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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Big Technologies Plc | LSE:BIG | London | Ordinary Share | GB00BN2TR932 | ORD GBP0.01 |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 151.00 | 151.50 | 154.00 | 154.50 | 154.00 | 154.50 | 43,094 | 16:35:24 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Offices-holdng Companies,nec | 50.17M | 19.96M | 0.0687 | 22.42 | 447.6M |
TIDMBIG
RNS Number : 4951Z
Big Technologies PLC
15 September 2022
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.
Big Technologies PLC
("the Company" or "the Group")
Unaudited interim results for the six months ended 30 June 2022
Big Technologies PLC (AIM: BIG), the leading, integrated technology platform for the remote monitoring of individuals, is pleased to announce its interim results for the six-month period to 30 June 2022 (the "period").
H1 2022 H1 2021 FY 2021 GBPm GBPm GBPm Revenue 22.9 18.0 37.6 Gross margin (%) 71.4% 71.3% 70.8% Statutory operating profit 8.8 8.0 13.8 Adjusted operating profit(1) 12.1 8.9 17.9 Adjusted EBITDA(2) 13.7 10.2 20.6 Adjusted EBITDA(2) margin (%) 60.1% 56.7% 54.7% Adjusted cash generated from operating activities(3) 11.3 9.1 18.2 Net cash 56.9 23.8 48.0 ------------------------------------- ---------- --------- --------- Pence Pence Pence Adjusted diluted earnings per share(4) 3.7p 2.8p 5.5p Adjusted basic earnings per share(4) 3.9p 2.8p 5.6p Statutory diluted earnings per share 3.0p 2.4p 4.4p Statutory basic earnings per share 3.1p 2.5p 4.5p (1) Before share-based payments expense, amortisation of acquired intangibles, IPO preparation costs and national insurance on warrant exercise.(2) Before share-based payments expense, IPO preparation costs and national insurance on warrant exercise. (3) Before IPO preparation costs and national insurance on warrant exercise. (4) Before share-based payments expense, amortisation of acquired intangibles, IPO preparation costs, national insurance on warrant exercise and the tax effect of these adjusting items. A reconciliation to statutory measures is presented in the notes to the unaudited interim results.
Financial performance
-- Revenue increased by 27% in H1 2022 versus H1 2021 as a result of new contract wins and an increase in business from existing customers;
-- Monthly Recurring Revenue of GBP4.3m, an increase of 43% versus June 2021;
-- Gross margin stable at 71.4% in H1 2022 versus 71.3% in H1 2021. The Group's scalable SaaS-like operating model means that increases to labour, freight and manufacturing costs have been offset by the additional profit earned on incremental revenue;
-- Adjusted EBITDA margins of 60.1% in H1 2022 versus 56.7% in H1 2021 due to increased scale and favourable foreign-exchange movements;
-- Adjusted operating profit increased by 36% in H1 2022 versus H1 2021;
-- Adjusted cash generated from operating activities of GBP11.3m, which includes an investment in working capital and long lead-time inventory to support future growth. Significant net cash balance of GBP56.9m at 30 June 2022, provides support for future growth objectives.
Operational performance and strategy
-- Continued growth in the number of electronic monitoring devices deployed with customers across the world;
-- Successful implementation of new contracts drives growth in Asia-Pacific and Americas;
-- Successful navigation of continuing global supply-side challenges to ensure no delays in deliveries of products to customers;
Current trading and outlook
-- Active engagement continues with a number of potential new customers, which are expected to contribute to revenue from 2023;
-- New contract win using our periodic bio-metric detection device, with first revenue expected in November 2022;
-- Based on current Monthly Recurring Revenue (MRR), the Board expects the Group to deliver a full-year revenue of at least GBP48 million with an adjusted EBITDA margin of in excess of 58%, which is ahead of current market expectations(1) . Our long-term customer relationships and focus on high levels of customer service, allows the Board to remain confident in the longer-term prospects for growth.
(1) Latest company compiled view of market expectations show adjusted EBITDA of GBP25.0m to GBP26.6m (stated before share based payments).
