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RNS Number : 3668G Ingenta PLC 28 April 2025
Ingenta plc
(the 'Group' or the 'Company')
Final Audited Results
Ingenta plc (AIM: ING) a leading software and services provider to the
publishing and media industries, announces its final audited results for the
year ended 31 December 2024.
Financial Performance
· Revenue decreased 5.6% to £10.2m (2023: £10.8m) as
non-recurring consultancy revenue slowed down in 2024.
· Annual Recurring Revenue (ARR)* of £8.9m, representing 87% of
total revenue (2023: £8.7m, 80%). New customer implementations in 2024
expected to yield approximately £0.5m of ARR in 2025.
· Adjusted EBITDA** £1.8m (2023: £2.2m).
· Net profit of £1.3m (2023: £2.3m) impacted by non-cash deferred
tax charges of £0.5m (2023: £0.3m credit) combined with non-cash foreign
exchange charges of £0.1m versus a credit of £0.2m in the prior year.
· Deferred tax charges are linked to a reduction in the Group
deferred tax asset which only recognises loss utilisation over a 5 year
period. The Group now predict that £0.5m of previously reported utilisation
will happen in subsequent periods.
· Adjusted earnings per share of 11.7 pence*** (2023: 12.8 pence).
· Reported earnings per share of 8.8 pence (2023: 15.8 pence).
· Full year dividend 4.1 pence (2023: 4.1 pence), with proposed
final dividend of 2.6 pence per share (2023: 2.6 pence), reflecting the
Board's confidence in the Group's prospects.
Strong Balance Sheet Reinforced by Recurring Cash Flows
· Operating cash inflows of £1.7m (2023: £1.1m).
· No debt or lease obligations.
· Cash balances at year end of £3.6m (2023: £2.7m).
Encouraging Operational Delivery Leveraging New Group Structure
· New Ingenta Content wins with total contract value of £0.5m over
three to five years.
· Significant new Ingenta Commercial win with total contract value
of £1.4m over three years.
Current Trading
· Ongoing implementations on track, with a further Ingenta Content
go live in Q1 2025.
· New Belgian customer contract win for Ingenta Content in January
2025.
· Significant pipeline of opportunities for Ingenta Commercial
consultancy work in 2025.
· Trading in line with expectations with our focus on delivering
sales growth.
Dividend Timetable
Subject to approval at the forthcoming AGM, the Company is pleased to announce
a final dividend of 2.6 pence per share which will be paid on 30 June 2025.
The ex-dividend date is 22 May 2025 and the associated record date for the
final dividend is 23 May 2025.
* ARR - revenue generated and recognised in the year from annually recurring
software support contracts, hosting services and managed services.
**Adjusted EBITDA - EBITDA before foreign exchange gain / loss and joint
venture write off. See note 3 for details.
***Adjusted earnings per share - earnings before tax, foreign exchange gain /
loss and joint venture write off. See note 5 for details.
Scott Winner, Chief Executive Officer, commented:
"The Group produced a steady financial performance in 2024, as we continue to
transition the business to our Software as a Service product suites. Our
products are flexible and adaptable, making them suitable for a wide range of
media businesses of all sizes and giving us a broad target market. We also
benefit from more than 80% of our revenue coming from recurring fees, giving
us good visibility of our near-term performance. With our increased investment
in sales and marketing planned for 2025, we are confident of developing a
larger pipeline of new business and returning to revenue growth in the year
ahead."
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
Cavendish Capital Markets Limited
Katy Birkin / Callum
Davidson Tel: 020 7220 0500
Chairman's statement
Overview
The Board is encouraged that the Group continues to add customers onto the new
generation of Ingenta software platforms, as these products will provide the
foundation for future growth. During the year, five customers successfully
went live, adding £0.5m of recurring annual revenues to the Group.
Encouragingly, we anticipate further change control work from these accounts
as they look to fine tune their Ingenta deployments.
As previously announced, the Group retains a significant element of
higher-margin legacy business which is an important part of the Group's future
strategy. These products and services are robust and will provide continued
value to our customers for the foreseeable future. However, the Board
acknowledges that in some cases customers may decide to migrate to alternative
solutions, either with Ingenta or third-party providers.
In the year, four customers with combined annual fees of £0.4m migrated away
from Ingenta platforms and this, along with a slow year for non-recurring
consultancy services, has led to a full-year reduction in revenue. In
response, the Group is prioritising the acceleration of new business
acquisition to offset any future, potentially larger-scale reductions in
legacy revenues, with the aim of returning the Group to growth in revenue and
profit. The Board has sanctioned a £0.5m investment in Group sales and
marketing activity, in order to build a larger and longer-term pipeline of new
business opportunities.
