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Share Name Share Symbol Market Type Share ISIN Share Description
Dods Group Plc LSE:DODS London Ordinary Share GB0031129579 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.0% 3.05 2.70 3.40 3.05 3.05 3.05 0.00 08:00:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Media 27.8 -1.3 -0.2 - 18

Dods Group PLC Half-year Report

30/11/2020 7:00am

UK Regulatory (RNS & others)


Dods (LSE:DODS)
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TIDMDODS

RNS Number : 8409G

Dods Group PLC

30 November 2020

30 November 2020

Dods Group plc

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

INTERIM RESULTS TO 30 SEPTEMBER 2020

Dods Group plc (AIM: DODS) announces its unaudited interim results for the half year ended 30 September 2020.

Company Overview

Dods is a leading technology company specialising in business intelligence, media and technology resourcing. With extensive capability in machine learning and AI, we manage and transform large volumes of data and information across multiple industries, for some of the UK's leading business intelligence providers. In the political and regulatory domains, we have built a reputation for high quality, unbiased content across all of our products and services in Westminster, Edinburgh, Paris and Brussels.

Financial Highlights

Continuing operations

 
                         H1 2021      H1 2020 
                         30 Sept 20   30 Sept 
                                       19 
 Total revenue           GBP10.2m     GBP12.5m 
 Gross margin            31%          34% 
 Adjusted EBITDA (1)     (GBP0.2m)    GBP1.4m 
 Adjusted EBIT (2)       (GBP1.9m)    GBP0.2m 
 Loss before tax         (GBP2.6m)    (GBP0.3m) 
 Adjusted basic EPS      (0.31p)      0.04p 
 Basic EPS               (0.46p)      (0.08p) 
 
                         30 Sept 20   31 Mar 20 
 Cash at bank            GBP4.1m      GBP4.4m 
 Debt                    GBP3.0m      GBP3.0m 
 Total assets            GBP61.1m     GBP63.9m 
 
 

1. Adjusted EBITDA is calculated as earnings before interest, tax, depreciation, amortisation of intangible assets, share based payments and non-recurring items.

2. Adjusted EBIT is calculated as operating profit (loss) plus non-recurring costs.

Operational Highlights

-- Formation of two new divisions; Dods Technology with Cornelius (Con) Conlon as Managing Director and Dods Intelligence with Munira Ibrahim as Managing Director;

   --      Covid-19 pandemic accelerated move to a more technology enabled business; 

-- Successful mobilisation of entire global workforce to remote working; reviewing London office space requirements to reflect the new hybrid working model with a consequential reduction in costs;

-- Senior team strengthened across sales, technology, editorial, creative, finance, legal and HR.

Outlook

The results for the period are in line with the Board's expectations.

Despite the continued impact of Covid-19 on revenues, in particular Events and Training, the Group is cash generative, has additional liquidity available and has strengthened and diversified its capabilities and senior management team, particularly through the successful completion of the Merit acquisition in July 2019.

Due to the ongoing uncertainties around the global Covid-19 pandemic, the Board remains cautious about the outlook for the second half of the year but confident in the Company's transformational strategy and the long term outlook for the Group.

Mark Smith, Non- Executive Chairman, commented:

" The Group's results for the first half of FY21 are in line with the Board's expectations; whilst Covid-19 has had a huge impact on parts of our core business our diversified portfolio helped to mitigate the downside. The business adapted quickly to remote working for all employees around the world and continues to operate efficiently under flexible working conditions. We are grateful for the continued support of our customers, suppliers, shareholders, bankers and employees as we continue the modernisation and transformation of Dods.

As announced last week we are delighted to welcome Vijay Vaghela to the Board and Chairmanship of the Audit Committee. I am also pleased to confirm my position as Chairman ."

This announcement is released by Dods Group plc and contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 ("MAR"), and is disclosed in accordance with the Group's obligations under Article 17 of MAR.

For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is being made on behalf of the Group by Simon Bullock, Chief Financial Officer.

For further information, please contact:

Dods Group plc

   Mark Smith - Non-Executive Chairman                                        020 7593 5500 

www.dodsgroup.com

Canaccord Genuity Limited (Nomad and Broker)

Bobbie Hilliam 020 7523 8150

Georgina McCooke

BUSINESS AND OPERATIONAL REVIEW

The interim results are in line with expectations and progress continues to be made in transforming Dods from a publishing company to a high-tech business services group as we emerge from the initial impacts of the current global pandemic.

