REG - Dillistone Group PLC - Final Results & Investor Presentation
26/04/2022 07:00
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RNS Number : 2752J Dillistone Group PLC 26 April 2022
Dillistone Group Plc
("Dillistone", the "Company" or the "Group")
Final Results
& Investor Presentation
Dillistone Group Plc ("Dillistone", the "Company" or the "Group"), the AIM
quoted supplier of software for the international recruitment industry, is
pleased to announce its audited final results for the 12 months ended 31
December 2021.
Highlights:
· Performance ahead of expectations
o Revenue £5.6m (2020: £6.3m)
o Incoming orders up 18% in 2021 compared to 2020
o EBITDA(1) £1.0m (2020: £1.2m)
o Group returns to breakeven for the year (2020: £0.7m loss)
o Net debt £1.0m (2020: £0.9m)
o Cash at year end was £0.8m (2020: £1.3m)
· Recurring revenues(2) represent 89% (2020: 91%) of Group revenue
· Secured largest new Group client since the restructuring of the
business in January 2020
· Continued product development expenditure supporting strong start to
2022
· Talentis showing strong momentum going into 2022
Definitions:
1. Amounts based on segment EBITDA figures - see note 5
2. The component elements of recurring revenue are detailed in note 5.
Commenting on the results and prospects, Giles Fearnley, Non-Executive
Chairman, said:
"In my interim statement I highlighted that in our business, where a large
part of our revenue is contracted annually in advance, the impact of Covid
would be felt throughout the remainder of 2021. This proved to be the case as
recurring revenue decreased by 13% to £5.0m (89% of Group revenue (2020:
91%)) however we saw an uplift in orders in Q4 to pre-pandemic levels.
"The current year has begun well following on from the strong finish to 2021.
Growth in new business sales is helping us recover recurring revenue lost
during the pandemic and, while we are conscious of the potential impact of
ongoing economic turbulence, we are confident that the Group is well on the
way to recovery, with positive signs across our entire product range and an
exciting opportunity opening up with our new Talentis product."
Investor Presentation - 1pm on Thursday 28 April 2022
Jason Starr, Chief Executive, and Joanne Curd, Chief Financial Officer, will
hold a remote presentation at 1pm on Thursday 28 April 2022 to review the
results and introduce the Talentis executive search platform, Dillistone's
latest software release. Those interested in attending should register at
https://register.gotowebinar.com/register/9054920680771381264
(https://urldefense.proofpoint.com/v2/url?u=https-3A__register.gotowebinar.com_register_9054920680771381264&d=DwMFaQ&c=euGZstcaTDllvimEN8b7jXrwqOf-v5A_CdpgnVfiiMM&r=05PHl3GHdShYuaCii2fBRpoqaNr9B1d97X09daeosu0&m=ltc0VbYWjOqzDsznqIvuOjJngJy3jiUjD-Fv8xd7yQM&s=9DFlM_1SPQ-C-ki6KZI5aLRlt9Plaz9rQqNpSvAH1t0&e=)
or enquire at Dillistone@walbrookpr.com, or 0797 122 1972.
Annual Report and Accounts - The final results announcement can be downloaded
from the Company's website (www.dillistonegroup.com
(http://www.dillistonegroup.com) ). Copies of the Annual Report and Accounts
(in addition to the notice of the Annual General Meeting) will be sent to
shareholders by 20 May 2022 for approval at the Annual General Meeting to be
held on 15 June 2022.
This announcement contains inside information for the purposes of Article 7 of
EU Regulation 596/2014.
Enquiries:
Dillistone Group Plc
Giles Fearnley Chairman Via Walbrook PR
Jason Starr Chief Executive Officer
Joanne Curd Chief Financial Officer
WH Ireland Limited (Nominated adviser)
Chris Fielding Managing Director, Corporate Finance 020 7220 1650
Walbrook PR
Tom Cooper / Paul Vann tom.cooper@walbrookpr.com
020 7933 8780
0797 122 1972
Notes to Editors:
Dillistone Group Plc is a leader in the supply and support of software and
services to the recruitment industry. Dillistone operates through the Ikiru
People (www.IkiruPeople.com (https://www.ikirupeople.com/) ) brand.
The Group develops, markets and supports the Talentis, FileFinder, Infinity,
Mid-Office, ISV and GatedTalent products.
Dillistone was admitted to AIM, a market operated by the London Stock Exchange
plc, in June 2006.
