TIDMIGP
RNS Number : 4268U
Intercede Group PLC
25 November 2019
25 November 2019
INTERCEDE GROUP plc
('Intercede', the 'Company' or the 'Group')
Interim Results for the Six Months Ended 30 September 2019
Intercede, the leading specialist in digital identity,
credential management and secure mobility, today announces its
interim results for the six months ended 30 September 2019.
The financial information in the following pages reflects the
impact of IFRS 16 Leases. IFRS 16 has been applied retrospectively
and the impact on each line of the Consolidated Financial
Statements is explained in Notes 1 and 6.
Financial Highlights
-- Revenues increased by 5% to GBP4.4m (2018: GBP4.2m)
reflecting a strong end to the half with orders received from both
new and existing customers.
-- Operating expenses reduced by 9% to GBP4.3m (2018: GBP4.8m),
which reflects staff cost savings and continued tight control of
overheads.
-- A return to operating profit of GBP25,000 (2018: GBP609,000
operating loss), the first time this has been achieved since the
corresponding period six years ago.
-- A profit for the period of GBP0.2m (2018: profit of GBP0.1m)
resulted in a basic profit per share of 0.4p and a fully diluted
profit per share of 0.3p (2018: basic and fully diluted profit per
share of 0.2p).
-- Cash balances of GBP5.2m at 30 September 2019 have increased
by GBP1.5m over the last 12 months, primarily driven by positive
cash generation from operations.
Operating Highlights
-- The sales team has been strengthened, including the hiring of
a new partner manager who is tasked with enhancing our partner
program. The establishment and further development of partner
relationships is critical for the Group's future growth
prospects.
-- Launch of the Innovation Hub, an internal team tasked with
guiding the future architecture and functionality of Intercede
products and improving how we develop and deliver software and
services.
-- Release of MyID Professional; a simplified version of MyID
targeting the large addressable market of mid-market enterprises to
enable them to step up to the strongest form of user authentication
with least cost and risk.
Chuck Pol, Chairman, said:
"The results we are announcing today do not represent the full
story of the progress that has been made to refocus the Group's
strategy towards sustainable revenue growth and profitability.
The return to a first half operating profit, the first time this
has been achieved for six years, is an important milestone. The
laser focus on our new strategy is evident, particularly in the
growth of our cash balances and our dedication to writing the best
code in the industry. The release of MyID Professional represents a
more scalable version of MyID that gives our customers and partners
the strongest form of user authentication in a simplified lower
cost format.
There remains further work to be done, but the direction of
travel and momentum in the business reflects the considerable
achievements of the Intercede Team to date - we remain on
track."
ENQUIRIES
Intercede Group plc Tel. +44 (0)1455 558 111
Klaas van der Leest, Chief Executive
Andrew Walker, Finance Director
finnCap Tel. +44 (0)20 7220 0500
Stuart Andrews, Corporate Finance
Simon Hicks, Corporate Finance
About Intercede
Intercede is a UK-headquartered, AIM listed (LSE:IGP)
cybersecurity company with a US office in Reston, VA.
Founded more than 20 years ago, Intercede has continued to
innovate its software platform. Today, MyID(R) credential
management software helps governments and enterprises around the
world issue and lifecycle manage millions of citizen and workforce
digital identities. Interoperable identity management software
facilitates strong multi-factor authentication across mobile
devices, smart cards, USB tokens and virtual smart cards.
It is our vision to safeguard the integrity of connected
workforces, supply-chains, citizens and industrial technologies for
the world's businesses and governments that will not compromise on
cybersecurity.
For more information visit: www.intercede.com
The information communicated in this announcement contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) No. 596/2014.
