Company Announcements

Half-year Report

Source: RNS
RNS Number : 4951Z
Big Technologies PLC
15 September 2022
 

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

 

Big Technologies PLC
("the Company" or "the Group")

 

Unaudited interim results for the six months ended 30 June 2022

 

Big Technologies PLC (AIM: BIG), the leading, integrated technology platform for the remote monitoring of individuals, is pleased to announce its interim results for the six-month period to 30 June 2022 (the "period").

 

H1 2022

£m

H1 2021

£m

FY 2021

£m





Revenue

22.9

18.0

37.6

Gross margin (%)

71.4%

71.3%

70.8%

Statutory operating profit

8.8

8.0

13.8

Adjusted operating profit1

12.1

8.9

17.9

Adjusted EBITDA2

13.7

10.2

20.6

Adjusted EBITDA2 margin (%)

60.1%

56.7%

54.7%

Adjusted cash generated from operating activities3

 

11.3

 

9.1

 

18.2

Net cash

56.9

23.8

48.0






Pence

Pence

Pence

Adjusted diluted earnings per share4

3.7p

2.8p

5.5p

Adjusted basic earnings per share4

3.9p

2.8p

5.6p

Statutory diluted earnings per share

3.0p

2.4p

4.4p

Statutory basic earnings per share

3.1p

2.5p

4.5p









1Before share-based payments expense, amortisation of acquired intangibles, IPO preparation costs and national insurance on warrant exercise.2Before share-based payments expense, IPO preparation costs and national insurance on warrant exercise. 3Before IPO preparation costs and national insurance on warrant exercise. 4Before share-based payments expense, amortisation of acquired intangibles, IPO preparation costs, national insurance on warrant exercise and the tax effect of these adjusting items.

 

A reconciliation to statutory measures is presented in the notes to the unaudited interim results.

 

 

Financial performance

 

·      Revenue increased by 27% in H1 2022 versus H1 2021 as a result of new contract wins and an increase in business from existing customers;

 

·      Monthly Recurring Revenue of £4.3m, an increase of 43% versus June 2021;

 

·   Gross margin stable at 71.4% in H1 2022 versus 71.3% in H1 2021. The Group's scalable SaaS-like operating model means that increases to labour, freight and manufacturing costs have been offset by the additional profit earned on incremental revenue;

 

·     Adjusted EBITDA margins of 60.1% in H1 2022 versus 56.7% in H1 2021 due to  increased scale and favourable foreign-exchange movements;

 

·      Adjusted operating profit increased by 36% in H1 2022 versus H1 2021;

 

·   Adjusted cash generated from operating activities of £11.3m, which includes an investment in working capital and long lead-time inventory to support future growth. Significant net cash balance of £56.9m at 30 June 2022, provides support for future growth objectives.

 

 

Operational performance and strategy

 

·    Continued growth in the number of electronic monitoring devices deployed with customers across the world;

 

·      Successful implementation of new contracts drives growth in Asia-Pacific and Americas;

 

·    Successful navigation of continuing global supply-side challenges to ensure no delays in deliveries of products to customers;

 

 

Current trading and outlook

 

·      Active engagement continues with a number of potential new customers, which are expected to contribute to revenue from 2023;

 

·      New contract win using our periodic bio-metric detection device, with first revenue expected in November 2022;

 

·     Based on current Monthly Recurring Revenue (MRR), the Board expects the Group to deliver a full-year revenue of at least £48 million with an adjusted EBITDA margin of in excess of 58%,  which is ahead of current market expectations(1). Our long-term customer relationships and focus on high levels of customer service, allows the Board to remain confident in the longer-term prospects for growth.

 

 

(1)  Latest company compiled view of market expectations show adjusted EBITDA of £25.0m to £26.6m (stated before share based payments).

 

 

Commenting on the results, Sara Murray OBE, Chief Executive Officer said:

 

"I am very pleased with our continued growth in revenue and profit during the first half of the financial year, which clearly illustrates the progress we are making against our strategic objectives. The successful implementation of a significant national monitoring contract in New Zealand received positive feedback from the end customer and diversified our global footprint and enhanced our strong reputation in the criminal justice sector. Against a backdrop of external challenges, we have continued to support new and existing customers with our technologies, helping them to make societies safer. Market drivers remain strong and we are confident of delivering further growth in the second half of 2022 and beyond."

