Share Name Share Symbol Market Type Share ISIN Share Description
Dillistone Group Plc LSE:DSG London Ordinary Share GB00B13QQB40 ORD 5P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.0% 34.50 32.00 37.00 34.50 34.50 34.50 0.00 08:00:09
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Support Services 8.7 -0.5 -1.3 - 7

Dillistone Group PLC Half-year Report

27/09/2019 7:00am

UK Regulatory (RNS & others)


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Dillistone Group PLC

27 September 2019

Dillistone Group Plc

("Dillistone", the "Company" or the "Group")

Interim Results

The Board of Dillistone Group Plc, the AIM quoted supplier of software for the international recruitment industry, is pleased to announce its Interim Results for the six months ended 30 June 2019.

Key points of the unaudited interim report for the six months ended 30 June 2019

   --    Reorganisation progressing well 
   --    Recurring revenue of GBP3.5m (2018: GBP3.6m) 
   --    Recurring revenues represent 83% of total revenue (2018: 81%) 
   --    Both Dillistone Systems and Voyager Software divisions profitable 

-- Reduced loss in https://www.GatedTalent.com division of GBP(0.257m) (2018: loss of GBP0.315m) based on significant revenue growth to GBP0.134m (2018: GBP0.014m). Division now approximately at EBITDA breakeven (before Group charges) on a monthly basis.

-- Operating loss of GBP0.044m before acquisition and reorganisation related items (2018 profit: GBP0.17m)

   --    Group is cash generative at an operational level 
   --    Reorganisation costs incurred in period totalled GBP0.115m 
   --    Cash balances of GBP0.769m at 30 June 2019 (30 June 2018: GBP1.065m) 
   --    Bank loan of GBP0.5m received in June 2019 to finance reorganisation 

Commenting on the results and prospects, Mike Love, Non-Executive Chairman, said:

"The reorganisation and transfer of operations to Basingstoke is progressing to plan and we are on track with delivering the anticipated cost savings and improved efficiencies within the business. We anticipate that our two largest divisions, Dillistone Systems and Voyager Software, will both be profitable in 2019. GatedTalent is now enjoying month on month revenue growth and while - as expected - it will be loss making in the full year, we anticipate that it will make a profit at EBITDA level (before Group charges) in the fourth quarter. We are confident that the Group will move back into sustained profitable trading with positive cashflows next year. However, with the continuing uncertainty over Brexit in the UK, and ongoing economic uncertainty in the wider world, the Group does expect revenue to be down on its previous expectations and this will result in a loss in the year to 31 December 2019."

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

Enquiries:

 
 Dillistone Group 
  Plc 
 Mike Love                        Chairman                                     Via Walbrook PR 
 Jason Starr                      Chief Executive 
 Julie Pomeroy                    Finance Director 
 
 WH Ireland Limited (Nominated 
  adviser) 
                                  Managing Director - Corporate 
 Chris Fielding                   Finance & COO CIB                              020 7220 1650 
 
 Walbrook PR 
 Tom Cooper / 
  Paul Vann                                                                      020 7933 8780 
                                                                                 0797 122 1972 
                                                                     tom.cooper@walbrookpr.com 
 
 

Notes to Editors:

Dillistone Group Plc (www.dillistonegroup.com) is a leader in the supply and support of software and services to the recruitment industry. It has five brands operating through three divisions: Dillistone Systems, which targets the executive search industry (www.dillistone.com); Voyager Software, which targets other recruitment markets (www.voyagersoftware.com); and GatedTalent, the next generation executive recruitment platform (www.GatedTalent.com).

Dillistone has made three acquisitions: Voyager Software in September 2011, FCP Internet in July 2013 and ISV Software in September 2014. The Group operates under the FileFinder, Infinity, Evolve, ISV and GatedTalent brands.

Dillistone was admitted to AIM, a market operated by the London Stock Exchange plc, in June 2006. The Group employs over 100 people globally with offices in Basingstoke, Eastleigh, Frankfurt, New Jersey and Sydney.

Dillistone Group websites and publicly available resources include:

Dillistone Systems: https://www.Dillistone.com

FileFinder: https://www.dillistone.com/executive-search-software/

ISV Skills Testing: https://www.ISV.online

Introducing Voyager: https://www.Voyagersoftware.com

Voyager Business Intelligence: https://www.voyagersoftware.com/recruitment-software-blog/introducing-new-voyager-business-intelligence.html

Voyager Infinity: https://www.voyagersoftware.com/products/infinity-connected-recruitment-software.html

GatedTalent: https://www.GatedTalent.com

How CEOs are hired: https://www.gatedtalent.com/insights/ceo-jobs-and-the-executive-career-strategy/

Advice for Executives: https://www.gatedtalent.com/insights/executive-jobs-search-advice-from-executive-recruiters/

What is Executive Search: https://www.gatedtalent.com/insights/what-is-executive-search/

