TIDMCBUY
RNS Number : 5304Y
Cloudbuy PLC
22 August 2018
22 August 2018
cloudBuy plc
("cloudBuy" or the "Company")
Interim Results for the six months ended 30 June 2018
cloudBuy plc (AIM: CBUY), the global provider of cloud-based
ecommerce marketplaces and B2B buyer and supplier solutions, today
announces its unaudited interim results for the six months ended 30
June 2018.
Key Points
Operational
-- PHBChoices continues to make progress with an increase in the
number of PHBs spending on the system and the number of CCGs
preparing to onboard also increasing. New prospect CCGs also
continue to be added to the pipeline.
-- Contracts won in 2016 continue to generate revenue as
detailed below, although non-renewal of older legacy contracts and
a continual decline in Company Formation revenue has resulted in an
overall reduction in revenue.
-- The impact of cost reductions made in 2017 and 2018 have
significantly reduced the cost base.
Financial
-- Operating loss decreased by 39% to GBP0.793m (2017:
GBP1.296m) after a charge for share based payments of GBP0.054m
(2017: GBP0.248m). Excluding share based payments, operating loss
reduced by 29%.
-- Net cash outflow was down to GBP0.855m (2017 excluding
fundraising, net cash outflow: GBP1,043m), a reduction 18%.
-- Cash and cash equivalents increased to GBP1.605m at 30 June 2018 (30 June 2017: GBP1.469m)
No new funding was raised in H1 2018.
-- Revenue decreased by 21% from H1 2017 to GBP0.651m.
-- Administrative expenses, excluding share based payments,
decreased by 26% to GBP1.282m (2017: GBP1.732m).
Ronald Duncan, Executive Chairman and CIO of cloudBuy,
commented, "We continued to reduce our losses and cash burn despite
a reduction in revenue from legacy contracts. PHBChoices remains
the focus for growth, and we are making progress. During the second
half of the year we have seen an increase in CCGs contacting the
PHBChoices sales team directly asking about signing up, whereas
previously we were exclusively reaching out to them. We believe
that this is as a consequence of the drive from NHS England where
they have instructed CCGs as follows;
"By April 2019, NHS England expects that unless there are
exceptional circumstances, everyone living in their own home who is
in receipt of NHS Continuing Healthcare funding will be offered a
personal health budget".
This is a 180 degree change from the current system where the
default is a CCG managed budget with only a very few individuals
being offered a PHB. It is clear from our discussions with CCGs
that this means that they are now aware that they have to have
processes and systems in place to manage much larger numbers of
PHB's by April 2019.
Management continues to believe that expected increases in
revenue and cost reductions will mean that the business will reach
cash break even without further funding being required."
For further information, please contact:
cloudBuy plc Tel: 0118 963
David Gibbon, CFO 7000
Arden Partners plc - NOMAD and broker Tel: 020 7614
5900
Paul Shackleton
About cloudBuy plc
cloudBuy, (AIM: CBUY), provides cloud solutions for buyers and
sellers - and brings them together to trade securely and ethically
via an increasing number of public e-marketplaces and private
purchasing portals around the world, powered by cloudBuy ecommerce
technology.
cloudBuy solutions for buyers help B2B purchasers understand and
control their spend, to reduce costs and increase value. Our
cloudSell solutions enable sellers of all sizes, from start-ups to
corporates, reach new customers and grow their business.
cloudBuy's technology platform powers web sites, public
marketplaces and private purchasing portals that enable all types
of online interactions and relationships including, citizen and
business to government; consumer to business; and business to
business.
For more information visit: www.cloudbuy.com
CHAIRMAN'S STATEMENT
Revenue
We continue to focus on our key projects.
PHBChoices
During 2018 we have seen a change in momentum as NHS England has
increased the pressure on CCGs to meet their targets for PHB's for
individuals with Continuing Healthcare (CHC) needs. There has also
been a consultation on the extension of individuals legal rights to
have a PHB's to cover additional groups with care needs.
From April 2019 every CCG must offer any individual with CHC
needs a personal health budget as the default option for the
management of their ongoing care.
We are also seeing a more joined up approach from Health and
Local Government with a number of Local Authorities approaching us
about using PHBChoices for all of their direct payment and joint
funded recipients.
