REG - Pebble Beach Sys Grp - Final Results
05/05/2022 07:00
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RNS Number : 3764K Pebble Beach Systems Group PLC 05 May 2022
This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 ("MAR") as it forms part of UK domestic law by
virtue of the European Union (Withdrawal) Act 2018 ("MAR"). Upon the
publication of this announcement, the inside information is now considered to
be in the public domain for the purposes of MAR.
Pebble Beach Systems Group plc
Final Results for the year ended 31 December 2021
Pebble Beach Systems Group plc (AIM: "PEB", "Pebble" or the "Group"), a
leading global software business specialising in playout automation and
content management solutions for the broadcast and streaming service markets,
is pleased to announce its final results for the year ended 31 December 2021.
Financial Headlines
2021 2020
Revenue £10.6m £8.4m
Gross profit £8.1m £6.4m
Gross margin 77% 77%
Adjusted EBITDA* £3.3m £2.7m
Adjusted EBITDA margin 31% 32%
Pre-tax profit for the year £1.5m £1.1m
Adjusted EPS** 1.2p 1.1p
Order Intake £13.7m £7.8m
Cash generated from operations £3.8m £2.5m
Cash conversion of adjusted EBITDA 116% 93%
Net Debt*** £5.9m £7.7m
Headlines
· Strong performance as business successfully adapted to
the Covid pandemic with revenue up 27% on 2020. Recurring revenue from support
contracts up 15% to £4.6 million, being 43% of total revenue
• Order intake was up 75% on 2020 and when adjusting for
Covid-related delays, order intake was still
up circa 17%
• Adjusted EBITDA was up 23% and cash conversion of adjusted EBITDA
improved 23 percentage points.
• Increased investment in new digital platform to establish all-IP
workflows
• Strategic move to a remote working organisation in July 2021
delivering operational benefits in terms of resilience, organisational growth
and performance. Won the UK Company Culture Award for "Remote Team of the
Year" in April 2022
• Reduced long-term bank debt by a further £1.0 million, with net
debt at year end of £5.9 million (2020: £7.7 million)
• Bank facilities re-negotiated in April 2022 with term loan
facility until 30 September 2024
• The current financial year has started in line with expectations
* Adjusted EBITDA is defined as operating profit before depreciation,
amortisation and impairment of acquired intangibles, amortisation of
capitalised development costs, share based payment expense, non-recurring
items and exchange gains or losses charged to the income statement.
**Adjusted EPS is calculated on the same basis as basic earnings per share
except for the adding back of the after-tax effect of the adjustments for
amortisation and impairment of acquired intangibles, share based payment
expense and exchange gains and losses.
*** Net debt excludes liabilities in respect of right of use assets recognised
under IRFS 16.
- ends -
For further information please contact:
Peter Mayhead - CEO +44 (0) 75 55 59 36 02
David Dewhurst - CFO
finnCap Ltd (Nominated Adviser and Broker)
Marc Milmo / Teddy Whiley - Corporate Finance +44 (0) 207 220 0500
Tim Redfern / Sunila de Silva - ECM
The Company is quoted on the LSE AIM market (PEB.L). More information can be
found at pebbleplc.com.
About Pebble Beach Systems
Pebble Beach Systems (trading as Pebble) is a world leader in designing and
delivering automation, integrated channel and virtualised playout software
solutions, with scalable products designed for applications of all sizes.
Founded in 2000, Pebble has commissioned systems in more than 70 countries,
with proven installations ranging from single up to over 150 channels in
operation, and around 2000 channels currently on air under the control of our
automation technology. An innovative, agile company, Pebble is focused on
discovering its customers' requirements and pain points, designing solutions
which will address these elegantly and efficiently, and delivering and
supporting these professionally and in accordance with its users' needs.
Forward-looking statements
Certain statements in this announcement are forward-looking. Although the
Group believes that the expectations reflected in these forward-looking
statements are reasonable, it can give no assurance that these expectations
will prove to be correct. Because these statements involve risks and
uncertainties, actual results may differ materially from those expressed or
implied by these forward-looking statements. The Group undertakes no
obligation to update any forward-looking statements whether as a result of new
information, future events or otherwise. Nothing in this announcement should
be construed as a profit forecast.
CHAIRMAN'S STATEMENT
INTRODUCTION
I am very pleased to be reporting on a year of significant achievement for the
Group.
