REG - Byotrol PLC - Interim Results and Investor Presentation
08/12/2021 07:00
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RNS Number : 8990U Byotrol PLC 08 December 2021
8 December 2021
Byotrol Plc
("Byotrol" or the "Group")
Interim results and Notice of Investor Presentation
Byotrol Plc (AIM: BYOT), the specialist infection prevention and control
company, is pleased to announce today its unaudited interim results for the
six months ended 30 September 2021.
Highlights
Performance in the first six months showed substantial and ongoing
improvements compared to our performance pre-Covid, but was below management
expectations for the period, matching the experience of other companies in our
markets and reflecting slower than expected and overstocked markets post the
peak of the pandemic demand.
· Sales £3.2m (versus an exceptional Covid-driven £6.7m in
6m to 30 September 2020, and £2.1m* in the 6 months to 30 September 2019)
· Gross profit £1.66m (v.£2.91m and £0.91m respectively)
· Adjusted EBITDA** £0.17m (versus £1.29m and £0.34m loss
respectively)
· Cash of £1.9m at period end
Strategic initiatives progressing well:
· Sale of Byotrol24 in the Americas for gross cash of $1.4m
over two years, plus three years of ongoing royalty and potentially
significant extra payments to be made to Byotrol contingent on the purchaser's
future revenues.
· Solvay continues with its global launch of Actizone 24
hours surface sanitiser and has now received US EPA approval for long-lasting
germ kill claims. This is a highly significant step and opens up global supply
opportunities for Solvay, from which Byotrol will benefit through its ongoing
commission arrangements
· Nearing completion of the academic programme into the mode
of action behind brown seaweed's potency as an antiviral technology. The
potential for this technology continues to be exciting for the Group.
During the year we have been making substantial investment in the team,
including:
· new leadership of the Professional sales, marketing and
business development functions, with two key hires, both with considerable
experience in our core markets
· imminent appointment for the first time of a full-time CFO
to the Board.
Outlook
Whilst this pandemic is far from over, we find ourselves in a much better
position than we were in late 2019. We have an increasingly integrated,
profitable, IP-rich and cash generative business in a much expanded market
with enhanced annualised growth. Accordingly, the Board remains highly
confident in medium and long-term growth and, with the benefit of a stronger
balance sheet and contractual cash flows from prior IP sales or licenses, is
investing further in the team to deliver it, particularly at leadership level
in sales and marketing.
After a challenging H1, particularly in hand hygiene products, sales in
October and November have been ahead of the average for H1 and the order book
is now building strongly, sitting currently at £850k versus an average of
£300k in H1 and approximately £350k pre-Covid. Notably this demand includes
a number of sizable orders from new customers in both the UK and overseas.
Market demand and gross margin, however, is likely to remain volatile in the
short term and is subject to a potential negative impact of full and partial
lockdowns on the demand for consumables. This is especially so at the current
time with the current uncertainty introduced by the new Omicron variant of
Covid.
Third party interest in our IP and related commercialisation remains strong,
with a number of active client discussions under way. Such agreements can be
profitable, but we cannot say with certainty which agreements will close and
when. We anticipate our first material royalty income in the current financial
year.
Whilst we expect to be both profitable and cash generative in the second half
of the year, with these uncertainties it is difficult to predict the quantum
at this juncture. At present we are expecting IP sales to offset the
majority of the anticipated shortfall in profit on product sale, but
projecting the timing of IP sales is even more uncertain, so we feel it
prudent to now reduce market guidance for the current financial year.
Regardless of the timing of our revenues and IP commercialisations over the
next four months we remain very well positioned for future growth and are
excited by the significant opportunities ahead of us.
Investor Presentation
David Traynor, CEO, and Nic Hellyer, CFO will provide a live presentation
relating to these results via the Investor Meet Company platform on 8th Dec
2021 at 2:30pm GMT.
The presentation is open to all existing and potential shareholders. Questions
can be submitted at any time during the live presentation.
Investors can sign up to Investor Meet Company for free and add to
meet BYOTROL PLC via:
https://www.investormeetcompany.com/byotrol-plc/register-investor
(https://www.investormeetcompany.com/byotrol-plc/register-investor)
Investors who already follow BYOTROL PLC on the Investor Meet Company
platform will automatically be invited.
