TIDMWAND
RNS Number : 8904O
WANdisco Plc
15 June 2022
15 June 2022
WANdisco plc
("WANdisco", the "Company" or the "Group")
Preliminary unaudited results for the year ended 31 December
2021
- Commit to Consume contract structure to drive greater adoption
of WANdisco solutions in future periods
- General Availability of LiveData Migrator for Microsoft Azure
critical to driving pipeline conversion
- Largest ever multi-year contract win with large global automotive supplier
WANdisco (LSE: WAND), the LiveData company announces preliminary
unaudited results for the year ended 31 December 2021.
Financial headlines
-- Revenue for the year of $7.3 million (2020: $10.5 million)
-- Cash overheads(1) of $41.5 million (2020: $36.9 million)
-- Adjusted EBITDA(2) loss of $29.5 million (2020: $22.2 million)
-- Statutory loss from operations of $37.6 million (2020: $34.3 million)
-- Cash at 31 December 2021 of $27.8 million (2020: $21.0 million)
Strategic and operational highlights
-- Announced LiveData Migrator for Azure ("LDMA") General
Availability, critical to pipeline conversion
-- Commit to Consume contract structure to be widely utilised
across all future clients, where a customer is contracted to move a
minimum amount of data over a given time:
o Customers continue to benefit from the flexibility of our
scalable cloud-based solutions
o Provides WANdisco with a stream of committed revenues that
have the potential to increase as customers' data needs expand,
increasing revenue visibility
o Signed the first Commit to Consume contract in 2021 with an
existing US Telecom customer, worth $1.0 million over five years,
with a significant opportunity for further consumption growth
o Secured the Company's largest Commit to Consume contract
valued at a minimum of $6 million over five years, to replicate
over an exabyte of automobile Internet of Things ("IoT") sensor
data to the Google Cloud. Revenues will be realised in FY22 and in
later years
-- Channel partner ecosystem continues to offer exciting revenue
opportunities; through our partnership with IBM, we secured a 3
year $3.3 million contract with a large North American investment
bank for the use of LiveData Migrator ("LDM"), with a 50% revenue
share
-- Snowflake partnership continues to complement WANdisco's
existing Databricks relationship, consolidating the Company's
market position in supporting machine learning applications
-- Key investments made in channel and direct sales capacity to
further establish product availability
-- Meaningful commercial momentum with blue chip customers and partners:
o Initial contract won with a top 5 UK bank to migrate to Amazon
Web Services
Outlook
-- The Company's successful transition to a cloud-centric,
consumption-based model over the last year has allowed the business
to deepen its strategic relationships with key partners such as
Oracle and provided greater near term visibility on revenue and
pipeline more generally
-- Significant success with IoT service providers, whilst the
General Availability with Microsoft for LDMA marked a significant
milestone in the Company's history
o IoT use cases are growing and led to new business worth over
$2.6 million in Q122 with a global telecoms customer
-- The major reorganisation of the Company's sales and
go-to-market functions has begun to bear fruit with improved H2
2021 results, greater pipeline visibility, lower operating costs
and expansion into new verticals and use cases for our products
-- FY21 bookings increased 17% to $11.9 million from $10.2
million in the prior year, whilst ending Remaining Period
Obligations ("RPO") rose to $9.4 million for FY21, up 92% year on
year(3)
-- This significant strategic progress made in FY21 provided a
springboard for strong business momentum in Q122 with multiple new
contract wins for our LDM solution, both directly and via key cloud
channel partners including Azure, AWS and IBM, as well as our
principal analytics partners Databricks and Snowflake
-- The strong trading seen in Q122 continues unabated into Q2,
giving the Board increasing confidence in its outlook and ability
to deliver increased revenues, bookings and Ending RPO for
FY22.
David Richards, Chief Executive Officer and Chairman of
WANdisco, commented:
"We made significant strategic progress in FY21 reorganising our
go-to-market operation and cost structure. This has provided us
greater revenue visibility, accountability and efficiencies to
drive our business forward, and I am confident that we will
continue to convert on our strong pipeline of cloud migration
opportunities in FY22.
Our achievements in Q421 provided a springboard for our new
business acceleration into Q122 and we are extremely excited about
the significant market opportunities that lay ahead of us for the
rest of this year. We are well placed to capture significant
opportunities as we look to enter new verticals and capitalise on
an expected increase in IoT-driven deals.
Along with the improvements made to the business in H2 2021, we
announced that our product developed for Microsoft, Live Data
Migrator for Azure was now generally available. Achieving General
Availability offers potential, new and existing customers increased
confidence in our products and simplifies the ordering process,
which is essential to converting on our growing pipeline.
