REG - Pebble Beach Sys Grp - Final Results
23/04/2025 07:00
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RNS Number : 7461F Pebble Beach Systems Group PLC 23 April 2025
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 2024
Pebble Beach Systems Group plc (AIM: "PEB", "Pebble" or the "Group"), a
leading global software business specialising in playout automation and
integrated channel solutions for the broadcast and streaming markets, is
pleased to announce its final results for the year ended 31 December 2024.
Financial Headlines
2024 2023
Order Intake £13.6m £11.0m
Revenue £11.5m £12.4m
Gross profit £8.8m £9.5m
Gross margin 77% 77%
Adjusted EBITDA* £3.3m £3.8m
Adjusted EBITDA margin 29% 31%
Adjusted EPS** 0.9p 1.4p
Pre tax (loss)/profit for the year (£1.3m) £1.5m
Basic EPS (1.1p) 1.2p
Cash generated from operations £4.1m £3.9m
Cash conversion of adjusted EBITDA 126% 104%
Net Debt (excluding IFRS 16 leases) £3.7m £4.7m
Net Debt (including IFRS 16 leases) £3.9m £4.9m
Headlines
• Order intake of £13.6 million was 24% up on 2023 total order
intake (FY23: £11.0 million). This was driven by a 56% increase in Service
Level Agreement ("SLA") orders year on year, with £7.5 million booked in FY24
(FY23: £4.8 million). Project orders remain flat year on year with £6.1
million booked in 2024 (FY23: £6.2 million).
• SLA orders of £7.5 million included £1.5 million of multi year
SLA orders relating to future periods. FY24 also included £0.4 million of SLA
orders that we had hoped to book in FY23 but were delayed due to the levelling
up of SLA prices.
• Challenging market conditions and delays in the anticipated timing
of project orders resulted in a 25% reduction in project revenue year on year.
45% of project orders were received in December 2024.
• Revenue of £11.5 million (FY23: £12.4 million) and Adjusted*
EBITDA of £3.3 million (FY23: £3.8 million). This reduction from the prior
year was a result of the delays in the timing of project orders. This
reduction in revenue has also caused the reduction in the Adjusted* EBITDA
margin of 29% (FY23: 31%).
• The Group achieved revenue of £11.5 million, including an 17%
increase in SLA recurring revenue to £6.1 million (FY23: £5.2 million). We
have visibility for further increases in SLA revenue as customers on staged
price rises will see their SLA price increase in 2025.
• The increase in recurring revenue is driven by the levelling up
exercise the Group is conducting to ensure all premium SLAs are 15% of their
system list price.
• Operating expenses of £9.6 million for FY24 are up year on year
(FY23: £7.5 million) due to a one-off impairment of intangibles (see note 7).
• Pre tax loss of £1.3 million (FY23 pre tax profit: £1.5 million)
reflects the impact of a one-off impairment of £2.7 million from the
historical investment in IP native software (see note 7), higher exchange
losses and non-recurring costs. Without this one-off impairment charge, the
profit before tax for the year would have been £1.4 million (FY23: £1.5
million).
• The Group continues to demonstrate strong cash generation and
continues to prioritise debt repayment, with a further £1.0 million paid down
in FY24. Net debt (excluding IFRS 16 leases) has reduced from £4.7 million at
December 2023 to £3.7 million at December 2024.
• The strategic changes made in Q1 2025, which is estimated to
deliver annualised cost savings of c£2.0 million, is expected to accelerate a
reduction in net debt.
John Varney, Non-Executive Chairman, commented:
"I am pleased FY25 has started in line with our expectations, and that we are
already seeing the benefits of the cost saving initiatives and strategic
actions taken during Q1.
The potential for future growth, together with our expectation that improved
cash generation will accelerate the repayment of our debt, means that the
Board remains confident in the Company's ability to become a highly profitable
business with a healthy cash position. This will put us in an excellent
position to consider M&A investment, adding technology product offerings,
and potentially paving the way for improving shareholder returns".