INTERCEDE GROUP plc
('Intercede', 'the Company' or 'the Group')
Interim Results for the Six Months Ended 30 September 2019
Interim Management Review
Introduction
As noted in the Annual Report for the year ended 31 March 2019,
action has been taken by the new management team to refocus the
Group's strategy towards sustainable revenue growth and
profitability. Evidence of this turnaround has been visible inside
the business for some time and is now increasingly evident in the
financial performance. Revenues for the six months ended 30
September 2019 are 5% higher when compared to the same period last
year. There has been a 9% fall in operating expenses versus the
same period last year and it is pleasing to note that cash balances
have increased from GBP3.6m to GBP5.2m over the past year. The
return to a first half operating profit, the first time this has
been achieved in six years, is an important milestone and validates
the new strategy and its execution.
Strategy
In the 2019 Annual Report we also talked about an outlook that
focuses on organic growth through the execution of a strategy
centred around colleagues, customers, channels and cash. Actually,
this 4C strategy is missing a fifth 'C', which is 'code'. Intercede
takes great pride in having colleagues who are able to write the
best code in the industry to satisfy some of the most demanding
customers in the world, including industry majors as well as
governments, the military and banks.
1. Colleagues
Staff motivation remains a priority and an Employee Working
Group has been established to follow up on regular periodic
employee surveys and turn suggestions for improvement into actions.
We continue to provide support to colleagues wherever it is needed
to ensure a good work/life balance and to empower them to continue
to deliver strong results. We appreciate and continue to be
impressed by the considerable achievements of our colleagues.
Over the period, progress has been made in strengthening
specific areas of the business, particularly the sales team with
new additions in the UK and US offices. We are also pleased to
welcome Rob Chandhok back to the Intercede Board as an independent
Non-Executive Director. Rob served as a Non-Executive Director
between April 2015 and January 2017 and brings more than 20 years
of experience and expertise in software and embedded systems.
2. Customers
As outlined below in the Financial Results section, we have
received some significant follow on orders from existing customers,
which provides tangible evidence our secure credential management
software continues to deliver measurable business value.
We have sold three new deployments to the US Navy, US Airforce
and one of the largest US wireless network operators. All of these
deals were for our traditional smartcard solution although it
should also be noted that we are continuing to see orders, along
with strong interest and bid activity, for Derived PIV solutions.
Derived PIV is effectively mobile PIV and enables a cryptographic
credential to be passed into the secure area of a mobile device,
instead of a traditional smartcard. With Derived PIV, US Federal
government and military personnel have the flexibility to use their
mobile devices as an alternative factor of strong authentication in
a NIST SP800-157 and FIPS 201-2 compliant manner.
3. Channels
The establishment and further development of partner
relationships is critical for the Group's future growth prospects.
MyID is a Credential Management System (CMS) that forms part of a
wider identity ecosystem, so technology partnerships are crucial to
ensure that MyID works with the devices and technology our
customers want to use.
Intercede also utilises its global network of reseller partners
to provide the global footprint to locally deliver the cyber
security solutions our customers need. As part of the strengthening
of the sales function we have hired a new partner manager who is
tasked with enhancing our partner program. This will be designed to
engage, enable and reward partners for their commitment to
expanding our reach into targeted markets. It will include core
product training, joint marketing support and the establishment of
a partner portal (for online support) and a partner advisory board
to better inform the MyID product roadmap.
Good progress has been made in the past six months working
closely with technology as well as channel partners on new
opportunity generation in our chosen markets.
4. Code
Innovation is in Intercede's DNA and recently we launched the
Innovation Hub, an internal team tasked with two primary goals:
1. To guide the future architecture and functionality of Intercede products.
2. To improve how we develop and deliver software and services.
The prementioned US identification standards for Federal
employees and contractors (NIST SP800-157 and FIPS 201-2) are set
to evolve further with the forthcoming FIPS 201-3 update, which
proposes the expansion of Derived PIV credentials onto a wider
range of devices. FIPS 201 compliance has been of strategic
importance to Intercede since it was created and the Innovation Hub
team are looking at FIDO authentication, which is likely to be
included as an option under FIPS 201-3. The FIDO Alliance is made
up of hundreds of global technology leaders who are focused on
providing open and free authentication standards to help reduce the
world's reliance on passwords and SMS OTPs (one-time
passwords).
