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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Outsourcery | LSE:OUT | London | Ordinary Share | GB00B9G9LV10 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 4.125 | 0.00 | 00:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Jan 2020 to Jan 2025
TIDMOUT
RNS Number : 4711A
Outsourcery PLC
29 September 2015
29 September 2015
Outsourcery plc
("Outsourcery" or the "Group")
Interim Results for the six months ended 30 June 2015
Outsourcery plc (AIM: OUT), a leading Cloud Service Provider ("CSP") focused on the provision of unified communications solutions, based on Microsoft Skype for Business, and Infrastructure-as-a-Service for commercial and public sector organisations, announces its interim results for the six months ended 30 June 2015.
Financial Metrics
Hot Features
Premium
30 June 30 June
2015 2014
--------------------------------- ---------- ----------
Group Revenue GBP4.1m GBP3.4m
- Monthly recurring revenue GBP0.7m GBP0.6m
--------------------------------- ---------- ----------
Adjusted EBITDA * GBP(2.1m) GBP(2.8m)
Adjusted (loss) from operations
** GBP(2.9m) GBP(3.6m)
Adjusted (loss) per share
*** (7.05)p (10.33)p
Gross Cash GBP0.3m GBP1.3m
*Adjusted EBITDA is defined as earnings before finance costs, tax, depreciation and amortisation, restructuring costs, employee share based payment costs and listing fees and is considered by the Directors to be a key measure of financial performance.
**Adjusted (loss) from continuing operations is defined as earnings before restructuring costs, employee share based payment costs and listing fees.
***Adjusted (loss) per share has been disclosed to give a clear understanding of the Group's underlying trading performance. It has been calculated using the underlying earnings figures above and the weighted average number of ordinary shares in issue.
Operational Highlights
-- Business focus centred on clear, accessible growth opportunities
Ø Outsourcery continues to secure a strong market position as a fully converged provider of cloud solutions with high profile partners and reference end-customers
Ø Recurring revenue is increasing, and the Company is delivering against a large addressable market.
Ø Gross margin has increased steadily, now at 49% (1H 2014: 43%)
Ø Stepped up development of direct sales and marketing capability, taking greater control of pipeline and potential
Ø Focus on selected partners that have demonstrated a commitment to the sale of cloud services
-- Refreshed and focused product strategy
Ø Established position as UK's leading provider of cloud-based Skype for Business (formerly branded as 'Lync') for mid-market, enterprise and public sector end-customers
Ø Defined infrastructure-as-a-Service ("IaaS") offering for commercial and public sectors including increasing automation
Ø Public sector Skype for Business and IaaS pipeline is developing with early wins secured
-- Reviewed and clearly defined go-to-market strategy
Ø Focus on mid-market and enterprise end-customers requiring more complex enterprise and carrier-grade hybrid solutions not available from hyperscale IaaS and SaaS service providers
Ø Extending the network of partners committed to cloud transition with a pipeline of large partners
Ø Commenced development of a direct sales pipeline in commercial and public sectors
Ø Proven ability to add value, win and deploy solutions for mid-market and large enterprise
-- Cost base controlled
Ø Administrative expenses of GBP4.7 million were in line with budget
-- Steady progress on strategic partner pipeline development as demand rises for Skype for Business
Ø Vodafone pipeline growing and strategic alignment enhanced by Vodafone's financial support for Outsourcery (see Financial Review)
Ø Virgin Media Business pipeline in mid-market and public sector taking shape
Ken Olisa OBE, Non-Executive Chairman commented:
"It is pleasing to see revenue growing and losses narrowing. This has been achieved by a renewed focus of our go to market activities and a programme of cost reductions.
Our principal route to market - the third party channel - has continued to increase its effectiveness, albeit at a slower than ideal rate. As a result we have initiated some targeted direct sales activities which are showing early signs of bearing fruit. This ability to pivot our activities as circumstances demand is a testament to the entrepreneurial leadership of our Co-CEOS who, with the support of the Board, are committed to tackling the challenges of being a small and growing business one at a time."
