Final Results

Final Results
Analyst Briefing & Investor Presentation
Continued strong new business momentum

PCI-PAL PLC (AIM: PCIP), the global provider of secure payment solutions for business communications, is pleased to announce full year results for the year ended 30 June 2022 (the "period").

Financial Highlights

  • Revenue increased 62% to £11.94 million (2021: £7.36 million)
  • Gross margin increased to 84% (2021: 75%) reflecting the majority of revenues delivered through our  cloud based Amazon Web Services (“AWS”) platform
  • Significant increase in Total Annual Contract Value (“TACV1”) at 30 June 2022 by 40% to £13.36 million (2021: £9.51 million), with an 11% increase in ACV signed in the period to £3.46 million (2021: £3.11 million).
  • Deferred income increased by 31% to £10.62 million (2021: £8.09 million)
  • Strong performance delivered adjusted operating loss2 better than expectations at £2.02 million (2021: £3.85 million)
  • Loss before tax at £3.11 million (2021: £4.19 million) which includes a £0.80 million (£2021: £nil) charge in relation to legal fees for defending the ongoing patent claim
  • Cash balances at year end of £4.89 million (2021: £7.52 million) and the Group is debt free

Operating and Other Highlights

  • North American momentum continues to build, with revenue up 83% and a year-on-year increase in ACV signed of 7%. North America now accounts for 28% of the Group revenue (2021: 25%)
  • Opened offices in Australia and Canada expanding the global reach of the Group
  • Recurring revenue model continues to build, with recurring revenues accounting for 89% of total revenue (2021: 88%)
  • Signed 217 new sales contracts in the year (2021: 195)
  • A further 164 new contracts live with our services in the period (2021: 121)
  • Time to go live (“TTGL3”) of new contracts signed in the last 18 months marginally ahead of management expectations at below 5 months
  • 85% of new sales contracts for the Group generated from channel partners (2021: 78%)
  • Added two new members to the PCI Pal Advisory Committee, both US-based, experienced product and engineering executive, Jayesh Patel who was formerly Chief Product Officer at Vonage Inc, and Emilia D’Anzica, a customer success executive and consultant

1 TACV is the total annual recurring revenue of all signed contracts, whether invoiced and included in deferred revenue or still to be deployed and/or not yet invoiced 2 Loss from Operating Activities before exchange losses/gains recorded in the profit and loss exceptional items and share option charges
2 Loss from operating activities before exceptional items and share option charges
3 TTGL is the average time it takes a contract to be deployed measured from the date of signature

Current trading

  • Strong start to new financial year with key metrics in line with management expectations.
  • Sales highlights since year end:
    • Signed large well-known US-focused retailer with over 1,500 stores nationwide
    • New contract signed through a top performing partner in the UK with a well-known international food and drink company with an international footprint
  • New integrated reseller partnership signed with a B2B telco in Canada. This new partner has more than 100,000 customers and has a fast growing business in the Canadian contact centre market

Commenting on results and prospects, James Barham, Chief Executive said:

“FY22 is a year we can be proud of at PCI Pal. Having taken the steps to expand our addressable market following the fundraise in April 2021, we have executed against our ambitious plans in the year. We have driven organic revenue growth to market leading levels, whilst at the same time managing the processes of an unfounded patent case against us as well as meeting the challenge of a highly competitive jobs market.

“We have taken another step up in the last 12 months, reaching several financial milestones including £10 million ARR from our true-cloud, SaaS subscription services. This continued progress against our plans is now creating further opportunity as we build more momentum in our expanded product vision, as we look to add further value layers to our existing compliance and secure payment solution suite.

“With our market leading partner eco-system, mature cloud technology, and our ability to serve customers on a truly global scale, we are very well positioned to further capitalise on the broadening opportunities in front of us. I continue to look forward with confidence to another year of strong growth in FY23.”

Analyst Briefing: 9.30am on Tuesday 6 September 2022

An online briefing for Analysts will be hosted by James Barham, Chief Executive, and William Good, Chief Financial Officer, at 9.30am on Tuesday 6 September 2021 to review the results and prospects. Analysts wishing to attend should contact Walbrook PR on [email protected] or 020 7933 8780.

Investor Presentation: 3.00pm on Thursday 8 September 2022

The Directors will hold an investor presentation to cover the results and prospects at 3.00pm (UK time) on Thursday 8 September 2022.

The presentation will be hosted through the digital platform Investor Meet Company. Investors can sign up to Investor Meet Company and add to meet PCI-PAL PLC via the following link https://www.investormeetcompany.com/pci-pal-plc/register-investor. For those investors who have already registered and added to meet the Company, they will automatically be invited.

Questions can be submitted pre-event to [email protected] or in real time during the presentation via the "Ask a Question" function.

Annual Report & Accounts

The Annual Report & Accounts and Notice of Annual General Meeting will be posted to the Company’s website (www.pcipal.com) and posted to shareholders in due course.

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the company's obligations under Article 17 of MAR.

CHAIR’S STATEMENT
FOR THE YEAR ENDED 30 JUNE 2022

I am very pleased to report on another year of significant progress for the business on its path towards profitability while continuing to achieve upper quartile top line SaaS company growth and retention rates.

Notable achievements in the year include the strengthening of TACV, our leading forward indicator of growth, by 40% to £13.36 million and growth in deferred revenue of 31% to £10.62 million, once again growing our forward-looking revenue visibility. Recognised revenue also grew strongly by 62% to £11.94 million and gross margins continued to improve to 84%. These top line financial metrics are all hallmarks of a strong and growing cloud company and SaaS business model.

Patent Infringement Claims

For most of this fiscal year the management team has been vigorously defending the Group in both the UK and US against what the Board believes to be an unfounded patent infringement claim by Sycurio Limited. The Group has adopted a pro-active, multi-faceted defence strategy of proving non-infringement, despite the onus being on Sycurio to prove the infringement, and also to disprove PCI Pal’s counterclaims of invalidity.

The Board intends to continue to use all routes available to it to bring this matter to a close and we are confident in our position on both the defence of the claims made, as well as on the counterclaims that we are making.

People

The commitment of our people is truly outstanding. They have delivered these exceptional results.

The Group has put a great deal of effort into supporting our people and continuing to build an enduring culture of respect, positivity, and resilience. This corporate foundation is directly reflected in low employee turnover and an ability to attract first class technical talent despite the enormous impact of the Great Migration being felt across not just the technology sector but all areas of the global economy. More importantly, our customers and partners really enjoy working with our teams. This competitive differentiator should not be under-estimated and can be seen in our excellent NPS rankings, continued strengthening of our leadership position in channel partnerships, and impressive customer retention and account expansion metrics.

