TIDMBIG
RNS Number : 8086M
Big Technologies PLC
19 September 2023
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
Big Technologies PLC
("the Company" or "the Group")
Unaudited interim results for the six months ended 30 June
2023
Big Technologies PLC (AIM: BIG), the leading, integrated
technology platform for the remote monitoring of individuals, is
pleased to announce its interim results for the six-month period to
30 June 2023 (the "period").
GBPm (unless otherwise stated) H1 2023 H1 2022 FY 2022
Revenue 27.3 22.9 50.2
Gross margin (%) 73.3% 71.4% 72.5%
Statutory operating profit 8.2 8.8 20.6
Adjusted operating profit(1) 13.9 12.1 27.1
Adjusted EBITDA(2) 16.1 13.7 30.5
Adjusted EBITDA(2) margin
(%) 59.1% 60.1% 60.7%
Cash generated from operating
activities 12.4 11.3 25.7
Net cash 75.4 56.9 66.8
------------------------------------- --------- --------- ---------
Pence Pence Pence
Adjusted diluted earnings
per share(3) 4.3p 3.7p 8.1p
Adjusted basic earnings per
share(3) 4.6p 3.9p 8.6p
Statutory diluted earnings
per share 2.9p 3.0p 6.5p
Statutory basic earnings per
share 3.1p 3.1p 6.9p
(1) Before share-based payments charge and amortisation
of acquired intangibles.(2) Before share-based payments
charge. (3) Before share-based payments charge, amortisation
of acquired intangibles and the tax effect of these adjusting
items.
A reconciliation to statutory measures is presented in
the notes to the unaudited interim results.
Financial highlights
-- Revenue increased by 19% in H1 2023 driven by new contract
wins and an increase in revenues earned from existing
customers;
-- Gross margin increased by 190 bps to 73.3% in H1 2023 as a
result of the revenue growth and the scalable operating model;
-- Adjusted EBITDA of GBP16.1m in H1 2023 with adjusted EBITDA
margin of 59.1%. The Group has been impacted by adverse foreign
currency movements in the period;
-- Cash generated from operating activities of GBP12.4m in H1
2023, delivered by the positive trading performance in the
period;
-- Significant net cash balance of GBP75.4m at 30 June 2023,
underpinning a very strong balance sheet.
Operational highlights
-- Continuation of growth in the number of electronic monitoring
devices deployed with customers across the world;
-- Made good progress against delivering the future product
roadmap with a number of new products in the final stages of
development;
-- Continued our engagement with potential new customers across
Europe and the rest of the world.
Summary and outlook
-- The Group remains well positioned with the financial
resources in place to provide continued flexibility to invest in
the business and to take advantage of the value-enhancing
opportunities that are expected to materialise in the coming
years;
-- The Group continues to benefit from high levels of recurring
revenue and the Board has good revenue visibility for the second
half of the year and is confident of continued cash generation;
-- Assuming no further strengthening in sterling over the second
half of the year and no new contract wins, the Board expects the
Group to deliver full-year revenue of approximately GBP54m with an
adjusted EBITDA margin of around 60%, which is at the lower end of
current market expectations(1) .
(1) Latest company compiled view of market expectations show
adjusted EBITDA of GBP32.7m to GBP34.7m (stated before share-based
payments).
Commenting on the results, Sara Murray OBE, Chief Executive
Officer said:
"We have delivered pleasing revenue and profit performance
during the first half of the financial year, clearly illustrating
our proven, resilient and cash-generative business model. We
continued to support new and existing customers with our product
offering, helping to keep societies and communities safe around the
world. We have a pipeline of exciting new products in the final
stages of development and expect to release these to customers in
the second half of the year. The demand for all our products
remains strong and the solid foundations on which our business is
built, means it is well positioned with the financial resources in
place to take advantage of value-enhancing opportunities as they
arise."
For further information please contact:
Big Technologies +44 (0) 19 2360 1910
Sara Murray (Chief Executive Officer)
Daren Morris (Chief Financial Officer)
Zeus (Nominated Adviser and Sole Broker) +44 (0) 20 3829 5000
Jamie Peel / Dan Bate / Kieran Russell (Investment
Banking)
Benjamin Robertson (Equity Capital Markets)
The person responsible for arranging the release of this
information is Daren Morris, Chief Financial Officer and Company
Secretary.
