TIDMBIG
RNS Number : 5109U
Big Technologies PLC
29 March 2023
Big Technologies plc
("the Company" or "the Group")
Preliminary announcement of the Group's audited results for the
year ended 31 December 2022
" Continuing to deliver market-leading innovation"
Big Technologies plc (AIM: BIG), the leading, integrated
technology platform for the remote monitoring of individuals, is
pleased to announce its preliminary audited results for the year
ended 31 December 2022.
GBPm (unless otherwise stated) 2022 2021
Revenue 50.2 37.6
Gross margin (%) 72.5% 70.8%
Statutory operating profit 20.6 13.8
Adjusted operating profit* 27.1 17.9
Adjusted EBITDA* 30.5 20.6
Adjusted EBITDA* margin (%) 60.7% 54.7%
Cash generated from operating
activities 25.7 16.0
Net cash 66.8 48.0
------------------------------------- ------- ------
Pence Pence
Adjusted diluted earnings per
share* 8.1p 5.5p
Adjusted basic earnings per
share* 8.6p 5.6p
Statutory diluted earnings per
share 6.5p 4.4p
Statutory basic earnings per
share 6.9p 4.5p
*Before adjusting items and share-based payments
Financial performance
-- Revenue increased by 33% in 2022 versus 2021 driven by new
contract wins and an increase in revenues earned from existing
customers;
-- Gross margins increased by 170bps to 72.5% in 2022 as a
result of the significant revenue growth and the Group's scalable
operating model which allows for increased efficiencies;
-- Adjusted EBITDA of GBP30.5 million in 2022 with adjusted EBITDA margin increasing to 60.7%;
-- Cash generated from operating activities of GBP25.7 million,
generated from the strong trading performance during the year. The
Group has a significant net cash balance of GBP66.8 million at 31
December 2022 underpinning a very strong balance sheet. Net cash is
stated after deducting GBP0.7 million of lease liabilities.
Operational and strategic performance
-- The Group manufactured a record number of new electronic
monitoring devices during the year and deployed these devices to
customers across the world, increasing the Group's international
footprint;
-- Successful implementation of new contracts has resulted in
growth in the Asia-Pacific and Americas regions;
-- Investment in new state-of-the-art premises, providing
increased UK manufacturing capacity to meet current and future
demand for the Group's market-leading hardware products;
-- A range of product line extensions successfully introduced to new and existing customers.
Current trading and outlook
-- The Group has started the new financial year well and trading
is in line with the Board's expectations;
-- The Group remains positioned with the financial resources in
place to provide the financial flexibility required to continue to
invest in the business and to take advantage of the value-enhancing
opportunities that are expected to materialise in the coming
years;
-- The Board is confident of continued growth and strong cash generation for the year ahead.
Commenting on the results, Sara Murray OBE, Chief Executive
Officer said:
"I am very pleased that the Group has delivered another year of
significant growth against a challenging global macroeconomic
backdrop, which includes the ongoing impacts of inflation and
supply chain constraints. We have seen growing demand for our
technology products and services, which translated into new
contract wins and deployment of a record number of new electronic
monitoring devices to customers in the criminal justice sector. The
successful implementation of a significant national monitoring
contract in New Zealand received positive feedback from the end
customer and diversified our global footprint, enhancing our strong
reputation. Market drivers remain strong and we are confident of
maintaining momentum and delivering further growth in 2023 and
beyond."
For further information please contact:
Big Technologies +44 (0) 1923 601910
Sara Murray (Chief Executive Officer)
Daren Morris (Chief Financial Officer)
Zeus (Nominated Adviser and Sole Broker) +44 (0) 2038 295000
Jamie Peel / Dan Bate / Kieran Russell
(Investment Banking)
Benjamin Robertson (Equity Capital Markets)
The person responsible for arranging the release of this
information is Daren Morris, Chief Financial Officer and Company
Secretary.
CEO's review
Overview
I am pleased to report that the business has delivered another
year of significant growth, continuing to build on momentum from
the first half of the year, with full year results above market
expectations for 2022. The performance for the year was very
positive across both halves with a stronger second half reflecting
the now fully operational national monitoring contract with the New
Zealand Department of Corrections. Despite a backdrop of
challenging global macroeconomic conditions, we have seen growing
demand for our technology products and services, with new contract
wins and increases in the number of electronic monitoring devices
deployed with existing customers. We were able to manage supply
chain disruptions through careful long-term planning and by making
additional investments in long lead-time inventory to ensure we can
continue to support both new and existing customers in 2023.
Financial performance
The Group delivered significant double-digit organic revenue
growth in the year of 33%, to GBP50.2m (2021: GBP37.6m). The second
half of the year was particularly strong with revenue of GBP27.3m
(H1 2022: GBP22.9m), reflecting the contribution of new customer
wins, including the significant national monitoring contract in New
Zealand, which is now fully operational and delivering revenue at
its full run-rate. The growth in overall revenue was delivered by
revenue growth from customers in the criminal justice sector, in
particular the Asia-Pacific and Americas regions, whereas revenues
in the remote care sector were broadly flat in the year.
Despite some inflationary pressures in the second half of the
year, gross margins increased by 170 bps to 72.5% (2021: 70.8%) as
a result of the significant revenue growth and our scalable
business model, which allows for the deployment of additional
electronic monitoring devices to customers with increased
efficiency.
