REG - Raspberry Pi Hldgs - Interim Results
24/09/2024 07:00
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RNS Number : 3959F Raspberry Pi Holdings PLC 24 September 2024
24 September 2024
Raspberry Pi Holdings plc
("Raspberry Pi" or "the Company")
Interim Results for the six months to 30 June 2024
Higher gross profit per unit drives strong H1
Highlights include the successful IPO, strong uptake of Raspberry Pi5, and
launch of new AI product
Raspberry Pi (LSE: RPI), a leader in low-cost, high-performance computing, is
pleased to announce its results for the six months ended 30 June 2024 ("H1
2024").
Financial Highlights
H1 2024 H1 2023 Change
Revenue ($m) $144.0m $89.3m +61%
Gross profit ($m) $34.2m $23.2m +47%
Gross margin (%) 23.8% 26.1% -2.3ppts
Unit volume (m) 3.66m 2.80m +31%
Adjusted EBITDA* ($m) $20.9m $13.5m +55%
Basic Earnings Per Share (EPS) (c) 3.92c 4.39c -11%
Adjusted EPS (c)* 5.84c 4.60c +27%
Net cash ($m) $40.4m $36.9m +9%
*The Group uses certain measures in addition to those reported under IFRS,
under which the Group reports. These Alternative Performance Measures ("APMs")
are not considered a substitute for, or superior to, the equivalent statutory
IFRS measures. These APMs are explained, defined and reconciled in the APM
section and are applied consistently.
· First half profitability was stronger than expected with Gross Profit of
$34.2m and Adjusted EBITDA of $20.9m up 55% against a supply-constrained
comparative H1 2023.
· Volumes were marginally lower than expected, with sales skewed towards higher
margin variants, yielding stronger unit economics.
Operational Highlights
IPO and FTSE 250 index inclusion
· Successful IPO raising £178.9 million (c. $225 million), including £31.4m
($40m) for the Company.
· FTSE 250 index inclusion confirmed as part of the September FTSE Quarterly
review.
· Awarded the London Stock Exchange's Green Economy Mark based on the energy
efficiency benefits of our computers.
Supply chain recovery:
· Completed recovery from pandemic related shortages, with almost all Single
Board Computers (SBCs) and Compute Module products freely available in
channel.
New product introduction:
· A major product transition, with Raspberry Pi5 selling 1.1m units in H1
following introduction at the end of October 2023.
· Successful launch of first-party AI hardware product (Raspberry Pi AI Kit), in
collaboration with Hailo.
· Debut of cloud connectivity product (Raspberry Pi Connect) with 50k users
since launch in May 2024.
· Production ramp of RP2350 microcontroller, supporting introduction of
Raspberry Pi Pico 2 and partner hardware products in August.
Outlook
· Having previously expected performance to be weighted towards the second half
of the year, this is no longer the case, with profitability in the first half
ahead of internal expectations.
· Higher unit volumes anticipated for the second half, supported by new product
launches, with an expected product mix contributing to lower unit economics.
· Raspberry Pi continues to observe higher than usual customer and channel
inventory levels, however we are seeing signs that this should normalise
towards the end of the year.
· Expectations for the full year remain unchanged.
Eben Upton, CEO of Raspberry Pi said:
"The IPO was the watershed moment of the first half, with Admission to trading
just two weeks before the period end. In continued pleasing trading in the
first half, we saw strong uptake of our latest flagship SBC, Raspberry Pi5,
the launch of the Raspberry Pi AI Kit, and the successful ramp to production
of RP2350, our second-generation microcontroller platform. The higher than
usual customer and channel inventory levels which were evident at the time of
the IPO have continued to unwind, and there is a growing sense that this will
have concluded by the year end. We have an extraordinary team, a world class
product set backed up by an exciting future roadmap, and a loyal and engaged
customer base that we can continue to grow. In the second half, we have
further planned product releases and a number of initiatives to further expand
our engagement within our Industrial and Embedded market".
Hybrid analyst and institutional investor presentation
Eben Upton, CEO, and Richard Boult, CFO, will host a hybrid analyst and
institutional investor briefing today at 09:00 BST at the offices of Peel
Hunt, 7th Floor, 100 Liverpool St, London EC2M 2AT.
Those wishing to attend the event in person or online, please register
via raspberrypi@almastrategic.com. (mailto:raspberrypi@almastrategic.com)
Investor presentation
Management will also host a live virtual presentation relating to the results
via the London Stock Exchange's SparkLive platform at 14.30 BST on 24
September 2024, for all investors and analysts unable to join the earlier
meeting.
To register for the event, please use the following link:
https://sparklive.lseg.com/RaspberryPi/events/bf496d03-a8ad-4929-a20b-82568b979921/raspberry-pi-half-year-results-2024
(https://sparklive.lseg.com/RaspberryPi/events/bf496d03-a8ad-4929-a20b-82568b979921/raspberry-pi-half-year-results-2024)
This announcement contains certain forward-looking statements, including with
respect to the Group's current targets, expectations and projections about
future performance, anticipated events or trends and other matters that are
not historical facts. These forward‐looking statements, which sometimes use
words such as "aim", "anticipate", "believe", "intend", "plan", "estimate",
"expect" and words of similar meaning, include all matters that are not
historical facts and reflect the directors' beliefs and expectations, made in
good faith and based on the information available to them at the time of the
announcement. Such statements involve a number of risks, uncertainties and
assumptions that could cause actual results and performance to differ
materially from any expected future results or performance expressed or
implied by the forward‐ looking statement and should be treated with
caution. Any forward-looking statements made in this announcement by or on
behalf of Raspberry Pi speak only as of the date they are made. Except as
required by applicable law or regulation, Raspberry Pi expressly disclaims any
obligation or undertaking to publish any updates or revisions to any
forward-looking statements contained in this announcement to reflect any
changes in its expectations with regard thereto or any changes in events,
conditions or circumstances on which any such statement is based.
For more information, please contact:
Raspberry Pi Holdings plc
Eben Upton, CEO, Richard Boult, CFO Alma Strategic Communications
Andy Bryant - IR investors@raspberrypi.com (mailto:investors@raspberrypi.com)
Alma Strategic Communications T: +44 (0)203 405 0205
Josh Royston, Caroline Forde, Hannah Campbell raspberrypi@almastrategic.com (mailto:raspberrypi@almastrategic.com)
Notes to Editor
Headquartered in Cambridge, UK, Raspberry Pi's mission is to put
high-performance, low-cost, general-purpose computing platforms in the hands
of enthusiasts and engineers all over the world.
Raspberry Pi is a full-stack engineering organisation, with research and
development capabilities spanning the entire value chain, from semiconductor
IP development, through semiconductor and electronic product design to
software engineering and regulatory compliance. The high performance, low
cost, and physical robustness of Raspberry Pi products make them suitable for
a wide range of applications, across three distinct markets: Industrial and
Embedded, Enthusiast and Education and Semiconductors. To date, over 60
million units have been sold.
Raspberry Pi Foundation is a UK charity founded to enable young people to
realise their potential through computing and remains a major shareholder. The
Company is proud to have generated over $230m since inception for the
Foundation, from dividends and share sell down at IPO, and they remain a 46.7%
shareholder.
CEO review
Business Review
The headline event of the first half of the year was the Group's IPO on the
Main Market of the London Stock Exchange, in which we saw investment from
industry partners, financial institutions, members of our loyal community, and
the wider public. We are grateful for the support that we received and
encouraged that such a broad audience shares our vision for the future. The
IPO, and the investments that it will enable, underpin our long-term
commitment to product innovation, unit sales growth, and improved unit
economics, positioning us for continued success and value creation in the
evolving embedded computing landscape.
Financial performance
We are pleased with the trading performance of Raspberry Pi through the first
half of the year, given the natural distraction of the IPO process, and an
ongoing industry-wide inventory correction. As noted, first-half profitability
was stronger than we had previously expected, with Gross Profit of $34.2m and
Adjusted EBITDA of $20.9m, up 55% against a supply-constrained comparative H1
2023. Across our single-board computer and compute module product lines,
volumes were marginally lower than expected, but sales were skewed towards
higher margin variants, yielding stronger unit economics and driving the
better than expected profit performance. After raising $31.8m after fees in
the IPO, we finished the half year with $40.4m of net cash.
Product and markets
Our products include SBCs, compute modules, accessories, and semiconductors,
catering to three main markets: Industrial & Embedded, Enthusiast &
Education, and the Semiconductor market, which we entered in 2021. We sell our
products in 75 countries and utilise a flexible distribution model that
encompasses direct sales to OEMs, reseller and distributor partnerships, and a
licensing agreement with Premier Farnell.
