TIDMOUT
RNS Number : 4350S
Outsourcery PLC
24 September 2014
24 September 2014
Outsourcery plc
("Outsourcery" or the "Group")
Interim Results for the six months ended 30 June 2014
Outsourcery plc (AIM: OUT; "Outsourcery"; the "Company";
together with its subsidiary undertakings, the "Group"), a leading
Cloud Service Provider ("CSP") that helps organisations of any size
to reduce costs, increase productivity and work better, announces
interim results for the six months ended 30 June 2014.
Financial Metrics
30 June 30 June Change
2014 2013
--------------------------------- ---------- ---------- -------
Group Revenue GBP3.4m GBP2.1m 65%
- monthly recurring revenue GBP0.6m GBP0.3m 100%
--------------------------------- ---------- ---------- -------
Adjusted EBITDA * GBP(2.8m) GBP(2.7m) (1%)
Adjusted (loss) from continuing
operations ** GBP(3.6m) GBP(4.1m) 12%
Adjusted (loss) per share *** (10.3)p (20.2)p 49%
Gross Cash GBP1.3m GBP7.3m
*Adjusted EBITDA is defined as earnings before finance costs,
tax, depreciation and amortisation, restructuring costs, employee
share based payment costs and listing fees and is considered by the
Directors to be a key measure of financial performance.
**Adjusted (loss) from continuing operations is defined as
earnings before restructuring costs, employee share based payment
costs and listing fees.
***Adjusted (loss) per share has been disclosed to give a clear
understanding of the Group's underlying trading performance. It has
been calculated using the underlying earnings figures above and the
weighted average number of ordinary shares in issue.
Operational Highlights
-- Results in line with Board's expectations and on track to achieve full year expectations
Ø Increasing pipeline visibility on opportunities from
enterprise and mid-market end-customers
Ø Several milestone end-customer wins secured representing
industry firsts
Ø Clear path to monthly run rate break-even and operational
positive cash flow during 2015
-- Financing package of GBP4.5 million secured post period-end
Ø GBP3.5 million of additional working capital secured as part
of an overall financing package of GBP4.5 million
Ø Annualised cost savings of GBP1.0m following
re-organisation
-- Partner relationships evolving positively, in spite of longer than anticipated ramp up
Ø Strategic partners have launched services and are actively
developing pipeline
Ø First win - Lync-based unified communications to tens of
thousands of end-users worth c GBP70,000 per month
Ø Secured Microsoft Cloud Deployment Partner status providing
access to funding for Office365 deployments
Ø Steady growth in SMB channel revenue
-- Public sector Secure O-Cloud platform deployment and launch on track
Ø Secure O-Cloud (formerly IL3) platform remains on track for
accreditation before year end
Ø Building direct sales capability to ensure Secure O-Cloud
revenue is won during 2015
Ken Olisa OBE, Non-Executive Chairman commented:
"The first six months of this year have not been without
challenge, but it is important to remember how much this young and
fast growing firm has achieved in the same time. In the first half
of the year we have activated new strategic partners; switched on
and fired up existing partners; and brought our first, large-scale
customer deployments across the line. Outsourcery is gaining a
reputation in the marketplace for being the go-to problem solver
for companies keen to make the cloud move, but unsure of how best
to do it. I look forward to the second half as we push ahead with
building on that hard earned reputation and proving our
capabilities and model."
Enquiries
Outsourcery +44 (0)330 313 0077
Piers Linney, Co-CEO
Simon Newton, Co-CEO
Investec +44 (0)20 7597 5100
Andrew Pinder / Patrick Robb
Dominic Emery / Carlton Nelson
FTI Consulting, LLP
Matt Dixon / Jon Snowball / Rob
Mindell +44 (0)20 3727 1000
About Outsourcery
Outsourcery is a leading Cloud Service Provider ("CSP") based in
the UK focused on the delivery of cloud-based applications,
infrastructure and unified communications solutions to business of
all sizes via its partner and as direct customers in the
mid-market. The Group focuses on Microsoft technologies due to the
significant installed base and disruptive entry into new markets
such as unified communications. Cloud computing represents a
systemic evolution in the way that IT platforms, applications and
communications ("ICT") solutions are provided in a more cost
effective and efficient way. The ICT model is rapidly shifting from
a physical technology purchase to the consumption of services with
a specified uptime service level on a monthly subscription basis.
