REG - Glantus Holdings PLC - Interim Results
28/09/2022 07:00
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RNS Number : 9177A Glantus Holdings PLC 28 September 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
THE MARKET ABUSE REGULATION (EU) 596/2014 WHICH IS PART OF UK LAW BY VIRTUE OF
THE EUROPEAN UNION (WITHDRAWAL) ACT 2018.
Glantus (AIM: GLAN), a certified provider of software as a service ("SaaS")
solution, capturing data for automation, visualisation and advanced analytics
to the Accounts Payable ("AP") function is pleased to announce its interim
results for the six months to 30 June 2022 ("H1 2022").
· Highlights
o Revenue of €6.6m up by 54% (H1 2021: €4.3m) as a result of the
combined effect of the acquiring additional customer bases, and both cross
selling and upselling to existing clients
o Recurring revenue of €6.4m up by 70% (H1 2021: €3.8m) and Gross
Profit of €4.8m up by 40% (H1 2021: €3.4m)
o Adjusted EBITDA of €0.7m down by 39% (H1 2021: €1.2m) reflecting
acquisition related integration costs and a full period of plc costs
o Continued to migrate and consolidate all clients onto the one Glantus
platform
o Improved margins of acquisitions through adopting the Glantus technology
suite
o Focused on product enhancements and functionality to deliver improved
tools to our clients to automate and analyse their AP function and improve
their accounts payable function
o Aligned our operational infrastructure to support our global business and
drive scale
o Made the strategic decision during the period to commence the relocation
of the AP audit function of the business to a global shared services centre in
Costa Rica. The ongoing relocation of the AP audit function of the business to
Costa Rica is expected to deliver more productive and technology-led automated
audits
o The Costa Rica relocation has resulted in associated set up costs being
incurred in the period and further restructuring and relocation costs will be
incurred in H2 2022 as the transition is implemented
· Other Post-Period End Highlights
o Investments in revamped product naming and marketing to promote the breath
of offering and additional modules to improve the Go to Market strategy
o Beta Testing of technology platform for new buyer led Supply Chain Finance
product in planning
o As announced on 22 July 2022, the Company refinanced with Beach Point
Capital at an improved rate and an additional €2m additional working capital
facility
· Outlook
o Glantus expects continued revenue growth through 2022, however, the
relocation to Costa Rica has meant delays to the start of a number of audit
mandates which will directly impact the timing of some transactional revenues
which were anticipated in the second half of 2022
o Also, the Company anticipates that it will incur additional operational
expenses in H2 2022 due to restructuring, refinancing and one time redundancy
costs associated with the Costa Rica relocation
o Accordingly, as a result of the above, and a weaker outlook for the full
year due to current global macroeconomic challenges, the Board now expects
revenue and EBITDA to be significantly below market expectations for the full
year
o In order to ensure that the Company is in a financial position to continue
with its growth and restructuring initiatives and given it expects significant
client payments to be received by the end of the financial year, it is in
advanced negotiations regarding a €1.5m short-term working capital facility
with its current lender Beach Point Capital. Beach Point Capital continues
to be very supportive of the company and its strategy
o The Board is confident the relocation and restructuring costs being
incurred will provide a robust global infrastructure fit for future growth,
scale and improved productivity in 2023
o In addition, the Company expects to announce a new geographic expansion in
due course and is working on being in a position to announce a financing
partner for the Supply Chain Finance Product in preparation for launch in 2023
o Looking further ahead, the Board remains confident in the Group's strategy
and in its medium-term growth prospects, underpinned by the Group's compelling
product offering and current investment in growth initiatives
Maurice Healy, CEO, commented:
"H1 of 2022 has been a very productive period for Glantus with our company
profile, brand recognition and product offering making clear headway as we
seek to become one of the dominant players in the AP SaaS marketplace.
With our improved product suite and functionality, expanded client base, and a
focus on operational efficiency, we are primed for the next phase. Combining
these attributes with our investment into a global shared services centre and
the new product offerings heralds a strong future for our Company.
We have taken the strategic decision to execute the AP audit function
relocation to Costa Rica to deliver more productive and technology-led
automated audits. Whilst the relocation has been more challenging than
anticipated it will be more productive for the Company in the long term and we
expect it to improve profitability going forward.
We are also conscious of the current macroeconomic conditions which are
increasingly challenging, but the Board remains confident in the Group's
strategy and in its medium-term growth prospects, underpinned by the Group's
compelling product offering and current investment in growth initiatives."
