TIDMIQG
RNS Number : 1576T
IQGeo Group PLC
23 March 2021
23 March 2021
IQGeo Group plc
(the "Company" or the "Group")
Final results for the year ended 31 December 2020
Success in building recurring revenues through organic growth
and acquisition
IQGeo Group plc (AIM: IQG), a market leading provider of
geospatial productivity and collaboration software for the telecoms
and utility industries, is pleased to announce its results for the
twelve months ended 31 December 2020 (the "Period").
Operational highlights:
-- Acquisition of OSPI for a consideration of $8.75 million
adding GBP2.0 million of recurring revenue and bringing a global
customer base of over 200 customers
-- GBP1.4 million of recurring revenue added through sales of
IQGeo products increasing 75% from the prior year
-- 140% recurring revenue net retention rate*
-- Agreed sale of the minority interest of the former RTLS
business for a consideration of GBP2.5 million which was received
in January 2021
Financial highlights:
-- Own product revenue growth of 32% to GBP7.3 million (2019: GBP5.5 million)
-- Recurring revenue growth of 96% to GBP3.2 million (2019: GBP1.6 million)
-- Material increase in exit ARR** of 165% to GBP5.3 million,
including GBP2.0 million from the OSPI acquisition (65%
organic)
-- Gross margin up 10% to 52%
-- Substantially reduced adjusted EBITDA*** loss of GBP2.5
million (2019: GBP4.8 million) and reduced loss for the year of
GBP4.1 million (2019: GBP5.8 million)
-- Cash at 31 December of GBP11.1 million before the receipt of
GBP2.5 million in January 2021 from the sale of the RTLS minority
interest
Outlook:
-- Our customers' end markets have remained resilient as
telecoms and utility network operators have become an even more
critical asset to governments and communities responding to the
COVID-19 crisis
-- Exit ARR** of GBP5.3 million provides better visibility of future revenues and cash flows
-- Expected continued progress in profitability and cash flow
metrics as recurring revenues continue to grow
*recurring revenue net retention rate is the growth in recurring
revenues from existing customers, less any customer churn.
**Exit ARR is defined as the current go forward run rate of
annually renewable subscription and M&S agreements.
***Adjusted EBITDA excludes amortisation, depreciation, share
option expense, foreign exchange gains/losses on intercompany
trading balances and non-recurring items and is reported as it
reflects the performance of the Group
Richard Petti, Chief Executive Officer, said:
"The year has seen significantly improved financial results with
growth in both orders and in recurring revenue. The Group has a
strong balance sheet, which combined with the added scale and
opportunities that the OSPI acquisition brings, along with our
strong market dynamics and broad product offering, means I am
confident we can continue our growth trends in the coming
year."
For further information contact:
IQGeo Group plc +44 1223 606655
Richard Petti
Haywood Chapman
finnCap Ltd +44 20 7220 0500
Henrik Persson, Matthew Radley (Corporate Finance)
Tim Redfern, Richard Chambers (ECM)
Notes to Editors
About IQGeo
IQGeo(TM) (AIM: IQG), delivers award-winning geospatial software
solutions to telecommunication and utility network operators around
the world ranging from large multinationals to smaller regional
providers. The IQGeo software suite improves productivity and
collaboration across enterprise planning, design, construction,
maintenance, and sales processes reducing costs and operational
risks while enhancing customer satisfaction. Our mobile-first,
cloud-native software helps companies create and maintain an
accurate view of their increasingly complex network assets that is
easily accessible by anyone, wherever and whenever needed. Whether
using our Enterprise IQGeo Platform or targeted OSPInsight fiber
planning and design software, we enable a "System of Action" that
breaks down information silos, improves data quality and
accelerates decision making. Headquartered in Cambridge, with
offices in Denver, Salt Lake City, Frankfurt and Tokyo, we work
with some of the largest network infrastructure operators in the
world. For more information visit: www.iqgeo.com/
Chair's statement
Overview
We continued to make solid progress across all our key metrics
and remain well positioned to benefit from the ongoing
opportunities in the telecommunication and utility markets. In
addition, the final two weeks of the year saw us complete the
acquisition of OSPInsight International Inc (OSPI). The acquisition
brings leading technologies and industry expertise which will both
add to and complement IQGeo's existing opportunities.
During the year we continued to benefit from our fundamentals of
offering world-class products and services to industries where
continued growth and flexibility for remote working and infield
live data have become key attributes to any system. Performance
across our main geographies in North America, Asia and Europe
continued positively where key deals were executed in this period
culminating in own product revenue growth of over 30%. Following
the introduction of our subscription licence model in 2019, we
continue to see strong uptake to this model with growth in
recurring revenue up by over 90%. Our order book also substantially
increased with backlog at year-end increasing by over 50%. We
continue to have a strong balance sheet with cash of GBP11.1
million.
Results overview
Bookings of orders related to IQGeo own products increased by
42% to GBP10.7 million during 2020 (2019: GBP7.5 million) following
expansion of our presence in North America as well as adding new
contracts in Europe and Japan.
IQGeo own product revenue has increased by 32% to GBP7.3 million
(2019: GBP5.5 million) with growth driven predominantly by
recurring revenue streams.
Gross margin for the year has increased by 10% due to higher
margin IQGeo product revenues and improved services margins.
Our balance sheet remains strong with a year-end cash position
of GBP11.1 million with an additional GBP2.5 million received in
January 2021 following the sale of our minority interest in the
Ubisense business.
Organisation
The extraordinary challenges brought about by the Covid-19
pandemic required substantial change in the way we operated and
engaged with our customers. Our organisation has adapted extremely
well to the need for large parts of the year to work remotely
whilst continuing to expand our software suite and providing
customer support timely and efficiently.
On 21 December 2020 we completed the acquisition of OSPInsight
International Inc (OSPI). OSPI is a US-based geospatial software
company that develops and licenses software for operators to build
and operate fibre optic networks. Integration of both organisations
is substantially complete, and it is clear already the value of the
combination of people and products will have to our business going
forward.
Board developments
As noted last year Tim Gingell stepped down as CFO following the
AGM and we wish him the very best in the future. Haywood Chapman
joined the Board as CFO in September and brings with him a wealth
of experience with high growth businesses.
We continue our commitment to a high standard of corporate
governance by maintaining the QCA Corporate Governance Code in our
reporting structure. As such, we recognise that Robert Sansom, Max
Royde and myself are no longer regarded as independent
Non-Executive Directors. Andy McLeod, appointed in June 2019,
remains independent. Further, my role as Chair of the Audit
Committee was only expected to be temporary and the Board has now
started the search for an additional Independent Non-Executive
Director to fulfil this role.
Outlook
We remain a highly focused software business delivering products
and services to key industries where our customers provide
essential services. These industries have proven resilient to the
challenges brought about by the pandemic and many have looked to
our products to not only support growth and improve efficiency but
also to help manage the practicalities of the current
environment.
Our acquisition of OSPI brings a set of key metrics including a
loyal customer base and strong recurring revenue stream,
complementary products and skills base.
We have a strong balance sheet and a growing recurring revenue
stream supported by a developing order book.
The challenges driven by the current pandemic will hopefully
recede markedly as the year progresses, but it is too early to be
complacent of any impacts these may continue to have on us or our
customers. We therefore remain sensibly cautious, however with
strong and broader customer relationships, wider product offerings
and a strong balance sheet we are well placed to meet our growth
expectations.
The Board would like to thank all our staff who have worked
extremely hard this year in unprecedented circumstances and have
all contributed markedly to our in-year growth and the execution of
the OSPI acquisition. These efforts have also created a stronger
business for the future. Finally, we would like to thank our
customers, shareholders and other stakeholders for their continued
support.
Paul Taylor
Chair
22 March 2021
Chief Executive Officer's statement
Unprecedented challenges in our target markets
2020 has been a year like no other. The pandemic has created
significant challenges for our customers who design, build and
operate telecoms and utility networks, prompting them to find new
and more adaptable ways of working to meet their customers' needs.
Despite the challenges our customers faced, I am extremely pleased
at how the teams across our business responded. We have delivered
another improved set of results in 2020 and this is testament to
the hard work and talent of our organisation which gives me
confidence that we can continue to grow in line with our
expectations, despite the current broader market pressures.
In telecommunications markets we have seen demand for bandwidth
surge and this has forced operators to invest in resiliency,
increased bandwidth and increased fibre connections to residential
addresses. These pressures have required telecommunications
operators to increase their spending in fibre to the home and 5G
rollouts, while at the same time their consumer revenues have been
impacted by the closure of retail operations and for some, reduced
revenue from some forms of streamed content such as live sports.
Operationally, Covid-19 has created shortages of personnel due to
illness and distancing which has also impacted their ability to
meet their operational goals. Despite these challenges, telecom
operators have continued to build out new infrastructure at a rapid
pace, and many have continued to report very good financial
results. What I believe we are observing are the benefits
digitalisation has to play in corporate strategy, thanks to its
ability to reduce the amount of personnel needed to conduct
standard tasks, and its ability to accelerate the speed of
operational decisions and actions. We see these investments in
digitalisation set to continue thanks to their ability to increase
efficiency and reduce payroll costs.
In utilities markets Covid-19 has created a significant shift in
demand: while energy consumption in manufacturing has seen steep
declines, residential consumption has increased but not enough to
offset the declines in electricity wholesale prices and reductions
in the price of liquid natural gas. As in telecommunications,
operators have also seen impacts in the availability of operational
staff, increasing safety risks related to keeping staff on site and
in the field to address safety issues.
Here too we see companies investing in their digital strategies
and re--visiting their use of automation at the workplace as well
as work from home technologies thanks to their ability to increase
productivity. Longer term, the global nature of the pandemic has
raised awareness about the cost of energy consumption to the
planet, and carbon reduction goals are making their way into a
number of government-set targets which will result in investments
in alternate energy sources and knock--on effects in areas such as
distribution, storage and electrification of roads and cities.
These long-term investments will also increase the need for
efficient and mobile digital tools that increase productivity in
core areas of planning, construction, maintenance and emergency
incident management.
Our markets
While we are conscious of the terrible impact the pandemic is
having, our target industries of telecoms and utility network
operators have become an even more critical asset to governments
and communities responding to the Covid-19 crisis. With the rise in
home working and distributed operations, a spotlight was cast on
the critical nature of telecoms broadband and utilities
infrastructure. This qualified their teams as key workers and
allowed them to continue operations with Covid-secure working
practices.
After an initial period of regrouping at the beginning of 2020,
we found that operators decided to continue and even accelerate
investment in network expansion and maintenance activities, and
while we did encounter project delays, business opportunities
remained relatively strong. Our sales and marketing team focused
outreach activities on key decision makers and worked to establish
one-on-one relationships so we could understand their new
priorities and identify project opportunities.
Our response
IQGeo has managed the challenges with a pragmatic and positive
approach to the rapidly changing business realities.
At the time of the first lockdown in the beginning of the year
we moved quickly to assess the risks to the business and put plans
in place to monitor costs. Our primary objective was preserving
organisational resilience while remaining resolutely focused on the
needs of our customers. We put the retention of our staff, who are
our biggest asset, at the centre of our organisational strategy and
it was not until late in the year that we began hiring new
colleagues and rolled back all cost containment policies, including
returning salary reductions put in place earlier in the year for
higher paid employees. This strategy has allowed us to continue
delivering on all our corporate and business objectives while
maintaining high levels of staff morale throughout the
pandemic.
As a growth-oriented organisation, we understood quickly that
customers were pushing for significantly increased percentage of
their decision making to be on-line rather than engaging with
vendors directly.
Therefore, in order to support the development of our own
pipeline we quickly pivoted our marketing lead generation
operations to focus exclusively on digital content and online
activities. This strategy not only developed our pipeline but
enabled us to increase our website traffic by more than 20% and we
grew our lead generation activities by 33% when compared to
2019.
Our sales and pre-sales teams also adopted new remote selling
capabilities and by the second half of the year we had closed
opportunities that had been instigated remotely from start to
finish; this is an unprecedented result for a company in an
industry that has relied heavily on person-to-person contact for
large scale technology investments. In an industry where trust,
competence and hard proof of value is required to win contracts
this has been a great achievement for us and highlights the quality
of our staff, our product and our excellent customer references. In
retrospect, 100% digital selling has forced us to re-evaluate the
customer journey and what we must do to win their trust in a way
that will have lasting impact on our business.
