TIDMQTX
RNS Number : 6285H
Quartix Technologies PLC
31 July 2023
31 July 2023
Quartix Technologies plc
("Quartix", "the Group" or "the Company")
Interim Results
Quartix Technologies plc (AIM:QTX), a leading supplier of
subscription-based vehicle tracking systems, analytical software
and services, is pleased to announce its unaudited results for the
half year ended 30 June 2023.
Restatement of comparatives
All comparative monetary amounts for 2022 have been restated in
line with a change in policy in the recognition of equipment,
installation and carriage costs associated with contracts with
customers under IFRS 15: 'Revenue from Contracts with Customers'
(See note 1: Summary of significant accounting policies).
Financial highlights:
-- Group revenue increased by 10% to GBP14.6m (2022: GBP13.3m)
o Fleet revenue increased by 13% to GBP14.5m (2022: 12.8m)
o Fleet revenue represented 98.9% of total revenue (2022:
95.8%)
o Insurance revenue decreased by 70% to GBP0.2m (2022: 0.6m)
-- Adjusted EBITDA (1) remained constant at GBP2.7m (2022: GBP2.7m)
-- Operating profit decreased by 7% to GBP2.4m (2022: GBP2.6m)
-- Profit before tax decreased by 7% to GBP2.4m (2022: GBP2.6m)
-- Diluted earnings per share of 4.16p (2022: 4.63p)
-- Free cash flow (2) decreased by 26% to GBP1.4m (2022: GBP1.9m)
-- Interim dividend of 1.50p per share proposed (2022: 1.50p)
(1) Earnings before interest, tax, depreciation, amortisation
and share based payment expense (see note 4)
(2) Cash flow from operations after tax and investing
activities
Principal activities and performance measures
The Group's main strategic objective is to grow its subscription
base and develop the associated annualised recurring revenue.
Annualised recurring revenue has increased by 8% year on year
(see definition in KPI table below). Annualised recurring revenue
is a forward-looking key performance measure, and it is pleasing
that it grew by GBP2.1m on a constant exchange rate to GBP28.0m at
30 June 2023, compared to 30 June 2022.
The Key Performance Indicators used by the Board to assess the
performance of the business are listed below and discussed in the
Chairman's Statement.
Key Performance Indicators ("KPIs")
Period ended 30 June 2023 2022 % change
-------- -------- ---------
Fleet subscriptions1 (new units) 33,547 32,085 5
Fleet subscription base(2)
(units) 251,787 221,800 14
Fleet customer base(3) 26,337 24,408 8
Fleet gross attrition (annualised)(4)
(%) 13.5 11.6
Annualised recurring revenue(5)
(GBP'000) 27,972 25,833 8
Fleet invoiced recurring revenue(6)
(GBP'000) 13,788 12,342 12
Fleet revenue (GBP'000) 14,456 12,775 13
Price erosion(7) (%) 4.6 4.8
(1) New vehicle tracking units subscriptions added to the
subscription base in 6 months to 30 June before any attrition
(2) The number of vehicle tracking units subscribed to the
Group's fleet tracking services, including units waiting to be
installed for which subscription payments have started or are
committed
(3) The number of customers associated with the fleet
subscription base
(4) The number of new vehicle tracking unit subscriptions, less
the increase in the subscription base, expressed as a percentage of
the mean subscription base
(5) Annualised data services revenue for the subscription base
at 30 June, before deferred revenue, including revenue for units
waiting to be installed for which subscription payments have
already started or are committed, with comparative June 2022
measured at a constant exchange rate.
(6) Invoiced subscription charges before provision for deferred
revenue
(7) The decrease in average subscription price of the base
expressed as a percentage of the average subscription price at 30
June, with comparative June 2022 measured at a constant exchange
rate.
As discussed in the 2022 financial statements, the Group
implemented a new policy in 2022 which recognised hardware and
associated installation and carriage costs over their expected
initial contract term (typically 2 years), on a systematic basis
that more accurately reflects the revenue stream generated by them.
The capitalisation and subsequent amortisation of these incremental
costs are more aligned to the core principles in IFRS 15 and make
the reported EBITDA more comparable with that reported by companies
with a similar business model.
