TIDMWAND
RNS Number : 5967H
WANdisco Plc
17 March 2015
17 March 2015
WANdisco plc
Preliminary unaudited results for the year ended 31 December
2014
Big Data customer wins gather momentum
Financial Highlights
-- Sales bookings up 18% to $17.4m (2013: $14.8m)
-- Revenue up 40% to $11.2m (2013: $8.0m)
-- Deferred revenue from booked sales up 47% to $19.3m (2013: $13.1m)
-- Adjusted EBITDA(1) loss $17.9m (2013: $7.8m loss)
-- New funds: $10.0m credit facility; $26.1m net equity fundraise (post year-end)
Operational and Strategic Highlights
Big Data
* 9 new customer wins
* British Gas expanded its solution in our largest Big
Data deal to date
* Joined the Hadoop Open Data Platform with Hortonworks,
EMC, IBM and others (post year-end)
* Non-Stop Hadoop product evolves to unify data across
multiple Hadoop-compatible storage vendors
Application Lifecycle Management ("ALM")
* 46 new ALM subscriptions from global corporations
such as Panasonic, Polycom and Zurich Insurance
* 54 upgraded or expanded ALM subscriptions, including
Cisco, Pitney Bowes, Fannie Mae and Pixelworks
* New ALM products released for Git and Gerrit software
development environments
1 EBITDA loss excluding equity-settled share-based payment,
capitalised product development, acquisition-related items and
exceptional items.
David Richards, WANdisco Chief Executive, comments:
"For large enterprises adopting Hadoop, our technology has
quickly become part of the standard Big Data architecture. We are
seeing customers increasingly seeking a connected set of vendors to
co-ordinate their Big Data infrastructure. Alongside such vendors,
we recently deepened our partner relationships by joining the new
Hadoop Open Data Platform.
WANdisco is enabling customers across industries to realise
insights, reliability and savings that they otherwise could not
achieve. We believe that many of our new Big Data customers will go
on to expand significantly their WANdisco solutions as they take
more and more data into their mission-critical applications.
As 2014 progressed we achieved a marked increase in momentum in
our Big Data business, as successful production trials led into
some significant contract wins. Alongside our new customer wins,
our first contract expansion by an existing customer was
particularly encouraging.
We began 2015 by winning one of the world's top ten banks as a
Big Data customer and are addressing a number of exciting new sales
opportunities, made more tangible by powerful references from
2014's new customers. We look forward to reporting more customer
successes as the year progresses."
Notes
An audio webcast recording of the analyst presentation will be
available on the company website after the event.
All Group announcements and news can be found at
http://www.wandisco.com
For further information please contact:
via FTI Consulting
WANdisco plc LLP
David Richards
Paul Harrison
Phil Branston
+44 (0)203 727
FTI Consulting 1000
Matt Dixon / Rob Mindell /
Harry Staight
Investec (Joint Broker and +44 (0)207 597
Nominated Adviser) 4000
Christopher Baird / Dominic
Emery
UBS (Joint Broker) +44 (0)207 567
Rahul Luthra / Sandip Dhillon 8000
About WANdisco plc
WANdisco (LSE: WAND) is a provider of enterprise-ready, non-stop
software that enables globally distributed organizations to meet
today's data challenges of secure storage, scalability and
continuous availability. WANdisco's products are differentiated by
the company's patented, active-active data replication technology,
serving crucial continuous availability requirements, including
Hadoop Big Data and Application Lifecycle Management ("ALM"),
including Apache Subversion and Git. Fortune Global 1000 companies,
including Juniper Networks, Motorola, Intel and Halliburton, rely
on WANdisco for performance, reliability, security and
availability. For additional information, please visit
www.wandisco.com.
BUSINESS REVIEW
2014 was a pivotal year in the evolution of the Big Data
marketplace, as global corporations started to shift from trialing
Hadoop applications to using Hadoop actively for real-time
mission-critical data. WANdisco played a key role in this
transition by enabling some key customers to cross over into 'live
production', ensuring enterprise-standard resiliency by licensing
our technology.
Our established ALM business continued to gather new customers
in a growing market and generate resilient subscription revenues
from its large customer base, providing financial momentum to help
support our growth.
The uniqueness of the technology underpinning our software
products was demonstrated, shortly after the year-end, by the award
of our second patent, allowed on 29 January 2015. Building on the
replication fundamentals covered by our first patent, this new
patent covers the management of replication network members,
protecting features that our customers use to ensure reliability,
save costs and comply with data protection regulations.
Big Data
As Hadoop deployments have moved more emphatically into
enterprise implementations at global scale, our Non-Stop Hadoop
product, ensuring continuous data availability and high processing
performance, has started to come into its own as an essential
requirement for taking Hadoop applications into live production. We
are enabling customers across industries to realise performance,
insight, reliability and savings that they otherwise could not
achieve. Many of our new Big Data customers intend to expand
significantly their WANdisco solutions as they take more and more
data into their mission-critical applications.
Increasing customer adoption
Nine new customers selected Non-Stop Hadoop during the year, six
of these in the fourth quarter. Amongst these customers, in the
consumer sector, dunnhumby and Epsilon are using our product to
transform the capture, interrogation, availability and
responsiveness of their customer data. In financial services, two
global banks adopted our technology to enable analysis of buying
behaviour, verification of financial transactions and management of
risk, including fraud. We expect all of these customers to scale up
to significantly bigger subscriptions over time as they develop
their Hadoop operations.
