TIDMWAND
RNS Number : 8715W
WANdisco Plc
24 April 2019
24 April 2019
WANdisco plc
("WANdisco", the "Company" or the "Group")
Preliminary results for the year ended 31 December 2018
- Increased quality of earnings derived from substantial annual
recurring cloud contract wins
- Addressable market growth driven by expanding Microsoft and
IBM partnerships and Multicloud product
WANdisco (LSE: WAND), the LiveData company announces results for
the year ended 31 December 2018.
Financial highlights
-- Revenue for the year of $17.0 million (2017: $19.6 million)
with H2 revenue increasing 13% to $11.3m
-- Cash overheads(3) of $29.8 million (2017: $24.5 million)
-- Adjusted EBITDA(4) loss of $9.4 million (2017: $0.6 million)
-- Operating loss for the year $22.1 million (2017: $9.7 million)
-- Cash at 31 December 2018 of $10.8 million (2017: $27.4 million)
-- Debt of $3.9 million (2017: $4.0 million)
Post period-end performance
-- Strong Q1 2019 progress with revenue of $4.0 million, up 38% year-on-year
-- Successfully closed a fundraise raising gross proceeds of $17.5 million on 14 February 2019
-- Cash balance on 12 April 2019 of $24.4 million
-- Strong pipeline underpins the Boards confidence in the outlook for the full year
Operational and strategic highlights
-- Shift towards recurring revenue model based on annual
recurring revenue from cloud contracts
o $3 million US health insurance subscription contract through
Microsoft co-sell status
o $1 million partially recurring Source Code Management contract
with ICT provider in China
o $200k recurring automotive contract expected to expand
substantially
-- Deepening our key strategic partnerships
o Microsoft Azure co-sell status delivering strategic deals with
high profile customers through the world's second largest cloud
-- New customers include a major bank, semiconductor company and
major retailer
o IBM OEM royalty percentage increased to 50% with guaranteed
annual minimum royalty commitment and joint SQL product launch
-- New customers in insurance, banking, telecommunications and
US Government
o Gained Advanced Technology Partner status with Amazon Web
Services ("AWS") and collaborated with AWS to win first multi-cloud
contract
o OEM sales partnership with Alibaba Cloud, first product now
integrated with its Cloud Solution
-- Growing product expands addressable market
o Launched LiveData product for Multicloud and won first
contract with a global network operator
o IBM BigSQL co-engineered product launched expanding
addressable LiveData market
o Filed blockchain patent to potentially open significant new
market for WANdisco's core technology
-- Appointment of Silicon Valley expert Bob Corey as Senior
Non--executive Director and Vice Chairman to the Board and Joel
Horowitz as SVP of Marketing
David Richards, Chief Executive Officer and Chairman of
WANdisco, commented:
"This has been an important year for WANdisco, with substantial
progress in both partnerships and product to unlock the significant
potential in cloud computing. We have significantly extended our
relationship with Microsoft, gaining co-sell status that allows our
WANdisco Fusion platform to be sold as a standard offering with
Microsoft's Cloud Solution, Azure. Throughout the year we have
continued to build on this foundation and have closed a number of
strategic deals with high profile Microsoft customers.
Cloud has firmly overtaken on-premises, and as businesses
continue that transition they are using a variety of cloud vendors.
LiveData for Multicloud plays a critical role in that environment,
enabling businesses to replicate their data assets, seamlessly
between cloud regions, or different cloud vendors.
We also have begun to see a significant structural shift in the
composition of our revenue base, from large, difficult-to-forecast
on-premises transactions toward more predictable, annual recurring
cloud revenues. We see significant opportunities to expand our
addressable market in cloud and as annual recurring revenues
increase over time, develop a smoother, increasing revenue profile
for our firm."
A webcast of WANdisco's results presentation will be available
on the Company's website later this morning:
https://www.wandisco.com/investors
(1) Bookings as defined in this press release represent the total
value of all contracts received in the year including both new
and renewal bookings.
(2) Effective 1 January 2018, the Company adopted a new revenue recognition
standard (IFRS 15 "Revenue from Contracts with Customers"), which
impacted the Company's recognition of revenue from certain of
its term licence agreements. The Company adopted IFRS 15 using
the cumulative effect method (without practical expedients), with
the effect of initially applying this standard recognised at the
date of initial application (i.e. 1 January 2018). Accordingly,
the information presented for 2017 has not been restated - i.e.
it is presented, as previously reported, under IAS 18, IAS 11
and related interpretations. In the interest of comparability
during the transition year to IFRS 15, the Company has provided
revenue, Adjusted EBITDA and statutory loss information in accordance
with both IFRS 15 and also under the previous revenue recognition
standard in effect prior to the adoption of IFRS 15 ("IAS 18 -
Revenue"). See Note 3 to the condensed consolidated financial
statements for a reconciliation.
(3) Operating expenses adjusted for: depreciation, amortisation, capitalisation
of development expenditure and equity-settled share-based payment.
See Note 6 to the condensed consolidated financial statements
for a reconciliation.
(4) Operating loss adjusted for: depreciation, amortisation, capitalisation
of development expenditure and equity-settled share-based payment.
See Note 6 to the condensed consolidated financial statements
for a reconciliation.
For further information, please contact:
WANdisco plc via FTI Consulting
David Richards, Chief Executive Officer
and Chairman
Erik Miller, Chief Financial Officer
+44 (0)20 3727
FTI Consulting 1137
Matt Dixon / Harry Staight / Chris Birt
/ Kwaku Aning
+44 (0)20 7710
Stifel (Nomad and Joint Broker) 7600
Fred Walsh / Neil Shah / Alex Price
/ Rajpal Padam
+44 (0)20 7418
Peel Hunt (Joint Broker) 8900
Edward Knight / Nick Prowting
+44 (0)20 7220
WH Ireland Limited (Joint Broker) 1666
Adam Pollock
About WANdisco
WANdisco is the LiveData company that empowers enterprises to
revolutionize their IT infrastructure with its ground-breaking
DConE technology that powers the WANdisco Fusion platform, enabling
companies to generate hyperscale economics with the same IT budget
- across multiple development environments, data centres, and cloud
providers.
WANdisco Fusion powers hundreds of the Global 2000, including
Cisco Systems, Allianz, AMD, Juniper, Morgan Stanley and more. With
significant OEM relationships with IBM and Alibaba and go-to-market
partnerships with Amazon Web Services, Microsoft Azure, Google
Cloud, Oracle and other industry titans, WANdisco is igniting a
LiveData movement worldwide.
For more information on WANdisco, visit
http://www.wandisco.com
BUSINESS REVIEW
This has been an important year for WANdisco, as we have begun
to unlock the significant potential in cloud computing. We have
significantly extended our relationship with Microsoft, gaining
co-sell status that allows our WANdisco Fusion platform to be sold
as a standard offering with Microsoft's Cloud Solution, Azure.
Throughout the year we have continued to build on this foundation
and have closed a number of strategic deals with high profile
Microsoft customers. These initial deployments with Microsoft will
allow their customers to migrate their data to Microsoft Azure,
which was previously impossible to do without a prolonged outage
leading to increased cost and serious operational issues.