Commenting on the results, Sara Murray OBE, Chief Executive Officer said:
"I am very pleased with our continued growth in revenue and profit during the first half of the financial year, which clearly illustrates the progress we are making against our strategic objectives. The successful implementation of a significant national monitoring contract in New Zealand received positive feedback from the end customer and diversified our global footprint and enhanced our strong reputation in the criminal justice sector. Against a backdrop of external challenges, we have continued to support new and existing customers with our technologies, helping them to make societies safer. Market drivers remain strong and we are confident of delivering further growth in the second half of 2022 and beyond."
For further information please contact:
Big Technologies +44 (0) 19 2360 1910 Sara Murray (Chief Executive Officer) Daren Morris (Chief Financial Officer) Zeus (Nominated Adviser and Sole Broker) +44 (0) 20 3829 5000 Jamie Peel / Dan Bate / Kieran Russell (Investment Banking) Benjamin Robertson (Equity Capital Markets)
The person responsible for arranging the release of this information is Daren Morris, Chief Financial Officer and Company Secretary.
Half Year Review
Overview
The Group has delivered another strong performance of double-digit revenue and profit growth against a backdrop of global macroeconomic conditions that remain challenging. The Group continued to manage supply chain disruptions through careful long-term planning and by additional investments in long lead-time inventory to ensure it can continue to support both new and existing customers in the second half of 2022 and beyond.
Financial Performance
Revenue
Revenue in the first half of 2022 grew by 27% to GBP22.9m (H1 2021: GBP18.0m), driven by new contract wins in the Asia-Pacific and Americas regions and an increase in revenues earned from existing customers. The majority of revenues continue to be derived from customers in the criminal justice sector, which accounts for more than 98% of reported revenue (H1 2021: 97%).
Revenue growth was primarily driven by the Asia-Pacific and America regions, which grew at 44% and 12% respectively. The Group's eight-year national monitoring contract with the New Zealand Department of Corrections, signed in 2021, started to deliver revenue in the first quarter and is now close to achieving its full run-rate. The group has received positive feedback from the customer on our partnership approach and they are on-track to generate significant cost savings as a result of the introduction of the Group's technology solution. There were also new contract wins during the period in the Americas region.
On a constant currency basis, revenue grew by 26% in the first half of 2022. The Group benefited from a strengthening US dollar versus the same period last year.
MRR, which is the exit run rate of monthly recurring revenue in the last month of the reporting period, was GBP4.3m (H1 2021: GBP3.0m), an increase of 43%. The MRR figure gives the Group visibility over its future revenues derived from its base of long-term contracts.
Profitability
Gross margins were steady at 71.4% (H1 2021: 71.3%). Additional profits earned on incremental revenue from the Group's SaaS-like operating model, were able to offset increases in labour, freight and manufacturing costs caused by supply chain inefficiencies and inflationary pressures in the labour market.
Adjustments made to the interim results (before tax) totalled GBP3.3m (H1 2021: GBP0.9m) and are related to amortisation of acquired intangible assets and share-based payments. See note 3 for further details.
Adjusted operating profit of GBP12.1m increased 36% against H1 2021, with an increase in adjusted operating margin to 52.8% (H1 2021: 49.4%). The increase in adjusted operating margin was driven by the Group's continuing ability to grow revenues organically without significant increases to adjusted administrative expenditures and a positive contribution from favourable foreign currency movements in the first half of 2022. Part of this gain was due to a significant move in Sterling versus the US Dollar which caused our US Dollar denominated cash deposits to be revalued resulting in a one-off gain which is not expected to repeat in the second half of the year.
Adjusted administrative expenses (defined as administrative expenses before share-based payments and IPO preparation costs) increased from GBP4.2m in H1 2021 to GBP4.5m in in H1 2022 reflecting additional PLC costs following the IPO. Adjusted administrative expenses include the benefit of a one-off foreign currency gain on the revaluation of US dollar denominated cash balances of GBP0.9m.
Adjusted EBITDA (quoted before share-based payments) of GBP13.7m increased by 34% versus H1 2021 with adjusted EBITDA margin increasing by 340bps to 60.1% (H1 2021: 56.7%).
