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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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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 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
TIDMPTRO
RNS Number : 2052A
Pelatro PLC
22 September 2022
22 September 2022
Pelatro Plc
("Pelatro" or the "Group")
Interim results
Pelatro Plc (AIM: PTRO), the precision marketing software specialist, is pleased to announce today its results for the 6 months ended 30 June 2022.
Financial highlights
-- Revenue $4.19m (H1 2021: $3.46m), an increase of 21% -- Recurring revenue $2.41m (H1 2021: $2.43m), 58% of revenue -- Adjusted EBITDA(*) $1.87m (H1 2021: $1.61m) -- Adjusted EBITDA(*) margin 45% (FY 2021 39%) -- Adjusted earnings per share 0.2c (H1 2021: 0.9c)
Operational highlights
-- 3 new customers won this year to date -- Entry into financial services sector with a significant win
Post period end highlights
-- Further contract wins and change requests give visibility over at least c. $8.5m revenue for the full year
-- FY23 building steadily with over $6m of revenue already visible -- Cash receipts in July and August of c. $1.6m
Outlook
Management expectations for the year underpinned by:
-- Strong revenue visibility for full year and diversification into non telco verticals
-- Current pipeline ** of c.$19m, of which c. $3m is from existing customers
Richard Day, Non-executive Chairman of Pelatro commented:
"It is a measure of the progress we have made in implementing our strategy of moving from a licence fee model to being more a recurring revenues service provider that, with three months still to go this year, we already have visibility over 95% of our expected full year revenue. We have already announced the winning of two new telco customers plus one in financial services, and our cost base is now increasingly stable. We are picking up new business and are looking forward with every confidence."
For further information contact:
Pelatro Plc Subash Menon, Managing Director c/o finnCap Nic Hellyer, Chief Financial Officer finnCap Limited (Nominated Adviser and joint broker) +44 (0)20 7220 0500 Carl Holmes/Milesh Hindocha (Corporate Finance) Dowgate Capital Limited (joint broker) +44 (0)20 3903 7715 Stephen Norcross
* earnings before interest, tax, depreciation, amortisation, exceptional items and share-based payments
** "pipeline" is defined as opportunities where an RFI or RFP has been received and recurring revenue contracts are included as the sum of the likely revenue over 3 years in order to provide comparability with one-off license fee income
The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.
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
Our results in the first half of 2022 and trading to date reflect both the consolidation of our existing customer base as well as a healthy flow of new business which will ensure growth in the coming years. Given that our first customer was secured in 2016, a number of our typically five year contracts have been coming up for renewal in the last 12-18 months, and it is extremely pleasing to note that not one of our existing customers has sought to replace us, and in fact have sought to strengthen their relationship with us by requesting upgrades and change requests and/or additional software modules or services. All of these produce valuable income for us and embed Pelatro at the very heart of the customers' operations. The success of our mViva software in enabling users to increase their revenue; this is further demonstrated by the consistency of income from contracts where we take a share of the resulting gain by the customer. Additionally we regularly see mViva enabling significant reductions in subscriber churn.
We have also been expanding the range of industries we cover: having started serving solely the telecommunications sector, we have now secured contracts in the financial services sector and are closely tracking opportunities in retail, all data rich sectors where our powerful data analytics capabilities with advanced features like AI/machine learning technologies and real time engagement enable our customers to enhance, enrich and extend their relationships with their consumers.
We have worked hard to enhance the quality of our earnings such that the significant majority of our revenue is now recurring in nature and, whilst license sales are still an important contributor to revenue, even these are often structured on the basis of regular monthly payments (for example, the recent contract won with a Middle East telco with an initial value of around $1m payable over three years). This contract also demonstrates our strategy of securing relationships with members of large international telco groups where we can leverage off the success of initial implementations to enable us to market powerfully from "reference" customers.
