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.

Interim Results

 

PCI-PAL PLC (AIM: PCIP), the global cloud provider of secure payment solutions for business communications, is pleased to announce its unaudited interim results for the six months to 31 December 2021.

 

Financial highlights for the period

  • Revenue increased 72% year on year to £5.47 million (2020: £3.19 million)
  • Gross margin improved to 81% (2020: 73%)
  • Recurring revenues represent 90% of total revenue (2020: 86%)
  • New ACV1 contract sales in the period were £1.76 million (2020: £1.68 million)
  • TACV2 as of 31 December 2021 increased to £11.34 million (2020: £8.27 million)
  • ARR3 as of 31 December 2021 increased to £8.96 million (2020: £5.89 million)
  • Loss from operating activities in line with expectations at £1.10 million (2020: £2.15 million)
  • Cash at period end of £5.53 million (30 June 2021: £7.52 million). The Group is debt free.

Operating highlights in the period

  • Partner eco-system performing well and growing with 81% of new customer contracts from channel partners
  • New business ACV ahead of management expectations
  • Excellent upsell success within existing customer base resulting in strong NRR4 of 120%
  • Customer retention strong throughout period, with churn5 at just 3.5%
  • New strategic initiatives progressing despite challenging global hiring market:
    • Canada team established in December 2021
    • New product team resources hired during H1
  • Strong operational performance with TTGL6 better than management expectations, and strong NPS7 scores for both delivery and service
  • High employee retention at 96% despite challenging employment markets worldwide
  • Added two new members to the PCI Pal Advisory Committee (“PAC”), both US-based with Customer Success, Cloud, and Product Management expertise
  • Mounted robust defence and counterclaims to unfounded patent infringement allegations from competitor

Current trading

Strong trading momentum has continued into the second half with highlights since 31 December 2021 including:

  • Strong start to H2 with new business sales in line with management expectations
  • Revenue momentum continuing, with strong visibility of full year number
  • Australian business launched with first hires now joined
  • Won Best Compliance Product at the CX Awards 2022

1 ACV is the annual recurring revenue generated from a contract.

2 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.

3 ARR is the Annual Recurring Revenue of all the deployed contracts.

4 NRR is the net retention rate of the contracts that are live on the AWS platform rate and is calculated using the opening total value of deployed contracts 12 months ago less the ACV of lost deployed contracts in the last 12 months plus the ACV of upsold contracts signed in the last 12 months all divided by the opening total value of deployed contracts at the start of the 12 month period.

5 Churn is calculated using the ACV of lost deployed contracts on the AWS platform in the last 12 months divided by the opening total value of deployed contracts 12 months ago.

6 TTGL is Time-To-Go-Live measurement used by the Group and defines the average time taken for a contract to be fully deployed from the date of signature of that contract.

7 Net Promoter Score (NPS) is a customer loyalty and satisfaction measurement taken from asking customers how likely they are to recommend your product or service to others.

 

Commenting on the results for the period, James Barham, Chief Executive Officer said:

“We have delivered another strong period of growth whilst at the same time making substantial progress against our expansion plans for the year.  I am particularly pleased that despite the headwinds of a challenging global hiring market, as well as the unfounded patent claims being made against us by a competitor, we have been able to continue to deliver on these expanded plans; growing revenue substantially; adding key new strategic resellers to our market-leading partner eco-system; and adding exciting new talent to our existing people resources.

“It is this execution against our current plans, as well as the long-term strategic opportunities in front of us through further expansion and product development, that give me great confidence in the outlook for the Company which remains on track to achieve market expectations for the current financial year.”

Analyst Briefing: 9.30am on Tuesday 1 March 2022

An online briefing for Analysts will be hosted by James Barham, Chief Executive Officer, and William Good, Chief Financial Officer, at 9.30am on Tuesday 1 March 2022 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 3 March 2022

The Directors will hold an investor presentation to cover the results and prospects at 3.00pm (UK time) on Thursday 3 March 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.

Chief Executive Officer's Business Review

Overview

We have made an excellent start to the financial year, with all key metrics either at or ahead of management expectations for the period. Revenue for the Group has increased substantially, up 72% year on year to £5.47 million, illustrating the continuing build-up of new customer contracts combined with high customer retention rates. Given we have increased our key growth metric and indicator of future revenues of TACV by 37% to £11.34 million (2020: £8.27 million), we expect revenue growth to continue in line with market expectations.

