REG - Smartspace Software - Final Results
16/05/2023 07:00
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RNS Number : 4872Z Smartspace Software PLC 16 May 2023
16 May 2023
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 ("MAR"). Upon the publication of this announcement via a
Regulatory Information Service ("RIS"), this inside information is now
considered to be in the public domain.
SmartSpace Software Plc
("SmartSpace", the "Group" or the "Company")
Audited Final Results Announcement
for the year ended 31 January 2023
SmartSpace Software Plc, (AIM:SMRT) the leading provider of 'Integrated Space
Management Software' for smart buildings and commercial spaces is pleased to
announce its Audited Final Results for the year ended 31 January 2023.
Financial Highlights for the continuing Group:
· Revenue up 48% to £5.06m (FY22: £3.41m)
· Annual recurring revenue ("ARR") up 25% year on year to £5.59m*
(FY22: £4.23m or £4.49m on constant currency basis)
· Recurring revenues up 49% to £4.92m (FY22: £3.29m)
· Gross margin on continuing operations 89% (FY22: 89%)
· Group Adjusted EBITDA** loss of £0.77m (FY22: £2.38m) with
SwipedOn reporting its first full year profit
· Monthly average revenue per user ("ARPU") increased by 25% year
on year to £97* at 31 January 2023 (FY22: £73 or £77 on constant currency
basis)
· Loss per share from continuing operations 7.19p (FY22: 8.11p)
· Cash balance at the period end of £1.96m (FY22: £2.76m) and a
net cash position of £1.63m (FY22: £2.38m)
Anders + Kern (A+K)
· A+K now classed as a discontinued operation, as we determine
hardware distribution to be non-core, and we are actively engaged in finding
new owners for the business
· Revenue, gross margin, EBITDA and ARR figures adjusted in these
highlights to exclude A+K contribution in both the current and prior year.
· A+K recorded revenue of £2.09m (FY22: £1.73m), EBITDA loss of
£0.11m (FY22: £0.12m loss) and ARR of £0.13m
Operational Highlights
· Significant progress on development of next generation product
combining the features of SwipedOn and Space Connect into a single fully
integrated platform
· 807 new customers added contributing a £0.9m of new ARR
· Contribution from Evoko Naso grew throughout the year
· Customer locations grew by 17% to 8,377 (FY22: 7,145)
· Revenue churn down to 11.8% (FY22: 12.7%)
Post period end highlights
· Mortgage of £0.33m held on the Group's freehold building in
Mildenhall fully repaid in February 2023
· The Group had cash of £1.25m at 30 April 2023 with no debt
· Despite adding £0.19m of net new ARR in the quarter to 30 April
2023, a strengthened pound sterling held back ARR to £5.62m* (30 April 2022:
£4.77m or £4.69m on a constant currency basis). When measured on a constant
currency basis ARR is up 20% year-on-year and 3% since the beginning of the
financial year.
· Software deployed to 8,676 locations at 30 April 2023 (April
2022: 7,541 locations)
· Continuing international expansion with launch of fully localised
products into Taiwan, China and Germany
* For customers invoiced in currencies other than pounds sterling ARR and ARPU
is calculated by translating charges at the applicable 31 January 2023
exchange rate, with the exception of ARR at 30 April 2023, which is calculated
at the exchange rate on that date. Comparative period ARR is provided on a
constant currency basis by retranslating foreign currency amounts at the 31
January 2023 exchange rate. Relevant percentage comparisons are calculated
against the constant currency figures. All ARR and ARPU calculations are
prepared based on customers' latest charges, net of all discounts.
** EBITDA is the profit or loss for the period from continuing operations
before net finance costs, tax, depreciation, amortisation, reorganisation and
transactional items, impairment charges and share based payment charge
Commenting on outlook, Frank Beechinor, CEO of SmartSpace, said:
"We see a great opportunity to focus on being a pure software business. With
hardware no longer part of the continuing Group, the revenues we generate will
come at a high gross margin, in keeping with those of high growth SaaS
businesses.
Our new fully integrated single workplace platform is nearing completion and
will launch in the current financial year. There are also a number of other
new revenue generating features due to be released in the coming months, which
add to our confidence that we can maintain our growth trajectory. Whilst we
will continue to target new customers in our major English-speaking markets of
the US, UK, Canada, New Zealand and Australia, new non-English speaking
geographies will also provide growth opportunities in the coming year.
We have a confident and well-established team that is capable of delivering
the product and sales in our business plan. With the team's focus entirely on
growing an international SaaS software business, we will optimise the
opportunity for success. Barring the impacts of inflation, we expect our cost
base to be static which will allow ARR growth to feed through to the bottom
line, helping to ensure the business is at least cashflow neutral going
forwards.
Finding new owners for A+K will be an important step, and in which we are
making good progress. Proceeds from a disposal will provide additional
liquidity for the Group, allowing us to selectively invest in growth
opportunities that may emerge for our software solutions in new markets.
Thanks to the hard work from our colleagues and partners we are now well
positioned to utilise our momentum going forward to build recurring revenues."
A copy of these final results together with a results presentation with
further information on the Company will be posted on the Company's website at:
www.smartspaceplc.com (http://www.smartspaceplc.com) .
Investor Meet Company Presentation
Frank Beechinor, CEO and Kris Shaw, CFO will provide a live presentation on
the 'Investor Meet Company' ("IMC") platform at 12.00 midday on 17 May 2023.
Investors can sign up for free via:
https://www.investormeetcompany.com/smartspace-software-plc/register-investor
(https://www.investormeetcompany.com/smartspace-software-plc/register-investor)
Questions can be submitted pre-event through the platform or at any time
during the live presentation. Management may not be in a position to answer
every question it receives but will address those it can while remaining
within the confines of information already disclosed to the market.
Those who have already registered and requested to meet SmartSpace will be
automatically invited.
Enquiries:
SmartSpace Plc via Lisa Baderoon
Frank Beechinor (CEO)
Kris Shaw (CFO)
Lisa Baderoon (Head of Investor Relations) +44 (0) 7721 413 496
lbaderoon@smartspaceplc.com (mailto:lbaderoon@smartspaceplc.com)
Canaccord Genuity (NOMAD &
Broker)
+44 (0) 20 7523 8000
Adam James
Harry Rees
Chairman's Statement
Overview
I am pleased to report a year of strong financial results and progress in the
development of the Company's software platform. The Group was able to deliver
an Adjusted EBITDA performance ahead of management's expectations, coupled
with better than expected cash generation, whilst also investing in the
business to prepare it for future growth.
The world is going through unsettled times, with the continuing impacts of the
Covid-19 pandemic and conflict in Ukraine leading to high inflation and wider
economic uncertainty. Despite this backdrop, which we are not immune from, we
have delivered robust growth this year.
