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 |
|---|---|---|---|---|---|
| Dev Clever Holdings Plc | LSE:DEV | London | Ordinary Share | GB00BH452L44 | 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% | 30.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2019 to May 2024
TIDMDEV
RNS Number : 7255T
Dev Clever Holdings PLC
29 March 2021
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.
NOT FOR PUBLICATION OR RELEASE IN OR INTO THE UNITED STATES OR AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF IRELAND OR THE REPUBLIC OF SOUTH AFRICA, OR ANY PROVINCE OR TERRITORY THEREOF OR TO OR FOR THE ACCOUNT OF ANY NATIONAL, RESIDENT OR CITIZEN OF THE UNITED STATES OR ANY PERSON RESIDENT IN AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF IRELAND OR THE REPUBLIC OF SOUTH AFRICA.
Dev Clever Holdings plc
('Dev Clever', the 'Group' or the 'Company')
Annual Financial Report for the year ended 31 October 2020 and Notice of Annual General Meeting
Acceleration of growth combined with material strengthening of equity capital.
Dev Clever (LSE: DEV), a leading developer of mobile and immersive experiences, is pleased to announce its audited full year results for the year ended 31 October 2020 (FY 2020).
Financial Highlights:
-- Total revenue up 161% to GBP1.25 million (2019: GBP0.5 million), reflecting the establishment of sales channels for the Group's core Educate platforms Launchyourcareer.com and VICTAR VR and an uplift within Agency Services supported by the acquisition of Phenix Digital.
-- The value of confirmed orders and customer commitments received during FY 2020 totalled GBP2.4 million (2019: GBP0.5 million) and was in line with management expectations.
-- The overall EBITDA loss was GBP0.9 million (2019: GBP1.0 million).
-- The loss before tax was GBP1.06 million compared to GBP1.07 million in the prior period. The loss reflects the Group's on-going investment in the productisation of its software platforms, the strengthening of its executive and senior management teams, and the establishing of a dedicated marketing function. The Group is focused on effectively capturing the significant revenue opportunities that are available to it, primarily in the UK, US, Canada and India.
-- Cash position of GBP1.03 million (2019: GBP0.50 million) at period end, with very significant equity growth capital raised post year-end.
-- Loss per share for the period of 0.22 pence (2019: 0.29 pence); Adjusted(2) loss per share 0.19 pence (2019: 0.23 pence).
Operational Highlights:
-- Signing of an exclusive three-year global distribution agreement with Lenovo, providing a direct route to the global EdTech market for Dev Clever's core careers education platforms, Launchyourcareer.com and VICTAR VR.
-- Localising and launching Launchyourcareer.com and VICTAR VR for the US and Canadian markets.
-- Undertaking a successful pilot of a virtual open week with schools, colleges and employers across the West Midlands in the UK, demonstrating the ability of Launchyourcareer.com to co-ordinate multiple broadcasts across many user groups concurrently.
-- Partnering with Veative Labs Pte. Ltd ("Veative"), a leading provider of online and immersive learning to the education sector, to enable the integration, cross-marketing and selling of products and services to provide a compelling careers development and learning programme, in and out of the classroom, on a global basis.
-- Completing the acquisition of Phenix Digital Limited, a multi-service digital agency within the education sector, enhancing the Company's sales and marketing capability and strengthening the Agency Services offering.
-- Entering into a three-year commercial partnership with Low6 LTD, a leading provider of mobile pool betting applications, to enable Low6's mobile quiz-based pool betting application, PubWars, to be integrated with the Engage platform and PubPal, the Company's mobile and contactless ordering and payment service.
-- Entering into a three-year commercial agreement with Heineken for the deployment of the Engage consumer loyalty platform, to run digital campaigns across its Star Pubs estate.
Post Period End Highlights:
-- Overall growth profile and business momentum continues to accelerate.
-- Significant additional growth capital raised: GBP12 million gross (circa GBP11.3 million net) raised since the period end and a further GBP6 million gross is expected to be completed imminently.
-- Signed and presently implementing a material license agreement (currently subject to a non-disclosure agreement) that utilises our core EdTech services capabilities.
-- Near term product launch in India through a highly innovative five-year exclusive partnership agreement with Veative Labs and the National Independent Schools Alliance ("NISA"), being India's largest governing body for budget private educational institutions. The partnership enables both a business-to-business subscription model for NISA affiliated schools and a direct-to-consumer subscription for pupils.
-- Formed and activated a Business Advisory and Intelligence Group, chaired by Lord McNichol of West Kilbride.
Footnotes
(1) Adjusted EDITDA and adjusted loss per share are stated after adjusting for the impact share-based payments and the one-off costs associated with the initial placing.
Chris Jeffries, Chief Executive Officer of Dev Clever, said:
"Our organisation and business activities were, like many other businesses around the world, impacted by the onset of the COVID-19 pandemic. In that context, the financial performance was especially pleasing. The year itself was significant in terms of our swift organisational response to the pandemic alongside the growth and momentum that the Company subsequently delivered, particularly towards the latter part of the financial year. The partnership with Veative has significantly increased our combined product depth and market reach. Our fully integrated Educate proposition is expected to go live in multiple major marketplaces shortly and this in turn will further benefit our extremely positive business momentum since the start of the current financial year.
"We welcome Asimilar Group Plc and Sitius Limited as new cornerstone investors and are pleased to have raised a very substantial amount of growth capital in a short period of time. This capital flexibility enables us to accelerate multiple growth initiatives in a disciplined manner. Our focus is to build a market leading and profitable position within the burgeoning global EdTech market space to the long-term benefit of all our stakeholders. We look forward with excitement to the future."
Publication of Annual Report and Notification of AGM
The Annual Report and Accounts for the year ended 31 October 2020 has today been sent to shareholders together with the Notice of and Form of Proxy for its Annual General Meeting, which will be held at 10:30 a.m. on Thursday, 22 April 2021 at its offices in Unit 1, Ninian Park, Ninian Way, Wilnecote, Tamworth, Staffordshire, B77 5ES.
In compliance with LR 9.6.1, the Company has submitted to the Financial Conduct Authority each of the following documents:
-- 2020 Annual Report and Accounts -- AGM Notice
These documents will shortly be available for inspection via the National Storage Mechanism.
The Annual Report and the AGM Notice will also be available to download from the Company's website: www.devcleverholdingsplc.com and hard copies can also be requested from the registered office, Ventura House, Ventura Park Road, Tamworth, Staffordshire, B78 3HL.
Investor Update
As previously announced, there will be a virtual capital markets event for analysts and investors at 09:30am on 06 April 2021 to discuss the Company's growth strategy and future prospects. Details, including joining instructions, will be made available at 7a.m. on the day of the event.
-ends-
Dev Clever Holdings plc Christopher Jeffries Chief Executive Officer and Executive Chairman Nicholas Ydlibi Chief Financial Officer +44 (0) 330 058 2922 Novum Securities Limited - Joint Broker & Financial Adviser Colin Rowbury David Coffman +44 (0) 20 7399 9400 Buchanan Communications Richard Oldworth / Chris Lane +44 (0) 207 466 5105
Notes to Editors:
Dev Clever Holdings plc, together with its wholly owned subsidiary DevClever Limited, is a software and technology group based in Tamworth, United Kingdom, specialising in the use of lightweight integrations of cloud-based VR and gamification technologies to deliver rich customer engagement experiences across both the education and commercial sectors. In January 2019, Dev Clever listed on the Standard List of the London Stock Exchange. The Group's core focus is the development and commercialisation of its core platforms - Educate (its primary focus) and Agency Services (its secondary focus).
Educate Division:
Through Educate, Dev Clever aims to reduce the global skills shortage by delivering an enhanced careers guidance service via its online platform, Launchyourcareer.com, and virtual reality software (Victar VR). The business has established a global partnership with Lenovo to roll its service worldwide, with offerings already on the market in the UK, US and Canada. Dev Clever is also focused on the Indian market and has partnered with its National Independent Schools Alliance (NISA) and content provider Veative to provide a comprehensive service offering within Indian budget private schools. Through this, the business is developing and intends to launch a direct-to-consumer offering in India.
Agency Services Division:
The Company's Agency Services division provides customers from the retail, brand and hospitality sectors with bespoke application and customisation of the Group's proprietary cloud-based products in order to increase consumer engagement, transactional efficiencies and enhance customer experience within their venues.
For further information, please visit www.devcleverholdingsplc.com .
Chairman and Chief Executive Officer's Review
I am pleased to report that Dev Clever made significant progress during the financial year ended 31 October 2020 ("FY 2020"). We have a clearly stated roadmap that we continue to execute against, and I am pleased to have this opportunity to provide an update on our progress.
Overview of the year
This is the Group's second set of full year financial statements that we have released following our IPO and admission to Main Market of the London Stock Exchange in January 2019. For Dev Clever, and the world at large, FY 2020 presented unprecedented challenges with the onset of Covid-19 and the subsequent impact the pandemic has had. Like virtually every business and organisation, Dev Clever's operations were affected by the pandemic and, in both of its Education and Agency Services (where hospitality is the core of the client base) divisions, this resulted in the lengthening of sales cycles and the deferral of certain projects and contracts. Notwithstanding these headwinds, the Company was still able to deliver record growth and revenues.
The Group responded to the global pandemic quickly and it swiftly implemented business contingency plans for remote-based working, prioritising the health and wellbeing of its team members who adapted well to remote working. They were supported by technology and communications facilities that enabled them to transition with minimal impact on productivity and performance. Daily team huddles and fortnightly business-wide town halls enabled employees and teams to remain fully engaged, while keeping them safe.
Despite the global challenges, the Company continued to make significant progress over the course of FY 2020, validated by the decision last year to focus on its Educate division and to consolidate its remaining operations into an Agency Services division.
Revenues in FY 2020 were up 161% to GBP1.25 million (2019: GBP0.48 million) on confirmed orders of GBP2.4 million (2019: GBP0.5 million), generating a gross profit margin of 43.9% and gross margin of GBP0.55 million (2019: loss GBP0.04 million). The operating loss of GBP1.09 million (2019: loss GBP1.04 million) was in line with expectations and reflects the substantial on-going investment in our core careers education platforms, Launchyourcareer.com and VICTAR VR, and the build-up of the Company's sales and marketing capacity to support its launches in the UK, US and Canada.
Throughout FY 2020, the Company continued to make significant operational progress both in its primary division, Educate, and in Agency Services, including:
-- Signing an exclusive three-year global distribution agreement with Lenovo, providing a direct route to the global EdTech market for Dev Clever's core careers education products, Launchyourcareer.com and VICTAR VR.
-- Localising and launching Launchyourcareer.com and VICTAR VR for the US and Canadian markets.
-- Undertaking the successful pilot of a virtual open week with schools, colleges and employers across the West Midlands, demonstrating the ability of Launchyourcareer.com to co-ordinate multiple broadcasts across many user groups concurrently.
-- Partnering with Veative Labs Pte. Ltd ("Veative"), a leading provider of online and immersive learning to the education sector, to enable the integration, cross-marketing and selling of products and services to provide a compelling careers development and learning programme, in and out of the classroom, on a global basis.
-- Completing the acquisition of Phenix Digital Limited, a multi-service digital agency within the education sector, enhancing the Company's sales and marketing capability and strengthening the Agency Services offering.
-- Entering into a three-year commercial partnership with Low6 LTD, a leading provider of mobile pool betting applications, to enable Low6's mobile quiz-based pool betting application, PubWars, to be integrated with the Engage platform and PubPal, the Company's mobile and contactless ordering and payment service.
-- Entering into a three-year commercial agreement with Heineken for the deployment of the Engage consumer loyalty platform, to run digital campaigns across its Star Pubs estate.
The business has also added to its leadership team, welcoming Chief Operating Officer and Chief Sales Officer, Tim Heaton, to the Board in May 2020. In addition, the senior management team has been strengthened with the appointments of Richard Lee as Global Sales Director and Keith Hayes as Head of Governance and Risk. Richard joined the Group from Lenovo, where he was the Business Development Manager of Educational Global Verticals at Lenovo Group. Richard worked extensively on the launch of the Lenovo VR Classroom product and has an in-depth understanding of the EdTech market and of Dev Clever's comprehensive service offering. Keith is a cybersecurity professional with extensive industry experience of leading global infrastructure, data and security teams. He has also made key contributions to data privacy and protection policies and standards for both central and local government.
This significant operational progress over the period has been supported by the Company's financing activities. In January 2020, the Group raised net proceeds of GBP0.77 million by way of a placing and a convertible loan from its Executive Chairman. In May 2020, the Company entered into an agreement with Intrinsic Capital Jersey Limited ("ICJL") to raise up to GBP10.0 million in four subscription tranches at a fixed price of 10 pence per ordinary share, which was a material premium to the prevailing share price at the time. The first tranche of this investment, which completed in two stages over August and September 2020, raised gross proceeds of GBP2.0 million and net proceeds of GBP1. 9 million.
Company Overview.
Educate continues to be the Company's primary division and the focus of management and capital resource, with Agency Services playing an important role in providing a source of recurring revenue, while servicing a host of blue-chip brands, employers and educators with digital experience solutions to increase student and customer engagement for promotions, learning, training and development.
Educate
The Company's primary revenue model is two-phased. Initially revenue will be secured from fixed annually recurring SaaS licences from the users of the VICTAR VR application and the supporting analytics available through Launchyourcareer.com. The costs of these licences are either:
-- Included in the retail value of the hardware manufacturer's VR classroom solutions and are payable to Dev Clever by the hardware manufacturer on sale of the supporting hardware. Launchyourcareer.com and VICTAR VR are taken to market by the hardware manufacturer's direct sales teams and their network of distributors and resellers; or
-- Payable as a direct subscription.
Once the user base is established, the Company will subsequently look to exploit additional commercial opportunities by providing employers and further education establishments the opportunity to promote their respective employment opportunities and courses through a self-service advertising framework, on an annual subscription basis and the provision of added-value professional services.
The demand for remote-based and immersive learning continues to grow. This has been compounded by the COVID-19 pandemic that has forced both educators and businesses to adopt new ways of working. This is further supported by major manufacturers positioning themselves and their affordable standalone VR equipment to take advantage of the mass adoption of this technology wave across the world.
The Group's virtual reality careers guidance platforms, Launchyourcareer.com and VICTAR VR, are designed to connect young people, their influencers, schools, educational institutions, employers and training providers together. The platform is being successfully used by a number of schools, academies and colleges in the UK and hosted its first virtual open week in July 2020, bringing together students, further education colleges and employers to share opportunities for young people to follow their career aspirations. Rollout commenced in the US though the partnerships with both Lenovo and Veative. The Company has now completed the engagement and training of the distributor and reseller network and, alongside the launch of its first direct marketing campaign, has seen a strong increase in interest and associated enquiries.
The Company's Educate proposition is well placed to benefit from recent legislation including the UK Government's mandatory requirement for schools to improve the level of personal engagement in careers advice and the US Federal Government's focus on career-based skills learning:
-- In December 2017, the UK Department for Education released its new career guidance strategy which placed the eight Gatsby Career Benchmarks at its heart. Gatsby believes that every young person needs high quality career guidance to make an informed decision about their future, and this is even more important with reforms to technical education introduced during 2020. Career guidance is also a vehicle for social justice: those young people without social capital or career support at home suffer most from poor career guidance.
-- In March 2020, the UK government announced that it would spend GBP2.5 billion on a new National Skills Fund aimed at encouraging adults to train throughout life and pushing the government and employers to increase investment in closing the skills gap. The government announced that a further GBP1.5 billion would be spent on capital investment to improve buildings in further education colleges.
-- The National Career Development Guidelines (NCDG) are a framework in the US and Canada for thinking about the knowledge and skills young people and adults need to manage their careers effectively, from making decisions about school to taking that first job and beyond. To support the framework, the NCDG website provides career development activities and resources for youth and adults that are linked to the NCDG goals. The Strengthening Career and Technical Education for the 21st Century Act (Perkins V) was signed into law by President Trump on July 31, 2018. This bipartisan measure reauthorized the Carl D. Perkins Career and Technical Education Act of 2006 (Perkins IV) and continued Congress' commitment in providing nearly $1.3 billion annually for career and technical education (CTE) programs for the nation's youth and adults. Perkins V represents an important opportunity to expand opportunities for every student to explore, choose, and follow career and technical education programmes of study and career pathways to earn credentials of value.
