TIDMDSG
RNS Number : 0289S
Dillistone Group PLC
28 September 2017
Dillistone Group Plc
("Dillistone", the "Company" or the "Group")
Interim Results
Dillistone Group Plc, the AIM quoted supplier of software and
services for the recruitment sector, is pleased to announce its
interim results for the six months ended 30 June 2017.
Highlights include:
Operational:
-- Announcement of phase one launch of GatedTalent, the innovative global executive database.
-- Funding arrangement of GBP400k agreed via Directors'
convertible loan notes to help continue GatedTalent marketing,
development and rollout - to be drawn down during Q4 2017.
Financial:
-- Revenue up 0.4% to GBP4.829m
-- Recurring revenue up 10% to GBP3.711m
-- Recurring revenues represent 77% of total revenue
-- Recurring revenues cover 90% of administrative and product development cost base
-- Both Dillistone Systems and Voyager Software divisions profitable
-- Loss for period after acquisition related items and costs
charged against profit in respect of GatedTalent
-- Cash balances of GBP1.114m at 30 June 2017 (2016: GBP1.611m)
and debt of GBP0.072m (2016: GBP0.242m)
-- No interim dividend proposed (2016: 1.375p) to support
funding of GatedTalent product development
Commenting on the results, the new product launch and prospects,
Mike Love, Non-Executive Chairman, said:
"As previously announced, trading in the first few months of the
year was challenging, although we have seen some improvement in
incoming orders since then.
"We are pleased that recurring revenues in both divisions are at
record levels providing good forward visibility of cash flows and
largely covering the Group's administrative and product development
cost base.
"The early response to our new product GatedTalent is extremely
positive and we are excited at its potential. This new product is
essentially a start up being developed within the auspices of an
established business. We believe that it has the potential to
transform the nature of our business and to deliver significant
shareholder value.
"As clear evidence of our belief in the opportunity, I am
pleased to report that the Directors and PDMRs have entered into an
agreement to subscribe for convertible loan notes of GBP400,000.
The Group received several indicative offers of funding from both
existing and new investors. These offers included both debt and
equity options. The Directors and PDMRs' loan is in financial terms
equivalent to the best offer received but without any of the
constraints on the business. This money will be used to help fund
the development and rollout of GatedTalent. No Interim dividend
will be paid at this time and future dividends will depend on the
performance of the Group."
Dr Mike Love
Chairman
Results and New Product Webinar - A webinar covering
Dillistone's half year results and the launch of GatedTalent will
be held at 3pm on Tuesday 3 October 2017 hosted by Jason Starr,
Chief Executive, and Julie Pomeroy, Finance Director. Those wishing
to participate should register at
https://attendee.gotowebinar.com/register/2506095248269576963 or
contact Tom Cooper on 020 7933 8780, 0797 122 1972 or
tom.cooper@walbrookpr.com.
This announcement contains inside information for the purposes
of Article 7 of Regulation 596/2014.
Enquiries:
Dillistone Group
Plc
Mike Love Chairman 020 7749 6100
Jason Starr Chief Executive 020 7749 6100
Julie Pomeroy Finance Director 020 7749 6100
WH Ireland Limited (Nominated
adviser)
Head of Corporate
Chris Fielding Finance 020 7220 1650
Walbrook PR
Tom Cooper /
Paul Vann 020 7933 8780
0797 122 1972
tom.cooper@walbrookpr.com
Notes to Editors:
Dillistone Group Plc (www.dillistonegroup.com) is a leader in
the supply and support of software and services to the recruitment
industry. It has five brands operating through three divisions:
Dillistone Systems, which targets the executive search industry
(www.dillistone.com); Voyager Software, which targets other
recruitment markets (www.voyagersoftware.com); and GatedTalent, the
next generation executive recruitment database
(www.GatedTalent.com).
Dillistone has made three acquisitions: Voyager Software in
September 2011, FCP Internet in July 2013 and ISV Software in
September 2014. The Group operates under the FileFinder, Infinity,
Evolve, ISV and GatedTalent brands.
Dillistone was admitted to AIM, a market operated by the London
Stock Exchange plc, in June 2006. The Group employs over 100 people
globally with offices in London (head office) Basingstoke and
Southampton, Frankfurt, New Jersey and Sydney.