We remain focussed on becoming a pure software business and as such we are
making progress in finding a new owner for our hardware-based Anders + Kern
("A+K") division. Accordingly, the A+K business segment is now shown as a
discontinued activity with the associated assets and liabilities classed as
held for sale. A disposal of A+K will allow us to focus our resources on
achieving success within our core software division, whilst allowing A+K to
benefit from owners committed to hardware integration and distribution. The
Board remains committed to growing high margin software revenues, which in
turn will provide value appreciation for shareholders. Over the past year our
software development team has been focussed on creating a single technology
stack, offering the functionality of both SwipedOn and Space Connect in one
platform. Not only will this generate new revenue opportunities from both new
and existing customers, it will also allow cost efficiencies to be made across
the Group.
People
The Board is very mindful that the success of any company is down to its
employees. During the year we have seen our net promotor score ("NPS")
increase. This measure of customer satisfaction is down to the focus,
dedication, enthusiasm and loyalty of our staff for which I would like to
commend them. We continue to invest in our employees who are being supported
through professional training relevant to their functional areas, as well as
other relevant role-specific training. On behalf of the Board, I offer my
sincere thanks to the team.
Future developments and outlook
We remain committed to being a business that is at least cashflow neutral
going forward without reliance on new external funding, and the Board believes
that SmartSpace has sufficient liquidity to achieve this. We believe there
remains substantial long-term value to be created by continuing to invest in
the growth of our high margin recurring subscription revenue.
To execute our strategy, we are focused on simultaneously expanding in our
existing geographical markets, whilst additionally identifying non-English
speaking markets, where we see material potential for growth. We continue to
grow in our traditional markets and our entire offering is now available in
four non-English speaking markets.
We believe that a sustainable growth path does not need to be just organic;
selected acquisitions at the right time and price could enhance and accelerate
our growth along with assisting the long-term sustainability of the business.
Potential opportunities fitting these criteria are to be considered and the
ability to move quickly if opportunities materialise is essential.
Geopolitical and economic instability are all closely monitored and the
Group's strategy and operational execution demonstrates our resilience.
SmartSpace has solid foundations and is pursuing numerous growth
opportunities. We have a well-established global market reach and a growing
product, with a strong roadmap defining our direction of travel. We are
confident in growth for both the full year ahead and in the longer term.
Our ambition and confidence for the year ahead remains high following a good
start to the year. Our revenue and cash generation targets remain unchanged.
As we continue to grow our high margin recurring revenues, we add financial
strength to the business, and with such a large addressable market and
well-placed product set, we believe this can continue for the foreseeable
future.
Guy van Zwanenberg
Chairman
15 May 2023
Strategic report: Strategy and operational review
The Directors present their strategic report for the year ended 31 January
2023:
Business model, purpose and strategy
The Group's business model is to provide Software as a Service ("SaaS")
workspace solutions including desk, meeting room, and visitor management
products, enabling our international client base to optimise the use of their
corporate real estate assets. The Group's products are fast to deploy, easy to
implement and configure making them ideally suited to companies in the market
for simple but effective solutions for their space management.
The Board believes that technology driven changes in working practices
continues to generate demand from all industry sectors. The pandemic has
accelerated the move towards hybrid working further increasing the need for
technology to enable companies to control the use of meeting rooms and desks
more effectively as well as manage visitors to their premises. The Board has
set the following strategic priorities:
· to focus on delivering pure SaaS revenues where the
Group is not overly exposed to one market or a particular customer;
· to develop technology-led intellectual property to help
businesses optimise use of their corporate real estate assets, primarily
focussing on rooms, desks and visitors;
· to increase market penetration into non-English
speaking regions and develop new sales channels to market our software
solutions by establishing a global network of channel partners;
· to bring together the technologies of Space Connect and
SwipedOn in order to offer a complete solution to both customer bases, in a
single product offering, and maximise revenue per user;
· to continue with a strategy of both organic and
acquisitive growth both in our domestic market and overseas; and
· to end our involvement in hardware distribution and
integration through a sale of Anders + Kern.
We believe as working practices change and businesses reconfigure their office
real estate, the market will gravitate towards greater use of technology to
optimise how workspaces operate. As employees demand hybrid working
arrangements, and remote working becomes more prevalent, businesses will look
for real estate efficiencies which will need technological solutions. Many
businesses have indicated that they plan to reduce their real estate footprint
whilst maintaining headcount. This change will stimulate demand for SmartSpace
solutions which will allow employees to book desks, meeting rooms, car parking
spaces, electric vehicle charging points, lockers and other bookable resources
for times they are in the office, while coordinating meetings between
participants in the office and working remotely. The strategy is to focus on
developing our software to take advantage of the opportunities afforded by
this fast-growing market.
Review of the business
Our software business has continued to perform well in the past year, with
excellent growth in its headline revenue and annual recurring revenue ("ARR").
The number of customer locations where our software is used grew by 17% to
8,377. These strong growth metrics allow us to report our first full year of
profit for SwipedOn, and whilst still loss making, Space Connect results were
significantly improved, and the division was cash generative for the second
half of the year. Continuing this sustainable growth into the future remains
our primary objective.
With a strong net revenue retention of 105% (FY22: 130%), revenue continues to
grow, even without a contribution from new customers. Our robust Customer
Lifetime Value ("LTV") to Customer Acquisition Cost ("CAC") ratio of 5:1
(FY22: 5:1) demonstrates we are acquiring and retaining valuable customers on
a sustainable basis. It allows us to be confident on our customer acquisition
spend with tangible evidence of returns on investment. In addition to the
positive net revenue retention from existing customers, we added 827 new
customers contributing a further £0.9m of new ARR. Approximately 75% of our
revenue is paid annually in advance which provides working capital to fund
growth. We operate with minimal incremental costs for acquiring new customers,
giving us a high gross margin of 89%. Our resilience is strengthened by our
diverse customer base, with no single customer representing more than 2% of
overall revenue. These factors provide an excellent foundation for investment
and predictable growth.
Constant currency monthly average revenue per user ("ARPU") growth of 26% to
£97 came as we continued to roll out the price increase whilst also focussing
on account expansion. Encouragingly locations per user increased by 18% to
1.8.
Growth from the existing customer base has been aided by our strengthened
customer success team, who are also tasked with ensuring customers get the
best use out of the product and therefore continue to subscribe. As a result,
we have seen customer churn decrease to 11.8% (FY22: 12.7%) and improved
further with annualised churn for the final quarter of the year being 10.4%.
Like our competitors we focus the majority of our marketing spend on five main
English-speaking markets; US, UK, Canada, Australia and New Zealand. We have a
particularly strong presence in the United States, where 42% of our revenue is
generated, and we have a local sales team based out of Austin, Texas. We
continue to see strong returns in these markets but believe further strategic
value can also be created by gaining a presence in non-English speaking
regions. In 2022, we launched our first fully localised version of SwipedOn in
South Korea. To support the launch into Korea, a localised website and
marketing collateral were made available supported by an in-country marketing
agency with a digital marketing campaign, focusing on the dominant search
engine in South Korea. Pre-sales and ongoing customer support are handled in
local language. We have utilised the lessons learnt in Korea to recently
launch in a further three new markets ; Taiwan, China, and Germany.
Space Connect continues to focus on offering mid-market workplace solutions
through its partners located primarily in the UK, Australia and the Far East.
