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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 : 7803I
Outsourcery PLC
30 March 2015
30 March 2015
Outsourcery plc
("Outsourcery" or the "Company")
Preliminary Results for the Year Ended 31 December 2014
- Recurring revenue up 73% to GBP7.1m -
- Annualised recurring revenue of GBP8.4m at current exit run rate -
- 42% year-on-year revenue growth -
Outsourcery (AIM: OUT), a leading Cloud Service Provider ("CSP") offering Cloud-based IT and unified communications solutions for the commercial and public sectors, reports preliminary results for the financial year ended 31 December 2014.
The results demonstrate a year of strong growth for Outsourcery, with recurring revenues increasing 73% as demand rises and our service offering and capability develops. The 36% improvement in adjusted EBITDA was driven by the increase in revenue and a reduction in operating costs of GBP1.0 million following an organisational restructure. This trajectory clearly highlights the inherent operational gearing of the business and underpins the Board's confidence in the growth prospects for the Company and its path to profitability.
Financial Metrics
Hot Features
Premium
31 December 31 December
2014 2013
-------------------------------- ------------- ------------
Group Revenue GBP7.4m GBP5.2m
- recurring revenue GBP7.1m GBP4.1m
- non-recurring revenue GBP0.3m GBP1.1m
-------------------------------- ------------- ------------
Exit rate Monthly Recurring
Revenue ("MRR") GBP0.7m GBP0.6m
Annualised exit rate Recurring
Revenue ("ARR") GBP8.4m GBP7.0m
Adjusted EBITDA * (GBP4.6m) (GBP7.2m)
Adjusted (loss) from continuing
operations ** (GBP6.3m) (GBP8.8m)
Adjusted (loss) per share (34.1
*** (16.4 pence) pence)
Gross Cash GBP2.5m GBP6.3m
Notes
* Adjusted EBITDA is calculated as reported loss from continuing operations, before fees associated with listing, exceptional restructuring costs, the employee share based payment charge, finance costs, taxation, depreciation and amortisation and is considered by the Directors to be a key measure of financial performance.
** Adjusted (loss) from continuing operations is calculated as reported loss from continuing operations, before fees associated with listing, exceptional restructuring costs and the employee share based payment charge and is considered by the Directors to be a key measure of financial performance.
*** Adjusted (loss) per share is calculated using the adjusted loss from continuing operations above and the weighted average number of ordinary shares in issue in each of the relevant periods. This has been disclosed to give a clear understanding of the Group's underlying trading performance
Operational Highlights
-- New orders won for over 60,000 end-users within three FTSE 100 companies and NHS -- First G Cloud procurement framework deal won with NHS (post period-end)
-- Significant public sector opportunity unlocked following Pan Government Accreditation (PGA) of O-Cloud platform and new Assured O-Cloud platform (formerly IL3)
-- Strategic partners now generating significant sales pipeline
-- Go to market strategy rebalanced to reflect development of partner and direct sales channels
-- Microsoft relationship extended to include the Microsoft Cloud Solution Provider Programme to provide Office 365 direct billing and support
-- Refinanced and restructured in response to operational and market dynamics
Commenting on the results Piers Linney, Co-Chief Executive of Outsourcery commented:
"Recurring revenues, which represent 96% of total revenues, increased by 73%. This demonstrates a year of strong growth for Outsourcery.
Outsourcery's approach to converged IT and communications is both unique and compelling - for example, we are now the only UK provider of PGA Official accredited Cloud-based Microsoft Lync unified communication and collaboration services. Outsourcery continues to gain widespread recognition in the industry as we and our partners have demonstrated that we can win high profile customers in competitive processes.
Our commercial and public sector sales pipelines are growing. In the year ahead we will focus on ensuring that we maintain our competitive advantage as well as embracing exciting new opportunities such as the launch of our carrier-grade Skype for Business service.
