TIDMTPX
RNS Number : 0499L
Panoply Holdings PLC (The)
20 December 2018
20 December 2018
The Panoply Holdings PLC
("The Panoply", or the "Group")
Interim results
The Panoply, a digitally native technology services company, is
pleased to announce its results for the six month period ending 30
September 2018.
Financial highlights*
-- Revenue up 48% to GBP10.1m (2017: GBP6.9m)
-- Adjusted EBITDA** up 57% to GBP1.9m (2017: GBP1.2m)
-- Adjusted EBITDA** excluding central costs up 66% to GBP2.2m
(2017: GBP1.3m)
-- Adjusted profit after tax*** up 54% to GBP1.8m (2017: GBP1.2m)
-- Earnings per share of 3.4p up from 2.5p (based on total
shares in issue at Admission)
-- Cash at bank increased 14% to GBP4.0m (2017: GBP3.2m)
Operational highlights
-- Significant growth in number of customers with 90 customers
billed in the six month period to 30 September 2018 compared
with 114 customers billed in the 15 months to 31 March
2018
-- 41% of customers billed in the six months to 30 September
2018 were also billed in 2016 and 2017 demonstrating
the long standing relationships that the Group is building
-- Government sector work grew by 250% and has increased
from 13% of total revenue in the 15 month period to 31
March 2018 to 28% in the 6 month period to 30 September
2018 highlighting the strength of growth in that sector
Post-period highlights
-- Completion of the IPO and an oversubscribed fundraise
raising GBP5m in new equity for the Group
-- Completion of the acquisitions of Manifesto Digital Limited,
Not Binary Limited, Questers Global Group Limited and
Bene Agere Norden AS ("Acquisitions") at IPO
-- Subsequent completion of the acquisition of Deeson Group
Holdings Limited on 17 December 2018 for an initial consideration
of GBP1.35m in shares
*All figures are reported proforma and on the same basis as in
Panoply's recent Admission Document (see note 1)
** Adjusted EBITDA is a non-IFRS measure that the Company uses
to measure its performance and is defined as earnings before
interest, taxation, depreciation and amortisation and after add
back of exceptional items related to the IPO and acquisitions made
by the Group
*** Adjusted profit before tax includes an add back in respect
of exceptional items related to the IPO and acquisitions made by
the Group
Neal Gandhi, Chief Executive Officer, commented:
"4 December 2018 was a seminal moment for The Panoply as we
achieved our goal of listing on AIM. I would like to thank the
founders and staff of the four pre-IPO companies who chose to come
on our journey with us and for allowing us to create the platform
that we now have. Although the four companies recently acquired
only became legally part of the Group on the day of the IPO, the
companies have been working together for around 18 months, so the
strong results reported here are, at least in part as a result of
that collaboration, as well as their own organic growth.
We are pleased to have seen the number of customers we work with
continue to grow, a strong leading indicator. Alongside this, a
large proportion of our customers billed in the six months to 30
September 2018 we have also worked with for the previous two years,
demonstrating client longevity. All three of the sectors we work
with, commercial, Government and NGOs, have grown, driven by our
outcomes-based agile approach.
On 17 December 2018, we completed the acquisition of Deeson
Group Holdings Limited ("Deeson"), a digital agency specialising in
high profile content-managed web sites and digital products. The
acquisition is expected to be immediately earnings enhancing and is
early evidence of our ability to execute on our strategy of
acquiring complementary companies in order to grow our
capabilities. We are excited about the future and our ability to
continue to grow. We look forward to continuing to deliver
excellent outcomes for clients at a pace and price they expect to
pay."
