TIDMGRC
RNS Number : 3671X
GRC International Group PLC
20 December 2023
20 December 2023
GRC International Group Plc
("GRC" or the "Group")
Interim results for the period ended 30 September 2023
Continued revenue growth and EBITDA positivity
Improved revenue quality with substantial ARR growth
GRC International Group PLC (AIM: GRC), an integrated cyber
security and privacy solutions business, announces its unaudited
interim results for the six months ended 30 September 2023.
Financial highlights
-- Revenue up 4% to GBP7.6m (H1 FY23: GBP7.3m.
-- Qualifications revenue up 24% to GBP1.5m (H1 FY23: GBP1.2m).
-- GDPR Compliance revenue up 11% to GBP746k (H1 FY23: GBP671k).
-- Professional services revenue up 6% to GBP4.8m (H1 FY23: GBP4.5m).
-- Web revenue up 5% to GBP4.9m (H1 FY23: GBP4.6m).
-- ARR (Annualised Recurring Revenue) at period end up 36% to GBP11.0m (H1 FY23: 8.2m).
-- Recurring and contracted revenue up 8% to GBP5.5m (H1 FY23: GBP5.1m).
-- 72% (H1 FY23: 71%) of revenue generated from recurring and contracted revenue contracts.
-- Gross margin of 61% (H1 FY23: 60%) - continued improvement
reflects operational gearing from subscription services and
internal efficiencies from automation projects.
-- Adjusted EBITDA 1 of GBP0.2m (H1 FY23: GBP0.4m).
-- Loss before tax of GBP0.9m (H1 FY23: GBP0.5m) driven by
amortisation from the investment in capital expenditure to fuel
future growth of GBP0.9m (H1 FY23: GBP1.0m).
-- Cash balances at period end of GBP0.0m (H1 FY23: GBP0.2m).
Facility headroom circa GBP0.4m (H1 FY23: GBP0.4m). Borrowings
(excluding lease obligations) of GBP1.5m (H1 FY23 GBP0.8m).
Operational highlights
-- Increased CyberComply ARR by 40% to GBP528k (H1 FY23: GBP378k).
-- ITG EU billings 2 up 20% to GBP410k (H1 FY23: GBP341k).
-- Improved training value for money: training delegate numbers
up 4% to 876 (H1 FY23: 839) and average delegate revenue up by 20%
to GBP1.7k (H1 FY23: GBP1.4k).
-- Increased investment in overhead improved the quality and
efficiency of customer delivery, leading to a further increase in
Group NPS (net promoter score) to 58 (H1 FY23: 54). Scores over 50
indicate customer service rating of 'Excellent'.
Outlook
-- Continued investment in the CyberComply platform and our product suite.
-- The Board expects that these investments will support an
acceleration in revenue growth through Q3 and for compliance
pressures to drive a very strong Q4. However, full year results
will inevitably depend on Q4 expectations being realised.
-- The Group's trading performance is historically H2 weighted,
and the Board expects to see that patten continue in the current
year.
-- The Board remains confident that the Company will meet market
expectations for the full year to 31 March 2024*.
*GRC believes that current consensus market expectations for the
year ending 31 March 2024 prior to the publication of this
announcement are revenues of GBP17.0 million and adjusted EBITDA of
GBP1.1 million.
1 EBITDA is defined within the Financial Review of this
announcement.
2 Billings equate to the total value (net of VAT) of invoices
raised and cash sales through the Group's websites. Billings is
considered by the Board to be a key metric for managing the
business due to billings' direct relationship with cashflow. Cash
receipts are driven by billings achieved each month rather than
revenue recognised in accordance with IFRS.
Alan Calder, Chief Executive Officer, said:
"We continued in H1 FY24 to grow overall revenue, generate
positive EBITDA, improve our customer quality scores, generate
substantial Intellectual Property, and develop our longer-term
delivery capabilities. We expect the development work done in H1 to
accelerate revenue growth through H2 and as such, the Board is
confident that the Company will meet market expectations for the
full year to 31 March 2024.
CyberComply, our cyber security and compliance platform, is at
the heart of our long-term strategy for growth. We made substantial
progress, during H1, both in functionality improvements and in
revenue, with CyberComply-specific ARR up 40% HY on HY.
