TIDMGHT
RNS Number : 9440L
Gresham Technologies PLC
25 July 2017
25 July 2017
Gresham Technologies plc
Clareti software revenues up 138%, adjusted EBITDA up 46%
Gresham Technologies plc (LSE: "GHT", "Gresham" or the "Group"),
the leading software and services company that specialises in
providing real-time transaction control and enterprise data
integrity solutions, is pleased to announce its unaudited half year
results for the six months ended 30 June 2017.
Financial highlights
-- Group revenues up 26% to GBP9.87m (H1 16: GBP7.81m); and up
19% excluding the contribution from C24 Technologies ("C24")
acquisition in October 2016.
-- Clareti revenues up 53% to GBP4.83m (H1 16: GBP3.16m); up 36% excluding C24.
-- Clareti software revenues up 138% to GBP3.72m (H1 16: GBP1.56m); up 103% excluding C24.
-- Clareti annualised recurring revenues up 123% to GBP5.41m (H1
16: GBP2.43m); up 74% excluding C24.
-- Adjusted EBITDA up 46% to GBP2.15m (H1 16: GBP1.47m).
Operational highlights
-- Eight new CTC customers signed in H1 2017.
-- Five new Clareti 24 customers signed in H1 2017.
-- C24 acquisition delivering expected benefits.
-- Strong progress in North American market.
-- Management confident in the strategy and outlook for the Group.
All revenue figures include joint venture revenue share.
Adjusted EBITDA refers to earnings before interest, tax,
depreciation and amortisation, adjusted for one-off exceptional
charges and share-based payments.
Ian Manocha, CEO, commented:
"In the first six months of the year Clareti licence sales grew
by over 100%. We added another eight new CTC customers and doubled
our Clareti recurring revenue. There's strong demand for disruptive
data solutions in global financial markets and Gresham is very well
placed to capitalise on this as we enter the second half of the
year."
A copy of the results presentation provided to analysts will be
available on Gresham's website by 10.00a.m. today. Gresham will
also be holding a presentation for private and retail investors at
10.00a.m. on Wednesday 26 July 2017 at One Bartholomew Lane, London
EC2N 2AX. Admittance for the event is strictly limited to those who
register their attendance in advance. For further information and
to register attendance, please contact Gresham on
investorrelations@greshamtech.com.
Enquiries
+44 (0) 207 653
Gresham Technologies plc 0200
Ian Manocha
Rob Grubb
+44 (0) 207 496
N+1 Singer (Joint Broker) 3000
Shaun Dobson
Lauren Kettle
Cantor Fitzgerald Europe (Joint +44 (0)20 7894
Broker) 7000
Marc Milmo
Catherine Leftley
Callum Butterfield
Note to editors
Gresham's award-winning Clareti software platform has been
designed to provide financial institutions with complete certainty
in their data processing. Clareti is a highly flexible and fully
scalable platform for assuring enterprise data integrity and is
designed to address today's most challenging financial control,
internal risk management, data governance and regulatory compliance
problems. Gresham's portfolio of applications based on the Clareti
platform, including Clareti Transaction Control (CTC), Clareti
Accounts Receivable Management (Clareti ARM), Clareti Loan Control
(CLC) and Clareti 24 Integration Objects (C24 IO), provide
innovative industry specific solutions for real-time data
management.
Gresham Technologies plc is a leading software and services
company that specialises in providing real-time transaction control
and enterprise data integrity solutions. Listed on the main market
of the London Stock Exchange (GHT.L) and headquartered in the City
of London, customers include some of the world's largest financial
institutions, all of whom are served locally from offices located
in Europe, North America and Asia Pacific.
Chief Executive review
Strategic overview
The Group aims to establish Clareti as the enterprise data
integrity solutions "category leader" in global financial markets
and thereby build a sustainable and profitable growth business
based on high-margin Clareti licence sales, recurring revenue
subscriptions and cloud services.
Our portfolio of innovative applications, all based on the
Clareti platform, address complex financial control, risk,
compliance and data governance challenges. Our flagship offering,
Clareti Transaction Control (CTC), is specifically built to disrupt
a market dominated by a small number of legacy vendors whose
inflexible technology architectures fail to address the increasing
need for more granular and real-time data control across the
entirety of a firm's operations. Market demand for more agile
alternatives is particularly high among financial market
participants, driven by a global regulatory agenda which is
increasingly focussed on data integrity and governance. Gresham is
ideally placed to address these needs with its modern technology
and deep industry domain expertise.
