REG - Ingenta PLC - Half-year Report

IngentaAnnouncement

20/09/2021 07:00

RNS Number : 2142M
  
Ingenta PLC
  
20 September 2021
  
 

20 September 2021
 
Ingenta plc
 
Interim Results
 
Ingenta plc (AIM: ING), ("Ingenta", the "Company" or the "Group") a leading provider of world-class software and services to the global publishing industry, is pleased to announce its unaudited interim results for the six months to 30 June 2021.
 
 
Financial Key Points
 
·      Group revenues £5.1m (2020: £5.2m)
·      85% of Group revenues recurring in nature (2020: 82%)
·      Gross profit margin 47% (2020: 44%)
·      Adjusted EBITDA* up 34% to £0.7m (2020: £0.6m)
·      Cash from operations up 10% to £1.3m (2020: £1.2m)
·      Cash balances increased to £3.1m (31 December 2020: £2.3m) 
·      Cash generation of £0.8m (2020: £0.9m) 
·      Earnings per share of 2.26 pence (2020: 2.10 pence)
·      0.235m shares repurchased under share buy-back programme
·      Introduction of a progressive dividend policy with an interim 1p per share payment
 
Operational Key Points
 
·      2 Edify deployments completed in the period
·      2 IP Management deployments in the period
·      Major infrastructure project completed to improve the resilience of hosting services
·      Company profile substantially de-risked with an ongoing annual cost base of £9.5m
 
*Earnings before Interest, Tax, Depreciation and Amortisation is calculated before foreign exchange differences and restructuring costs. See Statement of Comprehensive Income for reconciliation
As previously announced on 15 September 2021, Ingenta will be presenting via the Investor Meet Company platform on 23 September 2021 at 15.30 (BST). To sign up to the Ingenta presentation for free via Investor Meet Company please click the following link: https://www.investormeetcompany.com/ingenta-plc/register-investor.
 
Martyn Rose, Chairman of Ingenta plc, commented:
 
"The results for the first half of the year have been solid with an underlying theme of improved operational efficiency. The Group has embraced a flexible working model and invested in the necessary infrastructure to further improve resiliency and the breadth of our service offering. In tandem, a new sales and marketing approach is being rolled out to widen our reach and improve penetration into adjacent vertical markets. The current economic climate has somewhat dampened results in this area, but we remain optimistic that deals can be concluded in the coming months.
 
"Additionally, the recurring revenue base of the Group continues to improve and is the result of a reinvigorated focus on project delivery along with customer uptake of a broad layer of service options that are increasingly relevant to businesses changing needs.
 
"Financially, I'm pleased to report the Group has continued to deliver strong operating cash inflows of £1.3m (2020: £1.2m) which has enabled us to invest in forward looking infrastructure to deliver our services whilst also facilitating a share buyback programme. Given our consistent levels of cash generation and balance sheet strength, we are aiming to instigate a dividend policy which pays out 50% of normalised annual free cashflows. Consequently, we intend to pay an interim dividend of 1p per share for the 2021 financial year with a final dividend to be communicated in due course.
 
Certain information contained in this announcement would have been deemed 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, until the release of this announcement.
 
 
For further information please contact: 
 
Ingenta plc                                           Tel: 01865 397 800
 
Scott Winner / Jon Sheffield
 
Cenkos Securities plc                          Tel: 0207 397 8900
 
Nicholas Wells / Katy Birkin
 
 
 
Financial Review
 
The Group continues to focus on operational enhancements which have increased profitability in the first half of the year. Recurring revenue percentages remain strong at 85% and are being driven by the efficient implementation of projects plus the continued uptake of Vista as a Service.
 
Statement of Comprehensive Income
 
Although Group revenue remained flat at £5.1m (2020: £5.2m), efficiency gains have delivered improved profitability with growth in our reported gross profit of £2.4m (2020: £2.3m). Sales and marketing expenses were also stable but there has been a change in strategy as the Group focus on more digital campaigns in light of Covid restrictions. Administrative expenses increased slightly to £1.7m (2020: £1.6m) and reflect the investment in a Head of Professional Services but also include a £150,000 uplift in depreciation. The depreciation increase represents the investments made in infrastructure to support and grow the Group's hosting capabilities which further boosts recurring revenues. 
 