Overall, the PCI Pal team has grown from 71 to 103 employees over the course of the year, and I would personally like to thank each and every one of them for their contributions towards meeting the Group’s mission.

Strategic Direction

Several years ago, the Group adopted a disruptive strategy for our sector of being channel-first and delivering our solutions exclusively through the Cloud. FY22 again delivered tangible evidence of the ongoing success of this strategy. Most of our business by volume of sales continues to come through channel partnerships, further validating our strategic decision to be a channel-first organisation.

Building on this strategic success to date, the Board continues to evolve and expand its rolling five-year strategic plan to enter new geographic markets, such as Canada and Australia, and to broaden our offering to include new secure payments services on its global Cloud platform. In FY22 the first example of these new services was a ‘pay-by-bank’ option via a technology partnership with TrueLayer. Further new secure payment services are planned for launch during FY23, providing new revenue opportunities for our partners and enhancing the overall value proposition for our end customers.

Corporate Governance

In FY22 the Board has continued to focus on building our governance capabilities and ability to exercise independent judgement as the Group becomes larger, more internationally complex, serving a broader range of global partners and customers, and developing an even more culturally diverse team of people in different countries. I am therefore very pleased to have welcomed Carolyn Rand to the Board as Audit Committee Chair and member of the Remuneration Committee. Carolyn is a financial expert with a broad SaaS and international technology background, most recently with Bango Plc, and therefore also brings payment industry experience to the Board. I would like to thank Chris Fielding for his long service and contributions to the Group, both as past Chair of the Board and Audit Committee Chair, as the Group transformed itself into the fast-growing Cloud business it is today.

It has been two years since the formation of the PCI Pal Advisory Committee (the “PAC”), and the CEO and senior management team has continued to benefit from the expert outside functional advice that the committee provides. The Board has also enhanced its ability to meet its governance responsibility to manage its risk profile by having access to expert and more diverse, global outside viewpoints that are strongly correlated to the key elements of our evolving 5-year strategic plan.

For the second year, the Board has produced an ESG report, which sets out our commitment to understanding, measuring and, over time, improving our ‘ESG footprint’ as well as our focus and commitment to diversity and inclusion. This year we have updated our initial assessment of the key ESG metrics that we believe are most applicable to the Group, as well as our goals for achieving measurable improvement for each metric over time. The Board is fully committed to supporting management to achieve these improvement goals and is leading by example in the context of the make-up of the both the Board and the Advisory Committee. Although PCI Pal is a small software company relative to the large-scale global challenges around corporate governance and ESG, the Board nonetheless takes its ESG responsibilities seriously and has begun its own journey of self-directed improvement.

Stakeholder Communications

As a board, we remain focused on clear and regular communications to all investors, both retail and institutional, and expanding disclosures in line with the growth in complexity of the business.  We continue to utilise telephone updates as well as video briefings using the Investor Meet Company portal, to reach shareholders of all sizes. As the impact of the pandemic has receded, the CEO and CFO are once again also offering in-person meetings. As Chair, I am available as a direct line of communication to all shareholders in case other questions arise that need to be answered independently, as well as offering meetings with institutional shareholders around the time of the AGM.

In continuing recognition of the Company’s wider communication responsibility to all stakeholders, this year the Company has again expanded its media plan of publishing articles and content on social media, on the Company’s website and utilising the RNS Reach service to help provide a deeper understanding of the Group’s products and markets.

Looking Forward

Given the achievements to date and our commanding partner position in the ecosystem of the business communications marketplace, I am greatly encouraged by the progress that has been made by the Group in FY22, and the Board is confident in the outlook and prospects for the Group in FY23 and beyond.

We have started the current financial year in line with management’s expectations and I look forward to sharing further progress reports and news during the coming financial year, as we continue our strategic growth journey towards profitability and further scale.

 

Simon Wilson
Non-Executive Chair

CHIEF EXECUTIVE’S STATEMENT
FOR THE YEAR ENDED 30 JUNE 2022

Overview

I am extremely proud of the year we have just delivered.

Following the fundraise in April 2021, we set out expanded growth objectives for FY22 which included growing our addressable market through expansion into new territories including Canada and Australia; as well as increased investment into product, engineering, and customer success functions. The investment across these areas by majority involved an increase in headcount which has grown in the year by 45% to 103 people group-wide across UK, US, Canada, and Australia.

We have made this substantial progress against our hiring objectives despite the impact that the “war for talent” has had on fast growing technology companies such as ours. Furthermore, we are especially pleased that during this expansion we have achieved excellent employee retention of 94%.

It is particularly pleasing that while undertaking this significant expansion, with the inconvenience of the unfounded patent claim being made against us in the background, we have grown revenue by 62% year on year to £11.9 million, with a closing ARR run rate of £11.1 million (2021: £7.7 million). This organic growth performance is the strongest in our market and is a result of the successful execution against our stated objectives, which include: providing the most mature cloud platform to customers in our space; to be a truly partner-first business, creating the leading partner eco-system in the market; and for our services to be available to any size contact centre anywhere in the world.

Along with our market-leading revenue growth performance we have also managed our customer churn rates to top quartile levels, at just 3%. The Group has delivered several large extensions to key accounts in the period which has contributed to a strong NRR result of 118% across the year which is testament to the relationships we build with partners and customers alike. In addition, our new contract sales momentum has continued driving our key growth metric of TACV, which in turn is a key indicator of future recurring revenues, to £13.4 million, a year-on-year increase of 40%.

Given the momentum being seen by the Company, we are making excellent progress towards achieving break even in the near term. The progress is not only supported by our sales momentum, but also the continued increase in gross margins which is now at 84% (2021: 75%). Our ability to drive both new business and upsells to revenue recognition is testament to the foundations we established in prior years having built a strong operational core to the business. Our strong trading, along with our SaaS revenue model, has delivered excellent cash performance as well, with cash of £4.9 million at the year-end being substantially ahead of original expectations.

A consistent strategy to meet the opportunity

At PCI Pal, our vision is to be “the preferred solution provider that organisations turn to globally for achieving payment security and PCI compliance in customer engagement environments”. To date, having now completed the first full 5 years of our original plan, we have focused primarily on securing consumer payment card data in contact centre markets in the UK and US, with very recent expansion this year into Canada and Australia.

