TIDMDSG
RNS Number : 8750N
Dillistone Group PLC
27 September 2019
Dillistone Group Plc
("Dillistone", the "Company" or the "Group")
Interim Results
The Board of Dillistone Group Plc, the AIM quoted supplier of
software for the international recruitment industry, is pleased to
announce its Interim Results for the six months ended 30 June
2019.
Key points of the unaudited interim report for the six months
ended 30 June 2019
-- Reorganisation progressing well
-- Recurring revenue of GBP3.5m (2018: GBP3.6m)
-- Recurring revenues represent 83% of total revenue (2018: 81%)
-- Both Dillistone Systems and Voyager Software divisions profitable
-- Reduced loss in https://www.GatedTalent.com division of
GBP(0.257m) (2018: loss of GBP0.315m) based on significant revenue
growth to GBP0.134m (2018: GBP0.014m). Division now approximately
at EBITDA breakeven (before Group charges) on a monthly basis.
-- Operating loss of GBP0.044m before acquisition and
reorganisation related items (2018 profit: GBP0.17m)
-- Group is cash generative at an operational level
-- Reorganisation costs incurred in period totalled GBP0.115m
-- Cash balances of GBP0.769m at 30 June 2019 (30 June 2018: GBP1.065m)
-- Bank loan of GBP0.5m received in June 2019 to finance reorganisation
Commenting on the results and prospects, Mike Love,
Non-Executive Chairman, said:
"The reorganisation and transfer of operations to Basingstoke is
progressing to plan and we are on track with delivering the
anticipated cost savings and improved efficiencies within the
business. We anticipate that our two largest divisions, Dillistone
Systems and Voyager Software, will both be profitable in 2019.
GatedTalent is now enjoying month on month revenue growth and while
- as expected - it will be loss making in the full year, we
anticipate that it will make a profit at EBITDA level (before Group
charges) in the fourth quarter. We are confident that the Group
will move back into sustained profitable trading with positive
cashflows next year. However, with the continuing uncertainty over
Brexit in the UK, and ongoing economic uncertainty in the wider
world, the Group does expect revenue to be down on its previous
expectations and this will result in a loss in the year to 31
December 2019."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
Enquiries:
Dillistone Group
Plc
Mike Love Chairman Via Walbrook PR
Jason Starr Chief Executive
Julie Pomeroy Finance Director
WH Ireland Limited (Nominated
adviser)
Managing Director - Corporate
Chris Fielding Finance & COO CIB 020 7220 1650
Walbrook PR
Tom Cooper /
Paul Vann 020 7933 8780
0797 122 1972
tom.cooper@walbrookpr.com
Notes to Editors:
Dillistone Group Plc (www.dillistonegroup.com) is a leader in
the supply and support of software and services to the recruitment
industry. It has five brands operating through three divisions:
Dillistone Systems, which targets the executive search industry
(www.dillistone.com); Voyager Software, which targets other
recruitment markets (www.voyagersoftware.com); and GatedTalent, the
next generation executive recruitment platform
(www.GatedTalent.com).
Dillistone has made three acquisitions: Voyager Software in
September 2011, FCP Internet in July 2013 and ISV Software in
September 2014. The Group operates under the FileFinder, Infinity,
Evolve, ISV and GatedTalent brands.
Dillistone was admitted to AIM, a market operated by the London
Stock Exchange plc, in June 2006. The Group employs over 100 people
globally with offices in Basingstoke, Eastleigh, Frankfurt, New
Jersey and Sydney.
