TIDMEYE
RNS Number : 3775K
Eagle Eye Solutions Group PLC
21 September 2016
21 September 2016
Eagle Eye Solutions Group plc
("Eagle Eye", the "Company" or the "Group")
Results for the year ended 30 June 2016
Momentum building as UK and international Tier 1 grocers sign up
to the Eagle Eye vision
Eagle Eye, the SaaS technology company that validates and
redeems digital promotions in real-time for the grocery, retail and
hospitality industries, today announces its audited results for the
financial year ended 30 June 2016 (the "Period").
Financial highlights:
-- Group revenue increased 33% to GBP6.5m (FY15: GBP4.9m)
-- AIR platform revenue increased by 70% to GBP4.6m (FY15: GBP2.7m)
-- Recurring subscription and transactional AIR platform
revenues up 84% year-on-year at GBP3.5m (FY15: GBP1.9m)
-- Gross margin up 8ppts to 79% (FY15: 71%)
-- Subscription and transactional revenues represented 80% of
total revenues (FY15: 80%), demonstrating the sustained recurring
business model
-- Cash position of GBP1.3m (2015: GBP4.3m) and new bank
facility of GBP1.5m secured with Barclays Bank Plc
Tier 1 contract success and delivery:
-- Significant contract win with Sainsbury's for the deployment
of Eagle Eye AIR taking our UK market coverage(1) to more than
30%
-- Major international contract with Loblaws Inc. ("Loblaw"),
Canada's largest retailer, to deploy the Eagle Eye AIR platform
-- Nationwide rollout of the AIR platform across all Asda stores complete
Operational highlights:
-- Total customer count at 219 (2015: 156) including over 70 FMCG brands (2015: 17)
-- Redemption volumes up 121% in the Period to 38.4m (2015: 17.4m)
-- Messaging volumes maintained at 40.3m (2015: 40.1m)
-- Investment in new product developments, including digital
wallet capability, enable Eagle Eye to access the loyalty programme
market, worth $100 bn(2) worldwide
Post Period strategic board changes:
-- Tim Mason, previously Non-Executive Chairman, appointed as Chief Executive
-- Phill Blundell, previously Chief Executive, becomes Deputy
Chief Executive to strengthen Eagle Eye's operational capability
and to deliver its international growth strategy
-- Malcolm Wall, previously a Non-Executive Director, appointed as Non-Executive Chairman
Tim Mason, Chief Executive of Eagle Eye, said:
"I see significant strategic progress from Eagle Eye in the past
year. We have won two tier 1 grocers, one overseas; the platform
has been extended to support loyalty; all Asda stores have gone
live showing the scalability and robustness of the platform; more
brands are using the platform.
"I am confident there is significant opportunity for Eagle Eye
and as the incoming CEO I look forward to helping the business
become Better, Bigger, Faster. I am encouraged that this year's
trading has started ahead of management's expectations."
For further information, please contact: Eagle Eye
Tim Mason, Chief Executive Officer Tel: 0844 824 3686
Lucy Sharman-Munday, Chief Financial Officer
Investec (Nominated Advisor and Broker)
Dominic Emery/ David Anderson, Corporate Finance Tel: 020 7886 2500
Matt Lewis, Corporate Broking
Hudson Sandler
Nick Lyon/Alex Brennan Tel: 020 7796 4133
Information on Eagle Eye
www.eagleeye.com
Eagle Eye is a leading SaaS technology company that securely
validates and redeems digital promotions in real-time for the
grocery, retail and hospitality industries.
The Company's digital marketing platform, Eagle Eye AIR, enables
the secure, real-time, multi-channel issuance, management and
redemption of digital promotions and rewards, replacing previously
used paper-based methods. Our Eagle Eye platform creates a network
effect between merchants, distributors and brands enabling stronger
connections and value to all parties. Through our four products we
enable brands and merchants to reduce cost, improve their customer
offer and accelerate their innovation.
