TIDMOUT
RNS Number : 7803I
Outsourcery PLC
30 March 2015
30 March 2015
Outsourcery plc
("Outsourcery" or the "Company")
Preliminary Results for the Year Ended 31 December 2014
- Recurring revenue up 73% to GBP7.1m -
- Annualised recurring revenue of GBP8.4m at current exit run
rate -
- 42% year-on-year revenue growth -
Outsourcery (AIM: OUT), a leading Cloud Service Provider ("CSP")
offering Cloud-based IT and unified communications solutions for
the commercial and public sectors, reports preliminary results for
the financial year ended 31 December 2014.
The results demonstrate a year of strong growth for Outsourcery,
with recurring revenues increasing 73% as demand rises and our
service offering and capability develops. The 36% improvement in
adjusted EBITDA was driven by the increase in revenue and a
reduction in operating costs of GBP1.0 million following an
organisational restructure. This trajectory clearly highlights the
inherent operational gearing of the business and underpins the
Board's confidence in the growth prospects for the Company and its
path to profitability.
Financial Metrics
31 December 31 December
2014 2013
-------------------------------- ------------- ------------
Group Revenue GBP7.4m GBP5.2m
- recurring revenue GBP7.1m GBP4.1m
- non-recurring revenue GBP0.3m GBP1.1m
-------------------------------- ------------- ------------
Exit rate Monthly Recurring
Revenue ("MRR") GBP0.7m GBP0.6m
Annualised exit rate Recurring
Revenue ("ARR") GBP8.4m GBP7.0m
Adjusted EBITDA * (GBP4.6m) (GBP7.2m)
Adjusted (loss) from continuing
operations ** (GBP6.3m) (GBP8.8m)
Adjusted (loss) per share (34.1
*** (16.4 pence) pence)
Gross Cash GBP2.5m GBP6.3m
Notes
* Adjusted EBITDA is calculated as reported loss from continuing
operations, before fees associated with listing, exceptional
restructuring costs, the employee share based payment charge,
finance costs, taxation, depreciation and amortisation and is
considered by the Directors to be a key measure of financial
performance.
** Adjusted (loss) from continuing operations is calculated as
reported loss from continuing operations, before fees associated
with listing, exceptional restructuring costs and the employee
share based payment charge and is considered by the Directors to be
a key measure of financial performance.
*** Adjusted (loss) per share is calculated using the adjusted
loss from continuing operations above and the weighted average
number of ordinary shares in issue in each of the relevant periods.
This has been disclosed to give a clear understanding of the
Group's underlying trading performance
Operational Highlights
-- New orders won for over 60,000 end-users within three FTSE 100 companies and NHS
-- First G Cloud procurement framework deal won with NHS (post period-end)
-- Significant public sector opportunity unlocked following Pan
Government Accreditation (PGA) of O-Cloud platform and new Assured
O-Cloud platform (formerly IL3)
-- Strategic partners now generating significant sales pipeline
-- Go to market strategy rebalanced to reflect development of
partner and direct sales channels
-- Microsoft relationship extended to include the Microsoft
Cloud Solution Provider Programme to provide Office 365 direct
billing and support
-- Refinanced and restructured in response to operational and market dynamics
Commenting on the results Piers Linney, Co-Chief Executive of
Outsourcery commented:
"Recurring revenues, which represent 96% of total revenues,
increased by 73%. This demonstrates a year of strong growth for
Outsourcery.
Outsourcery's approach to converged IT and communications is
both unique and compelling - for example, we are now the only UK
provider of PGA Official accredited Cloud-based Microsoft Lync
unified communication and collaboration services. Outsourcery
continues to gain widespread recognition in the industry as we and
our partners have demonstrated that we can win high profile
customers in competitive processes.
Our commercial and public sector sales pipelines are growing. In
the year ahead we will focus on ensuring that we maintain our
competitive advantage as well as embracing exciting new
opportunities such as the launch of our carrier-grade Skype for
Business service.
