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REG - Dillistone Group PLC - Interim Results & Investor Presentation

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RNS Number : 5381A  Dillistone Group PLC  26 September 2022

Dillistone Group Plc

("Dillistone", the "Company" or the "Group")

Interim Results & Investor Presentation

Dillistone Group Plc, the AIM quoted supplier of software and services to
recruiters, is pleased to announce interim results for the six months ended 30
June 2022.

 

Financial Highlights

 

·    Revenue increased by 1% to £2.823m. First H1 growth since 2017.

·    Recurring revenues represented 88% (2021: 90%) of Group revenue,
which covers administration expenses (excluding depreciation and
amortisation).

·    Annualised recurring revenue relating to Talentis ended H1 at £62k,
an increase of over 300% on the equivalent figure at the end of H2 2021.

·    Growth in orders driven by improving performance in market. Order
book increased by 13% year on year.

·    The Group benefited from flexible furlough support worth £0.170m in
2021. Excluding this, the Adjusted(*) loss on operating activity decreased
from £0.260m in 2021 to £0.129m in 2022 - an improvement of 51%.

·    Net cash from operating activities broadly the same at £0.560m
(2021: £0.562m).

·    Cash at period end of £0.608m. The Board does not expect the Group
to require additional funding to reach profitability.

 

Operational Highlights

 

·    Improved performance in both UK contingency and global executive
search sectors.

·    Contingency business successfully implemented previously announced
large contract win. A further large contract was received post period end,
providing confidence in H2 and visibility into the future.

·    Driven by Talentis, our executive search products had their best H1
in terms of new contract wins since 2017.

 

Commenting on the results and prospects, Giles Fearnley, Non-Executive
Chairman, said:

 

"In my statement in the annual report, I was optimistic for the future and our
H1 results validate this belief. Revenue is growing, our order book is
stronger and operational performance is improving. We enter the second half
with a strong pipeline of business and are optimistic about delivering further
progress in the coming months.

 

"While the Board is conscious of the broader economic situation, it expects
the Group to deliver full year results in line with market expectations."

 

*           Note: "Adjusted" refers to activities before
acquisition, reorganisation, furlough support, and one-off costs

 

Investor Presentation: 3pm today, Monday 26 September 2022

 

Jason Starr, Chief Executive, and Ian Mackin, Interim Finance Director, will
hold an investor presentation to cover the results and prospects at 3pm today,
Monday 26 September 2022.

 

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
(mailto:dillistone@walbrookpr.com) or in real time during the presentation via
the "Ask a Question" function.

 

This announcement contains inside information for the purposes of Article 7 of
EU Regulation 596/2014.

 

Contacts:

 

 Dillistone Group Plc                                Via Walbrook PR
 Jason Starr             Chief Executive
 Ian Mackin              Interim Finance Director

 WH Ireland Limited (Nominated adviser)
 Chris Fielding          Head of Corporate Finance  020 7220 1650

 Walbrook PR
 Tom Cooper / Nick Rome                             020 7933 8780
                                                    dillistone@walbrookpr.com

Notes to Editors:

 

Dillistone Group Plc is a global leader in the supply of technology solutions
and test & train services to the recruitment sector worldwide, in both
contingency recruitment and executive search markets.

 

The Group trades through the Ikiru People brand (www.IkiruPeople.com
(https://www.ikirupeople.com/) ), selling into recruitment, staffing and
executive search businesses, as well as corporate talent acquisition teams
around the world.

 

Ikiru People provides the platforms its clients need to test and train
candidates, support further development, enhance the recruitment process, and
source the best talent. With clients in more than 50 countries over six
continents and working with thousands of users, the Group boasts more than 30
years in the market and 100's of years of collective experience.

 

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

 

 

In my statement in the annual report, I said that I was optimistic for the
future. This has been validated by our first half results which show a strong
and improving performance in both our executive search and contingency
staffing markets.