* Adjusted EBITDA is defined as operating profit or loss before depreciation,
amortisation and impairment of 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
impairment of intangibles, share based payment expense, non-recurring items
and exchange gains and losses.
- ends -
For further information please contact:
+44 (0) 75 55 59 36 02
Peter Mayhead - CEO
Cavendish Capital Markets Limited (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 leading global software business
specialising in playout automation and integrated channel solutions for the
broadcast and streaming markets. 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
Industry conditions remain challenging with customers tending to look to
hybrid operating models, thus delaying full adoption of IP (Internet Protocol)
infrastructure. This, along with the timing of project orders, has led to the
Group reporting results below initial market expectations, as previously
announced. However, recurring revenues continue to increase, driven by the
levelling up of our premium SLAs to 15% of their system list price.
On the back of the continued market delays in the adoption of cloud native IP
solutions, as reported on 14 January 2025, the Board took decisive strategic
action in Q1 2025. The strategic plan implemented by the Board included (i)
the scaling-back of ongoing investment in PRIMA until market demand warrants
further investment and (ii) a renewed focus on our existing core capabilities
as a broadcast solutions specialist. PRIMA remains in excellent, ready-for-use
shape, with the first iteration already complete with full platform and basic
automation capabilities.
As a result of these actions, the company has significantly reduced its
existing cost base with estimated annualised cash savings of approximately
£2.0 million and, consequently, sustainable free cash inflows are anticipated
to also increase materially in FY25 and beyond.
With the strategic action taken in the first quarter of this financial year,
together with the growing recurring revenue stream from SLAs and ongoing
project delivery, the Group is targeting a net cash position by mid-2026.
FINANCIAL PERFORMANCE
Order intake of £13.6 million was 24% up on 2023 total order intake (FY23:
£11.0 million). This was driven by a 56% increase in Service Level Agreement
("SLA") orders year on year, with £7.5 million booked in FY24 (FY23: £4.8
million). Project orders remain flat year on year with £6.1 million booked in
2024 (FY23: £6.2 million). The timing of these orders, with 45% of them
placed in Q4 and therefore the inability to recognise the revenues in FY24,
led to reduced project revenue for the Group.
Revenue in FY24 was down 7% at £11.5 million (FY23: £12.4 million). However,
recurring revenue from support, maintenance and subscription arrangements
within the Group's contracts was up 17% to £6.1 million (FY23: £5.2
million). I am pleased to report that recurring revenue represents 53% (2023:
42%) of total revenue and provides good visibility for future revenue given
the long term nature of many of the contracts. We expect the upward trend in
recurring revenue to continue over 2025.
Gross profit was £8.8 million (FY23: £9.5 million) with a gross margin of
77% (FY23: £9.5 million at a margin of 77%).
Adjusted EBITDA was £3.3 million (FY23: £3.8 million), representing an
Adjusted EBITDA margin of 29% (FY23: 31%). The reduction in Adjusted EBITDA is
a result of the delays in the signing of project orders, and therefore lower
project revenues in 2024.
An operating loss was incurred of £0.8 million (FY23: operating profit of
£2.1 million) driven largely by a one-off impairment of intangibles; larger
exchange losses of £0.1 million (FY23: £0.03 million) incurred during the
year compared to the prior year as well as increased non-recurring costs year
on year. An intangibles impairment review in line with accounting standards
resulted in a one-off £2.7 million impairment charge being recognised in
2024.
Conversion of profit to cash remained strong in 2024 with 126% of Adjusted
EBITDA converted to cash generated from operations (FY23: 104%) allowing our
continued investment in new products and services at the same time as
continuing to reduce our levels of debt.