John Langlands, non-executive Chairman of Byotrol commented:
"The Group remains substantially ahead of the pre-Covid period in sales and
profits and we expect that performance to endure.
The team is working hard to consolidate and increase the underlying growth,
and also to address the short-term challenges in market conditions. We
continue to see multiple opportunities for growth in the medium term and are
investing confidently to deliver medium and long-term returns."
For further information contact:
Byotrol Plc
David Traynor, Chief Executive +44 (0)1925 742 000
Nic Hellyer, Chief Financial Officer
finnCap Limited (Nominated Adviser and Broker) +44 (0)20 7220 0500
Geoff Nash/Kate Bannatyne - Corporate Finance
Richard Chambers - ECM
Flagstaff Strategic and Investor Communications +44 (0)20 7129 1474
Tim Thompson/Andrea Seymour/Fergus Mellon byotrol@flagstaffcomms.com (mailto:byotrol@flagstaffcomms.com)
This announcement is released by Byotrol Plc and, prior to publication, the
information contained herein was deemed to constitute inside information under
the Market Abuse Regulations (EU) No. 596/2014. Such information is disclosed
in accordance with the Company's obligations under Article 17 of MAR. The
person who arranged for the release of this announcement on behalf of Byotrol
Plc was Nic Hellyer, CFO.
* Comparative figures for H1 2020 restated for closure of US business
** Adjusted EBITDA is defined as Earnings before Interest, Tax, Depreciation
and Amortisation and exceptional items, share-based payments, non-trading
items such as profit or loss on disposal of assets, plus revenue recognised as
interest under IFRS 15
Notes to editors
Byotrol plc (BYOT.L), quoted on AIM, is a specialist infection prevention and
control company, operating globally in the Healthcare, Industrial, Food and
Consumer sectors, providing low toxicity products with a broad-based and
targeted efficacy across all microbial classes; bacteria, viruses (including
coronavirus), fungi, moulds, mycobacteria and algae.
Byotrol's products can be used stand-alone or as ingredients within existing
products, where they can significantly improve their performance, especially
in personal hygiene, domestic and industrial disinfection, odour control, food
production and food management.
Byotrol develops and commercialises technologies that create easier, safer and
cleaner lives for everyone.
For more information, go to byotrol.co.uk
Chief Executive's report and financial review
The first six months of this financial year have followed the pattern expected
by management since last year end, with improvement in all financial
indicators compared to pre-Covid, but below the extraordinary results during
the peak of the pandemic, and indeed a little below management expectations,
particularly in product sales and especially in hand hygiene products.
Most market participants have been projecting sales growth in infection
control at around 10% across the recent cycle (compared to the 5% normally
quoted pre-Covid), which we have exceeded in our own results compared to the
first half of our 2020 financial year, and low double digit earnings growth,
which we have also exceeded substantially.
In line with our strategy, we continued to make progress on the IP side of our
business. Larger customers look to us to provide them with future-proofed
technologies with the correct regulatory support via licenses or outright
sales. This is very solid business once secured, building a long-term cash
flow stream, but it is also lumpy revenue-wise and can lead to volatile
profitability. Pre pandemic we invested into increasing product sales via the
acquisition of Medimark, but Covid has had the perverse effect of making
that side of the business volatile too, at least as the current market
conditions persist.
That said, we remain very confident in our positioning and in market recovery
and have used the extra resources created during the previous financial year
to invest in the business:
· in the team, especially in sales, marketing and business
development. We have invested in new, market-proven leadership in 4 of the 6
operating board positions, including
o 2 senior sales and marketing professionals with prior national leadership
positions at Diversey and Gojo, and at Zoono respectively
o a new, full-time CFO;
· in R&D, we have restructured our technical team to
concentrate on innovation rather than testing, to take advantage of the myriad
of new opportunities available to us, particularly in the fields of virology
and sustainable and natural antimicrobial technologies; and
· in systems, especially in integrating the management, HR
and supply chain systems of the Group
Many of these incremental costs have been offset through a restructuring in
the period, which we estimate will result in an exceptional charge of c.
£0.2m. Net of this, the investment will result in an increase of c.10% in
annualised full year cash costs, which will start paying back in mid/late
calendar 2022 as the resulting operational efficiencies feed through.