The UK is by far the largest market. As previously commented upon, the first
quarter for Space Connect began slowly as the expected momentum from
businesses in the UK returning to the office failed to materialise. By the
summer the momentum had returned but, unfortunately, some of this was offset
by a number of customers scaling back their use of Space Connect. These
customers had previously signed up for the product to administer specific
policies around workplace social distancing. We saw a significant uptick in
business from our relationship with Evoko following the ISE trade show in May
2022, with monthly billings in excess of previous periods for the remainder of
the year.
There was a significant improvement in the financial performance for Space
Connect. Revenues increased by 39%, adjusted EBITDA loss reduced by 52%, and
overheads reduced by 24%. As a result, the business was cashflow breakeven for
the second half of the financial year.
Software development
We use a data driven approach that aligns with our business objectives to
support revenue growth when designing our development roadmap. Our development
team, led by our Group CTO, consists of a core team of developers based in New
Zealand. We utilise offshore developers in Vietnam to provide a flexible
development resource that can be quickly stood-up for specific projects at a
competitive price.
This centralised approach to development has allowed us to converge the
features of SwipedOn and Space Connect and offer opportunities for our staff
to develop their skills, whilst also allowing the Group to benefit from a
consistent approach to software development. New Zealand has had a strong
focus on developing its software industry and as a result, has a great talent
pool to draw upon. Employment costs are competitive with other similarly
developed jurisdictions.
During the year we invested £1.67m (2022: £1.56m) in maintaining and further
enhancing our software solutions. Our main development initiative over the
year has been creation of our next generation technology which combines the
features of SwipedOn and Space Connect into a single fully integrated
platform. The new platform refreshes the technology used in our products to
the latest standards, provides new features to our customers and will reduce
duplication of costs with the business.
New product capabilities such as in-country hosting, multi-language and
multi-currency have also been released during the year and the SwipedOn
visitor management app is now available on Android operating systems, opening
up the new geographies we are targeting, where Android is the more popular
operating system.
Anders + Kern
Anders + Kern ("A+K"), our distributor and integrator of AV, has made strong
progress on its road back to recovery following the impacts of Covid-19, but
still remains smaller than before the pandemic. As a hardware business, A+K
does not fit within our strategic objectives of generating high margin
recurring software revenues. Therefore, we have taken the decision to find a
new owner for the business and as such have classified the business as a
discontinued operation. Finding a new owner, who is committed to hardware
distribution and integration, will be in the best interests of all A+K
stakeholders, from employees, suppliers and customers.
Outlook
We have planned for a year of further strong growth in FY24, whilst ensuring
our costs are tightly controlled. On a constant currency basis ARR has grown
by a further 3% in the first quarter of FY24.
SmartSpace is well-positioned to respond to the digital transformation of
workspaces, with a proven record of delivering products that deliver tangible
benefits for our customers and therefore generating strong growth in recurring
revenue. Our model, strategy, and market position, coupled with the talent and
dedication of our employees, give us confidence in achieving further progress
this year.
For this coming financial year we will transition to a pure software business
focusing on three pillars of value; strong financial metrics, strong SaaS
metrics and then in building strategic value by having a broader geographic
footprint with a single technology platform. You will have seen from our
financial and SaaS metrics that we are on track in all three areas.
Except for the impacts of inflation, we expect our cost base to be static in
the coming year, which will help our ability to ensure our priority to be at
least cashflow neutral in the year to January 2024. Our geographic growth
will focus on the Far East and Europe, but we may also venture into some other
markets, driven by customer demand.
There is a huge opportunity ahead of us. We are excited about our future
prospects and our continued commitment in delivering shareholder value. Thanks
to the hard work from our colleagues and partners, we are now well positioned
to utilise our momentum going forward in continuing to build recurring
revenues.
Frank Beechinor
Chief Executive Officer
15 May 2023
Strategic report: Financial review
Overview
The Group has continued to focus on growing recurring software subscription
revenues, allowing a transition to being a cash generative, and ultimately
profitable business. Progress was made during the year with strong growth in
recurring revenue and a significant reduction in cash consumed in operations.
During the year the Board decided to commence a process to find a new owner
for Anders + Kern ("A+K"). Whilst this is ongoing the Board is confident that
the process will complete by 31 January 2024. As a result the business segment
has been classified as a disposal group, with the financial performance for
both the current and comparative periods included in discontinued activities
in the income statement. Assets and directly associated liabilities of the
disposal group are classified as held for sale on the balance sheet for the
current period only.
Revenue
Overall revenue for the Group increased by 48% to £5.06m, of which 97% are
high margin recurring software subscriptions.
2023 2022
£'000 £'000
Recurring software revenue
- SwipedOn 4,380 2,916
- Space Connect 537 373
Total recurring revenue 4,917 3,289
Non-recurring revenue
- SwipedOn 40 37
- Space Connect 99 85
Total non-recurring revenue 139 122
Total revenue 5,056 3,411
SwipedOn
Increased average revenue per user ("ARPU") both in the current period (31%)
and prior period (58%) contributed towards a 50% growth in reported revenue
for SwipedOn. The increase in ARPU was driven by a combination of growth in
customer spending through more locations per customer, subscription plan
upgrades, and a price review which commenced in February 2021. The revenue
impact of the price review takes time to reach reported revenue, as customers
only pay the increased prices at their next renewal. In some cases this
renewal was not until July 2022. Customer churn, which had been elevated the
prior financial year, reduced, as the number of transient Covid-19 users
churning eased. Annual user churn for the year was 14.2% (2022: 15.4%) and
revenue churn 11.5% (2022: 12.7%). Net Revenue Retention ("NRR") for the year
was 107% signifying continued revenue growth from our customer base (2022:
130%).
Space Connect
Space Connect revenue grew by 39% as revenue from the partnership with Evoko
generated an increased contribution, and the full year impact of customers who
signed up in the second half of the prior year was realised. The positive
impact from new customers who joined during the year was offset by customer
churn and contraction, as some customers who signed up to manage their
Covid-19 risk left or contracted their subscription at their annual renewal.
This churn reduced during the second half of the year allowing growth to
re-commence and overall customer numbers increase from 69 at the beginning of
the year to 79 at the end. Revenue from our partnership with Evoko increased
in the second half of the year, contributing to both recurring revenue for the
SaaS element and non-recurring revenue for licence fees.
Gross profit
Gross profit margins remain strong at 89% (2022: 89%) giving a total gross
profit of £4.50m (2022: £3.04m).
Administrative expenses
Administrative expenses have decreased by 1% to £6.37m (2022: £6.45m) as
detailed in the table below.
2023 2022
£'000 £'000
Research and development costs 1,665 1,563
Other staff and contractor costs 2,153 2,285
Marketing 1,010 950
Other administrative expenses 1,130 99
Ongoing cash administrative expenses 5,958 5,795
Share based payment charge 282 259
Depreciation and amortisation 734 623
Reorganisation and transformation costs 81 109
7,055 6,786
Less capitalised development costs (686) (340)
Income statement administrative expenses 6,369 6,446
Ongoing cash administrative expenses (which are before deducting development
costs to be capitalised) increased by 3%. Whilst in many areas inflationary
impacts dictated expenditure increases of between 5% and 15% this was offset
by lower staff costs. The Group had a number of open positions at the
beginning of the financial year that were only filled in the second half of
the year due to a shortage of qualified applicants at the time. These staff
vacancies led to a temporary financial benefit through lower staff costs than
planned.