The UK promotions market is currently transitioning through
substantial change as both retailers and consumers are moving away
from paper and plastic to digital. In 2014 there were in excess of
730 million coupons redeemed in the UK3, and 16 billion digital
coupons redeemed worldwide4.
The Eagle Eye AIR platform comprises four key products: Eagle
Eye Promote - for the management of offers and promotions, Eagle
Eye Gift - for gift cards and customer care, Eagle Eye Reward - for
loyalty and reward schemes and Eagle Eye Engage - for digital
messaging. These four products enable the Company's customers to
deliver targeted promotions, gift vouchers and rewards to consumers
in real time, in a simple and secure way, across multiple marketing
communications channels including email, SMS messaging and loyalty
apps. The promotions can be redeemed securely by the consumer
through any enabled point of sale channel.
The Company's current customer base comprises leading names in
UK grocery, retail and hospitality including Asda, J Sainsbury,
Greggs, JD Sports, Ladbrokes, Marks & Spencer, Mitchells &
Butlers, Pizza Express, Tesco and Thomas Pink.
Notes:
1. Based on Kantar grocery market share
2. Source: AIMIA
3. Source: Valassis 2014
4. Source: Statista 2014
Chairman's statement
In September, post the Period end, I was delighted to accept the
position of Non-Executive Chairman of Eagle Eye, with Tim Mason
becoming our new Chief Executive. It is the Board's belief that
Tim's appointment will drive the business bigger, better and faster
as we enter the next stage of Eagle Eye's development. I am also
delighted that Phill Blundell remains with the business to
concentrate on delivering operational scale and accelerated
execution, building on the foundations already in place.
Tim joined Eagle Eye in January 2016 as Non-Executive Chairman.
Since that time he has gained a deep understanding of Eagle Eye's
business, products, strategy and culture. Tim brings more than 30
years' experience within the grocery and retail industries, with a
strong background in strategic marketing and customer loyalty.
Tim's wealth of experience and network, both domestically and
internationally, as well as his knowledge of Eagle Eye mean that he
is uniquely placed to lead the Company into the next phase of its
growth.
In his new role, Phill Blundell, previously Chief Executive
Officer, now Deputy Chief Executive Officer will focus on
bolstering the operational capability for scale, building on the UK
business opportunity and developing an international growth
strategy.
The international opportunity for Eagle Eye was opened up in
North America following the significant contract win with Loblaw
Inc ("Loblaw"), the Company's first overseas Tier 1 grocery
customer, in February 2016. This contract is now underway with the
implementation of Eagle Eye AIR within Loblaw and Phill's move
strengthens Eagle Eye's capability to capitalise on the significant
international market opportunity, of which the North American
market is estimated to be worth over $84bn, according Cadent
Consulting Group and Raymond James.
We are confident that these changes will deepen and strengthen
the management team to deliver against our overall ambitions to be
a leading global platform in digital marketing.
A year of strategic and operational progress
Overall the Board is pleased with the significant progress made
during the year. Although revenues in the year have not matched
expectations, the significant contracts won and the developments to
our software platform mean that we have growth and momentum going
into FY17.
The key highlights in the year included Asda rolling out our
software platform across their entire retail estate, coupled with
the contract with Sainsbury's announced at the beginning of the
financial year which together extends our reach in the UK grocery
industry to over 30%. February's contract win with Loblaw, the
Canadian market leader with circa 40% of the grocery market, shows
the international potential for Eagle Eye, with this prestigious
client choosing us against global leading software businesses.
Finally, increased transactions on our software platform in the
Food and Beverage ("F&B") market further cements our position
as market leader in this sector. These successes validate our
belief that consumer marketing is transferring to digital channels
and we are uniquely well placed to drive this transformation.
On behalf of the Board, I want to thank the team for their
commitment, hard work and major steps forward this year both in
terms of contractual wins and further developing the platform for
the next stage of growth.