The new team is now working on a more focussed strategy, where we can get the
best return for our sales and marketing spend. Byotrol has traditionally (and
by necessity given its historical resource constraints) offered its
technologies into many different market segments with many different
commercials, sold on the basis of its outstanding product performance. This
has kept the business growing satisfactorily, but we must now become masters
in fewer, discrete segments, talking to clients knowledgably about their
businesses and solving their problems where we can. This is a natural and
correct evolution of the business and will not result in withdrawing from any
current activities, but it will likely mean a shift in how we position
ourselves publicly. It should also allow us to deliver a higher net margin as
we develop a much more targeted and client focused approach.
Results by segment
Professional
H1 revenues decreased to £2.61m from £5.66m, including £0.75m of royalty
and licensing revenue compared to £0.59m in the comparable period. Gross
profit on product sales (excluding license revenue) decreased to £0.70m from
£1.86m.
As reported in September the first half of the year has been a challenge for
product sales due to unexpectedly extended lockdowns and office closures and
by too much product in our markets chasing too little business consumption.
Brexit has not helped either, increasing the amount of administration required
to sell our product into the EU and the UK government decision to move away
from much of the EU regulatory regime on chemicals. We are now, for instance,
increasingly having to re-do regulatory approvals for the UK, based on a new,
slightly different to expectations, regime. The good news is that supply
chains seem to have stabilised now, and we are now finally starting to reap
some benefits from combining the supply chain effort of Byotrol and Medimark.
Product mix remained broadly consistent with previous comparable periods,
although hand hygiene sales have been some way behind expectations due to
overstocking and heavy price discounting by alcohol-based hand sanitiser
producers. Of the Professional segments, facilities management and
environmental (laboratory supplies) has been much weaker than expected, but
human and animal health has been steady, with the latter picking up rapidly as
veterinary practices re-open.
Consumer
H1 revenues decreased to £0.56m from £0.98m, all of which were product
sales. Gross profit on products decreased consequently to £0.20m from
£0.45m.
Given the recent history of the Group, we remain substantially underinvested
in consumer product sales and are now taking steps to address this,
particularly as we see increasing sales of our anti-viral alcohol-free hand
sanitiser sales into Boots. Recent new hires into the Byotrol leadership team
should help here.
Intellectual Property Sales and Licensing
We continue to make progress in monetizing our IP. Of the current activities
in place, the three most notable progressions are:
· Solvay has now launched Actizone globally, the long-lasting
antimicrobial surface sanitiser that Byotrol co-developed and that will pay
Byotrol an ongoing commission on all Solvay sales. We are aware of two global
company clients of Solvay and two regional companies already launching 24 hour
germ kill products into consumer and business markets and are still expecting
to report our first sales-based income from this relationship in FY22. Very
excitingly, we understand that Solvay has now achieved US EPA approval for
long lasting germ kill sanitisers, thus opening up the important US domestic
market; we anticipate sizeable demand from global customers seeking global
supply chains.
· On 30 September we agreed to convert the existing US
license agreement on Byotrol24 with Integrated Resources Inc (IRI) into a sale
of the formulation in the Americas to IRI, with payments over 2 years. The
agreement secured cash payments to Byotrol amounting to US$1.4m in total, with
a residual royalty to Byotrol being paid over 3 years, which will ratchet-up
further in the event of IRI re-selling the formulation within two years.
Simultaneous with this sale, Byotrol entered into a preliminary three-way
agreement with IRI and a significant US distribution company ("USCo") to
register with EPA and then sell the Formulation into US Professional markets.
Should formal registration be achieved, sales by IRI to USCo will accrue
further additional royalties to Byotrol.
· Our development programme looking into the anti-viral
properties of brown seaweed is now confirming and formalising the
extraordinary anti-viral properties seen in preliminary in-house testing. We
are also now coming to a data-supported conclusion on the mode of action
underlying the performance - which we believe will add value to the technology
platform. The commercialization effort on seaweed has now commenced.
Balance sheet
Our balance sheet continues to be strong, with cash at the period end of
£1.9m and a healthy balance of receivables from IP sales and licenses
providing regular short and medium term cash flows. Our stock position, which
was at a high point at the 2021 year end of £1.1m, has now reduced to a more
normal £0.7m. Additions to capitalised development costs in the period
reflect the Group's usual investment in regulatory and other IP as well as
largely one-off expenditure on the Group's patent portfolio.
