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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Pebble Beach Systems Group Plc | LSE:PEB | London | Ordinary Share | GB0001482891 | ORD 2.5P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 10.50 | 10.00 | 11.00 | 10.50 | 10.50 | 10.50 | 56,237 | 08:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Radio, Tv Broadcast, Comm Eq | 12.37M | 1.53M | 0.0123 | 8.54 | 13.07M |
TIDMPEB
RNS Number : 7983W
Pebble Beach Systems Group PLC
28 April 2021
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 ("MAR"). Upon the publication of this announcement, the inside information is now considered to be in the public domain for the purposes of MAR.
Pebble Beach Systems Group plc
Final Results for the year ended 31 December 2020
Pebble Beach Systems Group plc (AIM: "PEB", "Pebble" or the "Group"), a leading global software business specialising in playout automation and content management solutions for the broadcast and streaming service markets, is pleased to announce its final results for the year ended 31 December 2020.
Financial Headlines
2020 2019 -------------------------------------- --------------------- ----------------- Revenue GBP8.4m GBP11.2m Gross profit GBP6.4m GBP8.3m Gross margin 77% 74% Adjusted EBITDA* GBP2.7m GBP3.8m % of Revenue 32% 34% Net profit for the year GBP1.3m GBP1.5m Adjusted diluted earnings per share* 1.1p 1.8p Basic earnings per share 1.0p 1.1p Order Intake GBP7.8m GBP10.3m Cash generated from operations GBP2.5m GBP2.4m Net Debt GBP7.7m GBP8.4m
Headlines
-- Trading in the year impacted by COVID-19 with customers being slow to make investment decisions impacting orders and revenue
-- Encouraging uptake in activity in the first quarter of 2021, with orders up 86% in Q1 2021 compared with the same pre-COVID-19 quarter of 2020
-- Implemented cost savings to maintain the adjusted EBITDA above 30% despite COVID-19 headwinds reducing revenue by 25%
-- Seamless transition to remote working as the UK Government imposed a series of lockdowns
-- Workforce capability maintained with no redundancies or use of the Government furlough schemes
-- Reduced long-term bank debt by a further GBP1m -- Extension to bank loan agreement securing the facility until 30 November 2022
*Adjusted EBITDA, a non-IFRS measure, is EBITDA before non-recurring items and foreign exchange gains. Adjusted earnings per share is calculated by excluding foreign exchange gains or losses, amortisation of acquired intangibles, non-recurring items and the share-based payment charge, after tax effects.
Peter Mayhead, Chief Executive Officer of Pebble Beach Systems Group plc, said:
I am immensely proud with the way that our company delivered excellent results during a difficult period. Our investment in technology is key to the future success of our growth strategy and we always look to our customers in the broadcast markets for validation of our approach. Engagement with those customers verifies that they are facing significant challenges as they look to balance many competing pressures; the advent of remote production, the reduction of barriers to entry as internet-based platforms enable new entrants into the market, and increasing content costs driven by hit shows from the major streaming services.
When added to the growing competition for advertising spend from social media, the need for innovation is clear. To sustain their competitive edge, broadcasters must build on their historic ability to channelise and distribute content to an audience whose platform of choice is still overwhelmingly linear. They are doing this by investing in technology that enables them to leverage the benefits of digital-based workflows.
To that end in 2018, Pebble commenced work on developing our new digital platform "Oceans". As an entirely new platform based on the latest technologies, Oceans offers rapid application development, remote operation, security, licensing flexibility, and storage flexibility. At the same time, the platform has at its core, the ability for our customers to continue to utilise their investment in our current product suite.
I am delighted to report that in addition to releasing the award-winning Oceans platform for customer installation during 2020, we also released Pebble Control. This solution expands our portfolio to offer IP connection management, enabling our customers to establish all-IP workflows, regardless of the scale of their operations.
2020 was a challenging year for all, yet our commitment to delivering on our annual plan in line with our company's values enabled us to weather the storm without the need for staff furlough, redundancies, or reduction in our technology investment. We look forward to 2021 with a high level of optimism as we continue to launch new applications to the market, broadening our suite of cutting-edge, fully integrated, and scalable capabilities.
- ends -
For further information please contact:
Peter Mayhead - CEO +44 (0) 75 55 59 David Dewhurst - CFO 36 02 finnCap Ltd (Nominated Adviser and Broker ) Marc Milmo / Teddy Whiley - Corporate +44 (0) 207 220 Finance 0500 Tim Redfern / Sunila de Silva - ECM
The Company is quoted on the LSE AIM market (PEB.L). More information can be found at www.pebbleplc.com .