Our development efforts, increasingly cloud focused, has enabled
the release of the first ever product to provide digital businesses
the ability to constantly replicate data seamlessly between cloud
regions, or different cloud vendors. Early success in the cloud
have also led to an evolutionary transition towards predictable,
annual recurring cloud revenue and away from large and difficult to
predict on-premises transactions. Our initial cloud deployments,
along with many more in our pipeline, are structured as annual
recurring licence revenue, which should lend greater predictability
to the business as the number and value of contracts grow over
time.
Additionally, we significantly strengthened our relationship
with IBM, increasing the royalty payable to the Group including a
contractual minimum commitment and expanding its footprint in the
IBM channel with the release of Fusion for IBM BigSQL. Finally, as
an additional proof point for the strategic importance of WANdisco
Fusion to cloud providers, we also signed an OEM agreement with
Alibaba, and have completed the integration of WANdisco Fusion with
Alibaba's Cloud Solution. After the end of the year we furthered
our cloud relationships by achieving Advanced Technology Partner
status with AWS. This is designated as the highest tier of
technology partners.
Big Data and cloud - WANdisco Fusion
Our Big Data product, WANdisco Fusion, has continued to secure
prominent new customers, particularly within automotive,
healthcare, electronics technology and telecommunications. These
customers are using Fusion for a number of use cases including
on-premises to cloud replication and disaster recovery. On-premises
Hadoop implementations still remain an important part of our
current business, with a significant, but smaller total addressable
market than cloud computing - which is also growing faster. We have
strengthened our relationship with our OEM partner IBM, which will
allow us to efficiently and profitably service the on-premises
segment of our business.
We are very excited about our early strides in the cloud
computing segment of our business, with significant strategic
partnerships being established in the year. In March 2018, we
signed an OEM with the largest cloud provider in China and Asia,
Alibaba, which will see our Fusion product launched as the Alibaba
standard for replication to the Alibaba Cloud.
Also, in March 2018, we became a major co-sell partner with
Microsoft, whose Azure cloud service is the second largest cloud
provider only behind Amazon Web Services. Microsoft has been very
successful in transitioning their business model from on-premises
applications to the cloud and have made many of the business
standard applications used worldwide available in the cloud. Like
all cloud service providers, they have not been able to solve the
problem of getting customers' data at scale to the cloud without
the customer experiencing a significant disruption to service. They
have recognised that only WANdisco Fusion can solve this problem
for them, and we already have seen significant early traction with
their customers, with a number of strategic deals in the year
across a diverse range of sectors including banking, semiconductors
and retail.
Cloud deals have a different revenue and cash profile than our
on-premises perpetual licence deals, with initially smaller deals
that are structured as annual recurring billings, rather than a
large upfront payment, with only future maintenance revenues. Cloud
deals offer the customer the ability to start with a modest
implementation, and then both expand the size and extend the
duration of the contract over time. This should build an annuity of
revenue from each customer that is predictable and expanding on an
annual basis, leading to a more predictable business model for
WANdisco.
Source Code Management ("SCM")
In 2018, we maintained our sales focus for our SCM products and
we continue to see an opportunity in the segment of the SCM market
that we focus on. Software development continues to become more
geographically and organisationally distributed, bringing greater
challenges in control and efficiency, both amongst software
publishers and in industry more generally, which drives the
continuing need for SCM products.
Our sales and development expenditures are modest for our SCM
products, and revenue consisted primarily of renewals from existing
customers.
Protecting our advantage
WANdisco's intellectual property, which is based on complex
mathematics developed over several years, is well protected; we
have more than 42 patents filed to date with 21 now granted.
Furthermore, WANdisco Fusion is used every day, at significant
scale, by major brands across multiple sectors worldwide - those
applications feed back into our product development, allowing for
continuous improvements.
People
Our people are vital to our success, and WANdisco is proud to
employ some of the most qualified and experienced talent in
distributed computing and data science. As a Company, we are
committed to providing competitive employment conditions as well as
very challenging and stimulating work, to ensure we attract and
retain the best people.
Our people also make a significant contribution to our local
communities. We have initiated a range of creative schemes to
inspire schoolchildren about the potential of data science. David
Richards, our Chairman and Co-Founder, established the David &
Jane Richards Family Foundation to fund data science programmes in
UK schools.
The Board
In November 2018, Bob Corey was welcomed to the Board. Bob
brings more than 30 years of executive and financial management
experience in public and private software and hardware companies in
Silicon Valley. Bob has deep corporate governance experience and
has served on numerous Boards in Silicon Valley as Chairman of the
Board, Chairman of the Audit Committee and as a member of
Remuneration, Nomination and Governance committees.
Medium-term strategic opportunity
As the market for live data and multi-cloud continues to
accelerate, the Group has identified the following medium-term
strategic opportunity for the business at the heart of the cloud
ecosystem. Across all OEMs there is a potential for annual minimum
commitments to aggregate to more than $25m in the medium-term. At
scale cloud migration is likely to be a multi-year revenue
opportunity charged at a premium. The opportunity for cloud
migration is in excess of hundreds of petabytes of data to be
migrated over the coming years, presenting a cumulative revenue
opportunity of over $50 million in the medium-term. Over and beyond
our OEM relationships, there is an opportunity for multi-cloud to
grow to over $25 million of annual recurring revenue. Other use
cases outside of OEMs, including Disaster Recovery, Datalake and
on-premises, represents an ongoing medium-term opportunity of over
$10m of annual revenue.
Outlook
We are seeing increasingly strong market traction for our
products as the global demand for Big Data and cloud migration
unfolds. Our Fusion product sits at the heart of this evolution and
when combined with our channel partners such as IBM, Microsoft,
Alibaba and Amazon Web Services, we continue to see strong demand
for our products. We have a strong pipeline of deals from both our
channel partners and direct sales.
In addition, we continue to develop our partner network, to
expand our total addressable market and ensure our go-to-market
activities for Fusion are fully optimised. The Company has a robust
and strengthening sales pipeline which underpins the Board's
continued confidence in achieving forecast expectations.
FINANCIAL REVIEW
Like all companies, as required by the International Accounting
Standards Board "IASB" the Group has initially adopted IFRS 15
"Revenue from Contracts with Customers" effective 1 January 2018.
The effect of initially applying IFRS 15 is mainly attributed to
the following:
-- Subscription term licence agreements are now split into a
licence and maintenance and support element with the earlier
recognition of the licence element reducing deferred revenue;
-- Recognition of an asset (receivable) for the element of
licence revenue recognised above relating to a future year payment
instalment; and
-- Accrued commission costs are deferred across the period over
which the related revenue is recognised.
IFRS 15 establishes a comprehensive framework for determining
whether, how much and when revenue is recognised. It replaced IAS
18 "Revenue", the previous reporting standard. The Group has
adopted IFRS 15 using the cumulative effect method (without
practical expedients), with the effect of initially applying this
standard recognised at the date of initial application (i.e. 1
January 2018). Accordingly, the information presented for 2017 has
not been restated - i.e. it is presented, as previously reported,
under IAS 18, IAS 11 and related interpretations.
