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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Fd Technologies Public Limited Company | LSE:FDP | London | Ordinary Share | GB0031477770 | ORD 0.5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 24.00 | 1.88% | 1,304.00 | 1,306.00 | 1,314.00 | 1,316.00 | 1,274.00 | 1,274.00 | 98,130 | 16:35:23 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Cmp Processing,data Prep Svc | 296.04M | -4.01M | -0.1429 | -91.81 | 368.52M |
From May 2022 to May 2024
TIDMFDP
RNS Number : 8567K
FD Technologies PLC
10 May 2022
10 May 2022
FD Technologies plc
("FD Technologies" or the "Group")
Results for the year ended 28 February 2022
FD Technologies (AIM: FDP.L, Euronext Growth: FDP.I) today announces its results for the year ended 28 February 2022.
Business highlights
Hot Features
Premium
- Successful delivery of accelerated growth strategy, with new Group
structure enabling each business unit to deliver its performance
targets and investment in KX driving our key metric of growth
in recurring revenue
- KX Insights platform launched, with 22 customers signed across
financial services, pharma, manufacturing and automotive contributing
to growth in exit Annual Recurring Revenue (ARR) of 25%, in line
with our target
- Go-to-market strategy on track, enabling KX to sign 99 subscription
agreements during the year (2021: 40), a 148% increase, while
also growing our existing customer base with Net Revenue Retention
increasing to 106%
- 40% of KX new deal value in the year generated from Industry (2021:
19%), confirming our growing presence outside our core market
of financial services driven by high return on investment evidenced
by a Forrester report that shows typical payback on KX in less
than six months
- Landmark KX and Microsoft strategic partnership agreement, covering
the native integration of KX Insights on Azure and joint development
of financial services applications and services, validates our
strategy and provides significant growth potential
- Strong growth performance for First Derivative, ahead of our expectations
and built on enhancements in our engagement model and investment
in business leadership and go-to-market
- MRP delivered good growth and is well placed following the launch
of Prelytix 3.0, with enhanced AI and self-service capabilities
- Positive outlook across our business units, with FY23 guidance
for growth in KX ARR in the range of 35-40% and FY23 guidance
for Group revenue and adjusted EBITDA which target a return to
double-digit growth.
Seamus Keating, CEO of FD Technologies, commented: "We have delivered a year of transformation across the Group, with each business unit achieving the Key Performance Indicators we set out in our strategy one year ago to accelerate our growth. KX, which was the principal focus of our investment in the year, delivered our target ARR growth, and enters the new financial year with increased momentum from our partnership with Microsoft enabled by the launch of our cloud native KX Insights platform. First Derivative recorded strong growth as it built on its reputation for domain knowledge and delivery excellence, while MRP continued to grow strongly from its leadership position in predictive lead generation. Across the Group, our investment in systems and people positions us to scale our operations to meet our growth ambitions. The opportunities across the markets in which we operate are significant and through continued execution of our strategy I am confident we can unlock value for our customers and accelerate our growth in the years ahead."
Financial Highlights
Year to end February 2022 2021 Change Revenue GBP263.5m GBP237.9m 11% Gross profit GBP106.1m GBP101.0m 5% Profit before tax GBP9.0m GBP11.1m (19%) Reported diluted EPS 22.9p 32.0p (28%) Net cash / (debt)* GBP0.3m (GBP9.9m) n/a Adjusted performance measures Adjusted EBITDA** GBP31.0m GBP40.5m (23%) Adjusted diluted EPS (see note 4) 32.3p 59.0p (45%) Performance against Key Performance Target Actual Indicators KX exit Annual Recurring Revenue (ARR) growth +25% +25% First Derivative revenue growth +10% +24% MRP platform revenue growth +20% +18%*** * Excluding lease liabilities
** Adjusted for share-based payments, acquisition and non-operational costs and income, depreciation and amortisation and IT Systems implementation costs expensed
*** At constant currency
Financial Highlights
- Revenue up 11% to GBP263.5m (up 14% on a constant currency basis),
ahead of guidance, driven by good growth at First Derivative and
MRP balanced by a reduction in KX perpetual license revenue in
line with strategy
- KX exit Annual Recurring Revenue of GBP47.0m, up 25% in line with
target with recurring revenue representing 61% of revenue (2021:
51%) as we focus on high-value subscription revenue growth
- First Derivative revenue GBP148.0m, up 24%, driven by market demand
and strategy of generating value from our expertise and investment
in leadership and go-to-market capability
- MRP revenue up 16% to GBP51.1m, with platform revenue growth of
18% on a constant currency basis, as we focused the launch of
Prelytix 3.0 on existing customers
- Adjusted EBITDA GBP31.0m, within our guidance range following
the investment in R&D, go-to-market and operations in line with
our accelerated growth strategy
- Net cash GBP0.3m (2021: net debt GBP9.9m) excluding lease liabilities,
better than market consensus driven by continued focus on working
capital.
Current trading and outlook
The Group enters the new financial year with good momentum and growing recurring revenue, providing a positive outlook for the year ahead. Our focus remains growth. In KX, we anticipate an acceleration in the key metric of ARR, with growth targeted in the range 35-40%. We expect both First Derivative and MRP to continue to deliver double-digit revenue growth and an improvement in margin.
FY23 guidance for the Group is for revenue in the range GBP290m to GBP300m and adjusted EBITDA in the range GBP36.5m to GBP38.5m.
For further information, please contact:
FD Technologies plc +44(0)28 3025 2242 Seamus Keating, Chief Executive Officer www.fdtechnologies.com Ryan Preston, Chief Financial Officer Ian Mitchell, Head of Investor Relations Investec Bank plc (Nominated Adviser and Broker) Andrew Pinder Carlton Nelson Virginia Bull +44 (0)20 7597 5970 Goodbody (Euronext Growth Adviser and Broker) David Kearney Don Harrington Finbarr Griffin +353 1 667 0420 FTI Consulting Matt Dixon Dwight Burden Elena Kalinskaya +44 (0)20 3727 1000
About FD Technologies
FD Technologies is a group of data-driven businesses that unlock the value of insight, hindsight and foresight to drive organisations forward. The Group comprises KX, the leading technology for real-time continuous intelligence; First Derivative, which provides technology-led services in capital markets; and MRP, the only enterprise-class, predictive Accounts Based Marketing solution. FD Technologies operates from 12 offices across Europe, North America and Asia Pacific, and employs more than 3,000 people worldwide.
For further information, please visit www.fdtechnologies.com and www.kx.com
Results presentation
FD Technologies will publish a pre-recorded presentation today at 07.05 BST on its website at https://fdtechnologies.com/investor-relations/presentations/. The Group will also host a live results Q&A session for analysts at 09.30 BST today.