What is Retained Executive Search?: https://www.gatedtalent.com/insights/retained-executive-search-firm/

Executive job boards: https://www.gatedtalent.com/insights/how-do-executives-find-jobs-not-on-executive-job-boards/

Advice for Executive Interviews: https://www.gatedtalent.com/insights/executive-interview-questions-from-top-executive-search-firms-2019/

How to optimize your LinkedIn profile: https://www.gatedtalent.com/insights/linkedin-profile-optimization-for-executives/

How do search firms find executives? https://www.gatedtalent.com/insights/how-executive-search-firms-find-candidates/

LinkedIn Profile Optimization service: https://www.gatedtalent.com/optimization-services/

The Executive Search Process: https://www.gatedtalent.com/insights/what-is-the-retained-executive-search-process/

Headhunters, and why they won't get you a job: https://www.gatedtalent.com/insights/headhunters-find-a-job/

Chairman's Statement

The Group reorganisation exercise announced in February is progressing well with the expanded office space in Basingstoke fully functional. Our London facility largely closed on 30 August, and we will have exited the building prior to the year end, in line with our plan. We are in the process of relocating our Eastleigh offices and this will be completed in Q4.

We are now beginning to see the benefits of the reorganisation with teams across the businesses being increasingly integrated. The ability to leverage knowledge across the Group is helping to accelerate performance and improve the quality of our services to our clients. This is particularly noticeable in our product development effort, which allows us to use skills developed for one product to be more rapidly deployed into other products. We expect to launch additional functionality for our Dillistone, Voyager and GatedTalent divisions later this year, with a significant amount of 'cross team' effort having underpinned this work.

In the six months to June 2019 we have incurred GBP0.115m in reorganisation costs, which include redundancy and severance payments as well as duplicate running costs. These costs will continue to be incurred with the closure of the office in London and the final steps in the reorganisation being completed in the second half of the year. We've previously stated that these costs are likely to be in the region of GBP0.500m-GBP0.900m. Our current expectations are that these costs are likely to be less than GBP0.600m. The reorganisation is being funded through our own cash resources and from a bank loan of GBP0.500m taken out in June 2019. Starting in 2020, the reorganised business will allow us to deliver improved results to our shareholders and improved services to our clients.

Revenue amounted to GBP4.183m, down GBP0.267m (6%) of which GBP0.130m related to the previously announced loss of a major client in 2018. Recurring revenues represented 83% of revenues (2018: 81%). Loss for the period was GBP(0.320m) (2018: GBP(0.173m) and incorporated the loss in the GatedTalent division of GBP0.257m (2018: loss of GBP0.315m). Orders in the 6 months to 30 June 2018 significantly benefited from the introduction of the GDPR in May 2018 and accordingly 2019 orders are down on the same period in 2018. However, orders are broadly in line with those in the second half of 2018.

Divisional review

Dillistone Systems (https://www.dillistone.com) reported revenues of GBP2.101m (2018: GBP2.122m). Divisional profits have doubled to GBP0.200m (2018: GBP0.100m). The period has seen development work focussed on enhancing the product such that it is easier to deploy and with improved usability. The initial release of these developments will commence later in the year.

Voyager Software (https://www.voyagersoftware.com) reported revenues of GBP1.948m (2018: GBP2.314m) with recurring revenue down GBP0.224m to GBP1.588m due mainly to the loss of the major legacy contract in February 2018. The fall in revenue is also, in part, due to a change in business model on the sale of one of the Voyager products which has resulted in lower revenues but higher margins. The overall effect of this change is essentially neutral in the period. Divisional profits reduced to GBP0.139m (2018: GBP0.307m) in the period.

GatedTalent's (https://www.gatedtalent.com ) revenue increased significantly in the period rising to GBP0.134m (2018: GBP0.014m) and continues to grow on a monthly basis. An increasing proportion of revenue comes from sale of services to individuals rather than to businesses. In the period, it made a loss of GBP(0.257m) (2018: loss of GBP0.315m). While we anticipate continue healthy growth in revenues, GatedTalent is nevertheless expected to be loss making in 2019.

Financial Performance

Revenue in the six months ended 30 June 2019 decreased by 6% to GBP4.183m (2018: GBP4.450m). Recurring revenues decreased by 4% to GBP3.469m over the comparable period last year (2018: GBP3.626m) and represented 83% of total revenues (2018: 81%). Non-recurring revenues were down at GBP0.549m (2018: GBP0.601m).