Adjusted diluted earnings per share, which excludes the adjusting items outlined in note 3 and includes the dilutive impact of shares potentially issuable in the future, was 3.7p (H1 2021: 2.8p), an increase of 32%, reflecting the increase in adjusted earnings.
Cash flow
The Group's liquidity and net cash position increased to GBP56.9m at 30 June 2022. Operating activities, underpinned by the strong trading performance, generated adjusted cash inflows of GBP11.3m (H1 2021: GBP9.1m) with cash conversion (defined as adjusted operating cash flow divided by adjusted EBITDA of 82% (H1 2021: 89%). The Group increased levels of long lead-time inventory in the second quarter to protect against continuing global supply chain disruption. Increases in the Group's trade and other receivables are linked to the continuing revenue growth and timing of cash collection from customers at the period end.
Net cash utilised in investing activities of GBP2.4m (H1 2021: GBP1.1m) reflects the continued increase in the
number of electronic monitoring devices, which are manufactured in-house and leased to the Group's customers. The Group continued to invest in the research and development of new products and technologies and has continued development on new products including MiniID and SecureBand.
Russia/Ukraine
At this stage the longer-term consequences for the global economy of the tragic events in Ukraine are still uncertain. Whilst the Group has no operations in this part of the world and no direct exposure to customers and suppliers in the region, we continue to monitor the situation carefully and in particular any effects on wider supply chains and energy prices. We do not anticipate any adverse effect on our business as a result of increased energy prices. The Group has also reviewed the current sanctions regime relating to Russia and Ukraine and can confirm the Group has no exposure to any sanctioned entities or individuals.
Operational performance and strategy
In the first half of 2022, the Group continued to deliver its hardware and software solutions to customers and saw ongoing growth in the number of electronic monitoring devices deployed across the world, increasing its international footprint and global presence in the criminal justice sector.
The Group continued to support both new and existing customers during the period and saw a number of important customer renewals and contract wins, which will enhance the future visibility of the Group's revenue stream.
The Group successfully implemented an eight-year national monitoring contract with the New Zealand Department of Corrections, won from a competitor in 2021, which started to deliver revenue in the first quarter of 2022.
Careful long-term planning with suppliers ensured minimal impact in terms of delays of products to customers as a result of continuing global supply-side challenges. The Group invested in long lead-time inventory in the period to ensure it can continue to support new and existing customers in the second half of 2022 and beyond.
The Group is committed to ensuring that its products maintain their competitive advantage in the criminal justice sector and continues to invest in research and development to support its future product roadmap. This roadmap includes developing substance monitoring technologies and combining these with existing location solutions to provide an integrated monitoring device for customers, an industry-first in the sector. The Group has launched our periodic bio-metric detection device and expect revenue from a major customer from November 2022 onwards.
The Directors continue to pursue an active pipeline of organic growth opportunities with governmental customers across Europe and the rest of the world.
Alternative performance measures
In the analysis of the Group's financial performance and position, operating results and cash flows, alternative performance measures are presented to provide readers with additional information. The principal measures presented are adjusted measures of earnings including adjusted operating profit, adjusted EBITDA and adjusted earnings per share. See note 3 for further details.
Research and development
The Group continues to invest in research and development activities in relation to new products. Development costs of GBP0.5m (H1 2021: GBP0.5m) have been capitalised. Other research and development costs, all of which have been written off to the income statement as incurred totalled GBP0.7m (H1 2021: GBP0.8m).
Foreign currency exposure
The Group faces currency exposure on its foreign currency transactions and translation exposure in relation to its overseas subsidiaries. The Group maintains a natural hedge to transactional exposure by matching the cash inflows and outflows in the respective currencies wherever possible.
Foreign exchange translation has provided a tailwind for revenue and profit during the period, with the US dollar strengthening against pound sterling compared with the comparative period. The Group held a significant cash balance in US dollars at 31 December 2021, which has subsequently been exchanged to pound sterling at favourable exchange rates during the current period.