Outlook
Eagle Eye exited FY16 with growth and momentum from both its
existing customer base and two new Tier 1 grocers. The new
significant wins are a major endorsement of the benefits of the
Eagle Eye AIR platform that is now proven and scalable.
This momentum gives visibility of revenue for the first quarter
for the financial year ending 30 June 2017 to be at least 65% up on
prior year at approximately GBP2.2m. This level of growth and
momentum gives the Board confidence early in the financial year on
delivering against management's expectations.
The year-end cash position, coupled with the GBP1.5m revolving
loan facility agreed with Barclays Bank PLC in June 2016, provides
the business with adequate funding to deliver against its current
2017 targets.
Malcolm Wall, Non-Executive Chairman
CEO's statement
When I joined the Board of Eagle Eye in January 2016 as
Non-Executive Chairman, I saw the potential for this business to
drive transformational change in an industry that I have worked in
all my career. It is rare you come across a business that has both
a vision and the technology to truly change the way a sector works,
but Eagle Eye excited me on both counts. Given this, I was
delighted to have the opportunity to become the Company's new CEO
in September, post the Period end.
Earlier in my career I was instrumental in the change of
consumer marketing through the use of data and now I see another
opportunity for transformation through the use of real time digital
capability.
The world of promotions and rewards has to date been driven by
imperfect historical data using mechanics that are rarely consumer
friendly. Eagle Eye has brought a clear vision that promotions and
rewards will become digital, real time and personalised, bringing
clear benefits to both retailers and their consumers. Our
significant contract wins and increasing volumes through the
platform during the Period, demonstrate that our network is driving
this transformation.
Growing market opportunity
The market for digital coupons continues to grow with the latest
figures from Juniper Research estimating that 31bn eCoupons will be
redeemed worldwide in 2019, up from 16bn in 2014, and there will be
1.05bn mobile coupon users worldwide by 2019.
Further, during the Period we have extended our product offer to
also support the loyalty market, an industry worth $100bn globally.
Existing customers like Mitchells and Butlers ("M&B") and
Greggs are already using this new capability and we expect other
clients to follow.
It is our firm belief that traditional forms of loyalty have
become tired as consumers become resistant to the same offers and
rewards delivered after the event using analogue channels. Given
the "always on" world of social media and mobile communications,
consumers are looking for relevant, timely and personalised rewards
that add real value to their lives. This is the view shared across
Eagle Eye and the development of our software platform supports the
new reality with us having the ability to close the loop,
delivering the right offer to the right person at the right time,
thereby maximising uptake from consumers and improving their
loyalty to brands. Furthermore, we provide a data feed into our
customers' big data bases.
Our first overseas Tier 1 grocery customer, Loblaw, gives us an
entry to the lucrative North America market for both promotions and
loyalty that is estimated to be worth in excess of $84bn. With a
flagship client such as Loblaw, the opportunity to capitalise in
this renowned international arena for our sector is
significant.
Strong strategic momentum
Tier 1 grocers
At the start of the Period, the Company announced the
Sainsbury's contract win which, further to the contract with Asda
in the prior year cemented our market position in the UK with these
two major customers accounting for more than 30% of the grocery
market. The implementation phase with Sainsbury's is on track and
we continue to deepen our relationship with this client.
In February 2016, Asda completed its nationwide rollout of the
AIR platform. Redemption volumes across our network grew by 121% in
the Period to 38.4 million (2015: 17.4 million), the rollout at
Asda being the significant contributing factor to this growth.
Since the rollout of our technology at Asda, Eagle Eye have
extended the use of the platform for other digital solutions,
including digitising staff rewards. After the Period end, Asda
Money also adopted our software platform to deliver enhanced
loyalty points and cashback to credit card members.
In February 2016 the Company signed a multi-year contract with
Loblaw, our first overseas Tier 1 grocery customer, covering more
than 40% of the Canadian grocery market on its own. This project is
fully underway and the relationship has deepened since the start of
the engagement.
