REG - Smarttech247 Group - Interim results
27/04/2023 07:00
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RNS Number : 6165X Smarttech247 Group PLC 27 April 2023
Certain 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") as applied in the United Kingdom. Upon
publication of this Announcement, this information is now considered to be in
the public domain.
27 April 2023
Smarttech247 Group PLC
("Smarttech247", the "Group" or the "Company")
Interim results
Smarttech247 (AIM: S247), a multi-award-winning provider of AI-enhanced
cybersecurity services providing automated managed detection and response for
a portfolio of international clients, today announces its maiden unaudited
interim results for the six months ending 31 January 2023.
Operational highlights
· Admitted to trading on AIM in December 2022 raising £3.7 million via
a placing of new ordinary shares
· Continued growth of the customer base in the UK, Europe and the US
· Multiple new contracts secured, including:
o Three-year VisionX contract with a Fortune 150 leading automotive retailer
in the USA worth c.US$800,000
o Three-year agreement with a large US tech company worth c.US$400,000
o Two-year agreement with a prestigious Irish University worth c.€450,000
· Headcount increased by 75% to deliver the proprietary technologies of
VisionX, Threathub and NoPhish
· Dedicated sales operation now established leading to a growing sales
pipeline
· New Women in Cybersecurity Academy launched in August 2022
· Featured as a Fast 50 Technology Company by Deloitte Ireland in
November 2022
Post-period end
· New and renewed contracts secured:
o Existing contract with a global pharmaceutical client renewed for another
year which is worth c.US$615,000
o Contract secured with a new client - a global pharmaceutical
organisation
o New three-year contract worth over €100,000 with a leading climate
solution company
o Extended the scope of an existing contract with a Fortune 500 customer
o Signed a letter of intent for a three-year contract with a major European
financial services group
· Successful Zero Day Con 2023 conference held in March 2023
· Participation in new Managed Security Service Provider Program with
partner, Forcepoint, a global security leader, announced in April 2023
· Shortlisted by Small Cap Awards for IPO of the Year and by Tech
Excellence Awards for Managed Security Service Provider for the Year
· Grant of share options to employees
Financial highlights
· Revenues increased by 19.4% to €4.62 million (31 January 2022:
€3.87 million)
· Adjusted EBITDA increased by 59.7% to €1.15 million (31 January
2022: €0.72 million)
· Cash of €7.00 million at the period end (31 July 2022: €2.36
million)
Raluca Saceanu, Chief Executive Officer of Smarttech247, commented:
"I am pleased to announce our first set of results as an AIM-quoted company.
Smarttech247 is already seeing the benefits from its admission with continued
revenue and EBITDA growth, and we are now well funded to support our expansion
strategy. We are actively progressing with the delivery of our new products
and traction with international customers is continuing to develop as
evidenced by our growing sales pipeline.
"As Smarttech247 continues to establish itself as a key player in the
cybersecurity sector, we are pleased with the progress made to date, and look
forward to continued growth and strategic advances."
- Ends -
For further information please contact:
Smarttech247 Group PLC Tel: +353 21 206 6033
Ronan Murphy, Executive Chairman
Raluca Saceanu, Chief Executive Officer
Nicholas Lee, Finance Director
SPARK Advisory Partners Limited - Nominated Adviser Tel: + 44 (0) 20 3368 3550
Mark Brady / Adam Dawes
Shard Capital - Broker Tel: +44 (0) 20 7186 9900
Damon Heath
Fortified Securities - equity adviser
Tel: +44 (0) 7493 989014
Guy Wheatley, CFA
Yellow Jersey PR Tel: +44 (0) 20 3004 9512
Sarah Hollins / Annabelle Wills / Bessie Elliot
About Smarttech247
Smarttech247 is a multi-award winning automated MDR (Managed Detection &
Response) company. Its platform is trusted by international organisations and
provides threat intelligence with managed detection and response to provide
actionable insights, 24/7 threat detection, investigation and response.
The Group's services are geared towards proactive prevention, and it achieves
this by utilising the latest in cloud, big data analytics and machine
learning, along with an experienced incident response team. Smarttech247's
offices are located in Ireland, United Kingdom, Romania, Poland and the USA.
