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Satellite Solutions (SAT)

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Monday 20 March, 2017

Satellite Solutions

Preliminary Results

RNS Number : 9931Z
Satellite Solutions Wldwide Grp PLC
20 March 2017
 

 

 

Satellite Solutions Worldwide Group plc

('SSW' or the 'Company')

 

Unaudited preliminary results for year ended 30 November 2016

 

Satellite Solutions Worldwide Group (AIM:SAT), the global communications company specialising in rural and last-mile super-fast broadband, announces its unaudited preliminary results for the year ended 30 November 2016.

 

Financial Highlights

·     Total revenue increased by 190% to £21.5m (2015: £7.4m)

Recurring revenue* increased 219% to £18.1m (2015: £5.7m)

·     Like for like organic revenue growth** of 11.7%

·     Gross profit margin of 34% (2015: 24%)

·     Underlying EBITDA*** increased to £1.24m (2015: £770k loss)

·     Revenue, underlying EBITDA and cash at bank all ahead of market expectations

 

* Recurring revenue refers to revenue generated from broadband airtime and data contracts.

** Like for like revenue growth compares current and prior period revenue, treating acquired businesses as if they had been owned for all of both periods.

*** Underlying EBITDA is before share based payments, depreciation, intangible amortisation, acquisition costs and fund raising fees.

               

Operational Highlights

·     Users increased over 200% to c.79k (2015: c.25k)

·     Six acquisitions across five countries completed during the period, including:

Breiband in Norway with c.13k customers including wireless technology

Skymesh in Australia, with c.28k customers

Avonline, with c.9.5k customers, making the Company the number one provider in the UK

·     Received a £12m BGF subordinated loan to fund acquisitions

·     Raised £12.1m in new equity to fund acquisitions

 

Post-Period Highlights

·     Signed a Virtual Network Operating ('VNO') agreement with SES Techcom Services

·     Agreed a £5m revolving credit facility from HSBC to fund future acquisitions

·     Acquisition of two Norwegian and one Australian wireless broadband businesses

·     Like for like organic revenue growth of 12%** for first two months of FY2017

 

Andrew Walwyn, CEO of SSW, commented: "2016 saw turnover and customer numbers almost increased three-fold during the period, making SSW the world's largest satellite broadband provider, outside of North America. I believe that this transformational growth is just the start, as in 2017 we will continue our consolidation strategy .

 

"However, we are not just about an industry consolidation; like for like organic sales growth of 11.7% during the year highlights our core business is robust and thriving, and this has continued into FY2017. Demand for reliable, high quality internet access in our increasingly digital world continues to grow for consumers and businesses; this inherent demand will drive our growth in the future."

 

"We have built a replicable and robust business and we intend to continue to acquire, invest in and integrate acquisitions into our platform as we create a world class Company."

 

 

For further information:

Satellite Solutions Worldwide Group PLC

www.satellitesolutionsworldwide.com

Andrew Walwyn, Chief Executive Officer

Via Walbrook PR

 

 

Numis Securities (Nomad and broker)

Jamie Lillywhite / Simon Willis (Corporate Advisory)

James Black / Jonathan Abbott (Corporate Broking)

Tel: +44 (0)20 7260 1000

 

 

Walbrook PR (PR advisers)

Tel: +44 (0)20 7933 8780

Paul Cornelius / Nick Rome / Paul Whittington

or [email protected]

 

 

About SSW

Established in 2008, SSW specialises in the provision of rural and last mile broadband services with customers across 32 countries. SSW's solutions target B2C and B2B users, including products developed specifically for the broadcasting, police and military markets. SSW operates a number of brands such as Europasat (Europe), Breiband (Nordics) and SkyMesh (Australia) and is now the fourth largest independent provider of satellite broadband internet services in the world.

 

The 2015 listing on AIM, together with significant debt and equity raises in 2016, have transformed the Company. The three major acquisitions in 2016 of Avonline (UK), Breiband (Norway) and Skymesh (Australia) saw an increase in customers from c.25k to c.79k. The Directors believe there is a major opportunity to continue both organic and acquisitive growth throughout the fragmented European and Australasian satellite and wireless broadband markets.