Outlook
As we expected mid-pandemic, sales are now settling at a significantly
higher rate than pre-Covid. This underlying growth has been hidden slightly by
unusually high overstocking, especially in hand sanitisers, one-off market
factors such as Brexit and the resultant pricing pressures in the first half
of the year, but this challenge does now seem to be unwinding and our order
book has more than doubled since period end.
IP sales and activity remains very strong, and incoming levels of enquiry
remain high.
We have been busy investing our resources in an upgraded team, with track
records of developing new business streams and growing sales generally and
this is leading to significantly higher annualised projected annual cost base
compared to pre-Covid, before supporting spend on items such as market
research and marketing. This is the right thing to do to maximise shareholder
returns over the medium term and we are highly confident that payback will
accrue in the new financial year, if not earlier. The long-term outlook for
your company remains excellent.
David Traynor
Chief Executive
Group statement of comprehensive income
6 months to 6 months to Year to
30 September 2021 30 September 2020 31 March
2021
Note £'000 £'000 £'000
(unaudited) (unaudited, restated) (audited)
Revenue 2 3,173 6,657 11,214
Cost of sales (1,517) (3,746) (6,359)
_______ _______ _______
Gross profit 1,656 2,911 4,855
Adjusted administrative expenses (1,633) (1,747) (3,486)
_______ _______ _______
Adjusted operating profit 23 1,164 1,369
Amortisation of acquisition-related intangibles (121) (121) (243)
Share-based payments (64) (10) (111)
_______ _______ _______
Operating profit (162) 1,033 1,015
Finance income 4 26 27 66
Finance expense 5 (5) (18) (44)
_______ _______ _______
Profit/(loss) before taxation (141) 1,042 1,037
Income tax credit/(expense) 23 48 (58)
_______ _______ _______
Profit/(loss) for the year from continuing operations (118) 1,090 979
Discontinued operations
(Loss) for the period from discontinued operations - (83) (98)
_______ _______ _______
Profit/(loss) for the period (118) 1,007 881
Items that may be reclassified subsequently to profit or loss:
Exchange differences 11 (29) (98)
_______ _______ _______
Other comprehensive income/(expense), net of tax 11 (29) (98)
TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE PERIOD (107) 978 783
Total comprehensive income for the year arises from:
- continuing operations (107) 1,061 881
- discontinued operations - (83) (98)
_______ _______ _______
(107) 978 783
Earnings per share - from continuing operations
Attributable to the owners of Byotrol plc (basic) 6 (0.03)p 0.25p 0.22p
Attributable to the owners of Byotrol plc (diluted) 6 (0.03)p 0.24p 0.22p
Earnings per share - from discontinued operations
Attributable to the owners of Byotrol plc (basic) n/a (0.02)p (0.02)p
Attributable to the owners of Byotrol plc (diluted) n/a (0.02)p (0.02)p
Earnings per share - from profit for the period
Attributable to the owners of Byotrol plc (basic) (0.03)p 0.23p 0.20p
Attributable to the owners of Byotrol plc (diluted) (0.03)p 0.22p 0.19p
Group statement of financial position
As at As at As at
30 September 2021 30 September 2020 31 March
2021
Note £'000 £'000 £'000
(unaudited) (unaudited) (audited)
Assets
Non-current assets
Intangible assets 7 3,617 3,625 3,552
Tangible assets 80 57 84
Right-of-use assets 8 41 50 30
Deferred tax assets 315 431 315
Trade receivables 1,292 1,082 1,249
_______ _______ _______
5,345 5,245 5,230
Current assets
Inventories 733 1,146 1,099
Trade and other receivables 1,772 2,073 1,614
Cash and cash equivalents 1,902 1,755 1,598
_______ _______ _______
4,407 4,974 4,311
Total assets 9,752 10,219 9,541
Liabilities
Non-current liabilities
Lease liabilities 9 16 16 4
Deferred tax liabilities 325 371 348
_______ _______ _______
341 387 352
Current liabilities
Trade and other payables 1,027 1,671 1,023
Lease liabilities 9 26 33 26
_______ _______ _______
1,053 1,704 1,049
Total liabilities 1,394 2,091 1,401
NET ASSETS 8,358 8,128 8,140
Issued share capital and reserves
Share capital 1,133 1,107 1,116
Share premium 434 28,493 190
Other reserves 739 1,864 728
Retained earnings 6,052 (23,336) 6,106
_______ _______ _______
TOTAL EQUITY 8,358 8,128 8,140
Group statement of cash flows
6 months to 6 months to Year to
30 September 2021 30 September 2020 31 March
2021
£'000 £'000 £'000
(unaudited) (unaudited, restated) (audited)
