TIDMTOOP
RNS Number : 5852N
Toople PLC
10 May 2018
Toople Plc
("Toople" or the "Company" or the "Group")
Interim Results
Toople Plc (LSE: TOOP), a provider of bespoke telecom services
to UK SMEs, is pleased to announce its financial results for the
six month period ended 31(st) March 2018.
-- 10% increase in revenues, compared with the second half of 2017 financial year
-- 63% increase in orders of Revenue Generating Units ("RGUs")
-- 38% increase in billable customers
-- 54% increase in direct SME customer revenue
-- 7% increase in gross profit, compared with previous 6 months
Andy Hollingworth, CEO, Toople Plc, commented: "The first half
of this financial year has started well with continued growth in
our SME client base. The decision taken in late 2017 to bring
in-house our direct sales team has shown very positive results,
with a 113% increase in orders in the first three calendar months
of 2018 compared with the same period last year, a significant
reduction in pre go-live contract cancellations quarter on quarter
and lower costs of customer acquisitions. We expect this trend to
bring even greater benefits in the second half as we refine our
go-to-market strategy and deliver cost savings into the
business."
The unaudited interim statements are available on the Company's
website at https://www.toople.com/investors/. An electronic version
of the half-year report has been submitted to the National Storage
Mechanism, which will shortly be available for inspection at
http://www.morningstar.co.uk/uk/NSM.
For further information:
Toople PLC 0800 0499 499
Andy Hollingworth, Chief
Executive Officer
Adrian Andrews, Chief Financial
Officer
Cairn Financial Advisers
LLP
David Coffman / Richard Nash 020 7213 0880
Novum Securities Limited
Colin Rowbury 020 7399 9400
Turner Pope Investments Limited
Andy Thacker 020 3621 4120
Chairman's Statement
Summary
The last six months have seen the continued growth of Toople in
the UK small business communications market. The Board believes
that Toople is increasingly being recognised by SMEs as a trusted,
reliable and competitively-priced provider of communications
solutions, covering the full spectrum of their business needs from
broadband to hosted telephony to mobile. Whilst we recognise that
we operate in a constantly evolving market place, with buyers of
communications services becoming increasingly cost sensitive, we
believe that we distinguish ourselves from our competitors with our
transparent pricing, our UK-based customer support desks and our
carrier agnostic products. By driving the quality of our service we
have the potential to achieve our ambition of becoming one of the
leading providers of bespoke telecom services to UK SMEs. As a
Board, our focus is on supporting management to capitalise on the
opportunity we see in the five million-strong UK SME market and
delivering long-term value to our shareholders.
Balance Sheet
Our cash balance as at 31 March 2018 was GBP374,042 and net
current assets were GBP404,263. Like any growing business we manage
our debtor levels very stringently and currently over 90% of our
customers pay by direct debit. Where a customer falls into arrears
or fails to pay, we immediately implement our client care policy
whereby we engage with them by telephone to determine the reason
for non-payment, e.g. service issues, cash flow problems etc. and
work with them to resolve, wherever possible, without recourse to
formal debt collection.
Board and Senior Management Update
In October, we announced that Adrian Andrews had been appointed
as a part time Chief Financial Officer to take over from Geoff
Wilson (Non-Executive Director) who had held the role on an interim
basis. In December, Duncan Ward was appointed as Chief Operating
Officer, to provide experienced leadership, on a day-to-day basis,
to our sales, marketing and support teams. We now have a
fully-rounded senior management team in place, combining all the
necessary skills required to lead and develop our business.
I would like to take this opportunity to thank our all our
employees for their hard work, our professional advisers for their
valuable input and our shareholders for their continued
support.
Richard Horsman
Chairman
Chief Executive Officer's Review
Summary
Over the last six months, we have constantly reviewed our
business offerings to ensure that the Toople name remains
associated with quality of service at a highly competitive price.
We are pleased that we consistently receive 5 star ratings from
Trustpilot (R) reviews and have endeavoured to differentiate
ourselves from our competitors by focussing very heavily on the
overall customer experience; from the moment of first contact,
either via our website or directly with our sales team, to the
eventual go-live of their services. Although, like others in the
market space, we are dependent on third party broadband
infrastructure providers and telephony carriers, we believe that we
can provide a better service by employing our own people based on
shore in the UK, all focussed on the needs of the customer.
