REG - Eagle Eye Sol Gp PLC - Final Results
21/09/2022 07:00
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RNS Number : 0651A Eagle Eye Solutions Group PLC 21 September 2022
21 September 2022
Eagle Eye Solutions Group plc
("Eagle Eye", the "Group", or the "Company")
Final results for the year ended 30 June 2022
An exceptional year of growth, creating value for some of the largest
retailers in the world
Eagle Eye, (LSE: "EYE"), a leading SaaS technology company that creates
digital connections enabling personalised, real-time marketing, is pleased to
announce its results for the financial year ended 30 June 2022 (the "Year").
The strong performance in the Year was driven by substantial new wins, the
increased speed at which customers have gone live and the continued deepening
relationships with existing customers, as they take advantage of the full
capabilities of the AIR platform. Through the drive and dedication of our
exceptional team, we are at the forefront of the digital transformation taking
place in the world of retail marketing and our performance for the Year is a
demonstration of the momentum across the business.
Financial Highlights
FY 2022 FY 2021 % change
Group Revenue £31.7m £22.8m +39%
Recurring revenue (subscription fees and transactions) £24.0m £16.9m +42%
Recurring revenue % of Group revenue 76% 74% +2ppt
Annual Recurring Revenue* (ARR) £23.9m £16.9m +41%
Net Revenue Retention** 145% 105% +40ppt
Adjusted EBITDA*** £6.5m £4.2m +54%
EBITDA margin 20.5% 18.5% +2ppt
Profit/(loss) after tax £0.6m £(0.1)m n/a
Closing net cash position**** £3.6m £0.8m +347%
* Period End Annual Recurring Revenue is defined as period exit rate for
recurring AIR subscription and transaction revenue plus any professional
services contracted for more than 12 months hence and secured new wins,
excluding any seasonal variations and lost contracts.
**Net retention rate is defined as the improvement in recurring AIR revenue
excluding new wins in the last 12 months.
***EBITDA has been adjusted for the exclusion of share-based payment charges
along with depreciation, amortisation, interest and tax from the measure of
profit.
**** Net cash is defined as cash and cash equivalents less financial
liabilities.
Operational Highlights
· Acceleration in revenue growth to 39% as the Group continues to
deliver on its customer strategy: Win, Transact and Deepen
o New customers secured in the year include two new U.S. customers and
Halfords Motoring Group
o A number of significant customer contracts moved into the transactional
phase, including Woolworths in Australia, Staples US Retail, Virgin Red,
Halfords Motoring Group and Waitrose
o Strong increase in interest in our loyalty offerings by customers such as
Asda, Pret A Manger and PizzaExpress, as they seek to retain their customers
in the post-pandemic environment
· Strong performance reflects the strength of the Group's SaaS
business model
o ARR up 41% to £23.9m, NRR increased to 145% and maintained low churn at
less than 1%, providing a strong basis for continued expansion
· Focused on delivering profitable growth
o 54% increase in adjusted EBITDA to £6.5m and an increased adjusted EBITDA
margin of 20%, considerably ahead of our initial expectations for the Year due
to strong revenue growth and careful management of the cost base, whilst still
investing in product and sales & marketing
· Encouraging progress in the U.S.
o The Group now has five clients in North America including two through
Eagle Eye's influential partner, Neptune Retail Solutions
o North America is the fastest growing region, contributing 56% of Group ARR
· Committed to making Eagle Eye a great place to work
o Awarded three-star accreditation by Best Companies to Work for 2022
· Continued evolution of our offering to meet the needs of the
world's largest retailers
o A focus on increasing our product flexibility and platform speed and scale
o Platform speed increased by five times through our database design, cloud
architecture and system design
Outlook
· Eagle Eye has entered FY23 with momentum across the business, a
strong new business pipeline and a growing international opportunity, in the
U.S., Europe and Asia
· Whilst the Group is cognisant of the inflationary environment,
the business has successfully mitigated these challenges to date, and is
confident in its ability to continue to do so
· Trading in the current year is in line with Board expectations
and the Board is confident in achieving a positive year of profitable growth
in FY23
Tim Mason, Chief Executive of Eagle Eye, said:
"I am incredibly proud of the successes achieved this Year by our fantastic
team, against a challenging economic backdrop. Through their drive and
dedication, we are at the forefront of the digital transformation taking place
in the world of retail marketing.
"In the current difficult economic environment, customer loyalty and effective
promotions are more important than ever. The retail industry is becoming
increasingly aware that data driven, personalised promotions are one of the
most effective ways to drive increased trade. The ability of our AIR platform
to deliver 1:1 marketing, in real time, at an enterprise scale, means we are
well positioned to address this growing customer need.
"The prospects for Eagle Eye are increasingly positive and we have entered
FY23 in a very strong position with considerable momentum across the business.
We have a substantial addressable market, high profile customers in multiple
geographies, a proven offering and a high-quality business model driving
growth in revenue and profits and generating cash. These factors, coupled with
our strong new business pipeline, and growing international opportunity,
underpin the Board's confidence in the long-term success of Eagle Eye."
For further information, please contact: Tel: 0844 824 3686
Tim Mason, Chief Executive Officer
Lucy Sharman-Munday, Chief Financial Officer
Investec (Nominated Advisor and Joint Broker) Tel: 020 7597 5970
Corporate Broking: David Anderson / Nick Prowting
Corporate Finance: Sebastian Lawrence / Pippa Harries
Shore Capital (Joint Broker) Tel: 020 7408 4090
Corporate Finance: Daniel Bush / David Coaten
Corporate Broking: Henry Willcocks
Alma PR Tel: 020 3405 0205
Caroline Forde / Hannah Campbell / Stephen Samuel
About Eagle Eye
Eagle Eye is a leading SaaS technology company transforming marketing by
creating digital connections that enable personalised performance marketing in
real time through coupons, loyalty, apps, subscriptions and gift services.
Eagle Eye AIR enables the secure issuance and redemption of digital offers and
rewards at scale, across multiple channels, enabling a single customer view.
We create a network between merchants, brands and audiences to enable customer
acquisition, interaction and retention at lower cost whilst driving marketing
innovation.
The Company's current customer base comprises leading names in UK Grocery,
Retail, Leisure and Food & Beverage sectors, including Asda, Sainsbury's,
Tesco, Waitrose and John Lewis & Partners, Virgin Red, JD Sports, Pret A
Manger, Greggs, Mitchells & Butlers, PizzaExpress; in North America,
Loblaws, Shoppers Drug Mart, Southeastern Grocers and Staples US Retail and in
Australia & New Zealand, Woolworths Group and The Warehouse Group.
