TIDMDODS
RNS Number : 8409G
Dods Group PLC
30 November 2020
30 November 2020
Dods Group plc
("Dods", the "Company" or "the Group")
INTERIM RESULTS TO 30 SEPTEMBER 2020
Dods Group plc (AIM: DODS) announces its unaudited interim
results for the half year ended 30 September 2020.
Company Overview
Dods is a leading technology company specialising in business
intelligence, media and technology resourcing. With extensive
capability in machine learning and AI, we manage and transform
large volumes of data and information across multiple industries,
for some of the UK's leading business intelligence providers. In
the political and regulatory domains, we have built a reputation
for high quality, unbiased content across all of our products and
services in Westminster, Edinburgh, Paris and Brussels.
Financial Highlights
Continuing operations
H1 2021 H1 2020
30 Sept 20 30 Sept
19
Total revenue GBP10.2m GBP12.5m
Gross margin 31% 34%
Adjusted EBITDA (1) (GBP0.2m) GBP1.4m
Adjusted EBIT (2) (GBP1.9m) GBP0.2m
Loss before tax (GBP2.6m) (GBP0.3m)
Adjusted basic EPS (0.31p) 0.04p
Basic EPS (0.46p) (0.08p)
30 Sept 20 31 Mar 20
Cash at bank GBP4.1m GBP4.4m
Debt GBP3.0m GBP3.0m
Total assets GBP61.1m GBP63.9m
1. Adjusted EBITDA is calculated as earnings before interest,
tax, depreciation, amortisation of intangible assets, share based
payments and non-recurring items.
2. Adjusted EBIT is calculated as operating profit (loss) plus
non-recurring costs.
Operational Highlights
-- Formation of two new divisions; Dods Technology with
Cornelius (Con) Conlon as Managing Director and Dods Intelligence
with Munira Ibrahim as Managing Director;
-- Covid-19 pandemic accelerated move to a more technology enabled business;
-- Successful mobilisation of entire global workforce to remote
working; reviewing London office space requirements to reflect the
new hybrid working model with a consequential reduction in
costs;
-- Senior team strengthened across sales, technology, editorial,
creative, finance, legal and HR.
Outlook
The results for the period are in line with the Board's
expectations.
Despite the continued impact of Covid-19 on revenues, in
particular Events and Training, the Group is cash generative, has
additional liquidity available and has strengthened and diversified
its capabilities and senior management team, particularly through
the successful completion of the Merit acquisition in July
2019.
Due to the ongoing uncertainties around the global Covid-19
pandemic, the Board remains cautious about the outlook for the
second half of the year but confident in the Company's
transformational strategy and the long term outlook for the
Group.
Mark Smith, Non- Executive Chairman, commented:
" The Group's results for the first half of FY21 are in line
with the Board's expectations; whilst Covid-19 has had a huge
impact on parts of our core business our diversified portfolio
helped to mitigate the downside. The business adapted quickly to
remote working for all employees around the world and continues to
operate efficiently under flexible working conditions. We are
grateful for the continued support of our customers, suppliers,
shareholders, bankers and employees as we continue the
modernisation and transformation of Dods.
As announced last week we are delighted to welcome Vijay Vaghela
to the Board and Chairmanship of the Audit Committee. I am also
pleased to confirm my position as Chairman ."
This announcement is released by Dods Group plc and contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) 596/2014 ("MAR"), and is disclosed in
accordance with the Group's obligations under Article 17 of
MAR.
For the purposes of MAR and Article 2 of Commission Implementing
Regulation (EU) 2016/1055, this announcement is being made on
behalf of the Group by Simon Bullock, Chief Financial Officer.
For further information, please contact:
Dods Group plc
Mark Smith - Non-Executive Chairman 020 7593 5500
www.dodsgroup.com
Canaccord Genuity Limited (Nomad and Broker)
Bobbie Hilliam 020 7523 8150
Georgina McCooke
BUSINESS AND OPERATIONAL REVIEW
The interim results are in line with expectations and progress
continues to be made in transforming Dods from a publishing company
to a high-tech business services group as we emerge from the
initial impacts of the current global pandemic.