Profit from operations remained at £0.4m (2020: £0.4m) and, with negligible interest, taxation and exchange costs, the Group delivered earnings per share of 2.26 pence (2020: 2.10 pence).
 
Statement of Cash Flows and Financial Position
 
The Group's cash inflow from operations improved during the period and amounted to £1.3m (2020: £1.2m). Other significant expenditure included £0.2m of lease payments on equipment to bolster the hosting infrastructure as mentioned above. As previously announced, the Group has continued to exercise its share buyback authority and purchased a further 235,000 shares for a combined consideration of £0.2m (2020: nil). Closing cash balances amounted to £3.1m (2020: £3.5m).
 
Outlook
 
The Group will continue its strategy of driving efficiency gains and we anticipate further benefits as we renegotiate infrastructure contracts and look to leverage offshore resources. Recurring revenue remains strong and is being driven by a streamlined implementation methodology, which was successfully rolled out in our Content business and is now being deployed across Commercial projects. Whilst new sales activity remains difficult to predict, we have a pipeline of new opportunities from both existing and new customers which we look forward to converting in the coming months.
 
 
Jon Sheffield 
Chief Financial Officer
 
 
Unaudited Condensed Consolidated Interim Statement of Comprehensive Income
 




 


 


 


 




 


 


Unaudited
Six months ended


Unaudited
Six months ended




 


 


30 June 2021


30 June 2020




 


Note


£'000


£'000




 


 


 


 




Revenue


 


5,106


5,208




Cost of sales


 


(2,692)


(2,923)




Gross profit


 


2,414


2,285




 


 


 


 




Sales and marketing expenses


 


(353)


(328)




Administrative expenses 


 


(1,673)


(1,587)




 


 


 


 




Profit from operations


 


388


370




 


 


 


 




 


 


 


 




Finance costs


 


(14)


(8)




 


 


 


 




Profit before tax 


 


374


362




 


 


 


 




Tax


 


-


9




 


 


 


 




Retained profit for the period


 


374


371




 


 


 


 




 


 


 


 




Other comprehensive expenses which will be reclassified subsequently to profit or loss: 


 


 


 




 


 


 


 




Exchange differences on translating foreign operations


 


2


(17)




 


 


 


 




Total comprehensive profit for the period


 


376


354




 


 


 


 




Basic profit per share - pence


4


2.26


2.10




Diluted profit per share - pence


4


2.18


2.02




 


 


 


 




 


 


 


 




 


 


 


 




Analysis of profit from operations:
 


 


 


 




Profit before net finance costs, tax, depreciation and amortisation, restructuring costs and foreign exchange gains and losses (adjusted EBITDA)


 


748


560




Depreciation


 


(293)


(139)




Amortisation


 


(50)


(50)




Foreign exchange gain / (loss)


 


(14)


32




Restructuring costs


 


(3)


(33)




Profit from operations


 


388


370




 


 


 


 




 
 
Unaudited Condensed Consolidated Interim Statement of Financial Position
 




 


 


 


 




 


 


Unaudited
30 June 2021


Unaudited
30 June 2020




 


Note


£'000


£'000




Non-current assets


 


 


 




  Goodwill


3


2,661


2,661




  Other intangible assets


3


8


108




  Property, plant & equipment


 


889


465




 


 


3,558


3,234




Current assets


 


 


 




  Trade and other receivables


5


1,434


1,650




  Cash and cash equivalents


 


3,102


3,537




 


 


4,536


5,187




 


 


 


 




Total assets


 


8,094


8,421




 


 


 


 




Equity


 


 


 




  Share capital


 


1,692


1,692




  Merger reserve


 


11,055


11,055




  Reverse acquisition reserve


 


(5,228)


(5,228)




  Translation reserve


 


(837)


(897)




  Share option reserve


 


80


42




  Retained earnings


 


(2,982)