As a new entrant to the market, our strategy to win early
customers initially involved targeting requirements under-served by
inflexible legacy technology. By the end of H1 2017, with nearly 50
customer wins since its launch, CTC is now regarded as the leading
offering for the control of complex non-standardised data flows and
our success is opening the opportunity for direct replacements of
legacy vendors. Our integration of C24 financial message processing
capability and our ongoing product development strengthens our
ability to directly target our competitors' installed base and
enable our customers to move towards a preferred enterprise-wide
solution. Our product development plan is to focus the majority of
our resources on CTC and directly associated up-sell offerings such
as Clareti Analytics, and in parallel invest in other applications
based on the same platform technologies to provide additional
standalone revenue streams for the future.
Our go-to-market strategy predominantly involves deploying
direct sales teams into the major financial markets in the UK,
Europe and North America. We are investing to open more indirect
channels and partnerships to extend our reach and grow market
share. Our Asia Pacific business focusses on major account
management and supports the Group with global customer support and
delivery capability.
The C24 business, our first acquisition for nearly ten years,
has now been successfully integrated and is performing as expected.
The Board continues to consider further opportunities, including
strategic acquisitions, to accelerate growth and market share.
Trading update
The Group earns revenues from the sale of software and provision
of ancillary consultancy services. The following summarises the
Group's financial performance in the six months to 30 June
2017:
H1 H1 2016 Variance
2017
GBP'm GBP'm GBP'm %
---------------------- ------ ------ -------- --------------------------- ------
Revenues
Clareti Software
Recurring (including
joint venture revenue
share) 2.50 1.25 1.25 100%
Non-recurring 1.22 0.31 0.91 294%
------------------------------- ------ -------- --------------------------- ------
Software 3.72 1.56 2.16 138%
Services 1.11 1.60 (0.49) (31%)
------------------------------- ------ -------- --------------------------- ------
Total KPI 4.83 3.16 1.67 53%
Other Solutions
Recurring 2.34 3.05 (0.71) (23%)
Non-recurring 2.70 1.60 1.10 69%
------------------------------- ------ -------- --------------------------- ------
Total 5.04 4.65 0.39 8%
Total KPI 9.87 7.81 2.06 26%
---------------------- ------- ------ -------- --------------------------- ------
Total excluding joint
venture revenue share 9.77 7.81 1.96 25%
Annualised recurring revenue (including
joint venture) as at 30 June
Clareti ARR KPI 5.41 2.43 2.98 123%
Group ARR KPI 9.98 8.50 1.48 17%
The Group has had a strong start to the year driven by new sales
growth in the Clareti business. The contribution from C24 and
non-Clareti products recurring software revenues was as expected.
Our professional services revenues, whilst lower than in H1 2016,
was also as expected.
In the first half of the year, we won eight new CTC customers,
including three in the important North America market. New
customers came from our targeted industries including banking,
investment management and insurance broking. In addition, we signed
five standalone Clareti 24 Integration Objects sales, and a further
number licensed as Clareti Adapters where the C24 IO product is
offered with technical integration into CTC. New licence contracts
were a mix of term and subscription, and two clients chose to
deploy in the cloud with a Clareti-as-Service subscription.
In the first six months, Clareti revenues represented 49% of
total Group revenues (H1 16: 40%) and, as at 30 June 2017, Clareti
annualised recurring revenues (ARR) are up by 123% to GBP5.41m (30
June 2016: GBP2.43m) giving improved visibility for future
years.
Earnings H1 2017 H1 2016 Variance
GBP'm GBP'm GBP'm %
------------------ ----- ------- -------- -------- --------------- ---------
Gross margin GBPm 8.36 6.36 2.00 31%
Gross margin % 86 81 5 6%
Adjusted EBITDA KPI GBPm 2.15 1.47 0.68 46%
Adjusted EBITDA % 22 19 3 16%
Statutory profit
before tax KPI GBPm 1.11 0.67 0.44 66%
--------
Adjusted diluted
EPS pence 2.76 1.70 1.06 62%
------------------------- ------ -------- -------- --------------- ---------
Strong growth in sales of Clareti has had the expected positive
impact on profitability of the Group with increased Gross Margin of
86% (H1 16: 81%), increased Adjusted EBITDA by 46% to GBP2.15m (H1
16: GBP1.47m) and increased Adjusted Diluted Earnings per Share by
63% to 2.76 pence per share (H1 16: 1.70 pence per share).
