We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register to chat with like-minded investors on our interactive forums.
| 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 : 2094I
Cloudcall Group PLC
20 March 2018
20 March 2018
CloudCall Group plc
("CloudCall" or the "Company")
Final Results for the Year Ended 31 December 2017
Strong revenue growth with narrowing operating losses
CloudCall (AIM: CALL), a leading cloud-based software business that integrates communications functionality into Customer Relationship Management (CRM) platforms, is pleased to announce its audited full year results for the year ended 31 December 2017.
Key financial highlights
-- Revenues increased 42% to GBP6.9m (2016: GBP4.9m)
o US revenues increased 56% versus 2016
o Revenues in mainland Europe increased 96% in comparison to 2016
-- Recurring revenues up 55% compared to 2016
-- Gross margin improved by 150bps to 80.0% (2016: 78.5%), taking gross profit up 44% to GBP5.5m (2016: GBP3.8m)
-- EBITDA* losses reduced by 38% to GBP1.9m (2016: GBP3.0m) -- Losses per share improved to 10 pence (2016: 20 pence loss per share)
-- GBP5.7m new equity raised (before expenses) during the year from new and existing shareholders
-- GBP0.9m debt repaid during the year, leaving the Group debt free and with an unused revolving credit facility of GBP1.85m
-- Cash and cash equivalents GBP4.9m (2016: GBP3.2m) -- Net cash absorbed by operating activities down 34% year on year to GBP1.6m -- Average customer size increased 24% to 27 users (2016: 22 users) -- Total number of end-users up 45% to 23,520 as at 31 December 2017 (2016: 16,217)
*excluding share based payments
Key operational highlights
-- Strengthening of key partnership with Bullhorn
o Bullhorn adopted CloudCall internally in 2017 as their Unified Communications provider
-- Increased diversification of customer concentration - top 50 customers account for 34% of recurring revenues (2016: 38%)
-- Successful launch of CloudCall's new Unified Communications architecture, well received by customers
-- Launch of new Microsoft Dynamics CRM integration, built on CloudCall's unified architecture -- Increasing focus on the Recruitment and Staffing sectors
o A number of significant recruitment and staffing companies that moved to CloudCall during 2016 and 2017 are already demonstrating considerable growth, taking them into our top 10 customers
-- Following its latest funding round in October 2017, the Group is executing well on its stepped-up investment plans, with headcount climbing from 89 heads at the start of 2017 to 119 by the end of the year. We continue to execute on these plans during 2018, and will report on progress in due course
Outlook
-- Strong upcoming product launch pipeline
o Expected launch of instant messaging and SMS services in Q2 2018
-- Changes to the regulatory landscape being driven by GDPR expected to create opportunities for CloudCall to further serve its target customers with tools to enable compliance
-- Bullhorn's own expansion, further fuelled by the recently announced acquisitions of Talentrover and Jobscience CRMs, offers significant opportunities for the company to continue growing its share of the increasing Bullhorn customer base
-- The Board remains confident of achieving the stated ambitious growth plans for the year ahead, evidenced by a strong start to 2018 which is line with market expectations
Simon Cleaver, Chief Executive Officer of CloudCall, commented:
"2017 was an important year of significant development for the Group, in which we further invested in our people, product and infrastructure, creating a strong platform to support further growth. This investment has taken place alongside our ongoing strategy to target larger customers, fewer key CRM partnerships and a deepening sector focus toward staffing and recruitment which is unveiling itself to be a sizeable market opportunity for us.
"We are hugely excited by the progress achieved in 2017, all of which puts us in an ideal position to capitalise on our ambitious growth plans for the year ahead. 2018 has started well, and we remain confident of our prospects going forward."
For further information please contact:
CloudCall Group plc Tel: +44 (0)20 Simon Cleaver, Chief Executive 3587 7188 Officer Paul Williams, Chief Financial Officer Vigo Communications Tel: +44 (0)20 Fiona Henson / Jeremy Garcia / 7830 9701 Ben Simons www.vigocomms.com Cenkos Securities (Nominated Adviser Tel: +44 (0)20 and Joint Broker) 7397 8900 Stephen Keys / Callum Davidson / Nick Searle Arden Partners (Joint Broker) Tel: +44 (0) 20 Steve Douglas / Ciaran Walsh 7614 5900
Investor presentation webcast
The Company will host a webcast and presentation for investors at 11.00am on Tuesday 20 March following publication of the full year results. Investors wishing to join the webcast are invited to log into the following website approximately 10 minutes prior to the commencement of the webcast. The webcast will provide an opportunity for investors to ask questions directly to the team.
https://attendee.gotowebinar.com/register/5702870334323661571
A replay of the webcast will be made available on CloudCall's website shortly after the event:
https://www.cloudcall.com/investor/rule26/
Annual Report
The Annual Report for the year ended 31 December 2017 will be published today on the Company's website at www.cloudcall.com. Hard copies of the Annual Report will be posted to shareholders in due course and the Company will notify its shareholders once this has occurred.
