REG - Rosslyn Data Tech. - Interim Results
25/01/2024 07:00
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RNS Number : 8269A Rosslyn Data Technologies PLC 25 January 2024
25 January 2024
Rosslyn Data Technologies plc
("Rosslyn", the "Group" or the "Company")
Interim Results
Rosslyn (AIM: RDT), the provider of a leading cloud-based enterprise data
analytics platform, announces its interim results for the six months ended 31
October 2023.
Financial summary*
· Revenue was £1.4m (H1 2023: £1.4m)
· Gross margin was 35.5% (H1 2023: 29.3%)
· Administrative expenses maintained at £2.2m (H1 2023: £2.2m)
· Adj. EBITDA** loss was £1.7m (H1 2023: £1.6m
loss)
· Adj. net loss*** reduced to £1.5m (H1 2023: £1.6m loss)
· Cash burn rate was £276k per month (H1 2023: £217k per month)
· Cash and cash equivalents of £2.2m as at 31 October 2023 (30
April 2023: £676k), following the Company raising gross proceeds
of £3.3m through the issue of new ordinary shares and convertible loan
notes
* The H1 2023 comparatives are for continued operations only (see note 7)
**Adjustments made for exceptional items and share-based payments
*** Adjustments made for depreciation & amortisation, share-based payments
and exceptional items. H1 2023 result also includes adjustment for profit on
sale of discontinued operation
Operational summary
· Performance against operational key performance indicators
("KPIs"):
o Annual recurring revenue ("ARR") growth of 1% (H1 2023: 11%), with ARR of
£2.5m (H1 2023: £2.5m)
o Net revenue retention ("NRR") rate was 96% (H1 2023: 97%)
o Total pipeline as at 31 October 2023 was £3.9m (30 April 2023: £3.6m)
and weighted pipeline was £807k (30 April 2023: £1.1m)
o Customer acquisition cost ("CAC") payback was 80 months (H1 2023: 69
months)
· New contracts won with blue-chip European med-tech company and
international transport consultancy
· Significant progress on development of next generation artificial
intelligence ("AI") module
Outlook
Since completing the fundraising toward the ends of the first half, there has
been a strong increase in customer and partner engagement as the Group seeks
to build on the solid foundations now established. The Group is in discussions
regarding a number of opportunities with significant new partners, which offer
near-term conversion and revenue-generation potential. With the opportunities
with these significant partners coming to fruition, together with the
continued expansion the Group is experiencing with existing customers, the
Board continues to expect to report results for full year 2024 in line with
management expectations.
The increase in revenue is expected to be driven by professional services,
which is non-recurring revenue, as the Group onboards new customers, which
will translate to licence fee revenue thereafter. For full year 2024, the
Group anticipates reporting ARR growth of approximately 15%.
Looking further ahead, with the continued expansion in the Group's total
pipeline and the encouraging feedback that it is receiving from existing and
potential customers, the Board remains confident of delivering significant ARR
growth and looks forward to updating the market on Rosslyn's progress.
Paul Watts, CEO of Rosslyn, said: "Following a year of major transformation
and restructuring, and having undergone a fundraising during the period, we
have now established the foundations for us to accelerate growth. We are
currently in discussions with substantial partners regarding some significant
opportunities, which reflect the recognised strength of our offer and are
testament to our renewed go-to-market approach. We are also very excited by
the innovative work that we are doing with generative AI - which is being
undertaken alongside our customers to ensure our product is designed to meet
their exact requirements. As a result, we continue to look to the future with
confidence and look forward to updating the market on our progress."
Enquiries
Rosslyn
Paul Watts, Chief Executive Officer +44 (0)20 3285 8008
James Appleby, Chairman
Cavendish Capital Markets Limited (Nominated adviser and Broker)
Stephen Keys/Camilla Hume/George Lawson +44 (0)20 7220 0500
Gracechurch Group (Financial PR)
Claire Norbury/Anysia Virdi +44 (0)20 4582 3500
Investor Webinar
Paul Watts, CEO, and Ed Riddell, CFO, will be holding a webinar for investors
on Tuesday 20 February 2024 at 2.00pm GMT. To register to participate, and to
submit any questions in advance, please use the following link:
https://forms.gle/z3qZsJkUVzDf44469 (https://forms.gle/z3qZsJkUVzDf44469) .
