REG - Dods Group PLC - Half-year Report
30 November 2020
Dods Group plc
("Dods", the "Company" or "the Group")
INTERIM RESULTS TO 30 SEPTEMBER 2020
Dods Group plc (AIM: DODS) announces its unaudited interim results for the half year ended 30 September 2020.
Company Overview
Dods is a leading technology company specialising in business intelligence, media and technology resourcing. With extensive capability in machine learning and AI, we manage and transform large volumes of data and information across multiple industries, for some of the UK's leading business intelligence providers. In the political and regulatory domains, we have built a reputation for high quality, unbiased content across all of our products and services in Westminster, Edinburgh, Paris and Brussels.
Financial Highlights
Continuing operations
H1 2021
H1 2020
30 Sept 20
30 Sept 19
Total revenue
£10.2m
£12.5m
Gross margin
31%
34%
Adjusted EBITDA 1
(£0.2m)
£1.4m
Adjusted EBIT 2
(£1.9m)
£0.2m
Loss before tax
(£2.6m)
(£0.3m)
Adjusted basic EPS
(0.31p)
0.04p
Basic EPS
(0.46p)
(0.08p)
30 Sept 20
31 Mar 20
Cash at bank
£4.1m
£4.4m
Debt
£3.0m
£3.0m
Total assets
£61.1m
£63.9m
1. Adjusted EBITDA is calculated as earnings before interest, tax, depreciation, amortisation of intangible assets, share based payments and non-recurring items.
2. Adjusted EBIT is calculated as operating profit (loss) plus non-recurring costs.
Operational Highlights
· Formation of two new divisions; Dods Technology with Cornelius (Con) Conlon as Managing Director and Dods Intelligence with Munira Ibrahim as Managing Director;
· Covid-19 pandemic accelerated move to a more technology enabled business;
· Successful mobilisation of entire global workforce to remote working; reviewing London office space requirements to reflect the new hybrid working model with a consequential reduction in costs;
· Senior team strengthened across sales, technology, editorial, creative, finance, legal and HR.
Outlook
The results for the period are in line with the Board's expectations.
Despite the continued impact of Covid-19 on revenues, in particular Events and Training, the Group is cash generative, has additional liquidity available and has strengthened and diversified its capabilities and senior management team, particularly through the successful completion of the Merit acquisition in July 2019.
Due to the ongoing uncertainties around the global Covid-19 pandemic, the Board remains cautious about the outlook for the second half of the year but confident in the Company's transformational strategy and the long term outlook for the Group.
Mark Smith, Non- Executive Chairman, commented:
"The Group's results for the first half of FY21 are in line with the Board's expectations; whilst Covid-19 has had a huge impact on parts of our core business our diversified portfolio helped to mitigate the downside. The business adapted quickly to remote working for all employees around the world and continues to operate efficiently under flexible working conditions. We are grateful for the continued support of our customers, suppliers, shareholders, bankers and employees as we continue the modernisation and transformation of Dods.
As announced last week we are delighted to welcome Vijay Vaghela to the Board and Chairmanship of the Audit Committee. I am also pleased to confirm my position as Chairman."
This announcement is released by Dods Group plc and contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 ("MAR"), and is disclosed in accordance with the Group's obligations under Article 17 of MAR.
For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is being made on behalf of the Group by Simon Bullock, Chief Financial Officer.
For further information, please contact:
Dods Group plc
Mark Smith - Non-Executive Chairman 020 7593 5500
Canaccord Genuity Limited (Nomad and Broker)
Bobbie Hilliam 020 7523 8150
Georgina McCooke
BUSINESS AND OPERATIONAL REVIEW
The interim results are in line with expectations and progress continues to be made in transforming Dods from a publishing company to a high-tech business services group as we emerge from the initial impacts of the current global pandemic.
Dods Technology
The business is characterised by strong recurring revenues amongst its clients and this has helped the company to weather a Covid-19 dominated first half. Whilst short term, discretionary and tactical revenue has been indirectly affected by the pandemic (down by over 70%), the recurring revenue base means the business has retained and delivered 95% of the overall revenue earned in the same period last year. During the period the business has:
· Shifted India based workers to a work from home operating model;
· Secured new 'big data' projects in the pharmaceutical and publishing spaces;
· Developed new products and delivered stronger IT support across the group as a whole;
· Undertaken significant cost reduction measures; and
· Grown several key accounts by more than 20%.
