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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Kape Technologies Plc | LSE:KAPE | London | Ordinary Share | IM00BQ8NYV14 | ORD USD0.0001 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 285.00 | 279.00 | 285.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Jul 2019 to Jul 2024
TIDMCROS
RNS Number : 2565K
Crossrider plc
20 September 2016
Crossrider plc
("Crossrider," the "Company" or the "Group")
Interim results for the six months ended 30 June 2016
Crossrider (AIM:CROS) today announces its unaudited half year results for the six months ended 30 June 2016.
Financial highlights
Hot Features
Premium
-- Revenue of $28.7 million (H1 2015: $40.8
million), down $12.1 million of which $11.9
million is due to the expected decline in
the Web Apps and License segment
-- App Distribution segment (1) result increased
to $5.9 million (H1 2015: $4.1 million)
-- Media segment result increased to $1.7 million
(H1/2015: $1.5 million)
-- Adjusted EBITDA(2) in line with management
expectations at $3.5 million (H1 2015: $5.5
million)
-- Adjusted basic EPS(3) at 1.8 cents per share
(H1 2015: 2.6 cents per share)
-- Adjusted cash flow from operations at $4.1
million (H1 2015: $5.0 million) representing
strong cash conversion of adjusted EBITDA
of 119% (H1 2015: 90%)
-- Cash balance at the end of the period of
$70.2 million to execute new strategic plan
(1) Segment results have been calculated using revenue less costs directly attributable to that segment (See Note 3 to the interim financial statements).
(2) EBITDA, Adjusted EBITDA and Adjusted cash flow from operations are non GAAP measures. Adjusted EBITDA and Adjusted cash flow from operations are company specific measures which exclude other operating income and expenses which are considered to be one off and non-recurring in nature. (See reconciliation in the Chief Financial Officer's review below).
(3) Adjusted basic EPS excludes the after tax impact of amortisation of acquired intangibles, and other operating income and expenses which are considered to be one off and non-recurring in nature.
Operational highlights
-- Appointment of new CEO Ido Erlichman on 31
May 2016
-- Strategic restructuring programme commenced
in June 2016, transitioning the Group to
operate as a digital distribution and product
hub - utilising the Company's existing technology
and intellectual property
-- The restructuring process initiated in June
2016 has, to date, resulted in $2 million
of annualised savings
-- New corporate structure implemented, with
two core divisions, which will be the focus
of the Group: App Distribution and Media.
Third division comprising Web App and Licensing
activity maintained in the short to medium
term
-- Successful launch of a synergistic third
party product on the App Distribution platform,
achieving a 125% increase in revenue and
doubling of product's previous monthly gross
profit.
-- 100% increase in driving mobile conversions
from mobile app downloads and subscriptions
services within the Media division
New reporting structure
Since June 2016 a major restructuring has been undertaken, resulting in changes to the Group's management reporting. The change in reporting provides a more accurate and transparent description of activities. The Group now operates three reportable segments:
-- App Distribution - comprising the Group's
app distribution product hub. Revenue is
generated from end users purchasing products
online and includes the Reimage activity,
traffic acquisition capabilities, conversion
expertise as well as retention and upselling
activity through technology and knowhow,
previously reported within the Web division
-- Media - comprising the Group's marketing
technology platforms and ad network activities,
typically with revenue sharing arrangements
with media partners; among others this includes
Ajilion and Definiti's activities, previously
reported within our Mobile division
-- Web Apps and License - comprising revenue
generated from licensing the web apps monetisation
platform and associated technology, previously
reported within the Web division and which,
as previously announced, is in decline
Consequently, H1 2015 segmental results have been restated. The results of these segments are set out in the Chief Financial Officer's review. There is no change to the reported consolidated Group financial results for any prior period.
Outlook
The Board is pleased to report that following the June 2016 restructuring, the Group has experienced immediate and measurable benefits. In addition to the annualised cost savings of $2 million, the Group has successfully restructured the business into two primary divisions, which is expected to leverage the Company's existing distribution capabilities and technology. Crossrider's strategic focus is now on growing its digital distribution hub through the launch of new synergistic products, technologies and expanding its client base.