In the first half, we sold 3.66m SBCs and compute modules, up 31% against a
supply-constrained comparative H1 2023. We were particularly pleased with the
success of our flagship SBC, Raspberry Pi5, which sold 1.1m units in the first
half, following introduction at the end of October 2023. Outside of our core
boards business we saw growth in sales of our semiconductor products, to 2.1m
units in the first half and the increasing contribution to unit economics from
our expanding range of accessories.
The market opportunity for Raspberry Pi products is substantial, with a total
addressable market across the Industrial & Embedded and Environmental
& Education markets estimated at $21.2 billion in 2023. We continue to
make the investments in quality, availability and long-term support that
underpin our success in the Industrial & Embedded market, while developing
and introducing new product derivatives and accessories which target one or
other, or in many cases, both markets.
Strategic Progress
Our strategy is to create value over the medium to long term by growing unit
sales; growing total unit profit margin; and growing our profit margin
participation. Our ability to achieve this is underpinned by three core
competitive strengths:
· Brand equity and community: Since the launch of the first Raspberry Pi product
in 2012, we have built an enviable reputation for value and quality. We engage
actively with the community of enthusiasts, educators, and professional design
engineers that has grown up around our platform, promoting new products and
capabilities, and garnering feedback which informs our future plans.
· A loyal OEM customer base, served by a diverse channel: Our following among
professional design engineers has, over time, driven widespread adoption of
our products by OEMs. As noted, we serve these customers directly, via
reseller and distributor partners, and via our licensee. We continue to evolve
our OEM sales strategy, as we work to further strengthen our direct channels.
· A high level of vertical integration: Our engineering capabilities span the
value chain, from semiconductor IP development to platform software
engineering and regulatory compliance. This vertically integrated approach
provides us with unparalleled control over our products' performance and cost
structure and allows us to mitigate supply chain risks.
In the first half of the year, we continued to invest in online and offline
engagement, both in our current core markets, and in newer ones, most notably
sub-Saharan Africa. Our total followership across social media channels rose
by 8%. Trade shows provide us with an opportunity to engage with existing and
potential OEM customers, and we have committed to increase our participation
over time: the first half of the year saw a greatly expanded presence at our
tent-pole event, Embedded World, and first appearances at Embedded World
Shanghai and GITEX Africa. We added 13 new Approved Reseller partners, of
which six were in Europe, targeting specific underserved geographies and
market segments, three in India, and four elsewhere.
During the period of post-pandemic supply chain disruption, the proportion of
units sold through our direct channels reached in excess of 80%. With the
return to ex-stock availability of most products, this ratio has adjusted in
the first half of the year, with 35% of units sold via our remaining licensee,
Farnell. In the short to medium term, we expect the licensee fraction to
remain in the range of 20-30%.
We continue to explore opportunities to increase direct-to-OEM sales and to
convert our highest-volume OEM customers to more customised products to
optimise profitability and retention. With the return to ex-stock availability
of our products, we continue to attract these customers. Notable OEM customers
who ramped to production in the first half of the year include Target Darts in
the UK leisure sector and Techbase in Poland who manufacture Energy Management
systems for utilities.
The first half of the year also saw the ramp and introduction of products
which leverage our full-stack engineering capabilities. The Raspberry Pi AI
Kit brings ML accelerator silicon from our partners Hailo together with our
in-house imaging expertise to deliver an easy-to-use platform for industrial
machine-vision applications. Raspberry Pi Connect, currently in public beta,
is the first instantiation of our in-house IoT connectivity platform,
providing remote access to Raspberry Pi devices in field. Our
second-generation RP2350 microcontroller, which ramped to production in the
first half, brings together industry-standard technology from Arm with our
patent-pending programmable I/O (PIO) and redundancy coprocessor IP to create
a secure compute element for IoT endpoints.
ESG
Our social and environmental impact rests on three key pillars: the
educational work of our major shareholder, Raspberry Pi Foundation; the
environmental benefits derived from the deployment of Raspberry Pi computer
systems; and the capabilities we offer to smaller entrepreneurial OEMs, who
would otherwise struggle to access cost-effective compute subsystems on which
to build their own products.
Since inception, we have contributed over $230 million in cash to the
Foundation, supporting its work in curriculum development, teacher training,
non-formal learning and research. The successful IPO created a substantial
multi-year endowment to continue its work at greater scale and today the
Foundation retains a shareholding of 46.7%.
In the first half year of the year, we made good progress in quantifying the
carbon footprint of our flagship Raspberry Pi SBC product, as a baseline for
future emissions reduction efforts; we expect to extend this to all products
in the second half of the year, and to introduce a scheme allowing our
customers to offset emissions associated with manufacturing, shipping and
disposal at point of purchase. The first half of the year also saw us install
an initial 85kW of solar generation capacity, representing approximately 20%
of our total office energy consumption, at our Cambridge headquarters. We
purchase high-quality offsets based on enhanced rock weathering technology to
cover the balance and are committed to reducing this over time.
Following Admission, we received the London Stock Exchange's Green Economy
Mark, which identifies companies and funds that derive a material share of
their revenues from products and services that contribute to the global green
economy.
People
The IPO highlighted the strength of the team within Raspberry Pi and the
outstanding work that they do on a daily basis. Average headcount for the
first half was 115, an increase of 21% over the average of 95 for H1 2023. We
maintain our focus on attracting the very best engineering and non-engineering
talent, offering our people the opportunity to create the high-performance
products in a high-performing environment. With a significant number of staff
holding shares and/ or share options in the Company, their interests are
firmly aligned with the wider shareholder base.
Outlook
As reported at the time of the IPO, and in-line with the wider industry, we
continue to observe higher than usual customer and channel inventory levels,
however we are seeing signs that this should normalise towards the end of the
year. The launch of Pico 2, together with other product variant releases,
should support higher unit volumes for the second half, with the expected
product mix contributing to lower unit economics. Having previously expected
performance to be weighted towards the second half of the year, this is no
longer the case, with profitability in the first half ahead of internal
expectations. Overall, we are encouraged by the resilient performance of the
business given the market conditions widely reported by our peers. Our
expectations for the full year remain unchanged.
Dr Eben Upton CBE
Chief Executive Officer and Founder
23 September 2024
Financial Review
The first half of 2024 was characterised by a return to availability of
components and in turn our products to our reseller partners and customers.
Whilst volumes were marginally lower than expected, sales were skewed towards
higher margin variants, yielding stronger unit economics and higher gross
profits.
$million H1 2024 H1 2023 % Change
Revenue 144.0 89.3 +61%
Gross profit 34.2 23.2 + 47%
Gross margin (%) 23.8% 26.1% -2.3ppt
Adjusted R&D costs (4.2) (2.9) + 45%
Adjusted Administration costs (9.1) (6.8) + 34%
Adjusted EBITDA 20.9 13.5 + 55%
Depreciation and amortisation (5.2) (2.6) +100%
Adjusted Operating profit 15.7 10.9 + 44%
Unit sales of Single Board Computers (SBCs) and compute modules and
microcontrollers
Total board sales volumes increased by 31% on the supply constrained first
half of 2023, due to the growth in compute module sales and 1.1 million unit
sales of Raspberry Pi5 (launched in October 2023), while as expected, there
was a decline in Raspberry Pi4 unit sales and the sales of legacy boards. In
aggregate, volumes were marginally lower than expected as higher than usual
customer and channel inventory levels persisted through Q2. We anticipate
higher unit volumes for the second half, supported by new product launches.
Thousand units H1 2024 H1 2023 % Change
Unit sales in direct channel 2,361 2,267 + 4%
Unit sales through licensees 1,299 532 + 144%
Total unit sales 3,660 2,799 + 31%
Direct sales share of total 65% 81% -16ppt
Licensee share of total 35% 19% +16ppt
Microcontroller units 2,153 1,650 + 30%
Sales for the first half of 2023 were constrained by supply of key Broadcom
components with supply to our licensee partner Farnell most affected. As
planned, and in accordance with our agreement with Farnell, sales of high
value Raspberry Pi4 and Raspberry Pi5 products are made for and sold by
Farnell. Sales of Raspberry Pi5 launched in Q4. These were therefore
predominantly directed through the licensee channel which resulted in the
licensee share of board unit sales rising by 16 percentage points to 35%.
