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FDP Fd Technologies Public Limited Company

1,184.00
-28.00 (-2.31%)
Last Updated: 10:10:00
Delayed by 15 minutes
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
  -28.00 -2.31% 1,184.00 1,184.00 1,188.00 1,228.00 1,184.00 1,228.00 5,545 10:10:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Cmp Processing,data Prep Svc 296.04M -4.01M -0.1429 -82.86 332.56M

FD Technologies PLC Results for the year ended 28 February 2023 (2645A)

23/05/2023 7:00am

UK Regulatory


Fd Technologies Public (LSE:FDP)
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TIDMFDP

RNS Number : 2645A

FD Technologies PLC

23 May 2023

23 May 2023

FD Technologies plc

("FD Technologies" or the "Group")

Results for the year ended 28 February 2023

FD Technologies (AIM: FDP.L, Euronext Growth: FDP.I) announces its results for the year ended 28 February 2023.

Business highlights

Strong performances by KX and First Derivative

 
      -   KX exceeded its targets with annual recurring revenue (ARR) up 39% 
           to GBP65.3m (FY22: GBP47.0m) and net revenue retention of 119% (FY22: 
           106%); incremental annual contract value (ACV) increased by 93% to 
           GBP18.7m (FY22: GBP9.7m) 
      -   Launched the industry's first Data Timehouse, positioning KX as the 
           engine for real-time analytics in the cloud and delivering up to 100x 
           the performance at 1/10(th) of the cost of alternative solutions 
      -   Significant progress with a range of existing and potential partners, 
           including the general availability of kdb Insights Enterprise on Microsoft 
           Azure and an agreement to partner with AWS 
      -   Continued our drive to accelerate time to value for customers, as 
           well as making our technology easier to adopt and use; our progress 
           is reflected in continued growth in Industry, which accounted for 
           more than 30% of ACV 
      -   Momentum set to continue in the current year, benefiting from growing 
           demand for real-time analytics as the foundation for AI-driven business 
           innovation, the strengthening of KX leadership and growing market 
           recognition for the return on investment that KX delivers 
      -   First Derivative delivered revenue growth of 18%, also ahead of target, 
           benefiting from multi-year strategic growth drivers, particularly 
           relating to regulatory compliance and digital transformation 
      -   Weaker demand environment continued at MRP, with revenue down by 19%; 
           cost base aligned to protect EBITDA in the current year 
      -   Providing guidance for FY24 revenue in the range of GBP315m to GBP325m, 
           with adjusted EBITDA in the range of GBP38m to GBP40m with continued 
           investment in KX to drive future growth. 
 

Seamus Keating, CEO of FD Technologies, commented: 'We are pleased with a year of strong execution on our strategy, with KX and First Derivative beating our expectations for FY23.

KX in particular has made strong commercial and strategic progress. Our price to performance advantage is particularly compelling for the hyperscale cloud providers, as evidenced by our partnerships with market leaders Microsoft and AWS. We have a range of initiatives that we are progressing with these and other partners that provide confidence in our outlook.

First Derivative also performed strongly in FY23, delivering impressive revenue growth of 18% for the period. We continue to see multi-year strategic growth drivers that underpin demand for our services.

We have set ourselves ambitious but sustainable growth targets for the years ahead which will ensure we are focused on driving high-quality recurring revenue growth from an expanding list of customers across a wide range of industries, while generating value for shareholders.'

Financial summary

 
  Year to end February                              2023                               2022                 Change 
  Revenue                                        GBP296.0m                          GBP263.5m                12% 
                                     ---------------------------------  ---------------------------------  ------- 
  Gross profit                                   GBP122.3m                          GBP106.1m                15% 
                                     ---------------------------------  ---------------------------------  ------- 
  (Loss)/Profit before tax                       (GBP1.2m)                           GBP9.0m                  NM 
                                     ---------------------------------  ---------------------------------  ------- 
  Reported diluted (LPS)/EPS                      (14.4p)                             22.9p                   NM 
                                     ---------------------------------  ---------------------------------  ------- 
  Net cash*                                       GBP0.4m                            GBP0.3m                 24% 
                                     ---------------------------------  ---------------------------------  ------- 
 
  Adjusted performance measures 
                                     ---------------------------------  ---------------------------------  ------- 
  Adjusted EBITDA**                               GBP34.8m                           GBP31.0m                12% 
                                     ---------------------------------  ---------------------------------  ------- 
  Adjusted diluted EPS                             35.3p                              32.3p                   9% 
                                     ---------------------------------  ---------------------------------  ------- 
 
  Performance against Key                          Target                                 Actual 
  Performance Indicators 
                                     ---------------------------------  ------------------------------------------ 
  KX annual recurring revenue (ARR) 
   growth                                          35-40%                                   39% 
                                     ---------------------------------  ------------------------------------------ 
  KX net revenue retention (NRR)                    110%                                   119 % 
                                     ---------------------------------  ------------------------------------------ 
  First Derivative revenue growth                   15%                                     18% 
                                     ---------------------------------  ------------------------------------------ 
  MRP revenue growth                                10%                                    (19%) 
                                     ---------------------------------  ------------------------------------------ 
 *                                   Excluding lease obligations 
 **                                  Adjusted for share based payments and restructure and 
                                      non-operational 
                                      costs 
 
 

Financial highlights

 
      -   Group revenue up 12% to GBP296m (up 6% at constant currency), led 
           by good performances at KX and First Derivative, both above full year 
           expectations, balanced by a reduction in revenue at MRP 
      -   KX revenue growth of 25% to GBP80.2m (FY22: GBP64.4m), with recurring 
           revenue up 47% to represent 72% of total KX revenue (FY22: 61%) and 
           reductions in both lower margin services revenue and lower value perpetual 
           license revenue as we continue to focus on growing our recurring revenue 
      -   First Derivative revenue GBP174.3m, up 18% (FY22: GBP148.0m), driven 
           by our strategy to deliver more value from our domain and technology 
           expertise and our push into complementary areas such as software engineering 
      -   MRP revenue down 19% to GBP41.5m (FY22: GBP51.1m), resulting from 
           lower spending on demand generation by our enterprise customers 
      -   Adjusted EBITDA up 12% to GBP34.8m (FY22: GBP31.0m), following investment 
           in people and systems, including the successful implementation of 
           an Oracle ERP system, to enable the Group to scale 
      -   Net cash GBP0.4m (FY22: GBP0.3m) resulting from focused cash management 
 

Current trading and outlook

Our targets continue to be centred on key performance indicators appropriate to value creation within each of our business units. In KX, the opportunities we see with customers and partners gives us confidence in delivering another strong year of ARR growth of at least 35%. In First Derivative, the alignment of our services with the strategic priorities of our customers provides us with confidence that we can grow faster than the market, with revenue growth in the range of 5% to 10% as well as a meaningful improvement towards our three-year EBITDA margin target of 15%. In MRP we expect the reduction in the cost base to deliver an improvement in EBITDA for the current year.