Learn about our products:
Talentis Software:
https://www.talentis.global/recruitment-software/
(https://www.talentis.global/recruitment-software/)
Voyager Software:
https://www.voyagersoftware.com (https://www.voyagersoftware.com)
GatedTalent Services:
https://www.talentis.global/optimization-services/
(https://www.talentis.global/optimization-services/)
CHAIRMAN'S STATEMENT
After a challenging few years for the business, I am pleased to report a year
of progress and improvement, along with a sense that the business is in a
position to progress further in 2022.
In my interim statement I highlighted that in our business, where a large part
of our revenue is contracted annually in advance, the impact of Covid would be
felt throughout the remainder of 2021. This proved to be the case, however we
saw an uplift in orders in Q4 2021 to pre-pandemic levels.
Total revenue for the year was down 12% to £5.599m, with recurring revenue
falling 13% to £5.009m. There was an adjusted operating loss in 2021 of
£0.140m (2020: loss £0.166m) before acquisition related and other costs.
Administration costs reduced by 14% excluding acquisition related items and
other costs, depreciation and amortisation. The operating loss, including
reorganisation and acquisition related items, was £0.199m (2020: loss
£0.821m).
We maintained our investment in product development at £0.987m (2020:
£0.969m) which we view as key to the future growth of the Group. January 2021
saw the launch of Talentis
(https://www.talentis.global/recruitment-software/insights/
(https://www.talentis.global/recruitment-software/insights/) ). After a slow
start, Talentis is now growing rapidly and the Group is excited by the
opportunity that it presents.
In June 2021 we made the final payment of the 2 year bank loan that was
secured in June 2019 and the following month we commenced monthly payments on
the Government CBIL loan that we secured in June 2020 and which had a 12 month
grace period for capital repayments.
Dividends
The Group is not recommending a final dividend in respect of the year to 31
December 2021 (2020: nil).
Staff
I and the Board would like to pay tribute to our employees across the Group,
acknowledging their commitment and contribution in facing the challenges of
the last 12 months. They have risen to these challenges and continued to
deliver for our clients.
Corporate governance
It is the Board's duty to ensure that the Group is managed for the long-term
benefit of all stakeholders.
During the year in review, we welcomed Steve Hammond to the Group Board in
January 2021 and Joanne Curd in October. Steve joined as the Chief
Engineering Officer for the Group with responsibility for the development of
all group products. Joanne became our Chief Financial Officer replacing
Julie Pomeroy who moved to a Non-executive Director role for 12 months,
enabling us to continue to benefit from her expertise. I would also like to
thank Alex James who stepped down from the Board in September having
contributed extensively to the business over very many years.
Details of our governance processes and my role as Chairman of the Board are
included in the corporate governance section that follows the Strategic
Report.
Outlook
The current year has begun well following on from the strong finish to 2021.
Compared to the same period to 31 March in 2021, Q1 2022 incoming orders are
up by 41%, with all products performing broadly in line with, or better than
management expectations.
Our contingency recruiting products have enjoyed a strong start, driven by
increasingly strong performance by our Infinity product, which is proving to
be especially successful in the UK temporary recruitment sector.
In late 2021, we announced our largest new contract win since the Group's
restructuring, and we are pleased to announce that this implementation of
Infinity is now live and performing well.
Our executive search products, Talentis, FileFinder and GatedTalent, have also
enjoyed a strong start to the year. Talentis was launched in early 2021 and,
after a slow start, started to grow rapidly in the final weeks of 2021. While
recurring revenue reflects the slow start, we are pleased to report that
recurring revenue associated with the product is currently doubling every
three months, and is comfortably on track to maintain this into Q2 2022.
Driven by Talentis sales, March 2022 was, in terms of the number of new
executive search firm contract wins, the Group's best ever month, beating the
previous best of March 2010. While the majority of clients are small, the
Group expects this to change over time. While growing rapidly, annualised
recurring Talentis revenue is currently in mid five figures.
The Group continues to operate with a much lower cost base and as revenues
recover, the improved operational leverage, following the efficiencies
realised, will be reflected in overall performance. The Group is trading in
line with market expectations, holding £0.764m in cash as at 31 December 2021
and does not expect to raise additional funds.
Taking the above into account, the Board is optimistic for the future and will
issue a further update at the time of the AGM.