About Pebble Beach Systems
Pebble Beach Systems (trading as Pebble) is a world leader in designing and delivering automation, integrated channel and virtualised playout solutions, with scalable products designed for applications of all sizes. Founded in 2000, Pebble has commissioned systems in more than 70 countries, with proven installations ranging from single up to over 150 channels in operation, and around 2000 channels currently on air under the control of our automation technology. An innovative, agile company, Pebble is focused on discovering its customers' requirements and pain points, designing solutions which will address these elegantly and efficiently, and delivering and supporting these professionally and in accordance with its users' needs.
Forward-looking statements
Certain statements in this announcement are forward-looking. Although the Group believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to be correct. Because these statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements. The Group undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise. Nothing in this announcement should be construed as a profit forecast.
CHAIRMAN'S STATEMENT
INTRODUCTION
In common with the majority of companies across all sectors, 2020 was a year like no other in our history. I am incredibly proud of the robust way that the Group responded to the challenges presented by the COVID-19 pandemic and continues to do so.
The year saw some customers cancel anticipated projects and others delay investment decisions as they understandably focused on addressing the challenges that COVID-19 created for their own business. This led to an inevitable reduction in orders in the year from GBP10.3 million to GBP7.8 million which had consequential effect on revenue. However, as the new year started, we began to see customers look forwards again which saw an upturn in customer engagement, a growth in our pipeline and by the end of Q1 2021 our orders were up 86% on the comparable period last year.
The opportunity for our technology remains significant with COVID-19 having an undeniable impact on the broadcast sector. 2020 saw a return to traditional media as a source of news and information, an increase in the need for remote production technology and an increase in interest for forms of subscription-based offerings. In this environment, cloud and IP-based technology are seen as important tools to deliver against these sector trends. The accelerated investment we have made in our new digital platform, Oceans, has all the benefits of current technologies enabling our customers to establish all-IP workflows whilst retaining at its core the ability for our customers to continue to utilize their investment in our existing installed solutions. We believe the increased investment in our technology is critical to our delivery of next generation cloud-based solutions.
Coupled with the technology enhancements we were able to progress in 2020, the year also saw the resilience of our operating model being demonstrated. Our employees made a seamless transition to homeworking continuing to be highly productive in meeting our customers' needs. Our level of service and solutions delivery ensured that all staff were fully engaged throughout the year and no redundancies were considered. Additionally, we had no requirement to make use of the Government furlough schemes. These facts demonstrate the underlying strength of the Group. Notwithstanding the ongoing investment in technology development, we have also paid down another GBP1.0 million of our long-term debt. We have maintained our discipline on costs and have been able to deliver strong margins in unprecedented market conditions. We are confident of growth in 2021 and in our ability to deliver success for all our stakeholders.
FINANCIAL RESULTS
Revenue for 2020 of GBP8.4 million (2019: GBP11.2 million). Recurring revenue from support contracts was up 10% to GBP4.0 million (2019: GBP3.6 million).
Gross profit in 2020 was GBP6.4 million at a margin of 77% (2019: GBP8.3 million (74%)).
Adjusted EBITDA of GBP2.7 million in 2020 (2019: GBP3.8 million), before depreciation and amortisation, of GBP1.2 million (2019: GBP2.0 million) are deducted.
The Group continues to view investment in the development of new products and services as key to future growth and we will continue to invest in innovation and new technologies. In 2020, Pebble Beach Systems capitalised GBP1.3 million of development costs (amortised GBP0.8 million), (2019: GBP1.0 million) (amortised GBP0.8 million).
Net finance costs were slightly lower in 2020 reflecting the Group's pay-down of some of its revolving credit facility ("RCF") offsetting more than the full year impact of an increased interest rate of 3.53% (2019: 3.30%). The available RCF as at 31 December 2020 was reduced to GBP8.5 million, all of which had been drawn fully down (2019: GBP9.5 million, of which GBP9.5 million had been fully drawn down). Interest paid on the RCF was GBP0.3 million (2019: GBP0.4 million).
The net profit for the year was GBP1.3 million (2019: GBP1.5 million).
DEBT
At 31 December 2020, the Group's net debt (excluding debt related to leases following the implementation of IFRS 16) was GBP7.7 million (2019: GBP8.4 million), comprising net cash of GBP0.8 million (2019: GBP1.1 million) and the drawn down RCF from Santander of GBP8.5 million (2019: GBP9.5 million).
