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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Cloudcall Group Plc | LSE:CALL | London | Ordinary Share | GB00B4XS5145 | ORD 20P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 79.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMCALL
RNS Number : 0460O
Cloudcall Group PLC
30 September 2019
30 September 2019
CloudCall Group plc
("CloudCall" or the "Company")
Interim results announcement
Cloudcall announces its unaudited interim results for the six-month period ended 30 June 2019 (the "Period").
Key financial highlights:
-- H1 revenues up 30% to GBP5.2m (H1 2018: GBP4.0m) - with an annualised revenue run rate of GBP11m in June 2019
-- Recurring revenues up 34% compared to H1 2018* -- Operating loss narrows to GBP1.7m (H1 2018: GBP1.8m) -- Net cash absorbed by operating activities down 17% to GBP1.2m (H1 2018: GBP1.5m**)
-- Placing of GBP2.3m (net) completed in Jan 2019 for investment in product development and balance sheet strengthening
-- Available cash of GBP4.4m through a combination of own cash, R&D tax credit received since the end of the period and the new GBP3m debt facility with Shawbrook Bank which was completed in September 19
-- The Company has no outstanding debt at the period end***
Key operational highlights:
-- 36,936 users as at 30 June 2019 - up 37% (H1 2018: 27,000), with Q2 monthly net user growth exceeding the stated target of 1,000 per month
-- Average customer size - 30.5 users - up 21% (H1 2018: 25.2)
-- New orders received in H1 2019 up 44% vs H1 2018, including the company's first large enterprise deal signed in May
-- US revenues continue to grow strongly to 40% of global recurring revenue
-- Integration with Access Group's Profile CRM announced in June 2019 - joint marketing activity is now generating leads
-- Enhanced SMS / IM functionality incorporating broadcast, scheduled and template messaging now released for Bullhorn, Salesforce and Microsoft Dynamics
-- Positive trading during the period continues into H2, with performance since the end of the period in line with management expectations
* Recurring revenue is that related to contracted subscription-based products. Repeating revenue is related to pay-as-you-go telephony revenue which, whilst not directly contracted, has a high degree of visibility and predictability
** Restated for IFRS 16 - Leases - see Note 1
*** The Borrowing figures showing on the Statement of Financial Position relate in full to the revised presentation required by IFRS 16 - Leases
For further information, please contact:
CloudCall Group plc Tel: +44 (0)20 3587 Simon Cleaver, Chief Executive Officer 7188 Paul Williams, Chief Financial Officer Canaccord Genuity Limited Tel: +44 (0)20 7523 Simon Bridges 8000 Richard Andrews
The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
About CloudCall Group Plc
CloudCall is a software and unified communications business that has developed and provides a suite of cloud-based software and communications products and services. CloudCall's products and services are aimed at enabling organisations to leverage their customer data to enable more effective communications.
The CloudCall suite of software products allows companies to fully integrate telephony and messaging capability into their existing CRM software, enabling communications to be made, recorded, logged and categorised from within the customer relationship management (CRM) system with detailed activity reporting and powerful business intelligence capable of being easily generated.
At the end of June 2019, the Company had approximately 150 staff based predominantly in Leicester and London (UK), Boston (US) and Minsk (BY), with just under 37,000 end-users relying on CloudCall technology to power their daily communications.
Operational Review
Strategic Update
I am pleased to report another period of strong revenue growth for CloudCall, which, as the table below shows, is being driven by an acceleration in average net new users per month to over 1,000 for Q2 2019. This trend is the result of previous investments in product development, sales and marketing starting to generate results, and is a trend that is expected to continue.
Revenues for the six-month period were approximately GBP5.2 million, an increase of 30% against H1 2018, and recurring revenues are up by 34% compared to the same period. Churn remains low and factoring in upsells, net renewal rates from existing customers remain above 100%, helping to drive revenue and user growth.
Whilst it is obviously pleasing to report sales and user numbers that are growing strongly, and that we tracked above our target of 1,000+ net new users per month in Q2, for me, the highlight of the half has been the quantum change in larger customers that are actively considering adopting CloudCall's services. A number of these are very large, which if won, would have a significant impact on the Company's performance.