Administrative expenses (prior to share based payments, amortisation,
depreciation and capitalised development) for Space Connect were reduced to
£1.22m (2022: £1.61m) in order to set the cost base of the business to be
more in line with revenue. Administrative expenses for SwipedOn (prior to
share based payments, amortisation, depreciation and capitalised development)
increased to £3.61m (2022: £3.06m). The decreased expenditure in Space
Connect and increased expenditure in SwipedOn was primarily due to staff
costs, a portion of which related development team members who were
re-allocated from Space Connect to SwipedOn to work on the integrated
platform. Good progress was made on the development of key product features as
well as our new integrated platform, resulting in increased development costs
that were appropriate for capitalisation.
Adjusted EBITDA
Adjusted EBITDA is the earnings for the year before net finance costs, tax,
depreciation, amortisation, reorganisation and transactional items, impairment
charges and share based payment charge. Adjusted EBITDA was £0.77m (FY22:
£2.38m). SwipedOn reported its first EBITDA profit for the year of £0.88m
(FY22: loss £0.16m) and continued to be cash generative. Space Connect's
revenue continued to grow and administrative expenses were reduced, resulting
in EBITDA losses reducing by half to £0.52m (FY22 £1.08m) and cashflow
breakeven for the second half of the financial year.
Taxation
The taxation charge from continuing operations of £0.21m results from the
release of deferred tax assets against the taxable profit generated by
SwipedOn. Losses incurred by Space Connect and our Group parent SmartSpace
Software PLC were not recognised as deferred tax assets as the time horizon
for utilisation of these losses is uncertain.
Discontinued operations and assets held for sale
A+K continued to grow revenues as a number of deals which had been held up due
to Covid-19 proceeded in the first half of the year. Overall revenue increased
by 21% to £2.09m (2022: £1.73m) with a 30% gross margin (2022: 35%) and ARR
of £0.13m. The division reported a trading loss before tax of £0.17m (2022:
£0.29m). Assets (£1.73m) and liabilities (£0.50m) relating to A+K have been
separately disclosed on the balance sheet with a net value of £1.23m. These
assets and liabilities are measured at fair value less costs to sell, after
recording an impairment charge of £0.56m against goodwill. On the basis that
the £0.33m mortgage held on the freehold building was repaid shortly after
the year end, using group cash resources, it has not been included in
liabilities held for sale.
Foreign Exchange
The Group sells its products throughout the world therefore revenues are
received in a number of currencies, with US dollars (40%), pounds sterling
(20%), Australian dollars (19%) and New Zealand dollars (10%) being the most
common. Our administration costs are denominated in New Zealand dollars (48%),
pounds sterling (36%) and US dollars (16%). The most significant currency
exposures are therefore against US dollars where an excess of revenue over
cost occurs, and New Zealand dollar where an excess of cost over revenue is
incurred. The Group does not hedge this foreign currency exposure.
Assets and liabilities denominated in foreign currencies are mostly limited to
our operations in New Zealand where working capital, deferred revenue,
property plant and equipment, right of use assets and liabilities, deferred
tax assets, and intangible assets are held in New Zealand dollars. Net assets
denominated in foreign currencies amount to £4.81m. The Group does not hedge
this foreign currency exposure.
Foreign exchange movements in the period resulted in a charge of £35,000
(2022: £21,000) to the profit and loss, and a credit of £0.33m (2022: charge
£0.34m) to other comprehensive income.
Earnings per share
The loss per share from continuing operations was 7.19p (FY22: loss per share
8.91p). The adjusted loss per share which excludes the after-tax impact of
exceptional items, share-based payments and the amortisation of intangible
assets recognised on acquisition was 5.53p (FY22: loss per share 6.62p).
Intangible assets and goodwill
Intangible assets comprise £7.56m of goodwill (2022: £8.37m), £1.10m (2022:
£0.86m) internally generated software, and £1.13m (2022: £1.39m) of other
intangibles acquired as part of business combinations. Software development
costs relating to both SwipedOn and Space Connect products amounting to
£0.69m (2022: £0.34m) were capitalised. An amortisation charge of £0.65m
was recorded against intangible assets; internally generated software is
amortised over three years and intangible assets acquired through business
combinations are amortised over 10 years. Intangible assets denominated in
currencies other than pounds sterling increased in value by £0.38m due to
movements in exchange rates.
Intangible assets relating to A+K consisting of £1.14m of goodwill and
£0.11m of acquired intangible assets were transferred to assets held for
sale. An impairment charge of £0.56m was recorded against the goodwill
associated with A+K, valuing the assets held for sale at their fair value less
costs of disposal.
Financial position
Contract liabilities of £2.62m (2022 £1.77m) relate to SaaS subscriptions
received in advance by SwipedOn and Space Connect which are spread over the
period to which they relate.
Borrowings amount to £0.33m (2022: £0.38m) relating to a mortgage on the
Group's freehold property in Mildenhall. As the mortgage was repaid in full
shortly after the year end using cash resources from the Group's continuing
operations it was not classified as a liability directly associated with
assets held for sale. Lease liabilities of £0.28m (2022: £0.10m) relate to
lease payments due on leasehold office space in Tauranga, New Zealand where
SwipedOn is based. The liability increased during the year as an extension to
the lease is now assumed to take place, meaning we shall continue to occupy
the premises until September 2027.
Cash flow
Cash and cash equivalents decreased during the year by £0.80m (2022:
£1.76m). Cash outflow from operating activities declined to £0.1m (2022:
£1.61m) whilst cash outflow from investing activities increased to £0.65m
(2022: £0.05m). As a Group we aim to be cashflow neutral for FY24 through
increased recurring revenues in our SaaS software business. The net cash
outflow from investing activities of £0.65m includes the receipt of £65,000
contingent disposal proceeds for SmartSpace Global Limited, offset by
investments in software development and property plant and equipment. Cash
outflow from financing activities amounted to £0.12m (2022: £0.08m) as
payments were made against the finance leases and property mortgage.
Our forecasts for revenue growth mean that the Group has sufficient cash flow
resources to continue operations until profitability is achieved.
Dividend policy
The Group reported a retained loss of £2.74m (FY22: loss of £2.56m), which
has been transferred to reserves. At 31 January 2023, the Group had retained
earnings of £6.58m (FY22: £9.16m). The Board considers that it is in
shareholders' best interests to retain resources in the Group.