Commenting on the results, Ido Erlichman, Chief Executive Officer of Crossrider, said:
"The first half of 2016 has been a period of transformation for Crossrider. The restructuring programme yielded immediate increases to profitability and cash flow. I am now pleased to present the new company structure and strategy which the Board believes will deliver long term value for shareholders.
We believe the transition to a digital distribution and product hub will be a natural and profitable progression for the Group. The transition will commercialise the Company's existing expertise in driving online traffic and the monetisation of big data. Like many online companies, Crossrider, is maturing and finding the best way to utilise its technology and online presence. The Company has already seen a third party product increase its revenue by 125% by launching on our App Distribution platform. This initial proof of concept gives us the confidence that we are well positioned to seize our market opportunities."
For further information contact:
Crossrider plc +44 (0) 20 3772 2496 Ido Erlichman, Chief Executive via Bell Pottinger Officer Moran Laufer, Acting Chief Financial Officer Shore Capital Bidhi Bhoma Toby Gibbs +44 (0) 20 7408 4090 Bell Pottinger David Rydell James Newman Sam Cartwright Vrudhi Patel +44 (0) 20 3772 2496
About Crossrider
Crossrider is an online distribution and digital product company. The Company utilises its proprietary marketing technology platforms to prospect, optimise and monetise mobile and web media. Crossrider powers all aspects of an online product to create a superb user experience. The Company offers improved retention and re-engagement rates, greatly enhancing the value of user activity. Crossrider provides its platforms to its customers for use with their products as well as developing and expanding its own product portfolio.
Our vision is to provide and develop best-in-class digital products for our users globally.
www.crossrider.com
Chief Executive Officer's review
In the last quarter, Crossrider embarked on a pivotal transition programme, utilising the Company's capabilities to become an online digital distribution and product hub. We are honing Crossrider's advertising and marketing technology capabilities in order to focus on the distribution of our own products and services, expanding our reach along the value chain. Crossrider started as an advertising technology company and its strengths have always been centred on the capture and commercialisation of big data, user acquisition and optimised conversions. Our focus will now be to utilise that same strength in order to provide a distribution platform and product hub for companies focused on digital products as well as to our own consumer base.
Following my appointment as CEO on 31 May 2016, we instituted a three step strategic plan to drive the Company forward, based on: (i) restructuring and strengthening the core operations; (ii) organic growth; and (iii) laying the foundation for future expansion through bolt-on and strategic acquisitions to support the business model transformation.
We are both satisfied and excited to see that in the short period since this process began, Crossrider has made meaningful progress in refocusing the company on cash flow and profitability, streamlining operations, organically growing our existing platform, and setting the stage for taking the next steps towards growth.
Financial results
In light of the board's decision to cease the investment in the Web Apps business at the beginning of 2016, revenues and Adjusted EBITDA decreased by 29.6% and 36.4%, respectively, compared to the same period in 2015.
Excluding the Web Apps business, the App Distribution division and the Media division showed consistent growth.
The App Distribution segment results grew from $4.1 million to $5.9 million and the margins improved from 21.5% to 32.3% compared to the first half of 2015.
The Media division's segment results improved from $1.5 million to $1.7 million and margins improved from 21.6% to 23.2% compared to the first half of 2015.
Despite the restructuring cost, the share buyback and deferred consideration paid in respect of previous acquisitions, the Group had $70.2 million in cash and no debt at the end of the period. Adjusted cash flow from operations was $4.1 million in the period and this represents a cash conversion of adjusted EBITDA of 119%.
Laying the foundation for future growth
Since June, Crossrider has undergone a major restructuring. This process included introducing a new management and a new corporate structure aimed at supporting our strategic decision to expand our app distribution activities and online product base. We have also taken steps to focus the company on cash generative activities, enforce working capital discipline and provide quality service to our customers and partners.
1 Segment result has been calculated using revenue less costs directly attributable to that segment
As part of the change in management, we appointed Moran Laufer on 19 August 2016, as Acting Chief Financial Officer after completion of a handover process with Mark Carlisle.
