TIDMING
RNS Number : 2054Q
Ingenta PLC
27 June 2022
Ingenta plc
(the 'Group' or the 'Company')
Final Audited Results
Ingenta plc (AIM: ING) a leading provider of software and
services to the global publishing industry, announces its final
audited results for the year ended 31 December 2021.
Financial Key Points
-- Revenues stable at GBP10.1m (2020: GBP10.2m) reflecting a focus on core software offerings.
-- Annual Recurring Revenue (ARR)* of GBP8.9m representing 88%
of total revenue (2020: GBP8.7m, 86%).
-- Operating cash inflows of GBP2.0m in the year (2020: GBP0.8m).
-- Cash balances at year end of GBP3.0m (2020: GBP2.3m).
-- Adjusted EBITDA** of GBP1.5m (2020: GBP1.2m).
-- Net profit of GBP1.8m*** (2020: GBP0.4m).
-- Proposed final dividend of 2 pence per share, subject to
shareholder approval at the 2022 AGM (2021: 1.5 pence).
-- Earnings per share of 10.93 pence (2020: 2.67 pence).
Operational Key Points
-- First music customer won and deployed onto our conChord IP
management platform, leading to increasing interest from other
music publishers within this substantial target market.
-- 4 customer go-lives across the product portfolio during the year.
-- Completion of internal infrastructure plan with improved
resilience and operational flexibility.
Current trading
-- Strong trading in 2022 generating growth in revenues and profit over the prior period.
-- Growth driven by existing customer base with extended sales
cycles persisting for sales to new customers.
-- Whilst cognisant of deteriorating economic conditions, the
Board believe the results for the year ended 31 December 2022 will
be comfortably in line with market expectations.
* ARR - Revenue generated and recognised in the year from
annually recurring software support contracts, hosting services and
managed services.
**Adjusted EBITDA - EBITDA before impairment, gain / loss on
disposal of fixed assets, foreign exchange gain / loss and
exceptional non-recurring costs . See note 2 for details.
***Net profit in 2021 includes a GBP1.2m deferred tax
credit.
Scott Winner, Chief Executive Officer, commented:
"The 2021 results announced today demonstrate the completion of
Ingenta's turn around, delivering stabilised revenue, strong
efficiency gains, higher margins and improved cashflow. This has
been achieved by delivering a broader array of services to existing
customers.
Strategically, we continue to focus on our Intellectual Property
management solutions and web-based content platforms which we
anticipate will deliver revenue growth. In that respect, I'm
pleased to report we have signed and deployed our first music
customer onto our conChord product in 2021. This is an exciting
development for the Group and validates that our expertise in IP
management is applicable in verticals outside of the traditional
publishing sector.
In our web-based digital content distribution business, we
delivered 3 successful go lives on our Edify platform. These
implementations included 2 more prestigious NGO customers and we
look to further enhance our business in this sector."
Certain of the information contained within this announcement is
deemed by the Company to constitute inside information as
stipulated under the UK version of the EU Market Abuse Regulation
(2014/596) which is part of UK law by virtue of the European Union
(Withdrawal) Act 2018, as amended and supplemented from time to
time.
For further information please contact:
Ingenta plc
Scott Winner / Jon Sheffield Tel: 01865 397 800
Cenkos Securities plc
Nicholas Wells / Katy Birkin Tel: 020 7397 8900
Chairman's statement
Overview
I'm pleased to report on the Group's continued progress in 2021
and in particular, the actions taken to improve operational
efficiency as we strive to generate improved margins, profitability
and cashflow. With sound fundamentals in place, the Group is well
positioned to broaden its reach beyond the traditional publishing
sphere of Intellectual Property management and into a variety of
adjacent vertical markets. As previously announced, the first
target for expansion is within the music sector and the Group won
and successfully deployed its first customer onto its multitenancy
music IP management platform, which has been designed to meet the
ever-increasing challenges faced by those operating in this
sector.
