TIDMDOTD
RNS Number : 4620S
dotDigital Group plc
16 November 2021
16 November 2021
Dotdigital Group plc
("Dotdigital" or the "Group")
Final Results for the year ended 30 June 2021
Dotdigital Group plc (AIM: DOTD), the leading 'SaaS' provider of
an omnichannel marketing automation and customer engagement
platform, announces its final audited results for the year ended 30
June 2021 ("FY21").
Financial Highlights
-- Organic revenue growth of 23% to GBP58.1m (FY20:
GBP47.4m)
* Recurring revenue as a percentage of total revenue
increased to 93% (FY20: 91%)
* Monthly ARPC(1) increased 16% to GBP1,251 (FY20:
GBP1,083 per month)
-- Adjusted EBITDA(2) grew 9% to GBP19.8m (FY20: GBP18.2m)
and adjusted operating profit(3) grew 5% to GBP13.7m
(FY20: GBP13.1m)
-- Adjusted EPS from continuing operations was 4.06p
(FY20: 3.90p)
-- Strong net cash balance at 30 June 2021 of GBP32.0m
(30 June 2020: GBP25.4m)
-- The Board proposes to pay a final dividend of 0.86p
per ordinary share, in line with its progressive
dividend policy (FY20: 0.83p)
Operational Highlights
-- Acceleration of marketing digital transformation spurred
by pandemic, driving significant increase in omnichannel
offering, particularly SMS
-- Organic international revenue increased 22% to GBP18.0m
(FY20: GBP14.8m), with international sales representing
31% of total sales (FY20: 31%)
* APAC region delivered highest growth at 47%, albeit
from a smaller base
-- Strong demand from UK customers for multi-channel functionality
-- Revenue through connectors into strategic partners grew
14% to GBP25.4m (FY20: GBP22.3m), evidencing strength
of relationships and continued refinement of joint go-to-market
strategies
-- Product innovation continues to drive value with functionality
recurring revenue (from license fees and enhanced bolt-on
functionality) up 31% to GBP18.9m (FY20: GBP14.4m)
-- Continued focus on operational excellence in areas of
privacy, security and sustainability
* First customer engagement platform awarded ISO27701
on privacy information management, ISO27001
information security management and ISO14001
environment management certifications
Outlook
-- Normalisation of trading environment continues with transition
out of global lockdowns; Board continues to assess potential
varied effects across broad and diversified customer
base
-- High level of confidence in delivery of management expectations
for the new financial year following a strong start
Milan Patel, CEO of Dotdigital, commented:
"We are pleased to report a record year for Dotdigital,
delivering double digit organic growth and enhanced profitability
as a result of an accelerated uptake of our omnichannel offering.
This performance is testament to our robust business model, as we
navigated and supported our customers through the pandemic, and the
efforts of our talented and dedicated team.
"The investments we have made in our Engagement Cloud platform,
international hubs and partner network are bearing fruit. Our
powerful data-driven marketing automation platform continues to
excel in the market as a result of its feature-rich yet
user-friendly functionality, and we are well positioned to support
a growing number of customers as they look to drive deeper, more
personal engagement with their consumers through digital
marketing.
"As we enter the new year, trading remains strong. Our healthy
balance sheet, strong recurring revenues and cash generation
provides the flexibility to invest in our growth strategy, giving
the Board confidence in the Group's long-term prospects."
Investor Presentation :
https://www.dotdigitalgroup.com/events-presentations/
Investor Video: A highlights video is available to watch here:
https://bit.ly/DOTD_FY21_overview
Notes
1. ARPC means Average Revenue Per Customer (including new
customers added in period and existing customers)
(2. EBITDA is earnings before interest, tax, depreciation and
amortisation and adjusted for acquisition costs and share-based
payments)
(3.) (Operating profit is adjusted for acquisition costs and
share-based payments)
For further information please contact:
Dotdigital Group Plc Tel: 020 3953 3072
Milan Patel, CEO InvestorRelations@dotdigital.com
Paraag Amin, CFO
Alma PR (Financial PR) Tel: 020 3405 0210
Hilary Buchanan dotdigital@almapr.co.uk
David Ison
Faye Calow
Canaccord Genuity (Nominated Advisor Tel: 020 7523 8000
and Joint Broker)
Bobbie Hilliam
Georgina McCooke
Jonathan Barr, Sales
finnCap (Joint Broker) Tel: 020 7220 0500
Stuart Andrews, Corporate Finance
Rhys Williams, Sales
Singer Capital Markets (Joint Broker) Tel: 020 7496 3000
Shaun Dobson, Head of Corporate Finance
Alex Bond, Corporate Finance
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED TO
CONSTITUTE INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE
MARKET ABUSE REGULATION (EU) NO. 596/2014. UPON THE PUBLICATION OF
THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE
IN THE PUBLIC DOMAIN.
CHAIRMAN'S STATEMENT
Overview
To have delivered our strongest year to date amid
pandemic-related challenges, while managing a pronounced increase
in the uptake of newer channels beyond email, is testament to the
exceptional people at Dotdigital.
The effectiveness of our model and the continued desirability of
our product are evident in the numbers, but without the hard work
and adaptability of our teams, we would not have been able to
record such a positive performance. On behalf of the Board, I would
like to thank everyone involved in the business for their
contributions.
After a period of disruption in Q4 of the previous financial
year, we have gone from strength to strength, facilitated by the
acceleration of digital transformation brought about by the
pandemic. While the mix of channel usage varied as our customers'
circumstances changed and evolved, we saw consistent levels of
overall demand, aided by the diversity of sectors and locations
across our customer base. This was achieved while helping our
customers that struggled where we could.
Although restrictions are easing and vaccination programmes are
under way in most territories, Covid-19 will continue to be a risk
factor for the foreseeable future, and not all its after effects
will be easy to foresee. We therefore need to continue to monitor
its impact on our customer base, and be ready to respond
accordingly.
That said, we have traded well since the onset of the pandemic,
proving that the inherent versatility of our offering means we can
help organisations, in both good and more challenging times. As we
emerge from the worst of the pandemic and with a robust model and
strong financial position, I am confident that if we continue to
support our customers and execute our strategy in a measured and
purposeful way, we will remain on course to meet our growth
ambitions.
Strategic Progress
This financial year saw a significant increase in appetite for
our omni-channel offering, with SMS proving particularly popular
and more and more organisations choosing to use push messaging,
social, WhatsApp for business and live chat, in line with the
growing demand among consumers for alternative and more personal
means of engagement.
The team has built an advanced data-led platform that is
tailored to the increasingly sophisticated needs of the modern
marketeer and continues to do an excellent job of penetrating
international markets, with all three of our regions demonstrating
good levels of growth in the year. Performance in APAC was
particularly strong, supplemented by the growing conversion of
pipelines in new markets such as Japan.
Our relationships with strategic partners - a key route to
market for Dotdigital - have deepened considerably, enabling better
collaboration in driving awareness and ultimately sales across
their customer bases. As a result, we saw encouraging growth in
revenue from Magento, Shopify, BigCommerce and Microsoft Dynamics -
our four most valuable partnerships.
On the product front, we have continued to focus on building out
our data and personalisation capabilities, and firmly believe we
now have one of the most powerful, feature-packed and yet
easy-to-use marketing automation platforms, capable of delivering
unparalleled insight and strong return on investment without the
need for a high level of technical expertise.
Sustainability
At the end of 2020, we set out to broaden and accelerate
sustainability improvements throughout the organisation with a view
to reducing the impact of our operations on the environment. Known
internally as the 'dotgreen' initiative, it marked the point where
sustainability was elevated from being an important consideration
to a guiding principle for everything we do.
In the time since, our teams have worked tirelessly to make our
infrastructure and working practices more environmentally friendly.
I am pleased to report that, as a result, we can now claim to be
the world's first carbon-neutral marketing automation platform.
We also obtained ISO 14001, the universally recognised
certification awarded to organisations that meet a high standard of
environmental management, became a Corporate Member of the Woodland
Trust and, most recently, signed the Terra Carta, a part of HRH The
Prince of Wales' Sustainable Markets Initiative that offers the
basis of a recovery plan to 2030 with nature, people and planet at
its heart.
In a relatively short space of time and against the backdrop of
a pandemic, we have made significant, meaningful changes to become
a more responsible business. While we are proud of our
achievements, we know there is still room for improvement, and
remain committed to driving further change to ensure we play our
part in safeguarding the future of our planet.
People
Our people are the lifeblood of Dotdigital. Ensuring we have the
right balance of technological prowess, interpersonal skills and
commercial acumen across our organisation is vital to the delivery
of our strategy, and to that end we continued to strengthen our
workforce in the period. Most notably, our sales function grew and
became more specialised to meet the growing demand for our product,
and we bolstered our marketing and customer care teams with the
internal promotion of a new Global Vice President of Marketing and
the external appointment of a new Head of Customer Success EMEA
from a leading competitor.
As we move through the new financial year, we will continue to
hire high-quality individuals that bring new skills and experience
into the Group while increasing management bandwidth where
necessary to enable us to reach our strategic goals more
efficiently. At the same time, we will continue to invest in our
existing colleagues, cementing Dotdigital as one of the best places
to work in the industry from both a development and quality of life
perspective.
Dividend
The Board has agreed to maintain a progressive dividend in line
with Group EBITDA growth. Therefore, subject to approval at the AGM
in December 2021, the Board proposes that the Group will pay a
final dividend of 0.86p per ordinary share (FY20: 0.83p).
Michael O'Leary
Non-Executive Chairman
16 November 2021
CHIEF EXECUTIVE OFFICER'S REPORT AND FINANCIAL REVIEW
Overview
I am pleased to report on a record year for Dotdigital,
delivering our strongest financial performance to date and
demonstrating the solidification of our transformation to an
omni-channel platform.
This positive performance has been achieved in what has been a
turbulent environment as a result of the Covid-19 pandemic, testing
both our customers and our own resilience. We are the strong
business we are today because of our passionate team who continued
to innovate and stay motivated, supporting our customers through
difficult times and taking our business forward to new heights.
Backed by our solid financial footing, we did not have any staff on
furlough and we continued to add to our teams across our global
regional operations.
During the year we saw increased uptake of our digital marketing
platform, from both new and existing customers, resulting in
organic revenue growth of 23% to GBP58.1m (FY20: GBP47.4m) and
adjusted EBITDA growth of 9% to GBP19.8m (FY20: GBP18.2m). The
translation of this financial performance into platform volume
growth demonstrates the scale of the Group's reach: 24 billion
emails were sent via the platform, an increase of 15% YoY,
complemented by an increased uptake of other channels including
mobile messages, with a strong 28% YoY uplift in SMS, taking the
total number of SMS sent to 665 million (FY20: 520 million).
Underpinning this growth is the Group's recurring SaaS model,
with 93% of total revenue comprising of recurring revenue. The
Group is cash generative and maintains a strong balance sheet, with
no debt and net cash balances of GBP32.0m at year end (FY20:
GBP25.4m), giving the Group visibility and scope to continue to
invest in order to drive long-term, sustainable growth.
We continued to enhance our platform functionality during the
year with a focus on driving greater data and automation
capabilities. Recurring revenues derived from enhanced product
functionality grew by 31% to GBP18.9m (FY20: GBP14.4m),
demonstrating the value derived from our customer-centric R&D
programme.
We remain committed to our responsibility and sustainability
ethos by ensuring that all our stakeholders, including employees,
partners and the broader community, are central to our decision
making. We have made significant strides against this agenda,
recognising that we will always be pushing for better.
