TIDMFDP
RNS Number : 2645A
FD Technologies PLC
23 May 2023
23 May 2023
FD Technologies plc
("FD Technologies" or the "Group")
Results for the year ended 28 February 2023
FD Technologies (AIM: FDP.L, Euronext Growth: FDP.I) announces
its results for the year ended 28 February 2023.
Business highlights
Strong performances by KX and First Derivative
- KX exceeded its targets with annual recurring revenue (ARR) up 39%
to GBP65.3m (FY22: GBP47.0m) and net revenue retention of 119% (FY22:
106%); incremental annual contract value (ACV) increased by 93% to
GBP18.7m (FY22: GBP9.7m)
- Launched the industry's first Data Timehouse, positioning KX as the
engine for real-time analytics in the cloud and delivering up to 100x
the performance at 1/10(th) of the cost of alternative solutions
- Significant progress with a range of existing and potential partners,
including the general availability of kdb Insights Enterprise on Microsoft
Azure and an agreement to partner with AWS
- Continued our drive to accelerate time to value for customers, as
well as making our technology easier to adopt and use; our progress
is reflected in continued growth in Industry, which accounted for
more than 30% of ACV
- Momentum set to continue in the current year, benefiting from growing
demand for real-time analytics as the foundation for AI-driven business
innovation, the strengthening of KX leadership and growing market
recognition for the return on investment that KX delivers
- First Derivative delivered revenue growth of 18%, also ahead of target,
benefiting from multi-year strategic growth drivers, particularly
relating to regulatory compliance and digital transformation
- Weaker demand environment continued at MRP, with revenue down by 19%;
cost base aligned to protect EBITDA in the current year
- Providing guidance for FY24 revenue in the range of GBP315m to GBP325m,
with adjusted EBITDA in the range of GBP38m to GBP40m with continued
investment in KX to drive future growth.
Seamus Keating, CEO of FD Technologies, commented: 'We are
pleased with a year of strong execution on our strategy, with KX
and First Derivative beating our expectations for FY23.
KX in particular has made strong commercial and strategic
progress. Our price to performance advantage is particularly
compelling for the hyperscale cloud providers, as evidenced by our
partnerships with market leaders Microsoft and AWS. We have a range
of initiatives that we are progressing with these and other
partners that provide confidence in our outlook.
First Derivative also performed strongly in FY23, delivering
impressive revenue growth of 18% for the period. We continue to see
multi-year strategic growth drivers that underpin demand for our
services.
We have set ourselves ambitious but sustainable growth targets
for the years ahead which will ensure we are focused on driving
high-quality recurring revenue growth from an expanding list of
customers across a wide range of industries, while generating value
for shareholders.'
Financial summary
Year to end February 2023 2022 Change
Revenue GBP296.0m GBP263.5m 12%
--------------------------------- --------------------------------- -------
Gross profit GBP122.3m GBP106.1m 15%
--------------------------------- --------------------------------- -------
(Loss)/Profit before tax (GBP1.2m) GBP9.0m NM
--------------------------------- --------------------------------- -------
Reported diluted (LPS)/EPS (14.4p) 22.9p NM
--------------------------------- --------------------------------- -------
Net cash* GBP0.4m GBP0.3m 24%
--------------------------------- --------------------------------- -------
Adjusted performance measures
--------------------------------- --------------------------------- -------
Adjusted EBITDA** GBP34.8m GBP31.0m 12%
--------------------------------- --------------------------------- -------
Adjusted diluted EPS 35.3p 32.3p 9%
--------------------------------- --------------------------------- -------
Performance against Key Target Actual
Performance Indicators
--------------------------------- ------------------------------------------
KX annual recurring revenue (ARR)
growth 35-40% 39%
--------------------------------- ------------------------------------------
KX net revenue retention (NRR) 110% 119 %
--------------------------------- ------------------------------------------
First Derivative revenue growth 15% 18%
--------------------------------- ------------------------------------------
MRP revenue growth 10% (19%)
--------------------------------- ------------------------------------------
* Excluding lease obligations
** Adjusted for share based payments and restructure and
non-operational
costs
Financial highlights
- Group revenue up 12% to GBP296m (up 6% at constant currency), led
by good performances at KX and First Derivative, both above full year
expectations, balanced by a reduction in revenue at MRP
- KX revenue growth of 25% to GBP80.2m (FY22: GBP64.4m), with recurring
revenue up 47% to represent 72% of total KX revenue (FY22: 61%) and
reductions in both lower margin services revenue and lower value perpetual
license revenue as we continue to focus on growing our recurring revenue
- First Derivative revenue GBP174.3m, up 18% (FY22: GBP148.0m), driven
by our strategy to deliver more value from our domain and technology
expertise and our push into complementary areas such as software engineering
- MRP revenue down 19% to GBP41.5m (FY22: GBP51.1m), resulting from
lower spending on demand generation by our enterprise customers
- Adjusted EBITDA up 12% to GBP34.8m (FY22: GBP31.0m), following investment
in people and systems, including the successful implementation of
an Oracle ERP system, to enable the Group to scale
- Net cash GBP0.4m (FY22: GBP0.3m) resulting from focused cash management
Current trading and outlook
Our targets continue to be centred on key performance indicators
appropriate to value creation within each of our business units. In
KX, the opportunities we see with customers and partners gives us
confidence in delivering another strong year of ARR growth of at
least 35%. In First Derivative, the alignment of our services with
the strategic priorities of our customers provides us with
confidence that we can grow faster than the market, with revenue
growth in the range of 5% to 10% as well as a meaningful
improvement towards our three-year EBITDA margin target of 15%. In
MRP we expect the reduction in the cost base to deliver an
improvement in EBITDA for the current year.
At the Group level we expect FY24 revenue in the range of
GBP315m to GBP325m, with adjusted EBITDA in the range of GBP38m to
GBP40m.
For further information, please contact:
FD Technologies plc +44(0)28 3025 2242
Seamus Keating, Chief Executive Officer www.fdtechnologies.com
Ryan Preston, Chief Financial Officer
Ian Mitchell, Head of Investor Relations
Investec Bank plc
(Nominated Adviser and Broker)
Carlton Nelson
Virginia Bull +44 (0)20 7597 5970
Goodbody (Euronext Growth Adviser and Broker)
David Kearney
Don Harrington
Nick Donovan +353 1 667 0420
J.P. Morgan Cazenove (Broker)
James A. Kelly
Mose Adigun +44 (0) 203 493 8000
FTI Consulting
Matt Dixon
Dwight Burden
Victoria Caton +44 (0)20 3727 1000
About FD Technologies
FD Technologies is a group of data-driven businesses that unlock
the value of insight, hindsight and foresight to drive
organisations forward. The Group comprises KX, which provides
software to accelerate AI-driven innovation; First Derivative,
providing consulting services which drive digital transformation in
financial services and capital markets; and MRP, which provides
technology-enabled services for enterprise demand generation. FD
Technologies operates from 14 locations across Europe, North
America and Asia Pacific, and employs 3,000 people worldwide.
