- Part 3: For the preceding part double click ID:nRSQ7527Tb
- - (2,479)
Profit for the year - - 7,146
Transfer of reserves - (28) -
Other comprehensive income: Currency translation (54) - (54)
Share-based payment - 162 162
Balance as at 30 June 2017 (46) 305 27,160
Group
Retained Share Reverse acquisition
earnings premium reserve
£'000 £'000 £'000
As at 1 July 2015 16,297 5,382 (4,695)
Issue of share capital - 756 -
Dividends (1,054) - -
Profit for the year 5,368 - -
Other comprehensive income: Currency translation - - -
Share-based payment - - -
Balance as at 30 June 2016 20,611 6,138 (4,695)
Retranslation Other
reserve reserves Totals
£'000 £'000 £'000
As at 1 July 2015 (3) (25) 16,956
Issue of share capital - - 756
Share repurchase - - -
Dividends - - (1,054)
Profit for the year - - 5,368
Currency translation 11 - 11
Share-based payment - 199 199
Balance as at 30 June 2016 8 174 22,236
Company
Retained Share Other
earnings premium Reserves Totals
£'000 £'000 £'000 £'000
At 1 July 2016 5,080 6,138 174 11,392
Issue of share capital - 152 (3) 149
Dividends (2,479) - - (2,479)
Profit for the year (390) - - (390)
Transfer of reserves 28 - (28) -
Share-based payment - - 162 162
At 30 June 2017 2,239 6,290 305 8,834
Company
Retained Share Other
earnings premium Reserves Totals
£'000 £'000 £'000 £'000
At 1 July 2015 1,534 5,382 (25) 6,891
Issue of share capital - 756 - 756
Dividends (1,054) - - (1,054)
Profit for the year 4,600 - - 4,600
Share-based payment - - 199 199
At 30 June 2016 5,080 6,138 174 11,392
19. TRADE AND OTHER PAYABLES
Group Company
30.6.17 30.6.16 30.6.17 30.6.16
£'000 £'000 £'000 £'000
Current:
Trade payables 1,194 1,351 52 11
Amounts owed to Group undertakings - - - 4
Social security and other taxes 415 571 - -
Other payables 32 222 - 1
VAT 830 710 - -
Accruals and deferred income 1,969 1,297 44 46
4,440 4,151 96 62
Further details on liquidity and interest rate risk can be found in note 21.
20. LEASING AGREEMENTS
Minimum lease payments under non-cancellable operating leases fall due as follows:
30.6.17
Land &
Buildings Others Totals
£'000 £'000 £'000
Within one year 591 27 618
Between two to five years 3,024 7 3,031
3,615 34 3,649
30.6.16
Land &
Buildings Others Totals
£'000 £'000 £'000
Within one year 374 46 420
Between two to five years 1,118 39 1,157
1,492 85 1,577
Operating leases represent rents payable by the Group for its office properties. Leases are negotiated for an average term
of five years and rentals are fixed on an average of two years with the option to extend for a further five years at the
prevailing market rate at the time.
21. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
The Group's activities expose it to a number of financial risks that include credit risk, liquidity risk, currency risk and
interest rate risk. These risks and the Group's policies for managing them have been applied consistently during the year
and are set out below.
The Group holds no financial or other non-financial instruments other than those utilised in the working operations of the
Group and that listed in this note. It's the Group's policy not to trade in derivative contracts.
Principal financial instruments
The principal financial instruments used by the Group, from which financial instrument rate risk arises, are as follows:
-Trade receivables
-Cash and cash equivalents
-Trade and other payables
Financial instruments by category
The following table sets out the financial instruments as at the reporting date:
Group Company
30.6.17 30.6.16 30.6.17 30.6.16
£'000 £'000 £'000 £'000
Financial assets
Trade and other receivables 7,847 6,206 24 22
Bank balances 20,428 17,313 591 639
28,275 23,519 615 661
Financial liabilities
Trade payables 1,194 1,351 52 11
Accrued liabilities and other payables 3,246 2,800 44 47
4,440 4,151 96 58
The fair value of the financial assets and financial liabilities is equal to their carrying values. All financial assets
are categorised as loans and receivables and all financial liabilities are categorised as financial liabilities at
amortised costs.
General objectives, policies and processes
The Board has overall responsibility for the determination of the Group's risk management objectives and policies and
whilst retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes
that ensure the effective implementation of the objectives and policies to the Group's risk committee. The Board receives
monthly reports from the Risk Committee through which it reviews the effectiveness of the processes put in place and the
appropriateness of the objectives and policies it sets.