 

For further information please contact:

Big Technologies

+44 (0) 19 2360 1910

Sara Murray (Chief Executive Officer)

Daren Morris (Chief Financial Officer)







Zeus (Nominated Adviser and Sole Broker)

+44 (0) 20 3829 5000

Jamie Peel / Dan Bate / Kieran Russell (Investment Banking)
Benjamin Robertson (Equity Capital Markets)


 

 

The person responsible for arranging the release of this information is Daren Morris, Chief Financial Officer and Company Secretary.

 

 

Half Year Review

 

Overview

 

The Group has delivered another strong performance of double-digit revenue and profit growth against a backdrop of global macroeconomic conditions that remain challenging. The Group continued to manage supply chain disruptions through careful long-term planning and by additional investments in long lead-time inventory to ensure it can continue to support both new and existing customers in the second half of 2022 and beyond.

 

Financial Performance

 

Revenue

 

Revenue in the first half of 2022 grew by 27% to £22.9m (H1 2021: £18.0m), driven by new contract wins in the Asia-Pacific and Americas regions and an increase in revenues earned from existing customers. The majority of revenues continue to be derived from customers in the criminal justice sector, which accounts for more than 98% of reported revenue (H1 2021: 97%).

 

Revenue growth was primarily driven by the Asia-Pacific and America regions, which grew at 44% and 12% respectively. The Group's eight-year national monitoring contract with the New Zealand Department of Corrections, signed in 2021, started to deliver revenue in the first quarter and is now close to achieving its full run-rate. The group has received positive feedback from the customer on our partnership approach and they are on-track to generate significant cost savings as a result of the introduction of the Group's technology solution. There were also new contract wins during the period in the Americas region.

 

On a constant currency basis, revenue grew by 26% in the first half of 2022. The Group benefited from a strengthening US dollar versus the same period last year.

 

MRR, which is the exit run rate of monthly recurring revenue in the last month of the reporting period, was £4.3m (H1 2021: £3.0m), an increase of 43%. The  MRR figure gives the Group visibility over its future revenues derived from its base of long-term contracts.

 

Profitability

 

Gross margins were steady at 71.4% (H1 2021: 71.3%). Additional profits earned on incremental  revenue from the Group's SaaS-like operating model, were able to offset increases in labour, freight and manufacturing costs caused by supply chain inefficiencies and inflationary pressures in the labour market.

 

Adjustments made to the interim results (before tax) totalled £3.3m (H1 2021: £0.9m) and are related to amortisation of acquired intangible assets and share-based payments. See note 3 for further details.

 

Adjusted operating profit of £12.1m increased 36% against H1 2021, with an increase in adjusted operating margin to 52.8% (H1 2021: 49.4%). The increase in adjusted operating margin was driven by the Group's continuing ability to grow revenues organically without significant increases to adjusted administrative expenditures and a positive contribution from favourable foreign currency movements in the first half of 2022. Part of this gain was due to a significant move in Sterling versus the US Dollar which caused our US Dollar denominated cash deposits to be revalued resulting in a one-off gain which is not expected to repeat in the second half of the year.

 

Adjusted administrative expenses (defined as administrative expenses before share-based payments and IPO preparation costs) increased from £4.2m in H1 2021 to £4.5m in in H1 2022 reflecting additional PLC costs following the IPO. Adjusted administrative expenses include the benefit of a one-off foreign currency gain on the revaluation of US dollar denominated cash balances of £0.9m.

 

Adjusted EBITDA (quoted before share-based payments) of £13.7m increased by 34% versus H1 2021 with adjusted EBITDA margin increasing by 340bps to 60.1% (H1 2021: 56.7%).

 

Adjusted diluted earnings per share, which excludes the adjusting items outlined in note 3 and includes the dilutive impact of shares potentially issuable in the future, was 3.7p (H1 2021: 2.8p), an increase of 32%, reflecting the increase in adjusted earnings.

   

Cash flow

 

The Group's liquidity and net cash position increased to £56.9m at 30 June 2022. Operating activities, underpinned by the strong trading performance, generated adjusted cash inflows of £11.3m (H1 2021: £9.1m) with cash conversion (defined as adjusted operating cash flow divided by adjusted EBITDA of 82% (H1 2021: 89%). The Group increased levels of long lead-time inventory in the second quarter to protect against continuing global supply chain disruption. Increases in the Group's trade and other receivables are linked to the continuing revenue growth and timing of cash collection from customers at the period end.