Annual General Meeting
The Annual General Meeting of the Group will take place on Monday 21 May 2018 at 11.00 am at the offices of Cloudcall Group plc, 1 Colton Square, Leicester LE1 1QH.
Chairman's statement
I am pleased to report on a strong set of results for the year ending 31 December 2017 that shows the excellent progress towards the strategic objectives agreed by the Board at the beginning of the year.
Business performance
Highlights in the period were:
-- Total revenues up by 42% to GBP6.9m compared to GBP4.9m in FY 2016 -- Monthly recurring revenues up by 55% compared to FY 2016 -- Total users increased by 45% since 31 December 2016
-- Bullhorn expansion and strengthening relationship offers further opportunities for growth
-- Launch of integration into Microsoft Dynamics CRM, the second largest CRM in the world
In addition to the improvements seen across our key financial growth metrics I am also pleased to report that the Group's focus on client satisfaction and client retention has resulted in steadily improving metrics in these areas. Furthermore, the Group's relationship with its key strategic partner - Bullhorn CRM - has continued to strengthen across Bullhorn's global footprint. This presents a significant opportunity for the Group as Bullhorn has recently announced acquisitions which will significantly add to their global footprint.
In July 2017 we confirmed that the Company's lender, Barclays, agreed to provide an improved three-year revolving credit facility of GBP1.85m to replace the previous GBP0.9m two-year term loan, which enabled management to invest in the business with more confidence.
Following the half year results in September 2017, institutional investor demand was sufficiently strong that the Board were able to recommend a new share placing, raising GBP5.7m of equity finance (before costs) at a price of 143.5 pence per share.
This additional funding, combined with the enhanced Barclays facility has ensured that the investment capital is now in place to confidently support further product development and sales and marketing expansion, in addition to broadening our CRM partner reach during 2018.
Our strengthened balance sheet when combined with our growing monthly recurring revenue base, increasing product capabilities, strong user growth and improved customer retention, gives the Board comfort that the business is well-placed to continue delivering its focussed growth strategy through 2018 and beyond.
This improved position allows for more investment in sales and marketing which, combined with product enhancements delivered and planned, will create further opportunities to integrate the CloudCall platform with additional CRM platforms, creating a broader route to market and facilitating further accelerated growth in users and recurring revenues over time.
Outlook
Following our most recent equity raise, the Board has conducted a review of the levels of investment in our platform and sales channel development to optimise the cash resources available to ensure our ambitious growth targets are delivered in 2018 and beyond.
Based on this planning activity the Board is confident that the business is moving into 2018 stronger, more resilient and well placed to deliver on its growth strategy.
I would like to take this opportunity to thank all our staff for their drive and commitment throughout the year and look forward to 2018 being another year of strong progress against the clear and exciting growth strategy that has been set out for the business.
Peter Simmonds
Non-executive Chairman
CloudCall Group plc
Chief Executive's review
Performance overview and financial highlights
2017 was a strong year of progress for CloudCall with revenue growing by 42%, to GBP6.9m, and recurring revenue growing by 55% compared to the previous year, driven in part by a 45% increase in the number of end users to just over 23,500.
The decision to target sales and marketing activity towards larger mid-sized businesses has proven to be a successful strategy. Over the course of 2017, our average customer size grew by 24% from 21.6 to 26.9 and we are now growing revenues from within a number of significant new customers. This trend is particularly marked within the recruitment and staffing sector with several new key accounts growing rapidly, making inroads into our top 10 customer list.
The efficiencies of scale that come with these larger customers means that they are generally more profitable to CloudCall, have higher retention rates and enable the opportunity to add more users as the relationship evolves. It should be noted however, that their enhanced purchasing power with often larger and longer commercial terms being negotiated has had a slight adverse impact on overall average recurring revenue per user.
Elsewhere across the business, we have continued to make good progress. Improvements to our customer on-boarding processes have helped reduce the average time between order received and go-live to approximately 5 weeks, meaning that new customers commence billing earlier than has previously been the case. Customer satisfaction is continuing to climb, evidenced by the fact that our customer support team continues to deliver excellent support ratings averaging 96%, and the number of customers required to be managed by our "at-risk" triaging process has also fallen during the year. The net effect of this has been a 10% reduction in monthly churn rates achieved over the course of the year, and we continue to see improvements as we enter 2018.
Constrained growth
Whilst these growth rates are impressive, our performance was, to some extent, restricted by a number of constraining factors. Indeed, 2017 would be better described as being a year of consolidation and preparation, with the business focussing on strengthening the foundations that will support future growth.