Adjusted EBITDA increased by 48% to GBP30.5m (2021: GBP20.6m)
with Adjusted EBITDA margin improving by 600bps to 60.7% (2021:
54.7%).
The Group generated GBP25.7m in cash from operations, with the
net cash position at year end of GBP66.8m underpinning a very
strong balance sheet.
The Group is well capitalised and set to take advantage of all
value-enhancing opportunities for growth that we expect to
materialise in the years ahead. We continue to look for
value-enhancing opportunities to expand our access to new customers
and markets.
Operations and product development
During 2022, we continued to increase our international
footprint and global presence in the criminal justice sector
through new contract wins and an increase in revenues earned from
existing customers. To support this growth, we manufactured a
record number of new electronic monitoring devices in the year and
deployed these devices to customers across the world.
With significant growth opportunities ahead, it is important
that we invest now to ensure we have sufficient manufacturing
capacity in place to meet increasing demands for our products.
During the year we invested in new state-of-the-art premises in
Norwich, which provides us with the facilities we need to meet
current and future global demands for our market-leading
technologies.
We are committed to ensuring that our products maintain their
competitive advantage in the criminal justice sector and continue
to invest in research and development to support our future product
roadmap. This roadmap includes the development of substance
detection technologies, as well as further location solutions, to
provide an integrated monitoring offering for our customers and
future customers. Initial feedback from customers on these new
solutions is positive.
Sector review
The Group has seen revenue growth in all geographic territories,
with notable growth in the Asia-Pacific region, in particular New
Zealand. Our strategic focus continues to be the criminal justice
sector, which accounts for the majority of our revenues. During the
year, we secured new customers and completed the successful
implementation of a significant national monitoring contract in New
Zealand. We received positive feedback from the customer in New
Zealand on our partnership approach, and the customer is on track
to generate significant cost savings as a result of the
introduction of the Group's technology in the country.
Summary and outlook
Our market drivers for continued growth in both the criminal
justice and remote care sectors remain strong and the Group has
started the new financial year well. The Board is confident of
continued growth and strong cash generation during 2023 and beyond.
I want to thank all our employees, customers and suppliers for
their continuing support. We are excited about the opportunities
lying ahead and look forward to the future with confidence and
pride, as we continue to develop our technologies to make societies
safer.
Financial review
Revenue
Revenue increased by 33% to GBP50.2m (2021: GBP37.6m) on an
organic basis, driven by new contract wins and an increase in
revenues earned from existing customers. The second half of the
year was particularly strong with revenue of GBP27.3m (H1 2022:
GBP22.9m). The majority of revenues continue to be derived from
customers in the criminal justice sector, which accounts for more
than 98% of reported revenue (2021: 98%).
Revenue growth was driven by the Asia-Pacific and the Americas
regions, which grew at 60% and 11% respectively. The Group's
eight-year national monitoring contract with the New Zealand
Department of Corrections, signed in 2021, started to deliver
revenue in the first quarter of the year and is now achieving its
full run-rate. The Group has received positive feedback from the
customer on its partnership approach and the customer is on track
to generate significant cost savings as a result of the
introduction of the Group's technology in the country. There were
also new contract wins in the Americas region.
The Group benefitted from favourable foreign currency movements
in the year with the US dollar and Australian dollar strengthening
against sterling compared with the prior year . On a constant
currency basis, revenue increased by 30% versus last year.
Monthly Recurring Revenue (MRR), which is the exit run rate of
monthly recurring revenue in the last month of the financial year,
was GBP4.6m (2021: GBP3.2m), an increase of 44%. The MRR figure
gives the Group visibility over its future revenues derived from
its long-term contracts.
Profitability
Gross profit increased by 36% to GBP36.4m (2021: GBP26.7m), with
gross margins increasing by 170 bps to 72.5% (2021: 70.8%) as a
result of the significant revenue growth and the Group's scalable
operating model, which allows for the deployment of additional
electronic monitoring devices to customers with increased
efficiency. Profits earned on incremental revenues were able to
offset increases in labour, freight and manufacturing costs caused
by the high inflationary environment.
EBITDA
Adjusted EBITDA, which provides a more consistent comparison of
trading, year-on-year, increased by 48% to GBP30.5m (2021:
GBP20.6m), with adjusted EBITDA margins increasing by 600 bps to
60.7% (2021: 54.7%). The increase in adjusted EBITDA margin was
principally driven by the Group's ability to grow revenues
organically without significant increases to adjusted
administrative expenses. The Group also benefitted from favourable
foreign currency movements in the year and recorded a one-off gain
from the conversion of US dollar denominated cash balances to
sterling in the first half of the year.
Statutory EBITDA increased at a slower rate of 44% to GBP24.4m
(2021: GBP16.9m) mainly as a result of the increased share-based
payments expense in the year, partly offset by a reduction to
exceptional costs related to the 2021 IPO which did not repeat in
2022.
Operational and pre-tax profits
Adjusted operating profit of GBP27.1m increased 51% against
2021, with an increase in adjusted operating margin to 54.1% (2021:
47.7%). Statutory operating profit and statutory administrative
expenses were GBP20.6m and GBP15.8m respectively (2021: GBP13.8m
and GBP12.9m respectively). Statutory measures include adjusting
operating items and share-based payments.
Finance income was GBP0.4m (2021: GBPnil) and reflects the
interest earned by the Group on its significant cash balances held
in interest bearing deposit accounts. Finance expenses were broadly
flat in the year.
