Final Results for the year ended 31 March 2023
11/07/2023 07:00
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RNS Number : 5600F D4T4 Solutions PLC 11 July 2023
11 July 2023
D4t4 Solutions Plc
Final Results for the year ended 31 March 2023
Significant ARR growth, improved go-to market approach beginning to deliver
D4t4 Solutions Plc (AIM: D4T4, "the Group", "D4t4"), the data solutions
provider, announces its final results for the year ended 31 March 2023.
Financial Highlights
· Annual recurring revenue* (ARR) up 19% to £16.7 million (FY22:
£14.0 million)
· Total Revenue down 12.6% to £21.4 million (FY22: £24.5
million), but Software Revenue (excluding third-party hardware) up 9.6% to
£19.1 million (FY22: £17.5 million)
· ARR as percentage of Software Revenue increased to 89% (FY22:
80%)
· Gross profit margin of 60.2% (FY22: 51.9%) increased due to a
greater proportion of higher margin Celebrus software revenue.
· Adjusted profit before tax** of £3.8 million (FY22: £3.3
million), and statutory profit before tax of £2.4 million (FY22: £1.8
million)
· Diluted adjusted EPS of 7.74p (FY22: 7.11p) and diluted basic EPS
of 5.18p (FY22: 4.14p)
· Proposed final dividend of 2.15p (FY22: 2.07p), making a total
dividend for the year of 3.03p (FY22: 2.92p), an increase of 3.8%
· Year-end cash position of £17.2 million (FY22: £11.4 million)
Operational Highlights
· Unified Celebrus brand now offering Marketing and Fraud
functionality according to use case providing improved traction.
· The direct sales channel created during the year is performing
well, and with the marketing investment, produced sales pipeline growth of 27
percent during the year whilst the value of proposals out with potential and
existing customers increased fourfold.
· Addition of several new customers including a healthcare company
in the US, a bank in Spain, and an insurer in APAC
· Strong upsell into existing customers, including additional
features for a large US bank, a renewal and consolidation upsell for a large
global bank that included a fraud component, and a large renewal for another
global bank also incorporating fraud capabilities.
· The Prickly Cactus team performed well, and the earn-out target
was achieved six months ahead of schedule which has accelerated our
development of a Customer Success team.
· Launch of CX Vault, the first-of-its-kind "no party" cookie-less
data solution
· Launch of CDI for Salesforce offering Salesforce customers rapid
deployment of Celebrus technology focused on digital identity verification.
· Enhancement of Celebrus' Digital Identity Verification
capabilities with cross-domain continuance, for multi-brand organisations.
Current trading and Outlook
· In the Marketing world, there is a growing need for better,
real-time data, so that brands can improve their customer experience and build
better relationships
· The Group's goal for the year ahead is to deliver significant
growth with a focus on new logo sales
· Continued investment into sales and marketing activities and
product development while focused on the generation of healthy profits and
cash for future investment
· Group trading to date is in line with expectations for FY24, with
the US market showing particular strength
* ARR (Annual Recurring Revenue) is the amount of revenue currently contracted
at a point in time that is expected to recur within the next twelve months.
** Adjusted profit before tax is calculated before amortisation of
intangibles, restructuring costs, acquisition costs, foreign exchange
gains/losses and share based payment charges.
Bill Bruno, CEO of D4t4 Solutions, said:
"As an organisation, our journey of building a culture focused on selling
software through a direct sales channel continues to develop according to the
strategy we have put in place over the past year and a half. I'm pleased with
the effort from the team globally, and we will continue to improve our
investments and strategy in a data-driven manner. We have transformed quickly
and efficiently as a business, and that speed will continue alongside the
growing pipeline. We have started the new financial year well and we are
confident in our ability to deliver growth."
The information communicated in this announcement contains inside information
for the purposes of Article 7 of the Market Abuse Regulation (EU) No.
596/2014, as retained and applicable in the UK pursuant to S3 of the European
Union (Withdrawal) Act 2018 ("MAR").
Enquiries
D4t4 Solutions Plc +44 (0) 1932 893333
Bill Bruno, Chief Executive Officer investors@d4t4solutions.com (mailto:investors@d4t4solutions.com)
Ash Mehta, Chief Financial Officer
finnCap (Nominated Adviser & Joint Broker) +44 (0) 20 7220 0500
Julian Blunt / Edward Whiley, Corporate Finance
Alice Lane, ECM
Canaccord Genuity (Joint Broker) +44 (0) 20 7523 8000
Simon Bridges / Andrew Potts
About D4t4 Solutions plc
D4t4 Solutions plc (AIM: D4t4) was founded around a passion for helping brands
improve their relationships with their consumers via better data.
Supporting customers in financial services, retail, travel, healthcare, and
telecommunications across over 27 countries, D4t4 enables businesses to make
smarter, informed decisions via Celebrus, the company's flagship first-party
data product suite. Celebrus automatically captures, contextualises, and
activates user-based behavioural data in real-time across all digital
channels. Through behavioural biometrics and analytics, Celebrus helps
companies prevent fraud before it happens. Celebrus Cloud provides an
enterprise platform that automates and enables organisations to get better
value from the Celebrus software in a more efficient manner.
