TIDMING
RNS Number : 9338L
Ingenta PLC
11 September 2023
11 September 2023
Ingenta plc
("Ingenta", the "Company" or the "Group")
Interim Results
Ingenta plc (AIM: ING), a leading provider of world-class
software and services to the global publishing industry, is pleased
to announce its unaudited interim results for the six months to 30
June 2023.
Financial Key Points
-- Group revenues increased by 9% to GBP5.74m (2022: GBP5.27m)
-- 80% of Group revenues recurring in nature (2022: 89%) with
reduction due to growth of consultancy services
-- Gross profit margin increased to 55% (2022: 53%)
-- Adjusted EBITDA(*) increased by 26% to GBP1.58m (2022: GBP1.26m)
-- Cash from operations of GBP0.38m (2022: GBP1.61m) impacted by
timing of annual renewal cash receipts for 2023 being received at
the end of 2022
-- Cash balances of GBP2.59m (31 December 2022: GBP2.38m)
-- Adjusted earnings per share (**) of 9.40 pence (2022: 6.27 pence)
-- Interim dividend of 1.5 pence per share (2022: 1.2 pence)
reflecting the Group's progressive dividend policy
Operational Key Points
-- Three key contracts signed amounting to approximately GBP2m
over the next 5 years with revenue due to commence in the second
half of the year
-- Content revenue increased by 19% to GBP1.25m (2022: GBP1.07m)
driven by efficient and rapid customer deployments and associated
recurring revenue
-- Commercial revenue increased by 9% to GBP4.09m (2022:
GBP3.77m) as a result of a strong order book for change control
work
-- Sales and marketing teams expanded with strategic focus on new customer wins
(*) Earnings before Interest, Tax, Depreciation and Amortisation
is calculated before foreign exchange differences and restructuring
costs. See Statement of Comprehensive Income for reconciliation
(**) Adjusted earnings per share is calculated before foreign
exchange differences. See note 4 for reconciliation
Dividend Timetable
The Company is pleased to confirm that an interim dividend of
1.5 pence per share will be paid on 23 October 2023. The
ex-dividend date is 21 September 2023 and the associated record
date for the interim dividend is 22 September 2023.
Martyn Rose, Chairman of Ingenta plc, commented:
"The Group has had a strong start to 2023 driven by our
comprehensive range of services that have been carefully developed
over the preceding years. It is pleasing to note that both of our
core divisions, Commercial and Content, were key drivers in the
reported revenue increase.
Revenue growth in the period has been generated by additional
software consultancy fees for our existing customer deployments
plus further exploratory work as we scope out potential customer
requirements for future service expansion. It is extremely
encouraging to see that we are building on our reputation as a
trusted partner for some very successful businesses.
Previously, we reported on improvements being made to our sales
and marketing efforts to win new business and I am delighted to say
that we have achieved some early success with three key contract
wins. These deals are for our content distribution platform and
have associated revenues of GBP2m over the next 5 years. The
implementation revenues for these deals will commence in the second
half of the year and have secured a significant proportion of the
Group's new sales targets for 2023.
In recognition of these successes, and in line with our
progressive dividend policy, the Board proposes to pay an interim
dividend of 1.5 pence per share."
Scott Winner, CEO, commenting on the contract wins:
"The Group has made significant progress in signing new business
and these wins demonstrate the focus in driving the business
forward. With the new wins we are both growing our targets of NGO's
and scientific publishers, as well as adding scholarly magazines,
in addition to the media wins in IP management that we reported
earlier. These wins will leverage our quick implementations to
drive ongoing recurring revenues and long-term customer
partnerships."
Certain information contained in this announcement would have
been deemed 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, until the release of
this announcement.
For further information please contact:
Ingenta plc Tel: 01865 397 800
Scott Winner / Jon Sheffield
Cenkos Securities plc Tel: 0207 397 8900
Katy Birkin / Callum Davidson
Financial Review
As previously reported, the Group has successfully restructured
its operational base and can now leverage those efficiency gains as
new business is taken on.
Statement of Comprehensive Income
Group revenue increased by 9% to GBP5.74m (2022: GBP5.27m)
driven by time-based consultancy work enhancing customer
deployments and project work scoping out potential extensions to
ongoing recurring revenue streams. Encouragingly, this growth has
come from both the Commercial and Content divisions which remain
our key focus.
