REG - Pebble Beach Sys Grp - Half-year Report
23/08/2023 07:15
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RNS Number : 1226K Pebble Beach Systems Group PLC 23 August 2023
Pebble Beach Systems Group plc
Results for the half-year ended 30 June 2023
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 unaudited half-year results for the six
months ended 30 June 2023 ("H1 23").
Financial highlights
· Revenue up 9% to £5.5m (H1 22: £5m) with recurring revenue up
13% to £2.53m (H1 22: £2.24m)
· Order intake in the period of £4.4m (H1 22: £5m) as economic
nervousness caused some clients to defer non-essential spend
· Adjusted EBITDA(1) of £1.4m is marginally up against the last
year comparable period (H1 22: £1.3m), representing 25% of revenue (H1 22:
26%)
· Profit before tax of £0.2m (H1 22: £0.3m)
· Adjusted earnings per share down to 0.2p (H1 22: 0.4p)
· Net cash generated from operating activities (after interest paid
and IFRS 16 lease payments) was £1.7m (H1 22: £0.6m)
· Gross bank debt reduced by £0.5m in last six months to £6.1m as
at 30 June 2023. Net debt at 30 June 2023 was £5.1m representing a net
debt/last 12 month Adjusted EBITDA(1) of c.1.6x
Operational highlights
· Hardware delivery lead times are coming back down to pre-COVID
levels. This is reducing the need for buffer stock and our new Chief Operating
Officer is working to reduce the buffer levels.
· Investment in our new IP-native Oceans platform continues as
planned.
· Neil Maycock appointed as new Chief Commercial Officer. Neil
brings a wealth of industry experience and knowledge from his time at Grass
Valley. Neil will work closely with our product and sales teams to strengthen
our commercial offering.
· Significant success in the Middle East with 2 new deals with
existing customers with an order value of £0.65m. These deals are validation
of the excellent support and superior technology we offer.
· £0.36m order placed by a Spanish state broadcaster, with Pebble
beating strong competition to win this order.
· A key new win in Brazil, where our excellent local resellers sold
a new system to a state broadcaster with an order value of £0.13m.
Current trading and outlook
· The Company's existing weighted pipeline value remains strong at
£8.7m (June 22: £7.4m) and we are receiving many enquiries following a
competitor's announcement to end of life their playout automation solutions,
so we expect this pipeline value to grow.
· Strength of pipeline and level of customer engagement provides
management with confidence in delivering full year growth despite the reduced
order intake in the first half, highlighting the resilience of the Company and
its ability to deliver project backlog.
John Varney, Non-Executive Chairman of Pebble Beach Systems Group plc, said:
"The Company has delivered a robust performance for the first half of 2023,
despite a delay in new order intake.
Our continued long-term aim of investing in new software solutions whilst
reducing our overall indebtedness remains central to our strategy to ensure we
continue to be well positioned to benefit from the industry transition to IP
as full-scale adoption occurs.
The Board continues to have confidence that the Group can deliver a strong
second half with improved revenue and achieve the Board's expectations for
the year.
Notes
(1) Adjusted EBITDA (earnings before interest, tax, depreciation and
amortisation) a non-GAAP measure, is EBITDA before non-recurring items and
foreign exchange gains/losses.
For further information please contact:
+44 (0) 75 55 59 36 02
Peter Mayhead - CEO
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 www.pebbleplc.com (http://www.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 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
We have performed well in what has been a challenging start to the year, with
a 9% increase in revenue on the comparable period last year. This is despite
new order intake slipping as a result of economic nervousness and customers
delaying decisions on non-revenue generating upgrades. Despite this
slippage, we are expecting an uptick in H2 23 and a stronger second half,
consistent with what has happened in the last two years. Our existing pipeline
value remains high, and we can see new opportunities arising from a leading
competitor's decision to end of life their playout solutions.
It was hoped that a strong H1 would allow further investment into our sales
department to facilitate market growth, however this has now been postponed to
mitigate the slippage in orders we have been experiencing.
The Board is pleased that through careful cashflow management, the Company has
been able to continue to improve its balance sheet. At 30 June 2023, net debt
accounts for only 1.6x the annual EBITDA of £3.3m for the 12 months to 30
June 2023, bringing the business's net debt position to a more acceptable
level.