In the year, we capitalised £2.2 million of development costs and amortised
£0.8 million, excluding the impact of the one-off intangible asset impairment
review (FY23: capitalised £2.1 million and amortised £1.3 million). The
one-off impairment charge relates to PRIMA. An impairment review was carried
out in line with IAS 36 as the delay in the market uptake for IP native
broadcast solutions indicated the asset value might be impaired. As a
consequence of the Group expecting to supply its existing product range for
longer than anticipated due to the slow uptake of IP native solutions the
estimated useful life of the existing products has been increased resulting in
a lower amortisation charge in the year and going forward.
R&D expenditure as a proportion of revenue increased slightly to 24%
(FY23: 21%).
Net finance costs increased in 2024 reflecting the Group's repayment of £1.0
million of its term loan which was more than offset by an increased interest
rate of 9.77% (FY23: 8.80%). Adjusted profit post tax which excludes share
based expenses or credits, foreign exchange losses, exceptional items and the
impairment of intangibles was £1.1 million (FY23: £1.7 million) and adjusted
earnings per share was 0.9p (FY23: 1.4p). This year on year decrease is a
result of reduced profitability arising from reduced project revenue.
The reported loss before tax for the year was £1.3 million (FY23: profit
before tax £1.5 million). This resulted in an earnings per share of (1.1p)
(FY23: 1.2p).
Net debt (excluding IFRS 16 leases) at the year end was reduced by £1.0
million to £3.7 million (FY23: £4.7 million), comprising bank debt of £4.5
million (FY23: £5.5 million) and a cash position at year end of £0.8 million
(FY23: £0.8 million).
TERM LOAN
We continue to enjoy a good relationship with our bank, Santander, who remain
very supportive of the Group. In March 2024 we agreed a new long-term facility
with Santander, refinancing the £5.5 million loan facility until 31 October
2026. The new agreement has the same covenant tests as the last agreement and
a repayment schedule consistent with previous years.
MARKET POSITIONING
Pebble is a leading global software business specialising in playout
automation and integrated channel solutions for the broadcast and streaming
markets.
Pebble's primary product offering is playout automation to execute linear
schedules and live event programming for broadcast channels and streaming
services. This market primarily consists of television broadcast companies and
service providers that offer outsourced services for the broadcasters. This
global market is typified by Pebble customers such as Fox News, CNBC, IMG, TV
Globo. The market also includes some major streaming services, particularly
those carrying live content.
Pebble's other core software technology is the management and processing of
media associated with broadcast and streaming services, both file-based media
and live media streams. This processing includes the composition of graphics,
video effects, audio processing, and ancillary services such as subtitles and
captioning. Pebble addresses all the requirements of modern broadcast
services.
All Pebble's solutions are designed to meet the demanding mission critical
requirements of broadcast operations. From compliance with demanding security
requirements, to sophisticated resilience to ensure complete on-air
reliability, our solutions are architected to achieve the highest levels of
performance.
Pebble's customer centric culture is widely recognised as providing market
leading service. We manage the customer relationship through the entire system
lifecycle, leveraging our deep domain knowledge to deliver solutions tailored
to our customers' specific needs, and to provide 24/7 in life support of their
solutions.
Pebble's portfolio of software-based solutions consists of:
Automation: highly scalable enterprise level playout solution for
broadcasters, streamers, and service providers with 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.
Integrated Channel: under the control of our Automation software this solution
provides all the functionality of a broadcast chain including audio, video and
graphics functionality.
Remote: real-time, thin-client access to the playout environment via secure
web interfaces. It is easy to use with intuitive interfaces to control,
monitor and manage channels remotely.
Control: provides connection management of IP devices suitable for TV
stations, OB trucks, production houses or anywhere that uses IP workflows.
Workflow: a tool for the design and management of complex media workflows.
Handles the ingest, indexing, and movement of media to support broadcast
channels and streaming services.