Business Review
FD Technologies comprises KX, which operates at the frontier of real-time data analytics; First Derivative, which provides business and software engineering solutions for capital markets; and MRP, which uses KX to deliver predictive analytics for enterprise demand generation.
During the financial year the Group delivered on its accelerated growth strategy, making the investments in KX in R&D and go-to-market capability while also investing in operations to enable the Group to scale its growth. All the Group's business units performed strongly , with KX delivering 25% growth in exit ARR, First Derivative reporting a 24% increase in revenue and MRP achieving 18% growth in platform revenue at constant currency.
The investment and business unit performance resulted in the Group achieving its revenue and adjusted EBITDA guidance for the year. Revenue increased by 11% to GBP264m, slightly ahead of expectations. The underlying performance was even stronger following the planned reduction in KX perpetual license and software implementation revenue as we target growth in annual recurring revenue. Adjusted EBITDA was GBP31m, down 23% as a result of the investment to deliver our accelerated growth strategy and in line with our guidance in the half year report.
The work completed across our business units and at the Group level leaves us well positioned to accelerate our growth in the years ahead in addressable markets which are significant and where we have a strong customer proposition.
KX - at the frontier of real-time data analytics
KX is the leading technology for real-time decision intelligence, uniquely combining time-series data with historical context to enable in-the-moment decision making at scale. Deployable on-premise, in the cloud or at the edge, KX is widely adopted in financial services and is ideally suited to data-intensive areas including manufacturing, automotive, energy and telecommunications.
KX addresses a large and high growth opportunity as organisations evolve their decision-making processes to drive value from their real-time data assets. According to McKinsey, in its report the Data-driven Enterprise of 2025, currently only a fraction of data from connected devices is ingested, processed, queried, and analysed in real time due to the limits of legacy technology structures, the challenges of adopting more modern architectural elements, and the high computational demands of intensive, real-time processing. By 2025, McKinsey believes that reductions in cloud computing costs and advances in technology will result in the creation of vast networks of real-time data and insights.
IDC forecasts that by 2025, 30% of global data will be real-time with 49% stored and managed in the public cloud. This deluge of real-time data is driving demand for real-time analytics technologies and according to research firm MarketsandMarkets, the real-time analytics market is expected to grow from US$ 15.4 billion in 2021 to US$ 50.1 billion by 2026, at a CAGR of 26.5%.
KX, as the world's most integrated real-time analytics and data management platform, is well placed to benefit from these trends. Forrester, in a recent total economic impact assessment, reported that KX delivered a typical 315% return on investment over three years, with payback in less than six months, underlining the value achievable from real-time decision making. During the year the strengths of KX were also recognised for the first time by leading industry analysts including Gartner in their report on the streaming analytics market.
The growing market opportunities drove the decision in May 2021 to accelerate growth in KX by investing in R&D, go-to-market and operations. This investment was successfully delivered during the year, as evidenced by the launch of the cloud-native KX Insights platform, the increasing ease-of-use and interoperability of KX, the investment in sales and marketing spend which contributed to a 148% increase in subscription deals, and the improved visibility provided by enterprise sales and marketing systems implemented during the year.
Microsoft strategic partnership agreement
These positive developments put us in a strong position to capitalise on our significant market opportunity, as evidenced by the signing of a strategic partnership agreement with Microsoft that positions KX Insights as the premier real-time analytics technology on Azure.
The landmark agreement has two parts - firstly, KX Insights will be natively integrated on Azure so that it will appear as a Microsoft application and will be tightly integrated within its intelligent cloud ecosystem. Azure customers will be able to use their existing Microsoft commitment to consume KX Insights and the Azure salesforce will be incentivised to sell KX Insights. KX will be one of only a small number of software vendors to be natively integrated within Azure in this way.
Secondly, KX and Microsoft will jointly develop applications and services for the financial services sector, utilising the KX Insights platform for delivery. This will support existing and potential financial services customers with their cloud migration strategies.
These agreements represent a validation from Microsoft of the market-leading capabilities of the KX Insights platform, while KX chose Microsoft as a strategic partner due to its customer reach (95% of the Fortune 500 are Azure customers) and the commitment Microsoft displayed to the partnership during the detailed commercial and technical discussions. General public availability of services under both agreements is anticipated in H1 calendar 2023, with considerable customer interest already expressed during the market testing phase.
Operational and commercial progress
During the year KX made good operational progress, benefiting from additional spend in sales and marketing and R&D. These investments enabled KX to capitalise on the growing market opportunities and accelerate its growth during the year, as we focused on growing annual recurring revenue through subscription deals.
We adopted a 'land and expand' approach under which we expect the value of subscription deals to grow over time as customers increase their use of KX, given the high return on investment it delivers. We also successfully targeted upselling to existing customers as we make KX easier to adopt and use. Key to our approach was accelerating the time to value for our customers, by solving our customer's most pressing challenges and demonstrating the ROI of our technology.
Research and development
Our technology development priorities are aligned to our strategic objective to increase KX recurring revenue, by prioritising ease of adoption and use, interoperability with other technologies and integration with partners, particularly hyperscale cloud providers. In particular, we:
-- Launched our cloud-native platform KX Insights, leveraging the
benefits of cloud architecture to deliver rapid, scalable insights
without the burden of managing infrastructure or the need to optimise
for different cloud environments. Built on open standards such
as Docker and Kubernetes and using a microservices-based architecture
enables streamlined delivery and faster development, resulting
in faster time to value for our customers
-- Made the power of KX accessible and easy to use by a broad range
of developers, including Python and SQL, through native integration
without degradation of performance, opening up a range of new opportunities
within existing and new customers
-- Worked closely with partners, including Microsoft and Telit, to
integrate our technologies and embed KX as a key component in the
analytics ecosystem.
Our technology priorities of increasing adoption by promoting ease of use and interoperability remain unchanged. In the current year our focus will be on delivering industry accelerators that enable the adoption of KX across our target markets, further enhancements to KX Insights to promote ease-of-use, and integration with Microsoft Azure ahead of general availability of KX Insights on Azure and applications and services for the financial services market.
Go-to-market
In line with our accelerated growth strategy we increased our investment in go-to-market significantly during the year. We also delivered systems and process improvements and adjusted our marketing propositions and sales commission structure, such that we now have a good understanding of the most effective methods to grow sales and increase our annual recurring revenue.
With our investment in go-to-market during the year, including new CRM systems in place to support pipeline qualification and development, together with compelling marketing messages around the value provided by KX, we are in a good position to deliver on the market opportunity.
Commercial progress
We achieved our key target of a 25% increase in exit ARR during the year, driven by growth in both existing and new customers and across both financial services and industry.