Half Year Review
Overview
The Group has continued to deliver revenue and profit growth in
the first half of 2023, showing the resilience of its
cash-generative business model despite the persistence of uncertain
global macroeconomic conditions.
Financial Performance
Revenue
Revenue in the first half of 2023 grew by 19% to GBP27.3m (H1
2022: GBP22.9m), driven by new contract wins in the Asia-Pacific
and European regions and an increase in revenues earned from
existing customers. The majority of revenues continue to be derived
from customers in the criminal justice sector, which accounts for
99% of reported revenue (H1 2022: 98%).
Revenue growth was primarily driven by the Asia-Pacific and
European regions, which grew at 27% and 44% respectively. The
Group's eight-year national monitoring contract with the New
Zealand Department of Corrections has now achieved its full
run-rate and there were contract wins in Europe. Reported revenue
in the Americas region declined due to strengthening sterling, but
grew by 2% on a constant currency basis.
The Group has been impacted by adverse foreign currency
movements in the period with sterling strengthening against the US
dollar, Australian dollar and New Zealand dollar, the Group's main
sales currencies. On a constant currency basis, revenue would have
been GBP0.4m higher than reported if exchange rates had remained
the same as H1 2022 and GBP0.8m higher than reported if exchange
rates had remained the same as H2 2022.
Profitability
Gross profit increased by 22% to GBP20.0m (H1 2022: GBP16.3m),
with gross margin increasing by 190 bps to 73.3% (H1 2022: 71.4%)
as a result of the revenue growth and the Group's scalable
operating model, which allows for the deployment of additional
electronic monitoring devices to customers with increased
efficiency. Profits earned on incremental revenues were able to
offset increases in labour, freight and manufacturing costs caused
by the high inflationary environment.
Adjustments made to the interim financial results before tax
were GBP5.7m (H1 2022: GBP3.3m) and are for the amortisation of
acquired intangible assets and share-based payments. See note 3 for
further details.
Adjusted operating profit of GBP13.9m increased by 15% against
H1 2022, with a decrease in adjusted operating margin to 51.1% (H1
2022: 52.9%). The decrease in adjusted operating margin was
primarily driven by adverse foreign currency movements in the first
half of 2023 as sterling strengthened against the Group's main
sales currencies. Foreign currency movements in the first half of
2022 were positive due to a one-off gain on the revaluation of US
Dollar denominated cash deposits.
Adjusted administrative expenses (defined as administrative
expenses before share-based payments and amortisation of acquired
intangible assets) increased from GBP4.2m in H1 2022 to GBP6.1m in
H1 2023 due to adverse foreign currency movements (as stated above,
a one-off gain in H1 2022 from the revaluation of our US dollar
cash deposits resulted in a credit to administrative expenses, in
that period). When the impacts of foreign currency movements are
excluded, adjusted administrative expenses were the same in both
periods.
Adjusted EBITDA
Adjusted EBITDA, which provides a more consistent comparison of
trading between financial periods, increased by 17% to GBP16.1m (H1
2022: GBP13.7m), with adjusted EBITDA margin decreasing by 100 bps
to 59.1% (H1 2022: 60.1%). The decrease in adjusted EBITDA margin
was primarily driven by the adverse foreign currency movements
discussed above.
Taxation
The Group's total tax charge for the period (including deferred
taxes) was GBP0.1m (H1 2022: GBP0.2m credit), an effective tax rate
of 0.6% (H1 2022: (2.8)%). The Group's effective tax rate is
affected by a number of factors including the recognition of
deferred tax assets in relation to share-based payments and the tax
deductibility of exercised employee share awards. The Group also
benefits from allowances claimed for research and development and
the UK Patent Box. The Group's current tax charge for the period
was GBP1.5m (H1 2022: GBP0.8m), an effective tax rate of 16.6% (H1
2022: 9.0%).