Elsewhere, our web-based content platform business has also
performed well, and we successfully deployed 3 new customers to our
Edify solution. Encouragingly, 2 of these go lives were for
prestigious NGO's which represents a growing opportunity for the
Group and a diversification away from scholarly content
providers.
As outlined above, the main success story for the year was the
improved margin and profitability driven from our loyal customer
base. To a large extent this is due to the expansion of our service
offering which has been designed, in part, as a solution for
customers who do not want to manage the peripheral or technology
related requirements of running and maintaining a software package.
In addition to the widened service offering, the Group has
maintained a close focus on internal processes to ensure all
services are designed, contracted and delivered in an efficient
fashion. Our utilisation levels for professional service staff have
been on an upward trend in 2021 and this remains a key focus going
forwards.
Ingenta has a wealth of experience in both technology and its
use within content delivery and IP management, providing a
foundation for growth in an increasingly complicated environment
where customers are continually searching for new and improved ways
of managing their business processes.
Operational flexibility
It has been over 2 years since Covid impacted on us all and I'm
proud of the resilience, flexibility and dedication of all the
teams at Ingenta. In rapid time, the whole Group successfully
migrated to remote working whilst continuing to service our loyal
customer base, many of whom experienced additional support
requirements as they adapted their own business processes. However,
whilst this initial change was enforced, the Group has taken the
initiative and looked to fundamentally adapt and remodel our
infrastructure within physical premises, IT or internal working
processes. Everyone should be proud of their contributions to this,
the new and agile Ingenta.
Shareholders' returns and dividends
During the year, the Company completed a share buyback programme
and repurchased a further 440,826 ordinary shares. At the year end,
the Company had 16,919,609 ordinary shares in issue, with a total
of 587,930 shares held in treasury.
The Directors declare their intention to pay a dividend in 2022
of 2 pence per share (2021: 1.5 pence) subject to approval at the
forthcoming AGM.
Outlook
The Group's core Commercial and Content software solutions
provide a mission critical service enabling publishers to run their
business and manage their IP assets. With our newly established
operating fundamentals firmly in place and generating returns, the
Group can look forward with optimism to the next stage of its
development - generating revenue growth and leveraging our
expertise in the wider IP management arena. The Group has taken its
first step into the music IP sector and will look to expand on this
whilst continuing to drive growth in our existing core markets.
M C Rose
Chairman
24 June 2022
Financial review
Business Strategy
Ingenta is a provider of mission critical software and services
to the publishing sector, with growth aspirations in adjacent
industries. Operationally, the Group has moved to a product
agnostic services architecture enabling it to offer an integrated
approach to servicing customers whereby service levels and software
are standardised, and as a result, resources are utilised more
efficiently. The Group's focus is to accelerate growth in recurring
revenue via the sale of software as a service wherever
possible.
Product review
Ingenta Commercial
Ingenta Commercial provides a variety of modular publishing
management systems for both print and digital products. A core area
of expertise is within Intellectual Property and the Group is
looking to leverage its existing expertise in contracts, rights and
royalties management by expanding into adjacent verticals.
conChord, a solution designed for the music industry, has already
been released and successfully deployed and we believe there are
further opportunities in other verticals where IP management is an
increasing concern for customers.
Reported revenues increased marginally to GBP6.7m (2020:
GBP6.6m) with the Group remaining focussed on driving recurring
revenues by offering ongoing peripheral services in addition to the
standard software support. In this respect, the hosted service
offering has been well received and has helped increase managed
services revenues in the division. The revenues reported in the
year that are recurring in nature increased from GBP5.4m to
GBP6.1m. Reported earnings before interest, tax, depreciation and
amortisation (EBITDA) declined slightly from GBP0.85m to GBP0.78m
and was largely the result of enhanced post go live support on a
number of customers as they transition from implementation to
normalised support.