The Directors believe that the prevailing skills gaps, together with the enhanced focus on career development, creates significant demand for EdTech solutions. The Company's Educate products are well placed to enhance careers advisory programmes delivered within schools and provide personalised, measurable and independent careers' advice.
Dev Clever will continue to invest in Launchyourcareer.com and VICTAR VR with the objective of enabling educational establishments to comply with and support these requirements. The Company continues to explore opportunities to extend the reach of its Launchyourcareer.com and VICTAR VR platforms with either its existing partners or with new partners, as appropriate. These opportunities include a rollout into both new territories and new market sectors, such as primary education and young people who have fallen out of education and training.
Agency Services
The Group's Agency Services proposition encompasses the Engage digital loyalty platform and the Group's bespoke development services:
-- Engage.
The Group's proprietary cloud-based gamification engine that allows it to provide digital engagement experiences to consumers of global brands and major retail customers. Blue chip customers currently benefiting from the Engage platform include Heineken and Britvic. The Company's longer-term vision is to utilise Engage to enhance the user experience of its core Educate platforms.
-- Bespoke.
Bespoke innovation and development services covering mobile communication, automation and management software applications. Developments include:
o Creation of a sound recording application for Audoo Limited to automatically identify and track music played in public spaces.
o Development of a mobile quiz-based pool betting application in partnership with Low6.
Post-period end developments and outlook.
Secured significant equity funding to accelerate targeted growth.
The increased pace of growth has been facilitated through the receipt of further capital since the year end. In January 2021 the Company received gross proceeds of GBP2.0 million, net GBP1.9 million, from the second tranche of the Intrinsic ("ICJL") subscription.
In February 2021 the Company announced a further equity subscription agreement with One Nine Two Pte Limited. The agreement provided for an initial subscription of 20 million new ordinary shares at a subscription price of 20p per share, which completed in the month, raising gross proceeds of GBP4.0 million, net GBP3.8 million. The agreement also provides for a further subscription of 20 million ordinary shares at an exercise price of 30 pence per share to raise gross proceeds of GBP6.0 million. This will complete automatically once the Company's share price closes at or above 34p for a period of five consecutive days and is valid for a period of nine months. The Company also granted One Nine Two Pte Limited a warrant over 40 million new ordinary shares at an exercise price of 50p per share, subject to completion of the further subscription. The warrant is exercisable in whole or in part at any time until the second anniversary of the completion of the first subscription.
On 25 February 2021, the Company announced the novation of the subscription agreement with One Nine Two Pte Limited in favour of Sitius Limited ("Sitius"), an investment vehicle wholly owned by Dr David vonRosen. On the same date, ICJL also entered into an agreement with Sitius to assign 30 million of its remaining subscription rights to 60 million new ordinary shares in the Company at an exercise price of 10p per share. ICJL and Sitius Limited completed their subscriptions to these shares, following the publication of the Company's Prospectus on 17 March, raising gross proceeds of GBP6.0 million, net GBP5.6 million.
ICJL has also transferred a warrant to Sitius to subscribe for 15 million new ordinary shares in the Company at an exercise price of 25p. This is in addition to the warrant for 40 million new shares that were novated to Sitius from 192 Pte, with an exercise price of 50p. ICJL retains 35 million shares under warrant at an exercise price of 25p. In the event that ICJL and Sitius elect to exercise their warrants in full, the Company would raise a further GBP32.5 million.
The ICJL, 192 Pte and Sitius investments have very significantly strengthened the Company's balance sheet and its ability to accelerate and support the growth of its core business in the near term. The Board will continue to pursue future growth and expansion initiatives targeting opportunities that deliver tangible long-term shareholder value.
Enhanced leadership
The Company has recently announced the formation of a Business Advisory and Intelligence Group, which comprises members from a broad background of educators, careers education specialists and employers from both the UK and abroad. Under its Chair, Lord McNicol of West Kilbride, the Group will meet quarterly and advise the Company on the latest global thinking surrounding careers guidance as well as providing a testbed for new content.
Well positioned to grow in India
The pace of progress relating to developments in India has continued to accelerate since the year end. The Company entered into a five-year exclusive partnership agreement with Veative and the National Independent Schools Alliance ("NISA"), India's largest governing body for budget private educational institutions. This agreement will see all parties execute an implementation and rollout schedule that will result in Dev Clever's Launchyourcareer.com platform being utilised by NISA as the platform-of-choice to deliver a minimum standard of career guidance across its affiliated schools in India. NISA represents over 70,000 budget private schools in India, attended by c.13 million students.
The partnership will see Dev Clever launch its careers education platform as both a business-to-business subscription model for NISA affiliated schools and a direct-to-consumer subscription for pupils. This direct-to-consumer subscription model will provide extended functionality and additional access to careers development content out of formal school hours and at students' homes.
The Company believes that the partnership will provide the platform for further growth in the Indian market with the opportunity to extend its offer to the wider Indian budget private sector representing over 230,000 further establishments.
New contract
Dev Clever recently executed another material EdTech services contract. The details of this comprehensive partnership agreement are currently subject to an NDA, which expires when this innovative proposition goes live for general availability, which is expected to be in the second half of the 2021 calendar year.
Summary
FY 2020 has been a year of growth as the Company's roadmap of placing its core Educate platforms, Launchyourcareer.com and VICTAR VR, started to gain tangible momentum. The management team is confident that the business' comprehensive and ever-growing EdTech product portfolio can obtain substantial market share particularly in the leading and highly significant Edtech markets of the US and India. This will undoubtedly be further fuelled by the pending innovative launch of the Company's direct-to-consumer subscription model.
The innovative and material equity funding received primarily from Intrinsic and Sitius has provided a meaningful capital base to further accelerate the Group's ambitious growth plans. As the Group expand in India, it paves the way for Launchyourcareer.com to not only support pupils in understanding their career aspirations but also provides them with meaningful content resources to realise their ambitions. This, alongside the potential opportunity to develop or acquire further content resource, will further add to the expertise of our resource and careers' platforms. I look forward to updating shareholders and the market on additional progress in India over the course of 2021.
The business' overall momentum continues to keep accelerating and management remains highly confident that with a strong product, partner and capital line up combined with a very focused implementation and delivery program, the business can smartly expand its market share in what is proving to be one of the most exciting, rapidly evolving and fastest growing market segments around the world. The Group will take advantage of complementary growth opportunities that further strengthens its end-to-end client solutions and at the same time accelerate developments in key markets when opportunities arise.
Finally, and on behalf of the entire Board, I would like to thank our clients, stakeholders and all our employees for their unwavering support and commitment during these challenging times for all.
Chris Jeffries
Chairman and Chief Executive Officer
26 March 2021
Chief Financial Officer's Review
Dev Clever Holdings Plc comprises a holding company, Dev Clever Holdings Plc, its trading subsidiary, DevClever Limited and its non-trading subsidiary, Phenix Digital Limited. Phenix Digital was acquired on 13 March 2020 and its on-going trade and operations were transferred to Dev Clever Limited on 1 April 2020. As a result of this transfer, DevClever Limited is the only trading subsidiary within the Group. The transfer of trade also results in the investment in Phenix Digital being reclassified as goodwill in the statement of financial position for the holding company, Dev Clever Holdings plc.
The Company and consolidated financial statements have been prepared on the basis outlined in note 2 basis of consolidation. Following the transfer of the trade and operations of Phenix Digital, including the transfer of all staff and the novation of all sales contracts, to DevClever Limited, DevClever Limited remains the only trading subsidiary and trading entity within the Group. The operating expenses reported within the Group also reflect the regulatory and compliance costs arising from the maintenance of the listing, which are borne within the holding company. The Directors believe that these increased costs will offset over time through the accelerated growth that will arise from the capital accessed by the Group through its listing.
Revenues in each of the Company's operating segments are comprised of development and set-up fees, alongside licence, subscription, hosting and support fees. Total revenue for the year at GBP1.25 million (2019: GBP0.5 million) represents an increase of 161% reflecting both the establishment of a sales channel for the Group's core Educate platform Launchyourcareer.com and VICTAR VR and an uplift within Agency Services supported through the acquisition of Phenix Digital. Revenue growth has been adversely impacted in the period by the Covid-19 virus that caused significant disruption to both the education and hospitality sectors. This resulted in orders being both delayed and cancelled across both the Educate and Agency Services. Despite this disruption, the value of confirmed orders and letters of intent received totalled GBP2.4 million (2019: GBP0.5 million) and was in line with management expectations for the period.
Gross margin of GBP0.55 million (2019: loss GBP0.04 million) reflects the increased weighting towards higher margin licence fee income within the Educate division and revised pricing strategy within Agency Services combined with the more effective utilisation of internal and external development resource.
The overall EBITDA loss was GBP0.9 million compared to a loss of GBP1.0 million in the prior period. There was no impairment of capitalised software costs in the period (2019: GBP0.17 million), with development activity being focused on the on-going enhancement and extension of the Launchyourcareer.com and VICTAR VR careers education platform. It also includes charges for share based payments of GBP0.14 million (2019: GBP0.11 million) arising from employee share options and advisor warrants issued in the period. Costs associated with fund raising activities, totalling GBP0.13 million (2019: GBP0.06 million), have been offset within share premium. In the prior year, one-off costs of GBP0.11 million relating to the IPO had been recognised in the income statement.
The loss before tax was GBP1.06 million compared to GBP1.07 million in the prior period. The loss reflects the Group's on-going investment in the productisation of its software platforms, strengthening of the executive and senior management teams and establishment of a central marketing function. The Group is focused on delivering the significant revenue opportunities now open to the Company across the UK, US and India.
Overall cash inflow in the year was GBP0.54 million (2019: GBP0.42 million) and reflects net financing proceeds of GBP2.60 million (2019: GBP1.36 million). Operating cash flow, adjusting for the capitalisation of software development reported within investing activities was a net outflow of GBP1.87 million (2019: GBP0.90 million), reflecting on-going investment in the Launchyourcareer.com and VICTAR VR careers education platform. These have been customised for the North American market in the period, with work commencing on the customisation for the Indian market, scheduled to go live by April 2021. The business has increased investment in the executive and senior management teams as well as establishing a central marketing team to drive sales across all geographies. The Board is confident that the Group is well placed to take advantage of the opportunities that will arise as the world recovers from the Covid pandemic and, in particular, the demand for both remote and immersive learning as well as career focussed education.
The Group had cash reserves of GBP1.03 million (2019: GBP0.50 million) at the period end. In January 2021, the Group raised a further GBP2.0 million gross proceeds, GBP1.9 million net, through the receipt of the second tranche of its subscription agreement with Intrinsic Capital (Jersey) Limited. In February 2021 the Group raised a further GBP4.0 million gross proceeds, GBP3.8 million net, through the initial tranche of a new subscription agreement with One Nine Two Pte Limited. The Group has subsequently given approval for One Nine Two Limited to novate the remaining parts of its subscription agreement in favour of Sitius Limited, an investment vehicle wholly owned by Dr David vonRosen.
The Group also gave permission for Intrinsic Capital (Jersey) Limited to assign to Sitius Limited 30 million of its remaining subscription rights to 60 million new ordinary shares in the Company at an exercise price of 10p per share. ICJL and Sitius Limited completed their subscriptions to these shares, following the publication of the Company's Prospectus on 17 March, raising gross proceeds of GBP6.0 million, net GBP5.6 million.
Nicholas Ydlibi
Chief Financial Officer
26 March 2021
Audit Report
The Group's auditor has reported on the accounts and its reports are unqualified. The Independent Auditor's Report on the Group financial statements is set out in full on pages 43 to 48 of the 2020 Annual Report and Accounts.
Directors' Responsibilities Statement
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the financial statements in accordance with International Financial Reporting Standards (IFRSs) in conformity with the requirements of the Companies Act 2006. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company and of the profit and loss of the Group for that period. In preparing these financial statements, International Accounting Standard 1 requires that the Directors are required to:
- Properly select and apply suitable accounting policies;
- Present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
- Provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and
- Make an assessment of the Group and Company's ability to continue as a going concern.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Website publication
The Directors are responsible for ensuring the annual report and the financial statements are made available on a website. Financial statements are published on the Group and Company's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Group and Company's website is the responsibility of the Directors. The Directors' responsibility also extends to the on-going integrity of the financial statements contained therein.
Directors' responsibilities pursuant to DTR4 (Disclosure and Transparency Rules)
The Directors confirm to the best of their knowledge:
- The Group and Company financial statements have been prepared in accordance with lFRSs in conformity with the requirements of the Companies Act 2006and Article 4 of the IAS Regulation and give a true and fair view of the assets, liabilities, financial position and profit and loss of the group and company included in the consolidation taken as a whole; and
- The annual report includes a fair review of the development and performance of the business and financial position of the Group and Company together with a description of the principal risks and uncertainties.
Approved on behalf of the Board of Directors on 26 March 2021
NAR Ydlibi
Chief Financial Officer
C onsolidated Statement of Comprehensive Income
Hot Features
Premium
Note Year ended Year ended
31 October 31 October
2020 2019
GBP GBP
Continuing operations
Revenue 4 1,254,734 480,585
Cost of sales 5 (703,607) (521,782)
Gross profit / (loss) 551,127 (41,197)
Administrative expenses 5 (1,637,728) (999,660)
Loss from operations (1,086,601) (1,040,857)
Fair value gain on financial assets
at fair value through profit and
loss 14 77,518 -
Finance income 8 240 811
Finance costs 8 (47,411) (24,601)
Loss before tax (1,056,254) (1,064,647)
Tax credit 10 118,557 45,016
Loss for the period from continuing
operations (937,697) (1,019,631)
Other comprehensive income:
Items not reclassified to profit
or loss in subsequent periods:
Total other comprehensive income - -
for the period
Total comprehensive income for the
period attributable to shareholders (937,697) (1,019,631)
============ ============
Earnings per share
Basic (pence per share) 11 (0.22) (0.29)
Diluted (pence per share) 11 (0.22) (0.29)
Adjusted basic (pence per share) 11 (0.19) (0.23)
Adjusted diluted (pence per share) 11 (0.19) (0.23)
The notes to the consolidated financial statements form an integral part of these financial statements.
Consolidated Statement of Financial Position
Note As at 31 As at 31
October 2020 October 2019
GBP GBP
Non-current assets:
Goodwill 12 240,145 -
Intangible assets 12 818,723 157,673
Property, plant & equipment 13 105,481 41,706
Financial assets at fair value through
profit and loss 14 138,653 1,125
---------------------- --------------
1,303,002 200,504
Current assets:
Inventories 2,650 6,200
Trade and other receivables 16 1,132,018 156,614
Cash and cash equivalents 17 1,032,473 496,707
---------------------- --------------
2,167,141 659,521
Total assets 3,470,143 860,025
Current liabilities:
Trade and other payables 18 (345,071) (135,481)
Deferred income 18 (210,145) (603)
Loans and borrowings, amounts falling
due within one year 19 (90,583) (47,727)
---------------------- --------------
(645,799) (183,811)
+Non-current liabilities:
Loans and borrowings, amounts falling
due after more than one year 19 (318,681) (89,847)
Deferred tax 20 (25,866) (16,464)
---------------------- --------------
(344,547) (106,311)
Total liabilities (990,346) (290,122)
Net assets 2,479,797 569,903
====================== ==============
Share capital 22 4,712,197 3,884,017
Merger reserve 22 (2,499,900) (2,499,900)
Share premium reserve 22 1,977,447 246,246
Other Reserves 22 323,237 110,212
Retained earnings 22 (2,033,184) (1,170,672)
Total equity to shareholders 2,479,797 569,903
====================== ==============
The notes to the consolidated financial statements form an integral part of these financial statements.
This report was approved and authorised for issue by the Board of Directors on 26 March 2021 and were signed on their behalf by:
CM Jeffries
Chairman and Chief Executive Officer
Company Statement of Financial Position
Note As at 31 As at 31
October 2020 October 2019
GBP
Non-current assets:
Goodwill 12 183,928 -
Investments 15 2,500,000 2,500,000
-------------- --------------
2,683,928 2,500,000
Current assets:
Trade and other receivables 16 3,572,882 1,425,472
Cash and cash equivalents 17 938,806 325,374
-------------- --------------
4,511,688 1,750,846
Total assets 7,195,616 4,250,846
Current liabilities:
Trade and other payables 18 (77,396) (72,112)
-------------- --------------
(77,396) (72,112)
Non-Current Liabilities:
Loans and borrowings 19 (250,882) -
(250,882) -
Total liabilities (328,278) (72,112)
Net assets 6,867,338 4,178,734
-------------- --------------
Share capital 22 4,712,197 3,884,017
Share premium reserve 22 1,977,447 246,246
Other reserves 22 323,237 110,212
Retained earnings 22 (145,543) (61,741)
Total equity to shareholders 6,867,338 4,178,734
-------------- --------------
The Company has taken advantage of section 408 of the Companies Act 2006 and consequently a profit and loss account has not been presented for the Company. The Company's loss for the financial period was GBP162,585 (2019: loss GBP61,741).