Throughout 2021 we saw our customers' confidence return and investment
decisions that were put on hold during 2020 were clearly being re-initiated,
resulting in order intake rising 75% to £13.7 million. A proportion of this
growth can be attributed to the understandable delays to orders in 2020 that
came through in 2021, however, underlying order growth delivered in the year
was c.17%.
Observations of the market's priorities during 2021 have reaffirmed our
strongly held view that our current mission to support broadcasters by
providing technology solutions to facilitate their transition from traditional
broadcast infrastructure to more flexible IP-based technologies is
strategically correct. Consequently, we again increased the level of
investment in our new digital platform, Oceans, which has all the benefits of
a cloud native environment allowing our customers to establish all-IP
workflows whilst retaining their ability to utilise investment made in our
existing installed solutions.
We have demonstrated that our ability to operate successfully in the context
of the Covid pandemic is fully sustainable and, when coupled with the
strategic decision to adopt a remote working model, positions us as a strong,
resilient organisation that is responsive to our customers' needs.
In April 2022, we were delighted to win the UK Company Culture Award for
"Remote Team of the Year". This achievement is a testimony to the huge efforts
every employee has made since our move to fully remote working in 2021. It is
recognition of the success of our operating model changes and keeps the
momentum behind the continued improvements we are making as we realise our
vision to ensure equality of opportunity for all employees.
FINANCIAL RESULTS
Revenue was up 27% at £10.6 million (2020: £8.4 million) including recurring
revenue from support contracts up 15% to £4.6 million (2020: £4.0 million).
Recurring revenue represents 43% of total revenue and provides greater
visibility of future years' forecasts.
Gross profit was £8.1 million at a margin of 77% (2020: £6.4 million at a
margin of 77%).
Adjusted EBITDA was £3.3 million (2020: £2.7 million), representing 31% of
revenue (2020: 32%).
Conversion of profit to cash remained strong in 2021, with 116% of Adjusted
EBITDA converted to cash generated from operations (2020:93%) allowing
investment in new products and services at the same time as continuing to
reduce our levels of debt.
We continue to view investment in the development of new products and services
as key to future growth and continue to innovate by investing in new
technologies. In the year, we capitalised £1.5 million of development costs
(amortised £0.9 million), (2020: capitalised £1.3 million) (amortised £0.8
million). To evidence this, R&D expenditure as a proportion of revenue was
19% (2020: 20.8%).
Net finance costs remained level in 2021 reflecting the Group's pay-down of
£1.0 million of its revolving credit facility ("RCF") and a marginally
reduced interest rate of 3.58% (2020: 3.64%) offsetting the impact of interest
costs in the United States.
The profit before tax for the year was £1.5 million (2020: £1.1 million).
The adjusted earnings per share was 1.2p (2020: 1.1p)
Net debt (excluding IFRS 16 leases) at the year-end was reduced by £1.8
million to £5.9 million (2020: £7.7 million), comprising a much-improved
cash position at year end of £1.6 million (2020: £0.8 million) and debt of
£7.5 million (2020: £8.5 million).
New TERM LOAN April 2022
We enjoy a good relationship and regular communication with our bank,
Santander, who remain very supportive of our strategy to invest in developing
our new technology solutions. Post period end, on 13 April 2022, we were
delighted to sign a new term loan facility, refinancing the existing £7.15
million RCF agreement. The new term loan secures a £7.15 million facility
until 30 September 2024, with revised financial covenants and a repayment
schedule consistent with previous years.
MARKET POSITIONING
Pebble is a leading global software business specialising in playout
automation and content management solutions for broadcast and streaming
services markets.
The main sector within the media tech market that is served by Pebble's
software is the playout automation market. Within this sector, the customers
that we principally interact with are broadcasters, either directly or through
service providers who deliver playout services to those broadcasters, many of
whom are global organisations. These customers include companies such as Fox
News, CNBC, IMG, Phoenix Television and Globosat Canais. In addition to
playout automation, Pebble's other core software technology is the Integrated
Channel solution. These solutions have been designed to support broadcasters
and service providers to deliver their scheduled content in a reliable and
secure way. As downtime is not acceptable in the broadcast industry, playout
software is exceptional at flagging any issues, creating backup channels
(redundancy) and providing disaster recovery.
