REG - Narf Industries PLC - Interim Results
30/12/2024 07:00
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RNS Number : 5680R Narf Industries PLC 30 December 2024
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK
VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF ENGLISH
LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED. ON
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.
30 December 2024
NARF INDUSTRIES PLC
INTERIM RESULTS
Narf Industries plc ("Narf", the "Company", or the "Group") (LSE: NARF), the
cybersecurity group specializing in high-end threat intelligence and critical
infrastructure security, today announces its unaudited results for the six
months ended 30 September 2024 ("HY2024").
HY2024 Overview
· As previously outlined (see RNS dated 7 November 2024), the Company
experienced a decline in revenues, reflecting temporary U.S. government budget
delays and a strategic focus on accelerating the development and
commercialization of the innovative SocialCyber platform.
· Revenue for the period was $1.18 million (HY2023: $3.11 million)
representing a shift in focus toward long-term growth initiatives.
· Proactive measures were implemented to optimize costs and ensure
financial flexibility:
o A restructured team achieved annual base salary savings of $900k, aligning
resources to drive SocialCyber business growth.
o Senior management contributed to $500,000 in cash flow savings through
salary waivers and cost deferrals.
· Financial stability was maintained, with cash at period end
totalling $135,725 (HY2023: $341,543).
· Secured a significant $1.3 million DARPA SocialCyber contract
(see RNS dated 27 August 2024).
Post-period highlights
· Notified by current government customer of selection for $5+ million
multi-year contract award, negotiations pending, with award anticipated in Q1
2025.
· Strengthened liquidity by agreeing to increase the CEO's working
capital loan facility from $2.5 million to $3 million, ensuring continued
operational support.
Executive Chairman John Herring said: "Despite the challenges, we successfully
transitioned to a higher-value business model centred around our SocialCyber
platform with recurring revenue potential. With significant contract wins and
promising opportunities ahead, the Company is well-positioned to deliver
exceptional value through this innovative approach while maintaining
disciplined financial management."
ENDS
For further information visit www.narfgroup.com or contact:
Narf Industries plc John Herring jh@narfgroup.com
Joint Broker Simon Bridges Tel: +44 (0) 207 523 8000
Canaccord Genuity Limited Harry Rees
Joint Broker Peter Krens Tel: +44 (0)207 186 9030
Tennyson Securities plc
Financial PR, UK Paul Dulieu narf@stbridespartners.co.uk
St Brides Partners Isabel de Salis
About NARF Industries plc
Narf Industries (LSE: NARF) is a U.S. based leading provider of cybersecurity
research, solutions, and services to government entities. With a steadfast
commitment to protecting national security and critical infrastructure, it
offers comprehensive expertise in addressing the evolving cyber threats faced
by its clients.
DIRECTORS REPORT AND STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF
THE CONDENSED INTERIM REPORT AND CONDENSED FINANCIAL STATEMENTS
The results of the Group have been addressed above in the Chairman's
statement. The total comprehensive loss for the six-month period was
$1,831,773 (interim period to 30 September 2023: loss of $376,815) and the
Group's unaudited net liabilities as at 30 September 2024 were $1,508,974 (30
September 2023: $61,126).
Directors
The following directors held office during the period:
Steven Bassi Chief Executive
Officer
John Herring Executive Chairman
Albert Hawk Non-Executive Director
Responsibility Statement
The Directors confirm that to the best of their knowledge:
a) the condensed set of financial statements has been prepared in
accordance with International Accounting Standard 34 'Interim Financial
Reporting';
b) the interim management report includes a fair review of the
information required by DTR 4.2.7R - namely an indication of important events
that have occurred during the first six months and their impact on the
condensed interim financial information, and a description of principal risks
and uncertainties for the remaining six months of the financial year; and
c) the interim management report includes a fair review of the
information required by DTR 4.2.8R - disclosure of material related parties'
transactions in the first six months and any material changes therein).
Cautionary Statement
This Interim Management Report (IMR) has been prepared solely to provide
additional information to shareholders to assess the Group's strategies and
the potential for those strategies to succeed. The IMR should not be relied on
by any other party or for any other purpose.
