REG - TPXimpact Holdings - Interim Results
01/12/2021 07:00
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RNS Number : 1225U TPXimpact Holdings PLC 01 December 2021
1 December 2021
TPXimpact Holdings PLC (previously The Panoply Holdings Plc)
("TPXimpact", "TPX" or the "Company")
Interim Results
TPXimpact Holdings PLC (AIM: TPX), the technology-enabled services company
focused on digital transformation, is pleased to announce its interim results
for the six months ended 30 September 2021.
Financial highlights:
● Revenue up 77% to £37.5m (H1 2021: £21.2m)
o Organic like-for-like(1) revenue growth of 21%
● Statutory EBITDA of £3.8m (H1 2021: £0m)
● Adjusted EBITDA(2) up 83% to £5.3m (H1 2021: £2.9m)
● Adjusted EBITDA(2) margin up to 14.1% from 13.7% in the prior year
● Statutory profit after tax of £0.3m (H1 2021: loss of £1.8m)
● Basic earnings per share of 0.3p (H1 2021: loss per share 2.9p)
● Adjusted profit after tax(3) of £4.4m (H1 2021: £2.1m)
● Adjusted diluted earnings per share(4) of 4.7p (H1 2021: 2.6p)
● Cash conversion(5) of 118% (H1 2021: 102%) and adjusted cash at bank(6) of
£8.4m as at 30 September 2021 (30 September 2020: £5.9m). Adjusted net
debt(7) as at 30 September 2021 of £4.7m (30 September 2020: £1.2m)
● Sales backlog(8) as at 1 October 2021 of £34.6m to 31 March 2022 (1 October
2020: £17.5m)
● An interim dividend of 0.3 pence per share has been declared for H1. This will
be paid on 28 January 2022 to shareholders on the register at the close of
business on 21 January 2022
Operational and Impact highlights:
● £54m of total contract wins in H1 2022, up 116% (H1 2021: £25m)
● 74% of revenue from public services in the period (H1 2021: 70%), with Local
Government representing 14%, Central Government 36%, Healthcare 8%, Education
6% and the remaining 10% coming from other public services
● Completion of acquisition of Nudge Digital and appointment of Noel Gordon as
advisor to the Company, strengthening TPX's proposition in the healthcare
sector
● Entrance into new sectors including the utilities sector
● Launched Employee Resource Groups (ERG's) for women, LGBTQI employees and
minority ethnic employees
● Achieved Social Value Quality Mark Level 1 in recognition of the Company's
commitment to research, measure and report social impact and value
● Launched a board mentoring programme, focused on connecting diverse future
talent within the group with a PLC board mentor
● Name change from The Panoply Holdings PLC and start of consolidation of Group
businesses to the single brand of TPXimpact Holdings PLC, paving the way for
continued growth and targeting of larger projects
Other KPIs:
● 5 contracts signed over £3m (H1 2021: 2) and 7 customers billed over £1m (H1
2021: 3)
● Average contract spend increased to £141k (H1 2020: £94k)
● 267 customers billed in H1 2022 (H1 2021: 225)
● 76% of customers billed in H1 2022 also billed in FY 2021, FY 2020 and/or FY
2019
● Top ten clients generating 43% of revenue (H1 2020: 34%), reflecting larger
contract values
Neal Gandhi, Chief Executive Officer, commented:
"I'm delighted to report on another period of very strong growth for the
Company, in which we have continued to deliver impactful digital change to
organisations across the public, not-for-profit and commercial sectors. As a
reflection of the considerable operational progress and reputational growth we
have achieved, we report significant organic, like-for-like growth versus the
equivalent period last year as we take on larger, more impactful projects
across our markets.
"During the period we announced our change of name, reflecting the ongoing
transformation of our business through consolidation from 13 businesses into a
single, unified brand: TPXimpact. We expect the integration of our
businesses to complete in the spring of 2022 but are already seeing the
enhanced benefits of operating under this unitary structure.
"We remain focused on executing our strategy in line with our 2025 commercial
vision of delivering 10-15% organic revenue growth per annum and £200m run
rate revenue by March 2025. We are confident of delivering significant further
growth into H2 and beyond, in line with our recently upgraded expectations."
A video overview of the results is available to watch here:
https://bit.ly/TPX_H122_overview (https://bit.ly/TPX_H122_overview)
TPX will be hosting a webinar for analysts at 11 a.m. today. If you would like
to register for the analyst webinar, please contact tpx@almapr.co.uk
(mailto:tpx@almapr.co.uk) .
The Company will also be hosting a webinar for retail investors at 11 a.m. on
2 December. Retail investors can register for the webinar using the following
link: https://bit.ly/TPX_H1_webinar (https://bit.ly/TPX_H1_webinar) .