Kristian Shaw
Chief Financial Officer
15 May 2023
Consolidated statement of comprehensive income for the year ended 31 January
2023
Year ended Year ended
31 January 2023 31 January 2022
£'000 £'000
Continuing operations
Revenue from contracts with customers 5,056 3,411
Costs of sale of goods (32) (19)
Costs of providing services (527) (348)
Gross profit 4,497 3,044
Administrative expenses (6,369) (6,446)
Net impairment losses on financial and contract assets 3 (14)
Other income 10 36
Operating loss (1,859) (3,380)
Adjusted EBITDA* (765) (2,375)
Reorganisation and transactional items (81) (109)
Depreciation (88) (92)
Amortisation (646) (531)
Impairment of financial asset 3 (14)
Share based payment charge (282) (259)
Operating loss (1,859) (3,380)
Finance income 1 1
Finance costs (7) (14)
Loss before tax (1,865) (3,393)
Taxation (215) 1,056
Loss for the year after tax (2,080) (2,337)
Loss for the year from discontinued operations (658) (227)
Loss for the year (2,738) (2,564)
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss:
Revaluation of property, plant and equipment - 73
Items that will be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations 330 (339)
Total other comprehensive income / (loss) 330 (266)
Total comprehensive loss attributable to the owners of the group (2,408) (2,830)
Basic loss per share
Continuing operations (7.19p) (8.11p)
Discontinued operations (2.27p) (0.79p)
Total (9.46p) (8.91p)
Diluted loss per share
Continuing operations (7.19p) (8.91p)
Discontinued operations (2.27p) (0.79p)
Total (9.46p) (8.91p)
* Loss for the year from continuing operations before net finance costs, tax,
depreciation, amortisation, reorganisation and transactional items, impairment
charges and share based payment charge.
Consolidated balance sheet at 31 January 2023
31 January 2023 31 January 2022
£'000 £'000
ASSETS
Non-current assets
Property, plant and equipment 54 751
Right-of-use assets 277 94
Intangible assets 9,782 10,619
Deferred tax assets 2,263 2,465
Total non-current assets 12,376 13,929
Current assets
Inventories - 203
Contract assets - 5
Trade and other receivables 480 399
Current tax receivable - 70
Prepayments 37 163
Cash and cash equivalents 1,962 2,758
2,479 3,598
Assets classified as held for sale 1,731 -
Total current assets 4,210 3,598
Total assets 16,586 17,527
LIABILITIES
Non-current liabilities
Lease liabilities 233 41
Total non-current liabilities 233 41
Current liabilities
Trade and other payables 1,115 1,379
Contract liabilities 2,615 1,774
Other tax liabilities 90 127
Borrowings 334 383
Lease liabilities 52 67
4,206 3,730
Liabilities directly associated with assets classified as held for sale 506 -
Total current liabilities 4,712 3,730
Total liabilities 4,945 3,771
11,641 13,756
NET ASSETS
EQUITY
Capital and reserves attributable to equity shareholders
Share capital 2,894 2,894
Share premium 3,839 3,839
Other reserves (1,670) (2,133)
Retained earnings 6,578 9,156
Total equity 11,641 13,756
Consolidated statement of changes in equity for the year ended 31 January 2023
Share capital Share premium Other reserves Retained earnings Total
£'000 £'000 £'000 £'000 £'000
At 31 January 2021 2,826 3,830 (2,087) 11,701 16,270
Loss for the year - - - (2,564) (2,564)
Other comprehensive loss for the year - - (266) - (266)
Total comprehensive loss for the year - - (266) (2,564) (2,830)
Transactions with owners in their capacity as owners:
Issue of ordinary shares as consideration for a business combination 67 - (67) - -
Issue of ordinary shares to option holders 1 9 (3) 3 10
Lapsed share options - - (16) 16 -
Exchange difference - - (4) - (4)
Share-based payment expense - continuing operations - - 281 - 281
Share-based payment expense - discontinued operations - - 29 - 29
At 31 January 2022 2,894 3,839 (2,133) 9,156 13,756
Loss for the year - - - (2,738) (2,738)
Other comprehensive income for the year - - 330 - 330
Total comprehensive income / (loss) for the year - - 330 (2,738) (2,408)
Transactions with owners in their capacity as owners:
Lapsed share options - - (160) 160 -
Share-based payment expense - continuing operations - - 290 - 290
Share-based payment expense - discontinued operations - - 3 - 3
At 31 January 2023 2,894 3,839 (1,670) 6,578 11,641
Consolidated statement of cash flows for the year ended 31 January 2023
Year ended 31 January 2023 Year ended 31 January 2022
£'000 £'000
Cash from operating activities
Cash consumed by operations (99) (1,614)
Interest received 1 1
Interest paid (22) (26)
Income taxes received 67 28
Net cash outflow from operating activities (53) (1,611)
Cash flows from investing activities
Payments for property, plant and equipment (26) (36)
Payment of software development costs (686) (340)
Proceeds from disposal of subsidiary (net of cash disposed) 65 327
Net cash from investing activities (647) (49)
Cash flows from financing activities
Proceeds from issues of share capital (net of issue costs) - 10
Repayment of borrowings (51) (27)
Principal elements of lease payments (68) (62)
Net cashflow from financing activities (119) (79)
Net change in cash and cash equivalents (819) (1,739)
Cash and cash equivalents at the beginning of the financial year 2,758 4,516
Effects of exchange rate changes on cash and cash equivalents 23 (19)
Cash and cash equivalents at the end of the financial year 1,962 2,758
Cash and cash equivalents comprise cash at bank and other short-term highly
liquid investments with maturity of three months or less, as adjusted for any
bank overdrafts.
Notes to the Financial Statements
1. Basis of preparation
SmartSpace Software plc is a company incorporated and domiciled in England and
Wales under the Companies Act 2006 and listed on the AIM market of The London
Stock Exchange. The nature of the Group's operations and its principal
activities are set out in the strategic report.
The financial information set out above does not constitute statutory accounts
within the meaning of Section 434 of the Companies Act 2006 for the financial
year ended 31 January 2023 but has been derived from those audited financial
statements. The auditor's report on the consolidated financial statements for
the year ended 31 January 2023 and 2022 is unqualified and does not contain
statements under s498(2) or (3) of the Companies Act 2006 or matters to which
the auditor drew attention by way of emphasis.
The annual accounts for the year ended 31 January 2023 have been prepared in
accordance with UK adopted International Accounting Standards using the
historical cost convention except where the measurement of balances at fair
value is required. The financial information included in this announcement
does not include all the disclosures required in accounts prepared in
accordance with UK adopted International Accounting Standards and accordingly
it does not itself comply with UK adopted International Accounting Standards.
The statutory accounts for the year ended 31 January 2023 will be delivered to
the Registrar of Companies following the Company's annual general meeting. The
financial information for the period ended 31 January 2022 is derived from the
statutory accounts for that year which have been delivered to the Registrar of
Companies.
The financial statements are presented in pounds sterling as that is the
currency of the primary economic environment in which the Group operates.
Going concern
The financial statements are prepared on a going concern basis notwithstanding
that the Group has reported an operating loss of £1,859,000 for the year to
31 January 2023 (2022: £3,380,000 loss) and cash consumed by operations of
£99,000 (2022: £1,614,000).
At 31 January 2023 the Group had £1.96m of gross cash with three operating
segments and a central overhead to support. Cash forecasts for each segment
and the consolidated Group have been prepared for a period of twelve months
from the date of signing the balance sheet.
The SwipedOn division has continued to grow its revenues and is now profitable
and cash generative. The Directors are confident that growth will continue in
the future. Whilst the Directors believe that SwipedOn will continue to
perform well stress tests have taken into account the possibility of reduced
growth in customer locations and increased customer churn.