Although economic and geo-political headwinds persist, we expect
their effects to continue being counter-balanced by the impact on
GRC of the requirements of a rapidly increasing cyber and privacy
regulation and enforcement (such as GDPR, DORA and SEC Regulations)
in the UK, the EU, the US and elsewhere."
Enquiries:
GRC International Group plc +44 (0) 330 999 0222
Alan Calder, Chief Executive Officer
Christopher Hartshorne, Finance Director
Singer Capital Markets (Nominated Adviser and Joint Broker) +44
(0)20 7496 3000
Phil Davies, James Fischer
Dowgate Capital Limited (Joint Broker) +44 (0) 20 3903 7715
James Serjeant, Russell Cook, Nicholas Chambers
About GRC International Group PLC ("GRC" or "the Group")
GRC is an international governance, risk management and
compliance company whose main business is cyber
defence-in-depth.
A technology business, its proprietary premier brands including
the market leader, IT Governance, offer 'Our expertise, your peace
of mind' for GRC's wide range of domestic and international
corporate customers across all industrial sectors.
GRC's three operating divisions - Software as a Service (SaaS),
E-Commerce and Services - offer a wide range of products and
services encompassing: IT governance, risk management, compliance
with data protection and cyber security regulations, online and
in-person training and staff awareness, consultancy, online
publishing and distribution, as well as software. The Group's
capabilities also include products and services to enable
corporates to address wider governance issues, such as money
laundering and bribery.
In addition to its UK business, GRC has operations in the EU, US
and Asia-Pacific regions.
Chief Executive Review
Overview
GRC continues this year to make progress in its transformation
from a services business to one that is centred around a
comprehensive cyber security and privacy compliance SaaS platform,
CyberComply.
40% growth v H1 FY23in CyberComply-specific ARR demonstrates
that our customers buy-in to our vision of how best to manage cyber
security compliance in today's increasingly complex regulatory
environment. Encouragingly, in spite of geo-political and economic
headwinds, we continued to generate positive EBITDA as well as
overall revenue growth. We had a marginal improvement in gross
margin % as well as another improvement in our NPS service quality
results. Most importantly, our focus on quality of earnings shows
in the significant 36% increase in our overall ARR v H1 FYH23.
Strategy
Our strategy and the drivers for growth remain unchanged.
-- Corporates, large and small, domestic and multinational, have
to deal with a growing number of increasingly complex regulations
and enforcement in the Group's three primary geographic markets of
the UK, EU and US.
-- All clients face escalating nation-state and criminal
(serious organised crime) cyber-attacks.
-- There are significant and deep-seated national and
international cyber and compliance skills deficits.
-- Technological security solutions are inadequate to the
challenge, which is primarily one of insider risk and human
susceptibilities.
In this environment, our strategy is to offer an integrated
suite of sensibly priced, high-quality GRC products and services on
an increasingly longer-term contracted basis. The proliferation of
legal requirements (both cyber and privacy and customer-mandated
security practices) is driving organisations to start looking for
compliance platforms that can systematically and cost effectively
support their risk management strategies. Our ongoing investment in
our CyberComply platform and in our e-commerce websites are both
important elements of what we see as the development of a cyber
regulation technology ('cyber reg tech') market. This is a market
that we aspire to lead.
In the longer term, we plan to accelerate growth nationally and
internationally, organically and by acquisition. Today's fragmented
and rapidly growing international cyber markets offer significant
organic and consolidation opportunities. We believe that the
Group's proven resilience and agility will enable it to exploit
those opportunities in the years ahead.
The Group's medium-term objective is to build annual revenue,
both organically and through acquisition, to in excess of GBP50m,
with gross margins and EBITDA margins in the order of 65% and 25%
respectively.
Trading outlook
We are continuing to invest in our CyberComply platform, as well
as in our product suite, to help our clients comply with the EU's
Digital Operational Resilience Act, the USA's SEC Cyber Security
Regulation, the UK's revised GDPR and a host of other
industry-specific standards (such as PCI DSS, EuroPrivacy and
ISO/IEC 27001). It is expected that these investments will support
an acceleration in revenue growth through Q3 and for compliance
pressures to drive a very strong Q4.