At the Group level we expect FY24 revenue in the range of GBP315m to GBP325m, with adjusted EBITDA in the range of GBP38m to GBP40m.

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) 
 Carlton Nelson 
 Virginia Bull                                  +44 (0)20 7597 5970 
 
Goodbody (Euronext Growth Adviser and Broker) 
 David Kearney 
 Don Harrington 
 Nick Donovan                                   +353 1 667 0420 
 
J.P. Morgan Cazenove (Broker) 
 James A. Kelly 
 Mose Adigun                                    +44 (0) 203 493 8000 
 
FTI Consulting 
 Matt Dixon 
 Dwight Burden 
 Victoria Caton                                 +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, which provides software to accelerate AI-driven innovation; First Derivative, providing consulting services which drive digital transformation in financial services and capital markets; and MRP, which provides technology-enabled services for enterprise demand generation. FD Technologies operates from 14 locations across Europe, North America and Asia Pacific, and employs 3,000 people worldwide.

For further information, please visit www.fdtechnologies.com and www.kx.com

Results presentation

A presentation for analysts will be held at FTI Consulting at 9.30am today, following which a recording of the presentation will be available on the Group's website.

Business Review

FD Technologies comprise three business units - KX, software to accelerate AI-driven innovation; First Derivative, consulting services which drive digital transformation in financial services and capital markets ; and MRP, which provides technology-enabled services for enterprise demand generation.

KX - Software to accelerate AI-driven innovation

KX's mission is to revolutionise AI-driven business innovation through time-series analytics, empowering enterprises to extract value from the ever-growing volume of data, much of it machine-generated and time-stamped. As the engine for real-time analytics in the cloud, our customers report that KX delivers 100x the performance of alternative solutions at 1/10(th) of the cost, fostering rapid innovation while maintaining cost efficiency.

During the year we launched the industry's first Data Timehouse, a new class of data management and AI platform, to provide enterprises with access to temporal data in a way that prioritises modelling and insight. Launched on Azure through our strategic partnership with Microsoft, this approach is backed by industry analysts Gartner, who are urging the adoption of technologies such as KX that are specifically built for the analysis of temporal data.

KX's addressable market is rapidly expanding, with the AI and data science platforms and applications sector, as estimated by Gartner, growing at a 29% CAGR to reach $135bn by 2025. Based on our targeted industries and geographic markets, we project our current serviceable market opportunity to be approximately $34bn by 2025.

Strategic partnerships

Working with strategic partners is key to achieving our mission, and our priority is to establish KX as the high-performance engine within the hyperscale cloud platforms. We made significant progress during the year and the recent general availability of kdb Insights Enterprise on Microsoft Azure was a watershed moment for our strategic partnership with Microsoft. Since the launch we have seen positive customer reaction and strong partner engagement on joint propositions, resulting in growth in our pipeline across multiple industries.

The expected launch of additional products on Azure during the year, aimed for example at application developers, will enable our existing customers to transact via the marketplace to expand their current KX data estate. In addition, we have a number of innovation projects where we will integrate our technology with Large Language Models (LLMs) to bring analytics into the day-to-day workflow of users, dramatically improving their experience.

We recently announced that KX is partnering with Amazon Web Services (AWS) to launch kdb Insights as a fully managed cloud-native service on Amazon FinSpace, AWS's data management and analytics service for the financial services industry. KX and AWS are working together to attract both new customers and to provide existing KX customers with a path to migrate their existing kdb workloads to the cloud, benefitting from both the Python-enabled capabilities of kdb Insights and managed services provided by AWS.

We have also made progress with other hyperscalers and established a dedicated partner team to develop and close these opportunities. This team is engaged with cloud hyperscale platforms, systems integrators, OEMs and independent software vendors (ISVs) seeking to integrate our kdb technology into their data and AI-driven applications.

Product development

At the heart of our products is kdb+, the world's fastest time-series and real-time analytics engine. The launch of kdb Insights Enterprise on Microsoft Azure has significantly expanded our ability to provide our technology's performance advantages to a wider audience. Among other benefits, it offers the versatility of microservices and cloud resources, enables Python and SQL developers to programme without knowing our proprietary language, q, and provides free trial and development resources for solution-building. This leads to broader adoption and faster value realisation for customers.

We continue to focus on making our technology more accessible and user-friendly, implementing a continuous development strategy with reusable services deployable across OEMs and ISVs.

Commercial progress

FY23 was our strongest year ever for incremental ACV, which increased by 93% from the prior year to GBP19m. We also delivered an improvement In Net Revenue Retention (NRR) to 119% (FY22: 106%) indicating that our strategy to increase our growth from existing customers is delivering results.

During the year we made a number of senior appointments to drive growth at KX. In August Ashok Reddy was appointed CEO, bringing a track record of successfully driving AI product innovation, revenue growth and commercial strategies at enterprise technology companies (including IBM, CA Technologies/Broadcom and Digital.ai). KX also recently appointed a Chief Revenue Officer, John Hoffman, with extensive experience in building and scaling revenue at data analytics providers.

We continue to invest in sales and marketing, expanding our go-to-market team to target opportunities across industries. Our strategy emphasises partnering to win new customers and growing our direct sales capability.

While financial services customers remain our largest revenue source, we are growing at a faster rate in other industries, validating our view of our technology as a horizontal solution across industries. Example customer wins in the period included:

 
 --   Syneos Health adopted KX to implement a Data Timehouse, using kdb Insights 
       Enterprise on Microsoft Azure to improve clinical trial efficiency, reduce 
       costs and speed time to market for life-changing therapies for patients. 
 --   PSE, the Polish transmission system operator, selected KX to manage large 
       meter data volumes and complex analytics as part of its adoption of CGI's 
       Central Energy Market Information System in a multi-year deal. 
 --   A leading investment bank adopted kdb Insights as part of its large-scale 
       cloud migration project, moving its KX on-premise workloads to the cloud 
       with no reduction in performance at a fraction of the total operating 
       cost. 
 

First Derivative - driving digital transformation in financial services and capital markets

First Derivative delivered 18% revenue growth for the year, resulting from structural demand drivers for our services across regulatory compliance and digital transformation. Our performance was stronger than that of the market, as a result of our strategy to deliver more value from our domain and technology expertise and our push into areas such as software engineering.

During the year we saw strong demand for our core practice areas such as transaction reporting and Know Your Customer compliance, while the move to the cloud by our customers is creating opportunities as they look to completely rebuild their core software architecture. This latter trend was a driver in our decision to establish a software engineering practice, which delivered impressive growth in the year and where we have a growing pipeline.

Our priorities for the current year are to continue to broaden our service offerings and seek multi-year engagements with clients, to increase the diversity and robustness of our revenues. We expect to continue the internationalisation of our business, with good growth in the year in Asia and a growing pipeline of opportunities. We also expect our clients to continue their drive to get value from their technology spend by achieving the optimal delivery structure and see continued demand for our near shore capabilities as a result.

