TIDMGRA
RNS Number : 4137H
Grafenia plc
24 November 2022
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the UK Market Abuse Regulation. With the publication of this
announcement via a Regulatory Information Service, this inside
information is now considered to be in the public domain.
24 November 2022
Grafenia plc
("Grafenia", "the Group" or "the Company")
Unaudited Interim Results for the period ended 30 September
2022
Financial highlights
Six months
to Six months to
30 September 30 September
2022 2021
Continuing operations
Turnover GBP4.97m GBP4.39m
EBITDA* GBP(0.05)m GBP0.27m
Operating Loss GBP(0.49)m GBP(0.23)m
Loss Before Tax GBP(0.54)m GBP(0.39)m
Tax GBP0.05m GBP0.15m
Total Comprehensive Loss GBP(0.48)m GBP(0.24)m
EPS (0.42)p (0.21)p
Development Expenditure GBP0.18m GBP0.31m
Cash and Cash Equivalents GBP5.01m GBP2.67m
Net Debt GBP(3.28)m GBP(4.49)m
*Earnings before interest, tax, depreciation and
amortisation
Operational highlights
-- Completed the sale and separation of Works Manchester
-- Revenue from continuing operations up by GBP0.58m, a 13% increase
-- Licence fees and subscriptions up by GBP0.04m, a 4% increase
-- Partner product spend saw 31% increase, up by GBP0.36m
-- Revenue from online and trade up by GBP0.25m, a 27% increase
-- Investment in Software Circle - our acquisition strategy, is bearing fruit
-- Raised GBP4.25m through additional bond issue to fund acquisitions
Interim Statement
Our team has spent the past six months laying the foundations
for the next part of our journey. In our Annual Report, we
discussed the ongoing transition of our business and the sale of
our manufacturing hub Works Manchester, announced on 19 May 2022.
Our teams have worked hard to ensure that transition has been
smooth. We'd like to thank everyone involved for successfully
managing the process. Simplifying our business and completing the
transition to one focussed on software and systems.
Previously we divided our reporting structure into two business
units: everything software and licence (we call this business unit
Nettl Systems); and everything production (we called that Works
Manchester). Given the sale of Works Manchester on 31 May 2022,
you'll see below that we are reporting results from "continuing"
and "discontinued" operations, as we did in our full year results
released in July. In plain English, "continuing" are the figures
for the period as if we had sold Works Manchester at the beginning
of the comparative periods. "Discontinued" is everything else.
Trading Results and Cash
Revenue from continuing operations rose to GBP4.97m (2021:
GBP4.39m). Total revenue reduced to GBP5.84m (2021: GBP6.31m)
following the disposal of Works Manchester at the end of May 2022,
meaning discontinued operations only contributed revenue of
GBP0.87m (2021: GBP1.92m).
Total gross profit fell to GBP2.66m (2021: GBP3.44m), again as a
result of the sale of Works Manchester. Our overall Gross margin
percentage fell to 45.5% (2021: 54.5%) as, following the sale,
Works Manchester became our largest Works Maker and we entered into
a five-year supply agreement to provide products through our
platforms for our Company stores and Partners. This change reduces
the gross profit percentage of the Group, but at the same time
reduces staff costs and overheads. To accurately reflect the
performance of continuing operations, the financials have been
presented to show the results had the disposal and new supply
agreement been in effect for both the current and the comparative
financial years. Gross Profit from continuing operations was
GBP2.02m (2021: GBP1.83m). It fell slightly as a percentage of
revenue, 40.6% (2021: 41.7%), as a greater proportion of revenue
has been generated through our brand partners in the first six
months of this financial year compared to last.
Total operating costs reduced in total following the Sale of
Works Manchester, with total staff costs of GBP1.60m (2021:
GBP1.91m) and total other operating charges of GBP1.00m (2021:
GBP1.04m). Our continuing operations have however experienced
increases. Covid related employee wage support schemes ended, and
we invested in both people and professional fees in our pursuit of
additional software companies to bring into the Grafenia group.