One of Pebble's key strengths is an ability to focus on collaboration with
customers to determine their requirements and design solutions which address
their needs elegantly and efficiently. During the lifecycle of the software
solution, we deliver full support services in accordance with customer
requirements.
Pebble's existing solutions consist of:
Automation: highly scalable enterprise level software solution for
broadcasters or service providers with complex workflow requirements built
around best-of-breed technology. The software allows flexible deployment
either on premises, on virtual machines or in the cloud with exceptional
levels of system resiliency.
Automation Lite: a simpler software offering optimised to allow control of up
to six channels, offering best-of-breed functionality at an entry-level price.
Integrated Channel: under the control of our Automation software this solution
provides a one-stop-shop for channel playout offering audio, video and
graphics functionality. Hosted on powerful servers, the software provides all
the functionality of a traditional broadcast chain.
Virtualised Playout: a software-only implementation of the Integrated Channel
solution, with the ability to host channels in a private data centre or public
cloud. Virtualised Playout can launch and decommission channels for short term
requirements and host operational infrastructure in a standard data centre
environment.
Playout in a box: a compact playout solution, combining a 'best of breed'
approach with an affordable price point but without the need for high levels
of flexibility. Controlling up to six channels the self-contained Playout in a
box solution is suitable for new market entrants, for testing new channels, or
as a backup or disaster recovery system for a smaller channel.
In addition to these core technology solutions, Pebble also provides
applications with discrete functionality. The current range includes:
Pebble Remote: secure, real-time access to the playout environment from
anywhere, anytime. It is easy to use with intuitive interfaces and aimed at
anyone with a Pebble solution who is seeking to control, monitor and manage
channels remotely.
Pebble Control: a recent release providing connection management of IP devices
suitable for TV stations, OB trucks, production houses or anywhere that uses
IP workflows. Control is providing Pebble with the opportunity to enter new
markets outside of the automation space.
Orchestration: a soon to be released tool for the design and management of
complex workflows. The first fully Oceans-native capability initially focussed
on replacing and significantly enhancing the file management capability
provided by the Pebble's current Automation software.
MARKET OPPORTUNITY AND PRODUCT DEVELOPMENT ROADMAP
We are very focused on recognising Pebble's core strengths and technical
capability to ensure we continue to enhance our portfolio of software
solutions to meet the evolving requirements of our customers. An industry
report from June 2020, commented that the top "Media Tech Priorities" for the
industry were: multi-platform content delivery, 4K/UHD production, IP
infrastructure, remote production and cloud-based solutions. Our directors
believe that Pebble's current range of solutions, together with the progress
being made against its product roadmap, will ensure that our technology
offering will continue to be meet these priorities:
Multi-platform content delivery
For Pebble, multi-platform content delivery is its ability to deliver complex
workflows, Video On Demand, OTT and On-demand. During the year, we supported
TV2 Denmark, who acquired rights for major sporting events including the Tour
de France, Wimbledon and the Euros, with their OTT service "TV 2 Play". We
continue to invest in the development of our Orchestration Engine, responding
to this type of market demand.
4K/UHD production
4K and UHD TV global sales have consistently increased since 2014 according to
recent industry statistics, and it is our belief that this area is becoming a
priority within the broadcast sector. Pebble has UHD installations such as the
installation at IMG Studios, a state-of-the-art broadcast production and
worldwide distribution facility based near London. Currently, these growing
signal complexities are addressed through expensive third-party hardware but
in future, Pebble's product development roadmap is focused on an in-house
developed cloud-based media processing engine, to remove the dependency on
third-party hardware.
IP infrastructure
IP infrastructure has been an area of focus for Pebble for some time, and we
continue to cement our position as the experts in IP. Our customers are
typically either transitioning to IP infrastructure from the legacy, SDI, or
are implementing IP infrastructure in a new broadcasting facility, and Pebble
supports both. Pebble Control, is a software solution for device configuration
and monitoring, designed with security at its core. In the future, Pebble's
Ocean's platform will be hosting an automation engine that is IP-native,
allowing full, public-cloud deployment.
Remote production
At the beginning of 2020, coronavirus lockdowns across the world pushed a
surge in remote working across many industries globally, the broadcast
industry included. Our web-based monitoring software, Pebble Remote, gives
customers secure, real-time access from anywhere allowing Pebble to
successfully deliver against customers' needs as they shifted to
geographically dispersed operations.