 

Working closely with satellite owners and operators, the Company targets customers in the 'digital divide' with solutions that deliver super-fast satellite based broadband services or fixed wireless to almost any premises, whether residential, commercial or industrial across Europe and Australia, irrespective of location or local infrastructure.

 

 

CHAIRMAN'S STATEMENT

 

I am very pleased to be able to report another year of strong growth for the Company, including for the first time, our maiden year of positive underlying EBITDA.

 

By any standard, 2016 has been a transformational year for the Company both operationally and financially. Customer numbers have increased three-fold and we have successfully shown we can consolidate our industry; identifying, negotiating, acquiring and integrating new companies into our operating platform. This means banking, communications and customer relations have all improved post integration, enabling further revenue and operating margin enhancements to be generated from the growing customer base.

 

During the year, we raised significant amounts of equity and debt to fund six acquisitions across five countries. In addition, we have successfully generated strong organic growth in our core markets, with an 11.7% increase in like for like organic sales in the year.

 

The acquisition of Avonline Broadband in July significantly strengthened our position in a core territory, giving us a majority share of the UK satellite broadband market. In August, the acquisition of Breiband in Norway added a broad range of services and skills to the Company's portfolio and increased our ability to manage and deliver both satellite and fixed wireless technologies. We intend to extend this skill set to our new territories in 2017.

 

The third significant acquisition of the year was Skymesh in Australia. The progressive Australian government has invested significantly in satellite technology, helping its large number of remotely based citizens and creating a climate of tremendous opportunity for satellite broadband in general and SSW in particular. The Skymesh acquisition has presented us with an excellent opportunity to take advantage of a vibrant marketplace, including the possibility of further acquisitions, and I believe Australia will become a key market in the future.

 

Raising substantial amounts of new equity and debt capital has been a key to the Company's success and growth in 2016 and I would like to thank both our existing and new shareholders for their support. A special mention should go to BGF who have invested significantly into our business and their continued support, through their subordinated loan, and their subsequent equity investment, in 2016, was key to delivering an enlarged business during the period.

 

As stated last year, I am a strong believer that good corporate governance supports a Company's long-term success. This is even more important for 2017 and beyond, given the speed of our growth, the increased amounts of capital raised and the geographic spread and size of our business. The structures, advisers and committees we have in place for establishing and articulating the Board's strategy and monitoring the performance of the Company's management continue to evolve.

 

In September 2016, Simon Clifton, one of the original founders of the Company, joined the Board as Chief Technical Officer. Simon brings a wealth of technical knowledge to the Company as we develop our customer product offerings across the globe. Post the year end, in February 2017, Rodger Sargent left the board as a Non-executive and was replaced by Stephen Morana. I look forward to working with Stephen and believe his experience at Betfair, Zoopla and boohoo.com, will be vital as the Company continues its rise through to higher market capitalisations and wish Rodger well in his future in the knowledge he will remain a vocal supporter of the Company going forward.

 

Part of our governance regime is our continued regular communication with shareholders as our strategy continues to progress. To this end, we have embarked on an inclusive investor relations programme in 2017 and welcome all shareholders to the Company's AGM at 11a.m. on 3rd May, which will be held at the offices of Shakespeare Martineau LLP, 60 Gracechurch Street, London EC3V 0HR. My colleagues and I look forward to welcoming you there.

 

Finally, I would like to thank Andrew Walwyn, his management team and all the staff at the Company for their efforts in 2016. Everyone played their part in a demanding yet very successful year in the Company's life. I, and the rest of the Board, are looking forward to the remainder of 2017 with relish.

 

Michael Tobin OBE

Chairman

 

 

 

CHIEF EXECUTIVE REPORT

Since listing the Company on AIM in May 2015, the business has established itself as the largest satellite broadband provider in Europe and the fourth largest in the world.

