TIDMFDP
RNS Number : 9895Q
FD Technologies PLC
02 November 2021
2 November 2021
FD Technologies plc
("FD Technologies", the "Company" or the "Group")
Results for the six months ended 31 August 2021
FD Technologies (AIM: FDP.L, Euronext Growth: FDP.I) today
announces its results for the six months ended 31 August 2021.
Seamus Keating, CEO of FD Technologies, commented: "I am very
encouraged by the increasing momentum across the business since we
announced our accelerated growth strategy in May 2021. The
opportunity for KX to deliver continuous intelligence remains
enormous, and we are excited by the traction we are achieving
across industries. Our cloud-first platform, KX Insights, was
launched during the period and we have already signed new
enterprise customers who, importantly, are already getting value
from their investment. The investment in our go-to-market strategy
is also starting to deliver returns, evidenced by accelerating
growth in recurring revenue, partner engagement, industry
accreditation and strengthening pipeline. We have signed three
times as many subscription deals as we did in the same period last
year. Both First Derivative and MRP are performing strongly, driven
by good demand from both existing and new customers.
The outlook across our businesses is positive, with each
business unit expected to meet or exceed its full year growth
target. We are particularly excited by the growing evidence that KX
Insights can make real-time decision-making easy to implement for
organisations. With its increasing ease of use, deployment freedom
and interoperability, backed by our investment in leadership and
go-to-market capability, we see KX as strongly positioned to build
a market-leading position in continuous intelligence."
Business Highlights
-- Key investment targets met including a 52% increase in the
size of the KX go-to-market team, delivering on technology
development milestones and upgrading systems and processes
-- Total of 41 KX subscription deals in the period (H1 FY21:
14), a threefold increase on the prior year period as we focus on
growing recurring subscription revenue
-- Signed 12 new customers across financial services,
automotive, manufacturing, utilities and healthcare, all of which
have significant expansion potential
-- Launch of KX Insights, our cloud-first platform, during the
period with six customers signed during the period, including a
global enterprise deal with Alpine F1, using Microsoft Azure for
actionable intelligence on and off the track
-- Executing the shift to high-value recurring revenue in KX,
with Net Retention Rate increasing to 102% from 99% at the year
end
-- Reduced the sales cycle and the deployment effort required
for KX, accelerating the time to value for our customers as we
focus on growth in annual recurring license revenue
-- Increased strategic engagement with major cloud partners,
with multiple pipeline deals for KX Insights with Microsoft Azure,
Amazon Web Services and Google Cloud
-- Recognition from industry analysts Forrester and Gartner of
KX's strengths in real-time streaming analytics
Financial Highlights
Six months to end August 2021 2020 Change
Revenue GBP128.0m GBP119.6m 7%
---------- ------------ --------------
Gross profit GBP51.7m GBP48.2m 7%
---------- ------------ --------------
(Loss)/profit before tax (GBP1.6m) GBP7.4m NM
---------- ------------ --------------
Reported diluted EPS (7.5p) 21.8p NM
---------- ------------ --------------
Net debt* GBP11.7m GBP30.6m (62%)
---------- ------------ --------------
Adjusted performance measures
---------- ------------ --------------
Adjusted EBITDA** GBP14.9m GBP21.5m (31%)
---------- ------------ --------------
Adjusted diluted EPS 11.7p 31.7p (63%)
---------- ------------ --------------
Progress on Key Performance Indicators Target Status
---------- ----------------------------
KX exit Annual Recurring Revenue (ARR) growth +25% On track for year
end,
40% of target achieved
in H1,
c.60% achieved by
the end of October
---------- ----------------------------
First Derivative revenue growth +10% Currently ahead,
+18% in H1
---------- ----------------------------
MRP platform revenue growth +20% On track for year
end,
+17% in H1
---------- ----------------------------
* Excluding lease obligations
** Adjusted for share-based payments and acquisition and non-operational
costs
Financial Highlights
-- Financial performance in line with expectations following the
announcement of our accelerated growth strategy
-- Growth metrics trending upwards through the period, with
c.60% growth in KX ARR achieved by end of October; advanced
pipeline provides confidence in achieving full year target
-- Revenue growth of 18% in First Derivative, delivered through
a combination of improving market conditions, focus on key areas of
expertise and enhancements to our leadership and go-to-market
strategy
-- MRP platform revenue growth of 17%, driven by rebound in
activity from existing customers and new client wins
-- Adjusted EBITDA down 31% to GBP14.9m, driven by previously
announced investment in KX in line with our strategy
-- Net debt at period end of GBP11.7m, with 62% reduction from
prior period reflecting our continued focus on working capital
After the period end, the Group sold its stake in associate
RxDataScience Inc. We are currently assessing the fair value of the
initial and deferred consideration which will be reported at year
end. The proceeds from the sale eliminate the Group's net debt
position, with the acquiror committing to a KX license subscription
agreement.
Current trading and outlook
-- The investments made to date in sales and marketing, R&D
and scaling the Group are on track and showing encouraging early
returns, providing a positive outlook across our businesses with
greater visibility from higher levels of recurring revenue
-- The Board reiterates revenue guidance for the current
financial year in the range of GBP255m to GBP260m, with adjusted
EBITDA in the range of GBP31m to GBP33m.
For further information, please contact:
FD Technologies plc +44(0)28 3025 2242
Seamus Keating, Chief Executive Officer www.fdtechnologies.com
Ryan Preston, Chief Financial Officer
Ian Mitchell, Head of Investor Relations
Investec Bank plc
(Nominated Adviser and Broker)
Andrew Pinder
Carlton Nelson
Virginia Bull +44 (0)20 7597 5970
Goodbody (Euronext Growth Adviser and Broker)
David Kearney
Don Harrington
Finbarr Griffin +353 1 667 0420
FTI Consulting
Matt Dixon
Dwight Burden
Elena Kalinskaya +44 (0)20 3727 1000
About FD Technologies
FD Technologies is a group of data-driven businesses that unlock
the value of insight, hindsight and foresight to drive
organisations forward. The Group comprises KX, the leading
technology for real-time continuous intelligence; First Derivative,
which provides technology-led services in capital markets; and MRP,
the only enterprise-class, predictive Accounts Based Marketing
solution. FD Technologies operates from 15 offices across Europe,
North America and Asia Pacific, and employs more than 3,000 people
worldwide.
For further information, please visit www.fdtechnologies.com and
www.kx.com
Results presentation
FD Technologies will publish a pre-recorded presentation today
at 07.05 GMT on its website at
https://fdtechnologies.com/investor-relations/presentations/ . The
Group will also host a live results Q&A session for analysts at
09.30 GMT today.
Business Review
FD Technologies comprises KX, the leading technology for
real-time continuous intelligence; First Derivative, which provides
technology-led services in capital markets; and MRP, which uses KX
to power the only enterprise-class, predictive Account Based
Marketing (ABM) solution.
During the period the Group executed on its strategy and made
good progress on its financial targets. Revenue increased by 7% to
GBP128m, with a stronger underlying performance balanced by a
planned reduction in perpetual license revenue and software
implementation revenue as we target growth in annual recurring
revenue. Adjusted EBITDA was GBP15m, down 31% as a result of the
investment in KX announced in May 2021 and in line with our
expectations.