Dods Technology
The business is characterised by strong recurring revenues
amongst its clients and this has helped the company to weather a
Covid-19 dominated first half. Whilst short term, discretionary and
tactical revenue has been indirectly affected by the pandemic (down
by over 70%), the recurring revenue base means the business has
retained and delivered 95% of the overall revenue earned in the
same period last year. During the period the business has:
-- Shifted India based workers to a work from home operating model;
-- Secured new 'big data' projects in the pharmaceutical and publishing spaces;
-- Developed new products and delivered stronger IT support across the group as a whole;
-- Undertaken significant cost reduction measures; and
-- Grown several key accounts by more than 20%.
Dods Intelligence
The national UK lockdown on March 23(rd) and subsequent social
distancing requirements have significantly impacted revenues for
Dods Events (down 95% , but with improved margins ) and Dods
Training (down 51%), resulting in a rapid and accelerating switch
from physical to virtual events and training sessions and also
moving more of our media and publications from print to digital,
driving higher margins. Through the period, the team have:
-- Pivoted the delivery of events and training courses to
virtual - with 220 training courses and 50 events delivered. This
shift to virtual has resulted in higher margins due to lower
delivery costs;
-- Transitioned the majority of the publications to digital only
during lockdown which resulted in further cost savings and are
reviewing the print frequency on an ongoing basis;
-- Partnered with EY on delivering Civil Service Learning
contracts in addition to continuing a similar partnership with
KPMG;
-- Expanded the client base and now working directly with brands
including Oracle, SAP, Salesforce and Dell Boomi to provide access
to our niche and highly influential political audience;
-- Launched partnership with Politix to on-sell our unique UK
and EU monitoring product to German and Austrian clients;
-- Launched a new marketing franchise called Dods Insights that
brings together our editorial expertise and access across a variety
of topical news stories; and
-- Enacted a reduction in headcount in the events team by 30%
with smaller reductions across sales and delivery teams.
The team successfully implemented the above whilst in lockdown
and with staff levels reduced by 40% due to the Company benefitting
from the Government furlough scheme.
Covid-19 Update
The Group continues to address the challenges of Covid-19 which
is having an adverse impact on both revenues and profits
particularly in our events and training businesses; which will, in
part, be mitigated by strong recurring revenues within business
intelligence and resilience within Dods Technology (Merit).
The majority of employees are working from home with minimal
disruption to the business and this trend is expected to continue
into 2021.
Going Concern
The directors have considered the implications for Going Concern
and remain satisfied with the Company's funding and liquidity
position. See further comments under Statement of Financial
Position.
Outlook
The new team is continuing to innovate, build recurring
revenues, drive margin improvements and reduce costs to support the
Group's activities. Whilst it is impossible to predict the extent
of the continued global uncertainty around the pandemic, the Board
remains confident in the medium to long-term prospects of the
Group.
Con Conlon Munira Ibrahim
Managing Director Managing Director
Dods Technology Dods Intelligence
FINANCIAL REVIEW
Income statement
The Group's revenue from continuing operations decreased by 18%
to GBP10.2 million (H1 2020: GBP12.5 million) despite the benefit
of a full six month trading period from the Merit acquisition (H1
2020: 2.5 months).
Across Dods Intelligence, revenues from Events declined 95%
(from GBP4.6m to GBP0.2m) compared with the prior period and
Training revenues declined by 51% to GBP0.4m over the same period
as a direct consequence of the Covid-19 pandemic and Government
requirements on social distancing. Monitoring and Media revenues
were down 5% and 11% respectively. On a like-for-like basis
revenues from Dods Technology (Merit) were up GBP0.1m (2%).
During the period gross profit decreased by 24% to GBP3.2
million (H1 2020: GBP4.2 million) as a result of the revenue
shortfalls in Events and Training. Gross margin decreased from 34%
to 31% in the period, again driven by Events and Training.
Excluding these two businesses, overall margins were up 1.5%,
reflecting the migration from print to digital across all media
offerings.
Adjusted EBITDA decreased by GBP1.5 million to a loss of GBP0.2
million (H1 2020: GBP1.4 million profit). Operating loss was GBP2.3
million (H1 2020: GBP0.1 million loss), after a right-of-use assets
charge of GBP0.7 million (H1 2020: GBP0.5 million), an amortisation
charge of GBP0.4 million (H1 2020: GBP0.3 million) for business
combinations a charge of GBP0.2 million (H1 2020: GBP0.1 million),
for intangible assets depreciation charge of GBP0.3 million (H1
2020: GBP0.2 million) and non-recurring costs of GBP0.5 million (H1
2020: GBP0.3 million).