During the period, US operations grew strongly and, whilst the increase in interest from larger customers is notable on both sides of the Atlantic, it is particularly prevalent in the US. Overall, the US now generates approximately 40% of our global recurring revenues and we are also pleased to be able to report that US operations have been profitable and generating cash for a number of months.
Net new user growth
Over the full 6-month period, monthly net user growth averaged 932, taking the total number of users to just under 37,000, an increase of 37% against H1 2018. A full breakdown of our average monthly net user growth since these investments were made can be seen below.
Hot Features
Premium
Total users 2018 2018 2018 2019 2019
H1 Q3 Q4 Q1 Q2*
Monthly average net user growth 580 673 775 837 1,027
Total users at end of period 27,000 29,018 31,343 33,855 36,936
*The Q2 2019 total users and monthly net new user growth figures
are adjusted downwards due to the staggered rollout of the below
enterprise deal's 1,850 users.
Bullhorn
CloudCall's partnership with Bullhorn and its customers continues to strengthen. Particularly notable in the period was the marked increase in their larger customers actively expressing an interest in using CloudCall's service. The resulting sales pipeline for these larger deals, categorised as 500 to 1,000, and 1,000+ users, is significantly stronger than it has been before, and whilst sales cycles are lengthier, the Company remains confident that a number of these will become CloudCall customers before the year end.
In June, the Company announced that it had won the first of these larger customers, with a contract worth a minimum of GBP1.1m over three years, that sees CloudCall's service rolled out to 1,850 users. Following a recent acquisition by this customer, discussions have already started to extend this by a further 500+ users. This was a particularly important win as it provides a reference point and comfort in CloudCall's abilities to the large prospects in our pipeline and Bullhorn's larger customers in general.
Other activities:
Additional CRMs
Demand from recruitment and staffing CRMs keen to integrate with CloudCall continues to grow and the Company is actively working with a number of these to complete the integrations and begin joint marketing activities before the year end.
In June, the Company announced the first of these new integrations with The Access Group's 'Profile' recruitment CRM, used by 15,000 users across 500 companies. We are pleased to note, that since the partnership was announced, we have already begun receiving sales leads. Furthermore, discussions have started with the Access Group about integrating CloudCall with some of their other CRMs and systems.
Much of the technical work which was necessary for this first integration will enable faster future integrations. The Company therefore expects to accelerate the rate of CRM integrations, with further announcements expected in the second half of the year.
SMS and Messaging upgrades to the existing customer base
SMS and messaging services are being adopted by both existing and new users faster in the US than in the UK. In the US, over 17% of customers have already upgraded and are using the service, driving strong growth in the number of SMS messages per month, which has tripled since the start of 2019.
The uptake of these new chargeable features in the US has helped the US deliver strong growth and profits for a number of consecutive months and is also helping to offset a reduction in recurring revenue per user from the larger deals being done there.
UK SMS sales have been lower than expected, however, and work continues to prioritise the development of integrations with the social media messaging platforms that the UK customers prefer.
We are seeing that increased recurring revenue per user (RRPU) from SMS services is working to counterbalance the downward pressure we experience with larger deals. Overall, recurring revenue per user (RRPU) has reduced by 4% to GBP27.40 compared to the 2018 year-end figure, the majority of which can be attributed to the 1,850-user enterprise deal announced in June 2019, with 800 of these users taking a lower cost VoiP only product.
Microsoft Dynamics and Referral Partnerships
Microsoft distributes its Dynamics 365 CRM through a network of reseller partners who sell, install, customise and maintain the CRM for their customers. These resellers are CloudCall's route to market for its integrated Microsoft Dynamics unified communications products.
It is encouraging to note, that when approaching these resellers, we have received considerable interest in the CloudCall service. Since the beginning of the year, the newly formed UK partnerships team has signed 15 referral partners. Most of this initial tranche of resellers are now onboarded, trained and delivering leads. The UK team are currently in discussions with a further batch of resellers, which we expect to onboard later this year.
