REG - Quartix Technologies - Interim Results
27/07/2022 07:00
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RNS Number : 8268T Quartix Technologies PLC 27 July 2022
27 July 2022
Quartix Technologies plc
("Quartix", "the Group" or "the Company")
Interim Results
Quartix Technologies plc (AIM:QTX), a leading supplier of subscription-based
vehicle tracking systems, software and services, is pleased to announce its
unaudited results for the half year ended 30 June 2022.
Financial highlights:
· Group revenue increased by 6.7% to £13.3m (2021: £12.5m)
· Adjusted EBITDA(1) decreased by 6.4% to £2.5m (2021: £2.7m) driven
by a 25.9% growth in new installations and established policy of immediately
expensing these costs
· Category contribution and investment:
o Telematics Services category contribution(2) increased by 11.2% to £10.5m
(2021: £9.4m)
o Customer Acquisition category investment(3) increased by 16.6% to £4.7m
(2021: £4.0m)
· Operating profit increased by 17.4% to £2.4m (2021: £2.1m)
· Profit before tax increased by 17.0% to £2.4m (2021: £2.1m)
· Diluted earnings per share of 4.17p (2021: 3.66p)
· Free cash flow(4) increased by 31.1% to £1.9m (2021: £1.4m)
· Interim dividend of 1.50p per share proposed (2021: 1.50p)
(1 ) Earnings before interest, tax, depreciation, amortisation and share
based payment expense (see note 4)
(2 ) Contribution before customer acquisition costs and central costs (see
note 3)
(3 ) Sales, marketing, net equipment, net installation and carriage costs for
new customers (see note 3 for full explanation)
(4 ) Cash flow from operations after tax and investing activities
Principal activities and performance measures
The Group's main strategic objective is to grow its subscription base and
develop the associated annualised recurring revenue.
Annualised recurring revenue has moved back into double-digit growth,
increasing by 11.3% year on year (see definition in KPI table below).
Annualised recurring revenue is a forward-looking key performance measure
and it is pleasing that it grew by £2.7m on a constant exchange rate, to
£26.0m at 30 June 2022, compared to 30 June 2021.
The Key Performance Indicators and the Segmental Analysis used by the Board to
assess the performance of the business are listed below and discussed in the
Chairman's Statement.
Key Performance Indicators ("KPIs")
Period ended 30 June 2022 2021 % change
Fleet subscriptions(1) (new units) 32,085 25,493 25.9
Annualised recurring revenue(2) (£'000) 26,039 23,387 11.3
Fleet subscription base(3) (units) 221,800 188,155 17.9
Fleet customer base(4) 24,408 20,698 17.9
Fleet attrition(5) (annualised) (%) 11.6 12.3
Price erosion(6) (%) 5.6 6.5
(1) New vehicle tracking units subscriptions added to the subscription base in
6 months to 30 June before any attrition
(2 ) Annualised data services revenue for the subscription base at 30 June,
before deferred revenue, including revenue for units waiting to be installed
for which subscription payments have already started or are committed, with
comparative June 2021 measured at a constant exchange rate
(3 ) The number of vehicle tracking units subscribed to the Group's fleet
tracking services, including units waiting to be installed for which
subscription payments have started or are committed
(4 ) The number of customers associated with the fleet subscription base
(5 ) The number of new vehicle tracking unit subscriptions, less the increase
in the subscription base, expressed as a percentage of the mean subscription
base
(6 ) The decrease in average subscription price of the base expressed as a
percentage of the average subscription price at June 2021, all measured at a
constant exchange rate.
In order to highlight the different cost structures within the business, the
Group will provide additional voluntary disclosure, separating the results
into two categories, see accounting policy note 1 for details.