 

There are few days when the poor state of rural or 'last mile' broadband is not in the headlines or debated at the highest levels of government. At the same time, demand for digital consumption, social media, cloud computing, streaming of music and film and communications continues to grow, giving the Company a real sweet spot of demand to satisfy.

 

Government funding and support, which was key to our decision to acquire Skymesh in Australia, continues to be important. Different countries around Europe are at various stages of resolving the problem of rural broadband via subsidy. Importantly, the UK system is improving, and we hope this will drive significant UK growth in the future, as our acquisition of Avonline gives us a leading position within the market.

 

We continue to progress our strategy of consolidation within Europe and Australasia. We have created a 'template' system for analysis, structuring and negotiating deals that has proved very successful thus far. I am particularly pleased with how the acquisitions have been integrated; different cultures, languages, currencies, systems, personnel and logistics across over 32 countries take a great deal of co-ordination and the team has risen to this challenge. We are seeing real benefits of being a bigger group, through enhanced negotiating power with our suppliers, to better, higher margin services being offered to customers.

 

Operational Review

We have delivered significant organic and acquisitive growth over the year to 30 November 2016. At year end, the Company had c.79k customers, an increase of over 200% (FY2015: c.25k customers).

 

The customer base is currently split 37% Australia, 16% Norway, 15% UK, 15% France and ROW 17%, (FY2015: 56% UK, 20% France, 10% Ireland, and ROW 14%) reflecting the global ambition and revenue diversification of the Company this year. We have extended our network agreements to ensure provision of coverage to customers whom we currently serve across 32 countries.

 

Whilst acquisition plans continue to move ahead, we are actively deriving economies of scale and cost synergies from our enlarged base, as shown by the VNO deal with SES post year end. We have rolled out the 'hub' concept across the Company where local hubs will have dedicated sales, marketing and technical operations, whilst centralised finance and operational matters are run from Bicester HQ. We now have operational hubs in Australia, UK, Norway, France, Poland and Ireland.

 

As outlined previously we have continued to invest in both our customer user interface, network platform and infrastructure to allow central consolidation of the finance and administration functions. This investment in systems will continue in 2017, as it is key to have robust, scalable platforms to cope with our rate of growth.

 

 

 

Financial Results

During the year to November 2016, the Company generated revenues of £21.5m (FY2015: £7.4m), and underlying EBITDA (before share based payments, depreciation, intangible amortisation, acquisition costs and fund raising fees) was £1.2m (FY2015: an EBITDA loss of £0.8m). Total exceptional costs of £2.4m consist of charges in relation to equity fund raising and acquisition related costs in the year.

 

The Company raised £12.1m cash (gross) in August 2016 through an institutional equity placing and a further £12m in subordinated debt from BGF to fund acquisitions. The majority of these funds were used to invest in future growth through the acquisition of a number of companies and businesses. The Company finished the year with cash at bank of £3.3m (FY2015: £1.7m).

 

Investor Support

A key aspect of 2016 has been the significant increase in the Company's capital base. It was a tribute to the potential of our buy-and-build strategy that BGF, the UK's most active provider of growth capital to small and mid-sized businesses, backed us with a £12m of subordinated debt in July 2016, when we had a relatively small user base. This funded the acquisition of Avonline, creating the UK's largest satellite broadband provider.

 

The subsequent £12.1m equity raise, also supported by BGF, along with other pre-eminent small-cap institutions funded our geographical and technological expansion through the purchase of Breiband in Norway and Skymesh in Australia. This considerable strengthening of our initial shareholder base will stand us in good stead for the future and I am very grateful for their on going support as we continue to grow.

 

Acquisitions

As has been mentioned elsewhere, the acquisition of Avonline Broadband in the UK has strengthened our position in one of our core markets, giving us a majority of UK satellite broadband users. The deal was structured so that existing management remained to provide support services to the business for a year from acquisition.

 

The acquisition of Breiband in Norway in August 2016 has added a broad range of services and skills to the Company's portfolio and increased our ability to manage and deliver on both satellite and wireless technologies to rural and last mile customers. We have also gained an amazing new management team led by Jan-Tore Dannemark.