Now that this initial tranche of referral partners is in place and delivering leads, and in combination with the August 2019 launch of the new version of CloudCall for Dynamics 365, which includes Broadcast SMS, we are confident that our Microsoft products will start delivering growth in the second half of the year.
The latest release of CloudCall's new Unified Communications for Microsoft Dynamics product has been a little longer in development than was first anticipated. This was due to a fundamental change in Microsoft's own user interface necessitating some redesign of our product. However, it is pleasing to note that CloudCall's new unified architecture enabled these significant changes to be included without too much delay, and the new full-spec unified communications product for Dynamics is now live.
Cash
During its Capital Markets Day in January 2019, the Company indicated it was reviewing its debt facilities.
The new GBP3m Shawbrook facility has replaced the Company's GBP1.85m facility with Barclays since the period end.
Outlook
Even with the lag in revenue from larger enterprise customers, the board expects the Company to deliver full year revenue growth of over 30 per cent for 2019 and to report revenues in the region of GBP11.7 million. With an increasing recurring revenue run-rate this year, the Company has a high degree of confidence that it is on-track to meet its future goals.
Whilst costs will continue to be tightly controlled, they will be constantly reviewed to ensure the Company has adequate resources in place for onboarding and servicing large enterprise clients.
Simon Cleaver
Chief Executive Officer
Financial Overview
Revenues grew by 30% from GBP4.0m to GBP5.2m in 1H 2019. Recurring revenues from subscription-based services grew 34% in H1 2019 compared to the same period last year. During the period US operations grew strongly and now generate nearly 40% of global revenue.
SMS and instant messaging services are being adopted by both existing and new users faster in the US than in the UK. In the US over 17% of customers have already upgraded and are using the service, driving strong growth in the number of SMS messages per month, which has tripled since the start of 2019, and which is expected to continue growing strongly.
Increased recurring revenue per user from SMS services is working to offset the downward Recurring Revenue per User (RRPU) pressure we experience with larger customers. Overall, RRPU has reduced by 4% to GBP27.40 compared to the prior period, the majority of which can be attributed to the 1,850-user enterprise deal announced in June 2019, with 800 of these users taking lower cost VoIP only product.
Over the full 6-month period, monthly net user growth averaged 932, taking the total number of users to 36,936 an increase of 37% against H1 2018.
Gross margin reduced from 79.7% for the corresponding period in 2018 to 77.6% in H1 2019. Gross margin reduced slightly in H1 2019 mainly due to the slight reduction in RRPU discussed above. Furthermore, partner commissions have increased slightly as CloudCall's new partner incentive plans begin to generate increased lead-flow, and the ongoing competitive nature of hardware reselling means that hardware sales continue to be a low-margin non-core component of the overall revenue mix.
Operating costs grew from GBP4.6m in H1 2018 to GBP5.3m in H1 2019. Growth in operating costs of 16% compared to the same period last year is to be viewed in the context of increased investment in sales, marketing and product development, although it can be seen that costs have been reducing as a percentage of revenues between H1 2018 and H1 2019 as that investment begins to be offset by the resulting revenue growth.
Operating expenditure is shown in the financial statements net of the amount qualifying for re-classification to the balance sheet under IAS 38 (Capitalisation of Software Development Costs). In H1 2019 this amounted to GBP700k (H1 2018: GBP564k).
Losses from operating activities before depreciation, amortisation and share-based payments were (GBP1.24m), down 9% from (GBP1.37m) in H1 2018.
Development costs capitalised in H1 2019 GBP0.70m (H1 2018: GBP0.56m). Further to the adoption of IAS 38, the Group confirms that, as a result of new products coming into service since the adoption of the policy, IAS 38 related amortisation charged in H1 2019 was GBP95k (H1 2018: GBP73k).
The Company had no outstanding debt* as at 30 June 2019 and a net financing expense of GBP47k (H1 2018: GBP39k). The Company's GBP1.85m revolving credit facility with Barclays was closed on 9 September 2019 and replaced with a new GBP3.0m debt facility with Shawbrook Bank.