We also shifted from multi-year subscription contracts to the
preferred transacting method for cloud customers with the adoption
of Commit to Consume contracts. The Commit to Consume contract
structure allows customers to try before adopting our solutions
with very little risk, whilst allowing us to capture the growth in
consumption that logically stems from the adoption of cloud-based
solutions.
We have also been able to strengthen and expand our partner
ecosystem with some of the largest organisations in the world such
as IBM and Oracle, who continue to depend on us to support their
businesses and their enterprise customers with critical data
migrations to the cloud.
In 2022, the business is focused on continuing the acceleration
of business started in H2 2021. As we have announced post period
end, we have made significant achievements with major contract wins
in the IoT space, in addition to continuing to secure large
contracts for replicating on premises Hadoop data to the cloud.
With our recent contract wins, unique set of solutions and high
visibility of near-term pipeline, we remain confident in our
ability to significantly improve results in FY22."
Operating expenses adjusted for: depreciation, amortisation, capitalisation
(1) of development expenditure and equity-settled share-based payment.
See Note 4 to the condensed consolidated financial statements for
a reconciliation.
Operating loss adjusted for: impairment loss, depreciation, amortisation
(2) and equity-settled share-based payment. See Note 4 to the condensed
consolidated financial statements for a reconciliation .
Ending RPO is defined as beginning RPO plus bookings minus recognised
(3) revenue.
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 / Kwaku Aning / Tom Blundell
+44 (0)20 7710
Stifel (Nomad and Joint Broker) 7600
Fred Walsh / Richard Short
Panmure Gordon (Joint Broker) +44 (0)20 7886
Erik Anderson / Alina Vaskina 2500
About WANdisco
WANdisco is the LiveData company. WANdisco's LiveData Cloud
Services enable enterprises to create an environment where data is
always available, accurate and protected, creating a strong
backbone for their IT infrastructure and a bedrock for running
consistent, accurate machine learning applications. With zero
downtime and zero data loss, WANdisco LiveData Platform keeps
geographically dispersed data at any scale consistent between on
premises and cloud environments allowing businesses to operate
seamlessly in a hybrid or multi-cloud environment. For more
information on WANdisco, visit www.wandisco.com.
BUSINESS REVIEW
In 2021, we announced LDMA General Availability, a critical step
in converting pipeline. A new Azure service, the LiveData Platform
for Azure, allows customers to use our software as if it were a
native Azure offering. As an Azure service, customers can deploy
WANdisco's LiveData products by selecting it from the same Azure
menu used for native Microsoft services such as compute and
storage, with metered billing added on their existing monthly Azure
payments. No software to install, no new contracts to sign, no
barrier to entry.
The General Availability of LDM ("LiveData Migrator") and LDMA
was essential to the acceleration of business in the second half of
2021. Achieving the General Availability milestone provided
potential customers with greater assurance about their ability to
embark on petabyte-scale data migration projects with WANdisco and,
as such, is steadily unlocking a pipeline of growth opportunities -
especially in IoT. Key to these wins was the Company's cloud
agnostic solution that moves large amounts of data from on premise
Hadoop to multiple different clouds. A strategic selling point to
customers is that LDM can move data to any of the cloud providers
and provides ultimate ownership of data to the customer, allowing
them to avoid vendor lock-in while enabling arbitrage cloud pricing
and increased functionality. Additionally, the Company's ability to
migrate data at scale without requiring any system downtime, along
with its capacity to automatically migrate data changes as they
occur - ensuring data consistency - were key factors in securing
new
business.
In 2021, the business made steady progress in its transition to
a cloud-centric, consumption-based model, resulting in more
predictable revenues (unbilled backlog, or RPO), reduced
discounting (metered pricing) and increased upsell opportunities.
The cloud platform model of the "Commit to Consume" contract
structure, where a customer is obligated to move a minimum amount
of data over a given time, is now the standard for WANdisco. This
helped drive strong bookings and RPO growth in H2 2021 as WANdisco
benefitted from a stream of committed revenues that have the
potential to increase as customers' data needs expand.
In Q3 2021 we signed our first Commit to Consume contract, a
$1.0 million, 5-year deal with an existing US telecoms customer
with a significant opportunity for further consumption growth.
Following this win, in Q4 2021 the Company secured a Commit to
Consume contract valued at a minimum of $6 million over five years,
to replicate over an exabyte of automobile sensor data (IoT data)
to the Google cloud. Additionally, through its channel partner IBM,
the Company secured a $3.3 million contract with a large North
American investment bank for the use of LDM, with a 50% revenue
share.