As at 31 January 2023 Space Connect had annual recurring revenues of
£651,000, had been cash generative for the last six months, and is expected
to breakeven in the year to 31 January 2024. The Directors have stress tested
cashflow forecasts for lower revenue growth in Space Connect.
The Group has plans to find a new owner for its Anders + Kern division,
however cashflow forecast have been prepared on both a disposal and
non-disposal scenario. Forecasts assume that over the coming 12 month period
sales will continue to be at levels similar to those received during the year
ended 31 January 2023 with stress tests including the possibility that sales
reduce.
On the basis of these consolidated forecasts and stress tests, the Directors
believe that the Group can continue to operate within the resources currently
available to it over the forecast period.
Based on the above, the Directors believe it remains appropriate to prepare
the Group and parent company financial statements on the going concern basis.
2. Changes to accounting policies
There were no changes to accounting policies during the year ended 31 January
2023.
3. Operating segments
Description of segments and principal activities
The Group's operating board, consisting of the Chief Executive Officer and
Chief Financial Officer examines the Group's performance from a product
perspective and has identified two reportable segments of its business:
SwipedOn - based in New
Zealand provides the sale and support of self-service visitor management
software to
customers throughout the world.
Space Connect - based in the UK provides
the sale and support of self-service space management software through a
network of partners, distributors and resellers to customers throughout the
world
The operating board primarily uses an adjusted measure of earnings before
interest, tax, depreciation and amortisation (EBITDA) to assess the
performance of the operating segments. However, the operating board also
receives information about the segments' revenues and assets on a monthly
basis.
3(b) Adjusted EBITDA
Adjusted EBITDA excludes discontinued operations and the effects of
significant items of income and expenditure which might have an impact on the
quality of earnings, such as reorganisation and transactional costs and
impairment of assets. It also excludes the effects of share-based payments.
Year ended 31 January 2023 Year ended 31 January 2022
£'000 £'000
Space Connect (515) (1,082)
SwipedOn 879 (164)
Central operating costs (1,129) (1,129)
Total adjusted EBITDA (765) (2,375)
3(c) Segmental financial performance
Year ended 31 January 2023 Central
Space Connect Swiped operating
On costs Total
£'000 £'000 £'000 £'000
Revenue from contracts with customers 636 4,420 - 5,056
Costs of sale of goods - (32) - (32)
Costs of providing services (3) (524) - (527)
Gross profit 633 3,864 - 4,497
Administrative expenses (1,722) (3,346) (1,301) (6,369)
Impairment losses on financial and contract assets - 3 - 3
Other income - 10 - 10
Operating profit / (loss) (1,089) 531 (1,301) (1,859)
(515) 879 (1,129) (765)
Adjusted EBITDA*
Reorganisation and transactional items (81) - - (81)
Depreciation (7) (79) (2) (88)
Amortisation (464) (182) - (646)
Impairment of financial assets - 3 - 3
Share based payment charge (22) (90) (170) (282)
Operating loss (1,089) 531 (1,301) (1,859)
Finance income - 1 - 1
Finance costs - (7) - (7)
Loss before tax (1,089) 525 (1,301) (1,865)
Taxation (14) (161) (40) (215)
Loss after tax (1,103) 364 (1,341) (2,080)
Year ended 31 January 2022 Space Connect Swiped Central Total
On
operating
costs
£'000 £'000 £'000 £'000
Revenue from contracts with customers 458 2,953 - 3,411
Costs of sale of goods (1) (18) - (19)
Costs of providing services (64) (284) - (348)
Gross profit 393 2,651 - 3,044
Administrative expenses (1,927) (3,134) (1,385) (6,446)
Impairment losses on financial and contract assets (3) (11) - (14)
Other income - 36 - 36
Operating loss (1,537) (458) (1,385) (3,380)
(1,082) (164) (1,129) (2,375)
Adjusted EBITDA*
Reorganisation and transactional items - - (109) (109)
Depreciation (6) (79) (7) (92)
Amortisation (431) (100) - (531)
Impairment of financial assets (3) (11) - (14)
Share based payment charge (15) (104) (140) (259)
Operating loss (1,537) (458) (1,385) (3,380)
Finance income - 1 - 1
Finance costs - (11) (3) (14)
Loss before tax (1,537) (468) (1,388) (3,393)
Taxation 446 98 512 1,056
Loss after tax (1,091) (370) (876) (2,337)
* (Loss)/profit for the year from continuing operations before net finance
costs, tax, depreciation, amortisation, reorganisation and transactional
items, impairment charges and share based payment charge.
3(d) Segment assets
31 January 2023 31 January 2022
Additions to non-current assets* Additions to non-current assets*
Segment Segment
assets assets
£'000 £'000 £'000 £'000
Space Connect 4,722 73 5,360 146
SwipedOn 7,603 870 6,533 224
Anders + Kern - - 2,653 32
Segment assets 12,325 943 14,546 402
Unallocated assets 2,530 - 2,981 -
Assets relating to discontinued operations 1,731 - - -
Total assets 16,586 943 17,527 402
*Other than contract assets and deferred tax assets
For the purpose of monitoring segment performance and allocating resource
between segments, the Group's Chief Executive Officer monitors the tangible,
intangible and financial assets attributable to each segment. All assets are
allocated to reportable segments with the exception of cash held by the Parent
Company, other financial assets (except for trade and other receivables) and
tax assets.
The total of non-current assets other than deferred tax assets broken down by
location of assets is shown as follows:
31 January 2023 31 January 2022
£'000 £'000
UK 3,536 5,878
New Zealand 6,577 5,586
Total assets 10,113 11,464
3(e) Segment liabilities
Segment liabilities are measured in the same way as in the financial
statements. These liabilities are allocated based on the operations of the
segment.
31 January 2023 31 January 2022
£'000 £'000
Space Connect 826 524
SwipedOn 2,790 2,018
Anders + Kern - 865
Segment liabilities 3,616 3,407
Unallocated 505 364
Liabilities relating to discontinued operations 824 -
Total liabilities 4,945 3,771
3(f) Revenue by customer geographical location
Year ended 31 January 2023 Space Connect Swiped Total
On
£'000 £'000 £'000
UK 358 631 989
USA 10 2,017 2,027
Australia 94 851 945
New Zealand - 492 492
Canada - 218 218
Sweden 133 - 133
Rest of the world 41 211 252
Total 636 4,420 5,056
Year ended 31 January 2022 Space Connect Swiped
On Total
£'000 £'000 £'000
UK 266 440 706
USA 2 1,340 1,342
Australia 93 566 659
New Zealand - 311 311
Canada - 173 173
Sweden 82 - 82
Rest of the world 15 123 138
Total 458 2,953 3,411
4. Revenue from contracts with customers
Disaggregation of revenue from contracts with customers
The Group derives revenue from the transfer of goods and services over time
and at a point in time in the following major product lines and geographical
regions.