Our first example of a customer adopting the product and
subsequently scaling up its subscription contract came with British
Gas, which, after its first contract in March, carried out
extensive testing and subsequently scaled up for live production,
entering into a new subscription that is our largest-ever Big Data
contract.
After the end of the year, a global top ten bank selected
Non-Stop Hadoop following rigorous trials. The bank has included
WANdisco in its standard architecture for Big Data, which it
intends to roll out across the bank. With the bank's data
infrastructure covering tens of thousands of data nodes, the
potential for its subscription to expand in value is considerable,
making it, at full utilisation, WANdisco's largest Big Data
customer to date.
Our fourth quarter sales marked an increase in momentum in Big
Data, with some significant contract wins in a short period of
time. Our pipeline of sales opportunities grew significantly during
the year and now includes a broad industry spread, with
opportunities in the EMEA and Asia-Pacific regions building up to
complement our well-established opportunities in the Americas. A
number of recently successful production trials are expected to
lead to new subscription contracts during 2015.
Extending our product leadership
Responding to customer requirements, we have added to the core
continuous availability features of Non-Stop Hadoop. New features
enable data capture from multiple data centres; allocation of data
processing to the most cost-effective hardware; and selective
replication of data to comply with national data governance
regulations. These features are controlled through a new
administrative user interface.
We broadened our product offering by acquiring OhmData, Inc., a
developer of HBase, an open source, non-relational, distributed
Hadoop database. Alongside our existing distributed computing
experts, OhmData has advanced our Big Data products, including
Non-Stop HBase, not least because of the ability to commit new
Hadoop code to improve integration between WANdisco products and
the Hadoop open source platform.
To widen Big Data storage and availability options, we have
evolved Non-stop Hadoop into WANdisco Fusion: a common access layer
which unifies storage between Hadoop and Hadoop-compatible vendors.
The product is easy to install and enables seamless and
interchangeable use of multiple data sources
New partnerships
During the year, we partnered with the two principal Hadoop
distributors, Cloudera and Hortonworks. We became a certified
partner in the Oracle Big Data Appliance hardware and applications
stack, and in the IBM Infosphere BigInsights stack, opening up
access to global enterprise sales forces and vast customer bases of
large corporations. dunnhumby was our first customer win from the
Oracle partnership.
After the end of the year, we joined the Hadoop Open Data
Platform ("ODP") to collaborate and integrate with Hortonworks,
IBM, Pivotal, EMC, SAS and others. This brings opportunities for
our new WANdisco Fusion product to unify storage across these
vendors. Sales collaboration will now be focused principally on ODP
vendors. WANdisco Fusion will nevertheless be able to connect with
storage systems outside of the ODP without access to their
underlying technology.
Application Lifecycle Management ("ALM")
Our well-established ALM products generated $14.6m of sales
bookings in the year. Whilst last year's multi-year renewals
impacted overall growth, new subscriptions grew by 29%.
Notable new customers amongst the 46 new enterprise
subscriptions included Globant, Panasonic, Synaptics, Polycom,
Zurich Insurance and PetSmart. Amongst existing customers we
sustained high subscription renewal rates, with several customers
signalling confidence in our products by renewing on a multi-year
basis. Significant renewals included Cisco, Wal-Mart, Fannie Mae
and Pixelworks. 54 of our customers extended usage of our product
across their organisations, including Pitney Bowes and Huawei.
Our close links with the software development and open source
communities have allowed us to move fast in introducing new
products. Over one-third of our ALM sales in the fourth quarter
were of products based on the emerging Git open source code
management environment, which is now the leading platform. Key
product releases in the year included:
- Git MultiSite 1.2, providing scalability and continuous
availability for Git access and collaboration. New features
simplify administration, enforce global policies, and enhance
performance and security.
- Support for the increasingly popular Git collaboration tools, GitLab and Gerrit.
- Access Control Plus, the first unified access control solution
for both the Subversion and Git open source tools, providing
consistent authorisation, authentication and audit across globally
distributed development sites.
We continue to see strong potential in the source code
management segment of the ALM market that we focus on. Software
development continues to become more geographically and
organisationally distributed and greater control and efficiency is
sought, both amongst software publishers and in industry more
generally.
People
Over the year we have augmented our unique blend of renowned
experts in distributed and open source computing, with experienced
operational management drawn from the world's best technology
vendors.
Our leading open source committers significantly advanced our
products, keeping them well integrated with Hadoop, Git and other
open source projects. We successfully completed exhaustive Big Data
production trials with some of the world's most exacting technology
customers.
Since the end of the year we have made some leadership changes
in our sales and partnership activities that we expect to lead to
greater focus and effectiveness in delivering on our sales
opportunities.
FINANCE REVIEW
Sales bookings were $17.4m (2013: $14.8m) representing 18%
growth compared to the prior year. Sales bookings are total
subscription contract values, subsequently recognised as revenue
over the life of the contract. Bookings remain weighted to the
well-established ALM business.
Revenue for the year grew 40% to $11.2m (2013: $8.0m). This
growth includes revenue deferred from previous periods, in
particular revenue from large multi-year contracts sold at the end
of 2013.
Deferred revenue from sales booked during the year and in
previous years (and not yet recognised as revenue) increased 47% to
$19.3m at 31 December 2014 (31 December 2013: $13.1m), reflecting
success in securing forward revenue from multi-year new and renewed
contracts.
Big Data
$2.8m of bookings came from our Big Data products (2013: $0.2m).
