REG - ActiveOps PLC - Interim Results
25/11/2021 07:00
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RNS Number : 5211T ActiveOps PLC 25 November 2021
25 November 2021
ActiveOps plc
(ActiveOps, 'the Company', 'the Group')
Interim results for the six months ended 30 September 2021
ActiveOps plc (AIM: AOM), a leading provider of Management Process Automation
(MPA) software for running complex and global back-offices, is pleased to
announce its unaudited results for the six months ended 30 September 2021.
Financial Highlights:
Six months ended 30 September 2021 2020 Change
Annual recurring revenue "ARR" (1) £19.8 £17.1 +16%
Revenue
Software and Subscription revenue £9.6m £8.6m +12%
Training & implementation "T&I" revenue £1.9m £0.8m +137%
Total Revenue £11.5m £9.4m +22%
Gross margin £9.2m £7.6m +21%
Adjusted EBITDA(2) (£0.2m) £0.1m (300%)
Profit/(loss) before tax - continuing operations (£1.0m) (£0.6m) (67%)
Earnings per share on continuing operations (1.40p) (1.19p) (18%)
Profit from discontinued operations net of tax £0.0m £1.3m na
Statutory profit /(loss) for the period (£1.0m) £0.6m (267%)
Net cash and cash equivalents £10.9m £1.2m +808%
· Net Revenue Retention(3) at 110% on a 12 monthly basis, following customer
upgrades for both ControliQ and WorkiQ
· 137% growth in Training & Implementation (T&I) revenues following slow
H1 FY21 due to the impact of Covid-19
· Adjusted EBITDA loss of £0.2m slightly ahead of management expectations
despite increased investment with operating costs increasing £2.0m over the
same period in FY21 across sales, relationship management and R&D, with
further investment planned for H2.
· Strong balance sheet with net cash position of £10.9m at the period end.
1 Annual recurring revenue "ARR" at the end of the period, is a non-statutory
measure
2 Adjusted EBITDA is earnings before interest, tax, depreciation and
amortisation, share based payments and IPO costs.
3 Net Revenue Retention is the change in Annual Recurring Revenue from
existing customers at the beginning of the period
Strategic and Operational Highlights:
· Added 5 new customer logos globally
· Significant expansion sales in all key regions and targeted industries
· Strong renewals performance with customer retention levels in line with
management expectations and historical rates, including three long term
Australian banking customers extending their renewal cycle from one to three
years (one within the period and two post period end)
· US banking customer becomes first enterprise scale purchase of WorkiQ by an
existing ControliQ customer, providing confirmation of the significant up-sell
opportunities
· Releases of significant upgrades to both WorkiQ and ControliQ, including new
features to further automate data collection activities and to enable more
effective capacity planning for teams working in hybrid home/office situations
· 60% increase in software development capacity
· Creation of dedicated data science function to more rapidly address the many
opportunities to exploit Artificial Intelligence within the product set
Outlook:
· Continued positive trading in the second half of the year, with a further new
customer win, customer expansions and investment in product development
· Strong recovery of T&I revenue continues, supporting software sales
· Increased confidence in delivering a positive full year performance, slightly
ahead of Board expectations
Richard Jeffery, Chief Executive of ActiveOps, commented, "The first six
months of the year was a period of continued progress for ActiveOps, as the
demand for workforce management solutions increases as a result of back-office
operations becoming more complex, more demanding, more regulated and more
competitive. Our strong financial performance has been driven by new customer
wins and expanded existing customer engagements. We have continued to invest
in our team and our offering to ensure we have the structure and products to
execute on our growth plans.
"Trading in the second half of the financial year has seen a continuation of
the momentum seen in the first half. We continue to focus on our established
strategy, maintain our position as thought leaders and expand the scope of our
Workware+ platform to support our customers in simplifying the running of
their operations.
"With strong market drivers, alongside a proven and expanding proposition, we
remain confident that we are well placed to deliver on our growth ambitions
and we are excited about our future prospects."
For more information, please contact:
ActiveOps Via Alma PR
Richard Jeffery, Chief Executive Officer www.activeops.com (http://www.activeops.com/)
Patrick Deller, Chief Financial Officer
Investec Bank plc +44 (0)20 7597 5970
Corporate Broking & PLC Advisory
Patrick Robb / David Anderson
Alma PR + 44(0) 203 405 0205
Caroline Forde / Sam Modlin / Faye Calow
About ActiveOps
ActiveOps is a leader in Management Process Automation (MPA), providing a SaaS
platform to large enterprises with complex and often global back-offices. The
Group's software and embedded back-office operations management methodology
enables enterprises to adopt a data-driven, scientific approach to organising
work and managing capacity.