 

Net cash utilised in investing activities of £2.4m (H1 2021: £1.1m) reflects the continued increase in the

number of electronic monitoring devices, which are manufactured in-house and leased to the Group's customers. The Group continued to invest in the research and development of new products and technologies and has continued development on new products including MiniID and SecureBand.

 

Russia/Ukraine

 

At this stage the longer-term consequences for the global economy of the tragic events in Ukraine are still uncertain. Whilst the Group has no operations in this part of the world and no direct exposure to customers and suppliers in the region, we continue to monitor the situation carefully and in particular any effects on wider supply chains and energy prices. We do not anticipate any adverse effect on our business as a result of increased energy prices. The Group has also reviewed the current sanctions regime relating to Russia and Ukraine and can confirm the Group has no exposure to any sanctioned entities or individuals.

 

Operational performance and strategy

 

In the first half of 2022, the Group continued to deliver its hardware and software solutions to customers and saw ongoing growth in the number of electronic monitoring devices deployed across the world, increasing its international footprint and global presence in the criminal justice sector.

 

The Group continued to support both new and existing customers during the period and saw a number of important customer renewals and contract wins, which will enhance the future visibility of the Group's revenue stream.

 

The Group successfully implemented an eight-year national monitoring contract with the New Zealand Department of Corrections, won from a competitor in 2021, which started to deliver revenue in the first quarter of 2022.

 

Careful long-term planning with suppliers ensured minimal impact in terms of delays of products to customers as a result of continuing global supply-side challenges. The Group invested in long lead-time inventory in the period to ensure it can continue to support new and existing customers in the second half of 2022 and beyond.

 

The Group is committed to ensuring that its products maintain their competitive advantage in the criminal justice sector and continues to invest in research and development to support its future product roadmap. This roadmap includes developing substance monitoring technologies and combining these with existing location solutions to provide an integrated monitoring device for customers, an industry-first in the sector. The Group has launched our periodic bio-metric detection device and expect revenue from a major customer from November 2022 onwards.

 

The Directors continue to pursue an active pipeline of organic growth opportunities with governmental customers across Europe and the rest of the world.

 

Alternative performance measures

 

In the analysis of the Group's financial performance and position, operating results and cash flows, alternative performance measures are presented to provide readers with additional information. The principal measures presented are adjusted measures of earnings including adjusted operating profit, adjusted EBITDA and adjusted earnings per share. See note 3 for further details.

 

Research and development

 

The Group continues to invest in research and development activities in relation to new products. Development costs of £0.5m (H1 2021: £0.5m) have been capitalised. Other research and development costs, all of which have been written off to the income statement as incurred totalled £0.7m (H1 2021: £0.8m).

Foreign currency exposure

 

The Group faces currency exposure on its foreign currency transactions and translation exposure in relation to its overseas subsidiaries. The Group maintains a natural hedge to transactional exposure by matching the cash inflows and outflows in the respective currencies wherever possible.

 

Foreign exchange translation has provided a tailwind for revenue and profit during the period, with the US dollar strengthening against pound sterling compared with the comparative period. The Group held a significant cash balance in US dollars at 31 December 2021, which has subsequently been exchanged to pound sterling at favourable exchange rates during the current period.

 

The Group's most material exposures are to US dollars, Australian dollars and New Zealand dollars. The sensitivity to a 10% weakening/strengthening of pound sterling against these currencies in aggregate (excluding amounts held on the balance sheet) equates to an annualised profit increase/decrease of circa £2.4m. The Group's forward exposure is currently unhedged.

 

Summary and outlook

 

The Group has delivered a strong financial and operational performance in the first half of the year. Based on current MRR, the Board expects the Group to deliver a full-year revenue of at least £48 million with an adjusted EBITDA margin of in excess of 58%, which is ahead of current market expectations(1).

 

Our long-term customer relationships and focus on high levels of customer service, allows the Board to remain confident in the longer-term prospects for growth.

 

 

(1)  Latest company compiled view of market expectations show adjusted EBITDA of £25.0 to £26.6 million (stated before share-based payments).