This included a record $2.1m in the fourth quarter (Q4 2013:
nil).
Nine new customers selected our Non-Stop Hadoop product. Amongst
these, British Gas, after a period of extensive testing, progressed
to live production, entering into a new subscription that is our
largest-ever Big Data contract.
Contracts values ranged up to $750,000, with customers
indicating plans to scale up these contracts as they further
develop their Hadoop operations.
On 30 June 2014 we announced the acquisition of San
Francisco-based OhmData, Inc., a developer of HBase, an open
source, non-relational, distributed Hadoop database. The enterprise
value of the acquisition was $2.4m, paid in WANdisco stock. This
included a post-acquisition share-based payment, which is included
in exceptional items.
ALM
$14.6m of bookings came from our ALM products, (2013: $14.6m).
The prior year's bookings benefitted from one large multi-year
renewal deal in the final quarter.
The high proportion of bookings from new subscriptions, and high
renewal rates, continue to demonstrate the potential of the ALM
market. Multi-year contracts continue to be prevalent.
Based on its operating scale and revenue potential, it remains
our intention to advance the ALM business towards profitability in
2015.
Profit and loss
Our headcount increased to 182 as at 31 December 2014 (31
December 2013: 143), reflecting investment to develop and take to
market our Big Data products. This includes recruitment of product
engineers and sales executives.
The adjusted EBITDA loss for the year (excluding equity-settled
share-based payment, capitalised product development,
acquisition-related items and exceptional items) was $17.9m (2013:
$7.8m loss). The loss resulted from significant investment to
address our high growth markets, albeit in parallel we have begun
to realise cost efficiencies across a number of functions.
In product development, as our products have matured we have
concentrated most of our activity in testing, user interface and
release management in our lower-cost UK locations. Resulting cash
cost savings enabled us to accelerate development of our core Big
Data product features and the underlying technology platform, which
remains in the US. Product development expenditure for the year was
$9.0m (2013: $7.4m). All of this expenditure was devoted to new
product features and was capitalised.
Balance sheet and cash flow
Trade and other receivables at 31 December 2014 were $14.5m (31
December 2013: $10.5m). $4.4m of receivables was billed by the year
end (31 December 2013: $4.5m), $8.0m comprised contractual payments
not yet billed (31 December 2013: $4.7m), largely from multi-year
contracts, and $2.1m related to non-trade receivables (31 December
2013: $1.3m).
Net cash stood at $2.5m at 31 December 2014 (31 December 2013:
$25.7m). After the end of the year, we secured $24.8m of new equity
funds (net of fees), from a selection of UK and US investors. The
new shares commenced trading on 18 February 2015. This is in
addition to the existing revolving credit facility with HSBC Bank
plc, announced on 5 August 2014, which remained undrawn at 31
December 2014. The funds available will be used to finance
continued expansion in the Big Data market, including product
development and go-to-market activities.
OUTLOOK
As 2014 progressed we achieved a marked increase in momentum in
our Big Data business, as successful production trials led into
some significant contract wins. Alongside these new customer wins,
our first contract expansion by an existing customer was
particularly encouraging.
Our ALM business continues to generate resilient subscription
revenues in a growing market, and we aim to take it towards
profitability in 2015.
We began 2015 by winning one of the world's top ten banks as a
Big Data customer, and are addressing a number of exciting new
sales opportunities, made more tangible by powerful references from
2014's new customers. We look forward to reporting more customer
successes as the year progresses.
We have deepened our relationship with a range of existing
partners as part of the Hadoop Open Data Platform, with whom we
will be selling our next generation Big Data product, WANdisco
Fusion. We have begun to work on new sales collaboration efforts
with these partners.
Consolidated statement of profit and loss and other
comprehensive income
for the year ended 31 December 2014
Unaudited Audited
Year ended 31 December Year ended 31
2014 December 2013
----------------------------------- -----------------------------------
Continuing operations Notes Pre- Exceptional Total Pre- Exceptional Total
exceptional items $'000 exceptional items $'000
$'000 $'000 $'000 $'000
--------------------------- ------ ------------ ----------- -------- ------------ ----------- --------
Revenue 3 11,218 - 11,218 8,012 - 8,012
Cost of sales (2,165) - (2,165) (1,579) - (1,579)
--------------------------- ------ ------------ ----------- -------- ------------ ----------- --------
Gross profit 9,053 - 9,053 6,433 - 6,433
Operating expenses 4 (47,529) (1,441) (48,970) (23,425) (2,276) (25,701)
--------------------------- ------ ------------ ----------- -------- ------------ ----------- --------
Loss from operations 5 (38,476) (1,441) (39,917) (16,992) (2,276) (19,268)
Finance income 6 584 - 584 52 - 52
Finance costs 6 (27) - (27) (294) (484) (778)
--------------------------- ------ ------------ ----------- -------- ------------ ----------- --------
Net finance income/(costs) 6 557 - 557 (242) (484) (726)
--------------------------- ------ ------------ ----------- -------- ------------ ----------- --------
Loss before tax (37,919) (1,441) (39,360) (17,234) (2,760) (19,994)
Income tax 7 1,053 - 1,053 263 - 263
--------------------------- ------ ------------ ----------- -------- ------------ ----------- --------
Loss for the year (36,866) (1,441) (38,307) (16,971) (2,760) (19,731)
--------------------------- ------ ------------ ----------- -------- ------------ ----------- --------
Other comprehensive
income
Items that are or may
be reclassified to
profit or loss:
Foreign operations
- foreign currency
translation differences (444) - (444) 136 - 136
--------------------------- ------ ------------ ----------- -------- ------------ ----------- --------
Other comprehensive
income for the year,
net of tax (444) - (444) 136 - 136
--------------------------- ------ ------------ ----------- -------- ------------ ----------- --------
Total comprehensive
income for the year (37,310) (1,441) (38,751) (16,835) (2,760) (19,595)
--------------------------- ------ ------------ ----------- -------- ------------ ----------- --------
Loss per share
Basic and diluted 8 $1.59 $0.90
--------------------------- ------ ------------ ----------- -------- ------------ ----------- --------
The notes on pages 11 to 17 form an integral part of this
preliminary announcement.