Segmental analysis 2022 Customer Acquisition Telematics Services Total Business
(6 months, unaudited)
£'000 £'000 £'000
Revenue 200 13,133 13,333
Category costs (4,919) (2,660) (7,579)
Category (net costs) / contribution (4,719) 10,473 5,754
Central costs (3,259)
Adjusted EBITDA 2,495
Segmental analysis 2021 Customer Acquisition Telematics Services Total Business
(6 months, unaudited)
£'000 £'000 £'000
Revenue 131 12,362 12,493
Category costs (4,178) (2,944) (7,122)
Category (net costs) / contribution (4,047) 9,418 5,371
Central costs (2,704)
Adjusted EBITDA 2,667
The profit before central costs increased by £0.4m compared to the prior
year, at £5.8m (2021: £5.4m). The contribution from the Group's Telematics
Services category, grew by £1.1m to £10.5m (2021: £9.4m), which was
partially invested in organic growth by spending an additional £0.7m on new
unit installation costs, marketing and sales staff in the Customer Acquisition
category. Quartix's long established policy of immediately expensing the cost
of new units and their installation means that strong growth in new units
causes a short term reduction in profitability. This is followed by increased
profits due to the recurring nature of revenues.
Central costs have increased by £0.6m to £3.3m (2021: £2.7m) as a result of
the new Executive Directors employment costs and the investment in operational
processes and IT to support scalability in the business.
Richard Lilwall, Chief Executive Officer of Quartix, commented:
"I am delighted to report that we have shown a return to double-digit growth
in the value of our subscription base, growing 11.3% year on year to
£26.0m. Whilst H1 Adjusted EBITDA decreased by 6% to £2.5m (2021 2.7m) the
reasons for this are positive. Firstly, due to our accounting policy of
immediately recognising hardware and installation costs our record 26%
increase in new installations had a short term negative impact on Adjusted
EBITDA. Secondly, we have made some investments in tools and resources
targeted to drive growth in the future. Price erosion in our customer base
continues to slow and the price at which we add new customers has remained
stable since January 2019.
The exciting launch (in June) of our EVolve platform, which helps fleet
operators transition from internal combustion engine to electric vehicles,
adds upsell opportunity to existing customers and access to additional
customer segments - particularly those with passenger car fleets.
Subscription base growth in the UK (11%), France (31%) and other European
territories (88%) since June 2021 has been excellent. US growth (16%) has seen
mixed results across channels with some performing significantly better than
others. Some specific US initiatives are due in H2 and will combine with our
global sales execution excellence program to fuel accelerated US growth in
2023. We have confidence moving into the second half and for 2023 and are
confident in achieving market expectations."
(1) The Board believes that consensus market expectations for 2022 prior to
this announcement, were as follows: Revenue: £27.4m; Adjusted EBITDA £5.7m;
Free Cash Flow(2): £4.1m.
(2) Underlying Free Cash Flow stated before expenditure on 3G swap out in the
US - see 2021 Annual Report.
For further information, please contact:
Quartix (www.quartix.com (http://www.quartix.com)
/en-gb)
01686 806 663
Richard Lilwall, Chief Executive Officer
Emily Rees, Chief Financial Officer
finnCap (Nominated Adviser and Broker)
020 7200 0500
Matt Goode / Kate Bannatyne / Milesh Hindocha (Corporate Finance)
Alice Lane (Corporate Broking)
The information communicated in this announcement is inside information for
the purposes of Article 7 of Regulation 596/2014.
Interim Financial Results Report
The Group's Interim Financial Statements for the 6 months ended 30 June 2022
are available in the "Investors" section of our website at:
www.quartix.com/en-gb/company/investors
About Quartix
Founded in 2001, Quartix is a leading supplier of subscription-based vehicle
tracking systems, software and services. The Group provides an integrated
tracking and telematics data analysis solution for fleets of commercial
vehicles and motor insurance providers which improves productivity and safety
and which lowers costs by capturing, analysing and reporting vehicle and
driver data.
Quartix is based in the UK and is listed on the AIM market of the London Stock
Exchange (AIM:QTX).
Chairman's Statement
Introduction
Our key focus for the past 6 months has been the growth of the subscription
base both in the UK and overseas to drive an increase in recurring revenues.
