TIDMBYOT
RNS Number : 8990U
Byotrol PLC
08 December 2021
8 December 2021
Byotrol Plc
("Byotrol" or the "Group")
Interim results and Notice of Investor Presentation
Byotrol Plc (AIM: BYOT), the specialist infection prevention and
control company, is pleased to announce today its unaudited interim
results for the six months ended 30 September 2021.
Highlights
Performance in the first six months showed substantial and
ongoing improvements compared to our performance pre-Covid, but was
below management expectations for the period, matching the
experience of other companies in our markets and reflecting slower
than expected and overstocked markets post the peak of the pandemic
demand.
-- Sales GBP3.2m (versus an exceptional Covid-driven GBP6.7m in
6m to 30 September 2020, and GBP2.1m * in the 6 months to 30
September 2019)
-- Gross profit GBP1.66m (v.GBP2.91m and GBP0.91m respectively)
-- Adjusted EBITDA ** GBP0.17m (versus GBP1.29m and GBP0.34m loss respectively)
-- Cash of GBP1.9m at period end
Strategic initiatives progressing well:
-- Sale of Byotrol24 in the Americas for gross cash of $1.4m
over two years, plus three years of ongoing royalty and potentially
significant extra payments to be made to Byotrol contingent on the
purchaser's future revenues.
-- Solvay continues with its global launch of Actizone 24 hours
surface sanitiser and has now received US EPA approval for
long-lasting germ kill claims. This is a highly significant step
and opens up global supply opportunities for Solvay, from which
Byotrol will benefit through its ongoing commission
arrangements
-- Nearing completion of the academic programme into the mode of
action behind brown seaweed's potency as an antiviral technology.
The potential for this technology continues to be exciting for the
Group.
During the year we have been making substantial investment in
the team, including:
-- new leadership of the Professional sales, marketing and
business development functions, with two key hires, both with
considerable experience in our core markets
-- imminent appointment for the first time of a full-time CFO to the Board.
Outlook
Whilst this pandemic is far from over, we find ourselves in a
much better position than we were in late 2019. We have an
increasingly integrated, profitable, IP-rich and cash generative
business in a much expanded market with enhanced annualised growth.
Accordingly, the Board remains highly confident in medium and
long-term growth and, with the benefit of a stronger balance sheet
and contractual cash flows from prior IP sales or licenses, is
investing further in the team to deliver it, particularly at
leadership level in sales and marketing.
After a challenging H1, particularly in hand hygiene products,
sales in October and November have been ahead of the average for H1
and the order book is now building strongly, sitting currently at
GBP850k versus an average of GBP300k in H1 and approximately
GBP350k pre-Covid. Notably this demand includes a number of sizable
orders from new customers in both the UK and overseas.
Market demand and gross margin, however, is likely to remain
volatile in the short term and is subject to a potential negative
impact of full and partial lockdowns on the demand for consumables.
This is especially so at the current time with the current
uncertainty introduced by the new Omicron variant of Covid.
Third party interest in our IP and related commercialisation
remains strong, with a number of active client discussions under
way. Such agreements can be profitable, but we cannot say with
certainty which agreements will close and when. We anticipate our
first material royalty income in the current financial year.
Whilst we expect to be both profitable and cash generative in
the second half of the year, with these uncertainties it is
difficult to predict the quantum at this juncture. At present we
are expecting IP sales to offset the majority of the anticipated
shortfall in profit on product sale, but projecting the timing of
IP sales is even more uncertain, so we feel it prudent to now
reduce market guidance for the current financial year. Regardless
of the timing of our revenues and IP commercialisations over the
next four months we remain very well positioned for future growth
and are excited by the significant opportunities ahead of us.
Investor Presentation
David Traynor, CEO, and Nic Hellyer, CFO will provide a live
presentation relating to these results via the Investor Meet
Company platform on 8th Dec 2021 at 2:30pm GMT.
The presentation is open to all existing and potential
shareholders. Questions can be submitted at any time during the
live presentation.