We have consolidated most of our activities into two divisions: Media and App Distribution; while retaining our Web Apps Licensing activity, this includes the Browser Extension platform, which has been outsourced through a licensing agreement since January.
In the Media division we have reduced the headcount by 20% and tightened our working capital as part of a comprehensive plan to create a leaner team focused on revenue and growth from mobile products and services.
In the App Distribution division we are reducing our reliance on outsourcing activities in order to increase our control over the distribution of products. This will allow us not only to reduce costs but also to improve customer service and retention rates with the aim of shifting to a more recurring revenue base.
Through our restructuring we have realised $2 million in annualised cost savings made predominantly by reduction of headcount and realisation of operational efficiencies.
We have now put in place an organisational and management structure, which provides our best in class team with a solid and strong base for realising our expansion programme.
Organic Growth
To return to the path of organic growth we have focused on strengthening our distribution in the Media and App Distribution divisions. This consists of traffic acquisition capabilities, conversion expertise as well as retention and upsell through technological tools and knowhow.
In the App Distribution division we are bringing our retention activities in-house. This move will help improve our customer service metrics. We now have better control over our distribution, thus improving the quality of our processes, and increasing our margins.
We have also bolstered our in-house media buying capabilities to achieve diversification of our media sources, thus increasing traffic volume, quality and market share.
We expect these changes to extend customer lifetime value, enable margin consolidation and have a direct effect on customer retention, and consequently, on profitability.
Our app distribution platform has been able to consistently out-perform comparable platforms and provides us with a competitive advantage in our current market as well as tremendous potential in new market areas.
We are now in position to grow our app product range via our distribution platform.
In our Media division we have expanded our foothold in the evolving media and advertising space. Leveraging our mobile capabilities, we have entered new markets and expanded our current offering into the native, social and content distribution channels.
These steps have resulted in stable growth in revenues compared with the first half of 2015, as well as a 100% increase in conversions in downloads and subscription services from 1.02 million to 2.05 million.
We are constantly honing our advertising technologies and supporting tools to reach the optimal level of our media buying services. This is all part of our company wide strategy to maintain best in class online distribution funnels for digital products.
Future Expansion
Completing the restructuring process and streamlining our activities, we now aim to move into the next stage in our strategy, accelerating future growth into the online product and distribution space. To do so, our current focus is on identifying technologies that improve our distribution funnel, products that complement our current offering or acquiring a customer base which accelerates our reach.
We have started to successfully test a number of products on our platform in recent months. One example is a synergistic third party product to our internet security products, which we have been promoting within our app distribution platform. Through this process we were able to achieve a 125% increase in revenue from the product as well as double the gross profit compared to the monthly average prior to launch of this product on our platform. This product is a good example of the potential for scaling up our App Distribution division.
Recently we established "Crossrider Innovation", a technology incubator hosting entrepreneurs with great technical skills, ideas and execution capabilities. This helps maintain Crossrider's access to great teams, as well as innovative technologies still at an early stage. We see this as an important, low cost, pillar of our strategy to identify complementary products to our current offerings as well as technologies that can strengthen our distribution platform.
While we do not want to downplay the challenges we face in our transformation from an Adtech company into a digital distribution and product hub, our initial progress gives the board confidence in the future direction of the business.
Outlook
The immediate steps we have taken have resulted in positive outcomes and the Group is now trading well. In the coming months we expect to see: (i) new initiatives that leverage existing assets; and (ii) acquisitions of new synergistic products, technologies or client base. We intend to continue moving forward to our goal of developing Crossrider into a leading online distribution and digital product hub.
Ido Erlichman
Chief Executive Officer
20 September 2016
Chief Financial Officer's review
Overview
Revenue in the first half of 2016 decreased to $28.7 million (H1 2015: $40.8 million) and Adjusted EBITDA to $3.5 million (H1 2015: $5.5 million). The decrease is attributable to a Board decision to cease investment in the browser extensions platform and outsource its monetisation to a third party. Excluding the web apps segment, revenue at $25.7 million remains broadly similar in comparison to $25.9 million in the first half of 2015. However, margins and segment results have significantly increased, at $7.6 million and 29.6% margin compared to $5.6 million and 21.6% in the first half of 2015.