Microcontroller unit sales, which include those incorporated in other
Raspberry Pi products such as Raspberry Pi Pico boards increased by 30% on
2023.
Revenue
Revenue increased by $54.7m, or 61 per cent, from $89.3m for H1 2023 to
$144.0m for H1 2024. The split by category was as follows:
$million H1 2024 H1 2023 % Change
Product Sales 89.5 74.6 + 20%
Components 43.6 11.1 + 293%
Royalties 10.3 3.1 + 232%
Publishing 0.6 0.5 +20%
Reported revenue 144.0 89.3 +61%
Product sales are split between our two channels: direct which includes sales
to our reseller network and OEM/Industrial clients; and our sales via our
distribution partner Premier Farnell for which we receive a near 100% margin
royalty on each unit sold.
Growth in direct product sales largely relates to greater sales of single
board computers and compute modules. Total board unit sales were 3.7m versus
2.8m in the comparative period. The share of licensee sales increased from 19%
in H1 2023 to 35% in H1 2024 which also drove the growth in component sales.
Component sales represent the sale of components used in the manufacture of
Raspberry Pi products for our licensee channel which are then sold to end
customers. The increase results from an increase in the volume of chips
supplied to meet the licensee's increased sales and production, together with
sales by the Group of application processor chips to Sony, also for licensee
use, which had typically been acquired directly from the manufacturer by Sony
in 2023.
Gross profit
Gross profit increased by $11.0m, or 47 per cent, from $23.2m in H1 2023 to
$34.2m in the current period. Unit sales of boards increased by 31% and gross
profit per unit increased by 8%.
Gross profit per board
$ per board H1 2024 H1 2023 % Change
Single Board Computers and Compute Modules 8.3 7.7 + 8%
Board share of Gross profit 89% 90% -1ppt
Accessory margin per board 1.1 0.8 + 38%
ASP increased by 28% from $36.8 in 2023 to $47.2 in 2024 due to an increase in
the mix of higher price Raspberry Pi4, Raspberry Pi5 boards and compute
modules. The gross profit per unit of these higher priced boards was
accordingly higher. However, as anticipated, the unit gross profit of
Raspberry Pi5 boards was not as high as for Raspberry Pi4 and the increase in
gross profit per unit was therefore not as large as the ASP increase.
The gross profit of accessories increased by 74% to $4.1 million as a result
of higher board sales and in particular accessories for the new Raspberry Pi5
and improved margins on displays.
Gross margin reduced to 23.8% (2023: 26.1%) largely reflecting the higher mix
of component sales in the half.
Adjusted Research and Development costs
Adjusted research and development expenses comprising research and development
costs not capitalised increased by 45% to $4.2 million for the six months
ended 30 June 2024 from $2.9 million for the six months ended 30 June 2023.
The average number of engineering staff increased from 46 to 61. The
additional salaries of these staff together with pay rises were partially
offset by a higher proportion of costs being capitalised, as new staff were
primarily focused on projects which met our criteria for capitalisation.
Adjusted Administration costs
The increase in adjusted administration costs, in line with our plans, was
principally due to the growth in professional fees and staff costs. Staff
costs increased in the main due to salary inflation while professional fees
related to the ERP system and other support costs arising from the growth in
the business.
Depreciation and amortisation
Depreciation and amortisation charges increased as a result of the
depreciation for the new office building, occupied in December 2023 and
amortisation of the development costs of Raspberry Pi5 launched in October
2023.
Finance costs and finance income
Finance costs have increased due to the finance element of the lease of the
new office of $0.6 million and non-utilisation fees in respect of the new RCF
facility.
Adjusting items
Share based payments
A share based payment charge of $2.2 million was recorded in the period. The
charge comprises $0.8 million in respect of the charges arising on the pre-IPO
scheme, a $1.2m accelerated charge on vesting and settlement of that scheme
and an additional $0.2 million in respect of the new post IPO awards granted
on the 11 June 2024 listing date.
Market value options were granted to 93 members of staff. The options have a
strike price of £2.80 being the price at which shares were issued and sold as
part of the listing. The awards have been designed to ensure that, in
conjunction with the shares granted on settlement of the pre-IPO scheme, staff
continue to be motivated by the success of the Group to the same extent as in
the past.
IPO costs
Costs of $2.1 million have been charged to the income statement in respect of
fees and charges arising from the listing process which were incurred to
prepare the business for operation after listing. Expenses related to the
issue of shares of $8.3 million have been charged to the Share Premium account
arising from the share issue.
Taxation
In accordance with IAS 34, Interim Financial Reporting, taxation for the
period is reported by applying the estimated annual effective tax rate to the
interim profit before tax. The effective tax rate for this period is 29%,
compared to 19% for H1 2023 while the underlying effective tax rate is 25%, up
from 22% for H1 2023.
As all the Group's pre-tax profits are generated from UK trading activities
and therefore all subject to UK tax, the underlying effective tax rate
corresponds to UK corporation tax rates.
The increase in the underlying tax rate reflects the rise in the UK
corporation tax rate from 19% to 25%, effective from 1 April 2023. The 29%
effective tax rate for the current period exceeds the underlying rate of 25%
primarily due to $2.1 million in non-recurring IPO-related costs. These costs
have been classified as fully non-deductible for tax purposes, as they are
considered capital in nature, being directly related to the IPO. The 19%
effective tax rate in the prior period was lower than the underlying rate of
22% due to group relief received from Raspberry Pi Foundation in respect of
qualifying charitable deductions.
Adjusted EBITDA and Adjusted operating profit
Adjusted EBITDA for the period was $20.9 million (2023: $13.5 million) an
increase of 55% compared to a 31% increase in unit sales. Adjusted operating
profit was $15.7 million (2023: $10.9 million) an increase of 44%.
Operating profit and Profit after taxation for the period
Operating profit for the period was $11.4 million (2023: $10.4 million) which
includes share based payment charges principally in respect of the historic
share scheme and the expenses charged to the income statement in respect of
the IPO of $2.1 million.
Profit after taxation was $7.6 million (2023: $8.5 million) a decrease of $0.9
million, the increase in operating profit being offset by higher finance costs
arising from the interest component of the lease on the new office and higher
taxation.
Earnings per share
Basic earnings per share was 3.92c compared to 4.39c in the same period last
year. Basic earnings per share is calculated as the profit after tax for the
period divided by the 193,415,715 ordinary shares in issue. Consistent with
the basis of preparation of the income statement it has been assumed that all
193 million shares were in issue throughout H1 2023 and H1 2024.
Adjusted earnings per share which adds back the impact of employee share
schemes after tax of $1.6 million and non-recurring transaction costs charged
to the income statement of $2.1 million was 5.84c. This represents an increase
of 27% from 4.60c in H1 2023.
Dividends
No dividends were paid or approved in either period with cash generated being
reinvested into operations.
Cashflow from operations
$million H1 2024 H1 2023 % Change
Adjusted EBITDA 20.9 13.5 + 55%
Increase in inventory (37.6) (14.0) n/a
Decrease/ (increase) in receivables 13.3 (7.7) n/a
(Decrease)/ increase in trade and other payables (13.2) 19.9 n/a
Tax paid and other (6.1) (0.2) n/a
Cash (outflow)/ inflow from operations (22.7) 11.5 n/a
Working capital movements
In terms of use of cash in the first half we invested further in inventory
which increased by $37.6 million to $145.7 million (December 2023: $108.1
million). Inventory of finished goods increased to $62.5 million (December
2023: $40.8 million; June 2023: $18.4 million) due to increased holdings of
finished boards as holdings of Raspberry Pi5 boards and compute modules
normalised but also because of slower sales during the second quarter. Stock
of memory held for future production was kept at similar levels to December
2023, to give greater certainty of future input costs, while stocks of
processor chips were increased due to favourable terms. The Group has
sufficient supply of DRAM well into the first half of 2025.
Payables reduced compared to December 2023 due to payments for memory
purchased in December 2023 partly offset by favourable payment terms on new
memory and processor chip purchases.
Investing activities - Capital expenditure
Cash capital expenditure for the six months to 30 June 2024 was $11.2 million
(2023: $9.7 million), including expenditure on intangible assets of $10.1
million. This included work on the recently launched RP2350 and further
semiconductor development for use in future boards.
In addition to the cash expenditure, intangible and fixed asset additions
include non cash additions of $2.9 million in respect of amortisation of IP
purchased previously which is being amortised over the period of the licence
and capitalised as part of an internally developed intangible asset, in the
creation of which the licence is being used.