Participants are requested to submit questions by 5.00pm GMT on 19 February
2024.
About Rosslyn
Rosslyn (AIM: RDT) provides an award-winning spend analytics and predictive
analytics platform. The Rosslyn Platform helps organizations with diverse
supply chains mitigate risk and make informed strategic decisions. It
leverages automated workflows, artificial intelligence and machine learning to
extract and consolidate procurement data providing visibility of complex
supplier data, enabling supplier spend savings and delivering rapid ROI. For
more information visit www.rosslyn.ai (http://www.rosslyn.ai/)
Operational Review
During the six months to 31 October 2023, the Company focused on embedding the
operational changes that had been implemented and initiated in the prior year
as it underwent a significant restructuring as well as seeking to rebuild its
business following a period of customer churn. This included making strong
progress in advancing its partner-led go-to-market approach. Alongside this,
management carefully managed costs while undertaking a fundraising process,
which was completed towards the end of the period, to provide the capital to
execute its strategy.
The Company secured two new contracts during the first half of the year
worth £422k in aggregate over a multi-year period and equating to an
additional £120k in ARR. The contracts are with a blue-chip European
med-tech company, which sells its products via its 9,000+ shops and outlets in
over 20 countries, and an international consultancy that provides services and
solutions to the transport industry and is utilising the Rosslyn platform on
behalf of a UK train operating company.
In addition, and as described below, during the period and subsequently, the
Company has made significant progress in the development of its next
generation generative AI module.
Innovation opportunity
Rosslyn continued the development work that it commenced in the prior year to
embed generative AI into the platform. Rosslyn is utilising AI to generate the
categorisations and classifications of extracted data, which must be done
before it can be analysed, thereby automating the process. This significantly
increases accuracy, shortens the time to insight and expands the volume of
data that can be incorporated. In particular, the shortening of time to
insight is crucial in meeting the increasing demand from procurement teams for
real-time insight.
During the period, the Company completed a proof of concept of this technology
with four of its largest customers from different industries and who procure
internationally, with the results exceeding management's expectations. The
Company commenced further development and refinement of the technology and
expects the module to go live with the first customer within the current
financial year. While this opportunity will likely endure longer sales cycles,
Rosslyn is well placed to establish a leadership position in this new market
thanks to the depth of its technology stack, which has been built on an
automation-first basis; its vast experience from operating in the industry for
over 15 years; and from being custodians of a large volume of complex supply
chain data.
Partner-led go-to-market approach
The Company continued to make progress in its renewed go-to-market approach
centred on a partner model. In particular, the Company secured an extension of
its strategic partnership with Chain IQ, a business process outsourcing
partner. The partnership has generated an increasing amount of revenue for
Rosslyn since being established in 2021. The Company also significantly
enhanced its relationship with a global consulting partner and expects to sign
its first customer via this partner in the near term.
Financial Review
Revenue
Revenue for the period was £1.4m (H1 2023: £1.4m) and ARR was £2.5m,
representing ARR growth of 1%. The NRR rate was 96% (H1 2023: 97%). These
results are in line with management's expectations, reflecting the Company
being in the early stages of rebuilding its business following a period of
significant restructuring.
Revenue comprises the annual licence fee - software revenue - that customers
are charged for having access to the Rosslyn platform and professional
services fees for work undertaken to tailor the Company's solution to align
with customers' infrastructure or meet specific additional solution
requirements. Software revenue continued to be the main contributor to total
revenue, accounting for 81% in H1 2024. However, this was lower than the in
the first half of the previous year of 84%, reflecting a slight increase in
professional services revenue to £0.3m (H1 2023: £0.2m) and software
revenue remaining flat at £1.1m (H1 2023: £1.1m). The growth in
professional services revenue reflects the Company increasing its pricing to
appropriate market levels for such services as well as greater activity in
this area.
