TIDMOSI
RNS Number : 5603B
Osirium Technologies PLC
11 June 2021
11 June 2021
Osirium Technologies plc
("Osirium", "the Group" or "the Company")
Final Results
Resilient performance and continued strategic progress
Osirium Technologies plc (AIM: OSI.L), a leading vendor of
cloud-based cybersecurity software, today announces its final
results for the 12 months ended 31 December 2020.
Financial highlights
-- Total recognised revenue increased by 22% to GBP1.43 million
(2019: GBP1.17 million)
-- Total bookings decreased 14% to GBP1.57 million (2019: GBP1.82
million)
o The Group achieved record first and fourth quarters, however
the Coronavirus pandemic delayed customer buying decisions,
particularly impacting bookings in the second and third
quarter
-- Deferred revenue increased by 10% to GBP1.50 million (2019:
GBP1.37 million), providing enhanced visibility of future
earnings
-- Reduced operating loss of GBP2.88 million (2019: GBP3.40
million), in line with management expectations
-- Cash balances at 31 December 2020 of GBP1.48 million (31
December 2019: GBP3.85 million) reflecting continued investment
for long-term growth
Operational highlights
-- Rapid and effective response to the pandemic, successfully
pivoting to digital marketing and virtual events to drive
new business
-- 28% increase in customer numbers with competitive wins against
largest Privileged Access Management ("PAM") players
-- 99% SaaS contract renewals from existing customer base with
a number of significant expansions secured during the period
-- Customers signed across both the private and public sector
including one of the UK's largest NHS trusts, a major regional
UK ambulance service, and a major UK communications provider
-- Substantial channel expansion in UK and across EMEA
-- First revenues from the Group's Privileged Endpoint Management
("PEM") product
Post year-end:
-- Continued trading momentum with record first quarter for
bookings
-- Continued business momentum and further sales with a substantial
number of contract wins, particularly with NHS trusts
-- Growing pipeline with quality and volume of leads improving
as end markets stabilise
-- Increased engagement with new and existing channel partners
-- Successful fundraise of GBP2.17 million in April and May
2021 which enables the Group to continue to scale its business
in PAM and digital automation, expand the Group's channel
partner network and accelerate recruitment, including new
sales, engineering and R&D teams
David Guyatt, Chief Executive Officer, commented :
"2020 was a challenging year for Osirium, as it was for many
companies, but we are particularly proud to have achieved a record
Q1 and Q4 alongside a string of pitch wins against our largest
competitors.
A positive start to the year was dampened by challenging
external market conditions because of the pandemic. Despite this,
through careful cost management, the dedication and hard work of
our staff, and a growing demand for privileged access in our
markets, we were able to deliver against our strategic objectives
for the year and were pleased to see a return to encouraging
trading momentum as we closed it off.
Looking ahead, the pandemic will continue to provide for a
degree of uncertainty as we move through 2021 with respect to both
our direct and indirect sales channels. While the exact timing of
deals will remain difficult to predict in the near-term, market
conditions are gradually improving, there is momentum in the
business, and our clear and proven strategy to capitalise on the
vast opportunity ahead of us is strengthened by the recent
fundraise. With privileged access now widely recognised as a core
requirement of IT security, the Group is confident in its future
prospects and another year of progress in 2021."
- Ends -
For further information:
Osirium Technologies plc Tel: +44 (0) 118 324 2444
David Guyatt, Chief Executive Officer
Rupert Hutton, Chief Financial
Officer
www.osirium.com
Stifel Nicolaus Europe Limited Tel: +44 (0) 207 710 7600
(Nominated Adviser and Broker)
Fred Walsh / Richard Short
Alma Tel: +44 (0) 203 405 0205
(Financial PR)
Hilary Buchanan / David Ison /
Josh Royston / Kieran Breheny
Notes to Editors:
Osirium Technologies plc (AIM: OSI) is a leading UK-based
cybersecurity software vendor delivering Privileged Access
Management ("PAM"), Privileged Endpoint Management ("PEM") and
Osirium Automation solutions that are uniquely simple to deploy and
maintain.
With privileged credentials involved in over 80% of security
breaches, customers rely on Osirium PAM's innovative technology to
secure their critical infrastructure by controlling 3(rd) party
access, protecting against insider threats, and demonstrating
rigorous compliance. Osirium Automation delivers time and cost
savings by automating complex, multi-system processes securely,
allowing them to be delegated to Help Desk engineers or end-users
and to free up specialist IT resources. The Osirium PEM solution
balances security and productivity by removing risky local
administrator rights from users, while at the same time allowing
escalated privileges for specific applications.
Founded in 2008 and with its headquarters in Reading, UK, the
Group was admitted to AIM in April 2016. For further information,
please visit www.osirium.com .
Chairman and Chief Executive's Statement
Overview
We are pleased to report the Group's results for the year to 31
December 2020, which demonstrate an effective response to the
challenges faced during the period and a return to trading momentum
through the second half. Progress continues both domestically and
in overseas territories, the latter particularly enabled by the
expansion and development of our channel partner network.
Following a record Q1 for bookings, we experienced COVID-related
slowdowns in Q2 and Q3 as our customers' immediate priorities
shifted, resulting in the delay and postponement of pipeline
projects. Despite this setback, we achieved a record Q4 for
bookings, reflecting the return of demand for Osirium's products
and the stabilisation of our end-markets.
During the period, our customer numbers grew 28%, reflecting the
growth in awareness of our offering as we expanded our market
presence through a number of significant new contract wins and
'land-and-expand' orders from existing accounts. We are also proud
to have achieved 99% SaaS contract renewals from our existing
customer base, the best possible endorsement for our
proposition.
In line with our strategic focus on growing our presence through
"land and expand" opportunities, we secured a number of significant
new customers in 2020, securing competitive pitch wins against our
largest competitors. The Group further expanded its presence into
the healthcare market, as well as strengthening itself in sectors
such as telecoms, retail, childcare services and higher education.
Business wins of note included deals with a leading healthcare
provider, a contract with a major UK communications provider, and
two separate regional ambulance services.
