TIDMATQT
RNS Number : 7344M
ATTRAQT Group PLC
23 September 2021
23 September 2021
Attraqt Group plc
("Attraqt", the "Group" or the "Company")
Half Year results
Attraqt Group plc (AIM:ATQT), the provider of SaaS solutions
that power exceptional online shopping experiences, is pleased to
announce its unaudited results for the six months ended 30 June
2021.
GROUP FINANCIAL HIGHLIGHTS
-- Revenue increased 10% to GBP11.1m (HY2020: GBP10.2m)
-- Gross profit increased by 8% to GBP8.1m (HY2020: GBP7.5m)
-- Adjusted EBITDA(1) was GBP0.5m (HY2020: GBP0.5m)
-- Loss before tax was GBP1.8m (HY2020: GBP1.3m)
-- Basic EPS loss 0.7p per share (HY2020: 0.6p loss per share)
-- Operating cash outflow of GBP1.3m (HY2020 inflow of GBP1.1m)
-- Cash at the period end was GBP3.5m (FY2020: GBP6.6m) and is
expected to increase in the second half of the year.
NON-FINANCIAL KPIs
-- Renewed 100% of eligible client contracts - including 14
multi-year renewals (HY2020: 27) due to a smaller number of clients
being eligible for renewal in the period.
-- Exit annual recurring revenue (ARR) increased 13% at constant
exchange rates to GBP22.2m (FY2020: GBP21.1m, HY2020: GBP19.8m) -
and a 9% increase at actual exchange rates
-- GBP0.6m worth of new logos signed (HY2020: GBP0.7m),
including a new contract with the international arm of a major
British multinational retailer
-- ARR Bookings of GBP1.8m (HY2020: GBP1.3m)
-- Net retention rate of 103% (FY2020: 102%, HY2020: 98%)
-- Net promoter score of 33 (HY 2020 26).
OPERATING HIGHLIGHTS
-- Seven upsells of the Group's AI Search capabilities acquired from Aleph in 2020
-- 95% of the transferral of intellectual property from Aleph
achieved ahead of schedule with the remaining 5% anticipated in the
coming months
-- BigCommerce native integration now live, with demonstrable results already
COMMENT FROM MARK ADAMS, CHIEF EXECUTIVE OFFICER OF ATTRAQT
GROUP
"Over the past six months we have continued to make strides
forward both financially and strategically, demonstrating the
continued momentum within the business. The investment in our
product is enhancing our competitiveness as well as improving our
ability to retain and build revenues in our customer base as
evidenced by our record net revenue retention through the first
half of the year.
Our focus on customer success is paying dividends with the
continued improvement of our KPIs, including our net promoter score
and net retention rate, highlighting the strength of the
relationships we have built with our existing clients. We have set
a clear vision to be the number one team and growth engine for our
customers; powering the world's best product discovery experiences,
wherever and whenever they happen. The deployment of our AI Search
technology, which provides more relevant product discovery
experiences for shoppers leading to significantly increased
conversion and revenues for our customers, is yet another proof
point of that vision.
We are continuing to implement our strategy to address the
mid-market growth opportunity with deep integrations to ecommerce
platforms. Revenue is trading in line with expectations for the
full year on a constant currency basis and we are confident we have
the right strategy and the right technology to drive the business
forward."
(1. Adjusted EBITDA refers to earnings before interest, tax,
depreciation, amortisation, share based payments and exceptional
items.)
A video overview of the results from the CEO, Mark Adams is
available to watch here: https://bit.ly/ATQT_H1_overview
FOR FURTHER INFORMATION, PLEASE CONTACT:
+44 (0)7747 766
Attraqt Group plc 849
Eric Dodd, CFO
+44 (0)20 7523
Canaccord Genuity 8000
Simon Bridges
Adam James
Tom Diehl
+44 (0)20 3405
Alma PR 0205
Susie Hudson attraqt@almapr.co.uk
Sam Modlin
Molly Gretton
ABOUT ATTRAQT GROUP
Attraqt enables online retailers and brand owners to maximise
the performance and potential of their e-commerce investments by
enabling best in class product discovery experiences. The Company
delivers omnichannel search, merchandising, and product &
content personalization for online retailers and brands. Our vision
is to be the number one team and growth engine for our customers;
powering the world's best product discovery experiences, wherever
and whenever they happen.
