TIDMTHRU
RNS Number : 4477U
Thruvision Group PLC
25 November 2019
25 November 2019
Thruvision Group plc
("Thruvision" or the "Group")
Interim Results for the six months ended 30 September 2019
Thruvision (AIM: THRU) the specialist provider of
people-screening technology to the international security market
announces its unaudited results for the six months ended 30
September 2019.
Key Highlights
-- Revenues for the six months ended 30 September 2019 grew 53%
to GBP4.8 million (H1 2018: GBP3.2 million)
-- Operating loss before tax reduced to GBP0.4 million (H1 2018: GBP0.8 million)
-- Expanded product range with new higher performance units,
targeted at specific market segments, gaining traction
-- A total of 64 Thruvision units shipped in the first half
across our four target markets (H1 2018: 60 units) with product mix
shifting towards higher performance units
-- Broad-based success across our market segments, highlights include:
o Strong progress in the strategically important US market with
US Customs and Border Protection and Los Angeles World Airports
added as new customers;
o Morrisons and Sports Direct became our ninth and tenth
household name Loss Prevention customers;
o Macau Customs was added as our seventh international Customs
agency customer, with Hong Kong Customs purchasing further
units;
o Ongoing strategic progress made with US Transportation
Security Administration.
-- Cash at 30 September 2019 of GBP8.7 million, with cash at 22
November 2019 of GBP10.0 million
Summary of Results
30-Sep-19 30-Sep-18 FY 2019
---------- ---------- --------
Unaudited Unaudited Audited
---------- ---------- --------
Number of units sold 64 60 109
---------- ---------- --------
GBP'000 GBP'000 GBP'000
---------- ---------- --------
Revenue 4,835 3,169 5,981
---------- ---------- --------
Gross Profit 2,314 1,243 2,327
---------- ---------- --------
Gross Margin 48% 39% 39%
---------- ---------- --------
Overheads (2,740) (2,083) (4,440)
---------- ---------- --------
Operating (loss) (426) (840) (2,113)
---------- ---------- --------
Commenting on the results, Colin Evans, Chief Executive of
Thruvision, said:
"We are pleased to report good commercial momentum in the first
half of this year. We continued to win new customer orders,
especially in the US, demonstrating growing awareness of our
technology and its competitive advantages in providing fast and
effective security screening of people. With continued demand from
existing customers and further strengthening of our brand
internationally, we remain confident about the company's prospects
for the future."
For further information please contact:
Thruvision Group plc +44 (0)1235 425 400
Tom Black, Executive Chairman
Colin Evans, Chief Executive
Investec Bank plc +44 (0)20 7597 5970
James Rudd / Sebastian Lawrence / Patrick Robb
FTI Consulting LLP +44 (0)20 3727 1000
Matt Dixon / Harry Staight / Shamma Kelly
About Thruvision
Thruvision is the leading provider of next-generation
people-screening technology. Using patented passive terahertz
technology, Thruvision is uniquely capable of detecting metallic
and non-metallic threats including weapons, explosives and
contraband items that are hidden under clothing, at distances up to
10m. Addressing the growing need for fast, safe and effective
security, Thruvision has been vetted and approved by the US
Transportation Security Administration for surface transportation.
Operationally deployed in 20 countries around the world, Thruvision
is used for a range of applications including mass transit and
aviation security, facilities and public area protection, customs
and border control and supply chain loss prevention. The company
has offices near Oxford, in Washington DC, and in Sydney.
www.thruvision.com
Chairman's Statement
Since April, we have made further significant progress in
establishing Thruvision as a leading vendor of people security
screening technology. Commercial momentum has been maintained, new
flagship customers, particularly in the US, have been added, and
repeat orders from existing customers received.
Revenues increased by 53% to GBP4.8 million (H1 FY19: GBP3.2
million), based on delivering 64 units to customers (H1 FY19: 60),
of which a greater proportion in this period were higher
performance units helping to deliver stronger revenues and gross
margins than in prior years. This resulted in a halving of the
Operating loss to GBP0.4 million (H1 FY19: GBP0.8 million). Cash at
30 September 2019 was GBP8.7 million (31 March 2019: GBP9.4
million) and remained healthy at GBP10.0 million as of 22 November
2019.
In the US, we secured important new customer sales to US Customs
and Border Protection (CBP) and Los Angeles International Airport,
as well as an important follow-on order from the US State
Department's Bureau of International Narcotics and Law Enforcement
(INL). Taken together, these wins with internationally respected US
organisations have further strengthened our brand and are helping
to drive increasing levels of awareness of our technology.
We also added two new household names, Morrisons and Sports
Direct, to our Loss Prevention customer list. Internationally, we
saw good momentum in our Customs market, with further purchasing
from Hong Kong Customs and an initial order from Macau Customs.
Working closely under contract to the US Transportation Security
Administration (TSA), we made good progress on a range of R&D
initiatives which should, in due course, allow us to compete in the
air passenger screening market.
Outlook
International recognition of the Thruvision brand continues to
grow and significant progress is being made across the US market,
including with the strategically important US Federal Government.
We continue to make encouraging progress with next generation
products and have made important progress entering the large
aviation security market. New flagship customer wins, further
purchasing from existing customers, and a growing number of
strategic opportunities now in process means the Board remains
confident about the prospects for the business, although precise
timings remain hard to forecast.