Enquiries
Outsourcery +44 (0)330 313 0077 Piers Linney, Co-CEO Simon Newton, Co-CEO Investec +44 (0)20 7597 5100 Andrew Pinder / Patrick Robb Dominic Emery / Carlton Nelson FTI Consulting, LLP Matt Dixon / Dwight Burden / Rob Mindell +44 (0)20 3727 1000
About Outsourcery
Outsourcery is a leading Cloud Service Provider ("CSP") based in the UK focused on the delivery of cloud-based applications, infrastructure and unified communications solutions to business of all sizes via its partner and as direct customers in the mid-market. The Group focuses on Microsoft technologies due to the significant installed base and disruptive entry into new markets such as unified communications. Cloud computing represents a systemic evolution in the way that IT platforms, applications and communications ("ICT") solutions are provided in a more cost effective and efficient way. The ICT model is rapidly shifting from a physical technology purchase to the consumption of services with a specified uptime service level on a monthly subscription basis. Outsourcery has invested in its platform and capabilities to apply economies of scale to provide highly resilient and secure services to a range of end-customers from shared platforms in its UK datacentres.
Further, detailed information on the Group is available in the Investor Centre on the Outsourcery website:
(www.outsourcery.co.uk/investors)
Strategy Update
A sharper focus
Outsourcery continues to establish a market-leading position for the provision of cloud services based on Microsoft technologies for mid-market, enterprise and public sector end-customers seeking added value and hybrid solutions that large public cloud providers are unable to deliver.
Sharpening the Company's focus on Skype for Business and IaaS, and prioritising the market segments in which Outsourcery has a clear competitive advantage, has enabled the Company to maintain a stable cost base. Administrative expenses were under budget in the period, while sales and marketing expenses were directed towards the pipeline opportunities with greatest likelihood to convert.
Skype for Business
Skype for Business is Microsoft's next generation and enterprise-grade unified communications and collaboration service. Skype for Business is the latest version of the product formerly branded as 'Lync'. Skype for Business from Outsourcery combines instant messaging, presence and conferencing, collaboration with full enterprise voice and carrier-grade SLAs to replace PBX telephony, in one interface. It also allows users to communicate with the 300 million users of the consumer Skype product.
During the first half of the year, Outsourcery has focused its service offering on its core strengths of 'Skype for Business' with full enterprise and carrier-grade voice and Infrastructure-as-a-Service, which are also the largest market opportunities, to maximise growth potential. The Group continues to improve the automation of its IaaS offering to provide customers and partners with self-serve capabilities. Furthermore, the launch of the next version of Microsoft Lync Server, which has been rebranded as Skype for Business, has been an important development, which is driving demand for Microsoft unified communications and collaboration software. Outsourcery is establishing a market-leading position in the provision of cloud-based Skype for Business in terms of capability and referenceability and already counts two FTSE-100 companies as end-customers as well as a growing number of large enterprises and public sector organisations as direct customers.
Go-to-market strategy
The Company has also reshaped its go-to-market strategy during the period to reflect the current capability of the existing IT and communications channels by focusing resources on its large strategic partners and committed partners of all sizes. At the same time during the period, the Company had built out a direct sales organisation and commenced the development of a direct sales pipeline.
Outlook
Despite a slower than anticipated revenue build, the Group is well-positioned to benefit from the growing demand for cloud services and especially from mid-market, enterprise and public sector organisations that require services and support that the large public cloud providers are unable to provide. The Group is also creating a clear leadership position in the rapidly evolving market for the delivery of Skype for Business.
The first half of 2015 has been an important period for the Company to assess the opportunity and focus products and go-to-market strategies. The second half of the year will include further implementation of the changes made and the continued development of a direct sales pipeline. These measures should drive further growth in 2016 and beyond.
On 3 July, following the period end, Outsourcery entered into a debt facility with a key strategic partner, Vodafone. That facility has both given additional assurances to our pipeline customers, and underscored the Company's confidence in the second half. In addition, other partners are now experiencing growing demand and new partners that are committed to transitioning their businesses to the cloud are being on-boarded.