Investment for future growth remains a strategic priority for
the Group. We have focused on product enhancements within our
privileged access suite to drive value for our customers, and
investment in our partner network during the year has expanded our
addressable market.
Home working has laid bare many of the risks to cybersecurity
among organisations, and IT professionals have made PAM a priority
to ensure their company data, privileged accounts and regular
business processes remain secure. The ease of implementation of our
platform, professionalism of our customer engagement, and value of
our solutions continue to be key competitive advantages. In
contrast to many larger players, Osirium provides the ideal
solution for organisations wanting top quality security but without
unending complexity, protracted implementation and recurring hidden
costs.
The trading momentum we experienced in our record Q4 has carried
through to the new financial year, and we continue to focus on new
orders and expanding the pipeline of opportunities domestically and
overseas through our direct and indirect channels. We are
particularly excited by the opportunities available to the Group in
healthcare as a result of NHS Digital funding for PAM projects. In
Q1, we secured a substantial number of NHS trusts as new customers,
including hospitals, regional trusts and ambulance services, and
privileged access is now widely recognised as a core requirement of
IT security. While we remain cognisant of the ongoing uncertainty
surrounding the pandemic, we have a clear strategy in place to
capitalise on these opportunities and remain confident in our
future prospects.
Results
Total bookings in the period were GBP1.57m, down 14% (2019:
GBP1.82 million). Recognised revenue for the year was GBP1.43
million, an increase of 22% (2019: GBP1.17 million). As a result of
the Group's Software-as-a-Service ("SaaS") revenue recognition
policy, which recognises revenues over the course of multi-year
contracts, deferred revenue increase to circa. GBP1.50 million
(2019: GBP1.37 million), giving the Company healthy earnings
visibility. Cash balances as at 31 December 2020 were GBP1.48
million (31 December 2019: GBP3.85 million). The Group's loss
before tax for the year was GBP3.10 million (2019: GBP3.40m).
The Group spent GBP1.81m (2019: GBP1.77m) on direct staff and
contractor costs for research and development, of which all was
capitalised in both periods. This expenditure pertains to
developing the Group's new and enhanced software offerings. The
Group continues to invest in new product development, as well as
the continual modification and improvement of its current product
base to meet technological advances, customer and ever-expanding
new market requirements of the rapidly evolving cybersecurity
market.
Business model
The Group's revenue model is built around software licenses,
with the Group's PAM product charged per device, the Osirium
Automation product charged per user and our PEM product charged per
protected endpoint. Service revenue comes both from new customers
setting out on their initial Osirium deployments and existing
customers growing and expanding their use of Osirium's software
solutions.
In response to social distancing measures, lockdowns and the
postponement of all major industry tradeshows and events, the Group
has evolved its marketing strategy with an emphasis on developing
new business leads through integrated digital marketing campaigns.
The transition to digital marketing has been smooth and these
initiatives have proven successful, with digital marketing leads
representing 65% of overall sales opportunities in 2020, in
comparison to 25% in 2019.
Our channel partner network is becoming an increasingly
important route to market. While still in its early stages, initial
signs are promising, including increasing numbers who are opting to
work with Osirium over some of the larger players in the PAM field.
As these networks strengthen and solidify, we expect them to make
an increasingly meaningful contribution to bookings in 2021 and
beyond.
Market
PAM has emerged as one of the fastest growing areas of cyber
security and risk management software solutions and is now
increasingly recognised as a critical service across our end
markets, both in the UK and internationally. While there has been a
rapidly growing level of awareness of PAM across the UK and the
Nordics over the past few years, awareness across the wider EMEA
region is catching up. Additionally, the surge in home and remote
working has prompted greater awareness of IT and cybersecurity
risks posed by these practices.
There remains substantial opportunity for further growth in PAM.
KuppingerCole, the international technology research organisation,
estimates the market is worth revenue of around $2.20bn per annum,
predicted to grow to $5.40bn by 2025.
Equally, the digital process automation market, where our
Osirium Automation offering lies, is also experiencing strong
growth. Mordor Intelligence, the global market research and
consulting firm, expects the digital process automation market to
grow from $7.80 billion in 2019 to reach a value of $16.12 billion
by 2025.
Growth strategy
The Group's growth strategy is centred around three core
principles: innovation, customer focus and market expansion.
Commitment to innovation
As part of the Group's commitment to innovation and looking for
new ways to address security issues, we made several investments
into our product suite during the period.
Our PAM capabilities have been strengthened through a number of
enhancements. We have enabled clustering of PAM across multiple
servers, delivering a high availability and resilience option for
customers as they scale operations as PAM is increasingly
considered critical for IT and cybersecurity defences. Additional
enhancements include a new, intuitive browser-based user
experience, an improved Administrator interface, and a new
"just-in-time" approval facility to grant access for a limited
period of time.
In the course of the year, we repositioned our Privileged
Process Automation platform as Osirium Automation, so as to reach
out more effectively to customers with business process challenges
beyond 'privilege' and security. We introduced an API to allow
tasks to be initiated by external systems such as service desk
tools (like ServiceNow, for example) or corporate intranet portals.
We added Task Scheduling to run recurring tasks at selected times
and dates, as well as a built-in Task Builder, a low-code, task
development environment to allow customers another option for
automating processes by themselves.
To further assist customers in easily and rapidly automating
processes with Osirium Automation we launched a Resource Hub with
pre-built "Playbooks" - ready made automated processes that
customers can choose from - plug-ins to common environments, APIs
and documentation so that customers can start to see early value
from Automation. We have also created a commercial offering of
Osirium PAM bundled with Osirium Automation and seen this drive
considerable interest from both existing and new customers.
We have continued to develop the capabilities of Osirium PEM,
our solution for Privileged Endpoint Management. A free tool we
launched lets prospects assess where local admin accounts have been
created and their potential level of risk. We also added a
Privileged Process Monitoring facility enabling the monitoring all
processes running with elevated privileges and not just those
started by Osirium PEM.
In November 2020, Osirium was granted a patent by the US Patent
and Trade Mark office for its 'shadow authentication' technology.