Gross profit
Gross margin improved significantly to 35.5% (H1 2023: 29.3%), reflecting a
reduction in cost of sales as a result of increased efficiencies with a leaner
professional services team. As a result of the improved gross margin and
stable revenue, gross profit increased to £0.5m compared with £0.4m for
H1 2023.
Operating expenses
Operating costs were £2.5m for the period (H1 2023: £2.2m). This primarily
reflects the Company generating a £0.2m profit in the first half of the prior
year from the sale of a discontinued operation, and which offset
administrative expenses being maintained at £2.2m (H1 2023: £2.2m).
Profitability measures
As a result of the increased expenses, operating loss was £2.0m (H1 2023:
£1.8m loss) and adjusted EBITDA loss was £1.7m (H1 2023: £1.6m loss).
The loss before tax for the period was £2.0m (H1 2023: £1.8m loss). The
Company received £120k (H1 2023: £120k) in tax credits for the period. As
a result, net loss for H1 2024 was £1.9m (H1 2023: £1.7m loss). On an
adjusted basis, to exclude depreciation & amortisation, share-based
payments, exceptional administrative expenses of £0.2m (H1 2023: £0.2m) and
profit on the sale of a discontinued operation in the comparative period, net
loss was reduced to £1.5m (H1 2023: £1.6m).
Cash flow and liquidity
Net cash used in operating activities was £1.2m (H1 2023: £1.6m), with the
reduction primarily reflecting the receipt of £612k in R&D tax credits.
The Group generated net cash from investing activities and financing
activities of £2.6m, compared with using net cash of £49k in H1 2023. This
primarily reflects the raising of gross proceeds of £3.3m via the issue of
new ordinary shares (£2.7m) and convertible loan notes (£0.6m). As a result,
there was a net increase in cash and cash equivalents of £1.4m compared with
a net decrease of £1.7m for H1 2023.
Monthly cash burn in the period was £276k (H1 2023: £217k). This primarily
reflects investment the Group has made to grow the business, namely
strengthening the sales and technology teams. As a result of this investment,
CAC was also higher at 80 months (H1 2023: 69 months) with the onboarding of
the new sales team. Both cash burn and CAC are expected to reduce as the Group
converts some of its pipeline in the coming months.
As at 31 October 2023, the Company had cash and cash equivalents of £2.2m (30
April 2023: £767k; 31 October 2022: £763k).
Balance sheet
As at 31 October 2023, the Company had net assets and total equity of £2.4m
compared with £1.9m at 30 April 2023. The main movements in the balance sheet
during the period were:
· the increase in cash and cash equivalents, as described above;
· a reduction in corporation tax receivable to £0.4m (30 April
2023: £0.9m) following the receipt of a £612k R&D tax credit;
· current trade and other payables increasing to £2.2m (30 April
2023: £2.0m);
· non-current liabilities increasing to £0.7m (30 April 2023:
£0.1m) reflecting the convertible loan notes described above and non-current
trade and other payables of £nil in the period; resulting in
· an increase in total assets to £5.4m (30 April 2023: £4.1m) and
total liabilities to £3.0m (30 April 2023: £2.2m).
Outlook
Since completing the fundraising toward the ends of the first half, there has
been a strong increase in customer and partner engagement as the Group seeks
to build on the solid foundations now established. The Group is in discussions
regarding a number of opportunities with significant new partners, which offer
near-term conversion and revenue-generation potential. With the opportunities
with these significant partners coming to fruition, together with the
continued expansion it is experiencing with existing customers, the Board
continues to expect to report results for full year 2024 in line with
management expectations, including strong year-on-year revenue growth.
The increase in revenue is expected to be driven by professional services,
which is non-recurring revenue, as the Group onboards new customers, which
will translate to licence fee revenue thereafter. For full year 2024, the
Group anticipates reporting ARR growth of approximately 15%.
