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Monday 12 April, 2021

Darktrace PLC

Expected Intention to Float

RNS Number : 0611V
Darktrace PLC
12 April 2021
 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM AUSTRALIA, CANADA, JAPAN OR THE UNITED STATES OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT

 

This announcement is an advertisement for the purposes of the Prospectus Regulation Rules of the Financial Conduct Authority ("FCA") and is not a prospectus and not an offer of shares for sale in any jurisdiction, including in or into Australia, Canada, Japan or the United States.

 

Neither this announcement, nor anything contained herein, nor anything contained in the Registration Document referred to herein shall form the basis of, or be relied upon in connection with, any offer or commitment whatsoever in any jurisdiction. Investors should not subscribe for or purchase any shares referred to in this announcement or in the Registration Document except solely on the basis of the information contained in a prospectus in its final form (together with any supplementary prospectus, if relevant, the "Prospectus"), including the risk factors set out therein, that may be published by Darktrace plc (the "Company") in due course in connection with a possible offer of ordinary shares in the capital of the Company (the "Shares") and the possible admission of such Shares to the premium listing segment of the Official List of the FCA and to trading on the main market of London Stock Exchange plc (the "London Stock Exchange"). A copy of any Prospectus will, if published, be available on Darktrace's website at www.darktrace.com subject to certain access restrictions.

 

12 April 2021

 

Darktrace plc

Announcement of Intention to Publish a Registration Document and Potential IPO on the main market of the London Stock Exchange

 

Darktrace plc (the "Company", and together with its subsidiaries and subsidiary undertakings, the "Group" or "Darktrace"), a world-leading provider of artificial intelligence ("AI") for the enterprise, with the first at-scale in-the-enterprise deployment of AI in cyber security, announces that it is considering an initial public offering (the "IPO" or the "Offer") and that it intends to publish a registration document (the "Registration Document") today. The Company is considering applying for admission of its Shares to the premium segment of the Official List of the FCA and to trading on the Main Market of the London Stock Exchange ("Admission").

   

Group Highlights:

·     Darktrace was founded in 2013 with a mission to fundamentally transform the ability of organisations to defend their most critical assets in the face of rising cyber threats. Darktrace is a world-leading provider of AI for the enterprise, with the first at-scale in-the-enterprise deployment of AI in cyber security. Darktrace is a pioneer of AI and is at the forefront of autonomous response technology. Created by cyber experts and mathematicians, the Group's platform uses machine learning and AI algorithms to detect and respond to cyber threats across diverse digital estates, including the cloud and virtualised networks, Internet of Things ("IoT") and industrial control systems.

·     Darktrace's AI platform can be applied to companies of almost all sizes, across all sectors and geographies, and is complementary to traditional security solutions likely already used by prospective customers. The Group estimates that its current bottom-up total addressable market ("TAM") is worth approximately $40 billion, reflecting a substantial global greenfield opportunity for Darktrace to capitalize on to sustain its strong growth.

·     Darktrace's primary approach to acquire new customers is through the Proof of Value ("POV") trials of its technology. The POV generally consists of a three week trial of Darktrace's products, allowing each potential new customer the opportunity to evaluate the capabilities of the platform's self-learning technology on the potential customer's own systems free of charge. Upon commencing the POV, Darktrace's products are deployed across a potential new customer's digital business either in the cloud or in an on-premise appliance. The technology is activated quickly with minimal set-up time or expense, without requiring significant customisation. The POV is therefore both fast and replicable.

·    From fiscal year 2018 to fiscal year 2020 the Group's revenue has grown from $79.4 million to $199.1 million at a compound annual growth rate of 58.3%. Adjusted EBITDA has improved from a $27 million loss to a $9 million profit over the same period, helped by a decrease in travel costs as a result of governmental travel restrictions imposed due to the COVID-19 pandemic. The Group's customers have increased by a compound annual growth rate of 52% between the fiscal years 2018 and 2020 from 1,659 to 3,858.

· This growth is combined with a high level of revenue visibility, driven by a subscription-based revenue model. The Group generates revenue primarily from subscription contracts, together with a small number of non-subscription contracts primarily for servicing and support on early perpetual licences and separate sales of training or appliances. Since fiscal year 2018, these subscription contracts accounted for more than 99.5% of the Group's revenue.

· While many companies attempt to integrate AI into their solutions, Darktrace's AI heritage has driven its technological leadership. The Group's first-mover advantage is amplified by the virtuous cycle of its self-learning technology improving with additional data. The Group's platform is underpinned by cloud-native technology, enabling flexible deployment of all products across all digital businesses. The Directors believe there is substantial potential to apply its technology to additional uses across the enterprise, resulting from its unique approach of understanding enterprises' "normal".

· The Group's management team has significant experience in AI technology, product development, sales and marketing. Each member has multiple years' experience in the software and AI industries. The majority of senior management has been with Darktrace since inception, including its Chief Executive Officer, Poppy Gustafsson OBE. The experience and energy of the management team have led the Group through its rapid growth and industry leadership. Darktrace has retained its innovation-led, energetic culture since inception, driving high employee satisfaction and retention. 

 

Gordon Hurst, Chairman of Darktrace, said:

 

  "Darktrace is a global pioneer of self-learning AI. As one of Europe's fastest growing technology companies, it has driven impressive growth over the past seven years as it seeks to empower organisations to defend their systems against increasingly complex and aggressive cyber threats.

Led by a highly experienced management team with deep AI expertise, I believe that Darktrace is uniquely placed to continue to grow, harnessing its innovative technology, leading market position and strong balance sheet   to enter new sectors and geographies with its cyber AI platform."

 

 Poppy Gustafsson, Chief Executive of Darktrace, added:

 

  " Our intention to list on the London Stock Exchange marks a major milestone in Darktrace's history of rapid growth, and a historic day for the UK's thriving technology sector.

 

Since our foundation in 2013, our mission has been to apply fundamental technology to one of the most critical challenges facing organizations in all sectors: cyber security. Developed by our talented software engineering teams in Cambridge, our artificial intelligence was the first on the market to be deployed at-scale in the enterprise, and today is responsible for protecting over 4,700 organizations worldwide from the most sophisticated cyber-threats. 

Every second, Autonomous Cyber AI responds to an attack without requiring human intervention - transforming the organization's ability to protect their most critical data and intellectual property. 

Darktrace's success has been built on the shoulders of giants: our world-leading position is testament to the strength of the UK's world-leading science base and long history of mathematical discovery and computing inventions, from Charles Babbage and Ada Lovelace to Alan Turing. We are proud to be part of that tradition of British innovation, as the UK becomes a leading global centre for the development of AI. 

As we look forward to the next chapter, I want to recognize the achievements of all Darktrace employees in challenging our industry with a new technological approach, serving our customers with game-changing solutions, and growing our business to become a global leader. Our proven track record puts us in a strong position to build on our momentum, continue to innovate, and expand our customer base internationally. "  

 

Potential Offer Highlights:  

Should Darktrace proceed with an IPO, the current expectation is that:

 

· The Company's shares would be admitted to the premium segment of the Official List of the FCA and to trading on the Main Market of the London Stock Exchange

· The Offer would comprise a primary offer to raise proceeds to accelerate new product development, drive broader awareness of the Company's products globally and to provide balance sheet strength and financial flexibility. There would also be a secondary sell-down of existing ordinary shares by certain existing shareholders

· The Offer would be a targeted offering to institutional investors outside the United States pursuant to Regulation S and to QIBs in the United States pursuant to Rule 144A under the United States Securities Act of 1933 (the "Securities Act")

· Immediately following Admission, the Company would have a free float of at least 20% of issued share capital and expects that it would be eligible for inclusion in the FTSE UK indices. In addition, it is expected that Shares representing up to a further 15% of the Offer will be made available pursuant to an over-allotment option.

