REG - Pebble Beach Sys Grp - Final Results
26/04/2023 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:20230426:nRSZ4462Xa&default-theme=true
RNS Number : 4462X Pebble Beach Systems Group PLC 26 April 2023
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. 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 2022
Pebble Beach Systems Group plc (AIM: "PEB", "Pebble" or the "Group"), a
leading global software business specialising in playout automation, content
management and IP Control solutions for the broadcast and streaming service
markets, is pleased to announce its final results for the year ended 31
December 2022.
Financial Headlines
2022 2021
Revenue £11.2m £10.6m
Gross profit £8.3m £8.1m
Gross margin 75% 77%
Adjusted EBITDA* £3.2m £3.3m
Adjusted EBITDA margin 28% 31%
Pre-tax profit for the year £1.2m £1.5m
Adjusted EPS** 1.1p 1.4p
Order Intake £11.3m £13.7m
Cash generated from operations £2.5m £3.8m
Cash conversion of adjusted EBITDA 79% 116%
Net Debt*** £5.8m £5.9m
Headlines
· Delivered results in line with market expectations,
with revenue of £11.2 million (FY21: £10.6 million) and adjusted* EBITDA of
£3.2 million (FY21: £3.3 million), despite continued tough economic
conditions.
· Strong second half of the year
o H2 2022 revenue up 7% on H2 2021
o H2 Revenue of £6.2 million up 22% on H1 Revenue (£5.0 million)
o H2 EBITDA of £1.9 million being 44% up on H1 (£1.3 million).
· Gross profit continued to increase YoY, with a 2.5%
uplift to £8.3m, at a margin of 75% (FY21: 77%)
· Recurring revenue from support contracts up 1% to £4.6
million (FY21: £4.6 million), being 41% of total revenue.
· Orders of £11.3 million (FY21: £13.7 million) were
18% down on FY21 a year that benefited from orders that were delayed from
FY20. On a FY21 timings-adjusted order intake (excluding the orders delayed
from FY20), orders were down 3% year on year.
• The year closed with a strong order intake, setting up a confident
start to FY23 revenue. H2 orders of £6.3 million, 25% up on H1 order intake
(H1: £5.0 million).
• Increased investment in our cloud-native solutions to support
broadcasters transition to IP-based technology. R&D spend of £1.8 million
in the year, 19% up on 2021 (2021: £1.5 million).
• Increased investment in Sales and Marketing activities to support
the increasing market opportunities we are seeing.
• The Group continues to reduce bank debt, with a further £1.0
million reduction in gross debt from £7.5 million at the end of FY21 to £6.5
million at the end of FY22. Net debt at year end was £5.8 million (2021:
£5.9 million).
• Bank facilities re-negotiated in April 2022 with a term loan
facility until 30 September 2024.
• The current financial year has started in line with the Board's
expectations.
John Varney, Non-Executive Chairman, commented:
"I am delighted by the performance of the Group over the year. Notwithstanding
the undoubted macro-economic headwinds, the Group has continued to deliver
against expectations and its portfolio of products remain essential to the
broadcast and streaming service markets.
We continue to invest in our technology with a product roadmap very much
focussed on delivering the IP based cloud native products that the industry is
seeking. Given the strength of our order book as we exited 2022, and how we
have traded in the first quarter of the current financial year, we look
forward to continuing the progress being made by the Group".
* 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, non-recurring items 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
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 pleased to report on a good year for the business despite the ongoing
challenging economic climate.
In addition to this disruptive macro environment, the business has also had to
contend with the challenge of long hardware lead times caused by the ongoing
global shortage of semiconductors where demand continued to exceed supply,
affecting supply chains across many industries. Customers also remained
cautious around placing orders, particularly during the 1(st) half of the
year.
To finish the year in line with market expectations, therefore, is a great
achievement and it is encouraging that we are seeing the market begin to open
up. At the same time, we have seen a sense of positivity in the business
environment during the second half of 2022 following the return of
face-to-face trade shows where we have been able to strengthen our
longstanding relationships and bonds with our customers and end users.
We are pleased to have seen order intake increase by 25% in H2 FY22 vs. H1
FY22. This has set up FY23 where we started the year with a strong revenue
forecast given the position of the order book. This, together with a large
pipeline of opportunities and our high recurring revenues, provides an
encouraging outlook as we focus on 2023.