Enquiries:
The Panoply Holdings
Neal Gandhi (CEO) Via Alma PR
Oliver Rigby (CFO)
Stifel Nicolaus Europe Limited +44 (0)207 710 7600
(Nomad and Broker)
Fred Walsh
Alex Price
Neil Shah
Luisa Orsini Baroni
Alma PR panoply@almapr.co.uk
(Financial PR) +44(0)203 405 0206
Josh Royston 07780 901979
Rebecca Sanders-Hewett
Susie Hudson
About The Panoply
The Panoply is a digitally native technology services company,
built to service clients' digital transformation needs. Founded in
2016, with the aim of identifying and acquiring best-of-breed
specialist information technology and innovation consulting
businesses across Europe, the Group collaborates with its clients
to deliver the technology outcomes they're looking for at the pace
that they expect and demand.
www.thepanoply.com
Chief Executive's Review
I am pleased to be able to report our interim results for the
Panoply Group which relate to the period before we became a public
company.
Performance against growth strategy: acquisitions
Following our Admission to trading on AIM on 4 December 2018 and
the resulting completion of our target acquisitions, alongside the
acquisition of Deeson announced this week, the Group now
comprises:
-- TPX Bene Agere: an Oslo-based strategy and management
consultancy;
-- TPX Manifesto Digital: an award-winning London-based
digital experience agency;
-- Deeson: a leading digital agency, intended to rebrand
as TPX Manifesto in the coming months;
-- TPX Not Binary: an award-winning London-based IT consultancy
focused on digital transformation; and
-- TPX Questers: an award-winning provider of onshore and
nearshore agile software development services
Combined revenues (excluding Deeson) for the six months to 30
September 2018 of GBP10.1m represented an increase of 48% over the
corresponding period last year on a pro-forma basis. Adjusted
EBITDA was particularly strong at GBP1.9m, an increase of GBP0.7m
driven by organic growth.
Performance against growth strategy: The Panoply multiplier
effect
Whilst the four initial acquisitions were only completed on 4
December 2018, the businesses had already been working in tandem
and with the ethos of The Panoply for a number of months. These
half-year results reflect, in part, those combined efforts and
demonstrate the success of the unified Group as well as the
validity of our business model.
The Group significantly increased customer count with 90
customers billed in the six months to 30 September 2018 compared
with 114 customers billed in the 15 months to 31 March 2018. 41% of
customers billed in the six months to 30 September 2018 were billed
in 2016 and 2017 demonstrating our longevity within strategic
clients.
The results have been driven across the Group but with a
particular increase in work in the public sector, and important new
client wins including work streams that the individual companies do
not believe they would have secured without being part of the wider
offering. This includes a new brief with the DVLA which now
represents the Group's largest single client, with work commencing
in the second half of the financial year. We have also secured
further new client wins, including Seatgeek, News International and
Christian AID which we expect to deliver additional revenue in the
second half of the year and also support our longer-term
growth.
The quality of our work continues to be recognised with TPX
Manifesto recently winning agency of the year at the 2018 Drum
awards and TPX Not Binary being recognised earlier in the year by
winning a WCIT award.
Admission to AIM
The Group's IPO was clearly a seminal moment, as it led to the
formation of The Panoply and gives us the financial strength and
stability to grow our business. It provides us with the necessary
working capital to invest in each of the business units as well as
providing an equity base to achieve our acquisition ambitions. The
IPO took place during particularly volatile market conditions and I
would like to thank our new shareholders for their support and for
sharing our confidence in the Group's prospects.
Outlook
As we enter the second half of the year the business has
considerable momentum. The acquisition of Deeson provides a first
earnings enhancing acquisition for the Group post-IPO. The Board
continues to evaluate further acquisitions.
The Directors are encouraged by the strong year on year growth
and are confident of meeting full year expectations. Following
completion of the IPO and the acquisitions, The Panoply has put in
place a Board and central team to provide strong governance and
that can continue to build the Group through both organic and
acquisitive growth. The investment in the central team is expected
to reduce the Group's net operating margin but the group is well
operationally geared to execute of future growth plans and the
overall impact of central overhead will reduce as we scale. The
Group will remain profitable and cash generative during this
period.
The Panoply's goal is to create a leading digitally native
technology services company across Europe. The IPO provides the
platform for this and we are operating in a fast growing market
where clients are looking to digitally transform their businesses
for the automation age.