The Group's enterprise platform comprises Workware+, its MPA software
platform, and AOM, the Group's operations methodology and framework for
effective back-office management. Together, this combination of software and
embedded methodology enables operations managers to balance the competing
priorities of meeting service and quality standards while improving
productivity and reducing cost.
The Group serves its global customer base of approximately 80 enterprise
customers from offices in the UK, Ireland, USA, Australia, India and South
Africa. The Group's customers
are predominantly in the banking, insurance and business process
outsourcing (BPO) sectors, including Nationwide, TD Bank, Anthem Inc and DXC
Technology.
Chief Executive's Report
I am delighted to report that we have continued to build on the momentum of
FY21, with a performance characterised by revenue growth in-line with
management expectations and adjusted EBITDA slightly ahead of management
expectations, evidencing the continued success of the Group's Land and Expand
growth strategy. We have secured new logo wins or contract expansions across
all target regions and sectors, including the first enterprise level up-sale
of WorkiQ into an existing ControliQ customer and the signing of three-year
contract renewals by three major Australian banking customers (one within the
period and two post period end). Our customer retention rates remain high as
demand for workforce management solutions continues to increase in response to
the global move towards hybrid working and the renewed focus on digital
transformation.
It was particularly pleasing to note a record sales performance in EMEIA, one
of the Group's key target regions. Whilst we remain conscious of the ongoing
global uncertainty caused by the pandemic, our high levels of penetration
across three geographic regions stand us in good stead to continue our growth
and to enable large organisations to adapt to increasingly complex hybrid
working models.
We have continued to make good progress in delivering our strategy with
investment made in our product suite and our capability. Hires across the
Group's Technology, Product, Sales and Customer Success teams will enable
ActiveOps to continue to support its growing, global customer base.
Positive financial performance
The continued positive financial performance of the Group is underpinned by
the strong fundamentals of our business model, characterised by a highly
scalable platform, delivering high gross margins and strong cash generation.
We are pleased to report growth across all revenue metrics, with a
particularly strong return of Training & Implementation revenues, up 137%
following a softer H1 FY21 due to the impact of Covid-19 lockdowns. The
strength of the Group's recurring revenue business model is evident in the
strong growth in SaaS revenues, reaching £9.6m (H1 FY21: £8.6m).
New customer wins coupled with expansions at existing customers have seen
Annual Recurring Revenue increase 16% to £19.8m in the period, while
recognised revenue increased 22% to £11.5m (H1 FY21: £9.4m).
In line with the growth strategy outlined at the time of IPO, the Group
increased investment in sales, marketing and technology in the period,
resulting in a loss before tax for the half of £1.0m (H1 FY21: Loss £0.7m).
Supportive market environment
Following the global shift to working from home in FY21, the first half of the
year has seen significant further change as businesses evolve towards future
hybrid working practices. Many organisations are still developing these future
ways of working and we see significant variation across the markets and
industries we serve. Much like the forced move to home-working, the
migration to a hybrid approach will be simpler and more secure for those
operations who benefit from the rich data and consistent, digitally-enabled
operations management processes provided by our solutions.
Operational risk is a growing strategic issue for many businesses, which are
now functioning with leaner operations, reducing the inherent contingency and
therefore resilience within teams and processes. To respond, organisations
need greater control over operations - better foresight and more precise,
timely data on production and capacity. Many organisations are finding that
their legacy management processes, which relied on the physical presence and
technical experience of managers, are constraining performance and introducing
significant risk. In addition, we are beginning to see regulators requiring
that organisations be able to demonstrate the availability of adequate skills
and capacity to maintain key services. Our solutions ensure organisations
can demonstrate these requirements whilst still running as lean as possible.
The pandemic has also caused many organisations to re-double their digital
transformation efforts, with greater process automation being the most
significant focus within our operating environment. Automation brings
efficiency but also creates silos of both data and resources within
operations, meaning the full benefit of automation deployment is often not
delivered. Our Management Process Automation solutions break down these
silos and ensure investments in process automation deliver their full
potential.