The new contract wins achieved in Q4 2021 directly and through
key industry partners are testament to the strategic progress
achieved across the business this year, while the General
Availability of the LiveData Platform for Azure was a critical step
in converting WANdisco's new business pipeline. The Company is
excited by the opportunities in the market to enter new verticals
and is well placed to capitalise on an expected increase in
IoT-driven deals in 2022. Q4 2021 saw a significant increase in
bookings and RPO and this momentum, combined with high near-term
visibility, gives confidence in the Company's ability to execute on
our 2022 pipeline.
COVID-19 update
The global nature of the COVID-19 virus has resulted in
macroeconomic uncertainty, which appears to be receding in the
geographies we operate in. We are constantly monitoring the impact
that COVID-19 may have in current and future periods but
historically we have experienced minimal effects on our customer
base and order flow, and are well positioned to operate should
COVID-19 restrictions return.
Conflict in Ukraine and Russia
As an organisation we want to express how shocked and saddened
we are by the humanitarian crisis in Ukraine and are constantly
monitoring the situation. We will continue to seek advice as the
situation evolves and hope that the conflict can be resolved as
soon and humanely as possible.
Historically, we only had some customers in Russia who were not
significant in scale relative to our overall operations. We have
kept apprised of the latest sanctions, and upon the advice of legal
counsel have recently announced internally that we cannot provide
any of our products or services in Russia, nor can we continue to
provide products or services with current Russian customers.
KPIs to map shift to consumption-based revenue model
Group revenues have historically been characterised by
subscription contracts in which the licence component of revenues
is recognised upfront. As paying for consumption is the primary way
cloud services are bought, WANdisco has begun a shift to a
consumption-based model. We believe that a consumption model is the
true Software as a Service ("SaaS") model, with customers expecting
to purchase on a consumption basis within the cloud ecosystem
through Commit to Consume contracts and metered billing.
To effectively build consumption revenue streams, sales
compensation must also be changed to incentivise the activation of
customers and the early commitment of customers to build
consumption through the year, as opposed to a single point of
sale.
A consumption-based model provides greater agility and the
ability to scale as required and provides valuable data to evolve
our product and offering. Data on how customers are using the
product drives interaction with customer success much of which is
automated.
This shift to a consumption model, where revenue is recognised
over time rather than upfront, will lead to revenues scaling over
the year, with revenue recognised further into the sales cycle.
As our business continues to evolve, the metrics we use to
measure our success also need to change. To aid in mapping pipeline
progress against this changing revenue model, we will provide
quarterly business updates providing new KPIs including:
-- Current and YTD Bookings
-- Period ending RPO ("Remaining Performance Obligations")
The objective of these KPIs is to provide an indication of
business closed in the period and YTD, and RPO as a measure of the
future revenues to flow through as our customers consume data.
Outlook
In 2021, the business has made steady progress in its transition
to a cloud-centric, consumption-based model, resulting in more
predictable revenues (unbilled backlog, or RPO), reduced
discounting (metered pricing) and increased upsell opportunities.
This helped drive strong bookings and RPO growth in H2 2021 as
WANdisco benefitted from a stream of committed revenues that have
the potential to increase as customers' data needs expand.
The General Availability of the LiveData Platform for Azure was
successfully launched in H2 2021. The announcement signified the
completion of a multi-year joint project with Microsoft to
integrate WANdisco's technology into its cloud fabric and unlock
the Azure ecosystem for global blue-chips - one of the most
important initiatives in WANdisco's history to date.
Following the major reorganisation of the Company's sales and
go-to-market functions, we have seen the foundations of this begin
to bear fruit with improved H2 2021 results, greater pipeline
visibility for FY22 and lower operating costs.
Looking ahead, the high visibility of WANdisco's near term
business pipeline underpins our confidence in strong trading in
2022. The Company is well placed to capture significant market
opportunities in IoT-driven deals and expansion into new verticals
in the coming year.
FINANCIAL REVIEW
Revenue for the year ended 31 December 2021 was $7.3 million
(2020: $10.5 million).
Deferred revenue from sales booked during 2021 and in previous
years, and not yet recognised as revenue, is $1.8 million at 31
December 2021, at 31 December 2020 this stood at $3.8 million. Our
deferred revenue represents future revenue from new and renewed
contracts, many of them spanning multiple years.
Adjusted EBITDA loss(2) was $29.5 million (2020: $22.2 million),
due primarily to the reduction in revenue and continued investments
in the business.
Revenue
Revenue was $7.3 million (2020: $10.5 million), reflecting the
emphasis on signing Commit to Consume contracts that are recognised
rateably over the term of the contract rather than substantially
upfront with subscription type arrangements. Commit to Consume
arrangements allow for revenues to increase in proportion to the
amount of data migrated whereas subscription contracts are for a
fixed amount regardless of the amount of data migrated over the
contractual term.