Earnings per share
Adjusted diluted earnings per share (EPS), which excludes
adjusting items and their associated tax effect as well as the
dilutive impact of shares issuable in the future, was 4.3p (H1
2022: 3.7p), reflecting the underlying profitability of the Group.
Adjusted basic EPS, which excludes adjusting items and their
associated tax effect was 4.6p (H1 2022: 3.9p). Diluted EPS, which
includes the dilutive impact of shares issuable in the future, was
2.9p (H1 2022: 3.0p). Basic EPS was 3.1p (H1 2022: 3.1p). The
dilutive impact of shares issuable in the future relates to the
expected settlement of the Group's employee share scheme
obligations.
Cash generation
The Group increased its net cash balances (defined as cash and
cash equivalents less lease liabilities) to GBP75.4m (H1 2022:
GBP56.9m) at 30 June 2023. The Group generated GBP12.4m (H1 2022:
GBP11.3m) in cash from operations (before paying tax) despite
recording a GBP3.7m (H1 2022: GBP2.9m) net working capital outflow.
The cash conversion rate (defined as percentage of adjusted EBITDA
converted to cash from operations) decreased from 82.2% to 77.0% of
adjusted EBITDA.
Levels of inventory increased in the period and the Group now
holds sufficient components (absent a major contract win in H2
2023) to support new and existing customers. Decreases in trade and
other payables reflect supplier payment timing differences and a
reduction in accruals, provisions and deferred income balances.
Taxation payments for the period were GBP1.9m (H1 2022:
GBP0.4m). Taxation payments in H1 2022 are net of historic tax
refunds totaling GBP0.8m.
Net cash utilised in investing activities of GBP1.8m (H1 2022:
GBP2.4m) reflects the continued increase in the number of
electronic monitoring devices, which are manufactured in-house and
leased to customers. The Group continued to invest in research and
development activities and also benefitted from increased interest
income, reflecting interest earned on its cash balances at
improving interest rates.
Cash outflows from financing activities of GBP0.1m (H1 2022:
GBP0.2m inflow) reflect the proceeds received from the exercise of
employee share options in the period, offset by the repayment of
lease liabilities.
Operational performance
The Group delivered a robust operational performance in the
first half of 2023 and continued to increase its international
footprint and global presence in the criminal justice sector
through contract wins in new territories and an increase in
revenues earned from existing customers.
The Group's national monitoring contract with the New Zealand
Department of Corrections is now fully operational and delivering
revenue at its full run-rate. The Group received positive feedback
from the customer in New Zealand on its partnership approach.
The Group is committed to ensuring that its products maintain
their competitive advantage in the criminal justice sector and
therefore continues to invest in research and development to
support its future product roadmap. This roadmap includes the
development of substance detection technologies, as well as further
location solutions, to provide an integrated monitoring offering
for our customers and future customers. Initial feedback from
customers on these new solutions is positive.
The Group continues to pursue an active pipeline of organic
growth opportunities in the criminal justice sector with
governmental customers across Europe and the rest of the world.
Alternative performance measures
In the analysis of the Group's financial performance and
position, operating results and cash flows, alternative performance
measures are presented to provide readers with additional
information. The principal measures presented are adjusted measures
of earnings including adjusted operating profit, adjusted EBITDA
and adjusted earnings per share. See notes 3 and 5 for further
details.
Research and development
Research and development (R&D) activities remain a priority
for the Group to ensure its products retain their competitive
advantage. Development costs of GBP0.5m (H1 2022: GBP0.5m) have
been capitalised. Total R&D costs expressed as a percentage of
adjusted administrative expenses stood at 26% (H1 2022: 30%).
Foreign currency exposure
The Group faces currency exposure on its foreign currency
transactions and translation exposure in relation to its overseas
subsidiaries. The Group maintains a natural hedge to transactional
exposure by matching the cash inflows and outflows in the
respective currencies wherever possible.
In H1 2023, the proportion of revenue earned in currencies other
that sterling was 85.1% (H1 2022: 85.0%).
Foreign exchange translation has provided a headwind for revenue
and profit during the period (H1 2022: tailwind), with sterling
strengthening against the Group's main sales currencies compared
with comparative periods.