· Any additional details in relation to the Offer, together with any changes to corporate governance arrangements would be disclosed in a Confirmation of Intention to Float announcement and/or the Prospectus, if and when published

· The Company has engaged Jefferies International Limited ("Jefferies"), Joh. Berenberg, Gossler & Co. KG, London Branch ("Berenberg") and KKR Capital Markets Partners LLP ("KKR Capital Markets") as Joint Global Co-ordinators and Joint Bookrunners, Needham & Company, LLC ("Needham & Company") and Piper Sandler & Co ("Piper Sandler") as Joint Bookrunners in the event the Offer proceeds.

 

A copy of the Registration Document will be submitted to the National Storage Mechanism and will be available for inspection at  https://data.fca.org.uk/#/nsm/nationalstoragemechanism  once approved by the FCA. A copy of the Registration Document will also be available online at  www.darktrace.com , subject to certain access restrictions.

 

Access to supplemental information for bona-fide, unconnected research analysts:  Information in relation to the Company will be made available via a link to unconnected research analysts today. Please contact Luk Janssens ( [email protected] ), Head of Investor Relations at the Company if you are a research analyst and would like to receive access to the information.

 

Competitive Strengths:

The Directors believe that the Group benefits from the following competitive strengths:

 

Leading AI platform in enterprise computing with first application in cyber security

 

The Group is at the forefront of introducing autonomous self-learning technology through its AI immune system approach. The AI immune system approach is self-learning and continuously evolving, understanding clouds, networks, endpoints, users and their interactions. The Directors believe that this powerful technology will have many applications across a variety of sectors. Given the limitations of traditional technology in the cyber security sphere that is underscored by public security breaches of governments and large corporations, the Group has focused the first application of this technology in cyber security. The AI immune system approach focuses on understanding a customer's business itself, rather than using signature or rule-based approaches based on historical attack data or predictions, which are often employed by traditional perimeter-focused security solutions attempting to integrate AI. Through an understanding of a customer's business, the platform can detect aberrations to an individual customer's "normal" digital operating state, thus providing a revolutionary security production, complementary to traditional perimeter-focused security approaches, and can neutralise threats across digital businesses that would otherwise go unnoticed. In addition to current and planned cyber security innovations, the Group's technology has substantial potential beyond cyber by introducing AI throughout enterprise IT.

 

At the forefront of the next evolutionary wave in the cyber security industry

 

Digital businesses are often fragmented and involve complex IT estates. With the rise of Cloud and IoT, and the proliferation of data, the boundaries of IT networks are increasingly blurred. This increasing scope and complexity has left traditional perimeter-focused security approaches struggling to keep up and organisations vulnerable to attacks, evidenced by the cyber infiltration of 80% of Fortune 500 companies.[1]  Darktrace's innovative technology is leading the next evolutionary wave to combat increasingly complex and aggressive threats, by upending traditional limitations through a fundamentally different approach. The Darktrace Enterprise Immune System uses advanced AI technology to understand the "normal" of an organisation as the basis of security, recognising normal interactions for the individual business and responding at machine speed to abnormal interactions. Instead of securing perimeters, this understanding of "normal" cuts across an organisation's fragmented and complex IT estates, understanding the normal interactions between each component part and responding when an individual system's normal is disturbed. Darktrace's cloud-native AI technology incorporates unsupervised machine learning and deep learning capabilities driving Darktrace's scalable, self-learning and constantly adapting technology. Darktrace's technology autonomously detects and responds to anomalies at machine speed, intending to identify as early as possible.

 

The leading autonomous cyber security AI products, with ability to autonomously detect, respond and investigate threats

 

Darktrace's AI platform is comprehensive, underlying a broad range of solutions that incorporate self-learning detection, autonomous response and automated investigation capabilities. This broad range combines multiple products on one unified, simple to use platform, providing full visibility, via a customisable dashboard, into an organisation's digital estate. In addition, the platform's breadth creates a defensive capability as it uses broad access enterprise data to continuously to improve its capabilities. Darktrace's key product families include:

·   Enterprise Immune System: Darktrace's flagship AI technology solution, with individual Enterprise and Industrial focused products, provides self-learning technology for detecting cyber-threats and vulnerabilities.

·   Darktrace Antigena: self-learning technology autonomously responding to network and email cyber-threats and vulnerabilities, at machine-speed with targeted and proportionate responses.

· Cyber AI Analyst: automatically triages, interprets and reports on a broad scope of security incidents, addressing a shortage of cyber professionals by augmenting human cyber security teams.

 

The Darktrace platform spans the entire digital estate, from the workforce, including email, Software as a Service ("SaaS") applications and endpoints, to infrastructure, including on-premise, hybrid and cloud networks, to industrial settings, including OT and IoT. Darktrace's broad approach stands in contrast to traditional siloed solutions, which create perimeters around specific components, historically often leaving exploitable gaps in protection.

 

Differentiated sales model and strong value proposition for customers and partners drive rapid new customer growth and long-term customer relationships

 

The Group's business model, high quality security platform and the user-friendly interface of this platform have enabled the Group to build a strong brand and loyal customer base for its AI platform. Darktrace's primary approach to acquire new customers is through the Proof of Value ("POV") trials of its technology. POVs require limited scoping and minimal set-up, and thus can demonstrate Darktrace's substantial value proposition to potential customers normally within the trial period. POVs form the basis of a highly replicable and scalable sales approach, revealing to prospective customers' security issues, driving rapid purchasing processes. In 2020, approximately 74% of POVs identified serious vulnerabilities in a prospective customer's digital estate, providing a clear demonstration of Darktrace's value proposition.

 

The majority of the Group's sales are generated by its direct sales personnel. The Group relies heavily on its direct sales personnel to promote its platform and, as such, prefers a "home-grown" approach to training its employees, primarily hiring new graduates. Darktrace's sales team consists of energetic graduate hires from top universities with strong academic qualifications. The sales team is trained and developed over time. The Directors believe customers appreciate the drive and clarity of the sales team. Channel partners, including resellers and system integrators, supplement the direct sales force, further driving customer base expansion.

 

The impact of Darktrace's unique AI platform and sales approach has resulted in a rapidly expanding customer base and long-term customer relationships. This customer base includes customers across all industries and organisations of all sizes, and the Group's customers have increased by a compound annual growth rate of 53% between the financial years ended 30 June 2018 and 30 June 2020. Among these customers, Darktrace has become a trusted partner to multiple blue-chip organisation customers, which grant Darktrace access to their central corporate computing systems. As of 31 December 2020, the Group had over 4,600 customers, with customers in more than 100 countries.

 

Broader adoption of technology platform enables substantial growth opportunities

 

Darktrace was founded with a philosophy focused on understanding the "self" of the customer's business. This in turn enables the Group's vision of a full "closed loop" approach, already including detection and response, with remediation and prevention under development. A self-learning, self-healing network that can protect, detect, defend and heal, benefits from a virtuous cycle in which each component feeds the next. This "closed loop" approach is the basis for a unique, fully automated cyber security solution. Darktrace believes the value of the platform and closed loop approach are easily understood by customers, as evidenced by upsells and cross-selling to existing customers. Customers increasingly purchase products across the entire Darktrace platform, with 81% of customers in the six months ended 31 December 2020 buying two or more products, up from 27% in the financial year ended 30 June 2018.

