REG - Northcoders Group - Interim Results
20/09/2022 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220920:nRST9205Za&default-theme=true
RNS Number : 9205Z Northcoders Group PLC 20 September 2022
20 September 2022
Northcoders Group PLC
('Northcoders' or the 'Group' or 'Company')
Interim Results
Group continues to deliver IPO strategy and geographic expansion, with record
demand and continued support from UK government
Northcoders (AIM:CODE), an independent provider of training programmes for
software coding, is pleased to announce its results for the six months ended
30 June 2022 ('H1 2022' or the 'Period').
Financial Highlights
· Revenue more than doubled to £2.37 million in H1 2022 (H1 2021:
£1.09 million), an increase of 117%
o Particularly strong demand for bootcamp training, delivering revenues in
H1 2022 of £1.72 million (H1 2021: £0.93 million) as Northcoders continues
to build its reputation as a leading technology training provider
o Growing contribution from Business Services of £0.20 million (H1 2021:
£0.16 million), leveraging significant market opportunity as businesses
struggle to manage UK tech skills gap
· Gross profit increased 110% to £1.66 million (H1 2021: £0.79
million) with a gross margin of 70%
· Significant 62% increase in underlying adjusted EBITDA of £0.42
million (H1 2021: £0.26 million)
· Benefitted from efficiencies of hybrid teaching model with ongoing
remote learning, combined with teaching in person at hubs, generating profits
after tax of £0.19 million (H1 2021: £0.02 million), delivering adjusted
EPS of 4.59 pence (H1 2021: 0.47 pence)
Operating Highlights
· Continued growth in demand with 3,494 applications in H1 2022
compared to 3,662 applications in FY 2021
· Further expansion of Business Services division supported by
successful launch of new Developer Incubator, the Group's "Teams-as-a-Service"
model for businesses to hire teams of junior developers, managed by
Northcoders' internal consultancy team
· Well-known corporates such as On the Beach, Evri, HESA and Sky Bet
have also started their training programmes in the Period
· Capacity increased as employee headcount rose to 84 (H1 2021: 41)
· Data Engineering product trials progressed with curriculum finalised
and first cohort due to start in October 2022
· Birmingham hub successfully launched with strong demand and Midlands
based staff headcount increasing as planned
Current trading and outlook
· Individual applications continue to grow, with an additional 1,798
applications since the Period end
· Continued demand for Business Services, with repeat programmes from
NHS Digital
· Further Government support announced with £4.00 million contract
secured
· Strong performance giving the Board confidence to invest additional
funds in the second half of the year to support further growth in FY 2023
· On track to deliver FY 2022 targets with Q3 2022 trading continuing
at record levels and, as of 16 September 2022, contracted bookings for 2022
standing at £5.50 million, supported by persistently growing demand for
technology engineers
· At this early stage contracted booking for 2023 already stands at
£2.50 million
· Approved Government supplier for corporate services after being
accepted onto 'Crown Commercial', the UK Government's procurement system
Chris Hill, Chief Executive Officer of Northcoders, said: "More than doubling
revenues in the first half of the year is testament to the growing reputation
of Northcoders as one of the UK's leading technology training providers, with
a business model that is able to evolve to meet the demands of individuals and
corporates alike.
"The continuing Government support for technology training serves to highlight
the significant digital skills gap in the UK. The lack of qualified engineers
is limiting the progress of businesses nationwide which in turn is holding
back a domestic economic recovery. This is combined by a lack of diversity in
the technology sector that requires immediate attention as it ultimately
further limits the supply of quality engineers and impedes the levelling up
agenda. A shortage of talent is simultaneously pushing sector salaries to
all time highs and increasing the attractiveness of the career path and demand
for Northcoders services.
"As the Group moves into the second half of the year Northcoders is continuing
to deliver on its growth strategy as a result of this unabated demand and
there is significant confidence in the Group's ability to provide all
stakeholders with sustainable and profitable long term growth."
Analyst meeting and Investor Meet Company presentation
A virtual meeting for sell-side analysts will be held at 10.00 a.m. today, 20
September 2022. Please contact Buchanan via northcoders@buchanan.uk.com
(mailto:northcoders@buchanan.uk.com) if you wish to join the meeting. A copy
of the Interim Results presentation will be available on the Group's website
later today: www.northcodersgroup.com (https://www.northcodersgroup.com/) .