Chairman's Statement
I am delighted to update our shareholders on another fantastic year for Eagle
Eye, as demonstrated by the expansion in our customer base and growth in
financial metrics. The strong performance in the Year was driven by
substantial new wins, the increased speed at which customers have gone live
and the continued deepening relationship with existing customers, as they take
advantage of the full capabilities of the AIR platform.
Of particular note was the considerable progress achieved within the North
American market, our fastest growing region, contributing approximately 56% of
Group ARR at Year end. Our partnership in the U.S. with Neptune Retail
Solutions continues to progress well, with two joint customers now
successfully live, elevating the profile of Eagle Eye in what is expected to
be the world's largest digital promotions market.
This expanded international footprint, growing number of enterprise customers
and continued investment into the team and product, provides an exciting basis
for profitable growth in the years ahead.
Financial Results
The quality of the Group's SaaS business model can be seen in the strong
financial performance in the Year. The increased win rate, success in
deepening customer relationships and low customer churn meant Eagle Eye
delivered a considerable acceleration in revenue growth of 39% (FY21: 12%) to
£31.7m (FY21: £22.8m). Continued careful management of the cost base, whilst
continuing to invest in the product and sales & marketing, resulted in an
increase in adjusted EBITDA for the Year of 54% to £6.5m (FY21: £4.2m), and
an increased adjusted EBITDA margin of 20% (FY21: 18%), considerably ahead of
our initial expectations for the Year. As a result, the Group reports strong
growth in full year profit before tax, up 44% to £0.7m (FY21: £0.1m), and a
maiden profit after taxation of £0.6m (FY21: loss of £(0.1)m), and a maiden
profit after taxation of £0.7m (FY21: loss of £(0.1)m).
All businesses are now operating in an inflationary environment and Eagle Eye
is no exception. The management team have proven their ability to successfully
navigate these challenges, balancing investment into the business with
maintaining financial strength, and the Board is confident in their ability to
continue to do so.
The Group's net cash position was £3.6m at year end. During the Year, the
Group entered into a new three year £5m funding facility with Silicon Valley
Bank, undrawn at the period end, with up to an additional £2.5m available,
subject to credit approval at the time, should there be an appropriate
investment opportunity. This provides the business with security and
flexibility over its financing options to deliver on its growth aspirations.
ESG and Our People and Values
As a Board, we are committed to high standards of ESG and made good progress
against our stated objectives during the Year, building on our existing
foundation of responsible business practice. Key to any policy is benchmarking
and data, and we are measuring our progress through KPIs and comparing them to
the market median to allow focus on areas of improvement.
An important part of our social contribution has been our partnership with 52
Lives, a fantastic charity built around the concept of 'kindness' where we
have a commitment to help an individual or family in need every month of the
year. Our internal focus of the year has been the Purple Women initiative,
launched in 2021, which aims to increase representation of women across the
business, where we have continued to make important progress.
Minimising any impact on the environment from our operations remains an
important focus for the business. The introduction of 'Virtual First' has had
a positive impact on the travel requirements for our employees and therefore a
positive impact on carbon emissions. We already have a low environmental
footprint but ensuring that our key suppliers monitor and have targets around
their environmental impact is a key part of our supplier code. We also
recognise the importance and value of high standards of corporate governance
and always look to maintain our strong corporate governance framework, which
we have already adopted by following the QCA Code.
Eagle Eye places the success and happiness of its people at its heart, which
was evident at the Company's annual conference in July 2022, where I was once
again struck by the commitment, creative thinking and diversity of the team.
On behalf of the Board, I would like to thank all the team for their
commitment to delivering great service for our customers and embodying the
Company's values. Against the current macro-economic backdrop, Eagle Eye has
had a fantastic year built on the shoulders of an exceptional team.
Opportunity
The acceleration of digital strategies in the post-pandemic environment
presents a considerable global opportunity for Eagle Eye. The US will continue
to be a key area of focus in the current financial year, as we build on the
strength of our partnership, and applicability of the AIR platform to capture
a growing proportion of the ever-expanding retail market. We also plan to
invest sales resource in Asia, building on the success of our two landmark
customers in the Asia Pacific region, Woolworths Group in Australia, and The
Warehouse Group in New Zealand. Building out from our UK success, we intend to
expand further into Europe where there is a substantial addressable market.
We remain committed to profitable growth and will continue to review
acquisition opportunities as they arise which complement our product and
customer strategy across our international territories.
With a growing customer base, including some of the world's largest retailers,
the investments we continue to make in our technology, alongside growing
levels of recurring revenue and a strong sales pipeline, the Group has entered
the new financial year in a robust position and looks to the future with
considerable confidence.
Malcolm Wall, Non-Executive Chairman
CEO statement
I am incredibly proud of the successes achieved this Year by our fantastic
team, against a challenging economic backdrop. Through their drive and
dedication, we are at the forefront of the digital transformation taking place
in the world of retail marketing.
This exceptional team is creating value through great technology, for some of
the biggest businesses on the planet. Underpinned by ongoing innovation and
investment in our platform, Eagle Eye AIR is a proven, enterprise grade
loyalty, promotions, and stored value platform, trusted by some of the biggest
and best retailers in the world.
We are as proud of the product we have built as we are of our incredible team
who work tirelessly to ensure our customers get the maximum value from their
investment in AIR. We believe that paramount to our success is our unique way
of working, which we have formalised in the Year in our new Customer Promise.
This serves to encapsulate our core values and communicates the things that
are most important to us as a team; delivering a service we are proud of,
always being transparent, trying to always do the right thing and caring
deeply for our customers and partners.
The strength of our SaaS business model is evidenced by our strong metrics,
with AIR ARR up 41% to £23.9m, NRR increasing to 145% and churn maintained at
less than 1%, providing a strong basis for continued expansion. Revenue grew
39% in the Year, driven by all areas of the customer strategy. EBITDA margins
continued to increase, whilst we also continue to invest, and this growing
level of profits is now flowing through into positive cash generation,
providing us with confidence to continue to invest to support our future
growth. The upgrades to guidance twice during the year are a clear
demonstration of the momentum across the business, which I am pleased to
confirm has continued since the period end.
We are actively targeting two large areas of opportunity within the U.S.: the
Consumer Packaged Goods (CPG) market and the Loyalty and Personalised
Promotions market. Progress has been particularly encouraging, winning new
customers both direct and through partners, and taking those customers live
increasingly quickly. The Group now has five clients in North America,
accounting for 56% of the Group's ARR, demonstrating the strong progress being
achieved in what is expected to be the world's largest digital promotions
market, due to the huge value of promotions by CPG businesses.