Proceeds from financing
Initial public offering and primary raise
On 11 June 2024, Raspberry Pi Holdings plc was admitted to the premium segment
of the London Stock Exchange with unconditional trading starting on 14 June.
The Company was incorporated on 12 March 2024 and on 23 May 2024 in exchange
for shares it acquired all the share capital of Raspberry Pi Ltd at a
valuation of $288.1 million. On the same day a share capital reduction was
undertaken reducing share capital and share premium reserves and crediting
distributable retained earnings by $287.3 million.
At listing, 11.2 million new shares were issued raising $40 million before
fees. At the same time, Raspberry Pi Foundation sold 45,935,065 shares and
employees sold 2,125,115 shares to new investors together with further
investment by Arm and funds managed by Lansdowne Partners.
Through its sale of shares Raspberry Pi Foundation raised $180m to support its
worldwide mission to enable young people to realise their full potential
through the power of computing and digital technologies. The Foundation
continues to own 46.7% of the Group's shares.
Share issuance by Raspberry Pi Ltd
In February 2024, 171 new shares in Raspberry Pi Ltd were sold to
non-executive directors, Total consideration paid for these shares amounted to
$0.8 million. As part of the IPO these shares were subsequently converted into
249,104 ordinary shares of Raspberry Pi Holdings Plc.
Cash and facilities
Cash at 30 June 2024 was $40.4m (31 December 2023: $42.2m). On 24 April 2024,
the Group updated its existing Revolving Credit Facility and overdraft with a
new, $40 million Revolving Credit Facility and overdraft and extended the
facility by one year to 24 April 2027.
Related party transactions
The Group's related parties include its subsidiary undertakings, key
management personnel (comprising the Executive and Non-executive Directors),
their closely related family members, and shareholders with significant
influence. Transactions and balances between the parent and its subsidiaries,
as well as between subsidiaries, have been eliminated upon consolidation and
are not disclosed.
The transactions and any material balances outstanding with related parties
have been disclosed in note 18 of the Interim financial statements.
Principal risks and uncertainties
The principal risks and uncertainties, during the remaining six months of the
financial year have been reassessed and are considered consistent with those
identified in the 2023 Annual report and Prospectus available on the corporate
website.
Risk Description Risk impact Mitigation
The business relies on attracting and retaining skilled individuals. Losing key talent could affect operations, the development of new products and The Group maintains competitive compensation to reduce turnover and attract
growth. top talent.
Market Competition New competitors or the actions of existing competitors could impact the The Group counters this by focusing on innovation and cost efficiency.
business resulting in reduced sales and lower margins
Component Shortages Production may face disruption due to component shortages and increased costs. The Group seeks multiple suppliers and long-term agreements with key suppliers
to ensure steady supply and manage supplier requests for higher prices.
Component Cost Fluctuations Fluctuating component costs, particularly for memory chips, may affect The Group mitigates this risk by purchasing components particularly memory in
profitability. advance.
Demand Fluctuations and excess inventory in sales channels A drop in demand could lead to excess inventory and purchasing misalignment. The Group works with its contract manufacturer to adjust production and with
its resellers, OEM customers and distributors to understand and stimulate
demand.
Demand Estimation Inaccurate demand forecasting could harm the Group's business, finances, and We engage regularly with our channel partners and customers understand their
growth prospects because of insufficient inventory for actual demand or an expectations and undertake regular forecasting exercises.
excess of inventory including that delivered under long term supply agreements
Manufacturing Site Closure The loss or interruption to a key manufacturing site, such as Sony's South We work with Sony on business continuity plans and in addition to some
Wales facility, would cause a loss of supply of products with the consequent insurance coverage we also hold inventory to smooth supply fluctuations.
. loss of sales and damage to our Brand reputation Should the South Wales facility close completely there are alternative
manufacturing locations, including other Sony facilities and other contract
manufacturers.
The Group depends on sole suppliers for some critical components, such as The close relationship with a single supplier is important for product We have sought long term supply agreements with key suppliers and sought to
Broadcom's 'system on a chip,'. development, but problems at the supplier or in the relationship may limit the develop internal skills and other components in our products that can provide
supply of a core component and limit production and hence sales greater flexibility should there be a problem of supply for a key component.
Macroeconomic Conditions A global economic downturn could significantly affect the Group's operations The Group undertakes regular forecasting and strategic planning to assess the
impact of demand fluctuations and to consider responses.
.
Principal risks and uncertainties (continued)
Risk Description Risk impact Mitigation
Innovation and Technological Trends Failing to innovate or adapt to new trends may lead to lost market share and Through engagement with customers, in particular in the enthusiast sector, and
reduced profits. through regular discussions with key technology suppliers and industry experts
we seek to identify industry trends and develop responses. The Group's strong
engineering experience provides the Group with the means to adapt to changes
in a timely way.
The Group might face challenges in effectively managing its growth. We may incur additional costs in managing our growth or may not be able to The Board regularly reviews the strengths of the organisation. Resource needs
exploit all our opportunities for growth are a frequent element of business planning exercises.
Inadequate protection of intellectual property This may allow unauthorised use of the Group's platform and technologies, The extent and effectiveness of both legal and technical protections are
harming financial results. regularly reviewed by the Group General Counsel and CEO.
A product design may be flawed when launched or a problem discovered at a late There may be recall and rectification costs and damage to our reputation and Our engineering team has extensive experience in the design of our products
stage in the development process brand. Further development costs may be incurred. and uses established procedures to test and verify designs throughout the
development process.
Our distribution channel may not have the capacity to support our growth Our growth may be restricted should our existing channel partners not have the Through regular engagement with our reseller and distribution partners we
organisational or financial resources to support potential markets, customers assess their capacity and support needed. We look for new partners in
or applications. underdeveloped or new markets and geographies and engage with large OEM
customers to ensure that their needs can be met.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
$ million Notes Six months to 30 June 2024 Six months to 30 June 2023
(Unaudited) (Unaudited)
Revenue 3 144.0 89.3
Cost of sales (109.8) (66.1)
Gross Profit 34.2 23.2
Administrative expenses * (14.3) (8.2)
Research and development expenses (8.5) (4.6)
Operating Profit 11.4 10.4
Finance income 0.3 0.5
Finance cost (0.9) (0.2)
Profit before taxation 10.8 10.7
Taxation charge 7 (3.2) (2.2)
Profit for the half year 7.6 8.5
Adjusted EBITDA** 8 20.9 13.5
Earnings per Share (Cents)
Basic 9 3.92 4.39
Diluted 9 3.90 4.39
The profit for the half year is attributable to the shareholders of Raspberry
Pi Holdings plc and is derived from continuing operations. There are no
recognised gains or losses other than those passing through the Condensed
Consolidated Statement of Comprehensive Income.
*Administrative expenses for 2024 include $2.1m of non-recurring IPO related
costs. Refer to note 2.4.3.
**Adjusted EBITDA is a non-IFRS measure comprising operating profit adding
back amortisation and depreciation, share-based payments charges and
non-recurring items. Refer to note 8 "Adjusted EBITDA".
The accompanying notes are an integral part of the Condensed Consolidated
Interim Financial Statements.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
$ million Notes 30 June 2024 30 June 2023 31 December 2023
(Unaudited) (Unaudited) (Audited)
ASSETS
Intangible assets 10 65.8 42.5 58.6
Tangible assets 4.7 4.0 5.1
Right of use assets 5.9 1.3 6.7
Other non-current assets 2.3 3.1 2.7
Total Non-Current Assets 78.7 50.9 73.1
Inventories 11 145.7 61.9 108.1
Trade and other receivables 12 26.5 33.8 39.7
Cash and cash equivalents 40.4 36.9 42.2
Current tax assets 5.5 - 2.2
Total Current Assets 218.1 132.6 192.2
Total Assets 296.8 183.5 265.3
LIABILITIES
Trade and other payables 13 (71.4) (46.3) (81.6)
Lease liabilities (1.3) (0.2) (1.3)
Current tax liabilities - (2.1) -
Total Current Liabilities (72.7) (48.6) (82.9)
Lease liabilities (5.1) (1.4) (5.8)
Deferred tax liabilities (11.6) (8.5) (10.2)
Other non-current liabilities (5.8) (3.7) (7.2)
Total Non-Current Liabilities (22.5) (13.6) (23.2)
Total Liabilities (95.2) (62.2) (106.1)
NET ASSETS 201.6 121.3 159.2
SHAREHOLDERS' EQUITY
Share capital 16 0.8 - -
Share premium 16 31.8 50.1 65.4
Merger reserve 16 (221.9) - -
Share-based payments 17 0.2 1.8 1.3
Retained earnings 16 390.7 69.4 92.5
TOTAL SHAREHOLDERS' EQUITY 201.6 121.3 159.2
The accompanying notes are an integral part of the Condensed Consolidated
Interim Financial Statements.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Unaudited except 1 January and 31 December 2023 balances which are audited.