Northcoders will be also be presenting via the Investor Meet Company platform
today, 20 September 2022 at 4.30 p.m. (BST). The meeting will be hosted by
Chris Hill (CEO) and Charlotte Prior (CFO), and there will be an opportunity
for Q&A at the end of the session. Questions can be submitted pre-event
via the Investor Meet Company dashboard up until 9.00 a.m. the day before the
meeting or at any time during the live presentation. To sign up to the
Northcoders Group presentation via Investor Meet Company please click the
following link:
https://www.investormeetcompany.com/northcoders-group-plc/register-investor
(https://www.investormeetcompany.com/northcoders-group-plc/register-investor)
.
This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.
For further enquiries:
Northcoders Group plc Via Buchanan
Chris Hill, CEO Tel: +44 (0) 20 7466 5000
Charlotte Prior, CFO www.northcodersgroup.com (http://www.northcodersgroup.com/)
WH Ireland Limited (Nominated Adviser & Joint Broker) Tel: +44 (0)20 7220 1666
Mike Coe / Sarah Mather (Corporate Finance)
Fraser Marshall (Corporate Broking)
Peterhouse Capital Limited (Joint Broker) Tel+44 (0) 20 7496 0930
Martin Lampshire www.peterhousecap.com (http://www.peterhousecap.com/)
Lucy Williams
Duncan Vasey
Buchanan Communications Tel: +44 (0) 20 7466 5000
Henry Harrison-Topham northcoders@buchanan.uk.com (mailto:northcoders@buchanan.uk.com)
Stephanie Whitmore
George Cleary
Notes to Editors
Northcoders is a market leading provider of coding and software development
training for businesses and individuals. Founded in 2015, its business model
operates a hybrid structure with a flagship site in Manchester and other
sites in Leeds, Birmingham and Newcastle supported by a proven digital
offering to support its students across the UK.
Powered by IP rich technology, Northcoders' coding school offers boot camp
courses to individuals from a range of backgrounds, delivered through virtual
and physical learning. The Group also works with blue chip corporates across
multiple sectors to supply innovative EdTech solutions for the upskilling and
reskilling of employees, and is also a registered provider of
government-backed apprenticeships in the field.
With a keen focus of inclusivity, diversity and quality at its core,
Northcoders aims to address the digital skills gap in the UK to meet the
increasing demand for digital specialists from businesses and public
agencies. It operates in a significant and growing market with structural
growth trends further accelerated by Covid-19.
Northcoders was admitted to trading on AIM in July 2021 with the ticker
CODE.L. For additional information please visit www.northcodersgroup.com
(https://www.northcodersgroup.com/) .
Introduction
The Board of Northcoders is pleased to present its interim results for the six
months ended 30 June 2022. The Group has made significant progress since its
IPO in July 2021 and has successfully taken advantage of increased demand for
its products and services. In line with the Group's IPO strategy, it has not
only rapidly scaled the geographic reach of the business but also successfully
implemented two new products, the Developer Incubator and The Data Engineering
Bootcamp, with the latter's first cohort expected to begin imminently.
Trading in H1 2022 has been encouraging, which alongside continued tight
control over costs, has ensured the Group is on track to meet market
expectations for the full year ended 31 December 2022, despite the additional
investment into new planned products in the second half of the year to support
further growth into 2023.
Financial Review
Northcoders delivered a strong performance in the Period, with underlying
profitability higher than initial management expectations.
Revenue for the Period was £2.37 million (H1 2021: £1.09 million), up 117%
on the equivalent period last year. Training generated revenue of £2.17
million whilst Business Services generated revenue of £0.20 million. Further
explanation of revenue classification can be found below.
Gross profit for the Period was £1.66 million (H1 2021: £0.79 million) at a
gross margin of 70%.
EDITDA, adjusted for share based payments, was £0.42 million (H1 2020: £0.26
million) and profit after tax was £0.19 million (H1 2021: £0.02 million).
Basic earnings per share was at 2.79 pence per share (H1 2021: 0.37 pence).
Basic adjusted earnings per share was 4.59 pence per share (H1 2021: 0.47
pence).