Market opportunity and competitive strength
The overarching competitive strength of the AIR platform is its ability to
deliver real-time loyalty i.e., personalised marketing messages to consumers
securely, at an enterprise scale, via a multitude of channels, in real-time.
This ability is resonating with retailers around the world, as they seek to
accelerate their digital marketing strategies.
The global shift towards personalised digital marketing continues at pace, and
we anticipate this will only accelerate in the face of tough economic times
for consumers. Looking back at the 2008 financial crisis for example, coupon
redemption increased by 23% from 2008 to 2009, with that momentum continuing
well into 2011. Our customers recognise that loyalty and promotions are
increasingly important in attracting and retaining consumers in periods of
high real inflation.
While consumers look for promotions to assist them in reducing the cost of
goods, so too do retailers use it to assist their financial positions. In
McKinsey's "The State of Grocery Retail 2022" report, it was found that
grocery retailers adopting personalised promotions with the right message and
the right discount, through the right channel could result in gains of 2 to 3
percent in EBITDA.
Both of these financial drivers are added to by the desire of the consumer to
receive personalised interactions from retailers. Recent consumer research
by Adobe** found that "more than half (67%) of respondents say that, when
shopping in-store or online, they would like to receive personalised
promotions or offers based on their spending habits. Many consumers (61%) also
say receiving these promotions will make them more likely to make a purchase."
In the face of huge upheaval and change, this is a clear demonstration that
retailers globally have had to develop their omnichannel capabilities to
address the rapidly changing consumer shopping behaviours and Eagle Eye has
the ability to deliver such personalisation at scale.
* NCH research
** Adobe Commerce study (June 2022)
Increasingly differentiated offering for the US market
In the U.S., a key differentiator is AIR's ability to facilitate personalised
digital coupons for CPG companies, who have traditionally spent heavily on
paper coupons and are now looking to transition to more effective,
personalised, digital offers. This move is popular with their grocery retail
partners because it increases reasons for digital engagement. Through our
partner, Neptune Retail Solutions, the Group has access to the CPG advertising
budget, at over 45k+ retail outlets. The success of our first two joint
customers, Southeastern Grocers and one of the largest national grocers in the
U.S, provide us with compelling case studies with which to target this market.
Partnerships provide additional strength and access
Eagle Eye AIR has the ability to sit across the entire marketing ecosystem,
connecting all the elements required to deliver personalised marketing at
scale. As part of our growth strategy, we will continue to create partnerships
and collaborations with other businesses in the industry, using their
expertise to strengthen our offering and leveraging their marketing reach.
In the Year, we have deepened our relationships with key partners across the
spectrum of the marketing ecosystem including Oracle Simphony, Neptune Retail
Solutions and dunnhumby. We are pleased to have gained our Google Cloud
Partner Advantage accreditation, which gives us access to Google's training,
co-marketing and technical resources.
We have recently hired a Head of Strategic Alliances to develop our existing
partner relationships and broaden our ecosystem of technology partners and
systems integrators.
1. Delivering against our strategy
We successfully delivered across all three areas of our customer strategy in
the Year - Win, Transact and Deepen.
· 'Win': bring more customers on to the Eagle Eye AIR platform;
· 'Transact': drive higher redemption and interaction volumes
through the platform; and
· 'Deepen': encourage our customers to adopt more of our product
portfolio as they become more adept at digital marketing.
We have won a substantial number of new customers across multiple geographies
and benefitted from the accelerated ability to take these customers live while
continuing to deepen our contractual relationships with existing customers.
Our high level of customer retention means that each new customer win
significantly adds to our growth prospects, with revenue from our largest
revenue-generating customers typically increasing by a multiple of over three
times by the end of their third year on the AIR platform, through both
increased use of the platform and the addition of new services.
Win
There was an increase in the win rate, both in the UK and internationally,
resulting in an uplift in "Win" related revenue throughout the Year. New
customer highlights in the Year include Halfords Group plc, for a customer
engagement solution, and three new U.S. customers.
The increased win rate across our key geographies demonstrates the range of
capabilities being delivered by the Eagle Eye AIR platform, with the ways in
which businesses are using Eagle Eye AIR increasing at pace, providing us with
a strong base for future expected growth. Securing these wins in the current
economic environment, highlights how promotions are more important than ever
and are increasingly becoming one of the most effective ways to drive
increased trade.
The Group has an exciting new business pipeline heading into 2023, with a
number of potential contracts coming from each key geography, which will
continue to enable us to achieve sustainable and profitable growth.
Transact
Several significant customer contracts moved into the transactional phase
during the Year. These included Woolworths in Australia, Staples US Retail and
Virgin Red.
Positive developments in the final quarter of the Year also included the go
live of personalised offers for Halfords Motoring Club and Waitrose. We
continue to benefit from development work on the product to generate more
turnkey solutions for our clients, often reducing the implementation time.
Chargeable AIR redemption and interaction volumes, a key measure of usage of
Eagle Eye AIR, grew by 62% to 1.7bn (FY21: 1.0bn), primarily reflecting an
increased number of loyalty transactions following the successful launch of
new customer programmes.
Deepen
A key part of our strong performance this Year has been the considerable
increase in use of the AIR platform by our existing customers, as reflected in
the growth in NRR to 145%. We have seen a significant increase in interest
in our loyalty offerings, in particular, by our customers, such as Asda, Pret
a Manger and Pizza Express, as they seek to retain their customers in the
post-pandemic environment.
In the UK, we have been working closely with Asda since 2014 on back-office
efficiency measures and are now excited to be selected by Asda for their new
loyalty programme, Asda Rewards. Following a successful trial with Asda
employees in September 2021, the programme has now launched nationally.
Further customer expansions include Pret A Manger with the expansion of the
coffee subscription service into France and the U.S., as well as the launch of
their loyalty scheme, Pret Perks, and the launch of a subscription service for
Liberty Retail Limited.
We also launched a new loyalty programme for long-standing digital promotions
customer, PizzaExpress. The PizzaExpress scheme is the first of its kind by a
UK hospitality operator, using the AIR stampcard feature alongside our Digital
Wallet to manage customers' personal stampcards and reward coupons.
We deepened our partnership with Mitchells & Butlers through the launch of
a new project to gather data on different offer types used by customers whilst
also helping to reduce fraud.
We saw some impact from COVID-19 recovery on our deepen revenue in the Year.
NRR pre COVID impact is approximately 130%, which we anticipate to be a target
level for the business moving forward.