Consolidated balance sheet
as at 31 December 2014
Unaudited Audited
2014 2013
Notes $'000 $'000
---------------------------------------- ------ ---------- ---------
Assets
Intangible assets 9 9,814 8,092
Property, plant and equipment 410 311
---------------------------------------- ------ ---------- ---------
Non-current assets 10,224 8,403
---------------------------------------- ------ ---------- ---------
Trade and other receivables 10 14,452 10,511
Cash and cash equivalents 2,481 25,673
---------------------------------------- ------ ---------- ---------
Current assets 16,933 36,184
---------------------------------------- ------ ---------- ---------
Total assets 27,157 44,587
---------------------------------------- ------ ---------- ---------
Liabilities
Borrowings - finance lease liabilities (8) (35)
Trade and other payables (3,195) (2,508)
Deferred income 11 (19,269) (13,124)
Deferred government grant (81) (242)
Current tax liabilities (2) -
Current liabilities (22,555) (15,909)
---------------------------------------- ------ ---------- ---------
Deferred income tax liabilities (5) (5)
---------------------------------------- ------ ---------- ---------
Non-current liabilities (5) (5)
---------------------------------------- ------ ---------- ---------
Total liabilities (22,560) (15,914)
---------------------------------------- ------ ---------- ---------
Net assets 4,597 28,673
---------------------------------------- ------ ---------- ---------
Equity
Share capital 3,879 3,755
Share premium 56,587 53,882
Translation reserve (302) 142
Merger reserve 1,247 1,247
Retained earnings (56,814) (30,353)
---------------------------------------- ------ ---------- ---------
Total equity 4,597 28,673
---------------------------------------- ------ ---------- ---------
The notes on pages 11 to 17 form an integral part of this
preliminary announcement.
Consolidated statement of changes in equity
for the year ended 31 December 2014
Share Share Translation Merger Retained Total
capital premium reserve reserve earnings equity
Unaudited $'000 $'000 $'000 $'000 $'000 $'000
--------------------------------- -------- -------- ------------ -------- --------- ---------
Balance at 1 January 2014 3,755 53,882 142 1,247 (30,353) 28,673
Total comprehensive income
for the year
Loss for the year - - - - (38,307) (38,307)
Other comprehensive income - - (444) - - (444)
--------------------------------- -------- -------- ------------ -------- --------- ---------
Total comprehensive income
for the year - - (444) - (38,307) (38,751)
--------------------------------- -------- -------- ------------ -------- --------- ---------
Transactions with owners
of the Company
Contributions and distributions
Shares issued as part of
OhmData, Inc. acquisition 47 2,317 - - (1,502) 862
Equity-settled share-based
payment - - - - 13,348 13,348
Share options exercised 77 388 - - - 465
Total transactions with
owners of the Company 124 2,705 - - 11,846 14,675
--------------------------------- -------- -------- ------------ -------- --------- ---------
Balance at 31 December
2014 3,879 56,587 (302) 1,247 (56,814) 4,597
--------------------------------- -------- -------- ------------ -------- --------- ---------
Share Share Translation Merger Retained Total
capital premium reserve reserve earnings equity
Audited $'000 $'000 $'000 $'000 $'000 $'000
--------------------------------- -------- -------- ------------ -------- --------- ---------
Balance at 1 January 2013 3,388 23,332 6 1,247 (15,739) 12,234
Total comprehensive income
for the year
Loss for the year - - - - (19,731) (19,731)
Other comprehensive income - - 136 - - 136
--------------------------------- -------- -------- ------------ -------- --------- ---------
Total comprehensive income
for the year - - 136 - (19,731) (19,595)
--------------------------------- -------- -------- ------------ -------- --------- ---------
Transactions with owners
of the Company
Contributions and distributions
Shares issued by WANdisco
plc 323 30,381 - - - 30,704
Share issue costs - (1,034) - - - (1,034)
Shares issued as part of
TortoiseSVN.net IP purchase 8 674 - - (682) -
Equity-settled share-based
payment - - - - 5,799 5,799
Share options exercised 36 529 - - - 565
Total transactions with
owners of the Company 367 30,550 - - 5,117 36,034
--------------------------------- -------- -------- ------------ -------- --------- ---------
Balance at 31 December
2013 3,755 53,882 142 1,247 (30,353) 28,673
--------------------------------- -------- -------- ------------ -------- --------- ---------
The notes on pages 11 to 17 form an integral part of this
preliminary announcement.