Net assets at the Period end were £2.44 million (H1 2021: net liabilities of
£0.51 million) of which cash was £1.04 million (H1 2021: £0.36 million).
Operational Review
The Group started 2022 with its highest ever demand and this has continued to
grow throughout the Period. Continuing with the hybrid model developed in
2021, Northcoders is able to offer training remotely to anyone in the UK, with
hubs now located in Manchester, Leeds, Newcastle and Birmingham.
The time and investment in the Group's systems, marketing strategy and
delivery processes following the 2021 IPO has led to a 117% increase in
revenues and increased operating profit in the Period. During H1 2022, the
number of Northcoders students in training at any one particular time
increased by 85% on 2021 across all programme types, and the Group expects
this to increase further as it develops internal platforms and increases tutor
headcount. This is testament to the Group's evolved delivery platform and is a
credit to the expanding Northcoders team.
During the Period, Northcoders secured multiple new contracts in its Business
Services division, with Rolls Royce and EMaC Ltd, among others. Well-known
companies such as On the Beach, Evri, HESA and Sky Bet have also started the
coding training programmes during the Period.
The Group has also continued to see an increase in demand from individuals
wanting to enrol on coding training courses. Application numbers for the first
six months to 30 June 2022 stood at 3,494, which compares favourably with the
3,662 applications in the 12 months to December 2021. The Group grew its
graduate hiring network by a further 10% by engaging with 32 new companies for
the first time in the Period. Northcoders now has a network of almost 350
hiring partner companies to sustain its graduate hiring from B2C coding
bootcamps.
After successfully delivering the Group's industry leading outcomes on the
Wave 2 iteration of the Department for Education Skills Bootcamp Initiative,
the Board is pleased to have been awarded a further £4.0 million contract in
Wave 3 post Period end. This will enable the Group to continue to offer
scholarship places to individuals and accessibility to its life changing
courses. These scholarships are now not only in Software Engineering for
coding but also Data Engineering.
Data Engineering is the newest teaching discipline, with the success and the
lessons learnt from the industry leading Software Development coding bootcamp
giving the Company confidence to provide an industry leading, sought after,
bootcamp in Data Engineering. The team is in place and the curriculum is being
finalised with a planned launch date of October 2022.
Revenues
Going forward, and to best reflect the Group's growth trajectory, revenue will
be categorised into two core divisions, Training and Business Services
(formally Corporate Solutions).
Training
Training revenues comprise of Software Engineering (coding) and Data
Engineering. These courses are targeted at individuals and the vast majority
are delivered by shorter bootcamps, but they are also delivered via longer
term apprenticeships. Training can be funded privately with a range of
consumer finance mechanisms available, through Government supported
scholarships or through Government apprenticeship programmes.
Demand for the Group's core bootcamp courses continues to grow strongly. The
Northcoders apprenticeships have also increased albeit not as quickly as
anticipated at the time of the IPO as the strong preference is currently for
the shorter, more intensive bootcamp training programme and, particularly
boosted by the additional Department for Education ('DfE') contract, the
Company is looking at focusing on this area of Training for growth in the near
term.
Encouragingly, the rapid growth in demand seen towards the end of 2021 has not
slowed down and applications from consumers have been boosted as more
individuals look to retrain in this space. The number of applications by the
end of August 2022 had reached 145% of that experienced in the full year 2021.
With the competitive demand for technology skills growing the Group has
experienced its average graduate salary increase to £27,000 which is
contributing to the overall attractiveness of a career in the sector.
The Group has also continued to increase the number of its hiring partners,
which now stands at over 370. Some of the most recent additions include Cinch
Cars Limited, Visualsoft and Experian.
Supported by the benefit of increased marketing spend following the fundraise
at IPO, the Board expects the growth in demand to continue as Northcoders
further expands its geographical reach and list of hiring partners.
By continuing to closely monitor the progress of alumni, the Group can see
that the vast majority are not only rapidly gaining suitable employment
following qualification, but also progressing fast within the industry. It is
these individuals, with their Northcoders background, who act as ambassadors
for the training that the Group provides and once noticed by their employer
companies, they too become convinced of the value of a Northcoders training
programme and seek out further such staff for training to meet their own
corporate needs. This in turn has formed a network of demand for the Group's
Business Services division, creating added value to Northcoders.