NHS Shared Business Services has invested in increased sales and
marketing activity over this period, which is continuing and has
had a positive impact on the pipeline of CCGs looking to adopt
PHBChoices.
United Overseas Bank in Singapore
We are providing a marketplace for the bank's SME customers,
giving access to special offers and competitive pricing from a
range of flagship suppliers. The initial, anchor suppliers are all
large organisations with whom the bank has a strategic
relationship. The marketplace is now live in Singapore, with a
wider Asia Pacific roll out to new countries being considered by
UOB for implementation in 2019. The contract is consistently
revenue generating with set up fees and SaaS licence fees being
generated in H1 and transaction fees expected to commence in H2. We
are currently working with additional anchor suppliers to integrate
their booking and inventory systems with the UOB marketplace.
York Schools
Our project with the York Region District School Board in
Ontario is live and producing ongoing SaaS licence and to date, a
small amount of transaction fees which are expected to grow in H2
and into 2019. We are presenting to additional Ontario School
Boards and hope to secure further contracts which will generate
SaaS licence and implementation fees in the future.
HealthShare New South Wales
Our Spend Analytics project in Australia is live and providing
spend analysis to 33 hospitals and health organisations in the
region. We have identified significant savings opportunities for
our client during implementation. The contract continues to be
revenue generating with SaaS licence fees although revenue is lower
than in in the comparable period as implementation has been
completed.
University of Exeter
Implementation of this project progressed in H1, generating SaaS
licence and implementation fees. This system has gone live in
August 2018.
Non-Strategic Legacy Contracts and Company Formations
A number of our long standing UK public sector clients chose not
to renew their contracts in H2 2017 and H1 2018. In addition,
revenue from Company Formations has continued to decline in line
with prior periods. These two areas of declining revenue have
resulted in a reduction in overall revenue.
Funding
No new funding was raised in the 6 months to 30 June 2018 (2017:
GBP1.476m).
Financial Results
Turnover showed a decrease of 21% compared to H1 2017. Operating
losses were reduced by GBP0.503m to GBP0.793m as a result of the
reduction in administrative expenses and share based payments.
Cash and cash equivalents as at 30 June 2018 were GBP1.605m (30
June 2017: GBP1.469m).
Outlook
Consistent with our ongoing strategy, PHBChoices remains our key
focus for resource allocation to deliver future revenue growth.
Some progress towards revenue growth from this contract has been
made in H1 and based on pipeline development in the year to date,
growth from PHBChoices is expected to accelerate during the
remainder of 2018 and into 2019.
It is expected that losses will continue to reduce during the
remainder of 2018.
Ronald Duncan
Executive Chairman and CIO
21 August 2018
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
Notes 6 months to 6 months to Year ended
30 June 30 June 31 Dec
2018 2017 2017
--------------- ---------------
GBP'000 GBP'000 GBP'000
--------------- --------------- ---------------------------- ---------------------------- ----------------------------
Revenue 2 651 819 1,504
Cost of sales (107) (134) (227)
--------------- --------------- ---------------------------- ---------------------------- ----------------------------
Gross Profit 543 685 1,277
Administrative
expenses (1,282) (1,733) (3,463)
Share based
payments (54) (248) (164)
--------------- --------------- ---------------------------- ---------------------------- ----------------------------
Operating loss (793) (1,296) (2,350)
Finance Income -interest - - -
received
Finance costs (289) (184) (398)
--------------- --------------- ---------------------------- ---------------------------- ----------------------------
Loss on ordinary activity before
taxation (1,082) (1,480) (2,748)
Income tax
expenses - 136
--------------- --------------- ---------------------------- ---------------------------- ----------------------------
Loss for the
year
attributable
to equity
shareholder of
parents (1,082) (1,480) (2,612)
Other
comprehensive
income - item
which will or
may be
reclassified to
profit and loss
Exchange gain
arising on
translation of
foreign
operation 97 (9) 115
Total
Comprehensive
Income (985) (1,489) (2,497)
--------------- ---------------------------- ----------------------------