The digital transformation of marketing operations across all
sectors is happening at pace, and we saw an acceleration of this
during the year as businesses turned to digital as the primary
means of engaging with existing and prospective customers. Our
powerful data-driven platform is delivering results at scale,
supported by a diversified customer base with broad sector exposure
and providing us with a significant opportunity to continue our
growth ambitions
Business Review
Dotdigital is focused on empowering marketers to connect with
customers through its powerful automation platform that unifies all
digital channels. Our Engagement Cloud provides the tools to allow
marketing teams to launch highly targeted and relevant campaigns to
customers and prospects with personalised engagement at every
touchpoint - the right message, at the right time, through the
right channel. The result is faster and more effective marketing
campaigns with increased engagement and demonstrable ROI.
The use cases of the Group's offering are wide and global,
however the Group remains focused on mid-market and enterprise
clients across target verticals including retail, non-profit,
education, financial services and travel. The Group's foundations
and particular strengths are in email and deep integrations into
strategic partners within e-commerce and CRM.
Market
The digital transformation of the marketing industry continues
to progress, with digital marketing budgets increasingly taking
share of overall marketing budgets. The pace of this transition
accelerated in the lockdown environment as organisations had no
alternative but to engage with their end users via digital
channels. As we move through various stages of lockdown easing
across our global operations, the allocation of channels varies but
the overall shift continues its course.
With the rise of digital marketing, the sophistication of
marketeers has also increased. We've seen a greater emphasis on
data and personalisation by our customers and our platform is
assisting in reducing the gap between marketeers' aspirations and
the reality of what they can achieve through our platform. One
result is an increasing trend towards direct-to-consumer
engagement. Through our platform, brands can devise more informed
marketing strategies with actionable insights and analytics that
help them develop a deeper understanding of their end customer and
drive a positive ROI.
Growth Strategy
Dotdigital's organic growth strategy continues to be focused
around its three core pillars: geographic, product innovation and
strategic partnerships.
Three Growth Pillars
1. Geographic
Despite the wider economic impact of Covid-19, all key global
regions achieved strong revenue growth in the period, continuing
Dotdigital's diversification of international exposure. This growth
continues to be evident in that revenue from outside the UK was 31%
of Group revenue for the year. We expect to continue this growth as
we invest further in our key international regions. We saw strong
demand for our multichannel functionality from our UK customers
which we expect to continue, although it will be surpassed by
growth in our international markets.
International expansion is a key tenet of our growth strategy
and has been a significant area of investment in the period. We
have strengthened our presence and enhanced our prospects across
our key territories as reflected in the growth across our key
international regions. We expect to further build on this momentum
and continue organic growth as we move into FY22 and beyond.
EMEA
Revenues were up by 23% to GBP44.6m compared to GBP36.3m for the
same period in FY20. We saw a normalisation of sales cycles in the
region, particularly in the second half of the year, as pandemic
restrictions broadly began to ease in this region. We have also
seen an uptick in momentum both from a pipeline and sales
conversion perspective and expect to see this trend continue as
lockdown measures across the region continue to ease.
Take-up of omnichannel marketing solutions was strong in this
region, particularly with SMS, driven by strong demand from our
customers in the education and healthcare sectors as they
accelerated their adoption of online tools to engage with their
customer base during the pandemic.
North America
Revenues for North America were up 19% to US$12.5m compared to
US$10.5m for FY20. This was driven by new customer wins, reflecting
our growing brand awareness in this region.
North America presents the largest market opportunity for the
Group, and we expect to increase our investment in this region to
solidify our foundations to capture more opportunities. Our focus
remains on growing and cementing relationships with partners and
customers to help us build our presence while increasing brand
awareness. In addition, we will invest in strengthening the
customer facing teams and bolster the management structure in this
region through creating an additional layer to create bandwidth and
scale.
APAC
The APAC region delivered the highest growth in revenue in the
year, albeit from a smaller base, as revenues were up 47% to A$7.7m
vs A$5.2m in FY20, evidencing Dotdigital's increasing presence in
this region and reflecting previous periods of investment. We
increased our investment in this market in the period through
expanding the team further into Asia. We remain mindful of the
ongoing challenges in the region as a result of the Covid-19
lockdown which presents a degree of uncertainty for our end
customers, however we see a strong pipeline of opportunities in
Japan and the Far East, through our team based in Singapore.
2. Product innovation
The rate at which the platform is developing means it continues
to be at the forefront of the customer engagement category.
Recurring revenue from enhanced product functionality and upgrades,
taken by both existing and new customers, increased by 31% to
GBP18.9m in the period vs GBP14.4m in FY20, illustrating continued
growth in the number of customers using our enhanced functionality,
including an increasing number of data connectors through our IPaaS
(Integrations Platform as a Service) capabilities.
We have continued to educate the market through live online
sessions and digital marketing content on how to adopt new features
to enhance messaging. The platform continues to go from strength to
strength, differentiated by our offering of an in-house platform
and automation tools across all channels. The competitive advantage
of our offering and our ability to deliver on the needs of our
customers is evidenced in our strong performance this year and the
increased uptake of multichannel solutions by existing and new
customers alike. As we go into the new financial year the focus
will be on platform adoption from the additional functionality
added in the period.
Customer-centred R&D investment in the period was GBP6.8m
compared to GBP6.5m in FY20, consistent with management
expectations. We continued to execute against our product strategy
and our roadmap has continued to develop as anticipated.
Our focused areas of innovation are:
-- Data and intelligence - joining all data together to create
a single customer view and help our customers better target
their campaigns from a personalisation perspective. We
have dedicated a great deal of resource to this in response
to increasingly sophisticated customer requirements and
will continue to do so with further upgrades to the platform.
-- Marketing automation - harnessing artificial intelligence
and machine learning across targeted parts of the platform's
architecture. This included the launch of sector-tailored
product packages for commerce customers and enhanced product
recommendations capabilities.
-- Building out further omnichannel functionality - to assist
businesses through the full customer journey at every
touch point. This included the launch of a new live chat
solution through the Engagement Cloud and additional SMS
capabilities, with an increase in take-up of both in the
period.
3. Developing strategic partnerships
We have continued to invest in all our strategic partner
relationships, which are a key aspect of our growth strategy as
they help us to raise brand awareness, in the regions and verticals
in which we operate. Revenue through connectors into strategic
partners was up 14% to GBP25.4m vs GBP22.2m in FY20, evidencing the
progress we have made in developing our relationships with
strategic partners and refining our joint go-to-market
strategies.
Continued growth in the Magento space was driven by enhanced
brand awareness coupled with the additional functionality that we
have developed for e-commerce merchants. Sign-up of customers in
all regions remains strong, with a net new 66 Magento customers
joining the platform in the period, taking the total number to 782.
Revenue from Magento customers grew 11% to GBP14.3m from GBP13.0m
in FY20 and we look forward to the continued collaboration between
our respective teams to advance our joint marketing strategy and to
enhance development of our integration.
At the end of the financial year, we had 132 customers using the
Shopify connector compared to 83 this time last year, supporting
the continued strength of our relationship with this partner.
Revenue from Shopify customers grew 79% to GBP2.1m from GBP1.2m
last year as we saw an increasing pipeline of new customers from
the integration, built with Shopify Flow, which allows e-commerce
merchants a seamless connection to easily deploy campaigns from the
Dotdigital platform.
We saw a 249% increase in revenue from BigCommerce connected
customers in the year to GBP0.4m from GBP0.1m. As BigCommerce's
global elite partner through the period, we continue to deepen our
strategic relationship, formulating a joint go-to-market plan
through offers for e-commerce merchants, and joint efforts to the
user. This plan will enable us to increase our addressable market
across all regions, and we are already seeing an increasing demand
to use the integration as a result.
As evidence of our commitment to our B2B Marketing customers, we
hired a partner manager to build our strategic relationship with
Microsoft for our integration into Dynamics 365 in North America.
Revenues from customers using our Dynamics connector increased 12%
to GBP4.3m in the year vs GBP3.8m in FY20; we believe that this
significant opportunity to develop a meaningful partnership with a
major North American player has only begun to be recognised and we
look forward to building on this relationship in future.
Building on our integration success, we have created a
repeatable blueprint for building integrations into the wider
connected ecosystem faster and more agile than before. Most
recently, we launched integrations into Shopware 6, Google Sheets,
Eventbrite and Typeform, with more planned on the roadmap for
FY22.
M&A
To support the Group's organic growth strategy, the Board
continues to evaluate the market for complementary acquisitions,
backed by the Group's robust financial position. The Board's
acquisition strategy is focused on set criteria, being: synergy
technology for new revenue streams; bolt-on functionality to
accelerate platform development, new talent acquisition and the
expansion of expertise, and extension of the customer base in
strategic territories.
FINANCIAL REVIEW
Revenues
The Group achieved continuing operations revenue growth of 23%
(FY20: 12%), which delivered record overall revenues of GBP58.1m,
driven in particular by an increased volume of ARN (alerts,
reminders and notifications) SMS messaging, as the effects of the
pandemic continued throughout our financial year. Recurring
revenues comprise 93% of the total, whilst international revenues
continue to account for 31% of the total (FY20: 31%).
Business model
The Group generates the majority of its revenues from annual
message plans which are recognised equally over the life of the
contract. In addition, we sell upgrade packages to customers
allowing them to use additional modules and features of our
platform. For more sophisticated customers we offer customised
functionality and integrations so that they can maximise the use of
their customer data. We also have professional services contracts
which are recognised as revenue as the work is performed. Over the
past year we have built other messaging channels into our core
platform, including SMS and Live Chat, and access to these channels
are sold separately.
Gross margin
The gross margin for the period for continuing operations was
82% (FY20: 92%). Whilst the gross margin for email and standard
channels remained above 90%, the decline in overall group gross
margin comes from the growth of premium messaging channels,
(routing purchased via a third party on a per message basis), such
as SMS.
Operating expenses
Adjusted operating profit from continuing operations grew by 5%
from GBP13.1m to GBP13.7m. Operating expenses as a percentage of
revenues dropped from 64% to 59%, reflecting some investment back
into the business. The Group continues to invest in people in the
areas of development, sales and marketing, particularly within the
high-growth global offices, to continue enhancing and adding to the
product suite.
Balance sheet
There was strong cash management in the year with net cash
generated from continuing operations of GBP20.7m (FY20: GBP18.2m).
The cash balance at the end of the period was GBP32.0m (FY20:
GBP25.4m). The Group continues to be debt free and maintains a
healthy balance sheet. A combination of a highly efficient cash
collection process and an incentivisation push to move more
customers onto Direct Debit and other automated payment collection
methods helped with the year-end position.
Trade receivables have only grown by 5% in the year, reflecting
revenue growth and good cash management. Overall receivables have
grown 3% due to the deferment of marketing expenditure such as
trade shows and conferences, which have been postponed due to the
pandemic, and related deferred commission on the sale of our
products.
The Group continues to invest heavily in the platform to
increase functionality around marketing automation, increasing the
number of messaging channels and surfacing data and providing
insights for our customers to provide excellent customer
engagement. This continued investment is demonstrated by the
increase in product development to GBP6.8m (FY20: GBP6.5m).
Tax
Profitability from continuing operations continues to grow. This
is reflected within the tax charge, which is now GBP1.0m with an
effective tax rate of 8%, with a lower than standard rate due to
enhanced R&D tax credits.