 

 

 

 

 

Sara Murray OBE                                          
Chief Executive Officer

15 September 2022

 

Daren Morris                                                 
Chief Financial Officer

15 September 2022

 



 

Unaudited condensed consolidated statement of comprehensive income

for the six months ended 30 June 2022

 

 

 


Unaudited six months ended 30 June 2022

 

£'000


Unaudited six months ended 30 June 2021

 

£'000


Year ended 31 December 2021

 

£'000


Note







 






Revenue

2

22,862


18,034


37,628

Cost of sales


(6,530)


(5,184)


(10,971)

Gross profit


16,332

 

12,850

 

26,657

Administrative expenses


(7,494)


(4,864)


(12,884)

Other operating income


1


-


1

Operating profit


8,839

 

7,986

 

13,774

Analysed as:


 

 

 

 

 

Adjusted EBITDA


13,742


10,222


20,567

Amortisation of acquired intangibles


(234)


(234)


(468)

Amortisation of development costs


(404)


(352)


(703)

Depreciation


(1,241)


(973)


(1,931)

IPO preparation costs


-


(578)


(1,192)

National insurance on warrant exercise


-


-


(1,076)

Share-based payments charge


(3,024)


(99)


(1,423)

Operating profit


8,839

 

7,986

 

13,774

Finance income


39


-


-

Finance expenses


(17)


(21)


(47)

Share of (loss)/profit of joint venture


(2)


(2)


(5)

Profit before taxation


8,859

 

7,963

 

13,722

Taxation

4

244


(1,076)


(934)

Profit for the period


9,103

 

6,887

 

12,788

 






Other comprehensive income:







Exchange differences on translation of foreign operations


 

264


 

42


 

27

Total comprehensive income for the period


 

9,367

 

 

6,929

 

 

12,815

 







Profit for the period attributable to:







Owners of the company


9,103


6,853


12,788

Non-controlling interest


-


34


-

 


9,103

 

6,887

 

12,788

 







Total comprehensive income for

the period attributable to:







Owners of the company


9,367


6,895


12,815

Non-controlling interest


-


34


-

 


9,367

 

6,929

 

12,815

 














Basic earnings per share (pence)

5

3.1p


2.5p


4.5p

Diluted earnings per share (pence)

5

3.0p


2.4p


4.4p


  

Unaudited condensed consolidated statement of financial position

as at 30 June 2022

 

 


Unaudited 30 June 2022

 

£'000


Unaudited 30 June 2021

 

£'000


31 December 2021

 

£'000


Note






Assets

 







 






Goodwill


13,359


13,359


13,359

Acquired and other intangible assets


6,039


6,229


6,142

Property, plant and equipment


3,026


1,928


2,265

Right-of-use assets


314


443


345

Interests in joint ventures


-


389


363

Deferred tax assets


2,079


790


1,039

Other receivables


1,702


1,629


1,612

Non-current assets


26,519

 

24,767

 

25,125








Inventories


5,862


2,324


3,079

Trade and other receivables


8,007


5,161


6,620

Cash and cash equivalents

6

57,170


24,233


48,317

Current assets


71,039

 

31,718

 

58,016








Total assets


97,558

 

56,485

 

83,141

 







Liabilities














Lease liabilities


205


197


195

Trade and other payables


8,812


5,463


6,875

Current liabilities


9,017

 

5,660

 

7,070








Lease liabilities


108


244


154

Deferred tax liabilities


498


-


501

Trade and other payables


879


1,635


1,185

Non-current liabilities


1,485

 

1,879

 

1,840








Total liabilities


10,502

 

7,539

 

8,910








Net assets


87,056

 

48,946

 

74,231

 







Equity







 







Share capital

7

2,902


2,742


2,885

Share premium


38,969


19,052


38,535

Other reserves


539


70


275

Retained earnings


44,646


26,742


32,536

Equity attributable to owners of the company


87,056

 

48,606

 

74,231

Non-controlling interest


-


340


-

Total equity


87,056

 

48,946

 

74,231

  

 

Unaudited condensed consolidated statement of changes in equity

for the six months ended 30 June 2022

 

 

Share capital

 

£'000

Share premium

 

£'000

Other reserves

 

£'000

Retained earnings

 