We signed 127 new deals during the year (2021: 77), of which 99 (2021: 40) were subscription deals as we transitioned away from perpetual license deals, in line with our strategy of focusing on ARR growth. We sell to new customers only on a subscription basis, and as a result we expect to see perpetual license revenue progressively decline.
Of our subscription deals, 30% by volume and 40% by value were in industry, highlighting the progress we are making in entering new markets. We are also growing our customer base, signing 26 new customers on subscription deals, of which 55% by value were from industry customers. Each of these new customers has significant expansion potential.
Key deals during the year included:
-- Providing a major telecommunications network with real-time network
orchestration capability to improve network performance, increase
customer satisfaction and deliver better spectrum utilisation
-- Consolidated high performance analytics and back-testing platform
for all asset classes for a major sovereign wealth fund
-- A contract with a global automotive manufacturer for wind-tunnel
analytics, with potential to extend further across its wind tunnel
facilities and deeper into its operations
-- A significant contract with a major pharmaceutical company to
use KX Insights as the data management and analytics platform
for all clinical trial and patient data
-- A contract to provide a hosted service for a major cryptocurrency
analytics platform, delivering real-time data management to support
retail and institutional investors with benefits including stability,
scalability and predictive analytics
-- Deployment of KX to power a major healthcare manufacturing facility,
providing a complete analytics system capturing sensor data from
multiple sources to improve the efficiency of the facility. The
initial deal, signed during H1, was for a single factory and we
expect to close the next phase of roll out during the current
year.
Infrastructure investment
Our accelerated growth strategy was supported during the year by investment to enable us to scale our operations. This included the implementation of CRM systems that are already delivering value, while we are in the process of implementing Oracle Cloud Fusion as the Group enterprise resource planning system. We also added resources across the business to support our growth ambitions.
First Derivative - business and software engineering solutions for capital markets
First Derivative delivered revenue growth of 24%, ahead of expectations and representing its strongest growth rate since 2016. This performance resulted from a range of measures taken to maximise the value First Derivative generates from its expertise, delivered into a solid market environment. In particular, improvements to our operating model saw more emphasis on the digital change market with new initiatives in cloud, data analytics and software development.
First Derivative has a very large addressable market, with Gartner forecasting that by 2025 investment banks will spend $761bn on technology services, representing annual growth of 6.5%. Of this we estimate more than $200 billion is addressable by First Derivative. We work with all the top 20 global investment banks and our focus during the year has been on delivering more for them, which in some cases has resulted in a doubling of their spend with us.
We deliver our services through business practices focused on our core competencies of expertise in the technologies used within capital markets and deep domain expertise. Our reputation for delivery excellence is key to our growth, with significant expansion potential in our customer base. Demand was solid throughout the year, driven by change programmes, regulatory and compliance work and managed services.
An example of First Derivative in action was the delivery during the year of a cloud migration project for a Tier 1 bank's critical risk management function. Working with Google Cloud platform, the team built a highly scalable, fault tolerant solution with much lower running costs and significant technical benefits for the bank including scalability and improved data access. The project took a year to complete from the discovery phase to successful go-live.
We increased our leadership and go-to-market spend to drive future growth and evolved our go-to-market and account management strategy to ensure we maximise the value of our expertise. We have evolved the way in which we engage with clients, resulting in a more sophisticated model that focuses on project outcomes rather than resources. This approach helped to deliver improved gross margins for the year, despite the additional leadership and sales and marketing spend.
To meet customer demand, we hired record employee numbers during the year, with the change in our engagement model resulting in the number of experienced hires exceeding graduate recruitment. Our recruitment and training programmes continue to be competitive differentiators and enable us to respond effectively to demand trends. Attrition levels as we exited lockdown were at the high end of our typical range, while wage inflation is also a factor but is mitigated through pricing and the more efficient delivery structures reference above. We are experiencing continued strong demand and anticipate another year of good growth in First Derivative, as well as continued margin improvement.
MRP - predictive analytics for enterprise demand generation
MRP provides global sales and marketing leaders with an account-based marketing platform (Prelytix), powered by KX, and supporting products and services that deliver high response rates and pipeline conversion. Tracking more than 1.5 billion intent signals per day, MRP enables customers to identify and engage targets earlier and more effectively. Its global presence is a further differentiator, resulting in Forrester naming it as a leader in ABM in its Q1 2022 report on the sector.
MRP delivered good growth during the year, up 16% to GBP51.1m, with margin improvement.
Customer contracts signed included:
-- A global enterprise communications company contracted with MRP
to develop a data-led omnichannel engagement strategy. Using Prelytix
enabled them to expand their marketing programmes and deliver
a near 500% increase in pipeline conversion
-- A US-based fibre network provider using Prelytix to provide business-critical
account insights within a highly complex environment that requires
sophisticated, location-based sales and marketing strategies,
delivering a predictable qualified pipeline
-- A multi-year contract to build and manage a global demand generation
engine for a financial software provider across its target markets.
From MRP Prelytix platform insights to a suite of engagement channels,
our approach consistently increases the brand's footprint, account
penetration and overall pipeline revenue.
A major milestone was the launch in H2 of the financial year of Prelytix 3.0, which has enhanced self-service capabilities that enable customers to drive greater value from the platform without the need for services support, as well as AI capabilities to increase the customer's return on investment. Our initial focus has been transitioning our existing customer base to the new platform, and during the current financial year we anticipate our focus shifting to growth in new customers. This provides confidence in the growth outlook for MRP for FY23.
People
The Group currently employs more than 3,000 people, up from more than 2,500 at the same time last year. The increase was driven by the growth across the Group, particularly at First Derivative, and delivered by sustained recruitment campaigns through the year. Our employee policies are aimed at making FD Technologies an employer of choice within technology to support the growth opportunities across the Group.
Engaging with our employees has become even more important post pandemic as we seek to navigate more flexible approaches to work, ensuring we continue to deliver for our customers and collaborate effectively. Our annual engagement survey shows that 80% of our employees feel engaged, which we believe is an industry-leading figure that positively impacts productivity, customer service and retention rates. We have also introduced additional inclusion and diversity initiatives and programmes that are helping us to retain and develop our employees and invested in learning and development through the year to support career development across the Group.
Across the Group the delivery of our growth and our accelerated growth strategy has required the commitment and dedication of all employees and the Board would like to thank them for their contribution.
Summary and outlook
We successfully delivered a year of transformation across the business in line with our accelerated growth strategy, hitting our key targets and positioning ourselves for future growth. The market opportunities across our business units are exciting, particularly in KX where our KX Insights platform is driving an acceleration of growth in annual recurring revenue.
