TIDMIDE

RNS Number : 4114B

IDE Group Holdings PLC

30 September 2022

IDE Group Holdings Plc

("IDE", the "Group" or the "Company")

Unaudited Interim Results

IDE Group Holdings plc, the mid-market IT managed services provider, today announces its unaudited results for the six months ended 30 June 2022.

Highlights

   --     Revenue of GBP6.7 million (H1 2021*: GBP7.6 million) 

-- Gross profit* of GBP2.4 million (H1 2021: GBP3.6 million) representing a lower margin of 36% (H1 2021 46%)

   --     Adjusted EBITDA* profit of GBP0.9 million (H1 2021: 2.1 million) 
   --     Year two of the GBP22.5m contract previously announced progressing to plan 

-- The restructuring and the closing down of six non-trading subsidiaries, simplifying the Group structure

* from continuing operations, excluding the results relating to IDE Group Connect Limited and Nimoveri Limited in 2021.

Contacts :

 
 IDE Group Holdings Plc                      Tel: +44 (0)344 
  Andy Parker, Non-Executive Chairman         874 1000 
 finnCap Limited                             Tel: +44 (0)20 7220 
  Nominated Adviser and Broker                0500 
  Corporate finance: Jonny Franklin-Adams/ 
  Abby Kelly 
  ECM: Tim Redfern 
 
 

Non-Executive Chairman's Statement

The first six months of the year has been a period of laying the foundations for future growth, following the disposal of the Connect Division. The Group has taken advantage of this period to continue to restructure the operational side of the business and focus on expanding our network of partners.

The profile of business this year is weighted differently to 2021, with a number of projects running in the second half of the year, resulting in revenue being down slightly from H1 2021. The product mix have also changed, with less Lifecycle projects, which has meant a decrease in the Gross margin. Furthermore a number of contracts that were won have had a delayed start an example of which is a contract scheduled for commencement in May now expected for November 1(st) .

Management expect results for FY22 full year to be in line with FY21 full year, on a like for like basis.

All our colleagues in Manage deserve a hearty thank you for the outstanding work delivered and service excellence enjoyed by our partners.

Summary and Outlook

The board continues to be pleased with the trading as we build for a profitable cash generative year. We continue to build our base of customers and revenue. The company has latter stage engagement with new partners that would deliver a meaningful uplift and deeper spread of revenues for 2023 and beyond.

It has taken over three years to turn the Company around, but I am truly delighted to say that at last, with the sale of Connect last October, we have a profitable Company with excellent prospects. The Company is generating positive cashflow over and above the repayment of onerous contracts (which end this year), with the cash bank balance sitting above GBP1m at the date these results are posted.

The efforts of all staff involved in this turnaround cannot be underestimated. Some incredibly tough decisions have been made along the way, which has seen good people leave the business because the company neither had the scale or resources to keep them.

At both a trading and post central and PLC costs, we have a profitable business. Our focus is now entirely on growth, continued organic growth and the possibility of acquisitions. We have an exciting future ahead of us.

It is the intention of the Group, following the release of these interim results, to call a General Meeting in order to allow a share capital reorganisation, and to convert the majority of the outstanding loan notes into equity, allowing the Group to reduce the indebtedness of the to an appropriate level.

We can confidently look forward to a positive and rewarding future for IDE shareholders.

Andy Parker

Non-Executive Chairman

Financial Review

Results for the six months to 30 June 2022

Revenue from continuing operations for the six months to 30 June 2022 from operations was GBP 6.7 million (H1 2021 continuing operations: GBP7.6 million).

Gross profit from continuing operations for the six months to 30 June 2022 was GBP2.4 million (H1 2021: GBP3.6 million), representing an overall decline in gross margin of 10.0 percentage points compared to the prior period. The change in gross profit in the six months to 30 June 2022 was due to a change in product mix with less Lifecycle project work.

At an Adjusted EBITDA* level for continuing operations the Group generated a profit of GBP0.9 million (H1 2021: GBP2 million ).