$ million Share Capital Share Share-based payments Merger reserve Retained earnings Total
premium
At 1 January 2023 A - 45.0 1.3 - 60.9 107.2
Profit for the period - - - - 8.5 8.5
Shares issued - 5.1 - - - 5.1
Share based payments - - 0.5 - - 0.5
At 30 June 2023 - 50.1 1.8 - 69.4 121.3
Profit for the period - - - - 23.1 23.1
Shares issued - 15.3 - - - 15.3
Share based payments - - (0.5) - - (0.5)
At 31 December 2023 A - 65.4 1.3 - 92.5 159.2
Profit for the period - - - - 7.6 7.6
Share based payments - - 2.2 - - 2.2
Share issued - 0.8 - - - 0.8
Share reorganisation B 288.1 (66.2) - (221.9) - -
Share capital reduction B (287.3) - - - 287.3 -
Share listing proceeds C - 40.0 - - - 40.0
Share issuance costs C - (8.2) - - - (8.2)
Share scheme settlement C - - (3.3) - 3.3 -
At 30 June 2024 0.8 31.8 0.2 (221.9) 390.7 201.6
A Comparative period 2023
The comparative figures presented from 1 January 2023 align with Raspberry Pi
Ltd's 2023 annual accounts on the basis that Raspberry Pi Holdings plc was not
established as the parent entity of Raspberry Pi Ltd until 23 May 2024. The
consolidated accounts are presented as a continuation of Raspberry Pi Ltd's
business from 1 January 2023, as the underlying operations and ownership
remained unchanged. The reorganisation only affected the share capital
structure, not the underlying business.
B Share Capital Reorganisation and Reduction
On 23 May 2024, Raspberry Pi Holdings plc acquired Raspberry Pi Ltd for $288.1
million in a share-for-share exchange. Also, on 23 May 2024 a special
shareholder resolution was passed to immediately reduce the share capital and
premium to their nominal values, supported by a directors' solvency
statement. This reduced share capital and share premium reserves with a
corresponding increase of $287.3 million in distributable retained earnings.
As consideration shares were issued to the existing share owners, the previous
share capital and $66.2 million of share premium were cancelled and the
difference on consolidation was recorded in a merger reserve. The share
capital and share premium amounts shown following the share
reorganisation (and the same day capital reduction) reflect those of
Raspberry Pi Holdings plc.
C London Stock Exchange Listing
On 11 June 2024, Raspberry Pi Holdings plc listed on the London Stock
Exchange, issuing 11.2 million new shares at £2.80 per share, generating
$40.0 million gross proceeds and $31.8m net of costs of $8.2m deducted from
equity.
The accompanying notes are an integral part of the Condensed Consolidated
Interim Financial Statements.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
$ million Notes Six months to 30 June 2024 Six months to 30 June 2023
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Cash (used in)/ generated from operations 14 (18.7) 11.5
Income taxes paid (3.4) -
Interest paid (0.6) -
Net cash flows (used in) / generated from operating activities (22.7) 11.5
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of intangible assets (10.1) (8.4)
Purchase of property, plant and equipment (1.1) (1.3)
Investment in non-current assets - (3.1)
Interest received 0.3 0.5
Net cash used in investing activities (10.9) (12.3)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash proceeds from share issues 0.8 5.1
Cash proceeds from IPO share issues 40.0 -
Share issuance costs of IPO shares (8.2) -
Payment of lease liabilities (0.6) (0.2)
Net cash generated from financing activities 32.0 4.9
Net (decrease)/ increase in cash and cash equivalents (1.6) 4.1
Cash and cash equivalents at beginning of period 42.2 32.8
Effect of exchange rates on cash and cash equivalents (0.2) -
Cash and cash equivalents 40.4 36.9
The accompanying notes are an integral part of the Condensed Consolidated
Interim Financial Statements.
1. GENERAL INFORMATION
Raspberry Pi Holdings plc (the "Company") is a public limited company
incorporated in England and Wales. The Company's registered office is at 194
Cambridge Science Park, Milton Road, Cambridge, England, CB4 0AB, and the
company number is 15557387.
· On 12 March 2024: Raspberry Pi ListCo Ltd was incorporated as a
private company limited by shares.
· On 23 May 2024: Raspberry Pi ListCo Ltd acquired Raspberry Pi Ltd for
$288.1m in a share exchange.
· On 3 June 2024: The Company was re-registered as public and renamed
Raspberry Pi Holdings plc.
· On 11 June 2024: The ordinary share capital was listed on the London
Stock Exchange's Main Market.
2 BASIS OF PRESENTATION AND ACCOUNTING POLICIES
2.1 Basis of preparation
These condensed consolidated interim financial statements have been prepared
in accordance with UK adopted International Accounting Standard 34 'Interim
Financial Reporting' and the Disclosure Guidance and Transparency Rules (DTR)
of the UK's Financial Conduct Authority.
The consolidated financial statements of Raspberry Pi Holdings plc comprise
the results of Raspberry Pi Holdings plc, Raspberry Pi Ltd, Raspberry Pi North
America Inc, and the Raspberry Pi Employee Benefit Trust ("the Group").
These condensed consolidated interim financial statements are the first for
the newly formed Group. The prior period is presented as a continuation of the
former Raspberry Pi Ltd.'s UK-IFRS accounts, as though the reorganisation
had taken place at the start of the earliest period presented.
The standalone entity, Raspberry Pi Holdings plc, prepares its individual
financial statements in accordance with Financial Reporting Standard 102: The
Financial Reporting Standard applicable in the UK and Republic of Ireland.
Albeit no adjustments are needed to also follow the Group's IFRS accounting
policies, as they are the same when applied in practice, which is expected to
pertain for the foreseeable future.
These financial statements should be read in conjunction with the annual
financial statements of Raspberry Pi Ltd for the year ending 31 December 2023
which have been prepared in accordance with UK adopted International Financial
Reporting Standards (IFRS) and the Companies Act 2006 applicable to companies
reporting under IFRS. These are available at Companies House and the investor
section of the corporate website.
The financial information contained in these interim financial statements does
not constitute statutory accounts as defined in section 434 of the Companies
Act 2006. These interim financial statements do not include all the
information and disclosures required in the annual financial statements. The
financial information for the six months ended 30 June 2024 and 30 June 2023
is unaudited.
The Group's presentational currency is US Dollars, rounded to the nearest
million. Since all material subsidiaries use USD as their functional currency,
there is no cumulative translation reserve.
These condensed consolidated interim financial statements were approved by the
Board of Directors on 23 September 2024.
2 BASIS OF PRESENTATION AND ACCOUNTING POLICIES (CONTINUED)
2.2 Capital reorganisation
On 23 May 2024 Raspberry Pi Holdings plc acquired the entire shareholding of
Raspberry Pi Ltd for $288.1m by way of a share for share exchange agreement.
This does not constitute a business combination under IFRS 3 'Business
Combinations' as both entities were under common control and Raspberry Pi
Holdings plc as the listing vehicle did not constitute a business as defined
by IFRS 3.
Management has used the retrospective presentation method, otherwise known as
merger accounting. Under merger accounting principles, the assets and
liabilities of the subsidiaries are consolidated at book value in the Group
financial statements and the consolidated reserves of the Group have been
adjusted to reflect the statutory share capital of Raspberry Pi Holdings plc
with the difference presented in the merger reserve.
.
2.3 Going concern
The interim financial information has been prepared on a going concern basis.
This assessment is deemed appropriate given the proceeds from the recent
listing, access to the extended Revolving Credit Facility, and the Group's
strong relationships with major customers and key suppliers.
On 11 June 2024, Raspberry Pi Holdings plc was listed on the London Stock
Exchange, issuing 11.2 million new shares at £2.80 per share, raising $31.8m
net of transaction costs. Additionally, on 24 April 2024, the Revolving Credit
Facility was extended, increasing the available funds to $40 million (2023:
$25 million) and extending the term until 24 April 2027 (2023: 24 April 2026).
Moreover, based on the Group's cash flow forecasts and projections, the Board
is satisfied that the Group will be able to operate within the level of its
cash and committed facilities for the foreseeable future which is considered
to be 12 months from the date of this report. In making this assessment the
Group has considered available liquidity in relation to cash and committed
facilities.