Going Concern
The Directors' assessment of going concern is detailed in Note 2.
Principal Risks and Uncertainties
The principal risks and uncertainties affecting the business activities of the
Group remain those detailed in the consolidated report and accounts for the
fifteen month period ended 31 March 2024, a copy of which is available on the
Company website at https://narfgroup.com/investor-relations/corporate-document
(https://narfgroup.com/investor-relations/corporate-document) . The Board
considers that these remain a current reflection of the risks and
uncertainties facing the business for the remaining six months of the
financial year.
By order of the Board
Steve Bassi
Chief Executive
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 months 6 months 15 months
ended ended ended
30 September 30 September 31 March
2024 2023 2024
Note US$ US$ US$
Continuing operations
GR &D Revenue 1,131,926 2,092,552 4,509,908
GS & S Revenue 50,000 1,016,748 3,012,545
Commercial Revenue - - 49,000
Total revenue 1,181,926 3,109,300 7,571,453
Sub-contractors (193,454) (485,089) (1,092,696)
Operating expenses (2,363,470) (2,494,885) (6,313,660)
(Loss)/profit before depreciation and software licence amortisation, share (1,374,998) 129,325 165,097
based payments, interest and taxes
Depreciation and software license amortisation (197,842) (297,750) (509,756)
Other share based payment expense (250,136) (837,931) (1,023,074)
Operating loss (1,822,976) (1,006,356) (1,367,733)
Interest receivable and other finance income - - 13
Finance costs (45,940) (4,189) (71,258)
Loss before taxation (1,868,916) (1,010,545) (1,438,979)
Corporate tax - (12,000) (15,248)
Loss for the period (1,868,916) (1,022,545) (1,454,227)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Exchange differences on parent company operations 37,143 645,730 54,756
Total comprehensive loss for the period attributable to the owners of the (1,831,773) (376,815) (1,399,471)
company
Earnings per share
Earnings per share (basic and diluted) attributable to the equity holders 3 (0.11) (0.06) (0.09)
(cents)
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at As at As at
30 September 30 September 31 March
2024 2023 2024
Note US$ US$ US$
NON-CURRENT ASSETS
Intangible assets 1,058,752 1,353,023 1,198,096
Right of use asset 16,819 91,155 42,981
Tangible assets - - -
1,075,571 1,444,178 1,241,077
CURRENT ASSETS
Trade and other receivables 443,944 408,186 605,544
Cash and cash equivalents 135,725 341,543 654,365
579,669 749,729 1,259,909
TOTAL ASSETS 1,655,240 2,193,907 2,500,986
CURRENT LIABILITIES
Trade and other payables 3,164,216 2,255,033 2,739,573
TOTAL LIABILITIES 3,164,216 2,255,033 2,739,573
NET LIABILITIES (1,508,974) (61,126) (238,587)
EQUITY
Share capital 4 204,012 204,012 204,012
Share premium 4 35,454,122 35,180,223 35,294,816
Reverse acquisition reserve (16,747,959) (16,747,959) (16,747,959)
Foreign exchange reserve 48,488 (634,385) 11,345
Share based payment reserve 1,885,715 1,398,874 1,483,635
Retained deficit (22,353,352) (19,461,891) (20,484,436)
TOTAL EQUITY (1,508,974) (61,126) (238,587)
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Share Share FX Share-based Reverse Retained Total
Capital Premium Reserve Payment Acquisition Deficit
Reserve Reserve
US$ US$ US$ US$ US$ US$ US$
AS AT 1 OCTOBER 2023 204,012 35,180,223 (634,385) 1,398,874 (16,747,959) (19,461,891) (61,126)
Loss for the period - - - - - (1,022,545) (1,022,545)
Foreign exchange loss on conversion of subsidiary - - 645,730 - - - 645,730
Total comprehensive loss for the year - - 645,730 - - (1,022,545) (376,815)
Share based payments - 199,354 - - 199,354
Cancellation of warrants - 114,593 - (114,593) - - -
AS AT 31 MARCH 2024 204,012 35,294,816 11,345 1,483,635 (16,747,959) (20,484,436) (238,587)
Loss for the period - - - - - (1,868,916) (1,868,916)
Foreign exchange gain on conversion of subsidiary - - 37,143 - - - 37,143
Total comprehensive loss for the period - - 37,143 - - (1,868,916) (1,831,773)
Shares issue costs recovered - - - - - - -
Options expired - 159,306 - (159,306) -
