REG - itim Group PLC - Interim Results
28/09/2023 07:00
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RNS Number : 8925N itim Group PLC 28 September 2023
28 September 2023
itim Group plc
("itim" or the "Company and with its subsidiaries the Group")
Interim Results for the six months ended 30 June 2023
itim Group plc (AIM:ITIM) a SaaS based technology company that enables store
based retailers to optimise their businesses to improve financial performance,
is pleased to announce its unaudited interim results for the 6 months ended 30
June 2023.
Financial Highlights
· Group revenue of £7.4m (Half Year 2022 ("HY22"): £6.8m, Full Year
2022("FY22"): £14.0m)
· Booked Recurring Revenue of £6.4m (HY22: £5.6m, FY22: £11.8m)
· Recurring revenue percentage of Group revenue was 86% (HY22: 82%, FY22: 84%)
· Annual recurring revenue ("ARR")(1) of £13.2m (HY22: £12.6m, FY22: £13.2m)
· Annual growth in ARR(1) 5% (HY22: £19%, FY22: 19%)
· Adjusted EBITDA(2) (£0.2)m (HY22: £0.3m, FY22: £0.2m)
· Adjusted EBITDA(2) margin (3)% (HY22: 5%, FY22: 2%)
· (Loss)/profit before tax (£1.1)m (HY22: (£0.4)m, FY22: (£1.3)m)
· Cash £2.7m (HY22: £5.3m, FY22: £3.9m)
· Earnings per share (3.02) pence (HY22: (1.20) pence, FY22: (2.20) pence)
· Adjusted Earnings per share(3) (3.02) pence (HY22: (1.06) pence, FY22: (2.01)
pence)
Full year numbers quoted above are audited and half year numbers quoted above
are unaudited
1. Annual recurring revenue
2. EBITDA has been adjusted to exclude share-based payment charges,
exceptional items, along with depreciation, amortisation, interest and tax
from the measure of profit.
3. The profit measure has been adjusted to exclude exceptional items and share
option charge
Enquiries:
Itim Group plc Ali Athar, CEO 0207 598 7700
Ian Hayes CFO
WH Ireland (NOMAD & Broker) Katy Mitchell 0207 220 1666
Harry Ansell
Darshan Patel
IFC Advisory Graham Herring 0207 3934 6630
Florence Chandler
ABOUT ITIM
itim was established in 1993 by its founder, and current Chief Executive
Officer, Ali Athar. itim was initially formed as a consulting business,
helping retailers effect operational improvement. From 1999 the Company began
to expand into the provision of proprietary software solutions and by 2004 the
Company was focused exclusively on digital technology. itim has grown both
organically and through a series of acquisitions of small, legacy retail
software systems and associated applications which itim has redeveloped to
create a fully integrated end to end Omni-channel platform.
CEO Statement
The Group is pleased to report an increase in revenue in the period despite
the well documented challenging market conditions for retail companies.
Revenue for the six month period was £7.4m (HY22: £6.8m) an increase of 9%,
of which recurring revenues were £6.4m (HY22: £5.6m) representing 86% of
sales and underpinning future sales. Adjusted EBITDA (EBITDA excluding
share-based payment charges and exceptional items) fell to a loss of £0.2m
(HY22: £0.3m) as a result of investment in R&D and in building and
protecting our staff base. Cash balances totalled £2.7m at the period end
(FY22: £5.3m) reflecting investment in anticipated product development.
Adjusted loss per share was 3.02p (HY22: loss 1.2p).
The wider retail market has remained challenging for most operators however
there are signs that omni channel retailers are beginning to fare better than
their peers. With this in mind, the Group relaunched its consultancy business
as a complement to its technology offering and to enable our customers to gain
the maximum benefit from it.
The Group continues to benefit from its well established client base with 80
customers resulting in strong recurring revenues. Whilst new business remains
a priority, the Group has significant opportunity to upsell and cross sell
within its customer base enabling organic growth.
The Directors believe that the investment in the business over the past two
years has positioned itim for future growth, created essential USPs in the
market and broadened its offering with the potential to increase revenues from
new and existing customers.
As a result of this investment and in the Directors' opinion:
1. itim is one of a few companies that can deliver a single unified
sales (commerce) platform to support omni-channel retailers. Retailers no
longer need to have separate platforms for selling in stores (EPOS), or
selling online (e-commerce), or selling to B2B, or wholesale customers - itim
can support all these in one platform. This is seen as a significant USP for
omni channel retailing.
2. itim has enhanced its merchandising, stock management and
optimisation solutions, again to support retailers selling across multiple
channels. Numerous sales channels makes this much more complex, which itim
is well positioned to be able to address.
