REG - Actual Experience - Preliminary Results
27/01/2023 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230127:nRSa0307Oa&default-theme=true
RNS Number : 0307O Actual Experience PLC 27 January 2023
27 January 2023
Actual Experience plc
(the "Company" or "Actual Experience" or "Actual")
Preliminary Results
Actual Experience plc (AIM: ACT), the Human Experience (HX)
software-as-a-service company, announces its preliminary results for the year
ended 30 September 2022.
Financial highlights
· Group revenue of £1.18m (2021: £1.74m). Decrease attributable to
the non-renewal of two legacy product contracts
· Loss for the year of £5.27m (2021: £5.85m). The levels of
monthly operating costs were reduced significantly by the year end compared to
levels recorded earlier in the year
· Net cash at year end of £2.87m (2021: £8.22m). Post year-end
funding of £2.8m (net) to be used to fund the working capital requirements of
the Company and to strengthen its balance sheet to enable it to build
financial credibility with larger blue-chip customers
Operational highlights
· Significant refresh of the Board and C-suite leadership bringing
critical skills and experience in SaaS scale-ups
· Extensive market research project to identify and define our
target audience and their pain points
· Applied our legacy technology to this newly emerged market
problem
· Rebranded and repositioned our messaging and the the problem we
solve
· Scaled our infrastructure to service enterprise customers
· Built and launched a brand new offering, our Digital Workplace
Management Platform
· Completed a £3.1m (gross) equity fundraise after the year-end
Current trading and outlook
· We are in advanced discussions with a large UK central government
department and expect this process to complete in spring 2023
· We are also in advanced discussions with two leading professional
services firms:
o The larger of these processes should complete by late spring 2023
o The second commenced more recently but indications are that this will
complete during summer 2023
· We are working closely with our existing channel partners such as
Verizon and Vodafone, and new partners such as LACE, as well as increasing the
size of our sales team, to identify new sales leads
Kirsten English, Executive Chair of Actual Experience plc, commented:
"During 2022, there has been meaningful change impacting every part of the
business. This means our company is now positioned to capitalise on the
growing market opportunity for digital workplace services.
In recent months, we have gained important new capabilities in the Company;
new product, a revitalised sales team and significant changes to the Board and
leadership of the Company. Our efforts are now focussed on making sales in the
rapidly emerging market sector for digital workplace management tools. The
economic conditions in the UK remain uncertain, sales cycles are lengthy, but
we have built a solid pipeline through both our partners and, more recently,
our 'Direct Sales' efforts.
I would like to thank Actual's dedicated and innovative staff, plus our
customers, partners, and investors for their support this past year and look
forward to delivering on our potential."
Enquiries:
Actual Experience plc Tel: +44 (0)203 128 8100
Steve Bennetts, Chief Financial Officer
Singer Capital Markets Advisory LLP Tel: +44 (0)207 496 3000
Shaun Dobson
James Fischer
Turner Pope Investments (TPI) Ltd Tel: +44 (0)203 657 0050
James Pope
Andy Thacker
MHP Communications Tel: +44 (0)203 128 8100
Reg Hoare act@mhpc.com
Matthew Taylor
About Actual Experience
Actual Experience's goal is to make the digital world work for everyone,
everywhere, all of the time. As the working world evolves post-pandemic, the
global shift to a flexible hybrid model has brought with it a significant
challenge; how do businesses create an environment that gives their people
what they need to thrive, whilst protecting the commercial efficiency of the
business and driving growth at the same time?
By underpinning their strategic decision making with our data-driven insights,
our customers gain the clarity and confidence needed to build sustainable
digital ecosystems within their organisations - delivering both a great
employee experience and increasing the efficiency of the digital workplace.
Powered by over 10 years of academic Human Experience research, our Digital
Workplace Management System doesn't need any interaction with employees to
provide a unique and highly actionable dataset that People, Technology and
Finance leaders can rely upon to plan impactful projects against their most
critical agenda items including wellbeing, profitability, DE&I and ESG
initiatives.
Actual Experience is listed on the London Stock Exchange (AIM: ACT). Our
corporate headquarters are in Bath, UK. Actual Experience's unique and
patented digital analytics-as-a-service is founded on cutting-edge research
from Queen Mary University of London.
For further information please visit www.actual-experience.com
(http://www.actual-experience.com)
Chair's Statement
Overview
Although 2022 was, in some ways, a difficult year for the Group, we made
significant changes which should position the company to take advantage of the
growing demand for digital workplace services.
