REG - Eleco PLC - Interim Results
13/09/2022 07:00
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RNS Number : 1848Z Eleco PLC 13 September 2022
13 September 2022
Eleco Plc
("Eleco", "Group" or "the Company")
Interim Results for the Six Months Ended 30 June 2022
The Board of Eleco plc (AIM: ELCO), the AIM-listed international construction
software specialist, is pleased to announce its unaudited results for the six
months ended 30 June 2022.
Financial Highlights
· Recurring revenue up 9% to £8.2m (2021: £7.5m), showing delivery on
our SaaS transition
· Revenue of £13.4m (2021: £13.8m) and £13.8m at constant currency
· Adjusted EBITDA* of £2.8m (2021: £3.6m)
· Profit before tax of £1.7m (2021: £2.3m)
· Basic earnings per share of 1.6p (2021: 2.2p)
· Adjusted earnings per share** of 1.9p (2021: 2.6p)
· Cash generative with free cash flow*** of £2.1m (2021: £2.8m)
· Interim dividend of 0.20 pence (2021: 0.20 pence)
The Board remains confident in delivering in line with market expectations for
the full year
* Adjusted to exclude amortisation of intangible assets, depreciation charge
and former Directors' payments.
** Adjusted earnings per share represents adjusted profit after tax, divided
by a weighted average number of shares.
*** Free cash flow represents cash generated in operations less purchase of
intangible assets and property, plant and equipment, net of finance costs and
tax plus any proceeds from disposals of property, plant and equipment.
Operational Highlights
· Successfully commenced phase two of the Group's SaaS strategy, to
offer subscription licences to existing customers, thereby supporting customer
success initiatives
· Development of a new Permit to Work module for Eleco's scalable
maintenance and facilities software, ShireSystem, for release in H2 2022.
This will be a key component in assisting customers with managing safety and
compliance procedures
· Development of the Last Planner web solution which will allow on-site
and final stage planning for customers. We plan to release to market in 2023
· A leading UK construction and regeneration group, Morgan Sindall,
reported how they have been using Powerproject to drive productivity and
manage modular building techniques
· Project management specialists Treo chose Eleco's leading project
management tool, Powerproject, to manage scheduling in their South African
mining and mineral processing projects
· Furthered ESG initiatives by becoming Carbon Neutral
· Certified as a Great Place to Work® and implemented wellbeing and
personal development programmes for employees
· Winner of the Megabuyte Quoted 25 Award for Best Performing Software
Company in Industrials
Chairman, Serena Lang, said:
"Eleco delivered a positive performance in the first half of 2022, with growth
in subscription revenues, a key indicator in our transition to a SaaS
business. We operate in a very exciting market and are well positioned to meet
the growing demands of the built environment thanks to our planning and
productivity-driving best in class software.
Over the next six months, we will remain focused on growing our recurring
revenues. We are migrating all hosting to a single cloud provider, driving
connectivity across the Group, which will allow us to scale more effectively.
We continue to explore M&A opportunities that would support our growth
strategy.
Importantly, we remain well capitalised and I would like to thank our talented
team and valued customers for their support. We remain confident of meeting
market expectations for the full year to 31 December 2022."
Details of conference call for equity analysts
There will be a webinar / conference call for equity analysts at 11:30am UK on
Tuesday 13 September hosted by CEO Jonathan Hunter and Interim CFO Rose Clark.
Any equity analysts wishing to register should contact SEC Newgate
at eleco@secnewgate.co.uk where further details will be provided.
Details of webinar for investors
As a result of the bank holiday on Monday 19 September, Eleco announces that
Jonathan Hunter and Rose Clark will now provide a live presentation via the
Investor Meet Company platform on Tuesday 20 September 2022 at 9:00am UK.
The presentation is open to all existing and potential shareholders. Questions
can be submitted pre-event via your Investor Meet Company dashboard up until
9am the day before the meeting or at any time during the live presentation.