The Group's most material exposures are to US dollars,
Australian dollars and New Zealand dollars. The sensitivity to a
10% weakening/strengthening of sterling against these currencies in
aggregate (excluding amounts held on the balance sheet) equates to
an annualised profit increase (or decrease) of approximately
GBP2.4m. The Group's forward currency exposure is currently
unhedged.
Litigation
Legal proceedings have commenced against the Group with a claim
being filed with the High Court of Justice in England and Wales in
August 2023. As set out within the admission document in July 2021
(the "Admission Document"), a letter of potential claim had been
received from a small number of former shareholders of Buddi
Limited, one of the subsidiaries of the Group, in respect of the
acquisition of Buddi Limited, dating back to May 2018. The Group
has taken advice from its lawyers and from King's Counsel and
remains of the view that the Claim lacks legal and factual merit
and intends to defend its position robustly.
Summary and outlook
The Group has delivered a positive financial and operational
performance in the first half of the year. The Board anticipates
that revenue and profit will be more evenly weighted across the two
halves of the year compared with previous years, and assuming no
further strengthening in sterling over the second half of the year
and no new contract wins, expects to deliver full-year revenue of
approximately GBP54m with an adjusted EBITDA margin of around 60%,
which is at the lower end of current market expectations(1) .
The Group continues to benefit from high levels of recurring
revenue and has good revenue visibility for the second half of the
year.
(1) Latest company compiled view of market expectations show
adjusted EBITDA of GBP32.7m to GBP34.7m (stated before share-based
payments).
Sara Murray OBE Daren Morris
Chief Executive Officer Chief Financial Officer
19 September 2023 19 September 2023
Unaudited condensed consolidated statement of comprehensive
income
for the six months ended 30 June 2023
Unaudited Unaudited Year ended
six months six months 31 December
ended 30 ended 30 2022
June 2023 June 2022
GBP'000
GBP'000 GBP'000
Note
Revenue 2 27,261 22,862 50,164
Cost of sales (7,270) (6,530) (13,781)
------------ ------------ -------------
Gross profit 19,991 16,332 36,383
Administrative expenses (11,806) (7,494) (15,800)
Other operating income 7 1 7
------------ ------------ -------------
Operating profit 8,192 8,839 20,590
Analysed as:
------------------------------------ ----- ------------ ------------ -------------
Adjusted EBITDA 16,107 13,742 30,465
Amortisation of acquired
intangibles (234) (234) (468)
Amortisation of development
costs (450) (404) (806)
Depreciation (1,740) (1,241) (2,545)
Share-based payments charge (5,491) (3,024) (6,056)
------------------------------------ ----- ------------ ------------ -------------
Operating profit 8,192 8,839 20,590
Finance income 881 39 449
Finance expenses (25) (17) (42)
Share of loss of joint venture - (2) (2)
------------ ------------ -------------
Profit before taxation 9,048 8,859 20,995
Taxation 4 (56) 244 (1,033)
------------ ------------ -------------
Profit for the period 8,992 9,103 19,962
------------ ------------ -------------
Other comprehensive (expense)
/ income:
Exchange differences on
translation of foreign operations (231) 264 139
------------ ------------ -------------
Total comprehensive income
for the period 8,761 9,367 20,101
============ ============ =============
Basic earnings per share
(pence) 5 3.1p 3.1p 6.9p
Diluted earnings per share
(pence) 5 2.9p 3.0p 6.5p
Unaudited condensed consolidated statement of financial
position
as at 30 June 2023
Unaudited Unaudited 31 December
30 June 30 June 2022
2023 2022
GBP'000
GBP'000 GBP'000
Note
Assets
Goodwill 13,359 13,359 13,359
Acquired and other intangible
assets 5,815 6,039 6,000
Property, plant and equipment 4,498 3,026 4,178
Right-of-use assets 597 314 705
Deferred tax assets 6,576 2,079 3,725
Other receivables 1,574 1,702 1,684
---------- ---------- ------------
Non-current assets 32,419 26,519 29,651
Inventories 8,856 5,862 6,823
Trade and other receivables 9,192 8,007 9,222
Cash and cash equivalents 6 75,973 57,170 67,474
---------- ---------- ------------
Current assets 94,021 71,039 83,519
Total assets 126,440 97,558 113,170
========== ========== ============
Liabilities
Lease liabilities 170 205 247
Trade and other payables 6,465 8,812 8,153