(MORE TO FOLLOW) Dow Jones Newswires
September 29, 2015 02:02 ET (06:02 GMT)
As such, the Board expects a run-rate to evolve during the second half to provide a steady baseline of growth alongside the closure of direct opportunities, including public sector end-customers.
Financial Review
In the first half of the year, the Group recorded revenue of GBP4.1 million (1H 2014: GBP3.4 million) and a gross margin of 49% (1H 2014: 43%).
Administrative expenses (excluding restructuring costs, employee share based payment costs and listing fees) of GBP4.7 million (1H 2014: GBP4.8 million) were in line with budget. Adjusted EBITDA showed a loss of GBP2.1 million (1H 2014: loss of GBP2.8 million).
The Group's underlying pre-tax loss was GBP3.3 million (1H 2014: loss of GBP3.8 million) and loss per share for the half year was 7.05p (1H 2014: loss of 10.33p).
Gross cash as at 30 June 2015 was GBP0.3 million (1H 2014: GBP1.3 million).
On 3 July the Group announced it had entered into an amortising term loan with Vodafone Group Services Limited ("Vodafone"). Under this agreement, Outsourcery was provided with a GBP4.0 million term loan for the 48 months ending June 2019. Interest will be charged monthly at an interest rate of 7.5% per annum and principal loan repayments will be spread equally over the 12 quarterly periods from year 2 onwards. As part of the facility, Vodafone have been granted a warrant over 3,000,000 new ordinary shares at 30p per share (a 25% premium to the previous day's closing price) exercisable between 42 and 54 months after drawdown of the facility and in certain other exceptional circumstances. The new term loan replaces Outsourcery's existing GBP1.4 million loan facility due to expire on 1 April 2017, and a GBP0.3 million mortgage facility provided by Barclays Bank. The remaining GBP2.3 million of the new facility can be used for general working capital purposes.
Additionally, Outsourcery has also agreed amended terms with Etive Capital Limited on its outstanding GBP1 million loan, extending the repayment from 22 May 2016 to 31 December 2017. The GBP1 million note (currently non-interest bearing) will attract interest after 22 May 2016 at 10% per annum payable quarterly in arrears.
As a result of these new debt facilities, Outsourcery will benefit from:
-- a reduced weighted average cost of capital; -- additional working capital to support the Group's requirements; and -- further alignment with a major strategic partner, Vodafone.
Consolidated income statement
For the six months ended 30 June 2015
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
Notes 2015 2014 2014
GBP'000 GBP'000 GBP'000
Revenue 4,122 3,447 7,384
Cost of sales (2,092) (1,975) (4,049)
---------- ---------- ------------
Gross profit 2,030 1,472 3,335
---------- ---------- ------------
Administrative expenses (5,100) (5,056) (10,363)
---------- ---------- ------------
Operating loss (3,070) (3,584) (7,028)
EBITDA* (2,057) (2,781) (4,569)
Amortisation and depreciation (610) (560) (1,178)
Exceptional restructuring
costs (18) (168) (293)
Fees associated with listing - (3) -
Employee Share based payment (385) (72) (988)
---------- ---------- ------------
Operating loss (3,070) (3,584) (7,028)
---------------------------------------- ---------- ---------- ------------
Interest received 1 4 5
Finance costs (266) (235) (589)
---------- ---------- ------------
Loss before tax (3,335) (3,815) (7,612)
Taxation - - -
Loss for period and total
comprehensive income (all
attributable to equity
holders of the parent) (3,335) (3,815) (7,612)
========== ========== ============
Underlying loss per share 5 Pence Pence Pence
Basic loss per share (7.05) (10.33) (19.72)
*EBITDA is defined as earnings before finance costs, tax, depreciation and amortisation, reorganisation costs, employee share based payment costs and fees associated with listing and is considered by the Directors to be a key measure of financial performance
Consolidated statement of comprehensive income
For the six months ended 30 June 2015
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
Notes 2015 2014 2014
GBP'000 GBP'000 GBP'000
Loss and other comprehensive
income for the period (3,335) (3,815) (7,612)
Comprehensive loss attributable
to:
Equity holder of the parent (3,335) (3,815) (7,612)
========== ========== ============
Consolidated statement of changes in equity
For the six months ended 30 June 2015
Merger
Share Share Retained Accounting Total
Capital Premium Losses Reserve Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 January
2014 346 17,673 (21,759) 7,745 4,005
