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PTRO Pelatro Plc

1.02
0.00 (0.00%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Pelatro Plc LSE:PTRO London Ordinary Share GB00BYXH8F66 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% 1.02 0.80 1.20 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Pelatro PLC Half-year Report (3593A)

29/09/2020 7:00am

UK Regulatory


Pelatro (LSE:PTRO)
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From Mar 2019 to Mar 2024

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TIDMPTRO

RNS Number : 3593A

Pelatro PLC

29 September 2020

29 September 2020

Pelatro Plc

("Pelatro" or the "Group")

Interim results

New contract win

Pelatro Plc (AIM: PTRO), the precision marketing software specialist, is pleased to announce today its interim results for the 6 months ended 30 June 2020.

Financial highlights

   --             Revenue $2.29m (H1 2019: $2.71m) 
   --             Recurring revenue $1.53m (H1 2019: $0.84m), 67% of revenue (H1 2019: 31%) 
   --             Adjusted EBITDA(*) $0.66m (H1 2019: $0.81m) 
   --             EBITDA margin 29% 
   --             Adjusted earnings per share (0.6)c (H1 2019: 0.5c) 

-- Gross cash as at 30 June 2020 $0.75m (at 31 December 2019: $1.12m); approximately $2.7m received from debtors since FY19 end

Operational highlights

-- New contract win with an OpCo of an existing customer group - expansion within the group thereby strengthening our position further

-- mViva successfully installed at our largest customer site (350m subscribers) - a major milestone with respect to the maturity of our software

Post period end highlights

   --             Completed placing of 4.5m shares to raise GBP2.1m (pre expenses) 
   --             Gross cash at 31 August $3.16m 
   --             Current revenue visibility of $5m for full year 
   --             Plus a near-term pipeline of $15m, of which $4m is from existing customers 

New contract win

Pelatro also announces that it has expended its relationship with a large telco group, which is a customer of Pelatro, by winning a new contract from another opco within that group. This contract is expected to contribute about US$1.5m of revenue over a 5 year period and will add to our recurring revenue base.

Outlook

Management expectations for the year underpinned by:

   --             revenue visibility of $5m for full year (including $2.3m reported for first half) 

-- 2020 pipeline of $8m, of which of which $4m is from existing customers for various new modules and/or products, i.e. cross-selling opportunities where Pelatro is the only contender in most cases

Richard Day, Non-executive Chairman of Pelatro commented:

"Our interim results follow the equity fundraising we announced in August, in which we successfully raised GBP2.1m from new and existing shareholders to invest in sales and marketing and help fund our continuing organic growth.

These remain challenging times in world markets generally with the continuing Covid-19 pandemic; however, consumers are still using and relying on their mobile phones and we are working closely with our clients, the telcos, to ensure that the best service can be offered to their millions of users. We were able to announce today a new contract with the operating company of one of our existing companies. We continue to develop new and innovative products and our strategy remains focussed on increasing our Annual Recurring Revenue.

As with last year, we anticipate significant weighting of revenue towards our second half. We have had a good start to the second half and we have a strong pipeline from which we expect to be able to deliver revenue in line with expectations on the basis of license sales. However, we will continue to prefer gain share and managed service contracts where possible which give significantly higher returns to Pelatro over the contract length. With the pace of customer engagement picking up there remains a lot of work to be done but we are looking forward to the future with every confidence."

Analyst presentation

A copy of the results presentation provided to analysts will be available on Pelatro's website later today ( www.pelatro.com ).

For further information contact:

 
 Pelatro Plc 
 Subash Menon, Managing Director                          c/o Cenkos 
 Nic Hellyer, Finance Director 
 
 Cenkos Securities plc (Nominated Adviser 
  and Broker)                                    +44 (0)20 7397 8900 
 Stephen Keys / Cameron MacRitchie (corporate 
  finance) 
 Michael Johnson (sales) 
 

* earnings before interest, tax, depreciation, amortisation, exceptional items and share-based payments

Notes to editors

The Pelatro Group was founded in March 2013 by Subash Menon and Sudeesh Yezhuvath with the objective of offering specialised, enterprise class software solutions for customer engagement principally to telcos who face a series of challenges including market maturity, saturation and customer churn.

