REG - Dillistone Group PLC - Final Results & Investor Presentation
25/04/2023 07:00
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RNS Number : 2890X Dillistone Group PLC 25 April 2023
25 April 2023
Dillistone Group Plc
("Dillistone", the "Company" or the "Group")
Final Results
& Investor Presentation
Dillistone Group Plc, 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 2022.
Highlights
· Revenue increased by 2% to £5.699m. First revenue growth since 2016.
· Adjusted(*) loss before tax decreased to £0.453m (2021: £0.687m) -
an improvement of 34%.
· Adjusted(*) EBITDA increased to £0.949m (2021: £0.747m) - an
improvement of 27%.
· Recurring revenues represented 89% (2021: 89%) of Group revenue,
which covers administration expenses (excluding depreciation and
amortisation).
· Total Annual Contract Value (TACV) up 4% to £4.99m (2021: £4.79m)
· Order book increased by 3% year on year.
· Adjusted operating cash from operating activities 45% up at £1.189m
(2021: £0.819m).
· Cash at period end of £0.433m. The Board does not expect the Group
to require additional funding.
Commenting on the results and prospects, Giles Fearnley, Non-Executive
Chairman, said:
"I am pleased to report continued progress for 2022, delivering financial
performance in line with expectations while paying down debt, delivering
sector leading customer service and continuing to invest for the future."
"The underlying business has improved. The Group has increased revenue,
decreased adjusted loss and improved cash generation. We have delivered on our
strategy and present results in line with market expectations."
"The Board is pleased to report a positive start to the year. We expect to see
year on year growth in recurring revenue across both our Executive Search and
Contingency sectors in H1 and remains confident of achieving market
expectations for the full year."
Definitions:
* EBITDA adjusted for furlough support
* Operating cash adjusted for Government support received
* (Loss) before tax adjusted for furlough, Government support and
exceptional costs associated with Covid
* TACV is the total annual recurring revenue of all signed contracts,
whether invoiced and included in deferred revenue or still to be
deployed and/or not yet invoiced
See note 7 for a reconciliation to adjusted figures
Investor Presentation: 3pm on Tuesday 25 April 2023
Jason Starr, Chief Executive, and Ian Mackin, Finance Director, will hold an
investor presentation to cover the results and prospects at 3pm on Tuesday 25
April 2023.
The presentation will be hosted through the digital platform Investor Meet
Company. Investors can sign up to Investor Meet Company and add to meet
Dillistone Group Plc via the following link
https://www.investormeetcompany.com/dillistone-group-plc/register-investor
(https://www.investormeetcompany.com/dillistone-group-plc/register-investor) .
For those investors who have already registered and added to meet the Company,
they will automatically be invited.
Questions can be submitted pre-event to dillistone@walbrookpr.com or in real
time during the presentation via the "Ask a Question" function.
Mello Investor Conference, Chiswick, London - Tuesday 23 and Wednesday 24 May
2023
Dillistone announces that it expects to present at the Mello investor
conference in Chiswick, London, on Tuesday 23 and Wednesday 24 May 2023.
Investors wishing to attend can find more details at www.melloevents.com
(http://www.melloevents.com) .
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 19 May 2023 for approval at the Annual General Meeting to be
held on 13 June 2023.
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
Ian Mackin Finance Director
WH Ireland Limited (Nominated adviser)
Chris Fielding Managing Director, Corporate Finance 020 7220 1650
Walbrook PR
Tom Cooper / Joe Walker 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
I am pleased to report continued progress in 2022, delivering financial
performance in line with expectations while paying down debt, delivering
sector leading customer service and continuing to invest for the future.
The underlying business has improved. The Group has increased revenue,
decreased adjusted loss and improved cash generation. We have delivered on our
strategy and present results in line with market expectations.
The Group achieved its first annual total and recurring revenue growth since
2016. Total revenue for the year was up 2% to £5.699m, with recurring revenue
increasing 1% to £5.051m.
For the purposes of obtaining true comparatives, we focus on measures which
are adjusted to remove items of Government support, acquisition related or
exceptional items, to better understand the underlying business.
Excluding furlough and Government support received in 2021, adjusted EBITDA
increased by 27% to £0.949m (FY2021: £0.747m). The adjusted operating loss
before acquisition related, furlough and other items fell by 58% to (£0.156m)
(FY2021: (£0.375m)).