Investors can sign up to Investor Meet Company for free and add
to meet BYOTROL PLC via:
https://www.investormeetcompany.com/byotrol-plc/register-investor
Investors who already follow BYOTROL PLC on the Investor Meet
Company platform will automatically be invited.
John Langlands, non-executive Chairman of Byotrol commented:
"The Group remains substantially ahead of the pre-Covid period
in sales and profits and we expect that performance to endure.
The team is working hard to consolidate and increase the
underlying growth, and also to address the short-term challenges in
market conditions. We continue to see multiple opportunities for
growth in the medium term and are investing confidently to deliver
medium and long-term returns. "
For further information contact:
Byotrol Plc
David Traynor, Chief Executive +44 (0)1925 742 000
Nic Hellyer, Chief Financial Officer
finnCap Limited (Nominated Adviser and
Broker) +44 (0)20 7220 0500
Geoff Nash/Kate Bannatyne - Corporate Finance
Richard Chambers - ECM
Flagstaff Strategic and Investor Communications +44 (0)20 7129 1474
Tim Thompson/Andrea Seymour/Fergus Mellon byotrol@flagstaffcomms.com
This announcement is released by Byotrol Plc and, prior to
publication, the information contained herein was deemed to
constitute inside information under the Market Abuse Regulations
(EU) No. 596/2014. Such information is disclosed in accordance with
the Company's obligations under Article 17 of MAR. The person who
arranged for the release of this announcement on behalf of Byotrol
Plc was Nic Hellyer, CFO.
* Comparative figures for H1 2020 restated for closure of US
business
** Adjusted EBITDA is defined as Earnings before Interest, Tax,
Depreciation and Amortisation and exceptional items, share-based
payments, non-trading items such as profit or loss on disposal of
assets, plus revenue recognised as interest under IFRS 15
Notes to editors
Byotrol plc (BYOT.L), quoted on AIM, is a specialist infection
prevention and control company, operating globally in the
Healthcare, Industrial, Food and Consumer sectors, providing low
toxicity products with a broad-based and targeted efficacy across
all microbial classes; bacteria, viruses (including coronavirus),
fungi, moulds, mycobacteria and algae.
Byotrol's products can be used stand-alone or as ingredients
within existing products, where they can significantly improve
their performance, especially in personal hygiene, domestic and
industrial disinfection, odour control, food production and food
management.
Byotrol develops and commercialises technologies that create
easier, safer and cleaner lives for everyone.
For more information, go to byotrol.co.uk
Chief Executive's report and financial review
The first six months of this financial year have followed the
pattern expected by management since last year end, with
improvement in all financial indicators compared to pre-Covid, but
below the extraordinary results during the peak of the pandemic,
and indeed a little below management expectations, particularly in
product sales and especially in hand hygiene products.
Most market participants have been projecting sales growth in
infection control at around 10% across the recent cycle (compared
to the 5% normally quoted pre-Covid), which we have exceeded in our
own results compared to the first half of our 2020 financial year,
and low double digit earnings growth, which we have also exceeded
substantially.
In line with our strategy, we continued to make progress on the
IP side of our business. Larger customers look to us to provide
them with future-proofed technologies with the correct regulatory
support via licenses or outright sales. This is very solid business
once secured, building a long-term cash flow stream, but it is also
lumpy revenue-wise and can lead to volatile profitability. Pre
pandemic we invested into increasing product sales via the
acquisition of Medimark, but Covid has had the perverse effect of
making that side of the business volatile too, at least as the
current market conditions persist.
That said, we remain very confident in our positioning and in
market recovery and have used the extra resources created during
the previous financial year to invest in the business:
-- in the team, especially in sales, marketing and business
development. We have invested in new, market-proven leadership in 4
of the 6 operating board positions, including
o 2 senior sales and marketing professionals with prior national
leadership positions at Diversey and Gojo, and at Zoono
respectively
o a new, full-time CFO;
-- in R&D, we have restructured our technical team to
concentrate on innovation rather than testing, to take advantage of
the myriad of new opportunities available to us, particularly in
the fields of virology and sustainable and natural antimicrobial
technologies; and
-- in systems, especially in integrating the management, HR and
supply chain systems of the Group
Many of these incremental costs have been offset through a
restructuring in the period, which we estimate will result in an
exceptional charge of c. GBP0.2m. Net of this, the investment will
result in an increase of c.10% in annualised full year cash costs,
which will start paying back in mid/late calendar 2022 as the
resulting operational efficiencies feed through.