Consolidated statement of cash flows
for the year ended 31 December 2014
Unaudited Audited
2014 2013
$'000 $'000
------------------------------------------- ---------- ---------
Cash flows from operating activities
Loss for the year (38,307) (19,731)
Adjustments for:
- Depreciation of property, plant and
equipment 267 138
- Amortisation of intangible assets 8,283 4,918
- Net finance income (31) (17)
- Income tax (1,053) (263)
- Foreign exchange 156 743
- Equity-settled share-based payment 13,348 5,799
-------------------------------------------- ---------- ---------
(17,337) (8,413)
------------------------------------------- ---------- ---------
Changes in:
- Trade and other receivables (2,938) (8,060)
- Trade and other payables 737 (1,122)
- Deferred income 6,145 6,756
- Government grant (147) (338)
- Provisions - (393)
Net working capital change 3,797 (3,157)
-------------------------------------------- ---------- ---------
Cash used in operating activities (13,540) (11,570)
Interest paid (11) (35)
Income tax paid (3) -
------------------------------------------- ---------- ---------
Net cash used in operating activities (13,554) (11,605)
-------------------------------------------- ---------- ---------
Cash flows from investing activities
Purchase of property, plant and equipment
and 3(rd) party software (475) (320)
Development expenditure (9,040) (7,443)
Interest received 58 52
-------------------------------------------- ---------- ---------
Net cash used in investing activities (9,457) (7,711)
-------------------------------------------- ---------- ---------
Cash flows from financing activities
Net proceeds from share issues 465 30,235
Payment of finance lease liabilities (27) -
------------------------------------------- ---------- ---------
Net cash from financing activities 438 30,235
-------------------------------------------- ---------- ---------
Net (decrease)/increase in cash and
cash equivalents (22,573) 10,919
Cash and cash equivalents at the start
of the year 25,673 14,545
Effect of movements in exchange rates
on cash and cash equivalents (619) 209
-------------------------------------------- ---------- ---------
Cash and cash equivalents at the end
of the year 2,481 25,673
-------------------------------------------- ---------- ---------
The notes on pages 11 to 17 form an integral part of this
preliminary announcement.
Notes to the consolidated financial statements
for the year ended 31 December 2014
1. Reporting entity
WANdisco plc (the "Company") is a company incorporated and
domiciled in Jersey. The Company's ordinary shares are traded on
AIM. These consolidated financial statements ("Consolidated
Financial Statements") as at and for the year ended 31 December
2014 comprise the Company and its subsidiaries (together referred
to as the "Group"). The Group is primarily involved in the
development and provision of global collaboration software.
2. Basis of preparation
Basis of accounting
Whilst the Financial Information included in this preliminary
announcement has been prepared on the basis of the requirements of
International Financial Reporting Standards ("IFRSs") in issue, as
adopted by the European Union ("EU") and effective at 31 December
2014, this announcement does not itself contain sufficient
information to comply with IFRS.
The Group expects to publish full Consolidated Financial
Statements in April 2015. The Financial Information set out in this
Preliminary Announcement does not constitute the Group's
Consolidated Financial Statements for the years ended 31 December
2014 or 31 December 2013.
The financial information for 2013 is derived from the
consolidated accounts for the year ended 31 December 2013 which has
been delivered to the registrar of companies with the Jersey
Financial Services Commission ("JFSC"). The auditor has reported on
the year ended 31 December 2013 consolidated accounts; their report
was unqualified. It did not contain statements under section 113B
(3) or (6) of the Companies (Jersey) law 1991.
The consolidated accounts for the year ended 31 December 2014
will be finalised on the basis of the financial information
presented by the directors in this preliminary announcement and
will be delivered to the registrar of companies with the JFSC in
due course.
The Consolidated Financial Statements have been prepared in
accordance with IFRSs as adopted for use in the EU. The Group has
applied all accounting standards and interpretations issued by the
IASB and International Financial Reporting Committee relevant to
its operations and which are effective in respect of these
Financial Statements.
The accounting policies have been applied consistently to all
periods presented in the Group financial statements.
The following new standards and amendments to standards that are
effective for the first time for the financial year beginning 1
January 2014, have been adopted, but have not had a material impact
on the Consolidated Financial Statements:
- IFRS 10 "Consolidated Financial Statements", IAS 27
"Consolidated and Separate Financial Statements", IFRS 11 "Joint
Arrangements" and amendments to IAS 28 "Investments in Associates
and Joint Ventures".
- IFRS 12 "Disclosure of Interests in Other Entities".
- Amendments to IAS 32 "Financial Instruments: Presentation" -
Offsetting Financial Assets and Financial Liabilities.
- IFRIC Interpretation 21 Levies.
- Amendments to IAS 36 "Impairment of Assets" - Recoverable
Amount Disclosures for Non-Financial Assets.
- Amendments to IAS 39 "Financial Instruments: Recognition and
Measurement" - Novation of Derivatives and Continuation of Hedge
Accounting.
Going concern
As at 31 December 2014 the Group had net assets of $4,597,000
(31 December 2013: $28,673,000) as set out in the Consolidated
balance sheet on page 8. The Directors have prepared detailed
forecasts of the Group's performance over the coming years, this
review included the benefit of $26,100,000 new equity funds (net of
issue costs) which was raised following the year end. As a
consequence, the Directors believe that WANdisco plc and the Group
are well placed to manage its business risks successfully despite
the current uncertain economic outlook. After making enquiries the
Directors have a reasonable expectation that WANdisco plc and the
Group have sufficient working capital available for its present
requirements, that is for the next twelve months from the date of
the Group financial statements. Accordingly, they continue to adopt
the going concern basis in preparing the Group financial
statements.
Functional and presentational currency
The consolidated financial statements are presented in US
dollars, which is also the presentational currency of the Group.