 

Attractive financial model combining rapid growth at scale, revenue visibility, strong underlying profitability, and cash generation potential

 

The Group has an established track record of rapid growth, continuing as the business has scaled, increasing by a CAGR of 58% annually from the end of the financial year 2018 to the end of the financial year 2020. This growth is combined with a high level of revenue visibility, driven by a subscription-based revenue model, typically paid up front, enhancing the predictability and visibility of the Group's future revenue streams. For the financial years ended 30 June 2020, 2019 and 2018, as well as the six months ended 31 December 2020 and 2019, substantially all of the revenue was derived from subscription-based contracts. Revenues are primarily derived from prior period billings recorded as deferred revenue to be recognised in future periods. Revenue from subscription agreements is recognised on a deferred basis over the life of the agreement, which average three years. As of 31 December 2020, the Group had $612.3 million in RPO, representing revenue contracted but not yet recognisable.

 

As an AI-driven technology company, the Group benefits from industry-leading gross margins, in contrast to more bespoke software companies. In addition, the Group has low overhead costs, with its personnel costs comparatively low, due to its research and development team being located in Cambridge, UK, a lower-cost jurisdiction than, for example, Silicon Valley, US. The Group's highly efficient research and development spend is also driven by the self-learning nature of its technology, which by design requires less input from engineers to improve performance. The Group also maintains a cost-efficient distribution model with comparatively lower sales costs due to the model of hiring and training talented graduates. The relatively low capital needs associated with the Group's business model enable strong operating cash flow generation potential.

 

Experienced management team with strong track record of execution and deep AI expertise

 

The Group's management team has significant experience in AI technology, product development, and sales and marketing. Each member has multiple years of experience in the software and AI industries. The majority of senior management has been with Darktrace since inception. The experience and energy of the management team have led the Group through its rapid growth and industry leadership, increasing total customers from approximately 230 in the financial year ended 30 June 2016 to more than 4,600 in the six months ended 31 December 2020. The Group's management team has experience working at blue-chip companies such as Oracle, Quest, 2U, Imperva, and Autonomy, and has been key in attracting and retaining talent from similar companies. Darktrace has retained its innovation-led, energetic culture since inception, driving high employee satisfaction.

 

Group Strategy:

The Group has the following key business growth strategies:

 

Continued focus on innovation to further strengthen existing capabilities, add new capabilities, add new use cases, and amplify the virtuous cycle of the Group's "closed loop" strategy

 

The Group's next phase of product development is focusing on prevention and cyber compliance using automated penetration testing and cyber hygiene compliance, as well as self-healing and self-remediating technologies. In collaboration with Darktrace's current offerings, these products aim to offer a full "closed loop" AI platform operating at machine speed. The individual capabilities of the closed loop expect to amplify each other's strengths, leading to an embedded virtuous cycle of self-learning and self-healing technology. In addition, the Group's existing products already span a broad spectrum of the digital estate and provide critical security capabilities. The Group's products are uniquely positioned to improve over time as a result of the self-learning technology underpinning the Group's products. As more data from existing and new customers is fed into the Group's AI technology, the products become better at detecting and responding to new threats while adapting to changing environments. Ever-improving products in turn enable the Group to attract new customers resulting in a virtuous circle of self-learning technology.

 

Continue to win new customers, leveraging a highly effective go-to-market strategy, and address a large greenfield opportunity

 

The Darktrace AI platform is based on advanced AI technology that detects and responds to attacks other solutions may not identify. It also offers a simple to set up, simple to use, and easy to understand experience. In addition, this experience is easy to demonstrate on potential customers' own systems in a trial period through POVs, which convert into new customers at a high rate. Based on a combination of energetic sales teams and an impactful POV sales approach, the Group has a highly effective and differentiated go-to-market strategy with a proven track record of generating rapid growth in customers. Using this effective go-to-market strategy, Darktrace's AI platform can be applied to companies of all sizes, across all sectors and geographies and is complementary to traditional security solutions likely already present in prospective customers. There is therefore a substantial global greenfield opportunity in winning new customers.

 

Drive platform adoption

 

The Group has a track record of increasing the number of products per customer over time, increasing the percentage of customers with two or more products from 27% in the financial year ended 30 June 2018 to 81% in the six months ended 31 December 2020. The Group's multiple products also enable multiple entry points to win new customers, and further product expansion to complete the "closed loop" will provide additional entry points. The Group has a track record of expanding within existing customers, increasing the number of accounts with ARR above $100,000 and above $250,000 over time. Additional ARR comes from volume-based subscription pricing, arising from cross-selling and by increasing the coverage of existing customer estates. As the Group has expanded, it has been able to increase focus on maintaining relationships with its existing customers by establishing an internal customer success team, providing consistent coverage of top accounts and expecting to drive substantial upside to net dollar retention rates. The Group aims to use its scale, historical expertise and user data continuously to find new up-sell and cross-sell opportunities.

 

Continue to expand globally

 

The Group has customers in more than 100 countries globally. In the six months ended 31 December 2020, the Group generated 18.1%, 20.5%, 39.4%, and 22.0% of its billings from customers in the UK, Europe (excluding the UK), the US and Canada, and the rest of the world, respectively. The Directors expect the Group's operations in the Americas to grow at a higher rate than in Europe and the rest of the world, even whilst operations in Europe and the rest of the world are expected to continue to grow at rates that exceed those of the market. The Directors believe that the Group's strong footprint in Europe and significant presence in the US, as well as dedicated customer success team function and channel partners, provide considerable opportunity to grow across all of the Group's key geographical regions. As a result, the Group intends to grow the sales teams, particularly in the US, and continue to invest in marketing and industry events to increase brand awareness.

 

 Apply existing core capabilities to expand technology to additional uses across the enterprise

 

Darktrace's AI immune system approach is the first at scale use of AI in the enterprise. While many companies attempt to integrate AI into their solutions, Darktrace's AI heritage has driven its technological leadership. The Group's first mover advantage is amplified by the virtuous cycle of its self-learning technology improving with additional data. The Group's platform is underpinned by cloud-native technology, enabling flexible deployment of all products across all digital businesses. The Directors believe there is substantial potential to apply its technology to additional uses across the enterprise, resulting from its unique approach of understanding an organisation's "normal".

 

Enquiries:

Brunswick (Public Relations adviser to Darktrace)

Charles Pretzlik / Caroline Daniel

+44 (0)20 7404 5959

[email protected] 

 

Joint Global Co-ordinators and Joint Bookrunners

 

Jefferies (Sole Sponsor)

Simon Hardy / Dominic Lester / Luca Erpici (Equity Syndicate) / Nandan Shinkre / Will Soutar

+44 (0)207 029 8000

 

Berenberg

Chris Bowman / Alex Reynolds / Andy Bickerton (Equity Syndicate) / Mark Whitmore / Jen Clarke

+44 (0)203 207 7800

 

KKR Capital Markets

David Bauer / Lauren Hahn / Eric Han

+1 646 627 0270 

 

Joint Bookrunners

 

Needham & Company

Matt Castrovince

+1 212 705 0458

 

Piper Sandler

Matthew Wolfe

+1 415 369 7298

 

FURTHER INFORMATION ON THE GROUP

 

Trading Information:

In the period since 31 December 2020, the Group has traded in line with management's expectations, achieving sales levels as anticipated for the time of year and current size of its productive salesforce. Customer interest in the Group's technology and products remains healthy and consistent with achieving its growth objectives for the current financial year.

 

Key Performance Indicators and Financial Information

The Group regularly reviews a number of metrics, including the following key metrics, to evaluate its business, measure its performance, identify trends affecting its business, formulate financial projections and make strategic decisions. The presentation of year-over-year growth in net ARR added and ARR, as well as one-year gross ARR churn and net ARR retention rate, are based on constant currency exchange rates as of 30 June 2020. The presentation of RPO uses rates as of the last day of the reporting period as the Group believes this more closely aligns to future revenue value.