Cashflow H1 H1 2016 Variance
2017
GBP'm GBP'm GBP'm %
------------------------- ------- -------- --------------- ------------
Operating cashflow
excluding working
capital 1.68 1.40 0.28 20%
Movement in working
capital 0.54 - 0.54 n/a
Capital expenditure
- development costs (1.75) (2.00) 0.25 (13%)
Capital expenditure
- other (0.10) (0.40) 0.30 (75%)
Other 0.24 0.20 (0.04) 20%
Closing cash 7.81 3.90 3.92 101%
--------------------------- ------- -------- --------------- ------------
Cash & cash equivalents 7.21 3.90 3.32 85%
Cash deposits 0.60 - 0.60 n/a
The Group continues to be funded from operating cash and has no
debt. During the six months ended 30 June 2017, cashflow arising
from operating activities grew by 20% to GBP1.7m (H1 16: GBP1.4m)
as a direct result of the Group's increasing profitability. The
Group saw further net cash inflows from working capital
differences, primarily from payments in advance in respect of our
contracting business which totals GBP1.7m at 30 June 2017.
The Group's increasing cash profitability, coupled with the gain
from working capital and lower capital expenditure year-on-year,
means that the Group's closing cash (including bank term deposits)
was GBP7.8m, which is higher than the previous year financial
year-end (31 Dec 16: GBP7.21m) and significantly higher than the
same point last year (30 June 16: GBP3.90m).
Field Operations and Customer Success
Investment in sales and marketing and an increasing repertoire
of successful customer projects are all contributing towards the
growing awareness of Gresham in the market.
We are pleased to have made such good progress in the North
American market having planned careful investments in our New York
presence with experienced leadership, additional sales and
technical resources and a new office in downtown Manhattan. Our
reference customers now include our flagship Tier 1 bank win from
December 2016 which has successfully gone live; two US hedge funds
now live with Clareti-as-a-Service in the cloud; and an additional
three North American clients that signed for CTC in the first six
months of 2017.
We were particularly pleased to sign one of Canada's leading
banks for an enterprise scale deployment, as announced on 3 July
2017, and one of the world's largest asset managers who selected
CTC to support their global operations and will deploy in both the
US and Europe. These two customers are replacing legacy vendor
installations as part of modernising their data integrity and
control processes. North America now represents 29% of Clareti
annualised recurring revenue. We expect to see increasing services
demand from the region in the second half and will be investing to
build our local delivery expertise.
In Europe, our fourth insurance broker won in December 2016 went
live with Clareti-as-a-Service in the cloud, and we signed two new
banking customers and one further customer in investment
management.
In our Asia Pacific business, two new Australian customers chose
to licence CTC on a project basis for data migration and regulatory
reporting work.
The Group is focussed on achieving rapid return on investment
for customers, exceptional levels of customer satisfaction and
close ongoing dialogue with product development. Our goal is to
build a highly engaged community of users, executive sponsors,
industry influencers and delivery partners, in order to increase
advocacy in the marketplace. Eight customers went live with CTC in
the first six months, building further on our list of reference
clients. There are nearly 50 Clareti platform customers (excluding
standalone C24 customers) using the software live in their business
daily and customer satisfaction is very good. In the first six
months, we achieved a 98.5% customer satisfaction score across all
our customer support tickets and an overall SLA compliance of over
99% across the Clareti software suite. Our Net Promoter Score(R)
was 56, which would be rated as excellent against the benchmark for
the software industry which is typically around 41.
The Group's consulting services operation is profitable, and new
service products are being adopted alongside implementation
services to ensure that customers receive the benefit of Gresham
expertise throughout the lifecycle. The Group's portfolio of other
products is trading in line with expectations.
Products and innovation
At our Innovation Labs in Bristol we continue to invest in new
product development, as well as enhance our existing offerings to
remain competitive. Our achievements in the first half include:
-- Clareti Transaction Control, our first Clareti application
and our flagship offering, is fast becoming the category leader for
control of non-standard transaction data in financial markets. In
the first six months of 2017 we released new template functionality
for ingesting data feeds, and in the second half of the year we are
investing further in capability to compete more directly with the
legacy vendors in their core markets.
-- Clareti Analytics was launched in May to provide CTC clients
with rich business insights into the operational performance of
their data control functions. In addition, Clareti Analytics also
provides the opportunity for clients to explore the strategic
business value of their in-flight transactional and trading related
data. Two new clients have already signed for this offering
alongside their investment in the Clareti platform.