Our development team continued to release several exciting new
products in addition to significant updates on our existing
geospatial software product line. In particular, the increased
demand for mobile and work-from-home capabilities has been met with
some exciting developments in our cloud capabilities, and we now
market the IQGeo product with what we consider to be
best--in--class scaling and cost optimisation cloud
capabilities.
Our 2020 outcomes
We used 2020 to successfully reinforce IQGeo's market position
as a market leading geospatial software provider. Whilst market
awareness and reputation can be difficult to measure, I can see in
my own interactions with key customers, partners and prospects that
we are making good progress in promoting our unique 'office to
field' vision for our target markets and there is continued
evidence companies are responding to this very positively.
More importantly by the end of 2020, sales and service delivered
on our expectations for pre-acquisition targets by signing 13 new
customers and expanding recurring revenue within our existing
accounts. We achieved 42% year on year growth for order intake
related to IQGeo products and we successfully grew total revenue by
17%, which is indicative of the momentum we are building in our
markets. More importantly as we look to continue the journey to
being a high recurring revenue software business, our recurring
revenue orders grew by 152% year on year and our recurring revenue
grew by 96%. Higher recurring revenue, combined with a good
performance by our services team, meant our gross margins exceeded
50%, delivering a reduced adjusted EBITDA loss of GBP2.5 million
(2019: GBP4.8 million) and reduced operating loss of GBP4.3 million
(2019: GBP6.3 million).
IQGeo's acquisition of OSPInsight
Another major highlight for 2020 was the announcement on the
21st of December that we had completed the acquisition of
OSPInsight (OSPI) for a total consideration of up to $8.75 million.
They are a US-based software company located in Salt Lake City,
Utah with a well--established fibre planning and design solution.
While this acquisition happened late in the year and made a
marginal financial contribution to IQGeo's 2020 revenues, the OSPI
software and team will make an important strategic and
complementary contribution towards our journey to
profitability.
OSPI is a profitable 20-year-old business with a formidable
reputation amongst fibre operators as a provider of high quality
and easy to implement fibre network management geospatial systems.
The OSPI acquisition brings a customer base of more than 200 fibre
network operators to IQGeo along with GBP2.0 million recurring
revenue.
OSPI opens up a whole new market of smaller Tier 3, Tier 4 and
private network operators such as universities with less mature
infrastructure. OSPI's sales and delivery methodology can close
opportunities in around 6 weeks from qualification and customers
can be live in a matter of days, which means OSPI is well poised to
capitalise in the surge of smaller fibre operators in North
American, European and Asian markets.
Thanks to their strength in the lower tiers, there is very
little overlap in target markets, and we have been able to quickly
coordinate our sales and marketing efforts to ensure new
opportunities are directed to the appropriate team.
The OSPI product, because of its ease of use and simple
installation is also ideally suited to sales through reseller
channels where they have successfully sold into markets as diverse
as sub-Saharan Africa, Middle East and Australasia. In 2021 it is
our goal to extend the reach of the OSPI software through a
reseller programme in our existing geographic markets and new areas
of the world such as South East Asia where IQGeo to date has had a
limited footprint.
The OSPI business is a good cultural fit with IQGeo and will
accelerate our route to creating a cloud-first software business
and by adding significant technology expertise in the area of fibre
network design for our telecoms customers.
The OSPI acquisition has been well received by their customer
base, who are pleased with the prospect of rapid innovation in the
product roadmap and a larger organisation to provide them with
services and support. IQGeo customers in turn have been pleased
with the acquisition of a highly respected brand in the business
and the prospect of more expertise joining the IQGeo
organisation.
Looking to the cloud
Over the course of 2020 we saw a significant increase in
interest from our customers in deploying our geospatial software
into the cloud. This increase parallels cloud deployment trends
found in other enterprise software industries with companies
looking to take advantage of the flexibility, cost savings,
performance, and security of resilient cloud offerings from Amazon,
Google, Microsoft and others. We believe that cloud deployments
will continue gathering speed in 2021 across all our customer tiers
and we are focusing additional strategic resources in this area to
support our customers and further enable new software and licensing
options for our business.
The IQGeo software platform for our enterprise customers has
always had a cloud-first approach. This cloud--native software
architecture provides us with a distinct advantage over our
workstation--centric competitors that struggle to make use of the
benefits afforded by a full cloud deployment. These strengths have
been further accelerated with the addition of microservices and
containerisation to further improve our scalability and
cost--optimisation capabilities making IQGeo an attractive SaaS
proposition for our larger customers.
The OSPI customer base also presents a good opportunity for us
to develop a new cloud-based offering that over time will allow us
to migrate the entire customer base into a single SaaS offering.
Our goal will be to preserve the unique features and the look and
feel of the OSPI product but offer this in a cloud environment that
takes advantage of IQGeo's existing architecture strengths in this
environment.
Our strategic goals
IQGeo is a specialist software provider and will continue to
focus on delivering high growth from new business sales and
expansions with existing accounts whilst underpinning sales with a
high level of recurring revenue.
In the year ahead IQGeo will be focusing on:
1. Targeted segment-specific growth
With a broadened product portfolio our areas of growth will
remain very focused. With the IQGeo product line we will target the
'Enterprise' market which we define as Tier 1 and 2 telco and
utilities customers across our three regions (NA, Europe, Japan),
which have the potential of several thousand users. With our OSPI
product line we will target the fast-moving market in lower tier
fibre operators ('alt net' operators in the UK) and private network
operators like universities and corporations. For this SMB (small
and medium business) market we will also develop our channel
network for this product line, particularly in Europe and non-Japan
Asia.
2. Transition to SaaS business
Our Enterprise market is increasingly demanding cloud technology
and in 2021 we expect to sell an increased percentage of software
subscriptions that include hosting services from one of our
partners. On the SMB side we will launch the much-anticipated OSPI
product extensions in the cloud with a view to migrating the entire
customer base to the cloud over the next three years.
3. Product innovation
Our product range uniquely straddles the space between
geospatial data repositories and field systems and maintaining this
advantage will require continued investment in our products to
maintain our competitive advantages. 2021 will see us expanding the
OSPI product range to match the IQGeo 'office-to-field' positioning
and in addition we shall be enhancing the network design
capabilities for our Utilities market where we see continued
opportunities of growth.
Forecast and outlook
With the added scale and opportunities that the OSPI acquisition
brings, combined with market dynamics and our strong product
offering, a growth in orders and an increasing visibility over
forward recurring revenues, I am optimistic we can continue our
growth trends in line with our expectations for the coming
year.
On behalf of the IQGeo Board and employees, I would like to
thank our customers, investors and partners for their help and
support with the unique challenges we all faced during 2020. We
have a strong balance sheet as we enter 2021 and I believe we have
now established real momentum in the business and are well
positioned in our goal of creating an attractive high growth
software business with a high degree of recurring revenue.
Richard Petti
Chief Executive Officer
22 March 2021
Chief Financial Officer's statement
Principal events and overview
The year ended 31 December 2020 has been one of growing the
business organically and increasing recurring revenues. The
commercial model for the Group continues to focus on increasing
Annual Recurring Revenue ("ARR") through subscription-based
software sales and maintaining long-term relationships with
customers, creating recurring revenue growth and achieving
sustained profitability and cash flows. ARR also includes
maintenance and support arrangements from perpetual licence sales.
Additionally, revenue is derived from consultancy services on own
IP products and also consultancy services connected to third party
products. Revenues from third party product services have declined
in the current period and while these services have declined less
than previous expectations, they are still expected to decline in
future periods as the Group continues to focus on growing recurring
revenues.
On 21 December 2020 the Group acquired OSPInsight International
Inc. ("OSPI") for a total consideration of up to $8.75 million. The
consideration paid consisted of both cash from a successful placing
which brought new investors onto the share register, and the issue
of IQGeo shares to the vendor. Due to the timing of the acquisition
the impact on the consolidated income statement of the Group is
minimal. The acquisition brings more than 200 customers to the
Group and opens up a whole new market of Tier 3 and Tier 4
operators, so should bring great benefits as we move forward.
Key Performance indicators
On a monthly basis, the Directors review revenue, operating
costs, cash and KPIs to ensure the continued growth and development
of the Group. Primary KPIs for 2019 and 2020 were:
KPIs 2020 2019
GBP'000 GBP'000
--------------------------------- -------- --------
Total revenue 9,155 7,806
Recurring revenue 3,195 1,632
Recurring revenue % 35% 21%
IQGeo own product orders 10,700 7,500
Gross margin % 52% 42%
Operating costs 9,074 9,539
Adjusted EBITDA loss (2,495) (4,848)
Loss for the year (4,111) (5,767)
Recurring revenue net retention 140% 120%
Cash 11,078 13,053
--------------------------------- -------- --------
Annual recurring revenue
The Group has been successful in continuing to increase ARR with
GBP1.4 million being won during 2020 through sales to both new and
existing customers (2019: GBP0.8 million). The opportunity to grow
existing customer accounts through new products and increasing the
user count, along with excellent logo retention, have resulted in
an ARR net retention figure of 140% during 2020. Recurring revenues
now account for 35% of all revenue, compared to 21% in 2019, and as
this percentage continues to grow, this will bring increased
visibility of revenues and cash flows.
Additionally, the OSPI acquisition has added a further GBP2.0
million of future ARR to the Group.
The combination of organic growth and the OSPI acquisition has
resulted in the exit ARR as at 31 December 2020 increasing by 165%
to GBP5.3 million (2019: GBP2.0 million), after revaluation of ARR
to year-end FX rates.
Orders
Bookings of orders related to IQGeo own products increased by
over 42% to GBP10.7 million during 2020 (2019: GBP7.5 million) with
new customers being added in all three of our key markets (North
America, Europe and Japan). Of these bookings, GBP6.3 million
relates to recurring revenues due to new customers entering into
multi-year subscriptions and a growing renewals base (2019: GBP2.5
million).
IQGeo own product order backlog as at 31 December 2020 was
GBP8.3 million (2019: GBP3.7 million) with the growth being due to
increased order intake during 2020 and acquired backlog due to the
OSPI acquisition. Third-party Geospatial Services order backlog was
GBP0.9 million (2019: GBP1.4 million).
Bookings of orders related to third party Geospatial Services
were GBP1.2 million (2019: GBP1.6 million) reflecting the managed
decline in this legacy revenue stream.
Revenue
Revenue composition by revenue stream is summarised in the table
below:
Revenue by stream 2020 % of total 2019 % of total Year on
GBP'000 revenue GBP'000 revenue year growth
--------- ----------- --------- -----------
Recurring IQGeo product revenue 3,195 35% 1,632 21% 96%
--------------------------------- --------- ----------- --------- ----------- -------------
Perpetual Software 299 3% 1,589 20% (81)%
Services 3,846 42% 2,328 30% 65%
--------------------------------- --------- ----------- --------- ----------- -------------
Non-recurring IQGeo product
revenue 4,145 45% 3,917 50% 6%
Total IQGeo product revenue 7,340 80% 5,549 71% 32%
--------- ----------- --------- -----------
Geospatial services from
third party products 1,815 20% 2,257 29% (20)%
--------------------------------- --------- ----------- --------- ----------- -------------
Total revenue 9,155 100% 7,806 100% 17%
--------------------------------- --------- ----------- --------- ----------- -------------
The growth in ARR intake has translated into recurring revenue
growth of 96% during 2020 to GBP3.2 million (2019: GBP1.6 million).
The increased Exit ARR of GBP5.3 million along with the
anticipation of continued positive net retention of our existing
customer base, is expected to provide future growth and stability
to our recurring revenues.
Sales of perpetual software licences have decreased
significantly from the prior year as the Group continues to focus
on subscription sales, however with some customers preferring a
perpetual software offering it is anticipated that this one-off
revenue will continue to fluctuate year on year.
As the number of new deployments and expansion orders continue
to increase, the associated service revenues have also grown by 65%
with a good backlog of further work to be recognised in future
periods. Visibility of services revenues is now around 6 months at
current revenue rates.
Gross profit
Gross profit 2020 Gross 2019 Gross Gross margin
GBP'000 margin GBP'000 margin var
% %
--------- -------- --------- --------
Gross profit/gross margin 4,746 52% 3,243 42% 10%
--------------------------- --------- -------- --------- -------- -------------
Gross margin percentage has increased during 2020 by 10%. This
increase is a result of the revenue mix moving towards higher
margin IQGeo product revenues. Improved services margins have been
achieved through the delivery of internal efficiencies driving
higher staff utilisation on billable projects, as well as tight
cost management.