 

The Australian government has been at the forefront of investment in satellite technology to resolve remote broadband issues. Through National Broadband Network, they have launched the Skymuster 1 and 2 satellites, providing capacity for 400,000 premises. In August 2016, we acquired Skymesh, one of Australia's pre-eminent satellite broadband operators. We believed Skymesh was best placed to take advantage of the tremendous growth and investment in the Australian market, and everything we have experienced since the acquisition has confirmed this belief. We are delighted that Managing Director Paul Rees and key management have remained with the business. The Australian team has been supplemented with a Marketing Director from the UK and a new Finance Director, reflecting the importance and growth potential of this business to the Company.

 

Our products continue to evolve quickly as we embrace the latest broadband technologies and developments in satellite architecture. Advances and improvements in our hardware continue to deliver increases in headline speeds and an enhanced user experience, both for new and existing customers.

 

Whilst average broadband speeds in the UK were only 16.3 Mb in Q4 2016 (Akamai Report, Q4 2016), our headline speeds on consumer satellite broadband services are now up to 30 Mb on all our European platforms (qualifying for super-fast status) with up to 50 Mb available for business users. Our fixed wireless broadband networks, utilising leading-edge MU-MIMO technology, are now delivering 75 Mb services for consumers, with an upgrade path to 150 Mb by the end of 2018.

 

Whilst we can deliver 100 Mb satellite services for specific Enterprise projects now, with planned launches of more efficient satellites, our Research and Development team has a clear product roadmap through to delivering up to 100 Mb on satellite broadband globally, even at consumer pricing, with virtually unlimited data allowances by 2020.

 

Post-balance sheet events

In February 2017, we received a £5m revolving credit facility from HSBC. This funding was partly utilised to make three smaller, but strategically important acquisitions of NextNet and ASDN in Norway and BorderNET in Australia.

 

Outlook

I am pleased we have had a good start to 2017, with like for like organic sales growth of 12% for the two months to January 2017. There are further efficiencies, both within revenue generation and cost savings, in the existing portfolio of companies and my team are working hard to further improve margins this year.

 

The opportunities we have continue to grow and as a board, we have had to recalibrate what we think is possible for the Company, as the scope for growth is beyond what we originally imagined when we first came to market.

 

Thanks to our strategy, the existing business is robust, and growing organically but we are also continuing to pursue our acquisition plans. I believe 2017 will be another transformational year for the Company as we continue to grow around the world.

 

Andrew Walwyn

CEO

 

 

 

Satellite Solutions Worldwide Group plc

Condensed consolidated statement of comprehensive income

12 months ended 30 November 2016

 

 

Unaudited 12 months to 30th November 2016

Audited 12 months to 30th November 2015

 

 

 

 

 

Note

£

£

Continuing Operations

 

 

 

Revenue

 

21,461,192

7,439,554

Cost of goods sold

 

(14,156,671)

(5,621,998)

Gross Profit

 

7,304,521

1,817,556

Distribution and administration expenses

 

(6,066,977)

(2,588,252)

Depreciation and amortisation

 

(3,925,337)

(253,519)

Write off of premium on listing

2

 

(2,138,529)

Acquisition and deal related costs

(2,374,758)

(2,569,337)

Share based payments

(316,000)

(278,692)

Operating (Loss)

 

(5,378,551)

(6,010,773)

Interest Payable

 

(818,991)

(526)

(Loss) before Tax

 

(6,197,542)

(6,011,299)

Tax on continuing Operations

 

161,072

-

(Loss) for the year

 

(6,036,470)

(6,011,299)

 

 

 

 

Other comprehensive income

 

 

 

Foreign currency translation difference

 

(829,946)

178,654

Total comprehensive Income

 

(6,866,416)

(5,832,645)

 

 

 

 

Loss per share

 

 

 

from continuing operations

 

pence

pence

Basic and diluted

 

(1.57)

(1.95)

 

 

 

Satellite Solutions Worldwide Group plc

Condensed consolidated statement of comprehensive income

12 months ended 30 November 2016

 

This statement reports the consolidated results of Satellite Solutions Worldwide Group plc for the 12 months ended 30th November 2016. The previous year's results are those for the 12 months ended 30th November 2015 for Satellite Solutions Worldwide Group plc (formerly Cleeve Capital plc), which went through a reverse acquisition with Satellite Solutions Worldwide Limited on 12 May 2015.