In H1 2022, Northcoders has worked hard to increase the accessibility of
training to attract students from all demographics. The Group is pleased that
it now has a wide range of funding mechanisms for the students including DfE
Scholarships, Apprenticeships, Income Sharing Agreements, External loan
facilities and discounts for upfront payments. This is something that the
Group is passionate about maintaining and improving.
Post Period end, Northcoders' quality and delivery was acknowledged when the
Group was successfully awarded a further £4.00 million government funded
scholarship programme for its training courses.
Business Services
Northcoders' Business Services division works with businesses to distinguish
which service best fits their needs. This could result in a Northcoders
academy, (NHS Digital academy has trained a large group of employees year on
year), a developer incubator (the Group's teams-as-a-service product) or in
certain instances a custom application is built internally as an outsourced
service for corporates. The division continues to attract new business with
revenue for the year growing steadily.
The Group's new product, 'Developer Incubator' has experienced encouraging
levels of demand since its launch in February 2022, with contracts secured
with Rolls Royce and EMaC Limited proving successful.
Developer Incubator is a corporate offering which supplies a group of junior
engineers along with more senior engineers on a consultancy basis, these
juniors are then incubated within the Northcoders education system and trained
on the Company's own software processes. At the end of the consultancy period
(usually 18 months) the juniors are then hired by the corporate client. This
type of programme can be delivered in both Software and Data Engineering
training and has the potential to be tailored to multiple technical
disciplines. After the success of the work undertaken for Rolls Royce and
EMaC, the Group is now in a strong position to market this product to a wider
audience in order to drive further growth in the Business Services division.
The Group has also secured further academy work with NHS Digital which has
commenced this month, as well as confirming acceptance onto 'Crown Commercial'
which is the UK Governments portal for business service procurement.
The Directors believe that the Group's Business Services offering has the
potential to generate significant growth in revenue and accelerate the scaling
of the broader business, albeit that the profits will be at lower margin than
those generated from the Training division.
Geographic expansion and Hub roll out
Northcoders' geographical reach expanded considerably in the Period, as the
hybrid model is enabling students from all regions to study with the Group
despite no physical hub. This has been supported by the most recent round of
Department for Education funding which is to be delivered nationwide and is
enabling marketing of the Northcoders brand to an increased number of
locations throughout the UK. For example, there has been a rapid increase in
the number of students from London and South of England in the last three
months.
Outlook
The growing level of attention to IT training by UK Government bodies,
corporates and individuals is encouraging the Group to continue to expand its
operations to meet increasing demand. The job outcomes and industry
recognition give confidence that Northcoders operations have never been more
relevant and critical.
Northcoders is confident in its prudent, careful approach for developing new
products and is seeing the benefits of this as products are successfully
introduced, with tailored and appropriate training programmes appealing to a
broad audience. The Group will continue to be innovative and react to what
the market needs, looking at other disciplines once the Data Engineering
division has been launched. As a young company, the Group will also continue
to evaluate the roadmap of the business to ensure it is evolving its model to
generate maximum long term, sustainable growth.
To optimise retention of the Group's highly skilled team as we move through
the cost-of-living crisis, the Group has already increased salaries. There
will also be a one off bonus to help with cost of living increases in the
second half of this year. Regardless of this, the recent progress gives
Northcoders confidence in its ability to meet full year 2022 expectations.
Moving into the final quarter of 2022 and look to 2023 the Group is excited
about the new products and the direction that the business is moving in.
Contracted revenue for 2022 currently stands at £5.50 million and revenue
already contracted for 2023 stands are £2.50 million. Northcoders will
continue to improve and expand organically, and where appropriate through
selective acquisition, whilst always striving to maintain the quality and core
values that it is known for.