Investors can sign up to Investor Meet Company for free and add to meet Eleco
via:
https://www.investormeetcompany.com/eleco-public-limited-company/register-investor
(https://www.investormeetcompany.com/eleco-public-limited-company/register-investor)
Enquiries:
Eleco plc +44 (0)20 7422 8000
Jonathan Hunter, Chief Executive Officer
Rose Clark, Interim Chief Financial Officer
finnCap Limited +44 (0)20 7220 0500
Geoff Nash/ James Balicki (Corporate Finance)
Charlotte Sutcliffe / Harriet Ward (ECM)
SEC Newgate UK +44 (0)20 3757 6882
Elisabeth Cowell / Bob Huxford / Isabelle Smurfit eleco@secnewgate.co.uk
About Eleco Plc
Eleco plc is an AIM-listed (AIM:ELCO) specialist international provider of
software and related services to the built environment through its operating
brands Elecosoft and Veeuze from centres of excellence in the UK, Sweden,
Germany and the Netherlands. The Company's software solutions are trusted by
international customers and used throughout the building lifecycle from early
planning and design stages to construction, interior fit out, asset management
and facilities management to support project management, estimation,
visualisation, Building Information Modelling (BIM) and property management.
Chairman's Statement
I am pleased to report that during the first half of 2022, Eleco has once
again achieved a robust performance. During a period of significant
macro-economic and geo-political upheaval and increased pressure on overheads
and talent, the business has continued to deliver on its growth strategy.
Our strategy to focus on delivering best of breed products to core customer
segments within a selection of geographies and transitioning our business to
SaaS has generated recurring revenue growth of 9% to £8.2m compared with the
previous year (H1 2021: £7.5m). This means that recurring revenue now
accounts for approximately 61% of total revenue, up from 55%. Eleco was also
strongly cash generative, providing us with the resilience to navigate the
inflationary pressures affecting businesses around the world.
We have continued to invest in product development in line with our
customer-centric approach, having launched new versions of our core building
lifecycle products. We also released our Artificial Intelligence (AI) wall
tool in our visualisation business, and it is already being well received by
our paint manufacturing customers.
Delivering on our strategy for organic growth
Overall recurring revenue at constant currency increased by 11%, demonstrating
the positive progress we are making in the delivery of our strategy.
We previously stated that our total reported revenue growth will temporarily
soften during our SaaS transition and the financial performance during the
period is in line with our expectations. In moving to a SaaS model, we are
giving choice for our customers and enhanced Customer Lifetime Value as well
as underpinning visibility of income for our shareholders.
We have continued to strengthen our business, achieving new customer growth in
the UK, growth in the US and strong demand in the Swedish market, where we
secured our largest deal of the year so far. Existing customers continue to
expand their software usage and we are seeing more demand for hosted
solutions.
In line with our previously announced strategy to focus on our core customer
segments and businesses, we are holding our German ARCON architectural CAD
business, for sale. This will further streamline the business and the Board
believes that the customers, staff and product life can thrive within a
business with a common customer base and product type.
Due to geo-political factors and inflationary pressures, which have severely
impacted the timing of operational programmes for our customers, there has
been a slowdown in demand for services and sales of new licences across
Eleco's portfolio, especially in Germany where the economy has been hit more
severely by repercussions of the invasion of Ukraine. However, the Group is
successfully absorbing these pressures thanks to our strong cash balance, with
profits remaining in line with expectations.
Overall, we have continued to increase our customer numbers and monthly
recurring revenue, making progress in our goal to become a word-class
customer-centric organisation.
Board Update and Environmental, Social and Governance (ESG)
The first half of this year saw us strengthen our ESG disclosures. We formed
an ESG committee, chaired by Mark Castle, and set Key Performance Indicators
that we are measuring against in 2022. A key element of this is to consume
renewable energy across our business, building on the 25% of our energy which
currently comes from renewable energy suppliers. We are pleased to announce
that Eleco is now carbon neutral, having offset our 2021 carbon emissions and
we will continue to focus on sustainability and reducing our impact on the
environment. Additionally, we are also very focused on how we, as a software
player can help our customer base reduce their carbon footprint and the impact
the built environment has on sustainability.