In the short-term, procurement processes continue to be protracted as a result
of such a profound period of change and uncertainty. However, the factors
described above are increasing the awareness of the need for better
information and processes for managing work and capacity. In addition, there
is an increasing awareness of the opportunity offered by technology such as
the Workware+ platform, to augment and automate these management processes.
Just as we have seen issues arise in our cities as outdated infrastructure
struggles to cope with the demands of modern inhabitants, existing management
processes cannot support the complexity of modern operations. ActiveOps'
world-leading MPA product suite and foundational methodology is designed to
deliver that control, addressing the challenges of back-office complexity by
collating and standardising disparate data, analysing and presenting this data
through a set of digital tools which automate key management processes,
enabling organisations to optimise their operational performance.
Product enhancements and team expansion
In H1 FY22, in line with our strategy, we continued to increase our investment
in R&D and evolve our product offering, increasing its attractiveness to
our target customers and further differentiating us from competitors.
Developments in the period include the launch of Collector, a component
available to both WorkiQ and ControliQ which uses task mining technology to
automate the enumeration of completed work, providing an accurate picture of
productivity whilst reducing the overhead of data collection. This enhancement
makes WorkiQ the only EPM solution to meaningfully connect activity time
tracking to completed work output. Significant enhancements were also made to
ControliQ in the period, with the launch of a new functionality that enables
businesses to plan the optimal use of resources more easily in a hybrid work
environment.
We continued investment in our data science function to accelerate our use of
artificial intelligence (AI) and machine learning (ML) techniques, which when
paired with our existing dataset present significant opportunities to further
automate and augment management decision making. Looking forward, we are
developing a new WorkiQ extension to meet the specific needs of hybrid working
in the US. This enhancement will include functionality to help customers
better manage their employees in line with the challenging vaccine mandate
legislation recently introduced by the US Government.
H1 FY22 was a period of significant capability investment for ActiveOps, with
headcount growing by 17 team members, with a particular focus on our
engineering team, to support delivery of our product roadmap. We have already
seen the impact of our new development hires on output and look forward to
seeing the further increases to pace of progress facilitated by our growing
team.
Supporting our belief in the success of our solutions to facilitate a
successful hybrid working model, we are operating effectively in hybrid mode
ourselves, but with an increased presence in our offices, in-line with local
government and healthcare advice. ActiveOps intends to retain a hybrid work
environment in the long-term, with no roles expected to be based solely
in-office. Some elements of office working will, however, be factored into the
operating model for all teams.
We reinstated our annual customer conference, our first fully face-to-face UK
event post-lockdown in October 2021, following several successful hybrid
events in the US earlier in the year. Rewriting the Future of Operations
brought together customers, partners and industry commentators at the
Dorchester Hotel, London with speaker addresses from ActiveOps staff members,
customer representatives and industry analysts.
Growth of our customer base: Land & expand
Our new customer acquisition activity is focused on a tightly defined set of
banks, insurers and BPOs in our target geographies, representing a significant
Annual Recurring Revenue (ARR) opportunity. We made good progress in H1 FY22,
securing new logo wins or significant expansion sales across all target
regions and sectors. Five new customers were secured in the period, including
a large insurer and a healthcare payer in the US, a major BPO, an investment
management firm and a global consulting and services group.
The continued success of our stated Land & Expand strategy was reflected
in the number of contract renewals and expansions in the period, including the
transition of three Australian banking customers from an annual licence to a
multi-year contract for ControliQ (one within the period and two post period
end), both increasing revenue visibility from the customer and evidencing the
central role of the software within the bank's back-office operations.
Expanded use of ControliQ was seen across many of ActiveOps' customers,
including three of the UK's leading high street banks.
H1 FY22 also saw the first enterprise level up-sale of WorkiQ into an existing
ControliQ customer; the leading North American bank was the first of
ActiveOps' top 10 customers to take a WorkiQ contract at scale, a key ambition
of the Land & Expand strategy. An example of the value we can provide can
be seen in the results delivered for a South African bank where the
introduction of WorkiQ alongside established ControliQ deployments has shown a
12% incremental increase in productivity levels. We are expecting that more
enterprise-level ControliQ customers will take advantage of the increased
productivity gains provided by the full suite of Workware+ products in the
future. Likewise, we anticipate existing WorkiQ customers extending their
usage to include ControliQ as they seek higher levels of operations management
maturity.