Billings to the Group's customers during the year were all in US
dollars by WANdisco, Inc. with certain costs being incurred by
WANdisco International Limited in sterling and WANdisco, Pty Ltd in
Australian dollar. All financial information has been rounded to
the nearest thousand US dollars unless otherwise stated.
Use of judgements and estimates
The preparation of financial information in conformity with
adopted IFRSs requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and
the reported amounts of assets, liabilities, income and expenses.
Actual results may differ from these estimates.
The significant judgements made by management in applying the
Group's accounting policies and the key sources of estimation
uncertainty were the same as those that applied to the Group's
consolidated financial statements as at and for the year ended 31
December 2013.
3. Segmental analysis
Operating segments
The Directors consider there to be one operating segment, being
that of development and sale of licences for software and related
maintenance.
Geographical segments
The Group recognises revenue in three geographical regions based
on the location of customers, as set out in the following
table:
Unaudited Audited
2014 2013
$'000 $'000
------------------- ---------- --------
North America 9,414 7,069
Europe 1,376 660
Rest of the world 428 283
------------------- ---------- --------
Total 11,218 8,012
------------------- ---------- --------
Management makes no allocation of costs, assets or liabilities
between these segments since all trading activities are operated as
a single business unit.
The Group has no (2013: nil) customers representing individually
over 10% of revenue.
4. Exceptional items
Unaudited Audited
2014 2013
Exceptional items comprise the following: $'000 $'000
------------------------------------------------- ---------- --------
Equity-settled share-based payment charge
in relation to acquisitions:
- AltoStor, Inc. 659 1,459
- TortoiseSVN.net 290 236
- OhmData, Inc. 492 -
------------------------------------------------- ---------- --------
Total equity-settled share-based payment
charge in relation to acquisitions 1,441 1,695
Reorganisation costs - 581
------------------------------------------------- ---------- --------
Total exceptional items in loss from operations 1,441 2,276
Currency exchange loss - 484
------------------------------------------------- ---------- --------
1,441 2,760
------------------------------------------------- ---------- --------
- The equity-settled share-based payment charge recognised in
the year relate to charges arising on the acquisitions of
AltoStor,
Inc., TortoiseSVN.net and OhmData, Inc., which have been
classified as exceptional.
- Reorganisation costs incurred in the prior year relate to
certain specific organisational change activities in both the UK
and the US.
- The exchange loss (2013) arose on cash balances held in sterling.
5. Reconciliation of operating loss to adjusted earnings before
interest, taxation, depreciation and amortisation ("Adjusted
EBITDA")
Unaudited Audited
2014 2013
Reconciliation of operating loss to adjusted $'000 $'000
EBITDA
---------------------------------------------- ---------- ---------
Operating loss (39,917) (19,268)
Adjusted for:
Amortisation and depreciation 8,550 5,056
Acquisition-related items 145 -
Exceptional items within operating expenses 1,441 2,276
---------------------------------------------- ---------- ---------
EBITDA before exceptional items (29,781) (11,936)
Adjusted for equity-settled share-based
payment (non exceptional) 11,907 4,104
---------------------------------------------- ---------- ---------
Adjusted EBITDA before exceptional items (17,874) (7,832)
Development expenditure capitalised (9,040) (7,443)
---------------------------------------------- ---------- ---------
Adjusted EBITDA before exceptional items
including development expenditure (26,914) (15,275)
---------------------------------------------- ---------- ---------
Acquisition-related items include legal and professional costs
of $145,000, which were incurred on the acquisition of OhmData,
Inc.
6. Net finance income/(costs) (pre-exceptional items)
Unaudited Audited
2014 2013
$'000 $'000
-------------------------------------- ---------- --------
Interest receivable - bank 58 52
Exchange gain 526 -
-------------------------------------- ---------- --------
Finance income 584 52
-------------------------------------- ---------- --------
Unwind of discount on pledged shares (16) -
Exchange loss - (259)
Interest payable on bank borrowings (2) (12)
Bank charges (9) (23)
-------------------------------------- ---------- --------
Finance costs (27) (294)
-------------------------------------- ---------- --------
Net finance income/(costs) 557 (242)
-------------------------------------- ---------- --------
7. Income tax
Unaudited Audited
2014 2013
$'000 $'000
---------------------------- ---------- --------
Current tax expense
Current year 478 -
Adjustment for prior years 575 263
---------------------------- ---------- --------
Total tax (charge)/credit 1,053 263
---------------------------- ---------- --------
8. Loss per share
Basic loss per share
Basic loss per share is calculated based on the loss
attributable to ordinary shareholders and the weighted average
number of
ordinary shares outstanding:
Unaudited Audited
2014 2013
$'000 $'000
-------------------------------------------- ---------- --------
Loss for the year attributable to ordinary
shareholders 38,307 19,731
-------------------------------------------- ---------- --------
2014 2013
Weighted average number of ordinary shares Shares Shares
'000s '000s
At the start of the year 23,693 21,421
Effect of shares issued in the year 325 586
-------------------------------------------- ------- -------
Weighted average number of ordinary shares
during the year 24,018 22,007
-------------------------------------------- ------- -------
$ $
---------------------- ----- -----
Basic loss per share 1.59 0.90
---------------------- ----- -----
Adjusted loss per share
Adjusted loss per share is based on the result attributable to
ordinary shareholders before exceptional items,
acquisition-related
items and the cost of equity-settled share-based payments, and
the weighted average number of ordinary shares outstanding:
Unaudited Audited
2014 2013
$'000 $'000
----------------------------------------------- ---------- --------
Loss for the year attributable to ordinary
shareholders 38,307 19,731
Add back:
Exceptional items (1,441) (2,760)
Acquisition-related items (161) -
Equity-settled share-based payment (excluding
exceptional item) (11,907) (4,104)
----------------------------------------------- ---------- --------
Adjusted basic loss 24,798 12,867
----------------------------------------------- ---------- --------
$ $
------------------------- ----- -----
Adjusted loss per share 1.03 0.58
------------------------- ----- -----
Diluted loss per share
Due to the Group having losses in each of the years, the fully
diluted loss per share for disclosure purposes, as shown in the
Consolidated statement of profit and loss and other
comprehensive income, is the same as for the basic loss per
share.