The Group's most material exposures are to US dollars, Australian dollars and New Zealand dollars. The sensitivity to a 10% weakening/strengthening of pound sterling against these currencies in aggregate (excluding amounts held on the balance sheet) equates to an annualised profit increase/decrease of circa GBP2.4m. The Group's forward exposure is currently unhedged.
Summary and outlook
The Group has delivered a strong financial and operational performance in the first half of the year. Based on current MRR, the Board expects the Group to deliver a full-year revenue of at least GBP48 million with an adjusted EBITDA margin of in excess of 58%, which is ahead of current market expectations(1) .
Our long-term customer relationships and focus on high levels of customer service, allows the Board to remain confident in the longer-term prospects for growth.
(1) Latest company compiled view of market expectations show adjusted EBITDA of GBP25.0 to GBP26.6 million (stated before share-based payments).
Sara Murray OBE Daren Morris Chief Executive Officer Chief Financial Officer 15 September 2022 15 September 2022
Unaudited condensed consolidated statement of comprehensive income
for the six months ended 30 June 2022
Unaudited Unaudited Year ended six months six months 31 December ended 30 ended 30 2021 June 2022 June 2021 GBP'000 GBP'000 GBP'000 Note Revenue 2 22,862 18,034 37,628 Cost of sales (6,530) (5,184) (10,971) ------------ ------------ ------------- Gross profit 16,332 12,850 26,657 Administrative expenses (7,494) (4,864) (12,884) Other operating income 1 - 1 ------------ ------------ ------------- Operating profit 8,839 7,986 13,774 Analysed as: ------------------------------------ ----- ------------ ------------ ------------- Adjusted EBITDA 13,742 10,222 20,567 Amortisation of acquired intangibles (234) (234) (468) Amortisation of development costs (404) (352) (703) Depreciation (1,241) (973) (1,931) IPO preparation costs - (578) (1,192) National insurance on warrant exercise - - (1,076) Share-based payments charge (3,024) (99) (1,423) ------------------------------------ ----- ------------ ------------ ------------- Operating profit 8,839 7,986 13,774 Finance income 39 - - Finance expenses (17) (21) (47) Share of (loss)/profit of joint venture (2) (2) (5) ------------ ------------ ------------- Profit before taxation 8,859 7,963 13,722 Taxation 4 244 (1,076) (934) ------------ ------------ ------------- Profit for the period 9,103 6,887 12,788 ------------ ------------ ------------- Other comprehensive income: Exchange differences on translation of foreign operations 264 42 27 ------------ ------------ ------------- Total comprehensive income for the period 9,367 6,929 12,815 ============ ============ ============= Profit for the period attributable to: Owners of the company 9,103 6,853 12,788
Non-controlling interest - 34 - ------------ ------------ ------------- 9,103 6,887 12,788 ============ ============ ============= Total comprehensive income for the period attributable to: Owners of the company 9,367 6,895 12,815 Non-controlling interest - 34 - ------------ ------------ ------------- 9,367 6,929 12,815 ============ ============ ============= Basic earnings per share (pence) 5 3.1p 2.5p 4.5p Diluted earnings per share (pence) 5 3.0p 2.4p 4.4p
Unaudited condensed consolidated statement of financial position
as at 30 June 2022
Unaudited Unaudited 31 December 30 June 30 June 2021 2022 2021 GBP'000 GBP'000 GBP'000 Note Assets Goodwill 13,359 13,359 13,359 Acquired and other intangible assets 6,039 6,229 6,142 Property, plant and equipment 3,026 1,928 2,265 Right-of-use assets 314 443 345 Interests in joint ventures - 389 363 Deferred tax assets 2,079 790 1,039 Other receivables 1,702 1,629 1,612 ---------- ---------- ------------ Non-current assets 26,519 24,767 25,125 Inventories 5,862 2,324 3,079 Trade and other receivables 8,007 5,161 6,620 Cash and cash equivalents 6 57,170 24,233 48,317 ---------- ---------- ------------ Current assets 71,039 31,718 58,016 Total assets 97,558 56,485 83,141 ========== ========== ============ Liabilities Lease liabilities 205 197 195 Trade and other payables 8,812 5,463 6,875 ---------- ---------- ------------ Current liabilities 9,017 5,660 7,070 Lease liabilities 108 244 154 Deferred tax liabilities 498 - 501 Trade and other payables 879 1,635 1,185 ---------- ---------- ------------ Non-current liabilities 1,485 1,879 1,840 Total liabilities 10,502 7,539 8,910 ========== ========== ============ Net assets 87,056 48,946 74,231 ========== ========== ============ Equity Share capital 7 2,902 2,742 2,885 Share premium 38,969 19,052 38,535 Other reserves 539 70 275 Retained earnings 44,646 26,742 32,536 ---------- ---------- ------------ Equity attributable to owners of the company 87,056 48,606 74,231 Non-controlling interest - 340 - ---------- ---------- ------------ Total equity 87,056 48,946 74,231 ========== ========== ============