Attraction and retention of talent continues to be a core focus in a tight
market, and we have continued to invest in our people throughout the period,
recognising that a strong, engaging culture is key to this. We are delighted
to have received the Great Place to Work® certification for our UK and
Swedish regions, which is an acknowledgement of the commitment we have made to
our people initiatives.
This is a great foundation to build upon as we continue to embrace our vision
of becoming an employer people want to work with and for. The wellbeing of our
people is a key pillar of our overall strategy and we have invested in an
Employee Assistance Programme and Employee Hub, as well as encouraging our
employees to spend time volunteering for a charitable cause.
Work continues on our policy framework, with updates to our Whistleblowing
Policy as well as the introduction of an Anti-Slavery and Human Trafficking
Policy during the first quarter. Matters of governance remain a key focus for
the Board as we build on the changes made to its composition in the prior
year, ensuring that Eleco is stewarded by a diverse mix of views and
experience.
Our Group Leadership Team was further strengthened through the appointment of
a Chief Technology Officer and I am delighted that in October we will welcome
Neil Pritchard onto the Board as Chief Financial Officer.
Dividend
Dividends paid in the six months to 30 June 2022 were 0.40 pence per ordinary
share (2021: 0.40 pence).
Having regard to the trading performance and cash generation in the period,
the Board has decided to declare a dividend of 0.20 pence (2021: 0.20 pence),
which would be covered 8 times by unaudited earnings for the period of 1.6
pence per share.
The interim dividend will be paid on 7 October 2022 to shareholders on the
register at the close of business on 23 September 2022 and the ex-dividend
date will be 22 September 2022.
Outlook
Eleco is operating in a very exciting market and is well positioned to meet
the growing demands of the built environment thanks to our planning and
productivity-driving software.
Over the next six months, we remain focused on growing our recurring revenues.
We are migrating all hosting to a single cloud provider, driving connectivity
across the Group and allowing us to scale more effectively.
Our people are important to the success of Eleco, and we will build on the
positive momentum we have already seen with our people initiatives. We will
continue to upskill, build career pathways and provide a working environment
that motivates, retains and attracts new talent in what is a competitive
environment.
Our strategy continues to focus on both organic recurring revenues and profit
growth, as well as exploring M&A opportunities that will support our
strategy.
Eleco delivered a positive performance in the first half of 2022, with growth
in subscription revenues. Importantly we were also able to strengthen our
financial position considerably and I would like to thank our talented team
and valued customers for their support. We are confident of meeting market
expectations for the full year to 31 December 2022.
Serena Lang
Chairman
12 September 2022
Condensed Consolidated Income Statement
for the financial period ended 30 June 2022
Six months to 30 June
Year ended
2022 2021 31 December
(unaudited) (unaudited) 2021
Notes £'000 £'000 £'000
Revenue 3, 4 13,435 13,831 27,344
Cost of sales (1,607) (1,318) (2,754)
Gross profit 11,828 12,513 24,590
Amortisation and impairment of intangible assets (744) (846) (2,361)
Former Directors' payments - (69) (69)
Other selling and administrative expenses (9,290) (9,232) (18,061)
Selling and administrative expenses (10,034) (10,147) (20,491)
Operating profit 4, 5 1,794 2,366 4,099
Finance cost 6 (61) (106) (173)
Profit before tax 1,733 2,260 3,926
Tax (394) (463) (1,195)
Profit for the financial period 1,339 1,797 2,731
Attributable to: 2,731
Equity holders of the parent 1,797
1,339
Earnings per share (pence per share)
Basic earnings per share 7 2.2p 3.3p
1.6p
Diluted earnings per share 7 1.6p 2.2p 3.3p
Condensed Consolidated Statement of Comprehensive Income
for the financial period ended 30 June 2022
Six months to 30 June
2022 2021 Year ended
(unaudited) (unaudited) 31 December
£'000 £'000 2021
£'000