FMCG brands
As our reach into the Tier 1 grocery market grows, Eagle Eye's
opportunity with FMCG brands now becomes a key area of strategic
focus. These brands are the major contributors to the more than
$540bn digital marketing spend worldwide, according to Carat.
During the course of the Period the number of brands signed up to
our platform increased significantly from 17 to 70. During the
Period the Company also delivered several brand marketing campaigns
through the network including those for Diageo, Heineken and
Unilever, supported by new relationships with leading marketing
agencies, Starcom, Mediacom and Mindshare. We are confident that
this pillar of our strategy will be a major revenue generator in
the coming year.
Food & Beverage ("F&B")
The year has seen good progress in our F&B client base with
increased revenues driven by new solutions for existing clients
such as Prezzo and M&B as well as new clients wins with The
Restaurant Group and La Tasca. We are extending our issuance
partners with new partnerships secured with WEVE, SAVOO and Nectar.
These partners bring new customers to our F&B clients alongside
our existing relationships with Tesco, Vouchercloud and Groupon,
together demonstrating the power of a digitally connected
network.
Product development
As the market moves to digital delivery it is important that we
continue to innovate and extend our software platform to meet the
demands of our clients as well as developing consumer trends.
During the year we introduced new functionality to fully support
the promotional activity of our grocery customers, including
expanding the range of coupon types supported; building
functionality to manage loyalty points; adding continuity schemes
such as stamp cards; and also incorporating "next best offer"
schemes enabling real-time rewards at the point of sale. The
platform has also been developed to support the creation, issuance
and tracking of marketing campaigns by FMCG brands and offer full
support for multi-language and multi-currency customers. In
addition, we have made significant enhancements to our digital
wallet capability, enabling clients to bring together all our
services under a single view of the consumer.
As well as this expanding functionality, we have also invested
in expanding and developing the scalability and infrastructure of
the platform to exceed our customers' growing service level
requirements. We are now the only proven platform that is capable
of supporting full basket analysis and promotional validation in
real time and at scale, through our reference case with Asda.
Financial results
Group revenue increased by 33% to GBP6.5 million (2015: GBP4.9
million) for the Period. Of total revenue, 72%, GBP4.6 million, was
contributed from the core AIR platform (2015: 56%,
GBP2.7million).
The Group's gross profit was GBP5.1 million, representing a
gross margin of 79% (2015: GBP3.5 million, 71%). The increase from
prior year was driven by a higher proportion of revenue generated
from the AIR platform that carries a higher margin than the
messaging business. The adjusted EBITDA loss was GBP1.8 million
(2015: GBP1.5 million loss). To provide a better guide to the
underlying business performance adjusted EBITDA excludes
share-based payment charges along with depreciation, amortisation,
interest and tax from the measure of profit.
The Group had net assets of GBP5.9 million at 30 June 2016
(2015: GBP8.8 million) including cash and cash equivalents of
GBP1.3 million (2015: GBP4.3 million). In June 2016 the Group
arranged a new banking facility with Barclays Bank PLC for a three
year GBP1.5 million revolving loan facility in order to strengthen
the Company's balance sheet as it continues to deepen and broaden
its customer relationships.
People
In addition to the strategic Board changes, the management team
has been further strengthened by the recruitment of a new Sales
Director, Helen Slaven, in May 2016. As a senior sales director in
both the retail and technology sectors, Helen brings extensive
experience and an international network of contacts necessary for
us to deliver against our revenue targets.
The past 12 months has seen rapid growth in our team. We have
seen the average headcount increase from 50 to 73, moved into a
permanent office in Guildford with the right facilities to support
the enhanced status of the business, and introduced HR systems to
develop, measure, reward and motivate our growing headcount. More
recently we have opened an operation in Toronto to support our
services in Canada and with Phill Blundell leading the operation I
expect there to be rapid growth over the next 12 months. The skill,
dedication and talent of our people are fundamental to our growing
business. We have made good progress over the last 12 months and
will continue to make improvements to ensure we attract the best
talent.