Net finance costs have increased for the period to GBP0.3
million (H1 2020: GBP0.2 million) reflecting borrowing costs
associated with the GBP3.0 million term loan from Barclays Bank
procured for the acquisition of Merit.
The taxation credit for the period was GBP3k (H1 2020: charge
GBP37k).The tax charge is based on the use of accumulated tax
losses.
Adjusted earnings per share, basic and diluted, from continuing
operations in the period were a loss of 0.31 pence and 0.30 pence
respectively (H1 2020: 0.04 pence profit) and were based on the
adjusted loss for the period of GBP1.7 million (H1 2020: GBP0.2
million profit) with a weighted average number of shares in issue
during the period of 564,786,453.
Earnings per share, both basic and diluted, from continuing
operations in the period were a loss of 0.46 pence (H1 2020: loss
of 0.08 pence) and were based on the loss after tax for the period
of GBP2.6 million (H1 2020: loss of GBP0.3 million).
The Board is not proposing a dividend (H1 2020: GBPnil).
Statement of Financial Position
Assets
Other non-current assets consisted of goodwill of GBP28.8
million (FY 2020: GBP28.9 million), intangible assets of GBP11.0
million (FY 2020: GBP11.2 million) and tangible fixed assets of
GBP1.9 million (FY 2020: GBP2.1 million).
The Group holds a 40% stake in the issued share capital of Sans
Frontières Associates (SFA) and has loaned SFA GBP0.6 million (FY
2020: GBP0.6 million) at the period end. The loan is unsecured and
carries no interest charge. Additionally, the Group holds a 30%
stake in Social 360 at a cost of GBP0.5 million (FY 2020: GBP0.5
million).
The Group had a cash balance of GBP4.1 million (FY 2020: GBP4.4
million) and gross borrowings of GBP3.0 million at the period end
(FY 2020: GBP3.0 million).
The Group has a term loan of GBP3.0 million (FY 2020: GBP3.0
million) over a 5-year period at an rate of 3.25% over LIBOR. The
current amount due is GBP0.9 million (FY 2020: GBP3.0 million) and
non-current is GBP2.1 million (FY 2020: GBPnil).
Current liabilities fell by GBP1.7 million to GBP16.3 million
(FY 2020: GBP18.0 million). Excluding the term loan, the current
liabilities increased primarily as a result of VAT and PAYE
deferrals available as part of the UK Government's support for
businesses impacted by Covid-19. GBP0.9m of VAT has been deferred
and will be paid between April 2021 and March 2022. The Group has
entered into a Time To Pay agreement with HMRC with respect to
GBP1.3 million of PAYE that will be fully settled by March
2021.
Deferred tax liability was GBP0.9 million (FY 2020: GBP0.9
million).
Total assets of the Group were GBP61.1 million (FY 2020: GBP63.9
million) with the main movements being a reduction in debtors of
GBP1.7 million and fall in fixed assets from amortisation and
depreciation charges.
Total equity reduced by GBP1.5 million to GBP34.3 million (FY
2020: GBP35.8 million), reflecting the loss for the period
partially offset by the issue of shares relating to deferred
consideration for the acquisition of Merit.
Liquidity and capital resources
The Group has generated cash from operations of GBP1.6 million
(H1 2020: GBP0.2 million) during the period primarily driven by
strong debtor collections and the deferral of VAT and PAYE.
The cash position at the period end was GBP4.1 million (2020:
GBP4.4 million). As at 30 September 2020 the Group had a net cash
position of GBP1.1 million (2020: GBP1.4 million).
The Group continues to benefit from an excellent relationship
with Barclays Bank plc; as previously reported capital payments on
the GBP3.0 million term loan have been deferred from April to
December 2020; all covenants have been waived through to January
2021 and the revolving credit facility of GBP2 million remains
available for draw-down. The Board is confident the business has
sufficient liquidity to meet its obligations, although this is an
area of continued focus due to the uncertainty arising from the
Covid-19 pandemic.