For further information, please visit www.fdtechnologies.com and
www.kx.com
Results presentation
A presentation for analysts will be held at FTI Consulting at
9.30am today, following which a recording of the presentation will
be available on the Group's website.
Business Review
FD Technologies comprise three business units - KX, software to
accelerate AI-driven innovation; First Derivative, consulting
services which drive digital transformation in financial services
and capital markets ; and MRP, which provides technology-enabled
services for enterprise demand generation.
KX - Software to accelerate AI-driven innovation
KX's mission is to revolutionise AI-driven business innovation
through time-series analytics, empowering enterprises to extract
value from the ever-growing volume of data, much of it
machine-generated and time-stamped. As the engine for real-time
analytics in the cloud, our customers report that KX delivers 100x
the performance of alternative solutions at 1/10(th) of the cost,
fostering rapid innovation while maintaining cost efficiency.
During the year we launched the industry's first Data Timehouse,
a new class of data management and AI platform, to provide
enterprises with access to temporal data in a way that prioritises
modelling and insight. Launched on Azure through our strategic
partnership with Microsoft, this approach is backed by industry
analysts Gartner, who are urging the adoption of technologies such
as KX that are specifically built for the analysis of temporal
data.
KX's addressable market is rapidly expanding, with the AI and
data science platforms and applications sector, as estimated by
Gartner, growing at a 29% CAGR to reach $135bn by 2025. Based on
our targeted industries and geographic markets, we project our
current serviceable market opportunity to be approximately $34bn by
2025.
Strategic partnerships
Working with strategic partners is key to achieving our mission,
and our priority is to establish KX as the high-performance engine
within the hyperscale cloud platforms. We made significant progress
during the year and the recent general availability of kdb Insights
Enterprise on Microsoft Azure was a watershed moment for our
strategic partnership with Microsoft. Since the launch we have seen
positive customer reaction and strong partner engagement on joint
propositions, resulting in growth in our pipeline across multiple
industries.
The expected launch of additional products on Azure during the
year, aimed for example at application developers, will enable our
existing customers to transact via the marketplace to expand their
current KX data estate. In addition, we have a number of innovation
projects where we will integrate our technology with Large Language
Models (LLMs) to bring analytics into the day-to-day workflow of
users, dramatically improving their experience.
We recently announced that KX is partnering with Amazon Web
Services (AWS) to launch kdb Insights as a fully managed
cloud-native service on Amazon FinSpace, AWS's data management and
analytics service for the financial services industry. KX and AWS
are working together to attract both new customers and to provide
existing KX customers with a path to migrate their existing kdb
workloads to the cloud, benefitting from both the Python-enabled
capabilities of kdb Insights and managed services provided by
AWS.
We have also made progress with other hyperscalers and
established a dedicated partner team to develop and close these
opportunities. This team is engaged with cloud hyperscale
platforms, systems integrators, OEMs and independent software
vendors (ISVs) seeking to integrate our kdb technology into their
data and AI-driven applications.
Product development
At the heart of our products is kdb+, the world's fastest
time-series and real-time analytics engine. The launch of kdb
Insights Enterprise on Microsoft Azure has significantly expanded
our ability to provide our technology's performance advantages to a
wider audience. Among other benefits, it offers the versatility of
microservices and cloud resources, enables Python and SQL
developers to programme without knowing our proprietary language,
q, and provides free trial and development resources for
solution-building. This leads to broader adoption and faster value
realisation for customers.
We continue to focus on making our technology more accessible
and user-friendly, implementing a continuous development strategy
with reusable services deployable across OEMs and ISVs.
Commercial progress
FY23 was our strongest year ever for incremental ACV, which
increased by 93% from the prior year to GBP19m. We also delivered
an improvement In Net Revenue Retention (NRR) to 119% (FY22: 106%)
indicating that our strategy to increase our growth from existing
customers is delivering results.
During the year we made a number of senior appointments to drive
growth at KX. In August Ashok Reddy was appointed CEO, bringing a
track record of successfully driving AI product innovation, revenue
growth and commercial strategies at enterprise technology companies
(including IBM, CA Technologies/Broadcom and Digital.ai). KX also
recently appointed a Chief Revenue Officer, John Hoffman, with
extensive experience in building and scaling revenue at data
analytics providers.
We continue to invest in sales and marketing, expanding our
go-to-market team to target opportunities across industries. Our
strategy emphasises partnering to win new customers and growing our
direct sales capability.
While financial services customers remain our largest revenue
source, we are growing at a faster rate in other industries,
validating our view of our technology as a horizontal solution
across industries. Example customer wins in the period
included:
-- Syneos Health adopted KX to implement a Data Timehouse, using kdb Insights
Enterprise on Microsoft Azure to improve clinical trial efficiency, reduce
costs and speed time to market for life-changing therapies for patients.
-- PSE, the Polish transmission system operator, selected KX to manage large
meter data volumes and complex analytics as part of its adoption of CGI's
Central Energy Market Information System in a multi-year deal.
-- A leading investment bank adopted kdb Insights as part of its large-scale
cloud migration project, moving its KX on-premise workloads to the cloud
with no reduction in performance at a fraction of the total operating
cost.
First Derivative - driving digital transformation in financial
services and capital markets
First Derivative delivered 18% revenue growth for the year,
resulting from structural demand drivers for our services across
regulatory compliance and digital transformation. Our performance
was stronger than that of the market, as a result of our strategy
to deliver more value from our domain and technology expertise and
our push into areas such as software engineering.
During the year we saw strong demand for our core practice areas
such as transaction reporting and Know Your Customer compliance,
while the move to the cloud by our customers is creating
opportunities as they look to completely rebuild their core
software architecture. This latter trend was a driver in our
decision to establish a software engineering practice, which
delivered impressive growth in the year and where we have a growing
pipeline.
Our priorities for the current year are to continue to broaden
our service offerings and seek multi-year engagements with clients,
to increase the diversity and robustness of our revenues. We expect
to continue the internationalisation of our business, with good
growth in the year in Asia and a growing pipeline of opportunities.
We also expect our clients to continue their drive to get value
from their technology spend by achieving the optimal delivery
structure and see continued demand for our near shore capabilities
as a result.
Our positivity about our growth prospects is tempered by the
external environment which has created a level of caution within
some clients, with projects taking longer to be approved than in
recent periods. At the same time, we are seeing an easing in the
pressures of wage inflation and staff attrition, which alongside
our increasing scale should assist our expectation of margin
improvement in the current year as we move towards our FY26 goal of
15% EBITDA margin.
We continue to believe First Derivative is well positioned, with
high levels of repeat revenue, structural demand drivers assisting
our growth and a strategy to drive greater value from our
considerable capital markets expertise.
MRP - technology-enabled services for enterprise demand
generation
MRP is our smallest business unit, representing 14% of revenue
in FY23. It provides global sales and marketing leaders with an
account-based marketing platform (Prelytix), powered by KX, and
supporting products and services that deliver high response rates
and pipeline conversion. Prelytix tracks more than 1.5 billion
intent signals per day, enabling MRP customers to identify and
engage targets earlier and more effectively. Its global presence is
a further differentiator, resulting in Forrester naming it as a
leader in Account Based Marketing (ABM) in its Q2 2022 report on
the sector.