Pleasingly, our long-term contract customer churn rate by value remains very
low at below 1% with good levels of renewals taking place.
2. Innovation
Customer focused innovation has always been one of our core company values,
spending 17% of revenue (FY21: 19%) on the product during the Year. It is
fundamental to our success and central to how we will continue to succeed into
the future.
During the past Year we have innovated to ensure that we can continue to meet
and exceed the needs of our customers all over the world. This has meant a
focus on platform speed and scale and product flexibility.
Platform speed and scale
A significant proportion of our work in the Year has been on continuing to
extend our omnichannel POS Connect capability. POS Connect is our
state-of-the-art POS solution which enables our clients to deliver highly
personalised offers at huge scale without relying on their existing
infrastructure.
For enterprise clients such as grocery retailers, their performance
requirements are based on the number of people in their shops, the number of
items in their basket as they checkout and the number of promotions available
at any given moment to calculate what offers and rewards to which a customer
is entitled. To minimise the time taken for customers checking out, our
platform needs to be able to perform these calculations within milliseconds.
Based on a basket of 50 items, we have increased the speed of these
calculations by five times through our database design, cloud architecture and
system design.
Product flexibility
We continue to deliver new capabilities all the time and offer many different
promotional types which are available for use, out of the box. We have
extended our Gamification services to deliver more engaging customers journeys
that drive frequency and spend. Examples of retailers using gamification
include Southeastern Grocers whose Rewards Boosters programme gives customers
a boosted number of points for buying selected products within a defined
timeframe and ASDA who have set customer missions to earn cashback. We
continue to develop our gamification services as retailers looks for new and
innovative ways to engage and reward customers and boost like-for-like sales.
We provide all our customers with the ability to flex the technology to enable
them to deliver their own unique strategy whilst still maintaining a high
level of standard functionality, typically between 80-90%. We believe this is
a real differentiator for us in the market.
By making these improvements, we have been able to start engaging with our
clients on delivering what we believe is the next generation of marketing -
contextual personalisation. This means we can personalise the "when" as well
as the "what" of every message.
Data and Reporting
We made solid progress during the Year through the launch of Eagle Eye
Analytics, a solution which improves the way our customers track and measure
the performance of their loyalty and promotional activities. Eagle Eye
Analytics is built using Google's market-leading Looker data analytics
platform and enables our clients to benefit from enhanced reporting and new
features. We will continue to evolve our data and reporting capabilities in
the coming year to ensure we deliver the future requirements of our customers.
Integrations and Partnerships
It is our mission to be the most flexible, scalable and future proofed
promotions and loyalty platform in the world. In order to achieve this, we
continue to invest in making it easier for retailers and their partners to
work with us. We now have over 80 pre-built integrations with POS providers,
eCommerce platforms, CRM systems, data analytics companies, payment providers
and more, and will continue to engage with partners all over the world to
ensure we are able to deliver the maximum value to our customers.
3. International growth
We are now clearly seeing the benefit of our investment into international
expansion, with strong growth in North America and exciting prospects in our
Australia operations, providing us with access to the Southeast Asian market.
North America
CPG offering in partnership with Neptune Retail Solutions
The CPG digital coupons market is a vibrant and highly active opportunity,
where contracts are being put out for tender typically on a three-year cycle.
These are high volume, pay per click opportunities for which we have developed
a pre-packaged, rapidly deployed offering alongside our partner, NRS. Together
we are revitalising and modernising how CPG companies can engage shoppers
digitally through personalised promotions.
Since the signing of the first joint contract with Southeastern Grocers in
2019, the partnership has driven more than 200 million personalised offer
recommendations monthly to Southeastern Grocers' loyalty programme members
across all banners, and so we are excited about what our offering will bring
to this large U.S. grocer. The success of the programme has elevated the
profile of Eagle Eye in the U.S. market.
We were delighted to sign one of the largest national U.S. grocers at the
beginning of the Year, the second customer to be secured alongside our partner
Neptune Retail Solutions (NRS). Importantly, this grocer went live on the AIR
platform in May 2022, just a few months after contract signing. Achieving
deployment so quickly is a reflection of the investment we have made in this
product where the market requires more of a turnkey solution, which enables a
faster time to market for our customers, whilst generating recurring revenue
quicker.
Loyalty and Personalised Promotions
We are also targeting our more traditional market of Loyalty and Personalised
Promotions, of which Loblaw is a successful example. For these types of
customer deployments, AIR is part of an extensive, complex ecosystem,
requiring greater customisation and for which the flexibility of the AIR
platform is ideally suited. These types of opportunities will have a longer
sales cycle than CPG and will generally go-live in distinct phases.
In January 2022, we were pleased to announce that we have been selected by
Giant Eagle, a regional food, fuel and pharmacy retailer and one of the 40
largest family operated companies in the US, to facilitate its new digital
loyalty platform and to enable increased promotional capabilities.
In Canada, during the first half of the Year, we signed a three-year contract
to extend our partnership with Loblaw Companies Ltd ("Loblaw") to power the PC
Optimum(TM) loyalty programme. Loblaw is using Eagle Eye's AIR digital
marketing platform as well as professional services to ensure ongoing
innovation to deliver value to PC Optimum(TM) members.
The sales pipeline in North American market continues to expand, both directly
and through partners, and presents an exciting opportunity for the Group. We
continue to invest in our international capabilities to ensure we have the
ability to deliver continued revenue growth.
Australasia
With two of the largest retailers in the Australasia region now customers, we
are exploring the sales opportunity in the wider Asia Pacific region. The
Group believes there to be a good level of enterprise prospects in the region.
Our significant five-year contract with Woolworths went live in August 2021 to
the members of the Everyday Rewards loyalty scheme, just 10 months after
contract signature. Our platform has already helped Woolworths to deliver
several Everyday Rewards app enhancements including more personalised offers
and real-time boosting of offers. This year we will begin work with Woolworths
New Zealand, operator of over 180 Countdown branded supermarkets in New
Zealand.
We continued our work with The Warehouse Group, one of the largest retailing
groups in New Zealand. In January 2022, its largest retail banner, The
Warehouse, went live nationally with an app-first loyalty programme, The
Market Club. We continue to work with The Warehouse Group as it seeks to
deliver more features to members of its fast-growing programme.
Eagle Eye was delighted to sign a contract with IKEA Indonesia in September
2022, post Year end, to provide its new personalised loyalty platform. IKEA
Indonesia is a subsidiary of Dairy Farm International, the leading pan-Asian
retailer.