EPS
In the year the continued operations adjusted basic EPS
increased to 4.12p (FY20: 3.95p) and adjusted diluted EPS increased
to 4.06p (FY20: 3.90p), despite the higher effective tax rate of
8%, (FY20: 5%). Basic EPS also increased to 3.85p (FY20:
3.68p).
Dividend policy
As announced last year, the Board conducted its review of its
organic business plan for the following three years. This included
evaluating the cash needs required for opportunities in organic
growth to increase shareholder value and capital expenditure. The
Board decided that it will continue to keep a progressive dividend
in line with EBITDA growth. Therefore, subject to approval at the
AGM in December 2021, the Board proposes that the Group will pay a
final dividend of 0.86 pence per ordinary share (FY20: 0.83p), to
be payable at the end of January 2022.
Current Trading and Outlook
During the year the Group has significantly advanced its
omni-channel marketing platform vision with strategic progress
against all tenants of our growth strategy, delivering a record
financial performance. We have progressed our geographic expansion
with stronger market presence in North America, EMEA and APAC; our
strategic partner relations have deepened with better collaboration
in driving brand awareness to our end markets; and we've added new
capabilities to our platform to drive broader customer engagement.
The focus remains in driving an increased adoption of functionality
within the platform.
As we enter the new year, we do so within a more normalised
trading environment as our end markets transition out of the
immediate implications from the pandemic. Trading remains in line
with management expectation and our technology platform is uniquely
positioned to capture the transition to online marketing across the
mid-tier enterprise space. Whilst we remain mindful of the wider
economic uncertainty, our healthy balance sheet, strong recurring
revenues and cash generation provides the flexibility to invest in
our growth strategy. The Board is therefore confident in the
Group's long-term growth prospects.
Milan Patel Paraag Amin
Chief Executive Officer Chief Financial Officer
16 November 2021 16 November 2021
DOTDIGITAL GROUP PLC
CONSOLIDATED INCOME STATEMENT
FOR THE YEARED 30 JUNE 2021
Restated
30.6.21 30.6.20
GBP'000 GBP'000
Notes
CONTINUING OPERATIONS
Revenue from contracts with customers 58,124 47,404
Cost of sales 6 (10,356) (3,899)
------------- -----------
Gross profit 47,768 43,505
Administrative expenses 6 (34,089) (30,443)
OPERATING PROFIT FROM CONTINUING OPERATIONS PRE SHARE-BASED
PAYMENTS AND EXCEPTIONAL COSTS 13,679 13,062
Share based payments 25 (625) (682)
Exceptional costs 4 (188) (136)
------------- -----------
OPERATING PROFIT FROM CONTINUING OPERATIONS 12,866 12,244
Finance costs 5 (74) (98)
Finance income 5 20 40
------------- -----------
PROFIT BEFORE INCOME TAX FROM CONTINUING OPERATIONS 6 12,812 12,186
Income tax expense 7 (1,322) (1,219)
------------- -----------
Profit for the year from continuing operations 11,490 10,967
Loss for the year from discontinuing operations 10 (899) (378)
============= ===========
Profit for the year attributable to the owners of the parent 10,591 10,589
============= ===========
Earnings per share from all operations (pence per share)
Basic 9 3.55 3.55
Diluted 9 3.50 3.50
Adjusted Basic 9 3.82 3.95
Adjusted Diluted 9 3.76 3.90
Earnings per share from continuing operations (pence per share)
Basic 9 3.85 3.68
Diluted 9 3.79 3.63
Adjusted Basic 9 4.12 3.95
Adjusted Diluted 9 4.06 3.90
------------- -----------
Earnings per share from discontinued operations (pence per share)
Basic 9 (0.30) (0.13)
Diluted 9 (0.30) (0.13)
Adjusted Basic 9 (0.30) (0.00)
Adjusted Diluted 9 (0.30) (0.00)
=============
DOTDIGITAL GROUP PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 30 JUNE 2021
Restated
30.6.21 30.6.20
GBP'000 GBP'000
PROFIT FOR THE YEAR 10,591 10,589
OTHER COMPREHENSIVE INCOME
Items that may be subsequently reclassified to profit or loss:
Exchange differences on translating foreign operations (87) 34
--------------- ---------
Total comprehensive income attributable to:
Owners of the parent 10,504 10,623
=============== =========
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
Comprehensive income from continuing operations 11,403 11,001
Comprehensive loss from discontinued operations (899) (378)
=============== =========
DOTDIGITAL GROUP PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
30 JUNE 2021
Restated Restated
30.6.21 30.6.20 30.6.19
GBP'000 GBP'000 GBP'000
Notes
ASSETS
NON-CURRENT ASSETS
Goodwill 11 9,680 9,680 9,680
Intangible assets 12 16,134 14,059 11,702
Property, plant and equipment 13 3,972 5,262 1,037
------------- ------------ ---------
29,786 29,001 22,419
------------- ------------ ---------
CURRENT ASSETS
Trade and other receivables 14 13,350 12,987 12,222
Cash and cash equivalents 15 31,951 25,383 19,320
------------- ------------ ---------
45,301 38,370 31,542
------------- ------------ ---------
TOTAL ASSETS 75,087 67,371 53,961
============= ============ =========
EQUITY ATTRIBUTABLE TO THE
OWNERS OF THE PARENT
Called up share capital 16 1,494 1,493 1,490
Share premium 17 7,124 6,967 6,791
Reverse acquisition reserve 17 (4,695) (4,695) (4,695)
Other reserves 17 3,066 1,600 910
Retranslation reserve 17 (37) 50 16
Retained earnings 17 54,081 45,655 36,971
------------- ------------ ---------
TOTAL EQUITY 61,033 51,070 41,483
LIABILITIES
NON-CURRENT LIABILITIES
Lease liabilities 19 2,489 3,399 -
Deferred tax 21 1,207 1,983 1,377
------------- ------------ ---------
3,696 5,382 1,377
CURRENT LIABILITIES
Trade and other payables 18 9,334 9,796 11,096
Financial liabilities:
* Interest bearing loans and borrowings - - 5
* Lease liabilities 19 934 1,068 -
Current tax payable 90 55 -
------------- ------------ ---------
10,358 10,919 11,101
------------- ------------ ---------
TOTAL LIABILITIES 14,054 16,301 12,478
------------- ------------ ---------
TOTAL EQUITY AND LIABILITIES 75,087 67,371 53,961
============= ============ =========
DOTDIGITAL GROUP PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 30 JUNE 2021
Called
up share Retained Share
capital earnings premium
GBP'000 GBP'000 GBP'000
Balance as at 1 July 2019, as
previously reported 1,490 37,161 6,791
Impact of correction of errors - (190) -
(note 30)
Restated balance at 1 July 2019 1,490 36,971 6,791
Transactions with owners (restated)
Issue of share capital 3 - 176
Dividends - (1,996) -
Adjustments in relation to IFRS - 61 -
16
Transfer in reserves - 30 -
Deferred tax on share options - - -
Share-based payments - - -
---------- ----------- -------------
Transactions with owners (restated) 3 (1,905) 176
---------- ----------- -------------
Total comprehensive income (restated)
Profit for the year - 10,589 -
Other comprehensive income - - -
Total comprehensive income (restated) - 10,589 -
---------- ----------- -------------
Restated balance as at 30 June
2020 1,493 45,655 6,967
========== =========== =============
Balance as at 1 July 2020 1,493 45,655 6,967
Issue of share capital 1 - 157
Dividends - (2,472) -
Transfer in reserves - 307 -
Deferred tax on share options - - -
Share-based payments - - -
---------- ----------- -------------
Transactions with owners 1 (2,165) 157
---------- ----------- -------------
Profit for the year - 10,591 -
Other comprehensive income - - -
---------- ----------- -------------
Total comprehensive income - 10,591 -
---------- ----------- -------------
Balance as at 30 June 2021 1,494 54,081 7,124
========== =========== =============
DOTDIGITAL GROUP PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 30 JUNE 2021
CONTINUED...
Reverse Total
Retranslation acquisition Other equity
reserve reserve reserves
GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 1 July 2019, as
previously reported 16 (4,695) 720 41,483
Impact of correction of - - 190 -
errors (note 30)
Restated balance at 1 July
2019 16 (4,695) 910 41,483
Transactions with owners
(restated)
Issue of share capital - - - 179
Dividends - - - (1,996)
Adjustments in relation
to IFRS 16 - - - 61
Transfer in reserves - - (30) -
Deferred tax on share options - - 38 38
Share-based payments - - 682 682
Transactions with owners
(restated) - - 690 (1,036)
-------------- ------------- --------- -------------
Total comprehensive income
(restated)
Profit for the year - - - 10,589
Other comprehensive income 34 - - 34
-------------- ------------- --------- -------------
Total comprehensive income
(restated) 34 - - 10,623
-------------- ------------- --------- -------------
Balance as at 30 June 2020 50 (4,695) 1,600 51,070
============== ============= ========= =============
Balance as at 1 July 2020
Issue of share capital - - - 158
Dividends - - - (2,472)
Transfer in reserves - - (307) -
Deferred tax on share options - - 1,148 1,148
Share-based payments - - 625 625
Transactions with owners - - 1,466 (541)
-------------- ------------- --------- -------------
Profit for the year - - - 10,591
Other comprehensive income (87) - - (87)
-------------- ------------- --------- -------------
Total comprehensive income (87) - - 10,504
-------------- ------------- --------- -------------
Balance as at 30 June 2021 (37) (4,695) 3,066 61,033
============== ============= ========= =============
-- Share capital is the amount subscribed for shares at nominal value.
-- Retained earnings represents the cumulative earnings of the
Group attributable to equity shareholders.
-- Share premium represents the excess of the amount subscribed
for share capital over the nominal value net of the share issue
expenses.
-- Retranslation reserve relates to the retranslation of foreign
subsidiaries into the functional currency of the Group.
-- The reverse acquisition reserve relates to the adjustment
required to account for the reverse acquisition in accordance with
International Financial Reporting Standards.
-- Other reserves relate to the charge for the share-based
payment in accordance with IFRS 2and the transfer on the exercise
or lapsing of share options.
DOTDIGITAL GROUP PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARED 30 JUNE 2021
30.6.21 30.6.20
GBP'000 GBP'000
Notes
Cash flows from operating activities
Cash generated from operations 26 17,969 15,907
Tax paid (975) (124)
--------- ---------
Net cash generated from all operating activities 16,994 15,783
--------- ---------
Net cash generated from continuing operating activities 20,710 18,214
Net cash used in discontinued operating activities (3,716) (2,431)
--------- ---------
Cash flows from investing activities
Purchase of intangible fixed assets (6,870) (6,505)
Purchase of property, plant and equipment (169) (277)
Proceeds from sale of property, plant and equipment 2 -
Interest received 20 40
--------- ---------
Net cash flows used in investing activities (7,017) (6,742)
--------- ---------
Net cash used in from continuing investing activities (7,017) (6,741)
Net cash used in discontinued investing activities - (1)
--------- ---------
Cash flows from financing activities
Equity dividends paid (2,472) (1,996)
Payment of lease liabilities (1,182) (1,127)
Proceeds from share issues 158 179
Net cash flows used in financing activities (3,496) (2,944)
--------- ---------
Net cash used in continuing financing activities (3,446) (2,884)
Net cash used in discontinued financing activities (50) (60)
--------- ---------
Increase in cash and cash equivalents 6,481 6,097
Cash and cash equivalents at beginning of year 27 25,383 19,320
Effect of foreign exchange rate changes 87 (34)
--------- ---------
Cash and cash equivalents at end of year 27 31,951 25,383
========= =========
.