It is particularly pleasing to report that despite the unfounded patent infringement lawsuit and a challenging hiring market worldwide, not only have we maintained our sales momentum, but we have also been able to drive the recruitment needed to execute against our escalated expansion plans following the fund raise in April 2021. This progress has included the establishment of our Canadian business, broadening the scope of our North American efforts, and continued investment into our engineering and product development capabilities. Since the half year, we have now also launched in Australia.

The PCI Pal partner eco-system has further strengthened in H1 as we continue to sign new strategic partners, both global and regional in nature. We now have a close working relationship with over two thirds of the major organisations that make up the CCaaS Gartner magic quadrant for 2021. New contracts from our channel partners make up 81% of the total in the period (2020: 75%). Overall new business wins were marginally ahead of management expectations with new ACV of £1.76 million (2020: £1.68 million). Further growth is anticipated in H2 as our newly recruited additional sales resources and marketing investment come “online” in the US, Canada and Australia.

In the first full financial year with our new Customer Success function in place we report strong NRR, which increased to 120% (30 June 2021: 111%). Our customer retention efforts continue to be successful, resulting not just in expansion of contract values of direct and reseller customer accounts, but also in achieving customer churn of just 3.4%.

People

At PCI Pal we have a corporate objective to: “create a culture that people want to be part of”, and this is a critical consideration when we look at both retention of existing employees as well as attracting new talent to the Company. This year our ambition was to take this focus on our people to the next level: investing further; considering carefully our processes around learning and development; and improving the tools available to the business, managers and their teams to empower them to be successful. I’m pleased to report that we’ve made excellent progress against these plans in the first half.

Shortly after the start of the financial year in July 2021, we saw a change to the global jobs market for technology professionals. The “War for Talent” had begun, brought about by imbalance of supply and demand of quality candidates. Through further strengthening of our recruitment processes and hiring strategies we have remained on target with our new expansion plans, which are heavily reliant on additional people resource.

I am pleased to say that through building a strong culture, we have also performed well in retaining talent at PCI Pal, with employee retention of more than 89% for the period. One of our key values is “enjoy the journey”, and we believe this message is not just about the journey in the workplace and a person’s career, but also about satisfaction, mental well-being, and progression in life. We believe that with these considerations in focus, we are building a positive environment and culture that will continue to support our fast-paced growth.

Our people are critical to this business continuing to be successful and achieving its goals, and we will continue to strive to lead our market in this regard with the focus we have on our culture and employer brand.

PCI Pal Advisory Committee (“PAC”)

Given our strategic focus to be the leader in channel and cloud technology in our market, we have further expanded the PAC with two experienced executives, both-US based, covering the fields of customer success and international cloud products and services. The PAC works with myself and the Board to provide insight and experience into day-to-day opportunities and challenges; as well as providing thought leadership on key strategic topics that we are considering as we continue to unfold the long term strategic plan for the business.

Unfounded Patent Infringement Claims

In September 2021, one of our main competitors, Semafone Ltd filed lawsuits in both the UK and the US relating to alleged patent infringement by PCI Pal. We strongly refute the claims. Since our formation we have regularly taken detailed steps to ensure we do not infringe on any third-party intellectual property rights, which has included Semafone. As the first company to launch cloud solutions in the market, PCI Pal has its own IP for the innovative cloud technologies that it has brought to the secure payments space, making secure payment solutions easier to access, more cost efficient, and available globally.

Since the allegations were made, our legal teams have provided detailed submissions to the courts that clearly explain our position on non-infringement and the invalidity of the Semafone patents. We will defend ourselves from a position of strength given the continued growth trajectory of the business, a varied secure payments product set, as well as our continued investment into products and services upon which this case has no bearing. As announced in November 2021, the Company has filed its UK defence and counterclaim to the UK Court in response to the claims made against the Company and in the US, PCI Pal has made an application to the US Court for it to invalidate the Semafone US patents under section 101 of the US Patent Act. Both of these actions are ongoing.

We will continue to consider all the options available to us in order to find the outcome that we believe will best benefit the business and shareholders. Due to the continuing strong financial performance this year we continue to be well funded, which will allow us to see out the process to its fullest extent as we challenge these unfounded claims.

