REG - Ingenta PLC - Final Results
27/06/2022 07:00
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RNS Number : 2054Q Ingenta PLC 27 June 2022
Ingenta plc
(the 'Group' or the 'Company')
Final Audited Results
Ingenta plc (AIM: ING) a leading provider of software and services to the
global publishing industry, announces its final audited results for the year
ended 31 December 2021.
Financial Key Points
· Revenues stable at £10.1m (2020: £10.2m) reflecting a focus on
core software offerings.
· Annual Recurring Revenue (ARR)* of £8.9m representing 88% of
total revenue (2020: £8.7m, 86%).
· Operating cash inflows of £2.0m in the year (2020: £0.8m).
· Cash balances at year end of £3.0m (2020: £2.3m).
· Adjusted EBITDA** of £1.5m (2020: £1.2m).
· Net profit of £1.8m*** (2020: £0.4m).
· Proposed final dividend of 2 pence per share, subject to
shareholder approval at the 2022 AGM (2021: 1.5 pence).
· Earnings per share of 10.93 pence (2020: 2.67 pence).
Operational Key Points
· First music customer won and deployed onto our conChord IP
management platform, leading to increasing interest from other music
publishers within this substantial target market.
· 4 customer go-lives across the product portfolio during the year.
· Completion of internal infrastructure plan with improved
resilience and operational flexibility.
Current trading
· Strong trading in 2022 generating growth in revenues and profit
over the prior period.
· Growth driven by existing customer base with extended sales
cycles persisting for sales to new customers.
· Whilst cognisant of deteriorating economic conditions, the Board
believe the results for the year ended 31 December 2022 will be comfortably in
line with market expectations.
* ARR - Revenue generated and recognised in the year from annually recurring
software support contracts, hosting services and managed services.
**Adjusted EBITDA - EBITDA before impairment, gain / loss on disposal of fixed
assets, foreign exchange gain / loss and exceptional non-recurring costs. See
note 2 for details.
***Net profit in 2021 includes a £1.2m deferred tax credit.
Scott Winner, Chief Executive Officer, commented:
"The 2021 results announced today demonstrate the completion of Ingenta's turn
around, delivering stabilised revenue, strong efficiency gains, higher margins
and improved cashflow. This has been achieved by delivering a broader array of
services to existing customers.
Strategically, we continue to focus on our Intellectual Property management
solutions and web-based content platforms which we anticipate will deliver
revenue growth. In that respect, I'm pleased to report we have signed and
deployed our first music customer onto our conChord product in 2021. This is
an exciting development for the Group and validates that our expertise in IP
management is applicable in verticals outside of the traditional publishing
sector.
In our web-based digital content distribution business, we delivered 3
successful go lives on our Edify platform. These implementations included 2
more prestigious NGO customers and we look to further enhance our business in
this sector."
Certain of the information contained within this announcement is deemed by the
Company to constitute inside information as stipulated under the UK version of
the EU Market Abuse Regulation (2014/596) which is part of UK law by virtue of
the European Union (Withdrawal) Act 2018, as amended and supplemented from
time to time.
For further information please contact:
Ingenta plc
Scott Winner / Jon
Sheffield Tel: 01865
397 800
Cenkos Securities plc
Nicholas Wells / Katy
Birkin Tel: 020
7397 8900
Chairman's statement
Overview
I'm pleased to report on the Group's continued progress in 2021 and in
particular, the actions taken to improve operational efficiency as we strive
to generate improved margins, profitability and cashflow. With sound
fundamentals in place, the Group is well positioned to broaden its reach
beyond the traditional publishing sphere of Intellectual Property management
and into a variety of adjacent vertical markets. As previously announced, the
first target for expansion is within the music sector and the Group won and
successfully deployed its first customer onto its multitenancy music IP
management platform, which has been designed to meet the ever-increasing
challenges faced by those operating in this sector.
Elsewhere, our web-based content platform business has also performed well,
and we successfully deployed 3 new customers to our Edify solution.
Encouragingly, 2 of these go lives were for prestigious NGO's which represents
a growing opportunity for the Group and a diversification away from scholarly
content providers.