Financial review
The financial information set out in this announcement has been
prepared on the basis that the Acquisitions completed on IPO were
recognised as part of the Group for the entire period and the
entire comparative periods, albeit the entities were not under the
control of the Company during this time.
The Group has seen significant growth in year on year revenue,
which has resulted in strong growth in Adjusted EBITDA and profit
after tax.
There has been revenue growth in all five of our service lines.
Currently our three largest service lines are Experience, XaaS and
Transformation, which accounted for 97% of revenue in the 6 month
period to 30 September 2018.
Our emerging service lines in Automation and Intelligence are
areas where we intend to invest over the coming 12 months and we
hope to see growth in these as we move forward.
Cash remained strong at the end of the period. Following the IPO
a significant portion of the cash on the subsidiary company's
balance sheets was paid to the vendors under the terms of the
Acquisitions but this was replenished with the proceeds of the
oversubscribed placing (raising GBP5m of gross proceeds). The Group
remains cash generative and has no debt.
Trading post-period end has continued to be strong and we are
trading in line with our expectations. As a result of the expected
growth in EBITDA of the businesses acquired at the IPO, and as set
out in the Group's Admission Document, we anticipate that there
will be significant further earn out consideration to be issued in
respect of the Acquisitions. Any consideration will be satisfied in
shares over a 24 month period at the higher of the market price or
74p (being the placing price at the time of the IPO).
It should be noted that revenue in Norway in the six months to
30 September 2018 reduced compared with the earlier period which
benefited from a major one off contract with Digital Norway in
2017. However that engagement has positioned the Group at the
forefront of digital transformation in the region and we anticipate
will help the Group to scale in the region as a consequence.
Summary of The Panoply's services
Experience - using customer-centered insight in the design and
creation of digital products and services centered on the needs of
the people that use them. Helping organisations plan and improve
the experience of their customers and initiating the projects and
programmes that will transform this at scale.
Intelligence - enabling intelligent business through helping
organisations to gather, analyse, interpret and make decisions
based on their data. From straightforward business intelligence and
management information through to machine learning, artificial
intelligence and predictive and prescriptive analysis.
XaaS - providing access to the talent, platforms and
methodologies that allow organisations to scale innovation and
realise efficiency, repeatability and reliability in their core
operations. Underpinned by several key technology partnerships such
as Amazon Web Services, Microsoft Azure, Google Cloud Platform and
Digital Experience Management with Acquia.
Transformation - partnering with organisations to help them
increase their digital maturity and become truly digital
businesses. This can involve the replacement of large platforms,
the introduction of new working methodologies and the complete
reinvention of products services and business models. The Panoply
may help organisations with aspects of their transformation or
partner with them for aspects of it.
Automation - The Panoply's automation services seek to enable
business growth through the use of data in marketing to enable
automated decision-making for communications and to drive
efficiency through the mapping and automating of existing
processes. In marketing, automation technology is used to interpret
large volumes of data and deliver highly targeted communications
across multiple channels, mapping data to customer segments based
on previous interactions. Complex multi-faceted journeys can be
managed through mapping the customer experience and linking this to
these automated journeys. Using Robotic Process Automation (RPA)
existing business processes can be automated using a digital
workforce freeing up staff from highly repetitive tasks.