Exceptional costs amounted to GBP0.04 million (H1 2021: GBP0.1 million) and related predominantly to legacy redundancy costs as a result of the reduction in headcount in the previous financial year. Going forward, we expect exceptional costs to continue to decrease.

Net financial costs were GBP1.4 million (H1 2021: GBP0.8 million), which include GBP1.0 million of interest on the loan notes issued which is payable at the end of their term. In addition, the costs include GBP6,000 of notional interest in relation to the convertible loan notes.

The loss after tax for the period was GBP1.2 million (H1 2021: loss of GBP1.3 million).

Loss per share was 0.27p (H1 2021: loss per share 0.31p).

Cashflow and Net Debt

The Group's cash generated from operating activities in the period was GBP 0.7 million (H1 2021 inflow of GBP0.1 million), reflecting positive underlying performance and careful management of working capital. The Group invested GBP0.03 million in fixed assets. There were no new borrowi ngs, but repayment of lease liabilities consumed GBP0.1 million (H1 2021: GBP0.1 million). The net result is that as at 30 June 2022 there were no bank borrowings or overdraft debt and the cash balance was GBP 0.4 million (H1 2021: GBP0.5 million). Net debt as at 30 June 2022 was GBP24.0 million (31 December 2021: GBP24.2 million).

Consolidated Statement of Comprehensive Income

 
                                                        Unaudited     Unaudited        Audited 
                 Continuing Operations                 Six months    Six months           Year 
                                                            ended         ended          ended 
                                                          30 June       30 June    31 December 
                                                             2022          2021           2021 
                                            Note           GBP000        GBP000         GBP000 
---------------------------------------  --------  --------------  ------------  ------------- 
 
 Revenue                                       2            6,741         7,557         14,456 
 Cost of sales                                            (4,317)       (3,998)        (8,185) 
----------------------------------------  -------  --------------  ------------  ------------- 
 Gross profit                                               2,424         3,559          6,271 
 Other operating income                                         -            27             40 
 Administrative expenses excluding 
  impairment                                              (2,210)       (2,933)        (5,151) 
 Impairment charge on intangibles                               -             -        (1,833) 
  Impairment charge on trade 
   receivables                                                  -             -            139 
 
 Operating profit/(loss)                                      214           653          (534) 
----------------------------------------  -------  --------------  ------------  ------------- 
 Analysed as: 
 Adjusted EBITDA*                                             942         2,061          3,099 
 
 Non underlying items                      3                 (36)          (91)          (433) 
 Depreciation                                                (98)         (288)          (321) 
 Amortisation                                               (585)       (1,029)        (1,169) 
  Impairment of goodwill and 
   intangibles                                                  -             -        (1,833) 
 Impairment credit on trade 
  receivables                                                   -             -            139 
 Profit/(Loss) on the sale                                    (9)             -              - 
  of assets 
 Charges for share-based 
  payments                                                      -             -           (16) 
 
 Net financial costs                                      (1,440)         (773)        (2,453) 
 
 Loss before taxation                                     (1,226)         (120)        (2,987) 
 Income tax                                                   513         (260)          1.204 
----------------------------------------  -------  --------------  ------------  ------------- 
 Loss for the period after 
  taxation                                                  (713)         (380)        (1,783) 
----------------------------------------  -------  --------------  ------------  ------------- 
 Discontinued operations: 
 
 
 
   (Loss)/profit attributed to 
   discontinued operations                                      -         (885)          (193) 
----------------------------------------  -------  --------------  ------------  ------------- 
 Loss for the period and total 
  comprehensive income attributable 
  to equity holders of the parent                           (713)       (1,265)        (1,976) 
----------------------------------------  -------  --------------  ------------  ------------- 
 Basic and diluted loss per 
  share - continuing operations            4 
 Basic and diluted (pence per 
  share)                                                   (0.14)        (0.09)         (0.39) 
 Basic and diluted loss per 
  share - discontinued operations 
 Basic and Diluted (pence per 
  share)                                                        -        (0.22)         (0.04) 
 Total basic and diluted profit/(loss) 
  (pence per share)                                        (0.14)        (0.31)         (0.43) 
 