Deferred revenue from sales booked during 2018 and in previous
years, and not yet recognised as revenue, is $4.3 million at 31
December 2018 (at 31 December 2017 this stood at $14.2 million,
which was reduced to $5.5 million on a like-for-like basis post
IFRS 15). Our deferred revenue represents future revenue from new
and renewed contracts, many of them spanning multiple years.
Adjusted EBITDA loss(4) was $9.4 million (2017: $0.6 million).
The increased loss was due to the strategic investments we are
making in our channel partner relationships and engineering
capabilities to drive long-term growth. These investments coincide
with lower bookings and a reduction in revenue as we continue to
transition toward a subscription model.
Statutory loss for the year increased to $18.6m (2017:
$13.5m).
Big Data and cloud - WANdisco Fusion
Big Data revenue was $10.8 million (2017: $11.1 million),
reflecting a partial shift to cloud-based revenues with recurring
annual revenues and some deals that were delayed to future
years.
While contract wins continue to exhibit variability in the
timing of their completion, we expect the transition to more annual
recurring revenues to provide greater predictability in the
future.
Source Code Management
Source Code Management "SCM" revenue for the year was $6.2
million (2017: $8.5 million). The adoption of IFRS 15 and its
impact on deferred revenue at the beginning of the year negatively
impacted SCM revenues.
The majority of revenues have come from contract renewals, and
the SCM product line continued to generate positive margin
contribution due to its product maturity, strong licence renewals
from existing customers and the inherent operating leverage in the
business.
Operating costs
Cash overheads(3) increased in the year as we made investments
in go-to-market resources and engineering, rising to $29.8 million
from $24.5 million in 2017.
Operating expenses increased to $37.6m (2017: $27.4m) due to the
reasons above, an increase in the share-based payment charge of
$3.7m and lower development capitalisation of $1.4m.
Product development expenditure capitalised in the year was $4.9
million (2017: $6.3 million). All of this expenditure was
associated with new product features. The lower amount for 2018 as
compared to the prior year reflects lower capitalisation of
development costs and not a reduction in gross research and
development spend.
Our headcount was 148 as at 31 December 2018 (December 2017:
132). Headcount increases in the year were principally in Sales and
Marketing and Engineering as we added capacity to service our new
and expanded channel partner relationships and develop new
cloud-focused products.
Profit and loss
Adjusted EBITDA(4) loss for the year was $9.4 million (2017:
$0.6 million).
The loss after tax for the year increased to $18.6 million
(2017: $13.5 million), as a result of the lower revenue and
increased overheads and share-based payment charge. The exceptional
finance gain of $2.8 million (2017: $4.0 million loss) arose from
the retranslation of intercompany balances at 31 December 2018,
reflecting the reduction in sterling against the US dollar. The
impact of FX rate changes on the financial statements should be
restricted to the retranslation of US dollar denominated
intercompany loans, as opposed to the operating activities of the
business. An equal and opposite translation gain on the net assets
of overseas net assets in reserves result in no impact on the Group
net assets.
Balance sheet and cash flow
Trade and other receivables at 31 December 2018 were $7.4
million (31 December 2017: $6.0 million, which was increased to
$7.3 million on a like-for-like basis post IFRS 15). This includes
$1.8 million of trade receivables (31 December 2017: $2.1 million)
and $5.6 million related to non-trade receivables (31 December
2017: $3.9 million, which was increased to $5.2 million on a
like-for-like basis post IFRS 15).
Net consumption of cash was $16.7 million before financing
(2017: $5.3 million), resulting in a closing cash balance of $10.8
million at 31 December 2018. The consumption of cash was due
primarily to lower revenues and an increase in Cash overheads. At
31 December 2018 we had drawings under our revolving credit
facility with Silicon Valley Bank of $3.9 million.
Brexit
The Company has analysed the potential impact on the Company in
the following parameters:
-- Foreign exchange fluctuations;
-- Personnel matters; and
-- Export/import.
Foreign exchange
Wandisco plc is a geographically dispersed software development
organisation. The functional currency is US dollars and all of our
revenue is denominated in US dollars. Nearly all of our customers
are in the USA. Brexit is not expected have a material effect on
revenue.
From a cost perspective, approximately 1/3 of our operating
costs are denominated in sterling. Depending on the type of Brexit,
sterling may either appreciate or depreciate against the US dollar,
and this may impact profitability accordingly.
Personnel matters
As a technology company at the cutting edge of research, our
business depends on being able to attract talent from everywhere.
Presently we employ a small number of EU nationals in our UK
operations. Potential changes to immigration controls and visa
requirements may add complexity and cost to attract such
individuals in the future. It is difficult to quantify the costs at
this stage until the extent of the immigration issues becomes
known, but potentially legal costs and other compliance related
expenses may rise.
Export/import
Wandisco does not export any physical goods nor are any physical
goods a component of cost of goods sold. We typically
electronically deliver our software to our customers, thus the
re-imposition of border controls on imports or exports to the EU
should not have a material effect on our business. Nearly all of
our customers are invoiced out of the USA in US dollars, and
therefore no issues with VAT compliance are envisaged as well.
Subsequent events
After the year end on 14 February 2019 we announced the
subscription of 2,489,499 new ordinary shares of ten pence each in
the Company by existing shareholders at a price of 546 pence (a
premium of 9.2% on the closing share price on 13 February 2019)
raising gross proceeds of $17.5m. The proceeds will be used to
support our relationships with strategic partners and provide
growth working capital.
Adoption of QCA Code
The Directors recognise the importance of good corporate
governance and have chosen to apply the Quoted Companies Alliance
Corporate Governance Code (the "QCA Code"). The QCA Code was
developed by the QCA in consultation with a number of significant
institutional small company investors, as an alternative corporate
governance code applicable to AIM companies. The underlying
principle of the QCA Code is that "the purpose of good corporate
governance is to ensure that the Company is managed in an
efficient, effective and entrepreneurial manner for the benefit of
all shareholders over the longer term".
The QCA Code contains 10 separate principles of good corporate
governance. WANdisco complied with all 10 principles during the
year, with the exception of Principle 5 which recommends that the
Chairman and CEO positions are separate roles, and at least two
directors are independent.
For part of the year there was only one independent
Non-executive Director (Karl Monaghan). This was resolved on 19
November 2018 following the appointment of Bob Corey as Vice Chair
and Senior Non-executive Director.
Our Nomination Committee regularly considers candidates for
additional independent NEDs to add to the Board, information about
which, including the Board Committees, can be found on our website.
Further information on compliance with the QCA Code is provided in
our 2018 Annual Report and Accounts.