Throughout the year MRP's customer budgets remained under
pressure, with demand generation spend remaining weak in the
economic environment. We have seen a stabilisation in revenue run
rate since the year end and coupled with the steps taken to align
its cost base, we expect to deliver an improved EBITDA performance
for the current year. We continue to believe MRP has the
opportunity to deliver double digit revenue growth when spending on
demand generation improves.
People
The Group currently employs 3,000 people, similar to the number
employed at the same time last year. Our employee policies are
designed to enable us to attract and retain top talent and during
the year we implemented a number of initiatives to assist these
goals.
We continued to pay particular attention to learning and
development, with a strong focus on leadership, as well as the
Group's culture. We introduced our Aspiring Leadership programme,
which offers a structured and practical path to fast-track high
potential individuals into leadership roles, and appointed leaders
to run our talent and people initiatives. We also evaluated and
benchmarked every employee across the Group to ensure everyone is
paid competitively.
We continue to evolve the ways in which our people connect and
collaborate, with our latest annual engagement survey which shows
an increase in the number of our employees that feel engaged to
82%. During the year we completed the implementation of an Oracle
Cloud Fusion ERP system that includes a Human Resources Information
System, enabling us to work more strategically.
Summary and outlook
KX and First Derivative both delivered strong growth in their
KPIs for the year and are well placed to deliver on their potential
following a year of execution of strategy. In KX the growing
importance of real-time analytics and our ability to accelerate AI
workloads, combined with our product and commercial strategies are
establishing us as a key component of modern data architecture.
These factors are driving opportunities with customers and partners
that support our confidence in another year of strong growth in
ARR, of at least 35%. First Derivative continues to evolve its
service offerings to assist customers with their strategic
objectives and we expect this to enable growth ahead of its market,
with revenue expected to increase in the range of 5% to 10% and
margin improvement towards our three-year target of 15% . MRP's
EBITDA performance is expected to improve following the alignment
of its cost base, with growth expected to return when spending on
demand generation increases.
At the Group level we expect FY24 revenue in the range of
GBP315m to GBP325m, with adjusted EBITDA in the range of GBP38m to
GBP40m.
Financial review
Revenue and Margins
The table below shows the breakdown of Group performance by
business unit for each of KX, First Derivative and MRP.
FY23 FY22
----------------------------------------
Group KX First MRP Group KX First MRP Group
Derivative Derivative change
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
12
Revenue 296.0 80.2 174.3 41.5 263.5 64.4 148.0 51.1 %
10
Cost of sales (173.7) (22.3) (127.0) (24.4) (157.3) (19.9) (108.6) (28.8) %
------------------------ ------- ------------ ------- ------- ------------ -------
15
Gross profit 122.3 58.0 47.3 17.0 106.1 44.5 39.4 22.2 %
Gross margin 41% 72% 27% 41% 40% 69% 27% 44%
28
R&D expenditure (27.1) (23.0) (0.4) (3.7) (21.1) (18.6) (0.2) (2.3) %
25
R&D capitalised 23.1 19.0 0.4 3.7 18.6 16.1 0.2 2.3 %
------------------------ ------- ------------ ------- ------- ------------ -------
54
Net R&D (4.0) (4.0) - - (2.6) (2.6) - - %
Sales and marketing
costs (50.9) (26.3) (15.3) (9.4) (47.4) (23.6) (14.5) (9.3) 8 %
30
Adjusted admin expenses (32.7) (11.1) (15.4) (6.2) (25.2) (8.6) (10.9) (5.7) %
12
Adjusted EBITDA 34.8 16.6 16.7 1.4 31.0 9.8 14.0 7.3 %
Adjusted EBITDA margin 12% 21% 10% 3% 12% 15% 9% 14%
The Group delivered double-digit increases in both revenue and
adjusted EBITDA. Revenue growth was driven by strong growth in
recurring revenue at KX and good growth by First Derivative offset
by a revenue decline in MRP as a result of difficult market
conditions. This drove 15% growth in gross profit to GBP122.3m
(FY22: GBP106.1m), with increasing scale and growth in higher
margin revenues resulting in gross margin of 41% (FY22: 40%). We
continue to invest in line with our strategic objectives, including
investments in systems and people. In addition, inflationary cost
pressures which increased admin expenses and the impact of MRP,
resulted in adjusted EBITDA margin remaining at 12%.
Revenue growth was boosted during the period by the strength of
the dollar against sterling, our reporting currency, with constant
currency revenue growth of 6%. Due to the natural hedge of our
operations in the US the impact on profitability was marginal.
KX
KX total Financial services Industry
----------------------------- --------------
FY23 FY22 Change FY23 FY22 Change FY23 FY22 Change
GBPm GBPm GBPm GBPm GBPm GBPm
Revenue 80.2 64.4 25% 67.9 55.4 23% 12.4 9.1 37%
Recurring 57.6 39.2 47% 50.2 35.5 41% 7.4 3.7 102%
Perpetual 1.6 3.6 (57%) 0.2 1.8 (88%) 1.3 1.8 (24%)
Total software 59.1 42.8 38% 50.4 37.4 35% 8.7 5.4 61%
------ ----- ------ ----- ----- -----
Services 21.1 21.6 (2%) 17.5 18.0 (3%) 3.6 3.6 0%
Gross profit 58.0 44.5 30%
Adjusted
EBITDA 16.6 9.8 70%
KX delivered a strong performance in the year, with 25% revenue
growth driven by 47% growth in recurring revenue to GBP57.6m,
balanced by a 2% reduction in services to GBP21.1m. The growth was
enabled by an increase of 93% in annual contract value added to
GBP18.7m, resulting in 39% growth in ARR to GBP65.3m. Services
revenue, related to the implementation of our software, declined
marginally to GBP21.1m as we enabled our customers to achieve time
to value more quickly, reducing the cost and complexity of adopting
KX and increasing the return on investment for our customers.
Revenue from perpetual license sales continues to decline following
our decision in 2021 to focus exclusively on subscription sales for
new customers, and now represents just 2% of KX revenue.
Financial services revenue grew by 23% to GBP67.9m, with
recurring revenue up 41%. We continue to benefit from adoption of
kdb Insights by existing and new customers, attracted by its
performance, ease of use and rapid time to value, as well as native
integration with important developer languages such as Python and
SQL.
Industry revenue grew by 37% to GBP12.4m with recurring revenue
growing by 102% to GBP7.4m. Growth was led by subscription
contracts across the healthcare, energy and manufacturing markets
with both new and existing customers.
Alongside the growth in ARR our go-to-market team was also
engaged with partners, particularly Microsoft and AWS, on joint
go-to-market initiatives to support general availability of kdb
Insights Enterprise on Microsoft Azure and kdb Insights on AWS
FinSpace.