Ingenta Content
The Ingenta Content suite of products enable publishers of any
size, discipline or technical proficiency to convert, store,
deliver and monetise digital content on the web.
Annual revenue increased from GBP2.3m to GBP2.4m helped by three
new customer go lives on the Edify platform during the year and an
active base of customer change request work. Importantly, the Group
continues to successfully diversify into new markets with the
addition of 2 further NGO customers. Divisional EBITDA increased
from GBP0.32m to GBP0.52m and was driven by the efficient
deployment of the new customers sites which moved onto support
during the year.
Ingenta Advertising
Ingenta Advertising provides a complete browser-based multimedia
advertising, CRM and sales management platform for content
providers.
The business anticipates that the Group's Advertising offering
will become a component of the larger Commercial and Content
Products divisions and, in time, its revenues will be less clearly
distinguished as a separate CGU. Reported revenue remained stable
at GBP0.8m (2020: GBP0.8m). Segmental EBITDA for the advertising
division increased marginally from GBP0.2m to GBP0.24m, largely as
a result of improved support efficiency plus additional project
work undertaken in the year.
PCG
The PCG consulting arm provides a range of non-software services
designed to support and drive a business's sales strategy.
Strategically, the team's skills are being increasingly used to
drive sales pipeline for the wider Group in addition to their own
customer portfolio work.
Annual revenue declined slightly to GBP0.3m (2020: GBP0.4m) and
was a result of a challenging sales market. Part of the divisions
business is driven from sales commission and activity was somewhat
depressed as buyers held off making purchases during Covid
restrictions. Segmental EBITDA improved from a loss of GBP0.2m to a
loss of GBP0.1m driven by the Group's policy of reallocating PCG
resources to the wider Group marketing function in order to improve
sales pipeline growth across the business.
Going forward, it is envisaged that PCG and Advertising will no
longer be reported as separate divisions.
Financial Performance
Group revenue was stable at GBP10.1m (2020: GBP10.2m) but
encouragingly, the recurring revenue base has been expanded
slightly to GBP8.9m or 88% of the reported total (2020: GBP8.7m and
86%). This increase in recurring revenues is due to the uptake of
ongoing managed services where the business is
expanding its offering.
Although revenue was stable, the Group's cost of sales declined
from GBP5.7m to GBP5.5m as the previous actions taken to streamline
operational efficiency begin to take hold. Consequently, gross
profit increased to GBP4.7m (2020: GBP4.4m). Further operational
efficiencies have been generated within administration overheads
helping yield profit from operations of GBP0.8m (2020:
GBP0.5m).
Sales and marketing spend was stable at GBP0.7m but it masks a
conscious switch in tactics as the Group looks to embrace digital
marketing strategies rather than traditional in person event
attendance. These efforts are starting to build a broader pipeline
of opportunities that the Group is looking to exploit going
forward. Administrative costs have declined from GBP3.3m to GBP3.2m
again largely as a result of the previously reported efficiency
drive including removal of operational silos and a change in
infrastructure mix within the business.
No tax charge is anticipated for 2021 as the Group continues to
utilise brought forward tax losses.
Financial Position
Non-current assets include goodwill and intangibles recognised
on historic acquisitions. In 2021, Goodwill relates solely to the
core Content platform software which will be used to drive growth
in the future. Goodwill relating to historic acquisitions is tested
for impairment each year using discounted cashflows. No impairment
was identified in 2021. Property, plant and equipment reductions
are a direct result of the Group's infrastructure strategy which
has seen us move IT and personnel out of physical business
premises.
Current assets have increased from GBP4.5m to GBP4.8m which is
the result of improved profitability driving cash generation.
Additionally, throughout the Covid pandemic there have been very
few instances of bad debt as the Group's customer base remains
relatively shielded in an operational sense from the impacts of
social restriction and the Groups services remain business critical
to end users.
Total liabilities have declined from GBP4.8 to GBP4.6m as prior
year finance lease commitments undertaken for our hosting
infrastructure are paid down.