Prior to the fundraise in the autumn, of which the VCT/EIS element received HMRC advance approval on 29 November, the Group was undeniably cash constrained with available cash resources only allowing for limited investment in sales and marketing activity. Growth rates to date have been achieved with minimal outbound marketing, and with sales staff numbers held at minimum viable levels. This lack of dedicated resources has historically held back the rate of new customer acquisition, particularly in the US, where our addressable market is four or five times that of the UK.
In the run up to the year-end, and continuing into 2018, the additional funds raised are allowing us to begin expanding our sales and marketing functions and I look forward to reporting on progress later in the year.
Resource limitations were also being keenly felt in product development, where for much of the year a significant portion of our software development resource was focussed on rebuilding our core infrastructure into a robust, multi-channel communications platform that would enable us to scale more quickly in 2018. This exercise naturally restricted our ability to launch new revenue impacting products and services in 2017.
An improved platform to facilitate growth
Driven largely by the millennial generation, there is an underlying shift from the more traditional methods of communication towards texting and instant messaging. To allow the Group to take advantage of this trend it was necessary to rebuild the underlying architecture to efficiently expand its product beyond supporting just voice communications to include texting and messaging capabilities as part of a multi-channel unified communications solution.
Historically, CloudCall built bespoke solutions for each CRM partner, resulting in differing levels of functionality and an ongoing development overhead associated with maintaining these multiple bespoke software bases. Continuing with this approach, would have necessitated building bespoke iterations of any new feature, such as SMS or messaging, for each supported CRM integration.
The new platform architecture is designed with the software components broken down into modules and held centrally as a 'software library'. This allows CRM integrations to be built as simpler frameworks, that 'pull' their required functionality modules from this central software library. This approach has multiple benefits in that it improves consistency, lowers maintenance overheads, allows for faster deployment of new functionality and increases the ease and speed of new integrations with additional CRMs.
The updated solution also significantly improves the user interface and provides a more intuitive user journey. In November, our latest Bullhorn integration was released on this new platform. Since then we have also released a new integration with Microsoft Dynamics CRM on the new platform and expect to have finished upgrading our Salesforce integration by May 2018. Feedback from customers using the new platform has been extremely positive.
Now that this fundamental architectural change has been made, we are able to move forward at a much faster pace. I'm pleased to be able to report that since the year-end, development work on building our SMS and instant messaging services has been progressing well and we are currently on schedule to release this functionality in May 2018. We are already aware of considerable interest from both existing customers and prospective customers and so, when launched, we anticipate an increase in revenues from both existing customers and improving new customer signup rates.
Strengthening ties with Bullhorn
Our relationship with Bullhorn has continued to strengthen and its staff's knowledge of, and confidence in, the CloudCall service noticeably improved when it selected us as its own telecoms provider, which is already improving lead flow to CloudCall from Bullhorn's own sales teams.
Prior to Bullhorn's acquisition of Connexys in September 2017, our penetration of Bullhorn's user base stood at 25% in Europe and 6% in North America. However, adjusting for that acquisition, repositions our penetration of their revised total EMEA users to 14%.
In March 2018, Bullhorn announced that it had completed the acquisitions of both Talentrover and Jobscience, recruitment CRMs built on the Force.com platform (like Connexys). Whilst it remains very early days in terms of quantifying exactly what this means for CloudCall in terms of addressable market, it is very clear to see that our strong relationship with Bullhorn, in conjunction with their recent acquisition driven growth represents a very significant opportunity to CloudCall.
Increasing our focus on recruitment and staffing
Further segmentation of the global CRM market has enabled us to identify a vibrant recruitment and staffing sector, employing over 12 million people globally. CloudCall's suite of integrated communications products is a strong fit for this sector and is appreciated by firms looking to adopt technology that helps them increase their speed in contacting candidates. This is something that CloudCall's solution excels at.
The Group's success in this sector, its strong relationship with Bullhorn with its enhanced customer base, together with CloudCall's growing reputation, has led the Board to decide to focus more heavily on this sector, before exploring other markets.
Our culture
Over the year, staff numbers increased from 89 to 119, reflecting our desire to capitalise on the market opportunity that exists today. We are continuing to focus on creating a caring and inclusive culture and are investing more in improving our staff mentoring, training and support mechanisms. I'm delighted to say that the various charity and community initiatives we launched in 2016 are now flourishing. I believe this can be exemplified by numerous staff members braving the 'Beast from the East' cold all night, looking out for, and helping homeless people in Leicester completely from their own initiative, which made me particularly proud.
I'm also keen that CloudCall acts as a responsible employer, and a caring neighbour wherever it is represented around the world, because I firmly believe that following this path generates benefits that extend well beyond the obvious.