Dillistone Group websites and publicly available resources
include:
Dillistone Systems: https://www.Dillistone.com
FileFinder:
https://www.dillistone.com/executive-search-software/
ISV Skills Testing: https://www.ISV.online
Introducing Voyager: https://www.Voyagersoftware.com
Voyager Business Intelligence:
https://www.voyagersoftware.com/recruitment-software-blog/introducing-new-voyager-business-intelligence.html
Voyager Infinity:
https://www.voyagersoftware.com/products/infinity-connected-recruitment-software.html
GatedTalent: https://www.GatedTalent.com
How CEOs are hired:
https://www.gatedtalent.com/insights/ceo-jobs-and-the-executive-career-strategy/
Advice for Executives:
https://www.gatedtalent.com/insights/executive-jobs-search-advice-from-executive-recruiters/
What is Executive Search:
https://www.gatedtalent.com/insights/what-is-executive-search/
What is Retained Executive Search?:
https://www.gatedtalent.com/insights/retained-executive-search-firm/
Executive job boards:
https://www.gatedtalent.com/insights/how-do-executives-find-jobs-not-on-executive-job-boards/
Advice for Executive Interviews:
https://www.gatedtalent.com/insights/executive-interview-questions-from-top-executive-search-firms-2019/
How to optimize your LinkedIn profile:
https://www.gatedtalent.com/insights/linkedin-profile-optimization-for-executives/
How do search firms find executives?
https://www.gatedtalent.com/insights/how-executive-search-firms-find-candidates/
LinkedIn Profile Optimization service:
https://www.gatedtalent.com/optimization-services/
The Executive Search Process:
https://www.gatedtalent.com/insights/what-is-the-retained-executive-search-process/
Headhunters, and why they won't get you a job:
https://www.gatedtalent.com/insights/headhunters-find-a-job/
Chairman's Statement
The Group reorganisation exercise announced in February is
progressing well with the expanded office space in Basingstoke
fully functional. Our London facility largely closed on 30 August,
and we will have exited the building prior to the year end, in line
with our plan. We are in the process of relocating our Eastleigh
offices and this will be completed in Q4.
We are now beginning to see the benefits of the reorganisation
with teams across the businesses being increasingly integrated. The
ability to leverage knowledge across the Group is helping to
accelerate performance and improve the quality of our services to
our clients. This is particularly noticeable in our product
development effort, which allows us to use skills developed for one
product to be more rapidly deployed into other products. We expect
to launch additional functionality for our Dillistone, Voyager and
GatedTalent divisions later this year, with a significant amount of
'cross team' effort having underpinned this work.
In the six months to June 2019 we have incurred GBP0.115m in
reorganisation costs, which include redundancy and severance
payments as well as duplicate running costs. These costs will
continue to be incurred with the closure of the office in London
and the final steps in the reorganisation being completed in the
second half of the year. We've previously stated that these costs
are likely to be in the region of GBP0.500m-GBP0.900m. Our current
expectations are that these costs are likely to be less than
GBP0.600m. The reorganisation is being funded through our own cash
resources and from a bank loan of GBP0.500m taken out in June 2019.
Starting in 2020, the reorganised business will allow us to deliver
improved results to our shareholders and improved services to our
clients.
Revenue amounted to GBP4.183m, down GBP0.267m (6%) of which
GBP0.130m related to the previously announced loss of a major
client in 2018. Recurring revenues represented 83% of revenues
(2018: 81%). Loss for the period was GBP(0.320m) (2018: GBP(0.173m)
and incorporated the loss in the GatedTalent division of GBP0.257m
(2018: loss of GBP0.315m). Orders in the 6 months to 30 June 2018
significantly benefited from the introduction of the GDPR in May
2018 and accordingly 2019 orders are down on the same period in
2018. However, orders are broadly in line with those in the second
half of 2018.
Divisional review
Dillistone Systems (https://www.dillistone.com) reported
revenues of GBP2.101m (2018: GBP2.122m). Divisional profits have
doubled to GBP0.200m (2018: GBP0.100m). The period has seen
development work focussed on enhancing the product such that it is
easier to deploy and with improved usability. The initial release
of these developments will commence later in the year.
Voyager Software (https://www.voyagersoftware.com) reported
revenues of GBP1.948m (2018: GBP2.314m) with recurring revenue down
GBP0.224m to GBP1.588m due mainly to the loss of the major legacy
contract in February 2018. The fall in revenue is also, in part,
due to a change in business model on the sale of one of the Voyager
products which has resulted in lower revenues but higher margins.
The overall effect of this change is essentially neutral in the
period. Divisional profits reduced to GBP0.139m (2018: GBP0.307m)
in the period.
