TIDMDSG

RNS Number : 2890X

Dillistone Group PLC

25 April 2023

25 April 2023

Dillistone Group Plc

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

Final Results

& Investor Presentation

Dillistone Group Plc, the AIM quoted supplier of software for the international recruitment industry , is pleased to announce its audited final results for the 12 months ended 31 December 2022.

Highlights

   --    Revenue increased by 2% to GBP5 .699m. First revenue growth since 2016. 
   --    Adjusted(*) loss before tax decreased to GBP0.453m (2021: GBP0.687m) - an improvement of 34%. 
   --    Adjusted(*) EBITDA increased to GBP0.949m (2021: GBP0.747m) - an improvement of 27%. 

-- Recurring revenues represented 89% (2021: 89%) of Group revenue, which covers administration expenses (excluding depreciation and amortisation).

   --    Total Annual Contract Value (TACV) up 4% to GBP4.99m (2021: GBP4.79m) 
   --    Order book increased by 3% year on year. 
   --    Adjusted operating cash from operating activities 45% up at GBP1.189m (2021: GBP0.819m). 

-- Cash at period end of GBP0.433m. The Board does not expect the Group to require additional funding.

Commenting on the results and prospects, Giles Fearnley, Non-Executive Chairman, said:

"I am pleased to report continued progress for 2022, delivering financial performance in line with expectations while paying down debt, delivering sector leading customer service and continuing to invest for the future."

"The underlying business has improved. The Group has increased revenue, decreased adjusted loss and improved cash generation. We have delivered on our strategy and present results in line with market expectations."

"The Board is pleased to report a positive start to the year. We expect to see year on year growth in recurring revenue across both our Executive Search and Contingency sectors in H1 and remains confident of achieving market expectations for the full year."

Definitions:

   *    EBITDA adjusted for furlough support 
   *   Operating cash adjusted for Government support received 

* (Loss) before tax adjusted for furlough, Government support and exceptional costs associated with Covid

* TACV is the total annual recurring revenue of all signed contracts, whether invoiced and included in

deferred revenue or still to be               deployed and/or not yet invoiced 

See note 7 for a reconciliation to adjusted figures

Investor Presentation: 3pm on Tuesday 25 April 2023

Jason Starr, Chief Executive, and Ian Mackin, Finance Director, will hold an investor presentation to cover the results and prospects at 3pm on Tuesday 25 April 2023.

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

Questions can be submitted pre-event to dillistone@walbrookpr.com or in real time during the presentation via the "Ask a Question" function.

Mello Investor Conference, Chiswick, London - Tuesday 23 and Wednesday 24 May 2023

Dillistone announces that it expects to present at the Mello investor conference in Chiswick, London, on Tuesday 23 and Wednesday 24 May 2023. Investors wishing to attend can find more details at www.melloevents.com .

Annual Report and Accounts - The final results announcement can be downloaded from the Company's website (www.dillistonegroup.com). Copies of the Annual Report and Accounts (in addition to the notice of the Annual General Meeting) will be sent to shareholders by 19 May 2023 for approval at the Annual General Meeting to be held on 13 June 2023.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

Enquiries:

 
 Dillistone Group 
  Plc 
 Giles Fearnley                    Chairman               Via Walbrook PR 
 Jason Starr                       Chief Executive 
                                    Officer 
 Ian Mackin                        Finance Director 
 
 WH Ireland Limited (Nominated adviser) 
                                   Managing Director, 
 Chris Fielding                     Corporate Finance     020 7220 1650 
 
 Walbrook PR 
 Tom Cooper / Joe                  tom.cooper@walbrookpr.com 
  Walker 
                                   020 7933 8780 
                                   0797 122 1972 
 
 
 

Notes to Editors:

Dillistone Group Plc is a leader in the supply and support of software and services to the recruitment industry. Dillistone operates through the Ikiru People ( www.IkiruPeople.com ) brand .

The Group develops, markets and supports the Talentis, FileFinder, Infinity, Mid-Office, ISV and GatedTalent products.

Dillistone was admitted to AIM, a market operated by the London Stock Exchange plc, in June 2006.

Learn about our products:

   Talentis Software:                   https://www.talentis.global/recruitment-software/ 
   Voyager Software:                  https://www.voyagersoftware.com 
   GatedTalent Services:            https://www.talentis.global/optimization-services/ 

CHAIRMAN'S STATEMENT

I am pleased to report continued progress in 2022, delivering financial performance in line with expectations while paying down debt, delivering sector leading customer service and continuing to invest for the future.

The underlying business has improved. The Group has increased revenue, decreased adjusted loss and improved cash generation. We have delivered on our strategy and present results in line with market expectations.

The Group achieved its first annual total and recurring revenue growth since 2016. Total revenue for the year was up 2% to GBP5.699m, with recurring revenue increasing 1% to GBP5.051m.

For the purposes of obtaining true comparatives, we focus on measures which are adjusted to remove items of Government support, acquisition related or exceptional items, to better understand the underlying business.

Excluding furlough and Government support received in 2021, adjusted EBITDA increased by 27% to GBP0.949m (FY2021: GBP0.747m). The adjusted operating loss before acquisition related, furlough and other items fell by 58% to (GBP0.156m) (FY2021: (GBP0.375m)).