Loss per share - basic and
diluted 0.8p 1.1p 1.9p
-------------------------------- ---------------------------- ---------------------------- ----------------------------
Revenue and operating loss all derive from continuing
operations.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED)
Notes 30 June 30 June 31 Dec
2018 2017 2017
------------------------ -------------
GBP'000 GBP'000 GBP'000
------------------------ ------------- ----------------------- ----------------------- -----------------------
Assets
Non-current assets
Other intangible assets 7 7 4
Property, plant and
equipment 45 152 64
------------------------ ------------- ----------------------- ----------------------- -----------------------
52 159 68
------------------------ ------------- ----------------------- ----------------------- -----------------------
Current Assets
Trade and other
receivables 408 562 464
Taxes recoverable - 60 -
Cash and cash
equivalents 1,605 1,469 2,460
------------------------ -------------
2,013 2,091 2,924
------------------------ ------------- ----------------------- -----------------------
Total assets 2,065 2,250 2,992
------------------------ ------------- ----------------------- ----------------------- -----------------------
Liabilities
Current liabilities
Trade and other payables (1,221) (1,029) (1,164)
(1,221) (1,029) (1,164)
------------- ----------------------- -----------------------
Non-current liabilities
Financial liabilities -
borrowings 4
Non-convertible loan
notes (1,718) (1,633) (1,674)
Convertible loan notes (4,021) (2,822) (4,001)
(5,739) (4,455) (5,675)
------------- ----------------------- -----------------------
Total liabilities (6,960) (5,484) (6,839)
------------------------ ------------- ----------------------- ----------------------- -----------------------
Total net
(liabilities)/assets (4,895) (3,234) (3,847)
------------------------ ------------- ----------------------- ----------------------- -----------------------
Shareholder's equity
Called up share capital 1,304 1,304 1,304
Share premium account 5,534 5,534 5,534
Other reserve 2,220 1,737 2,215
Share based payment
reserve 1,205 1,235 1,151
Currency translation (53) (318) (194)
Accumulated losses (15,105) (12,726) (13,858)
------------------------ ------------- ----------------------- ----------------------- -----------------------
Total equity
attributable to equity
shareholders of the
parent (4,895) (3,234) (3,847)
------------------------ ------------- ----------------------- ----------------------- -----------------------
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
6 months to 6 months to Year ended
30 June 30 June 31 Dec
2018 2017 2017
--------------------------------------
GBP'000 GBP'000 GBP'000
-------------------------------------- ------------------------- ------------------------ -------------------------
Cash flow from operating activities
Loss before taxation (1,247) (1,480) (2,750)
Adjustments for :
Finance income/cost 289 184 398
Depreciation of property, plant and
equipment 19 38 109
Amortisation of other Intangible
assets 2 3 6
Share based payments 54 248 164
Changes in working capital
Trade and other receivables 55 (40) 59
Trade and other payables (164) (125) 208
Currency translation 141 (9) 134
-------------------------------------- ------------------------- ------------------------ -------------------------
Net cash used by operations (851) (1,181) (1,673)
Tax (paid)/received - 147 -
-------------------------------------- ------------------------- ------------------------ -------------------------
Net cash used in operating
activities (851) (1,034) (1,673)
-------------------------------------- ------------------------- ------------------------ -------------------------
Cash flows from investing activities
Interest paid (1)
Purchase of other intangible assets - (1) -
Purchase of property, plant and
equipment (5) (8) (11)
Net cash used in investing
activities (5) (9) (12)
-------------------------------------- ------------------------- ------------------------ -------------------------
Cash flows from financing activities
Issue of loan notes - 1,476 3,109
-------------------------------------- -------------------------
Net cash generated from financing - 1,476 3,109
-------------------------------------- ------------------------- ------------------------
Net increase/(decrease) in cash and
cash equivalents (855) 433 1,424
Cash and cash equivalents at
beginning of period 2,460 1,036 1,036
Cash and cash equivalents at end of 1,605 1,469 2,460
period
-------------------------------------- ------------------------- ------------------------ -------------------------