MARKET OPPORTUNITY AND PRODUCT DEVELOPMENT ROADMAP
In 2024, Pebble introduced a new technology platform PRIMA (Platform for
Real-time Integrated Media Applications). Notwithstanding excellent industry
interest in the product following its launch, it was apparent that this
interest was not translating into orders as the industry remained cautious on
the adoption of cloud native IP solutions for mission critical broadcast
software. As a result the Board took the view that specific PRIMA R&D
should be scaled back until such time as market demand warrants further
investment. The short term focus will be on the existing core capabilities as
a broadcast solutions specialist. Pebble will continue its development of its
existing playout and integrated channel products and services for current
customers and new prospects.
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. This forms the core of our current revenue
streams and as such we are continuing to develop the capabilities of these
existing technologies.
4K/UHD production
4K and UHD TV global sales have consistently increased since 2014 according to
recent industry statistics. Pebble has already delivered a number of UHD
systems to customers.
IP infrastructure
IP infrastructure has been an area of focus for Pebble for some time, in line
with customers' stated requirements and we continue to cement our position as
the experts in IP. Although many of our customers are typically either
transitioning to IP infrastructure from legacy SDI (traditional non-IP digital
video) deployments or are implementing IP infrastructures in a new
broadcasting facility or greenfield site a considerable number are continuing
to operate in hybrid IP/SDI environments. Pebble supports all of these
implementations.
Cloud Compute: Public, Private, & Hybrid
As broadcast and streaming services evolve, the media technology industry is
constantly seeking more flexible and efficient use of IT infrastructure. Use
of cloud compute is a significant trend in the market, and this is a
combination of public services such as Amazon and Google, private cloud
deployed on a customer's own infrastructure, and hybrid which is a combination
of both.
To date Pebble has delivered systems into a small number of new IT centric
playout facilities. Our solutions have primarily been supporting broadcasters
as they expand their current SDI based facilities to utilise cloud
capabilities.
To complement Pebble's development roadmap and to broaden the Group's product
offering, Pebble is also looking for in-organic opportunities in these areas
that would accelerate the diversification of the company's portfolio. Areas of
specific focus for potential acquisition opportunities are production
functions such as graphics, and file-based workflows supporting on-demand
streaming applications, media planning, scheduling, advertising, and
distribution.
GOING CONCERN
The directors are required to assess the Group's ability to continue to trade
as a going concern. 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 30 September 2026 and that
it is appropriate that the Group prepare accounts on a going concern basis.
Detailed disclosure has been made in note 3.
BOARD CHANGES
There were no changes during the period.
TRADING OUTLOOK
Despite a challenging 2024, this year has started well, in line with our
expectations, and we have a healthy order pipeline. Our loyal customers
continue to enjoy our excellent technology and the high level of service they
expect from the Pebble brand. We remain fully focussed on being experts in
delivering leading playout and content management solutions for the broadcast
and media technology industry.
FY25 for the Group will be a year of focussing on our strategy, ensuring
Pebble remains highly profitable, whilst significantly improving cash
generation.
This strategy will give Pebble increased options for future growth. The
additional funds generated will give the flexibility to accelerate pay down of
the long-term debt and to consider M&A investment, adding technology
product offerings, and potentially paving the way for improving shareholder
returns.