Alongside this, as with most other businesses, we experienced
inflationary pressures, particularly on wages with higher costs of
living, and a higher rate of national insurance. As a result, staff
costs for continuing operations increased to GBP1.18m (2021:
GBP0.84m) and other operating charges increased to GBP0.85m (2021:
GBP0.64m). This led to EBITDA from continuing operations falling to
a loss of GBP0.05m (2021: profit GBP0.27m) and an operating loss
from continuing operations of 0.49m (2021: loss of GBP0.23m). With
the sale of Works Manchester, the overall operating loss reduced to
GBP0.44m (2021: 0.53m).
At 30 September 2022, the Company had cash of GBP5.01m (2021:
GBP2.67m) and debt of GBP8.29m (2021: GBP7.16m). An additional
GBP4.25m of cash was raised from a bond issue on 27 September 2022
to fund the acquisition of Vertical Plus Limited in October 2022,
along with further acquisitions that are expected to be announced
in the near future. Our operating activities utilised GBP0.29m of
cash (2021: generated GBP0.43m) as we transitioned to our new
operating model.
Capital expenditure was GBP0.18m (2021: GBP0.34m). Almost all of
this amount was invested in the ongoing development of our platform
which underpins our operations and is licensed to our partners.
Trading Review
We've improved the revenue performance of Nettl Systems. Our
investment in Software Circle is beginning to bear fruit and we
continue to make progress building the best operating model for our
new focus.
Nettl Systems
Our Nettl Systems business operates within the Graphics sector.
Licencing software and brands to graphic professionals. Designers,
printers, signmakers, marketing agencies and other graphic
professionals use our marketing tools, workflow management system
and supply chain to deliver the best service to their clients. We
also own five Nettl company stores in Birmingham, Dublin, Exeter,
Liverpool and Manchester all utilising our software platform. We
use these to train new people, refine new software initiatives and
develop best practice.
We have hundreds of partners who utilise this best practice and
licence our systems. Partners pay us a monthly subscription which
gives them access to our systems, training and support. Using the
Nettl system, they're able to buy factory-direct print and display
that is seamlessly integrated from multiple suppliers. We call them
Works Makers. Partners resell these products to clients.
Increasingly, partners are also reselling recurring
subscriptions for centralised digital marketing services like SEO,
Social Media and Paid Search. We expect to extend these centralised
service offerings to help partners increase the recurring revenues
they generate.
An example of this is the launch of SEO Console. A platform for
clients available through the Nettl system, to help get found in
online searches. Clients have access to a portal that enables them
to optimise their website and manage listings and reviews. Working
alongside our current SEO service offering, our partners can resell
SEO Console as recurring subscriptions to their clients.
Partners that use the Nettl or printing.com brand in conjunction
with their own, we call 'brand partners'. They're our exclusive
partner in their neighbourhood. We licence printing.com and Nettl
directly in the UK and Ireland. We also licence Nettl in Belgium,
France, the Netherlands and in the USA. In Australia and New
Zealand, we have a master licence agreement.
In the interim period, revenue from Nettl Systems increased by
13% to GBP4.97m (2021: GBP4.39m). Within this segment, company
stores decreased by 5% to GBP1.18m (2021: GBP1.24m). This decrease
was due to team transitions in two store locations. Licence fee and
subscription income increased to GBP1.07m (2021: GBP1.04m). We
continue to listen to feedback from our partners and extend the
capabilities of our platform. This has helped us improve partner
retention rates during the period. Most recently we've improved
enquiry management with 'The Pipeline' and made it easier for
partners to build proposals, estimates, jobs and orders using their
own Standard Price List items. We're currently working on improving
the User Interface of key order screens. Our aim is to equip our
partners with the tools they'll need in the studio of tomorrow.