For FY23, we expect KX to generate growth in ARR in the range 35-40%, while in First Derivative and MRP we expect double digit revenue growth and continued margin improvement. At the Group level, our guidance is for revenue in the range GBP290m to GBP300m and adjusted EBITDA in the range GBP36.5m to GBP38.5m.
Financial review
Revenue and Margins
The table below shows the breakdown of Group performance by business unit for each of KX, First Derivative and MRP.
FY22 FY21
Group KX First MRP Group KX First MRP Group
Derivative Derivative change
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Revenue 263.5 64.4 148.0 51.1 237.9 74.3 119.4 44.2 11%
Cost of sales (157.3) (19.9) (108.6) (28.8) (136.9) (20.5) (90.3) (26.1) 15%
Gross profit 106.1 44.5 39.4 22.2 101.0 53.8 29.1 18.0 5%
40 69 44
Gross margin % % 27 % % 42% 72% 24% 41%
R&D expenditure (21.1) (18.6) (0.2) (2.3) (15.9) (13.9) (0.1) (1.9) 32%
R&D capitalised 18.6 16.1 0.2 2.3 13.4 11.5 0.1 1.8 38%
Net R&D (2.6) (2.6) 0.0 0.0 (2.6) (2.4) 0.0 (0.1) 1%
Sales and marketing
costs (47.4) (23.6) (14.5) (9.3) (39.3) (20.6) (10.8) (7.9) 21%
Adjusted admin
expenses (25.2) (8.6) (10.9) (5.7) (18.7) (6.6) (7.8) (4.3) 35%
Adjusted EBITDA 31.0 9.8 14.0 7.3 40.5 24.3 10.5 5.7 (23%)
15
Adj. EBITDA margin 12% % 9 % 14% 17% 33% 9% 13%
The financial performance for the year reflected the successful implementation of the Group's accelerated growth strategy, with investment in R&D, sales and marketing and operations enabling higher growth during the year and setting KX on the path to becoming the market-leading technology for real-time streaming analytics. The change in Group structure to comprise three business units - KX, First Derivative and MRP - was designed to enable each to communicate its distinct value proposition and maximise its growth opportunity, and the results in FY22 show that strategy is delivering the benefits anticipated.
Group revenue increased by 11% to GBP263.5m (2021: GBP237.9m), driven by growth in First Derivative and MRP balanced by lower professional services and perpetual license revenue in KX, in line with our stated strategy to focus on growth in ARR. Group gross profit increased by 5% to GBP106.1m, reflecting improved margin performance in First Derivative and MRP while in KX the reduction in high-margin perpetual license revenue in line with our strategy resulted in gross margin of 69% (2021:72%).
The Group's accelerated growth strategy resulted in increased expenditure on R&D (GBP5.2m), sales and marketing (GBP8.1m) and operational costs to scale the business (GBP6.5m). These investments for growth enabled our business units to achieve their targets for the year, particularly KX where exit ARR grew by 25%. The impact of the investment and the focus on ARR resulted in EBITDA falling by 23% to GBP31.0m, in line with our guidance.
KX
KX total Financial services Industry
FY22 FY21 Change FY22 FY21 Change FY22 FY21 Change
GBPm GBPm GBPm GBPm GBPm GBPm
Revenue 64.4 74.3 (13%) 55.4 65.3 (15%) 9.1 9.0 0%
Perpetual 3.6 10.7 (66%) 1.8 7.9 (77%) 1.8 2.8 (36%)
Recurring 39.2 37.7 4% 35.5 35.0 1% 3.7 2.7 37%
Total licenses 42.8 48.4 (12%) 37.4 43.0 (13%) 5.4 5.4 0%
Services 21.6 25.9 (17%) 18.0 22.3 (19%) 3.6 3.6 0%
Gross profit 44.5 53.8 (17%)
Adjusted
EBITDA 9.8 24.3 (60%)
FY22 was a transformational year for KX as it invested to accelerate growth in ARR while phasing out perpetual license sales and focusing on delivering customer value, resulting in faster implementations and therefore lower services revenue. This strategy resulted in a decrease of 13% in KX revenue to GBP64.4m, although recurring revenue increased by 4% to GBP39.2m and now represents 61% of KX revenue (2021: 51%).
Our Industry sector performed strongly during the year, with recurring revenue up by 37% led by deals across industries such as pharma, telecommunications, manufacturing and automotive. Financial services revenue declined principally as a result of the reduction in perpetual license and professional services revenue set out above. Gross profit decreased by GBP9.3m (17%), principally due to the GBP7.1m reduction in high margin perpetual license revenue and GBP4.3m decrease in services revenue, while adjusted EBITDA fell by GBP14.5m (60%) principally as a result of the decline in gross profit and increase in sales and marketing cost, in line with our growth acceleration strategy.
Performance metrics FY22 FY21 Change Exit annual recurring revenue (ARR) GBPm 47.0 37.6 25% Net revenue retention (NRR) 106% 99% Gross profit margin 69% 72% R&D expenditure as % of revenue 29% 19% Sales and marketing spend as % of revenue 37% 28% Adjusted EBITDA margin 15% 33%
KX achieved its target of 25% growth in exit ARR to GBP47m. The Net Revenue Retention rate of 106% is ahead of the 99% recorded for 2021 and tracking towards our mid-term goal of more than 120%. Churn remains minimal and we are confident that our strategy of targeting expansion within new customers will enable us to achieve this goal.
First Derivative
FY22 FY21 Change
GBPm GBPm
Revenue 148.0 119.4 24%
Gross profit 39.4 29.1 35%
Adjusted
EBITDA 14.0 10.5 33%
Revenue growth in the year was ahead of expectations at 24%, reflecting a solid demand environment and improvements to our delivery model, as outlined in the Business review. This is enabling us to achieve greater value for our expertise and domain knowledge, which resulted in improved margins despite the impact of wage inflation and attrition during the year. Growth was delivered from a combination of doing more for existing clients and also winning new contracts, including the renewal of a large managed services contract for a further five years with an increased scope and assisting with the strategic reorganisation of one of our customers. It remains the case that most of our engagements are long-term in nature.
There is considerable opportunity for First Derivative to build on its existing customer relationships and to increase its share of the market for digital change, and we continue to believe it can deliver double digit revenue growth while growing its gross margin.
Performance metrics FY22 FY21 Gross profit margin 27% 24% Adjusted EBITDA margin 9% 9%
Gross margins increased to 27% from 24% reflecting a combination of improved utilisation resulting from the changes to our delivery model, while adjusted EBITDA margin was maintained at 9% following investment in our sales and leadership capability to drive our longer-term growth.