As outlined above, the main success story for the year was the improved margin
and profitability driven from our loyal customer base. To a large extent this
is due to the expansion of our service offering which has been designed, in
part, as a solution for customers who do not want to manage the peripheral or
technology related requirements of running and maintaining a software package.
In addition to the widened service offering, the Group has maintained a close
focus on internal processes to ensure all services are designed, contracted
and delivered in an efficient fashion. Our utilisation levels for professional
service staff have been on an upward trend in 2021 and this remains a key
focus going forwards.
Ingenta has a wealth of experience in both technology and its use within
content delivery and IP management, providing a foundation for growth in an
increasingly complicated environment where customers are continually searching
for new and improved ways of managing their business processes.
Operational flexibility
It has been over 2 years since Covid impacted on us all and I'm proud of the
resilience, flexibility and dedication of all the teams at Ingenta. In rapid
time, the whole Group successfully migrated to remote working whilst
continuing to service our loyal customer base, many of whom experienced
additional support requirements as they adapted their own business processes.
However, whilst this initial change was enforced, the Group has taken the
initiative and looked to fundamentally adapt and remodel our infrastructure
within physical premises, IT or internal working processes. Everyone should be
proud of their contributions to this, the new and agile Ingenta.
Shareholders' returns and dividends
During the year, the Company completed a share buyback programme and
repurchased a further 440,826 ordinary shares. At the year end, the Company
had 16,919,609 ordinary shares in issue, with a total of 587,930 shares held
in treasury.
The Directors declare their intention to pay a dividend in 2022 of 2 pence per
share (2021: 1.5 pence) subject to approval at the forthcoming AGM.
Outlook
The Group's core Commercial and Content software solutions provide a mission
critical service enabling publishers to run their business and manage their IP
assets. With our newly established operating fundamentals firmly in place and
generating returns, the Group can look forward with optimism to the next stage
of its development - generating revenue growth and leveraging our expertise in
the wider IP management arena. The Group has taken its first step into the
music IP sector and will look to expand on this whilst continuing to drive
growth in our existing core markets.
M C Rose
Chairman
24 June 2022
Financial review
Business Strategy
Ingenta is a provider of mission critical software and services to the
publishing sector, with growth aspirations in adjacent industries.
Operationally, the Group has moved to a product agnostic services architecture
enabling it to offer an integrated approach to servicing customers whereby
service levels and software are standardised, and as a result, resources are
utilised more efficiently. The Group's focus is to accelerate growth in
recurring revenue via the sale of software as a service wherever possible.
Product review
Ingenta Commercial
Ingenta Commercial provides a variety of modular publishing management systems
for both print and digital products. A core area of expertise is within
Intellectual Property and the Group is looking to leverage its existing
expertise in contracts, rights and royalties management by expanding into
adjacent verticals. conChord, a solution designed for the music industry, has
already been released and successfully deployed and we believe there are
further opportunities in other verticals where IP management is an increasing
concern for customers.
Reported revenues increased marginally to £6.7m (2020: £6.6m) with the Group
remaining focussed on driving recurring revenues by offering ongoing
peripheral services in addition to the standard software support. In this
respect, the hosted service offering has been well received and has helped
increase managed services revenues in the division. The revenues reported in
the year that are recurring in nature increased from £5.4m to £6.1m.
Reported earnings before interest, tax, depreciation and amortisation (EBITDA)
declined slightly from £0.85m to £0.78m and was largely the result of
enhanced post go live support on a number of customers as they transition from
implementation to normalised support.
Ingenta Content
The Ingenta Content suite of products enable publishers of any size,
discipline or technical proficiency to convert, store, deliver and monetise
digital content on the web.
Annual revenue increased from £2.3m to £2.4m helped by three new customer go
lives on the Edify platform during the year and an active base of customer
change request work. Importantly, the Group continues to successfully
diversify into new markets with the addition of 2 further NGO customers.
Divisional EBITDA increased from £0.32m to £0.52m and was driven by the
efficient deployment of the new customers sites which moved onto support
during the year.
Ingenta Advertising
Ingenta Advertising provides a complete browser-based multimedia advertising,
CRM and sales management platform for content providers.