Our plan set out three pillars of growth: to be the leader in cloud in a space hindered by legacy hardware solutions; to leverage cloud innovation to create opportunities to sell to the breadth of the contact centre market globally; and to gain access to that global market through the creation of a market leading partner eco-system. We have been highly successful in executing against all three pillars and our revenue growth is testament to that as well. Today we estimate our market opportunity to be in the region of £300 million worldwide based on there being over 10 million agent positions in contact centres across the globe. This addressable market will grow as we start adding more of our planned product enhancements to our existing solutions.

Bolstering the tactical advantages we have over our competitors, and as the first to launch globally available, true-cloud solutions in our space, we have further expanded our patent portfolio with the grant of a key patent covering the novel and unique way that we leverage cloud telephony technologies to integrate our Agent Assist solution to third party environments “Processing Sensitive Information Over VoIP” (US 11,310,291). The patent is now granted in the US and approved for grant in Australia, with further territories expected in the coming months, including the UK. Of note, the US grant was made following an extensive review by the US Patents and Trademark Office of existing patents in our space, reiterating the innovative and novel nature of PCI Pal’s approach. The patent specifically covers the way that PCI Pal is able to manipulate the signalling and voice stream of phone calls, allowing PCI Pal to take a non-invasive approach to its handling of data during a call within its Agent Assist and IVR solutions. This latest patent is important in illustrating the novel ways by which we have been able to capture such a strong partner eco-system and also provides potential protection against those competitors who may wish to transition to cloud and follow similar operating models as PCI Pal.

People

Since early in our journey, we have set corporate level objectives to drive a focus on our people. This starts with a company-wide objective to maintain a culture that people want to be part of and a workplace that feels engaging and inclusive for all.

People are absolutely critical to this business. As a fast growing, high margin, SaaS business, people are what this business invests in the most. At PCI Pal we give equal focus to developing and supporting our existing employees, as we do to the passion and thorough approach we take to hiring new team members. We recognise that as a business of our size, even at now over 100 people, that it is our people that make the difference. It is therefore pleasing for myself and the management team that in a year where jobs markets have been turned upside down that we have achieved top quartile employee retention. This performance was evidenced during the year when we were recognised by WorkL, in partnership with The Telegraph newspaper, as one of the most engaging employers in the country ranked 221 out of over 23,000 organisations assessed.

During the year we have expanded our headcount by 45% to support our escalated strategic objectives defined at the fundraise in April 2021. I must thank the entire team at PCI Pal who have been involved in this process from the hiring managers to those who have supported them during our multi-stage interview processes. We have a rule at PCI Pal to only bring people into the business we feel excited about, and this has stood us in good stead with the excellent team and culture that we have built.

Further expanding our keen people focus, in the year we commenced an initiative to bring more focus to diversity and inclusion at PCI Pal. Whilst we believe we have a diverse and inclusive workplace today, we recognise that as a growing company it is important that we have visibility of data, understanding, and processes in place to ensure this important area is catered for as our growth continues. We have now completed our initial stages of gathering data, something our teams have embraced and given supportive feedback to. We will now continue that journey to allow the data to better inform management as we build processes to further drive this initiative.

Unfounded claims of patent infringement

In September 2021, the Group announced that Semafone Limited (now renamed Sycurio Limited), one of our competitors, had filed lawsuits in both the UK and the US relating to alleged patent infringement by PCI Pal. We believe that the claim was brought against us by Sycurio, shortly after they were acquired by a US-based Private Equity fund, primarily to try to disrupt the delivery of our growth plans.

The Directors continue to strongly refute the claims being made. The Group has formed a robust defence to the allegations of infringement and is confident in the strength of its counterclaims, which, if successful, would invalidate Sycurio’s entire patent portfolio. We have formed our strong position on counterclaims challenging the validity of their patents following an extensive investigation into Sycurio’s patents and the previous court challenges in the UK to their validity by other parties. The Group has therefore adopted a pro-active, multi-faceted defence strategy of proving non-infringement, despite the onus being on Sycurio to prove the  infringement, and also to disprove PCI Pal’s counterclaims of invalidity.

The litigation relates to PCI Pal’s Agent Assist product and the way that card data is captured when entered by a consumer using their telephone keypad. PCI Pal has a number of other products which do not rely on this process, and indeed none of the new anticipated products in PCI Pal’s development pipeline have a requirement for keypad entry and instead are focused on digital and form capture more similar with e-commerce and modern digital payment solutions.

As you would expect, not only are we defending the case strongly, but we have also made additional plans that, in the unlikely scenario that proceedings go against us, will provide a fallback position for the Agent Assist product to ensure non-infringement going forward. We expect to file confidential documents with the Court outlining the fallback position as is normal in patent claim cases.

The Board are prepared to fight this case all the way through the courts but, as stated previously, we will continue to explore all options that are in the best interest of the business to bring this matter to a satisfactory conclusion.

Strategy and market

PCI Pal’s addressable market today is any size organisation taking payments within business communications environments anywhere in the world. We work with our partners and customers to allow them to secure payments whilst adhering to strict information security rules around credit and debit card data, namely PCI Compliance. In particular our solutions are utilised within call or contact centre environments all of which utilise business communications platforms to engage with their customers.

Contact centre markets in both the UK and US represent between 2-3% of the working populations of those countries, and the trends are similar in the new territories we have expanded into in FY22. Our ability to serve a contact centre of any size is essential when considering the make-up of this large employment pool across our market. In the US alone 94% of all contact centres (37,000 contact centres) have between 10 and 250 agent seats, employing 2.04 million agents which makes up more than 55% of the entire employed agent population in the country.

By using PCI Pal services, companies not only secure the most sensitive of customer payment data, but they do so in such a way that will allow them to comply with the ever-changing information security and data governance standards related to how they handle this data. Additionally, by using PCI Pal services, customers will make significant progress towards broader regional data protection regulation such as GDPR in the European Union and the California Consumer Privacy Act in the US.

It is therefore a key differentiator for us to be able to serve organisations across our entire market. Our customers range from small contact centres up to the very largest with more than 5,000 agent seats, but by far the majority are in the small to mid-size range with our average annual contract values of between £15,000 and £20,000. This more numerous end of the market is a substantial risk reducer for churn in the business, given our revenues are spread across a higher number of customers.