Consolidated statement of profit or loss and other comprehensive
income
For the year ended 31 December 2018
Year ended Year ended
31 December 2018 31 December 2017
Exceptional Exceptional
items items
Pre- (Note Pre- (Note
exceptional 5) Total exceptional 5) Total
Continuing
operations Note $'000 $'000 $'000 $'000 $'000 $'000
------------ ---- ------- ------ ---- ----------- ----------- -------- ------------ ----------- --------
Revenue 4 17,019 - 17,019 19,637 - 19,637
Cost of sales (1,544) - (1,544) (1,972) - (1,972)
----------------------------------- ---- ----------- ----------- -------- ------------ ----------- --------
Gross profit 15,475 - 15,475 17,665 - 17,665
Operating expenses (37,592) - (37,592) (27,360) - (27,360)
----------------------------------- ---- ----------- ----------- -------- ------------ ----------- --------
Operating loss (22,117) - (22,117) (9,695) - (9,695)
--------------------------- ------ ---- ----------- ----------- -------- ------------ ----------- --------
Finance income 443 2,793 3,236 29 - 29
Finance costs (514) - (514) (344) (3,994) (4,338)
----------------------------------- ---- ----------- ----------- -------- ------------ ----------- --------
Net finance (costs)/income (71) 2,793 2,722 (315) (3,994) (4,309)
--------------------------- ------ ---- ----------- ----------- -------- ------------ ----------- --------
(Loss)/profit before
tax (22,188) 2,793 (19,395) (10,010) (3,994) (14,004)
Income tax 802 - 802 489 - 489
----------------------------------- ---- ----------- ----------- -------- ------------ ----------- --------
(Loss)/profit for the
year (21,386) 2,793 (18,593) (9,521) (3,994) (13,515)
--------------------------- ------ ---- =========== =========== ======== ============ =========== ========
Other comprehensive income
Items that are or may be reclassified to profit or loss:
Foreign operations - foreign currency
translation differences (81) (2,793) (2,874) (184) 3,994 3,810
----------------------------------------- ----------- ----------- -------- ------------ ----------- --------
Other comprehensive income for
the year, net of tax (81) (2,793) (2,874) (184) 3,994 3,810
----------------------------------------- ----------- ----------- -------- ------------ ----------- --------
Total comprehensive income for
the year (21,467) - (21,467) (9,705) - (9,705)
========================================= =========== =========== ======== ============ =========== ========
Loss per
share
Basic and diluted loss per
share 7 ($0.45) ($0.36)
=================================== ==== =========== =========== ======== ============ =========== ========
The notes form an integral part of these condensed consolidated
financial statements.
Consolidated statement of financial position
At 31 December 2018
31 December 31 December
2018 2017
Note $'000 $'000
------------------------------ ---- ----------- -----------
Assets
Property, plant and equipment 828 556
Intangible assets 5,516 7,081
Other non-current assets 8 2,580 889
------------------------------- ---- ----------- -----------
Non-current assets 8,924 8,526
------------------------------- ---- ----------- -----------
Trade and other receivables 9 7,399 5,969
Cash and cash equivalents 10,757 27,396
------------------------------- ---- ----------- -----------
Current assets 18,156 33,365
------------------------------- ---- ----------- -----------
Total assets 27,080 41,891
------------------------------- ---- ----------- -----------
Equity
Share capital 6,361 6,156
Share premium 115,909 115,196
Translation reserve (7,348) (4,474)
Merger reserve 1,247 1,247
Retained earnings (102,365) (100,658)
------------------------------- ---- ----------- -----------
Total equity 13,804 17,467
=============================== ==== =========== ===========
Liabilities
Loans and borrowings 10 98 3,310
Deferred income 11 1,277 7,058
Deferred tax liabilities 3 4
------------------------------- ---- ----------- -----------
Non-current liabilities 1,378 10,372
------------------------------- ---- ----------- -----------
Current tax liabilities 7 11
Loans and borrowings 10 3,990 984
Trade and other payables 4,860 5,953
Deferred income 11 3,041 7,102
Deferred government grant - 2
Current liabilities 11,898 14,052
------------------------------- ---- ----------- -----------
Total liabilities 13,276 24,424
------------------------------- ---- ----------- -----------
Total equity and liabilities 27,080 41,891
=============================== ==== =========== ===========
The notes form an integral part of these condensed consolidated
financial statements.
Consolidated statement of changes in equity
For the year ended 31 December 2018
Attributable to owners of the Company
--------------------------------------------------------------
Share Share Translation Merger Retained Total
capital premium reserve reserve earnings equity
Year ended 31 December 2017 $'000 $'000 $'000 $'000 $'000 $'000
----------------------------------- -------- -------- ----------- -------- --------- --------
Balance at 1 January 2017 5,638 94,526 (8,284) 1,247 (89,344) 3,783
Total comprehensive income for
the year
Loss for the year - - - - (13,515) (13,515)
Other comprehensive income for
the year - - 3,810 - - 3,810
----------------------------------- -------- -------- ----------- -------- --------- --------
Total comprehensive income for
the year - - 3,810 - (13,515) (9,705)
----------------------------------- -------- -------- ----------- -------- --------- --------
Transactions with owners of
the Company
Contributions and distributions
Equity-settled share-based payment - - - - 2,201 2,201
Proceeds from share placing 401 20,131 - - - 20,532
Share options exercised 117 539 - - - 656
Total transactions with owners
of the Company 518 20,670 - - 2,201 23,389
----------------------------------- -------- -------- ----------- -------- --------- --------
Balance at 31 December 2017 6,156 115,196 (4,474) 1,247 (100,658) 17,467
=================================== ======== ======== =========== ======== ========= ========
Adjustment on application of
IFRS 15 - see Note 3 - - - - 11,029 11,029
----------------------------------- -------- -------- ----------- -------- --------- --------
Adjusted balance at 1 January
2018 6,156 115,196 (4,474) 1,247 (89,629) 28,496
Total comprehensive income for
the year
Loss for the year - - - - (18,593) (18,593)
Other comprehensive income for
the year - - (2,874) - - (2,874)
----------------------------------- -------- -------- ----------- -------- --------- --------
Total comprehensive income for
the year - - (2,874) - (18,593) (21,467)
----------------------------------- -------- -------- ----------- -------- --------- --------
Transactions with owners of
the Company
Contributions and distributions
Equity-settled share-based payment - - - - 5,857 5,857
Share options exercised 205 713 - - - 918
Total transactions with owners
of the Company 205 713 - - 5,857 6,775
----------------------------------- -------- -------- ----------- -------- --------- --------
Balance at 31 December 2018 6,361 115,909 (7,348) 1,247 (102,365) 13,804
=================================== ======== ======== =========== ======== ========= ========
The notes form an integral part of these condensed consolidated
financial statements.
