REG - itim Group PLC - Interim Results
24/09/2024 07:00
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RNS Number : 3245F itim Group PLC 24 September 2024
24 September 2024
itim Group plc
("itim" or the "Company" and with its subsidiaries the "Group")
Interim Results for the six months ended 30 June 2024
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 six months ended
30 June 2024.
Financial Highlights
· Group revenue increased by 19% at £8.8m (HY23: £7.4m), driven by both new
contract wins and higher levels of service revenue
· Annual recurring revenue ("ARR")(1) of £13.2m
· Significant increase in adjusted EBITDA(2) to £1.2m (HY23: loss of (£0.2m),
FY23: £0.7m) through increased sales activity in H1 24, while maintaining a
tight control of costs
· Materially improved adjusted EBITDA(2) margin of 13% (HY23: (3)%, FY23: 4%)
· (Loss)/profit before tax (£0.1m) (HY23: (£1.1m), FY23: (£1.1m))
· Adjusted Earnings per share(3) 0.18 pence (HY23: (3.02p), FY23: (2.86p))
· Strong cash generation in the period, resulting in net cash of £3.0m (FY23:
£1.9m, HY23: £2.7m)
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
Ali Athar, CEO of itim, commented: "I am pleased to report that itim is
gaining significant traction in the market. Our half-year results demonstrate
measurable progress across key metrics and we are delighted to report a
significant increase in revenue, a positive EBITDA return and a strong cash
position.
"As a consequence of the positive momentum, including new contract wins, in
addition to encouraging trading since the beginning of H2, the Board
anticipates delivering full year results ahead of current market
expectations."
The information contained within this announcement is deemed to constitute
inside information as stipulated under the retained EU law version of the
Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK
law by virtue of the European Union (Withdrawal) Act 2018. The information is
disclosed in accordance with the Company's obligations under Article 17 of the
UK MAR. Upon the publication of this announcement, this inside information is
now considered to be in the public domain.
Enquiries:
Itim Group plc Ali Athar, CEO 0207 598 7700
Ian Hayes CFO
Zeus (NOMAD & Broker) Katy Mitchell 0203 829 5000
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
I am pleased to report that our Company is gaining significant traction in the
market. Our half-year results demonstrate measurable progress across key
metrics. In the three years since our successful IPO, we have strategically
invested the capital raised to expand our product portfolio and enhanced our
core capabilities.
Revenue for the six month period was £8.8m (HY23: £7.4m) an increase of 19%,
of which recurring revenues were £6.6m (HY23: £6.4m) representing 75% of
sales and underpinning future sales. Adjusted EBITDA (EBITDA excluding
share-based payment charges and exceptional items) increased significantly to
£1.2m from a loss of £0.2m last year. The loss before tax has been reduced
materially to £0.1m (HY23: loss £1.1m). Cash balances also improved to
£3.0m at the period end (FY23: £1.9m). Adjusted profit per share was 0.18p
(HY23: loss 3.02p). (For adjustments see Financial Highlights).
Our recent announcements underscore the growing confidence that both existing
customers and prospects are placing in our platform. This positive momentum is
a testament to our team's dedication and the value we deliver to our clients.
We have also refined our branding and positioning to better communicate our
unique value proposition. When retail executives ask us, who we are, and what
we do, and what makes us different:
The answer is clear.
We are 'retail engineers' specialising in the transformation of retail
businesses into high-performing organisations through technology enablement.
Our mission is to guide retailers towards omni-channel excellence and
facilitate their transition to a customer-centric Unified Retail Business
Model.
Our definition of high performance is ambitious yet achievable: for our
clients - we target sales increases of 30-50% and profit improvements of
50-100%. While these figures may seem bold, our case studies demonstrate their
feasibility. We believe that recent technological advancements have created a
once-in-a-decade opportunity for a step change in retail productivity.
Our Approach
We focus on five areas to drive transformational change:
· Enhanced Customer targeting and engagement
· End-to-end process integration for increased efficiency and
effectiveness
· Elevated omni-channel service and convenience to improve customer
experience
· Digital connectivity with consumers (mobile) and suppliers
(marketplace strategies)
· AI-driven optimisation of critical processes:
o Sales & Marketing
o The Assortment (Merchandising)
o The intake of stock
o Stock and space distribution
o Price and promotions
These efforts culminate in a significant performance uplift for our clients.
This is enabled by our UNIFY platform, with its four pillars of sales, stock,
price & supply, which supplements or replaces elements of the retailer's
system stack, as appropriate. We have 80 customers using elements or the
end-to-end platform. We do this cost-effectively with minimum CAPEX
expenditure.
Our Unique Market Position
Our approach distinguishes us from competitors in several key ways:
1. As retail engineers, we go beyond consulting to provide actionable
solutions
2. We build upon retail expertise and best practices to deliver tangible
results
3. Our focus is on the end-to-end operating model, and end-to-end
processes, which is different from competitors, who as best of breed
providers, focus on functional excellence
4. We are not software salesmen, but use our UNIFY platform to
supplement and replace part of a retailer's system stack to deliver end-to-end
excellence
5. Our emphasis is on delivering outcomes, with software serving as a
critical enabler
The recent appointment of a former McKinsey partner as non-executive Chairman
reinforces our commitment to delivering high-value solutions and strengthening
our services revenue. This strategic move, coupled with our growing
subscription revenues should take us to the goal of becoming cash generative
again and over the coming years see more retailers move onto our platform.
In conclusion, I am excited about the future of our Company. We have a clear
vision, a defined purpose, a unique market position, and a growing base of
supportive customers. Our value proposition is both exciting and tangible, and
I am confident in our ability to drive continued growth and success in the
retail transformation space.
