REG-Acuity RM Group Plc: Half-year Report
16/09/2024 07:15
This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.
16 September 2024
Acuity RM Group plc
('ACRM' or the 'Company’ or the “Group”)
Interim Results to 30 June 2024
Acuity RM Group plc (AIM:ACRM), which owns Acuity Risk Management Limited
(“Acuity”), today releases the interim results for the six months ended 30
June 2024 (“H1 2024” or the “Period”).
Highlights for the Group for the Period:
• Revenues: £1.0m (H1 2023 actual for six months:
£0.9m) (£0.347m from the date of acquisition)
• Cash balance: £1.86m (31 December 2023: £0.1m)
• New orders: up 21% to £0.733m (30 June 2023:
£0.608m)
• Sales pipeline: £7.9m (30 June 2023: £4.4m)
• Partners: c.25 per cent. of the pipeline is partner
sourced. New partners appointed include BSI Group UK, and Sopra Steria.
Acuity now has 15 active partners in North America, the United Kingdom and
Europe
• New product: STORM, counter terrorism risk
management software has been launched
• Board changes: Kate Buchan was appointed to the
board as Finance Director
Angus Forrest, Chairman, commented: “The business has made progress over the
past six months as evidenced by the increase in revenues and value of new
orders compared with 2023. Acuity’s management is ambitious and has been
taking steps to accelerate the rate of growth which is being supported by the
successful fundraise completed in June.”
For further information please contact:
Acuity RM Group plc https://www.acuityrmgroup.com
Angus Forrest +44 (0) 20 3582 0566
Zeus Capital Limited (NOMAD & Broker) https://www.zeuscapital.co.uk
Mike Coe / Sarah Mather +44 (0) 20 3829 5000
Peterhouse Capital (Joint broker)
Lucy Williams / Duncan Vasey +44 (0) 20 7469 0936
Clear Capital (Joint broker)
Bob Roberts +44 (0) 20 3869 6080
Note to Editors
Acuity RM Group plc
Acuity RM Group plc (AIM: ACRM), is an established provider of risk management
services. Its award-winning STREAM® software platform collects and analyses
data about organisations to improve business decisions and management. It is
used by around 70 organisations in markets including government, utilities,
defence, broadcasting, manufacturing and healthcare.
The Company is focused on delivering long term, sustainable growth in
shareholder value. In the short to medium term this is expected to come from
organic growth and thereafter may also come from complementary acquisitions.
Chairman’s statement
I am pleased to present the results of Acuity RM Group plc for the six month
period ended 30 June 2024.
The Group has continued to make good progress in the Period, winning new
business, securing new partners and developing the Group’s infrastructure
and capability. In June 2024 the Company completed a fundraising to raise
gross proceeds of c. £1.0m to fund an acceleration in the development of the
business. This fundraise has strengthened the Group’s cash position which
as at 30 June 2024 was £1.86m (31 December 2023: £0.1m).
The Company's strategic aim remains unchanged, being to increase revenues,
particularly recurring revenues, to generate cash and profits and so drive
shareholder value.
Financial overview
For the Period the Group reported revenue of £1.0m, an operating loss of
£634k and a loss after tax of £590k.
In the Period, whilst the Group won orders valued at over £733k (H1 2023:
£608k), it is disappointing that there were few new large orders to announce
because the larger opportunities have been complex and are taking longer to
convert. Importantly, annual recurring revenue continues to build and was
£900k for the half year to 30 June 2024 (6 months to June 2023: £806k).
Total forward contracted revenues as at 30 June 2024 stood at £3.107m (31
December 2023: £2.900m).
The sales pipeline as at 30 June 24 was £7.9m (£4.4m 30 June 2023).
As referenced above, in June 2024, the Company successfully raised £1.0m
(before expenses) from new and existing Shareholders. The Board is pleased to
have received support from its shareholders as well as having a number of new
institutional shareholders invest in the group alongside the executive
directors.
Operational overview
During the Period, the Group has strengthened the marketing team and launched
a campaign to enhance the Group’s position as a leading risk management
company in the governance risk and compliance (“GRC”) market. The
initiative aims to better communicate the value of the Group’s offerings
with changing market needs.
The Group has expanded its sales structure during the Period by recruiting
experienced senior business development managers with a background in the GRC
market. Additionally, the Group has recruited new partners to help increase
sales in the UK, North America and Europe.
The Group’s award-winning STREAM® is a GRC software platform, which
analyses data about organisations to improve business decisions and
management. It is used by organisations including government, utilities,
defence, broadcasting, manufacturing and healthcare. Most customers use it for
managing cybersecurity and IT risks and for compliance with ISO 27001 and
other standards and regulations. STREAM® is sold on a SaaS or private cloud
delivery (on-premise) basis, typically with a three year licence, invoiced
annually in advance. Sales are made direct through the Company's own sales
team and via a growing network of partners in the UK, the US and Europe. The
Group is working on a major redevelopment of STREAM® to enhance the
product’s technical abilities and user experience.