As part of our growth drive, we are increasing our use of digital advertising
and industry events to raise our brand awareness, and showcase our flagship
projects, to demonstrate the benefits we can deliver to similar organisations.
We aim to leverage our existing customer relationships to provide our products
and services to their wider groups, and provide wrap-around services, to
develop deeper customer relationships by taking on activities they do not want
to perform themselves. We are aware that consolidation is a feature of our
customers' markets and we are building our account management relationships
and looking to embed ourselves in the customer decision process through our
consulting service, which will help us to retain business if customers merge.
The Ingenta Content and Ingenta Commercial product suites are flexible,
well-balanced offerings suited to both small and large customers, which
expands their addressable market in our target segments. Our skilled
development resource means our products are adaptable and can cater for
changing customer needs, and we ensure they meet rigorous data security
standards, for example by using globally recognised software and service
providers. This underpins our confidence in the quality of our offering and
our ability to attract a growing customer base.
Dividends
The Board expects to recommend the payment of an unchanged final dividend for
the year of 2.6p per share, taking the total dividend for the year to a total
of 4.1p. Subject to trading remaining in line with expectations, the Board
intends to maintain the level of total dividends in 2025 at the current level
of 4.1p per share.
Outlook
The Group anticipates a return to revenue growth in 2025, driven by the
investment in sales and marketing, and there are promising early signs with
another new contract win in January. However, despite the expected increase in
sales, profitability in 2025 is expected to be lower than 2024, as the
investments made take time to bed in. Additionally, the rebalancing of revenue
in favour of new generation software will impact margins, as they attract a
higher level of cloud infrastructure cost than legacy on-premise deployments.
Martyn Rose
Chairman
Financial review
The Group operates as one reporting segment with two core revenue categories
of Ingenta Commercial and Ingenta Content.
Ingenta Commercial
Ingenta Commercial provides a variety of modular publishing management systems
for both print and digital products. Its core area of expertise is
intellectual property management, including the associated contracts, rights
and royalties. The software has an established publisher client base and is
highly adaptable, so it can also be applied to broader media markets including
music, television and film.
Commercial revenues were £7.0m (2023: £7.6m) with the decrease driven mainly
by a reduction in non-recurring legacy software consultancy services. In prior
years, consultancy activity has been strong as customers undertook significant
projects to modify and integrate their back end IT infrastructure. Whilst
opportunities were slower to materialise in 2024, early indications suggest an
upturn in 2025 as the Group is discussing a number of potential engagements.
During the year two legacy customers with combined recurring annual fees of
£0.1m left the Group.
Ingenta Content
The Ingenta Content suite of products enables publishers of any size,
discipline or technical proficiency to convert, store, deliver and monetise
digital content on the web.
Annual revenue remained stable at £3.2m (2023: £3.2m), as the Group
successfully implemented five more customers onto the platform, with
associated annual fees of £0.5m. Encouragingly, these new customers also have
change control work they would like to pursue and the Group is scoping out
requirements with a view to commencing work in 2025. During the year, two
customers with annual fees of £0.3m left the Group.
Financial Performance
Group revenue decreased to £10.2m (2023: £10.8m). As outlined above, this
was a consequence of slower consultancy services revenue, particularly within
Ingenta Commercial legacy products.
Annual recurring revenue (see note 2) was £8.9m or 87% of total revenue
(2023: £8.7m and 80% respectively). Although Group revenue declined slightly,
the business has been replacing legacy software revenues with next-generation
products, which should provide a solid foundation for future growth.
Sales and marketing spend was stable at £0.8m but the Group has announced its
intention to invest £0.5m in sales and marketing activities, to accelerate
new business wins. We have identified a number of roles that will help secure
new business in our target markets and we are actively recruiting.
Administrative costs declined slightly to £2.4m (2023: £2.6m) driven by the
release of a £149K payable balance no longer required after formal wind up of
the Group's 49% share of a Chinese Joint Venture plus the release of a £100K
contract provision. Additionally, the Group benefited from reduced
depreciation charges, as the business continues its policy of adopting cloud
infrastructure wherever possible.
Adjusted EBITDA was £1.8m (2023: £2.2m) and was impacted in the year by the
slower than expected consultancy revenues mentioned above. Similarly, profit
from operations declined to £1.8m (2023: £2.0m), as disclosed in the
statement of comprehensive income.