In May 2021 we detailed our plans to invest in growth, driven by
increasing market opportunities for KX. Below we detail that
opportunity and the progress made in H1 to enable KX to become the
market-leading technology for real-time streaming analytics.
The KX opportunity
KX achieved prominence in capital markets, where its unmatched
performance enabled investment banks to combine the millions of
data points received each second from financial markets with
historical data to provide actionable intelligence, for example
through algorithmic trading and market surveillance. Over the past
two decades KX has become the leading technology in this space and
continues to grow as new ways to derive value from market data are
developed.
Now, other industries are recognising the benefits that
operational intelligence powered by streaming analytics can bring
to their organisations. IDC estimates that from 2021 to 2025 there
will be a 4x increase in data created annually to 175 zettabytes
per year, with the biggest driver of that growth being enterprise,
particularly IoT, and real-time data. Gartner forecasts that by
next year more than half of major new business systems will
incorporate continuous intelligence that uses real-time context
data to make improved decisions. KX is ideally positioned to enable
organisations to benefit from the growth in data so that they can
make better, in-the-moment decisions that drive competitive
advantage.
The addressable market for such solutions is very large, with
Adroit Market Research estimating the global streaming analytics
market to be worth $39bn per annum by 2025. In situations where the
data sets being analysed are large and/or fast moving, KX performs
without equal and as data volumes increase and contextual
intelligence become key, it is an important technology to unlock
value for organisations.
To capitalise fully on the market opportunity, we are
undertaking a programme of investment to increase KX's ease-of-use
and interoperability, while growing the go-to-market capability
through greater sales and marketing spend and scaling the business
to deliver this growth. We are the world's most powerful streaming
analytics platform available however customers and partners wish to
deploy it, whether that is natively on the cloud, on premise, at
the edge or any combination of those.
We have already seen early examples of how KX can deliver
actionable insights in ways such as identifying machinery faults in
manufacturing before they break, by helping multiple motor sport
teams to improve their performance on and off the track and
enabling next generation systems to transform the energy market. We
are engaged in multiple discussions, both directly and through
partners, with companies across industries that see the power of KX
to drive competitive advantage.
Operational progress
During the period we made good operational progress in the areas
we identified for investment:
Sales and marketing
In line with our accelerated growth strategy, our focus during
the period has been on closing deals to achieve our financial
targets, scaling our sales team to grow our pipeline and increasing
recognition of KX as the leading technology for real-time
continuous intelligence.
Closing more deals more quickly. We signed 53 new deals in H1
(H1 FY21: 29) of which 41 were subscription (H1 FY21: 14). This
delivered 40% of our full-year target of 25% growth in exit ARR.
Since the period end, we have signed further deals that took us
c.60% towards our target at the end of October which, when combined
with our advanced pipeline, provides us with confidence in
achieving our full-year target.
Highlights from these deals include:
-- Deployment of KX to power a major healthcare manufacturing
facility, providing a complete analytics system capturing sensor
data from multiple sources to improve the efficiency of the
facility. The initial deal is for a single factory, with plans
under discussion to roll out across the customer's operations
around the world. The customer was looking for more advanced
analytics and the deployment in the first factory has been
successful, enabling the customer to terminate its legacy analytics
solution.
-- Initial migration of an existing investment bank customer
from maintenance to KX Insights on Amazon Web Services. The
customer has migrated part of its KX plant and is live with KX
Insights, setting new records for workload migration in the bank
with complete business continuity. We are currently discussing the
roadmap for further migrations with this client, as well as the
potential for KX Insights to deliver more of its real-time
analytics. In addition, we are engaged in discussions with the
majority of our top 20 investment bank customers regarding
migrating to KX Insights.
-- A significant deal with a major pharmaceutical company to use
KX Insights as the data management and analytics platform for all
clinical trial and patient data.
Scaling our sales capability. Our investment in sales and
marketing in the period included a 52% increase in the go-to-market
team to over 100 people, with senior experience in enterprise
software. We also implemented new CRM and sales management systems
to increase our capability to scale and re-aligned our commission
structure to focus on the generation of annual recurring revenue,
in line with our strategy.
Our strategy also involves accelerating the time to value for
our customers, encompassing technology development to ensure KX is
easier to configure and deploy and building our customer success
team to ensure rapid and successful deployments. As expected, the
success of this approach resulted in lower revenue from
implementation services during the period but will enable more
rapid scaling of recurring software license revenues and lead to
higher customer satisfaction and advocacy.
We saw encouraging early returns from this investment, with
pipeline growth ahead of our expectations, backed by improved sales
execution. Conversion rates also improved through the period,
providing momentum into H2.
Increasing recognition of KX. Our marketing efforts continue to
generate awareness of and recognition for KX. We stepped up our
efforts to generate greater awareness of KX, building a position as
a thought leader in the real-time streaming analytics landscape.
During the period the strengths of KX were also recognised for the
first time by leading industry analysts Forrester and Gartner in
their reports on the streaming analytics market.
Technology development
Our R&D roadmap is designed to support our strategic
objective of making KX the platform of choice for continuous
intelligence, by prioritising ease of use, interoperability with
other technologies and integration with partners such as hyperscale
cloud providers. By advancing these goals KX will enable its
customers to gain competitive advantage more quickly, driving
growth in our recurring revenue.
During the period we made good progress, assisted by the
recruitment of more engineers with deep understanding of building
and deploying technologies in cloud environments. We:
-- Launched KX Insights, a cloud-first platform that fully
leverages the benefits of cloud architecture natively to deliver
fast, scalable real-time insights without the added burden of
infrastructure, complicated upgrades, or the need to optimise for
different cloud environments. KX Insights has been certified to run
natively on all major hyperscale cloud providers including Amazon
Web Services, Microsoft Azure and Google Cloud.
-- Completed integration work with complementary technologies.
Enabling KX to integrate seamlessly with other technologies in the
analytics ecosystem such as the hyperscale cloud providers and data
platforms is a key objective and we continued this work in the
period. We also announced integration with Telit's deviceWISE IOT
platform to provide manufacturers with a deeper, richer
understanding of their manufacturing process, with use cases such
as quality control and predictive maintenance.
-- Launched new versions of several of our applications,
including our sensors and surveillance offerings, with additional
functionality.
Our roadmap is focused on making KX Insights a platform that
operates seamlessly within the cloud ecosystem and is easily
consumable by organisations and developers. Our focus in H2 will be
launching support for advanced analytics, Python and SQL querying,
opening more use cases to KX and further promoting adoption and
ease of use. Our goal is for the platform to be an end-to-end
application that will seamlessly unify streaming data with the
universe of stored data.
Infrastructure investment
Our strategy to accelerate growth includes GBP4m external
investment in the current year to support delivery of growth,
principally through new ERP and CRM systems. Our CRM systems are
installed and delivering value, while we have selected Oracle Cloud
Fusion as our cloud-based ERP vendor, with the configuration and
deployment work expected to be completed by the end of the current
financial year. These systems underpin our capability to scale the
Group and assist us to deliver our growth targets.
First Derivative - technology-led services in capital
markets
First Derivative had a busy and successful period which resulted
in revenue growth of 18%. While there was growth in the market for
our services, our performance was driven by a range of our own
measures, including the successful launch of the First Derivative
brand, improvements to our go-to-market strategy and enhancements
to the organisational structure.