The Group has offices in the UK, USA, India, and Australia with key talent in
all markets to drive the growth of the business. Celebrus is fully compliant
with all major data privacy regulations and the Group is accredited to
ISO27001: Information Security Management.
For more information, please see www.d4t4solutions.com
(http://www.d4t4solutions.com/)
Chairman's statement
The Group has made strong progress over the last twelve months, and whilst the
results fell short of earlier expectations, the underlying trends are very
positive with strong growth in ARR and our strongest pipeline ever heading
into a new financial year, and our investment into people and systems making
the business more robust and scalable for the next stage of growth. Moreover,
the market trends against third party cookies, and the massive rise in
financial fraud play to our strengths as we continue to increase investment
into sales and marketing to further build the pipeline.
In the financial year we recorded increased software revenues and ARR, partly
based on some impressive new customer wins in various sectors including
banking, insurance, and healthcare. We also had significant upsell into
existing customers, including first-time Celebrus Fraud wins, as well as a
number of large three-year renewals demonstrating the value-add our products
provide and the long-term commitment that customers are prepared to make.
Our acquisition of Prickly Cactus in 2021 has proved to be valuable in helping
us strengthen our account management function, and the vendors met their
earn-out target six months ahead of the target date, contributing to our
Software revenue growth in the year.
Our investment into the product range continued with two updates of our
Celebrus platform to enhance functionality, along with the launch of CX Vault,
the cookie-less no party solution, and the joint launch of CDI (Customer Data
Integration) for Salesforce enabling Salesforce customers to switch on
Celebrus features in a matter of hours and have them integrated with the
Salesforce Marketing Cloud.
This progress has been made during a period of economic uncertainty, and it is
a great testament to our leadership team and all of our employees around the
world. We thank them sincerely for their efforts. The work we have put in to
create a sales-led organisation with a vibrant culture of empowerment and
accountability is showing results.
At the board level, after the year end, we were delighted to have appointed
Helen Gilder as a non-executive director and Chair of the Audit Committee. Her
previous experience as a tech company CFO as well as currently being NED and
audit chair of an AIM tech business made her a strong candidate for the role.
Helen takes over the Audit Committee chair role from me, and this is the first
step in our search for a new Chair of the board to succeed me when, in line
with good corporate governance, I step down towards the end of this calendar
year, having served as Chair for almost nine years. A search has commenced,
and we will provide further updates in due course. The board now consists of
four independent non-executive directors and two executive directors.
Outlook
We started the new financial year with a strong pipeline, and a leadership
team structured clearly on the delivery of new customer wins, increased
revenues and customer satisfaction. The Group has a healthy cash balance to
fund necessary investments into growth and I'm delighted to report that the
Board is highly confident in the Group's strategy and our ability to deliver
growth and create significant shareholder value in the coming years.
Peter Simmonds
Chairman
11 July 2023
Chief Executive Officer's statement
Our transformational journey to becoming a software sales organization
continues to progress, and our focus on growing the core business of selling
Celebrus software has developed well with further investments into our
strategy for Sales and Marketing.
While the financial year ended in a frustrating manner with the delay of two
contract signings, I'm pleased to report a good set of financial results for
the year ended 31 March 2023 ("FY23") with Software Revenue up by 9.6% during
the year and a healthy growth in ARR of 19%.
Strategy and Market trends
We have moved into the next phase of execution of the strategy to further
drive both new logos and existing client growth. With our focus of selling
Celebrus software and functionality for Marketing and Fraud use cases, we have
rebranded Celebrus CDM to Celebrus Cloud, and enabled the two functionalities
to be used concurrently in a single installation. As we continue this journey,
our goal is simple: to build strong relationships between brands and their
consumers via better data, for both marketing and fraud. This is evidenced by
the numerous conversations we are having with Celebrus marketing customers
about utilisation of the fraud functionality.
In the Marketing world, relationships are growing as a result of engaging
experiences and those experiences are driven by better, real-time data.
Digital challenges for Marketing have continued to expand to three main areas
in which Celebrus excels: Digital Identity Verification, Data
Contextualisation and Accuracy, and Data Connectivity. Our "Identity Module"
provides the ability for brands to compliantly maintain digital profiles of
anonymous and authenticated individuals in a way that most other solutions
cannot. Our tag-free data capture, ability to provide that data in
milliseconds, and our ability to connect that data in any format to any system
that a brand may require, further differentiate us from our competitors in the
industry.