Following a tough year during which we restructured our cost base, operations and go to market strategy, we have started the new year in a strong competitive position.
The Board remains confident that the business has a clear path to profitability."
For further information please contact:
Outsourcery plc +44 (0) 330 313 0077
Piers Linney, Co-Chief Executive Officer
Simon Newton, Co-Chief Executive Officer
www.outsourcery.co.uk/investors
Investec +44 (0) 20 7597 5100
Andrew Pinder / Patrick Robb
Dominic Emery / Carlton Nelson
FTI Consulting, LLP +44 (0) 20 3727 1137
Matt Dixon / Rob Mindell
About Outsourcery
Outsourcery is a world-leading UK-based Cloud Services Provider ("CSP"), which aims to remove the need for organisations to own and manage on-premises IT, unified communications and conferencing applications and infrastructure.
Outsourcery offers hosted software applications (software-as-a-service), cloud infrastructure (infrastructure-as-a-service) and next generation unified communications and collaboration solutions, as well as connectivity and professional services to tailor and fully integrate solutions to meet the needs of customers, partners and the UK public sector alike.
Outsourcery's O-Cloud platform has been certified to run government classified information at 'Official' and 'Official sensitive' over the internet. This gives Outsourcery CESG Pan Government Accreditation ("PGA") (formerly IL2) to meet data sovereignty and security specifications for the public sector.
Outsourcery was the first company outside of the US to be named Microsoft's worldwide 'Hosting Solutions Partner of the Year' and also the UK's first certified carbon neutral CSP. The business was named HP's Most Innovative Service Award 2013 and the UK Cloud Awards' Collaboration Product of the Year 2014.
Outsourcery has 110 employees, with offices in Manchester, London and Leicester.
(www.outsourcery.co.uk/investors)
Chairman's Statement
When I penned my Chairman's Statement this time last year, I shared my thoughts around where we were as a Company - and where I thought we might head. Those were early days for Outsourcery and I stated as much. I felt we had a significant opportunity ahead of us, that we were one step ahead of others in the market, but that we had much to prove and to learn.
As I sit down to write the same statement this year, 'proving and learning' feels a very apt way to sum up the past twelve months. I am more convinced the opportunity ahead is a compelling one. The team has chalked up a number of impressive achievements, from partnership building, to brand building and early sales execution. Each of these achievements supports my belief and my optimism. On behalf of the Board I wish to thank every member of the Outsourcery team for the energy and commitment shown to bringing them about.
Some very important foundations for the future were laid down in 2014. The most important thing we have proven is our ability to win, particularly at the highest level of UK plc. Twelve months ago, we could claim one FTSE 100 firm among our customer base. Today, we can proudly say that it won't be long until nearly 60,000 individual end-users within three FTSE 100 firms will be reliant on Outsourcery's services. This is a tremendous achievement for a young firm like ours. It proves beyond question the increasing appeal of the Cloud, the relevance of our offer and the value of the partnerships we have forged. This year has seen us prove ourselves in other areas too - be that proving our ability to deliver on complex technology products with our O-Cloud Pan Government Accreditation, or our ability to partner with the world's largest firms as evidenced by our acceptance onto Microsoft's flagship Cloud Service Provider and Cloud OS Network programmes.
Proof points are one thing. Learnings are equally important. This year we learned a great deal about how best to support our partners as they themselves learn how to 'sell' the Cloud. We have also learned that, in part, our own goals for the year were too ambitious in a young market. That does not make them the wrong goals, but we have required additional funding in order to reach them. This, with the support of new and existing shareholders, we have done.
I would like to thank our shareholders for their commitment. Like me, they can see Outsourcery's potential for material value creation. It is my experience that the quantum shift to the Cloud is the sort of transformation that comes only once a decade in the IT world - but the impact of this change will be felt for many years to come. It is telling that this game changer isn't being led by large, established businesses alone. Ambitious growth companies like ours are also playing a key role. Yet, as a Director of companies of both persuasion, it seems that the bar is increasingly set far higher for the 'David' than the 'Goliath' when it comes to measuring progress.