The Innovation Hub is also looking at changing MyID's
architecture to use REACT and REST to create a more intuitive web
user interface and enhance our mobile capabilities. This is
important for the future of large-scale mobile credential
opportunities, such as national ID deployments, as one of the
benefits REACT/REST will provide a faster more reliable credential
issuance process at high volumes.
In order to address the requirements for channels as well as end
users, MyID Professional has been developed and was recently
launched in September 2019 further underlining Intercede's ability
to innovate and deliver.
5. Cash
The Group's financial stability, control environment and
management information have been significantly improved since
action was taken to deliver sustainable revenue growth and
profitability. This improved operational performance is reflected
in the level of cash generated from operations totalling
GBP1,841,000 (2018: GBP739,000). Cash continues to be king; not
only in the sense that it is required to meet upcoming financial
obligations but also because it is required for strategic
investment in the other 4C's.
Financial Results
Revenue in the period totalled GBP4,364,000, a 5% increase
compared to the corresponding period last year. This reflects a
strong end to the half with second quarter total orders exceeding
first quarter total orders by a ratio of almost 4:1. This trend of
increasing orders over the period is promising and indeed some of
the second quarter orders will generate revenue over the next 12
months. It is also pleasing to note the longer-term trend of
Intercede's revenue. Revenue for the six months ended 30 September
2016 was GBP2,828,000 and the growth from this starting point
represents compound average growth of 16% over the three
corresponding periods to 30 September 2019.
Revenue highlights for the period include:
- Follow-on MyID license sales to an existing US Federal agency
customer, totalling 75,000 devices, spread across two different
deployments. One of these deployments will enable users to issue
Derived PIV credentials to a mobile device using their original PIV
card.
- The same US Federal agency customer has also ordered
professional and development services in excess of $0.5m, to
implement a 35,000 device deployment purchased in the corresponding
period last year.
- An additional 35,000 licenses sold to a government in the
Middle East operating an e-Government services portal.
- A follow-on MyID license sale for 20,000 devices to one of the
world's largest Aerospace & Defence contractors.
- A new MyID license sale to provide a traditional smartcard
deployment for one of the largest US wireless network
operators.
- A new MyID license sale to a US Navy force providing surveillance systems.
- A new MyID deployment sale to an existing US Airforce customer
for a forward deployment based in the Middle East.
All of these wins are expected to generate incremental revenue
over the next 12 months from a combination of support &
maintenance plus professional services, development and/or
follow-on license sales.
Compared to the corresponding period last year, operating
expenses have been reduced by 9% to GBP4,329,000 (2018:
GBP4,768,000). This reflects staff cost savings and continued tight
control over all areas of expenditure. Staff costs continue to
represent the main area of expense, representing 87% of total
operating costs (2018: 83%). Intercede had 82 employees and
contractors as at 30 September 2019 (30 September 2018: 85). The
average number of employees and contractors during the period was
82 (2018: 89). It should be noted that this 8% year on year
reduction in employees and contractors reflects efficiency
improvements in operational delivery and has not impacted upon
Intercede's ability to deliver MyID solutions or to implement the
5C strategy.
A GBP447,000 taxation credit for the period (2018: GBP993,000
taxation credit) primarily reflects the 2019 Research &
Development ("R&D") claim which results from the Group's
strategic investment activities. The Group is a beneficiary of the
UK Government's efforts to encourage innovation by allowing 130% of
qualifying R&D expenditure to be offset against taxable profits
and allowing 14.5% of the lower of R&D losses or taxable losses
to be paid as tax credits. In recent years, the tax credit has been
unrestricted due to taxable losses exceeding R&D losses,
although this was not the case for the 2019 claim. Had the 2019
claim been unrestricted, the amount claimed would have been
GBP717,000 which is a fairer reflection of the Group's continued
level of strategic investment activities.
The increase in revenue combined with the reduction in operating
expenses has resulted in a return to operating profit of GBP25,000
(2018: GBP609,000 operating loss), the first time this has been
achieved since the corresponding period six years ago. A profit for
the period of GBP184,000 (2018: GBP89,000) resulted in a basic
profit per share of 0.4p and a fully diluted profit per share of
0.3p (2018: basic and fully diluted profit per share of 0.2p).