Dods Technology

The business is characterised by strong recurring revenues amongst its clients and this has helped the company to weather a Covid-19 dominated first half. Whilst short term, discretionary and tactical revenue has been indirectly affected by the pandemic (down by over 70%), the recurring revenue base means the business has retained and delivered 95% of the overall revenue earned in the same period last year. During the period the business has:

   --      Shifted India based workers to a work from home operating model; 
   --      Secured new 'big data' projects in the pharmaceutical and publishing spaces; 
   --      Developed new products and delivered stronger IT support across the group as a whole; 
   --      Undertaken significant cost reduction measures; and 
   --      Grown several key accounts by more than 20%. 

Dods Intelligence

The national UK lockdown on March 23(rd) and subsequent social distancing requirements have significantly impacted revenues for Dods Events (down 95% , but with improved margins ) and Dods Training (down 51%), resulting in a rapid and accelerating switch from physical to virtual events and training sessions and also moving more of our media and publications from print to digital, driving higher margins. Through the period, the team have:

-- Pivoted the delivery of events and training courses to virtual - with 220 training courses and 50 events delivered. This shift to virtual has resulted in higher margins due to lower delivery costs;

-- Transitioned the majority of the publications to digital only during lockdown which resulted in further cost savings and are reviewing the print frequency on an ongoing basis;

-- Partnered with EY on delivering Civil Service Learning contracts in addition to continuing a similar partnership with KPMG;

-- Expanded the client base and now working directly with brands including Oracle, SAP, Salesforce and Dell Boomi to provide access to our niche and highly influential political audience;

-- Launched partnership with Politix to on-sell our unique UK and EU monitoring product to German and Austrian clients;

-- Launched a new marketing franchise called Dods Insights that brings together our editorial expertise and access across a variety of topical news stories; and

-- Enacted a reduction in headcount in the events team by 30% with smaller reductions across sales and delivery teams.

The team successfully implemented the above whilst in lockdown and with staff levels reduced by 40% due to the Company benefitting from the Government furlough scheme.

Covid-19 Update

The Group continues to address the challenges of Covid-19 which is having an adverse impact on both revenues and profits particularly in our events and training businesses; which will, in part, be mitigated by strong recurring revenues within business intelligence and resilience within Dods Technology (Merit).

The majority of employees are working from home with minimal disruption to the business and this trend is expected to continue into 2021.

Going Concern

The directors have considered the implications for Going Concern and remain satisfied with the Company's funding and liquidity position. See further comments under Statement of Financial Position.

Outlook

The new team is continuing to innovate, build recurring revenues, drive margin improvements and reduce costs to support the Group's activities. Whilst it is impossible to predict the extent of the continued global uncertainty around the pandemic, the Board remains confident in the medium to long-term prospects of the Group.

   Con Conlon                                                      Munira Ibrahim 
   Managing Director                                              Managing Director 
   Dods Technology                                               Dods Intelligence 

FINANCIAL REVIEW

Income statement

The Group's revenue from continuing operations decreased by 18% to GBP10.2 million (H1 2020: GBP12.5 million) despite the benefit of a full six month trading period from the Merit acquisition (H1 2020: 2.5 months).

Across Dods Intelligence, revenues from Events declined 95% (from GBP4.6m to GBP0.2m) compared with the prior period and Training revenues declined by 51% to GBP0.4m over the same period as a direct consequence of the Covid-19 pandemic and Government requirements on social distancing. Monitoring and Media revenues were down 5% and 11% respectively. On a like-for-like basis revenues from Dods Technology (Merit) were up GBP0.1m (2%).

During the period gross profit decreased by 24% to GBP3.2 million (H1 2020: GBP4.2 million) as a result of the revenue shortfalls in Events and Training. Gross margin decreased from 34% to 31% in the period, again driven by Events and Training. Excluding these two businesses, overall margins were up 1.5%, reflecting the migration from print to digital across all media offerings.

Adjusted EBITDA decreased by GBP1.5 million to a loss of GBP0.2 million (H1 2020: GBP1.4 million profit). Operating loss was GBP2.3 million (H1 2020: GBP0.1 million loss), after a right-of-use assets charge of GBP0.7 million (H1 2020: GBP0.5 million), an amortisation charge of GBP0.4 million (H1 2020: GBP0.3 million) for business combinations a charge of GBP0.2 million (H1 2020: GBP0.1 million), for intangible assets depreciation charge of GBP0.3 million (H1 2020: GBP0.2 million) and non-recurring costs of GBP0.5 million (H1 2020: GBP0.3 million).

Net finance costs have increased for the period to GBP0.3 million (H1 2020: GBP0.2 million) reflecting borrowing costs associated with the GBP3.0 million term loan from Barclays Bank procured for the acquisition of Merit.

The taxation credit for the period was GBP3k (H1 2020: charge GBP37k).The tax charge is based on the use of accumulated tax losses.