(1)( )Like-for-like is a non-GAAP/IFRS measure that presents the prior
year being restated to show the unaudited numbers of the existing and acquired
businesses consolidated for the same number of months as they have been
in FY2022. For FY2021, this incorporates the like-for-like pre-acquisition
results for Arthurly, Difrent, Keep IT Simple and Nudge Digital as if they
have been included in the Group for the same amount of time as they have been
in FY2022.
(2)( )Adjusted EBITDA is a non-IFRS measure that the Company uses to measure
its performance and is defined as earnings before interest, taxation,
depreciation and amortisation and after add back of costs related to
acquisitions, restructuring and other one off costs made by the Group,
investments made in relation to the sales and marketing of OpenDialog, fair
value adjustments and share based payment charge.
(3)( )( )( )Adjusted profit after tax is calculated as a non-IFRS measure.
To arrive at adjusted profit after tax, adjustments made include the add back
of acquisition, restructuring and other one off costs, amortisation related to
acquired intangibles, share-based payments, the impact of fair value
adjustments and the tax impact of these adjustments.
(4)( ) Adjusted diluted earnings per share is calculated based on adjusted
profit before tax as defined above. An adjusted diluted share count is
calculated by taking the weighted average basic shares and including the
maximum shares to be issued in respect of contingent consideration to be paid
based on performance measures met in the period, together with the maximum
share options outstanding.
(5)( )Cash conversion is calculated by reference to adjusted profit before
tax after deducting the costs relating to acquisitions and restructuring
(6)( )Cash in bank figure has been reduced by £2.1m reflecting the
completion cash payable to the sellers of Nudge Digital. This was settled in
Q3 FY2022
(7)( )Adjusted net debt is calculated excluding the impact of lease
liabilities and by reducing the impact of £2.1m completion cash payable to
the sellers of Nudge Digital.
(8 )( )The value of contracted revenue that has yet to be recognised.
Enquiries
TPXimpact Via Alma PR
Neal Gandhi (CEO)
Oliver Rigby (CFO)
Stifel Nicolaus Europe Limited +44 (0)207 710 7600
(Nomad and Joint Broker)
Alex Price
Fred Walsh
Dowgate Capital Limited +44 (0)203 903 7715
(Joint Broker)
James Serjeant
Nicholas Chambers
Alma PR tpx@almapr.co.uk (mailto:tpx@almapr.co.uk)
(Financial PR) +44 (0)203 405 0209
Susie Hudson
Kieran Breheny
Matthew Young
About TPXimpact
TPXimpact exists to transform the organisations, services and systems that
underpin society and that drive business success. It applies strategic and
creative thinking, technology, innovative design and user-centred approaches
to bring about numerous improvements which together multiply the impact of
change. The Company works closely with its clients in agile, multidisciplinary
teams that span organisational design, technology, and digital experiences. It
shares a deep understanding of people and behaviours and a philosophy of
putting people and communities at the heart of every transformation.
The business is being increasingly recognised as a leading alternative digital
transformation provider to the UK public services sector, with c.75% of its
client base representing the public sector and c.26% representing the
commercial sector.
More information is available at www.tpximpact.com (http://www.tpximpact.com)
.
Chief Executive's review
I am pleased to report on another period of substantial growth for TPXimpact.
At our year-end results presentation in July 2021, we announced a set of new,
ambitious financial goals in our Commercial Vision for 2025. As part of this
vision we set out to achieve a run rate revenue of £200m (£150m public
sector, £50m commercial sector) by March 2025 and to deliver 10-15% organic
revenue growth per annum.
We have made excellent progress against these goals in the first half of FY22.
I'm particularly pleased with our organic like-for-like revenues, which were
up 21% on the prior period, to ahead of our updated guidance of 15%-20% for
the current financial year. For the six months to 30 September 2021, revenues
grew 77% to £37.5m and adjusted EBITDA increased 83% to £5.3m versus the
same period in the prior year, reflecting our operational progress alongside
the substantial acquisitive activity we have undertaken over the last year.
We signed £54m worth of new contracts during the period, up 116% on the prior
period and go into H2 with a sales backlog to March 2022 of £34.6m, up 98%
year-on-year. We have continued to increase the average size of contracts won,
reflecting the larger and more impactful projects our teams are now working
on.
As anticipated, our gross margins reduced slightly in the period from 35% in
H1 2021 to 31% in H1 2022. The margin movement reflects the very strong
organic growth during the period, which resulted in a greater proportion of
contractors used to meet the demand for our services as well as a growth in
our recurring revenue up from 23% in H1 2021 to 33% H1 2022, which is
typically sold at a lower gross margin but gives longer term revenue
visibility. As we complete the restructure and move to one business, we expect
margins to strengthen again in the mid-term as the balance of staff shifts
back towards full time employees.