Alan Calder
Chief Executive Officer
Financial Review
Billings
Billings were up 1% to GBP7.3m (H1 FY23: GBP7.2m). Billings
equate to the total value of invoices (excluding VAT) raised as
cash sales through the Group's websites. The figure does not take
account of accrued or deferred income adjustments that are required
to comply with accounting standards for revenue recognition. The
Board considers billings to be a key performance indicator because
it has a much closer relationship than accounting revenue to cash
receipts from customers. It also provides good forward visibility
of future accounting revenue since much of the Group's invoicing
for training and 'ad-hoc' consultancy projects takes place ahead of
delivery.
The overall shift within the business towards recurring revenue
on monthly subscriptions and retainer type arrangements means that
billings are more closely aligned with revenue than has been the
case historically.
Revenue
Revenue for the six months ended 30 September 2023 was up 4% to
GBP7.6m (H1 FY23: GBP7.2m).
Despite the uncertainty of the current economic climate, with
high inflation, high interest rates and low levels of overall
economic growth, our H1 FY24 revenue was still 3% up on the
immediately previous 6 months (H2 FY23: GBP7.4m).
H2 is traditionally the Group's stronger trading period, so
management are encouraged to see consecutive periods of growth.
Recurring and contracted revenue was up 8% to GBP5.5m (H1 FY23:
GBP5.1m). This accounted for 72% of total revenue (H1 FY23:
71%).
The strong revenue growth (13%) in the E-Commerce division
reflects a return on the investment made in automation and website
infrastructure projects, which have made it easier for customers to
purchase and have fulfilled products and services without the need
to interact with salespeople or administrative staff.
Software
as a Service
GBP'm Services (SaaS) E-Commerce Total
------------ ------------ ----------------- -------------- ---------
H1 FY24 3.9 1.9 1.8 7.6
H1 FY23 3.6 2.1 1.6 7.3
FY FY23 7.0 4.1 3.6 14.7
------------ ------------ ----------------- -------------- ---------
Software
as a Service
Period-on-period % Services (SaaS) E-Commerce Total
----------------------- ------------ ----------------- -------------- ---------
H1 FY24 vs FY23 8% (10)% 13% 4%
----------------------- ------------ ----------------- -------------- ---------
International
International revenue was down 6% to GBP1.5m (H1 FY23: GBP1.6m),
representing 20% (H1 FY23: 22%) of total Group revenue.
The Group services the majority of its US based clients through
its IT Governance USA business and most of its European clients
through its IT Governance EU business. Invoicing in USD and EUR
respectively. The use of local staff and suppliers in those
territories means cost is incurred in local currency providing a
natural partial hedge against foreign exchange risk.
The Group experienced some operational challenges in the US
during Q2. These have been successfully addressed by management and
performance entering the second half of the year is encouraging.
The EU and US are considered to be important future growth markets
for the Group.
Gross profit
Gross profit was up 4% to GBP4.6m (H1 FY23: GBP4.4m), with gross
margin also up by 100 basis points to 61% (H1 FY23: 60%).
The majority of the Group's direct cost base relates to
headcount for consultants and client delivery staff. The Group's
focus on higher-margin subscription services has driven the overall
improvement in margin. In particular, the growth in retainer type
arrangements for some services contracts has driven margin
improvement in the Services division. Margin in the Services
division also benefited from the positive impact of several
operational projects designed to improve efficiency, while
investment in website infrastructure has delivered margin
improvement in the e-Commerce division.
The Board's expected revenue growth in H2, and in particular in
Q4, is not expected to require additional delivery capability, and
so H2 margins are expected to widen.
Segment 6 months to 30 September Revenue 6 months to 30 September
2023 change 2024
Revenue Margin % Revenue Margin
-------------- --------------
GBP GBP % GBP GBP %
Services 3.6 1.7 47% 8% 3.9 2.0 51%
SaaS 2.1 1.7 81% (10)% 1.9 1.3 68%
E-Commerce 1.6 1.0 63% 12% 1.8 1.3 72%
Total 7.3 4.4 60% 4% 7.6 4.6 61%
Administrative expenses
Administrative expenses increased by GBP0.4m (8%) to GBP5.3m (H1
FY23: GBP4.9m).
