REG - 4GLOBAL PLC - Interim Results
12/12/2024 07:00
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RNS Number : 7694P 4GLOBAL PLC 12 December 2024
12 December 2024
4GLOBAL plc
("4GLOBAL" or "the Company")
Interim Results
Increase in gross profit driven by early success in North America and
transition to higher margin products
4GLOBAL, a provider of data and technology for sports, fitness and wellness
organisations to optimise operational and investment decisions, announces its
interim results for the six months ended 30 September 2024.
Financial Results:
HY 25 HY 24 Change
Revenue £1.70m £1.75m -3%
Gross profit £1.25m £1.05m +9%
Gross profit margin 73% 60% +13pp
Adj. EBITDA(1) (£0.51m) (£0.60m) +15%
Cash £0.29m £0.27m +8%
· Core UK revenue up 6% to £0.8m.
· International revenue flat YoY at £0.9m.
o North American revenue up 161%, reflecting increased focus on this key growth
market.
o Middle East revenue down 61%, aligned with more selective new business
strategy in the region.
· ARRR(2) flat YoY at £1.0m, representing 61% of total revenue (HY 24: 59%).
· Higher quality revenue from ongoing diversification of customer base.
· Adjusted EBITDA increase supported by early success in shift towards higher
margin Insight Solutions and Insight Platform products.
· Further payments relating to the significant debtor position in the Middle
East were received during H1, however the payment plan is currently behind
schedule. An additional provision to that made in FY 24 will be considered in
H2 if payments are not received as expected.
Strategic Highlights:
· Network of strategic partners continued to drive early success in the North
America transition, with two new US partnerships signed post-period to achieve
comprehensive market coverage.
· Significant progress made in streamlining and standardising the Company's
offering, enhancing consistency and sales effectiveness.
· Artificial Intelligence and Machine Learning functionality embedded across
products, driving usage and supporting increases in customer lifetime value.
Current Trading & Outlook:
· Strong sales pipeline underpins confidence in meeting full year market
expectations(3), while mindful of macroeconomic challenges and the potential
for elongated sales cycles.
· As has historically been the case, the Company expects a H2 weighting to its
financial performance and for cash to increase during the period.
· Shift in focus to the North American market to continue into H2 as we further
develop relationships and gain traction in the region.
Eloy Mazon, 4GLOBAL CEO, said:
"The key achievement in H1 was the strong start we made in shifting our focus
to North America, the region where we see the most profitable long-term
opportunities. The potential for growth in the US is substantial, offering a
compelling combination of high data maturity and low penetration of solutions
like ours. Working closely with our partners there, we are building commercial
momentum while increasing awareness of 4GLOBAL, laying the groundwork for
further expansion in this key market.
"More broadly, we continue to build on the progress made in prior years,
delivering on our strategic objectives to achieve scalable growth, operational
efficiency, and resilience in a dynamic market. The demand across our target
markets for actionable data and insights to make better business decisions is
growing at pace. With a powerful offering, outstanding references and a clear
strategy, we are well positioned to capitalise and look to the future with
confidence."
(1)Adj. EBITDA is Adjusted EBITDA, defined as statutory profit from
operations before interest, taxation, depreciation, share based payment
expense, foreign exchange losses and exceptional items.
(2)ARRR is annual recurring and repeatable revenue. Recurring revenue is
revenue generated from subscriptions, licenses or multi-year recurring fee
agreements (typically Insight Solutions and Insight Platforms) and is
calculated on all license agreements. Repeatable revenue is revenue generated
from multiple opportunities from a client which create a predictable,
consistent revenue stream year on year (typically Insight Lab). For the
purposes of qualifying as repeatable revenue the client must have a minimum
history of three years of generating revenue.
(3)Market expectations refer to analyst forecasts for FY 25 of £7.6m in
revenue, £1.9m in adjusted EBITDA and £1m in cash at year-end.
Investor Presentation
Eloy Mazon, Chief Executive Officer, and Stuart Wooller, Group Finance
Director, will host a live investor presentation and Q&A today at 11am via
the Investor Meet Company platform.
The remote session is open to all existing and potential shareholders.
Questions can be submitted at any time during the presentation.