The move to Commit to Consume contracts resulted in increased
bookings in 2021 of $11.9 million (2020: $10.2 million) and RPO
increased to $9.4 million at 31 December 2021 (31 December 2020
$4.9 million).
18% of revenues in 2021 came from a multi-period subscription
agreement with a new customer through a partner, which contributed
to the total largest customer representing 22% of revenues.
Contract wins continue to exhibit variability in the timing of
their completion.
Operating costs
Cash overheads(1) increased in the year as we made investments
in go-to-market resources and engineering, rising to $41.5 million
from $36.9 million in 2020. In November 2021, recognising that our
cloud products are easier for customers to install and use, we
optimised our cost structure, trimming an estimated $6 million in
annual costs from the business on a forward looking basis.
Capitalised product development expenditure was $5.3 million in
the year (2020: $5.2 million). All of this expenditure was
associated with new product features.
Our headcount was 159 as at 31 December 2021 (31 December 2020:
180). The reduction in headcount was primarily due to our cost
reduction efforts as discussed above.
Profit and loss
Adjusted EBITDA(2) loss for the year was $29.5 million (2020:
$22.2 million).
The loss after tax for the year increased to $37.6 million
(2020: $34.3 million), as a result of the lower revenue and
increased overheads and partially offset by a lower share-based
payment charge. The financial gain of $1.1 million (2020: $1.8
million loss), reported within finance income/(costs), arose from
the retranslation of intercompany balances at 31 December 2021,
reflecting the decrease 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. A translation loss (2020: gain) arising on the net assets
of overseas subsidiaries reported in reserves results in a minimal
impact on the group net assets.
Balance sheet and cash flow
Trade and other receivables at 31 December 2021 were $5.7
million (31 December 2020: $10.1 million). This includes $1.2
million of trade receivables (31 December 2020: $5.3 million) and
$4.5 million related to non-trade receivables (31 December 2020:
$4.8 million). The reduction in trade receivables was due primarily
to the timing of revenues during the year.
Trade and other payables reduced to $4.2 million (31 December
2020: $5.5 million), mainly due to reduced commissions to the sales
team due to the lower revenue in 2021.
Net consumption of cash was $34.0 million before financing
(2020: $24.2 million), resulting in a closing cash balance of $27.8
million at 31 December 2021. The consumption of cash was due
primarily to lower revenues and a modest increase in cash
overheads. At 31 December 2021, we had drawings under our revolving
credit facility with Silicon Valley Bank of $nil (2021: $0.6
million).
On 10 March 2021, the Group announced the subscription and
placing of 6,885,572 new ordinary shares of 10 pence each in the
Company by existing shareholders at a price of 446 pence (a
discount of 0.4% on the closing share price on 9 March 21) raising
gross proceeds of $42.5 million.
Consolidated statement of profit or loss and other comprehensive
income
For the year ended 31 December 2021
Year ended
Year ended 31 December
31 December
2021 2020
(Unaudited) (Audited)
Note $'000 $'000
---------------------------------------------------- ---- ------------ ------------
Revenue 3 7,306 10,532
Cost of sales (659) (1,066)
-------------------------------------------------------- ---- ------------ ------------
Gross profit 6,647 9,466
Operating expenses 4 (44,350) (43,373)
Impairment loss (2,131) -
-------------------------------------------------------- ---- ------------ ------------
Operating loss 4 (39,834) (33,907)
-------------------------------------------------------- ---- ------------ ------------
Finance income 1,175 305
Finance costs (172) (2,183)
-------------------------------------------------------- ---- ------------ ------------
Net finance income/(costs) 1,003 (1,878)
-------------------------------------------------------- ---- ------------ ------------
Loss before tax (38,831) (35,785)
Income tax 1,236 1,453
-------------------------------------------------------- ---- ------------ ------------
Loss for the year (37,595) (34,332)
======================================================== ==== ============ ============
Other comprehensive (loss)/income
Items that are or may be reclassified subsequently
to profit or loss:
Foreign operations - foreign currency translation
differences (1,041) 3,872
-------------------------------------------------------- ---- ------------ ------------
Other comprehensive (loss)/income for the
year, net of tax (1,041) 3,872
-------------------------------------------------------- ---- ------------ ------------
Total comprehensive loss for the year attributable
to owners of the parent (38,636) (30,460)
======================================================== ==== ============ ============
Loss per share
Basic and diluted loss per share 5 ($0.65) ($0.68)
======================================================== ==== ============ ============
The notes form an integral part of these condensed consolidated
financial statements.