The business anticipates that the Group's Advertising offering will become a
component of the larger Commercial and Content Products divisions and, in
time, its revenues will be less clearly distinguished as a separate CGU.
Reported revenue remained stable at £0.8m (2020: £0.8m). Segmental EBITDA
for the advertising division increased marginally from £0.2m to £0.24m,
largely as a result of improved support efficiency plus additional project
work undertaken in the year.
PCG
The PCG consulting arm provides a range of non-software services designed to
support and drive a business's sales strategy. Strategically, the team's
skills are being increasingly used to drive sales pipeline for the wider Group
in addition to their own customer portfolio work.
Annual revenue declined slightly to £0.3m (2020: £0.4m) and was a result of
a challenging sales market. Part of the divisions business is driven from
sales commission and activity was somewhat depressed as buyers held off making
purchases during Covid restrictions. Segmental EBITDA improved from a loss of
£0.2m to a loss of £0.1m driven by the Group's policy of reallocating PCG
resources to the wider Group marketing function in order to improve sales
pipeline growth across the business.
Going forward, it is envisaged that PCG and Advertising will no longer be
reported as separate divisions.
Financial Performance
Group revenue was stable at £10.1m (2020: £10.2m) but encouragingly, the
recurring revenue base has been expanded slightly to £8.9m or 88% of the
reported total (2020: £8.7m and 86%). This increase in recurring revenues is
due to the uptake of ongoing managed services where the business is
expanding its offering.
Although revenue was stable, the Group's cost of sales declined from £5.7m to
£5.5m as the previous actions taken to streamline operational efficiency
begin to take hold. Consequently, gross profit increased to £4.7m (2020:
£4.4m). Further operational efficiencies have been generated within
administration overheads helping yield profit from operations of £0.8m (2020:
£0.5m).
Sales and marketing spend was stable at £0.7m but it masks a conscious switch
in tactics as the Group looks to embrace digital marketing strategies rather
than traditional in person event attendance. These efforts are starting to
build a broader pipeline of opportunities that the Group is looking to exploit
going forward. Administrative costs have declined from £3.3m to £3.2m again
largely as a result of the previously reported efficiency drive including
removal of operational silos and a change in infrastructure mix within the
business.
No tax charge is anticipated for 2021 as the Group continues to utilise
brought forward tax losses.
Financial Position
Non-current assets include goodwill and intangibles recognised on historic
acquisitions. In 2021, Goodwill relates solely to the core Content platform
software which will be used to drive growth in the future. Goodwill relating
to historic acquisitions is tested for impairment each year using discounted
cashflows. No impairment was identified in 2021. Property, plant and equipment
reductions are a direct result of the Group's infrastructure strategy which
has seen us move IT and personnel out of physical business premises.
Current assets have increased from £4.5m to £4.8m which is the result of
improved profitability driving cash generation. Additionally, throughout the
Covid pandemic there have been very few instances of bad debt as the Group's
customer base remains relatively shielded in an operational sense from the
impacts of social restriction and the Groups services remain business critical
to end users.
Total liabilities have declined from £4.8 to £4.6m as prior year finance
lease commitments undertaken for our hosting infrastructure are paid down.
Cashflow
The Group generated a cash inflow from operations of £2.0m compared to £0.8m
in 2020. Critically, the Groups restructuring has improved efficiency and
margins which flows through to cash generation as all research and development
efforts are expensed. Outside of normal operational activity, the Group has
paid dividends of £0.4m (2020: £0.3m) and completed a share buyback
programme which amounted to an outflow of £0.3m (2020: £0.1m). Closing cash
balances were £3.0m (2020: £2.3m)
Key Performance Indicators
The Board and senior management review a number of KPI's continually
throughout the year, all of which form part of the monthly management accounts
process and include:
· Revenue versus budget and monthly reforecast
· Adjusted EBITDA (see note 2 for calculation) versus budget
· Group cashflow versus budget
· Sales pipeline growth and conversion analysis
· Time utilisation statistics
Any deviations or anomalies are investigated, and corrective action taken
where appropriate.