Focus for the second half
Our focus for H2 YE22 is to further strengthen our position in the rapidly
developing market for enterprise management of capacity and work. We look
forward to seeing the continued success of our Land & Expand strategy and
hope to increase our penetration of our existing customers in addition to
further new logo wins. We continue to strengthen our relationships with our
transformation partners, work alongside leading industry analysts and support
our long-standing customers to achieve success in their markets.
We have enhanced our software development capacity through new hires during H1
FY22. Further investment will take place in the second half and we look
forward to maximising the opportunities created by our expanded product set.
Our ESG policies and targets are in development and are expected to be
communicated ahead of the FY22 AGM.
Confident Outlook
Trading in the second half of the financial year has continued positively.
Alongside further investment in product development, pleasingly we have seen
continued momentum of our Land & Expand strategy with one new customer
win, two significant existing customer expansion sales and the transition of
two Australian banking customers from an annual licence to a multi-year
contract for ControliQ. The strong recovery of T&I revenue has continued,
supporting future software sales.
This, coupled with the performance that we have delivered in the first half
give us increased confidence in delivering a positive full year performance,
slightly ahead of the Board's expectations.
As interest in workforce management solutions continues to grow, our
market-leading offering continues to resonate with our growing global
blue-chip customer base. Our belief in our ability to execute on our growth
plans remains strong and we are excited about our future prospects.
Chief Financial Officer's Report
Financial Review
I am pleased to report a good financial performance by the Group for the first
half of the year, growing ARR, software and subscription revenue, delivering a
small adjusted EBITDA loss with a strong cash position for the Group.
Revenue
Annual Recurring Revenue ('ARR') is a key performance metric for the Group.
Included within ARR are ActiveOps' software annual licence fees along with
small amounts of recurring support revenue where a customer has purchased an
ongoing care package.
ActiveOps' ARR at 30 September 2021 totalled £19.8m (30 September 20
£17.1m), representing year-on-year growth of 16%, delivered through the
expansion of our footprint in existing customer accounts and both direct and
partner sales to new customers across all of our regions.
Total revenue for the Group at £11.5m (H1 FY21: £9.4m) was 22% ahead of the
same period last year with recurring software and subscription revenues
increasing by 12% to £9.6m (2020: H1: FY21£8.6m) on a reported basis.
Training and Implementation ('T&I') revenues at £1.9m (2020: H1: FY21
£0.8m) were significantly ahead of the prior year given the impact in H1 FY21
of the COVID-19 pandemic where customers paused implementations for both new
and expansion opportunities whilst they managed the uncertainty of the
pandemic and secured their business operations.
Operating Profit and Margins
Gross margins moved to 80% (2021: 81%) primarily as a result of a higher
proportion of the lower margin Training & Implementation revenues in the
period. Software and Subscription margins(4) improved to 85% (H1 FY21: 84%)
with strong T&I margins(5) at 56% (H1 FY21: 51%) as a result of
significant high margin implementations across a range of customers. T&I
revenues and margins vary according to the product mix (between WorkiQ and
ControliQ), the location of implementations (with higher cost jurisdictions
delivering a higher margin), and the level of support required by ActiveOps
coaches on each delivery. H1 saw an ongoing higher mix of EMEIA ControliQ
implementations that resulted in a higher margin than the prior year.
Operating expenses (excluding share-based payments, depreciation, amortisation
and costs associated with the IPO) increased by 26% to £9.3m (H1 FY21:
£7.3m) following continued investment in sales, marketing and technology
development. Continued lower levels of travel and the timing of new staff
joining led to slightly lower levels of operating expense than had been
budgeted. All commission and development costs are expensed to the P&L
in the period.
As a result of continued investment in the business, adjusted EBITDA was a
marginally loss-making position of (£0.2m) (H1 FY21: profit £0.1m), being
slightly ahead of management's expectations.
Foreign Exchange
The Group has 54% (H1 FY21: 55%) of revenues invoiced in currencies other than
GBP. Exchange rates have remained broadly stable over the period for the
jurisdictions that the Group operates in with a minimal impact on reported
numbers.
Product and Technology Expenditure
Total expenditure on product management, research, development and support in
the year increased to £2.0m (H1 FY21: £1.2m). The Board has continued to
determine that none of the internal R&D costs incurred during the year
meet the criteria for capitalisation. Consequently, these have been expensed
as incurred through the income statement.