This approach simplifies the presentation of the Group's
results. Previously, the Group included an
additional voluntary disclosure, separating customer acquisition
cost, being the investment for new
customer contracts, and Fleet telematics services, for recurring
revenue and repeat contracts with existing customers, in order to
highlight the different cost structures within the business.
Following the change in accounting policy this analysis is no
longer considered necessary. However, overheads on the face of the
Consolidated Statement of Comprehensive Income have been split
between Sales & Marketing expenses and Administration expenses,
with Sales & Marketing expenses including the costs of customer
acquisition being the investment in marketing expenditure and
payroll costs for the sales teams.
Richard Lilwall, Chief Executive Officer of Quartix ,
commented:
"The first half of 2023 saw an increase in Quartix's
subscription base globally, leading to a GBP2.1m growth in
annualised recurring revenues to GBP28.0m. This promising growth
occurred despite increased liquidations and customers downsizing
their fleets causing slightly higher attrition, highlighting the
resilience of our business model.
Subscription growth was seen across all markets. In the UK, the
growth was backed by robust customer acquisition, leading to a 6%
subscription increase and a 3% rise in total revenue. European
markets, especially France, exhibited stellar performance with a
noteworthy subscription surge.
A redirection of investment to European countries with stronger
return on investment meant a reduced and narrower US focus
resulting in steady, if modest, growth for the region.
Quartix introduced two valuable analytical software features; in
2022 with EVolve and in 2023 with Quartix Check. Both products have
been well-received, and Quartix is set to amplify its efforts to
upsell these offerings in H2 2023. This promising momentum and
product innovation positions Quartix optimistically for the rest of
the year."
For further information, please contact:
Quartix ( www.quartix.com /en-gb ) 01686 806 663
Richard Lilwall, Chief Executive Officer
Emily Rees, Chief Financial Officer
finnCap (Nominated Adviser and Broker) 020 7200 0500
Matt Goode / Seamus Fricker (Corporate Finance)
Alice Lane / Sunila de Silva (Corporate Broking)
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation
596/2014.
Interim Financial Results Report
The Group's Interim Financial Statements for the 6 months ended
30 June 2023 are available in the "Investors" section of our
website at: www.quartix.com/en-gb/company/investors
About Quartix
Founded in 2001, Quartix is a leading supplier of
subscription-based vehicle tracking systems, software and services.
The Group provides an integrated tracking and telematics data
analysis solution for fleets of commercial vehicles and motor
insurance providers which improves productivity and safety and
which lowers costs by capturing, analysing and reporting vehicle
and driver data.
Quartix is based in the UK and is listed on the AIM market of
the London Stock Exchange (AIM:QTX).
Chairman's Statement
Introduction
I am pleased to report that growth of the subscription base,
both in the UK and overseas, continued to drive an increase in
annualised recurring revenues, which increased by GBP2.1m, at a
constant currency rate, to GBP28.0m at 30 June 2023. Group revenue
grew by 10% during the first half of 2023.
This growth was achieved despite adverse economic headwinds
impacting the confidence, and additional fleet investment of
existing customers, with rolling UK van registrations at the
beginning of 2023 matching record lows seen during the COVID-19
pandemic. In addition, attrition has been higher at 13.5% (2022:
11.6%), primarily due to an increase in business closures and
customers downsizing their fleet sizes. Price erosion on a constant
currency basis continued to improve and was 4.6% (2022: 4.8%).
Despite these market difficulties, each geographical market
registered increases in the subscription base for the period (see
table below). In the UK, where economic challenges are more
significant due to the larger subscription base, growth was
supported by a strong performance in new customer acquisition, with
6% year-on-year subscription base growth, and an increase in total
revenue of 3% to GBP9.1m (2022: GBP8.9m).
We also recorded our highest results in Europe following
accelerated investment into the region over the past two years.
Year-on-year subscription base growth in France was excellent at
32%, and revenue increased by 25% to EUR3.7m (2022: EUR3.0m).
Year-on-year subscription base growth in the other European
territories was also very strong at 53% respectively as our
operations continue to grow in Spain, Italy and Germany.