During FY23 the Group invested in people, marketing and IT spend
designed to fuel the next phase of revenue growth. It is therefore
expected that FY24 will carry this cost in the first half of the
year. The Group has now reached a point in its various software
development and automation projects where overhead is expected to
drop as a percentage of revenue through H2.
EBITDA
Adjusted EBITDA (earnings before interest, tax, depreciation and
amortization, adjusted to remove exceptional administrative costs)
is considered by the Board to be an important key performance
indicator. The Board believes that it is a more accurate measure of
underlying business performance as it removes the impact of
non-cash accounting adjustments.
Adjusted EBITDA was GBP0.2m (H1 FY23: GBP0.4m).
GBP'M H1 FY24 HY2 FY23 HY1 FY23
----------------------------------- -------- --------- ---------
Revenue 7.6 7.4 7.3
Operating loss (0.7) (1.0) (0.4)
Depreciation 0.0 0.0 0.1
Amortisation 0.8 0.8 0.7
Exceptional administrative costs 0.1 0.1 0.0
Adjusted EBITDA 0.2 (0.1) 0.4
----------------------------------- -------- --------- ---------
Adjusted EBITDA as % Revenue 3% (1)% 5%
Finance expense
The net finance expense of GBP0.2m (H1 FY23: GBP0.1m) relates to
interest on the Group's borrowings and leases accounted for under
IFRS 16.
Loss before tax
Loss before tax was GBP0.9m (H1 FY23: loss GBP0.5m).
Taxation
No provision for tax has been made in the period (FY22: GBPNil).
The tax credit recognised relates to the unwinding of deferred tax
on the acquisition of DQM.
Earnings per share
Loss per share was 0.78 pence (Hi FY23: loss per share 0.48
pence).
Dividend
The Group is not paying a dividend.
Cash flow and cash/debt
The Group's closing cash position net of a bank overdraft was
GBP0.0m (30 September 2022: GBP0.2m).
Borrowings (excluding lease obligations) at period end were
GBP1.5m (30 September 2022: GBP0.8m).
The Group has banking facilities to provide adequate headroom
for unforeseen working capital requirements by way of an invoice
discounting facility that was inherited as part of the acquisition
in 2019.
In addition, the unsecured loan facility provided by Andrew
Brode for the amount of GBP700,000 at an interest rate of 5% above
the Bank of England base rate to provide additional working capital
is available to the Company until at least 31 December 2024 and
shall automatically renew for a further 12 months unless terminated
by either party. As at the period end and the date of this report,
GBP350,000 remained available to be drawn down.
Statement of financial position
Net assets were GBP6.6m (30 September 2023: GBP8.1m).
Net current liabilities at period end were up by GBP1.4m to
GBP5.6m (30 September 2023: GBP4.2m).
The trade and other payables balance includes a deferred income
balance of GBP1.8m (30 September 2023: GBP1.8m), relating to
training and consultancy projects due to be delivered after the
statement of financial position date. This balance provides some
visibility of income to be recognised in H2.
Intangible assets
The Group's accounting policy is that only directly attributable
staff costs of the technical teams developing the assets are
capitalised. No management time is capitalised, and neither is any
proportion of overheads or borrowing costs.
Additions of GBP0.9m (H1 FY23: GBP1.0m) relate to software,
website development and the development of courseware.
Amortisation of intangible fixed assets was GBP0.8m (H1 FY23:
GBP0.7m).
Goodwill arising from business combinations has been allocated
to the Group's DQM cash-generating unit ('CGU').
Goodwill was GBP6.8m (30 September 2022: GBP6.8m).
Goodwill is tested at least annually for impairment and whenever
there are indications that goodwill might be impaired.
Capital structure
The issued share capital at 30 September 2023 was 107,826,246
(30 September 2022: 107,826,246) ordinary shares of GBP0.001
each.
There were no share options granted in the period to 30
September 2023.
Risks and uncertainties
The Board continually assesses and monitors the key risks of the
business. The key risks that could affect the Group's
performance, and the factors that mitigate these risks, are set
out on pages 24 to 25 of the Group's Annual Report for 2023 (a copy
of which is available from the Group's website ( www.grci.group
).