The notes to the Company financial statements form an integral part of these financial statements.
This report was approved and authorised for issue by the Board of Directors on 26 March 2021 and were signed on their behalf by:
CM Jeffries
Chairman and Chief Executive Officer
Company registration No: 11589976
Consolidated Statement of Changes in Equity
Share Merger Share Other Retained Total
capital reserve premium reserves earnings
reserve
Note 22 Note 22 Note 22 Note 22 Note 22
GBP GBP GBP GBP GBP GBP
Balance at 01 November
2018 100 - - - (151,041) (150,941)
Loss after taxation
for the period - - - - (1,019,631) (1,019,631)
---------- ------------ ---------- ---------- ------------ ------------
Total comprehensive
loss for the period - - - - (1,019,631) (1,019,631)
Transactions with
owners
Acquired on acquisition
of subsidiary 2,499,900 (2,499,900) - - - -
Pre IPO, IPO and subscription 1,013,000 - - - - 1,013,000
Conversion of convertible
loan facility 220,000 - - - - 220,000
Issue of warrants 22,900 - - - - 22,900
Placing 128,117 - 246,246 - - 374,363
Share based payments - - - 110,212 - 110,212
3,883,917 (2,499,900) 246,246 110,212 - 720,844
Balance at 31 October
2019 3,884,017 (2,499,900) 246,246 110,212 (1,170,672) 569,903
---------- ------------ ---------- ---------- ------------ ------------
Adoption of IFRS 16
leases (3,598) (3,598)
Loss after taxation
for the period - - - - (937,697) (937,697)
Total comprehensive
loss for the period - - - - (941,295) (941,295)
Transactions with
owners
Issue of ordinary
shares 828,180 - 1,866,663 - - 2,694,843
Expenses incurred
on issue of ordinary
shares - (135,462) - - (135,462)
Share-based payments - - - 140,177 - 140,177
Recycle of share-based
payments on exercise - - - (78,783) 78,783 -
Equity component of
compound financial
instrument - - - 151,631 - 151,631
828,180 - 1,731,201 213,025 78,783 2,851,189
Balance at 31 October
2020 4,712,197 (2,499,900) 1,977,447 323,237 (2,033,184) 2,479,797
========== ============ ========== ========== ============ ============
- Share capital is the amount subscribed for shares at nominal value
- The merger reserve relates to the adjustment required to account the acquisition of DevClever Limited as a reverse acquisition
- Share premium reserve is the additional amount of funds received in excess of the nominal value of the shares and recorded net of associated transaction costs
- Other reserves comprise (i) share-based payments reserve in respect of share-based payments arising on the grant of employee share options and advisor warrants in accordance with IFRS 2 (ii) the equity component of the director's loan, which has been treated as a compound financial instrument
- Retained earnings represents the cumulative earnings of the Group attributable to equity shareholders.
The notes to the consolidated financial statements form an integral part of these financial statements.
Company Statement of Changes in Equity
Share Share Other Retained Total
capital premium reserves earnings
reserve
Note 22 Note 22 Note 22 Note 22
GBP GBP GBP GBP GBP
On incorporation on - - - - -
26 September 2018
Loss after taxation
for the period - - - (61,741) (61,741)
---------- ---------- ---------- ---------- ----------
Total comprehensive
loss for the period - - - (61,741) (61,741)
Transactions with
owners
Shares issued on acquisition
of Dev Clever Limited 2,500,000 2,500,000
Pre IPO, IPO and subscription 1,013,000 - - - 1,013,000
Conversion of convertible
loan facility 220,000 - - - 220,000
Issue of warrants 22,900 - - - 22,900
Placing 128,117 246,246 - - 374,363
Share based payments - - 110,212 - 110,212
3,884,017 246,246 110,212 - 4,240,475
Balance at 31 October
2019 3,884,017 246,246 110,212 (61,741) 4,178,734
---------- ---------- ---------- ---------- ----------
Loss after taxation
for the period - - - (162,585) (162,585)
---------- ---------- ---------- ---------- ----------
Total comprehensive
loss for the period - - - (162,585) (162,585)
Transactions with
owners
Issue of ordinary
shares 828,180 1,866,663 - - 2,694,843
Expenses incurred
on issue of ordinary
shares (135,462) - - (135,462)
Share-based payments - - 140,177 140,177
Recycle of share-based
payments on exercise - - (78,783) 78,783 -
Equity component of
compound financial
instrument - - 151,631 - 151,631
828,180 1,731,201 213,025 78,783 2,851,189
Balance at 31 October
2020 4,712,197 1,977,447 323,237 (145,543) 6,867,338
========== ========== ========== ========== ==========
- Share capital is the amount subscribed for shares at nominal value
- Share premium reserve is the additional amount of funds received in excess of the nominal value of the shares and recorded net of associated transaction costs
- Other reserves comprise (i) share-based payments reserve in respect of share-based payments arising on the grant of employee share options and advisor warrants in accordance with IFRS 2 (ii) the equity component of the director's loan, which has been treated as a compound financial instrument
- Retained earnings represents the cumulative earnings of the Group attributable to equity shareholders.
The notes to the Company financial statements form an integral part of these financial statements.
Consolidated Statement of Cash Flows
Year ended Year ended
31 October 31 October
2020 2019
GBP GBP
Cash flows from operating activities:
Loss before tax (1,056,254) (1,064,647)
Adjustments for:
Depreciation 55,808 14,692
Amortisation of intangibles 99,747 11,207
Impairment of intangibles - 174,085
Fair value gain on financial assets (77,518) -
through profit and loss
Finance Income (240) (811)
Finance costs 47,411 24,601
Share-based payment expenses 140,177 110,212
Decrease / (increase) in inventories 3,550 (6,200)
Increase in trade and other
receivables (836,562) (37,220)
Increase / (decrease) in trade and
other payables 318,704 (18,723)
Income tax paid (14,700) -
Income tax received - 96,057
----------------------- ------------
Net cash flows used in operating
activities (1,319,877) (696,747)
Cash flows from investing activities:
Payments to acquire property, plant
and equipment (33,584) (26,642)
Payments to develop intangible assets (686,138) (211,488)
Payments to acquire investments (60,010) (1,125)
Acquisition of subsidiary undertaking (100,000) -
----------------------- ------------
Net cash flows used in investing
activities (879,732) (239,255)
Cash flows from financing activities
:
Net proceeds from issue of equity 2,454,313 1,421,362
Proceeds from borrowings 400,000 -
Repayment of borrowings (68,592) (31,818)
Finance lease payments on right (26,713) -
of use assets
Interest received 240 811
Interest paid (23,873) (30,335)
Net cash flows from financing activities 2,735,375 1,360,020
Net increase in cash and cash equivalents
in the year 535,766 424,018
Cash and cash equivalents at beginning
of period 496,707 72,689
----------------------- ------------
Cash and cash equivalents at end
of period 1,032,473 496,707
======================= ============
Cash and cash equivalents 1,032,473 496,707
======================= ============
Non-cash movements not disclosed within the consolidated statement
of cash flows:
Consideration shares issued on acquisition of Phenix Digital
Limited GBP83,928. Further details of the total consideration
paid for Phenix Digital is presented in note 28 Business combination.
Equity component of the convertible loan GBP151,631. Further
details of the treatment of the convertible loan is presented
in note 19 Loans and borrowings
The notes to the consolidated financial statements form an integral part of these financial statements.
Company Statement of Cash Flows
Year ended Year ended
31 October 31 October
2020 2019
GBP GBP
Cash flows from operating activities:
Loss before tax (162,585) (61,741)
Adjustments for:
Impairment of loan to subsidiary 80,111 -
undertaking
Finance income (91,704) (52,431)
Finance costs 23,654 -
Share-based payment expenses 140,177 110,212
Increase in trade and other
receivables (224,485) (18,654)
Increase in trade and other payables 96,862 61,013
------------- ------------
Net cash flows (used in)/from operating
activities (137,970) 38,399
Cash flows from investing activities:
Loans to subsidiary undertakings (2,049,475) (1,233,000)
Repayments of loan from subsidiary
undertaking 46,435 98,596
Acquisition of subsidiary (100,000) -
------------- ------------
Net cash flows used in investing
activities (2,103,040) (1,134,404)
Cash flows from financing activities
:
Net proceeds from issue of equity 2,454,313 1,421,362
Proceeds from borrowings 400,000 -
Interest received 129 17
------------- ------------
Net cash flows from financing activities 2,854,442 1,421,379
Net increase in cash and cash equivalents
in the year 613,432 325,374
Cash and cash equivalents at beginning 325,374 -
of period
------------- ------------
Cash and cash equivalents at end
of period 938,806 325,374
============= ============
Cash and cash equivalents 938,806 325,374
============= ============
Non-cash movements not disclosed within the consolidated statement
of cash flows:
Consideration shares issued on the acquisition of Phenix Digital
Limited GBP83,928. Further details of the total consideration
paid for Phenix Digital is presented in note 28 Business combination.
Equity component of the convertible loan GBP151,631. Further
details of the treatment of the convertible loan are presented
in note 19 Loans and borrowings.
The notes to the Company financial statements form an integral part of these financial statements.
Notes to the Financial Statements
1 General Information
Dev Clever Holdings Plc ("the Company") is publicly traded
on the Standard List of the London Stock Exchange. The Company
is incorporated and domiciled in England and Wales. Its registered
office is Ventura House, Ventura Park Road, Tamworth, Staffordshire,
B78 3HL and the registered number is 11589976.
The Company is the parent company of Dev Clever Limited ("DevClever")
and Phenix Digital Limited. Dev Clever is incorporated and
domiciled in England and Wales with the same registered office
as the Company. Phenix Digital Limited is incorporated and
domiciled in England and Wales with the registered office
being Creative Industries Centre, Wolverhampton Science Park,
Wolverhampton, West Midlands, WV10 9TG.
The Group is principally engaged in the development of immersive
software products that deliver customer engagement, through
both its careers platform Launchyourcareer.com, supported
by VICTAR VR, and through its Agency Services offering.
2 Summary of significant accounting policies
The principal accounting policies applied in the preparation
of these consolidated financial statements are set out below.
These policies have been consistently applied to all the
years presented, unless otherwise stated.
Basis of preparation
These consolidated financial statements have been prepared
on a going concern basis under the historical cost convention,
and in accordance with International Financial Reporting
Standards ("IFRS") in conformity with the requirements of
the Companies Act 2006.
The preparation of financial statements requires management
to exercise its judgement in the process of applying accounting
policies. The areas involving a higher degree of judgement,
or areas where assumptions and estimates are significant
to the financial information, are disclosed in note 3.
The presentational and functional currency of the Company
is Sterling. Results in these financial statements have been
prepared to the nearest GBP1.
Initial business combination
IFRS 3 Business Combination requires that a transaction in
which a company with substantial operations ('operating company')
arranges to be acquired by a shell company should be analysed
to determine whether it is a business combination. The original
acquisition of DevClever Limited by Dev Clever Holdings in
a share for share exchange of the entire share capital of
both entities, was indicative of DevClever Limited being
the accounting acquiror. As Dev Clever Holdings had no other
assets or liabilities other than its holding in DevClever
Limited, it did not satisfy the definition of a business.
As a result, the acquisition did not meet the definition
of a business combination under IFRS 3 and fell outside the
scope of IFRS 3. The Directors considered the requirements
of IFRS 10 for the production of consolidated accounts through
the application of the reverse acquisition methodology but
without the need for recognising goodwill. As a result:
* the consolidated financial statements of the legal
parent, Dev Clever Holdings plc have been prepared as
a continuation of the financial statements of the
operating company, DevClever Limited. The opening net
assets of Dev Clever Limited were recognised at book
value and a merger reserve has been established to
write down the nominal value of equity in Dev Clever
Holdings, at the time of the acquisition, to the
nominal value of the share capital in Dev Clever
Limited, at that time.
* the opening net assets of Dev Clever Limited have
been recognised at book value.
* a merger reserve has been established to write down
the nominal value of equity in Dev Clever Holdings,
at the time of the acquisition, to the nominal value
of the share capital in Dev Clever Limited, at that
time. The merger reserve of GBP2,499,900 represents
the difference between the nominal value of equity in
Dev Clever Holdings of GBP2,500,000 and the nominal
value of equity in Dev Clever Limited of GBP100.
Basis of consolidation
Subsequent to the initial establishment of the Group the
acquisition method of accounting is used to account for the
acquisition of subsidiaries by the Group.
Subsidiaries are entities over which the Group has the power
to govern the financial and operating policies so as to obtain
benefits from its activities, generally accompanied by a
shareholding giving rise to the majority of voting rights.
The existence and effect of potential voting rights that
are currently exercisable or convertible are considered when
assessing whether the Group controls another entity. Subsidiaries
are fully consolidated from the date on which control is
transferred to the group. They are deconsolidated from the
date on which control ceases. The Group re-assesses whether
or not it controls an investee if facts and circumstances
indicate that there are changes to one or more of the elements
of control.
The cost of an acquisition is measured as the fair value
of the assets given, equity instruments issued, liabilities
incurred or assumed at the date of exchange, plus costs directly
attributable to the acquisition. Identifiable assets acquired,
and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at
the acquisition date, irrespective of the extent of any non-controlling
interest. The excess of the cost of acquisition over the
fair value of the Group's share of the identifiable net assets
acquired is recorded as goodwill.
The consolidated financial statements incorporate those of
Dev Clever Holdings plc and its subsidiaries DevClever Limited
and Phenix Digital Limited. All financial statements are
made up to 31 October 2020. Where necessary, adjustments
have been made to the financial statements of subsidiaries
to bring the accounting policies used into line with those
used by other parts of the Group.
In the parent company financial statements, investments in
subsidiaries are accounted for at cost less impairment. Where
the trade and assets of a subsidiary have been transferred
to another subsidiary within the Group, the investment held
by the parent company is re-categorised as goodwill.
The Dev Clever Holdings plc and DevClever Limited accounts
have been prepared for the year ended 31 October 2020. The
Phenix Digital Limited accounts have been consolidated for
the period from the date of acquisition, on 13 March 2020,
to 31 October 2020.
All intra-group transactions, balances and unrealised gains
on transactions between group companies are eliminated on
consolidation. Unrealised losses are also eliminated unless
the transaction provides evidence of an impairment of the
asset transferred.
Adoption of new and revised standards
The Company has adopted all recognition, measurement and
disclosure requirements of IFRS in conformity with the requirements
of the Companies Act 2006 including any new and revised standards
and Interpretations of IFRS in effect for financial periods
commencing on or after 1 January 2019. Within these financial
statements, the Company has adopted the following standards
and amendments for the first time:
IFRS 16 - Leases
Effective from 1 November 2019, the Group adopted IFRS 16
- Leases ("IFRS 16"), which replaces IAS 17 - Leases and
related interpretations. The Group adopted the requirements
of IFRS 16 - Leases retrospectively from 1 November 2019
but has not restated comparatives for the 2019 reporting
period as permitted under the transition provisions in the
standard. The reclassifications and the adjustments arising
from the new leasing rules are therefore recognised in the
opening balance sheet on 1 November 2019.
On adoption of IFRS 16, the Group recognised lease liabilities
in relation to leases which had previously been categorised
as operating leases. These liabilities were measured at the
present value of the remaining lease payments. The change
in policy increased right-of-use assets by GBP84,249 and
lease liabilities by GBP87,847.
Under IFRS 16, the Group accretes interest on its lease liabilities.
At 31 October 2020, the carrying value of these lease liabilities
amounted to GBP61,135 with GBP29,205 of this balance shown
as short-term lease liabilities and the remaining portion
of GBP31,930 reflected under non-current liabilities
The property lease asset, reported as a right of use asset
within Property, Plant and Equipment, is depreciated on a
straight-line basis over the remaining life of lease.