As noted in the Highlights section, the annualised recurring revenue increased
by £2.7m, at a constant currency rate, to £26.0m at 30 June 2022. This was
achieved, with the Group experiencing strong growth in its subscription
platform. Performance in the first half of the year was particularly
encouraging; new subscriptions were 25.9% ahead of the prior year. Group
revenue grew by 6.7% during the first half of 2022.
Group annualised attrition marginally improved to 11.6% (2021: 12.3%) and
price erosion on a constant currency basis has reduced to 5.6% (2021: 6.5%).
Each geographical market registered increases in both new subscriptions and in
the subscription base for the period (see table below). The UK achieved new
unit installation growth of 23.0%, however total revenue remained at £8.9m,
due to price erosion and falling insurance revenue.
New unit installations growth was very impressive in France at 45.2%, driven
by a return on investment from the expansion of our direct sales force in
2021. French revenue increased by 22.0% to €3.0m (2021: €2.5m).
The USA increased its revenue by 10.6% to $2.0m (2021: $1.8m). The prospects
for future business development remain encouraging and continue to be a core
focus for the Group in the second half of 2022.
The Group continued to make progress in its other European territories.
Subscription Base ** New subscriptions Customers ** New Customers
United Kingdom ++
2022 133,020 14,814 11,520 800
2021 120,290 12,040 10,913 854
Change 12,730 2,774 607 (54)
France
2022 46,387 8,178 6,262 1,157
2021 35,364 5,631 4,811 793
Change 11,023 2,547 1,451 364
Other European Territories ++
2022 12,505 3,856 2,560 740
2021 6,655 2,970 1,459 569
Change 5,850 886 1,101 171
USA
2022 29,888 5,237 4,066 723
2021 25,846 4,852 3,515 634
Change 4,042 385 551 89
** Comparatives are June 2021
++ The figures for the UK exclude Ireland, which have been included in Other
European Territories for both the current and comparative KPIs. Management
consider this to be more appropriate given Ireland is part of the EU reporting
in euros.
We have launched our Quartix EVolve (electric vehicle analysis) product and
the pipeline is already building with new and existing customers. We will be
launching our Quartix Check (walkaround) module in the second half of our
financial year.
Results
Group revenue for the period increased by 6.7% to £13.3m (2021: £12.5m);
total fleet revenue now represents 95.8% of total revenue (2021: 92.9%).
Both operating profit and profit before tax for the period increased to £2.4m
(2021: £2.1m).
As illustrated in the segmental analysis under the Financial Highlights, the
profitability of the Group's Telematics Services category, which represents
the core part of the business associated with recurring revenues, grew by
£1.1m to £10.5m (2021: £9.4m). There was a £0.7m increase in Customer
Acquisition category's net cost to £4.7m in 2022 (2021: £4.0m), due to the
significant customer acquisition investment (see above and note 3). The
combined impact on total profit before central costs, was an increase of
£0.4m to £5.8m (2021: £5.4m).
Cash conversion strengthened, largely due to lower tax payments, resulting in
free cash flow, cash flow from operations after tax and investing activities,
of £1.9m (2021: £1.4m). Net cash decreased to £3.9m at 30 June 2022 (2021:
£4.3m), following the payment of a final and supplementary dividend for 2021
paid in April 2022, totalling £3.4m but without the benefit of £1.0m share
proceeds received in the prior year.
Earnings per share
Basic earnings per share were 4.20p (2021: 3.70p). On a diluted basis earnings
per share were 4.17p (2021: 3.66p).
Dividend Policy
Subject to satisfactory performance and market conditions, the Board will
consider a final dividend for the year with the aggregate of the interim and
final dividend set at approximately 50% of cash flow from operating
activities, which is calculated after taxation paid but before capital
expenditure. The Board will also consider distributing the excess of cash
balances over £2m by way of supplementary dividends. The surplus cash would
be calculated by taking the year end cash balance and deducting the proposed
regular dividend. The policy will be subject to review.
Dividend
The Board has recommended an interim dividend of 1.50p (2021: 1.50p) per
share, £0.7m in aggregate. The amount is in line with the Group's stated
policy on ordinary dividend payment. This was approved by the Board on 26 July
2022. The interim dividend will be paid on 9 September 2022 to shareholders on
the register on 12 August 2022. The ex-dividend date is therefore 11 August
2022.