We enjoy a close relationship with our bank and have kept up a regular dialogue over the last 12 months during the COVID-19 pandemic. During 2020, we agreed a capital repayment holiday in June 2020 under the Government's initiative, and we also agreed a reduced level of repayment in December 2020. These actions were taken to mitigate potential cashflow risks caused by the uncertainties relating to the pandemic. During 2020 we repaid GBP1.0 million of the RCF and did not take on any new debt available under the Government loan support schemes. Post year end, on 10 March 2021, we signed a 12-month extension to the current GBP8.5 million loan agreement. The agreement secures the facility until 30 November 2022 with revised quarterly repayments and EBITDA covenant test levels reduced to reflect the current trading environment. This agreement was based on the budget for 2021 and forecasts for the following two years.
GOING CONCERN
The directors are required to assess the Company's and the Group's ability to continue to trade as a going concern. The details of this review are covered in the extract from the Notes to the Financial Statements below. The Board concluded, from its thorough assessment of the detailed forecasts, that the Group will have sufficient resources to meet its liabilities during the review period through to 30 June 2022 and that it is appropriate that the Group and the Company prepare accounts on a going concern basis.
BOARD CHANGES
As previously announced, we were pleased to make two new appointments to the Board; on 1 May 2020, Richard Logan was appointed to the Board as Non-Executive Director and on 5 October 2020, David Dewhurst was appointed as Chief Financial Officer.
TRADING OUTLOOK
The results achieved in 2020, in such unfavourable conditions, came from the combined efforts of each and every member of staff. Their determination and perseverance throughout 2020 has clearly demonstrated that our strong culture of resilience, enthusiasm, expertise, agility and dedication allows us to look forward with optimism as the world returns to some level of normality.
2021 started slowly as customers continued their cautious approach to investment decision making. As the first quarter has unfolded customer confidence has returned and the order intake for the first quarter closed at GBP4.0 million, up 86% compared with GBP2.2 million in the same quarter of 2020, which was largely pre-COVID-19. GBP1.5 million of these orders had been in the pipeline for several months but it is reassuring to see that our customers are emerging from the difficulties of 2020 and planning expansions of their broadcast and streaming services.
With the vaccine programme gathering momentum around the world, we feel confident that more customers will take the investment decisions that have been delayed by the pandemic. Our pipeline remains strong and has continued to grow in 2021 and reflects the market opportunity for our technology. We are continuing with the increased investment in our product suite which is critical to the delivery of cloud-based solutions to work alongside our on-premise solutions. The Board is confident that the Group is well positioned to support our customers as they transition from traditional broadcast infrastructure to more flexible IP-based technologies.
John Varney
Non-Executive Chairman
For the year ended 31 December 2020
FINANCIAL REVIEW
For the year ended 31 December 2020
Continuing Operations
2020 2019 Change GBP'm GBP'm % ----------------------- ------- ------- ------- Pebble Beach Systems 8.4 11.2 (25.1) ------- Total Revenue 8.4 11.2 (25.1) ----------------------- ------- ------- ------- Pebble Beach Systems 3.3 4.5 (26.8) PLC costs (0.6) (0.7) 11.8 ----------------------- ------- ------- ------- Total adjusted EBITDA 2.7 3.8 (29.4) ----------------------- ------- ------- -------
Cash flows
The Group held cash and cash equivalents of GBP0.8 million at 31 December 2020 (2019: GBP1.1 million). The table below summarises the cash flows for the year.
2020 2019 GBP'm GBP'm ------------------------------------------- ------ ------ Cash generated from operating activities 2.1 2.0 Net cash used in investing activities (1.4) (1.1) Net cash used in financing activities (1.0) (1.1) Net decrease in cash and cash equivalents (0.3) (0.2) Cash and cash equivalents at 1 January 1.1 1.3 ------------------------------------------- ------ ------ Cash and cash equivalents at 31 December 0.8 1.1 ------------------------------------------- ------ ------
As at 31 December 2020 net debt was GBP7.7 million (cash GBP0.8 million and bank debt of GBP8.5 million). At the end of March 2021, net debt had reduced to GBP7.1 million. The Group was using GBP8.5 million of its available facilities in December 2020.
Foreign exchange
The principal exchange rates used by the Group in translating overseas profits and net assets into sterling are set out in the table below.