Our positivity about our growth prospects is tempered by the external environment which has created a level of caution within some clients, with projects taking longer to be approved than in recent periods. At the same time, we are seeing an easing in the pressures of wage inflation and staff attrition, which alongside our increasing scale should assist our expectation of margin improvement in the current year as we move towards our FY26 goal of 15% EBITDA margin.

We continue to believe First Derivative is well positioned, with high levels of repeat revenue, structural demand drivers assisting our growth and a strategy to drive greater value from our considerable capital markets expertise.

MRP - technology-enabled services for enterprise demand generation

MRP is our smallest business unit, representing 14% of revenue in FY23. It 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. Prelytix tracks more than 1.5 billion intent signals per day, enabling MRP 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 Account Based Marketing (ABM) in its Q2 2022 report on the sector.

Throughout the year MRP's customer budgets remained under pressure, with demand generation spend remaining weak in the economic environment. We have seen a stabilisation in revenue run rate since the year end and coupled with the steps taken to align its cost base, we expect to deliver an improved EBITDA performance for the current year. We continue to believe MRP has the opportunity to deliver double digit revenue growth when spending on demand generation improves.

People

The Group currently employs 3,000 people, similar to the number employed at the same time last year. Our employee policies are designed to enable us to attract and retain top talent and during the year we implemented a number of initiatives to assist these goals.

We continued to pay particular attention to learning and development, with a strong focus on leadership, as well as the Group's culture. We introduced our Aspiring Leadership programme, which offers a structured and practical path to fast-track high potential individuals into leadership roles, and appointed leaders to run our talent and people initiatives. We also evaluated and benchmarked every employee across the Group to ensure everyone is paid competitively.

We continue to evolve the ways in which our people connect and collaborate, with our latest annual engagement survey which shows an increase in the number of our employees that feel engaged to 82%. During the year we completed the implementation of an Oracle Cloud Fusion ERP system that includes a Human Resources Information System, enabling us to work more strategically.

Summary and outlook

KX and First Derivative both delivered strong growth in their KPIs for the year and are well placed to deliver on their potential following a year of execution of strategy. In KX the growing importance of real-time analytics and our ability to accelerate AI workloads, combined with our product and commercial strategies are establishing us as a key component of modern data architecture. These factors are driving opportunities with customers and partners that support our confidence in another year of strong growth in ARR, of at least 35%. First Derivative continues to evolve its service offerings to assist customers with their strategic objectives and we expect this to enable growth ahead of its market, with revenue expected to increase in the range of 5% to 10% and margin improvement towards our three-year target of 15% . MRP's EBITDA performance is expected to improve following the alignment of its cost base, with growth expected to return when spending on demand generation increases.

At the Group level we expect FY24 revenue in the range of GBP315m to GBP325m, with adjusted EBITDA in the range of GBP38m to GBP40m.

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.

 
                                            FY23                                      FY22 
                                                                    ---------------------------------------- 
                            Group      KX        First       MRP      Group      KX        First       MRP      Group 
                                               Derivative                                Derivative             change 
                            GBPm      GBPm       GBPm        GBPm     GBPm      GBPm       GBPm        GBPm 
 
                                                                                                                 12 
 Revenue                    296.0     80.2       174.3       41.5     263.5     64.4       148.0       51.1       % 
                                                                                                                 10 
 Cost of sales             (173.7)   (22.3)     (127.0)     (24.4)   (157.3)   (19.9)     (108.6)     (28.8)      % 
------------------------            -------  ------------  -------            -------  ------------  ------- 
                                                                                                                 15 
 Gross profit               122.3     58.0       47.3        17.0     106.1     44.5       39.4        22.2       % 
 Gross margin                41%      72%         27%        41%       40%      69%         27%        44% 
 
                                                                                                                 28 
 R&D expenditure           (27.1)    (23.0)      (0.4)      (3.7)    (21.1)    (18.6)      (0.2)      (2.3)       % 
                                                                                                                 25 
 R&D capitalised            23.1      19.0        0.4        3.7      18.6      16.1        0.2        2.3        % 
------------------------            -------  ------------  -------            -------  ------------  ------- 
                                                                                                                 54 
 Net R&D                    (4.0)    (4.0)         -          -       (2.6)    (2.6)         -          -         % 
 
 Sales and marketing 
  costs                    (50.9)    (26.3)     (15.3)      (9.4)    (47.4)    (23.6)     (14.5)      (9.3)      8 % 
 
                                                                                                                 30 
 Adjusted admin expenses   (32.7)    (11.1)     (15.4)      (6.2)    (25.2)    (8.6)      (10.9)      (5.7)       % 
 
                                                                                                                 12 
 Adjusted EBITDA            34.8      16.6       16.7        1.4      31.0      9.8        14.0        7.3        % 
 Adjusted EBITDA margin      12%      21%         10%         3%       12%      15%         9%         14% 
 

The Group delivered double-digit increases in both revenue and adjusted EBITDA. Revenue growth was driven by strong growth in recurring revenue at KX and good growth by First Derivative offset by a revenue decline in MRP as a result of difficult market conditions. This drove 15% growth in gross profit to GBP122.3m (FY22: GBP106.1m), with increasing scale and growth in higher margin revenues resulting in gross margin of 41% (FY22: 40%). We continue to invest in line with our strategic objectives, including investments in systems and people. In addition, inflationary cost pressures which increased admin expenses and the impact of MRP, resulted in adjusted EBITDA margin remaining at 12%.

Revenue growth was boosted during the period by the strength of the dollar against sterling, our reporting currency, with constant currency revenue growth of 6%. Due to the natural hedge of our operations in the US the impact on profitability was marginal.

KX

 
                         KX total               Financial services          Industry 
                                          -----------------------------  -------------- 
                    FY23   FY22   Change    FY23   FY22   Change   FY23   FY22   Change 
                   GBPm    GBPm            GBPm    GBPm            GBPm   GBPm 
 Revenue           80.2    64.4    25%     67.9    55.4    23%     12.4   9.1     37% 
 Recurring         57.6    39.2    47%     50.2    35.5    41%     7.4    3.7     102% 
 Perpetual          1.6    3.6    (57%)     0.2    1.8    (88%)    1.3    1.8    (24%) 
 Total software    59.1    42.8    38%     50.4    37.4    35%     8.7    5.4     61% 
                  ------  -----           ------  -----           -----  ----- 
 Services          21.1    21.6    (2%)    17.5    18.0    (3%)    3.6    3.6      0% 
 
 Gross profit      58.0    44.5    30% 
 Adjusted 
  EBITDA           16.6    9.8     70% 
 
 

KX delivered a strong performance in the year, with 25% revenue growth driven by 47% growth in recurring revenue to GBP57.6m, balanced by a 2% reduction in services to GBP21.1m. The growth was enabled by an increase of 93% in annual contract value added to GBP18.7m, resulting in 39% growth in ARR to GBP65.3m. Services revenue, related to the implementation of our software, declined marginally to GBP21.1m as we enabled our customers to achieve time to value more quickly, reducing the cost and complexity of adopting KX and increasing the return on investment for our customers. Revenue from perpetual license sales continues to decline following our decision in 2021 to focus exclusively on subscription sales for new customers, and now represents just 2% of KX revenue.