Along with the successful transition of Works Manchester to new
owners PFI, we've continued to add new Works Makers to widen the
product range available to our partners. The products our partners
buy from us at wholesale prices - like signage, printing and promo
goods - has increased by 31% to GBP1.53m (2021: GBP1.17m).
We also sell print and signs to professional buyers through
Marqetspace and a few other online channels. We utilise our w3shop
software module, available as part of the Nettl System. It is a
fertile ground for cultivating Nettl partners and gives us insight
into where gaps in our product range are. That knowledge has been
used to find new Works Makers to improve the product range
available throughout our software systems. We continue to see an
increase in Marqetspace revenues to GBP1.19m (2021: GBP0.94m)
Software Circle
With our renewed focus on Software & Systems, as detailed in
our Annual Report, our acquisition strategy is now aimed at
software businesses. To extend our scale, capability and
resilience. We have continued to invest in building the structure
required for us to be a serial acquirer and permanent home for
software businesses and management talent.
Our team of analysts and searchers actively look for software
businesses that match our criteria, for us to acquire and become
part of the Group. We've made progress in building a scalable,
acquisition flywheel.
We're particularly interested in Vertical Market Software (VMS)
businesses. Niche, mission critical platforms, where revenues are
recurring in nature. The kind of software that is the glue holding
a business together. Keeping clients using it, year after year.
Perhaps where the owner is thinking about retirement planning or a
change of pace. Often looking for a commercial partner to take care
of their IP, team and client base for the long term. We're an ideal
permanent home. Providing continuity of support and helping
maintain relationships.
We'll retain their brands but we're not planning to integrate or
migrate them to our platform. They'll keep their technology stack
and be run in a decentralised way.
The investment in our Software Circle team and progressing
ongoing potential deals, has impacted the EBITDA for this period.
However, that investment is starting to bear fruit with the
acquisition of Vertical Plus Ltd detailed in our announcement on 22
September 2022. Having raised funds for other acquisitions in the
pipeline, detailed in our update of 27 September 2022 we're hopeful
of adding other businesses to the Group. We will provide further
updates as things come to fruition.
If you own a vertical market software business or get talking
with someone who does, please hop to www.grafenia.com/acquisition
or email letmein@grafenia.com .
Outlook
Trading continues to outperform the same period last year.
November looks set to continue that trend. It is difficult to
foresee how business confidence will be impacted by the economic
climate. However, sales are in line with current internal
forecasts.
Our attention is focussed on building our recurring revenue
streams. That's by a mix of buying and successfully running
software companies through Software Circle. And by building tools
to licence to professionals in the graphic arts, print and sign
sectors with Nettl Systems.
In the last few announcements, we've discussed our goal of
achieving 10-15% EBITDA. With reducing the size of the group in May
2022 following the disposal of Works Manchester, whilst retaining
the central costs of operating a publicly listed business and
investing in our acquisition strategy, these levels of return have
not yet been possible. However, given our improved trading to date,
alongside the acquisition of Vertical Plus, and other acquisitions
expected to follow, we firmly believe that this goal remains
achievable in the mid-term.