This is a unique solution to a challenge experienced by Managed
Security Service Providers ("MSSPs") in situations where they are
not permitted direct access to their customers' Active Directory
servers.
Customer focus
Customers value Osirium for its excellent levels of support and
the ease of implementation of its platform. This is evidenced by
the 99% renewal rate achieved by the Group during the period.
Our "Land and Expand" model is built around securing an initial
sale with a customer and then following with additional licences or
product orders. This model continues to prove successful. Successes
during the period include the expansion of a contract with a
healthcare provider for an additional 5,000 PEM endpoints alongside
Osirium PAM. With a 28% increase in customer numbers in the year,
including 16 new customers, we expect to see further cross-selling
and contract expansions as we move through 2021.
An important factor in 2020 in strengthening our relations with
end users was the rollout of the Osirium Customer Network. This is
an informal programme of workshops and interactive meetings hosted
by Osirium where customers share experiences, best practices and
lessons learned with our solutions. As well as reinforcing the
sense of an Osirium community, the Network helps embed our
technology with these customers, accelerate deployments, encourage
cross-selling and provide sales references. The increasing
participation of customers in the Network is also used by Account
Managers as a valuable sales differentiator against the
competition.
Market expansion
Our key target market remains mid-tier and upper mid-tier
enterprises across the public and private sectors. We have
established a presence in industries such as financial services,
healthcare, communications and retail, and are continuing to grow
our presence in other sectors such as manufacturing, energy,
beverages and professional services. We feel that there is a
growing awareness of PAM as mission-critical in protecting the
infrastructures of upper mid-market clients. The growth we are
seeing in the associated digital process automation markets
underpins our market opportunity, which we are confident will drive
booking levels for the Company's solutions.
Partner and reseller network expansion
Growing the Group's partner and reseller network is a primary
strategic aim for Osirium, enabling the Group to scale further.
During the period, the Group achieved a significant expansion of
this network in line with the growing recognition of PAM as a
business-critical security solution both domestically and
internationally.
Following a strong H1 which saw 13 new partners signed up, we
signed additional new partners in H2. The Group now has over 30
partners across the UK and several overseas territories including
Benelux, the Nordics, Eastern Europe and the Middle East, and we
expect the number of sales generated through these indirect
channels will increase over time.
Our strategic technology alliances strengthen our market
position by expanding the range of complementary technologies with
which we integrate, opening up new market opportunities, and
embedding our technology more tightly in customer environments.
During the year, we partnered with cybersecurity and network
management firm AppViewX, cybersecurity and digital risk management
company RSA, and identity and access management company
My1Login.
COVID-19
As previously reported, our priority since the outbreak of the
pandemic has been to protect our colleagues, customers and other
stakeholders. Due to hard work and dedication of our colleagues, we
are proud to report that there has been no compromise on service
levels or delivery during the crisis.
We took immediate action to protect our financial position,
introducing temporary salary sacrifices at all levels and putting a
temporary freeze on new recruitment. As a result, we were not
required to make additional cuts, make use of any government
financial support or furlough any members of staff.
People
We would like to thank our staff for their support during a year
beset with challenges as the resilient performance of the Group
would not have been possible without their hard work. We have a
talented and stable team and look forward to another year of
strategic progress in 2021.
Current trading and outlook
Moving through 2021, we are seeing continued momentum with a
record Q1 and a healthy pipeline of opportunities through our
direct and indirect sales channels. While we remain vigilant to the
ongoing economic uncertainty and risks to our end markets, we are
encouraged by the gradual normalisation of trading conditions.
Home working has laid bare many of the risks to cyber security
among organisations, and many have made PAM a priority to ensure
their company data, privileged accounts and regular business
processes remain secure. The ease of implementation of the Group's
platform and professionalism of customer engagement remains a key
competitive advantages. Osirium provides the ideal solution for
organisations wanting great quality security but without
unnecessary complexity and protracted implementation.
Healthcare, a key target market for the Group, continues to
provide exciting opportunities, with a number of deals signed with
providers in the public and private sectors during the period. In
December 2020, NHS England announced funding for trusts via NHS
Digital for PAM projects to protect backups targeted in ransomware
attacks. In the first quarter of 2021 the Group secured a
substantial number of new NHS accounts and will continue to
capitalise on new opportunities in this sector. More widely, we
continue to see strong demand across the public and private sectors
for our services, with organisations valuing our ease of
implementation and levels of customer support alongside our
first-class technology.
Post-period end, in April 2021, the Group also raised
approximately GBP2.17m by way of a placing and subscription. These
funds will facilitate the next phase of Osirium's growth primarily
through scaling the Group's business in PAM and digital process
automation, expanding the Group's partner channel network, and
accelerating the Group's recruitment across sales, engineering and
R&D. The Board would like to thank all shareholders for their
continued support.
Looking ahead, we expect the pandemic to continue to provide
uncertainty throughout 2021 with respect to both our direct and
indirect sales channels. While the exact timing of deals will
remain difficult to predict in the near-term, market conditions are
gradually improving, there is momentum in the business, and we have
a clear and proven strategy to capitalise on the vast opportunity
ahead of us. With privileged access now widely recognised as a core
requirement of IT security, the Group is confident in its future
prospects and another year of progress in 2021.
Financial Review
Overview
The Group has substantially grown its revenue and customer base
during the period, demonstrating greater customer engagement and
investment. Bookings represent a key financial measure for the
Group and demonstrate the progress the Company achieved in the
period under review. Bookings for the 12-month period ended 31
December 2020, represented by total invoiced sales for annual
subscriptions, were GBP1.57 million, a decrease of 14% over the
previous year (2019: GBP1.82 million), the headline bookings total
reflected an increase of 28% in total customer numbers.
The Group's revenue recognition policy recognises revenue in
equal annual instalments over the course of multi-year contracts.
Revenue for the year was GBP1.43 million, an increase of 22% on the
prior year (2019: GBP1.17 million).
Loss after tax for the group was GBP2.50m, decreased from the
loss of GBP2.83 million for the year to 31 December 2019. The
losses of the Group have decreased due to tight cost control
measures introduced in response to the pandemic preserving Cash
Resources, despite significant investment in increasing headcount
and activity levels in our sales, pre-sales, marketing and
engineering departments of the business, building momentum during
2020 ready for 2021.