£'000

Total

owners' equity

£'000

Non-controlling interest

£'000

Total equity

 

 

£'000









Balance at 1 January 2021

 

27

 

21,767

 

28

 

18,335

 

40,157

 

306

 

40,463

 

Profit for the year

 

-

 

-

 

-

 

12,788

 

12,788

 

-

 

12,788

Other comprehensive income for the year

 

 

 

-

 

 

 

-

 

 

 

27

 

 

 

-

 

 

 

27

 

 

 

-

 

 

 

27

Total comprehensive income for the year

 

 

 

-

 

 

 

-

 

 

 

27

 

 

 

12,788

 

 

 

12,815

 

 

 

-

 

 

 

12,815









Share-based payments

 

-

 

-

 

-

 

1,413

 

1,413

 

-

 

1,413

Transactions with non-controlling interests

 

 

-

 

 

-

 

 

220

 

 

-

 

 

220

 

 

(306)

 

 

(86)

Issue of shares, net of share issue costs

 

 

143

 

 

19,483

 

 

-

 

 

-

 

 

19,626

 

 

-

 

 

19,626

Bonus issue of shares

 

2,715

 

(2,715)

 

-

 

-

 

-

 

-

 

-

Balance at 31 December 2021

 

2,885

 

38,535

 

275

 

32,536

 

74,231

 

-

 

74,231

 








Balance at 1 January 2021

 

27

 

21,767

 

28

 

18,335

 

40,157

 

306

 

40,463

Profit for the period

 

-

 

-

 

-

 

6,853

 

6,853

 

34

 

6,887

Other comprehensive income for the period

 

 

 

-

 

 

 

-

 

 

 

42

 

 

 

-

 

 

 

42

 

 

 

-

 

 

 

42

Total comprehensive income for the period

 

 

 

-

 

 

 

-

 

 

 

42

 

 

 

6,853

 

 

 

6,895

 

 

 

34

 

 

 

6,929









Share-based payments

 

-

 

-

 

-

 

99

 

99

 

-

 

99

Tax on share-based payments

 

-

 

-

 

-

 

1,455

 

1,455

 

-

 

1,455

Bonus issue of shares

 

2,715

 

(2,715)

 

-

 

-

 

-

 

-

 

-

Balance at 30 June 2021

 

2,742

 

19,052

 

70

 

26,742

 

48,606

 

340

 

48,946

 








 

 

 

 

 

Balance at 1 January 2022

 

2,885

 

38,535

 

275

 

32,536

 

74,231

 

-

 

74,231

Profit for the period

 

-

 

-

 

-

 

9,103

 

9,103

 

-

 

9,103

Other comprehensive income for the period

 

 

 

-

 

 

 

-

 

 

 

264

 

 

 

-

 

 

 

264

 

 

 

-

 

 

 

264

Total comprehensive income for the period

 

 

 

-

 

 

 

-

 

 

 

264

 

 

 

9,103

 

 

 

9,367

 

 

 

-

 

 

 

9,367









Share-based payments

 

-

 

-

 

-

 

3,007

 

3,007

 

-

 

3,007

Issue of shares, net of share issue costs

 

 

17

 

 

434

 

 

-

 

 

-

 

 

451

 

 

-

 

 

451

Balance at 30 June 2022

 

2,902

 

38,969

 

539

 

44,646

 

87,056

 

-

 

87,056

 








  


Unaudited condensed consolidated statement of cash flows

for the six months ended 30 June 2022

 

 

 


Unaudited six months ended 30 June 2022

 

£'000


Unaudited six months ended 30 June 2021

 

£'000


Year

ended 31 December 2021

 

£'000


Note

 






 

 





Cash flows from operating activities


 







 





Profit before tax


8,859

 

7,963

 

13,722

 


 





Adjustments for:














Depreciation of property, plant and equipment


1,142


838


1,698

Depreciation of right-of-use assets


99


135


233

Amortisation of intangible assets


638


586


1,171

Share of loss/(profit) of joint venture


2


2


5

Investment write-down


426


-


-

Share-based payments charge

8

3,007


99


1,413

Finance income


(39)


-


-

Finance costs


5


9


15

Interest expense


12


12


32



 





Changes in:


 







 





Inventories


(2,783)


(103)


(859)

Trade and other receivables


(1,444)


(835)