The Company was admitted to trading on AIM on 15 December 2022.
For further information please visit www.smarttech247.com
(http://www.smarttech247.com)
Chief Executive Officer's statement
Introduction and IPO
H1 2023 is the first reporting period for Smarttech247 as a PLC, quoted on
AIM, a market operated by the London Stock Exchange. The Company was admitted
to trading on 15 December 2022, successfully raising £3.7 million (before
expenses) to fund the development of our proprietary technology and expansion
into new products and geographies in order to accelerate revenue growth.
Operational review
During the period under review, Smarttech247 has continued to make significant
progress, focusing on building out its platform and developing new products.
The Group has won a number of multi-year contracts with prestigious
organisations which are doubly important as they provide validation of the
service that Smarttech247 can provide and clear reference points for new
customers whilst expanding our global market presence. These contract wins
include a three-year contract with a total sales value of US$800,000 with a
Fortune 150 leading automotive retailer in the USA with annual revenues of
over US$20 billion. This was followed by a three-year agreement with a large
US tech company headquartered in Massachusetts and a two-year agreement with
a prestigious university in Ireland worth
c.US$400,000 and €450,000 respectively over the length of these
contracts.
More recently, we won a new contract with a global pharmaceutical
organisation, and renewed a contract with an existing global pharmaceutical
client for another year which is worth €615,000. We have also extended the
scope of the contract with an existing Fortune 500 customer and secured a new
three-year contract worth over €100,000 in total with a leading climate
solution company. We have also signed a letter of intent for a three-year
contract with a major European financial services group. The Company is often
competing with larger global organisations to win new business and succeeding.
The majority of our contracts are also multi-year thereby providing certainty
of revenue.
To support the extensive capabilities of its VisionX Managed Detection and
Response ("MDR") platform, the Company launched its new VisionX technology
during the period. The full VisionX platform comprises of an automated
security operations centre platform providing 24/7 proactive threat detection
and response, using cloud data analytics, machine learning and an incident
response capability.
Combining the MDR platform with the managed services offering creates
competitive differentiation for the Company which major new customers have
highlighted as one of the reasons for selecting Smarttech247. The Company is
also continuing to develop its threat and vulnerability software with
Threathub. Threathub allows organisations to manage their risk in a continuous
way by providing them with automated threat modelling and dynamic risk
governance capabilities.
Smarttech247 works with several leading industry players whose products can be
incorporated within its MDR platform as required. These partners include
Forcepoint, Microsoft, IBM and Crowdstrike. The Group has also received
re-certification to Cyber Essentials UK which validates the robustness of the
Company's data protection and cybersecurity systems.
One of our current areas of focus is to build out our sales strategy and
operations. The Company is now making significant investments and progress in
this area which will further support our revenue growth and this has been
reflected in the growth of our sales pipeline.
On 9 March 2023, Smarttech247 hosted the Zero Day Con 2023 conference for the
second time. This event brings together leading technology firms, industry
experts and government officials to allow business leaders to learn more about
the latest cybersecurity trends. This year was again a very successful
conference with over 500 international cybersecurity industry participants
attending, including representatives from the FBI and CIS.
In April 2023, the Company announced its participation in the newly released
Managed Security Service Provider Program by its partner, Forcepoint, a global
security leader. Smarttech247's hosted and managed services centred on
Forcepoint ONE SSE cloud-native and Forcepoint enterprise data security
solutions which allows enterprises to manage risk holistically and simplify
security operations.
Financial review
In terms of financial performance, revenue has increased by 19.4% over the
prior period as a result of winning several new contracts. Gross profit and
gross margins have increased reflecting the growth of the services component
of our revenue mix.
Operating costs have increased, principally as a result of a growth in
headcount as part of the build out of the platform and adjusted EBITDA
(explained below) has increased by 59.7% compared to H1 2022. Certain of the
Company's costs continue to be capitalised as they relate to product
development.
The costs of the IPO have been separately disclosed and have ultimately been
settled from a combination of cash and new shares. Other exceptional/one-off
items include the charge for share based payments and settlement costs
relating to the conversion of the convertible loan note. These costs have been
added back to EBITDA to calculate the adjusted EBITDA described above.
