REG - dotDigital Group plc - Final Results <Origin Href="QuoteRef">DOTD.L</Origin> - Part 4
13/10/2015 07:01
- Part 4: For the preceding part double click ID:nRSM0296Cc
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 not external borrowings and therefore 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 £2,365,000 (2014: £1,876,000) 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 2015
there were no significant debts pass their due period which had not been provided for. The maturity of the Groups trade
receivables is as follows:
30.6.15 30.6.14
£'000 £'000
0-30 days 2,311 1,817
30-60 days 813 702
More than 60 days 1,465 600
4,589 3,119
The maturity of the Group's provision for impairment is as follows:
30.6.15 30.6.14
£'000 £'000
0-30 days 2 -
30-60 days 2 83
More than 60 days 339 253
343 336
The movement in the provision for the impairment is as follows:
30.06.15 30.6.14
£'000 £'000
As at 1 July 2014 336 249
Provision for impairment 103 302
Receivable written off in the year (47) (165)
Unused amount reversed (49) (50)
As at 30 June 2015 343 336
The Group minimises its credit risk by profiling all new customers and monitoring existing client 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
£1,486,597 (2014: £678,260) of which £294,735 (2014: £327,242) was provided for. The Group felt that the remainder would be
collected post year end as they were with long standing relationships, 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 ratings. The majority of the company's cash holdings are held at NatWest Bank who has an A credit rating.
The carrying value of both financial assets and liabilities approximates to fair value.
Capital Policy
The Groups 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 (2014: £nil) and amounts payable over one year are 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.
23. DEFERRED TAX
30.6.15 30.6.14
£'000 £'000
As at 1 July 58 14
Current year provision 325 44
383 58
The deferred tax liability above comprises the following temporary differences:
30.6.15£'000 30.6.14 £'000
Capital allowances in excess of depreciation 103 58
R & D relief in excess of amortisation 679 600
Share option relief (399) (600)
383 58
The 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.
24. CAPITAL COMMITMENTS
The company and Group have no capital commitments as at the year end. Last year the Company and Group had capital committed
to £191,000 towards the fit out of the new London Bridge office.
25. 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
30.6.15 30.6.14
£'000 £'000
Sale of services
Codence performance Entity under common directorship Email marketing services 3 2
Coms.com Entity under common directorship Email marketing services 4 8
7 10
Sales of services are based on the price lists in force and at terms that would be available to third parties
30.6.15 30.6.14
£'000 £'000
Purchase of services
Barratts of Old Ltd Entity under common directorship Consultancy services 8 41
8 41
Key management compensation
Key management include directors and the company secretary. The compensation paid for key management for employee services
are shown below
30.6.15 30.6.14
£'000 £'000
Remuneration and other short term employee benefits 1,002 966
Share based payments 20 15
Pension cost 60 42
1,082 1,023
Directors
30.6.15 30.6.14
£'000 £'000
Aggregate emoluments 1,002 877
Company contributions to money purchase pension scheme 60 42
Share based payments 20 5
1,082 924
Information in relation to the highest paid Director is as follows:
30.6.15 30.6.14
£'000 £'000
Salaries 234 230
Other benefits 11 7
Pension costs 15 14
Share based payment 20 -
280 251
The highest paid director exercised 660,000 share options in the year (2014: none).
Company
The following transactions were carried out with related parties
30.06.15 30.06.14
£'000 £'000
Year end balances arising from sales/purchase of services
Dotmailer Limited Subsidiary Payables (3,280) (1,864)
Dotagency Limited Subsidiary Receivables - 9
(3,280) (1,855)
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
30.6.15 30.6.14
£'000 £'000
Dotmailer Limited Subsidiary
As at 1 July 5,681 5,400
Loans advanced 751 324
Loans repaid (44) (43)
6,388 5,681
Key management compensation
Key management are non-executive directors. The compensation paid for key management for employee services are shown below
30.6.15 30.6.14
£'000 £'000
Remuneration and other short term employee benefits - 95
- 95
Directors
30.6.15 30.6.13
£'000 £'000
Aggregate emoluments - 95
- 95
26. ULTIMATE CONTROLLING PARTY
There is no ultimate controlling party of the Group. dotdigital Group PLC acts as the parent company to Dotmailer Limited,
Dotagency Limited, Dotsearch Europe Limited, Dotmailer Inc, Dotsurvey Limited (Dormant), DotSEO Limited (Dormant),
Dotcommerce Limited (Dormant) and Doteditor Limited (Dormant).