As part of a review on ensuring Quartix focuses on profitable
growth, the Group has redirected part of the investment and
resource from our wider US business in Q1 of 2023 to European
territories that present improved returns on investment in the
shorter term. The US strategy going forward will therefore have a
narrower, field sales approach, focused specifically on Texas. As a
result the growth was more modest at 2% year on year.
Subscription New subscriptions Customers New Customers
Base ** **
------------- ------------------ ---------- --------------
United Kingdom
2023 140,991 13,223 11,378 718
2022 133,020 14,814 11,520 800
Change 7,971 (1,591) (142) (82)
---------------- ------------- ------------------ ---------- --------------
France
2023 61,298 11,733 7,628 1,159
2022 46,387 8,178 6,262 1,157
Change 14,911 3,555 1,366 2
---------------- ------------- ------------------ ---------- --------------
Other European
Territories
2023 19,146 4,805 3,359 722
2022 12,505 3,856 2,560 740
Change 6,641 949 799 (18)
---------------- ------------- ------------------ ---------- --------------
USA
2023 30,352 3,786 3,972 496
2022 29,888 5,237 4,066 723
Change 464 (1,451) (94) (227)
---------------- ------------- ------------------ ---------- --------------
** Comparatives are June 2022
Quartix continues to build strong functionality into its upsell
capabilities. EVolve, launched in Q4 2022, uses fleet analytics to
assess migration opportunities to all-electric vehicle fleets.
Initial upsell to existing customers at Quartix has been good in
2023, with adopters from multiple sectors, but as anticipated local
government has been an early mover. Full case studies on these
results can be found on the Quartix website. The second, Quartix
Check, launched to the market in full in 2023, is a walk-around
vehicle condition monitoring tool. Whilst Quartix Check is in early
stages, the Board continue to focus on how best to maximise the
exposure to this new product across our customer base.
Financial Performance
Group revenue for the period increased by 10% to GBP14.6m (2022:
GBP13.3m); total fleet revenue now represents 98.9% of total
revenue (2022: 95.8%).
Adjusted EBITDA remained constant at GBP2.7m. Both operating
profit and profit before tax for the period fell to GBP2.4m
(restated 2022: GBP2.6m). Variances on profit were driven by an
exchange rate variance of GBP0.2m, a GBP0.2m increase in the
payroll costs associated with the Services cost centre after the
Jan 2023 inflationary pay rises that were awarded, rather than
additional headcount, and an increase in share based payment costs
of GBP0.2m, which does not affect adjusted EBITDA. Sales and
marketing costs have remained flat year-on-year on a cash basis,
but have improved as a percentage of sales.
Cash flow from operations after tax and investing activities, or
free cash flow, reduced to GBP1.4m (2022: GBP1.9m), primarily due
to a higher tax payment in April 2023 following the change in
accounting policy. For tax purposes the transition to the new
accounting policy in 2022 caused an exceptional decrease in
deductible costs; adding back costs already available for deduction
in prior years, which led to an increased tax charge for the year.
This caused the final instalment in April 2023 to be GBP0.5m higher
than last year. Net cash decreased to GBP3.2m at 30 June 2023
(2022: GBP3.9m), following the larger tax payment of GBP0.6m in
April. To further bolster free cash flow, one of the key priorities
for the business is improving stock days of the business in the
second half, now that pressures from the component shortages from
the past couple of years have eased.
Basic earnings per share were 4.21p (restated 2022: 4.66p). On a
diluted basis earnings per share were 4.16p (restated 2022:
4.63p).
Dividend Policy and Recommended Interim Dividend
Subject to satisfactory performance and market conditions, the
Board will consider a final dividend for the year with the
aggregate of the interim and final dividend set at approximately
50% of cash flow from operating activities, which is calculated
after taxation paid but before capital expenditure. The Board will
also consider distributing the excess of cash balances over GBP2m
by way of supplementary dividends. The surplus cash would be
calculated by taking the year end cash balance and deducting the
proposed regular dividend. The policy will be subject to
review.
The Board has recommended an interim dividend of 1.50p (2022:
1.50p) per share, GBP0.7m in aggregate. The amount is in line with
the Group's stated policy on ordinary dividend payment. This was
approved by the Board on 28 July 2023. The interim dividend will be
paid on 6 October 2023 to shareholders on the register on 11 August
2023. The ex-dividend date is therefore 10 August 2023.
Governance and the Board
The Board is comprised of three Non-Executive Directors: myself,
Jim Warwick, Russell Jones and two Executive Directors: Richard
Lilwall and Emily Rees following Laura Seffino stepping down from
the Board on 10 July 2023.