Taxation
The Group's total tax charge for the year (including deferred
taxes) was GBP1.0m (2021: GBP0.9m), an effective tax rate of 4.9%
(2021: 6.8%). The Group's tax and the effective tax rate is
affected by a number of factors including the recognition of
deferred tax assets in relation to share-based payments and the tax
deductibility of exercised employee share awards. The Group also
benefits from temporarily enhanced capital allowances, allowances
for R&D expenditure and the UK Patent Box. The effective tax
rate is lower than the current UK corporation tax rate, but is
expected to increase in future years. Deferred taxes credited
directly in equity totalled GBP1.6m (2021: GBPnil).
Earnings per share
Adjusted diluted earnings per share (EPS), which excludes
adjusting items and their associated tax effect as well as the
dilutive impact of shares issuable in the future, was 8.1p (2021:
5.5p), reflecting the underlying profitability of the Group.
Adjusted basic EPS, which excludes adjusting items and their
associated tax effect was 8.6p (2021: 5.6p). Diluted EPS, which
includes the dilutive impact of shares issuable in the future, was
6.5p (2021: 4.4p). Basic EPS was 6.9p (2021: 4.5p). The dilutive
impact of shares issuable in the future relates to the expected
settlement of the Group's employee share scheme obligations.
Cash generation
The Group increased its net cash balances (defined as cash and
cash equivalents less lease liabilities) to GBP66.8m (2021:
GBP48.0m) at 31 December 2022. The Group generated GBP25.7m (2021:
GBP16.0m) in cash from operations (before paying tax) including a
GBP5.1m (2021: GBP2.3m) net working capital outflow; the cash
conversion rate (defined as percentage of adjusted EBITDA converted
to cash from operations) increased from 77.6% to 84.4% of adjusted
EBITDA. Taxation payments for the year totalled GBP1.8m (2021:
GBP1.9m).
Net cash utilised in investing activities of GBP5.1m (2021:
GBP2.9m) reflects the continued increase in the number of
electronic monitoring devices, which are manufactured in-house and
leased to the Group's customers. The Group continued to invest in
research and development activities and also benefitted from
increased interest income, reflecting interest earned on its cash
balances.
Net cash generated from financing activities of GBP0.3m (2021:
GBP19.3m) reflects the proceeds received from the exercise of
employee share options in the year, offset by the repayment of
lease liabilities. In 2021, the cash generated from financing
activities included funds raised from the Group's IPO in the
year.
Research and development
Research and development activities remain a priority for the
Group to ensure continued innovation and product development.
Development costs of GBP1.1m (2021: GBP1.0m) have been capitalised.
Other research and development costs, all of which have been
expensed to the income statement as incurred, totalled GBP1.8m
(2021: GBP1.8m).
Foreign currency exposure
The Group faces currency exposure on its foreign currency
transactions and translation exposure in relation to its overseas
subsidiaries and foreign currency sales. The Group maintains a
natural hedge whenever possible to transactional exposure by
matching the cash inflows and outflows in the respective
currencies.
Foreign exchange translation has provided a tailwind for revenue
and profit during the year, with the US dollar and Australian
dollar strengthening against sterling compared with the comparative
year. The Group also held a significant cash balance in US dollars
at 31 December 2021, which has subsequently been exchanged to
sterling at favourable exchange rates during the year.
The Group's most material exposures are to US dollars,
Australian dollars and New Zealand dollars.
The sensitivity to a 10% weakening/strengthening of sterling
against these currencies in aggregate (excluding amounts held on
the balance sheet) equates to an annualised profit increase (or
decrease) of approximately GBP2.4m. The Group's forward currency
exposure is currently unhedged.
Alternative performance measures
In the analysis of the Group's financial performance and
position, operating results and cash flows, alternative performance
measures are presented to provide readers with additional
information. The principal measures presented are adjusted measures
of earnings including adjusted operating profit, adjusted operating
margin, adjusted profit before tax, adjusted EBITDA and adjusted
earnings per share.
The Annual Report includes both statutory and adjusted non-GAAP
financial measures, the latter of which the Directors believe
better reflect the underlying performance of the business and
provide a more meaningful comparison of how the business is managed
and measured on a day-to-day basis. The Group's alternative
performance measures and KPIs are aligned to the Group's strategy
and together are used to measure the performance of the business
and form the basis of the performance measures for remuneration.
Adjusted results exclude certain items because, if included, these
items could distort the understanding of the performance for the
year and the comparability between periods.
We provide comparatives alongside all current year figures. The
term 'adjusted' is not defined under IFRS and may not be comparable
with similarly titled measures used by other companies. All profit
and earnings per share figures in this Annual Report relate to
underlying business performance (as defined above) unless otherwise
stated.