First Derivative has a very large addressable market, with
Gartner estimating that investment banks spend more than $200bn per
annum on technology services. We work with all the top 20 global
investment banks and during the past six months we have focussed on
delivering more for them, which in some cases has resulted in a
doubling of their spend with us.
The market backdrop was one where customers were keen to deliver
change programmes and had sufficient budget for this, although
regulatory compliance and cost pressures still exert their
influence. Our key strength is our reputation for excellence in
delivery, which we have built on during the year by increasing our
focus on helping our customers meet their challenges, rather than
by augmenting their teams.
We hired a record number of experienced consultants in the
business in the period and had 232 graduates start their careers
with First Derivative. We improved our internal processes and
capabilities, including improvements to recruitment and training
processes that enable us to respond more quickly to demand from
customers. We also changed the business structure, rebranding our
business activities as People, Data and Technology, each of which
has its own leadership, while our go-to-market strategy places
emphasis on the depth of our domain knowledge across these
areas.
The measures we have taken above, coupled with improved market
conditions, have accelerated our growth and we are comfortable we
can maintain the current growth rate. They have also resulted in a
strong pipeline of opportunities giving confidence over the outlook
beyond the current year.
MRP - the only enterprise-class, predictive ABM solution
MRP provides global sales and marketing leaders with an
enterprise class predictive Account Based Marketing (ABM) platform,
powered by KX, and supporting products and services to enable them
to identify and engage potential customers earlier and more
effectively. MRP had a strong H1 as global economies recovered,
driven by both adding new customers and existing customers resuming
spending, following a pause last year due to the impact of
COVID-19.
Examples included:
-- A leading global enterprise technology provider which paused
much of its spending in early 2021 is now investing across more
geographies to drive business growth.
-- A global cloud security company which became a client in June
2021 has rapidly scaled investment across MRP's product line.
-- A global cloud platform computing leader that piloted with
MRP in FY21 has significantly increased its spending with MRP in
FY22 to drive new customer acquisition.
The imminent launch of Prelytix 3.0, our next-generation ABM
platform, will provide additional functionality that will
strengthen the ability of our customers to analyse their market and
identify and engage with their potential customers, as well as
making it easier for new customers to obtain value from their
investment in Prelytix. This and the momentum in the market
provides us with confidence in continued strong growth in MRP and
the ability to meet our target growth of 20% in platform
revenue.
People
The Group currently employs more than 3,000 people, up from more
than 2,400 at the same time last year. The increase was driven by a
combination of investment, particularly in sales and marketing
within KX, and growth at First Derivative.
Within KX, we recruited multiple senior salespeople covering
particular industries and geographies. They included Mark Bannon,
President of North American sales, who joined from TIBCO, and John
Olsen, also with a background in enterprise software sales, who
joined to head up our Industry sales. At First Derivative, we
increased our recruitment to pre-pandemic levels to meet growing
demand for our services.
During the period we were pleased to be selected as the Best
Company for Diversity & Inclusion in the Water's Women in Tech
& Data Awards and continue to focus on these important areas,
through programmes aimed at making FD Technologies an employer of
choice within technology.
Current trading and outlook
During the period we executed on our investment plan in sales
and marketing, R&D and infrastructure to support growth, with
encouraging early signs of the potential returns from that
investment in the form of strengthened customer and partner
engagement. The positive trends seen in the period have continued
into the second half of the financial year with strong pipelines
across the business, leaving the Group's business units on track to
meet or exceed their revenue targets. The Board reiterates that
revenue for the current financial year will be in the range of
GBP255m to GBP260m, with adjusted EBITDA in the range of GBP31m to
GBP33m.
Financial review
Revenue and Margins
The table below shows the breakdown of Group performance by
business unit for each of KX, First Derivative and MRP.
H1 FY22 H1 FY21
---------------------------------------
Group KX First MRP Group KX First MRP Group
Derivative Derivative change
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Revenue 128.0 31.9 70.7 25.3 119.6 37.7 59.8 22.2 7%
Cost of sales (76.2) (9.8) (51.1) (15.3) (71.4) (11.7) (45.7) (13.9) 7%
Gross profit 51.7 22.1 19.6 10.0 48.2 25.9 14.0 8.2 7%
Gross margin 40% 69% 28% 40% 40% 69% 23% 37%
R&D expenditure (10.7) (9.5) (0.1) (1.1) (7.7) (7.7) 0.0 0.0 39%
R&D capitalised 9.3 8.1 0.1 1.1 6.1 6.1 0.0 0.0 53%
Net R&D (1.4) (1.4) (0.0) (0.0) (1.6) (1.6) 0.0 0.0 (13%)
Sales and marketing
costs (25.0) (12.1) (7.9) (5.0) (17.5) (8.3) (5.0) (4.2) 43%
Adjusted admin
expenses (10.4) (4.2) (4.7) (1.5) (7.6) (2.9) (3.1) (1.5) 37%
Adjusted EBITDA 14.9 4.5 6.9 3.4 21.5 13.1 5.9 2.5 (31%)
Adj. EBITDA margin 12% 14% 10% 14% 18% 35% 10% 11%
Group revenue increased by 7% to GBP128.0m (H1 FY21: GBP119.6m),
driven by growth in First Derivative and MRP balanced by lower
professional services and perpetual license revenue in KX, in line
with our stated strategy to focus on growth in ARR. Group gross
profit increased by 7% to GBP51.7m, reflecting improved margin
performance in First Derivative and MRP due to increased
utilisation while KX maintained its margin at 69%. Group gross
margin was unchanged at 40%.
As stated at our full year results in May 2021, the Group is
accelerating its investment in KX in light of the growing market
opportunities, including sales and marketing (additional GBP7m in
the current financial year), R&D (GBP5m) and infrastructure,
including new CRM and ERP systems (GBP4m). This investment is
reflected during the period in the GBP7.5m (43%) increase in sales
and marketing costs, GBP3.0m (39%) increase in R&D expenditure
and GBP2.8m (37%) increase in adjusted admin expenses. As a result,
Group adjusted EBITDA fell by 31%, in line with our
expectations.
KX
KX total Financial services Industry
-------------------------------- -----------------------
H1 FY22 H1 FY21 Change H1 FY22 H1 FY21 Change H1 FY22 H1 FY21 Change
GBPm GBPm GBPm GBPm GBPm GBPm
Revenue 31.9 37.7 (15%) 27.8 34.5 (19%) 4.1 3.2 29%
Perpetual 1.5 4.9 (70%) 0.7 4.6 (84%) 0.8 0.4 103%
Recurring 19.0 18.4 3% 17.5 17.3 1% 1.5 1.2 27%
Total licenses 20.4 23.4 (12%) 18.2 21.8 (17%) 2.2 1.5 45%
-------- -------- ---------- -------- -------- --------
Services 11.5 14.3 (20%) 9.6 12.7 (24%) 1.9 1.7 13%
Gross profit 22.1 25.9 (15%)
Adjusted EBITDA 4.5 13.1 (66%)
KX revenue decreased by 15% to GBP31.9m, driven by reductions in
perpetual license and services revenue, with a 3% increase in
recurring license revenue. In line with our strategy, we are
phasing out sales of KX on a perpetual license basis, with such
revenue falling by 70% to GBP1.5m during the period. Recurring
license revenue represented 60% of total KX revenue (H1 FY21: 49%).