We also target the less numerous, larger enterprise-size businesses and contact centres (that we defined as being contracts with an annually recognised revenue value for the Group in excess of £100,000 per annum) which currently represent 43% (2021: 43%) of our revenues. As there are relatively far fewer of these larger contracts, the enterprise deals are less predictable and more challenging to forecast.

Our addressable market is underpinned and strengthened by two major global industry dynamics occurring today: the increase in regulation and governance surrounding data security worldwide; and the transition in the communications market of services served from on-premise equipment moving to services delivered from the cloud. With the combination of these dynamics, PCI Pal is acting as an enabler for both security but also the payment itself, seamlessly integrated into our customer's customer engagement tools. Additionally, as the first in our space to bring a true-cloud offering to market, and the only global player with a sole focus on cloud, PCI Pal is in a strong position to capitalise on the digital transformation occurring across the business communications, security, and payments markets.

Having executed against our first 5-year strategic plan, and firmly established the three key pillars of growth we defined, we have driven significant partner and customer adoption of our products and services leading to us being recognised as the 56th fastest growing company in the UK by The Growth Index when compared to 32,000 similar companies. This strong and growing partner eco-system and customer-base now paves the way for the evolution of the PCI Pal product-set.

Cloud Technology

With approaching 500 customers worldwide, PCI Pal’s AWS-hosted cloud platform is the most mature cloud environment in its market. We launched this cloud offering in 2017 when the majority of the market was selling only hardware or privately hosted solutions and as a result have benefitted from this first-mover advantage. Today PCI Pal’s cloud services are resold by two thirds of the Gartner Magic Quadrant for CCaaS vendors as well as 35% of the world’s top 20 call centre business process outsourcers.

Amazon Web Services is our chosen provider of virtualised cloud services where we host our platform today. Our strategy to manage a single platform ensures operational efficiency while we deliver our product innovations and rapidly expand worldwide, allowing us to sell to high quantities of customers, maximising the market opportunity. Validating this technology strategy, AWS is the most commonly used cloud hosting provider across all our partners.

Evolution of PCI Pal product set

As stated at the fundraise in April 2021, the Group continues to drive investment into product and engineering as we seek to expand the addressable market opportunity, capitalising on the partner eco-system we have created. I am pleased to say we have made excellent progress here.

Towards the end of FY21, we hired a new CTO who is a very experienced, product-focused engineering leader with a SaaS, communications, and payments background. In his short tenure he has begun to take our product management and engineering functions to another level, as well as further improving the pace and robustness of our delivery cycles and change management, and continued service uptime excellence.

As well as strengthening the Group’s existing core products for securing payment data, the product team are starting to bring our long-term product vision to life. Having seen interactions into contact centres increase during the pandemic, along with the emergence of digital transformation which is driving a great mix of communications channel adoption in those environments, such as chat, social, and email, we are seeing an increase in demand to commercialise those interactions with consumers.
Contact centres to date have been unable to access more modern digital payment methods that websites benefit from, such as open banking, e-wallets, buy-now-pay-later (such as Klarna and Affirm), and many others. Realising our product vision will allow PCI Pal to provide our partners and customers with these types of services for their contact centres, giving them the opportunity to drive revenue, reduce payment processing charges, and increase customer experience through its payment solutions. Our existing compliance and security solutions, often fully integrated to our partners’ own technology stacks, are a natural foundation of these value-add services.

As an example, in March 2022 we announced our partnership with TrueLayer, one of the leading international providers of open banking solutions. Open banking payment options allow merchants to receive payments from consumers direct to bank giving significant cost savings to traditional credit card methods, and provide an additional layer of fraud reduction mechanism. Consumers benefit as they are even more protected from payment scams and have an instant record of payment. Our open banking solution will be formally launched in September.

Continued Sales Growth

In summary, an exceptional year of growth for the business, with revenue increased 62% year on year to £11.9 million. With a closing year end ARR run rate of £11.1 million, a 44% increase on the prior year, we are seeing the benefits of our SaaS subscription model as the revenue from our key sales growth indicator of TACV begins to hit recognition. TACV increased 40% year on year to £13.4 million (2021: £9.5 million). TACV includes all contracts that the company has whether they are at go-live and revenue recognition or not and is a key indicator of PCI Pal’s next 12-month recurring revenues.

Contributing to the increase in TACV, the Company delivered £3.5 million in new business ACV, an 11% increase year on year. In addition, and outside of ACV, the company was successful in securing additional transactional business from a number of customers. Where this transactional revenue is deemed of a recurring nature, the Board estimate the likely recurring level and include this in the Group’s ARR and TACV numbers. Transactional revenues make up approximately 22% (2021: 24%) of the TACV.

Supporting the Group’s revenue growth is a strong performance against our customer success objectives. With customer churn rates of just 3%, this is testament to our ability to deliver customer satisfaction. Our Net Promoter Scores (“NPS”) across the year were excellent compared to the global benchmarks at 65. More pleasing is our ability to continue to sell to existing customers, our NRR grew to 118% (2021: 111%) as we renewed and grew our agreements with two of our largest customers, as well as increased our licences to numerous other smaller customers.    It is these success metrics combined with our people and products that have allowed us to expand some of our largest accounts during the year in both the UK and US. This capability is particularly important as the business grows and adds new products, especially in such a changeable economic environment in the world today.

Having only launched the Canadian and Australian businesses mid-way through the year, the vast majority of new business sales have been delivered by the US and EMEA teams, with 85% of new business contracts in the period generated through resellers, highlighting the strength of our partner business. The EMEA business had an excellent year, with new business sales delivering 58% of the Group’s new business ACV at £2.0 million. The EMEA business benefitted from a more mature customer-base where upsell opportunities have been more numerous. Conversely, the US business delivered more net new logo business than the EMEA team which is what we expected considering the size of the market opportunity in the United States.

In the US, we increased TACV by 53% to £4.2 million (2021: £2.8 million) which included an additional £1.4 million in ACV sales, the remainder of the increase being transactional recurring fees from new business. The US market is still a number of years behind the UK in terms of payment security solution adoption, and therefore as planned, we only grew the US sales team during the year by one person while we expanded into new territories of Canada and Australia. The US remains the largest opportunity for the business long term, and we believe we have taken the right approach in balancing our push there with a global view in mind.  The Group continues to benefit across all territories as a result of our efforts with major partners in the US as the majority of these US-headquartered business are large global enterprises.