A range of sensitivities has been applied to the forecasts to assess the
Group's compliance with its covenant and funding requirements over the
forecast period. These sensitivities included:
· a reasonable worst-case scenario reflecting a 20% reduction in unit sales
resulting from decreasing demand; and
· a general liquidity reduction impacting working capital.
In scenarios where the above sensitivities occur at the same time, the Group
has modelled the possible funding needs of the Group and available resources
for continued operation in 2024 and 2025. Under these scenarios the Group
expects to have sufficient funds to meet its cash flow requirements for the
forecast period and to give the Directors sufficient confidence that it is
appropriate to adopt the going concern basis in preparing the accounts. A
reverse stress test was also performed which modelled the decline in sales
that the Group would be able to absorb before the exhaustion of available
liquidity and breach of banking covenants, this was considered an implausible
scenario.
The Board therefore concluded that the Group will be able to operate within
the level of its committed facilities and cash resources for the foreseeable
future and the Directors consider it appropriate to adopt the going concern
basis of accounting in preparing the condensed consolidated interim financial
statements.
2 BASIS OF PRESENTATION AND ACCOUNTING POLICIES (CONTINUED)
2.4 Critical accounting judgements and estimates
In preparing these condensed consolidated interim financial statements, the
critical judgements made by management when applying the Group's accounting
policies and the critical areas where estimates were required were the same as
those that applied to the consolidated historical financial information for
the year ended 31 December 2023, apart from three new significant judgements
in relation to
· The determination of the functional currency of the parent entity
· The determination of the grant date share price and option life for IPO share
awards
· The classification of the transaction costs associated with the issue of
shares
2.4.1 Determination of the functional currency of the Parent Entity
The directors assessed the Company's functional currency and concluded that,
since Raspberry Pi Holdings plc was originally formed with the sole purpose of
operating as a holding company for its trading subsidiary, Raspberry Pi Ltd,
it is appropriate that the functional currency of the Company aligns with that
of its subsidiary.
2.4.2 Determination of the Grant Date Share Price and option life for IPO
Share Awards
On 11 June 2024, share awards for employees were approved and finalised prior
to the Company's admission to the London Stock Exchange. IFRS 2 prescribes
that the fair valuation of these awards should be calculated at the grant
date. Management determined the offer price of £2.80 ($3.56) as the
appropriate share price for valuation on the grant date. According to IFRS 2,
the grant date is defined as the date when both the Company and the
participants have a mutual understanding of the board-approved key terms of
the award, which was confirmed to employees prior to admission on the morning
of 11 June 2024.
Therefore, the fair value of the share-based payment awards has been measured
using the offer price on this date, in accordance with Paragraph 16 of IFRS 2,
which states that fair value should be measured at that time. Given the
subsequent increase in share price after the initial offer, using a later
grant date would have significantly altered the valuation of the awards. The
value of the awards and therefore the IFRS 2 charge depends on the grant date
share price. A 20% increase in the market price at grant date would increase
the fair value of the awards by a total of $5.1m, while a 30% rise would add
$7.7m. These amounts would then be charged to the income statement over the
three-year vesting period.
Furthermore IFRS 2 share-based payments requires management to estimate the
option life of the share-based payments which once the three-year service
period is met, can be exercised up to 10 years from the date of grant, having
benchmarked comparable assumptions and applied the employee attrition rate
evenly through the exercise period it is expected that the average life will
be 5 years if this assumption were to move by plus, or minus one year the
impact is approximately $1.7m over the three-year vesting period,
2.4.3 Classification of Transaction Costs associated with the Issue of
Shares
The Group incurred $10.3 million in costs related to the IPO. $8.2 million
includes broker fees, professional legal and corporate finance services, fees
of the reporting accountants, and other compliance and accounting costs
directly attributable to the issue of shares upon admission to the London
Stock Exchange.
As these costs were directly attributable to the equity transaction, including
$8.2 million that has been deducted from the gross proceeds of $40.0m such
that the net proceeds of $31.8m are recognised in share premium.
$2.1 million was presented as non-recurring transaction costs in
administrative expenses. Management determined that legal and finance fees
associated with upgrading policies and procedures for post-listing
requirements, the costs of internal corporate finance, legal support, and
advice on share schemes and wider incentives were not directly attributable to
the issue of shares and therefore these expenses are recognised in the income
statement as non-recurring items.
2 BASIS OF PRESENTATION AND ACCOUNTING POLICIES (CONTINUED)
2.5 Alternative performance measures (APMs)
Alternative performance measures, which are used in these financial
statements, are also used by the Board and management for planning and
reporting. These measures are also used in discussions with the investors.
APMs are not displayed with more prominence, emphasis or authority than IFRS
measures.
Adjusted EBITDA is a non-IFRS measure comprising operating profit adding back
amortisation and depreciation, share-based payments charges and non-recurring
items. Adjusted operating profit is a non-IFRS measure comprising operating
profit adding back share-based payments charges and non-recurring items.
Adjusted research and development expense is a non-IFRS measure comprising
research and development expense adding back amortisation and depreciation,
share-based payments charges and non-recurring items. Adjusted administrative
expense is a non-IFRS measure comprising administrative expenses adding back
amortisation and depreciation, share-based payments charges and non-recurring
items.
Non-recurring items are presented whenever significant expenses are incurred
or income is received because of events considered to be outside the normal
course of business, where the unusual nature and expected infrequency merits
separate presentation to assist comparisons with previous years.
2.6 Accounting policies and new and amended accounting standards
The condensed set of consolidated financial information has been prepared
using accounting policies consistent with those in Raspberry Pi Ltd's Annual
Report and Accounts 2023 except for the following standards, amendments and
interpretations which have been adopted from 1 January 2024.
Newly adopted accounting standards
From 1 January 2024, the following standards became effective for the Group's
consolidated financial statements:
· Amendments to IAS 1 - Non-current liabilities with covenants
· Amendments to IAS 1 - Classification of Liabilities as Current or Non-current
· Amendments to IFRS 16 - Leases on sale and leaseback
· Amendments to IAS 7 and IFRS 7 - Supplier finance
The adoption of the standards and interpretations listed above has not led to
any material impact on the financial position or performance of the Group. The
Group has not early adopted other standards, amendments to standards or
interpretations that have been issued but are not yet effective.
Standards not yet effective
The following standards were in issue but were not yet effective at the
balance sheet date. These standards have not yet been early adopted by the
Group,
· Amendments to IAS 21 - Lack of exchangeability (mandatorily effective 1
January 2025)
· IFRS 18 - Presentation and Disclosure in Financial Statements (mandatorily
effective 1 January 2027)
Management do not expect that the adoption of the standards listed above will
have a material impact on the financial statements of the Group.
REVENUE
The total revenue for the Group derives from its principal activity: the
development, marketing, manufacture and sale of cost-effective programmable
computing devices. All revenue is recognised at a point in time except for
publishing revenue recognised over the length of the magazine subscription.
The Group has further disaggregated revenue by category and customer location
as follows:
$ million - by Category Six months to 30 June 2024 Six months to
30 June 2023
Product sales 89.5 74.6
Components 43.6 11.1
Royalties 10.3 3.1
Publishing 0.6 0.5
Total 144.0 89.3
$ million - by Customer location Six months to 30 June 2024 Six months to
30 June 2023
UK 77.7 27.0
Europe 22.6 23.4
Americas 26.7 19.8
Asia Pacific 16.0 18.7
Rest of World 1.0 0.4
Total 144.0 89.3
There are no material contract liabilities outstanding at the reporting date.
The Group has concluded that it operates only one operating segment, as
defined by IFRS 8 Operating Segments, that being its principal activity. The
information used by the Group's Chief Operating Decision Makers (CODMs) to
make decisions about the allocation of resources and to assess performance is
presented on a consolidated Group basis. Accordingly, no segment analysis is
presented.
4. EMPLOYEE COSTS AND HEADCOUNT
$ million Six months to 30 June 2024 Six months to 30 June 2023
Wages and salaries 9.7 7.6
Social security costs 1.0 0.6
Pension costs 0.7 0.4
Share based payments (note 17) 2.2 0.5
Staff costs capitalised (3.6) (2.8)
Total 10.0 6.3
Average Headcount Six months to 30 June 2024 Six months to 30 June 2023
Engineering 61 46
Retail 4 3
Corporate & Administrative 15 11
Communications & Publishing 14 16
Sales and product management 21 19
Total 115 95
5. DEPRECIATION AND AMORTISATION
$ million Six months to Six months to
30 June 2024 30 June 2023
Depreciation of Tangible Assets 1.4 1.1
Depreciation of Right of Use Assets 0.9 0.1
Amortisation of Intangible Assets 5.8 2.1
Intangible amortisation capitalised (2.9) (0.7)
Total 5.2 2.6
6. AUDITORS REMUNERATION
Auditors' remuneration in the period comprised fees for the Interim half year
review procedures in accordance with ISRE 2410 of $0.1m (June 2023: nil).