Jan Mohr Gavin Cockerill
Chairman Acting Chief Executive Officer
23 November 2022
Unaudited Interim Results for the period ended 30 September 20
22
Consolidated Statement of Comprehensive Income
for the six months ended 30 September 202 2
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Audited Audited Audited
Six months Six months Six Six months Six months Six Year ended Year ended Year ended
to 30 to 30 months to 30 to 30 months 31 March 31 March 31 March
September September to 30 September September to 30 202 2 2022 2022
2022 2022 September 2021 2021 September
Note 2022 2021
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Continuing Discontinued Total Continuing Discontinued Total Continuing Discontinued Total
operation operation operation operation operation operation
--------------- ---- ---------- ------------ --------- ---------- ------------ --------- ---------- ------------ ----------
Revenu e 3 4,969 870 5,839 4,386 1,921 6,307 8,916 3,445 12,361
Raw materials
and
consumables
used (2,946) (235) (3,181) (2,555) (317) (2,872) (5,377) (286) (5,663)
Gross profit 2,023 635 2,658 1,831 1,604 3,435 3,539 3,159 6,698
--------------- ---- ---------- ------------ --------- ---------- ------------ --------- ---------- ------------ ----------
Staff costs (1,179) (417) (1,596) (838) (1,075) (1,913) (2,019) (2,221) (4,240)
Doubtful debt
expense (49) (10) (59) (90) (2) (92) (32) (11) (43)
Other operating
charges (848) (155) (1,003) (636) (402) (1,038) (1,322) (763) (2,085)
Earnings before
interest,
tax
depreciation
and
amortisation (53) 53 - 267 125 392 166 164 330
--------------- ---- ---------- ------------ --------- ---------- ------------ --------- ---------- ------------ ----------
Depreciation
and
amortisation (440) - (440) (495) (429) (924) (944) (569) (1,513)
Operating loss (493) 53 (440) (228) (304) (532) (778) (405) (1,183)
--------------- ---- ---------- ------------ --------- ---------- ------------ --------- ---------- ------------ ----------
Financial
income 54 - 54 5 - 5 6 - 6
Financial
expenses (96) (21) (117) (164) (92) (256) (346) (186) (532)
Net financing
expense (42) (21) (63) (159) (92) (251) (340) (186) (526)
Loss before tax (535) 32 (503) (387) (396) (783) (1,118) (591) (1,709)
--------------- ---- ---------- ------------ --------- ---------- ------------ --------- ---------- ------------ ----------
Taxation 51 - 51 150 - 150 559 - 559
--------------- ---- ---------- ------------ --------- ---------- ------------ --------- ---------- ------------ ----------
Loss for the
period (484) 32 (452) (237) (396) (633) (559) (591) (1,150)
--------------- ---- ---------- ------------ --------- ---------- ------------ --------- ---------- ------------ ----------
Re-measurement
to fair value
on
discontinued
operations 12 - (235) (235) - - - - (686) (686)
--------------- ---- ---------- ------------ --------- ---------- ------------ --------- ---------- ------------ ----------
Total
comprehensive
loss
for the period (484) (203) (687) (237) (396) (633) (559) (1,277) (1,836)
--------------- ---- ---------- ------------ --------- ---------- ------------ --------- ---------- ------------ ----------
Earnings per
share 7 (0.42)p (0.18)p (0.60)p (0.21)p (0.34)p (0.55)p (0.49)p (1.12)p (1.60)p
--------------- ---- ---------- ------------ --------- ---------- ------------ --------- ---------- ------------ ----------
Consolidated Statement of Financial Position
at 30 September 202 2
Unaudited Unaudited Audited
Note 30 September 30 September 31 March
2022 2021 2022
GBP000 GBP000 GBP000
Non-current assets
Property, plant and equipment 972 4,705 1,077
Intangible assets 1,233 3,282 1,391
Deferred consideration
receivable 8 1,804 -
Total non-current assets 4,009 7,987 2,468
--------------------------------- ------ -------------- -------------- ---------
Current assets
Inventories 26 434 29
Trade and other receivables 4 1,329 2,426 1,281
Deferred consideration
receivable 8 618 - -
Prepayments 106 320 283
Cash and cash equivalents 5,008 2,669 1,462
Assets relating to disposal
group 12 - - 6,234
--------------------------------- ------ -------------- -------------- ---------
Total current assets 7,087 5,849 9,289
--------------------------------- ------ -------------- -------------- ---------
Total assets 11,096 13,836 1 1,757
--------------------------------- ------ -------------- -------------- ---------
Current liabilities
Other interest-bearing