Pelatro provides its "mViva" platform for use by customers in B2C and B2B applications, and is well positioned in the Customer Engagement space. Our technology orchestrates the digital journey of the customers of the telcos through contextual, relevant and real time offers and loyalty programs across multiple channels including websites, social media, apps and others.

For more information about Pelatro, visit www.pelatro.com

Managing Director's statement

Engagements with existing customers like implementation and support are progressing well despite Covid-19. With respect to new contracts, while there have been Covid-19 related delays, we expect our overall win rate to remain the same. The additional level of scrutiny that businesses had introduced with respect to investments had lengthened the sales cycle over the past 6 months; however, we are now starting to experience positive movement with customers starting to release contracts and purchase orders. The contract win announcement from us today is a result of this positive movement. Consequently, given the level of the current pipeline, we are confident of achieving our order booking target for 2020.

Given that all our customers are telcos, we are delighted to note that their businesses, while impacted to some extent due to Covid-19, are quite resilient due to the higher level of usage of data by their consumers. Most businesses have moved online as have educational institutions and a variety of other activities. This move has resulted in considerable increase in data consumption by both individuals and enterprises leading to higher revenue from data products offered by telcos.

The new contract win announced today within a telco group, who is already our customer, considerably improves the value of that customer as a reference. As well as bringing valuable additional revenue, it acts as proof of further acceptance of mViva within that telco group. This success further solidifies Pelatro's position within the Customer Engagement space.

As noted in the announcement of the placing on 4 August, the Group intends to strengthen the sales team in both existing emerging and new developed markets. Interviews are already in progress to identify and appoint sales persons to cover both Europe and the Middle East/Africa.

Financial review

Revenue and profitability

In the six months to 30 June 2020 revenue decreased by 15% over the comparable period to $2.29m (H1 2019: $2.71m). Like many companies, we have experienced some delays as a result of Covid-19 but the Group remains confident that this is business will be picked up in the second half, which is the strongest period for us historically.

Of the $2.29m, approximately $1.53m (H1 2019: $0.84m) was recurring revenue, comprising managed services, post contract support and gain share income. Taking change requests of $0.34m into account, over 80% of revenue is now repeating in nature.

Underlying operating loss (excluding the impact of non-cash share-based payments, amortisation of customer-related intangible assets and exceptional items) was $0.43m (H1 2019: $0.20m profit). 32 extra staff have been employed to service our large managed services contract, although the majority of these were taken on after the period end.

Net cash and trade receivables

Cash generated from operating activities was approximately $1.18m after working capital movements (H1 2019: $0.34m). After net financing receipts of $0.81m (excluding approximately $93,000 relating to lease payments under IFRS 16) and capital expenditure of around $2.00m, gross cash at 30 June 2020 was approximately $0.75m. Financial debt (excluding IFRS 16 liabilities) was approximately $1.29m, giving net debt of approximately $0.54m (FY 2019: $0.69m net cash). Post period end, the Group completed a fundraising, raising GBP2.1m before expenses.

Short-term trade receivables (including unbilled revenue but excluding contract assets) as at 30 June 2020 were $4.80m (31 December 2019 $5.28m) .

Expenditure on non-current assets

Capitalised development expenditure was $1.21m (H1 2019: $1.11m) and the Group spent $0.79m on fixed assets, the vast majority of which was computer server equipment required to fulfil the significant managed service contract and which is already producing revenue. This was financed by way of a matching term loan.

Current trading and outlook

As with previous years we anticipate significant weighting of revenue towards the second half. The near term pipeline remains strong and the Group will continue to focus on transitioning this from "one time" revenue like license fees to "recurring revenue" which is more sustainable and predictable. In view of the changing economic scenario, telcos are increasingly exploring opex rather than capex solutions. This is naturally more conducive to our strategy and consequently our transition to recurring revenue is progressing unabated. We expect this trend to be in line with our expectations resulting in significant increase in recurring revenue. We are confident of recurring revenue, as a proportion of our total revenue, moving to more than 80% in the next couple of years.