Adjusted net cash from operating activities, excluding Government support, is up 45% at GBP1,189m (FY2021: GBP0.819m) with a similarly adjusted net change in cash and cash equivalents up 58% at (GBP0.362m) (FY2021: (GBP0.853m)).

Dividends

The Group is not recommending a final dividend in respect of the year to 31 December 2022 (2021: nil).

Staff

I and the Board would like to pay tribute to our employees across the Group, acknowledging their commitment and contribution in facing the challenges of the last few years. It is as a result of their combined efforts that we are heading into 2023 with optimism.

Corporate governance

It is the Board's duty to ensure that the Group is managed for the long-term benefit of all stakeholders.

We welcomed Ian Mackin to the Group Board as Finance Director in June, stepping up from Financial Controller. Ian replaced Joanne Curd who resigned to further pursue her voluntary works.

Outlook

Current economic conditions are challenging for the recruitment industry and as a result we have seen a number of our existing clients reduce headcount - and therefore licences - and new client signups are typically of lower value than anticipated.

Generally speaking, any economic slowdown is likely to impact our executive search clients more than our contingency ones. However, despite this environment, we are pleased to see that in Q1 2023, our next generation executive search software, Talentis was our best performing product in terms of both number of new client sales and TACV growth. Individual order values remain low, partly reflecting the state of the market, but the Group expects this to change as the economy recovers.

The Board is pleased to report a positive start to the year. We expect to see year on year growth in recurring revenue across both our Executive Search and Contingency sectors in H1 and remain confident of achieving market expectations for the full year.

Giles Fearnley

Non-Executive Chairman

CEO's Review

Dillistone Group Plc is a global leader in the supply of solutions and services to the recruitment sector worldwide, working with executive search, contingent recruiting and in-house staffing teams in over 1,200 organisations.

We split our products into two groups - products primarily targeting contingency recruiters (largely, but not exclusively, in the United Kingdom) and products targeting executive search firms and in-house executive search teams across the globe.

Contingency recruitment products:

Our products serving this sector are:

-- Infinity, which is an established recruitment CRM used primarily by agencies in the UK, but also with users in Asia and Australia. It enables recruitment businesses to manage prospects, clients, candidates and jobs in one place and offers deep integration to Office365 and other recruitment industry complementary solutions. It is one of the few solutions in the UK market with extensive functionality for permanent, contract and temporary jobs all in one system;

-- ISV.Online, which is an online skills testing product used by both recruitment agencies and corporate organisations and has a strong international footprint. It allows recruiters and HR professionals to test individuals using our extensive portfolio of existing tests or to create their own unique tests to meet their requirements; and

-- Mid-Office, which is a comprehensive pay & bill solution that allows recruitment businesses and back office service providers to process timesheets and bridges the gap between paying workers and invoicing clients. It can be used standalone or integrated to other recruitment systems including our Infinity product.

Contingency review:

-- We delivered strong growth in the recurring revenue associated with this part of our business, generating a combined GBP3.44m in recurring revenue, (FY2021 GBP3.04m revenue) an increase of 13%.

-- In December 2021 we announced a major contract win. We are pleased to report this was successfully implemented in H1 2022 and the client is now an active reference site.

-- Summer 2022 saw us win a similarly sized contract and this was successfully implemented in H2. Once again, the client - who switched from a direct competitor - is now an active reference site for us.

Since year end, we have announced what has the potential to be our largest contract win yet, and we expect to deliver a large part of this contract in 2023.The year saw us discontinue our legacy VDQ product. During the year we were able to successfully migrate over half of our VDQ customers to the Infinity platform. Infinity offers greater functionality and is priced at a premium to VDQ. As a result, recurring revenue from this group of clients grew by 96% over the year.

Infinity is used by permanent, contract and temporary recruitment agencies. However, an increasing percentage of our new contract wins are from firms that are focussed, at least in part on the temporary recruitment sector, validating our decision to focus our efforts on this sector of the market.

Many of our Infinity clients also use our Mid-Office product to facilitate payments to temporary staff. We have also continued to develop this product and expect to deliver a significant upgrade to this product during the second quarter.

Our ISV.online skill testing product continues to generate meaningful revenue, with half of the UK's largest 10 recruiters using the platform.

Executive Search products:

Our primary products in the Executive Search sector are:

   --    FileFinder, which is an established CRM product with thousands of users Worldwide. 

-- GatedTalent, which is a service that helps recruiters source candidates and candidates find jobs and;

-- Talentis, which is our latest product targeting executive recruiters and is used for both candidate research and sourcing and as an executive recruiting CRM.

Executive search review:

We are pleased to report that we have arrested the decline in revenue for executive search products. Having seen revenue for these products fall 24% in 2021, revenue fell by 10% in 2022 totalling GBP2.258m compared to GBP2.512m in 2021. However, performance in H2 improved to a percentage fall of only 6% compared to the same period in 2021. This trend of improvement is continuing in 2023, with Q1 revenue above that of Q1 2022.

The largest contribution to our executive search revenues came from FileFinder, our established executive search CRM product. The Group has invested in architectural improvements for the platform over recent years and this has improved the user experience while also allowing us to deliver the platform in a more cost effective manner. This, combined with our decision to make our new Talentis platform available at no charge to most FileFinder clients, has certainly improved our ability to retain clients on this product.