John Varney
Non-Executive Chairman
For the year ended 31 December 2024
CONSOLIDATED STATEMENT OF PROFIT AND LOSS
for the year ended 31 December 2024
Continuing operations Note 2024 2023
£000 £000
Revenue 4 11,453 12,370
Cost of sales (2,647) (2,826)
Gross profit 8,806 9,544
Sales and marketing expenses (2,809) (2,747)
Research and development expenses (4,131) (1,739)
Administrative expenses (2,648) (2,983)
Operating (loss)/profit 5 (782) 2,075
Operating (loss)/profit is analysed as:
Adjusted EBITDA 3,276 3,773
Non-recurring items 5 (229) (105)
Share based payment credit/(expense) 39 (57)
Exchange losses charged to the income statement (108) (31)
Impairment of intangibles 7 (2,741) -
Earnings before interest, tax, depreciation and amortisation (EBITDA) 237 3,580
Depreciation (189) (200)
Amortisation of capitalised development costs (830) (1,305)
Operating (loss)/profit 5 (782) 2,075
Finance costs (521) (531)
(Loss)/Profit before tax (1,303) 1,544
Tax (5) (10)
Net (loss)/profit for the year (1,308) 1,534
Earnings per share from continuing operations attributable to the parent
during the year
Basic earnings per share
From continuing operations and (loss)/profit for the year 6 (1.1p) 1.2p
Diluted earnings per share
From continuing operations and (loss)/profit for the year 6 (1.1p) 1.2p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2024
2024 2023
£000 £000
(Loss)/profit for the financial year (1,308) 1,534
Other comprehensive income - items that may be reclassified subsequently to
profit or loss:
Exchange difference on translation of overseas operations
- continuing operations - 9
Total comprehensive (loss)/income for the financial year (1,308) 1,543
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
for the year ended 31 December 2024
Ordinary Share Capital Merger Translation Accumulated Total
shares premium redemption reserve reserve losses Equity
£000 £000 reserve £000 £000 £000 £000
£000
At 1 January 2023 3,115 6,800 617 29,778 (185) (40,872) (747)
Share based payments: - - - - - 57 57
Total share based payments - - - - - 57 57
Profit for the year - - - - - 1,534 1,534
Exchange differences on translation of overseas operations - - - - 9 - 9
Total comprehensive income for the period - - - - 9 1,534 1,543
At 31 December 2023 3,115 6,800 617 29,778 (176) (39,281) 853
At 1 January 2024 3,115 6,800 617 29,778 (176) (39,281) 853
Transfer of reserves - - - (27,896) - 27,896 -
Total transfer of reserves - - - (27,896) - 27,896 -
Share based payments - - - - - (39) (39)
Total share based payments - - - - - (39) (39)
Loss for the year - - - - - (1,308) (1,308)
Total comprehensive income/(loss) for the period - - - - - (1,308) (1,308)
At 31 December 2024 3,115 6,800 617 1,882 (176) (12,732) (494)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2024
Note 2024 2023
£000 £000
Assets
Non-current assets
Intangible assets 7 5,765 7,107
Property, plant and equipment 410 435
Other non-current assets 12 12
Total non-current assets 6,187 7,554
Current assets
Inventories 411 303
Trade and other receivables 4,110 4,318
Cash and cash equivalents 9 840 796
Total current assets 5,361 5,417
Liabilities
Current liabilities
Financial liabilities - borrowings 1,000 1,000
Trade and other payables 7,099 6,169
Lease liabilities - current 68 47
Total current liabilities 8,167 7,216
Net current liabilities (2,806) (1,799)
Non-current liabilities
Financial liabilities - borrowings 3,550 4,550
Other payables - non-current 199 274
Lease liabilities - non-current 126 78
Total non-current liabilities 3,875 4,902
Net (liabilities)/assets (494) 853
Equity attributable to owners of the parent
Ordinary shares 3,115 3,115
Share premium 6,800 6,800
Capital redemption reserve 617 617
Merger reserve 1,882 29,778
Translation reserve (172) (176)
Accumulated losses (12,736) (39,281)
Total (deficit)/surplus (494) 853
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2024
Note 2024 2023
£000 £000
Cash flows from operating activities
Cash generated from operations 8 4,128 3,917
Interest paid (520) (531)
Taxation paid (5) (8)
Net cash generated from operating activities 3,603 3,378
Cash flows from investing activities
Purchase of property, plant and equipment (170) (68)
Expenditure on capitalised development costs 7 (2,229) (2,105)
Net cash used in investing activities (2,399) (2,173)
Cash flow from financing activities
Repayment of borrowings (1,000) (1,000)
Principal elements of lease payments (69) (96)
Net cash used in financing activities (1,069) (1,096)
Net increase in cash and cash equivalents 135 109
Effect of foreign exchange rate changes (91) (41)
Cash and cash equivalents at 1 January 796 728
Cash and cash equivalents at 31 December 9 840 796
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
for the year ended 31 December 2024
1. GENERAL INFORMATION
Pebble Beach Systems Group plc ("the Company") and its subsidiaries (together
"the Group") is a leading global software business specialising in playout
automation and content management solutions for the broadcast and streaming
markets.
