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Dillistone Group PLC (DSG)

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Tuesday 30 April, 2019

Dillistone Group PLC

Final Results

RNS Number : 4780X
Dillistone Group PLC
30 April 2019
 

 

Dillistone Group Plc
("Dillistone", the "Company" or the "Group")
Final Results

Dillistone Group Plc, the AIM quoted supplier of recruitment software for the international recruitment industry through its Dillistone Systems, Voyager Software and GatedTalent divisions, is pleased to announce its audited final results for the 12 months ended 31 December 2018.

 

Highlights for the year:

 

·    Recurring revenues1 represent 82% (restated 2017: 82%) of Group revenue

·    Adjusted operating profit2 of £0.055m (restated 2017: £0.459m) before acquisition intangible writes offs, reflecting the loss of the major contract announced in 2017 which reduced revenues by £0.625m compared to 2017 in a ten-month period

·    Loss for the year of £0.260m (restated 2017: profit £0.057m)

·    Adjusted basic EPS3 of 0.61p (2017: 3.73p)

·    The Group continued to generate cash from operating activities resulting in cash at 31 December 2018 of £0.725m (2017: £1.390m) with borrowings of £0.404m (2017: £0.391m).

 

[2017 numbers have been restated for the introduction of IFRS 15, the new revenue recognition standard.]

 

Commenting on the results and prospects, Mike Love, Non-Executive Chairman, said:

 

"2018 was clearly a challenging year for the Group. The executive team has nevertheless worked tirelessly and, despite the challenges faced during the year of GDPR, the loss of a major client, the continued investment in new products and, during 2018, the implications of re-structuring to reduce our cost base, we are now well on our way to restoring Dillistone to healthy operating profits on a sustainable footing."

 

 

Definitions:

1The component elements of recurring revenues are detailed in note 5.

2 Adjusted operating profit is statutory operating profit before acquisition costs, related intangible amortisation, movements in contingent consideration and other one-off costs. See note 4.

3. Adjusted basic EPS is computed from statutory profits after tax adjusted to exclude the post-tax effect of acquisition costs, related intangible amortisation, movements in contingent consideration and other one-off costs. See note 10

 

Results Webinar - Jason Starr, Chief Executive, and Julie Pomeroy, Finance Director, will be hosting a webinar to review the results at 3.00pm on Wednesday 8 May 2019.  To register please visit https://attendee.gotowebinar.com/register/8156505307777159948 or contact Tom Cooper on [email protected] or 0797 122 1972.

Annual Report and Accounts - The final results announcement can be downloaded from the Company's website (www.dillistonegroup.com).  Copies of the Annual Report and Accounts (in addition to the notice of the Annual General Meeting) will be sent to shareholders by 31 May 2019 for approval at the Annual General Meeting to be held on 26 June 2019.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

 

Enquiries:

Dillistone Group Plc

 

 

Mike Love

Chairman

020 7749 6100

Jason Starr

Chief Executive

020 7749 6100

Julie Pomeroy

Finance Director

020 7749 6100

 

 

 

WH Ireland Limited (Nominated adviser)

 

 

Chris Fielding

Managing Director, Corporate Finance

020 7220 1650

 

 

 

Walbrook PR

 

 

Tom Cooper / Paul Vann

 

020 7933 8780

 

 

0797 122 1972

 

 

[email protected]

 

Notes to Editors:

Dillistone Group Plc (www.dillistonegroup.com) is a leader in the supply and support of software and services to the recruitment industry. It has five brands operating through three divisions: Dillistone Systems, which targets the executive search industry (www.dillistone.com); Voyager Software, which targets other recruitment markets (www.voyagersoftware.com); and GatedTalent, the next generation executive recruitment platform (www.GatedTalent.com).

Dillistone has made three acquisitions: Voyager Software in September 2011, FCP Internet in July 2013 and ISV Software in September 2014.  The Group operates under the FileFinder, Infinity, Evolve, ISV and GatedTalent brands.

Dillistone was admitted to AIM, a market operated by the London Stock Exchange plc, in June 2006.  The Group employs over 100 people globally with offices in London (head office) Basingstoke and Southampton, Frankfurt, New Jersey and Sydney.

 

 

 

 

 

CHAIRMAN'S STATEMENT

 

2018 was a challenging year for the business.  The loss of a major client, announced in Summer 2017 but materialising in February 2018, had a year on year revenue impact of around £0.625m.  Meanwhile, the new General Data Protection Regulations meant that the Group, like all technology businesses, had to invest heavily in compliance.  This investment covered everything from product development and infrastructure through to staff training and reviews of our various legal documents.

 

2018 was also the start of a period of change.  In February of 2019, we announced the closure of our London office as part of a broader restructuring.  However, some of the groundwork for this project was undertaken in 2018, with the implementation of various company wide systems and procedures.  The restructuring programme is expected to return the Group to a healthy level of operating profit on a sustainable basis.

 

While much work was undertaken behind the scenes in 2018, we also continued to develop our products.  Enhancements and new functionality were delivered for each of our leading products, while the year also saw the first revenue materialise for our GatedTalent platform.

 

GatedTalent experienced various highs and lows during the year. In the early stages of the year, we significantly surpassed our initial expectations for recruiter take up but were disappointed by the number of executive registrations.  In the second half of the year, we saw registrations begin to accelerate, and in Q4 we launched "Member Services" which is a new premium B2C revenue stream.  We are pleased to report that this has proven successful and, less than 6 months since launch, we now realise more recurring revenue every month from Member Services than we do from any single executive search firm contract.

 

Overall, Group revenue fell 11% to £8.692m, of which recurring revenue fell 10% to £7.154m - a significant part of this loss was the previously referenced client departure.   IFRS 15 Revenue from contracts with customers was introduced with effect from 1 January 2018 and has resulted in the restatement of the 2017 numbers.

Adjusted operating profit dropped significantly to £0.055m (2017: £0.459m), in part due to the continued investment in GatedTalent and in part due to the loss of the major client.  The operating loss generated by GatedTalent was £0.612m.

The Board remains committed to investing in and supporting the Group's core products and remains excited by the potential of GatedTalent.  

 

Dividends

The Group is not recommending a final dividend in respect of the year to 31 December 2018 (2017: 0.5p per share).

Staff

 

Our staff are fundamental to our success.  It is through their efforts, commitment and determination that we continue to be a leading technology provider in the sectors we serve.  On behalf of the Board I would like to take this opportunity to thank all of our staff for their individual and collective contributions during 2018 and the support we have seen for the changes we are making to the Group.