Outlook
As we continue to grow our recurring revenue, it is clear that growth in the first half of the year has a far greater cumulative impact on the year's total revenue number than growth in the latter part of a year. I'm therefore pleased to announce that whilst we don't expect to see full contribution from our newly hired sales heads until Q2, our existing sales team have had a strong January and February and that trading is in line with expectations.
Simon Cleaver
Chief Executive Officer
Cloudcall Group plc
Financial review
Revenue
Revenues grew by 42% from GBP4.9m to GBP6.9m in 2017
The Group derives all its revenues from the provision of integrated communications software and services to customers in the UK, mainland Europe and North America. In 2017, the Group's North American operation again delivered strong growth with revenues up 56% to GBP2.0m (from GBP1.3m in 2016). Notable also is the level of growth in revenues generated in mainland Europe, increasing 96% to GBP0.6m in 2017. With 87% of revenues that are either recurring or repeating in nature, recurring revenue from subscription services grew 55% in 2017 compared to the prior year. This strong top line and recurring revenue growth underpins the Board's view that the strategy to focus on key CRM partnerships and industry verticals, larger mid-market customers and growth from within the existing customer bases continues to deliver positive results. On a constant currency basis, growth in revenue was 40%.
Gross margin
Gross margin improved from 78.5% in 2016 to 80.0%
The Group's continued focus on delivering more value-adding network discovery, training and implementation services to our new customers, together with better partner management and more efficient procurement of upstream telecoms capacity has seen a further improvement in gross margin to 80% in 2017.
Operating costs excluding depreciation, amortisation and share based payments
Operating costs grew from GBP6.8m to GBP7.4m in 2017
Growth in operating expenditure of 8% year-on-year in the context of a 42% growth in revenues for the same period, continues to demonstrate the SaaS (Software as a Service) model whereby revenue growth outstrips operating expenditure growth, which can be held at a much lower level as the revenue generating assets are substantively in place and the business begins to scale. It is worth noting that periods of greater investment in the business designed to accelerate growth will naturally lead to greater operating expenditure and increased operating losses whilst that investment takes time to flow through to increased revenue. On a constant currency basis, growth in operating costs was 6%.
Reported operating costs should be read in the context of a further GBP0.9m of costs incurred in the development of new products and services, and capitalised to the balance sheet under IAS 38 accounting treatment. The adjusted operating cost including this expenditure would be GBP8.3m, an increase of 20% against the IAS 38 adjusted operating spend in 2016. The additional expenditure is reflective of the investment being made in the company, both in the run up to, and after, the fund-raise event in October.
EBITDA loss before share-based payments was GBP1.9m, down by 38% from GBP3.0m in 2016.
Research and development costs
Development costs capitalised GBP0.91m (2016: GBP0.15m)
Investment in the development of new and improved products and applications and the protection of the intellectual property of such development work is considered key to the further improvement of CloudCall's competitive position.
In Q3 2016, because of its improved internal systems and software development methodologies, the Group was able to begin capitalising software development costs as an intangible asset in accordance with the requirements of IAS 38. The proportion of research and development costs that can now be identified for capitalisation as a software asset increased throughout 2017, bringing the Group into line with its peers.
Further to the adoption of IAS 38, the Group confirms that, as a result of new products coming into service during 2017, IAS 38 related amortisation charged in 2017 amounted to GBP35k (2016: GBPnil).
Debt and financing expenses
The Company has no outstanding debt (2016: GBP0.9m) and a net financing expense of GBP73k (2016: GBP71k)
On 12 July 2017, the Company announced that it had secured a new revolving loan facility (the "Facility") with Barclays Bank, replacing its previous sterling term loan facility of GBP900,000 which was fully drawn and due for repayment in February 2018.
The new Barclays revolving credit facility ("RCF" or the "Facility") provides borrowing facilities of up to GBP1.85 million for a 3-year term. Interest is set at 7.45% above 3-month LIBOR rate for funds drawn. Funds can be drawn as required by the Company, typically for fixed periods of 3, 6 or 12 months. Interest is payable upon settlement of each tranche drawn. The Facility also incorporates a non-utilisation fee whereby undrawn funds are charged at a rate of 2.98% per annum. The facility is secured over the assets of the Group.
As at 31 December 2017 the Facility was fully undrawn.
Because of the debt drawn down under the previous term loan during part of 2017, and the non-utilisation charges incurred on the new revolving credit facility, the Group's net financing expense increased marginally to GBP73k compared to GBP71k in 2016.
Cash and working capital
The Group had GBP4.9m net cash at the end of the year (2016: GBP3.2m).
SaaS companies that deliver recurring revenue streams tend to see new customer acquisitions increase cash burn in the short-term as most customer acquisition costs are incurred before a new customer is live for billing. Once on-boarded and billing, a customer will generate cash monthly in line with the month in arrears billing terms, usually recovering the initial outflow in a 6 to 9 month period. It is for this reason, that SaaS companies looking to accelerate growth will typically accelerate cash-burn in the short-term whilst new customer acquisition is funded.