For more information visit www.attraqt.com
CHIEF EXECUTIVE OFFICER'S STATEMENT
I am very pleased to report on another period of clear strategic
progress, demonstrating the continued momentum of the Group. We
have also increased our annual recurring revenue by double digits
year-on-year.
Alongside this, the continued improvement of our KPIs, including
our net promoter score and net retention rate, reflects the
strength of the relationships we have built with our existing
clients. I am confident these relationships are currently the
strongest they have ever been and with a client base that includes
top brands such as ASOS, JD Sports, Waitrose, Screwfix and Tommy
Hilfiger, this achievement should not be overlooked.
Another stand out achievement in the period has been the success
of our AI Search functionality. As anticipated, it has proven very
valuable; it is making our existing technology platform more
competitive and has been strategically up sold to seven existing
clients in H1 with an encouraging pipeline underpinning strategic
upselling well into the future. We are also delighted to have
completed the majority of the Aleph IP transfer in July ahead of
schedule.
REVIEW OF SALES AND OPERATIONS
Revenue was up 10% to GBP11.1m for the period, driven by
capacity and strategic up-sells to our existing customer base
alongside new logos won. There were seven up-sells in the period of
our AI Search functionality. This figure compares to zero strategic
upsells secured in HY2020 and is key in making our offering even
more integral to our customers.
During the period we conducted an AI search proof of concept
with Screwfix with outstanding results. The project has proven the
effectiveness of our AI Search engine in a different vertical to
fashion, where until now it has been most widely appreciated, and
represents a very useful case study for the Group to use going
forwards. We have now demonstrated that our AI Search technology
delivers significant improvement in search result relevance,
conversion and revenue uplift for customers across the fashion,
grocery and the DIY verticals.
Whilst the number of multi-year renewals was down year-on-year,
this was a product of timing, with fewer clients eligible for
renewal during the period compared to H1 2020. All clients that
were eligible renewed on a multi-year basis.
Recurring bookings increased by 38% to GBP1.8mI and
encouragingly this included some significant wins with opportunity
to expand, for example with the international arm of a major
British multinational retailer . Another milestone was achieved in
new sales in the period, as we recorded a key enterprise client win
and displacement of a major global competitor, underlining the
increasingly competitive nature of our product set.
As mentioned, a key highlight of the period was our net
retention figure continuing to grow to a record level for Attraqt,
reaching 103%. Similarly, our NPS improved again to 33 and the
average lifetime of our clients increased by 12%. Churn was also
down, at 4.7% (H1 2020: 8.3%) These figures demonstrate the
ever-increasing strength of our relationship with our existing
clients, the improved innovation of our product set and our focus
on operational excellence.
MARKET DEVELOPMENTS
UK online retail sales as a proportion of total retail sales
represented 27.9% in July 2021. Whilst this has dropped back from
the peak of around 36% under lockdown earlier in the year, it
remains higher than the proportion of online retail spending in
February 2020 (pre-coronavirus pandemic) of 19.8%. Retailers and
brands are investing more in digital commerce and many Attraqt
customers have formally signalled these plans.
As investment in our sector grows the online retail market is
increasingly recognised as an excellent investment opportunity.
Whilst this undeniably impacts our competitive landscape to some
extent, it also demonstrates beyond doubt the scale and attractive
nature of the industry we are in. The opportunity for growth is
significant, and we have a clear strategy to provide the world's
best product discovery technology targeted at both enterprise and
mid-market brands and retailers.
PERFORMANCE AGAINST GROWTH STRATEGY
Despite the continued uncertainty of the external environment
seen in the first six months of the year, we have continued to make
progress against many our strategic priorities.
Our ongoing priorities are:
-- Evolving our data-led approach
-- Increasing the speed of our innovation
-- Executing our partnership strategy
-- Replicating our UK success in other geographies
-- Improving the customer and developer experience
-- Being recognised as a market leader
Our partnership strategy remains a major focus and we continue
to see increasing lead flow derived from these partnerships
year-on-year. Pleasingly, our native integration with BigCommerce
went live this month. This enables any Big Commerce merchant to
deploy our search and merchandising tools along with
recommendations and personalisation to their storefront without any
integration effort. We are planning to develop further native
integrations to global eCommerce platform vendors as 60% of our
current partner pipeline originates from our pre-integration
strategy with common eCommerce platforms.