Average Average Year end Year end rate rate rate rate Rate compared to GBP sterling 2020 2019 2020 2019 ------------------------------ ------- ------- -------- -------- US dollar 1.284 1.277 1.365 1.321 ------------------------------ ------- ------- -------- --------
Risk management
The Board regularly reviews the full range of business risks facing the Group. The approach adopted is to identify, evaluate and manage the likely impact of risk on the Group's business objectives. Where the risks are unavoidable, they are managed through business controls and where appropriate through insurance and treasury activities.
The Group has a programme of regular risk assessment, which incorporates internal control reviews of both a financial and non-financial nature. A process of continuous review has been in place throughout the year at an operating company level to consider the risk environment and the effectiveness of controls. The results of reviews, initiatives and progress on implementing control improvements are regularly reported to the Board.
Environmental, Social and Governance (ESG)
The Group is committed to ESG considerations and the Board understands that these criteria are an increasingly important component of investors' evaluation of companies in which they want to invest. In addition to our robust governance, the Board takes regular account of the significance of social and environmental matters.
CONSOLIDATED GROUP INCOME STATEMENT
for the year ended 31 December 2020
2020 2019 Notes GBP000 GBP000 Revenue 3 8,393 11,200 Cost of sales (1,964) (2,931) -------- -------- Gross profit 6,429 8,269 Sales and marketing expenses (1,687) (2,044) Research and development expenses (1,263) (1,298) Administrative expenses (1,870) (2,247) Foreign exchange gains/(losses) 15 (71) Other expenses (156) (889) Operating profit 4 1,468 1,720 ----------------------------------------------- ------ -------- -------- Operating profit/ is analysed as: Adjusted earnings before interest, tax, depreciation and amortisation 2,658 3,765 Exchange gains/(losses) credited/(charged) to the income statement 15 (71) ----------------------------------------------- ------ -------- -------- Earnings before interest, tax, depreciation and amortisation (EBITDA) 2,673 3,694 ----------------------------------------------- ------ -------- -------- Depreciation (234) (238) Amortisation and impairment of acquired
intangibles (156) (889) Amortisation of capitalised development costs (815) (847) -------- Finance costs 5 (374) (393) Finance income 5 1 2 Profit before tax 1,095 1,329 Tax 6 199 82 -------- -------- Profit for the year being loss attributable to owners of the parent 1,294 1,411 Net result from discontinued operations - 39 -------- -------- Net result for the year 1,294 1,450 Earnings per share from continuing operations attributable to the owners of the parent during the year Basic earnings per share 7 1.0p 1.1p Diluted earnings per share 7 1.0p 1.1p ----------------------------------------------- ------ -------- --------
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2020
2020 2019 GBP000 GBP000 --------------------------------------------- ------- ------- Profit for the financial year 1,294 1,450 Other comprehensive income - items that may be reclassified subsequently to profit or loss: Exchange differences on translation of overseas operations - continuing operations 26 19 Total profit for the year attributable to owners of the parent 1,320 1,469 ---------------------------------------------- ------- -------
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
for the year ended 31 December 2020
Capital Ordinary Share redemption Merger Translation Accumulated shares premium reserve reserve reserve losses Total GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 ------------------------------------ -------- -------- ------------ --------- ------------ ----------- -------- At 1 January 2019 3,115 6,800 617 29,778 (195) (46,453) (6,338) Share based payments: value of employee services - - - - - 27 27 ------------------------------------ -------- -------- ------------ --------- ------------ ----------- -------- Transactions with owners - - - - - 27 27 ------------------------------------ -------- -------- ------------ --------- ------------ ----------- -------- Retained profit for the year - - - - - 1,450 1,450 Exchange differences on translation of overseas operations - - - - 19 - 19 ------------------------------------ -------- -------- ------------ --------- ------------ ----------- -------- Total comprehensive income for the period - - - - 19 1,450 1,469 ------------------------------------ -------- -------- ------------ --------- ------------ ----------- -------- At 31 December 2019 3,115 6,800 617 29,778 (176) (44,976) (4,842) ------------------------------------ -------- -------- ------------ --------- ------------ ----------- -------- At 1 January 2020 3,115 6,800 617 29,778 (176) (44,976) (4,842) ------------------------------------ -------- -------- ------------ --------- ------------ ----------- -------- Share based payments: value of employee services - - - - - 12 12 Unclaimed