The new term-loan facility is for a 42-month term and is available to be drawn down in up to 3 tranches inside the first 12 months. Interest is charged at 9% plus the higher of either LIBOR or 0.5% per annum.
As at 30 June 2019 there were no funds drawn down from the Facility.
* Note - "Borrowings" of GBP1.56m showing as liabilities on the Statement of Financial Position are related to the new presentation requirements for IFRS 16 Leases (see Note 1).
The Group had GBP0.8m cash at the end of the period (H1 2019: GBP2.4m). The Group's balance sheet includes R&D tax credit receivable of GBP0.9m of which GBP0.6m was received into cash on 2 August 2019.
Total issued share capital at the period-end comprised 26,629,129 ordinary shares of 20 pence each. On the 30 January 2019 the company successfully raised new capital amounting to GBP2.4m (before fees and expenses) to allow the Group to strengthen the balance sheet and continue building its new product sales and marketing capabilities. The placing was fulfilled by the issue of 2,400,000 new 20p ordinary shares in the company at a price of 100p per share.
During the half year period, the Company received new capital amounting to GBP31k in relation to exercised share options, resulting in the issue of 48,067 ordinary shares.
Loss per share for the half year period was 5.9 pence (H1 2018: 6.8 pence)
The Directors confirm that, as disclosed in Note 2, they have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements.
By order of the board
Simon Cleaver Paul Williams Chief Executive Officer Chief Financial Officer
Consolidated Statement of Comprehensive Income
Unaudited Unaudited Audited
Six months Six months Year ended
ended 30 ended 30 31 December
June 2019 June 2018 2018
(restated) (restated)
GBP000 GBP000 GBP000
Revenue 5,245 4,043 8,751
Cost of sales (1,173) (821) (1,889)
------------ ------------ -------------
Gross profit 4,072 3,222 6,862
Operating costs (5,312) (4,592) (9,309)
------------ ------------ -------------
Loss from operating activities
before depreciation, amortisation
and share-based payment charges (1,240) (1,370) (2,447)
Depreciation and amortisation (366) (343) (813)
Share based payment charges (116) (115) (224)
------------ ------------ -------------
Operating loss (1,722) (1,828) (3,484)
Financing expense (112) (112) (229)
------------ ------------ -------------
Loss before tax (1,834) (1,940) (3,713)
Taxation 280 300 630
------------ ------------ -------------
Loss for the period attributable
to owners of the parent (1,554) (1,640) (3,083)
------------ ------------ -------------
Other comprehensive income
Exchange differences on translation
of foreign operations (5) (31) (50)
------------ ------------ -------------
Other comprehensive income (5) (31) (50)
------------ ------------ -------------
Total comprehensive income
for the period attributable
to owners of the parent (1,559) (1,671) (3,133)
------------ ------------ -------------
Loss per share (pence)
Basic & fully diluted loss
per share (5.9) (6.8) (12.8)
------------ ------------ -------------
Consolidated Statement of Financial Position
At 30 June 2019
Unaudited Unaudited Audited
Six months Six months Year ended
ended 30 ended 30
June 2019 June 2018 31 December
2018
(restated) (restated)
GBP000 GBP000 GBP000
Non-current assets
Property, plant and equipment 1,959 2,080 1,906
Goodwill 339 339 339
Other intangible assets 2,502 1,511 1,897
------------ ------------ -------------
4,800 3,930 4,142
Current assets
Inventories 5 7 -
Trade and other receivables 1,361 1,716 1,857
Research & development tax
credit receivable 921 880 640
Cash and cash equivalents 823 2,350 927
3,110 4,953 3,424
------------ ------------ -------------
Total assets 7,910 8,883 7,566
------------ ------------ -------------
Current liabilities
Borrowings (335) (299) (265_
Trade and other payables (1,119) (1,462) (1,600)
------------ ------------ -------------
(1,454) (1,761) (1,865)
Non-current liabilities
Borrowings (1,225) (1,384) (1,307)
Total liabilities (2,679) (3,145) (3,172)
------------ ------------ -------------
Net assets 5,231 5,738 4,394
------------ ------------ -------------
Equity attributable to shareholders
Share capital 5,326 4,829 4,836
Share premium 68,174 66,382 66,384
Translation reserve (32) (8) (27)