GatedTalent is used by a number of FileFinder clients to support GDPR compliance, whilst also offering recruiters candidate sourcing functionality. Further revenue is generated from an array of B2C products. The product continues to make a financial contribution in its own right and remains cash generative.

Talentis is our next generation executive search software platform, providing a combination of both candidate sourcing and project management / CRM functionality. Since launch in Q1 2021, recurring revenue has grown every quarter, and this trend continued into Q1 2023.

The Group believes that the Talentis platform is unique in its scope, which is reflected by the global span of its user base. Paying clients can now be found on every continent apart from Antarctica, with North America becoming the fastest growing region in recent months.

We are continuing to develop this, with significant enhancements expected in Q2-Q3.

The Board expects Talentis revenue growth to continue and remains very excited about the potential for the product.

Delivering more, with less.

All of our Group products are developed, sold and supported by our Ikiru People operating business. Our drive to improve efficiency has seen us reduce headcount by 37% from its peak, while maintaining what we believe to be market leading levels of customer service. Indeed, the Ikiru People TrustPilot score of 4.8 (at 24/04/2023 based on 731 reviews) is, at the time of writing, unmatched by any of our direct competitors. This speaks volumes for the performance of our team, and I would like to place on record my appreciation for the effort and aptitude they show for delivering exceptional service to our clients.

KPIs and financial performance

As is noted in the financial review, the Group's operational performance has improved significantly in recent years, although the extent of the improvement has been masked somewhat in 2022 by the impact of Government Covid support received in 2021 but not repeated in 2022.

 
                             FY22       FY21     % Move   Success measure used by 
                            GBP'000    GBP'000             management 
 Total revenue              5,699      5,599       2%     Year on Year Improvement 
                          ---------  ---------  -------  ------------------------- 
 Recurring revenue          5,051      5,009       1%     Year on Year Improvement 
                          ---------  ---------  -------  ------------------------- 
 Adjusted EBITDA *           949        747       27%     Year on Year Improvement 
                          ---------  ---------  -------  ------------------------- 
 Adjusted Operating 
  Cash **                   1,189       819       45%     Year on Year Improvement 
                          ---------  ---------  -------  ------------------------- 
 Adjusted (loss) before 
  tax ***                   (453)      (687)      34%     Year on Year Improvement 
                          ---------  ---------  -------  ------------------------- 
 
   *     EBITDA adjusted for furlough support 
   **   Operating cash adjusted for Government support received 

*** (Loss) before tax adjusted for furlough, Government support and exceptional costs associated with Covid

Strategy

Over recent years, we have reduced the size of our product range while broadly maintaining consistent levels of product development expenditure. In 2022, product development equated to 17.4% of revenues (2021: 17.6%) and we believe that the Group is now increasingly seeing the benefit of this. While the economic climate is challenging, our ability to win ever larger contracts in our contingent product group, while ending the decline in our executive search revenue, validates our decisions. We intend to maintain our current focus, and 2023 will see us deliver significant improvements to users of both our product groups.

Jason Starr

Chief Executive Officer

Financial Review

Summary

The Group saw progress on the financial turnaround of the business.

   --    Total revenue and recurring revenue grew for the first time since 2016 
   --    Adjusted EBITDA, excluding furlough support, increased by 27% 

-- Adjusted operating loss, before furlough, acquisition, reorganisation and other items, down by 58%

   --    Adjusted net cash from operating activities increased by 45% 

This was achieved whilst maintaining the level of investment in our products.

Revenue

Group revenue increased by 2% to GBP5.699m from GBP5.599m in FY2021

 
 Revenue by type          FY 2022   FY 2021   % Change 
                          GBP'000   GBP'000 
-----------------------  --------  --------  --------- 
 Recurring revenue         5,051     5,009      0.8% 
 Non-recurring revenue      488       427      14.3% 
 Third party revenue        160       163      (1.8%) 
-----------------------  --------  --------  --------- 
                           5,699     5,599      1.8% 
=======================  ========  ========  ========= 
 Recurring revenue %        89%       89%        - 
 

Gross profit margin

The gross margin reduced to 86% from 88%. Going forward, the management team is focused on driving improvements to gross margin through revenue growth, whilst maintaining a stable cost base. With Talentis having our highest marginal profit percentage, growth in Talentis should help drive improvements to gross margin.

Adjusted EBITDA*

The adjusted EBITDA* increased by 27% to GBP0.949m from GBP0.747m in FY2021. This resulted in a higher EBITDA margin of 16.7%, compared to 13.3% in FY2021, reflecting the Group's leaner headcount profile, whilst maintaining our customer service.

Operating profit/(loss) and profit/(loss) before tax

The operating loss, before acquisition related, reorganisation and other items, increased by 11% to stand at (GBP0.156m) from (GBP0.140m) in FY2021. However, in 2021, the Group received GBP0.235m in furlough support not received in 2022. Taking this into account, performance improved greatly with a 58% reduction in loss to (GBP0.156m) from (GBP0.375m) in FY2021.

Inclusive of acquisition related, reorganisation and other items, the operating loss increased to (GBP0.319m) from (GBP0.199m) in FY2021.

The loss before tax increased to (GBP0.453m) from (GBP0.298m) in FY2021. Using a like for like measure, excluding Government and furlough support of GBP0.395m, the comparative figure for FY2021 is (0.693m).