Neal Gandhi
Chief Executive Officer
Combined Statement of comprehensive income
Six months ended 30 September
2018
6 months
6 months to 30 15 months
to 30 September September to 31 March
2018 2017 2018
Unaudited Unaudited Audited
Notes GBP'000 GBP'000 GBP'000
Revenue 2 10,130 6,858 18,488
Cost of sales (6,341) (4,282) (11,771)
----------------- ----------- -------------
Gross profit 3,789 2,576 6,717
Administrative costs (1,918) (1,403) (3,489)
Other income 58 53 103
----------------- ----------- -------------
Adjusted EBITDA 2 1,929 1,226 3,331
Depreciation (51) (44) (123)
Costs directly attributable
to the business combination (551) (37) (527)
Other exceptional items - - (307)
----------------- ----------- -------------
Operating profit 1,327 1,145 2,374
----------------- ----------- -------------
Finance income 7 6 12
Finance costs (5) (6) (2)
----------------- ----------- -------------
Net finance costs 2 - 10
----------------- ----------- -------------
Profit before tax 1,329 1,145 2,384
Taxation 54 (142) (383)
Profit for the period 1,383 1,003 2,001
----------------- ----------- -------------
Items that may subsequently
be transferred to profit and
loss
Exchange differences on translation
of foreign operations 67 (1) (132)
----------------- ----------- -------------
1,459 1,002 1,869
----------------- ----------- -------------
Earnings per share (adjusted)
Basic (pence) 3 3.4 2.5 4.9
Combined Statement of financial
position
As at 30 September 2018
30 September 30 September 31 March
2018 2017 2018
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Property, plant and equipment 264 303 295
Intangible assets 20 18 20
------------- ------------- ---------
284 321 315
------------- ------------- ---------
Current assets
Trade and other receivables 4,083 2,282 2,962
Inventory 3 1 5
Cash and cash equivalents 3,960 3,203 3,462
------------- ------------- ---------
8,046 5,486 6,429
------------- ------------- ---------
Total assets 8,330 5,807 6,744
------------- ------------- ---------
EQUITY AND LIABILITIES
EQUITY
Issued share capital - - -
Share premium 1,130 490 490
Foreign Exchange Reserve 23 (3) (44)
Other reserves 192 125 192
Retained earnings 4,136 2,896 2,918
------------- ------------- ---------
Total equity 5,481 3,508 3,556
------------- ------------- ---------
LIABILITIES
Non-current liabilities
Deferred tax liabilities 9 42 9
------------- ------------- ---------
Total non-current liabilities 9 42 9
------------- ------------- ---------
Current liabilities
Trade and other payables 1,698 1,057 1,870
Current tax liabilities 1,142 1,200 1,309
Total current liabilities 2,840 2,257 3,179
------------- ------------- ---------
Total liabilities 2,849 2,299 3,188
------------- ------------- ---------
Total equity and liabilities 8,330 5,807 6,744
============= ============= =========
Combined Statement of cash flow
As at 30 September 2018
6 months
6 months to 30 15 months
to 30 September September to 31 March
2018 2017 2018
Unaudited Unaudited
GBP'000 GBP'000 GBP'000
Cash flows from operating activities:
Profit before tax 1,329 1,145 2,384
Depreciation of property, plant
and equipment 51 44 123
Profit on disposal of property,
plant and equipment - - 6
Share based payments - - 9
Foreign exchange losses/(gains) 161 (12) (126)
Finance income (7) (6) (12)
Finance expense 5 6 (2)
------------------ --------------- -------------
1,539 1,177 2,382
Working capital adjustments
Increase in trade and other receivables (1,122) (259) (710)
Decrease/(increase) in trade
and other payables (340) 448 1,054
Decrease/(increase) in inventory 2 1 (3)
------------------ --------------- -------------
(1,460) 190 341
Tax paid (39) (49) (36)
------------------ --------------- -------------
Net cash generated from operating
activities 40 1,318 2,687
------------------ --------------- -------------
Cash flows from investing activities:
Interest received 7 6 12
Additions to property, plant
and equipment (19) (18) (80)
Net cash used in investing activities (12) (12) (68)
------------------ --------------- -------------
Net cash used from financing
activities
Issue of ordinary share capital
net of issue costs 640 490 490
Movement in other reserves - - 132
Dividends paid to former owners
of acquired subsidiaries (165) (618) (1,375)
Net interest paid (5) (6) 2
------------------ --------------- -------------
Net cash generated from/ (used)
in financing activities 470 (134) (751)
------------------ --------------- -------------
Net increase in cash and cash
equivalents 498 1,172 1,868
------------------ --------------- -------------
Cash and cash equivalents at
beginning of the period 3,462 2,031 1,594
------------------ --------------- -------------
Cash and cash equivalents at
end of the period 3,960 3,203 3,462
================== =============== =============
1. Basis of preparation
The Acquisition Subsidiaries comprise:
-- Bene Agere Norden AS - incorporated in Norway on 27 June 2012.