GatedTalent's (https://www.gatedtalent.com ) revenue increased
significantly in the period rising to GBP0.134m (2018: GBP0.014m)
and continues to grow on a monthly basis. An increasing proportion
of revenue comes from sale of services to individuals rather than
to businesses. In the period, it made a loss of GBP(0.257m) (2018:
loss of GBP0.315m). While we anticipate continue healthy growth in
revenues, GatedTalent is nevertheless expected to be loss making in
2019.
Financial Performance
Revenue in the six months ended 30 June 2019 decreased by 6% to
GBP4.183m (2018: GBP4.450m). Recurring revenues decreased by 4% to
GBP3.469m over the comparable period last year (2018: GBP3.626m)
and represented 83% of total revenues (2018: 81%). Non-recurring
revenues were down at GBP0.549m (2018: GBP0.601m).
Cost of sales reduced by GBP0.153m in H1 2019 due to lower
third-party costs resulting from the change in business model of
two of the Voyager products and in part due to the loss of the
major contract in 2018. Excluding amortisation and depreciation,
administration expenses reduced by GBP0.195m in H1 2019, again in
part due to the lost contract and also through appropriate cost
savings. In addition, the impact of IFRS 16 was to reduce
administration costs in 2019 by GBP0.060m, while increasing
amortisation by GBP0.051m and interest cost by GBP0.017m. Excluding
acquisition related items, depreciation and amortisation increased
24% to GBP0.729m (2018: GBP0.587m) including the IFRS 16
adjustment. Administrative costs also include GBP0.198m (2018:
GBP0.235m) relating to the amortisation of acquisition intangibles
and reorganisation costs of GBP0.115m (2018: GBPnil). The loss for
the period before taxation increased to GBP0.397m (2018:
GBP0.234m).
There is a tax credit for the period of GBP0.077m (2018: credit
GBP0.061m). The 2018 and 2019 tax credits have benefited from
claims in the UK for research and development tax credits
reflecting the continuing development of our products.
Cash generated from operating activities was GBP0.225m (2018:
GBP0.617m). Total cash flows in the 6 months ended 30 June 2019
showed a net inflow of GBP0.063m (2018: outflow GBP0.318m). The
main elements of non-operating expenditure related to investment in
new product development of GBP0.615m (2018: GBP0.748m) and the net
receipt of GBP0.493m from the bank loan. At 30 June 2019, we had
cash reserves of GBP0.769m (2018: GBP1.065m) and GBP0.885m in
borrowings (2018: GBP0.401m).
In view of the short term cost associated with the restructuring
process, the Board has decided not to pay an interim dividend this
year.
Strategy
The Group is well down the path of streamlining our business, as
announced in 2019. However, we continue to invest in our future,
with significant new product functionality expected on our
FileFinder, Infinity and GatedTalent platforms in the coming
months.
Outlook
While we have some final steps still to complete, we are pleased
to report that the cost of our restructuring process is expected to
be at the lower end of expectations. Additionally, our anticipation
is that the level of running costs taken out of the business will
be as good if not better than we had previously hoped. We expect
both Dillistone Systems and Voyager Software to be profitable in
the full year, with GatedTalent reporting reduced losses on higher
revenue. However, with the continuing uncertainty over Brexit in
the UK, and ongoing economic uncertainty in the wider world, the
Group does expect revenue to be down on its previous expectations
and this will result in a loss in the year to 31 December 2019. In
the longer term, the reduced cost base of the Group, along with the
improved operating structure and our ongoing investment in product
development will deliver growth in the business.
Next year, we fully expect to trade profitably and to generate
cash.