-- Clareti-as-a-Service, our cloud platform delivered on AWS,
continues to mature and has now been adopted by CTC clients in the
US, UK and Asia Pacific. We have now processed over 100 million
matches on this platform since launch last year and we expect
volumes to grow significantly over time.
-- Clareti Accounts Receivable Management (Clareti ARM) is our
leading white-label offering for transaction banks. In the first
six months of 2017 our offering has been enhanced with multi-bank
capabilities and industry configuration templates. An
implementation project has started in one of Australia's largest
banks to deploy Clareti ARM alongside their CTC installation.
-- Clareti 24 is the C24 technology acquired in October 2016. It
is used by customers to model and transform any type of data of any
complexity using a graphical development environment designed to
provide a clean, simple route from model to implementation, with
minimal code. We have now fully integrated the technology in to our
Clareti suite of solutions and sell it alongside CTC as a Clareti
Adapter.
New products still in development include:
-- Clareti Data Accelerator (CDA), an emerging solution for
financial markets participants struggling with poor quality in
their data lakes and standing data sources. The product is maturing
as proof of concept work progresses.
-- Clareti Loan Control (CLC) 1.0 is in production use with
Mount Street Loan Solutions LLP, our joint venture partner and
first CLC customer. This cloud-based offering is the industry's
first front-to-back debt servicing platform for complex loans and,
in the longer term, will provide a complementary business to CTC.
CLC has been enhanced with rich asset servicing functionality and
we expect to complete all core product development in Q4 2017.
Outlook - Challenger to Champion
We believe the success of recent years has created an
opportunity for us to move from niche challenger to the champion
and de-facto standard solution in financial markets for data
integrity. The Group's priorities for the next six months include
scaling up the US business, which represents the single largest
global market for our technology with a focus on banking and asset
management. In Europe we believe there is now an opportunity to
more aggressively target the legacy vendor installed base across
all financial industries. In Asia Pacific we will continue to focus
primarily on major account management and carefully selected new
sales opportunities, and we also plan to build further on the bank
to corporate white-label solutions success we have seen in the
region.
Globally we will continue to strengthen our marketing, channels
and alliances operations to build pipeline and awareness, and we
will continue to strengthen our global delivery model to ensure
project wins are successfully implemented and enable us to create
loyal long-term customers and recurring revenue. We will continue
to manage our non-Clareti installed base, and we expect to see a
decline in our software partner fees broadly offset by an increase
in our contracting business.
The Group has made an excellent start to the year, and I am
confident we are building the right foundations to create a
successful global enterprise financial technology champion.
Ian Manocha
Chief Executive Officer
24 July 2017
Consolidated income statement
Notes 6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
-------------------------- ------ ---------------- ---------------- ----------------
Revenue 2 9,774 7,812 17,156
Cost of sales (1,416) (1,455) (2,984)
-------------------------- ------ ---------------- ---------------- ----------------
Gross profit 8,358 6,357 14,172
Adjusted administrative
expenses (6,916) (5,415) (11,488)
-------------------------- ------ ---------------- ---------------- ----------------
Adjusted operating
profit 1,442 942 2,684
-------------------------- ------ ---------------- ---------------- ----------------
Adjusting administrative
items:
Exceptional items 7 (108) (196) (275)
Amortisation on acquired
intangibles (203) - (108)
Share-based payments (119) (81) (117)
-------------------------- ------ ---------------- ---------------- ----------------
(430) (277) (500)
-------------------------- ------ ---------------- ---------------- ----------------
Total administrative
expenses (7,436) (5,692) (11,988)
-------------------------- ------ ---------------- ---------------- ----------------
Statutory operating
profit 1,012 665 2,184
Share of post-tax profit 85 - -
of joint venture
Finance revenue 15 12 22
Finance costs - - -
-------------------------- ------ ---------------- ---------------- ----------------
Profit before taxation 1,112 677 2,206
Taxation 3 378 241 399
-------------------------- ------ ---------------- ---------------- ----------------
Attributable to owners
of the Parent 1,490 918 2,605
-------------------------- ------ ---------------- ---------------- ----------------
Earnings per share
Statutory
Basic earnings per
share - pence 4 2.22 1.45 4.06
Diluted earnings per
share - pence 4 2.15 1.40 3.92