MRP
FY22 FY21
GBPm GBPm Change
Revenue 51.1 44.2 16%
Platform 27.0 24.2 11 %
Services 24.0 19.9 21 %
Gross profit 22.2 18.0 23%
Adjusted
EBITDA 7.3 5.7 27 %
MRP targets growth in platform revenue, from a combination of subscriptions to the Prelytix platform and data-driven engagement between our customers and their prospects. Our services revenue is derived from enabling customers to engage with prospective customers and to progress them through their sales funnel.
MRP reported a strong performance in the year, with platform revenue increasing by 11% to GBP27.0m (18% at constant currency, just short of our target of 20% growth). The launch during H2 of Prelytix 3.0, containing increased AI and self-service capabilities, provides confidence in another period of good growth for platform revenue during FY23.
Performance metrics FY22 FY21 Platform revenue GBPm 27.0 24.2 Gross profit margin 44% 41% Adjusted EBITDA margin 14% 13%
MRP achieved its target of increasing its gross margin, up from 41% to 44% as a result of improved utilisation of its services, which also helped to increase adjusted EBITDA margin to 14%. MRP continues to target revenue and margin growth as it executes on its market opportunity.
Adjusted EBITDA
The reconciliation of operating profit to adjusted EBITDA is provided below:
FY22 FY21
GBPm GBPm
Operating Profit 6 .4 17.0
Acquisition and non-operational costs 3.1 1.3
Non-Operational Other Income (2.5) -
IT Systems implementation costs expensed * 2.3 -
Share based payment and related costs 1.7 2.4
Depreciation and amortisation 20.1 19.8
Adjusted EBITDA 31.0 40.5
* IT Systems implementation costs expensed represents ERP and CRM implementation costs following the IFRIC update on accounting for cloud implementation costs
Profit before tax
Adjusted profit before tax decreased by 46% to GBP11.0m (2021: GBP20.2m). The principal cause was adjusted EBITDA being GBP9.5m lower than 2021 as a result of the investment made during the year to accelerate growth and the planned reduction in perpetual license revenue. Increased amortisation costs relating to investment in R&D was more than offset by a reduction in financing costs as our gross debt position improves, resulting in adjusted profit before tax falling by GBP9.2m.
Reported profit before tax was down 19% on 2021 to GBP9.0m. The major factors here were an increase in acquisition and non-operational related costs, mainly due to costs associated with the ERP programme being expensed as incurred and corporate finance activity, balanced by a lower impact from foreign currency translation and a profit on the disposal of associate RXDataScience Inc, during the year.
The reconciliation of adjusted EBITDA to reported profit before tax is provided below.
FY22 FY21
GBPm GBPm
Adjusted EBITDA 31.0 40.5
Adjustments for:
Depreciation and amortisation (6.8) (6.9)
Amortisation of software development costs (10.2) (9.3)
Financing costs (3.0) (4.2)
Adjusted profit before tax 11.0 20.2
Adjustments for:
Amortisation of acquired intangibles (3.1) (3.6)
Share based payment and related costs (1.7) (2.4)
Acquisition and non-operational costs (3.1) (1.3)
Non Operational Other Income 2.5 -
IT Systems implementation costs expensed * (2.3) -
Loss on foreign currency translation (1.8) (3.2)
Share of profit/(loss) of associate 0.3 (0.1)
Gain on disposal of associate 6.9 -
Finance income 0.2 1.6
Reported profit before tax 9 .0 11.1
* IT Systems implementation costs expensed represents ERP and CRM implementation costs following the IFRIC update on accounting for cloud implementation costs
Earnings per share
On a reported basis, the Group recorded a profit of GBP6.4m after tax, compared to GBP9.0m in the prior year, for the reasons stated above as well as a higher tax charge of GBP2.6m (2021: GBP2.1m). Reported diluted earnings per share was 22.9p (2021: 32.0p), adjusted diluted earnings per share was 32.3p (2021: 59.0p per share).
The adjusted profit after tax for the year of GBP9.1m (2021: GBP16.6m) represented a decrease of 45%. The calculation of adjusted profit after tax is detailed below:
FY22 FY21
GBPm GBPm
Reported profit after tax 6.4 9.0
Adjustments from profit before tax (as per the
table above) 2.1 9.0
Tax effect of adjustments (1.3) (1.4)
Discrete tax items 1.9 -
Adjusted profit after tax 9.1 16.6
Weighted average number of ordinary shares (diluted) 28.0m 28.1m
Reported EPS (fully diluted) 22.9p 32.0p
Adjusted EPS (fully diluted) 32.3p 59 . 0p
Balance sheet
Total assets increased by GBP2.1m to GBP352.1m (2021: GBP350.0m), driven by increases in intangible assets of GBP8.1m to GBP155.6m (2021: 147.5m), as the Group capitalises internal software development costs in accordance with IFRS Accounting Standards and the deferred tax asset of GBP3.3m to GBP18.0m (2021: GBP14.7m). These were partially offset by cash and cash equivalents decreasing by GBP6.6m to GBP48.6m (2021: GBP55.2m) due to repayment of borrowings . As a result, loans and borrowings fell to GBP71.6m (2021: GBP92.8m) of which GBP48.2m related to bank loans (2021: GBP65.1m) and the remainder to lease liabilities. Total liabilities decreased by GBP7.7m to GBP159.6m (2021: GBP167.3) primarily due to the reduction in loans and borrowings.
Cash generation and net debt
The Group generated GBP28.9m of cash from operating activities before taxes paid (2021: GBP46.7m) representing 93% conversion of adjusted EBITDA. We continued to focus on cash collection, which resulted in a conversion rate ahead of our target of 80-85% of adjusted EBITDA .
At the year end, the Group had returned to net cash of GBP0.3m (2021: net debt* GBP9.9m), excluding lease liabilities. The factors impacting the movement in net debt are summarised in the table below:
FY22 FY21
GBPm GBPm
Opening net debt* (9.9) (49.4)
Cash generated from operating activities 28.9 46.7
Taxes paid (0.4) (1.3)
Capital expenditure: property, plant and equipment (2.8) (1.5)
Proceeds from sale of property plant and equipment 0.9 -
Capital expenditure: intangible assets (18.9) (13.8)
Disposal of associate 11.0 -
Investment movements 0.1 11.3
Issue of new shares 0.8 8.3
Interest, foreign exchange and other (9.3 ) (10.3)
Closing net cash / (debt)* 0.3 (9.9)
* Excluding lease liabilities
During the year the Group sold its stake in associate RxDataScience Inc for proceeds of GBP11m, recording a gain of GBP6.9m. The investment in RXDataScience occurred as part of the Group's strategy of assisting companies that were adopting KX in new and innovative ways. This programme has been de-emphasised in recent years and the Group has instead focused its efforts on signing partnership agreements. During the year another of the Group's investments, Quantile Technologies, was conditionally acquired by the London Stock Exchange. On completion the Group expects to receive net proceeds of approximately GBP8.6m. In addition there are potential deferred consideration payments for both RXDataScience and Quantile Technologies dependent on future performance.