Taxation

The net tax credit for the year GBP0.270m (FY 2021: GBP0.302m).

Balance sheet

The Group's net assets decreased slightly to GBP3.223m (FY 2021: GBP3.382m)

Trade and other receivables decreased slightly to GBP0.608m (FY 2021: GBP0.615m). Trade and other payables also decreased slightly to GBP2.341m (FY2021: GBP2.347m).

R&D development

The Group capitalised GBP1.007m in development costs in the year (FY 2021: GBP0.987m) as the business continued its commitment to developing its products. Amortisation of development costs was GBP0.980m (FY 2021: GBP0.946m)

Financing

The Group continues to pay down its debt. Following the repayment of the June 2019 loan in June 2021, repayment of the Government CBIL loan received in June 2020 is now well underway. This loan of GBP1.5m is repayable over 6 years, with monthly repayments having commenced in July 2021.

As a result, bank borrowings at 31 December 2022 were GBP1.050m (2021: GBP1.350m). The Group also has a convertible loan of GBP0.400m (2021: GBP0.400m), which will not be repaid until the CBIL loan has been repaid.

Cashflow

Net cash from normalised operating activities (before government support) increased 45% to GBP1.189m (FY2021: GBP0.819m). Adjusted net change in cash before government support improved by 58% to (GBP0.362m) (FY2021: (GBP0.853m)). The Group finished the year with cash funds of GBP0.433m (2021: GBP0.764m).

 
 Summarised cashflow                                 FY 2022   FY 2021 
                                                     GBP'000   GBP'000 
 Adjusted net cash from normalised operating 
  activities                                          1,189      819 
 Investing Activities - net                          (1,022)   (1,008) 
 Financial Activities - net                           (529)     (664) 
                                                    --------  -------- 
 Adjusted Net change in cash and cash equivalents     (362)     (853) 
                                                    --------  -------- 
 Adjustment for Government Support                      -        332 
                                                    --------  -------- 
 Net change in cash and cash equivalents              (362)     (521) 
                                                    --------  -------- 
 Cash and cash equivalents at beginning of 
  year                                                 764      1,291 
                                                    --------  -------- 
 Effect of foreign exchange rate changes               31        (6) 
                                                    --------  -------- 
 Cash and cash equivalents at 31(st) December          433       764 
                                                    ========  ======== 
 

Going forward, the Board and management teams are focused on increasing revenues whilst improving the Group's profitability and cash generation.

Ian Mackin

Finance Director

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEARED 31 DECEMBER 2022

 
                                                   2022       2021 
                                        Note    GBP'000    GBP'000 
 
 Revenue                                 5        5,699      5,599 
 
 Cost of sales                                    (816)      (685) 
-------------------------------------  -----  ---------  --------- 
 
 Gross profit                                     4,883      4,914 
 
 Administrative expenses                        (5,202)    (5,113) 
-------------------------------------  -----  ---------  --------- 
 Operating loss                                   (319)      (199) 
-------------------------------------  -----  ---------  --------- 
 Adjusted operating (loss) 
  before acquisition related, 
  reorganisation and other 
  items                                  4        (156)      (140) 
 Acquisition related, reorganisation 
  and other items                        7        (163)       (59) 
-------------------------------------  -----  ---------  --------- 
 Operating (loss)                                 (319)      (199) 
-------------------------------------  -----  ---------  --------- 
 
 Financial cost                                   (134)       (99) 
 
 (Loss) before tax                                (453)      (298) 
 
 Tax income                              8          270        302 
 
 (Loss)/profit for the year                       (183)          4 
 
 Other comprehensive income/(loss) 
 Items that will be reclassified 
  subsequently to profit and 
  loss: 
 
 Currency translation differences                     7          4 
 
 Total comprehensive (loss)/profit 
  for the year                                    (176)          8 
-------------------------------------  -----  ---------  --------- 
 

Earnings per share

 
 Basic      9   (0.93p)          0.02p 
 Diluted    9   (0.93p)          0.02p 
---------      --------  ------------- 
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEARED 31 DECEMBER 2022

 
 
 
 
                                                           Convertible 
                            Share       Share     Merger          loan    Retained      Share      Foreign 
                          capital     premium    reserve       reserve    earnings    options     exchange     Total 
                          GBP'000     GBP'000    GBP'000       GBP'000     GBP'000    GBP'000      GBP'000   GBP'000 
---------------------  ----------  ----------  ---------  ------------  ----------  ---------  -----------  -------- 
 Balance at 1 January 
  2021                        983       1,631        365            14         208        110           59     3,370 
 Comprehensive 
  income 
 Profit for the 
  year                          -           -          -             -           4          -            -         4 
 
 Other comprehensive 
  income 
 Exchange differences 
  on translation 
  of overseas 
  operations                    -           -          -             -           -          -            4         4 
---------------------  ----------  ----------  ---------  ------------  ----------  ---------  -----------  -------- 
 Total comprehensive 
  loss                          -           -          -             -           4          -            4         8 
 
 Transactions with 
  owners 
 Share option charge            -           -          -                        50       (46)            -         4 
---------------------  ----------  ----------  ---------  ------------  ----------  ---------  -----------  -------- 
 Total transactions 
  with owners                   -           -          -             -          50       (46)            -         4 
 