Dods Intelligence
The national UK lockdown on March 23rd and subsequent social distancing requirements have significantly impacted revenues for Dods Events (down 95%, but with improved margins) and Dods Training (down 51%), resulting in a rapid and accelerating switch from physical to virtual events and training sessions and also moving more of our media and publications from print to digital, driving higher margins. Through the period, the team have:
· Pivoted the delivery of events and training courses to virtual - with 220 training courses and 50 events delivered. This shift to virtual has resulted in higher margins due to lower delivery costs;
· Transitioned the majority of the publications to digital only during lockdown which resulted in further cost savings and are reviewing the print frequency on an ongoing basis;
· Partnered with EY on delivering Civil Service Learning contracts in addition to continuing a similar partnership with KPMG;
· Expanded the client base and now working directly with brands including Oracle, SAP, Salesforce and Dell Boomi to provide access to our niche and highly influential political audience;
· Launched partnership with Politix to on-sell our unique UK and EU monitoring product to German and Austrian clients;
· Launched a new marketing franchise called Dods Insights that brings together our editorial expertise and access across a variety of topical news stories; and
· Enacted a reduction in headcount in the events team by 30% with smaller reductions across sales and delivery teams.
The team successfully implemented the above whilst in lockdown and with staff levels reduced by 40% due to the Company benefitting from the Government furlough scheme.
Covid-19 Update
The Group continues to address the challenges of Covid-19 which is having an adverse impact on both revenues and profits particularly in our events and training businesses; which will, in part, be mitigated by strong recurring revenues within business intelligence and resilience within Dods Technology (Merit).
The majority of employees are working from home with minimal disruption to the business and this trend is expected to continue into 2021.
Going Concern
The directors have considered the implications for Going Concern and remain satisfied with the Company's funding and liquidity position. See further comments under Statement of Financial Position.
Outlook
The new team is continuing to innovate, build recurring revenues, drive margin improvements and reduce costs to support the Group's activities. Whilst it is impossible to predict the extent of the continued global uncertainty around the pandemic, the Board remains confident in the medium to long-term prospects of the Group.
Con Conlon Munira Ibrahim
Managing Director Managing Director
Dods Technology Dods Intelligence
FINANCIAL REVIEW
Income statement
The Group's revenue from continuing operations decreased by 18% to £10.2 million (H1 2020: £12.5 million) despite the benefit of a full six month trading period from the Merit acquisition (H1 2020: 2.5 months).
Across Dods Intelligence, revenues from Events declined 95% (from £4.6m to £0.2m) compared with the prior period and Training revenues declined by 51% to £0.4m over the same period as a direct consequence of the Covid-19 pandemic and Government requirements on social distancing. Monitoring and Media revenues were down 5% and 11% respectively. On a like-for-like basis revenues from Dods Technology (Merit) were up £0.1m (2%).
During the period gross profit decreased by 24% to £3.2 million (H1 2020: £4.2 million) as a result of the revenue shortfalls in Events and Training. Gross margin decreased from 34% to 31% in the period, again driven by Events and Training. Excluding these two businesses, overall margins were up 1.5%, reflecting the migration from print to digital across all media offerings.
Adjusted EBITDA decreased by £1.5 million to a loss of £0.2 million (H1 2020: £1.4 million profit). Operating loss was £2.3 million (H1 2020: £0.1 million loss), after a right-of-use assets charge of £0.7 million (H1 2020: £0.5 million), an amortisation charge of £0.4 million (H1 2020: £0.3 million) for business combinations a charge of £0.2 million (H1 2020: £0.1 million), for intangible assets depreciation charge of £0.3 million (H1 2020: £0.2 million) and non-recurring costs of £0.5 million (H1 2020: £0.3 million).
Net finance costs have increased for the period to £0.3 million (H1 2020: £0.2 million) reflecting borrowing costs associated with the £3.0 million term loan from Barclays Bank procured for the acquisition of Merit.
The taxation credit for the period was £3k (H1 2020: charge £37k).The tax charge is based on the use of accumulated tax losses.