Strategic update and business review
Thruvision addresses the growing international need to quickly
and comprehensively security screen individuals for either weapons
or contraband that might be concealed in their clothing, in a safe
and respectful manner. As the leading provider of "Detection at
Range" security solutions as defined by the TSA, Thruvision
addresses shortcomings in existing technology types, namely metal
detectors and airport body scanners.
Based on progress made in the period, we have added a fifth
market segment, Aviation, to our go-to-market strategy. This is
based on the strong interest being shown by US airports looking for
solutions to screen their employees and by ongoing work with TSA on
airline passenger screening. Progress in this area, along with our
four other market segments is as follows:
-- Aviation - screening employees and passengers in airports
We are seeing growing interest in using Thruvision to improve
the daily security screening of the many thousands of employees who
work in security-controlled areas. Los Angeles World Airports
(including LAX) became our second customer in this area and we are
very actively engaged, under TSA auspices, on trials with other
"Category X" (i.e. the largest and busiest) airports in the US.
Following TSA's contract award to develop a new AI-based image
processing software interface, we also remain on track to
participate in upcoming air passenger screening trials.
-- Customs - screening individuals at national "ports of entry" for contraband
Sales momentum was particularly strong in this market segment.
Thruvision's combined strengths of safe and non-intrusive
technology, along with an ability to reliably detect non-metallic
items like drugs and bank notes, is helping to cement the Group's
leading position in this international market. During the period,
Macau Customs and US Customs and Border Protection became our
seventh and eighth customers respectively, while Hong Kong Customs
and the US State Department's Bureau of International Narcotics
& Law Enforcement Affairs both purchased additional units.
-- Loss Prevention - screening staff for items being stolen from distribution centres (DCs)
Recent global industry research(1) shows staff theft now
accounts for around 0.4% of revenue in businesses that use large
DCs and Thruvision's own market research(2) has found that serious
crime gangs are now routinely operating in retail DCs. These trends
and the rapid return on investment offered by Thruvision, help
explain why Morrisons has purchased Thruvision cameras as part of
its group-wide security improvement programme and why Sports Direct
has become our tenth Loss Prevention customer, along with other
household names including Next, Matalan and JD Sports. An
increasing number of retailers and logistics companies, in the UK
and Europe, are now expressing interest in our capability.
-- Entrance Security - screening visitors for weapons at entrances to high security buildings
Steady progress has been made in this area with a new
high-profile win to equip a National Head of State Residence in
Asia. However, progress has been slower in the 'traditional'
entrance security market where we are having to break down
reluctance to change from the inexpensive 'tried and tested'
security guard with metal detector mindset.
-- Surface Transportation - screening individuals for weapons in
railways, subways and other public areas
We have supported a number of operational trials during the
period. Most notably, under contract to the UK's Home Office, we
worked with the British Transport Police to trial Thruvision in the
London Underground as part of its knife crime reduction initiative.
Public reaction was reassuringly positive and ongoing activities
are planned.
(1) Sensormatic Global Shrink Index 2018
(2) Retail Risk Distribution Centre Survey
Product Range Expansion and R&D
The modular design of our Thruvision TAC product, which was
developed with and approved by TSA in 2018, has allowed us to
accelerate new product releases. The first of these, our new loss
prevention product, the Thruvision LPC, was launched in the summer.
It offers higher performance loss prevention functionality for
retail customers needing to reliably detect smaller, high-value
items like stolen watches, or "wearable" electronics. We also
launched the more affordable Thruvision TS4-L aimed at detecting
larger items like stolen footwear or grocery items.
Since period end, we successfully delivered our new military
specification, outdoor screening camera, the Thruvision MFC.
Developed under contract to TSA, this new flagship product
development has allowed us to make a number of further improvements
in hardware performance. These improvements, together with further
progress made with our AI-based image processing software, will
enable us to launch several new products, each tailored to specific
market segments, in the coming months. We have updated our patent
portfolio to reflect these most recent developments.
People
Overall headcount increased from 34 (at 31 March 2019) to 37 (at
30 September 2019) as the Group invested in further pre-sales and
engineering resource to support increased demand. Voluntary staff
attrition was nil.
THRUVISION GROUP PLC
Half year report (continued)
for the six months ended 30 September 2019
Financial review
Financial results
During the six months ended 30 September 2019, revenues
increased to GBP4.8 million (H1 2019: GBP3.2 million, FY 2019
GBP6.0 million), with 64 Thruvision units sold (H1 2019: 60 units,
FY 2019: 109 units) resulting in a reduced operating loss of GBP0.4
million (H1 2019: GBP0.8) million, FY 2019: GBP2.1 million).
The gross margin increased to 48% (H1 2019: 39%, FY 2019: 39%)
principally as a result of sales of a greater proportion of new
higher performance product during the period.
The operating loss of GBP0.4 million was achieved despite
further investment in our sales and engineering activities to
support future revenue expansion.
Key Performance Indicators ("KPIs")
The Group considers the following to be the relevant KPIs which
track the trading performance and position of the business.