Simon Bullock
Chief Financial Officer
Condensed consolidated income statement
For the half year ended 30 September 2020
Unaudited Unaudited Audited
Half year Half year Year ended
ended ended 31 Mar 2020
Note 30 Sept 2020 30 Sept GBP'000
GBP'000 2019
GBP'000
------------------------------------- ------- -------------- ----------- -------------
Revenue 2 10,227 12,524 27,796
Cost of sales (7,051) (8,326) (18,852)
------------------------------------- ------- -------------- ----------- -------------
Gross profit 3,176 4,198 8,944
Administrative expenses (3,373) (2,842) (6,154)
Adjusted EBITDA (197) 1,356 2,790
Depreciation of tangible fixed
assets (297) (243) (537)
Depreciation of right-of-use
assets (704) (507) (1,210)
Amortisation of intangible
assets acquired through business
combinations (426) (281) (711)
Amortisation of software intangible
assets (228) (144) (158)
Non-recurring items 3
Non-recurring acquisition
costs and
professional fees (272) (70) (171)
People-related costs (143) (121) (785)
Other non-recurring items (35) (116) (80)
Operating loss (2,302) (126) (862)
Net finance costs (300) (177) (555)
Share of profit of associate - - 158
------------------------------------- ------- -------------- ----------- -------------
Loss before tax (2,602) (303) (1,259)
Income tax (charge) / credit 3 (37) 76
------------------------------------- ------- -------------- ----------- -------------
Loss for the period (2,599) (340) (1,183)
------------------------------------- ------- -------------- ----------- -------------
Loss per share (pence)
Basic 4 (0.46p) (0.08p) (0.24p)
Diluted 4 (0.46p) (0.08p) (0.24p)
----------- -------- -------- --------
The notes on pages 11 to 16 form part of these unaudited interim
results.
Condensed consolidated statement of comprehensive income
For the half year ended 30 September 2020
Unaudited Unaudited Audited
Half year Half year Year ended
ended ended 31 Mar 2020
30 Sept 2020 30 Sept GBP'000
GBP'000 2019
GBP'000
------------------------------------- -------------- ----------- -------------
Loss for the period (2,599) (340) (1,183)
Items that may be subsequently
reclassified to Profit and loss
Exchange differences on translation
of foreign operations 117 - 6
------------------------------------- -------------- ----------- -------------
Other comprehensive income for
the period 117 - 6
------------------------------------- -------------- ----------- -------------
Total comprehensive loss for the
period (2,482) (340) (1,177)
------------------------------------- -------------- ----------- -------------
The notes on pages 11 to 16 form part of these unaudited interim
results.
Condensed consolidated statement of financial position
As at 30 September 2020
Unaudited Unaudited Audited
30 Sept 2020 30 Sept 2019 31 Mar 2020
Note GBP'000 GBP'000 GBP'000
---------------------------------- ------- -------------- -------------- -------------
Non-current assets
Goodwill 5 28,845 28,218 28,911
Intangible assets 6 11,042 10,245 11,238
Property, plant and equipment 7 1,879 2,286 2,134
Right-of-use asset 7,412 8,629 7,926
Investment in associates 690 503 661
Long-term loan receivable 560 630 560
Total non-current assets 50,428 50,511 51,430
Current assets
Work in progress and inventories 434 35 273
Trade and other receivables 6,088 7,010 7,819
Cash and cash equivalents 4,100 6,787 4,368
Total current assets 10,622 13,832 12,460
Total assets 61,050 64,343 63,890
---------------------------------- ------- -------------- -------------- -------------
Capital and reserves
Issued capital 9 19,501 19,239 19,239
Share premium 20,866 20,082 20,082
Other reserves 415 409 409
Retained loss (6,473) (3,148) (3,991)
Share option reserve 85 55 75
Translation reserve (72) (67) (61)
Total equity 34,322 36,570 35,753
Current liabilities
Trade and other payables 12,633 9,381 12,423
Deferred consideration 10 1,318 1,318 1,046
Bank loan 857 353 3,000
Lease liability 1,515 1,524 1,515
Total current liabilities 16,323 12,576 17,984
Non-current liabilities
Deferred tax liability 862 487 862
Deferred consideration 10 272 1,590 1,590
Bank loan 2,143 4,647 -
Lease liability 7,128 8,473 7,701
---------------------------------- ------- -------------- -------------- -------------
Total non-current liabilities 10,405 15,197 10,153
Total equity and liabilities 61,050 64,343 63,890
---------------------------------- ------- -------------- -------------- -------------
The notes on pages 11 to 16 form part of these unaudited interim
results.