Looking at the key metrics we use to measure our performance, we
can report:
1. 63% increase in the sales of Revenue Generating Units
("RGUs"), one Unit being a broadband connection or a hosted
telephony seat or a mobile SIM sale, in the six months to March
2018, compared with the total number at the end of September
2017.
2. 38% increase over the same period in the total number of customer invoices raised.
3. 74% increase in the gross profit on our direct business
customers for the period, compared with the previous six
months.
4. 10% increase in total revenues compared with the previous six months.
5. 54% increase in direct SME revenue between the two half years.
6. 113% increase in RGU orders taken in the first three months of 2018 compared with 2017.
As a result of this growth in the higher margin direct business
and a review of the lower margin wholesale business, the gross
profit rose from GBP77,271 for the six months to September 2017 to
GBP82,953 for the six months to March 2018, an increase of 7%.
During November and December 2017, as previously reported, we
transitioned our sales teams from an outsource partnership
agreement and established our own in-house sales team based in the
North West of England. In January this year the Company opened an
office in Warrington and began the recruitment of its own dedicated
sales team. The strategic reasoning behind this move was:
- better control over the sales experience,
- a more consultative sale rather than a transactional one,
- more RGUs per customer as a result.
The transformation project ran to plan and the Board believes
that the second half of our financial year will show a significant
increase in sales revenues. Indeed, when comparing the first three
months of 2018 against the same period in 2017, we have delivered a
113% increase in RGU orders taken. Moreover, having the sales team
in-house is expected to realise a material cost saving, thereby
delivering an overall reduction in cost per customer
acquisition.
Another factor expected to boost second half income will be the
greater focus on the commercialisation of the Company's proprietary
Merlin platform to support the needs of other resellers of
telephony businesses to manage their client bases. A number of
other telecoms companies buy, and are looking to buy, services from
Toople, white label the propositions and resell to their own
customers. Furthermore, the Merlin software platform gives access
to wholesalers who want to interconnect with carriers for
provisioning and billing services for their own customers, where a
monthly licence fee is paid to access Merlin. Over time, the
proportion of revenues we achieve from wholesale will reduce as we
focus on the higher margin retail business. Although wholesale is
not a strategic priority for the Company, we expect to redress the
first half decline in wholesale revenues, with the added benefit of
higher overall gross margin, through Merlin software licenses.
Whilst the Operating Loss of GBP687,944 for the six months was
greater than the corresponding period of 2017, it has reduced by 6%
when compared with the second half of 2017. A complete review of
supplier contracts, particularly in respect of the effectiveness of
marketing, brand awareness and sales spending, has delivered a
reduction in administrative expenses, without impacting revenues.
These savings are expected to flow through into the second half of
the financial year.
Market
Although the business telephony market remains competitive, we
believe that the niche that Toople is carving out for itself will
deliver the expected financial returns. The commitment by H.M.
Government to expand the availability of superfast broadband to all
parts of the country, the cash offer by Connect Infrastructure for
the entire share capital of CityFibre (at a 42% premium) and the
continued growth of the independent infrastructure providers such
as Gigaclear are all indications that the demand for broadband and
broadband solutions will continue to grow as more end users gain
access to high speed, fibre networks. Whilst the price of
connectivity and usage may level out, volumes will increase as
businesses look to providers to deliver an efficient, cost
effective solution to their needs for data, voice and hardware in a
single package at a fixed price, where available.
Accordingly, we continue to see increasing demand for our
cloud-based technology solutions which we see as a key driver for
new customer acquisitions. Ease of use, features such as single
number reach, transparent pricing, unlimited call packs, out of
hours support and free office moves are just some of the benefits
that are attracting new customers, all at a fixed monthly price
typically over a 36 month contract period.
All Toople products are delivered and managed through Merlin,
the Group's proprietary software platform. Merlin provides an
end-to-end automated process that allows customers to place orders
easily and enables their business to grow its customer base,
without the need to scale expensive resources. This helps support
one of our key differentiators - quality of customer service.