dividends - - - - - 44 44 ------------------------------------ -------- -------- ------------ --------- ------------ ----------- -------- Transactions with owners - - - - - 56 56 ------------------------------------ -------- -------- ------------ --------- ------------ ----------- -------- Retained profit for the year - - - - - 1,294 1,294 Exchange differences on translation of overseas operations - - - - 26 - 26 ------------------------------------ -------- -------- ------------ --------- ------------ ----------- -------- Total comprehensive income for the period - - - - 26 1,294 1,320 ------------------------------------ -------- -------- ------------ --------- ------------ ----------- -------- At 31 December 2020 3,115 6,800 617 29,778 (150) (43,626) (3,466) ------------------------------------ -------- -------- ------------ --------- ------------ ----------- --------
CONSOLIDATED GROUP STATEMENT OF FINANCIAL POSITION
as at 31 December 2020
2020 2019 Notes GBP000 GBP000 ----------------------------------------------- ------ --------- --------- Assets Non-current assets Intangible assets 5,001 4,671 Property, plant and equipment 1,208 1,182 Deferred tax assets - 3 --------- --------- 6,209 5,856 --------- --------- Current assets Inventories 148 140 Trade and other receivables 3,125 3,468 Cash and cash equivalents 826 1,144 --------- --------- 4,099 4,752 Liabilities Current liabilities Financial liabilities - borrowings 1,800 1,520 Trade and other payables 4,059 4,466 Lease liabilities - current 145 139 --------- --------- 6,004 6,125 --------- --------- Net current liabilities (1,905) (1,373) --------- --------- Non-current liabilities Financial liabilities - borrowings 6,750 8,030 Lease liabilities - non-current 1,020 1,046 Deferred tax liabilities - 249 7,770 9,325 --------- --------- Net liabilities (3,466) (4,842) ----------------------------------------------- ------ --------- --------- Equity attributable to owners of the parent Ordinary shares 9 3,115 3,115 Share premium account 9 6,800 6,800 Capital redemption reserve 9 617 617 Merger reserve 29,778 29,778 Translation reserve (150) (176) Retained earnings (43,626) (44,976) --------- --------- Total deficit (3,466) (4,842) ----------------------------------------------- ------ --------- ---------
CONSOLIDATED GROUP STATEMENT OF CASH FLOWS
for the year ended 31 December 2019
2020 2019 Notes GBP000 GBP000 ------------------------------------------- ------ -------- -------- Cash flows from operating activities Cash generated from operations 8 2,484 2,423 Interest paid (374) (393) Taxation paid (46) (38) -------- -------- Net cash from operating activities 2,064 1,992 -------- -------- Cash flows from investing activities Interest received 1 2 Purchase of property, plant and equipment (107) (61) Expenditure on capitalised development costs (1,301) (985) Net cash used in investing activities (1,407) (1,044) -------- -------- Cash flows from financing activities Net cash used in repayment of financing activities 10 (1,000) (1,100) Net cash used in financing activities (1,000) (1,100) -------- -------- Net decrease in cash and cash equivalents and overdrafts (343) (152) Effect of foreign exchange rate changes 10 25 27 -------- -------- Cash and cash equivalents and overdrafts at 1 January 1,144 1,269 Cash and cash equivalents and overdrafts at 31 December 826 1,144 -------- -------- Net debt comprises: Cash and cash equivalents and overdrafts 826 1,144 Borrowings (8,550) (9,550) -------- -------- Net debt at 31 December 10 (7,724) (8,406) ------------------------------------------- ------ -------- --------
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2020
1. GENERAL INFORMATION
The Pebble Beach Systems Group is a leading global software business specialising in solutions for playout automation, and content serving customers in the broadcast markets.
The Company is a public limited company and is quoted on the Alternative Investment Market (AIM) of the London stock exchange. The Company is incorporated and domiciled in the UK. The address of its registered office is 12 Horizon Business Village, 1 Brooklands Road, Weybridge, Surrey, KT13 0TJ.
The registered number of the Company is 04082188.
This results announcement was approved for issue at close of business on 27 April 2021.
2. BASIS OF PREPARATION
The Group financial statements have been prepared on a going concern basis under the historical cost basis of accounting, except where fair value measurement is required under IFRS as described below and in accordance with International Financial Reporting Standards (IFRS), and interpretations issued by the IFRS Interpretations Committee (IFRS IC) and the Companies Act 2006 applicable to companies reporting under IFRS.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Group financial statements are disclosed in note 4 of the Group financial statements.
During the current reporting year there were no new standards or amendments which had a material impact on the net assets of the Group. Standards or amendments issued but not yet effective are not expected to have a material impact on the net assets of the Group.