The marketplace for tools which improve the digital workplace is growing.
Forrester, Gartner, and McKinsey publications, inter alia, show that this is
an emergent market with a variety of service offerings designed to monitor and
improve performance. Based on our analysis, in our opinion none of our
competitors match the capability of Actual's new Digital Workplace Management
Platform (DWMP) when it comes to providing the insights that corporate boards
and management teams need to address in the complex, hybrid working
environment. Our new product is more than a network performance tool, we
provide continual and reliable data in a dashboard format which monitors
employee wellbeing and signals where investments can be made to increase
productivity.
Strategy
During 2022, we have increased our focus and pace of execution. Our strategy
has been to build out the product, sales, and marketing capability of the
company. Scarlet Jeffers joined in October 2021 as Chief Product Officer and
DWMP was soft launched in May 2022. This was a significant achievement by the
team. In May, Roy Jugessur joined as Chief Revenue Officer to professionalise
our sales approach and kick start our Direct sales capability, whilst
enhancing relationships with our major channel partners. We also rebranded the
company for marketing purposes. During the year, we reviewed and reduced the
cost base and decreased the 'cash burn rate' to allow us to invest in more
'front end' resources and give time for the new strategy to take root. And in
October (following September roadshows), we raised capital to invest further
in these capabilities and opportunities.
Please see the Interim Chief Executive's statement for an update on the
development of our sales pipeline.
Board and Governance
During 2022, we have made important changes to leadership and governance. I
stepped into the role of Chair in March and initiated a series of changes to
refine our leadership and governance and ensure it is fit for the next stage
of the Company's development. In addition to the senior management
appointments mentioned above, our founder Chief Executive Officer, Dave Page,
moved to a new role as Chief Strategy Officer with a mandate to secure more
partnership business and became an advisor to the Board. I wanted to update
you on the search for the new CEO. The process has yielded excellent internal
and external candidates but is not yet concluded. However, we have an
experienced management team whose focus is primarily on sales at this time.
Consequently, Steve Bennetts will remain as Interim CEO (as well as being the
CFO) and I will remain as Executive Chair until the new CEO comes on board.
Richard Steele joined the Board in June 2022 and assumed the role of Chair of
Audit in September when he replaced Sir Bryan Carsberg, who stepped down after
eight years as a director. We thank Sir Bryan for his support and wisdom. In
October 2022, Harmesh Suniara was appointed to the Board; Harmesh is a
portfolio manager at Lombard Odier (a cornerstone investor in the recent
fundraise).
Equity Placing
In October we went to the public market for additional funding and raised
£2.8m (net). Our joint brokers were Singer Capital Markets and Turner Pope
Investments as we targeted both professional and high net worth investors. The
purpose of the fundraise was to increase our 'cash runway' to enable the new
team and market positioning to make an impact.
Further details of our operational and financial considerations are outlined
in the Interim Chief Executive statement and note 1 to the financial
information.
Summary
During 2022, there has been meaningful change impacting every part of the
business. This means our company is now positioned to capitalise on the
growing market opportunity for digital workplace services.
In recent months, we have gained important new capabilities in the Company;
new product, a revitalised sales team and significant changes to the Board and
leadership of the Company. Our efforts are now focussed on making sales in the
rapidly emerging market sector for digital workplace management tools. The
economic conditions in the UK remain uncertain, sales cycles are lengthy, but
we have built a solid pipeline through both our partners and, more recently,
our 'Direct Sales' efforts.
I would like to thank Actual's dedicated and innovative staff, plus our
customers, partners, and investors for their support this past year and look
forward to delivering on our potential by booking orders and generating
revenues in the current year and beyond.
Kirsten English
Chair
26 January 2023
Interim Chief Executive's Statement
One of the most profound and far-reaching business changes in recent times is
the widespread adoption of employee hybrid working, often referred to as 'The
Future of Work'. This has presented leadership teams with a
once-in-a-generation opportunity to transform the digital environment for
their employees. Having invested vast sums in the past in optimising their
offices for employee digital experience, enterprises are now embracing this
hybrid working environment by prioritising the 'human experience' of their
digital business applications to ensure their employees are as productive as
ever, anytime and anywhere. This important trend is now increasingly
recognised by leading commentators such as Forrester and Gartner, who suggest
that 2023 will be the start of a period when organisations prioritise
investment in technologies that improve the human experience of their digital
infrastructure.