PCI Pal cloud & product development

PCI Pal was the first to launch a true cloud solution in its market, and as a result has the most mature and most utilised platform, with more than 400 customers, including numerous large global enterprises, now leveraging our secure payment services. We brought this disruptive approach to a market which was previously burdened by hardware led, on-premise solutions, and as a result we have empowered our customers to secure their own customers’ data through the use of our highly flexible, light-touch, and easy-to-integrate cloud solutions.

Amazon Web Services is our chosen provider of virtualised cloud services where we host our platform today. Validating this technology strategy, AWS is the most commonly used cloud hosting provider across all our partners. This cloud strategy has been a key factor in our capability to partner with some of the world’s leading technology companies in the business communications (CCaaS and UCaaS) and payments markets. Our partner eco-system continues to grow from strength to strength and includes many international technology providers including Genesys, Worldpay, 8x8, Vonage, and Talkdesk.

The PCI Pal cloud incorporates availability zones across AWS that cover Europe, North America, and Australia. With all zones having been established for a number of years, we are well positioned for the platform to support our escalated growth plans as we add people resource to the new regions of Canada and Australia where to date we have built up a customer-base selling entirely remotely. The PCI Pal platform is designed to enable us to expand our global reach at pace, while maintaining high uptime reliability of our services.  As we continue to grow internationally, the platform will not only support that expansion but also provides a foundation from which we are evolving our product offerings in line with our ambitious long-term plans.

Product

Our core products today cover the entire spectrum of business communications; Agent Assist, our live contact centre agent secure payment tool; IVR, our fully automated service for auto-attendant environments where no agent is involved; and Digital, our solution that empowers businesses to handle secure payments through any number of digital channels such as chat, social, SMS, email and more.

Since the fundraising in April 2021 and following the planned hire of our new CTO in May of that year, we have in FY22 further expanded our engineering and product resources in order to support our new escalated ambitions for PCI Pal products. As we look to capitalise on our global platform and leading market position, we have added further experience and talented people to the engineering team, as we execute two key product initiatives. The first is to continue to refine our market leading core cloud offering today; and the second to make progress towards our wider, complementary product ambitions. We look forward to updating investors in H2 as our new product initiatives gather pace.

Continued sales and partner growth

Sales & revenue growth

In the first half, we have taken another sizeable step forward in revenue growth, achieving revenues in the period of £5.47 million which was ahead of expectations, and an excellent 72% increase year on year. With 71% of Group revenue generated by our more mature EMEA business (£3.89 million), we are pleased to report our first period of EBITDA profitability for the region, meaning we are on track to reach our mid-term goals for our first months’ of Group profitability in FY23.

Contributing to the revenue performance is our operational capability to rapidly get our customers live and to the point of revenue recognition. We continue to perform well, and as a result ARR has increased considerably to £8.96 million (2020: £5.89 million), with our key deployment metric of TTGL ahead of management expectations for the period at 22 weeks. It is particularly encouraging to me that these new customers are going live with high satisfaction levels; with our NPS for implementations in the period 138% of global benchmarks for businesses in similar industries.

Our TACV growth has been strong, supported by new business ACV contract sales which were marginally ahead of management expectations for the half year at £1.76 million (2020: £1.68 million). This is a pleasing result given the sales teams have yet to benefit from the additional sales heads that have joined us late in the period (and in the start of H2). Partners accounted for 81% of new contracts compared to 75% in 2020. TACV has grown by 37% to be £11.34 million as at 31 December 2021 (2020: £8.27 million).

Sales highlights for H1 include the continued volume of new contracts from the key small to mid-size sector of the market, as well as a number of strategically important enterprise customers which included one of the largest pharmaceutical companies in the world. With the first phase of this customer’s deployment now live, the account brings with it significant on-going potential for account growth. In addition, we successfully expanded some of our existing enterprise-level customers which has contributed directly to our strong NRR metric in the period of 120%.

North America

Our North American operation is growing rapidly thanks to our strong partner relationships and a growing recognition of our solutions in the region. We are particularly pleased with the step forward we have made in TACV which has grown 45% to £3.46 million (2020: £2.39 million). As a result, revenue in the first half grew 89% to £1.58 million (2020: £0.84 million).

New ACV sales bookings for the first half were as expected at £0.77 million (2020: £0.70 million), and this growth was against a strong comparable that included the build-up of delayed sales last year as a result of the onset of the pandemic. During H1 we expanded our sales and marketing presence and so we are expecting further growth in new contracts as the new members of the sales team begin to contribute to sales delivery. 78% of new contracts in North America have been won through channel partners, and this accounted for 71% of the total new ACV value achieved in the period.