A copy of these interim financial statements will be made available on the
investor section of the Company's website at www.glantus
(http://www.glantus) .com
Company Contacts
Glantus Holdings
Plc
Maurice Healy, Chief Executive Officer +353 87 9452047
Grainne McKeown, Chief Financial Officer ir@glantus.com (mailto:ir@glantus.com)
Diane Gray-Smith, Executive Director
Shore Captial +44 207 408 4090
(Nominated Advisor and Broker)
Patrick Castle / John More / Tom Knibbs (Corporate Advisory
Andrew Beswick (Corporate Broking)
Yellow Jersey PR
Charles Goodwin +44 7747 788 221
Lilian Filips
Annabelle Wills
Share listing
Listed on AIM
TIDM GLAN
ISIN IE00BNG2V304
Chief Executive Officer's Review
Executive Summary
I am pleased to report our results for the six-month period 1 Jan 2022 to 30
June 2022.
Demand continues to grow for Accounts Payable solutions. As a leading provider
of SaaS solutions that help global
corporations analyse, automate and digitise their Accounts Payable
function to expose and recover lost working capital, Glantus is capitalising
on this demand.
The Company delivered a pleasing performance in H1 and in line with its
ambitious growth plans, with revenue growing by 54% to €6.6m and reoccurring
income up 70%. However along with the positives and the benefits to come
from the restructuring of operations which have been more challenging than
anticipated, our outlook for full year 2022 has become more cautious.
2022 will be a year when we get the infrastructure in place to make our
Company robust and well-positioned to scale.
We have some great Tailwinds
· Strong revenue growth of 54% and recurring income up by
70%. This is driven by two successful acquisitions and ongoing organic
growth.
· Investments of €771k in product development pave the way to
sustainable growth and a broader product suite Glantus is continually
investing in our technology and product suite to ensure we stand out in the AP
marketplace
· Glantus reputation is growing as a leading vendor in the Accounts
Payable and Spend Analysis space ranking 7(th) out of 62 in the G2 recent
research paper.
The Headwinds we are experiencing in 2022
· The Macro environment with economic, inflationary pressures and
currency risk is continually under scrutiny by the Executive leadership team
and has resulted in a more cautious view of the reminder of 2022.
· Revenue growth for the full year is lower than previously
anticipated, the relocation to Costa Rica has meant delays to the start of a
number of audit mandates which will directly impact the timing of some
transactional revenues which were anticipated in the second half of 2022.
We continue to focus on our strategic priorities: product development and
expanding globally to drive revenue growth and profitability.
Enhancing our existing product suite
o We have consolidated the branding of our product portfolio of 4 products
to form a simplified offering
o During the second quarter, we continued to build upon our cohesive suite
of products across channels
Expanding Globally
o We improved product and client relationships in several of our newest
markets during the second quarter by launching a newly reorganised sales
organisation
Financial Review
Revenues
Total revenue increased by 54% to €6.6m (H1 2021: €4.3m) with growth in
recurring revenue.
Six months to 30 June Six months to 30 June Year ended 31 December
2022 2021 2021
€ '000 € '000 € '000
Recurring Revenue 6,367 3,776 9,050
Non-recurring revenue 190 486 1,473
Reported revenue 6,557 4,262 10,523
Recurring revenue is the revenue that annually repeats either under
contractual subscription or predictable transactional billing. Subscription
revenue of €2.5m is continuing to grow demonstrating a sustainable growth
trend underpinning future revenue forecasts. Total subscription contracted
value is €5.0m (H1 2021: €4.9m). Subscription churn remains low at 3%
(H1 2021: 4%).
Gross Profit
Gross profit increased by 40% to €4.8m (H1 2021: €3.4m) which reflects the
integration of the 2 new acquisitions of Technology Insight Corporation and
Meridian Cost Benefit acquired in H2 2021.
Adjusted EBITDA
Management has presented the performance measure 'adjusted EBITDA' as it
monitors this performance measure at a consolidated level, and the Board
considers that this metric provides the best measure of assessing underlying
trading performances.
Adjusted EBITDA is calculated by adjusting profit before taxation to exclude
impact of net finance costs, depreciation, amortisation, share based payment
charges and exceptional items.