Profit for the period 1,339 1,797 2,731
Other comprehensive income:
Items that will be reclassified subsequently to profit or loss:
Translation differences on foreign operations (107) (258)
(115)
Other comprehensive (loss) net of tax (115) (107) (258)
Total comprehensive income for the period 1,224 1,690 2,473
Attributable to: 2,473
Equity holders of the parent 1,690
1,224
Condensed Consolidated Statement of Changes in Equity
for the financial period ended 30 June 2022
Share Share Merger Translation Other Retained
capital premium reserve reserve reserve earnings Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2022 832 2,406 1,002 (279) (5) 19,890 23,846
Dividends (329) (329)
Share-based payments - - - - 69 - 69
Elimination of exercised share based payments - - - - (69) 69 -
Issue of share capital - - - - - - -
Transactions with owners - - - - - (260) (260)
Profit for the period 1,339 1,339
Other comprehensive income:
Exchange differences on translation of net investments in foreign operations
- - - (115) - - (115)
Total comprehensive income for the period - - - (115) - 1,339 1,224
At 30 June 2022 (unaudited) 832 2,406 1,002 (394) (5) 20,969 24,810
Share Share Merger Translation Other Retained
capital premium reserve reserve reserve earnings Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2021 825 2,182 1,002 (8) (2) 17,525 21,524
Dividends - - - - - (329) (329)
Share-based payments - - - - 40 - 40
Elimination of exercised share based payments - - - - (66) 66 -
Issue of share capital 6 218 - - - - 224
Transactions with owners 6 218 - - (26) (263) (65)
Profit for the period - - - - - 1,797 1,797
Other comprehensive income:
Exchange differences on translation of net investments in foreign operations
- - - (107) - (1) (108)
Total comprehensive income for the period - - - (107) - 1,796 1,689
At 30 June 2021 (unaudited) 831 2,400 1,002 (115) (28) 19,058 23,148
Share Share Merger Translation Other Retained
capital premium reserve reserve reserve earnings Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2021 825 2,182 1,002 (8) (2) 17,525 21,524
Dividends - - - - - (493) (493)
Share-based payments 81 - 81
Elimination of exercised share based payments (83) 83 -
Issue of share capital 7 253 - - - - 260
Transactions with owners 7 253 - - (2) (410) (152)
Profit for the period - - - - - 2,731 2,731
Other comprehensive income: --
Exchange differences on translation of net investments in foreign operations (270) - 12 (258)
Comprehensive income for the period - (29) - (1) (1) 32 1
Total comprehensive income for the period - (29) - (271) (1) 2,775 2,474
At 31 December 2021 832 2,406 1,002 (279) (5) 19.890 23,846
Condensed Consolidated Balance Sheet
at 30 June 2022
30 June
2022 2021 31 December
Notes (unaudited) (unaudited) 2021
£'000 £'000 £'000
Non-current assets
Goodwill 15,247 15,729
15,593
Other intangible assets 9 6,713 7,140 6,554
Property, plant and equipment 728 595 717
Right-of-Use assets 1,436 1,867 1,728
Deferred tax assets 85 85 65
Total non-current assets 24,209 25,416 24,657
Current assets
Inventories 26 8 16
Trade and other receivables 3,746 3,491 4,277
Current tax assets 305 100 216
Assets of disposal group held for sale 10 842 - -
Cash and cash equivalents 10,926 12,163 10,055
Total current assets 15,845 15,762 14,564
Total assets 40,054 41,178 39,221
Current liabilities
Borrowings 11 - (1,645) (45)
Lease liabilities (402) (484) (471)
Trade and other payables (1,748) (1,446) (1,793)
Provisions - (125) (10)
Current tax liabilities - (123) -
Liabilities of disposal group held for sale 12 (184) - -
Accruals and deferred income 13 (9,831) (9,116) (9,689)
Total current liabilities (12,165) (12,939) (12,008)
Non-current liabilities
Borrowings 11 - (2,048) (56)
Lease liabilities (1,216) (1,595) (1,464)
Deferred tax liabilities (1,837) (1,407) (1,806)
Non-current provisions (26) (41) (41)
Total non-current liabilities (3,079) (5,091) (3,367)
Total liabilities (15,244) (18,030) (15,375)
Net assets 24,810 23,148 23,846
Equity
Share capital 832 831 832
Share premium account 2,406 2,400 2,406
Merger reserve 1,002 1,002 1,002
Translation reserve (394) (115) (279)
Other reserve (5) (28) (5)
Retained earnings 20,969 19,058 19,890
Equity attributable to shareholders of the parent 24,810 23,148 23,846