The North American operation continues to be a significant growth opportunity, with the vast majority of our global partners having headquarters in the US. 

Partner eco-system

We are a partner-first business and during the period we have continued to strengthen those key partnerships with the likes of Genesys, 8x8 (with whom we signed a recent multi-year extension to our previous rolling reseller agreement), Sitel, and Talkdesk. Driven by the value we represent to these partners, we have started to see these relationships deepen, achieving priority ranking in their marketplace offerings and invitations to join their partner advisory boards. This positions us strongly, particularly where partners have a marketplace offering, taking PCI Pal to the next level of engagement where we are the preferred solution offered by their own sales teams.

We signed a number of new partners in the period, further expanding our core eco-system. New partnerships included CCaaS and CPaaS providers as well as a number of new international BPO partners won as a result of our specific targeting of that sector in the last 18 months.

The highlight partnership signed was with Amazon, where we now have an approved integration to their contact centre platform, Amazon Connect. We have agreements in place that allow Amazon customers to procure PCI Pal’s services via their own existing AWS Marketplace agreements. As the first global vendor to achieve this, we are very excited about the long-term potential this relationship will bring as we continue our on-boarding process navigating their extensive global eco-system.

Geographic expansion

As planned, we successfully launched our Canadian operation with our first hires starting at the back end of Q2. With headquarters in Toronto, our initial sales and marketing focused team will benefit from the Group’s partnerships with global providers who have presence in the region; as well as from direct sales opportunities as a result of a largely untapped payment security market in Canada. PCI Pal is the only company in our space with dedicated in-country resources, something we find critical to being able to truly support global partners’ teams anywhere in the world.

I am also pleased to report that since the start of H2 we have now launched our Australian business with our first hires now with us. Those hires come with extensive knowledge of both the wider business communications market in Australia and New Zealand, as well as more specific knowledge of our secure payments space, and again will work closely with our existing Partner eco-system in ANZ.

Current Trading & Outlook

Having traded ahead of management expectations for the first half of the year, we have also made a positive start to H2 with strong revenue growth continuing. Due to the nature of our revenue model, visibility for the full year is strong and we are therefore confident of achieving the recently upgraded market forecasts.

New sales bookings in the two months to the end of February 2022 have been in line with management expectations, and have included highlight wins such as a Fortune 500 US retailer, a FTSE100 oil and gas company, and a further new contract with a major central government agency in the UK. All three contracts were won through reseller partners.

With the continued progress being made by the Company I am looking forward with great confidence as we continue to increase our geographic reach, partner eco-system and customer numbers. We continue to see excellent opportunities for our class-leading cloud solutions with organisations across the world.

James Barham
Chief Executive Officer
1 March 2022

CFO’s Financial Review

The Group’s financial performance for the six months to December 2021 has been very good, with all key financial metrics either meeting or exceeding target.

Revenue and gross margin

Group revenue grew by 72% to £5.47 million (2020: £3.19 million) and gross margin improved to 81% (2020: 73%). These improvements continue to reflect the high quality recurring revenues from the Group’s growing customer base paired with the operational efficiency of its full cloud PCI Pal platform, hosted on AWS. With a low churn rate and strong new sales, we expect this growth to continue.

The Group’s revenue reflects its SaaS business model. It sells its services mostly through channel partners to customers who use PCI Pal solutions in their contact centres. These customers are typically 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. Of the revenue recorded in the period, 90% (2020: 86%) has come from annually recurring licences or transactions.

With a sales performance ahead of management expectations in the period, TACV at the half year has grown to £11.34 million (2020: £8.28 million), which provides the Group with a high visibility of revenue for the remainder of the financial year. More importantly, customers have continued to go live with our services in line with our TTGL expectations and as a result our ARR of “live” contracts has increased by 52% and stood at the period end at £8.96 million (2020: £5.89 million).

Churn and Net Retention

As the Group continues to grow it has invested further in the Customer Success function. The Directors are pleased to report that its positive Net Revenue Retention ("NRR"), for its AWS platform, has increased to 120% (30 June 2021: 111%), which has included a number of expansion sales to several enterprise-sized customers. Additionally, customer churn on the platform has further improved to 3.5% (30 June 2021: 6.7%).

Administrative expenses

Total administrative expenses were £5.54 million (2020: £4.47 million), an increase of 24%.