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 30 JUNE 2021
1. GENERAL INFORMATION
Dotdigital Group Plc ("Dotdigital") is a public limited company
incorporated in England and Wales and quoted on the AIM Market.
2. SEGMENTAL REPORTING
Dotdigital's single line of business remains the provision of
data-driven omni-channel marketing automation. The chief operating
decision maker considers the Group's segments to be by geographical
location, this being EMEA, US and APAC operations and by business
activity, this being core Engagement Cloud and CPaaS as shown in
the tables that follow:
Geographical revenue and results (from all operations)
30.6.2021
----------------------------------------
EMEA US APAC Total
GBP'000 GBP'000 GBP'000 GBP'000
Income statement
Revenue 47,024 9,264 4,262 60,550
Gross profit 36,878 8,241 3,864 48,983
Profit/(loss) before
income tax 11,699 609 (294) 12,014
--------- -------- -------- ---------
Total comprehensive
income attributable
to the owners of the
parent 10,436 379 (311) 10,504
========= ======== ======== =========
Financial position
Total assets 71,566 3,098 423 75,087
Net current assets/(liabilities) 33,942 1,387 (386) 34,943
========= ======== ======== =========
Revenue from external customers is attributed to the
geographical segments noted above based on the customers' location.
There were no customers who account for more than 10% of revenue
(2020: none).
All revenue is from contracts signed with new customers and
upgrades and additional functional recurring revenue sold to
existing contracted clients. Revenue from contracts is recognised
under percentage of completion method based on a percentage of
services performed to date as a percentage of the total services to
be performed.
30.6.2020
----------------------------------------
EMEA US APAC Total
GBP'000 GBP'000 GBP'000 GBP'000
Income statement
Revenue 43,810 8,325 2,777 54,912
Gross profit (restated*
see note 30) 35,181 7,420 2,496 45,097
Profit/(loss) before
income tax 11,256 598 (46) 11,808
--------- -------- -------- ---------
Total comprehensive
income attributable
to the owners of the
parent (restated** see
note 30) 10,429 291 (97) 10,623
========= ======== ======== =========
Financial position
Total assets 60,959 4,846 1,566 67,371
Net current assets/(liabilities)
(restated** see note
30) 26,915 1,006 (470) 27,451
========= ======== ======== =========
Revenue from external customers is attributed to the
geographical segments noted above based on the customers' location.
There were no customers who account for more than 10% of revenue
(2019: none).
All revenue is from contracts signed with new customers and
upgrades and additional functional recurring revenue sold to
existing contracted clients. Revenue from contracts is recognised
under percentage of completion method based on a percentage of
services performed to date as a percentage of the total services to
be performed.
Business activity revenue and results
30.6.2021
Core CPaaS Total
GBP'000 GBP'000 GBP'000
Income statement
Revenue 58,124 2,426 60,550
Gross profit 47,768 1,215 48,983
Profit/(loss) before
income tax 12,812 (798) 12,014
--------- -------- ---------
Total comprehensive
income attributable
to the owners of the
parent 11,403 (899) 10,504
========= ======== =========
Financial position
Total assets 74,976 111 75,087
Net current assets/(liabilities) 34,974 (31) 34,943
========= ======== =========
30.6.2020
Core CPaaS Total
GBP'000 GBP'000 GBP'000
Income statement
Revenue 47,404 7,508 54,912
Gross profit (restated*
see note 30) 43,505 1,592 45,097
Profit/(loss) before
income tax 12,186 (378) 11,808
--------- ---------- ---------
Total comprehensive
income attributable
to the owners of the
parent (restated** see
note 30) 11,001 (378) 10,623
========= ========== =========
Financial position
Total assets 65,114 2,257 67,371
Net current assets/(liabilities)
(restated** see note
30) 29,174 (1,723) 27,451
========= ========== =========
* Direct marketing and partner commission were reclassified from
cost of sales to administrative expenses and tech infrastructure
was reclassified from administrative expenses to cost of sales to
reflect more appropriately the gross profit and administrative
expenses.
** In the prior year there was a correction re deferred tax and
corporation tax provision. See note 30 for details.
3. EMPLOYEES AND DIRECTORS
30.6.21 30.6.20
GBP'000 GBP'000
Wages and salaries 22,005 20,892
Social security costs 2,228 2,377
Other pension costs 534 505
------------- -------------
24,767 23,774
============= =============
The average monthly number of employees during the year is as follows
30.6.21 30.6.20
Directors 5 4
Sales and marketing product 160 164
Development and system engineers 105 103
Administration 69 67
------------- -------------
339 338
============= =============
Included in the total employees cost above, GBP5,198,785 (2020: GBP5,293,321) was capitalised
in relation to internally generated development costs.
4. EXCEPTIONAL COSTS
Continuing exceptional costs incurred in the year relate to the ongoing acquisition costs
of Comapi of GBP68,095 (2020: GBP15,714) and amortisation of acquired intangibles of GBP120,000
(2020: GBP120,000).
Discontinued exceptional costs in the year relate to the amortisation of acquired intangibles
of GBPnil (2020: GBP381,072).
5. NET FINANCE INCOME
30.6.21 30.6.20
GBP'000 GBP'000
Finance income:
Deposit account interest 20 40
Finance cost:
Finance lease interest (74) (98)
------------- -------------
(54) (58)
============= =============
6. OPERATING PROFIT
Costs by nature
Profit from continuing operations has been arrived at after charge and crediting:-
30.6.21 Restated* 30.6.20
GBP'000 GBP'000
Outsourcing and tech infrastructure 10,356 3,899
Total cost of sales 10,356 3,899
========= ==================
30.6.21 30.6.20
GBP'000 GBP'000
Direct marketing 2,976 1,727
Partner commission 2,198 2,566
Staff related costs (inc Directors' emoluments) 19,208 17,929
Auditor's remuneration 52 64
Amortisation of intangibles** 4,675 3,647
Depreciation charge** 1,410 1,475
Legal, professional and consultancy fees 848 479
Computer expenditure 538 578
Bad debts 897 1,248
Foreign exchange losses/(gains) 543 (120)
Travel and subsistence costs 87 509
Office running 388 176
Gain on disposal of property, plant and
equipment (2) (3)
Staff welfare 342 399
Other costs 549 531
Management charge (620) (762)
--------- ------------------
Total administrative expenses 34,089 30,443
========= ==================
During the year the Group obtained the following services from the Group's auditor at costs
detailed below:
30.6.21 30.6.20
GBP'000 GBP'000
Fees payable to the Company's auditor for the audit of Parent Company and
consolidated financial
statements 28 22
Fees payable to the Company's auditor for other services
* audit of Company subsidiaries 47 47
* review of interim accounts 5 3
--------- ---------
80 72
========= =========
*Partner commission and direct marketing have been reclassed
under administrative expenses and tech infrastructure have been
reclassed under cost of sales and comparatives restated (see note
30).
**Both amortisation of intangibles and depreciation charge will
not agree to the relevant notes as these numbers only apply to the
continuing operations.
7. INCOME TAX EXPENSE
Analysis of the tax charge from continuing operations: *Restated
30.6.21 30.6.20
GBP'000 GBP'000
Current tax on profits for the year 1,008 575
Changes in estimates related to prior years (53) -
Deferred tax on origination and reversal of timing
differences 367 644
----------- -------------------
1,322 1,219
Analysis of the tax charge from discontinuing
operations:
30.6.21 30.6.20
GBP'000 GBP'000
Current tax on profits for the
year - -
Deferred tax on origination and reversal of timing differences 101 -
---------- -----------------
101 -
========== =================
Factors affecting the tax charge:
*Restated 30.6.20
30.6.21
GBP'000 GBP'000
Profit on ordinary activities from all operations before
tax 12,014 11,808
========== ===================
Profit on ordinary activities multiplied by the average
rate of corporation tax suffered globally:
19% (2020: 19%) 2,283 2,244
Effects of:
Expenses not deductible 281 176
Research and development enhanced claim (2,239) (2,069)
Expenditure permitted on exercising options (49) (98)
Overseas tax losses (5) (20)
Depreciation in excess of capital allowances 737 843
Group relief losses brought forward - (501)
---------- -------------------
Current tax on profit for the year 1,008 575
Changes in estimates related to prior years (53) -
Deferred tax on origination and reversal of timing
differences 468 644
Total tax charge for the year 1,423 1,219
*See note 30
Deferred tax was calculated using the rate 25% (2020: 19%). For
further details on deferred tax see note 21.
Taxation for each region is calculated at the rates prevailing
in the respective jurisdiction.
The main rate of UK corporation tax in the period was 19% (2020:
19%). UK deferred balances have been recognised at 25% in the
period (2020: 19%).
8. DIVIDS
Amounts recognised as distributions to equity holders in the period
30.6.21 30.6.20
GBP'000 GBP'000
Paid dividend for year end 30 June 2021 of 0.83p (2020: 0.67p) per share 2,472 1,996
======== ========
Proposed dividend for the year end 30 June 2021 of 0.86p (2020: 0.83p) per share 2,583 2,480
======== ========
The proposed final dividend is subject to approval by the shareholders at the Annual General
Meeting and has not been included as a liability in these financial statements.
9. EARNINGS PER SHARE
Earnings per share data is based on the consolidated profit
using and the weighted average number of shares in issue of the
Parent Company. Basic earnings per share are calculated by dividing
the earnings attributable to ordinary shareholders by the weighted
average number of ordinary shares outstanding during the
period.
Diluted earnings per share is calculated using the weighted
average number of shares adjusted to assume the conversion of all
dilutive potential ordinary shares. Adjusted earnings per share is
based on the consolidated profit deducting the acquisition related
exceptional costs and share-based payment.
A number of non-IFRS adjusted profit measures are used in this
annual report and financial statements. Adjusting items are
excluded from our headline performance measures by virtue of their
size and nature, in order to reflect management's view of the
performance of the Group. Summarised below is a reconciliation
between statutory results to adjusted results. The Group believes
that alternative performance measures such as adjusted EBITDA are
commonly reported by companies in the markets in which it competes
and are widely used by investors in comparing performance on a
consistent basis without regard to factors such as depreciation and
amortisation, which can vary significantly depending upon
accounting methods (particularly when acquisitions have occurred),
or based on factors which do not reflect the underlying performance
of the business. The adjusted profit after tax earnings measure is
also used for the purpose of calculating adjusted earnings per
share.
Reconciliations to earnings figures used in arriving at adjusted
earnings per share are as follows:
30.6.21 *Restated
30.6.20
From all operations GBP'000 GBP'000
Profit for the year attributable to the owners
of the parent 10,591 10,589
Amortisation of acquisition-related intangible
fixed assets (see note 12) 120 501
Other exceptional costs (see
note 4) 68 16
Share-based payment (see
note 25) 625 682
Adjusted profit for the year attributable to the
owners of the parent 11,404 11,788
======== =============
Management does not consider the above adjustments to reflect
the underlying business performance. The other exceptional costs
relate to ongoing acquisition costs of Comapi.