loans and borrowings 6 386 1,345 308
Trade and other payables 5 1,012 2,708 1,512
Deferred income 5 - 24 77
Liabilities relating to
disposal group 12 - - 3,530
Total current liabilities 1,398 4,077 5,427
--------------------------------- ------ -------------- -------------- ---------
Non-current liabilities
Other interest-bearing
loans and borrowings 6 7,900 5,811 3,842
Deferred tax liabilities - 323 -
--------------------------------- ------ -------------- -------------- ---------
Total non-current liabilities 7,900 6,134 3,842
--------------------------------- ------ -------------- -------------- ---------
Total liabilities 9,298 10,211 9,269
--------------------------------- ------ -------------- -------------- ---------
Net assets 1,798 3,625 2,488
--------------------------------- ------ -------------- -------------- ---------
Equity
Share capital 1,145 1,145 1, 145
Share premium account 7,866 7,866 7, 866
Merger reserve 838 838 83 8
Retained earnings (8,202) (6,312) ( 7,515)
Translation reserve 63 - 66
Share based payment reserve 88 88 88
Total equity 1,798 3,625 2,488
--------------------------------- ------ -------------- -------------- ---------
Consolidated Statement of Changes in Shareholders Equity
for the six months ended 30 September 202 2 (unaudited)
Share Share Merger Retained Share Translation
Capital Premium Reserve earnings based reserve Total
payment
reserve
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Opening shareholders'
funds at 1 April 2021 1,145 7,866 838 (5,679) 84 - 4,254
Loss and total comprehensive
income for the period
from continuing operation - - - (237) - - (237)
Loss and total comprehensive
income for the period
from discontinued operation - - - (396) - - (396)
Share option reserve - - - - 4 - 4
Closing shareholders'
funds at 30 September
2021 1,145 7,866 838 (6,312) 88 - 3,625
--------------------------------- -------- -------- -------- --------- -------- ----------- -------
Loss and total comprehensive
income for the period
from continuing operation - - - (322) - - (322)
Loss and total comprehensive
income for the period
from discontinued operation - - - (881) - - (881)
Retranslation of net
assets of overseas subsidiaries - - - - - 66 66
Closing shareholders'
funds at 31 March 2022 1,145 7,866 838 (7,515) 88 66 2,488
--------------------------------- -------- -------- -------- --------- -------- ----------- -------
Loss and total comprehensive
income for the period
from continuing operation - - - (484) - - (484)
Loss and total comprehensive
income for the period
from discontinued operation - - - (203) - - (203)
Retranslation of net
assets of overseas subsidiaries - - - - - (3) (3)
Closing shareholders'
funds at 30 September
2022 1,145 7,866 838 (8,202) 88 63 1,798
--------------------------------- -------- -------- -------- --------- -------- ----------- -------
Consolidated Statement of Cash Flows
for the six months ended 30 September 202 2
Unaudited Unaudited Audited
Half Half year Full year
year 2021 202 2
202 2
GBP000 GBP000 GBP000
Cash flows from operating activities
Loss for the period ( 484) (237) ( 559)
Adjustments for:
Depreciation, amortisation and impairment 440 495 944
Release of deferred profit on sale of plant and
equipment - (5) (9)
Share based payments - 4 4
Net finance expense 42 159 340
Bad debt expense 49 90 (54)
Foreign exchange loss - - 66
Tax income ( 51) (150) ( 559)
Operating cash flow before changes in working
capital and provisions (4) 356 173
-------------------------------------------------------- --------- --------- ---------
Change in trade and other receivables 149 (778) (86)
Change in inventories 3 - 2
Change in trade and other payables (519) 441 184
Cash (utilised) / generated by operations (371) 19 273
-------------------------------------------------------- --------- --------- ---------
Interest received 2 5 -
Tax (paid)/received (21) - -
Net cash (outflow) / inflow from operating activities
from continuing operation (390) 24 273
-------------------------------------------------------- --------- --------- ---------
Net cash inflow / (outflow) from operating activities
from discontinued operation 104 403 (139)
-------------------------------------------------------- --------- --------- ---------
Net cash (outflow) / inflow from operating activities (286) 427 134
-------------------------------------------------------- --------- --------- ---------