We've also made good progress against our aim to improve the
customer and developer experience, having opened connectivity into
our platforms that allow brands to self-serve and onboard faster.
Our new CTO has identified the three key pillars of our roadmap
which we are evaluating increasing investment in; develop on our
open platform strategy, embed AI everywhere and improve the
usability of our tools for business and technical users.
Our ambition to be recognised as a market leader was realised in
a recent Gartner paper on personalisation, which ranked Attraqt
second globally in the competitive landscape for personalisation in
digital commerce. This is a clear third-party proof point regarding
the strength of our technology.
PEOPLE
We were delighted to have appointed Laura Harnett as an
independent Non-Executive Director in early June. Laura brings
extensive expertise in customer experience, strategy and in
leveraging digital capabilities, and we look forward to benefitting
from her guidance over the coming years.
On 6 September 2021, post period end, we were pleased to
announce the appointment of Tom Crawford as Non-Executive Chairman
with immediate effect. Tom took over from Nick Habgood who stepped
down from his role as Non-Executive Chairman but will remain
available for a number of months to facilitate a smooth transition.
Tom is a decisive and energetic leader known for his ability to
execute strategies and motivate team members. I am confident that
Attraqt will benefit from Tom's expertise as we continue to execute
on our growth strategy.
I would like to take this opportunity to thank every member of
the Attraqt team for their hard work and commitment during the
first half. Your drive to provide the best possible technology and
service to our clients has shone through.
OUTLOOK
We ended the first half in a good position, with very strong
relationships with our clients, and progress being made in
innovation.
Looking ahead our focus is on the continued targeting of the
mid-market alongside the integration of product into
partnerships.
Whilst ongoing pandemic related uncertainty and challenges
remain apparent in the period ahead, we expect that the Full Year
revenue performance, on a constant currency basis, will be in line
with expectations. Any foreign currency translational effects are
anticipated to be partly mitigated by matching costs of sales and
our cash balance to is expected to increase in the second half of
the year, including through the reversal of temporary working
capital items. We have a great client base, the right strategy and
the right technology to be able to continue driving us forward. Our
market opportunity has never been bigger, and our focus remains on
capitalising on those opportunities to deliver returns for all our
stakeholders.
Mark Adams
Chief Executive Officer
FINANCIAL REVIEW
Total revenue increased by 10% to GBP11.1m (HY 2020: GBP10.2m).
SaaS revenues increased by 8% to GBP10.2m driven by upsells of
GBP1.3m of AI Search and capacity to existing customers. Annual
Recurring Revenue (ARR) increased by 13% year on year at Constant
exchange rates and 9% at Actual exchange rates. Services revenue
increased by 37% to GBP0.9m as business normalised after the impact
of Covid-19 in the first half of 2020.
Recurring bookings were GBP1.8m in the period (HY 2020: GBP1.3m)
and the business saw strong demand from existing customers for the
AI Search product.
Gross profit increased by 8% to GBP8.1m (HY 2020: GBP7.5m), with
a gross margin of 73% (HY 2020: 74%). The SaaS gross margin
decreased by 3% points to 78% due to some contractual challenges in
the legacy XO contracts. The Services gross margin rebounded by 33
points as revenue increased and costs remained flat.
Operating expenses (defined as administrative expenses less
exceptional items, amortisation and depreciation) increased by 9%
to GBP7.6m (HY 2020: GBP7.0m) driven wholly by an increase in sales
and marketing expenditure as business normalised. To the loss from
operations of GBP1.8m we add back exceptional costs of GBP0.3m,
share based payments of GBP0.2m, depreciation and amortisation
costs of GBP1.9m and a foreign exchange credit of GBP0.1m to give
the Adjusted EBITDA figure of GBP0.5m.
Adjusted EBITDA profit of GBP0.5m (HY 2020: GBP0.5m profit) was
in line with management's expectations.
The exceptional costs of GBP0.3m in the period relate to
additional costs associated with the finalisation of the Early
Birds SAS acquisition and redundancy costs.
Depreciation and amortisation totalled GBP1.9m (HY 2020:
GBP1.7m) and increased in line with the scale of the business.
There was a share-based payment charge of GBP0.1m (HY 2020: GBPnil
m).
The loss before tax was GBP1.8m (HY 2020: GBP1.3m loss) and the
tax credit in the period of GBP0.4m (HY 2020: GBP0.2m). Therefore,
the loss for the half year was GBP1.4m (HY 2020: GBP1.1m loss).