Depreciation & Amortisation
Depreciation & amortisation of £0.5m (H1 FY21: £0.6m) principally
comprised intangible amortisation following the acquisition of the OpenConnect
entity in 2019 and the Australian entities in 2017.
Note 4 - Software and Subscription margins are Software and Subscription
revenue less software and subscription cost of sales
Note 5 - T&I margins are T&I revenues less T&I cost of sales
Taxation
The Group had a minimal tax charge in the first half of the year reflecting
the loss-making position. The Group operates a transfer pricing policy to
ensure that profits are correctly recorded in each of the jurisdictions in
which it operates. ActiveOps has brought forward tax losses in the UK and
Irish legal entities.
Statutory Results
The Group reported a loss for the period of £1.0m (H1 FY21: profit £0.6m
including a £1.3m profit on discontinued operations).
Earnings per Share
Basic Earnings per Share for continuing operations decreased to a loss of
1.40p (H1 FY21: (1.19p)).
Dividend
The Board has determined that no dividend will be paid in the period. The
Group is primarily seeking to achieve capital growth for shareholders. It is
the Board's intention during the current phase of the Group's development to
retain distributable profits from the business to the extent they are
generated.
Cash flow
Cash flow from operations in the first half of the year was negative (£1.8m)
excluding £3.5m paid to tax authorities relating to the exercise of employee
share options at the IPO. The negative cashflow position in H1 is
attributable to the phasing of renewals over the year with a significant level
of renewals in the second half of the year and the timing of payments of
annual in advance bills can significantly impact the cash position. The
Group issued invoices totalling £3.2m in the last week of September 2021 and
first week of October 2021 and has received cash of £2.4m by the 31 October
2021.
Balance Sheet
The Group has maintained a strong balance sheet position with net assets at 30
September 2021 of £9.8m (FY21: £10.5m), including a net cash position of
£10.9m.
Management Statement
This Interim Management Report (IMR) has been prepared solely to provide
additional information to shareholders to assess the Group's strategies and
the potential for those strategies to succeed. The IMR should not be relied on
by any other party or for any other purpose.
The IMR contains certain forward-looking statements. These statements are made
by the Directors in good faith based on the information available to them up
to the time of their approval of this report but such statements should be
treated with caution due to the inherent uncertainties, including both
economic and business risk factors, underlying any such forward-looking
information.
By the order of the Board
24 November 2021
Independent review report to ActiveOps plc
Introduction
We have been engaged by the Company to review the condensed set of financial
statements in the interim financial report for the six months ended 30
September 2021 which comprises the consolidated statement of profit and loss
and other comprehensive income, the consolidated statement of financial
position, the consolidated statement of cash flows, the consolidated
statement of changes in equity and notes 1 to 8. We have read the other
information contained in the interim financial report and considered whether
it contains any apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
Directors' Responsibilities
The interim financial report, is the responsibility of, and has been approved
by the directors. The directors are responsible for preparing and presenting
the interim financial report in accordance with the AIM Rules for Companies.
As disclosed in note 2 the annual financial statements of the Group will be
prepared in accordance with UK-adopted International Accounting Standards. The
condensed set of financial statements included in this interim financial
report has been prepared in accordance with the presentation, recognition and
measurement criteria of UK-adopted International Accounting Standards.
Our Responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the interim financial report based on our
review.
Scope of Review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK) and consequently does
not enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the interim
financial report for the six months ended 30 September 2021 is not prepared,
in all material respects, in accordance with the presentation, recognition and
measurement criteria of UK-adopted International Accounting Standards, and the
AIM Rules for Companies.
Use of our report
This report is made solely to the Company in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "'Review of Interim
Financial Information performed by the Independent Auditor of the Entity"
issued by the Auditing Practices Board. Our review work has been undertaken so
that we might state to the Company those matters we are required to state to
them in an independent review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone
other than the Company, for our review work, for this report, or for the
conclusions we have formed.