For further details regarding Corporate Governance and the
Board, please see the "Investors" section of our website
(www.quartix.com/en-gb/company/investors).
Outlook
Quartix's outlook for 2023 continues to be positive. Sales
execution excellence continues to be a key focus point for senior
management, using tools invested in in 2022 to drive further
resource into channels and territories that will provide a
profitable return. Quartix has a strong sales pipeline for the
second half for both our core platform and EVolve.
The high levels of recurring revenue and opportunities to grow
our operations in the UK and Europe underpins our confidence for
the rest of the year and beyond, although the Board is mindful of a
more uncertain economic climate in the medium term.
Management are closely monitoring the timings for the sunsetting
of the 2G networks in the UK and European markets. Since 2023 all
new units installed are 4G compatible products, which was an
operational decision to minimise the cost of upgrading our
customer's hardware in the future.
Considering the above outlook, the Group expects an accelerated
financial performance for the remainder of 2023, and its strong
financial position means the Board are confident in achieving
market expectations in 2023.
Paul Boughton
Chairman
Consolidated Statement of Comprehensive Income
30 June 30 June 31 December
2023 2022 2022
Restated
Unaudited Unaudited Audited
Notes GBP'000 GBP'000 GBP'000
---------- ----------- -------------
Revenue 2 14,623 13,333 27,517
Cost of sales (4,477) (3,675) (7,815)
Gross profit 10,146 9,658 19,702
Sales & Marketing expenses (3,182) (3,149) (6,429)
Administrative expenses (4,549) (3,920) (7,720)
Operating profit 2,415 2,589 5,553
Finance income receivable 9 3 8
Finance costs payable (15) (16) (31)
Profit for the period before taxation 2,409 2,576 5,530
Tax expense (373) (289) (489)
Profit for the period 2,036 2,287 5,041
Other Comprehensive (expense)/income:
Items that may be reclassified subsequently to profit or
loss:
Exchange difference on translating foreign operations 3 (139) (169)
Other comprehensive income for the year, net of tax 3 (139) (169)
Total comprehensive income attributable to the equity
shareholders of Quartix Technologies
plc 2,039 2,148 4,872
---------- ----------- ---------------
Adjusted EBITDA 3 2,689 2,675 6,051
-------------------------------------------------------------- ------ ---------- ----------- ---------------
Earnings per ordinary share (pence) 4
---------- ----------- ---------------
Basic 4.21 4.66 10.42
Diluted 4.16 4.63 10.38
---------- ----------- ---------------
Consolidated Statement of Financial Position
Company registration number: 06395159
30 June
30 June 2023 2022 31 December 2022
Restated Unaudited
Unaudited Unaudited Audited
Assets Notes GBP'000 GBP'000 GBP'000
=============== ==================== ==================
Non-current assets
Goodwill 14,029 14,029 14,029
Property, plant and equipment 786 834 845
Deferred tax asset 223 - 197
Contract cost assets 927 665 752
=============== ==================== ==================
Total non-current assets 15,965 15,528 15,823
Current assets
Inventories 1,585 1,733 1,989
Contract cost assets 4,259 3,370 3,536
Trade and other receivables 3,730 3,485 3,692
Cash and cash equivalents 3,249 3,897 5,063
--------------- -------------------- ------------------
Total current assets 12,823 12,485 14,280
Total assets 28,788 28,013 30,103
Current liabilities
Trade and other payables 3,509 3,691 3,650
Provisions 147 640 543
Contract liabilities 3,870 3,476 3,499
Current tax liabilities 629 269 896
--------------- -------------------- ------------------
8,155 8,076 8,588
Non-current liabilities
Lease liabilities 589 609 617
Deferred tax liabilities - 485 -
--------------- -------------------- ------------------
589 1,094 617
Total liabilities 8,744 9,170 9,205
Net assets 20,044 18,843 20,898
--------------- -------------------- ------------------
Equity
Called up share capital 6 484 484 484
Share premium account 6 6,332 6,332 6,332
Equity reserve 470 373 342
Capital redemption reserve 4,663 4,663 4,663
Translation reserve (335) (308) (338)
Retained earnings 8,430 7,299 9,415
--------------- -------------------- ------------------
Total equity attributable to equity shareholders
of Quartix Technologies plc 20,044 18,843 20,898
--------------- -------------------- ------------------
Consolidated Statement of Changes in Equity
Share Capital
Share premium redemption Equity Translation Retained
capital account reserve reserve reserve earnings Total equity