Warrant reserve 29 29 29
Retained earnings (68,266) (65,494) (66,828)
Total equity attributable
to shareholders 5,231 5,738 4,394
------------ ------------ -------------
Consolidated Statement of Changes in Equity
For the six months ended 30 June 2019
Share Share Translation Warrant Retained Total
capital premium reserve reserve earnings equity
account attributable
GBP000 GBP000 GBP000 GBP000 GBP000 to
shareholders
GBP000
Balance at 1 January
2018 (as previously
stated) 4,814 66,329 23 29 (63,939) 7,256
Restatement - IFRS
16 - - - - (30) (30)
--------- --------- ------------ --------- ---------- --------------
Balance at 1 January
2018 (as restated) 4,814 66,329 23 29 (63,969) 7,226
Loss for the period - - - - - (1,640) (1,640)
Other comprehensive
income
Exchange differences
on translation of foreign
operations - - (31) - - (31)
--------- --------- ------------ --------- ---------- --------------
Total comprehensive
income for the year - - (31) - (1,640) (1,671)
Transactions with owners
recognised in equity:
Equity settled share
based payments - - - - 115 115
Issue of equity shares 15 53 - - - 68
--------- --------- ------------ --------- ---------- --------------
Total transactions with
owners recognised in
equity 15 53 - - 115 183
Balance at 30 June 2018 4,829 66,382 (8) 29 (65,494) 5,738
--------- --------- ------------ --------- ---------- --------------
Balance at 1 July 2018
(as previously restated) 4,829 66,382 (8) 29 (65,408) 5,824
Restatement - IFRS
16 - - - - (86) (86)
--------- --------- ------------ --------- ---------- --------------
Balance at 1 July 2018
(as restated) 4,829 66,382 (8) 29 (65,494) 5,738
Loss for the period - - - - (1,443) (1,443)
Other comprehensive
income
Exchange differences
on translation of foreign
operations - - (19) - - (19)
--------- --------- ------------ --------- ---------- --------------
Total comprehensive
income for the year - - (19) - (1,443) (1,462)
Transactions with owners
recognised in equity:
Equity settled share
based payments - - - - 109 109
Issue of equity shares 7 16 - - - 23
Issue costs of equity
shares - (14) - - - (14)
--------- --------- ------------ --------- ---------- --------------
Total transactions with
owners recognised in
equity 7 2 - - 109 118
--------- --------- ------------ --------- ---------- --------------
Balance at 31 December
2018 4,836 66,384 (27) 29 (66,828) 4,394
--------- --------- ------------ --------- ---------- --------------
Balance at 1 January
2019 (as previously
restated) 4,836 66,384 (27) 29 (66,777) 4,445
Restatement - IFRS
16 - - - - (51) (51)
--------- --------- ------------ --------- ---------- --------------
Balance at 1 July 2019
(as restated) 4,836 66,384 (27) 29 (66,828) 4,394
Loss for the period - - - - (1,554) (1,554)
Other comprehensive
income
Exchange differences
on translation of foreign
operations - - (5) - - (5)
--------- --------- ------------ --------- ---------- --------------
Total comprehensive
income for the year - - (5) - (1,554) (1,559)
Transactions with owners
recognised in equity:
Equity settled share
based payments - - - - 116 116
Issue of equity shares 490 1,942 - - - 2,432
Issue costs of equity
shares - (152) - - - (152)
Total transactions with
owners recognised in
equity 490 1,790 - - 116 2,396
--------- --------- ------------ --------- ---------- --------------
Balance at 30 June 2019 5,326 68,174 (32) 29 (68,266) 5,231
--------- --------- ------------ --------- ---------- --------------
Consolidated Cash-flow Statement
Unaudited Unaudited Audited
Six months Six months Year ended
ended 30 ended 30 31 December
June 2019 June 2018 2018
GBP000 GBP000 GBP000
Cash flows from operating
activities
Loss before tax for the period (1,554) (1,640) (3,083)
Adjustments for:
Depreciation and amortisation 366 343 813
Foreign exchange losses on
operating activities (5) - (67)
Financial expenses 112 112 229
Equity settled share-based
payment expenses 116 115 224
Taxation (280) (300) (630)
Operating cashflow before
changes in working capital
and provisions (1,245) (1,370) (2,514)
Decrease/(increase) in trade
and other receivables 496 (259) (400)
(Increase)/decrease in inventory (5) - 7
(Decrease)/increase in trade
and other payables (482) 135 311
------------ ------------ -------------