Adjusted earnings per share, basic and diluted, from continuing operations in the period were a loss of 0.31 pence and 0.30 pence respectively (H1 2020: 0.04 pence profit) and were based on the adjusted loss for the period of GBP1.7 million (H1 2020: GBP0.2 million profit) with a weighted average number of shares in issue during the period of 564,786,453.

Earnings per share, both basic and diluted, from continuing operations in the period were a loss of 0.46 pence (H1 2020: loss of 0.08 pence) and were based on the loss after tax for the period of GBP2.6 million (H1 2020: loss of GBP0.3 million).

The Board is not proposing a dividend (H1 2020: GBPnil).

Statement of Financial Position

Assets

Other non-current assets consisted of goodwill of GBP28.8 million (FY 2020: GBP28.9 million), intangible assets of GBP11.0 million (FY 2020: GBP11.2 million) and tangible fixed assets of GBP1.9 million (FY 2020: GBP2.1 million).

The Group holds a 40% stake in the issued share capital of Sans Frontières Associates (SFA) and has loaned SFA GBP0.6 million (FY 2020: GBP0.6 million) at the period end. The loan is unsecured and carries no interest charge. Additionally, the Group holds a 30% stake in Social 360 at a cost of GBP0.5 million (FY 2020: GBP0.5 million).

The Group had a cash balance of GBP4.1 million (FY 2020: GBP4.4 million) and gross borrowings of GBP3.0 million at the period end (FY 2020: GBP3.0 million).

The Group has a term loan of GBP3.0 million (FY 2020: GBP3.0 million) over a 5-year period at an rate of 3.25% over LIBOR. The current amount due is GBP0.9 million (FY 2020: GBP3.0 million) and non-current is GBP2.1 million (FY 2020: GBPnil).

Current liabilities fell by GBP1.7 million to GBP16.3 million (FY 2020: GBP18.0 million). Excluding the term loan, the current liabilities increased primarily as a result of VAT and PAYE deferrals available as part of the UK Government's support for businesses impacted by Covid-19. GBP0.9m of VAT has been deferred and will be paid between April 2021 and March 2022. The Group has entered into a Time To Pay agreement with HMRC with respect to GBP1.3 million of PAYE that will be fully settled by March 2021.

Deferred tax liability was GBP0.9 million (FY 2020: GBP0.9 million).

Total assets of the Group were GBP61.1 million (FY 2020: GBP63.9 million) with the main movements being a reduction in debtors of GBP1.7 million and fall in fixed assets from amortisation and depreciation charges.

Total equity reduced by GBP1.5 million to GBP34.3 million (FY 2020: GBP35.8 million), reflecting the loss for the period partially offset by the issue of shares relating to deferred consideration for the acquisition of Merit.

Liquidity and capital resources

The Group has generated cash from operations of GBP1.6 million (H1 2020: GBP0.2 million) during the period primarily driven by strong debtor collections and the deferral of VAT and PAYE.

The cash position at the period end was GBP4.1 million (2020: GBP4.4 million). As at 30 September 2020 the Group had a net cash position of GBP1.1 million (2020: GBP1.4 million).

The Group continues to benefit from an excellent relationship with Barclays Bank plc; as previously reported capital payments on the GBP3.0 million term loan have been deferred from April to December 2020; all covenants have been waived through to January 2021 and the revolving credit facility of GBP2 million remains available for draw-down. The Board is confident the business has sufficient liquidity to meet its obligations, although this is an area of continued focus due to the uncertainty arising from the Covid-19 pandemic.

Simon Bullock

Chief Financial Officer

Condensed consolidated income statement

For the half year ended 30 September 2020

 
                                                     Unaudited    Unaudited        Audited 
                                                     Half year    Half year     Year ended 
                                                         ended        ended    31 Mar 2020 
                                          Note    30 Sept 2020      30 Sept        GBP'000 
                                                       GBP'000         2019 
                                                                    GBP'000 
-------------------------------------  -------  --------------  -----------  ------------- 
 
 Revenue                                     2          10,227       12,524         27,796 
 Cost of sales                                         (7,051)      (8,326)       (18,852) 
-------------------------------------  -------  --------------  -----------  ------------- 
 
   Gross profit                                          3,176        4,198          8,944 
 
 Administrative expenses                               (3,373)      (2,842)        (6,154) 
 
   Adjusted EBITDA                                       (197)        1,356          2,790 
 
 Depreciation of tangible fixed 
  assets                                                 (297)        (243)          (537) 
 Depreciation of right-of-use 
  assets                                                 (704)        (507)        (1,210) 
 Amortisation of intangible 
  assets acquired through business 
  combinations                                           (426)        (281)          (711) 
 Amortisation of software intangible 
  assets                                                 (228)        (144)          (158) 
 Non-recurring items                         3 
         Non-recurring acquisition 
          costs and 
          professional fees                              (272)         (70)          (171) 
         People-related costs                            (143)        (121)          (785) 
         Other non-recurring items                        (35)        (116)           (80) 
 