In the Fraud world, consumers need to be protected by better data in the
moment. Fraudsters continue to grow in sophistication, and brands need more
data at their fingertips in real-time to have a chance of protecting
themselves and their consumers by restricting fraudsters before they can even
attempt a fraudulent transaction. Our ability to capture all of that data,
combined with our Identity capabilities, sets us apart from our competitors,
making Celebrus a significant addition for brands who are trying to do more to
counter fraud using their own, first-party datasets. 'The sophistication and
configurable granularity of our solution, combined with the rising level of
threat, means that the 'black box' approaches of competitors will no longer be
considered adequate protection for consumers'. With millisecond data capture
and contextualisation, our Celebrus platform ultimately helps brands catch the
fraudster before the fraud.
Products and technologies
We will continue to find opportunities to innovate our Celebrus platform to
maintain differentiation in the Marketing and Fraud world. We will do this
with our twice-yearly product releases and via the partnerships and
integrations we continue to build.
During the year, we brought a significant set of features to the market to
enhance the capabilities of Celebrus. We launched the first-of-its-kind "no
party" data solution in CX Vault that is truly cookie-less. We also enhanced
our Digital Identity Verification with cross-domain continuance, and we
developed Celebrus Cloud to create our CDI for Salesforce offering and
furthered support for the Google Cloud Platform.
Our technology focus is on innovation and differentiation and the ability to
cater for the ever-growing needs of our customers, and we will continue to
take input from the field teams and customers to ensure we are delivering upon
our promises.
Route to market
This past year had some great wins for our business. On the new logo front, we
have added several to the roster including a healthcare company in the US, a
bank in Spain, and an insurer in APAC. Amongst existing customers, we also had
considerable success including an upsell of features to a large US bank, a
renewal and consolidation upsell for a large global bank that included a fraud
component, and a renewal for another global bank that is now exploring Fraud
as well.
Our pipeline visibility continues to improve and grow such that at the end of
this past year the total sales pipeline grew by 27 per cent while the value of
proposals out with potential and existing customers increased fourfold,
providing strong visibility into performance in the new year, and reflecting
the investment into sales, marketing, and customer success.
Our vertical focus has also expanded. While we continue to drive business in
Financial Services, Healthcare, and Insurance as key markets we have also
achieved traction in Travel and Retail. Our strong belief is that Celebrus can
play a role for any organisation looking to be data-driven, and we will
continue to expand our footprint in any verticals where it makes sense and
proves to be fruitful. Continued changes to HIPAA(1) compliance in US
healthcare resulting in the limitation of usage of tracking technologies
including third party cookies, has highlighted the benefits of our Celebrus
first-party data solution for that vertical.
We have added Business Development Representatives (BDRs) to our Sales
organization to increase further the rate of lead generation.
The acquisition of Prickly Cactus in August 2021 has proven successful in
uplifting our customer success capabilities, and they achieved their earnout
targets in March 2023, six months ahead of schedule. Consequently, they have
now been formally integrated into a newly established Customer Success team
for the International and the US markets. These investments and structural
changes will ensure Sales spends their time selling new logos, and not on
other areas of the business.
Partners
Our partners will always be important to the business, and we have expanded
the roster to now include several consulting partners. This is for scale, but
also for business development. These consulting firms are trusted partners of
their customers, and they also know the challenges that customers are facing
first-hand. This presents a great opportunity to create more potential revenue
streams for the business.
We continue to innovate and grow our go-to-market offerings with technology
partners such as Teradata, Pegasystems, Salesforce, and others. Each of these
presents an opportunity for us to package up a combination of Celebrus
features and sell them in a straightforward manner to land and expand in
accounts where those partners are already active. The more we simplify that
initial offering, the easier it is for these partners to position Celebrus
with their customers and internal teams.
Branding
We continually monitor the impact of our marketing, and evolve our positioning
based on feedback from events, the sales process and conversations with our
customers; we are not afraid to make quick pivots as the market changes and
adapts. The 'CDP (Customer Data Platform)' label is one example; as a result
of overuse and inappropriate application, it has become a source of confusion
and we have moved away from using it to describe what we do. Our objective is
for our branding to be accessible to non-specialist readers, to the point, and
relevant to the various data-related challenges faced by our current and
future customers.
Our employees
We have continued to restructure the business to create opportunities for
growth, but to also ensure that we have teams of people working together
towards common goals. While we are a global business, we need to ensure that
people across the globe are aligned and working with the same level of
accountability in the business. We also need to ensure we have strong managers
across the business to improve processes and create efficiencies along the
way.
We have continued to invest in our Security team and operations, and we take
that very seriously. It's important to stay at the forefront of information
and cyber security as we continue to grow our Celebrus Cloud business. We have
deployed a Security Operations Center (SOC) and we have revamped our policies
both internally and externally to protect our employees, our company, and our
customers.
I'd like to thank our global team for their contributions in this past year
and their diligence as we continue to make changes across the business to set
up for scale and growth. Our team has taken that in its stride, and it has
been very uplifting to see people rise to the challenge and work together to
build a better D4t4.
Outlook
Our goal for the year ahead is to deliver ARR growth and shareholder value
with a focus on sales. New logos and growing existing accounts are our core
area of focus. We are becoming a far more sales-focused organisation, and that
culture will drive the winning attitude needed to sustain the growth we know
this business can deliver.