Financial performance
Good revenue performance in H1 is showing a 9% increase on the comparable
period last year to £5.5m (H1 22: £5.0m). I am pleased to announce recurring
revenue is also up 13% to £2.53m (H1 22: £2.24m) and now accounts for 46% of
our revenue base (H1 22: 44%). This is encouraging for the future years'
revenue.
Adjusted EBITDA(1) increased to £1.4m (H1 22: £1.3m), representing 25% of
revenue (H1 22: 26%), following planned investment in headcount including the
appointment of a new Chief Commercial Officer in May. As a result of this
investment in headcount adjusted EBITDA margin is lower at 25% (H1 22: 26%),
but this is expected to recover in line with full year expectations thanks to
an increase in revenue in H2.
Cash conversion in H1 23 has remained strong with 145% of adjusted EBITDA
being converted to operating cash (H1 22: 62%). Net cash from operating
activities (after interest paid and IFRS 16 lease payments) rose to £1.6m (H1
22: £0.6m); this has allowed the Group to continue investing in R&D and
paying down the long-term debt.
The Group's net debt position of £5.1m represents an 18% drop from the
comparable period last year (H1 22: £6.3m). This reflects a stronger cash
position from the comparable period last year and the Group continuing to pay
off the long-term debt at the same rate as last year.
Investment in R&D of £0.9m in the period remains flat year on year
following headcount investment in 2022 as part of the Group's strategic plan
of product developments (H1 22: £0.9m).
An increase in financing costs as a result of rising interest rates resulted
in net profit of £0.24m (H1 22: £0.26m) being slightly down for the year.
The current interest rate on loan repayments is 8.22% (H1 22: 5.37%). This has
resulted in an adjusted EPS of 0.2p (H1 22: 0.4p).
Operational performance
A slight reduction in orders to £4.4m (H1 22: £5m), is a result of delays in
placing orders due to economic nervousness seen across the industry. I am
pleased the weighted pipeline value remains strong at £8.7m (H1 22: £7.4m),
which gives the Board confidence the Business will have a stronger H2.
There have been some significant wins and the Board is pleased that Pebble was
able to fortify its relationship with two key customers in the Middle East
with new orders worth £0.65m.
Three significant orders in Europe totalling £0.7m were won in H1. Two orders
were for system and hardware refreshes, and one was a new automation system.
Ongoing software development
· Oceans Automation. Work continues on a cloud-native playout
solution to complement our current enterprise level automation offering.
· Media Processing Engine. Work is progressing on the software
solution for video playout capability with preliminary integration with Oceans
Automation achieved. The next milestones will include APIs, graphics
management and subtitling.
· Pebble Control. Development of the IP control tool is advancing
with added control functionality with the release of the first device control
version expected by the end of the year. We are co-chairing the work on the
new open standards protocol and are simultaneously working on the
implementation of it.
Inventory build
· We have seen inventory lead times drop to pre-COVID levels,
reducing the risk of delays to order fulfilment. As a result the operations
department is working to reduce our inventory levels and will continue to
prioritise using existing stock.
Cash flows and net debt
The Group held cash and cash equivalents of £0.9 million at 30 June 2023 (H1
2022: £0.8 million). The table below summarises the cash flows for the half
year.
2023 2022
£'million £'million
Cash generated from operating activities 1.6 0.6
Net cash used in investing activities (0.9) (0.9)
Net cash used in financing activities (0.5) (0.5)
Net (decrease)/increase in cash and cash equivalents 0.2 (0.8)
Cash and cash equivalents at 1 January 0.7 1.6
Cash and cash equivalents at 30 June 0.9 0.8
As at 30 June 2023 net debt(2), excluding the impact of IFRS16, was £5.1
million (cash £0.9 million and bank debt of £6.0 million). The Group was
using all £6.0 million of its available facilities at 30 June 2023, having
re-paid £0.5 million in the period.
Going concern
The Directors, having made suitable enquiries and analysis of the accounts,
consider that the Group has adequate resources to continue in business for the
foreseeable future. In making this assessment, which covers a minimum period
of twelve months from approval of this half-year report, the Directors have
considered the Group's trading forecast, cash flow forecasts, available
headroom and projected financial covenants on the banking facility, the levels
of opportunities in the pipeline and recurring support revenue (see note 3
below).
Principal risks and uncertainties
The principal risks and uncertainties facing the Group remain consistent with
the principal risks and uncertainties reported in the Group's 31 December 2022
Annual Report.