 
 

* Earnings from continuing operations before net finance costs, tax, depreciation, amortisation, impairment charges, share based payments and exceptional costs

Consolidated Statement of Financial Position

 
                                       Unaudited          Unaudited            Audited 
                                         30 June            30 June        31 December 
                                            2022               2021               2021 
                                          GBP000             GBP000             GBP000 
-------------------------------  ---  ----------  -----------------  ----------------- 
 Non-current assets 
 Intangible assets                         7,647              9,788              8,231 
 Goodwill                                      -                196                  - 
 Property, plant and equipment               748                705                813 
 Deferred tax asset                        2,778                  -              2,265 
 Financial and other assets                    -              2,284                313 
-------------------------------  ---  ----------  -----------------  ----------------- 
                                          11,173             12,973             11,622 
-------------------------------  ---  ----------  -----------------  ----------------- 
 Current assets 
  Trade and other receivables              3,530              5,736              3,969 
 Deferred tax asset                            -              3,439                  - 
 Cash and cash equivalents                   798                615                349 
                                           4,328              9,790              4,318 
-------------------------------  ---  ----------  -----------------  ----------------- 
 Total assets                             15,501             22,763             15,940 
-------------------------------  ---  ----------  -----------------  ----------------- 
 Current liabilities 
 Borrowings                       5            -                100                100 
 Trade and other payables                  4,300             11,278              5,318 
 Contract liabilities                          -              1,581                 49 
 Taxation                                      -                  -                  - 
 Finance lease obligations                   162                620                146 
 Provisions                                  113                115                157 
                                           4,575             13,694              5,770 
-------------------------------  ---  ----------  -----------------  ----------------- 
 Non-current liabilities 
 Trade and other payables                    900                  -                730 
 Contract liabilities                          -                 15                  - 
  Borrowings                       5      18,422             14,656             17,027 
 Convertible loan notes           6          137                  -                131 
 Finance lease obligations                   629                545                710 
 Deferred tax liabilities                      -              1,547                  - 
 Provisions                                  181                 91                202 
                                          20,269             16,854             18,800 
-------------------------------  ---  ----------  -----------------  ----------------- 
 Total liabilities                        24,844             30.548             24,570 
-------------------------------  ---  ----------  -----------------  ----------------- 
 Net (liabilities)/assets                (9,343)            (7,785)            (8,630) 
-------------------------------  ---  ----------  -----------------  ----------------- 
 
 Equity attributable to equity 
  holders of the parent 
 Called up share capital                  12,418             12,417             12,418 
 Share premium account                    35,882             35,439             35,882 
 Other reserves                               58                502               (92) 
 Retained earnings                      (57,701)           (56,143)           (56,838) 
 Total equity                            (9,343)            (7,785)            (8,630) 
-------------------------------  ---  ----------  -----------------  ----------------- 
 

Consolidated Statement of Changes in Equity

 
                                     Share      Share     Equity    Retained        Foreign 
                                   capital    premium    Reserve    earnings       currency     Total 
                                       (a)        (b)        (c)         (d)    translation 
                                                                                    reserve 
                                                                                        (e) 
                                    GBP000     GBP000     GBP000      GBP000         GBP000    GBP000 
-------------------------------  ---------  ---------  ---------  ----------  -------------  -------- 
 At 1 January 2021                  10,020     35,439        967    (54,878)          (150)   (8,602) 
 
 Total comprehensive 
  income for the period 
 Loss for the financial 
  year and total comprehensive 
  income                                 -          -          -     (1,265)              -   (1,265) 
 Shares issued on the 
  redemption of convertible 
  loan notes                         2,397          -      (315)           -              -     2,082 
 
 
 At 30 June 2021 (unaudited)        12,417     35,439        652    (56,143)          (150)   (7,785) 
 
 Total comprehensive 
  income for the period 
 Adjustment to shares 
  issued on redemption 
  of convertible loan 
  notes                                  1        443      (594)                          -     (150) 
 