We will continue to invest into sales and marketing activities and product
development while ensuring we can still generate healthy profits and cash for
future investment. Everything we do, from delivery to sales to everything in
between will be measured. We will continue to bring that data and transparency
to the market whenever appropriate.
While we are focused on growing our own business, we will also continue to
monitor the space for potential acquisition opportunities to bring more
capabilities into Celebrus.
We have started the new financial year with a strong pipeline and we are
confident in our ability to deliver growth in this new financial year.
Bill Bruno
Chief Executive Officer
(1) The United States Health Insurance Portability and Accountability Act 1996
Chief Financial Officer's Report
Overview
This was a year of investing into building the sales pipeline, and ensuring
the business is scalable and operating efficiently to execute the forthcoming
growth. The investment required was managed by refreshing and renewing certain
teams in the business to contain the cost base at a similar level to last
year. This, coupled with tight management of trade debtors and our cash
balance, leaves us at the year end with a strong balance sheet to fund future
growth expected from the larger pipeline.
Income Statement
Due to delays in the signing of two contracts before the year end, Group
Revenues were £21.4m (FY22: £24.5m). However, Software Revenues, comprising
license revenues, managed services, support and maintenance and implementation
services, but excluding highly variable, low margin third-party hardware
revenues, were up 9.6% to £19.1m (FY22: £17.5m).
Equally significantly, ARR grew 19.3% to £16.7m (FY22: £14.0m) and accounted
for 89% (FY22: 80%) of Software Revenues for the year. Within the £2.7
million of ARR growth, contract wins accounted for a net of £1.8 million with
£0.9 million being due to foreign currency movements, arising from the strong
US Dollar impacting on our predominantly USD-denominated ARR.
The gross margin was 60.2% (FY22: 51.9%) due to a smaller proportion of low
margin hardware revenues. Excluding hardware revenues and cost of sales, the
underlying Software gross margin was 68.8% (FY22: 67.8%).
Operating expenses continued to be tightly controlled, falling slightly during
the year to £10.8 million (FY22: £11.0 million).
The adjusted profit before tax was £3.8 million (FY22: £3.3 million), whilst
the unadjusted profit before tax was £2.4 million (FY22: £1.8 million). The
difference between the adjusted and unadjusted figures is due to a charge for
share-based payments arising from share option grants during the year of £0.9
million (FY22: £0.7 million) and restructuring costs of £0.5 million (FY22:
£0.4 million), amortisation of intangible assets of £0.3 million (FY22:
£0.3 million) reduced by foreign exchange gains of £0.3 million (FY22: loss
of £0.1 million).
The average number of employees increased slightly during the year to 151
(FY22: 149). Although we increased investment into Sales and Marketing this
was offset by redundancies of certain roles across the Group.
Foreign currency impact
The foreign currency markets remained volatile during the last few months of
the year. This impacts the Group which has around 70% of revenues in US
Dollars, but approximately 30% of Group expenses. The Group's tighter policies
and management of foreign currency risk along with the strengthening of the US
dollar during the year resulted in a foreign currency gain of £0.3 million
(FY22: loss £0.1 million).
Taxation
Taxable profits were slightly higher for the year and the tax charge was
higher at an effective rate of 11.5% (FY22: 3.9%). This was driven by a higher
tax charge in the United States and an under provision in last year's Group
charge, but was reduced by our significant investment into research and
development, much of which qualifies for R&D and Patent Box tax credits in
the UK. The increase in the corporation tax rate to 25% in the UK from 1 April
2023, along with changes to qualifying costs under the UK R&D tax credit
scheme (which will result in smaller claims being made in future), may produce
a higher effective tax charge in future periods.
Financial position
The Goodwill balance of £9.4 million (FY22: £9.4 million) is comprised of
goodwill from the acquisition of Celebrus in 2015, and the acquisition of
Prickly Cactus during 2021. The Other intangible assets balance of £0.8
million (FY22: £0.8 million) is comprised of purchased IPR, trade names and
capitalised development costs. The Group expenses the majority of its R&D
costs and capitalised just £0.2 million in the year (FY22: £0.2 million).
The amortisation related to non-acquisition related goodwill amounted to £0.3
million (FY22: £0.3 million).
Property plant and equipment fell to £0.6 million (FY22: £4.2 million)
following the decision to sell the freehold property, as described below.
Trade debtors were £4.9m (FY22: £25.0m) and of that amount, £4.8m had been
received by the end of June. Credit risk is not a major risk for the Group and
bad debt write-offs during the year were nil (FY22: nil).
Trade creditors decreased to £0.6 million (FY22: £0.8 million); this was due
to normal operating cycles. The Group seeks to pay all suppliers within terms
and the supplier payment days at the year-end were 14 days (FY22: 25 days).
Deferred revenue decreased to £9.6 million (FY22: £14.2 million).