Operating expenses and adjusted EBITDA from continuing
operations
Operating expenses were GBP9.1 million (2019: GBP9.5 million)
and are summarised as follows:
2020 2019
GBP'000 GBP'000
-------------------------------------------------- -------- --------
Other operating expenses 7,241 8,091
Depreciation 369 285
Amortisation 1,002 815
Share option expense 130 102
Unrealised foreign exchange loss on intercompany
trading balances 43 110
Non-recurring items 289 136
-------------------------------------------------- -------- --------
Total operating expense 9,074 9,539
-------------------------------------------------- -------- --------
Other operating expenses of the Group include sales, product
development, marketing and administration costs, net of costs
capitalised.
The business continues to be focused on maintaining tight
control of costs. Additionally, there has been a significant
reduction in travel and marketing expenditure as an unavoidable
consequence of the pandemic. While these short-term measures have
reduced costs during 2020, the Group anticipates expenditure to
increase again to support the growth of the business.
Adjusted EBITDA excludes amortisation, depreciation, share
option expense, foreign exchange gains/losses on intercompany
trading balances and non-recurring items and is reported as it
reflects the performance of the Group. Adjusted EBITDA for the year
was a GBP2.5 million loss (2019: Adjusted EBITDA GBP4.8 million
loss).
Non-recurring costs in 2020 relate to OSPI acquisition
costs.
The operating loss for the period from continuing operations was
GBP4.3 million (2019: GBP6.3 million).
EPS and dividends
Adjusted diluted loss per share from continuing operations was
7.3 pence (2019: 8.8 pence). Reported basic and diluted loss per
share from continuing operations was 8.2 pence (2019: 9.4 pence).
The Board does not feel it appropriate at this time to commence
paying dividends.
Consolidated statement of financial position
As at 31 December 2020, the Group had a cash position of GBP11.1
million with debt of GBP0.6 million (2019: GBP13.1 million and no
debt).
On 1 December 2020 the Group successfully completed a fundraise
with net proceeds of GBP5.2 million. The proceeds were used to fund
the acquisition of OSPI which completed on 21 December 2020. GBP4.0
million of cash was paid to the sellers on completion of the deal
along with a further GBP0.8 million being settled through issue of
IQGeo shares. The consolidated statement of financial position
includes liabilities for further deferred and contingent
consideration totalling GBP1.5 million to be settled through issue
of cash and shares in December 2021 and January 2022.
Non-current assets
Total non-current assets were GBP10.6 million (2019: GBP3.8
million).
As at 31 December 2020, GBP7.0 million of intangible assets
associated with the OSPI acquisition are included within
non-current assets.
Capitalised development costs at 31 December 2020 were GBP1.8
million (2019: GBP1.5 million) with the increase reflecting the
investment in the IQGeo product suite. No change has been made to
the current three-year amortisation period, due to the fast-moving
nature of the technology.
Current assets
Total current assets increased to GBP16.8 million (2019: GBP15.4
million).
The consideration for disposal of the RTLS SmartSpace business
included GBP2 million in a rollover investment into the sold
business. On 29 December 2020, the Group entered into an agreement
to sell its shares in the rollover investment for a consideration
of GBP2.5 million. The sale completed and GBP2.5 million cash was
received by IQGeo in January 2021. As at 31 December 2020, the
investment has been reclassified as a current asset held for sale
within the consolidated statement of financial position at a value
of GBP2.5 million.
Total assets
Total assets increased to GBP27.5 million (2019: GBP19.2
million) due to non-current assets associated with the OSPI
acquisition.
Current liabilities
Total current liabilities increased to GBP6.2 million (2019:
GBP3.3 million) which includes an increase in deferred revenue of
GBP1.7 million and deferred acquisition payables of GBP0.7
million.
Non-current liabilities
Total non-current liabilities increased to GBP3.2 million (2019:
GBP0.3 million) due to the recognition of lease obligations as our
Denver operations relocated to new premises during the year.
Additionally, GBP0.7 million contingent consideration relating to
the OSPI acquisition has been recognised.
Net assets
Net assets increased to GBP18.1 million (2019: GBP15.6
million).
Cash and cash flow
Operating cash outflow before working capital movement was
GBP2.8 million (2019: GBP4.9 million). Operating cash outflow from
operating activities after adjusting for working capital and tax
was GBP2.3 million (2019: GBP4.7 million).
The Group had investment outflows of GBP1.3 million (2019:
GBP1.2 million) due to expenditure on capitalised software
development costs and GBP4.0 million associated with the OSPI
acquisition.
Cash inflows from financing activities were GBP5.8 million
(2019: GBP11.2 million outflow) primarily due to the fundraise
completed in December 2020. Additionally, GBP0.7 million of cash
inflow related to a bank loan provided by HSBC bank USA under the
Paycheck Protection Program.
Going Concern
The Directors have prepared detailed cash flow projections
including sensitivity analysis on key assumptions. The projections
prepared show that the Group will be able to operate within the
current levels of cash available. In addition to the year-end cash
balance, a further GBP2.5 million was received in January 2021 from
the sale of the minority stake in the former RTLS business. Also in
January, GBP0.4 million was received from HMRC as a result of
R&D tax credit claims in respect of the 2018 and 2019 financial
years. At the end of January 2021, the Group had cash net of
borrowings of GBP13.1 million.
Based on the funding available, the Directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. Accordingly, the
Group continues to adopt the going concern basis in preparing its
consolidated financial statements.
Haywood Chapman
Chief Financial Officer
22 March 2021
Consolidated income statement
for the year ended 31 December 2020
2020 2019
Notes GBP'000 GBP'000
---------------------------------------- ----- -------- --------
Revenue 5 9,155 7,806
Cost of revenues (4,409) (4,563)
---------------------------------------- ----- -------- --------
Gross profit 4,746 3,243
Operating expenses (9,074) (9,539)
---------------------------------------- ----- -------- --------
Operating loss (4,328) (6,296)
---------------------------------------- ----- -------- --------
Analysed as:
Gross profit 4,746 3,243
Other operating expenses (7,241) (8,091)
---------------------------------------- ----- -------- --------
Adjusted EBITDA (2,495) (4,848)
Depreciation 14,15 (369) (285)
Amortisation of other intangible assets 13 (1,002) (815)
Share option expense (130) (102)
Unrealised foreign exchange losses on
intercompany trading balances (43) (110)
Non-recurring items 10 (289) (136)
---------------------------------------- ----- -------- --------
Operating loss (4,328) (6,296)
---------------------------------------- ----- -------- --------
Finance income 9 7 72
Finance costs 9 (105) (10)
---------------------------------------- ----- -------- --------
Loss before tax (4,426) (6,234)
Income tax 11 315 64
---------------------------------------- ----- -------- --------
Loss from continuing operations (4,111) (6,170)
---------------------------------------- ----- -------- --------
Profit from discontinued operations 7 - 403
---------------------------------------- ----- -------- --------
Loss for the year (4,111) (5,767)
---------------------------------------- ----- -------- --------
Loss per share - continuing operations
Basic 12 (8.2p) (9.4p)
Diluted 12 (8.2p) (9.4p)
---------------------------------------- ----- -------- --------
Consolidated statement of comprehensive income
for the year ended 31 December 2020
2020 2019
GBP'000 GBP'000
-------------------------------------------------- -------- --------
Loss from continued operations (4,111) (6,170)
Profit from discontinued operations - 403
-------------------------------------------------- -------- --------
Loss for the year (4,111) (5,767)
Other comprehensive income:
Items that may be reclassified subsequently
to profit and loss
Exchange difference on retranslation of net
assets and results of overseas subsidiaries
from continuing operations 80 5
Items that will not be reclassified to profit
and loss
Changes in the fair value of equity investments
at fair value through other comprehensive income 500 -
Total comprehensive loss for the year (3,531) (5,762)
-------------------------------------------------- -------- --------
Consolidated statement of changes in equity
for the year ended 31 December 2020
Share
based Capital Merger
Share Share payment redemption relief Translation Retained
capital premium reserve reserve reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- -------- -------- -------- ----------- -------- ----------- --------- --------
Balance at 1 January 2019 1,462 46,375 717 - - (1,871) (14,411) 32,272
------------------------- -------- -------- -------- ----------- -------- ----------- --------- --------
Loss for the year - - - - - - (5,767) (5,767)
Exchange difference on
retranslation
of net assets and
results
of overseas subsidiaries - - - - - 5 - 5
Total comprehensive loss
for the year - - - - - 5 (5,767) (5,762)
Capital reduction - (28,948) - - - - 28,948 -
Repurchase and
cancellation
of shares (476) - - 476 - - (10,950) (10,950)
Exercise of share options 4 27 (6) - - - 6 31
Lapse of share options - - (60) - - - 60 -
Reserve debit for
equity-settled
share-based payment - - (19) - - - - (19)
Transactions with owners (472) (28,921) (85) 476 - - 18,064 (10,938)
------------------------- -------- -------- -------- ----------- -------- ----------- --------- --------
Balance at 31 December
2019 990 17,454 632 476 - (1,866) (2,114) 15,572
------------------------- -------- -------- -------- ----------- -------- ----------- --------- --------
Loss for the year - - - - - - (4,111) (4,111)
Exchange difference on
retranslation
of net assets and
results
of overseas subsidiaries - - - - - 80 - 80
Other comprehensive
income - - - - - - 500 500
------------------------- -------- -------- -------- ----------- -------- ----------- --------- --------
Total comprehensive loss
for the year - - - - - 80 (3,611) (3,531)
Issue of shares -
fundraise,
net of costs 136 5,030 - - - - - 5,166
Issue of shares -
acquisition 18 - - - 739 - - 757
Exercise of share options 2 10 (3) - - - 3 12
Lapse of share options - - (569) - - - 569 -
Equity-settled
share-based
payment - - 130 - - - - 130
------------------------- -------- -------- -------- ----------- -------- ----------- --------- --------
Transactions with owners 156 5,040 (442) - 739 - 572 6,065
------------------------- -------- -------- -------- ----------- -------- ----------- --------- --------
Balance at 31 December
2020 1,146 22,494 190 476 739 (1,786) (5,153) 18,106
------------------------- -------- -------- -------- ----------- -------- ----------- --------- --------
Consolidated statement of financial position
for the year ended 31 December 2020
2020 2019
Notes GBP'000 GBP'000
------------------------------------ ----- ---------- --------
Assets
Intangible assets 13 8,902 1,596
Property, plant and equipment 14 167 86
Right-of-use assets 15 1,567 73
Investments 16 - 2,000
Total non-current assets 10,636 3,755
------------------------------------ ----- ---------- --------
Current assets
Trade and other receivables 17 2,850 2,353
Corporation tax receivable 413 16
Asset held for sale 16 2,500 -
Cash and cash equivalents 18 11,078 13,053
------------------------------------ ----- ---------- --------
Total current assets 16,841 15,422
------------------------------------ ----- ---------- --------
Total assets 27,477 19,177
------------------------------------ ----- ---------- --------
Liabilities
Current liabilities
Trade and other payables 19 (5,828) (3,241)
Bank loans payable 20 (167) -
Lease obligation 21 (208) (79)
Total current liabilities (6,203) (3,320)
------------------------------------ ----- ---------- --------
Non-current liabilities
Deferred income tax liabilities 11 (351) (285)
Trade and other payables 6 (746) -
Bank loans 20 (433) -
Lease obligation 21 (1,638) -
Total non-current liabilities (3,168) (285)
------------------------------------ ----- ---------- --------
Total liabilities (9,371) (3,605)
------------------------------------ ----- ---------- --------
Net assets 18,106 15,572
------------------------------------ ----- ---------- --------
Equity attributable to owners of
the Company
Ordinary share capital 22 1,146 990
Share premium 22 22,494 17,454
Share-based payment reserve 190 632
Capital redemption reserve 476 476
Merger relief reserve 739 -
Translation reserve (1,786) (1,866)
Retained earnings (5,153) (2,114)
------------------------------------ ----- ---------- --------
Equity attributable to shareholders
of the Company 18,106 15,572
------------------------------------ ----- ---------- --------
The financial statements were approved and authorised for issue
by the Board of Directors on 22 March 2021 and signed on its behalf
by:
Richard Petti Haywood Chapman
Chief Executive Officer Chief Financial Officer
IQGeo Group plc
Registered Number: 05589712
Consolidated statement of cash flows
for the year ended 31 December 2020
2020 2019
Notes GBP'000 GBP'000
---------------------------------------------------- ----- -------- --------
Operating activities
Loss before tax from continuing operations (4,426) (6,234)
Gain/(loss) before tax from discontinued operations - 161
---------------------------------------------------- ----- -------- --------
Loss before tax (4,426) (6,073)
Adjustments for:
Depreciation 14,15 369 285
Amortisation 13 1,002 815
Unrealised foreign exchange losses on intercompany
trading balances 43 110
Share-based payment charge 130 (19)
Finance income 9 (7) (72)
Finance costs 9 105 10
---------------------------------------------------- ----- -------- --------
Operating cash flows before working capital
movement (2,784) (4,944)
Change in receivables 190 388
Change in payables 295 (10)
---------------------------------------------------- ----- -------- --------
Cash generated from operations before tax (2,299) (4,566)
---------------------------------------------------- ----- -------- --------
Net income taxes received/(paid) (17) (124)
---------------------------------------------------- ----- -------- --------
Net cash flows from operating activities (2,316) (4,690)
---------------------------------------------------- ----- -------- --------
Cash flows from investing activities
Purchases of property, plant and equipment (165) (56)
Expenditure on intangible assets (1,307) (1,176)
Cash received on sale of the RTLS SmartSpace
business unit - 1,060
Disposal costs in relation to the RTLS SmartSpace
business unit - (1,839)
Acquisition of subsidiaries, net of cash acquired (3,990) -
Interest received 7 72
Net cash flows from investing activities (5,455) (1,939)
---------------------------------------------------- ----- -------- --------
Cash flows from financing activities
Borrowings 662 -
Interest paid - (2)
Payment of lease liability (78) (238)
Repurchase of ordinary share capital - (10,950)
Proceeds from the issue of ordinary share capital 5,178 31
---------------------------------------------------- ----- -------- --------
Net cash flows from financing activities 5,762 (11,159)
---------------------------------------------------- ----- -------- --------
Net increase in cash and cash equivalents (2,009) (17,788)
Cash and cash equivalents at start of period 13,053 30,915
Exchange differences on cash and cash equivalents 34 (74)
---------------------------------------------------- ----- -------- --------
Cash and cash equivalents at end of period 18 11,078 13,053
---------------------------------------------------- ----- -------- --------
Notes to the consolidated financial statements
1 General information
IQGeo Group plc ("the Company") and its subsidiaries (together,
"the Group") delivers geospatial software solutions that integrate
data from any source - geographic, real-time asset, GPS, location,
corporate and external cloud-based sources - into a live geospatial
common operating picture, empowering all users in the customer's
organisation to access, input and analyse operational intelligence
to proactively manage their networks, respond quickly to emergency
events and effectively manage day-to-day operations.