The Group has significant accumulated tax losses and anticipates making use of
£12.0m and $5.7m in the UK and US respectively. For the deferred tax
calculation, the Group reviews expected profits and use of tax losses over a
five-year period. The £0.5m investment in sales and marketing activity
described above means we expect that profits will now be lower in 2025. As a
consequence, the losses may take longer to utilise, which in turn reduces the
valuation of the deferred tax asset. The £0.5m tax charge (2023: £0.3m tax
credit) is the adjustment to reduce the deferred tax asset from £1.6m to
£1.1m (see note 5 for further details). Utilisation of losses means the
Group's cash tax payments in respect of 2024 are minimal.
Financial Position
The Group has a robust balance sheet. Non-current assets of £3.9m (31
December 2023: £4.4m) include goodwill of £2.7m (31 December 2023: £2.7m).
The Group tests goodwill for impairment each year using discounted cashflows
and did not identify any impairment in the year. Property, plant and equipment
of £0.1m reflects tight control of our expenditure and our infrastructure
strategy to leverage Cloud-based services wherever possible. The balance of
non-current assets is the deferred tax asset, with the reduction explained
above.
Current assets increased from £4.9m to £5.7m, driven by increased cash
balances reflecting our continued operational efficiency. See below for more
information on cashflow.
Total liabilities decreased from £3.6m to £3.1m, primarily because the Group
released £0.3m of provisions after successfully completing all of its
software obligations. The Group has no debt or lease obligations.
Cashflow
The Group generated £1.7m of operating cashflow in the year (2023: £1.1m).
Differences in cash generation year on year are mainly a timing issue, as the
Group has a significant element of legacy annual renewal business. These
renewals are billed in the final quarter of the year, causing increases in
contract liabilities, with cash receipts tending to fall either side of year
end. New business is predominantly contracted on a SaaS style arrangement, so
is less prone to these timing issues. Closing cash balances were £3.6m (31
December 2023: £2.7m), increasing to £3.8m at the end of February 2025.
Earnings per share and dividends
The Group maintained its progressive dividend policy and paid out £0.6m in
the year (2023: £0.5m). The Board is proposing to maintain the full year
dividend for 2024 at 4.1p per share (2023: 4.1p) subject to shareholder
approval of the 2.6p per share final dividend at the forthcoming AGM. The
parent Company distributable reserves were £7.6m at 31 December 2024.
Basic earnings per share were 8.8p (2023: 15.8p) but these are heavily
impacted by movements in deferred tax and unrealised foreign exchange
movements on intercompany balances. Adjusted earnings per share, after
removing these non-cash items and the joint venture write off, were 11.7p
(2023: 12.8p).
Going concern
The core fundamentals of the Group remain strong, with profitable operations,
cash reserves at the end of February 2025 of over £3.8m and no debt on the
balance sheet. The Directors have prepared detailed cashflow projections,
including sensitivity analysis, to the end of June 2026. Management is
satisfied that cash is sufficient for the needs of the business and
accordingly, the Group continues to adopt the going concern basis in preparing
its consolidated financial statements.