Other than as described above, there has been no material
impact on the financial statements as a result of the adoption
of the new and amended standards.
Standards which are in issue but not yet effective
New and amended standards and interpretations issued but not yet effective or not yet endorsed for the financial year beginning 1 November 2019 and not yet early adopted.
At the date of authorisation of these financial statements, the Group and Company have not applied the following new and revised IFRSs that have been issued but are not yet effective and (in some cases) have not yet been endorsed. The Group and Company intend to the adopt these standards, if applicable, when they become effective.
Standard Description Effective date
for annual periods
beginning on or
after
Amendments to References 01-Jan-20
to Conceptual Framework in
IFRS Standards
--------- ----------------------------------- --------------------
IFRS 3 Amendments to IFRS 3 "Business 01-Jan-20
Combinations" to clarify
the definition of a business
--------- ----------------------------------- --------------------
IAS 1 Amendments to IAS 1, "Presentation 01-Jan-20
of Financial Statements"
regarding the definition
of "material"
--------- ----------------------------------- --------------------
IAS 8 Amendments to IAS 8, "Accounting 01-Jan-20
Policies, Changes in Accounting
Estimates and errors" regarding
the definition of "material"
--------- ----------------------------------- --------------------
The Group has not early adopted any of the above standards.
Going concern
As part of their going concern review the Directors have
followed the guidelines published by the Financial Reporting
Council entitled "Guidance on Risk Management and Internal
Control and Related Financial and Business Reporting".
The Directors have prepared detailed financial forecasts
and cash flows looking at least 12 months from the date of
approval of these financial statements. In developing these
forecasts, the Directors have made assumptions based upon
their view of the current and future economic conditions
that will prevail over the forecast period. To pressure test
the resilience of the cash position, the directors only took
into consideration incremental revenues that have already
been contractually committed, with no uplift in sales recognised
for the increased investment in sales and marketing resource
built into the plan for existing markets within the UK and
US. No revenues were recognised for the forthcoming launch
the Group's careers' education platform in India, although
the forecast also took into consideration both the committed
and uncommitted costs associated with the launch. The approach
adopted by the Directors also mitigates against the possible
risk of on-going disruption as a result of the Covid pandemic.
Due consideration has also been given to the ability to raise
funds on the open market in respect of the listing on the
standard list of the London Stock Exchange and the timing
as to when such funds will be received.
On 25 January 2021 the Group raised gross proceeds of GBP2.0
million, net GBP1.9 million, through the issuance of 20 million
new ordinary shares of 1p to Intrinsic Capital (Jersey) Limited
at a subscription price of 10p per share. The subscription
forms the second tranche of the subscription agreement entered
into by the Company with Intrinsic on 13 May 2020.
On 2 February 2021 the Group announced an equity subscription
agreement with One Nine Two Pte Limited. The agreement provided
for an initial subscription of 20 million new ordinary shares
in Dev Clever at a subscription price of 20p per share to
raise gross proceeds of GBP4.0 million, net GBP3.8 million,
conditional upon approval at a general meeting of the Company
to an increase in the authority granted to the Directors
to allot shares and disapply pre-emption rights. The agreement
provided for a further subscription of 20 million ordinary
shares at an exercise price of 30 pence per share to raise
gross proceeds of GBP6.0 million to be completed automatically
once the share price of the Group closed at or above 34p
per share for a period of 5 consecutive days. The further
subscription is valid for a period of nine months from the
date of completion of the first subscription. The Company
also granted One Nine Two Pte Limited a warrant over 40 million
new ordinary shares at an exercise price of 50p per share,
subject to completion of the further subscription. The warrant
is exercisable in whole or in part at any time until the
second anniversary of the completion of the first subscription.
Following the passing of the relevant resolution at the general
meeting, the Group received the proceeds of the initial subscription
on 22 February.
On 25 February, the Company announced the novation of the
subscription agreement with One Nine Two Pte Limited in favour
of Sitius Limited, an investment vehicle wholly owned by
Dr David von Rosen. On the same date, Intrinsic Capital (Jersey)
Limited entered into an agreement with Sitius to assign 30
million of its remaining subscription rights to 60 million
new ordinary shares in the Company at an exercise price of
10p per share. ICJL and Sitius Limited completed their subscriptions
to these shares, following the publication of the Company's
Prospectus on 17 March, raising gross proceeds of GBP6.0
million, net GBP5.6 million.
Based on their consideration of these matters, the Directors
believe the Group and Company to be a going concern. In response
to the significant impact that the coronavirus pandemic is
having on the global economy, the Group has reviewed the
potential impact upon on its business and revenue generation.
The Directors anticipate that whilst sales will continue
to be restricted during and immediately after lockdown periods,
the current pandemic presents a long-term opportunity as
education embraces the need to adopt alternative ways of
learning, including the adoption of remote and immersive
technology. The Group also remains well placed, through its
Engage platform, to take advantage of return to normality
as the hospitality sector looks to encourage customers back
into establishments once restrictions have eased. There is
also the scope to adjust levels of expenditure in the longer
term, if required.
In light of the above projections, the Directors are confident
that the Company has sufficient working capital to honour
all of its obligations to creditors as and when they fall
due. In reaching this conclusion, the Directors have considered
the forecast cash headroom, the resources available to the
Company and the potential impact of changes in forecast growth
and other assumptions, including the potential to avoid or
defer certain costs and to reduce discretionary spend as
mitigating actions in the event of such changes. Accordingly,
the Directors continue to adopt the going concern basis in
preparing these consolidated financial statements.
Revenue recognition
Revenue comprises the fair value of the consideration received
or receivable for the sales of goods of services in the ordinary
course of the Company's activities. Revenue is measured at
as the fair value of the consideration received or receivable
and is shown net of value added taxes, rebates and discounts.
Under IFRS 15 - Revenue from Contracts with Customers, five
stages of revenue recognition have been applied to the Group's
revenue:
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance
obligations in the contract;
Step 5: Recognise revenue when (or as) the entity satisfies
a performance obligation
Revenue is recognised to the extent that it is probable that
the economic benefits will flow to the Group and that the
revenue can be reliably measured and specific criteria have
been met for each of the group's activities as described
below. The Company bases its estimates on historical results
taking into consideration the type of customer, the type
of transaction and the specifics of each arrangement.
Commercial development projects, customisation of software
and set up fees
Client-driven development entails direct co-operation between
the development team and the client towards a client-defined
goal. Such agreements are individually evaluated to determine
if revenue is recognised at a point in time or over time
based on the delivery of contractual milestones that are
aligned to the satisfaction of performance obligations within
the underlying contract / project brief.
Software subscription fees
Software is licenced to customers via subscription on fixed
term agreements. Where the client has obtained control of
the licence and the ability to use and obtain substantially
all the benefits from it, revenue is recognised. The client
obtains control when a contract is agreed, the licence delivered,
and the client has the right to use it.
Where a client subscribes to a software licence but the Company
continues to maintain control of the on-going hosting, support,
maintenance and upgrade activity, revenue is recognised on
time elapsed and thus rateably over the term of the agreement.
These customers simultaneously receive and consume the benefit
of their software licence as we perform.
Support, maintenance and hosting contracts
Revenue is recognised in accordance with the performance
obligations contained with the associated support, maintenance
and hosting agreement. Revenue is typically recognised based
on time elapsed and thus rateably over the term of the agreement.
Under our standardised support agreement, our performance
obligation is to stand ready to provide technical product
support and unspecified updates, upgrades and enhancements
on a when-and-if-available basis. Our customers simultaneously
receive and consume the benefit of these support services
as we perform.
Operating profit
Operating profit comprises the Company's revenue for the
provision of services, less the costs of providing those
services and administrative overheads, including depreciation
and amortisation of the Company's non-current assets.
Segmental reporting
Operating segments are reported in a manner consistent with
the internal reporting provided to the chief operating decision-maker
(CODM). The CODM, who is responsible for allocating resources
and assessing performance of the operating segments, has
been identified as the Board of Directors that makes strategic
decisions.
A business segment is a group of assets and operations, engaged
in providing products or services that are subject to risks
and returns that are different from those of other operating
segments.
The Board of Directors assess the performance of the operating
segments based on the measures of revenue, gross profit,
operating profit and assets employed.
Finance costs
Finance costs represent the cost of borrowings and are accounted
for on an amortised cost basis in the income statement using
the effective interest rate.
Dividends
Dividends to the Company's shareholders are recognised when
the dividends are approved for payment.
Earnings per share
Earnings per share represents the portion of the Company's
profit / (loss) from continuing operations attributable to
each outstanding share of the Company's ordinary share capital.
Diluted earnings per share represents the portion of the
Company's profit / (loss) from continuing operations attributable
to each outstanding share of the Company's ordinary share
capital after taking into consideration the conversion of
all outstanding employee share options and advisor warrants.
Adjusted earnings per share is an internal management measure
of earnings per share in which the profit / (loss) from continuing
operations has been adjusted to remove the effect of certain
non-operating income and expenses. Management believes that
this measure more accurately reflects the underlying operational
performance of the business and its associated cash flow.
In determining the adjusted earnings per share, management
has removed the costs associated with the Company's IPO of
GBPnil (2019: GBP112,770) and the share-based payments expense
incurred in the period of GBP140,177 (2019: GBP110,212).
Property, plant and equipment
Purchased property, plant and equipment is stated at cost
less accumulated depreciation and any provision for impairment
losses. Cost includes the original purchase price of the
asset and the costs attributable to bringing the asset to
its working condition for its intended use. Depreciation
is charged so as to write off the costs of assets over their
estimated useful lives, on the following bases:
Right of use assets Life of lease Straight line
Computer equipment 1 to 3 years Straight line
Fixtures and fittings 3 to 10 years Straight line
The asset's residual values and useful economic lives are
reviewed by the Directors and adjusted, if appropriate, at
each balance sheet date. An asset's carrying amount is written
down immediately to its recoverable amount if the asset's
carrying amount is greater than its estimated recoverable
value.
Gains and losses on disposals are determined by comparing
the proceeds with the carrying amount and are recognised
within other (losses) or gains in the income statement. When
revalued assets are sold, the amounts included in other reserves
are transferred to retained earnings.
Goodwill
Goodwill arising on the acquisition of a subsidiary undertaking
is determined as the difference between the fair value of
the assets, including any intangible assets arising on acquisition,
and liabilities acquired, and the fair value of consideration
paid. Goodwill, which is classified as an intangible asset
with an indefinite life, is subject to an annual impairment
review.
Further detail of the goodwill arising on the acquisition
of Phenix Digital Limited can be found in note 12 Intangible
assets and note 28 Business combinations.
Goodwill arising on the transfer of trade between subsidiaries
A transfer of trade between subsidiaries is defined as a
type of restructure in which the trade ands operations, including
the transfer of staff and novation of sales contracts, of
one subsidiary is transferred to another subsidiary in the
Group. The transfer of trade and assets is accounted for
within the parent company through the re-categorisation of
the investment in the transferor as goodwill.
Further detail of the goodwill arising in the Company's statement
of financial position and the re-categorisation of its investment
in Phenix Digital as goodwill can be found in note 12 Intangible
assets - Company and note 15 Investments
Intangible assets: Customer Relationships
Customer relationship assets reflect the recognition of future
contractual revenue streams arising on acquisition. The assets
are valued at the net present value of the future contracted
revenue stream, discounted at the Group's cost of capital.
Customer relationship assets are amortised, to cost of sales,
over the remaining life of the contract.
Intangible assets: Internal Use Software - Software Development
An internally generated development intangible asset arising
from the Company's product development is recognised if,
and only if, the Company can demonstrate all of the following:
* the technical feasibility of completing the
intangible asset so that it will be available for use
or sale
* its intention to complete the intangible asset and
use or sell it
* its ability to use or sell the intangible asset
* how the intangible asset will generate probable
future economic benefits
* the availability of adequate technical, financial and
other resources to complete the development and to
use or sell the intangible asset
* its ability to measure reliably the expenditure
attributable to the intangible asset during its
development
Internally generated development intangible assets are amortised,
as a cost of sale, on a straight-line basis over their useful
lives of up to three years. Amortisation is charged to the
income statement from when the asset becomes available to
use.
Where no internally generated intangible asset can be recognised,
development expenditure is recognised as an expense in the
period in which it is incurred.
Impairment of property, plant and equipment, and intangible
assets
At each balance sheet date, the Company reviews the carrying
amounts of its assets to determine whether there is any indication
that those assets have suffered an impairment loss. If any
such indication exists, the recoverable amount of the asset
is estimated in order to determine the extent of the impairment
loss (if any). Where the asset does not generate cash flows
that are independent from other assets, the Company estimates
the recoverable amount of the cash-generating unit to which
the asset belongs.
Recoverable amount is the higher of fair value less costs
to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks
specific to the asset for which the estimates of future cash
flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating
unit) is estimated to be less than it carrying amount, the
carrying amount of the asset (or cash-generating unit) is
reduced to its recoverable amount. In the case of a cash-generating
unit, any impairment loss is charged first to any goodwill
in the cash-generating unit and then pro rata to the other
assets of the cash- generating unit.
Financial assets at fair value through profit or loss
The Group may undertake bespoke development activity for
customers within Agency Services for which it receives equity
shares as part consideration for the services it has provided.
These assets are treated as financial assets at fair value
through profit or loss, being financial assets held for trading
that include investments in unlisted securities.
The Group recognises these assets at fair value, which it
determines based on the degree to which fair value is observable:
* Level 1 fair value measurements being those derived
from inputs other than quoted prices that are
observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived
from prices)
* Level 2 fair value measurements being those derived
from valuation techniques that includes inputs for
the asset or liability that are not based on
observable market data (unobservable inputs).
* Level 3 assets whose fair value cannot be determined
by using observable inputs or measures, such as
market prices or models. Level 3 assets are typically
very illiquid, and fair values can only be calculated
using estimates or risk-adjusted value ranges.
Details of these assets and their valuation are included
in note 14 Assets Held at Fair Value to these financial statements.
Investments
Investments in subsidiaries are carried at cost less accumulated
impairment losses, in the Company's balance sheet. On disposal,
the difference between disposal proceeds and the carrying
amounts of the investments are recognised in profit or loss.
Financial instruments
Financial assets and financial liabilities are recognised
in the consolidated statement of financial position when
the Company becomes party to the contractual provisions of
the instrument. Financial assets are de-recognised when the
contracted rights to the cash flows from the financial asset
expire or when the contracted rights to those assets are
transferred. Financial liabilities are de-recognised when
the obligation specified in the contract is discharged, cancelled
or expired. Financial assets and financial liabilities are
initially measured at their fair value. Transaction costs
attributable to the acquisition of a financial asset or financial
liability are added or deducted from the fair value of the
financial asset or financial liability.
At each reporting date, financial assets are reviewed to
assess whether there is objective evidence of impairment.
If any such evidence exists, impairment loss is determined
and recognised based on the classification of the financial
asset.
Loans and receivables (including trade receivables, prepayments,
deposits and other receivables, cash and bank balances) are
non-derivative financial assets with fixed or determinable
payments that are not quoted on an active market. At each
reporting date subsequent to initial recognition, loans and
receivables are carried at amortised cost using the effective
interest method, unless when there is objective evidence
that the asset is impaired. Impairment is measured as the
difference between the asset's carrying amount and the present
value of estimated future cash flows discounted at the original
effective interest rate. Impairment losses are reversed in
subsequent periods when an increase in the asset's recoverable
amount can be related objectively to an event occurring after
the impairment is recognised, subject to a restriction that
the carrying amount of the asset at the date the impairment
is reversed does not exceed what the amortised cost would
have been had the impairment not been recognised.
(a) Trade and other receivables
Trade and other receivables are recognised at their fair
value. Appropriate provisions for estimated irrecoverable
amounts are recognised in the statement of comprehensive
income when there is objective evidence that the assets are
impaired. Trade and other receivables are shown in note 21
as "loans and receivables".
(b) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand
deposits held on call with banks. Cash and cash equivalents
are shown in note 21 as "loans and receivables".
Financial liabilities and equity
(c) Trade and other payables
Trade payables are recognised at their fair value. Trade
and other payables are shown in note 21 as "other financial
liabilities".