The loss per share increased to 0.7p (HY 2020: 0.6p loss) partly
due to exceptional charges.
There was a cash outflow of GBP1.3m from operations (HY 2020:
inflow of GBP1.1m). This was as a result of the return of an escrow
amount of GBP0.4m, the settlement of a VAT deferral from 2020 of
GBP0.3m which was a government initiative as a result of COVID, the
stretching of credit terms from a significant customer which was
settled in July for GBP0.3m and exceptional charges of GBP0.3m.
Collections remain good and bad debts due to Covid are low.
The cash balance at the end of the period was GBP3.5m. The cash
balance at 31 December 2020 was GBP6.6m and the cash balance at 30
June 2020 was GBP3.8m.
The directors continue to believe that the preparation of these
condensed consolidated interim financial statements should be on
the basis of a going concern.
We are also delighted to have completed the Aleph IP transfer in
July ahead of schedule. Subsequent milestones were reached,
resulting in the issuance of 5,131,374 new ordinary shares
("Consideration Shares"), deferred consideration, to Aleph-One
GmbH, following the completion of 95% of the successful development
and transfer of intellectual property from Aleph-One GmbH to
Attraqt. IP has become a core component of the Attraqt
offering.
Eric Dodd
Chief Financial Officer
(1) Adjusted EBITDA refers to earnings before interest, tax,
depreciation, amortisation, other income, foreign exchange and also
exceptional items (exceptional items set out in note 6)
CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED INTERIM INCOME STATEMENT FOR THE SIX MONTHSED 30
JUNE 2021
Note HY2021 HY2020 FY2020
(unaudited) (unaudited)
GBP'000 GBP'000 GBP'000
Revenue 5 11,141 10,166 21,003
Cost of Sales 5 (3,040) (2,689) (5,502)
----------------------------------- ---- ------------ ------------ --------
Gross profit 8,101 7,477 15,501
Administration expenses (9,619) (8,696) (17,822)
Exceptional administrative expense 6 (264) (65) (256)
----------------------------------- ---- ------------ ------------ --------
Total administrative expenses (9,883) (8,761) (18,078)
----------------------------------- ---- ------------ ------------ --------
Loss from operations (1,782) (1,284) (2,577)
Finance costs (31) (27) (58)
Loss before tax (1,813) (1,311) (2,635)
Taxation credit 7 390 169 408
----------------------------------- ---- ------------ ------------ --------
Loss for the period/year (1,423) (1,142) (2,227)
----------------------------------- ---- ------------ ------------ --------
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX
MONTHSED 30 JUNE 2021
Note HY2021 HY2020 FY2020
(unaudited) (unaudited)
GBP'000 GBP'000 GBP'000
---------------------------------------------- ---- ------------ ------------ -------
Loss for the period/year (1,423) (1,142) (2,227)
---------------------------------------------- ---- ------------ ------------ -------
Foreign exchange translation differences (138) (122) (50)
---------------------------------------------- ---- ------------ ------------ -------
Total comprehensive loss for the period/year,
attributable to shareholders of the
parent (1,561) (1,264) (2,277)
---------------------------------------------- ---- ------------ ------------ -------
Loss per share attributable to the
ordinary equity holders of the company
---------------------------------------------- ---- ------------ ------------ -------
Basic and diluted EPS 8 (0.7p) (0.6p) (1.2p)
---------------------------------------------- ---- ------------ ------------ -------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Notes HY2021 HY2020 FY2020
(unaudited) (unaudited)
GBP'000 GBP'000 GBP'000
Non-current assets
Intangible assets 9 39,996 39,303 40,585
Right of use assets 902 1,073 1,073
Plant and equipment 248 269 243
Total non-current assets 41,146 40,645 41,901
------------------------------------ ------ ------------ ------------ -----------------------
Current assets
Trade and other receivables 6,877 5,461 6,155
Cash and cash equivalents 10 3,522 4,210 6,591
Corporation tax recoverable 308 186 573
------------------------------------ ------ ------------ ------------ -----------------------
Total current assets 10,707 9,857 13,319
------------------------------------ ------ ------------ ------------ -----------------------
Total assets 51,853 50,502 55,220
------------------------------------ ------ ------------ ------------ -----------------------
Current Liabilities
Trade and other payables 9,393 10,413 11,251
Lease liability 459 575 416
Corporation tax 554 246 267
Total current liabilities 10,406 11,234 11,934
------------------------------------ ------ ------------ ------------ -----------------------