Year ended 31 January 2023 Space Connect SwipedOn
UK New Zealand Total
£'000 £'000 £'000
Segment revenue 636 4,420 5,056
Timing of revenue recognition
At a point in time 99 60 159
Over time 537 4,360 4,897
636 4,420 5,056
Year ended 31 January 2022 Space Connect SwipedOn
Australia New Zealand Total
£'000 £'000 £'000
Segment revenue 458 2,953 3,411
Timing of revenue recognition
At a point in time 84 37 121
Over time 374 2,916 3,290
458 2,953 3,411
Revenues from external customers come from the sale of software as a service,
the sale of software licences, the sale of professional services and the sale
of hardware. The revenue from the sale of software as a service and software
licences relates to the Group's intellectual property owned by SwipedOn and
Space Connect. No single customer represents 10 per cent or more of the
Group's total revenues.
4(b) Assets and liabilities related to contracts with
customers
The Group has recognised the following assets and liabilities related to
contracts with customers:
Current contract assets 31 January 31 January
2023 2022
£'000 £'000
Software - 5
Total current contract assets - 5
Current contract liabilities 31 January 31 January
2023 2022
£'000 £'000
Software 2,615 1,774
Total contract liabilities 2,615 1,774
Contract liability movement
£'000
At 31 January 2021 1,129
Recognised as revenue in period (1,129)
New contract liabilities 1,774
At 31 January 2022 1,774
Recognised as revenue in period (1,774)
New contract liabilities 2,615
At 31 January 2023 2,615
The Group expects 85% (£2,519,000) of deferred revenue as of 31 January 2023
to be recognised during the next reporting period. The remaining 15%
(£96,000) will be recognised in the year ending 31 January 2025.
Unsatisfied contracts
The following table shows unsatisfied performance obligations resulting from
fixed-price software as a service contracts and software support agreements:
31 January 31 January
2023 2022
£'000 £'000
Aggregate amount of the transaction price allocated to software as a service 2,615 1,774
agreements and software support agreements that are partially or fully
unsatisfied as at 31 January
4(c) Accounting policies
The Group has a number of different types of contractual arrangements and
consequently applies a variety of methods of revenue recognition, based on the
principles set out in IFRS 15 Revenue from Contracts with Customers. The
revenue and profit in any period are based on the delivery of performance
obligations and an assessment of when control is transferred to the customer.
Revenue is recognised when the performance obligation in a contract has been
performed (so 'point in time' recognition) or over time as the performance
obligation is transferred to the customer.
For contracts where the Group does not provide the final services judgement is
applied as to whether the Group is acting as a principal or agent. Where the
Group controls the goods or services before they are transferred to the
customer a principal relationship is considered to be in place, and revenue is
recognised gross.
The transaction price, being the amount to which the Group expects to be
entitled and has rights to under the contract, is allocated to the identified
performance obligations.
For each performance obligation, the Group determines if revenue will be
recognised over time or at a point in time. Where the Group recognises revenue
over time for long-term contracts, this is in general due to the Group
performing and the customer simultaneously receiving and consuming the
benefits provided over the life of the contract. For each performance
obligation to be recognised over time, the Group applies a revenue recognition
method that faithfully depicts the Group's performance in transferring control
of the goods or services to the customer. This decision requires assessment of
the real nature of the goods or services that the Group has promised to
transfer to the customer. The Group applies the relevant output or input
method consistently to similar performance obligations in other contracts.
If performance obligations in a contract do not meet the over time criteria,
the Group recognises revenue at a point in time (see below for further
details).
The Group disaggregates revenue from contracts with customers by reporting
segment and timing of transfer of goods and services as management believe
this best depicts how the nature, amount, timing and uncertainty of the
Group's revenue and cash flows are affected by economic factors.
Sale of software as a service
The Group offers its software as a service hosted in the cloud. Under terms of
the contract, the customer receives the right to access the software for an
agreed period of time. To the extent that the customer has been invoiced in
excess of the value of services received to date a contract liability for the
provision of the software as a service is recognised at the time of sale.
Management considers that revenue is recognised over time as the service is
delivered until the point that the agreement expires.
Revenue invoiced during the reporting period which relates to future periods
is classified as deferred income within contract liabilities on the balance
sheet.
The software comprises a number of different modules which can be sold as a
bundle at the outset or separately if a customer chooses to take a
subscription at a later date. Additional modules will continue to be developed
and either offered as part of the initial product offering or sold separately
to customers who subscribe to that module.
Sale of professional services
The Group sells professional services comprising implementation, configuration
and support services. These services can be purchased in advance and used by
customers when required and revenue is recognised at a point in time when the
service has been provided.
Hardware and Systems Integration
The Group sells hardware through Anders + Kern or as part of a contract for
software through its software division. Revenue is recognised at the point
when the performance obligation is fulfilled, usually when the hardware is
delivered to the customer. Where installation services are sold alongside
the hardware, revenue from those installation services is recognised when
those services are delivered. Customers have no right to return goods and no
warranties are issued to customers.
Contract assets and liabilities
Where the Group provides software as a service or software support agreements,
customers often pay in advance for a service to be delivered over time. Where
payments made are greater than the revenue recognised at the period end date,
the Group recognises a deferred income contract liability for this difference.
Where payments made are less than the revenue recognised at the period end
date, the Group recognises an accrued income contract asset for this
difference.
The Group applies the IFRS 9 simplified approach to measuring expected credit
losses which uses a lifetime expected loss allowance to assess the impairment
of contract assets.
5. Cash flow information
31 January 31 January
2023 2022
£'000 £'000
Loss before income tax from continuing operations (1,865) (3,393)
Adjustments for:
Depreciation and amortisation 734 623
Non-cash employee benefit expense - share-based payments 282 259
Finance costs - net 6 13
Credit loss (3) 14
Net exchange differences 23 (10)
Change in operating assets and liabilities of continuing operations
Decrease / (increase) in trade and other receivables (138) (67)
Decrease / (increase) in contract assets 5 -
Decrease / (increase) in inventories - 1
Decrease / (increase) in prepayments 71 (68)
Decrease / (increase) in receivables from discontinued operations 141 (300)
Increase / (decrease) in trade creditors (40) 154
Increase / (decrease) in other creditors 111 268
Increase / (decrease) in contract liabilities 793 823
Cash consumed by continuing operations 120 (1,683)
Loss before income tax from discontinued operations (700) (285)
Adjustments for:
Profit on sale of discontinued operations (65) -
Depreciation and amortisation 41 42
Impairment of intangible assets 558 -
Non-cash employee benefit expense - share-based payments 3 29
Finance costs - net 15 12
Change in operating assets and liabilities of discontinued operations
Decrease / (increase) in trade and other receivables (113) 182
Decrease / (increase) in inventories 98 (114)
Decrease / (increase) in prepayments 45 15
Increase / (decrease) in trade creditors 37 (30)
Increase / (decrease) in other creditors (32) 8
Increase / (decrease) in contract liabilities 35 (90)
Increase / (decrease) in payables due to continuing operations (141) 300
Cash consumed by discontinued operations (219) 69
Cash consumed by operations (99) (1,614)
6. Discontinued operations
During the year ended 31 January 2023 the board resolved to commence a process
to dispose of the Group's investment in Anders + Kern UK Limited (the "A+K
disposal Group"), The financial performance of the A+K disposal group is
therefore reported in discontinued activities for the current and prior
period. Assets and directly associated liabilities of the A+K disposal group
are included within assets held for sale at the current balance sheet date
only. In allocating A+K to a disposal group the directors determined that it
is highly likely that a disposal will take place before 31 January 2024.