 

In the year to 30 November 2016, revenues increased by 190% to £21.5m (2015: £7.4m), driven by acquisitions and increase in organic sales of 11.7%. Gross profit increased to £7.3m (2015: £1.8m).

 

Underlying distribution and administrative expenses increased by 135% to £6.1m (2015: £2.6m) as a result of costs taken on following the acquisition of Brieband and Skymesh, combined with increased investment overheads in relation to growing the business in the hubs within the Company.

 

Company adjusted results

Underlying EBITDA (before share based payments, depreciation, intangible amortisation, acquisition costs and fund raising fees) shows a profit of £1.2m (2015: loss of £0.8m). The loss for the year widened to £6.036m (2015: loss of £6.011m) mainly as a result of increased amortization of intangible assets.

 

 

Company adjusting and exceptional items

The Company had acquisition and deal related costs of £2.4m during the year. The costs of £2.4m (comprise mainly professional and legal fees) which were recognised in relation to the fundraising and acquisition activities in the year and fair value adjustments. The company took a charge of £0.3m (2015: £0.2m) which related to share based payments including the issue of shares and options to directors and employees. The comparative 2015 figures had acquisition and deal related costs of £2.6m, an adjustment on acquisition of £2.3m and share based payments of £0.2m.

 

 

 

Group statutory results

 

A reconciliation of the statutory operating loss before taxation for the year of £5.4m (FY2015: £6.0m loss) to the operating loss (before non cash items and acquisition costs) is shown below:

 

 

 

2016

2015

 

£'000

£'000

 

 

 

Operating Profit / (Loss) before non cash items and acquisition costs

1,237

(770)

 

 

 

Depreciation

(930)

(53)

Amortisation

(2,995)

(200)

Fair value adjustment

(300)

-

Share based payments

(316)

(156)

Acquisition costs and fund raising fees

(2,074)

(4,831)

 

 

 

Operating Loss

(5,378)

(6,010)

 

 

 

 

 

 

 

 

 

 

 

 

Satellite Solutions Worldwide Group plc

Condensed consolidated statement of financial position

As at 30 November 2016

 

Unaudited

Audited

 

As at

As at

 

30th November 2016

30th November 2015

 

£

£

Non-Current Assets

 

 

Intangible assets

24,812,594

4,453,437

Investments

52,345

52,345

Other receivables

-

-

Deferred Tax asset

622,000

-

Property Plant and Equipment

4,933,669

271,481

Total Fixed Assets

30,420,608

4,777,263

 

 

 

Current Assets

 

 

Inventory

1,349,361

252,927

Trade & Other Debtors

5,792,011

1,204,716

Cash and Cash Equivalents

3,317,738

1,671,049

Total Current Assets

10,459,110

3,128,692

 

 

 

Current Liabilities

 

 

Trade Payables

(5,653,775)

(1,323,455)

Other Creditors and Accruals

(9,455,658)

(1,783,302)

Payroll taxes

(334,776)

(175,362)

VAT

(875,842)

(321,914)

Total Current Liabilities

(16,320,051)

(3,604,033)

 

 

 

Non-Current Liabilities

 

 

Other payables

(12,728,992)

(1,581,139)

Deferred taxation

(4,167,000)

(465,527)

Total Non-Current Liabilities

(16,895,992)

(2,046,666)

 

 

 

Total Liabilities

(33,216,043)

(5,650,808)

 

 

 

Net Assets

7,663,675

2,255,256

 

 

 

Equity

 

 

Share Capital

5,362,299

3,081,462

Share Premium

15,588,634

4,415,159

Other Reserves

(85,609)