Financial services revenue grew by 23% to GBP67.9m, with recurring revenue up 41%. We continue to benefit from adoption of kdb Insights by existing and new customers, attracted by its performance, ease of use and rapid time to value, as well as native integration with important developer languages such as Python and SQL.

Industry revenue grew by 37% to GBP12.4m with recurring revenue growing by 102% to GBP7.4m. Growth was led by subscription contracts across the healthcare, energy and manufacturing markets with both new and existing customers.

Alongside the growth in ARR our go-to-market team was also engaged with partners, particularly Microsoft and AWS, on joint go-to-market initiatives to support general availability of kdb Insights Enterprise on Microsoft Azure and kdb Insights on AWS FinSpace.

 
 Performance metrics                FY23   FY22   Change 
 
 Annual recurring revenue (ARR) 
  GBPm                              65.3   47.0    39% 
 Net revenue retention (NRR)        119%   106% 
 Gross margin                       72%    69% 
 R&D expenditure as % of revenue    29%    29% 
 Sales and marketing spend 
  as % of revenue                   33%    37% 
 Adjusted EBITDA margin             21%    15% 
 

The annual contract value signed in the period was GBP18.7m, up 93% on the prior year (FY22: GBP9.7m) and driven by the growth in new subscription deals in the period and our work with partners. This resulted in ARR increasing by 39% to GBP65.3m. NRR of 119% is ahead of the 106% in FY22 and in line with our mid-term target of 120%, with customer churn remaining at low levels.

First Derivative

 
                  FY23   FY22    Change 
                 GBPm    GBPm 
 
 Revenue         174.3   148.0    18% 
 Gross profit    47.3    39.4     20% 
 Adjusted 
  EBITDA         16.7    14.0     20% 
 

Revenue for the period was GBP174.3m, with growth of 18% ahead of our target for the year of 15%. We saw the strongest growth in supporting our customers in their near shore operations, which are expanding as they pull offshore delivery work into centres such as Dublin. We believe our services are well aligned with our customers' strategic priorities, with regulatory change, digital transformation and cost efficiency consistent themes.

Attrition and wage inflation rates were challenges across the industry during the year, which we managed effectively, although they did limit scope for margin improvement. We see an easing of these pressures in the year ahead in response to some caution from customers, as discussed in the business review. This is reflected in our guidance for lower revenue growth during the year, although reduced recruitment and onboarding costs and our growing scale should enable EBITDA margin progress.

 
 Performance metrics       FY23   FY22 
                          ----- 
 
 Gross margin              27%    27% 
 Adjusted EBITDA margin    10%     9% 
 

Gross margin was maintained at 27% for the year. Underlying this were increased costs in recruiting, training and deploying new consultants in response to industry-wide attrition pressures, mitigated by our ability to pass through wage inflation and the impact of delivering greater value from our expertise and domain knowledge.

MRP

 
                 FY23   FY22 
                 GBPm   GBPm   Change 
 
 Revenue         41.5   51.1   (19%) 
 
 Gross profit    17.0   22.2   (23%) 
 Adjusted 
  EBITDA         1.4    7.3    (80%) 
 

MRP derives revenue by combining cutting-edge predictive analytics with a full suite of account-based sales and marketing solutions. Throughout the year, concerns over the business outlook caused many of our customers to pause or reduce their demand generation activity, leading to a decline in revenue at MRP.

While we took action to align costs during the year, adjusted EBITDA decreased to GBP1.4m (FY22: GBP7.3m). In response, MRP has implemented cost savings that have reduced annualised operating costs by c. GBP6.0m and as a result we expect an improved performance in adjusted EBITDA in FY24.

 
 Performance metrics       FY23   FY22 
                          ----- 
 
 Gross margin              41%    44% 
 Adjusted EBITDA margin     3%    14% 
 

Gross margin declined slightly to 41% (FY22: 44%) as a result of lower services utilisation balanced by cost efficiencies in third-party costs incurred in our display marketing offering. Admin expenses increased as we invested in upgrading cybersecurity protection, improved legal capability and incurred wage inflation.

Group Performance

Adjusted EBITDA

The reconciliation of operating (loss)/profit to adjusted EBITDA is provided below:

 
                                         FY23   FY22 
                                         GBPm   GBPm 
 
Operating (loss)/profit                 (1.5)    6.4 
 
Restructure and non-operational costs     8.7    3.1 
Non-operational other income                -  (2.5) 
Non-operational IT expenses*              5.6    2.3 
Share based payment and related costs     0.4    1.7 
Depreciation and amortisation            21.6   20.1 
                                        -----  ----- 
 
Adjusted EBITDA                          34.8   31.0 
 
 

*Non-operational IT expenses represents ERP implementation costs that are required to be expensed under accounting standards

(Loss)/profit before tax

Adjusted profit before tax increased to GBP12.1m, with the increase in adjusted EBITDA balanced by higher depreciation and software amortisation charges. Financing costs increased by GBP0.9m reflecting higher interest rates partially offset as we continue to pay down debt.

The Group reported a loss before tax of GBP1.2m for the year, compared to a profit of GBP9.0m in FY22. The major factors were restructuring costs, particularly at MRP, the cost of implementing the Group's new Oracle ERP system and one-off costs to address legacy employee tax liabilities while on assignment.

The reconciliation of adjusted EBITDA to reported profit before tax is provided below.

 
                                                    FY23     FY22 
                                                    GBPm     GBPm 
 
 Adjusted EBITDA                                    34.8     31.0 
 Adjustments for: 
 Depreciation                                      (7.3)    (6.8) 
 Amortisation of software development costs       (11.5)   (10.2) 
 Net financing costs                               (3.9)    (3.0) 
 
 
 Adjusted profit before tax                         12.1     11.0 
 
 Adjustments for: 
 Amortisation of acquired intangibles              (2.8)    (3.1) 
 Share based payment and related costs             (0.4)    (1.7) 
 Restructure and non-operational costs             (8.7)    (3.1) 
 Non-operational other income                          -      2.5 
 Non-operational IT expenses                       (5.6)    (2.3) 
 Profit/(loss) on foreign currency translation       2.1    (1.8) 
 Share of profit of associate                          -      0.3 
 Profit on disposal of associate                     3.0      6.9 
 Net financing costs                               (0.9)      0.2 
 
 
 Reported (loss)/profit before tax                 (1.2)      9.0 
 
 

(Loss)/earnings per share

The Group reported a loss after tax of GBP4.0m for the year, compared to a profit after tax of GBP6.4m in FY22. Adjusted profit after tax was GBP9.9m, an 8% increase on the prior year, resulting in a 9% increase in adjusted diluted earnings per share for the period to 35.3p.