30.6.21 *Restated
30.6.20
GBP'000 GBP'000
Adjusted profit for the year attributable to the
owners of the parent for continuing activities. 12,303 11,785
Adjusted loss for the year attributable to the
owners of the parent for discontinuing activities. (899) 3
-------- -----------
Adjusted profit for the year attributable to the
owners of the parent 11,404 11,788
======== ===========
30.6.21
-------------------------------------------------
Weighted
average Per share
From all operations Earnings number of Amount
GBP'000 shares Pence
Basic EPS
Profit for the year attributable
to the owners of the parent 10,591 298,598,459 3.55
Adjusted Basic EPS
Adjusted profit for the year attributable
to the owners of the parent 11,404 298,598,459 3.82
Options and warrants - 4,322,868 -
--------- --------------- ------------
Diluted EPS
Profit for the year attributable
to the owners of the parent 10,591 302,921,327 3.50
Adjusted Diluted EPS
Adjusted profit for the year
attributable
to the owners of the parent 11,404 302,921,327 3.76
========= =============== ============
30.6.21
------------------------------------------------
Weighted
average Per share
From continuing operations Earnings number of Amount
GBP'000 shares Pence
Basic EPS
Profit for the year attributable
to the owners of the parent 11,490 298,598,459 3.85
Adjusted Basic EPS
Adjusted profit for the year
attributable to the owners
of the parent 12,303 298,598,459 4.12
Options and Warrants - 4,322,868 -
--------- -------------- ----------
Diluted EPS
Profit for the year attributable
to the owners of the parent 11,490 302,921,327 3.79
Adjusted Diluted EPS
Adjusted profit for the year attributable
to the owners of the parent 12,303 302,921,327 4.06
========= ============== ==========
30.6.21
-------------------------------------
Weighted
average Per share
From discontinued operations Earnings number of Amount
GBP'000 shares Pence
Basic EPS
Loss for the year attributable to
the owners of the parent (899) 298,598,459 (0.30)
Adjusted Basic EPS
Adjusted loss for the year
attributable to the
owners
of the parent (899) 298,598,459 (0.30)
Options and warrants - 4,322,868 -
--------- ------------ ----------
Diluted EPS
Loss for the year attributable
to the owners of the parent (899) 302,921,327 (0.30)
Adjusted Diluted EPS
Adjusted loss for the year
attributable
to the owners of the parent (899) 302,921,327 (0.30)
========= ============ ==========
*Restated 30.6.20
----------------------------------------------
Weighted
average Per share
From all operations Earnings number of Amount
GBP'000 shares Pence
Basic EPS
Profit for the year attributable
to the owners of the parent 10,589 298,306,813 3.55
Adjusted Basic EPS
Adjusted profit for
the year
attributable to the
owners
of the parent 11,788 298,306,813 3.95
Options and Warrants - 3,883,050 -
--------- ---------------- ----------
Diluted EPS
Profit for the year attributable
to the owners of the parent 10,589 302,189,863 3.50
Adjusted Diluted EPS
Adjusted profit for the year
attributable
to the owners of the parent 11,788 302,189,863 3.90
========= ================ ==========
*Restated 30.6.20
--------------------------------------
Weighted
average Per
share
From continuing operations Earnings number of Amount
GBP'000 shares Pence
Basic EPS
Profit for the year attributable
to the owners of the parent 10,967 298,306,813 3.68
Adjusted Basic EPS
Adjusted profit for the
year
attributable to the
owners
of the parent 11,785 298,306,813 3.95
Options and warrants - 3,883,050 -
--------- -------------- ---------
Diluted EPS
Profit for the year attributable
to the owners of the parent 10,967 302,189,863 3.63
Adjusted Diluted EPS
Adjusted profit for the year attributable
to the owners of the parent 11,785 302,189,863 3.90
========= ============== =========
30.6.20
--------------------------------------
Weighted
average Per
share
From discontinued operations Earnings number of Amount
GBP'000 shares Pence
Basic EPS
Loss for the year attributable to
the owners of the parent (378) 298,306,813 (0.13)
Adjusted Basic EPS
Adjusted Loss for the
year
attributable to the
owners
of the parent 3 298,306,813 (0.00)
Options and Warrants - 3,883,050 -
--------- -------------- ---------
Diluted EPS
Loss for the year attributable
to the owners of the parent (378) 302,189,863 (0.13)
Adjusted Diluted EPS
Adjusted loss for the year
attributable
to the owners of the parent 3 302,420,648 (0.00)
========= ============== =========
30.6.21 30.6.20
Shares Shares
Basic EPS 298,598,459 298,306,813
============ ============
Diluted EPS 302,921,327 302,189,863
============ ============
Weighted average number of shares
*See note 30
10. CONTINUING AND DISCONTINUED OPERATIONS
The analysis between continuing and discontinued operation is as
follows:
Year ended 30 June 2021
Continuing Discontinuing
operations operations TOTAL
GBP'000 GBP'000 GBP'000
Revenue 58,124 2,426 60,550
Cost of sales (10,356) (1,211) (11,567)
------------ -------------- ---------
Gross profit 47,768 1,215 48,983
Administrative expense (34,089) (2,012) (36,101)
Share based payments (625) - (625)
Exceptional costs (188) - (188)
------------ -------------- ---------
OPERATING PROFIT 12,866 (797) 12,069
Finance income 20 - 20
Finance costs (74) (1) (75)
------------ -------------- ---------
PROFIT BEFORE INCOME TAX 12,812 (798) 12,014
Income tax expense (1,322) (101) (1,423)
------------ -------------- ---------
PROFIT FOR THE YEAR 11,490 (899) 10,591
============ ============== =========
Year ended 30 June 2020
Continuing Discontinuing
operations operations TOTAL
GBP'000 GBP'000 GBP'000
Revenue 47,404 7,508 54,912
Cost of sales (restated see
note 30) (3,899) (5,916) (9,815)
------------ -------------- ---------
Gross profit 43,505 1,592 45,097
Administrative expense (restated
see note 30) (30,443) (1,587) (32,030)
Share based payments (682) - (682)
Exceptional costs (136) (381) (517)
------------ -------------- ---------
OPERATING PROFIT 12,244 (376) 11,868
Finance income 40 - 40
Finance costs (98) (2) (100)
------------ -------------- ---------
PROFIT BEFORE INCOME TAX 12,186 (378) 11,808
Income tax expense (1,219) - (1,219)
------------ -------------- ---------
PROFIT FOR THE YEAR 10,967 (378) 10,589
============ ============== =========
11. GOODWILL
Group
30.6.21 30.6.20
COST GBP'000 GBP'000
At 1 July 13,192 13,192
-------- --------
At 30 June 13,192 13,192
-------- --------
IMPAIRMENT
At 1 July 3,512 3,512
At 30 June 3,512 3,512
-------- --------
NET BOOK VALUE 9,680 9,680
======== ========
Goodwill is allocated to the Group's two cash generating units
(CGUs) identified, those being Dotdigital and Comapi.
Goodwill arising on business combinations is not amortised but
is reviewed for impairment on an annual basis, or more frequently
if there are indications that goodwill may be impaired. Goodwill
acquired in a business combination is allocated, at acquisition, to
CGUs that are expected to benefit from that business
combination.
The carrying amount of goodwill relates to the Group's two
trading activities and business segments. This has been tested for
impairment during the current period by comparison with the
recoverable amounts of the CGU. Recoverable amounts for CGUs are
based on the higher of value in use and fair value less costs to
sell. The recoverable amounts of the CGU have been determined from
value in use calculations. These calculations use pre-tax cash flow
projections based on financial budgets approved by management
covering a five-year period. Cash flows beyond the five-year period
are extrapolated using the estimated growth rate for the continuing
operations of the Group. These long-term growth rates are
management's estimates. The discount rates used are pre-tax and
reflect specific risks relating to the continuing operations of the
Group.
The key assumptions for the value in use calculations are those
regarding discount rates, growth rates, and expected changes in
margins.
Discount rate
Management estimates discount rates using pre-tax rates that
reflect the current market assessment of the time value of money
and the risks specific to the CGUs. The pre-tax discount rate used
to calculate the value in use is 6.2% (2020: 6.2%).
Growth rates
The growth rate is stated as the compound annual growth rates in
the initial five years for the continuing operations of the Group
which are then used for impairment testing. These are performed
using the projected cash flows based on budgets approved by
management over a five-year period. Cash flow projections from the
sixth year onwards are based on an estimated constant growth rate.
The growth rate used to calculate the value in use is 14% (2020:
12%).
Gross profit margin
Changes in income and expenditure are based on experience and
expectations of the future changes in the market. The impairment
review is based on these estimated gross profit margins which were
included with the budgets approved by management over a five-year
period. From the sixth year onwards, an assumed constant margin is
used. The gross profit margin used to calculate the value in use in
75% (2020: 86%).
The valuations indicate sufficient headroom such that a
reasonably possible change in key assumptions would not result in
impairment of goodwill.
Sensitivity analysis
The principal variables used, being both the discount rate and
growth rates, these would need to change before an impairment is
required, this being 225% (2020: 155%) discount rate and growth
rate of (21%) (2020: -17%).
12. INTANGIBLE ASSETS
Group
Customer
relationships Technology
GBP'000 GBP'000
COST
At 1 July 2020 1,205 1,200
Additions - -
At 30 June 2021 1,205 1,200
-------------- -----------
AMORTISATION
At 1 July 2020 1,205 310
Amortisation for the year - 120
At 30 June 2021 1,205 430
-------------- -----------
NET BOOK VALUE
At 30 June 2021 - 770
============== ===========
Internally
generated
Computer development Domain
software costs names Totals
GBP'000 GBP'000 GBP'000 GBP'000
COST
At 1 July 2020 954 27,255 42 30,656
Additions 69 6,797 4 6,870
At 30 June 2021 1,023 34,052 46 37,526
AMORTISATION
At 1 July 2020 793 14,255 34 16,597
Amortisation for the year 81 4,592 2 4,795
At 30 June 2021 874 18,847 36 21,392
NET BOOK VALUE
At 30 June 2021 149 15,205 10 16,134
Customer
relationships Technology
GBP'000 GBP'000
COST
At 1 July 2019 1,205 1,200
Additions - -
At 30 June 2020 1,205 1,200
------------------ ---------------
AMORTISATION
At 1 July 2019 824 190
Amortisation for the year 381 120
At 30 June 2020 1,205 310
------------------ ---------------
NET BOOK VALUE
At 30 June 2020 - 890
================== ===============
Internally
generated
Computer development Domain
software costs names Totals
GBP'000 GBP'000 GBP'000 GBP'000
COST
At 1 July 2019 911 20,794 41 24,151
Additions 43 6,461 1 6,505
At 30 June 2020 954 27,255 42 30,656
----------- ------------- --------- ---------
AMORTISATION
At 1 July 2019 697 10,706 32 12,449
Amortisation for the year 96 3,549 2 4,148
At 30 June 2020 793 14,255 34 16,597
----------- ------------- --------- ---------
NET BOOK VALUE
At 30 June 2020 161 13,000 8 14,059
=========== ============= ========= =========
Development cost additions represents resources the Group has
invested in the development of new, innovative and ground-breaking
technology products for marketing professionals. This platform
allows them to create, send and automate marketing campaigns.
Following development of the products the Group intends to licence
the use of the platform.
Technology represents the cost that would be incurred to build
the entire Comapi platform had the acquisition not occurred.
Customer relationships represent the value of high-value customer
contracts within Comapi.