Europe
Having tested the market within mainland Europe through targeted marketing
activities, we are starting to see increased customer interest for our
offerings in mainland Europe, both from existing and potential new customers,
such as Cosmos in Greece, HMS Host in Netherlands, the expansion of our JD
Sports relationship outside of the UK, Pret a Manger, VF Group, IMO and
several others. Having carried out further analysis of the size of the
enterprise retail opportunity, we will initially target the DACH (Germany,
Austria, Switzerland) region, the largest economic region in Europe, placing a
small Eagle Eye team in Germany alongside our partner network. We continue to
explore additional opportunities to expand in the wider European region.
4. Better, Simpler, Cheaper
While investing in innovation and growing the business, we simultaneously look
for inherent productivity and efficiencies coming from the scale of what we
do. The relevance of this ethos came to the fore at the time of the COVID-19
pandemic, when the agility of the organisation enabled us to swiftly adapt to
the changing working practices enforced by the pandemic and continues to be
important as we navigate the current difficult macro-economic environment.
We have developed a proven business model to grow our EBITDA margin whilst
also investing, as we 'Win', in sales & marketing and enhancements to the
product to generate new opportunities for growth.
Our people costs represent 65% of the operating costs of the business in the
Year (FY21: 64%) and we recognise they are our biggest asset. As we have moved
through the pandemic and workforces have become more mobile, our business
model has allowed us to use remuneration as one of the levers to reward and
retain our best people. Continued investment into the new year is built into
our plan, in line with the model we have developed. We aim to award pay rises
across the organisation at least in line with the average levels of wage
inflation to ensure we maintain our high levels of retention. We continue to
review average industry wages and are comfortable we are well placed to manage
any rises in the year ahead.
We have moved to a regional structure, with a VP in charge of each region,
providing greater autonomy to make local decisions and champion our culture,
which will be essential to maintain our agile ethos as we scale.
Our people and beliefs
Creating value for our customers sits at the heart of Eagle Eye and we believe
this is the foundation of our successful business. We have an exceptional
team creating value through market leading technology for some of the biggest
names across the globe. We have a clear vision, mission, and purpose, and a
unique 'Purple Method' of working that we believe enriches lives and, has the
power to change the world for the better. By collaborating with clients to
deliver solutions that solve their pain points and to help maximise their
return on investment, we secure customer loyalty. We have been tracking the
value we create through our Customer Professional Services Satisfaction
Reports introduced during the year and Employee Net Promoter Score, which is
improving and is significantly higher than the industry benchmarks.
To bring our "Purple Method" to life, this year we also authored our own Eagle
Eye book, The Purple Playbook, which has been gifted to every member of the
team and will be given to every new starter as part of their welcome pack. It
is part manifesto, part culture book, part employee handbook and part 'how we
got to where we are!" Ultimately, its purpose is to celebrate everything and
everyone that contributes to making Eagle Eye the fantastic organisation that
it is today.
We celebrate the contribution of our people both at our Annual Company
Conference and monthly by our Purple Awards. This year we have launched our
"Purple Pathways" (career development) programme, which will support employees
to develop their career at Eagle Eye and advance into new roles over time.
As part of our ongoing commitment to charity work, we partnered with 52 Lives,
a charity built around the concept of 'kindness' who find people who need help
and then deliver it. The Purple Places Challenge which we launched in FY22 was
also a huge success; the challenge saw the team walk, run, cycle and row their
way around the world, as part of our efforts to raise money for 52 Lives and
we ran several more charity events during the year to support this. We are
proud to have raised over £40,000 that has helped the lives of 16 people and
their families.
In May 2022, one of the highlights of my year was receiving a 3-star
accreditation rating from Best Companies. This is their highest accolade,
which represents 'world class' levels of employee engagement. We employ over
170 staff and ranked number eight in the UK in the Technology sector, and
number seven in the South East overall in their Q2 2022 survey. We are a
business that places the success and happiness of its people at its heart. In
responding to the survey, employees revealed they felt positive about the
leadership and management at Eagle Eye, were happy with their work and
home-life balance and 100% of employees felt proud of working at Eagle Eye.
This achievement comes after the implementation of a number of people-focused
initiatives. In the last year we have strengthened our compensation reviews
to incorporate loyalty and to reward people based on the value they bring.
Several changes have also been catalysed by our 'Purple Women' initiative;
including family-friendly policies that offer parents more flexible working
patterns, enhanced leave packages, and additional support on their return to
the work; together with education and support of health-related issues
impacting employees.
Outlook
The prospects for Eagle Eye are increasingly positive and we have entered FY23
in a very strong position with considerable momentum across the business, with
trading in the first few months of the Year in line with the Board's
expectations. We have a considerable addressable market, high profile
customers in multiple geographies, a proven offering and a high-quality
business model driving growth in revenue, profits and generating cash.
In the current difficult economic environment, customer loyalty and effective
promotions are more important than ever. The retail industry is becoming
increasingly aware that data driven, personalised promotions are one of the
most effective ways to drive increased trade. The ability of our AIR platform
to deliver 1:1 marketing, in real time, at an enterprise scale, means we are
well positioned to address this growing customer need.
The Group continues to successfully manage inflationary pressures and the
underlying growth and flexibility of the Company's business model mean that
management can invest into the business and people with confidence to support
future growth.
The Group's strong new business pipeline, and growing international
opportunity in the US, Europe, and Asia, coupled with supportive market
drivers, underpins the Board's confidence in the long-term success of Eagle
Eye.
Tim Mason, Chief Executive Officer
Financial review
Key Performance Indicators
Financial FY22 FY21
£m £m Var
Revenue 31.7 22.8 39%
Subscription and transaction revenue:
- Licence revenue £12.2m 39% £7.9m 34% 54%
- AIR transaction revenue £9.7m 30% £6.4m 28% 52%
- SMS transaction revenue £2.1m 7% £2.6m 12% (19)%
Total subscription and transaction revenue £24.0m 76% £16.9m 74% 42%
AIR Annual recurring revenue 23.9 16.9 41%
Net revenue retention rate 145% 105% +40ppt
Adjusted EBITDA ((1)) 6.5 4.2 54%
EBITDA margin 20.5% 18.5% +2ppt
Profit before tax 0.7 0.1 444%
Net cash ((2)) 3.6 0.8 347%
Cash and cash equivalents 3.6 1.7 112%
Short-term borrowings - (0.9) 100%
Non-financial FY22
FY21
AIR redemption & interaction volumes 1,693m 1,043m 62%
Long-term contract customer churn by value 0.2% 0.3% (0.1)ppt
((1)) Adjusted EBITDA excludes share-based payment charges along with
depreciation, amortisation, interest and tax from the measure of profit and is
reconciled to the GAAP measure of profit before taxation in note 5.