-- Manifesto Digital Limited - incorporated in England and Wales on 19 December 2011.
-- Not Binary Limited - incorporated in England and Wales on 23 March 2017.
-- Questers Global Group Limited - incorporated in England and Wales on 22 June 2012.
The Panoply Holdings PLC ("the Company") entered into share
purchase agreements to acquire the entire share capital of the
Acquisition Subsidiaries. The agreements were conditional upon
Admission of the Company's shares to trading on AIM and as a result
completed on the day of the Company's IPO on 4 December 2018. The
consideration was paid by way of shares in the Company and
cash.
The Combined historical financial information has been prepared
on the basis that the Acquisition Subsidiaries were recognised as
part of the Group for the entire period since their respective
dates of incorporation, albeit that the entities were not under the
control of the Company during this time. Accordingly, no share
capital and individual reserves have been shown for the Acquisition
Subsidiaries and the aggregate share capital and share premium
attributable to the Acquisition Subsidiaries has been disclosed as
other reserves. No adjustment has been made for the consideration
paid since 30 September 2018 for the acquisitions, the fair value
of the assets and liabilities to be acquired, goodwill or other
intangible assets arising.
The Combined historical financial information does not include
any information in respect of the Deeson Group Holdings Limited
business acquired on 17 December 2018.
The Combined historical financial information in this report has
been prepared using accounting policies consistent with
International Financial Reporting Standards (IFRS) as adopted by
the European Union and IFRS Interpretations Committee (IFRIC)
interpretations except for IFRS 3 "Business Combinations" and IFRS
10 "Consolidated Financial Statements" in relation to the
accounting for the acquisition and consolidation of the
subsidiaries which will be required in the annual accounts for the
period to 31 March 2019. IFRS is subject to amendment and
interpretation by the International Accounting Standards Board
(IASB) and IFRIC and there is an ongoing process of review and
endorsement by the European Commission. The financial information
has been prepared on the basis of IFRS that the Directors expect to
be adopted by the European Union and applicable as at 31 March
2019.
The Group has chosen not to adopt IAS 34 - Interim Financial
Statements, in preparing the Combined historical financial
information.
The Group has adopted IFRS 9 "Financial Instruments" and IFRS 15
"Revenue from Contracts from Customers" which are new standards
applicable mandatory for the period ending 31 March 2019. The Group
has not as yet adopted IFRS 16 "Leases" which is a new standard
applicable mandatory for periods beginning 1 January 2019 and are
currently assessing the financial impact to the Group.
The Group has calculated the adjusted basic earnings per share
based on the number of shares in issue at the date of Admission on
the AIM market.
Non-Statutory accounts
The financial information set out in this interim report does
not constitute the Group's statutory accounts, within the meaning
of Section 434 of the Companies Act 2006. The statutory accounts of
the Company for the period ended 31 March 2018 have been delivered
to the Registrar of Companies. The auditors reported on those
accounts; their report was unqualified, did not contain a statement
under either Section 498 (2) or Section 498 (3) of the Companies
Act 2006 and did not include references to any matters to which the
auditor drew attention by way of emphasis.
The financial information for the six months ended 30 September
2018 and 30 September 2017 is unaudited.
2. Service Line Reporting
The Board of Directors considers the business from a services
perspective. Management separately considers services split between
Experience, XaaS, Intelligence, Transformation and Automation.
Strategic decisions regarding future investment is based on the
split of services and potential growth opportunities.