Performance against growth strategy
Consolidation under TPXimpact
In September 2021, we launched our new single brand - TPXimpact - under which
all our Group businesses will come together, seeing the Company operate under
a single P&L structure with a single sales, account management and
back-office structure in the UK.
As part of this consolidation, we have already restructured our sales
organisation operation and made investments into our staff. The project has
started well and, post-period, our leadership teams are now in place to enable
first-class performance and support across all the areas in which we operate.
Whilst the move to one brand will incur some one-off exceptional costs, we are
confident in the longer term it will significantly benefit the Company,
enabling us to take on larger and more significant contracts as a result of
our combined capabilities and, ultimately, to deliver more meaningful change
in wider society.
Continued growth in key markets including healthcare
We have increased our reach in the UK public sector, which now accounts for
74% of revenue. In particular, healthcare has emerged as an exciting
opportunity for TPX and reflecting this we have greatly strengthened our reach
in this field through acquisition and key contract wins, including NHS Blood
and Transplant and NHS Business Services Authority, as well as NHS Digital and
NHSx, which are soon to become part of NHS England.
With a view to continuing to grow in this vertical we have taken steps to
strengthen our advisory team in the period with the appointment of Noel Gordon
as a Senior Advisor to the Company in July 2021. Noel has a wealth of
experience across public healthcare having formerly been a non-exec board
member at NHS England and Chair of NHS Digital and has already helped secure
our position as a powerful player in these industries.
Alongside healthcare, we have made significant strides in other sectors
including utilities and the pharmaceutical industry, with the Company having
previously announced on 15 September 2021 a significant win in the utilities
sector representing a value of up to £10m over five years.
Acquisition of Nudge Digital, expanding vertical reach
During the period, the Company completed the acquisition of Bristol-based
digital services agency Nudge Digital ("Nudge") for a total consideration of
£5m. Nudge enhances the Company's reach into a number of key markets,
including healthcare, pharmaceuticals and local government and brought a
further 20 full-time employees into the business.
Significantly, this acquisition was structured to reduce the dilution of
shares, removing earn-outs to ensure fast and seamless integration into the
wider Company. We intend to maintain this acquisition structure going forward
wherever possible.
Our acquisition pipeline for profitable, cash-generative companies remains
strong, and we are in particular examining opportunities with a focus on data.
We are also exploring possible targets in regional hubs in the UK.
Building out our team
Our pipeline of new talent is strong, and we aim to create 500 new jobs by
2025. In H1 we have hired 103 new starters on top of those brought in via
acquisition. Our business has always been focused on building a group of
experts in digital transformation, who are innovative, purpose driven and want
to make real change. The fact we have been able to hire at this rapid pace
through a period of well-reported recruitment challenges in technology is
testament to what TPX can offer potential staff. In addition, our commitment
to delivering impactful work, alongside our strong ESG stance and ambition to
become B-Corp certified, allows us to attract high quality staff eager to work
to help transform public services.
We remain committed to investing in our staff through various channels.
Employee wellbeing, for example, is a central value for TPXimpact and we are
proud to provide free access to an Employee Assistance Programme (EAP) for all
UK employees, enabling confidential support for our people should problems
arise in their work life, home life, personal wellbeing or general health.
Investments for growth
On 23 September 2021, the Company launched the new brand TPXimpact. Over the
remainder of the financial year, existing brands will be retired and the
Company will move to a single, integrated UK P&L to allow us to better
address the market opportunities ahead of us. Post-period end, all UK staff
have been transferred to a single UK legal entity and a new extended
management team has been appointed from various companies across the Group.
Alongside this restructuring, the Company is also putting into place new
finance, HR, CRM and PSA systems, all designed to create greater efficiencies
as we centralise operations. These investments are ongoing, and we expect to
see these completed in FY 2023.
GreenShoot Labs
Over the last 12 months or so, the Company has been investing in GreenShoot
Labs to create a new Conversational AI SaaS product. This was launched in
August 2021. The product, called OpenDialog, is positioned in a market growing
at a CAGR of 23%* and expected to be worth as much as $25bn by 2028.
OpenDialog is showing early signs of success with numerous globally
significant organisations showing interest. However, in order to maximise the
opportunities ahead, the Company expects to spin out OpenDialog into a new
company over the next 12 months so that it can attract the level of finance it
requires in order to fulfil its potential and become a significant enterprise
software company. TPXimpact aims to retain a minority holding in this new
company as it is spun out with shareholders participating in its future
success through that holding.