Viewing a growth company through the same lens as an established firm is a mistake all too often made. I do not advocate a 'free ride' for Britain's smaller public companies. Uncritical forgiveness, lower standards and diminished aspirations are not helpful to investor or entrepreneur. But we do need to think differently about how we measure the progress of firms just starting out on their growth journeys. As investors with personal experience as entrepreneurs can attest, young companies, particularly in the technology space, often find it hard to accurately forecast their growth paths. This does not make them poor prospects. Rather, it requires a different approach to measuring and assessing their progress. It means thinking about qualitative ways of analysing a company's progress and valuing those alongside - even sometimes above - quantitative ones. In addition it means acknowledging a company's effectiveness in tackling anticipated and unanticipated risks and impediments along its growth journey rather than considering the absence of a smooth trajectory as a heinous example of failure.
At Outsourcery, we are now looking ahead to the next twelve months. In my mind, the task before us is clear. First, we need to ensure that we maintain the market lead we have built. Second, we need to translate the early wins we have seen this year into accretive recurring revenues, both through staying close to our partners and by targeting certain opportunities directly where we feel we are well placed to do so. Third, we need to ensure that the potential of assets such as Assured O-Cloud and involvement in Microsoft's Cloud Service Provider and Cloud OS Network programmes are keenly pursued. Our collective energy will be focused on those three tasks as 2015 unfolds and we pursue our objective of wealth creation.
Ken Olisa, OBE
Strategic and Financial Review
Building out our financial base
We have made strong progress this year on many fronts, including strong revenue growth, high profile new business wins in competitive processes, significantly narrowing losses and development of new platforms and services. This year our strategy was to focus resources on clear revenue opportunities to generate material recurring revenue as demand for Cloud services from both the commercial and public sectors grew and activity with our strategic channel partners began to ramp. Today's results show progress on that objective - we are growing our business and our pipeline of opportunities continues to strengthen as we prove our capabilities and market leading position.
After unanticipated delays that impacted revenue growth, our large strategic partners have now launched and we are already seeing the benefits. We are also working to develop run-rate business from mid-market firms alongside large enterprise wins. During the year and going into 2015, we have rebalanced our go to market strategy. We have focused our resources on a more limited number of committed partners as well as mid-market and enterprise direct sales. For our new Assured O-Cloud platform we are initially focused on direct sales with our partners such as Microsoft, although several existing and new partners have expressed an interest in reselling our services and we expect to bring them online during 2015.
Proving our ability to win
The results today serve as evidence that we are on the right path and our strategy of focusing on the delivery of services based on Microsoft technologies is working. Three FTSE 100 companies and 60,000 end-users will be reliant on Outsourcery's services and the number of users of these services is expected to grow further in 2015 and new services are expected to be added. Since activating initiatives with a number of strategic channel partners our pipeline of opportunities has continued to grow. Our partners are actively selling our portfolio of solutions, driving the conversion of material enterprise opportunities and reinforcing our position as a market leader.
Outsourcery continues to prove its capability and credibility by winning high profile new business in competitive processes against very well-established and in some cases very large managed services providers and systems integrators.
Our most recent FTSE 100 contract win in December, was again delivered by a key channel partner and was the first end-customer to require Outsourcery's Pan Government accreditation for the O-Cloud. The deal not only proves that our partner strategy is working but also that the government accreditation is a material point of differentiation in the market place for large, high quality companies. Importantly, the deal is expected to deliver GBP1.1 million of revenue and GBP30,869 average monthly recurring revenue (MRR) over the initial three-year period.