GBP'000 GBP,000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------- ------------ ------------ ------------- ------------- ------------- -------------
Balance at 31
December 2021 484 6,332 4,663 380 (170) 6,394 18,083
IFRS 15
adjustment - - - - 1 1,961 1,962
------------- ------------ ------------ ------------- ------------- ------------- -------------
Restated 31
December 2021 484 6,332 4,663 380 (169) 8,355 20,045
Shares issued - - - - - - -
Increase in
equity
reserve in
relation to
options
issued - - - 40 - - 40
Adjustment for
settled
options - - - (3) - - (3)
Recycle of
equity
reserve to
P&L - - - (44) - 44 -
Dividends paid - - - - - (3,387) (3,387)
------------- ------------ ------------ ------------- ------------- ------------- -------------
Transactions
with owners - - - (7) - (3,343) (3,350)
------------- ------------ ------------ ------------- ------------- ------------- -------------
Foreign
currency
translation
differences - - - - (139) - (139)
Profit for the
period - - - - - 2,287 2,287
------------- ------------ ------------ ------------- ------------- ------------- -------------
Total
comprehensive
income - - - - (139) 2,287 2,148
------------- ------------ ------------ ------------- ------------- ------------- -------------
Balance at 30
June 2022 484 6,332 4,663 373 (308) 7,299 18,843
------------- ------------ ------------ ------------- ------------- ------------- -------------
Shares issued - - - - - - -
Increase in
equity
reserve in
relation to
options
issued - - - 53 - - 53
Adjustment for
settled
options - - - (82) - 85 3
Recycle of
equity
reserve to
P&L - - - (2) - 2 -
Dividend paid - - - - - (725) (725)
------------- ------------ ------------ ------------- ------------- ------------- -------------
Transactions
with owners - - - (31) - (638) (669)
------------- ------------ ------------ ------------- ------------- ------------- -------------
Foreign
currency
translation
differences - - - - (30) - (30)
Profit for the
period - - - - - 2,754 2,754
------------- ------------ ------------ ------------- ------------- ------------- -------------
Total
comprehensive
income - - - - (30) 2,754 2,724
------------- ------------ ------------ ------------- ------------- ------------- -------------
Balance at 31
December 2022 484 6,332 4,663 342 (338) 9,415 20,898
------------- ------------ ------------ ------------- ------------- ------------- -------------
Increase in
equity
reserve in
relation to
options
issued - - - 156 - - 156
Adjustment for
exercised
options - - - (28) - 28 -
Dividend paid - - - - - (3,049) (3,049)
------------- ------------ ------------ ------------- ------------- ------------- -------------
Transactions
with owners - - - 128 - (3,021) (2,893)
------------- ------------ ------------ ------------- ------------- ------------- -------------
Foreign
currency
translation
differences - - - - 3 - 3
Profit for the
period - - - - - 2,036 2,036
------------- ------------ ------------ ------------- ------------- ------------- -------------
Total
comprehensive
income - - - - 3 2,036 2,039
------------- ------------ ------------ ------------- ------------- ------------- -------------
Balance at 30
June 2023 484 6,332 4,663 470 (335) 8,430 20,044
------------- ------------ ------------ ------------- ------------- ------------- -------------
Consolidated Statement of Cash Flows
30 June 30 June
2023 2022 31 December 2022
Unaudited Unaudited Audited
Notes GBP'000 GBP'000 GBP'000
========== ========== ===================
Cash generated from operations 5 2,090 1,947 4,170
Taxes paid (711) (68) (320)
========== ========== ===================
Cash flow from operating activities 1,379 1,879 3,850
Investing activities
Additions to property, plant and equipment (5) (25) (68)
Interest received 8 3 8
---------- ---------- -------------------
Cash flow from investing activities 3 (22) (60)
Cash flow from operating activities after investing activities
(free cash flow) 1,382 1,857 3,790
Financing activities
Repayment of lease liabilities (82) (73) (151)
Dividend paid (3,049) (3,387) (4,112)
---------- ---------- -------------------
Cash flow from financing activities (3,131) (3,460) (4,263)
Net changes in cash and cash equivalents (1,749) (1,603) (473)
Cash and cash equivalents, beginning of period 5,062 5,414 5,414
Exchange differences on cash & cash equivalents (64) 86 122
---------- ---------- -------------------
Cash and cash equivalents, end of period 3,249 3,897 5,063
---------- ---------- -------------------