Customer acquisition and service
As previously mentioned, we continue to grow our SME customer
base through focussed marketing and the development of our own
in-house sales team. Toople's approach to customer acquisition is
to deploy a marketing and advertising strategy aimed at delivering
high-levels of online market penetration, either directly or via
comparison sites in order to increase brand awareness. The focus is
on attracting customers through the quality and transparency of
Toople's products and retaining them through their service
experience once they are live. This provides opportunities for us
to progressively grow the number of solutions they purchase.
Having our own, dedicated sales resource means that we can
monitor commercial activity in real time, allowing us to not only
respond quickly to changes in market strategy by our competitors
but also improve the initial customer contact through consistency
of our sales message. We continue to see month on month sales
increases and a significant reduction in pre go-live
cancellations.
Whilst brand recognition is still primarily being driven by
Toople's presence on comparison sites, we are expanding awareness
of the Toople name through our own direct digital marketing
strategy, achieving a reach of over one million business owners and
decision makers every month. We are continuing further development
of our website to provide a more seamless customer experience and
conversion, as well as pushing our proposition through affiliate
and partnership programmes.
Outlook
The last six months have seen solid progress. Having a range of
telephony solutions covering broadband, SIM and to hosted cloud
telephony solutions has allowed Toople to be disruptive and
competitive in the market and grow market share and Toople will
continue to tier its offering by quality at various price points
rather than focussing solely on functionality. As we have noted,
the roll out of broadband infrastructure across the UK is still
ongoing and with the impending advent of 5G it will be possible to
serve more mobile users with more solutions in a given area. To
capitalise on this growing market, Toople will remain customer
focussed and continue to build on its reputation for great customer
experience.
Over the next six months we plan to continue to invest in direct
digital marketing to drive further growth in customer numbers and
RGUs across all our propositions, while keeping the cost of
customer acquisition as low as possible.
We remain upbeat about the economic conditions for the UK and
believe that SMEs will continue to seek out and buy the best
technology in order to run their operations at a fixed price where
possible. It is a given that broadband is now the lifeblood of most
organisations and when coupled with voice capabilities can provide
them with a real competitive advantage and lower costs.
Finally, I would like to thank the shareholders, the Board, the
Toople team and most importantly our customers who have all
contributed to the continued progress of Toople over the last 6
months.
Andrew Hollingworth
Chief Executive Officer
Principal risks and uncertainties relating to the Company's
business strategy
The Group is subject to a number of risk factors. The Company's
prospectus published at the time of its Standard Listing and the
further prospectus published in June 2017 included detailed
assessments of the risks facing the business. The Directors have
remained cognisant of the following key risks in the first six
months of this financial year. Other risk factors not presently
known or currently deemed immaterial may also apply.
-- The Company is dependent on the ability of the Directors to
implement the Company's strategy and significantly increase
customer numbers. There is no assurance that the Company's business
strategy will ultimately be successful;
-- The Company may not be able to secure capital to provide
working capital for the Group to drive the growth of the business
on terms acceptable to the Group, or at all;
-- The Group operates in a competitive market and may not be
able to sell multiple products to customers;
-- The Group is currently dependent on marketing spend to
generate customers. The Group may not be able to acquire customers
at a cost that will generate sufficient gross profit margins for
the Group, particularly if competition in the market increases;
-- The loss of, or inability to attract, key personnel could adversely affect the Group;
-- The technology upon which the Group's products and services
are based may become obsolete; in particular, the Group is reliant
on the technical robustness of its software platform;
-- An increase in supplier costs could result in significantly reduced gross profit margins;
-- The ownership and use of intellectual property by the Group
may be challenged by third parties or otherwise disputed;
-- From time to time the Group may be subject to complaints or
claims in the normal course of business;
-- The Company is exposed to the risk that third parties that
owe the Group money, securities or other assets may not fulfil
their obligations. These parties may default on their obligations
due to bankruptcy, lack of liquidity, operational failure or other
reasons;
-- The Group's performance could be adversely affected by poor economic conditions;
-- The Group's infrastructure and systems could be targeted by cyber attacks;
-- The pricing environment in the telecoms industry could become more difficult;
-- The UK telecoms market is subject to regulation by Ofcom and
subject to high incidence of fraud and bad debt risk;
-- New data protection legislation ("GDPR") will become
effective on 25(th) May 2018. The Group relies on assurances from
its data suppliers that such data will be compliant.