Giles Fearnley
Non-Executive Chairman
CEO's Review
Dillistone Group Plc is a global leader in the supply of solutions and
services to the recruitment sector worldwide, in both contingency recruitment
and executive search.
Contingency Recruitment Sector:
In the contingency recruitment sector, our products are primarily, but not
exclusively, used by UK recruitment agencies. Our products serving this sector
are:
· ISV.Online is an online skills testing product used by both
recruitment agencies and corporate recruiters and has a strong international
footprint. It allows recruiters and HR professionals to test individuals using
our extensive portfolio of existing tests or to create their own unique tests
to meet their requirements.
· MidOffice is a comprehensive pay & bill solution that allows
recruitment businesses and back office service providers to process timesheets
and bridges the gap between paying workers and invoicing clients. It can be
used standalone or integrated to other recruitment systems including our
Infinity product.
· Infinity is an established recruitment CRM used primarily by agencies
in the UK, but also with users in Asia and Australia. It enables recruitment
businesses to manage prospects, clients, candidates and jobs in one place and
offers deep integration to Office365 and other recruitment industry
complementary solutions. It is one of the few solutions in the UK market with
extensive functionality for permanent, contract and temporary jobs all in one
system.
During 2021
· We continued our ongoing investment in Infinity to give users in all
recruiting sectors additional benefits including: more comprehensive
application programming interfaces (APIs), more features to support remote
recruitment, improved security and further efficiencies in the temporary
recruitment workflows.
· December 2021 saw us win our largest new Infinity client since the
restructuring of the business in January 2020. The implementation has been
delivered successfully in 2022.
· Mid-Office is also furthering the temporary recruitment efficiencies
we've added to Infinity by taking these all the way through to the pay and
bill system and into the back office.
· ISV remains in its strong market position and is used by over half of
the UK's top 10 recruitment agencies. There is strong retention among key
accounts with significant multiple year renewals and an increased number of
new client wins.
Executive Search Sector:
Our primary products in the Executive Search sector are
· FileFinder is an established CRM product with thousands of users
Worldwide.
· GatedTalent is a service that helps recruiters source candidates and
candidates find jobs and;
· Talentis, our new product launched in January 2021.
During 2021 we maintained our commitment to development and product
enhancement.
· FileFinder: there has been a major project to move FileFinder to a
pure Cloud environment which is now live, with the majority of our users
serviced from the new platform. User benefits include significant speed gains,
while the Group benefits from reduced hosting cost. Costs are inflated in 2021
as the Group operated two platforms, continuing into early 2022 but at a
reduced scale with only a small number of clients remaining on the older
platform awaiting transfer.
· GatedTalent: extension of our service offering to include additional
B2C services including interview coaching. After a slow start, GatedTalent is
now cash generative and making a consistent contribution.
· Talentis is a next generation executive search / sourcing and
recruiting platform, announced in January 2021, with first revenue in May
2021, and strong momentum going into 2022:
o The Talentis TalentGraph now contains information on almost 250 million
potential candidates. For certain types of search, Talentis delivers far
superior search results through its Augmented Keyword Search technology than
current market alternatives.
o Most of Talentis' early adopters were existing group clients paying a
nominal fee or, in many cases, receiving the product for free. As a result,
while we received our first revenue in May 2021, the product experienced a
slow start.
o The slow start means that Talentis annual recurring revenue is currently
in the mid five figures. However, realised recurring revenue has doubled every
three months since launch, with particular acceleration since late Q4 2021.
This acceleration appears on track to continue into Q2 of 2022.
o Talentis became our most popular B2B product in the executive search space
in Q4 2021, based on the number of new client wins in the period. In Q1 2022,
it became our most popular B2B product across our entire product set based on
the same definition.
o Most paying customers are relatively small and are paying a modest
subscription fee. However, customer size and subscription value are both
expected to grow as the year progresses.
o Talentis has attracted new, paying customers to the Group from 14
countries across 4 continents. The United Kingdom and United States are
currently our two largest markets for the product.
o In April 2022, we were pleased to see that the Talentis Chrome Extension
was the first executive search focussed product (and one of very few
recruitment tools) to receive a "featured" accreditation from Google.
"Featured badges" are awarded by Google following a human review to products
that "follow Google's technical best practices and meet the company's higher
standard for user experience and design".
Strategy and Objectives
Our focus during the pandemic revolved around successfully protecting our
business while helping our clients and our staff through challenging times. We
can now concentrate on our long term strategy which is all about returning to
growth. While cost savings were made during the pandemic, we maintained our
product development expenditure and targeted it on growth opportunities.