(d) Deferred income
Where the Group invoices a customer for revenues, or receives
payment for those revenues, in advance of the satisfaction
of the associated performance obligation, those revenues
are deferred and are disclosed as deferred income on the
Statement of Financial Position. The revenue is recognised
in the Statement of Comprehensive Income once the associated
performance obligation is satisfied.
(e) Loans and borrowings
After initial recognition, interest bearing loans and borrowings
are subsequently measured at amortised cost using the effective
interest rate method. Gains and losses are recognised in
the income statement when the liabilities are derecognised
as well as through the effective interest rate method (EIR)
amortisation process. Amortised cost is calculated by taking
into account any discount or premium on acquisition and fees
or costs that are an integral part of the EIR. The EIR amortisation
is included in finance costs in the income statement.
(f) Convertible loan note
The convertible loan note agreement, entered into by the
Company on 20 January 2020, has been classified as a compound
financial instrument under IAS 32. The fair value of the
liability component is valued at the net present value of
the contracted future cash flows, discounted at the Company's
cost of borrowing, and is reported within "Loans and borrowings:
amounts falling due in more than one year". Interest imputed
on the liability component is amortised to the statement
of comprehensive income on a straight-line basis over the
life of the instrument. The equity component represents the
residual amount after deducting the amount for the liability
from the value of the funds received and is reported within
"Other reserves". Further details of the loan note can be
found in note 19.
(g) Equity instruments
An equity instrument is any contract that evidences a residual
interest in the assets of an entity after deducting all of
its liabilities. Equity instruments issued by the Company
are recorded at the proceeds received, net of issue costs.
Employee benefits
The Company operates a defined contribution auto-enrolment
pension scheme for employees of the Company. The assets of
the scheme are held separately from those of the Company
in an independently administered fund. The pension costs
charged in the income statement are the contributions payable
to the scheme in respect of the accounting period.
Current tax
The tax currently payable is based on taxable profit or loss
for the year. Taxable profit or loss differs from the profit
or loss for the financial year as reported in the statement
of total comprehensive income because it excludes items of
income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable
or deductible. The Company's liability for current tax is
calculated using tax rates that have been enacted or substantively
enacted by the reporting date.
Where tax credits are received in respect of allowable research
and development expenditure, these are recognised in the
statement of comprehensive income.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable
on differences between the carrying amounts of assets and
liabilities in the financial statements and the corresponding
tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognised for all
taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that future
taxable profits will be available against which deductible
temporary differences can be utilised. Such assets and liabilities
are not recognised if the temporary difference arises from
the initial recognition of other assets and liabilities in
a transaction that affects neither the taxable profit nor
the accounting profit.
Deferred tax is calculated at the tax rates that are expected
to apply in the period when the liability is settled, or
the asset is realised based on tax laws and rates that have
been enacted or substantively enacted at the reporting date.
Deferred tax is charged or credited in the income statement,
except when it relates to items charged or credited in other
comprehensive income, in which case the deferred tax is also
dealt with in other comprehensive income.
Deferred tax assets and liabilities are offset when there
is a legally enforceable right to set off current tax assets
against current tax liabilities and when they relate to income
taxes levied by the same taxation authority and the Company
intends to settle its current tax assets and liabilities
on a net basis.
Equity
Equity comprises the following:
* Share capital, representing the number of shares
subscribed at nominal value;
* Merger reserve, relating to the adjustment required
to account the acquisition of DevClever Limited as a
reverse acquisition
* Share premium, representing the additional amount of
funds received in excess of the nominal value of the
shares and recorded net of associated transaction
costs;
* Other reserves comprising (i) share-based payment
reserves, in respect of the charge for share based
payments arising on the grant of employee share
options and advisor warrants, in accordance with
International Financial Reporting Standard 2; and
(ii) the equity component of a compound financial
instrument realised during the year;
* Retained income represents the cumulative earnings of
the Group attributable to equity shareholders.
Share based payments
The costs of equity settled transactions are measured at
their fair value at the date at which they are granted. The
cost of advisor warrants is recognised at the grant date
as they are issued in respect of services already received.
The cost of equity settled transactions with employees is
charged to the income statement as an expense over the vesting
period, on a straight-line basis, which ends of the date
on which the relevant employees become fully entitled to
the award. Non-market vesting conditions are taken into consideration
by adjusting the numbers of options expected to vest, at
each statement of financial position date, such that the
cumulative charge recognised over the vesting period is based
on the number of options that eventually vest. Market vesting
conditions are factored into the fair value of the options
granted. The cumulative expense is not adjusted for failure
to achieve a market vesting condition. The movement in cumulative
expense since the previous reporting date is recognised in
the statement of comprehensive income within administration
expenses with a corresponding entry in the statement of financial
position in the relevant share-based payment reserve.
Fair value is determined using the Black-Scholes model, details
of which are given in note 9 Share based payments.
3 Critical accounting estimate and judgements
The preparation of these consolidated financial statements
requires the Directors to make judgements and estimates that
affect the reported amounts of assets and liabilities at
each reporting date and the reported amounts of revenue during
the reporting periods. Estimates and judgements are continually
evaluated and are based on historical experience and other
factors, including expectations of future events that are
believed to be reasonable under the circumstances. Actual
results could differ from these estimates. Information about
such judgements and estimations are contained in individual
accounting policies. The key judgements and sources of estimation
uncertainty that could cause an adjustment to be required
to the carrying amount of assets or liabilities within the
next accounting period are outlined below:
Capitalisation of development costs
The Group recognises costs incurred on development projects
as an intangible asset which satisfies the requirements of
IAS 38. The calculation of the costs incurred includes the
time spent by certain employees on the development project,
as recorded through their timesheets and the invoiced costs
of third-party contractor resource. The decision whether
to capitalise and how to determine the period of economic
benefit of a development project requires judgement over
the commercial viability of the project and the prospect
of selling the related software to new or existing customers.
The Group capitalised GBP686,138 of internal development
costs in the year (2019: GBP204,058). Details of the development
costs capitalised in the year are shown in note 12 Intangibles.
Impairment of internally generated intangible assets
An impairment review of the Company's development costs is
undertaken at least annually. This review involves the use
of judgement to consider the future projected income streams
that will result from the aforementioned costs. The expected
future cash flows are modelled and discounted over the expected
life of the assets in order to test for impairment using
the Group's cost of capital of 9.3% as the discount rate.
No impairment charge was made in the year (2019: GBP174,085).
In the prior year, an impairment charge was made to write
down the previously capitalised development costs associated
with the Group's gaming experiences. This followed a decision
taken by the Board to suspend further development activity
in this area and to concentrate on accelerating the development
of the Group's careers education platforms. Details of the
impairment of internally generated intangible assets are
shown in note 12 intangibles.
Impairment of goodwill
The Group tests goodwill annually for impairment, or more
frequently if there are indications that goodwill might be
impaired. The recoverable amount of a Cash Generating Unit
(CGU) is determined from value in use calculations. The key
assumptions for these calculations are externally derived
long-term growth rates, discount rates and cash flow forecasts
derived from the most recent financial budgets and forecasts
approved by management covering a three-year period. Rates
applied are:
* Long term growth rate 2.0%
* Discount rate / cost of capital 9.3%
Budgets and forecasts are based on expectations of future
outcomes taking into account past experience adjusted for
revenue growth from both new business and like for like growth
and taking into consideration external economic factors.
Cash flows beyond the three-year period are extrapolated
using estimated growth rates based on local expected economic
conditions and do not exceed the long-term average growth
rate for that country. The discount rates are based on the
Group's weighted average cost of capital. Further details
on impairment testing are provided in note 12 - Intangibles.
Fair valuation of assets and liabilities arising on the acquisition
of Phenix Digital
On 13 March 2020, the Group acquired the entire share capital
of Phenix Digital Limited in exchange for consideration comprising
a combination of new Ordinary 1p shares in Dev Clever Holdings
Plc and cash. In establishing the fair value of assets acquired,
the directors have exercised their judgement in establishing
the existence of any intangible assets acquired and their
associated fair values.
The directors judged the fair value of customer relationships
acquired to be the present value of the remaining contractual
income flows discounted at the Group's cost of capital of
9.3%.
Further details of the customer relationship intangible are
provided in note 28 Business combination.
4 Revenue 2020 2019
GBP GBP
Development and set up fees 1,070,474 311,941
Subscription, hosting and support
fees 184,260 168,644
---------- --------
1,254,734 480,585
---------- --------
In the year to 31 October 2020, revenue from 3 of the Company's
major customers represented more than 10% of the Company's
revenue. Revenue related to those customers was GBP450,679,
GBP300,510 and GBP101,770 respectively. In the year to 31
October 2019, revenue from 3 of the
Company's major customers accounted for more than 10% of
the Company's revenue. Revenue relating to those customers
was GBP83,358, GBP79,720 and GBP45,388 respectively. The
major customers were different year on year.
All revenues are from external customers and can be attributed
to the following geographical locations, based on the customers'
location as follows:
2020 2019
GBP GBP
United Kingdom 790,886 434,413
Rest of Europe - 77
Asia Pacific 450,679 11,095
USA 13,169 35,000
---------- --------
1,254,734 480,585
---------- --------
5 Expenses by nature 2020 2019
GBP GBP
Cost of sales
Salary and other employee costs 563,064 370,598
Third party contractors 403,663 143,982
Less: software development costs capitalised (387,038) (202,143)
Amortisation of software 99,747 11,207
Impairment of capitalised software
development costs - 174,085
Direct materials and charges 24,171 24,053
Total cost of sales 703,607 521,782
---------- ----------
Administration expenses
Salary and other employee costs 936,331 435,975
Third party contractors 20,596 10,000
Depreciation 55,808 14,692
Legal, professional and regulatory
fees 270,007 305,208
Information technology and telecommunications 159,031 92,844
Advertising and promotion 88,707 41,738
Travel expenses 48,329 24,121
Premises 45,278 61,217
Other administration expenses 13,641 13,865
Total administration expenses 1,637,728 999,660
---------- ----------
Auditors remuneration 2020 2019
GBP GBP
Fees payable to the Company's auditor
and associates
For the audit of the Group and Company
financial statements 37,328 34,000
Corporate finance in relation to work
as reporting accountant for the prospectus
in FY2020 and listing in 2019 16,000 22,937
Other assurance services 1,680 1,500
------- -------
55,008 58,437
------- -------
6 Segmental analysis
The chief operating decision maker considers the Group's segments
to be by geographical location and by revenue type.
Year ended 31 October 2020
Educate Agency Total
GBP GBP GBP
Revenue by geographical
location
United Kingdom 111,327 679,559 790,886
Asia Pacific 450,679 - 450,679
USA 3,294 9,875 13,169
--------- --------- --------------------
565,300 689,434 1,254,734
Year ended 31 October 2019
Educate Agency Total
GBP GBP GBP
Revenue by geographical
location
United Kingdom 122,304 312,109 434,413
Rest of Europe - 77 77
Asia Pacific - 11,095 11,095
USA - 35,000 35,000
--------- --------- --------------------
122,304 358,281 480,585
Segmental analysis
As reported in FY 2019 Annual Report, last year end the Group
made the decision to concentrate its management focus and
capital resources on the Educate business and its virtual
reality careers guidance platform. The Engage customer loyalty
and Other segments were merged into a single segment entitled
Agency. The prior period comparatives for Agency represent
the summation of the previously separately disclosed Engage
and Other segments.
Year ended 31 October 2020
Educate Agency Total
GBP GBP GBP
Revenue by type
Development and set up
fees 476,332 594,142 1,070,474
Subscription, hosting and
support fees 88,968 95,292 184,260
------------------- ----------------- --------------------
565,300 689,434 1,254,734
Cost of sales (183,774) (519,833) (703,607)
Gross profit by segment 381,526 169,601 551,127
Operating loss by segment (438,005) (508,419) (946,424)
Costs not allocated by
segment:
Share based payment expenses (140,177)
Fair value gain on financial
assets at fair value 77,518
Finance income 240
Finance costs (47,411)
Tax credit 118,557
Total comprehensive income
for the period attributable
to shareholders (937,697)
--------------------
Year ended 31 October 2019
Educate Agency Total
GBP GBP GBP
Revenue by type
Development and set up
fees 27,043 284,898 311,941
Subscription, hosting and
support fees 95,261 73,383 168,644
------------------- ----------------- --------------------
122,304 358,281 480,585
Cost of sales (139,404) (382,378) (521,782)
Gross profit / (loss) by
segment (17,100) (24,097) (41,197)
Operating loss by segment (280,747) (536,276) (817,023)
Costs not allocated by
segment:
IPO fees (113,622)
Share based payment expenses (110,212)
Finance income 811
Finance costs (24,601)
Tax credit 45,016
Total comprehensive income
for the period attributable
to shareholders (1,019,631)
--------------------
The segmental analysis above reflects the parameters applied
by the Board when considering the Group's monthly management
accounts. Costs not allocated to segments include share-based
payment expenses, listing costs, finance income and expense
and taxation expenses.
Year ended 31 October 2020
Educate Agency Total
GBP GBP GBP
Financial position
Net current assets 944,352 439,811 1,384,163
-------------------- ---------------- --------------------
Net assets 1,718,534 624,083 2,342,617
-------------------- ---------------- --------------------
Year ended 31 October 2019
Educate Agency Total
GBP GBP GBP
Financial position
Net current assets 166,300 309,410 475,710
-------------------- ---------------- --------------------
Net assets 149,470 420,433 569,903
-------------------- ---------------- --------------------
7 Particulars of staff
The average number of persons employed by the Group, including
Directors, during the year was:
2020 2019
No. No.
Product development 18 12
Sales and administration 9 9
------------------- -----------------
27 21
------------------- -----------------
The aggregate payroll costs of these persons were:
2020 2019
GBP GBP
Wages and salaries 1,223,798 683,114
Social security costs 130,522 64,525
Pension costs - defined contribution
plan 21,185 11,217
Share based payments - employee option
expense 123,890 47,717
------------------- -----------------
1,499,395 806,573
Being:
Salary and other employee costs reported
within cost of sales 563,064 370,598
Salary and other employee costs reported
within administration expenses 936,331 435,975
------------------- -----------------
1,499,395 806,573
Less: wages and salaries capitalised
within software development costs (331,227) (186,678)
------------------- -----------------
1,168,168 619,895
------------------- -----------------
The Company employed two members of staff, being the Non-Executive
Directors, at a total cost of GBP42,644 (2019: GBP31,355).
Key management remuneration
Remuneration of the key management team, including Directors,
during the year was as follows
2020 2019
GBP GBP
Aggregate emoluments including short-term
employee benefits 460,102 197,400
Social security costs 56,890 21,987
Pension costs - defined contribution
plan 5,028 2,190
Share based payments - employee option
expense 87,373 27,594
609,393 249,171
Key management personnel include the Directors and Tim Heaton,
the Chief Operating Officer, Julian Carter, the Managing
Director of Agency Services and Richard Lee, the Global Sales
Director (Educate). The key management remuneration in respect
of Tim Heaton is for the period to 26 May 2020, on which
date he was appointed as an Executive Director of the Company.
Directors' remuneration is detailed within the Remuneration
Report. Details of key manager remuneration are outlined
below (FY 2019 GBPnil).
Key manager
Salary Taxable Bonus Pension Consultancy 2020
and fees benefits related fees Total
benefits
GBP GBP GBP GBP GBP GBP
Tim Heaton 67,869 6,108 16,967 1,357 - 92,301
Keith Hayes - - - - 40,000 40,000
Richard Lee 12,000 1,040 - - - 13,040
Julian Carter 2,962 300 - - - 3,262
---------- ---------- ---------- ---------- -------------- ---------
Total 82,831 7,448 16,967 1,357 40,000 108,603
---------- ---------- ---------- ---------- -------------- ---------
Tim Heaton's salary is in respect of the period 1 November
2019 to 25 May 2020 at which time he became an executive
director. Details of his directors' emoluments are disclosed
within the Remuneration Report.
Keith Hayes provided his services to the Group as a self-employed
contractor, on a part-time basis, receiving consultancy fees
of GBP40,000 in the year ending 31 October 2020. Keith was
employed by the Group on a full-time basis on 30 November
2020.
Remuneration for Richard Lee and Julian Carter relates to
the period following their appointments on 14 September 2020
and 19 October 2020 respectively.