Chris Hill
Chief Executive Officer
20 September 2022
Group Statement of Comprehensive Income
For the period ended 30 June 2022
6 months ended 6 months ended Year ended
30 June 2022 30 June 2021 31 December 2021
Notes UNAUDITED UNAUDITED AUDITED
£ £ £
Revenue 2,367,596 1,085,646 3,010,357
Cost of sales (710,651) (297,228) (848,392)
Gross profit 1,656,945 788,418 2,161,965
Other operating income 7,500 142,748 144,749
Expenditure (1,246,895) (673,286) (1,947,239)
Adjusted EBITDA 417,550 257,880 359,475
Depreciation (88,642) (75,120) (118,892)
Amortisation (38,366) (99,468) (134,755)
Share based payment expense (125,373) (5,042) (114,341)
Total administrative expenditure (1,499,276) (852,916) (2,315,227)
Exceptional items - - (421,289)
Operating profit/(loss) 165,169 78,250 (429,802)
Finance income 5,253 2,161 8,574
Finance costs (52,246) (61,772) (102,360)
Profit/(loss) before tax 118,176 18,639 (523,588)
Taxation 75,284 (267) 165,464
Net profit/(loss) after tax 193,460 18,372 (358,124)
Other comprehensive income:
Tax relating to items not reclassified (28,471) - (5,089)
Total comprehensive income/(loss) for the year attributable to equity 164,989 18,372 (363,213)
shareholders of the parent
Basic earnings per share (pence) 3 2.79 0.37 (6.13)
Adjusted earnings per share (pence) 3 4.59 0.47 3.04
Diluted earnings per share (pence) 3 2.72 0.37 (6.13)
Group Statement of Financial Position
As at 30 June 2022
Notes 30 June 2022 31 December 2021
UNAUDITED 30 June 2021 AUDITED
UNAUDITED
£ £ £
Non-current assets
Intangible assets 4 636,625 388,978 495,071
Property, plant and equipment 468,646 146,805 525,067
Deferred tax assets 338,848 100,250 256,350
1,444,119 636,033 1,276,488
Current assets
Trade and other receivables 1,913,146 1,091,481 1,416,145
Current tax receivable 143,042 235,931 143,042
Deferred tax assets - 30,517 -
Cash and cash equivalents 1,038,882 356,087 1,564,645
3,095,070 1,714,016 3,123,832
Current liabilities
Trade and other payables 502,435 1,128,615 467,282
Borrowings 223,195 216,747 219,386
Lease liability 190,032 122,073 181,043
Deferred revenue 21,405 201,911 21,813
937,067 1,669,346 889,524
Net current assets 2,158,003 44,670 2,234,308
Non-current liabilities
Borrowings 399,621 616,274 512,602
Lease liability 589,784 475,269 711,524
Deferred tax provision 170,159 104,021 134,474
1,159,564 1,195,564 1,358,600
Net assets/(liabilities) 2,442,558 (514,861) 2,152,196
EQUITY
Share capital 69,444 50,000 69,444
Share premium 2,891,314 - 2,891,314
Merger reserve 500 500 500
Share option reserve 257,906 - 134,715
Other reserve (50,000) (50,000) (50,000)
Retained earnings (726,606) (515,361) (893,777)
Total equity 2,442,558 (514,861) 2,152,196
Group Statement of Changes in Equity
For the period ended 30 June 2022
Share Share Share option reserve Merger reserve Other reserve Retained earnings Total equity attributable to owners of the parent
capital premium
£ £ £ £ £ £ £
At 1 January 2021 (audited) - - - 187,591 - (729,639) (542,048)
Profit for the period - - - - - 18,372 18,372
Capital reduction - - - (187,091) - 187,091 -
Share for share exchange 50,000 - - - (50,000) - -
Share option expense - - 5,042 - - - 5,042
Cancellation of share options - - (5,042) - - 5,042 -
Other changes - - - - - 3,773 3,773
At 30 June 2021 (unaudited) 50,000 - - 500 (50,000) (515,361) (514,861)
Loss for the period - - - - - (376,496) (376,496)
Other comprehensive loss:
Tax adjustments on share based payments - - - - - (5,089) (5,089)
Total comprehensive income for the year - - - - - (381,585) (381,585)
Share option and warrants expense - - 141,657 - - - 141,657
Cancellation of share options - - (6,942) - - 6,942 -
Issue of share capital 19,444 3,480,555 - - - - 3,499,999
Costs of float set against premium - (589,241) - - - - (589,241)
Other changes - - - - - (3,773) (3,773)
At 31 December 2021 (audited) 69,444 2,891,314 134,715 500 (50,000) (893,777) 2,152,196
Profit for the period - - - - - 193,460 193,460
Other comprehensive loss:
Tax adjustments on share based payments - - - - - (28,471) (28,471)
Total comprehensive income for the year - - - - - 164,989 164,989
Share option expense - - 125,373 - - - 125,373
Cancellation of share options - - (2,182) - - 2,182 -
At 30 June 2022 (unaudited) 69,444 2,891,314 257,906 500 (50,000) (726,606) 2,442,558