Consolidated statement of financial position
At 31 December 2021
31 December
31 December
2021 2020
(Unaudited) (Audited)
Note $'000 $'000
------------------------------ ---- ------------ -----------
Assets
Property, plant and equipment 2,244 2,895
Intangible assets 5,252 5,027
Other non-current assets 6 1,201 2,215
---------------------------------- ---- ------------ -----------
Non-current assets 8,697 10,137
---------------------------------- ---- ------------ -----------
Trade and other receivables 7 5,731 10,142
Cash and cash equivalents 27,759 21,039
---------------------------------- ---- ------------ -----------
Current assets 33,490 31,181
---------------------------------- ---- ------------ -----------
Total assets 42,187 41,318
================================== ==== ============ ===========
Equity
Share capital 8,608 7,641
Share premium 213,762 172,868
Translation reserve (2,752) (1,711)
Merger reserve 1,247 1,247
Retained earnings (186,442) (150,851)
---------------------------------- ---- ------------ -----------
Total equity 34,423 29,194
---------------------------------- ---- ------------ -----------
Liabilities
Loans and borrowings 8 1,230 1,778
Deferred income 9 334 659
Deferred tax liabilities 4 4
---------------------------------- ---- ------------ -----------
Non-current liabilities 1,568 2,441
---------------------------------- ---- ------------ -----------
Current tax liabilities 29 12
Loans and borrowings 8 586 1,115
Trade and other payables 4,156 5,462
Deferred income 9 1,425 3,094
Current liabilities 6,196 9,683
---------------------------------- ---- ------------ -----------
Total liabilities 7,764 12,124
---------------------------------- ---- ------------ -----------
Total equity and liabilities 42,187 41,318
================================== ==== ============ ===========
The notes form an integral part of these condensed consolidated
financial statements.
Consolidated statement of changes in equity
For the year ended 31 December 2021
Attributable to owners of the Company
--------------------------------------------------------------
Share Share Translation Merger Retained Total
capital premium reserve reserve earnings equity
Audited $'000 $'000 $'000 $'000 $'000 $'000
----------------------------------- -------- -------- ----------- -------- --------- --------
Balance at 31 December 2019 7,097 149,336 (5,583) 1,247 (121,922) 30,175
----------------------------------- -------- -------- ----------- -------- --------- --------
Total comprehensive (loss)/income
for the year
Loss for the year - - - - (34,332) (34,332)
Other comprehensive income for
the year - - 3,872 - - 3,872
----------------------------------- -------- -------- ----------- -------- --------- --------
Total comprehensive income/(loss)
for the year - - 3,872 - (34,332) (30,460)
----------------------------------- -------- -------- ----------- -------- --------- --------
Transactions with owners of
the Company
Contributions and distributions
Equity-settled share-based payment - - - - 5,403 5,403
Share options exercised 162 106 - - - 268
Proceeds from share placing 382 23,426 - - - 23,808
Total transactions with owners
of the Company 544 23,532 - - 5,403 29,479
----------------------------------- -------- -------- ----------- -------- --------- --------
Balance at 31 December 2020 7,641 172,868 (1,711) 1,247 (150,851) 29,194
=================================== ======== ======== =========== ======== ========= ========
Unaudited
Total comprehensive (loss)/income
for the year
Loss for the year - - - - (37,595) (37,595)
Other comprehensive loss for
the year - - (1,041) - - (1,041)
----------------------------------- -------- -------- ----------- -------- --------- --------
Total comprehensive loss for
the year - - (1,041) - (37,595) (38,636)
----------------------------------- -------- -------- ----------- -------- --------- --------
Transactions with owners of
the Company
Contributions and distributions
Equity-settled share-based payment - - - - 2,004 2,004
Share options exercised 15 21 - - - 36
Proceeds from share placing 952 40,873 - - - 41,825
Total transactions with owners
of the Company 967 40,894 - - 2,004 43,865
----------------------------------- -------- -------- ----------- -------- --------- --------
Balance at 31 December 2021 8,608 213,762 (2,752) 1,247 (186,442) 34,423
=================================== ======== ======== =========== ======== ========= ========
The notes form an integral part of these condensed consolidated
financial statements.