Condensed Consolidated Statement of Cash Flows
for the financial period ended 30 June 2022
Six months to 30 June
Year ended
2022 2021 31 December
(unaudited) (unaudited) 2021
£'000 £'000 £'000
Note
Cash flows from operating activities
Profit before 2,260 3,926
tax
1,733
Net finance costs 61 106 173
Depreciation charge 271 368 722
Amortisation charge 744 846 2,361
(Profit)/Loss on sale of property, plant and equipment (6) 3 (7)
Share-based payment charge 69 40 81
Decrease in provisions (25) - (115)
Cash generated in operations before working capital movements 2,847 3,623 7,141
Decrease/(Increase) in trade and other receivables 498 421 (366)
Increase/(Decrease) in inventories and work in progress (10) 14 7
Increase in trade and other payables and accruals and deferred income 206 21 942
Cash generated in operations 3,541 4,079 7,724
Interest received/ (paid) 38 (57) (124)
Net income tax paid (470) (360) (903)
Net cash inflow from operating activities 3,109 3,662 6,697
Investing activities (902) (1,727)
Purchase of intangible (795)
assets
Purchase of property, plant and equipment (134) (60) (279)
Proceeds from sale of property, plant, equipment and intangible assets 15 48 60
Net cash outflow from investing activities (1,021) (807) (1,946)
Financing activities (101) (4,447)
Repayment of bank loans (823)
Repayments of leasing liabilities (265) (355) (650)
Issue of share capital - 224 260
Equity dividends paid (329) (329) (493)
Net cash (outflow) from financing activities (695) (1,283) (5,330)
Net increase/(decrease) in cash and cash equivalents 1,393 1,572 (579)
10,668
Cash and cash equivalents at beginning of period 10,668
10,055
Effects of changes in foreign exchange rates (110) (77) (34)
Cash and cash equivalents at end of period 11,338 12,163 10,055
Cash and cash equivalents comprise: 10,926 10,055
Cash and short term deposits 412 12,163 -
Cash held for Sale -
10
11,338 12,163 10,055
Notes to the Condensed Consolidated Interim Financial Information
1. General information
The Company is a public limited company incorporated and domiciled in the UK.
The address of its registered office is 6 Bevis Marks, London, EC3A 7BA.
The Company is listed on the Alternative Investment Market ("AIM").
The condensed consolidated interim financial information does not constitute
statutory accounts as defined in section 434 of the Companies Act 2006. The
Group's consolidated financial statements for the year ended 31 December 2021
have been filed at Companies House. The audit report was not qualified and did
not contain a reference to any matter to which the auditor drew attention by
way of emphasis and did not contain a statement under section 498(2) or
section 498(3) of the Companies Act 2006.
2. Basis of preparation
The condensed consolidated interim financial statements for the six months to
30 June 2022 have been prepared in accordance with the accounting policies
which will be applied in the twelve months financial statements to 31 December
2022. These accounting policies will be drawn up in accordance with Applicable
law and UK-adopted International Accounting Standards (UK-IAS) that are
effective at 31 December 2022.
The condensed consolidated interim financial statements are unaudited. They do
not include all the information and disclosures required in the annual
financial statements or for full compliance with UK-IAS, and therefore should
be read in conjunction with the Group's published financial statements for the
year ended 31 December 2021. The comparative figures for the year ended 31
December 2021 are not the Company's statutory accounts for that period but
have been extracted from these accounts.
The Directors, having considered the Group's current financial resources, have
concluded that they are adequate for the Group's present requirements.
Therefore, the condensed consolidated interim financial information has been
prepared on the going concern basis.
The impending sale of a subsidiary company operating a niche product which is
no longer core to Eleco's strategy meets the criteria for classification in
accordance with IFRS 5. The assets of the company have been presented as a
disposal group held for sale and the associated liabilities have been
presented separately on the face of the statement of financial position.