The new team is now working on a more focussed strategy, where
we can get the best return for our sales and marketing spend.
Byotrol has traditionally (and by necessity given its historical
resource constraints) offered its technologies into many different
market segments with many different commercials, sold on the basis
of its outstanding product performance. This has kept the business
growing satisfactorily, but we must now become masters in fewer,
discrete segments, talking to clients knowledgably about their
businesses and solving their problems where we can. This is a
natural and correct evolution of the business and will not result
in withdrawing from any current activities, but it will likely mean
a shift in how we position ourselves publicly. It should also allow
us to deliver a higher net margin as we develop a much more
targeted and client focused approach.
Results by segment
Professional
H1 revenues decreased to GBP2.61m from GBP5.66m, including
GBP0.75m of royalty and licensing revenue compared to GBP0.59m in
the comparable period. Gross profit on product sales (excluding
license revenue) decreased to GBP0.70m from GBP1.86m.
As reported in September the first half of the year has been a
challenge for product sales due to unexpectedly extended lockdowns
and office closures and by too much product in our markets chasing
too little business consumption. Brexit has not helped either,
increasing the amount of administration required to sell our
product into the EU and the UK government decision to move away
from much of the EU regulatory regime on chemicals. We are now, for
instance, increasingly having to re-do regulatory approvals for the
UK, based on a new, slightly different to expectations, regime. The
good news is that supply chains seem to have stabilised now, and we
are now finally starting to reap some benefits from combining the
supply chain effort of Byotrol and Medimark.
Product mix remained broadly consistent with previous comparable
periods, although hand hygiene sales have been some way behind
expectations due to overstocking and heavy price discounting by
alcohol-based hand sanitiser producers. Of the Professional
segments, facilities management and environmental (laboratory
supplies) has been much weaker than expected, but human and animal
health has been steady, with the latter picking up rapidly as
veterinary practices re-open.
Consumer
H1 revenues decreased to GBP0.56m from GBP0.98m, all of which
were product sales. Gross profit on products decreased consequently
to GBP0.20m from GBP0.45m.
Given the recent history of the Group, we remain substantially
underinvested in consumer product sales and are now taking steps to
address this, particularly as we see increasing sales of our
anti-viral alcohol-free hand sanitiser sales into Boots. Recent new
hires into the Byotrol leadership team should help here.
Intellectual Property Sales and Licensing
We continue to make progress in monetizing our IP. Of the
current activities in place, the three most notable progressions
are:
-- Solvay has now launched Actizone globally, the long-lasting
antimicrobial surface sanitiser that Byotrol co-developed and that
will pay Byotrol an ongoing commission on all Solvay sales. We are
aware of two global company clients of Solvay and two regional
companies already launching 24 hour germ kill products into
consumer and business markets and are still expecting to report our
first sales-based income from this relationship in FY22. Very
excitingly, we understand that Solvay has now achieved US EPA
approval for long lasting germ kill sanitisers, thus opening up the
important US domestic market; we anticipate sizeable demand from
global customers seeking global supply chains.
-- On 30 September we agreed to convert the existing US license
agreement on Byotrol24 with Integrated Resources Inc (IRI) into a
sale of the formulation in the Americas to IRI, with payments over
2 years. The agreement secured cash payments to Byotrol amounting
to US$1.4m in total, with a residual royalty to Byotrol being paid
over 3 years, which will ratchet-up further in the event of IRI
re-selling the formulation within two years. Simultaneous with this
sale, Byotrol entered into a preliminary three-way agreement with
IRI and a significant US distribution company ("USCo") to register
with EPA and then sell the Formulation into US Professional
markets. Should formal registration be achieved, sales by IRI to
USCo will accrue further additional royalties to Byotrol.