   Operating loss                                      (2,302)        (126)          (862) 
 
 Net finance costs                                       (300)        (177)          (555) 
 Share of profit of associate                                -            -            158 
-------------------------------------  -------  --------------  -----------  ------------- 
 Loss before tax                                       (2,602)        (303)        (1,259) 
 
 Income tax (charge) / credit                                3         (37)             76 
-------------------------------------  -------  --------------  -----------  ------------- 
 
   Loss for the period                                 (2,599)        (340)        (1,183) 
-------------------------------------  -------  --------------  -----------  ------------- 
 

Loss per share (pence)

 
 
   Basic      4   (0.46p)   (0.08p)   (0.24p) 
 
   Diluted    4   (0.46p)   (0.08p)   (0.24p) 
-----------      --------  --------  -------- 
 

The notes on pages 11 to 16 form part of these unaudited interim results.

Condensed consolidated statement of comprehensive income

For the half year ended 30 September 2020

 
                                            Unaudited    Unaudited        Audited 
                                            Half year    Half year     Year ended 
                                                ended        ended    31 Mar 2020 
                                         30 Sept 2020      30 Sept        GBP'000 
                                              GBP'000         2019 
                                                           GBP'000 
-------------------------------------  --------------  -----------  ------------- 
 
   Loss for the period                        (2,599)        (340)        (1,183) 
 
 Items that may be subsequently 
  reclassified to Profit and loss 
 Exchange differences on translation 
  of foreign operations                           117            -              6 
-------------------------------------  --------------  -----------  ------------- 
 Other comprehensive income for 
  the period                                      117            -              6 
-------------------------------------  --------------  -----------  ------------- 
 Total comprehensive loss for the 
  period                                      (2,482)        (340)        (1,177) 
-------------------------------------  --------------  -----------  ------------- 
 

The notes on pages 11 to 16 form part of these unaudited interim results.

Condensed consolidated statement of financial position

As at 30 September 2020

 
                                                  Unaudited       Unaudited        Audited 
                                               30 Sept 2020    30 Sept 2019    31 Mar 2020 
                                       Note         GBP'000         GBP'000        GBP'000 
----------------------------------  -------  --------------  --------------  ------------- 
 
 Non-current assets 
 Goodwill                                 5          28,845          28,218         28,911 
 Intangible assets                        6          11,042          10,245         11,238 
 Property, plant and equipment            7           1,879           2,286          2,134 
 Right-of-use asset                                   7,412           8,629          7,926 
 Investment in associates                               690             503            661 
 Long-term loan receivable                              560             630            560 
 Total non-current assets                            50,428          50,511         51,430 
 
 Current assets 
 Work in progress and inventories                       434              35            273 
 Trade and other receivables                          6,088           7,010          7,819 
 Cash and cash equivalents                            4,100           6,787          4,368 
 Total current assets                                10,622          13,832         12,460 
 
 Total assets                                        61,050          64,343         63,890 
----------------------------------  -------  --------------  --------------  ------------- 
 
 Capital and reserves 
 Issued capital                           9          19,501          19,239         19,239 
 Share premium                                       20,866          20,082         20,082 
 Other reserves                                         415             409            409 
 Retained loss                                      (6,473)         (3,148)        (3,991) 
 Share option reserve                                    85              55             75 
 Translation reserve                                   (72)            (67)           (61) 
 Total equity                                        34,322          36,570         35,753 
 
 Current liabilities 
 Trade and other payables                            12,633           9,381         12,423 
 Deferred consideration                  10           1,318           1,318          1,046 
 Bank loan                                              857             353          3,000 
 Lease liability                                      1,515           1,524          1,515 
 Total current liabilities                           16,323          12,576         17,984 
 
 Non-current liabilities 
 Deferred tax liability                                 862             487            862 
 Deferred consideration                  10             272           1,590          1,590 
 Bank loan                                            2,143           4,647              - 
 Lease liability                                      7,128           8,473          7,701 
----------------------------------  -------  --------------  --------------  ------------- 
 Total non-current liabilities                       10,405          15,197         10,153 
 
 Total equity and liabilities                        61,050          64,343         63,890 
----------------------------------  -------  --------------  --------------  ------------- 
 

The notes on pages 11 to 16 form part of these unaudited interim results.