Chris Hartshorne
Finance Director
UNAUDITED CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHSED 30 SEPTEMBER 2023
6 months 12 months 6 months
to 30 to 31 March to 30 September
September 2023 audited 2022
2023 unaudited unaudited
Notes GBP'000 GBP'000 GBP'000
-------------------------------------------- ------- ---------------- -------------- -----------------
Revenue 7,573 14,660 7,287
Cost of sales (2,998) (5,783) (2,885)
----------------------------------------------------- ---------------- -------------- -----------------
Gross profit 4,575 8,877 4,402
Administrative expenses (5,279) (10,423) (4,917)
Other operating income 18 121 48
----------------------------------------------------- ---------------- -------------- -----------------
Operating loss (686) (1,425) (467)
Net financing costs (169) (190) (72)
Share of post-tax loss of equity-accounted (17) - -
joint ventures
-------------------------------------------- ------- ---------------- -------------- -----------------
Loss before taxation (862) (1,615) (539)
Taxation 21 365 21
----------------------------------------------------- ---------------- -------------- -----------------
Loss for the financial period (841) (1,250) (518)
----------------------------------------------------- ---------------- -------------- -----------------
Loss for the financial period attributable
to:
Equity shareholders of the parent (841) (1,250) (518)
----------------------------------------------------- ---------------- -------------- -----------------
Basic loss per share (pence) (0.78) (1.16) (0.48)
----------------------------------------------------- ---------------- -------------- -----------------
Diluted loss per share (pence) (0.78) (1.16) (0.48)
----------------------------------------------------- ---------------- -------------- -----------------
All of the Group's loss relates to continuing operations.
The accompanying accounting policies and notes form an integral
part of these financial statements.
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 SEPTEMBER 2023
Notes 6 months 12 months 6 months
to 30 to 31 March to 30 September
September 2023 audited 2022
2023 unaudited unaudited
GBP'000 GBP'000 GBP'000
---------------------------------------- ------- ---------------- -------------- -----------------
Loss for the period (841) (1,250) (518)
Other comprehensive loss - items
that may subsequently be reclassified
to profit/loss: (1) (21) (35)
------------------------------------------------- ---------------- -------------- -----------------
Other comprehensive loss for the
financial period (1) (21) (35)
------------------------------------------------- ---------------- -------------- -----------------
Total comprehensive loss for the
financial period (1) (21) (35)
------------------------------------------------- ---------------- -------------- -----------------
Total comprehensive loss attributable
to equity shareholders of the parent (842) (1,271) (553)
------------------------------------------------- ---------------- -------------- -----------------
The accompanying accounting policies and notes form an integral
part of these financial statements.
UNAUDITED CONSOLIDATED BALANCE SHEET
FOR THE SIX MONTHSED 30 SEPTEMBER 2023
6 months 12 months 6 months
to 30 to 31 March to 30 September
September 2023 audited 2022
2023 unaudited unaudited
Notes GBP'000 GBP'000 GBP'000
--------------------------------------- ------- ---------------- -------------- -----------------
ASSETS
Non-current assets
Goodwill 6,804 6,804 6,804
Intangible assets 5,663 5,616 5,876
Property, plant and equipment 218 248 293
Investments in equity-accounted joint
ventures 19 17 17
------------------------------------------------ ---------------- -------------- -----------------
12,704 12,685 12,990
----------------------------------------------- ---------------- -------------- -----------------
Current assets
Trade and other receivables 1,509 1,611 1,376
Current tax - 37 -
Cash at bank 27 139 199
------------------------------------------------ ---------------- -------------- -----------------
1,536 1,787 1,575
----------------------------------------------- ---------------- -------------- -----------------
Current liabilities
Trade and other payables (5,655) (5,291) (4,975)
Borrowings (1,269) (1,074) (526)
Lease liabilities (46) (58) (101)
Current tax (127) - (127)
------------------------------------------------ ---------------- -------------- -----------------
(7,097) (6,423) (5,729)
----------------------------------------------- ---------------- -------------- -----------------
Net current liabilities (5,561) (4,636) (4,154)
------------------------------------------------ ---------------- -------------- -----------------
Non-current liabilities
Trade and other payables - (8) -
Borrowings (199) (215) (252)
Lease obligations (76) (95) (119)
Deferred tax liability (280) (301) (317)
------------------------------------------------ ---------------- -------------- -----------------
(555) (619) (688)
----------------------------------------------- ---------------- -------------- -----------------
Net assets 6,588 7,430 8,148
------------------------------------------------ ---------------- -------------- -----------------
Equity
Share capital 108 108 108
Share premium 16,012 16,012 16,012
Merger reserve 4,276 4,276 4,276
Share-based payment reserve 126 126 126
Translation reserve (31) (30) (44)
Accumulated deficit (13,903) (13,062) (12,330)
------------------------------------------------ ---------------- -------------- -----------------
Total equity 6,588 7,430 8,148
------------------------------------------------ ---------------- -------------- -----------------