Employee share-based
payment options - - 72 - 72
-------- -------- --------- ----------- --------
Transactions with owners - - 72 - 72
Loss for the period - - (3,815) - (3,815)
Balance at 30 June 2014 346 17,673 (25,503) 7,745 261
======== ======== ========= =========== ========
Issue of share capital 127 2,410 - - 2,537
Share issue expenses - (63) - - (63)
Employee share-based
payment options - - 916 - 916
Transactions with owners 127 2,347 916 - 3,390
Loss for the period - - (3,797) - (3,797)
Balance at 31 December
2014 473 20,020 (28,383) 7,745 (146)
==== ======= ========= ====== ========
Employee share-based
payment options - - 385 - 385
---- ------- --------- ------ --------
Transactions with owners - - 385 - 385
Loss for the period - - (3,335) - (3,335)
Balance at 30 June 2015 473 20,020 (31,332) 7,745 (3,095)
==== ======= ========= ====== ========
Consolidated statement of financial position
As at 30 June 2015
Unaudited Unaudited Audited
As at As at As at
30 June 30 June 31 December
Notes 2015 2014 2014
GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment 3,093 2,848 3,453
Intangible assets 838 - 855
---------- ---------- ------------
Total non-current assets 3,931 2,848 4,339
---------- ---------- ------------
Current assets
Trade and other receivables 2,288 2,680 2,278
Cash and cash equivalents 291 1,323 2,526
---------- ---------- ------------
Total current assets 2,580 4,003 4,804
---------- ---------- ------------
Total assets 6,511 6,851 9,143
========== ========== ============
Equity and liabilities
Share capital 4 473 346 473
Share premium 20,020 17,673 20,020
Merger accounting reserve 7,745 7,745 7,745
(MORE TO FOLLOW) Dow Jones Newswires
September 29, 2015 02:02 ET (06:02 GMT)
Retained losses (31,332) (25,503) (28,383)
---------- ---------- ------------
Equity attributable to
owners of the parent and
total equity (3,094) 261 (146)
========== ========== ============
Liabilities
Non-current liabilities
Borrowings 6 2,733 2,797 3,556
---------- ---------- ------------
Total non-current liabilities 2,733 2,797 3,556
---------- ---------- ------------
Current liabilities
Trade and other payables 4,921 1,934 4,100
Borrowings 6 1,951 1,859 1,633
---------- ---------- ------------
Total current liabilities 6,873 3,793 5,733
---------- ---------- ------------
Total liabilities 9,605 6,590 9,289
========== ========== ============
Total equity and liabilities 6,511 6,851 9,143
========== ========== ============
Consolidated statement of cash flows
For the six months ended 30 June 2015
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2015 2014 2014
GBP'000 GBP'000 GBP'000
Operating activities
Loss for the period (3,335) (3,815) (7,612)
Finance costs 265 165 587
Listing fees - 3 -
Depreciation and amortisation 609 560 1,178
Employee share based payment
costs 385 72 988
Net changes in working
capital 810 (906) 1,618
---------- ---------- ------------
Net cash used in operating
activities (1,266) (3,921) (3,240)
---------- ---------- ------------
Investing activities
Purchase of property, plant
and equipment (202) (42) (289)
Purchase of intangible
assets - - (468)
Net cash flow from investing
activities (202) (42) (757)
---------- ---------- ------------
Financing activities
Finance lease capital repayments (382) (389) (697)
Proceeds from issue of
share capital - - 2,474
Proceeds from other borrowings (19) (19) -
Repayments of other borrowings (168) (469) (1,177)
Listing fees - (3) -
Interest and finance lease
charges paid (198) (165) (408)
---------- ---------- ------------
Net cash flow from financing
activities (767) (1,045) 192
---------- ---------- ------------
Net (decrease)/increase
in cash and cash equivalents
in the period (2,235) (5,008) (3,805)
Cash and cash equivalents
at start of period 2,526 6,331 6,331
---------- ---------- ------------
Cash and cash equivalents
at end of period 291 1,323 2,526
========== ========== ============
Notes to the interim report
1. General information
Outsourcery plc (AIM: OUT; "Outsourcery"; the "Company"; together with its subsidiary undertakings, the "Group"), is a leading provider of cloud-based IT and unified communications services. Outsourcery plc is the Group's ultimate parent company. The Company is incorporated in England and Wales and domiciled within the United Kingdom. The address of the Company's registered office is 10 Whitfield Street, London W1T 2RE. The address of the Group's head office is 1 The Avenue, Spinningfields, Manchester M3 3AP. The Company's shares are listed on the Alternative Investment Market of the London Stock Exchange.