Non-current liabilities
Lease liability 497 573 738
Deferred tax liability 2,660 3,018 2,839
Total non-current liabilities 3,157 3,591 3,577
------------------------------------ ------ ------------ ------------ -----------------------
Net Assets 38,290 35,677 39,710
------------------------------------ ------ ------------ ------------ -----------------------
Equity
Issued capital 11 1,961 1,800 1,961
Share premium 11 53,251 48,516 53,251
Merger reserve 1,457 1,457 1,457
Share based payment 1,726 1,435 1,585
Forex reserve (413) (347) (275)
Retained earnings (19,692) (17,184) (18,269)
------------------------------------ ------ ------------ ------------ -----------------------
Total equity attributable to equity
holders of the parent 38,290 35,677 36,710
------------------------------------ ------ ------------ ------------ -----------------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHSED
30 JUNE 2021
Share Share Merger Share Foreign Retained Total
Capital premium reserve based exchange earnings
payment reserve
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 January 2020 1,800 48,516 1,457 1,423 (225) (16,042) 36,929
Loss for the period - - - - - (1,142) (1,142)
Foreign currency translation
differences - - - - (122) - (122)
----------------------------------------- -------- -------- -------- -------- --------- --------- -------
Total comprehensive loss for
the period - - - - (122) (1,142) (1,264)
Contributions by and distributions
to owners
Share based payment charge - - - 12 - - 12
Total contributions by and distributions
to owners - - - 12 - - 12
----------------------------------------- -------- -------- -------- -------- --------- --------- -------
Balance at 30 June 2020 1,800 48,516 1,457 1,435 (347) (17,184) 35,677
----------------------------------------- -------- -------- -------- -------- --------- --------- -------
Loss for the period - - - - - (1,085) (1,085)
Foreign currency translation
differences - - - - 72 - 72
----------------------------------------- -------- -------- -------- -------- --------- --------- -------
Total comprehensive loss for
the period - - - - 72 (1,085) (1,013)
----------------------------------------- -------- -------- -------- -------- --------- --------- -------
Contributions by and distributions
to owners
----------------------------------------- -------- -------- -------- -------- --------- --------- -------
Shares issued 161 4,991 - - - - 5,152
Issue costs - (256) - - - - (256)
Contingent shares to be issued - - - 103 - - 103
Share based payment charge - - - 47 - - 47
Total contributions by and distributions
to owners 161 4,735 - 150 - - 5,046
----------------------------------------- -------- -------- -------- -------- --------- --------- -------
Balance at 31 December 2020 1,961 53,521 1,457 1,585 (275) (18,269) 39,710
----------------------------------------- -------- -------- -------- -------- --------- --------- -------
Loss for the period - - - - - (1,423) (1,423)
Foreign currency translation
differences - - - - (138) - (138)
----------------------------------------- -------- -------- -------- -------- --------- --------- -------
Total comprehensive loss for
the period - - - - (138) (1,423) (1,561)
----------------------------------------- -------- -------- -------- -------- --------- --------- -------
Contributions by and distributions
to owners
Share based payment charge - - - 141 - - 141
Total contributions by and distributions
to owners - - - 141 - - 141
----------------------------------------- -------- -------- -------- -------- --------- --------- -------
Balance at 30 June 2021 1,961 53,251 1,457 1,726 (413) (19,692) 38,290
----------------------------------------- -------- -------- -------- -------- --------- --------- -------
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHSED 30
JUNE 2021
Notes HY2021 HY2020 FY2020
(unaudited) (unaudited)
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Loss for the period/year (1,423) (1,142) (2,227)
Adjustments for:
Depreciation of property, plant and
equipment 76 73 139
Amortisation of right of use assets 268 281 574
Amortisation of intangible fixed assets 9 1,591 1,365 2,817
Income tax (credit)/charge (390) (169) (408)
Finance costs 31 27 58
Share based payment expense 12 141 12 59
Foreign exchange differences (81) (23) (99)
------------------------------------------- ----- ------------ ------------ -------
213 424 913
(Increase)/decrease in trade and other
receivables (774) (122) (1,110)
(Decrease)/increase in trade and other
payables (1,554) 804 880
------------------------------------------- ----- ------------ ------------ -------
Cash (used in)/generated from operating
activities before interest and tax (2,115) 1,106 (683)