In addition to the Group's results determined in accordance with IFRS, the Directors believe the following measures are useful in evaluating the Group's operating performance:

 

Six months ended
31 December

Financial Year ended 30 June

 

2020

2019

2020

2019

2018

(unaudited)

 

 

ARR ($000) .....................................................

281,789(1)

202,882

235,676

169,193

103,030

One-Year Gross ARR Churn (%)...................

8.1%

6.9%

6.9%

8.6%

5.9%

Net ARR Retention Rate (%)...........................

99.7%

100.2%

98.4%

101.4%

100.8%

Average Contract ARR....................................

60,250

62,044

61,088

61,953

62,104

EBIT ($000)

(4,881)

(21,479)

(24,903)

(36,205)

(40,613)

Adjusted EBIT ($000).....................................

7,451

(16,614)

(14,614)

(28,908)

(37,311)

EBITDA ($000)...............................................

14,268

(6,803)

8,022

(12,229)

(26,667)

Adjusted EBITDA ($000)...............................

20,797

(6,175)

8,919

(11,251)

(27,019)

Number of Customers......................................

4,677

3,270

3,858

2,731

1,659

RPO ($000).....................................................

612,313

455,701

539,929

382,573

232,954

(1) At the exchange rate on 31 December 2020, the actual ARR expressed in US Dollar terms was $4.1 million higher than as presented in constant currency above.

Each of these measures is described more fully below.

ARR :

The Group's ARR is a non-IFRS financial measure that the Group defines as the sum of all ARR for its customers as of the measurement date. The ARR for each customer is the annual committed subscription value of each order booked for which it will be entitled to recognise revenue, assuming the customer continues to renew all contracted subscriptions. For example, a contract for $3.0 million with a contractual term of three years would have ARR of $1.0 million, as long as the customer remains contractually committed. In the small number of cases where a customer has an opt-out within six months of entering a contract, the Group does not recognise ARR on that contract until after that opt-out period has passed.

The distribution of ARR by the size of contract ARR for the referenced periods is as follows:

 

Six Months ended 31 December

Financial Year ended 30 June

 

2020

2019

2020

2019

2018

Less than $100,000...................................................

53.1%

53.5%

53.2%

53.3%

53.5%

Greater than $100,000 ...............................................

46.9%

46.5%

46.8%

46.7%

46.5%

 

Net ARR Added :

Net ARR added is a non-IFRS measure defined as new customer ARR added in a period, plus the net impact of upsell, down-sell, and churn activity in the existing customer base in that period.

For net ARR added, the relationship to hiring, productive salesforce growth, POV delivery, and conversion rate is influenced by seasonality factors. Generally, the financial quarter with the highest ARR added is  the quarter ending 31 December, followed closely by the quarter ended 30 June. For the last two financial years, these two quarters have produced approximately 58% of the year's net ARR added. The financial quarter ending in September is usually the lowest, reflecting the impact of slower summer sales months in the Group's largest markets.

One-Year Gross ARR Churn Rate :

One-year gross ARR churn rate is a non-IFRS financial measure that the Group defines as the ARR value of customers lost from the existing customer cohort one year prior to the measurement date, divided by the total ARR value of that existing customer cohort. This churn rate reflects only customer losses and does not reflect customer expansions or contractions.

Net ARR Retention Rate :

Net ARR retention rate is a non-IFRS financial measure defined as the current ARR value for all customers that were customers one year prior to the measurement date, divided by their ARR one year prior to the measurement date. This retention rate does reflect customer losses, expansions, and contractions.

Average Contract ARR :

Average contract ARR is a non-IFRS financial measure that is defined as the total ARR at the measurement date, divided by the number of customers at that measurement date.

EBIT:

EBIT is a non-IFRS measure defined as the Group's operating profit or loss.

Adjusted EBIT:

Adjusted EBIT is a non-IFRS financial measure defined as the is the Group's EBIT plus share-based payment charges, plus certain share option-related employer tax charges. For a reconciliation of Adjusted EBIT to operating loss, the most directly comparable financial measure calculated in accordance with IFRS, see Non-IFRS financial information.

EBITDA:

EBITDA is a non-IFRS financial measure defined as the Group's EBIT plus depreciation and amortisation. For a reconciliation of EBITDA to operating loss, the most directly comparable financial measure calculated in accordance with IFRS, see Non-IFRS financial information.

Adjusted EBITDA:

Adjusted EBITDA is a non-IFRS financial measure defined as the Group's EBITDA minus appliance depreciation attributed to cost of sales, plus share-based payment charges, plus share option-related employer tax charges. For a reconciliation of Adjusted EBITDA to operating loss, the most directly comparable financial measure calculated in accordance with IFRS, see Non-IFRS financial information.

Number of Customers :

Number of Customers is an operating metric defined as the count of the contracting entities that are generating ARR at the measurement date. The distribution of customers above and below $100,000 in ARR has remained  consistent as the Company has grown. The distribution of customers by the size of contract ARR for the referenced periods is as follows:

 

Six Months ended 31 December

Financial Year ended 30 June

 

2020

2019

2020

2019

2018

Less than $100,000...................................................

86.1%

86.4%

86.1%

86.4%

86.3%

Greater than $100,000 ...............................................

13.9%

13.6%

13.9%

13.6%

13.8%

 

RPO :

RPO is a non-IFRS financial measure that represents committed revenue backlog. RPO is calculated by summing all committed customer contract ARR values that have not yet been recognised as revenue, valued at the exchange rates on the last day of the reporting period. Actual revenue recognised may differ, primarily because of the application of actual exchange rates at the dates of revenue recognition.

 

 

Six months ended
31 December

Financial Year ended 30 June

 

2020

2019

2020

2019

2018

 

(unaudited, in $ thousands)

Due within 12 months........................................................

263,724

  188,895

  225,782

  157,256

  96,936

Due within 1-2 years..........................................................

183,592

142,256

162,455

120,250

72,033

Due within 2-3 years..........................................................

  109,085

  80,816

  95,645

  69,704

  41,901

Due within 3-4 years..........................................................

  45,841

  31,746

  41,846

  25,787

  15,537

Due over 4 years................................................................

  10,071

  11,989

  14,221

  9,576

  6,547

Total..................................................................................

  612,313

  455,702

  539,949

  382,573

  232,954

             

 

The Group's increasing RPO, driven by new customer acquisition under long-term contracts, creates significant revenue visibility. Over time, the percent of annual revenue in RPO at the start of each year has increased, reaching 79% for fiscal 2020.

Consolidated statement of comprehensive income

 

For the 6 months ended

For the year ended

 

31 Dec 2020

31 Dec 2019

(Unaudited)

30 June 2020

30 June 2019

30 June 2018

 

$'000

$'000

$'000

$'000

$'000

Revenue.................................................................................................................................................

126,514

91,076

199,076

137,017

79,415

Cost of sales..........................................................................................................................................

(12,399)

(7,010)

(17,477)

(12,252)

(8,225)

Gross profit ..........................................................................................................................................

114,115

84,066

181,599

124,765

71,190

 

 

 

 

 

 

Sales and marketing costs......................................................................................................................

(86,738)

(86,338)

(163,052)

(130,532)

(91,117)

Administrative expenses........................................................................................................................

 

 

 

 

 

Research and development costs.......................................................................................................

(10,657)

(5,574)

(12,030)

(9,715)

(7,512)

Other administrative expenses..........................................................................................................