Cashflow
The Group generated a cash inflow from operations of GBP2.0m
compared to GBP0.8m in 2020. Critically, the Groups restructuring
has improved efficiency and margins which flows through to cash
generation as all research and development efforts are expensed.
Outside of normal operational activity, the Group has paid
dividends of GBP0.4m (2020: GBP0.3m) and completed a share buyback
programme which amounted to an outflow of GBP0.3m (2020: GBP0.1m).
Closing cash balances were GBP3.0m (2020: GBP2.3m)
Key Performance Indicators
The Board and senior management review a number of KPI's
continually throughout the year, all of which form part of the
monthly management accounts process and include:
-- Revenue versus budget and monthly reforecast
-- Adjusted EBITDA (see note 2 for calculation) versus budget
-- Group cashflow versus budget
-- Sales pipeline growth and conversion analysis
-- Time utilisation statistics
Any deviations or anomalies are investigated, and corrective
action taken where appropriate.
Full year revenues were below budget largely because of
shortfalls on new sales targets as the Covid pandemic restricted
activity. As has been widely publicised elsewhere, the pandemic has
slowed sales cycles and occasionally delayed implementations.
However, interest for our products and services remains high.
Adjusted EBITDA was higher than budget driven by acceleration of
certain planned savings in infrastructure, delayed hiring of staff
and restricted marketing activity.
Year-end cash balances were GBP0.7m above budget reflecting
increased profitability and timing of receipts around year end.
The Group monitor sales activity with reference to monthly sales
pipeline reports. These reports detail sales opportunities by
product with metrics around expected project timelines and revenue
recognition estimates so that management can deploy resources
adequately to ensure the best chance of success in the bidding
process. When any items are removed from the pipeline due to either
a successful sale or a lost opportunity, management carry out a
detailed analysis to ensure the reasons are understood and any
actions required are taken.
The business monitors time utilisation at a contract level to
enable accurate pricing decisions to be made ensuring profitable
service delivery. Internal development costs are also reviewed to
ensure the appropriate effort is spent supporting the products and
deliver an effective product roadmap.
Going concern
The core fundamentals of the Group remain strong with cash
reserves of GBP3m and no debt beyond leasing arrangements. In
addition, further cost saving opportunities have been identified as
the Group look to reduce their physical premises cost and
associated overheads as leases naturally expire over the coming
years. Management are satisfied that cash is sufficient for the
needs of the business based on the cash flow forecast. The going
concern review covered the period to the end of June 2023.
The Covid outbreak continues to add some uncertainty to
financial forecasting and modelling. However, at an operating
profit level, the Group's results for the first quarter of 2022
have been better than budget. New sales activity remains subdued
with the timing of any uplift difficult to predict. The Group
continues to embrace established remote working practices without
any significant impact to services. Any ongoing implementations and
professional services can also be delivered remotely by Ingenta
personnel. The internal business infrastructure is contracted with
large multinational corporations and remains resilient. The Group
has modelled various downside scenarios and consider it appropriate
to use the going concern basis to compile these financial
statements. Further details on going concern are included in the
accounting policies section of the financial statements.
Outlook
Ingenta achieved a key milestone in 2021 by successfully
deploying its first music customer onto conChord which
significantly provides us with a referenceable client and
independent validation that our IP engine is flexible enough to
step into adjacent verticals. Our marketing effort is now targeted
on enhancing the messaging in this sector in order to build
momentum and boost sales pipeline growth.
The Group is also actively exploring further opportunities to
drive expansion of the newly invigorated managed services division
which is a key offering that provides real value to customers who
no longer wish to be encumbered with peripheral activities as they
relate to software infrastructure.
Pleasingly, 2022 has started well, with reported profits ahead
of budget and the prior year, giving the Board optimism for the
future.