Provisions 539 - 800
---------- ---------- ------------
Current liabilities 7,174 9,017 9,200
Lease liabilities 425 108 460
Deferred tax liabilities 368 498 412
Trade and other payables 280 879 625
---------- ---------- ------------
Non-current liabilities 1,073 1,485 1,497
Total liabilities 8,247 10,502 10,697
========== ========== ============
Net assets 118,193 87,056 102,473
========== ========== ============
Equity
Share capital 7 2,905 2,902 2,904
Share premium 39,068 38,969 39,031
Other reserves 183 539 414
Retained earnings 76,037 44,646 60,124
---------- ---------- ------------
Total equity 118,193 87,056 102,473
========== ========== ============
Unaudited condensed consolidated statement of changes in
equity
for the six months ended 30 June 2023
Share capital Share premium Other reserves Retained earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 equity
GBP'000
Balance at 1 January 2022 2,885 38,535 275 32,536 74,231
Profit for the year - - - 19,962 19,962
Other comprehensive income for the
year - - 139 - 139
-------------- -------------- --------------- ------------------ ----------
Total comprehensive income for the
year - - 139 19,962 20,101
Share-based payments - - - 6,026 6,026
Deferred tax on share-based payments - - - 1,600 1,600
Issue of shares, net of share issue
costs 19 496 - - 515
-------------- -------------- --------------- ------------------ ----------
Balance at 31 December 2022 2,904 39,031 414 60,124 102,473
============== ============== =============== ================== ==========
Balance at 1 January 2022 2,885 38,535 275 32,536 74,231
Profit for the period - - - 9,103 9,103
Other comprehensive income for the
period - - 264 - 264
-------------- -------------- --------------- ------------------ ----------
Total comprehensive income for the
period - - 264 9,103 9,367
Share-based payments - - - 3,007 3,007
Issue of shares, net of share issue
costs 17 434 - - 451
-------------- -------------- --------------- ------------------ ----------
Balance at 30 June 2022 2,902 38,969 539 44,646 87,056
============== ============== =============== ================== ==========
Balance at 1 January 2023 2,904 39,031 414 60,124 102,473
Profit for the period - - - 8,992 8,992
Other comprehensive expense for the period - - (231) - (231)
-------- --------- -------- --------- ----------
Total comprehensive income for the period - - (231) 8,992 8,761
Share-based payments - - - 5,467 5,467
Deferred tax on share-based payments - - - 1,454 1,454
Issue of shares, net of share issue costs 1 37 - - 38
-------- --------- -------- --------- ----------
Balance at 30 June 2023 2,905 39,068 183 76,037 118,193
======== ========= ======== ========= ==========
Unaudited condensed consolidated statement of cash flows
for the six months ended 30 June 2023
Unaudited Unaudited Year
six months six months ended 31
ended 30 ended 30 December
June 2023 June 2022 2022
GBP'000 GBP'000 GBP'000
Note
Cash flows from operating
activities
Profit before tax 9,048 8,859 20,995
Adjustments for:
Depreciation of property,
plant and equipment 1,633 1,142 2,328
Depreciation of right-of-use
assets 107 99 217
Amortisation of intangible
assets 684 638 1,274
Share of loss of joint venture - 2 2
Investment write-down - 426 426
Share-based payments expense 8 5,467 3,007 6,026
Finance income (881) (39) (449)
Finance expenses 25 17 42
Changes in:
Inventories (2,033) (2,783) (3,744)
Trade and other receivables 247 (1,444) (2,986)
Trade and other payables (1,626) 1,367 794
Provisions (261) - 800
------------ ------------ ----------
Cash generated from operating
activities 12,410 11,291 25,725
Taxes paid (1,911) (409) (1,801)
------------ ------------ ----------
Net cash flows from operating
activities 10,499 10,882 23,924
============ ============ ==========
Cash flows from investing
activities
Purchase of property, plant
and equipment (202) (35) (142)
Own work capitalised (1,750) (1,867) (4,098)
Capitalised development costs (499) (535) (1,132)
Interest received 604 39 295
------------ ------------ ----------
Net cash used in investing
activities (1,847) (2,398) (5,077)
============ ============ ==========
Cash flows from financing
activities
Proceeds from issues of shares 7 39 362 515
Repayment of lease liabilities (125) (109) (238)
Interest paid (13) (12) (25)
------------ ------------ ----------
Cash flows from financing
activities (99) 241 252
============ ============ ==========
Net increase in cash and