The Group's balance sheet includes an R&D tax credit receivable of GBP0.6m. As has been the case in recent years, this is expected to be received in cash in June or July 2018.
Net cash absorbed by operating activities was GBP1.6m, down from GBP2.4m in 2016. This improvement should be considered in the context of the additional investment expenditure incurred during the year of GBP1.08m (2016: GBP0.24m). The Group continues to invest for future growth, and with the support of its shareholders, acknowledges that the execution of its strategy is likely to delay its expected break-even date.
During 2017, the Group incurred GBP170k of capital expenditure other than intangibles, up from GBP96k in 2016. Whilst the Group continues to leverage a greater proportion of web based service providers such as AWS to host some of its core technology services, capital expenditure is still expected to climb slightly over the coming year due to a planned relocation to a new larger office in Minsk, Belarus, and other planned equipment refreshes and resilience related activities.
Share capital
Total issued share capital at the year-end comprised 24,069,504 ordinary shares of 20 pence each.
In October 2017, the Company successfully raised new capital amounting to GBP5.7m (before fees and expenses) to allow the Group to capitalise on a number of near term growth initiatives, which the Board believe will generate further shareholder value. In addition to underpinning further growth, the additional funding further de-risks the Group's strategy whilst simultaneously enabling the Group to accelerate its product development plans.
This new capital raise was fulfilled by the issue of 3,963,000 new ordinary shares in the Company, at a price of 143.5 pence per share. The shares were issued in two tranches (October and December) to allow for processing the necessary EIS / VCT pre-assurance approval by HMRC.
During the year, the Company also received new capital amounting to GBP38k in relation to exercised share options and warrants.
Earnings per share and dividends
Loss per share for the year was 10 pence (2016: 20 pence).
As the business continues to be in a pre-profit, high-growth, investment phase, the Board does not recommend the payment of a dividend (2016: nil).
Going concern
The Directors confirm that 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.
Financial Statements
Consolidated Statement of Comprehensive Income
For year ended 31 December 2017
Hot Features
Premium
2017 2016
Notes GBP000 GBP000
Revenue 4 6,870 4,855
Cost of sales (1,371) (1,044)
---------- ----------
Gross profit 5,499 3,811
Operating costs 5 (7,390) (6,839)
---------- ----------
Loss from operating
activities before
depreciation, amortisation
and share based payment
charges (1,891) (3,028)
Depreciation and amortisation (477) (550)
Share based payment
charges (140) (116)
Operating loss (2,508) (3,694)
Net financing expense (73) (71)
---------- ----------
Loss before tax (2,581) (3,765)
Taxation 6 569 754
---------- ----------
Loss for the year
attributable to owners
of the parent (2,012) (3,011)
Other comprehensive
income
Exchange differences
on translation of
foreign operations 70 (75)
---------- ----------
Other comprehensive
income 70 (75)
Total comprehensive
income for the year
attributable to owners
of the parent (1,942) (3,086)
---------- ----------
Loss per share Pence Pence
Basic and fully diluted
loss per share 10 (9.8) (19.5)
------------------------------- -------- ---------- ----------
Consolidated Statement of Financial Position
At 31 December 2017
2017 2016
Notes GBP000 GBP000
Non-current assets
Property, plant and
equipment 281 343
Goodwill 7 339 339
Other intangible assets 7 1,020 365
--------- ---------
1,640 1,047
Current assets
Inventories 7 28
Trade and other receivables 1,363 897
Research & development
tax credit receivable 580 589
Cash and cash equivalents 4,872 3,169
--------- ---------
6,822 4,683
--------- ---------
Total assets 8,462 5,730
--------- ---------
Current liabilities
Trade and other payables (1,076) (985)
(1,076) (985)
Non-current liabilities
Bank loan - (900)
Total liabilities (1,076) (1,885)
Net assets 7,386 3,845
--------- ---------
Equity attributable
to shareholders
Share capital 9 4,814 4,012
Share premium account 66,329 61,788
Translation reserve 23 (47)
Warrant reserve 29 29
Retained earnings (63,809) (61,937)
--------- ---------
Total equity attributable
to shareholders 7,386 3,845
--------- ---------
Consolidated Statement of Changes in Equity
For year ended 31 December 2017
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
2016 2,701 59,607 (7) 29 (59,042) 3,288
Loss for the year - - - - - (3,011) (3,011)
Other comprehensive
income
Exchange differences
on translation
of foreign operations - - (40) - - (40)
--------- --------- ------------ --------- ---------- --------------
Total comprehensive
income for the
year - - (40) - (3,011) (3,051)
Transactions with
owners recognised