((2)) Net cash is cash and cash equivalents less borrowings.
Group results
Revenue
Revenue growth for the Group was 39% for the Year (FY21: 12%), achieving
growth in all areas of our customer strategy: Win, Transact and Deepen.
Professional services revenue increased by 30% to £7.6m (FY21: £5.9m). Under
IFRS 15, a SaaS business will typically recognise revenue (including
implementation revenue from professional services) over time. In some cases,
implementation revenue is now recognised over the period the service is live.
Therefore, during the period of implementation for a new client, which is
typically between two and six months, no revenue will be recognised, although
directly attributable associated costs are also spread over this period,
matching revenue and costs. Revenue from professional services that has been
deferred into future periods, but delivered and billed, was £3.0m at 30 June
2022 (30 June 2021: £1.0m).
The Group's Annual Recurring Revenue (ARR), which is our period exit rate for
recurring AIR subscription and transaction revenue plus any professional
services contracted for more than 12 months hence and secured new wins,
excluding any seasonal variations and lost contracts, increased by 41% to
£23.9m (FY21: £16.9m). The growth rate is higher than the overall revenue
growth due to the securing of long-term professional services in some
enterprise accounts, versus the comparative period.
The Group has a strong Net Revenue Retention (NRR) rate, which is the
improvement in recurring AIR revenue excluding new wins in the last 12 months.
It has improved in the period to 145% (FY21: 105%) due to successful deepening
of existing accounts and the recovery in the Food & Beverage sector from
the impact of Covid-19. Excluding the Covid-19 recovery impact, NRR for FY22
was 137%.
Chargeable AIR redemption and interaction volumes, a key measure of usage of
the AIR platform, increased by 62% to 1.7bn (FY21: 1.0bn), slightly ahead of
the 53% growth in recurring subscription and transaction revenue, reflecting
the banded pricing model for some of our Enterprise clients which now make up
a larger proportion of revenue following new wins during the year such as with
the Group's partner, Neptune; deepening of existing relationships including
with Asda Loyalty; and increasing transactional usage of the platform by
clients such as South Eastern Grocers.
In addition to winning new business, including Giant Eagle, Halfords and a
major US grocer, and deepening existing relationships, the Group successfully
maintained an extremely low rate of long-term contract customer churn by value
at 0.2% (FY21: 0.3%). This reflects the scale and breadth of the AIR platform
in meeting our customers' needs.
As expected, SMS messaging revenue fell from the prior year but still
generated revenue of £2.2m (FY21: £2.6m), reflecting some reversion of
consumer shopping habits to their pre-pandemic state and the end of use of the
Group's SMS messaging platform to support clients following the cessation of
the UK Government's Test & Trace guidelines. However, SMS volumes
continued to hold up well with those clients who recognise the benefit of an
omni-channel strategy and which have integrated both their High Street stores
and their eCommerce offering. Consistent with previous guidance, SMS is
expected to continue to represent a decreasing proportion of the business in
future years.
Gross profit
Gross profit grew 43% to £29.6m (FY21: £20.7m), with gross margin rebounding
to 94% (FY21: 91%) following the impact of Covid-19 pandemic in the prior year
and an underlying increase in gross margin from AIR platform revenues to 99%
(FY21: 98%). The lower margin SMS messaging business accounted for 2% of gross
profit (FY21: 4%).
Costs of sales includes the cost of sending SMS messages, revenue share
agreements and outsourced, bespoke development work. All internal resource
costs are recognised within operating costs, net of capitalised development
and contract costs.
Adjusted operating expenses
Adjusted operating costs increased 41% to £28.9m (FY21: £20.4m) as the
business has invested in line with our planned growth investment model. This
cost represents sales and marketing, product development (net of capitalised
costs), operational IT, general and administration costs.
The 45% increase in staff costs to £18.8m (FY21: £13.0m) reflected an
increase in average headcount for the year which was up 15% to 162 (FY21:
141). In addition, there were increased annual pay awards reflecting the
current competitive landscape and increased commission/bonus reflecting the
increased new customer win rate and the Group's strong EBITDA performance. We
continue to invest in developing our products, and in sales and marketing to
support our growth plan; within staff costs, gross expenditure on product
development increased to £5.2m (FY21: £4.3m) and sales and marketing spend
was £3.7m (FY21: £2.8m).
IT Infrastructure costs grew ahead of recurring revenue growth by 57% to
£6.5m (FY21: £4.2m) as the Group invested in infrastructure for its overseas
regions in advance of significant increases in volumes seen towards the end of
the year which were 15% higher at the end of H2 22 compared to the start of H2
22. Capitalised product development costs were flat at £2.2m (FY21: £2.2m),
whilst amortisation of capitalised development costs was £2.3m (FY21:
£2.2m). Contract costs (including costs to obtain contracts and contract
fulfilment costs), recognised as assets under IFRS 15, increased to £2.7m
(FY21: £0.7m), reflecting the high level of new wins during the year, and
amortisation of contract costs was £1.3m (FY21: £0.6m).
Adjusted EBITDA and Profit before tax
The strong revenue performance and continued controlled investment spend have
resulted in a significant increase in adjusted EBITDA margin to 20% (FY21:
18%) with adjusted EBITDA up 54% at £6.5m (FY21: £4.2m) for the Year. To
provide a better guide to the underlying business performance, adjusted EBITDA
excludes share-based payment charges along with depreciation, amortisation,
interest and tax from the measure of profit. The GAAP measure of operating
profit before interest and tax was £0.7m (FY21: £0.2m) reflecting the EBITDA
profit achieved in the year, offset by increased amortisation and the non-cash
share-based payment charge of £1.9m (FY21: £0.9m), reflecting the successful
EBITDA performance this year and the strong position the Group is now in to
deliver increased revenue and profits, which are reflected in future,
performance related, vesting assumptions.
The profit before tax for FY22 of £0.7m (FY21: £0.1m) was up 444%,
reflecting the improved profit before interest and tax and a reduction in net
finance expense to £0.05m (FY21: £0.11m) due to lower utilisation of the
Group's revolving loan facility, which was not utilised in the final quarter
of the year and was undrawn at the Year end.
Profit after tax, EPS and dividend
The improvement in profitability during the Year has allowed the Group to
forecast the recovery of taxable losses brought forward from prior years with
more certainty which, along with the continued successful R&D tax credit
claims, has helped reduce the effective tax rate of the Group during the Year,
with an effective overall Group tax rate of 19% (FY21: 145%).