9. Intangible assets
Other Development
intangible assets costs Software Total
$'000 $'000 $'000 $'000
------------------------ ------------------ ------------ --------- ---------
Cost
At 1 January 2013 2,308 6,304 995 9,607
Additions - externally
purchased - - 35 35
Additions - own work
capitalised - 7,443 - 7,443
At 31 December 2013
- Audited 2,308 13,747 1,030 17,085
------------------------ ------------------ ------------ --------- ---------
At 1 January 2014 2,308 13,747 1,030 17,085
Reclassification from
property, plant and
equipment - - 30 30
Acquisitions through
business combinations 846 - - 846
Additions - externally
purchased - - 103 103
Additions - own work
capitalised - 9,040 - 9,040
Effect of movement in
foreign exchange - - 26 26
At 31 December 2014
- Unaudited 3,154 22,787 1,189 27,130
------------------------ ------------------ ------------ --------- ---------
Amortisation
At 1 January 2013 (94) (3,850) (122) (4,066)
Amortisation charge
for the year (766) (3,670) (482) (4,918)
Effect of movement in
foreign exchange - - (9) (9)
At 31 December 2013
- Audited (860) (7,520) (613) (8,993)
------------------------ ------------------ ------------ --------- ---------
At 1 January 2014 (860) (7,520) (613) (8,993)
Reclassification from
property, plant and
equipment - - (19) (19)
Amortisation charge
for the year (935) (6,855) (493) (8,283)
Effect of movement in
foreign exchange - - (21) (21)
At 31 December 2014
- Unaudited (1,795) (14,375) (1,146) (17,316)
------------------------ ------------------ ------------ --------- ---------
Net book value
At 31 December 2013
- Audited 1,448 6,227 417 8,092
------------------------ ------------------ ------------ --------- ---------
At 31 December 2014
- Unaudited 1,359 8,412 43 9,814
------------------------ ------------------ ------------ --------- ---------
The carrying amount of the intangible assets is allocated across
cash-generating units ("CGUs"). A CGU is defined as the smallest
group of assets that generate cash inflows from continuing use,
that are largely independent of the cash inflows of other assets or
groups thereof. The recoverable amount of the CGUs are determined
using Value In Use ("VIU") calculations. As at 31 December 2014 the
Group had one CGU, the DConE CGU. The Group's patented DConE
replication technology forms the basis of the Group's products for
the ALM market. This technology also underpins the
enterprise-ready, Apache-Hadoop products we have developed for the
Big Data market.
Other intangible assets arose as part of the acquisition of
OhmData, Inc. in June 2014 and AltoStor, Inc. in November 2012. The
intangibles arising as part of these acquisitions are allocated to
the DConE CGU. The recoverable amount of the DConE CGU has been
calculated on a VIU basis at both 31 December 2014 and 31 December
2013. These calculations use cash flow projections based on
financial forecasts and appropriate long-term growth rates. To
prepare VIU calculations, the cash flow forecasts are discounted
back to present value using a pre-tax discount rate of 10.0% (2013:
8.0%). The Directors have reviewed the recoverable amount of the
CGU and do not consider there to be any indication of
impairment.
Development costs are predominantly capitalised staff costs
associated with new products and services. Development costs are
allocated to the DConE CGU the recoverable amount of which has been
determined on a VIU basis as described above.
On 19 September 2012 WANdisco International Limited purchased an
item of software from SyntevoGmbH for consideration of $1 million.
This software became fully amortised during the year ended 31
December 2014.
The above amortisation charge on intangible assets are included
in operating expenses in the Consolidated statement of profit and
loss and other comprehensive income.
10. Trade and other receivables
Unaudited Audited
2014 2013
$'000 $'000
------------------------- ---------- --------
Trade receivables 4,440 4,511
Other receivables
- Unbilled receivables 8,005 4,668
- Other receivables 556 706
------------------------- ---------- --------
Total other receivables 8,561 5,374
------------------------- ---------- --------
Corporation tax 1,056 263
Prepayments 395 363
------------------------- ---------- --------
14,452 10,511
------------------------- ---------- --------
Included in other receivables is $4,895,000 which falls due
after more than one year (2013: $3,252,000).
11. Deferred income
Deferred income represents contracted sales for which services
to customers will be provided in future years.
Unaudited Audited
2014 2013
The movement on the deferred income balance $'000 $'000
is as follows:
--------------------------------------------- ----------- --------
At 1 January 13,124 6,368
Customer bookings 17,363 14,768
Released to revenue (11,218) (8,012)
---------------------------------------------- ---------- --------
At 31 December 19,269 13,124
---------------------------------------------- ---------- --------
Included in the 31 December 2014 year-end balance are amounts
falling due after more than one year of $10,792,000 (2013:
$6,844,000).