More information available at: https://opendialog.ai/ (https://opendialog.ai/)
*Marketwatch.com, October 21, 2021
Our purpose in action (ESG)
We continue to work towards B-Corp certification, something we are confident
of achieving but will only become possible once we become a single legal
entity in the UK. Therefore, we have set ourselves the goal of achieving
B-Corp certified by no later than March 2023. We also achieved our Social
Value Quality Mark Level 1 and were shortlisted for several ESG-focussed
awards, recently winning the IR Society Award for best ESG Communications.
People
TPXimpact is committed to enacting real, impactful change and championing
diversity through action striving to both reflect the diverse communities the
Company serves and to be accessible to people from all backgrounds. Key
progress in the first half included the launch of our Employee Resource
Groups, as well as the launch of our board mentoring programme, which is
focused on connecting diverse future talent within the group with a PLC board
mentor.
Planet
Notable progress against our environmental aims in the period has included the
signing of two new leases, both of which are 100% powered by renewables and a
number of employees having switched to electric cars through our Electric
Vehicle Leasing scheme.
We remain committed to net zero. We:
● are carbon neutral;
● have ambitious reduction targets in place;
● will have fulfilled our commitment to paying back the entirety of
our historic emissions by March 2023;
and
● are working to get our reduction plan accredited by Science Based
Targets Initiative (SBTI)
Communities
TPX has undertaken several community projects in the period including
sponsoring our second Arkwright Scholar, hosting a Future Leaders programme
for black entrepreneurs and launching a £100,000 community action grant fund.
Market update
It is evident that the UK public sector has made an irrevocable shift towards
digital transformation services with a September 2021 report by TechMarketView
predicting that the UK public sector software and IT services (SITS) market
will be worth approximately £14.3bn by 2024, up from £12.9bn in 2020.
Within this substantial market growth, government spending in healthcare, a
key market for the Company, is expected to grow strongly. The recent October
2021 spending review also committed to increased government spending in
healthcare, totalling £11.2bn over three years. Within this, around £2.1bn
is expected to be invested in IT, technology and digitising the NHS,
supporting the Company's growth ambitions in this sector.
TPX is well-positioned to displace existing providers in the SITS sector.
TechMarketView outlines the proportion of software & services spending on
new technologies is also expected to grow from 31% in 2019 up to 57% in 2024,
with spending on new software & services expected to outweigh heritage by
2023. This is where our real market opportunity lies.
Outlook and current trading
Following a record £54m of new contracts signed in H1 (H1 2021: £25m), we go
into H2 with a confirmed backlog to be recognised in the period of £34.6m.
Combined with the £37.5m revenues achieved in H1, we can confidently state
that we will meet recently upgraded market expectations of revenue for the
full year in excess of £77m accompanied by Adjusted EBITDA margin expansion.
It is clear that hybrid ways of working are here to stay. Consequently, our
recruitment process is now open to candidates from across the UK whereas
pre-pandemic, it would have focused on candidates that were primarily able to
be located in our London offices. This presents us with an opportunity to
attract the best talent nationwide, rather than just those within a commutable
distance to London. Further, since the way we service our public sector
clients has never been predicated on hiring staff at lower salary levels
outside of London, we do not anticipate this 'levelling-up' change being
experienced by other businesses to have any adverse impact on our margins.
Our primary market continues to grow at pace with the public sector's ongoing
transition to modern technologies and the associated change remaining a decade
long opportunity. Public sector buyers are also beginning to recognise the
value that mid-market organisations can offer compared to their traditional
suppliers and it is pleasing to note that they now see TPXimpact as a scaled,
mid-market supplier and are awarding us ever larger contracts as a
consequence.
Finally, through consolidation to a single brand, we expect to build on our
organic growth, alongside identifying further complementary acquisitions to
integrate into the Company. There are a number of key initiatives underway
that will drive our success as a single company, including changing our
contractor to full-time employee ratio, centralising our people function and
creating a central sales and account management team.
We are excited for what the future holds and look forward to continuing to
build value for all our stakeholders.
Neal Gandhi
CEO
Financial review
The 6 month period ending 30 September 2021 saw another step forward for
TPXimpact with significant year on year revenue and EBITDA growth. TPXimpact
has reported revenues of £37.5m, up 77% from £21.2m in H1 2021. Most
pleasingly we have seen continued like-for-like organic revenue growth north
of our 10-15% commercial vision at 21%. The growth has largely been driven
by the Group's ability to win and deliver larger scale programmes of work as a
result of its wider service offering and leading case studies. In the period
we saw the Group sign five deals each with a total value of £3m or more (H1
2021: 2). Revenue also benefited from the half year impact of FY2021
acquisitions and the acquisitions of Nudge in June 2021. The business
continued its focus on public services with 74% of revenue in the sector (H1
2021: 70%).