cash equivalents 8,553 8,725 19,099
Cash and cash equivalents
at the beginning of the period 67,474 48,317 48,317
Effects of exchange rate
changes on cash and cash
equivalents (54) 128 58
------------ ------------ ----------
Cash and cash equivalents
at the end of the period 6 75,973 57,170 67,474
============ ============ ==========
Notes to the unaudited condensed interim consolidated financial
statements
For the six months ended 30 June 2023
1. General information and basis of preparation
Big Technologies PLC is a public limited company incorporated in
the United Kingdom, listed on the Alternative Investment Market
('AIM') of the London Stock Exchange. The Company is domiciled in
the United Kingdom and its registered office is Talbot House, 17
Church Street, Rickmansworth, WD3 1DE. The unaudited interim
consolidated financial statements comprise the Company and its
subsidiaries (together referred to as the 'Group').
The principal activity of the Group is the development and
delivery of remote monitoring technologies and services to a range
of domestic and international customers.
The Directors confirm that, to the best of their knowledge, the
interim financial statements have been prepared in accordance with
IAS 34 'Interim Financial Reporting' as adopted by the United
Kingdom and the AIM Rules for Companies, and that the interim
report includes a fair review of the information required.
The condensed interim financial statements should be read in
conjunction with the Group's latest annual consolidated financial
statements, for the year ended 31 December 2022.
These interim financial statements do not include all of the
information required for a complete set of financial statements
prepared in accordance with IFRS Standards. However, selected
explanatory notes are included to explain events and transactions
that are significant to an understanding of the changes in the
Group's financial position and performance since the last annual
consolidated financial statements.
The financial information provided for the six-month period
ended 30 June 2023 is unaudited, however, the same accounting
policies, presentation and methods of computation have been
followed in these interim financial statements as those which were
applied in the preparation of the Group's annual consolidated
financial statements for the year ended 31 December 2022.
These interim financial statements do not constitute statutory
accounts as defined in section 434 of the Companies Act 2006. A
copy of the most recent statutory accounts for the year ended 31
December 2022 has been delivered to the Registrar of Companies. The
auditor's report on these accounts was unqualified and did not
contain a statement under section 498 of the Companies Act
2006.
These interim financial statements were authorised for issue by
the Company's board of directors on 19 September 2023.
1.1 Going concern
The Directors have, at the time of approving these interim
financial statements, a reasonable expectation that the Company and
the Group have adequate resources to continue in operation for the
foreseeable future. The Group's forecasts and projections, taking
into account reasonable possible changes in trading performance,
show that the Group has sufficient financial resources, together
with assets that are expected to generate cash flow in the normal
course of business. Accordingly, the Directors have adopted the
going concern basis in preparing these interim financial
statements.
2. Segment reporting
The Group derives revenue from the delivery of remote monitoring
technologies and services to a range of domestic and international
customers. The income streams are all derived from the utilisation
of these products which, in all aspects except details of revenue,
are reviewed and managed together within the Group and as such are
considered to be the only segment. The Group operates across three
regions: Europe, Asia Pacific and The Americas, and the Board of
Directors monitors revenue on this basis.
Revenue for each of the geographical areas is as follows:
H1 2023 H1 2022 FY 2022
GBP'000 GBP'000 GBP'000
Europe 3,576 2,476 5,048
Asia-Pacific 16,272 12,847 29,165
Americas 7,413 7,539 15,951
--------- --------- ---------
27,261 22,862 50,164
========= ========= =========
Assets and liabilities by segment are not regularly reviewed by
the Board of Directors on a monthly basis and, therefore, are not
used as a key decision-making tool and are not disclosed here.