As a result, the Group declared a maiden full year profit after taxation of
£0.6m (FY21: loss of £0.1m) and reported basic earnings per share improved
to 2.12p (FY21: basic loss per share 0.22p) with diluted earnings per share of
1.86p (FY21: diluted loss per share 0.22p). No dividend is proposed (FY21:
£nil).
The Board does not feel it appropriate at this time to commence paying
dividends and continues to invest in its growth strategy.
Group Statement of Financial Position
The Group had net assets of £8.6m at 30 June 2022 (30 June 2021: £5.4m),
including capitalised intellectual property of £3.5m (30 June 2021: £3.6m).
The movement in net assets reflects the improved EBITDA performance in the
Year and the exercise of share options during the year.
Current assets increased by £6.1m primarily due to revenue growth, aligned
with an improvement in debtor days to 61 (FY21: 68 days) and higher EBITDA,
generating cash in the Year. Liabilities increased by £4.1m primarily due to
increased deferred income arising from the treatment of billed revenue for new
implementation fees and professional services under IFRS 15, along with higher
bonus and commission accruals, reflecting the revenue and EBITDA growth in the
period, offset by the repayment of the Group's revolving credit facility
during the year.
Cashflow and net cash
The Group ended the Year with net cash of £3.6m (30 June 2021: net cash of
£0.8m) being better than the Board's prior expectations. During FY20, the
Group made use of a number of COVID-19 linked schemes in order to manage its
working capital, including the deferral of VAT and PAYE in the UK. As a
result, £1.7m of cash outflow was deferred from FY20 to FY21 with a further
£0.4m deferred to FY22 in line with agreed payment plans. All amounts have
now been repaid. Stripping out the impact of these schemes, the underlying net
cash inflow for the Year was £3.2m (FY21: £0.9m). Overall net cash inflow
for the Year was £2.8m (FY21: outflow of £0.7m).
The main components to the net cash inflow (unadjusted for the impact of
COVID-19 deferral schemes) were:
· the operating cash inflow of £7.4m (FY21: £2.4m), reflecting
the EBITDA profit of £6.5m (FY21: £4.2m), a working capital inflow of £1.5m
(FY21: £1.2m outflow), including COVID-19 deferral repayments, and net tax
payments of £0.6m (FY21: £0.6m). The £2.9m improvement in working capital
flow primarily arose as a result of increased income deferred under IFRS 15
and a higher bonus accrual reflecting the performance of the business in the
Year;
· offset by capital investment in the AIR platform and other
infrastructure of £2.4m (FY21: £2.4m), contract costs capitalised under IFRS
15 of £2.7m (FY21: £0.6m); and
· payments in respect of leases of £0.2m (FY21: £0.1m).
Banking facility
The Group has remained comfortably within its banking covenants which relate
to the Group's debt ratio and adjusted EBITDA performance. During the Year,
the Group entered a new £5.0m revolving loan facility with Silicon Valley
Bank UK Ltd at a reduced cost, replacing its £5.0m revolving loan facility
with Barclays Bank PLC. In addition to the new facility, the Group has an
additional £2.5m available, subject to credit approval at the time. This
provides the business with security and flexibility over its financing options
to deliver on its growth aspirations. The Group's gross cash of £3.6m (FY21:
£1.7m) and the undrawn £5.0m facility (FY21: £4.1m undrawn) gives the Group
£8.6m of headroom, which the Directors believe is sufficient to support the
Group's organic growth plans.
Lucy Sharman-Munday, Chief Financial Officer
Consolidated statement of profit or loss and total comprehensive income
for the year ended 30 June 2022
2021
2022
Note £000 £000
Continuing operations
Revenue 3 31,667 22,800
Cost of sales (2,037) (2,134)
Gross profit 29,630 20,666
Operating expenses (28,896) (20,432)
6,476 4,215
Adjusted EBITDA ((1)) 5
(1,851) (877)
Share-based payment charge
Depreciation and amortisation (3,891) (3,104)
Operating profit 734 234
Finance income 1 -
Finance expense (50) (108)
Profit before taxation 685 126
Taxation (131) (183)
554 (57)
Profit/(loss) after taxation for the financial year
581 (100)
Foreign exchange adjustments
Total comprehensive profit/(loss) attributable to the owners of the parent for 1,135 (157)
the financial year
((1)) Adjusted EBITDA excludes share-based payment charge, depreciation and
amortisation from the measure of profit
Earning/(loss) per share
From continuing operations
Basic 4 2.12p (0.22)p
Diluted 4 1.86p (0.22)p
Consolidated statement of financial position
as at 30 June 2022
2022 2021
£000 £000
Non-current assets
Intangible assets 6,663 6,527
Contract fulfilment costs 1,433 196
Property, plant and equipment 684 826
Deferred taxation 131 121
8,911 7,670
Current assets
Trade and other receivables 9,853 6,194
Current tax receivable 718 221
Cash and cash equivalents 3,632 1,713
14,203 8,128
Total assets 23,114 15,798
Current liabilities (12,185) (8,575)
Trade and other payables
Financial liabilities - (900)
(9,475)
(12,185)
Non-current liabilities
Other payables (2,362) (928)
(14,547) (10,403)
Total liabilities
Net assets 8,567 5,395
Equity attributable to owners of the parent
Share capital 264 261
Share premium 17,685 17,503
Merger reserve 3,278 3,278
Share option reserve 5,549 3,997
Retained losses (18,209) (19,644)
Total equity 5,395 5,395
Consolidated statement of changes in equity
for the year ended 30 June 2022
Share capital Share Merger Share option Retained losses Total
premium reserve reserve
£000 £000 £000 £000 £000 £000
Balance at 1 July 2020 257 17,256 3,278 3,525 (19,892) 4,424
Loss for the financial year - - - - (57) (57)
Other comprehensive income
Foreign exchange adjustments - - - - (100) (100)
- - - - (157) (157)
Transactions with owners recognised in equity
Exercise of share options 4 247 - - - 251
Fair value of share options exercised in the year - - - (405) 405 -
Share-based payment charge - - - 877 - 877
4 247 - 472 405 1,128
261 17,503 3,278 3,997 (19,644) 5,395
Balance at 30 June 2021
Profit for the financial year - - - - 554 554
Other comprehensive income
Foreign exchange adjustments - - - - 582 582
- - - - 1,136 1,136
Transactions with owners recognised in equity
Exercise of share options 3 182 - - - 185
Fair value of share options exercised in the year - - - (299) 299 -
Share-based payment charge - - - 1,851 - 1,851
3 182 - 1,552 299 2,036
264 17,685 3,278 5,549 (18,209) 8,567
Balance at 30 June 2022
Included in Retained losses is a cumulative foreign exchange profit balance of
£513,000 (2021: loss £(69,000)).