-------------------------- ------ ---------------- ---------------- ----------------
Adjusted
Basic earnings per
share - pence 4 2.86 1.76 4.83
Diluted earnings per
share - pence 4 2.76 1.70 4.67
-------------------------- ------ ---------------- ---------------- ----------------
Consolidated statement of comprehensive income
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 Dec
2017 2016 2016
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
--------------------------------------------- ----------- ----------- ----------
Attributable to the owners of
the Parent 1,490 918 2,605
--------------------------------------------- ----------- ----------- ----------
Other comprehensive (expense)/income
Items that will or may be re-classified
into profit or loss - exchange
differences (12) 71 86
--------------------------------------------- ----------- ----------- ----------
Total other comprehensive (expense)/income (12) 71 86
--------------------------------------------- ----------- ----------- ----------
Total comprehensive income for
the year 1,478 989 2,691
--------------------------------------------- ----------- ----------- ----------
Consolidated statement of financial position
30 June 30 June 31 Dec
2017 2016 2016
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
------------------------------ ----------- ----------- ---------
Assets
Non-current assets
Property, plant and
equipment 585 741 656
Intangible assets 19,844 12,320 18,794
Interest in joint venture 85 - -
Deferred tax assets 1,508 563 1,151
------------------------------- ----------- ----------- ---------
22,022 13,624 20,601
Current assets
Trade and other receivables 3,789 3,584 4,759
Income tax receivable 95 797 2
Other financial assets 600 - -
- bank deposits
Cash and cash equivalents 7,214 3,909 7,206
------------------------------- ----------- ----------- ---------
11,698 8,290 11,967
Total assets 33,720 21,914 32,568
------------------------------- ----------- ----------- ---------
Equity and liabilities
Equity attributable
to owners of the Parent
Called up equity share
capital 3,375 3,177 3,340
Share premium account 3,560 157 3,242
Other reserves 313 313 313
Foreign currency translation
reserve 9 6 21
Retained earnings 15,844 12,512 14,235
Total equity attributable
to owners of the Parent 23,101 16,165 21,151
------------------------------- ----------- ----------- ---------
Non-current liabilities
Deferred income 287 205 267
Provisions 13 97 44
Deferred tax liability 628 - 680
Contingent consideration - - 378
928 302 1,369
------------------------------ ----------- ----------- ---------
Current liabilities
Trade and other payables 8,493 5,413 9,060
Financial liabilities - - 71
Income tax payable - - 139
Provisions 62 34 20
Contingent consideration 1,136 - 758
9,691 5,447 10,048
------------------------------ ----------- ----------- ---------
Total liabilities 10,619 5,749 11,417
------------------------------- ----------- ----------- ---------
Total equity and liabilities 33,720 21,914 32,568
------------------------------- ----------- ----------- ---------
Consolidated statement of changes in equity
Share Share Other Currency Retained Total
capital premium reserves translation earnings
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------- --------- --------- ---------- ------------- ---------- --------
At 1 January
2016 3,164 9 313 (65) 11,513 14,934
Attributable
profit for the
period - - - - 918 918
Other comprehensive
expense - - - 71 - 71
----------------------- --------- --------- ---------- ------------- ---------- --------
Total comprehensive
income - - - 71 918 989
Exercise of share
options 13 148 - - - 161
Share-based payment
expense - - - - 81 81
At 30 June 2016 3,177 157 313 6 12,512 16,165
----------------------- --------- --------- ---------- ------------- ---------- --------
Attributable
profit for the
period - - - - 1,687 1,687
Other comprehensive
income - - - 15 - 15
----------------------- --------- --------- ---------- ------------- ---------- --------
Total comprehensive
income - - - 15 1,687 1,702
Share issue proceeds 158 3,163 - - - 3,321
Share transaction
costs - (101) - - - (101)
Exercise of share
options 5 23 - - - 28
Share-based payment
expense - - - - 36 36
At 31 December
2016 3,340 3,242 313 21 14,235 21,151
----------------------- --------- --------- ---------- ------------- ---------- --------
Attributable
profit for the
period - - - - 1,490 1,490
Other comprehensive
income - - - (12) - (12)
----------------------- --------- --------- ---------- ------------- ---------- --------
Total comprehensive
income - - - (12) 1,490 1,478
Exercise of share
options 35 318 - - - 353
Share-based payment
expense - - - - 119 119
At 30 June 2017 3,375 3,560 313 9 15,844 23,101
----------------------- --------- --------- ---------- ------------- ---------- --------
Consolidated statement of cashflows
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
--------------------------------------- ----------- ----------- -------------
Cashflows from operating activities