Governance and the Board
The Board is comprised of three Non-Executive Directors: myself, Andy Walters
and Jim Warwick, and three Executive Directors: Richard Lilwall, Emily Rees
and Laura Seffino.
For further details regarding Corporate Governance and the Board, please see
the "Investors" section of our website
(www.quartix.com/en-gb/company/investors).
Outlook
Our work on operational scalability has been successful, allowing our team to
improve customer satisfaction on our growing subscription base without adding
further resources. Sales execution excellence is well underway with the
imminent introduction of new tools to drive best practice and insights at
every stage of the sales funnel. Initial implementation is expected to be
completed within the next quarter and further refinement and improvement will
allow us to achieve further revenue improvements in 2023.
The Group has made a strong start to the second half, in line with
management's expectations. The high levels of recurring revenue and
opportunities to grow our operations in the UK, USA, France and the rest of
Europe underpin our confidence for the rest of the year and beyond.
Paul Boughton
Chairman
Consolidated Statement of Comprehensive Income
30 June 30 June 31 December 2021
2022 2021
Half year ended 30 June 2022 Unaudited Unaudited Audited
Notes £'000 £'000 £'000
Revenue 2 13,333 12,493 25,513
Cost of sales (3,855) (3,861) (6,876)
Gross profit 9,478 8,632 18,637
Administrative expenses (7,069) (6,580) (13,328)
Operating profit 2,409 2,052 5,309
Finance income receivable 3 1 -
Finance costs payable (16) (6) (23)
Profit for the period before taxation 2,396 2,047 5,286
Tax expense (366) (264) (390)
Profit for the period 2,030 1,783 4,896
Other Comprehensive income:
Items that may be reclassified subsequently to profit or loss:
Exchange difference on translating foreign operations (181) 2 (101)
Other comprehensive income for the year, net of tax (181) 2 (101)
Total comprehensive income attributable to the equity shareholders of Quartix 1,849 1,785 4,795
Technologies plc
Adjusted EBITDA 4 2,495 2,667 5,725
Earnings per ordinary share (pence) 5
Basic 4.20 3.70 10.14
Diluted 4.17 3.66 10.07
Consolidated Statement of Financial Position
Company registration number: 06395159
30 June 2022 30 June 2021 31 December 2021
Unaudited Unaudited Audited
Assets Notes £'000 £'000 £'000
Non-current assets
Goodwill 14,029 14,029 14,029
Property, plant and equipment 834 1,060 956
Deferred tax asset 26 299 131
Contract cost assets 608 294 293
Total non-current assets 15,497 15,682 15,409
Current assets
Inventories 1,733 988 1,330
Trade and other receivables 4,140 4,045 3,986
Cash and cash equivalents 3,897 4,268 5,414
Total current assets 9,770 9,301 10,730
Total assets 25,267 24,983 26,139
Current liabilities
Trade and other payables 3,691 3,184 3,216
Provisions 640 1,605 953
Contract liabilities 3,476 3,533 3,160
Current tax liabilities 269 131 77
8,076 8,453 7,406
Non-current liabilities
Lease liabilities 609 694 650
609 694 650
Total liabilities 8,685 9,147 8,056
Net assets 16,582 15,836 18,083
Equity
Called up share capital 7 484 483 484
Share premium account 7 6,332 6,223 6,332
Equity reserve 373 694 380
Capital redemption reserve 4,663 4,663 4,663
Translation reserve (351) (67) (170)
Retained earnings 5,081 3,840 6,394
Total equity attributable to equity shareholders of Quartix Technologies plc 16,582 15,836 18,083
Consolidated Statement of Changes in Equity
Share capital Share premium account Capital redemption reserve Equity reserve Translation reserve Retained earnings Total equity
£'000 £,000 £'000 £'000 £'000 £'000 £'000
Balance at 31 December 2020 479 5,252 4,663 792 (69) 10,316 21,433
Shares issued 4 971 - - - - 975