Six months to 30 June Six months to 30 June Year ended 31 December
2022 2021 2021
€ '000 € '000 € '000
Operating loss (919) (1,111) (1,296)
Amortisation 1,099 318 1,229
Depreciation 63 100 198
Exceptional items 449 1,883 2,948
Share based payments 32 - 24
Adjusted EBITDA 724 1,190 3,103
Adjusted EBITDA % of revenue 11.0% 27.9% 29.5%
Adjusted EBITDA decreased by 39% to €0.7m (H1 2021: €1.2m) resulting from
increased salary costs, investment, full period of plc costs, marketing
initiatives, acquisition costs and FX movements.
The exceptional items include restructuring costs (see Note 5).
Earnings per Share
Basic earnings per share is calculated by dividing the net loss for the year
attributable to ordinary shareholders by the weighted average number of
ordinary shares outstanding during the year.
Six months to 30 June Six months to 30 June Year ended 31 December
2022 2021 2021
Adjusted Earnings 724 1,190 3,103
Number Number Number
'000 '000 '000
Weighted average number of ordinary shares 37,833 29,038 33,168
Cent Cent Cent
Adjusted Basic EPS 1.91 4.10 9.36
Net Debt
As at the 30 June 2022, the Net debt position of the company was €12.27m and
cash was €391k. This further increased post 30 June 2022 by an additional
€2m working capital facility as announced on 22 July 2022. As explained
earlier in the statement, the Group is in advanced negotiations regarding a
further €1.5m short term working capital facility which would be expected to
be repaid in in short order from cash generated from trading.
Conclusion
The Group is experiencing a number of headwinds currently as set out above,
accordingly, the Group expects full year revenue and EBITDA to be
significantly below market expectations.
Despite this, with an expanding customer base, a growing acquisition pipeline
and market-ready products, management views the longer-term outlook for
Glantus with increased optimism and excitement despite the immediate
short-term and macro headwinds.
Maurice Healy
Chief Executive Officer
27 September 2022
Financial Report
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six months to 30 June Six months to 30 June Year ended 31 December
2022 2021 2021
Unaudited Unaudited Audited
Note € '000 € '000 € '000
Revenue 3 6,557 4,262 10,523
Cost of sales (1,784) (850) (2,178)
Gross profit 4,773 3,412 8,345
Administrative expenses (4,051) (2,222) (5,458)
Exceptional Items 5 (449) (1,883) (2,948)
Share Based Payments (33) - (24)
Amortisation (1,099) (318) (1,229)
Depreciation (63) (100) (198)
Other income 3 - 217
Operating loss (919) (1,111) (1,296)
Finance costs (631) (345) (967)
Loss on ordinary activities before taxation (1,550) (1,456) (2,263)
Income tax 1 7 (22)
Loss for the financial period (1,549) (1,449) (2,285)
Other comprehensive income for the period 47 - 126
Total comprehensive loss for the period attributable to the owners of the (1,502) (1,449) (2,159)
group
Loss per share - basic and diluted (cent) 6 (4.09) (4.99) (6.89)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
30 June 30 June 31 December
2022 2021 2021
Unaudited Unaudited Audited
Note € '000 € '000 € '000
ASSETS
NON-CURRENT ASSETS
Intangible assets 17,181 7,354 17,509
Property, plant and equipment 220 251 240
17,401 7,605 17,749
CURRENT ASSETS
Trade and other receivables 7,864 4,313 6,751
Cash and cash equivalents 391 8,764 2,353
8,255 13,077 9,104
TOTAL ASSETS 25,656 20,682 26,853
EQUITY AND LIABILITIES
EQUITY
Called up share capital presented as equity 7 38 36 38
Share premium 12,083 10,629 12,083
Reorganisation reserve 656 656 656
Foreign exchange reserve 3 (103) (44)
Share option reserve 147 91 115
Retained earnings (4,340) (1,930) (2,791)
TOTAL EQUITY 8,587 9,379 10,057
CURRENT LIABILITIES
Trade and other payables 9,138 5,497 6,268
NON-CURRENT LIABILITIES
Long term liabilities 7,931 5,806 10,528
TOTAL LIABILITIES 17,069 11,303 16,796
TOTAL LIABILITIES AND EQUITY 25,656 20,682 26,853
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Called up share capital presented as equity Share Premium account Reorganisation Reserve Foreign exchange reserves arising on translation Share Option reserve Retained earnings Total
Note € '000 € '000 € '000 € '000 € '000 € '000 € '000
At 1 January 2021 1 1,000 656 (170) 91 (1,481) 97
Reorgansiation for AIM 25 (1,000) 1,000 25
Listing
7
Issue of 10 10,629 10,639
shares
7
Total comprehensive loss for the Year 67 (1,449) (1,382)
At 30 June 2021 36 10,629 656 (103) 91 (1,930) 9,379
At 1 July 2021 36 10,629 656 (103) 91 (1,930) 9,379
Share based payment charge 24 24
Reorgansiation for AIM (25) (25)
Listing
7
Issue of 2 1,454 1,456
shares
7
Total comprehensive loss for the Year 59 (836) (777)