(i) An analysis of turnover from external customers by geographical market is given below:
15 months
30 September 30 September to 31 March
2018 2017 2018
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
United Kingdom 8,210 5,153 14,574
EU 116 219 71
Norway 1,090 1,138 2,893
Other 714 348 950
Total Revenue 10,130 6,858 18,488
(ii) An analysis of turnover from external customers by sectors is given below:
15 months
30 September 30 September to 31 March
2018 2017 2018
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Commercial 5,519 4,955 12,720
Government 2,843 805 2,443
NGO 1,768 1,098 3,325
Total Revenue 10,130 6,858 18,488
---------------- ---------------- ---------------
(iii) An analysis of turnover by segments is shown below:
15 months
30 September 30 September to 31 March
2018 2017 2018
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Experience 2,342 2,046 4,681
XaaS 3,408 2,781 7,096
Transformation 4,095 2,031 6,204
All other segments 285 - 507
Total Revenue 10,130 6,858 18,488
Total Adjusted EBITDA
15 months
30 September 30 September to 31 March
2018 2017 2018
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Experience 689 406 1,163
XaaS 459 297 814
Transformation 977 603 1,515
All other segments (197) (80) (161)
Total Adjusted EBITDA 1,929 1,226 3,331
3. Adjusted earnings per share
15 months
30 September 30 September to 31 March
2018 2017 2018
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Profit 1,383 1,003 2,001
Profit for the purposes of basic
and diluted profit
per share being net profit attributable
to equity
shareholders
Number of shares
For the purpose of basic profit
per share
Based on number of shares at
Admission 40,601,642 40,601,642 40,601,642
Basic earnings per share (p) 3.4 2.5 4.9
4. Events after the reporting period
a) Business combinations
The Company entered into share purchase agreements with the
sellers of the following companies on the dates noted below:
-- Bene Agere Norden AS - SPA entered on 26 April 2018
-- Manifesto Digital Limited - SPA entered on 10 May 2018
-- Not Binary Limited - SPA entered on 20 April 2018
-- Questers Global Group Limited - SPA entered on 11 May 2018
The transactions completed upon Admission of the shares of the
Company to trading on AIM on 4 December 2018 and resulted in
18,799,065 Ordinary Shares being issued to the vendors.
On 17 December 2018 the Company entered into a share purchase
agreement to acquire Deeson Group Holdings Limited resulting in the
issue of a further 1,636,363 Ordinary Shares.
b) Bonus issue of shares
On 16 October 2018 the Company declared a bonus issue of 480
ordinary shares for every 1 ordinary share held at 16 October 2018
increasing the Company's issued ordinary share capital to 5,483,400
Ordinary 1 pence shares. In order to pay-up the nominal value of
the ordinary shares issued under the bonus issue, share premium of
the Company in an amount equal to GBP54,720 was used, reducing the
share premium account of the Company by the same amount.
c) Gifting and cancellation of shares
On 18 October 2018, Oliver Rigby and Neal Gandhi transferred
192,400 Ordinary Shares and 288,600 Ordinary Shares respectively to
the Company for nil consideration. In aggregate 481,000 Ordinary
Shares were transferred to the Company. On 18 October 2018
(following the Company's re-registration as a public limited
company), the share capital of the Company was decreased from
5,483,400 Ordinary Shares to 5,002,400 Ordinary Shares by the
cancellation of 481,000 Ordinary Shares pursuant to section 662 of
the Act.
d) Bonus issue of shares
On 23 November 2018 the Company declared a bonus issue of 2
ordinary shares for every 1 ordinary share held at 23 November 2018
increasing the Company's issued ordinary share capital to
15,045,822 Ordinary 1 pence shares. In order to pay-up the nominal
value of the ordinary shares issued under the bonus issue, share
premium of the Company in an amount equal to GBP100,305.48 was
used, reducing the share premium account of the Company by the same
amount.
e) IPO and Placing
On 4 December the Company completed an IPO on AIM and completed
a placing to raise gross proceeds of GBP5m. This resulted in a
further issue of 6,756,755 Ordinary Shares. Following completion of
the IPO the total number of shares in issue was 40,601,642.
f) Issue of Options
At the time of the IPO, the Company also granted options over
3,927,788 Ordinary Shares. The fully diluted number of Ordinary
Shares following Admission was 44,529,430.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR BBLBLVLFFFBE
(END) Dow Jones Newswires
December 20, 2018 02:00 ET (07:00 GMT)
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