Market leading partner eco-system continues to expand

One of the key strategic pillars is to leverage channel partners to scale our business. Over the last five years we have successfully built the most extensive partner eco-system in our market. With 85% of new business sales in the period coming through partners, PCI Pal is a truly partner-first business. Today our partners include some of the most recognisable names in the business communications, BPO (Business Process Outsourcers), and payments markets including Genesys, Worldpay, Amazon Connect, Capita, NICE, and Webhelp.

We continue to work hard to deepen relationships with our existing partner base, and during the year we expanded our relationships with a number of our key partners including Genesys, 8x8, Sitel, and Talkdesk. These deeper relationships have allowed us to work closer with these partners’ own sales and product teams allowing us to align our solution better with their sales objectives.

In addition, we are still signing new partnerships that, once signed, go through our rigorous on-boarding process to ensure both us and the partner can begin to quickly mutually benefit from the relationship. New partners in the period include Teleperformance, who will leverage our full portfolio of payment security solutions seamlessly integrated to support their customers globally; and Amazon Connect, where using our AWS hosted, light-touch cloud capabilities we have created the first global integration of its kind available to their Amazon Connect contact centre customers available to be procured through the AWS Marketplace.

At PCI Pal, we categorise our partners into four different groups:

  • Integrated Partners - Such as CCaaS, UCaaS or carrier partners with tight telephony, and sometimes desktop, integrations. Repeatable integrations facilitate shorter customer implementation times
  • Solution Providers - Typically Value-Added Resellers ("VARs") and Systems Integrators of the major traditional telephony platforms such as Genesys, Cisco, and Avaya. Solution Providers also includes Payment Service Providers such as Worldpay B2B, Capita Pay 360, and Civica. We also include our BPO partners in this category of partners
  • Referral Partners - Partners who introduce customers to us, to whom we then sell direct. These include Master Agents, consultants, as well as other organisations who may prefer to first introduce, prior to becoming a fully enabled reseller
  • Technology Partners - typically these are major technology vendors, such as Oracle, with whom we have sought technology accreditations that allow us to sell to both their own partner communities and also major enterprise customers

Our global partners tend to be large organisations with minimum 1,000 employees, some much larger. As such, our journey with many of our partners still has some way to go and we are focussing our efforts into continuous enablement aligned with our increased investment into partner success and relationship management. We are very cautious to balance new partner acquisition efforts with the efforts required to maintain and grow our existing large partner relationships.

Current Trading & Outlook

As a result of the strong financial performance of the Group, we continue to be on track with our current plans to hit cashflow breakeven in the coming year, with monthly profitability following shortly after that point. The early signs of this were shown in FY22, with the EMEA business reaching Adjusted PBT profitability as the accumulation of sales through TACV reaches revenue recognition. Whilst we remain conscious of the rapidly evolving wider macro-economic environments affecting our key markets today in the UK and US, we are very confident in the prospects of this fast growing business.

We go into the new financial year excited by the anticipated further expansion of our existing partner and customer relationships, as well as increasing the value proposition of our services for new customers as a result of the expected realisation of our evolved product vision. We believe we are well positioned to continue the planned growth trajectory balanced with high retention rates, as we continue building this strong business.

 

James Barham
Chief Executive Officer

CHIEF FINANCIAL OFFICER’S REVIEW
FOR THE YEAR ENDED 30 JUNE 2022

Key financial performance indicators

The Directors use several Key Financial Performance Indicators (KPIs) to monitor the progress and performance of the Group. All the core KPIs are showing strong performance against expectations.

The principal financial KPIs are as follows:

 2022Change %2021Change %2020
Revenue£11.94m+62%£7.36m+67%£4.40m
Gross Margin84% 75% 69%
Recurring Revenue1£10.57m +63%£6.48m+75%£3.70m
Recurring Revenue as % of Revenue89%  88% 84%
Revenue generated from Non-UK deployments  £3.74m+82%£2.06m+280%£0.76m
Percentage of Revenue from non-UK deployments31% 28% 17%
      
Adjusted EBITDA2(£1.88m)+27%(£2.56m)+28%(£3.57m)
      
Cash facilities available3£4.89m  £7.52m £5.55m
Deferred Income£10.62m  £8.09m £4.53m

1 Recurring Revenue is the revenue generated from the recurring elements of the contracts held by the Group and recognised in the Statement of Comprehensive Income in the period

2 Adjusted EBITDA is the loss on operating activities before exceptional items, depreciation and amortisation, exchange movements charged to the profit and loss and expenses relating to share option charges

3 Cash balance plus undrawn debt facilities

The principal operational KPIs are as follows:

 2022Change %2021Change %2020
Contracted TACV1 deployed and live£11.05m+44%£7.69m+90%£4.04m
Contracted TACV in deployment£1.12m0%£1.12m-49%£2.19m
Contracted TACV – projects on hold£1.19m +70%£0.70m +34%£0.52m
Total Contracted TACV£13.36m+40%£9.51m+41%£6.75m
      
% of TACV derived from variable transactions deemed recurring22%  24%  31%
      
ACV of contracts cancelled before deployment£0.18m  £0.20m Not Calculated
      
Signed ACV in financial period£3.46m+11%£3.11m+19%£2.62m
      
AWS Platform Churn23.1%  6.7%  Not Calculated
AWS Platform Net Retention Rate3117.7%  111.1%  Not Calculated
      
Headcount at end of year (excluding non-executive directors)103 71 58
Ratio Personnel cost to administrative expenses 74% 71% 77%

1 TACV is the total annual recurring revenue of all signed contracts, whether invoiced and included in deferred revenue or still to be deployed and/or not yet invoiced

2 AWS platform churn is calculated using the ACV of lost deployed contracts in the period divided by the opening total value of deployed contracts at the start of the period

3 AWS platform net retention rate (“NRR”) is calculated using the opening total value of deployed contracts at the start of the period less the ACV of lost deployed contracts in the period plus the ACV of upsold contracts signed in the period all divided by the opening total value of deployed contracts at the start of the period

Revenue and gross margin

Overall Group revenue grew by 62% to £11.94 million (2021: £7.36 million) and gross margin improved to 84% (2021: 75%) with the majority of revenue generated from products hosted in our AWS environment.  The first-generation privately hosted platform, which we have not proactively sold since 2019, now accounts for 12% of revenues (2021: 24%). We have nearly completed the transition of payment customers from this platform to our AWS environment.