Cash balances as at 30 September 2019 totalled GBP5,156,000
which compares with GBP3,623,000 as at 31 March 2019 and
GBP3,228,000 as at 30 September 2018. The increase in cash balances
is primarily driven by GBP1,841,000 of cash generated from
operations (2018: GBP739,000) and also reflects the benefit of
GBP422,000 proceeds from the disposal of a UK office (2018:
GBPnil). It is also worth noting that the 2019 R&D tax claim
totalling GBP460,000 was received shortly after the period end and
does not form part of the cash balances as at 30 September 2019
(2018: R&D claim totalling GBP993,000 received prior to period
end and included in the 30 September cash balances).
The Group adopted IFRS 16 Leases with effect from 1 April 2019
using the full retrospective method. This has resulted in the Group
recognising right of use assets and lease liabilities for all
contracts that are, or contain, a lease. Instead of recognising an
operating expense for its operating lease payments, the Group will
instead depreciate its right of use assets and recognise interest
on its lease liabilities. The impact on each line of the
Consolidated Financial Statements is explained in Notes 1 and
6.
Operational Review
Intercede is trusted by governments and large enterprises
throughout the world. Where protecting data really matters, you
will find MyID. The security, reliability and interoperability of
MyID software sets it apart and is why we are proud to help many
leading organisations around the world manage the secure digital
identities they issue to citizens and employees. In addition to
offering MyID as a market-leading credential management commercial
off-the-shelf product, Intercede supplies MyID as a platform
providing service providers with a range of software and service
tools enabling them to embed digital identity into their own
solutions.
For over 20 years Intercede has delivered solutions that truly
test the interoperability of MyID because governments and large
enterprises typically have complicated PKI (public key
infrastructure). But we recognise that there are enterprises who
are happy to follow best practice and just want a simple,
pre-configured solution that protects their networks, systems and
cloud-based resources with the most secure method of authenticating
employees. We are therefore pleased to announce the release of MyID
Professional, an easy to use and deploy software solution that
enables enterprises to replace insecure passwords with the
strongest form of multi-factor user authentication.
MYID PROFESSIONAL INCLUDES:
-- MyID Professional server software
-- Connectors to Microsoft Active Directory and Microsoft Certificate Services
-- Connectors with a wide range of leading smart cards and USB tokens
-- Connectors with hardware security modules, used to secure keys and sensitive data
-- Operator desktop for system administration and helpdesk operators
-- End-user client for simple self-service operations
-- Documentation covering installation, configuration and use
MYID PROFESSIONAL CAN BE USED TO:
-- Secure Windows and network logon
-- Secure VPN and remote access
-- Protect cloud resources such as Microsoft Office 365
-- Sign and encrypt emails, protecting against spear-phishing attacks
-- Deploy PKI credentials for strong two-factor authentication to smart cards and USB keys
-- Enable simple self-service credential management at the
user's own desktop, thereby reducing help desk costs
The establishment and further development of a simplified
version of MyID will be more scalable and is therefore important
for the Group's future growth prospects. By combining predefined
business processes and out-of-the-box integration with common
infrastructure components, MyID Professional will enable smaller
organisations to step up to the strongest form of user
authentication with least cost and risk. MyID Professional is
available on a subscription basis via Intercede channel
partners.
MyID is now available in three product lines, thereby reflecting
a growing product portfolio for an expanding addressable market
ie:
1) MyID Enterprise;
2) MyID PIV; and
3) MyID Professional.
Outlook
The actions taken to refocus the Group's strategy continue to
drive improvements throughout the business. As in previous years,
revenue is expected to be weighted towards the second half of the
year Whilst the nature of Intercede's business and customer profile
is such that the precise timing of orders is difficult to predict,
the current sales pipeline and levels of bid activity continue to
support management's revenue and profitability targets.