This will be achieved by:
· Focusing on development expenditures on products serving the
executive recruiter sector globally and the contingent recruiting (permanent,
temporary and contract) sector.
· Having completed the withdrawal of Evolve from the market in 2019-20,
we are in the process of withdrawing a further legacy product from the market,
which will complete be in 2022.
· Consistently delivering "best in class" service to our clients, as
demonstrated by sector leading Trustpilot scores, despite significant cost
savings in recent years.
· Refreshing and reducing the size of the Board.
Whilst we have seen growing confidence in the recruitment markets around the
world, the global economic challenges that 2022 may bring means that we need
to remain focused and responsive to any factors that may hamper the business
from returning to growth and profitability.
Key Performance Indicators (KPIs)
The key KPIs for 2021 were:
KPI 2021 outcome
Maintain a strong and stable financial position £0.764m cash at year end
Protect and prioritise our product and development efforts £0.987m development spend in year
Financial Review
Total revenues decreased by 12% to £5.599m in 2021 (2020: £6.332m) with
recurring revenues decreasing by 13% to £5.009m (2020: £5.745m) and
non-recurring revenues by 12% to £0.427m (2020: £0.485m). Third party
revenue amounted to £0.163m in the period (2020: £0.102m).
Cost of sales increased to £0.685m (2020: £0.584m). Administrative expenses
reduced by 22% to £5.113m (2020: £6.569m), and were covered 127% (2020:
125%) by recurring revenues. This was in part due to the full year impact of
the 2020 cost base reductions.
Depreciation and amortisation (excluding acquisition related amortisation and
one-off write-offs) decreased to £1.122m (2020: £1.334m).
Acquisition related and other costs totalled £0.059m (2020: £0.655m) and
were in respect of:
· the amortisation of intangibles arising from acquisitions £0.213m
(2020: £0.213m).
· grants received from overseas £0.160m (2020: £0.071m)
· other costs of £0.006m (2020: £0.513m)
The Group benefitted from an income tax credit in 2021 of £0.302m (2020:
credit £0.251m). The 2021 credit reflects the Research and Development
(R&D) tax credits available in the UK with the assumption that tax losses
will be surrendered for the R&D tax credit payment where possible. It
also reflects a prior year adjustment of a credit of £0.181m as the tax
computations in respect of prior years were finalised and agreed.
Loss for the year before acquisition related and reorganisation and other
costs amounted to £0.140m (2020: loss £0.166m). The 2021 adjusted loss
benefitted from tax income of £0.287m (2020: tax income of £0.143m). The
statutory profit for the year was £0.004m (2020: loss £0.663m). Basic
profit/(loss) per share (EPS) was 0.02p (2020: (3.37)p). Fully diluted EPS
was to 0.02p (2020: (3.37)p). Adjusted basic EPS increased to 0.24p (2020:
(0.59)p).
Capital expenditure
The Group invested £1.008m in property, plant and equipment and product
development in 2021 (2020: £0.971m) of which £0.987m (2020: £0.969m)
related to capitalised development costs.
Trade and other payables
As with previous years, the trade and other payables includes deferred income
of £1.639m (2020: £2.029m), i.e. income which has been billed in advance but
is not recognised as income at that time. This principally relates to
support, SaaS, cloud hosting renewals and other subscriptions, which are
billed in 2021 in respect of services to be delivered in 2022. It also
includes licence revenue for which a support contract is required, and which
is spread over 5 years under IFRS15. Contractual income is recognised
monthly over the period to which it relates. It also includes deposits taken
for work which has not yet been completed; as such income is only recognised
when the work is substantially complete, or the client software goes "live".
Cash and debt
The Group finished the year with cash funds of £0.764m (2020: £1.291m). The
Group completed repayment of the June 2019 loan in June 2021. The Group
obtained a loan of £1.5m in June 2020 under the Government CBIL scheme, which
is repayable over 6 years with no repayment in the first year, monthly
repayments commenced in July 2021.
Bank borrowings at 31 December 2021 were therefore £1.350m (2020: £1.804m).
The Group also had a convertible loan of £0.400m (2020: £0.408m) which will
not be repaid until the CBIL loan has been repaid.