Increase in equity reserve in relation to options issued - - - 102 - - 102
Adjustment for settled options - - - (98) - - (98
Adjustment for exercised options - - - (290) - 290 -
Deferred tax on share Options - - - 188 - - 188
Dividend paid - - - - - (8,549) (8,549)
Transactions with owners 4 971 - (98) - (8,259) (7,382)
Foreign currency translation differences - - - - 2 - 2
Profit for the period - - - - - 1,783 1,783
Total comprehensive income - - - - 2 1,783 1,785
Balance at 30 June 2021 483 6,223 4,663 694 (67) 3,840 15,836
Shares issued 1 109 - - - - 110
Increase in equity reserve in relation to options issued - - - 68 - - 68
Adjustment for exercised options - - - (166) - 166 -
Deferred tax on share Options - - - (216) - - (216)
Dividend paid - - - - - (725) (725)
Transactions with owners 1 109 - (314) - (559) (763)
Foreign currency translation differences - - - - (103) - (103)
Profit for the period - - - - - 3,113 3,113
Total comprehensive income - - - - (103) 3,113 3,010
Balance at 31 December 2021 484 6,332 4,663 380 (170) 6,394 18,083
Increase in equity reserve in relation to options issued - - - 40 - - 40
Adjustment for settled options - - - (3) - - (3)
Adjustment for exercised options - - - (44) - 44 -
Dividend paid - - - - - (3,387) (3,387)
Transactions with owners - - - (7) - (3,343) (3,350)
Foreign currency translation differences - - - - (181) - (181)
Profit for the period - - - - - 2,030 2,030
Total comprehensive income - - - - (181) 2,030 1,849
Balance at 30 June 2022 484 6,332 4,663 373 (351) 5,081 16,582
Consolidated Statement of Cash Flows
30 June 30 June 31 December 2021
2022 2021
Unaudited Unaudited Audited
Notes £'000 £'000 £'000
Cash generated from operations 6 1,947 1,845 3,963
Taxes paid (68) (404) (636)
Cash flow from operating activities 1,879 1,441 3,327
Investing activities
Additions to property, plant and equipment (25) (26) (61)
Interest received 3 1 -
Cash flow from investing activities (22) (25) (61)
Cash flow from operating activities after investing activities (free cash 1,857 1,416 3,266
flow)
Financing activities
Repayment of lease liabilities (73) (98) (166)
Proceeds from share issues 7 - 975 1,085
Dividend paid (3,387) (8,549) (9,274)
Cash flow from financing activities (3,460) (7,672) (8,355)
Net changes in cash and cash equivalents (1,603) (6,256) (5,089)
Cash and cash equivalents, beginning of period 5,414 10,570 10,570
Exchange differences on cash & cash equivalents 86 (46) (67)
Cash and cash equivalents, end of period 3,897 4,268 5,414
Notes to the Financial Statements (unaudited)
1 Significant accounting policies
Basis of preparation
The financial information has been prepared in accordance with recognition and
measurement principles of International accounting standards in conformity
with the requirements of the Companies Act 2006 ("IFRS (UK)") and in
accordance with those parts of the Companies Act 2006 that are relevant to
companies which report under IFRS (UK). The accounting policies adopted are
consistent with those of the financial statements for the year ended 31
December 2021, as described in those financial statements. In preparing these
interim financial statements, the Board has not sought to adopt IAS 34
"Interim financial reporting".
The figures for the six-month periods ended 30 June 2022 and 30 June 2021 have
not been audited.
The figures for the year ended 31 December 2021 have been extracted from, but
do not constitute, the consolidated financial statements of Quartix
Technologies plc for that year. The original financial statements for the year
ended 31 December 2021 have been delivered to the Registrar of Companies and
included an Auditors' Report, which was unqualified and did not contain a
statement under section 498(2) or section 498(3) of the Companies Act 2006.