Cash absorbed by operations (1,236) (1,494) (2,596)
Tax received - - 570
------------ ------------ -------------
Net cash absorbed by operating
activities (1,236) (1,494) (2,026)
Cash flows from investing
activities
Acquisition of property, plant
and equipment (203) (321) (450)
Development expenditure capitalised (700) (564) (1,118)
------------ ------------ -------------
Net cash absorbed by investing
activities (903) (885) (1,568)
Cash flows from financing
activities
Repayment of lease liability (198) (179) (357)
Net interest paid (47) (39) (88)
Proceeds from the issue of
share capital 2,280 68 77
Net cash from financing activities 2,035 (150) (368)
Net decrease in cash and cash
equivalents (104) (2,529) (3,962)
Cash and cash equivalents
at start of period 927 4,872 4,872
Effect of exchange rate fluctuations
on cash held - 7 17
------------ ------------ -------------
Cash and cash equivalents
at end of period 823 2,350 927
------------ ------------ -------------
1. Accounting policies and basis for preparation
The condensed consolidated interim financial information for the six months ended 30 June 2019 has been prepared in accordance with the presentation, recognition and measurement requirements of applicable International Financial Reporting Standards adopted by the European Union ('IFRS') except that the Group has not applied IAS 34, Interim Financial Reporting, which is not mandatory for UK Groups listed on AIM.
The financial information does not include all of the information required for full annual financial statements and should be read in conjunction with the financial statements of the Group for the year ended 31 December 2018 which are prepared in accordance with International Financial Reporting Standards and International Reporting Interpretations Committee pronouncements as adopted by the European Union.
Except as described below, the accounting policies applied in these condensed consolidated interim financial information for the six months ended 30 June 2019 are the same as those applied in the Group's consolidated financial statements as at and for the year ended 31 December 2018. The changes in accounting policies are also expected to be reflected in the Group's consolidated financial statements as at and for the year ending 31 December 2019.
The Group has adopted IFRS 16 Leases from 1 January 2019. The effect of applying this standard is noted below.
The Group's 2018 annual report provides full details of significant judgements and estimates used in the application of the Group's accounting policies. There have been no significant changes to these judgements and estimates during the period.
The financial information included in this document is unaudited and does not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. The comparative figures for the financial year ended 31 December 2018 are the Group's statutory accounts for that financial year as restated for the application of IFRS 16. Those accounts have been reported on by the company's auditor and delivered to the registrar of companies. The report of the auditor was (i) unqualified, (ii) did not include a reference to matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
IFRS 16 Leases
IFRS 16 Leases replaces IAS 17 'Leases' and for lessees eliminates the classifications of operating leases and finance leases. Subject to exceptions, a 'right-of-use' asset is capitalised in the statement of financial position, measured at the present value of the unavoidable future lease payments to be made over the lease term. The exceptions relate to short-term leases of 12 months or less and leases of low-value assets (such as personal computers and small office furniture) where an accounting policy choice exists whereby either a 'right-of-use' asset is recognised or lease payments are expensed to profit or loss as incurred. A liability corresponding to the capitalised lease is recognised, adjusted for lease prepayments, lease incentives received, initial direct costs incurred and an estimate of any future restoration, removal or dismantling costs. Straight-line operating lease expense recognition is replaced with a depreciation charge for the leased asset (included in operating costs) and an interest expense on the recognised lease liability (included in finance costs).