Mike Love
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Note 6 Months ended Year ended
30 June 31 Dec
2019 2018 2018
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Revenue 4 4,183 4,450 8,692
Cost of sales (419) (572) (1,054)
---------- ---------- -----------
Gross profit 3,764 3,878 7,638
Administrative expenses (4,121) (4,096) (8,052)
---------- ---------- -----------
Result from operating activities 4 (357) (218) (414)
Analysed as:
Result from operating activities
before acquisition related
items (44) 17 55
Acquisition and reorganisation
related items 5 (313) (235) (469)
---------- ---------- -----------
Result after acquisition related
items (357) (218) (414)
----------------------------------------- ---------- ---------- -----------
Financial income - - 1
Financial cost (40) (16) (38)
---------- ---------- -----------
(Loss) before tax (397) (234) (451)
Tax income 6 77 61 191
---------- ---------- -----------
(Loss) for the period (320) (173) (260)
Other comprehensive income net
of tax:
Currency translation differences (26) (3) (30)
---------- ---------- -----------
Total comprehensive (loss)
for period net of tax (346) (176) (290)
---------- ---------- -----------
Earnings per share (pence)
Basic 8 (1.63) (0.88) (1.32)
Diluted (1.63) (0.88) (1.32)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June As at
2019 2018 31 Dec 2018
Unaudited Unaudited Audited
ASSETS GBP'000 GBP'000 GBP'000
Non-current assets
Goodwill 3,415 3,415 3,415
Intangible assets 4,542 4,728 4,754
Right of use assets 763 - -
Property plant & equipment 69 279 113
---------- ---------- ------------
8,789 8,422 8,282
Current assets
Inventories 2 3 3
Trade and other receivables 1,750 1,883 1,522
Cash and cash equivalents 769 1,065 725
---------- ---------- ------------
2,521 2,951 2,250
---------- ---------- ------------
Total assets 11,310 11,373 10,532
---------- ---------- ------------
EQUITY AND LIABILITIES
Equity
Share capital 983 983 983
Share premium 1,631 1,631 1,631
Merger reserve 365 365 365
Convertible loan reserve 14 14 14
Retained earnings 1,367 1,872 1,687
Share option reserve 112 99 106
Translation reserve 37 90 63
---------- ---------- ------------
Total equity 4,509 5,054 4,849
Liabilities
Non current liabilities
Trade and other payables 559 732 690
Lease liabilities 772 - -
Borrowings 645 388 390
Deferred tax 393 543 489
Current liabilities
Trade and other payables 4,265 4,886 4,370
Lease liabilities 39 - -
Borrowings 240 13 14
Current tax (receivable)/payable (112) (243) (270)
---------- ---------- ------------
Total liabilities 6,801 6,319 5,683
Total liabilities and equity 11,310 11,373 10,532
---------- ---------- ------------
The interim report was approved by the Board of directors and
authorised for issue on 26 September 2019. They were signed on its
behalf by:
JS Starr J P Pomeroy
CONSOLIDATED STATEMENT OF CASH FLOWS
As at 30 June
2019 2018 2018
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Operating Activities
(Loss) before tax (397) (234) (451)
Adjustment for
Financial income - - (1)
Financial cost 40 16 38
Depreciation and amortisation 918 822 1,714
Share option (gain)/expense 6 (2) 5
Other including foreign exchange adjustments
arising from operations (20) 4 70
Operating cash flows before movements
in working capital 547 606 1,375
(Decrease)/increase in receivables (234) (219) 171
Decrease in inventories 1 1 -
Increase/(decrease) in payables (229) 206 (471)
Add taxation repaid 140 23 65
Net cash generated from operating activities 225 617 1,140
---------- ----------- ---------
Investing Activities
Interest received - - 1
Purchases of property plant and equipment (7) (36) (55)
Proceeds from sale of assets 10 - -
Investment in development costs (615) (748) (1,481)
Contingent consideration paid - (146) (146)
---------- ----------- ---------
Net cash used in investing activities (612) (930) (1,681)
---------- ----------- ---------
Financing Activities
Finance cost (23) (5) (33)
Payment of lease obligations (20) - -
Bank Loan less repayments 493 - -
Dividends paid - - (98)
---------- ----------- ---------
Net cash generated from/(used in) financing
activities 450 (5) (131)
---------- ----------- ---------
Net change in cash and cash equivalents 63 (318) (672)
Cash and cash equivalents at beginning
of the period 725 1,390 1,390
Effect of foreign exchange rate changes (19) (7) 7
Cash and cash equivalents at end of
period 769 1,065 725
---------- ----------- ---------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Merger Retained Convertible Share Foreign Total