The cash balance at the year-end was £17.2 million (FY22: £11.4 million).
Cash flow and funds
The Group generated net cash from operating activities of £13.7 million
(FY22: net cash used £0.7 million) primarily due to movements in working
capital from the delayed payment of debtors at the last year end.
Financing activities in the year were £7.8 million (FY22: £1.5 million)
comprised mainly of normal dividends paid of £1.2 million (FY22: £1.1
million), the special dividend of £5.0m (FY22: nil) and a net purchase of own
shares of £1.5 million (FY22: £0.4 million).
Investing activities resulted in an outflow of £0.1 million (FY22: outflow of
£0.6 million). With higher interest rates and a healthy cash balance net
interest income was £337,000 (FY22: £1,000), set off principally against
capitalisation of development costs of £247,000 (FY22: £242,000).
The Group continues to be debt free and maintains a robust financial position.
The healthy cash balance is important not just to enable the Group to invest
in future growth as appropriate, but also to counter any concerns about vendor
risk from our customers, who are typically large multinational businesses.
Annual Recurring Revenue
We define ARR as the annual amount of recurring revenue contracted with a
customer, at a given point in time. As a recognised driver of shareholder
value in software businesses we use this as one of our primary metrics.
Group ARR grew by £2.7m to £16.7 million (FY22: £14.0 million) during the
year. The current ARR is comprised of Licenses of £9.1 million (FY22: £6.3
million) and Support and Maintenance of £7.6 million (FY22: £7.7 million).
A major contributor to the growth was the conversion of existing Celebrus
Marketing customers under perpetual license to term licenses with ARR. This
brings most of our customers to a term license basis and all new proposals to
prospective customers are being issued as term licenses.
Of the growth of £2.7 million during the year, £1.9 million is from contract
wins with a further £0.8 million arising from exchange rate movements due to
a large proportion of Group contracts being in US Dollars.
Acquisition of Prickly Cactus
In August 2021, the Company acquired Prickly Cactus Limited ("Prickly
Cactus"), a UK data and analytics consultancy, for up to £0.75 million, to
help deepen our relationships with existing customers identifying
opportunities for greater customer engagement and satisfaction as well as
helping develop relationships with new customers and partners.
A sum of £0.5 million was held as Deferred Consideration in the Statement of
Financial Position contingent upon the team's contribution to existing
customer growth and the acquisition of new customers in the period from
acquisition to September 2023. The target was achieved in March 2023 and the
amount was paid out in the form of £0.25 million in cash and £0.25 million
as 111,905 Ordinary shares, an average price of 223.4p.
Investment into systems to support growth
The investments into systems for, amongst others, sales and marketing,
finance, contract management and HR are providing the leadership team with
increased information and granularity to better manage the business. This has
allowed us to better allocate resources, amend customer pricing and
restructure our internal teams to create efficiencies that would otherwise not
have been possible.
Property
With the move to hybrid working and the consequent reduced utilisation of our
office space in all of our locations around the world, during the year our
freehold property in the UK was placed up for sale. The asset has therefore
been redefined in our statement of financial position to Assets held for sale
at a carrying value of £3.0 million. In the current economic environment, the
likely proceeds and timing of the sale are uncertain. Nevertheless, the UK
office will be relocated to a lease office facility in the second half of the
financial year.
Earnings per share
Basic EPS for the year was 5.29p (FY22: 4.21p) and diluted basic EPS was 5.18p
(FY22: 4.14p). The basic figure has been calculated using the weighted average
number of shares in issue being 40,004,526 (FY22: 40,240,799) and the diluted
figure using 40,830,043 (FY22: 40,966,020).
Adjusted basic EPS was 7.90p (FY22: 7.24p) and adjusted diluted EPS was 7.74p
(FY22: 7.11p) following adjustments for amortisation, share based payments,
exceptional items, foreign exchange expense and tax on these adjustments.
Dividend
During the year, as well as ordinary dividends of £1.2 million (FY22: £1.1
million), the Company paid a special dividend of 12.5p per share (FY22: nil)
totaling £5.0m.
The Board is today proposing a final dividend, subject to shareholder approval
at the 2023 AGM, of 2.15p per share (FY22: 2.07p), which along with the
interim dividend paid of 0.88p per share (FY22: 0.85p) in January 2023 brings
the full year dividend to 3.03p per share (FY22: 2.92p), an increase of 3.8%.
The final dividend is expected to be paid on 25 August 2023 to shareholders on
the register as at the close of business on 21 July 2023.
Purchase of own shares
During the year, the Company undertook a share buyback programme to acquire
ordinary shares of 2p in the capital of the Company. The shares will be held
for the purpose of satisfying future obligations in relation to its employees'
or other share schemes, thereby mitigating dilution for existing investors.
By 31 March 2023, 536,298 shares had been acquired at an average price of
243.3p and following the issue of treasury shares to satisfy share option
exercise and the deferred consideration on the Prickly Cactus acquisition this
brought the number of shares held in Treasury to 608,765 (FY22: 224,932).