Group statement of comprehensive income

 
                                                  6 months      6 months      Year to 
                                                      to            to        December 
                                                   30 June       30 June        2019 
                                                     2020          2019 
                                          Note      $'000         $'000        $'000 
                                                 (unaudited)   (unaudited)   (audited) 
 Revenue                                   2           2,291         2,714       6,667 
 Cost of sales and provision 
  of services                                          (667)         (634)       (999) 
                                                     _______       _______     _______ 
 Gross profit                                          1,624         2,080       5,668 
 
 Adjusted administrative expenses                    (1,738)       (1,879)     (4,048) 
                                                     _______       _______     _______ 
 Adjusted operating profit/(loss)                      (114)           201       1,620 
 Exceptional items                         3             149             -         236 
 Amortisation of acquisition-related 
  intangibles                              3           (342)         (349)       (686) 
 Share-based payments                      3            (27)          (49)        (52) 
                                                     _______       _______     _______ 
 Operating profit/(loss)                               (334)         (197)       1,118 
 Finance income                            4              37            20          54 
 Finance expense                           5           (106)          (85)       (164) 
                                                     _______       _______     _______ 
 Profit/(loss) before taxation                         (403)         (262)       1,008 
 Income tax credit/(expense)                            (36)             4       (194) 
                                                     _______       _______     _______ 
 PROFIT/(LOSS) FOR THE PERIOD                          (439)         (258)         814 
 
 Other comprehensive income/(expense): 
 Items that may be reclassified 
  subsequently to profit or loss: 
 Exchange differences                                     21             1        (25) 
                                                     _______       _______     _______ 
 Other comprehensive income, 
  net of tax                                              21             1        (25) 
 
 TOTAL COMPREHENSIVE INCOME/(LOSS) 
  FOR THE PERIOD                                       (418)         (257)         789 
 
 Earnings/(loss) per share 
 Reported 
 Basic and diluted                         6          (1.3)c        (0.8)c        2.5c 
 
 Adjusted 
 Basic and diluted                         6          (0.6)c          0.5c        4.2c 
 
 

Group statement of financial position

 
                                                As at         As at      As at 31 
                                               30 June       30 June      December 
                                                 2020          2019         2019 
                                      Note      $'000         $'000        $'000 
                                             (unaudited)   (unaudited)   (audited) 
 Assets 
 Non-current assets 
 Intangible assets                     7          11,132        10,648      10,891 
 Property, plant and equipment         8           1,220           408         515 
 Right-of-use assets                   9             240           420         339 
 Deferred tax assets                                  92             -          63 
 Contract assets                                     446           117         519 
 Trade and other receivables                         238           306         231 
                                                 _______       _______     _______ 
                                                  13,368        11,899      12,558 
 
 Current assets 
 Contract assets                                     246           304         293 
 Trade receivables                                 4,800         4,272       5,283 
 Other assets                                        576           425         501 
 Cash and cash equivalents                           749         1,118       1,101 
                                                 _______       _______     _______ 
                                                   6,371         6,119       7,178 
 
 Total assets                                     19,739        18,018      19,736 
 
 Liabilities 
 Non-current liabilities 
 Borrowings                            10          1,145           359         362 
 Lease liabilities                     11            104           260         187 
 Contract liabilities                                228           202         274 
 Long-term provisions                                113             -         124 
 Other financial liabilities           13              -         1,187           - 
                                                 _______       _______     _______ 
                                                   1,590         2,008         947 
 
 Current liabilities 
 Trade and other payables              12            892           356         523 
 Borrowings                            10            148            73         246 
 Lease liabilities                     11            171           224         205 
 Contract liabilities and deferred 
  revenue                                            337           257         665 
 Other financial liabilities           13            801             -         948 
                                                 _______       _______     _______ 
                                                   2,349           910       2,587 
 
 Total liabilities                                 3,939         2,918       3,534 
 
 NET ASSETS                                       15,800        15,100      16,202 
 
 Issued share capital and reserves 
 Share capital                                     1,065         1,065       1,065 
 Share premium                                    11,603        11,603      11,603 
 Other reserves                                    (606)         (668)       (643) 
 Retained earnings                                 3,738         3,100       4,177 
                                                 _______       _______     _______ 
 TOTAL EQUITY                                     15,800        15,100      16,202 
 