J R Sheffield
Chief Financial Officer
24 June 2022
Group Statement of Comprehensive Income
For the year ended 31 December 2021
Restated
Year ended Year ended
31 Dec 31 Dec
21 20
note GBP'000 GBP'000
====================================================== ===== =========== ===========
Group revenue 10,145 10,177
Cost of sales (5,487) (5,741)
Gross profit 4,658 4,436
Sales and marketing expenses (690) (671)
Administrative expenses (3,214) (3,301)
Profit from operations 2 754 464
Finance costs (27) (22)
Profit before income tax 727 442
Income tax 3 1,074 7
Profit for the year attributable to equity
holders of the parent 1,801 449
Other comprehensive expenses which will be
reclassified subsequently to profit or loss:
Exchange differences on translation of foreign
operations 56 (137)
Total comprehensive profit for the year attributable
to equity holders of the parent 1,857 312
Basic profit per share (pence) 4 10.93 2.67
Dilutive profit per share (pence) 4 10.50 2.56
See note 5 for further details on the prior period
adjustment
All activities are classified as continuing
Group Statement of Financial Position
As at 31 December 2021
Restated Restated
31 Dec 31 Dec 31 Dec
21 20 19
===============================
GBP'000 GBP'000 GBP'000
=============================== ======== ========= =========
Non-current assets
Goodwill 2,661 2,661 2,661
Other intangible assets - 58 158
Property, plant and equipment 665 1,119 473
Deferred tax asset 1,163 - -
4,489 3,838 3,292
Current assets
Trade and other receivables 1,810 2,226 3,219
Cash and cash equivalents 3,006 2,323 2,600
======== ========= =========
4,816 4,549 5,819
Total assets 9,305 8,387 9,111
======== ========= =========
Equity
Share capital 1,692 1,692 1,692
Merger reserve 11,055 11,055 11,055
Reverse acquisition reserve (5,228) (5,228) (5,228)
Share option reserve 88 61 23
Translation reserve (605) (661) (524)
Retained earnings (2,278) (3,353) (3,487)
Total equity 4,724 3,566 3,531
Non-current liabilities
Deferred tax liability 88 12 32
Leases 192 430 206
======== ========= =========
280 442 238
Current liabilities
Trade and other payables 1,991 2,061 2,459
Deferred income 2,310 2,318 2,883
4,301 4,379 5,342
Total liabilities 4,581 4,821 5,580
Total equity and liabilities 9,305 8,387 9,111
See note 5 for further details on the prior period
adjustment
Group Statement of Changes in Equity
For the year ended 31 December 2021
Total
Reverse Share attributable
Share Merger acquisition Translation Retained option to owners
capital reserve reserve reserve earnings reserve of parent
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- --------- --------- ------------- ------------ ---------- --------- --------------
Balance at 1 January
2021 on prior basis 1,692 11,055 (5,228) (839) (3,175) 61 3,566
Impact of restatement
(note 5) - - - 178 (178) - -
--------- --------- ------------- ------------ ---------- --------- --------------
Restated balance at
1 January 2021 1,692 11,055 (5,228) (661) (3,353) 61 3,566
Dividends paid - - - - (410) - (410)
Shares bought back
into treasury - - - - (316) - (316)
Share options granted
in the year - - - - - 27 27
--------- --------- ------------- ------------ ---------- --------- --------------
Transactions with owners - - - - (726) 27 (699)
Profit for the year - - - - 1,801 - 1,801
Foreign exchange
differences
on translation - - - 56 - - 56
--------- --------- ------------- ------------ ---------- --------- --------------
Total comprehensive
income for the year - - - 56 1,801 - 1,857
Balance at 31 December
2021 1,692 11,055 (5,228) (605) (2,278) 88 4,724
============================ ========= ========= ============= ============ ========== ========= ==============
For the year ended 31 December 2020
Total
Reverse Share attributable
Share Merger acquisition Translation Retained option to owners
capital reserve reserve reserve earnings reserve of parent
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
============================ ========= ========= ============= ============ ========== ========= ==============
Balance at 1 January
2020 on prior basis 1,692 11,055 (5,228) (880) (3,131) 23 3,531
Impact of restatement