The Group has continued to take on new headcount to support its international growth and product development plans with the number of employees increasing from 71 as at 30 June 2021 to 86 at the period end.

Personnel costs charged to the Statement of Comprehensive Income (including commission, bonuses and travel and subsistence expenses) were £4.02 million (2020: £2.95 million), of which £0.47 million (2020: £0.39 million) were capitalised as Software Development costs. Personnel costs make up 73% (2020: 73%) of the normalised administrative costs of the business.

The expense of running our AWS platform and associated software was £0.45 million in the period (2020: £0.38 million). This expense includes the platforms used for developing, staging and testing of our solutions, as well as the cost of running the six production instances active today.

Included in the administrative expenses is a credit for foreign exchange movements of £0.33 million (2020: charge of £0.37 million) which has been caused by the weakening of the US dollar from $1.3969 as at 30 June 2021 to $1.3215 as at 31 December 2021. Depreciation/amortisation of £0.45 million (2020: £0.35 million) has also been charged.

Exceptional costs

In September 2021, Semafone Limited, a competitor of the Group, filed a lawsuit in both the UK and US relating to alleged patent infringements by PCI Pal. The Directors strongly refute the allegations being made and have instructed UK and US lawyers to prepare the defence of the claim. To the end of December 2021, the Group had incurred £0.28 million of legal fees relating to the patent claim and these expenses have been treated as an exceptional item in the Group’s Statement of Comprehensive Income.

Expansion plans

In April 2021 the Group raised £5.2 million net of expenses from our shareholders to help fund its further international expansion, especially into Canada, Australia, and to allow further development of its products and solutions.

The Group has now opened up subsidiaries in Canada and Australia and the first key hires have been made with employees having started in December and February respectively. The expansion plans are on track. Notwithstanding the challenging recruitment market, we have been able to keep strategic hiring in line with our plans, but we have experienced a financial benefit as a result of delays to some other hires where positions were slower to fill. As a result, this has helped produce the smaller adjusted operating loss for the period than originally expected..

Looking forward to the second half of the financial year, we have now caught up with the majority of the delayed hires and so therefore would not expect these one-off operational savings to be repeated in H2. As a result, our Administrative Expenses will return to the expected level meaning our adjusted operating loss for the second half of the year will be higher than the first half.

Adjusted operating loss

The regional operating results and underlying performance analysis used within the Group are shown in Notes 4 & 5 below. Adjusted operating losses, excluding the charges resulting from the Group’s share option scheme, exceptional costs and any exchange gains and losses charged to the Income Statement, improved 39% to a loss of £1.04 million (2020: £1.71 million).

Adjusted EBITDA losses improved by 57% to a loss of £0.58 million (2020: £1.36 million). Of particular note is that the EMEA operation, the Group’s largest division, reported its first Adjusted EBITDA profit of £0.69 million (2020: loss of £0.17 million).

Key financial performance indicators

The Directors use several Key Financial Performance Indicators (KPIs) to monitor the progress and performance of the Group, its subsidiaries and targets. All the core KPIs continue to show performance ahead of expectations.

The principal financial KPIs are as follows:

 As at 31 Dec 2021 Change % As at 30 Jun 2021 Change % As at 31 Dec 2020
      
Revenue in the six month period £5.47m +31% £4.17m +31% £3.19m
Gross Margin in the six month period 81.2%  77.6%  72.8%
Recurring Revenue1 in the six month period £4.95m +33% £3.73m +57% £2.75m
Recurring Revenue as % of Revenue in six month period 90%  89%  86%
      
Adjusted EBITDA2 in six month period (£0.58m) +52% (£1.20m) +12% (£1.36m)
      
Cash facilities available3 £5.53m  £7.52m  £4.23m
Deferred Income £8.75m  £8.09m  £6.36m

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

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

3 Cash balance plus undrawn debt facilities

 

The principal operational KPIs are as follows:

 As at 31 Dec 2021 Change % As at 30 Jun 2021 Change % As at 31 Dec 2020
Contracted TACV1 deployed and live £8.96m +17% £7.69m +31% £5.89m
Contracted TACV in deployment £1.89m +69% £1.12m -47% £2.11m
Contracted TACV – projects on hold £0.49m -30% £0.70m +159% £0.27m
Total Contracted TACV £11.34m +19% £9.51m +15% £8.27m
      