Profit after taxation 1,490 918 2,605
Depreciation, amortisation and
impairment 879 577 1,355
Share-based payment expense 119 81 117
Share of post-tax profit from (85) - -
joint venture
Decrease/(increase) in trade
and other receivables 946 30 (737)
(Decrease)/increase in trade
and other payables (404) (1) 2,551
Movement in deferred tax provisions (448) (241) 1
Movement in provisions 11 88 21
Loss on disposal of property,
plant and equipment - 32 32
Net finance income (15) (12) (22)
--------------------------------------- ----------- ----------- -------------
Cash inflow from operations 2,493 1,472 5,923
Net income taxes (paid)/received (273) (82) 216
--------------------------------------- ----------- ----------- -------------
Net cash inflow from operating
activities 2,220 1,390 6,139
Cash flows from investing activities
Interest received 15 12 22
Increase in financial assets-bank (600) - -
deposits
Purchase of property, plant
and equipment (99) (420) (508)
Disposal of property, plant
and equipment - 14 13
Net payments to acquire subsidiary
undertaking - - (3,014)
Payments to acquire intangible
fixed assets (1,752) (2,045) (3,779)
--------------------------------------- ----------- ----------- -------------
Net cash used in investing activities (2,436) (2,439) (7,266)
Cash flows from financing activities
Interest paid - - -
Share issue proceeds 238 158 3,510
Share issue transaction costs - - (101)
--------------------------------------- ----------- ----------- -------------
Net cash generated from financing
activities 238 158 3,409
Net increase/(decrease) in cash
and cash equivalents 22 (891) 2,282
Cash and cash equivalents at
beginning of year 7,206 4,666 4,666
Exchange adjustments (14) 134 258
Cash and cash equivalents at
end of year 7,214 3,909 7,206
--------------------------------------- ----------- ----------- -------------
Notes to the interim report
1. Basis of preparation
Gresham Technologies plc (LSE: "GHT", "Gresham" or the "Company"
or the "Group" or the "Parent") is a limited liability company and
is listed on the London Stock Exchange. The Company's registered
address is Aldermary House, 10 - 15 Queen Street, London, EC4N 1TX
and the Company's registration number is 1072032.
These condensed interim financial statements are unaudited, have
not been reviewed by the Group's auditors, and do not constitute
statutory accounts within the meaning of the Companies Act
2006.
These condensed interim financial statements have been prepared
on a going concern basis and in accordance with IAS 34 'Interim
Financial Reporting', the Disclosure and Transparency Rules and the
Listing Rules of the Financial Conduct Authority, and were approved
on behalf of the Board by the Chief Executive Officer Ian Manocha
and Chief Financial Officer Rob Grubb on 24 July 2017.
The accounting policies and methods of computation applied in
these condensed interim financial statements are consistent with
those applied in the Group's most recent annual financial
statements for the year ended 31 December 2016.
The financial statements for the year ended 31 December 2016,
which were prepared in accordance with International Financial
Reporting Standards, as endorsed by the European Union ('IFRS'),
and with those parts of the Companies Act 2006 applicable to
companies reporting under IFRS, have been delivered to the
Registrar of Companies. The auditors' opinion on those financial
statements was unqualified and did not contain a statement made
under s498(2) or (3) of the Companies Act 2006.
Copies of these condensed interim financial statements and the
Group's most recent annual financial statements are available from
the Group's website www.greshamtech.com or by writing to the
Company Secretary at the Company's registered office.
2. Segmental information
The segmental disclosures reflect the analysis presented on a
monthly basis to the chief operating decision maker of the
business, the Chief Executive and the Board of Directors.
In addition, split of revenues and non-current assets by the UK
and overseas have been included as they are specifically required
by IFRS 8 Operating Segments.
For management purposes, the Group is organised into the
following reportable segments:
-- Clareti Solutions - supply of solutions predominantly to the
finance and banking markets across Asia Pacific, EMEA and North
America. These solutions are described in the Chief Executive
review and include:
-- Clareti Transaction Control (CTC)
-- Clareti Analytics (CA)
-- Clareti-as-a-Service (CaaS)
-- Clareti Accounts Receivable Management (Clareti ARM)
-- Clareti 24 (C24)
-- Clareti Data Accelerator (CDA)
-- Clareti Loan Control (CLC)
-- Other Solutions - supply of a range of well-established
solutions to enterprise-level customers in a variety of end
markets.
Transfer prices between segments are set on an arm's length
basis in a manner similar to transactions with third parties.
Segment revenue, segment expense and segment result include
transfers between business segments. Those transfers are eliminated
on consolidation.