in equity:
Equity settled
share based payments - - - - 116 116
Issue of equity
shares 1,311 2,458 - - - 3,769
Issue costs of
equity shares - (277) - - - (277)
--------- --------- ------------ --------- ---------- --------------
Total transactions
with owners recognised
in equity 1,311 2,181 - - 116 3,608
--------- --------- ------------ --------- ---------- --------------
Balance at 31 December
2016 4,012 61,788 (47) 29 (61,937) 3,845
--------- --------- ------------ --------- ---------- --------------
Balance at 1 January
2017 4,012 61,788 (47) 29 (61,937) 3,845
Loss for the year - - - - (2,012) (2,012)
Other comprehensive
income
Exchange differences
on translation
of foreign operations - - 70 - - 70
--------- --------- ------------ --------- ---------- --------------
Total comprehensive
income for the
year - - 70 - (2,012) (1,942)
Transactions with
owners recognised
in equity:
Equity settled
share based payments - - - - 140 140
Issue of equity
shares 802 4,931 - - - 5,733
Issue costs of
equity shares - (390) - - - (390)
--------- --------- ------------ --------- ---------- --------------
Total transactions
with owners recognised
in equity 802 4,541 - - 140 5,483
------------------------- --------- --------- ------------ --------- ---------- --------------
Balance at 31 December
2017 4,814 66,329 23 29 (63,809) 7,386
------------------------- --------- --------- ------------ --------- ---------- --------------
Consolidated Cash Flow Statement
For year ended 31 December
2017
2017 2016
GBP000 GBP000
Cash flows from operating
activities
Loss for the year after
tax (2,012) (3,011)
Adjustments for:
Depreciation and amortisation 477 551
Foreign exchange losses 84 -
on operating activities
Financial expenses 73 71
Equity settled share-based
payment expenses 140 116
Taxation (569) (754)
Operating loss before
changes in working
capital (1,807) (3,027)
Increase in trade and
other receivables (466) (277)
Decrease in inventory 21 16
Increase in trade and
other payables 108 441
---------- ----------
Cash absorbed by operations (2,144) (2,847)
Tax received 579 480
---------- ----------
Net cash absorbed by
operating activities (1,565) (2,367)
Cash flows from investing
activities
Acquisition of property,
plant and equipment (170) (96)
Development expenditure
capitalised (910) (145)
Net cash absorbed by
investing activities (1,080) (241)
---------- ----------
Cash flows from financing
activities
Net interest paid (73) (71)
Net proceeds from the
issue of share capital 5,343 3,492
(Repayment)/proceeds
from loans (900) 900
Net cash from financing
activities 4,370 4,321
Net increase in cash
and cash equivalents 1,725 1,713
Cash and cash equivalents
at start of period 3,169 1,524
Effect of exchange
rate fluctuations on
cash held (22) (68)
Cash and cash equivalents
at end of period 4,872 3,169
---------- ----------
Notes to the financial statements
1. Preliminary announcement
The preliminary announcement set out above does not constitute the Group's statutory financial statements for the years ended 31 December 2017 or 2016 within the meaning of section 434 of the Companies Act 2006 but is derived from those audited financial statements. The auditor's report on the consolidated financial statements for the year ended 31 December 2017 and 2016 is unqualified and does not contain statements under s498(2) or (3) of the Companies Act 2006.
The accounting policies used for the year ended 31 December 2017 are unchanged from those used for the statutory financial statements for the year ended 31 December 2016. The 2017 statutory financial statements will be delivered to the Registrar of Companies following the Company's Annual General Meeting.
2. Compliance with accounting standards
While the financial information included in this preliminary announcement has been computed in accordance with IFRSs as adopted by the EU, this announcement does not itself contain sufficient information to comply with IFRSs as adopted by the EU.
Accounting standards adopted in the year
There are no new standards or amendment to standards which are mandatory for the first time for the financial year which had a significant impact on the Group's financial statements.
Accounting standards issued but not yet effective
The following IFRSs, IASs and IFRICs have been issued, are not yet effective, and have not been adopted by the Group or the Company in these financial statements:
IFRS9 Financial Instruments, effective for period commencing on or after 1 July 2018. Management expects this standard to not have a material impact although some additional disclosure will arise.
IFRS 16 Leases, effective for periods commencing on or after 1 January 2019. Management expects this standard to have an impact on the Group financial statements when it is adopted. At 31 December 2017, the Group had total minimum lease payments of GBP2,034k on leases extended beyond 12 months, which would need to be recognised in the Statement of Financial Position.