The Company is a public limited company which is listed on the
Alternative Investment Market ("AIM") of the London Stock Exchange
(IQG) and is incorporated and domiciled in the United Kingdom. The
value of IQGeo Group plc shares, as quoted on the London Stock
Exchange at 31 December 2020, was 96.0 pence per share (31 December
2019: 57.5 pence).
The Company was incorporated as Ubisense Trading Limited on 11
October 2005 and changed its name to Ubisense Group plc on 31 May
2011 ahead of its initial public offering and listing on AIM on 22
June 2011. Following the sale of its RTLS SmartSpace business unit
the Company changed its name to IQGeo Group plc on 2 January 2019
with its subsidiaries also changing name to IQGeo. The address of
its registered office is Nine Hills Road, Cambridge, United
Kingdom, CB2 1GE.
The Group has its operations in the UK, USA, Canada, Germany and
Japan, and sells its products and services in North America, Japan,
UK and Europe. The Group legally consists of six subsidiary
companies headed by IQGeo Group plc.
The consolidated financial statements have been approved for
issue by the Board of Directors on 22 March 2021.
2 New accounting standards
The consolidated financial statements are prepared in accordance
with international accounting standards in conformity with the
requirements of the Companies Act 2006.
The accounting policies used are the same as set out in detail
in the Annual Report and Accounts 2019 and have been applied
consistently to all periods presented in the financial
statements.
There were no new standards or amendments or interpretations to
existing standards that became effective during the year that were
material to the Group.
No new standards, amendments or interpretations to existing
standards having an impact on the financial statements that have
been published and that are mandatory for the Group's accounting
periods beginning on or before 1 January 2021, or later periods,
have been adopted early.
Standards and interpretations not yet applied by the Group
The following new Standards and Interpretations, which are yet
to become mandatory and have not been applied in the Group's
financial statements, are not expected to have a material impact on
the Group's financial statements.
-- IFRS17 Insurance contracts
-- Amendments to IFRS 17 Insurance Contracts (Amendments to IFRS
17 and IFRS 4)
-- References to the Conceptual Framework
-- Proceeds before Intended Use (Amendments to IAS 16)
-- Onerous Contracts - Cost of Fulfilling a Contract (Amendments
to IAS 37)
-- Annual Improvements to IFRS Standards 2018-2020 Cycle
(Amendments to IFRS 1, IFRS 9, IFRS 16, IAS 41)
-- Classification of Liabilities as Current or Non-current
(Amendments to IAS 1)
These amendments are not expected to have a significant impact
on the financial statements in the period of initial application
and therefore the disclosures have not been made.
3 Summary of significant accounting policies
The principal accounting policies applied in the preparation of
the consolidated financial statements are set out below. These
policies have been consistently applied to all the years presented,
unless otherwise stated.
Basis of preparation
The consolidated financial statements of IQGeo Group plc are
prepared in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006
('IFRS'). The consolidated financial statements have been prepared
under the historical cost convention. The consolidated financial
statements are presented in GBP and all values are rounded to the
nearest thousand pounds (GBP'000) except when otherwise
indicated.
The preparation of these financial statements in conformity with
IFRS requires the Directors to make certain critical accounting
estimates and judgements that affect the amounts reported in the
financial statements and accompanying notes. The areas involving a
higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the consolidated
financial statements, are disclosed in note 4.
Going concern basis
In determining the basis for preparing the consolidated
financial statements, the Directors are required to consider
whether the Company can continue in operational existence for the
foreseeable future, being a period of not less than twelve months
from the date of the approval of the consolidated financial
statements.
Management prepares detailed cash flow forecasts which are
reviewed by the Board on a regular basis. The forecasts include
assumptions regarding the opportunity funnel from both existing and
new clients, growth plans, risks and mitigating actions. In
particular, operating cash flow and profitability are highly
sensitive to revenue mix and the positive contribution of
continuing growth in software sales whether on a perpetual licence
or subscription basis.
In reaching their going concern conclusion, the Directors have
considered that the Group had cash of GBP11.1 million, with GBP0.6
million bank debt as at 31 December 2020 and sufficient working
capital to continue operations. Additionally, in January 2021,
IQGeo received an additional GBP2.5 million on disposal of its
rollover investment of the Ubisense business.
The Group's forecasts and projections, taking account of
reasonably possible changes in trading performance, support the
conclusion that there is a reasonable expectation that the Company
and the Group have adequate resources to continue in operational
existence for the foreseeable future, a period of not less than
twelve months from the date of this report. The Group, therefore,
continues to adopt the going concern basis in preparing the
consolidated financial statements.
Consolidation
The Group financial statements include the results, financial
position and cash flows of the Company and all of its subsidiary
undertakings. Subsidiary undertakings are those entities controlled
directly or indirectly by the Company. Control arises when the
Company has the power to govern the financial and operating
policies of an entity, uses this power to affect the returns from
that entity and has exposure to variable returns from its
investment in the entity.
Financial statements of the subsidiaries are prepared for the
same reporting year as the Company, using consistent accounting
policies. Businesses acquired or disposed during the year are
accounted for using acquisition method principles from, or up to,
the date control passed. Intra-group transactions and balances are
eliminated on consolidation. All subsidiaries use uniform
accounting policies for like transactions and other events and
similar circumstances.
Non-controlling interests in the net assets of consolidated
subsidiaries are identified separately from the Group's equity
therein. Non-controlling interests consist of the amount of those
interests at the date of the original business combination and the
non-controlling interest's share of changes in equity since the
date of combination.
Foreign currencies
a. Functional and presentation currency
The functional currency of each Group entity is the currency of
the primary economic environment in which each entity operates. The
consolidated financial statements are presented in GBP.
b. Transactions and balances
Foreign currency transactions are translated into the functional
currency of each Group entity using the exchange rates prevailing
at the dates of transactions. Monetary assets and liabilities
denominated in foreign currencies are translated at rates ruling at
the period end date. Such exchange differences are included in the
consolidated income statement within "operating expenses".
Non-monetary items that are measured in terms of historical cost in
a foreign currency are translated using the exchange rates as at
the dates of the initial transactions.
c. Consolidation
For the purpose of presenting consolidated financial statements,
the results and financial position of all the Group entities (none
of which have the currency of a hyperinflationary economy) that
have a functional currency other than GBP are translated into GBP
as follows:
-- assets and liabilities for each statement of financial
position are translated at the exchange rate at the period end
date;
-- income and expenses for each income statement are translated
at the exchange rate ruling at the time of each period the
transaction occurred; and
-- all resulting exchange differences are recognised in other comprehensive income.
Business reporting
IFRS 8 requires a "management approach" under which information
in the financial statements is presented on the same basis as that
used for internal management reporting purposes.
The Group is organised on a global basis. The Directors believe
that the Chief Operating Decision Maker (CODM) is the Chief
Executive Officer of the Group. The CODM and the rest of the Board
are provided with information as a single business unit to assess
its financial performance.
The internal management accounting information is prepared on an
IFRS basis but has non-GAAP "Adjusted EBITDA" as the primary
measure of profit and this is reported on the face of the
consolidated income statement.
Revenue recognition
Revenue represents the fair value of consideration received or
receivable for the sales of goods and services net of discounts and
sales taxes. Revenue is recognised based on the distinct
performance obligations under the relevant customer contract as set
out below. Where goods and/or services are sold in a bundled
transaction or on a subscription basis, the Group allocates the
total consideration under the contract to the different individual
elements based on actual amounts charged by the Group on a
standalone basis.
Software
Revenue earned from software sales under perpetual licence
agreements with maintenance and support is recognised when the
software is made available to the customer for use.
If contracts include performance obligations which result in
software being customised or altered, the software cannot be
considered distinct from the labour service. Revenue recognition is
dependent on the contract terms and assessment of whether the
performance obligation is satisfied over time. If the conditions of
IFRS15 to recognise revenue over time are not satisfied, revenue is
deferred until the software is available for customer use.
Maintenance and support
Maintenance and support is recognised on a straight-line basis
over the term of the contract, which is typically one year. Revenue
not recognised in the consolidated income statement is classified
as deferred revenue on the consolidated statement of financial
position.
Subscription
Software sold on a non perpetual basis consists of two
performance obligations: a licence obligation for the temporary
right to use the software and a post contract customer support
obligation for the right to receive updates, enhancements, error
corrections and support throughout the contracted term. The
customer obtains the right to use the software once the licence has
been delivered and the licence period starts. Revenue for the
licence obligation is recognised at the point in time when the
licence is delivered, whereas the maintenance and support
obligation is satisfied over time and the associated revenue
recognised on a straight-line basis over the term of the contract.
Revenue not recognised in the consolidated income statement is
classified as deferred revenue in the consolidated statement of
financial position.
Services
Services revenue includes consultancy and training. Services
revenue from time and materials contracts is recognised in the
period that the services are provided on the basis of time worked
at agreed contractual rates and as direct expenses are
incurred.
Revenue from fixed price, long-term customer specific contracts
is recognised over time following assessment of the stage of
completion of each assignment at the period end date compared to
the total estimated service to be provided over the entire contract
where the outcome can be estimated reliably. If a contract outcome
cannot be estimated reliably, revenues are recognised equal to
costs incurred, to the extent that costs are expected to be
recovered. An expected loss on a contract is recognised immediately
in the consolidated income statement.
Timing of payment
Maintenance and support income and subscription income is
invoiced annually in advance at the commencement of the contract
period. Other revenue is invoiced based on the contract terms in
accordance with performance obligations. Amounts recoverable in
contracts (contract assets) relate to our conditional right to
consideration for completed performance obligations under the
contract prior to invoicing. Deferred income (contract liabilities)
relates to amounts invoiced in advance of services performed under
the contract.
Employee benefits
a. Retirement benefits
The Group operates various defined contribution pension
arrangements for its employees.