Unaudited condensed consolidated statement of changes in equity
for the six months ended 30 June 2022
Share Share Other Retained Total Non-controlling Total capital premium reserves earnings owners' interest equity equity GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Balance at 1 January 2021 27 21,767 28 18,335 40,157 306 40,463 Profit for the year - - - 12,788 12,788 - 12,788 Other comprehensive income for the year - - 27 - 27 - 27 ------------ ------------ ------------ ----------- ------------ ---------------- ------------ Total comprehensive income for the year - - 27 12,788 12,815 - 12,815 Share-based payments - - - 1,413 1,413 - 1,413 Transactions with non-controlling interests - - 220 - 220 (306) (86) Issue of shares, net of share issue costs 143 19,483 - - 19,626 - 19,626 Bonus issue of shares 2,715 (2,715) - - - - - ------------ ------------ ------------ ----------- ------------ ---------------- ------------ Balance at 31 December 2021 2,885 38,535 275 32,536 74,231 - 74,231 ============ ============ ============ =========== ============ ================ ============ Balance at 1 January 2021 27 21,767 28 18,335 40,157 306 40,463 Profit for the period - - - 6,853 6,853 34 6,887 Other comprehensive income for the period - - 42 - 42 - 42 ------------ ------------ ------------ ----------- ------------ ---------------- ------------ Total comprehensive income for the period - - 42 6,853 6,895 34 6,929 Share-based payments - - - 99 99 - 99 Tax on share-based payments - - - 1,455 1,455 - 1,455 Bonus issue of shares 2,715 (2,715) - - - - - ------------ ------------ ------------ ----------- ------------ ---------------- ------------ Balance at 30 June 2021 2,742 19,052 70 26,742 48,606 340 48,946 ============ ============ ============ =========== ============ ================ ============ Balance at 1 January 2022 2,885 38,535 275 32,536 74,231 - 74,231 Profit for the period - - - 9,103 9,103 - 9,103 Other comprehensive income for the period - - 264 - 264 - 264 -------- --------- ------ --------- --------- ---- --------- Total comprehensive income for the period - - 264 9,103 9,367 - 9,367 Share-based payments - - - 3,007 3,007 - 3,007 Issue of shares, net of share issue costs 17 434 - - 451 - 451 -------- --------- ------ --------- --------- ---- --------- Balance at 30 June 2022 2,902 38,969 539 44,646 87,056 - 87,056 ======== ========= ====== ========= ========= ==== =========
Unaudited condensed consolidated statement of cash flows
for the six months ended 30 June 2022
Unaudited Unaudited Year six months six months ended 31 ended 30 ended 30 December June 2022 June 2021 2021 GBP'000 GBP'000 GBP'000 Note Cash flows from operating activities Profit before tax 8,859 7,963 13,722 Adjustments for: Depreciation of property, plant and equipment 1,142 838 1,698 Depreciation of right-of-use assets 99 135 233 Amortisation of intangible assets 638 586 1,171 Share of loss/(profit) of joint venture 2 2 5 Investment write-down 426 - - Share-based payments charge 8 3,007 99 1,413 Finance income (39) - - Finance costs 5 9 15 Interest expense 12 12 32 Changes in: Inventories (2,783) (103) (859) Trade and other receivables (1,444) (835) (2,867) Trade and other payables 1,367 (188) 1,401 ------------ ------------ ---------- Cash generated from operating activities 11,291 8,518 15,964 Taxes paid (409) (932) (1,926) ------------ ------------ ---------- Net cash flows from operating activities 10,882 7,586 14,038 ============ ============ ========== Cash flows from investing activities Purchase of property, plant and equipment (35) (36) (135) Own work capitalised (1,867) (705) (1,833) Capitalised development costs (535) (472) (969) Finance income 39 - - Dividends from joint ventures and associates - 64 64 ------------ ------------ ---------- Net cash used in investing activities (2,398) (1,149) (2,873) ============ ============ ========== Cash flows from financing activities Proceeds from issues of shares 7 362 - 19,626 Transactions with non-controlling interests - - (86) Repayment of lease liabilities (109) (141) (239) Interest paid (12) (12) (32) ------------ ------------ ---------- Cash flows from financing activities 241 (153) 19,269 ============ ============ ========== Net increase in cash and cash equivalents 8,725 6,284 30,434 Cash and cash equivalents at the beginning of the period 48,317 17,999 17,999 Effects of exchange rate changes on cash and cash equivalents 128 (50) (116) ------------ ------------ ---------- Cash and cash equivalents at the end of the period 6 57,170 24,233 48,317 ============ ============ ==========