Condensed consolidated statement of changes in equity

For the half year ended 30 September 2020

 
 
                                                                                                                 Total 
                                        Share                   Retained    Translation         Share    shareholders' 
                          Share       premium        Merger     earnings     reserve(3)        option            funds 
                        capital    reserve(1)    reserve(2)      GBP'000        GBP'000    reserve(4)          GBP'000 
                        GBP'000       GBP'000       GBP'000                                   GBP'000 
------------------  -----------  ------------  ------------  -----------  -------------  ------------  --------------- 
 
 Unaudited 
------------------  -----------  ------------  ------------  -----------  -------------  ------------  --------------- 
 At 1 April 2019         17,096         8,142           409      (2,616)           (67)            55           23,019 
------------------  -----------  ------------  ------------  -----------  -------------  ------------  --------------- 
 Effect of 
  adoption of 
  IFRS 16 Leases              -             -             -        (192)              -             -            (192) 
 
 At 1 April 2019 
  (restated)             17,096         8,142           409      (2,808)           (67)            55           22,827 
 Total 
 comprehensive 
 income 
      Loss for the 
       period                 -             -             -        (340)              -             -            (340) 
 Transactions with 
 owners 
      Issue of 
       ordinary 
       shares             2,143        11,940             -            -              -             -           14,083 
------------------  -----------  ------------  ------------  -----------  -------------  ------------  --------------- 
 At 30 September 
  2019                   19,239        20,082           409      (3,148)           (67)            55           36,570 
------------------  -----------  ------------  ------------  -----------  -------------  ------------  --------------- 
 
 At 1 April 2020         19,239        20,082           409      (3,991)           (61)            75           35,753 
 Total 
 comprehensive 
 income 
      Loss for the 
       year                   -             -             -      (2,482)              -             -          (2,482) 
 Transactions with 
 owners 
      Issue of 
       ordinary 
       shares               262           784             -            -              -             -            1,046 
 Other 
 comprehensive 
 loss 
      Currency 
       translation 
       differences            -             -             6            -           (11)             -              (5) 
 Share-based 
  payment                     -             -             -            -              -            10               10 
------------------  -----------  ------------  ------------  -----------  -------------  ------------  --------------- 
 At 30 September 
  2020                   19,501        20,866           415      (6,473)           (72)            85           34,322 
------------------  -----------  ------------  ------------  -----------  -------------  ------------  --------------- 
 
 

1 The share premium reserve represents the amount paid to the Company by shareholders above the nominal value of shares issued.

2 The merger reserve represents accounting treatment in relation to historical business combinations.

3 The translation reserve comprises foreign currency translation differences arising from the translation of financial statements of the Group's foreign entities into sterling.

4 The share option reserve represents the cumulative expense recognised in relation to equity-settled share-based payments.

The notes on pages 11 to 16 form part of these unaudited interim results.

Condensed consolidated statement of cash flows

 
 For the half year ended 30                 Unaudited    Unaudited        Audited 
  September 2020                            Half year    Half year     Year ended 
                                                ended        ended    31 Mar 2020 
                                              30 Sept      30 Sept        GBP'000 
                                                 2020         2019 
                                              GBP'000      GBP'000 
---------------------------------------   -----------  -----------  ------------- 
 
 Cash flows from operating activities 
 Loss for the period                          (2,599)        (340)        (1,183) 
 Depreciation of property, plant 
  and equipment                                   297          243            573 
 Depreciation of right-of-use 
  assets                                          704          507          1,210 
 Amortisation of intangible 
  assets acquired through business 
  combinations                                    426          281            711 
 Amortisation of other intangible 
  assets                                          228          144            158 
 Share-based payments charge                       10            -             20 
 Share of profit of associate                       -            -          (158) 
 Lease interest expense                           228          200            420 
 Net finance costs                                 62            -            135 
 Non-recurring acquisition costs 
  and professional fees                           450        1,670          2,010 
 Income tax charge / (credit)                     (3)           37           (76) 
 Operating cash flows before 
  movement in working capital                   (197)        2,742          3,784 
 Change in inventories                          (161)         (18)          (257) 
 Change in trade and other receivables          1,720      (1,363)        (1,013) 
 Change in trade and other payables               210      (1,060)          (282) 
 Cash generated by operations                   1,572          301          2,232 
 Taxation paid                                      3         (85)          (193) 
----------------------------------------  -----------  -----------  ------------- 
 Net cash from operating activities             1,575          216          2,039 
----------------------------------------  -----------  -----------  ------------- 
 
 Cash flows from investing activities 
 Interest and similar income 
  received                                          -            -              5 
 Non-recurring acquisition costs 
  and professional fees                         (272)      (1,670)        (2,010) 
 Additions to property, plant 
  and equipment                                 (304)         (45)          (187) 
 Additions to intangible assets                 (196)        (161)        (1,400) 
 WIP on software not yet capitalised                -        (300)              - 
 Investment in subsidiaries 
  (net of cash acquired)                         (29)     (17,055)       (17,055) 
 Net proceeds from bank loan                        -        5,000          3,000 
 Repayment of long-term loan 
  by associate                                      -           70            140 
----------------------------------------  -----------  -----------  ------------- 
 Net cash used in investing 
  activities                                    (801)     (14,161)       (17,507) 
----------------------------------------  -----------  -----------  ------------- 
 