-- Our development programme looking into the anti-viral
properties of brown seaweed is now confirming and formalising the
extraordinary anti-viral properties seen in preliminary in-house
testing. We are also now coming to a data-supported conclusion on
the mode of action underlying the performance - which we believe
will add value to the technology platform. The commercialization
effort on seaweed has now commenced.
Balance sheet
Our balance sheet continues to be strong, with cash at the
period end of GBP1.9m and a healthy balance of receivables from IP
sales and licenses providing regular short and medium term cash
flows. Our stock position, which was at a high point at the 2021
year end of GBP1.1m, has now reduced to a more normal GBP0.7m.
Additions to capitalised development costs in the period reflect
the Group's usual investment in regulatory and other IP as well as
largely one-off expenditure on the Group's patent portfolio.
Outlook
As we expected mid-pandemic, sales are now settling at a
significantly higher rate than pre-Covid. This underlying growth
has been hidden slightly by unusually high overstocking, especially
in hand sanitisers, one-off market factors such as Brexit and the
resultant pricing pressures in the first half of the year, but this
challenge does now seem to be unwinding and our order book has more
than doubled since period end.
IP sales and activity remains very strong, and incoming levels
of enquiry remain high.
We have been busy investing our resources in an upgraded team,
with track records of developing new business streams and growing
sales generally and this is leading to significantly higher
annualised projected annual cost base compared to pre-Covid, before
supporting spend on items such as market research and marketing.
This is the right thing to do to maximise shareholder returns over
the medium term and we are highly confident that payback will
accrue in the new financial year, if not earlier. The long-term
outlook for your company remains excellent.
David Traynor
Chief Executive
Group statement of comprehensive income
6 months 6 months Year to
to to 31 March
30 September 30 September 2021
2021 2020
Note GBP'000 GBP'000 GBP'000
(unaudited) (unaudited, (audited)
restated)
Revenue 2 3,173 6,657 11,214
Cost of sales (1,517) (3,746) (6,359)
_______ _______ _______
Gross profit 1,656 2,911 4,855
Adjusted administrative expenses (1,633) (1,747) (3,486)
_______ _______ _______
Adjusted operating profit 23 1,164 1,369
Amortisation of acquisition-related
intangibles (121) (121) (243)
Share-based payments (64) (10) (111)
_______ _______ _______
Operating profit (162) 1,033 1,015
Finance income 4 26 27 66
Finance expense 5 (5) (18) (44)
_______ _______ _______
Profit/(loss) before taxation (141) 1,042 1,037
Income tax credit/(expense) 23 48 (58)
_______ _______ _______
P rofit/(loss) for the year
from continuing operations (118) 1,090 979
Discontinued operations
(Loss) for the period from
discontinued operations - (83) (98)
_______ _______ _______
Profit/(loss) for the period (118) 1,007 881
Items that may be reclassified
subsequently to profit or loss:
Exchange differences 11 (29) (98)
_______ _______ _______
Other comprehensive income/(expense),
net of tax 11 (29) (98)
TOTAL COMPREHENSIVE INCOME/(LOSS)
FOR THE PERIOD (107) 978 783
Total comprehensive income
for the year arises from:
- continuing operations (107) 1,061 881
- discontinued operations - (83) (98)
_______ _______ _______
(107) 978 783
Earnings per share - from continuing
operations
Attributable to the owners
of Byotrol plc (basic) 6 (0.03)p 0.25p 0.22p
Attributable to the owners
of Byotrol plc (diluted) 6 (0.03)p 0.24p 0.22p
Earnings per share - from discontinued
operations
Attributable to the owners
of Byotrol plc (basic) n/a (0.02)p (0.02)p
Attributable to the owners
of Byotrol plc (diluted) n/a (0.02)p (0.02)p
Earnings per share - from profit
for the period
Attributable to the owners
of Byotrol plc (basic) (0.03)p 0.23p 0.20p
Attributable to the owners
of Byotrol plc (diluted) (0.03)p 0.22p 0.19p
Group statement of financial position
As at As at As at
30 September 30 September 31 March