(21,500)

(13,954)

(26,887)

(20,247)

(12,587)

Credit loss charge.............................................................................................................................

(423)

(103)

(5,344)

(1,326)

(587)

Other operating income.........................................................................................................................

322

424

811

850

-

Operating loss ......................................................................................................................................

(4,881)

(21,479)

(24,903)

(36,205)

(40,613)

 

 

 

 

 

 

Finance costs.........................................................................................................................................

(43,044)

(1,164)

(2,405)

(2,224)

(1,262)

Finance income......................................................................................................................................

59

453

382

937

250

Loss before taxation ............................................................................................................................

(47,866)

(22,190)

(26,926)

(37,492)

(41,625)

 

 

 

 

 

 

Taxation.................................................................................................................................................

(545)

(580)

(1,746)

2,800

(869)

 

 

 

 

 

 

Net loss .................................................................................................................................................

(48,411)

(22,770)

(28,672)

(34,692)

(42,494)

 

 

 

 

 

 

Other comprehensive (loss)/ income ..................................................................................................

 

 

 

 

 

Items that are or may be reclassified subsequently to profit or loss:

 

 

 

 

 

Foreign exchange difference arising on presentational currency change................................................

-

-

-

(1,708)

1,315

 

 

 

 

 

 

Total comprehensive loss ....................................................................................................................

(48,411)

(22,770)

(28,672)

(36,400)

(42,179)

 

 

 

 

 

 

Earnings per share ..............................................................................................................................

 

 

 

 

 

Basic (loss)/earnings per share ...........................................................................................................

$(24.69)

$(11.10)

$(13.49)

$(16.89)

$(19.32)

Diluted (loss)/earnings per share .......................................................................................................

$(24.69)

$(11.10)

$(13.49)

$(16.89)

$(19.32)

             

 

All of the results for the periods presented are attributable to equity holders of Darktrace Holdings Limited.

Consolidated statement of financial position

 

31 Dec 2020

31 Dec 2019

(Unaudited)

30 June 2020

30 June 2019

30 June 2018

 

$'000

$'000

$'000

$'000

$'000

Non-current assets

 

 

 

 

 

Intangible assets....................................................................................................................................

8,563

5,734

 

6,049

 

4,690

 

3,139

Property, plant and equipment...............................................................................................................

48,322

48,180

 

49,462

 

42,882

 

30,066

Right of use ("RoU") assets..................................................................................................................

32,530

25,150

 

31,411

 

27,353

 

15,205

Capitalised commission

16,256

11,738

14,659

9,438

5,225

Deposits................................................................................................................................................

5,154

5,286

4,895

5,040

3,726

 

110,825

96,088

106,476

89,403

57,361

Current assets

 

 

 

 

 

Trade and other receivables...................................................................................................................

69,005

52,261

 

60,363

 

39,867

 

38,097

Capitalised commission.........................................................................................................................

12,302

9,237

 

10,890

 

7,915

 

4,497

Tax receivable.......................................................................................................................................

1,292

1,221

 

1,267

 

4,845

-

Cash and cash equivalents.....................................................................................................................

103,912

46,568

 

53,944

 

64,443

 

29,178

 

186,511

109,287

126,464

117,070

71,772

 

 

 

 

 

 

Total assets ..........................................................................................................................................

297,336

205,375

232,940

206,473

129,133

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

Deferred revenue

(108,736)

(81,615)

(96,769)

(72,552)

(42,881)

Lease liabilities......................................................................................................................................

(5,233)

(5,347)

 

(4,903)

 

(4,438)

 

(2,197)

Tax payable...........................................................................................................................................

-

-

 

(508)

 

(257)

 

(378)

Trade and other payables.......................................................................................................................

(59,797)

(45,030)

 

(50,482)

 

(37,635)

 

(25,516)

Non-current liabilities

(173,766)

(131,992)

(152,662)

(114,882)

(70,972)

Deferred revenue...................................................................................................................................

(30,216)

(24,629)

 

(25,779)

 

(22,702)

 

(21,582)

Lease liabilities......................................................................................................................................

(33,478)

(24,457)

 

(30,643)

 

(26,857)

 

(14,995)

Convertible loan, host contract..............................................................................................................

(98,577)

-

-

-

-

Convertible loan, embedded derivative..................................................................................................

(106,895)

-

-

-

-

 

(269,166)

(49,086)

(56,422)

(49,559)

(36,577)

Total liabilities .....................................................................................................................................

(442,932)

(181,078)

(209,084)

(164,441)

(107,549)

 

 

 

 

 

 

Net (liabilities) / assets ........................................................................................................................

(145,596)

24,297

 

23,856

 

42,032

 

21,584

 

Equity

 

 

 

 

 

Share capital..........................................................................................................................................

27

27

29

33

31

Share premium......................................................................................................................................

43,553

170,367

170,402

181,621

131,533

Capital contribution...............................................................................................................................

-

-

-

-

-

Stock compensation reserve..................................................................................................................

26,678

15,444

20,868

10,828

4,070

Foreign currency translation reserve.....................................................................................................

(4,398)

(4,398)

(4,398)

(4,398)

(2,690)

Retained earnings..................................................................................................................................

(211,456)

(157,143)

(163,045)

(146,052)

(111,360)

Total equity.........................................................................................................................................

(145,596)

24,297

23,856

42,032

21,584

 

Consolidated statement of changes in equity

 

Share capital

Share premium

Foreign currency translation reserve

Capital contribution

Stock Compensation

Reserve

Retained earnings

Total equity

 

$'000

$'000

$'000

$'000

$'000

$'000

$'000

Balance at 30 June 2019..........................................................................................................

33

181,621

(4,398)

-

10,828

(146,052)

42,032

Effect of change in functional currency.....................................................................................

(6)

(11,357)

 

-

(316)

11,679

-

Balance at 1 July 2019 ...........................................................................................................

27

170,264

(4,398)

-

10,512

(134,373)

42,032

Net loss ....................................................................................................................................

-

-

-

-

-

(22,770)

(22,770)

Other comprehensive (loss)/income .........................................................................................

 -

 -

 -

 -

 -

-

Total comprehensive loss ........................................................................................................

-

-

-

-

-

(22,770)

(22,770)

Shares issued............................................................................................................................

-

103

-

-

-

-

103

Credit to equity for share based compensation charge...............................................................

-

-

-

-

4,932

-

4,932

Transactions with shareholders ..............................................................................................

-

103

-

-

4,932

-

5,035

Balance at 31 December 2019, unaudited...............................................................................

27

170,367

(4,398)

-

15,444

(157,143)

24,297

Balance at 1 July 2020............................................................................................................

29

170,402

(4,398)

-

20,868

(163,045)

23,856

Total comprehensive loss:

 

 

 

 

 

 

-

Net loss.....................................................................................................................................

-

-

-

-

-

(48,411)

(48,411)

Other comprehensive (loss)/income .........................................................................................

-

 -

 -

 -

 -

-

Total comprehensive loss ........................................................................................................

-

-

-

-

-

(48,411)

(48,411)

Shares issued............................................................................................................................

  - 

  212

-

-

-

-

  212

Share repurchase and cancellation.............................................................................................

  (2)

  (127,061)

-

-

-

-

  (127,063)

Credit to equity for share based compensation charge...............................................................

-

-

-

-

  5,810

-

  5,810

Transactions with shareholders...............................................................................................

(2)

(126,849)

-

-

5,810

-

(121,041)

Balance at 31 December 2020.................................................................................................