Cash flows from operating activities
Profit/(loss) for the period (118) 1,007 881
Adjustments for:
Finance income (26) (27) (66)
Finance costs 5 18 44
Depreciation of tangible non-current assets 16 12 26
Amortisation of intangible non-current assets 190 203 426
Loss on disposal of assets 17 - 107
Income tax recognised in profit or loss (23) (48) 58
Share-based payments 64 10 111
Costs relating to Capital Reduction recognised in equity - - (36)
_______ _______ _______
Operating cash flows before movements in working capital 125 1,175 1,551
(Increase)/decrease in trade and other receivables (185) (315) 37
(Increase)/decrease in inventories 366 (860) (814)
Increase/(decrease) in trade and other payables 29 580 (34)
Cash in/(out)flow from discontinued operations - (47) (211)
_______ _______ _______
Cash (used in)/generated from operating activities 335 533 529
Income tax refund received - 25 25
_______ _______ _______
Net cash (used in)/generated from operating activities 335 558 554
Cash flows from investing activities
Development of intangible assets (272) (138) (394)
Acquisition of property, plant and equipment (12) (14) (55)
_______ _______ _______
Net cash used in investing activities (284) (152) (449)
Cash flows from financing activities
Proceeds from issue of ordinary shares, net of issue costs 261 - 205
Movement in invoice discounting facility - (296) -
Repayments of principal on lease liabilities (14) (21) (39)
Finance income - - 53
Finance costs (4) (18) (42)
Interest expense on lease liabilities (1) (1) (2)
_______ _______ _______
Net cash (used in)/ generated by financing activities 242 (336) (121)
Net (decrease)/increase in cash and cash equivalents 293 70 (16)
Net foreign exchange differences 11 (27) (98)
Cash and equivalent at beginning of period 1,598 1,712 1,712
_______ _______ _______
Cash and cash equivalents at end of period 1,902 1,755 1,598
Group statement of changes in equity
Share capital Share premium Merger reserve Retained profits Total
Exchange reserve
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 31 March 2020 1,101 28,423 826 1,065 (24,353) 7,062
Profit/(loss) after taxation for the period - - - - 1,007 1,007
Share-based payments - - - - 10 10
Other comprehensive income:
Exchange differences - - (27) - - (27)
Transactions with owners:
Shares issued for cash 6 70 - - - 76
_____ _____ _____ _____ _____ _____
Balance at 30 September 2020 1,107 28,493 799 1,065 (23,336) 8,128
(Loss) after taxation for the period - - - - (126) (126)
Other comprehensive income:
Deferred tax on share-based payment transactions - - - - 15 15
Exchange differences - - (71) - - (71)
Share-based payments - - - - 101 101
Transactions with owners:
Share-based payments - - - - - -
Deferred tax on share-based payment transactions - - - - - -
Shares issued for cash 9 120 - - - 129
Transactions with owners - capital reduction:
Capitalisation of Merger reserve to B Ordinary Shares 1,065 - - (1,065) - -
Cancellation of B Ordinary Shares (1,065) - - - 1,065 -
Cancellation of Share Premium - (28,423) - - 28,423 -
Costs of Capital Reduction - - - - (36) (36)
_____ _____ _____ _____ _____ _____
Balance at 31 March 2021 1,116 190 728 - 6,106 8,140
Profit/(loss) after taxation for the period - - - (118) (118)
Share-based payments - - - 64 64
Other comprehensive income:
Exchange differences - - 11 - - 11
Transactions with owners:
Shares issued for cash 17 244 - - 261
_____ _____ _____ _____ _____ _____
Balance at 30 September 2021 1,133 434 739 - 6,052 8,358
Notes to the Group financial statements
1 Basis of preparation
The Group has prepared its interim financial statements for the 6 months ended
30 September 2021 (the "interim results") in accordance with the recognition
and measurement principles of International Financial Reporting Standards
("IFRS") as adopted by the European Union and also in accordance with the
recognition and measurement principles of IFRS issued by the International
Accounting Standards Board, but do not include all the disclosures that would
otherwise be required. They have been prepared under the historical cost
convention as modified to include the revaluation of certain non-current
assets. The accounting policies adopted in the interim financial statements
are consistent with those adopted in the Group's Annual Report and Financial
Statements for the year ended 31 March 2021 and those which will be adopted in
the preparation of the annual report for the year ending 31 March 2022.