The Directors seek to mitigate these risks by applying their
considerable experience of operating businesses in the sector and
by devising trading and operating strategies designed to seek out
and exploit profitable trading opportunities whilst seeking to
protect the business from downside risks.
Responsibility Statement
The Directors are responsible for preparing the Interim Report
in accordance with the Disclosure and Transparency Rules of the
United Kingdom's Financial Conduct Authority ('DTR') and with
International Accounting Standard 34 on Interim Financial Reporting
(IAS 34).
The Directors confirm that the interim financial statements have
been prepared in accordance with IAS 34 and that as required by DTR
4.2.7 and DTR 4.2.8, the Interim Report includes a fair review
of:
-- important events that have occurred during the first six months of the year;
-- the impact of those events on the financial statements;
-- a description of the principal risks and uncertainties for
the remaining six months of the financial year;
-- details of any related party transactions that have
materially affected the Company's financial position or performance
in the six months ended 31 March 2018; and
-- any changes in the related parties transactions described in
the last annual report that could have a material effect on the
financial position or performance of the enterprise in the first
six months of the current financial year.
The Directors who served during the period and up to the date of
signing the interim financial statements were:
Richard Horsman
Geoffrey Wilson
Andrew Hollingworth
Adrian Andrews
Company Secretary:
WKH Company Secretary Services
By Order of the Board
Andrew Hollingworth
Chief Executive Officer
9 May 2018
Condensed Consolidated Statement of Comprehensive Income
The condensed consolidated statement of comprehensive income of
the Group for the six month period from 1 October 2017 to 31 March
2018 is set out below.
NOTE Period Period
ended ended
31 Mar 31 Mar
18 17
-------------------------------------- ----- ---------- ----------
Continuing Operations GBP GBP
Revenue 689,769 654,721
Cost of Sales (606,816) (572,687)
---------- ----------
Gross Profit 82,953 82,034
Administrative Expenses (770,897) (661,983)
---------- ----------
Operating loss (687,944) (579,949)
Interest Payable and Similar Charges (26,455) (23,947)
Interest Receivable 366 133
---------- ----------
Loss Before Taxation (714,033) (603,763)
---------- ----------
Taxation - 0
---------- ----------
Loss for the Period (714,033) (603,763)
---------- ----------
Other Comprehensive Loss for the
Period (714,033) (603,763)
---------- ----------
Total Comprehensive Loss for the
Period Attributable to the Equity
Owners (714,033) (603,763)
Loss Per Share
Earnings/(Loss) Per Share 5 (0.35) (0.60)
Condensed Consolidated Statement of Financial Position
The condensed consolidated statement of financial position as at
31 March 2018 is set out below:
NOTE As at As at
31 Mar 18 30 Sep 17
(Unaudited) (Audited)
GBP GBP
------------------------------ ----- ------------ ------------
ASSETS
Non-current Assets
Intangible Assets 1,196 5,646
------------ ------------
1,196 5,646
------------ ------------
Current Assets
Trade and Other Receivables 382,528 316,173
Cash and Cash Equivalents 374,042 820,767
------------ ------------
756,570 1,136,940
------------ ------------
Total Assets 757,766 1,142,586
------------ ------------
EQUITY and LIABILITIES
Share Capital 6 136,011 117,084
Share Premium 3,519,856 3,261,279
Merger Reserve (25,813) (25,813)
Share Based Payment Reserve 145,992 114,417
Capital Contribution Reserve 62,045 88,499
Retained Earnings (3,976,928) (3,289,351)
------------ ------------
Total Equity (138,838) 266,115
------------ ------------
Current Liabilities
Trade and Other Payables 7 352,307 358,629
------------ ------------
352,307 358,629
------------ ------------
Non-current Liabilities
Financial Liabilities