Financial KPIs
30-Sep-19 30-Sep-18 FY 2019
GBP'000 GBP'000 GBP'000
-------------------------- ---------- ---------- --------
Revenue 4,835 3,169 5,981
-------------------------- ---------- ---------- --------
Average revenue per unit 73 52 54
-------------------------- ---------- ---------- --------
Gross Profit 2,314 1,243 2,327
-------------------------- ---------- ---------- --------
Gross Margin 48% 39% 39%
-------------------------- ---------- ---------- --------
Overheads * (2,724) (2,030) (4,247)
-------------------------- ---------- ---------- --------
Operating (loss) (426) (840) (2,108)
-------------------------- ---------- ---------- --------
Non-financial KPIs
30-Sep-19 30-Sep-18 FY 2019
---------------------------------- ---------- ---------- --------
No of units sold 64 60 109
Number of staff at end of period 37 27 34
---------------------------------- ---------- ---------- --------
* Overheads exclude the share based payment charge as well as
foreign exchange gains and losses, and the share buyback costs
incurred last year. See Overheads table on page 7 for further
detail
THRUVISION GROUP PLC
Half year report (continued)
for the six months ended 30 September 2019
Revenue
Thruvision revenues increased to GBP4.8 million in the six
months to 30 September 2019 (H1 2019: GBP3.2 million, FY 2019
GBP6.0 million). Revenues from unit sales contributed GBP4.7
million (H1 2019: GBP3.1 million, FY 2019 GBP5.9 million), and
development revenue from the US Transport Security Administration
of GBP140k (H1 2019: GBP47k, FY 2019 GBP80k). The growth in
revenues over the prior year reflects strong growth in organic unit
sales in our main markets, with unit volumes increasing to 64 (H1
2019: 60 units, FY 2019: 109 units).
Revenue 6 months 6 months 12 months
30-Sep-19 30-Sep-18 FY 2019
GBP'000 GBP'000 GBP'000
------------- --------- --------- ---------
Units 4,695 3,122 5,901
Development 140 47 80
------------- --------- --------- ---------
Total 4,835 3,169 5,981
The principal growth driver for the business is unit sales and,
while we expect to continue to be awarded customer funded
development contracts, we do not expect this to form a material
proportion of revenues in the future.
Gross Profit Margin
Gross margin increased to 48% in the year (H1 2019: 39%, FY
2019: 39%). The gross margin attributable to unit revenues
increased from 34% (FY 2019) to 50% for the six months ending 30
September 2019 principally as a result of sales of a greater
proportion of higher performance product in the period.
Gross Margin 6 months 6 months 12 months
30-Sep-19 30-Sep-18 FY 2019
GBP'000 GBP'000 GBP'000
-------------------------- --------- --------- ---------
Unit Revenue 4,695 3,122 5,901
Unit Gross Profit 2,343 1,225 2,337
-------------------------- --------- --------- ---------
Gross margin % 50% 39% 40%
Development Revenue 140 47 80
Development Gross Profit (29) 18 (10)
-------------------------- --------- --------- ---------
Gross margin % (21%) 38% (13%)
Overall Revenue 4,835 3,169 5,981
Overall Gross Profit 2,314 1,243 2,327
-------------------------- --------- --------- ---------
Overall Gross margin
% 48% 39% 39%
-------------------------- --------- --------- ---------
THRUVISION GROUP PLC
Half year report (continued)
for the six months ended 30 September 2019
Administrative expenses
Overheads in the period increased by 34% to GBP2.7 million
compared to the corresponding period in FY19 as the business
invested to accommodate growth. Sales and marketing expenditure
increased by GBP0.2 million to deliver strategic investment in our
US market, with this additional investment made to leverage on our
"flagship" customer deployments in this key market and was used to
increase direct marketing and provide enhanced pre and post-sales
capability. Engineering costs include Manufacturing and R&D
costs which have increased as a result of focussing on increased
production capacity and strengthening our software capability.
Administrative expenses below include allocated depreciation and
amortisation of GBP227k in the six months ended 30 September 2019
(H1 2019: GBP78k, FY 2019: GBP181k). The allocation is based upon
cost centre asset usage.
Administrative expenses 6 months 6 months 12 months
30-Sep-19 30-Sep-18 FY 2019
GBP'000 GBP'000 GBP'000
----------------------------- --------- --------- ---------
Engineering 818 529 1,144
Sales and marketing 826 603 1,270
Property and administration 381 285 650
Management 349 312 639
PLC costs 350 301 544
----------------------------- --------- --------- ---------
Total administrative
expenses 2,724 2,030 4,247
----------------------------- --------- --------- ---------
Foreign exchange gains (138) (131) (133)
Share-based payment charge 154 68 207
Share buyback costs - 116 119
---------------------------- ----- ----- -----
Total overheads 2,740 2,083 4,470
---------------------------- ----- ----- -----
Loss from continuing operations
Losses from continuing operations in the period were GBP0.4
million (H1 2019: GBP0.8 million, FY 2019: GBP2.1 million)
including share based payments. The reduction in loss was
principally driven by strong sales growth, offset by an overall
overhead increase as detailed above.
Thruvision continues to invest in sales and marketing
activities, developing new markets and segments, whilst further
investing in our engineering and manufacturing capacity including
R&D. Thruvision generated foreign exchange gains of GBP0.1
million during the period (H1 2019: GBP0.1 million, FY 2019 GBP0.1
million), as a result of the movement in the GBP:USD exchange
rate.