Adjusted net cash from operating activities, excluding Government support, is
up 45% at £1,189m (FY2021: £0.819m) with a similarly adjusted net change in
cash and cash equivalents up 58% at (£0.362m) (FY2021: (£0.853m)).
Dividends
The Group is not recommending a final dividend in respect of the year to 31
December 2022 (2021: 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 few years. It is as a result of their combined efforts that we are
heading into 2023 with optimism.
Corporate governance
It is the Board's duty to ensure that the Group is managed for the long-term
benefit of all stakeholders.
We welcomed Ian Mackin to the Group Board as Finance Director in June,
stepping up from Financial Controller. Ian replaced Joanne Curd who resigned
to further pursue her voluntary works.
Outlook
Current economic conditions are challenging for the recruitment industry and
as a result we have seen a number of our existing clients reduce headcount -
and therefore licences - and new client signups are typically of lower value
than anticipated.
Generally speaking, any economic slowdown is likely to impact our executive
search clients more than our contingency ones. However, despite this
environment, we are pleased to see that in Q1 2023, our next generation
executive search software, Talentis was our best performing product in terms
of both number of new client sales and TACV growth. Individual order values
remain low, partly reflecting the state of the market, but the Group expects
this to change as the economy recovers.
The Board is pleased to report a positive start to the year. We expect to see
year on year growth in recurring revenue across both our Executive Search and
Contingency sectors in H1 and remain confident of achieving market
expectations for the full year.
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, working with executive search,
contingent recruiting and in-house staffing teams in over 1,200 organisations.
We split our products into two groups - products primarily targeting
contingency recruiters (largely, but not exclusively, in the United Kingdom)
and products targeting executive search firms and in-house executive search
teams across the globe.
Contingency recruitment products:
Our products serving this sector are:
· Infinity, which 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;
· ISV.Online, which is an online skills testing product used by both
recruitment agencies and corporate organisations 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; and
· Mid-Office, which 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.
Contingency review:
· We delivered strong growth in the recurring revenue associated with
this part of our business, generating a combined £3.44m in recurring revenue,
(FY2021 £3.04m revenue) an increase of 13%.
· In December 2021 we announced a major contract win. We are pleased to
report this was successfully implemented in H1 2022 and the client is now an
active reference site.
· Summer 2022 saw us win a similarly sized contract and this was
successfully implemented in H2. Once again, the client - who switched from a
direct competitor - is now an active reference site for us.
Since year end, we have announced what has the potential to be our largest
contract win yet, and we expect to deliver a large part of this contract in
2023.The year saw us discontinue our legacy VDQ product. During the year we
were able to successfully migrate over half of our VDQ customers to the
Infinity platform. Infinity offers greater functionality and is priced at a
premium to VDQ. As a result, recurring revenue from this group of clients grew
by 96% over the year.
Infinity is used by permanent, contract and temporary recruitment agencies.
However, an increasing percentage of our new contract wins are from firms that
are focussed, at least in part on the temporary recruitment sector, validating
our decision to focus our efforts on this sector of the market.
Many of our Infinity clients also use our Mid-Office product to facilitate
payments to temporary staff. We have also continued to develop this product
and expect to deliver a significant upgrade to this product during the second
quarter.
Our ISV.online skill testing product continues to generate meaningful revenue,
with half of the UK's largest 10 recruiters using the platform.
Executive Search products:
Our primary products in the Executive Search sector are:
· FileFinder, which is an established CRM product with thousands of
users Worldwide.
· GatedTalent, which is a service that helps recruiters source
candidates and candidates find jobs and;
· Talentis, which is our latest product targeting executive recruiters
and is used for both candidate research and sourcing and as an executive
recruiting CRM.
Executive search review:
We are pleased to report that we have arrested the decline in revenue for
executive search products. Having seen revenue for these products fall 24% in
2021, revenue fell by 10% in 2022 totalling £2.258m compared to £2.512m in
2021. However, performance in H2 improved to a percentage fall of only 6%
compared to the same period in 2021. This trend of improvement is continuing
in 2023, with Q1 revenue above that of Q1 2022.