 

Outlook

The current year has begun well in each of the three divisions. However, the Board is cognisant of the economic challenges that the year may bring.

 

As announced in February 2019, the Directors are taking the opportunity to reduce the number of UK offices from three to two by exercising an option to break the lease of the London office later in the year and to increase the size of our Basingstoke and Eastleigh offices.

 

The majority of our London based staff have been given the opportunity to relocate to Basingstoke, Eastleigh or to work from home and we are pleased to report that the vast majority of our client facing staff are likely to accept this offer. The Board anticipates that the efficiencies gained from merging the various teams across the Group into fewer locations will allow the Group to maintain current levels of client service and product development investment while delivering a significant reduction in costs from 2020 onwards. This exercise will inevitably lead to the Group incurring restructuring costs this year, which are currently estimated to be in the region of £500,000 to £900,000 and which are expected to be met without recourse to shareholders.  An update on the cost of the restructuring and the anticipated savings will be provided later in the year.

 

The Board currently expects that the Group will deliver a profit before tax in 2019 which will be comparable with 2018 (£0.018m) before restructuring and acquisition related costs. Profit is expected to grow strongly in future years as the benefits of the restructuring and the investment in GatedTalent start to materialise.

 

Dr Mike Love

Non-Executive Chairman

 

 

CEO's Review

Dillistone Group Plc supplies products and services to facilitate recruitment.  We do this through three divisions which, between them, cover everything from retained executive search technology through to tools to facilitate the hiring of temporary staff, from pre-employment skills testing through to a B2C platform that allows executives to share information with executive search firms.

Strategy and objectives

In our time as a public company, we have made three acquisitions and each of them has made a contribution to the business.  However, as our markets have become increasingly competitive, it has become apparent that it is necessary to streamline our operating structure and this is a major focus for us in 2019. 

In the longer term, our strategy remains to grow the business both organically and through acquisition.

This requires ongoing investment in product development which ensures that the business continues to command a leading role in the markets in which it operates.

Our acquisition strategy typically entails consideration of businesses offering:

·    products that would further increase market share in the Group's core markets;

·    legacy applications, where clients could be transferred to our modern suite of products; or

·    complementary applications, which may be cross-sold to clients of the Group.

The Group's objectives are principally to:

·    ensure our products meet the needs of the recruitment sector through continual investment and development;

·    be a leading player in all of the markets we serve;

·    develop our staff, delivering progressive career development; and

·    increase our profitability and deliver increased shareholder value year on year in conjunction with a progressive dividend policy.

 

Key Performance Indicators (KPIs)

 

The Board and management use absolute figures to monitor the performance of the business using the financial KPIs set out below.  As discussed above the Board is undertaking a major restructuring exercise to address the longer term performance of the business:

 

 

 

FY 2017 £000

FY 2018 £000

 

Measure used by management

Met /Not met

Total revenues

 

9,732

8,692

 

year on year growth

not met

 

Recurring revenues

 

7,942

7,154

 

year on year growth

not met

 

Non recurring revenues

 

1,326

1,169

 

year on year growth

not met

 

Adjusted profit before tax

453

18

 

year on year growth

not met

 

Cash

 

 

1,390

725

 

sufficient cash resources maintained

met

 

 

Adjusted profit before tax is statutory profit before acquisition costs, related intangible amortisation, movements in contingent consideration and other one-off costs. See note 4.

Restructuring Plan

Results in 2018 have clearly been disappointing and the Board has embarked on a plan which, it believes, will deliver significantly improved performance from 2020 onwards.  We are now well progressed on our plan to streamline our operating procedures while maintaining our excellent reputation for client service. As stated previously we expect the costs of the restructuring to be in the region of £500,000 to £900,000.  These costs are expected to be met without recourse to shareholders.

We have:

·    Completed the implementation of a Group wide CRM system, allowing team members to operate more easily on Group wide projects.

·    Begun the process of implementing a Group wide financial system and expect this to be complete prior to the year end.

·    Merged certain back office teams and are in the process of merging the product development and other teams.

·    Terminated the lease of our London office while expanding our Basingstoke office.  We expect to vacate London before the end of the year.

·    While conversations with staff are ongoing, we are pleased that the vast majority of our client facing staff have agreed to remain with the Group, ensuring that client service is not negatively impacted by these changes.

·    Informed clients that certain products are being withdrawn from the market, while maintaining overall product development expenditure.  We will continue to invest in product development for each of our flagship products and believe that our new development structure will lead to more efficient development going forward.

 

Our business model

 

The business is currently split into three Divisions. Dillistone Systems and Voyager Software are our established businesses, with GatedTalent launched in the second half of 2017 with first revenue seen in 2018. The statutory and operational structure of the Group is being reviewed as part of the restructuring exercise with an aim to simplify this and reduce the costs of reporting.

Dillistone Systems specialises in the supply of software and services into executive-level recruitment teams. Voyager Software's clientele are primarily involved in contingent recruitment, including permanent placement, contract placement and the provision of temporary staff.  GatedTalent is a private network of executives, accessed by executive recruiters. There is a close relationship between GatedTalent and Dillistone Systems.

 

The majority of our products are commercialised through one or more of the following:

1.   an upfront licence fee plus a recurring support fee;

2.   Software as a Service (SaaS) subscription basis; or

3.   a hybrid model incorporating an upfront payment and recurring support and cloud hosting fees.

 

There is a continuing move away from the upfront licence model towards our cloud delivery (SaaS) services.

The GatedTalent Division generates revenue from a combination of recruiter subscription fees and premium fees direct from executives.  The business operates out of four countries: the UK, Germany, the US and Australia.  As well as supplying and supporting our software we also host the software for a proportion of our clients.  This is done through data centres in Europe, the Americas, Singapore and Australia. 

 

Group review of the business

2018 saw recurring revenues fall 10% to £7.154m (restated 2017: £7.942m) reflecting principally the loss of the major client in 2018.  Non-recurring revenues decreased to £1.169m (restated 2017: £1.326m).  As a result, overall revenues decreased by 11% to £8.692m (restated 2017: £9.732m) with recurring revenues representing 82% of Group revenues (restated 2017: 82%).  Costs have reduced despite continuing investment in GatedTalent which made, as expected, an operating loss of £0.612m (2017: loss £0.439m). 