The calculation of adjusted profit after tax is detailed below:

 
                                                            FY23    FY22 
                                                            GBPm    GBPm 
 Reported (loss)/profit before tax                         (1.2)     9.0 
 Tax                                                       (2.8)   (2.6) 
                                                        --------  ------ 
 
 Reported (loss)/profit after tax                          (4.0)     6.4 
 
 Adjustments from (loss)/profit before tax (as per 
  the table above)                                          13.3     2.1 
 Tax effect of adjustments                                 (2.4)   (1.3) 
 Discrete tax items                                          3.0     1.9 
 
 
 Adjusted profit after tax                                   9.9     9.1 
 
 
 Weighted average number of ordinary shares (diluted)      28.0m   28.0m 
 
 Reported (LPS)/EPS (diluted)                            (14.4p)   22.9p 
 Adjusted EPS (diluted)                                    35.3p   32.3p 
 

Cash generation and net cash (excluding lease liabilities)

The Group generated GBP33.5m of cash from operating activities before the exceptional Oracle ERP implementation cash outlay incurred during the year of GBP5.1m, representing a 96% conversion of adjusted EBITDA. We continued to focus on cash collection and working capital improvements and the target for the full year from operating activities, cash conversion was in the range of 80-85% of adjusted EBITDA .

At the year end we had a net cash position of GBP0.4m, broadly unchanged from the prior year. The factors impacting the movement in net cash (excluding lease liabilities) are summarised in the table below:

 
                                                            FY23     FY22 
                                                            GBPm     GBPm 
 Opening net cash/(debt) (excluding lease liabilities)       0.3    (9.9) 
 
 Cash generated from operating activities before n 
  on-operational IT expenses                                33.5     29.9 
 Non-operational IT expenses                               (5.1)    (1.0) 
                                                         -------  ------- 
 
 Cash generated from operating activities                   28.5     28.9 
 
 Taxes paid                                                (1.5)    (0.4) 
 Capital expenditure: property, plant and equipment        (2.9)    (2.8) 
 Proceeds from sale of property, plant and equipment           -      0.9 
 Capital expenditure: intangible assets                   (23.4)   (18.9) 
 Sale of other investments and associates                    0.1     11.0 
 Investments                                                 8.1      0.1 
 Issue of new shares                                         3.1      0.8 
 Interest, foreign exchange and other                     (11.9)    (9.3) 
                                                         -------  ------- 
 
 Closing net cash (excluding lease liabilities)              0.4      0.3 
 
 

The drivers of cash performance in FY23 were the increasing spend on research and development, of which GBP23.1m was capitalised, and the sale of our investment in Quantile Technologies, following the completion of its sale to LSEG during the year.

After the year-end we refinanced our banking facilities, which had been due to expire in June 2024, on improved terms. The total facility remains at GBP130m and is entirely comprised of a revolving credit facility, replacing a GBP65m term loan and GBP65m revolving credit facility. The interest rate payable is SONIA/SOFR plus a fixed margin that depends on the level of debt relative to adjusted EBITDA. The margin on the new revolving credit facility is equal to 1.85% to 2.85%, this compares favourably to the previous margin of 2% to 3%. The lead arranger for the facility remains Bank of Ireland, with continued participation from Barclays and AIB and new participation from HSBC.

Definition of terms

The Group uses the following definitions for its key metrics:

Annual recurring revenue (ARR) : the value at the end of the accounting period of recurring software revenue to be recognised in the next twelve months, formerly defined as "exit annual recurring revenue".

Annual contract value (ACV): the sum of the value of each customer contract signed during the year divided by the number of years in each contract.

Net revenue retention rate (NRR) : is based on the actual revenues in the quarter annualised forward to twelve months and compared to the 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 GBP66.6m (FY22: GBP51.9m) adjusted for depreciation and amortisation of GBP21.6m (FY22: GBP20.1m), share based payments and related costs of GBP0.4m (FY22: GBP1.7m) and, restructure and non-operational costs of GBP8.7m (FY22: GBP3.1m), IT Systems implementation costs expensed GBP5.6m (FY22: GBP2.3m) and other income GBP(2.4)m (FY22: GBP(0.5)m).

Consolidated statement of comprehensive income

Year ended 28 February 2023

 
                                                                  2023       2022 
                                                       Note    GBP'000    GBP'000 
-----------------------------------------------------  ----  ---------  --------- 
 
Revenue                                                   2    296,042    263,463 
 
Cost of sales                                                (173,701)  (157,327) 
 
Gross profit                                              2    122,341    106,136 
-----------------------------------------------------  ----  ---------  --------- 
 
Operating costs 
Research and development costs                                (27,112)   (21,125) 
- of which capitalised                                          23,138     18,553 
Sales and marketing costs                                     (50,927)   (47,355) 
Administrative expenses                                       (66,592)   (51,949) 
Impairment loss on trade and other receivables                 (2,645)      (695) 
 
Total operating costs                                        (124,138)  (102,571) 
-----------------------------------------------------  ----  ---------  --------- 
 
Other income                                                       249      2,816 
 
Operating (loss)/profit                                        (1,548)      6,381 
-----------------------------------------------------  ----  ---------  --------- 
 
Finance income                                                      24        262 
Finance expense                                                (4,777)    (3,015) 
Gain/(loss) on foreign currency translation                      2,107    (1,834) 
-----------------------------------------------------  ----  ---------  --------- 
Net finance costs                                              (2,646)    (4,587) 
 
Share of gain of associate, net of tax                               -        262 
Profit on disposal of associate                                  3,017      6,943 
 
(Loss)/profit before taxation                                  (1,177)      8,999 
 
Income tax expense                                             (2,836)    (2,572) 
 
(Loss)/profit for the year                                     (4,013)      6,427 
-----------------------------------------------------  ----  ---------  --------- 
 
(Loss)/profit for the year                                     (4,013)      6,427 
Other comprehensive income 
Items that will not be reclassified subsequently 
 to profit or loss 
Equity investments at FVOCI - net change in fair 
 value                                                           (522)    (1,408) 
Net gain on sale of FVOCI holding                                    -        150 
 
Items that will or may be reclassified subsequently 
 to profit or loss 
Net exchange gain on net investment in foreign 
 subsidiaries                                                   12,052      3,237 
Net loss on hedge of net investment in foreign 
 subsidiaries                                                  (3,124)    (1,183) 
-----------------------------------------------------  ----  ---------  --------- 
Other comprehensive income for the year, net of 
 tax                                                             8,315        796 
-----------------------------------------------------  ----  ---------  --------- 
Total comprehensive income for the year attributable 
 to owners of the parent                                         4,393      7,223 
-----------------------------------------------------  ----  ---------  --------- 
 
                                                       Note      Pence      Pence 
-----------------------------------------------------  ----  ---------  --------- 
(Loss)/earnings per share 
Basic                                                    3a     (14.4)       23.1 
Diluted                                                  3a     (14.4)       22.9 
-----------------------------------------------------  ----  ---------  --------- 
 

All profits are attributable to the owners of the Company and relate to continuing activities.