Cloud Compute
Pebble is also seeking to better address the Cloud Compute priority. We
believe the move to remote working has accelerated the move to the cloud. Over
50 percent of broadcasters have already deployed some form of cloud-based
technology with 40 percent stating they are likely to continue adoption
according to data from the IABM. At present, Pebble's technology can be
utilised through the cloud for storage and hosting capabilities. To further
enhance our offering, the Oceans platform is being designed to provide
customers with software that is fundamentally cloud-centric.
Having regard to the key trends being seen in the industry, and the undoubted
market opportunity before it, the Board remains focussed on delivering against
its product development roadmap of:
(i) Oceans Automation; an automation only capability to replace the current
playout automation offering with a secure cloud-native solution.
(ii) Media Processing Engine; to reduce the requirement for hardware to
provide video playout capability. By developing a software solution, this will
enable Pebble to provide a fully cloud native integrated channel capability.
(iii) Pebble Control; by accelerating the ongoing development of its IP
control tool, the directors believe that this will provide the opportunity to
target the product into any market requiring IP network-based device control.
GOING CONCERN
The directors are required to assess the Company's and the Group's ability to
continue to trade as a going concern.
At 31 December 2021, the Group's net debt was £5.9 million (2020: £7.7
million), comprising cash of £1.6 million (2020: £0.8 million) and the drawn
down RCF from Santander of £7.5 million (2020: £8.5 million).
We enjoy a close relationship with our bank and have regular review meetings
with them. On 10 March 2021, we signed a 12-month extension to the RCF and
have made all the required repayments of capital and interest due and met the
financial covenants. On 13 April 2022, we signed a new term loan through to 30
September 2024, which re-financed the existing £7.15m RCF at the same level
of commitment, with repayment levels consistent with previous years and
appropriate financial covenants.
To assess the appropriateness of preparing financial statements on a going
concern basis, management prepared detailed projections of the consolidated
income statements, balance sheets and cash flow statements through to 31
December 2023. This review period extends to the end of the financial year for
2023, which is looking forward for four six-month periods beyond that covered
by the current annual report. The projections included testing against the
minimum liquidity and cash flow cover covenants required by the new term loan
facility.
These projections used the budget for 2022 and updated for current trading and
forecasts. This analysis was then extended to the end of 2023. The projections
were stress tested and pipeline project orders for 2022, at less than 50%
probability were removed. The pipeline for 2023 was assessed based on historic
conversion rates. The existing support service contracts, where revenue is
recognised over time were assessed based on historic renewal rates, to
establish the likely renewal of this recurring revenue. Management reviewed
the resource levels and marketing spend required to support the reduced
revenue and reflected cost reductions in the forecast. The Board has concluded
from its thorough assessment of the detailed forecasts, that the Group will
have sufficient resources to meet its liabilities during the review period
through to 31 December 2023, that it will meet the bank covenants and that it
is appropriate that the Group and the Company prepare accounts on a going
concern basis.
BOARD CHANGES
As previously announced on 4 May 2021, we were pleased to appoint Chris
Errington to the Board as Non-Executive Director.
TRADING OUTLOOK
The current financial year has started in line with expectations. Pebble has
demonstrated its resilience throughout the global pandemic and more recently
in its response to the ongoing supply chain stresses and the Ukrainian
conflict. We are confident in our strategy and encouraged by the increasing
level of recurring revenue and the continued strengthening of the balance
sheet.
Fundamentally, the business is in good shape and we remain focussed on
ensuring we provide our customers with the technology and high level of
service that they expect from Pebble. We will continue to invest in enhancing
our solutions and we look forward to the future with optimism.