Audit related non audit fees of $1.4m (June 2023: nil) relating to their
Reporting Accountant's role on the listing is recognised within share
premium.
7. TAXATION
The tax charge for the six months ended 30 June 2024 of $3.2m (30 June 2023:
$2.2m) has been calculated in accordance with IAS 34, Interim Financial
Reporting, by applying the estimated annual effective tax rate to the interim
profit before tax.
· Effective Tax Rate for this period is 29%, compared to 19% for Interim 2023
· Underlying Effective Tax Rate is 25%, up from 22% for Interim 2023
As all the Group's pre-tax profits are generated from UK trading activities
and therefore all subject to UK tax the underlying effective tax rate
corresponds to the UK corporation tax rates.
The increase in the underlying tax rate reflects the rise in the UK
corporation tax rate from 19% to 25%, effective from 1 April 2023.
The 29% effective tax rate for the current period exceeds the underlying rate
of 25% primarily due to $2.1 million in non-recurring IPO-related costs. These
costs have been classified as fully non-deductible for tax purposes, as they
are considered capital in nature, being directly related to the IPO.
By contrast, the 19% effective tax rate in the prior period was lower than the
underlying rate of 22% due to a qualifying charitable distribution received
from Raspberry Pi Foundation. As of 30 June 2023, this Group relief was
estimated at $3.8 million, with the actual relief totalling $9.6 million as of
31 December 2023, following investments from Sony and Arm.
8. ALTERNATIVE PERFORMANCE MEASURES
Adjusted EBITDA, Adjusted Operating Profit, Adjusted Research and Development
expenses and Adjusted Administrative expenses are non-IFRS measures used by
the Board and management to monitor the Group's performance.
$ million Six months to 30 June 2024 Six months to
30 June 2023
Operating Profit 11.4 10.4
Amortisation and depreciation 5.2 2.6
EBITDA 16.6 13.0
Share based payments 2.2 0.5
Non-recurring costs 2.1 -
Adjusted EBITDA 20.9 13.5
Amortisation and depreciation (5.2) (2.6)
Adjusted Operating Profit 15.7 10.9
$ million Six months to 30 June 2024 Six months to
30 June 2023
Research and Development expenses 8.5 4.6
Amortisation and depreciation (2.9) (1.4)
Share based payments (1.4) (0.3)
Adjusted research and development expenses 4.2 2.9
$ million Six months to 30 June 2024 Six months to
30 June 2023
Administrative expenses 14.3 8.2
Amortisation and depreciation (2.3) (1.2)
Share based payments (0.8) (0.2)
Non-recurring costs (2.1) -
Adjusted administrative expenses 9.1 6.8
9. EARNINGS PER SHARE (EPS)
Basic EPS: Profit for the period attributable to owners divided by the
weighted average number of ordinary shares in issue, including those held by
the Employee Benefit Trust, unless specifically allocated or cancelled.
Diluted EPS: Adjusts the weighted average number of shares to include all
potentially dilutive shares, such as share options. For 2023, there is no
dilution as all legacy LTIP awards are included in the listed shares.
Adjusted EPS: Is a non-IFRS Alternative performance measure which adjusts
Basic EPS and Diluted EPS for the non-recurring items and share based payments
applied in computing Adjusted EBITDA.
Earnings per share Six months to Six months to
30 June 2024 30 June 2023
Profit after tax ($ million) 7.6 8.5
Number of shares in issue during the period 193,415,715 193,415,715
Basic earnings per share 3.92 cents 4.39 cents
Unvested employee share options 11,815,339 n/a
Average share price (GBP) 4.02 -
Average exercise price (GBP) (2.74) -
Fair value of services to be received (GBP) per award (0.88) -
Dilutive impact per award (GBP) 0.40 -
Dilutive impact as a percentage of award (%) 10% n/a
Average number of shares required at average market price: 1,179,485 n/a
Weighted average dilutive number of shares during the period 194,595,200 193,415,715
Diluted earnings per share 3.90 cents 4.39 cents
Adjusted Earnings per share Six months to Six months to
30 June 2024 30 June 2023
Profit after tax ($ million) 7.6 8.5
Non- recurring costs (disallowable for tax). 2.1 -
Share based payments (net of tax) 1.6 0.4
Adjusted profit after tax ($ million) 11.3 8.9
Number of shares in issue during the period 193,415,715 193,415,715
Adjusted basic earnings per share 5.84 cents 4.60 cents
Weighted average dilutive number of shares period 194,595,200 193,415,715
Adjusted diluted earnings per share 5.80 cents 4.60 cents
10. INTANGIBLE ASSETS
$ million Internally Developed Under Development Intellectual Property Total
Net book value as at 31 December 2023 17.8 21.1 19.7 58.6
Additions - 13.0 - 13.0
Amortisation (2.2) - (3.6) (5.8)
Net book value as at 30 June 2024 15.6 34.1 16.1 65.8
Net book value as at 1 January 2023 5.2 20.1 10.2 35.5
Additions - 9.1 - 9.1
Amortisation (1.4) - (0.7) (2.1)
Net book value as at 30 June 2023 3.8 29.2 9.5 42.5
The intangible assets that have been developed and are now being amortised
relate to the successfully launched Raspberry Pi5 computer board, the RP2040
microcontroller and the RP1 I/O chip. The intangible assets under development
primarily relate to semi-conductor development projects including RP2350 and
new boards and accessories.
11. INVENTORIES
As at As at As at
$ million 30 June 2024 30 June 2023 31 December 2023
Raw materials and components 83.2 43.5 67.3
Finished goods for resale 62.5 18.4 40.8
Inventories 145.7 61.9 108.1
Inventory recognised in cost of sales as an expense for the six months ended
30 June was $105.4m (2023: $62.4m). The provision within inventories of $9.0m
(December: 2023 $8.9m) is for anticipated future obsolescence on specific
slow-moving units and has not needed significant revision this period.
12 TRADE AND OTHER RECEIVABLES
$ million As at As at As at
30 June 2024 30 June 2023 31 December 2023
Trade receivables 17.3 24.8 30.3
Expected credit loss allowance (0.1) - (0.1)
Other receivables 3.7 4.8 6.9
Prepayments 5.6 4.2 2.6
Trade and other receivables 26.5 33.8 39.7
The Group considers that the carrying amount of trade and other receivables
are a reasonable approximation of their fair value due to their short-term
nature.
13. TRADE AND OTHER PAYABLES
$ million As at As at As at
30 June 2024 30 June 2023 31 December 2023
Trade payables 51.1 35.1 62.4
Accruals and other payables 10.9 8.3 9.1
Repurchase liabilities 8.5 2.5 8.2
Other taxation and social security 0.9 0.4 1.9
Trade and other payables 71.4 46.3 81.6
The Group considers that the carrying amount of trade and other payables are a
reasonable approximation of their fair value owing to their short-term nature.
Repurchase liabilities relate to components sold by the Group to contract
manufacturers, with the purpose of producing finished products that the Group
has committed to purchase.
14. NET CASH FLOWS FROM OPERATIONS
$ million Six months to Six months to
30 June 2024 30 June 2023
Operating Profit 11.4 10.4
Adjustments for non-cash items:
Depreciation and amortisation 5.2 2.6
Share-based payment charges 2.2 0.5
Adjustments for movements in working capital:
Decrease/ (increase) in trade and other receivables 13.3 (7.9)
Increase in inventories (37.6) (14.0)
(Decrease) / Increase in trade and other payables (13.2) 19.9
Net cashflow from operations (18.7) 11.5
15. FINANCIAL COMMITMENTS
Raspberry Pi Ltd, to ensure the uninterrupted supply of essential components
to meet projected demand, has established long-term supply agreements and
placed substantial orders with key suppliers and distributors.
As of 30 June 2024, these agreements have committed to component purchases
over a pre-defined schedule to December 2027 are valued at $386 million ($466
million as of 31 December 2023). These components will be used for
manufacturing products by both the Group and its licensees.