We continue to invest in R&D to provide innovative solutions that support
broadcasters as they make the transition to more flexible IP-based
technologies.
We increased investment in Oceans, our new digital platform, 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. In addition, in 2022 we launched 'Pebble Control
Free' as a new product, which provides free of charge entry-level access to
Pebble Control; a self-contained, scalable, IP-native connection management
solution for the broadcast community. This freemium version encourages users
to explore how easy it is to manage and connect IP devices using the resources
available via Pebble's new self-service portal. It is available to end users
and vendors, filling an important gap in the IP technology stack with the aim
of making IP connectivity as simple as SDI.
Financials
Revenue in FY22 was up 5.2% at £11.2 million (2021: £10.6 million) including
recurring revenue from support contracts up 0.7% to £4.6 million (2021: £4.6
million). I am pleased to report that recurring revenue represents 41% (2021:
43%) of total revenue and provides good visibility of future years'
forecasts.
Gross profit was £8.3 million at a margin of 75% (2021: £8.1 million at a
margin of 77%).
Adjusted EBITDA was £3.2 million (2021: £3.3 million), representing 28% of
revenue (2021: 31%). The decrease in margin is a result of planned
investment in headcount and we are expecting this margin to now stabilise.
Conversion of profit to cash remained strong in 2022 with 79% of Adjusted
EBITDA converted to cash generated from operations (2021: 116%) allowing our
continued investment in new products and services at the same time as
continuing to reduce our levels of debt. If we adjust for the non-recurring
cash items of £0.3 million, conversion of profit to cash would be 88%.
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 £1.8 million of development costs
(amortised £1.1 million), (2021: capitalised £1.5 million and amortised
£0.9 million). R&D expenditure as a proportion of revenue was 22%
(2021: 19%).
Net finance costs increased in 2022 reflecting the Group's pay-down of £1.0
million of its term loan which was more than offset by an increased interest
rate of 5.23% (2021: 3.58%). Adjusted profit before tax was £1.4million
(FY21: £1.7 million) and adjusted earnings per share was 1.1p (2021: 1.4p)
The profit before tax for the year was £1.2 million (2021: £1.5 million) as
a result of a planned increased investment in headcount and non-recurring
costs including professional fees incurred in pursuit of a VCT fund raise
after the Group received advice that we met the qualifying rules to raise such
funding.
Net debt (excluding IFRS 16 leases) at the year-end was reduced by £0.1
million to £5.8 million (2021: £5.9 million), comprising a reduced cash
position at year end of £0.7 million (2021: £1.6 million) and our gross debt
being reduced by £1.0 million to £6.5 million (2021: £7.5 million).
TERM LOAN
We continue to enjoy a good relationship with our bank, Santander, who remain
very supportive of our strategy to reduce our debt position whilst having the
flexibility to invest in developing our new technology solutions. On 13 April
2022, we were delighted to sign a new term loan facility, refinancing the
existing £7.15 million revolving credit facility agreement. The new term loan
secured an initial £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 and IP Control 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 via secure
web interfaces 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 native capability based on Pebble's Oceans
technology platform, initially focussed on replacing and significantly
enhancing the file management capability provided by 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.
We 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 to support our customers' linear and on-demand requirements, Video
On Demand, OTT and On-demand. 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 legacy SDI
deployments or are implementing IP infrastructures in a new broadcasting
facility or greenfield site, and Pebble supports both. Pebble Control is a
software solution designed to manage the connectivity of IP devices and is
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 management and 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 Group's ability to continue to trade
as a going concern. The details of this review are covered in the extract from
the Notes to the Financial Statements below. The Board 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 August 2024 and that it is appropriate that the Group prepare accounts
on a going concern basis.
BOARD CHANGES
As previously announced on 23 August 2022, David Dewhurst resigned as a
Director of the Company and left the executive role of Chief Finance Officer.
For the foreseeable future the CFO will not be replaced and the finance
function, headed up by Paul Inzani our Head of Finance, will report to the
CEO.
Graham Pitman, Senior Independent Non-Executive Director, has notified the
Board of his intention to stand down at the end of April 2023. Graham has been
with the Group for five years and has provided an invaluable breadth of
industry experience in both the traditional and new technologies segments. The
Board do not intend to recruit a replacement. Richard Logan, who has been with
the Group for three years, will become Senior Independent Non-Executive
Director at the end of April.
TRADING OUTLOOK
The current financial year has started in line with the Board's expectations.