RSM UK Audit LLP
Chartered Accountants
Portland, 25 High Street
Crawley
West Sussex
RH10 1BG
24 November 2021
ActiveOps plc
Consolidated statement of profit and loss and other comprehensive income for
the period to September 2021
Six months ended 30 September 2021 Six months ended 30 September 2020
Notes £000 Unaudited £000 Unaudited
Revenue 3 11,451 9,416
Cost of sales 4 (2,293) (1,783)
Gross profit 9,158 7,633
Administrative expense excluding share options charges, depreciation, (9,332) (7,245)
amortisation and exceptional items
Administrative expense - share option charges only (283) (10)
Administrative expense - depreciation and amortisation only (503) (575)
Operating loss (960) (197)
Finance income 1 5
Financing costs (32) (229)
Loss before taxation (991) (421)
Taxation 5 (6) (32)
Loss for the year from continuing activities (997) (453)
Profit for the year from discontinued activities, net of tax - 1,357
(Loss) / profit for the period (997) 904
Other comprehensive income
Items that may be subsequently reclassified to profit or loss:
Exchange differences on translating foreign operations (37) (185)
Total comprehensive (loss) / income for the period attributable to the owners (1,034) 719
of the parent company
Basic and diluted (loss) / earnings per share
Continuing operations (1.40p) (0.78p)
Discontinued operations 0.00p 2.35p
Total (1.40p) 1.57p
ActiveOps plc
Consolidated statement of financial position
At 30 September 2021 At 31 March 2021
Notes £000 Unaudited £000 Audited
Non-current assets
Intangible assets 5,374 5,655
Property, plant and equipment 214 241
Right-of-use assets 642 736
Deferred tax assets 254 296
Total non-current assets 6,484 6,928
Current assets
Trade and other receivables 7 6,086 5,836
Corporation tax recoverable 96 54
Cash and cash equivalents 10,915 16,617
Total current assets 17,097 22,507
Total assets 23,581 29,435
Equity
Share capital 71 71
Share premium account 6,444 6,430
Share option reserve 286 4
Foreign exchange reserve (241) (204)
Retained earnings 3,214 4,210
Total equity 9,774 10,511
Non-Current liabilities
Lease liabilities 530 655
Provisions 89 89
Deferred tax liabilities 1,149 1,210
Total non-current liabilities 1,768 1,954
Current liabilities
Trade and other payables 8 11,891 16,808
Lease liability 148 162
Total current liabilities 12,039 16,970
Total equity and liabilities 23,581 29,435
ActiveOps plc
Consolidated statement of cash flows
Six months ended 30 September 2021 Six months ended 30 September 2020
Notes £000 Unaudited £000 Unaudited
(Loss) / profit after tax (997) 904
Taxation 6 94
Finance income (1) (5)
Financing costs 32 233
Operating (loss) / profit (960) 1,226
Adjustments for:
Depreciation property, plant and equipment 76 107
Depreciation right-of-use asset 90 131
Amortisation of intangible assets 337 422
Share option charge 283 10
Change in trade and other receivables (283) 2,936
Change in trade and other payables 8 (4,867) (5,007)
Cash (used in) / from operations (5,324) (175)
Interest paid (32) (233)
Taxation paid (78) (211)
Net cash used in operating activities (5,434) (619)
Investing activities
Purchase of property, plant and equipment (49) (18)
Interest received 1 5
Net cash used in investing activities (48) (13)
Financing activities
Proceeds from issue of shares 15 -
Repayment of lease liabilities (135) (103)
Repayment of bank borrowings - (1,609)
Net cash used in financing activities (120) (1,712)
Net change in cash and cash equivalents (5,602) (2,344)
Cash and cash equivalents at beginning of the period 16,617 4,093
Effect of foreign exchange on cash and cash equivalents (100) 17
Cash and cash equivalents at end of the period 10,915 1,766
ActiveOps plc
Consolidated statement of changes in equity
Share capital Share premium Share option reserve Foreign exchange reserve Retained earnings Total
£000 £000 £000 £000
At 1 April 2020 (unaudited) 19 4,755 221 (317) (5,041) (363)
Profit for the period - - - - 904 904
Exchange differences on translating foreign operations - - - (185) - (185)
Total comprehensive income for the period - - - (185) 904 719
Transactions with owners, recorded directly in equity
Share based payment charge - - 10 - - 10
Total transactions with owners - - 10 - - 10
At 30 September 2020 (unaudited) 19 4,755 231 (502) (4,137) 366
At 31 March 2021 (audited) 71 6,430 4 (204) 4,210 10,511
Loss for the period - - - - (997) (997)
Exchange differences on translating foreign operations - - - (37) - (37)
Total comprehensive loss for the period - - - (37) (997) (1,034)
Transactions with owners, recorded directly in equity
Reserve transfer on exercising of share options - - (1) - 1 -
Share based payment charge - - 283 - - 283
Issue of shares - 14 - - - 14
Total transactions with owners - 14 282 - 1 297
At 30 September 2021 (unaudited) 71 6,444 286 (241) 3,214 9,774
ActiveOps plc
Notes forming part of the interim financial statements for the period ended 30
September 2021
1. General information
ActiveOps plc ('the Company') is a public company limited by shares
incorporated in England and Wales. The registered office and principal place
of business is One Valpy, 20 Valpy Street, Reading, Berkshire, RG1 1AR. The
Company, together with its subsidiary undertakings ('the Group') is
principally engaged in the provision of hosted operations management Software
as a Service ('SaaS') solutions to industry leading companies around the
world.