IFRS 15 Revenue from customer contracts, is effective for periods beginning on or after 1 January 2018. The standard will be adopted by the Group for the first time in the year ending 31 December 2018. The standard permits a choice of two possible transition methods for the initial application of the requirements of the new standard: (1) retrospectively to each prior reporting period presented in accordance with IAS 8 (Accounting Policies, Changes in Accounting Estimates and Errors), or (2) retrospectively with the cumulative effect of initially applying the standard recognised on the date of initial application, being 1 January 2018 for the Group (the "cumulative catch-up" approach). The Group currently has not selected the transition method for applying the new standard.
The adoption of IFRS 15 will not alter the total contract value or timing of cashflows, but there are two key areas where the adoption of IFRS 15 will change current revenue recognition:
Technical installation and set up fees
Under current accounting policies, revenue from technical installation and set up fees are recognised up-front at the point of delivery. Under IFRS 15, technical installation, and set up services do not meet the criteria to be a distinct performance obligation. The fees associated with these services will thus be combined with other services in the contract and recognised over the contract term. This will result in a reduction of revenue previously recognised, an increase in deferred income and an increase in monthly recurring revenue going forward.
Contract fulfilment assets
The costs associated with the set up and installation of the technology platform for each contract have previously been expensed to the statement of comprehensive income as incurred. Under IFRS 15, these costs will be capitalised as contract fulfilment assets, within trade and other receivables, and amortised over the life of the contract.
The Directors have concluded that although there will be a deferral of both revenue and costs in relation to set up and technical installation services, the impact on profit or loss is expected to be immaterial.
3. Critical accounting estimates and judgements
The following accounting judgements and estimates have been made by the Directors in interpreting treatment of amounts included in these financial statements in accordance with IFRSs.
Development costs
Management judgement is required in assessing the fair value of development costs capitalised including the future economic benefit expected to be generated by the assets and in calculating the attributable costs. Management judgement is also required in assessing the useful economic lives of these assets for the purposes of amortisation. The carrying value of development costs at the Statement of Financial Position date was GBP1,020,000.
Impairment
The requirement for the Directors to ensure that the Group's assets are not carried at more than their recoverable amount (i.e. the higher of fair value less costs of disposal and value in use) is covered by IAS 36 Impairment of Assets. The fair values in respect of the valuation of the Group's assets in relation to the future value of the returns those assets are predicted to generate have been estimated using a discounted cash flow model. The assumptions used as inputs to the model are by their nature areas of judgement. Based on the historic sales performance of the business and actions being taken to grow the business further, the directors do not currently assess any of these assets as impaired. The carrying value of intangible assets and property, plant and equipment at the Statement of Financial Position date was GBP1,359,000 and GBP281,000 respectively.
Share based payments
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. Judgement is required in determining the most appropriate valuation model and the most appropriate inputs into the model including the level of volatility and the expected life of the option.
4. Revenue
The directors consider that the Group has a single business segment, being the provision of hosted telecom solutions. The operations of the Group are managed and reported centrally with group-wide functions covering sales and marketing, development, professional services, customer support and finance and administration. An analysis of revenue by type is given below.
Revenue by location of customer
2017 2016
GBP000 GBP000
UK 4,327 3,300
USA 1,985 1,270
Rest of Europe 558 285
Total revenues 6,870 4,855
-------- --------
Revenue by type
2017 2016
GBP000 GBP000
Recurring subscriptions 5,126 3,312
PAYG Telephony 867 824
Non-recurring services and
hardware 877 719
Total revenues 6,870 4,855
-------- --------
Revenue by product
All revenue is attributable to the Group's main activity, the provision of hosted telecoms solutions.
Information about major customers
The Group had no customers for continuing operations which represented more than 10% of sales in the period to 31 December 2017.
5. Operating costs
2017 2016
GBP000 GBP000
Wages and salaries (*) 4,863 4,664
Foreign exchange losses and
(gains) 84 (76)
Other operating costs 2,443 2,251
7,390 6,839
-------- --------
(*) included in wages and salaries above is GBP652k (2016: GBP1,283k) relating to research and development costs expensed.
6. Taxation
Recognised in the Consolidated Statement of Comprehensive Income
2017 2016
GBP000 GBP000
Current tax income
Overseas income tax charge
for the current year (1) (27)
Current year tax credit 580 589
Adjustments in respect of
prior year (10) 80
-------- --------
569 642
Deferred income tax credit
for the current year - 112
-------- --------
Total tax credit recognised
in current year 569 754
-------- --------
Reconciliation of effective
tax rate
Loss before tax (2,581) (3,765)
Tax credit using the Group's
effective tax rate of 19.25%
(2016 20%) 497 753
Tax losses not recognised (189) (298)
Depreciation in excess of
capital allowances - (31)
Non-deductible expenses (92) (55)
Origination and reversal
of temporary timing differences - 112
Deferred tax not recognised (23) -
R&D tax credit 436 235
Amortisation (50) (45)
Different tax rates in overseas
jurisdictions - 3
Adjustments in respect of
prior years (10) 80
-------- --------
Total tax 569 754
-------- --------
Legislation to reduce the main rate of corporation tax to 19% from 1 April 2017 and 17% from 1 April 2020 was enacted in September 2016. The impact of this change on the Group's financial statements is not significant as it has no recognised tax liabilities or assets, whether deferred or current, at the year end.
