REG - Thruvision Group PLC - Half-year Report <Origin Href="QuoteRef">THRU.L</Origin> - Part 2
15/12/2017 07:05
- Part 2: For the preceding part double click ID:nRSO4338Za
242
Loss for the year from continuing operations (849)
Analysis of revenue from continuing operations by customer
There have been three (H117: one) individually material customers in the
Thruvision operating segment during the period representing £307,000 of
revenue (H117: £530,000).
The Group's non-current assets by geography are detailed below:
30 September 2017 30 September 2016 31 March2017
Unaudited Unaudited Audited
£'000 £'000 £'000
United Kingdom 407 16,521 8,945
United States of America - 20,219 20,643
407 36,740 29,588
3. Adjusted loss before tax
An adjusted loss before tax measure has been presented as the Directors
believe that this is a more relevant measure of the Group's underlying
performance. Adjusted loss is not defined under IFRS and has been shown as the
Directors consider this to be helpful for a better understanding of the
performance of the Group's underlying business. It may not be comparable with
similarly titled measurements reported by other companies and is not intended
to be a substitute for, or superior to, IFRS measures of profit. The net
adjustments to loss before tax from continuing operations are summarised
below:
6 months ended 6 months ended Year ended
30 September2017 30 September2016 31 March2017
Unaudited Unaudited Audited
£'000 £'000 £'000
Amortisation of intangibles initially recognised on acquisition - 52 98
Share-based payment (i) 35 105 113
Financing set-up costs (ii) 263 - 421
Total adjustments 298 157 632
(i) The performance condition associated with LTIP awards made from
July 2015 are subject to a non-market based performance measure. Accordingly,
should these LTIP awards fail to vest, the share based payment charge will be
added back to the income statement. Historic LTIP awards have been made with a
market based performance measure which in the event that LTIPs fail to vest
the share based payment charge is not added back to the income statement. To
date the majority of historic LTIP awards have failed to vest. The inclusion
provides consistency over time allowing a better understanding of the
financial position of the Group.
(ii) On 28 September 2017 the Group arranged an unsecured £5.25
million loan facility with Herald Investment Trust, incurring legal and set up
fees. During the year ended 31 March 2017 the Group obtained a facility with
Investec Bank plc, incurring legal and set up fees.
4. Loss per share
The following reflects the loss and share data used in the basic and diluted
loss per share calculations:
6 months ended 6 months ended Year ended
30 September2017 30 September2016 31 March2017
Unaudited Unaudited Audited
£'000 £'000 £'000
Loss from continuing operations attributable to ordinary shareholders (2,454) (105) (849)
Loss from continuing and discontinued operations attributable to ordinary shareholders (13,783) (4,958) (16,680)
Weighted average number of shares 165,130,024 165,111,309 165,120,640
Basic and diluted loss per share - continuing operations (1.49p) (0.06p) (0.51p)
Basic and diluted loss per share - continuing and discontinued operations (8.35p) (3.00p) (10.10p)
6 months ended 6 months ended Year ended
30 September2017 30 September2016 31 March2017
Unaudited Unaudited Audited
£'000 £'000 £'000
Loss from continuing operations attributable to ordinary shareholders (2,454) (105) (849)
Amortisation of intangibles - 52 98
Share-based payment 35 105 113
Financing set up fees 263 - 421
Adjusted (loss)/profit after tax (2,156) 52 (217)
Weighted average number of shares 165,130,024 165,111,309 165,120,640
Basic and diluted loss per share (1.49p) (0.06p) (0.51p)
Basic and diluted adjusted (loss)/profit per share (1.31p) 0.03p (0.13p)
The inclusion of potential Ordinary Shares arising from LTIPs and Incentive
Shares would be anti-dilutive. Basic and diluted loss per share has therefore
been calculated using the same weighted number of shares.
5. Goodwill
Carrying amount of goodwill allocated to operating segments:
6 months ended 6 months ended Year ended
30 September2017 30 September2016 31 March2017
Unaudited Unaudited Audited
£'000 £'000 £'000
Video Business 12,151 24,196 17,076
Thruvision - - -
Goodwill 12,151 24,196 17,076
Historically the Group has been organised into Services and Solutions. In
light of the planned disposal of the Video Business when preparing the Annual
Report for the year ended 31 March 2017, the directors believed that providing
segment analysis that shows the Video Business as a separate segment to the
Thruvision Business would aid readers of the Annual Report. Combined, the
Video Business and Thruvision make up the previously reported Solutions
segment. Consequently goodwill acquired through business combinations has
been allocated for impairment testing purposes. These segments are deemed to
be the two cash-generating units ('CGUs') for impairment testing.
The Group conducts annual impairment tests on the carrying value of the CGUs
in the statement of financial position as at 28 February each year. Impairment
testing is only re-performed if an impairment triggering event occurs in the
intervening period. As a result of the proposed divestment the impairment
review conducted at the annual testing date was revisited in the Annual Report
for the year ended 31 March 2017.
Following the classification of the disposal group as held for sale, the
recoverable amount of the Video Business CGU as at 30 September 2017 was based
on fair value less costs of disposal. Fair value was assessed based on the
agreed consideration for the Video Business, and as a result an impairment of
£4.3 million in the carrying amount of goodwill was required.
The movement in goodwill in the period is a result of foreign exchange
movement (decrease £0.6m) and the impairment of £4.3m. Goodwill is now held
on the balance sheet as a component of Assets held for sale.
6. Issued share capital
As at 30 September 2017, there were 165,130,024 Ordinary Shares in issue (30
September 2016: 165,130,024, 31 March 2017: 165,130,024). In addition, there
were 163,124 Deferred Shares in issue (30 September 2016: 108,749, 31 March
2017: 163,124).
7. Share options
No share awards were granted in the period.