Cash flows from investing activities
Proceeds from sale of subsidiary 100 - -
Acquisition of plant and equipment ( 2) (19) ( 27)
Capitalised development expenditure ( 175) (307) ( 525)
Acquisition of other intangible assets - (8) ( 20)
Net cash used in investing activities from continuing
operation ( 77) (334) ( 572)
-------------------------------------------------------- --------- --------- ---------
Net cash used in investing activities from discontinued
operation - (2) (3)
-------------------------------------------------------- --------- --------- ---------
Net cash used in investing activities (77) (336) (575)
-------------------------------------------------------- --------- --------- ---------
Cash flows from financing activities
Proceeds from loans 4,250 - -
Repayment of loans ( 150) (79) (196)
Capital payment of lease liabilities ( 56) (58) ( 115)
Interest payment of lease liabilities ( 31) (36) ( 67)
Net cash inflow / (outflow) from financing activities
from continuing operation 4,013 (173) (378)
-------------------------------------------------------- --------- --------- ---------
Net cash inflow / (outflow) from financing activities
from discontinued operation (95) 11 (330)
-------------------------------------------------------- --------- --------- ---------
Net cash inflow / (outflow) from financing activities 3,918 (162) (708)
-------------------------------------------------------- --------- --------- ---------
Net (decrease) / increase in cash and cash equivalents
from continuing operations 3,546 (483) (677)
Exchange difference on cash and cash equivalents (9) - -
Net (decrease) / increase in cash and cash equivalents
from discontinued operations 9 412 (472)
Cash and cash equivalents at start of perio d 1,462 2,740 2,740
Cash and cash equivalents at end of period 5,008 2,669 1,591
-------------------------------------------------------- --------- --------- ---------
Comprises of:
Cash and cash equivalents from continuing
operation 5,008 2,483 1,462
Cash and cash equivalents from discontinued
operation - 186 129
-------------------------------------------- ----- ----- -----
Notes
(forming part of the interim financial statements)
1 Basis of preparation
Grafenia plc (the "Company") is a company incorporated and
domiciled in the UK.
These financial statements do not include all information
required for full annual financial statements and should be read in
conjunction with the financial statements of the Company as at and
for the year ended 31 March 2022. Those accounts have been reported
on by the Company's auditors and delivered to the Registrar of
Companies. The report of the auditors was: (i) unqualified; (ii)
did not include a reference to any matters to which the auditors
drew attention by way of emphasis without qualifying their report;
and (iii) did not contain a statement under section 498 (2) or (3)
of the Companies Act 2006.
These interim financial statements are prepared on the same
basis as the financial statements for the year ended 31 March 2022,
in which our full set of accounting policies, including critical
judgements and key sources of estimation uncertainty, can be
found.
The Directors review a two-year forecast when approving the
interim financial statements to ensure that adequate cash resources
are in operational existence to support trading for the foreseeable
future.
These condensed consolidated interim financial statements were
approved by the Board of Directors on 23 November 2022.
2 Significant accounting policies
The accounting policies applied by the Company in these
condensed consolidated interim financial statements are the same as
those applied by the Company in its consolidated financial
statements for the year ended 31 March 2022.
3 Segmental information
The Company's primary operating segments are geographic being UK
& Ireland, Europe and others. The secondary segmental analysis
is by nature of sales channel and service.
This disclosure correlates with the information which is
presented to the Acting Chief Executive (CEO), the Chief Operating
Decision Maker pursuant to IFRS 8, who reviews revenue (which is
considered to be the primary growth indicator) by segment. The
Company's costs, finance income, tax charges, non-current
liabilities, net assets and capital expenditure are only reviewed
by the CEO at a consolidated level and therefore have not been
allocated between segments.