Directors' remuneration
Remuneration of the Directors during the period
was as follows:
2020 2019
GBP GBP
Aggregate emoluments including short-term
employee benefits 352,856 184,000
Pension costs - defined contribution
plan 3,671 2,190
--------- --------
Directors' remuneration 356,527 186,190
Social security costs 43,074 20,237
Share based payments - employee option
expense 54,006 27,594
--------- --------
453,607 234,021
--------- --------
Chris Jeffries, the Executive Chairman and CEO, was the highest
paid director. Details of his remuneration are detailed in
the Remuneration Report.
8 Finance income and expense
2020 2019
GBP GBP
Interest receivable on bank deposits 240 811
Finance income and expense (continued)
2020 2019
GBP GBP
Interest expense on financial liabilities
measured at amortised cost 47,411 24,601
Interest expense includes interest payable in respect of
finance leases of GBP6,787 following the adoption of IFRS
16, imputed interest of GBP23,654 on the liability element
of the convertible loan notes and interest on bank borrowings
of 16,970.
9 Share-based payments
Share-based payment schemes with employees
During the year ended 31 October 2019, Dev Clever Holdings
plc introduced a share-based payment scheme for employees
("the EMI share option plan"). The Scheme was created as
part of the listing process to grant existing employee's
options over the ordinary shares of the Company and is classified
as an equity settled share-based payment plan. The options
granted under the Scheme had vesting periods of up to 36
months.
There were 7,955,801 employee options granted during 2019
at an exercise price of GBP0.01 per share, which vest, subject
to continued service by the employee, over a period of 3
years. Options expire at the end of a period of 10 years
from the Grant Date of 14 January 2019 or on the date on
which the option holder ceases to be an employee. During
the period, 662,983 options lapsed (2019: nil) and 752,485
were exercised (2019: nil) with 6,540,333 remaining outstanding
at the period end (2019: 7,955,801). The options were valued
under the Black Scholes Model. The expense recognised in
the income statement during the period was GBP14,377 (2019:
GBP20,124).
On 21 January 2020, Dev Clever Holdings plc granted options
to purchase 4m ordinary shares to Tim Heaton, the Chief Operating
Officer. The options vest in equal annual instalments, subject
to continued service, over a period of 3 years and are exercisable
at a price of GBP0.012. On 14 May 2020, Mr Heaton was granted
options over a further 1.2m ordinary shares. These options
vest in equal annual instalments, subject to continued service,
over a period of 3 years and are exercisable at a price of
GBP0.10. Both options were valued under the Black Scholes
Model with an expense recognised in the income statement
during the period of GBP44,966 (2019: nil)
On 14 September 2020, Dev Clever Holdings plc granted options
to purchase 3m ordinary shares to Richard Lee on his appointment
as Global Sales Director - Educate. The options vest in equal
annual instalments, subject to continued service, over a
period of 3 years and are exercisable at a price of GBP0.10.
The options were valued under the Black Scholes Model with
an expense recognised in the income statement during the
period of GBP19,463 (2019: nil)
On 19 October 2020, Dev Clever Holdings plc granted options
to purchase 2m ordinary shares to Julian Carter on his appointment
as Managing Director - Agency Services. The options vest
in equal annual instalments, subject to continued service,
over a period of 3 years and are exercisable at a price of
GBP0.10. The options were valued under the Black Scholes
Model with an expense recognised in the income statement
during the period of GBP3,230 (2019: nil).
Share-based payment expense with Directors
On 14 January 2019, Dev Clever Holdings plc granted options
to purchase 10m ordinary shares to Nicholas Ydlibi, the Chief
Financial Officer and Company Secretary. The options vest
in equal annual instalments, subject to continued service,
over a period of 3 years and are exercisable at a price of
GBP0.01. The options expire at the end of a period of 10
years from the Grant Date of 14 January 2019 or on the date
on which the option holder ceases to be an employee. During
the period, no options lapsed (2019: nil) and no options
were exercised (2019: nil). The options were valued under
the Black Scholes Model. The expense recognised in the income
statement during the period was GBP19,714 (2019: GBP27,594).
Share-based payments on acquisition of Phenix Digital
On 13 March 2020, the Company granted options to purchase
2,651,933 shares to employees on the acquisition of Phenix
Digital Limited at an exercise price of GBP0.0235 per share,
which vest, subject to continued service by the employee,
over a period of 3 years. The options expire at the end of
a period of 10 years from the grant date or on the date on
which the option holder ceases to be an employee. The options
were valued under the Black-Scholes Model. The expense recognised
in the income statement during the period was GBP22,139 (2019:
nil).
Advisor Warrants
The Company had warrants over 11,826,264 shares outstanding
at the beginning of the period in respect of advisor warrants
for Syminex FZE, representing 3% of the fully diluted share
capital of the Company on admission. The shares had an exercise
price of GBP0.01 and were subject to expiry on 21 January
2024. The warrants were exercised on 10 September 2020.
On 20 January 2020, the Company granted warrants over 768,704
shares to its joint brokers, Novum Securities, at an exercise
price of GBP0.034 subject to expiry on 19 January 2023. The
warrants were valued under the Black Scholes model, with
an expense recognised in the income statement during the
period of GBP16,288. The warrants were exercised on 17 September
2020.
The Company has measured the fair value of the services received
as consideration for equity instruments of the Company, indirectly
by reference to the fair value of the equity instruments.
The table below sets out the options and warrants that were
issued during the period and the principal assumptions used
in the valuation.
During the period the Group and Company recognised a total
expense of GBP140,177 (2019: GBP110,212) in the income statement
in respect to share options and warrants in issue or committed
to issuing at the end of the reporting period.
The table below represents the weighted average exercise
price (WAEP) of and the movements in share options and warrants
during the period:
31 October WAEP 31 October WAEP
2020 2019
No. options No. options
and warrants and warrants
Outstanding at beginning
of period 29,782,065 1.00 - 0.00
Issued in period 13,620,637 5.55 32,072,065 1.00
Lapsed during period (662,983) 1.00 - -
Exercised during the
period (13,347,453) 1.14 (2,290,0000) 1.00
Outstanding at the end
of the period 29,392,266 1.17 29,782,065 1.00
Exercisable at the end
of the period 5,011,784 3.05 11,826,264 1.00
The Company has measured the fair value of the services received
as consideration for equity instruments of the Company, indirectly
by reference to the fair value of the equity instruments.
The table below sets out the options and warrants that were
issued during the period and the principal assumptions used
in the valuation.
Type Employee Advisor
Grant Date Various 20 Jan 20
Number of options/warrants 12,851,933 768,704
Share price at grant GBP0.012 GBP0.012
date to GBP0.091
Exercise price at grant GBP0.012 GBP0.034
date to GBP0.100
Risk free rate 0.26% 0.36%
Option life 10 years 3 years
101.2% to
Expected volatility 113.1%` 101.6%
Expected dividend yield 0% 0%
Expected redemption 100% 100%
Fair value per option GBP0.011 GBP0.021
/ warrant at grant date to GBP0.083
10 Taxation
2020 2019
GBP GBP
Current tax
UK corporation tax credit at 19% (2019:
19%) 62,376 33,366
Adjustments in respect of prior years 52,036 -
------------- ------------
114,412 33,366
Deferred tax
Credit in respect of current year 4,145 11,650
4,145 11,650
Tax on loss on ordinary activities 118,557 45,016
------------- ------------
Tax reconciliation
Loss before taxation (1,056,254) (1,064,647)
Tax using UK corporation tax rate
of 19% (2019: 19%) 200,688 202,283
Non-deductible expenses (39,916) (24,482)
Other tax adjustments 50,047 (20,488)
Incremental tax relief re research
and development expenditure 45,387 12,148
Restriction of relief on settlement
of research and development tax credits (19,009) (5,090)
Incremental deductions for share-based 204,853 -
payment at intrinsic value
Unutilised tax losses carried forward (375,529) (136,319)
Adjustment to current tax in respect
of prior years (1) 52,036 16,964
------------- ------------
118,557 45,016
------------- ------------
(1) adjustment to current tax in respect of prior year's
relates to the finalisation and submission of research and
development tax credit
The Group has accumulated tax losses of approximately GBP3,018,974
(2019: GBP1,078,095) that are available, under current legislation,
to be carried forward against future profits.
No deferred tax asset has been recognised in respect of these
losses due to the uncertainly of future trading profits.
11 Earnings per share
The basic earnings per share is calculated by dividing the
profit attributable to equity shareholders by the weighted
average number of shares in issue.
The Group has in issue 29,392,266 warrants and options at
31 October 2020 (2019: 29,782,065). The loss attributable
to equity holders and the weighted average number of ordinary
shares for the purposes of calculating diluted earnings per
ordinary share are identical to those used for the basic
earnings per ordinary share. This is because the exercise
of warrants and options would have the effect of reducing
the loss per ordinary share and is therefore anti-dilutive.
2020 2019
GBP GBP
Loss attributable to equity holders
of the Group:
Continuing Operations (937,697) (1,019,631)
Weighted average number of shares
for Basic and diluted EPS 430,264,573 352,229,708
Basic and diluted earnings per share
from continuing operations (pence) (0.22) (0.29)
Adjusted loss attributable to equity
holders of the Group:
Continuing Operations (797,520) (796,649)
Weighted average number of shares
for Basic and diluted EPS 430,264,573 352,229,708
Basic and diluted earnings per share
from continuing operations (pence) (0.19) (0.23)
The adjusted loss is calculated after adjusting for non-recurring
one-off expenditure associated with the placing and the costs
of the warrants and options granted in the period
2020 2019
GBP GBP
Loss attributable to equity holders
of the Group (937,697) (1,019,631)
IPO expenses recognised in the period - 112,770
Share-based payment - share options 123,889 47,717
Share-based payments - share warrants 16,288 62,495
Adjusted loss attributable to equity
holders of the Group (797,520) (796,649)
------------- ------------
12 Intangible
assets
- Group
Goodwill Intangible assets
Trademark Customer Externally Internal Total
Relationships purchased use software
software
GBP GBP GBP GBP GBP GBP
Cost
At 1 November - - - - - -
2017
Additions - 3,682 - - 127,795 131,477
--------- ------------- ---------------- ---------------- ---------------------- --------------------
At 31 October
2018 - 3,682 - - 127,795 131,477
Additions - - - 7,430 204,058 211,488
--------- ------------- ---------------- ---------------- ---------------------- --------------------
At 31 October
2019 - 3,682 - 7,430 331,853 342,965
Acquired on
acquisition
of
subsidiary 240,145 74,659 - - 74,659
Additions - - - - 686,138 686,138
--------- ------------- ---------------- ---------------- ---------------------- --------------------
At 31 October
2020 240,145 3,682 74,659 7,430 1,017,991 1,103,762
Amortisation
At 1 November - - - - - -
2017
Charge for - - - - - -
the
year
--------- ------------- ---------------- ---------------- ---------------------- --------------------
At 31 October - - - - - -
2018
Charge for
the
year - - - (828) (10,379) (11,207)
Impairment - - - - (174,085) (174,085)
--------- ------------- ---------------- ---------------- ---------------------- --------------------
At 31 October
2019 - - - (828) (184,464) (185,292)
Charge for
the
year - - (21,776) (2,483) (75,488) (99,747)
Impairment - - - - - -
--------- ------------- ---------------- ---------------- ---------------------- --------------------
At 31 October
2020 - - (21,776) (3,311) (259,952) (285,039)
Net book
value
At 31 October
2020 240,145 3,682 52,883 4,119 758,039 818,723
At 31 October
2019 - 3,682 - 6,602 147,389 157,673
Goodwill and the customer relationships intangible assets
held by the Group arose on the acquisition of Phenix Digital.
See note 26 for further information.
The Company's internally developed software relates to
its Launchyourcareer.com and VICTAR VR careers education
platform, the associated CLEVER suite of intranet products,
digital customer loyalty applications and virtual reality
gaming experiences.
The Group tests goodwill annually for impairment, or more
frequently if there are indications that goodwill might
be impaired. The recoverable amount of a Cash Generating
Unit (CGU) is determined from value in use calculations.
The key assumptions for these calculations are externally
derived long-term growth rates, discount rates and cash
flow forecasts derived from the most recent financial
budgets and forecasts approved by management covering
a three-year period. Rates applied are:
* Long term growth rate 2.0%
* Discount rate / cost of capital 9.3%
Budgets and forecasts are based on expectations of future
outcomes taking into account past experience adjusted
for revenue growth from both new business and like for
like growth and taking into consideration external economic
factors. Cash flows beyond the three-year period are extrapolated
using an estimated growth rates, based on local expected
economic conditions and do not exceed the long-term average
growth rate for that country. The discount rates are based
on the Group's weighted average cost of capital.
No issues were identified that required an impairment.
Intangible assets - Company
Goodwill
Cost GBP
At 1 November 2019 -
Recognised on transfer
of trade 183,928
---------------
At 31 October 2020 183,928
---------------
Net Book Value 183,928
---------------
The goodwill reflects the retention of the economic value
accruing to the Company from its acquisition of Phenix Digital
Limited following the decision to transfer its trade and
operations of to DevClever Limited post acquisition.
The Company tests goodwill annually for impairment, or more
frequently if there are indications that goodwill might be
impaired. The recoverable amount of a Cash Generating Unit
(CGU) is determined from value in use calculations. The key
assumptions for these calculations are externally derived
long-term growth rates, discount rates and cash flow forecasts
derived from the most recent financial budgets and forecasts
approved by management covering a three-year period.
Budgets and forecasts are based on expectations of future
outcomes taking into account past experience adjusted for
revenue growth from both new business and like for like growth
and taking into consideration external economic factors.
Cash flows beyond the three-year period are extrapolated
using an estimated growth rates of 2.0%, based on local expected
economic conditions and do not exceed the long-term average
growth rate for that country. The discount rates are based
on the Group's weighted average cost of capital of 9.3%.
No issues were identified that required an impairment.
13 Property, plant and equipment
Right of Fixtures Computer Total
use assets and fittings equipment
GBP GBP GBP GBP
Cost
At 1 November 2017 - 17,673 18,899 36,572
Additions - 8,148 11,224 19,372
Transfer between asset
classes - (9,001) 9,001 -
--------------- ------------- ----------------- --- -------------------------
At 31 October 2018 - 16,820 39,124 55,944
Additions - 1,875 24,767 26,642
--------------- ------------- ----------------- --- -------------------------
At 31 October 2019 - 18,695 63,891 82,586
Initial adoption of IFRS
16 84,249 - - 84,249
Acquired on acquisition
of subsidiary - - 1,750 1,750
Additions - - 33,584 33,584
--------------- ------------- ----------------- --- -------------------------
At 31 October 2020 84,249 18,695 99,225 202,169
Depreciation
At 1 November 2017 - (8,232) (6,300) (14,532)
Charge for the year - (1,518) (10,138) (11,656)
Transfer between asset
classes - 7,425 (7,425) -
--------------- ------------- ----------------- --- -------------------------
At 31 October 2018 - (2,325) (23,863) (26,188)
Charge for the year - (2,338) (12,354) (14,692)
--------------- ------------- ----------------- --- -------------------------
At 31 October 2019 - (4,663) (36,217) (40,880)
Charge for the year (26,605) (6,053) (23,150) (55,808)
--------------- ------------- ----------------- --- -------------------------
At 31 October 2020 (26,605) (10,716) (59,367) (96,688)
Net book value
At 31 October 2020 57,644 7,979 39,858 105,481
At 31 October 2019 - 14,032 27,674 41,706
The right of use asset relates to the property lease for
the Group's premises at Unit 1, Ninian Way, Tamworth, which
has been recognised on adoption of IRFS 16 Leases. The associated
IFRS 19 lease liability is included within other loans and
borrowings (see note 19)
An assessment was undertaken for indicators of impairment
at the balance sheet. No issues were identified that required
an impairment review to be conducted.
14 Financial assets at fair value through
profit or loss - Group
2020 2019
GBP GBP
Equity investments 138,653 1,125
----------- --------
The Group's financial assets valued at fair value through
profit or loss represent its ownership interest in Audoo
Limited, a private limited company.
The fair value of the financial assets is measured by reference
to the degree to which fair value is observable:
* Level 1 fair value measurements being those derived
from inputs other than quoted prices that are
observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived
from prices)
* Level 2 fair value measurements being those derived
from valuation techniques that includes inputs for
the asset or liability that are not based on
observable market data (unobservable inputs).