John Varney
Non-Executive Chairman
For the year ended 31 December 2021
CONSOLIDATED GROUP INCOME STATEMENT
for the year ended 31 December 2021
2021 2020
Notes £000 £000
Revenue 4 10,620 8,393
Cost of sales (2,490) (1,964)
Gross profit 8,130 6,429
Sales and marketing expenses (1,777) (1,687)
Research and development expenses (1,417) (1,263)
Administrative expenses (2,782) (1,870)
Foreign exchange (losses)/gains (40) 15
Other expenses (244) (156)
Operating profit 5 1,870 1,468
Operating profit/ is analysed as:
Adjusted EBITDA 3,282 2,670
Non-recurring items 5 (244) -
Share based payment expense (53) (12)
Exchange (losses)/gains (charged)/credited to the income statement (40) 15
Earnings before interest, tax, depreciation and amortisation (EBITDA) 2,945 2,673
Depreciation (160) (234)
Amortisation and impairment of acquired intangibles - (156)
Amortisation of capitalised development costs (915) (815)
Finance costs 6 (373) (374)
Finance income 6 - 1
Profit before tax 1,497 1,095
Tax 7 (31) 199
Net result for the year 1,466 1,294
Earnings per share from continuing operations attributable to the owners of
the parent during the year
Basic earnings per share 8 1.2p 1.0p
Diluted earnings per share 8 1.2p 1.0p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2021
2021 2020
£000 £000
Profit for the financial year 1,466 1,294
Other comprehensive income - items that may be reclassified subsequently to
profit or loss:
Exchange differences on translation of overseas operations
- continuing operations (1) 26
Total profit for the year attributable to owners of the parent 1,465 1,320
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
for the year ended 31 December 2021
Ordinary shares Share Capital Merger Translation Accumulated losses Total
£000 premium redemption reserve reserve £000 £000
£000 reserve £000 £000
£000
At 1 January 2020 3,115 6,800 617 29,778 (176) (44,976) (4,842)
Share based payments: value of employee services - - - - - 12 12
Unclaimed dividends - - - - - 44 44
Transactions with owners - - - - - 56 56
Retained profit for the year - - - - - 1,294 1,294
Exchange differences on translation of overseas operations - - - - 26 - 26
Total comprehensive income for the period - - - - 26 1,294 1,320
At 31 December 2020 3,115 6,800 617 29,778 (150) (43,626) (3,466)
At 1 January 2021 3,115 6,800 617 29,778 (150) (43,626) (3,466)
Share based payments: value of employee services - - - - - 53 53
Transactions with owners - - - - - 53 53
Retained profit for the year - - - - - 1,466 1,466
Exchange differences on translation of overseas operations - - - - (1) - (1)
Total comprehensive income for the period - - - - (1) 1,466 1,465
At 31 December 2021 3,115 6,800 617 29,778 (151) (42,107) (1,948)
CONSOLIDATED GROUP STATEMENT OF FINANCIAL POSITION
as at 31 December 2021
2021 2020
Notes £000 £000
Assets
Non-current assets
Intangible assets 5,601 5,001
Property, plant and equipment 349 1,208
5,950 6,209
Current assets
Inventories 430 148
Trade and other receivables 3,632 3,125
Cash and cash equivalents 1,639 826
5,701 4,099
Liabilities
Current liabilities
Financial liabilities - borrowings 1,200 1,800
Trade and other payables 5,832 4,059
Lease liabilities - current 173 145
7,205 6,004
Net current liabilities (1,504) (1,905)
Non-current liabilities
Financial liabilities - borrowings 6,350 6,750
Lease liabilities - non-current 44 1,020
6,394 7,770
Net liabilities (1,948) (3,466)
Equity attributable to owners of the parent
Ordinary shares 10 3,115 3,115
Share premium account 10 6,800 6,800
Capital redemption reserve 10 617 617
Merger reserve 29,778 29,778
Translation reserve (151) (150)
Retained earnings (42,107) (43,626)
Total deficit (1,948) (3,466)
CONSOLIDATED GROUP STATEMENT OF CASH FLOWS
for the year ended 31 December 2021
2021 2020
Notes £000 £000
Cash flows from operating activities
Cash generated from operations 9 3,815 2,484
Interest paid (373) (374)
Taxation paid (31) (46)
Net cash from operating activities 3,411 2,064
Cash flows from investing activities
Interest received - 1
Purchase of property, plant and equipment (82) (107)
Expenditure on capitalised development costs (1,515) (1,301)
Net cash used in investing activities (1,597) (1,407)
Cash flows from financing activities
Cash used in repayment of financing activities 11 (1,000) (1,000)
Net cash used in financing activities (1,000) (1,000)
Net increase/(decrease) in cash and cash equivalents 814 (343)
Effect of foreign exchange rate changes 11 (1) 25
Cash and cash equivalents at 1 January 826 1,144
Cash and cash equivalents at 31 December 1,639 826
Net debt comprises:
Cash and cash equivalents 1,639 826
Borrowings (7,550) (8,550)
Net debt at 31 December 11 (5,911) (7,724)
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
for the year ended 31 December 2021
1. GENERAL INFORMATION
The Pebble Beach Systems Group is a leading global software business
specialising in solutions for playout automation, and content serving
customers in the broadcast markets.