capital premium Reserve earnings loan reserve option exchange
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 31 December
2018 983 1,631 365 1,687 14 106 63 4,849
Comprehensive income
Loss for the 6
months ended 30
June 2019 - - - (320) - - - (320)
Other comprehensive -
income
Exchange differences
on translation
of overseas operations - - - - - - (26) (26)
Total comprehensive
(loss) - - - (320) - - (26) (346)
--------- --------- --------- --------- ------------- --------- --------- --------
Transactions with
owners
Share option charge - - - - - 6 - 6
Balance at 30 June
2019 983 1,631 365 1,367 14 112 37 4,509
--------- --------- --------- --------- ------------- --------- --------- --------
Balance at 31 December
2017 983 1,631 365 2,045 14 101 93 5,232
Comprehensive income
Loss for the 6
months ended 30
June 2018 - - - (173) - - - (173)
Other comprehensive -
income
Exchange differences
on translation
of overseas operations - - - - - - (3) (3)
Total comprehensive
(loss) - - - (173) - - (3) (176)
--------- --------- --------- --------- ------------- --------- --------- --------
Transactions with
owners
Share option charge - - - - - (2) - (2)
Balance at 30 June
2018 983 1,631 365 1,872 14 99 90 5,054
--------- --------- --------- --------- ------------- --------- --------- --------
NOTES TO THE INTERIM
NOTES TO THE UNAUDITED INTERIM REPORT
CONSOLIDATED STATEMENT OF
1. Basis of Preparation
The financial information for the six months ended 30 June 2019
included in this condensed interim report comprises the
consolidated statement of comprehensive income, the consolidated
statement of financial position, the consolidated statement of cash
flows, the consolidated statement of changes in equity and the
related notes.
The financial information in these interim results is that of
the holding company and all of its subsidiaries (the Group). It has
been prepared in accordance with the recognition and measurement
requirements of International Financial Reporting Standards as
adopted for use in the EU (IFRSs) but does not include all of the
disclosures that would be required under IFRSs. The accounting
policies applied by the Group in this financial information are the
same as those applied by the Group in its financial statements for
the year ended 31 December 2018 and are those which will form the
basis of the 2019 financial statements other than IFRS 16 which
came into force on 1 January 2019.
IFRS 16 requires the recognition of a right-of-use asset and
lease liability for all leases. The Group has adopted the standard
in full using the modified retrospective approach, whereby the
right-of-use asset is recognised at the date of initial application
(1 January 2019) and the lease liability is measured based on
remaining payments. There is no effect on prior year figures and no
need to re-state comparatives (refer to note 9 for further
details).
The comparative financial information presented herein for the
year ended 31 December 2018 does not constitute full statutory
accounts for that period. The Group's annual report and accounts
for the year ended 31 December 2018 have been delivered to the
Registrar of Companies. The Group's independent auditor's report on
those statutory accounts was unqualified, did not draw attention to
any matters by way of emphasis, and did not contain a statement
under 498(2) or 498(3) of the Companies Act 2006.
In preparing the interim financial statements the directors have
considered the Group's financial projections, borrowing facilities
and other relevant financial matters, and the board is satisfied
that there is a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable
future. For this reason, the directors continue to adopt the going
concern basis in preparing the financial statements.
Dillistone Group Plc is the Group's ultimate parent company. It
is a public listed company and is domiciled in the United Kingdom.
The address of its registered office and principal place of
business is 12 Cedarwood, Crockford Lane, Chineham Business Park,
Basingstoke, RG24 8WD. Dillistone Group Plc's shares are listed on
the Alternative Investment Market (AIM).
2. Share Based Payments
The Company operates two share option schemes. The fair value of
the options granted under these schemes is recognised as an
employee expense with a corresponding increase in equity. The fair
value is measured at grant date and spread over the period at the
end of which the option holder may exercise the option. The fair
value of the options granted is measured using the Black-Scholes
model.