We view supply chain disruption as less of a risk following a decrease in
product lead times. This has given the business confidence to lower buffer
stock levels back to pre-COVID levels and the Operations department will work
to deliver that.
Current trading and outlook
The appointment of a new Chief Commercial Officer, with considerable market
experience will help focus our commercial offering and support the sales
department in landing new orders. Despite orders slipping in H1, they have not
disappeared from the pipeline, which remains encouraging.
We can see a number of new opportunities coming in following our competitor's
announcement to end of life their existing automation offerings and the Group
is confident that this and other ongoing sales initiatives will lift order
levels in the second half.
The strength of the pipeline and the engagement with customers gives the Board
confidence that the Group can again deliver a strong second half of the year
and deliver against the Board's expectations for the current year.
John Varney
Non-Executive Chairman
CONSOLIDATED INCOME STATEMENT
for the half year ended 30 June 2023
6 months to 30 June 2023 6 months to 30 June 2022 Year ended 31 December
2022
(Unaudited) (Unaudited) (Audited)
Notes £'000 £'000 £'000
Revenue 4 5,468 5,038 11,167
Cost of sales (1,417) (1,236) (2,821)
Gross profit 4,051 3,802 8,346
Sales and marketing expenses (1,289) (959) (2,234)
Research and development expenses (884) (838) (1,696)
Administrative expenses (1,304) (1,334) (2,789)
Foreign exchange gains/(losses) (35) 47 145
Other expenses - (257) (362)
Operating profit 5 539 461 1,41
Operating profit is analysed as:
Adjusted EBITDA 1,358 1,297 3,166
Non-recurring items - (257) (362)
Share based payment expense (28) (20) (53)
Exchange gains/(losses) credited/(charged) to the income statement (35) 47 145
Earnings before interest, tax, depreciation and amortisation (EBITDA) 1,295 1,067 2,896
Depreciation (122) (78) (168)
Amortisation and impairment of acquired intangibles - - -
Amortisation of capitalised development costs (634) (528) (1,101)
Finance costs (291) (183) (432)
Finance income - - -
Profit before tax 248 278 1,195
Tax 6 (6) (17) (13)
Profit for the period being attributable to owners of the parent 242 261 1,182
Earnings per share
attributable to the owners of
the parent during the period
Basic earnings per share 7 0.2p 0.2p 0.9p
Diluted earnings per share
Diluted earnings per share 7 0.2p 0.2p 0.9p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the half year ended 30 June 2023
6 months to 30 June 2023 6 months to 30 June 2022 Year ended 31 December
2022
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Profit for the financial year 242 261 1,182
Other comprehensive income - items that may be reclassified subsequently to
profit or loss:
Exchange differences on translation of overseas operations 3 - (34)
Total profit for the period attributable to owners of the parent 245 261 1,148
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
for the half year ended 30 June 2023
Capital
Ordinary shares Share redemption Merger Translation Accumulated losses
£000 premium reserve reserve reserve £000 Total
£000 £000 £000 £000 £000
At 1 January 2023 3,115 6,800 617 29,778 (185) (40,872) (747)
Share based payments: value of employee services - - - - - 28 28
Transactions with owners - - - - - 28 28
Retained profit for the period - - - - - 242 242
Exchange differences on translation of overseas operations - - - - - - -
Total comprehensive income/expense for the period - - - - 3 242 245
At 30 June 2023 (Unaudited) 3,115 6,800 617 29,778 (182) (40,602) (474)
At 1 January 2022 3,115 6,800 617 29,778 (151) (42,107) (1,948)
Share based payments: value of employee services - - - - - 20 20
Transactions with owners - - - - - 20 20
Retained profit for the period - - - - - 261 261
Exchange differences on translation of overseas operations - - - - - - -
Total comprehensive income/expense for the period - - - - - 261 261
At 30 June 2022 (Unaudited) 3,115 6,800 617 29,778 (151) (41,826) (1,667)
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 owners - - - - - 53 53
Retained profit for the year - - - - - 1,182 1,182
Exchange differences on translation of overseas operations - - - - (34) - (34)
Total comprehensive income/expense for the period - - - - (34) 1,182 1,148
At 31 December 2022 (Audited) 3,115 6,800 617 29,778 (185) (40,872) (747)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 30 June 2023
30 June 2023 30 June 2022 31 December