Jason Starr
Chief Executive Officer
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
2021 2020
Note £'000 £'000
Revenue 5 5,599 6,332
Cost of sales (685) (584)
Gross profit 4,914 5,748
Administrative expenses (5,113) (6,569)
Operating loss (199) (821)
Adjusted operating (loss) before acquisition related, reorganisation and other 4 (140) (166)
items
Acquisition related, reorganisation and other items 7 (59) (655)
Operating (loss) (199) (821)
Financial cost (99) (93)
(Loss) before tax (298) (914)
Tax income 8 302 251
Profit/(loss) for the year 4 (663)
Other comprehensive income/(loss)
Items that will be reclassified subsequently to profit and loss:
Currency translation differences 4 12
Total comprehensive profit/(loss) for the year 8 (651)
Earnings per share
Basic 9 0.02p (3.37)p
Diluted 9 0.02p (3.37)p
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
Share capital Share Merger Convertible Retained Share options Foreign exchange Total
premium reserve loan reserve earnings
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2020 983 1,631 365 14 871 94 47 4,005
Comprehensive income
Loss for the year - - - - (663) - - (663)
Other comprehensive income
Exchange differences on translation of overseas operations - - - - - - 12 12
Total comprehensive loss - - (663) - 12 (651)
Transactions with owners
Share option charge - - - - - 16 - 16
Total transactions with owners - - - - - 16 - 16
Balance at 31 December 2020 983 1,631 365 14 208 110 59 3,370
Comprehensive income
Profit for the year - - - - 4 - - 4
Other comprehensive income
Exchange differences on translation of overseas operations - - - - - - 4 4
Total comprehensive loss - - - - 4 - 4 8
Transactions with owners
Share option charge - - - 50 (46) - 4
Total transactions with owners - - - - 50 (46) - 4
Balance at 31 December 2021 983 1,631 365 14 262 64 63 3,382
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2021
Group
2021 2020
£'000 £'000
ASSETS
Non-current assets
Goodwill 3,415 3,415
Other intangible assets 3,142 3,362
Property, plant and equipment 25 24
Right of use assets 592 680
Investments - -
Total non-current assets 7,174 7,481
Current assets
Trade and other receivables 615 883
Current tax receivable 29 186
Cash and cash equivalents 764 1,291
Total current assets 1,408 2,360
Total assets 8,582 9,841
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital 983 983
Share premium 1,631 1,631
Merger reserve 365 365
Convertible loan reserve 14 14
Retained earnings 262 208
Share option reserve 64 110
Foreign exchange reserve 63 59
Total equity 3,382 3,370
Liabilities
Non-current liabilities
Trade and other payables 238 271
Lease liabilities 560 638
Borrowings 1,450 1,749
Deferred tax liability 210 296
Total non-current liabilities 2,458 2,954
Current liabilities
Trade and other payables 2,347 2,953
Lease liabilities 95 103
Borrowings 300 461
Total current liabilities 2,742 3,517
Total liabilities 5,200 6,471
Total liabilities and equity 8,582 9,841
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2021
For the year ended 31 December 2021 For the year ended 31 December 2021 For the year ended 31 December 2020 For the year ended 31 December 2020
Operating activities £'000 £'000 £'000 £'000
Loss before tax (298) (914)
Adjustment for
Financial cost 99 93
Depreciation and amortisation 1,335 1,984
Share option expense 3 16
Foreign exchange adjustments arising from operations 10 (28)
Operating cash flows before movement in working capital 1,149 1,151
Decrease in receivables 268 360
Decrease in payables (639) (1,120)
Taxation refunded 373 314
Net cash generated from operating activities 1,151 705
Investing activities
Purchases of property, plant and
equipment (21) (2)
Investment in development costs (987) (969)
Net cash used in investing activities (1,008) (971)
Financing activities
Interest paid (99) (84)
Proceeds from bank loan - 1,500
Bank loan repayments made (461) (166)
Lease payments made (104) (114)
Repayment of banking facility - (288)
Net cash (used in)/generated from financing activities (664) 848
Net (decrease)/increase in cash and cash equivalents (521) 582
Cash and cash equivalents at beginning of the year 1,291 690
Effect of foreign exchange rate changes (6) 19
Cash and cash equivalents at end of year 764 1,291
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
1. Publication of non-statutory accounts
In accordance with section 435 of the Companies Act 2006, the Directors advise
that the financial information set out in this announcement does not
constitute the Group's statutory financial statements for the year ended 31
December 2021 or 2020, but is derived from these financial statements. The
financial statements for the year ended 31 December 2020 have been audited and
filed with the Registrar of Companies. The financial statements for the year
ended 31 December 2021 have been prepared in accordance with UK-adopted
international accounting standards, IFRIC Interpretations and the Companies
Act 2006. The financial statements for the year ended 31 December 2021 have
been audited and will be filed with the Registrar of Companies following the
Company's Annual General Meeting. The Independent Auditors Report on the
Group's statutory financial statements for the years ended 31 December 2021
and 2020 were unqualified and did not draw attention to any matters by way of
emphasis and did not contain statements under Section 498(2) or (3) of the
Companies Act 2006.