Jon Sheffield
Chief Financial Officer
Group Statement of Comprehensive Income
Year ended Year ended
31 Dec 24 31 Dec 23
note £'000 £'000
Group revenue 2 10,199 10,825
Cost of sales (5,214) (5,429)
Gross profit 4,985 5,396
Sales and marketing expenses (750) (757)
Administrative expenses (2,408) (2,590)
Profit from operations 3 1,827 2,049
Finance costs (2) (17)
Profit before income tax 1,825 2,032
Income tax 5 (546) 267
Profit for the year attributable to equity holders of the parent 1,279 2,299
Other comprehensive expenses which will be reclassified subsequently to profit
or loss:
Exchange differences on translation of foreign operations 78 (190)
Total comprehensive profit for the year attributable to equity holders of the 1,357 2,109
parent
Basic profit per share (pence) 6 8.81 15.82
Dilutive profit per share (pence) 6 8.60 15.50
All activities are classified as continuing
Group Statement of Financial Position
Note 31 Dec 24 31 Dec 23
£'000 £'000
Non-current assets
Goodwill 2,661 2,661
Property, plant and equipment 121 93
Deferred tax asset 1,108 1,622
3,890 4,376
Current assets
Trade and other receivables 2,065 2,185
Cash and cash equivalents 3,619 2,676
5,684 4,861
Total assets 9,574 9,237
Equity
Share capital 7 1,510 1,512
Capital redemption reserve 182 180
Merger reserve 11,055 11,055
Reverse acquisition reserve (5,228) (5,228)
Share option reserve 172 140
Translation reserve (410) (488)
Retained earnings (856) (1,510)
Total equity 6,425 5,661
Non-current liabilities
Deferred tax liability 2 -
2 -
Current liabilities
Trade and other payables 1,159 1,218
Provisions - 307
Contract liabilities 1,988 2,051
3,147 3,576
Total liabilities 3,149 3,576
Total equity and liabilities 9,574 9,237
Group Statement of Changes in Equity
Share capital Capital redemption reserve 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 £'000
Balance at 1 January 2023 1,512 180 11,055 (5,228) (298) (3,264) 117 4,074
Dividends paid - - - - - (545) - (545)
Share options granted in the year - - - - - - 23 23
Transactions with owners - - - - - (545) 23 (522)
Profit for the year - - - - - 2,299 - 2,299
Foreign exchange differences on translation - - - - (190) - - (190)
Total comprehensive income for the year - - - - (190) 2,299 - 2,109
Balance at 31 December 2023 1,512 180 11,055 (5,228) (488) (1,510) 140 5,661
Dividends paid - - - - - (596) - (596)
Shares repurchased and cancelled (2) 2 - - - (29) - (29)
Share options granted in the year - - - - - - 32 32
Transactions with owners (2) 2 - - - (625) 32 (593)
Profit for the year - - - - - 1,279 - 1,279
Foreign exchange differences on translation - - - - 78 - - 78
Total comprehensive income for the year - - - - 78 1,279 - 1,357
Balance at 31 December 2024 1,510 182 11,055 (5,228) (410) (856) 172 6,425
Group Statement of Cash Flows
Year ended Year ended
31 Dec 24 31 Dec 23
Note £'000 £'000
Profit before taxation 1,825 2,032
Adjustments for
Depreciation 56 288
Profit on disposal of fixed assets (1) -
Interest expense 2 17
Share based payment charge 32 23
Increase in trade and other receivables 121 (276)
Decrease in trade and other payables and contract liabilities (44) (1,112)
(Decrease) / Increase in provisions (307) 168
Cash inflow from operations 1,684 1,140
Tax paid (30) (7)
Net cash inflow from operating activities 1,654 1,133
Cash flows from investing activities
Purchase of property, plant and equipment (84) (80)
Net cash used in investing activities (84) (80)
Cash flows from financing activities
Interest paid (2) (17)
Payment of lease liabilities - (192)
Dividend paid (596) (545)
Costs of share repurchase (29) -
Net cash used in financing activities (627) (754)
Net increase / (decrease) in cash and cash equivalents 943 299
Cash and cash equivalents at the beginning of the year 2,676 2,376
Exchange differences on cash and cash equivalents - 1
Cash and cash equivalents at the end of the year 3,619 2,676
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 2024 has
been extracted from the Group's audited financial statements which were
approved by the Board of directors on 25 April 2025.
The financial information for the year ended 31 December 2024 has been
extracted from the Group's financial statements for that period. The report
of the auditor on the 2024 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 2022 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 traded 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. Revenue
An analysis of the Group's revenue is detailed below by activity across the
Group's operating units:
Year ended Year ended
31 Dec 24 31 Dec 23
£'000 £'000
Licences - 24
Consulting Services 1,297 2,087
Non-recurring revenue 1,297 2,111
Hosted Services 3,644 3,509
Managed Services 2,742 2,668
Support and upgrade 2,163 2,197
PCG 353 340
Annual recurring revenue 8,902 8,714
10,199 10,825
An analysis of the Group's revenue by product type is detailed below:
Year ended Year ended
31 Dec 24 31 Dec 23
£'000 £'000
Commercial product division 6,990 7,646
Content product division 3,209 3,179
10,199 10,825
A geographical analysis of the Group's revenue is detailed below:
Year ended Year ended
31 Dec 24 31 Dec 23
£'000 £'000
UK 5,340 5,266
USA 3,929 4,418
Netherlands 301 345
France 227 208
Rest of the World 402 588
10,199 10,825
Two customers each contributed more than 10% of revenue (2023: two) and this
amounted to £3,510K (2023: £3,578K).