Revenue Analysis
Revenue for the 12-month period ended 31 December 2020 was
GBP1.43m (2019: GBP1.17m). The Group's total customer count
increased by 16 for the year ended 31 December 2020, up to 57
(2019: 41), with this customer growth reflecting the growing sales
momentum experienced by the business as the Group broadens its
customer base, and the demand for our PAM, PPA and PEM solutions
continues to increase.
Company deferred revenues as at 31 December 2020 were GBP1.50
million, compared with deferred revenues at the end of December
2019 of GBP1.37 million, helping provide a degree of visibility and
certainty over our future revenue streams.
Taxation
The Group has benefited from the tax relief given on development
expenditure, resulting in a research and development tax credit of
GBP591,436 being claimed in respect of the year to 31 December
2020, compared with GBP557,251 for the previous year to 31 December
2019, illustrating the consistent investment made in the Group's
innovative cybersecurity product and its pioneering qualities that
is expected to continue going forwards.
Loss per Share
Loss per share for the year on both a basic and fully diluted
basis was 13p. In the prior year the basic and diluted loss per
share was 19p.
Results and Dividend
The Directors are unable to recommend the payment of a final
dividend (2019: GBPnil).
Research and Development & Capital Expenditure
The Group spent GBP1.81m (2019: GBP1.77 million) on direct staff
and contractor costs for research and development, of which all was
capitalised in both periods. This expenditure pertains to
developing the Group's new and enhanced software offerings. The
Group continues to invest in new product development, as well as
the continual modification and improvement of its current product
base to meet technological advances, customer and ever-expanding
new market requirements of the rapidly evolving cybersecurity
market.
Future Developments
The Group has undertaken a strategy to extend its activities to
the provision of a full range of Privileged Access Security
solutions. Alongside expanding into new geographies and industry
sectors, the Group will continue to invest in the development of
innovative and differentiated solutions for its growing customer
base.
Cash flow
The Group's cash balances at 31 December were GBP1.48 million
(2019: GBP3.85 million).
The Group's cash reserves have since been boosted by the fund
raise post year end that raised GBP2.17 million gross cash (before
expenses, fees and commissions) in April 2021.
Net cash used in operations for the period was GBP0.95 million
(2019: GBP1.52 million).
Key Performance Indicators ("KPIs") The Group's progress against
its strategic objectives is monitored by the Board of Directors by
reference to KPIs. Progress made is a reflection of the performance
of the business since publicly listing and the Group's achievement
against its strategic plans. The Group considers major KPIs to be
bookings, revenue, loss before tax, channel partners, new customers
and sectors, customer renewals, and software evaluations.
Financial KPIs:
-- Bookings: are monitored on a monthly basis and reported in
detail at board meetings. Bookings have decreased by 14% to GBP1.57
million for the year to 31 December 2020 from GBP1.82 million for
the year ended 31 December 2019, a KPI that masks the fact that 16
new customer accounts were added and despite a COVID affected year
the business enjoyed a record Q1 and Q4 during the reporting
period.
-- Revenue: As a result of the increase in customer numbers, the
revenue KPI is performing well, with total revenue up 22% to
GBP1.43 million (2019: GBP1.17 million).
-- Operating Loss: the board are pleased with the reduced
operating loss of GBP2.88 million (2019: GBP3.40 million), in line
with management expectations, caused by a combination of increasing
revenues and tight cost control during the COVID-19 pandemic.
Non-financial KPIs include:
-- Channel partners: the Group has added many additional
reseller partners globally, with a focus on Europe and MEA to meet
our plan and have also been establishing agreements with both
resellers and distributors, who we see as key to opening up new
revenue streams.
-- New customers and sectors wins: we were pleased to add
customers in 2020 in new sectors such as Ambulance Services and
Private Sector Health Care as well as customers in existing strong
sectors. We expect this growth to continue as PAM becomes
mainstream and we can independently upsell our PPA and PEM
solutions as the first Osirium product into a new customer
accounts.
-- Customer retention: 99% of customers were retained in the
year, which compares favourably with our SaaS peers highlighting
the 'mission-critical' nature of our solution and customer
satisfaction.
-- Software Evaluations: growing company reputation in the PAM
marketplace means that customers are increasingly willing to
purchase Osirium solutions without requiring a Proof of Concept
(POC), however this remains a significant part of the sales process
for some customers that we are happy to provide.
The Group also measures and monitors brand recognition and
momentum increases in the Osirium name as we continue to build a
global brand. Brand recognition includes monitoring Osirium's
Search Engine Optimisation Position and quarterly growth in
qualified sales leads with a quantified 'call to action'.