6 months ended 30 June 2017 (unaudited)
Other
------------------------
Adjustments,
central
Clareti Contracting and
Solutions Solutions Services eliminations Consolidated
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- ----------- ---------- ------------ -------------- -------------
Revenue
External customer 4,742 2,769 2,263 - 9,774
Inter-segment - - - - -
----------------------------- ----------- ---------- ------------ -------------- ---------------
Total revenue 4,742 2,769 2,263 - 9,774
----------------------------- ----------- ---------- ------------ -------------- ---------------
- -
Cost of sales (104) (316) (996) - (1,416)
----------------------------- -----------
Gross profit 4,638 2,453 1,267 - 8,358
----------------------------- ----------- ---------- ------------ -------------- ---------------
98% 89% 56% - 86%
Contracting administrative
expenses - - (921) - (921)
Gross profit
after contracting
fully costed 4,638 2,453 346 - 7,437
98% 89% 15% - 76%
Adjusted administrative
expenses - - - (5,995) (5,995)
----------------------------- ----------- ---------- ------------ -------------- ---------------
Adjusted operating
profit 4,638 2,453 346 (5,995) 1,442
Adjusting items:
Exceptional costs (108) (108)
Amortisation
of acquired intangibles (203) (203)
Share-based payments (119) (119)
----------------------------- ----------- ---------- ------------ -------------- ---------------
Adjusting administrative
expenses (430) (430)
Statutory operating
profit (6,425) 1,012
Share of post-tax
profit from joint
venture 85
Interest revenue 15
Interest expense -
----------------------------- -----------
Profit before
taxation 1,112
Taxation 378
----------------------------- ----------- ---------- ------------ -------------- ---------------
Profit after
taxation 1,490
----------------------------- ----------- ---------- ------------ -------------- ---------------
Segment assets 33,720
----------------------------- ----------- ---------- ------------ -------------- ---------------
Segment liabilities (10,619)
----------------------------- ----------- ---------- ------------ -------------- ---------------
6 months ended 30 June 2016 (unaudited)
Other
-------------------------
Adjustments,
Clareti Contracting central
Solutions Solutions Services and eliminations Consolidated
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- ----------- ----------- ------------ ------------------ -------------
Revenue
External customer 3,162 3,427 1,223 - 7,812
Inter-segment - - - - -
---------------------------- ----------- ----------- ------------ ------------------ -------------
Total revenue 3,162 3,427 1,223 - 7,812
----------------------------- ----------- ----------- ------------ ------------------ -------------
Cost of sales (57) (1,095) (303) - (1,455)
Gross profit 3,105 2,332 920 - 6,357
----------------------------- ----------- ----------- ------------ ------------------ -------------
98% 68% 75% - 81%
Contracting administrative
expenses - - (746) - (746)
Gross profit
after contracting
fully costed 3,105 2,332 174 - 5,611
98% 68% 14% - 72%
Adjusted administrative
expenses - - (4,669) (4,669)
----------------------------- ----------- ----------- ------------ ------------------ -------------
Adjusted operating
profit 3,105 2,332 174 (4,669) 942
Adjusting items:
Exceptional costs (196) (196)
Share-based payments (81) (81)
----------------------------- ----------- ----------- ------------ ------------------ -------------
Adjusting administrative
expenses (196) (196)
Statutory operating
profit (4,946) 665
Interest revenue 12
Interest expense -
Profit before
taxation 677
Taxation 241
----------------------------- ----------- ----------- ------------ ------------------ -------------
Profit after
taxation 918
----------------------------- ----------- ----------- ------------ ------------------ -------------
Segment assets 21,914
----------------------------- ----------- ----------- ------------ ------------------ -------------
Segment liabilities (5,749)
----------------------------- ----------- ----------- ------------ ------------------ -------------
3. Taxation
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 Dec
2017 2016 2016
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
-------------------------------------- ----------- ----------- ----------
Current income tax
Overseas tax charge/(credit)
- adjustment to previous years 36 - 22
Overseas tax charge - current
year 6 - 140
UK corporation tax charge -
adjustment to previous years - 83 166
Total current income tax 42 83 328
Deferred income tax
(Recognition)/reversal of deferred
tax asset (454) (356) (863)
Tax rate change adjustments 34 32 136
-------------------------------------- ----------- ----------- ----------
Total deferred income tax (420) (324) (727)
Total credit in the income statement (378) (241) (399)
-------------------------------------- ----------- ----------- ----------
4. Earnings per ordinary share
Basic earnings per share amounts are calculated by dividing net
profit for the period attributable to ordinary equity holders of
the Parent by the weighted average number of ordinary shares
outstanding during the period.