Taxation (paid)/received 774 (18) (166)
Net cash (used in)/generated from
operating activities (1,341) 1,088 517
Cash flows (used in)/generated from
investing activities
Purchases of Property, plant and equipment (46) (25) (66)
Acquisition of IP software 9 (350) - -
Development of intangibles 9 (1,001) (522) (1,341)
Net cash (used in)/from investing
activities (1,397) (547) (1,407)
Cash flows from financing activities
Lease principal payments (213) (268) (626)
Lease interest payments (31) (30) (61)
Interest received - 3 3
Issue of ordinary shares, net of issue
costs - - 3,744
Loan received - - 450
Repayments of loan (13) - (27)
Net cash (used in)/generated from
financing activities (257) (295) 3,483
------------------------------------------- ----- ------------ ------------ -------
Net (decrease)/increase in cash and
cash equivalents (2,995) 246 2,593
------------------------------------------- ----- ------------ ------------ -------
Cash and cash equivalents at beginning
of period/year 6,591 3,950 3,950
Effect of foreign currency exchange
rate changes (74) 14 48
------------------------------------------- ----- ------------ ------------ -------
Cash and cash equivalents at end of
period/year 3,522 4,210 6,591
------------------------------------------- ----- ------------ ------------ -------
NOTES TO THE CONSOLIDTAED INTERIM FINANCIAL STATEMENTS
1. GENERAL INFORMATION
Attraqt Group plc (the 'Company') and its subsidiaries'
(collectively, the 'Group') principal activity is the development
and provision of eCommerce site search, merchandising and
recommendation technology.
The Company is a public limited company, which is listed on the
London Stock Exchange, incorporated, registered and domiciled in
England (registered number: 08904529). The address of its
registered office is 7(th) Floor, 222-236 Grays Inn Road, London,
WC1X 8HB.
The condensed consolidated interim financial statements for the
six months ended 30 June 2021 was approved by the Board on 23
September 2021.
2. BASIS OF PREPERATION
BASIS OF PREPERATION OF INTERIM FINANCIAL STATEMENTS
The condensed consolidated interim financial information has
been prepared in accordance with the Disclosure and Transparency
Rules of the Financial Conduct Authority and with IAS 34 Interim
Financial Reporting. They do not include all the information
required for full annual financial statements and should be read in
conjunction with information contained in the Group's Annual Report
and Accounts for the year ended 31 December 2020.
The financial information for the year ended 31 December 2020
does not comprise statutory accounts within the meaning of section
434 of the Companies Act 2006 for that year, but it is derived from
those accounts. Statutory accounts for the year ended 31 December
2020 were approved by the Board of Directors on 11 March 2021 and
delivered to the Registrar of Companies. The report of the auditor
on those accounts was unqualified, did not draw attention to any
matters by way of emphasis and did not contain statements under
section s498 (2) or (3) of the Companies Act 2006.
GOING CONCERN
As part of the Directors' consideration of the appropriateness
of adopting the going concern basis in preparing the financial
statements, given the uncertainty of COVID-19.
The Group has monitored the impact of COVID-19 by reviewing the
monthly results versus the budget set for 2021. The Group has not
seen a severe impact in the year to June 2021, due to lockdowns,
with consolidated Revenue for half year being just 1% behind
budget, and consolidated EBITDA on budget. The consolidated cash
balance available to the Group is healthy at GBP3,522,000. The
Group has continued to offer services and support to our clients
uninterrupted by the lockdowns and has not relied upon any furlough
schemes available.
Directors have identified that there is sensitivity to a
reduction in revenue receipts, with sustained reduction of over
12.5% of budgeted revenue bringing the Group outside existing cash
facilities without any mitigating cost reductions, however they
consider this to be unlikely given the impact seen within the
business in the current financial year to date.
Should revenue cash flows deteriorate, management would take
some mitigating actions, which include but are not limited to:
-- Negotiating longer credit terms with suppliers, for instance 30 day to 60 days;
-- Alter invoicing terms with customers, from quarterly invoices to annually;
-- Reduction in marketing spend in relation to events, some
which have been suspended due to COVID restrictions;
-- Reduction in staff costs, for instance reduction in headcount
or suspension of pay rises and reduction of temporary staff
usage.