By order of the Board
Klaas van der Leest Andrew Walker
Chief Executive Officer Finance Director
25 November 2019 25 November 2019
Consolidated Statement of Comprehensive
Income
6 months ended 6 months ended Year ended
30 September 30 September 31 March
2019 2018 2019
Restated Restated
GBP'000 GBP'000 GBP'000
Continuing operations
Revenue 4,364 4,174 10,108
Cost of sales (10) (15) (24)
__________ __________ __________
Gross profit 4,354 4,159 10,084
Operating expenses (4,329) (4,768) (10,025)
__________ __________ __________
Operating profit/(loss) 25 (609) 59
Finance income 9 5 11
Finance costs (297) (300) (600)
__________ __________ __________
Loss before tax (263) (904) (530)
Taxation 447 993 979
__________ __________ __________
Profit for the period 184 89 449
__________ __________ __________
Total comprehensive income attributable
to owners of the parent company 184 89 449
__________ __________ __________
Profit per share (pence)
- basic 0.4p 0.2p 0.9p
- diluted 0.3p 0.2p 0.8p
__________ __________ __________
The Consolidated Statements of Comprehensive Income for the
periods ending 30 September 2018 and 31 March 2019 have been
restated to reflect the impact of IFRS 16 Leases (see Notes 1 and
6).
Consolidated Balance Sheet
As at As at As at
30 September 30 September 31 March
2019 2018 2019
Restated Restated
GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment 151 207 154
Right of use assets 1,021 1,249 1,135
___________ ___________ __________
1,172 1,456 1,289
___________ ___________ __________
Current assets
Assets held for sale - 373 373
Trade and other receivables 3,188 2,355 4,797
Cash and cash equivalents 5,156 3,623 3,228
___________ ___________ __________
8,344 6,351 8,398
___________ ___________ __________
Total assets 9,516 7,807 9,687
___________ ___________ __________
Equity
Share capital 505 505 505
Share premium 673 673 673
Equity reserve 66 66 66
Merger reserve 1,508 1,508 1,508
Accumulated deficit (5,076) (5,905) (5,420)
___________ ___________ __________
Total equity (2,324) (3,153) (2,668)
___________ ___________ __________
Non-current liabilities
Convertible loan notes 4,790 4,708 4,747
Lease liabilities 1,301 1,531 1,404
Deferred revenue 311 221 166
___________ ___________ __________
6,402 6,460 6,317
___________ ___________ __________
Current liabilities
Lease liabilities 284 242 253
Trade and other payables 1,955 1,406 1,899
Deferred revenue 3,199 2,852 3,886
___________ ___________ __________
5,438 4,500 6,038
___________ ___________ __________
Total liabilities 11,840 10,960 12,355
___________ ___________ __________
Total equity and liabilities 9,516 7,807 9,687
___________ ___________ __________
The Consolidated Balance Sheets for the periods ending 30
September 2018 and 31 March 2019 have been restated to reflect the
impact of IFRS 16 Leases (see Notes 1 and 6).