 

In the first half, the Group has delivered increased revenue, improved cash
generation and a healthy order book. The Group benefited from flexible
furlough support worth £0.170m in 2021. Excluding this, the Adjusted loss on
operating activity decreased from £0.260m in 2021 to £0.129m in 2022 - an
improvement of 51%.

 

We have previously announced that our non-executive Director, Julie Pomeroy,
was due to step down from the Board on 30(th) September 2022. We are pleased
to say that Julie has now agreed to stay with the Group. We are also delighted
to confirm that Ian Mackin, previously Interim FD has now accepted the
position on a permanent basis. We would like to thank Joanne Curd, who left
the Group at the end of July 2022, for her valuable contribution.

 

Operational Review

 

The Group has seen order book growth of 13%, helping us to deliver H1 year on
year revenue growth. While much of the growth has been in non-recurring
revenue, we are pleased to note that recurring revenue saw year on year
quarterly growth during Q2 2022, and we fully expect this growth to continue
into H2. Net debt stands at (£0.992m), against a 2021 figure of (£0.925m).
Cash generation in H1 was ahead of budget and the Group does not expect to
need to raise additional capital to restore profitability.

 

We are pleased to report an improving performance from both our contingency
and executive search products.

 

Our contingency products (Infinity, ISV, Mid-Office and VDQ) saw revenue grow
by a combined 9%, driven by a particularly strong performance from our
Infinity recruiting CRM. Many of our Infinity projects have been on behalf of
firms in the Temporary staffing space and, as such, some of these firms also
implement our Mid-Office application.

 

The period saw the successful completion of our previously announced large
Infinity order and we are pleased to report that, post period end, we have won
a further large contract for this product.

 

Our ISV product continues to make a contribution to profits, with clients
including many of the UK's largest recruitment businesses. A number of these
firms are on multi-year contracts.

 

The increasingly strong performance by Infinity has allowed the Group to
prepare for the withdrawal of support for our VDQ product, and this is
expected to occur over the coming months.

 

Our market share in the executive search software space (where historically we
have offered FileFinder and GatedTalent) has fallen over recent years.
However, we are delighted to report that this trend has begun to reverse.
Driven by strong performance by our Talentis product, launched in 2021, this
part of our business has added more than 50 new clients in the first half. In
terms of new client wins, this was our best executive search CRM performance
since 2017.

 

Launched in early 2021 and provided as part of a package to many FileFinder
clients, Talentis now also has "stand alone" paying clients on six continents.
Most of these clients have a small number of users, but we expect average
client size (and associated revenue) to grow over time as we continue to
develop and extend the product. Annualised recurring revenue associated with
Talentis ended H1 at £62k, an increase of over 300% on the equivalent figure
at the end of H2 2021. Across the Group, it has become our fastest growing CRM
product by number of contract wins in the period.

 

Our FileFinder product has seen improved client retention, partly as a result
of our decision to provide Talentis as part of a package to many of these
firms. We have now completed our re-engineering of the FileFinder SaaS
platform and are pleased to report a reduction in our FileFinder hosting costs
of 21% in the period, largely as a result of this work.

 

GatedTalent continues to make a contribution to the Group, and the period has
seen us undertake work to improve the margin associated with the professional
services delivered under this banner. As part of this, we were delighted when
one of our employees became - we believe - the first resume writer in Europe
to be recognised by the National Résumé Writers' Association.

 

Across all of our product range, we continue to deliver best-in-class customer
service. During the period, we were delighted to become, we believe, the first
firm in our market to earn a "5* Excellent" rating on Trustpilot.

 

Financial Performance

 

Revenue in the six months ended 30 June 2022 amounted to £2.823m, up £0.022m
(1%) (2021: £2.801m). Recurring revenues decreased by 2% to £2.477m over the
comparable period last year (2021: 17% decline on 2020 H1 to £2.522m).
However, in Q2 2022 we experienced our first year on year growth in quarterly
recurring revenue since Q2 2018. Recurring revenues represented 88% of total
revenues (2021: 90%).  Non-recurring revenues were up 30% at £0.261m (2021:
£0.200m).