2021 2020 2021
Note GBP'000 GBP'000 GBP'000
(unaudited) (unaudited) (audited)
Assets
Non-current assets
Intangible assets 7 3,617 3,625 3,552
Tangible assets 80 57 84
Right-of-use assets 8 41 50 30
Deferred tax assets 315 431 315
Trade receivables 1,292 1,082 1,249
_______ _______ _______
5,345 5,245 5,230
Current assets
Inventories 733 1,146 1,099
Trade and other receivables 1,772 2,073 1,614
Cash and cash equivalents 1,902 1,755 1,598
_______ _______ _______
4,407 4,974 4,311
Total assets 9,752 10,219 9,541
Liabilities
Non-current liabilities
Lease liabilities 9 16 16 4
Deferred tax liabilities 325 371 348
_______ _______ _______
341 387 352
Current liabilities
Trade and other payables 1,027 1,671 1,023
Lease liabilities 9 26 33 26
_______ _______ _______
1,053 1,704 1,049
Total liabilities 1,394 2,091 1,401
NET ASSETS 8,358 8,128 8,140
Issued share capital and reserves
Share capital 1,133 1,107 1,116
Share premium 434 28,493 190
Other reserves 739 1,864 728
Retained earnings 6,052 (23,336) 6,106
_______ _______ _______
TOTAL EQUITY 8,358 8,128 8,140
Group statement of cash flows
6 months 6 months Year to
to to 31 March
30 September 30 September 2021
2021 2020
GBP'000 GBP'000 GBP'000
(unaudited) (unaudited, (audited)
restated)
Cash flows from operating activities
Profit/(loss) for the period (118) 1,007 881
Adjustments for:
Finance income (26) (27) (66)
Finance costs 5 18 44
Depreciation of tangible non-current
assets 16 12 26
Amortisation of intangible non-current
assets 190 203 426
Loss on disposal of assets 17 - 107
Income tax recognised in profit
or loss (23) (48) 58
Share-based payments 64 10 111
Costs relating to Capital Reduction
recognised in equity - - (36)
_______ _______ _______
Operating cash flows before movements
in working capital 125 1,175 1,551
(Increase)/decrease in trade and
other receivables (185) (315) 37
(Increase)/decrease in inventories 366 (860) (814)
Increase/(decrease) in trade and
other payables 29 580 (34)
Cash in/(out)flow from discontinued
operations - (47) (211)
_______ _______ _______
Cash (used in)/generated from operating
activities 335 533 529
Income tax refund received - 25 25
_______ _______ _______
Net cash (used in)/generated from
operating activities 335 558 554
Cash flows from investing activities
Development of intangible assets (272) (138) (394)
Acquisition of property, plant
and equipment (12) (14) (55)
_______ _______ _______
Net cash used in investing activities (284) (152) (449)
Cash flows from financing activities
Proceeds from issue of ordinary
shares, net of issue costs 261 - 205
Movement in invoice discounting - (296) -
facility
Repayments of principal on lease
liabilities (14) (21) (39)
Finance income - - 53
Finance costs (4) (18) (42)
Interest expense on lease liabilities (1) (1) (2)
_______ _______ _______
Net cash (used in)/ generated by
financing activities 242 (336) (121)
Net (decrease)/increase in cash
and cash equivalents 293 70 (16)
Net foreign exchange differences 11 (27) (98)
Cash and equivalent at beginning
of period 1,598 1,712 1,712
_______ _______ _______
Cash and cash equivalents at end
of period 1,902 1,755 1,598
Group statement of changes in equity
Share Share Merger Retained Total
capital premium Exchange reserve profits
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 31 March
2020 1,101 28,423 826 1,065 (24,353) 7,062
Profit/(loss) after
taxation for the
period - - - - 1,007 1,007
Share-based payments - - - - 10 10
Other comprehensive
income:
Exchange differences - - (27) - - (27)
Transactions with
owners:
Shares issued for
cash 6 70 - - - 76
_____ _____ _____ _____ _____ _____
Balance at 30 September
2020 1,107 28,493 799 1,065 (23,336) 8,128
(Loss) after taxation
for the period - - - - (126) (126)
Other comprehensive
income:
Deferred tax on
share-based payment
transactions - - - - 15 15
Exchange differences - - (71) - - (71)
Share-based payments - - - - 101 101
Transactions with
owners:
Share-based payments - - - - - -
Deferred tax on - - - - - -
share-based payment
transactions
Shares issued for
cash 9 120 - - - 129
Transactions with
owners - capital
reduction:
Capitalisation of
Merger reserve to