In April 2024, the Group launched a new product, STORM. STORM is designed to
address the emerging market for managing risk assessment at venues and public
events, particularly those with a capacity of 800 or more. The Directors
believe there is a significant opportunity for this product, as anticipated
legislative requirements should drive demand, making STORM a crucial addition
to the Group’s portfolio.
Board
Kate Buchan, who joined the Company at the end of November 2023, has been
appointed to the boards of the Company and Acuity as Finance Director. Kate
has over 25 years of experience as a chartered accountant, having worked in
head office finance functions for Lloyds Banking Group and Credit Suisse.
Outlook
There is much work to do to enable the Company to achieve its targets and
potential. The Board is implementing programmes to improve (1) marketing and
sales ability to seize upcoming growth opportunities and (2) the products to
broaden and strengthen their appeal. Looking forward, the Board is confident
that its initiatives will deliver benefits and drive growth. I would like to
thank the shareholders, the staff, my colleagues on the Board and the
Company’s advisers for their continuing support.
Angus Forrest
Chairman
Condensed consolidated statement of comprehensive income
For the 6 months ended 30 June 2024
Notes Unaudited 6 months to 30 June 2024 Unaudited 6 months to 30 June 2023 1 Audited 12 months to December 1 2023
£’000 £’000 £’000
Revenue 5 1,049 347 1,366
Cost of sales (103) (33) (112)
Gross profit 946 314 1,254
Administrative expenses (1,533) (649) (2,167)
Operating loss (586) (335) (913)
Finance - net expense (11) (1) (19)
Loss on investments (36) (73) (66)
Share based payments expense - 25 (61)
Exceptional Costs - - (282)
Loss for the period before taxation (634) (384) (1,341)
Tax 44 - -
Loss for the period after taxation (590) (384) (1,341)
Basic and diluted (loss) per share from loss for the period 4 (0.48)p (0.55)p (1.39)p
1 The comparatives include the results of the subsidiary, Acuity Risk
Management Limited, from date of acquisition, 25 April 2023.
Condensed consolidated statement of financial position
For the 6 months ended 30 June 2024
Notes Unaudited 6 months to 30 June 2024 Unaudited 6 months to 30 June 2023 Audited 12 months to December 2023
£’000 £’000 £’000
Non current assets
Intangible assets 5,315 6,204 5,387
Tangible assets 6 10 10 8
Investments at fair value through profit or loss 8 207 232 244
Total non current assets 5,532 6,446 5,639
Current assets
Trade and other receivables 324 678 1,255
Cash and cash equivalents 1,855 493 100
Total current assets 2,179 1,171 1,355
Total assets 7,711 7,617 6,994
Current and long term liabilities
Trade, other payables and loans 858 568 876
Deferred income 2,403 1,406 2,030
Total liabilities 3,261 1,974 2,906
Net assets 4,450 5,643 4,088
Equity
Share capital 7 2,796 2,767 2,767
Share premium 13,370 12,269 12,447
Share based payment reserve 112 67 112
Merger reserve 1,012 1,833 1,012
Retained earnings (12,840) (11,293) (12,250)
Total Equity 4,450 5,643 4,088
Condensed consolidated statement of changes in equity
For the 6 months ended 30 June 2024
Share capital Share premium Share based payments reserve Merger Reserve Retained Earnings Total Equity
£’000 £’000 £’000 £’000 £’000 £’000
Balance at 1 January 2023 2,688 8,385 51 1,012 (10,909) 1,227
Loss for the year - - - - (1,341) (1,341)
Other comprehensive income – issue of broker warrants - - 61 - - 61
Total comprehensive expense for the year - - 61 - (1,341) (1,280)
Contributions by and distributions to owners
Issue of shares net of transaction costs 79 4,062 - - - 4,141
Total contributions by and distributions to owners 79 4,062 - - - 4,141
Balance at 31 December 2023 2,767 12,447 112 1,012 (12,250) 4,088
Loss for the year - - - - (590) (590)
Issue of shares net of transaction costs 29 923 - - - 952
Balance at 30 June 2024 2,796 13,370 112 1,012 (12,840) 4,450
Condensed consolidated statement of cash flows
For the 6 months ended 30 June 2024
Unaudited 6 months to 30 June 2024 Unaudited 6 months to 30 June 2023 Audited 12 months to December 2023
£’000 £’000 £’000
Cashflows from operating activities
(Loss) before taxation (634) (384) (1,341)
Adjustments for:
Depreciation and amortisation 81 63 137
Fair value adjustments for listed investments 37 73 61
Share based payments - (25) 61
R&D tax rebate received 44 - -
Decrease/(Increase) in trade and other receivables 932 (544) (823)
Increase in trade and other payables 355 2,059 898
Subsidiary working capital movement on acquisition - (1,849) -
Net cash used in operating activities 815 (607) (1,007)
Cashflows from investing activities
Purchase of tangible fixed assets (5) - (3)
Additions to intangible fixed assets (6) - -
Purchase of investments in subsidiaries, net of cash acquired - - (500)
Cash acquired on acquisition - - 331
Net cash flows from investing activity (11) - (172)
Cash flows from financing activities
Cash raised through issue of shares (net of transaction costs) 951 878 1,057
Net cash flow from financing activity 951 878 1,057
Net increase/(decrease) in cash and cash equivalents 1,755 271 (122)
Cash and cash equivalents at beginning of financial year 100 222 222
Cash and cash equivalents at the end of financial year 1,855 493 100
1. General information
Acuity RM Group plc (previously Drumz plc) is a company incorporated and
domiciled in the United Kingdom. The Company is a public limited company,
which is listed on AIM of the London Stock Exchange, incorporated and
domiciled in England and Wales. The address of the registered office is 2nd
Floor, 80 Cheapside, London EC2V 6EE. The condensed consolidated interim
financial report was approved for issue by the Board of Directors on 16
September 2024.