Crossrider remains highly cash generative with cash generated from operations after adjusting for one-off non-recurring items at $4.1 million for the period (H1 2015: $5.0 million), which represents cash conversion of 119% (H1 2015: 90%). The Group balance sheet remains strong with cash balance of $70.2 million at 30 June 2016 (31 December 2015 $71.3 million) and no debt.
During the period, the Group went through major restructuring, resulting in changes to its management reporting system and now operates three reportable segments:
-- App Distribution - comprising the Group's
app distribution platform;
-- Media - comprising the Group's Marketing
technology platforms and ad network activities;
and
-- Web Apps and License - comprising revenue
generated from licensing the web apps monetisation
platform and associated technology
Consequently, the previous period segmental results have been restated. The results of these segments are set out below.
Segment Result
Revenue Segment result
Restated Restated
H1 2016 H1 2015 H1 2016 H1 2015
$'000 $'000 $'000 $'000
App distribution 18,211 19,055 5,877 4,103
Media 7,518 6,849 1,744 1,482
Web Apps and
License 3,007 14,895 3,007 7,363
--------- -------- --------- --------
Revenue 28,736 40,799 10,628 12,948
========= ======== ========= ========
The Segment Results have been calculated using revenue less costs directly attributable to that segment. Cost of sales comprises commissions paid to publishers and payment processing fees. Direct sales and marketing costs comprise traffic acquisition costs.
App distribution H1 2016 H1 2015
$'000 $'000
Revenue 18,211 19,055
Cost of sales (875) (811)
Direct sales and marketing
costs (11,459) (14,142)
-------- --------
Segment result 5,877 4,102
-------- --------
Segment margin % 32.3 21.5
Segment result (continued)
During the period, the App Distribution division had a significant improvement in margins reaching circa 32.3% compared to 21.5% in the comparable period, resulting in a $1.8 million increase in the segment result. This represents 43% uplift. The improvement in margin is mainly due to improvements in the app distribution processes, and specifically: a reduction in customer acquisition costs and growing customer value. Improvements in media buying efficiency resulting in better quality traffic as well as better user targeting which reduced acquisition costs. In addition, improvements in customer retention and up-sell activities increased customer value.
Media H1 2016 H1 2015
$'000 $'000
Revenue 7,518 6,849
Direct sales and marketing
costs (5,774) (5,366)
------- -------
Segment result 1,744 1,483
------- -------
Segment margin % 23.2 21.7
Revenues and segment results have increased by 10% and 18% respectively compared to H1 2015. This increase is attributable to expansion in new geographic markets and verticals, mainly mobile app distribution.
Web apps and license H1 2016 H1 2015
$'000 $'000
Revenue 3,007 14,895
Cost of sales - (3,550)
Direct sales and marketing
costs - (3,982)
------- -------
Segment result 3,007 7,363
------- -------
Segment margin % 100 49.4
As a result of a Board decision at the beginning of 2016, the company has outsourced the monetisation of its web apps platform to a third party. In light of this shift in business model, the Company has ceased its media acquisition in this segment. Revenue in the period is comprised of consideration for license of the platform and its associated technology. This Segment also includes proceeds from a software licence and services agreement between Crossrider and Playtech Software pursuant to the terms of which Crossrider has granted to Playtech Software a license to use certain software modules for Playtech Software's licensees' branded casino software. The agreement's initial term will expire on 18 September 2017.