Cash Flows
Cash and cash equivalents at 30 September 2019 were GBP8.7
million (H1 2019: GBP12.6 million, FY 2019: GBP9.4 million), with
the principal movement in the period being an increase in trade and
other receivables of GBP0.6 million, accounting for the majority of
the decrease in cash over the six month period ended 30 September
2019.
THRUVISION GROUP PLC
Consolidated income statement
for the six months ended 30 September 2019
6 months 6 months Year ended
ended ended
30 September 30 September 31 March
2019 2018 2019
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
---------------------------- ----- ------------- ------------- ----------------
Revenue 2 4,835 3,169 5,981
Cost of sales (2,521) (1,926) (3,654)
---------------------------- ----- ------------- ------------- ----------------
Gross profit 2,314 1,243 2,327
Administration costs (2,740) (2,083) (4,440)
Other income - 5 5
Operating loss (426) (835) (2,108)
Finance revenue 27 41 78
Finance costs (14) - (30)
---------------------------- ----- ------------- ------------- ----------------
Loss before tax (413) (794) (2,060)
Income tax 29 - 23
---------------------------- ----- ------------- ------------- ----------------
Loss for the period /
year from continuing
operations (384) (794) (2,037)
---------------------------- ----- ------------- ------------- ----------------
Discontinued operations
Profit/(loss) from discontinued
operation (net of tax) 213 (330) (233)
Loss for the period /
year (171) (1,124) (2,270)
Adjusted loss: 3
Loss before tax from continuing
operations (413) (794) (2,060)
Share-based payment 154 68 207
Share buyback costs - 116 119
Adjusted loss before
tax for the period /
year from continuing
operations (259) (610) (1,734)
----- ------------- -------------
THRUVISION GROUP PLC
Consolidated statement of comprehensive income
for the six months ended 30 September 2019
6 months 6 months Year ended
ended ended
30 September 30 September 31 March 2019
2019 2018
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
--------------------------------------- ------------- ------------- --------------
Loss for the period / year
from continuing operations (384) (794) (2,037)
Profit/(loss) for the period
/ year from discontinued operations 213 (330) (233)
---------------------------------------- ------------- ------------- --------------
Loss for the period /
year attributable to
owners of the parent (171) (1,124) (2,270)
Other comprehensive (loss)/income
from continuing operations
---------------------------------------- ------------- ------------- --------------
Other comprehensive income
that may be
subsequently reclassified
to profit and loss:
Exchange differences
on retranslation
of foreign operations 4 (5) 6
Total comprehensive loss attributable
to owners of the parent (167) (1,129) (2,264)
---------------------------------------- ------------- ------------- --------------
THRUVISION GROUP PLC
Consolidated statement of financial position
at 30 September 2019
30 September 30 September 31 March 2019
2019 2018
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
------------------------------ ----- ------------- ------------- --------------
Assets
Non-current assets
Property, plant and
equipment 1,212 387 760
Other intangible assets 6 8 7
------------------------------ ----- ------------- ------------- --------------
1,218 395 767
Current assets
Inventories 3,262 2,237 3,349
Trade and other receivables 3,311 1,496 2,690
Current tax recoverable 91 90 114
Cash and cash equivalents 8,657 12,636 9,375
------------------------------ ----- ------------- ------------- --------------
15,321 16,459 15,528
------------------------------ ----- ------------- ------------- --------------
Total assets 16,539 16,854 16,295
Equity and liabilities
Attributable to owners
of the parent
Equity share capital 6 1,455 1,618 1,618
Capital redemption 163 - -
reserve
Translation reserve 18 3 14
Retained earnings 12,428 13,452 12,445
------------------------------ ----- ------------- ------------- --------------
Total equity 14,064 15,073 14,077
Non-current liabilities
Provisions 38 38 38
Lease liabilities 373 - -
------------------------------ ----- ------------- ------------- --------------
411 38 38
------------------------------ ----- ------------- ------------- --------------
Current liabilities
Trade and other payables 1,915 1,743 2,180
Lease liabilities 149 - -
------------------------------ ----- ------------- ------------- --------------
2,064 1,743 2,180
------------------------------ ----- ------------- ------------- --------------
Total liabilities 2,475 1,781 2,218
------------------------------ ----- ------------- ------------- --------------
Total equity and liabilities 16,539 16,854 16,295
------------------------------ ----- ------------- ------------- --------------
THRUVISION GROUP PLC
Consolidated statement of changes in equity
for the six months ended 30 September 2019
Ordinary Share Capital Translation Retained Total
share premium redemption reserve earnings equity
capital account reserve GBP'000 GBP'000 GBP'000
GBP'000 GBP'000 GBP'000
-------------------------- --------- ---------- ------------ --------------- ------------ -----------------
At 31 March 2018 1,814 109,078 4,786 8 (96,207) 19,479
Capital reduction - (109,078) (4,786) - 113,864 -
Share buyback (196) - - - (3,149) (3,345)
Share-based payment
credit - - - - 68 68
-------------------------- --------- ---------- ------------ --------------- ------------ -----------------
Transactions with
shareholders (196) (109,078) (4,786) - 110,783 (3,277)
Loss for the period - - - - (1,124) (1,124)
Other comprehensive
income - - - (5) - (5)
-------------------------- --------- ---------- ------------ --------------- ------------ -----------------
At 30 September 2018 1,618 - - 3 13,452 15,073
-------------------------- --------- ---------- ------------ --------------- ------------ -----------------
Share-based payment
credit - - - - 139 139
-------------------------- --------- ---------- ------------ --------------- ------------ -----------------
Transactions with