For defined contribution pension arrangements, the amount
charged to the consolidated income statement represents the
contributions payable in the period. Differences between
contributions payable in the period and contributions actually paid
are shown as either accruals or prepayments in the consolidated
statement of financial position.
b. Share-based payments
The Group issues equity-settled share-based payments to certain
employees. Vesting conditions are continuing employment and can
include, for senior employees, a diluted EPS performance target or
share price target. Equity-settled share-based payments are
measured at fair value at the date of grant using an appropriate
pricing model. The fair value is expensed on a straight-line basis
over the vesting period, together with a corresponding increase in
equity in the share-based payment reserve. Non market vesting
conditions include assumptions about the number of options expected
to vest.
Non-recurring items
Non-recurring items are disclosed separately in the financial
statements where it is necessary to do so to provide further
understanding of the financial performance of the Group. They are
material one-off items of income or expense that have been shown
separately due to the significance of their nature or amount and do
not reflect the ongoing cost base or revenue-generating ability of
the Group.
Interest income and expense
Interest income and expense is included in the consolidated
income statement on a time basis, using the effective interest
method by reference to the principal outstanding.
Tax
The tax charge or credit comprises current tax payable and
deferred tax:
a. Current tax
The current tax charge represents an estimate of the amounts
payable or receivable to or from tax authorities in respect of the
Group's taxable profits and is based on an interpretation of
existing tax laws. Taxable profit differs from profit before tax as
reported in the consolidated income statement because it excludes
certain items of income and expense that are taxable or deductible
in other years or are never taxable or deductible. Taxation
received is recognised only when it is probable that the Group is
entitled to the asset.
b. Deferred tax
Deferred income taxes are calculated using the liability method
on temporary differences. This involves the comparison of the
carrying amounts of assets and liabilities in the consolidated
financial statements with their respective tax bases. In addition,
tax losses available to be carried forward as well as other income
tax credits to the Group are assessed for recognition as deferred
tax assets. However, deferred tax is not provided on the initial
recognition of goodwill, nor on the initial recognition of an asset
or liability, unless the related transaction is a business
combination or affects tax or accounting profit.
Deferred tax liabilities are always provided in full. Deferred
tax assets are recognised to the extent that it is probable that
the underlying deductible temporary differences will be able to be
offset against future taxable income. Deferred tax assets and
liabilities are calculated, without discounting, at tax rates that
are expected to apply to their respective period of realisation,
provided they are enacted or substantively enacted at the reporting
date. Deferred tax is recognised as a component of tax expense in
the consolidated income statement, except where it relates to items
charged or credited directly to other comprehensive income or
equity when it is recognised in other comprehensive income or
equity.
Business combinations
The Group applies the acquisition method to account for business
combinations. The consideration transferred for the acquisition of
a subsidiary is the fair values of the assets transferred, the
liabilities incurred to the former owners of the acquiree and the
equity interests issued by the Group. The consideration transferred
includes the fair value of any asset or liability resulting from a
contingent consideration arrangement. Identifiable assets acquired
and liabilities and contingent liabilities assumed in a business
combination are measured initially at their provisional fair values
at the acquisition date. Fair values are reassessed during the
measurement period and updated if required. The Group recognises
any non-controlling interest in the acquiree on an
acquisition-by-acquisition basis, either at fair value or at the
non-controlling interest's proportionate share of the recognised
amounts of the acquiree's identifiable net assets.
If the business combination is achieved in stages, the
acquisition date fair value of the acquirer's previously held
equity interest in the acquiree is remeasured to fair value at the
acquisition date through profit or loss.
Any contingent consideration to be transferred by the Group is
recognised at fair value at the acquisition date. Subsequent
changes to the fair value of the contingent consideration that is
deemed to be an asset or liability is recognised in accordance with
IFRS 9 in the consolidated income statement. Contingent
consideration that is classified as equity is not remeasured and
its subsequent settlement is accounted for within equity.
Goodwill
Goodwill is initially measured as the excess of the aggregate of
the consideration transferred and the fair value of non-controlling
interest over the net identifiable assets acquired and liabilities
assumed. If this consideration is lower than the fair value of the
net assets of the subsidiary acquired, the difference is recognised
in profit or loss.
Goodwill arising on an acquisition of a business is the
difference between the fair value of the consideration paid and the
net fair value of the assets and liabilities acquired. Goodwill is
carried at cost less accumulated impairment losses.
Research and development
Expenditure on research activities is recognised as an expense
in the period in which it is incurred.
Development activities involve a plan or design for the
production of new or substantially improved products and processes.
Development expenditure is only capitalised if all of the following
conditions are met:
-- completion of the intangible asset is technically feasible so
that it will be available for use or sale;
-- the Group intends to complete the intangible asset and use or sell it;
-- the Group has the ability to use or sell the intangible asset;
-- the intangible asset will generate probable future economic
benefits. Among other things, this requires that there is a market
for the output from the intangible asset or for the intangible
asset itself, or, if it is to be used internally, the asset will be
used in generating such benefits;
-- there are adequate technical, financial and other resources
to complete the development and to use or sell the intangible
asset; and
-- the expenditure attributable to the intangible asset during
its development can be measured reliably.
Internally generated intangible assets, consisting mainly of
direct labour costs, are amortised on a straight-line basis over
their useful economic lives. Amortisation is shown within
administrative expenses in the consolidated income statement. The
estimated useful lives of current development projects are three
years. Upon completion the assets are subject to impairment testing
if impairment triggers are identified, based on expected future
sales.
Where no internally generated intangible asset can be
recognised, development expenditure is recognised as an expense in
the period in which it is incurred.
Other intangible assets
Intangible assets that are purchased separately, such as
software licences that do not form an integral part of related
hardware, are capitalised at cost and amortised on a straight-line
basis over their useful economic life which is typically 3
years.
Customer relationships acquired following a business combination
are amortised on a straight-line basis over their useful economic
life which is 10 years.
Brands acquired following a business combination are amortised
on a straight-line basis over their useful economic life which is 2
years.
Acquired software recognised following a business combination is
amortised on a straight-line basis over their useful economic life
which is 3 years.
Property, plant and equipment
Property, plant and equipment are stated at cost less
accumulated depreciation and any recognised impairment loss.
Depreciation is charged to the consolidated income statement so as
to write off the cost or valuation less estimated residual values
over their expected useful lives on a straight-line basis over the
following periods:
-- Fixtures and fittings: three to ten years, or period of the lease if shorter
-- Computer equipment: three years
Residual values and useful economic lives are assessed annually.
The gain or loss on the disposal or retirement of an asset is
determined as the difference between the sales proceeds and the
carrying amount of the asset and is recognised in operating
expenses.
Leased assets
The Group as a lessee
For any new contracts entered into, the Group considers whether
a contract is, or contains, a lease. A lease is defined as 'a
contract, or part of a contract, that conveys the right to use an
asset (the underlying asset) for a period of time in exchange for
consideration'. To apply this definition the Group assesses whether
the contract meets three key evaluations which are whether:
-- the contract contains an identified asset, which is either
explicitly identified in the contract or implicitly specified by
being identified at the time the asset is made available to the
Group
-- the Group has the right to obtain substantially all of the
economic benefits from use of the identified asset throughout the
period of use, considering its rights within the defined scope of
the contract
-- the Group has the right to direct the use of the identified
asset throughout the period of use. The Group assesses whether it
has the right to direct 'how and for what purpose' the asset is
used throughout the period of use
Measurement and recognition of leases as a lessee
At lease commencement date, the Group recognises a right-of-use
asset and a lease liability on the consolidated statement of
financial position. The right-of-use asset is measured at cost,
which is made up of the initial measurement of the lease liability,
any initial direct costs incurred by the Group, an estimate of any
costs to dismantle and remove the asset at the end of the lease,
and any lease payments made in advance of the lease commencement
date (net of any incentives received).
The Group depreciates the right-of-use assets on a straight-line
basis from the lease commencement date to the earlier of the end of
the useful life of the right-of-use asset or the end of the lease
term. The Group also assesses the right-of-use asset for impairment
when such indicators exist.
At the commencement date, the Group measures the lease liability
at the present value of the lease payments unpaid at that date,
discounted using the interest rate implicit in the lease if that
rate is readily available or the Group's incremental borrowing
rate.
Lease payments included in the measurement of the lease
liability are made up of fixed payments (including in substance
fixed), variable payments based on an index or rate, amounts
expected to be payable under a residual value guarantee and
payments arising from options reasonably certain to be
exercised.
Subsequent to initial measurement, the liability will be reduced
for payments made and increased for interest. It is remeasured to
reflect any reassessment or modification, or if there are changes
in in-substance fixed payments.
When the lease liability is remeasured, the corresponding
adjustment is reflected in the right-of-use asset, or profit and
loss if the right-of-use asset is already reduced to zero.
The Group has elected to account for short-term leases and
leases of low-value assets using the practical expedients. Instead
of recognising a right-of-use asset and lease liability, the
payments in relation to these are recognised as an expense in
profit or loss on a straight-line basis over the lease term.
On the consolidated statement of financial position,
right-of-use assets have been presented as non-current assets and
lease liabilities have been included in trade and other
payables.
Impairment of non-financial assets
Assets that have an indefinite useful life - for example,
goodwill - are not subject to amortisation and are tested at least
annually for impairment and whenever there is an indication that
the asset may be impaired. Assets that are subject to amortisation
are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be
recoverable.
An impairment loss is recognised for the amount by which the
asset's carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset's fair value less
costs to sell and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there
are separately identifiable cash flows (cash-generating units).
Impairment losses are recognised immediately in profit or loss.
Non-financial assets other than goodwill that suffered an
impairment are reviewed for possible reversal of the impairment at
each reporting date. Where an impairment loss is reversed, it is
reversed to the extent that the increased carrying amount does not
exceed the carrying amount that would have been determined had no
impairment loss been recognised in prior years. A reversal of an
impairment loss is recognised immediately in profit or loss.
Financial instruments
Recognition and derecognition
Financial assets and financial liabilities are recognised when
the Group becomes a party to the contractual provisions of the
financial instrument.
Financial assets are derecognised when the contractual rights to
the cash flows from the financial asset expire, or when the
financial asset and substantially all the risks and rewards are
transferred. A financial liability is derecognised when it is
extinguished, discharged, cancelled or expires.
Classification and initial measurement of financial assets
Except for those trade receivables that do not contain a
significant financing component and are measured at the transaction
price in accordance with IFRS 15, all financial assets are
initially measured at fair value adjusted for transaction costs
(where applicable).
Financial assets, other than those designated and effective as
hedging instruments, are classified into the following
categories:
-- amortised cost;
-- fair value through profit or loss (FVTPL); and
-- fair value through other comprehensive income (FVOCI).
The classification is determined by both:
-- the entity's business model for managing the financial asset;
and
-- the contractual cash flow characteristics of the financial
asset.
All income and expenses relating to financial assets that are
recognised in profit or loss are presented within finance costs,
finance income or other financial items, except for impairment of
trade receivables which is presented within other expenses.
Subsequent measurement of financial assets
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets
meet the following conditions (and are not designated as
FVTPL):
-- they are held within a business model whose objective is to
hold the financial assets and collect its contractual cash flows;
and
-- the contractual terms of the financial assets give rise to
cash flows that are solely payments of principal and interest on
the principal amount outstanding.
After initial recognition, these are measured at amortised cost
using the effective interest method. Discounting is omitted where
the effect of discounting is immaterial. The Group's cash and cash
equivalents, trade and most other receivables fall into this
category of financial instruments.
Financial assets at fair value through profit or loss
(FVTPL)
Financial assets that are held within a different business model
other than 'hold to collect' or 'hold to collect and sell' are
categorised at fair value through profit and loss. Further,
irrespective of business model, financial assets whose contractual
cash flows are not solely payments of principal and interest are
accounted for at FVTPL.
Assets in this category are measured at fair value with gains or
losses recognised in profit or loss. The fair values of financial
assets in this category are determined by reference to active
market transactions or using a valuation technique where no active
market exists.
Investments
As part of the sale transaction of the RTLS business unit on 31
December 2018, the Group holds a rollover equity investment in
Abyssinian Topco Limited (registered number: 11650137) which
following the transaction, is the parent company of the RTLS
SmartSpace business unit.
The Group has made the irrevocable election to account for the
investment in Abyssinian Topco Limited at fair value through other
comprehensive income (FVOCI). In the current financial year, the
fair value was determined in line with the requirements of IFRS 9,
which does not allow for measurement at cost.
Trade receivables
Trade receivables are amounts due from customers for products
sold or services performed in the ordinary course of business. If
collection is expected in one year or less, they are classified as
current assets. If not, they are presented as non-current
assets.