Consolidated statement of cash flows
For the year ended 31 December 2018
Year ended Year ended
31 December 31 December
2018 2017
Note $'000 $'000
--------------------------------------------------------- ---- ------------ ------------
Cash flows from operating activities
Loss for the year (18,593) (13,515)
Adjustments for:
* Depreciation of property, plant and equipment 388 215
* Amortisation of intangible assets 6,475 6,699
* Loss on disposal of property, plant and equipment 3 -
* Net finance costs 71 315
* Income tax (802) (489)
* Foreign exchange (2,517) 3,860
* Equity-settled share-based payment 12 5,857 2,201
---------------------------------------------------------- ---- ------------ ------------
(9,118) (714)
--------------------------------------------------------- ---- ------------ ------------
Changes in:
* Trade and other receivables 281 (1,618)
* Trade and other payables (925) 1,331
* Deferred income (1,230) 1,668
* Deferred government grant (2) (11)
Net working capital change (1,876) 1,370
---------------------------------------------------------- ---- ------------ ------------
Cash (used in)/generated from operating
activities (10,994) 656
Interest paid (399) (286)
Income tax received 51 1,364
---------------------------------------------------------- ---- ------------ ------------
Net cash (used in)/generated from operating
activities (11,342) 1,734
---------------------------------------------------------- ---- ------------ ------------
Cash flows from investing activities
Interest received 213 29
Proceeds from sale of property, plant and
equipment 5 1
Acquisition of property, plant and equipment (677) (254)
Acquisition of third party software - (500)
Development expenditure (4,910) (6,303)
Net cash used in investing activities (5,369) (7,027)
---------------------------------------------------------- ---- ------------ ------------
Cash flows from financing activities
Proceeds from issue of shares 918 21,188
Net proceeds from bank loan (111) 4,000
Payment of finance lease liabilities (95) (89)
---------------------------------------------------------- ---- ------------ ------------
Net cash from financing activities 712 25,099
---------------------------------------------------------- ---- ------------ ------------
Net (decrease)/increase in cash and cash
equivalents (15,999) 19,806
Cash and cash equivalents at 1 January 27,396 7,558
Effect of movements in exchange rates on
cash and cash equivalents (640) 32
---------------------------------------------------------- ---- ------------ ------------
Cash and cash equivalents at 31 December 10,757 27,396
========================================================== ==== ============ ============
The notes form an integral part of these condensed consolidated
financial statements.
Notes to the condensed consolidated financial statements
For the year ended 31 December 2018
1. Reporting entity
WANdisco plc (the "Company") is a public limited company
incorporated and domiciled in Jersey. The Company's ordinary shares
are traded on AIM. These condensed consolidated financial
statements ("Financial statements") as at and for the year ended 31
December 2018 comprise the Company and its subsidiaries (together
referred to as the "Group"). The Group is primarily involved in the
development and provision of global collaboration software.
2. Basis of preparation
a Basis of accounting
Whilst the financial information included in this preliminary
announcement has been prepared on the basis of the requirements of
International Financial Reporting Standards ("IFRSs") in issue, as
adopted by the European Union ("EU") and effective at 31 December
2018, this announcement does not itself contain sufficient
information to comply with IFRS.
The financial information contained in this preliminary
announcement does not constitute the company's statutory accounts
for the years ended 31 December 2018 or 31 December 2017 but is
derived from these accounts. Statutory accounts for the year ended
31 December 2017 have been delivered to the registrar of companies
with the Jersey Financial Services Commission ("JFSC"), and those
for the year ended 31 December 2018 will be delivered to the
registrar in due course. The auditor has reported on those
accounts; the audit reports were (i) unqualified, (ii) did not
include a reference to any matters to which the auditor drew
attention by way of emphasis without qualifying their report and
(iii) did not contain a statement under section 113B (3) or (6) of
the Companies (Jersey) Law 1991.
The Consolidated financial statements have been prepared in
accordance with IFRSs as adopted for use in the EU. The Group has
applied all accounting standards and interpretations issued by the
IASB and International Financial Reporting Committee relevant to
its operations and which are effective in respect of these
Financial statements.
The preliminary announcement has been prepared using the
accounting policies published in the Group's accounts for the year
ended 31 December 2017, which are available on the Company's
website. From 1 January 2018 the new standards set out below were
adopted by the Group.
(i) New and amended standards adopted by the Group
The following new standards and amendments to standards that are
effective for the first time for the financial year beginning 1
January 2018 have been adopted:
- IFRS 9 "Financial Instruments"
- IFRS 15 "Revenue from Contracts with Customers"
- IFRIC 22 "Foreign Currency Transactions and Advance Consideration"
- Clarifications to IFRS 15 "Revenue from Contracts with Customers"
- Classification and Measurement of Share-based Payment Transactions (Amendments to IFRS 2)
- Applying IFRS 9 "Financial Instruments" with IFRS 4 "Insurance
Contracts" (Amendments to IFRS 1 and IAS 28)
- Annual Improvements to IFRS Standards 2014-2016 Cycle - (Amendments to IFRS 1 and IAS 28)
- Transfers of Investment Property (Amendments to IAS 40)
Apart from IFRS 15 "Revenue from Contracts with Customers" where
the impact is detailed in Note 3 below, these standards and
amendments to standards have not had a material impact on these
Financial statements.
This is the first set of the Group's financial statements where
IFRS 15 "Revenue from Contracts with Customers" and IFRS 9
"Financial Instruments" have been applied. Changes to significant
accounting policies are described in Note 3.
These Financial statements were authorised for issue by the
Company's Board of Directors on 23 April 2019.
(ii) New and amended standards and interpretations issued but
not effective for the financial year beginning 1 January 2019 and
not early adopted
A number of new standards are effective for annual periods
beginning after 1 January 2019 and earlier application is
permitted; however, the Group has not early adopted the new or
amended standards in preparing these Financial statements.
The following standard is expected to have a material impact on
the Group's financial statements in the period of initial
application.
2. Basis of preparation (continued)
a Basis of accounting (continued)
(ii) New and amended standards and interpretations issued but
not effective for the financial year beginning 1 January 2019 and
not early adopted (continued)
IFRS 16 "Leases"
The Group is required to adopt IFRS 16 "Leases" from 1 January
2019. The Group has assessed the estimated impact that initial
application of IFRS 16 will have on its consolidated financial
statements, as described below. The actual impacts of adopting the
standard on 1 January 2019 may change as the new accounting
policies are subject to change until the Group presents its first
financial statements that include the date of initial
application.
IFRS 16 introduces a single, on-balance sheet lease accounting
model for lessees. A lessee recognises a right-of-use asset
representing its right to use the underlying asset and a lease
liability representing its obligation to make lease payments. There
are recognition exemptions for short-term leases and leases of
low-value items.
IFRS 16 replaces existing lease guidance, including IAS 17
"Leases", IFRIC 4 "Determining Whether an Arrangement Contains a
Lease", SIC-15 "Operating Leases - Incentives" and SIC-27
"Evaluating the Substance of Transactions Involving the Legal Form
of a Lease".
- Impact on application
The Group will recognise new assets and liabilities for its
operating leases of office premises. The nature of expenses related
to those leases will now change because the Group will recognise a
depreciation charge for right-of-use assets and interest expense on
lease liabilities.
Previously, the Group recognised operating lease expense on a
straight-line basis over the term of the lease, and recognised
assets and liabilities only to the extent that there was a timing
difference between actual lease payments and the expense
recognised.
No significant impact is expected for the Group's finance
leases.
Based on the information currently available, the Group
estimates that it will recognise additional lease liabilities of
approximately $2.0m as at 1 January 2019.
- Transition
The Group plans to apply IFRS 16 initially on 1 January 2019,
using the modified retrospective approach. Therefore, the
cumulative effect of adopting IFRS 16 will be recognised as an
adjustment to the opening balance of retained earnings at 1 January
2019, with no restatement of comparative information.
b Going concern
These Financial statements have been prepared on a going concern
basis, which assumes that the Group will be able to meet the
mandatory repayment terms of the banking facilities as disclosed in
Note 10.