12. Acquisition
On 27 June 2014, the Group acquired 100% of the share capital of
OhmData, Inc. ("OhmData") for a total consideration of $846,000.
$526,000 was issued in shares at the date of the acquisition, and
$320,000 is deferred share consideration.
OhmData is engaged in the development of database solutions
based on the Apache HBase database.
Share type Unaudited
Number Fair
of value
shares $'000
Consideration - equity 60,040 526
Deferred consideration - equity 41,170 320
---------------------------------------- -------- ---------
Total consideration - equity 101,210 846
---------------------------------------- -------- ---------
Provisional net assets assumed at date
of acquisition
Net assets - Intangible assets (846)
---------------------------------------- -------- ---------
Goodwill arising on acquisition -
---------------------------------------- -------- ---------
The following table shows the shares that were issued as part of
the transaction and the fair value of those shares at the
acquisition
date:
Share type Unaudited
Number Fair
of value
shares $'000
Shares issued at acquisition 60,040 526
Pledged shares 41,170 320
Restricted shares 173,266 1,518
------------------------------ -------- ---------
Total shares issued 274,476 2,364
------------------------------ -------- ---------
- The pledged shares have been treated as deferred consideration
and will be released to the OhmData founders 15 months after the
acquisition date, but contain no contingency clauses related to
post acquisition performance.
- The restricted shares have been treated as equity-settled
share-based payment charges as they have conditions attached
relating to employment post acquisition, and have been accounted
for under IFRS 2, "Share-based Payment".
- The equity-settled share-based payment charges will be
recognised over the 2 1/2 year vesting period of the shares.
- Prior to acquisition, OhmData, Inc. generated revenue of
$negligible and losses of $94,000.
- OhmData did not generate any revenues, profits or losses
during the period from acquisition to 31 December 2014.
13. Share-based payment
WANdisco plc operates share option plans for qualifying
employees of the Group. Options in the plans are settled in equity
in the Company and are normally subject to a vesting schedule but
not conditional on any performance criteria being achieved.
The terms and conditions of the share option grants are detailed
in the Group financial statements for the year ended 31 December
2013.
Unaudited Audited
2014 2013
Analysis of equity-settled share-based $'000 $'000
payment charge
---------------------------------------------- ---------- --------
Exceptional equity-settled share-based
payment charge in relation to acquisitions:
- AltoStor, Inc. 659 1,459
- TortoiseSVN.net 290 236
- OhmData, Inc. 492 -
---------------------------------------------- ---------- --------
Total equity-settled share-based payment
charge in relation to acquisitions 1,441 1,695
Non-exceptional equity-settled share-based
payment charge 11,907 4,104
---------------------------------------------- ---------- --------
Total equity-settled share-based payment
charge 13,348 5,799
---------------------------------------------- ---------- --------
Unaudited Audited
2014 2013
Number of share options outstanding: Number Number
-------------------------------------- ---------- ----------
Balance at the start of the year 3,305,201 2,681,470
Granted 1,878,561 1,046,870
Forfeited (414,100) (201,372)
Exercised (467,995) (221,767)
-------------------------------------- ---------- ----------
Balance at the end of the year 4,301,667 3,305,201
Exercisable at the end of the year 675,631 364,465
Vested at the end of the year 1,081,844 1,075,550
-------------------------------------- ---------- ----------
Unaudited Audited
2014 2013
Weighted average exercise price for: $ $
-------------------------------------- ---------- --------
Shares granted 3.25 11.97
Shares forfeited 11.06 5.52
Options exercised 0.99 2.46
-------------------------------------- ---------- --------
Exercise price in the range:
From 0.16 0.16
To 20.96 22.37
-------------------------------------- ---------- --------
Unaudited Audited
2014 2013
Years Years
--------------------------------------------- ---------- --------
Weighted average contractual life remaining 6.5 7.8
--------------------------------------------- ---------- --------
The fair value of each option grant is estimated on the date of
grant using the Black-Scholes option-pricing model with the
following weighted average assumptions:
Unaudited Audited
2014 2013
---------------------------------------- ---------- --------
Dividend yield 0.00% 0.00%
Risk-free interest rate 2.28% 2.19%
Stock price volatility 30% 30%
Expected life (years) 4.9 3.2
Weighted average fair value of options
granted during the year $7.61 $9.54
---------------------------------------- ---------- --------
- The dividend yield is based on the Company's forecast dividend
rate and the current market price of the underlying common stock at
the date of grant.
- Expected life in years is determined from the average of the
time between the date of grant and the date on which the options
lapse.
- Expected volatility is based on the historical volatility of
shares of listed companies with a similar profile to the
Company.
- The risk-free interest rate is based on the treasury bond
rates for the expected life of the option.
14. Contingent liabilities
The Group had no contingent liabilities at 31 December 2014
(2013: none).
15. Post-balance sheet events
On 23 January 2015 the Group announced its intention to raise
circa $25m (after expenses) by a conditional non-preemptive placing
of 4,798,859 new ordinary shares of 10 pence each in the capital of
the Company at a price of 375.00 pence per share. The conditions
were, inter alia, the passing of certain resolutions by the
shareholders of the Company.
On 17 February 2015, at a general meeting of the Company, the
shareholders approved the disapplication of pre-emption rights and
the allotment of the placing shares. On 18 February 2015 the
placing shares were admitted and dealing commenced and, as a
result, $26.1m cash (net of expenses) was raised.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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