Consolidated balance sheet

As at 28 February 2023

 
                                                        2023     2022 
                                               Note  GBP'000  GBP'000 
---------------------------------------------  ----  -------  ------- 
Assets 
Property, plant and equipment                     4   25,593   28,343 
Intangible assets and goodwill                    5  175,660  155,607 
Other financial assets                                 9,356   19,676 
Trade and other receivables                            2,548    3,745 
Deferred tax assets                                   21,313   17,998 
---------------------------------------------  ----  -------  ------- 
Non-current assets                                   234,470  225,369 
---------------------------------------------  ----  -------  ------- 
Trade and other receivables                           96,749   74,029 
Current tax receivable                                 6,114    4,172 
Cash and cash equivalents                             36,905   48,564 
---------------------------------------------  ----  -------  ------- 
Current assets                                       139,768  126,765 
---------------------------------------------  ----  -------  ------- 
Total assets                                         374,238  352,134 
---------------------------------------------  ----  -------  ------- 
Equity 
Share capital                                            140      139 
Share premium                                        103,789  100,424 
Share option reserve                                  18,974   18,404 
Fair value reserve                                     3,002    9,755 
Currency translation adjustment reserve                5,354  (3,574) 
Retained earnings                                     69,609   67,391 
---------------------------------------------  ----  -------  ------- 
Equity attributable to owners of the Company         200,868  192,539 
---------------------------------------------  ----  -------  ------- 
Liabilities 
Loans and borrowings                              6   17,026   62,504 
Trade and other payables                               3,681    3,190 
Deferred tax liabilities                              15,758   15,307 
---------------------------------------------  ----  -------  ------- 
Non-current liabilities                               36,465   81,001 
---------------------------------------------  ----  -------  ------- 
Loans and borrowings                                  39,911    9,054 
Trade and other payables                              41,466   33,606 
Deferred income                                       48,407   26,990 
Current tax payable                                      682      382 
Employee benefits                                      6,439    8,562 
---------------------------------------------  ----  -------  ------- 
Current liabilities                                  136,905   78,594 
---------------------------------------------  ----  -------  ------- 
Total liabilities                                    173,370  159,595 
---------------------------------------------  ----  -------  ------- 
Total equity and liabilities                         374,238  352,134 
---------------------------------------------  ----  -------  ------- 
 

Consolidated statement of changes in equity

Year ended 28 February 2023

 
                                                                 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 
 2022                                139   100,424         -    18,404       9,755       (3,574)     67,391  192,539 
------------------------------  --------  --------  --------  --------  ----------  ------------  ---------  ------- 
Total comprehensive 
 income for the year 
Loss for the year                      -         -         -         -           -             -    (4,013)  (4,013) 
Other comprehensive 
 income 
Net exchange gain on 
 net investment in foreign 
 subsidiaries                          -         -         -         -           -        12,052          -   12,052 
Net exchange loss on 
 hedge of net investment 
 in foreign subsidiaries               -         -         -         -           -       (3,124)          -  (3,124) 
Transfer of reserve 
 of sale of equity investment          -         -         -         -     (6,231)             -      6,231        - 
Net change in fair 
 value of equity investments 
 at FVOCI                              -         -         -         -       (522)             -          -    (522) 
------------------------------  --------  --------  --------  --------  ----------  ------------  ---------  ------- 
Total comprehensive 
 income for the year                   -         -         -         -     (6,753)         8,928      2,218    4,393 
Transactions with 
 owners of the Company 
Tax relating to share 
 options                               -         -         -       245           -             -          -      245 
Exercise of share options              1     3,079         -         -           -             -          -    3,080 
Issue of shares                        -       286         -         -           -             -          -      286 
Share based payment 
 charge                                -         -         -       325           -             -          -      325 
------------------------------  --------  --------  --------  --------  ----------  ------------  ---------  ------- 
Balance at 28 February 
 2023                                140   103,789         -    18,974       3,002         5,354     69,609  200,868 
------------------------------  --------  --------  --------  --------  ----------  ------------  ---------  ------- 
 

Consolidated statement of changes in equity (continued)

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 (see note 
 21)                                  -         -   (8,118)         -           -             -      8,118        - 
-----------------------------  --------  --------  --------  --------  ----------  ------------  ---------  ------- 
Balance at 28 February 
 2022                               139   100,424         -    18,404       9,755       (3,574)     67,391  192,539 
-----------------------------  --------  --------  --------  --------  ----------  ------------  ---------  ------- 
 

Consolidated cash flow statement

Year ended 28 February 2023

 
                                                          2023      2022 
                                                       GBP'000   GBP'000 
----------------------------------------------------  --------  -------- 
Cash flows from operating activities 
(Loss)/profit for the year                             (4,013)     6,427 
Adjustments for: 
Net finance costs                                        2,646     4,587 
Depreciation of property, plant and equipment            7,265     6,308 
Amortisation of intangible assets                       14,331    13,817 
Equity-settled share based payment transactions            325     1,534 
Profit on disposal of associate                        (3,017)   (6,943) 
Loss/(profit) on disposal of fixed assets                    5     (222) 
Other income                                               (9)   (2,499) 
Grant income                                             (240)     (317) 
Share of profit of associate                                 -     (262) 
Tax expense                                              2,836     2,572 
----------------------------------------------------  --------  -------- 
                                                        20,129    25,002 
Changes in: 
Trade and other receivables                           (14,604)   (1,585) 
Trade and other payables and deferred income            22,970     5,473 
----------------------------------------------------  --------  -------- 
Cash generated from operating activities                28,495    28,890 
Taxes paid                                             (1,467)     (407) 
----------------------------------------------------  --------  -------- 
Net cash from operating activities                      27,028    28,483 
----------------------------------------------------  --------  -------- 
Cash flows from investing activities 
Interest received                                           24        19 
Acquisition of subsidiaries                                  -     (118) 
Acquisition of other investments                             -      (95) 
Sale of associate                                          100    11,001 
Sale of other investments                                8,139       175 
Acquisition of property, plant and equipment           (2,940)   (2,777) 
Proceeds from sale of property, plant and equipment         67       920 
Acquisition of intangible assets                      (23,468)  (18,931) 
----------------------------------------------------  --------  -------- 
Net cash used in investing activities                 (18,078)   (9,806) 
----------------------------------------------------  --------  -------- 
Cash flows from financing activities 
Proceeds from issue of share capital                     3,080       773 
Repayment of borrowings                               (17,823)  (19,141) 
Payment of lease liabilities                           (4,000)   (3,598) 
Interest paid                                          (3,666)   (2,932) 
----------------------------------------------------  --------  -------- 
Net cash used in financing activities                 (22,409)  (24,898) 
----------------------------------------------------  --------  -------- 
Net decrease in cash and cash equivalents             (13,459)   (6,221) 
Cash and cash equivalents at 1 March                    48,564    55,198 
Effects of exchange rate changes on cash held            1,800     (413) 
----------------------------------------------------  --------  -------- 
Cash and cash equivalents at 28 February                36,905    48,564 
----------------------------------------------------  --------  -------- 
 