 Balance at 31 
  December 2021               983       1,631        365            14         262         64           63     3,382 
---------------------  ----------  ----------  ---------  ------------  ----------  ---------  -----------  -------- 
 
 Comprehensive 
  income 
 Loss for the year              -           -          -             -       (183)          -            -     (183) 
 
 Other comprehensive 
  income 
 Exchange differences 
  on translation 
  of overseas 
  operations                    -           -          -             -           -          -            7         7 
 
 Total comprehensive 
  loss                          -           -          -             -       (183)          -            7     (176) 
 
 Transactions with 
  owners 
 Share option charge            -           -          -                        14          3            -        17 
 
 Total transactions 
  with owners                   -           -          -             -          14          3            -        17 
 
 Balance at 31 
  December 2022               983       1,631        365            14          93         67           70     3,223 
---------------------  ----------  ----------  ---------  ------------  ----------  ---------  -----------  -------- 
 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2022

 
 
                                                    Group 
                                                2022         2021 
                                             GBP'000      GBP'000 
-----------------------------------  ----  ---------   ----------      ----- 
 ASSETS 
 Non-current assets 
 Goodwill                                      3,415        3,415 
 Other intangible assets                       2,990        3,142 
 Property, plant and equipment                    25           25 
 Right of use assets                             498          592 
 Investments                                       -            - 
-----------------------------------  ----  ---------   ----------      ----- 
 Total non-current assets                      6,928        7,174 
-----------------------------------  ----  ---------   ----------      ----- 
 Current assets 
 Trade and other receivables                     608          615 
 Current tax receivable                           72           29 
 Cash and cash equivalents                       433          764 
-----------------------------------  ----  ---------   ----------      ----- 
 Total current assets                          1,113        1,408 
-----------------------------------  ----  ---------   ----------      ----- 
 Total assets                                  8,041        8,582 
-----------------------------------  ----  ---------   ----------      ----- 
 EQUITY AND LIABILITIES 
 Equity attributable to owners 
  of the parent 
 Share capital                                   983          983 
 Share premium                                 1,631        1,631 
 Merger reserve                                  365          365 
 Convertible loan reserve                         14           14 
 Retained earnings                                93          262 
 Share option reserve                             67           64 
 Foreign exchange reserve                         70           63 
-----------------------------------  ----  ---------   ----------      ----- 
 Total equity                                  3,223        3,382 
-----------------------------------  ----  ---------   ----------      ----- 
 Liabilities 
 Non-current liabilities 
 Trade and other payables                        241          238 
 Lease liabilities                               483          560 
 Borrowings                                    1,150        1,450 
 Deferred tax liability                          226          210 
-----------------------------------  ----  ---------   ----------      ----- 
 Total non-current liabilities                 2,100        2,458 
-----------------------------------  ----  ---------   ----------      ----- 
 Current liabilities 
 Trade and other payables                      2,341        2,347 
 Lease liabilities                                77           95 
 Borrowings                                      300          300 
-----------------------------------  ----  ---------   ----------      ----- 
 Total current liabilities                     2,717        2,742 
-----------------------------------  ----  ---------   ----------      ----- 
 Total liabilities                             4,805        5,200 
-----------------------------------  ----  ---------   ----------      ----- 
 Total liabilities and equity                  8,041        8,582 
-----------------------------------  ----  ---------   ----------      ----- 
 
 

CONSOLIDATED CASH FLOW STATEMENT

FOR THE YEARED 31 DECEMBER 2022

 
                                                    For            For            For            For 
                                               the year       the year       the year       the year 
                                                  ended          ended          ended          ended 
                                            31 December    31 December    31 December    31 December 
                                                   2022           2022           2021           2021 
 Operating activities                           GBP'000        GBP'000        GBP'000        GBP'000 
----------------------------------------  -------------  -------------  -------------  ------------- 
 
 Loss before tax                                  (453)                         (298) 
 Adjustment for 
 Financial cost                                     134                            99 
 Depreciation and amortisation                    1,268                         1,335 
 Share option expense                                17                             3 
 Foreign exchange adjustments arising 
  from operations                                  (24)                            10 
 Operating cash flows before movement 
  in working capital                                942                         1,149 
 Decrease in receivables                             20                           268 
 Decrease in payables                              (16)                         (639) 
 Taxation refunded                                  243                           373 
----------------------------------------  -------------  -------------  -------------  ------------- 
 Net cash generated from operating 
  activities                                                     1,189                         1,151 
 
 Investing activities 
 
 Purchases of property, plant and 
 equipment                                         (15)                          (21) 
 Investment in development costs                (1,007)                         (987) 
 Net cash used in investing activities                         (1,022)                       (1,008) 
 
 Financing activities 
 
 Interest paid                                    (134)                          (99) 
 Bank loan repayments made                        (300)                         (461) 
 Lease payments made                               (95)                         (144) 
 Net cash (used in)/generated from 
  financing activities                                           (529)                         (664) 
----------------------------------------  -------------  -------------  -------------  ------------- 
 Net (decrease)/increase in cash and cash 
  equivalents                                                    (362)                         (521) 
 Cash and cash equivalents at beginning 
  of the year                                                      764                         1,291 
 Effect of foreign exchange rate 
  changes                                                           31                           (6) 
----------------------------------------  -------------  -------------  -------------  ------------- 
 Cash and cash equivalents at end 
  of year                                                          433                           764 
----------------------------------------  -------------  -------------  -------------  ------------- 
 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARED 31 DECEMBER 2021