Estimates
Application of the Group's accounting policies in preparing condensed
consolidated interim financial statements requires management to make
judgements and estimates that affect the reported amount of assets and
liabilities, revenues and expenses. Actual results may ultimately differ from
these estimates.
In preparing these condensed consolidated interim financial statements, the
significant judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were the same as those
that applied to the consolidated financial statements for the year ended 31
December 2021.
Risks and uncertainties
A summary of the Group's principal risks and uncertainties was set out on
pages 16 to 19 of the 2021 Annual Report and Accounts. The Board considers
these risks and uncertainties are still relevant to the current financial year
and the impact of changes in the UK economy is reviewed in the Chairman's
statement contained in this report.
The Interim Report was approved by the Directors on 12 September 2022.
3. Revenue
Revenue disclosed in the income statement is analysed as follows:
Six months to 30 June
2022 2021 Year to 31 December 2021
£'000 £'000 £'000
Licence sales 2,247 3,253 5,913
Recurring revenue 8,204 7,543 15,424
Services income 2,984 3,035 6,007
13,435 13,831 27,344
Revenue is recognised for each category as follows:
• Licence sales - recognised at the point of transfer (delivery) of the
licence to a customer.
• Recurring revenue : SaaS, maintenance, support and subscriptions - as
these services are provided over the term of the contract, revenue is
recognised over the life of the contract.
• Services - recognised on delivery of the service.
4. Segmental information
Operating segments
IFRS 8 requires operating segments to be identified on the basis of internal
reports about components of the Group that are regularly reviewed by the chief
operating decision maker to allocate resources to the segments and to assess
their performance.
The chief operating decision maker has been identified as the Executive
Directors. The Group revenue is derived entirely from the sale of software
licences, software maintenance and support and related services. Consequently,
the Executive Directors review the three revenue streams, but as the costs are
not recorded in the same way, the information is presented as one segment and
as such the information is presented in line with management information.
Six months to 30 June
2022 2021 Year ended 31 December 2021
£'000 £'000 £'000
Revenue 13,435 13,831 27,344
7,251
Adjusted EBITDA 2,809, 3,649
Amortisation and impairment of purchased intangible assets (494) (551) (1,786)
Depreciation (271) (368) (722)
Adjusted operating profit 2,044 2,730 4,743
Amortisation of acquired intangible assets (250) (295) (575)
Former Directors' payments - (69) (69)
Operating profit 1,794 2,366 4,099
Net finance cost (61) (106) (173)
Segment profit before tax 1,733 2,260 3,926
Tax (394) (463) (1,195)
Segment profit after tax 1,339 1,797 2,731
Operating profit 1,794 2,366 4,099
Amortisation of intangible assets 744 846 2,361
Depreciation charge 271 368 722
Former Directors' payments - 69 69
Adjusted EBITDA 2,809 3,649 7,251
Geographical, product and sales channel information
Revenue by geographical segment represents revenue from external customers
based upon the geographical location of the customer.
Six months to 30 June
2022 2021 Year ended 31 December 2021
£'000 £'000 £'000
UK 5,276 5,236 10,446
Scandinavia 3,354 3,311 6,550
Germany 2,180 2,457 4,911
USA 594 488 1,030
Rest of Europe 1,742 2,082 3,916
Rest of World 289 257 491
13,435 13,831 27,344
Revenue by product group represents revenue from external customers.
Six months to 30 June
2022 2021 Year ended 31 December 2021
£'000 £'000 £'000
Revenue from software & related services:
Building Lifecycle 8,883 8,871 17,650
CAD & Visualisation 3,638 4,119 7,997
Other - third party software 914 841 1,697
13,435 13,831 27,344
The Group utilises resellers to access certain markets. Revenue by sales
channel represents revenue from external customers.