As a result of the operational enhancements, any new revenue can
be efficiently serviced by the Group and this has helped increase
gross profit margins to 55% (2022: 53%). Although sales and
marketing expenditure has been stable, the activity and focus has
been refined, hires made, and there will be additional investments
made in the second half of the year as the Group targets further
revenue growth.
Administrative expenses include unrealised foreign exchange
gains on revaluation of intercompany balances of GBP0.14m (2022:
GBP0.50m loss). After adjusting for this movement, expenditure is
broadly consistent with the prior period. EBITDA adjusted for
unrealised foreign exchange differences on intercompany balances
increased by 26% to GBP1.58m (2022: GBP1.26m).
Earnings per share have increased substantially to 10.37 pence
(2022: 3.23p) and reflect the increased profitability of the Group,
unrealised exchange gains on intercompany balances, and also the
effect of the GBP2.2m tender offer to repurchase 1,796,484 Ordinary
shares in the second half of 2022. After adjusting for the effects
of foreign exchange gains and losses, the adjusted earnings per
share increased by 50% to 9.40p (2022: 6.27p).
Statement of Cash Flows and Financial Position
Cash inflow from operations was GBP0.38m (2022: GBP1.61m) which
was lower than the prior period due to the acceleration of receipts
which normally fall at the beginning of the financial year being
received at the end of 2022. This had the effect of inflating the
31 December 2022 year end cash balance and reducing cash generation
in the current period. Cash generation around the year end will
remain sensitive to the timing of large receipts from annual
billings and the Group's closing cash balances were GBP2.59m (31
December 2022: GBP2.38m).
The Statement of Financial position remains strong, with no debt
other than leases and a significant deferred tax asset of GBP1.38m
(2022: GBP1.16m) relating to the valuation of brought forward tax
losses over the coming 5 years. The comparative reduction in share
capital from GBP1,69m to GBP1.51m reflects the tender offer
mentioned above.
Outlook
Traditionally, the first half of the year is seasonally stronger
as customers commit to their annual budget plans. Whilst we expect
progress to continue in the second half of the year, it is often
less predictable as spending plans can be delayed until the next
budgetary cycle. In addition to the 3 new sales announced in the
first half of the year, the Group won another contract in August
for its content distribution platform with initial fees of GBP0.45m
over the next 6 years. All these new contracts will commence
implementation in the second half of the year and go a long way to
securing revenue targets for 2023. On balance, the Board remain
confident in the outlook for the year and expects that EBITDA for
the year ended 31 December 2023 will be ahead of market
expectations.
Jon Sheffield
Chief Financial Officer
Unaudited Condensed Consolidated Interim Statement of
Comprehensive Income
Unaudited Unaudited
Six months Six months Audited
ended ended Year ended
30 June 30 June 31 Dec
2023 2022 2022
Note GBP'000 GBP'000 GBP'000
Revenue 5,743 5,271 10,451
Cost of sales (2,583) (2,497) (5,348)
------------ ------------ ------------
Gross profit 3,160 2,774 5,103
Sales and marketing expenses (345) (367) (707)
Administrative expenses (1,275) (1,861) (3,176)
Profit from operations 1,540 546 1,220
Finance costs (10) (10) (21)
Profit before tax 1,530 536 1,199
Tax (22) (8) 260
Retained profit for the period 1,508 528 1,459
Other comprehensive expenses which
will be reclassified subsequently
to profit or loss:
Exchange differences on translating
foreign operations (165) 478 307
Total comprehensive profit for the
period 1,343 1,006 1,766
Basic profit per share - pence 4 10.37 3.23 9.02
------------ ------------ ------------
Diluted profit per share - pence 4 10.20 3.12 8.94
Adjusted EBITDA reconciliation:
Profit from operations 1,540 546 1,220
Depreciation 182 213 412
Foreign exchange (gain) / loss (142) 496 328
Gain on disposal of fixed assets - - (4)
------------
EBITDA before foreign exchange gains
/ losses 1,580 1,255 1,956
Unaudited Condensed Consolidated Interim Statement of Financial
Position
Unaudited Unaudited Audited
30 June 30 June 31 Dec
2023 2022 2022
Note GBP'000 GBP'000 GBP'000
Non-current assets
Goodwill 3 2,661 2,661 2,661
Other intangible assets 3 - - -
Property, plant & equipment 136 500 302
Deferred tax 1,384 1,163 1,384
4,181 4,324 4,347
Current assets
Trade and other receivables 5 2,365 1,150 1,910