Cost of sales reduced by GBP0.153m in H1 2019 due to lower third-party costs resulting from the change in business model of two of the Voyager products and in part due to the loss of the major contract in 2018. Excluding amortisation and depreciation, administration expenses reduced by GBP0.195m in H1 2019, again in part due to the lost contract and also through appropriate cost savings. In addition, the impact of IFRS 16 was to reduce administration costs in 2019 by GBP0.060m, while increasing amortisation by GBP0.051m and interest cost by GBP0.017m. Excluding acquisition related items, depreciation and amortisation increased 24% to GBP0.729m (2018: GBP0.587m) including the IFRS 16 adjustment. Administrative costs also include GBP0.198m (2018: GBP0.235m) relating to the amortisation of acquisition intangibles and reorganisation costs of GBP0.115m (2018: GBPnil). The loss for the period before taxation increased to GBP0.397m (2018: GBP0.234m).

There is a tax credit for the period of GBP0.077m (2018: credit GBP0.061m). The 2018 and 2019 tax credits have benefited from claims in the UK for research and development tax credits reflecting the continuing development of our products.

Cash generated from operating activities was GBP0.225m (2018: GBP0.617m). Total cash flows in the 6 months ended 30 June 2019 showed a net inflow of GBP0.063m (2018: outflow GBP0.318m). The main elements of non-operating expenditure related to investment in new product development of GBP0.615m (2018: GBP0.748m) and the net receipt of GBP0.493m from the bank loan. At 30 June 2019, we had cash reserves of GBP0.769m (2018: GBP1.065m) and GBP0.885m in borrowings (2018: GBP0.401m).

In view of the short term cost associated with the restructuring process, the Board has decided not to pay an interim dividend this year.

Strategy

The Group is well down the path of streamlining our business, as announced in 2019. However, we continue to invest in our future, with significant new product functionality expected on our FileFinder, Infinity and GatedTalent platforms in the coming months.

Outlook

While we have some final steps still to complete, we are pleased to report that the cost of our restructuring process is expected to be at the lower end of expectations. Additionally, our anticipation is that the level of running costs taken out of the business will be as good if not better than we had previously hoped. We expect both Dillistone Systems and Voyager Software to be profitable in the full year, with GatedTalent reporting reduced losses on higher revenue. However, with the continuing uncertainty over Brexit in the UK, and ongoing economic uncertainty in the wider world, the Group does expect revenue to be down on its previous expectations and this will result in a loss in the year to 31 December 2019. In the longer term, the reduced cost base of the Group, along with the improved operating structure and our ongoing investment in product development will deliver growth in the business.

Next year, we fully expect to trade profitably and to generate cash.

Mike Love

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 
                                     Note      6 Months ended       Year ended 
                                                   30 June              31 Dec 
                                                 2019        2018         2018 
                                            Unaudited   Unaudited      Audited 
                                              GBP'000     GBP'000      GBP'000 
 Revenue                              4         4,183       4,450        8,692 
 Cost of sales                                  (419)       (572)      (1,054) 
                                           ----------  ----------  ----------- 
 Gross profit                                   3,764       3,878        7,638 
 Administrative expenses                      (4,121)     (4,096)      (8,052) 
                                           ----------  ----------  ----------- 
 
 Result from operating activities     4         (357)       (218)        (414) 
 
 Analysed as: 
 Result from operating activities 
  before acquisition related 
  items                                          (44)          17           55 
 
 Acquisition and reorganisation 
  related items                       5         (313)       (235)        (469) 
                                           ----------  ----------  ----------- 
 Result after acquisition related 
  items                                         (357)       (218)        (414) 
-----------------------------------------  ----------  ----------  ----------- 
 
 Financial income                                   -           -            1 
 Financial cost                                  (40)        (16)         (38) 
                                           ----------  ----------  ----------- 
 (Loss) before tax                              (397)       (234)        (451) 
 
 Tax income                           6            77          61          191 
                                           ----------  ----------  ----------- 
 (Loss) for the period                          (320)       (173)        (260) 
 
 Other comprehensive income net 
  of tax: 
 Currency translation differences                (26)         (3)         (30) 
                                           ----------  ----------  ----------- 
 Total comprehensive (loss) 
  for period net of tax                         (346)       (176)        (290) 
                                           ----------  ----------  ----------- 
 
 Earnings per share (pence) 
 Basic                                8        (1.63)      (0.88)       (1.32) 
 Diluted                                       (1.63)      (0.88)       (1.32) 
 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 
 
                                             As at 30 June         As at 
                                          2019        2018   31 Dec 2018 
                                     Unaudited   Unaudited       Audited 
 ASSETS                                GBP'000     GBP'000       GBP'000 
 Non-current assets 
 Goodwill                                3,415       3,415         3,415 
 Intangible assets                       4,542       4,728         4,754 
 Right of use assets                       763           -             - 
 Property plant & equipment                 69         279           113 
                                    ----------  ----------  ------------ 
                                         8,789       8,422         8,282 
 Current assets 
 Inventories                                 2           3             3 
 Trade and other receivables             1,750       1,883         1,522 
 Cash and cash equivalents                 769       1,065           725 
                                    ----------  ----------  ------------ 
                                         2,521       2,951         2,250 
                                    ----------  ----------  ------------ 
 Total assets                           11,310      11,373        10,532 
                                    ----------  ----------  ------------ 
 