Chairman's Statement
As our financial results show and as previously announced, the
Group has had a challenging first half to the year with revenue
growth not keeping pace with increased costs.
The continuing move to SaaS related products from outright
purchase models has contributed to a 10% growth in recurring
revenue and a corresponding GBP0.256m reduction in non-recurring
revenue. Recurring revenues were positively impacted by exchange
rates but importantly grew in each of our divisions at a local
currency level. This shift in revenue type is beneficial to the
Group in the longer term.
The cost increase is due in part to our investment in
GatedTalent (loss of GBP0.182m) which we do not expect to start
generating revenue until 2018.
Total revenue increased by 0.4% to GBP4.829m. Recurring revenues
represented 77% of revenues. Loss after tax, which includes the
GatedTalent expenditure, was GBP0.024m (2016 profit:
GBP0.489m).
Despite this, we are pleased that recurring revenues in both
divisions are at record levels providing good forward visibility
and largely covering the Group's administrative and product
development cost base.
The Board is pleased to report that the Directors and PDMRs have
agreed to put in place a GBP0.400m convertible loan note to provide
the continued funding for GatedTalent. The loan notes carry an
interest rate of 8.15% and a conversion price of 71.6p. The loan
note has a 3-year duration but with various rights for early
conversion or repayment. Further details are included in the press
release issued on 28 September 2017.
As announced in June, the Group has been informed that a
contract with a major client is likely to expire later this year or
early next. This contract, which is with a client using a legacy
product acquired as a result of an acquisition made several years
ago, is worth in the region of GBP600,000 per annum in contribution
terms to the Group. An amendment to the contract has been agreed
which will give the client the rights to terminate at 3 months'
notice during the contract term to 30 November 2018 (which can be
extended by agreement). At this stage, the timing of the exit is
unclear and so no impairment has been recognised in these interim
statements nor has a detailed review been carried out of the
remaining useful economic life. A full and comprehensive review
will be carried out at the yearend when the position should be
clearer. Any required adjustment will have no impact on cash.
Divisional review
Dillistone Systems had a slow start to the year but we have seen
improvement since then in terms of the volume and value of new
business wins. However, a significant majority of our new clients
have been new or young businesses, with relatively few users,
purchasing on a subscription, as opposed to a licence model, which
made it impossible for the business to catch up on the poor start.
The Board is pleased to note that the division is currently in
talks with a number of larger potential clients.
The introduction of GDPR in May 2018 and the launch of
GatedTalent (www.GatedTalent.com), which will link directly with
FileFinder, are both expected to result in an improvement in sales
over the next 12 months.
Dillistone Systems (www.dillistone.com) reported revenues of
GBP2.244m (2016: GBP2.265m) with recurring revenues up 14% to
GBP1.833m and non-recurring revenues down 37% to GBP0.411m.
As anticipated, Divisional profits are down to GBP0.030m in the
period as cost increases exceeded growth in revenue.
Voyager Software (www.voyagersoftware.com) has seen revenue grow
by 2% in the period to GBP2.585m (2016: GBP2.546m) with recurring
revenue up 6% to GBP1.878m.
We are continuing to invest in extending our Infinity product,
in particular to further support the temporary recruitment sector
as well as the universal demand for real-time data analytics by
adding native Microsoft Power BI integration. Other investments
include adding to our mobile app suite to cover candidate
availability and job searching, as well as integrating with the
latest ISV Online skills testing and training solution.
Divisional profits fell 15% to GBP0.350m in the period, in part
due to increased depreciation and amortisation charges up GBP0.101m
on 30 June 2016.
As mentioned GatedTalent (www.GatedTalent.com) is our new
product which will be sold through our wholly owned subsidiary, and
new division, GatedTalent Limited. GatedTalent is a new portal
designed to allow executives to share their own information with
recruiters. Further information is provided in a separate
announcement. It is not expected to generate revenue until 2018. In
the period, costs of GBP0.182m were charged against profit and
GBP0.093m was capitalised as development expenditure.