Cash and cash equivalents 2,594 4,413 2,376
4,959 5,563 4,286
Total assets 9,140 9,887 8,633
---------- ---------- --------
Equity
Share capital 1,512 1,692 1,512
Capital redemption reserve 180 - 180
Merger reserve 11,055 11,055 11,055
Reverse acquisition reserve (5,228 ) (5,228 ) (5,228)
Translation reserve (463 ) (127 ) (298)
Share option reserve 131 107 117
Retained earnings (2,056 ) (1,750 ) (3,564)
5,131 5,749 3,774
Non-current liabilities
Deferred tax liability 37 88 37
Leases - 77 -
---------- ---------- --------
37 165 37
Current liabilities
Trade and other payables 6 1,814 1,856 2,138
Contract liabilities 2,158 2,117 2,684
---------- ---------- --------
3,972 3,973 4,822
Total equity and liabilities 9,140 9,887 8,633
---------- ---------- --------
Unaudited Condensed Consolidated Interim Statement of Changes in
Equity
Share Capital Merger Reverse Translation Share Retained Total
capital redemption reserve acquisition reserve option earnings
reserve reserve reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
January
2023 1,512 180 11,055 (5,228) (298) 117 (3,564) 3,774
Share based payment
expense - - - - - 14 - 14
Transactions with
owners - - - - - 14 - 14
--------- ------------ --------- ------------- ------------ --------- ---------- --------
Profit for the
period - - - - - - 1,508 1,508
Other comprehensive
income:
Exchange
differences
on translation
of foreign
operations - - - - (165) - - (165)
--------- ------------ --------- ------------- ------------ --------- ---------- --------
Total comprehensive
income / (expense)
for the period - - - - (165) - 1,508 1,343
--------- ------------ --------- ------------- ------------ --------- ---------- --------
Balance at 30
June 2023 1,512 180 11,055 (5,228) (463) 131 (2,056) 5,131
--------- ------------ --------- ------------- ------------ --------- ---------- --------
Share Capital Merger Reverse Translation Share Retained Total
capital redemption reserve acquisition reserve option earnings
reserve reserve reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
January
2022 1,692 - 11,055 (5,228) (605) 88 (2,278) 4,724
Share based payment
expense - - - - - 19 - 19
Transactions with
owners - - - - - 19 - 19
--------- ------------ --------- ------------- ------------ --------- ---------- --------
Profit for the
period - - - - - - 528 528
Other comprehensive
income:
Exchange
differences
on translation
of foreign
operations - - - - 478 - - 478
--------- ------------ --------- ------------- ------------ --------- ---------- --------
Total comprehensive
income / (expense)
for the period - - - - 478 - 528 1,006
--------- ------------ --------- ------------- ------------ --------- ---------- --------
Balance at 30
June 2022 1,692 - 11,055 (5,228) (127) 107 (1,750) 5,749
--------- ------------ --------- ------------- ------------ --------- ---------- --------
Unaudited Condensed Consolidated Interim Statement of Cash
Flows
Unaudited Unaudited
Six months Six months Audited
ended ended Year ended
30 June 30 June 31 Dec
2023 2022 2022
GBP'000 GBP'000 GBP'000
Profit before tax 1,530 536 1,199
Adjustments for:
Depreciation and amortisation 182 213 412
Profit on disposal of fixed
assets - - (4)
Share based payment expense 14 19 29
Interest expense 10 10 21
(Increase) / Decrease in trade
and other receivables (454) 660 (100)
(Decrease) / increase in trade
and other payables (901) 170 894
Cash inflow from operations 381 1,608 2,451
Tax Paid (22) (8) (8)
Net cash inflow from operating
activities 359 1,600 2,443
Cash flows from financing activities
Dividend paid - - (523)
Payment of leases (115) (135) (258)
Interest paid (10) (10) (21)
Costs of share repurchase - - (2,222)
------------ ------------ ------------
Net cash used in financing activities (125) (145) (3,024)
Cash flows from investing activities
Purchase of property, plant
and equipment (16) (48) (45)
Net cash used in investing activities (16) (48) (45)
Net increase / (decrease) in
cash and cash equivalents 218 1,407 (626)
Cash and cash equivalents at
beginning of period 2,376 3,006 3,006
Exchange differences on cash
and cash equivalents - - (4)
Cash & cash equivalents at end
of period 2,594 4,413 2,376
------------ ------------ ------------
Notes to the Unaudited Interim Report for the six months ended
30 June 2023
1. Nature of operations and general information
Ingenta plc (the "Company") and its subsidiaries (together the
"Group") is a provider of technology and supporting services to
content providers and publishers. The nature of the Group's
operations and its principal activities are set out in the full
annual financial statements.