Adjusted EBITDA
Adjusted EBITDA for the six months to 30 June 2016 was $3.5 million (H1 2015: $5.5 million). Adjusted EBITDA is a non-GAAP company specific measure which is considered to be a key performance indicator for the Group's financial performance. It excludes other operating income, share based payment charges and expenses which are considered to be one-off and non-recurring in nature and are excluded from the following analysis:
H1 2016 H1 2015
$'000 $'000
Revenue 28,736 40,799
Cost of sales (875) (4,361)
Direct sales and marketing
costs (17,233) (23,490)
-------- --------
Segment result 10,628 12,948
-------- --------
Indirect sales and
marketing costs (2,390) (1,720)
Research and development
costs (1,005) (1,208)
Management, general
and administrative
cost (3,763) (4,504)
-------- --------
Adjusted EBITDA 3,470 5,516
-------- --------
Operating loss
A reconciliation of Adjusted EBITDA to operating loss is provided as follows:
H1 2016 H1 2015
$'000 $'000
Adjusted EBITDA 3,470 5,516
Employee share-based
payment charge (111) (2,391)
Exceptional and non-recurring
costs (645) (690)
Depreciation and amortisation (3,646) (4,464)
------- -------
Operating loss (932) (2,029)
------- -------
Exceptional and non-recurring costs in H1 2016 comprised non-recurring staff restructuring costs of $0.3 million and $0.3 million one-time onerous contract written off in the period. The decrease in Employee share-based payment charge is due to a reversal of charges from previous periods for employees that left the company during the period.
Loss before tax
Loss before tax was $1.1 million (H1 2015: $2.1 million).
Loss after tax
Loss after tax was $1.2 million (H1 2015: $2.9 million). The tax charge derives mainly from Group subsidiaries residual profits. The Group continues to recognise a deferred tax asset of $0.5 m (H1 2015: $0.7m) in respect of tax losses accumulated in previous years.
Cash flow
H1 2016 H1 2015
$'000 $'000
Cash flow from operations 2,407 4,288
Exceptional and non-recurring
costs 1,734 690
Adjusted cash flow
from operations 4,141 4,978
------- -------
% of Adjusted EBITDA 119% 90%
======= =======
Cash flow from operations was strong at $2.4 million (H1 2015 $4.3 million). Adjusted cash flow from operations after adding back acquisition payments treated as remuneration and payments that are one off in nature, was $4.1 million and this represented an improvement in cash conversion to 119% of adjusted EBITDA from 90% in H1 2015.
Tax paid in the period was $0.8 million (H1 2015: $0.2 million).
Cash spent in the period on capital expenditure of $0.3 million (H1 2015 $1.3 million) comprises of capitalised development costs. Cash payments in respect of previous acquisitions totalled $1.4 million (H1 2015 $0.6 million).
The share buy-back programme, announced in November 2015, returned $1 million to shareholders in the first half of 2016 and $5.1 million in the year to 31 December 2015, returning a total of $6.1 million.
As a result, net cash outflow from investing and financing activities was $2.7 million (H1 2015 $1.8 million outflow).
Financial position
At 30 June 2016 the Group had cash of $70.2 million (31 December 2015: $71.3 million), net assets of $89.4 million (31 December 2015: $ 91.5million) and is debt free. At 30 June 2016 trade receivables were $6.3 million (31 December 2015: $13 million) which represented 44 days outstanding (31 December 2015: 52 days).
Moran Laufer
Acting Chief Financial Officer
20 September 2016
Consolidated statement of comprehensive income
For the six months ended 30 June 2016
Six months Six months
ended ended
30 June 30 June
2016 2015
(unaudited) (unaudited)
Note
$'000 $'000
Revenue 3 28,736 40,799
Cost of sales (875) (4,361)
------------ ------------
Gross profit 27,861 36,438
Selling and marketing
costs (19,965) (25,583)
Research and development
costs (859) (1,967)
Management, general and
administrative costs (4,323) (6,453)
Depreciation and amortisation (3,646) (4,464)
------------ ------------
Total operating costs 4 (28,793) (38,467)
Operating loss 4 (932) (2,029)
Adjusted EBITDA (*) 4 3,470 5,516
------------ ------------
Employee share-based
payment charge (111) (2,391)
Exceptional and non-recurring
costs 4 (645) (690)
Depreciation and amortisation (3,646) (4,464)
------------ ------------
Operating loss 4 (932) (2,029)
------------------------------- ----- ------------ ------------
Share of results of equity
accounted associates 12 -
Finance income - -
Finance costs (135) (117)
------------ ------------
Loss before taxation (1,055) (2,146)
Tax charge (203) (808)
------------ ------------
Loss for the period (1,258) (2,954)
Other comprehensive income:
Total comprehensive income
for the period - attributable
to owners of the parent (1,258) (2,954)
------------ ------------
Basic and diluted earnings
per share (cents) 6 (0.9) (2.0)
Adjusted EBITDA is a non GAAP measure. Adjusted EBITDA is a company specific measure which excludes employee share-based payment charges and other operating income and expenses which are considered to be one off and non-recurring in nature.
