TIDMIMTK
RNS Number : 8413S
Imaginatik PLC
28 November 2011
28 November 2011
Imaginatik Plc
("Imaginatik" or the "Company")
Interim Results
Imaginatik plc (AIM: IMTK.L), a leading provider of enterprise
innovation services including a range of technology products and
consultancy, announces its unaudited interim results for the half
year ended 30 September 2011.
Summary
-- Results for the period in line with management's expectations:
o Revenues increased by 10% to GBP1.62 million (2010: GBP1.48
million)
o Administrative expenses (before share-based payments) reduced
by 28% to GBP1.90 million (2010: GBP2.65 million)
o Operating loss before share-based payments reduced to GBP0.43
million (2010: GBP1.33 million)
o R&D tax credit GBP0.11 million (2010: GBPnil)
o Cash at period end of GBP0.24 million (30 September 2010:
GBP0.56 million)
-- Successful repositioning of Imaginatik as a full service Innovation Company
-- New customers signed in the period include Cotton, Inc., Cementos Argos and Lubrizol
-- High level of customer renewals in the period
-- Over GBP2.8 million of revenue visibility as at 30 September
2011 (GBP2.0 million as at 30 September 2010) underpinning a
substantial part of annual fixed overheads
-- August 2011 Open Offer and associated Placing raised GBP1.04 million (before expenses)
Matt Cooper, Executive Chairman, commented, "Following the
repositioning exercise carried out over the last 12 months together
with further investment in our technology and a focus on expanding
our consultancy expertise, Imaginatik now occupies a unique
position in the innovation management market. Imaginatik is the
only company with the proven capability to support the full
spectrum of enterprise innovation, from idea generation through to
implementation. We continue to assist some of the world's leading
organisations, such as the World Bank, Pfizer and Kellogg, create
and implement sustainable innovation programmes and we are steadily
adding to that roster. While the increase in revenues is modest, we
believe that this, combined with the significant drop in costs,
signifies a tangible turnaround in the fortunes of Imaginatik given
the current economic climate and we therefore look forward with
confidence."
For further information please contact:
Imaginatik plc Tel: 020 7917
2975
Matt Cooper, Executive Chairman / Shawn
Taylor, CFO
Northland Capital Partners Limited Tel: 020 7796
8800
Gavin Burnell / Edward Hutton
Threadneedle Communications Tel: 020 7653
9850
Caroline Evans-Jones / Hilary Millar
About Imaginatik
Imaginatik provides Innovation and Idea management solutions
comprised of consultancy, enterprise software and program
management to deliver innovation results to companies such as The
World Bank, NYSE, The Chubb Group of Insurance Companies, Boeing,
Pfizer, Goodyear, Paccar, Kellogg and Cargill. Few companies
possess the internal capability to consistently generate fresh
ideas, identify those worth pursuing and reliably transform them
into real, value-enhancing assets. This is Imaginatik's area of
expertise.
Imaginatik is a public company whose shares are traded on the
AIM market of the London Stock Exchange (LSE:IMTK.L) and is a World
Economic Forum Technology Pioneer with offices in Boston, MA, and
Winchester, UK. For more information visit www.imaginatik.com.
Executive Chairman's Statement
Operational Review
I am pleased to report that Imaginatik has achieved good
progress in the first half of the year. We have successfully
implemented the strategy launched and described at the time of the
Interim Results last year. Building upon our powerful technology
platform and innovation consultancy expertise, we are on the path
to becoming the strategic innovation partner of choice to some of
the world's most successful enterprises. Software alone does not
achieve the sustainable results which enterprises are seeking. We
believe Imaginatik now occupies a unique position in its market as
the only company with the proven ability to support sustainable
enterprise innovation programmes through a combination of
technology, consultancy and a repeatable process.
The results of the implementation of this strategy are
three-fold. Not only does it significantly strengthen our
competitive positioning, through having a more effective offering
than the pure software suppliers, it significantly assists client
retention and increases our revenue visibility as a result of the
longer term nature of these contracts.
We have been pleased with the levels of growth achieved in the
period. We added 3 new customers (2010: 2), maintained renewal
rates at over 90% by customer number, and upsold additional
projects to existing customers. This strong level of renewals and
upsell follows the investment of considerable effort into
developing and maintaining stronger relationships with our existing
clients ensuring they use Innovation Central to its full
capability. We have a strong pipeline of additional sales
opportunities as we move into the second half of the year.
We continue to carefully monitor our level of expenditure while
still investing for the future. Administrative expenses have been
reduced significantly in the last 12 months, ensuring a closer
alignment between expected annual recurring revenues and the annual
cost base.