Looking further ahead, with the continued expansion in the Group's total
pipeline and the encouraging feedback that it is receiving from existing and
potential customers, the Board remains confident of delivering significant ARR
growth and looks forward to updating the market on Rosslyn's progress.
Consolidated statement of comprehensive income
For the six months ended 31 October 2023
Notes Six months Six months Year
ended ended ended
31 October 31 October 30 April
2023 2022 2023
Unaudited Unaudited Audited
£'000 £'000 £'000
Revenue 3 1,402 1,361 3,012
Cost of sales (904) (962) (1,968)
Gross profit 498 399 1,044
Administrative expenses (2,248) (2,169) (3,352)
Depreciation and amortisation (208) (158) (366)
Profit on sale of discontinued operations - 166 -
Share-based payment (67) (39) (89)
Operating loss (2,025) (1,801) (2,763)
Finance income 2 2 3
Finance costs (11) - -
Loss before income tax (2,034) (1,799) (2,760)
Income tax credit 120 120 664
Loss for the period (1,914) (1,679) (2,096)
Profit for the period from discontinued operations - 334 2,468
(Loss)/profit for the period (1,914) (1,345) 372
Other comprehensive income - translation differences 21 - 28
Total comprehensive (loss)/income (1,893) (1,345) 400
Profit/(loss) per share
Basic and diluted loss per share: ordinary shareholders - continued 4 (0.27) (0.50) (30.6)
Basic profit/(loss) per share: ordinary shareholders (pence) - Total (0.27) (0.40) 5.9
Diluted profit/(loss) per share: ordinary shareholders (pence) - Total (0.27) (0.40) 5.7
Consolidated balance sheet
As at 31 October 2023
31 October 2023 31 October 30 April
Unaudited 2022 2023
£'000 Unaudited Audited
£'000 £'000
ASSETS
Non-current assets
Intangible assets 1,436 1,155 1,372
Property, plant and equipment 19 4 -
Right-of-use assets 136 211 162
1,591 1,370 1,534
Current assets
Trade and other receivables 1,213 1,244 969
Corporation tax receivable 360 281 852
Cash and cash equivalents 2,197 763 767
3,770 2,288 2,588
Total assets 5,361 3,658 4,122
Disposal Group assets - 269 -
Total assets 5,361 3,927 4,122
LIABILITIES
Current liabilities
Trade and other payables (2,210) (2,874) (2,001)
Financial liabilities - borrowings (43) - (96)
(2,253) (2,874) (2,097)
Non-current liabilities
Trade and other payables (113) - (114)
Convertible loan (600) - -
(713) - (114)
Disposal Group liabilities - (938) -
Total liabilities (2,966) (3,812) (2,211)
Net assets 2,395 115 1,911
Equity
Called up share capital 4,415 1,699 1,699
Share premium 18,923 18,923 18,923
Share-based payment reserve 322 293 320
Accumulated loss (25,941) (25,830) (24,089)
Translation reserve (75) (103) (75)
Share premium fundraise costs (382) - -
Merger reserve 5,133 5,133 5,133
Total equity 2,395 115 1,911
Consolidated cash flow statement
For the six months ended 31 October 2023
Six months Six months Year
ended ended ended
31 October 31 October 30 April
2023 2022 2023
Unaudited Unaudited Audited
£'000 £'000 £'000
Cash flows from operating activities
Loss before income tax (2,034) (1,465) (292)
Adjustments for:
- depreciation, amortisation 208 158 366
- share-based payments 67 39 89
- profit on sale of assets - (166) -
- Disposal of leases - - (5)
- Finance income (2) (2) (3)
- Finance costs 11 - -
- Gain on disposal of operations - - (2,468)
(1,750) (1,436) (2,313)
Increase in receivables (244) (434) (149)
Increase/(decrease) in payables 211 247 (206)
Cash used in operations (1,783) (1,623) (2,668)
Finance income 2 2 3
Finance costs (11) - -
Corporation tax received/(paid) 612 - (27)
Net cash used in operating activities (1,180) (1,621) (2,692)
Cash flows (used in)/from investing activities
Purchase of property, plant and equipment (19) (6) (6)
Sale of assets - 100 -
Acquisition of software (245) (143) (535)
Cash received on disposal of operation - - 1,512
Net cash (used in)/from investing activities (264) (49) 971