The convertible loan was fully converted on IPO in December 2022 leaving the
Company debt free. The cash and net assets of the Company have therefore
increased substantially, reflecting the conversion of the convertible loan and
the new funds raised at the IPO. The Company is therefore very well positioned
to fund its growth going forward.
Team
During the period, we have increased headcount significantly, by c.75% across
all locations, in order to provide the capacity for future revenue growth and
support product development. This is a significant achievement given the
demand for suitably qualified high-quality personnel. Furthermore, the Company
now has a new highly experienced sales team in place.
Outlook
We firmly believe that our AIM quote will enhance Smarttech247's visibility
and credibility in overseas geographies, including the USA and Europe, and
will support our growth plans in the short and long term.
Cyber-attacks are on the increase with serious consequences for the companies
involved. Smarttech247's combination of artificial intelligence-led managed
detection and response capabilities can help to significantly reduce the
impact and manage the situation. With the threat landscape growing in
complexity, exacerbated by geopolitical tensions, the Company is well
positioned at the intersection of three major evolving growth markets;
security threat incidents, cloud adoption and cyber-security data generation.
Cloud mitigation is causing companies to redesign its systems, leading to new
cyber-security requirements which Smarttech247 can mitigate. We therefore see
clear opportunities for future growth using the platform that we have
established.
Raluca Saceanu
Chief Executive Officer
27 April 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 31 January 2023
Unaudited Unaudited
Six months to 31 Jan 2023 Six months to 31 Jan 2022
€
€
Note
Continuing operations
Revenue 4,622,400 3,873,725
Cost of sales (1,396,855) (1,489,771)
Gross profit 3,225,545 2,383,954
Operating expenses 4 (2,587,386) (1,843,222)
IPO associated costs (1,058,616) -
Other operating income 48,401 -
Operating (loss) / profit (372,056) 540,732
Investment income 1,259 871
Other (losses) /gains (3,469) (1,934)
Finance costs 5 (75,162) (105,135)
Profit before taxation (449,428) 434,534
Income tax (118,079) (65,943)
Profit for the year from continuing operations (567,507) 368,591
Total profit for the year attributable to equity holders of the parent
Other comprehensive income (148,184) 1,988
Total comprehensive income for the year attributable to equity holders of the (715,691) 370,579
parent
Basic and diluted earnings per share - euro 6 (0.86) 0.42
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 January 2023
Note Unaudited
31 Jan 2023 Unaudited
€
31 July 2022
€
Non-current assets
Intangible assets 7 2,806,549 1,739,279
Property, plant and equipment 136,595 97,449
Right-of-use asset 11 368,484 63,541
Financial assets 1,157,078 1,160,548
Total non-current assets 4,468,706 3,060,817
Current assets
Trade and other receivables 8 2,959,742 6,153,306
Cash and cash equivalents 9 7,003,376 2,358,082
Total current assets 9,963,118 8,511,388
TOTAL ASSETS 14,431,824 11,572,205
Equity attributable to owners of the parent
Share capital 13 1,435,718 2
Share premium 13 6,277,965 -
Share based payment reserve 14 365,016 -
Other reserves 15 (1,020,948) 23,430
Foreign exchange reserve (113,915) 34,269
Retained earnings 3,908,237 4,475,744
Total equity 10,852,073 4,533,445
Non-current liabilities
Borrowings 10 - 2,341,807
Lease liability 11 292,898 3,645
Total non-current liabilities 292,898 2,345,452
Current liabilities
Borrowings - -
Trade and other payables 12 3,192,771 4,628,658
Lease liability 11 94,082 64,650
Total current liabilities 3,286,853 4,693,308
Total liabilities 3,579,751 7,038,760
TOTAL EQUITY AND LIABILITIES 14,431,824 11,572,205
CONSOLIDATED STATEMENT OF CASHFLOWS
For the six months ended 31 January 2023
Unaudited Unaudited
Six months to 31 Jan 2023 Six months to 31 Jan 2022
€ €
Cash flow from operating activities
(Loss) / profit for the financial year (567,507) 368,591
Adjustments for:
Interest payable 63,055 102,849
Lease liability finance charge 11,164 2,286
Share based payments 333,636 -
Impact of foreign exchange 190,037 85
Depreciation and amortisation 121,134 177,807
IPO costs settled in shares 825,747 -
CLN settlement costs 126,329
Fair value loss on revaluation of shares 3,469 1,934
Changes in working capital:
(Increase) / decrease in trade and other receivables 3,044,949 2,697,176
Increase / (decrease) in trade and other payables (1,352,605) (2,096,879)
Net cash inflow from operating activities 2,799,408 1,253,849
Cash flow from investing activities
Purchase of intangible fixed assets (1,144,298) (388,326)
Purchase of tangible fixed assets (58,562) (18,322)
Purchase of financial assets (1,149) -
Net cash outflow from investing activities (1,204,009) (406,648)
Cash flows from financing activities
Repayment of borrowings - (63,014)
Proceeds from the issue of shares 3,071,868 -
Repayment of lease liabilities (22,112) (27,731)
Net cash inflow/ (outflow) from financing activities 3,049,756 (90,745)
Net increase in cash and cash equivalents 4,645,155 756,456
Cash and cash equivalents at beginning of period 2,358,082 3,214,851
Foreign exchange impact on cash 139 1,898
Cash and cash equivalents at the end of the period 9 7,003,376 3,973,205
Significant non-cash items comprised:
- Settlement of convertible loan note through issue of shares of
€2,716,011
- Issue of shares to the EBT to value of €122,036
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 31 January 2023
Share Capital Share Premium SBP Reserve Other Reserve Foreign Exchange Reserve Retained Earnings Total
€ € € € € € €
At 1 August 2021 2 - - - 34,817 3,097,551 3,132,370
Profit for the period - - - - - 1,378,193 1,378,193
Other comprehensive income - - - - (548) - (548)
Total comprehensive loss for the period - - - - (548) 1,378,193 1,377,645
Transaction with owners
Acquisition of Smarttech Poland - - - 23,430 - - 23,430
Total transactions with owners - - - 23,430 - - 23,430
Balance at 31 July 2022 - (unaudited) 2 - - 23,430 34,269 4,475,744 4,533,445
At 1 August 2022 2 - - 23,430 34,269 4,475,744 4,533,445
Profit for the period - - - - - (567,507) (567,507)
Other comprehensive loss - - - - (148,184) - (148,184)
Total comprehensive loss for the period - - - - (148,184) (567,507) (715,691)
Transaction with owners
Capital reorganisation 1,012,460 - - (1,012,460) - - -
Issue of shares to settle acquired CLN 157,904 2,558,107 - (31,918) - - 2,684,093
Issue of shares 265,352 4,107,448 - - - - 4,372,800
Share based payments - - 365,016 365,016
Share issue costs - (387,590) - - - - (387,590)
Total transactions with owners 1,435,716 6,277,965 365,016 (1,044,378) - - 7,034,319
Balance at 31 January 2023 - (unaudited) 1,435,718 6,277,965 365,016 (1,020,948) (113,915) 3,908,237 10,852,073
NOTES TO THE INTERIM FINANCIAL STATEMENTS
For the six months ended 31 January 2023
1. GENERAL INFORMATION
Smartttech247 Group PLC (formerly Project Blackrock Limited) is a public
company incorporated in England and Wales and has been admitted to trading on
the AIM. The registered office address is 165 Fleet Street, London, United
Kingdom, EC4A 2DY. The principal activity of the company and its subsidiaries
(the "Group") is the provision of threat intelligence with managed detection
and response to provide actionable insights, 24/7 threat detection,
investigation and response.
2. BASIS OF PREPARATION
This unaudited condensed consolidated interim financial information for the
six months ended 31 January 2022 and 31 January 2023 has been prepared in
accordance with IFRS as adopted by the United Kingdom, including IAS 34
'Interim Financial Reporting'.
The accounting policies applied by the Group include those set out in the
preparation of the Historic Financial Information for the subsidiary company,
Zefone Limited, as included within the Admission Document of the Group ("the
Admission Document"), which can be found on the Company's website.
There are no new standards, interpretations and amendments which are not yet
effective in these financial statements, expected to have a material effect on
the Group's future financial statements.