The Group has demonstrated its resilience throughout the economic downturn and
the ongoing supply chain stresses. Although the broadcast market continues to
be challenging, we remain confident in our strategy and encouraged by the
continued strengthening of the Group's revenues and financial position and
increasing level of recurring revenue.
John Varney
Non-Executive Chairman
For the year ended 31 December 2022
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2022
2022 2021
Notes £000 £000
Revenue 4 11,167 10,620
Cost of sales (2,821) (2,490)
Gross profit 8,346 8,130
Sales and marketing expenses (2,234) (1,777)
Research and development expenses (1,696) (1,417)
Administrative expenses (2,789) (3,066)
Operating profit 5 1,627 1,870
Operating profit is analysed as:
Adjusted EBITDA 3,166 3,282
Non-recurring items 5 (362) (244)
Share based payment expense (53) (53)
Exchange gains/(losses) credited/(charged) to the income statement 145 (40)
Earnings before interest, tax, depreciation and amortisation (EBITDA) 2,896 2,945
Depreciation (168) (160)
Amortisation of capitalised development costs (1,101) (915)
Operating profit 1,627 1,870
Finance costs (432) (373)
Finance income - -
Profit before tax 1,195 1,497
Tax 6 (13) (31)
Net result for the year 1,182 1,466
Earnings per share from continuing operations attributable to the owners of
the parent during the year
Basic earnings per share 7 0.9p 1.2p
Diluted earnings per share 7 0.9p 1.2p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2022
2022 2021
£000 £000
Profit for the financial year 1,182 1,466
Other comprehensive income - items that may be reclassified subsequently to
profit or loss:
Exchange differences on translation of overseas operations
- continuing operations (34) (1)
Total profit for the year attributable to owners of the parent 1,148 1,465
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
for the year ended 31 December 2022
Ordinary shares Share Capital Merger Translation Accumulated losses Total
£000 premium redemption reserve reserve £000 £000
£000 reserve £000 £000
£000
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 employees - - - - - 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)
At 1 January 2022 3,115 6,800 617 29,778 (151) (42,107) (1,948)
Share based payments: value of employee services - - - - - 53 53
Transactions with employees - - - - - 53 53
Retained profit for the year - - - - - 1,182 1,182
Exchange differences on translation of overseas operations - - - - (34) - (34)
Total comprehensive income for the period - - - - (34) 1,182 1,148
At 31 December 2021 3,115 6,800 617 29,778 (185) (40,872) (747)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2022
2022 2021
Notes £000 £000
Assets
Non-current assets
Intangible assets 6,307 5,601
Property, plant and equipment 571 349
Other non-current assets 38 -
6,916 5,950
Current assets
Inventories 497 430
Trade and other receivables 3,526 3,632
Current tax assets 8 -
Cash and cash equivalents 728 1,639
4,759 5,701
Liabilities
Current liabilities
Financial liabilities - borrowings 935 1,200
Trade and other payables 5,716 5,832
Lease liabilities - current 96 173
6,747 7,205
Net current liabilities (1,988) (1,504)
Non-current liabilities
Financial liabilities - borrowings 5,550 6,350
Lease liabilities - non-current 125 44
5,675 6,394
Net liabilities (747) (1,948)
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 (185) (151)
Retained earnings (40,872) (42,107)
Total deficit (747) (1,948)
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2022
2022 2021
Notes £000 £000
Cash flows from operating activities
Cash generated from operations 9 2,511 3,815
Interest paid (432) (373)
Taxation paid (21) (31)
Net cash from operating activities 2,058 3,411
Cash flows from investing activities
Purchase of property, plant and equipment (193) (82)
Expenditure on capitalised development costs (1,807) (1,515)
Net cash used in investing activities (2,000) (1,597)
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 (decrease)/increase in cash and cash equivalents (942) 814
Effect of foreign exchange rate changes 11 31 (1)
Cash and cash equivalents at 1 January 1,639 826
Cash and cash equivalents at 31 December 728 1,639
Net debt comprises:
Cash and cash equivalents 728 1,639
Borrowings (6,485) (7,550)
Net debt at 31 December 11 (5,757) (5,911)
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
for the year ended 31 December 2022
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
Unit 1, First Quarter, Blenheim Road, Epsom, Surrey, KT19 9QN.
The registered number of the Company is 04082188.
This results announcement was approved for issue at close of business on 25
April 2023.