   1.         Publication of non-statutory accounts 

In accordance with section 435 of the Companies Act 2006, the Directors advise that the financial information set out in this announcement does not constitute the Group's statutory financial statements for the year ended 31 December 2022 or 2021, but is derived from these financial statements. The financial statements for the year ended 31 December 2021 have been audited and filed with the Registrar of Companies. The financial statements for the year ended 31 December 2022 have been prepared in accordance with UK-adopted international accounting standards, IFRIC Interpretations and the Companies Act 2006. The financial statements for the year ended 31 December 2021 have been audited and will be filed with the Registrar of Companies following the Company's Annual General Meeting. The Independent Auditors Report on the Group's statutory financial statements for the years ended 31 December 2022 and 2021 were unqualified and did not draw attention to any matters by way of emphasis and did not contain statements under Section 498(2) or (3) of the Companies Act 2006.

   2.         Basis of preparation 

The preliminary announcement is extracted from the consolidated financial statements of the Group. The financial statements of the subsidiaries are prepared for the same reporting date as the parent company. Consistent accounting policies are applied for like transactions and events in similar circumstances.

All intra-group balances, transactions, income and expenses and profits and losses resulting from intra-group transactions that are recognised in assets or liabilities are eliminated in full.

The Group's business activities and financial position, together with the factors likely to affect its future development, performance and position have been taken into account in considering the Group's adoption of the going concern basis. Together with the financial statements, notes, net current liability position and cash flows for the year ended 31 December 2022. The Group prepare 3 year budgets and cash flow forecasts to ensure that the Group can meet its liabilities as they fall due.

The Group meets its day to day working capital requirements through its cash balance. It has in place a GBP1.5m CBIL loan, secured in June 2020, repayable over 6 years with capital repayments commencing from July 2021. Although the Group has an overdraft facility, this was not utilised for the entirety of 2022. The Group's forecasts, taking into account the Board's future expectations of the Group's performance, indicate that there is sufficient headroom within its CBIL loan facility. Compliance with the CBIL covenant has been considered and based on management expectations and actions, that could practically be taken, the directors do not consider any reasonable risk to arise from this.

The cash flow forecasts have been stress tested reviewing assumptions around new and existing business with growth and renewal rates being reduced. A reverse stress test was also prepared to review what reduction in revenue would be necessary to breach overdraft limits in 2023.

As at the date of this report, the directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements.

   3.         Accounting policies 

This preliminary announcement has been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year to 31 December 2021.

   4.         Reconciliation of adjusted profits to consolidated statement of comprehensive income 
 
                         Note                   Acquisition                             Acquisition 
                                                   related,                                 related 
                                             reorganisation                          reorganisation 
                                 Adjusted         and other              Adjusted         and other 
                                  profits             costs               profits             costs 
                                   2022               2022*       2022       2021             2021*       2021 
 
                                 GBP'000            GBP'000    GBP'000    GBP'000           GBP'000    GBP'000 
----------------------  ------  ---------  ----------------  ---------  ---------  ----------------  --------- 
 
 Revenue                            5,699                 -      5,699      5,599                 -      5,599 
 
 Cost of sales                      (816)                 -      (816)      (685)                 -      (685) 
------------------------------  ---------  ----------------  ---------  ---------  ----------------  --------- 
 
 Gross profit                       4,883                 -      4,883      4,914                 -      4,914 
 
 Administrative 
  expenses                        (5,039)             (163)    (5,202)    (5,054)              (59)    (5,113) 
------------------------------  ---------  ----------------  ---------  ---------  ----------------  --------- 
 Operating (loss)                   (156)             (163)      (319)      (140)              (59)      (199) 
 
 Financial income                       -                 -          -          -                 -          - 
 Financial cost                     (134)                 -      (134)       (99)                 -       (99) 
 (Loss) before 
  tax                               (290)             (163)      (453)      (239)              (59)      (298) 
 
 Tax income                           239                31        270        287                15        302 
------------------------------  ---------  ----------------  ---------  ---------  ----------------  --------- 
 (Loss)/Profit 
  for the year                       (51)             (132)      (183)         48              (44)          4 
 Other comprehensive 
  loss net of tax: 
 Currency translation 
  differences                           7                 -          7          4                 -          4 
 Total comprehensive 
  (Loss)/Profit 
  for the year net 
  of tax                             (44)             (132)      (176)         52              (44)          8 
------------------------------  ---------  ----------------  ---------  ---------  ----------------  --------- 
 

Earnings per share

 
 Basic      9   (0.26p)   -   (0.93p)   0.24p   -   0.02p 
 Diluted    9   (0.26p)   -   (0.93p)   0.24p   -   0.02p 
---------      --------      --------  ------      ------ 
 