This time last year we spoke about how these channel partnerships could be a compelling real route to revenue. Although we have rebalanced our channel and direct sales and marketing activities to take account for the realities of the market, over the past twelve months we have proved that assertion to be correct and we are seeing material revenue returns from these engagements. Whilst we are proud of the progress the Company has made in converting these larger end-customers, we have also continued to make progress selling to small and medium-sized enterprises ("SME"). These developments prove that the market is opening up and there is appetite from businesses of all sizes to transition to a Cloud model.
Extending our partnership ecosystem
Outsourcery's strategy has relied on the activation of reseller partners to drive revenue growth from a select number of large strategic and mid-market partners. In the year gone by we continued to make efforts to extend and deepen these partnership relationships and in January, following a rigorous evaluation of our offering, we were pleased to announce that we formally entered in to a strategic partnership agreement with Vodafone. The scope of this agreement was subsequently increased to include Vodafone's entire global enterprise customer base. While these relationships took longer than anticipated to ramp-up, the revenue progression in the second half of the year serves to validate this strategy.
To that end, we also announced our participation in the Microsoft Cloud Solution Provider Programme which has only been made available to a limited number of Microsoft partners. This allows Outsourcery to provide direct billing, sell combined offers and services as well as provision, manage and support Microsoft Cloud offerings, such as Office 365. The deal enables us to further integrate Office 365 with our own offering, expand Cloud sales opportunities and completely own the customer management lifecycle. The deal serves as another example of the strength of our partnership relationships and the opportunities they can bring.
Although we are extending our partner programme, we are focused on those partners that are committed to selling Cloud services, which requires investment in people, systems and processes. Industry research from, for example, the Cloud Industry Forum demonstrates that demand for Cloud services from business customers is beginning to outstrip the incumbent channel's ability to supply such services and many are not engaging in the conversation about the benefits of Cloud services with their customers despite rising awareness amongst business managers and owners. As a result our strategy is very much one of quality and not quantity. We intend to extend the programme for the public sector and resale of our Assured O-Cloud services to central government.
Advancing our platform
The strength of our platform is now being recognised and we made major steps in cementing our market leading position and widening the sphere of sales possibilities. Most notably we were pleased to announce that the Outsourcery O-Cloud platform has gained "OFFICIAL" Pan Government Accreditation (PGA). This means that our platform now meets public sector security requirements to run government classified information over the internet. This accreditation opens opportunities within public sector organisations - such as local authorities, government bodies and 'blue-light' emergency services - and these organisations will be able to procure Outsourcery's services on the Government's Digital Marketplace. The potential within this market is significant and the accreditation follows the UK Government's introduction of a Public Cloud First Policy mandating government departments to consider Cloud and SME procurement before any other option when looking at IT needs.
We are already seeing the benefits of this accreditation coming through and post-period end, we were pleased to announce that Berkshire Healthcare NHS foundation Trust chose Outsourcery - via the G-Cloud framework - to deliver its Microsoft Lync (to be rebranded "Skype for Business") Software-as-a-Service ("SaaS") solution which will be delivered from Outsourcery's O-Cloud PGA OFFICIAL Internet Platform. This was our first win via the G-Cloud and gives us confidence that the procurement framework and government accreditation will create significant opportunity within the Public Sector over the coming year.
Underpinning our capital structure
In August, the Group raised GBP4.5 million of working capital through a financial package which comprised of the following:
-- Reduced annualised costs by GBP1.0 million through organisational restructure;
-- Co-Chief Executive Officers' salary sacrifice, creating a cash benefit to the Company of GBP0.5 million;
-- Agreement with the Group's debt providers to reschedule debt service to generate free cash flow of GBP1.5 million; and
-- Placing of new Ordinary Shares in the Company to raise GBP1.5 million (net).
The aim of the package was to address the Group's cash requirements and deliver on our stated strategy. This raise was in light of a longer than anticipated build of the strategic partner channel at the start of the year which had an impact on the Group's MRR and consequently pushed out the Group's monthly cash-flow break-even point. We outlined at the time that we intended to use the cash to activate new partners and drive significant revenue momentum throughout the rest of the year. Our financial progress in the second half of the year is evidence that was the correct decision to make and gives us confidence for our progress over the coming year.