Based on the above, acknowledging the uncertainty in the
economic environment as a result of the pandemic, the Board remains
satisfied that the Group holds sufficient cash together with bank
and other facilities and has further options available to meet its
working capital requirements for at least 12 months from the date
of approval of these financial statements and therefore supports
the preparation of the financial statements on a going concern
basis.
3. ACCOUNTING POLICIES
In preparing the condensed consolidated interim financial
information, the same accounting policies, methods of computation
and presentation have been applied as set out in the Group's Annual
Report and Accounts for the year ended 31 December 2020. The
accounting policies are consistent with those of the previous
financial year and corresponding interim reporting period.
The annual financial statements of the Group are prepared in
accordance with international accounting standards in conformity
with the requirements of Companies Act 2006 and international
financial reporting standards adopted pursuant to Regulation (EC No
1606/2002) as it applies to the European Union.
The Group has not early adopted any standard, interpretation or
amendment that was issued but is not yet effective.
4. SIGNIFICANT JUDGEMENTS AND ESTIMATES
The preparation of the condensed interim financial information
requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported
amount of assets and liabilities, income and expense. Actual
results may differ from these estimates.
The significant judgements and estimates used in the application
of the Group's accounting policies are the same as those described
in the Group's Annual Report and Accounts for the year ended 31
December 2020.
5. SEGMENTAL REPORTING
For the purpose of IFRS 8, the chief operating decision maker
takes the form of the Board of Directors. The Directors' opinion is
that the business of the group is to provide cloud-based e-commerce
solutions. Based on this, there is one reportable segment. The
internal and external reporting is on a consolidated basis with
transactions between group companies eliminated on
consolidation.
HY2021 HY2020 FY 2020
(unaudited) (unaudited)
GBP'000 GBP'000 GBP'000
Revenue by type
SaaS 10,185 9,468 19,278
Services 956 698 1,725
Total Revenue 11,141 10,166 21,003
Cost of Sales by type
SaaS 2,193 1,836 3,932
Services 847 853 1,570
Total Cost of Sales 3,040 2,689 5,502
---------------------- ------------ ------------ -------
Gross profit 8,101 7,477 15,501
---------------------- ------------ ------------ -------
There is one customer which contributes 10%, which is GBP1.0m of
the Group's revenues (H1 2020: 1 customer - contributing
GBP1.0m).
The table below provides an analysis of the Group's revenue by
geographical market where the customer is based.
HY2021 HY2020 FY 2020
(unaudited) (unaudited)
GBP'000 GBP'000 GBP'000
Geographical split of revenue
UK 5,149 5,032 9,861
France 2,496 2,328 4,979
Netherlands 1,251 1,108 2,441
Rest of Europe 1,543 1,215 2,618
Rest of the World 702 483 1,103
------------------------------ ------------ ------------ -------
Total Revenue 11,141 10,166 21,003
------------------------------ ------------ ------------ -------
6. EXCEPTIONAL ITEMS
The Group separately identifies those items which in
management's judgement, need to be disclosed by virtue of their
nature, size or incidence in order for the user to obtain a proper
understanding of the underlying performance of the business. The
exceptional costs of GBP264,000 (H1 2020: GBP65,000) relate to
costs associated with redundancies and additional costs resulting
from the finalisation of the Early Birds acquisition there was no
exceptional income in 2021 (H1 2020: GBP27,000). The exceptional
costs in 2020 relate to costs associated with the acquisition and
restructuring costs and exceptional income in relation to COVID-19
grants.
7. TAXATION
The Group tax charge is based on the estimated annual effective
rate and for the half year is calculated at 19.00%, (HY2020:
19.00%) and applied to the loss before tax for the period.
8. LOSS PER SHARE
Basic Earnings per share is calculated by dividing the loss
attributable to the equity holders of the Company by the weighted
average number of ordinary shares outstanding in the period.
The calculation of continued earnings per share is based on the
following:
HY2021 HY2020 FY 2020
(unaudited) (unaudited)
GBP'000 GBP'000 GBP'000
Numerator
Loss for the period/year and loss used
in basic and diluted EPS (1,423) (1,142) (2,227)
Denominator
Weighted average number of shares used
in basic and diluted EPS 196,149,171 180,048,207 184,051,542
Loss per share - basic and diluted (0.7p) (0.6p) (1.2p)
The outstanding share options calculation are antidilutive, due
to loss made in the period. If they were to be included, the
weighted average number of shares would be 205,607,381 (H1 2020:
180,188,962) and the loss per share would be 0.7 pence (H1 2020:
0.6 pence).