We were delighted to have secured an additional GBP1.04 million
of funding from investors via a share placing and open offer in
August 2011, demonstrating their faith in the business, and we are
grateful for their ongoing support.
Product Development
Our continuing goal is to help make the best companies even
better by helping them develop a deep competency in innovation. In
order to achieve that goal, we are continuing to expand our
offering of products and services so that we can be a complete
innovation partner to our clients. We believe we have made a great
deal of progress towards that goal in the first half of the year,
launching Discovery Suite and Results Engine as part of the
extended Innovation Central platform.
Discovery Suite helps shape the front end of the innovation
process by helping executives formulate their innovation strategy.
Discovery Suite was developed in conjunction with innovation guru
Rowan Gibson and is based on his "Four Lenses of Innovation" method
for generating business insights and innovation opportunities.
These opportunities are then fed into the pipeline of Innovation
Central challenges.
Results Engine brings structure to the back end of the
innovation process by helping companies measure innovation
outcomes, track projects and increase transparency between all
stakeholders in the innovation process - executives, community
members, and project teams. Results Engine extends Innovation
Central so that ideas can seamlessly graduate from the Ideation and
Decisions stages of our methodology into projects that generate a
genuine return on investment. Results Engine is currently being
used by a number of our clients and is generating significant
interest from other existing customers.
Innovation Central continues to evolve with various new
refinements incorporated this year, many of which have been based
on customer feedback. The latest version of Innovation Central, to
be released later this year, has been a collaboration with several
of our customers, incorporating some of their suggestions into the
core platform. This collaborative approach helps ensure their
continued partnership and high levels of satisfaction.
We partnered with customers on two co-development projects
during the period. The World Bank assisted in the development of a
platform to support open innovation contests, helping them
collaborate and generate ideas with member countries and the
public. Altria helped us take Ask the Audience, our approach to
crowdsourced Q&A forums, to the next level to help position
this product for a multi-division roll-out.
We have a series of ongoing projects including revamping our
evaluation tools to make the crucial Decisions stage fast, flexible
and efficient. Advanced methods of evaluation will give innovation
sponsors additional confidence in their ability to identify top
concepts and invest additional resources in their development.
We are also building a template capability that will allow
customers to save Innovation Central challenges and easily re-use
them later. This will also enable Imaginatik engineers and
consultants to build scalable, repeatable solutions - or playbooks
- as extensions of our core platform. Playbooks will solve specific
customer problems or support ongoing business processes, for
example capital budget allocation and after action reviews.
The next major project we plan to undertake will be to tap into
the wealth of knowledge our customers are accumulating within their
programmes. We will expand our data mining capabilities to allow
clients to better identify trends, and insights related to their
innovation activities and continue to increase our integration
capabilities with other software packages such as Share Point and
Jive.
Consultancy Development
One of the foundations of our successful transformation to a
full service Innovation company has been the expertise of our
innovation consultants. Imaginatik has been a leader in the field
of Idea Management for over a decade and through that time has
worked directly with many of the world's largest and most
successful companies to help them innovate. We remain committed to
sharing those experiences and knowledge of best practice with our
customers to help ensure their success.
We are now in the process of hiring a Head of Consulting to head
up the group and continue the development of this important element
of the business. We have developed a stable base of additional
third party consultants to assist our core in-house team of
consultants on a variable cost basis.
Financial Review
Total revenue for the half year ended 30 September 2011
increased by 10% to GBP1.62 million (2010: GBP1.48 million). During
the year, 18% of revenue was generated from up-selling our software
and consultancy services into existing customers, 29% from selling
into new clients, and 53% from recurring business (2010: 28%: 23%:
49% respectively). We added 3 new customers on annual contracts
during the period (2010: 2).
The US continues to be our core market and the percentage of
revenues received from the region grew in the period to 98%
(2010:90%) with the remaining 2% made up from the Rest of the World
(2010: 10%).
The current level of revenue visibility, being revenue which is
either under contract or is reasonably expected to renew over the
12 months to 30 September 2012, stands at approximately GBP2.8
million (GBP2.0 million at 30 September 2010). This increase in
visibility is the result of the steadying of the client base, the
signing of several new clients on annual contracts and the fact
that several clients that had previously signed multi-year
contracts are expected to renew once again in the next 12
months.
We continued to invest in our software platform in the year,
upgrading and adding new functionality to improve our
competitiveness. In the period we invested gross GBP0.25 million
(2010: GBP0.28 million). We were pleased to have been awarded an
R&D tax credit by HMRC of GBP0.11 million reflecting the
pioneering nature of the research and development work we
undertake. This is reflected in the taxation line in the income
statement.