Following a tough year during which we restructured our cost
base, operations and go to market strategy, we have started the new
year in a strong competitive position.
The Board remains confident that the business has a clear path
to profitability."
For further information please contact:
Outsourcery plc +44 (0) 330 313 0077
Piers Linney, Co-Chief Executive Officer
Simon Newton, Co-Chief Executive Officer
www.outsourcery.co.uk/investors
Investec +44 (0) 20 7597 5100
Andrew Pinder / Patrick Robb
Dominic Emery / Carlton Nelson
FTI Consulting, LLP +44 (0) 20 3727 1137
Matt Dixon / Rob Mindell
About Outsourcery
Outsourcery is a world-leading UK-based Cloud Services Provider
("CSP"), which aims to remove the need for organisations to own and
manage on-premises IT, unified communications and conferencing
applications and infrastructure.
Outsourcery offers hosted software applications
(software-as-a-service), cloud infrastructure
(infrastructure-as-a-service) and next generation unified
communications and collaboration solutions, as well as connectivity
and professional services to tailor and fully integrate solutions
to meet the needs of customers, partners and the UK public sector
alike.
Outsourcery's O-Cloud platform has been certified to run
government classified information at 'Official' and 'Official
sensitive' over the internet. This gives Outsourcery CESG Pan
Government Accreditation ("PGA") (formerly IL2) to meet data
sovereignty and security specifications for the public sector.
Outsourcery was the first company outside of the US to be named
Microsoft's worldwide 'Hosting Solutions Partner of the Year' and
also the UK's first certified carbon neutral CSP. The business was
named HP's Most Innovative Service Award 2013 and the UK Cloud
Awards' Collaboration Product of the Year 2014.
Outsourcery has 110 employees, with offices in Manchester,
London and Leicester.
(www.outsourcery.co.uk/investors)
Chairman's Statement
When I penned my Chairman's Statement this time last year, I
shared my thoughts around where we were as a Company - and where I
thought we might head. Those were early days for Outsourcery and I
stated as much. I felt we had a significant opportunity ahead of
us, that we were one step ahead of others in the market, but that
we had much to prove and to learn.
As I sit down to write the same statement this year, 'proving
and learning' feels a very apt way to sum up the past twelve
months. I am more convinced the opportunity ahead is a compelling
one. The team has chalked up a number of impressive achievements,
from partnership building, to brand building and early sales
execution. Each of these achievements supports my belief and my
optimism. On behalf of the Board I wish to thank every member of
the Outsourcery team for the energy and commitment shown to
bringing them about.
Some very important foundations for the future were laid down in
2014. The most important thing we have proven is our ability to
win, particularly at the highest level of UK plc. Twelve months
ago, we could claim one FTSE 100 firm among our customer base.
Today, we can proudly say that it won't be long until nearly 60,000
individual end-users within three FTSE 100 firms will be reliant on
Outsourcery's services. This is a tremendous achievement for a
young firm like ours. It proves beyond question the increasing
appeal of the Cloud, the relevance of our offer and the value of
the partnerships we have forged. This year has seen us prove
ourselves in other areas too - be that proving our ability to
deliver on complex technology products with our O-Cloud Pan
Government Accreditation, or our ability to partner with the
world's largest firms as evidenced by our acceptance onto
Microsoft's flagship Cloud Service Provider and Cloud OS Network
programmes.
Proof points are one thing. Learnings are equally important.
This year we learned a great deal about how best to support our
partners as they themselves learn how to 'sell' the Cloud. We have
also learned that, in part, our own goals for the year were too
ambitious in a young market. That does not make them the wrong
goals, but we have required additional funding in order to reach
them. This, with the support of new and existing shareholders, we
have done.
I would like to thank our shareholders for their commitment.
Like me, they can see Outsourcery's potential for material value
creation. It is my experience that the quantum shift to the Cloud
is the sort of transformation that comes only once a decade in the
IT world - but the impact of this change will be felt for many
years to come. It is telling that this game changer isn't being led
by large, established businesses alone. Ambitious growth companies
like ours are also playing a key role. Yet, as a Director of
companies of both persuasion, it seems that the bar is increasingly
set far higher for the 'David' than the 'Goliath' when it comes to
measuring progress.