Analysis by location of sales
UK &
Ireland Europe Other Total
GBP000 GBP000 GBP000 GBP000
Six months ended 30 September
2022 5,653 103 83 5,839
------------------------------- ----------- ----------- ---------- ----------
Six months ended 30 September
2021 5,987 123 197 6,307
------------------------------- ----------- ----------- ---------- ----------
Year ended 31 March 2022 11,723 289 349 12,361
------------------------------- ----------- ----------- ---------- ----------
Revenue generated outside the UK is attributable to partners in
Belgium, France, Ireland, New Zealand, The Netherlands and the USA.
No single customer provided the Group with over 10% of its
revenue.
DISAGGREGATION OF REVENUE
The disaggregation of revenue from contracts with customers is
as follows:
Continuing Operations Discontinued Total
Operation
Licence Company Brand Online
Fees Stores Partner & Trade Works
Print Sign Businesses
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Six months
ended 30 September
2022 1,074 1,177 1,531 1,187 4,969 870 5,839
--------------------- -------- -------- --------- --------- -------- ------------------ --------
Six months
ended 30 September
2021 1,036 1,242 1,171 937 4,386 1,921 6,307
--------------------- -------- -------- --------- --------- -------- ------------------ --------
Year ended
31 March 2022 2,135 2,462 2,439 1,880 8,916 3,445 12,361
--------------------- -------- -------- --------- --------- -------- ------------------ --------
4 Trade and other receivables
Unaudited Unaudited Audited
Half year Half year Full year
202 2 20 21 202 2
GBP000 GBP000 GBP000
Trade receivables 2,181 3,229 3,290
Less provision for trade receivables (1,031) (1,122) (1,089)
----------------------------------------- --------- --------- ---------
Trade receivables net 1,150 2,107 2,201
----------------------------------------- --------- --------- ---------
Total financial assets other than
cash and cash equivalents classified
at amortised cost 1,150 2,107 2,201
----------------------------------------- --------- --------- ---------
Corporation tax 72 247 167
Other receivables 107 72 70
----------------------------------------- --------- --------- ---------
Total Other receivables 179 319 237
----------------------------------------- --------- --------- ---------
Total trade and other receivables 1,329 2,426 2,438
----------------------------------------- --------- --------- ---------
Total relating to discontinued operation - 1,155 1,157
Total relating to continuing operation 1,329 1,271 1,281
----------------------------------------- --------- --------- ---------
5 Trade and other payables
Unaudited Unaudited Audited
Half year Half year Full year
Current liabilities 2022 2021 2022
GBP000 GBP000 GBP000
Trade payables 686 1,382 1,445
Accruals 183 443 373
Other liabilities 143 883 529
-------------------------------- ---------- ---------- ----------
Total financial liabilities,
excluding 'non-current' loans
and borrowings classified
as financial liabilities
measured at amortised cost 1,012 2,708 2,347
-------------------------------- ---------- ---------- ----------
Total relating to discontinued
operation - 844 835
Total relating to continuing
operation 1,012 1,864 1,512
-------------------------------- ---------- ---------- ----------
Deferred Income - 24 77
-------------------------------- ---------- ---------- ----------
Total relating to discontinued - - -
operation
Total relating to continuing
operation - 24 77
-------------------------------- ---------- ---------- ----------
Total trade and other payables 1,012 2,732 2,424
-------------------------------- ---------- ---------- ----------
6 Borrowings
Unaudited Unaudited Audited
Half year Half year Full year
Current liabilities 202 2 202 1 202 2
GBP000 GBP000 GBP000
Invoice financing - 509 512
Lease liabilities 116 673 683
Loans 270 163 172
386 1,345 1,367
------------------------------- ---------- ---------- -------------------------------
Total relating to discontinued
operation - 1,073 1,059
Total relating to continuing
operation 386 272 308
-------------------------------- ---------- ---------- -------------------------------
Non-current liabilities
Lease liabilities 830 2,851 2,517
Loans 465 771 683
Bearer bonds 6,605 2,189 2,270
-------------------------------- ---------- ---------- -------------------------------
7,900 5,811 5,470
------------------------------- ---------- ---------- -------------------------------
Total relating to discontinued
operation - 1,905 1,628
Total relating to continuing
operation 7,900 3,906 3,842
-------------------------------- ---------- ---------- -------------------------------
On 27 September 2022 the Company issued further bonds via the
perpetual bond facility put in place in July 2020. The Company
issued GBP5.00m of the Bonds, at nominal value, to investors,
raising GBP4.25m before expenses.