Definition of terms
The Group uses the following definitions for its key metrics:
Exit annual recurring revenue (ARR): is the value at the end of the accounting period of the software and subscription recurring revenue to be recognised over the proceeding twelve months.
Net revenue retention rate (NRR) : is based on the actual revenues in the quarter annualised forward to twelve months and compared to the annualised revenue from the four quarters prior. The customer cohort is comprised of customers in the quarter that have generated revenue in the prior four quarters.
Adjusted admin expenses: is a measure used in internal management reporting which comprises administrative expenses per the statement of comprehensive income of GBP51.9m (2021: GBP42.0m) adjusted for depreciation and amortisation of GBP20.1m (2021: GBP19.8m), share based payments and related costs of GBP1.7m (2021: GBP2.4m), acquisition and non-operational costs of GBP3.1m (2021: GBP1.3m), IT Systems implementation costs expensed GBP2.3m (2021: nil), and Other GBP(0.5)m (2021: GBP(0.2)m) .
Consolidated statement of comprehensive income
Year ended 28 February 2022
2022 2021
Note GBP'000 GBP'000
Revenue 2 263,463 237,867
Cost of sales 2 (157,327) (136,888)
Gross profit 2 106,136 100,979
Operating costs
Research and development costs (21,125) (15,948)
- Of which capitalised 18,553 13,398
Sales and marketing costs (47,355) (39,252)
Administrative expenses (51,949) (42,036)
Impairment loss on trade and other receivables (695) (215)
Total operating costs (102,571) (84,053)
Other income 2,816 96
Operating profit 6,381 17,022
Finance income 262 1,606
Finance expense (3,015) (4,183)
Loss on foreign currency translation (1,834) (3,240)
Net finance costs (4,587) (5,817)
Share of gain/(loss) of associate, net of tax 262 (58)
Profit on sale of Associate 6,943 -
Profit before taxation 8,999 11,147
Income tax expense (2,572) (2,150)
Profit for the year 6,427 8,997
Profit for the year 6,427 8,997
Other comprehensive income
Items that will not be reclassified subsequently
to profit or loss
Equity investments at FVOCI - net change in fair
value (1,408) 2,349
Net gain on sale of FVOCI holding 150 4,746
Items that will or may be reclassified subsequently
to profit or loss
Net exchange gain/(loss) on net investment in foreign
subsidiaries 3,237 (10,657)
Net (loss)/gain on hedge of net investment in foreign
subsidiaries (1,183) 2,611
Other comprehensive income for the year, net of
tax 796 (951)
Total comprehensive income for the year attributable
to owners of the parent 7,223 8,046
Note Pence Pence
Earnings per share
Basic 4(a) 23.1 32.7
Diluted 4(a) 22.9 32.0
All profits are attributable to the owners of the Company and relate to continuing activities.
Consolidated balance sheet
As at 28 February 2022
2022 2021
Note GBP'000 GBP'000
Assets
Property, plant and equipment 5 28,343 33,541
Intangible assets and goodwill 6 155,607 147,513
Equity accounted investee - 2,649
Other financial assets 19,676 14,760
Trade and other receivables 3,745 3,312
Deferred tax assets 17,998 14,719
Non-current assets 225,369 216,494
Trade and other receivables 74,029 75,102
Current tax receivable 4,172 3,208
Cash and cash equivalents 48,564 55,198
Current assets 126,765 133,508
Total assets 352,134 350,002
Equity
Share capital 139 139
Share premium 100,424 99,396
Merger reserve - 8,118
Share option reserve 18,404 16,790
Fair value reserve 9,755 10,682
Currency translation adjustment reserve (3,574) (5,628)
Retained earnings 67,391 53,177
Equity attributable to owners of the Company 192,539 182,674
Liabilities
Loans and borrowings 7 62,504 83,596
Trade and other payables 3,190 2,431
Deferred tax liabilities 15,307 11,428 Non-current liabilities 81,001 97,455 Loans and borrowings 9,054 9,244 Trade and other payables 60,596 53,591 Current tax payable 382 269 Employee benefits 8,562 6,769 Current liabilities 78,594 69,873 Total liabilities 159,595 167,328 Total equity and liabilities 352,134 350,002
Consolidated statement of changes in equity
Year ended 28 February 2022
Share Currency
Share Share Merger option Fair value translation Retained Total
capital premium reserve reserve reserve adjustment earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 March
2021 139 99,396 8,118 16,790 10,682 (5,628) 53,177 182,674
Total comprehensive
income for the year
Profit for the year - - - - - - 6,427 6,427
Other comprehensive
income
Net exchange gain on
net investment in foreign
subsidiaries - - - - - 3,237 - 3,237
Net exchange loss on
hedge of net investment
in foreign subsidiaries - - - - - (1,183) - (1,183)
Net change in fair
value of equity investments
at FVOCI - - - - (1,408) - - (1,408)
Net gain/(loss) on
sale of FVOCI holding - - - - 481 - (331) 150
Total comprehensive
income for the year - - - - (927) 2,054 6,096 7,223
Transactions with owners
of the Company
Tax relating to share
options - - - 80 - - - 80
Exercise of share options - 773 - - - - - 773
Issue of shares - 255 - - - - - 255
Share based payment
charge - - - 1,534 - - - 1,534
Transfer - - (8,118) - - - 8,118 -
Balance at 28 February
2022 139 100,424 - 18,404 9,755 (3,574) 67,391 192,539
Consolidated statement of changes in equity continued
Year ended 28 February 2021
Share Currency
Share Share Merger option Fair value translation Retained Total
capital premium reserve reserve reserve adjustment earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 March
2020 136 91,002 8,118 13,775 3,587 2,418 44,125 163,161
Total comprehensive
income for the year
Profit for the year - - - - - - 8,997 8,997
Other comprehensive
income
Net exchange loss on
net investment in foreign
subsidiaries - - - - - (10,657) - (10,657)
Net exchange gain on
hedge of net investment
in foreign subsidiaries - - - - - 2,611 - 2,611
Net change in fair
value of equity investments
at FVOCI - - - - 2,349 - - 2,349
Net gain on sale of
FVOCI holding - - - - 4,746 - - 4,746
Total comprehensive
income for the year - - - - 7,095 (8,046) 8,997 8,046
Transactions with owners
of the Company
Tax relating to share
options - - - 820 - - - 820
Exercise of share options 3 8,281 - - - - - 8,284
Issue of shares - 113 - - - - - 113
Share based payment
charge - - - 2,250 - - - 2,250
Transfer on forfeit
of share options - - - (55) - - 55 -
Balance at 28 February
2021 139 99,396 8,118 16,790 10,682 (5,628) 53,177 182,674