Administrative expenses were significantly lower during the
period than the comparable half year due to actions taken in the
last 12 months, reducing by 28% from GBP2.65 million to GBP1.90
million (in each case before share-based payments) This has largely
been achieved through lower head count but also reduced expenditure
on marketing activities deemed to be unnecessary in a period where
many leads are now generated through web activity and
referrals.
Over the last year the Company has undertaken litigation against
its former CEO, in connection with a number of actions which he has
undertaken which have been against the interests of the Company.
The Company issued proceedings against him in the High Court in
respect of actions for defamation and for breach of confidence. On
13 June 2011, pursuant to an Order of Sharp J in the High Court,
judgment was awarded in favour of the Company in respect of each of
these actions and on the terms sought by the Company.
On 24 November 2011, before Tugendhat J in the High Court, there
was a hearing to decide the issues of costs, damages and other
remedies. Tugendhat J will deliver his decision in due course and
the Company will update investors at that time.
Operating losses before share-based payments reduced
significantly to GBP0.43 million (2010: GBP1.33 million) as a
function of the increase in revenues and substantially reduced cost
base.
Cash outflows from operating activities narrowed to GBP1.20
million in the first six months of the year (2010: GBP1.70
million). While the Company's cash flow requires close monitoring,
we have a strong book of receivables and approximately 75% of the
Company's expected annual renewals by value occur in the second
half of the year, which is expected to have a further beneficial
impact on the Company's cash flows in that period. Cash outflows
from operating activities in the second half of last year were
GBP0.12 million.
On 26 August 2011, the Company announced that it had raised
GBP1.04 million (before expenses) by way of a Placing and Open
Offer, providing the Company with funds for working capital and to
facilitate further growth, including the addition of further sales
and consulting capacity in the US.
Board Appointments
On 3 October 2011, we announced the appointment to the Board of
three new Non-Executive Directors, Brian Hays, Simon Charles and
David Gammon. All three bring a valuable set of skills and
experience to the Company. Brian has many years of industry
expertise and experience with growth businesses, Simon has a
comprehensive understanding of the public company environment and
corporate governance, and David has a strong technology focus,
having had extensive involvement in high growth technology
businesses in particular. On the same date, Paul Morland resigned
from the Board as a Non-Executive Director and we thank him for his
valued contribution to the Company over the last five years and we
wish him well in his career.
Imaginatik now benefits from a highly experienced and committed
Board of Directors which is focused on maintaining a stable
operating environment while implementing the growth strategy.
Outlook
We are encouraged by the progress that we have made in the first
half of the year, in what remains a challenging economic climate.
We believe that our ability to provide strategic innovation
consultancy alongside a powerful software offering means we have a
unique position in the innovation market.
The increase in revenue visibility to approximately GBP2.8
million and the reduced level of overheads, combine with a growing
pipeline of opportunities for the second half of the year to give
us confidence in the future.
Matt Cooper
Executive Chairman
28 November 2011
Condensed unaudited consolidated interim statement of
Comprehensive Income
For the six months ended 30 September 2011
Unaudited Unaudited Audited
6 months 6 months Year to
to 30 to 30 31 March
Sept Sept 2010 2011
2011
Note GBP'000 GBP'000 GBP'000
Revenue 1,624 1,481 2,847
Cost of sales (158) (166) (341)
--------- ---------- ----------------
Gross profit 1,466 1,315 2,506
Administrative expenses (1,958) (2,734) (4,917)
Operating loss before financing
and taxation (492) (1,419) (2,411)
Operating loss before share-based
payments (434) (1,334) (2,277)
Share-based payments (58) (85) (134)
---------------------------------- ---- --------- ---------- ----------------
Finance income/(costs) - - (5)
Loss on ordinary activities
before taxation (492) (1,419) (2,416)
Taxation 108 - -
--------- ---------- ----------------
Loss on ordinary activities
for the period (384) (1,419) (2,416)
--------- ---------- ----------------
Basic and diluted loss per share
(p) 4 (0.15) (0.76) (1.26)
--------- ---------- ----------------
All amounts are attributable to equity holders of the parent,
and all arise from continuing operations. No amounts were
recognised directly in equity, and therefore no separate statement
of other comprehensive income has been presented.
