04 December 2009 5.5p 220,000 2019
Dec 2014-Dec
19 December 2011 2.2p 1,000,000 2021
Oct 2016-Oct
24 October 2013 2.5p 1,000,000 2023
19,518,379
Details of the movements in the weighted average exercise price ("WAEP") and number of share options during the current and prior year are as follows:
At start Granted Exercised Forfeited At end
of year of year
WAEP 2016 2.90 - 2.63 (4.64) 2.94
WAEP 2017 2.94 - 2.96 (3.13) 2.91
Options
2016 33,958,676 - (8,808,103) (797,500) 24,353,073
Options
2017 24,353,073 - (1,354,624) (3,480,070) 19,518,379
No options were cancelled in the year (2016: Nil).
The weighted average price of shares on the date of exercise during the year was 4.50 pence (2016: 4.875 pence).
The option movements detailed above resulted in a share-based payment charge for the Group of GBPNil (2016: GBP13,000). During 2017, there were no share options granted in the year.
Further details of share options exercisable at the year-end are provided in note 12.
There are no market, non-market or service conditions as part of the share option scheme. The only condition existing is that employees must still be in employment with the Company at the point they exercise the options.
25. Cash and cash equivalents
The Group monitors its exposure to liquidity risk based on the net cash flows that are available. The following provides an analysis of the changes in net funds:
As at 30 Cash outflow As at 30
November GBP'000 November
2016 2017
GBP'000 GBP'000
Cash and cash equivalents 1,162 (489) 673
As at 30 Cash outflow As at 30
November GBP'000 November
2015 2016
GBP'000 GBP'000
Cash and cash equivalents 1,523 (361) 1,162
26. Commitments
Capital commitments
The group had no capital commitments at the end of the financial year or prior year
Operating lease commitments
Commitments for minimum lease payments in relation to operating leases are payable as follows:
Land and buildings
2017 2016
GBP'000 GBP'000
Not later than one year 246 566
Later than one year and not later
than five years 759 2,281
Later than five years - 96
1,005 2,943
The Group leases various offices and storage units under non-cancellable fixed term operating lease agreements. The lease terms are up to 10 years, with break clauses ahead of the full term and the majority are not renewable at the end of the lease period.
There were no other operating lease commitments.
Provisions and contingent liabilities
Onerous Leasehold
Contracts dilapidations
GBP'000 GBP'000
At 1 December 2016 27 374
Charged to profit or loss - -
Released in year (27) (148)
At 30 November 2017 - 226
Due within one year - -
Due after more than one year - 226
- 226
Onerous contracts predominantly relate to office equipment and services no longer required after a business combination. There was no remaining liability at 30 November 2017.
Leasehold dilapidations relate to the estimated cost of returning a leasehold property to its original state at the end of the lease in accordance with the lease terms. The main uncertainty relates to estimating the cost that will be incurred at the end of the lease. The earliest point at which it is considered that this amount may become payable is December 2018.
27. Related party transactions
Two (2016: one) of the directors have received a portion of their remuneration through their individual service companies during the year. The payments represent short term employee benefits. The amounts involved are as follows and relate to activities within their responsibilities as directors:
In all cases the directors are responsible for their own taxation and national insurance liabilities.
2017 2016
GBP' GBP'
C Pilling (via The Personal Web
Company Limited) 30,000 30,000
J Hamer (via Fin Dec Limited) 5,000 -
At the year-end Access Intelligence Plc owed Elderstreet Investments Limited, a company of which M Jackson is Chairman GBP8,337 (2016: GBP8,337).
During the year, interest on convertible loans of GBP56,110 (2016: GBP56,153) and on non-convertible loans of GBP36,000 (2016: GBP31,595) was paid to Elderstreet VCT plc, a company of which M Jackson is Chairman. At the year end, an amount of GBP2,040 (2016: GBP2,040) was due from M Jackson.
During the year, Access Intelligence Plc recharged certain costs to Track Record Holdings Limited, an associate company. The total amount invoiced was GBP80,754 (2016: GBP22,039) and the outstanding balance at the year end was GBPNil (2016: GBP22,039).
During the year Access Intelligence Media and Communications Limited received services from Macranet Limited, a company in which M Jackson is a board member, totalling GBP75,900 (2016: GBP107,400). At the year end the Company owed GBP12,600 (2016: GBP12,600) to Macranet Limited.
During the year the Company recognised a share based payment charge of GBPNil (2016: GBP3,208) in respect of key management personnel.
28. Pension commitments
Individual subsidiaries of the Group operate defined contribution pension schemes for their employees. The assets of the schemes are held separately from those of the Group. The annual contributions payable are charged to the income statement when they fall due for payment.
During the year GBP130,000 (2016: GBP119,000) was contributed by the Group to individual pension schemes. At 30 November 2017 no pension contributions were outstanding (2016: GBPNil).
29. Events after the reporting date
On 28 December 2017, the Company received notices from all of the holders of the GBP1,250,000 2009 convertible loan notes and the GBP1,100,000 2014 convertible loan notes to convert these into equity.
The 2009 convertible loan notes converted into 31,250,000 new ordinary shares at a conversion price of 4.0p, with conversion being effective on 31 December 2017 and the new shares being admitted to trading on the AIM market of the London Stock Exchange on 3 January 2018.
The 2014 convertible loan notes converted into 36,666,665 new ordinary shares at a conversion price of 3.0p, with conversion being effective and the new shares being admitted to trading on the AIM market of the London Stock Exchange on 29 January 2018.
30. Availability of Annual Report
Copies of the Report and Accounts will be posted to shareholders where requested and the document will be available from the Company's website (www.accessintelligence.com).
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR FKBDBOBKKKNK
(END) Dow Jones Newswires
March 02, 2018 02:22 ET (07:22 GMT)
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