A reconciliation of adjusted measures to statutory measures is
provided below:
2022 2021
Statutory Adjustments Adjusted Statutory Adjustments Adjusted
----------------------------- ---------- ------------ --------- ---------- ------------ ---------
Operating profit (GBP'000) 20,590 6,524 27,114 13,774 4,159 17,933
Operating margin (%) 41.0 13.1 54.1 36.6 11.1 47.7
Administrative expenses
(GBP'000) 15,800 (6,524) 9,276 12,884 (4,159) 8,725
Profit before tax (GBP'000) 20,995 6,524 27,519 13,722 4,159 17,881
Taxation (GBP'000) 1,033 1,641 2,674 934 1,050 1,984
Profit after tax (GBP'000) 19,962 4,883 24,845 12,788 3,109 15,897
EBITDA (GBP'000) 24,409 6,056 30,465 16,876 3,691 20,567
EBITDA margin (%) 48.6 12.1 60.7 44.8 9.9 54.7
Cash generated from
operating activities
(GBP'000) 25,725 - 25,725 15,964 2,268 18,232
Basic earnings per
share (pence) 6.9 1.7 8.6 4.5 1.1 5.6
Diluted earnings per
share (pence) 6.5 1.6 8.1 4.4 1.1 5.5
----------------------------- ---------- ------------ --------- ---------- ------------ ---------
The adjustments comprise:
2022 2021
GBP'000 GBP'000
----------------------------------------------- -------- --------
Amortisation of acquired intangibles 468 468
IPO preparation costs - 1,192
National insurance on warrant exercise - 1,076
----------------------------------------------- -------- --------
Total adjusting operating items 468 2,736
Share-based payments expense 6,056 1,423
----------------------------------------------- -------- --------
Total adjusting items and share-based payments
before tax 6,524 4,159
----------------------------------------------- -------- --------
Tax effect of adjusting items and share-based
payments (1,641) (1,050)
----------------------------------------------- -------- --------
Total adjusting items and share-based payments
after tax 4,883 3,109
----------------------------------------------- -------- --------
Amortisation of acquired intangibles
These costs are excluded from the adjusted results of the Group
since the costs are non-cash charges arising from investment
activities. As such, they are not considered reflective of the core
trading performance of the Group.
IPO preparation costs
Attributable costs relating to the IPO in 2021 have been
recognised within the consolidated statement of comprehensive
income as an exceptional cost. These costs are excluded from the
adjusted results of the Group since the costs are one-off in nature
and will not repeat in future years.
National insurance on warrant exercise
Warrants were exercised in respect of 5,858,500 shares by the
Chief Executive Officer immediately prior to the IPO in 2021. The
acquisition of shares under the warrant was deemed to be within the
Employment Related Securities rules and, therefore, a charge has
been recognised in respect of employer's national insurance.
Share-based payments expense
These costs are excluded from the adjusted results of the Group
since the costs are non-cash charges arising from recognition of
the fair value of share options and other share-based incentives
granted to employees of the Group. As such, they are not considered
reflective of the core trading performance of the Group.
Tax effect of adjusting items and share-based payments
The tax impact of these adjustments was as follows: amortisation
of acquired intangibles of GBP0.1m (2021: GBP0.1m) and share-based
payments expense of GBP1.6m (2021: GBP1.0m).
Balance sheet highlights
The Group has continued to strengthen its balance sheet during
the year with net assets increasing from GBP74.2m to GBP102.5m at
the 31 December 2022. Current assets increased by GBP25.5m to
GBP83.5m, mainly due to a GBP19.2m increase in cash and cash
equivalents driven by the strong underlying trading performance in
the year. Trade and other receivables increased by GBP2.6m, which
was linked to revenue growth during the year, with debtor days
remaining stable at circa 50 days (calculated using annualised
December revenue). Inventories increased by GBP3.7m as the Group
invested in certain long lead-time inventory and components to
protect against supply chain disruption and to support capital
expenditure requirements for 2023.
Non-current assets increased by GBP4.5m to GBP29.7m, mainly due
to increases in property, plant and equipment and deferred tax
assets. Property, plant and equipment increased by GBP1.9m, which
was due to an increase in electronic monitoring devices with
customers to support revenue growth in the year, offset by
depreciation. Deferred tax assets increased by GBP2.7m, due to the
recognition of balances related to the share-based payment
arrangements through the income statement and directly in
equity.
Current liabilities increased by GBP2.1m to GBP9.2m, mainly due
to an increase in other payables, other taxation and provisions.
Non-current liabilities decreased by GBP0.3m to GBP1.5m, mainly due
to a decrease in contract liabilities.
Financial outlook
The Group is well positioned with the financial resources in
place to provide the financial flexibility required to continue to
invest in the business and to take advantage of the value-enhancing
opportunities that are expected to materialise in the coming
years.
Directors' Responsibility Statement on the Annual Report and
Accounts
The responsibility statement below has been prepared in
connection with the Group's full annual report and accounts for the
year ended 31 December 2022. Certain parts thereof are not included
within this preliminary announcement.
The Directors are responsible for preparing the Strategic
Report, the Directors' Report, any other surrounding information
and the Group and Parent Company financial statements in accordance
with applicable law and regulations. Company law requires the
Directors to prepare Group and Parent Company financial statements
for each financial year. Under that law, they have elected to
prepare the Group financial statements in accordance with UK
adopted International Accounting Standards and applicable law and
have elected to prepare the Parent Company financial statements in
accordance with UK Accounting Standards and applicable law (UK
Generally Accepted Accounting Practice). Under Company law, the
Directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of
affairs of the Group and Parent Company and of their profit or loss
for that year. In preparing each of the Group and Parent Company
financial statements, the Directors are required to:
-- select suitable accounting policies and apply them consistently;
-- make judgements and accounting estimates that are reasonable and prudent;
-- state whether applicable accounting standards have been
followed, subject to any material departures disclosed and
explained in the financial statements; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and the Parent
Company will continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Parent
Company's transactions and disclose with reasonable accuracy at any
time the financial position of the Parent Company and enable them
to ensure that the financial statements comply with the Companies
Act 2006. They are also responsible for safeguarding the assets of
the Parent Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities. They
are further responsible for ensuring that the Strategic Report and
the Report of the Directors and other information included in the
Annual Report and Accounts is prepared in accordance with
applicable law in the United Kingdom. The maintenance and integrity
of the Big Technologies plc website is the responsibility of the
Directors; the work carried out by the auditor does not involve the
consideration of these matters and, accordingly, the auditor
accepts no responsibility for any changes that may have occurred in
the accounts since they were initially presented on the website.