 Cash flows from financing activities 
 Proceeds from issue of share 
  capital                                           -       13,037         13,037 
 Interest and similar expenses 
  paid                                          (300)            -          (140) 
 Payment of lease liabilities                   (756)        (731)        (1,487) 
----------------------------------------  -----------  -----------  ------------- 
 Net cash from / (used in) financing 
  activities                                  (1,056)       12,306         11,410 
----------------------------------------  -----------  -----------  ------------- 
 Net decrease in cash and cash 
  equivalents                                   (282)      (1,639)        (4,058) 
 Opening cash and cash equivalents              4,368        8,426          8,426 
 Effect of exchange rate fluctuations              14            -              - 
  on cash held 
---------------------------------------   -----------  -----------  ------------- 
 Closing cash at bank                           4,100        6,787          4,368 
----------------------------------------  -----------  -----------  ------------- 
 Comprised of: 
 Cash and cash equivalents                      4,368        6,787          4,368 
 Closing cash at bank                           4,100        6,787          4,368 
----------------------------------------  -----------  -----------  ------------- 
 

The notes on pages 11 to 16 form part of these unaudited interim results.

   1.    Basis of preparation 

Dods Group plc is a Company incorporated in England and Wales.

This condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU. The annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU. As required by AIM Rules, the condensed set of financial statements has been prepared, and applying accounting policies and presentation that were applied in the preparation of the Group's published consolidated financial statements for the year ended 31 March 2020.

The comparative figures for the year ended 31 March 2020 have been extracted from the Group's statutory accounts for that financial period. Those accounts have been reported on by the company's auditor and delivered to the registrar of companies. The report of the auditor was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

The taxation charge for the six months ended 30 September 2020 is based on the utilisation of accumulated tax losses.

Going concern

The Directors have considered the financial projections of the Group, including cash flow forecasts and the availability of committed bank facilities for the coming 12 months. They are satisfied that the Group has adequate resources for the foreseeable future and that it is appropriate to continue to adopt the going concern basis in preparing these interim financial statements.

Accounting estimates and judgements

The Group makes estimates and judgements concerning the future and the resulting estimates may, by definition, vary from the actual results. The Directors considered the critical accounting estimates and judgements used in the interim financial statements and concluded that the main areas of judgement are:

-- Potential impairment of goodwill and other assets as a result of the impact of COVID-19; and

   --      Contingent deferred payments in respect of acquisitions. 

The condensed set of interim financial statements have been prepared on a going concern basis and were approved by the Board on 29 November 2020 .

   2.    Segmental information 

Business segments

The Group now considers that it has two operating business segments, Dods Intelligence and Dods Technology.

Dods Intelligences' business segment concentrates on the provision of key information and insights into the political and public policy environments around the UK and the European Union.

The Dods Technology segment has extensive capability in machine learning and AI and manages the transformation of large volumes of data and information across multiple industries for some of the UK's leading business intelligence providers.

The following table provides an analysis of the Group's segment revenue by business segment.

 
                          Unaudited    Unaudited        Audited 
                          Half year    Half year     Year ended 
                              ended        ended    31 Mar 2020 
                       30 Sept 2020      30 Sept        GBP'000 
                            GBP'000         2019 
                                         GBP'000 
-------------------  --------------  -----------  ------------- 
 
 Dods Intelligence            5,210       10,394         20,154 
 Dods Technology              5,017        2,130          7,642 
                             10,227       12,524         27,796 
-------------------  --------------  -----------  ------------- 
 

No client accounted for more than 10 percent of total revenue.

Asset segment information has not been disclosed because this information is not reviewed by the senior management team for the purpose of allocating resources.

Note the prior year comparison for Dods Technology reflects only the post-acquisition period of 2.5 months.