All results are derived from continuing operations.
Consolidated statement of financial position
As at 30 June 2016
30 June
2016
31 December
2015
(unaudited) (audited)
Note $'000 $'000
Non-current assets
Intangible assets 16,093 19,254
Property, plant and equipment 810 1,003
Investments in equity accounted
associates 823 812
Deferred tax asset 474 716
------------
18,200 21,785
------------ -----------
Current assets
Trade and other receivables 9,936 16,280
Cash and cash equivalents 70,175 71,336
------------
80,111 87,616
------------
Total assets 98,311 109,401
============ ===========
Equity
Share capital 5 14 14
Additional paid in capital 130,311 131,287
Retained earnings (40,929) (39,791)
------------
Equity attributable to equity
holders of the parent 89,396 91,510
------------ -----------
Non-current liabilities
Deferred tax liabilities 839 986
Deferred consideration for
the acquisition of subsidiary - 184
------------
839 1,170
------------ -----------
Current liabilities
Trade and other payables 7,881 15,316
Deferred consideration for
the acquisition of subsidiary 195 1,405
------------
8,076 16,721
------------ -----------
Total equity and liabilities 98,311 109,401
============ ===========
Consolidated statement of cash flows
For the six months ended 30 June 2016
Six months Six months
ended 30 ended 30
June 2016 June 2015
(unaudited) (Unaudited)
$'000 $'000
Cash flow from operating
activities
Loss for the period after
taxation (1,258) (2,954)
Adjustments for:
Amortisation of intangible
assets 3,454 4,314
Depreciation of property,
plant and equipment 192 150
Tax charge 203 808
Interest expenses 38 59
Share based payment charge 111 2,391
Unrealised foreign exchange
differences - 58
Share of results of equity
accounted associates (12)
Foreign exchange on the - -
translation of non-current
assets in foreign currencies
------------ ------------
Operating cash flow before
movement in working capital 2,728 4,826
Decrease in trade and other
receivables 6,419 2,087
Decrease in trade and other
payables (5,651) (2,625)
Decrease in other current
liabilities (1,089) -
------------ ------------
Cash flow from operations 2,407 4,288
Tax paid net of refunds (770) (180)
------------ ------------
Cash generated from operations 1,637 4,108
Cash flow from investing
activities
Purchases of property, plant
and equipment - (167)
Net cash paid on business
combination (1,089) (602)
Net cash paid on Investment
in associates (350) -
Capitalisation of development
costs (292) (1,001)
------------ ------------
Net cash used in investing
activities (1,731) (1,770)
Cash flow from financing
activities
Net payment for purchase
of own shares (974) -
------------ ------------
Net cash used in financing
activities (974) -
------------ ------------
Net (decrease)/increase
in cash and cash equivalents (1,068) 2,338
Revaluation of cash due
to changes in foreign exchange
rates (93) (49)
Cash and cash equivalents
at beginning of year 71,336 76,041
------------ ------------
Cash and cash equivalents
at end of year 70,175 78,330
============ ============
Notes
1. General information
The financial information set out in this document is for Crossrider plc (the "Company") and its subsidiary undertakings (together the "Group") in respect of the six months ended 30 June 2016.
Crossrider is an internet and media company using marketing technology platforms to prospect, optimize and monetize mobile and web media to its best in class products. Using proprietary technology solutions the Company powers all aspects of an online product and ensures an optimal delivery of superb user experience.
The Company specialises in an all-inclusive solution for finding, retaining and re-engaging users- making their activity significantly more relevant, efficient and valuable. Crossrider provides this solution to customers, partners as well as for its own product portfolio.