Group statement of cash flows

 
                                              6 months      6 months      Year to 
                                                  to            to        December 
                                               30 June       30 June        2019 
                                                 2020          2019 
                                                $'000         $'000        $'000 
                                             (unaudited)   (unaudited)   (audited) 
 Cash flows from operating activities 
 Profit/(loss) for the period                      (439)         (258)         814 
 Adjustments for: 
 Income tax expense/(credit) recognised 
  in profit or loss                                   45           (4)         194 
 Finance income                                     (37)          (20)        (54) 
 Finance costs                                        87            85         160 
 Depreciation of tangible non-current 
  assets                                             135           132         188 
 Amortisation of intangible non-current 
  assets                                             993           809       1,726 
 Fair value adjustment on contingent 
  consideration                                    (149)             -       (236) 
 Share-based payments                                 27            49          52 
 Foreign exchange (gains)/losses                       6           (6)         (8) 
                                                 _______       _______     _______ 
 Operating cash flows before movements 
  in working capital                                 668           787       2,836 
 (Increase)/decrease in trade and 
  other receivables                                  416         (402)     (1,509) 
 (Increase)/decrease in contract 
  assets                                             122          (38)       (428) 
 Increase/(decrease) in trade and 
  other payables                                     386         (230)         103 
 Increase in contract liabilities 
  and other deferred income                        (413)           220         701 
                                                 _______       _______     _______ 
 Cash generated from operating activities          1,179           337       1,703 
 
 Income tax paid                                   (110)          (96)       (334) 
                                                 _______       _______     _______ 
 Net cash generated from operating 
  activities                                       1,069           241       1,369 
 
 Cash flows from investing activities 
 Development of intangible assets                (1,210)       (1,111)     (2,102) 
 Purchase of intangible assets                       (3)          (12)        (35) 
 Acquisition of property, plant 
  and equipment                                    (791)          (78)       (256) 
                                                 _______       _______     _______ 
 Net cash used in investing activities           (2,004)       (1,201)     (2,393) 
 
 Cash flows from financing activities 
 Proceeds from borrowings                          1,117           276         317 
 Repayment of borrowings                           (301)         (300)       (313) 
 Repayments of principal on lease 
  liabilities                                       (93)          (88)       (171) 
 Finance income                                       37            20          54 
 Finance costs                                      (61)          (40)        (93) 
 Less interest accrued but not paid                   16             1           - 
 Interest expense on lease liabilities               (8)          (22)        (40) 
                                                 _______       _______     _______ 
 Net cash generated by/(used in) 
  financing activities                               707         (153)       (246) 
 
 Net increase/(decrease) in cash 
  and cash equivalents                             (228)       (1,113)     (1,270) 
 Net foreign exchange differences                   (43)             7        (20) 
 Cash and cash equivalents at beginning 
  of period                                          934         2,224       2,224 
                                                 _______       _______     _______ 
 Cash and cash equivalents at end 
  of period                                          663         1,118         934 
 
 Comprising: 
 Cash at bank and in hand                            749         1,118       1,101 
 Overdraft                                          (86)             -       (167) 
                                                 _______       _______     _______ 
                                                     663         1,118         934 
 

Group statement of changes in equity

 
                            Share     Share    Exchange   Merger   Share-based  Retained  Total 
                            capital   premium   reserve   reserve    payments    profits 
                                                                     reserve 
                            $'000     $'000     $'000     $'000       $'000      $'000    $'000 
Balance at 31 December 
 2018 as previously 
 reported                   1,065     11,603    (193)     (527)         -        3,414    15,362 
Effect of change of 
 accounting policy (IFRS 
 16)                          -         -         -         -           -         (51)     (51) 
                            _____     _____     _____     _____       _____      _____    _____ 
Balance at 31 December 
 2018 as restated           1,065     11,603    (193)     (527)         -        3,363    15,311 
(Loss) after taxation 
 for the period               -         -         -         -           -        (258)    (258) 
Share-based payments          -         -         -         -          49          -        49 
Other comprehensive 
 income: 
Exchange differences          -         -         4         -           -          -        4 
                            _____     _____     _____     _____       _____      _____    _____ 
Balance at 30 June 
 2019                       1,065     11,603    (189)     (527)        49        3,105    15,106 
Profit after taxation 
 for the period               -         -         -         -           -        1,072    1,072 
Share-based payments          -         -         -         -          51          -        51 
Other comprehensive 
 income: 
Exchange differences          -         -        (27)       -           -          -       (27) 
                            _____     _____     _____     _____       _____      _____    _____ 
Balance at 31 December 
 2019                       1,065     11,603    (216)     (527)        100       4,177    16,202 
Profit after taxation 
 for the period               -         -         -         -           -        (439)    (439) 
Share-based payments          -         -         -         -          50          -        50 
Other comprehensive 
 income: 
Exchange differences          -         -        (13)       -           -          -       (13) 
                            _____     _____     _____     _____       _____      _____    _____ 
Balance at 30 June 
 2020                       1,065     11,603    (229)     (527)        150       3,738    15,800 
 