Under IFRS 16, the Group has recognised a right of use asset of GBP1,379k and a capitalised lease liability of GBP1,560k, and has released a lease incentive accrual of GBP124k which has reduced net assets by GBP57k. The group has recognised interest on the finance lease liability of GBP65k, reversed lease costs of GBP225k and recognised depreciation on the right of use asset of GBP166k, with the net impact on the income statement for the six months ended 30 June 2019 being an increase in the loss of GBP6k. The following table summarises the impacts of adopting IFRS 16 on the Group's interim statement of financial position as at 30 June 2019 and statement of comprehensive income for the six months ended 30 June 2019.
Impact on the consolidated statement of financial position as at 30 June 2019
Amounts without
adoption
of IFRS 16
As reported Adjustments GBP000
GBP000 GBP000
Non current assets
Property, plant and equipment 1,959 (1,379) 580
-------------- -------------- ----------------
Current liabilities
Borrowings (335) 335 -
Trade and other payables (1,119) (124) (1,243)
-------------- -------------- ----------------
Non-current liabilities
Borrowings (1,225) 1,225 -
Equity attributable to shareholders
Retained earnings (68,266) 57 (68,209)
-------------- -------------- ----------------
Impact on the interim consolidated statement of comprehensive income
Amounts without
adoption
of IFRS 16
As reported Adjustments GBP000
GBP000 GBP000
Operating costs (5,312) (225) (5,537)
Depreciation and amortisation (366) 166 (200)
Finance expenses (112) 65 (47)
-------------- -------------- ----------------
Reconciliation of equity
1 January 30 June 31 December
2018 2018 2018
GBP000 GBP000 GBP000
Equity as previously reported 7,256 5,824 4,445
IFRS 16 adjustments (30) (86) (51)
---------- -------- ------------
Equity as reported 7,226 5,738 4,394
---------- -------- ------------
Reconciliation of loss for the financial period
Six months Year ended
ended 30 31 December
June 2018 2018
GBP000 GBP000
Loss for the period as previously
reported (1,584) (3,062)
IFRS 16 adjustment (56) (107)
----------- -------------
Loss for the period as reported (1,640) (3,169)
----------- -------------
2. Going concern
The Group made a loss of GBP1,554k in the six months ended 30 June 2019. As at 30 June 2019 the Group had cash reserves of GBP823k. During the period, the Group has seen a significant cash injection from a successful share placing of GBP2.3m after issue costs.
The Directors have prepared detailed cashflow projections covering the period up to December 2020. Such forward looking projections are inevitably subjective and sensitive to changes in the underlying assumptions and the Directors have sensitised these projections accordingly, in particular to factor in a delay in the growth of revenue. These projections, as sensitised, indicate that, based on the assumptions underlying the projections, sufficient resources will be available to settle liabilities as they fall due for a period of at least 12 months from the date of approving these accounts.
The Directors remain confident in their assertion that the current trajectory of the Group's sales income, combined with expense restraint, existing cash at bank, and other expected cash inflows, is enough to deliver the Group to cash break-even without the need to raise further funds. However, the Group can also utilise a GBP3.0m revolving credit facility with Shawbrook Bank until March 2023 which is currently unutilised. This, together with a successful track record in raising new capital, are key factors in providing further comfort that the Group will have sufficient access to the funding it needs to execute its strategy and meet its financial commitments.
For these reasons, the Directors have adopted the going concern basis in preparing these interim financial statements.