Diluted earnings per share amounts are calculated by dividing
the net profit attributable to ordinary equity holders of the
Parent by the weighted average number of ordinary shares
outstanding during the period plus the weighted average number of
ordinary shares that would be issued on the conversion of all the
dilutive potential ordinary shares into ordinary shares.
The following reflects the earnings and share data used in the
basic and diluted earnings per share computations:
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
---------------------------------- ----------- ----------- --------------
Basic weighted average
number of shares 67,061,216 63,302,746 64,223,010
Dilutive potential ordinary
shares
Employee share options
- weighted 2,379,073 2,133,073 2,198,808
Diluted weighted average
number of shares 69,440,289 65,435,819 66,421,818
----------------------------------- ----------- ----------- --------------
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 Dec
2017 2016 2016
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
-------------------------------------- ----------- ----------- -------------
Adjusted earnings attributable
to owners of the Parent 1,920 1,195 3,105
Adjusting items:
Exceptional items (108) (196) (275)
Amortisation of acquired intangibles (203) - (108)
Share-based payments (119) (81) (117)
Statutory earnings attributable
to owners of the Parent 1,490 918 2,605
--------------------------------------- ----------- ----------- -------------
Earnings per share
Statutory
Basic earnings per share -
pence 2.22 1.45 4.06
Diluted earnings per share
- pence 2.15 1.40 3.92
--------------------------------------- ----------- ----------- -------------
Adjusted
Basic earnings per share -
pence 2.86 1.76 4.83
Diluted earnings per share
- pence 2.76 1.70 4.67
--------------------------------------- ----------- ----------- -------------
There have been no other transactions involving ordinary shares
or potential ordinary shares between the reporting date and the
date of completion of this interim statement.
Exceptional items in the period include GBP76,000 associated
with integration costs from the acquisition of C24 Technologies
Limited and GBP32,000 of non-recurring exceptional professional
fees. Exceptional costs in the prior year related to the closure of
the Group's Denver office and reorganisation costs.
5. Dividends paid and proposed
No dividends were declared or paid during the period or
comparative periods.
6. Principal risks and uncertainties
The principal risks and uncertainties facing the Group are
disclosed in the Group's financial statements for the year ended 31
December 2016, available from www.greshamtech.com and remain
unchanged.
7. Adjusted EBITDA reconciliation
Adjusted EBITDA for the Group's operations is calculated as
EBITDA excluding exceptional charges and share-based payments,
reconciled as follows:
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
------------------------------- ----------- ----------- -------------
Profit before tax 1,112 677 2,206
------------------------------- ----------- ----------- -------------
Adjusting items:
Exceptional items 108 196 275
Amortisation and depreciation 508 409 1,004
Amortisation of acquired 203 - -
intangibles
Depreciation on PPE (exc
Development) 117 118 224
Loss on disposal - - 32
Share-based payments 119 81 117
Interest received (15) (12) (22)
------------------------------- ----------- ----------- -------------
Adjusted EBITDA 2,152 1,469 3,836
------------------------------- ----------- ----------- -------------
8. Statement of directors' responsibilities
The Directors are responsible for preparing the half-yearly
financial report, in accordance with applicable law and
regulations.
The Directors confirm, to the best of their knowledge, that this
condensed set of financial statements:
-- has been prepared in accordance with IAS 34 as adopted by the European Union;
-- includes a fair review of the information required by Rules
4.2.7 and 4.2.8 of the Disclosure and Transparency Rules of the
United Kingdom Financial Conduct Authority (as detailed in the
Chief Executive review); and
-- the principal risks and uncertainties facing the Group for
the period ending 30 June 2017 and anticipated for the remainder of
the year ended 31 December 2017 remain consistent with those
disclosed in the Group's financial statements for the year ended 31
December 2016, which are available from www.greshamtech.com.
9. Related party transactions
No related party transactions have taken place during the first
six months of the year that have materially affected the financial
position or performance of the Company.
There have been no changes in the related party transactions
described in the last annual report that could have a material
effect on the financial position or performance of the Company in
the first six months of the current financial year.
The information communicated in this announcement constitutes
inside information for the purposes of Article 7 of Regulation
596/2014.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR PGUAPMUPMGQC
(END) Dow Jones Newswires
July 25, 2017 02:00 ET (06:00 GMT)
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