Notes to the Group financial statements

   1              Basis of preparation 

The Group has prepared its interim financial statements for the 6 months ended 30 June 2020 (the "interim results") in accordance with the recognition and measurement principles of International Financial Reporting Standards ("IFRS") as adopted by the European Union and also in accordance with the recognition and measurement principles of IFRS issued by the International Accounting Standards Board, but do not include all the disclosures that would otherwise be required. They have been prepared under the historical cost convention as modified to include the revaluation of certain non-current assets. The accounting policies adopted in the interim financial statements are consistent with those adopted in the Group's Annual Report and Financial Statements for the year ended 31 December 2019 and those which will be adopted in the preparation of the annual report for the year ending 31 December 2020.

As permitted, the interim results have been prepared in accordance with the AIM Rules of the London Stock Exchange and not in accordance with IAS34 Interim Financial Reporting . They do not constitute full statutory accounts within the meaning of section 434 of the Companies Act 2006 and are unaudited.

Going concern

The Directors have considered trading and cash flow forecasts prepared for the Group, and based on these, and confirmed banking facilities, are satisfied that the Group will continue to be able to meet its liabilities as they fall due for at least one year from the date of these results. On this basis, they consider it appropriate to have adopted the going concern basis in the preparation of the interim results, which were approved by the Board of Directors on 28 September 2020.

Comparative financial information

The comparative financial information presented herein for the year ended 31 December 2019 does not constitute full statutory accounts for that period. Statutory accounts for the year ended 31 December 2019 have been filed with the Registrar of Companies. These statutory accounts carried an unqualified Auditor's Report, did not draw attention to any matters by way of emphasis and did not contain a statement under Section 498(2) or 498(3) of the Companies Act 2006.

   2              Segmental analysis 

Revenue by type

 
                                        6 months      6 months       Year to 
                                            to            to        31 December 
                                         30 June       30 June         2019 
                                           2020          2019 
                                          $'000         $'000         $'000 
                                       (unaudited)   (unaudited)    (audited) 
 
 Repeat software sales and services          1,148         1,316          3,114 
 Maintenance and support                       719           645          1,399 
                                           _______       _______        _______ 
 Total repeat revenues                       1,867         1,961          4,513 
 Software - new licenses                       424           498          1,887 
 Consulting                                      -           250            258 
 Resale of hardware                              -             5              9 
                                           _______       _______        _______ 
                                             2,291         2,714          6,667 
 

Revenue by geography

The Group recognises revenue in seven geographical regions based on the location of customers, as set out in the following table:

 
                        6 months      6 months       Year to 
                            to            to        31 December 
                         30 June       30 June         2019 
                           2020          2019 
                          $'000         $'000         $'000 
                       (unaudited)   (unaudited)    (audited) 
 
 Caribbean                      60           243            133 
 Central Asia                   32           206            256 
 Eastern Europe                 74            56             91 
 North Africa                   42            95            135 
 South Asia                    923         1,088          1,791 
 South East Asia             1,160           561          4,181 
 Sub-Saharan Africa              -           465             80 
                           _______       _______        _______ 
                             2,291         2,714          6,667 
 
   3              Non-GAAP profit measures and exceptional items 

Reconciliation of operating profit to earnings before interest, taxation, depreciation and amortisation ("EBITDA"):