Notes to the Financial Statements (unaudited)
1 Significant accounting policies
Basis of preparation
The financial information has been prepared in accordance with
recognition and measurement principles of International accounting
standards in conformity with the requirements of the Companies Act
2006 ("IFRS (UK)") and in accordance with those parts of the
Companies Act 2006 that are relevant to companies which report
under IFRS (UK). The accounting policies adopted are consistent
with those of the financial statements for the year ended 31
December 2022, as described in those financial statements. In
preparing these interim financial statements, the Board has not
sought to adopt IAS 34 "Interim financial reporting".
The figures for the six-month periods ended 30 June 2023 and 30
June 2022 have not been audited. The monetary amounts for the
six-months ended 30 June 2022 have been restated in line with a
change in policy in the recognition of equipment, installation and
carriage costs associated with contracts with customers under IFRS
15: 'Revenue from Contracts with Customers' (see Note 7).
The figures for the year ended 31 December 2022 have been
extracted from, but do not constitute, the consolidated financial
statements of Quartix Technologies plc for that year. The original
financial statements for the year ended 31 December 2022 have been
delivered to the Registrar of Companies and included an Auditors'
Report, which was unqualified and did not contain a statement under
section 498(2) or section 498(3) of the Companies Act 2006.
Going concern
The consequences of the war in Ukraine and the coronavirus
pandemic have materially and adversely disrupted the global
economic situation. The Company is taking appropriate action to
monitor, address and mitigate the uncertainties and increased risks
facing the Company as a result and have taken these additional
uncertainties into account in assessing the going concern
position.
The Board takes all reasonable steps to review and consider any
factors that may affect the ability of the Group to continue as a
going concern. The Group's forecasts and projections, taking
account of reasonably possible changes in trading performance, show
that the Group is able to generate sufficient liquidity. The Group
enjoys a strong income stream from its subscription base while
current liabilities include a substantial provision for deferred
revenue which is a non-cash item.
After assessing the forecasts and liquidity of the business, for
the next 18 months and the longer term strategic plans, the
Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable
future. The Group therefore continues to adopt the going concern
basis in preparing consolidated financial statements.
Contract Cost Assets
The Group incurs costs to fulfil it's customer contracts, which
include commission costs, equipment costs, installation costs and
carriage costs amongst other costs. Costs to fulfil a customer
contract are divided into:
-- costs that give rise to an asset; and
-- costs that are expensed as incurred.
When determining the appropriate accounting treatment for such
costs, the Group firstly considers any other applicable standards.
If those standards preclude capitalisation of a particular costs,
then an asset is not recognised under IFRS 15.
If other standards are not applicable to costs to fulfil a
customer contract, the Group applies the following criteria which,
if met, result in capitalisation of costs that:
-- directly relate to a contract;
-- generate or enhance resources that will be used in satisfying (or in continuing to satisfy)
performance obligations in the future; and
-- are expected to be recovered
The Group has determined that, where the relevant criteria are
met, that the commission costs, equipment costs, installation costs
and carriage costs are likely to qualify to be capitalised as costs
to fulfil a customer contract.
The Contract Cost Assets are amortised over the expected
contract period on a systematic basis that reflects the revenue
stream generated by them, and this cost is included in cost of
sales. The expected contract term has been calculated as an average
of the population of new orders in the year, and this calculation
will be reviewed annually.
At each reporting date, the Group determines whether or not the
Contract Cost Assets are impaired by comparing the carrying amount
of the asset with the remaining amount of consideration that the
Group expects to receive less the costs that relate to providing
services under the relevant contract.