27

43,553

(4,398)

-

26,678

(211,456)

(145,596)

 

 

 

 

 

 

Share capital

Share premium

Foreign currency translation reserve

Capital contribution

Stock Compensation

Reserve

Retained earnings

Total equity

 

$'000

$'000

$'000

$'000

$'000

$'000

$'000

Balance at 1 July 2017

30

81,783

(4,005)

2,954

1,784

(71,820)

10,726

Total comprehensive loss:

 

 

 

 

 

 

 

Net Loss

-

-

-

-

-

(42,494)

(42,494)

Other comprehensive loss:
Foreign exchange difference arising on translation to presentation currency

-

-

1,315

-

-

-

1,315

Total comprehensive loss

-

-

1,315

-

-

(42,494)

(41,179)

Reserves transfer

-

-

-

(2,954)

-

2,954

-

Shares issued

1

49,750

-

-

-

-

49,751

Credit to equity for share based compensation charge

-

-

-

-

2,286

-

2,286

Transactions with shareholders

1

49,750

-

(2,954)

2,286

2,954

52,037

Balance at 30 June 2018

31

131,533

(2,690)

-

4,070

(111,360)

21,584

Total comprehensive loss:

 

 

 

 

 

 

 

Net Loss

-

-

-

-

-

(34,692)

(34,692)

Other comprehensive loss:
Foreign exchange difference arising on translation to presentation currency

-

-

(1,708)

-

-

-

(1,708)

Total comprehensive loss

-

-

(1,708)

-

 

(34,692)

(36,400)

Shares issued

2

50,088

-

-

-

-

50,090

Credit to equity for share based compensation charge

-

-

-

-

6,758

-

6,758

Transactions with shareholders

2

50,088

-

-

6,758

-

56,848

Balance at 30 June 2019

33

181,621

(4,398)

-

10,828

(146,052)

42,032

Effect of change in functional currency

(6)

(11,357)

 

-

(316)

11,679

-

Balance at 1 July 2019

27

170,264

(4,398)

-

10,512

(134,373)

42,032

 

 

 

 

 

 

 

 

Total comprehensive loss:

 

 

 

 

 

 

 

Net Loss

-

-

-

-

-

(28,672)

(28,672)

Other comprehensive loss

-

-

-

-

-

-

-

Total comprehensive loss

-

-

-

-

-

(28,672)

(28,672)

Shares issued

2

138

-

-

-

-

140

Credit to equity for share based compensation charge

-

-

-

-

10,356

-

10,356

Transactions with shareholders

2

138

-

-

10,356

-

10,496

Balance at 30 June 2020

29

170,402

(4,398)

-

20,868

(163,045)

23,856

 

Consolidated statement of cash flows

 

For 6 months ended

For the year ended

 

31 Dec 2020

31 Dec 2019

(Unaudited)

30 June 2020

30 June 2019

30 June 2018

 

$'000

$'000

$'000

$'000

$'000

Cash generated from operations

 

 

 

 

 

Loss for the period................................................................................................................................

(48,411)

(22,770)

(28,672)

(34,692)

(42,494)

Adjustments for:

 

 

 

 

 

Depreciation of property, plant and equipment ("PPE") and RoU asset................................................

11,795

9,599

21,055

15,993

9,367

Amortisation of intangible assets..........................................................................................................

949

276

1,429

890

875

Amortisation of capitalised commission ...............................................................................................

6,405

4,801

10,441

7,092

3,703

Impairment loss on PPE........................................................................................................................

90

-

-

-

-

Loss/(Profit) on disposal of PPE..........................................................................................................

244

71

376

681

94

Foreign exchange differences................................................................................................................

(1,176)

152

(148)

(2,665)

572

Credit loss charge..................................................................................................................................

423

103

5,344

1,326

587

Share based compensation charge.........................................................................................................

5,810

4,932

10,356

6,758

2,285

Finance costs.........................................................................................................................................

1,382

1,164

2,405

2,224

1,262

Charge for convertible loan (host contract)...........................................................................................

14,302

-

-

-

-

Charge for convertible loan (embedded derivative)...............................................................................

27,360

-

-

-

-

Finance income.....................................................................................................................................

(59)

(453)

(382)

(937)

(250)

Other operating income.........................................................................................................................

(322)

(424)

(811)

(850)

-

Taxation................................................................................................................................................

545

580

1,746

(2,800)

869

Operating cash flows before movements in working capital..........................................................

19,337

(1,969)

23,139

(6,980)

(23,130)

Increase in trade and other receivables..................................................................................................

(7,248)

(12,245)

(25,641)

(5,678)

(27,304)

Increase in capitalised commission........................................................................................................

(9,414)

(8,850)

(19,064)

(14,915)

(9,224)

Increase in trade and other payables......................................................................................................

6,960

5,526

10,758

13,302

11,289

Increase in deferred revenue..................................................................................................................

16,404

10,990

27,294

34,455

32,331

Net cash flows from operating activities before tax.........................................................................

26,039

(6,548)

16,486

20,184

(16,038)

Tax received/(paid)................................................................................................................................

(756)

3,211

2,894

(1,429)

(647)

Net cash flow from operating activities.............................................................................................

25,283

(3,337)

19,380

18,755

(16,685)

Cash flows from investing activities

 

 

 

 

 

Development costs capitalised...............................................................................................................

(2,473)

(1,320)

(2,788)

(2,621)

(1,945)

Purchase of property, plant and equipment...........................................................................................

(6,137)

(10,523)

(20,389)

(25,106)

(16,476)

Finance income.....................................................................................................................................

59

453

382

937

250

Net cash flow from investing activities..............................................................................................

(8,551)

(11,390)

(22,795)

(26,790)

(18,171)

Financing activities

 

 

 

 

 

Proceeds from share issues...................................................................................................................

212

103

140

50,090

49,750

Repurchase of shares............................................................................................................................

(127,063)

-

-

-

-

Proceeds from convertible loan/borrowings..........................................................................................

162,821

-

-

-

-

Repayment to shareholder (net).............................................................................................................

-

-

-

(1,411)

(3,788)

Repayment of lease liabilities................................................................................................................

(2,642)

(2,085)

(4,519)

(2,947)

(1,288)

Payment of interest on lease liabilities...................................................................................................

(1,382)

(1,164)

(2,405)

(2,224)

(1,262)

Net cash flow from financing activities.............................................................................................

31,946

(3,146)

(6,784)

43,508

43,412

Net increase/(decrease) in cash and cash equivalents............................................................................

48,678

(17,873)

(10,199)

35,473

8,556

Cash and cash equivalents at the beginning of period...........................................................................

53,944

64,443

64,443

29,178

19,623

Exchange difference on cash held (net).................................................................................................

1,290

(2)

(300)

(208)

999

Cash and cash equivalents at the end of period..............................................................................

103,912

46,568

53,944

64,443

29,178

 

Board Information

Gordon Hurst

Mr. Hurst joined the Group on 28 July 2019 as a Director of Darktrace Holdings Limited, and was appointed to the Board of the Company on 1 April 2021. Mr. Hurst has 27 years' experience with Capita plc (LON: CPI), a leading consulting, digital services and software business company, from 1988 until February 2015, including having served as the Group Finance Director on its board since 1996. During this period, Mr. Hurst was instrumental in managing acquisitions, large outsourcing deals, and building a team of commercially-focused finance directors to enable continued development of the business. Since then, Mr. Hurst has also served as non-executive chair of the board of Featurespace since November 2014. Currently, Mr. Hurst serves as the non-executive chair of the PE funded services business, Marston Holdings, and Azets Ltd.