Looking ahead
The past year has seen good progress against our objective to
make our mission possible and I believe that all the key components
are now in place. We are well placed in terms of our management
team, our client base and platform capability to take advantage of
the significant and growing market opportunity. I have confidence
that the coming year will see significant progress and value
creation for our shareholders.
Tim Mason, Chief Executive Officer
Financial Review 2016
Group Results
Key Performance Indicators
2016 2015
GBP000 GBP000
--------------------------------- -------- --------
Financial
--------------------------------- -------- --------
Revenue 6,458 4,854
--------------------------------- -------- --------
Adjusted EBITDA loss(1) (1,823) (1,521)
--------------------------------- -------- --------
Cash and cash equivalents 1,322 4,292
--------------------------------- -------- --------
2016 2015
--------------------------------- -------- --------
Non-Financial
--------------------------------- -------- --------
Number of redemptions 38.4m 17.4m
--------------------------------- -------- --------
Like for like messaging volumes 40.3m 40.1m
--------------------------------- -------- --------
% of subscription transaction
revenue 80% 80%
--------------------------------- -------- --------
Customers and brands on the
platform 219 156
--------------------------------- -------- --------
(1) EBITDA loss excludes share-based payment charges along with
depreciation, amortisation, interest and tax from the measure of
profit.
Group results
The Group generated solid revenue growth of 33% for the Period,
with revenue increasing to GBP6.5 million (2015: GBP4.9 million).
H2 FY16 revenue accounted for GBP3.5m (H1 FY16: GBP3.0million),
representing growth of 36% year on year. Half by half growth rate,
therefore, represents 19% (H2 FY15 to H1 FY16: 14%).
Underpinning this growth was the revenue from the AIR platform
that represented 72% of total revenue, GBP4.6m (2015: 56%,
GBP2.7m). This increase has been driven by increased redemption
volumes through existing clients and the implementation of new
major projects in the Period at Sainsbury's and Loblaw. Of this
specific revenue stream the element specifically linked to
strategic recurring subscription and transactions saw an 84%
increase to GBP3.5m (FY15: GBP1.9m), aided specifically with the
national roll out of the AIR platform across all Asda stores.
Redemption volumes, a key measure of usage of the AIR platform,
were 38.4 million for the Period (2015: 17.4 million) a growth of
121% year-on-year driven by our solution for Asda's coupon counting
going fully live in February 2016 and increased volumes from
existing F&B clients.
Overall, GBP5.2 million of revenue generated from subscriptions
fees and transactions over the network represented 80% of total
revenue (2015: 80%, GBP3.9 million). The preservation of this share
of revenue year-on-year illustrates the success of our recurring
subscription business model with limited upfront licence fees. The
balance, GBP1.3 million, relates to implementation fees for new
customers and new services and represents 20% of total revenue
(2015: 20%, GBP1.0 million).
Messaging revenue was GBP1.8 million for the Period (2015:
GBP2.1m), despite maintaining similar message volumes year on year
(c.40m). Revenue per message was impacted by a key contract renewal
at the start of FY16 and reflects the competitive messaging market.
The revenue represents a shortfall from management expectations due
to both the volatility in messaging volumes of existing clients and
the timing of implementation of new wins. The Company won several
new contracts during the second half of the Period, including
Swinton and Asurion, which will have a positive impact in FY17.
The gross margin increased from 71% to 79% in 2016 as gross
profit grew to GBP5.1 million (2015: GBP3.5 million). The core AIR
gross margin carries a significantly higher margin than the
messaging business, increasing from 87% to 92% in 2016. This
increase, together with core AIR revenue now accounting for 72% of
total revenue, has driven the improved margin.
Operating costs
Operating costs of GBP7.5 million (2015: GBP5.6 million)
represent sales and marketing, product development (net of
capitalised costs), operational IT, general, administration and
share based payment costs. The overall increase was in line with
management expectations. Our investment in people for planned
strategic activity is the main driver of this growth, with the
average headcount for the year increasing to 73 (2015: 50).