Condensed unaudited consolidated interim Statement of Financial
Position
As at 30 September 2011
Unaudited Unaudited Audited
30 Sept 30 Sept 31 March
2011 2010 2011
Note GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Property, plant and equipment 70 125 100
Intangible assets 73 134 104
Trade & other receivables - 52 -
--------- --------- ---------
143 311 204
Current assets
Trade and other receivables 1,624 1,776 983
Cash and cash equivalents 244 563 469
1,868 2,339 1,452
--------- --------- ---------
Total assets 2,011 2,650 1,656
--------- --------- ---------
EQUITY AND LIABILITIES
Equity
Issued capital 6 267 133 135
Share premium 6 5,539 4,651 4,691
Other reserves 6 (4,924) (3,650) (4,598)
--------- --------- ---------
Total equity attributable to equity
holders of the parent 882 1,134 228
--------- --------- ---------
Liabilities
Non-current liabilities
Interest-bearing loans and borrowings - - -
Other payables - - 24
--------- --------- ---------
Total non-current liabilities - - 24
--------- --------- ---------
Current liabilities
Interest-bearing loans and borrowings - - -
Trade and other payables 1,129 1,516 1,404
1,129 1,516 1,404
--------- --------- ---------
Total liabilities 1,129 1,516 1,428
--------- --------- ---------
Total equity and liabilities 2,011 2,650 1,656
--------- --------- ---------
Condensed unaudited consolidated interim Statement of Cash
Flows
For the six months ended 30 September 2011
Unaudited Unaudited Audited
6 months 6 months Year to
to 30 Sept to 30 Sept 31 March
Note 2011 2010 2011
GBP'000 GBP'000 GBP'000
Cash outflows from operating activities 7 (1,204) (1,694) (1,819)
----------- ----------- ---------
Cash flows from investing activities
Acquisition of property, plant and
equipment (1) (10) (20)
Acquisition of intangible fixed assets - (5) (5)
----------- ----------- ---------
Net cash outflow from investing activities (1) (15) (25)
----------- ----------- ---------
Cash flows from financing activities
Net proceeds from the issue of share
capital 980 766 807
Repayment of borrowings - - -
----------- ----------- ---------
Net cash inflow from financing activities 980 766 807
----------- ----------- ---------
Net (decrease)/increase in cash and
cash equivalents (225) (943) (1,037)
Cash and cash equivalents at start
of period 469 1,506 1,506
----------- ----------- ---------
Cash and cash equivalents at end
of period 244 563 469
----------- ----------- ---------
Condensed unaudited consolidated interim Statement of Changes in
Equity
For the six months ended 30 September 2011
Share Share Share option Retained
capital premium reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 April 2010 99 3,919 520 (2,836) 1,702
Loss for the period - - - (1,419) (1,419)
Share-based payments - - 85 - 85
Shares issued 34 732 - - 766
--------- --------- ------------- ---------- --------
34 732 85 (1,419) (568)
--------- --------- ------------- ---------- --------
Balance at 30 September
2010 133 4,651 605 (4,255) 1,134
--------- --------- ------------- ---------- --------
Loss for the period - - - (997) (997)
Share-based payments - - 49 - 49
Shares issued 2 40 - - 42
--------- --------- ------------- ---------- --------
2 40 49 (997) (906)
Balance at 31 March 2011 135 4,691 654 (5,252) 228
--------- --------- ------------- ---------- --------
Loss for the period - - - (384) (384)
Share-based payments - - 58 - 58
Shares issued 132 848 - - 980
--------- --------- ------------- ---------- --------
132 848 58 (384) 654
Balance at 30 September
2011 267 5,539 712 (5,636) 882
--------- --------- ------------- ---------- --------
Notes to the unaudited condensed consolidated interim financial
statements
1. Background
Imaginatik plc (the "Company") is a company domiciled in the
United Kingdom. The unaudited condensed consolidated interim
financial statements of the Company for the six months ended 30
September 2011 comprise the Company and its subsidiary (together
referred to as the "Group").
The condensed consolidated interim financial statements were
authorised for issuance on 28 November 2011.
The interim financial statements are not statutory accounts for
the purposes of section 435 of the Companies Act 2006. The
comparative figures for the year ended 31 March 2011 are not the
Company's statutory accounts for that financial year. The financial
information for the year ended 31 March 2011 is based on the
statutory accounts for the financial year ended 31 March 2011
restated for the effects of the adoption of International Financial
Reporting Standards in issue and adopted for use in the European
Union ("IFRSs"). Those accounts have been reported on by the
Company's auditors and delivered to the Registrar of Companies. The
report of the auditors was (i) unqualified, (ii) did not include a
reference to any matters to which the auditors drew attention by
way of emphasis without qualifying their report, and (iii) did not
contain a statement under section 498(2) or (3) of the Companies
Act 2006.