The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting
the Company's competitiveness and flexibility. Further details regarding these policies are set out below:
Interest rate risk
The Group's interest rate risk arises from interest-bearing assets and liabilities. The Group has in place a policy of
maximising finance income by ensuring that cash balances earn a market rate of interest offsetting where possible cash
balances, and by forecasting and financing its working capital requirements. As at the reporting date the Group was not
exposed to any movement in interest rates as it has no external borrowings and therefore is not exposed to interest rate
risk. No sensitivity analysis has been prepared.
The Group's working capital requirements are managed through regular monitoring of the overall cash position and regularly
updated cash flow forecasts to ensure there are sufficient funds available for its operations.
Liquidity risk
The Groups working capital requirements are managed through regular monitoring of the overall position and regularly
updated cash flow forecasts to ensure there are funds available for its operations. Management forecasts indicate no new
borrowing facilities will be required in the upcoming financial period.
Trade and other payables of £2,056,000 (2016: £2,283,000) are expected to mature in less than a year.
Credit risk
Credit risk arises principally from the Group's trade receivables, as there are no trade receivables within the Company,
which comprise amounts due from customers. Prior to accepting new customers a credit check is obtained. As at 30 June 2016
there were no significant debts past their due period which had not been provided for. The maturity of the Group's trade
receivables is as follows:
30.6.17 30.6.16
£'000 £'000
0-30 days 4,845 2,795
30-60 days 67 1,243
More than 60 days 1,513 1,521
6,425 5,559
The maturity of the Group's provision for impairment is as follows:
30.6.17 30.6.16
£'000 £'000
0-30 days 8 6
30-60 days 8 87
More than 60 days 486 731
502 824
The movement in the provision for the impairment is as follows:
30.06.17 30.6.16
£'000 £'000
As at 1 July 824 343
Provision for impairment 82 789
Receivable written off in the year (65) (259)
Unused amount reversed (339) (49)
As at 30 June 502 824
The Group minimises its credit risk by profiling all new customers and monitoring existing customers of the Group for
changes in their initial profile. The level of trade receivables older than the average collection period consisted of a
value of £1,581,391 (2016: £1,541,197) of which £460,837 (2016: £730,350) was provided for. The Group felt that the
remainder would be collected post year end as they were with long-standing relationships, and the risk of default is
considered to be low and write-offs due to bad debts are extremely low. The Group has no significant concentration of
credit risk, with the exposure spread over a large number of customers.
The credit risk on liquid funds is low as the counterparts are banks with high credit ratings assigned by international
credit rating bodies. The majority of the Company's cash holdings are held at NatWest Bank which has a BBB+ credit rating.
The carrying value of both financial assets and liabilities approximates to fair value.
Capital policy
The Group's objectives when managing capital are to safeguard its ability to continue as a going concern in order to
provide optimal returns for shareholders and to maintain an efficient capital structure to reduce the cost of capital.
In doing so the Group's strategy is to maintain a capital structure commensurate with a strong credit rating and to retain
appropriate levels of liquidity headroom to ensure financial stability and flexibility. To achieve this, the Group monitors
key credit metrics, risk and fixed charge cover to maintain this position. In addition the Group ensures a combination of
appropriate short term and long-term liquidity headroom.
During the year the Group had a short-term loan balance of £nil (2016: £nil) and amounts payable over one year are nil
(2016: £nil). The Group had a strong cash reserve to utilise for any short-term capital requirements that were needed by
the Group.
The Group has continued to look for a further long-term investments or acquisitions and therefore, to maintain or re-align
the capital structure, the Group may adjust when dividends are paid to shareholders, return capital to shareholders, issue
new shares or borrow from lenders.
22. DEFERRED TAX
30.6.17 30.6.16
£'000 £'000
As at 1 July 716 383
Current year provision 98 333
814 716
The deferred tax liability above comprises the following temporary differences:
30.6.17 30.6.16
£'000 £'000
Capital allowances in excess of depreciation 113 91
R&D relief in excess of amortisation 858 708
Share option relief (157) (83)
814 716
Deferred tax provision relates to taxes to be levied by the same authority on the same entity expected to be settled at the
same time. As such deferred tax assets and liabilities have been offset.
23. CAPITAL COMMITMENTS
The Company and Group have no capital commitments as at the year end.
24. RELATED PARTY DISCLOSURES
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and
are not disclosed in this note.
Group
The following transactions were carried out with related parties
30.6.17 30.6.16
£'000 £'000
Sale of services
Cadence Performance Entity under common directorship Email marketing services 2 2
2 2
Directors
30.6.17 30.6.16
£'000 £'000
Aggregate emoluments 558 858
Ex-gratia payment - 137
Company contributions to money purchase pension scheme 50 46
Share-based payments - 114
608 1,155
Information in relation to the highest paid Director is as follows:
30.6.17 30.6.16
£'000 £'000
Salaries 372 183
Ex-gratia payment - 137
Other benefits 10 3
Pension costs 25 -
Share-based payments - 114
407 437
Company
The following transactions were carried out with related parties
30.06.17 30.06.16
£'000 £'000
Year end balances arising from sales/purchase of services
dotmailer Limited Subsidiary Payables (5,338) (5,338)
(5,338) (5,338)
The receivables and payables are unrestricted in nature and bear no interest. No provisions are held against receivables
from related parties.