We have seen a strong rise in our recurring revenue with the acquisition of
Keep IT Simple Ltd. (KITS) in the prior period. Recurring revenue accounted
for 33% of revenue in the period, up from 23% in H1 2021. We continued to see
a large amount of repeat business from customers, with 76% of customers billed
in H1 2022 also billed in FY 2021, FY 2020 and/or FY 2019. Our backlog was
£34.6m at 30 September to be delivered in H2 2022 (H1 2021: £17.5m).
Gross Margins were at 31% against 35% in the prior year. As previously noted
the reduction has been driven by our strong growth in revenue requiring a
greater proportion of contractor delivery together with a change in the makeup
of the delivery of the services that the Group provides, with growth in our
managed services and recurring business from 23% to 33% of revenues. Our
ambition is to increase our gross margin over time through centralised
recruitment, a reduction in our reliance on contractors, investment into an
academy and use of our nearshore office where appropriate.
Adjusted EBITDA was £5.3m up from £2.9m in H1 2021 representing an increase
of 83%. Statutory EBITDA was £3.8m, up from a £0.1m loss in H1 2021.
Adjusted EBITDA margin was 14.1% up from 13.7% in the prior year. This
increase in margin is very positive and in spite of the fact that we have seen
a year on year increase in operating overhead linked to travel and
entertainment following the easing of Covid restrictions.
We are pleased to report our first statutory profit after tax of £0.3m (H1
2021: £1.7m loss) and EPS of 0.3p per share (H1 2021: loss 2.9p) although the
Directors continue to believe that an 'adjusted profit before tax' and an
'adjusted EPS' measure is more representative of the underlying performance.
To arrive at adjusted results, adjustments made include acquisition expenses,
amortisation related to acquired intangibles and share-based payments and the
impact of fair value adjustments along with the corresponding tax impact of
the adjustments. In addition we have invested into OpenDialog, our
conversational design product. Investment has been made with a view to
spinning the business out of TPXimpact within the next 12 months and we have
therefore excluded costs relating to it totalling £0.3m.
The fair value adjustment reflects stronger than forecast performance of the
Group companies and amortisation is a charge that does not reflect the
underlying performance or prospects of the Group.
The following table summarises the adjustments:
6 months to 30 Sep 2021 6 months to 30 Sep 2020 Year ended 31 Mar 2021
£'000s £'000s £'000s
Unaudited Unaudited Audited
Profit / (loss) before tax 559 (1,571) (1,845)
Amortisation of intangible assets relating to acquisitions 2,486 970 2,458
Loss from fair value movement in contingent consideration 668 2,520 4,260
Share-based Payments 192 150 294
Costs relating to acquisition, restructuring and investment in Open Dialog 430 263 746
Investment in Open Dialog 258 - -
Adjusted profit before tax 4,593 2,332 5,913
Tax (including impact of amortisation and costs relating to acquisition and (180) (260) (898)
restructuring adjustments)
Adjusted profit after tax 4,413 2,072 5,015
As a result of the acquisitive nature of the Group and its use of shares as
consideration, the Directors believe that an adjusted share count for the
purposes of calculating earnings per share is required. As such the
Directors calculate an adjusted diluted share number by taking the weighted
average basic shares and including the maximum shares to be issued in respect
of contingent consideration to be paid based on performance measures met in
the period, together with the maximum share options outstanding. The following
table summarises the adjustments:
6 months to 30 Sep 2021 6 months to 30 Sep 2020 Year ended 31 Mar 2021
Weighted average basic shares ('000) 83,655 56,935 63,784
Shares relating to future contingent consideration ('000) 7,212 18,667 13,728
Shares relating to share-based payments ('000) 3,551 4,777 4,436
Adjusted diluted shares ('000) 94,418 80,379 81,948
Adjusted diluted earnings per share (pence) 4.7 2.6 6.1
Based on these alternative non-GAAP measures the Group achieved adjusted
profit after tax of £4.4m (H1 2021: £2.1m) resulting in adjusted diluted
earnings per share of 4.7p (H1 2021: 2.6p).
Note that based on the share price of £2.65 as at 30 November 2021 the total
number of shares relating to future contingent consideration would be 2,153k
resulting in an EPS of 4.9p.