The Company is incorporated in the United Kingdom under the
Companies Act 2006. The Company's registration number is 00837205
and its registered office is Suite 2, Whichford House, Oxford OX4
2JY. The condensed consolidated interim financial statements were
authorised for issue by the Board of Directors on 11 September
2023.
The financial information set out in this interim report does
not constitute statutory accounts as defined in section 404 of the
Companies Act 2006. The Group's statutory financial statements for
the year ended 31 December 2022, prepared under IFRS as adopted by
the European Union, have been filed with the Registrar of
Companies. The auditor's report on those financial statements was
unqualified and did not contain a statement under section 498 (2)
or section 498 (3) of the Companies Act 2006.
2. Basis of preparation
These unaudited condensed consolidated interim financial
statements are for the six months ended 30 June 2023. They have
been prepared following the recognition and measurement principles
of UK adopted international accounting standards in conformity with
the requirements of the Companies Act 2006. They do not include all
of the information required for full annual financial statements
and should be read in conjunction with the consolidated financial
statements of the Group for the year ended 31 December 2022.
These condensed consolidated interim financial statements have
been prepared on the going concern basis under the historical cost
convention and have been prepared in accordance with the accounting
policies adopted in the last annual financial statements for the
year ended 31 December 2022.
The accounting policies have been applied consistently
throughout the Group for the purposes of preparation of these
consolidated interim financial statements.
A detailed set of accounting policies can be found in the annual
accounts available on our website, www.ingenta.com or by writing to
the Company Secretary at the registered office as above.
3. Goodwill and Intangibles
Full details of the Group's policies on Goodwill and Intangibles
is presented in the financial statements for the year ended 31
December 2022.
4. Profit per share
Basic profit per share is calculated by dividing the profit
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the period.
For diluted profit per share, the weighted average number of
ordinary shares in issue is adjusted to assume conversion of all
dilutive potential ordinary shares.
Six months Six months
ended ended
30 June 2023 30 June 2022
Attributable profit (GBP'000) 1,508 528
Less foreign exchange (gain)
/ loss (GBP'000) (142) 496
------------- -------------
Adjusted attributable profit
(GBP'000) 1,366 1,024
Weighted average number of
ordinary basic shares (basic) 14,535,195 16,331,679
Weighted average number of
ordinary shares (diluted) 14,784,197 16,933,230
Profit per share (basic) arising
from both total and continuing
operations 10.37p 3.23p
Profit per share (dilutive)
arising from both total and
continuing operations 10.20p 3.12p
Adjusted profit per share
(basic) arising from both
total and continuing operations 9.40p 6.27p
5. Trade and other receivables
Trade and other receivables comprise the following:
30 June 30 June
2023 2022
GBP'000 GBP'000
Trade receivables - gross 1,920 834
Less: provision for impairment
of trade receivables (48) (101)
-------- --------
Trade receivables - net 1,872 733
Other receivables 4 4
Prepayments and unbilled receivables 489 413
2,365 1,150
6. Trade and other payables
Trade payables comprise the following:
30 June 30 June
2023 2022
GBP'000 GBP'000
Trade payables 274 299
Social security and other
taxes 245 337
Other payables 332 522
Accruals 963 698
1,814 1,856
7. Contingencies and commitments
There were no contingencies or commitments at the end of this or
the comparative period.
8. Post balance sheet events
There were no material events subsequent to the end of the
interim reporting period that have not been reflected in the
interim financial statements.
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IR FZGMLVGDGFZM
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