Cash flows from/(used in) financing activities
Proceeds from share capital issued (net) 2,715 - -
Costs of share and loan issue (382) - -
New loans in period 600 - 160
Repayment of bank and other borrowings (53) - (64)
Repayment of capital element of obligation under leases (27) - (69)
Net cash generated from financing activities 2,853 - 27
Net increase/(decrease) in cash and cash equivalents 1,409 (1,670) (1,694)
Cash and cash equivalents at beginning of period 767 2,433 2,433
Foreign exchange (loss)/gains 21 - 28
Cash and cash equivalents at end of period 2,197 763 767
Notes to the unaudited interim statements
For the six months ended 31 October 2023
1. Basis of preparation
This interim report has been prepared in accordance with the accounting
policies disclosed in the full statutory accounts for the year ended 30 April
2023.
These policies are in accordance with UK-adopted international accounting
standards that are expected to be applicable for the year ending 30 April
2024.
The Group has chosen not to adopt IAS 34 "Interim Financial Statements" in
preparing the interim consolidated financial information.
The financial information in this statement relating to the six months ended
31 October 2023 and the six months ended 31 October 2022 has not been audited.
The financial information for the year ended 30 April 2023 does not constitute
the full statutory accounts for that period. The annual report and financial
statements for the year ended 30 April 2023 has been filed with the Registrar
of Companies.
The Independent Auditor's Report on the annual report and financial statements
for the year ended 30 April 2023 was unqualified, did not draw attention to
any matters by way of emphasis and did not contain a statement under Section
498(2) or 498(3) of the Companies Act 2006.
The interim report for the period ended 31 October 2023 was approved by the
Board of Directors on 25 January 2024.
2. Segmental reporting
Management has determined the operating segments based on the operating
reports reviewed by the Executive Director that are used to assess both
performance and strategic decisions. Management has identified that the
Executive Director is the Chief Operating Decision-Maker in accordance with
the requirements of IFRS 8 Operating segments.
The determination is that the Group operates as a single segment, as no
internal reporting is produced either by geography or division. The Group does
view performance on the basis of the type of revenue, and the end destination
of the client as shown below.
Analysis of Revenue by Product Six months Six months Year
ended ended ended
31 October 31 October 30 April
2023 2022 2023
Unaudited Unaudited Audited
£'000 £'000 £'000
Annual licence fees 1,139 1,137 2,406
Professional services 263 224 606
Total revenue 1,402 1,361 3,012
Analysis of Revenue by Country Six months Six months Year
ended ended ended
31 October 31 October 30 April
2023 2022 2023
Unaudited Unaudited Audited
£'000 £'000 £'000
United Kingdom 679 703 1,528
Europe 356 204 520
North America 367 454 964
Total revenue 1,402 1,361 3,012
Analysis of Future Obligations Six months Six months Year
ended ended ended
31 October 31 October 30 April
2023 2022 2023
Unaudited Unaudited Audited
£'000 £'000 £'000
Performance obligations to be satisfied in the next year 2,892 2,140 1,725
Performance obligations to be satisfied after 31 October 2024 2,984 2,506 125
Total future performance obligations 5,876 4,646 1,850
Analysis of Largest Customer Six months Six months Year
ended ended ended
31 October 31 October 30 April
2023 2022 2023
Unaudited Unaudited Audited
£'000 £'000 £'000
Annual licence fees 97 91 178
Professional services 43 86 167
Total revenue of largest customer 140 177 345
3. Operating EBITDA
Operating EBITDA is calculated from operating loss as shown below.