Cash Flow and cash conversion
Cash at the end of the period was £10.4m but this included £2.1m that was
payable to the shareholders of Nudge post period end. Excluding this our
true cash balance was £8.4m with adjusted net debt of £4.7m (which excludes
lease liabilities and the£2.1m cash payable to Nudge). This strong adjusted
net debt position well below our current maximum target of 1x EBITDA provides
us with significant access to cash for further acquisitions.
Net cash generated from operations before tax and including lease payments was
£4.5m. Cash conversion, calculated by reference to the adjusted profit before
tax but after deducting costs relating to acquisition and restructuring was
118%.
Adjusted net debt has fallen in the period from £7.3m as at 31 March 2021 to
£4.7m despite the acquisition of Nudge in the period. The cash consideration
for the acquisitions was £1.8m funded from the Group's cash reserves
Balance Sheet
Total deferred consideration at 30 September 2021 was £8.4m (31 March 2021
was £12.2m). We continue to note that this is a liability that will be
satisfied through the issue of shares and not through cash. Once this is
removed, the Group's current ratio at the period end was 1.9 (H1 2021: 1.7)
providing solid liquidity.
Dividend
A dividend of 0.3 pence per share has been declared for H1 2022 (H1 2021: 0.2
pence). This will be paid on 28 January 2022 to shareholders on the register
at the close of business on 21 January 2022.
Oliver Rigby
Chief Financial Officer
Consolidated statement of comprehensive income
6 months to 30 September 2021 12 months to 31 March 2021
6 months to 30 September 2020
Unaudited Unaudited Audited
Notes £'000 £'000 £'000
Revenue 37,495 21,175 51,097
Cost of sales (25,866) (13,729) (34,968)
Gross profit 11,629 7,446 16,129
Administrative expenses (10,729) (8,885) (18,085)
Other income 52 3 413
Operating profit / (loss) 952 (1,436) (1,543)
Finance income 14 2 1
Finance costs (407) (137) (303)
Net finance costs (393) (135) (302)
Profit / (loss) before tax 559 (1,571) (1,845)
Taxation (96) (384)
(281)
Profit / (loss) for the period 278 (1,667) (2,229)
Other comprehensive income
Exchange differences on translation of foreign operations (82) (72) 68
Total comprehensive income / (loss) for the period 196 (1,739) (2,161)
Earning / (Loss) per share
Basic 7 0.33p (2.93)p (3.5)p
Fully diluted 7 0.33p (2.93)p (3.5)p
Consolidated statement of financial position
30 Sept 2021 30 Sept 2020 31 Mar 2021
(Restated)
Unaudited Unaudited Audited
£'000 £'000 £'000
Non-current assets
Goodwill 56,616 42,414 53,323
Intangible assets 28,412 10,525 29,370
Property, plant and equipment 292 288 292
Right-of-use assets 263 743 445
Deferred tax asset 30 - 15
Total non-current assets 85,613 53,970 83,445
Current assets
Trade and other receivables 11,135 9,142 14,014
Contract asset 2,832 1,312 1,144
Other taxes and social security costs - - 137
Cash and cash equivalents 10,413 5,909 5,734
Total current assets 24,380 16,363 21,029
Total assets 109,993 70,333 104,474
Current liabilities
Trade and other payables 6,218 4,492 5,681
Other taxes and social security costs 5,016 4,068 5,326
Lease liability 271 474 336
Deferred and contingent consideration 7,775 8,643 8,478
Contract liability 1,620 1,102 1,941
Borrowings 53 90 55
Total current liabilities 20,953 18,869 21,817
Non-current liabilities
Deferred tax liabilities 4,643 1,860 5,133
Borrowings 13,000 7,000 13,000
Provisions 76 27 76
Lease liability 77 222 53
Deferred and contingent consideration 630 4,829 3,741
Total non-current liabilities 18,426 13,938 22,003
Total liabilities 39,379 32,807 43,820
Net assets 70,614 37,526 60,654
EQUITY
Issued share capital 848 673 804
Share premium 6,253 5,673 5,691
Merger reserve 70,231 37,531 60,926
Other reserves 402 517 801
Retained earnings (7,120) (6,868) (7,568)
Total equity 70,614 37,526 60,654
Consolidated statement of changes in equity
Share capital Share premium Merger Reserve Capital redemption reserve Foreign exchange reserve Share option reserve Retained earnings Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 April 2019 (Restated) 423 5,673 15,106 5 (38) 239 (2,157) 19,251
Profit for the period - - - - - - 328 328
Exchange difference on translation of foreign operations - - - - 36 - - 36
Transactions with owners
Shares issued 66 - 5,720 - - - - 5,786
Share based payments - - - - - 9 - 9
Balance at 30 September 2019 (Restated) 489 5,673 20,826 5 (2) 248 (1,829) 25,410
Loss for the period - - - - - - (3,372) (3,372)