 

Cost of sales increased 4% to £0.351m (2021: £0.336m), benefitting from a
decrease of 21% in hosting costs for our FileFinder SaaS product as we moved
to a new platform. This helped offset a growth driven rise in cloud and data
processing costs elsewhere.

 

Adjusted administration expenses decreased by £0.139m to £2.037m (2021:
£2.176m). These expenses are covered 122% by recurring revenue (2021: 116%)

 

Amortisation of acquisition intangibles amounted to £0.082m (2021: £0.107m).
In 2021 other items of credit £(0.092m) were received, which included the
write-off of a US payroll protection loan which was forgiven in the period
and, in Australia, a Covid-19 related grant.

 

The loss for the period before tax increased to £0.274m (2021: loss
£0.141m). The loss after tax was £(0.183m) (2021: £(0.101m)).

 

There is a tax credit for the period of £0.091m (2021: credit £0.040m).
The 2021 and 2022 tax credits have benefited from claims in the UK for
research and development reflecting the continuing development of our
products.

 

Cash generated from operating activities stayed broadly level at £0.560m
(2021: £0.562m).  Total cash flows in the 6 months ended 30 June 2022 showed
a net outflow of £0.186m (2021: outflow £0.110m).  The main elements of
non-operating expenditure related to investment in new product development of
£0.477m (2021: £0.504m) and loan repayments of £0.150m (2021: £0.213m).

 

At 30 June 2022, we had net cash reserves of £0.608m (2021: £1.039m) and
£1.600m in borrowings (2021: £1.964m).

 

The CBIL loan balance stands at £1.200m and, on the current payment profile,
has another 4 years until it is fully repaid. The Group also has a convertible
loan of £0.400m, which will not be repaid until the CBIL loan has been
repaid.

 

Strategy

 

Our long-term strategy is unchanged, concentrating on returning to sustainable
growth and increasing profits. We are excited by the opportunity provided by
our new Talentis product and the continued investment across our product
range, backed up by consistently delivering "best in class" service to our
clients.

 

Outlook

 

In my statement in the annual report, I was optimistic for the future. This
remains my view, and I am delighted to that our performance during and since
H1 has compounded this opinion.

 

In our view, Infinity has become a leading product in the UK temporary
staffing sector, and we believe that this market is likely to perform well
during any economic downturn.  Talentis continues to grow rapidly and, based
on the number of contracts signed in H1, we believe that the product has taken
a significant share of new orders in the market and will increasingly be
considered a market leader in the sectors it serves. Our aim now is to
increase the size and value of the contracts associated with this product -
and we are already seeing progress to this end. We remain very excited by the
opportunity that Talentis presents for our Group.

 

The Group expects to deliver full year results in line with market
expectations. Our cash position as at 31 August 2022 was £0.617m and we do
not expect to raise additional funds to reach profitability.

 

 

Giles Fearnley

Non-Executive Chairman

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

                                                                                 Note                  6 Months ended 30 June                                    Year ended 31 Dec
                                                                                                       2022                         2021                         2021
                                                                                                       Unaudited                    Unaudited                     Audited
                                                                                                       £'000                        £'000                        £'000

 Revenue                                                                         4                     2,823                        2,801                        5,599
 Cost of sales                                                                                         (351)                        (336)                        (685)
 Gross profit                                                                                          2,472                        2,465                        4,914
 Administrative expenses                                                                               (2,683)                      (2,570)                      (5,113)

 Result from operating activities                                                4                     (211)                        (105)                        (199)

 Analysed as:
 Result from operating activities before furlough support, acquisition related,                        (129)                        (260)                        (375)
 reorganisation and other items

 Furlough support                                                                                      -                            170                          235
 Acquisition related, reorganisation and other items                             5                     (82)                         (15)                         (59)
 Result after acquisition related items                                                                (211)                        (105)                        (199)