shareholders - - - - 139 139
Loss for the period - - - - (1,146) (1,146)
Other comprehensive
income - - - 11 - 11
-------------------------- --------- ---------- ------------ --------------- ------------ -----------------
Total comprehensive
loss - - - 11 (1,146) (1,135)
-------------------------- --------- ---------- ------------ --------------- ------------ -----------------
At 31 March 2019 1,618 - - 14 12,445 14,077
-------------------------- --------- ---------- ------------ --------------- ------------ -----------------
Cancellation of deferred
shares (163) - 163 - - -
Share-based payment
credit - - - - 154 154
-------------------------- --------- ---------- ------------ --------------- ------------ -----------------
Transactions with
shareholders (163) - 163 - 154 154
-------------------------- --------- ---------- ------------ --------------- ------------ -----------------
Loss for the period - - - - (171) (171)
Other comprehensive
income - - - 4 - 4
-------------------------- --------- ---------- ------------ --------------- ------------ -----------------
Total comprehensive
loss - - - 4 (171) (167)
-------------------------- --------- ---------- ------------ --------------- ------------ -----------------
At 30 September 2019 1,455 - 163 18 12,428 14,064
-------------------------- --------- ---------- ------------ --------------- ------------ -----------------
THRUVISION GROUP PLC
Consolidated statement of cash flows
for the six months ended 30 September 2019
6 months 6 months Year ended
ended ended
30 September 30 September 31 March
2019 2018 2019
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
---------------------------------------- ------------- ------------- -----------
Operating activities
Loss before tax from continuing
operations (413) (794) (2,060)
Profit/(loss) before tax from
discontinued operations 213 (330) (233)
---------------------------------------- ------------- ------------- -----------
Loss before tax (200) (1,124) (2,293)
Non-cash adjustment to reconcile loss before
tax to net cash flows
Depreciation of property,
plant and equipment 227 77 179
Amortisation of intangible
assets 1 1 2
Share-based payment transaction
expense 154 68 207
Unrealised (losses) / gains
on foreign exchange (8) 6 (25)
Disposals of property, plant
& equipment 37 29 28
Finance income (27) (41) (78)
Finance costs 14 - -
Working capital adjustments:
(Increase) in trade and other
receivables (779) (267) (1,724)
Decrease / (increase) in inventories 87 (424) (1,536)
(Decrease) / increase in trade
and other payables (153) 208 545
(Decrease) / Increase in deferred
revenue (20) 82 156
Decrease in provisions - (27) (27)
---------------------------------------- ------------- ------------- -----------
Cash utilised in operations (667) (1,412) (4,536)
Tax received 23 - -
---------------------------------------- ------------- ------------- -----------
Net cash flow from operating
activities (644) (1,412) (4,536)
---------------------------------------- ------------- ------------- -----------
Investing activities
Purchase of property, plant &
equipment (230) (213) (579)
Expenditure on intangible assets - (7) (7)
Interest received 27 41 78
Deferred consideration from disposal
of Video Business 209 - 182
Net cash flow from investing
activities 6 (179) (326)
---------------------------------------- ------------- ------------- -----------
Financing activities
Repayments of leasing liabilities (86) - -
Share buyback - reduction in
share capital - (3,345) (3,345)
Net cash flow from financing
activities (86) (3,345) (3,345)
---------------------------------------- ------------- ------------- -----------
Net (decrease) in cash and cash
equivalents (724) (4,936) (8,207)
Cash and cash equivalents at
beginning of period / year 9,375 17,587 17,587
Effect of foreign exchange rate
changes on cash and cash equivalents 6 (15) (5)
---------------------------------------- ------------- ------------- -----------
Cash and cash equivalents at
end of period / year 8,657 12,636 9,375
---------------------------------------- ------------- ------------- -----------
THRUVISION GROUP PLC
Notes to the financial statements
for the six months ended 30 September 2019
1. Accounting policies
Basis of preparation
The consolidated interim financial statements include those of
Thruvision Group plc and all of its subsidiary undertakings
(together "the Group") drawn up at 30 September 2019, and have been
prepared in accordance with International Accounting Standard 34,
"Interim Financial Reporting" ("IAS 34") as adopted for use in the
European Union ("EU"). The consolidated interim financial
statements have been prepared using accounting policies and methods
of computation consistent with those applied in the consolidated
financial statements for the period ended 31 March 2019, with the
exception of IFRS 16 Leases as below.
The Group is a public limited company incorporated and domiciled
in England & Wales and whose shares are quoted on AIM, a market
operated by The London Stock Exchange.
Accounting policies
The annual consolidated financial statements of the Group are
prepared on the basis of International Financial Reporting
Standards ("IFRS"). The consolidated interim financial statements
are presented on a condensed basis as permitted by IAS 34 and
therefore do not include all the disclosures that would otherwise
be required in a full set of financial statements and should be
read in conjunction with the most recent Annual Report and Accounts
which were approved by the Board of Directors on 21 June 2019 and
have been filed with Companies House. The condensed interim
financial statements do not constitute statutory accounts as
defined in Section 435 of the Companies Act 2006 and are unaudited
for all periods presented. The financial information for the
12-month period ended 31 March 2019 is extracted from the financial
statements for that period. The auditors' report on those financial
statements was unqualified and did not contain an emphasis of
matter reference and did not contain a statement under section
498(2) or (3) of the Companies Act 2006.