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 2022 and 31 December 2021
have been reported on by CLA Evelyn Partners Limited and Grant Thornton UK LLP
respectively, with an unmodified 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 2021 have been delivered to
the Registrar of Companies. The statutory accounts for the year ended 31
December 2022, 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
2021 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 2022, the Group's net debt was £5.8 million (2021: £5.9
million), comprising cash of £0.7 million (2021: £1.6 million) and the term
loan from Santander of £6.5 million (2021: £7.5 million).
We enjoy a close relationship with our bank and have regular review meetings
with them. On 13 April 2022, we signed a new term loan through to 30 September
2024, which re-financed the existing £7.15 million revolving credit facility
at the same level of commitment, with repayment levels consistent with
previous years and appropriate financial covenants.
The directors are confident that any loan extensions required post September
2024 would be granted given the historic track record.
To assess the appropriateness of preparing financial statements on a going
concern basis, management prepared detailed projections of the consolidated
income statements, the statement of financial position and cash flow
statements through to 31 August 2024. This review period extends to the end of
the financial year for 2024, 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 2023 and were updated for current
trading and forecasts. This analysis was then extended to the end of 2024. The
projections were stress tested in two ways. Pipeline orders for 2023 at less
than 50% probability were removed and a 20% reduction in SLA renewals in 2023.
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. Despite a 20% drop in SLA renewals management proved
the business is still functional. 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
August 2024, 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 2022
Broadcast 11,167 - 11,167
Total revenue 11,167 - 11,167
Adjusted EBITDA 4,051 (885) 3,166
Depreciation (168) - (168)
Non-recurring items 66 (428) (362)
Amortisation of capitalised development costs (1,101) - (1,101)
Share based payment expense - (53) (53)
Exchange gains 145 - 145
Finance costs (20) (412) (432)
Intercompany finance income/(costs) 211 (211) -
Profit/(loss) before taxation 3,184 (1,989) 1,195
Taxation (223) 210 (13)
Profit/(loss) for the year being attributable to owners of the parent 2,961 (1,779) 1,182
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
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.
2022 2021
Total Total
£000 £000
By market
UK & Europe 4,967 6,385
North America 1,461 927
Latin America 787 567
Middle East and Africa 3,466 1,940
Asia / Pacific 486 801
11,167 10,620
Net assets
The table below summarises the net assets of the Group by division. The
statement of financial position 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
2022 2021
£000 £000
By division:
Pebble Beach Systems 6,232 5,860
PLC costs (6,979) (7,808)
(747) (1,948)
5. OPERATING PROFIT
The following items have been included in arriving at the operating profit for
the continuing business:
2022 2021
£000 £000
Charge of inventory 1,457 1,288
Director and employee costs 6,231 5,888
Depreciation of property, plant and equipment 168 160
Non-recurring items 362 244
Exchange (gains)/losses (credited)/charged to profit and loss (145) 40
Amortisation of capitalised development costs 1,101 915
Other expenses
Other expenses comprise:
2022 2021
£000 £000
Non-recurring items 362 244
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:
2022 2021
£000 £000
Provision for costs of transition to remote working (66) 244
CFO costs during notice period 171 -
Professional services relating to potential new equity funding (see below) 257 -
362 244
During the period, after having been given assurance from HMRC that we
qualified, we explored a potential equity raise, led by a VCT qualifying
raise, that would have provided the Group with additional capital primarily to
accelerate our development of next generation solutions. Whilst we secured
good levels of support from existing and new investors, a combination of a
worsening global economic situation and falling investor sentiment for the
equity markets generally led us to curtail our plans at a fairly late stage in
the process. As a result, we incurred professional fees totalling £0.3m which
have been disclosed separately in the income statement as non-recurring items.
6. INCOME TAX EXPENSE
2022 2021
£000 £000
Current tax
UK corporation tax - -
Foreign tax - current year 21 31
Adjustments in respect of prior years (8) -
Total current tax 13 31
Deferred tax
UK corporation tax - -
Effect of changes in UK tax rate - -
Adjustments in respect of prior years - -
Total deferred tax - -
Total taxation 13 31
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. This was
confirmed in Autumn 2022. Deferred taxes at the statement of financial
position date have been measured using these enacted tax rates and reflected
in these financial statements.
7. EARNINGS PER ORDINARY SHARE
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.
Reconciliations of the earnings and weighted average number of shares used in
the calculations are set out below.