Six months Six months Year
ended ended ended
31 October 31 October 30 April
2023 2022 2023
Unaudited Unaudited Audited
£'000 £'000 £'000
Operating loss (2,025) (1,801) (2,763)
Depreciation and amortisation 208 158 366
Share-based payments 67 39 89
Profit on sale of discontinued operations - (166) -
Exceptional costs 244 170 260
Operating EBITDA (1,506) (1,600) (2,048)
4. Earnings per share
Basic earnings per share is calculated by dividing the net loss for the period
attributable to ordinary shareholders by the weighted average number of
ordinary shares outstanding during the period. Diluted earnings per share is
calculated by dividing net loss for the period attributable to ordinary
shareholders by the weighted average number of ordinary shares outstanding
during the period plus the weighted average number of ordinary shares that
would be issued on the conversion into ordinary shares of all potentially
dilutive instruments. In the periods ended 31 October 2023, 31 October 2022
and 30 April 2023 there were share options in issue which could potentially
have a dilutive impact, but as the Group was lossmaking, they were
anti-dilutive for each period and therefore the weighted average number of
ordinary shares for the purpose of the basic and dilutive loss per share were
the same.
Six months Six months Year
ended ended ended
31 October 31 October 30 April
2023 2022 2023
Unaudited Unaudited Audited
Profit/(loss) for the period attributable to the owners of the parent (£1,893,000) (£1,345,000) £400,000
Six months Six months Year
ended ended ended
31 October 31 October 30 April
2023 2022 2023
Unaudited Unaudited Audited
Weighted average number of ordinary shares 7,037,679 6,797,250 7,037,679
Pence Pence Pence
Basic and diluted loss per share: ordinary shareholders - continued (0.27) (0.50) (30.6)
Basic and diluted profit per share: ordinary shareholders - discontinued - 0.1 36.5
Basic profit/(loss) per share: ordinary shareholders (0.27) (0.40) 5.9
Diluted profit/(loss) per share: ordinary shareholders (0.27) (0.40) 5.7
5. Dividends
No interim dividend (H1 2023: nil) will be paid to shareholders.
6. Principal risks and uncertainties
The principal risks and uncertainties for this six-month period remain broadly
consistent with those set out in the Strategic Report section of the financial
statements of the Group for the year ended 30 April 2023.
7. Discontinued operations
The sale of the Langdon business was completed in the first half of the 2023
financial year, with the sale of the Integritie business completed in the
second half of 2023, and as such these are reported as discontinued operations
for the comparative periods.
Notes Six months Six months Year
ended ended ended
31 October 31 October 30 April
2023 2022 2023
Unaudited Unaudited Audited
£'000 £'000 £'000
Revenue - 1,510 1,510
Cost of sales - (538) (539)
Gross profit - 972 971
Administrative expenses - (638) (830)
Depreciation and amortisation - - -
Operating profit - 334 141
Profit on disposal of operations - 2,309
Finance income - - -
Finance costs - - (9)
Profit before tax - 334 2,441
Income tax credit - - 27
Total comprehensive income for discontinued operations - 334 2,468
31 October 2023 30 April
Unaudited 2023
£'000 Audited
£'000
ASSETS
Non-current assets
Intangible assets - 62
Property, plant and equipment - 17
Right-of-use assets - 60
- 139
Current assets
Trade and other receivables - 511
Disposals of Group assets - 650
LIABILITIES
Current liabilities
Trade and other payables - (195)
- (195)
Non-current liabilities
Trade and other payables - (1,352)
Disposal of Group liabilities - (1,547)
Net liabilities directly associated with disposal - (897)
8. Interim report
Copies of the interim report are available to the public on the Group's
website at https://www.rosslyn.ai/ (https://www.rosslyn.ai/) , and from the
registered offices of Rosslyn Data Technologies plc at 6(th) Floor, 60
Gracechurch Street, London, EC3V 0HR or by email to investors@rosslyn.ai
(mailto:investors@rosslyndatatech.com)
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