The half year results for the current period to 30 September
2019 have not been audited or reviewed by auditors pursuant to the
Auditing Practices Board guidance of Review of Interim Financial
Information.
Adoption of new and revised International Financial Reporting
Standards
The Group's accounting policies have been prepared in accordance
with IFRS effective as at its reporting date of 30 September
2019.
Standards Issued
The standards and interpretations that are issued up to the date
of issuance of the Group's interim financial statements are
disclosed below. The Group has adopted these standards, if
applicable, when these became effective. Further details are
disclosed in the 31 March 2019 Annual Report available on the
Group's website: thruvision.com
Accounting developments - new standards, amendments and
interpretations issued and adopted
IFRS 16 replaces IAS 17 'Leases' and three related
interpretations. Leases will be recorded in the statement of
financial position in the form of a right-of-use asset and a lease
liability. IFRS 16 was mandatory for annual reporting periods
beginning on or after 1 January 2019, and accordingly the Group has
elected to apply IFRS 16 on 1 April 2019.
The impact of adoption of IFRS 16 has mainly affected the
following:
-- Management has performed a full review of all lease contracts
on the Group and classified and valued each leasing obligation in
line with the guidance of IFRS 16
-- The new Standard has been applied retrospectively without
restatement using the modified retrospective approach, effective
from 1 April 2019
Further details of the adoption of IFRS 16 are included in note
5.
1. Accounting policies (continued)
Going concern
The Group's loss before tax from continuing operations for the
period was GBP0.4 million (H1 2019: GBP0.8 million, FY 2019 GBP2.0
million). As at 30 September 2019 the Group had net current assets
of GBP12.9 million (H1 2019: GBP14.7 million, FY 2019: GBP13.3
million) and net cash reserves of GBP8.7 million (H1 2019: GBP12.6
million, FY 2019: GBP9.4 million).
The Board has reviewed cash flow forecasts for the period up to
and including 31 December 2020. These forecasts and projections
take into account reasonably possible changes in trading
performance and show that the Group will be able to operate within
the level of current funding resources. The Directors therefore
believe there is sufficient cash available to the Group to manage
through these requirements.
As with all businesses, there are particular times of the year
where the Group's working capital requirements are at their peak.
However, the Group is well placed to manage business risk
effectively and the Board reviews the Group's performance against
budgets and forecasts on a regular basis to ensure action is taken
where needed.
The Directors therefore are satisfied that the Group has
adequate resources to continue operating for a period of at least
12 months from the approval of these accounts. For this reason,
they have adopted the going concern basis in preparing the
financial statements.
Financial instruments
The Group classifies financial instruments, or their component
parts, on initial recognition as a financial asset, a financial
liability or an equity instrument in accordance with the substance
of the contractual arrangement.
2. Segmental information
The directors do not split the business into segments in order
to internally analyse the business performance and as a result the
results of the business are only presented below as continuing and
discontinuing. The directors believe that allocating overheads by
department provides a suitable level of business insight. The
overhead department cost centers comprise of Engineering
(manufacturing and R&D), sales and marketing, property and
administration, Management and PLC costs, with the split of costs
as shown in the Half Year Report on page 7.
Since the disposal of the Video Business on 31 October 2017 it
has been reported as a discontinued operation. The profit shown
within discontinued operations this period is in relation to
further amounts of deferred consideration receivable as a result of
the sale of the Video Business.
In accordance with IFRS 8, the Group has derived the information
for its operating segments using the information used by the Chief
Operating Decision Maker and supplemented this with additional
analysis to assist readers of the Annual Report to better
understand the impact of the proposed divestment. The Group has
identified the Board of Directors as the Chief Operating Decision
Maker as it is responsible for the allocation of resources to
operating segments and assessing their performance.