Full year revenues were below budget largely because of shortfalls on new
sales targets as the Covid pandemic restricted activity. As has been widely
publicised elsewhere, the pandemic has slowed sales cycles and occasionally
delayed implementations. However, interest for our products and services
remains high.
Adjusted EBITDA was higher than budget driven by acceleration of certain
planned savings in infrastructure, delayed hiring of staff and restricted
marketing activity.
Year-end cash balances were £0.7m above budget reflecting increased
profitability and timing of receipts around year end.
The Group monitor sales activity with reference to monthly sales pipeline
reports. These reports detail sales opportunities by product with metrics
around expected project timelines and revenue recognition estimates so that
management can deploy resources adequately to ensure the best chance of
success in the bidding process. When any items are removed from the pipeline
due to either a successful sale or a lost opportunity, management carry out a
detailed analysis to ensure the reasons are understood and any actions
required are taken.
The business monitors time utilisation at a contract level to enable accurate
pricing decisions to be made ensuring profitable service delivery. Internal
development costs are also reviewed to ensure the appropriate effort is spent
supporting the products and deliver an effective product roadmap.
Going concern
The core fundamentals of the Group remain strong with cash reserves of £3m
and no debt beyond leasing arrangements. In addition, further cost saving
opportunities have been identified as the Group look to reduce their physical
premises cost and associated overheads as leases naturally expire over the
coming years. Management are satisfied that cash is sufficient for the needs
of the business based on the cash flow forecast. The going concern review
covered the period to the end of June 2023.
The Covid outbreak continues to add some uncertainty to financial forecasting
and modelling. However, at an operating profit level, the Group's results for
the first quarter of 2022 have been better than budget. New sales activity
remains subdued with the timing of any uplift difficult to predict. The Group
continues to embrace established remote working practices without any
significant impact to services. Any ongoing implementations and professional
services can also be delivered remotely by Ingenta personnel. The internal
business infrastructure is contracted with large multinational corporations
and remains resilient. The Group has modelled various downside scenarios and
consider it appropriate to use the going concern basis to compile these
financial statements. Further details on going concern are included in the
accounting policies section of the financial statements.
Outlook
Ingenta achieved a key milestone in 2021 by successfully deploying its first
music customer onto conChord which significantly provides us with a
referenceable client and independent validation that our IP engine is flexible
enough to step into adjacent verticals. Our marketing effort is now targeted
on enhancing the messaging in this sector in order to build momentum and boost
sales pipeline growth.
The Group is also actively exploring further opportunities to drive expansion
of the newly invigorated managed services division which is a key offering
that provides real value to customers who no longer wish to be encumbered with
peripheral activities as they relate to software infrastructure.
Pleasingly, 2022 has started well, with reported profits ahead of budget and
the prior year, giving the Board optimism for the future.
J R Sheffield
Chief Financial Officer
24 June 2022
Group Statement of Comprehensive Income
For the year ended 31 December 2021
Restated
Year ended Year ended
31 Dec 21 31 Dec 20
note £'000 £'000
Group revenue 10,145 10,177
Cost of sales (5,487) (5,741)
Gross profit 4,658 4,436
Sales and marketing expenses (690) (671)
Administrative expenses (3,214) (3,301)
Profit from operations 2 754 464
Finance costs (27) (22)
Profit before income tax 727 442
Income tax 3 1,074 7
Profit for the year attributable to equity holders of the parent 1,801 449
Other comprehensive expenses which will be reclassified subsequently to profit
or loss:
Exchange differences on translation of foreign operations 56 (137)
Total comprehensive profit for the year attributable to equity holders of the 1,857 312
parent
Basic profit per share (pence) 4 10.93 2.67
Dilutive profit per share (pence) 4 10.50 2.56