   3.    Non-recurring items 
 
                                        Unaudited       Unaudited        Audited 
                                        Half year       Half year     Year ended 
                                            ended           ended    31 Mar 2020 
                                     30 Sept 2020    30 Sept 2019        GBP'000 
                                          GBP'000         GBP'000 
---------------------------------  --------------  --------------  ------------- 
 
 Non-recurring acquisition costs 
  and professional fees                       272              70            171 
 People-related costs                         143             121            785 
 Other 
    - Professional services and 
     consultancy                                -              78             45 
    - Other                                    35              38             35 
                                              450             307          1,036 
---------------------------------  --------------  --------------  ------------- 
 
   4.    Earnings per share 
 
                                             Unaudited       Unaudited        Audited 
                                             Half year       Half year     Year ended 
                                                 ended           ended    31 Mar 2020 
                                          30 Sept 2020    30 Sept 2019        GBP'000 
                                               GBP'000         GBP'000 
--------------------------------------  --------------  --------------  ------------- 
 
 Loss attributable to shareholders             (2,599)           (340)        (1,183) 
 Add: non-recurring items                          450             307          1,036 
 Add: amortisation of intangible 
  assets acquired through business 
  combinations                                     426             281            711 
 Add: net exchange (gains) / 
  losses [included within net 
  finance costs]                                  (12)            (61)             23 
 Add: share-based payment expense                   10               -             20 
--------------------------------------  --------------  --------------  ------------- 
 Adjusted post-tax profit / 
  (loss) attributable to shareholders          (1,725)             187            607 
--------------------------------------  --------------  --------------  ------------- 
 
 
                                        Unaudited       Unaudited        Audited 
                                  Half year ended       Half year     Year ended 
                                     30 Sept 2020           ended    31 Mar 2020 
                                  Ordinary shares    30 Sept 2019       Ordinary 
                                                         Ordinary         shares 
                                                           shares 
------------------------------  -----------------  --------------  ------------- 
 
 Weighted average number of 
  shares 
 In issue during the period 
  - basic                             564,786,453     429,464,215    492,696,964 
 Adjustment for share options           1,662,000       1,812,000      1,674,500 
 In issue during the period 
  - diluted                           566,448,453     431,276,215    494,371,464 
------------------------------  -----------------  --------------  ------------- 
 
 
                                           Unaudited       Unaudited        Audited 
                                     Half year ended       Half year     Year ended 
                                        30 Sept 2020           ended    31 Mar 2020 
                                     Pence per share    30 Sept 2019      Pence per 
                                                           Pence per          share 
                                                               share 
---------------------------------  -----------------  --------------  ------------- 
 
 Earnings per share - continuing 
  operations 
 Basic                                        (0.46)          (0.08)         (0.24) 
 Diluted                                      (0.46)          (0.08)         (0.24) 
 Adjusted earnings per share 
  - continuing operations 
 Basic                                        (0.31)            0.04           0.12 
 Diluted                                      (0.30)            0.04           0.12 
---------------------------------  -----------------  --------------  ------------- 
 
   5.    Goodwill 
 
                                  Unaudited       Unaudited        Audited 
                                  Half year       Half year     Year ended 
                                      ended           ended    31 Mar 2020 
                               30 Sept 2020    30 Sept 2019        GBP'000 
                                    GBP'000         GBP'000 
---------------------------  --------------  --------------  ------------- 
 
 Cost and net book value 
 Opening balance                     28,911          13,282         13,282 
 Acquisition of subsidiary                -          14,936         15,629 
 Reclass to intangibles                (66)               -              - 
 Closing balance                     28,845          28,218         28,911 
---------------------------  --------------  --------------  ------------- 
 
   6.    Intangible assets 
 
                                                             Other Capitalised 
                              Assets acquired                            Costs 
                             through business     Software                          Total 
                                 combinations 
                                      GBP'000      GBP'000                        GBP'000 
------------------------  -------------------  -----------  ------------------  --------- 
 
 Cost 
 At 1 April 2019                       23,956        3,419                   -     27,375 
 Additions - internally 
  generated                                 -          296                   -        296 
 Additions - other                          -            -               1,304      1,304 
 Impairment                             4,086            -                   -      4,086 
------------------------  -------------------  -----------  ------------------  --------- 
 
   At 31 March 2020                    28,042        3,715               1,304     33,061 
 Reclass from goodwill                      -            -                  66         66 
 Additions - internally 
  generated                                 -           30                 368        398 
 At 30 September 2020                  28,042        3,745               1,738     33,525 
------------------------  -------------------  -----------  ------------------  --------- 
 
 
 Accumulated amortisation 
 At 1 April 2019             17,710   3,244     -   20,954 
 Charge for the year            711     158     -      869 
--------------------------  -------  ------  ----  ------- 
 
   At 31 March 2020          18,421   3,402     -   21,823 
 Charge for the period          426     131   103      660 
--------------------------  -------  ------  ----  ------- 
 At 30 September 2020        18,847   3,533   103   22,483 
--------------------------  -------  ------  ----  ------- 
 
 
 Net book value 
 
   At 31 March 2019 - audited      6,246     175       -      6,421 
 
   At 31 March 2020 - audited      9,621     313   1,304     11,238 
------------------------------  --------  ------  ------  --------- 
 At 30 September 2020 
  - unaudited                      9,195     212   1,635     11,042 
------------------------------  --------  ------  ------  --------- 
 