Notes to the unaudited condensed interim consolidated financial statements
For the six months ended 30 June 2022
1. General information and basis of preparation
Big Technologies PLC is a public limited company incorporated in the United Kingdom, listed on the Alternative Investment Market ('AIM') of the London Stock Exchange. The Company is domiciled in the United Kingdom and its registered office is Talbot House, 17 Church Street, Rickmansworth, Hertfordshire, WD3 1DE. The unaudited interim consolidated financial statements comprise the Company and its subsidiaries (together referred to as the 'Group').
The principal activity of the Group is the development and delivery of remote monitoring technologies and services to a range of domestic and international customers.
The Directors confirm that, to the best of their knowledge, the interim financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the United Kingdom and the AIM Rules for Companies, and that the interim report includes a fair review of the information required.
The condensed interim financial statements should be read in conjunction with the Group's latest annual consolidated financial statements, for the year ended 31 December 2021.
These interim financial statements do not include all of the information required for a complete set of financial statements prepared in accordance with IFRS Standards. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual consolidated financial statements.
The financial information provided for the six-month period ended 30 June 2022 is unaudited, however, the same accounting policies, presentation and methods of computation have been followed in these interim financial statements as those which were applied in the preparation of the Group's annual consolidated financial statements for the year ended 31 December 2021.
These interim financial statements do not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the most recent statutory accounts for the year ended 31 December 2021 has been delivered to the Registrar of Companies. The auditor's report on these accounts was unqualified and did not contain a statement under section 498 of the Companies Act 2006.
These interim financial statements were authorised for issue by the Company's board of directors on 13 September 2022.
1.1 Going concern
The Directors have, at the time of approving these interim financial statements, a reasonable expectation that the Company and the Group have adequate resources to continue in operation for the foreseeable future. The Group's forecasts and projections, taking into account reasonable possible changes in trading performance, show that the Group has sufficient financial resources, together with assets that are expected to generate cash flow in the normal course of business. Accordingly, the Directors have adopted the going concern basis in preparing these interim financial statements.
2. Segment reporting
The Group derives revenue from the delivery of remote monitoring technologies and services to a range of domestic and international customers. The income streams are all derived from the utilisation of these products which, in all aspects except details of revenue, are reviewed and managed together within the Group and as such are considered to be the only segment. The Group operates across three regions: Europe, Asia Pacific and The Americas, and the Board of Directors monitors revenue on this basis.
Revenue for each of the geographical areas is as follows:
H1 2022 H1 2021 FY 2021 GBP'000 GBP'000 GBP'000 Europe 2,476 2,379 4,988 Asia-Pacific 12,847 8,924 18,230 Americas 7,539 6,731 14,410 --------- --------- --------- 22,862 18,034 37,628 ========= ========= =========
Assets and liabilities by segment are not regularly reviewed by the Board of Directors on a monthly basis and, therefore, are not used as a key decision-making tool and are not disclosed here.