 EQUITY AND LIABILITIES 
 Equity 
 Share capital                             983         983           983 
 Share premium                           1,631       1,631         1,631 
 Merger reserve                            365         365           365 
 Convertible loan reserve                   14          14            14 
 Retained earnings                       1,367       1,872         1,687 
 Share option reserve                      112          99           106 
 Translation reserve                        37          90            63 
                                    ----------  ----------  ------------ 
 Total equity                            4,509       5,054         4,849 
 
 Liabilities 
 Non current liabilities 
 Trade and other payables                  559         732           690 
 Lease liabilities                         772           -             - 
 Borrowings                                645         388           390 
 Deferred tax                              393         543           489 
 Current liabilities 
 Trade and other payables                4,265       4,886         4,370 
 Lease liabilities                          39           -             - 
 Borrowings                                240          13            14 
 Current tax (receivable)/payable        (112)       (243)         (270) 
                                    ----------  ----------  ------------ 
 Total liabilities                       6,801       6,319         5,683 
 
 Total liabilities and equity           11,310      11,373        10,532 
                                    ----------  ----------  ------------ 
 

The interim report was approved by the Board of directors and authorised for issue on 26 September 2019. They were signed on its behalf by:

   JS Starr                                               J P Pomeroy 

CONSOLIDATED STATEMENT OF CASH FLOWS

 
 
                                                      As at 30 June 
                                                       2019         2018       2018 
                                                  Unaudited    Unaudited    Audited 
 
                                                    GBP'000      GBP'000    GBP'000 
 Operating Activities 
 (Loss) before tax                                    (397)        (234)      (451) 
 Adjustment for 
  Financial income                                        -            -        (1) 
  Financial cost                                         40           16         38 
  Depreciation and amortisation                         918          822      1,714 
  Share option (gain)/expense                             6          (2)          5 
  Other including foreign exchange adjustments 
   arising from operations                             (20)            4         70 
 Operating cash flows before movements 
  in working capital                                    547          606      1,375 
 
 (Decrease)/increase in receivables                   (234)        (219)        171 
 Decrease in inventories                                  1            1          - 
 Increase/(decrease) in payables                      (229)          206      (471) 
 Add taxation repaid                                    140           23         65 
 
 Net cash generated from operating activities           225          617      1,140 
                                                 ----------  -----------  --------- 
 
 Investing Activities 
 Interest received                                        -            -          1 
 Purchases of property plant and equipment              (7)         (36)       (55) 
 Proceeds from sale of assets                            10            -          - 
 Investment in development costs                      (615)        (748)    (1,481) 
 Contingent consideration paid                            -        (146)      (146) 
                                                 ----------  -----------  --------- 
 Net cash used in investing activities                (612)        (930)    (1,681) 
                                                 ----------  -----------  --------- 
 
 Financing Activities 
 Finance cost                                          (23)          (5)       (33) 
 Payment of lease obligations                          (20)            -          - 
 Bank Loan less repayments                              493            -          - 
 Dividends paid                                           -            -       (98) 
                                                 ----------  -----------  --------- 
 Net cash generated from/(used in) financing 
  activities                                            450          (5)      (131) 
                                                 ----------  -----------  --------- 
 
 Net change in cash and cash equivalents                 63        (318)      (672) 
 Cash and cash equivalents at beginning 
  of the period                                         725        1,390      1,390 
 Effect of foreign exchange rate changes               (19)          (7)          7 
 
 Cash and cash equivalents at end of 
  period                                                769        1,065        725 
                                                 ----------  -----------  --------- 
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 
                               Share      Share     Merger   Retained    Convertible      Share    Foreign     Total 
                             capital    premium    Reserve   earnings   loan reserve     option   exchange 
                             GBP'000    GBP'000    GBP'000    GBP'000        GBP'000    GBP'000    GBP'000   GBP'000 
 
 Balance at 31 December 
  2018                           983      1,631        365      1,687             14        106         63     4,849 
 Comprehensive income 
 Loss for the 6 
  months ended 30 
  June 2019                        -          -          -      (320)              -          -          -     (320) 
 Other comprehensive                                                                                               - 
  income 
 Exchange differences 
  on translation 
  of overseas operations           -          -          -          -              -          -       (26)      (26) 
 Total comprehensive 
  (loss)                           -          -          -      (320)              -          -       (26)     (346) 
                           ---------  ---------  ---------  ---------  -------------  ---------  ---------  -------- 
 Transactions with 
  owners 
 Share option charge               -          -          -          -              -          6          -         6 
 
 Balance at 30 June 
  2019                           983      1,631        365      1,367             14        112         37     4,509 
                           ---------  ---------  ---------  ---------  -------------  ---------  ---------  -------- 
 