As at 31 December 2018 the Group had net assets of $13.8m (31
December 2017: $17.5m), including cash of $10.8m (2017: $27.4m) as
set out in the consolidated statement of financial position, with a
debt facility drawn of $3.9m (2017: debt facility drawn of $4.0m).
In the year ended 31 December 2018, the Group incurred a loss
before tax of $19.4m (2017: $14.0m) and net cash outflows before
financing of $16.7m (2017: $5.3m).
During 2018, the performance of the Group declined, with
revenues reducing by 13% to $17.0m (2017: $19.6m) and operating
loss increasing to $22.1m (2017: $9.7m).
The Directors have prepared a detailed budget and forecasts of
the Group's expected performance over a period covering at least
the next twelve months from the date of the approval of these
Financial statements. As well as modelling the realisation of the
sales pipeline, these forecasts also cover a number of scenarios
and sensitivities in order for the Board to satisfy itself that the
Group remains within its current cash facilities in Note 10. The
model includes the injection of $17.5m of cash which was raised
following the year end on 14 February 2019, as detailed in Note
14.
Whilst the Directors are confident in the Group's ability to
grow bookings, the Board's sensitivity modelling (which considered
the impact of Brexit) shows that the Group can remain within its
facilities in the event that bookings growth is delayed (i.e.
bookings do not increase from the level reported in 2018) for a
period in excess of twelve months. The Directors' financial
forecasts and operational planning and modelling also include the
actions, under the control of the Group, that they could take to
further significantly reduce the cost base during the coming year
in the event that longer-term bookings were set to remain
consistent with the level reported in 2018. On the basis of this
financial and operational modelling, the Directors believe that the
Group has the capability and the operational agility to react
quickly, cut further costs from the business and ensure that the
cost base of the business is aligned with its sales bookings, cash
revenue and funding scale.
As a consequence, the Directors have a reasonable expectation
that the Group can continue to operate and to operate within its
existing facilities and be able to meet its commitments and
discharge its liabilities in the normal course of business for a
period not less than twelve months from the date of approval of
these Financial statements. Accordingly, they continue to adopt the
going concern basis in preparing the Group financial
statements.
2. Basis of preparation (continued)
c Functional and presentational currency
The consolidated financial statements are presented in US
dollars, which is the functional currency of the Group, as the
revenue for the Group is predominately derived in this currency.
Billings to the Group's customers during the year by WANdisco, Inc.
were all in US dollars with certain costs being incurred by
WANdisco International Limited in sterling and WANdisco, Pty Ltd in
Australian dollars. All financial information has been rounded to
the nearest thousand US dollars unless otherwise stated.
d Alternative performance measures
The Group uses a number of alternative performance measures
("APMs") which are non-IFRS measures to monitor the performance of
its operations. The Group believes these APMs provide useful
historical financial information to help investors and other
stakeholders evaluate the performance of the business and are
measures commonly used by certain investors for evaluating the
performance of the Group. In particular, the Group uses APMs which
reflect the underlying performance on the basis that this provides
a more relevant focus on the core business performance of the
Group. The Group has been using the following APMs on a consistent
basis and they are defined and reconciled as follows:
- Cash overheads: Operating expenses adjusted for: depreciation,
amortisation, capitalisation of development expenditure and
equity-settled share-based payment.
- Adjusted EBITDA: Operating loss adjusted for: depreciation,
amortisation, capitalisation of development expenditure and
equity-settled share-based payment.
e Use of judgements and estimates
In preparing these Financial statements, management has made
judgements and estimates that affect the application of the Group's
accounting policies and the reported amounts of assets and
liabilities, income and expense. Actual results may differ from
these estimates.
The significant judgements made by management in applying the
Group's accounting policies and the key sources of estimation
uncertainty were the same as those described in the last annual
financial statements, except for new significant judgements and key
sources of estimation uncertainty related to the application of
IFRS 15, which are described in Note 3.
3. Changes in significant accounting policies - IFRS 15
The Group has initially applied IFRS 15 "Revenue from Contracts
with Customers" from 1 January 2018. Several other new standards
are also effective from 1 January 2018, but they do not have a
material effect on the Group's financial statements.
Due to the transition method chosen by the Group in applying
this standard, comparative information throughout these Financial
statements has not been restated to reflect the requirements of the
new standard.
IFRS 15 establishes a comprehensive framework for determining
whether, how much and when revenue is recognised. It replaced IAS
18 "Revenue", IAS 11 "Construction Contracts" and related
interpretations.
The Group has adopted IFRS 15 using the cumulative effect method
(without practical expedients), with the effect of initially
applying this standard recognised at the date of initial
application (i.e. 1 January 2018). Accordingly, the information
presented for 2017 has not been restated - i.e. it is presented, as
previously reported, under IAS 18, IAS 11 and related
interpretations.
The effect of initially applying this standard is as
follows:
a) Subscription term licence agreements are now split into a
licence and maintenance and support element with the earlier
recognition of the licence element reducing deferred revenue;
b) Recognition of an asset (receivable) for the element of
licence revenue recognised above relating to a future year payment
instalment; and
c) Accrued sales commissions deferred across the period over
which the related revenue is recognised.
The following table summarises the impact of transition to IFRS
15 on retained earnings at 1 January 2018.
Impact
of adopting
IFRS 15
at
1 January
2018
Retained earnings Note $'000
----------------------------------------------------------- ---- ------------
Deferred revenue: Earlier recognition of licence revenue
from subscription term licence agreements 3(a) 8,612
Accrued income: Recognition of an asset for licence
revenue recognised from future period payment instalments 3(b) 1,763
Other receivables: Accrued sales commissions deferred 3(c) 654
------------------------------------------------------------ ---- ------------
Impact at 1 January 2018 11,029
============================================================ ==== ============
3. Changes in significant accounting policies - IFRS 15 (continued)
The following tables summarise the impacts of adopting IFRS 15
on the Consolidated statement of profit or loss and other
comprehensive income for the year ended 31 December 2018 and the
Consolidated statement of financial position for each of the line
items affected. There was no material impact on the Consolidated
statement of cash flows for the year ended 31 December 2018.