Performance metrics FY23 FY22 Change
Annual recurring revenue (ARR)
GBPm 65.3 47.0 39%
Net revenue retention (NRR) 119% 106%
Gross margin 72% 69%
R&D expenditure as % of revenue 29% 29%
Sales and marketing spend
as % of revenue 33% 37%
Adjusted EBITDA margin 21% 15%
The annual contract value signed in the period was GBP18.7m, up
93% on the prior year (FY22: GBP9.7m) and driven by the growth in
new subscription deals in the period and our work with partners.
This resulted in ARR increasing by 39% to GBP65.3m. NRR of 119% is
ahead of the 106% in FY22 and in line with our mid-term target of
120%, with customer churn remaining at low levels.
First Derivative
FY23 FY22 Change
GBPm GBPm
Revenue 174.3 148.0 18%
Gross profit 47.3 39.4 20%
Adjusted
EBITDA 16.7 14.0 20%
Revenue for the period was GBP174.3m, with growth of 18% ahead
of our target for the year of 15%. We saw the strongest growth in
supporting our customers in their near shore operations, which are
expanding as they pull offshore delivery work into centres such as
Dublin. We believe our services are well aligned with our
customers' strategic priorities, with regulatory change, digital
transformation and cost efficiency consistent themes.
Attrition and wage inflation rates were challenges across the
industry during the year, which we managed effectively, although
they did limit scope for margin improvement. We see an easing of
these pressures in the year ahead in response to some caution from
customers, as discussed in the business review. This is reflected
in our guidance for lower revenue growth during the year, although
reduced recruitment and onboarding costs and our growing scale
should enable EBITDA margin progress.
Performance metrics FY23 FY22
-----
Gross margin 27% 27%
Adjusted EBITDA margin 10% 9%
Gross margin was maintained at 27% for the year. Underlying this
were increased costs in recruiting, training and deploying new
consultants in response to industry-wide attrition pressures,
mitigated by our ability to pass through wage inflation and the
impact of delivering greater value from our expertise and domain
knowledge.
MRP
FY23 FY22
GBPm GBPm Change
Revenue 41.5 51.1 (19%)
Gross profit 17.0 22.2 (23%)
Adjusted
EBITDA 1.4 7.3 (80%)
MRP derives revenue by combining cutting-edge predictive
analytics with a full suite of account-based sales and marketing
solutions. Throughout the year, concerns over the business outlook
caused many of our customers to pause or reduce their demand
generation activity, leading to a decline in revenue at MRP.
While we took action to align costs during the year, adjusted
EBITDA decreased to GBP1.4m (FY22: GBP7.3m). In response, MRP has
implemented cost savings that have reduced annualised operating
costs by c. GBP6.0m and as a result we expect an improved
performance in adjusted EBITDA in FY24.
Performance metrics FY23 FY22
-----
Gross margin 41% 44%
Adjusted EBITDA margin 3% 14%
Gross margin declined slightly to 41% (FY22: 44%) as a result of
lower services utilisation balanced by cost efficiencies in
third-party costs incurred in our display marketing offering. Admin
expenses increased as we invested in upgrading cybersecurity
protection, improved legal capability and incurred wage
inflation.
Group Performance
Adjusted EBITDA
The reconciliation of operating (loss)/profit to adjusted EBITDA
is provided below:
FY23 FY22
GBPm GBPm
Operating (loss)/profit (1.5) 6.4
Restructure and non-operational costs 8.7 3.1
Non-operational other income - (2.5)
Non-operational IT expenses* 5.6 2.3
Share based payment and related costs 0.4 1.7
Depreciation and amortisation 21.6 20.1
----- -----
Adjusted EBITDA 34.8 31.0
*Non-operational IT expenses represents ERP implementation costs
that are required to be expensed under accounting standards
(Loss)/profit before tax
Adjusted profit before tax increased to GBP12.1m, with the
increase in adjusted EBITDA balanced by higher depreciation and
software amortisation charges. Financing costs increased by GBP0.9m
reflecting higher interest rates partially offset as we continue to
pay down debt.
The Group reported a loss before tax of GBP1.2m for the year,
compared to a profit of GBP9.0m in FY22. The major factors were
restructuring costs, particularly at MRP, the cost of implementing
the Group's new Oracle ERP system and one-off costs to address
legacy employee tax liabilities while on assignment.
The reconciliation of adjusted EBITDA to reported profit before
tax is provided below.
FY23 FY22
GBPm GBPm
Adjusted EBITDA 34.8 31.0
Adjustments for:
Depreciation (7.3) (6.8)
Amortisation of software development costs (11.5) (10.2)
Net financing costs (3.9) (3.0)
Adjusted profit before tax 12.1 11.0
Adjustments for:
Amortisation of acquired intangibles (2.8) (3.1)
Share based payment and related costs (0.4) (1.7)
Restructure and non-operational costs (8.7) (3.1)
Non-operational other income - 2.5
Non-operational IT expenses (5.6) (2.3)
Profit/(loss) on foreign currency translation 2.1 (1.8)
Share of profit of associate - 0.3
Profit on disposal of associate 3.0 6.9
Net financing costs (0.9) 0.2
Reported (loss)/profit before tax (1.2) 9.0
(Loss)/earnings per share
The Group reported a loss after tax of GBP4.0m for the year,
compared to a profit after tax of GBP6.4m in FY22. Adjusted profit
after tax was GBP9.9m, an 8% increase on the prior year, resulting
in a 9% increase in adjusted diluted earnings per share for the
period to 35.3p.
The calculation of adjusted profit after tax is detailed
below:
FY23 FY22
GBPm GBPm
Reported (loss)/profit before tax (1.2) 9.0
Tax (2.8) (2.6)
-------- ------
Reported (loss)/profit after tax (4.0) 6.4
Adjustments from (loss)/profit before tax (as per
the table above) 13.3 2.1
Tax effect of adjustments (2.4) (1.3)
Discrete tax items 3.0 1.9
Adjusted profit after tax 9.9 9.1
Weighted average number of ordinary shares (diluted) 28.0m 28.0m
Reported (LPS)/EPS (diluted) (14.4p) 22.9p
Adjusted EPS (diluted) 35.3p 32.3p
Cash generation and net cash (excluding lease liabilities)
The Group generated GBP33.5m of cash from operating activities
before the exceptional Oracle ERP implementation cash outlay
incurred during the year of GBP5.1m, representing a 96% conversion
of adjusted EBITDA. We continued to focus on cash collection and
working capital improvements and the target for the full year from
operating activities, cash conversion was in the range of 80-85% of
adjusted EBITDA .