The Group makes use of a simplified approach in accounting for
trade and other receivables as well as contract assets and records
the loss allowance as lifetime expected credit losses. These are
the expected shortfalls in contractual cash flows, considering the
potential for default at any point during the life of the financial
instrument. In calculating, the Group uses its historical
experience, external indicators and forward-looking information to
calculate the expected credit losses using a provision matrix.
The Group assess impairment of trade receivables on a collective
basis as they possess shared credit risk characteristics they have
been grouped based on the days past due.
Classification and measurement of financial liabilities
The Group's financial liabilities include borrowings, trade and
other payables and derivative financial instruments.
Financial liabilities are initially measured at fair value, and,
where applicable, adjusted for transaction costs unless the Group
designated a financial liability at fair value through profit or
loss.
Subsequently, financial liabilities are measured at amortised
cost using the effective interest method except for derivatives and
financial liabilities designated at FVTPL, which are carried
subsequently at fair value with gains or losses recognised in the
profit or loss (other than derivative financial instruments that
are designated and effective as hedging instruments).
Trade payables
Trade payables are obligations to pay for goods or services that
have been acquired in the ordinary course of business from
suppliers. Accounts payable are classified as current liabilities
if payment is due within one year or less. If not, they are
presented as non-current liabilities.
Trade payables are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method.
Cash and cash equivalents
In the consolidated statement of cash flows, cash and cash
equivalents includes cash in hand, deposits held at call with banks
and other short-term highly liquid investments with original
maturities of three months or less.
Borrowings
Borrowings are recognised initially at fair value, net of
transaction costs incurred. Borrowings are subsequently carried at
amortised cost; any difference between the proceeds (net of
transaction costs) and the redemption value is recognised in the
consolidated income statement over the period of the borrowings
using the effective interest method.
Share capital and share premium
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds. The
nominal value of shares issued is classified as share capital and
the amounts paid over the nominal value in respect of share issues,
net of related costs, is classified as share premium.
Share-based payment reserve
The share-based payment reserve relates to a cumulative charge
made in respect of share options granted by the Company to the
Group's employees under its employee share option plans.
Capital redemption reserve
The capital redemption reserve relates to the repurchase and
subsequent cancellation of issued ordinary share capital.
Merger relief reserve
The merger relief reserve relates to the issue of shares as
consideration for acquisitions of direct or indirect 100% owned
subsidiaries within the Group.
Translation reserve
Exchange differences relating to the translation of the results
and net assets of the Group's foreign operations from their
functional currencies to the Group's presentation currency of GBP,
are recognised directly in other comprehensive income and
accumulated in the translation reserve.
Retained earnings
Retained earnings include all current and prior period retained
profits/losses.
4 Critical accounting judgements and key sources of estimation
and uncertainty
When preparing the financial statements, management makes a
number of judgements, estimates and assumptions about the
recognition and measurement of assets, liabilities, income and
expenses.
Significant management judgements
The following are the judgements made by management in applying
the accounting policies of the Group that have the most significant
effect on the financial statements.
Capitalisation of development costs
The point at which development costs meet the criteria for
capitalisation is critically dependent on management's judgement of
the point at which technical and commercial feasibility is
demonstrable. The carrying amount of capitalised development costs
at 31 December 2020 is GBP1.8 million (2019: GBP1.5 million). After
capitalisation, management monitors whether the recognition
requirements continue to be met and whether there are any
indicators that capitalised costs may be impaired.
Revenue recognition
Significant management judgement is applied in determining the
distinct performance obligations included within contracts
involving multiple deliverables.
Deferred tax
A deferred tax asset is recognised where the Group considers it
probable that future tax profits will be available against which
the tax credit will be utilised in the future. This specifically
applies to tax losses and to outstanding vested share options at
the statement of financial position date. In estimating the amount
of the deferred tax asset that should be recognised, the Directors
make judgements based on current budgets and forecasts about the
amount of future taxable profits and the timings of when these will
be realised. No deferred tax asset is currently recognised.
Business combinations
On 21 December 2020 the Group acquired OSPInsight International
Inc. ("OSPI") for a total consideration of up to $8.75 million. In
accounting for business combinations the Directors have exercised
judgement in identifying the intangibles acquired under the
business combination.
Estimating uncertainty
The Group makes estimates and assumptions concerning the future.
The resulting accounting estimates will, by definition, seldom
equal the related actual results. The estimates and assumptions
that have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next
financial year are addressed below.
Amortisation and impairment of development costs
Capitalised development costs are amortised over a three year
period which is management's estimate of the useful lives of
current development projects. In reaching this conclusion,
management have made assumptions in respect of future customer
requirements and developments within the industry. These estimates
have a high level of uncertainty and are matters outside of
management's control.
The Group reviews capitalised development costs for impairment
annually in accordance with the accounting policy stated in note 3.
In performing the impairment review, management are required to
make assumptions of the future cash flows generated from the
software products. This includes consideration of both the current
business pipeline and estimations beyond the existing pipeline.
Estimation uncertainty relates to assumptions about future
operating results and the determination of a suitable discount
rate.
Revenue recognition
For each identified significant performance obligation
management are required to determine which obligations meet the
criteria to recognise revenue over time. As revenue from fixed
price services agreements is recognised over time, the amount of
revenue recognised in a reporting period depends on the extent to
which the performance obligation has been satisfied. This requires
an estimate of the time and value to deliver the services to be
provided, based on historical experience with similar contracts. In
a similar way, recognising revenue requires the estimated number of
hours required to complete the promised work.
Business combinations
On 21 December 2020 the Group acquired OSPInsight International
Inc. ("OSPI") for a total consideration of up to $8.75 million. In
accounting for business combinations the Directors have determined
the valuation of intangibles through estimates about future
revenues, costs and cash flows of the Group. Additionally, the
Directors have estimated the fair value of contingent consideration
associated with the OSPI acquisition.
5 Business information
5.1 Operating segments
Management provides information reported to the Chief Operating
Decision Maker (CODM) for the purpose of assessing performance and
allocating resources. The CODM is the Chief Executive Officer.
The business delivers software solutions that integrate data
from any source - geographic, real-time asset, GPS, location,
corporate and external cloud-based sources - into a live geospatial
common operating picture, empowering all users in the customer's
organisation to access, input and analyse operational intelligence
to proactively manage their networks, respond quickly to emergency
events and effectively manage day-to-day operations. These
geospatial operations are reported to the CODM as a single business
unit.
5.2 Revenue by type
The following table presents the different revenue streams of
the IQGeo Group.
Revenue by stream 2020 % of total 2019 % of total Year on
GBP'000 revenue GBP'000 revenue year growth
--------- ----------- --------- -----------
Subscription 1,860 20% 381 5% 388%
Maintenance and support 1,335 15% 1,251 16% 7%
--------------------------------- --------- ----------- --------- ----------- -------------
Recurring IQGeo product revenue 3,195 35% 1,632 21% 96%
--------------------------------- --------- ----------- --------- ----------- -------------
Software 299 3% 1,589 20% (81)%
Services 3,846 42% 2,328 30% 65%
--------------------------------- --------- ----------- --------- ----------- -------------
Non-recurring IQGeo product
revenue 4,145 45% 3,917 50% 6%
Total IQGeo product revenue 7,340 80% 5,549 71% 32%
--------- ----------- --------- -----------
Geospatial services from
third party products 1,815 20% 2,257 29% (20)%
--------------------------------- --------- ----------- --------- ----------- -------------
Total revenue 9,155 100% 7,806 100% 17%
--------------------------------- --------- ----------- --------- ----------- -------------
5.3 Geographical areas of continuing operations
The Board and management team also review the revenues on a
geographical basis, based around the regions where the Group has
its significant subsidiaries or markets.
The Group's revenue from external customers in the Group's
domicile, the UK, and its major worldwide markets have been
identified on the basis of the customers' geographical location.
Non-current assets are allocated based on their physical
location.
The following table represents the Group's continuing
operational revenue and non-current assets by geographical
region:
Revenue Non-current assets
------------------ --------------------
2020 2019 2020 2019
GBP'000 GBP'000 GBP'000 GBP'000
-------------- -------- -------- --------- ---------
UK 316 95 1,927 3,630
Europe 146 169 - 1
USA 5,990 5,897 8,705 121
Canada 1,233 1,164 2 2
Japan 1,437 461 2 1
Rest of World 33 20 - -
-------------- -------- -------- --------- ---------
9,155 7,806 10,636 3,755
-------------- -------- -------- --------- ---------
The main country of operation of the Group is the United States
of America as this is where the majority of revenue is
generated.
2020 revenues include GBP1.1 million from income deferred at the
beginning of the period (2019: GBP0.9 million) relating to
performance obligations satisfied overtime.
Contract liabilities arising as a result of the OSPI acquisition
were GBP1.4 million.
5.4 Information about major customers of the continuing
operations
During 2020, the Group had one customer who generated revenues
of greater than 10% of total Geospatial revenue. GBP1.6 million was
generated from one US customer.
During 2019, the Group had one customer who generated revenues
of greater than 10% of total Geospatial revenue. GBP1.8 million was
generated from one US customer.
6 Acquisitions
On 21 December 2020 the Group acquired 100% of the equity
instruments of OSPInsight International Inc. ("OSPI"), a business
based in Utah, USA, thereby obtaining control.
Details of the business combination are as follows:
GBP'000
Fair value of the consideration transferred
Amount settled in cash 3,998
Amount settled in shares 757
Fair value of deferred consideration 746
Fair value of contingent consideration 746
------------------------------------------------ -------
Total 6,247
------------------------------------------------ -------
Recognised amounts of identifiable net assets
Right-of-use assets 71
Intangible assets 2,656
------------------------------------------------ -------
Total non-current assets 2,727
Cash and cash equivalents 8
Trade and other receivables 702
------------------------------------------------ -------
Total current assets 710
------------------------------------------------ -------
Lease obligations (34)
Total non-current liabilities (34)
------------------------------------------------ -------
Trade and other payables (1,573)
Lease obligations (37)
------------------------------------------------ -------
Total current liabilities (1,610)
------------------------------------------------ -------
Identifiable net assets 1,793
------------------------------------------------ -------
Goodwill on acquisition 4,454
------------------------------------------------ -------
Consideration settled in cash 3,998
Cash acquired (8)
------------------------------------------------ -------
Net cash flow from acquisition 3,990
------------------------------------------------ -------
Consideration transferred
The acquisition of OSPI was settled through cash payment of
GBP4.0 million and through issue of 923,294 ordinary 2p shares of
IQGeo Group plc, to the sellers of OSPI.
The deferred consideration will be satisfied by cash payment of
$538,000 with the balance settled through issue of shares in IQGeo
Group plc with the deferred consideration fully settled on 21
December 2021.
The purchase agreement included an additional consideration of
up to $1.1 million subject to achievement of defined levels of
recurring revenue during the year ended 31 December 2021.
Management anticipate this earn out will be settled in full with
amounts payable in January 2022.
Identifiable net assets
The fair value of the trade and other receivables acquired as
part of the business combination amounted to GBP702,000, with a
gross contractual amount of GBP723,000. As of the acquisition date,
the Group's best estimate of the contractual cash flow not expected
to be collected amounted to GBP21,000.
OSPI's contribution to the Group results
OSPI contributed GBP60,000 of revenue and GBP1,000 of profit to
the consolidated income during the period 21 December 2020 to 31
December 2020.
If OSPI had been acquired on 1 Jan 2020 the Group revenues for
the year would increase by GBP2.9 million and the loss for the year
would reduce by GBP0.1 million.
7 Discontinued operations
On 31 December 2018, the Group disposed of its RTLS SmartSpace
business unit for a consideration of up to GBP35.0 million with
GBP30.0 million paid in cash on completion (subject to adjustments
for net debt and net working capital) in addition to a GBP2.0
million rollover investment. The conditions required for GBP3.0
million of contingent consideration to become payable were not
met.