- Borrowings 7 544,296 517,842
------------ ------------
544,296 517,842
------------ ------------
Total Equity and Liabilities 757,766 1,142,586
------------ ------------
Condensed Consolidated Statement of Changes in Equity
The unaudited condensed consolidated statement of changes in
equity of the Group for the period to 31 March 2018 is set out
below:
NOTE Share Share Merger Share Capital Accumulated Total
Capital Premium Reserve Based Contribution Deficit
Payment Reserve
Reserve
CURRENT YEAR GBP GBP GBP GBP GBP GBP GBP
--------------------- ----- --------- ---------- --------- --------- -------------- ------------ ----------
Brought Forward
at October
2017 1 117,084 3,261,279 (25,813) 114,417 88,499 (3,289,350) 266,116
Loss for the
Period (714,033) (714,033)
--------- ---------- --------- --------- -------------- ------------ ----------
Total Comprehensive
Loss for the
Year (714,033) (714,033)
Transactions
with Owners
Share Based
Payment Charge
Credited to
Equity 31,575 31,575
Issue of Share
Capital Net
of Share Costs 18,927 258,577 277,504
Equity Component
of Interest
Free Loan
Transfer of
Interest Accrued (26,455) 26,455
--------- ---------- --------- --------- -------------- ------------ ----------
At 31 March
2018 136,011 3,519,856 (25,813) 145,992 62,044 (3,976,928) (138,838)
--------- ---------- --------- --------- -------------- ------------ ----------
NOTE Share Share Merger Share Capital Accumulated Total
Capital Premium Reserve Based Contribution Deficit
Payment Reserve
Reserve
PRIOR PERIOD GBP GBP GBP GBP GBP GBP GBP
--------------------- ----- --------- ---------- --------- --------- -------------- ------------ ----------
Brought Forward
at October
2016 1 66,700 1,900,245 (25,813) 24,130 137,616 (1,975,364) 127,514
Loss for the
Period (603,763) (603,763)
--------- ---------- --------- --------- -------------- ------------ ----------
Total Comprehensive
Loss for the
Year (603,763) (603,763)
Transactions
with Owners
Share Based
Payment Charge
Credited to
Equity 31,575 31,575
Issue of Share
Capital Net
of Share Costs
Equity Component
of Interest
Free Loan
Transfer of
Interest Accrued (23,947) 23,947
--------- ---------- --------- --------- -------------- ------------ ----------
At 31 March
2017 66,700 1,900,245 (25,813) 55,705 113,669 (2,555,180) (444,674)
--------- ---------- --------- --------- -------------- ------------ ----------
Condensed Consolidated Statement of Cash Flows
The condensed consolidated cash flow statement of the Group from
1 October 2017 to 31 March 2018 is set out below:
Period Ended Period Ended
31 Mar 18 31 Mar 17
GBP GBP
-------------------------------------------- ------------- -------------
Cash Flows from Operating Activities
Operating Loss (687,943) (579,949)
Depreciation and Amortisation 4,450 4,450
Share Based Payment Charge 31,575 31,575
Changes in Working Capital
Increase in Receivables (66,354) 31,753
Decrease in Payables (6,322) (40,201)
Taxation
------------- -------------
Net Cash Outflow from Operating Activities (724,594) (552,372)
------------- -------------
Cash Flows from Financing Activities
Proceeds from Issues of Share Capital 277,504
Finance Costs
Finance Income
------------- -------------
Net Cash from Financing Activities 277,504
------------- -------------
Cash Flows from Investing Activities
Finance Income 366 132
------------- -------------
Net Cash from Investing Activities 366 132
------------- -------------
Net Increase in Cash and Cash Equivalents (446,724) (522,240)
Cash and Cash Equivalents at Start
of Period 820,767 743,824
------------- -------------
Cash and Cash Equivalents at End
of Period 374,043 191,584
------------- -------------
Notes to the Condensed Consolidated Interim Report
1. General information
The Company was incorporated in England and Wales on 2 March
2016 as a public limited company. The Company's registered office
is located at PO Box 501, The Nexus Building, Broadway, Letchworth
Garden City, Hertfordshire, SG6 9BL.