Viewing a growth company through the same lens as an established
firm is a mistake all too often made. I do not advocate a 'free
ride' for Britain's smaller public companies. Uncritical
forgiveness, lower standards and diminished aspirations are not
helpful to investor or entrepreneur. But we do need to think
differently about how we measure the progress of firms just
starting out on their growth journeys. As investors with personal
experience as entrepreneurs can attest, young companies,
particularly in the technology space, often find it hard to
accurately forecast their growth paths. This does not make them
poor prospects. Rather, it requires a different approach to
measuring and assessing their progress. It means thinking about
qualitative ways of analysing a company's progress and valuing
those alongside - even sometimes above - quantitative ones. In
addition it means acknowledging a company's effectiveness in
tackling anticipated and unanticipated risks and impediments along
its growth journey rather than considering the absence of a smooth
trajectory as a heinous example of failure.
At Outsourcery, we are now looking ahead to the next twelve
months. In my mind, the task before us is clear. First, we need to
ensure that we maintain the market lead we have built. Second, we
need to translate the early wins we have seen this year into
accretive recurring revenues, both through staying close to our
partners and by targeting certain opportunities directly where we
feel we are well placed to do so. Third, we need to ensure that the
potential of assets such as Assured O-Cloud and involvement in
Microsoft's Cloud Service Provider and Cloud OS Network programmes
are keenly pursued. Our collective energy will be focused on those
three tasks as 2015 unfolds and we pursue our objective of wealth
creation.
Ken Olisa, OBE
Strategic and Financial Review
Building out our financial base
We have made strong progress this year on many fronts, including
strong revenue growth, high profile new business wins in
competitive processes, significantly narrowing losses and
development of new platforms and services. This year our strategy
was to focus resources on clear revenue opportunities to generate
material recurring revenue as demand for Cloud services from both
the commercial and public sectors grew and activity with our
strategic channel partners began to ramp. Today's results show
progress on that objective - we are growing our business and our
pipeline of opportunities continues to strengthen as we prove our
capabilities and market leading position.
After unanticipated delays that impacted revenue growth, our
large strategic partners have now launched and we are already
seeing the benefits. We are also working to develop run-rate
business from mid-market firms alongside large enterprise wins.
During the year and going into 2015, we have rebalanced our go to
market strategy. We have focused our resources on a more limited
number of committed partners as well as mid-market and enterprise
direct sales. For our new Assured O-Cloud platform we are initially
focused on direct sales with our partners such as Microsoft,
although several existing and new partners have expressed an
interest in reselling our services and we expect to bring them
online during 2015.
Proving our ability to win
The results today serve as evidence that we are on the right
path and our strategy of focusing on the delivery of services based
on Microsoft technologies is working. Three FTSE 100 companies and
60,000 end-users will be reliant on Outsourcery's services and the
number of users of these services is expected to grow further in
2015 and new services are expected to be added. Since activating
initiatives with a number of strategic channel partners our
pipeline of opportunities has continued to grow. Our partners are
actively selling our portfolio of solutions, driving the conversion
of material enterprise opportunities and reinforcing our position
as a market leader.
Outsourcery continues to prove its capability and credibility by
winning high profile new business in competitive processes against
very well-established and in some cases very large managed services
providers and systems integrators.
Our most recent FTSE 100 contract win in December, was again
delivered by a key channel partner and was the first end-customer
to require Outsourcery's Pan Government accreditation for the
O-Cloud. The deal not only proves that our partner strategy is
working but also that the government accreditation is a material
point of differentiation in the market place for large, high
quality companies. Importantly, the deal is expected to deliver
GBP1.1 million of revenue and GBP30,869 average monthly recurring
revenue (MRR) over the initial three-year period.