2. Basis of preparation
The financial statements are presented in pounds sterling,
rounded to the nearest thousand, unless stated otherwise. They are
prepared on the historical cost basis.
These interim financial statements have been prepared using
accounting policies based on IFRS as adopted by the European Union
(including IAS and interpretations issued by the International
Financial Reporting Interpretations Committee ("IFRIC")) that were
applicable for the full reporting year. These remain subject to
ongoing amendment and/or interpretation and are therefore subject
to possible change. Consequently, information contained in these
interim financial statements may need updating for any subsequent
amendments to IFRS, or for any new standards that the Group may
elect to adopt early.
The accounting policies have been applied consistently
throughout the Group for purposes of these condensed unaudited
consolidated interim financial statements.
3. Barter transactions
During the period barter transactions totalling GBPnil (6 months
ended 30 September 2010: GBP6,051; year ended 31 March 2011:
GBP5,900) were entered into. No profit or loss was recorded on
these transactions.
4. Loss per share
Basic loss per share
The calculation of basic loss per share for the period ended 30
September 2011 was based on the loss attributable to ordinary
shareholders of GBP384,000 (period ended 30 September 2010:
GBP1,419,000; year ended 31 March 2011: GBP2,415,000) and a
weighted average number of ordinary shares outstanding during the
period ended 30 September 2011 of 256,097,842 (period ended 30
September 2010: 184,738,713; year ended 31 March 2011:
191,649,286).
Diluted loss per share
The options in place during the periods ended 30 September 2011
and 30 September 2010 and during the year ended 31 March 2011 are
considered to have an anti-dilutive effect. Therefore, since the
loss per share would not be diluted by an exercise of options, the
calculation of the basic and diluted loss per share is the same for
each of the three periods.
5. Segment reporting
Segment information is presented in the condensed consolidated
interim financial statements in respect of the Group's geographical
segments, which are the primary basis of segment reporting. The
geographical segment reporting format reflects the Group's
management and internal reporting structure.
Segment results include items directly attributable to a segment
as well as those that can be allocated on a reasonable basis.
Geographical segments
The Group's operations comprise the following main geographical
segments, determined on the basis of the location of customers:
Unaudited Unaudited Audited
6 months 6 months Year to
to 30 Sept to 30 Sept 31 March
2011 2010 2011
GBP'000 GBP'000
Segment revenue
United States of America 1,590 1,337 2,734
Rest of the world 34 144 113
1,624 1,481 2,847
----------- ----------- ---------
Segment loss
United States of America (163) (752) (2,318)
Rest of the world (221) (667) (98)
----------- ----------- ---------
(384) (1,419) (2,416)
----------- ----------- ---------
Segment total assets
United States of America 1,517 1,886 1,236
Rest of the world 494 764 420
2,011 2,650 1,656
----------- ----------- ---------
6. Share Capital and Reserves
Unaudited Unaudited Audited
6 months 6 months Year to
to 30 Sept to 30 Sept 31 March
2011 2010 2011
GBP'000 GBP'000 GBP'000
Share Capital
At the beginning of the period 135 99 99
Shares issued 132 34 36
----------- ----------- ---------
At the end of the period 267 133 135
----------- ----------- ---------
Share premium
At the beginning of the period 4,691 3,919 3,919
Shares issued in the period, net of
expenses 848 732 772
----------- ----------- ---------
At the end of the period 5,539 4,651 4,691
----------- ----------- ---------
Other reserves
At the beginning of the period (4,598) (2,316) (2,316)
Loss for the period (384) (1,419) (2,416)
Share-based payments 58 85 134
----------- ----------- ---------
At the end of the period (4,924) (3,650) (4,598)
----------- ----------- ---------
7. Cash flows from operating activities
Unaudited Unaudited Audited
6 months 6 months Year to
to 30 Sept to 30 Sept 31 March
2011 2010 2011
GBP'000 GBP'000 GBP'000
Operating loss (492) (1,419) (2,410)
Depreciation of tangible fixed assets 31 37 72
Amortisation of intangible fixed assets 31 31 62
Net interest expense - - (5)
Share-based payments 58 85 134
Corporation tax repayment 108 - -
(Increase) in trade and other receivables (641) (231) 613
(Decrease) / increase in payables (299) (197) (285)
----------- ----------- ---------
Net cash from operating activities (1,204) (1,694) (1,819)
----------- ----------- ---------
8. Availability of announcement
Copies of this announcement will be available from the Company's
offices at 6 Wessex Way, Colden Common, Winchester SO21 1WP and
from its website, www.imaginatik.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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