Revenues are disaggregated as follows:
H1 2023 H1 2022 FY 2022
GBP'000 GBP'000 GBP'000
Sales of goods 38 45 97
Delivery of services 27,223 22,817 50,067
--------- --------- ---------
27,261 22,862 50,164
========= ========= =========
The nature of the Group's operations mean that recorded
financial performance is not seasonal or cyclical in nature. The
majority of revenues are derived from delivery of services to
customers over time under long-term contracts.
3. Alternative performance measures
These items are included in normal operating costs of the
business, but are significant cash and non-cash expenses that are
separately disclosed because of their size, nature or incidence. It
is the Group's view that excluding them from operating profit gives
a better representation of the underlying performance of the
business in the period.
H1 2023 H1 2022 FY 2022
GBP'000 GBP'000 GBP'000
Amortisation of acquired intangibles 234 234 468
--------- ---------- ----------
Total adjusting operating
items 234 234 468
Share-based payments expense 5,491 3,024 6,056
--------- ---------- ----------
Total adjusting items and
share-based payments before
tax 5,725 3,258 6,524
--------- ---------- ----------
Tax effect of adjusting items
and share-based payments (1,446) (1,040) (1,641)
--------- ---------- ----------
Total adjusting items and
share-based payments after
tax 4,279 2,218 4,883
========= ========== ==========
Share-based payments expense
These costs are excluded from the adjusted results of the Group
since the costs are non-cash charges arising from recognition of
the fair value of share options and other share-based incentives
granted to employees of the Group. As such, they are not considered
reflective of the core trading performance of the Group.
Amortisation of acquired intangibles
These costs are excluded from the adjusted results of the Group
since the costs are non-cash charges arising from investment
activities. As such, they are not considered reflective of the core
trading performance of the Group.
4. Taxation
Current tax is charged at 16.6% for the period (H1 2022: 9.0%)
representing the best estimate of the average annual effective
current tax rate expected to apply for the full year, applied to
the pre-tax income of the current period.
The effective current tax rate is lower than the UK corporation
tax rate due to allowances claimed for research and development,
patent box and the deductibility of exercised employee share
awards, offset by overseas tax at higher rates than in the UK.
Deferred tax recognised in the period relates to share options,
acquired intangible assets and fixed asset timing differences.
H1 2023 H1 2022 FY 2022
GBP'000 GBP'000 GBP'000
Current tax
For the financial period 1,502 796 2,218
Adjustments in respect of
prior periods - - (13)
--------- --------- ---------
1,502 796 2,205
Deferred tax
Origination and reversal of
temporary timing differences (44) (44) 389
Adjustments in respect of
prior periods - - (9)
Related to share-based payments (1,402) (996) (1,552)
--------- --------- ---------
(1,446) (1,040) (1,172)
Total taxation 56 (244) 1,033
========= ========= =========
In addition to taxation recognised in the consolidated income
statement, the following amounts relating to tax have been credited
directly in equity:
H1 2023 H1 2022 FY 2022
GBP'000 GBP'000 GBP'000
Deferred tax
Related to share-based payments (1,454) - (1,600)
--------- --------- ---------
Total taxation recognised
directly in equity (1,454) - (1,600)
========= ========= =========
5. Earnings per share
The calculation of the basic and diluted earnings per share is
based on the following data:
H1 2023 H1 2022 FY 2022
GBP'000 GBP'000 GBP'000
Profit for the purpose of
basic and diluted earnings
per share being net profit
attributable to equity holders
of the parent 8,992 9,103 19,962
Adjustments for:
Adjusting items 234 234 468
Share-based payments expense 5,491 3,024 6,056
Tax effect of adjusting items
and share-based payments (1,446) (1,040) (1,641)
Adjusted earnings 13,271 11,321 24,845
============== ========= ==========
H1 2023 H1 2022 FY 2022
No. shares No. shares No. shares
Weighted average number
of Ordinary shares for