Consolidated statement of cash flows
For the year ended 31 December 2021
Year ended
31 December Year ended
31 December
2021 2020
(Unaudited) (Audited)
Note $'000 $'000
------------------------------------------------------- ---- ------------ ------------
Cash flows from operating activities
Loss for the year (37,595) (34,332)
Adjustments for:
* Depreciation of property, plant and equipment 1,077 1,203
* Amortisation of intangible assets 5,115 5,070
* Net finance costs 116 69
* Income tax (1,236) (1,453)
* Foreign exchange (992) 3,773
* Equity-settled share-based payment 10 2,004 5,403
----------------------------------------------------------- ---- ------------ ------------
(31,511) (20,267)
---------------------------------------------------------- ---- ------------ ------------
Changes in:
* Trade and other receivables 5,728 339
* Trade and other payables (1,280) 910
* Deferred income (1,994) (57)
Net working capital change 2,454 1,192
----------------------------------------------------------- ---- ------------ ------------
Cash used in operating activities (29,057) (19,075)
Interest paid (170) (294)
Income tax received 998 662
----------------------------------------------------------- ---- ------------ ------------
Net cash used in operating activities (28,229) (18,707)
----------------------------------------------------------- ---- ------------ ------------
Cash flows from investing activities
Interest received 5 21
Acquisition of property, plant and equipment (427) (307)
Development expenditure (5,340) (5,220)
Net cash used in investing activities (5,762) (5,506)
----------------------------------------------------------- ---- ------------ ------------
Cash flows from financing activities
Proceeds from issue of share capital net of transaction
costs of $0.6m (2020: $1.1m) 41,861 24,076
Repayment of bank loan (556) (1,666)
Payment of lease liabilities (517) (595)
----------------------------------------------------------- ---- ------------ ------------
Net cash from financing activities 40,788 21,815
----------------------------------------------------------- ---- ------------ ------------
Net increase/(decrease) in cash and cash
equivalents 6,797 (2,398)
Cash and cash equivalents at 1 January 21,039 23,354
Effect of movements in exchange rates on
cash and cash equivalents (77) 83
----------------------------------------------------------- ---- ------------ ------------
Cash and cash equivalents at 31 December 27,759 21,039
=========================================================== ==== ============ ============
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 2021
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 2021 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
UK adopted International Financial Reporting Standards ("IFRSs") in
issue and effective at 31 December 2021, this announcement does not
itself contain sufficient information to comply with IFRS.
The Group expects to publish full Consolidated financial
statements in June 2022. The financial information set out in this
preliminary announcement does not constitute the Group's
Consolidated financial statements for the years ended 31 December
2021 or 31 December 2020.
The financial information for 2020 is derived from the
consolidated accounts for the year ended 31 December 2020 which
have been audited and delivered to the registrar of companies with
the Jersey Financial Services Commission ("JFSC"). 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 financial
information for 2021 is derived from the consolidated accounts for
the year ended 31 December 2021, which have not yet been reported
on by the Independent Auditors. Given the facts set out in Note
2(b), it is possible that the audit report for the year ended 31
December 2021 will contain a material uncertainty over the ability
of the Group to continue as a going concern.
The Consolidated financial statements have been prepared in
accordance with IFRSs as adopted for use in the UK.
The preliminary announcement has been prepared using the
accounting policies published in the Group's accounts for the year
ended 31 December 2020, which are available on the Company's
website. From 1 January 2021 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 2021 have been adopted:
- Interest Rate Benchmark Reform - Phase 2 (Amendments to IFRS
9, IAS 39, IFRS 7, IFRS 4 and IFRS 16); and
- Covid-19-Related Rent Concessions beyond 30 June 2021 (Amendment to IFRS 16).
These amendments to standards have not had a material impact on
these Financial statements.
(ii) New and amended standards and interpretations issued but
not effective for the financial year beginning 1 January 2021 and
not early adopted
A number of new standards are effective for annual periods
beginning after 1 January 2021 and earlier application is
permitted; however, the Group has not early adopted the new or
amended standards in preparing these Financial statements.
The amended standards and interpretations are not expected to
have a significant impact on the Group's consolidated financial
statements.
2. Basis of preparation (continued)
b Going concern basis of accounting
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 8.
As at 31 December 2021 the Group had net assets of $34.4m (31
December 2020: $29.2m), including cash of $27.8m (2020: $21.0m) as
set out in the consolidated statement of financial position, with
no debt facility outstanding (2020: debt facility drawn of $0.6m).
In the year ended 31 December 2021, the Group incurred a loss
before tax of $38.8m (2020: $35.8m) and net cash outflows before
financing of $34.0m (2020: $24.2m).
During 2021, the performance of the Group declined, with
revenues reducing by 31% to $7.3m (2020: $10.5m) and operating loss
increasing to $39.8m (2020: $33.9m).
The Directors have prepared a detailed budget and forecast 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, details of which
are included in Note 8. The cash flow model includes the injection
of at least $17.0m from the proposed share placing expected
following the year end. This funding is subject to the successful
completion of the share placing, including shareholder approval.
Neither of which are confirmed at the date of this
announcement.