B Ordinary Shares 1,065 - - (1,065) - -
Cancellation of
B Ordinary Shares (1,065) - - - 1,065 -
Cancellation of
Share Premium - (28,423) - - 28,423 -
Costs of Capital
Reduction - - - - (36) (36)
_____ _____ _____ _____ _____ _____
Balance at 31 March
2021 1,116 190 728 - 6,106 8,140
Profit/(loss) after
taxation for the
period - - - (118) (118)
Share-based payments - - - 64 64
Other comprehensive
income:
Exchange differences - - 11 - - 11
Transactions with
owners:
Shares issued for
cash 17 244 - - 261
_____ _____ _____ _____ _____ _____
Balance at 30 September
2021 1,133 434 739 - 6,052 8,358
Notes to the Group financial statements
1 Basis of preparation
The Group has prepared its interim financial statements for the
6 months ended 30 September 2021 (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 March 2021 and those which will be adopted in the
preparation of the annual report for the year ending 31 March
2022.
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.
Certain comparative amounts for the 6 months ended 30 September
2020 in the Group Statement of Comprehensive Income, Group
Statement of Cash Flows and related notes have been reclassified or
restated to achieve a more appropriate presentation as required by
IFRS 5: Non-current assets held for sale and discontinued
operations.
Going concern
The Directors have considered trading and cash flow forecasts
prepared for the Group, and based on these 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 7 December 2021.
Comparative financial information
The comparative financial information presented herein for the
year ended 31 March 2021 does not constitute full statutory
accounts for that period. The statutory accounts for the year ended
31 March 2021 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 and gross profit by segment
6 months ended 30 September Continuing Discontinued Total
2021 operations operations
Professional Consumer
GBP'000 GBP'000 GBP'000 GBP'000
Revenue
Product sales 1,862 560 - 2,422
Royalty and licensing income 751 - - 751
_______ _______ _______ _______
Total revenue 2,613 560 - 3,173
Gross profit
Product sales 705 200 - 905
Royalty and licensing income 751 - - 751
_______ _______ _______ _______
Total gross profit 1,456 200 - 1,656
6 months ended 30 September Continuing Discontinued Total
2020 operations operations
Professional Consumer
GBP'000 GBP'000 GBP'000 GBP'000
Revenue
Product sales 5,067 981 16 6,064
Royalty and licensing income 591 18 - 609
_______ _______ _______ _______
Total revenue 5,658 999 16 6,673
Gross profit
Product sales 1,856 446 (15) 2,287
Royalty and licensing income 591 18 - 609
_______ _______ _______ _______
Total gross profit 2,447 464 (15) 2,896
Revenue by geography
The Group recognises revenue in three geographical regions based
on the location of customers, as follows:
6 months ended 30 September 2021 Professional Consumer Total
GBP'000 GBP'000 GBP'000
United Kingdom 1,650 366 2,016
North America 751 - 751
Rest of World 212 194 406
_______ _______ _______
Total revenue 2,613 560 3,173
6 months ended 30 September 2020 Professional Consumer Total
GBP'000 GBP'000 GBP'000
United Kingdom 4,542 456 4,998
North America* 445 - 445
Rest of World 671 543 1,214
_______ _______ _______
Total revenue 5,658 999 6,657
* this represents revenue other than that arising from
discontinued operations
Management makes no allocation of costs, assets or liabilities
between these segments since all trading activities are operated as
a single business unit.
License revenue and finance income
License contracts (and certain other contracts relating to the
sale of IP) typically provide for fixed payments to be made by
customers over a given term (typically between three and five years
but which may extend longer). Under IFRS 15, in order to reflect
the time value of money, such contracts are recognised as the
capitalised value of the income stream plus notional interest
accruing for the period on the credit deemed to be extended to the
customer (on a reducing balance basis). For the 6 months to 30
September 2021 this figure amounts to license revenue of GBP0.75m
and notional interest income of GBP26,000.