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 2023 nor 28 February 2022 but is derived from those accounts. Statutory accounts for 2022 have been delivered to the Registrar of Companies and those for 2023 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 
                                  ----------------  ----------------  ----------------  ------------------ 
                                     2023     2022     2023     2022     2023     2022      2023      2022 
                                  GBP'000  GBP'000  GBP'000  GBP'000  GBP'000  GBP'000   GBP'000   GBP'000 
--------------------------------  -------  -------  -------  -------  -------  -------  --------  -------- 
Revenue by segment 
Revenue                            80,239   64,418  174,329  147,988   41,474   51,057   296,042   263,463 
--------------------------------  -------  -------  -------  -------  -------  -------  --------  -------- 
Gross profit                       57,971   44,520   47,345   39,376   17,025   22,240   122,341   106,136 
--------------------------------  -------  -------  -------  -------  -------  -------  --------  -------- 
Adjusted EBITDA                    16,621    9,782   16,712   13,982    1,429    7,283    34,762    31,047 
--------------------------------  -------  -------  -------  -------  -------  -------  --------  -------- 
Restructure and non-operational 
 costs                                                                                   (8,716)   (3,082) 
IT systems implementation 
 costs expensed                                                                          (5,562)   (2,287) 
Non-operational other 
 income                                                                                        -     2,499 
Share based payment and 
 related costs                                                                             (436)   (1,671) 
Depreciation and amortisation                                                           (18,799)  (16,994) 
Amortisation of acquired 
 intangibles                                                                             (2,797)   (3,131) 
--------------------------------  -------  -------  -------  -------  -------  -------  --------  -------- 
Operating (loss)/profit                                                                  (1,548)     6,381 
--------------------------------  -------  -------  -------  -------  -------  -------  --------  -------- 
Net finance costs                                                                        (2,646)   (4,587) 
Profit on disposal of 
 associate                                                                                 3,017     6,943 
Share of profit of associate, 
 net of tax                                                                                    -       262 
--------------------------------  -------  -------  -------  -------  -------  -------  --------  -------- 
(Loss)/profit before 
 taxation                                                                                (1,177)     8,999 
--------------------------------  -------  -------  -------  -------  -------  -------  --------  -------- 
 

Geographical location analysis

 
                   Revenues       Non-current assets 
               ----------------  -------------------- 
                  2023     2022       2023       2022 
               GBP'000  GBP'000    GBP'000    GBP'000 
-------------  -------  -------  ---------  --------- 
UK             104,163   79,355     87,589     87,448 
EMEA            55,062   46,463     17,028     16,826 
The Americas   114,848  110,697    106,317    118,576 
Asia Pacific    21,969   26,948      2,223      2,952 
-------------  -------  -------  ---------  --------- 
Total          296,042  263,463    213,157    225,802 
-------------  -------  -------  ---------  --------- 
 

Disaggregation of revenue

 
                                       KX                FD               MRP              Total 
                                ----------------  ----------------  ----------------  ---------------- 
                                   2023     2022     2023     2022     2023     2022     2023     2022 
                                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         1,556    3,589        -        -        -        -    1,556    3,589 
Sale of goods - recurring        58,326   39,192        -        -   22,446   27,015   80,772   66,207 
Rendering of services            20,357   21,637  174,329  147,988   19,028   24,042  213,714  193,667 
------------------------------  -------  -------  -------  -------  -------  -------  -------  ------- 
                                 80,239   64,418  174,329  147,988   41,474   51,057  296,042  263,463 
------------------------------  -------  -------  -------  -------  -------  -------  -------  ------- 
Timing of revenue recognition 
At a point in time                1,556    3,589        -        -        -        -    1,556    3,589 
Over time                        78,683   60,829  174,329  147,988   41,474   51,057  294,486  259,874 
------------------------------  -------  -------  -------  -------  -------  -------  -------  ------- 
                                 80,239   64,418  174,329  147,988   41,474   51,057  296,042  263,463 
------------------------------  -------  -------  -------  -------  -------  -------  -------  ------- 
 

3. a) (Loss)/earnings per ordinary share

Basic

The calculation of basic (loss)/earnings per share at 28 February 2023 was based on the loss attributable to ordinary shareholders of GBP4,013k (2022: profit GBP6,427k), and a weighted average number of ordinary shares in issue of 27,962k (2022: 27,782k).

 
                                         2023        2022 
                                        Pence       Pence 
                                    per share   per share 
---------------------------------  ----------  ---------- 
Basic ( loss)/earnings per share       (14.4)        23.1 
---------------------------------  ----------  ---------- 
 

Weighted average number of ordinary shares

 
                                                              2023    2022 
                                                            Number  Number 
                                                              '000    '000 
----------------------------------------------------------  ------  ------ 
Issued ordinary shares at 1 March                           27,826  27,717 
Effect of share options exercised                              124      58 
Effect of shares issued as remuneration                         12       7 
----------------------------------------------------------  ------  ------ 
Weighted average number of ordinary shares at 28 February   27,962  27,782 
----------------------------------------------------------  ------  ------ 
 

Diluted

The calculation of diluted (loss)/earnings per share at 28 February 2023 was based on the loss attributable to ordinary shareholders of GBP4,013k (2022: profit GBP6,427k) and a weighted average number of ordinary shares after adjustment for the effects of all dilutive potential ordinary shares of 27,962k (2022: 28,036k).

 
                                          2023        2022 
                                         Pence       Pence 
                                     per share   per share 
----------------------------------  ----------  ---------- 
Diluted (loss)/earnings per share       (14.4)        22.9 
----------------------------------  ----------  ---------- 
 

Weighted average number of ordinary shares (diluted)

 
                                                            2023    2022 
                                                          Number  Number 
                                                            '000    '000 
--------------------------------------------------------  ------  ------ 
Weighted average number of ordinary shares (basic)        27,962  27,782 
Effect of dilutive share options in issue                      -     254 
--------------------------------------------------------  ------  ------ 
Weighted average number of ordinary shares (diluted) at 
 28 February                                              27,962  28,036 
--------------------------------------------------------  ------  ------ 
 

At 28 February 2023 in accordance with IAS 33, due to the loss in the financial period share options in issue are anti-dilutive meaning there is no difference between basic and diluted earnings per share. In the prior year 518,137 shares were excluded from the diluted weighted average 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.

3. b) (Loss)/ earnings before tax per ordinary share

(Loss)/earnings before tax per share are based on loss before taxation of GBP1,177k (2022: profit GBP8,999k). The number of shares used in this calculation is consistent with note 3(a) above.