Six months to 30 June
2022 2021 Year ended 31 December 2021
£'000 £'000 £'000
Direct 12,749 13,117 26,068
Reseller 686 714 1,276
13,435 13,831 27,344
5. Operating profit
Operating profit for the period is after charging the following
items:
Six months to 30 June
2022 2021 Year ended 31 December 2021
£'000 £'000 £'000
Software product development expense 887 838 1,660
Depreciation of property, plant and equipment 98 112 213
Depreciation of Right-of-Use assets 173 256 509
Amortisation of acquired intangible assets 250 295 575
Amortisation of other intangible assets 494 551 1,150
Impairment of other intangible assets - - 636
Share based payments 69 40 81
Employer furlough scheme repayments - 135 135
(Profit)/Loss on disposal of property, plant and equipment (6) 3 (7)
Foreign exchange losses 10 29 127
Former Director's payments - 69 69
6. Net finance cost
Finance income and costs disclosed in the income statement is set out below:
Six months to 30 June
2022 2021 Year ended 31 December 2021
£'000 £'000 £'000
Finance costs: (110)
Bank overdraft and loan interest (1) (73)
Interest expense for leasing arrangements (60) (33) (63)
Total net finance cost (61) (106) (173)
7. Earnings per share
The calculations of the earnings per share are based on profit after tax
attributable to the ordinary equity shareholders of the Company and the
weighted average number of shares in issue for the reporting period.
Six months to 30 June
2022 2021 Year to 31 December 2021
Profit Weighted Profit Weighted Profit Weighted
attributable average attributable average attributable average
to number of to number of to number of
shareholders shares EPS shareholders shares EPS shareholders shares EPS
(£'000) (millions) (p) (£'000) (millions) (p) (£'000) (millions) (p)
Basic earnings per share 1,339 82.2 1.6 1,797 82.0 2.2 2,731 82.0 3.3
Diluted earnings per share 1,339 82.7 1.6 1,797 82.8 2.2 2,731 82.9 3.3
Adjusted earnings per share 3,253 82.0 4.0
1,541 82.2 1.9 2,092 82.0 2.6
Shares held by the Employee Share Ownership Trust are excluded from the
weighted average number of shares in the period. Adjusted profit attributable
to shareholders is reconciled to reported profit attributable to shareholders
in note 15.
8. Dividends
Dividends paid in the six months to 30 June 2022 were 0.40 pence per ordinary
share (2021: 0.40 pence per ordinary share).
Cash dividends of £329,000 (2021: £329,000) were paid in the six months to
30 June 2022 as follows:
Six months to 30 June Year to 31 December
2022 2022 2021 2021 2021 2021
Ordinary Shares per share £'000 per share £'000 per share £'000
Declared and paid during the year
Interim - current year - - 0.20 164 0.20 164
Final - previous year 0.40 329 0.40 329 0.40 329
0.40 329 0.60 493 0.60 493
The Directors have recommended an interim dividend of 0.20 pence per ordinary
share (2021: 0.20 pence per ordinary share).
9. Other intangible assets
Other intangible assets comprise capitalised development costs, acquired
customer relationships and purchased intangible assets. Additions in the six
months to 30 June 2022 represent purchased intangible assets of £164,000
(2021 half year: £5,000) and internal development costs capitalised of
£738,000 (2021 half year: £790,000). Internal development relates to
software development projects that meet the accounting policy criteria for
capitalisation.
10. Assets of disposal group held for sale
In line with our previously announced strategy to focus on our core customer
segments and businesses, we are holding our German ARCON architectural CAD
business, for sale. IFRS 5 disclosure treatment is adopted here.
The table below reflects assets held for sale measured at the lower of
carrying amount and fair value less costs to sell in the statement of
financial position.
Assets Held for Sale Six months to 30 June Year Ended
2022 2021 31 December
(unaudited) (unaudited) 2021
£'000 £'000 £'000
Goodwill 336 - -
Other intangible assets 1 - -
Property, plant and equipment 9 - -
Right-of-Use assets 74 - -
Trade and other receivables 10 - -
Cash and cash equivalents 412 - -
Total Assets Held for sale 842 - -
11. Cash and borrowings
The net cash position of the Group as at 30 June 2022 is set out below:
At 30 June At
31 December
2022 2021 2021
£'000 £'000 £'000
Cash and cash equivalents 11,338 12,163 10,055
Bank loans - (3,693) (101)
Lease liabilities (1,693) (2,079) (1,935)
9,645 6,391 8,019
Maturity profile of borrowings
In one year or less - (1,645) (45)
Between one and two years - (1,645) (56)
Between two and five years - (403) -
- (3,693) (101)
The UK banking facilities are with Barclays Bank plc and the Group
facilities comprise a £1.0m overdraft facility, carrying an interest rate of
2.75 percent over base rate (undrawn at 30 June 2022, 31 December 2021 and 30
June 2021).