Outsourcery has invested in its platform and capabilities to apply
economies of scale to provide highly resilient and secure services
to a range of end-customers from shared platforms in its UK
datacentres. These services are deployed on its proprietary O-Cloud
platform, a combination of software, hardware and networking, which
is housed in a third-party enterprise grade datacentres and
services for the UK central Government will be deployed in its new
Secure O-Cloud platform (formerly IL3).
Further, detailed information on the Group is available in the
Investor Centre on the Outsourcery website:
(www.outsourcery.co.uk/investors)
Business and Strategy Update
The right direction
The Group's strategy of focusing on the delivery of services
based on Microsoft technologies for the commercial and public
sectors continues to coincide with growing demand and increased
awareness of the benefits of cloud. It is becoming increasingly
apparent that businesses of all sizes wish to transition to a cloud
model. Our interactions with potential customers now focus less on
explaining the rationale for cloud and much more on the simple,
practical steps that need to be taken to make the cloud
transition.
Against that backdrop, we continue to place great emphasis on
and energy into our relationship with Microsoft. We are proud of
our position as a key member of Microsoft's cloud services partner
network and are pleased to have deepened that relationship further
this half. For example, we have now been identified as a specialist
partner in several Microsoft programmes, including the Cloud OS
Network for hybrid cloud solutions, in addition to being named as a
Cloud Deployment Partner for Microsoft's own hosted solutions such
as Office365. Outsourcery is also collaborating with Microsoft to
deploy the first Microsoft-validated platform, the Secure O-Cloud
(formerly IL3), to enable the Group to deliver cloud services to
Government. This continued alignment between our offering and
Microsoft's approach positions us well as we move in to the year
ahead.
Slower ramp up - early proof points secured
Outsourcery's strategy has relied heavily on the activation of
reseller partners to drive revenue growth from a select number of
large strategic and mid-market partners. This partnership base has
strengthened by furthered by a group of approximately 500
additional partners, each selling to small and medium-sized
enterprises ("SME").
During the first half of this year, whilst engagement levels
have been high, our larger strategic partner base has taken longer
than initially anticipated to ramp up its sales activities.
Although the Group has experienced steady growth from SME partners
during the period, it is the Board's view that the most rapid
growth will be driven by larger end-customers in the medium-term.
As such, we have not made as much revenue progress in the first
half as initially anticipated.
In spite of this delay, we have secured a number of important
sales achievements which validate our overall approach and
strategy. On 28 March, we were successful in securing our first
order from a major channel partner. The cloud-based unified
communications solution being rolled out for this customer is
expected to serve approximately 2,000 of the customer's employees.
It will replace the end customer's legacy on premise telephony
solution with a cloud-based unified communications system based on
Outsourcery's enterprise voice-enabled Lync solution. This will
provide improved communication and collaboration capabilities as
well as flexibility and improved efficiency within the
organisation.
Shortly after this milestone, on 30 April we secured a second
win with an additional major channel partner - this time an
exciting trial mandate for a large UK enterprise. Progress has also
been achieved in the mid-market partner channel, with Outsourcery
selected on 3 June by Saville Audio Visual to supply services in
partnership to Lloyds Register: a global engineering, technical and
business services organisation, with over GBP1bn turnover, 9,000
employees and 60,000 clients. This order empowers 8,500 users
worldwide with an initial phase of deployment of 1,500 users of
Lync and a second phase for the deployment of 7,000 Lync users to
complete the customer's world-wide roll out.