Adjusted EBITDA1 fell to £1.301m (restated 2017: £1.559m).  Adjusted operating profit fell to £0.055m (restated 2017: £0.459m) and pre-tax profits before acquisition related items and one-off adjustments reduced to £0.018m (restated 2017: £0.453m).  There was an operating loss for the year of £0.414m (restated 2017: loss £0.364m) and loss for the year of £0.260m (restated 2017: profit £0.057m).  Cash at the year end was £0.725m (2017: £1.390m).

1Adjusted EBITDA is adjusted operating profit with depreciation and amortisation added back.  See note 4.

 

Divisional Reviews

 

Dillistone Systems

The Dillistone Systems division is primarily focused on providing technology solutions to the executive search market via our range of "FileFinder" applications.  This client group is made up of both executive search firms and executive search teams in major organisations.

Dillistone Systems' head office is currently in London and it has offices in the US, Germany and Australia.  The Division accounts for 48% (restated 2017: 47%) of the Group's revenue and it saw revenue fall 7% to £4.195m (restated 2017: £4.531m).

Product development focus in 2018 included GDPR and integration with GatedTalent, along with a significant number of user experience improvements.  As part of our restructuring, we have brought development resources from other parts of the Group in to support FileFinder product development, and are already seeing the benefits of this.  We continue to invest in FileFinder and expect new releases later in the year.

Earnings before interest, tax, depreciation and amortisation ('EBITDA') fell to £0.723m (restated 2017: £0.761m) as sales fell and costs improved. The total amortisation and depreciation charge was £0.644m (2017: £0.589m).  Operating profit for 2018 was £0.079m (restated 2017: £0.172m).

 

Voyager Software

Voyager Software is a provider of technology products targeted at the entire recruitment landscape, from front office to back office and bureaus, and includes both recruitment management systems and pre-employment skills testing technology.

In 2018, the Voyager Software division accounted for 51% (2017: 53%) of Group revenues.  The Division's revenues decreased by 15% to £4.429m (restated 2017: £5.201m) mainly due to the loss of a major client in 2018.  EBITDA decreased to £1.003m (restated 2017: £1.367m). Amortisation and depreciation decreased to £0.475m (2017: £0.511m).  Divisional operating profit decreased to £0.528m (restated 2017: £0.856m).

 

2018 saw some major developments in the Division including:

 

·    The addition of global addressing and location searching in Infinity

 

·    A new fast-paced temporary recruitment Planner system in Infinity

 

·    The extension of ISV.online to include psychometric as well as skills testing

 

·    Market leading support for enabling clients to work under the GDPR

 

We are in the process of removing certain legacy Voyager products from the market.  However we continue to invest in the core products of the Division.

 

GatedTalent

 

GatedTalent was established in 2017 to provide a network allowing executives to share information with selected executive recruiters in a GDPR compliant manner.  The GatedTalent product was launched in late 2017 with first revenues occurring in 2018 of £0.068m. 

 

The basic platform has over 50,000 profiles and is free to executives.  New profiles are being added at around 1,000 per week.  Revenue is being generated from executive recruiters through subscriptions to the platform.  In Q4 2018, we launched "Member Services" generating a new premium B2C revenue stream for the Division.  This has been successful and has accelerated rapidly.  We would anticipate that member revenues will be larger than recruiter revenues in 2019.  After less than six months, we realise more recurring revenue every month from Member Services than we do from any single executive search contract.

 

The Division is effectively a start-up business within the Group and made an operating loss of £0.612m (2017 loss: 0.439m) after depreciation and amortisation charges of £0.127m (2017: £nil).  The business is expected to remain loss making in 2019.  The total investment in Gated Talent (including capitalised development) to 31 December 2018 was over £1.700m.

 

The Board is confident that all three Divisions have strong futures.

 

 

Financial Review

 

Total revenues decreased by 11% to £8.692m (restated 2017: £9.732m) with recurring revenues decreasing by 10% to £7.154m (restated 2017: £7.942m) while non-recurring revenues decreased to £1.169m (restated 2017: £1.326m).  Third party resell revenue amounted to £0.369m in the period (2017: £0.464m). 

 

Contractor and internal development costs were reclassified as administrative expenses from costs of sales and the 2017 comparatives have also been restated on this basis.  Cost of sales decreased to £1.054m (2017: £1.247m).

 

Administrative costs, excluding acquisition related items, depreciation and amortisation, fell 8% to £6.337m (2017: £ 6.926m) as measures were taken to reduce costs following the loss of the major contract in 2018.  Depreciation and amortisation (excluding acquisition related amortisation) increased to £1.246m (2017: £1.100m).

 

Acquisition related administrative costs totalled £0.469m (2017: £0.823m) and were in respect of the amortisation of intangibles arising on the Voyager, FCP and ISV acquisitions. The prior year figure included an acceleration of the acquisition intangibles amortisation as a result of the loss of the major contract in that business.

 

Recurring revenues covered 94% of administrative expenses before acquisition related and one-off costs (restated 2017: 99%).  Excluding depreciation and amortisation of our own internal development, the administrative costs are covered 112% (restated 2017: 115%) by recurring revenues.

 

The Group benefitted from a tax credit in 2018 of £0.191m (restated 2017: credit £0.432m).  The 2018 credit reflects the significant R&D tax credits available to all three divisions and the assumption that any tax losses will be surrendered for the R&D tax credit payment.  It also benefits from a deduction for the IFRS 15 adjustment put through the accounts although this is largely offset by the release of the deferred tax asset created in the opening balance position at 1 January 2017.  The acquisition related items tax credit reflects the reduction in deferred tax that arises as amortisation is charged in the profit and loss account. 

 

Profit for the year before acquisition related and other one-off items amounted to £0.120m (restated 2017: £0.734m).  The 2018 adjusted profits benefitted from a tax credit of £0.102m (restated 2017: tax credit of £0.281m). The loss for the year after acquisition related items and other one-off items was £0.260m (2017: profit £0.057m).  Basic loss per share (EPS) fell to (1.32)p (restated 2017: EPS of 0.29p).  Fully diluted EPS fell to (1.32)p (restated 2017: EPS of 0.29p).  Adjusted basic EPS fell to 0.61p (restated 2017: EPS of 3.73p).

 

Dillistone Group Plc company results show a profit of £1.338m (2017: £1.311m after an impairment of £0.451m (2017: £nil) to its investment in Voyager/FCP due to the loss of a major contract.