2. Basis of preparation
The preliminary announcement is extracted from the consolidated financial
statements of the Group. The financial statements of the subsidiaries are
prepared for the same reporting date as the parent company. Consistent
accounting policies are applied for like transactions and events in similar
circumstances.
All intra-group balances, transactions, income and expenses and profits and
losses resulting from intra-group transactions that are recognised in assets
or liabilities are eliminated in full.
The Group's business activities and financial position, together with the
factors likely to affect its future development, performance and position have
been taken into account in considering the Group's adoption of the going
concern basis. Together with the financial statements, notes, net current
liability position and cash flows for the year ended 31 December 2021. The
Group prepare 3 year budgets and cash flow forecasts to ensure that the Group
can meet its liabilities as they fall due.
The Group meets its day to day working capital requirements through its cash
balance. It has in place a £1.5m CBIL loan, secured in June 2020, repayable
over 6 years with capital repayments commencing from July 2021. The Group did
not have an overdraft at the year-end and paid-off a two year bank loan in
June 2021. The Group's forecasts, taking into account the Board's future
expectations of the Group's performance, indicate that there is sufficient
headroom within its CBIL loan facility. Compliance with the CBIL covenant has
been considered and based on management expectations and actions, that could
practically be taken, the directors do not consider any reasonable risk to
arise from this.
The cash flow forecasts have been stress tested reviewing assumptions around
new and existing business with growth and renewal rates being reduced. A
reverse stress test was also prepared to review what reduction in revenue
would be necessary to breach overdraft limits in 2022.
As at the date of this report, the directors have a reasonable expectation
that the Company and the Group have adequate resources to continue in
operational existence for the foreseeable future. For this reason, they
continue to adopt the going concern basis in preparing the financial
statements.
3. Accounting policies
This preliminary announcement has been prepared in accordance with the
accounting policies adopted in the last annual financial statements for the
year to 31 December 2020.
4. Reconciliation of adjusted profits to consolidated
statement of comprehensive income
Note Adjusted profits Acquisition related, reorganisation and other costs Adjusted profits Acquisition related reorganisation and other costs
2021 2021* 2021 2020 2020* 2020
£'000 £'000 £'000 £'000 £'000 £'000
Revenue 5,599 - 5,599 6,332 - 6,332
Cost of sales (685) - (685) (584) - (584)
Gross profit 4,914 - 4,914 5,748 - 5,748
Administrative expenses (5,054) (59) (5,113) (5,914) (655) (6,569)
Operating (loss) (140) (59) (199) (166) (655) (821)
Financial income - - - - - -
Financial cost (99) - (99) (93) - (93)
(Loss) before tax (239) (59) (298) (259) (655) (914)
Tax income 287 15 302 143 108 251
Profit/(loss) for the year 48 (44) 4 (116) (547) (663)
Other comprehensive loss net of tax:
Currency translation differences 4 - 4 12 - 12
Total comprehensive profit/(loss) for the year net of tax 52 (44) 8 (104) (547) (651)
Earnings per share
Basic 10 0.24p - 0.02p (0.59)p - (3.37)p
Diluted 10 0.24p - 0.02p (0.59)p - (3.37)p
* See note 7
5. Segment reporting
Divisional segments Ikiru People Central Total Ikiru People Central Total
2021 2021 2021 2020 2020 2020
£'000 £'000 £'000 £'000 £'000 £'000
Segment revenue 5,599 - 5,599 6,332 - 6,332
Segment EBITDA 953 29 982 1,211 (43) 1,168
Depreciation and amortisation expense (1,122) - (1,122) (1,334) - (1,334)
Segment result before reorganisation and other costs (169) 29 (140) (123) (43) (166)
Reorganisation and other costs 154 - 154 (442) - (442)
Segment result (15) 29 14 (565) (43) (608)
Acquisition related amortisation - (213) (213) - (213) (213)
Operating (loss) (15) (184) (199) (565) (256) (821)
Loan interest/ lease interest (35) (64) (99) (39) (54) (93)
Loss before tax (298) (914)
Income tax income 302 251
Profit/(loss) for the year 4 (663)
Additions of non-current assets 1,028 1,028 1,006 1,006
Products and services
The following table provides an analysis of the Group's revenue by products
and services:
Revenue
2021 2020
£'000 £'000
Recurring income 5,009 5,745
Non-recurring income 427 485
Third party revenues 163 102
5,599 6,332
In the table above 'Recurring income' represents all income recognised over
time, whereas 'Non-recurring income' and 'Third party revenues' represent all
income recognised at a point in time.