13. PROPERTY, PLANT AND EQUIPMENT
Group
Right Short Fixtures Computer
of &
Use assets leasehold fittings equipment Totals
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
COST
At 1 July 2020 5,458 730 770 2,473 9,431
Additions 115 - - 169 284
Disposals (136) - (4) (14) (154)
Exchange differences (53) (5) (12) (14) (84)
-----------
At 30 June 2021 5,384 725 754 2,614 9,477
----------- ---------- --------- ---------- --------
DEPRECIATION
At 1 July 2020 1,058 465 632 2,014 4,169
Depreciation
for the year 1,091 65 63 244 1,463
Disposals (66) - (2) (10) (78)
Exchange differences (22) (4) (13) (10) (49)
-----------
At 30 June 2021 2,061 526 680 2,238 5,505
----------- ---------- --------- ---------- --------
NET BOOK VALUE
At 30 June 2021 3,323 199 74 376 3,972
=========== ========== ========= ========== ========
Right Short Fixtures Computer
of &
Use assets leasehold fittings equipment Totals
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
COST
At 1 July 2019 - 646 779 2,294 3,719
Additions 63 78 22 177 340
Disposals - - (30) - (30)
Adjustment on
transition of
IFRS 16 5,335 - - - 5,335
Exchange differences 60 6 (1) 2 67
-----------
At 30 June 2020 5,458 730 770 2,473 9,431
----------- ---------- --------- ---------- --------
DEPRECIATION
At 1 July 2019 - 402 554 1,726 2,682
Depreciation
for the year 1,122 63 77 286 1,548
Disposals (61) - - - (61)
Exchange differences (3) - 1 2 -
-----------
At 30 June 2020 1,058 465 632 2,014 4,169
----------- ---------- --------- ---------- --------
NET BOOK VALUE
At 30 June 2020 4,400 265 138 459 5,262
=========== ========== ========= ========== ========
Included in the net carrying amount of property, plant and
equipment are the right-of-use assets as follows:
Motor
Properties vehicles Totals
GBP'000 GBP'000 GBP'000
COST
As at 1 July 2020 5,376 82 5,458
Termination of leases (136) - (136)
Additions 42 73 115
Foreign currency translation (53) - (53)
At 30 June 2021 5,229 155 5,384
----------- --------- --------
DEPRECIATION
As at 1 July
2020 1,015 43 1,058
Depreciation
for the year 1,010 81 1,091
Termination of
leases (65) - (65)
Foreign currency translation (18) (5) (23)
At 30 June 2021 1,942 119 2,061
----------- --------- --------
NET BOOK VALUE
At 30 June 2021 3,287 36 3,323
=========== ========= ========
Motor
Properties vehicles Totals
GBP'000 GBP'000 GBP'000
COST
Transition on adoption of IFRS
16 5,678 82 5,760
Re-measurement of existing
lease liabilities (156) - (156)
Termination of leases (269) - (269)
Additions 63 - 63
Foreign currency translation 60 - 60
At 30 June 2020 5,376 82 5,458
----------- --------- --------
DEPRECIATION
Depreciation
for the year 1,079 43 1,122
Termination of
leases (61) - (61)
Foreign currency translation (3) - (3)
At 30 June 2020 1,015 43 1,058
----------- --------- --------
NET BOOK VALUE
At 30 June 2020 4,361 39 4,400
=========== ========= ========
14. TRADE AND OTHER RECEIVABLES
Group
30.6.21 30.6.20
GBP'000 GBP'000
Current:
Trade receivables 10,895 10,364
Less: Provision for impairment
of trade receivables (1,785) (1,589)
---------- ----------
Trade receivables - net 9,110 8,775
Other receivables 60 194
Amounts owed by Group - -
undertakings
VAT - -
Tax receivable - -
Prepayments and contract
assets 4,180 4,018
---------- ----------
13,350 12,987
========== ==========
Further details on the above can be found in note 20.
Included within Group prepayments is an amount of GBP299,016
(2020: GBP404,150) in relation to deferred commission which is
considered to be long term. The Group has applied IFRS 9 simplified
approach to measuring expected credit losses, the balances have
been assessed based on each entitiy's ability to repay amounts owed
and no expected credit loss has been recognised.
15. CASH AND CASH EQUIVALENTS
Group
30.6.21 30.6.20
GBP'000 GBP'000
Bank accounts 31,951 25,383
31,951 25,383
======== ========
Further details on the above can be found in note 20.
16. CALLED UP SHARE CAPITAL
Allotted, issued, fully paid Nominal 30.6.21 30.6.20
number value GBP'000 GBP'000
298,778,630 (2020: 298,547,645) GBP0.005 1,494 1,493
-------- --------
1,494 1,493
======== ========
During the reporting period the Company undertook the following
transactions involving the issuing of share capital:
On 12 March 2021 an employee exercised their share options,
increasing the issued share capital by 20,000 shares at a premium
price of 68.5p.
On 12 March 2021 an employee exercised their share options,
increasing the issued share capital by 65,000 shares at a premium
price of 68.5p.
On 28 April 2021 an employee exercised their share options,
increasing the issued share capital by 145,985 shares at a premium
price of 68.5p.
17. RESERVES
Group
Reverse
Retained Share acquisition
earnings premium reserve
GBP'000 GBP'000 GBP'000
As at 1 July 2020 45,655 6,967 (4,695)
Issue of share capital - 157 -
Dividends (2,472) - -
Profit for the year 10,591 - -
Transfer of reserves 307 - -
Deferred tax on share options - - -
Other comprehensive income: currency - - -
translation
Share-based payment - - -
-------------- -------- ---------------
Balance as at 30 June 2021 54,081 7,124 (4,695)
============== ======== ===============
Retranslation Other
Reserve reserves Totals
GBP'000 GBP'000 GBP'000
As at 1 July 2020 50 1,600 49,577
Issue of share capital - - 157
Dividends - - (2,472)
Profit for the year - - 10,591
Transfer of reserves - (307) -
Deferred tax on share options - 1,148 1,148
Other comprehensive income: currency
translation (87) - (87)
Share-based payment - 625 625
-------------- --------- -----------
Balance as at 30 June 2021 (37) 3,066 59,539
============== ========= ===========
Group
Reverse
Retained Share acquisition
earnings premium reserve
GBP'000 GBP'000 GBP'000
Restated balance as at 1 July
2019 (see note 30) 36,971 6,791 (4,695)
Issue of share capital - 176 -
Dividends (1,996) - -
Profit for the year 10,589 - -
Transfer in reserves 30 - -
Deferred tax on share options - - -
Adjustments in relation to IFRS 61 - -
16
Currency translation - - -
Share-based payment - - -
--------- -------- ---------------
Restated balance as at 30 June
2020 (see note 30) 45,655 6,967 (4,695)
========= ======== ===============
Retranslation Other
reserve reserves Totals
GBP'000 GBP'000 GBP'000
Restated balance at 1 July
2019 (see note 30) 16 910 39,993
Issue of share capital - - 176
Dividends - - (1,996)
Profit for the year - - 10,589
Transfer in reserves - (30) -
Deferred tax on share options - 38 38
Adjustments in relation to
IFRS 16 - - 61
Currency translation 34 - 34
Share-based payment - 682 682
-------------- --------- --------
Restated balance as at 30 June
2020 (see note 30) 50 1,600 49,577
============== ========= ========
18. TRADE AND OTHER PAYABLES
Group
30.6.21 30.6.20
GBP'000 GBP'000
Current:
Trade payables 769 1,732
Amounts owed to Group - -
undertakings
Social security and other
taxes 29 50
Other payables 84 179
VAT 18 1,801
Accruals and contract
liabilities 8,434 6,034
9,334 9,796
======== ========
Further details on liquidity and interest rate risk can be found
in note 20. Amounts owed to group undertakings are non-interest
bearing and are repayable on demand.
19. LEASE LIABILITIES
Group
Properties Motor Totals
Vehicles
GBP'000 GBP'000 GBP'000
At 1 July 2020 4,427 40 4,467
Termination of leases (67) - (67)
Additions 42 73 115
Principal repayments (1,132) (50) (1,182)
Interest 110 1 111
Foreign currency retranslation (21) - (21)
----------- ---------- --------
At 30 June 2021 3,359 64 3,423
=========== ========== ========
Current 906 28 934
Non-current 2,453 36 2,489
----------- ---------- --------
At 30 June 2021 3,359 64 3,423
=========== ========== ========
Group
Properties Motor Totals
Vehicles
GBP'000 GBP'000 GBP'000
At 1 July 2019 - - -
Transition on adoption of IFRS 16 5,678 82 5,760
Re-measurement of existing lease
liabilities (162) - (162)
Termination of leases (264) - (264)
Additions 63 - 63
Principal repayments (1,084) (44) (1,128)
Interest 136 2 138
Foreign currency retranslation 60 - 60
----------- ---------- --------
At 30 June 2020 4,427 40 4,467
=========== ========== ========
Current 1,034 34 1,068
Non-current 3,393 6 3,399
----------- ---------- --------
At 30 June 2020 4,427 40 4,467
=========== ========== ========
The properties are office leases located in various location
where the term in ranging from one to eight years. The motor
vehicles are company cars offered to senior staff where the term is
always three years.
20. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
The Group's activities expose it to a number of financial risks
that include credit risk, liquidity risk, currency risk and
interest rate risk. These risks and the Group's policies for
managing them have been applied consistently during the year and
are set out below.
The Group holds no financial or other non-financial instruments
other than those utilised in the working operations of the Group
and that are listed in this note. It is the Group's policy not to
trade in derivative contracts.
Principal financial instruments
The principal financial instruments used by the Group, from
which financial instrument rate risk arises, are as follows:
-Trade receivables
-Cash and cash equivalents
-Trade and other payables
- Lease Liabilities
Financial instruments by category
The following table sets out the financial instruments as at the
reporting date:
Group
30.6.21 30.6.20
GBP'000 GBP'000
Financial assets
Trade and other receivables 9,167 8,969
Bank balances 31,951 25,383
41,118 34,352
======== ========
Financial liabilities
Trade payables 769 1,732
Amounts owed to group - -
undertakings
Accrued liabilities and
other payables 8,221 7,268
8,990 9,000
============ ======
The fair value of the financial assets and financial liabilities
is equal to their carrying values. All financial assets are
categorised as loans and receivables and all financial liabilities
are categorised as financial liabilities at amortised costs.
General objectives, policies and processes
The Board has overall responsibility for the determination of
the Group's risk management objectives and policies and whilst
retaining ultimate responsibility for them, it has delegated the
authority for designing and operating processes that ensure the
effective implementation of the objectives and policies to the
Group's Risk Committee. The Board receives quarterly reports from
the Risk Committee, through which it reviews the effectiveness of
the processes put in place and the appropriateness of the
objectives and policies it sets.
The overall objective of the Board is to set policies that seek
to reduce risk as far as possible without unduly affecting the
Company's competitiveness and flexibility. Further details
regarding these policies are set out below:
Interest rate risk
The Group's interest rate risk arises from interest-bearing
assets and liabilities. The Group has in place a policy of
maximising finance income by ensuring that cash balances earn a
market rate of interest offsetting where possible cash balances,
and by forecasting and financing its working capital requirements.
As at the reporting date the Group was not exposed to any movement
in interest rates as it has no external borrowings and therefore is
not exposed to interest rate risk. No sensitivity analysis has been
prepared.
The Group's working capital requirements are managed through
regular monitoring of the overall cash position and regularly
updated cash flow forecasts to ensure there are sufficient funds
available for its operations.
Liquidity risk
The Group's working capital requirements are managed through
regular monitoring of the overall position and regularly updated
cash flow forecasts to ensure there are funds available for its
operations. Management forecasts indicate no new borrowing
facilities will be required in the upcoming financial period.