ARR2 £8.96m +17% £7.69m +31% £5.89m
      
Signed ACV in six month period £1.76m +23% £1.43m -15% £1.68m
ACV of contracts cancelled before deployment in last 12 months £0.12m  £0.20m  Not Calculated
      
AWS Platform Churn3 3.4%  6.7%  Not Calculated
AWS Platform Net Retention Rate4 120.4%  111.1%  Not Calculated
      
Headcount at end of period (excluding non-executive directors) 86  71  65
Ratio Personnel cost to normalised administrative expenses 73%  71%  73%

1TACV 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 ARR is the Annual Recurring Revenue of all the deployed contracts

3AWS platform churn is calculated using the ACV of lost deployed contracts in the last twelve months divided by the opening total value of deployed contracts at the start of the twelve month period

4 AWS platform net retention rate 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

 

Cashflow and liquidity

Cash as at the period end was £5.53 million (30 June 2021: £7.52 million) and finished the period ahead of the Directors’ expectations.

The Directors, on a monthly basis, receive standard reports relating to cash forecasts and future cash burn to ensure that the Group’s ambitious expansion plans can continue to be financed comfortably. The Group is currently debt free, having repaid its last borrowing in June 2021. The Directors would consider establishing a new debt facility, if required.

Capital expenditure

As required by IAS 38, we have capitalised a further £0.47 million (2020: £0.39 million) in software development expenditure as we continue to invest in our cloud platform and introduce new features and products.

The Group acquired £0.09 million of other intangible assets (2020: £0.08 million) and bought a negligible amount of new computer equipment in the period, mainly equipment for new starters. Being a cloud-based business, the Group has little demand for hardware.

Professional Services Fees

During the period the Group generated £0.63 million (2020: £0.79 million) of set-up and professional services sales value, in conjunction with the new ACV contracts reported above. Nearly all of these contracts are invoiced on signature and form part of the Group’s cash generation. The contract amounts will be deferred and released as recognised revenue to the Income Statement over the length of the related contract, in accordance with IFRS 15.

Trade receivables

Trade receivables grew to £3.00 million (30 June 2021: £2.15 million) reflecting the increased scale of the growing business.

 

 

William Good
Chief Financial Officer
1 March 2022

Consolidated statement of comprehensive income
for the six months ended 31 December 2021

 Six months ended 31 December
2021
Six months ended 31 December
2020
Twelve months ended 30 June
2021
 £’000 £’000  £’000
 (unaudited)  (unaudited)  (audited)
Revenue 5,472 3,190 7,362
Cost of sales (1,029) (869) (1,805)
Gross profit 4,443 2,321 5,557
Administrative expenses (5,543) (4,467) (9,518)
Loss from operating activities (1,100) (2,146) (3,961)
    
Adjusted loss from operating activities (707) (2,075) (3,846)
Expenses relating to share options (108 (71) (115)
Exceptional Items (285) - -
Loss from operating activities (1,100) (2,146) (3,961)
    
Bank charges and interest payable (22) (108) (230)
Interest receivable - - -
Loss before taxation (1,122) (2,254) (4,191)
Taxation - 153 154
Total comprehensive loss for the period (1,122) (2,101) (4,037)
  
Other comprehensive expense: items that will be classified subsequently to profit and loss   
Foreign exchange translation differences (422) 434 653
Total comprehensive loss for the period (1,544) (1,667) (3,384)
 
 
 
Loss per share expressed in pence
   
Basic and diluted (1.72)(3.54) (6.64)

Consolidated statement of financial position
as at 31 December 2021

  31 December 2021  31 December
2020
 30 June
2021
 £’000 £’000 £’000
 (unaudited)  (unaudited)  (audited)
Assets    
Non-current assets    
Plant & equipment 87 82 74
Intangible assets 2,516 2,296 2,366
Trade & other receivables 822 560 801
 Non-current assets 3,425 2,938 3,241
 
Current assets
   
Trade and other receivables 3,945 2,944 2,928
Cash and cash equivalents 5,528 4,228 7,518
 Current assets 9,473 7,172 10,446
 
Total assets
 
12,898
 
10,110
 
13,687
Liabilities    
Current liabilities    
Trade and other payables (1,625) (1,278) (1,664)
Deferred Income (7,165) (4,549) (6,153)
Other interest-bearing loans and borrowings - (1,156) -
 Current liabilities (8,790) (6,983) (7,817)
 