 
                                       6 months      6 months       Year to 
                                           to            to        31 December 
                                        30 June       30 June         2019 
                                          2020          2019 
                                         $'000         $'000         $'000 
                                      (unaudited)   (unaudited)    (audited) 
 Operating profit/(loss)                    (334)         (197)          1,118 
 Adjusted for: 
  - amortisation and depreciation           1,091           940          1,915 
  - revenue recognised as interest 
   under IFRS 15                               22            14             43 
 Exceptional items: 
 - gain on adjustment of deferred 
  consideration liability                   (149)             -          (236) 
 Share-based payments                          27            49             52 
                                          _______       _______        _______ 
 Adjusted EBITDA                              657           806          2,892 
 

The criteria for adjusting operating income or expenses in the calculation of adjusted EBITDA are that they are material and either (i) arise from an irregular and significant event or (ii) are such that the income/cost is recognised in a pattern that is unrelated to the resulting operational performance. Materiality is defined as an amount which, to a user, would influence decision-making based on, and understandability of, the financial statements.

Exceptional items are treated as exceptional by reason of their nature and are excluded from the calculation of adjusted EBITDA (and adjusted earnings per share below) to allow a better understanding of comparable year-on-year trading and thereby an assessment of the underlying trends in the Group's financial performance. These measures also provide consistency with the Group's internal management reporting.

Adjustment for share-based payment expense is made because, once the cost has been calculated for a given grant of options, the Directors cannot influence the share-based payment charge incurred in subsequent years relating to that grant; also the value of the share option to the employee differs considerably in value and timing from the actual cash cost to the Group.

Elements of depreciation on right-to-use assets recognised under IFRS 16 and share-based payment expense are deemed to be directly attributable overheads for the purposes of capitalising relevant expenditure on developing intangible assets (see Note 18). The figures above are shown net of amounts so capitalised.

   4              Finance income 
 
                                             6 months      6 months       Year to 
                                                 to            to        31 December 
                                              30 June       30 June         2019 
                                                2020          2019 
                                               $'000         $'000         $'000 
                                            (unaudited)   (unaudited)    (audited) 
 Interest receivable on interest-bearing 
  deposits                                           15             6             11 
 Notional interest accruing on 
  contracts with a significant 
  financing component                                22            14             43 
                                                _______       _______        _______ 
 Total finance income                                37            20             54 
 
   5              Finance expense 
 
                                      6 months      6 months       Year to 
                                          to            to        31 December 
                                       30 June       30 June         2019 
                                         2020          2019 
                                        $'000         $'000         $'000 
                                     (unaudited)   (unaudited)    (audited) 
 
 Interest and finance charges 
  paid or payable on borrowings               79            40             96 
 Interest on lease liabilities 
  under IFRS 16                               15            22             40 
 Less: amounts capitalised as 
  intangible assets                          (7)             -           (19) 
 Acquisition-related financing 
  expense - unwinding of discount 
  on financial liabilities                    19            23             47 
                                         _______       _______        _______ 
 Total finance expense                       106            85            164 
 
   6              Earnings per share 

Earnings per share - reported ("EPS")

The calculation of the basic and diluted EPS is based on the following data:

 
                                          6 months     6 months      Year to 
                                             to           to        31 December 
                                           30 June      30 June        2019 
                                            2020         2019 
                                           $'000        $'000         $'000 
 Earnings 
 Earnings for the purposes of 
  basic and diluted earnings per 
  share being net profit attributable 
  to equity holders of the parent             (439)        (258)            814 
 
 Number of shares 
 Weighted average number of ordinary 
  shares for the purposes of basic 
  and diluted earnings per share         32,532,431   32,532,431     32,532,431 
 

The weighted average number of shares and the loss for the year for the purposes of calculating the fully diluted earnings per share are the same as for the basic loss per share calculation. This is because the outstanding share options would have the effect of reducing the loss per ordinary share and would therefore not be dilutive under IAS33.