The Group employed over 90 people worldwide in the period.
The Company is listed on the AIM market of the London Stock Exchange (AIM:
PEB). For further information, visit www.pebbleplc.com.
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 22
April 2025.
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 2024 and 31 December 2023
have been reported on by S&W Partners Audit Limited (formerly CLA Evelyn
Partners Limited) with an unmodified audit opinion and did not include
references to any matters to which the auditors drew attention by way of
emphasis and did not contain a statement under Section 498(2) or (3) of the
Companies Act 2006.
Whilst the financial information included in this Annual Financial Results
announcement has been computed in accordance with UK-adopted international
accounting standards, this announcement, due to its condensed nature, does not
itself contain sufficient information to comply with UK-adopted international
accounting standards.
Statutory accounts for the year ended 31 December 2023 have been delivered to
the Registrar of Companies. The statutory accounts for the year ended 31
December 2024, prepared under UK-adopted international accounting standards,
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 2024 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 2024, the Group's net debt (excluding IFRS 16 leases) was £3.7
million (2023: £4.7 million), comprising cash of £0.8 million (2023: £0.8
million) and the term loan from Santander of £4.5 million (2023: £5.5
million).
We enjoy a close relationship with our bank and have regular review meetings
with them. In March 2024, we signed a new term loan through to 30 October
2026, which re-financed the £5.5 million RCF at the same level of commitment,
with repayment levels consistent with previous years and appropriate financial
covenants. There have been no breaches in financial covenants to date and no
breaches are anticipated in the going concern period. Following the conclusion
of the re-structuring process, management are forecasting a stronger cashflow
forecast through 2025.
The directors are confident that any loan extensions required post October
2026 would be granted on reasonably similar terms 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
statement of profit and loss, the statement of financial position and cash
flow statements through to 30 September 2026. This review period extends to
the end of Q3 for 2026, which is looking forward 17 months beyond the date of
approval of these financial statements. The projections included testing
against the minimum liquidity and cash flow cover covenants required by the
current term loan facility.
These projections used the forecast for 2025 and were updated for current
trading and forecasts. This analysis was then extended to the end of Q3 2026.
The projections were stress tested in two ways. Project orders for 2025 were
reduced by 10%, then reduced by 20% with no year on year SLA growth applied.
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 levels of marketing and
discretional bonus spend to mitigate any reductions in revenue. Even with the
revenue drop, management concluded the business will remain a going concern.
The Board has concluded from its thorough assessment of the detailed forecasts
and ability to enact any mitigating actions, if required, that the Group will
have sufficient resources to meet its liabilities during the review period
through to 30 September 2026, 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 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 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 or loss from continuing operations by business segment.