Pleasingly, that confidence in the Group's potential for growth was shared by Encore, who we welcomed to our shareholder register. Encore has a strong track record of recognising and working collaboratively to grow high potential businesses and in October they elected to invest GBP1.0 million in Outsourcery via the purchase of new Ordinary Shares in the Company. This investment supported the financial package and gave us greater options to pursue and accelerate growth, particularly in the mid-market segment and with enterprise customers.
Strategy and Outlook
We are entering the year with a very clear and focused strategy and are in a strong position as interest in the Cloud builds and our partner relationships begin to pay off. Over the medium-term, the Company expects revenue growth to be driven by our existing strategic partners, the addition of a more limited number of focused new partners and the growth of our public sector pipeline utilising the new Assured O-Cloud. This will be supported by more mid-market direct business, driven in particular by hybrid solutions integrated into Microsoft's platforms such as Office365.
Over the year ahead we will focus on ensuring that we maintain the market lead we have built as well as translating the early wins we have seen this year into monthly recurring revenues as users and workloads are migrated to our platforms. We also need to ensure that the potential of our listing of our key services on the G-Cloud and Microsoft's Cloud Service Provider and Cloud OS Network programmes are keenly targeted through our direct channels.
Whilst there is always more work to be done, we have made significant progress this year and expect revenue to continue to grow steadily throughout 2015. Our pipeline, particularly with our largest partners, is strong and the Board remains confident that the business has a clear path to profitability.
Financial Review
Income Statement
Total revenue has grown this year by 42% to GBP7.4 million: an encouraging sign that the market for our services is beginning to open up despite the delays to revenue experienced. In addition to this overall growth, one of the key metrics by which we measure our progress is Monthly Recurring Revenue ("MRR"). Cloud services are billed on a subscription basis although end-customer contracts are typically approximately three years in length. Outsourcery benefits from recurring revenues unlike traditional IT and communications suppliers that may only benefit from recurring support revenues. Over the course of this financial year MRR has risen from GBP0.6 million at 31 December 2013 to GBP0.7 million at 31 December 2014. This represents growth of 17% and, at the current exit run rate, would lead to annualised recurring revenue of GBP8.4million. Whilst servicing this strong growth, and against the backdrop of our continued investment in product and platform, our gross margin has increased to 45% (2013: 36%) and this is expected to improve further as the business scales against a stable cost base.
Total revenue in the period was GBP7.4 million (2013: GBP5.2 million) and comprised GBP7.1 million (2013: GBP4.1 million) of recurring revenue and GBP0.3 million (2013: GBP1.1 million) of non-recurring or professional services revenue.
Administrative expenses (excluding exceptional costs and employee share based payment charge) were tightly controlled at GBP9.1 million (2013: GBP10.1 million). Cost control remains a key focus across the Group.
Adjusted EBITDA showed a loss of GBP4.6 million (2013: GBP7.2 million). Adjusted EBITDA is calculated as reported profit from continuing operations, adjusted for exceptional costs, and employee share-based payment charge, before finance costs, taxation, depreciation and amortisation and is considered by the Directors to be a key measure of financial performance.
Exceptional costs relate to redundancies incurred due to the Group restructure during 2014.
The Group's loss before and after taxation from continuing operations was GBP7.6 million (2013: GBP9.3 million) and basic loss per share from continuing operations for the year was 19.7 pence (2013: loss of 36.1 pence).
The Group's adjusted loss before and after taxation from continuing operations was GBP6.3 million (2013: GBP8.8 million) and adjusted loss per share from continuing operations for the year was 16.4 pence (2013: loss of 34.1 pence).