At 31 December 2021 38 12,083 656 (44) 115 (2,791) 10,057
At 1 January 2022 38 12,083 656 (44) 115 (2,791) 10,057
Share based payment charge 32 32
Total comprehensive loss for the period 47 (1,549) (1,502)
At 30 June 2022 38 12,083 656 3 147 (4,340) 8,587
CONSOLIDATED STATEMENT OF CASHFLOWS
Six months to 30 June Six months to 30 June Year ended 31 December
2022 2021 2021
Unaudited Unaudited Audited
€ '000 € '000 € '000
Cash flows from operating activities
Group loss after tax (1,549) (1,449) (2,285)
Adjusted for:
Interest payable 631 345 967
R&D tax credit income - - (71)
Income tax expense (1) (7) 22
Depreciation 63 100 198
Amortisation 1,099 318 1,229
Movement in trade and other receivables (1,180) (870) (2,339)
Movement in trade and other payables 274 1,545 1,795
Loss on disposal of tangible assets 5 - 17
Net tax received 0 - (4)
R&D refund received 0 - (71)
Share-based payment expense 32 - 24
Effects of movement in exchange rates 47 67 126
Net cash flows (used in)/generated from operating activities (579) 49 (392)
Cash flows from investing activities
Purchase of property, plant and equipment (48) (65) (38)
Payment for acquisition of subsidiaries, net of cash acquired - - (6,853)
Payment of deferred consideration - (1,185) (2,363)
Payment for software development asset (771) (422) (1,189)
Net cash (used in) investing activities (819) (1,672) (10,443)
Cash flow from financing activities
Loans received 67 60 4,537
Interest payable (631) (345) (967)
IPO - Exceptional Costs - (1,883) (2,948)
Equity (Proceeds from issue of shares) - 11,601 11,613
Equity (IPO costs against Share premium) - (937) (938)
Net cash (used in)/generated from financing activities (564) 8,496 11,297
Net (decrease)/increase in cash and cash equivalents (1,962) 6,873 462
Cash and cash equivalents at the beginning of the period 2,353 1,891 1,891
Cash and cash equivalents at the end of the period 391 8,764 2,353
Notes to the unaudited interim statements
1. General Information
Glantus Holdings Plc ("the Company" or the "Group") is a public limited
company incorporated in the Republic of Ireland. The registered office is
Marina House, Eastpoint Business Park, Dublin 3.
The principal activity of the Group is the specialist provision of next
generation and world class software platforms focused on manufacturing,
distribution and related industries.
2. Accounting policies
Basis of preparation
These interim financial statements are non-statutory general-purpose financial
statements for the six-month period ended 30 June 2022. These financial
statements have been prepared in accordance with IAS 34 Interim Financial
Reporting, as adopted by the European Union, and the Companies Act 2014. They
do not include all of the information required in annual financial statements
in accordance with IFRS as adopted by the European Union. However, selected
explanatory notes are included to explain events and transactions that are
significant to an understanding of the changes in the Group's financial
position and performance since the last annual consolidated financial
information for the year ended 31 December 2021 included in the Annual Report.
The interim financial statements for the six-month period ended 30 June 2022
should be read in conjunction with the consolidated results for the year ended
31 December 2021 included in the Annual Report, and any public announcements
made by the company during the interim reporting period.
The interim financial statements have been prepared on the historical cost
basis. The interim financial statements of the Group are presented in Euro
("€") which is also the functional currency of the Company.
The Group's accounting policies are set out in the Company's Annual Report.
The preparation of the interim financial statements requires management to
make judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets, liabilities, income
and expense. Actual results may subsequently differ from those estimates. In
preparing the interim financial statements, the significant judgements made by
management in applying the Group's accounting policies and key sources of
estimation uncertainty were the same, in all material respects, as those
applied to the consolidated results for the year ended 31 December 2021
included in the Annual Report.
Going concern
At the time of approving these interim accounts, the directors have a
reasonable expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. Accordingly, the directors
continue to adopt the going concern basis of accounting in preparing the
interim financial statements.
The interim financial statements are unaudited and were approved by the Board
of Directors on 27/09/22 .