Legislation in the United Kingdom governing the preparation and
dissemination of the accounts and the other information included in
Annual Reports may differ from legislation in other
jurisdictions.
This responsibility statement was approved by the Board of
Directors on 28 March 2023 and is signed on its behalf by Sara
Murray and Daren Morris.
Consolidated statement of comprehensive income
For the year ended 31 December 2022
2022 2021
Note GBP'000 GBP'000
---------------------------------------- ---- -------- --------
Revenue 2 50,164 37,628
Cost of sales (13,781) (10,971)
---------------------------------------- ---- -------- --------
Gross profit 36,383 26,657
Administrative expenses (15,800) (12,884)
Other operating income 7 1
---------------------------------------- ---- -------- --------
Operating profit 20,590 13,774
Analysed as:
---------------------------------------- ---- -------- --------
Adjusted EBITDA 30,465 20,567
Amortisation of acquired intangibles (468) (468)
Amortisation of development costs (806) (703)
Depreciation (2,545) (1,931)
IPO preparation costs - (1,192)
National insurance on warrant exercise - (1,076)
Share-based payments expense 8 (6,056) (1,423)
---------------------------------------- ---- -------- --------
Operating profit 20,590 13,774
Finance income 449 -
Finance expenses (42) (47)
Share of loss of joint venture (2) (5)
---------------------------------------- ---- -------- --------
Profit before taxation 20,995 13,722
Taxation 4 (1,033) (934)
---------------------------------------- ---- -------- --------
Profit for the year 19,962 12,788
---------------------------------------- ---- -------- --------
Other comprehensive income:
Exchange differences on translation of
foreign operations 139 27
---------------------------------------- ---- -------- --------
Total comprehensive income for the year 20,101 12,815
---------------------------------------- ---- -------- --------
Basic earnings per share (pence) 6.9p 4.5p
Diluted earnings per share (pence) 6.5p 4.4p
---------------------------------------- ---- -------- --------
Consolidated statement of financial position
As at 31 December 2022
2022 2021
Note GBP'000 GBP'000
------------------------------------- ---- -------- --------
Assets
Goodwill 13,359 13,359
Acquired and other intangible assets 6,000 6,142
Property, plant and equipment 4,178 2,265
Right-of-use assets 705 345
Interests in joint ventures - 363
Deferred tax assets 3,725 1,039
Other receivables 1,684 1,612
------------------------------------- ---- -------- --------
Non-current assets 29,651 25,125
Inventories 6,823 3,079
Trade and other receivables 9,222 6,620
Cash and cash equivalents 6 67,474 48,317
------------------------------------- ---- -------- --------
Current assets 83,519 58,016
------------------------------------- ---- -------- --------
Total assets 113,170 83,141
------------------------------------- ---- -------- --------
Liabilities
Lease liabilities 247 195
Trade and other payables 8,153 6,875
Provisions 800 -
------------------------------------- ---- -------- --------
Current liabilities 9,200 7,070
Lease liabilities 460 154
Deferred tax liabilities 412 501
Trade and other payables 625 1,185
------------------------------------- ---- -------- --------
Non-current liabilities 1,497 1,840
------------------------------------- ---- -------- --------
Total liabilities 10,697 8,910
------------------------------------- ---- -------- --------
Net assets 102,473 74,231
------------------------------------- ---- -------- --------
Equity
Share capital 7 2,904 2,885
Share premium 7 39,031 38,535
Other reserves 414 275
Retained earnings 60,124 32,536
------------------------------------- ---- -------- --------
Total equity 102,473 74,231
------------------------------------- ---- -------- --------
Consolidated statement of changes in equity
For the year ended 31 December 2022
Total
Share Share Other Retained owners' Non-controlling Total
capital premium reserves earnings equity interest equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- -------- -------- --------- --------- -------- --------------- --------
Balance at 1 January
2021 27 21,767 28 18,335 40,157 306 40,463
Profit for the year - - - 12,788 12,788 - 12,788
Other comprehensive income
for the year - - 27 - 27 - 27
---------------------------------- -------- -------- --------- --------- -------- --------------- --------
Total comprehensive income
for the year - - 27 12,788 12,815 - 12,815
---------------------------------- -------- -------- --------- --------- -------- --------------- --------
Share-based payments - - - 1,413 1,413 - 1,413
Transactions with non-controlling
interests - - 220 - 220 (306) (86)
Issue of shares, net
of share issue costs 143 19,483 - - 19,626 - 19,626
Bonus issue of shares 2,715 (2,715) - - - - -
Balance at 31 December
2021 2,885 38,535 275 32,536 74,231 - 74,231
Balance at 1 January
2022 2,885 38,535 275 32,536 74,231 - 74,231
Profit for the year - - - 19,962 19,962 - 19,962
Other comprehensive income
for the year - - 139 - 139 - 139
---------------------------------- -------- -------- --------- --------- -------- --------------- --------
Total comprehensive income
for the year - - 139 19,962 20,101 - 20,101
Share-based payments - - - 6,026 6,026 - 6,026
Deferred tax on share-based
payments - - - 1,600 1,600 - 1,600
Issue of shares, net
of share issue costs 19 496 - - 515 - 515
---------------------------------- -------- -------- --------- --------- -------- --------------- --------
Balance at 31 December
2022 2,904 39,031 414 60,124 102,473 - 102,473
---------------------------------- -------- -------- --------- --------- -------- --------------- --------