Trade and other payables of GBP10,221,000 (2020: GBP9,013,000)
are expected to mature in less than a year.
Credit risk
Credit risk arises principally from the Group's trade
receivables, as there are no trade receivables within the Company,
which comprise amounts due from customers. Prior to accepting new
customers, a credit check is obtained. As at 30 June 2021 there
were no significant debts past their due period which had not been
provided for. The maturity of the Group's trade receivables is as
follows:
30.6.21 30.6.20
GBP'000 GBP'000
0-30 days 5,734 6,770
30-60 days 2,701 911
More than 60 days 2,550 2,683
10,985 10,364
======== ========
The maturity of the Group's provision for impairment is as
follows:
30.6.21 30.6.20
GBP'000 GBP'000
0-30 days 140 1
30-60 days 154 13
More than 60 days 1,491 1,575
1,785 1,589
======== ========
The movement in the provision for the impairment is as
follows:
30.06.21 30.6.20
GBP'000 GBP'000
As at 1 July 1,589 999
Provision for impairment 262 1,048
Receivable written off in
the year (66) (335)
Unused amount reversed - (123)
---------
As at 30 June 1,785 1,589
========= ========
The Group minimises its credit risk by profiling all new
customers and monitoring existing customers of the Group for
changes in their initial profile. The level of trade receivables
older than the average collection period consisted of a value of
GBP2,484,862 (2020: GBP2,960,513) of which GBP1,502,918 (2020:
GBP1,574,891) was provided for. The Group felt that the remainder
would be collected post year-end as they were with long-standing
relationships, and the risk of default is considered to be low and
write-offs due to bad debts are extremely low. The Group has no
significant concentration of credit risk, with the exposure spread
over a large number of customers.
The credit risk on liquid funds is low as the counterparts are
banks with high credit ratings assigned by international credit
rating bodies. The majority of the Company's cash holdings are held
at NatWest Bank, which has a BBB credit rating.
The carrying value of both financial assets and liabilities
approximates to fair value.
Capital policy
The Group's objectives when managing capital are to safeguard
its ability to continue as a going concern in order to provide
optimal returns for shareholders and to maintain an efficient
capital structure to reduce the cost of capital.
In doing so the Group's strategy is to maintain a capital
structure commensurate with a strong credit rating and to retain
appropriate levels of liquidity headroom to ensure financial
stability and flexibility. To achieve this, the Group monitors key
credit metrics, risk and fixed charge cover to maintain this
position. In addition the Group ensures a combination of
appropriate short-term and long-term liquidity headroom.
During the year the Group had a short-term loan balance of
GBPnil (2020: GBPnil) and amounts payable over one year are nil
(2020: GBPnil). The Group had a strong cash reserve to utilise for
any short-term capital requirements that were needed.
The Group has continued to look for further long-term
investments or acquisitions and therefore, to maintain or re-align
the capital structure, the Group may adjust when dividends are paid
to shareholders, return capital to shareholders, issue new shares
or borrow from lenders.
Maturities of financial liabilities
The tables below analyse the Group's financial liabilities into
relevant maturity groupings based on their contractual maturities
for all non-derivative financial liabilities (the Group does not
hold any derivative financial instruments in the current or prior
financial year).
The amounts disclosed in the table are the contractual
undiscounted cash flows. Balances due within 12 months equal their
carrying balances as the impact of the discounting is not
significant.
<6 6 to 12 1 to 2 years 2 to 5 Total
months months years contractual
cash flows
carrying
amounts
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Contractual
maturities
at 30 June 2021
Trade and other
payables 9,334 - - - 9,334
Lease
liabilities 480 454 759 1,730 3,423
Total
non-derivatives 9,814 454 759 1,730 12,757
========= ======== ======================== ============================== ============
<6 6 to 12 1 to 2 years 2 to 5 Total
months months years contractual
cash flows
carrying
amounts
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Contractual
maturities
at 30 June 2020
Trade and other
payables 9,796 - - - 9,796
Lease
liabilities 532 536 960 2,439 4,467
Total
non-derivatives 10,328 536 960 2,439 14,263
========= ======== ======================== ============================== ============
21. DEFERRED TAX
Restated*
30.6.21 30.6.20
GBP'000 GBP'000
As at 1 July 1,983 1,377
Current year provision (776) 606
1,207 1,983
========== ==========
The deferred tax liability above comprises the following
temporary differences:
30.6.21 Restated
*
30.6.20
GBP'000 GBP'000
Acquired intangibles 146 169
Capital allowances in excess of depreciation 38 53
R&D relief in excess
of amortisation 2,963 2,325
Share option relief (1,805) (495)
Losses (135) (69)
1,207 1,983
======== =========
*Refer to note 30.
Deferred tax provision relates to taxes to be levied by the same
authority on the same entity expected to be settled at the same
time. As such deferred tax assets and liabilities have been
offset.
22. CAPITAL COMMITMENTS
The Company and Group have no capital commitments as at the year
end.
23. RELATED PARTY DISCLOSURES
Transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation and are not
disclosed in this note.
Group
The following transactions were carried out with related parties
and were made on terms equivalent to those that prevail in arm's
length transactions.
30.6.21 30.6.20
GBP'000 GBP'000
Sale of services
Email
Ipswich Town Entity under common marketing
Football Club directorship services 4 -
Email
Epwin Group Entity under common marketing
Plc directorship services 6 4
10 4
======== ========
Year end balances arising 30.6.21 30.6.20
from sale of services GBP'000 GBP'000
Email
Ipswich Town Entity under common marketing
Football Club directorship services 1 -
Email
Epwin Group Entity under common marketing
Plc directorship services 1 1
2 1
========= =========
Directors
30.6.21 30.6.20
GBP'000 GBP'000
Aggregate emoluments 1,136 897
Company contributions to money purchase pension
scheme 26 25
Share-based payments from the LTIP options
granted 347 438
1,509 1,360
======== ========
Directors' pay summary does include Non-Executive Directors.
Information in relation to the highest paid Director is as
follows:
30.6.21 30.6.20
GBP'000 GBP'000
Salaries 574 440
Other benefits 14 17
Pension costs 16 15
Share-based payments on the LTIP
options granted 198 289
802 761
======== ========
The receivables and payables are unrestricted in nature and bear
no interest. No provisions are held against receivables from
related parties.
Loans to/from related parties
30.6.21 30.6.20
GBP'000 GBP'000
Dotdigital EMEA Limited Subsidiary
As at 1 July (3,545) (4,580)
Loans advanced 5,075 3,060
Loans repaid (2,571) (2,025)
(1,041) (3,545)
======== ========
IAS 24 Related Party Disclosure allows disclosure exemption of
transactions between wholly-owned subsidiaries that are eliminated
on consolidation.
24. ULTIMATE CONTROLLING PARTY
There is no ultimate controlling party of the Group. Dotdigital
Group Plc acts as the Parent Company to Dotdigital EMEA Limited,
Dotdigital Inc, Dotdigital APAC Pty Limited, Dotdigital B.V.,
Dotmailer Developments Limited, Dotmailer SA Pty, Dotmailer LLC,
Dotdigital SG Pte. Limited, Dynmark International Ltd, Dotdigital
Canada Inc and Dynmark S.p. z.o.o.
25. SHARE-BASED PAYMENT TRANSACTIONS
The measurement requirements of IFRS 2 have been implemented in
respect of share options that were granted after 7 November 2002.
The expense recognised for share-based payment made during the year
is GBP625,000 (2020: GBP682,000).
Vesting conditions of the options dictate that employees must
remain in the employment of the Group for the whole period to
qualify.
Movement in issued share options during the year
The table below illustrates the number and weighted average
exercise price (WAEP) of, and movements in, share options during
the period. The options outstanding at 30 June 2021 had a WAEP of
26.05p (2020: 51.09p) and a weighted average contracted life of
5.14 years (2020: 3.01 years) and their exercise prices ranged from
0.5p to 147.5p. All share options are settled in form of equity
issued.
30.06.21 30.6.20
No of WAEP No of WAEP
options options
Outstanding at the
beginning of the
period 3,910,984 51.09p 4,428,064 49.16p
Granted during the
year 1,093,728 107.54p - 0p
Forfeited/cancelled
during the period (480,992) 13.03p - 0p
Exchanged for shares (230,985) 68.50p (517,080) 34.57p
--------------- ------------- --------------- ------------
Outstanding at the
end of the period 4,292,735 27.51p 3,910,984 51.09p
--------------- ------------- --------------- ------------
Exercisable at the
end of the period - - 230,985 68.50p
The weighted average share price at the date of the exercise for share
options exercised during the period was 178.57p (2020: 92p). The Black
Scholes model was used in measuring the fair use of the options granted.
22December 14 24 19
2020 December October December
2020 2018 2017
Number of options
granted 306,728 787,000 2,305,000 1,375,000
Share price at
grant date 152.0p 147.50p 77.5p 85.95p
Exercise price 0.50p 147.50p 0.50p 0.50p
Option life in 5 years 10 years 5 years 5 years
years
Risk-free rate 0.95% 1.23% 1.23% 1.33%
Expected volatility 30% 32% 30% 30%
Expected dividend
yield 1% 1% 1% 1%
Fair value of 103.72p 26.99p 52.70p 65.03p
options
Expected volatility was determined by calculating the historical volatility
of the Group's share price from the date it listed to the grant date
of the share option. The expected life used in the model is based on
management's best estimate, for the effects of non-transferability,
exercise restrictions and behavioural considerations.
The share options granted on 24 October 2018 and 22 December 2020 were
following the approval of the LTIP scheme at the AGM on 19 December
2017 and the end-to-end awards that were granted to key personnel.
26. GROUP RECONCILIATION OF PROFIT BEFORE CORPORATION TAX TO CASH GENERATED
FROM OPERATIONS
Group
30.6.21 30.6.20
GBP'000 GBP'000
Current:
Profit before tax from all
operations 12,014 11,808
Amortisation 4,795 4,148
Depreciation 1,267 1,548
Exceptional costs 68 16
Finance lease non-cash movement (48) 4
Adjustments in relation to
IFRS 16 - 61
Gain on disposal of fixed
assets (2) (3)
Loss on disposal of investments - -
Share-based payments 625 682
Finance expense 75 100
-------- --------
18,794 18,364
(Increase)/decrease in trade
receivables (363) (1,157)
Increase in trade payables (462) (1,300)
-------- --------
Cash generated from operations 17,969 15,907
======== ========
27. GROUP CASH AND CASH EQUIVALENTS
The amounts disclosed in the statement of cash flow in respect
of cash and cash equivalents are in respect of these statements of
financial position amounts:
Group
GBP'000
As at 1 July 2019 19,320
========
As at 30 June 2020 25,383
========
As at 30 June 2021 31,951
========
28. PROJECT DEVELOPMENT
During the year the Group incurred GBP6,797,279 (2020:
GBP6,461,313) in development investments. All resources utilised in
development have been capitalised as outlined in the accounting
policy governing this area.
29. EVENTS AFTER THE OF THE REPORTING PERIOD
There are no events after the end of the reporting period which
impact the Group's and Company's financial statements .