Outsoucery's consolidated financial statements are presented in Pounds Sterling (GBP), which is also the functional currency of the parent company.
These consolidated interim financial statements were approved for issue by the Board of Directors on 24 September 2015.
2. Basis of preparation
The Group's interim consolidated unaudited financial statements are for the six months ended 30 June 2015 and have been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards ("IFRS"). They have not been prepared in accordance with IA34 'Interim Financial Reporting'. These statements have not been reviewed or audited by the Group's auditors.
The figures for 31 December 2014 are an abridged version of the Group's full financial statements (subject to first time adoption of International Financial Reporting Standards) and together with other financial information contained in this interim report which is unaudited, do not constitute statutory financial statements of the Group as defined in Section 434 of the Companies Act 2006. Statutory financial statements for the year ended 31 December 2014 have been filed with the Registrar of Companies for England and Wales and have been reported on by the Group's auditors. The report of the auditors was unqualified and did not contain a statement under section 498 (2) or Section 498 (3) of the Companies Act 2006.
These interim consolidated unaudited financial statements have been prepared in accordance with the accounting policies set out in the Group's full audited financial statements for the year ended 31 December 2014. The accounting policies have been applied consistently throughout the Group.
Going concern
The Directors believe that the Group is well placed to manage its business risks successfully. The Directors have also prepared cash flow forecasts for the period until December 2016. As part of the preparation of these forecasts, the Directors have estimated the likely conversion of potential future business. Based on these forecasts, the Directors have confirmed that there are sufficient cash reserves to fund the business for the period under review. After reviewing these forecasts, consideration of the Group's cash resources and other appropriate enquiries, the Directors have a reasonable expectation that the Company and Group have adequate resources to continue in operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the interim statements.
3. Business segments
The Group's Executive Board is considered to be the Chief Operating Decision Maker ("CODM").
For management purposes, the Group's Executive Board focuses on the following operating segments and financial information provided to CODM is under the same measurement basis as the Group financial statements.
Cloud
This operating segment is managed separately by the Group's CODM and operating decisions are made on the basis of the operating results.
Revenue for each of the periods shown is all derived in the United Kingdom. Any administrative staff expense costs incurred in the consulting and mobile operations would be negligible. All consultancy staff related costs are included in the segment cost of sales charges for the six months ended 30 June 2015, six months ended 30 June 2014 and twelve months ended 31 December 2014.
Operating segment information for each of the periods above is as follows:
6 months ended 30 June 2015
Cloud Total
GBP'000 GBP'000
Revenue
From external customers 4,122 4,122
-------- --------
Segment revenue 4,122 4,122
-------- --------
Cost of sales
From external customers (2,092) (2,092)
-------- --------
Segment cost of sales (2,092) (2,092)
-------- --------
Gross profit
From external customers 2,030 2,030
-------- --------
Segment profit 2,030 2,030
-------- --------
Administrative expenses
Staff (3,002) (3,002)
Depreciation and amortisation (609) (609)
Other (1,489) (1,489)
-------- --------
Segment administrative
expenses (5,100) (5,100)
EBITDA (2,057) (2,057)
--------------------------------- -------- --------
Operating loss (3,070) (3,070)
-------- --------
Net interest (265) (265)
(MORE TO FOLLOW) Dow Jones Newswires
September 29, 2015 02:02 ET (06:02 GMT)
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