Consolidated Statement of Comprehensive Income
Year ended Year ended
31-Dec-20 31-Dec-19
Notes GBP GBP
OPERATIONS
Revenue 1,434,875 1,171,586
GROSS PROFIT 1,434,875 1,171,586
Other operating income 700 -
Administrative expenses (4,307,952) (4,571,317)
OPERATING LOSS (2,872,377) (3,399,731)
Net finance
costs (222,322) (52,162)
LOSS BEFORE
TAX (3,094,699) (3,451,893)
Taxation 590,223 622,514
Loss for the Year Attributable
to the Owners of Osirium Technologies
PLC (2,504,476) (2,829,379)
Basic and fully diluted loss per
share (13)p (19)p
Consolidated Statement of Financial Position
As at As at
31-Dec-20 31-Dec-19
Notes GBP GBP
ASSETS
NON-CURRENT ASSETS
Intangible assets 3,335,455 2,936,473
Property, plant & equipment 90,530 77,534
Right-of-use assets 61,329 110,392
Total Non-Current
Assets 3,487,314 3,124,399
CURRENT ASSETS
Trade and other receivables 4 818,445 982,369
Cash and cash equivalents 5 1,482,376 3,854,922
Total Current
Assets 2,300,821 4,837,291
TOTAL ASSETS 5,788,135 7,961,690
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 2,088,722 1,889,098
Lease liability 54,958 33,916
Total Current
Liabilities 2,143,680 1,923,014
NON-CURRENT LIABILITIES
Deferred tax - -
Lease liability 15,765 76,973
Convertible loan notes 2,502,883 2,345,408
Total non-current liabilities 2,518,648 2,422,381
TOTAL LIABILITIES 4,662,328 4,345,395
EQUITY
SHAREHOLDERS EQUITY
Called up share capital 194,956 194,956
Share premium 10,635,500 10,635,500
Share option reserve 351,547 337,559
Merger reserve 4,008,592 4,008,592
Convertible note reserve 394,830 394,830
Retained earnings (14,459,618) (11,955,142)
TOTAL EQUITY ATTRIBUTABLE TO
THE
OWNERS OF OSIRIUM TECHNOLOGIES
PLC 1,125,807 3,616,295
TOTAL EQUITY AND LIABILITIES 5,788,135 7,961,690
Consolidated Statement of Changes in Equity
Called
up Share Convertible
share Retained Share Merger option note Total
capital Earnings premium reserve reserve reserve equity
GBP GBP GBP GBP GBP GBP GBP
Balance at 1
January
2019 135,542 (9,125,763) 8,968,554 4,008,592 337,559 - 4,324,484
Changes in
Equity
Issue of share
capital 59,414 - 2,020,091 - - - 2,079,505
Issue costs - - (353,145) - - - (353,145)
Total
comprehensive
loss - (2,829,379) - - - - (2,829,379)
Equity element
of
loan notes
issued - - - - - 394,830 394,830
Balance at 31
December
2019 194,956 (11,955,142) 10,635,500 4,008,592 337,559 394,830 3,616,295
Changes in
Equity
Total
comprehensive
loss - (2,504,476) - - - - (2,504,476)
Share option
charge - - - - 13,988 - 13,988
Balance at 31
December
2020 194,956 (14,459,618) 10,635,500 4,008,592 351,547 394,830 1,125,807
Consolidated Statement of Cash Flows
Year ended Year ended
31-Dec-20 31-Dec-19
Notes
GBP GBP
Cash flows used in operating activities
Cash used in operations (967,180) (1,517,218)
Interest paid - -
Tax received 557,251 472,076
Net cash used in operating activities (409,929) (1,045,142)
Cash flows used in investing activities
Purchase of intangible fixed assets (1,806,146) (1,773,395)
Purchase of property, plant and
equipment (68,994) (79,428)
Sale of property, plant and equipment 17,537 431
Interest received - 35
Net cash used in investing activities (1,857,603) (1,852,357)
Cash flows from financing activities
Share issue - 2,079,505
Share issue
costs - (353,145)
Payment of lease liabilities (net
of interest) (48,484) (60,563)
Issue of loan
notes - 2,700,000
Allocation of loan
note interest (56,530) -
Net cash from financing
activities (105,014) 4,365,797
Increase/(decrease) in cash and
cash equivalents (2,372,546) 1,468,298
Cash and cash equivalents at beginning
of year 3,854,922 2,386,624
Cash and cash equivalents at end
of year 1,482,376 3,854,922
Notes
Osirium Technologies PLC is a company incorporated in the United
Kingdom under the Companies Act 2006 and listed on the AIM market.
The address of the registered office is One Central Square,
Cardiff, CF10 1FS.
1. Significant Accounting Policies
Basis of Preparation
The financial statements have been prepared on a going concern
basis under the historical cost convention, and in accordance with
International Accounting Standards that are effective or issued and
early adopted as at the time of preparing these Financial
Statements and in accordance with the provisions of the Companies
Act 2006.
Basis of Consolidation
The consolidated financial statements incorporate the assets and
liabilities of the subsidiary of Osirium Technologies PLC
('company' or 'parent entity') as at 31 December 2020 and the
results of the subsidiary for the year then ended. Osirium
Technologies PLC and its subsidiary together are referred to in
these financial statements as the 'Group'.
Subsidiaries are all those entities over which the consolidated
entity has control. The consolidated entity controls an entity when
the consolidated entity is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to
affect those returns through its power to direct the activities of
the entity. Subsidiaries are fully consolidated from the date on
which control is transferred to the consolidated entity. They are
de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on
transactions between entities in the Group are eliminated.
Unrealised losses are also eliminated unless the transaction
provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with the policies adopted by the
consolidated entity.
The acquisition of subsidiaries is accounted for using the
acquisition method of accounting. A change in ownership interest,
without the loss of control, is accounted for as an equity
transaction, where the difference between the consideration
transferred and the book value of the share of the non-controlling
interest acquired is recognised directly in equity attributable to
the parent.
Non-controlling interest in the results and equity of
subsidiaries are shown separately in the statement of profit or
loss and other comprehensive income, statement of financial
position and statement of changes in equity of the consolidated
entity. Losses incurred by the consolidated entity are attributed
to the non-controlling interest in full, even if that results in a
deficit balance.
Where the consolidated entity loses control over a subsidiary,
it derecognises the assets including goodwill, liabilities and non-
controlling interest in the subsidiary together with any cumulative
translation differences recognised in equity. The consolidated
entity recognises the fair value of the consideration received and
the fair value of any investment retained together with any gain or
loss in profit or loss.
Going concern
As part of their going concern review the Directors have
followed the guidelines published by the Financial Reporting
Council entitled "Guidance on the Going Concern Basis of Accounting
and Reporting on Solvency and Liquidity Risks (2016)". The
Directors have prepared detailed financial forecasts and cash flows
looking beyond 12 months from the date of these Financial
Statements. In developing these forecasts the Directors have made
assumptions based upon their view of the current and future
economic conditions that will prevail over the forecast period.
The Group incurred a loss of GBP2.50m in the year ended 31
December 2020 and had net current assets of GBP0.15m at that date.
The Group's cash and cash equivalents decreased by GBP2.37m in the
same period. Cash and cash equivalents at 31 December 2020 were
GBP1.48m. Subsequent to the balance sheet date the Group raised
GBP2.17m via a share placing, which was in line with the Board's
target.