Condensed consolidated statement of changes in equity
For the half year ended 30 September 2020
Total
Share Retained Translation Share shareholders'
Share premium Merger earnings reserve(3) option funds
capital reserve(1) reserve(2) GBP'000 GBP'000 reserve(4) GBP'000
GBP'000 GBP'000 GBP'000 GBP'000
------------------ ----------- ------------ ------------ ----------- ------------- ------------ ---------------
Unaudited
------------------ ----------- ------------ ------------ ----------- ------------- ------------ ---------------
At 1 April 2019 17,096 8,142 409 (2,616) (67) 55 23,019
------------------ ----------- ------------ ------------ ----------- ------------- ------------ ---------------
Effect of
adoption of
IFRS 16 Leases - - - (192) - - (192)
At 1 April 2019
(restated) 17,096 8,142 409 (2,808) (67) 55 22,827
Total
comprehensive
income
Loss for the
period - - - (340) - - (340)
Transactions with
owners
Issue of
ordinary
shares 2,143 11,940 - - - - 14,083
------------------ ----------- ------------ ------------ ----------- ------------- ------------ ---------------
At 30 September
2019 19,239 20,082 409 (3,148) (67) 55 36,570
------------------ ----------- ------------ ------------ ----------- ------------- ------------ ---------------
At 1 April 2020 19,239 20,082 409 (3,991) (61) 75 35,753
Total
comprehensive
income
Loss for the
year - - - (2,482) - - (2,482)
Transactions with
owners
Issue of
ordinary
shares 262 784 - - - - 1,046
Other
comprehensive
loss
Currency
translation
differences - - 6 - (11) - (5)
Share-based
payment - - - - - 10 10
------------------ ----------- ------------ ------------ ----------- ------------- ------------ ---------------
At 30 September
2020 19,501 20,866 415 (6,473) (72) 85 34,322
------------------ ----------- ------------ ------------ ----------- ------------- ------------ ---------------
1 The share premium reserve represents the amount paid to the
Company by shareholders above the nominal value of shares
issued.
2 The merger reserve represents accounting treatment in relation
to historical business combinations.
3 The translation reserve comprises foreign currency translation
differences arising from the translation of financial statements of
the Group's foreign entities into sterling.
4 The share option reserve represents the cumulative expense
recognised in relation to equity-settled share-based payments.
The notes on pages 11 to 16 form part of these unaudited interim
results.
Condensed consolidated statement of cash flows
For the half year ended 30 Unaudited Unaudited Audited
September 2020 Half year Half year Year ended
ended ended 31 Mar 2020
30 Sept 30 Sept GBP'000
2020 2019
GBP'000 GBP'000
--------------------------------------- ----------- ----------- -------------
Cash flows from operating activities
Loss for the period (2,599) (340) (1,183)
Depreciation of property, plant
and equipment 297 243 573
Depreciation of right-of-use
assets 704 507 1,210
Amortisation of intangible
assets acquired through business
combinations 426 281 711
Amortisation of other intangible
assets 228 144 158
Share-based payments charge 10 - 20
Share of profit of associate - - (158)
Lease interest expense 228 200 420
Net finance costs 62 - 135
Non-recurring acquisition costs
and professional fees 450 1,670 2,010
Income tax charge / (credit) (3) 37 (76)
Operating cash flows before
movement in working capital (197) 2,742 3,784
Change in inventories (161) (18) (257)
Change in trade and other receivables 1,720 (1,363) (1,013)
Change in trade and other payables 210 (1,060) (282)
Cash generated by operations 1,572 301 2,232
Taxation paid 3 (85) (193)
---------------------------------------- ----------- ----------- -------------
Net cash from operating activities 1,575 216 2,039
---------------------------------------- ----------- ----------- -------------
Cash flows from investing activities
Interest and similar income
received - - 5
Non-recurring acquisition costs
and professional fees (272) (1,670) (2,010)
Additions to property, plant
and equipment (304) (45) (187)
Additions to intangible assets (196) (161) (1,400)
WIP on software not yet capitalised - (300) -
Investment in subsidiaries
(net of cash acquired) (29) (17,055) (17,055)
Net proceeds from bank loan - 5,000 3,000
Repayment of long-term loan
by associate - 70 140
---------------------------------------- ----------- ----------- -------------
Net cash used in investing
activities (801) (14,161) (17,507)
---------------------------------------- ----------- ----------- -------------
Cash flows from financing activities
Proceeds from issue of share
capital - 13,037 13,037
Interest and similar expenses
paid (300) - (140)
Payment of lease liabilities (756) (731) (1,487)
---------------------------------------- ----------- ----------- -------------
Net cash from / (used in) financing
activities (1,056) 12,306 11,410
---------------------------------------- ----------- ----------- -------------
Net decrease in cash and cash
equivalents (282) (1,639) (4,058)
Opening cash and cash equivalents 4,368 8,426 8,426
Effect of exchange rate fluctuations 14 - -
on cash held
--------------------------------------- ----------- ----------- -------------
Closing cash at bank 4,100 6,787 4,368
---------------------------------------- ----------- ----------- -------------
Comprised of:
Cash and cash equivalents 4,368 6,787 4,368
Closing cash at bank 4,100 6,787 4,368
---------------------------------------- ----------- ----------- -------------
The notes on pages 11 to 16 form part of these unaudited interim
results.