Consolidated cash flow statement
Year ended 28 February 2022
2022 2021
GBP'000 GBP'000
Cash flows from operating activities
Profit for the year 6,427 8,997
Adjustments for:
Net finance costs 4,587 5,818
Depreciation of property, plant and equipment 6,308 6,876
Amortisation of intangible assets 13,817 12,889
Equity-settled share based payment transactions 1,534 2,250
Profit on disposal of associate (6,943) -
Profit on disposal of fixed assets (222) -
Other income (2,499) -
Grant income (317) (49)
Share of (profit)/loss of associate (262) 58
Tax expense 2,572 2,150
25,002 38,989
Changes in:
Trade and other receivables (1,585) 1,707
Trade and other payables 5,473 5,972
Cash generated from operating activities 28,890 46,668
Taxes paid (407) (1,253)
Net cash from operating activities 28,483 45,415
Cash flows from investing activities
Interest received 19 40
(Increase) in loans to other investments - (122)
Settlement of loans to other investments - 992
Acquisition of subsidiaries (118) -
Acquisition of other investments (95) (510)
Sale of associate 11,001 -
Sale of other investments 175 10,987
Acquisition of property, plant and equipment (2,777) (1,502)
Proceeds from sale of property, plant and equipment 920 -
Acquisition of intangible assets (18,931) (13,775)
Net cash used in investing activities (9,806) (3,890)
Cash flows from financing activities
Proceeds from issue of share capital 773 8,284
Drawdown of loans and borrowings - 34,208
Repayment of borrowings (19,141) (38,350)
Payment of lease liabilities (3,598) (4,554)
Interest paid (2,932) (4,564)
Net cash used in financing activities (24,898) (4,976)
Net (decrease)/increase in cash and cash equivalents (6,221) 36,549
Cash and cash equivalents at 1 March 55,198 26,068
Effects of exchange rate changes on cash held (413) (7,419)
Cash and cash equivalents at 28 February 48,564 55,198
1. Basis of preparation
The consolidated financial statements consolidate those of the Company and its subsidiaries (together referred to as the "Group").
The financial information included in this preliminary announcement does not constitute statutory accounts of the Group for the years ended 28 February 2022 nor 29 February 2021 but is derived from those accounts. Statutory accounts for 2021 have been delivered to the Registrar of Companies and those for 2022 will be delivered following the Company's Annual General Meeting. The auditors have reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditors 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.
Both the consolidated financial statements and the Company financial statements have been prepared and approved by the Directors in accordance with International Financial Reporting Standards ("IFRSs").
2. Operating and business segments
Information about reportable segments
KX FD MRP Total
2022 2021 2022 2021 2022 2021 2022 2021
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue by segment
Revenue 64,418 74,294 147,988 119,412 51,057 44,161 263,463 237,867
Gross profit 44,520 53,826 39,376 29,128 22,240 18,025 106,136 100,979
Adjusted EBITDA 9,782 24,256 13,982 10,491 7,283 5,747 31,047 40,494
Acquisition and non operational
costs (3,082) (1,337)
IT Systems implementation
costs expensed (2,287) -
Non operational other
income 2,499 -
Share based payment and
related costs (1,671) (2,370)
Depreciation and amortisation (16,994) (16,081)
Amortisation of acquired
Intangibles (3,131) (3,684)
Operating profit 6,381 17,022
Net finance costs (4,587) (5,817)
Profit on sale of associate 6,943 -
Share of profit/(loss)
of associate, net of
tax 262 (58)
Profit before taxation 8,999 11,147
Geographical location analysis
Revenues Non-current assets
2022 2021 2022 2021
GBP'000 GBP'000 GBP'000 GBP'000
UK 79,355 68,718 87,448 59,837
EMEA 46,463 39,371 16,826 16,561
The Americas 110,697 103,401 118,576 122,313
Asia Pacific 26,948 26,377 2,952 3,064
Total 263,463 237,867 225,802 201,775
Disaggregation of revenue
KX FD MRP Total
2022 2021 2022 2021 2022 2021 2022 2021
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Type of good or service
Sale of goods - perpetual 3,589 10,595 - - - - 3,589 10,595
Sale of goods - recurring 39,192 37,707 - - 27,015 24,244 66,207 61,951
Rendering of services 21,637 25,992 147,988 119,412 24,042 19,917 193,667 165,321
64,418 74,294 147,988 119,412 51,057 44,161 263,463 237,867
Timing of revenue recognition
At a point in time 3,589 10,595 - - - - 3,589 10,595
Over time 60,829 63,699 147,988 119,412 51,057 44,161 259,874 227,272
64,418 74,294 147,988 119,412 51,057 44,161 263,463 237,867
3. Dividends
2022 2021
GBP'000 GBP'000
Dividends paid to the owners of the parent
Final dividend relating to the prior year - -
Interim dividend paid - -
- -
The dividends recorded in each financial year represent the final dividend of the preceding financial year and the interim dividend of the current financial year.
No final dividend was declared in relation to the comparative period and no interim dividend was declared or paid relating to the current or prior year. The cumulative dividend paid during the year amounted to nil (2021: nil) per share.
After the respective reporting dates, the following dividends were proposed by the Directors. The dividends have not been provided for and there are no income tax consequences.
2022 2021
GBP'000 GBP'000
Nil per ordinary share (2021: nil) - -
4. a) Earnings per ordinary share
Basic
The calculation of basic earnings per share at 28 February 2022 was based on the profit attributable to ordinary shareholders of GBP6,427k (2021: GBP8,997k), and a weighted average number of ordinary shares in issue of 27,782k (2021: 27,505k).
2022 2021
Pence Pence
per share per share
Basic earnings per share 23.1 32.7
Weighted average number of ordinary shares
2022 2021
Number Number
'000 '000
Issued ordinary shares at 1 March 27,717 27,150
Effect of share options exercised 58 352
Effect of shares issued as purchase consideration - -
Effect of shares issued as remuneration 7 3
Weighted average number of ordinary shares at 28 February 27,782 27,505
Diluted
The calculation of diluted earnings per share at 28 February 2022 was based on the profit attributable to ordinary shareholders of GBP6,427k (2021: GBP8,997k) and a weighted average number of ordinary shares after adjustment for the effects of all dilutive potential ordinary shares of 28,036k (2021: 28,126k).