3 Non-GAAP profit measures and exceptional items
Reconciliation of operating profit to adjusted EBITDA (earnings
before interest, taxation, depreciation and amortisation):
6 months 6 months Year to
to to 31 March
30 September 30 September 2021
2021 2020
GBP'000 GBP'000 GBP'000
Operating profit/(loss) (162) 1,033 1,015
Adjusted for:
Amortisation and depreciation 221 215 491
_______ _______ _______
EBITDA 59 1,248 1,506
Loss on disposal of assets 17 - 106
Revenue recognised as interest
under IFRS 15 26 27 53
Expensed share-based payments 64 10 111
_______ _______ _______
Adjusted EBITDA 166 1,285 1,776
The criterion for adjusting items in the calculation of adjusted
EBITDA is operating income or expenses that 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. Adjustment
for share-based payment expense is made because, once the cost has
been calculated, the Directors cannot influence the share based
payment charge incurred in subsequent years, and the value of the
share option to the employee differs considerably in value and
timing from the actual cash cost to the Group.
Exceptional items are treated as exceptional by reason of their
size or nature and are excluded from the calculation of adjusted
EBITDA (and adjusted earnings per ordinary share) 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.
Adjusted EPS
The calculation of adjusted EPS is shown in Note 6.
4 Finance income
6 months 6 months Year to
to to 31 March
30 September 30 September 2021
2021 2020
GBP'000 GBP'000 GBP'000
Interest receivable on interest-bearing
deposits - - 13
Notional interest accruing on
contracts with a significant
financing component 26 27 53
_______ _______ _______
Total finance income 26 27 66
5 Finance expense
6 months 6 months Year to
to to 31 March
30 September 30 September 2021
2021 2020
GBP'000 GBP'000 GBP'000
Interest and finance charges 4 17 42
Interest on lease liabilities
under IFRS 16 1 1 2
_______ _______ _______
Total finance expense 5 18 44
6 Earnings per share
The following sets out the earnings and share data used in the
basic and diluted earnings per share computations:
Denominator for earnings per share ("EPS") calculations
Year to 31 March 6 months 6 months Year to
to to 31 March
30 September 30 September 2021
2021 2020
Weighted number of ordinary shares
in issue 452,659,277 441,345,756 442,947,561
Effect of dilutive potential
ordinary shares 3,342,894 9,665,218 11,338,201
_______ _______ _______
456,002,170 451,010,974 454,285,762
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 per option) 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.
Numerator for EPS calculations
Continuing Discontinued Total
6 months to 30 September 2021 operations operations
GBP'000 GBP'000 GBP'000
Profit/(loss) attributable to
ordinary equity holders of the
Company (numerator for basic
EPS calculation) (118) - (118)
Adjusting items:
- share-based payments 64 - 64
- amortisation of acquisition-related
intangibles 121 - 121
- deferred tax credit arising
from acquisition-related intangibles (23) - (23)
_______ _______ _______
Adjusted earnings attributable
to owners of the Parent
(numerator for adjusted EPS calculation) 44 - 44
Continuing Discontinued Total
6 months to 30 September 2020 operations operations
GBP'000 GBP'000 GBP'000
Profit/(loss) attributable to
ordinary equity holders of the
Company (numerator for basic
earnings per share calculation) 1,090 (83) 1,007
Adjusting items:
- share-based payments 10 - 10
- amortisation of acquisition-related
intangibles 121 - 121
- deferred tax credit arising
from acquisition-related intangibles (23) - (23)
_______ _______ _______
Adjusted earnings attributable
to owners of the Parent 1,198 (83) 1,115
Continuing Discontinued Total
Year to 31 March 2021 operations operations
GBP'000 GBP'000 GBP'000
Profit/(loss) attributable to
ordinary equity holders of the
Company (numerator for basic
earnings per share calculation) 979 (98) 881
Adjusting items:
- share-based payments 111 - 111
- amortisation of acquisition-related
intangibles 243 - 243
- deferred tax credit arising
from acquisition-related intangibles (47) - (47)
_______ _______ _______
Adjusted earnings attributable
to owners of the Parent 1,286 (98) 1,188
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. Amortisation of
acquisition-related intangibles (and the associated tax credit)
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.