7. Intangible assets
Goodwill Patents Acquired Software Total
& trademarks IPR development
costs
GBP000 GBP000 GBP000 GBP000 GBP000
Cost
Balance at 1 January
2016 339 12 1,448 35 1,834
Internally developed - - - 145 145
------------- -------------- --------- ------------- --------
Balance as at
31 December 2016 339 12 1,448 180 1,979
------------- -------------- --------- ------------- --------
Balance at 1 January
2017 339 12 1,448 180 1,979
Internally developed - - - 910 910
------------- -------------- --------- ------------- --------
Balance as at
31 December 2017 339 12 1,448 1,090 2,889
------------- -------------- --------- ------------- --------
Amortisation
Balance at 1 January
2016 - (12) (941) (35) (988)
Amortisation for
the year - - (287) - (287)
------------- -------------- --------- ------------- --------
Balance as at
31 December 2016 - (12) (1,228) (35) (1,275)
------------- -------------- --------- ------------- --------
Balance at 1 January
2017 - (12) (1,228) (35) (1,275)
Amortisation for
the year - - (220) (35) (255)
------------- -------------- --------- ------------- --------
Balance as at
31 December 2017 - (12) (1,448) (70) (1,530)
------------- -------------- --------- ------------- --------
Net Book Value
At 31 December
2016 339 - 220 145 704
------------- -------------- --------- ------------- --------
At 31 December
2017 339 - - 1,020 1,359
------------- -------------- --------- ------------- --------
The acquired IPR arose on the acquisition of Cloudcall Limited and represents the fair value of the proprietary software developed within Cloudcall.
The carrying amount of ongoing development projects on which amortisation has not yet commenced was GBP550k (2016: GBP145k). The weighted average remaining amortisation period for software and websites is 4.8 years (2016: 5 years).
8. Bank Loan
On 17 February 2016, the Company agreed a GBP900,000 loan facility with Barclays Bank (the "Loan"). Interest on the Loan, which is for a fixed two-year term expiring in March 2018, is set at 8.7% above base rate and was payable quarterly. Repayment was by a single repayment of the principal in full on the final repayment date in March 2018. The loan was repaid in full in September 2017.
On 11 July 2017, the Company agreed a revolving credit facility with Barclays Bank for an amount of GBP1.85m which expires on 11 July 2020. Interest is set at 7.45% above base rate and the non-utilisation fee is set at 2.98%.
There is a debenture over all the assets of the Group, and a cross guarantee in place in favour of Barclays Bank plc under which the Company's subsidiaries undertake to repay the bank debt should it be required.
9. Share capital
The issued, called up and fully paid share capital of the Company at 31 December was as follows:
Number of shares 2017 2016 2017 2016
(000) (000) GBP000 GBP000
Allotted, called
up and fully
paid Ordinary
shares of GBP0.20
each 24,069 20,060 4,814 4,012
The movement in the issued share capital in the year was as follows:
Number of Shares Ordinary
Shares
(000)
In issue at 31 December 2016 - fully
paid 20,060
Issued in consideration for additional
shares placed 4,009
In issue at 31 December 2017 - fully
paid 24,069
---------
10. Earnings per share
Basic earnings per share
The calculation of basic loss per share at 31 December 2017 of 9.8 pence (2016: 19.5 pence) was based on the loss for the year attributable to owners of the parent of GBP2,012k (2016: GBP3,011k) and a weighted average number of Ordinary Shares outstanding during the period of 20,638,000 (2016: 15,423,000), calculated as follows:
(Thousands of Shares) 2017 2016
Issued ordinary shares at
start of period(*) 20,060 13,505
Issued for cash on 12(th)
October 2017 - 624
Issued for cash on 25(th)
August 2017 - 1,294
Issued for cash on 24(th) 465 -
October 2017
Issued for cash on 8(th) 99 -
December 2017
Issued in respect of warrants 14 -
and options
------- -------
Weighted average number of
ordinary shares 20,638 15,423
------- -------
Diluted earnings per share
The weighted average number of shares and the loss for the year for the purposes of calculating diluted earnings per share are the same as for the basic loss per share calculation. This is because the outstanding share options would have the effect of reducing the loss per share and would not, therefore, be dilutive under the terms of IAS 33.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR FKCDNFBKDBND
(END) Dow Jones Newswires
March 20, 2018 03:00 ET (07:00 GMT)
1 Year Cloudcall Chart |
1 Month Cloudcall Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