Within staff costs gross expenditure on product development
increased 43% to GBP1.7 million (2015: GBP1.2 million) reflecting
our investment in enhancing the capabilities of our platform.
Capitalised product development costs at GBP1.2 million (2015:
GBP1.0 million) represented 69% of gross development spend whilst
amortisation of capitalised development costs was GBP1.6 million
(2015: GBP1.4 million).
EBITDA
Reflecting our planned investment, Group adjusted EBITDA loss
for the Period was GBP1.8 million (2015: loss GBP1.5 million). To
provide a better guide to the underlying business performance,
adjusted EBITDA excludes share-based payment charges along with
depreciation, amortisation, interest and tax from the measure of
profit.
EPS and dividend
Reported basic and diluted loss per share was 16.36p (2015: loss
per share 16.17p).
The Board does not feel it appropriate at this time to commence
paying dividends.
Group Statement of Financial Position
The Group had net assets of GBP5.9 million at 30 June 2016
(2015: GBP8.8 million), the decrease in net assets reflects
predominantly the cash movement explained below. Cash and cash
equivalents of GBP1.3 million (2015: GBP4.3 million) was ahead of
management expectations due to robust working capital
management.
Cashflow and net cash
The main components to the gross cash decrease of GBP3.0 million
for the Period (2015: GBP2.0 million increase) were operating cash
outflow of GBP1.5 million (2015: GBP0.8 million) and capital
investment in the AIR platform and tangible fixtures and
fittings.
Aside from the investment in a permanent head office, the year
was relatively modest in terms of investing activities, reflecting
the typically low levels of capital expenditure required on
tangible assets for the business. Capital expenditure on property,
plant and equipment totalled GBP0.3 million (2015: GBP0.02 million)
while capitalised intangible asset additions totalled GBP1.2
million (2015: GBP1.0 million), relating to the capitalisation of
development cost for the AIR platform.
In 2015 net receipts included an inflow from a new share placing
of GBP3.8 million.
Banking facility
The Group arranged new banking facilities in June 2016. A three
year GBP1.5 million revolving loan facility was agreed with
Barclays Bank PLC to strengthen the Company's balance sheet as it
continues to deepen and broaden its Tier 1 relationships with
national and international customers. This facility was not drawn
down during the Period.
Consolidated statement of total comprehensive income
for the year ended 30 June 2016
2016 2015
Note GBP000 GBP000
Continuing operations
Revenue 3 6,458 4,854
Cost of sales (1,369) (1,385)
--------------------------------------- ----- ---------------------- -------------------
Gross profit 5,089 3,469
Adjusted operating expenses
(1) (6,912) (4,990)
--------------------------------------- ----- ---------------------- -------------------
Loss before interest, tax,
depreciation, amortisation
and share based payment charge (1,823) (1,521)
--------------------------------------- ----- ---------------------- -------------------
Share based payment charge (632) (593)
Depreciation and amortisation (1,645) (1,441)
Operating loss (4,100) (3,555)
Finance income 2 -
--------------------------------------- ----- ---------------------- -------------------
Loss before taxation (4,098) (3,555)
Taxation 473 203
--------------------------------------- ----- ---------------------- -------------------
Loss after taxation for the
financial year (3,625) (3,352)
Foreign exchange adjustments 16 -
--------------------------------------- ----- ---------------------- -------------------
Total comprehensive loss attributable
to the owners of the parent
for the financial year (3,609) (3,352)
--------------------------------------- ----- ---------------------- -------------------
(1) Adjusted operating expenses excludes share based payment
charge
Loss per share
From continuing operations
Basic and diluted 4 (16.36)p (16.17)p
--------------------------------------- ----- ---------------------- -------------------
Consolidated statement of financial position
as at 30 June 2016
2016 2015
GBP000 GBP000
Non-current assets
Intangible assets 4,838 5,206
Property, plant and
equipment 243 53
5,081 5,259
----------------------------- -------- --------
Current assets
Trade and other receivables 2,080 1,417
Cash and cash equivalents 1,322 4,292