 Balance at 31 December 
  2017                           983      1,631        365      2,045             14        101         93     5,232 
 Comprehensive income 
 Loss for the 6 
  months ended 30 
  June 2018                        -          -          -      (173)              -          -          -     (173) 
 Other comprehensive                                                                                               - 
  income 
 Exchange differences 
  on translation 
  of overseas operations           -          -          -          -              -          -        (3)       (3) 
 Total comprehensive 
  (loss)                           -          -          -      (173)              -          -        (3)     (176) 
                           ---------  ---------  ---------  ---------  -------------  ---------  ---------  -------- 
 Transactions with 
  owners 
 Share option charge               -          -          -          -              -        (2)          -       (2) 
 
 Balance at 30 June 
  2018                           983      1,631        365      1,872             14         99         90     5,054 
                           ---------  ---------  ---------  ---------  -------------  ---------  ---------  -------- 
 

NOTES TO THE INTERIM

 
  NOTES TO THE UNAUDITED INTERIM REPORT 
 

CONSOLIDATED STATEMENT OF

   1.         Basis of Preparation 

The financial information for the six months ended 30 June 2019 included in this condensed interim report comprises the consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated statement of cash flows, the consolidated statement of changes in equity and the related notes.

The financial information in these interim results is that of the holding company and all of its subsidiaries (the Group). It has been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards as adopted for use in the EU (IFRSs) but does not include all of the disclosures that would be required under IFRSs. The accounting policies applied by the Group in this financial information are the same as those applied by the Group in its financial statements for the year ended 31 December 2018 and are those which will form the basis of the 2019 financial statements other than IFRS 16 which came into force on 1 January 2019.

IFRS 16 requires the recognition of a right-of-use asset and lease liability for all leases. The Group has adopted the standard in full using the modified retrospective approach, whereby the right-of-use asset is recognised at the date of initial application (1 January 2019) and the lease liability is measured based on remaining payments. There is no effect on prior year figures and no need to re-state comparatives (refer to note 9 for further details).

The comparative financial information presented herein for the year ended 31 December 2018 does not constitute full statutory accounts for that period. The Group's annual report and accounts for the year ended 31 December 2018 have been delivered to the Registrar of Companies. The Group's independent auditor's report on those statutory accounts was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

In preparing the interim financial statements the directors have considered the Group's financial projections, borrowing facilities and other relevant financial matters, and the board is satisfied that there is a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason, the directors continue to adopt the going concern basis in preparing the financial statements.

Dillistone Group Plc is the Group's ultimate parent company. It is a public listed company and is domiciled in the United Kingdom. The address of its registered office and principal place of business is 12 Cedarwood, Crockford Lane, Chineham Business Park, Basingstoke, RG24 8WD. Dillistone Group Plc's shares are listed on the Alternative Investment Market (AIM).

   2.         Share Based Payments 

The Company operates two share option schemes. The fair value of the options granted under these schemes is recognised as an employee expense with a corresponding increase in equity. The fair value is measured at grant date and spread over the period at the end of which the option holder may exercise the option. The fair value of the options granted is measured using the Black-Scholes model.

3. Reconciliation of adjusted operating profits to consolidated statement of comprehensive income

30 June 2019 and 30 June 2018

 
                          Adjusted          Acquisition                 Adjusted           Acquisition 
                         operating   and reorganisation                operating    and reorganisation 
                           profits              related                  profits               related 
                                                  items                                          items 
                         30-Jun-19                2019*   30-Jun-19    30-Jun-18                 2018*   30-Jun-18 
 
                           GBP'000              GBP'000     GBP'000      GBP'000               GBP'000     GBP'000 
 
 Revenue                     4,183                    -       4,183        4,450                     -       4,450 
 
 Cost of sales               (419)                    -       (419)        (572)                     -       (572) 
 
 Gross profit                3,764                    -       3,764        3,878                     -       3,878 
 
 Administrative 
  expenses                 (3,808)                (313)     (4,121)      (3,861)                 (235)     (4,096) 
 
 Results from 
  operating 
  activities                  (44)                (313)       (357)           17                 (235)       (218) 
 
 Financial income                -                    -           -            -                     -           - 
 Financial cost               (38)                  (2)        (40)         (16)                     -        (16) 
 
 Profit/(loss) before 
  tax                         (82)                (315)       (397)            1                 (235)       (234) 
 
 Tax expense/(income)           40                   37          77           16                    45          61 
 
 Profit/(loss) for 
  the year                    (42)                (278)       (320)           17                 (190)       (173) 
 
 Other comprehensive 
  income net of tax: 
 Currency translation 
  differences                 (26)                    -        (26)          (3)                     -         (3) 
 
 Total comprehensive 
  income/ (loss) for 
  the year net of tax         (68)                (278)       (346)           14                 (190)       (176) 
                       -----------  -------------------  ----------  -----------  --------------------  ---------- 
 