Whilst the Directors are confident in the Group's ability to
grow revenue, the Board's sensitivity modelling (which considered
the impact of Brexit, COVID-19, recession risks and the conflict in
Ukraine) shows that the Group can remain within its facilities in
the event that revenue growth is delayed (i.e. revenue does not
increase from the level reported in 2021) 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
revenues were set to remain consistent with the level reported in
2021. 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 revenue and funding scale.
As a consequence, the Directors have a reasonable expectation
that the Group can continue 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. However, the
events noted above indicate that there is a material uncertainty
related to events or conditions that may cast significant doubt on
the entity's ability to continue as a going concern and, therefore,
the entity may be unable to realise its assets and discharge its
liabilities in the normal course of business. These results do not
include any adjustments should the going concern basis of
preparation be inappropriate.
c Functional and presentational currency
The consolidated financial statements are presented in US
dollars, 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
and aligns with our KPIs. Adjusted results exclude certain items
because if included, these items could distort the understanding of
our performance for the year and the comparability between periods.
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. See Note 4 for a
reconciliation.
- Adjusted EBITDA: Operating loss adjusted for: impairment loss, depreciation, amortisation and
equity-settled share-based payment. See Note 4 for a reconciliation.
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.
3. 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
2021 2020
(Unaudited) (Audited)
Revenue $'000 $'000
-------------------------- ------------ ------------
North America - USA 4,992 8,635
North America - Other 32 34
Europe 1,218 1,096
Rest of the world - China 643 412
Rest of the world - Other 421 355
------------------------------ ------------ ------------
7,306 10,532
============================= ============ ============
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. This core
technology is contained in all the Group's products.
d Major customers
Year ended Year ended Year ended Year ended
31 December 31 December
2021
2021 (Unaudited) 31 December 31 December
2020 2020
(Unaudited) (Audited) (Audited)
% of Revenue % of Revenue
revenue $'000 revenue $'000
----------- ------------ ------------ ------------ ------------
Customer 1 22% 1,572 5% 522
Customer 2 4% 286 10% 1,070
Customer 3 2% 176 24% 2,515
=========== ============ ============ ============ ============
No other single customers contributed 10% or more to the Group's
revenue (2020: $nil).
e Split of revenue by timing of revenue recognition
Year ended Year ended
31 December 31 December
2021 2020
(Unaudited) (Audited)
Revenue $'000 $'000
-------------------------------------------------- ------------ ------------
Licences and services transferred at a point in
time 4,666 7,607
Maintenance and support services transferred over
time 2,640 2,925
------------------------------------------------------ ------------ ------------
7,306 10,532
===================================================== ============ ============
f Contract balances
The following table provides information about receivables and
contract assets and liabilities from contracts with customers.
31 December
31 December
2021 2020
(Unaudited) (Audited)
$'000 $'000
------------------------------------------------------ ------------- ------------
Receivables, which are included in "Other non-current
assets - accrued income" 1,161 2,124
Receivables, which are included in "Trade and other
receivables - accrued income" 1,059 1,480
Contract liabilities, which are included in "Deferred
income" - non-current (334) (659)
Contract liabilities, which are included in "Deferred
income" - current (1,425) (3,094)
========================================================== ============= ============
4. Cash overheads and Adjusted EBITDA
Year ended Year ended
31 December 31 December
2021 2020
(Unaudited) (Audited)
a Reconciliation of operating expenses to Note
"Cash overheads": $'000 $'000
------------------------------------------ ---- ------------ ------------
Operating expenses (44,350) (43,373)
Adjusted for:
Amortisation and depreciation 6,192 6,273
Equity-settled share-based payment 10 2,004 5,403
Development expenditure capitalised (5,340) (5,220)
---------------------------------------------- ---- ------------ ------------
Cash overheads (41,494) (36,917)
============================================== ==== ============ ============
Year ended Year ended
31 December 31 December
2021 2020
(Unaudited) (Audited)
b Reconciliation of operating loss to "Adjusted Note
EBITDA": $'000 $'000
-------------------------------------------------- ---- ------------ ------------
Operating loss (39,834) (33,907)
Adjusted for:
Impairment loss 2,131 -
Amortisation and depreciation 6,192 6,273
Equity-settled share-based payment 10 2,004 5,403
------------------------------------------------------ ---- ------------ ------------
Adjusted EBITDA (29,507) (22,231)
Development expenditure capitalised (5,340) (5,220)
------------------------------------------------------ ---- ------------ ------------
Adjusted EBITDA including development expenditure (34,847) (27,451)
====================================================== ==== ============ ============
5. 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
2021 2020
(Unaudited) (Audited)
$'000 $'000
-------------------------------------------------------- ------------ ------------
Loss for the year attributable to ordinary shareholders 37,595 34,332
============================================================ ============ ============
Number Number
of shares of shares
Weighted average number of ordinary shares '000 '000
-------------------------------------------------------- ------------ ------------
Issued ordinary shares at 1 January 52,613 48,241
Effect of shares issued in the year 5,186 2,251
------------------------------------------------------------ ------------ ------------
Weighted average number of ordinary shares at
31 December 57,799 50,492
============================================================ ============ ============
2021 2020
$ $
--------------------- --- ---- ----
Basic loss per share 0.65 0.68
========================== ==== ====
5. Loss per share (continued)
b Adjusted loss per share
Adjusted loss per share is calculated based on the loss
attributable to ordinary shareholders before net foreign exchange
loss, 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
2021 2020
(Unaudited) (Audited)
Adjusted loss for the year: Note $'000 $'000
------------------------------------------- ---- ------------ ------------
Loss for the year attributable to ordinary
shareholders 37,595 34,332
Adjusted for:
Impairment loss (2,131) -
Net foreign exchange gain/(loss) 1,119 (1,809)
Equity-settled share-based payment 10 (2,004) (5,403)
----------------------------------------------- ---- ------------ ------------
Adjusted loss for the year 34,579 27,120
=============================================== ==== ============ ============
2021 2020
$ $
------------------------ --- ---- ----
Adjusted loss per share 0.60 0.54
============================= ==== ====
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.