At the year end we had a net cash position of GBP0.4m, broadly
unchanged from the prior year. The factors impacting the movement
in net cash (excluding lease liabilities) are summarised in the
table below:
FY23 FY22
GBPm GBPm
Opening net cash/(debt) (excluding lease liabilities) 0.3 (9.9)
Cash generated from operating activities before n
on-operational IT expenses 33.5 29.9
Non-operational IT expenses (5.1) (1.0)
------- -------
Cash generated from operating activities 28.5 28.9
Taxes paid (1.5) (0.4)
Capital expenditure: property, plant and equipment (2.9) (2.8)
Proceeds from sale of property, plant and equipment - 0.9
Capital expenditure: intangible assets (23.4) (18.9)
Sale of other investments and associates 0.1 11.0
Investments 8.1 0.1
Issue of new shares 3.1 0.8
Interest, foreign exchange and other (11.9) (9.3)
------- -------
Closing net cash (excluding lease liabilities) 0.4 0.3
The drivers of cash performance in FY23 were the increasing
spend on research and development, of which GBP23.1m was
capitalised, and the sale of our investment in Quantile
Technologies, following the completion of its sale to LSEG during
the year.
After the year-end we refinanced our banking facilities, which
had been due to expire in June 2024, on improved terms. The total
facility remains at GBP130m and is entirely comprised of a
revolving credit facility, replacing a GBP65m term loan and GBP65m
revolving credit facility. The interest rate payable is SONIA/SOFR
plus a fixed margin that depends on the level of debt relative to
adjusted EBITDA. The margin on the new revolving credit facility is
equal to 1.85% to 2.85%, this compares favourably to the previous
margin of 2% to 3%. The lead arranger for the facility remains Bank
of Ireland, with continued participation from Barclays and AIB and
new participation from HSBC.
Definition of terms
The Group uses the following definitions for its key
metrics:
Annual recurring revenue (ARR) : the value at the end of the
accounting period of recurring software revenue to be recognised in
the next twelve months, formerly defined as "exit annual recurring
revenue".
Annual contract value (ACV): the sum of the value of each
customer contract signed during the year divided by the number of
years in each contract.
Net revenue retention rate (NRR) : is based on the actual
revenues in the quarter annualised forward to twelve months and
compared to the revenue from the four quarters prior. The customer
cohort is comprised of customers in the quarter that have generated
revenue in the prior four quarters.
Adjusted admin expenses: is a measure used in internal
management reporting which comprises administrative expenses per
the statement of comprehensive income of GBP66.6m (FY22: GBP51.9m)
adjusted for depreciation and amortisation of GBP21.6m (FY22:
GBP20.1m), share based payments and related costs of GBP0.4m (FY22:
GBP1.7m) and, restructure and non-operational costs of GBP8.7m
(FY22: GBP3.1m), IT Systems implementation costs expensed GBP5.6m
(FY22: GBP2.3m) and other income GBP(2.4)m (FY22: GBP(0.5)m).
Consolidated statement of comprehensive income
Year ended 28 February 2023
2023 2022
Note GBP'000 GBP'000
----------------------------------------------------- ---- --------- ---------
Revenue 2 296,042 263,463
Cost of sales (173,701) (157,327)
Gross profit 2 122,341 106,136
----------------------------------------------------- ---- --------- ---------
Operating costs
Research and development costs (27,112) (21,125)
- of which capitalised 23,138 18,553
Sales and marketing costs (50,927) (47,355)
Administrative expenses (66,592) (51,949)
Impairment loss on trade and other receivables (2,645) (695)
Total operating costs (124,138) (102,571)
----------------------------------------------------- ---- --------- ---------
Other income 249 2,816
Operating (loss)/profit (1,548) 6,381
----------------------------------------------------- ---- --------- ---------
Finance income 24 262
Finance expense (4,777) (3,015)
Gain/(loss) on foreign currency translation 2,107 (1,834)
----------------------------------------------------- ---- --------- ---------
Net finance costs (2,646) (4,587)
Share of gain of associate, net of tax - 262
Profit on disposal of associate 3,017 6,943
(Loss)/profit before taxation (1,177) 8,999
Income tax expense (2,836) (2,572)
(Loss)/profit for the year (4,013) 6,427
----------------------------------------------------- ---- --------- ---------
(Loss)/profit for the year (4,013) 6,427
Other comprehensive income
Items that will not be reclassified subsequently
to profit or loss
Equity investments at FVOCI - net change in fair
value (522) (1,408)
Net gain on sale of FVOCI holding - 150
Items that will or may be reclassified subsequently
to profit or loss
Net exchange gain on net investment in foreign
subsidiaries 12,052 3,237
Net loss on hedge of net investment in foreign
subsidiaries (3,124) (1,183)
----------------------------------------------------- ---- --------- ---------
Other comprehensive income for the year, net of
tax 8,315 796
----------------------------------------------------- ---- --------- ---------
Total comprehensive income for the year attributable
to owners of the parent 4,393 7,223
----------------------------------------------------- ---- --------- ---------
Note Pence Pence
----------------------------------------------------- ---- --------- ---------
(Loss)/earnings per share
Basic 3a (14.4) 23.1
Diluted 3a (14.4) 22.9
----------------------------------------------------- ---- --------- ---------
All profits are attributable to the owners of the Company and
relate to continuing activities.
Consolidated balance sheet
As at 28 February 2023
2023 2022
Note GBP'000 GBP'000
--------------------------------------------- ---- ------- -------
Assets
Property, plant and equipment 4 25,593 28,343
Intangible assets and goodwill 5 175,660 155,607
Other financial assets 9,356 19,676
Trade and other receivables 2,548 3,745
Deferred tax assets 21,313 17,998
--------------------------------------------- ---- ------- -------
Non-current assets 234,470 225,369
--------------------------------------------- ---- ------- -------
Trade and other receivables 96,749 74,029
Current tax receivable 6,114 4,172
Cash and cash equivalents 36,905 48,564
--------------------------------------------- ---- ------- -------
Current assets 139,768 126,765
--------------------------------------------- ---- ------- -------
Total assets 374,238 352,134
--------------------------------------------- ---- ------- -------
Equity
Share capital 140 139
Share premium 103,789 100,424
Share option reserve 18,974 18,404
Fair value reserve 3,002 9,755
Currency translation adjustment reserve 5,354 (3,574)
Retained earnings 69,609 67,391
--------------------------------------------- ---- ------- -------
Equity attributable to owners of the Company 200,868 192,539
--------------------------------------------- ---- ------- -------
Liabilities
Loans and borrowings 6 17,026 62,504
Trade and other payables 3,681 3,190
Deferred tax liabilities 15,758 15,307
--------------------------------------------- ---- ------- -------
Non-current liabilities 36,465 81,001
--------------------------------------------- ---- ------- -------
Loans and borrowings 39,911 9,054
Trade and other payables 41,466 33,606
Deferred income 48,407 26,990
Current tax payable 682 382