Equity
At the year end, the Group had £27.4 million (FY22: £31.9 million)
attributable to the shareholders of the company. The decrease in the year was
principally made up of retained earnings in the year of £2.1 million (FY22:
£1.7 million) set off against dividends paid during the year of £6.2 million
(FY22: £1.1 million), share buybacks of £1.5 million (FY22: £0.4 million)
with the balance of £1.2 million (FY22: £0.7 million) attributable to share
based payments.
Ash Mehta
Chief Financial Officer
Consolidated income statement for the year ended 31 March 2023
Note 2023 2022
£'000 £'000
Continuing operations
Revenue 3 21,369 24,459
Cost of sales (8,497) (11,755)
Gross Profit 12,872 12,704
Administration expenses (10,833) (11,000)
Other operating income 15 58
Profit from operations 2,054 1,762
Finance income 373 22
Financing costs (36) (21)
Profit before tax 4 2,391 1,763
Tax (274) (68)
Attributable to equity holders of the parent 2,117 1,695
Earnings per share from continuing operations attributable to the equity
holders of the parent
Statutory
Basic 5 5.29p 4.21p
Diluted 5 5.18p 4.14p
Consolidated statement of comprehensive income for the year ended 31 March
2023
2023 2022
£'000 £'000
Attributable to equity holders of the parent 2,117 1,695
Other comprehensive income:
Items that will not be reclassified to profit or loss
Gains on property revaluation (300) 70
Exchange differences on translation of foreign operations 204 (21)
Total comprehensive income for the year attributable
to equity holders of the parent 2,021 1,744
Consolidated statement of changes in equity attributable to
Equity Holders of the Parent for the year ended 31 March 2023
Share capital Share premium Merger reserve Revaluation reserve Treasury shares Retained earnings Total £'000
Balance at 1 April 2021 808 3,365 5,981 1,240 (542) 20,034 30,886
Dividends paid - - - - - (1,147) (1,147)
Purchase of own shares - - - - (377) - (377)
Issue of new shares: exercise of share options 1 - 50 - - - 51
Settlement of share-based payments - - - - 249 (140) 109
Share-based payment charge - - - - - 619 619
Transactions with equity holders 1 - 50 - (128) (668) (745)
Profit for the year - - - - - 1,695 1,695
Other comprehensive income - - - 70 - (21) 49
Total comprehensive income - - - 70 - 1,674 1,744
Balance at 1 April 2022 809 3,365 6,031 1,310 (670) 21,040 31,885
Dividends paid - - - - - (6,194) (6,194)
Purchase of own shares - - - - (1,488) - (1,488)
Settlement of share-based payments - - 250 - 694 (679) 265
Share-based payment charge - - - - - 856 856
Transactions with equity holders - - 250 - (794) (6,017) (6,561)
Profit for the year - - - - - 2,117 2,117
Other comprehensive income - - - (300) - 204 (96)
Total comprehensive income - - - (300) - 2,321 2.021
Balance at 31 March 2023 809 3,365 6,281 1,010 (1,464) 17,344 27,345
Consolidated statement of financial position as at 31 March 2023
Note 2023 2022
£'000 £'000
Non-current assets
Goodwill 9,446 9,446
Other intangible assets 806 808
Property, plant and equipment 607 4,012
Trade and other receivables 7 942 -
Deferred tax assets 212 232
12,013 14,498
Current assets
Trade and other receivables 7 7,561 27,385
Tax receivables 15 573
Cash and cash equivalents 17,155 11,430
24,731 39,388
Assets in disposal groups classified as held for sale 3,000 -
Total assets 39,744 53,886
Current liabilities
Trade and other payables 8 (2,219) (7,144)
Tax liabilities (8) -
Deferred income (9,383) (14,200)
Lease obligations (73) (54)
(11,683) (21,398)
Non-current liabilities
Lease obligations (148) (146)
Deferred income (173) -
Deferred tax liabilities (395) (457)
(716) (603)
Total liabilities (12,399) (22,001)
Net assets 27,345 31,885
Equity
Share capital 809 809
Share premium account 3,365 3,365
Merger reserve 6,281 6,031
Revaluation reserve 1,010 1,310
Own shares (1,464) (670)
Retained earnings 17,344 21,040
Attributable to equity holders of the parent 27,345 31,885
Consolidated cash flow statement for the year ended 31 March 2023
2023 2022
Note £'000 £'000
Operating activities
Profit before tax 2,391 1,763
Adjustments for:
Depreciation of property, plant and equipment 265 391
Amortisation of intangible assets 346 306
Finance income (373) (22)
Finance expense 36 21
Share-based payments 856 619
Loss / (gain) on sale of property, plant and equipment 13 (16)
Operating cash flows before movements in working capital 3,534 3,062
Decrease / (increase) in receivables 18,882 (14,023)
Decrease in inventories - 129
(Decrease) / increase in payables (9,184) 10,171
Cash generated from operations 13,232 (661)
Taxes received 472 1
Net cash generated from operating activities 13,704 (660)
Investing activities
Interest received 373 22
Purchase of property, plant and equipment (173) (197)
Purchase of intangible fixed assets (97) -
Acquisition of subsidiary, net of cash acquired - (200)
Capitalisation of development costs (247) (242)
Net cash used in investing activities (144) (617)
Financing activities
Dividends paid (6,194) (1,147)
Lease repayments (102) (98)
Interest paid (36) (21)
Purchase of own shares (1,488) (377)
Exercise of share options (15) 109
Net cash used in financing activities (7,835) (1,534)
Net increase in cash and cash equivalents 5,725 (2,811)
Cash and cash equivalents at start of year 11,430 14,241
Cash and cash equivalents at end of year 17,155 11,430
Notes to the financial statements
1. General information
D4t4 Solutions plc is a public limited company incorporated and domiciled in
England and Wales and quoted on the AIM Market, hence there is no ultimate
controlling party.