The financial information does not contain all of the information that is
required to be disclosed in a full set of IFRS financial statements. The
financial information for the six months ended 31 January 2022 and 31 January
2023 is unreviewed and unaudited and does not constitute the Group or
Company's statutory financial statements for those periods.
The comparative financial information for the full year ended 31 July 2022 has
been derived from the unaudited IFRS financial information included in the RNS
release by the Group dated 4 April 2023.
The interim financial information has been prepared under the historical cost
convention. The financial information and the notes to the historical
financial information are presented in euros, the functional and presentation
currency of the Group, except where otherwise indicated.
Merger accounting and consolidated financial statements
The Company was incorporated on 29 September 2022 with one £0.01 ordinary
share and on 18 November 2022, became the parent company of the Group when it
issued 87,499,999 £0.01 ordinary shares in exchange for 100% of the ordinary
shares in Zefone Limited. This is not considered to be a business combination
within the scope of IFRS3 as the transaction was between entities under common
control. This is a key judgement, and as a transaction where there was no
change in the shareholders or holdings, is accordingly accounted for using
merger accounting with no change in the book values of assets and liabilities
and no fair value accounting applied.
The consolidated financial statements present the results of the Company and
its subsidiaries ("the Group") as if they have always formed a single group
for the entire period presented. Zefone Limited has been shown as the
continuing entity and its comparative financial information shown for 2022.
Intercompany transactions and balances between Group companies are therefore
eliminated in full. The equity presented is that of Smarttech247 Group PLC
with the difference on elimination of Zefone Limited's capital being shown as
a merger reserve.
A subsidiary is an entity over which the Group has control. The Group controls
an entity when it is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns
through its power over the entity.
Share based payments
The Group has made awards of warrants and options on its unissued share
capital to certain parties in return for services provided to the Group. The
valuation of these warrants involved making a number of critical estimates
relating to price volatility, future dividend yields, expected life of the
options and interest rates. These assumptions have been integrated into the
Black Scholes Option Pricing model and the Monte Carlo valuation model to
derive a value for any share-based payments. These assumptions are described
in more detail in note 14.
Share premium
The Share premium account includes any premiums received on the initial
issuing of the share capital. Any transaction costs associated with the
issuing of shares are deducted from the Share premium account, net of any
related income tax benefits.
Going concern
The directors have considered the principal risks and uncertainties facing the
business, along with the Group's objectives, policies and processes for
managing its exposure to financial risk. In making this assessment the
directors have prepared cash flows for the foreseeable future, being a period
of at least 12 months from the expected date of approval of this financial
information.
Furthermore, the Company has successfully raised gross proceeds of £3.7
million in new equity in order to fund the continuing development of the
business. The Group's forecasts and projections based on the current trends in
trading and after taking account of the funds currently held of over €7
million, show that the Group will be able to operate within the level of its
cash reserves.
The directors therefore have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the foreseeable
future and consider the going concern basis to be appropriate.
3. SEGMENT REPORTING
The following information is given about the Group's reportable segments:
The Chief Operating Decision Maker is the executive Board of Directors. The
Board reviews the Group's internal reporting in order to assess performance of
the Group. Management has determined the operating segment based on the
reports reviewed by the Board.
The Board considers that during the periods ended 31 January 2023 and 31
January 2022 the Group operated in the single business segment of Managed
Detection and Response capabilities to global organisations.
4. OPERATIONAL EXPENSES
The operating profit/(loss) for the period is after charging:
6 Mths to 31 Jan 2023 6 Mths to 31 Jan 2022
€ €
Amortisation of intangible fixed assets (78,540) (137,489)
Depreciation of right-of-use assets (24,691) (24,262)
Depreciation of tangible fixed assets (17,903) (16,056)
Share based payments - Employee options (259,875) -
CLN settlement cost (126,329) -
507,338 177,807
Adjusted EBITDA
Gross profit 3,225,545 2,383,954
Operating expenses (2,587,386) (1,843,222)
Operating profit 638,159 540,732
Add back above items 507,338 177,807
Adjusted EBITDA 1,145,497 718,539
The charge for share based payments relates to the issue of share options to
the CEO on listing. Share warrants have been issued to pay for certain
services in connection with the admission of the Company to AIM. Also, as part
of the IPO process, the outstanding convertible loan notes were converted into
equity which incurred a one-off associated cost.