Investors can sign up for free and add to meet 4GLOBAL via:
https://www.investormeetcompany.com/4global-plc/register-investor
(https://www.investormeetcompany.com/4global-plc/register-investor)
Contacts
4GLOBAL via Alma
Eloy Mazon (CEO)
Stuart Wooller (Group Finance Director)
Spark Advisory Partners (Nominated Adviser) +44 (0)20 3368 3554
Neil Baldwin
Canaccord Genuity (Broker) +44 (0)20 7523 8000
Bobbie Hilliam
Alma Strategic Communications +44 (0)20 3405 0205
Rebecca Sanders-Hewett 4global@almastrategic.com (mailto:4global@almastrategic.com)
David Ison
Louisa El-Ahwal
Josh Royston
Will Ellis Hancock
About 4GLOBAL
4GLOBAL empowers sports, fitness and wellness organisations to make faster,
smarter decisions about their operations, customers and investments through
data and actionable insights.
It operates the largest sport participation and facility database in the
world, with more than 4 billion data points.
Sourcing data from health & fitness operators, community programmes and
other structured activities through its DataHub while drawing on information
from GPS location updates and wearable devices, 4GLOBAL's unique combination
of data assets provides a holistic view of physical activity patterns.
4GLOBAL is at the forefront of predictive modelling and advanced analytics,
with the insights it generates empowering customers to drive efficiencies,
improve customer relationships and make more informed strategic decisions.
Its customers span both the public and private sectors, including central and
local governments, cities, sporting bodies, trade associations, health &
fitness operators and sports clubs.
Key markets include North America, the Middle East and Europe. Its
headquarters are in London with offices in Miami and Istanbul.
4GLOBAL was founded in 2002 and listed on AIM in 2021 under the ticker 4GBL.
CEO's Review
The Company has made a solid start to the year, delivering against our
strategic objectives and building on the strong foundations laid to underpin
our long-term growth ambitions. We are beginning to see the rewards of our
transition to focus on North America, and have made good progress in improving
the quality of our revenues and strengthening our financial position.
Improved margins, stable cash and strong H2 revenue weighting expected
Performance remains heavily weighted to the second half of the year due to
budget seasonality in our end markets. Total revenue for H1 at £1.7m was
broadly flat YoY (H1 2024: £1.8m), with the traction in the US offset by
managed declining revenues in the Middle East.
Gross profit increased by 9% to £1.2m (HY2024: £1.0m), supported by an
improved gross profit margin of 73% (H1 2024: 60%). This reflects our
strategic shift away from a reliance on external resources and early successes
in transitioning customers to more profitable Insight Solution and Insight
Platform products.
This, in turn, has supported a 15% improvement in Adjusted EBITDA performance,
with the Company delivering an Adjusted EBITDA loss of £0.5m (H1 2024: loss
of £0.6m) and cash remaining flat at £0.3m (H1 2024: £0.3m). We continue to
manage our cash effectively and I am proud of our sustained ability to invest
across the business to drive growth while maintaining a net cash position. Net
cash is expected to increase during H2.
Building on solid foundations
With each period, the business continues to demonstrate increasing maturity,
commercial focus, and determination. We as a Board are particularly pleased
with the progress made in transitioning our focus to North America while at
the same time future-proofing our proposition and refining our operational
practices. These initiatives are supported by a strengthened commitment to
cultivating a culture of excellence and accountability throughout the
organisation. I would like to thank our team members for embracing the vision
and for their unwavering commitment to overcoming challenges and driving the
business forwards.
North America: Unlocking a potentially transformational growth opportunity
The highlight of the period was undoubtedly growing traction in the North
American market, which we firmly believe represents the greatest opportunity
for 4GLOBAL.
Revenue in North America grew by 161% in the half, which in itself is
pleasing, however growth is still at a nascent stage. More importantly, it
demonstrates strong penetration into two key sectors: sporting bodies and
operators. The region's vast market size, combined with a strong public and
private sector focus on increasing participation and optimising investment,
makes our data-driven solutions highly relevant.
In September we announced a significant expansion of our agreement with U.S.
Soccer. Having completed an initial Insight Labs project covering a single
state earlier in the year, we subsequently agreed an Insight Solutions project
to provide the organisation with the necessary insights to inform investment
and legacy planning for grassroots development of the sport nationwide.
As well as being a key win in its own right, our progress with U.S. Soccer is
an excellent reference in a country where there is a large number of fully
funded sporting bodies whose primary investment criteria is to drive increased
participation and where the mentality and therefore sales cycle is more
reminiscent of the private sector. The model is highly replicable and our
solutions are ideally placed to help these organisations optimise their
investments to drive sustainable, long-term growth across any sport.
Strengthening our presence through expanding strategic partnerships
We were delighted to add strategic sale channel partnerships with Daxko LLC
and Xplor post-period-end. Partnerships are a key aspect of our growth
strategy within the North American operator market as they grant us access to
many potential customers for little cost and minimal risk.