3. Segmental Reporting
Segmental information is presented in respect of the group's geographical
regions and operating segments in accordance with IFRS 8 'Operating Segments'.
The Board considers that there is one identifiable business segment being the
provision of enterprise software solutions.
Recurring revenue is the revenue that annually repeats either under
contractual subscription or predicable transactional billing.
Six months to 30 June Six months to 30 June Year ended 31 December
2022 2021 2021
€'000 €'000 €'000
Amount of revenue by class of activity:
Recurring annual subscriptions 2,473 1,402 3,857
Recurring recovery services 3,894 2,374 5,193
Non-recurring professional services & licences 190 486 1,473
Reported revenue 6,557 4,262 10,523
The group operates in three principal geographical regions being Republic of
Ireland, the United Kingdom and the United States of America. The group also
has customers in other countries such as Singapore, Australia, Spain,
Switzerland, Canada, Mexico and the Netherlands, which are not material for
separate identification.
Six months to 30 June Six months to 30 June Year ended 31 December
2022 2021 2021
€ '000 € '000 € '000
Amount of revenue by region:
Republic of Ireland 722 1,510 2,478
United Kingdom 2,336 1,630 3,878
United States of America 2,998 1,122 3,679
Others 502 - 488
Reported Revenue 6,557 4,262 10,523
4. Adjusted EBITDA
Management has presented adjusted EBITDA as it monitors this performance
measure at a consolidated level, and the Board considers that this metric
provides the best measure of assessing underlying trading performance.
Adjusted EBITDA is calculated by adjusting profit or loss before taxation to
exclude the impact of net finance costs, depreciation, amortisation, share
based payment charges and exceptional items.
Six months to 30 June Six months to 30 June Year ended 31 December
2022 2021 2021
€ '000 € '000 € '000
Operating (Loss)/profit (920) (1,111) (1,296)
Amortisation 1,099 318 1,229
Depreciation 63 100 198
Exceptional Items 449 1,883 2,948
Share Based payments 33 - 24
Adjusted EBITDA 724 1,190 3,103
5. Exceptional Items
The exceptional items include termination costs as part of restructuring.
Six months to 30 June Six months to 30 June Year ended 31 December
2022 2021 2021
€ '000 € '000 € '000
Acquisition costs - - 1,015
Restructuring costs 449 - 489
AIM Admission costs - 902 902
Sale Fee to Beachpoint Capital on IPO admission - 1,000 1,000
- (19) (458)
Other exceptional (income)/costs
Total exceptional items 449 1,883 2,948
6. Earnings per share
Basic earnings per share is calculated by dividing the net loss for the period
attributable to ordinary shareholders by the weighted average number of
ordinary shares outstanding during the period.
The basic earnings per share calculation is the same as for the fully diluted
earnings per share position.
Six months to 30 June Six months to 30 June Year ended 31 December
2022 2021 2021
Earnings € '000 € '000 € '000
Loss for the period (1,549) (1,449) (2,285)
Taxation (1) (7) 22
Amortisation 1,099 318 1,229
Depreciation 63 100 198
Exceptional Items 449 1,883 2,948
Share Based payments 33 - 24
Finance costs 631 345 967
Adjusted Earnings 724 1,190 3,103
Number Number Number
Weighted average number of ordinary shares '000 '000 '000
Total shares in issue (weighted) 37,833 29,038 33,168
Total diluted shares (weighted) 40,046 31,251 35,548
EPS Cent Cent Cent
Basic and diluted EPS (4.09) (4.99) (6.89)
Adjusted basic EPS 1.91 4.10 9.36
Adjusted EPS is not a defined performance measure in IFRS. The Group's
definition of adjusted EPS may not be comparable with similarly titled
performance measures disclosures by other entities.
7. Share Capital
Ordinary Shares Share Capital Share Premium
Number @ €0.001 each € €
At 1 January 2022 37,833,316 37,833 12,082,712
At 30 June 2022 37,833,316 37,833 12,082,712
There has been no activity in relation to the share capital during the year
2022 to date.
8. Events after the reporting period
On 22 July 2022, the Company restructured its senior debt with Beach Point
Capital.
The revised facilities key terms comprise:
· Interest rate reduction to 10% from existing 12%
· Deferring capital repayments for 12 months
· Additional working capital facility of €2m to invest in further
product development
· Maturity of loans remains unchanged at August 2023 and July 2025
· Exit Fee Structure has been improved by reducing the increase in
the exit fee which was set out in the previous agreement
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