As both the supplier (delivery) and the Group (payment once delivered) have
obligations outstanding, they are not recognised as liabilities on the balance
sheet. However, they are disclosed as significant contractual obligations to
provide clarity on the financial commitments.
16. SHARE CAPITAL AND OTHER RESERVES
The share capital represents the nominal value of share capital subscribed
for. Raspberry Pi Holdings plc has the following share capital upon admission
to the London Stock exchange and as at the reporting date.
Share capital Number of shares Nominal capital
$ million
Ordinary shares of £0.0025 each 193,415,715 0.6
Deferred Shares of £0.0025 each 61,610,435 0.2
Total 255,026,150 0.8
Share capital
193,415,715 Ordinary shares of £0.0025 each have been listed for trading on
the London Stock Exchange. 61,610,435 Deferred Shares of £0.0025 each were
created as part of the share capital reorganisation. The Deferred Shares have
no voting rights or rights to a dividend and can be repurchased at the
Company's option for £0.01 for each holder's entire holding. It is intended
to repurchase and cancel these shares after the 2025 AGM.
Share premium account
The Share premium account records the amount above the nominal value received
for shares issued, less transaction costs. The share premium account is in
most circumstances not immediately available for distribution.
Share-based payment reserve
This reserve represents the cumulative income statement charges for unvested
employee share awards. Once the awards vest this reserve is recycled to
retained earnings and the issue of equity is reflected in share capital, share
premium or retained earnings as appropriate.
Merger reserve
The merger reserve and retained earnings are presented gross on consolidation
such that the Group's retained earnings are a reasonable measure of the
underlying distributable reserves of the Company on a standalone entity basis
as this is considered useful information for investors.
Retained Earnings
This reserve represents the total of all current and prior retained earnings
available to facilitate future shareholder distributions.
17. SHARE BASED PAYMENTS
All share-based payments are related to employee share schemes and are
equity-settled for shares of Raspberry Pi Holdings plc. Equity awards are a
key component of the overall remuneration package, being essential for
retaining, motivating, and rewarding key employees.
On 11 June 2024, upon listing onto the London Stock Exchange all previous-
employee share schemes vested, and new awards were immediately granted. The
share-based payment charges are as follows:
$ million Six months to Six months to
30 June 2024 30 June 2023
Legacy 2020 LTIP scheme - IFRS 2 charge 0.8 0.5
Legacy 2020 LTIP scheme - accelerated charge on settlement 1.2 -
Market value and nil-cost options - granted on 11 June 2024 0.2 -
Total share-based payment charges for the half year 2.2 0.5
Settlement of 2020 LTIP scheme upon listing on the London Stock Exchange
In 2020, the Board approved a Long-Term Incentive Plan (LTIP) and up to the
listing date had awarded 19,000 B ordinary shares to employees. These shares
were designed to participate in the proceeds from an exit, defined as the
company's sale or a stock exchange listing. On the sale of Raspberry Pi Ltd to
Raspberry Pi Holdings plc in May 2024, the B shares were exchanged for shares
with equivalent rights in Raspberry Pi Holdings plc.
Upon listing on the London Stock Exchange, all outstanding awards vested and
settled by the granting of ordinary shares in Raspberry Pi Holdings plc. When
the awards vested, the cumulative $3.3 million charged to the income statement
since 2020 was transferred to retained earnings.
New option awards granted upon on admission to the London Stock Exchange
On 11 June 2024 immediately before the IPO, alongside the settlement of legacy
share awards, new awards were granted in the form of market value options and
nil-cost options over shares of Raspberry Pi Holdings plc.
The market value options have an exercise price equal to the IPO share issue
price of £2.80. The nil-cost options have a nil exercise price. The Awards
vest on the third anniversary of the date of grant, subject to the employee
remaining in Group employment. The Awards are not subject to other
performance or holding conditions. The options expire on the tenth anniversary
of the date of grant or upon leaving.
Grant date fair value of new market value and nil cost option awards
The grant date fair value of the new awards was calculated with assistance
from external valuation expert using a Black-Scholes model with the following
inputs and assumptions:
Market value options Nil cost
Grant date 11 June 2024 11 June 2024
Number of awards granted 11,561,566 253,773
Grant date share price £2.80 £2.80
Exercise price £2.80 £0.00
Expected term 5 years 3 years
Expected volatility 35.0% 35.0%
Risk free rate 4.2% 4.4%
Dividend yield 0.0% 0.0%
17. SHARE BASED PAYMENTS (CONTINUED)
The volatility was estimated at 35%, based on the midpoint between five-year
equity volatilities and enterprise volatilities for the FTSE 250 (excluding
financials and investment trusts) and for comparable listed technology and
software companies as of 11 June 2024 grant date.
The market value options were valued at £1.06 per award and the nil cost
options valued at £2.80. After applying an estimated 5% employee attrition
assumption the combined fair value of all awards granted is $14.3m which will
be recognised in the income statement evenly over the three-year service
period resulting in a charge of $0.2m for the period from 11 June 2024 to 30
June 2024.
18. RELATED PARTY TRANSACTIONS
The Group's related parties include its subsidiary undertakings, key
management personnel (comprising the Executive and Non-executive Directors),
their closely related family members, and shareholders with significant
influence. Transactions and balances between the parent and its subsidiaries,
as well as between subsidiaries, have been eliminated upon consolidation and
are not disclosed.
Key management personnel are defined as the 2 Executive (H1 2024: 2) and 6
non-executive (H1 2023: 6) Board members listed in the Statement of Directors'
Responsibilities. Their aggregate remuneration (in USD thousand) was as
follows:
Key management compensation Six months to Six months to
$'000s 30 June 2024 30 June 2023
Wages and Salaries 1,579 940
Social security costs 131 95
Pension costs 30 23
Share based payments 68 17
Total 1,808 1,075
Additionally, one close family member of Key Management was employed by the
Group during the period, resigning on 30 June 2024. Their remuneration (in USD
thousand) was as follows:
Close family member compensation Six months to Six months to
$'000s 30 June 2024 30 June 2023
Wages and Salaries 100 76
Social security costs 16 8
Pension costs 10 6
Share based payments 85 21
Severance 44 -
Total 255 111
During the IPO process, Raspberry Pi Foundation reduced its shareholding to
47%, and therefore while the Group companies are no longer subsidiaries of
Raspberry Pi Foundation it is still considered a related party based on its
significant influence. During the period ended 30th June 2024, Raspberry Pi
Ltd paid for expenses on behalf of Raspberry Pi Foundation which were
subsequently recharged totalling $802,800. Goods were sold to Raspberry Pi
Foundation during the period ended 30 June 2024 totalling $33,000 inclusive of
VAT. At 30 June 2024, a balance of $221,000 was owed to Raspberry Pi Ltd. This
amount has been repaid in full since the period end.
In February 2024, Raspberry Pi Ltd issued 171 new shares to non-executive
Directors Martin Hellawell, Rachel Izzard, and Rockspring Nominees Ltd, in
which David Gammon, a Non-executive Director, has an interest. The total
consideration for these shares was $0.8 million. As part of the IPO these
shares were subsequently converted into 249,104 ordinary shares of Raspberry
Pi Holdings Plc.
19. EVENTS AFTER THE REPORTING PERIOD
There have been no material post balance sheet events that would require
disclosure or adjustment to these Interim financial statements.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors of Raspberry Pi Holdings plc are as follows:
Martin Hellawell Appointed on 2 June 2024
Dr. Eben Upton CBE Appointed on 12 March 2024
Richard Boult Appointed on 12 March 2024
Sherry Coutu CBE Appointed on 2 June 2024
David Gammon Appointed on 2 June 2024
Rachel Izzard Appointed on 2 June 2024
Christopher Mairs CBE Appointed on 2 June 2024
Daniel Labbad Appointed on 2 June 2024
The Directors confirm that the condensed consolidated interim financial
statements in the Interim Report have been prepared in accordance with UK
adopted International Accounting Standard 34, 'Interim Financial Reporting'
and that the Interim Report includes a fair review of the information required
by Disclosure and Transparency Rules 4.2.3R and 4.2.8R, namely:
• an indication of important events that have occurred during
the first six months and their impact on the condensed consolidated interim
financial statements.
• a description of the principal risks and uncertainties for
the remaining six months of the financial year; and
• material related party transactions in the first six months
and any material changes in the related party transactions described in the
last Annual Report.
On behalf of the Board
Dr Eben Upton CBE
Chief Executive Officer and Founder
23 September 2024
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