Financial review
Revenue and profitability
In the six months to 30 June 2022 revenue increased by 21% over the comparable period to $4.19m (H1 2021: $3.46m). Of the total revenue, approximately $2.41m (H1 2021: $2.43m) was recurring revenue, comprising managed services, post contract support and gain share revenue, the slight fall being due to currency effects on INR-denominated revenue, the timing of certain services in one of our larger contracts, and recent recurring revenue contract wins coming onstream only in H2. Taking change requests of just under $1m into account some 81% of H1 revenue was repeating revenue, with the balance relating to license and other revenue.
Underlying operating profit (excluding the impact of non-cash share-based payments, amortisation of customer-related intangible assets) was $0.27m (H1 2021: $0.48m). Within this, underlying "cash" costs rose only marginally from $3.3m to $3.7m, reflecting both relatively stable staff numbers compared to the growth of previous years as well as some benefit of the strength of the US dollar (only around 10% of the Group's costs are incurred directly in USD with some 70% in INR, around 10% in GBP and the rest in other currencies). However, we recognised an increased amortisation charge on our capitalised development costs, where amortisation of c. $1.3m is now ahead of the capitalised spend of c. $1.2m.
Cash flow and trade receivables
Cash generated from operating activities was approximately $0.15m after working capital movements (H1 2021: $0.52m). This reduction compared to the prior period resulted from an increase in trade receivables to $5.59m (31 December 2021 $4.96m). Whilst part of this increase was due to increased revenue, some is also due to delays in payment arising from routine foreign exchange approvals needed by certain customers. These approvals usually take a considerable period of time, and such delays are not unexpected and always resolved in due course. We expect the majority of these receivables to unwind in H2 and hence the H1 cash flow is not representative of our expectations for the year as a whole: cash of $1.6m has been received in the months of July and August and a further $0.3m to date.
Capitalised development expenditure was $1.22m (H1 2021: $1.19m), again reflecting the relative stability in underlying numbers of the development team.
Current trading and outlook
Business has been improving significantly throughout the year with several new customers signing up for our products; in particular entry into the financial services sector has been a major step for us during the past few months. Our efforts in this sector have resulted in a strong pipeline getting built and we expect to win several new customers in the financial services sector in the coming quarters.
Revenue visibility for the full year reached around 95% of market forecasts earlier this month, which we view as a good measure of the momentum in the business. Given this traction, we expect to end 2022 with a strong base of recurring revenue and to start 2023 with excellent visibility for that year in turn. As in previous years, existing customers continue to take more products and services from us thereby increasing the annual revenue from them. Accordingly, we view our prospects for 2022 positively and look forward to further growth in years to come.
Group statement of comprehensive income
6 months 6 months Year to to to December 30 June 30 June 2021 2022 2021 Note $'000 $'000 $'000 (unaudited) (restated) (audited) Revenue 1 4,189 3,460 7,266 Cost of sales and provision of services (991) (968) (2,206) _______ _______ _______ Gross profit 3,198 2,492 5,060 Adjusted administrative expenses (2,926) (2,010) (4,831) _______ _______ _______ Adjusted operating profit 272 482 229 Amortisation of acquisition-related intangibles (343) (342) (686) Share-based payments (3) (15) (32) _______ _______ _______ Operating profit/(loss) (74) 125 (489) Finance income 3 17 23 44 Finance expense 4 (84) (110) (221) _______ _______ _______ Profit/(loss) before taxation (141) 38 (666) Income tax (expense) (134) (42) (181) _______ _______ _______ (LOSS) FOR THE PERIOD (275) (4) (847) Other comprehensive income/(expense): Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of foreign operations (126) (53) (82) Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of equity balances (80) (26) (15) _______ _______ _______ Other comprehensive income, net of tax (206) (79) (97) TOTAL COMPREHENSIVE (LOSS) FOR THE PERIOD (481) (30) (944) Earnings/(loss) per share Reported Basic and diluted 5 (0.6)c 0.0c (2.1)c Adjusted Basic and diluted 5 0.2c 0.9c (0.4)c