Adjusted earnings per share, basic and diluted, from continuing operations in the period were a loss of 0.31 pence and 0.30 pence respectively (H1 2020: 0.04 pence profit) and were based on the adjusted loss for the period of £1.7 million (H1 2020: £0.2 million profit) with a weighted average number of shares in issue during the period of 564,786,453.
Earnings per share, both basic and diluted, from continuing operations in the period were a loss of 0.46 pence (H1 2020: loss of 0.08 pence) and were based on the loss after tax for the period of £2.6 million (H1 2020: loss of £0.3 million).
The Board is not proposing a dividend (H1 2020: £nil).
Statement of Financial Position
Assets
Other non-current assets consisted of goodwill of £28.8 million (FY 2020: £28.9 million), intangible assets of £11.0 million (FY 2020: £11.2 million) and tangible fixed assets of £1.9 million (FY 2020: £2.1 million).
The Group holds a 40% stake in the issued share capital of Sans Frontières Associates (SFA) and has loaned SFA £0.6 million (FY 2020: £0.6 million) at the period end. The loan is unsecured and carries no interest charge. Additionally, the Group holds a 30% stake in Social 360 at a cost of £0.5 million (FY 2020: £0.5 million).
The Group had a cash balance of £4.1 million (FY 2020: £4.4 million) and gross borrowings of £3.0 million at the period end (FY 2020: £3.0 million).
The Group has a term loan of £3.0 million (FY 2020: £3.0 million) over a 5-year period at an rate of 3.25% over LIBOR. The current amount due is £0.9 million (FY 2020: £3.0 million) and non-current is £2.1 million (FY 2020: £nil).
Current liabilities fell by £1.7 million to £16.3 million (FY 2020: £18.0 million). Excluding the term loan, the current liabilities increased primarily as a result of VAT and PAYE deferrals available as part of the UK Government's support for businesses impacted by Covid-19. £0.9m of VAT has been deferred and will be paid between April 2021 and March 2022. The Group has entered into a Time To Pay agreement with HMRC with respect to £1.3 million of PAYE that will be fully settled by March 2021.
Deferred tax liability was £0.9 million (FY 2020: £0.9 million).
Total assets of the Group were £61.1 million (FY 2020: £63.9 million) with the main movements being a reduction in debtors of £1.7 million and fall in fixed assets from amortisation and depreciation charges.
Total equity reduced by £1.5 million to £34.3 million (FY 2020: £35.8 million), reflecting the loss for the period partially offset by the issue of shares relating to deferred consideration for the acquisition of Merit.
Liquidity and capital resources
The Group has generated cash from operations of £1.6 million (H1 2020: £0.2 million) during the period primarily driven by strong debtor collections and the deferral of VAT and PAYE.
The cash position at the period end was £4.1 million (2020: £4.4 million). As at 30 September 2020 the Group had a net cash position of £1.1 million (2020: £1.4 million).
The Group continues to benefit from an excellent relationship with Barclays Bank plc; as previously reported capital payments on the £3.0 million term loan have been deferred from April to December 2020; all covenants have been waived through to January 2021 and the revolving credit facility of £2 million remains available for draw-down. The Board is confident the business has sufficient liquidity to meet its obligations, although this is an area of continued focus due to the uncertainty arising from the Covid-19 pandemic.
Simon Bullock
Chief Financial Officer
Condensed consolidated income statement
For the half year ended 30 September 2020
Note
Unaudited
Half year ended
30 Sept 2020
£'000
Unaudited
Half year ended
30 Sept 2019
£'000
Audited
Year ended
31 Mar 2020
£'000
Revenue
2
10,227
12,524
27,796
Cost of sales
(7,051)
(8,326)
(18,852)
Gross profit
3,176
4,198
8,944
Administrative expenses
(3,373)
(2,842)
(6,154)
Adjusted EBITDA
(197)
1,356
2,790
Depreciation of tangible fixed assets
(297)
(243)
(537)
Depreciation of right-of-use assets
(704)
(507)
(1,210)
Amortisation of intangible assets acquired through business combinations
(426)
(281)
(711)
Amortisation of software intangible assets
(228)
(144)
(158)
Non-recurring items
3
Non-recurring acquisition costs and
professional fees
(272)
(70)
(171)
People-related costs
(143)
(121)
(785)
Other non-recurring items
(35)
(116)
(80)
Operating loss
(2,302)
(126)
(862)
Net finance costs
(300)
(177)
(555)
Share of profit of associate
-
-
158
Loss before tax
(2,602)
(303)
(1,259)
Income tax (charge) / credit
3
(37)
76
Loss for the period
(2,599)
(340)
(1,183)
Loss per share (pence)
Basic
4
(0.46p)
(0.08p)
(0.24p)
Diluted
4
(0.46p)
(0.08p)
(0.24p)
The notes on pages 11 to 16 form part of these unaudited interim results.