Consolidated statement of cash flows
For the year ended 31 December 2022
2022 2021
Note GBP'000 GBP'000
---------------------------------------------- ---- -------- --------
Cash flows from operating activities
Profit before tax 20,995 13,722
Adjustments for:
Depreciation of property, plant and equipment 2,328 1,698
Depreciation of right-of-use assets 217 233
Amortisation of intangible assets 1,274 1,171
Share of loss of joint venture 2 5
Investment write-down 426 -
Share-based payments expense 8 6,026 1,413
Finance income (449) -
Finance expenses 42 47
Changes in:
Inventories (3,744) (859)
Trade and other receivables (2,986) (2,867)
Trade and other payables 1,594 1,401
---------------------------------------------- ---- -------- --------
Cash generated from operating activities 25,725 15,964
Taxes paid (1,801) (1,926)
---------------------------------------------- ---- -------- --------
Net cash generated from operating activities 23,924 14,038
---------------------------------------------- ---- -------- --------
Cash flows from investing activities
Purchase of property, plant and equipment (142) (135)
Own work capitalised (4,098) (1,833)
Capitalised development costs (1,132) (969)
Interest received 295 -
Dividends from joint ventures and associates - 64
---------------------------------------------- ---- -------- --------
Net cash used in investing activities (5,077) (2,873)
---------------------------------------------- ---- -------- --------
Cash flows from financing activities
Proceeds from issues of shares 515 19,626
Transactions with non-controlling interests - (86)
Repayment of lease liabilities (238) (239)
Interest paid (25) (32)
---------------------------------------------- ---- -------- --------
Net cash generated from financing activities 252 19,269
---------------------------------------------- ---- -------- --------
Net increase in cash and cash equivalents 19,099 30,434
Cash and cash equivalents at the beginning
of the year 48,317 17,999
Effects of exchange rate changes on cash
and cash equivalents 58 (116)
---------------------------------------------- ---- -------- --------
Cash and cash equivalents at the end of
the year 6 67,474 48,317
---------------------------------------------- ---- -------- --------
Notes to the consolidated financial statements
For the year ended 31 December 2022
1. General information and basis of preparation
Big Technologies PLC is a public limited company incorporated in
the United Kingdom, listed on the Alternative Investment Market
('AIM') of the London Stock Exchange. The Company is domiciled in
the United Kingdom and its registered office is Talbot House, 17
Church Street, Rickmansworth, WD3 1DE. The consolidated financial
statements comprise the Company and its subsidiaries (together
referred to as the 'Group').
The principal activity of the Group is the development and
delivery of remote monitoring technologies and services to a range
of domestic and international customers.
The preliminary announcement for the year ended 31 December 2022
has been prepared in accordance with the accounting policies as
disclosed in the Group's annual financial statements for the year
ended 31 December 2021.
Information in this preliminary announcement does not constitute
statutory accounts of the Group within the meaning of section 434
of the Companies Act 2006.
The annual financial information presented in this preliminary
announcement is based on, and is consistent with, that in the
Group's audited financial statements for the year ended 31 December
2022, and those financial statements will be delivered to the
Registrar of Companies following the Company's Annual General
Meeting. The financial statements of the Group are prepared in
accordance with UK-adopted international accounting standards and
applicable law. The independent auditors' report on those financial
statements is unqualified and does not contain any statement under
section 498 (2) or 498 (3) of the Companies Act 2006.
Going concern
The Group's financial statements have been prepared on the going
concern basis, which contemplates the continuity of normal business
activity and the realisation of assets and the settlement of
liabilities in the normal course of business.
The Directors have reviewed the forecasts for the Group for the
period to 31 December 2025 and have a reasonable expectation that
there are no material uncertainties that cast significant doubt
about the Group's ability to continue in operational existence for
at least 12 months from the date of signing these financial
statements. Accordingly, they continue to adopt the going concern
basis in preparing the consolidated financial statements.
This preliminary announcement was approved by the Board of
Directors on 28 March 2023.
2. Segment reporting
The Group derives revenue from the delivery of remote monitoring
technologies and services to a range of domestic and international
customers.
The income streams are all derived from the utilisation of these
products which, in all aspects except details of revenue, are
reviewed and managed together within the Group and as such are
considered to be the only segment. The Group operates across three
regions: Europe, Asia-Pacific and the Americas, and the Board of
Directors monitors revenue on this basis.
Revenue for each of the geographical areas is as follows:
2022 2021
GBP'000 GBP'000
Europe 5,048 4,988
Asia-Pacific 29,165 18,230
Americas 15,951 14,410
--------- ---------
50,164 37,628
========= =========
Assets and liabilities by segment are not regularly reviewed by
the Board of Directors on a monthly basis and are not used as key
decision-making tools and are therefore not disclosed here.