This time last year we spoke about how these channel
partnerships could be a compelling real route to revenue. Although
we have rebalanced our channel and direct sales and marketing
activities to take account for the realities of the market, over
the past twelve months we have proved that assertion to be correct
and we are seeing material revenue returns from these engagements.
Whilst we are proud of the progress the Company has made in
converting these larger end-customers, we have also continued to
make progress selling to small and medium-sized enterprises
("SME"). These developments prove that the market is opening up and
there is appetite from businesses of all sizes to transition to a
Cloud model.
Extending our partnership ecosystem
Outsourcery's strategy has relied on the activation of reseller
partners to drive revenue growth from a select number of large
strategic and mid-market partners. In the year gone by we continued
to make efforts to extend and deepen these partnership
relationships and in January, following a rigorous evaluation of
our offering, we were pleased to announce that we formally entered
in to a strategic partnership agreement with Vodafone. The scope of
this agreement was subsequently increased to include Vodafone's
entire global enterprise customer base. While these relationships
took longer than anticipated to ramp-up, the revenue progression in
the second half of the year serves to validate this strategy.
To that end, we also announced our participation in the
Microsoft Cloud Solution Provider Programme which has only been
made available to a limited number of Microsoft partners. This
allows Outsourcery to provide direct billing, sell combined offers
and services as well as provision, manage and support Microsoft
Cloud offerings, such as Office 365. The deal enables us to further
integrate Office 365 with our own offering, expand Cloud sales
opportunities and completely own the customer management lifecycle.
The deal serves as another example of the strength of our
partnership relationships and the opportunities they can bring.
Although we are extending our partner programme, we are focused
on those partners that are committed to selling Cloud services,
which requires investment in people, systems and processes.
Industry research from, for example, the Cloud Industry Forum
demonstrates that demand for Cloud services from business customers
is beginning to outstrip the incumbent channel's ability to supply
such services and many are not engaging in the conversation about
the benefits of Cloud services with their customers despite rising
awareness amongst business managers and owners. As a result our
strategy is very much one of quality and not quantity. We intend to
extend the programme for the public sector and resale of our
Assured O-Cloud services to central government.
Advancing our platform
The strength of our platform is now being recognised and we made
major steps in cementing our market leading position and widening
the sphere of sales possibilities. Most notably we were pleased to
announce that the Outsourcery O-Cloud platform has gained
"OFFICIAL" Pan Government Accreditation (PGA). This means that our
platform now meets public sector security requirements to run
government classified information over the internet. This
accreditation opens opportunities within public sector
organisations - such as local authorities, government bodies and
'blue-light' emergency services - and these organisations will be
able to procure Outsourcery's services on the Government's Digital
Marketplace. The potential within this market is significant and
the accreditation follows the UK Government's introduction of a
Public Cloud First Policy mandating government departments to
consider Cloud and SME procurement before any other option when
looking at IT needs.
We are already seeing the benefits of this accreditation coming
through and post-period end, we were pleased to announce that
Berkshire Healthcare NHS foundation Trust chose Outsourcery - via
the G-Cloud framework - to deliver its Microsoft Lync (to be
rebranded "Skype for Business") Software-as-a-Service ("SaaS")
solution which will be delivered from Outsourcery's O-Cloud PGA
OFFICIAL Internet Platform. This was our first win via the G-Cloud
and gives us confidence that the procurement framework and
government accreditation will create significant opportunity within
the Public Sector over the coming year.
Underpinning our capital structure
In August, the Group raised GBP4.5 million of working capital
through a financial package which comprised of the following:
-- Reduced annualised costs by GBP1.0 million through organisational restructure;
-- Co-Chief Executive Officers' salary sacrifice, creating 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
-- Placing of new Ordinary Shares in the Company to raise GBP1.5 million (net).