The Group provides a range of telecoms services primarily
targeted at the UK SME market. Services offered by the Group
include business broadband, fibre, Ethernet First Mile and Ethernet
data services, business mobile phones, cloud PBX and SIP Trunking
and traditional services (calls and lines) all of which are
delivered and managed through Merlin, the Group's proprietary
software platform.
On 15 April 2016, the Company entered into four share for share
exchange agreements with David Breith pursuant to which the Company
acquired the entire issued share capital of each of Toople.com
Limited, Toople Finance Limited, Toople Management Services Limited
and AskMerlin Limited (together the "Subsidiaries") in
consideration for the issue and allotment to David Breith of
39,000,000 ordinary shares in the Company.
The Directors consider the substance of the acquisition of the
Subsidiaries by the Company to have been a reverse asset
acquisition by the Subsidiaries and that the substance of the
Subsidiaries was that of a single business under common ownership
and control. Further, the Directors consider that the Company did
not meet the definition of a business set out in IFRS3 'Business
combinations'. As a consequence, the Directors consider that the
transaction which gave rise to the formation of the Group fell
outside the scope of IFRS3 and have applied the business
reorganisation principles of UK GAAP to account for the
combination. The consolidated financial statements therefore
present the combination as a continuation of the combined financial
information of the Subsidiaries with no goodwill arising on the
transaction.
2. BASIS OF PREPARATION
The interim, condensed, unaudited financial statements for the
period ended 31 March 2018 have been prepared in accordance with
IAS 34 Interim Financial Reporting. They do not include all the
information required for a complete set of IFRS financial
statements. However, selected explanatory notes are included to
explain events and transactions that are significant to an
understanding of the changes in the Group's financial position and
performance since the last annual consolidated financial statements
as at the year ended 30 September 2017. The results for the period
ended 31 March 2018 are unaudited.
The condensed unaudited consolidated financial statements for
the period ended 31 March 2018 have adopted accounting policies
consistent with those followed in the preparation of the Group's
annual consolidated financial statements for the year ended 30
September 2017
3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of financial statements requires the use of
accounting estimates which, by definition, will seldom equal the
actual results. Management also needs to exercise judgment in
applying the group's accounting policies.
This note provides an overview of the areas that involved a
higher degree of judgment or complexity, and of items which are
more likely to be materially adjusted due to estimates and
assumptions turning out to be wrong. Detailed information about
each of these estimates and judgments is included together with
information about the basis of calculation for each affected line
item in the financial statements.
The area involving significant estimates or judgments is:
-- Going concern
At 31 March 2018 the Group had GBP374,042 of cash and net assets
of GBP405,459 excluding the non-current liability owed to a
shareholder that (at the option of the company) is not payable
until 2019, and then only at the Boards discretion with reference
to liquidity of the business.
In order to continue growing our customer base, further
investment is required. To ensure the Company has the resources to
take advantage of the market opportunity the Board is reviewing
funding options to provide additional working capital. The
Directors have therefore sought shareholder authorities to provide
the Company with the flexibility to raise these further funds in
the future and are confident that the necessary further investment
will be forthcoming. There can, however, be no assurance that this
will be the case.
Should the company be unable to continue trading, adjustments
would have to be made to reduce the value of the assets to their
reasonable amounts, to provide for further liabilities which might
arise, and to classify fixed assets as current.
The going concern basis of accounting has been applied based on
management's consideration of financial projections and business
plan for the business. These include a number of forward looking
assumptions about the future growth in the customer base.
Estimates and judgments are continually evaluated. They are
based on historical experience and other factors, including
expectation of future events that may have a financial impact on
the entity and that are believed to be reasonable under the
circumstances.
4. Business Segments
For the purpose of IFRS 8 the chief operating decision maker
("CODM") is the board of Directors. The Directors are of the
opinion that the business comprises a single economic activity,
being the provision of telephony services and that currently this
activity is undertaken solely in the United Kingdom. All of the
income and non-current assets are derived from the United Kingdom.