30. PRIOR YEAR RESTATEMENT NOTE
During the year, the Group made the decision to modify the
classification of direct marketing and partner commission from cost
of sales to administrative expenses and tech infrastructure from
under administrative expenses to cost of sales, to reflect more
appropriately gross profit and gross profit margin plus also
administrative expenses under continuing operations. Comparative
amounts in the Consolidated Income Statement have been reclassified
for consistency. As a result, GBP4,293,125 was reclassified from
cost of sales to administrative expenses and GBP1,826,195 were
reclassified from administrative expenses to cost of sales. There
has been no impact on the prior year's profit for the year however
gross profit has increased from GBP41,038,000 to GBP43,505,000 and
administrative expenses have increased from GBP27,976,000 to
GBP30,443,000.
During the year, the Group discovered that the share-based
payment arrangement had been erroneously recognised in Dotdigital
Group PLC instead of being recognised in the subsidiaries in which
the employees are employed. Under IFRS 2 Share based payments, when
a parent grants rights to its equity instruments to employees of
its subsidiaries this arrangement should be accounted for as
equity-settled in the consolidated financial statements but results
in an investment being created in the parent's own statement of
financial position. Therefore, the subsidiaries should in their own
separate financial statements, measure the services received from
its employees in accordance with the requirements of IFRS 2
applicable to equity-settled share-based payment transactions.
Thereby resulting in a corresponding increase recognised in equity
as a capital contribution from the parent. There has been no impact
on the prior year's Group profit for the year, however company only
investments increased from GBP15,142,000 to GBP17,516,000 and
retained earnings increased from GBP3,550,000 to GBP5,924,000.
At the year end, the Group discovered on the calculation of
deferred tax on the share options and the internally generated
development costs that this had been misallocated and miscalculated
respectively. On the matter of the misallocation of the deferred
tax on the share option under IFRS 2 Share based payment, where the
final deferred tax calculation exceeds the cumulative amount
recognised as a share-based payment expense in the Income
Statement, the maximum amount of deferred tax income that can be
recognised in the Income Statement can only equal the total
share-based payment expense. Any excess deferred tax income is
recognised directly in reserves.
As for the miscalculation of deferred tax on the internally
generated development costs this is with respect to the
identification and calculation of the net book value for internally
generated development costs qualifying for research and
development, thereby impacting the deferred tax liability.
Both adjustments have impacted the prior year's profit for the
year from continuing operations where this has increased from
GBP10,636,000 to GBP10,967,000 and total comprehensive income
attributable to owners of the parent has increased from
GBP10,292,000 to GBP10,623,000. Net assets as per the consolidated
statement of financial position have also increased from
GBP50,701,000 to GBP51,070,000.
Consolidated Income Statement for the year ended 30 June
2020
As previously
reported As restated
Adjustments
GBP'000 GBP'000 GBP'000
CONTINUING OPERATIONS
Revenue from contracts with customers 47,404 - 47,404
Cost of sales (6,366) 2,467 (3,899)
-------------- -------------- --------------
Gross profit 41,038 2,467 43,505
Administrative expenses (27,976) (2,467) (30,443)
-------------- -------------- --------------
OPERATING PROFIT FROM CONTINUING OPERATIONS
PRE SHARE-BASED PAYMENTS AND EXCEPTIONAL
COSTS 13,062 - 13,062
Share-based payments (682) - (682)
Exceptional costs (136) - (136)
-------------- -------------- --------------
OPERATING PROFIT FROM CONTINUING OPERATIONS 12,244 - 12,244
Finance costs (98) - (98)
Finance income 40 - 40
-------------- -------------- --------------
PROFIT BEFORE INCOME TAX FROM CONTINUING
OPERATIONS 12,186 - 12,186
Income tax expense (1,550) 331 (1,219)
-------------- -------------- --------------
Profit for the year from continuing operations 10,636 331 10,967
Loss for the year from discontinuing operations (378) - (378)
============== ============== ==============
Profit for the year attributable to the
owners of the parent 10,258 331 10,589
============== ============== ==============
Consolidated Statement of Comprehensive Income for the year
ended 30 June 202 0
As previously reported
As restated
Adjustments
GBP'000 GBP'000 GBP'000
PROFIT FOR THE YEAR 10,258 331 10,589
OTHER COMPREHENSIVE INCOME
Items that may be subsequently reclassified to
profit or loss:
Exchange differences on translating
foreign operations 34 - 34
----------------------- -------------- --------------
Total comprehensive income attributable to:
Owners of the parent 10,292 331 10,623
======================= ============== ==============
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
Comprehensive income from continuing
operations 10,670 331 11,001
Comprehensive loss from discontinued
operations (378) - (378)
======================= ============== ==============
Operating Profit
Costs by nature
Profit from continuing operations has
been arrived after charging:-
As previously As
reported Adjustments restated
GBP'000 GBP'000 GBP'000
Direct marketing 1,727 (1,727) -
Outsourcing and other costs 4,639 (4,639) -
Outsourcing and tech infrastructure - 3,899 3,899
---------------
Total cost of sales 6,366 (2,467) 3,899
=============== =============== ================
As previously As
reported Adjustments restated
GBP'000 GBP'000 GBP'000
Direct marketing - 1,727 1,727
Partner commission - 2,566 2,566
Staff-related costs (inc Directors' emoluments) 17,929 - 17,929
Auditor's remuneration 64 - 64
Amortisation of intangibles 3,647 - 3,647
Depreciation charge 1,475 - 1,475
Legal, professional and consultancy fees 479 - 479
Computer expenditure 2,404 (1,826) 578
Bad debts 1,248 - 1,248
Foreign exchange losses/(gains) (120) - (120)
Travel and subsistence costs 509 - 509
Office running 176 - 176
Gain on disposal of tangible asset (3) - (3)
Staff welfare 399 - 399
Other costs 531 - 531
Management charge (762) - (762)
--------------- ----------------
Total administration costs 27,976 2,467 30,443
=============== =============== ================
Consolidated Statement of Financial Position
30 June 2019
As previously reported As restated
Adjustments
GBP'000 GBP'000 GBP'000
ASSETS
NON-CURRENT ASSETS
Goodwill 9,680 - 9,680
Intangible assets 11,702 - 11,702
Property, plant and equipment 1,037 - 1,037
------------------------- -------------- --------------
22,419 - 22,419
------------------------- -------------- --------------
CURRENT ASSETS
Trade and other receivables 12,222 - 12,222
Cash and cash equivalents 19,320 - 19,320
------------------------- -------------- --------------
31,542 - 31,542
------------------------- -------------- --------------
TOTAL ASSETS 53,961 - 53,961
========================= ============== ==============
EQUITY ATTRIBUTABLE TO THE
OWNERS OF THE PARENT
Called up share capital 1,490 - 1,490
Share premium 6,791 - 6,791
Reverse acquisition reserve (4,695) - (4,695)
Other reserves 720 190 910
Retranslation reserve 16 - 16
Retained earnings 37,161 (190) 36,971
------------------------- -------------- --------------
TOTAL EQUITY 41,483 - 41,483
LIABILITIES
NON-CURRENT LIABILITIES
Lease liabilities - - -
Deferred tax 1,377 - 1,377
------------------------- -------------- --------------
1,377 - 1,377
CURRENT LIABILITIES
Trade and other payables 11,096 - 11,096
Financial liabilities:
* Interest bearing loans and borrowings 5 - 5
11,101 - 11,101
------------------------- -------------- --------------
TOTAL LIABILITIES 12,478 - 12,478
------------------------- -------------- --------------
TOTAL EQUITY AND LIABILITIES 53,961 - 53,961
========================= ============== ==============
Consolidated Statement of Financial Position
30 June 2020
As previously reported As restated
Adjustments
GBP'000 GBP'000 GBP'000
ASSETS
NON-CURRENT ASSETS
Goodwill 9,680 - 9,680
Intangible assets 14,059 - 14,059
Property, plant and equipment 5,262 - 5,262
------------------------- -------------- --------------
29,001 - 29,001
------------------------- -------------- --------------
CURRENT ASSETS
Trade and other receivables 12,987 - 12,987
Cash and cash equivalents 25,383 - 25,383
------------------------- -------------- --------------
38,370 - 38,370
------------------------- -------------- --------------
TOTAL ASSETS 67,371 - 67,371
========================= ============== ==============
EQUITY ATTRIBUTABLE TO THE
OWNERS OF THE PARENT
Called up share capital 1,493 - 1,493
Share premium 6,967 - 6,967
Reverse acquisition reserve (4,695) - (4,695)
Other reserves 1,372 228 1,600
Retranslation reserve 50 - 50
Retained earnings 45,514 141 45,655
------------------------- -------------- --------------
TOTAL EQUITY 50,701 369 51,070
LIABILITIES
NON-CURRENT LIABILITIES
Lease liabilities 3,399 - 3,399
Deferred tax 2,169 (186) 1,983
------------------------- -------------- --------------
5,568 (186) 5,382
CURRENT LIABILITIES
Trade and other payables 9,796 - 9,796
Financial liabilities:
* Lease liabilities 1,068 - 1,068
Current tax payable 238 (183) 55
------------------------- -------------- --------------
11,102 (183) 10,919
------------------------- -------------- --------------
TOTAL LIABILITIES 16,670 (369) 16,301
------------------------- -------------- --------------
TOTAL EQUITY AND LIABILITIES 67,371 - 67,371
========================= ============== ==============
Company Statement of Financial Position
30 June 2019
As previously reported As restated
Adjustments
GBP'000 GBP'000 GBP'000
ASSETS
NON-CURRENT ASSETS
Investments 15,147 1,692 16,839
------------------------- -------------- --------------
15,147 1,692 16,839
------------------------- -------------- --------------
CURRENT ASSETS
Trade and other receivables 808 - 808
Cash and cash equivalents 594 - 594
------------------------- -------------- --------------
1,402 - 1,402
------------------------- -------------- --------------
TOTAL ASSETS 16,549 1,692 18,241
========================= ============== ==============
EQUITY ATTRIBUTABLE TO THE
OWNERS OF THE PARENT
Called up share capital 1,490 - 1,490
Share premium 6,791 - 6,791
Other reserves 720 - 720
Retained earnings 3,515 1,692 5,207
------------------------- -------------- --------------
TOTAL EQUITY 12,516 1,692 14,208
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 4,033 - 4,033
TOTAL LIABILITIES 4,033 - 4,033
------------------------- -------------- --------------
TOTAL EQUITY AND LIABILITIES 16,549 1,692 18,241
========================= ============== ==============
Company Statement of Financial Position
30 June 2020 As previously reported As restated
Adjustments
GBP'000 GBP'000 GBP'000
ASSETS
NON-CURRENT ASSETS
Owned Property, plant and equipment 3 - 3
Investments 15,142 2,374 17,516
------------------------- -------------- --------------
15,145 2,374 17,519
------------------------- -------------- --------------
CURRENT ASSETS
Trade and other receivables 797 - 797
Cash and cash equivalents 396 - 396
------------------------- -------------- --------------
1,193 - 1,193
------------------------- -------------- --------------
TOTAL ASSETS 16,338 2,374 18,712
========================= ============== ==============
EQUITY ATTRIBUTABLE TO THE
OWNERS OF THE PARENT
Called up share capital 1,493 - 1,493
Share premium 6,967 - 6,967
Other reserves 1,372 - 1,372
Retained earnings 3,550 2,374 5,924
------------------------- -------------- --------------
TOTAL EQUITY 13,382 2,374 15,756
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 2,956 - 2,956
TOTAL LIABILITIES 2,956 - 2,956
------------------------- -------------- --------------
TOTAL EQUITY AND LIABILITIES 16,338 2,374 18,712
========================= ============== ==============
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(END) Dow Jones Newswires
November 16, 2021 02:00 ET (07:00 GMT)
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