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(UNAUDITED)
Share Share Other Share Currency Accumulated Share-holder's
Capital premium reserve based translation losses equity
payment
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------- ----------- ----------- ---------- ---------- -------------- -------------- ---------------
At 01 January 2017 1,304 5,534 1,594 987 (309) (11,246) (2,135)
Share issued in - - - - - - -
the
year
Convertible loan
notes issued in
the
year - - 143 - - - 143
Share based
payments - - - 248 - - 248
Exchange in year - - - - (9) - (9)
Retained loss for
the year - - - - - (1,480) (1,480)
At 30 June 2017 1,304 5,534 1,737 1,235 (318) (12,726) (3,234)
=================== =========== =========== ========== ========== ============== ============== ===============
Share issued in - - - - - - -
the
year
Convertible loan
notes issued in
the
year - - 478 - - - 478
Share based
payments - - - (84) - - (84)
Exchange in year - - - - 124 - 124
Retained loss for
the year - - - - - (1,131) (1,131)
-------------------
At 31 December
2017 1,304 5,534 2,215 1,151 (194) (13,858) (3,847)
=================== =========== =========== ========== ========== ============== ============== ===============
Share issued in - - - - - - -
the
year
Convertible loan
notes issued in
the
year - - 5 - - - 5
Share based
payments - - - 54 - - 54
Exchange in year - - - - 141 - 141
Retained loss for
the year - - - - - (1,247) (1,247)
------------------- ----------- ----------- ---------- ---------- -------------- -------------- ---------------
At 30 June 2018 1,304 5,534 2,220 1,205 (53) (15,105) (4,895)
------------------- ----------- ----------- ---------- ---------- -------------- -------------- ---------------
NOTES TO THE FINANCIAL STATEMENTS
1. Basis of preparation
These interim financial statements have been prepared in
accordance with the accounting policies set out in the Annual
Report and Accounts for the year ended 31 December 2017 and the
interpretation of those accounting standards underlying the
accounting policies. IAS 34, Interim Financial Reporting, has not
been applied. The interim financial statements have been issued in
accordance with the AIM Rules of the London Stock Exchange and are
unaudited. The financial information set out does not constitute
statutory accounts for the purposes of section 434 of the Companies
Act 2006. The auditors' report on the statutory accounts for the
year ended 31 December 2017 which have been filed with the
Registrar of Companies was unqualified, did not draw attention to
any matters by way of emphasis, and did not contain a statement
under 498(2) or 498(3) of the Companies Act 2006.
The preparation of financial statements requires estimates and
assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Although the estimates are based on management's best
knowledge of the amounts, events or actions, actual results may
differ from those estimates.
This announcement which was approved by the board of cloudBuy
plc on 21 August 2018 will be published on the company's website at
www.cloudbuy.com.
2. Revenue (unaudited)
Below is an analysis of revenue recognised and gross profit
attributable between reportable segments
6 months to 6 months to Year ended
30 June 30 June 31 Dec
2018 2017 2017
GBP'000 GBP'000 GBP'000
Company formation services 166 209 377
Web and ecommerce services 465 579 1,067
Coding International Limited 20 31 60
651 819 1,504
========================== ========================== ==========================
Gross Profit
Company formation services 93 112 219
Web and ecommerce services 431 542 999
Coding International Limited 20 31 60
543 685 1,278
----------------------------- -------------------------- --------------------------
3. Loss per share (unaudited)
The calculations for loss per share are based on the weighted
average number of shares in issue during the year 129,968,645 (6
months to 30 June 2017: 132,432,664; year ended 31 December 2017:
129,968,645) and the following losses:
6 months to 6 months to Year ended
30 June 30 June 31 Dec
2018 2017 2017
GBP'000 GBP'000 GBP'000
Unadjusted earnings:
Loss for the year attributable to equity
shareholders of the parent (1,082) (1,480) (2,612)
Add back:
Share-based payments 54 248 164
Adjusted earnings (1,028) (1,232) (2,448)
----------------------- ----------------------
The share options and warrants are not dilutive as they would
not increase the loss per share in the year.
The basic and diluted loss per share calculated on the
unadjusted earnings is 0.8p (6 months to 30 June 2017: 1.1p; year
ended 31 December 2017: 1.9p).