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 30 SEPTEMBER 2023
Share Share Merger Share-based Retained Translation Total
capital premium reserve payment deficit reserve
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------ ------------ ------------ ------------ --------------- ------------- ---------------- -----------
Balance at 1
April
2022
(audited) 108 16,012 4,276 126 (11,812) (9) 8,701
Loss for the
period - - - - (1,250) - (1,250)
Foreign
exchange
difference
on
consolidation - - - - - (21) (21)
------------------ ------------ ------------ ------------ --------------- ------------- ---------------- -----------
Total
comprehensive
loss for the
period - - - - (1,250) (21) (1,271)
------------------ ------------ ------------ ------------ --------------- ------------- ---------------- -----------
At 31 March
2023
(audited) 108 16,012 4,276 126 (13,062) (30) 7,430
------------------ ------------ ------------ ------------ --------------- ------------- ---------------- -----------
Loss for the
period - - - - (841) - (841)
Foreign
exchange
difference
on
consolidation - - - - - (1) (1)
------------------ ------------ ------------ ------------ --------------- ------------- ---------------- -----------
Total
comprehensive
loss for the
period - - - - (841) (1) (842)
------------------ ------------ ------------ ------------ --------------- ------------- ---------------- -----------
At 30
September
2023
(unaudited) 108 16,012 4,276 126 (13,903) (31) 6,588
------------------ ------------ ------------ ------------ --------------- ------------- ---------------- -----------
Share Share Merger Share-based Retained Translation Total
capital premium reserve payment deficit reserve
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------ ------------ ------------ ------------ --------------- ------------- ---------------- -----------
Balance at 1
April
2022
(audited) 108 16,012 4,276 126 (11,812) (9) 8,701
Loss for the
period - - - - (518) - (518)
Foreign
exchange
difference
on
consolidation - - - - - (35) (35)
------------------ ------------ ------------ ------------ --------------- ------------- ---------------- -----------
Total
comprehensive
loss for the
period - - - - (518) (35) (553)
------------------ ------------ ------------ ------------ --------------- ------------- ---------------- -----------
At 30
September
2022
(unaudited) 108 16,012 4,276 126 (12,330) (44) 8,148
------------------ ------------ ------------ ------------ --------------- ------------- ---------------- -----------
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHSED 30 SEPTEMBER 2023
6 months 6 months
to 30 12 months to 30 September
September to 31 March 2022 unaudited
2023 unaudited 2023 audited
Notes GBP'000 GBP'000 GBP'000
---------------------------------------------- ------- ---------------- --------------- -----------------
Cash flows from operating activities
Loss for the period (841) (1,250) (518)
Adjustments for:
Depreciation of plant and equipment 16 37 19
Amortisation of right of use assets 27 95 47
Amortisation of intangible fixed
assets 817 1,523 719
Foreign exchange loss/(gain) 11 2 (4)
Share of post-tax loss of equity-accounted 7 - -
joint venture
Finance expenses 169 190 72
Income tax credit (21) (365) (21)
======================================================= ================ =============== =================
232 314
Decrease in trade and other receivables 101 9 252
Increase in trade and other payables 350 (750) (1,086)
======================================================= ================ =============== =================
636 (509) (520)
Income tax refund 164 163 -
======================================================= ================ =============== =================
Net cash inflow/(outflow) from operating
activities 800 (346) (520)
Investing activities
Purchase of intangible assets (864) (1,506) (963)
Purchase of plant and equipment (15) (50) (37)
Acquisition of joint venture investment (9) - -
============================================== ======= ================ =============== =================
Net cash outflow from investing
activities (888) (1,556) (1,291)
======================================================= ================ =============== =================
Financing activities
Proceeds from borrowings 665 875 -
Repayment of borrowings (497) (658) (284)
Interest paid (152) (155) (50)
Interest on lease liability on right-of-use
assets (6) (14) (13)
Payment of lease liabilities on right-of-use
assets (31) (109) (43)
======================================================= ================ =============== =================
Net cash outflow from financing
liabilities (21) (61) (390)
Net decrease in cash and cash equivalents (109) (1,963) (1,910)
Cash and cash equivalents at beginning
of financial period 139 2,099 2,099
Effects of exchange rate changes
on cash and cash equivalents (3) 3 10
======================================================= ================ =============== =================
Cash and cash equivalents at end
of financial period 27 139 199
======================================================= ================ =============== =================
Comprising
Cash at bank 27 139 199
------------------------------------------------------- ---------------- --------------- -----------------
1. Nature of operations and general information
GRC International Group plc ('GRC International Group' or 'the
Company') is a public limited company limited by shares,
incorporated and domiciled in England and Wales. The registered
company number is 11036180 and the registered office is Unit 3
Clive Court, Bartholemew's Walk, Cambridgeshire Business Park, Ely,
Cambridgeshire, CB7 4EA.