Financial Performance
Revenue in the six months ended 30 June 2017 increased by 0.4%
to GBP4.829m (2016: GBP4.811m). Recurring revenues increased by 10%
to GBP3.711m over the comparable period last year (2016: GBP3.384m)
and represented 77% of total revenues (2016: 70%). Non-recurring
revenues were down at GBP0.873m (2016: GBP1.129m). Revenue
benefited slightly from the fall in sterling; using 2016 rates
revenue for the period would have been GBP4.664m.
Cost of sales increased by 13% in H1 2017 mainly due to the
continued roll out of third party data centres for hosting our
cloud products. Administration expenses rose 16% in H1 2017, mainly
due to increased salary costs and GBP0.182 million of expenditure
associated with the development of GatedTalent. Depreciation and
amortisation increased 18% to GBP0.551m (2016: GBP0.467m).
Administrative costs also included GBP0.189m (2016: GBP0.189m)
relating to the amortisation of acquisition intangibles.
EBITDA fell 44% to GBP0.670m (2016: GBP1.204m). Total
depreciation and amortisation, including amortisation of
acquisition intangibles, increased to GBP0.740m (2016: GBP0.656m)
resulting in a loss before tax of GBP0.075m (2016: profit
GBP0.538m).
There is a tax credit for the period of GBP0.051m (2016: charge
GBP0.049m). The 2016 and 2017 tax charge and credit have benefited
from claims in the UK for research and development tax credits
reflecting the continuing development of our products and losses
generated by GatedTalent.
Cash generated from operating activities remained strong at
GBP1.064m (2016: GBP1.347m). Total cash flow in the 6 months ended
30 June 2017 showed a net outflow of GBP0.434m (2016: outflow
GBP0.070m). The main elements of non-operating expenditure related
to dividends paid in the period of GBP0.551m (2016: GBP0.541m) and
investment in new product development of GBP0.595m (2016:
GBP0.539m) and deferred consideration payments in respect of
acquisitions GBP0.220m (2016: GBP0.212m). At 30 June 2017, we had
cash reserves of GBP1.114m (2016: GBP1.611m) and GBP0.072m in
borrowings (2016: GBP0.242m).
In view of the fund raising carried out to develop GatedTalent,
we have decided not to pay an interim dividend. Future dividends
will depend on Group performance.
IFRS 15
IFRS 15 comes into force on 1 January 2018. The Group is working
on fully understanding the implications of this new standard. The
major impact is likely to be in respect of various outright licence
sales which require a support contract where some of the
non-recurring licence income will need to be spread. Other
adjustments may be required. The introduction of IFRS 15 is also
likely to mean prior year numbers will need to be restated.
Strategy
The Group believes that the launch of GatedTalent has the
potential to be transformational for the Group, taking it from a
supplier of CRM solutions in a crowded market to potentially being
the custodian of one of the World's largest private pools of
executive drafted biographical information. If successful, this new
platform has the potential to be highly profitable in its own
right, while also delivering a very significant competitive
advantage to other Group products.
Outlook
The introduction of GDPR in May 2018 will drive potentially
significant change to the recruitment sector and in particular
executive recruitment. With the introduction of GatedTalent, the
Group feels well positioned to help existing and new clients manage
the changes that GDPR brings. GatedTalent is not expected to
realise significant revenue before 2018 nor to be profitable before
2020. However, the Board is very excited by its potential and is
therefore confident about the long-term success of the Group.
The Group continues to invest in its other products to ensure
that they remain relevant for the changing market place.
The Group expects full year operational and statutory results to
be in line with market expectations before acquisition related
items and any write down of intangibles in respect of the lost
contract.