* Level 3 assets whose fair value cannot be determined
by using observable inputs or measures, such as
market prices or models. Level 3 assets are typically
very illiquid, and fair values can only be calculated
using estimates or risk-adjusted value ranges.
The fair value has been established by reference the issue
price of shares in Audoo at its latest funding round of GBP48.06
per Ordinary Share. As a private limited company, Audoo's
share price is not observable market data and therefore represents
a level 2 fair value measurement as defined in the fair value
hierarchy above .
Name of undertaking Country of Ownership Voting power Nature of
incorporation interest held business
Audoo Limited UK 1.16% 1.16% Audio devices
The Company holds 2,885 Ordinary A shares (2019: 750) in
Audoo Limited, a developer of audio meters to support performance
rights organisations track played music. The shares were
acquired as part consideration for services provided as follows:
No. Cost Fair value Fair value
gain / (loss)
10 May 2019 750 1,125 36,045 34,920
2 March 2020 1,250 30,000 60,075 30,075
22 May 2020 885 30,010 42,433 12,523
------ ------- ----------- ---------------
2,885 61,135 138,653 77,518
------ ------- ----------- ---------------
15 Investments - Company
Shares in
subsidiaries
Cost and carrying value GBP
As at 26 September 2018 -
Additions 2,500,000
---------------
As at 31 October 2019 2,500,000
Additions 183,928
Re-categorised as goodwill on transfer
of trade and operations (183,928)
---------------
As at 31 October 2020 2,500,000
---------------
Details of the Company's subsidiaries at 31 October 2020
are as follows:
Name of undertaking Country of Ownership Voting power Nature of
incorporation interest held business
DevClever
Limited UK 100% 100% Digital media
Phenix Digital
Limited UK 100% 100% Digital media
The Company's interest in Dev Clever Limited was acquired
on 2nd October 2018. The registered office of Dev Clever
Limited is Ventura House, Ventura Park Road, Tamworth, B78
3HL.
The Company's interest in Phenix Digital Limited was acquired
on 13(th) March 2020. Following its acquisition, the trade
and operations of Phenix Digital Limited were transferred
to DevClever Limited, including the transfer of staff and
novation of contracts. As a result of this transfer, the
investment in Phenix Digital Limited has been re-categorised
as goodwill (see note 12). The registered office of Phenix
Digital Limited is Creative Industries Centre, Wolverhampton
Science Park, Wolverhampton, West Midlands, WV10 9TG.
16 Trade and other receivables - Group
2020 2019
GBP GBP
Trade receivables 703,544 62,346
Less: Provision for impairment of
trade receivables (2,369) (11,765)
----------- ---- ----------
701,175 50,581
Prepayments 295,437 33,522
Income taxes 135,406 16,402
Taxation and social security - 6,109
Other receivables - 50,000
----------- ---- ----------
1,132,018 156,614
----------- ---- ----------
The ageing of trade receivables that
were not impaired at 31 October was:
2020 2019
GBP GBP
Not past due 576,134 22,692
Up to three months past due 123,473 24,869
More than three months past due 1,568 3,020
----------- ---- ----------
701,175 50,581
----------- ---- ----------
Other receivables are not past due (2019: not past due).
The Company trades only with recognised, credit-worthy third
parties. Receivable balances are monitored on an ongoing
basis with the aim of minimising the Company's exposure to
bad debts. The Company has reviewed in detail all items comprising
the above not past due and overdue but not impaired trade
receivables to ensure that no impairment exists. As at 31
October 2020, trade receivables of GBP2,369 (2019: GBP11,765)
were impaired and provided for. The amount of the provision
was GBP2,369 at 31 October 2020 (2019: GBP11,765). Movements
on the provision for impairment of trade receivables are
as follows:
2020 2019
GBP GBP
At 1 November (11,765) (4,500)
On acquisition of Phenix Digital Limited (2,369) -
Provision for expected credit losses
released / (charged) - (11,765)
Receivables written off during the
year 11,765 4,500
----------- ---- ----------
At 31 October (2,369) (11,765)
----------- ---- ----------
The Directors review trade receivable balances on an individual
basis each month to assess whether there is evidence of circumstances
that will lead to the provision of expected credit losses.
This is feasible due to the relatively low number of individual
trade receivable accounts. Write-offs occur when there is
no reasonable expectation of recovery would typically be
considered once debts become more than six months overdue,
on approval by the Chief Financial Officer.
The other classes within trade and other receivables do not
contain impaired assets. The maximum exposure to credit risk
for trade and other receivables at the reporting date is
the carrying value of each class of receivable disclosed
above.
The carrying amounts of all the Group's, trade and other
receivables are denominated in the following currencies.
2020 2019
GBP GBP
Sterling 681,340 156,614
US $ 450,678 -
----------- ---- ----------
1,132,018 156,614
----------- ---- ----------
The trade receivables denominated in foreign currency relate
to the bulk sale of software licences to a single customer
and is included in the not past due debt at the period end.
Trade and other receivables - Company
2020 2019
GBP GBP
Amounts owed by Group undertakings 3,137,441 1,134,404
Less: Provision for impairment amounts (80,111) -
owed by Group undertakings
----------- ---- ----------
3,057,330 1,134,404
Prepayments 160,130 17,418
Taxation and social security - 6,109
Other receivables 355,422 267,541
----------- ---- ----------
3,572,882 1,425,472
----------- ---- ----------
Other receivables are not past due (2019: not past due).
On 21 January 2019, the Company provided an intra-group loan
facility to its subsidiary, Dev Clever Ltd for GBP1,233,000,
following its admission to the Standard List of the London
Stock Exchange and the receipt of the placing proceeds. During
the course of 2020, the Company has approved increases to
this loan facility to GBP3,833,000 to support the development
and commercialisation of its proprietary software platforms.
The loan, which is unsecured and
repayable on demand, bears interest at 4.75% above the Bank
of England Base Rate. Dev Clever Limited had drawn down GBP3,057,330
(2019: GBP1,134,404) as at 31 October 2020.
On 1 April 2020, the Group provided an intra-group loan facility
to its newly acquired subsidiary, Phenix Digital Limited,
for GBP100,000 to support the on-going working capital requirements
of the business whilst its trade is transferred to Dev Clever
Limited. Phenix Digital Limited had drawn down GBP80,111
as at 31 October 2020. As a result of the transfer of trade
to DevClever Limited, Phenix Digital is no longer in a position
to repay the Group loan facility and an impairment of GBP80,111
has been recognised.
The other classes within trade and other receivables do not
contain impaired assets. The maximum exposure to credit risk
for trade and other receivables at the reporting date is
the carrying value of each class of receivable disclosed
above.
The carrying amounts of all the Company's trade and other
receivables are denominated GBP Sterling.
17 Cash and cash equivalents - Group 2020 2019
GBP GBP
Bank current accounts (Santander) 1,032,473 496,707
----------- ---- -------------
Santander has a credit rating of A1
(Moody's)
Cash and cash equivalents - Company 2020 2019
GBP GBP
Bank current accounts (Santander) 938,806 325,374
----------- ---- -------------
Santander has a credit rating of A1
(Moody's)
18 Trade and other payables - Group
2020 2019
GBP GBP
Current
Trade payables (22,710) (12,048)
Accruals (184,895) (75,110)
Deferred income (210,145) (603)
Other taxation and social security (108,497) (36,645)
Other payables (28,969) (11,678)
----------- ---- -------------
(555,216) (136,084)
----------- ---- -------------
The carrying amounts of all the Group's trade and other payables
are denominated GBP Sterling.
Trade and other payables - Company
2020 2019
GBP GBP
Trade payables (409) (19,128) (409)
Accruals (67,910) (55,704) (67,910)
Other taxation and social security (1,304) (2,564) (1,304)
Other payables (2,489) - (2,489)
---------
----------- -------------
(77,396) (72,112)
----------- -------------
The carrying amounts of all the Company's trade and other
payables are denominated GBP Sterling.
19 Loans and Borrowings - Group
The Directors believe the book value of loans and borrowings
approximates fair values. Books values are:
2020 2019
Current GBP GBP
Unsecured loans
IFRS 16 liability (29,205) -
Other (61,378) (47,727)
------------- -------------
(90,583) (47,727)
Non-current
Unsecured loans
IFRS 16 Liability (31,930) -
Other (286,751) (89,847)
------------- -------------
(318,681) (89,847)
Total loans and borrowings (409,264) (137,574)
------------- -------------
All the Group's loans and borrowings are denominated in GBP
Sterling. The Group has no committed borrowing facilities.
On 3 October 2017, the Group obtained a loan of GBP50,000,
net of transaction costs of GBP2,750 from Funding Circle
at an effective interest rate of 10.7%. The loan is repayable
in monthly instalments of GBP1,067 over a 5-year term and
is secured by way of a personal guarantee by Christopher
Jeffries, Director. The outstanding liability at 31 October
2020 was GBP23,168, of which GBP11,043 is payable within
one year and GBP12,125 is repayable in greater than one year.
On 9 April 2018, the Group obtained a loan of GBP152,413,
net of transaction costs of GBP9,729 from Crowd2Fund at an
effective interest rate of 14.2%. The loan is repayable in
monthly instalments of GBP4,112 over a 4-year term and is
secured by way of a personal guarantees by Christopher Jeffries
(Director), Katie Jeffries (spouse of Christopher Jeffries)
and Nicholas Ydlibi (Director). The outstanding liability
at 31 October 2020 was GBP66,825, of which GBP43,081 is payable
within one year and GBP23,744 is repayable in greater than
one year.
On 1 November 2019, the Company recognised a property lease
creditor of GBP87,847 in respect of its office premises at
Unit 1, Ninian Park, Ninian Way, Tamworth following the adoption
of IFRS 16 Leases. The outstanding liability at 31 October
2020 was GBP61,135, of which GBP29,205 is payable within
one year (2019: GBPnil) and GBP31,930 is repayable in greater
than one year (2019: GBPnil). The lease expires on 24 December
2022.
On 20 January 2020, the Chairman and CEO, Christopher Jeffries
and the Company entered into a convertible loan note agreement
amounting to GBP400,000. The loan notes are convertible into
ordinary shares of 1p each at Christopher Jeffries' option
at any time subject to, among other things, the Company not
being required to publish a prospectus in connection with
the issue of shares on conversion of the notes and no obligations
under Rule 9 of the City Code on Takeovers and Mergers being
triggered by such an issue of shares. Unless previously repaid
or converted, the loan notes will be redeemed at par by the
Company of their fifth anniversary. The Notes bear a zero
coupon.
The loan notes constitute a compound financial instrument
under IAS 32. The liability component, representing the net
present value of future contractual cash flows, was initially
valued at GBP248,369. The equity component of GBP151,631,
representing the residual amount after deducting the amount
for the liability from the value of the funds received, is
reported within "Other reserves".
On 3 August 2020 Christopher Jeffries converted GBP21,141
of the loan note for 2,114,069 new 1p ordinary shares. The
loan notes attracted an imputed interest charge of GBP23,654
that was accrued at the year end. The remaining liability,
including the imputed interest, was GBP250,882 at the year
end and is reported within amounts falling due in more than
one year.
On 13 March 2020, the Group acquired GBP28,266 of loans and
borrowings as part of its acquisition of Phenix Digital Limited.
These borrowings comprised a bank overdraft of GBP8,929,
a bank loan of GBP13,237 and a family loan of GBP6,100. The
bank overdraft and family loans have been repaid in the period.
The outstanding liability on the bank loan at 31 October
2020 was GBP7,254 and is repayable in less than one year.
Loans and Borrowings - Company
The Directors believe the book value of loans and borrowings
approximates fair values. Books values are:
2020 2019
GBP GBP
Non-current
Unsecured loans
- Other (250,882) -
------------- -------------
(250,882) -
------------- -------------
All the Company's loans and borrowings are denominated in
GBP Sterling. The Company has no committed borrowing facilities.
On 20 January 2020, the Chairman and CEO, Christopher Jeffries
and the Company entered into a convertible loan note agreement
amounting to GBP400,000. The loan notes are convertible into
ordinary shares of 1p each at Christopher Jeffries' option
at any time subject to, among other things, the Company not
being required to publish a prospectus in connection with
the issue of shares on conversion of the notes and no obligations
under Rule 9 of the City Code on Takeovers and Mergers being
triggered by such an issue of shares. Unless previously repaid
or converted, the loan notes will be redeemed at par by the
Company of their fifth anniversary. The Notes bear a zero
coupon.
The loan notes constitute a compound financial instrument
under IAS 32. The liability component, representing the net
present value of future contractual cash flows, was initially
valued at GBP248,369. The equity component of GBP151,631,
representing the residual amount after deducting the amount
for the liability from the value of the funds received, is
reported within "Other reserves".
On 3 August 2020 Christopher Jeffries converted GBP21,141
of the loan note for 2,114,069 new 1p ordinary shares. The
loan notes attracted an imputed interest charge of GBP23,654
that was accrued at the year end. The remaining liability,
including the imputed interest, was GBP250,882 at the year
end and is reported within amounts falling due in more than
one year.
20 Deferred tax - Group
The elements of deferred taxation are
as follows:
2020 2019
GBP GBP
Accelerated capital allowances and intellectual
property (15,826) (16,464)
Revaluation of intangible assets arising (10,040) -
on acquisition
---------------- ---------
(25,866) (16,464)
---------------- ---------
Movement in deferred tax: Accelerated Revaluation Total
capital allowances of intangible
and intellectual assets arising
property on acquisition
GBP
At 31 October 2018 (28,114) - (28,114)
Credited to income statement 11,650 - 11,650
At 31 October 2019 (16,464) - (16,464)
Deferred tax balances arising
on acquisition 638 (14,185) (13,547)
Credited to income statement - 4,145 4,145
-------------------- ---------------- ---------
15,826 10,040 (25,866)
-------------------- ---------------- ---------
The deferred tax liability arising on the revaluation of intangible
assets on acquisition relates to customer relationship asset
in respect of Phenix Digital. Further details are proved in
note 26.
21 Financial instruments and financial
risk management - Group
The Group is exposed to a variety of financial risks that
arise from its use of financial instruments: credit risk,
liquidity risk, foreign exchange risk and capital risk.
Principal financial instruments
The principal financial instruments used by the Group from
which financial instrument risk arises are as follows:
-- Trade and other receivables
-- Cash and cash equivalents
-- Trade and other payables
-- Debt finance
These instruments are all disclosed at amortised cost.
2020 2019
GBP GBP
Financial assets
Loans and receivables
Trade and other receivables 996,612 140,212
Cash and cash equivalents 1,032,473 496,707
------------------ --- --------------
2,029,085 636,919
------------------ --- --------------
Financial liabilities
Other financial liabilities
Trade and other payables (555,216) (136,084)
Loans and borrowings (409,264) (137,574)
------------------ --- --------------
(964,480) (273,658)
------------------ --- --------------
Disclosures in respect of the Company's financial risks are
set out below:
Financial risk management
The Company's activities expose it to credit, liquidity and
foreign exchange risks. The Company's overall risk management
programme focuses on the unpredictability of financial markets
and seeks to minimise potential adverse effects on the Company's
financial performance.
Credit risk
Credit risk is the risk of financial loss to the Company
if a customer or counterparty to a financial instrument fails
to meet its contractual obligations and arises principally
from trade receivables from customers and cash deposits with
financial institutions. The Company's exposure to credit
risk is influenced mainly by the individual characteristics
of each customer. Credit checks are performed on new and
potential customers and receivable balances are monitored
individually, on an ongoing basis, with the aim of minimising
the Company's exposure to the risk of default. The Directors
consider the above measures to be sufficient to control the
credit risk exposure.
The Company gives careful consideration to which organisations
it uses for its banking services in order to minimise credit
risk. At the reporting date, the Company's cash held on short-term
deposit with Santander Bank plc in the United Kingdom was
GBP1,032,473 (2019: GBP496,707).
The carrying amount of financial assets recorded in the consolidated
financial statements represents the Company's maximum exposure
to credit risk without taking into account the value of any
collateral obtained. In the Directors' opinion there have
been no impairments of
financial assets in the period, other than in relation to
trade receivables written off of GBP11,765 (2019: GBP4,500)
as disclosed in note 16.
Liquidity risk
Liquidity risk is the risk that the Group will not be able
to meet its financial obligations as they fall due. The Group
manages its cash flows to ensure that it will always have
sufficient liquidity to meet its liabilities when due, under
both normal and stressed conditions, without incurring
unacceptable losses or damage to the Group's reputation.