 Financial cost                                                                                        (63)                         (36)                         (99)
 (Loss) before tax                                                                                     (274)                        (141)                        (298)

 Tax income                                                                      6                     91                           40                           302
 (Loss)/profit for the period                                                                          (183)                        (101)                        4

 Other comprehensive income net of tax:
 Currency translation differences                                                                      6                            2                            4
 Total comprehensive (loss)/income for period net of tax                                               (177)                        (99)                         8

 Earnings per share (pence)
 Basic                                                                           8                                (0.93)                       (0.51)            0.02
 Diluted                                                                                                          (0.93)                       (0.51)            0.02

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

                                  As at 30 June 2022  As at 30 June 2021  As at 31 Dec 2021
                                  Unaudited           Unaudited           Audited
 ASSETS                           £'000               £'000               £'000
 Non-current assets
 Goodwill                         3,415               3,415               3,415
 Intangible assets                3,030               3,274               3,142
 Right of use assets              541                 646                 592
 Property plant & equipment       22                  18                  25
                                  7,008               7,353               7,174
 Current assets
 Trade and other receivables      739                 843                 615
 Current tax receivable           119                 67                  29
 Cash and cash equivalents        608                 1,175               764
                                  1,466               2,085               1,408
 Total assets                     8,474               9,438               8,582

 EQUITY AND LIABILITIES
 Equity
 Share capital                    983                 983                 983
 Share premium                    1,631               1,631               1,631
 Merger reserve                   365                 365                 365
 Convertible loan reserve         14                  14                  14
 Retained earnings                79                  107                 262
 Share option reserve             72                  124                 64
 Translation reserve              69                  61                  63
 Total equity                     3,213               3,285               3,382

 Liabilities
 Non current liabilities
 Trade and other payables         252                 237                 238
 Lease liabilities                516                 604                 560
 Borrowings                       1300                1,600               1,450
 Deferred tax                     210                 299                 210
 Total non-current liabilities    2,278               2,740               2,458
 Current liabilities
 Trade and other payables         2,595               2,808               2,347
 Lease liabilities                88                  105                 95
 Borrowings                       300                 364                 300
 Utilisation of banking facility  -                   136                 -
 Current tax payable              -                   -                   -
 Total non-current liabilities    2,983               3,413               2,742
 Total liabilities                5,261               6,153               5,200
 Total liabilities and equity     8,474               9,438               8,582

 

The interim report was approved by the Board of directors and authorised for
issue on 23 September 2022.  They were signed on its behalf by:  JS
Starr
IJ Mackin

CONSOLIDATED STATEMENT OF CASH FLOWS

                                                                          As at 30 June           As at 31 December
                                                                          2022       2021         2021
                                                                          Unaudited   Unaudited   Audited

                                                                           £'000      £'000        £'000
 Operating Activities
 (Loss) before tax                                                        (274)      (141)        (298)
 Adjustment for
   Financial cost                                                         63         36           99
   Depreciation and amortisation                                          648        656          1,335
   Share option expense                                                   8          15           3
   Other including foreign exchange adjustments arising from operations   (24)       (4)          10
 Operating cash flows before movements in working capital                 421        562          1,149

 Increase / (Decrease) in receivables                                     (124)      20           268
 Increase / (Decrease) in payables                                        263        (184)        (639)
 Net taxation repaid                                                      -          164          373

 Net cash generated from operating activities                             560        562          1,151

 Investing Activities
 Purchases of property plant and equipment                                (5)        (4)          (21)
 Investment in development costs                                          (477)      (504)        (987)
 Net cash used in investing activities                                    (482)      (508)        (1,008)

 Financing Activities
 Finance cost                                                             (63)       (36)         (99)
 Lease payments made                                                      (51)       (51)         (104)
 Bank loan repayments                                                     (150)      (213)        (461)
 Utilisation of banking facility                                          -          136          -
 Net cash generated from financing activities                             (264)      (164)        (664)