Services revenue declined due to a combination of lower license
sales in the prior year and our efforts to speed up time to value
for KX, resulting in faster and less costly implementations of our
technology for our customers.
Our Industry sector performed strongly during the period, led by
deals across industries such as F1 motor racing, manufacturing,
healthcare, and utilities. Financial services revenue declined
principally as a result of the reduction in perpetual license and
professional services revenue set out above. Performance in Q2 was
stronger than Q1 and across our business we have a promising
pipeline of direct and partner-led opportunities that provide
confidence that this momentum can be maintained.
Gross profit decreased by GBP3.8m (15%), principally due to the
GBP3.4m reduction in perpetual license revenue, while adjusted
EBITDA fell by GBP8.6m (66%) as a result of the GBP3.8m decline in
gross profit, GBP3.8m increase in sales and marketing cost and
GBP1.3m increase in adjusted admin expenses, in line with our
growth acceleration plan.
H1 H1
Performance metrics FY22 FY21
------
Exit annual recurring revenue
(ARR) GBPm 40.3 36.1
Net revenue retention (NRR) 102% 102%
Gross profit margin 69% 69%
R&D expenditure as % of revenue 30% 20%
Sales and marketing spend
as % of revenue 38% 22%
Adjusted EBITDA margin 14% 35%
Exit ARR was 11% ahead of H1 FY21, with deals signed post the
period end and our pipeline providing confidence in achieving our
full year target of exit ARR growth of at least 25% for FY22. Net
retention rate of 102% is ahead of the 99% recorded for FY21.
First Derivative
H1 H1
FY22 FY21 Change
GBPm GBPm
Revenue 70.7 59.8 18%
Managed services 14.3 12.0 19%
Consulting
services 56.4 47.8 18%
Gross profit 19.6 14.0 40%
Adjusted EBITDA 6.9 5.9 17%
During the period we delivered 18% growth, resulting from
improved market conditions and a range of measures taken by the
business, as described in the Business review. During the period we
won several key contracts, including the transition of a major
Bank's risk system to the Google cloud, where we worked in
partnership with Google; the renewal of a large managed services
contract, for a further five years with an increased scope; and
assisting with the strategic reorganisation of one of our
customers. It remains the case that most of our engagements are
long-term in nature.
Due to COVID-19 the vast majority of our assignments are
currently delivered through remote working. We continue to work
with our customers to determine the future shape of our engagements
and the balance between on-site and remote working.
H1 H1
Performance metrics FY22 FY21
------
Gross profit margin 28% 23%
Adjusted EBITDA margin 10% 10%
Gross margins increased to 28% from 23% reflecting a combination
of improved utilisation and higher value services provided to
customers, while EBITDA margins were maintained during the period
as we invested in our sales and leadership capability to drive our
longer-term growth.
MRP
H1 H1
FY22 FY21
GBPm GBPm Change
Revenue 25.3 22.2 14%
Platform 14.0 11.9 17%
Services 11.4 10.2 11%
Gross profit 10.0 8.2 22%
Adjusted EBITDA 3.4 2.5 39%
MRP targets growth in recurring revenue, from a combination of
subscriptions to the Prelytix platform and data-driven engagement
between our customers and their prospects. Our services revenue is
derived from enabling customers to engage with prospective
customers and to progress them through their sales funnel.
MRP reported a strong performance in the period, with platform
revenue increasing by 17% to GBP14.0m, representing 55% of total
revenue (H1 FY21: 54%). Growth was consistently in double digits
across the geographies MRP serves for its global customer base.
H1 H1
Performance metrics FY22 FY21
------
Platform revenue GBPm 14.0 11.9
Gross profit margin 40% 37%
Adjusted EBITDA margin 14% 11%
Gross profit increased by 22% and adjusted EBITDA by 39% due to
the greater proportion of higher margin platform revenue and
operational gearing in MRP's services business.
Adjusted EBITDA
The reconciliation of operating profit to adjusted EBITDA is
provided below:
H1 FY22 H1 FY21
GBPm GBPm
Operating Profit 1.5 10.1
Acquisition and non-operational costs* 2.5 0.5
Share based payment and related costs 1.1 0.8
Depreciation and amortisation 9.7 10.1
------- -------
Adjusted EBITDA 14.9 21.5
* Acquisition and non-operational costs include GBP1.0m (H1
FY21: GBP0.0m) of ERP and CRM implementation costs following the
IFRIC update on accounting for cloud implementation costs
Profit before tax
Adjusted profit before tax decreased by 54% to GBP4.9m (H1 FY21:
GBP10.7m) as a result of the investment to accelerate growth
announced in May 2021. The resulting GBP6.6m reduction in adjusted
EBITDA largely flowed through to adjusted profit before tax, with
only minor movements in depreciation and amortisation and a
reduction in finance costs resulting from lower net debt.
On a reported basis, the Group recorded a loss of GBP1.6m in the
period compared with a profit of GBP7.4m in the prior period. The
major factors here were an increase in acquisition and
non-operational related costs, mainly due to costs associated with
the ERP programme being expensed as incurred, and costs in relation
to M&A activity in the period, and a GBP1.4m loss on foreign
currency translation due largely to the impact of the movement in
US$ rate on our USD$ loan.
The reconciliation of adjusted EBITDA to reported profit before
tax is provided below.
H1 FY22 H1 FY21
GBPm GBPm
Adjusted EBITDA 14.9 21.5
Adjustments for:
Depreciation (3.3) (3.6)
Amortisation of software development costs (4.9) (4.7)
Financing costs (2.0) (2.5)
Finance income 0.2 -
Adjusted profit before tax 4.9 10.7
Adjustments for:
Amortisation of acquired intangibles (1.5) (1.8)
Share based payment and related costs (1.1) (0.8)
Acquisition and non-operational costs * (2.5) (0.5)
(Loss) on foreign currency translation (1.4) (0.2)
Share of profit of associate - -
Finance income - -
Reported (loss)/profit before tax (1.6) 7.4
* Acquisition and non-operational costs include GBP1.0m (H1
FY21: GBP0.0m) of ERP and CRM implementation costs following the
IFRIC update on accounting for cloud implementation costs
Earnings per share
On a reported basis, the Group recorded a loss of GBP2.1m after
tax, compared to a profit after tax of GBP6.1m in the prior period,
for the reasons stated above mitigated by a lower tax charge of
GBP0.5m (H1 FY21: GBP1.4m). Reported diluted loss per share was
7.5p (H1 FY21: 21.8p profit per share).
The adjusted profit after tax for the period of GBP3.3m (H1
FY21: GBP8.8m) represented a decrease of 63%. The calculation of
adjusted profit after tax is detailed below:
H1 FY22 H1 FY21
GBPm GBPm
Reported (loss) / profit after tax (2.1) 6.1
Adjustments from profit before tax (as per the table
above) 6.5 3.2
Tax effect of adjustments (1.1) (0.5)
Adjusted profit after tax 3.3 8.8
Weighted average number of ordinary shares (diluted) 28.1m 27.9m
Reported EPS (fully diluted) (7.5p) 21.8p
Adjusted EPS (fully diluted) 11.7p 31.7p
Balance sheet
Total assets decreased by GBP27.6m with cash and cash
equivalents decreasing by more than 28% to GBP50.8m (H1 FY21:
GBP71.6m), following repayment of the GBP34.2m drawdown on our
finance facility at the beginning of the COVID-19 pandemic that is
no longer required. Loans and borrowings fell to GBP88.9m (H1 FY21:
GBP130.0m) of which GBP62.6m related to bank loans (H1 FY21:
GBP102.2m) and the remainder to lease liabilities.