During the course of the year, the Group has raised additional
equity finance and loan finance to support the on-going development
and commoditisation of its software portfolio. The Group
has raised additional equity finance of GBP2,571,325 (2019
GBP1,471,499) and loan finance of GBP400,000 (2019 nil).
Details of the finance raised in the period are detailed
below:
On 22 January 2020, the Group raised GBP437,851 by way of
a placing of 43,785,107 new ordinary shares of GBP0.01 at
par value. On the same date, the Group also received GBP400,000
by way of a zero-coupon convertible loan note from its CEO
and Chairman Christopher Jeffries. The loan notes are convertible
into ordinary shares of 1p each at Christopher Jeffries'
option at any time subject to, among other things, the Company
not being required to publish a prospectus in connection
with the issue of shares on conversion of the notes and no
obligations under Rule 9 of the City Code on Takeovers and
Mergers being triggered by such an issue of shares. Unless
previously repaid or converted, the loan notes will be redeemed
at par by the Company of their fifth anniversary.
On 3 August 2020, the Group raised gross proceeds of GBP250,000
through a placing of 2,500,000 new ordinary 1p shares with
Intrinsic Capital (Jersey) Limited at a placing price of
10p. On 10 September 2020, the Group raised a further GBP1,750,000
through a placing of 17,500,000 new ordinary 1p shares with
Intrinsic Capital (Jersey) Limited at a placing price of
10p per share. The two placings represented the completion
of first tranche of the investment agreement with Intrinsic
Capital (Jersey) Limited.
The agreement gives provides for Intrinsic Capital (Jersey)
Limited to subscribe for a further 80,000,000 new ordinary
1p shares at a subscription price of 10p per share. The second
tranche of 20,000,000 shares had been subscribed for at the
year end, with a completion date no later than 25 January
2021. Intrinsic Capital (Jersey) Limited has the right to
subscribe to the third tranche of 20,000,000 new ordinary
1p shares by 28 February 2021 and the fourth tranche of 40,000,000
new ordinary 1p shares by 30 June 2021.
The Group raised GBP133,474 of further equity through the
exercise of employee share options GBP7,574 and the exercise
of adviser warrants GBP125,950. The employee options had
an exercise price of 1p per share and the adviser warrants
exercise prices of between 1p and 3.4p per share.
The Directors manage liquidity risk by regularly reviewing
the Group's cash requirements by reference to short-term
cash flow forecasts and medium-term working capital projections
prepared by management.
Maturity of financial assets and liabilities
Financial liabilities include 4 loans with outstanding balances
of GBP23,168 (2019: GBP33,060), GBP66,825 (2019: GBP104,515),
GBP250,882 (2019: GBPnil) and GBP7,254 (2019: GBPnil) and
a finance lease creditor of GBP61,135 (2019: GBPnil). The
total amount payable in more than one year from the reporting
date is GBP318,681 (2019: GBP89,847) analysed as follows:
2020 2019
GBP GBP
Amounts repayable within 1 year 90,583 47,727
Amounts repayable within 1 to 2 years 67,799 53,978
Amounts repayable within 2 to 5 years 250,882 35,869
------------------ --- --------------
Total 409,264 137,574
------------------ --- --------------
The Company's other financial assets and liabilities at each
reporting date are either receivable or payable within one
year.
Foreign exchange risk
The majority of the Company's revenues and costs are currently
in Sterling (the Company's functional currency) and involve
no currency risk. Activities in currencies other than Sterling
are funded as much as possible through operating cash flows,
mitigating foreign exchange risk.
The Company has the following cash and cash equivalent deposits:
2020 2019
GBP GBP
Sterling 1,032,473 496,707
------------------ --- --------------
The gross value of receivables and payables by currency is
disclosed in notes 15 and 16 respectively. The Group has
the following net other financial instruments:
2020 2019
GBP GBP
Sterling 623,209 359,133
------------------ --- --------------
Capital management
The Company's capital structure is comprised of a combination
of shareholders' equity and external loan finance. The objective
of the Company when managing capital is to maintain adequate
financial flexibility to preserve its ability to meet financial
obligations, both current
and long term. The capital structure is managed and adjusted
to reflect changes in economic conditions. The Company funds
its expenditures on commitments from existing cash and cash
equivalent balances, primarily received from operating cash
flows and from a combination of both equity and loan finance.
There are no externally imposed capital requirements. Financing
decisions are made by the Directors based on forecasts of
the expected timing and level of capital and operating expenditure
required to meet the Company's commitments and development
plans.
22 Share capital and reserves
Share Capital - Group and Company
Number of Share capital
shares issued
and fully
paid
No. GBP
Ordinary share capital
Issued and fully paid Ordinary shares
of GBP0.01 each 471,219,794 4,712,197
------------------ --- --------------
Reconciliation of movement during
the year:
As at 1 November 2018 250,000,000 2,500,000
Ordinary shares of GBP0.01 issued
at GBP0.01 on 14 December 2018 for
cash 33,500,000 335,000
Ordinary shares of GBP0.01 issued
at GBP0.01 on 21 January 2019 for
cash 67,800,000 678,000
Ordinary shares of GBP0.01 issued
at GBP0.01 on 21 January 2019 on conversion
of loan 22,000,000 220,000
Ordinary shares of GBP0.01 issued
at GBP0.01 on 2 August 2019 for cash 2,290,000 22,900
Ordinary shares of GBP0.01 issued
at GBP0.034 on 22 August 2019 for
cash 12,811,736 128,117
As at 31 October 2019 388,401,736 3,884,017
Ordinary shares of GBP0.01 issued
at GBP0.01 on 22 January 2020 for
cash 43,785,107 437,851
Ordinary shares of GBP0.01 issued
at GBP0.0235 on 13 March 2020 for
cash 3,571,429 35,714
Ordinary shares of GBP0.01 issued
at GBP0.01 on 27 May for cash 752,485 7,524
Ordinary shares of GBP0.01 issued
at GBP0.01 on 3 August 2020 for cash
and on conversion of loan 4,614,069 46,141
Ordinary shares of GBP0.01 issued
at GBP0.01 on 10 September 2020 for
cash 29,326,264 293,263
Ordinary shares of GBP0.01 issued
at GBP0.034 on 17 September 2020 for
cash 768,704 7,687
As at 31 October 2020 471,219,794 4,712,197
------------------ --- --------------
Merger reserve - Group
2020 2019
GBP GBP
At the beginning of year (2,499,900) -
Transfer to merger reserve arising
from accounting treatment of acquisition
of subsidiary - (2,499,900)
------------------ --- --------------
(2,499,900) (2,499,900)
------------------ --- --------------
Share premium account - Group and
Company
2020 2019
GBP GBP
At beginning of year 246,246 -
Premium arising on issue of new shares 1,866,663 307,482
Share issue expenses (135,462) (61,236)
------------------ --- --------------
1,977,447 246,246
------------------ --- --------------
Other reserves - Group and Company
2020 2019
GBP GBP
At the beginning of year 110,212 -
Compensation expense recognised in 123,889 47,717
period arising on issue of share options - -
Fair value of advisor warrants issued
in period 16,288 62,495
Recycled share-based payments (78,783) -
Equity component of compound financial 151,631 -
instrument
------------------ --- --------------
323,237 110,212
------------------ --- --------------
Retained earnings - Group
2020 2019
GBP GBP
At the beginning of period (1,170,672) (151,041)
Restatement on adoption of IFRS 16 (3,598) -
Loss for the year (937,697) (1,019,631)
Recycled share-based payments 78,783 -
Dividends paid - -
------------------ --- --------------
(2,033,184) (1,170,672)
------------------ --- --------------
Retained earnings - Company
2019 2019
GBP GBP
At the beginning of period (61,741) -
Loss for the year (162,585) (61,741)
Recycled share-based payments 78,783 -
------------------ --- --------------
(145,543) (61,741)
------------------ --- --------------
23 Capital commitments - Group and Company
As at 31 October 2020 and 31 October 2019 there were no capital
commitments.
24 Related party transactions - Group
31 October 2020 31 October 2019
Income Amounts Income Amounts
/ Expense Outstanding / Expense Outstanding
in year in year
Revenue
Audoo Limited 360,612 - 7,125 -
Aggregate emoluments
CM Jeffries 153,314 24,000 90,095 - Director
NAR Ydlibi 92,314 8,000 66,095 - Director
T Heaton 70,899 - - - Director
T Heaton 92,301 - 13,400 - Key management
CB Forrest 20,000 - 15,000 - Director
DR Ivy 20,000 - 15,000 - Director
J Carter 3,262 - - - Key management
R Lee 13,040 - - - Key management
----------- ------------- ------------ -------------
465,130 32,000 199,590 -
----------- ------------- ------------ -------------
Payments to contractors
K Hayes 40,000 - - - Key management
Share option expense
NAR Ydlibi 19,714 - 27,594 - Director
T Heaton 34,292 - - - Director
T Heaton 10,674 - - - Key management
J Carter 3,230 - - - Key management
R Lee 19,463 - - - Key management
----------- ------------- ------------ -------------
87,373 - 27,594 -
----------- ------------- ------------ -------------
Loans 250,882 - - - Director
CM Jeffries
----------- ------------- ------------ -------------
250,882 - - -
----------- ------------- ------------ -------------
CM Jeffries, Director and shareholder in Dev Clever Holdings
plc is also a Director of DevClever Limited, Dev Clever Consortium,
Phenix Digital Limited (appointed 13 March 2020) and Forever
Worldwide Limited.
NAR Ydlibi, Director and shareholder in Dev Clever Holdings plc
is also a director of DevClever Limited, Phenix Digital Limited
(appointed 13 March 2020) and a trustee of L.E.A.D Academy Trust.
Save as disclosed above, none of the key management personnel
of the Company owe any amounts to the Company (2019: GBPnil),
nor are any amounts due from the Company to any of the key management
personnel (2019: GBPnil).
Related party transactions - Company
31 October 2020 31 October 2019
Income Amounts Income Amounts
/ Expense Outstanding / Expense Outstanding
in year in year
Aggregate emoluments
CB Forrest 20,000 - 15,000 - Director
DR Ivy 20,000 - 15,000 - Director
----------- ------------- ----------- -------------
40,000 - 30,000 -
----------- ------------- ----------- -------------
Intra-Group transactions
Dev Clever Limited
- Parent company
loan 1,936,340 2,808,758 1,233,000 1,134,404 Group Company
- Accrued interest 81,575 91,575 52,414 52,414 Group Company
- Management services 241,708 241,708 165,127 165,127 Group Company
----------- ------------- ----------- -------------
2,259,623 3,142,041 1,450,541 1,351,945
----------- ------------- ----------- -------------
Phenix Digital
Limited
- Parent company
loan 80,111 80,111 - - Group Company
Impairment of
loan (80,111) (80,111) - - Group Company
----------- ------------- ----------- -------------
- - - -
----------- ------------- ----------- -------------
25 Ultimate controlling party - Group
and Company
There is no ultimate controlling party.
26 Events after the Reporting Period
- Group and Company
On 25 January 2021 the Group raised gross proceeds of GBP2.0
million, net 1.9 million, through the issuance of 20 million
new ordinary shares of 1p to Intrinsic Capital (Jersey) Limited
at a subscription price of 10p per share. The subscription
forms the second tranche of the subscription agreement entered
into by the Company with Intrinsic on 13 May 2020.
On 2 February 2021 the Group announced an equity subscription
agreement with One Nine Two Pte Limited. The agreement provided
for an initial subscription of 20 million new ordinary shares
in Dev Clever at a subscription price of 20p per share to
raise gross proceeds of GBP4.0 million, net GBP3.8 million,
conditional upon approval at a general meeting of the Company
to an increase in the authority granted to the Directors
to allot shares and disapply pre-emption rights. The agreement
provided for a further subscription of 20 million ordinary
shares at an exercise price of 30 pence per share to raise
gross proceeds of GBP6.0 million to be completed automatically
once the share price of the Group closed at or above 34p
per share for a period of 5 consecutive days. The further
subscription is valid for a period of nine months from the
date of completion of the first subscription. The Company
also granted One Nine Two Pte Limited a warrant over 40 million
new ordinary shares at an exercise price of 50p per share,
subject to completion of the further subscription. The warrant
is exercisable in whole or in part at any time until the
second anniversary of the completion of the first subscription.
Following the passing of the relevant resolution at the general
meeting, the Group received the proceeds of the initial subscription
on 22 February.
On 25 February, the Company announced the novation of the
subscription agreement with One Nine Two Pte Limited in favour
of Sitius Limited, an investment vehicle wholly owned by
Dr David vonRosen. On the same date, Intrinsic Capital (Jersey)
Limited entered into an agreement with Sitius to assign 30
million of its remaining subscription rights to 60 million
new ordinary shares in the Company at an exercise price of
10p per share.
ICJL and Sitius Limited completed their subscriptions to
these shares, following the publication of the Company's
Prospectus on 17 March, raising gross proceeds of GBP6.0
million, net GBP5.6 million.
27 Adoption of IFRS 16
The Group has adopted IFRS 16 using the modified retrospective
approach with the effect of applying the standard opening
balance sheet has been restated to reflect the impact of
the adoption of IFRS 16 - leases. The lease for the Group's
only premises at Unit 1, Ninian Way, Wilnecote, Tamworth
has been restated as finance lease showing both the property
asset and associated lease liability in the Statement of
Financial Position.
Future rental obligations are now disclosed as their net
present cost within loans and borrowings and operating lease
commitments and are no longer reported. The key impacts
on the statement of Comprehensive Income and Statement of
Financial Position are as follows:
Lease liability Right of Income statement
use asset GBP
GBP GBP
Balance on transition
Recognised on adoption
of IFRS 16 on 1 November
2019 (87,847) 84,249
Depreciation - (26,605) (26,605)
Interest (6,788) - (6,788)
Lease payments 33,500 - -
---------------- ----------- -----------------
Carrying value at
31 October 2020 (61,135) 57,644 (33,393)
---------------- ----------- -----------------
An implied interest rate of 9.33% has been applied by the
Company to reflect the Company's cost of finance and used
determine the net present value of the lease liability.
28 Business combination
On 13 March 2020, the Group acquired the entire share capital
of Phenix Digital Limited, a multi-service digital agency
within the education sector ("Phenix") for a mixture of cash
consideration of GBP100,000 and the issue of 3,571,429 new
ordinary shares of 1p each in the capital of Dev Clever Holdings.
The acquisition is expected to accelerate the launch of the
Group's career's education platforms, Launchyourcareer.com
and VICTAR VR by securing dedicated sales and marketing resource,
with experience within the Education sector. Total acquisition-related
costs totalled GBP27,755, of which GBP13,855 was charged
to administrative expenses within the Statement of Comprehensive
income in the current financial year (2019: GBP13,900).
Details of the purchase consideration, the net assets acquired,
and goodwill are as follows:
Shares / Fair value
share options of consideration
Total consideration No. GBP
Cash 100,000
Consideration shares 3,571,439 83,928
183,928
The market value of Dev Clever Holdings shares at the time
of acquisition was 2.35p. The fair values of the share options
have been calculated using the Black Scholes model as detailed
in note 9.
The assets and liabilities recognised on acquisition are
as follows:
Fair value
GBP
Non-current assets
Property, plant & equipment 1,750
Deferred tax asset 638
2,388
Current assets
Trade & other receivables 19,838
------------------
19,838
Current Liabilities
Trade & other payables (110,651)
Loans and borrowings: amounts
falling due within one year (22,166)
------------------
(132,817)
Non-current liabilities
Loans and borrowings: amounts
falling due after more than one
year (6,100)
(6,100)
Net identifiable liabilities acquired (116,691)
Add: Customer relationship intangible
asset 74,659
Less: Deferred tax on customer
relationship intangible asset (14,185)
Add: Goodwill 240,145
------------------
183,928
------------------
The fair value of the acquired customer relationships and
associated customer contracts of GBP74,659 represents the
discounted value of contractually committed web hosting and
customer service agreements at the date of acquisition, applying
a discount rate of 9.3%. Deferred tax of GBP14,185 has been
provided in relation to these fair value adjustments.
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.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
END
FR UWUARANUOUUR
(END) Dow Jones Newswires
March 29, 2021 02:00 ET (06:00 GMT)
1 Year Dev Clever Chart |
1 Month Dev Clever 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