As permitted, the interim results have been prepared in accordance with the
AIM Rules of the London Stock Exchange and not in accordance with IAS34
Interim Financial Reporting. They do not constitute full statutory accounts
within the meaning of section 434 of the Companies Act 2006 and are unaudited.
Certain comparative amounts for the 6 months ended 30 September 2020 in the
Group Statement of Comprehensive Income, Group Statement of Cash Flows and
related notes have been reclassified or restated to achieve a more appropriate
presentation as required by IFRS 5: Non-current assets held for sale and
discontinued operations.
Going concern
The Directors have considered trading and cash flow forecasts prepared for the
Group, and based on these are satisfied that the Group will continue to be
able to meet its liabilities as they fall due for at least one year from the
date of these results. On this basis, they consider it appropriate to have
adopted the going concern basis in the preparation of the interim results,
which were approved by the Board of Directors on 7 December 2021.
Comparative financial information
The comparative financial information presented herein for the year ended 31
March 2021 does not constitute full statutory accounts for that period. The
statutory accounts for the year ended 31 March 2021 carried an unqualified
Auditor's Report, did not draw attention to any matters by way of emphasis and
did not contain a statement under Section 498(2) or 498(3) of the Companies
Act 2006.
2 Segmental analysis
Revenue and gross profit by segment
6 months ended 30 September 2021 Continuing Discontinued operations Total
operations
Professional Consumer
£'000 £'000 £'000 £'000
Revenue
Product sales 1,862 560 - 2,422
Royalty and licensing income 751 - - 751
_______ _______ _______ _______
Total revenue 2,613 560 - 3,173
Gross profit
Product sales 705 200 - 905
Royalty and licensing income 751 - - 751
_______ _______ _______ _______
Total gross profit 1,456 200 - 1,656
6 months ended 30 September 2020 Continuing Discontinued operations Total
operations
Professional Consumer
£'000 £'000 £'000 £'000
Revenue
Product sales 5,067 981 16 6,064
Royalty and licensing income 591 18 - 609
_______ _______ _______ _______
Total revenue 5,658 999 16 6,673
Gross profit
Product sales 1,856 446 (15) 2,287
Royalty and licensing income 591 18 - 609
_______ _______ _______ _______
Total gross profit 2,447 464 (15) 2,896
Revenue by geography
The Group recognises revenue in three geographical regions based on the
location of customers, as follows:
6 months ended 30 September 2021 Professional Consumer Total
£'000 £'000 £'000
United Kingdom 1,650 366 2,016
North America 751 - 751
Rest of World 212 194 406
_______ _______ _______
Total revenue 2,613 560 3,173
6 months ended 30 September 2020 Professional Consumer Total
£'000 £'000 £'000
United Kingdom 4,542 456 4,998
North America* 445 - 445
Rest of World 671 543 1,214
_______ _______ _______
Total revenue 5,658 999 6,657
* this represents revenue other than that arising from discontinued operations
Management makes no allocation of costs, assets or liabilities between these
segments since all trading activities are operated as a single business unit.
License revenue and finance income
License contracts (and certain other contracts relating to the sale of IP)
typically provide for fixed payments to be made by customers over a given term
(typically between three and five years but which may extend longer). Under
IFRS 15, in order to reflect the time value of money, such contracts are
recognised as the capitalised value of the income stream plus notional
interest accruing for the period on the credit deemed to be extended to the
customer (on a reducing balance basis). For the 6 months to 30 September 2021
this figure amounts to license revenue of £0.75m and notional interest income
of £26,000.