Cash generation and net debt
The Group generated GBP12.4m of cash from operating activities
before taxes paid (H1 FY21: GBP24.3m) representing 84% conversion
of adjusted EBITDA. We continued to focus on cash collection, while
the performance during the prior period benefited from lower growth
rates which improved working capital. We continue to expect cash
generated from operating activities to represent 80-85% of adjusted
EBITDA.
At the period end, net debt was GBP11.7m (H1 FY21: GBP30.6m).
The factors impacting the movement in net debt are summarised in
the table below:
H1 FY22 H1 FY21
GBPm GBPm
Opening net debt (excluding lease liabilities) (9.9) (49.4)
Cash generated from operating activities 12.4 24.3
Taxes paid (0.5) (0.4)
Capital expenditure: property, plant and equipment (0.2) (1.3)
Capital expenditure: intangible assets (9.6) (6.1)
Investments (0.1) (0.5)
Issue of new shares 0.6 5.5
Interest, foreign exchange and other (4.4) (2.7)
Closing net debt (excluding lease liabilities) (11.7) (30.6)
After the period end, the Group sold its stake in associate
RxDataScience Inc. We are currently assessing the fair value of the
initial and deferred consideration, which will be reported at year
end, and the proceeds from the sale eliminate the Group's net debt
position. It occurred as part of the Group's strategy of assisting
companies that were adopting KX in new and innovative ways. This
programme has been de-emphasised in recent years and the Group has
instead focused its efforts on signing partnership agreements.
Definition of terms
The Group uses the following definitions for its key
metrics:
Exit annual recurring revenue (ARR): is the value at the end of
the accounting period of the software and subscription recurring
revenue to be recognised over the proceeding twelve months.
Net retention rate (NRR): is based on the actual revenues in the
quarter annualised forward to twelve months and compared to the
annualised revenue from the four quarters prior. The customer
cohort is comprised of customers in the quarter that have generated
revenue in the prior four quarters.
Adjusted admin expenses: is a measure used in internal
management reporting which comprises administrative expenses per
the statement of comprehensive income of GBP23.5m (H1 FY21:
GBP18.7m) adjusted for depreciation and amortisation of GBP9.7m (H1
FY21: GBP10.1m), share based payments and related costs of GBP1.1m
(H1 FY21: GBP0.8m) and acquisition and non-operational costs of
GBP2.5m (H1 FY21: GBP0.5m).
Consolidated income statement (unaudited)
Six months ended 31 August
2021 2020
Note GBP'000 GBP'000
Revenue 3 & 4 127,950 119,601
Cost of sales 3 (76,209) (71,413)
Gross profit 51,741 48,188
Operating costs
Research and development costs (10,733) (7,691)
Of which capitalised 9,347 6,120
Sales and marketing costs (25,042) (17,535)
Administrative expenses (23,486) (18,737)
Impairment (loss)/gain on trade and other receivables (345) (221)
Other income 46 -
--------- ---------
Total operating costs 50,213 38,064
Operating profit 1,528 10,124
Finance income 248 13
Finance expense (2,011) (2,511)
Loss on foreign currency translation (1,377) (203)
--------- ---------
Net finance costs (3,140) (2,701)
Share of profit/ (loss) of associate, net of
tax - 17
--------- ---------
(Loss) / Profit before taxation (1,612) 7,440
Income tax expense (498) (1,351)
(Loss) / Profit for the period (2,110) 6,089
--------- ---------
Pence Pence
Earnings per share 6
Basic (7.6) 22.2
Diluted (7.5) 21.8
Consolidated balance sheet (unaudited)
As at 31 August 2021
As at As at As at
31 August 31 August 28 February
2021 2020 2021
Note GBP'000 GBP'000 GBP'000
Assets
Property, plant and equipment 30,612 34,725 33,541
Intangible assets and goodwill 151,655 150,537 147,513
Equity accounted investee 2,681 2,838 2,649
Other financial assets 16,673 16,228 14,760
Trade and other receivables 3,751 2,086 3,312
Deferred tax assets 17,774 15,674 14,719
----------- ----------- -------------
Non-current assets 223,146 222,088 216,494
Trade and other receivables 63,407 73,854 75,102
Current tax receivable 4,443 1,909 3,208
Cash and cash equivalents 50,828 71,572 55,198
----------- ----------- -------------
Current assets 118,678 147,335 133,508
Total assets 341,824 369,423 350,002
----------- ----------- -------------
Equity
Share capital 7 139 138 139
Share premium 100,232 96,559 99,396
Merger reserve 8,118 8,118 8,118
Shares option reserve 17,909 15,712 16,790
Fair value reserve 10,762 3,587 10,682
Currency translation adjustment reserve (5,014) (1,052) (5,628)
Retained earnings 50,586 50,214 53,177
----------- ----------- -------------
Equity attributable to shareholders 182,732 173,276 182,674
----------- ----------- -------------
Liabilities
Loans and borrowings 8 79,644 119,539 83,596
Trade and other payables 2,976 2,210 2,431
Deferred tax liabilities 14,507 11,086 11,428
----------- ----------- -------------
Non-current liabilities 97,127 132,835 97,455
Loans and borrowings 8 9,245 10,442 9,244
Trade and other payables 9 43,661 46,814 53,591
Current tax payable 231 - 269
Employee benefits 8,828 6,056 6,769
Current liabilities 61,965 63,312 69,873
Total liabilities 159,092 196,147 167,328
----------- ----------- -------------
Total equity and liabilities 341,824 369,423 350,002
----------- ----------- -------------
Consolidated statement of changes in equity (unaudited)
Six months ended 31 August 2021
Share Currency
Share Share Merger option Fair value translation Retained Total
capital premium reserve reserve reserve adjustment earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 March 2021 139 99,396 8,118 16,790 10,682 (5,628) 53,177 182,674
Total comprehensive income
for the period
(Loss) for the period - - - - - - (2,110) (2,110)
Other comprehensive income
Net exchange loss on net
investment
in foreign subsidiaries - - - - - 964 - 964
Net exchange gain on hedge
of net investment in foreign
subsidiaries - - - - - (350) - (350)
Net change in fair value of
equity investments at FVOCI - - - - (401) - - (401)
Crystalisation of FV loss
on disposal of investment - - - - 481 - (481) -
-------- -------- -------- -------- ---------- ------------ --------- -------
Total comprehensive income
for the period - - - - 80 614 (2,591) (1,897)
Transactions with owners of
the Company
Tax relating to share options - - - 119 - - - 119
Exercise of share options - - - - - - - -
Issue of shares - 836 - - - - - 836
Share-based payment charge - - - 1,000 - - - 1,000
Dividends to owners of the - - - - - - - -
Company
-------- -------- -------- -------- ---------- ------------ --------- ---------
Balance at 31 August 2021 139 100,232 8,118 17,909 10,762 (5,014) 50,586 182,732
-------- -------- -------- -------- ---------- ------------ --------- ---------
Consolidated statement of changes in equity (unaudited)
Six months ended 31 August 2020
Share Currency
Share Share Merger option Fair value translation Retained Total
capital premium reserve reserve reserve adjustment earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 March 2020 136 91,002 8,118 13,775 3,587 2,418 44,125 163,161
Total comprehensive income
for the period
Profit for the period - - - - - - 6,089 6,089
Other comprehensive income
Net exchange gain on net
investment
in foreign subsidiaries - - - - - (6,964) - (6,964)
Net exchange loss on hedge
of net investment in foreign
subsidiaries - - - - - 3,494 - 3,494
Net change in fair value of - - - - - - - -
equity investments at FVOCI
-------- -------- -------- -------- ---------- ------------ --------- -------
Total comprehensive income
for the period - - - - - (3,470) 6,089 2,619
Transactions with owners of
the Company
Tax relating to share options - - - 1,187 - - - 1,187
Exercise of share options 2 5,444 - - - - - 5,446