Actual Experience is ideally placed to stake out a leadership position in this
nascent Human Experience (HX) sector, thanks to its patented technology and
many years of know-how. Uniquely, our SaaS solution provides actionable
insights from the only perspective that matters, the human perspective. By
acting as a proven-to-be-accurate proxy for employees accessing an
enterprise's major applications, Actual is able to determine which employees
are experiencing poor digital performance and then identify the areas
requiring improvement.
Performance Review
Our previously communicated plans to pivot Actual's strategic focus to address
the strong and pervasive commercial need for hybrid working data resulted in
2022 being a year of transition for the business. The Company has emerged from
this period of change with a refreshed and reinvigorated leadership team and
the launch of our market-leading Digital Workplace Management Platform (DWMP).
We are pleased with the consistently positive market reaction to the DWMP from
both channel partners and prospective enterprise customers.
Revenue for the year ended 30 September 2022 was generated entirely from
legacy sales engagements and amounted to £1.2m (2021: £1.7m); as previously
announced, this decrease is attributable to legacy contracts that were not
renewed during the year and which did not involve our new DWMP product.
During the year, significant cost reductions, amounting to approximately a
third of peak monthly spending (savings of over £0.2m per month) were
achieved through reduced headcount and other operational initiatives. This
will benefit the current financial year that commenced in October 2022 by
lowering the Company's cash burn and break even point.
Net cash at 30 September 2022 was £2.9m (30 September 2021: £8.2m).
Following the fund raise completed in October 2022 which raised net proceeds
of £2.8m, Actual Experience retains a solid financial position, with net cash
of £4.1m at 31 December 2022. However, at this time the Group remains
loss-making and it will be necessary to win significant new sales orders.
People and culture
Our skilled employees are key stakeholders in the success of the Company and I
would like to thank them for their ongoing hard work and dedication. 2022 has
been a year of challenge and change for our people but through their
continuing commitment and focus on achieving our strategic goals, the Company
has emerged in a stronger position to execute our growth initiatives and stake
a leadership position in the emerging SaaS market for Human Experience
solutions.
Actual's corporate culture is at the heart of everything we do. I strongly
support the Company's core values and behaviours which we expect every
employee to uphold and which underpin the corporate strategy and decision
making process. This culture ensures that the Company is fair, ethical and
supportive towards all employees and stakeholders, making it a place where
people are able to work effectively and achieve their career goals.
Platform development
An intrinsic element of the profound changes in Actual during the year has
been the evolution of the Company's technology focussed culture to a more
sales-led focus. As part of this, management has listened carefully to
feedback from existing and prospective customers with regard to their
requirements for comprehensive, easily accessible, and timely information
regarding the employee experience of hybrid working. This resulted in a
market-led definition of the required product to address enterprise needs
Fortunately, Actual has been able to re-purpose its established and patented
algorithms and 'know-how' to provide the computational core of our new SaaS
offering, the DWMP. This was launched in summer 2022 and includes an
interface/portal that provides rich information on the operational
capabilities of the digital workplace, by user, department, and geography.
In August 2022, the Company completed an initial deployment of the DWMP with
an existing customer and then proceeded to live service in October 2022. The
platform has proven to work reliably at scale in this large deployment and is
already providing a wealth of actionable information regarding opportunities
to derive digital workplace efficiencies. This has resulted in strongly
positive customer feedback.
Our markets
While still maintaining a direct sales capability, the importance and ubiquity
of the need for a compelling technology solution to support hybrid working
means that Actual will increasingly seek to establish partnerships with
leading technology solution providers, as well as consultancies focussing on
the people dimension of hybrid working.
We believe that there is a widespread need for our technology and that it will
appeal especially to large global enterprises with complex digital
infrastructure and applications.
Partner programme
We are pleased with the on-going support and continuing commitment of our
commercial channel partners Verizon and Vodafone, both of whom are actively
promoting DWMP to their customer base. Most of the sales leads currently being
pursued by Actual are being generated in this way.
As a strategic priority, Actual is actively seeking new partner relationships
with leading technology and consulting companies. Several of these projects
are well advanced and we expect to announce new partners in due course.
As announced in December 2022, the Company is particularly pleased with its
recent progress with LACE Partners, a specialist HR consultancy with a 'Big
Four' heritage. Together with LACE, Actual is actively pursuing several
opportunities with LACE's large global clients.
Our current and prospective partners share our view of the need for a
compelling technology offering that addresses the business need for
comprehensive and timely information on the impact of hybrid working on the
productivity and well-being of their employees. While several established
technology companies claim to have a viable product offering, our partners
confirm that Actual's DWMP is ideally placed to stake a leadership position in
this emerging market.