3 Non-GAAP profit measures and exceptional items
Reconciliation of operating profit to adjusted EBITDA (earnings before
interest, taxation, depreciation and amortisation):
6 months to 6 months to Year to
30 September 2021 30 September 2020 31 March
2021
£'000 £'000 £'000
Operating profit/(loss) (162) 1,033 1,015
Adjusted for:
Amortisation and depreciation 221 215 491
_______ _______ _______
EBITDA 59 1,248 1,506
Loss on disposal of assets 17 - 106
Revenue recognised as interest under IFRS 15 26 27 53
Expensed share-based payments 64 10 111
_______ _______ _______
Adjusted EBITDA 166 1,285 1,776
The criterion for adjusting items in the calculation of adjusted EBITDA is
operating income or expenses that are material and either (i) arise from an
irregular and significant event or (ii) are such that the income/cost is
recognised in a pattern that is unrelated to the resulting operational
performance. Materiality is defined as an amount which, to a user, would
influence decision-making based on, and understandability of, the financial
statements. Adjustment for share-based payment expense is made because, once
the cost has been calculated, the Directors cannot influence the share based
payment charge incurred in subsequent years, and the value of the share option
to the employee differs considerably in value and timing from the actual cash
cost to the Group.
Exceptional items are treated as exceptional by reason of their size or nature
and are excluded from the calculation of adjusted EBITDA (and adjusted
earnings per ordinary share) to allow a better understanding of comparable
year-on-year trading and thereby an assessment of the underlying trends in the
Group's financial performance. These measures also provide consistency with
the Group's internal management reporting.
Adjusted EPS
The calculation of adjusted EPS is shown in Note 6.
4 Finance income
6 months to 6 months to Year to
30 September 2021 30 September 2020 31 March
2021
£'000 £'000 £'000
Interest receivable on interest-bearing deposits - - 13
Notional interest accruing on contracts with a significant financing component 26 27 53
_______ _______ _______
Total finance income 26 27 66
5 Finance expense
6 months to 6 months to Year to
30 September 2021 30 September 2020 31 March
2021
£'000 £'000 £'000
Interest and finance charges 4 17 42
Interest on lease liabilities under IFRS 16 1 1 2
_______ _______ _______
Total finance expense 5 18 44
6 Earnings per share
The following sets out the earnings and share data used in the basic and
diluted earnings per share computations:
Denominator for earnings per share ("EPS") calculations
Year to 31 March 6 months to 6 months to Year to
30 September 2021 30 September 2020 31 March
2021
Weighted number of ordinary shares in issue 452,659,277 441,345,756 442,947,561
Effect of dilutive potential ordinary shares 3,342,894 9,665,218 11,338,201
_______ _______ _______
456,002,170 451,010,974 454,285,762
The Group has one category of potentially dilutive ordinary share, being those
share options granted to employees where the exercise price (plus the
remaining expected charge to profit under IFRS 2 per option) is less than the
average price of the Company's ordinary shares during the period. The weighted
average number of shares for the calculation of diluted earnings per share is
computed using the treasury share method.
Numerator for EPS calculations
6 months to 30 September 2021 Continuing operations Discontinued operations Total
£'000 £'000 £'000
Profit/(loss) attributable to ordinary equity holders of the Company (118) - (118)
(numerator for basic EPS calculation)
Adjusting items:
- share-based payments 64 - 64
- amortisation of acquisition-related intangibles 121 - 121
- deferred tax credit arising from acquisition-related intangibles (23) - (23)
_______ _______ _______
Adjusted earnings attributable to owners of the Parent 44 - 44
(numerator for adjusted EPS calculation)
6 months to 30 September 2020 Continuing operations Discontinued operations Total
£'000 £'000 £'000
Profit/(loss) attributable to ordinary equity holders of the Company 1,090 (83) 1,007
(numerator for basic earnings per share calculation)
Adjusting items:
- share-based payments 10 - 10
- amortisation of acquisition-related intangibles 121 - 121
- deferred tax credit arising from acquisition-related intangibles (23) - (23)
_______ _______ _______
Adjusted earnings attributable to owners of the Parent 1,198 (83) 1,115
Year to 31 March 2021 Continuing operations Discontinued operations Total
£'000 £'000 £'000
Profit/(loss) attributable to ordinary equity holders of the Company 979 (98) 881
(numerator for basic earnings per share calculation)
Adjusting items:
- share-based payments 111 - 111
- amortisation of acquisition-related intangibles 243 - 243
- deferred tax credit arising from acquisition-related intangibles (47) - (47)
_______ _______ _______
Adjusted earnings attributable to owners of the Parent 1,286 (98) 1,188
The criteria for inclusion of adjusting items in the calculation of adjusted
EPS are the same as those relating to the calculation of adjusted EBITDA as
set out in Note 3. Amortisation of acquisition-related intangibles (and the
associated tax credit) relates to the amortisation of intangible assets in
respect of customer relationships and brands which are recognised on a
business combination and are non-cash in nature.