The Company is a public limited company and is quoted on the Alternative
Investment Market (AIM) of the London stock exchange. The Company is
incorporated and domiciled in the UK. The address of its registered office is
12 Horizon Business Village, 1 Brooklands Road, Weybridge, Surrey, KT13 0TJ.
The registered number of the Company is 04082188.
This results announcement was approved for issue at close of business on 4 May
2022.
2. BASIS OF PREPARATION
The financial information contained in these condensed financial statements
does not constitute the Group's statutory accounts within the meaning of the
Companies Act 2006.
Statutory accounts for the year ended 31 December 2021 and 31 December 2020
have been reported on by Grant Thornton UK LLP, with an unqualified audit
opinion.
Whilst the financial information included in this Annual Financial Results
announcement has been computed in accordance with International Financial
Reporting Standards (IFRS) this announcement, due to its condensed nature,
does not itself contain sufficient information to comply with IFRS.
Statutory accounts for the year ended 31 December 2020 have been delivered to
the Registrar of Companies. The statutory accounts for the year ended 31
December 2021, prepared under IFRS, will be available on the Group's
website: https://www.pebbleplc.com and will be delivered to the Registrar
in due course. The Group's principal accounting policies as set out in the
2020 statutory accounts have been applied consistently in all material
respects.
3. GOING CONCERN
The directors are required to assess the Company's and the Group's ability to
continue to trade as a going concern.
At 31 December 2021, the Group's net debt was £5.9 million (2020: £7.7
million), comprising cash of £1.6 million (2020: £0.8 million) and the drawn
down RCF from Santander of £7.5 million (2020: £8.5 million).
We enjoy a close relationship with our bank and have regular review meetings
with them. On 10 March 2021, we signed a 12-month extension to the RCF and
have made all the required repayments of capital and interest due and met the
financial covenants. On 13 April 2022, we signed a new term loan through to 30
September 2024, which re-financed the existing £7.15m RCF at the same level
of commitment, with repayment levels consistent with previous years and
appropriate financial covenants.
To assess the appropriateness of preparing financial statements on a going
concern basis, management prepared detailed projections of the consolidated
income statements, balance sheets and cash flow statements through to 31
December 2023. This review period extends to the end of the financial year for
2023, which is looking forward for four six-month periods beyond that covered
by the current annual report. The projections included testing against the
minimum liquidity and cash flow cover covenants required by the new term loan
facility.
These projections used the budget for 2022 and updated for current trading and
forecasts. This analysis was then extended to the end of 2023. The projections
were stress tested and pipeline project orders for 2022, at less than 50%
probability were removed. The pipeline for 2023 was assessed based on historic
conversion rates. The existing support service contracts, where revenue is
recognised over time were assessed based on historic renewal rates, to
establish the likely renewal of this recurring revenue. Management reviewed
the resource levels and marketing spend required to support the reduced
revenue and reflected cost reductions in the forecast. The Board has concluded
from its thorough assessment of the detailed forecasts, that the Group will
have sufficient resources to meet its liabilities during the review period
through to 31 December 2023, that it will meet the bank covenants and that it
is appropriate that the Group and the Company prepare accounts on a going
concern basis.
4. SEGMENTAL REPORTING
The Group's internal organisational and management structure and its system of
internal financial reporting to the Board of Directors comprise of Pebble
Beach Systems Limited and PLC costs. The chief operating decision-maker has
been identified as the Board.
The Board reviews the Group's internal financial reporting in order to assess
performance and allocate resources. Management have therefore determined that
the operating segments for the Group will be based on these reports.
The Pebble Beach Systems Limited business is responsible for the sales and
marketing of all Group software products and services.
The table below shows the analysis of Group external revenue and operating
profit from continuing operations by business segment.