(note 5) - - - 356 (356) - -
--------- --------- ------------- ------------ ---------- --------- --------------
Restated balance at
1 January 2020 1,692 11,055 (5,228) (524) (3,487) 23 3,531
Dividends paid - - - - (252) - (252)
Shares bought back
into treasury - - - - (63) - (63)
Share options granted
in the year - - - - - 38 38
--------- --------- ------------- ------------ ---------- --------- --------------
Transactions with owners - - - - (315) 38 (277)
Profit for the year - - - - 449 - 449
Foreign exchange
differences
on translation - - - (137) - - (137)
--------- --------- ------------- ------------ ---------- --------- --------------
Total comprehensive
income for the year - - - (137) 449 - 312
Balance at 31 December
2020 1,692 11,055 (5,228) (661) (3,353) 61 3,566
============================ ========= ========= ============= ============ ========== ========= ==============
Group Statement of Cash Flows
For the year ended 31 December 2021
Restated
Year ended Year ended
31 Dec 31 Dec
21 20
GBP'000 GBP'000
=================================================== =========== ===========
Profit before taxation 727 442
Adjustments for
Depreciation 632 439
Profit on disposal of fixed assets - (2)
Interest expense 27 22
Unrealised foreign exchange differences 56 (137)
Share based payment charge 27 39
Decrease in trade and other receivables 416 954
Increase / (decrease) in trade and other payables
and deferred income 131 (953)
Cash inflow from operations 2,016 804
Tax paid (13) (13)
=========== ===========
Net cash inflow from operating activities 2,003 791
Cash flows from investing activities
Purchase of property, plant and equipment (119) (200)
Net cash used in investing activities (119) (200)
Cash flows from financing activities
Interest paid (21) (5)
Payment of lease liabilities (453) (550)
Dividend paid (410) (252)
Costs of buy back of shares into treasury (316) (63)
Net cash used in financing activities (1,200) (870)
Net increase / (decrease) in cash and cash
equivalents 684 (279)
Cash and cash equivalents at the beginning
of the year 2,323 2,600
Exchange differences on cash and cash equivalents (1) 2
=========== ===========
Cash and cash equivalents at the end of the
year 3,006 2,323
See note 5 for further details on the prior period
adjustment
1. Basis of preparation
The nancial information of the Group set out above does not
constitute statutory accounts for the purposes of Section 435 of
the Companies Act 2006. The nancial information for the year ended
31 December 2021 has been extracted from the Group's audited
nancial statements which were approved by the Board of directors on
24 June 2022.
The nancial information for the year ended 31 December 2021 has
been extracted from the Group's nancial statements for that period.
The report of the auditor on the 2021 nancial statements was
unquali ed, did not include any references to any matters to which
the auditors drew attention by way of emphasis without qualifying
their report and did not contain a statement under Section 498(2)
or Section 498(3) of the Companies Act 2006.
Whilst the nancial information included in this preliminary
announcement has been prepared in accordance with UK adopted
international accounting standards ("IASs") in conformity with the
requirements of the Companies Act 2006, the International Financial
Reporting Interpretations Committee ("IFRIC"), interpretations
issued by the International Accounting Standards Boards ("IASB")
that are effective or issued and adopted as at the time of
preparing these financial statements, and in accordance with the
provisions of the Companies Act 2006 that are relevant to companies
that report under UK adopted IASs, this announcement does not
itself contain su cient information to comply with those IASs. This
nancial information has been prepared in accordance with the
accounting policies set out in the 2020 Report and Accounts and
updated for new standards adopted in the current year.
Items included in the nancial information of each of the Group's
entities are measured using the currency of the primary economic
environment in which the entity operates (the functional currency).