3. Profit from operations
Profit from operations has been arrived at after charging:
Year ended Year ended
31 Dec 24 31 Dec 23
£'000 £'000
Research and development costs 1,227 1,176
Net foreign exchange loss / (gain) 52 (168)
Depreciation of property, plant and equipment
- owned assets 56 94
- assets under leases - 194
Auditor's remuneration 140 140
An analysis reconciling the profit from operations to adjusted EBITDA is
provided below.
Year ended Year ended
31 Dec 24 31 Dec 23
£'000 £'000
Profit from operations 1,827 2,049
Add back:
Depreciation and amortisation 56 288
EBITDA 1,883 2,337
Adjusted for:
Joint venture payable write off (149) -
Foreign exchange loss / (gain) 52 (168)
Adjusted EBITDA 1,786 2,169
4. Tax
Year ended Year ended
31 Dec 24 31 Dec 23
£'000 £'000
Analysis of (charge) / credit in the year
Current tax:
Current year State tax - US (8) (5)
Adjustment to prior year charge - UK (3) (3)
Adjustment to prior year charge - US (19) -
Deferred tax (charge) / credit (516) 275
Taxation (546) 267
The Group has accumulated tax losses at 31 December 2024 in the UK and the US
of £12.0m (2023: £13.9m) and $5.7m (2023: $7.0m) respectively. These losses
have been agreed with the tax authorities in the UK and US. The Board intends
to make use of all losses wherever possible.
Management has utilised £4.8m of Group losses to recognise a £1.1m (2023:
£1.6m) deferred tax asset at year end, which is based on expected taxable
profits over the next five years. Management do not believe they have adequate
information to make an assessment of utilisation beyond five years.
At year end there are unutilised tax losses of £9.3m and $3.1m in the UK and
US respectively. From 1 April 2023, the UK corporation tax rate applicable to
companies with taxable profits above £250,000 is 25%. Companies with profits
below £50,000 pay tax at 19%. Those with taxable profits between £50,000 and
£250,000 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:
Reconciliation of tax expense Year ended Year ended
31 Dec 24 31 Dec 23
£'000 £'000
Profit on ordinary activities before tax 1,825 2,032
Tax at the UK corporation tax rate of 25% (2023: 23.5%) 456 477
Income / expenses not allowable for tax purposes 7 (22)
Unrelieved losses carried forward 39 31
Utilisation of losses (476) (525)
Difference in timing of allowances (15) 42
Deferred tax movement 516 (275)
Adjustment to tax charge in respect of prior years 19 5
Total taxation 546 (267)
UK corporation tax is calculated at 25% (2023: 23.5%) of the estimated
assessable profit for the year. Taxation for other jurisdictions is calculated
at the rates prevailing in the respective jurisdictions.
5. 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 estimates that there are a further 347,451 ordinary shares
(2023: 297,097) in respect of share options.
Year ended Year ended
31 Dec 2024 31 Dec 2023
£'000 £'000
Attributable profit 1,279 2,299
Adjustments for:
Foreign exchange 52 (168)
Write back of Joint venture creditor (149) -
Deferred tax movement 516 (275)
Adjusted attributable profit 1,698 1,856
Weighted average number of ordinary shares used in basic earnings per share 14,523 14,535
('000)
Shares deemed to be issued in respect of share-based payments 347 297
Weighted average number of ordinary shares used in dilutive earnings per share 14,870 14,832
('000)
Basic profit per share arising from both total and continuing operations 8.81p 15.82p
Dilutive profit per share arising from both total and continuing operations 8.60p 15.50p
Adjusted basic profit per share from both total and continuing operations 11.69p 12.77p
Dividends
On 19 July 2024 the Company paid a final dividend of 2.6 pence per share for
the year ended 31 December 2023. On 4 November 2024 an interim dividend of 1.5
pence per share was paid in respect of the year ended 31 December 2024.
After the year end, the Directors declared their intention to pay a final
dividend of at 2.6 pence for the year ended 31 December 2024.
6. Share capital
Year ended Year ended
31 Dec 2024 31 Dec 2023
£'000 £'000
Issued and fully paid:
15,098,125 (2023: 15,123,125, 2022: 15,123,125) ordinary shares of 10p each 1,510 1,512
There is one class of ordinary shares and holders are entitled to receive
dividends as declared from time to time and are entitled to one vote per share
at shareholder meetings.
Share transactions
During the year, the Company purchased 25,000 ordinary shares at 114 pence per
share (2023: nil). These shares were subsequently cancelled. There were no
shares issued during the year (2023: nil).
7. 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 2024 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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