The aim of the package was to address the Group's cash
requirements and deliver on our stated strategy. This raise was in
light of a longer than anticipated build of the strategic partner
channel at the start of the year which had an impact on the Group's
MRR and consequently pushed out the Group's monthly cash-flow
break-even point. We outlined at the time that we intended to use
the cash to activate new partners and drive significant revenue
momentum throughout the rest of the year. Our financial progress in
the second half of the year is evidence that was the correct
decision to make and gives us confidence for our progress over the
coming year.
Pleasingly, that confidence in the Group's potential for growth
was shared by Encore, who we welcomed to our shareholder register.
Encore has a strong track record of recognising and working
collaboratively to grow high potential businesses and in October
they elected to invest GBP1.0 million in Outsourcery via the
purchase of new Ordinary Shares in the Company. This investment
supported the financial package and gave us greater options to
pursue and accelerate growth, particularly in the mid-market
segment and with enterprise customers.
Strategy and Outlook
We are entering the year with a very clear and focused strategy
and are in a strong position as interest in the Cloud builds and
our partner relationships begin to pay off. Over the medium-term,
the Company expects revenue growth to be driven by our existing
strategic partners, the addition of a more limited number of
focused new partners and the growth of our public sector pipeline
utilising the new Assured O-Cloud. This will be supported by more
mid-market direct business, driven in particular by hybrid
solutions integrated into Microsoft's platforms such as
Office365.
Over the year ahead we will focus on ensuring that we maintain
the market lead we have built as well as translating the early wins
we have seen this year into monthly recurring revenues as users and
workloads are migrated to our platforms. We also need to ensure
that the potential of our listing of our key services on the
G-Cloud and Microsoft's Cloud Service Provider and Cloud OS Network
programmes are keenly targeted through our direct channels.
Whilst there is always more work to be done, we have made
significant progress this year and expect revenue to continue to
grow steadily throughout 2015. Our pipeline, particularly with our
largest partners, is strong and the Board remains confident that
the business has a clear path to profitability.
Financial Review
Income Statement
Total revenue has grown this year by 42% to GBP7.4 million: an
encouraging sign that the market for our services is beginning to
open up despite the delays to revenue experienced. In addition to
this overall growth, one of the key metrics by which we measure our
progress is Monthly Recurring Revenue ("MRR"). Cloud services are
billed on a subscription basis although end-customer contracts are
typically approximately three years in length. Outsourcery benefits
from recurring revenues unlike traditional IT and communications
suppliers that may only benefit from recurring support revenues.
Over the course of this financial year MRR has risen from GBP0.6
million at 31 December 2013 to GBP0.7 million at 31 December 2014.
This represents growth of 17% and, at the current exit run rate,
would lead to annualised recurring revenue of GBP8.4million. Whilst
servicing this strong growth, and against the backdrop of our
continued investment in product and platform, our gross margin has
increased to 45% (2013: 36%) and this is expected to improve
further as the business scales against a stable cost base.
Total revenue in the period was GBP7.4 million (2013: GBP5.2
million) and comprised GBP7.1 million (2013: GBP4.1 million) of
recurring revenue and GBP0.3 million (2013: GBP1.1 million) of
non-recurring or professional services revenue.
Administrative expenses (excluding exceptional costs and
employee share based payment charge) were tightly controlled at
GBP9.1 million (2013: GBP10.1 million). Cost control remains a key
focus across the Group.
Adjusted EBITDA showed a loss of GBP4.6 million (2013: GBP7.2
million). Adjusted EBITDA is calculated as reported profit from
continuing operations, adjusted for exceptional costs, and employee
share-based payment charge, before finance costs, taxation,
depreciation and amortisation and is considered by the Directors to
be a key measure of financial performance.
Exceptional costs relate to redundancies incurred due to the
Group restructure during 2014.
The Group's loss before and after taxation from continuing
operations was GBP7.6 million (2013: GBP9.3 million) and basic loss
per share from continuing operations for the year was 19.7 pence
(2013: loss of 36.1 pence).
The Group's adjusted loss before and after taxation from
continuing operations was GBP6.3 million (2013: GBP8.8 million) and
adjusted loss per share from continuing operations for the year was
16.4 pence (2013: loss of 34.1 pence).