Cash Flow
The Group had gross cash at 31 December 2014 of GBP2.5 million (2013: GBP6.3 million). During the course of 2014 the Group raised total equity funds of GBP2.3 million (net of expenses). These funds continue to be deployed to scale the business.
Consolidated Statement of Financial Position
Property, plant and equipment at 31 December 2014 had a net book value of GBP3.5 million (2013: GBP2.0 million). Intangibles at GBP0.9 million (2013: nil). This year we have capitalised the development costs relating to advancing our Assured O-Cloud.
Trade and other receivables at 31 December 2014 were GBP2.3 million (2013: GBP2.2 million), consisting of GBP0.9 million (2013: GBP1.0 million) of trade receivables and GBP1.4 million (2013: GBP1.2 million) of other receivables and prepayments. There were no trade and other receivables due after more than one year.
Trade and other payables at 31 December 2014 were GBP4.1 million (2013: GBP2.3 million), consisting of GBP0.9 million (2013: GBP0.7 million) of trade payables and GBP3.2 million (2013: GBP1.6 million) of other payables and accruals.
Total borrowings at 31 December 2014 were GBP5.2 million (2013: GBP4.2 million), consisting of interest bearing term debt of GBP1.5 million (2013: GBP2.6 million), non-interest bearing term debt of GBP0.8 million (2013: GBP0.7 million) and finance leases of GBP2.9 million (2013: GBP0.9 million).
The Group has accumulated tax losses of GBP26.0 million (2013: GBP18.4 million) which are available to carry forward and relieve against future profits. The deferred tax asset value of these losses is not currently reflected in the consolidated statement of financial position.
Average headcount of the Group for the year was 110 (2013: 117).
On behalf of the board,
Piers Linney Simon Newton Co-CEO Co-CEO
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2014
2014 2013
Note GBP'000 GBP'000
Continuing operations
Revenue 7,384 5,226
Cost of sales (4,049) (3,329)
--------- ---------
Gross profit 3,335 1,897
Administrative expenses
(excluding fees associated
with listing) (10,363) (10,109)
Fees associated with listing
(included as administrative
expenses) - (495)
--------- ---------
Total administration expenses (10,363) (10,604)
Operating loss (7,028) (8,707)
Interest received 5 -
Finance costs (589) (590)
--------- ---------
Loss for year before and after
taxation from continuing operations (7,612) (9,297)
Profit for the year from discontinued
operations - 172
Loss for year and total comprehensive
income (all attributable to
equity holders of the parent) (7,612) (9,125)
========= =========
Loss for year before and after
taxation from continuing operations (7,612) (9,297)
Fees associated with listing - 495
Employee share-based payment
charge 988 25
Exceptional restructuring costs 293 -
Adjusted loss for year before
and after taxation from continuing
operations (6,331) (8,777)
Depreciation and amortisation 1,180 1,022
Finance costs 589 590
--------- ---------
Adjusted EBITDA (4,562) (7,165)
========= =========
Pence Pence
Basic and diluted (loss)/earnings
per share
- Loss from continuing operations 2 (19.72) (36.11)
- Earnings from discontinued
operations - 0.67
--------- ---------
- Total (19.72) (35.44)
========= =========
Adjusted (loss)/earnings per
share
- Loss from continuing operations 2 (16.40) (34.09)
- Earnings from discontinued
operations - 0.67
--------- ---------
- Total (16.40) (33.42)
========= =========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2014
Share Share Retained Merger Total
Capital Premium Losses Reserve Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 January 2013 173 - (12,659) 4,768 (7,718)
Issue of share capital 173 18,470 - - 18,643
Employee share-based payment options - - 25 - 25
Share issue expenses - (797) - - (797)
Merger accounting adjustment - - - 2,977 2,977
-------- -------- -------- -------- -------
Transactions with owners of parent 173 17,673 25 2,977 20,848
Loss and Total Comprehensive Income
for the period - - (9,125) - (9,125)
-------- -------- -------- -------- -------
Balance at 31 December 2013 346 17,673 (21,759) 7,745 4,005