1,093,643

Revenue Reserves

(13,201,649)

(6,335,008)

 

 

 

Total Equity

7,663,675

2,255,256

 

 

 

Satellite Solutions Worldwide Group plc

Condensed consolidated Cash Flow Statement

12 Months Ended 30 November 2016

 

 

Unaudited

Audited

 

12 months ended

12 months ended

 

30th November 2016

30th November 2015

 

£

£

 

 

 

Cash flows from operating activities (loss) before tax

(6,036,470) 

(6,011,299) 

 

 

 

Interest

818,991

596

Taxation

161,072

0

Amortisation and impairment of intangible assets

2,995,166

200,344

Depreciation charge

930,171

53,175

Share based payments

316,000

148,000

Listing costs

0

(219,000)

Foreign exchange variances

47,408

99,780

Increase/(Decrease) in working capital

1,407,911

1,171,000

Operating cash flows after movements in working capital

640,249

(4,557,404)

Interest paid

(818,989)

(596)

Net cash generated/(used) from operating activities

(178,740)

(4,558,000)

 

 

 

Investing activities

 

 

Purchase of assets

(974,724)

(66,400)

Purchase of intangibles

(768,421)

(2,329,400)

Cash within subsidiaries acquired

552,000

0

Loans within subsidiaries acquired

(1,000,000)

0

Adjustment on acquisition

0

2,260,600

Purchase of investments

(20,083,176)

(52,600)

Net cash generated/(used) in investing activities

(22,274,321)

(187,800)

 

 

 

Financing activities

 

 

Proceeds from issue of ordinary share capital net

12,100,000

6,342,000

Proceeds from Loans

12,000,000

0

Cash generated/(used in) financing activities

24,100,000

6,342,000

 

 

 

Net increase / (decrease) in cash and cash equivalents

1,646,939

1,596,200

Cash and cash equivalents at beginning of period

1,671,200

75,000

Cash and cash equivalents at end of period

3,318,139

1,671,200

 

 

Satellite Solutions Worldwide Group plc

Condensed consolidated Reserves Movement

12 Months Ended 30 November 2016

 

 

 

 

 

Share Capital

Share Premium

Other Reserves

Revenue Reserve

Total

 

 

 

£

£

£

£

£

 

 

 

 

 

Note 5

 

 

At 1st December 2015

3,081,462

4,415,159

1,093,643

(6,335,008)

2,255,256

Profit / (Loss) for the period

 

 

 

(6,866,416)

(6,866,416)

Issue of shares

 

2,280,837

11,173,475

-

-

13,454,312

Share option reserve

 

 

 

316,605

 -

316,605

Foreign Exchange Translation

 

 

 

(1,766,857)

 

(1,766,857)

Other Movements

 

 

 

 

271,000

(225)

270,775

At 30th November 2016

5,362,299

15,588,634

(85,609)

(13,201,649)

7,663,675

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Satellite Solutions Worldwide Group plc

Notes to the financial statements

For the period ended 30 November 2016#

 

1. Presentation of financial information and accounting policies

 

Basis of preparation

The condensed consolidated financial statements are for the 12 months to 30 November 2016. During the last financial period Satellite Solutions Worldwide Group plc (formerly Cleeve Capital plc) completed the acquisition of Satellite Solutions Worldwide Limited. The directors determined that the transaction was akin to a reverse acquisition as per IFRS 3, Business Combinations. However, in order to fall under the category of a Business Combination under IFRS 3, the purchase needs to be of a business. The directors have determined that Cleeve Capital plc did not constitute a business. Therefore the transaction did not appear to fall under the scope of IFRS3.

 

The nature of the Company's operations and its principal activities is the provision of last mile (incorporating Satellite and Wireless) broadband telecommunications and associated / related services and products.

 

The Company prepares its consolidated financial statements in accordance with International Accounting Standards ("IAS") and International Financial Reporting Standards ("IFRS") as adopted by the EU. The financial statements have been prepared on the historical cost basis, except for the revaluation of financial instruments.