Adjusted earnings per share

Adjusted EPS is calculated as follows:

 
                                           6 months     6 months      Year to 
                                              to           to        31 December 
                                            30 June      30 June        2019 
                                             2020         2019 
                                            $'000        $'000         $'000 
 Earnings attributable to owners 
  of the Parent                                (439)        (258)            814 
 Adjusting items: 
 - amortisation of acquisition-related 
  intangibles                                    343          349            686 
 - finance charge on liabilities 
  relating to 
  contingent consideration                        19           23             47 
  - exceptional items                          (149)            -          (236) 
 - share-based payments                           27           49             52 
 - prior year adjustments to 
  tax charge                                       -            -            (7) 
                                             _______      _______        _______ 
 Adjusted earnings attributable 
  to owners of the Parent                      (199)          163          1,356 
 
 Adjusted earnings per share 
  attributable to shareholders 
  (basic)                                     (0.6)c         0.5c           4.2c 
 
 Weighted number of ordinary 
  shares in issue                         32,532,431   32,532,431     32,532,431 
 Effect of dilutive potential 
  ordinary shares: 
  - in-the-money share options                     -        6,702              - 
                                            ________     ________       ________ 
 Weighted average number of ordinary 
  shares for the purposes of diluted 
  earnings per share                      32,532,431   32,539,133     32,532,431 
 
 Adjusted earnings per share 
  attributable to shareholders 
  (diluted)                                   (0.6)c         0.5c           4.2c 
 

The criteria for inclusion of adjusting items in the calculation of adjusted EPS are the same as those relating to the calculation of adjusted EBITDA as set out in Note 3. Additionally, finance expense on liabilities relating to contingent consideration are non-cash costs reflecting the time value of money in arriving at the fair value of such liabilities and the effluxion of time over the period for which they are outstanding; and amortisation of acquisition-related intangibles relates to the amortisation of intangible assets in respect of customer relationships and brands which are recognised on a business combination and are non-cash in nature.

The Group has one category of potentially dilutive ordinary share, being those share options granted to employees where the exercise price (plus the remaining expected charge to profit under IFRS 2) is less than the average price of the Company's ordinary shares during the period. The weighted average number of shares for the calculation of diluted earnings per share is computed using the treasury share method.

   7              Intangible assets 

Intangible assets comprise capitalised development costs, acquired software, customer relationships and goodwill.

 
                     Development     Third     Patents      Customer      Goodwill    Total 
                        costs        party                relationships 
                                    software 
                        $'000        $'000      $'000        $'000         $'000      $'000 
 Cost 
 At 1 January 
  2020                     6,391         108        23            6,862        470    13,854 
 Additions                 1,232           3         -                -          -     1,235 
 Foreign exchange              -         (2)         -                -          -       (2) 
                         _______     _______   _______          _______    _______   _______ 
 At 30 June 
  2020                     7,623         109        23            6,862        470    15,087 
 
 Amortisation 
  or impairment 
 At 1 January 
  2020                   (1,957)        (34)         -            (972)          -   (2,963) 
 Charge for 
  the period               (640)        (10)         -            (343)          -     (993) 
 Foreign exchange              -           1                          -          -         1 
                         _______     _______   _______          _______    _______   _______ 
 At 30 June 
  2020                   (2,597)        (43)         -          (1,315)          -   (3,955) 
 
 Net carrying 
  amount 
 At 30 June 
  2020                     5,026          66        23            5,547        470    11,132 
 
 At 1 January 
  2020                     4,434          74        23            5,890        470    10,891 
 
   8              Tangible assets 
 
                                   Leasehold      Computer      Office     Vehicles    Total 
                                  improvements    equipment    equipment 
                                     $'000         $'000        $'000       $'000      $'000 
 Cost 
 At 1 January 2020                         109          197           59        312       677 
 Additions                                   2          788            1          -       791 
 Foreign exchange differences              (4)         (14)          (4)       (17)      (39) 
                                       _______      _______      _______    _______   _______ 
 At 30 June 2020                           107          971           56        295     1,429 
 
 Depreciation 
 At 1 January 2020                         (7)         (87)          (9)       (59)     (162) 
 Charge for the year                       (6)         (26)          (6)       (18)      (56) 
 Foreign exchange differences                -            4            1          4         9 
                                       _______      _______      _______    _______   _______ 
 At 30 June 2020                          (13)        (109)         (14)       (73)     (209) 
 
 Net carrying amount 
 At 30 June 2020                            94          862           42        222     1,220 
 