 

Capital expenditure

 

The Group invested £1.536m in property, plant and equipment and product development during the year (2017: £1.506m).  This expenditure included £1.446m (2017: £1.358m) spent on capitalised development related costs.

 

Trade and other payables


As with previous years, the trade and other payables includes deferred income of £3.575m (2017 restated: £3.811m), i.e. income which has been billed in advance but is not recognised as income at that time.  This principally relates to support, SaaS and cloud hosting renewals, which are billed in 2018 but are in respect of services to be delivered in 2019.  It also includes licence revenue for which a support contract is required, and which is spread over 5 years under IFRS15.  Contractual income is recognised monthly over the period to which it relates.  It also includes deposits taken for work which has not yet been completed; as such income is only recognised when the work is substantially complete, or the client software goes "live".  At the end of 2018, there was no contingent consideration payable (2017: £0.146m).

 

Cash

 

The Group finished the year with cash funds of £0.725m (2017: £1.390m); and a convertible loan of £0.404m (2017: £0.391m after taking into account the equity adjustment).  This is after capital expenditure of £1.536m, the final payment to the vendors of ISV of £0.146m and dividend payments of £0.098m.

 

 

Jason Starr

Chief Executive Officer

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2018

 

 

 

 

2018

 

2017

 

 

 

 

restated

 

Note

 £'000

 

 £'000

 

 

 

 

 

Revenue

5

8,692

 

9,732

 

 

 

 

 

Cost of sales

 

(1,054)

 

(1,247)

 

 

 

 

 

Gross profit

 

7,638

 

8,485

 

 

 

 

 

Administrative expenses

 

(8,052)

 

(8,849)

 

 

 

 

 

Operating loss

 

(414)

 

(364)

Adjusted operating profit before acquisition related and one-off items

4

55

 

459

Acquisition related and one-off items

7

(469)

 

(823)

Operating (loss)/profit

 

(414)

 

(364)

 

 

 

 

 

Financial income

 

1

 

1

Financial cost

 

(38)

 

(12)

 

 

 

 

 

Loss before tax

 

(451)

 

(375)

 

 

 

 

 

Tax income

8

191

 

432

 

 

 

 

 

(Loss)/profit for the year

 

(260)

 

57

 

 

 

 

 

Other comprehensive income/(loss)

 

 

 

 

Items that will be reclassified subsequently to profit and loss:

 

 

 

 

 

 

 

Currency translation differences

(30)

(24)

 

 

 

 

 

Total comprehensive (loss)/income for the year

 

(290)

 

33

 

Earnings per share

Basic

9

 

(1.32)p

0.29p

 

Diluted

9

 

(1.32)p

0.29p

 

             

 

See note 10 for details of restatement of 2017 numbers as a result of a change in accounting policy.

Cost of sales have been reduced by £0.289m in 2017 and administrative costs increased by the same amount due to the reclassification of contractors and internal development costs.

 

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2018

 

 

 Share

 

 Share

 

 Merger 

 

 Retained

 

Convertible

 

 Share

 

 Foreign

 

 Total

 

 capital

 

 premium

 

 reserve

 

 earnings

 

loan

 

 option

 

exchange

 

 

 

 

 

 

 

 

 

 

 

reserve

 

 

 

 

 

 

 

 £'000

 

 £'000

 

 £'000

 

 £'000

 

£'000

 

 £'000

 

 £'000

 

 £'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 1 January 2017 (as previously stated)

    983

 

      1,631

 

  365

 

     3,725

 

 

 

     85

 

  117

 

   6,906

Prior year adjustment IFRS 15 (see Note 26)

 

 

 

 

 

 

(1,190)

 

 

 

 

 

 

 

(1,190)

Balance at 1 January 2017 (restated)

    983

 

      1,631

 

  365

 

     2,535

 

     -

 

     85

 

  117

 

   5,716

Comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit for the year (as restated)

 -

 

 -

 

 -

 

   57

 

 -

 

 -

 

 -

 

 57

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exchange differences on translation of overseas operations

 -

 

 -

 

 -

 

 -

 

 -

 

 -

 

(24)

 

(24)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive income (as restated)

  -

 

-

 

      -

 

   57

 

     -

 

 -

 

(24)

 

 33

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transactions with owners

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share option charge

 -   

 

 -    

 

 -    

 

     4

 

 -

 

     16

 

 -     

 

 20

Issue of convertible loan note

 -

 

 -

 

 -

 

 -

 

  14

 

 -

 

 -

 

 14

Dividends paid

 -   

 

 -    

 

 -    

 

(551)

 

 -

 

 -

 

 -     

 

(551)

Total transactions with owners

 -

 

      -

 

      -

 

(547)

 

 14

 

    16

 

      -

 

(517)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 31 December 2017 (as restated)

    983

 

      1,631

 

  365

 

     2,045

 

  14

 

   101

 

    93

 

   5,232

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) for the year ended 31 December 2018

 -

 

 -

 

 -

 

(260)

 

 -

 

 -

 

 -

 

(260)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income/(loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exchange differences on translation of overseas operations

 -

 

 -

 

 -

 

 -

 

 -

 

 -

 

(30)

 

(30)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive income

  -

 

-

 

      -

 

(260)

 

     -

 

 -

 

(30)

 

(290)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transactions with owners

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share option charges

 -   

 

 -    

 

 -    

 

 -   

 

 -

 

5

 

 -     

 

   5

Dividends paid

 -   

 

 -    

 

 -    

 

(98)

 

 

 

 -

 

 -     

 

(98)

Total transactions with owners

 -

 

      -

 

      -

 

(98)

 

    -

 

      5

 

      -

 

(93)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 31 December 2018

    983

 

      1,631

 

  365

 

     1,687

 

  14

 

   106

 

    63

 

  4,849

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2018

 

 

 

Group

 

 

2018

 

2017

 

 

 

Restated

ASSETS

 £'000

 

 £'000

Non-current assets

 

 

 

Goodwill

3,415

 

3,415

Other intangible assets

4,754

 

4,881

Property, plant and equipment

113

 

164

Investments

-

 

-

Total non-current assets

8,282

 

8,460

Current assets

 

 

 

Inventories

3

 

3

Trade and other receivables

1,522

 

1,677

Cash and cash equivalents

725

 

1,390

Total current assets

2,250

 

3,070

Total assets

10,532

 

11,530

 

 