The largest contribution to our executive search revenues came from
FileFinder, our established executive search CRM product. The Group has
invested in architectural improvements for the platform over recent years and
this has improved the user experience while also allowing us to deliver the
platform in a more cost effective manner. This, combined with our decision to
make our new Talentis platform available at no charge to most FileFinder
clients, has certainly improved our ability to retain clients on this product.
GatedTalent is used by a number of FileFinder clients to support GDPR
compliance, whilst also offering recruiters candidate sourcing functionality.
Further revenue is generated from an array of B2C products. The product
continues to make a financial contribution in its own right and remains cash
generative.
Talentis is our next generation executive search software platform, providing
a combination of both candidate sourcing and project management / CRM
functionality. Since launch in Q1 2021, recurring revenue has grown every
quarter, and this trend continued into Q1 2023.
The Group believes that the Talentis platform is unique in its scope, which is
reflected by the global span of its user base. Paying clients can now be found
on every continent apart from Antarctica, with North America becoming the
fastest growing region in recent months.
We are continuing to develop this, with significant enhancements expected in
Q2-Q3.
The Board expects Talentis revenue growth to continue and remains very excited
about the potential for the product.
Delivering more, with less.
All of our Group products are developed, sold and supported by our Ikiru
People operating business. Our drive to improve efficiency has seen us reduce
headcount by 37% from its peak, while maintaining what we believe to be market
leading levels of customer service. Indeed, the Ikiru People TrustPilot score
of 4.8 (at 24/04/2023 based on 731 reviews) is, at the time of writing,
unmatched by any of our direct competitors. This speaks volumes for the
performance of our team, and I would like to place on record my appreciation
for the effort and aptitude they show for delivering exceptional service to
our clients.
KPIs and financial performance
As is noted in the financial review, the Group's operational performance has
improved significantly in recent years, although the extent of the improvement
has been masked somewhat in 2022 by the impact of Government Covid support
received in 2021 but not repeated in 2022.
FY22 FY21 % Move Success measure used by management
£'000 £'000
Total revenue 5,699 5,599 2% Year on Year Improvement
Recurring revenue 5,051 5,009 1% Year on Year Improvement
Adjusted EBITDA * 949 747 27% Year on Year Improvement
Adjusted Operating Cash ** 1,189 819 45% Year on Year Improvement
Adjusted (loss) before tax *** (453) (687) 34% Year on Year Improvement
* EBITDA adjusted for furlough support
** Operating cash adjusted for Government support received
*** (Loss) before tax adjusted for furlough, Government support and
exceptional costs associated with Covid
Strategy
Over recent years, we have reduced the size of our product range while broadly
maintaining consistent levels of product development expenditure. In 2022,
product development equated to 17.4% of revenues (2021: 17.6%) and we believe
that the Group is now increasingly seeing the benefit of this. While the
economic climate is challenging, our ability to win ever larger contracts in
our contingent product group, while ending the decline in our executive search
revenue, validates our decisions. We intend to maintain our current focus, and
2023 will see us deliver significant improvements to users of both our product
groups.
Jason Starr
Chief Executive Officer
Financial Review
Summary
The Group saw progress on the financial turnaround of the business.
· Total revenue and recurring revenue grew for the first time since
2016
· Adjusted EBITDA, excluding furlough support, increased by 27%
· Adjusted operating loss, before furlough, acquisition, reorganisation
and other items, down by 58%
· Adjusted net cash from operating activities increased by 45%
This was achieved whilst maintaining the level of investment in our products.
Revenue
Group revenue increased by 2% to £5.699m from £5.599m in FY2021
Revenue by type FY 2022 FY 2021 % Change
£'000 £'000
Recurring revenue 5,051 5,009 0.8%
Non-recurring revenue 488 427 14.3%
Third party revenue 160 163 (1.8%)
5,699 5,599 1.8%
Recurring revenue % 89% 89% -
Gross profit margin
The gross margin reduced to 86% from 88%. Going forward, the management team
is focused on driving improvements to gross margin through revenue growth,
whilst maintaining a stable cost base. With Talentis having our highest
marginal profit percentage, growth in Talentis should help drive improvements
to gross margin.
Adjusted EBITDA*
The adjusted EBITDA* increased by 27% to £0.949m from £0.747m in FY2021.
This resulted in a higher EBITDA margin of 16.7%, compared to 13.3% in FY2021,
reflecting the Group's leaner headcount profile, whilst maintaining our
customer service.