 Loss for the financial 
  year and total comprehensive 
  income                                 -          -          -       (711)              -     (711) 
 Transactions with 
  owners recorded directly 
  in equity 
 Share based payments                    -          -          -          16              -        16 
 
 At 31 December 2021 
  (Audited)                         12,418     35,882         58    (56,838)          (150)   (8.630) 
 
 At 1 January 2022                  12,418     35,882         58    (56,838)          (150)   (8,630) 
 Total comprehensive 
  income for the period 
 Loss for the financial 
  year and total comprehensive 
  income                                 -          -          -       (713)        -         (1,226) 
 Loss on FX realised                     -          -          -       (150)       150              - 
 
 At 30 June 2022 (unaudited)        12,418     35,882         58    (57,701)              -   (9,856) 
-------------------------------  ---------  ---------  ---------  ----------  -------------  -------- 
 
   (a)    Share capital represents the nominal value of equity shares 

(b) Share premium represents the excess over nominal value of the fair value of consideration received for equity shares; net of expenses of the share issue;

(c) The equity reserve consists of the equity component of convertible loan notes that were issued as part of the fundraising in August 2018 less the equity component of instruments converted or settled.

The fair value of the equity component of convertible loan notes issued is the residual value after deduction of the fair value of the debt component of the instrument from the face value of the loan note.

   (d)    Retained earnings represents retained profits and accumulated losses 

(e) On consolidation, the balance sheets of the Group's foreign subsidiaries are translated into sterling at the rates of exchange ruling at the balance sheet date. Exchange gains or losses arising from the consolidation of these foreign subsidiaries are recognised in the foreign currency translation reserve. As the foreign subsidiaries are being liquidated the balance on the reserve has been recognised in Retained earnings.

Consolidated Cash Flow Statement

 
                                                   Unaudited     Unaudited        Audited 
                                                  Six months    Six months           Year 
                                                       ended         ended          ended 
                                                     30 June       30 June    31 December 
                                                        2022          2021           2021 
                                                      GBP000        GBP000         GBP000 
-----------------------------------------  ---  ------------  ------------  ------------- 
 Loss from continuing operations                     (1,226)         (120)        (2,987) 
 Loss from discontinuing operations                        -       (1,385)          (193) 
                                                ------------  ------------  ------------- 
 Loss before tax for the period                      (1,226)       (1,505)        (3,180) 
 Adjustments for: 
 Depreciation of property, plant 
  and equipment                                           98           545            321 
 Amortisation of intangible assets                       585         1,445          1,169 
  Profit on disposal of discontinued 
   operations                                              -             -        (1,286) 
 Loss on discontinued operations                           -             -              - 
 Impairment charge on goodwill 
  and intangibles                                          -             -          1,833 
 Impairment charge on property,                            -             -              - 
  plant and equipment 
 Impairment credit on trade receivables                    -             -          (139) 
 
 Net financial costs                                   1,440           783          2,453 
 Equity settled share-based payment 
  expenses                                                 -             -             16 
 Profit/Loss on sale of fixed 
  assets                                                   9           (4)              - 
                                                         906         1,264          1,187 
 Decrease in trade and other receivables                 750       (2,477)          (133) 
 Decrease in trade and other payables                  (897)         1,420          (513) 
 Increase/(decrease) in provisions                      (65)         (105)             47 
                                                         694           102            588 
 Net corporation tax recovered/                            -             -              - 
  (paid) 
 Net cash acquired from operating 
  activities                                             694           102            588 
----------------------------------------------  ------------  ------------  ------------- 
 Cash flow from investing activities: 
 Disposal of subsidiaries                                  -             -          (586) 
 Acquisition of property, plant 
  and equipment                                         (30)          (43)           (28) 
 Proceeds from sale of fixed assets                        -             4              - 
-----------------------------------------  ---  ------------  ------------  ------------- 
 Net cash used in investing activities                  (30)          (39)          (614) 
----------------------------------------------  ------------  ------------  ------------- 
 Cash flows from financing activities: 
 Repayment of lease liabilities                         (77)         (126)          (434) 
 New loans and borrowings, net 
  of expenses                                              -             -          1,000 
 Repayments of loans and borrowings,                   (100)             -              - 
  net of expenses 
 Interest paid                                          (38)          (15)          (334) 
 Supplier finance repaid                                   -             -          (550) 
 Net cash absorbed by financing 
  activities                                           (215)         (141)          (318) 
----------------------------------------------  ------------  ------------  ------------- 
 