The EMEA business, the most mature business and based in the UK, had a strong year growing revenues to £8.46 million, a 55% increase on the prior year, while the international operations grew revenues to £3.48 million, an 83% increase on the prior year. Revenues from our non-UK customers now make up 31% (2021: 28%) of the overall Group revenues. The revenues generated from our international operations are expected to continue to grow strongly as we strengthen our position in the United States and continue our expansion into Canada, Australia and mainland Europe.

The Group’s revenue reflects its SaaS business model. It delivers its services primarily through channel partners into contact centres who are predominantly charged on a recurring licence basis. The terms of the sales contracts generally allow for automatic renewal of the licences for a further 12-month period at the end of their initial term. 91% (2021: 88%) of revenues recognised in the period have come from annually recurring licences and transactions. Our strong recurring revenue gives the Group high future revenue visibility.

ACV growth

Annual Contract Value (“ACV”) growth is a key leading growth metric of the Group. Contracts signed in the financial year begin to filter through on a monthly basis into recognised revenue after an average of 24 weeks (2021: 26 weeks) following deployment. ACV grew by 11% in the year to £3.46 million (2021: £3.11 million) positively reflecting the further development of the Group and its strong partner eco-system.

TACV

TACV at the end of the financial year increased 40% to £13.36 million (2021: £9.51 million). This metric is a key indicator of the near term expectation for the business to reach future cash flow and then profit break-even as customers go live with our services and revenue is recognised. Growing levels of TACV produces increasing levels of future revenue visibility, an attractive aspect of the Group’s business model. 22% (2021: 24%) of the TACV is from transactional revenues (including the Gen1 platform) which the directors deem are recurring in nature.

This £13.36 million of TACV is analysed as follows:

20222021 
£11.05 million£7.69 millionLive and delivering monthly revenue
£1.12 million£1.12 millionMid-deployment and therefore expected to deliver revenues in the next few months
£1.19 million£0.70 millionClassed as on hold

The value of annual recurring revenue from contracts that are live and deployed (“ARR”) as at the end of the financial year was £11.05 million.

Contracts are typically on hold as a result of a lack of resource with the customer and/or channel partner, or where our solution is part of a larger project being delivered by our partner or the customer, which may mean there is a delay in reaching the PCI Pal aspect of the project. Such on-hold contracts therefore take longer to start delivering recurring recognised revenues.

As with any internationally expanding business, exchange rates can disproportionately affect the reporting of Group numbers as assets and sales are translated into pounds sterling for reporting purposes. During the financial year we saw the US dollar exchange rate decrease from $1.40 to $1.23 which had the effect of increasing the sterling value of the US denominated contracts for TACV purposes by approximately £0.25m from the original internal expectations set using the $1.40 original exchange rate. The change also led to the exchange gain recorded in the Statement of Comprehensive Income., which more than reversed the charge from the previous year.

Churn and Net Retention

As the number of sales contracts grow and are deployed, we are seeing requests for additional licences as our customers grow or introduce us to other parts of their own groups, or purchase new products from us, such as PCI Pal Digital or Speech. These upsell contracts are now an important part of the Group’s ACV sales and in year represented £1.12 million (2021: £0.54 million) of the £3.46 million (2021: £3.11 million) total. The upsells in the financial year were particularly strong as a number of large customers renewed and increased the business they do with us at the same time. As a result, the Group’s net revenue retention rate (“NRR”) grew to an excellent 117.7% (2021: 111.1%).

During the year we agreed to terminate £0.18 million (2021: £0.20 million) of contracts prior to them going live due to changes in circumstances from the original expectations. Overall churn on the AWS platform in the year from contracts that had gone live was 3.1% (2021: 6.7%).

Internal adjusted operating loss1 metric

The Board uses an internal metric for calculating the adjusted operating loss for the Group to get a better comparative measure of performance by removing the non-cash changes caused from revaluing the Groups’ intercompany loans. The internal adjusted operating loss for the Group has changed as follows for the year:

 EMEANorth AmericaAustraliaCentralTotal
 £000s£000s£000s£000s£000s
2022     
Profit/(Loss) from Operating Activities before adjusting items240(1,337)(188) (1,779)(3,064)
Exchange rate movements93(932)7-(832)
Exceptional items relating to patent case legal fees37182-578797
Expenses relating to Share Options--- 246246
Internal adjusted operating profit/(loss)370(2,087)(181) (955)(2,853)
      
2021     
Profit/ (loss) from Operating Activities before adjusting items(866)(1,990)13(1,118)(3,961)
Exchange rate movements(12)563(1)-550
Expenses relating to Share Options---115115
Internal adjusted operating profit/(loss)(878)(1,427)12(1,003)(3,296)
      
Change in year1,248(660)(193)48443

1 Loss from operating activities before exchange losses/gains recorded in the profit and loss exceptional items and share option charges used for internal reporting comparisons

Adjusted EBITDA

 EMEA North America AustraliaCentral Total
 £000s £000s £000s £000s £000s
2022     
Internal adjusted operating profit/(loss) (from above)370 (2,087) (181) (955) (2,853)
Depreciation and amortisation89776--973
Adjusted EBITDA1,267(2,011)(181)(955)(1,880)
      
2021     
Internal adjusted operating profit/(loss) (from above)(878) (1,427) 12(1,003) (3,296)
Depreciation and amortisation69248--740
Adjusted EBITDA(186)(1,379)12(1,003)(2,556)
      
Change in year1,453(632)(192)46675

EMEA

The EMEA region reported its first Adjusted Operating Profit of £0.37 million (2021: loss of £0.88 million).  The region continued to deliver strong revenue which grew by 55% to £8.46 million (2021: £5.46 million) resulting in an improvement of £2.87 million in Gross Profit at a margin of 79% (2021: 70%).

Administrative costs, before exchange movements and exceptional items, grew by £1.62 million to £6.31 million primarily reflecting a further investment in personnel, especially in the Product, Engineering and Customer Success departments following the successful fundraising in April 2021.

Depreciation and amortisation costs were £0.90 million (2021: £0.69 million) meaning that the EMEA operation recorded an adjusted EBITDA profit of £1.27 million (2021: loss of £0.19 million).

North America

The North America region’s Adjusted Operating Loss (which includes the new Canadian operation) increased by £0.66 million in the year to £2.09 million (2021: £1.43 million). 

The region continued to deliver strong revenues which grew by 83% to £3.31 million resulting in an improvement of £1.50 million in Gross Profit at a margin of 96% (2021: 91%).