Group statement of financial position
As at As at As at 31 30 June 30 June December 2022 2021 2021 Note $'000 $'000 $'000 (unaudited) (restated) (audited) Assets Non-current assets Intangible assets 6 10,999 11,777 11,453 Tangible assets 811 1,095 982 Right-of-use assets 147 238 240 Deferred tax assets 16 16 14 Contract assets 7 1,257 461 606 Trade and other receivables 41 91 163 _______ _______ _______ 13,271 13,678 13,458 Current assets Contract assets 7 569 733 555 Trade receivables 5,550 3,716 4,793 Other assets 443 387 315 Cash and cash equivalents 1,647 784 3,331 _______ _______ _______ 8,209 5,620 8,994 Total assets 21,480 19,298 22,452 Liabilities Non-current liabilities Borrowings 8 396 1,031 608 Lease liabilities 12 117 80 Contract liabilities 211 139 278 Long-term provisions 10 178 149 202 _______ _______ _______ 797 1,436 1,168 Current liabilities Short-term borrowings 8 250 504 136 Lease liabilities 160 139 188 Trade and other payables 9 329 356 603 Contract liabilities 431 289 469 Provisions 10 168 198 72 _______ _______ _______ 1,338 1,486 1,468 Total liabilities 2,135 2,922 2,636 NET ASSETS 19,345 16,376 19,816 Issued share capital and reserves Share capital 1,501 1,212 1,501 Share premium 18,046 14,045 18,046 Other reserves (835) (611) (639) Retained earnings 633 1,730 908 _______ _______ _______ TOTAL EQUITY 19,345 16,376 19,816
Group statement of cash flows
6 months 6 months Year to to to 31 30 June 30 June December 2022 2021 2021 $'000 $'000 $'000 (unaudited) (restated) (audited) Cash flows from operating activities Profit/(loss) for the period (275) (182) (847) Adjustments for: Income tax expense/(credit) recognised in profit or loss 134 42 181 Finance income (17) (4) (44) Finance costs 84 107 221 Depreciation of tangible non-current assets 254 210 467 Profit on disposal of fixed assets - - (10) Amortisation of intangible non-current assets 1,677 1,266 2,814 Share-based payments 3 15 32 Realised foreign exchange (gains)/losses 15 10 9 _______ _______ _______ Operating cash flows before movements in working capital 1,875 1,464 2,823 (Increase)/decrease in trade and other receivables (732) (199) (1,271) (Increase)/decrease in contract assets (652) 173 206 Increase/(decrease) in trade and other payables (235) (623) (532) Increase in contract liabilities and other deferred income (104) (293) 45 _______ _______ _______ Cash generated from operating activities 152 522 1,271 Income tax paid (188) (191) (258) _______ _______ _______ Net cash generated from operating activities (36) 331 1,013 Cash flows from investing activities Development of intangible assets (1,220) (1,176) (2,540) Purchase of intangible assets - (3) (42) Acquisition of property, plant and equipment (16) (42) (88) _______ _______ _______ Net cash used in investing activities (1,236) (1,221) (2,670) Cash flows from financing activities Proceeds from issue of ordinary shares, net of issue costs - - 4,290 Proceeds from borrowings 2 226 70 Repayment of borrowings (62) (81) (748) Repayments of principal on lease
liabilities (118) (85) (173) Interest received 17 4 44 Interest paid (69) (125) (203) Interest expense on lease liabilities (16) (9) (25) _______ _______ _______ Net cash generated by/(used in) financing activities (246) (70) 3,255 Net increase/(decrease) in cash and cash equivalents (1,518) (960) 1,598 Net foreign exchange differences (166) (61) (72) Cash and cash equivalents at beginning of period 3,331 1,805 1,805 _______ _______ _______ Cash and cash equivalents at end of period 1,647 784 3,331