3. Reconciliation of adjusted operating profits to consolidated
statement of comprehensive income
30 June 2019 and 30 June 2018
Adjusted Acquisition Adjusted Acquisition
operating and reorganisation operating and reorganisation
profits related profits related
items items
30-Jun-19 2019* 30-Jun-19 30-Jun-18 2018* 30-Jun-18
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 4,183 - 4,183 4,450 - 4,450
Cost of sales (419) - (419) (572) - (572)
Gross profit 3,764 - 3,764 3,878 - 3,878
Administrative
expenses (3,808) (313) (4,121) (3,861) (235) (4,096)
Results from
operating
activities (44) (313) (357) 17 (235) (218)
Financial income - - - - - -
Financial cost (38) (2) (40) (16) - (16)
Profit/(loss) before
tax (82) (315) (397) 1 (235) (234)
Tax expense/(income) 40 37 77 16 45 61
Profit/(loss) for
the year (42) (278) (320) 17 (190) (173)
Other comprehensive
income net of tax:
Currency translation
differences (26) - (26) (3) - (3)
Total comprehensive
income/ (loss) for
the year net of tax (68) (278) (346) 14 (190) (176)
----------- ------------------- ---------- ----------- -------------------- ----------
Earnings per share - from continuing activities
Basic (0.21)p (1.63)p 0.09p (0.88)p
Diluted (0.21)p (1.63)p 0.09p (0.88)p
* see accounts note 5
31 December 2018
Adjusted Acquisition
operating and reorganisation
profits related
items
31 December 2018* 31 December
2018 2018
GBP'000 GBP'000 GBP'000
Revenue 8,692 - 8,692
Cost of sales (1,054) - (1,054)
------------ -------------------- ------------
Gross profit 7,638 - 7,638
Administrative expenses (7,583) (469) (8,052)
Results from operating activities 55 (469) (414)
Financial income 1 - 1
Financial cost (38) - (38)
Profit/(loss) before tax 18 (469) (451)
Tax income 102 89 191
Profit for the year 120 (380) (260)
Other comprehensive income
net of tax:
Currency translation differences (30) - (30)
Total comprehensive income/(loss)
for the year net of tax 90 (380) (290)
============ ==================== ==============
Earnings per share - from continuing activities
Basic 0.61p (1.32)p
Diluted 0.61p (1.32)p
* see accounts note 5
4. Segment reporting
Year ended
6 months ended 30 June 31 Dec
2019 2018 2018
GBP'000 GBP'000 GBP'000
Revenue
Dillistone Systems 2,101 2,122 4,195
GatedTalent 134 14 68
Voyager Software 1,948 2,314 4,429
Total revenue 4,183 4,450 8,692
----------------------- -------- -----------
Results by division
Year ended
6 months ended 30 June 31 Dec
2019 2018 2018
GBP'000 GBP'000 GBP'000
Results from operating activities
Dillistone Systems 200 100 79
GatedTalent (257) (315) (612)
Voyager Software 139 307 528
----------------------- -------- -----------
82 92 (5)
Central (126) (75) 60
Amortisation of acquisition
intangibles and reorganisation
costs (313) (235) (469)
Result from operating
activities (357) (218) (414)
======================= ======== ===========
Geographical segments
The following table provides an analysis of the Group's revenues
by geographical market.
Year ended
6 months ended 30 June 31 Dec
2019 2018 2018
GBP'000 GBP'000 GBP'000
UK 2,888 3,189 6,188
Europe 480 518 1,007
US 624 562 1,118
Australia 191 181 379
4,183 4,450 8,692
======================= ======== ===========
Business Segment
The following table provides an analysis of the Group's revenues
by products and services.
Year ended
6 months ended 30 June 31 Dec
2019 2018 2018
GBP'000 GBP'000 GBP'000
Recurring 3,469 3,626 7,154
Non recurring 549 601 1,169
Third party revenues 165 223 369
4,183 4,450 8,692
======================= ======== ===========
'Recurring income' represents all income recognised over time,
whereas 'Non-recurring income' represents all income recognised
at a point in time. Recurring income includes all support services,
software as a service income (SaaS) and hosting income. Non-recurring
income includes sales of new licenses, and income derived from
installing those licenses including training, installation, and
data translation. Third party revenues arise from the sale of
third party software.