Cash Flow
The Group had gross cash at 31 December 2014 of GBP2.5 million
(2013: GBP6.3 million). During the course of 2014 the Group raised
total equity funds of GBP2.3 million (net of expenses). These funds
continue to be deployed to scale the business.
Consolidated Statement of Financial Position
Property, plant and equipment at 31 December 2014 had a net book
value of GBP3.5 million (2013: GBP2.0 million). Intangibles at
GBP0.9 million (2013: nil). This year we have capitalised the
development costs relating to advancing our Assured O-Cloud.
Trade and other receivables at 31 December 2014 were GBP2.3
million (2013: GBP2.2 million), consisting of GBP0.9 million (2013:
GBP1.0 million) of trade receivables and GBP1.4 million (2013:
GBP1.2 million) of other receivables and prepayments. There were no
trade and other receivables due after more than one year.
Trade and other payables at 31 December 2014 were GBP4.1 million
(2013: GBP2.3 million), consisting of GBP0.9 million (2013: GBP0.7
million) of trade payables and GBP3.2 million (2013: GBP1.6
million) of other payables and accruals.
Total borrowings at 31 December 2014 were GBP5.2 million (2013:
GBP4.2 million), consisting of interest bearing term debt of GBP1.5
million (2013: GBP2.6 million), non-interest bearing term debt of
GBP0.8 million (2013: GBP0.7 million) and finance leases of GBP2.9
million (2013: GBP0.9 million).
The Group has accumulated tax losses of GBP26.0 million (2013:
GBP18.4 million) which are available to carry forward and relieve
against future profits. The deferred tax asset value of these
losses is not currently reflected in the consolidated statement of
financial position.
Average headcount of the Group for the year was 110 (2013:
117).
On behalf of the board,
Piers Linney Simon Newton
Co-CEO Co-CEO
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR
ENDED 31 DECEMBER 2014
2014 2013
Note GBP'000 GBP'000
Continuing operations
Revenue 7,384 5,226
Cost of sales (4,049) (3,329)
--------- ---------
Gross profit 3,335 1,897
Administrative expenses
(excluding fees associated
with listing) (10,363) (10,109)
Fees associated with listing
(included as administrative
expenses) - (495)
--------- ---------
Total administration expenses (10,363) (10,604)
Operating loss (7,028) (8,707)
Interest received 5 -
Finance costs (589) (590)
--------- ---------
Loss for year before and after
taxation from continuing operations (7,612) (9,297)
Profit for the year from discontinued
operations - 172
Loss for year and total comprehensive
income (all attributable to
equity holders of the parent) (7,612) (9,125)
========= =========
Loss for year before and after
taxation from continuing operations (7,612) (9,297)
Fees associated with listing - 495
Employee share-based payment
charge 988 25
Exceptional restructuring costs 293 -
Adjusted loss for year before
and after taxation from continuing
operations (6,331) (8,777)
Depreciation and amortisation 1,180 1,022
Finance costs 589 590
--------- ---------
Adjusted EBITDA (4,562) (7,165)
========= =========
Pence Pence
Basic and diluted (loss)/earnings
per share
- Loss from continuing operations 2 (19.72) (36.11)
- Earnings from discontinued
operations - 0.67
--------- ---------
- Total (19.72) (35.44)
========= =========
Adjusted (loss)/earnings per
share
- Loss from continuing operations 2 (16.40) (34.09)
- Earnings from discontinued
operations - 0.67
--------- ---------
- Total (16.40) (33.42)
========= =========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED
31 DECEMBER 2014
Share Share Retained Merger 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 173 18,470 - - 18,643
Employee share-based payment options - - 25 - 25
Share issue expenses - (797) - - (797)
Merger accounting adjustment - - - 2,977 2,977
-------- -------- -------- -------- -------
Transactions with owners of parent 173 17,673 25 2,977 20,848
Loss and Total Comprehensive Income
for the period - - (9,125) - (9,125)
-------- -------- -------- -------- -------
Balance at 31 December 2013 346 17,673 (21,759) 7,745 4,005