(2,760)




 


 


3,780


3,904




Non-current liabilities


 


 


 




  Deferred tax liability


 


2


22




  Leases


 


336


75




 


 


338


97




Current liabilities


 


 


 




  Trade and other payables


6


1,817


1,997




  Deferred income


 


2,159


2,423




 


 


3,976


4,420




 


 


 


 




Total equity and liabilities


 


8,094


8,421




 


 


 


 




 


 


 


 




 
 
Unaudited Condensed Consolidated Interim Statement of Changes in Equity
 




 


Share capital


Share premium


Merger reserve


Reverse acquisition reserve


Translation reserve


Share option reserve


Retained Earnings


Total




 


£'000


£'000


£'000


£'000


£'000


£'000


£'000


£'000




 


 


 


 


 


 


 


 


 




Balance at 1 January 2021


1,692


0


11,055


(5,228)


-839


61


(3,175)


3,566




 


 


 


 


 


 


 


 


 




Shares bought back into treasury


-


-


-


-


-


-


(181)


(181)




Share based payment expense


-


-


-


-


-


19


-


19




 


 


 


 


 


 


 


 


 




Transactions with owners


0


0


0


0


0


19


-181


-162




 


 


 


 


 


 


 


 


 




Profit for the period


-


-


-


-


-


-


374


374




 


 


 


 


 


 


 


 


 




Other comprehensive income:


 


 


 


 


 


 


 


 




Exchange differences on translation of foreign operations


-


-


-


-


2


-


-


2




Total comprehensive income / (expense) for the period


-


-


-


-


2


-


374


376




 


 


 


 


 


 


 


 


 




Balance at 30 June 2021


1,692


-


11,055


-5,228


(837)


80


(2,982)


3,780




 
 
 




 


Share capital


Share premium


Merger reserve


Reverse acquisition reserve


Translation reserve


Share option reserve


Retained Earnings


Total




 


£'000


£'000


£'000


£'000


£'000


£'000


£'000


£'000




 


 


 


 


 


 


 


 


 




Balance at 1 January 2020


1,692


-


11,055


(5,228)


(880)


23


(3,131)


3,531




 


 


 


 


 


 


 


 


 




Share based payment expense


-


-


-


-


-


19


-


19




 


 


 


 


 


 


 


 


 




Transactions with owners


-


-


-


-


-


19


-


19




 


 


 


 


 


 


 


 


 




Profit for the period


-


-


-


-


-


-


371


371




 


 


 


 


 


 


 


 


 




Other comprehensive income:


 


 


 


 


 


 


 


 




Exchange differences on translation of foreign operations


-


-


-


-


(17)


-


-


(17)




Total comprehensive income / (expense) for the period


-


-


-


-


(17)


-


371


354




 


 


 


 


 


 


 


 


 




Balance at 30 June 2020


1,692


-


11,055


(5,228)


(897)


42


(2,760)


3,904




 
 
Unaudited Condensed Consolidated Interim Statement of Cash Flows
 




 


 


 


 




 


 


Unaudited
Six months ended


Unaudited
Six months ended




 


 


30 June 2021
 


30 June 2020
 




 


Note


£'000


£'000




 


 


 


 




Profit before tax


 


374


362




 


 


 


 




Adjustments for:


 


 


 




  Depreciation and amortisation


 


343


189




  Share based payment expense


 


19


19




  Interest expense


 


14


8




  Unrealised foreign exchange differences


 


2


(17)




  Decrease in trade and other receivables


 


784


1,560




  Decrease in trade and other payables


 


(260)


(961)




 


 


 


 




Cash inflow from operations


 


1,276


1,160




 


 


 


 




  Tax Paid


 


-


-




Net cash inflow from operating activities


 


1,276


1,160




 


 


 


 




Cash flows from financing activities


 


 


 




  Shares bought back into treasury


 


(181)


-




  Payment of leases


 


(239)


(151)




  Interest paid


 


(14)


(8)




Net cash used in financing activities


 


(434)


(159)




 


 


 


 




Cash flows from investing activities


 


 


 