* See note 9

   5.         Segment reporting 
 
 Divisional segments                       Ikiru                          Ikiru 
                                          People   Central     Total     People   Central     Total 
                                            2022      2022      2022       2021      2021      2021 
                                         GBP'000   GBP'000   GBP'000    GBP'000   GBP'000   GBP'000 
--------------------------------------  --------  --------  --------   --------  --------  -------- 
 Segment revenue                           5,699         -     5,699      5,599         -     5,599 
--------------------------------------  --------  --------  --------   --------  --------  -------- 
 Segment EBITDA                              905        44       949        953        29       982 
 Depreciation and amortisation 
  expense                                (1,105)         -   (1,105)    (1,122)         -   (1,122) 
--------------------------------------  --------  --------  --------   --------  --------  -------- 
 Segment result before reorganisation 
  and other costs                          (200)        44     (156)      (169)        29     (140) 
 Reorganisation and other 
  costs                                        -         -         -        154         -       154 
--------------------------------------  --------  --------  --------   --------  --------  -------- 
 Segment result                            (200)        44     (156)       (15)        29        14 
 Acquisition related amortisation              -     (163)     (163)          -     (213)     (213) 
--------------------------------------  --------  --------  --------   --------  --------  -------- 
 Operating (loss)                          (200)     (119)     (319)       (15)     (184)     (199) 
 Loan interest/ lease interest              (31)     (103)     (134)       (35)      (64)      (99) 
--------------------------------------  --------  --------  --------   --------  --------  -------- 
 Loss before tax                                               (453)                          (298) 
 Income tax income                                               270                            302 
--------------------------------------  --------  --------  --------   --------  --------  -------- 
 (Loss)/profit for the year                                    (183)                              4 
--------------------------------------  --------  --------  --------   --------  --------  -------- 
 
 Additions of non-current 
  assets                                   1,022               1,022      1,028               1,028 
--------------------------------------  --------  --------  --------   --------  --------  -------- 
 
 

Revenue by Business Segment

The following table provides an analysis of the Group's revenue by product area for the 12 months of the financial year.

 
                                                        2022            2021 
                                                     GBP'000         GBP'000 
 ---------------------------   ------------------  ---------  ---  --------- 
 Recurring income                                      5,051           5,009 
 Non-recurring income                                    488             427 
 Third party revenues                                    160             163 
                                                       5,699           5,599 
 ---------------------------   ------------------  ---------  ---  --------- 
 
 

In the table above 'Recurring income' represents all income recognised over time, whereas 'Non-recurring income' and 'Third party revenues' represent all income recognised at a point in time.

Recurring income includes all support services, SaaS and hosting income and revenue on perpetual licenses with mandatory support contracts deferred under IFRS 15. Non-recurring income includes sales of new licenses which do not require a support contract, and income derived from installing licences including training, installation and data translation. Third party revenues arise from the sale of third party software.

It is not possible to allocate assets and additions between recurring, non-recurring income and third party revenue. No customer represented more than 10% of revenue of the Group in 2022 or 2021.

Revenue by Business Sector

The following table provides an analysis of the Group's revenue by market sector.

 
                         2022       2021       2020       2019 
                      GBP'000    GBP'000    GBP'000    GBP'000 
------------------  ---------  ---------  ---------  --------- 
 Contingent             3,441      3,087      3,005      3,795 
 Executive Search       2,258      2,512      3,327      4,232 
------------------  ---------  ---------  ---------  --------- 
                        5,699      5,599      6,332      8,027 
------------------  ---------  ---------  ---------  --------- 
 

The above table includes years going back to 2019 when revenue was last reported split between Dillistone, Voyager and GatedTalent segments for comparative purposes.

For the purposes of the 2019 comparative:

   --    Contingent encompasses the Voyager segment 
   --    Executive Search encompasses both Dillistone and GatedTalent segments. 
   6.         Geographical analysis 

The following table provides an estimated of the Group's revenue by geographic market based on the Customers' country. This is provided for information only as the Board does not review the performance of the business from a geographical viewpoint.

Revenue

 
                                                         2022             2021 
                                                      GBP'000          GBP'000 
 ---------------------------   -------------------  ---------      ----------- 
 UK                                                     4,148          3,933 
 Europe                                                   663            762 
 Americas                                                 518            526 
 Australia                                                147            140 
 ROW                                                      223            238 
------------------------   --------------------     ---------      --------- 
                                                        5,699          5,599 
------------------------   --------------------     ---------      --------- 
 
 

Non-current assets by geographical location

 
                                                         2022            2021 
                                                      GBP'000         GBP'000 
 ----------------------------   ------------------  ---------  ---  --------- 
 UK                                                     6,927           7,169 
 US                                                         -               1 
 Australia                                                  1               4 
                                                    ---------  ---  --------- 
                                                        6,928           7,174 
 ----------------------------   ------------------  ---------  ---  --------- 
 
 
   7.         Acquisition related, reorganisation and other costs 
 
                                                   2022       2021 
                                                GBP'000    GBP'000 
  ------------------------------------------  ---------  --------- 
 Included within administrative expenses: 
 Reorganisation and other costs                       -          6 
 US government loan (Payment Protection 
  Program)                                            -      (154) 
 Australian government grant                          -        (6) 
 Amortisation of acquisition intangibles            163        213 
                                                    163         59 
  ------------------------------------------  ---------  --------- 
 

Reorganisation and other costs include severance payments and loss of office payments.

Below are reconciliations utilising the items above related to covid, including furlough payments, to adjusted measures used to better illustrate the underlying business performance.