Outlook
As a consequence of the positive momentum, including new contract wins, in
addition to encouraging trading since the beginning of H2, the Board
anticipates delivering full year results ahead of current market expectations.
Consolidated Statement of Comprehensive Income
for the half-year ended 30 June 2024
Six month period ended Six month period ended Year ended
30 June 2024 30 June 2023 31 December 2023
Unaudited Unaudited Audited
Notes £000 £000 £000
Continuing operations
Revenue 8,835 7,425 16,130
Cost of sales (5,451) (5,514) (11,090)
Gross profit 3,384 1,911 5,040
Administrative expenses (2,233) (2,108) (4,356)
EBITDA 1,151 (197) 684
Amortisation of intangible assets (702) (574) (1,146)
Share option charge - - -
Depreciation (30) (23) (49)
Depreciation of leased assets (299) (275) (545)
Profit/(Loss) from operations 120 (1,069) (1,056)
Exceptional (141) - -
Other interest - right of use assets (52) (21) (41)
Loss before taxation (73) (1,090) (1,097)
Taxation (12) 149 205
Loss for the period/year (85) (941) (892)
Other comprehensive income
Exchange differences on retranslation of foreign operations (57) (77) (56)
Total comprehensive income for the period/year net of tax (142) (1,018) (948)
Earnings per share
Basic 2 (0.27p) (3.02p) (2.86)p
Diluted 2 (0.27p) (3.02p) (2.86)p
Consolidated Statement of Financial Position
as at 30 June 2024
As at As at As at
30 June 2024 30 June 2023 31 December 2023
Unaudited Unaudited Audited
£000 £000 £000
Non-current assets
Intangible assets 11,163 10,349 11,109
Plant and equipment 316 586 476
Right-of-use assets 938 380 1,058
Deferred tax - 83 13
12,417 11,398 12,656
Current assets
Trade and other receivables 4,062 4,537 5,385
Cash and cash equivalents 2,976 2,697 1,930
7,038 7,234 7,315
Total assets 19,455 18,632 19,971
Current liabilities
Trade and other payables (6,146) (5,673) (6,398)
Right-of-use liability (308) (214) (287)
(6,454) (5,887) (6,685)
Non-current liabilities
Trade and other payables due in more than one year (248) (444) (347)
Right-of-use liability (669) (209) (795)
Deferred tax (697) (633) (615)
(1,614) (1,286) (1,757)
Total liabilities (8,068) (7,173) (8,442)
Net Assets 11,387 11,459 11,529
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 513 513 513
Capital redemption reserve 1,103 1,103 1,103
Foreign exchange reserve 37 73 94
Retained profit/(loss) 775 811 860
Shareholders' funds 11,387 11,459 11,529
Consolidated Statement of Cash Flow
for the half-year ended 30 June 2024
Six month period ended Six month period ended Year ended
30 June 2024 30 June 2023 31 December 2023
Unaudited Unaudited Audited
£000 £000 £000
Cash flows from operating activities
Profit after taxation (85) (941) (892)
Adjustments for:
Taxation 12 (149) (205)
Share option charge - - -
Other interest on leases 52 21 41
Amortisation and depreciation 1,031 872 1,740
Cash flows from operations before working capital changes 1,010 (197)
684
Movement in trade and other receivables 1,397 305 (1,297)
Movement in trade and other payables (237) (59) 678
Cash generated from operations 2,170 49 65
Corporation tax (18) (23) 462
Net cash flow from operating activities 2,152 26 527
Cash flow from investing activities
Capital expenditure on intangible assets (797) (906) (1,870)
Purchase of plant and equipment (6) (24) (77)
Stamp duty on ROU lease renewal - - (6)
Net cash flow from investing activities (803) (930) (1,953)
Cash flow from financing activities
Interest repayments - (16) (16)
Payment of lease liabilities (293) (266) (528)
Loan issued - (18) -
Net cash flow from financing activities (293) (300) (544)
Net increase/(decrease) in cash and cash equivalents 1,056 (1,204) (1,970)
Cash and cash equivalents at beginning of year 1930 3,922 3,922
Exchange (losses)/gains on cash and cash equivalents (10) (21) (22)
Cash and cash equivalents at end of year 2,976 2,697 1,930
Consolidated Statement of Changes in Equity
as at 30 June 2024
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 2024 1,561 7,398 513 1,103 94 860 11,529
Comprehensive income for the year - - - - - (85) (85)
Foreign exchange movement - - - - (57) - (57)
Total comprehensive income - - - - (57) (85) (142)
At 30 June 2024 (unaudited) 1,561 7,398 513 1,103 37 775 11,387
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 2023 1,561 7,398 513 1,103 150 1,752 12,477
- - - - - (892) (892)
Comprehensive income for the year
Foreign exchange movement - - - - (56) - (56)
Total comprehensive income - - - (56) (892) (948)
At 31 December 2023 (audited) 1,561 7,398 513 1,103 94 860 11,529
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 2024
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 2024 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 2023, 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 2023 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 2024, and will be adopted in the 2024 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 23rd September 2024. The
results for the six months to 30 June 2024 and the comparative results for the
six months to 30 June 2023 are unaudited. The figures for the period ended
31 December 2023 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 2024 6 months ended 30 June 2023 Year ended
Unaudited Unaudited 31 December 2023
Audited
£000 £000 £000
Loss after tax for the year (85) (941) (892)
Exceptional items 141 - -
Share option charge - - -
Adjusted loss after tax for the year 56 (941) (892)
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 (0.27) (3.02) (2.86)
Diluted - pence on continuing operations (0.27) (3.02) (2.86)
Adjusted earnings - Basic - pence on continuing operations 0.18 (3.02) (2.86)
Adjusted earnings - Diluted - pence on continuing operations 0.16 (3.02) (2.86)
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