Condensed consolidated statement of comprehensive income
For the half year ended 30 September 2020
Unaudited
Half year ended
30 Sept 2020
£'000
Unaudited
Half year ended
30 Sept 2019
£'000
Audited
Year ended
31 Mar 2020
£'000
Loss for the period
(2,599)
(340)
(1,183)
Items that may be subsequently reclassified to Profit and loss
Exchange differences on translation of foreign operations
117
-
6
Other comprehensive income for the period
117
-
6
Total comprehensive loss for the period
(2,482)
(340)
(1,177)
The notes on pages 11 to 16 form part of these unaudited interim results.
Condensed consolidated statement of financial position
As at 30 September 2020
Note
Unaudited
30 Sept 2020
£'000
Unaudited
30 Sept 2019
£'000
Audited
31 Mar 2020
£'000
Non-current assets
Goodwill
5
28,845
28,218
28,911
Intangible assets
6
11,042
10,245
11,238
Property, plant and equipment
7
1,879
2,286
2,134
Right-of-use asset
7,412
8,629
7,926
Investment in associates
690
503
661
Long-term loan receivable
560
630
560
Total non-current assets
50,428
50,511
51,430
Current assets
Work in progress and inventories
434
35
273
Trade and other receivables
6,088
7,010
7,819
Cash and cash equivalents
4,100
6,787
4,368
Total current assets
10,622
13,832
12,460
Total assets
61,050
64,343
63,890
Capital and reserves
Issued capital
9
19,501
19,239
19,239
Share premium
20,866
20,082
20,082
Other reserves
415
409
409
Retained loss
(6,473)
(3,148)
(3,991)
Share option reserve
85
55
75
Translation reserve
(72)
(67)
(61)
Total equity
34,322
36,570
35,753
Current liabilities
Trade and other payables
12,633
9,381
12,423
Deferred consideration
10
1,318
1,318
1,046
Bank loan
857
353
3,000
Lease liability
1,515
1,524
1,515
Total current liabilities
16,323
12,576
17,984
Non-current liabilities
Deferred tax liability
862
487
862
Deferred consideration
10
272
1,590
1,590
Bank loan
2,143
4,647
-
Lease liability
7,128
8,473
7,701
Total non-current liabilities
10,405
15,197
10,153
Total equity and liabilities
61,050
64,343
63,890
The notes on pages 11 to 16 form part of these unaudited interim results.
Condensed consolidated statement of changes in equity
For the half year ended 30 September 2020
Share capital
£'000
Share premium reserve1
£'000
Merger reserve2
£'000
Retained earnings
£'000
Translation reserve3
£'000
Share option reserve4
£'000
Total shareholders' funds
£'000
Unaudited
At 1 April 2019
17,096
8,142
409
(2,616)
(67)
55
23,019
Effect of adoption of IFRS 16 Leases
-
-
-
(192)
-
-
(192)
At 1 April 2019 (restated)
17,096
8,142
409
(2,808)
(67)
55
22,827
Total comprehensive income
Loss for the period
-
-
-
(340)
-
-
(340)
Transactions with owners
Issue of ordinary shares
2,143
11,940
-
-
-
-
14,083
At 30 September 2019
19,239
20,082
409
(3,148)
(67)
55
36,570
At 1 April 2020
19,239
20,082
409
(3,991)
(61)
75
35,753
Total comprehensive income
Loss for the year
-
-
-
(2,482)
-
-
(2,482)
Transactions with owners
Issue of ordinary shares
262
784
-
-
-
-
1,046
Other comprehensive loss
Currency translation differences
-
-
6
-
(11)
-
(5)
Share-based payment
-
-
-
-
-
10
10
At 30 September 2020
19,501
20,866
415
(6,473)
(72)
85
34,322
1 The share premium reserve represents the amount paid to the Company by shareholders above the nominal value of shares issued.