Consolidated Statement of
Changes in Equity
Share Share Equity Merger Accumulated
capital premium reserve reserve deficit Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2019 (Original) 505 673 66 1,508 (4,898) (2,146)
Change in accounting policy - - - - (522) (522)
______ _______ _______ _______ __________ _______
At 1 April 2019 (Restated) 505 673 66 1,508 (5,420) (2,668)
Proceeds from recycling
of own shares - - - - 17 17
Employee share option plan
charge - - - - 54 54
Employee share incentive
plan charge - - - - 89 89
Profit for the period and
total comprehensive income - - - - 184 184
________ ________ ________ ________ ______________ _______
At 30 September 2019 505 673 66 1,508 (5,076) (2,324)
At 1 April 2018 (Original) 505 673 66 1,508 (5,719) (2,967)
Change in accounting policy - - - - (443) (443)
______ _______ _______ _______ __________ _______
At 1 April 2018 (Restated) 505 673 66 1,508 (6,162) (3,410)
Proceeds from recycling
of own shares - - - - 12 12
Employee share option plan
credit - - - - (1) (1)
Employee share incentive
plan charge - - - - 157 157
Profit for the period and
total comprehensive income
(Restated) - - - - 89 89
________ ________ ________ ________ ___________ _______
At 30 September 2018 (Restated) 505 673 66 1,508 (5,905) (3,153)
At 1 April 2018 (Original) 505 673 66 1,508 (5,719) (2,967)
Change in accounting policy - - - - (443) (443)
______ _______ _______ _______ __________ _______
At 1 April 2018 (Restated) 505 673 66 1,508 (6,162) (3,410)
Proceeds from recycling
of own shares - - - - 27 27
Employee share option plan
charge - - - - 17 17
Employee share incentive
plan charge - - - - 249 249
Profit for the period and
total comprehensive income
(Restated) - - - - 449 449
________ ________ ________ ________ __________ _______
At 31 March 2019 (Restated) 505 673 66 1,508 (5,420) (2,668)
The Consolidated Statements of Changes in Equity for the periods
ending 30 September 2018 and 31 March 2019 have been restated to
reflect the impact of IFRS 16 Leases (see Notes 1 and 6).
Consolidated Cash Flow Statement
6 months ended 6 months ended Year ended
30 September 30 September 31 March
2019 2018 2019
Restated Restated
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Operating profit/(loss) 25 (609) 59
Depreciation 157 177 344
Profit on disposal of property, plant
and equipment (50) - -
Employee share option plan charge/(credit) 54 (1) 17
Employee share incentive plan charge 89 157 249
Employee unit incentive plan charge 14 6 5
Employee unit incentive plan payment - - (7)
Decrease/(increase) in trade and other
receivables 2,009 2,312 (131)
Increase/(decrease) in trade and other
payables 41 (460) 44
(Decrease)/increase in deferred revenue (542) (916) 63
Increase in lease liabilities 44 73 63
____________ ____________ __________
Cash generated from operations 1,841 739 706
Finance income 7 3 9
Finance costs on convertible loan
notes (199) (199) (400)
Finance costs on leases (54) (61) (122)
Taxation (13) 993 979
____________ ____________ __________
Net cash generated from operating
activities 1,582 1,475 1,172
____________ ____________ __________
Investing activities
Proceeds on disposal of property,
plant and equipment 422 - -
Purchases of property, plant and equipment (39) (75) (75)
____________ ____________ __________
Cash generated from/(used in) investing
activities 383 (75) (75)
____________ ____________ __________
Financing activities
Proceeds from recycling of own shares 17 12 27
Principal elements of lease payments (116) (106) (212)
____________ ____________ __________
Cash used in financing activities (99) (94) (185)
____________ ____________ __________
Net increase in cash and cash equivalents 1,866 1,306 912
Cash and cash equivalents at the beginning
of the period 3,228 2,272 2,272
Exchange gains on cash and cash equivalents 62 45 44
____________ ____________ __________
Cash and cash equivalents at the end
of the period 5,156 3,623 3,228
____________ ____________ __________
The Consolidated Cash Flow Statements for the periods ending 30
September 2018 and 31 March 2019 have been restated to reflect the
impact of IFRS 16 Leases (see Notes 1 and 6).
Notes to the Consolidated Accounts
For the period ended 30 September 2019
1 Preparation of the interim financial statements
These interim financial statements have been prepared under IFRS
as adopted by the European Union and on the basis of the accounting
policies set out in the Group's Annual Report for the year ended 31
March 2019.
The Group applies, for the first time, IFRS 16 Leases and the
nature and effect of this change is disclosed below. Several other
amendments and interpretations are effective for reporting periods
beginning on or after 1 January 2019. These have been applied but
do not have an impact on the interim consolidated financial
statements of the Group. The Group has not early adopted any other
standard, interpretation or amendment that has been issued but is
not effective.
These interim financial statements have not been audited and do
not constitute statutory accounts as defined in Section 434 of the
Companies Act 2006. Statutory accounts for the year ended 31 March
2018 have been delivered to the Registrar of Companies. The
Auditors' Report on those accounts was unqualified and did not
contain any statement under Section 498 (2) or (3) of the Companies
Act 2006.