(2,867)

Trade and other payables


1,367


(188)


1,401

Cash generated from operating activities


11,291


8,518


15,964

Taxes paid


(409)


(932)


(1,926)

Net cash flows from operating activities


10,882

 

7,586

 

14,038

 


 





Cash flows from investing activities


 







 





Purchase of property, plant and equipment


(35)


(36)


(135)

Own work capitalised


(1,867)


(705)


(1,833)

Capitalised development costs


(535)


(472)


(969)

Finance income


39


-


-

Dividends from joint ventures and associates


 

-


 

64


 

64

Net cash used in investing activities


(2,398)

 

(1,149)

 

(2,873)

 


 





Cash flows from financing activities


 







 





Proceeds from issues of shares

7

362


-


19,626

Transactions with non-controlling interests


 

-


 

-


 

(86)

Repayment of lease liabilities


(109)


(141)


(239)

Interest paid


(12)


(12)


(32)

Cash flows from financing activities


241

 

(153)

 

19,269

 


 







 





Net increase in cash and cash equivalents


 

8,725


 

6,284


 

30,434

Cash and cash equivalents at the beginning of the period


 

48,317


 

17,999


 

17,999

Effects of exchange rate changes on cash and cash equivalents


 

128


 

(50)


 

(116)

Cash and cash equivalents at the end of the period

6

 

57,170

 

 

24,233

 

 

48,317

 

 

 





Notes to the unaudited condensed interim consolidated financial statements

For the six months ended 30 June 2022

 

1.   General information and basis of preparation

 

Big Technologies PLC is a public limited company incorporated in the United Kingdom, listed on the Alternative Investment Market ('AIM') of the London Stock Exchange. The Company is domiciled in the United Kingdom and its registered office is Talbot House, 17 Church Street, Rickmansworth, Hertfordshire, WD3 1DE. The unaudited interim consolidated financial statements comprise the Company and its subsidiaries (together referred to as the 'Group').

 

The principal activity of the Group is the development and delivery of remote monitoring technologies and services to a range of domestic and international customers.

 

The Directors confirm that, to the best of their knowledge, the interim financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the United Kingdom and the AIM Rules for Companies, and that the interim report includes a fair review of the information required.

 

The condensed interim financial statements should be read in conjunction with the Group's latest annual consolidated financial statements, for the year ended 31 December 2021.

 

These interim financial statements do not include all of the information required for a complete set of financial statements prepared in accordance with IFRS Standards. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual consolidated financial statements.

 

The financial information provided for the six-month period ended 30 June 2022 is unaudited, however, the same accounting policies, presentation and methods of computation have been followed in these interim financial statements as those which were applied in the preparation of the Group's annual consolidated financial statements for the year ended 31 December 2021.

 

These interim financial statements do not constitute statutory accounts as defined in section 434 of the Companies Act 2006.  A copy of the most recent statutory accounts for the year ended 31 December 2021 has been delivered to the Registrar of Companies.  The auditor's report on these accounts was unqualified and did not contain a statement under section 498 of the Companies Act 2006.

 

These interim financial statements were authorised for issue by the Company's board of directors on 13 September 2022.

 

1.1 Going concern

 

The Directors have, at the time of approving these interim financial statements, a reasonable expectation that the Company and the Group have adequate resources to continue in operation for the foreseeable future. The Group's forecasts and projections, taking into account reasonable possible changes in trading performance, show that the Group has sufficient financial resources, together with assets that are expected to generate cash flow in the normal course of business. Accordingly, the Directors have adopted the going concern basis in preparing these interim financial statements. 

 

2.   Segment reporting

The Group derives revenue from the delivery of remote monitoring technologies and services to a range of domestic and international customers. The income streams are all derived from the utilisation of these products which, in all aspects except details of revenue, are reviewed and managed together within the Group and as such are considered to be the only segment. The Group operates across three regions: Europe, Asia Pacific and The Americas, and the Board of Directors monitors revenue on this basis.

 

Revenue for each of the geographical areas is as follows:

 


H1 2022

£'000

 

H1 2021

£'000

 

FY 2021

£'000







Europe

2,476


2,379


4,988

Asia-Pacific

12,847


8,924


18,230

Americas

7,539


6,731


14,410


22,862

 

18,034

 

37,628

 

Assets and liabilities by segment are not regularly reviewed by the Board of Directors on a monthly basis and, therefore, are not used as a key decision-making tool and are not disclosed here.