 At 1 January 2020                         102          110           50        253       515 
 
   9              Right-of-use assets 

Right-of-use assets comprise leases over office buildings and vehicles

 
                                            Office     Vehicles    Total 
                                           buildings 
                                            $'000       $'000      $'000 
 Cost 
 At 1 January 2020                               690         31       721 
 Additions in the period                           -          -         - 
 Effects of foreign exchange movements          (44)        (2)      (46) 
                                             _______    _______   _______ 
 At 30 June 2020                                 646         29       675 
 
 Depreciation 
 At 1 January 2020                             (368)       (14)     (382) 
 Charge for the period                          (71)        (7)      (78) 
 Effects of foreign exchange movements            24          1        25 
                                             _______    _______   _______ 
 At 30 June 2020                               (415)       (20)     (435) 
 
 Net carrying amount 
 At 30 June 2020                                 231          9       240 
 At 1 January 2020                               322         17       339 
 
   10           Loans and borrowings 
 
                                   As at      As at     As at 31 
                                   30 June    30 June    December 
                                    2020       2019        2019 
                                   $'000      $'000       $'000 
 Non-current liabilities 
 Secured term loans                  1,145        359         362 
                                   _______    _______     _______ 
                                     1,145        359         362 
 Current liabilities 
 Current portion of term loans          62         73          79 
 Unsecured borrowings                   86          -         167 
                                   _______    _______     _______ 
                                       148         73         246 
 
 Total loans and borrowings          1,293        432         608 
 
   11           Lease liabilities 

Lease liabilities comprise liabilities arising from the committed and expected payments on leases over office buildings and vehicles .

 
 Amounts due in less than one year          Office     Vehicles    Total 
                                           buildings 
                                            $'000       $'000      $'000 
 At 1 January 2020                               193         12       205 
 Leases taken on in the period                     -          -         - 
 Repayments of principal                        (87)        (6)      (93) 
 Transfer from long-term to short-term            73          1        74 
 Effects of foreign exchange movements          (14)        (1)      (15) 
                                             _______    _______   _______ 
 At 30 June 2020                                 165          6       171 
 
 
 Amounts due in more than one year          Office     Vehicles    Total 
                                           buildings 
                                            $'000       $'000      $'000 
 At 1 January 2020                               186          1       187 
 Leases taken on in the period                     -          -         - 
 Transfer from long-term to short-term          (73)        (1)      (74) 
 Effects of foreign exchange movements           (9)          -       (9) 
                                             _______    _______   _______ 
 At 30 June 2020                                 104          -       104 
 
   12           Trade and other payables 
 
                                    As at      As at     As at 31 
                                    30 June    30 June    December 
                                     2020       2019        2019 
                                    $'000      $'000       $'000 
 Due within a year 
 Trade payables                          40         12          82 
 Other payables and provisions          852        344         441 
                                    _______    _______     _______ 
 Total trade and other payables         892        356         523 
 

Other payables includes amounts due in respect of the capital expenditure referenced in Note 8, which was paid in July as per the agreed payment milestones. Provisions reflect payment holidays granted (principally in the Group's Indian subsidiary) in respect of certain duties and taxes.

   13           Other financial liabilities 

Other financial liabilities comprise the fair value of payments due in respect of earnout payments resulting from the Danateq acquisition.

 
                                       As at      As at     As at 31 
                                       30 June    30 June    December 
                                        2020       2019        2019 
                                       $'000      $'000       $'000 
 Contingent consideration on the 
  acquisition of Danateq assets 
 - potentially due within one 
  year                                     801          -         948 
 - potentially after one year                -      1,187           - 
                                       _______    _______     _______ 
 Total other financial liabilities         801      1,187         948 
 

The amount owed to the vendors of Danateq had been agreed at $1m gross under the terms of the SPA. The net figure (paid earlier this month) was some $193,000 lower, being reduced by sums relating either to amounts paid by customers in advance to the former Danateq business but due to Pelatro, or amounts deductible under the terms of the SPA due to differences in outturn in disclosure items. The difference between the reporting date figure and the net payout is the imputed discount due to the time value of money.

   14           Post balance sheet events 

There have been no events subsequent to the reporting date which would have a material impact on these interim financial results.

[END]

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