Momentum continues to build and we are pleased to report that we
now have greater visibility of a growing pipeline of opportunities
from large enterprise and mid-market end-customers. The first of
these large enterprise deals, secured post period end on 24 July,
is expected to generate monthly recurring revenue of GBP70,000 once
fully deployed. This solution, selected by a significant enterprise
customer, serves as evidence of the size of the opportunity open to
us and of the Group's growth potential.
Over the medium-term, revenue growth will be driven from our
existing strategic partners, the addition of new partners and the
growth of our public sector pipeline utilising the new Secure
O-Cloud. This will be supported by additional mid-market direct
business, driven in particular by hybrid solutions integrated into
Microsoft's platforms such as Office365.
Central government cloud opportunity - on track
The Group's public sector opportunity is significant, as
government transitions to Cloud-based services instead of large and
complex managed services. The UK government has introduced a Public
Cloud First Policy mandate, which means that departments are now
mandated to consider public Cloud before any other option when
looking at IT procurement. Coupled with an increased propensity to
involve UK SMEs in the delivery of government services and a stated
target to involve SMEs in 50 per cent. of all new ICT contracts
secured, these factors position us well to capitalise on this
opportunity.
Microsoft's global platforms such as Azure or Office365 are
"Official" accredited, but they are not hosted in the UK, thereby
falling below certain security requirements for UK central
government departments. As such, Outsourcery's Secure O-Cloud
platform is unique to the UK market and will provide
infrastructure-as-a-service, applications including Exchange
Server, SharePoint and Dynamics CRM and Lync Server based unified
communications with full voice capability. Deployment remains on
track for completion and accreditation before the end of 2014, and
go-to-market activities have already commenced with a view to
securing initial revenues from the platform in Q1 2015.
Outlook
The Group's monthly recurring revenue growth has suffered from
delays in the go-to-market plans of a number of partners during the
first half, but results are expected to improve during the second
half and during the course of 2015. The Group has also taken action
to proactively align its cost base to maintain the high operational
leverage. This is expected to produce annualised cost savings of
c.GBP1.0m from the next financial year.
The slower than expected ramp up has also impacted non-recurring
design, deploy and migration revenue, which typically precedes
recurring revenue. However, the outlook for revenue growth has
improved, due to a strong pipeline of large enterprise and
mid-market end-customers, through both direct sales and strategic
partnerships. This, combined with a strategic realignment and
reorganisation to reduce costs, is expected to result in the Group
becoming EBITDA positive on a monthly basis by the end of 2015 and
operational positive cash flow in the same time frame.
Financial Review
In the first half of the year, the Group recorded revenue of
GBP3.4 million (2013: GBP2.1 million) and a gross margin of 43%
(2013: 37%), despite no contribution from key strategic partners in
H1.
Administrative expenses (excluding restructuring costs, employee
share based payment costs and listing fees) of GBP4.8 million
(2013: GBP4.0 million) were below budget. Adjusted EBITDA showed a
loss of GBP2.8 million (2013: loss of GBP2.7 million).
The Group's underlying pre-tax loss was GBP3.6 million (2013:
loss of GBP4.1 million) and loss per share for the half year was
10.3p (2013: loss of 20.2p).
Gross cash as at 30 June 2013 was GBP1.3 million (2013: GBP7.3
million).
On 14 August the Group announced a GBP4.5 million financing
package to address the cash requirements of the Group and to
support the execution of its stated strategy. This package
comprised GBP1.0 million of cost savings through an organisational
restructuring; a salary sacrifice by the Co-CEOs to create a cash
benefit to the Company of GBP0.5 million; agreement with the
Group's debt providers to reschedule debt service to generate free
cash flow of GBP1.5 million; and a placing of new Ordinary Shares
in the Company to raise GBP1.5 million in which the Co-CEOs and
non-executive directors invested GBP0.5 million. A placing of
7,682,500 Ordinary Shares to raise GBP1.5 million (net of expenses)
was completed on 1 September.