 

 

EQUITY AND LIABILITIES

 

 

 

Equity attributable to owners of the parent

 

 

 

Share capital

983

 

983

Share premium

1,631

 

1,631

Merger reserve

365

 

365

Convertible loan reserve

14

 

14

Retained earnings

1,687

 

2,045

Share option reserve

106

 

101

Translation reserve

63

 

93

Total equity

4,849

 

5,232

 

 

 

 

Liabilities

 

 

 

Non-current liabilities

 

 

 

Trade and other payables

690

 

794

Borrowings

390

 

386

Deferred tax liability

489

 

508

 

 

 

 

Current liabilities

 

 

 

Trade and other payables

4,370

 

4,775

Borrowings

14

 

5

Current tax payable

(270)

 

(170)

Total liabilities

5,683

 

6,298

 

 

 

 

Total liabilities and equity

10,532

 

11,530

           

 

 

 

 

CONSOLIDATED CASH FLOW STATEMENT

AS AT 31 DECEMBER 2018

 

 

2018

 

2018

 

2017

restated

 

2017

restated

Operating activities

£'000

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

 

 

(Loss) before tax

(451)

 

 

 

(375)

 

 

Adjustment for

 

 

 

 

 

 

 

Financial income

(1)

 

 

 

(1)

 

 

Financial cost

38

 

 

 

12

 

 

Depreciation and amortisation

1,714

 

 

 

1,938

 

 

Share option expense

5

 

 

 

20

 

 

Foreign exchange adjustments arising from operations

70

 

 

 

(12)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating cash flows before

1,375

 

 

 

1,582

 

 

movement in working capital:

 

 

 

 

 

 

 

(Increase) in receivables

171

 

 

 

573

 

 

Decrease in inventories

-

 

 

 

2

 

 

(decrease) in payables

(471)

 

 

 

(273)

 

 

 

 

 

 

 

 

 

 

Taxation refunded/(paid)

65

 

 

 

(12)

 

 

 

 

 

 

 

 

 

 

Net cash generated from operating activities

 

 

1,140

 

 

 

1,872

 

 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest received

1

 

 

 

1

 

 

Purchases of property, plant and

 

 

 

 

 

 

 

equipment

(55)

 

 

 

(55)

 

 

Investment in development costs

(1,481)

 

 

 

(1,439)

 

 

Contingent and deferred consideration paid

(146)

 

 

 

(219)

 

 

 

 

 

 

 

 

 

 

Net cash used in investing activities

 

 

(1,681)

 

 

 

(1,712)

 

 

 

 

 

 

 

 

Financing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial cost

(33)

 

 

 

(7)

 

 

Net proceeds from convertible loan note

-

 

 

 

400

 

 

Bank loan repayments made

-

 

 

 

(158)

 

 

Dividends paid

(98)

 

 

 

(551)

 

 

 

 

 

 

 

 

 

 

Net cash used in financing activities

 

 

(131)

 

 

 

(316)

 

 

 

 

 

 

 

 

Net decrease in cash and cash equivalents

 

(672)

 

 

 

(156)

 

 

 

 

 

 

 

Cash and cash equivalents at

 

 

1,390

 

 

 

1,537

beginning of year

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effect of foreign exchange rate changes

 

 

7

 

 

 

9

 

 

 

 

 

 

 

 

Cash and cash equivalents at end of year

 

 

725

 

 

 

1,390

 

 

 

 

NOTES TO THE FINANCIAL STATEMENTS

 

FOR THE YEAR ENDED 31 DECEMBER 2018

 

 

1.         Publication of non-statutory accounts

 

In accordance with section 435 of the Companies Act 2006, the Directors advise that the financial information set out in this announcement does not constitute the Group's statutory financial statements for the year ended 31 December 2018 or 2017, but is derived from these financial statements. The financial statements for the year ended 31 December 2017 have been audited and filed with the Registrar of Companies. The financial statements for the year ended 31 December 2018 have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union. The financial statements for the year ended 31 December 2018 have been audited and will be filed with the Registrar of Companies following the Company's Annual General Meeting. The Independent Auditors Report on the Group's statutory financial statements for the years ended 31 December 2018 and 2017 were unqualified and did not draw attention to any matters by way of emphasis and did not contain statements under Section 498(2) or (3) of the Companies Act 2006.

 

2.         Basis of preparation

 

The preliminary announcement is extracted from the consolidated financial statements of the Group. The financial statements of the subsidiaries are prepared for the same reporting date as the parent company. Consistent accounting policies are applied for like transactions and events in similar circumstances.

 

All intra-group balances, transactions, income and expenses and profits and losses resulting from intra-group transactions that are recognised in assets or liabilities are eliminated in full.

 

3.         Accounting policies and changes thereto

 

This preliminary announcement has been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year to 31 December 2018.

 

IFRS 9 and IFRS 15 are effective for the first time for the financial year beginning on or after 1 January 2018.  Details of the impact of IFRS 15 are seen in note 10.  The impact of moving to the expected credit loss model on receivables under IFRS9 required no adjustment to 1 Jan 2017 or 2018 balances.

The following standards have been issued by the IASB and have been adopted by the EU but not adopted early by the Group:

Standard

Key requirements

Effective date as adopted by the EU

 

 

 

IFRS 16

Leases

01-Jan-19

 

IFRS 16 requires almost all leases to be recorded in the statement of financial position.  This requires recognition of a right-of-use asset and lease liability.  The lease liability is measured as the present value of the future lease payments, discounted at the interest rate implicit in the lease if determinable, or otherwise at the lessee's incremental borrowing rate.  The asset is measured as equivalent to the lease liability, adjusted for other costs including initial direct costs or obligations under the lease such as restoration costs.  The asset is subsequently depreciated on a straight line basis to the expected maturity date of the lease.  The liability is increased by interest and reduced by the lease payments made. 

 

The Group expects to apply the modified retrospective approach in adopting IFRS 16.  This recognises the right-of-use asset at the date of initial application (1 January 2019).  The lease liability is measured based on remaining payments.  There is no effect on prior year figures and no need to re-state comparatives.

 

The Group has undertaken a review of its lease arrangements and concluded that the most significant leases the Group has are its offices.  Following the contracted closure of the Group's London offices, it is expected that the impact of this standard for the year ending 31 December 2019 will be reduced. 

 

These calculations assume no changes to the contracted leases anticipated in the reporting period to end 31 December 2019, although it is possible additional leases will be entered into or existing lease contracts amended during the forthcoming period. 