Issue of share capital 127 2,410 - - 2,537
Share issue expenses - (63) - - (63)
Employee share-based payment options - - 988 - 988
-------- -------- -------- -------- -------
Transactions with owners of parent 127 2,347 988 - 3,462
Loss and Total Comprehensive Income
for the period - - (7,612) - (7,612)
-------- -------- -------- -------- -------
Balance at 31 December 2014 473 20,020 (28,383) 7,745 (146)
======== ======== ======== ======== =======
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2014
Notes 2014 2013
GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment 3,453 2,042
Intangibles 885 -
--------- ---------
Total non-current assets 4,339 2,042
--------- ---------
Current assets
Trade and other receivables 2,278 2,182
Cash and cash equivalents 2,526 6,331
--------- ---------
Total current assets 4,804 8,513
--------- ---------
Assets included in disposal
group classified as held for
sale - 35
--------- ---------
Total assets 9,143 10,590
========= =========
Equity and liabilities
Share capital 473 346
Share premium 20,020 17,673
Merger reserve 7,745 7,745
Retained losses (28,383) (21,759)
--------- ---------
Equity attributable to owners
of the parent and total equity (146) 4,005
--------- ---------
Liabilities
Non-current liabilities
Borrowings 3 3,556 2,975
--------- ---------
Total non-current liabilities 3,556 2,975
--------- ---------
Current liabilities
Trade and other payables 4,100 2,342
Borrowings 3 1,633 1,234
--------- ---------
Total current liabilities 5,733 3,576
--------- ---------
Liabilities included in disposal
group classified as held for
sale - 34
--------- ---------
Total liabilities 9,289 6,585
========= =========
Total equity and liabilities 9,143 10,590
========= =========
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2014
2014 2013
GBP'000 GBP'000
Operating activities from continuing
operations
Loss for the period (7,612) (9,297)
Finance costs 587 590
Gain on extinguishing financial
liabilities with equity - (42)
Listing fees - 495
Depreciation 1,125 1,022
Amortisation 53 -
Share based payment costs 988 31
Net changes in working capital 1,618 (1,876)
------- -------
Net cash flow used in continuing
operations (3,241) (9,077)
Net cash from/(used in) discontinued
operations 1 236
------- -------
Net cash used in operating
activities (3,240) (8,841)
------- -------
Investing activities
Purchases of property, plant
and equipment (289) (251)
Purchase of intangible assets (468) -
Proceeds from sale of business
(discontinued operations) - 185
Net cash flow from investing
activities (757) (66)
------- -------
Financing activities
Finance lease capital repayments (697) (470)
Proceeds from issue of share
capital (net of issue costs) 2,474 17,718
Repayments of other borrowings (1,177) (1,311)
Listing fees paid - (495)
Interest and finance lease
charges paid (408) (444)
------- -------
Net cash flow from financing
activities 192 14,998
------- -------
Net (decrease)/increase in
cash and cash equivalents in
the period (3,805) 6,091
------- -------
Cash and cash equivalents at
start of period 6,331 240
------- -------
Cash and cash equivalents at
end of period 2,526 6,331
======= =======
NOTES TO THE PRELIMINARY RESULTS
1. Summary of accounting policies
Basis of preparation
The Financial Information set out in this announcement does not constitute the statutory accounts of the Group for the year ended 31 December 2014. The auditors reported on those accounts, their report was unqualified and did not contain a statement under Section 498(2) or (3) of the Companies Act 2006. The statutory accounts for the year ended 31 December 2014 will be delivered to the registrar of companies following the Annual General Meeting.
Whilst the Financial Information included in this announcement has been computed in accordance with International Financial Reporting Standards ("IFRS"), this announcement in itself does not contain sufficient information to comply with IFRS. Details of the accounting policies applied are those set out in the annual report for the year ended 31 December 2013.