 Net increase/ (decrease) in cash 
  and cash equivalents                                   449          (78)          (344) 
 Cash and cash equivalents at 
  beginning of period                                    349           693            693 
 
 Cash and cash equivalents at 
  end of period                                          798           615            349 
----------------------------------------------  ------------  ------------  ------------- 
 Being: 
 Cash and cash equivalents                               798           615            349 
                                                         798           615            349 
 ---------------------------------------------  ------------  ------------  ------------- 
 

Notes to the half-yearly financial information

1. Basis of preparation

The condensed consolidated interim financial information for the six-month period ended 30 June 2022 and 30 June 2021 is unaudited. This statement has not been reviewed by the Company's auditor. This condensed consolidated interim financial information was approved by the Board of Directors and authorised for issue on 30(th) September 2022. A copy of this half-yearly financial report is available on the Company's website at www.idegroup.com .

The comparative figures for the financial year ended 31 December 2021 are extracted from but do not comprise the Group's consolidated financial statements for that year.

The Company is a public limited liability company incorporated and domiciled in Scotland. The address of its registered office is 24 Dublin Street, Edinburgh EH1 3PP. The Company is listed on the AIM market of the London Stock Exchange.

IDE and its subsidiaries have not applied IAS 34, 'Interim Financial Reporting' as adopted by the European Union, which is not mandatory for UK AIM listed companies, in the preparation of this half-yearly financial report.

This condensed consolidated interim financial information for the six-month period ended 30 June 2022 therefore does not comply with all the requirements of IAS 34, 'Interim Financial Reporting' as adopted by the European Union. The consolidated interim financial information should be read in conjunction with the annual financial statements of the Company as at and for the year ended 31 December 2021, which were prepared in accordance with IFRS as adopted by the European Union.

This condensed consolidated interim financial information does not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2021 were approved by the Board of Directors on 29 September 2022 and delivered to the Registrar of Companies. The report of the auditor was unqualified, did not contain an emphasis of matter paragraph and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

Accounting policies

The accounting policies used in the preparation of the condensed consolidated interim financial information for the six months ended 30 June 2022 are in accordance with the recognition and measurement criteria of International Financial Reporting Standards ("IFRS") as adopted by the European Union and are consistent with those that will be adopted in the annual statutory financial statements for the year ended 31 December 2022.

While the financial information included has been prepared in accordance with the recognition and measurement criteria of IFRS, as adopted by the European Union, these financial statements do not contain sufficient information to comply with IFRSs. The accounting policies adopted in the interim financial statements are consistent with those adopted in the financial statements for the year ended 31 December 2021.

Exceptional items and other non-recurring items

Items which are material because of their size or nature, and which are non-recurring are highlighted separately on the face of the income statement. The separate reporting of exceptional items helps provide a better picture of the Company's underlying performance. Items which may be included within the exceptional category include:

   --     spend on major restructuring programmes; 
   --     significant goodwill or other asset impairments; and 
   --     other particularly significant or unusual items. 

Exceptional items are excluded from the headline profit measures used by the Group and are highlighted separately in the income statement as management believe that they need to be considered separately to gain an understanding the underlying profitability of the trading businesses.

For further details, please refer to note 3.

Going concern

The condensed consolidated interim financial information has been prepared on a going concern basis.

Taking into account the support of certain of the Company's significant shareholders, of which the largest is represented on the Board, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason, the Directors consider that the adoption of the going concern basis is appropriate.

2. Segment reporting

Following the sale of the Connect business on 19 October 2021 there is only one segment remaining, the IDE Group Manage business.