2 The merger reserve represents accounting treatment in relation to historical business combinations.
3 The translation reserve comprises foreign currency translation differences arising from the translation of financial statements of the Group's foreign entities into sterling.
4 The share option reserve represents the cumulative expense recognised in relation to equity-settled share-based payments.
The notes on pages 11 to 16 form part of these unaudited interim results.
Condensed consolidated statement of cash flows
For the half year ended 30 September 2020
Unaudited
Half year ended
30 Sept 2020
£'000
Unaudited
Half year ended
30 Sept 2019
£'000
Audited
Year ended
31 Mar 2020
£'000
Cash flows from operating activities
Loss for the period
(2,599)
(340)
(1,183)
Depreciation of property, plant and equipment
297
243
573
Depreciation of right-of-use assets
704
507
1,210
Amortisation of intangible assets acquired through business combinations
426
281
711
Amortisation of other intangible assets
228
144
158
Share-based payments charge
10
-
20
Share of profit of associate
-
-
(158)
Lease interest expense
228
200
420
Net finance costs
62
-
135
Non-recurring acquisition costs and professional fees
450
1,670
2,010
Income tax charge / (credit)
(3)
37
(76)
Operating cash flows before movement in working capital
(197)
2,742
3,784
Change in inventories
(161)
(18)
(257)
Change in trade and other receivables
1,720
(1,363)
(1,013)
Change in trade and other payables
210
(1,060)
(282)
Cash generated by operations
1,572
301
2,232
Taxation paid
3
(85)
(193)
Net cash from operating activities
1,575
216
2,039
Cash flows from investing activities
Interest and similar income received
-
-
5
Non-recurring acquisition costs and professional fees
(272)
(1,670)
(2,010)
Additions to property, plant and equipment
(304)
(45)
(187)
Additions to intangible assets
(196)
(161)
(1,400)
WIP on software not yet capitalised
-
(300)
-
Investment in subsidiaries (net of cash acquired)
(29)
(17,055)
(17,055)
Net proceeds from bank loan
-
5,000
3,000
Repayment of long-term loan by associate
-
70
140
Net cash used in investing activities
(801)
(14,161)
(17,507)
Cash flows from financing activities
Proceeds from issue of share capital
-
13,037
13,037
Interest and similar expenses paid
(300)
-
(140)
Payment of lease liabilities
(756)
(731)
(1,487)
Net cash from / (used in) financing activities
(1,056)
12,306
11,410
Net decrease in cash and cash equivalents
(282)
(1,639)
(4,058)
Opening cash and cash equivalents
4,368
8,426
8,426
Effect of exchange rate fluctuations on cash held
14
-
-
Closing cash at bank
4,100
6,787
4,368
Comprised of:
Cash and cash equivalents
4,368
6,787
4,368
Closing cash at bank
4,100
6,787
4,368
The notes on pages 11 to 16 form part of these unaudited interim results.
1. Basis of preparation
Dods Group plc is a Company incorporated in England and Wales.
This condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU. The annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU. As required by AIM Rules, the condensed set of financial statements has been prepared, and applying accounting policies and presentation that were applied in the preparation of the Group's published consolidated financial statements for the year ended 31 March 2020.
The comparative figures for the year ended 31 March 2020 have been extracted from the Group's statutory accounts for that financial period. Those accounts have been reported on by the company's auditor and delivered to the registrar of companies. The report of the auditor was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.
The taxation charge for the six months ended 30 September 2020 is based on the utilisation of accumulated tax losses.
Going concern
The Directors have considered the financial projections of the Group, including cash flow forecasts and the availability of committed bank facilities for the coming 12 months. They are satisfied that the Group has adequate resources for the foreseeable future and that it is appropriate to continue to adopt the going concern basis in preparing these interim financial statements.
Accounting estimates and judgements
The Group makes estimates and judgements concerning the future and the resulting estimates may, by definition, vary from the actual results. The Directors considered the critical accounting estimates and judgements used in the interim financial statements and concluded that the main areas of judgement are:
· Potential impairment of goodwill and other assets as a result of the impact of COVID-19; and
· Contingent deferred payments in respect of acquisitions.