7 Earnings per share
The calculations of earnings per share are based on the
following profits and numbers of shares:
Unaudited Unaudited Audited
Six months Six months Year ended
to 30 September to 30 September 31 March
202 2 202 1 202 2
GBP000 GBP000 GBP000
Loss for the period from continuing
operations (484) (237) (559)
Profit for the period from discontinued
operations (203) (396) (1,277)
---------------- ---------------- -----------
Total loss after taxation for the
financial year (687) (633) (1,836)
Weighted average number of shares
in issue 114,490,828 114,490,828 114,490,828
------------------------------------------- ---------------- ---------------- -----------
Basic earnings per share (0.60)p (0.55)p (1.60)p
------------------------------------------- ---------------- ---------------- -----------
Basic earnings per share from continuing
operation (0.42)p (0.21)p (0.49)p
Basic earnings per share from discontinued
operation (0.18)p (0.34)p (1.12)p
------------------------------------------- ---------------- ---------------- -----------
Share options had no dilutive effect on the weighted average
number of shares and therefore no diluted earnings per share have
been stated.
8 Deferred consideration receivable
Unaudited Unaudited Audited
Half year Half year Full year
2022 2021 2022
GBP000 GBP000 GBP000
Receivable within one year 618 - -
Receivable after one year 1,804 -
Total deferred consideration
receivable 2,422 - -
------------------------------ ---------- ---------- ------------
The total discounted cash consideration still to be received for
disposal of the manufacturing operation based in Manchester
referred to as 'Works Manchester' is GBP2.42m (GBP2.81m gross
consideration).
9 Dividend
The Directors are not declaring an Interim Dividend (2021:
Nil).
10 Post Balance Sheet Events
On 1 October 2022 the Company completed the acquisition of
Vertical Plus Limited, an ecommerce software business, for total
consideration rising to GBP2.88m. The acquisition is expected to be
cash flow generative and earnings enhancing in the first year after
acquisition.
11 Related Party Transactions
As part of the Bond issue on 27 September 2022, Mediqon Group
AG, where our Chairman, Jan-Hendrik Mohr, is CEO, were issued
GBP4.2m nominal nominal value of the bonds, at the same discount
rate as other participants.
12 Discontinued operation
On 31 May 2022, the group sold its manufacturing operation based
in Manchester. The manufacturing operation, referred to as 'Works
Manchester' consists of the legal entity, Works Manchester Limited,
along with the Manchester based production assets, related leases
and staff contracts of Grafenia Operations Limited. Accordingly,
these assets and liabilities have been designated as held for sale
and separately disclosed in the statement of financial position and
the financial impact of the discontinued operation is separately
disclosed in the Statement of comprehensive income.
Following the disposal, Grafenia entered into a five-year supply
agreement with Works Manchester Limited to provide products to our
Company stores and Partners. This change reduces the gross profit
percentage of the group, but at the same time reduces staff costs
and overheads. To accurately reflect the performance of continuing
operations, the Statement of comprehensive income has been
presented to show the results had the disposal and new supply
agreement been in effect for both the current and the comparative
financial years.
Following preparation of the Completion Accounts, the total
discounted cash consideration to be received was reduced from
GBP2.70m (GBP3.16m gross consideration) to GBP2.47m (GBP2.91m gross
consideration), with the final instalment due in May 2026. The
GBP0.23m impairment has been recognised within discontinued
operations in the current period.
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END
IR PPGMCGUPPGMW
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November 24, 2022 02:00 ET (07:00 GMT)
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