In its assessment, the Board has included consideration of the
potential ongoing impact of COVID-19, such as the COVID-related
slowdowns experienced in Q2 and Q3 of 2020, and factored this into
the financial assessment of the Group. The normalisation of trading
conditions in the latter part of the year ended 31 December 2020
resulted in the Group achieving a record level of bookings in Q4
and this level of enhanced bookings has carried through to the
start of the new financial year. This early trading momentum,
increased number of customers and strong current pipeline of new
business supports the Board's business forecasts and underlines
their confidence in the Group's ongoing momentum.
On the basis of the above projections, the Directors are
confident that Osirium has sufficient working capital to honour all
of its obligations to creditors as and when they fall due. The
Directors consider it appropriate to continue to adopt the going
concern basis in preparing the Financial Statements. Accordingly,
the financial statements do not include any adjustments which would
be required if the going concern basis of preparation was deemed to
be inappropriate. However, if the Group is unable to deliver the
anticipated order book and revenue growth, it would give rise to a
material uncertainty which may cast significant doubt about the
Group's ability to continue as a going concern.
New and Amended Standards and Interpretations
The consolidated entity has adopted all of the new or amended
Accounting Standards and Interpretations issued by the
International Accounting Standards Board ('IASB') that are
mandatory for the current reporting period.
2. Accounting Policies
Revenue Recognition
Revenue represents net invoiced sales of services, excluding
value added tax. Sales of software licence subscriptions are
recognised over the period of the contract with the deferred income
being recognised in the statement of financial position. Sales of
one-off installation services are invoiced and recognised fully on
completion of the installation.
Contract Assets
Contract assets are recognised when Osirium has transferred
goods or services to the customer but where Osirium is yet to
establish an unconditional right to consideration. Contract assets
are treated as financial assets for impairment purposes.
Functional and Presentational Currency
Items included in the Financial Statements of Osirium are
measured using the currency of the primary economic environment in
which the entity operates ('the functional currency'). The
financial information is presented in UK sterling (GBP), which is
the functional and presentational currency of Osirium.
Rounding
The figures in the financial statements of Osirium for the
current and preceding year are rounded to nearest whole pound.
Financial Instruments
Financial assets and financial liabilities are recognised in
Osirium's statement of financial position when Osirium becomes
party to the contractual provisions of the instrument. Financial
assets are de-recognised when the contracted rights to the cash
flows from the financial asset expire or when the contracted rights
to those assets are transferred. Financial liabilities are
de-recognised when the obligation specified in the contract is
discharged, cancelled or expired.
Financial assets
Trade and Other Receivables
Trade and other receivables are recognised initially at fair
value and subsequently measured at amortised cost using the
effective interest method less the provision for impairment.
Appropriate provisions for estimated irrecoverable amounts are
recognised in the statement of comprehensive income when there is
objective evidence that the assets are impaired. The amount of the
provision is the difference between the carrying amount and the
present value of estimated future cash flows interest income is
recognised by applying the effective interest rate, except for
short term receivables when the recognition of interest would be
immaterial. Under IFRS 9 for financial instruments, intercompany
balances are tested for impairment on an annual basis, since
Osirium is currently loss making this suggests that not all of the
balance is likely to be repaid; as such the view of directors is
that an impairment of GBP1.9m is a true reflection of this. This
will be reviewed on an annual basis by the directors.
Cash and Cash Equivalents
Cash and cash equivalents comprise cash on hand, demand deposits
held on call with banks, and other short- term highly liquid
investments with original maturities of three months or less that
are readily convertible to a known amount of cash and are subject
to an insignificant risk of changes in value. Cash and cash
equivalents are shown in the financial statements as 'cash and cash
equivalents'.
Impairment of Financial Assets
Osirium recognises a loss allowance for expected credit losses
on financial assets which are either measured at amortised cost or
fair value through other comprehensive income. The measurement of
the loss allowance depends upon Osirium's assessment at the end of
each reporting period as to whether the financial instrument's
credit risk has increased significantly since initial recognition,
based on reasonable and supportable information that is available,
without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to
credit risk since initial recognition, a 12-month expected credit
loss allowance is estimated. This represents a portion of the
asset's lifetime expected credit losses that is attributable to a
default event that is possible within the next 12 months. Where a
financial asset has become credit impaired or where it is
determined that credit risk has increased significantly, the loss
allowance is based on the asset's lifetime expected credit losses.
The amount of expected credit loss recognised is measured on the
basis of the probability weighted present value of anticipated cash
shortfalls over the life of the instrument discounted at the
original effective interest rate.
For financial assets mandatorily measured at fair value through
other comprehensive income, the loss allowance is recognised in
other comprehensive income with a corresponding expense through
profit or loss. In all other cases, the loss allowance reduces the
asset's carrying value with a corresponding expense through profit
or loss.
Financial Liabilities and Equity
Trade and Other Payables
Trade payables are initially measured at fair value and are
subsequently measured at amortised cost using the effective
interest rate method; this method allocates interest expense over
the relevant period by applying the 'effective interest rate' to
the carrying amount of the liability.
Borrowings
Borrowings are recognised initially at fair value less
transactions costs incurred. Borrowings are subsequently stated at
amortised cost; any difference between the proceeds (net of
transaction costs) and the redemption value is recognised in the
statement of comprehensive income over the period of borrowings
using the effective interest method.
The component of the convertible notes that exhibits
characteristics of a liability is recognised as a liability in the
statement of financial position, net of transaction costs.
On the issue of the convertible notes the fair value of the
liability component is determined using a market rate for an
equivalent non- convertible bond and this amount is carried as a
non-current liability on the amortised cost basis until
extinguished on conversion or redemption. The increase in the
liability due to the passage of time is recognised as a finance
cost. The remainder of the proceeds are allocated to the conversion
option that is recognised and included in shareholders equity as a
convertible note reserve, net of transaction costs. The carrying
amount of the conversion option is not premeasured in the
subsequent years. The corresponding interest on convertible notes
is expensed to profit or loss.
Equity
Equity instruments issued by Osirium are recognised at fair
value on initial recognition net of transaction costs.