The following information is attributable to the RTLS SmartSpace
business unit:
7.1 Consolidated income statement for the year ended 31 December
2020
2020 2019
GBP'000 GBP'000
------------------------------------------------------ -------- --------
Operating expenses - 161
------------------------------------------------------- -------- --------
Profit from discontinued operations prior to gain
on disposal - 161
------------------------------------------------------- -------- --------
Gain on disposal of the RTLS SmartSpace business unit - 242
------------------------------------------------------- -------- --------
Profit/(loss) from discontinued operations - 403
------------------------------------------------------- -------- --------
The gain on disposal of the RTLS SmartSpace business unit
discontinued operations is summarised as follows;
2020 2019
GBP'000 GBP'000
---------------------------------------------------------- -------- --------
Consideration received or receivable:
Amounts receivable on finalisation of completion accounts - 214
---------------------------------------------------------- -------- --------
Total disposal consideration - 214
Transaction costs incurred - 38
Accrued bonuses in respect of the transaction completion - (10)
---------------------------------------------------------- -------- --------
Gain on disposal of the RTLS SmartSpace business unit - 242
---------------------------------------------------------- -------- --------
7.2 Cash flows from discontinued operations
2020 2019
GBP'000 GBP'000
------------------------------------------------------ -------- --------
Cash received on sale of the RTLS SmartSpace business
unit - 1,060
Disposal costs in relation to the RTLS SmartSpace
business unit - (1,839)
Total net cash inflow/(outflow) from investing
activities: - (779)
------------------------------------------------------ -------- --------
8 Employee information
8.1 Employee numbers
The number of people as at 31 December and the average monthly
number of people employed during the year, including Executive
Directors, was:
Actual number of people Average monthly number
as at 31 December of people
------------------------- ------------------------
2020 2019 2020 2019
By activity Number Number Number Number
----------------------- ------------ ----------- ----------- -----------
Technical consultants 36 21 24 20
Sales & marketing 29 23 19 24
Research & development 20 16 15 13
Administration 11 11 10 11
----------------------- ------------ ----------- ----------- -----------
96 71 68 68
----------------------- ------------ ----------- ----------- -----------
2020 2019 2020 2019
By geography Number Number Number Number
--------------- ------- ------- ------- -------
United Kingdom 18 17 16 17
Europe 2 4 3 4
North America 72 47 46 44
Asia 4 3 3 3
--------------- ------- ------- ------- -------
96 71 68 68
--------------- ------- ------- ------- -------
8.2 Employee benefits
The aggregate employee benefit expense, including Executive
Directors, comprised:
2020 2019
Notes GBP'000 GBP'000
-------------------------------------- ------ -------- --------
Wages and salaries 8,169 7,872
Social security costs 638 523
Contributions to defined contribution
pension arrangements 340 355
Share-based payments 130 102
---------------------------------------------- -------- --------
Total aggregate employee benefits 9,277 8,852
---------------------------------------------- -------- --------
9 Finance income and costs
2020 2019
GBP'000 GBP'000
----------------------------------------------- -------- --------
Interest income from cash and cash equivalents 7 72
----------------------------------------------- -------- --------
Finance income 7 72
----------------------------------------------- -------- --------
Bank loan interest (8) -
Interest expense for lease arrangements (97) (10)
Finance costs (105) (10)
----------------------------------------------- -------- --------
Net finance costs (98) 62
----------------------------------------------- -------- --------
10 Loss before tax: analysis of expenses by nature
10.1 Expenses by nature of continuing operations
The following items have been charged / (credited) to the
consolidated income statement in arriving at a gain before tax:
2020 2019
Notes GBP'000 GBP'000
-------------------------------------- ----- -------- --------
Amortisation of other intangible
assets 13 1,002 815
Depreciation of owned property,
plant and equipment 14 68 57
Depreciation of right-of-use assets 15 301 228
Lease rental charges - land and
buildings 21 242 221
Research & development costs expensed 320 238
Net foreign currency gains (14) (38)
Unrealised foreign exchange losses
on intercompany trading balances 43 110
Non-recurring items 10.2 289 136
-------------------------------------- ----- -------- --------
10.2 Non-recurring items
2020 2019
GBP'000 GBP'000
-------------------------- -------- --------
Acquisition costs 289 -
Capital reduction costs - 136
Total non-recurring items 289 136
-------------------------- -------- --------
Acquisition costs
On 21 December 2020 the Group acquired OSPInsight International
Inc. Costs of acquisition have been expensed during the year.
Capital reduction
On 2 August 2019, the Company announced a proposed tender offer
to repurchase up to a maximum of 28,260,869 of the Company's
Ordinary Shares at a price of 46 pence per Ordinary Share.
Following approval of the tender offer by a General Meeting of
shareholders on 22 August 2019, the tender offer completed on 30
August 2019, resulting in the share capital reducing by 23,803,690
and GBP10,950,000 of surplus funds being returned to shareholders
in September 2019.
10.3 Auditors' remuneration
During the year, the Group (including its overseas subsidiaries)
obtained the following services from the Company's auditor and its
associates:
2020 2019
GBP'000 GBP'000
----------------------------------------------------- -------- --------
Fees payable to the Group's auditor for the
audit of:
Parent Company and consolidated financial statements 85 70
Financial statements of subsidiaries, pursuant
to legislation 12 10
Total audit fees 97 80
----------------------------------------------------- -------- --------
Fees payable to the Group's auditor for other
services:
Tax advisory 43 17
Audit related assurance services 16 21
Other services 6 -
Total non-audit fees 65 38
----------------------------------------------------- -------- --------
Total auditors' remuneration 162 118
----------------------------------------------------- -------- --------
The auditor of IQGeo Group plc is Grant Thornton UK LLP.
11 Income tax
11.1 Income tax recognised in the consolidated income
statement
2020 2019
GBP'000 GBP'000
-------------------------------------------------- -------- --------
Current tax
Corporation tax (399) -
Adjustment in respect of prior year 18 (118)
Foreign tax - -
-------------------------------------------------- -------- --------
Total current tax credit (381) (118)
--------------------------------------------------- -------- --------
Deferred tax - continuing operations
Origination and reversal of temporary differences 66 54
--------------------------------------------------- -------- --------
Total deferred tax charge 66 54
--------------------------------------------------- -------- --------
Total income tax credit for the year (315) (64)
--------------------------------------------------- -------- --------
The tax credit differs from the standard rate of corporation tax
in the UK for the year of 19% (2019: 19%) for the following
reasons:
2020 2019
GBP'000 GBP'000
----------------------------------------- -------- --------
Loss before tax - continuing operations (4,426) (6,234)
Gain before tax from discontinued
operations - 403
----------------------------------------- -------- --------
Total gain before tax (4,426) (5,831)
----------------------------------------- -------- --------
Loss before tax multiplied by the
standard rate of corporation tax in
the UK of 19.0% (2019: 19%) (841) (1,108)
Tax effects of:
Expenses not deductible for tax purposes 318 16
Additional overseas tax deduction (162) (77)
Utilisation of previously unrecognised
tax losses - (24)
Unrecognised deferred tax movements 806 1,371
Tax unprovided/(overprovided) in prior
years 18 (118)
Research & development tax credits
- prior years (399) -
Difference on tax treatment of share
options - unrecognised 25 19
Differential on overseas tax rates (80) (143)
----------------------------------------- -------- --------
Total income tax debit/(credit) (315) (64)
----------------------------------------- -------- --------
11.2 Factors that may affect future tax charges
The Group has tax losses of GBP19.3 million (2019: GBP17.6
million) that are available for offset against future taxable
profits of those subsidiary companies in which the tax losses
arose. Deferred tax assets have not been recognised in respect of
these losses as they may not be used to offset taxable profits
elsewhere in the Group, and they have arisen in subsidiaries whose
future taxable profits are uncertain. No deferred tax has been
recognised on the unremitted earnings of overseas subsidiaries,
because the earnings are continually reinvested by the Group and no
tax is expected to be payable on them in the foreseeable
future.
The deferred tax balances have been measured at 19%, based on
the current UK tax rate.
11.3 Deferred tax
The movement in deferred tax in the consolidated statement of
financial position during the year is as follows:
Deferred income
tax assets Deferred income tax liabilities
------------------- ---------------------------------
2020 2019 2020 2019
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- -------- --------- ---------------- ---------------
At 1 January - - (285) (231)
Deferred tax charged to the
income statement - - (66) (54)
At 31 December - - (351) (285)
----------------------- ---------------- --------- ---------------- ---------------
The components of deferred tax included in the consolidated
statement of financial position are as follows:
2020 2019
GBP'000 GBP'000
-------------------------------------- -------- --------
Development costs capitalised (351) (285)
Total deferred income tax liabilities (351) (285)
-------------------------------------- -------- --------
Deferred tax assets have not been recognised in respect of the
following items because it is not probable that future taxable
profits will be available against which the Group can utilise the
benefits:
2020 2019
GBP'000 GBP'000
--------------------------------------------------- -------- --------
Tax losses carried forward 3,766 3,396
Equity-settled share options temporary differences 18 8
--------------------------------------------------- -------- --------
Total unrecognised deferred tax assets 3,784 3,404
--------------------------------------------------- -------- --------
12 Earnings per share (EPS)
2020 2019
----------------------------------------------- ------- -------
Earnings attributable to Ordinary Shareholders
Loss from continuing operations (4,111) (6,170)
----------------------------------------------- ------- -------
Gain from discontinued operations - 403
----------------------------------------------- ------- -------
(Loss)/gain from continuing and discontinued
operations (4,111) (5,767)
----------------------------------------------- ------- -------
Number of shares
Weighted average number of ordinary shares for
the purposes of basic EPS ('000) 50,195 65,977
Effect of dilutive potential ordinary shares:
- Share options ('000) 1,002 67
----------------------------------------------- ------- -------
Weighted average number of ordinary shares for
the purposes of diluted EPS ('000) 51,197 66,044
----------------------------------------------- ------- -------
Continuing operations EPS
Basic and diluted EPS (pence) (8.2) (9.4)
Discontinued operations EPS
Basic and diluted EPS (pence) - 0.6
Continuing and discontinued operations EPS
Basic and diluted EPS (pence) (8.2) (8.7)
----------------------------------------------- ------- -------
Basic earnings per share is calculated by dividing profit/(loss)
for the period attributable to ordinary shareholders of the Company
by the weighted average number of ordinary shares outstanding
during the period. For diluted earnings per share, the weighted
average number of shares is adjusted to allow for the effects of
all dilutive share options and warrants outstanding at the end of
the year. Options have no dilutive effect in loss-making years and
are therefore not classified as dilutive for Discontinued and Total
EPS since their conversion to ordinary shares does not decrease
earnings per share or increase loss per share from continuing
operations.
The Group also presents an adjusted diluted earnings per share
figure which excludes share-based payments charge, unrealised
foreign exchange gains/(losses) on intercompany trading balances
and non-recurring items from the measurement of loss for the
period.
Continuing operations Notes 2020 2019
--------------------------------------------- ---------- ----------- -----------
Continued earnings for the purposes of
diluted EPS being net loss attributable
to equity holders of the parent company
(GBP'000) (4,111) (6,170)
Adjustments:
Reversal of share-based payments charge
(GBP'000) 130 102
Unrealised foreign exchange gains/(losses)
on intercompany trading balances (GBP'000) 43 110
Reversal of non-recurring items (GBP'000) 10 289 136
--------------------------------------------------- ---- ----------- -----------
Net adjustments (GBP'000) 462 348
--------------------------------------------------- ---- ----------- -----------
Adjusted earnings (GBP'000) (3,649) (5,822)
--------------------------------------------------- ---- ----------- -----------
Adjusted diluted EPS from continuing operations
(pence) (7.3) (8.8)
--------------------------------------------------- ---- ----------- -----------
The adjusted EPS information is considered to provide a fairer
representation of the Group's trading performance. Options have no
dilutive effect in loss-making years.
13 Intangible assets
Capitalised
Acquired Acquired product
customer software Acquired development
Goodwill relationships products brands costs Software Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- -------- -------------- --------- ---------- ------------ -------- --------
Cost
At 1 January 2019 2,970 - - - 6,447 22 9,439
Additions - - - - 1,074 102 1,176
At 31 December 2019 2,970 - - - 7,521 124 10,615
Additions - - - - 1,305 2 1,307
Additions as a result
of acquisition 4,454 2,118 480 58 - - 7,110
Effect of movements in
exchange rates (51) (46) (10) (2) - - (109)
------------------------- -------- -------------- --------- ---------- ------------ -------- --------
At 31 December 2020 7,373 2,072 470 56 8,826 126 18,923
------------------------- -------- -------------- --------- ---------- ------------ -------- --------
Accumulated amortisation
At 1 January 2019 (2,970) - - - (5,234) - (8,204)
Charge for the year - - - - (788) (27) (815)
At 31 December 2019 (2,970) - - - (6,022) (27) (9,019)
------------------------- -------- -------------- --------- ---------- ------------ -------- --------
Charge for the year - - - - (961) (41) (1,002)
------------------------- -------- -------------- --------- ---------- ------------ -------- --------
At 31 December 2020 (2,970) - - - (6,983) (68) (10,021)
------------------------- -------- -------------- --------- ---------- ------------ -------- --------
Net book amount
At 31 December 2020 4,403 2,072 470 56 1,843 58 8,902
At 31 December 2019 - - - - 1,499 97 1,596
------------------------- -------- -------------- --------- ---------- ------------ -------- --------
On 21 December 2020 the Group acquired 100% of the equity
instruments of OSPInsight International Inc. ("OSPI"), a business
based in Utah, USA, thereby obtaining control. Goodwill, acquired
customer relationships, acquired software products and acquired
brands have been recognised following the business combination. In
future periods Goodwill will be subject to an annual impairment
test and the acquired customer relationships, acquired software
products and acquired brands will be amortised over their useful
economic life.