Our solutions tackle the key challenges faced by operators in the region,
providing accurate, reliable, and accessible data to better understand
customer behaviour and inform business decisions that drive retention,
satisfaction, and lifetime value.
According to the USA Health and Fitness Association, the operator market is
projected to grow 14% annually until 2030 and spend on technology is expected
to double in the same timeframe. With a growing emphasis on data, a standout
product offering and the support of our partners, we are ideally placed to
benefit.
The more experience we gain in North America and the better we understand the
different dynamics at play, the greater the potential we believe the region
represents. As we build our presence and grow the reputation of our data and
insight there, new opportunities are emerging across both our existing
verticals and new applications.
Strategic shift to enhance revenue quality in the Middle East
The Middle East remains an important and lucrative market for us. In response
to debtor recoverability issues in the region, we made the decision to operate
with a stricter commercial mandate, only engaging in contracts with favourable
payment terms. This has led to direct engagement with customers rather than
operating mainly as a subcontractor, providing us with greater economic
certainty and reduced risk.
Further payments relating to the significant debtor position in the Middle
East were received during H1, however the payment plan is currently behind
schedule. The FY24 provision for transaction risk remains in place and, based
on ongoing discussions with the client, we anticipate additional receipts to
bring the payment plan up to date by year-end. If payments fall short of
expectations, an additional provision may be required in H2.
Middle East revenue decreased in the first half of the year by 61% because
several opportunities did not meet our commercial risk threshold. This has
ultimately improved the quality of revenue generated in the region, with all
new contracts on favourable commercial terms and reduced customer
concentration.
Continued growth in UK and Europe
We continue to make solid progress in our core UK and Europe market, with 6%
revenue growth. This performance highlights our ability to drive growth across
both new and existing customers in a dynamic and expanding market.
Elsewhere, post-period-end we announced a two-year extension of our framework
contract with the Peruvian government to mid-2027. The value of this new
agreement is significantly higher than the original signed in 2021,
demonstrating the stickiness of customers once they have experienced firsthand
4GLOBAL's ability to leverage data to transform investment planning.
Driving innovation to grow recurring revenues and customer lifetime value
Recent advancements in embedding Artificial Intelligence and Machine Learning
across our product suite are delivering good results for our customers while
supporting our goal of increasing customer lifetime value. These innovations
are a key part of our continuous efforts to future-proof the Company and
deliver on our "Build for tomorrow" objective. With a strong pipeline of new
product developments, we aim to further expand the capabilities of our
solutions with a particular emphasis on driving growth in recurring and
repeatable revenues.
Delivering growth across all strategic objectives
Our strategy is structured around four objectives designed to help investors
track our progress. At the full year we attached KPIs to each of these
objectives, which we will update on annually. These pillars are:
1. Grow customer base internationally: Leverage partnerships and acquisitions to
enter new markets and acquire new customers.
2. Increase customer lifetime value: Build long-term and progressively more
mutually valuable customer relationships.
3. Transition to repeatable and recurring revenue: Shift to a higher-margin, more
predictable sales model
4. Build for tomorrow: Future-proof 4GLOBAL through continuous innovation and
improvement
We are happy with the progress we have made against each pillar in the half,
with all KPIs trending in the right direction at this stage. We look forward
to updating on our performance against each at the full year.
Current trading & outlook
The second half has started well, with revenues, as expected, weighted toward
this period due to the nature of the markets in which we operate and the
timing of customer investment decisions. We are tracking well against
full-year expectations at this stage, supported by a strong sales pipeline,
though remain mindful of macroeconomic challenges and the potential for slower
customer decision-making processes and longer sales cycles.
We have worked hard in the first half of the year to build on the progress
made in prior periods to position the business for growth, particularly in
North America, where increased awareness of our solutions is driving demand.
With a healthy pipeline across our target markets, a commitment to continuous
innovation, and a proven strategy, we are confident in delivering sustainable
growth in the second half and beyond.