The consolidated nancial information is presented in UK sterling
(GBP), which is the Group's presentational currency.
The Company is a public limited company incorporated and
domiciled in England & Wales and whose shares are quoted on
AIM, a market operated by the London Stock Exchange.
The principal activity of Ingenta plc and its subsidiaries is
the sale of software and ancillary services.
2. Profit from operations
Profit from operations has been arrived at after charging:
Restated
Year ended Year ended
31 Dec 31 Dec
21 20
GBP'000 GBP'000
=============================================== =========== ===========
Research and development costs 1,009 1,409
Net foreign exchange (gain) / loss 61 (138)
Depreciation of property, plant and equipment
- owned assets 179 110
- leasehold property 133 122
- assets under leases 262 107
Amortisation 58 100
Auditor's remuneration
- audit fees 74 71
- taxation services 12 12
Exceptional non-recurring costs 5 447
An analysis reconciling the profit from operations to adjusted
EBITDA is provided below.
Restated
Year ended Year ended
31 Dec 31 Dec
21 20
GBP'000 GBP'000
========================================= =========== ===========
Profit from operations 754 464
Add back:
Depreciation and amortisation 632 439
Gain on disposal of fixed assets - (2)
Exceptional non-recurring costs 5 447
Foreign exchange loss / (gain) 61 (138)
EBITDA before impairment, amortisation,
gain / loss on disposal of fixed
assets, foreign exchange gain
/ loss and exceptional non-recurring
costs 1,452 1,210
Exceptional non-recurring costs include restructuring costs,
premises exit costs, non-recurring professional fees and debt write
offs.
3. Tax
Year ended Year ended
31 Dec 31 Dec
21 20
GBP'000 GBP'000
=========================================== =========== ===========
Analysis of (charge) / credit in the year
Current tax:
Current year State tax - US (10) (10)
Adjustment to prior year charge - UK (3) (3)
Deferred tax credit 1,087 20
=========== ===========
Taxation 1,074 7
============================================ =========== ===========
The Group has unutilised tax losses at 31 December 2021 in the
UK and the USA of GBP16.3m (2020: GBP15.6m) and $11.2m (2020:
$14.2m) respectively. These losses have been agreed with the tax
authorities in the UK and USA. The Board intends to make use of all
losses wherever possible.
Some of the US tax losses are restricted to $491K per annum as a
result of change of control legislation. Losses carried forward
from the change of control in April 2008 are restricted and must be
used within 20 years. The Board believes the Group will be able to
make use of $7.4m (2020: $7.7m) of the total unutilised losses at
31 December 2021.
No deferred tax has been recognised in accordance with advice
from US tax accountants on the basis that the US losses are
restricted and there is uncertainty on the value of losses which
will be able to be used.
From 1 April 2023, the corporation tax rate applicable to
companies with taxable profits above GBP250,000 will be 25 per
cent. Companies with profits below GBP50,000 will, however,
continue to pay tax at the current rate of 19 per cent. Those with
taxable profits between GBP50,000 and GBP250,000 will benefit from
marginal relief, similar to that which applied before the previous
incarnation of the small companies' rate of corporation tax was
abolished with effect from 1 April 2015.
The differences are explained below:
Restated
Year ended Year ended
31 Dec 31 Dec
Reconciliation of tax expense 21 20
GBP'000 GBP'000
================================================== =========== ===========
Profit on ordinary activities before tax 727 442
=========== ===========
Tax at the UK corporation tax rate of 19% (2019:
19%) 138 84
Income / expenses not allowable for tax purposes (16) 14
Unrelieved losses carried forward 354 245
Utilisation of losses (529) (213)
Difference in timing of allowances 56 (129)
Deferred tax movement (1,087) -
Adjustment to tax charge in respect of prior
years 10 (8)
Total taxation (1,074) (7)
=================================================== =========== ===========
United Kingdom Corporation tax is calculated at 19% (2020: 19%)
of the estimated assessable profit for the year.