 

Revenues are disaggregated as follows:

 


H1 2022

£'000

 

H1 2021

£'000

 

FY 2021

£'000







Sales of goods

45


83


165

Delivery of services

22,817


17,951


37,463


22,862

 

18,034

 

37,628

 

The nature of the Group's operations mean that recorded financial performance is not seasonal or cyclical in nature. The majority of revenues are derived from delivery of services to customers over time under long-term contracts.

 

3.   Alternative performance measures

 

These items are included in normal operating costs of the business, but are significant cash and non-cash expenses that are separately disclosed because of their size, nature or incidence. It is the Group's view that excluding them from operating profit gives a better representation of the underlying performance of the business in the period.

 


H1 2022

£'000

 

H1 2021

£'000

 

FY 2021

£'000







Amortisation of acquired intangibles

234


234


468

IPO preparation costs

-


578


1,192

National insurance on warrant exercise

-


-


1,076

Total adjusting operating items

234

 

812

 

2,736

Share-based payments expense

3,024


99


1,423

Total adjusting items and share-based payments before tax

 

3,258


 

911

 

 

4,159

Tax effect of adjusting items and share-based payments

 

(1,040)


 

-


 

(1,050)

Total adjusting items and share-based payments after tax

 

2,218

 

 

911

 

 

3,109

 

Share-based payments expense

These costs are excluded from the adjusted results of the Group since the costs are non-cash charges arising from recognition of the fair value of share options and other share-based incentives granted to employees of the Group. As such, they are not considered reflective of the core trading performance of the Group.

 

Amortisation of acquired intangibles

These costs are excluded from the adjusted results of the Group since the costs are non-cash charges arising from investment activities. As such, they are not considered reflective of the core trading performance of the Group.

 

IPO preparation costs (comparative periods only)

Attributable costs relating to the IPO performed during 2021 have been recognised within the consolidated statement of comprehensive income as an exceptional cost. These costs are excluded from the adjusted results of the Group since the costs are one-off in nature and will not repeat in future years.

 

National insurance on warrant exercise (comparative periods only)

Warrants were exercised in respect of 5,858,500 shares by the Chief Executive Officer immediately prior to the IPO in 2021. The acquisition of shares under the warrant were deemed to be within the Employment Related Securities rules and, therefore,  a charge has been recognised in respect of Employer's national insurance. This cost is excluded from the adjusted results of the Group since the cost is one-off in nature and will not repeat in future years.

 

4.   Taxation

 

Current tax is charged at 9.0% for the period (H1 2021: 13.1%) representing the best estimate of the average annual effective current tax rate expected to apply for the full year, applied to the pre-tax income of the current period.

 

The effective current tax rate is lower than the current UK corporation tax rate due to allowances claimed for research and development, patent box and the deductibility of exercised employee share awards, offset by overseas tax at higher rates than in the UK.

 

Deferred tax recognised in the period relates to share options, acquired intangible assets and fixed asset timing differences.


H1 2022

£'000

 

H1 2021

£'000

 

FY 2021

£'000

Current tax

 

 

 

 

 

For the financial period

796


1,047


1,457

Adjustments in respect of prior periods

-


-


648


796

 

1,047

 

2,105

Deferred tax






Origination and reversal of temporary timing differences

(44)


128


(127)

Adjustments in respect of prior periods

-


-


(83)

Related to share-based payments

(996)


(99)


(961)


(1,040)

 

29

 

(1,171)


 

 

 

 

 

Total taxation

(244)

 

1,076

 

934







  

 

5.   Earnings per share

 

The calculation of the basic and diluted earnings per share is based on the following data:

 

         

H1 2022

£'000

 

H1 2021

£'000

 

FY 2021

£'000


 

 

 

 

 

Profit for the purpose of basic and diluted earnings per share being net profit attributable to equity holders of the parent

 

9,103


 

6,853


 

12,788







Adjustments for:






Adjusting items

234


812


2,736

Share-based payments expense

3,024


99


1,423

Tax effect of adjusting items and share-based payments

(1,040)


-


(1,050)


 

 

 

 

 

Adjusted earnings

11,321

 