The Interim Report will be mailed to shareholders within the
next few weeks and copies will be available on the website
(www.intercede.com) and at the registered office: Intercede Group
plc, Lutterworth Hall, St Mary's Road, Lutterworth, Leicestershire,
LE17 4PS.
Revised accounting policy for IFRS 16 (replacing 'Leased assets'
policy)
At the inception of a contract the Group assesses whether the
contract is, or contains, a lease. A lease is present where the
contract conveys, over a period of time, the right to control the
use of an identified asset in exchange for consideration. Where a
lease is identified the Group recognises a right of use asset and a
corresponding lease liability, except for short-term leases
(defined as leases with a lease term of 12 months or less) and
leases of low value assets.
The lease liability is initially measured at the present value
of the future lease payments, which are discounted at the Group's
incremental borrowing rate (8%). The lease liability is re-measured
for modifications to lease payments due to changes in an index or
rate or where the lease contract is modified and is not accounted
for as a separate lease. When the lease liability is re-measured an
equivalent adjustment is made to the right of use asset. Where the
lease liability is denominated in a foreign currency it is
retranslated at the Balance Sheet date and gains or losses are
included in the Statement of Comprehensive Income.
A right of use asset comprises the initial measurement of the
corresponding lease liability and is subsequently measured at cost
less accumulated depreciation. Right of use assets are depreciated
over the lease term.
2 Revenue
All of the Group's revenue, operating profits/(losses) and net
liabilities originate from operations in the UK. The Directors
consider that the activities of the Group constitute a single
business segment.
The split of revenue by geographical destination of the end
customer can be analysed as follows:
6 months ended 6 months ended Year ended
30 September 30 September 31 March
2019 2018 2019
GBP'000 GBP'000 GBP'000
UK 39 201 331
Rest of Europe 578 827 1,738
North America 3,041 2,814 6,981
Rest of World 706 332 1,058
___________ ___________ __________
4,364 4,174 10,108
___________ ____________ __________
3 Taxation
Taxation represents the net effect of amounts receivable from
HMRC in respect of R&D claims and US corporation tax
payable.
4 Earnings per share
The calculations of earnings per ordinary share are based on the
profit for the period and the weighted average number of ordinary
shares in issue during each period.
6 months ended 6 months ended Year ended
30 September 30 September 31 March
2019 2018 2019
Restated Restated
GBP'000 GBP'000 GBP'000
Profit for the period 184 89 449
___________ ___________ __________
Number Number Number
Weighted average number of shares
- basic 50,482,281 50,482,281 50,482,281
- diluted 60,552,436 58,562,299 59,214,607
___________ ___________ __________
Pence Pence Pence
Earnings per share
- basic 0.4p 0.2p 0.9p
- diluted 0.3p 0.2p 0.8p
___________ ___________ __________
4 Earnings per share (continued)
The weighted average number of shares used in the calculation of
basic and diluted earnings per share for each period were
calculated as follows:
6 months ended 6 months ended Year ended
30 September 30 September 31 March
2019 2018 2019
Number Number Number
Issued ordinary shares at start
of period 50,523,926 50,523,926 50,523,926
Effect of treasury shares (41,645) (41,645) (41,645)
___________ ___________ __________
Weighted average number of shares
- basic 50,482,281 50,482,281 50,482,281
___________ ___________ __________
Add back effect of treasury
shares 41,645 41,645 41,645
Effect of share options in issue 2,755,123 764,986 1,417,294
Effect of convertible loan notes
in issue 7,273,387 7,273,387 7,273,387
___________ ___________ __________
Weighted average number of shares
- diluted 60,552,436 58,562,299 59,214,607
___________ ___________ __________
5 Dividend
The Directors do not recommend the payment of a dividend.