Group Statement of Cashflows
For the period ended 30 June 2022
Notes 6 months ended 6 months ended Year ended 31 December 2021
30 June 2022 30 June 2021 AUDITED
UNAUDITED UNAUDITED
£ £ £
Cash flows from operating activities:
Profit/(loss) for the year 193,460 18,372 (358,124)
Adjustments for:
Tax (credit)/charge (75,284) 267 (165,464)
Finance costs 52,246 61,772 102,360
Finance income (5,253) (2,161) (8,574)
Share based payment expense 125,373 5,042 146,699
Amortisation of intangible assets 38,366 99,468 134,755
Depreciation of tangible assets 88,642 75,120 118,892
417,550 257,880 (29,456)
Changes in working capital:
Increase in trade & other receivables (496,001) (792,216) (1,117,345)
Increase/(decrease) in trade & other payables 46,574 748,564 (152,740)
Cash (used in)/from operations (31,877) 214,228 (1,299,541)
Income taxes received - 57,068 211,701
Net cash (outflow)/inflow from operating activities (31,877) 271,296 1,087,840
Cash flows from investing activities
Capitalised development costs (179,920) (127,157) (268,537)
Purchase of property, plant & equipment (32,221) (10,359) (42,706)
Payment of deferred consideration - (57,000) -
Interest received 4,253 1,701 8,574
Net cash (used in) investing activities (207,888) (192,815) (302,669)
Cash flow from financing activities
Proceeds from issue of new shares - - 2,910,758
Repayments of bank loans and borrowings (112,427) (65,650) (162,961)
Payment of lease obligations (124,579) (133,320) (215,954)
Interest paid (48,992) (49,095) (102,360)
Net cash (used in)/from financing activities (285,998) (248,065) 2,429,483
Net (decrease)/increase in cash and cash equivalents (525,763) (169,584) 1,038,974
Cash and cash equivalents at beginning of the period 1,564,645 525,671 525,671
Cash and cash equivalents at end of the period 1,038,882 356,087 1,564,645
Notes to the Financial Statements
For the period ended 30 June 2022
1. General information
Northcoders Group Plc is a public company limited by shares incorporated in
the United Kingdom. The registered address of the Company is Manchester
Technology Centre, Oxford Road, Manchester, M1 7ED. The consolidated financial
statements (or "financial statements") incorporate the financial statements of
the Company and entities (its subsidiaries) controlled by the Company
(collectively comprising the "Group").
The principal activity of the Group is the provision of software development
courses.
2. Accounting policies
2.1. Basis of preparation
The financial information set out in these interim consolidated financial
statements for the six months ended 30 June 2022 is unaudited. The financial
information presented are not statutory accounts prepared in accordance with
the Companies Act 2006, and are prepared only to comply with AIM requirements
for interim reporting. The most recent financial statements which have been
audited are for the year ended 31 December 2021. The first annual financial
statements of the Group to 31 December 2021 will be prepared in accordance
with International Financial Reporting Standards in conformity with the
requirements of the Companies Act 2006.
The interim consolidated financial statements have been prepared using
consistent accounting policies as those adopted in the prior year ended 31
December 2021.
2.2. Basis of consolidation
The Group financial statements consolidates those of the parent company and
the subsidiaries of which the parent has control. Control is established when
the parent is exposed, or has rights, to variable returns from its involvement
with the subsidiary and has the ability to affect those returns through its
power over the subsidiary, which for the acquisition described in note 16 is
determined through an option to purchase the remaining shares in the
subsidiary.
Where a subsidiary undertaking is acquired/disposed of during the year, the
consolidated profits or losses are recognised from/until the effective date of
the acquisition/disposal, being the date on which control is obtained or lost.
All inter-company balances and transactions between group companies have been
eliminated on consolidation.
Where necessary, adjustments are made to the financial information of
subsidiaries to bring the accounting policies used into line with those used
by the Group.