Unaudited for the six-month period ended 30 June 2021

 
                           IDE Group Manage   IDE Group Connect   Nimoveri Limited   Central & inter-segment     Total 
                                     GBP000              GBP000             GBP000                    GBP000    GBP000 
------------------------  -----------------  ------------------  -----------------  ------------------------  -------- 
 
 Revenue                              7,807               6,313                 39                     (250)    13,909 
 Cost of Sales                      (4,248)             (5,843)                (9)                       250   (9,850) 
------------------------  -----------------  ------------------  -----------------  ------------------------  -------- 
 Gross profit                         3,559                 470                 30                         -     4,059 
 Other operating income                  27                  82                  -                         -       109 
 Administrative expenses            (1,564)             (1,943)               (14)                   (1,369)   (4,890) 
 Operating profit/ 
  (loss)                              2,022             (1,391)                 16                   (1,369)     (722) 
------------------------  -----------------  ------------------  -----------------  ------------------------  -------- 
 Analysed as: 
 Adjusted EBITDA*                     2,398               (616)                 16                     (337)     1,453 
 Depreciation                         (288)               (257)                  -                         -     (545) 
 Amortisation of 
  intangible assets                       -               (416)                  -                   (1,029)   (1,445) 
 Exceptional costs                     (88)                (98)                  -                       (3)     (189) 
 Profit on sale of 
  assets                                  -                   4                  -                         -         4 
------------------------  -----------------  ------------------  -----------------  ------------------------  -------- 
 Net financial costs                    (4)                (10)                  -                     (769)     (783) 
------------------------  -----------------  ------------------  -----------------  ------------------------  -------- 
 Profit/(Loss) before 
  taxation                            2,018             (1,401)                 16                   (2,138)   (1,505) 
 Tax on loss on ordinary 
  activities                          (260)                 500                  -                         -       240 
------------------------  -----------------  ------------------  -----------------  ------------------------  -------- 
 Profit/(Loss) for the 
  period after taxation               1,758               (901)                 16                   (2,138)   (1,265) 
------------------------  -----------------  ------------------  -----------------  ------------------------  -------- 
 

* Earnings from continuing operations before net finance costs, tax, depreciation, amortisation, goodwill impairment, share based payments and exceptional costs

Administrative expenses are not allocated against operating segments in the Group's internal reporting. The statement of financial position is not allocated between the operating segments in the Group's internal reporting.

3. Exceptional costs

In accordance with the Group's policy in respect of exceptional costs, the following charges were incurred in relation to continuing operations:

 
                                        Unaudited     Unaudited        Audited 
                                       Six months    Six months           Year 
                                            ended         ended          ended 
                                          30 June       30 June    31 December 
                                             2022          2021           2021 
                                           GBP000        GBP000         GBP000 
----------------------------------   ------------  ------------  ------------- 
 Restructuring and reorganisation 
  costs                                        36           189            433 
-----------------------------------  ------------  ------------  ------------- 
 
 

4. Earnings per share from continuing operations

The calculation of basic and diluted loss per share is based on results from continuing operations attributable to ordinary shareholders divided by the weighted average number of ordinary shares in issue during the year. The weighted average number of shares for the purpose of calculating the basic and diluted measures in the reporting periods is the same. This is because the outstanding options would have the effect of reducing the loss per ordinary share and therefore would be anti-dilutive under the terms of IAS 33. Basic and diluted unaudited loss per share from continuing operations are calculated as follows:

 
                                           Unaudited     Unaudited        Audited 
                                          Six months    Six months           Year 
                                               ended         ended          ended 
                                             30 June       30 June    31 December 
                                                2022          2021           2021 
                                              GBP000        GBP000         GBP000 
-----------------------------------   --------------  ------------  ------------- 
 
 Loss attributable to shareholders             (713)       (1,265)        (1,976) 
 