The financial statements for the years ended 31 December 2020 and 31 December 2019, upon which the auditors issued unqualified opinions, also had no statement under section 498(2) or (3) of the Companies Act 2006.
GOING CONCERN
The directors are required to assess the Company's and the Group's ability to continue to trade as a going concern.
At 31 December 2020, the Group's net debt was GBP7.7 million (2019: GBP8.4 million), comprising net cash of GBP0.8 million (2019: GBP1.1 million) and the drawn down RCF from Santander of GBP8.5 million (2019: GBP9.5 million).
We enjoy a close relationship with our bank and have kept up a regular dialogue over the last 12 months during the COVID-19 pandemic. During 2020, we agreed a capital repayment holiday in June 2020 under the Government's initiative, and we also agreed a reduced level of repayment in December 2020. These actions were taken to mitigate potential cashflow risks caused by the uncertainties relating to the pandemic. During 2020 we repaid GBP1.0 million of the RCF and did not take on any new debt available under the Government loan support schemes. On 10 March 2021, we signed a 12-month extension to the current GBP8.5 million loan agreement. The agreement secures the facility until 30 November 2022 with revised quarterly repayments and EBITDA covenant test levels reduced to reflect the current trading environment. This agreement was based on the budget for 2021 and forecasts for the following two years.
In order to assess the appropriateness of preparing these financial statements on a going concern basis, management prepared detailed projections of the consolidated income statements, balance sheets and cash flow statements through to 30 June 2022. The starting point was the budget for 2021 approved by the Board and the forecast prepared for the above bank facility review, through to June 2022. A stress test scenario was then created to look only at existing orders and the current order pipeline. The evaluation was divided between new project orders and service support contracts. For new project orders in 2021, individual existing opportunities currently weighted at 50% and higher in the opportunity pipeline were evaluated in detail and included where it was felt that there was a high likelihood of success. For 2022 project revenue, the historically high gross pipeline value was taken, and weighted based on the historic conversion rates achieved in 2020. The support contract revenue was assessed based on existing renewed contracts, where revenue is recognized over the time period of the contract and historic renewal rates for support contracts expiring during 2021. A feature of the COVID-19 pandemic has been delayed decision making by our customers. Sensitivity analysis was therefore performed on the impact of further delays to decision making on the largest five opportunities with a high likelihood of success, in our existing pipeline. The outcome of this was that there would not be any potential going concern issues for the Group.
The Group did not make any redundancies nor place any staff on furlough as the management team navigated a path through the impact of the pandemic. The business made an effective switch to remote working and this will continue beyond the time when restrictions are lifted as many employees have embraced the work life balance choices that they now enjoy. The remote working practices have been extended and refined during the last year and productivity has been high, as any previously experienced delays whilst waiting for clients on site, can be mitigated as our engineers can switch to another project until the client is ready.
The Board has concluded, from its thorough assessment of the detailed forecasts, that the Group will have sufficient resources to meet its liabilities during the review period through to 30 June 2022 and that it is appropriate that the Group and the Company prepare accounts on a going concern basis .
3. SEGMENTAL REPORTING
The Group's internal organisational and management structure and its system of internal financial reporting to the Board of Directors comprise of Pebble Beach Systems Limited and PLC costs. The chief operating decision-maker has been identified as the Board.
The Board reviews the Group's internal financial reporting in order to assess performance and allocate resources. Management have therefore determined that the operating segments for the Group will be based on these reports.
The Pebble Beach Systems Limited business is responsible for the sales and marketing of all Group software products and services.
The table below shows the analysis of Group external revenue and operating profit from continuing operations by business segment.
Pebble PLC Total Beach Systems costs GBP000 ----------------------------------------------- --------------- -------- -------- Year to 31 December 2020 Broadcast 8,393 - 8,393 Total revenue 8,393 - 8,393 --------------- -------- -------- Adjusted EBITDA 3,234 (576) 2,658 Depreciation (234) - (234) Amortisation of acquired intangibles (156) - (156) Amortisation of capitalised development costs (815) - (815) Exchange (losses)/gains (3) 18 15
Finance costs (40) (334) (374) Finance income 1 - 1 Intercompany finance income/(costs) 217 (217) - --------------- -------- -------- Profit/(loss) before taxation 2,204 (1,109) 1,095 Taxation (152) 351 199 --------------- -------- -------- Profit/(loss) for the year being attributable to owners of the parent 2,052 (758) 1,294 Year to 31 December 2019 Broadcast 11,200 - 11,200 Total revenue 11,200 - 11,200 --------------- -------- -------- Adjusted EBITDA 4,418 (653) 3,765 Depreciation (238) - (238) Amortisation of acquired intangibles (889) - (889) Amortisation of capitalised development costs (847) - (847) Exchange (losses)/gains (78) 7 (71) Finance costs (42) (351) (393) Finance income 2 - 2 Intercompany finance income/(costs) 128 (128) - --------------- -------- -------- Profit/(loss) before taxation 2,454 (1,125) 1,329 Taxation 84 (2) 82 --------------- -------- -------- Profit/(loss) for the year being attributable to owners of the parent 2,538 (1,127) 1,411
Geographic external revenue analysis
The revenue analysis in the table below is based on the geographical location of the customer for continuing operations of the business.