The condensed set of interim financial statements have been prepared on a going concern basis and were approved by the Board on 29 November 2020.
2. Segmental information
Business segments
The Group now considers that it has two operating business segments, Dods Intelligence and Dods Technology.
Dods Intelligences' business segment concentrates on the provision of key information and insights into the political and public policy environments around the UK and the European Union.
The Dods Technology segment has extensive capability in machine learning and AI and manages the transformation of large volumes of data and information across multiple industries for some of the UK's leading business intelligence providers.
The following table provides an analysis of the Group's segment revenue by business segment.
Unaudited
Half year ended
30 Sept 2020
£'000
Unaudited
Half year ended
30 Sept 2019
£'000
Audited
Year ended
31 Mar 2020
£'000
Dods Intelligence
5,210
10,394
20,154
Dods Technology
5,017
2,130
7,642
10,227
12,524
27,796
No client accounted for more than 10 percent of total revenue.
Asset segment information has not been disclosed because this information is not reviewed by the senior management team for the purpose of allocating resources.
Note the prior year comparison for Dods Technology reflects only the post-acquisition period of 2.5 months.
3. Non-recurring items
Unaudited
Half year ended
30 Sept 2020
£'000
Unaudited
Half year ended
30 Sept 2019
£'000
Audited
Year ended
31 Mar 2020
£'000
Non-recurring acquisition costs and professional fees
272
70
171
People-related costs
143
121
785
Other
- Professional services and consultancy
-
78
45
- Other
35
38
35
450
307
1,036
4. Earnings per share
Unaudited
Half year ended
30 Sept 2020
£'000
Unaudited
Half year ended
30 Sept 2019
£'000
Audited
Year ended
31 Mar 2020
£'000
Loss attributable to shareholders
(2,599)
(340)
(1,183)
Add: non-recurring items
450
307
1,036
Add: amortisation of intangible assets acquired through business combinations
426
281
711
Add: net exchange (gains) / losses [included within net finance costs]
(12)
(61)
23
Add: share-based payment expense
10
-
20
Adjusted post-tax profit / (loss) attributable to shareholders
(1,725)
187
607
Unaudited
Half year ended
30 Sept 2020
Ordinary shares
Unaudited
Half year ended
30 Sept 2019
Ordinary shares
Audited
Year ended
31 Mar 2020
Ordinary shares
Weighted average number of shares
In issue during the period - basic
564,786,453
429,464,215
492,696,964
Adjustment for share options
1,662,000
1,812,000
1,674,500
In issue during the period - diluted
566,448,453
431,276,215
494,371,464
Unaudited
Half year ended
30 Sept 2020
Pence per share
Unaudited
Half year ended
30 Sept 2019
Pence per share
Audited
Year ended
31 Mar 2020
Pence per share
Earnings per share - continuing operations
Basic
(0.46)
(0.08)
(0.24)
Diluted
(0.46)
(0.08)
(0.24)
Adjusted earnings per share - continuing operations
Basic
(0.31)
0.04
0.12
Diluted
(0.30)
0.04
0.12
5. Goodwill
Unaudited
Half year ended
30 Sept 2020
£'000
Unaudited
Half year ended
30 Sept 2019
£'000
Audited
Year ended
31 Mar 2020
£'000
Cost and net book value
Opening balance
28,911
13,282
13,282
Acquisition of subsidiary
-
14,936
15,629
Reclass to intangibles
(66)
-
-
Closing balance
28,845
28,218
28,911
6. Intangible assets
Assets acquired through business combinations
Software
Other Capitalised Costs
Total
£'000
£'000
£'000
Cost
At 1 April 2019
23,956
3,419
-
27,375
Additions - internally generated
-
296
-
296
Additions - other
-
-
1,304
1,304
Impairment
4,086
-
-
4,086
At 31 March 2020
28,042
3,715
1,304
33,061
Reclass from goodwill
-
-
66
66
Additions - internally generated
-
30
368
398
At 30 September 2020
28,042
3,745
1,738
33,525
Accumulated amortisation
At 1 April 2019
17,710
3,244
-
20,954
Charge for the year
711
158
-
869
At 31 March 2020
18,421
3,402
-
21,823
Charge for the period
426
131
103
660
At 30 September 2020
18,847
3,533
103
22,483
Net book value
At 31 March 2019 - audited
6,246
175
-
6,421
At 31 March 2020 - audited
9,621
313
1,304
11,238
At 30 September 2020 - unaudited
9,195
212
1,635
11,042