Going concern
The consequences of the war in Ukraine and the coronavirus pandemic have
materially and adversely disrupted the global economic situation. The Company
is taking appropriate action to monitor, address and mitigate the
uncertainties and increased risks facing the Company as a result and have
taken these additional uncertainties into account in assessing the going
concern position.
The Board takes all reasonable steps to review and consider any factors that
may affect the ability of the Group to continue as a going concern. The
Group's forecasts and projections, taking account of reasonably possible
changes in trading performance, show that the Group is able to generate
sufficient liquidity. The Group enjoys a strong income stream from its
subscription base while current liabilities include a substantial provision
for deferred revenue which is a non-cash item.
After assessing the forecasts and liquidity of the business, for the next 18
months and the longer term strategic plans, the Directors have a reasonable
expectation that the Group has adequate resources to continue in operational
existence for the foreseeable future. The Group therefore continues to adopt
the going concern basis in preparing consolidated financial statements.
Segmental reporting
In order to highlight the different cost structures within the business, the
Group will provide additional voluntary disclosure, separating the results
into two categories, see note 3 below.
• Customer Acquisition: This is the sales and
marketing cost of acquiring new customers and the cost associated with units
installed for those customers. Recurring subscription revenue is not
recognised in this sub-category, only equipment and installation income
attributed to new customers.
• Telematics Services: This is the recurring revenue
associated with the Group's active subscription base and the cost of servicing
that subscription base. The costs in this category include the cost of
installing additional units for existing customers, as well as the associated
marketing costs.
Some central overhead costs, such as Director salaries, development, audit and
legal fees, property costs and infrastructure costs, which can't be easily
allocated between the two categories are simply recorded in total.
As explained in the 2021 Annual Report, the former insurance operations are
now included in the Telematics Services category.
Segmental information, including a reconciliation to the financial statements,
are included in note 3.
2 Revenue
Revenues from external customers in the Group's major markets have been
identified based on the customer's geographical location and are disclosed
below.
30 June 2022 30 June 2021 31 December 2021
Unaudited Unaudited Audited
£'000 £'000 £'000
Geographical analysis by destination
United Kingdom 8,871 8,872 17,953
France 2,523 2,132 4,425
New European territories 433 216 507
United States of America 1,506 1,273 2,628
13,333 12,493 25,513
3 Segmental analysis
For an explanation of the categories within segmental analysis see accounting
policy (note 1).
Segmental analysis Customer Acquisition Telematics Services Total
6ms to 30 June 2022
Unaudited £'000 £'000 £'000
Recurring revenue - 12,343 12,343
Other sales 200 790 990
Total revenue 200 13,133 13,333
Sales & marketing (3,516) (489) (4,005)
Equipment, installations, carriage (1,403) (861) (2,264)
Costs of Service - (1,310) (1,310)
Total category cost (4,919) (2,660) (7,579)
Category (net costs)/contribution (4,719) 10,473 5,754
Central costs (3,259)
Adjusted EBITDA (see note 4) 2,495
Segmental analysis Customer Acquisition Telematics Services Total
6ms to 30 June 2021
unaudited £'000 £'000 £'000
Recurring revenue - 11,053 11,053
Other sales 131 1,309 1,440
Total revenue 131 12,362 12,493
Sales & marketing (3,113) (536) (3,649)
Equipment, installations, carriage (1,065) (1,158) (2,223)
Costs of Service - (1,250) (1,250)
Total category cost (4,178) (2,944) (7,122)
Category (net costs)/contribution (4,047) 9,418 5,371
Central costs (2,704)
Adjusted EBITDA (see note 4) 2,667
Segmental analysis Customer Acquisition Telematics Services Total
12ms to 31 December 2021
Audited £'000 £'000 £'000
Recurring revenue - 22,506 22,506
Other sales 280 2,727 3,007
Total revenue 280 25,233 25,513
Sales & marketing (6,538) (1,075) (7,613)
Equipment, installations, carriage (2,154) **(1,896) (4,050)
Costs of Service - (2,466) (2,466)
Total category costs (8,692) (5,437) (14,129)
Category (net costs)/contribution (8,412) 19,796 11,384
Central costs (5,659)
Adjusted EBITDA (see note 4) 5,725
** The figures above do not include the £0.4m exceptional release of the
provision for replacing the 3G units in the US market. As the replacement
units relate to existing customers, the total cost would be allocated to the
Fleet Telematics Services sub-segment costs.