Revenues are disaggregated as follows:
H1 2022 H1 2021 FY 2021 GBP'000 GBP'000 GBP'000 Sales of goods 45 83 165 Delivery of services 22,817 17,951 37,463 --------- --------- --------- 22,862 18,034 37,628 ========= ========= =========
The nature of the Group's operations mean that recorded financial performance is not seasonal or cyclical in nature. The majority of revenues are derived from delivery of services to customers over time under long-term contracts.
3. Alternative performance measures
These items are included in normal operating costs of the business, but are significant cash and non-cash expenses that are separately disclosed because of their size, nature or incidence. It is the Group's view that excluding them from operating profit gives a better representation of the underlying performance of the business in the period.
H1 2022 H1 2021 FY 2021 GBP'000 GBP'000 GBP'000 Amortisation of acquired intangibles 234 234 468 IPO preparation costs - 578 1,192 National insurance on warrant exercise - - 1,076 ---------- --------- ---------- Total adjusting operating items 234 812 2,736 Share-based payments expense 3,024 99 1,423 ---------- --------- ---------- Total adjusting items and share-based payments before tax 3,258 911 4,159 ---------- --------- ---------- Tax effect of adjusting items and share-based payments (1,040) - (1,050) ---------- --------- ---------- Total adjusting items and share-based payments after tax 2,218 911 3,109 ========== ========= ==========
Share-based payments expense
These costs are excluded from the adjusted results of the Group since the costs are non-cash charges arising from recognition of the fair value of share options and other share-based incentives granted to employees of the Group. As such, they are not considered reflective of the core trading performance of the Group.
Amortisation of acquired intangibles
These costs are excluded from the adjusted results of the Group since the costs are non-cash charges arising from investment activities. As such, they are not considered reflective of the core trading performance of the Group.
IPO preparation costs (comparative periods only)
Attributable costs relating to the IPO performed during 2021 have been recognised within the consolidated statement of comprehensive income as an exceptional cost. These costs are excluded from the adjusted results of the Group since the costs are one-off in nature and will not repeat in future years.
National insurance on warrant exercise (comparative periods only)
Warrants were exercised in respect of 5,858,500 shares by the Chief Executive Officer immediately prior to the IPO in 2021. The acquisition of shares under the warrant were deemed to be within the Employment Related Securities rules and, therefore, a charge has been recognised in respect of Employer's national insurance. This cost is excluded from the adjusted results of the Group since the cost is one-off in nature and will not repeat in future years.
4. Taxation
Current tax is charged at 9.0% for the period (H1 2021: 13.1%) representing the best estimate of the average annual effective current tax rate expected to apply for the full year, applied to the pre-tax income of the current period.
The effective current tax rate is lower than the current UK corporation tax rate due to allowances claimed for research and development, patent box and the deductibility of exercised employee share awards, offset by overseas tax at higher rates than in the UK.
Deferred tax recognised in the period relates to share options, acquired intangible assets and fixed asset timing differences.