Taxation
The tax currently payable is based on taxable profit for the
year. Taxable profit differs from net profit as reported in the
income statement because it excludes items of income or expense
that are taxable or deductible in other years and it further
excludes items that are never taxable or deductible. Osirium's
liability for current tax is calculated using tax rates that have
been enacted or substantively enacted by the dates of the
Statements of Financial Position.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial information and the corresponding tax bases used
in the computation of the taxable profit, and is accounted for
using the balance sheet liability method. Deferred tax liabilities
are generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that is probable
that taxable profits will be available against which is deductible
temporary differences can be utilised.
Such assets and liabilities are not recognised if the temporary
difference arises from the initial recognition of goodwill or from
the initial recognition (other than in a business combination) of
other assets and liabilities in a transaction that affects neither
the taxable profit not the accounting profit.
The carrying of deferred tax assets is reviewed at each
statement of financial position date and reduced to the extent that
it is no longer probable that sufficient taxable profits will be
available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to
apply in the year when the liability is settled or the asset is
realised based on tax laws and rates that have been enacted at the
Statement of Financial Position date. Deferred tax is charged or
credited in the Statement of Comprehensive Income, except when it
relates to items charged or credited in other comprehensive income,
in which case the deferred tax is also dealt with in other
comprehensive income.
Deferred tax assets and liabilities are offset when it is a
legally enforceable right to set off the current tax assets against
current tax liabilities and when they relate to income taxes levied
by the same taxation authority and Osirium intends to settle its
current tax assets and liabilities on a net basis.
Property, Plant and Equipment
Plant and equipment are measured at cost less accumulated
depreciation and accumulated impairment losses. Depreciation is
provided at the following annual rates in order to write off each
asset over its estimated useful life.
Fixtures and fittings - 25% on cost Computer equipment - 33% on
cost
Osirium has elected not to recognise a right-of-use asset and
corresponding lease liability for short-term leases with terms of
12 months or less and leases of low-value assets. Lease payments on
these assets are expensed to profit or loss as incurred.
Internally-generated Development Intangible Assets
An internally-generated development intangible asset arising
from Osirium's product development is recognised if, and only if,
Osirium can demonstrate all of the following:
-- The technical feasibility of completing the intangible asset
so that it will be available for use of sale.
-- Its intention to complete the intangible asset and use or sell it.
-- Its ability to use or sell the intangible asset.
-- How the intangible asset will generate probable future economic benefits.
-- The availability of adequate technical, financial and other
resources to complete the development and to use or
-- sell the intangible asset.
-- Its ability to measure reliably the expenditure attributable
to the intangible asset during its development.
Internally-generated development intangible assets are amortised
on a straight-line basis over their useful lives. Amortisation
commences in the financial year of capitalisation. Where no
internally-generated intangible asset can be recognised,
development expenditure is recognised as an expense in the year in
which it is incurred. The amortisation cost is recognised as part
of administrative expenses in the statement of comprehensive
income.
Development costs - 20% per annum, straight line
Impairment of Tangible and Intangible Assets
At each statement of financial position date, Osirium reviews
the carrying amounts of its assets to determine whether there is
any indication that those assets have suffered an impairment loss.
If any such indication exists, the recoverable amount of the asset
is estimated in order to determine the extent of the impairment
loss (if any). Where the asset does not generate cash flows that
are independent from other assets, Osirium estimates the
recoverable amount of the cash-generating unit to which the asset
belongs. An intangible asset with an indefinite useful life is
tested for impairment at least annually and whenever there is an
indication that the asset may be impaired.
The recoverable amount is the higher of fair value less costs to
sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset for
which the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an asset (or cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised as an expense
immediately, unless the relevant asset is carried at a revalued
amount, in which case the impairment loss is treated as a
revaluation decrease.
Where an impairment loss subsequently reverses, the carrying
amount of the asset (or cash-generating unit) is increased to the
revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised
for the asset (or cash-generating unit) in prior years. A reversal
of an impairment loss is recognised immediately in profit or loss,
unless the relevant asset is carried at a revalued amount, in which
case the reversal of the impairment loss is treated as a
revaluation increase.
Right of Use Assets
A right-of-use asset is recognised at the commencement date of a
lease. The right-of-use asset is measured at cost, which comprises
the initial amount of the lease liability, adjusted for, as
applicable, any lease payments made at or before the commencement
date net of any lease incentives received, any initial direct costs
incurred, and, except where included in the cost of inventories, an
estimate of costs expected to be incurred for dismantling and
removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis
over the unexpired period of the lease or the estimated useful life
of the asset, whichever is the shorter. Where Osirium expects to
obtain ownership of the leased asset at the end of the lease term,
the depreciation is over its estimated useful life. Right-of use
assets are subject to impairment or adjusted for any remeasurement
of lease liabilities.
Lease Liability
The lease liability is initially measured at the present value
of the lease payments during the lease term discounted using the
interest rate implicit in the lease, or the incremental borrowing
rate if the interest rate implicit in the lease cannot be readily
determined. The weighted average lessee's incremental borrowing
rate applied to the lease liabilities on 1 January 2019 was 7.5%.
The lease term is the non-cancellable period of the lease plus
extension periods that the Group is reasonably certain to exercise
and termination periods that the Group is reasonably certain not to
exercise.
Leases are cancellable when each party has the right to
terminate the lease without permission of the other party or
incurring more than an insignificant penalty. The lease term
includes any rent-free periods.
Subsequent measurement of the lease liability
The lease liability is subsequently increased for a constant
periodic rate of interest on the remaining balance of the lease
liability and reduced for lease payments.
Interest on the lease liability is recognised in profit or loss,
unless interest is directly attributable to qualifying assets, in
which case it is capitalised in accordance with the Group's policy
on borrowing costs.
Employee Benefit Costs
Osirium operates a defined contribution pension scheme.
Contributions payable to Osirium's pension scheme are charged to
the Statement of Comprehensive Income in the year to which they
relate.
Share-based Payments
Osirium issues equity-settled share-based payments to certain
employees and others under which Osirium receives services as
consideration for equity instruments (options) in Osirium.