5. FINANCE COSTS
6 Mths to 31 Jan 2023 6 Mths to 31 Jan 2022
€ €
Interest on financial liabilities 63,055 102,849
Finance charge on lease liabilities 12,107 2,286
75,162 105,135
6. EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share is calculated by
dividing the profit or loss for the period by the weighted average number of
ordinary shares in issue during the period.
6 Mths to 31 Jan 2023 (unaudited) 6 Mths to 31 Jan 2022 (unaudited)
Loss for the period from continuing operations - € (567,507) (368,591)
Weighted number of ordinary shares in issue 66,082,356 87,500,000
Basic and diluted earnings per share from continuing operations - euro (0.86) 0.42
The weighted average number of ordinary shares in issued for the prior year
has been used as the total number of shares swapped for the purchase of Zefone
Limited as if those shares were on issue during the prior period.
There is no difference between the diluted loss per share and the basic loss
per share as there were no securities in issue at 31 January 2023 that would
have a dilutive effect on earnings per share.
7. INTANGIBLE ASSETS
Software licenses Development costs Total €
€
€
Cost
At 31 August 2021 (audited) 947,326 377,206 1,324,532
Additions 272,733 1,155,061 1,427,794
Disposals - - -
At 31 July 2022 (unaudited) 1,220,059 1,532,267 2,752,326
Additions - 1,145,810 1,145,810
At 31 January 2023 (unaudited) 1,220,059 2,678,077 3,898,136
Amortisation
At 31 July 2021 (audited) 716,142 192,054 908,196
Charge for the year 98,140 6,711 104,851
Disposals - - -
At 31 July 2022 (unaudited) 814,282 198,765 1,013,047
Charge for the year 75,175 3,365 78,540
At 31 January 2023 (unaudited) 889,457 202,130 1,091,587
Net book value
31 July 2022 (unaudited) 405,777 1,333,502 1,739,279
31 January 2023 (unaudited) 330,602 2,475,947 2,806,549
8. TRADE AND OTHER RECEIVABLES
31 January 2023 31 July 2022 (unaudited)
€
(unaudited)
€
Trade receivables 1,690,722 5,236,917
Accrued revenue - 54,000
Prepayments 605,940 291,848
Taxes recoverable 107,749 -
Other receivables 555,331 570,541
2,959,742 6,153,306
9. CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash on hand and short term deposits held
with banks. The carrying value of these approximates to their fair value. Cash
and cash equivalents included in the cash flow statement comprise the
following statement of financial position amounts.
Group 31 January 2023 31 July 2022 (unaudited)
€
(unaudited)
€
Cash and cash equivalents 7,003,376 2,358,082
7,003,376 2,358,082
10. BORROWINGS
31 January 2023 31 July 2022 (unaudited)
€
(unaudited)
€
Non-current
Convertible secured loan notes - 2,341,807
- 2,341,807
Convertible secured loan notes carry mandatory interest rate at 5% per annum.
The Group shall redeem the outstanding loan notes on 7 May 2024 unless
converted or repaid prior to that date (having been settled on the listing of
the Group - refer below).
Holders of the convertible secured loan notes have the right to convert the
loan notes into ordinary shares in the event of a sale or listing. The holder
may also elect to convert the loan notes into ordinary shares prior to any
such event based on a conversion rate.
The convertible secured loan notes are secured by a debenture incorporating
fixed and floating charges over the Group's assets both present and future.
During the period, the convertible loan note and associated interest was
assigned to Smarttech247 Group PLC and settled by way of the issue of
13,646,441 on the listing of the Group - Refer to note 13.
11. LEASES
The Group had the following lease assets and liabilities:
31 January 2023 31 July 2022 (unaudited)
€
(unaudited)
€
Right-of-use assets
Properties 368,484 63,541
368,484 63,541
Lease liabilities
Current 94.082 64,650
Non-current 292,898 3,644
386,980 68,294
The increase in this balance for the current period relates to the renewal of
the lease for the Cork office in November 2022.