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 1 January 2021 1,212 14,045 (240) (527) 184 1,734 16,408 (Loss) after taxation for the period - - - - - (4) (4) Share-based payments - - - - 51 - 51 Other comprehensive income: Exchange differences - - (79) - - - (79) _____ _____ _____ _____ _____ _____ _____ Balance at 30 June 2021 1,212 14,045 (319) (527) 235 1,730 16,376 (Loss) after taxation for the period - - - - - (843) (843) Share-based payments - - - - 11 - 11 Transfer on lapse of share options (21) 21 - Other comprehensive income: Exchange differences - - (18) - - - (18) Transactions with owners: Shares issued by Pelatro Plc for cash 289 4,334 - - - - 4,623 Issue costs - (333) - - - - (333) _____ _____ _____ _____ _____ _____ _____ Balance at 31 December 2021 1,501 18,046 (337) (527) 225 908 19,816 (Loss) after taxation for the period - - - - - (275) (275) Share-based payments - - - - 10 - 10 Other comprehensive income: Exchange differences - - (206) - - - (206) _____ _____ _____ _____ _____ _____ _____ Balance at 30 June 2022 1,501 18,046 (543) (527) 235 633 19,345
Notes to the Group financial statements
1 Segmental analysis
Revenue by type
6 months 6 months Year to to to 31 December 30 June 30 June 2021 2022 2021 $'000 $'000 $'000 Recurring software sales and services 1,775 1,922 3,456 Maintenance and support 630 506 1,334 _______ _______ _______ Total recurring revenues 2,405 2,428 4,790 Change requests 978 1,009 1,958 _______ _______ _______ Total repeating revenues 3,383 3,437 6,748 Licence related income 798 23 498 Other income 8 - 20 _______ _______ _______ 4,189 3,460 7,266
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 2021 2022 2021 $'000 $'000 $'000 Caribbean 79 64 130 Central Asia 280 287 443 Eastern Europe 230 75 426 Middle East and North Africa 893 152 104 South Asia 1,552 1,102 2,656 South East Asia 1,147 1,780 3,407 Sub-Saharan Africa 8 - 100 _______ _______ _______ 4,189 3,460 7,266 2 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 2021 2022 2021 $'000 $'000 $'000 Operating profit/(loss) (74) 125 (489) Adjusted for: - amortisation and depreciation 1,926 1,450 3,227 _______ _______ _______ EBITDA 1,852 1,575 2,738 Other adjustments: - revenue recognised as interest under IFRS 15 17 19 38 Expensed share-based payments 3 15 32 _______ _______ _______ Adjusted EBITDA 1,872 1,609 2,808
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.
3 Finance income 6 months 6 months Year to to to 31 December 30 June 30 June 2021 2022 2021 $'000 $'000 $'000 (unaudited) (unaudited) (audited) Interest receivable on interest-bearing deposits - 4 6 Notional interest accruing on contracts with a significant financing component 17 19 38 _______ _______ _______ Total finance income 17 23 44 4 Finance expense 6 months 6 months Year to to to 31 December 30 June 30 June 2021 2022 2021 $'000 $'000 $'000 (unaudited) (unaudited) (audited) Interest and finance charges paid or payable on borrowings 68 101 202 Interest on lease liabilities under IFRS 16 16 13 25 Less: amounts capitalised as
intangible assets - (4) (6) _______ _______ _______ Total finance expense 84 110 221 5 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 2021 2022 2021 $'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 (275) (4) (847) Number of shares Weighted average number of ordinary shares for the purposes of basic and diluted earnings per share 45,407,431 37,032,431 41,153,537
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 2021 2022 2021 $'000 $'000 $'000 Earnings attributable to owners of the Parent (275) (4) (847) Adjusting items: - expensed share-based payments 3 15 32 - amortisation of acquisition-related intangibles 343 342 686 - prior year adjustments to tax charge - (18) (42) _______ _______ _______ Adjusted earnings attributable to owners of the Parent 71 335 (171) Weighted number of ordinary shares in issue 45.407,431 37,032,431 41,153,537 Adjusted earnings per share attributable to shareholders (basic and diluted) 0.2c 0.9c (0.4)c
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, amortisation of acquisition-related intangibles relates to the amortisation of intangible assets in respect of customer relationships 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.