2. Accounting policies
a) Basis of preparation
The Interim financial report for the six months ended 30 September 2021 has
been prepared on the basis of the accounting policies expected to be adopted
for the year ended 31 March 2022. These are in accordance with the accounting
policies as set out in the Group's last annual consolidated financial
statements for the year ended 31 March 2021.
The Interim financial report has been prepared on a going concern basis and in
accordance with the presentation, recognition and measurement criteria of
UK-adopted International Accounting Standards.
The financial information in the Interim financial report does not constitute
statutory accounts, within the meaning of section 434 of the Companies Act
2006, for the six months ended 30 September 2021 and should be read in
conjunction with the Group's consolidated financial statements for the year
ended 31 March 2021. The consolidated financial statements for the year ended
31 March 2021 have been filed with the Registrar of Companies, were
unqualified and did not contain statements under Section 498 (2) or (3) of the
Companies Act 2006.
All figures presented are rounded to the nearest thousand, unless stated
otherwise.
b) Going Concern
The Directors have a reasonable expectation that there are no material
uncertainties that cast significant doubt about the Group's ability to
continue in operation and meet its liabilities as they fall due for the
foreseeable future, being a period of at least 12 months from the date of
approval of the interim financial statements. During the period, the Group has
retained a significant cash balance. This ensures that the business remains
financially robust, with strong prospects for the future.
In light of the Covid-19 outbreak, the Directors have considered appropriate
measures to respond to the uncertain outlook and ensure that the Group remains
a going concern for a period of at least 12 months. Whilst there can be no
certainty due to the conditions across the world at present, the Directors
have reviewed cash flow forecasts for the business covering a period of at
least 12 months from the date of approval of the interim financial statements,
they are confident that sufficient funding is available to support ongoing
trading activity and investment plans for the business. The interim financial
statements have therefore been prepared on a going concern basis.
3. Revenue
The Group derives all its revenue from the transfer of goods and services.
A disaggregated geographical split of revenue by operating segment is shown
below between Europe, the Middle East, India and Africa ('EMEIA'), North
America and Australia. All revenue streams are recognised over time.
SaaS T&I Total
Six months ended 30 September 2021 £000 £000 £000
EMEIA 4,982 1,171 6,153
North America 2,462 217 2,679
Australia 2,144 475 2,619
9,588 1,863 11,451
SaaS T&I Total
Six months ended 30 September 2020 £000 £000 £000
EMEIA 4,506 653 5,159
North America 2,002 83 2,085
Australia 2,080 92 2,172
8,588 828 9,416
4. Segmental analysis
The Group has two reporting segments, being SaaS and T&I. The Group
focuses its internal management reporting predominantly on revenue and cost of
sales. Total assets and liabilities are not provided to the CODM in the
Group's internal management reporting by segment and therefore a split has not
been presented below. Information about geographical revenue by segment is
disclosed in note 3.
No individual customer accounted for 10% or more of turnover during the
reporting period.