Taken together, these measures have stabilised and simplified
the Group's cost base, with the potential for significant
operational leverage as revenue volumes grow. The Directors believe
that this financing package will enable Outsourcery to achieve its
aim of reaching monthly run rate break-even and operational
positive cash flow during 2015.
Consolidated income statement
For the six months ended 30 June 2014
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
Notes 2014 2013 2013
GBP'000 GBP'000 GBP'000
Revenue 3,447 2,092 5,226
Cost of sales (1,975) (1,318) (3,329)
---------- ---------- ------------
Gross profit 1,472 774 1,897
---------- ---------- ------------
Administrative expenses (5,056) (4,617) (10,604)
---------- ---------- ------------
Operating loss (3,584) (3,843) (8,707)
EBITDA* (2,782) (2,746) (6,935)
Amortisation and depreciation (560) (473) (1,022)
Exceptional restructuring costs (168) (130) (230)
Fees associated with listing (3) (494) (495)
Employee Share based payment (71) - (25)
---------- ---------- ------------
Operating loss (3,584) (3,843) (8,707)
------------------------------------------------------------ ---------- ---------- ------------
Interest received 4 - -
Finance costs (235) (844) (590)
---------- ---------- ------------
Loss before tax (3,815) (4,687) (9,297)
Taxation - - -
---------- ---------- ------------
Loss for period from continuing
operations (3,815) (4,687) (9,297)
Profit for the period from discontinued
operations - 98 172
Loss for period and total comprehensive
income (all attributable to equity
holders of the parent) (3,815) (4,589) (9,125)
========== ========== ============
Underlying loss per share 5 Pence Pence Pence
Basic loss per share
* Loss from continuing operations (10.33) (20.20) (33.19)
* Earnings from discontinued operations - 0.49 0.67
---------- ---------- ------------
* Total (10.33) (19.72) (32.53)
========== ========== ============
*EBITDA is defined as earnings before finance costs, tax,
depreciation and amortisation, reorganisation costs, employee share
based payment costs and fees associated with listing and is
considered by the Directors to be a key measure of financial
performance
Consolidated statement of comprehensive income
For the six months ended 30 June 2014
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
Notes 2014 2013 2013
GBP'000 GBP'000 GBP'000
Loss and other comprehensive income
for the period (3,815) (4,589) (9,125)
Comprehensive loss attributable
to:
Equity holder of the parent (3,815) (4,589) (9,125)
========== ========== ============
Consolidated statement of changes in equity
For the six months ended 30 June 2014
Merger
Share Share Retained Accounting Total
Capital Premium Losses Reserve Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 January 2013 173 - (12,659) 4,768 (7,718)
Issue of share capital 135 14,307 - - 14,442
Share issue expenses - (561) - - (561)
Merger accounting adjustment - - - 2,977 2,977
-------- -------- --------- ----------- --------
Transactions with owners 135 13,746 - 2,977 16,858
Loss for the period - - (4,589) - (4,589)
Balance at 30 June 2013 308 13,746 (17,248) 7,745 4,550
======== ======== ========= =========== ========
Issue of share capital 38 4,163 - - 4,201
Employee share-based payment
options - - 25 - 25
Share issue expenses - (236) - - (236)
Transactions with owners 38 3,927 25 - 3,990
Loss for the period - - (4,536) - (4,536)
Balance at 31 December 2013 346 17,673 (21,759) 7,745 4,005
==== ======= ========= ====== ========
Employee share-based payment
options - - 72 - 72
---- ------- --------- ------ --------
Transactions with owners - - 72 - 72
Loss for the period - - (3,815) - (3,815)
Balance at 30 June 2014 346 17,673 (25,503) 7,745 261
==== ======= ========= ====== ========
Consolidated statement of financial position
As at 30 June 2014
Unaudited Unaudited Audited
As at As at As at
30 June 30 June 31 December
Notes 2014 2013 2013
GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment 2,848 1,600 2,042
---------- ---------- ------------
Total non-current assets 2,848 1,600 2,042