The principal activities of GRC International Group and its
subsidiary companies is as a one-stop shop for IT governance
including books, tools, learning and consultancy services.
The interim financial statements have not been audited or
reviewed by the auditors.
2. Basis of preparation of half-year report
The condensed consolidated interim financial report for the
half-year reporting period ended 30 September 2022 has been
prepared in accordance with Accounting Standard IAS 34 Interim
Financial Reporting.
The results include the results of GRC International Group plc
and its subsidiaries.
A subsidiary is a company controlled directly by the Group.
Control is achieved where the Group has the power over the
investee, rights to
variable returns and the ability to use the power to affect the
investee's returns.
Income and expenses of subsidiaries acquired during the year are
included in the Consolidated Income Statement from the effective
date of control. When necessary, adjustments are made to the
financial statements of subsidiaries to bring their accounting
policies into line with those used by the Company.
All intra-Group transactions, balances, income, and expenses are
eliminated in full on consolidation.
The Interim report does not include all the notes of the type
normally included in an annual financial report. Accordingly, this
report is to be read in conjunction with the annual report for the
year ended 31 March 2023 and any public announcements made by GRC
International Group plc during the interim period.
Half-yearly (interim) reports
The comparative financial information for the year ended 31
March 2023 in this interim report does not constitute statutory
accounts for that year.
The statutory accounts for the year ended 31 March 2023 have
been delivered to the Registrar of Companies. The auditors' report
on those accounts was unqualified and did not contain a statement
under 498(2) or 498(3) of the Companies Act 2006.
3. Revenue
Revenue is all derived from continuing operations.
Notwithstanding that the Group's revenues are often
interdependent, the Group has disaggregated revenue into various
categories in the following tables which is intended to depict how
the nature, amount, timing and uncertainty of revenue and cash
flows are affected by economic date:
6 months 6 months
to 30 12 months to 30 September
September to 31 March 2022 unaudited
2023 unaudited 2023 audited
GBP'000 GBP'000 GBP'000
----------------------------- ---------------- --------------- -----------------
Consultancy 4,964 9,350 4,807
Publishing and distribution 345 794 392
Software 788 1,760 902
Training 1,476 2,756 1,185
------------------------------ ---------------- --------------- -----------------
Total revenue 7,573 14,660 7,287
------------------------------ ---------------- --------------- -----------------
The Group's revenue is analysed as follows for each revenue
category:
6 months 6 months
to 30 12 months to 30 September
September to 31 March 2022 unaudited
2023 unaudited 2023 audited
GBP'000 GBP'000 GBP'000
-------------------------- ---------------- --------------- -----------------
Sale of goods 346 794 391
Provision of services 7,227 13,866 6,896
--------------------------- ---------------- --------------- -----------------
7,573 14,660 7,287
Other operating income * 18 121 48
--------------------------- ---------------- --------------- -----------------
Total revenue 7,591 14,781 7,335
--------------------------- ---------------- --------------- -----------------
Other operating income relates to rent received from the sub-let
of some of the Group's office space.
4. Earnings per share
Basic earnings per share is based on the loss after tax for the
period and the weighted average number of shares in issue during
the period.