12. TRADE AND OTHER PAYABLES
31 January 2023 31 July 2022 (unaudited)
€
(unaudited)
€
Trade creditors 676,073 1,879,787
Corporation tax 112,995 50,197
Other taxation and social security 269,550 632,774
Accruals 232,887 658.338
Deferred income 1,669,243 1,332,899
Other payables 232,023 74,663
3,192,771 4,628,658
13. SHARE CAPITAL
Number of £0.01 shares Share Capital Share premium
€ €
One £0.01 share issued on incorporation 1 - -
Shares issued on exchange for Zefone Limited shares (1) 87,499,999 1,012,462 -
Shares issued on conversion of convertible loan note at £0.1760 13,646,441 157,904 2,558,107
Shares subscribed for by EBT (2) 10,546,713 122,036 -
Placing shares issued at £0.2966 12,385,828 143,316 4,107,448
Share issue costs - - (387,590)
124,078,982 1,435,718 6,277,965
(1) The issue of shares with a nominal value of €1,012,462 (£875,000) in
exchange for the 2 £1 shares in Zefone Limited with a nominal value of £2
results on elimination of the difference in a credit to a merger reserve
(within other reserves) of €1,012,462 (£875,000) in accordance with the
merger accounting principles as set out in note 2.
(2) During the period, the Company established a Group Employee Benefit Trust
("GEBT") and issued 10,546,713 shares to the GEBT at nominal value.
14. SHARE BASED PAYMENT RESERVE
31 January 2023 (unaudited) 31 July 2022 (unaudited)
€
€
Advisor warrants issued (1) 106,571 -
Employee options issued (2) 258,448 -
365,019 -
(1) On 30 November 2023, 863,115 warrants were issued to advisors and have
been fair valued in accordance with IFRS 2 at the fair value of the services
received. The warrants have an exercise price of £0.2966 and a time to expiry
of 4 years from grant.
(2) On 30 November 2022, 4,541,290 employee options were granted under the
Group's LTIP. These options have different vesting conditions based on
performance milestones that can be viewed below.
Share based payments valuation
The following tables summarise the valuation techniques and inputs used to
calculate the values of share based payments in the period:
Warrants
Grant date Number Share price Exercise price Volatility RF Rate Technique
£ £ % %
30 Nov 2022 863,115 0.2966 0.2966 41.0 3.00 Black Scholes
Options
Grant date Number Share price Exercise price Volatility RF Rate Technique
£ £ % %
30 Nov 2022 4,541,290 0.2966 0.2966 41.0 3.00 Monte Carlo
On 30 June 2022, 4,541,290 employee options were granted under the Groups
LTIP. The option vesting details are listed below:
Vesting Event Trigger for Vesting Number of options vested on date of vesting
1 - First anniversary date of the date of Admission 50%
2 - The later of the second anniversary date of date of Admission; and 25%
- The date if any on which the placing price has increased by 200%
3 - The later of the third anniversary date of date of Admission; and 25%
- The date if any on which the placing price has increased by 200%
15. OTHER RESERVES
31 January 2023 (unaudited) 31 July 2022 (unaudited)
€
€
Merger reserve (989,030) 23,430
Other reserve (31,918) -
(1,020,948) 23,430
In the prior period, Zefone acquired Smarttech247 SP. Z O.O. for €2,112
(10,000 Polish Zloty) with the total identifiable net assets acquire being
€25,550, resulting in the €23,430 being recorded to merger reserve.
As referred to in Note 2 above, on 18 November 2022, the Company became the
parent company of the Group when it issued 87,499,999 £0.01 ordinary shares
in exchange for 100% of the ordinary shares in Zefone Limited. Zefone Limited
has been shown as the continuing entity and its comparative financial
information shown for 2022. Intercompany transactions and balances between
Group companies are therefore eliminated in full. The equity presented is that
of Smarttech247 Group plc with the difference on elimination of Zefone
Limited's capital of €1,012,462 (£875,000) being shown as a merger reserve.
As part of the acquisition of Zefone Limited, Smarttech247 Group plc assumed
the convertible loan from Zefone Limited and at admission issued 13,646,441 in
full settlement of the convertible loan, with the resultant variance on
settlement versus assigned value at time of assumption of the convertible loan
of €31,918 taken to other reserves.
16. EVENTS SUBSEQUENT TO PERIOD END
There were no events subsequent to the period end that require disclosure.
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