EPS - reported
6 months to 6 months to Year to
30 September 2021 30 September 2020 * 31 March
2021 *
GBP'000 GBP'000 GBP'000
Reported earnings per share attributable to shareholders
- basic (0.03)p 0.25p 0.22p
- diluted (0.03)p 0.24p 0.22p
* Continuing operations only
EPS - adjusted
6 months to 6 months to Year to
30 September 2021 30 September 2020 * 31 March
2021 *
GBP'000 GBP'000 GBP'000
Adjusted earnings per share attributable to shareholders
- basic 0.01p 0.27p 0.29p
- diluted 0.01p 0.27p 0.28p
* Continuing operations only
7 Intangible assets
Intangible assets comprise capitalised development costs,
acquired software, customer relationships and goodwill.
Goodwill Other Intangible Total
Assets
GBP'000 GBP'000 GBP'000
Cost
At 1 April 2021 502 4,639 5,141
Additions - 272 272
(Disposals) - (96) (96)
_____ _______ _______
At 30 September
2021 502 4,815 5,317
Amortisation
or impairment
At 1 April 2021 - (1,589) (1,589)
Charge for the
period - (190) (190)
Eliminated on
disposal - 79 79
_______ _______ _______
At 30 September
2021 - (1,700) (1,700)
Net carrying
amount
At 30 September
2021 502 3,115 3,617
At 1 April 2021 502 3,050 3,552
Other Intangible Assets comprise:
Customer Brands Development Patents Total
Relationships Costs and licenses
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 April 2021 1,861 567 1,535 676 4,639
Additions - - 178 94 272
(Disposals) - - - (96) (96)
_______ _______ _______ _______ _______
At 30 September
2021 1,861 567 1,713 674 4,815
Amortisation
or impairment
At 1 April 2021 (485) (148) (411) (545) (1,589)
Charge for the
period (93) (28) (53) (16) (190)
Eliminated on
disposal - - - 79 79
_______ _______ _______ _______ _______
At 30 September
2021 (578) (176) (464) (482) 1,700
Net carrying
amount
At 30 September
2021 1,283 391 1,249 192 3,115
At 1 April 2021 1,376 419 1,124 131 3,050
8 Right-of-use assets
Right-of-use assets comprise leases over office buildings and
vehicles.
Office Vehicles Total
buildings
GBP'000 GBP'000 GBP'000
Cost
At 1 April 2021 103 47 150
Additions in the period - 26 26
(Disposals) in the period - (47) (47)
_______ _______ _______
At 30 September 2021 103 26 129
Depreciation
At 1 April 2021 (75) (45) (120)
Charge for the period (13) (2) (15)
Eliminated on disposal - 47 47
_______ _______ _______
At 30 September 2021 (88) - (88)
Net carrying amount
At 30 September 2021 15 26 41
At 1 April 2021 28 2 30
9 Lease liabilities
Lease liabilities comprise liabilities arising from the
committed and expected payments on leases over office buildings and
vehicles.
Amounts due in more than one year Office Vehicles Total
equipment
GBP'000 GBP'000 GBP'000
At 1 April 2021 4 - 4
Liabilities taken on in the period - 25 25
Transfers from long to short term
liabilities (4) (9) (13)
At 30 September 2021 _______ _______ _______
- 16 16
Amounts due in less than one year Office Vehicles Total
equipment
GBP'000 GBP'000 GBP'000
At 1 April 2021 24 2 26
Repayments of principal (12) (2) (14)
Liabilities taken on in the period - 26 26
Transfers from long to short term
liabilities 4 (16) (12)
_______ _______ _______
At 30 September 2021 16 10 26
10 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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END
IR DKOBKDBDBQBK
(END) Dow Jones Newswires
December 08, 2021 02:00 ET (07:00 GMT)
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