Mike Love
Chairman
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Note 6 Months ended Year ended
30 June 31 Dec
2017 2016 2016
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Revenue 4 4,829 4,811 9,963
Cost of sales (782) (694) (1,478)
---------- ---------- -----------
Gross profit 4,047 4,117 8,485
Administrative expenses (4,117) (3,569) (8,073)
---------- ---------- -----------
Result from operating
activities 4 (70) 548 412
Analysed as:
Result from operating
activities before
acquisition related
items 119 737 1,463
Acquisition related
items 5 (189) (189) (1,051)
---------- ---------- -----------
Result after acquisition
related items (70) 548 412
-------------------------------- ---------- ---------- -----------
Financial income 1 3 3
Financial cost (6) (13) (23)
---------- ---------- -----------
(Loss)/profit before
tax (75) 538 392
Tax income/(expense) 6 51 (49) 134
---------- ---------- -----------
(Loss) /profit for
the period (24) 489 526
Other comprehensive income net
of tax:
Currency translation
differences (7) (4) 16
---------- ---------- -----------
Total comprehensive
income for period
net of tax (31) 485 542
---------- ---------- -----------
Earnings per share
(pence)
Basic 8 (0.12) 2.48 2.68
Diluted (0.12) 2.46 2.62
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at
As at 30 June 31 Dec
2017 2016 2016
Unaudited Unaudited Audited
ASSETS GBP'000 GBP'000 GBP'000
Non-current assets
Goodwill 3,415 3,415 3,415
Intangible assets 5,087 6,084 5,263
Property plant &
equipment 289 259 215
---------- ----------
8,791 9,758 8,893
Current assets
Inventories 4 9 5
Trade and other
receivables 2,317 1,961 2,196
Cash and cash equivalents 1,114 1,611 1,537
---------- ---------- --------
3,435 3,581 3,738
---------- ---------- --------
Total assets 12,226 13,339 12,631
---------- ---------- --------
EQUITY AND LIABILITIES
Equity
Share capital 983 983 983
Share premium 1,631 1,631 1,631
Merger reserve 365 365 365
Retained earnings 3,150 3,956 3,725
Share option reserve 86 70 85
Translation reserve 110 97 117
---------- ---------- --------
Total equity 6,325 7,102 6,906
Liabilities
Non current liabilities
Trade and other
payables - 178 15
Borrowings - 72 -
Deferred tax 716 980 784
Current liabilities
Trade and other
payables 4,933 4,599 4,599
Borrowings 72 170 158
Current tax payable 180 238 169
---------- ---------- --------
Total liabilities 5,901 6,237 5,725
Total liabilities
and equity 12,226 13,339 12,631
---------- ---------- --------
The interim report was approved by the Board of directors and
authorised for issue on 27 September 2017. They were signed on its
behalf by:
JS Starr J P Pomeroy
CONSOLIDATED STATEMENT OF CASH FLOWS
As at
As at 30 June 31 Dec
2017 2016 2016
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Operating Activities
(Loss)/profit before tax (75) 538 392
Adjustment for
Financial income (1) (3) (3)
Financial cost 6 13 23
Depreciation and amortisation 741 656 2,069
Share option expense 1 (1) 16
Other including foreign
exchange
adjustments arising from
operations (4) (16) 31
---------- ----------- ---------
Operating cash flows before
movements in working capital 668 1,187 2,528
Increase in receivables (55) (155) (487)
Decrease in inventories 1 8 11
Increase in payables 456 211 62
Add taxation (paid)/repaid (6) 96 24
Net cash generated from
operating activities 1,064 1,347 2,138
---------- ----------- ---------
Investing Activities
Interest received 1 3 3
Finance cost (2) (5) (8)
Purchases of property plant
and equipment (45) (40) (70)
Investment in development
costs (595) (539) (1,056)
Contingent consideration
paid (220) (212) (212)
---------- ----------- ---------
Net cash used in investing
activities (861) (793) (1,343)
---------- ----------- ---------
Financing Activities
Bank loan repayments made (86) (83) (167)
Dividends paid (551) (541) (811)
---------- ----------- ---------
Net cash used by financing
activities (637) (624) (978)
---------- ----------- ---------
Net change in cash and
cash equivalents (434) (70) (183)
Cash and cash equivalents
at beginning of the period 1,537 1,595 1,595
Effect of foreign exchange
rate changes 11 86 125
Cash and cash equivalents
at end of period 1,114 1,611 1,537
---------- ----------- ---------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Merger Retained Share Foreign Total