2. Basis of preparation
These interim consolidated financial statements have been prepared using accounting policies based on International Financial Reporting Standards (IFRS and IFRIC Interpretations) issued by the International Accounting Standards Board ("IASB") as adopted for use in the EU. They do not include all disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with the 31st December 2015 Annual Report. The financial information for the half years ended 30th June 2016 and 30th June 2015 does not constitute statutory accounts and both periods are unaudited.
The annual financial statements of Crossrider plc are prepared in accordance with IFRS as adopted by the European Union. The comparative financial information for the year ended 31st December 2015 included within this report does not constitute the full statutory Annual Report for that period. The statutory Annual Report and Financial Statements for 2015 have been filed with the Registrar of Companies. The independent Auditors' Report on that Annual Report and Financial Statement for the year ended 31st December 2015 was unqualified, did not draw attention to any matters by way of emphasis.
After making enquiries, the directors have concluded that the Group has adequate resources to continue operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the half-yearly consolidated unaudited financial statements.
Except for the restatement of segmental information in line with a change in the management reporting system as set out in note 3 the same accounting policies, presentation and methods of computation are followed in these interim consolidated financial statements as were applied in the Group's 2015 annual audited financial statements. In addition, the IASB have issued a number of IFRS and IFRIC amendments or interpretations since the last Annual Report was published. It is not expected that any of these will have a material impact on the Group. The Board of Directors approved this interim report on 20(th) September 2016.
3. Segmental information
Segment revenues and results
During the period the Group changed its management reporting system and now operates three reportable segments:
-- App Distribution - comprising the Group's app distribution platform;
-- Media - comprising the Group's ad network activities and associated technology platforms; and
-- Web Apps and License - comprising revenue generated from monetising web apps and licencing the associated technology
Consequently, the prior year segmental results have been restated.
Six months ended 30 App
June 2016 Distribution Media Web Apps Total
and License
$'000 $'000 $'000 $'000
Revenue 18,211 7,518 3,007 28,736
Cost of sales (875) - - (875)
Direct sales and marketing
costs (11,459) (5,774) - (17,233)
-------------- -------- -------------- ---------
Segment result 5,877 1,744 3,007 10,628
Central operating
costs (7,158)
Adjusted EBITDA(1) 3,470
Depreciation and amortisation (3,646)
Employee share-based
payment charge (111)
Exceptional and non-recurring
costs (645)
---------
Operating loss (932)
Share of results of
associates 12
Finance costs (135)
---------
Loss before tax (1,055)
Taxation (203)
---------
Loss after taxation (1,258)
---------
Six months ended 30 App
June 2015 Distribution Media Web Apps Total
and License
$'000 $'000 $'000 $'000
Revenue 19,055 6,849 14,895 40,799
Cost of sales (811) - (3,550) (4,361)
Direct sales and marketing
costs (14,142) (5,366) (3,982) (23,490)
-------------- -------- -------------- ---------
Segment result 4,102 1,483 7,363 12,948
Central operating
costs (7,432)
---------
Adjusted EBITDA(1) 5,516
Depreciation and amortisation (4,464)
Employee share-based
payment charge (2,391)
Exceptional and non-recurring
costs (690)
---------
Operating loss (2,029)
Finance costs (117)
---------
Loss before tax (2,146)
Taxation (808)
---------
Loss after taxation (2,954)
---------
4. Operating loss
Adjusted EBITDA
Adjusted EBITDA is calculated as follows:
Six months Six months
ended 30 ended 30
June 2016 June 2015
$'000 $'000
Operating loss (932) (2,029)
Depreciation and amortisation 3,646 4,464
Employee share-based
payment charge 111 2,391
Exceptional and non-recurring
costs:
Non-recurring staff
and restructuring costs 645 82
Expensed contingent
consideration - 608
---------- ----------
Adjusted EBITDA 3,470 5,516
========== ==========
Operating costs
Operating costs are further analysed as follows:
Six months Six months Six months
Six months ended ended ended 30
ended 30 30 June 30 June June 2015
June 2016 2016 2015 Total
Adjusted Total Adjusted $'000
$'000 $'000 $'000
Direct sales and marketing
costs 17,233 17,233 23,490 23,490
Indirect sales and
marketing costs 2,390 2,732 1,720 2,093
---------- ---------- ---------- ----------
Selling and marketing
costs 19,623 19,965 25,210 25,583
------------------------------ ---------- ---------- ---------- ----------
Research and development
costs 1,005 859 1,208 1,967
Management, general
and administrative
cost 3,763 4,323 4,504 6,453
Depreciation and amortisation 392 3,646 303 4,464
---------- ---------- ---------- ----------
Total operating costs 24,783 28,793 31,225 38,467
========== ========== ========== ==========
Adjusted operating costs exclude share based payment charges, exceptional and non-recurring costs and amortisation of acquired intangible assets.