Equity-settled share-based payments are measured at fair value at
the date of grant by reference to the fair value of the equity
instruments granted. The fair value determined at the grant date of
equity-settled share-based payments is recognised as an expense in
Osirium's Statement of Comprehensive Income over the vesting period
on a straight-line basis, based on Osirium's estimate of the number
of instruments that will eventually vest with a corresponding
adjustment to equity. The expected life used in the valuation is
adjusted, based on management's best estimate, for the effect of
non-transferability, exercise restrictions, and behavioural
considerations.
Non-vesting and market vesting conditions are taken into account
when estimating the fair value of the options at grant date.
Service and non-market vesting conditions are taken into account by
adjusting the number of options expected to vest at each reporting
date. When the options are exercised Osirium issues new shares. The
proceeds received net of any directly attributable transaction
costs are credited to share capital (nominal value) and share
premium.
Segment Reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision maker.
The chief operating decision maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the Board of Directors that makes
strategic decisions.
Financial Risk Factors
Osirium's activities expose it to a variety of financial risks:
market risk, credit risk and liquidity risk. Osirium's overall risk
management programme focuses on the unpredictability of financial
markets and seeks to minimise potential adverse effects on
Osirium's financial performance. Risk management is carried out by
management under policies approved by the directors. The directors
provide principals for overall risk management, as well as policies
covering specific areas, such as, interest rate risk,
non-derivative financial instruments and investment of excess
liquidity.
Earnings per Share
Basic earnings per share is calculated by dividing the profit
attributable to the owners of Osirium Technologies plc, excluding
any costs of servicing equity other than ordinary shares, by the
weighted average number of ordinary shares outstanding during the
financial year, adjusted for bonus elements in ordinary shares
issued during the financial year.
Critical Accounting Estimates and Judgements
The preparation of the Financial Statements requires management
to make judgements and estimates that affect the reported amounts
of assets and liabilities at each statement of financial position
date and the reported amounts of revenue during the reporting
periods. Actual results could differ from these estimates. The
directors consider the key areas to be in respect of intangible
assets and impairment of intercompany receivables. Information
about such judgements and estimations are contained in individual
accounting policies (intangible assets (Note 9), and trade and
other receivables (Note 13).
IFRS 16 Leases
Right-of-use assets and corresponding lease liabilities are
recognised in the statements of financial position. Straight line
operating lease expense recognition is replaced with a depreciation
charge for the right-of-us assets (included in operating costs) and
an interest expense on the recognised lease liabilities (included
within finance costs). For classification within the statement of
cash flows, the interest portion is disclosed in operating
activities and the principal portion of the lease payments are
separately disclosed in financing activities.
The Group has used the following practical expedients permitted
by the standard:
-- Accounting for leases with a remaining lease term of 12
months as at 1 January 2020 as short-term leases;
-- Excluding any initial direct costs from the measurement of right-of-use assets;
-- Using hindsight in determining the lease term when the
contract contains options to extend or terminate the lease; and
-- The value of the right of use asset at the transition date
has been assessed as equaling the lease liability at that date.
3. Segment Information and Revenue
Management information is provided to the chief operating
decision maker as a whole. As a result Osirium is a single
operating segment. All revenue is derived from the sale of software
subscriptions and consultancy services to the customers in the
UK.
The Group had one (2019: two) customer that represented over 10%
of total revenue. The total revenue for this customer was
GBP248,000 (2019: GBP385,990) which represents 17% (2019: 33%) of
the Group's total income for the year:
Year ended 31 December
2020 GBP %
Customer 1 248,000 17%
-------- ----
Total 248,000 17%
Year ended 31 December
2019 GBP %
Customer 1 124,849 11%
Customer 2 261,141 22%
-------- ----
385,990 33%
4. Trade and Other Receivables
Group
As at As at
31-Dec-20 31-Dec-19
GBP GBP
Current:
Trade receivables 105,553 206,998
Other receivables 591,436 565,535
Prepayments 121,456 209,836
Amounts due from group
undertakings - -
---------- ----------
818,445 982,369
========== ==========
As at 31 December 2020 Osirium had no material receivables past
due but not impaired (31 December 2019: GBPnil).
The directors have made an assessment on the amounts due from
group undertakings under IFRS 9 for impairment of financial assets.
As Osirium is loss making and the likelihood is that a proportion
of the amount due from the group undertaking will not be received,
the directors have deemed it prudent to account for an impairment
of GBP1,916,126 with this being looked at every 12 months on a
continuous basis.
The Directors consider that the carrying value of trade and
other receivables approximates their fair value.
Allowance for expected credit losses
The group has assessed the expected credit losses for the year
ended 31 December 2020 and concluded that there is no material
impairment against trade receivables.
5. Cash and Cash Equivalents
Group
As at As at
31-Dec-20 31-Dec-19
GBP GBP
Cash and cash equivalents 1,482,376 3,854,922
========== ==========
The Directors consider that the carrying value of cash and cash
equivalents approximates their fair value.
6. Annual Report and Accounts and Annual General Meeting (AGM)
The Annual Report and Accounts for the year ended 31 December
2020, which incorporates Notice of the Company's 2021 AGM, will be
available to download from the Company's website at
www.osirium.com/investors later today, Friday 11 June 2021 and sent
to shareholders in compliance with AIM Rule 20.
The Annual General Meeting is scheduled to take place at 11am on
22 July 2021 at the Company's offices at Theale Court, 11-13 High
Street, Theale, RG7 5AH. It is currently envisaged that the UK
Government's coronavirus restrictions will cease to have applied so
that the AGM may be run as an open meeting. However, given the
current uncertainty, shareholders are encouraged not to attend the
Company's office for the meeting in person but instead to attend
the meeting via a conference call. Shareholders may register for
the call by completing the investor contact form at
https://osirium.com/investors/investor-contact/ following which
relevant access details will be sent via email. Depending on the
then current coronavirus restrictions, shareholders or others
attempting to attend the meeting in person may not be permitted
entry and the Company reserves the right to put in place
appropriate COVID-19 security measures.
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June 11, 2021 02:00 ET (06:00 GMT)
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