4. Convertible Loan Stock and Loan Stock
The principal terms of the loan instruments are as follows:
"Existing" Loan Notes
Instrument (the Interest bearing loan note instrument constituting 4,172,562
"Instrument") GBP1.00 secured convertible loan notes and 1,577,438 GBP1.00
secured non-convertible loan notes
-------------------- ---------------------------------------------------------------
Amount Up to GBP5,750,000
-------------------- ---------------------------------------------------------------
Term 10 year term with an early repayment option on 5th anniversary
-------------------- ---------------------------------------------------------------
Drawdown Minimum of GBP3,274,300 in first draw down then in increments
of a minimum of GBP1 million in size
-------------------- ---------------------------------------------------------------
Interest 2.33%
-------------------- ---------------------------------------------------------------
Borrower Covenants cloudBuy plc cannot issue any instrument that is pari passu
or senior to the Instrument and/or the Loan Notes without
the consent of the holder of the Loan Notes
-------------------- ---------------------------------------------------------------
Lender Covenants None
-------------------- ---------------------------------------------------------------
Conversion price 6.5 pence (conversion at any time in full or in part at
the election of loan note holder) or 1 penny (in the event
that the outstanding amount of the Convertible Loan Notes
(including principal and interest) has not been repaid
or converted by the Final Redemption Date)
-------------------- ---------------------------------------------------------------
Security The Loan Notes will be secured, by way of a secondary charge
over the Company's assets, with the charge ranking behind
the Company's clearing bank facility provider from time
to time where the priority charge over the Company assets
will be limited to GBP300,000 in value
-------------------- ---------------------------------------------------------------
Future Investment Mr. Roberto Sella to have the right, but not the obligation,
to participate in future equity fundraising by the Company
at 80% of the price of other investors up to the end of
the Term
-------------------- ---------------------------------------------------------------
"New" (December 2017) Loan Notes, figures are for the amount
issued in December 2017, A further potential GBP1,700,000 is
available under the facility.
Instrument (the Interest bearing loan note instrument constituting 1,700,000
"Instrument") GBP1.00 secured convertible loan notes
-------------------- ---------------------------------------------------------------
Amount GBP1,700,000
-------------------- ---------------------------------------------------------------
Term 10 year term with an early repayment option on 5th anniversary
-------------------- ---------------------------------------------------------------
Drawdown Single amount drawn of GBP1,700,000
-------------------- ---------------------------------------------------------------
Interest 2.33%
-------------------- ---------------------------------------------------------------
Borrower Covenants cloudBuy plc cannot issue any instrument that is pari passu
or senior to the Instrument and/or the Loan Notes without
the consent of the holder of the Loan Notes
-------------------- ---------------------------------------------------------------
Lender Covenants None
-------------------- ---------------------------------------------------------------
Conversion price 2.0 pence (conversion at any time in full or in part at
the election of loan note holder) or 1 penny (in the event
that the outstanding amount of the Convertible Loan Notes
(including principal and interest) has not been repaid
or converted by the Final Redemption Date)
-------------------- ---------------------------------------------------------------
Security The Loan Notes will be secured, by way of a secondary charge
over the Company's assets, with the charge ranking behind
the Company's clearing bank facility provider from time
to time where the priority charge over the Company assets
will be limited to GBP300,000 in value
-------------------- ---------------------------------------------------------------
5. Disclosure of Concert Party Shareholdings
The following details are required to be disclosed in this
report to comply with the conditions of The Takeover Code. Mike
Pasternak who is a director of cloudBuy is deemed to be acting in
concert with Roberto Sella for the purposes of the Takeover Code.
The holdings of Roberto Sella and Mike Pasternak at 30 May 2018 and
30 June 2018 as follows:
Shareholder Interest in issued share Percentage interest in Total interest on the Percentage total
capital on 30 May 2018 issued share capital on basis that the further assuming no other
30 May 2018 GBP1,700,000 New CLS ordinary shares are
available under the issued
facility
are issued in the
future and all CLS
including PIK notes are
converted immediately
before
their final redemption
date (10 years after
issue)
Roberto Sella 14,700,000 11.27% 301,204,965 72.24%
Mike Pasternak 2,150,000 1.65% 2,150,000 0.52%
Total 16,850,000 12.92% 303,354,965 72.76%
------------------------ ------------------------ -----------------------
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR MMGZRVZGGRZG
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