Loans to related parties
30.6.17 30.6.16
£'000 £'000
dotmailer Limited Subsidiary
As at 1 July 12,417 6,388
Loans advanced 40 6,069
Loans repaid (2,507) (40)
9,950 12,417
25. ULTIMATE CONTROLLING PARTY
There is no ultimate controlling party of the Group. dotdigital Group PLC acts as the parent Company to dotmailer Limited,
dotsearch Europe Limited, dotmailer Inc, dotmailer Pty Limited, dotagency Limited (Dormant), dotsurvey Limited (Dormant),
dotSEO Limited (Dormant), dotcommerce Limited (Dormant), doteditor Limited (Dormant) dotmailer Developments Limited,
dotmailer SA Pty and dotmailer LLC.
26. SHARE-BASED PAYMENT TRANSACTIONS
The measurement requirements of IFRS 2 have been implemented in respect of share options that were granted after 7 November
2002. The expense recognised for share-based payment made during the year is £162,000 (2016: £199,600).
Vesting conditions of the options dictate that employees must remain in the employment of the Group for the whole period to
qualify.
Movement in issued share options during the year
The table illustrates the number and weighted average exercise price (WAEP) of, and movements in, share options during the
period. The options outstanding at 30 June 2017 had a WAEP of 33.35p (2016: 26.69p) and a weighted average contracted life
of 2.67 years (2016: 3.2 years) and their exercise prices ranged from 13p to 68.50p. All share options are settled in form
of equity issued.
30.06.17 30.6.16
No of options WAEP No of options WAEP
Outstanding at the beginning of the period 4,104,029 26.69p 10,938,790 14.83p
Granted during the year 230,985 68.50p 1,439,029 29.02p
Forfeited/cancelled during the period 706,460 35.30p 491,066 21.46p
Exchanged for shares 1,088,409 694.91p 7,782,724 10.22p
Outstanding at the end of the period 2,540,145 33.35p 4,104,029 26.69p
Exercisable at the end of the period 500,000 15.63p 1,063,409 8.00p
The weighted average share price at the date of the exercise for share options exercised during the period was 694.91p
(2016: 40.32p).
20 June2017 25 November2015 28 November 2014 18 October 2013
Number of options granted 230,985 809,160 1,525,000 3,554,794
Share price at grant date 68.50p 40.50p 29.00p 17.82p
Exercise price 68.50p 40.25p 28.50p 18.25p
Option life in years 5 years 5 years 5 years 5 years
Risk free rate 1.33% 1.33% 1.35% 1.40%
Expected volatility 30% 30% 30% 30%
Expected dividend yield 1% 0% 0.% 0.4%
Fair value of 12.04p 6.46p 5.33p 3.31p
options/warrants
Expected volatility was determined by calculating the historical volatility of the Group's share price from the date it
listed to the grant date of the share option. The expected life used in the model is based on management's best estimate,
for the effects of non-transferability, exercise restrictions and behavioural considerations.
27. GROUP RECONCILIATION OF PROFIT BEFORE CORPORATION TAX TO CASH GENERATED FROM OPERATIONS
Group Company
30.6.17 30.6.16 30.6.17 30.6.16
£'000 £'000 £'000 £'000
Current:
Profit before tax from all operations 8,091 6,215 (390) 4,600
Currency revaluation (54) 11 - -
Depreciation 2,038 1,787 - -
Gain on disposal of fixed assets (58) - - -
Share-based payments 162 199 162 199
Finance income (15) (51) - -
10,164 8,161 (228) 4,799
(Increase)/decrease in trade receivables (1,641) (878) 2,469 (3,978)
Increase/(decrease) in trade payables 290 714 33 (88)
Cash generated from operations 8,813 7,997 2,274 733
28. GROUP CASH AND CASH EQUIVALENTS
The amounts disclosed in the statement of cash flow in respect of cash and cash equivalents are in respect of these
statements of financial position amounts:
Group Company
£'000 £'000
As at 1 July 2015 11,932 166
As at 30 June 2016 17,313 639
As at 30 June 2017 20,428 591
29. PROJECT DEVELOPMENT
During the period the Group incurred £2,243,687 (2016: £1,428,558) in development investments. All resources utilised in
development have been capitalised as outlined in the accounting policy governing this area.
30. POST BALANCE SHEET EVENTS
There are no post balance sheet events which impact the Group's financial statements.
This information is provided by RNS
The company news service from the London Stock Exchange