Issue of shares - 113 - - - - - 113
Share-based payment charge - - - 750 - - - 750
Dividends to owners of the - - - - - - - -
Company
-------- -------- -------- -------- ---------- ------------ --------- -------
Balance at 31 August 2020 138 96,559 8,118 15,712 3,587 (1,052) 50,214 173,276
-------- -------- -------- -------- ---------- ------------ --------- -------
Consolidated cash flow statement (unaudited)
Six months ended 31 August
2021 2020
GBP'000 GBP'000
Cash flows from operating activities
(Loss) / Profit for the period (2,110) 6,089
Adjustments for:
Net finance costs 3,140 2,701
Depreciation of property, plant and equipment 3,202 3,544
Amortisation of intangible assets 6,531 6,539
Profit on Disposal of Fixed Assets 3 -
Associate income - 17
Equity settled share-based payment transactions 1,000 750
Grant income (44) -
Tax expense 498 1,351
-------- ----------
12,220 20,991
Changes in:
Trade and other receivables 9,182 7,273
Trade and other payables (8,975) (3,948)
-------- ----------
Cash generated from operating activities 12,427 24,316
Taxes paid (550) (351)
-------- ----------
Net cash from operating activities 11,877 23,965
Cash flows from investing activities
Interest received 5 13
Acquisition of other investments and associates (54) (378)
Increase in loans to other investments - (161)
Acquisition of property, plant and equipment (183) (1,318)
Capitalisation of intangible assets (9,625) (6,169)
Net cash used in investing activities (9,857) (8,013)
Cash flows from financing activities
Proceeds from issue of share capital 581 5,559
Drawdown of loans and borrowings - 34,208
Repayment of borrowings (3,377) (3,280)
Payment of finance lease liabilities (1,390) (2,151)
Interest paid (1,733) (2,702)
Dividends paid - -
-------- ----------
Net cash generated from financing activities (5,919) 31,634
Net increase in cash and cash equivalents (3,899) 47,586
Cash and cash equivalents at 1 March 55,198 26,068
Effects of exchange rate changes on cash held (471) (2,082)
-------- ----------
Cash and cash equivalents at 31 August 50,828 71,572
-------- ----------
Notes to the Interim Results
1. General information
FD Technologies plc ("FD Technologies", the "Company" or the
"Group") is a public limited company incorporated and domiciled in
Northern Ireland. The Company's registered office is 3 Canal Quay,
Newry BT35 6BP. This condensed consolidated interim financial
information was approved for issue by the Board of Directors on 1
November 2021.
This condensed consolidated interim financial information does
not comprise statutory financial statements within the meaning of
section 434 of the Companies Act 2006. Statutory financial
statements for the year ended 28 February 2021 were approved by the
Board of Directors on 17 May 2021 and delivered to the Registrar of
Companies. The auditors reported on those accounts: their report
was unqualified, did not draw attention to any matters by way of
emphasis and did not contain a statement under section 498(2) or
(3) of the Companies Act 2006.
2. Accounting policies
Basis of Preparation
The annual financial statements for the Group will be prepared
in accordance with United Kingdom adopted International Financial
Reporting Standards. This condensed consolidated interim financial
information for the half-year ended 31 August 2021 has been
prepared in accordance with United Kingdom adopted IAS 34, 'Interim
financial reporting'. The condensed consolidated interim financial
information should be read in conjunction with the annual financial
statements for the year ended 28 February 2021, which have been
prepared in accordance with IFRSs as adopted by the European
Union.
This condensed consolidated interim financial information is
unaudited and has not been reviewed by the Company's Auditors.
Except as described below they have been prepared on accounting
bases and policies that are consistent with those used in the
preparation of the financial statements of the Company for the year
ended 28 February 2021.
Going concern
The directors are satisfied that the Group has sufficient
resources to continue in operation for the foreseeable future, a
period of not less than 12 months from the date of this report.
Accordingly, we continue to adopt the going concern basis in
preparing the condensed financial statements.
Changes in accounting policies
The following standards, amendments and interpretations were
effective for accounting periods beginning on or after 1 March 2021
and these have been adopted in the Group financial statements where
relevant:
-- IFIRC Update - Configuration or Customisation costs in a
Cloud Computing Arrangement (IAS38 - Intangible Assets)
There are no other standards that are not yet effective and that
would be expected to have a material impact on the entity in the
current or future reporting periods and on foreseeable future
transactions.
Critical accounting estimates and judgements
The critical accounting judgements and key sources of estimation
uncertainty are consistent with the Group financial statements for
the year to 28 February 2021 and no additional new uncertainties or
estimation uncertainty have arisen.
Information about critical judgements in applying accounting
policies that have the most significant impact on the amounts
recognised in the financial statements are as follows:
-- Expenditure on development activities, whereby research
findings are applied to a plan or design for the production of new
or substantially improved products and processes, is capitalised
only if development costs can be measured reliably, the product or
process is technically and commercially feasible, future economic
benefits are probable and the Group intends to and has sufficient
resources to complete development and to use or sell the asset. The
expenditure capitalised in respect of software assets includes the
cost of materials, direct labour and an appropriate proportion of
overheads that are directly attributable to preparing the asset for
its intended use. Other development expenditure is recognised
through profit and loss as an expense as incurred. Capitalised
development expenditure is measured at cost less accumulated
amortisation and impairment losses.
-- Management has assessed that in respect of equity
investments, the Group does not hold significant influence over the
investees' financial and operating policies.
-- Management applies judgement in the recognition of revenue,
determining when performance obligations are satisfied and control
transferred. In particular, for software products provided as an
annual license, including the right to regular upgrades, judgement
is required when assessing whether the annual license is a separate
performance obligation from the provision of upgrades to the
customer. Management has assessed that the ongoing updates and
upgrades to the software are fundamental to the value of the
software and that without these updates the value of the software
will substantially deteriorate over time. Therefore, the annual
license and the updates and upgrades are combined as one
performance obligation and revenue is recognised over the life of
the license as the service is delivered.
Information about assumptions and estimation uncertainties that
have a significant risk of resulting in a material adjustment to
the carrying amounts of assets and liabilities are as follows:
-- Under IFRS goodwill on acquisitions is not amortised but is
tested for impairment on an annual basis. Management has assessed
goodwill for impairment based on the projected profitability of the
individual cash-generating unit to which the goodwill relates. No
impairments have been identified. Other intangibles are being
amortised and tested for impairment if an indicator of impairment
is identified.