Reconciliation of the total category costs to the cost of sales on the income
statement is as below:
30 June 2022 30 June 2021 31 December 2021
Unaudited Unaudited Audited
£'000 £'000 £'000
Total category costs 7,579 7,122 14,129
Less elements included in administrative expenses:
Cost of services: employees (252) (348) (714)
Selling & marketing exc. direct commissions (3,234) (2,841) (5,991)
Bad Debts (238) (72) (118)
Add: 3G replacement provision not included in category costs - - (430)
Cost of sales 3,855 3,861 6,876
4 Adjusted earnings before interest, tax,
depreciation and amortisation (EBITDA)
30 June 2022 30 June 2021 31 December 2021
Unaudited Unaudited Audited
£'000 £'000 £'000
Operating profit 2,409 2,052 5,309
Depreciation on property, plant and equipment, owned 75 96 180
Depreciation on property, plant and equipment, right of use 65 79 151
EBITDA 2,549 2,227 5,640
Share-based payment expense (incl. cash settled) (54) 440 515
Provision for replacement of 3G units - - (430)
Adjusted EBITDA 2,495 2,667 5,725
5 Earnings per share
The calculation of the basic earnings per share is based on the profits
attributable to the shareholders of Quartix Technologies plc divided by the
weighted average number of shares in issue during the period. The earnings per
share calculation relates to continuing operations of the Group.
Profits attributable to shareholders Weighted average number of shares Basic profit per share amount Fully diluted Diluted profit per share amount
weighted average number of shares
£'000 in pence in pence
Earnings per ordinary share
Period ended 30 June 2022 2,030 48,382,436 4.20 48,628,750 4.17
Period ended 30 June 2021 1,783 48,170,328 3.70 48,669,733 3.66
Year ended 31 December 2021 4,896 48,269,166 10.14 48,661,104 10.07
Adjusted earnings per ordinary share
Year ended 31 December 2021 4,466 48,269,166 9.26 48,661,104 9.18
For diluted earnings per share, the weighted average number of ordinary shares
is adjusted to assume the conversion of all dilutive potential ordinary
shares. Dilutive potential ordinary shares are those share options where the
exercise price is less than the average market price of the Company's ordinary
shares during the period.
To illustrate the underlying earnings for the year, the table above includes
adjusted earnings per ordinary share, which for 31 December 2021 excludes the
£0.4m release of the exceptional 3G replacement unit provision.
6 Note to the cash flow statement
Cash flow adjustments and changes in working capital:
30 June 2022 30 June 2021 31 December 2021
Unaudited Unaudited Audited
£'000 £'000 £'000
Profit before tax 2,396 2,047 5,286
Foreign exchange (209) 55 39
Depreciation 140 175 331
Interest income (3) (1) -
Lease interest expense 16 6 23
Loss on disposal of fixed asset 28 - -
Share based payment expense 38 5 72
Operating cash flow before movement in working capital 2,406 2,287 5,751
(Increase)/decrease in trade and other receivables (409) (272) (231)
Decrease/(increase) in inventories (403) (294) (636)
(Decrease)/increase in trade and other payables 81 236 (427)
(Decrease)/increase in contract liabilities 272 (112) (494)
Cash generated from operations 1,947 1,845 3,963
7 Equity
Number of ordinary shares of £0.01 each Share capital £'000 Share premium £'000
Allotted, called up and fully paid
At 1 January 2021 47,962,516 479 5,252
Shares issued 376,876 4 971
At 30 June 2021 48,339,392 483 6,223
Shares issued 40,642 1 109
As at 31 December 2021 48,380,034 484 6,332
Shares issued 12,144 - -
At 30 June 2022 48,392,178 484 6,332
All shares issued in the period to 30 June 2022 relate to the exercise of
share options.
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