Pebble Beach Systems PLC Total
costs £000
Year to 31 December 2021
Broadcast 10.620 - 10,620
Total revenue 10,620 - 10,620
Adjusted EBITDA 3,862 (580) 3,282
Depreciation (160) - (160)
Non-recurring items (244) - (244)
Amortisation of capitalised development costs (915) - (915)
Share based payment expense - (53) (53)
Exchange losses (40) - (40)
Finance costs (81) (292) (373)
Intercompany finance income/(costs) 107 (107) -
Profit/(loss) before taxation 2,529 (1,032) 1,497
Taxation (298) 267 (31)
Profit/(loss) for the year being attributable to owners of the parent 2,231 (765) 1,466
Year to 31 December 2020
Broadcast 8,393 - 8,393
Total revenue 8,393 - 8,393
Adjusted EBITDA 3,234 (564) 2,670
Depreciation (234) - (234)
Amortisation of acquired intangibles (156) - (156)
Amortisation of capitalised development costs (815) - (815)
Share based payment expense - (12) (12)
Exchange (losses)/gains (3) 18 15
Finance costs (40) (334) (374)
Finance income 1 - 1
Intercompany finance income/(costs) 217 (217) -
Profit/(loss) before taxation 2,204 (1,109) 1,095
Taxation (152) 351 199
Profit/(loss) for the year being attributable to owners of the parent 2,052 (758) 1,294
Geographic external revenue analysis
The revenue analysis in the table below is based on the geographical location
of the customer for continuing operations of the business.
2021 2020
Total Total
£000 £000
By market
UK & Europe 6,385 4,855
North America 927 842
Latin America 567 333
Middle East and Africa 1,940 2,114
Asia / Pacific 801 249
10,620 8,393
Net assets
The table below summarises the net assets of the Group by division. Balance
sheet reporting is disclosed by the divisional assets and liabilities of the
Group as this is consistent with the presentation of internal information
provided to the Executive Management Board and the Board of Directors.
concern
2021 2020
£000 £000
By division:
Pebble Beach Systems 5,860 5,018
PLC costs (7,808) (8,484)
(1,948) (3,466)
5. OPERATING PROFIT
The following items have been included in arriving at the operating profit for
the continuing business:
2021 2020
£000 £000
Charge of inventory 1,288 644
Director and employee costs 5,888 4,782
Depreciation of property, plant and equipment 160 234
Amortisation of acquired intangibles - 156
Non-recurring items 244 -
Exchange loss/(gain) charged/(credited) to the income statement 40 (15)
Research and development expenditure expensed in the year which includes: 1,417 1,263
Other expenses
Other expenses comprise:
2021 2020
£000 £000
Amortisation of acquired intangibles - 156
Non-recurring items 244 -
244 156
Non-recurring items
The following items are excluded from management's assessment of profit
because by their nature they could distort the annual trend in the Group's
earnings. These are excluded to reflect performance in a consistent manner and
are in line with how the business is managed and measured on a day-to-day
basis:
2021 2020
£000 £000
Provision for costs of transition to remote working 244 -
6. FINANCE COSTS - NET
2021 2020
£000 £000
Interest expense for bank borrowing 292 334
Interest expense for leasing arrangements 40 40
Other interest costs 41 -
Finance costs 373 374
Finance income - (1)
Finance costs - net 373 373
Finance income is derived from cash held on deposit.
7. INCOME TAX EXPENSE
2021 2020
£000 £000
Current tax
UK corporation tax - -
Foreign tax - current year 31 35
Adjustments in respect of prior years - 11
Total current tax 31 46
Deferred tax
UK corporation tax - (276)
Effect of changes in UK tax rate - 26
Adjustments in respect of prior years - 5
Total deferred tax - (245)
Total taxation 31 (199)
In the Spring Budget 2021, the Government announced that from 1 April 2023 the
corporation tax rate would increase from 19 per cent to 25 per cent. Deferred
taxes at the balance sheet date have been measured using these enacted tax
rates and reflected in these financial statements.
8. EARNINGS PER ORDINARY SHARE (EPS)
Basic earnings per share is calculated by dividing the earnings attributable
to ordinary shareholders by the weighted average number of ordinary shares
outstanding during the year.
For diluted earnings per share the weighted average number of ordinary shares
in issue is adjusted to assume conversion of all dilutive potential ordinary
shares. The dilutive shares are those share options granted to employees where
the exercise price is less than the average market price of the Company's
ordinary shares during the year. The average market value of the Company's
shares for the purpose of calculating the dilutive effect of share options was
based on quoted market prices for the year during which the options were
outstanding.