2022 2021
Pence Pence
per share per share
Diluted earnings per share 22.9 32.0
Weighted average number of ordinary shares (diluted)
2022 2021
Number Number
'000 '000
Weighted average number of ordinary shares (basic) 27,782 27,505
Effect of dilutive share options in issue 254 621
Weighted average number of ordinary shares (diluted)
at 28 February 28,036 28,126
At 28 February 2022 518,137 shares (2021: 120,058 shares) were excluded from the diluted weighted average number of ordinary shares calculation as their effect would have been anti-dilutive. The average market value of the Group's shares for the purposes of calculating the dilutive effect of share options was based on quoted market prices for the year during which the options were outstanding.
4. b) Earnings before tax per ordinary share
Earnings before tax per share are based on profit before taxation of GBP8,999k (2021: GBP11,147k). The number of shares used in this calculation is consistent with note 4(a) above.
2022 2021
Pence Pence
per share per share
Basic earnings before tax per ordinary share 32.4 40.5
Diluted earnings before tax per ordinary share 32.1 39.6
Reconciliation from earnings per ordinary share to earnings before tax per ordinary share:
2022 2021
Pence Pence
per share per share
Basic earnings per share 23.1 32.7
Impact of taxation charge 9.3 7.8
Basic earnings before tax per share 32.4 40.5
Diluted earnings per share 22.9 32.0
Impact of taxation charge 9.2 7.6
Diluted earnings before tax per share 32.1 39.6
Earnings before tax per share is presented to facilitate pre-tax comparison returns on comparable investments.
4. c) Adjusted earnings after tax per ordinary share
Adjusted earnings after tax per share is based on an adjusted profit after taxation of GBP9,051k (2021: GBP16,602k). The adjusted profit after tax has been calculated by adjusting the profit after tax GBP6,427k (2021: GBP8,997k) for the amortisation of acquired intangibles after tax effect of GBP2,715k (2021: GBP3,184k), share based payment and related charges after tax effect of GBP1,353k (2021: GBP1,911k), acquisition and non operational costs after tax effect of GBP4,473k (2021: GBP1,102k), profit on sale of associate after tax and share of profit of associate after tax effect of GBP7,206k (2021: loss GBP58k), the loss on foreign currency translation after tax effect of GBP1,485k (2021: loss GBP2,613k), and finance income from sale of investment after tax effect of GBP197k (2021: GBP1,263k). The number of shares used in this calculation is consistent with note 4(a) above.
2022 2021
Pence Pence
per share per share
Adjusted basic earnings after tax per ordinary share 32.6 60.4
Adjusted diluted earnings after tax per ordinary share 32.3 59.0
5. Property, plant and equipment
Group
Leasehold Plant and Office Right-of-use
improvements equipment furniture assets Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 March 2021 6,224 11,886 1,349 32,590 52,049
Additions 318 2,442 17 377 3,154
Disposals (1,144) (10) - (3,131) (4,285)
Exchange adjustments 46 54 - 335 435
At 28 February 2022 5,444 14,372 1,366 30,171 51,353
Depreciation
At 1 March 2021 3,321 6,845 894 7,448 18,508
Charge for the year 531 1,673 219 3,885 6,308
Disposals (337) (10) - (1,636) (1,983)
Exchange adjustments 29 36 3 109 177
At 28 February 2022 3,544 8,544 1,116 9,806 23,010
Leasehold Plant and Office Right-of-use
improvements equipment furniture assets Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 March 2020 5,958 17,163 1,763 30,914 55,798
Additions 371 1,090 42 2,975 4,478
Disposals (60) (6,169) (450) (379) (7,058)
Exchange adjustments (45) (198) (6) (920) (1,169)
At 28 February 2021 6,224 11,886 1,349 32,590 52,049
Depreciation
At 1 March 2020 2,851 11,228 1,096 3,480 18,655
Charge for the year 624 1,790 249 4,214 6,877
Disposals (60) (6,169) (450) - (6,679)
Exchange adjustments (94) (4) (1) (246) (345)
At 28 February 2021 3,321 6,845 894 7,448 18,508
Carrying amounts
At 1 March 2020 3,107 5,935 667 27,434 37,143
At 28 February 2021 2,903 5,041 455 25,142 33,541
At 28 February 2022 1,900 5,828 250 20,365 28,343
6. Intangible assets and goodwill
Group
Internally
Customer Acquired Brand developed
Goodwill lists software name software Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
Balance at 1 March 2021 103,527 12,467 28,535 733 83,531 228,793
Development costs - - - - 18,553 18,553
Additions - - 378 - - 378
Exchange adjustments 2,974 367 856 10 (544) 3,663
At 28 February 2022 106,501 12,834 29,769 743 101,540 251,387
Amortisation
Balance at 1 March 2021 - 10,426 22,619 652 47,583 81,280
Amortisation for the year - 1,083 2,475 42 10,217 13,817
Exchange adjustment - 323 1,012 9 (661) 683
At 28 February 2022 - 11,832 26,106 703 57,139 95,780
Internally
Customer Acquired Brand developed
Goodwill lists software name software Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
Balance at 1 March 2020 110,639 13,259 29,908 769 70,280 224,855
Development costs - - - - 13,398 13,398
Additions - - 377 - - 377
Exchange adjustments (7,112) (792) (1,750) (36) (147) (9,837)
At 28 February 2021 103,527 12,467 28,535 733 83,531 228,793
Amortisation
Balance at 1 March 2020 - 9,848 21,556 633 38,402 70,439
Amortisation for the year - 1,235 2,332 50 9,272 12,889
Exchange adjustment - (657) (1,269) (31) (91) (2,048)
At 28 February 2021 - 10,426 22,619 652 47,583 81,280
Carrying amounts
At 1 March 2020 110,639 3,411 8,352 136 31,878 154,416
At 28 February 2021 103,527 2,041 5,916 81 35,948 147,513
At 28 February 2022 106,501 1,002 3,663 40 44,401 155,607
7. Loans and borrowings
This note provides information about the contractual terms of the Group and Company's interest-bearing loans and borrowings, which are measured at amortised cost.
Group Company
2022 2021 2022 2021
GBP'000 GBP'000 GBP'000 GBP'000
Current liabilities
Secured bank loans 5,311 5,492 5,311 5,492
Lease liabilities 3,743 3,752 1,445 1,398
9,054 9,244 6,756 6,890
Non-current liabilities
Secured bank loans 42,925 59,622 42,926 59,622
Lease liabilities 19,579 23,974 8,549 11,442
62,504 83,596 51,475 71,064
8. Report and accounts
Copies of the Annual Report will be available as of 8 June 2022 on the Group's website, www.fdtechnologies.com and from the Group's headquarters at 3 Canal Quay, Newry, BT35 6BP.
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