 

Under the existing standard (IAS 17) £130,000 would be expected as an expense in 2019.  The adjustment to 'Current liabilities - Trade and other receivables' arises on the reversal of an accrual in respect of rent-free periods and other cash timing differences that would be made under that standard.

 

 

4.         Reconciliation of adjusted operating profits to consolidated statement of comprehensive income 

 

 

Note

Adjusted operating profits

Acquisition related and one-off items

2018

 

Adjusted operating profits restated

Acquisition related items

2017 restated

 

2018

 2018*

 

 

2017

 2017*

 

 

 

 

 

 

 

 

 

 

 

 

£'000

 £'000

 

£'000

£'000

 £'000

 

 

 

 

 

 

 

 

 

Revenue

 

  8,692

 -

  8,692

 

  9,732

 -

  9,732

 

 

 

 

 

 

 

 

 

Cost of sales

 

(1,054)

 -

(1,054)

 

(1,247)

 -

(1,247)

 

 

 

 

 

 

 

 

 

Gross profit

 

  7,638

    -

  7,638

 

  8,485

      -

  8,485

 

 

 

 

 

 

 

 

 

Administrative expenses

 

(7,583)

(469)

(8,052)

 

(8,026)

(823)

(8,849)

 

 

 

 

 

 

 

 

 

Operating profit/(loss)

 

55

(469)

(414)

 

     459

(823)

(364)

 

 

 

 

 

 

 

 

 

Financial income

 

  1

    -

  1

 

  1

 -

  1

Financial cost

 

(38)

    -

(38)

 

(7)

(5)

(12)

 

 

 

 

 

 

 

 

 

Profit/(loss) before tax

 

18

(469)

(451)

 

     453

(828)

(375)

 

 

 

 

 

 

 

 

 

Tax income

 

     102

 89

     191

 

     281

 151

     432

 

 

 

 

 

 

 

 

 

Profit/(loss) for the year

 

120

(380)

(260)

 

 734

(677)

      57

Other comprehensive loss net of tax:

 

 

 

 

 

 

 

 

Currency translation differences

 

(30)

    -

(30)

 

(24)

 -

(24)

 

 

 

 

 

 

 

 

 

Total comprehensive income/(loss) for the year net of tax

 

90

(380)

(290)

 

     710

(677)

33

 

Earnings per share

Basic

9

0.61p

 

(1.32)p

3.73p

0.29p

Diluted

9

0.61p

 

(1.32)p

3.73p

0.29p

*  See note 7
 

5.         Segment reporting

 

The Board principally monitors the Group's operations in terms of results of the three divisions, Dillistone Systems, Voyager Software and GatedTalent. Segment results reflect management charges made or received. 

 

 

Divisional segments

For the year ended 31 December 2018

 

 

 

 

 

 

 

 

 

 

Dillistone

 

Voyager

 

GatedTalent

 

Central

 

Total

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

Segment revenue

  4,195

 

  4,429

 

68

 

 -

 

  8,692

Segment EBITDA

     723

 

  1,003

 

(485)

 

60

 

  1,301

Depreciation and amortisation expense

(644)

 

(475)

 

(127)

 

 

 

(1,246)

 

 

 

 

 

 

 

 -

 

 

Segment result

79

 

     528

 

(612)

 

60

 

55

 

 

 

 

 

 

 

 

 

 

Acquisition related amortisation

 -

 

 -

 

 -

 

(469)

 

(469)

 

 

 

 

 

 

 

 

 

 

Operating profit/(loss)

79

 

     528

 

(612)

 

(409)

 

(414)

 

 

 

 

 

 

 

 

 

 

Financial income

  -

 

  1

 

-

 

-

 

  1

Loan interest

 -

 

 -

 

-

 

(38)

 

(38)

 

 

 

 

 

 

 

 

 

 

Loss before tax

 

 

 

 

 

 

 

 

(451)

Income tax income

 

 

 

 

 

 

 

 

     191

Loss for the year

 

 

 

 

 

 

 

 

(260)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additions of non-current assets

     567

 

     536

 

     434

 

  -

 

  1,537

 

 

Divisional segments

For the year ended 31 December 2017

 

 

 

 

 

 

 

 

 

Dillistone restated

 

Voyager restated

 

GatedTalent

 

Central

 

Total restated

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

Segment revenue

  4,531

 

  5,201

 

 -

 

 -

 

  9,732

Segment EBITDA

     761

 

  1,367

 

(439)

 

(130)

 

  1,559

Depreciation and amortisation expense

(589)

 

(511)

 

 -

 

 

 

(1,100)

 

 

 

 

 

 

 

 -

 

 

Segment result

     172

 

     856

 

(439)

 

(130)

 

     459

 

 

 

 

 

 

 

 

 

 

Acquisition related amortisation

 -

 

 -

 

 -

 

(838)

 

(838)

Acquisition related income

 -

 

 -

 

 -

 

15

 

15

Operating profit/(loss)

     172

 

     856

 

(439)

 

(953)

 

(364)

 

 

 

 

 

 

 

 

 

 

Financial income

  1

 

 -

 

 

 

 

 

  1

Loan interest

 -

 

 -

 

 

 

(7)

 

(7)

Acquisition related interest expenses

 -

 

 -

 

 

 

(5)

 

(5)

Loss before tax

 

 

 

 

 

 

 

 

(375)

Income tax income

 

 

 

 

 

 

 

 

     432

Profit for the year

 

 

 

 

 

 

 

 

57

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additions of non-current assets

     608

 

     502

 

     396

 

 -

 

  1,506

                         

 

Products and services

The following table provides an analysis of the Group's revenue by products and services:

 

Revenue

 

 

 

2018

 

2017

restated

 

 

 

 £'000

 

 £'000

Recurring income

 

 

7,154

 

7,942

Non-recurring income

 

 

1,169

 

1,326

Third party revenues

 

 

369

 

464

 

 

 

8,692

 

9,732

 

In the analysis above 'Recurring income' represents all income recognised over time, whereas 'Non-recurring income' and 'Third party revenues' represent all income recognised at a point in time. 

 

Recurring income includes all support services, SaaS and hosting income and revenue on perpetual licenses with mandatory support contracts deferred under IFRS 15. Non-recurring income includes

 

sales of new licenses which do not require a support contract, and income derived from installing licences including training, installation and data translation.  Third party revenues arise from the sale of third party software.