The Company successfully completed the acquisition of Acuity Risk Management
Limited (“Acuity RM”), in which it previously held a 25% investment, on 25
April 2023 and changed its name to Acuity RM Group plc.
The principal activity of the Group is the provision of risk management
software, STREAM® and related services.
The financial information set out in this interim financial report does not
constitute statutory accounts as defined in Sections 434(3) and 435(3) of the
Companies Act 2006. The Company’s statutory financial statements for the
year ended 31 December 2023 have been filed with the Registrar of Companies
and are available at www.acuityrmgroup.com. The auditor’s report on those
financial statements was unqualified and did not contain any statement under
Section 498(2) or Section 498(3) of the Companies Act 2006.
2. Basis of preparation
The condensed consolidated interim financial report has been prepared in
accordance with the requirements of the AIM Rules for Companies using
accounting polices expected to be adopted for the year ending 31 December
2024.
As permitted, the Company has chosen not to adopt IAS 34 “Interim
Financial Statements” in preparing this interim financial information. The
condensed consolidated interim financial statements should be read in
conjunction with the annual financial statements for the year ended 31
December 2023. The interim financial statements have been prepared in
accordance with International Financial Reporting Standards as adopted by the
United Kingdom. (“UK adopted IFRS”) and those parts of the Companies Act
2006 applicable to companies reporting in accordance with UK adopted IFRS.
The comparative figures for the financial year ended 31 December 2023 set out
in these interim statements are not the Group’s statutory accounts for that
financial year. Those accounts have been reported on by the Company’s
auditors and delivered to the Registrar of Companies. The report of the
auditors was (i) unqualified, (ii) did not include a reference to any matters
to which the auditor drew attention by way of emphasis without qualifying
their report, and (iii) did not contain a statement under section 498 (2) or
(3) of the Companies Act 2006.
Going concern
The Directors, having made appropriate enquiries, consider that adequate
resources exist for the Company and Group to continue in operational existence
for the foreseeable future and that, therefore, it is appropriate to adopt the
going concern basis in preparing the condensed consolidated interim financial
statements for the period ended 30 June 2024.
Risks and uncertainties
The Board continuously assesses and monitors the key risks of the business.
The key risks that could affect the Group’s medium-term performance and the
factors that mitigate those risks have not substantially changed from those
set out in the Company’s 2023 Annual Report and Financial Statements, a copy
of which is available on the Company’s website: www.acuityrmgroup.com.
Critical accounting estimates
The preparation of condensed consolidated interim financial report requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities at the end of the reporting period. Significant
items subject to such estimates are set out in the Company’s 2023 Annual
Report and Financial Statements. The nature and amounts of such estimates have
not changed significantly during the interim period.
3. Accounting policies
Except as described below, the same accounting policies, presentation and
methods of computation have been followed in these condensed consolidated
interim financial statements as were applied in the preparation of the
Group’s annual financial statements for the year ended 31 December 2023.
3.1 Changes in accounting policy and disclosures
(a) Accounting developments during 2024
The International Accounting Standards Board (IASB) issued various amendments
and revisions to International Financial Reporting Standards and IFRIC
interpretations. The amendments and revisions were applicable for the period
ended 30 June 2024 but did not result in any material changes to the financial
statements of the Group or Company.