H1 2022 H1 2021 FY 2021 GBP'000 GBP'000 GBP'000 Current tax For the financial period 796 1,047 1,457 Adjustments in respect of prior periods - - 648 --------- --------- --------- 796 1,047 2,105 Deferred tax Origination and reversal of temporary timing differences (44) 128 (127) Adjustments in respect of prior periods - - (83) Related to share-based payments (996) (99) (961) --------- --------- --------- (1,040) 29 (1,171) Total taxation (244) 1,076 934 ========= ========= ========= 5. Earnings per share
The calculation of the basic and diluted earnings per share is based on the following data:
H1 2022 H1 2021 FY 2021 GBP'000 GBP'000 GBP'000 Profit for the purpose of basic and diluted earnings per share being net profit attributable to equity holders of the parent 9,103 6,853 12,788 Adjustments for: Adjusting items 234 812 2,736 Share-based payments expense 3,024 99 1,423 Tax effect of adjusting items and share-based payments (1,040) - (1,050) Adjusted earnings 11,321 7,764 15,897 ========= ========= ========= H1 2022 H1 2021 FY 2021 No. shares No. shares No. shares Weighted average number of Ordinary shares for the purpose of basic earnings per share 289,600,756 274,202,600 282,853,610 Effect of dilutive potential Ordinary shares/share options 15,963,014 6,667,285 6,373,277 Weighted average number of Ordinary shares for the purpose of diluted earnings per share 305,563,770 280,869,885 289,226,887 ============ ============ ============ H1 2022 H1 2021 FY 2021 Basic earnings per share Pence Pence Pence Basic earnings per share 3.1 2.5 4.5 Adjustments for: Adjusting items 0.1 0.3 1.0 Share-based payments expense 1.1 - 0.5 Tax effect of adjusting items and share-based payments (0.4) - (0.4) -------- -------- -------- Adjusted basic earnings per share 3.9 2.8 5.6 ======== ======== ======== H1 2022 H1 2021 FY 2021 Diluted earnings per share Pence Pence Pence Diluted earnings per share 3.0 2.4 4.4 Adjustments for: Adjusting items 0.1 0.4 1.0 Share-based payments expense 1.0 - 0.5 Tax effect of adjusting items and share-based payments (0.4) - (0.4) -------- -------- -------- Adjusted diluted earnings per share 3.7 2.8 5.5 ======== ======== ========
The adjusted earnings per share has been calculated on the basis of profit before adjusting items and share-based payments, net of tax. The Directors consider that this calculation gives a better understanding of the Group's earnings per share in the current and prior periods.
6. Cash and cash equivalents
The carrying amounts of the cash and cash equivalents are denominated in the following currencies:
H1 2022 H1 2021 FY 2021 GBP'000 GBP'000 GBP'000 Pound sterling 47,688 10,917 30,587 US dollar 2,557 8,097 11,186 Australian dollar 2,995 3,958 3,942 New Zealand dollar 2,447 - 27 Colombian peso 1,077 736 1,280 Euro 158 201 579 Canadian dollar 167 324 635 Other 81 - 81 --------- --------- --------- 57,170 24,233 48,317 ========= ========= =========
Net cash
Net cash comprises cash and cash equivalents and lease liabilities.
H1 2022 H1 2021 FY 2021 GBP'000 GBP'000 GBP'000 Cash and cash equivalents 57,170 24,233 48,317 Lease liabilities (313) (441) (349) --------- --------- --------- 56,857 23,792 47,968 ========= ========= ========= 7. Share capital
The allotted, called up and fully paid share capital is made up of 290,158,082 ordinary shares of GBP0.01 each. During the period the Group issued 1,653,000 shares, generating cash proceeds of GBP0.4m to satisfy the exercise of options by employees under EMI and non-EMI share option plans.
8. Share-based payments
The Group has a number of equity-settled share-based payment arrangements in operation, the details of which are disclosed in note 23 on pages 79-81 of the 2021 Annual Report. The schemes were established to reward and incentivise the senior management team and employees to deliver share price growth.
The charge made in respect of share-based payments is as follows:
H1 2022 H1 2021 FY 2021 GBP'000 GBP'000 GBP'000 EMI Plan - - 181 Non-EMI Plan (Chair) 56 99 200 LTIP 67 - 37 Growth Share Plan 2,884 - 995 --------- --------- --------- Share-based payments charge (IFRS 2) 3,007 99 1,413 Employers' tax charge in relation to share awards 17 - 9 --------- --------- --------- Total charge in respect of share-based payments 3,024 99 1,422 ========= ========= ========= 9. Principal risks and uncertainties
The principal risks and uncertainties impacting the Group are described on pages 16-19 of the 2021 Annual Report and remain unchanged at 30 June 2022.
They include: reliance on key customers, failure to manage growth, change in government policy, failure to develop new products, competitor actions, reliance on third-party technology and communication systems, reputational risk, dependence on partners, loss of key personnel, supply chain, product liability, foreign exchange risk, credit risk, business taxation, bid pricing, cyber security/business interruption, intellectual property/patents and operating in global markets.
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September 15, 2022 02:00 ET (06:00 GMT)
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