The Group applies the acquisition method of accounting for business
combinations enacted after the date of creation of the Group, as detailed
further below. The consideration transferred by the Group to obtain control of
a subsidiary is calculated as the sum of the acquisition-date fair value of
assets transferred by the Group, liabilities incurred by the Group to the
former owners of the acquiree and the equity interest issued by the Group.
Acquisition costs are expensed as incurred.
The Group recognises identifiable assets acquired and liabilities assumed in a
business combination regardless of whether they have been previously
recognised in the acquired subsidiary's financial information prior to the
acquisition. Assets acquired and liabilities assumed are measured at their
acquisition-date fair values.
2.3. Going concern
In preparing the financial statements, the directors have considered the
principal risks and uncertainties facing the business, along with the Group's
objectives, policies and processes for managing its exposure to financial
risk. In making this assessment the directors have prepared cash flows for the
foreseeable future, being a period of at least 12 months from the expected
date of approval of the interim financial statements.
Forecasts are adjusted for reasonable sensitivities that address the principal
risks and uncertainties to which the Group is exposed, thus creating a number
of different scenarios for the board to challenge including a "stress" case
scenario of losing the apprenticeship licence and associated revenues.
However, in this case scenario there would be increased tutor capacity and the
Directors would expect bootcamp numbers and bootcamp revenue to increase.
Overall the directors do not believe this to cause a material uncertainty
around going concern.
At the time of approving the interim financial statements, the directors have
a reasonable expectation that the
Group has adequate resources to continue in operational existence for the
foreseeable future. Thus, the
Directors continue to adopt the going concern basis of accounting in preparing
the interim financial statements.
2.4. Grants
Grants for revenue expenditure are credited in the income statement as other
operating income in the period in which the expenditure for which they are
intended to contribute towards has been incurred. Where the Coronavirus
COVID-19 job retention scheme grant and business rates relief grants have been
claimed, these are credited to the income statement in the period in which the
expenditure for which they are intended to contribute towards has been
incurred.
Coronavirus Job Retention Scheme (CJRS)
During the prior period, the Group benefited from the UK Government's CJRS
scheme for furloughed employees, as part of the support available for
businesses impacted by the Covid-19 pandemic. In accordance with IAS 20,
eligible salary and other payroll expenses have been continued to be
recognised in the income statement in the period in which they were incurred.
Eligible matching CJRS grant amounts have been reflected in Other Income in
the same period.
2.5 Revenue
Revenue from providing services is recognised in the accounting period in
which the services are rendered. Services are typically provided over short
periods of time, spanning typically a few months at most. However, for
fixed-price contracts that span accounting periods, revenue is recognised
based on the actual service provided to the end of the reporting period as a
proportion of the total services to be provided because the customer receives
and uses the benefits simultaneously. Where the Group has contracts where the
period between the transfer of the promised services to the customer and
payment exceeds one year, the Group adjusts transaction price for the time
value of money . Revenue is determined as follows:
· For consumer bootcamps, income is received in advance of the service
being provided and is recognised on a pro-rata basis across the course
delivery, based on delivery dates for those courses. Any income received in
advance is recognised as deferred revenue.
· For business services, amounts are invoiced in arrears for
development work performed along with any associated costs, based on the
number of hours spent on each contract at agreed contractual rates for those
delivering the course. Where appropriate, any amounts to be invoiced are
recognised as accrued revenue, and any amounts invoiced in advance are
recognised as deferred revenue, in line with performance obligations per
contracts with customers.
· For apprenticeship income, the Group receives lump-sum drawdowns at
regular intervals, which typically are billed in arrears resulting in accrued
income. In addition, the Group receives a contingent success fee, payable at
the end. The Group makes an assessment of the probability of success and
accrues this on a percentage of completion basis as the course progresses;
otherwise, income is recognised as for consumer bootcamps.
Determining the transaction price
The Group's revenue on over-time sales is generally based on fixed price
contracts but these are subject to more variability as a result of the nature
of the contract. Any variable consideration is constrained in
estimating contract revenue in order that it is highly probable that there
will not be a future reversal in the
amount of revenue recognised when the final amounts of any variations has been
determined.