Administrative costs before exchange movements and exceptional items grew by £2.17 million to £5.25 million. During the year the Group opened its Canadian office and hired its first employees. Additional sales and marketing employees were also hired in the US operation. Included in the administration costs, the North American operation paid an intercompany royalty to the UK operation of £0.83 million (2021: £0.45 million).   

Depreciation and amortisation costs were £0.08 million (2021: £0.05 million) meaning that the North American operation recorded an adjusted EBITDA loss of £2.01 million (2021: £1.38 million).

Australia

The Group in the year opened an office in Sydney, Australia, having previously sold to the region via the US team remotely. The first employees were hired in the third quarter of the year.

Revenue for the region almost doubled to £0.17 million (2021: £0.09 million) reflecting the full effect of contracts sold in the prior financial year.

As a result of the investment the region swung into an Adjusted Operating Loss of £0.18 million (2021: profit of £0.01 million)

Central

Costs for the Central operation relate to the PLC activities of being a listed company only, including the majority of the employment costs of James Barham (CEO) and myself, as well as the non-executive directors.

Further segmental information is shown in Note 10.                      

Administrative expenses

Total administrative expenses were £13.08 million (2021: £9.52 million), an increase of 37%. Of the £3.56 million increase, £0.80 million were classified as exceptional relating to the cost in the year of defending the unfounded patent claim being made against us by Sycurio Limited, a credit of £0.83 million related to the positive movement in exchange rates and £0.25 million to the movement in share option charges.

The underlying increase was therefore £3.34 million, of which £3.24 million was from the overall increase in personnel costs as the Group moved from 71 employees to 103 employees at the end of the financial year. The cost to run the AWS platform (including the development and staging systems) in the year was £0.89 million (2021: £0.87 million) highlighting the scalability of the AWS platform. Depreciation and amortisation increased by £0.23 million to £0.97 million.

Personnel costs charged to the Statement of Comprehensive Income (including commission, bonuses, recruitment and travel and subsistence expenses) were £9.55 million (2021: £6.30 million), and £1.05 million (2021: £0.79 million) of the personnel costs were capitalised as Development costs. These personnel costs make up 74% (2021: 71%) of the administrative costs of the business. Travel expenditure increased back to £0.34 million (2021: £0.03 million) following the lifting of restrictions for travel during the pandemic.

Patent case defence costs

During the financial year the Group incurred legal and professional fees relating to the defence of the patent case totalling £0.80 million.

A significant amount of work has been undertaken in preparing both the US and UK defence to date. The UK court case is currently scheduled for June 2023 and the US court case scheduled for the summer/autumn of 2024.  As at the end of June 2022, the directors estimated that there were a further £2.9 million of legal fees to be paid if both claims against us went to court. It is currently estimated that the legal costs to be incurred in FY23 by the Group will be £1.96 million.

The patent costs per entity are estimated as follows:

 Incurred in year
£000s
To be incurred in future
£000s
Estimated total cost of defence
£000
PCI-Pal PLC5781,1941,772
PCI-Pal (U.K.) Ltd37-37
PCI Pal (U.S.) Inc1821,7061,888
 7972,9003,697

The legal costs relating to the claim incurred to date have been disclosed as an exceptional item in the Consolidated Statement of Comprehensive Income.

Changes in accounting policies

There are no changes in our accounting policies for FY22.

Capital expenditure

As required by IAS 38, the Group capitalised a further £1.10 million (2021: £0.92 million) in development expenditure as we continue to invest in the AWS cloud platform and introduce new features and products.

The Group also capitalised £0.05 million (2021: £0.13 million) of external contractor work relating to the Group’s new website and management reporting systems.

The business renewed its leases at its head offices resulting in a right-of-use asset addition of £0.13 million.

Other capital expenditure was £0.13 million (2021: £0.04 million). Most of this expenditure related to new laptops for the new and existing employees.

Set-up and Professional Services Fees

During the financial year, the Group generated from new contracts £1.41 million (2021: £1.63 million) of set-up and professional services fees. These fees are initially held in the balance sheet as deferred income and then released to revenue over the economic length of the contract as governed by the IFRS 15 accounting standard.

Deferred income

Deferred income increased 31% to £10.62 million (2021: £8.09 million), mostly reflecting the significant growth in new business sales and the consequent increase in licence fees invoiced in advance, as well as the continued build-up of set up and professional services fees which are invoiced on signature of a contract then released over the length of the contract, as required by IFRS 15.

Trade receivables

Trade receivables grew to £2.96 million (2021: £2.15 million) as the business expanded its contract base. The level of receivables reflects both debtors generated from new business sales as well as existing contract renewals outstanding at the end of the period. As at the 30 June 2022, £0.67 million (2021: £0.61 million) of the outstanding debtors related to newly signed contracts.

Our debtor collection rates remain good ending the year with 78% (2021: 91%) of debtors less than 60 days old. The comparative 2021 collection rate was exceptional and benefitted from some one-off contractual circumstances. The Board does not believe that any of the debts over 60 days old will require to be written off.

Taxation

During the year the UK entity received £0.16 million (2021: £0.15 million) as an R & D tax credit from HMRC relating to the financial year ended 30 June 2020. An application will be made relating to the financial years ended 30 June 2021 and 30 June 2022, the amount of which is currently unknown.

Cashflow and liquidity

Cash as at 30 June 2022 was £4.89 million (2021: £7.52 million).

In FY22 the Group used £1.52 million (2021: generated £0.25 million) of cash from its operating activities. The cash used in FY22 includes £0.80 million (2021: £nil million) of cash spent on the legal fees relating to the patent case. The adjusted net cash spend is therefore £0.83 million which is substantially better than the reported £2.85 million Adjusted Operating Loss. The strong cash generation relative to the current losses is primarily driven by our SaaS business model that typically invoices in advance for the solutions sold.

Going Concern considerations

The Board continues to monitor the Group’s trading performance carefully against its original plans, global economic pressures, such as inflation, and other factors affecting our core markets and products. It also reviews the potential impact of the COVID-19 pandemic.  However, the challenges the business faced from the pandemic in FY22 have continued to diminish as the year progressed and a greater understanding of the risks were developed. The pandemic has not had a significant impact on the Group’s financial performance.

During the year the Group continued to win new contracts, recording new ACV sales of £3.46 million, as well as substantial growth in its transactional revenues.

The group deployed new customer contracts with an annual recurring revenue value of £3.36m. At the end of the financial year the group had £11.05 million of deployed, live contracts contributing to revenue recognition which helps underpin our expectations for revenue growth in FY23.