Operating profit/(loss) and profit/(loss) before tax
The operating loss, before acquisition related, reorganisation and other
items, increased by 11% to stand at (£0.156m) from (£0.140m) in FY2021.
However, in 2021, the Group received £0.235m in furlough support not received
in 2022. Taking this into account, performance improved greatly with a 58%
reduction in loss to (£0.156m) from (£0.375m) in FY2021.
Inclusive of acquisition related, reorganisation and other items, the
operating loss increased to (£0.319m) from (£0.199m) in FY2021.
The loss before tax increased to (£0.453m) from (£0.298m) in FY2021. Using a
like for like measure, excluding Government and furlough support of £0.395m,
the comparative figure for FY2021 is (0.693m).
Taxation
The net tax credit for the year £0.270m (FY 2021: £0.302m).
Balance sheet
The Group's net assets decreased slightly to £3.223m (FY 2021: £3.382m)
Trade and other receivables decreased slightly to £0.608m (FY 2021:
£0.615m). Trade and other payables also decreased slightly to £2.341m
(FY2021: £2.347m).
R&D development
The Group capitalised £1.007m in development costs in the year (FY 2021:
£0.987m) as the business continued its commitment to developing its products.
Amortisation of development costs was £0.980m (FY 2021: £0.946m)
Financing
The Group continues to pay down its debt. Following the repayment of the June
2019 loan in June 2021, repayment of the Government CBIL loan received in June
2020 is now well underway. This loan of £1.5m is repayable over 6 years, with
monthly repayments having commenced in July 2021.
As a result, bank borrowings at 31 December 2022 were £1.050m (2021:
£1.350m). The Group also has a convertible loan of £0.400m (2021: £0.400m),
which will not be repaid until the CBIL loan has been repaid.
Cashflow
Net cash from normalised operating activities (before government support)
increased 45% to £1.189m (FY2021: £0.819m). Adjusted net change in cash
before government support improved by 58% to (£0.362m) (FY2021: (£0.853m)).
The Group finished the year with cash funds of £0.433m (2021: £0.764m).
Summarised cashflow FY 2022 FY 2021
£'000 £'000
Adjusted net cash from normalised operating activities 1,189 819
Investing Activities - net (1,022) (1,008)
Financial Activities - net (529) (664)
Adjusted Net change in cash and cash equivalents (362) (853)
Adjustment for Government Support - 332
Net change in cash and cash equivalents (362) (521)
Cash and cash equivalents at beginning of year 764 1,291
Effect of foreign exchange rate changes 31 (6)
Cash and cash equivalents at 31(st) December 433 764
Going forward, the Board and management teams are focused on increasing
revenues whilst improving the Group's profitability and cash generation.
Ian Mackin
Finance Director
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
2022 2021
Note £'000 £'000
Revenue 5 5,699 5,599
Cost of sales (816) (685)
Gross profit 4,883 4,914
Administrative expenses (5,202) (5,113)
Operating loss (319) (199)
Adjusted operating (loss) before acquisition related, reorganisation and other 4 (156) (140)
items
Acquisition related, reorganisation and other items 7 (163) (59)
Operating (loss) (319) (199)
Financial cost (134) (99)
(Loss) before tax (453) (298)
Tax income 8 270 302
(Loss)/profit for the year (183) 4
Other comprehensive income/(loss)
Items that will be reclassified subsequently to profit and loss:
Currency translation differences 7 4
Total comprehensive (loss)/profit for the year (176) 8
Earnings per share
Basic 9 (0.93p) 0.02p
Diluted 9 (0.93p) 0.02p
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
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 2021 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
Comprehensive income
Loss for the year - - - - (183) - - (183)
Other comprehensive income
Exchange differences on translation of overseas operations - - - - - - 7 7
Total comprehensive loss - - - - (183) - 7 (176)
Transactions with owners
Share option charge - - - 14 3 - 17
Total transactions with owners - - - - 14 3 - 17
Balance at 31 December 2022 983 1,631 365 14 93 67 70 3,223
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
Group
2022 2021
£'000 £'000
ASSETS
Non-current assets
Goodwill 3,415 3,415
Other intangible assets 2,990 3,142
Property, plant and equipment 25 25
Right of use assets 498 592
Investments - -
Total non-current assets 6,928 7,174
Current assets