The following share awards were granted in the period ended 30 September
2016:
HMRC Approved Options Parallel Options Top-Up awards Part A awardsJuly 2016 SharesaveoptionsJuly 2016
July 2016 July 2016 July 2016
Number granted 344,214 344,214 1,493,286 305,000 1,717,853
Fair value per option/award £0.16 £0.32 £0.48 £0.48 £0.22
Exercise price £0.48 nil nil nil £0.31
Vesting period (years) 3.0 3.0 3.0 3.0 3.0
The vesting and exercise of share awards are subject to certain performance
conditions relating to revenue and profit in the performance period.
The share-based payment charge in the period amounts to £0.1 million (H117:
£0.4 million), with the fair value charge attributable to new awards in the
period determined using a Black Scholes calculation. Share option awards made
prior to 2015 have been made with a market based performance measure which in
the event that LTIPS fail to vest the share-based payment charge is not added
back to the income statement. To date the majority of these historic LTIP
awards have failed to vest.
8. Related party transactions
On 28 July 2016 the Remuneration Committee of the Group made a conditional
award to Colin Evans, Zak Doffman and Sharon Cooper, under the rules of The
Digital Barriers Long Term Incentive Plan (the "Plan"). The vesting and
exercise of these awards are subject to certain performance conditions
relating to revenue and profit in the performance period.
Top-up award(no of shares)
Colin Evans 250,000
Zak Doffman 500,000
Sharon Cooper 200,000
Full details of the plan can be found in the 2016 Annual Report on page 34.
No further awards were made in six months ended 30 September 2017.
9. Financial instruments
Fair value hierarchy
The Group uses the following hierarchy for determining and disclosing the fair
values of financial instruments by valuation techniques:
Level 1: quoted (unadjusted) prices in active markets for identical assets or
liabilities;
Level 2: other techniques for which all inputs which have a significant effect
on the recorded fair value are observable, either directly or indirectly; and
Level 3: techniques which use inputs which have a significant effect on the
recorded fair value that are not based on observable market data.
The Group have a Level 3 financial liability of £nil (H117: £2.2 million)
following the release of deferred consideration measured at fair value
following the acquisition of Brimtek Inc.
The Group have a Level 2 financial liability of £nil (H117: £0.3 million) of
financial swap measured at fair value. The fair values of other financial
assets and liabilities, which are short term, are not disclosed as the
Directors estimate that the carrying amount of the financial assets and
liabilities are not significantly different to their fair value. These
financial assets and liabilities are carried at amortised cost.
10. Disposal group classified as held for sale
Video Business
As reported in the 2017 Annual Report, the Board undertook a far-reaching
internal review of the Group in early 2017. As a result of the review, the
Board concluded that a sale of the Video Business would be in the best
interests of the Group. A sale process was undertaken, managed by Investec
Bank plc, which involved approaching a full range of potential trade and
financial buyers. Following a multi-staged and competitive process, the Board
received a number of indicative offers from interested parties. The disposal
group was classified as held for sale in September 2017.
The sale completed on 31 October 2017.
In the six months ended 30 September 2017 revenues attributable to the
disposal group amounted to £11.2 million (H117: £12.4 million, FY17: £24.5
million) with a loss attributable to the disposal group of £11.3m (H117: £4.7
million, FY17: £15.8 million).
Services segment
On 1 April 2016 the Board signed an agreement for the proposed disposal of the
Services segment to its existing management team for £1. This followed the
view that the Board believed the Services division was no longer strategic to
the Group's future. The disposal group was classified as held for sale in
March 2016.
The sale completed on 19 May 2016.
The sale included limited ongoing customer contracts associated with the
Services segment, as well as certain assets including vehicle leases and
limited stock and moveable assets. The book value of the assets transferred
was £0.1 million. In connection with the sale the Group transferred the
division's employees, by way of a TUPE process.
In the six months ended 30 September 2017 revenues attributable to the
disposal group amounted to £nil (H117: £0.2 million, FY17: £0.2 million) with
a loss attributable to the disposal group of £nil (H117: £0.2 million, FY17:
£0.2 million). Full details on the income statement and cash flows
attributable to the disposal group for the year ended 31 March 2017 are
disclosed in note 26 on page 80 of the 2017 Annual Report.
The basic and diluted loss per share from discontinued operations for the six
months ended 30 September 2017 is 6.86 pence (H117: 2.94 pence, FY17: 9.59
pence) based on 165,130,024 (H117: 165,111,309, FY17: 165,120,640) weighted
average shares in issue.The inclusion of potential Ordinary Shares arising
from LTIPs and Incentive Shares would be anti-dilutive. Basic and diluted loss
per share has therefore been calculated using the same weighted number of
shares.
11. Post balance sheet event
On 9 October 2017 the Group announced the agreed sale of the Video Business to
Volpi Capital LLP for consideration of £27.5 million in cash of which £25.5
million was payable on Completion (on a cash free/debt free basis) and the
remaining £2.0 million is payable subject to the Video Business securing a
specific trading contract within 12 months following Completion. Further
smaller amounts may become payable in the future in relation to certain items
of working capital. A General Meeting of the Company was held on 26 October
2017 where a resolution to approve the sale was approved by shareholders and
the transaction completed on 31 October 2017.
This information is provided by RNS
The company news service from the London Stock ExchangeRecent news on Thruvision
See all newsREG - Thruvision Group PLC - Year-end trading update
AnnouncementREG - Thruvision Group PLC - WalkTHRU completes operational test and evaluation
AnnouncementREG - Thruvision Group PLC - Next generation product range & software launched
AnnouncementREG - Thruvision Group PLC - Sales Progress Update
AnnouncementREG - Thruvision Group PLC Schroders PLC - Holding(s) in Company
Announcement