Revenues are disaggregated as follows:
2022 2021
GBP'000 GBP'000
Sales of goods 97 165
Delivery of services 50,067 37,463
--------- ---------
50,164 37,628
========= =========
Information about major customers
Three (2021: two) of the Group's customers individually account
for more than 10% of total Group revenue. These customers operate
in the criminal justice sector and account for 51% (2021: 44%) of
total Group revenue.
Future performance obligations
The amount of a customer contract's transaction price that is
allocated to the remaining performance obligations represents
contracted revenue that has not yet been recognised. Including
amounts recognised as contract liabilities and amounts that are
contracted but not yet delivered. The transaction price allocated
to performance obligations that are unsatisfied or partially
unsatisfied as of 31 December 2022 is GBP14,791,000 (2021:
GBP15,245,000 This amount mostly comprises obligations to provide
electronic monitoring software, hardware and related support
services, as the respective contracts typically have durations of
multiple years.
Management expects that GBP6,125,000 in 2022 (2021:
GBP6,449,000) of the amount allocated to the future performance
obligations as of 31 December 2022 will be recognised during 2023.
GBP8,666,000 (2021: GBP8,796,000) is expected to be recognised as
revenue within 2 to 5 years. The Group applies the practical
expedient in paragraph 121 of IFRS 15 and does not disclose
information about remaining performance obligations that have
original expected durations of one year or less.
3. Alternative performance measures
These items are included in normal operating costs of the
business, but are significant cash and non-cash expenses that are
separately disclosed because of their size, nature or incidence. It
is the Group's view that excluding them from operating profit gives
a better representation of the underlying performance of the
business in the year.
2022 2021
GBP'000 GBP'000
Amortisation of acquired intangibles 468 468
IPO preparation costs - 1,192
National insurance on warrant exercise - 1,076
---------- ----------
Total adjusting operating items 468 2,736
Share-based payments expense 6,056 1,423
---------- ----------
Total adjusting items and share-based
payments before tax 6,524 4,159
---------- ----------
Tax effect of adjusting items and
share-based payments (1,641) (1,050)
---------- ----------
Total adjusting items and share-based
payments after tax 4,883 3,109
========== ==========
Amortisation of acquired intangibles
These costs are excluded from the adjusted results of the Group
since the costs are non-cash charges arising from investment
activities. As such, they are not considered reflective of the core
trading performance of the Group.
IPO preparation costs
Attributable costs relating to the IPO in 2021 have been
recognised within the consolidated statement of comprehensive
income as an exceptional cost. These costs are excluded from the
adjusted results of the Group since the costs are one-off in nature
and will not repeat in future years.
National insurance on warrant exercise
Warrants were exercised in respect of 5,858,500 shares by the
Chief Executive Officer immediately prior to the IPO in 2021. The
acquisition of shares under the warrant was deemed to be within the
Employment Related Securities rules and, therefore a charge has
been recognised in respect of employer's national insurance.
Share-based payments expense
These costs are excluded from the adjusted results of the Group
since the costs are non-cash charges arising from recognition of
the fair value of share options and other share-based incentives
granted to employees of the Group. As such, they are not considered
reflective of the core trading performance of the Group.
Tax effect of adjusting items and share-based payments
The tax impact of these adjustments was as follows: amortisation
of acquired intangibles of GBP89,000 (2021: GBP89,000) and
share-based payments expense of GBP1,552,000 (2021:
GBP961,000).
4. Taxation
2022 2021
GBP'000 GBP'000
Current tax
For the financial year 2,218 1,457
Adjustments in respect of prior
years (13) 648
--------- ---------
2,205 2,105
Deferred tax
Origination and reversal of temporary
timing differences 389 (127)
Adjustments in respect of prior
years (9) (83)
Related to share-based payments (1,552) (961)
--------- ---------
(1,172) (1,171)
Total taxation for the year 1,033 934
========= =========
UK corporation tax is calculated at 19% (2021: 19%) of the
assessable profit for the year. Taxation for other jurisdictions is
calculated at the rates prevailing in the respective
jurisdictions.
5. Earnings per share
The calculation of the basic and diluted earnings per share is
based on the following data:
2022 2021
GBP'000 GBP'000
Profit for the purpose of basic
and diluted earnings per share being
net profit attributable to equity
holders of the parent 19,962 12,788
Adjustments for:
Adjusting items 468 2,736
Share-based payments expense 6,056 1,423
Tax effect of adjusting items and
share-based payments (1,641) (1,050)
Adjusted earnings 24,845 15,897
========= =========
2022 2021
No. shares No. shares
Weighted average number of Ordinary
shares for the purpose of basic
earnings per share 289,950,953 282,853,610
Effect of dilutive potential Ordinary
shares/share options 16,800,389 6,373,277
Weighted average number of Ordinary
shares for the purpose of diluted
earnings per share 306,751,342 289,226,887
============ ============
2022 2021
Basic earnings per share Pence Pence
Basic earnings per share 6.9 4.5
Adjustments for:
Adjusting items 0.2 1.0
Share-based payments expense 2.1 0.5
Tax effect of adjusting items and
share-based payments (0.6) (0.4)
Adjusted basic earnings per share 8.6 5.6
======= =======
2022 2021
Diluted earnings per share Pence Pence
Diluted earnings per share 6.5 4.4
Adjustments for:
Adjusting items 0.2 1.0
Share-based payments expense 2.0 0.5
Tax effect of adjusting items and
share-based payments (0.6) (0.4)
Adjusted diluted earnings per share 8.1 5.5
======= =======
The adjusted earnings per share have been calculated on the
basis of profit before adjusting items and share-based payments,
net of tax. The tax effect of adjusting items and share-based
payments is equal to the deferred tax charge (or credit) recognised
in the consolidated income statement for these items. The Directors
consider that this calculation gives a better understanding of the
Group's earnings per share in the current and prior year.