2 Revenue
Revenues from external customers in the Group's major markets
have been identified based on the customer's geographical location
and are disclosed below.
30 June 2023 30 June 2022 31 December 2022
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
------------- ------------ ----------------
Geographical analysis by destination
United Kingdom 9,136 8,871 17,760
France 3,269 2,523 5,410
New European territories 527 433 1,060
United States of America 1,692 1,506 3,287
------------- ------------ ----------------
14,624 13,333 27,517
------------- ------------ ----------------
3 Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA)
30 June 2023 30 June 2022 Restated 31 December 2022
Unaudited Unaudited Audited
------------ --------------------- ----------------
GBP'000 GBP'000 GBP'000
Operating profit 2,415 2,589 5,553
Depreciation on property, plant and equipment, owned 41 75 124
Depreciation on property, plant and equipment, right of use 77 65 133
------------ --------------------- ----------------
EBITDA 2,533 2,729 5,810
Share-based payment expense (incl. cash settled) 156 (54) (1)
Cost of living payments - - 151
Provision for replacement of 3G units - - 91
------------ --------------------- ----------------
Adjusted EBITDA 2,689 2,675 6,051
------------ --------------------- ----------------
4 Earnings per share
The calculation of the basic earnings per share is based on the
profits attributable to the shareholders of Quartix Technologies
plc divided by the weighted average number of shares in issue
during the period. The earnings per share calculation relates to
continuing operations of the Group.
Fully diluted
Weighted Basic weighted Diluted
Profits average profit average profit
attributable number per share number of per share
to shareholders of shares amount shares amount
GBP'000 in pence in pence
----------------- ----------- ----------- -------------- ------------
Earnings per ordinary
share
Period ended 30
June 2023 2,039 48,382,178 4.21 49,025,795 4.16
Period ended 30
June 2022 (restated) 2,253 48,382,436 4.66 48,628,750 4.63
Year ended 31 December
2022 5,041 48,387,354 10.42 48,599,519 10.38
Adjusted earnings
per ordinary share
Year ended 31 December
2022 5,283 48,387,354 10.92 48,599,519 10.88
For diluted earnings per share, the weighted average number of
ordinary shares is adjusted to assume the conversion of all
dilutive potential ordinary shares. Dilutive potential ordinary
shares are those share options where the exercise price is less
than the average market price of the Company's ordinary shares
during the period.
To illustrate the underlying earnings for the year, the table
above includes adjusted earnings per ordinary share, which for 31
December 2022 excludes the GBP0.1m re-estimate of the 3G
replacement unit provision and the GBP0.2m cost of living payments
considered to be one off.
5 Note to the cash flow statement
Cash flow adjustments and changes in working capital:
30 June 2023 30 June 2022 31 December 2022
Unaudited Restated Unaudited Audited
GBP'000 GBP'000 GBP'000
------------ ------------------ ----------------
Profit before tax 2,409 2,577 5,530
Foreign exchange 78 (209) (256)
Depreciation 118 140 257
Interest income (8) (3) (8)
Lease interest expense 15 16 31
Loss on disposal of fixed asset - 28 29
Share based payment expense 156 38 92
------------ ------------------ ----------------
Operating cash flow before movement in working capital 2,768 2,587 5,675
(Increase)/decrease in trade and other receivables (268) (331) (516)
(Increase)/decrease in contract cost assets (899) (258) (524)
Decrease/(increase) in inventories 405 (403) (659)
(Decrease)/Increase in trade and other payables (312) 81 (99)
(Decrease)/Increase in contract liabilities 396 272 293
------------ ------------------ ----------------
Cash generated from operations 2,090 1,948 4,170
------------ ------------------ ----------------
6 Equity
Number of ordinary shares of
GBP0.01 each Share capital GBP'000 Share premium GBP'000
---------------------------------- --------------------- ---------------------
Allotted, called up and fully paid
At 1 January 2022 48,380,034 484 6,332
Shares issued 12,144 - -
---------------------------------- --------------------- ---------------------
At 30 June 2022 48,392,178 484 6,332
Shares issued - - -
---------------------------------- --------------------- ---------------------
At 31 December 2022 48,392,178 484 6,332
Shares issued - - -
================================== ===================== =====================
At 30 June 2023 48,392,178 484 6,332
================================== ===================== =====================
There were no shares issued in the period to 30 June 2023.