capital premium Reserve earnings option exchange
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at
31 December
2015 983 1,631 365 4,008 71 101 7,159
Comprehensive
income
Profit for
the 6 months
ended 30 June
2016 - - - 489 - - 489
-
Other comprehensive -
income
Exchange differences
on translation
of overseas
operations - - - - - (4) (4)
Total comprehensive
income - - - 489 - (4) 485
--------- --------- --------- ---------- --------- --------- --------
Transactions
with owners
Share option
charge - - - - (1) - (1)
Dividends
paid - - - (541) - - (541)
Balance at
30 June 2016 983 1,631 365 3,956 70 97 7,102
--------- --------- --------- ---------- --------- --------- --------
Comprehensive
income
Profit for
the 6 months
ended 31 Dec
2016 - - - 37 - - 37
-
Other comprehensive -
income
Exchange differences
on translation
of overseas
operations - - - - - 20 20
Total comprehensive
income - - - 37 - 20 57
--------- --------- --------- ---------- --------- --------- --------
Transactions
with owners
Share option
charge - - - 2 15 - 17
Dividends
paid - - - (270) - - (270)
Balance at
31 December
2016 983 1,631 365 3,725 85 117 6,906
--------- --------- --------- ---------- --------- --------- --------
Comprehensive
income
Loss for the
6 months ended
30 June 2017 - - - (24) - - (24)
-
Other comprehensive -
income
Exchange differences
on translation
of overseas
operations - - - - - (7) (7)
Total comprehensive
income - - - (24) - (7) (31)
--------- --------- --------- ---------- --------- --------- --------
Transactions
with owners
Share option
charge - - - - 1 - 1
Dividends
paid - - - (551) - - (551)
Balance at
30 June 2017 983 1,631 365 3,150 86 110 6,325
--------- --------- --------- ---------- --------- --------- --------
NOTES TO THE INTERIM
NOTES TO THE UNAUDITED INTERIM REPORT
CONSOLIDATED STATEMENT OF
1. Basis of Preparation
The financial information for the six months ended 30 June 2017
included in this condensed interim report comprises the
consolidated statement of comprehensive income, the consolidated
statement of financial position, the consolidated statement of cash
flows, the consolidated statement of changes in equity and the
related notes.
The financial information in these interim results is that of
the holding company and all of its subsidiaries (the Group). It has
been prepared in accordance with the recognition and measurement
requirements of International Financial Reporting Standards as
adopted for use in the EU (IFRSs) but does not include all of the
disclosures that would be required under IFRSs. The accounting
policies applied by the Group in this financial information are the
same as those applied by the Group in its financial statements for
the year ended 31 December 2016 and are those which will form the
basis of the 2017 financial statements.
The comparative financial information presented herein for the
year ended 31 December 2016 does not constitute full statutory
accounts for that period. The Group's annual report and accounts
for the year ended 31 December 2016 have been delivered to the
Registrar of Companies. The Group's independent auditor's report on
those statutory accounts 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.
In preparing the interim financial statements the directors have
considered the Group's financial projections, borrowing facilities
and other relevant financial matters, and the board is satisfied
that there is a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable
future. For this reason, the directors continue to adopt the going
concern basis in preparing the financial statements.
Dillistone Group Plc is the Group's ultimate parent company. It
is a public listed company and is domiciled in the United Kingdom.
The address of its registered office and principal place of
business is 50 Leman St, London, E1 8HQ. Dillistone Group Plc's
shares are listed on the Alternative Investment Market (AIM).
2. Share Based Payments
The Company operates two share option schemes. The fair value of
the options granted under these schemes is recognised as an
employee expense with a corresponding increase in equity. The fair
value is measured at grant date and spread over the period at the
end of which the option holder may exercise the option. The fair
value of the options granted is measured using the Black-Scholes
model.