 

In last year's results in the absence of a Standard that specifically applies to the type of transaction that occurred the Interpretations Committee observed in their IFRIC of March 2013 that such transactions have some features of a reverse acquisition under IFRS 3. Consequently, it is appropriate to apply by analogy, in accordance with paragraphs 10-12 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, the guidance in paragraphs B19-B27 of IFRS 3 for reverse acquisitions. Application of the reverse acquisitions guidance by analogy results in the non-listed operating entity being identified as the accounting acquirer, and the listed non-operating entity being identified as the accounting acquire. The Interpretations Committee noted that in applying the reverse acquisition guidance in paragraph B20 of IFRS 3 by analogy, the accounting acquirer is deemed to have issued shares to obtain control of the acquire. Therefore for accounting purposes last year Satellite Solutions Worldwide Limited accounted as if it purchased Satellite Solutions Worldwide Group plc (formerly Cleeve Capital plc). However, as no business had been acquired, the difference between the fair value of the assets acquired and the fair value of the shares issued was not recognised as goodwill, but was written off to the income statement, in accordance with IFRS 3.

 

Therefore last year's results treated Satellite Solutions Worldwide Limited as the acquiring Company and the historical comparatives were the comparatives of Satellite Solutions Worldwide Limited, rather than of Satellite Solutions Worldwide Group plc.

 

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts in the financial statements. The areas involving a higher degree of judgement or complexity, or areas where assumptions or estimates are significant to the financial statements are disclosed further. The principal accounting policies set out below have been consistently applied to all the periods presented in these financial statements, except as stated below.

 

Going concern

The directors have prepared and reviewed projected cash flows for the Company reflecting its current level of activity and anticipated future plan for the next 12 months. The Company is currently loss-making mainly as a result of amortisation charges and will continue to be so for the foreseeable future as a result, as the Company continues to invest in the business growth strategy of acquiring similar businesses. The business continues to grow the number of users in a number of key target markets and continues to review the short-term business model of the Company by which the Company becomes profitable and delivers a return on the investments.

 

The Board has concluded that no matters have come to their attention which suggest that the Company will not be able to maintain its current terms of trade with customers and suppliers. The Company's forecasts for the newly combined Company, including due consideration of the short term continued operating losses of the Company, taking account of possible changes in trading performance, indicate that the Company has sufficient cash available to continue in operational existence throughout the forecast period and beyond. As a consequence, the Board believes that the Company is well placed to manage its business risks and longer term strategic objectives, successfully. Accordingly, they continue to adopt the going concern basis in preparing these unaudited preliminary results.

 

Estimates and judgments

The preparation of a condensed set of financial statements requires management to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities at each period end. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an on going basis.

 

In preparing these condensed set of consolidated financial statements, the significant judgments made by management in applying the Company's accounting policies and the key sources of estimation uncertainty were principally the same as those applied to the Company's and Individual companies financial statements for the year ended 30th November 2015.

 

Basis of consolidation

The consolidated financial statements comprise the financial statements of Satellite Solutions Worldwide Group plc and its controlled entities. The financial statements of controlled entities are included in the consolidated financial statements from the date control commences until the date control ceases.

 

The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies.

 

All inter-company balances and transactions have been eliminated in full.

 

 

2. Reverse acquisition

In last year's results they reflected that on 12 May 2015, Cleeve Capital plc acquired Satellite Solutions Worldwide Limited and subsequently changed its name to Satellite Solutions Worldwide Group plc. On a legal basis the transaction was an acquisition by SSW of SSWL. However, from an accounting and AIM Rules basis, the transaction was a reverse acquisition.

 

The amounts recognised in respect of the identifiable assets acquired and liabilities assumed were £3,363,818 against a total consideration of £5,192,308 resulting in an adjustment on acquisition of £1,828,490.

 

The transaction consideration for the acquisition was satisfied by the issue and allotment of 115,384,615 ordinary shares at 4.5p each. The difference between the total consideration and the fair value of the assets purchased was taken to the income statement and has been classified as an exceptional item. The directors believe that this value, if it had been allowable to be capitalised as a goodwill balance under IFRS, would have represented the goodwill relating to the AIM Listing of Satellite Solutions Worldwide Group plc.