Sales pipeline
At the time of the fundraise in September 2022 we talked about our order
pipeline and how we collaborate with our partners to generate sales leads. Our
primary focus subsequently has been on landing high value contracts with
several key prospects as this is the fastest route to obtaining paying
customers, generating revenue and improving our cash position.
The following progress has been achieved on these sales engagements in recent
months:
· We are in advanced discussions with a large UK central government
department. This is a sales process run to rigorous procurement standards and
is therefore competitive. This process is scheduled to complete in spring
2023.
· We are also in advanced discussions with two leading professional
services firms. The larger of these is running a full process to select their
chosen HX supplier and we believe that this process should also complete in
spring 2023. Discussions with the second firm commenced more recently but
indications are that this is an engagement that will complete by summer 2023.
We are working closely on these projects with our partners Verizon and
Vodafone and we are in the process of expanding our sales team to ensure that
we have the capacity for handling these and other large enterprise
opportunities. In our experience, enterprise sales cycles are typically 9 to
12 months, although recent economic uncertainty in the UK has extended the
process for some prospects.
While our primary focus in recent months has been to drive these engagements
to the point of placing orders, we also continue to identify new sales leads
both with our partners and through direct selling efforts. We have also
progressed our previously announced relationship with leading HR Consultancy
LACE, to both nurture opportunities within the HR community and develop
joint marketing initiatives.
As noted in our Annual Report, we continue to receive positive feedback
regarding our DWMP from existing and prospective customers as well as from our
partners. While several large technology companies in the IT tooling space
have recently started to play into the Digital Experience (DX) category, we
retain our unique selling point having spent the last decade refining our
patented algorithms and analysis. Rather than just reporting them, we
translate a multitude of IT data points into quantified, prioritised actions
to improve the digital workplace.
The successful completion of these sales leads remains of paramount importance
to the Group. As outlined in further detail in the Financial Review and note 1
of the financial information, if the Group is not able to secure an
appropriate combination of new revenue contracts and/or cost reductions and
without further sources of finance being identified and obtained, then it may
not have sufficient resources to meet its liquidity requirements for the
foreseeable future. Accordingly, a material uncertainty exists which may cast
significant doubt about its ability to continue as a going concern.
Technology investment
Actual will continue to work closely with its partners and enterprise
customers to add high-value features to the DWMP to maintain its technology
leadership position.
As our commercial sales activities increase, a priority for us is to continue
to develop the scalability of our data centres so that they are able to meet
the demands of the world's largest companies while improving our gross margins
to 90%.
Summary and Outlook
Since our trading update issued in mid-December 2022, we have continued to
make progress in all our major workstreams. As previously stated, our sales
cycles remains lengthy and efforts to reduce this have been hampered by the
challenging general business environment, including higher interest rates and
reduced levels of economic growth. Further details of our operational and
financial considerations are outlined in the Financial Review and note 1 of
the financial information.
Despite this economic backdrop, Actual is well placed to meet the strong and
wide-spread enterprise demand for data to enable effective management of
employee productivity and well-being. Our clear focus and priority is to
continue to develop our pipeline of sales prospects and convert these as
efficiently as possible to recurring high-margin SaaS revenue streams. In
particular, we expect to be able to work closely with our existing and
prospective channel partners to access large enterprise prospects. I am
confident that the Company has taken the necessary steps to ensure that it is
well positioned to take advantage of the commercial opportunity to stake a
leadership position in one of the most significant enterprise technology
developments in recent years.
Steve Bennetts
Interim CEO & CFO
26 January 2023
Financial Review
Revenue
Revenue recognised in the year ended 30 September 2022 was £1,182,956 (2021:
£1,741,207) and relates to the supply of hybrid workplace
Sofware-as-a-Service (SaaS) and associated consultancy services to customers.
The reduction in revenue substantially arises from the non-renewal or
cancellation of service for two legacy customers.
99% of revenue was derived from sales to Channel customers (2021: 99%) with
the balance arising from direct sales.
Cost of sales and gross profit
The gross profit for the year was £338,052 (2021: £833,209); the decrease
from the prior year is a result of lower revenues and the fixed cost element
in data centre cloud costs. Included in cost of sales are data centre expenses
of £518,151 (2021: £534,262), and salary and related costs of customer
support teams totaling £326,753 (2021: £373,736).