3. Reconciliation of adjusted operating profits to consolidated
statement of comprehensive income
30 June 2017 and 30 June 2016
Adjusted Acquisition Adjusted Acquisition
operating related operating related
profits items profits items
30 30
30 June June 30 June June
2017 2017* 2017 2016 2016* 2016
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 4,829 - 4,829 4,811 - 4,811
Cost of sales (782) - (782) (694) - (694)
Gross profit 4,047 0 4,047 4,117 0 4,117
Administrative
expenses (3,928) (189) (4,117) (3,380) (189) (3,569)
Results from
operating activities 119 (189) (70) 737 (189) 548
Financial income 1 - 1 3 - 3
Financial cost (2) (4) (6) (5) (8) (13)
Profit/(loss)
before tax 118 (193) (75) 735 (197) 538
Tax expense/(income) 17 34 51 (83) 34 (49)
Profit/(loss)
for the year 135 (159) (24) 652 (163) 489
Other comprehensive
income net of
tax:
Currency translation
differences (7) - (7) (4) - (4)
Total comprehensive
income for the
year net of tax 128 (159) (31) 648 (163) 485
----------- ------------ --------- ----------- ------------ ---------
Earnings per share - from continuing activities
Basic 0.68p (0.12)p 3.31p 2.48p
Diluted 0.68p (0.12)p 3.28p 2.46p
* see accounts note 5
31 December 2016
Adjusted Acquisition
operating related
profits items
31 December 2016* 31 December
2016 2016
GBP'000 GBP'000 GBP'000
Revenue 9,963 - 9,963
Cost of sales (1,478) - (1,478)
------------ ------------ ------------
Gross profit 8,485 - 8,485
Administrative expenses (7,022) (1,051) (8,073)
Results from operating
activities 1,463 (1,051) 412
Financial income 3 - 3
Financial cost (8) (15) (23)
Profit before tax 1,458 (1,066) 392
Tax income (63) 197 134
Profit for the year 1,395 (869) 526
Other comprehensive
income net of tax:
Currency translation
differences 16 - 16
Total comprehensive
income for the year
net of tax 1,411 (869) 542
------------ ------------ ------------
Earnings per share - from continuing activities
Basic 7.10p 2.68p
Diluted 6.95p 2.62p
* see accounts note 5
4. Segment reporting
Year ended
6 months ended 30
June 31 Dec
2017 2016 2016
GBP'000 GBP'000 GBP'000
Revenue
Dillistone Systems 2,244 2,265 4,858
GatedTalent - - -
Voyager Software 2,585 2,546 5,105
Total revenue 4,829 4,811 9,963
----------- -------- -----------
Results by division
Year ended
6 months ended 30
June 31 Dec
2017 2016 2016
GBP'000 GBP'000 GBP'000
Results from operating
activities
Dillistone Systems 30 417 205
GatedTalent (182) - -
Voyager Software 350 412 632
------ -------- --------------
198 829 837
Central (79) (92) (94)
Amortisation of
acquisition intangibles
and other items (189) (189) (331)
Result from operating
activities (70) 548 412
====== ======== ==============
Geographical segments
The following table provides an analysis of
the Group's revenues by geographical market.
Year ended
6 months ended
30 June 31 Dec
2017 2016 2016
GBP'000 GBP'000 GBP'000
UK 3,440 3,486 7,142
Europe 474 452 1,047
US 703 679 1,388
Australia 212 194 386
4,829 4,811 9,963
=============== ======== ===============
Business Segment
The following table provides an analysis of the
Group's revenues by products and services.
Year ended
6 months ended
30 June 31 Dec
2017 2016 2016
GBP'000 GBP'000 GBP'000
Recurring 3,711 3,384 7,027
Non recurring 873 1,129 2,370
Third party revenues 245 298 566
4,829 4,811 9,963
=============== ======== ===========
Recurring income includes all support services,
software as a service income (SaaS) and hosting
income. Non-recurring income includes sales of
new licenses, and income derived from installing
those licenses including training, installation,
and data translation. Third party revenues arise
from the sale of third party software.
The Group notes IFRS15 Revenue from Contracts with Customers
which is to be adopted for all accounting periods beginning on or
after 1 January 2018. The Group is working on fully understanding
the implications of this new standard. The Group has yet to decide
upon the transitional arrangements to adopt, but an adjustment in
respect of prior years is expected. The major impact is likely to
be in respect of various outright license sales which require a
support contract where some the non-recurring license income will
need to be spread. Other adjustments may be required.
5. Acquisition related items
Year ended
6 months ended
30 June 31 Dec
2017 2016 2016
GBP'000 GBP'000 GBP'000
Estimated change in
fair value of contingent
consideration - - (48)
Amortisation of acquisition
intangibles 189 189 379
Additional amortisation
on change of estimated
useful life of platform
technology - - 720*
189 189 1,051
Unwinding of discount
on contingent consideration 4 8 15
Total 193 197 1,066
======== ======== ===========
*The decision to change the estimated useful life of certain
assets was made at the time of the preparation of the 2016 final
accounts. Accordingly, as the decision had not been made at the
time of the preparation of the interim accounts to June 2016, no
adjustment has been included.