2020 2019 Total Total GBP000 GBP000 ---------------- --------- --------- By market UK & Europe 4,855 5,272 North America 842 982 Latin America 333 1,602 Middle East and Africa 2,114 3,114 Asia / Pacific 249 230 8,393 11,200 ---------------- --------- ---------
Net assets
The table below summarises the net assets of the Group by division. Balance sheet reporting is disclosed by the divisional assets and liabilities of the Group as this is consistent with the presentation of internal information provided to the Executive Management Board and the Board of Directors.
2020 2019 GBP000 GBP000 ---------------------- -------- -------- By division: Pebble Beach Systems 5,018 4,977 PLC costs (8,484) (9,819) (3,466) (4,842) ---------------------- -------- -------- 4. OPERATING PROFIT
The following items have been included in arriving at the operating profit for the continuing business:
2020 2019 GBP000 GBP000 ------------------------------------------------------ -------- -------- Depreciation of property, plant and equipment 234 238 Amortisation of acquired intangibles 156 889 Exchange (gains)/losses (credited)/charged to profit and loss (15) 71 Research and development expenditure expensed in the year which includes: 1,263 1,298 * Amortisation of capitalised development costs 815 847 ------------------------------------------------------ -------- -------- 5. FINANCE COSTS - NET 2020 2019 GBP000 GBP000 ------------------------------------------- --------- --------- Interest expense for bank borrowing 334 351 Interest expense for leasing arrangements 40 42 Finance costs 374 393 Finance income (1) (2) Finance costs - net 373 391 ------------------------------------------- --------- ---------
Finance income is derived from cash held on deposit.
6. INCOME TAX EXPENSE 2020 2019 GBP000 GBP000 --------------------------------------- -------- -------- Current tax UK corporation tax - - Foreign tax - current year 35 50 Adjustments in respect of prior years 11 - --------------------------------------- -------- -------- Total current tax 46 50 --------------------------------------- -------- -------- Deferred tax UK corporation tax (276) (132) Effect of changes in UK tax rate 26 - Adjustments in respect of prior years 5 - --------------------------------------- -------- -------- Total deferred tax (245) (132) --------------------------------------- -------- -------- Total taxation (199) (82) --------------------------------------- -------- --------
At Budget 2020, the government announced that the corporation tax rate for the years starting 1 April 2020 and 2021 would remain at 19 per cent. Deferred taxes at the balance sheet date have been measured using these enacted tax rates and reflected in these financial statements.
7. EARNINGS PER ORDINARY SHARE
Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.
For diluted earnings per share the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares. The dilutive shares are those share options granted to employees where the exercise price is less than the average market price of the Company's ordinary shares during the year. The average market value of the Company's shares for the purpose of calculating the dilutive effect of share options was based on quoted market prices for the year during which the options were outstanding.
Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below.
2020 2019 Weighted Weighted average average Earnings number Earnings number per Earnings of shares per share Earnings of shares share GBP000 000s pence GBP000 000s pence ----------------------------- --------- ----------- ----------- --------- ----------- ---------- Basic earnings per share Profit attributable to continuing operations 1,294 1.0p 1,411 1.1p Profit attributable to discontinued operations - 0.0p 39 0.0p ----------------------------- --------- ----------- ----------- --------- ----------- ---------- Basic earnings per share 1,294 124,477 1.0p 1,450 124,477 1.1p ----------------------------- --------- ----------- ----------- --------- ----------- ---------- Diluted earnings per share Profit attributable to continuing operations 1,294 1.0p 1,411 1.1p Profit attributable to discontinued operations - 0.0p 39 0.0p ----------------------------- --------- ----------- ----------- --------- ----------- ---------- Diluted earnings per share 1,294 126,862 1.0p 1,450 124,577 1.1p ----------------------------- --------- ----------- ----------- --------- ----------- ----------
Potential ordinary shares were non-dilutive in prior years because they would decrease the loss per share from continuing operations.