Allocating amounts to performance obligations
Where the contracts include multiple performance obligations, which are
determined to be separate performance obligations, the transaction price will
be allocated to each performance obligation based on the stand-alone selling
prices. Where these are not directly observable, they are estimated based on
expected cost plus margin.
2.6 Development assets
Expenditure on research activities, undertaken with the prospect of gaining
new scientific or technical knowledge and understanding, is recognised in the
income statement as an expense as incurred. Development costs incurred are
capitalised after the point at which the commercial and technical feasibility
of the product have been proven, and the decision to complete the development
has been taken and resources made available. The expenditure capitalised is
solely the cost of direct labour. Capitalised development expenditure is
stated at cost less accumulated amortisation and impairment losses.
The directors have untaken an assessment of the estimated useful life of
development assets and subsequently the estimation has changed from 4 years to
10 years.
1. Earnings per share
The calculation of the basic and diluted earnings per share is based on the
following data:
Earnings 6 months ended 6 months ended Year ended
30 June 2022 30 June 2021 31 December 2021
UNAUDITED UNAUDITED AUDITED
£ £ £
Earnings for the purpose of basic earnings per share being net profit 193,460 18,372 (358,124)
attributable to owners of the parent
Earnings for the purposes of diluted earnings per share 193,460 18,372 (358,124)
Number of shares 6 months ended 6 months ended Year ended
30 June 2022 30 June 2021 31 December 2021
UNAUDITED UNAUDITED AUDITED
£ £ £
Weighted average number of ordinary shares for the purposes of basic earnings 6,944,445 5,000,001 5,841,706
per share
Effects of dilutive potential ordinary shares 155,365 - 175,780
Weighted average number of ordinary shares for the purposes of diluted 7,099,810 5,000,001 6,017,486
earnings per share
Earnings per share
Earnings 6 months ended 6 months ended Year ended
30 June 2022 30 June 2021 31 December 2021
UNAUDITED UNAUDITED AUDITED
Pence per weighted average shares 2.79p 0.37p (6.13)p
Pence per weighted average diluted shares 2.72p 0.37p (6.13)p
The Directors use adjusted earnings before exceptional costs and share based
payment expenses; the year ended 31 December 2021 includes the costs of
admission to AIM within exceptional costs. This creates an alternative
performance measure which the Directors believe reflects a fair estimate of
ongoing profitability and performance. The calculated Adjusted Earnings for
the current period of accounts is as follows:
Adjusted Earnings per Share 6 months ended 6 months ended Year ended
30 June 2022 30 June 2021 31 December 2021
UNAUDITED UNAUDITED AUDITED
£ £ £
Profit/(loss) after taxation 193,460 18,372 (358,124)
Adjusted for:
Share-based payment expense 125,373 5,042 114,341
Exceptional costs - - 421,289
Adjusted Earnings 318,833 23,414 177,506
Pence per weighted average shares 4.59p 0.47p 3.04p
Pence per weighted average diluted shares 4.49p 0.47p 2.95p
2. Intangible fixed assets
Development costs Licence Total
£ £ £
Cost
At 1 January 2022 593,589 101,899 695,488
Additions 179,920 - 179,920
Disposals - - -
At 30 June 2022 773,509 101,899 875,408
Amortisation and impairment
At 1 January 2022 174,942 25,475 200,417
Amortisation charged for the year 25,629 12,737 38,366
At 30 June 2022 200,571 38,212 238,783
Carrying amount
At 30 June 2022 572,938 63,687 636,625
At 31 December 2021 418,647 76,424 495,071
3. Events after the reporting period
On 22 August 2022 the Group granted 85,000 share options with an exercise
price of £3.05, vesting over a period between 1 year to 3 years. Due to the
proximity of the grant date to the finalisation of these interim financial
statements, the Directors have not yet obtained an estimated fair value, under
IFRS 2 'Share Based Payments', for the options.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR BKCBKBBKDCCDRecent news on Northcoders
See all newsREG - Northcoders Group - Notification of Major Holdings
AnnouncementREG - Northcoders Group - Notification of Major Holdings
AnnouncementREG - Northcoders Group - Notification of Major Holdings
AnnouncementREG - Northcoders Group - DfE contract and regional funding model
AnnouncementREG - Northcoders Group - Final Results
Announcement