2. Significant accounting policies
Basis of preparation
The financial statements have been prepared in accordance with International
Accounting Standards adopted by the Companies Act 2006 applicable to companies
reporting under International Accounting Standards.
The financial statements have been prepared under the historical cost
convention, with the exception of land and buildings which are held at
valuation.
The presentation and functional currency of the financial statements is
British Pounds and amounts are rounded to the nearest thousand pounds.
The financial information contained in this announcement does not constitute
the Group's statutory accounts for the year ended 31 March 2023 but is derived
from those accounts which have been audited and which will be filed with the
Registrar of Companies in due course.
The auditors' report on the Annual Report and Financial Statements for the
year ended 31 March 2023 was unqualified, did not draw attention to any
matters by way of emphasis and did not contain a statement under s498(2) or
s498(3) of the Companies Act 2006.
The 2023 Annual Report will be made available on the Company's website for the
purposes of the AIM Rules for Companies on Wednesday 12 July 2023.
Going concern
The Group and Company's business activities, together with the factors likely
to affect its future development, performance and position and the risks and
uncertainties have been considered along with any impact from the global
economic situation and any further impact of coronavirus.
The Directors have reviewed stress tests for future cashflows over the 18
months to 30 September 2024 to ensure there are sufficient financial
resources, together with income from existing contracts with a number of
customers, to cover budgeted future cashflows. On this basis, the Directors
have adopted the going concern basis in preparing these accounts.
3. Business and geographical segments
IFRS 8 Operating Segments requires these to be identified on the basis of
internal reports about components of the Group that are regularly reviewed by
the chief operating decision maker to allocate resources to the segments and
assess their performance.
Whilst having three product groups, the Group operates the business as a
single business with no separation into divisions or allocation or people or
assets to a particular division. The management team is responsible for all
three product groups with no individual having responsibility for a particular
product group. This is consistent with the internal reporting for management
purposes. Management does however monitor revenues by revenue type.
Information is presented to the Board on the revenue analysis below:
· Licenses
· Celebrus Cloud Hosting, support and maintenance
· Services
· Third party products
The revenue analysis set out below is consistent with that provided to the
Board of Directors.
Group
2023 2022
£'000 £'000
Licenses 8,198 6,137
Celebrus Cloud Hosting, support and maintenance 7,771 7,127
Services 3,173 4,194
Software revenues 19,142 17,458
Third party products 2,227 7,001
Revenue 21,369 24,459
Major customers (partners) over 10% of revenue
2023 2022
£'000 £'000 £'000 £'000
Customer 1 Customer 2 Customer 1 Customer 2
Licenses 2,061 4,444 2,086 1,577
Celebrus Cloud Hosting, support and maintenance 3,583 1,110 2,538 1,159
Services 30 - 2,337 17
Software revenues 5,674 5,554 6,961 2,753
Third party products 2,227 - 7,001 -
Revenue 7,901 5,554 13,962 2,753
Geographical information
Group
2023 2022
£'000 £'000
United States of America 11,055 16,859
United Kingdom 3,800 3,962
Rest of Europe 3,745 2,421
Others 2,769 1,217
21,369 24,459
The geographical revenue is determined by the domicile of the customer.
4. Adjusted profit before tax
2023 2022
£'000 £'000
Profit before tax 2,391 1,763
Amortisation of intangible assets 346 306
Share-based payment 856 678
Net foreign exchange differences (330) 93
Costs related to acquisition during the year - 36
Restructuring costs 513 390
Adjusted profit before tax 3,776 3,266
5 Earnings per share
The calculation of earnings per share is based on profit attributable to
owners of the parent and the weighted average number of ordinary shares in
issue during the year.
The adjusted earnings per share figures have been calculated based on earnings
before adjusted items. These have been presented to provide shareholders with
an additional measure of the Group's year-on-year performance.