Expenses
Administrative expenses comprising R&D, operational support, sales and
marketing, finance and administration costs, and foreign exchange gains and
losses, totalled £5,822,516, a decrease of £899,398 compared to the prior
year. Most of this decrease is due to a non-recurring impairment charge in
2021, as well as the significant decrease in employee numbers in 2022 through
a combination of planned reductions and attrition. This was partly offset by
higher corporate costs, including audit fees and insurance premiums. The
functional cost breakdown is as follows:
2022 2021
Administrative expenses £ £
Research & development 1,735,384 2,131,682
Impairment to previously capitalised development spend - 820,110
Operational support 1,317,241 1,008,287
Sales & marketing 1,302,291 1,548,040
Finance & administration 1,468,617 1,209,945
Foreign exchange losses (1,017) 3,850
Total 5,822,516 6,721,914
Tax
The higher tax credit recognised in the current financial year has arisen from
the R&D tax credit claim relating to the innovative development projects
required for the Company's recently launched Digital Workplace Management
Platform.
Loss for the year and net asset position
Losses after tax totalled £5,274,002 (2021: loss of £5,847,195). This
decrease in losses is the result of lower administrative expenses, partly
offset by lower revenues, as well as a higher tax credit in 2022.
Net assets at year end were £3,482,623 (2021: £8,835,936)
Loss per share
The loss per share for the year was 9.19p (2021: loss per share of 10.84p).
The decrease in loss per share reflects the decrease in total comprehensive
loss for the year.
Dividend
No dividend has been proposed for the year ended 30 September 2022 (2021:
£nil).
Cash flow
We are investing in the growth of our operations to address what we believe to
be a significant commercial opportunity and our cash flow from operations was
therefore negative during the year ended 30 September 2022, in line with
expectations.
The Group's costs are mostly operating related, with very little investment
required for capital infrastructure. Cash used by operating activities was
£4,500,771 for the year, compared to cash used of £3,145,093 for the year
ended 30 September 2021, with the increase primarily arising from the lower
level of revenues and lower R&D tax credits received. This operating cash
requirement was funded by cash reserves. The Group ended the year with cash
totalling £2,871,344 (2021: £8,216,198).
Free cash flow for the year was £(5,279,050) (2021: £(3,861,700)). Free cash
flow is defined as net cash flows used in operating activities, plus
development of intangible assets, plus purchase of property, plant and
equipment.
Accounting policies
The Group's financial statements have been prepared in accordance with
international accounting standards in conformity with the requirements of the
Companies Act 2006. The Group's significant accounting policies have been
applied consistently throughout the year.
Principal risks and uncertainties and going concern
As more fully described in note 1 to the financial information, the amounts
and timing of future revenues remain uncertain. If the Group is unable to
secure an appropriate combination of new revenue contracts, cost reductions,
and/or further sources of finance, then it may not have sufficient resources
to meet its liquidity requirements for the foreseeable future. A material
uncertainty exists which may cast significant doubt about its ability to
continue as a going concern.
Other risks and uncertainties are summarised in the Annual Report.
Key performance indicators
As the Group is in the process of developing and commercialising its services,
the Directors consider the key quantitative performance indicators to be sales
revenues of £1,182,956 (2021: £1,741,207) and the level of cash held in the
business of £2,871,344 (2021: £8,216,198). The Board performs regular
reviews of actual results against budget, and management monitors cash
balances on a monthly basis to ensure that the business has sufficient
resources to enact its current strategy. Certain non-financial measures, such
as the number of active customers and deployed DUs, are monitored on a monthly
basis. The Board will continue to review the KPIs used to assess the business
as it grows.