 

The acquisition of subsidiary recognised in the cash flow is in respect to the cash acquired in the previous period.

 

3. Exceptional items

Exceptional items are disclosed separately in the financial statements where it is necessary to do so to provide further understanding of the financial performance of the group. They are material items of income or expense that have been shown separately due to the significance of their nature or amount. In this regard the items included in the Condensed consolidated statement of comprehensive income relate primarily to the costs incurred in relation to fundraising and acquisitions undertaken.

 

4. Loss per share

Basic loss per share is calculated by dividing the loss attributable to shareholders by the weighted average number of ordinary shares in issue during the period.

 

IAS 33 requires presentation of diluted EPS when a company could be called upon to issue shares that would decrease earnings per share, or increase the loss per share. For a loss-making company with outstanding share options, net loss per share would be decreased by the exercise of options. Therefore, as per IAS33:36, the antidilutive potential ordinary shares are disregarded in the calculation of diluted EPS.

 

Reconciliation of the profit and weighted average number of shares used in the calculation are set out below:

 

 

 

 

 

Weighted average

 

 

Loss

number of shares

Per share amount

At 30 November 2015

 

 

 

Basic and Diluted EPS

£

units

Pence

Loss attributable to shareholders:

 

 

 

- Continuing operations

(6,011,299)

308,146,282

(1.95)

 

 

 

 

Weighted average

 

 

Loss

Number of Shares

Per share amount

At 30th November 2016

 

 

 

Basic and Diluted EPS

£

units

Pence

Loss attributable to shareholders:

 

 

 

- Continuing operations

(6,036,506)

384,156,094

(1.57)

 

 

5. Other capital reserves

 

 

 

 

 

Foreign

 

 

 

Listing

Merger

Reverse

Other

exchange

Share

Total

 

cost

Relief

acquisition

equity

translation

option

capital

 

reserve

reserve

reserve

reserve

reserve

reserve

reserves

 

£

£

£

£

£

£

£

At 30 November 2015

(219,436)

4,471,155

(3,317,068)

-

10,953

148,039

1,093,643

 

 

 

 

 

 

 

 

Other comprehensive income

-

 

-

-

 

-

-

Other equity

 

 

 

271,000

 

 

271,000

Foreign Exchange Translation

-

 

-

 

(1,766,857)

-

(1,766,857)

Listing Cost Reserve

-

 

-

 

-

-

-

Credit to equity for equity settled Share based payments

-

 

-

 

-

316,605

316,605

At 30 November 2016

(219,436)

4,471,155

(3,317,068)

271,000

(1,755,904)

464,644

(85,609)

 

 

 

 

 

 

 

 

 

 

·     Listing cost reserve

The listing cost reserve arose from expenses incurred on AIM listing.

·     Other equity reserve

Other Equity related to the element of the BGF Convertible Loan which has been grossed up but may be shown net.

·     Reserve acquisition reserve

The reverse acquisition reserve relates to the reverse acquisition of Satellite Solutions Worldwide Limited by Satellite Solutions Worldwide Group plc on 12 May 2015.

·     Foreign exchange translation reserve

The foreign exchange translation reserve is used to record exchange difference arising from the transaction of the final statements of foreign operations.

·     Share option reserve

The share option reserve is used for the issue of share options during the year

·     Merger relief reserve

The merger relief reserve relates to the share premium attributable to shares issued in relation to the acquisition of Satellite Solutions Worldwide Limited

 

6. Related party transactions

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed within the financial statements or related notes.

 

7. Availability of the Annual Report

A copy of these results will be made available for inspection at the Company's registered office during normal business hours on any week day. The Company's registered office is at Satellite House, 108 Churchill Road, Bicester OX26 4XD. The Company is registered in England No. 9223439.

 

A copy can also be downloaded from the Company's website at https://www.satellitesolutionsworldwide.com.

 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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