Exchange difference on translation of foreign operations - - - - 68 - - 68
Transactions with owners
Shares issued 62 - 4,978 - - - - 5,040
Share based payments - - - - - 120 - 120
Balance at 31 March 2020 (Restated) 551 5,673 25,804 5 66 368 (5,201) 27,266
Loss for the period - - - - - - (1,667) (1,667)
Exchange difference on translation of foreign operations - - - - (72) - - (72)
Transactions with owners
Shares issued 122 - 11,727 - - - - 11,849
Share based payments - - - - - 150 - 150
Balance at 30 September 2020 (Restated) 673 5,673 37,531 5 (6) 518 (6,868) 37,526
Loss for the period - - - - - - (562) (562)
Exchange difference on translation of foreign operations - - - - 140 - - 140
Transactions with owners
Shares issued 131 18 23,395 - - - - 23,544
Dividend paid - - - - - - (138) (138)
Share based payments - - - - - 144 - 144
Balance at 31 March 2021 804 5,691 60,926 5 134 662 (7,568) 60,654
Profit for the period - - - - - 278 278
Exchange difference on translation of foreign operations - - - (82) - - (82)
Transactions with owners
Shares issued 44 562 9,305 - - - - 9,911
Dividend paid - - - - - - (339) (339)
Share based payments - - - - - 192 - 192
Share options exercised - - - - - (509) 509 -
Balance at 30 September 2021 848 6,253 70,231 5 52 345 (7,120) 70,614
Consolidated Statement of cash flow
6 months to 30 September 2021 6 months to 30 September 2020 12 months to 31 March 2021
Unaudited Unaudited Audited
£'000 £'000 £'000
Cash flows from operating activities:
Profit / (loss) before tax 559 (1,571) (1,845)
Depreciation of property, plant and equipment 295 383 835
Amortisation 2,553 995 2,509
Share-based payments 192 150 294
Foreign exchange losses/(gains) (27) (72) (5)
Finance expense 407 135 303
Finance income (14) - (1)
Movement in fair value consideration 688 2,520 4,260
4,653 2,540 6,350
Working capital adjustments
Increase in trade and other receivables 2,262 1,243 (1,032)
Decrease/(increase) in trade and other payables (1,959) (269) 483
4,956 3,514 5,801
Tax received / (paid) 87 (341) (159)
Net cash generated from operating activities 5,043 3,173 5,642
Cash flows from investing activities:
Net cash received / (paid) on acquisition of subsidiaries 658 (3,122) (10,813)
Deferred consideration paid (467) (160) (259)
Purchase of property, plant and equipment (105) (44) (137)
Addition of intangible assets (183) (106) (321)
Interest received 14 - 1
Net cash used in investing activities (83) (3,432) (11,529)
Net cash used from financing activities
Proceeds from issue of new shares on the exercise of share options 511 - -
Repayment of borrowings (7) (7) -
New borrowings - 2,000 8,000
-
Payment of lease liabilities (41) (302) (610)
Dividend paid (339) - (138)
Interest paid (407) (137) (331)
Net cash (used) in /generated from financing activities (283) 1,554 6,921
Net (decrease) / increase in cash and cash equivalents 4,677 1,295 1,034
Cash and cash equivalents at beginning of the period 5,734 4,614 4,614
Effect of exchange rate fluctuations on cash held 2 - 86
Cash and cash equivalents at end of the period 10,413 5,909 5,734
1. General information
TPXimpact Holdings Plc (formerly The Panoply Holdings plc) is the Group's
ultimate parent company. It is a public limited company incorporated and
domiciled in England and Wales with registered office number 10533096. The
Company's shares are publicly traded on the AIM Market of the London Stock
Exchange.
The address of the registered office is 7 Savoy Court, London, England, WC2R
0EX. The principal activity of the Group is the provision of digitally
native technology services to clients within the commercial, government
and non-government organisation ("NGO") sectors.
The interim financial information is unaudited.
2. Basis of preparation
The Group has not applied IAS 34 Interim Financial Reporting, which is not
mandatory for UK AIM listed companies, in the preparation of this half-yearly
report.
This consolidated interim financial information for the six months ended 30
September 2021 does not, therefore, comply with all the requirements of IAS 34
Interim financial reporting. The consolidated interim financial information
should be read in conjunction with the annual financial statements of
TPXimpact Holdings plc (formerlyThe Panoply Holdings Plc) for the year ended
31 March 2021, which have been prepared in accordance with and in conformity
with UK adopted International Financial Reporting Standards ("IFRS"). Last
year's accounts was prepared under IFRSin conformity with the Companies Act
2006 and the AIM rules for Companies.