We look forward to keeping shareholders informed of progress in the period
ahead.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2024
Note
Six months ended Six months ended Year to
30 September 30 September 31 March
2024 2023 2024
(unaudited) (unaudited) (audited)
£ £ £
Revenue 1,698,456 1,748,660 6,368,255
Cost of sales (452,240) (706,048) (1,686,631)
Gross profit 1,246,216 1,042,612 4,681,624
Administrative expenses (1,761,207) (1,647,209) (2,991,199)
Other operating income - - -
Analysed as follows:
Adjusted (loss)/profit from operations(1) (514,991) (604,597) 1,690,425
Depreciation and amortisation (279,713) (230,107) (480,180)
Foreign exchange losses (142,865) (3,826) (89,917)
Share based payment expense (128,573) (145,592) (263,171)
Exceptional items - - (512,658)
Operating (loss)/profit (1,066,142) (984,122) 344,499
Finance income 14 76 77
Finance cost (9,594) (19,045) (174,525)
(Loss)/profit before tax (1,075,722) (1,003,091) 170,051
Tax charge (31,774) (4,352) (399,077)
Loss for the period (1,107,496) (1,007,443) (229,026)
Other comprehensive income
Exchange differences on translation of foreign operations (15,288) (7,053) (12,583)
Other comprehensive income for the period (15,288) (7,053) (12,583)
Total comprehensive income for the period (1,122,784) (1,014,496) (241,609)
Total comprehensive income attributable to the equity holders of the company (1,122,784) (1,014,496) (241,609)
Basic loss - pence per share 3 (4.3)p (3.8)p (0.9)p
Diluted loss - pence per share 3 (4.3)p (3.8)p (0.9)p
The notes form part of these Condensed Consolidated Financial Statements.
Note 1 Adjusted (loss) / profit from operations is calculated as earnings
before interest, taxation, depreciation, amortisation of intangible assets and
right of use charge, share based payments, foreign exchange losses and
exceptional items.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2024
As at 30 September 30 September 31 March
2024 2023 2024
(unaudited) (unaudited) (audited)
£ £ £
Non-current assets
Property, plant and equipment 22,939 36,239 29,270
Right of use assets 846,612 376,734 218,867
Intangible assets 1,440,997 582,083 1,198,034
Deferred tax - 266,477 -
Total non-current assets 2,310,548 1,261,533 1,446,171
Current assets
Trade and other receivables 3,554,756 3,659,398 4,508,730
Cash and cash equivalents 287,013 265,352 148,694
3,841,769 3,924,750 4,657,424
Total assets 6,152,317 5,186,283 6,103,595
Equity and Liabilities
Equity
Share capital 263,451 263,451 263,451
Share premium 3,390,330 3,390,330 3,390,330
Merger reserve 676,310 676,310 676,310
Share option reserve 779,989 533,837 651,416
Share warrant reserve 188,266 188,266 188,266
Currency translation reserve (63,247) (42,429) (47,959)
Retained earnings (1,726,502) (1,397,423) (619,006)
Total equity 3,508,597 3,612,342 4,502,808
Non-current liabilities
Deferred Tax 64,672 - 64,672
Borrowings 33,334 83,333 58,333
Lease liability 616,510 - -
714,516 83,333 123,005
Current liabilities
Borrowings 550,000 50,000 50,000
Trade and other payables 1,116,352 1,058,238 1,233,722
Lease liability 262,852 382,370 194,060
Total current liabilities 1,929,204 1,490,608 1,477,782
Total liabilities 2,643,720 1,573,941 1,600,787
Total equity and liabilities 6,152,317 5,186,283 6,103,595
The notes form part of these Condensed Consolidated Financial Statements.
The Condensed Consolidated Financial Statements were approved and authorised
for issue by the Board of Directors on 11 December 2024.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2024
Six months to Six months to Year to
30 September 30 September 31 March
2024 2023 2024
(unaudited) (unaudited) (audited)
£ £ £
Cash flows from operating activities
(Loss)/profit before income tax for period (1,075,722) (1,003,091) 170,051
Adjustments to reconcile loss before tax to net cash flows:
Depreciation of tangible assets 226,405 196,397 393,087
Amortisation 53,308 33,710 87,093
Profit on disposal of fixed assets - (1,205) -
Finance income (14) (76) (77)
Finance cost 9,594 19,045 174,525
Equity-settled share-based expense/warrants 128,573 145,592 263,171
Decrease/(increase) in trade and other receivables 922,200 268,349 (1,004,056)
(Decrease)/increase in trade and other payables (116,785) (63,991) 110,976
Tax received - - 187,374
Net cash flows - operating activities 147,559 (405,270) 382,144
Cash flows from investing activities
Purchase of Tangible assets (1,206) (8,664) (11,954)
Purchase of Intangible assets (296,271) (223,612) (892,946)
Interest received 14 76 77
Net cash - investing activities (297,436) (232,200) (904,823)
Cash flows from financing activities
Proceeds from borrowings 500,000 - -
Repayments of borrowings (25,000) (25,498) (50,000)
Lease liability principal payment (161,309) (183,675) (371,985)