Employee benefits 6,439 8,562
--------------------------------------------- ---- ------- -------
Current liabilities 136,905 78,594
--------------------------------------------- ---- ------- -------
Total liabilities 173,370 159,595
--------------------------------------------- ---- ------- -------
Total equity and liabilities 374,238 352,134
--------------------------------------------- ---- ------- -------
Consolidated statement of changes in equity
Year ended 28 February 2023
Share Currency
Share Share Merger option Fair value translation Retained Total
capital premium reserve reserve reserve adjustment earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ -------- -------- -------- -------- ---------- ------------ --------- -------
Balance at 1 March
2022 139 100,424 - 18,404 9,755 (3,574) 67,391 192,539
------------------------------ -------- -------- -------- -------- ---------- ------------ --------- -------
Total comprehensive
income for the year
Loss for the year - - - - - - (4,013) (4,013)
Other comprehensive
income
Net exchange gain on
net investment in foreign
subsidiaries - - - - - 12,052 - 12,052
Net exchange loss on
hedge of net investment
in foreign subsidiaries - - - - - (3,124) - (3,124)
Transfer of reserve
of sale of equity investment - - - - (6,231) - 6,231 -
Net change in fair
value of equity investments
at FVOCI - - - - (522) - - (522)
------------------------------ -------- -------- -------- -------- ---------- ------------ --------- -------
Total comprehensive
income for the year - - - - (6,753) 8,928 2,218 4,393
Transactions with
owners of the Company
Tax relating to share
options - - - 245 - - - 245
Exercise of share options 1 3,079 - - - - - 3,080
Issue of shares - 286 - - - - - 286
Share based payment
charge - - - 325 - - - 325
------------------------------ -------- -------- -------- -------- ---------- ------------ --------- -------
Balance at 28 February
2023 140 103,789 - 18,974 3,002 5,354 69,609 200,868
------------------------------ -------- -------- -------- -------- ---------- ------------ --------- -------
Consolidated statement of changes in equity (continued)
Year ended 28 February 2022
Share Currency
Share Share Merger option Fair value translation Retained Total
capital premium reserve reserve reserve adjustment earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- -------- -------- -------- -------- ---------- ------------ --------- -------
Balance at 1 March
2021 139 99,396 8,118 16,790 10,682 (5,628) 53,177 182,674
----------------------------- -------- -------- -------- -------- ---------- ------------ --------- -------
Total comprehensive
income for the year
Profit for the year - - - - - - 6,427 6,427
Other comprehensive
income
Net exchange gain on
net investment in foreign
subsidiaries - - - - - 3,237 - 3,237
Net exchange loss on
hedge of net investment
in foreign subsidiaries - - - - - (1,183) - (1,183)
Net change in fair
value of equity investments
at FVOCI - - - - (1,408) - - (1,408)
Net gain/(loss) on
sale of FVOCI holding - - - - 481 - (331) 150
----------------------------- -------- -------- -------- -------- ---------- ------------ --------- -------
Total comprehensive
income for the year - - - - (927) 2,054 6,096 7,223
Transactions with owners
of the Company
Tax relating to share
options - - - 80 - - - 80
Exercise of share options - 773 - - - - - 773
Issue of shares - 255 - - - - - 255
Share based payment
charge - - - 1,534 - - - 1,534
Transfer (see note
21) - - (8,118) - - - 8,118 -
----------------------------- -------- -------- -------- -------- ---------- ------------ --------- -------
Balance at 28 February
2022 139 100,424 - 18,404 9,755 (3,574) 67,391 192,539
----------------------------- -------- -------- -------- -------- ---------- ------------ --------- -------
Consolidated cash flow statement
Year ended 28 February 2023
2023 2022
GBP'000 GBP'000
---------------------------------------------------- -------- --------
Cash flows from operating activities
(Loss)/profit for the year (4,013) 6,427
Adjustments for:
Net finance costs 2,646 4,587
Depreciation of property, plant and equipment 7,265 6,308
Amortisation of intangible assets 14,331 13,817
Equity-settled share based payment transactions 325 1,534
Profit on disposal of associate (3,017) (6,943)
Loss/(profit) on disposal of fixed assets 5 (222)
Other income (9) (2,499)
Grant income (240) (317)
Share of profit of associate - (262)
Tax expense 2,836 2,572
---------------------------------------------------- -------- --------
20,129 25,002
Changes in:
Trade and other receivables (14,604) (1,585)
Trade and other payables and deferred income 22,970 5,473
---------------------------------------------------- -------- --------
Cash generated from operating activities 28,495 28,890
Taxes paid (1,467) (407)
---------------------------------------------------- -------- --------
Net cash from operating activities 27,028 28,483
---------------------------------------------------- -------- --------
Cash flows from investing activities
Interest received 24 19
Acquisition of subsidiaries - (118)
Acquisition of other investments - (95)
Sale of associate 100 11,001
Sale of other investments 8,139 175
Acquisition of property, plant and equipment (2,940) (2,777)
Proceeds from sale of property, plant and equipment 67 920
Acquisition of intangible assets (23,468) (18,931)
---------------------------------------------------- -------- --------
Net cash used in investing activities (18,078) (9,806)
---------------------------------------------------- -------- --------
Cash flows from financing activities
Proceeds from issue of share capital 3,080 773
Repayment of borrowings (17,823) (19,141)
Payment of lease liabilities (4,000) (3,598)
Interest paid (3,666) (2,932)
---------------------------------------------------- -------- --------
Net cash used in financing activities (22,409) (24,898)
---------------------------------------------------- -------- --------
Net decrease in cash and cash equivalents (13,459) (6,221)
Cash and cash equivalents at 1 March 48,564 55,198
Effects of exchange rate changes on cash held 1,800 (413)
---------------------------------------------------- -------- --------
Cash and cash equivalents at 28 February 36,905 48,564
---------------------------------------------------- -------- --------
1. Basis of preparation
The consolidated financial statements consolidate those of the
Company and its subsidiaries (together referred to as the
"Group").
The financial information included in this preliminary
announcement does not constitute statutory accounts of the Group
for the years ended 28 February 2023 nor 28 February 2022 but is
derived from those accounts. Statutory accounts for 2022 have been
delivered to the Registrar of Companies and those for 2023 will be
delivered following the Company's Annual General Meeting. The
auditors have reported on those accounts; their reports were (i)
unqualified, (ii) did not include a reference to any matters to
which the auditors drew attention by way of emphasis without
qualifying their report, and (iii) did not contain a statement
under section 498(2) or (3) of the Companies Act 2006.
Both the consolidated financial statements and the Company
financial statements have been prepared and approved by the
Directors in accordance with International Financial Reporting
Standards ("IFRSs").