Steve Bennetts
Chief Financial Officer
26 January 2023
Financial information
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2022
2022 2021
Note £ £
REVENUE 2 1,182,956 1,741,207
Cost of sales (844,904) (907,998)
GROSS PROFIT 338,052 833,209
Administrative expenses (5,822,516) (6,721,914)
OPERATING LOSS 3 (5,484,464) (5,888,705)
Finance income 11,408 2,734
Finance expense (23,391) (27,285)
Finance expense - net (11,983) (24,551)
LOSS BEFORE TAX (5,496,447) (5,913,256)
Tax 4 222,445 66,061
LOSS FOR THE YEAR (5,274,002) (5,847,195)
Other comprehensive income/(expense):
Items that may be reclassified to profit or loss:
Foreign currency difference on translation of overseas operations 31,945 (19,314)
TOTAL COMPREHENSIVE EXPENSE FOR THE YEAR (5,242,057) (5,866,509)
LOSS PER ORDINARY SHARE
Basic and diluted 5 (9.19)p (10.84)p
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Share Share Accumulated Total
capital premium losses equity
£ £ £ £
At 1 October 2020 95,284 34,768,349 (29,666,862) 5,196,771
Loss for the year - - (5,847,195) (5,847,195)
Other comprehensive expense for the year - - (19,314) (19,314)
Total comprehensive expense for the year - - (5,866,509) (5,866,509)
Transactions with owners, in their capacity as owners
Issue of shares 19,254 9,444,106 - 9,463,360
Share-based payment charge - - 42,314 42,314
At 30 September 2021 114,538 44,212,455 (35,491,057) 8,835,936
Loss for the year - - (5,274,002) (5,274,002)
Other comprehensive exchange income for the year - - 31,945 31,945
Total comprehensive expense for the year - - (5,242,057) (5,242,057)
Transactions with owners, in their capacity as owners
Issue of shares 832 28,935 - 29,767
Share-based payment credit - - (141,023) (141,023)
At 30 September 2022 115,370 44,241,390 (40,874,137) 3,482,623
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED 30 SEPTEMBER 2022
2022 2021
Note £ £
ASSETS
Non-current assets
Property, plant and equipment 35,249 48,879
Right-of-use assets 559,022 670,814
Intangible assets 7 968,780 897,199
TOTAL NON-CURRENT ASSETS 1,563,051 1,616,892
Current assets
Trade and other receivables 281,866 584,819
Income tax receivable 4 220,117 44,103
Cash and cash equivalents 6 2,871,344 8,216,198
TOTAL CURRENT ASSETS 3,373,327 8,845,120
TOTAL ASSETS 4,936,378 10,462,012
LIABILITIES
Non-current liabilities
Deferred tax (6,494) (8,901)
Lease liabilities (485,622) (604,894)
TOTAL NON-CURRENT LIABILITIES (492,116) (613,795)
Current liabilities
Trade and other payables (842,366) (897,041)
Lease liabilities (119,273) (115,240)
TOTAL CURRENT LIABILITIES (961,639) (1,012,281)
TOTAL LIABILITIES (1,453,755) (1,626,076)
NET ASSETS 3,482,623 8,835,936
EQUITY
Share capital 115,370 114,538
Share premium 44,241,390 44,212,455
Accumulated losses (40,874,137) (35,491,057)
TOTAL EQUITY 3,482,623 8,835,936
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
2022 2021
Note £ £
Cash flows from operating activities
Loss before tax (5,496,447) (5,913,256)
Adjustments for:
Depreciation of property, plant and equipment 27,260 48,413
Depreciation of right-of-use assets 111,792 111,792
Amortisation of intangible assets 7 689,875 933,780
Impairment of intangible assets 7 - 820,110
Loss/(Profit) on disposal of property, plant and equipment 3,485 (359)
Non-cash employee benefits - share-based payments (credit)/expense (141,023) 42,314
Finance income (11,408) (2,734)
Finance expense 23,391 27,285
Operating cash outflow before changes in working capital (4,793,075) (3,932,655)
Decrease in trade and other receivables 302,953 94,827
(Decrease/increase in trade and other payables (54,673) 373,405)
Cash used in operations (4,544,795) (3,464,423)
Income taxes received 44,024 319,330
Net cash outflow from operating activities (4,500,771) (3,145,093)
Cash flows from investing activities
Development of intangible assets (761,456) (678,308)
Purchases of property, plant and equipment (16,823) (38,300)
Proceeds from sale of property, plant and equipment - 363
Finance income 11,408 2,734
Net cash outflow from investing activities (766,871) (713,511)
Cash flows from financing activities
Proceeds from issue of share capital, net of costs 29,767 9,463,360
Principal element of lease payments (115,239) (138,630)
Interest element of lease payments (23,391) -
Employee Benefit Trust - repayment - (23)
Net cash (outflow)/inflow from financing activities (108,863) 9,324,707)
(Decrease)/increase in cash and cash equivalents (5,376,505) 5,466,103
Effect of exchange rate fluctuations on cash held 31,651 (4,179)
Cash and cash equivalents at start of year 8,216,198 2,754,274
Cash and cash equivalents at end of year 6 2,871,344 8,216,198
NOTES TO THE FINANCIAL INFORMATION
FOR THE YEAR ENDED 30 SEPTEMBER 2022
1 Basis of preparation
Actual Experience plc is a public limited company which is listed on the AIM
market of the London Stock Exchange and incorporated and domiciled in the
United Kingdom and incorporated in England. The Company's registered office is
Quay House, The Ambury, Bath, BA1 1UA.