See note 5 for further details on the prior period adjustment
All activities are classified as continuing
Group Statement of Financial Position
As at 31 December 2021
Restated Restated
31 Dec 21 31 Dec 20 31 Dec 19
£'000 £'000 £'000
Non-current assets
Goodwill 2,661 2,661 2,661
Other intangible assets - 58 158
Property, plant and equipment 665 1,119 473
Deferred tax asset 1,163 - -
4,489 3,838 3,292
Current assets
Trade and other receivables 1,810 2,226 3,219
Cash and cash equivalents 3,006 2,323 2,600
4,816 4,549 5,819
Total assets 9,305 8,387 9,111
Equity
Share capital 1,692 1,692 1,692
Merger reserve 11,055 11,055 11,055
Reverse acquisition reserve (5,228) (5,228) (5,228)
Share option reserve 88 61 23
Translation reserve (605) (661) (524)
Retained earnings (2,278) (3,353) (3,487)
Total equity 4,724 3,566 3,531
Non-current liabilities
Deferred tax liability 88 12 32
Leases 192 430 206
280 442 238
Current liabilities
Trade and other payables 1,991 2,061 2,459
Deferred income 2,310 2,318 2,883
4,301 4,379 5,342
Total liabilities 4,581 4,821 5,580
Total equity and liabilities 9,305 8,387 9,111
See note 5 for further details on the prior period adjustment
Group Statement of Changes in Equity
For the year ended 31 December 2021
Share capital Merger reserve Reverse acquisition reserve Translation reserve Retained earnings Share option reserve Total attributable to owners of parent
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2021 on prior basis 1,692 11,055 (5,228) (839) (3,175) 61 3,566
Impact of restatement (note 5) - - - 178 (178) - -
Restated balance at 1 January 2021 1,692 11,055 (5,228) (661) (3,353) 61 3,566
Dividends paid - - - - (410) - (410)
Shares bought back into treasury - - - - (316) - (316)
Share options granted in the year - - - - - 27 27
Transactions with owners - - - - (726) 27 (699)
Profit for the year - - - - 1,801 - 1,801
Foreign exchange differences on translation - - - 56 - - 56
Total comprehensive income for the year - - - 56 1,801 - 1,857
Balance at 31 December 2021 1,692 11,055 (5,228) (605) (2,278) 88 4,724
For the year ended 31 December 2020
Share capital Merger reserve Reverse acquisition reserve Translation reserve Retained earnings Share option reserve Total attributable to owners of parent
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2020 on prior basis 1,692 11,055 (5,228) (880) (3,131) 23 3,531
Impact of restatement (note 5) - - - 356 (356) - -
Restated balance at 1 January 2020 1,692 11,055 (5,228) (524) (3,487) 23 3,531
Dividends paid - - - - (252) - (252)
Shares bought back into treasury - - - - (63) - (63)
Share options granted in the year - - - - - 38 38
Transactions with owners - - - - (315) 38 (277)
Profit for the year - - - - 449 - 449
Foreign exchange differences on translation - - - (137) - - (137)
Total comprehensive income for the year - - - (137) 449 - 312
Balance at 31 December 2020 1,692 11,055 (5,228) (661) (3,353) 61 3,566
Group Statement of Cash Flows
For the year ended 31 December 2021
Restated
Year ended Year ended
31 Dec 21 31 Dec 20
£'000 £'000
Profit before taxation 727 442
Adjustments for
Depreciation 632 439
Profit on disposal of fixed assets - (2)
Interest expense 27 22
Unrealised foreign exchange differences 56 (137)
Share based payment charge 27 39
Decrease in trade and other receivables 416 954
Increase / (decrease) in trade and other payables and deferred income 131 (953)
Cash inflow from operations 2,016 804
Tax paid (13) (13)
Net cash inflow from operating activities 2,003 791
Cash flows from investing activities
Purchase of property, plant and equipment (119) (200)
Net cash used in investing activities (119) (200)
Cash flows from financing activities
Interest paid (21) (5)
Payment of lease liabilities (453) (550)
Dividend paid (410) (252)
Costs of buy back of shares into treasury (316) (63)
Net cash used in financing activities (1,200) (870)
Net increase / (decrease) in cash and cash equivalents 684 (279)
Cash and cash equivalents at the beginning of the year 2,323 2,600
Exchange differences on cash and cash equivalents (1) 2
Cash and cash equivalents at the end of the year 3,006 2,323
See note 5 for further details on the prior period adjustment
1. Basis of preparation
The financial information of the Group set out above does not constitute
statutory accounts for the purposes of Section 435 of the Companies Act
2006. The financial information for the year ended 31 December 2021 has
been extracted from the Group's audited financial statements which were
approved by the Board of directors on 24 June 2022.