2. Operating and business segments
Information about reportable segments
KX FD MRP Total
---------------- ---------------- ---------------- ------------------
2023 2022 2023 2022 2023 2022 2023 2022
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- ------- ------- ------- ------- ------- ------- -------- --------
Revenue by segment
Revenue 80,239 64,418 174,329 147,988 41,474 51,057 296,042 263,463
-------------------------------- ------- ------- ------- ------- ------- ------- -------- --------
Gross profit 57,971 44,520 47,345 39,376 17,025 22,240 122,341 106,136
-------------------------------- ------- ------- ------- ------- ------- ------- -------- --------
Adjusted EBITDA 16,621 9,782 16,712 13,982 1,429 7,283 34,762 31,047
-------------------------------- ------- ------- ------- ------- ------- ------- -------- --------
Restructure and non-operational
costs (8,716) (3,082)
IT systems implementation
costs expensed (5,562) (2,287)
Non-operational other
income - 2,499
Share based payment and
related costs (436) (1,671)
Depreciation and amortisation (18,799) (16,994)
Amortisation of acquired
intangibles (2,797) (3,131)
-------------------------------- ------- ------- ------- ------- ------- ------- -------- --------
Operating (loss)/profit (1,548) 6,381
-------------------------------- ------- ------- ------- ------- ------- ------- -------- --------
Net finance costs (2,646) (4,587)
Profit on disposal of
associate 3,017 6,943
Share of profit of associate,
net of tax - 262
-------------------------------- ------- ------- ------- ------- ------- ------- -------- --------
(Loss)/profit before
taxation (1,177) 8,999
-------------------------------- ------- ------- ------- ------- ------- ------- -------- --------
Geographical location analysis
Revenues Non-current assets
---------------- --------------------
2023 2022 2023 2022
GBP'000 GBP'000 GBP'000 GBP'000
------------- ------- ------- --------- ---------
UK 104,163 79,355 87,589 87,448
EMEA 55,062 46,463 17,028 16,826
The Americas 114,848 110,697 106,317 118,576
Asia Pacific 21,969 26,948 2,223 2,952
------------- ------- ------- --------- ---------
Total 296,042 263,463 213,157 225,802
------------- ------- ------- --------- ---------
Disaggregation of revenue
KX FD MRP Total
---------------- ---------------- ---------------- ----------------
2023 2022 2023 2022 2023 2022 2023 2022
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ ------- ------- ------- ------- ------- ------- ------- -------
Type of good or service
Sale of goods - perpetual 1,556 3,589 - - - - 1,556 3,589
Sale of goods - recurring 58,326 39,192 - - 22,446 27,015 80,772 66,207
Rendering of services 20,357 21,637 174,329 147,988 19,028 24,042 213,714 193,667
------------------------------ ------- ------- ------- ------- ------- ------- ------- -------
80,239 64,418 174,329 147,988 41,474 51,057 296,042 263,463
------------------------------ ------- ------- ------- ------- ------- ------- ------- -------
Timing of revenue recognition
At a point in time 1,556 3,589 - - - - 1,556 3,589
Over time 78,683 60,829 174,329 147,988 41,474 51,057 294,486 259,874
------------------------------ ------- ------- ------- ------- ------- ------- ------- -------
80,239 64,418 174,329 147,988 41,474 51,057 296,042 263,463
------------------------------ ------- ------- ------- ------- ------- ------- ------- -------
3. a) (Loss)/earnings per ordinary share
Basic
The calculation of basic (loss)/earnings per share at 28
February 2023 was based on the loss attributable to ordinary
shareholders of GBP4,013k (2022: profit GBP6,427k), and a weighted
average number of ordinary shares in issue of 27,962k (2022:
27,782k).
2023 2022
Pence Pence
per share per share
--------------------------------- ---------- ----------
Basic ( loss)/earnings per share (14.4) 23.1
--------------------------------- ---------- ----------
Weighted average number of ordinary shares
2023 2022
Number Number
'000 '000
---------------------------------------------------------- ------ ------
Issued ordinary shares at 1 March 27,826 27,717
Effect of share options exercised 124 58
Effect of shares issued as remuneration 12 7
---------------------------------------------------------- ------ ------
Weighted average number of ordinary shares at 28 February 27,962 27,782
---------------------------------------------------------- ------ ------
Diluted
The calculation of diluted (loss)/earnings per share at 28
February 2023 was based on the loss attributable to ordinary
shareholders of GBP4,013k (2022: profit GBP6,427k) and a weighted
average number of ordinary shares after adjustment for the effects
of all dilutive potential ordinary shares of 27,962k (2022:
28,036k).
2023 2022
Pence Pence
per share per share
---------------------------------- ---------- ----------
Diluted (loss)/earnings per share (14.4) 22.9
---------------------------------- ---------- ----------
Weighted average number of ordinary shares (diluted)
2023 2022
Number Number
'000 '000
-------------------------------------------------------- ------ ------
Weighted average number of ordinary shares (basic) 27,962 27,782
Effect of dilutive share options in issue - 254
-------------------------------------------------------- ------ ------
Weighted average number of ordinary shares (diluted) at
28 February 27,962 28,036
-------------------------------------------------------- ------ ------
At 28 February 2023 in accordance with IAS 33, due to the loss
in the financial period share options in issue are anti-dilutive
meaning there is no difference between basic and diluted earnings
per share. In the prior year 518,137 shares were excluded from the
diluted weighted average calculation as their effect would have
been anti-dilutive. The average market value of the Group's shares
for the purposes of calculating the dilutive effect of share
options was based on quoted market prices for the year during which
the options were outstanding.
3. b) (Loss)/ earnings before tax per ordinary share
(Loss)/earnings before tax per share are based on loss before
taxation of GBP1,177k (2022: profit GBP8,999k). The number of
shares used in this calculation is consistent with note 3(a)
above.
2023 2022
Pence Pence
per share per share
------------------------------------------------------ ---------- ----------
Basic (loss)/earnings before tax per ordinary share (4.3) 32.4
Diluted (loss)/earnings before tax per ordinary share (4.3) 32.1
------------------------------------------------------ ---------- ----------
Reconciliation from (loss)/earnings per ordinary share to
(loss)/ earnings before tax per ordinary share:
2023 2022
Pence Pence
per share per share
--------------------------------------------- ---------- ----------
Basic (loss)/earnings per share (14.4) 23.1
Impact of taxation charge 10.1 9.3
--------------------------------------------- ---------- ----------
Basic (loss)/earnings before tax per share (4.3) 32.4
--------------------------------------------- ---------- ----------
Diluted (loss)/earnings per share (14.4) 22.9
Impact of taxation charge 10.1 9.2
--------------------------------------------- ---------- ----------
Diluted (loss)/earnings before tax per share (4.3) 32.1
--------------------------------------------- ---------- ----------
(Loss)/earnings before tax per share is presented to facilitate
pre-tax comparison returns on comparable investments.
3. c) Adjusted earnings after tax per ordinary share
Adjusted earnings after tax per share is based on an adjusted
profit after taxation of GBP9,864k (2022: GBP9,051k). The adjusted
profit after tax has been calculated by adjusting the loss after
tax GBP4,013k (2022: profit GBP6,427k) for the amortisation of
acquired intangibles after tax effect of GBP2,565k (2022:
GBP2,715k), share based payment and related charges after tax
effect of GBP353k (2022: GBP1,353k), restructure and
non-operational costs after tax effect of GBP14,781k (2022:
GBP4,473k), profit on disposal of associate after tax and share of
profit of associate after tax effect of GBP3,017k (2022:
GBP7,206k), the profit on foreign currency translation after tax
effect of GBP1,707k (2022: loss GBP1,485k), finance costs after tax
effect of GBP902k (2022: GBPnil) and finance income from sale of
investment after tax effect of GBPnil (2022: GBP197k). The number
of shares used in this calculation is consistent with note 3(a)
above.