Issue of share capital 127 2,410 - - 2,537
Share issue expenses - (63) - - (63)
Employee share-based payment options - - 988 - 988
-------- -------- -------- -------- -------
Transactions with owners of parent 127 2,347 988 - 3,462
Loss and Total Comprehensive Income
for the period - - (7,612) - (7,612)
-------- -------- -------- -------- -------
Balance at 31 December 2014 473 20,020 (28,383) 7,745 (146)
======== ======== ======== ======== =======
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER
2014
Notes 2014 2013
GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment 3,453 2,042
Intangibles 885 -
--------- ---------
Total non-current assets 4,339 2,042
--------- ---------
Current assets
Trade and other receivables 2,278 2,182
Cash and cash equivalents 2,526 6,331
--------- ---------
Total current assets 4,804 8,513
--------- ---------
Assets included in disposal
group classified as held for
sale - 35
--------- ---------
Total assets 9,143 10,590
========= =========
Equity and liabilities
Share capital 473 346
Share premium 20,020 17,673
Merger reserve 7,745 7,745
Retained losses (28,383) (21,759)
--------- ---------
Equity attributable to owners
of the parent and total equity (146) 4,005
--------- ---------
Liabilities
Non-current liabilities
Borrowings 3 3,556 2,975
--------- ---------
Total non-current liabilities 3,556 2,975
--------- ---------
Current liabilities
Trade and other payables 4,100 2,342
Borrowings 3 1,633 1,234
--------- ---------
Total current liabilities 5,733 3,576
--------- ---------
Liabilities included in disposal
group classified as held for
sale - 34
--------- ---------
Total liabilities 9,289 6,585
========= =========
Total equity and liabilities 9,143 10,590
========= =========
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31
DECEMBER 2014
2014 2013
GBP'000 GBP'000
Operating activities from continuing
operations
Loss for the period (7,612) (9,297)
Finance costs 587 590
Gain on extinguishing financial
liabilities with equity - (42)
Listing fees - 495
Depreciation 1,125 1,022
Amortisation 53 -
Share based payment costs 988 31
Net changes in working capital 1,618 (1,876)
------- -------
Net cash flow used in continuing
operations (3,241) (9,077)
Net cash from/(used in) discontinued
operations 1 236
------- -------
Net cash used in operating
activities (3,240) (8,841)
------- -------
Investing activities
Purchases of property, plant
and equipment (289) (251)
Purchase of intangible assets (468) -
Proceeds from sale of business
(discontinued operations) - 185
Net cash flow from investing
activities (757) (66)
------- -------
Financing activities
Finance lease capital repayments (697) (470)
Proceeds from issue of share
capital (net of issue costs) 2,474 17,718
Repayments of other borrowings (1,177) (1,311)
Listing fees paid - (495)
Interest and finance lease
charges paid (408) (444)
------- -------
Net cash flow from financing
activities 192 14,998
------- -------
Net (decrease)/increase in
cash and cash equivalents in
the period (3,805) 6,091
------- -------
Cash and cash equivalents at
start of period 6,331 240
------- -------
Cash and cash equivalents at
end of period 2,526 6,331
======= =======
NOTES TO THE PRELIMINARY RESULTS
1. Summary of accounting policies
Basis of preparation
The Financial Information set out in this announcement does not
constitute the statutory accounts of the Group for the year ended
31 December 2014. The auditors reported on those accounts, their
report was unqualified and did not contain a statement under
Section 498(2) or (3) of the Companies Act 2006. The statutory
accounts for the year ended 31 December 2014 will be delivered to
the registrar of companies following the Annual General
Meeting.
Whilst the Financial Information included in this announcement
has been computed in accordance with International Financial
Reporting Standards ("IFRS"), this announcement in itself does not
contain sufficient information to comply with IFRS. Details of the
accounting policies applied are those set out in the annual report
for the year ended 31 December 2013.