Impact on the consolidated statement Year ended Year ended
of profit or loss and other comprehensive 31 December 31 December
income 2018 2017
-----------------------------------
Amounts Amounts
without without
adoption adoption
As reported of IFRS of
(IFRS 15) Adjustments 15 IFRS 15
Continuing operations Note $'000 $'000 $'000 $'000
--------------------------------------- ---- ----------- ----------- --------- ------------
Revenue 3(a) 17,019 (4,828) 12,191 19,637
Cost of sales 3(c) (1,544) 78 (1,466) (1,972)
--------------------------------------- ---- ----------- ----------- --------- ------------
Gross profit 15,475 (4,750) 10,725 17,665
Cash overheads (29,782) - (29,782) (24,548)
--------------------------------------- ---- ----------- ----------- --------- ------------
Adjusted EBITDA including development
expenditure (14,307) (4,750) (19,057) (6,883)
Development expenditure capitalised 4,910 - 4,910 6,303
--------------------------------------- ---- ----------- ----------- --------- ------------
Adjusted EBITDA (9,397) (4,750) (14,147) (580)
Amortisation and depreciation (6,863) - (6,863) (6,914)
Equity-settled share-based payment (5,857) - (5,857) (2,201)
Operating loss (22,117) (4,750) (26,867) (9,695)
Net finance income/(costs) 3(b) 2,722 (230) 2,492 (4,309)
--------------------------------------- ---- ----------- ----------- --------- ------------
Loss before tax (19,395) (4,980) (24,375) (14,004)
Income tax 802 - 802 489
--------------------------------------- ---- ----------- ----------- --------- ------------
Loss for the year (18,593) (4,980) (23,573) (13,515)
Other comprehensive income for
the year, net of tax (2,874) - (2,874) 3,810
--------------------------------------- ---- ----------- ----------- --------- ------------
Total comprehensive income for
the year (21,467) (4,980) (26,447) (9,705)
======================================= ==== =========== =========== ========= ============
Impact on the consolidated statement 31 December 31 December
of financial position 2018 2017
-----------------------------------------
Amounts
Amounts without without
As reported adoption adoption
(IFRS 15) Adjustments of IFRS 15 of IFRS 15
Note $'000 $'000 $'000 $'000
----------------------------- -------- ----------- ----------- --------------- -----------
Non-current assets 3(b),(c) 8,924 (1,691) 7,233 8,526
Current assets 3(b),(c) 18,156 (2,991) 15,165 33,365
----------------------------- -------- ----------- ----------- --------------- -----------
Total assets 27,080 (4,682) 22,398 41,891
----------------------------- -------- ----------- ----------- --------------- -----------
Total equity 13,804 (16,009) (2,205) 17,467
----------------------------- -------- ----------- ----------- --------------- -----------
Non-current liabilities 3(a) 1,378 6,256 7,634 10,372
Current liabilities 3(a) 11,898 5,071 16,969 14,052
----------------------------- -------- ----------- ----------- --------------- -----------
Total liabilities 13,276 11,327 24,603 24,424
----------------------------- -------- ----------- ----------- --------------- -----------
Total equity and liabilities 27,080 (4,682) 22,398 41,891
============================= ======== =========== =========== =============== ===========
The principles in IFRS 15 must be applied using the following
five step model:
1. Identify the contract(s) with a customer.
2. Identify the performance obligations in the contract.
3. Determine the transaction price.
4. Allocate the transaction price to the performance obligations
in the contract.
5. Recognise revenue when or as the entity satisfies its
performance obligations.
4. Revenue and segmental analysis
a Operating segments
The Directors consider there to be one operating segment, being
that of development and sale of licences for software and related
maintenance and support.
b Geographical segments
The Group recognises revenue in three geographical regions based
on the location of customers, as set out in the following
table:
Year ended Year ended
31 December 31 December
2018 2017
Revenue $'000 $'000
------------------ ------------ ------------
North America 14,100 16,132
Europe 1,785 2,865
Rest of the world 1,134 640
------------------- ------------ ------------
17,019 19,637
================== ============ ============
Management makes no allocation of costs, assets or liabilities
between these segments since all trading activities are operated as
a single business unit.
c Major products
The Group's core patented technology, Distributed Coordinated
Engine "DConE", enables the replication of data. The Group has
developed software based on this technology which is applied into
two key markets being the Big Data and Source Code Management
markets:
Year ended Year ended
31 December 31 December
2018 2017
Revenue $'000 $'000
----------------------- ------------ ------------
Source Code Management 6,254 8,484
Big Data 10,765 11,153
------------------------ ------------ ------------
17,019 19,637
======================= ============ ============
d Major customers
Included in revenue from Big Data of $10,765,000 (2017:
$11,153,000) are revenues of $5,459,000 (32% of revenue) (2017:
$7,794,000 (40% of revenue)) and $2,471,000 (15% of revenue) (2017:
$nil) which arose from sales to the Group's two largest customers.
No other single customers contributed 10% or more to the Group's
revenue (2017: $nil).
e Split of revenue by timing of revenue recognition
Year ended Year ended
31 December 31 December
2018 2017
Revenue $'000 $'000
-------------------------------------------- ------------ ------------
Products transferred at a point in time 13,472 -
Products and services transferred over time 3,547 -
--------------------------------------------- ------------ ------------
17,019 -
============================================ ============ ============
The Group has initially applied IFRS 15 at 1 January 2018. Under
the transition method chosen, comparative information is not
restated, see Note 3.
f Contract balances
The following table provides information about receivables and
contract assets and liabilities from contracts with customers
31 December 1 January 31 December
2018 2018 2017
$'000 $'000 $'000
---------------------------------------------------------- ----------- --------- -----------
Receivables, which are included in "Other non-current
assets - Accrued income" 2,340 1,626 889
Contract assets, which are included in "Other non-current
assets - Other receivables" 240 333 -
Receivables, which are included in "Trade and other
receivables - Accrued income" 2,654 3,376 2,350
Contract assets, which are included in "Trade and
other receivables - Other receivables" 337 321 -
Contract liabilities, which are included in "Deferred
income" - non-current (1,277) (1,732) (7,058)
Contract liabilities, which are included in "Deferred
income" - current (3,041) (3,816) (7,102)
========================================================== =========== ========= ===========
Contract assets represent deferred sales commissions, see Note
3.
5. Exceptional items
Year ended Year ended
31 December 31 December
2018 2017
Note $'000 $'000
---------------------------------------------- ----- ------------ ------------
Exchange gain/(loss) on intercompany balances 2,793 (3,994)
====================================================== ============ ============
The exceptional gain/(loss) arose on sterling-denominated
intercompany balances. These balances were retranslated at the
closing exchange rate at 31 December 2018, which was 1.27, a 6%
reduction compared to the rate of 1.35 at 31 December 2017.
Sterling to US dollar exchange rates improved during 2017 compared
to 2016, which declined following the Brexit vote on 23 June 2016.
Due to the size and nature of the exchange gain/(loss) in both
years, it has been included as an exceptional item.
The exceptional gain/(loss) on intercompany balances in the
consolidated statement of profit or loss is offset by an equivalent
exceptional exchange (loss)/gain on the retranslation of the
intercompany balances, which is included in the retranslation of
net assets of foreign operations, included in the other
comprehensive income.