7,764

 

15,897







 

         

H1 2022

No. shares

 

H1 2021

No. shares

 

FY 2021

No. shares


 

 

 

 

 

Weighted average number of Ordinary shares for the purpose of basic earnings per share

289,600,756


274,202,600


282,853,610

Effect of dilutive potential Ordinary shares/share options

15,963,014


6,667,285


6,373,277


 

 

 

 

 

Weighted average number of Ordinary shares for the purpose of diluted earnings per share

305,563,770

 

280,869,885

 

289,226,887







 

 

Basic earnings per share         

H1 2022

Pence

 

H1 2021

Pence

 

FY 2021

Pence


 

 

 

 

 







Basic earnings per share

3.1


2.5


4.5

Adjustments for:






Adjusting items

0.1


0.3


1.0

Share-based payments expense

1.1


-


0.5

Tax effect of adjusting items and share-based payments

(0.4)


-


(0.4)

Adjusted basic earnings per share

3.9

 

2.8

 

5.6







 

 

Diluted earnings per share      

H1 2022

Pence

 

H1 2021

Pence

 

FY 2021

Pence


 

 

 

 

 







Diluted earnings per share

3.0


2.4


4.4

Adjustments for:






Adjusting items

0.1


0.4


1.0

Share-based payments expense

1.0


-


0.5

Tax effect of adjusting items and share-based payments

(0.4)


-

 

(0.4)

Adjusted diluted earnings per share

3.7

 

2.8

 

5.5







The adjusted earnings per share has been calculated on the basis of profit before adjusting items and share-based payments, net of tax. The Directors consider that this calculation gives a better understanding of the Group's earnings per share in the current and prior periods.

 

6.   Cash and cash equivalents

The carrying amounts of the cash and cash equivalents are denominated in the following currencies:

 

         

H1 2022

£'000

 

H1 2021

£'000

 

FY 2021

£'000


 

 

 

 

 

Pound sterling

47,688


10,917


30,587

US dollar

2,557


8,097


11,186

Australian dollar

2,995


3,958


3,942

New Zealand dollar

2,447


-


27

Colombian peso

1,077


736


1,280

Euro

158


201


579

Canadian dollar

167


324


635

Other

81


-

 

81

 

57,170

 

24,233

 

48,317







Net cash

 

Net cash comprises cash and cash equivalents and lease liabilities.

 

         

H1 2022

£'000

 

H1 2021

£'000

 

FY 2021

£'000


 

 

 

 

 

Cash and cash equivalents

57,170


24,233


48,317

Lease liabilities

(313)


(441)

 

(349)

 

56,857

 

23,792

 

47,968







7.   Share capital


The allotted, called up and fully paid share capital is made up of 290,158,082 ordinary shares of £0.01 each. During the period the Group issued 1,653,000 shares, generating cash proceeds of £0.4m to satisfy the exercise of options by employees under EMI and non-EMI share option plans.

 

8.   Share-based payments


The Group has a number of equity-settled share-based payment arrangements in operation, the details of which are disclosed in note 23 on pages 79-81 of the 2021 Annual Report. The schemes were established to reward and incentivise the senior management team and employees to deliver share price growth.

 

The charge made in respect of share-based payments is as follows:

 

         

H1 2022

£'000

 

H1 2021

£'000

 

FY 2021

£'000


 

 

 

 

 

EMI Plan

-


-


181

Non-EMI Plan (Chair)

56


99


200

LTIP

67


-


37

Growth Share Plan

2,884


-


995

Share-based payments charge (IFRS 2)

3,007

 

99

 

1,413

Employers' tax charge in relation to share awards

 

17


 

-

 

 

9

Total charge in respect of share-based payments

 

3,024

 

 

99

 

 

1,422







 

9.   Principal risks and uncertainties


The principal risks and uncertainties impacting the Group are described on pages 16-19 of the 2021 Annual Report and remain unchanged at 30 June 2022.

 

They include: reliance on key customers, failure to manage growth, change in government policy, failure to develop new products, competitor actions, reliance on third-party technology and communication systems, reputational risk, dependence on partners, loss of key personnel, supply chain, product liability, foreign exchange risk, credit risk, business taxation, bid pricing, cyber security/business interruption, intellectual property/patents and operating in global markets. 

 

 

 

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