the purpose of basic earnings
per share 290,430,303 289,600,756 289,950,953
Effect of dilutive potential
Ordinary shares/share options 18,447,204 15,963,014 16,800,389
Weighted average number
of Ordinary shares for
the purpose of diluted
earnings per share 308,877,507 305,563,770 306,751,342
============== =============== ==============
H1 2023 H1 2022 FY 2022
Basic earnings per share Pence Pence Pence
Basic earnings per share 3.1 3.1 6.9
Adjustments for:
Adjusting items 0.1 0.1 0.2
Share-based payments expense 1.9 1.1 2.1
Tax effect of adjusting items
and share-based payments (0.5) (0.4) (0.6)
-------- -------- --------
Adjusted basic earnings per
share 4.6 3.9 8.6
======== ======== ========
H1 2023 H1 2022 FY 2022
Diluted earnings per share Pence Pence Pence
Diluted earnings per share 2.9 3.0 6.5
Adjustments for:
Adjusting items 0.1 0.1 0.2
Share-based payments expense 1.8 1.0 2.0
Tax effect of adjusting items
and share-based payments (0.5) (0.4) (0.6)
-------- -------- --------
Adjusted diluted earnings
per share 4.3 3.7 8.1
======== ======== ========
The adjusted earnings per share has been calculated on the basis
of profit before adjusting items and share-based payments, net of
tax. The Directors consider that this calculation gives a better
understanding of the Group's earnings per share in the current and
prior periods.
6. Cash and cash equivalents
The carrying amounts of the cash and cash equivalents are
denominated in the following currencies:
H1 2023 H1 2022 FY 2022
GBP'000 GBP'000 GBP'000
Pounds Sterling 58,353 47,688 58,386
US Dollar 4,321 2,557 3,389
Australian Dollar 6,780 2,995 2,480
New Zealand Dollar 5,250 2,447 2,674
Colombian Peso 879 1,077 318
Euro 195 158 20
Canadian Dollar 55 167 126
Other 140 81 81
--------- --------- ---------
75,973 57,170 67,474
========= ========= =========
Net cash
Net cash comprises cash and cash equivalents and lease
liabilities.
H1 2023 H1 2022 FY 2022
GBP'000 GBP'000 GBP'000
Cash and cash equivalents 75,973 57,170 67,474
Lease liabilities (595) (313) (707)
--------- --------- ---------
75,378 56,857 66,767
========= ========= =========
7. Share capital
The allotted, called up and fully paid share capital is made up
of 290,545,082 ordinary shares of GBP0.01 each. During the period
the Group issued 145,000 shares (H1 2022: 1,653,000 shares),
generating cash proceeds of GBP0.039m (H1 2022: GBP0.362m) to
satisfy the exercise of options by employees under EMI and non-EMI
share option plans.
8. Share-based payments
The Group has a number of equity-settled share-based payment
arrangements in operation, the details of which are disclosed in
note 24 on pages 88-90 of the 2022 Annual Report and Accounts. The
schemes were established to reward and incentivise the senior
management team and employees to deliver share price growth. The
charge made in respect of share-based payments is as follows:
H1 2023 H1 2022 FY 2022
GBP'000 GBP'000 GBP'000
Non-EMI Plan (Chair) 25 56 112
LTIP 125 67 145
Growth Share Plan 5,317 2,884 5,769
--------- --------- ---------
Share-based payments charge
(IFRS 2) 5,467 3,007 6,026
Employers' tax charge in relation
to share awards 24 17 30
--------- --------- ---------
Total charge in respect of
share-based payments 5,491 3,024 6,056
========= ========= =========
9. Principal risks and uncertainties
The principal risks and uncertainties impacting the Group are
described on pages 30-33 of the 2022 Annual Report and Accounts and
remain unchanged at 30 June 2023.
They include: reliance on key customers, failure to manage
growth, change in government policy, failure to develop new
products, competitor actions, reliance on third-party technology
and communication systems, reputational risk, dependence on
partners, loss of key personnel, supply chain, product liability,
foreign exchange risk, credit risk, business taxation, bid
pricingkey financial terms, cyber security/business interruption,
intellectual property/patents and operating in global markets.
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END
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September 19, 2023 02:00 ET (06:00 GMT)
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