Adjusted earnings
The directors believe that adjusted EBITDA, adjusted earnings and adjusted earnings per share provide additional useful information on underlying trends to shareholders. These measures are used by management for internal performance analysis and incentive compensation arrangements. The term "adjusted" is not a defined term used under IFRS and may not therefore be comparable with similarly titled profit measurements reported by other companies. The principal adjustments are made in respect of the amortisation of acquired intangibles, share based payment expense, non-recurring items and exchange gains or losses charged to the income statement and their related tax effects. This definition has been updated this year and the comparative figure for 2019 is restated.
The reconciliation between reported and underlying earnings and basic earnings per share is shown below:
2020 2019 ---------------------------------------- ------------------- --- --------------- Earnings Earnings GBP000 GBP000 Pence Pence Reported profit per share 1,294 1.0p 1,450 1.1p Amortisation of acquired intangibles after tax 126 0.1p 738 0.6p Share based payment expense 12 0.0p 27 0.0p Exchange (gains)/losses (12) 0.0p 58 0.1p --------- ------- ----------- ---------- Adjusted profit per share - continuing operations 1,420 1.1p 2,261 1.8p ---------------------------------------- --------- ------- ----------- ---------- 8. CASH FLOW GENERATED FROM OPERATING ACTIVITIES
Reconciliation of profit before taxation to net cash flows from operating activities.
2020 2019 GBP000 GBP000 ----------------------------------------------------- -------- -------- Profit before tax - continuing operations 1,095 1,329 Profit before tax - discontinued operations - 39 ----------------------------------------------------- -------- -------- Total profit before tax 1,095 1,368 Depreciation of property, plant and equipment 234 238 Loss on disposal of property, plant and equipment - 1 Amortisation and impairment of development costs 815 847 Amortisation and impairment of acquired intangibles 156 889 Share-based payment expense 12 27 Finance income (1) (2) Finance costs 374 393 (Increase)/decrease in inventories (8) 70 Decrease/(increase) in trade and other receivables 343 (1,077) (Decrease)/Increase in trade and other payables (536) 36 Decrease in provisions - (367) ----------------------------------------------------- -------- -------- Net cash generated from operating activities 2,484 2,423 ----------------------------------------------------- -------- -------- 9. CALLED UP SHARE CAPITAL, SHARE PREMIUM AND CAPITAL REDEMPTION RESERVE Number of Share Share Premium Capital Total shares Capital redemption GBP000 reserve 000 GBP000 GBP000 GBP000 --------------------- ---------- --------- -------------- ------------ -------- At 1 January 2020 124,603 3,115 6,800 617 10,532 Share issues - - - - - At 31 December 2020 124,603 3,115 6,800 617 10,532 --------------------- ---------- --------- -------------- ------------ --------
10. NET FUNDS
Reconciliation of decrease in cash and cash equivalents to movement in net cash:
Net cash and Other Total cash equivalents borrowings net cash GBP000 GBP000 GBP000 ------------------------------------------ ------------------ ------------ ---------- At 1 January 2020 1,144 (9,550) (8,406) Cash flow for the year before financing 657 - 657 Movement in borrowings in the year (1,000) 1,000 - Exchange rate adjustments 25 - 25 Cash and cash equivalents at 31 December 2020 826 (8,550) (7,724) ------------------------------------------ ------------------ ------------ ----------
11. POST BALANCE SHEET EVENTS
On 10 March 2021, an extension of the current loan agreement was signed with our bank. The revision secures the facility until 30 November 2022, with reduced banking covenants and repayment schedules to reflect the current trading environment.
In the Spring Budget 2021, the Government announced that from 1 April 2023 the corporation tax rate would increase to 25 per cent. As the proposal to increase the rate to 25 per cent had not been substantively enacted at the balance sheet date, its effects are not included in these financial statements. However, it is likely that the overall effect of the change, had it been substantively enacted by the balance sheet date, would be no change to the tax charge for the period nor to the deferred tax liability.
The Board is pleased to confirm that following the publication of its audited results for the year ended 31 December 2020, the annual report and financial statements will be posted to shareholders by 21 May 2021 and a copy will also be available to download from the Group's website at www.pebbleplc.com.
Ends
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