2. Segmental information (continued)
six months ended 30 September 2019
--------
six months ended 30 September 2019
---------------------------------------
Video Business Thruvision
Discontinued Continuing Total
GBP'000 GBP'000 GBP'000
--------------------------------------- --------------------- -------------- --------
Total segment revenue - 4,835 4,835
Depreciation and amortisation - 228 228
Segmented adjusted operating profit /
(loss) 213 (272) (59)
--------------------- --------------
Share based payment charge - (154) (154)
Segment operating profit / (loss) 213 (426) (213)
--------------------- --------------
Finance income - 27 27
Finance costs - (14) (14)
--------------------------------------- --------------------- -------------- --------
Segment profit (loss) before tax 213 (413) (200)
--------------------------------------- --------------------- -------------- --------
Income tax credit - 29 29
Profit / Loss for the year 213 (384) (171)
--------------------- --------------
six months ended 30 September 2018
--------
six months ended 30 September 2018
---------------------------------------
Video Business Thruvision
Discontinued Continuing Total
GBP'000 GBP'000 GBP'000
--------------------------------------- --------------------- -------------- --------
Total segment revenue - 3,169 3,169
Depreciation and amortisation - 78 78
Segmented adjusted operating (loss) (330) (767) (1,097)
--------------------- --------------
Share based payment charge - (68) (68)
Segment operating profit / (loss) (330) (835) (1,165)
--------------------- --------------
Finance income - 41 41
Finance costs - - -
--------------------------------------- --------------------- -------------- --------
Segment (loss) before tax (330) (794) (1,124)
--------------------------------------- --------------------- -------------- --------
Income tax credit - - -
Loss for the year (330) (794) (1,124)
--------------------- --------------
2. Segmental information (continued)
Twelve months ended 31 March 2019
--------
12 months ended 31 March 2019
-------------------------------------
Video Business Thruvision
Discontinued Continuing Total
GBP'000 GBP'000 GBP'000
------------------------------------- ------------------ ------------ --------
Total segment revenue - 5,981 5,981
Depreciation and amortisation - 181 181
Segmented adjusted operating (loss) (233) (1,901) (2,134)
------------------ ------------
Share based payment charge - (207) (207)
Segment operating (loss) (233) (2,108) (2,341)
------------------ ------------
Finance income - 78 78
Finance costs - (30) (30)
------------------------------------- ------------------ ------------ --------
Segment (loss) before tax (233) (2,060) (2,293)
------------------------------------- ------------------ ------------ --------
Income tax credit - 23 23
Loss for the year (233) (2,037) (2,270)
------------------ ------------
Analysis of revenue by customer
There have been three (H1 2019: two, FY 2019: two) individually
material customers (each comprising in excess of 10% of revenue)
during the period. These customers individually represented
GBP1,878,000, GBP1,397,000 and GBP824,000 of revenue (H1 2019:
GBP1,018,000 and GBP808,000, FY 2019: GBP2,310,000 and
GBP808,000).
30 September 30 September 31 March
2019 2018 2019
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
------------------------ ------------- ------------- ------------
UK and Europe 190 504 1,338
Americas 3,692 364 975
Asia Pacific 934 2,287 3,640
Middle East and Africa 19 14 28
4,835 3,169 5,981
------------------------ ------------- ------------- ------------
The Group's non-current assets by geography are detailed
below:
30 September 30 September 31 March
2019 2018 2019
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
-------------------------- ------------- ------------- ------------
United Kingdom 1,014 369 737
United States of America 204 26 30
1,218 395 767
-------------------------- ------------- ------------- ------------
The above analysis includes right-of-use assets capitalised in
the period under IFRS 16 which are shown in more detail in note 5.
For the six months ended 30 September 2019 GBP343,000 (United
Kingdom) and GBP174,000 (USA) of the above net book value relates
to leases capitalised in the period under IFRS 16.
3. Adjusted loss before tax
An adjusted loss before tax measure has been presented as the
Directors believe that this is a more relevant measure of the
Group's underlying performance. Adjusted loss is not defined under
IFRS and has been shown as the Directors consider this to be
helpful for a better understanding of the performance of the
Group's underlying business. It may not be comparable with
similarly titled measurements reported by other companies and is
not intended to be a substitute for, or superior to, IFRS measures
of profit. The net adjustments to loss before tax from continuing
operations are summarised below:
6 months 6 months Year ended
ended ended
30 September 30 September 31 March
2019 2018 2019
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
-------------------------- ------------- ------------- ------------
Share-based payment (i) 154 68 207
Share buyback costs (ii) - 116 119
Total adjustments 154 184 326
-------------------------- ------------- ------------- ------------
(i) The performance condition associated with LTIP awards made
in January 2019 are subject to a non-market based performance
measure. Accordingly, should these LTIP awards fail to vest, the
share based payment charge will be added back to the income
statement. To date the majority of historic LTIP awards have failed
to vest. The inclusion provides consistency over time allowing a
better understanding of the financial position of the Group.
(ii) On 24 July 2018 a Special Resolution was passed to allow
the Group to repurchase up to 47,000,000 ordinary shares at 17p
each. The legal and professional fees incurred in connection with
the repurchase of shares have been split out from continuing
costs.
4. Loss per share
The following reflects the loss and share data used in the basic
and diluted loss per share calculations:
Unadjusted loss per share 6 months 6 months Year ended
ended ended
30 September 30 September 31 March
2019 2018 2019
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
---------------------------------------- ------------- ------------- ----------------
Loss from continuing operations
attributable to ordinary shareholders (384) (794) (2,037)
---------------------------------------- ------------- ------------- ----------------
Loss from continuing and discontinued
operations attributable to ordinary
shareholders (171) (1,124) (2,270)
Weighted average number of shares 145,454,118 160,184,168 152,839,321
---------------------------------------- ------------- ------------- ----------------
Basic and diluted loss per share
- continuing operations (0.26p) (0.50p) (1.33p)
---------------------------------------- ------------- ------------- ----------------
Basic and diluted loss per share
- continuing and discontinued
operations (0.12p) (0.70p) (1.49p)
---------------------------------------- ------------- ------------- ----------------
Adjusted loss per share 6 months 6 months Year ended
ended ended
30 September 30 September 31 March
2019 2018 2019
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
------------------------------------------ ------------- ------------- ----------------
Loss from continuing operations
attributable to ordinary shareholders (384) (794) (2,037)
------------------------------------------ ------------- ------------- ----------------
Share-based payment 154 68 207
Share buyback costs - 116 119
Adjusted (loss)/profit after
tax (230) (610) (1,711)
------------------------------------------ ------------- ------------- ----------------
Weighted average number of shares 145,454,118 160,184,168 152,839,321
------------------------------------------ ------------- ------------- ----------------
Basic and diluted loss per share (0.26p) (0.50p) (1.33p)
------------------------------------------ ------------- ------------- ----------------
Basic and diluted adjusted (loss)/profit
per share (0.16p) (0.38p) (1.12p)
------------------------------------------ ------------- ------------- ----------------
The inclusion of potential Ordinary Shares arising from LTIP
awards and EMI Options would be anti-dilutive. Basic and diluted
loss per share has therefore been calculated using the same
weighted number of shares.