-- Management has estimated the fair value of equity investments
and convertible loans. Management has reviewed recent market
activity and has applied a discounted cash flow valuation technique
to assess the fair value of the assets as at year end considering
the forecast revenue and EBITDA, together with forecast exit value
applying market multiples, discounted using a risk-adjusted
discount rate.
-- For financial assets held at amortised cost, management has
estimated an expected credit loss allowance on a forward-looking
basis. Loss rates for trade receivables and accrued income
(contract assets) are based on; historical payment behaviours,
current economic circumstances of customers and type of product
purchased. For non-convertible loans and other receivables the
Group allocates each exposure to a credit risk grade based on data
that is determined to be predictive of the risk of loss (including
but not limited to external ratings, audited financial statements,
management accounts and cash flow projections and available press
information) and applying experienced credit judgement.
Management has assessed that there are no other estimates or
judgements that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities
recognised in the financial statements.
3. Segmental Reporting
Information about reportable segments
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision maker.
The chief operating decision maker has been identified as Mr.
Seamus Keating, Chief Executive Officer and his executive
management team.
The Group is organised into three operating segments (as
identified under IFRS 8 Operating Segments) and generates revenue
through the following activities:
KX - the leading technology for real-time continuous
intelligence.
First Derivative (FD) - which provides technology and data
services in its primary market of Financial Services.
MRP - is at the forefront of Account Based Marketing (ABM), with
its Prelytix platform enabling sales and marketing organisations to
grow new business by identifying and engaging the most likely
buyers of our customers' products and services.
The chief operating decision maker monitors the operating
results of segments separately in order to allocate resources
between segments and to assess performance. Segment performance is
predominantly evaluated based on operating profit before
acquisition and non-operational costs, share based payment and
related costs, depreciation and amortisation of intangible assets
('adjusted EBITDA'). These costs are managed on a centralised basis
and therefore these items are not allocated between operating
segments for the purpose of presenting information to the chief
operating decision maker and accordingly are not included in the
detailed segmental analysis.
Intersegment revenue is not material and thus not subject to
separate disclosure.
KX First Derivative MRP TOTAL
H1 H1 H1 H1 H1 H1 H1 H1
2022 2021 2022 2021 2022 2021 2022 2021
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue by segment 31,917 37,676 70,704 59,758 25,330 22,167 127,950 119,601
-------- -------- --------- -------- -------- -------- -------- --------
Gross Profit 22,135 25,944 19,573 14,043 10,034 8,200 51,741 48,188
Adjusted EBITDA 4,486 13,057 6,936 5,944 3,449 2,499 14,871 21,500
Acquisition and non-operational
costs (2,473) (482)
Share based payment and related
costs (1,137) (811)
Depreciation and amortisation (8,184) (8,294)
Amortisation of acquired intangible
assets (1,549) (1,789)
Operating Profit 1,528 10,124
Geographical location analysis
H1 H1
2022 2021
GBP'000 GBP'000
UK 34,948 34,374
Rest of Europe 21,885 21,824
North America 56,247 49,334
Asia Pacific 14,870 14,069
Total 127,950 119,601
4. Revenue
Disaggregation of revenue
KX First Derivative MRP Total
H1 H1 H1 H1 H1 H1 H1 H1
2022 2021 2022 2021 2022 2021 2022 2021
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue by industry
Financial services 27,820 34,489 70,568 59,458 - - 98,388 93,947
MarTech - - - - 25,330 22,167 25,330 22,167
Industry 4,097 3,187 136 300 - - 4,233 3,487
-------- -------- --------- -------- -------- -------- -------- --------
31,917 37,676 70,704 59,758 25,330 22,167 127,950 119,601
-------- -------- --------- -------- -------- -------- -------- --------
Type of good or service
Sale of goods - perpetual 1,464 4,921 - - - - 1,464 4,921
Sale of goods - recurring 18,975 18,433 - - 13,979 11,934 32,954 30,368
Rendering of services 11,478 14,322 70,704 59,758 11,351 10,233 93,533 84,312
-------- -------- --------- -------- -------- -------- -------- --------
31,917 37,676 70,704 59,758 25,330 22,167 127,950 119,601
-------- -------- --------- -------- -------- -------- -------- --------
Timing of revenue recognition
At a point in time 1,464 4,921 - - - - 1,464 4,921
Over time 30,453 32,755 70,704 59,758 25,330 22,167 126,487 114,680
-------- -------- --------- -------- -------- -------- -------- --------
31,917 37,676 70,704 59,758 25,330 22,167 127,950 119,601
-------- -------- --------- -------- -------- -------- -------- --------
5. Tax Expense
The total tax charge for the six months ended 31 August 2021,
including discrete items, is GBP0.5m (H1 FY21: GBP1.4m). This tax
charge equates to an effective tax rate of -30.9% (H1 FY21:
18.2%).
The total tax credit for the six months ended 31 August 2021,
excluding discrete items, is GBP0.3m (H1 FY21: GBP1.4m charge).
This tax credit equates to an effective tax rate of 18.9% (H1 FY21:
18.2%).
In the 2021 UK Budget, the Government announced several
legislative changes to corporation tax including an increase in the
rate of corporation tax to 25% from 1 April 2023. Deferred tax
balances have to be measured using the tax rates that have been
substantively enacted and that are expected to apply to the period
when the asset is realised or the liability is settled. The
rebasing of the UK deferred tax balances has resulted in a discrete
one-off tax charge to the Income Statement of GBP0.8m, which has
been reflected in the effective tax rate of the Group.
The Group has also remeasured the deferred tax balances
accordingly in SOCIE with the enacted rate and has recognised a tax
credit of GBP1.5m in the period.
6. Earnings per Share
Basic earnings per share for the six months ended 31 August 2021
has been calculated on the basis of the reported loss after
taxation of GBP 2.1m (H1 FY21: profit of GBP6.1m) and the weighted
average number of shares for the period of 27,738,539 (H1 FY21:
27,405,169). This provides basic earnings per share of -7.6 pence
(H1 FY21: 22.2 pence).
Diluted earnings per share for the six months ended 31 August
2021 has been calculated on the basis of the reported loss after
taxation of GBP 2.1m (H1 FY21: profit of GBP6.1m) and the weighted
average number of shares after adjustment for the effects of all
dilutive potential ordinary shares 28,026,499 (H1 FY21:27,897,118).
This provides diluted earnings per share of -7.5 pence (H1 FY21:
21.8 pence).
The Board considers that adjusted earnings is an important
measure of the Group's financial performance. Adjusted earnings in
the period were GBP3.3m (H1 FY21: GBP8.8m), which excludes the
amortisation of acquired intangibles of GBP1.5m, (H1 FY21: GBP1.8m)
share-based payments of GBP1.1m (H1 FY21: GBP0.8m), acquisition and
non-operational costs of GBP2.5m (H1 FY21: GBP0.5m), loss on
foreign currency translation of GBP1.4m (H1 FY21: GBP0.2m), share
of profit of associate GBPnil (H1 FY21: GBP17k) and associated
taxation impact of these adjustments of GBP1.1m (H1 FY21: GBP0.5m).
Using the same weighted average of shares as above provides
adjusted basic earnings per share of 11.8 pence (H1 FY21: 32.3
pence) and adjusted diluted earnings per share of 11.7 pence (H1
FY21: 31.7 pence).