7 Explanation of change in accounting policy relating to IFRS 15
As highlighted in note 1, in 2022 the Group changed its
accounting policy in relation to costs in obtaining customer
contracts. For many years the Company has applied a very
conservative accounting policy of immediately expensing hardware
and associated installation and carriage costs. The new policy
recognises these incremental costs over their expected contract
term, on a systematic basis that more accurately reflects the
revenue stream generated by them. The capitalisation and subsequent
amortisation of the incremental costs will be more aligned to the
core principles in IFRS 15 and make the reported EBITDA more
comparable with that reported by companies with a similar business
model.
As at 31 December 2021, the restatement of the Group's net
assets was an increase of GBP1,962,000 to GBP20,045,000 from the
inclusion of a contract cost assets of GBP2,550,000 under IFRS 15,
being previously recognised as equipment, installation and carriage
costs incurred at the inception of the customer contract and now
being recognised over the contractual period, net of a deferred tax
liability of GBP588,000 .
The impact of capitalising incremental costs as per IFRS 15 on
the financial statements :
A Consolidated Statement of Financial Position
1 January 2022 As previously reported Adjustments As Restated
GBP'000 GBP000 GBP'000
---------------------- ----------- -----------
Deferred tax assets 131 (131) -
Contract cost assets 1,185 2,550 3,735
Other assets 24,823 - 24,823
---------------------- ----------- -----------
Total assets 26,139 2,419 28,558
---------------------- ----------- -----------
Deferred tax liabilities - (457) (457)
Other liabilities (8,056) - (8,056)
---------------------- ----------- -----------
Total liabilities (8,056) (457) (8,513)
---------------------- ----------- -----------
Retained earnings 6,394 1,961 8,355
Other 11,689 1 11,690
---------------------- ----------- -----------
Total Equity 18,083 1,962 20,045
---------------------- ----------- -----------
30 June 2022 As previously reported Adjustments As Restated
GBP'000 GBP000 GBP'000
---------------------- ----------- -----------
Deferred tax assets 26 (26) -
Contract cost assets 1,263 2,772 4,035
Other 23,978 - 23,978
---------------------- ----------- -----------
Total assets 25,267 2,746 28,013
---------------------- ----------- -----------
Deferred tax liabilities - (485) (485)
Other (8,685) - (8,685)
---------------------- ----------- -----------
Total liabilities (8,685) (485) (9,170)
---------------------- ----------- -----------
Retained earnings 5,081 2,218 7,299
Other 11,501 43 11,544
---------------------- ----------- -----------
Total Equity 16,582 2,261 18,843
---------------------- ----------- -----------
B Consolidated Statement of Comprehensive Income
For the year ended 30 June 2022 As previously reported Adjustments As Restated
GBP'000 GBP000 GBP'000
---------------------- ----------- -----------
Revenue 13,333 - 13,333
Cost of sales (3,855) 180 (3,675)
Other expenses (7,082) - (7,082)
Tax expense (366) 77 (289)
---------------------- ----------- -----------
Net profit 2,030 257 2,287
Other comprehensive income (181) 42 (139)
---------------------- ----------- -----------
Total Comprehensive income 1,849 299 2,148
---------------------- ----------- -----------
Earnings per ordinary share (pence) 4.20 0.53 4.66
Diluted earnings per ordinary share (pence) 4.17 0.53 4.63
---------------------- ----------- -----------
C Consolidated Statement of Cash Flows
For the year ended 30 June 2022 As previously reported Adjustments As Restated
GBP'000 GBP000 GBP'000
---------------------- ----------- -----------
Profit 2,030 257 2,287
Adjusted for:
* tax expense 366 (77) 289
---------------------- ----------- -----------
Profit before tax 2,396 180 2,576
Changes in contract cost assets (78) (180) (258)
Other (449) - (371)
Cash generated from operations 1,947 - 1,947
---------------------- ----------- -----------
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END
IR QVLFLXDLXBBZ
(END) Dow Jones Newswires
July 31, 2023 02:00 ET (06:00 GMT)
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