Recurring income includes all support services, SaaS and hosting income and
revenue on perpetual licenses with mandatory support contracts deferred under
IFRS 15. Non-recurring income includes sales of new licenses which do not
require a support contract, and income derived from installing licences
including training, installation and data translation. Third party revenues
arise from the sale of third party software.
It is not possible to allocate assets and additions between recurring,
non-recurring income and third party revenue. No customer represented more
than 10% of revenue of the Group in 2021 or 2020.
6. Geographical analysis
The following table provides an estimated of the Group's revenue by geographic
market based on the Customers' country. This is provided for information
only as the Board does not review the performance of the business from a
geographical viewpoint.
Revenue
2021 2020
£'000 £'000
UK 3,933 3,717
Europe 762 877
Americas 526 1,074
Australia 140 295
ROW 238 369
5,599 6,332
Non-current assets by geographical location
2021 2020
£'000 £'000
UK 7,169 7,460
US 1 1
Australia 4 20
7,174 7,481
7. Acquisition related, reorganisation and other costs
2021 2020
£'000 £'000
Included within administrative expenses:
Reorganisation and other costs 6 78
US government loan (Payment Protection Program) (154) -
Australian government grant (6) (71)
Amortisation of acquisition intangibles 213 213
Write-off of capitalised development - 435
59 655
Reorganisation and other costs include severance payments and loss of office
payments. The write-off of capitalised development relates to a product that
is no longer actively sold.
8. Tax income
2021 2020
£'000 £'000
Current tax (96) (99)
Prior year adjustment - current tax (121) (108)
Total current tax (217) (207)
Deferred tax (35) (123)
Prior year adjustment - deferred tax (60) 80
Deferred tax rate change to 25% (2020: 19.0%) 50 40
Deferred tax re acquisition intangibles (40) (41)
Total deferred tax (85) (44)
Tax (income) for the year (302) (251)
Factors affecting the tax credit for the year
Loss before tax (298) (914)
UK rate of taxation 19.0% 19.0%
Loss before tax multiplied by the UK rate of taxation (57) (174)
Effects of:
Overseas tax rates (6) 1
Impact of deferred tax not provided (1) 8
Enhanced R&D relief (146) (143)
Disallowed expenses 18 14
Deferred tax rate change to 25% (2020: 19.0%) 41 40
Rate difference between CT rate and rate of R&D repayment 30 31
Prior year adjustments (181) (28)
Tax (income) (302) (251)
9. Earnings per share
2021 2020
Using adjusted profit 2021 Using adjusted profit 2020
Profit/(loss) attributable to ordinary shareholders (note 2) £48,000 £4,000 £(116,000) £(663,000)
Weighted average number of shares 19,668,021 19,668,021 19,668,021 19,668,021
Basic profit/(loss) per share 0.24 p 0.02 p (0.59) p (3.37) p
Weighted average number of shares after dilution 19,668,021 19,668,021 19,670,013 19,670,013
Fully diluted profit/(loss) per share 0.24 p 0.02 p (0.59) p (3.37) p
Reconciliation of basic to diluted average number of shares:
2021 2020
Weighted average number of shares (basic) 19,668,021 19,668,021
Effect of dilutive potential ordinary shares - employee share plans - 1,992
Weighted average number of shares after dilution 19,668,021 19,670,013
There are 493,337 (2020: 953,337) share options not included in the above
calculations, as they are underwater or have been forfeited.
The impact of the convertible loan notes in the period is not dilutive and
therefore does not impact the calculation of the fully diluted earnings per
share.
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