---------- ---------- ------------
Current assets
Trade and other receivables 2,680 1,553 2,182
Cash and cash equivalents 1,323 7,282 6,331
---------- ---------- ------------
Total current assets 4,003 8,835 8,513
---------- ---------- ------------
Assets included in disposal group
classified as held for sale - 186 35
---------- ---------- ------------
Total assets 6,851 10,621 10,590
========== ========== ============
Equity and liabilities
Share capital 4 346 308 346
Share premium 17,673 13,746 17,673
Merger accounting reserve 7,745 7,744 7,745
Retained losses (25,503) (17,248) (21,759)
---------- ---------- ------------
Equity attributable to owners of
the parent and total equity 261 4,550 4,005
========== ========== ============
Liabilities
Non-current liabilities
Borrowings 6 2,797 2,822 2,975
---------- ---------- ------------
Total non-current liabilities 2,797 2,822 2,975
---------- ---------- ------------
Current liabilities
Trade and other payables 1,934 1,912 2,342
Borrowings 6 1,859 1,213 1,234
---------- ---------- ------------
Total current liabilities 3,793 3,125 3,576
---------- ---------- ------------
Liabilities included in disposal
group classified as held for sale - 124 34
---------- ---------- ------------
Total liabilities 6,590 6,071 6,585
========== ========== ============
Total equity and liabilities 6,851 10,621 10,590
========== ========== ============
Consolidated statement of cash flows
For the six months ended 30 June 2014
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2014 2013 2013
GBP'000 GBP'000 GBP'000
Operating activities from continuing
operations
Loss for the period (3,815) (4,687) (9,297)
Finance costs 165 494 590
Gain on extinguishing financial
liabilities - - (42)
Listing fees 3 - 495
Depreciation and amortisation 560 473 1,022
Employee share based payment costs 72 - 31
Net changes in working capital (906) (3,435) (1,876)
---------- ---------- ------------
Net cash flow used in continuing
operations (3,921) (7,155) (9,077)
Net cash (used in) / from discontinued
operations - (118) 236
---------- ---------- ------------
Net cash used in operating activities (3,921) (7,273) (8,841)
---------- ---------- ------------
Investing activities
Purchase of property, plant and
equipment (42) (167) (251)
Proceeds from sale of business,
net of cash disposed - - 185
---------- ---------- ------------
Net cash flow from investing activities (42) (167) (66)
---------- ---------- ------------
Financing activities
Finance lease capital repayments (389) (146) (470)
Proceeds from issue of share capital - 14,314 17,718
Proceeds from other borrowings (19) - -
Repayments of other borrowings (469) - (1,311)
Listing fees (3) - (495)
Interest and finance lease charges
paid (165) 314 (444)
---------- ---------- ------------
Net cash flow from financing activities (1,045) 14,482 14,998
---------- ---------- ------------
Net (decrease)/increase in cash
and cash equivalents in the period (5,008) 7,042 6,091
Cash and cash equivalents at start
of period 6,331 240 240
---------- ---------- ------------
Cash and cash equivalents at end
of period 1,323 7,282 6,331
========== ========== ============
Notes to the interim report
1. General information
Outsourcery plc (AIM: OUT; "Outsourcery"; the "Company";
together with its subsidiary undertakings, the "Group"), is a
leading provider of cloud-based IT and unified communications
services. Outsourcery plc is the Group's ultimate parent company.
The Company is incorporated in England and Wales and domiciled
within the United Kingdom. The address of the Company's registered
office is 10 Whitfield Street, London W1T 2RE. The address of the
Group's head office is 1 The Avenue, Spinningfields, Manchester M3
3AP. The Company's shares are listed on the Alternative Investment
Market of the London Stock Exchange.
Outsourcery's consolidated financial statements are presented in
Pounds Sterling (GBP), which is also the functional currency of the
parent company.
These consolidated interim financial statements were approved
for issue by the Board of Directors on 24 September 2014.