   7.    Property, plant and equipment 
 
                                                              Equipment 
                                                           and Fixtures 
                                 Leasehold Improvements    and Fittings     Total 
                                                GBP'000         GBP'000   GBP'000 
---------------------------   -------------------------  --------------  -------- 
 
 Cost 
 At 1 April 2019                                  2,010           1,121     3,131 
 Additions                                           15             172       187 
 Acquisition of subsidiary                            -             421       421 
 
   At 31 March 2020                               2,025           1,714     3,739 
 Additions                                           54               -        54 
 Disposals                                            -            (25)      (25) 
 At 30 September 2020                             2,079           1,689     3,768 
----------------------------  -------------------------  --------------  -------- 
 
 
 Accumulated depreciation 
 At 1 April 2019                480     588     1,068 
 Charge for the year            212     325       573 
 
   At 31 March 2020             692     913     1,605 
 Charge for the period          126     158       284 
 At 30 September 2020           818   1,071     1,889 
---------------------------  ------  ------  -------- 
 
 
 Net book value 
 
   At 31 March 2019 - audited       1,530     533     2,063 
 
   At 31 March 2020 - audited       1,333     801     2,134 
 At 30 September 2020 
  - unaudited                       1,261     618     1,879 
-------------------------------  --------  ------  -------- 
 
   8.    Interest-bearing loans and borrowings 

During the period, the Group maintained a term loan of GBP3 million (H1 2020: GBP3 million), over a 5-year period carrying a rate of 3.25% over LIBOR, with the first repayment of GBP0.2 million due on 31(st) December 2020.

In addition, it has access to a revolving credit facility (RCF) of GBP2 million carrying a rate of 3.5% over LIBOR.

   9.    Share Capital 
 
                                    9p deferred   1p ordinary      Total 
                                         shares        shares    GBP'000 
                                         Number        Number 
---------------------------------  ------------  ------------  --------- 
 
 Issued share capital as at 
  1 April 2020                      151,998,453   555,929,713     19,239 
 Shares issued during the period              -    26,141,667        262 
 Issued share capital as at 
  30 Sept 2020                      151,998,453   582,071,380     19,501 
---------------------------------  ------------  ------------  --------- 
 

Holders of deferred shares do not have the right to receive notice of any general meeting of the Company or any right to attend, speak or vote at such meeting. The deferred shareholders are not entitled to receive any dividend or distribution and shall on a return of assets in a winding up of the Company entitle the holders only to the repayment of 1 penny in aggregate. The deferred shares are also incapable of transfer and no share certificates will be issued.

During the period the Company issued 26,141,667 ordinary shares related to the acquisition of Merit.

During the period the Group issued nil (2020: nil) ordinary shares on the exercise of employee share options for cash consideration of nil (2020: nil) of which GBPnil (2020: nil) was credited to share capital and GBPnil (2020: nil) to share premium.

10. Related party transactions

During the period, Artefact Partners LLP provided strategic consultancy services to Dods Group plc to the value of GBPnil (H1 2020: GBP20,000). Current non-executive director Richard Boon is an LLP designated member of Artefact Partners LLP.

During the period, the Group received a repayment of GBPnil (H1 2020: GBP70,000) on its interest free loan to its associate Sans Frontieres Associates (SFA). At 30 September 2020 the balance of this loan was GBP560,000 (H1 2020: GBP630,000).

During the period, an amount of GBP29,753 (H1 2020: GBP24,650) was payable to an associate, Social 360 Limited, in relation to profit-share for monitoring services provided. At 30 September 2020, GBPnil (H1 2020: GBP24,650) was outstanding.

On acquisition of Merit, an arm's length non-repairing 7-year lease was entered into between a Merit subsidiary (Letrim Intelligence Services Private Limited) and Merit Software Services Private Limited. Cornelius Conlon, a director of the Group, is the beneficial owner of Merit Software Services Private Limited. The lease relates to the Chennai office of Merit. During the period, payments of GBP339,000 ( H1 2020: GBP158,000) were made to Merit Software Systems Private Limited in relation to the lease.

During the period the Company issued 13,333,819 ordinary shares in connection with the deferred consideration payable as part of the acquisition of Meritgroup Limited, to Con Conlon, Managing Director of the Dods Technology division.

In addition, Con Conlon was paid GBP220,000 due to his continued employment, post-acquisition (see note 11).

11. Contingent Liabilities

Upon the acquisition of Meritgroup Limited ("Merit") the Company became obligated, under certain conditions, to make payments to two employees of Merit. In the period GBP272K was paid and was reported as a non-recurring charge.

Further payments of GBP272K per annum could become due in July 2021 and July 2022 contingent upon their continued employment.

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END

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