 
                                                              2023        2022 
                                                             Pence       Pence 
                                                         per share   per share 
------------------------------------------------------  ----------  ---------- 
Basic (loss)/earnings before tax per ordinary share          (4.3)        32.4 
Diluted (loss)/earnings before tax per ordinary share        (4.3)        32.1 
------------------------------------------------------  ----------  ---------- 
 

Reconciliation from (loss)/earnings per ordinary share to (loss)/ earnings before tax per ordinary share:

 
                                                     2023        2022 
                                                    Pence       Pence 
                                                per share   per share 
---------------------------------------------  ----------  ---------- 
Basic (loss)/earnings per share                    (14.4)        23.1 
Impact of taxation charge                            10.1         9.3 
---------------------------------------------  ----------  ---------- 
Basic (loss)/earnings before tax per share          (4.3)        32.4 
---------------------------------------------  ----------  ---------- 
Diluted (loss)/earnings per share                  (14.4)        22.9 
Impact of taxation charge                            10.1         9.2 
---------------------------------------------  ----------  ---------- 
Diluted (loss)/earnings before tax per share        (4.3)        32.1 
---------------------------------------------  ----------  ---------- 
 

(Loss)/earnings before tax per share is presented to facilitate pre-tax comparison returns on comparable investments.

3. c) Adjusted earnings after tax per ordinary share

Adjusted earnings after tax per share is based on an adjusted profit after taxation of GBP9,864k (2022: GBP9,051k). The adjusted profit after tax has been calculated by adjusting the loss after tax GBP4,013k (2022: profit GBP6,427k) for the amortisation of acquired intangibles after tax effect of GBP2,565k (2022: GBP2,715k), share based payment and related charges after tax effect of GBP353k (2022: GBP1,353k), restructure and non-operational costs after tax effect of GBP14,781k (2022: GBP4,473k), profit on disposal of associate after tax and share of profit of associate after tax effect of GBP3,017k (2022: GBP7,206k), the profit on foreign currency translation after tax effect of GBP1,707k (2022: loss GBP1,485k), finance costs after tax effect of GBP902k (2022: GBPnil) and finance income from sale of investment after tax effect of GBPnil (2022: GBP197k). The number of shares used in this calculation is consistent with note 3(a) above.

 
                                                               2023        2022 
                                                              Pence       Pence 
                                                          per share   per share 
-------------------------------------------------------  ----------  ---------- 
Adjusted basic earnings after tax per ordinary share           35.3        32.6 
Adjusted diluted earnings after tax per ordinary share         35.3        32.3 
-------------------------------------------------------  ----------  ---------- 
 

4. 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 2022                5,444      14,372       1,366        30,171    51,353 
Additions                        441       2,362         137         1,035     3,975 
Disposals                      (104)        (34)           -         (880)   (1,018) 
Reclass                        1,468     (1,468)           -             -         - 
Exchange adjustments             230         624          89         1,443     2,386 
---------------------  -------------  ----------  ----------  ------------  -------- 
At 28 February 2023            7,479      15,856       1,592        31,769    56,696 
---------------------  -------------  ----------  ----------  ------------  -------- 
Depreciation 
At 1 March 2022                3,544       8,544       1,116         9,806    23,010 
Charge for the year              671       2,257         171         4,166     7,265 
Disposals                       (32)           -           -         (451)     (483) 
Reclass                         (38)         (9)          47             -         - 
Exchange adjustments             116         539          28           628     1,311 
---------------------  -------------  ----------  ----------  ------------  -------- 
At 28 February 2023            4,261      11,331       1,362        14,149    31,103 
---------------------  -------------  ----------  ----------  ------------  -------- 
 
 
                           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 
---------------------  -------------  ----------  ----------  ------------  -------- 
Carrying amounts 
At 1 March 2021                2,903       5,041         455        25,142    33,541 
---------------------  -------------  ----------  ----------  ------------  -------- 
At 28 February 2022            1,900       5,828         250        20,365    28,343 
---------------------  -------------  ----------  ----------  ------------  -------- 
At 28 February 2023            3,218       4,525         230        17,620    25,593 
---------------------  -------------  ----------  ----------  ------------  -------- 
 

5. 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 2022      106,501    12,834     29,769       743     101,540   251,387 
Additions                          -         -        330         -           -       330 
Development costs                  -         -          -         -      23,138    23,138 
Exchange adjustments          10,141     1,083      2,877        59         978    15,138 
--------------------------  --------  --------  ---------  --------  ----------  -------- 
At 28 February 2023          116,642    13,917     32,976       802     125,656   289,993 
--------------------------  --------  --------  ---------  --------  ----------  -------- 
Amortisation 
Balance at 1 March 2022            -    11,832     26,106       703      57,139    95,780 
Amortisation for the year          -       944      1,816        37      11,534    14,331 
Exchange adjustment                -     1,003      2,527        55         637     4,222 
--------------------------  --------  --------  ---------  --------  ----------  -------- 
At 28 February 2023                -    13,779     30,449       795      69,310   114,333 
--------------------------  --------  --------  ---------  --------  ----------  -------- 
 
 
                                                                     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 
--------------------------  --------  --------  ---------  --------  ----------  -------- 
Carrying amounts 
At 1 March 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 
--------------------------  --------  --------  ---------  --------  ----------  -------- 
At 28 February 2023          116,642       138      2,527         7      56,346   175,660 
--------------------------  --------  --------  ---------  --------  ----------  -------- 
 

6.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 
                          ----------------  ---------------- 
                             2023     2022     2023     2022 
                          GBP'000  GBP'000  GBP'000  GBP'000 
------------------------  -------  -------  -------  ------- 
Current liabilities 
Secured bank loans         36,499    5,311   36,499    5,311 
Lease liabilities           3,412    3,743    1,007    1,445 
------------------------  -------  -------  -------  ------- 
                           39,911    9,054   37,506    6,756 
------------------------  -------  -------  -------  ------- 
Non-current liabilities 
Secured bank loans              -   42,925        -   42,926 
Lease liabilities          17,026   19,579    7,522    8,549 
------------------------  -------  -------  -------  ------- 
                           17,026   62,504    7,522   51,475 
------------------------  -------  -------  -------  ------- 
 

Terms and repayment schedule

After the year end, we refinanced our banking facilities, which had been due to expire in June 2024, on improved terms. The total facility remains at GBP130m and is entirely comprised of a revolving credit facility, replacing a GBP65m term loan and GBP65m revolving credit facility. The interest rate payable is SONIA/SOFR plus a fixed margin that depends on the level of debt relative to adjusted EBITDA. The margin on the new revolving credit facility is equal to 1.85% to 2.85%, this compares favourably to the previous margin of 2% to 3%. The lead arranger for the facility remains Bank of Ireland, with continued participation from Barclays and AIB and new participation from HSBC.

7. Subsequent events

On 19 May 2023 the parent company FD Technologies plc renewed its banking facilities, which had been due to expire in June 2024. Further details of the loan financing arrangement are included in note 6.

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END

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May 23, 2023 02:00 ET (06:00 GMT)

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