The financial information at pages 9 to 12 is extracted from the Group's
consolidated financial statements for the year ended 30 September 2022, which
were approved by the Board of Directors on 25 January 2023.
The financial information does not constitute statutory accounts within the
meaning of sections 434(3) and 435(3) of the Companies Act 2006 or contain
sufficient information to comply with the disclosure requirements of
UK-adopted international accounting standards and with the requirments of the
Companies Act 2006 as applicable to companies reporting under those standards.
The Group's auditors, PricewaterhouseCoopers LLP, have given an unqualified
audit opinion on the consolidated financial statements for the year ended 30
September 2022. The auditors' report included an emphasis of matter on going
concern which the auditors drew attention to without qualifying their report.
The consolidated financial statements will be filed with the Registrar of
Companies, subject to their approval by the Company's shareholders on Tuesday
28 March 2023 at the Company's Annual General Meeting.
Going concern
As in previous years, the Group and Company have continued to utilise their
cash resources to fund losses while the sales pipeline is being further
developed. The Group's cash balance as at 30 September 2022 was £2.9m (30
September 2021: £8.2m) and further net proceeds of £2.8m were generated from
the October 2022 Placing.
The amounts and timing of future revenues in the Group's budgets remain
uncertain. The Group is experiencing an encouraging level of interest in its
services and it is in active discussions with its channel partners and several
large potential end-customers. The discussions are well progressed and are
expected to result in additional revenue for the Group. However, at presen t a
substantial proportion of the forecast revenue remains uncommitted and if the
Group and Company are unable to secure an appropriate combination of new
revenue contracts and/or cost reductions, then the Group and Company may not
have sufficient resources to meet their liquidity requirements over the
foreseeable future and be unable to continue as a going concern.
Based on the Group's latest "base case" assessment, and in the absence of cost
reductions, the Group and Company is forecast to maintain positive cash
reserves throughout the going concern period, albeit with very limited
headroom for the period October 2023 through to March 2024. In addition, the
Directors have also prepared a severe, but plausible downside scenario, based
on significantly more pessimistic sales forecasts, with corresponding
reductions in controllable costs. In this scenario, the Group and Company is
forecast to run out of cash in January 2024 and as a result, without further
sources of finance being identified and obtained, in such circumstances, the
Group and Company would be unable to continue as a going concern.
Accordingly, a material uncertainty exists which may cast significant doubt
about the Group's and the Company's ability to continue as going concern.
Nevertheless, after making appropriate enquiries and considering the
assumptions and uncertainties described above, the Directors have a reasonable
expectation that the Group and Company will have adequate resources to
continue operating at least until January 2024. The Directors are regularly
reviewing the Group and Company's sales projections and, if deemed necessary,
will complete a study of the Group's strategic options at the appropriate
time. Therefore, the Directors continue to adopt the going concern basis in
preparing the financial statements.
The financial statements do not include any of the adjustments that would be
required if the Group or Company were unable to continue as a going concern.
2 Revenue
The information that is presented to the Chief Executive Officer (CEO), who is
considered to be the Chief Operating Decision-Maker (CODM), for the purposes
of resource allocation and assessment of performance, is based wholly on the
overall activities of the Group. Due to the current size and activities of the
Group, there is a high degree of centralisation of activities. The Directors
therefore consider that there is one operating, and hence one reportable,
segment for the purposes of presenting information under IFRS 8; that of Human
Experience Management (HXM) Services. There are no differences between the
segment results and the Consolidated Statement of Comprehensive Income. The
assets and liabilities information presented to the CODM is consistent with
the Consolidated Statement of Financial Position.
During the year ended 30 September 2022 the Group had two customers who
generated more than 10% of total revenue. These customers generated 50% and
47% of revenue respectively.
During the year ended 30 September 2021 the Group had two customers who
generated more than 10% of total revenue. These customers generated 79% and
20% of revenue respectively.