6. Non-GAAP profit measures - Cash overheads and Adjusted EBITDA
Year ended Year ended
31 December 31 December
2018 2017
a Reconciliation of operating expenses to "Cash Note
overheads": $'000 $'000
------------------------------------------------ ---- ------------ ------------
Operating expenses (37,592) (27,360)
Adjusted for:
Amortisation and depreciation 6,863 6,914
Equity-settled share-based payment 12 5,857 2,201
Development expenditure capitalised (4,910) (6,303)
------------------------------------------------- ---- ------------ ------------
Cash overheads (29,782) (24,548)
================================================= ==== ============ ============
Year ended Year ended
31 December 31 December
2018 2017
b Reconciliation of operating loss to "Adjusted Note
EBITDA": $'000 $'000
-------------------------------------------------- ---- ------------ ------------
Operating loss (22,117) (9,695)
Adjusted for:
Amortisation and depreciation 6,863 6,914
Equity-settled share-based payment 12 5,857 2,201
--------------------------------------------------- ---- ------------ ------------
Adjusted EBITDA (9,397) (580)
Development expenditure capitalised (4,910) (6,303)
--------------------------------------------------- ---- ------------ ------------
Adjusted EBITDA including development expenditure (14,307) (6,883)
=================================================== ==== ============ ============
7. Loss per share
a Basic loss per share
The calculation of basic loss per share has been based on the
following loss attributable to ordinary shareholders and weighted
average number of ordinary shares outstanding:
Year ended Year ended
31 December 31 December
2018 2017
$'000 $'000
-------------------------------------------------------- ------------ ------------
Loss for the year attributable to ordinary shareholders 18,593 13,515
========================================================= ============ ============
Number Number
of shares of shares
Weighted average number of ordinary shares '000 '000
-------------------------------------------------------- ------------ ------------
Issued ordinary shares at 1 January 40,904 37,068
Effect of shares issued in the year 828 715
--------------------------------------------------------- ------------ ------------
Weighted average number of ordinary shares at 31
December 41,732 37,783
========================================================= ============ ============
2018 2017
$ $
--------------------- ----- -----
Basic loss per share $0.45 $0.36
========================= ===== =====
b Adjusted loss per share
Adjusted loss per share is calculated based on the loss
attributable to ordinary shareholders before exceptional items,
acquisition-related items and the cost of equity-settled
share-based payment, and the weighted average number of ordinary
shares outstanding:
Year ended Year ended
31 December 31 December
2018 2017
Adjusted loss for the year: Note $'000 $'000
------------------------------------------- ---- ------------ ------------
Loss for the year attributable to ordinary
shareholders 18,593 13,515
Adjusted for:
Exceptional items 5 2,793 (3,994)
Equity-settled share-based payment 12 (5,857) (2,201)
-------------------------------------------- ---- ------------ ------------
Adjusted loss for the year 15,529 7,320
============================================ ==== ============ ============
2018 2017
$ $
------------------------ ----- -----
Adjusted loss per share $0.37 $0.19
============================ ===== =====
c Diluted loss per share
Due to the Group having losses in all years presented, the fully
diluted loss per share for disclosure purposes, as shown in the
consolidated statement of profit or loss and other comprehensive
income, is the same as for the basic loss per share.
8. Other non-current assets
31 December 31 December
2018 2017
Due in more than a year: $'000 $'000
------------------------------- ----------- -----------
Other receivables 240 -
Accrued income 2,340 889
--------------------------------- ----------- -----------
Total other non-current assets 2,580 889
================================= =========== ===========
9. Trade and other receivables
31 December 31 December
2018 2017
Due within a year: $'000 $'000
--------------------------------------------- ----- ---- ----------- -----------
Trade receivables 1,810 2,115
Other receivables 1,059 466
Accrued income 2,654 2,350
Corporation tax 1,304 527
Prepayments 572 511
--------------------------------------------- ---------- ----------- -----------
Total trade and other receivables 7,399 5,969
============================================= ========== =========== ===========
10. Loans and borrowings
31 December 31 December
2018 2017
$'000 $'000
--------------------------------------------- ----------- -----------
Non-current liabilities
Unsecured bank loan - 3,111
Finance lease liabilities 98 199
----------------------------------------------- ----------- -----------
98 3,310
--------------------------------------------- ----------- -----------
Current liabilities
Current portion of unsecured bank loan 3,889 889
Current portion of finance lease liabilities 101 95
----------------------------------------------- ----------- -----------
3,990 984
--------------------------------------------- ----------- -----------
Total loans and borrowings 4,088 4,294
=============================================== =========== ===========
At 31 December 2018, the $3.9m of bank loan (2017: $4.0m)
represents term debt drawn down with Silicon Valley Bank. The
facility comprises $3.9m (2017 $5.0m) term debt, with an
interest-only period to 31 May 2018, followed by a three-year
maturity at a floating interest rate charged at 1.5% above the US
prime rate. There is an additional $3.0m available through a
revolving credit facility secured by qualifying accounts
receivable.
The unsecured bank loan contains a covenant stating that at the
end of each quarter the Group's EBITDA, defined in Note 6, should
be within a figure defined by the bank. The Group exceeded this
figure in the fourth quarter of 2018. However, management obtained
a waiver from the bank on 29 March 2019. Accordingly, the loan was
not repaid, but is disclosed in the Consolidated statement of
financial position as due within one year. The EBITDA covenants for
Q1 and Q2 2019 have also been waived by the bank on 29 March 2019.
New targets for Q3 and Q4 2019 will be agreed with the bank in due
course in line with the agreement.
11. Deferred income
Deferred income represents contracted sales for which services
to customers will be provided in future periods. The effect of
initially applying IFRS 15 is described in Note 3.
31 December 31 December
2018 2017
Deferred income which falls due: $'000 $'000
--------------------------------- ----------- -----------
Within a year 3,041 7,102
In more than a year 1,277 7,058
Total deferred income 4,318 14,160
=================================== =========== ===========
12. Share-based payment
The Group operates share option plans for employees of the
Group. Options in the plans are settled in equity in the Company
and are normally subject to a vesting schedule but not conditional
on any performance criteria being achieved.
The terms and conditions of the share option grants are detailed
in the Group annual financial statements for the year ended 31
December 2018.
Year ended Year ended
31 December 31 December
2018 2017
$'000 $'000
------------------------------------------------ ------------ ------------
Total equity-settled share-based payment charge 5,857 2,201
================================================== ============ ============
a Summary of share options outstanding
2018 2017
Number Number
Number of share options outstanding: of options of options
------------------------------------- ----------- -----------
Outstanding at 1 January 4,901,699 4,318,899
Granted during the year 1,649,257 2,020,514
Forfeited during the year (269,824) (572,483)
Exercised during the year (1,619,062) (865,231)
-------------------------------------- ----------- -----------
Outstanding at 31 December 4,662,070 4,901,699
-------------------------------------- ----------- -----------
Exercisable at 31 December 1,823,334 2,073,904
-------------------------------------- ----------- -----------
Vested at the end of the year 1,823,334 2,073,904
====================================== =========== ===========
13. Contingent liabilities
The Group had no contingent liabilities at 31 December 2018 (31
December 2017: None).
14. Subsequent events
On 14 February 2019 the Group announced the subscription of
2,489,499 new ordinary shares of ten pence each in the Company by
existing shareholders at a price of 546 pence (a premium of 9.2% on
the closing share price on 13 February 2019) raising gross proceeds
of $17.5 million. This represents 5.85% of the entire existing
share capital of WANdisco and the subscription shares will be
issued under the Company's existing authorities. The proceeds will
be used to support our relationships with strategic cloud partners
and provide growth working capital.
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
FR CKNDPDBKBDQB
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