The Group's consolidated financial statements for the year ended
31 December 2014 have been prepared in accordance with
International Financial Reporting Standards as adopted in the
European Union ("IFRS") and with those parts of the Companies Act
2006 applicable to companies reporting under IFRS.
Going concern
The Directors have prepared cash flow forecasts for the period
until December 2016, which include further revenue growth built
upon the significant revenue growth achieved in the financial year
ended 31 December 2014. As part of the preparation of these
forecasts, the Directors have estimated the likely conversion of
potential future business together with the impact of mitigating
factors should the actual results prove to be lower than these
estimates. 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
financial statements.
Loss per share
2014 2013
GBP'000 GBP'000
Continuing operations
Loss for the year attributable to
equity holders of the parent (7,612) (9,297)
Discontinued operations
Profit for the year attributable
to equity holders of the parent - 172
Total operations
----------- -----------
Loss for the year attributable to
equity holders of the parent (7,612) (9,125)
=========== ===========
Adjusted Loss
Continuing operations
Loss for the year attributable to
equity holders of the parent (7,612) (9,297)
Fees associated with listing - 495
Employee share-based payment charge 988 25
Exceptional restructuring costs 293 -
----------- -----------
Adjusted loss for the year attributable
to equity holders of the parent* (6,331) (8,777)
Discontinued operations
Profit for the year attributable
to equity holders of the parent - 172
Total operations
----------- -----------
Adjusted loss for the year attributable
to equity holders of the parent (6,331) (8,605)
=========== ===========
Number Number
Weighted average number of shares
used in basic and diluted (loss)
/ earnings per share 38,596,663 25,749,245
=========== ===========
Basic and diluted (loss)/earnings
per share Pence Pence
Loss from continuing operations (19.72) (36.11)
Earnings from discontinued operations - 0.67
----------- -----------
Total (19.72) (35.44)
=========== ===========
Adjusted (loss)/earnings per share*
Adjusted loss from continuing operations (16.40) (34.09)
Earnings from discontinued operations - 0.67
----------- -----------
Total (16.40) (33.42)
=========== ===========
*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 adjusted loss figures above and the
weighted average number of ordinary shares above.
Share options are anti-dilutive due to losses
2. Borrowings
Notes 2014 2013
GBP'000 GBP'000
Current
Boost loan stock (i) 323 942
Property mortgage (ii) 281 37
Finance leases (iv) 1,029 255
1,633 1,234
======== ========
Non-current
Boost loan stock (i) 907 1,428
Property mortgage (ii) - 281
Etive loan stock (iii) 802 670
Finance leases (iv) 1,846 596
3,555 2,975
-------- --------
5,188 4,209
======== ========
Notes to the analysis of borrowings
(i) The Boost loan stock bore interest at 12.5% from 1 January
2014. After the amendment made to the financial instrument in
August 2014 interest is charged at 14%. This loan is expected to be
repaid in full in March 2017.
(ii) The property mortgage bears interest at 10% and is expected
to be repaid in full in July 2015. Due to the mortgage being due
within 12 months it has been classified as current.
(iii) GBP999,000 of the cash value of the Etive loan stock was
converted to 908,182 ordinary shares upon Admission at the IPO
price. The remainder of the GBP1.0 million Etive loan stock bears
no interest and is shown at its present value. This loan stock is
expected to be repaid in full on 24 May 2016.
(iv) Commitments under finance leases are shown below:
Within 1 to After
1 year 5 years 5 years Total
As at 31 December
2013 GBP'000 GBP'000 GBP'000 GBP'000
Lease payments 263 596 - 859
Finance charges (8) - - (8)
-------- --------- --------- -------------
Net present values 255 596 - 851
-------- --------- --------- -------------
As at 31 December
2014
Lease payments 1,126 2,080 - 3,206
Finance charges (97) (233) - (330)
-------- --------- --------- -------------
Net present values 1,029 1,847 - 2,876
-------- --------- --------- -------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR LLFEVVEIAFIE
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