9. INTANGIBLE ASSETS
Goodwill Customer Existing Trademark Software Total
Relationships Technology Development
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 January 2020 25,649 6,709 8,685 1,136 4,223 46,402
Additions - internally
developed - - - - 522 522
Foreign Exchange - - - - (8) (8)
At 30 June 2020 25,649 6,709 8,685 1,136 4,737 46,916
Additions - internally
developed - - - - 819 819
Acquired through asset
purchase - - 1,826 - - 1,826
Foreign Exchange - 39 - - 103 142
--------- -------------- ----------- ---------- ------------ -------
At 31 December 2020 25,649 6,748 10,511 1,136 5,659 49,703
Additions - internally
developed - - - - 1,001 1,001
Foreign Exchange - - - - - -
--------- -------------- ----------- ---------- ------------ -------
At 30 June 2021 25,649 6,748 10,511 1,136 6,660 50,704
--------- -------------- ----------- ---------- ------------ -------
Amortisation
At 1 January 20 - 1,283 2,157 242 2,566 6,248
Charge for the period - 328 537 57 443 1,365
At 30 June 20 - 1,611 2,694 299 3,009 7,613
Charge for the period - 331 576 57 488 1,400
Foreign Exchange - 14 - - 39 53
--------- -------------- ----------- ---------- ------------ -------
At 31 December 2020 - 1,956 3,270 356 3,536 9,118
Charge for the period - 328 537 57 668 1,590
--------- -------------- ----------- ---------- ------------ -------
At 30 June 2021 - 2,284 3,807 413 4,204 10,708
--------- -------------- ----------- ---------- ------------ -------
Net Book Value
At 30 June 2020 25,649 5,098 5,991 837 1,728 39,303
At 31 December 2020 25,649 4,792 7,241 780 2,123 40,585
--------- -------------- ----------- ---------- ------------ -------
At 30 June 2021 25,649 4,464 6,704 723 2,456 39,996
--------- -------------- ----------- ---------- ------------ -------
Payment of GBP350,000 in the cashflow statement relates to a
cash consideration which was capitalised in previous period within
the amount acquired through asset purchase. This amount was
included in other payables in December 2020
10. CASH AND CASH EQUIVILENTS
HY2021 HY2020 FY 2020
(unaudited) (unaudited)
GBP'000 GBP'000 GBP'000
Cash at bank 3,582 4,315 6,672
Bank loan (60) (105) (81)
3,522 4,210 6,591
------------ ------------ -------
11. SHARE CAPITAL
Allocated, called up and fully paid
Number of Shares Share capital Share Premium
GBP'000 GBP'000
Ordinary shares of GBP0.01 each
At 30 June 2020 180,048,207 1,800 48,516
---------------- ------------- -------------
Shares issued for cash during the year 12,500,000 125 3,619
Shares issued to sellers as part of
asset purchase and acquisition 3,600,964 36 1,116
---------------- ------------- -------------
At 31 December 2020 196,149,171 1,961 53,251
---------------- ------------- -------------
At 30 June 2021 196,149,171 1,961 53,251
================ ============= =============
No shares were issued during the current period. During 2020,
the company raised GBP4,000,000 before expenses, by a private
placing of 12,500,000 1p Ordinary shares at 32p on 1 October 2020.
3,600,964 Ordinary shares were issued to the sellers as
consideration for the asset purchase of the Aleph software.
12. SHARE OPTIONS
During the six months ended 30 June 2021, the Group made further
grants under its existing share-based payment schemes, as
follows:
On 22 April 2021, the Company granted employees a total of
510,000 share options who had a year's service as at this date. The
options will vest based upon three years' service. Upon vesting,
the options will remain exercisable until 22 April 2031.
On 22 April 2021, the Company granted senior employees a total
of 2,414,000 nil cost share options who had a year's service as at
this date. The options will vest based upon three years' service.
Upon vesting, the options will remain exercisable until 22 April
2031.
For the six months ended 30 June 2021, the total cost recognised
in the income statement was GBP141,000 (H1
2020: GBP12,000).
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IR FIFFSAAIVFIL
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