 Weighted average number of 
  shares                                 496,702,792   413,413,639    461,185,527 
 Diluted weighted average number 
  of shares                              496,702,792   413,413,639    461,185,527 
------------------------------------  --------------  ------------  ------------- 
 Basic loss per share (pence)                 (0.14)        (0.31)         (0.43) 
 Diluted loss per share (pence)               (0.14)        (0.31)         (0.43) 
 
 

5. Borrowings

In January 2019 the Company issued GBP5.3 million of secured loan notes with a six-year term and a 12% coupon which is compounded, rolled up and payable at the end of the term ("Loan Notes"). In February and March 2019, a further GBP4.7 million in total of Loan Notes were issued. The Loan Notes carry an arrangement fee of 2.5 per cent., payable at the end of the term, and an exit fee of 2.5 per cent., also payable at the end of the term.

In December 2019 the Company issued an additional GBP1.5 million of Loan Notes (with the same terms as those issued in the first quarter of the year).

The Loan Notes are held at amortised cost using the effective interest rate method. The effective interest rate for the Loan Notes has been calculated to be 18%.

On 1 June 2020, Group completed the acquisition of Nimoveri Holdings Limited, a small cloud and IT services business, for a total consideration of GBP0.2 million; GBP0.1 million paid in cash on completion and the issue of GBP0.1 million 0% Loan Notes by IDE Group Limited, a Group company (the "Nimoveri Loan Notes"). The Nimoveri Loan Notes are secured over the assets of Nimoveri Holdings Limited and redeemable on 31 December 2021.

The Company issued a further loan note ("Loan Note 2025") net of expenses for proceeds of GBP1m on 1 December 2021. The terms of the loan were that the rate of interest is 1.5% per month if repaid by 31 January 2022. 2.5% per month if repaid by 28 February 2022 and 3% per month if repaid by 31 March 2022. If not repaid by 31 March 2022 the amount due at that date including fees (GBP1.1875m) is then subject to interest at 20.4% per annum compound. The maturity date is 23 December 2025. At the year-end management intended to settle the loan notes before 31 March 2022 and accordingly, they are classified as current liabilities.

 
                     Unaudited                       Audited 
                    Six months      Unaudited           Year 
                         ended     Six months          ended 
                       30 June          ended    31 December 
                          2022        30 June           2021 
                        GBP000           2021         GBP000 
                                       GBP000 
-------------   --------------  -------------  ------------- 
 Non-Current 
 Loan Notes             18,422         14,656         17,027 
--------------  --------------  -------------  ------------- 
 
 Current 
 Loan Notes                  -            100            100 
--------------  --------------  -------------  ------------- 
 

6. Convertible Loan Notes

On 21 August 2018, as part of a wider fundraising, the Company issued GBP2.55 million of unsecured loan notes, which have a term of 5 years and a zero per cent coupon ("CLNs"). The CLNs can be converted into new ordinary shares in the capital of IDE at a price of 2.5 pence per share. Conversion is at the option of the holder at any time during the 5-year term. At the end of the term, if the holder has not chosen to convert the CLNs, the CLNs will be settled with a cash repayment. At issue, the CLNs had a fair value of GBP2.54 million, split into an equity component (GBP0.96 million) and a debt component (GBP1.58 million).

*On 7 June 2021 GBP2,397,519 of the unsecured convertible loan notes issued in August 2018 were converted into 95,900,760 Ordinary shares of 2.5p each, at a conversion price of 2.5p per share. GBP2.1 million has been posted against the Consolidated Loan Notes debt component in June 2021 and the balance of GBP0.3 million set off against the Equity reserve.

 
                                            Unaudited                       Audited 
                                           Six months      Unaudited           Year 
                                                ended     Six months          ended 
                                              30 June          ended    31 December 
                                                 2022        30 June           2021 
                                               GBP000           2021         GBP000 
                                                              GBP000 
--------------------------------  ---  --------------  -------------  ------------- 
 
 Balance at beginning of period                   131          1,983          1,983 
 Issue of new shares*                               -        (2,082)        (1,932) 
  Interest unwound                                  6             99             80 
 
 Total                                            137              -            131 
-------------------------------------  --------------  -------------  ------------- 
 
 

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