6 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 2022 11,839 120 57 6,862 470 19,348 Additions 1,220 6 - - - 1,226 Foreign exchange - (4) - - - (4) _______ _______ _______ _______ _______ _______ At 30 June 2022 13,059 122 57 6,862 470 20,570 Amortisation or impairment At 1 January 2022 (5,478) (71) (2) (2,344) - (7,895) Charge for the period (1,317) (9) (7) (343) - (1,676) _______ _______ _______ _______ _______ _______ At 30 June 2022 (6,795) (80) (9) (2,687) - (9,571) Net carrying amount At 30 June 2022 6,264 42 48 4,175 470 10,999 At 1 January 2022 6,361 49 55 4,518 470 11,453 7 Contract assets
Contract assets are comprised as follows:
As at As at As at 31 30 June 30 June December 2022 2021 2021 $'000 $'000 $'000 Due after one year Contract assets relating to revenue 972 98 227 Contract fulfilment assets 285 363 379 _______ _______ _______ 1,257 461 606 Due within one year Contract assets relating to revenue 380 581 375 Contract fulfilment assets 189 152 180 _______ _______ _______ 569 733 555 8 Loans and borrowings As at As at As at 31 30 June 30 June December 2022 2021 2021 $'000 $'000 $'000 Non-current liabilities Secured term loans 10 237 23 Unsecured borrowings 386 794 585 _______ _______ _______ 396 1,031 608 Current liabilities Current portion of term loans 15 138 11 Unsecured borrowings 235 366 125 _______ _______ _______ 250 504 136 Total loans and borrowings 646 1,535 744 9 Trade and other payables As at As at As at 31 30 June 30 June December 2022 2021 2021 $'000 $'000 $'000 Due within a year Trade payables 151 30 152 Other payables 178 326 451 _______ _______ _______ Total trade and other payables 329 356 603 10 Provisions Long-term As at As at As at 31 30 June 30 June December 2022 2021 2021 $'000 $'000 $'000 Employee gratuities 132 108 141 Leave encashment 46 41 61 _______ _______ _______ 178 149 202 Short-term As at As at As at 31 30 June 30 June December 2022 2021 2021 $'000 $'000 $'000 Employee gratuities 7 12 7 Leave encashment 22 17 30 Other provisions (including tax) 139 169 35 _______ _______ _______ 168 198 72 11 Post balance sheet events
Other than disclosed above there have been no events subsequent to the reporting date which would have a material impact on these interim financial results.
Basis of preparation
The Group has prepared its interim financial statements (the "statements") for the 6 months ended 30 June 2022 (the "interim results") in accordance with the AIM Rules of the London Stock Exchange and not in accordance with IAS34 Interim Financial Reporting; the statements are prepared in accordance with the recognition and measurement principles of International Accounting Standards in conformity with the requirements of the Companies Act 2006, but do not include all the disclosures that would otherwise be required
The statements have been prepared under the historical cost convention. The accounting policies adopted in the statements are consistent with those adopted in the Group's Annual Report and Financial Statements for the year ended 31 December 2021 and those which will be adopted in the preparation of the annual report for the year ending 31 December 2022. The statements 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 21 September 2022.
Comparative financial information
The comparative financial information presented herein for the year ended 31 December 2021 does not constitute full statutory accounts for that period. Statutory accounts for the year ended 31 December 2021 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. The accounts for the 6 months to 30 June 2021 have been restated to reflect a reallocation of amortisation expense on capitalised development costs resulting from a revised assessment of amortisation costs undertaken as part of the review of the financial results for the year ended 31 December 2021. The resulting adjustment to amortisation expense has not effected either the 30 June 2021 cash position or the full year results.
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September 22, 2022 02:00 ET (06:00 GMT)
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