An analysis of revenues by geographic location of customers is set out below:
2022 2021
£ £
United Kingdom 627,300 387,212
United States of America 555,656 1,353,995
1,182,956 1,741,207
3 Operating loss
2022 2021
£ £
Loss from operations is stated after charging/(crediting):
Depreciation on property, plant and equipment 27,260 48,413
Depreciation of right-of-use assets 111,792 111,792
Amortisation of intangible assets 689,875 933,780
Employee costs 4,082,186 3,948,871
Foreign exchange (profits)losses (1,017) 3,850
Impairment charge - 820,110
4 Tax
Tax on loss
2022 2021
£ £
Current tax:
UK corporation tax on losses of the year (220,117) (63,705)
Overseas taxes 79 (4,178)
Deferred tax:
Origination and reversal of timing differences (2,407) 1,822
Total tax credit (222,445) (66,061)
Factors affecting the current tax credits
The tax assessed for the year varies from the standard UK company rate of
corporation tax as explained below:
2022 2021
£ £
Loss before tax (5,496,447) (5,913,256)
Tax at the UK corporate tax rate of 19% (2021: 19%) (1,044,325) (1,123,519)
Effects of:
(Income)/expenses not deductible for tax purposes 124,737 189,985
Unrecognised deferred tax asset on losses 773,509 897,765
Research and development enhancement in respect of the current year (76,366) (864)
Prior year adjustment - (19,602)
Employee share acquisition adjustment - (9,826)
Tax credit for the year (222,445) (66,061)
The Group has tax losses carried forward of approximately £43,450,000 (2021:
£39,474,000).
The Group has incurred qualifying expenditure on research and development
projects which has given rise to tax credits due from HM Revenue and Customs.
At 30 September 2022, the amount due from HMRC was £220,117 (2021: £44,103).
5 Loss per ordinary share
Basic loss per share is calculated by dividing the loss attributable to the
owners of the parent by the weighted average number of ordinary shares in
issue during the year. Diluted loss per share is calculated by adjusting the
weighted average number of ordinary shares in issue during the year to assume
conversion of all dilutive potential ordinary shares. The Company has one
class of potentially dilutive ordinary shares, being those share options
granted to employees where the exercise price is less than the average market
price of the Company's ordinary shares during the year. However, due to losses
incurred in both the current and previous financial year, there is no dilutive
effect from the potential exercise of these dilutive shares.
2022 2021
£ £
Total loss attributable to the equity holders of the parent (5,274,002) (5,847,195)
No. No.
Weighted average number of ordinary shares in issue during the year 57,400,891 53,911,253
Loss per share
Basic and diluted on loss for the year (9.19)p (10.84)p
6 Cash and cash equivalents
2022 2021
Bank credit rating: £ £
A+ 811,068 -
A 2,060,276 5,215,643
A- - 3,000,555
Cash and cash equivalents 2,871,344 8,216,198
The above gives an analysis of the credit rating of the financial institutions
where cash balances are held.
All of the Group's cash and cash equivalents at 30 September 2022 are held in
instant access current accounts or short-term deposit accounts. Balances are
denominated in UK sterling (£) and US dollars ($) as follows:
2022 2021
£ £
Denominated in UK sterling 2,786,716 7,161,566
Denominated in US dollars 84,628 1,054,632
Cash and cash equivalents 2,871,344 8,216,198
The Directors consider that the carrying value of cash and cash equivalents
approximates to their fair value.
7 Intangible assets
Development costs
£
Cost
At 1 October 2020 5,440,883
Additions 678,308
At 30 September 2021 6,119,191
Additions 761,456
At 30 September 2022 6,880,647
Accumulated amortisation and impairment losses
At 1 October 2020 3,468,102
Charge for the year 933,780
Impairment charge 820,110
At 30 September 2021 5,221,992
Charge for the year 689,875
On disposals -
At 30 September 2022 5,911,867
Net book value
At 30 September 2022 968,780
At 30 September 2021 897,199
Amortisation and impairment charge
The amortisation of development costs is recognised within administrative
expenses in the Consolidated Statement of Comprehensive Income. The Directors
have reviewed the carrying value of the development costs at 30 September 2022
and have decided that no impairment charges are necessary for the current year
(2021: impairment charge of £820,110).
8 Annual Report and Financial Statements
The Company's Annual Report and Financial Statements for the year ended 30
September 2022, together with a notice convening the Company's Annual General
Meeting, will be posted to shareholders in due course.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR BIGDBIXDDGXLRecent news on Actual Experience
See all newsREG - AIM Actual Experience - Cancellation - Actual Experience plc
AnnouncementREG - FTSE Russell Actual Experience - Actual Experience
AnnouncementREG - Actual Experience - Appointment of Administrators
AnnouncementREG - AIM Actual Experience - Suspension - Actual Experience plc
AnnouncementREG - Actual Experience - Intention to Appoint Administrators & Suspension
Announcement