27. 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 £106,000 (2014: £69,000)
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 2015 had a WAEP of 14.43p (2014: 8.82p) and a weighted average contracted life
of 2.1 (2014: 2.8) years and their exercise prices ranged from 1p to 31.50p. All share options are settled in form of
equity issued.
30.06.15 30.6.14
No of options WAEP No of options WAEP
Outstanding at the beginning of the period 13,923,790 8.82p 16,117,930 7.54p
Granted during the year 2,275,000 29.53p 3,655,860 18.25p
Forfeited/cancelled during the period 1,040,000 16.56p 540,000 12.57p
Exchanged for shares 4,220,000 6.06p 5,310,000 5.80p
Outstanding at the end of the period 10,938,790 14.43p 13,923,790 8.82p
Exercisable at the end of the period 8,462,724 10.44p 9,517,930 4.09p
The weighted average share price at the date of the exercise for share options exercised during the period was 30.52p (2014: 30.58p). The input into the Black-Scholes
model are as follows: 10 April 2015 28 November 2014 18 October 2013 Number of options granted 750,000 1,525,000 3,554,794 Share price at grant date 31.50p 29.00p 17.82p
Exercise price 31.50p 28.50p 18.25p Option life in years 5 5 5 Risk free rate 1.33% 1.35% 1.40% Expected volatility 30% 30% 30% Expected dividend yield 0% 0% 0.4% Fair
value of options/warrants 5.64p 5.33p 3.31p 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.
28. GROUP RECONCILIATION OF PROFIT BEFORE CORPORATION TAX TO CASH GENERATED FROM OPERATIONS
28 November 2014
18 October 2013
Number of options granted
750,000
1,525,000
3,554,794
Share price at grant date
31.50p
29.00p
17.82p
Exercise price
31.50p
28.50p
18.25p
Option life in years
5
5
5
Risk free rate
1.33%
1.35%
1.40%
Expected volatility
30%
30%
30%
Expected dividend yield
0%
0%
0.4%
Fair value of options/warrants
5.64p
5.33p
3.31p
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.
28.
GROUP RECONCILIATION OF PROFIT BEFORE CORPORATION TAX TO CASH GENERATED FROM OPERATIONS
Group Company
30.6.15 30.6.14 30.6.15 30.6.14
£'000 £'000 £'000 £'000
Current:
Profit before tax from all operations 5,243 3,600 (319) (363)
Currency revaluation 3 (4) - -
Depreciation 1,556 1,117 - -
(Profit)/Loss on disposal of fixed assets (1) 1 - -
Share based payments 106 69 106 69
Finance income (27) (20) - -
6,880 4,763 (213) (294)
Decrease/(increase) in trade receivables (1,666) (769) 721 1,578
Increase/(decrease) in trade payables 453 1,303 76 (1,277)
Cash generated from operations 5,667 5,297 584 7
29. GROUP CASH AND CASH EQUIVALENTS
The amounts disclosed on 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 2013 6,072 70
As at 31 July 2014 9,306 109
As at 30 June 2015 11,932 166
30.06.15 30.06.14
£'000 £'000
Net cash flow from discontinued operations
Net cash generated from operating activities - (95)
Net cash generated from investing activities - -
Net cash used in financing activities - -
30. PROJECT DEVELOPMENT
During the period the Group incurred £1,611,929 (2014: £1,344,414) in development investments. All resources utilised in
development has been capitalised as outlined in the accounting policy governing this area.
31. EVENTS AFTER THE END OF THE REPORTING PERIOD
There are no post balance sheet events which impact the Group's financial statement.
This information is provided by RNS
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