2. Basis of preparation
The Group's interim consolidated unaudited financial statements
are for the six months ended 30 June 2014 and have been prepared in
accordance with the recognition and measurement principles of
International Financial Reporting Standards ("IFRS"). They have not
been prepared in accordance with IA34 'Interim Financial
Reporting'. These statements have not been reviewed or audited by
the Group's auditors.
The figures for 31 December 2013 are an abridged version of the
Group's full financial statements (subject to first time adoption
of International Financial Reporting Standards) and together with
other financial information contained in this interim report which
is unaudited, do not constitute statutory financial statements of
the Group as defined in Section 434 of the Companies Act 2006.
Statutory financial statements for the year ended 31 December 2013
have been filed with the Registrar of Companies for England and
Wales and have been reported on by the Group's auditors. The report
of the auditors was unqualified and did not contain a statement
under section 498 (2) or Section 498 (3) of the Companies Act
2006.
These interim consolidated unaudited financial statements have
been prepared in accordance with the accounting policies set out in
the Group's full audited financial statements for the year ended 31
December 2013. The accounting policies have been applied
consistently throughout the Group.
Going concern
Following the Company's placing in September 2014, the Group has
sufficient financial resources. The funding package made available
to address the cash requirements totalled GBP4.5 million. This
package comprised GBP1.0 million of cost savings through an
organisational restructuring; a salary sacrifice by the Co-CEOs to
create a cash benefit to the Company of GBP0.5 million; agreement
with the Group's debt providers to reschedule debt service to
generate free cash flow of GBP1.5 million; and a placing of new
Ordinary Shares in the Company to raise GBP1.5 million (net of
expenses) in which the Co-CEOs and non-executive directors invested
GBP0.5 million. The placing of 7,682,500 Ordinary Shares was
completed on 1 September 2014.
As a consequence, the Directors believe that the Group is well
placed to manage its business risks successfully. The Directors
have also prepared cash flow forecasts for the period until
December 2015. As part of the preparation of these forecasts, the
Directors have estimated the likely conversion of potential future
business. Based on these forecasts, the Directors have confirmed
that there are sufficient cash reserves to fund the business for
the period under review. After reviewing these forecasts,
consideration of the Group's cash resources and other appropriate
enquiries, the Directors have a reasonable expectation that the
Company and Group have adequate resources to continue in
operational existence for the foreseeable future. For this reason
they continue to adopt the going concern basis in preparing the
interim statements.
3. Business segments
The Group's Executive Board is considered to be the Chief
Operating Decision Maker ("CODM").
For management purposes, the Group's Executive Board focuses on
the following operating segments and financial information provided
to CODM is under the same measurement basis as the Group financial
statements.
Cloud
Mobile (discontinued operations)
Each of these operating segments is managed separately by the
Group's CODM and operating decisions are made on the basis of the
operating results. Going forward the Group will only have one
operating segment - Cloud.
Revenue for each of the periods shown is all derived in the
United Kingdom. Any administrative staff expense costs incurred in
the consulting and mobile operations would be negligible. All
consultancy staff related costs are included in the segment cost of
sales charges for the six months ended 30 June 2014, six months
ended 30 June 2013 and twelve months ended 31 December 2013.