2022
(Unaudited) (Unaudited) (Audited)
Notes £'000 £'000 £'000
Assets
Non-current assets
Intangible assets 8 6,615 5,993 6,307
Property, plant and equipment 496 346 571
Other non-current assets 12 38
7,123 6,339 6,916
Current assets
Inventories 491 510 497
Trade and other receivables 3,330 3,805 3,526
Current tax assets 8
Cash and cash equivalents 951 799 728
4,772 5,114 4,759
Liabilities
Current liabilities
Financial liabilities - borrowings 1,000 1,000 935
Trade and other payables 6,039 5,904 5,716
Lease liabilities - current 63 104 96
7,102 7,008 6,747
Net current liabilities (2,330) (1,894) (1,988)
Non-current liabilities
Financial liabilities - borrowings 5,050 6,050 5,550
Lease liabilities - non-current 217 62 125
Deferred tax liabilities - - -
5,267 6,112 5,675
Net liabilities (474) (1,667) (747)
Equity attributable to owners of the parent
Ordinary shares 3,115 3,115 3,115
Share premium account 6,800 6,800 6,800
Capital redemption reserve 617 617 617
Merger reserve 29,778 29,778 29,778
Translation reserve (182) (151) (185)
Retained earnings (40,602) (41,826) (40,872)
Total equity (474) (1,667) (747)
CONSOLIDATED STATEMENT OF CASH FLOWS
for the half year ended 30 June 2023
6 months to 30 June 2023 6 months to 30 June 2022 Year ended 31 December
2022
(Unaudited) (Unaudited) (Audited)
Notes £'000 £'000 £'000
Cash flows from operating activities
Cash generated from operations 9 1,974 802 2,511
Interest paid (291) (183) (432)
Taxation paid 2 (17) (21)
Net cash from operating activities 1,685 602 2,058
Cash flows from investing activities
Interest received - - -
Purchase of property, plant and equipment (23) (22) (193)
Expenditure on capitalised development costs (942) (920) (1,807)
Net cash used in investing activities (965) (942) (2,000)
Cash flows from financing activities
Net cash used in repayment of financing activities (500) (500) (1,000)
Net cash used in financing activities (500) (500) (1,000)
Net (decrease)/increase in cash and cash equivalents 220 (840) (942)
Effect of foreign exchange rate changes 3 - 31
Cash and cash equivalents and overdrafts at 1 January 728 1,639 1,639
Cash and cash equivalents and overdrafts at period end 951 799 728
Net debt comprises:
Cash and cash equivalents and overdrafts 951 799 728
Borrowings (6,050) (7,050) (6,485)
Net debt at period end (5,099) (6,251) (5,757)
NOTES TO THE HALF-YEAR REPORT
for the six months ended 30 June 2023
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, with registered number of 04082188.
The address of its registered office is Unit 1, First Quarter, Blenheim Road,
Epsom, Surrey, KT19 9QN.
This half-year results announcement was approved by the Board on 22 August
2023.
2. BASIS OF PREPARATION
The financial information for the period ended 30 June 2023 set out in this
half-year report does not constitute statutory accounts as defined in Section
434 of the Companies Act 2006. The Group's statutory financial statements for
the year ended 31 December 2022 have been filed with the Registrar of
Companies. The auditor's report on those financial statements was unqualified.
The half-year financial information has been prepared using the same
accounting policies and estimation techniques as will be adopted in the Group
financial statements for the year ending 31 December 2023. The Group financial
statements for the year ended 31 December 2022 were prepared under
International Financial Reporting Standards as adopted by the European Union.
These interim financial statements have been prepared on a consistent basis
and format. The Group has not applied IAS 34 'Interim Financial Reporting',
which is not mandatory for AIM companies, in the preparation of these interim
financial statements.
3. GOING CONCERN
The Directors, having made suitable enquiries and analysis of the accounts,
consider that the Group has adequate resources to continue in business for the
foreseeable future. In making this assessment, which covers a minimum period
of twelve months from approval of this half-year report, the Directors have
considered the Group's trading forecast, cash flow forecasts, available
headroom and projected financial covenants on the banking facility, the levels
of opportunities in the pipeline and recurring support revenue.
We maintain a good relationship with our bank. The current loan agreement
secures the facility until 30 September 2024 with banking covenants and a
repayment schedule in place.
We have a strong order book and pipeline which underpin our third and fourth
quarter revenue.