 

It is not possible to allocate assets and additions between recurring, non-recurring income and third party revenue. No customer represented more than 10% of revenue of the Group in 2018 or 2017.

 

6.         Geographical analysis

 

The following table provides an analysis of the Group's revenue by geographic market.  The Board does not review the business from a geographical performance viewpoint and this analysis is provided for information only.

 

Revenue

 

 

 

2018

 

2017

restated

 

 

 

 £'000

 

 £'000

UK

 

 

6,188

 

6,782

Europe

 

 

1,007

 

1,041

US

 

 

1,118

 

1,341

Australia

 

 

379

 

418

 

 

 

8,692

 

9,732

 

Non-current assets by geographical location

 

 

 

2018

 

2017

restated

 

 

 

 £'000

 

 £'000

UK

 

 

8,274

 

8,453

US

 

 

4

 

5

Australia

 

 

4

 

2

 

 

 

8,282

 

8,460

 

7.         Acquisition related and other one-off items

 

 

 

2018

 

2017

 

 

 

 £'000

 

 £'000

Included within administrative expenses:

 

 

 

 

 

Estimated change in fair value of contingent consideration

 

 

-

 

(15)

Amortisation of acquisition intangibles

 

 

469

 

379

Acceleration of amortisation of acquisition intangibles

 

 

-

 

459

 

 

 

469

 

823

Included within financial cost:

 

 

 

 

 

Unwinding of discount on contingent consideration

 

 

-

 

5

 

 

 

 

 

 

 

 

 

469

 

828

 

 

 

 

 

 

 

 

8.         Tax income

 

 

 

2018

 

2017

restated

 

 

 

 £'000

 

 £'000

 

 

 

 

 

 

Current tax

 

 

(165)

 

(100)

Prior year adjustment - current tax

 

 

(7)

 

(238)

Total current tax

 

 

(172)

 

(338)

 

 

 

 

 

 

Deferred tax

 

 

64

 

58

Prior year adjustment - deferred tax

 

 

6

 

(1)

Deferred tax re acquisition intangibles

 

 

(89)

 

(151)

Total deferred tax

 

(19)

 

(94)

Tax (income) for the year

 

(191)

 

(432)

 

 

 

 

 

 

 

 

 

 

Factors affecting the tax credit for the year

 

 

 

Loss before tax

 

 

(451)

 

(375)

 

 

 

 

 

 

UK rate of taxation

 

 

19.00%

 

19.25%

 

 

 

 

 

 

Loss before tax multiplied by the UK rate of taxation

(86)

 

(72)

 

 

 

 

 

 

Effects of:

 

 

 

 

 

Overseas tax rates

 

 

(3)

 

1

Impact of deferred tax not provided

 

 

10

 

18

Enhanced R&D relief

 

 

(148)

 

(209)

Disallowed expenses

14

 

32

IFRS15 impact

 

 

(25)

 

 

Rate differences re current tax and deferred tax

 

 

(7)

 

(1)

Rate difference between CT rate and rate of R&D repayment

 

 

55

 

 

38

Prior year adjustments

 

 

(1)

 

(239)

Tax (income)

 

 

(191)

 

(432)

 

Deferred tax liability provided in the financial statements is as follows:

 

 

 

Group

 

 

 

2018

Movement

2017

restated

 

 

 

 £'000

£'000

 £'000

 

Internally generated intangible and fixed assets

 

251

(90)

341

 

IFRS 15

 

-

160

(160)

 

Provisions

 

-

 

-

 

Acquisition intangibles

 

238

(89)

327

 

 

 

489

(19)

508

 

 

 

 

 

 

Group

 

 

 

2017

Restated

Movement

restated

2016

Restated

 

 

 

 £'000

£'000

 £'000

 

Internally generated intangible and fixed assets

 

 

341

26

 

315

 

IFRS 15

 

(160)

22

(182)

 

Provisions

 

-

9

(9)

 

Acquisition intangibles

 

327

(151)

478

 

 

 

508

(94)

602

 

 

The UK corporation tax rate for the year is 19.00%.  Deferred tax is provided in relation to the UK at rates of between 17% to 19% depending on when reversals are expected to occur. The tax credit is impacted by the R&D tax credits available to Dillistone Systems division, Voyager Software division and GatedTalent division.  It has also been assumed that where there are tax losses arising as a result of R&D tax credits they will be surrendered for a tax repayment at the HMRC stated rate of 14.5%.  The Group has gross tax losses of £154,000 (2017: £205,000) for which no deferred tax asset has been recognised as the timing of their utilisation is uncertain.

 

9.         Earnings per share

 

 

2018

2018

2017

2017

 

 

Using adjusted operating profit

 

Using adjusted operating profit

restated

restated

 

 

 

 

 

 

 

Profit/(loss) attributable to ordinary shareholders (note 2)

£120,000

£(260,000)

£734,000

£57,000

Weighted average number of shares

19,668,021

19,668,021

19,668,021

19,668,021

Basic earnings/(loss) per share

0.61 pence

(1.32) pence

3.73 pence

0.29 pence

 

 

 

 

 

 

Weighted average number of shares after dilution

19,797,067

19,668,021

19,676,018

19,676,018

 

Fully diluted earnings/(loss) per share

0.61 pence

(1.32) pence

3.73 pence

0.29 pence

 

 

Reconciliation of basic to diluted average number of shares:

 

 

 

2018

 

2017

 

 

 

 

 

 

Weighted average number of shares (basic)

 

 

19,668,021

 

19,668,021

Effect of dilutive potential ordinary shares - employee share plans

 

 

129,046

 

7,997

Weighted average number of shares after dilution

 

19,797,067

 

19,676,018

 

There are 919,848 (2017: 1,270,732) share options not included in the above calculations, as they are underwater or have not yet vested.

 

The impact of the convertible loan notes in the period is not dilutive and therefore does not impact the calculation of the fully diluted earnings per share.
 

10.       IFRS 15 impact on 2017 and 2018 results

 

The material change to the Group's reported revenue following adoption of IFRS 15 arose on the timing of recognising revenue on perpetual licences sold with mandatory support contracts.  Previously, these licences were deemed separate from the support contract, whereas under IFRS 15 they represent one performance obligation.  Revenue on such licence sales was thus recognised at a point in time, on the customer's practical acceptance of the software.  Under IFRS 15, this revenue is recognised over time. 