Pebble Beach Systems PLC Total
costs £000
Year to 31 December 2024
Broadcast 11,453 - 11,453
Total revenue 11,453 - 11,453
Adjusted EBITDA 3,780 (504) 3,276
Depreciation (189) - (189)
Non-recurring items (229) - (229)
Amortisation of capitalised development costs (830) - (830)
Share based payment expense - 39 39
Exchange gains (108) - (108)
Impairment of intangible assets (2,741) - (2,471)
Finance costs (40) (481) (521)
Intercompany finance income/(costs) 368 (368) -
Profit/(loss) before taxation 11 (1,314) (1,303)
Taxation (5) - (5)
Profit/(loss) for the year being attributable to owners of the parent 6 (1,314) (1,308)
Year to 31 December 2023
Broadcast 12,370 - 12,370
Total revenue 12,370 - 12,370
Adjusted EBITDA 4,221 (448) 3,773
Depreciation (200) - (200)
Non-recurring items (105) - (105)
Amortisation of capitalised development costs (1,305) - (1,305)
Share based payment expense - (57) (57)
Exchange gains (31) - (31)
Finance costs (10) (521) (531)
Intercompany finance income/(costs) 336 (336) -
Profit/(loss) before taxation 2,906 (1,362) 1,544
Taxation (10) - (10)
Profit/(loss) for the year being attributable to owners of the parent 2,896 (1,362) 1,534
Geographic external revenue analysis and revenue by stream
The revenue analysis in the table below is based on the geographic location of
the customer for each business.
2024 2023
£000 £000
By market:
UK and Europe 7,506 6,381
USA 1,297 1,376
Latin America 567 1,092
UAE 412 1,349
Remaining Middle East and Africa 1,389 1,706
Asia/Pacific 282 466
Total revenue by market 11,453 12,370
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 and
the Board of Directors.
2024 2023
£000 £000
By division:
Pebble Beach Systems 4,422 6,804
PLC costs (4,916) (5,951)
(494) 853
5. OPERATING PROFIT OR LOSS
The following items have been included in arriving at the operating profit for
the continuing business:
2024 2023
£000 £000
Charge of inventory 1,348 1,359
Director and employee costs 6,778 7,029
Depreciation of property, plant and equipment 189 200
Non-recurring items 229 105
Exchange losses charged to profit and loss 108 31
Amortisation of capitalised development costs 830 1,305
Impairment of intangibles 2,741 -
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:
2024 2023
£000 £000
Strategic advice in connection with strategic options for the company 38 -
Severance Pay 191 -
Senior employee settlement cost - 105
229 105
6. 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.
2024 2023
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
(Loss)/Profit attributable to continuing operations (1,308) (1.1)p 1,534 1.2p
Basic earnings and EPS (1,308) 124,477 (1.1)p 1,534 124,477 1.2p
Diluted earnings per share
(Loss)/Profit attributable to continuing operations (1,308) (1.1)p 1,534 1.2p
Diluted EPS (1,308) 124,477* (1.1)p 1,534 127,454 1.2p
*Due to the loss for the year for 2024 share options were anti-dilutive and so
removed from the calculations for diluted EPS
Adjusted earnings
The directors believe that adjusted EBITDA, adjusted earnings and adjusted
earnings per share all 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 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
impairment of 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:
£000 2024 £000 2023
Pence Pence
Reported earnings and EPS (1,308) (1.1)p 1,534 1.2p
Share based payment expense (39) (0.0)p 57 0.1p
Non-recurring items 185 0.1p 85 0.1p
Exchange losses 81 0.1p 23 0.0p
Impairment of intangibles 2,220 1.80p
Adjusted earnings and EPS 1,139 0.9p 1,699 1.4p
7. INTANGIBLE ASSETS
Goodwill Acquired customer relationships Acquired intellectual property Capitalised development costs Total
£000 £000 £000 £000 £000
Cost
At 1 January 2023 3,218 4,493 3,350 8,745 19,806
Additions - - - 2,105 2,105
At 1 January 2024 3,218 4,493 3,350 10,850 21,911
Additions - - - 2,229 2,229
At 31 December 2024 3,218 4,493 3,350 13,079 24,140
Accumulated amortisation and impairment
At 1 January 2023 - (4,493) (3,350) (5,656) (13,499)
Charge for the year - - - (1,305) (1,305)
At 1 January 2024 - (4,493) (3,350) (6,961) (14,804)
Charge for the year - - - (830) (830)
Impairment - - - (2,741) (2,741)
At 31 December 2024 - (4,493) (3,350) (10,532) (18,375)
Net book value
At 31 December 2024 3,218 - - 2,547 5,765
At 31 December 2023 3,218 - - 3,889 7,107
At 1 January 2023 3,218 - - 3,089 6,307
In accordance with the requirements of IAS 36 'Impairment of assets',
intangible assets are required to be tested for impairment on an annual basis,
or where there is an indication of impairment, with reference to the value of
the asset or cash-generating units ("CGU") in question.