2022 2021
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 1,182 0.9p 1,466 1.2p
Basic earnings per share 1,182 124,477 0.9p 1,466 124,477 1.2p
Diluted earnings per share
Profit attributable to continuing operations 1,182 0.9p 1,466 1.2p
Diluted earnings per share 1,182 125,709 0.9p 1,466 125,775 1.2p
Adjusted earnings
The directors believe that adjusted EBITDA, adjusted earnings and adjusted
earnings per share provide additional useful information on underlying 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 are made in respect of the amortisation
of acquired intangibles, share based payment expense, non-recurring items and
exchange gains or losses charged to the income statement and their related tax
effects.
The reconciliation between reported and underlying earnings and basic earnings
per share is shown below:
2022 2021
Earnings £000 Earnings Earnings £000 Earnings
per share per share
pence pence
Reported earnings and EPS 1,182 0.9p 1,466 1.2p
Share based payment expense 53 0.0p 53 0.0p
Non-recurring items 294 0.3p 198 0.2p
Exchange (gains)/losses (117) (0.1p) 32 0.0p
Adjusted earnings and EPS 1,412 1.1p 1,749 1.4p
2021 was changed to include non-recurring items.
8. INTANGIBLE ASSETS
Goodwill Acquired customer relationships Acquired intellectual property Capitalised development costs Total
£'000 £'000 £'000 £'000 £'000
Cost
At 1 January 2021 3,218 4,493 3,350 5,423 16,484
Additions - - - 1,515 1,515
At 1 January 2022 3,218 4,493 3,350 6,938 17,999
Additions - - - 1,807 1,807
At 31 December 2022 3,218 4,493 3,350 8,745 19,806
Accumulated amortisation
At 1 January 2021 - 4,493 3,350 3,640 11,483
Additions - - - 915 915
At 1 January 2022 - 4,493 3,350 4,555 12,398
Additions - - - 1,101 1,101
At 31 December 2022 - 4,493 3,350 5,656 13,499
Net book value
At 31 December 2022 3,218 - - 3,089 6,307
At 31 December 2021 3,218 - - 2,383 5,601
At 1 January 2021 3,218 - - 1,783 5,001
The amortisation of development costs is included in research and development
expenses in the Consolidated Income Statement. Within capitalised development
costs there are £4.1 million (2021: £3.2 million) of fully written down
assets that are still in use.
9. CASH FLOW GENERATED FROM OPERATING ACTIVITIES
Reconciliation of profit before taxation to net cash flows from operations.
2022 2021
£000 £000
Profit before tax - continuing operations 1,195 1,497
Depreciation of property, plant and equipment 168 160
Amortisation and impairment of development costs 1,101 915
Non-recurring item (66) 244
Share-based payment expense 53 53
Finance costs 432 373
Increase in inventories (67) (282)
Decrease/(increase) in trade and other receivables 3 (507)
(Decrease)/increase in trade and other payables (308) 1,362
Cash generated from operations 2,511 3,815
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 2022 124,603 3,115 6,800 617 10,532
Share issues - - - - -
At 31 December 2022 124,603 3,115 6,800 617 10,532
11. NET FUNDS
Reconciliation of change in cash and cash equivalents to movement in net cash:
Net cash and cash equivalents Other borrowings Total net debt
£000 £000 £000
At 1 January 2022 1,639 (7,550) (5,911)
Cash flow for the year before financing 58 - 58
Movement in borrowings in the year (1,000) 1,000 -
Netting of arrangement fee - 65 65
Exchange rate adjustments 31 - 31
Cash and cash equivalents at 31 December 2022 728 (6,485) (5,757)
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 STATEMENT OF FINANCIAL POSITION EVENTS
None.
The Board is pleased to confirm that following the publication of its audited
results for the year ended 31 December 2022, the annual report and financial
statements will be posted to shareholders by 25 May 2023 and a copy will also
be available to download from the Group's website at pebbleplc.com.
Ends
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 FR SEMFWIEDSEILRecent news on Pebble Beach Systems
See all newsREG - Pebble Beach Sys Grp - Final Results
AnnouncementREG - Pebble Beach Sys Grp - Trading Update
AnnouncementREG - Pebble Beach Sys Grp - Half-year Report
AnnouncementREG - Pebble Beach Sys Grp - Trading Update and Notice of Half-Year Results
AnnouncementREG - Pebble Beach Sys Grp - Result of AGM
Announcement