 Net change in cash and cash equivalents                                  (186)      (110)        (521)
 Cash and cash equivalents at beginning of the period                     764        1,291        1291
 Effect of foreign exchange rate changes                                  30         (6)          (6)

 Cash and cash equivalents at end of period                               608        1,175        764

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

                                                              Share     Share     Merger   Retained  Convertible    Share     Foreign        Total
                                                             capital   premium   Reserve   earnings  loan reserve  option    exchange
                                                              £'000     £'000     £'000     £'000    £'000          £'000     £'000         £'000

 Balance at 31 December 2021                                 983       1,631     365       262       14            64        63             3,382
 Comprehensive income
 Loss for the 6 months ended 30 June 2022                     -         -         -        (183)     -              -         -             (183)
 Other comprehensive income                                                                                                                 -
 Exchange differences on translation of overseas operations   -         -         -         -        -              -        6              6
 Total comprehensive (loss)                                   -         -         -        (183)     -             -         6              (177)
 Transactions with owners
 Share option charge                                          -         -         -         -        -             8          -             8

 Balance at 30 June 2022                                     983       1,631     365       79        14            72        69             3,213

 Balance at 31 December 2020                                 983       1,631     365       208       14            110       59             3,370
 Comprehensive income
 Loss for the 6 months ended 30 June 2021                     -         -         -        (101)     -              -         -             (101)
 Other comprehensive income                                                                                                                 -
 Exchange differences on translation of overseas operations   -         -         -         -        -              -        2              2
 Total comprehensive (loss)                                   -         -         -        (101)     -             -         2              (99)
 Transactions with owners
 Share option charge                                          -         -         -         -        -             14         -             14

 Balance at 30 June 2021                                     983       1,631     365       107       14            124       61             3,285

 

 

NOTES TO THE INTERIM

  NOTES TO THE UNAUDITED INTERIM REPORT

CONSOLIDATED STATEMENT OF

1.         Basis of Preparation

 

The financial information for the six months ended 30 June 2022 included in
this condensed interim report comprises the consolidated statement of
comprehensive income, the consolidated statement of financial position, the
consolidated statement of cash flows, the consolidated statement of changes in
equity and the related notes.

 

The financial information in these interim results is that of the holding
company and all of its subsidiaries (the Group). It has been prepared in
accordance with UK adopted international accounting standards but does not
include all of the disclosures that would be required under International
Financial Reporting Standards (IFRSs). The accounting policies applied by the
Group in this financial information are the same as those applied by the Group
in its financial statements for the year ended 31 December 2021 and are those
which will form the basis of the 2022 financial statements.

 

The comparative financial information presented herein for the year ended 31
December 2021 does not constitute full statutory accounts for that period. The
Group's annual report and accounts for the year ended 31 December 2021 have
been delivered to the Registrar of Companies. The Group's independent
auditor's report on those statutory accounts was unqualified, did not draw
attention to any matters by way of emphasis, and did not contain a statement
under 498(2) or 498(3) of the Companies Act 2006.

 

Going concern

 

The directors have continued to perform detailed forecasting on a regular
basis taking into account current trading and expectations and cash balances
and, having reflected upon these forecasts, the directors of the Company
continue to adopt the going concern basis of accounting in preparing the
financial statements.

 

Dillistone Group Plc is the Group's ultimate parent company.  It is a public
listed company and is domiciled in the United Kingdom.  The address of its
registered office and principal place of business is 12 Cedarwood, Crockford
Lane, Chineham Business Park, Basingstoke, RG24 8WD.  Dillistone Group Plc's
shares are listed on the Alternative Investment Market (AIM).

 

2.         Share Based Payments

 

The Company operates two share option schemes.  The fair value of the options
granted under these schemes is recognised as an employee expense with a
corresponding increase in equity.  The fair value is measured at grant date
and spread over the period at the end of which the option holder may exercise
the option.  The fair value of the options granted is measured using the
Black-Scholes model.