 

Poppy Gustafsson OBE

Ms. Gustafsson joined the Group as an employee with effect from November 2014, was appointed as a Director of Darktrace Holdings Limited on 11 May 2020, and was appointed to the Board of the Company on 1 April 2021 and has served as the CEO of the Group since 2016. Under her leadership, the Group has grown to 1,500 employees with over 40 offices around the world. Ms. Gustafsson has led the Group to achieve a variety of accolades, such as being named the 9th 'Fastest Growing European Company' by The Financial Times, as well as 'Fastest Growing Super Scale-up' by Tech Tour. Ms. Gustafsson is a qualified chartered accountant and previously served as the company's CFO. She was the winner of the 'Veuve Clicquot Business Woman Awards 2019,' and recognised in Management Today's '35 Women Under 35' list in 2018. Ms. Gustafsson was awarded an OBE (Officer of the Order of the British Empire) in 2019 in recognition of her services to cyber security.

Catherine Graham

Ms. Graham joined the Group as an employee in February 2020, was appointed to the Board of the Company at incorporation of the Company and is the Company's Chief Financial Officer. Ms. Graham has more than two decades of professional experience in financial disciplines and has served at the helm of several businesses throughout periods of rapid growth and capital structure evolution. Previously at 2U, a global leader in education technology, Ms. Graham has extensive experience in developing and maturing hyper-growth technology companies. In 2015, she was named as Northern Virginia Technology Council's 'Public Company CFO of the Year' and has most recently been included in the Washington Business Journal's 2018 list of 'Women Who Mean Business.' Ms. Graham holds an MBA from Loyola University Maryland and a BA in Economics from the University of Maryland. 

 

Vanessa Colomar

 

Ms. Colomar joined the Group on 14 July 2015 as a Director of Darktrace Holdings Limited, and was appointed to the Board of the Company on 1 April 2021. Ms. Colomar has 24 years' experience in public relations and communications, having held senior positions at agency Edelman and Burston Marsteller in Madrid and New York. Previously, she has also served as SVP of Communications at Autonomy where she joined immediately prior to the HP acquisition in August 2011 and worked through May 2012. Ms. Colomar is a Partner and Co-Founder of Invoke Capital. At Invoke, Ms. Colomar is responsible for Communications and Investor Relations and oversees these functions for portfolio companies including Luminance. Ms. Colomar is also a member of the Board of Directors for Luminance, a leading AI platform for the legal industry and an Invoke portfolio company. Ms. Colomar holds a First-Class BA in Modern European Languages from Durham University, and an MA in Journalism from Universidad Autónoma de Madrid. 

 

Stephen Shanley

 

Mr. Shanley joined the Group on 15 July 2016 as a Director of Darktrace Holdings Limited, and was appointed to the Board of the Company on 1 April 2021. Mr. Shanley has worked at KKR since 2014 and currently serves as a Managing Director at KKR and as head of KKR's Technology Growth Equity business in Europe. Mr. Shanley serves or has served on the board of directors of several technology companies, including ReliaQuest, LLC, Zwift Inc., KnowBe4, Inc., OutSystems Holdings S.A., iValua S.A.S., GetYourGuide AG and Clicktale (UK) Limited. Prior to joining KKR, Mr. Shanley was an investor with Technology Crossover Ventures, a technology focused growth equity firm. Prior to that, Mr. Shanley was with the TMT investment banking group of Needham & Company, LLC. He started his career in the transaction services group of KPMG US LLP. Mr. Shanley holds a B.S. and a B.Sc. from Santa Clara University.

Johannes Sikkens

Mr. Sikkens joined the Group on 14 July 2015 as a Director of Darktrace Holdings Limited, and was appointed to the Board of the Company on 1 April 2021. Mr. Sikkens serves as Managing Director and Head of Europe at Summit Partners, a global alternative investment firm with more than $23 billion in assets under management. Mr. Sikkens joined Summit Partners in 2004 and today manages the firm's London office. Mr. Sikkens focuses primarily on investments in the technology sector in Europe. In addition to the Company, Mr. Sikkens currently serves as a director at MUBI, Red Points and Syncron, and he is actively involved in Summit's investments in Akeneo, Ivalua, LearnUpon, Odoo and Solactive. His previous board and investment experience includes 360T Group, Acturis Limited, Avast (LON: AVST), Flow Traders (Euronext: FLOW), Multifonds , RELEX Solutions, SafeBoot, Siteimprove  and Welltec International. Prior to Summit, Mr. Sikkens worked for Scotia Capital and IBM Corporation. Mr. Sikkens holds a BS in business administration from the University of Groningen, an MSc in international business from the University of Groningen, and an MSc in international finance from the CERAM Graduate School of Management & Technology.

Lord Willetts

Lord Willetts was appointed to the Board of the Company on 1 April 2021. Lord Willetts began his career in Parliament as the MP for Havant in 1992 and was appointed Minister for Universities and Science in May 2010. Lord Willetts has previously served as Paymaster General and then in the Shadow Cabinet in a range of roles, including Shadow Secretary of State for Trade and Industry, Shadow Secretary for Education and Skills, and Shadow Secretary for Innovation, Universities and Skills. Lord Willetts has also worked at HM Treasury and in the Number 10 Policy Unit. In addition, Lord Willetts was a visiting fellow at Nuffield College, Oxford, is a governor of the Ditchley Foundation and a member of the Council of the Institute for Fiscal Studies. He has written widely on economic and social policy. In 2011 he published a book, 'The Pinch: How the baby boomers took their children's future - and why they should give it back'. Lord Willetts was educated at King Edward's School, Birmingham and Christ Church, Oxford, where he studied philosophy, politics and economics.  

Paul Harrison

Mr. Harrison was appointed to the Board of the Company on 1 April 2021. Mr. Harrison is a chartered accountant with over 35 years business experience. Previously, Mr Harrison has served as the CFO of Just Eat PLC, a FTSE 100 on-line food marketplace business and as interim CEO from April to September 2017. Prior to Just Eat, Mr. Harrison served as CFO of WANdisco plc in California and as Group CFO of one of the largest UK (& FTSE 100) software businesses, The Sage Group plc for 13 years. In addition, Mr. Harrison served from 2007 to 2017 as a Non-Executive Director and, in the last 5 years of his appointment, Senior Independent Director of FTSE 250 recruiter, Hays plc. During this time, Mr. Harrison initially chaired the Audit Committee switching mid way through his appointment to chairing the Remuneration Committee. In February 2016, Mr. Harrison also joined the Board of the newly listed Ascential plc, a FTSE 250 business where he served as chair of the Audit Committee until January 2021. At that time, he assumed the role of Executive Director and Chief Operating Officer of Ascential plc. Mr. Harrison has formerly also served as Governor of Royal Grammar School, Newcastle a large, independent school based in Newcastle upon Tyne.  

Sir Peter Bonfield CBE

 

Sir Peter was appointed to the Board of the Company on 1 April 2021. Sir Peter has previously served as the CEO and Chairman of the Executive Committee of British Telecommunications from 1996, when he was appointed, until early 2002. Sir Peter is currently serving as Chairman of NXP Semiconductors in the Netherlands. Sir Peter has previously served as Chairman and Managing Director of ICL after its merger with STC, a large telecommunications equipment manufacturer, Deputy Chief Executive of STC plc as well as Chairman and CEO of ICL. Sir Peter's career has also included Chair of Council and Senior Pro Chancellor for Loughborough University, Chairman of GlobalLogic, Vice-Presidency of the British Quality Foundation, Senior Independent Directorship of AstraZeneca, Non-Executive Director Dubai International Capital LLC, Actis Capital LLP, Member of the Citigroup International Advisory Board, Advisor to Apax Partners LLP, Senior Advisor to Rothschild, Senior Advisor to G3 Good Governance Group, Senior Advisor The Hampton Group, Chairman of the Board/East West Institute UK, member of Silent Circle's Advisory Board and Directorships on the Boards of Sony Corporation in Japan, Mentor Graphics Corporation in the USA, Ericsson in Sweden, the Department for Constitutional Affairs and the Ministry of Justice. In total, Sir Peter has been a Board Member of 12 quoted companies around the world. Sir Peter has an Honours Degree in Engineering from Loughborough University, is a Liveryman of the Worshipful Company of Information Technologists, a Freeman of The City of London, an Honorary Citizen of Dallas and a Fellow of the Royal Academy of Engineering.  