The Company has a single customer that, in the reporting period,
amounted to more than 10% of the Company's revenue; revenue
generated from this customer amounted to GBP347,890. At meetings of
the Directors, income, expenditure, cash flows, assets and
liabilities are reviewed on a whole Group basis. Based on the above
considerations there is considered to be one reportable segment
only, namely telephony services.
Therefore, the financial information of the single segment is
the same as that set out in the consolidated statement of
comprehensive income, consolidated statement of financial position,
consolidated statement of changes to equity and the consolidated
statement of cash flows.
5. LOSS PER SHARE
The calculation of loss per share is based on the following loss
and number of shares:
Period Ended Period Ended
31 Mar 18 31 Mar 17
GBP GBP
------------------------------------- ------------- -------------
Loss for the Period from Continuing
Operations (714,033) (603,763)
------------- -------------
Number of Shares in Issue 203,913,894 100,000,000
------------- -------------
Earnings/Loss per Share (Pence) (0.35) (0.60)
As detailed in note 1, the consolidated financial statements
present the combination as a continuation of the combined financial
information of the Subsidiaries with no goodwill arising on the
transaction. Basic loss per share is calculated by dividing the
loss for the period from continuing operations of the Company by
the number of ordinary shares in issue during at the period
end.
The Company has in issue 11,330,625 warrants at 31 March 2018.
The inclusion of the warrants in the number of shares in issue
would be anti-dilutive and therefore they have not been
included.
6. SHARE CAPITAL
On incorporation, the Company had an unlimited authorised share
capital and an issued share capital of 36,000,000 ordinary shares
of par value 0.0667 pence each.
Ordinary shares of 0.0667p No Nominal Value
each GBP
On incorporation 36,000,000 24,012
Shares issued on acquisition
of Subsidiaries 39,000,000 26,013
Share placing 25,000,000 16,675
Share placing 75,537,732 50,384
Share placing 24,462,268 16,316
Shares for fees 3,913,894 2,610
--------------------------------- ------------------------------
Share Capital at 31 March
2018 203,913,894 136,010
On 15 April 2016, 39,000,000 ordinary shares were issued and
allotted to David Breith in accordance with the terms of the share
exchange agreements in relation to the acquisition of the
subsidiaries
On 10 May 2016 following the Company's listing on the London
Stock Exchange, 25,000,000 ordinary shares of par value 0.0667
pence each were issued, fully paid at GBP0.08 per share. A
commission of GBP80,000 was payable to the brokers and this has
been recognised against the share premium account.
On 12 June 2017 the company placed 70,537,732 ordinary 0.0667p
shares at a subscription price of 2p per share. Commission of
GBP72,000 was payable to the brokers at the time and this has been
recognised against share premium. At the same time the company
issued 5,000,000 shares at the same subscription price to the
Directors of the company to settle GBP100,000 of unpaid fees owed
to them.
On 13 March 2018 the company placed 24,462,268 ordinary 0.0667p
shares at a subscription price of 1.022p per share. Commission of
GBP12,500 was payable to the brokers at the time and this has been
recognised against share premium. At the same time the company
issued 3,913,894 shares at the same subscription price to the
Brokers of the company in lieu of the GBP40,000 annual fees jointly
due to them.
On 10 May 2016 following the Company's listing on the London
Stock Exchange, the Company issued warrants over 8,100,000 ordinary
shares as follows:
-- 3,000,000 warrants to the Non-Executive Directors to
subscribe for one new ordinary share at GBP0.08 per share at any
time during the period commencing on the second anniversary of
admission ("Vesting Date") and at the second anniversary of the
Vesting Date. A vesting condition of the warrants is that the
holder is a director of the Company on the date of vesting;
-- 5,000,000 warrants to the subscribers to the placing to
subscribe for one new ordinary share at GBP0.16 per share at any
time during the period commencing on admission and expiring at
midnight on the second anniversary thereof save that in the event
that the closing price of the ordinary shares is equal to or in
excess of GBP0.24 pence for 10 consecutive trading days then the
Company may serve notice on the warrant holders requesting that
they exercise their warrants within 14 days in lieu of which they
shall lapse; and
-- 100,000 warrants to Cairn Financial Advisers to subscribe for
one new ordinary share at GBP0.08 per share at any time during the
period commencing on admission and expiring at midnight on the
second anniversary thereof
The ordinary shares have attached to them full voting, dividend
and capital distribution rights (including on a winding up). The
ordinary shares do not confer any rights of redemption.