The Directors have a reasonable expectation that the Group will have adequate
resources to continue in business for the foreseeable future and therefore
continue to adopt the going concern basis in preparing the interim financial
statements.
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 Group. 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 by business segment.
Pebble Beach Systems Group Total
£'000 £'000 £'000
6 months to 30 June 2023 (Unaudited)
Total revenue 5,468 - 5,468
Adjusted EBITDA 1,555 (197) 1,358
Depreciation (122) - (122)
Amortisation of capitalised development costs (634) - (634)
Share based payment expense - (28) (28)
Non-recurring items - - -
Exchange gains (35) - (35)
Finance costs (5) (286) (291)
Intercompany finance income/(costs) 131 (131) -
Profit/(loss) before taxation 890 (642) 248
Taxation (6) - (6)
Profit/(loss) for the period being attributable to owners of the parent 884 (642) 242
6 months to 30 June 2022 (Unaudited)
Total revenue 5,038 - 5,038
Adjusted EBITDA 1,664 (367) 1,297
Depreciation (78) - (78)
Amortisation of capitalised development costs (528) - (528)
Share based payment expense - (20) (20)
Non-recurring items - (257) (257)
Exchange gains 47 - 47
Finance costs (3) (180) (183)
Finance income 168 (168) -
Profit/(loss) before taxation 1,270 (992) 278
Taxation (116) 99 (17)
Profit/(loss) for the period being attributable to owners of the parent 1,154 (893) 261
Year to 31 December 2022 (Audited)
Total revenue 11,167 - 11,167
Adjusted EBITDA 4,051 (885) 3,166
Depreciation (168) - (168)
Amortisation of capitalised development costs (1,101) - (1,101)
Share based payment expense - (53) (53)
Non-recurring items 66 (428) (362)
Exchange (losses)/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
Geographic external revenue analysis
The revenue analysis in the table below is based on the geographical location
of the customer of the business.
6 months to 30 June 6 months to 30 June Year ended 31 December
2023 2022 2022
(Unaudited) (Unaudited) (Audited)
Total Total Total
£'000 £'000 £'000
By market
UK & Europe 3,362 1,992 4,967
North America 497 643 1,461
Latin America 350 342 787
Middle East 1,151 1,991 3,466
Asia / Pacific 108 70 486
5,468 5,038 11,167
Net liabilities
The table below summarises the net liabilities 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.
6 months to 30 June 2023 6 months to 30 June 2022 Year ended 31 December
2022
Total Total Total
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
By division:
Pebble Beach Systems 5,938 5,718 6,232
Group (6,412) (7,385) (6,979)
(474) (1,667) (747)
5. OPERATING PROFIT
The following items have been included in arriving at the operating profit for
the business:
6 months to 30 June 2023 6 months to 30 June 2022 Year ended 31 December
2022
Total Total Total
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Inventory recognised as an expense 610 829 1,457
Director and employee costs 3,244 2,923 6,231
Depreciation of property, plant and equipment 122 78 168
Non-recurring items - 257 362
Exchange (gains)/losses (credited)/charged to profit and loss 35 (47) (145)
Amortisation of capitalised development costs 634 528 1,101
6. INCOME TAX EXPENSE
6 months to 30 June 2023 6 months to 30 June 2022 Year ended 31 December
2022
Total Total Total
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Current tax
UK corporation tax - - -
Foreign Tax - current year 6 17 21
Adjustments in respect of prior years (8)
Total current tax 6 17 13
Deferred tax
UK corporation tax - - -
Total deferred tax - - -
Total taxation 6 17 13
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.
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.