SaaS T&I Total
Six months ended 30 September 2021 £000 £000 £000
Revenue 9,588 1,863 11,451
Cost of sales (1,468) (825) (2,293)
8,120 1,038 9,158
SaaS T&I Total
Six months ended 30 September 2020 £000 £000 £000
Revenue 8,588 828 9,416
Cost of sales (1,378) (405) (1,783)
7,210 423 7,633
5. Taxation
Six months ended 30 September 2021 Six months ended 30 September 2020
£000 Unaudited £000 Unaudited
Current income tax
Foreign current tax on profit for the current period 36 (54)
Foreign current tax on profit for the prior period 2 157
Deferred tax
Origination and reversal of timing differences (32) (71)
Total tax charge 6 32
Six months ended 30 September 2021 Six months ended 30 September 2020
£000 Unaudited £000 Unaudited
Loss before tax (991) (421)
Tax at domestic rate of 19% (2020: 19%) (188) (80)
Effect of:
Expenses that are not deductible in determining taxable profit 21 (15)
Deferred tax not recognised 185 (8)
Adjustments in respect of prior periods 2 157
Effect of other tax rates (14) (22)
Total tax charge 6 32
6. Earnings per share
Six months ended 30 September 2021 Six months ended 30 September 2020 Year ended 31 March 2021
Unaudited Unaudited Restated
Loss on continuing activities (£000) (997) (453) (2,791)
Profit on discontinued activities (£000) - 1,357 11,783
Weighted average number of shares in issue in the period 71,334,942 57,720,180 57,840,821
Basic and diluted (loss) / earnings per share (March 2021 restated)
Continuing operations (1.40p) (0.78p) (4.83p)
Discontinued operations 0.00p 2.35p 20.37p
Total (1.40p) 1.57p 15.54p
The earnings per share for the year ended 31 March 2021 were misstated in the
2021 annual report and accounts as being a loss of (3.91p) per share from
continuing operations and a profit of 16.52p per share on discontinued
operations. This calculation was incorrectly based upon the year end number of
shares in issue, rather than the weighted average shares in issue during the
year.
The number of shares in issue at 31 March 2021 were 71,320,680. The weighted
average number of shares in issue for the year ended 31 March 2021 was
57,840,821. Using the weighted average number of shares in issue for the year
ended 31 March 2021 the loss from continuing operations is restated to be
(4.83p) per share and the profit from discontinued operations is restated to
be 20.37p per share.
7. Trade and other receivables
At 30 September 2021 At 31 March 2021
£000 Unaudited £000 Audited
Trade receivables 3,779 3,167
Prepayments and accrued income 897 1,046
Other receivables 1,410 1,623
6,086 5,836
The Directors consider the carrying value of trade and other receivables to be
approximately equal to their fair value. Other receivables includes an amount
of £1.3m (March 2021: £1.3m) held in escrow relating to the sale of
OpenConnect in October 2020.
At 30 September 2021 At 31 March 2021
£000 Unaudited £000
Audited
Trade receivables from contracts with customers 3,808 3,194
Less loss allowance (29) (27)
3,779 3,167
Trade receivables are amounts due from customers for services performed in the
ordinary course of business. They are generally due for settlement within 30
days and are therefore all classified as current. Trade receivables are
recognised initially at the amount of consideration that is unconditional. The
Group holds the trade receivables with the objective of collecting the
contractual cash flows, and so it measures them subsequently at amortised cost
using the effective interest method.
Included within prepayments and accrued income is the following accrued income
and contract assets:
At 30 September 2021 At 31 March 2021
£000 Unaudited £000 Audited
Accrued income 287 583
Contract assets 146 242
8. Trade and other payables
At 30 September 2021 At 31 March 2021
£000 Unaudited £000
Audited
Trade payables 283 689
Other taxation and social security 1,026 4,524
Other payables 3 101
Accruals and deferred income 10,579 11,494
11,891 16,808
Trade payables are unsecured and are usually paid within 30 days of
recognition. The carrying amounts of trade and other payables are considered
to be the same as their fair values, due to their short-term nature.
At 31 March 2021 Included within other taxes and social security is £3,498k
of taxes payable on the share options that exercised as part of the listing of
the Company on 29 March 2021. According to the terms of the share options, all
option holders had an obligation to reimburse the Group for any taxes that
became payable on their options. These proceeds were recovered from the cash
generated from the shares being issued and sold into the market, and was paid
to HMRC in April 2021. This unpaid tax has significantly impacted the change
in trade and other payables in the consolidated statement of cashflows as
shown for the year ended 31 March 2021 and the period ended 30 September 2021.
Included within accruals and deferred income is the following contract
liabilities:
At 30 September 2021 At 31 March 2021
£000 Unaudited £000
Audited
Contract liabilities 7,668 8,423
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