7. Share capital
During the period the Group issued 81,162 shares as part of
share-based compensation for employees and remuneration. These
increased the number of shares in issue from 27,717,324 to
27,798,486.
The holders of ordinary shares are entitled to receive dividends
as declared from time to time and are entitled to one vote per
share at meetings of the Company.
8. Loans and borrowings
31 August 28 February
2021 2021
GBP'000 GBP'000
Current liabilities
Secured bank loans 5,558 5,492
Lease liabilities 3,687 3,752
9,245 9,244
Non-current liabilities
Secured bank loans 56,998 59,622
Lease liabilities 22,646 23,974
79,644 83,596
Repayment of secured bank loans in line with previously
disclosed repayment terms amounted to GBP3.0m. Additional
repayments of GBP0.4m were made from the disposal proceeds of
property sales.
The group's principal debt facilities totaling GBP62.6m are
provided by a syndicate of banks and expire in 2024.
9. Trade and other payables
31 August 28 February
2021 2021
GBP'000 GBP'000
Current liabilities
Trade payables 9,448 9,045
Other payables 8,563 13,807
Accruals 3,431 6,214
Deferred income 21,595 23,899
Government grants 624 626
43,661 53,591
Non-current liabilities
Government grants 2,976 2,431
Accruals - -
2,976 2,431
10. Financial instruments
Fair values
a) Accounting classifications and fair values
Group
The following table shows the carrying amounts and fair values
of financial assets and liabilities. The carrying amount of all
financial assets and liabilities not measured at fair value is
considered to be a reasonable approximation of fair value.
Carrying value
----------------------------------------------------------
Financial
assets
at Other
amortised financial
FVPL FVOCI cost liabilities Total Fair value
31 August 2021 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Level
----------------------------- -------- -------- ----------- ------------- ---------- ----------- ------
Financial assets measured
at fair value
Equity securities - 16,673 - - 16,673 16,673 3
Convertible loans 854 - - - 854 854 3
----------------------------- -------- -------- ----------- ------------- ---------- ----------- ------
854 16,673 - - 17,527 17,527
----------------------------- -------- -------- ----------- ------------- ---------- ----------- ------
Financial assets not
measured at fair value
Trade and other receivables - - 58,008 - 58,008 ([1])
Cash and cash equivalents - - 50,828 - 50,828 ([1])
----------------------------- -------- -------- ----------- ------------- ---------- ----------- ------
- - 108,836 - 108,836
----------------------------- -------- -------- ----------- ------------- ---------- ----------- ------
Financial liabilities
not
measured at fair value
Secured bank loans - - - (62,556) (62,556) ([1])
Trade and other payables - - - (39,606) (39,606) ([1])
- - - (102,162) (102,162)
----------------------------- -------- -------- ----------- ------------- ---------- ----------- ------
(1) Fair value not disclosed as the carrying amounts are
considered to be a reasonable approximation of fair value.
Carrying value
----------------------------------------------------------
Financial
assets
at Other
amortised financial
FVPL FVOCI cost liabilities Total Fair value
28 February 2021 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Level
----------------------------- -------- -------- ----------- ------------- ---------- ----------- ------
Financial assets measured
at fair value
Equity securities - 14,760 - - 14,760 14,760 3
Convertible loans 3,122 - - - 3,122 3,122 3
----------------------------- -------- -------- ----------- ------------- ---------- ----------- ------
3,122 14,760 - - 17,882 17,882
----------------------------- -------- -------- ----------- ------------- ---------- ----------- ------
Financial assets not
measured at fair value
Trade and other receivables - - 66,781 - 66,781 ([1])
Cash and cash equivalents - - 55,198 - 55,198 ([1])
----------------------------- -------- -------- ----------- ------------- ---------- ----------- ------
- - 121,979 - 121,979
----------------------------- -------- -------- ----------- ------------- ---------- ----------- ------
Financial liabilities
not
measured at fair value
Secured bank loans - - - (65,114) (65,114) ([1])
Trade and other payables - - - (46,751) (46,751) ([1])
- - - (111,865) (111,865)
----------------------------- -------- -------- ----------- ------------- ---------- ----------- ------
(1) Fair value not disclosed as the carrying amounts are
considered to be a reasonable approximation of fair value.
b) Measurement of fair values
Group
Outside of external market events that showed a material change
to the fair value of investment valuations, as reflected in the
table below, no other indicators have arisen from the valuation
model to indicate a change to the measurement of fair values of
investments.
Reconciliation of Level 3 fair value:
Group
Convertible Unquoted
loans equities
GBP'000 GBP'000
------------------------------ ------------ ---------
Balance at 1 March 2021 3,122 14,760
Purchases - 54
Conversion of loan to equity (2,311) 2,311
Disposals - (674)
Adjustments to fair value - 22
Advances 43 200
Foreign exchange gain - -
------------------------------ ------------ ---------
Balance at 31 August 2021 854 16,673
------------------------------ ------------ ---------
Convertible Unquoted
loans equities
GBP'000 GBP'000
Balance at 1 March 2020 3,447 15,750
Purchases - 2,163
Disposals (421) (6,242)
Adjustments to fair value - 3,175
Advances 165 -
Foreign exchange gain (69) (86)
----------------------------- ------------ ---------
Balance at 28 February 2021 3,122 14,760
----------------------------- ------------ ---------
11. Subsequent Events Note
On 5(th) October 2021 First Derivatives I Limited, a company
wholly owned by FD Technologies Plc, executed an agreement for the
disposal of its holding in its associate RxDataScience Inc. We are
currently assessing the fair value of the initial and deferred
consideration which will be reported at year end.
12. Interim Report
Copies can be obtained from the Company's head and registered
office: 3 Canal Quay, Newry, Co. Down, BT35 6BP and are available
to download from the Company's web site www.fdtechnologies.com
.
13. Responsibility Statement
The Directors confirm that to the best of their knowledge:
a) the condensed set of financial statements has been prepared
in accordance with UK-adopted IAS 34 'Interim Financial
Reporting';
b) the interim management report includes a fair review of the
information required by DTR 4.2.7R (indication of important events
and their impact during the first six months and description of
principal risks and uncertainties for the remaining six months of
the year); and
c) the interim management report includes a fair review of the
information required by DTR 4.2.8R (disclosure of related parties'
transactions and changes therein).
The Directors are responsible for the maintenance and integrity
of the Company's website. Legislation in the United Kingdom
governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
The Directors of FD Technologies plc are listed in the Company's
Report and Accounts for the year ended 28 February 2021. A list of
current Directors is maintained on the FD Technologies plc website:
www.fdtechnologies.com .
14. Forward Looking Statements
The financial information contained in this announcement has not
been audited. Certain statements made in this announcement are
forward-looking statements. Undue reliance should not be placed on
such statements, which are based on current expectations and are
subject to a number of risks and uncertainties that could cause
actual results to differ materially from any expected future
results in forward-looking statements.
The Company accepts no obligation to publicly revise or update
these forward-looking statements or adjust them to future events or
developments, whether as a result of new information, future events
or otherwise, except to the extent legally required.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
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Kingdom. Terms and conditions relating to the use and distribution
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END
IR BCBDBUBGDGBB
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November 02, 2021 03:00 ET (07:00 GMT)
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