The fair value of the 3,000,000 warrants issued to the
Non-Executive Directors and of the 100,000 warrants issued to Cairn
Financial Advisers have been determined using the Black-Scholes
option pricing model. The fair value at the date of grant per
warrant was GBP0.04 for the 3,000,000 tranche and GBP0.03 for the
100,000 tranche. The fair value of the warrants issued to the
Non-Executive Directors has been charged to the income statement
evenly over the vesting period resulting in a charge in the current
period of GBP31,575. The fair value of the warrants issued to Cairn
Financial Advisers of GBP3,080 was included in the costs of the
Company and therefore debited to share premium in the year ended 30
September 2017.
The inputs to the Black-Scholes model were as follows:
Warrants granted 3,100,000
Stock price 8p
----------------
Exercise price 8p
----------------
Risk free rate 1%
----------------
Volatility 70%
----------------
Time to maturity 4 years/2 years
----------------
The fair value of the 5,000,000 warrants issued to subscribers
to the placing is considered to comprise a component of the fair
value of the ordinary shares issued in the placing. The Directors
do not consider the fair value of the warrants to be a material
component of the fair value of the shares issued in the original
placing.
7. TRADE AND OTHER PAYABLES
As at As at
31 Mar 18 30 Sep 17
---------- ----------
GBP GBP
Trade payables 143,765 158,787
Social Security and other taxes 27,908 37,867
Other payables 22,613 22,613
Accruals and deferred income 158,022 139,362
---------- ----------
352,307 358,629
---------- ----------
As at As at
31 Mar 18 30 Sep 17
Non - current liabilities
---------- ----------
Shareholder loan account 544,296 517,842
---------- ----------
Financial liabilities, with the exception of the shareholder
loan included within trade and other payables, are all considered
to be repayable within 30 days.
On 3 May 2016, the Company put in place formal documentation
relating to the balance owed to David Breith, the majority
shareholder. The balance cannot be recalled by the shareholder
until the third anniversary of the agreement and after this
anniversary only repayable if the board consider the Company in a
position to service the debt. Therefore, the balance has been
classified as non-current in the financial statements but is shown
as current in the comparative.
The loan is interest free and has a cash value of GBP606,756,
the Directors consider the market rate of interest that they may be
able to obtain for a similar borrowing from a 3rd party to be 10%.
The present value of the loan is GBP544,296 and the present value
adjustment has been recognised as a capital contribution within
equity. The value of the interest that has been recognised in the
statement of comprehensive income at 31 March 2018 is
GBP26,455.
8. RELATED PARTY TRANSACTIONS
6 months to 6 months to
31 Mar 18 31 Mar 17
------------------------------------- ------------
GBP GBP
Goods/services purchased from
Vitrx Limited 5,843 4,599
Goods/services purchased from
Diffrenet Limited - 8,368
Goods/services purchased from
Dotfusion Limited 30,330 30,780
Goods/services supplied to Vitrx
Limited 5,481 9,489
Goods/services supplied to Diffrenet
Limited - 240
41,655 53,476
------------------------------------- ------------
The above companies are disclosed as related parties due to the
nature of the business relationship with Mr David Breith, a major
shareholder of Toople PLC. Mr David Breith is a Director or
co-owner of the above companies, excluding Dotfusion.
Mr Breith resigned from Vitrx Limited on 19 February 2018 and
from Diffrenet Limited on 10 March 2017.
Mr Piotr Kwiatowski is the owner of Dotfusion and is a
shareholder in Toople PLC.
9. SUBSEQUENT EVENTS
The Board does not believe there are any subsequent events
requiring further disclosure or comment.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR KKLFBVEFZBBQ
(END) Dow Jones Newswires
May 10, 2018 02:00 ET (06:00 GMT)
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