1. Basis of preparation
Dods Group plc is a Company incorporated in England and
Wales.
This condensed set of financial statements has been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted by
the EU. The annual financial statements of the Group are prepared
in accordance with International Financial Reporting Standards
(IFRSs) as adopted by the EU. As required by AIM Rules, the
condensed set of financial statements has been prepared, and
applying accounting policies and presentation that were applied in
the preparation of the Group's published consolidated financial
statements for the year ended 31 March 2020.
The comparative figures for the year ended 31 March 2020 have
been extracted from the Group's statutory accounts for that
financial period. Those accounts have been reported on by the
company's auditor and delivered to the registrar of companies. The
report of the auditor was (i) unqualified, (ii) did not include a
reference to any matters to which the auditor drew attention by way
of emphasis without qualifying their report, and (iii) did not
contain a statement under section 498(2) or (3) of the Companies
Act 2006.
The taxation charge for the six months ended 30 September 2020
is based on the utilisation of accumulated tax losses.
Going concern
The Directors have considered the financial projections of the
Group, including cash flow forecasts and the availability of
committed bank facilities for the coming 12 months. They are
satisfied that the Group has adequate resources for the foreseeable
future and that it is appropriate to continue to adopt the going
concern basis in preparing these interim financial statements.
Accounting estimates and judgements
The Group makes estimates and judgements concerning the future
and the resulting estimates may, by definition, vary from the
actual results. The Directors considered the critical accounting
estimates and judgements used in the interim financial statements
and concluded that the main areas of judgement are:
-- Potential impairment of goodwill and other assets as a result
of the impact of COVID-19; and
-- Contingent deferred payments in respect of acquisitions.
The condensed set of interim financial statements have been
prepared on a going concern basis and were approved by the Board on
29 November 2020 .
2. Segmental information
Business segments
The Group now considers that it has two operating business
segments, Dods Intelligence and Dods Technology.
Dods Intelligences' business segment concentrates on the
provision of key information and insights into the political and
public policy environments around the UK and the European
Union.
The Dods Technology segment has extensive capability in machine
learning and AI and manages the transformation of large volumes of
data and information across multiple industries for some of the
UK's leading business intelligence providers.
The following table provides an analysis of the Group's segment
revenue by business segment.
Unaudited Unaudited Audited
Half year Half year Year ended
ended ended 31 Mar 2020
30 Sept 2020 30 Sept GBP'000
GBP'000 2019
GBP'000
------------------- -------------- ----------- -------------
Dods Intelligence 5,210 10,394 20,154
Dods Technology 5,017 2,130 7,642
10,227 12,524 27,796
------------------- -------------- ----------- -------------
No client accounted for more than 10 percent of total
revenue.
Asset segment information has not been disclosed because this
information is not reviewed by the senior management team for the
purpose of allocating resources.
Note the prior year comparison for Dods Technology reflects only
the post-acquisition period of 2.5 months.