With the Group year-end being 30 June, the Group prepared its next financial year budgets in the April to June period. The budget for FY23 was prepared, along with an extended forecast into FY24, following detailed face-to-face meetings with all managers with a focus on building on the FY22 excellent performance and on the product plans and roadmap established in FY22. The budget includes an assumption of a more modest expansion of headcount as compared to FY22.

The Group finished the year with a cash balance of £4.89 million and no debt.

The Board considered the budget presentation in June and the controls in place that are designed to allow the Group to control its overhead expenditure while still maintaining its momentum and delivering market forecasts. Particular attention was paid to the potential sensitivity impacts that any adverse movement in sales and customer deployments might have on the Group’s net cash position and the level of headroom achieved.

The Board considered the likely timing and impact of the legal fees relating to the patent claim being made against it on the cash flow of the Group over the next 24 to 36 months. The sensitivity scenarios around the budget models indicate that the Group would continue to have sufficient resources to meet its expansion plans in FY24 whilst at the same time meeting the cost requirements of defending the patent case.

The Board also considered actions that could be taken to help mitigate the actual results if the assumptions made in the original forecast proved to be overly optimistic. At all points the Directors were satisfied in the robustness of the Group’s financial position from the presented plans which, they believe, take a balanced view of the future growth prospects, together with the contingencies that can be taken if the budget assumptions prove to be materially inaccurate.

The Directors therefore have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For these reasons, the Directors continue to adopt the going concern basis in preparing the accounts.

Dividend

The Board is not recommending a dividend for the financial year.

 

William Good
Chief Financial Officer

Consolidated statement of comprehensive income
FOR THE YEAR ENDED 30 JUNE 2022

 Note2022
£000s
2021
£000s
Revenue 11,9377,362
Cost of sales (1,924)(1,805)
Gross profit 10,0135,557
Administrative expenses (13,077) (9,518)
Loss from operating activities (3,064)(3,961)
    
Adjusted Operating Loss (2,021)(3,846)
Expenses relating to share options (246)(115)
Exceptional items6 (797)-
Loss from operating activities (3,064)(3,961)
Finance income71-
Finance expenditure8(44)(230)
Loss before taxation 5(3,107)(4,191)
Taxation12164154
Loss for the year  (2,943)(4,037)
Other comprehensive expense:
Items that will be reclassified subsequently to profit or loss
   
Foreign exchange translation differences (1,086)653
Total other comprehensive (expense) / income (1,086)653
Total comprehensive loss attributable to equity holders for the period (4,029) (3,384)
    
Basic and diluted loss per share11 (4.50) p (6.64) p

The accompanying accounting policies and notes form an integral part of these financial statements.

Consolidated statement of financial position
AS AT 30 JUNE 2022

 Note2022
£000s
2021
£000s
ASSETS   
Non-current assets   
Plant and equipment1423874
Intangible assets132,6612,366
Trade and other receivables15964801
Deferred taxation18--
Non-current assets 3,8633,241
Current assets   
Trade and other receivables154,2032,928
Cash and cash equivalents 4,8887,518
Current assets 9,09110,446
Total assets 12,95413,687
  LIABILITIES   
Current liabilities   
Trade and other payables16(11,372)(7,817)
Current liabilities (11,372)(7,817)
Non-current liabilities   
Other payables17(1,397)(1,941)
Non-current liabilities (1,397)(1,941)
Total liabilities (12,769)(9,758)
Net assets 1853,929
EQUITY   
Share capital20656655
Share premium 14,28114,243
Other reserves 650404
Currency reserves (620)466
Profit and loss account (14,782)(11,839)
Total equity 1853,929
J BarhamDirector
T W GoodDirector

Consolidated statement of changes in equity
FOR THE YEAR ENDED 30 JUNE 2022

  Share capital Share premium Other reserves Profit and loss account Currency Reserves Total Equity
  £000s £000s £000s £000s £000s £000s
Balance as at 1 July 2020 594 9,018 289 (7,802) (187) 1,912
Share option charge   -   -   115   - - 115
New shares issued net of costs 61 5,225 - - - 5,286
Transactions with owners 61 5,225 115 - -      5,401
Foreign exchange translation differences   -   -   -   - 653 653
Loss for the year - - - (4,037) - (4,037)
Total comprehensive loss - - - (4,037) 653 (3,384)
Balance at 30 June 2021 655 14,243 404 (11,839) 466 3,929
Share option charge   -   -   246   - - 246
New shares issued net of costs 1 38 - - - 39
Transactions with owners 1 38 246 - -   285
Foreign exchange translation differences   -   -   -   - (1,086) (1,086)
Loss for the year - - - (2,943) - (2,943)
Total comprehensive loss - - - (2,943) (1,086) (4,029)
Balance at 30 June 2022 656 14,281 650 (14,782) (620) (185)

Consolidated statement of cash flows
FOR THE YEAR ENDED 30 JUNE 2022

  2022
£000s
2021
£000s
Cash flows from operating activities    
Loss after taxation (2,943) (4,037)
Adjustments for:    
Depreciation of equipment and fixtures 85 69
Amortisation of intangible assets 85 76
Amortisation of capitalised development 803 595
Loss on disposal of equipment and fixtures 3 -
Interest income (1) -
Interest expense 11 206
Exchange differences (1,124) 676
Income taxes (164) (154)
Share based payments 246 115
Increase in trade and other receivables (1,438) (1,017)
Increase in trade and other payables 2,918 3,721
Cash (used in) / generated from operating activities (1,519) 250
Income taxes received 164 154
Interest paid (11) (206)
Net cash (used in) / generated from operating activities (1,366) 198
Cash flows from investing activities    
Purchase of equipment and fixtures (124) (40)
Purchase of intangible assets (48) -
Development expenditure capitalised (1,098) (920)
Interest received 1 -
Net cash used in investing activities (1,269) (960)
Cash flows from financing activities    
Issue of shares 39 5,608
Expenses related to issue of shares - (323)
Drawdown on loan facility - 1,250
Repayment of loan facility - (2,523)
Principal element of lease payments (34) (33)
Net cash generated from financing activities 5 3,979
Net (decrease) / increase in cash (2,630) 3,217
Cash and cash equivalents at beginning of year 7,518 4,301
Net (decrease) / increase in cash  

(2,630)
 

3,217
Cash and cash equivalents at end of year 4,888 7,518