Two transactions relating to businesses disposed of in previous financial
years occurred during the year both of which result in full and final
settlement of amounts due. Communica Holdings Limited was disposed of in June
2018, and SmartSpace Global Limited was disposed of in August 2020.
Financial performance and cash flow benefit
Year ended 31 January 2023 Year ended 31 January 2022
£'000 £'000
Revenue 2,094 1,729
Expenses (2,263) (2,014)
Trading loss before income tax (169) (285)
Contingent consideration for disposal of Smartspace Global Limited 65 -
Claim settlement relating to the disposal of Communica Holdings Limited (38) -
Impairment of Anders + Kern intangible assets (558) -
Total loss before tax (700) (285)
Income tax benefit 42 58
Loss from discontinued operations (658) (227)
31 January 2023 31 January 2022
£'000 £'000
Net cash outflow from operating activities (234) 58
Net cash outflow from investing activities 56 (1)
Net cash inflow from financing activities (20) (27)
Net decrease in cash generated by disposal group (198) 30
Assets and liabilities of disposal group
31 January 2023 31 January 2022
£'000 £'000
Assets classified as held for sale
Property, plant and equipment 680 -
Intangible assets 674 -
Inventories 105 -
Trade and other receivables 204 -
Prepayments 13 -
Deferred tax assets 55 -
Total assets of disposal group held for sale 1,731 -
Liabilities directly associated with assets classified as held for sale
Trade and other payables (306) -
Contract liabilities (89) -
Other tax liabilities (111) -
Total liabilities for disposal group classified as held for sale (506) -
Net assets of disposal group 1,225 -
7. Loss per share
Basic loss per share
Year ended 31 January 2023 Year ended 31 January 2022
Pence Pence
Attributable to the ordinary equity holders of the Company:
From continuing operations (7.19p) (8.11p)
From discontinued operations (2.27p) (0.79p)
Total basic loss per share (9.46p) (8.91p)
6(b) Diluted loss per share
Year ended 31 January 2023 Year ended 31 January 2022
Pence Pence
Attributable to the ordinary equity holders of the Company:
From continuing operations (7.19p) (8.11p)
From discontinued operations (2.27p) (0.79p)
Total diluted loss per share (9.46p) (8.91p)
6(c) Reconciliation of earnings used in calculating earnings
per share
Earnings per share data is based on the Group loss for the year and the
weighted average number of ordinary shares in issue.
Year ended 31 January 2023 Year ended 31 January 2022
£'000 £'000
Basic (loss) / earnings per share
Loss attributable to the ordinary equity holders of the Company:
From continuing operations (2,080) (2,337)
From discontinued operations (658) (227)
(2,738) (2,564)
Diluted (loss) / earnings per shares
Loss attributable to the ordinary equity holders of the Company:
From continuing operations (2,080) (2,337)
From discontinued operations (658) (227)
(2,738) (2,564)
6(d) Weighted average number of shares used as the denominator
Year ended 31 January 2023 Year ended 31 January 2022
Number Number
Weighted average number of shares used as the denominator in calculating basic 28,941,234 28,780,768
earnings per share
Adjustments for calculation of diluted earnings per share
Options - -
Weighted average number of shares and potential ordinary shares used as the 28,941,234 28,780,768
denominator in calculating diluted earnings per share
6(e) Information concerning the classification of securities
Options
Options granted to employees under the Group's share option schemes are
considered to be potential ordinary shares. Whilst options are never included
in the determination of basic earnings per share, they are included in the
calculation of diluted earnings per share if considered dilutive. Details
relating to the options are set out in note 20.
At 31 January 2023 options are considered antidilutive and therefore not
included in the calculation of diluted earnings per share. These options could
potentially be dilutive in the future.
6(f) Alternative measure of earnings per share
Year ended 31 January 2023 Year ended 31 January 2022
£'000 £'000
Loss for the year from continuing operations (2,080) (2,337)
Adjustment to basic (loss)/earnings:
Reorganisation and transactional costs 81 109
Tax credit on reorganisation and transactional costs (15) (21)
Amortisation of acquired intangibles 178 177
Deferred tax credit on amortisation of acquired intangibles (47) (44)
Impairment of intangible assets - -
Share based payment charge 282 259
Deferred tax credit on share-based payment charge - (49)
Adjusted (loss)/earnings attributable to owners of the Company (1,601) (1,906)
)
Number of shares No. No.
Weighted average ordinary shares in issue 28,941,234 28,780,768
Weighted average potential diluted shares in issue 28,941,234 28,780,768
Adjusted (loss)/earnings per share
Basic (loss)/earnings per share (5.53p) (6.62p)
Diluted (loss)/earnings per share (5.53p) (6.62p)
8. Property plant and equipment
Freehold land & buildings Fixtures & fittings Plant & machinery Office equipment Total
£'000 £'000 £'000 £'000 £'000
At 31 January 2021
Cost 649 13 13 154 829
Accumulated depreciation (49) (12) (11) (74) (146)
Net book amount 600 1 2 80 683
Year ending 31 January 2022
Opening net book amount 600 1 2 80 683
Additions - - - 36 36
Revaluation 90 - - - 90
Disposals - - - (2) (2)
Depreciation charge (13) (1) (2) (38) (54)
Foreign exchange impact - - - (2) (2)
Closing net book amount 677 - - 74 751
At 31 January 2022
Cost or valuation 680 13 13 179 885
Accumulated depreciation (3) (13) (13) (105) (134)
Net book amount 677 - - 74 751
Year ending 31 January 2023
Opening net book amount 677 - - 74 751
Transfer to disposal group (677) - - (14) (691)
Additions - - - 18 18
Disposals - - - (1) (1)
Depreciation charge - - - (26) (26)
Foreign exchange impact - - - 3 3
Closing net book amount - - - 54 54
At 31 January 2023
Cost or valuation - - - 155 155
Accumulated depreciation - - - (101) (101)
Net book amount - - - 54 54
Leased assets
Leased assets are presented as a separate line item in the balance sheet.
Revaluation, depreciation methods and useful lives
Land and buildings are recognised at fair value based on periodic valuations
by external independent valuers, less subsequent depreciation for buildings. A
revaluation surplus is credited to other reserves in shareholders' equity. All
other property, plant and equipment is recognised at historical cost less
depreciation.
Depreciation is provided so as to write off to the cost or valuation of assets
(other than freehold land) less their estimated residual values over their
expected useful economic lives using the straight-line method on the following
bases
· Fixtures and fittings
4-5 years
· Plant and
machinery 4-5 years
· Office equipment
3-4 years
· Freehold buildings
50 years
9. Events occurring after the end of the reporting period
There are no subsequent events occurring after the reporting date that require
adjustment or disclosure.
10. Annual General Meeting
Further details in relation to the Annual General Meeting will be provided in
due course.
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