6 IFRS 16 transition note
The Group has applied IFRS 16 retrospectively and the tables
below show the adjustments ("Adj") recognised for each line item at
30 September 2019, 30 September 2018 and 31 March 2019. Line items
that were not affected by the changes have not been included. As a
result, the sub-totals and totals disclosed cannot be recalculated
from the numbers provided.
Consolidated Statement of Comprehensive Income (extract)
6 months ended 30 6 months ended 30 Year ended 31 March
September 2019 September 2018 2019
Original Adj Restated Original Adj Restated Original Adj Restated
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Operating
expenses (4,341) 12 (4,329) (4,748) (20) (4,768) (10,068) 43 (10,025)
__________ __________ __________ __________ __________ __________ __________ __________ __________
Operating
profit/(loss) 13 12 25 (589) (20) (609) 16 43 59
Finance costs (243) (54) (297) (239) (61) (300) (478) (122) (600)
__________ __________ __________ __________ __________ __________ _________ __________ __________
Loss before
tax (221) (42) (263) (823) (81) (904) (451) (79) (530)
__________ __________ __________ __________ __________ __________ __________ __________ __________
6 IFRS 16 transition note (continued)
Consolidated Balance Sheet (extract)
As at 30 September As at 30 September As at 31 March 2019
2019 2018
Original Adj Restated Original Adj Restated Original Adj Restated
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Non-current
assets
Right of use
assets - 1,021 1,021 - 1,249 1,249 - 1,135 1,135
Total assets 8,495 1,021 9,516 6,558 1,249 7,807 8,552 1,135 9,687
__________ __________ __________ __________ __________ __________ __________ __________ __________
Equity
Accumulated
deficit (4,512) (564) (5,076) (5,381) (524) (5,905) (4,898) (522) (5,420)
__________ __________ __________ __________ __________ __________ __________ __________ __________
Total equity (1,760) (564) (2,324) (2,629) (524) (3,153) (2,146) (522) (2,668)
__________ __________ __________ __________ __________ __________ __________ __________ __________
Non-current
liabilities
Lease
liabilities - 1,301 1,301 - 1,531 1,531 - 1,404 1,404
Current
liabilities
Lease
liabilities - 284 284 - 242 242 - 253 253
__________ __________ __________ _________ __________ __________ __________ __________ __________
Total
liabilities 10,255 1,585 11,840 9,187 1,773 10,960 10,698 1,657 12,355
__________ __________ __________ __________ __________ __________ __________ __________ __________
Total equity
and
liabilities 8,495 1,021 9,516 6,558 1,249 7,807 8,552 1,135 9687
__________ __________ __________ __________ __________ __________ __________ __________ __________
Consolidated Cash Flow Statement (extract)
6 months ended 30 6 months ended 30 Year ended 31 March
September 2019 September 2018 2019
Original Adj Restated Original Adj Restated Original Adj Restated
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Operating
profit/(loss) 13 12 25 (589) (20) (609) 16 43 59
Depreciation 43 114 157 63 114 177 116 228 344
Increase in
lease
liabilities - 44 44 - 73 73 - 63 63
__________ __________ __________ __________ __________ __________ __________ __________ __________
Cash generated
from
operations 1,671 170 1,841 572 167 739 372 334 706
Finance costs
on leases - (54) (54) - (61) (61) - (122) (122)
__________ __________ __________ __________ __________ __________ __________ __________ __________
Net cash
generated
from operating
activities 1,466 116 1,582 1,369 106 1,475 960 212 1,172
__________ __________ __________ __________ __________ __________ __________ __________ __________
Principal
elements
of lease
payments - (116) (116) - (106) (106) - (212) (212)
__________ __________ __________ __________ __________ __________ __________ __________ __________
Cash generated
from/(used in)
financing
activities 17 (116) (99) 12 (106) (94) 27 (212) (185)
Net increase
in cash and
cash
equivalents 1,866 - 1,866 1,306 - 1,306 912 - 912
__________ __________ __________ __________ __________ __________ __________ __________ __________
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 QLLFLKFFFFBQ
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November 25, 2019 02:00 ET (07:00 GMT)
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