 

3.           Reconciliation of adjusted operating profits to
consolidated statement of comprehensive income

 

30 June 2022 and 30 June 2021

 

                                                         Adjusted operating profits  Acquisition related items                   Adjusted operating profits  Acquisition and reorganisation related items
                                                         30-Jun-2022                  2022*                     30-Jun-2022      30-Jun-2021                  2021*                                        30-Jun 2021

                                                         £'000                       £'000                       £'000           £'000                       £'000                                          £'000

 Revenue                                                 2,823                       -                          2,823            2,801                       -                                             2,801

 Cost of sales                                           (351)                       -                          (351)            (336)                       -                                             (336)

 Gross profit                                            2,472                       -                          2,472            2,465                       -                                             2,465

 Administrative expenses                                 (2,601)                     (82)                       (2,683)          (2,555)                     (15)                                          (2, 570)

 Results from operating activities (inc furlough)        (129)                       (82)                       (211)            (90)                        (15)                                          (105)

 Financial cost                                          (63)                        -                          (63)             (36)                        -                                             (36)

 (Loss) before tax                                       (192)                       (82)                       (274)            (126)                       (15)                                          (141)

 Tax expense/(income)                                    76                          15                         91               36                          4                                             40

 (Loss)/profit for the year                              (116)                       (67)                       (183)            (90)                        (11)                                          (101)

 Other comprehensive income net of tax:
 Currency translation differences                        6                           -                          6                2                           -                                             2

 Total comprehensive (loss) for the year net of tax      (110)                       (67)                       (177)            (88)                        (11)                                          (99)

 

*  see accounts note 5

 

Earnings per share - from continuing activities

 

 Basic            (0.59)p            (0.93)p        (0.46)p  (0.51)p
 Diluted          (0.59)p                  (0.93)p  (0.46)p        (0.51)p

 

 

31 December 2021

                                                                Adjusted operating profits  Acquisition and reorganisation related items
                                                                31 December                  2021*                                        31 December 2021

                                                                2021

                                                                £'000                       £'000                                          £'000

 Revenue                                                        5,599                       -                                             5,599

 Cost of sales                                                  (685)                       -                                             (685)

 Gross profit                                                   4,914                       -                                             4,914

 Administrative expenses                                        (5,054)                     (59)                                          (5,113)

 Results from operating activities (inc furlough)               (140)                       (59)                                          (199)

 Financial cost                                                 (99)                        -                                             (99)

 Loss before tax                                                (239)                       (59)                                          (298)

 Tax income                                                     287                         15                                            302

 Profit/(loss) for the year                                     48                          (44)                                          4

 Other comprehensive income net of tax:
 Currency translation differences                               4                           -                                             4

 Total comprehensive profit/(loss) for the year net of tax      52                          (44)                                          8

 

*  see accounts note 5

 

 

Earnings per share - from continuing activities

 

 Basic    0.24p  0.02p
 Diluted  0.24p  0.02p

 

4.         Segment reporting

 

 Results
                                                                                                         Year ended
                                    6 months ended 30 June                                                         31 Dec
                                    2022                                                  2021                     2021
                                    £'000                                                 £'000                    £'000

 Results from operating activities
 Ikiru People                                                          (128)                   (61)           (169)

 Central                                                               (1)                     (29)           29

 Reorganisation and other costs                                        -                       92             154
 Amortisation of acquisition intangibles and reorganisation costs      (82)                    (107)          (213)
 Result from operating activities                                      (211)                   (105)          (199)

 

 

 Geographical segments
 The following table provides an analysis of the Group's revenues by
 geographical market.
                                                                  Year ended
            6 months ended 30 June                      31 Dec
            2022                      2021                  2021
            £'000                     £'000                 £'000
 UK         1,942                     1,928                 3,933
 Europe     350                       441                   762
 Americas   309                       242                   526
 Australia  117                       76                    140
 ROW        105                       114                   238
            2,823                     2,801                 5,599