5. Acquisition related items and reorganisation costs
Year ended
6 months ended 30 June 31 Dec
2019 2018 2018
GBP'000 GBP'000 GBP'000
Reorganisation costs 115 - -
Amortisation of acquisition
intangibles 198 235 469
313 235 469
Interest on bank loan to
finance reorganisation 2 - -
Total 315 235 469
============ =========== ===========
6. Tax
Year ended
6 months ended 30 June 31 Dec
2019 2018 2018
GBP'000 GBP'000 GBP'000
Current tax 18 (96) (165)
Prior year adjustment - current
tax - - (7)
Deferred tax charge/(release) (58) 80 64
Prior year adjustment - deferred
tax - - 6
Deferred tax re acquisition
intangibles (37) (45) (89)
Tax (income) for the period (77) (61) (191)
============ =========== ===========
The tax charge is impacted by the higher rates of corporation
tax payable in the US and Australia offset by the R&D tax
credits available to both Dillistone Systems and Voyager Software
and GatedTalent Limited. Deferred tax has been provided at rates
between 19% and 17%.
7. Dividends
In view of its continuing investment in GatedTalent, the Board
has decided not to pay an interim dividend (2018: nil per
share).
8. Earnings per Share
Year ended
6 months ended 30 June 31 Dec
2019 2018 2018
Basic earnings per share
(Loss) attributable to ordinary
shareholders GBP(320,000) GBP(173,000) GBP(260,000)
Weighted average number of
shares 19,668,021 19,668,021 19,668,021
Basic (loss) per share (pence) (1.63) (0.88) (1.32)
============= ============= =============
Diluted earnings per share
(Loss) attributable to ordinary GBP(320,000) GBP(173,000) GBP(260,000)
shareholders
Diluted weighted average number
of shares 19,668,021 19,668,021 19,668,021
Diluted (loss) per share (pence) (1.63) (0.88) (1.32)
============= ============= =============
9. Effect of IFRS 16
The Group adopted IFRS16 "Leases" with effect from 1 January
2019. For relevant transactions this has resulted in the group
recognising right-of-use assets and lease liabilities in the
statement of financial position, and finance costs and depreciation
in the statement of comprehensive income. Leases classified as
operating leases under previous accounting requirements did not
require recognition of related assets or liabilities. Instead the
lease payments were recognised in the statement of comprehensive
income on a straight-line basis over the lease term.
The Group has applied the modified retrospective approach method
with recognition of transitional adjustments on the date of initial
application, being 1 January 2019, without restatement of
comparative figures. In addition, IFRS 16 allows for a practical
expedient not to recognise right-of-use assets and liabilities for
leases with less than 12 months of lease term remaining as of the
date of initial application, which the Group has applied.
On adoption of IFRS 16, the Group recognised right-of-use assets
and lease liabilities in relation to leases of office space. The
right-of-use assets were recognised by reference to the measurement
of the lease liability on that date. Lease liabilities were
measured at the present value of the remaining lease payments,
including estimates for items such as dilapidation cost obligations
under the lease, discounted using the Group's incremental borrowing
rate (being the rate at which a similar borrowing could be obtained
from an independent creditor under comparable terms and
conditions). The rate applied was 5%. Right-of-use assets are
amortised on a straight-line basis.
The effects of adopting IFRS 16 for the periods ending 30 June
2019 are as follows:
Impact on the Consolidated Interim Statement of Comprehensive
Income:
As IFRS16 Amounts without
(Unaudited) reported adjustments adoption
of IFRS16
GBP000 GBP000 GBP000
--------- ------------ ----------------
Revenue 4,183 - 4,183
Cost of sales (419) - (419)
------------------------------ --------- ------------ ----------------
Gross profit 3,764 - 3,764
Administrative expenses (4,121) (9) (4,130)
------------------------------ --------- ------------ ----------------
Profit from operations (357) (9) (366)
Finance expense (40) 17 (23)
------------------------------ --------- ------------ ----------------
Profit before tax (397) 8 (389)
Tax income 77 - 77
------------------------------ --------- ------------ ----------------
Total comprehensive income
for the year (320) 8 (312)
------------------------------ --------- ------------ ----------------
Earnings per ordinary share:
------------------------------ --------- ------------ ----------------
Basic (1.63)p - (1.59)p
------------------------------ --------- ------------ ----------------
Diluted (1.63)p - (1.59)p
------------------------------ --------- ------------ ----------------
Impact on the Consolidated Interim Statement
of Financial Position:
As reported IFRS16 Amounts without