Operating segment information for each of the periods above is
as follows:
6months ended 30 June 2014
Total Mobile
Continuing (Discontinued
Cloud Operations Operations) Total
GBP'000 GBP'000 GBP'000 GBP'000
Revenue
From external customers 3,447 3,447 - 3,447
-------- ----------- -------------- --------
Segment revenue 3,447 3,447 - 3,447
-------- ----------- -------------- --------
Cost of sales
From external customers (1,975) (1,975) - (1,975)
-------- ----------- -------------- --------
Segment cost of sales (1,975) (1,975) - (1,975)
-------- ----------- -------------- --------
Gross profit
From external customers 1,472 1,472 - 1,472
-------- ----------- -------------- --------
Segment profit 1,472 1,472 - 1,472
-------- ----------- -------------- --------
Administrative expenses
Staff (2,988) (2,988) - (2,988)
Depreciation and amortisation (560) (560) - (560)
Other (1,508) (1,508) - (1,508)
-------- ----------- -------------- --------
Segment administrative expenses (5,056) (5,056) - (5,056)
EBITDA (2,782) (2,782) - (2,782)
--------------------------------- -------- ----------- -------------- --------
Operating loss (3,584) (3,584) - (3,584)
-------- ----------- -------------- --------
Net interest (231) (231) - (231)
-------- ----------- -------------- --------
Loss before and after tax (3,815) (3,815) - (3,815)
-------- ----------- -------------- --------
Segment assets 6,851 6,851 - 6,851
-------- ----------- -------------- --------
Segment liabilities 6,590 6,590 - 6,590
-------- ----------- -------------- --------
6months ended 30 June 2013
Total Mobile
Continuing (Discontinued
Cloud Operations Operations) Total
GBP'000 GBP'000 GBP'000 GBP'000
Revenue
From external customers 2,092 2,092 402 2,494
-------- ----------- -------------- --------
Segment revenue 2,092 2,092 402 2,494
-------- ----------- -------------- --------
Cost of sales
From external customers (1,318) (1,318) (304) (1,622)
-------- ----------- -------------- --------
Segment cost of sales (1,318) (1,318) (304) (1,622)
-------- ----------- -------------- --------
Gross profit
From external customers 774 774 98 872
-------- ----------- -------------- --------
Segment profit 774 774 98 872
-------- ----------- -------------- --------
Administrative expenses
Staff (3,023) (3,023) - (3,023)
Depreciation and amortisation (473) (473) - (473)
Other (1,121) (1,121) - (1,121)
-------- ----------- -------------- --------
Segment administrative expenses (4,617) (4,617) - (4,617)
-------- ----------- -------------- --------
EBITDA (2,746) (2,746) - (2,746)
--------------------------------- -------- ----------- -------------- --------
Operating profit / (loss) (3,843) (3,843) 98 (3,745)
-------- ----------- -------------- --------
Net interest (844) (844) - (844)
-------- ----------- -------------- --------
Profit / (loss) before and
after tax (4,687) (4,687) 98 (4,589)
-------- ----------- -------------- --------
Segment assets 10,435 10,435 186 10,621
-------- ----------- -------------- --------
Segment liabilities (5,947) (5,947) (124) (6,071)
-------- ----------- -------------- --------
12 months ended 31 December 2013
Total Mobile
Continuing (Discontinued)
Cloud operations Operations Total
GBP'000 GBP'000 GBP'000 GBP'000
Revenue
From external customers 5,226 5,226 667 5,893
Segment revenues 5,226 5,226 667 5,893
--------- ------------ --------------- ---------
Cost of sales
From external customers (3,329) (3,329) (548) (3,877)
Segment COS (3,329) (3,329) (548) (3,877)
--------- ------------ --------------- ---------
Gross margin
From external customers 1,897 1,897 119 2,016
Segment margin 1,897 1,897 119 2,016
--------- ------------ --------------- ---------
Administrative expenses
Staff (6,288) (6,288) - (6,288)
Depreciation and amortisation (1,022) (1,022) - (1,022)
Other (2,799) (2,799) 53 (2,746)
Segment administrative
expenses (10,109) (10,109) 53 (10,056)
--------- ------------ --------------- ---------
Fees Associated with
listing (495) (495) - (495)
--------- ------------ --------------- ---------
EBITDA (6,935) (6,935) - (6,935)
------------------------------- --------- ------------ --------------- ---------
Operating profit/ (loss) (8,707) (8,707) 172 (8,535)
--------- ------------ --------------- ---------