6 months to 30 June 2023 (Unaudited)
Weighted
average Earnings
number per share
Earnings of shares pence
£'000 '000s
Basic earnings per share
Profit attributable to ordinary shareholders 242 0.2p
Basic earnings per share 242 124,477 0.2p
Diluted earnings per share
Profit attributable to ordinary shareholders 242 0.2p
Diluted earnings per share 242 125,114 0.2p
6 months to 30 June 2022 (Unaudited)
Weighted
average Earnings
number per
Earnings of shares share
£'000 '000s pence
Basic earnings per share
Profit attributable to ordinary shareholders 261 0.2p
Basic earnings per share 261 124,477 0.2p
Diluted earnings per share
Profit attributable to ordinary shareholders 261 0.2p
Diluted earnings per share 261 126,761 0.2p
Year ended 31 December 2022 (Audited)
Weighted
average Earnings
number per share
Earnings of shares pence
£'000 '000s
Basic earnings per share
Profit attributable to ordinary shareholders 1,182 0.9p
Basic earnings per share 1,182 124,477 0.9p
Diluted earnings per share
Profit attributable to ordinary shareholders 1,182 0.9p
Diluted earnings per share 1,182 125,709 0.9p
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:
6 months to 30 June 2023 6 months to 30 June 2022 Year ended 31 December
2022
Total Total Total
(Unaudited) (Unaudited) (Audited)
Earnings Earnings Earnings
£'000 Pence £'000 Pence £'000 Pence
Reported earnings and earnings per share 242 0.2p 261 0.2p 1,182 0.9p
Share based payment expense 28 0.0p 20 0.0p 53 0.0p
Exchange (gains)/losses 27 0.0p (38) 0.0p (117) (0.1p)
Non-recurring items - 0.0p 208 0.2p 294 0.3p
Adjusted earnings and earnings per share 297 0.2p 451 0.4p 1,412 1.1p
8. INTANGIBLE ASSETS
Goodwill Acquired customer relationships Acquired intellectual property Capitalised development costs Total
£'000 £'000 £'000 £'000 £'000
Cost
At 1 January 2022 (audited) 3,218 4,493 3,350 6,938 17,999
Additions (unaudited) - - - 920 920
At 30 June 2022 (unaudited) 3,218 4,493 3,350 7,858 18,919
At 1 January 2022 (audited) 3,218 4,493 3,350 6,938 17,999
Additions (audited) - - - 1,807 1,807
At 1 January 2023 (audited) 3,218 4,493 3,350 8,745 19,806
Additions (unaudited) - - - 941 941
At 30 June 2023 (unaudited) 3,218 4,493 3,350 9,686 20,747
Accumulated amortisation
At 1 January 2022 (audited) - 4,493 3,350 4,555 12,398
Charge for the period (unaudited) - - - 528 528
At 30 June 2022 (unaudited) - 4,493 3,350 5,083 12,926
At 1 January 2022 (audited) - 4,493 3,350 4,555 12,398
Charge for the year (audited) - - - 1,101 1,101
At 1 January 2023 (audited) - 4,493 3,350 5,656 13,499
Charge for the period (unaudited) - - - 633 634
At 30 June 2023 (unaudited) - 4,493 3,350 6,289 14,133
Net book value
At 30 June 2023 (unaudited) 3,218 - - 3,397 6,615
At 31 December 2022 (audited) 3,218 - - 3,089 6,307
At 30 June 2022 (unaudited) 3,218 - - 2,775 5,993
At 1 January 2022 (audited) 3,218 - - 2,383 5,601
The amortisation of development costs is included in research and development
expenses in the Consolidated Group Income Statement. Within capitalised
development costs there are £4.0 million (2022: £3.6 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 operating
activities.
6 months to 30 June 2023 6 months to 30 June 2022 Year ended 31 December
2022
Total Total Total
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Profit before tax 248 278 1,195
Depreciation of property, plant and equipment 122 78 168
Amortisation and impairment of development costs 634 528 1,101
Non-recurring item - - (66)
Share based payment expense 28 20 53
Finance income - - -
Finance costs 291 183 432
Decrease/(increase) in inventories 6 (80) (67)
Decrease/(increase) in trade and other receivables 263 (173) 3
Increase/(decrease) in trade and other payables 382 (32) (308)
Net cash generated from operating activities 1,974 802 2,511
10. NET FUNDS
Reconciliation of change in cash and cash equivalents to movement in net debt:
Net cash and cash equivalents Other borrowings Total net debt
£'000 £'000 £'000
At 1 January 2023 728 (6,485) (5,757)
Cash flow for the period before financing 720 - 720
Movement in borrowings in the period (500) 500 -
Exchange rate adjustments 3 - 3
Cash and cash equivalents at 30 June 2023 (Unaudited) 951 (6,050) (5,099)
At 1 January 2022 1,639 (7,550) (5,911)
Cash flow for the period before financing (340) - (340)
Movement in borrowings in the period (500) 500 -
Exchange rate adjustments - - -
Cash and cash equivalents at 30 June 2022 (Unaudited) 799 (7,050) (6,251)
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 (Audited) 728 (6,485) (5,757)
Ends
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