3. Non-recurring items
Unaudited Unaudited Audited
Half year Half year Year ended
ended ended 31 Mar 2020
30 Sept 2020 30 Sept 2019 GBP'000
GBP'000 GBP'000
--------------------------------- -------------- -------------- -------------
Non-recurring acquisition costs
and professional fees 272 70 171
People-related costs 143 121 785
Other
- Professional services and
consultancy - 78 45
- Other 35 38 35
450 307 1,036
--------------------------------- -------------- -------------- -------------
4. Earnings per share
Unaudited Unaudited Audited
Half year Half year Year ended
ended ended 31 Mar 2020
30 Sept 2020 30 Sept 2019 GBP'000
GBP'000 GBP'000
-------------------------------------- -------------- -------------- -------------
Loss attributable to shareholders (2,599) (340) (1,183)
Add: non-recurring items 450 307 1,036
Add: amortisation of intangible
assets acquired through business
combinations 426 281 711
Add: net exchange (gains) /
losses [included within net
finance costs] (12) (61) 23
Add: share-based payment expense 10 - 20
-------------------------------------- -------------- -------------- -------------
Adjusted post-tax profit /
(loss) attributable to shareholders (1,725) 187 607
-------------------------------------- -------------- -------------- -------------
Unaudited Unaudited Audited
Half year ended Half year Year ended
30 Sept 2020 ended 31 Mar 2020
Ordinary shares 30 Sept 2019 Ordinary
Ordinary shares
shares
------------------------------ ----------------- -------------- -------------
Weighted average number of
shares
In issue during the period
- basic 564,786,453 429,464,215 492,696,964
Adjustment for share options 1,662,000 1,812,000 1,674,500
In issue during the period
- diluted 566,448,453 431,276,215 494,371,464
------------------------------ ----------------- -------------- -------------
Unaudited Unaudited Audited
Half year ended Half year Year ended
30 Sept 2020 ended 31 Mar 2020
Pence per share 30 Sept 2019 Pence per
Pence per share
share
--------------------------------- ----------------- -------------- -------------
Earnings per share - continuing
operations
Basic (0.46) (0.08) (0.24)
Diluted (0.46) (0.08) (0.24)
Adjusted earnings per share
- continuing operations
Basic (0.31) 0.04 0.12
Diluted (0.30) 0.04 0.12
--------------------------------- ----------------- -------------- -------------
5. Goodwill
Unaudited Unaudited Audited
Half year Half year Year ended
ended ended 31 Mar 2020
30 Sept 2020 30 Sept 2019 GBP'000
GBP'000 GBP'000
--------------------------- -------------- -------------- -------------
Cost and net book value
Opening balance 28,911 13,282 13,282
Acquisition of subsidiary - 14,936 15,629
Reclass to intangibles (66) - -
Closing balance 28,845 28,218 28,911
--------------------------- -------------- -------------- -------------
6. Intangible assets
Other Capitalised
Assets acquired Costs
through business Software Total
combinations
GBP'000 GBP'000 GBP'000
------------------------ ------------------- ----------- ------------------ ---------
Cost
At 1 April 2019 23,956 3,419 - 27,375
Additions - internally
generated - 296 - 296
Additions - other - - 1,304 1,304
Impairment 4,086 - - 4,086
------------------------ ------------------- ----------- ------------------ ---------
At 31 March 2020 28,042 3,715 1,304 33,061
Reclass from goodwill - - 66 66
Additions - internally
generated - 30 368 398
At 30 September 2020 28,042 3,745 1,738 33,525
------------------------ ------------------- ----------- ------------------ ---------
Accumulated amortisation
At 1 April 2019 17,710 3,244 - 20,954
Charge for the year 711 158 - 869
-------------------------- ------- ------ ---- -------
At 31 March 2020 18,421 3,402 - 21,823
Charge for the period 426 131 103 660
-------------------------- ------- ------ ---- -------
At 30 September 2020 18,847 3,533 103 22,483
-------------------------- ------- ------ ---- -------
Net book value
At 31 March 2019 - audited 6,246 175 - 6,421
At 31 March 2020 - audited 9,621 313 1,304 11,238
------------------------------ -------- ------ ------ ---------
At 30 September 2020
- unaudited 9,195 212 1,635 11,042
------------------------------ -------- ------ ------ ---------
7. Property, plant and equipment
Equipment
and Fixtures
Leasehold Improvements and Fittings Total
GBP'000 GBP'000 GBP'000
--------------------------- ------------------------- -------------- --------
Cost
At 1 April 2019 2,010 1,121 3,131
Additions 15 172 187
Acquisition of subsidiary - 421 421
At 31 March 2020 2,025 1,714 3,739
Additions 54 - 54
Disposals - (25) (25)
At 30 September 2020 2,079 1,689 3,768
---------------------------- ------------------------- -------------- --------
Accumulated depreciation
At 1 April 2019 480 588 1,068
Charge for the year 212 325 573
At 31 March 2020 692 913 1,605
Charge for the period 126 158 284
At 30 September 2020 818 1,071 1,889
--------------------------- ------ ------ --------
Net book value
At 31 March 2019 - audited 1,530 533 2,063
At 31 March 2020 - audited 1,333 801 2,134
At 30 September 2020
- unaudited 1,261 618 1,879
------------------------------- -------- ------ --------
8. Interest-bearing loans and borrowings
During the period, the Group maintained a term loan of GBP3
million (H1 2020: GBP3 million), over a 5-year period carrying a
rate of 3.25% over LIBOR, with the first repayment of GBP0.2
million due on 31(st) December 2020.