Finance costs (590) (590) - (590)
Profit / loss before
tax (9,297) (9,297) 172 (9,125)
--------- ------------ --------------- ---------
Segment assets 10,555 10,555 35 10,590
--------- ------------ --------------- ---------
Segment liabilities (6,551) (6,551) (34) (6,585)
--------- ------------ --------------- ---------
4. Share Capital
6 months ended 30 June 2014
Ordinary shares of GBP0.01 each
Number GBP
At 1 January 2014 34,581,458 345,815
At 30 June 2014 34,581,458 345,815
============ =========
6 months ended 30 June 2013
Ordinary shares of GBP0.01 each
Number GBP
At 1 January 2013 - -
Shares issued pursuant to share for share exchange
to acquire Outsourcery Group Limited 17,334,900 173,349
Shares issued upon exercise of options 599,300 5,993
Shares issued pursuant to anti-dilution rights 79,800 798
Shares issued pursuant to conversion of borrowings
(note 6) 2,817,458 28,175
Share issue upon admission to AIM 10,000,000 100,000
------------ ---------
At 30 June 2013 30,831,458 308,315
============ =========
12 months ended 31 December 2013
Ordinary shares of GBP0.01 each
Number GBP
At 1 January 2013 - -
Shares issued pursuant to share for share exchange
to acquire Outsourcery Group Limited 17,334,900 173,349
Shares issued upon exercise of options 599,300 5,993
Shares issued pursuant to anti-dilution rights 79,800 798
Shares issued pursuant to conversion of borrowings 2,817,458 28,175
Share issue upon admission to AIM 10,000,000 100,000
Share issue pursuant to IL3 placing 3,750,000 37,500
------------ ---------
34,581,458 345,815
============ =========
5. (Loss) / earnings per share
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 Dec
2014 2013 2013
GBP'000 GBP'000 GBP'000
Loss for the period attributable to
equity holders of the parent (3,815) (4,687) (9,297)
Adjustments to basic earnings
Fees associated with listing 3 494 495
Restructuring costs 168 130 230
Share-based payment charge 71 - 25
----------- ----------- -----------
Underlying loss for the period (3,573) (4,063) (8,547)
=========== =========== ===========
Continuing operations
Loss for the period attributable to
equity holders of the parent (3,815) (4,687) (9,297)
Discontinued operations
Loss for the period attributable to
equity holders of the parent - 98 172
Total operations
Loss for the period attributable to
equity holders of the parent (3,815) (4,589) (9,125)
Number Number Number
Weighted average number of shares used
in basic earnings per share 34,581,458 20,109,192 25,749,245
Shares deemed to be issued for no consideration
in respect of share-based payments - - -
----------- ----------- -----------
Weighted average number of shares used
in diluted earnings per share 34,581,458 20,109,192 25,749,245
=========== =========== ===========
Pence Pence Pence
Underlying (Loss) / earnings per
share*
Basic and diluted (loss)/earnings
per share
* Loss from continuing operations (10.33) (20.20) (33.19)
* Earnings from discontinued operations - 0.49 0.67
----------- ----------- -----------
* Total (10.33) (19.72) (32.53)
=========== =========== ===========
*Underlying losses per share has been disclosed to give a clear
understanding of the Group's underlying trading performance. It has
been calculated using the underlying earnings figures above and the
weighted average number of ordinary shares above.
6. Analysis of borrowings
Unaudited Unaudited Audited
As at As at As at
30 June 30 June 31 December
Notes 2014 2013 2013
GBP'000 GBP'000 GBP'000
Current
Boost loan stock 1 1,083 971 942
Property mortgage 2 37 37 37
Finance leases 739 205 255
1,859 1,213 1,234
Non-current
Boost loan stock 1 752 1,918 1,428
Etive loan stock 3 736 501 670
Property mortgage 2 262 299 281
Finance leases 1,047 104 596
---------- ---------- ------------
2,797 2,822 2,975
Total borrowings 4,656 4,035 4,209
========== ========== ============
Notes to the analysis of borrowings
1. The Boost loan stock bears interest at 12.5%. This loan has
an original tenure to March 2016.
2. The property mortgage bears interest at 10% and is expected
to be repaid in full in July 2015.
3. The Etive loan bears no interest. This is expected to be repaid in full in May 2016.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LJMLTMBJTBTI
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