------------------------------- -------- --------
3,402 5,709
----------------------------- -------- --------
Total assets 8,483 10,968
------------------------------- -------- --------
Current liabilities
Trade and other payables (2,394) (1,839)
Non-current liabilities
Deferred tax liability (220) (290)
------------------------------- -------- --------
Total liabilities (2,614) (2,129)
------------------------------- -------- --------
Net assets 5,869 8,839
------------------------------- -------- --------
Equity attributable
to owners of the parent
Share capital 222 221
Share premium 10,991 10,985
Merger reserve 3,278 3,278
Share option reserve 1,230 608
Retained losses (9,852) (6,253)
------------------------------- -------- --------
Total equity 5,869 8,839
------------------------------- -------- --------
Consolidated statement of changes in equity
for the year ended 30 June 2016
Share
Share Share Merger option Retained
capital premium reserve reserve losses Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1
July 2014 201 7,209 3,278 197 (3,083) 7,802
----------------------- --------- --------- --------- --------- ---------- ------------
Loss for the
financial year - - - - (3,352) (3,352)
----------------------- --------- --------- --------- --------- ---------- ------------
Transactions
with owners
recognised in
equity
Issue of share
capital 20 4,006 - - - 4,026
Issue costs - (230) - - - (230)
Fair value of
share options
lapsed in the
year - - - (182) 182 -
Share based
payment charge - - - 593 - 593
20 3,776 - 411 182 4,389
----------------------- --------- --------- --------- --------- ---------- ------------
Balance at 30
June 2015 221 10,985 3,278 608 (6,253) 8,839
----------------------- --------- --------- --------- --------- ---------- ------------
Loss for the
financial year - - - - (3,625) (3,625)
Other comprehensive
income
Foreign exchange
adjustments - - - - 16 16
----------------------- --------- --------- --------- --------- ---------- ------------
- - - - (3,609) (3,609)
----------------------- --------- --------- --------- --------- ---------- ------------
Transactions
with owners
recognised in
equity
Exercise of
share options 1 6 - - - 7
Fair value of
share options
exercised in
the year - - - (10) 10 -
Share based
payment charge - - - 632 - 632
1 6 - 622 10 639
----------------------- --------- --------- --------- --------- ---------- ------------
Balance at 30
June 2016 222 10,991 3,278 1,230 (9,852) 5,869
----------------------- --------- --------- --------- --------- ---------- ------------
Consolidated statement of cash flows
for the year ended 30 June 2016
2016 2015
GBP000 GBP000
Cash flows from operating
activities
Loss before taxation (4,098) (3,555)
Adjustments for:
Depreciation 80 42
Amortisation 1,565 1,399
Share based payment charge 632 593
Finance income (2) -
Increase in trade and other receivables (663) (63)
Increase in trade and other payables 555 418
Income tax received 403 362
Net cash flows from operating activities (1,528) (804)
------------------------------------------------ -------- --------
Cash flows from investing
activities
Payments to acquire property, plant and
equipment (270) (17)
Payments to acquire intangible
assets (1,197) (958)
Net cash flows used in investing activities (1,467) (975)
------------------------------------------------ -------- --------
Cash flows from financing
activities
Net proceeds from issue of
equity 7 3,796
Interest received 2 -
Net cash flows from financing
activities 9 3,796
-------- --------
Net (decrease)/increase in cash and cash
equivalents in the year (2,986) 2,017
Foreign exchange adjustments 16 -
Cash and cash equivalents
at beginning of year 4,292 2,275
------------------------------------------------ -------- --------
Cash and cash equivalents
at end of year 1,322 4,292
------------------------------------------------ -------- --------
Notes to the consolidated preliminary financial information
1 Basis of preparation
The financial information set out herein does not constitute
statutory accounts as defined in Section 434 of the Companies Act
2006. The financial information for the year ended 30 June 2016 has
been extracted from the Group's audited financial statements which
were approved by the Board of Directors on 20 September 2016 and
which, if adopted by the members at the Annual General Meeting,
will be delivered to the Registrar of Companies for England and
Wales.