5. IFRS 16
Additions to right-of-use asset category reflect the recognition
of the Group's leasing obligations under IFRS 16, and are included
within the Property, plant and equipment balance included on the
Statement of Financial Position on page 10.
Lease liability
During the period under review the Group adopted IFRS 16 which
resulted in lease contracts previously being recognised as
operating leases now being recognised as finance leases. In the
Statements of Financial Position additional lease liabilities at 30
September 2019 of (GBP527,000) are offsetting right-of-use assets
of GBP517,000, giving a net liability position of (GBP10,000).
Leases
IFRS 16 requires the Group, with the exception of short-term and
low value leases, to value all leasing obligations disclosing
right-for-use assets and corresponding lease liabilities. As
detailed below, all leases of the Group have been considered to
have balance sheet leasing obligations.
Right-of-use assets
Motor
Property vehicles Total
GBP'000 GBP'000 GBP'000
-------------------------------- --------- ---------- ---------
Cost
-------------------------------- --------- ---------- ---------
At 31 March 2019 - - -
-------------------------------- --------- ---------- ---------
Additions 558 35 593
Disposals - - -
Exchange movements 3 - 3
-------------------------------- --------- ---------- ---------
At 30 September 2019 561 35 596
-------------------------------- --------- ---------- ---------
Accumulated depreciation
------------------------------------------- ---------- ---------
At 31 March 2019 - - -
-------------------------------- --------- ---------- ---------
Charge for the period 72 7 79
Disposals - - -
Exchange movements - - -
At 30 September 2019 72 7 79
-------------------------------- --------- ---------- ---------
Net book value
-------------------------------- --------- ---------- ---------
At 30 September 2019 489 28 517
-------------------------------- --------- ---------- ---------
At 31 March 2019 - - -
-------------------------------- --------- ---------- ---------
Interest charge for the period 13 1 14
-------------------------------- --------- ---------- ---------
Cash outflows for leases
in the period 78 8 86
-------------------------------- --------- ---------- ---------
Lease liabilities were calculated as the present value of the
future lease obligations of the Group. The future leasing
obligations were discounted using relevant UK and US local
borrowing rates of 5% respectively.
The lease categories of the Group are made up of:
Motor vehicles
-- One company car is held on a lease expiring on 30 September 2020.
-- A further one company car and a company van are held on
leases expiring on 23 October 2022 and 24 October 2022.
5. IFRS 16 (continued)
Property
-- The Group's US subsidiary has an office and storage facility
in Ashburn, Virginia near Washington DC, USA. The operating
location has a long-term agreement in place until 31 May 2023.
-- The Group's current UK operation is headquartered in a leased
premises in Milton Park, Oxfordshire. The lease contract commenced
in December 2017 and expires in December 2022.
-- The Group also lease a small office in Guildford. The lease
contract commenced in April 2018 and expires in March 2023. The
contract has a three-year break clause on 31 March 2021, but
management does not expect that this break clause will be
exercised.
At transition IFRS 16 permits the cumulative effect of adopting
the standard to be taken to retained earnings. The Group also
elected to value the right-of-use assets in line with lease
liabilities at transition. There were no movements taken to
retained earnings as a result of transition. If IFRS 16 was not
required, operating profit of the Group for the current period
would be reduced by GBP15,000 and profit before tax would be
increased by GBP15,000.
6. Issued share capital
As at 30 September 2019, there were 145,454,118 Ordinary Shares
in issue (H1 2019 and FY 2019: 145,454,118).
In addition, there were nil deferred Shares in issue (H1 2019
and FY 2019: 163,124). On 22 February 2010, 217,500 Incentive
shares were issued to three directors. Of these shares 163,124
failed to vest and were converted to deferred shares with nominal
value. Following shareholder approval at the 2019 AGM, 163,124
deferred shares were bought back by the Company for total
consideration of GBP3 and subsequently cancelled on 25 September
2019.
7. Share options
There were no share awards granted in the six-month period ended
30 September 2019.
8. Financial instruments
Fair value hierarchy
The Group uses the following hierarchy for determining and
disclosing the fair values of financial instruments by valuation
techniques:
Level 1: quoted (unadjusted) prices in active markets for
identical assets or liabilities;
Level 2: other techniques for which all inputs which have a
significant effect on the recorded fair value are observable,
either directly or indirectly; and
Level 3: techniques which use inputs which have a significant
effect on the recorded fair value that are not based on observable
market data.
The Group has no level 2 or level 3 financial instruments (H1
2019: GBP30k, FY 2019 GBPnil). The fair values of other financial
assets and liabilities, which are short term, are not disclosed as
the Directors estimate that the carrying amount of the financial
assets and liabilities are not significantly different to their
fair value. These financial assets and liabilities are carried at
amortised cost.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR BZLLLKFFXFBQ
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