In addition, it has access to a revolving credit facility (RCF)
of GBP2 million carrying a rate of 3.5% over LIBOR.
9. Share Capital
9p deferred 1p ordinary Total
shares shares GBP'000
Number Number
--------------------------------- ------------ ------------ ---------
Issued share capital as at
1 April 2020 151,998,453 555,929,713 19,239
Shares issued during the period - 26,141,667 262
Issued share capital as at
30 Sept 2020 151,998,453 582,071,380 19,501
--------------------------------- ------------ ------------ ---------
Holders of deferred shares do not have the right to receive
notice of any general meeting of the Company or any right to
attend, speak or vote at such meeting. The deferred shareholders
are not entitled to receive any dividend or distribution and shall
on a return of assets in a winding up of the Company entitle the
holders only to the repayment of 1 penny in aggregate. The deferred
shares are also incapable of transfer and no share certificates
will be issued.
During the period the Company issued 26,141,667 ordinary shares
related to the acquisition of Merit.
During the period the Group issued nil (2020: nil) ordinary
shares on the exercise of employee share options for cash
consideration of nil (2020: nil) of which GBPnil (2020: nil) was
credited to share capital and GBPnil (2020: nil) to share
premium.
10. Related party transactions
During the period, Artefact Partners LLP provided strategic
consultancy services to Dods Group plc to the value of GBPnil (H1
2020: GBP20,000). Current non-executive director Richard Boon is an
LLP designated member of Artefact Partners LLP.
During the period, the Group received a repayment of GBPnil (H1
2020: GBP70,000) on its interest free loan to its associate Sans
Frontieres Associates (SFA). At 30 September 2020 the balance of
this loan was GBP560,000 (H1 2020: GBP630,000).
During the period, an amount of GBP29,753 (H1 2020: GBP24,650)
was payable to an associate, Social 360 Limited, in relation to
profit-share for monitoring services provided. At 30 September
2020, GBPnil (H1 2020: GBP24,650) was outstanding.
On acquisition of Merit, an arm's length non-repairing 7-year
lease was entered into between a Merit subsidiary (Letrim
Intelligence Services Private Limited) and Merit Software Services
Private Limited. Cornelius Conlon, a director of the Group, is the
beneficial owner of Merit Software Services Private Limited. The
lease relates to the Chennai office of Merit. During the period,
payments of GBP339,000 ( H1 2020: GBP158,000) were made to Merit
Software Systems Private Limited in relation to the lease.
During the period the Company issued 13,333,819 ordinary shares
in connection with the deferred consideration payable as part of
the acquisition of Meritgroup Limited, to Con Conlon, Managing
Director of the Dods Technology division.
In addition, Con Conlon was paid GBP220,000 due to his continued
employment, post-acquisition (see note 11).
11. Contingent Liabilities
Upon the acquisition of Meritgroup Limited ("Merit") the Company
became obligated, under certain conditions, to make payments to two
employees of Merit. In the period GBP272K was paid and was reported
as a non-recurring charge.
Further payments of GBP272K per annum could become due in July
2021 and July 2022 contingent upon their continued employment.
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END
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November 30, 2020 02:00 ET (07:00 GMT)
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