adoption of
IFRS16
(Unaudited) adjustments
GBP'000 GBP'000 GBP'000
------------ ------------ ----------------
Non-current assets
Goodwill 3,415 - 3,415
Other intangible
assets 4,542 - 4,542
Property, plant and
equipment 69 - 69
Right-of-use assets 763 (763) -
8,789 (763) 8,026
Current assets
Inventories 2 - 2
Trade and other receivables 1,750 - 1,750
Cash and cash equivalents 769 - 769
------------------------------ ------------ ----------------
Total current assets 2,521 - 2,521
------------ ------------ ----------------
Total assets 11,310 (763) 10,547
------------------------------ ------------ ------------ ----------------
Liabilities
Current
Trade and other payables (4,265) (40) (4,305)
Lease liabilities (39) 39 -
Corporation tax 112 - 112
Current borrowings (240) - (240)
------------------------------ ------------ ------------ ----------------
Total current liabilities (4,432) (1) (4,433)
Non-current liabilities
Trade and other payables (559) - (559)
Lease liabilities (772) 772 -
Borrowings (645) - (645)
Deferred tax liabilities (393) - (393)
------------------------------ ------------ ------------ ----------------
Net assets 4,509 8 4,517
------------------------------ ------------ ------------ ----------------
Equity
Share capital 983 - 983
Share premium 1,631 - 1,631
Merger reserve 365 - 365
Convertible loan
reserve 14 - 14
Retained earnings 1,367 8 1,375
Share option reserve 112 - 112
Translation reserve 37 - 37
----------------
Total equity 4,509 8 4,517
------------------------------ ------------ ------------ ----------------
Impact on the Consolidated Interim Statement
of Cash Flows:
Unaudited As reported IFRS16 Amounts without
adjustments adoption
of IFRS16
GBP'000 GBP'000 GBP'000
Operating Activities
(Loss) before tax (397) 8 (389)
Adjustment for
Financial cost 40 (17) 23
Depreciation and amortisation 918 (51) 867
Share option (gain)/expense 6 - 6
Other including foreign exchange
adjustments arising from operations (20) - (20)
Operating cash flows before movements
in working capital 547 (60) 487
(Decrease) in receivables (234) - (234)
Decrease in inventories 1 - 1
Increase/(decrease) in payables (231) 40 (191)
Add taxation repaid 140 - 140
Net cash generated from operating
activities 223 (20) 203
------------ ---------------- ----------------
Investing Activities
Purchases of property plant and
equipment (7) - (7)
Proceeds from sale of assets 10 - 10
Investment in development costs (615) - (615)
Contingent consideration paid - - -
------------ ---------------- ----------------
Net cash used in investing activities (612) - (612)
------------ ---------------- ----------------
Financing Activities
Finance cost (23) - (23)
lease payments (20) 20 -
Bank Loan less repayments 495 - 495
Net cash used by financing activities 452 20 472
------------ ---------------- ----------------
Net change in cash and cash equivalents 63 - 63
------------ ---------------- ----------------
10. Related party transactions
The Company has a related party relationship with its
subsidiaries, its directors, and other employees of the Company
with management responsibility. There were no transactions with
these parties during the period outside the usual course of
business.
The Directors and certain key management participated in the
issue of convertible loan notes in 2017 which carry interest at
8.15% per annum payable quarterly in arrears.
There were no transactions with any other related parties.
11. Cautionary statement
This Interim Report has been prepared solely to provide
additional information to shareholders to assess the Company's
strategies and the potential for these strategies to succeed. The
Interim Report should not be relied on by any other party or for
any other purpose. The Interim Report contains certain
forward-looking statements with respect to the financial condition,
results of operations and businesses of the Company. These
statements are made in good faith based on the information
available to them up to the time of their approval of this report.
However, such statements should be treated with caution as they
involve risk and uncertainty because they relate to events and
depend upon circumstances that will occur in the future. There are
a number of factors that could cause actual results or developments
to differ materially from those expressed or implied by these
forward-looking statements. The continuing uncertainty in global
economic outlook inevitably increases the economic and business
risks to which the Company is exposed. Nothing in this announcement
should be construed as a profit forecast.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR BIGDCSDDBGCL
(END) Dow Jones Newswires
September 27, 2019 02:00 ET (06:00 GMT)
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