Consolidated statement of cash flows
for the year ended 30 June 2022
2022 2021
£000 £000
Cash flows from operating activities
Profit before taxation 685 126
Adjustments for:
Depreciation 320 297
Amortisation 3,570 2,806
Share-based payment charge 1,851 877
Finance income (1) -
Finance expense 50 108
Increase in trade and other receivables (3,659) (1,233)
Increase/(decrease) in trade and other payables 5,155 (15)
Income tax paid (785) (563)
Income tax received 221 -
7,407 2,403
Net cash flows from operating activities
Cash flows from investing activities
Payments to acquire property, plant and equipment (178) (221)
Payments to acquire intangible assets and contract fulfilment costs (4,943) (2,826)
(5,121) (3,047)
Net cash flows used in investing activities
Cash flows from financing activities
Net proceeds from issue of equity 185 251
Proceeds from borrowings 900 2,200
Repayment of borrowings (1,800) (1,300)
Capital payments in respect of leases (185) (104)
Interest paid in respect of leases (29) (38)
Interest received 1 -
Interest paid (21) (71)
(949) 938
Net cash flows from financing activities
Net increase in cash and cash equivalents in the year 1,337 294
Foreign exchange adjustments 582 (100)
Cash and cash equivalents at beginning of year 1,713 1,519
3,632 1,713
Cash and cash equivalents at end of year
Notes to the consolidated preliminary financial information
1 Basis of preparation
The financial information set out herein does not constitute statutory
accounts as defined in Section 434 of the Companies Act 2006. The financial
information for the Year ended 30 June 2022 has been extracted from the
Group's audited financial statements which were approved by the Board of
Directors on 20 September 2022 and which, if adopted by the members at the
Annual General Meeting, will be delivered to the Registrar of Companies for
England and Wales.
The financial information for the Year ended 30 June 2021 has been extracted
from the Group's audited financial statements which were approved by the Board
of Directors on 21 September 2021 and which have been delivered to the
Registrar of Companies for England and Wales.
The reports of the auditor on both these financial statements were
unqualified, did not include any references to any matters to which the
auditors drew attention by way of emphasis without qualifying their report and
did not contain a statement under Section 498(2) or Section 498(3) of the
Companies Act 2006.
The information included in this preliminary announcement has been prepared on
a going concern basis under the historical cost convention, and in accordance
with International Accounting Standards in conformity with the requirements of
the Companies Act 2006 and the International Financial Reporting
Interpretations Committee (IFRIC) interpretations issued by the International
Accounting Standards Board ("IASB") that are effective as at the date of these
financial statements.
The Company is a public limited Company incorporated and domiciled in England
& Wales and whose shares are quoted on AIM, a market operated by The
London Stock Exchange.
2 Going concern
As part of their going concern review the Directors have followed the
guidelines published by the Financial Reporting Council entitled "Guidance on
the Going Concern Basis of Accounting and Reporting on Solvency and Liquidity
Risks- Guidance for directors of companies that do not apply the UK Corporate
Governance Code".
The Directors have prepared detailed financial forecasts and cash flows
looking beyond 12 months from the date of approval of these consolidated
financial statements. In developing these forecasts, the Directors have made
assumptions based upon their view of the current and future economic
conditions that will prevail over the forecast period. A number of forecasts
have been produced which take into consideration different assumptions on the
timing and extent of recovery from Covid-19, including the risk of debtor
default and the likely different recovery profiles of the different sectors in
which the Group's services are offered.
On the basis of the above projections, the Directors are confident that the
Group has sufficient working capital and available funds to honour all of its
obligations to creditors as and when they fall due. In reaching this
conclusion, the Directors have considered the forecast cash headroom,
including the impact of the extension of the revolving credit facility with
Silicon Valley Bank UK Ltd and the covenants associated with it, the resources
available to the Group and the potential impact of changes in forecast growth
and other assumptions, including the potential to avoid or defer certain costs
and to reduce discretionary spend as mitigating actions in the event of such
changes. Accordingly, the Directors continue to adopt the going concern basis
in preparing these consolidated financial statements.
3 Segmental analysis
The Group is organised into one principal operating division for management
purposes. Therefore, the Group has only one operating segment and segmental
information is not required to be disclosed. Revenue is analysed as follows:
2022 2021
£000 £000
Development and set up fees 7,645 5,887
Subscription and transaction fees 24,022 16,913
31,667 22,800
2022 2021
£000 £000
AIR revenue 29,497 20,164
Messaging revenue 2,170 2,636
31,667 22,800
Continuing revenues can be attributed to the following countries, based on the
customers' location:
2022 2021
£000 £000
United Kingdom 16,458 13,495
North America 12,518 7,857
Rest of Europe 63 116
Asia Pacific 2,628 1,332
31,667 22,800
4 Earnings per share
The calculation of basic earnings per share is based on the result
attributable to ordinary shareholders divided by the weighted average number
of ordinary shares in issue during the Year. The calculation of diluted
earnings per share is based on the result attributable to ordinary
shareholders divided by the weighted average number of shares in issue during
the year, diluted for the effect of options being converted to ordinary
shares. Basic and diluted earnings per share from continuing operations is
calculated as follows:
Earnings per Profit 2022 Loss per Loss 2021
share £000 Weighted average number of ordinary shares share £000 Weighted average number of ordinary shares
pence pence
Basic earnings/(loss) per share 2.12 554 26,136,009 (0.22) (57) 25,850,194
Diluted earnings/(loss) per share 1.86 554 29,829,550 (0.22) (57) 25,850,194
5 Alternative performance
measure
EBITDA is a key performance measure for the Group and is derived as follows:
2022 2021
£000 £000
Profit before taxation 685 126
Add back:
Finance income and expense 49 108
Share-based payments 1,851 877
Depreciation and amortisation 3,891 3,104
EBITDA 6,476 4,215
6 Net cash
Net cash is a key performance measure for the Group and is derived as follows:
30 June 2021 Cash flow Foreign exchange adjustments 30 June 2022
£000 £000 £000 £000
Cash and cash equivalents 1,713 1,338 581 3,632
Financial liabilities (900) 900 - -
581
Net cash/(debt) 813 2,238 3,632
7 Report and Accounts
A copy of the Annual Report and Accounts for the Year ended 30 June 2022 will
be sent to all shareholders in due course together with notice of the Annual
General Meeting.
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