Trade and other receivables 608 615
Current tax receivable 72 29
Cash and cash equivalents 433 764
Total current assets 1,113 1,408
Total assets 8,041 8,582
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 93 262
Share option reserve 67 64
Foreign exchange reserve 70 63
Total equity 3,223 3,382
Liabilities
Non-current liabilities
Trade and other payables 241 238
Lease liabilities 483 560
Borrowings 1,150 1,450
Deferred tax liability 226 210
Total non-current liabilities 2,100 2,458
Current liabilities
Trade and other payables 2,341 2,347
Lease liabilities 77 95
Borrowings 300 300
Total current liabilities 2,717 2,742
Total liabilities 4,805 5,200
Total liabilities and equity 8,041 8,582
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
For the year ended 31 December 2022 For the year ended 31 December 2022 For the year ended 31 December 2021 For the year ended 31 December 2021
Operating activities £'000 £'000 £'000 £'000
Loss before tax (453) (298)
Adjustment for
Financial cost 134 99
Depreciation and amortisation 1,268 1,335
Share option expense 17 3
Foreign exchange adjustments arising from operations (24) 10
Operating cash flows before movement in working capital 942 1,149
Decrease in receivables 20 268
Decrease in payables (16) (639)
Taxation refunded 243 373
Net cash generated from operating activities 1,189 1,151
Investing activities
Purchases of property, plant and
equipment (15) (21)
Investment in development costs (1,007) (987)
Net cash used in investing activities (1,022) (1,008)
Financing activities
Interest paid (134) (99)
Bank loan repayments made (300) (461)
Lease payments made (95) (144)
Net cash (used in)/generated from financing activities (529) (664)
Net (decrease)/increase in cash and cash equivalents (362) (521)
Cash and cash equivalents at beginning of the year 764 1,291
Effect of foreign exchange rate changes 31 (6)
Cash and cash equivalents at end of year 433 764
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 2022 or 2021, but is derived from these financial statements. The
financial statements for the year ended 31 December 2021 have been audited and
filed with the Registrar of Companies. The financial statements for the year
ended 31 December 2022 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 2022
and 2021 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 2022. 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. Although the
Group has an overdraft facility, this was not utilised for the entirety of
2022. 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 2023.
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 2021.
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
2022 2022* 2022 2021 2021* 2021
£'000 £'000 £'000 £'000 £'000 £'000
Revenue 5,699 - 5,699 5,599 - 5,599
Cost of sales (816) - (816) (685) - (685)
Gross profit 4,883 - 4,883 4,914 - 4,914
Administrative expenses (5,039) (163) (5,202) (5,054) (59) (5,113)
Operating (loss) (156) (163) (319) (140) (59) (199)
Financial income - - - - - -
Financial cost (134) - (134) (99) - (99)
(Loss) before tax (290) (163) (453) (239) (59) (298)
Tax income 239 31 270 287 15 302
(Loss)/Profit for the year (51) (132) (183) 48 (44) 4
Other comprehensive loss net of tax:
Currency translation differences 7 - 7 4 - 4
Total comprehensive (Loss)/Profit for the year net of tax (44) (132) (176) 52 (44) 8
Earnings per share
Basic 9 (0.26p) - (0.93p) 0.24p - 0.02p
Diluted 9 (0.26p) - (0.93p) 0.24p - 0.02p
* See note 9
5. Segment reporting
Divisional segments Ikiru People Central Total Ikiru People Central Total
2022 2022 2022 2021 2021 2021
£'000 £'000 £'000 £'000 £'000 £'000
Segment revenue 5,699 - 5,699 5,599 - 5,599
Segment EBITDA 905 44 949 953 29 982
Depreciation and amortisation expense (1,105) - (1,105) (1,122) - (1,122)
Segment result before reorganisation and other costs (200) 44 (156) (169) 29 (140)
Reorganisation and other costs - - - 154 - 154
Segment result (200) 44 (156) (15) 29 14
Acquisition related amortisation - (163) (163) - (213) (213)
Operating (loss) (200) (119) (319) (15) (184) (199)
Loan interest/ lease interest (31) (103) (134) (35) (64) (99)
Loss before tax (453) (298)
Income tax income 270 302
(Loss)/profit for the year (183) 4
Additions of non-current assets 1,022 1,022 1,028 1,028
Revenue by Business Segment
The following table provides an analysis of the Group's revenue by product
area for the 12 months of the financial year.