3. itim is a market leader in Price and Promotions optimisation
helping retailers increase cash generation, by either reducing the markdowns
and discounts they give away or improving recoveries from suppliers through
its advanced invoice matching, supplier funding tracking and a supplier
payments platform.
4. itim is a leader in improving digital supplier collaboration
through a series of portal applications built on its Electronic Data
Interchange history. This is coming to the fore due to the rise in
marketplaces.
The Board is resolutely focused on profitability and creating shareholder
value and is taking the necessary steps to reduce investment in product,
driving services revenues and returning the business to cash generation.
Whilst this will impact the rate of subscription revenue growth it should
result in higher margins and increased profitability.
Finally, I would like to thank our employees and our partners for the
continued support they give to this business and the commitment and faith they
show that we will be a successful business.
Consolidated Statement of Comprehensive Income
for the half-year ended 30 June 2023
Six month period ended Six month period ended Year ended
30 June 2023 30 June 2022 31 December 2022
Unaudited Unaudited Audited
Notes £000 £000 £000
Continuing operations
Revenue 7,425 6,784 14,034
Cost of sales (5,514) (4,588) (9,538)
Gross profit 1,911 2,196 4.496
Administrative expenses (2,108) (1,860) (4,285)
EBITDA (197) 336 211
Amortisation of intangible assets (574) (443) (889)
Share option charge - (45) (58)
Depreciation (23) (20) (42)
Depreciation of leased assets (275) (184) (452)
Loss from operations (1,069) (356) (1,230)
Other interest - right of use assets (21) (21) (45)
Loss before taxation (1,090) (377) (1,275)
Taxation 149 2 589
Loss for the period/year (941) (375) (686)
Other comprehensive income
Exchange differences on retranslation of foreign operations (77) 51 124
Total comprehensive income for the period/year net of tax (1,018) (324) (562)
Earnings per share
Basic 2 (3.02p) (1.20p) (2.20)p
Diluted 2 (3.02p) (1.20p) (2.20)p
Consolidated Statement of Financial Position
as at 30 June 2023
As at As at As at
30 June 2023 30 June 2022 31 December 2022
Unaudited Unaudited Audited
£000 £000 £000
Non-current assets
Intangible assets 10,349 9,233 10,069
Plant and equipment 586 508 721
Right-of-use assets 380 581 442
Deferred tax 83 4 164
11,398 10,326 11,396
Current assets
Trade and other receivables 4,537 3,512 4,603
Cash and cash equivalents 2,697 5,295 3,922
7,234 8,807 8,525
Total assets 18,632 19,133 19,921
Current liabilities
Trade and other payables (5,673) (4,866) (5,776)
Right-of-use liability (214) (288) (297)
(5,887) (5,154) (6,073)
Non-current liabilities
Trade and other payables due in more than one year (444) (355) (540)
Right-of-use liability (209) (359) (201)
Deferred tax (633) (563) (630)
(1,286) (1,277) (1,371)
Total liabilities (7,173) (6,431) (7,444)
Net Assets 11,459 12,702 12,477
Capital and reserves
Called up share capital 1,561 1,561 1,561
Share premium account 7,398 7,398 7,398
Share options reserve 513 500 513
Capital redemption reserve 1,103 1,103 1,103
Foreign exchange reserve 73 77 150
Retained profit/(loss) 811 2,063 1,752
Shareholders' funds 11,459 12,702 12,477
Consolidated Statement of Cash Flow
for the half-year ended 30 June 2023
Six month period ended Six month period ended Year ended
30 June 2023 30 June 2022 31 December 2022
Unaudited Unaudited Audited
£000 £000 £000
Cash flows from operating activities
Profit after taxation (941) (375) (686)
Adjustments for:
Taxation (149) (3) (589)
Share option charge - 45 58
Other interest on leases 21 21 45
Amortisation and depreciation 872 647 1,383
Cash flows from operations before working capital changes (197) 335 211
Movement in trade and other receivables 305 337 (384)
Movement in trade and other payables (59) (383) 371
Cash generated from operations 49 289 198
Corporation tax (23) (42) 280
Net cash flow from operating activities 26 247 478
Cash flow from investing activities
Capital expenditure on intangible assets (906) (907) (2,140)
Purchase of plant and equipment (24) (28) (49)
Net cash flow from investing activities (930) (935) (2,189)
Cash flow from financing activities
Interest repayments (16) - -
Payment of lease liabilities (266) (194) (438)
Loan issued (18) - (140)
Net cash flow from financing activities (300) (194) (578)
Net decrease in cash and cash equivalents (1,204) (882) (2,289)
Cash and cash equivalents at beginning of year 3,922 6,172 6,172
Exchange (losses)/gains on cash and cash equivalents (21) 5 39
Cash and cash equivalents at end of year 2,697 5,295 3,922
Consolidated Statement of Changes in Equity
as at 30 June 2023
Share Share Share option reserve Capital Redemption Reserve Foreign exchange reserve Retained Total