2023 2022
Pence Pence
per share per share
------------------------------------------------------- ---------- ----------
Adjusted basic earnings after tax per ordinary share 35.3 32.6
Adjusted diluted earnings after tax per ordinary share 35.3 32.3
------------------------------------------------------- ---------- ----------
4. Property, plant and equipment
Group
Leasehold Plant and Office Right-of-use
improvements equipment furniture assets Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- ------------- ---------- ---------- ------------ --------
Cost
At 1 March 2022 5,444 14,372 1,366 30,171 51,353
Additions 441 2,362 137 1,035 3,975
Disposals (104) (34) - (880) (1,018)
Reclass 1,468 (1,468) - - -
Exchange adjustments 230 624 89 1,443 2,386
--------------------- ------------- ---------- ---------- ------------ --------
At 28 February 2023 7,479 15,856 1,592 31,769 56,696
--------------------- ------------- ---------- ---------- ------------ --------
Depreciation
At 1 March 2022 3,544 8,544 1,116 9,806 23,010
Charge for the year 671 2,257 171 4,166 7,265
Disposals (32) - - (451) (483)
Reclass (38) (9) 47 - -
Exchange adjustments 116 539 28 628 1,311
--------------------- ------------- ---------- ---------- ------------ --------
At 28 February 2023 4,261 11,331 1,362 14,149 31,103
--------------------- ------------- ---------- ---------- ------------ --------
Leasehold Plant and Office Right-of-use
improvements equipment furniture assets Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- ------------- ---------- ---------- ------------ --------
Cost
At 1 March 2021 6,224 11,886 1,349 32,590 52,049
Additions 318 2,442 17 377 3,154
Disposals (1,144) (10) - (3,131) (4,285)
Exchange adjustments 46 54 - 335 435
--------------------- ------------- ---------- ---------- ------------ --------
At 28 February 2022 5,444 14,372 1,366 30,171 51,353
--------------------- ------------- ---------- ---------- ------------ --------
Depreciation
At 1 March 2021 3,321 6,845 894 7,448 18,508
Charge for the year 531 1,673 219 3,885 6,308
Disposals (337) (10) - (1,636) (1,983)
Exchange adjustments 29 36 3 109 177
--------------------- ------------- ---------- ---------- ------------ --------
At 28 February 2022 3,544 8,544 1,116 9,806 23,010
--------------------- ------------- ---------- ---------- ------------ --------
Carrying amounts
At 1 March 2021 2,903 5,041 455 25,142 33,541
--------------------- ------------- ---------- ---------- ------------ --------
At 28 February 2022 1,900 5,828 250 20,365 28,343
--------------------- ------------- ---------- ---------- ------------ --------
At 28 February 2023 3,218 4,525 230 17,620 25,593
--------------------- ------------- ---------- ---------- ------------ --------
5. Intangible assets and goodwill
Group
Internally
Customer Acquired Brand developed
Goodwill lists software name software Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- -------- -------- --------- -------- ---------- --------
Cost
Balance at 1 March 2022 106,501 12,834 29,769 743 101,540 251,387
Additions - - 330 - - 330
Development costs - - - - 23,138 23,138
Exchange adjustments 10,141 1,083 2,877 59 978 15,138
-------------------------- -------- -------- --------- -------- ---------- --------
At 28 February 2023 116,642 13,917 32,976 802 125,656 289,993
-------------------------- -------- -------- --------- -------- ---------- --------
Amortisation
Balance at 1 March 2022 - 11,832 26,106 703 57,139 95,780
Amortisation for the year - 944 1,816 37 11,534 14,331
Exchange adjustment - 1,003 2,527 55 637 4,222
-------------------------- -------- -------- --------- -------- ---------- --------
At 28 February 2023 - 13,779 30,449 795 69,310 114,333
-------------------------- -------- -------- --------- -------- ---------- --------
Internally
Customer Acquired Brand developed
Goodwill lists software name software Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- -------- -------- --------- -------- ---------- --------
Cost
Balance at 1 March 2021 103,527 12,467 28,535 733 83,531 228,793
Development costs - - - - 18,553 18,553
Additions - - 378 - - 378
Exchange adjustments 2,974 367 856 10 (544) 3,663
-------------------------- -------- -------- --------- -------- ---------- --------
At 28 February 2022 106,501 12,834 29,769 743 101,540 251,387
-------------------------- -------- -------- --------- -------- ---------- --------
Amortisation
Balance at 1 March 2021 - 10,426 22,619 652 47,583 81,280
Amortisation for the year - 1,083 2,475 42 10,217 13,817
Exchange adjustment - 323 1,012 9 (661) 683
-------------------------- -------- -------- --------- -------- ---------- --------
At 28 February 2022 - 11,832 26,106 703 57,139 95,780
-------------------------- -------- -------- --------- -------- ---------- --------
Carrying amounts
At 1 March 2021 103,527 2,041 5,916 81 35,948 147,513
-------------------------- -------- -------- --------- -------- ---------- --------
At 28 February 2022 106,501 1,002 3,663 40 44,401 155,607
-------------------------- -------- -------- --------- -------- ---------- --------
At 28 February 2023 116,642 138 2,527 7 56,346 175,660
-------------------------- -------- -------- --------- -------- ---------- --------
6.Loans and borrowings
This note provides information about the contractual terms of
the Group and Company's interest-bearing loans and borrowings,
which are measured at amortised cost.
Group Company
---------------- ----------------
2023 2022 2023 2022
GBP'000 GBP'000 GBP'000 GBP'000
------------------------ ------- ------- ------- -------
Current liabilities
Secured bank loans 36,499 5,311 36,499 5,311
Lease liabilities 3,412 3,743 1,007 1,445
------------------------ ------- ------- ------- -------
39,911 9,054 37,506 6,756
------------------------ ------- ------- ------- -------
Non-current liabilities
Secured bank loans - 42,925 - 42,926
Lease liabilities 17,026 19,579 7,522 8,549
------------------------ ------- ------- ------- -------
17,026 62,504 7,522 51,475
------------------------ ------- ------- ------- -------
Terms and repayment schedule
After the year end, we refinanced our banking facilities, which
had been due to expire in June 2024, on improved terms. The total
facility remains at GBP130m and is entirely comprised of a
revolving credit facility, replacing a GBP65m term loan and GBP65m
revolving credit facility. The interest rate payable is SONIA/SOFR
plus a fixed margin that depends on the level of debt relative to
adjusted EBITDA. The margin on the new revolving credit facility is
equal to 1.85% to 2.85%, this compares favourably to the previous
margin of 2% to 3%. The lead arranger for the facility remains Bank
of Ireland, with continued participation from Barclays and AIB and
new participation from HSBC.
7. Subsequent events
On 19 May 2023 the parent company FD Technologies plc renewed
its banking facilities, which had been due to expire in June 2024.
Further details of the loan financing arrangement are included in
note 6.
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FR NKBBKCBKDQPB
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May 23, 2023 02:00 ET (06:00 GMT)
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FD Technologies (AQSE:FDP.GB)
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