Impairments to intangibles are reviewed normally at the year
end. As previously stated the Group has been informed that a
contract with a major client is likely to expire later this year or
early next. This contract, which is with a client using an acquired
legacy product, is worth in the region of GBP600,000 per annum in
contribution terms to the Group. An amendment to the contract has
been agreed which will give the client the rights to terminate at 3
months' notice during the contract term to 30 November 2018 (which
can be extended by agreement). At this stage, the timing of the
exit is unclear and so no impairment has been recognised in these
interim statements nor has a detailed review been carried out of
the remaining useful economic life. A full and comprehensive review
will be carried out at the yearend when the position should be
clearer. The intangibles that are impacted, their original and
outstanding lives together with the value of such intangibles at 30
June 2017 are shown below:
Intangible Original Remaining Value of
asset life life at 30 intangibles
June 2017 at 30 June
2017 in GBP000s
---------------------- --------- ------------ -----------------
Developed
technology 6 2 53
---------------------- --------- ------------ -----------------
Contractual
and non-contractual
relationship 10 6 836
---------------------- --------- ------------ -----------------
6. Tax
Year ended
6 months ended
30 June 31 Dec
2017 2016 2016
GBP'000 GBP'000 GBP'000
Current tax charge 17 73 178
Prior year adjustment
- current tax - - (91)
Deferred tax release
charge (34) 10 (100)
Prior year adjustment
- deferred tax - - (50)
Deferred tax re acquisition
intangibles (34) (34) (68)
Prior year adjustment
- deferred tax re acquisition
intangibles - - (3)
-------- -------- -----------
Total (51) 49 (134)
======== ======== ===========
The tax charge is impacted by the higher rates of corporation
tax payable in the US and Australia offset by the R&D tax
credits available to both Dillistone Systems and Voyager Software
and GatedTalent Limited. Deferred tax has been provided at 17%.
7. Dividends
In view of its investment in GatedTalent and the related
fund-raising exercise, the Board has decided not to pay an interim
dividend (2016: 1.375p per share).
8. Earnings per Share
Year ended
6 months ended
30 June 31 Dec
2017 2016 2016
Basic earnings per
share
(Loss)/ profit attributable
to ordinary shareholders GBP(24,000) GBP489,000 GBP526,000
Weighted average number
of shares 19,668,021 19,668,021 19,668,021
Basic (loss)/earnings
per share (pence) (0.12) 2.48 2.68
============ =========== ===========
Diluted earnings per
share
(Loss)/ profit attributable
to ordinary shareholders GBP(24,000) GBP489,000 GBP526,000
Diluted weighted average
number of shares 19,668,021 19,857,686 20,082,096
Diluted earnings per
share (pence) (0.12) 2.46 2.62
============ =========== ===========
9. Related party transactions
The Company has a related party relationship with its
subsidiaries, its directors, and other employees of the Company
with management responsibility. There were no transactions with
these parties during the period outside the usual course of
business.
There were no transactions with any other related parties.
10. Cautionary statement
This Interim Report has been prepared solely to provide
additional information to shareholders to assess the Company's
strategies and the potential for these strategies to succeed. The
Interim Report should not be relied on by any other party or for
any other purpose. The Interim Report contains certain
forward-looking statements with respect to the financial condition,
results of operations and businesses of the Company. These
statements are made in good faith based on the information
available to them up to the time of their approval of this report.
However, such statements should be treated with caution as they
involve risk and uncertainty because they relate to events and
depend upon circumstances that will occur in the future. There are
a number of factors that could cause actual results or developments
to differ materially from those expressed or implied by these
forward-looking statements. The continuing uncertainty in global
economic outlook inevitably increases the economic and business
risks to which the Company is exposed. Nothing in this announcement
should be construed as a profit forecast.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BIGDCCDDBGRR
(END) Dow Jones Newswires
September 28, 2017 02:01 ET (06:01 GMT)
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