 
                            2022       2021 
                         GBP'000    GBP'000 
  -------------------  ---------  --------- 
 EBITDA                      949        982 
 Furlough Payments             -      (235) 
 Adjusted EBITDA             949        747 
---------------------  ---------  --------- 
 
 
                                                       2022       2021 
                                                    GBP'000    GBP'000 
  ----------------------------------------------  ---------  --------- 
 Adjusted operating (loss) before acquisition 
  related, reorganisation and other items             (156)      (140) 
 Furlough Payments                                        -      (235) 
------------------------------------------------  ---------  --------- 
 Readjusted operating (loss) before 
  acquisition related, reorganisation 
  and other items                                     (156)      (375) 
 Acquisition related, reorganisation 
  and other costs as above                            (163)       (59) 
 Adjust for: 
 Reorganisation and other costs                           -          6 
 US government loan (Payment Protection 
  Program)                                                -      (154) 
 Australian government grant                              -        (6) 
------------------------------------------------  ---------  --------- 
 Adjusted Operating (Loss)                            (319)      (588) 
 Financial Cost                                       (134)       (99) 
 Adjusted (Loss) Before Tax                           (453)      (687) 
------------------------------------------------  ---------  --------- 
 
   8.         Tax income 
 
 
                                                               2022           2021 
                                                            GBP'000        GBP'000 
--------------------------------------------  ----      -----------    ----------- 
 Current tax                                                  (139)           (96) 
 Prior year adjustment - current 
  tax                                                         (146)          (121) 
--------------------------------------------   -------  -----------    ----------- 
 Total current tax                                            (285)          (217) 
--------------------------------------------   -------  -----------    ----------- 
 
 Deferred tax                                                  (23)           (35) 
 Prior year adjustment - deferred 
  tax                                                            69           (60) 
 Deferred tax rate change from 19% 
  to 25% in 2021                                                  -             50 
 Deferred tax re acquisition intangibles                       (31)           (40) 
--------------------------------------------   -------  -----------    ----------- 
 Total deferred tax                                              15           (85) 
--------------------------------------------------      -----------    ----------- 
 Tax (income) for the year                                    (270)          (302) 
--------------------------------------------------      -----------    ----------- 
 
 
 
 
 
   Factors affecting the tax credit for 
   the year 
 Loss before tax                             (453)   (298) 
 UK rate of taxation                         19.0%   19.0% 
 Loss before tax multiplied by the UK 
  rate of taxation                            (86)    (57) 
 
 Effects of: 
 Overseas tax rates                              -     (6) 
 Impact of deferred tax not provided            17     (1) 
 Enhanced R&D relief                         (174)   (146) 
 Disallowed expenses                            11      18 
 Deferred tax rate change from 19% 
  to 25% in 2021                                 -      50 
 Rate difference between CT rate 
  and deferred tax rate                        (5)     (9) 
 Rate difference between CT rate 
  and rate of R&D repayment                     43      30 
 Prior year adjustments                       (76)   (181) 
------------------------------------------  ------  ------ 
 Tax (income)                                (270)   (302) 
------------------------------------------  ------  ------ 
 
   9.         Earnings per share 
 
                                          2022                            2021 
                                Using adjusted                  Using adjusted 
                                        profit           2022           profit         2021 
 
 Profit/(loss) attributable        (GBP51,000)   (GBP183,000)        GBP48,000     GBP4,000 
  to ordinary shareholders 
  (note 4) 
 Weighted average number 
  of shares                         19,668,021     19,668,021       19,668,021   19,668,021 
 Basic profit/(loss) per 
  share                               (0.26 p)       (0.93 p)           0.24 p       0.02 p 
-----------------------------  ---------------  -------------  ---------------  ----------- 
 Weighted average number 
  of shares after dilution          19,668,021     19,668,021       19,668,021   19,668,021 
 Fully diluted profit/(loss) 
  per share                           (0.26 p)       (0.93 p)           0.24 p       0.02 p 
-----------------------------  ---------------  -------------  ---------------  ----------- 
 

Reconciliation of basic to diluted average number of shares:

 
                                                             2022          2021 
 ----------------------------------------   --------  -----------   ----------- 
 
 Weighted average number of shares 
  (basic)                                              19,668,021    19,668,021 
 Effect of dilutive potential ordinary 
  shares - employee share plans                                 -             - 
----------------------------------------  ----  ----  -----------   ----------- 
 Weighted average number of shares 
  after dilution                                       19,668,021    19,670,013 
----------------------------------------------  ----  -----------   ----------- 
 
 

There are 476,510 (2021: 493,337) share options not included in the above calculations, as they are underwater or have been forfeited.

The impact of the convertible loan notes in the period is not dilutive and therefore does not impact the calculation of the fully diluted earnings per share.

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.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

FR FZGZDRDNGFZM

(END) Dow Jones Newswires

April 25, 2023 02:00 ET (06:00 GMT)

Dillistone (LSE:DSG)
Gráfico Histórico do Ativo
De Abr 2024 até Mai 2024 Click aqui para mais gráficos Dillistone.
Dillistone (LSE:DSG)
Gráfico Histórico do Ativo
De Mai 2023 até Mai 2024 Click aqui para mais gráficos Dillistone.