Share based payments - - - 561,386 - - 561,386
AS AT 30 SEPTEMBER 2024 204,012 35,454,122 48,488 1,885,715 (16,747,959) (22,353,352) (1,508,974)
CONSOLIDATED STATEMENT OF CASH FLOWS
6 months 6 months 15 months
ended ended ended
30 September 30 September 31 March
2024 2023 2024
US$ US$ US$
OPERATING ACTIVITIES
Loss for the period before interest and taxation (1,822,976) (1,006,356) (1,367,733)
Adjusted for:
Depreciation - 10,660 15,990
Amortisation of intangibles 197,842 197,842 493,766
Amortisation of right of use asset 26,162 - 48,173
Unrealised foreign exchange adjustment 289,895 301,586 (16,408)
RTO and other share-based payment expenses 250,136 - 1,023,074
Operating cash flow before movements in working capital: (1,058,941) (496,268) 196,862
Decrease in trade and other receivables 161,600 676,418 129,699
(Decrease)/Increase in trade and other payables (439,580) 208,012 (153,502)
Net cash generated from/(used in) operating activities (1,336,920) 388,162 173,059
FINANCING ACTIVITIES
Costs recovered/(paid) related to share issues - 106,162 106,162
Amounts (repaid to)/received from Director 864,221 (176,856) (22,500)
Decrease in vehicle financing loan - (22,312) (22,312)
Net interest (paid)/received (45,940) (4,189) (7,547)
Net cash (outflow)/inflow from financing activities 818,281 (97,195) 53,803
Taxation paid - - (15,248)
Net increase/(decrease) in cash and cash equivalents (518,640) 290,967 211,614
Cash and cash equivalents at beginning of the period 654,365 50,576 442,751
Cash and cash equivalents at end of the period 135,725 341,543 654,365
Notes to the CONSOLIDATED Financial Statements
interim results to 30 SEPTEMBER 2024
1. Organisation and Trading Activities
The principal activity of Narf Industries plc (the "Company'') together with
its operating subsidiaries (together, the "Group") is high-end threat
intelligence. Its strategy is focussed on building a group capable of offering
cybersecurity solutions in the US and beyond. The Company is domiciled in the
United Kingdom and incorporated and registered in England and Wales as a
public limited company. The Company's registered office is 5 Fleet Place,
London EC4M 7RD. The Company's registered number is 11701224.
Summary of Significant Accounting Policies
The principal accounting policies adopted and applied in the preparation of
these interim Group Financial statements are set out below.
These have been consistently applied to all the periods presented unless
otherwise stated:
Basis of accounting
These interim financial statements of Narf Industries plc (the "Group") have
been prepared in accordance with UK adopted international accounting standards
("UK-adopted IAS") applied in accordance with the provisions of the Companies
Act 2006.
The interim financial statements have been prepared under the historical cost
convention on the basis of the accounting policies as set out in the Group's
audited annual financial statements and are presented in US Dollars, the
presentational and functional currency of the Group. The Group has applied IAS
34 in the preparation of these interim financial statements.
This announcement was approved and authorised by the Board of directors on 18
December 2024. Copies of this interim report can be found on the Company's
website at https://narfgroup.com/investor-relations/corporate-document
(https://narfgroup.com/investor-relations/corporate-document)
These condensed interim financial statements for the six months ended 30
September 2024 are unaudited and do not constitute fully prepared statutory
accounts. The comparative figures for the fifteen-month period ended 31 March
2024 are extracted from the 2024 consolidated financial statements of the
Company. The independent auditor's report on the 2024 financial statements
opinion was qualified principally due to the inability to gain sufficient and
appropriate audit evidence in respect of the opening balances at 1 January
2023.
Going concern
Any consideration of the foreseeable future involves making a judgement, at a
particular point in time, about future events which are inherently uncertain.