The financial information for the year ended 31 December 2021 has been
extracted from the Group's financial statements for that period. The report
of the auditor on the 2021 financial statements was 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.
Whilst the financial information included in this preliminary announcement
has been prepared in accordance with UK adopted international accounting
standards ("IASs") in conformity with the requirements of the Companies Act
2006, the International Financial Reporting Interpretations Committee
("IFRIC"), interpretations issued by the International Accounting Standards
Boards ("IASB") that are effective or issued and adopted as at the time of
preparing these financial statements, and in accordance with the provisions of
the Companies Act 2006 that are relevant to companies that report under UK
adopted IASs, this announcement does not itself contain sufficient information
to comply with those IASs. This financial information has been prepared in
accordance with the accounting policies set out in the 2020 Report and
Accounts and updated for new standards adopted in the current year.
Items included in the financial information of each of the Group's entities
are measured using the currency of the primary economic environment in which
the entity operates (the functional currency). The consolidated financial
information is presented in UK sterling (£), which is the Group's
presentational currency.
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.
The principal activity of Ingenta plc and its subsidiaries is the sale of
software and ancillary services.
2. Profit from operations
Profit from operations has been arrived at after charging:
Restated
Year ended Year ended
31 Dec 21 31 Dec 20
£'000 £'000
Research and development costs 1,009 1,409
Net foreign exchange (gain) / loss 61 (138)
Depreciation of property, plant and equipment
- owned assets 179 110
- leasehold property 133 122
- assets under leases 262 107
Amortisation 58 100
Auditor's remuneration
- audit fees 74 71
- taxation services 12 12
Exceptional non-recurring costs 5 447
An analysis reconciling the profit from operations to adjusted EBITDA is
provided below.
Restated
Year ended Year ended
31 Dec 21 31 Dec 20
£'000 £'000
Profit from operations 754 464
Add back:
Depreciation and amortisation 632 439
Gain on disposal of fixed assets - (2)
Exceptional non-recurring costs 5 447
Foreign exchange loss / (gain) 61 (138)
EBITDA before impairment, amortisation, gain / loss on disposal of fixed 1,452 1,210
assets, foreign exchange gain / loss and exceptional non-recurring costs
Exceptional non-recurring costs include restructuring costs, premises exit
costs, non-recurring professional fees and debt write offs.
3. Tax
Year ended Year ended
31 Dec 21 31 Dec 20
£'000 £'000
Analysis of (charge) / credit in the year
Current tax:
Current year State tax - US (10) (10)
Adjustment to prior year charge - UK (3) (3)
Deferred tax credit 1,087 20
Taxation 1,074 7
The Group has unutilised tax losses at 31 December 2021 in the UK and the USA
of £16.3m (2020: £15.6m) and $11.2m (2020: $14.2m) respectively. These
losses have been agreed with the tax authorities in the UK and USA. The Board
intends to make use of all losses wherever possible.
Some of the US tax losses are restricted to $491K per annum as a result of
change of control legislation. Losses carried forward from the change of
control in April 2008 are restricted and must be used within 20 years. The
Board believes the Group will be able to make use of $7.4m (2020: $7.7m) of
the total unutilised losses at 31 December 2021.
No deferred tax has been recognised in accordance with advice from US tax
accountants on the basis that the US losses are restricted and there is
uncertainty on the value of losses which will be able to be used.
From 1 April 2023, the corporation tax rate applicable to companies with
taxable profits above £250,000 will be 25 per cent. Companies with profits
below £50,000 will, however, continue to pay tax at the current rate of 19
per cent. Those with taxable profits between £50,000 and £250,000 will
benefit from marginal relief, similar to that which applied before the
previous incarnation of the small companies' rate of corporation tax was
abolished with effect from 1 April 2015.