 

 

 Business Segment
 The following table provides an analysis of the Group's revenues by products
 and services.
                                                          Year ended
                       6 months ended 30 June             31 Dec
                       2022               2021            2021
                       £'000              £'000           £'000
 Recurring             2,477              2,522           5,009
 Non recurring         261                200             427
 Third party revenues  85                 79              163
                       2,823              2,801           5,599

 'Recurring income' represents all income recognised over time, whereas
 'Non-recurring income' represents all income recognised at a point in time.
 Recurring income includes all support services, software as a service income
 (SaaS) and hosting income. Non-recurring income includes sales of new
 licenses, and income derived from installing those licenses including
 training, installation, and data translation.  Third party revenues arise
 from the sale of third party software.

 

5.         Acquisition related items and other one off costs

                                                                              Year ended
                                                  6 months ended 30 June      31 Dec
                                                  2022          2021          2021
                                                  £'000         £'000         £'000
 Reorganisation costs                             -             -             6
 US Government loan (Payment Protection Program)  -             (86)          (154)
 Grants received from overseas jurisdictions      -             (6)           (6)
 Amortisation of acquisition intangibles          82            107           213

 Total                                            82            15            59

 

6.         Tax

                                                                                 Year ended
                                                     6 months ended 30 June      31 Dec
                                                     2022          2021          2021
                                                     £'000         £'000         £'000

 Current tax                                         (56)          (43)          (96)
 Prior year adjustment - current tax                 -             -             (121)
 Deferred tax release                                (20)          (11)          (35)
 Prior year adjustment - deferred tax                -             -             (60)
 2021 Deferred tax rate change to 25% (19% in 2020)  -             34            50
 Deferred tax re acquisition intangibles             (15)          (20)          (40)
 Tax credit for the period                           (91)          (40)          (302)

 

The tax charge is calculated for each jurisdiction based on the estimated
position for the year.  Deferred tax has been provided at a rate of 25%
(2021: 25%).

 

7.         Dividends

 

The Board has decided not to pay an interim dividend (2021: nil per share).

 

8.         Earnings per Share

                                                                           Year ended
                                               6 months ended 30 June      31 Dec
                                               2022          2021          2021

 Basic earnings per share
 (Loss) attributable to ordinary shareholders  £(183,000)    £(101,000)    £4,000

 Weighted average number of shares             19,668,021    19,668,021    19,668,021

 Basic (loss) per share (pence)                (0.93)        (0.51)        0.02

 

As the Group is in a loss position shares options are anti-dilutive.

 

9.         Related party transactions

 

The Company has related party relationships with its subsidiaries, its
directors, and other employees of the Company with management
responsibility.  There were no transactions with these parties during the
period outside the usual course of business.

 

The Directors participated in the issue of convertible loan notes in 2017
which carry interest at 8.15% per annum payable quarterly in arrears.

 

There were no transactions with any other related parties.

 

10.       Cautionary statement

 

This Interim Report has been prepared solely to provide additional information
to shareholders to assess the Company's strategies and the potential for these
strategies to succeed. The Interim Report should not be relied on by any other
party or for any other purpose. The Interim Report contains certain
forward-looking statements with respect to the financial condition, results of
operations and businesses of the Company. These statements are made in good
faith based on the information available to them up to the time of their
approval of this report. However, such statements should be treated with
caution as they involve risk and uncertainty because they relate to events and
depend upon circumstances that will occur in the future.  There are a number
of factors that could cause actual results or developments to differ
materially from those expressed or implied by these forward-looking
statements.  The continuing uncertainty in global economic outlook inevitably
increases the economic and business risks to which the Company is exposed.
Nothing in this announcement should be construed as a profit forecast.

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.   END  IR EAPNSAFPAEFA

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