The Directors have prepared cash flow forecasts covering the period to 31
December 2025. The Chief Executive has agreed not to demand repayment of his
loan until the Group has sufficient cash resources to repay it, whilst those
members of senior management who have accepted salary deferrals have agreed to
defer until revenues are sufficient for the Group to settle the outstanding
amounts. The forecasts, accordingly, indicate that the Group will have
sufficient cash resources to meet all foreseeable liabilities, other than
those relating to the loan to the Chief Executive and salary deferrals,
through to a period which is at least twelve months after the issue of these
condensed interim financial statements.
Accordingly, the Directors have a reasonable expectation that the Group will
be able to meet any future obligations and thus to continue operating for the
foreseeable future. For this reason, they continue to adopt the going concern
basis in preparing the interim financial statements.
Basis of consolidation
The Financial Statements consolidate the financial information of the Company
and companies controlled by the Group (its subsidiaries) at each reporting
date following the acquisition in March 2022.
Control is achieved where the Company has the power to govern the financial
and operating policies of an investee entity, has the rights to variable
returns from its involvement with the investee and has the ability to use its
power to affect its returns. The results of subsidiaries acquired or sold are
included in the financial information from the effective date of acquisition
or up to the effective date of disposal, as appropriate. Where necessary,
adjustments are made to the results of acquired subsidiaries to bring their
accounting policies into line with those used by the Group. All intra-Group
transactions, balances, income and expenses are eliminated on consolidation.
The financial statements of all Group companies are adjusted, where necessary,
to ensure the use of consistent accounting policies.
The Financial Statements consolidate the financial information of the Company
and companies controlled by the Group (its subsidiaries) at each reporting
date.
2. EARNINGS PER SHARE
The basic earnings per share is based on the loss for the period divided by
the weighted average number of shares in issue during the period. The weighted
average number of ordinary shares for the Company the period ended 30
September 2024 assumes that all shares have been included in the computation
based on the weighted average number of days since issue. Since the Group has
made a loss in the current and each of the prior periods, the options in issue
are not dilutive.
Six months to Six months to 15 months to
30 Sept 2024 30 Sept 2023 31 Mar 2024
US$ US$ US$
Loss attributable to owners of the Group : (1,831,773) (1,022,545) (1,454,227)
Weighted average number of ordinary shares in issue for basic earnings 1,697,381,100 1,697,381,100 1,697,381,100
Weighted average number of shares in issue for fully diluted earnings 1,697,381,100 1,697,381,100 1,697,381,100
LOSS PER SHARE (CENTS PER SHARE) (0.11) (0.06) (0.09)
BASIC AND FULLY DILUTED:
- from continuing and total operations (cents) (0.11) (0.06) (0.09)
3. SHARE CAPITAL AND SHARE PREMIUM
The following table is presented in US Dollar equivalents:
Ordinary shares of £0.0001 each Share Capital Share Premium
Number $ $
At 1 October 2023 204,012 35,180,223
1,697,381,000
At 31 March 2024 204,012 35,294,816
1,697,381,000
At 30 September 2024 204,012 35,454,122
1,697,381,000
4. POST PERIOD END EVENTS
There were no significant events subsequent to the balance sheet date which
have any bearing on these interim financial statements.
Important notice
The content of this announcement has not been approved by an authorised person
within the meaning of the Financial Services and Markets Act 2000 (FSMA). This
announcement has been issued by and is the sole responsibility of the Company.
The information in this announcement is subject to change. This announcement
is not an offer of securities for sale into the United States. The securities
referred to herein have not been and will not be registered under the U.S.
Securities Act of 1933, as amended (the Securities Act), and may not be
offered or sold, directly or indirectly, in or into the United States, except
pursuant to an applicable exemption from registration. No public offering of
securities is being made in the United States. This announcement is not for
release, publication or distribution, directly or indirectly, in or into
Australia, the Republic of South Africa, Japan or any jurisdiction where to do
so might constitute a violation of local securities laws or regulations (a
Prohibited Jurisdiction). This announcement and the information contained
herein are not for release, publication or distribution, directly or
indirectly, to persons in a Prohibited Jurisdiction unless permitted pursuant
to an exemption under the relevant local law or regulation in any such
jurisdiction.
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