6 months 6 months
to 30 12 months to 30 September
September to 31 March 2022 unaudited
2023 unaudited 2023 audited
GBP'000 GBP'000 GBP'000
------------------------------------- ---------------- --------------- -----------------
Loss attributable to equity holders
of the group (841) (1,250) (518)
Weighted average number of shares
in issue 107,826 107,826 107,826
-------------------------------------- ---------------- --------------- -----------------
Diluted loss per share (pence) (0.78) (1.16) (0.48)
-------------------------------------- ---------------- --------------- -----------------
6 months 6 months
to 30 12 months to 30 September
September to 31 March 2022 unaudited
2023 unaudited 2023 audited
Number of shares 107,826,246 107,826,246 107,826,246
Dilutive (potential dilutive) effect - - -
of share options
-------------------------------------- ---------------- --------------- -----------------
Weighted average number of ordinary
shares for the purposes of diluted
earnings per share 107,826,246 107,826,246 107,826,246
Diluted loss per share (pence) (0.78) (1.16) (0.48)
--------------------------------------- ---------------- --------------- -----------------
Due to the losses incurred during the period, a diluted loss per
share has not been calculated as this would serve to reduce the
basic loss per share. There were 526,760 (2022: 526,760) share
options outstanding at the end of the period that could potentially
dilute basic earnings per share in the future.
5. Intangible assets
Marketing Publishing Consultancy Software Trademarks Customer Total
tools products products and relationships
and website
courseware costs
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- ------------- -------------- --------------- ------------ -------------- ----------------- -----------
COST
At 1 April
2022
(audited) 66 451 1,218 7,172 466 1,843 11,216
Additions - 83 374 1,049 - - 1,506
Foreign
exchange
movement - - 3 - - - 3
----------------- ------------- -------------- --------------- ------------ -------------- ----------------- -----------
At March 2023
(audited) 66 534 1,595 8,221 466 1,843 12,725
Additions 1 4 285 574 - - 864
Foreign
exchange
movement - - (1) - - - (1)
----------------- ------------- -------------- --------------- ------------ -------------- ----------------- -----------
At 30
September
2023 67 538 1,879 8,795 466 1,843 13,588
----------------- ------------- -------------- --------------- ------------ -------------- ----------------- -----------
Accumulated
depreciation
At 1 April
2022
(audited) 63 317 526 4,060 147 473 5,586
Charge for
period 1 55 119 1,148 46 154 1,523
----------------- ------------- -------------- --------------- ------------ -------------- ----------------- -----------
At 31 March
2023
(audited) 64 372 645 5,208 193 627 7,109
Foreign
exchange
movement - - (1) - - - (1)
Charge for
period - 32 87 599 23 76 817
----------------- ------------- -------------- --------------- ------------ -------------- ----------------- -----------
At 30
September
2023 64 404 731 5,807 216 703 7,925
----------------- ------------- -------------- --------------- ------------ -------------- ----------------- -----------
Net book
value
At 30
September
2023 3 134 1,148 2,988 250 1,140 5,663
----------------- ------------- -------------- --------------- ------------ -------------- ----------------- -----------
At 31 March
2023
(audited) 2 162 950 3,013 273 1,216 5,616
----------------- ------------- -------------- --------------- ------------ -------------- ----------------- -----------
Amortisation is included within administrative expenses.
All intangible assets have been developed internally with the
exception of those arising on the business acquisition in 2019. For
CGUs requiring impairment testing under IAS 36 Impairment of
Assets, the method used to determine recoverable amount is
value-in-use.
6. Authorised, allotted, issued and fully paid
6 months 12 months 6 months
to 30 to 31 to 30
September March September
2023 2023 2022
unaudited audited unaudited
Number Number GBP'000 Number GBP'000
--------------- --------------- -------------- --------------- -------------- --------------- --------------
Ordinary
shares of
GBP0.001
each 107,826,246 108 107,826,246 108 107,826,246 108
107,826,246 108 107,826,246 108 107,826,246 108
--------------- --------------- -------------- --------------- -------------- --------------- --------------
7. Events after the reporting period
There have been no events that require disclosure in accordance
with IAS10, 'Events after the balance sheet date'.
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END
IR DKLFFXLLLFBX
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