 

As the actual life of the support contract is unknown at inception, an estimate of 5 years has been made following analysis of the historic turnover rates of support contracts.  If this period was shorter, revenue would be recognised more quickly and vice versa. 

 

Revenue from previous periods is thus deferred and recognised later.  Adjustments are required to:

 

-     Revenue in the period, being revenue released as deferred from prior periods and current period revenue deferred;

-     Retained earnings, being revenue deferred from prior periods and cumulative tax effects;

-     Trade and other liabilities both current and non-current, being deferred revenue; and

-     Deferred and current tax, arising on revenue already subject to tax that will be recognised in future periods.

 

The results for 2018 fully incorporate these changes. As IFRS 15 has been adopted retrospectively, the reported results for 2017 must also be adjusted as if that standard applied in full to that period. 

 

The impact of adopting IFRS 15 therefore had the following effect on the Group's primary financial statements:

 

Impact on the Consolidated Statement of Comprehensive income for the year ended 31 December 2017

 

As reported previously

Effect

As reported under IFRS 15

 

 

 

 

 

£'000

£'000

£'000

Revenue

9,582

150

9,732

Cost of sales

(1,536)

-

(1,536)

Gross profit

8,046

150

8,196

Administrative expenses

(8,560)

-

(8,560)

 

 

 

 

Result from operating activities

(514)

150

(364)

 

 

 

 

Financial income

1

-

1

Financial cost

(12)

-

(12)

Loss before tax

(525)

150

(375)

 

 

 

 

Tax income

454

(22)

432

(Loss) /profit for the period

(71)

128

57

 

 

 

 

Impact on Consolidated statement of financial position as at 31 December 2017 

 

 As reported previously 

 Effect

 As reported under IFRS 15 

 

 £'000

 £'000

 £'000

 ASSETS

 

 

 

 Non-current assets

 8,460

-

  8,460

 Current assets

 3,070

-

  3,070

 Total assets

  11,530

-

11,530

 

 

 

 

 EQUITY AND LIABILITIES

 

 

 

 Equity

 

 

 

 Share capital

 983

-

  983

 Share premium

 1,631

-

  1,631

 Merger reserve

 365

-

  365

 Convertible loan reserve

14

-

 14

 Retained earnings

 3,107

(1,062)

  2,045

 Share option reserve

 101

-

  101

 Translation reserve

93

-

 93

 Total equity

 6,294

(1,062)

  5,232

 

 

 

 

 Liabilities

 

 

 

 Non current liabilities

 

 

 

 Trade and other payables

12

 782

  794

 Borrowings

 386

  - 

  386

 Deferred tax

 668

(160)

  508

 Current liabilities

 

 

 

 Trade and other payables

 4,335

 440

  4,775

 Borrowings

  5

 -

 5

 Current tax (receivable)/payable

(170)

 -

(170)

 Total liabilities

 5,236

 1,062

  6,298

 

 

 

 

 Total liabilities and equity

  11,530

-

11,530

 

 

 

 

Impact on Consolidated statement of cash flows for year ended 31 December 2017

 

 As reported previously 

 Effect

 As reported under IFRS 15 

 

 £'000

 £'000

 £'000

 

 

 

 

Operating activities 

 

 

 

Loss before taxation

(525)

 150

(375)

Operating cash flows before movements in working capital 

 1,432

 150

1,582

 

 

 

 

Decrease in receivables 

 573

-

 573

Decrease in inventories

2

-

  2

Decrease in payables 

(123)

(150)

(273)

Taxation Paid

(12)

-

(12)

 

 

 

 

 Net Cash generated by operating activities 

 1,872

 -

1,872

 

 

Impact on Consolidated Statement of Comprehensive Income for year ended 31 December 2018.

.

 

Under previous accounting policy

Effect of IFRS 15

 As reported under IFRS 15 

 

 

 

 

 

£'000

£'000

£'000

Revenue

8,588

104

8,692

Cost of sales

(1,054)

 -

(1,054)

Gross profit

7,534

104

7,638

Administrative expenses

(8,052)

 -

(8,052)

 

 

 

 

Result from operating activities

(518)

104

(414)

 

 

 

 

Financial income

1

 -

1

Financial cost

(38)

 -

(38)

Loss before tax

(555)

104

(451)

 

 

 

 

Tax income

206

(15)

191

(Loss) /profit for the period

(349)

89

(260)

 

 

 

 

 

Impact on Consolidated Statement of Financial Position for year ended 31 December 2018

 

 

Under previous accounting policy

Effect of IFRS 15

 As reported under IFRS 15 

 

 

 

 

 

 £'000

 £'000

 £'000

 ASSETS

 

 

 

 Non-current assets

8,282

 -

8,282

 Current assets

2,250

 -

2,250

 Total assets

10,532

 -

10,532

 

 

 

 

 EQUITY AND LIABILITIES

 

 

 

 Equity

 

 

 

 Share capital

983

 -

983

 Share premium

1,631

 -

1,631

 Merger reserve

365

 -

365

 Convertible loan reserve

14

 -

14

 Retained earnings

2,659

(972)

1,687

 Share option reserve

106

 -

106

 Translation reserve

73

(10)

63

 Total equity

5,831

(982)

4,849

 

 

 

 

 Liabilities

 

 

 

 Non current liabilities

 

 

 

 Trade and other payables

2

688

690

 Borrowings

390

 -

390

 Deferred tax

518

(29)

489

 Current liabilities

 

 

 

 Trade and other payables

3,931

439

4,370

 Borrowings

14

 -

14

 Current tax (receivable)/payable

(154)

(116)

(270)

 Total liabilities

4,701

982

5,683

 

 

 

 

 Total liabilities and equity

10,532

 -

10,532

 

 

 

 

Impact on Consolidated Statement of Cash flows for year ended 31 December 2018

 

 

Under previous accounting policy

Effect of IFRS 15

 As reported under IFRS 15 

 

 

 

 

 

 £'000

 £'000

 £'000

 

 

 

 

Operating activities 

 

 

 

Loss before taxation

(555)

104

(451)

Operating cash flows before movements in working capital 

1,271

104

1,375

 

 

 

 

Decrease in receivables

171

 -

171

Decrease in inventories

-

 -

-

Decrease in payables

(367)

(104)

(471)

Taxation Paid

65

 -

65

 

 

 

 

Net Cash generated by operating activities 

1,140

 -

1,140

 

 


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