The differences are explained below:
Restated
Reconciliation of tax expense Year ended Year ended
31 Dec 21 31 Dec 20
£'000 £'000
Profit on ordinary activities before tax 727 442
Tax at the UK corporation tax rate of 19% (2019: 19%) 138 84
Income / expenses not allowable for tax purposes (16) 14
Unrelieved losses carried forward 354 245
Utilisation of losses (529) (213)
Difference in timing of allowances 56 (129)
Deferred tax movement (1,087) -
Adjustment to tax charge in respect of prior years 10 (8)
Total taxation (1,074) (7)
United Kingdom Corporation tax is calculated at 19% (2020: 19%) of the
estimated assessable profit for the year.
Taxation for other jurisdictions is calculated at the rates prevailing in the
respective jurisdictions.
4. Earnings per share
Basic earnings per share is calculated by dividing the earnings attributable
to ordinary shareholders by the weighted average number of ordinary shares
outstanding during the year.
For diluted earnings per share, the weighted average number of ordinary shares
in issue is adjusted to assume conversion of all dilutive ordinary share
options. Management estimate 681,000 ordinary shares will be issued (2020:
681,000) in respect of share options. In the current year, this calculation
would have an antidilutive effect on earnings per share so has been ignored.
Restated
Year ended Year ended
31 Dec 2021 31 Dec 2020
£'000 £'000
Attributable profit 1,801 449
Weighted average number of ordinary shares used in basic earnings per share 16,481 16,834
('000)
Shares deemed to be issued in respect of share-based payments 670 681
Weighted average number of ordinary shares used in dilutive earnings per share 17,151 17,515
('000)
Basic profit per share arising from both total and continuing operations 10.93p 2.67p
Dilutive profit per share arising from both total and continuing operations 10.50p 2.56p
Dividends
On 9th August 2021 the Company paid a final dividend of 1.5 pence per share
for the year ended 31 December 2020. On 29th October 2021 an interim dividend
of 1 pence per share was paid in respect of the year ended 31 December 2021.
After the year end, the Directors declared their intention to pay a final
dividend of 2p for the year ended 31 December 2021, subject to approval at the
forthcoming Annual General Meeting.
5. Prior period adjustment
An adjustment has been made to the treatment of foreign exchange gains and
losses on intercompany balance translation at year end. Previously all
intercompany balances were treated as a net investment and on consolidation
any exchange gains and losses were recorded in other comprehensive income and
recognised in the currency translation reserve in equity. Some of these
intercompany balances have subsequently been reclassified as trading balances
on the basis that transactions occur between trading entities. The summarised
corrections are shown below:
Administration expenses Retained Translation
£'000 Earnings Reserve
£'000 £'000
Prior to 1 January 2020 356 (356)
Year ended 31 December 2020 (178) (178) 178
Prior to 1 January 2020, £356K of foreign exchange losses have been
reclassified from the translation reserve to retained earnings within equity.
For the year ended 31 December 2020, £178K of foreign exchange gains have
been reclassified from the translation reserve in equity and recognised in the
Statement of Comprehensive Income within administration expenses.
These adjustments have also impacted on the Statement of Cash Flows. The cash
and cash equivalents balances remain the same, however, changes are reflected
within the profit before taxation and movements in unrealised foreign exchange
differences.
The Statement of Changes in Equity has also been restated for the profit in
the year and the foreign exchange differences on translation of foreign
operations.
The impact on reported basic and diluted earnings per share for the year ended
31 December 2020 was an increase of 1.06p and 1.02p respectively.
6. Publication of non-statutory accounts
The financial information set out in this announcement does not constitute
statutory accounts as defined in the Companies Act 2006.
The Group Statement of Comprehensive Income, Group Statement of Financial
Position, Group Statement of Changes in Equity, Group Statement of Cash Flows
and associated notes have been extracted from the Group's 2021 statutory
financial statements upon which the auditor's opinion is unqualified and which
do not include any statement under section 498 of the Companies Act 2006.
Those financial statements will be delivered to the Registrar of Companies
following the release of this announcement.
This announcement and the annual report and accounts, including the Notice of
Annual General Meeting, are available on the Company's website
www.ingenta.com. A copy of the report and accounts will be sent to
shareholders who have elected to receive a printed copy with details of the
annual general meeting in due course.
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