2022 2021
£'000 £'000
Recurring income 5,051 5,009
Non-recurring income 488 427
Third party revenues 160 163
5,699 5,599
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 2022 or 2021.
Revenue by Business Sector
The following table provides an analysis of the Group's revenue by market
sector.
2022 2021 2020 2019
£'000 £'000 £'000 £'000
Contingent 3,441 3,087 3,005 3,795
Executive Search 2,258 2,512 3,327 4,232
5,699 5,599 6,332 8,027
The above table includes years going back to 2019 when revenue was last
reported split between Dillistone, Voyager and GatedTalent segments for
comparative purposes.
For the purposes of the 2019 comparative:
· Contingent encompasses the Voyager segment
· Executive Search encompasses both Dillistone and GatedTalent
segments.
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
2022 2021
£'000 £'000
UK 4,148 3,933
Europe 663 762
Americas 518 526
Australia 147 140
ROW 223 238
5,699 5,599
Non-current assets by geographical location
2022 2021
£'000 £'000
UK 6,927 7,169
US - 1
Australia 1 4
6,928 7,174
7. Acquisition related, reorganisation and other costs
2022 2021
£'000 £'000
Included within administrative expenses:
Reorganisation and other costs - 6
US government loan (Payment Protection Program) - (154)
Australian government grant - (6)
Amortisation of acquisition intangibles 163 213
163 59
Reorganisation and other costs include severance payments and loss of office
payments.
Below are reconciliations utilising the items above related to covid,
including furlough payments, to adjusted measures used to better illustrate
the underlying business performance.
2022 2021
£'000 £'000
EBITDA 949 982
Furlough Payments - (235)
Adjusted EBITDA 949 747
2022 2021
£'000 £'000
Adjusted operating (loss) before acquisition related, reorganisation and other (156) (140)
items
Furlough Payments - (235)
Readjusted operating (loss) before acquisition related, reorganisation and (156) (375)
other items
Acquisition related, reorganisation and other costs as above (163) (59)
Adjust for:
Reorganisation and other costs - 6
US government loan (Payment Protection Program) - (154)
Australian government grant - (6)
Adjusted Operating (Loss) (319) (588)
Financial Cost (134) (99)
Adjusted (Loss) Before Tax (453) (687)
8. Tax income
2022 2021
£'000 £'000
Current tax (139) (96)
Prior year adjustment - current tax (146) (121)
Total current tax (285) (217)
Deferred tax (23) (35)
Prior year adjustment - deferred tax 69 (60)
Deferred tax rate change from 19% to 25% in 2021 - 50
Deferred tax re acquisition intangibles (31) (40)
Total deferred tax 15 (85)
Tax (income) for the year (270) (302)
Factors affecting the tax credit for the year
Loss before tax (453) (298)
UK rate of taxation 19.0% 19.0%
Loss before tax multiplied by the UK rate of taxation (86) (57)
Effects of:
Overseas tax rates - (6)
Impact of deferred tax not provided 17 (1)
Enhanced R&D relief (174) (146)
Disallowed expenses 11 18
Deferred tax rate change from 19% to 25% in 2021 - 50
Rate difference between CT rate and deferred tax rate (5) (9)
Rate difference between CT rate and rate of R&D repayment 43 30
Prior year adjustments (76) (181)
Tax (income) (270) (302)
9. Earnings per share
2022 2021
Using adjusted profit 2022 Using adjusted profit 2021
Profit/(loss) attributable to ordinary shareholders (note 4) (£51,000) (£183,000) £48,000 £4,000
Weighted average number of shares 19,668,021 19,668,021 19,668,021 19,668,021
Basic profit/(loss) per share (0.26 p) (0.93 p) 0.24 p 0.02 p
Weighted average number of shares after dilution 19,668,021 19,668,021 19,668,021 19,668,021
Fully diluted profit/(loss) per share (0.26 p) (0.93 p) 0.24 p 0.02 p
Reconciliation of basic to diluted average number of shares:
2022 2021
Weighted average number of shares (basic) 19,668,021 19,668,021
Effect of dilutive potential ordinary shares - employee share plans - -
Weighted average number of shares after dilution 19,668,021 19,670,013
There are 476,510 (2021: 493,337) 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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