 

Important legal information

 

The contents of this announcement, which has been prepared by and is the sole responsibility of the Company, has been approved by Jefferies International Limited, solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000 (as amended).

The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed by any person for any purpose on the information contained in this announcement or its accuracy, fairness or completeness.

This announcement is not for publication or distribution, directly or indirectly, in or into Australia, Canada, Japan or the United States (including its territories and possessions, any State of the United States and the District of Columbia) or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction. The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This announcement does not constitute or form a part of any offer or solicitation to purchase or subscribe for, or otherwise invest in, shares to any person in Australia, Canada, Japan or the United States (including its territories and possessions, any State of the United States and the District of Columbia) or in any jurisdiction to whom or in which such offer or solicitation is unlawful. Any shares referred to herein may not be offered or sold in the United States unless registered under the Securities Act except pursuant to a transaction exempt from, or not subject to, the registration requirements of the Securities Act. The possible Offer and sale of Shares referred to herein has not been and will not be registered under the Securities Act or under the applicable securities laws of Australia, Canada or Japan. Subject to certain exceptions, the Shares referred to herein may not be offered or sold in Australia, Canada or Japan or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada or Japan. There will be no public offer of the Shares in Australia, Canada, Japan, the United States or elsewhere.

In the United Kingdom, this announcement is being distributed only to, and is directed only at, persons who: (A) (i) are "investment professionals" specified in Article 19(5) of the Financial Services and Markets Act (Financial Promotion) Order 2005 (the "Order") and/or (ii) fall within Article 49(2)(a) to (d) of the Order (and only where the conditions contained in those Articles have been, or will at the relevant time be, satisfied); and (B) are "qualified investors" within the meaning of Article 2 of the Prospectus Regulation (Regulation (EU) 2017/1129) as it forms part of UK law by virtue of the EU (Withdrawal) Act 2018 (all such persons together being referred to as "Relevant Persons"). In the European Economic Area (the "EEA"), this announcement is addressed only to and directed only at, persons in member states who are "qualified investors" within the meaning of Article 2(e) of the Prospectus Regulation (Regulation ((EU) 2017/1129) ("Qualified Investors"). This announcement must not be acted on or relied on (i) in the United Kingdom, by persons who are not Relevant Persons, and (ii) in any member state of the EEA, by persons who are not Qualified Investors. Any investment or investment activity to which this announcement relates is available only to: (i) in the United Kingdom, Relevant Persons; and (ii) in any member state of the EEA, Qualified Investors, and will be engaged in only with such persons.

This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These statements reflect beliefs of the Directors (including based on their expectations arising from pursuit of the Group's strategy) as well as assumptions made by the Directors and information currently available to the Group. Although the Directors consider that these beliefs and assumptions are reasonable, by their nature, forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause the Group's actual financial condition, results of operations, cash flows, liquidity or prospects to be materially different from any future such metric expressed or implied by such statements. Past performance cannot be relied upon as a guide to future performance and should not be taken as a representation that trends or activities underlying past performance will continue in the future. Forward-looking statements speak only as of the date they are made. No representation is made or will be made that any forward-looking statements will come to pass or prove to be correct.

Each of the Company, Jefferies International Limited, Joh. Berenberg, Gossler & Co. KG, London Branch, KKR Capital Markets Partners LLP, Needham & Company, LLC and Piper Sandler & Co and their respective affiliates as defined under Rule 501(b) of Regulation D under the Securities Act ("affiliates"), expressly disclaims any obligation or undertaking to update, review or revise any forward-looking statement contained in this announcement whether as a result of new information, future developments or otherwise.

Any subscription or purchase of Shares in the possible Offer should be made solely on the basis of information contained in the Prospectus which may be issued by the Company in connection with the possible Offer. The information in this announcement is subject to change. Before subscribing for or purchasing any Shares, persons viewing this announcement should ensure that they fully understand and accept the risks which will be set out in the Prospectus if published. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. Neither this announcement, nor anything contained in the Registration Document referred to herein, shall form the basis of or constitute any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for any Shares or any other securities nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, any contract therefor.

The Company may decide not to go ahead with the IPO and there is therefore no guarantee that Admission will occur. You should not base any financial decision on this announcement. Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested.

Persons considering making investments should consult an authorised person specialising in advising on such investments. Neither this announcement, nor the Registration Document referred to herein, constitutes a recommendation concerning the possible Offer. The value of shares can decrease as well as increase. Potential investors should consult a professional advisor as to the suitability of the possible Offer for the person concerned. Nothing contained herein constitutes or should be construed as (i) investment, tax, financial, accounting or legal advice or a representation that any investment or strategy is suitable or appropriate to your individual circumstances.

Unless otherwise indicated, market, industry and competitive position data are estimates (and accordingly, approximate) and should be treated with caution. Such information has not been audited or independently verified, nor has the Group ascertained the underlying economic assumptions relied upon therein. Certain data in this announcement, including financial, statistical and operating information has been rounded. As a result, the totals of data presented in this announcement may vary slightly from the actual arithmetic totals of such data. Percentages may have been rounded and accordingly may not add up to 100%.

For the avoidance of doubt, the contents of the Company's website are not incorporated by reference into, and does not form part of, this announcement.

None of Jefferies International Limited, Joh. Berenberg, Gossler & Co. KG, London Branch, KKR Capital Markets Partners LLP, Needham & Company, LLC and Piper Sandler & Co or any of their respective affiliates or any of their or their affiliates' directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for/or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of the announcement or its contents or otherwise arising in connection therewith.

Each of Jefferies International Limited, Joh. Berenberg, Gossler & Co. KG, London Branch, KKR Capital Markets Partners LLP, Needham & Company, LLC and Piper Sandler & Co is acting exclusively for the Company and no one else in connection with the possible Offer. They will not regard any other person as their respective clients in relation to the possible Offer and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients, nor for providing advice in relation to the possible Offer, the contents of this announcement or any transaction, arrangement or other matter referred to herein.

In connection with the withdrawal of the United Kingdom from the European Union, Jefferies International Limited, Joh. Berenberg, Gossler & Co. KG, London Branch, KKR Capital Markets Partners LLP, Needham & Company, LLC and Piper Sandler & Co may, at their discretion, undertake their obligations in connection with the potential IPO by any of their affiliates based in the European Economic Area.

Each of Jefferies International Limited and KKR Capital Markets Partners LLP is authorised by the Prudential Regulation Authority and regulated by the Prudential Regulation Authority and the Financial Conduct Authority in the United Kingdom. Joh. Berenberg, Gossler & Co. KG, London Branch is authorised and regulated by the German Federal Financial Supervisory Authority and is deemed authorised under the Temporary Permissions Regime and subject to limited regulation by the FCA in the United Kingdom. Each of Needham & Company, LLC and Piper Sandler & Co. is authorised and regulated by the US Securities and Exchange Commission and the Financial Industry Regulatory Authority.

 

 

 

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