Taxation for other jurisdictions is calculated at the rates
prevailing in the respective jurisdictions.
4. Earnings per share
Basic earnings per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the year.
For diluted earnings per share, the weighted average number of
ordinary shares in issue is adjusted to assume conversion of all
dilutive ordinary share options. Management estimate 681,000
ordinary shares will be issued (2020: 681,000) in respect of share
options. In the current year, this calculation would have an
antidilutive effect on earnings per share so has been ignored.
Restated
Year ended Year ended
31 Dec 2021 31 Dec 2020
GBP'000 GBP'000
============================================= ============= =============
Attributable profit 1,801 449
Weighted average number of ordinary shares
used in basic earnings per share ('000) 16,481 16,834
Shares deemed to be issued in respect of
share-based payments 670 681
------------- -------------
Weighted average number of ordinary shares
used in dilutive earnings per share ('000) 17,151 17,515
Basic profit per share arising from both
total and continuing operations 10.93p 2.67p
Dilutive profit per share arising from both
total and continuing operations 10.50p 2.56p
============================================== ============= =============
Dividends
On 9th August 2021 the Company paid a final dividend of 1.5
pence per share for the year ended 31 December 2020. On 29th
October 2021 an interim dividend of 1 pence per share was paid in
respect of the year ended 31 December 2021.
After the year end, the Directors declared their intention to
pay a final dividend of 2p for the year ended 31 December 2021,
subject to approval at the forthcoming Annual General Meeting.
5. Prior period adjustment
An adjustment has been made to the treatment of foreign exchange
gains and losses on intercompany balance translation at year end.
Previously all intercompany balances were treated as a net
investment and on consolidation any exchange gains and losses were
recorded in other comprehensive income and recognised in the
currency translation reserve in equity. Some of these intercompany
balances have subsequently been reclassified as trading balances on
the basis that transactions occur between trading entities. The
summarised corrections are shown below:
Administration Retained Translation
expenses Earnings Reserve
GBP'000 GBP'000 GBP'000
---------------------------- -------------- --------- -----------
Prior to 1 January 2020 356 (356)
Year ended 31 December 2020 (178) (178) 178
Prior to 1 January 2020, GBP356K of foreign exchange losses have
been reclassified from the translation reserve to retained earnings
within equity. For the year ended 31 December 2020, GBP178K of
foreign exchange gains have been reclassified from the translation
reserve in equity and recognised in the Statement of Comprehensive
Income within administration expenses.
These adjustments have also impacted on the Statement of Cash
Flows. The cash and cash equivalents balances remain the same,
however, changes are reflected within the profit before taxation
and movements in unrealised foreign exchange differences.
The Statement of Changes in Equity has also been restated for
the profit in the year and the foreign exchange differences on
translation of foreign operations.
The impact on reported basic and diluted earnings per share for
the year ended 31 December 2020 was an increase of 1.06p and 1.02p
respectively.
6. Publication of non-statutory accounts
The financial information set out in this announcement does not
constitute statutory accounts as defined in the Companies Act
2006.
The Group Statement of Comprehensive Income, Group Statement of
Financial Position, Group Statement of Changes in Equity, Group
Statement of Cash Flows and associated notes have been extracted
from the Group's 2021 statutory financial statements upon which the
auditor's opinion is unqualified and which do not include any
statement under section 498 of the Companies Act 2006.
Those financial statements will be delivered to the Registrar of
Companies following the release of this announcement.
This announcement and the annual report and accounts, including
the Notice of Annual General Meeting, are available on the
Company's website www.ingenta.com. A copy of the report and
accounts will be sent to shareholders who have elected to receive a
printed copy with details of the annual general meeting in due
course.
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END
FR FLFSDRVIRFIF
(END) Dow Jones Newswires
June 27, 2022 02:00 ET (06:00 GMT)
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