  Purchase of property, plant and equipment


 


(63)


(65)




Net cash used in investing activities


 


(63)


(65)




 


 


 


 




Net increase in cash and cash equivalents


 


779


936




 


 


 


 




Cash and cash equivalents at beginning of period


 


2,323


2,601




 


 


 


 




Cash & cash equivalents at end of period


 


3,102


3,537




 
 
 
Notes to the Unaudited Interim Report for the six months ended 30 June 2021
1.   Nature of operations and general information

 
Ingenta plc (the "Company") and its subsidiaries (together "the Group") is a provider of technology and supporting services to content providers and publishers. The nature of the Group's operations and its principal activities are set out in the full annual financial statements.
 
The Company is incorporated in the United Kingdom under the Companies Act 2006. The Company's registration number is 00837205 and its registered office is 8100 Alec Issigonis Way, Oxford OX4 2HU. The condensed consolidated interim financial statements were authorised for issue by the Board of Directors on 20 September 2021.
 
The financial information set out in this interim report does not constitute statutory accounts as defined in section 404 of the Companies Act 2006. The Group's statutory financial statements for the year ended 31 December 2020, prepared under IFRS as adopted by the European Union, have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain a statement under section 498 (2) or section 498 (3) of the Companies Act 2006.
2.   Basis of preparation

 
These unaudited condensed consolidated interim financial statements are for the six months ended 30 June 2021. They have been prepared following the recognition and measurement principles of IFRS in conformity with the requirements of the Companies Act 2006. They do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2020.
 
These condensed consolidated interim financial statements have been prepared on the going concern basis under the historical cost convention and have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year ended 31 December 2020.
 
The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these consolidated interim financial statements.
 
A detailed set of accounting policies can be found in the annual accounts available on our website, www.ingenta.com or by writing to the Company Secretary at the registered office as above.
 
3.   Goodwill and Intangibles
 
Full details of the Group's policies on Goodwill and Intangibles is presented in the financial statements for the year ended 31 December 2020.
 
4.   Profit per share
 
Basic profit per share is calculated by dividing the profit attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.
 
For diluted profit per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares.
 
 




 


Six months ended


Six months ended




 


30 June 2021


30 June 2020




 


 


 




Attributable profit (£'000)


376


354




 


 


 




Weighted average number of ordinary basic shares (basic)


16,625,214


16,853,505




 


 


 




Weighted average number of ordinary shares (diluted)


17,306,459


17,534,750




 


 


 




Profit per share (basic) arising from both total and continuing operations


2.26p


2.10p




 


 


 




Profit per share (dilutive) arising from both total and continuing operations


2.18p


2.02p




 
5.   Trade and other receivables
 
Trade and other receivables comprise the following:
 




 


 


 


 


 




 


 


30 June 2021


 


30 June 2020




 


 


£'000


 


£'000




 


 


 


 


 




Trade receivables - gross


 


1,148


 


1,318




Less: provision for impairment of trade receivables


 


(142)


 


(161)




Trade receivables - net


 


1,006


 


1,157




Other receivables


 


76


 


69




Prepayments and accrued income


 


352


 


424




 


 


1,434


 


1,650




 


 


 


 


 




 
 
6.   Trade and other payables
 
Trade payables comprise the following:
 
 




 


 


30 June 2021


 


30 June 2020




 


 


£'000


 


£'000




 


 


 


 


 




Trade payables


 


211


 


470




Social security and other taxes


 


383


 


374




Other payables


 


631


 


660




Accruals


 


592


 


493




 


 


 


 


 




 


 


1,817


 


1,997




 


 


 


 


 




 
7.   Contingencies and commitments
 
There were no contingencies or commitments at the end of this or the comparative period. 
8.   Post balance sheet events
 
There were no material events subsequent to the end of the interim reporting period that have not been reflected in the interim financial statements.
9.   Copies of the Interim Financial Statements
 
A copy of the interim statement is available on the Company's website, www.ingenta.com, and from the Company's registered office, 8100 Alec Issigonis Way, Oxford OX4 2HU.
 
 

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