7. Property, plant and equipment
Leasehold Improvements
Equipment and Fixtures and Fittings
Total
£'000
£'000
£'000
Cost
At 1 April 2019
2,010
1,121
3,131
Additions
15
172
187
Acquisition of subsidiary
-
421
421
At 31 March 2020
2,025
1,714
3,739
Additions
54
-
54
Disposals
-
(25)
(25)
At 30 September 2020
2,079
1,689
3,768
Accumulated depreciation
At 1 April 2019
480
588
1,068
Charge for the year
212
325
573
At 31 March 2020
692
913
1,605
Charge for the period
126
158
284
At 30 September 2020
818
1,071
1,889
Net book value
At 31 March 2019 - audited
1,530
533
2,063
At 31 March 2020 - audited
1,333
801
2,134
At 30 September 2020 - unaudited
1,261
618
1,879
8. Interest-bearing loans and borrowings
During the period, the Group maintained a term loan of £3 million (H1 2020: £3 million), over a 5-year period carrying a rate of 3.25% over LIBOR, with the first repayment of £0.2 million due on 31st December 2020.
In addition, it has access to a revolving credit facility (RCF) of £2 million carrying a rate of 3.5% over LIBOR.
9. Share Capital
9p deferred shares
Number
1p ordinary shares
Number
Total
£'000
Issued share capital as at 1 April 2020
151,998,453
555,929,713
19,239
Shares issued during the period
-
26,141,667
262
Issued share capital as at 30 Sept 2020
151,998,453
582,071,380
19,501
Holders of deferred shares do not have the right to receive notice of any general meeting of the Company or any right to attend, speak or vote at such meeting. The deferred shareholders are not entitled to receive any dividend or distribution and shall on a return of assets in a winding up of the Company entitle the holders only to the repayment of 1 penny in aggregate. The deferred shares are also incapable of transfer and no share certificates will be issued.
During the period the Company issued 26,141,667 ordinary shares related to the acquisition of Merit.
During the period the Group issued nil (2020: nil) ordinary shares on the exercise of employee share options for cash consideration of nil (2020: nil) of which £nil (2020: nil) was credited to share capital and £nil (2020: nil) to share premium.
10. Related party transactions
During the period, Artefact Partners LLP provided strategic consultancy services to Dods Group plc to the value of £nil (H1 2020: £20,000). Current non-executive director Richard Boon is an LLP designated member of Artefact Partners LLP.
During the period, the Group received a repayment of £nil (H1 2020: £70,000) on its interest free loan to its associate Sans Frontieres Associates (SFA). At 30 September 2020 the balance of this loan was £560,000 (H1 2020: £630,000).
During the period, an amount of £29,753 (H1 2020: £24,650) was payable to an associate, Social 360 Limited, in relation to profit-share for monitoring services provided. At 30 September 2020, £nil (H1 2020: £24,650) was outstanding.
On acquisition of Merit, an arm's length non-repairing 7-year lease was entered into between a Merit subsidiary (Letrim Intelligence Services Private Limited) and Merit Software Services Private Limited. Cornelius Conlon, a director of the Group, is the beneficial owner of Merit Software Services Private Limited. The lease relates to the Chennai office of Merit. During the period, payments of £339,000 (H1 2020: £158,000) were made to Merit Software Systems Private Limited in relation to the lease.
During the period the Company issued 13,333,819 ordinary shares in connection with the deferred consideration payable as part of the acquisition of Meritgroup Limited, to Con Conlon, Managing Director of the Dods Technology division.
In addition, Con Conlon was paid £220,000 due to his continued employment, post-acquisition (see note 11).
11. Contingent Liabilities
Upon the acquisition of Meritgroup Limited ("Merit") the Company became obligated, under certain conditions, to make payments to two employees of Merit. In the period £272K was paid and was reported as a non-recurring charge.
Further payments of £272K per annum could become due in July 2021 and July 2022 contingent upon their continued employment.
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