The Group's consolidated financial statements for the year ended 31 December 2014 have been prepared in accordance with International Financial Reporting Standards as adopted in the European Union ("IFRS") and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.
Going concern
The Directors have prepared cash flow forecasts for the period until December 2016, which include further revenue growth built upon the significant revenue growth achieved in the financial year ended 31 December 2014. As part of the preparation of these forecasts, the Directors have estimated the likely conversion of potential future business together with the impact of mitigating factors should the actual results prove to be lower than these estimates. 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 financial statements.
Loss per share
2014 2013
GBP'000 GBP'000
Continuing operations
Loss for the year attributable to
equity holders of the parent (7,612) (9,297)
Discontinued operations
Profit for the year attributable
to equity holders of the parent - 172
Total operations
----------- -----------
Loss for the year attributable to
equity holders of the parent (7,612) (9,125)
=========== ===========
Adjusted Loss
Continuing operations
Loss for the year attributable to
equity holders of the parent (7,612) (9,297)
Fees associated with listing - 495
Employee share-based payment charge 988 25
Exceptional restructuring costs 293 -
----------- -----------
Adjusted loss for the year attributable
to equity holders of the parent* (6,331) (8,777)
Discontinued operations
Profit for the year attributable
to equity holders of the parent - 172
Total operations
----------- -----------
Adjusted loss for the year attributable
to equity holders of the parent (6,331) (8,605)
=========== ===========
Number Number
Weighted average number of shares
used in basic and diluted (loss)
/ earnings per share 38,596,663 25,749,245
=========== ===========
Basic and diluted (loss)/earnings
per share Pence Pence
Loss from continuing operations (19.72) (36.11)
Earnings from discontinued operations - 0.67
----------- -----------
Total (19.72) (35.44)
=========== ===========
Adjusted (loss)/earnings per share*
Adjusted loss from continuing operations (16.40) (34.09)
Earnings from discontinued operations - 0.67
----------- -----------
Total (16.40) (33.42)
=========== ===========
*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 adjusted loss figures above and the weighted average number of ordinary shares above.
Share options are anti-dilutive due to losses
2. Borrowings
Notes 2014 2013
GBP'000 GBP'000
Current
Boost loan stock (i) 323 942
Property mortgage (ii) 281 37
Finance leases (iv) 1,029 255
1,633 1,234
======== ========
Non-current
Boost loan stock (i) 907 1,428
Property mortgage (ii) - 281
Etive loan stock (iii) 802 670
Finance leases (iv) 1,846 596
3,555 2,975
-------- --------
5,188 4,209
======== ========
Notes to the analysis of borrowings
(i) The Boost loan stock bore interest at 12.5% from 1 January 2014. After the amendment made to the financial instrument in August 2014 interest is charged at 14%. This loan is expected to be repaid in full in March 2017.
(ii) The property mortgage bears interest at 10% and is expected to be repaid in full in July 2015. Due to the mortgage being due within 12 months it has been classified as current.
(iii) GBP999,000 of the cash value of the Etive loan stock was converted to 908,182 ordinary shares upon Admission at the IPO price. The remainder of the GBP1.0 million Etive loan stock bears no interest and is shown at its present value. This loan stock is expected to be repaid in full on 24 May 2016.
(iv) Commitments under finance leases are shown below:
Within 1 to After
1 year 5 years 5 years Total
As at 31 December
2013 GBP'000 GBP'000 GBP'000 GBP'000
Lease payments 263 596 - 859
Finance charges (8) - - (8)
-------- --------- --------- -------------
Net present values 255 596 - 851
-------- --------- --------- -------------
As at 31 December
2014
Lease payments 1,126 2,080 - 3,206
Finance charges (97) (233) - (330)
-------- --------- --------- -------------
Net present values 1,029 1,847 - 2,876
-------- --------- --------- -------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR LLFEVVEIAFIE
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