There is an indicator of impairment for one of our intangible assets (part of
capitalised development costs). The indicator is the delay in market adoption
of IP technologies.
Following an assessment of our IP native assets, with reference to value in
use; forecast cash outflows are estimated to exceed cash inflows in the
foreseeable future. It was not possible to determine a fair value less cost of
disposal as there is currently no active market for the sale of this
technology. Therefore we recorded an impairment loss of £2.7 million in
respect of this asset.
Following an assessment of our intangible assets it became apparent that the
useful economic life of the Group's current intangible assets (capitalised
development costs) is longer than originally thought. The period in which
economic benefits are expected to flow to the Group from our existing products
is longer than originally thought. Due to the delayed market uptake of IP
technology customers are continuing to invest in on-prem solutions. Originally
the amortisation period was between one and five years. We now believe the
amortisation period should be eight years. This change has been accounted for
as a change in accounting estimate in accordance with IAS 8.
8. CASH FLOW GENERATED FROM OPERATING ACTIVITIES
Reconciliation of profit or loss before taxation to net cash flows from
operations.
2024 2023
£000 £000
(Loss)/profit before tax (1,303) 1,544
Depreciation of property, plant and equipment 189 200
Amortisation and impairment of development costs 830 1,305
Impairment of intangibles 2,741 -
Loss on disposal of property, plant and equipment 6 20
Non-recurring item 229 105
Share based payment (credit)/expense (39) 57
Finance costs 521 531
Decrease/(increase) in other non-current assets - 26
Decrease/(increase) in inventories (108) 194
Decrease/(increase) in trade and other receivables 208 (792)
Increase in trade and other payables 854 727
Cash generated from operations 4,128 3,917
9. NET FUNDS
Net debt reconciliation:
Net cash and cash equivalents Other borrowings Total net debt
£000 £000 £000
At 1 January 2024 796 (5,675) (4,879)
Cash flow for the year before financing 1,204 - 1,204
Movement in borrowings in the year (1,000) 1,000 -
Movement in lease debt - (138) (138)
Principal lease payments (69) 69 -
Exchange rate adjustments (91) - (91)
Cash and cash equivalents at 31 December 2024 840 (4,744) (3,904)
At 1 January 2023 728 (6,706) (5,978)
Cash flow for the year before financing 1,205 - 1,205
Movement in borrowings in the year (1,000) 1,000 -
Netting of arrangement fee - (65) (65)
Principal lease payments (96) 96 -
Exchange rate adjustments (41) - (41)
Cash and cash equivalents at 31 December 2023 796 (5,675) (4,879)
10. EVENTS AFTER THE REPORTING PERIOD
Global market delays to the transition to IP broadcast technology led to a
Group strategic change in 2025. Specific PRIMA research and development has
been scaled back until the market demand warrants further investment in it
and, as a result, a restructure of the Group was carried out during Q1 2025.
This announcement was made on 14 January 2025. The estimated financial effect
of this is cost savings of c£2 million from implementation date.
The directors placed the non-trading Legacy Broadcast subsidiary companies
into a solvent liquidation process on 25 February 2025. The financial effect
of this will be negligible.
The Board is pleased to confirm that following the publication of its audited
results for the year ended 31 December 2024, the annual report and financial
statements will be posted to shareholders on 16 May 2025 and a copy will also
be available to download from the Group's website at pebbleplc.com.
Ends
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