capital Premium Earnings Equity
£000 £000 £000 £000 £000 £000 £000
At 1 January 2023 1,561 7,398 513 1,103 150 1,752 12,477
Comprehensive income for the year - - - - - (941) (941)
Foreign exchange movement - - - - (77) - (77)
Total comprehensive income - - - - (77) (941) (1,018)
At 30 June 2023 (unaudited) 1,561 7,398 513 1,103 73 811 11,459
At 1 January 2022 1,561 7,398 455 1,103 26 2,438 12,981
Comprehensive income for the year - - - - (375) (375)
Foreign exchange movement - - - - 51
51
Total comprehensive income - - - 51 (375) (324)
Share option charge - - 45 - - - 45
At 30 June 2022 (unaudited) 1,561 7,398 500 1,103 77 2,063 12,702
At 1 January 2022 1,561 7,398 455 1,103 26 2,438 12,981
- - - - - (686) (686)
Comprehensive income for the year
Foreign exchange movement - - - - 124 - 124
Total comprehensive income - - - 124 (686) (562)
Share option charge - - 58 - - - 58
At 31 December 2022 (audited) 1,561 7,398 513 1,103 150 1,752 12,477
Notes to the Financial Information
1. General information
itim Group plc is a public limited Company ("Company") incorporated in the
United Kingdom under the Companies Act 2006 (registration number 03486926).
The Company is domiciled in the United Kingdom and its registered address is
2(nd) Floor, Atlas House, 173 Victoria Street, London SW1E 5NH. The Company's
ordinary shares are admitted to trading on the AIM market of the London Stock
Exchange ("AIM").
The Group's principal activities have been the provision of technology
solutions to help clients drive improvements in efficiency and
effectiveness.
The Group's interim report and accounts for the six months ended 30 June 2023
have been prepared using the recognition and measurement principles of
International Financial Reporting Standards and Interpretations as endorsed by
the European Union (collectively "Adopted IFRS").
These interim financial statements for the six months ended 30 June 2023 have
been prepared in accordance with the AIM Rules for Companies and should be
read in conjunction with the financial statements for the year ended 31
December 2022, which have been prepared in accordance with IFRS as adopted by
the European Union. The interim report and accounts do not include all the
information and disclosures required in the annual financial statements.
The interim report and accounts have been prepared on the basis of the
accounting policies, presentation and methods of computation as set out in the
Group's December 2022 Annual Report and Accounts, except for those that relate
to new standards and interpretations effective for the first time for periods
beginning on (or after) 1 January 2023, and will be adopted in the 2023 annual
financial statements.
The interim report and accounts do not comprise statutory accounts within the
meaning of section 434 of the Companies Act 2006. These interim financial
statements were approved by the Board of Directors on 22 September 2023. The
results for the six months to 30 June 2023 and the comparative results for the
six months to 30 June 2022 are unaudited. The figures for the period ended
31 December 2022 are extracted from the audited statutory accounts of the
Group for that period.
The Directors believe that a combination of the Group's current cash,
projected revenues from existing and future contracts will enable the Group to
meet its obligations and to implement its business plan in full. Inherently,
there can be no certainty in these matters, but the Directors believe that the
Group's internal trading forecasts are realistic and that the going concern
basis of preparation continues to be appropriate.
2. Earnings per share
Basic and diluted (loss)/earning per share is calculated by dividing the
(loss)/profit attributable to owners of the parent by the weighted average
number of ordinary shares in issue during the period. For the avoidance of
doubt the deferred shares have been excluded as they have no rights to profits
or capital. The Company's share options have a dilutive effect over the two
year period.
6 months ended 30 June 2023 6 months ended 30 June 2022 Year ended
Unaudited Unaudited 31 December 2022
Audited
£000 £000 £000
Loss after tax for the year (941) (375) (686)
Exceptional items - - -
Share option charge - 45 58
Adjusted loss after tax for the year (941) (330) (628)
Weighted average number of shares
Basic - 000 31,211 31,211 31,211
Potentially dilutive share options - 000 3,657 3,657 3,657
Diluted average number of shares - 000 34,868 34,868 34,868
Earnings per share:
Basic - pence on continuing operations (3.02) (1.20) (2.20)
Diluted - pence on continuing operations (3.02) (1.20) (2.20)
Adjusted earnings - Basic - pence on continuing operations (3.02) (1.06) (2.01)
Adjusted earnings - Diluted - pence on continuing operations (3.02) (1.06) (2.01)
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