Interest elements of lease payments (2,440) (13,271) (21,960)
Interest paid (7,154) (5,774) (10,923)
Net cash flows - financing activities 304,097 (228,218) (454,868)
Net increase/(decrease) in cash 154,193 (865,688) (977,547)
Effects of exchange rate changes on cash (15,874) (7,053) (11,852)
Cash at beginning of period 148,694 1,138,093 1,138,093
Cash at the end of period 287,013 265,352 148,694
Comprising:
Cash and cash equivalents 287,013 265,352 148,694
Cash at end of period 287,013 265,352 148,694
The notes form part of these Condensed Consolidated Financial Statements.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2024
Currency
Share Share Merger Share option Share warrant translation Retained Total
capital premium reserve reserve reserve reserve earnings Equity
£ £ £ £ £ £ £ £
As at 31 March 2023 (audited) 263,451 3,390,330 676,310 388,245 188,266 (35,376) (389,980) 4,481,246
Loss for the period - - - - - - (1,007,443) (1,007,443)
Other comprehensive charges - translation differences - - - - - (7,053) - (7,053)
Total comprehensive income for the period - - - - - (7,053) (1,007,443) (1,014,496)
Transactions with owners:
Share based expense - - - 145,592 - - - 145,592
As at 30 September 2023 (unaudited) 263,451 3,390,330 676,310 533,837 188,266 (42,429) (1,397,423) 3,612,342
Profit for the period - - - - - - 778,417 778,417
Other comprehensive charges - translation differences
- - - - - (5,530) - (5,530)
Total comprehensive income for the period - - - - - (5,530) 778,417 772,887
Transactions with owners:
Share based expense - - - 117,579 - - - 117,579
As at 31 March 2023 (audited) 263,451 3,390,330 676,310 651,416 188,266 (47,959) (619,006) 4,502,808
Loss for the period - - - - - - (1,107,496) (1,107,496)
Other comprehensive charges - translation differences
- - - - - (15,288) - (15,288)
Total comprehensive income for the period - - - - - (15,288) (1,107,496) (1,122,784)
Transactions with owners:
Share based expense - - - 128,573 - - - 128,573
As at 30 September 2024 (unaudited) 263,451 3,390,330 676,310 779,989 188,266 (63,247) (1,726,502) 3,508,597
The notes form part of these Condensed Consolidated Financial Statements.
1. General Information
4Global plc is a public limited company incorporated in England and Wales and
was admitted to trading on the AIM Market of the London Stock Exchange, under
the ticker symbol 4GBL on 7 December 2021.
The Company was incorporated and registered in England and Wales on 22 July
2021 as a public company limited by shares, with the name 4Global plc and
registered number 13523846.
This financial information issued by 4Global plc in compliance with its
reporting obligations under the AIM Rules.
At 30 September 2024 the Company had issued share capital of 26,344,994
Ordinary Share of 1.0 pence.
The address of its registered office is Venture X, 5(th) Floor Building 7
Chiswick Park, 566 Chiswick High Road, Chiswick, London, United Kingdom, W4
5YG. The principal activity of the Company is the provision of advisory
services in the sporting sector at a local, national and international level.
2. Significant accounting policies
2.1 Basis of preparation
The consolidated financial statements of 4Global PLC were prepared in
accordance with International Financial Reporting Standards ("IFRS") as
adopted by the United Kingdom, IFRIC interpretations and the Companies Act
2006 applicable to companies applying IFRS. The interim report has been
prepared in accordance with International Accounting Standard (IAS) 34
(Interim Financial Reporting). The information in this report has been drawn
up using, in all material respects, the same accounting methods as those
utilised in the Group's annual report and accounts for the year ended 31 March
2024.
3. Earnings per share
Six Months ended Six Months ended Year to
30 September 30 September 31 March
2024 2023 2024
Basic earnings per Ordinary Share (unaudited) (unaudited) (audited)
£ £ £
Loss for the period (1,122,784) (1,007,443) (241,609)
Weighted average number of Ordinary Shares
in issue 26,344,994 26,344,994 26,344,994
Basic loss per share (pence) (4.3)p (3.8)p (0.9)p
Diluted earnings per Ordinary Share
Loss for the period (1,122,784) (1,007,443) (241,609)
Diluted weighted average number of shares in issue 26,584,365 26,500,175 26,510,327
Diluted loss per share (4.2)p (3.8)p (0.9)p
Weighted average number of shares used as a denominator
Shares in issue at 1 April 2024 and 2023 26,344,994 26,344,994 26,344,994
Adjustments for calculation of diluted earnings per share:
Share options 190,932 100,733 105,954
Warrants 48,439 54,448 59,379
239,371 155,181 165,333
26,584,365 26,500,175 26,510,327
4. Availability of interim accounts
Copies of the interim accounts are available on the Company's website
www.4global.com.
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