Non-current liabilities
   
Deferred Income (1,587) (1,814) (1,941)
Long term borrowings - (964) -
 Non-current liabilities (1,587)(2,778) (1,941)
 Total liabilities (10,377)(9,761) (9,758)
Net assets/(liabilities) 2,521 349 3,929
 
Shareholders’ equity
   
Share capital 656 595 655
Share premium 14,270 9,050 14,243
Other reserve 512 360 404
Currency reserve 44 247 466
Profit and loss account (12,961) (9,903) (11,839)
Total shareholders’ equity 2,521 349 3,929

 

Deferred income has been disclosed separately in these interim unaudited statements. This disclosure treatment differs from that in the audited accounts for the year ending 30 June 2021.

Consolidated interim statement of changes in equity
as at 31 December 2021 (unaudited)

 

 Share capitalShare premiumOther reserveProfit and loss accountCurrency reserveTotal shareholders’ equity
 £’000 £’000 £’000 £’000 £’000 £’000
Balance at 1 July 2020594 9,018 289 (7,802) (187) 1,912
Share based payment charge - - 71 - - 71
New shares issued net of costs 1 32 - - - 33
Dividend paid - - - - - -
Transactions with owners 1 32 71 - - 104
       
Foreign exchange translation differences - - - - 434 434
Loss for the period - - - (2,101) - (2,101)
Total comprehensive loss - - - (2,101) 434 (1,667)
       
Balance at 31 December 2020 595 9,050 360 (9,903) 247 349
       
Balance as at 1 January 2021 595 9,050 360 (9,903) 247 349
Share based payment charge - - 44 - - 44
New shares issued net of costs 60 5,193 - - - 5,253
Dividend paid - - - - - -
Transactions with owners 60 5,193 44 - - 5,297
       
Foreign exchange translation differences - - - - 219 219
Loss for the period - - - (1,936) - (1,936)
Total comprehensive loss - - - (1,936) 219 (1,717)
       
Balance at 30 June 2021 655 14,243 404 (11,839) 466 3,929
       
Balance at 1 July 2021 655 14,243 404 (11,839) 466 3,929
Share based payment charge - - 108 - - 108
New shares issued net of costs 1 27 - - - 28
Dividend paid - - - - - -
Transactions with owners 1 27 108 - - 136
       
Foreign exchange translation differences - - - - (422) (422)
Loss for the period - - - (1,122) - (1,122)
Total comprehensive loss - - - (1,122) (422) (1,544)
       
Balance at 31 December 2021 656 14,270 512 (12,961) 44 2,521

Consolidated statement of cash flows
for the six months ended 31 December 2021

 Six months ended 31 December
2021
Six months ended 31 December
2020
Twelve months ended 30 June
2021
 £’000 £’000 £’000
 (unaudited)  (unaudited)  (audited)
Cash flows from operating activities    
Loss after taxation (1,122) (2,101) (4,037)
Adjustments for:   
Depreciation of equipment and fixtures 36 35 69
Amortisation of intangible assets 42 40 76
Amortisation of capitalised development 374 271 595
Interest income - - -
Interest expense 6 98 206
Exchange differences (436) 433 676
Income taxes - (153) (154)
Share based payments 109 71 115
Increase in trade & other receivables (1,038) (793) (1,017)
Increase in trade &other payables 633 1,589 3,721
Cash (used in) / generated in operating activities (1,396) (510) 250
Dividend paid - - -
Income taxes received - 153 154
Interest paid (6) (98) (206)
Net cash (used in) / generated in operating activities (1,402) (455) 198
    
Cash flows from investing activities    
Purchase of property, plant and equipment (47) (13) (40)
Purchase of intangible assets (87) (75) -
Development expenditure capitalised (467) (394) (920)
Interest received - - -
Net cash used in investing activities (601) (482) (960)
 
Cash flows from financing activities
   
Proceeds from borrowings - 1,250 1,250
Repayment of borrowings - (403) (2,523)
Repayment of lease liabilities (15) (16) (33)
Issue of shares 28 33 5,608
Expenses related to issue of shares - (323)
Net cash generated in financing activities 13 864 3,979
Net (decrease)/increase in cash
 
(1,990) (73) 3,217
Cash and cash equivalents at the start of the period 7,518 4,301 4,301
Net (decrease)/increase in cash (1,990) (73) 3,217
Cash and cash equivalents at the end of the period 5,528 4,228 7,518