For diluted earnings per share, the weighted average number of ordinary shares
in issue is adjusted to assume conversion of all dilutive potential ordinary
shares arising from share options granted to employees where the exercise
price is less than the market price of the Company's ordinary shares at the
year end.
Details of the adjusted earnings per share are set out below:
2023 2022
£'000 £'000
Profit attributable to owners of the parent 2,117 1,695
Amortisation of intangible assets 346 306
Share-based payment 856 677
Net foreign exchange differences (330) 93
Costs related to acquisition during the year - 36
Restructuring costs 513 390
Tax on the adjustments (340) (284)
Adjusted profit attributable to owners of the parent 3,162 2,913
2023 2022
No. No.
Basic weighted average number of shares, excluding own shares, in issue 40,004,526 40,240,799
Dilutive effect of share options 825,517 725,221
Diluted weighted average number of shares, excluding own shares, in issue 40,830,043 40,966,020
2023 2022
Pence Pence
per share per share
Basic Earnings per share 5.29 4.21
Diluted Earnings per share 5.18 4.14
Adjusted Basic Earnings per share 7.90 7.24
Adjusted Diluted Earnings per share 7.74 7.11
6. Dividends
2023 2022
£'000 £'000
Amounts recognised as distributions to equity holders
Final dividend for the year ended 31 March 2022 of 2.07p (for the year ended 831 805
31 March 2021: 2.00p) per share
Special dividend for the year ended 31 March 2022 of 12.5p 5,012 -
(31 March 2021: nil) per share
Interim dividend for the year ended 31 March 2023 of 0.88p (31 March 2022: 351 342
0.85p) per share
6,194 1,147
The proposed final dividend for the year ended 31 March 2023 of 2.15p is
subject to shareholder approval at the AGM and has not been included as a
liability in these financial statements. The final dividend is expected to be
paid on 25 August 2023 to shareholders on the register as at the close of
business on 21 July 2023.
7. Trade and other receivables
Non-current Group
2023 2022
£'000 £'000
Prepayments 181 -
Accrued Income 761 -
942 -
Current Group
2023 2022
£'000 £'000
Trade receivables 4,967 24,992
Other debtors 45 66
Prepayments 1,295 670
Accrued Income 1,255 1,657
7,561 27,385
2023 2022
£'000 £'000
Less than 30 days 1,211 2,699
31 to 60 days 3,693 52
61 to 90 days - 14
91 to 120 days 63 22,227
4,967 24,992
The majority of the debtors shown in 31-60 days were received in May 2023.
The average credit period taken on sales of goods and services was 108 days
(FY22: 111
days).
In accordance with IFRS 9, the Group performed a year end impairment exercise
to determine whether any write down in amounts receivable was required, using
an expected credit loss model. The expected loss rate for receivables less
than 120 days old is 0% and above 120 days has not been considered on the
basis of immateriality. In determining the recoverability of a trade
receivable the Group considers any change in the credit quality of the trade
receivable from the date credit was initially granted up to the reporting
date.
8. Trade and other payables
Group
2023 2022
£'000 £'000
Trade payables 585 840
Other taxes and social security 382 396
Other creditors 76 1,239
Contingent consideration - 500
Accruals 1,176 4,169
2,219 7,144
There is no material difference between the fair value of payables and their
carrying
value.
Trade payables comprise amounts outstanding for trade purchases and ongoing
costs. The average credit period taken for trade purchases is 14 days (FY22:
25 days). Their carrying value approximates to their fair value.
10. Investor presentation
The investor presentation will be available on the company's website
www.d4t4solutions.com/ (http://www.d4t4solutions.com/) later today.
Bill Bruno (CEO) and Ash Mehta (CFO) will provide a live presentation relating
to the full-year results via the Investor Meet Company platform today at
3.00pm BST.
Investors can sign up to Investor Meet Company for free and add to meet D4t4
via:
https://www.investormeetcompany.com/d4t4-solutions-plc/register-investor
(https://www.investormeetcompany.com/d4t4-solutions-plc/register-investor)
10. Annual Report and Accounts and Notice of AGM
The Notice of AGM will be made available, along with the shareholder proxy
form and the 2023 Annual Report and Accounts, on the company's website on 12
July 2023 and a notification will be posted to shareholders on the same day
for the purposes of the AIM Rules for Companies, and in accordance with the
Company's articles of association. Hard copies will also be available from the
Company's registered office Windmill House, 91-93 Windmill Road,
Sunbury-on-Thames, Middlesex, TW16 7EF.
11. Annual General Meeting
The 2023 Annual General Meeting of the Company will be held at 9am BST on
Wednesday 9 August at the Company's registered office. This will comprise
formal business only. The directors plan to broadcast a Q&A session later
in the day at 2pm BST, via the Investor Meet Company platform. Investors can
sign up to Investor Meet Company for free and add to meet D4t4 via:
https://www.investormeetcompany.com/d4t4-solutions-plc/register-investor
(https://www.investormeetcompany.com/d4t4-solutions-plc/register-investor)
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