6. Other non-current assets
31 December
31 December
2021 2020
(Unaudited) (Audited)
Due in more than a year: $'000 $'000
------------------------------- ------------ -----------
Other receivables 40 91
Accrued income 1,161 2,124
--------------------------------------- ------------ -----------
Total other non-current assets 1,201 2,215
======================================= ============ ===========
7. Trade and other receivables
31 December
31 December
2021 2020
(Unaudited) (Audited)
Due within a year: $'000 $'000
----------------------------------- ------------- -----------
Trade receivables 1,182 5,319
Other receivables 278 411
Accrued income 1,059 1,480
Corporation tax 2,532 2,277
Prepayments 680 655
----------------------------------- ----- ------------- -----------
Total trade and other receivables 5,731 10,142
=================================== ===== ============= ===========
8. Loans and borrowings
31 December 31 December
2021 2020
(Unaudited) (Audited)
$'000 $'000
------------------------------------- ------------- -----------
Non-current liabilities
Lease liabilities 1,230 1,778
--------------------------------------------- ------------- -----------
1,230 1,778
------------------------------------------- ------------- -----------
Current liabilities
Current portion of secured bank loan - 556
Current portion of lease liabilities 586 559
--------------------------------------------- ------------- -----------
586 1,115
------------------------------------------- ------------- -----------
Total loans and borrowings 1,816 2,893
============================================= ============= ===========
At 31 December 2021 there was no bank loan debt. In 2020 there
was $0.6m term debt drawn down with Silicon Valley Bank. The
facility comprises $nil (2020 $0.6m) 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. The bank loan was secured over the assets of WANdisco,
Inc.
9. Deferred income
Deferred income represents contracted sales for which services
to customers will be provided in future periods.
31 December 31 December
2021 2020
(Unaudited) (Audited)
Deferred income which falls due: $'000 $'000
--------------------------------- ------------- -----------
Within a year 1,425 3,094
In more than a year 334 659
Total deferred income 1,759 3,753
========================================= ============= ===========
10. 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 2021.
a Expense recognised in profit or loss
Year ended
Year ended
31 December 31 December
2021 2020
(Unaudited) (Audited)
$'000 $'000
----------------------------------------- ------------ ------------
Total equity-settled share-based payment
charge 2,004 5,403
================================================= ============ ============
b Summary of share options outstanding
2021 2020
Number Number
of options of options
Number of share options outstanding: (Unaudited) (Audited)
------------------------------------- ------------ -----------
Outstanding at 1 January 4,271,684 5,028,157
Forfeited during the year (323,599) (159,190)
Exercised during the year (113,685) (1,272,143)
Granted during the year - 674,860
-------------------------------------- ------------ -----------
Outstanding at 31 December 3,834,400 4,271,684
-------------------------------------- ------------ -----------
Exercisable at 31 December 3,165,769 2,784,861
-------------------------------------- ------------ -----------
Vested at 31 December 3,165,769 2,784,861
====================================== ============ ===========
11. Commitments and contingencies
The Group had no contingent liabilities at 31 December 2021 (31
December 2020: None).
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.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR SFMESLEESEFM
(END) Dow Jones Newswires
June 15, 2022 02:00 ET (06:00 GMT)
Wandisco (LSE:WAND)
Historical Stock Chart
From Apr 2024 to May 2024
Wandisco (LSE:WAND)
Historical Stock Chart
From May 2023 to May 2024