5. Shareholder's equity
Ordinary share capital as at 30 June 2016 amounted to $14,000 (30 June 2015: $15,000; 31 December 2015: $14,000).
The number of shares in issue as at 30 June 2016 was 148,496,073 (30 June 2015: 148,463,039; 31 December 2015: 148,496,073).
During the six months ended 30 June 2016 a total of 1,250,000 of ordinary shares of $0.0001 per value were purchased by the Company for the total cash consideration of $974,503 and are held in treasury at the reporting date (H1 2015: nil, 2015: $5,130,920)
6. Earnings per share
Basic loss/earnings per share is calculated by dividing the loss/earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.
Six months Six months
ended ended
30 June 30 June
2016 2015
Cent Cent
Basic and diluted (0.9) (2.0)
Adjusted basic 1.8 2.6
Adjusted diluted 1.8 2.5
Adjusted earnings per share is a non-GAAP measure and therefore the approach may differ between companies. Adjusted earnings have been calculated as follows:
Six months Six months
ended ended
30 June 30 June
2016 2015
$'000 $'000
Loss for the period (1,258) (2,954)
Post tax adjustments:
Employee share-based
payment charge 111 2,327
Exceptional and non-recurring
costs 641 675
Amortisation on acquired
intangible assets 3,106 3,794
Adjusted profit for
the year 2,600 3,842
========== ==========
Number Number
Denominator - basic:
Weighted average number
of equity shares for
the purpose of earnings
per share 141,044,650 148,463,039
Denominator - diluted
Weighted average number
of equity shares for
the purpose of diluted
earnings per share 141,313,719 152,780,605
The diluted denominator has not been used where this has anti-dilutive effect. Basic and diluted loss per share are therefore the same for reporting purposes.
The difference between weighted average number of Ordinary shares used for basic earnings per share and the diluted earnings per share is 269,069 (H1 2015: 4,317,566) being the effect of all potentially dilutive Ordinary shares derived from the number of share options granted to employees.7.
7. Related party transactions
The Group is controlled by Unikmind Holdings Limited incorporated in British Virgin Islands, which owns 73% of the Company's shares. The controlling party is the Solidinsight Trust, established under the laws of the Isle of Man. Mr. Teddy Sagi is the sole ultimate beneficiary of the Solidinsight Trust.
During the period the following transactions were carried out with related parties:
Six months Six months
ended ended
30 June 30 June
2016 2015
$'000 $'000
Revenue from common controlled
company 2,094 1,946
Other operating income earned
on recharged costs 10
Technical support services to
end customers provided by common
controlled company (1,077) (416)
Payment processing services provided
by common controlled company (194) (497)
823 1,043
========== ==========
8. Cautionary statement
This document contains certain forward-looking statements relating to Crossrider plc ('the Group'). The Group considers any statements that are not historical facts as "forward-looking statements". They relate to events and trends that are subject to risk and uncertainty that may cause actual results and the financial performance of the Group to differ materially from those contained in any forward-looking statement. These statements are made by the directors in good faith based on information available to them and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LLMPTMBJBBMF
(END) Dow Jones Newswires
September 20, 2016 02:00 ET (06:00 GMT)
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