Earnings per share - from continuing activities

 
 Basic        (0.21)p        (1.63)p   0.09p     (0.88)p 
 Diluted      (0.21)p       (1.63)p    0.09p   (0.88)p 
 
 

* see accounts note 5

31 December 2018

 
                                          Adjusted           Acquisition 
                                         operating    and reorganisation 
                                           profits               related 
                                                                   items 
                                       31 December                 2018*     31 December 
                                              2018                                  2018 
 
                                           GBP'000               GBP'000         GBP'000 
 
 Revenue                                     8,692                     -         8,692 
 
 Cost of sales                             (1,054)                     -       (1,054) 
                                      ------------  --------------------  ------------ 
 
 Gross profit                                7,638                     -         7,638 
 
 Administrative expenses                   (7,583)                 (469)       (8,052) 
 
 Results from operating activities              55                 (469)         (414) 
 
 Financial income                                1                     -               1 
 Financial cost                               (38)                     -            (38) 
 
 Profit/(loss) before tax                       18                 (469)           (451) 
 
 Tax income                                    102                    89             191 
 
 Profit for the year                           120                 (380)           (260) 
 
 Other comprehensive income 
  net of tax: 
 Currency translation differences             (30)                     -            (30) 
 
 Total comprehensive income/(loss) 
  for the year net of tax                       90                 (380)           (290) 
                                      ============  ====================  ============== 
 

Earnings per share - from continuing activities

 
 Basic      0.61p   (1.32)p 
 Diluted    0.61p   (1.32)p 
 

* see accounts note 5

   4.         Segment reporting 
 
                                                                       Year ended 
                                              6 months ended 30 June       31 Dec 
                                                      2019      2018         2018 
                                                   GBP'000   GBP'000      GBP'000 
 Revenue 
 Dillistone Systems                                  2,101     2,122        4,195 
 GatedTalent                                           134        14           68 
 Voyager Software                                    1,948     2,314        4,429 
 Total revenue                                       4,183     4,450        8,692 
                                   -----------------------  --------  ----------- 
 Results by division 
                                                                       Year ended 
                                              6 months ended 30 June       31 Dec 
                                                      2019      2018         2018 
                                                   GBP'000   GBP'000      GBP'000 
 
 Results from operating activities 
 Dillistone Systems                                    200       100           79 
 GatedTalent                                         (257)     (315)        (612) 
 Voyager Software                                      139       307          528 
                                   -----------------------  --------  ----------- 
                                                        82        92          (5) 
 
 Central                                             (126)      (75)           60 
 
 Amortisation of acquisition 
  intangibles and reorganisation 
  costs                                              (313)     (235)        (469) 
 Result from operating 
  activities                                         (357)     (218)        (414) 
                                   =======================  ========  =========== 
 
 
 
 
   Geographical segments 
 The following table provides an analysis of the Group's revenues 
  by geographical market. 
                                                                                            Year ended 
                                                         6 months ended 30 June                 31 Dec 
                                                                           2019      2018         2018 
                                                                        GBP'000   GBP'000      GBP'000 
 UK                                                                       2,888     3,189        6,188 
 Europe                                                                     480       518        1,007 
 US                                                                         624       562        1,118 
 Australia                                                                  191       181          379 
                                                                          4,183     4,450        8,692 
                                                        =======================  ========  =========== 
 
 
 
 
 
   Business Segment 
 The following table provides an analysis of the Group's revenues 
  by products and services. 
                                                                                                    Year ended 
                                                                           6 months ended 30 June       31 Dec 
                                                                                   2019      2018         2018 
                                                                                GBP'000   GBP'000      GBP'000 
 Recurring                                                                        3,469     3,626        7,154 
 Non recurring                                                                      549       601        1,169 
 Third party revenues                                                               165       223          369 
                                                                                  4,183     4,450        8,692 
                                                                =======================  ========  =========== 
 
 
   'Recurring income' represents all income recognised over time, 
   whereas 'Non-recurring income' represents all income recognised 
   at a point in time. Recurring income includes all support services, 
   software as a service income (SaaS) and hosting income. Non-recurring 
   income includes sales of new licenses, and income derived from 
   installing those licenses including training, installation, and 
   data translation. Third party revenues arise from the sale of 
   third party software. 
 