3. Taxation
Recognised in the Consolidated Statement of Comprehensive Income
Unaudited Unaudited Audited
Six months Six months Year ended
ended 30 ended 30 31 December
June 2019 June 2018 2018
GBP000 GBP000 GBP000
Current income tax
Overseas income tax charge
for the current year - - (8)
Current year research and
development tax credit 299 300 640
Adjustments in respect of
prior periods (19) - (2)
------------ ------------ -------------
Total tax credit recognised
in the current period 280 300 630
------------ ------------ -------------
4. Intangible assets
Goodwill Patents Acquired Software Total
& trademarks IPR development
costs
GBP000 GBP000 GBP000 GBP000 GBP000
Cost
Balance at 1 January
2018 339 12 1,448 180 2,889
Internally developed - - - 328 564
--------------- -------------- --------- ------------- --------
Balance at 30 June
2018 339 12 1,448 508 3,453
Internally developed - - - 564 554
--------------- -------------- --------- ------------- --------
Balance at 31 December
2018 339 12 1,448 1,090 4,007
Internally developed - - - 564 700
--------------- -------------- --------- ------------- --------
Balance as at 30 June
2019 339 12 1,448 1,654 4,707
--------------- -------------- --------- ------------- --------
Amortisation
Balance at 1 January
2018 - (12) (1,448) (70) (1,530)
Amortisation for the
period - - - (73) (73)
--------------- -------------- --------- ------------- --------
Balance as at 30 June
2018 - (12) (1,448) (143) (1,603)
Amortisation for the
period - - - (168) (168)
--------------- -------------- --------- ------------- --------
Balance at 31 December
2018 - (12) (1,448) (311) (1,771)
Amortisation for the
period - - - (95) (95)
--------------- -------------- --------- ------------- --------
Balance as at 30 June
2019 - (12) (1,448) (406) (1,866)
--------------- -------------- --------- ------------- --------
Net Book Value
At 30 June 2018 339 - - 1,511 1,850
--------------- -------------- --------- ------------- --------
At 31 December 2018 339 - - 1,897 2,236
--------------- -------------- --------- ------------- --------
At 30 June 2019 339 - - 2,502 2,841
--------------- -------------- --------- ------------- --------
5. Property, plant and equipment
Technical Office Right of Total
plant and and business use asset
equipment GBP000 GBP000
GBP000 GBP000
Cost
Balance at 1 January 2018 773 469 1,896 3,138
Additions 144 177 - 321
----------- -------------- ----------- --------
Balance at 30 June 2018 917 646 1,896 3,459
Additions 113 16 - 129
Disposals (10) - - (10)
----------- -------------- ----------- --------
Balance at 31 December 2018 1,020 662 1,896 3,578
Exchange adjustments - - (4) (4)
Additions 95 108 125 328
----------- -------------- ----------- --------
Balance as at 30 June 2019 1,115 770 2,017 3,902
----------- -------------- ----------- --------
Depreciation
Balance at 1 January 2018 (618) (343) (148) (1,109)
Depreciation for the period (50) (58) (162) (270)
----------- -------------- ----------- --------
Balance as at 30 June 2018 (668) (401) (310) (1,379)
Depreciation for the period (104) (37) (162) (303)
Eliminated in respect of disposals 10 - - 10
----------- -------------- ----------- --------
Balance at 31 December 2018 (762) (438) (472) (1,672)
Depreciation for the period (39) (66) (166) (271)
----------- -------------- ----------- --------
Balance as at 30 June 2019 (801) (504) (638) (1,943)
----------- -------------- ----------- --------
Net Book Value
At 30 June 2018 249 245 1,586 2,080
----------- -------------- ----------- --------
At 31 December 2018 258 224 1,424 1,906
----------- -------------- ----------- --------
At 30 June 2019 314 266 1,379 1,959
----------- -------------- ----------- --------
6. Loss per share
Unaudited Unaudited Audited
Six months Six months Year ended
ended 30 ended 30 31 December
June 2019 June 2018 2018
(restated) (restated)
000's 000's 000's
Issued ordinary shares at
start of period 24,181 24,080 24,069
Shares issued for cash 1,951 24 62
------------ ------------ -------------
Weighted average number of
ordinary shares 26,132 24,104 24,131
------------ ------------ -------------
GBP000 GBP000 GBP000
Loss attributable to ordinary
shareholders (1,554) (1,640) (3,084)
------------ ------------ -------------
Pence Pence Pence
Loss per share
Basic and fully diluted loss
per share (5.9) (6.8) (12.8)
------------ ------------ -------------
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
IR KMGZLNLNGLZM
(END) Dow Jones Newswires
September 30, 2019 02:02 ET (06:02 GMT)
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