Capitalised product development costs relate to expenditure that
can be applied to a plan or design for the production of new or
substantial improvements to software products. The Group is
loss-making and this is an indicator for potential impairment of
development costs. Management have completed impairment reviews
through estimating the future discounted cash flows to be generated
from these assets and concluded that no impairment is required as
the cash flows exceeded the carrying value of the asset.
The remaining average amortisation period for capitalised
product development costs is 2 years.
The software assets represent assets purchased from third
parties.
Goodwill, acquired customer relationships and acquired software
products relate to the OSPI acquisition (see note 6).
14 Property, plant and equipment
Fixtures and
fittings Computer equipment Total
GBP'000 GBP'000 GBP'000
-------------------------------- ------------ ------------------ --------
Cost
At 1 January 2019 206 176 382
-------------------------------- ------------ ------------------ --------
Effect of movements in exchange
rates (7) (4) (11)
Additions 7 49 56
Disposals (25) (35) (60)
-------------------------------- ------------ ------------------ --------
At 31 December 2019 181 186 367
-------------------------------- ------------ ------------------ --------
Effect of movements in exchange
rates (5) (4) (9)
Additions 147 18 165
Disposals (160) (7) (167)
-------------------------------- ------------ ------------------ --------
At 31 December 2020 163 193 356
-------------------------------- ------------ ------------------ --------
Accumulated depreciation
At 1 January 2019 (180) (118) (298)
-------------------------------- ------------ ------------------ --------
Effect of movements in exchange
rates 7 7 14
Charge for the year (16) (41) (57)
Disposals 25 35 60
-------------------------------- ------------ ------------------ --------
At 31 December 2019 (164) (117) (281)
-------------------------------- ------------ ------------------ --------
Effect of movements in exchange
rates (9) 2 (7)
Charge for the year (27) (41) (68)
Disposals 160 7 167
-------------------------------- ------------ ------------------ --------
At 31 December 2020 (40) (149) (189)
-------------------------------- ------------ ------------------ --------
Net book amount
-------------------------------- ------------ ------------------ --------
At 31 December 2020 123 44 167
-------------------------------- ------------ ------------------ --------
At 31 December 2019 17 69 86
-------------------------------- ------------ ------------------ --------
15 Right-of-use assets
Details of the Group's right-of-use assets and their carrying
amount are as follows:
2020 2019
GBP'000 GBP'000
-------------------------------------- -------- --------
Cost
At 1 January 492 502
Effect of movements in exchange rates (66) (10)
Additions 1,770 -
Lease related to acquisition 71 -
Disposal (492) -
--------------------------------------- -------- --------
Cost at 31 December 1,775 492
--------------------------------------- -------- --------
Depreciation
At 1 January (419) (198)
Effect of movements in exchange rates 20 7
Charge for the year (301) (228)
Disposal 492 -
--------------------------------------- -------- --------
Depreciation at 31 December (208) (419)
--------------------------------------- -------- --------
Net book amount at 31 December 1,567 73
--------------------------------------- -------- --------
16 Investments
At 31 December 2020, the Group holds a rollover investment in
Abyssinian Topco Limited as part of the consideration for the sale
of the RTLS SmartSpace business unit on 31 December 2018.
Abyssinian Topco Limited is a UK registered company (company number
11650137) and is the parent company of Ubisense Limited (company
number 04489603) which along with its subsidiary companies,
comprise the RTLS SmartSpace business unit.
GBP'000
------------------------------------------- ---------
Investment as 31 December 2019 2,000
Fair value adjustment 500
Reclassification as current asset held for
sale (2,500)
------------------------------------------- ---------
Investment as 31 December 2020 -
------------------------------------------- ---------
IQGeo Group plc hold 5.4% (2019: 5.3%) of the ordinary share
capital of Abyssinian Topco Limited.
On 29 December 2020, the Group entered into an agreement to sell
its shares in Abyssinian Topco Limited during January 2021 for a
consideration of GBP2.5 million. As at 31 December 2020, the
investment has been reclassified as a current asset held for sale
within the consolidated statement of financial position at a value
of GBP2.5 million.
17 Trade and other receivables
2020 2019
Notes GBP'000 GBP'000
-------------------------------------- ----- -------- --------
Trade receivables, gross 1,888 1,365
Allowances for expected credit losses 17.1 (31) (4)
-------------------------------------- ----- -------- --------
Trade receivables, net 17.2 1,857 1,361
Amounts recoverable on contracts 457 336
Other receivables 70 68
Prepayments 466 540
VAT and taxation receivable - 48
-------------------------------------- ----- -------- --------
Total trade and other receivables 2,850 2,353
-------------------------------------- ----- -------- --------
All amounts disclosed are short term. The carrying value of
trade receivables is considered a reasonable approximation of fair
value. Expected credit losses are not material.
The following disclosures are in respect of trade receivables
that are either impaired or past due. The individually impaired
receivables mainly relate to customers who are in unexpectedly
difficult economic situations and are assessed on a
customer-by-customer basis following detailed review of the
particular circumstances. To the extent they have not been
specifically provided against, the trade receivables are considered
to be of sound credit rating.
17.1 Movement in allowance for expected credit losses
2020 2019
GBP'000 GBP'000
-------------------------------- -------- --------
At 1 January (4) -
Amounts written off in the year - 35
Allowance acquired (21) -
Allowance released - -
Allowance made (6) (39)
-------------------------------- -------- --------
At 31 December (31) (4)
-------------------------------- -------- --------
17.2 Ageing of past due but not impaired receivables
2020 2019
GBP'000 GBP'000
------------------------------ -------- --------
Neither past due nor impaired 1,666 1,173
Past due but not impaired:
0 to 90 days overdue 191 188
More than 90 days overdue - -
------------------------------ -------- --------
Total 1,857 1,361
------------------------------- -------- --------
18 Cash and cash equivalents
2020 2019
GBP'000 GBP'000
-------------------------- -------- --------
Cash at bank and in hand 11,078 13,053
-------------------------- -------- --------
Cash and cash equivalents 11,078 13,053
-------------------------- -------- --------
Cash at bank earns interest at floating rates based on daily
bank overnight deposit rates. Short-term cash deposits earn
interest at fixed rates for the term of the deposit.
The composition of cash and cash equivalents by currency is as
follows:
2020 2019
By currency GBP'000 GBP'000
-------------------------- -------- --------
British Pound (GBP) 8,951 10,083
Euro (EUR) 23 373
US Dollar (USD) 745 1,936
Japanese Yen (JPY) 486 392
Canadian Dollar (CAD) 873 269
-------------------------- -------- --------
Cash and cash equivalents 11,078 13,053
-------------------------- -------- --------
19 Trade and other payables
2020 2019
Notes GBP'000 GBP'000
----------------------------------- ------- -------- --------
Deferred income 2,833 1,118
Trade payables 74 272
Trade accruals 1,741 1,428
Other taxation and social security 430 317
Deferred acquisition consideration 6 746 -
Other payables 4 106
----------------------------------- ------- -------- --------
Total trade and other payables 5,828 3,241
----------------------------------- ------- -------- --------
All amounts disclosed are short term. The carrying value of
trade payables is considered a reasonable approximation of fair
value.
20 Bank loans
In April 2020, IQGeo America Inc, a subsidiary of IQGeo Group
plc, applied for and received a loan of $819,000 under the USA
CARES Act's "Paycheck Protection Program" in order to support the
USA operations during the uncertainty caused by the impact of the
global Covid-19 pandemic. The loan was provided by HSBC Bank USA
and will accrue interest at a rate of 1.0% p.a. The loan is
repayable in 18 monthly instalments commencing in August 2021.
21 Lease obligation
The Group has measured lease liabilities at the present value of
the remaining lease payments, discounted using the Group's
incremental borrowing rate at the date of initial application.
Details of the Group's liability in respect of right-of-use
assets and their carrying amount are as follows:
2020 2019
GBP'000 GBP'000
-------------------------------------------- -------- --------
At 1 January 79 309
Effect of movements in exchange rates (76) 1
New leases entered into during the year 1,753 -
Lease related to acquisition 71 -
Finance costs incurred 97 7
Payments made during the year (78) (238)
At 31 December 1,846 79
-------------------------------------------- -------- --------
Presented as:
Lease liability payable within 1 year 208 79
Lease liability payable in more than 1 year 1,638 -
-------------------------------------------- -------- --------
At 31 December 1,846 79
-------------------------------------------- -------- --------
During the year the Group commenced a 7 year lease running to
February 2028 on new premises in Denver as the lease on the
existing premises in Denver ended on 30 April 2020.
The OSPI business acquired during the year operates from
premises in Utah which are leased until 31 January 2023.
The lease liability consists of GBP2.2 million of lease payments
after deduction of GBP0.4 million of future finance charges.
Leases as lessee
The Group maintains short-term office rental agreements within
Germany, Japan and the UK. The leases entered into are 12 months or
less and the Group has elected to apply the practical expedient
permitted under IFRS 16 to not recognise a right-of-use asset and
lease liability in respect of these leases due to their short-term
nature. The 2020 operating expense presented within the
consolidated income statement includes GBP242,000 of rent expense
in respect of these leases. The future obligations for the new
short-term leases are reported within the table below.
The Group enters into these arrangements as these are a
cost-efficient way of obtaining the short-term benefits of these
assets.
The Group's future aggregate minimum lease payments under
non-cancellable short-term leases are as follows:
Land and buildings Land and buildings
2020 2019
GBP'000 GBP'000
------------------------ ------------------- -------------------
No later than one year 160 231
Total 160 231
------------------------ ------------------- -------------------
The above table reflects the committed cash payments under
short-term leases, rather than the expected charge to the
consolidated income statement in the relevant periods.
22 Share capital and premium
Number of
ordinary Merger
shares relief
of GBP0.02 Share capital Share premium reserve Total
each GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------- ------------ ------------- ------------- --------- --------
Balance at 1 January 2019 73,087,904 1,462 46,375 - 47,837
----------------------------------- ------------ ------------- ------------- --------- --------
Issued under share-based payment
plans 219,215 4 27 - 31
Capital reduction - - (28,948) - (28,948)
Repurchase and cancellation of
shares (23,803,690) (476) - - (476)
----------------------------------- ------------ ------------- ------------- --------- --------
Change in year (23,584,475) (472) (28,921) - (29,393)
----------------------------------- ------------ ------------- ------------- --------- --------
Balance at 31 December 2019 49,503,429 990 17,454 - 18,444
----------------------------------- ------------ ------------- ------------- --------- --------
Issued under share-based payment
plans 90,657 2 10 - 12
Issued on placing to institutional
investors 6,794,872 136 5,030 - 5,166
Issued as part consideration
for acquisition 923,294 18 - 739 757
Balance at 31 December 2020 57,312,252 1,146 22,494 739 24,379
----------------------------------- ------------ ------------- ------------- --------- --------
The Company has one class of ordinary shares which carry no
right to fixed income.
Shares issued by placing during 2020 raised gross cash of GBP5.3
million with issue costs of GBP0.1 million incurred.
Where shares have been issued as part of the consideration for
the acquisition of OSPI, excess proceeds over nominal value are
recognised in a merger relief reserve.
23 Final Results Announcement
This final results announcement, which has been agreed with the
auditors, was approved by the Board of Directors on 22 March 2021.
It is not the Group's statutory accounts for the year ended 31
December 2020 within the meaning of section 435 of the Companies
Act 2006 but is extracted from those financial statements. Copies
of the Group's audited statutory accounts for the year ended 31
December 2020 will be available at the Company's website,
www.iqgeo.com, promptly after the release of this preliminary
announcement and a printed version will be dispatched to
shareholders shortly. Copies will also be delivered to the
registrar of Companies following the Annual General Meeting.
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