6. Cash and cash equivalents
The carrying amounts of the cash and cash equivalents are
denominated in the following currencies:
2022 2021
GBP'000 GBP'000
Pound sterling 58,386 30,587
US dollar 3,389 11,186
Australian dollar 2,480 3,942
New Zealand dollar 2,674 27
Colombian peso 318 1,280
Euro 20 579
Canadian dollar 126 635
Other 81 81
67,474 48,317
========= =========
Net cash
2022 2021
GBP'000 GBP'000
Cash and cash equivalents 67,474 48,317
Lease liabilities (707) (349)
66,767 47,968
========= =========
7. Share capital
The allotted, called up and fully paid share capital is made up
of 290,400,082 ordinary shares of GBP0.01 each.
Number Share Share
Note of shares capital premium Total
GBP'000 GBP'000 GBP'000
At 1 January 2021 2,742,026 27 21,767 21,794
Bonus issue of
shares (i) 271,460,574 2,715 (2,715) -
(ii)
Issue of shares - (iv) 14,302,482 143 19,483 19,626
----------- -------- -------- -------
At 31 December
2021 288,505,082 2,885 38,535 41,420
Issue of shares (v) 1,895,000 19 496 515
----------- -------- -------- -------
At 31 December
2022 290,400,082 2,904 39,031 41,935
=========== ======== ======== =======
(i) On 24 May 2021, a resolution was passed such that the number
of shares in issue was increased to 274,202,600 shares, with a
nominal value of GBP0.01 each, through a bonus allotment to
existing shareholders of 99 shares for each share held.
(ii) On 28 July 2021 the following movements occurred:
- A total of 373,650 EMI share options were exercised into
shares with a nominal value of GBP0.01 each for GBP0.27 prior to
the listing on AIM
- A total of 5,858,500 warrants were exercised into shares with
a nominal value of GBP0.01 each for GBP0.67 prior to the listing on
AIM
- A total of 8,040,332 new ordinary shares with a nominal value
of GBP0.01 each were placed in connection with the Company's
initial public offering and admission to AIM for GBP2.00.
Transaction costs of GBP482,000 directly associated with the equity
raise have been netted against the cash proceeds recognised in
share premium.
(iii) On 30 September 2021, a total of 10,000 EMI share options
were exercised into shares with a nominal value of GBP0.01 each for
GBP0.27.
(iv) On 16 December 2021, a total of 20,000 EMI share options
were exercised into shares with a nominal value of GBP0.01 each for
GBP0.27.
(v) During 2022, 1,795,000 EMI share options and 100,000 non-EMI
share options were exercised into shares with a nominal value of
GBP0.01 each for GBP0.27 and GBP0.34 respectively.
8. Share-based payments
The Group has a number of equity-settled share-based payment
arrangements in operation, the details of which are disclosed in
the 2022 Annual Report. The schemes were established to reward and
incentivise the senior management team and employees to deliver
share price growth.
The charge made in respect of share-based payments is as
follows:
2022 2021
GBP'000 GBP'000
EMI Plan - 181
Non-EMI Plan (Chair) 112 200
LTIP 145 37
Growth Share Plan 5,769 995
--------- ---------
Share-based payments expense (IFRS
2 charge) 6,026 1,413
Employers' tax charge in relation to
share awards 30 10
--------- ---------
Total charge in respect of share-based
payments 6,056 1,423
========= =========
9. Principal risks and uncertainties
The principal risks and uncertainties impacting the Group are
described in the 2022 Annual Report. They include: reliance on key
customers, failure to manage growth, change in government policy,
failure to develop new products, competitor actions, reliance on
third-party technology and communication systems, reputational
risk, dependence on partners, loss of key personnel, supply chain,
product liability, foreign exchange risk, credit risk, business
taxation, bid pricing, cyber security/business interruption,
intellectual property/patents and operating in global markets.
10. Related party transactions
Transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation and are not
disclosed in this section of the notes.
The Group's other related party transactions were the
remuneration of key management personnel. Details of Directors'
remuneration for the year are provided in the Remuneration
Committee Report in the 2022 Annual Report.
Prior to their appointments to the Board, Simon Collins and a
company that is a related party to Daren Morris provided
consultancy services to the Company in relation to the July 2021
IPO. During the year, no payments to Simon J Collins &
Associates Ltd, a company controlled by Simon Collins were made
(2021: GBP29,000). During the year, no payments to Rockmount
Financial Ltd, a company controlled by the wife of Daren Morris
were made (2021: GBP160,000).
In addition to these transactions, GBP100,000 (2021: GBP92,000)
was paid to TFM Developments Ltd, a company of which Sara Murray is
a director. The transaction relates to a licence fee paid in
respect of a patent owned by the company used by the Group as part
of its continuing research and development activities.
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END
FR NKFBPNBKDQNB
(END) Dow Jones Newswires
March 29, 2023 02:00 ET (06:00 GMT)
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