 
   5.         Acquisition related items and reorganisation costs 
 
                                                           Year ended 
                                  6 months ended 30 June       31 Dec 
                                       2019         2018         2018 
                                    GBP'000      GBP'000      GBP'000 
 Reorganisation costs                   115            -            - 
 Amortisation of acquisition 
  intangibles                           198          235          469 
 
 
                                        313          235          469 
 Interest on bank loan to 
  finance reorganisation                  2            -            - 
 
 Total                                  315          235          469 
                               ============  ===========  =========== 
 
   6.         Tax 
 
                                                                Year ended 
                                       6 months ended 30 June       31 Dec 
                                            2019         2018         2018 
                                         GBP'000      GBP'000      GBP'000 
 
 Current tax                                  18         (96)        (165) 
 Prior year adjustment - current 
  tax                                          -            -          (7) 
 Deferred tax charge/(release)              (58)           80           64 
 Prior year adjustment - deferred 
  tax                                          -            -            6 
 Deferred tax re acquisition 
  intangibles                               (37)         (45)         (89) 
 Tax (income) for the period                (77)         (61)        (191) 
                                    ============  ===========  =========== 
 

The tax charge is impacted by the higher rates of corporation tax payable in the US and Australia offset by the R&D tax credits available to both Dillistone Systems and Voyager Software and GatedTalent Limited. Deferred tax has been provided at rates between 19% and 17%.

   7.         Dividends 

In view of its continuing investment in GatedTalent, the Board has decided not to pay an interim dividend (2018: nil per share).

   8.         Earnings per Share 
 
                                                                     Year ended 
                                          6 months ended 30 June         31 Dec 
                                             2019           2018           2018 
 
 Basic earnings per share 
 (Loss) attributable to ordinary 
  shareholders                       GBP(320,000)   GBP(173,000)   GBP(260,000) 
 
 Weighted average number of 
  shares                               19,668,021     19,668,021     19,668,021 
 
 Basic (loss) per share (pence)            (1.63)         (0.88)         (1.32) 
                                    =============  =============  ============= 
 
 Diluted earnings per share 
 (Loss) attributable to ordinary     GBP(320,000)   GBP(173,000)   GBP(260,000) 
  shareholders 
 
 Diluted weighted average number 
  of shares                            19,668,021     19,668,021     19,668,021 
 
 Diluted (loss) per share (pence)          (1.63)         (0.88)         (1.32) 
                                    =============  =============  ============= 
 
   9.         Effect of IFRS 16 

The Group adopted IFRS16 "Leases" with effect from 1 January 2019. For relevant transactions this has resulted in the group recognising right-of-use assets and lease liabilities in the statement of financial position, and finance costs and depreciation in the statement of comprehensive income. Leases classified as operating leases under previous accounting requirements did not require recognition of related assets or liabilities. Instead the lease payments were recognised in the statement of comprehensive income on a straight-line basis over the lease term.

The Group has applied the modified retrospective approach method with recognition of transitional adjustments on the date of initial application, being 1 January 2019, without restatement of comparative figures. In addition, IFRS 16 allows for a practical expedient not to recognise right-of-use assets and liabilities for leases with less than 12 months of lease term remaining as of the date of initial application, which the Group has applied.

On adoption of IFRS 16, the Group recognised right-of-use assets and lease liabilities in relation to leases of office space. The right-of-use assets were recognised by reference to the measurement of the lease liability on that date. Lease liabilities were measured at the present value of the remaining lease payments, including estimates for items such as dilapidation cost obligations under the lease, discounted using the Group's incremental borrowing rate (being the rate at which a similar borrowing could be obtained from an independent creditor under comparable terms and conditions). The rate applied was 5%. Right-of-use assets are amortised on a straight-line basis.

The effects of adopting IFRS 16 for the periods ending 30 June 2019 are as follows:

Impact on the Consolidated Interim Statement of Comprehensive Income:

 
                                       As        IFRS16   Amounts without 
 (Unaudited)                     reported   adjustments          adoption 
                                                                of IFRS16 
                                   GBP000        GBP000            GBP000 
                                ---------  ------------  ---------------- 
 Revenue                            4,183             -             4,183 
 Cost of sales                      (419)             -             (419) 
------------------------------  ---------  ------------  ---------------- 
 Gross profit                       3,764             -             3,764 
 Administrative expenses          (4,121)           (9)           (4,130) 
------------------------------  ---------  ------------  ---------------- 
 Profit from operations             (357)           (9)             (366) 
 Finance expense                     (40)            17              (23) 
------------------------------  ---------  ------------  ---------------- 
 Profit before tax                  (397)             8             (389) 
 Tax income                            77             -                77 
------------------------------  ---------  ------------  ---------------- 
 Total comprehensive income 
  for the year                      (320)             8             (312) 
------------------------------  ---------  ------------  ---------------- 
 
 Earnings per ordinary share: 
------------------------------  ---------  ------------  ---------------- 
 Basic                            (1.63)p             -           (1.59)p 
------------------------------  ---------  ------------  ---------------- 
 Diluted                          (1.63)p             -           (1.59)p 
------------------------------  ---------  ------------  ---------------- 
 
 
 Impact on the Consolidated Interim Statement 
  of Financial Position: 
                                 As reported        IFRS16   Amounts without 
                                                               adoption of 
                                                                  IFRS16 
 