This consolidated interim financial information does not comprise statutory
accounts within the meaning of section 434 of the Companies Act 2006.
Statutory accounts for the year ended 31 March 2021 were approved by the Board
of directors on 12 August 2021 and delivered to the Registrar of Companies.
The report of the auditors on those accounts was unqualified and did not
contain any statement under sections 498 (2) or (3) of the Companies Act 2006.
The interim financial statements are presented in pound sterling (GBP), which
is the functional currency of the parent company.
The interim financial statements present comparative periods 6 months to 30
September 2020 and 12 months to 31 March 2021.
3. Basis of consolidation
These interim consolidated financial statements consolidate the financial
statements of the Company and its subsidiary undertakings as at 30 September
2021. Subsidiaries are fully consolidated from the date of acquisition, being
the date on which the Group obtains control, and continue to be consolidated
until the date that such control may cease. The financial statements of the
subsidiaries are prepared for the same reporting period as the parent company,
using consistent accounting policies.
4. Accounting policies
The accounting policies used in the preparation of the interim consolidated
financial information for the six months ended 30 September 2021 are in
accordance with the recognition and measurement criteria of IFRS and are
consistent with those which were adopted in the annual statutory financial
statements for the year ended 31 March 2021.
For 30 September 2020, the Group restated the share premium account, where
amounts should have been recorded under a merger reserve as required by merger
relief under Companies Act, Section 612.
5. Business combinations
i. Nudge Digital Limited
On 30 June 2021, the Group acquired 100% of the issued share capital and
voting rights of Nudge Digital Limited (Nudge), a company based in the United
Kingdom. Nudge is a digital agency specialising in user research, user
experience, design and build for healthcare, big pharma, highly regulated
industries and Government.
The Group has performed an initial review of Nudge's assets and liabilities
which have been included in this set of interim statements. The Group is
currently obtaining the information necessary to finalise its valuation,
therefore the finalised valuation will be reported within its next published
financial statements.
The preliminary fair values of the identifiable intangible assets have been
determined provisionally as £1.4m and goodwill of £3.3m. The goodwill that
arose on the combination can be attributed to the value of the workforce of
Nudge which cannot be recognised as an intangible asset. Goodwill has been
provisionally allocated to a cash-generating unit at 30 September 2021 and is
attributable to the Consulting segment. The amortisation of the goodwill that
arose from this business combination is not expected to be deductible for tax
purposes.
From the date of the acquisition to 30 September 2021, Nudge contributed
£1.3m and £0.7m to the Group's revenues and adjusted EBITDA, respectively.
Had the acquisition occurred on 1 April 2021, the Group's revenue for the
period to 30 September 2021 would have been £2.2m higher and the Group's
adjusted EBITDA for the period would have been £1.0m higher.
6. Borrowings
The Group entered into a three year revolving credit facility ("RCF") with
HSBC UK Bank Plc ("HSBC") on 11 June 2019, initially for £5m. The RCF was
extended in September 2020 to £7m and again in February 2021 to £20m. Of
which £13m has been drawn down and £7m undrawn. Within the £20m facility,
the Group can draw up to £5m for working capital purposes with the remainder
set aside for acquisitions.
7. Earnings per share
30 September 2021 30 September 2020 31 March 2021
£'000 £'000 £'000
Profit / (loss) attributable to ordinary shareholders 278 (1,667) (2,229)
Basic earnings per share Number Number Number
Weighted average number of ordinary shares in issue 83,654,504 56,935,288 63,783,475
Basic earnings / (loss) per share 0.33p (2.93)p (3.50)p
Diluted earnings per share Number Number Number
Weighted average number of ordinary shares in issue used in basic earnings per 83,654,504 56,935,288 63,783,475
share calculation
Dilutive shares 1,863,157 - -
Diluted earnings / (loss) per share 0.33p (2.93)p (3.50)p
8. Reconciliation to adjusted EBITDA
6 months to 30 September 2021 6 months to 30 September 2020 12 months to 31 March 2021
Unaudited Unaudited Audited
£'000 £'000 £'000
Adjusted EBITDA 5,348 2,875 7,101
Amortisation of intangible assets (2,553) (995) (2,509)
Depreciation (295) (383) (835)
Gain/(Loss) on fair value movement contingent consideration (668) (2,520) (4,260)
Share-based payments (192) (150) (294)
Costs directly attributable to the business combination (350) (263) (496)
Costs directly attributable to business restructuring (80) - (250)
Costs directly attributable to investment in Open Dialog (258) - -
Operating profit / (loss) 952 (1,436) (1,543)
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