The financial information for the year ended 30 June 2015 has
been extracted from the Group's audited financial statements which
were approved by the Board of Directors on 15 September 2015 and
which have been delivered to the Registrar of Companies for England
and Wales.
The reports of the auditor on both these financial statements
were unqualified, did not include any references to any matters to
which the auditors drew attention by way of emphasis without
qualifying their report and did not contain a statement under
Section 498(2) or Section 498(3) of the Companies Act 2006.
The information included in this preliminary announcement has
been prepared on a going concern basis under the historical cost
convention, and in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the EU and the
International Financial Reporting Interpretations Committee (IFRIC)
interpretations issued by the International Accounting Standards
Board ("IASB") that are effective or issued and early adopted as at
the date of these financial statements and in accordance with the
provisions of the Companies Act 2006.
The Company is a public limited company incorporated and
domiciled in England & Wales and whose shares are quoted on
AIM, a market operated by The London Stock Exchange.
2 Going concern
As part of their going concern review the Directors have
followed the guidelines published by the Financial Reporting
Council entitled "Guidance on Risk Management and Internal Control
and Related Financial and Business Reporting".
The Directors have prepared detailed financial forecasts and
cash flows looking beyond 12 months from the date of approval of
these consolidated financial statements. In developing these
forecasts the Directors have made assumptions based upon their view
of the current and future economic conditions that will prevail
over the forecast period.
On the basis of the above projections, the Directors are
confident that the Group has sufficient working capital to honour
all of its obligations to creditors as and when they fall due. In
reaching this conclusion, the Directors have considered the
forecast cash headroom, the resources available to the Group and
the potential impact of changes in forecast growth and other
assumptions, including the potential to avoid or defer certain
costs and to reduce discretionary spend as mitigating actions in
the event of such changes. Accordingly, the Directors continue to
adopt the going concern basis in preparing these consolidated
financial statements.
3 Segmental analysis
The Group is organised into one principal operating division for
management purposes. Therefore the Group is considered to have only
one operating segment and further segmental information is not
required to be disclosed. Revenue is analysed as follows:
2016 2015
GBP000 GBP000
Development and set up fees 1,275 992
Subscription and transaction
fees 5,183 3,862
6,458 4,854
------------------------------ ------- -------
2016 2015
GBP000 GBP000
AIR revenue 4,637 2,733
Messaging revenue 1,821 2,121
6,458 4,854
------------------- ------- -------
Continuing revenues can be attributed to the following
countries, based on the customers' location, as follows:
2016 2015
GBP000 GBP000
United Kingdom 5,871 4,515
North America 405 -
Rest of Europe 81 194
Asia 101 145
6,458 4,854
---------------- ------- -------
4 Loss per share
The calculation of basic and diluted loss per share is based on
the result attributable to ordinary shareholders divided by the
weighted average number of ordinary shares in issue during the
year. The weighted average number of shares for the purpose of
calculating the basic and diluted measures is the same. This is
because the outstanding share options would have the effect of
reducing the loss per ordinary share and therefore would be
anti-dilutive. Basic and diluted loss per share from continuing
operations is calculated as follows:
2015
Loss 2016 Loss Weighted
per Weighted average per average number
share Loss number of share Loss of ordinary
pence GBP000 ordinary shares pence GBP000 shares
Basic and diluted
loss per share (16.36) (3,625) 22,155,260 (16.17) (3,352) 20,721,298
------------------- -------- -------- ------------------ -------- -------- ----------------
5 Report and Accounts
A copy of the Annual Report and Accounts will be sent to all
shareholders with notice of the Annual General Meeting.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EAKNEASDKEFF
(END) Dow Jones Newswires
September 21, 2016 02:00 ET (06:00 GMT)
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