 (Unaudited)                                   adjustments 
 
                                     GBP'000       GBP'000           GBP'000 
                                ------------  ------------  ---------------- 
 
 Non-current assets 
 Goodwill                              3,415             -             3,415 
 Other intangible 
  assets                               4,542             -             4,542 
 Property, plant and 
  equipment                               69             -                69 
 Right-of-use assets                     763         (763)                 - 
                                       8,789         (763)             8,026 
 Current assets 
 Inventories                               2             -                 2 
 Trade and other receivables           1,750             -             1,750 
 Cash and cash equivalents               769             -               769 
------------------------------                ------------  ---------------- 
 Total current assets                  2,521             -             2,521 
                                ------------  ------------  ---------------- 
 Total assets                         11,310         (763)            10,547 
------------------------------  ------------  ------------  ---------------- 
 
 Liabilities 
 Current 
 Trade and other payables            (4,265)          (40)           (4,305) 
 Lease liabilities                      (39)            39                 - 
 Corporation tax                         112             -               112 
 Current borrowings                    (240)             -             (240) 
------------------------------  ------------  ------------  ---------------- 
 Total current liabilities           (4,432)           (1)           (4,433) 
 
 Non-current liabilities 
 Trade and other payables              (559)             -             (559) 
 Lease liabilities                     (772)           772                 - 
 Borrowings                            (645)             -             (645) 
 Deferred tax liabilities              (393)             -             (393) 
------------------------------  ------------  ------------  ---------------- 
 Net assets                            4,509             8             4,517 
------------------------------  ------------  ------------  ---------------- 
 
 Equity 
 Share capital                           983             -               983 
 Share premium                         1,631             -             1,631 
 Merger reserve                          365             -               365 
 Convertible loan 
  reserve                                 14             -                14 
 Retained earnings                     1,367             8             1,375 
 Share option reserve                    112             -               112 
 Translation reserve                      37             -                37 
                                                            ---------------- 
 Total equity                          4,509             8             4,517 
------------------------------  ------------  ------------  ---------------- 
 
 
   Impact on the Consolidated Interim Statement 
   of Cash Flows: 
 
 Unaudited                                     As reported            IFRS16   Amounts without 
                                                                 adjustments          adoption 
                                                                                     of IFRS16 
 
                                                   GBP'000           GBP'000           GBP'000 
 Operating Activities 
 (Loss) before tax                                   (397)                 8             (389) 
 Adjustment for 
  Financial cost                                        40              (17)                23 
  Depreciation and amortisation                        918              (51)               867 
  Share option (gain)/expense                            6                 -                 6 
  Other including foreign exchange 
   adjustments arising from operations                (20)                 -              (20) 
 Operating cash flows before movements 
  in working capital                                   547              (60)               487 
 
 (Decrease) in receivables                           (234)                 -             (234) 
 Decrease in inventories                                 1                 -                 1 
 Increase/(decrease) in payables                     (231)                40             (191) 
 Add taxation repaid                                   140                 -               140 
 
 Net cash generated from operating 
  activities                                           223              (20)               203 
                                              ------------  ----------------  ---------------- 
 
 Investing Activities 
 Purchases of property plant and 
  equipment                                            (7)                 -               (7) 
 Proceeds from sale of assets                           10                 -                10 
 Investment in development costs                     (615)                 -             (615) 
 Contingent consideration paid                           -                 -                 - 
                                              ------------  ----------------  ---------------- 
 Net cash used in investing activities               (612)                 -             (612) 
                                              ------------  ----------------  ---------------- 
 
 Financing Activities 
 Finance cost                                         (23)                 -              (23) 
 lease payments                                       (20)                20                 - 
 Bank Loan less repayments                             495                 -               495 
 Net cash used by financing activities                 452                20               472 
                                              ------------  ----------------  ---------------- 
 Net change in cash and cash equivalents                63                 -                63 
                                              ------------  ----------------  ---------------- 
 
 
   10.       Related party transactions 

The Company has a related party relationship with its subsidiaries, its directors, and other employees of the Company with management responsibility. There were no transactions with these parties during the period outside the usual course of business.

The Directors and certain key management participated in the issue of convertible loan notes in 2017 which carry interest at 8.15% per annum payable quarterly in arrears.

There were no transactions with any other related parties.

   11.       Cautionary statement 

This Interim Report has been prepared solely to provide additional information to shareholders to assess the Company's strategies and the potential for these strategies to succeed. The Interim Report should not be relied on by any other party or for any other purpose. The Interim Report contains certain forward-looking statements with respect to the financial condition, results of operations and businesses of the Company. These statements are made in good faith based on the information available to them up to the time of their approval of this report. However, such statements should be treated with caution as they involve risk and uncertainty because they relate to events and depend upon circumstances that will occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements. The continuing uncertainty in global economic outlook inevitably increases the economic and business risks to which the Company is exposed. Nothing in this announcement should be construed as a profit forecast.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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September 27, 2019 02:00 ET (06:00 GMT)

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