12. Liabilities of disposal group held for sale
Liabilities classified as Held for sale on the face of the Statement of
Financial Position are as follows:
Liabilities Held for Sale Six months to 30 June Year Ended
2022 2021 31 December
(unaudited) (unaudited) 2021
£'000 £'000 £'000
Lease liabilities (76) - -
Trade and other payables (53) - -
Accruals and deferred income (55) - -
Total Liabilities held for sale (184) - -
13. Accruals and deferred income
At 30 June At 31 December
2022 2021 2021
£'000 £'000 £'000
Accruals 2,570 2,255 2,603
Deferred income 7,261 6,861 7.086
9,831 9,116 9,689
Deferred income represents income from the sale of software subscription
licenses and from software maintenance and support contracts and is taken to
revenue in the income statement on a straight-line basis in line with the
service and obligations over the term of the contract.
14. Related party disclosures
Transactions between Group undertakings, which are related parties, have been
eliminated on consolidation and are not disclosed in this note.
The Directors of the Company had no material transactions with the Company
during the period, other than a result of service agreements.
15. Additional performance measures
The Group uses adjusted figures, which are not defined by generally accepted
accounting principles ("GAAP") such as UK-IAS. Adjusted figures and underlying
growth rates are presented as additional performance measures used by
management, as they provide relevant information in assessing the Group's
performance, position and cash flows. We believe that these measures enable
investors to track more clearly the core operational performance of the Group,
by separating out items of income or expenditure relating to acquisitions,
disposals and capital items. Our management uses these financial measures,
along with UK-IAS financial measures, in evaluating the operating performance
of the Group.
Six months to 30 June
2022 2021 Year ended 31 December 2021
£'000 £'000 £'000
Operating profit 1,794 2,366 4,099
Former Directors' payments - 69 69
Amortisation of acquired intangible assets 250 295 575
Adjusted operating profit 2,044 2,730 4,743
Profit before tax 2,260 3,926
1,733
Former Directors' payments - 69 69
Amortisation of acquired intangible assets 250 295 575
Adjusted profit before tax 1,983 2,624 4,570
Tax charge (394) (463) (1,195)
Former Directors' payments - (13) (13)
Amortisation of acquired intangible assets (48) (56) (109)
Adjusted tax charge (442) (532) (1,317)
Profit after tax 1,339 1,797 2,731
Former Directors' payments - 56 56
Amortisation of acquired intangible assets 202 239 466
Adjusted profit after tax 1,541 2,092 3,253
7,724
Cash generated in operations 3,541 4,079
Purchase of intangible assets (902) (795) (1,727)
Purchase of property, plant and equipment (134) (60) (279)
Former Directors' payments - 69 69
Adjusted operating cash flow 2,505 3,293 5,787
Six months to 30 June
2022 2021 Year ended 31 December 2021
£'000 £'000 £'000
Adjusted operating cash flow 2,505 3,293 5,787
Net interest received/(paid) 38 (57) (124)
Tax paid (470) (360) (903)
Proceeds from disposal of PPE 15 48 60
Former Directors' payments - (69) (69)
Free cashflow 2,088 2,855 4,751
16. Exchange rates
The following exchange rates have been applied in preparing the condensed
consolidated financial statements:
Income statement Balance sheet
Six months to 30 June As at 30 June Year to 31 December 2021
Income Balance
2022 2021 2022 2021 Statement sheet
Swedish Krona to Sterling 12.41 11.68 12.45 11.82 11.80 12.23
Euro to Sterling 1.19 1.15 1.16 1.17 1.16 1.19
US Dollar to Sterling 1.30 1.39 1.22 1.38 1.37 1.35
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