2021 2020
Weighted Weighted
average average
number number
of shares of shares
000s 000s
Weighted-average number of ordinary shares (basic) 124,477 124,477
Effect of LTIPs outstanding 100 100
Effect of share options outstanding 1,198 2,285
Weighted-average number of ordinary shares (diluted) at 31 December 125,775 126,862
Reconciliations of the earnings and weighted average number of shares used in
the calculations are set out below.
2021 2020
Earnings Weighted Earnings Earnings Weighted Earnings
£000 average per share £000 average per share
number pence number pence
of shares of shares
000s 000s
Basic earnings per share
Profit attributable to continuing operations 1,466 1.2p 1,294 1.0p
Basic earnings per share 1,466 124,477 1.2p 1,294 124,477 1.0p
Diluted earnings per share
Profit attributable to continuing operations 1,466 1.2p 1,294 1.0p
Diluted earnings per share 1,466 125,775 1.2p 1,294 126,862 1.0p
Potential ordinary shares were non-dilutive in prior years because they would
decrease the loss per share from continuing operations.
Adjusted earnings
The directors believe that adjusted EBITDA, adjusted earnings and adjusted
earnings per share provide additional useful information on annual trends to
shareholders. These measures are used by management for internal performance
analysis and incentive compensation arrangements. The term "adjusted" is not a
defined term used under IFRS and may not therefore be comparable with
similarly titled profit measurements reported by other companies. The
principal adjustments to earnings are made in respect of the amortisation of
acquired intangibles, share based payment expense and exchange gains or losses
charged to the income statement and their related tax effects.
The reconciliation between reported and adjusted earnings and basic earnings
per share is shown below:
2021 2020
Earnings Earnings
£000 £000
Pence Pence
Reported earnings and EPS 1,466 1.2p 1,294 1.0p
Amortisation of acquired intangibles after tax - 0.0p 126 0.1p
Share based payment expense 53 0.0p 12 0.0p
Exchange (gains)/losses 32 0.0p (12) 0.0p
Adjusted earnings and EPS 1,551 1.2p 1,420 1.1p
9. CASH FLOW GENERATED FROM OPERATING ACTIVITIES
Reconciliation of profit before taxation to net cash flows from operations.
2021 2020
£000 £000
Profit before tax - continuing operations 1,497 1,095
Depreciation of property, plant and equipment 160 234
Amortisation and impairment of development costs 915 815
Amortisation and impairment of acquired intangibles - 156
Non-recurring item 244 -
Share-based payment expense 53 12
Finance income - (1)
Finance costs 373 374
Increase in inventories (282) (8)
(Increase)/decrease in trade and other receivables (507) 343
Increase/(decrease) in trade and other payables 1,362 (536)
Cash generated from operations 3,815 2,484
10. CALLED UP SHARE CAPITAL, SHARE PREMIUM AND CAPITAL REDEMPTION RESERVE
Number of shares Share Capital Share Premium Capital redemption reserve Total
£000
000 £000 £000
£000
At 1 January 2021 124,603 3,115 6,800 617 10,532
Share issues - - - - -
At 31 December 2021 124,603 3,115 6,800 617 10,532
11. NET DEBT
Reconciliation of decrease in cash and cash equivalents to movement in net
cash:
Net cash and cash equivalents Other borrowings Total net cash
£000 £000 £000
At 1 January 2021 826 (8,550) (7,724)
Cash flow for the year before financing 1,814 - 1,814
Movement in borrowings in the year (1,000) 1,000 -
Exchange rate adjustments (1) - (1)
Cash and cash equivalents at 31 December 2021 1,639 (7,550) (5,911)
12. POST BALANCE SHEET EVENT
New TERM LOAN
We maintain a good relationship and regular communication with our bank,
Santander, who remain very supportive of our strategy to invest in developing
our new technology solutions. On 13 April 2022, a new term loan facility was
signed, refinancing the existing £7.15 million revolving credit facility
agreement. The new term loan secures a £7.15 million facility until 30
September 2024, with revised financial covenants and a repayment schedule
consistent with previous years.
The Board is pleased to confirm that following the publication of its audited
results for the year ended 31 December 2021, the annual report and financial
statements will be posted to shareholders by 23 May 2022 and a copy will also
be available to download from the Group's website at pebbleplc.com.
Ends
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