EPS - reported
6 months to 6 months to Year to
30 September 2021 30 September 2020 * 31 March
2021 *
£'000 £'000 £'000
Reported earnings per share attributable to shareholders
- basic (0.03)p 0.25p 0.22p
- diluted (0.03)p 0.24p 0.22p
* Continuing operations only
EPS - adjusted
6 months to 6 months to Year to
30 September 2021 30 September 2020 * 31 March
2021 *
£'000 £'000 £'000
Adjusted earnings per share attributable to shareholders
- basic 0.01p 0.27p 0.29p
- diluted 0.01p 0.27p 0.28p
* Continuing operations only
7 Intangible assets
Intangible assets comprise capitalised development costs, acquired software,
customer relationships and goodwill.
Goodwill Other Intangible Assets Total
£'000 £'000 £'000
Cost
At 1 April 2021 502 4,639 5,141
Additions - 272 272
(Disposals) - (96) (96)
_____ _______ _______
At 30 September 2021 502 4,815 5,317
Amortisation or impairment
At 1 April 2021 - (1,589) (1,589)
Charge for the period - (190) (190)
Eliminated on disposal - 79 79
_______ _______ _______
At 30 September 2021 - (1,700) (1,700)
Net carrying amount
At 30 September 2021 502 3,115 3,617
At 1 April 2021 502 3,050 3,552
Other Intangible Assets comprise:
Customer Relationships Brands Development Costs Patents and licenses Total
£'000 £'000 £'000 £'000 £'000
Cost
At 1 April 2021 1,861 567 1,535 676 4,639
Additions - - 178 94 272
(Disposals) - - - (96) (96)
_______ _______ _______ _______ _______
At 30 September 2021 1,861 567 1,713 674 4,815
Amortisation or impairment
At 1 April 2021 (485) (148) (411) (545) (1,589)
Charge for the period (93) (28) (53) (16) (190)
Eliminated on disposal - - - 79 79
_______ _______ _______ _______ _______
At 30 September 2021 (578) (176) (464) (482) 1,700
Net carrying amount
At 30 September 2021 1,283 391 1,249 192 3,115
At 1 April 2021 1,376 419 1,124 131 3,050
8 Right-of-use assets
Right-of-use assets comprise leases over office buildings and vehicles.
Office Vehicles Total
buildings
£'000 £'000 £'000
Cost
At 1 April 2021 103 47 150
Additions in the period - 26 26
(Disposals) in the period - (47) (47)
_______ _______ _______
At 30 September 2021 103 26 129
Depreciation
At 1 April 2021 (75) (45) (120)
Charge for the period (13) (2) (15)
Eliminated on disposal - 47 47
_______ _______ _______
At 30 September 2021 (88) - (88)
Net carrying amount
At 30 September 2021 15 26 41
At 1 April 2021 28 2 30
9 Lease liabilities
Lease liabilities comprise liabilities arising from the committed and expected
payments on leases over office buildings and vehicles.
Amounts due in more than one year Office Vehicles Total
equipment
£'000 £'000 £'000
At 1 April 2021 4 - 4
Liabilities taken on in the period - 25 25
Transfers from long to short term liabilities (4) (9) (13)
At 30 September 2021 _______ _______ _______
- 16 16
Amounts due in less than one year Office Vehicles Total
equipment
£'000 £'000 £'000
At 1 April 2021 24 2 26
Repayments of principal (12) (2) (14)
Liabilities taken on in the period - 26 26
Transfers from long to short term liabilities 4 (16) (12)
_______ _______ _______
At 30 September 2021 16 10 26
10 Post balance sheet events
There have been no events subsequent to the reporting date which would have a
material impact on these interim financial results
END
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