Standard Impact on initial application Effective date
IAS 1 Non-current liabilities with covenants 1 January 2024
IAS 1 Classification of Liabilities as Current or Non-Current. 1 January 2024
IFRS 16 Lease liability in a sale and leaseback 1 January 2024
IAS 7 and IFRS 7 Supplier finance arrangements 1 January 2024
IAS 21 Lack of exchangeability 1 January 2024
(b) New standards, amendments and interpretations in issue but not yet
effective or not yet endorsed and not early adopted
The Group is evaluating the impact of the new and amended standards above
which are not expected to have a material impact on the Group’s results or
shareholders’ funds.
4. Loss per ordinary share
The loss per ordinary share is based on the weighted average number of
ordinary shares in issue during the period of 123,461,493 ordinary shares of
0.1p (2023: 70,042,357 ordinary shares of 0.1p). (2023 was adjusted for share
reorganisation 24 April 2023).
Unaudited 6 months to 30 June 2024 Unaudited 6 months to 30 June 2023 Audited year to 31 December 2023
Loss attributable to equity shareholders £’000 (590) (384) (1,341)
Loss per ordinary share (0.48)p (0.55)p (1.39)p
There was a consolidation and subdivision of the ordinary shares of 0.1p on 24
April 2023 following that exercise the number of shares was reduced on the
basis of 1 for 10. All share numbers and loss per share have been adjusted
to reflect the change.
Diluted loss per share is taken as equal to basic loss per share as the
Company’s average share price during the period is lower than the exercise
price and therefore the effect of including share options is anti-dilutive.
5. Revenue and segmental analysis
The following is an analysis of the Group’s revenue for the period from
continuing operations:
Unaudited 6 months to 30 June 2024 Unaudited 6 months to 30 June 2023 1 Audited year to 31 December 2023 1
£’000 £’000 £’000
Fees and Income from investee companies - 20 15
Provision of software licences and services consisting of: 1,049 327 1,351
Revenue from subscriptions 900 299 1,114
Revenue from services 149 28 237
1 The comparatives include the subsidiary, Acuity Risk Management Limited,
from date of acquisition, 25 April 2023.
6. Intangible Assets
Software development Other Intangibles Goodwill Acquired on acquisition Total
£’000 £’000 £’000 £’000
Cost or valuation
B/f at 1 January 2024 670 264 5,154 6,088
Additions 6 - - 6
Asset reclass 1 - (264) - (264)
C/f at 30 June 2024 676 - 5,154 5,830
Accumulated amortisation
B/f at 1 January 2024 437 264 - 701
Charge for period 78 - - 78
Asset re-class 1 - (264) - (264)
C/f at 30 June 2024 515 - - 515
Net book value as 30 June 2024 161 - 5,154 5,315
Net book value as 30 June 2023 353 22 5,829 6,204
Net book value as 31 December 2023 233 - 5,154 5,387
1 Asset re-class relates to intangible assets which were fully amortised at 31
December 2023, (net book value was zero), and are no longer in use. The cost
and the accumulated depreciation have been netted down.
7. Share Capital
At the 30 June 2024 the Company’s share capital was as follows:
Allotted, issued and fully paid Number Value £
Ordinary shares of 0.1p each 150,128,159 150,128
Deferred share of 0.1p each 2,645,945,765 2,645,946
Total 2,796,084
As at 31 December 2023 the number of ordinary shares was 121,556,731. On 17
June 2024 the Company issued 28,571,428 ordinary 0.1p shares at a price of
3.5p each raising an additional £1.0m gross of costs.
The value of the deferred shares shown in note 7 is nominal, they are
effectively valueless following the approval by Ordinary and Deferred
shareholders of resolutions to adopt new articles of association in November
2022.
8. Investment
The Company acquired its legacy investment in KCR Residential REIT plc
(“KCR”) at a price of £0.70 per share in 2018. KCR is an AIM listed real
estate investment trust focused on the residential property market. The
investment was classed as fair value through profit and loss in accordance
with IFRS 9. The share price at 30 June 2024 was £0.09 per share and the
closing value at 30 June 2024 was £207,205. (31 December 2023: £243,571 and
30 June 2023: £232,000). The investment was valued downwards at 30 June 2024
by £36,366 in accordance with IFRS 13.
As KCR is an AIM listed company, it is measured under level 1 of the fair
value hierarchy in accordance with IFRS 13:
- Level 1: quoted prices in an active market for identical
assets or liabilities. The fair value of financial instruments traded in
active markets is based on quoted market prices at the balance sheet date. A
market is regarded as active if quoted prices are readily and regularly
available and those prices represent actual and regularly occurring market
transactions on an arm’s-length basis. The quoted market price used for
financial assets held by the Group is the closing price on the last day of the
financial year of the Group. These instruments are included in level 1 and
comprise FTSE and AIM-listed investments classified as held at fair value
through profit or loss.
All assets held at fair value through profit or loss were designated as such
upon initial recognition.
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