TIDMIMTK
RNS Number : 9980J
Imaginatik PLC
24 July 2013
24 July 2013
Imaginatik Plc
("Imaginatik" or the "Company")
Final Results
Imaginatik plc (AIM: IMTK.L), the world's first full service
innovation provider, announces its audited results for the year
ended 31 March 2013.
Imaginatik enables organisations to compete in the
information-rich, rapidly-changing 21(st) century by helping
clients build a sustainable innovation discipline.
Key points*
-- Revenue of GBP3.01m (2012 restated: GBP3.06m)
-- Loss after tax of GBP1.14m (2012 restated: GBP1.37m)
-- Increased deferred revenue, as of 31 March 2013: GBP2.45m (31
March 2012 restated: GBP2.20m)
-- Substantial number of new customer wins: 24 new customers on
either annual or pilot contracts (2012: 9)
-- Increasing proportion of customers taking consultancy
services alongside technology offering including Yorkshire Building
Society, Mead Johnson, Proctor & Gamble and The Society of
Petroleum Engineers
-- Placing in June 2012 raising, GBP1.0m before expenses
-- Post period end, additional placing raising GBP1.26m before expenses
*all financials for both 2013 and 2012 have been restated under
the Company's revised revenue recognition policy
Matt Cooper, Executive Chairman of Imaginatik, commented, "We
continue to make strong strategic progress, delivering on our
intention to evolve into a full service innovation company as
evidenced by the growing proportion of revenues generated via
consulting and the record number of new customers added in the
year.
"The new financial year has begun well, in line with
management's forecast for the year and we have a strong pipeline of
business opportunities, across the US and Europe. With an
experienced team of senior individuals, a growing customer base and
increasing level of industry recognition we are confident in the
future success of Imaginatik."
For further information please contact:
Imaginatik plc Tel: 01329
243243
Matt Cooper, Executive Chairman
/ Shawn Taylor, CFO
finnCap Tel: 0207
220 0500
Charlotte Stranner/ Victoria
Bates
Newgate Threadneedle Tel: 020 7653
9850
Caroline Evans-Jones / Hilary
Millar
About Imaginatik
Imaginatik(R) is the world's first full-service innovation
provider. We have 16 years of experience building innovation into a
sustainable competence at some of the world's largest and most
respected companies. Through a mix of consulting and advisory,
hands-on innovation projects and program management, and our
award-winning enterprise software platform, we help clients develop
innovation capability into a permanent competitive advantage.
Imaginatik is the trusted partner of leading organisations
including Blue Cross Blue Shield, CSC, Cargill, The World Bank,
Mayo Clinic, The Chubb Group of Insurance Companies, HCA, Dow
Chemical and Goodyear.
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
Fareham, UK. For more information visit www.imaginatik.com.
Chairman's Statement
We view innovation as an essential competence for any
organisation that is serious about developing its business.
Innovative companies are able to adapt more effectively in the
rapidly changing, information rich "Innovation Age". Furthermore,
innovation enables companies to launch new products, open new
markets and build a strong customer following, all of which allow
them to outperform their competitors.
This last year was one of transition for Imaginatik, which
witnessed our continued evolution from an idea management software
company to a full-service innovation provider. Over the year we
have strengthened our consulting team, developed an array of
consulting offerings and broadened the technology platform. We are
now in a position to help organisations develop both the "mind"
(innovation readiness) and the "body" (innovation execution) of the
enterprise innovation discipline - through an integrated mix of
consulting, advisory, software, and program management
offerings.
The number of new blue-chip companies turning to Imaginatik as
their innovation partner is endorsement of the progress made to
date. Twenty-four new clients were signed in the year under review,
substantially more than the previous year (2012: 9), comprising a
mixture of pure consulting engagements, pilot projects and 13 new
annual contracts. Over 50% of these contracts were for integrated
innovation services, incorporating high levels of consultancy, as
compared to approximately 25% in the prior year.
We continue to receive good feedback regarding our offering from
clients and opinion formers in the industry, which we see as
continued validation for our business model and were recently
placed top within our industry for completeness of product suite by
a leading industry research house. In contrast, the stand-alone
idea management players with purely technology offerings appear to
be struggling.
There is growing evidence of an increasingly active innovation
marketplace. Companies are trying to become more innovative and the
major opinion formers are dedicating increased resource to analysis
of the area. Collaboration technologies, such as ours, that enable
shared working and interaction both within organisations and
externally are also seeing growth validation, for example being
placed 4(th) in a list of top priorities for CTOs in a recent
report by Gartner.
A recent survey of more than 500 executives by Accenture
revealed that, while 18 percent of respondents rate innovation as
their top strategic priority and 67 percent depend strongly on
innovation for their long-term strategy success, more than half
feel they have a sluggish innovation process that requires
improvement. This embodies our opportunity, providing them with the
tools and support to build a sustained innovation competence.
Similar to where the CRM consulting and services industry was 20
years ago, we believe that while this is indeed only a nascent
market, it has the potential to be significant.
We were delighted by the positive response from institutional
shareholders, both existing and new, who provided us with
additional funds in June 2012 and May 2013, giving us the financial
resources to continue to build our business.
Our main focus in the year ahead will be on developing our brand
in the market and strengthening the sales function through hiring
high caliber individuals with the experience of selling complex
solutions that comprise a mix of technology and consulting to
senior clients.
I would like to thank all Imaginatik's staff, partners and
customers for their enthusiasm for our business and what we are
trying to achieve, and look forward to a successful year ahead.
Matt Cooper
Executive Chairman
24 July 2013
Operational and Financial Review
Introduction
Imaginatik continues to make excellent strides forward in the
development of its strong innovation consultancy offering, building
on its 16 years of experience in the innovation industry to develop
the means for companies to build their own, sustainable innovation
competence.
Imaginatik has built the skills, competencies and insights to
understand how innovation is best achieved at scale. It is not the
domain of a single individual, but rather best accomplished through
harnessing the collective wisdom of a company's employees,
customers and partners. Through a series of processes, innovation
can be learned, institutionalized and then repeated. Our mission is
to ensure innovation becomes embedded within our customers,
achieved through a mixture of sophisticated software and market
leading consultancy.
The focus in this year has been the transitioning of the
business away from a standalone technology company to an innovation
partner, providing both strategic and operational consulting
alongside our award-winning enterprise software platform,
Innovation Central.
We have continued to invest in all key areas of the business;
our consulting team, sales team and technology platform, while also
keeping a close control on costs. We secured an excellent level of
new business in the year, signing 24 new clients, although
unfortunately we also lost some stand-alone technology contracts
due to organisational changes within the customers. The net impact
of this was 17 new clients, providing a strong basis on which to
build future revenue growth.
Financial Review
These are the first set of results reported under a revised
revenue recognition policy, within which the Company now recognises
all Technology revenue on a monthly basis over the life of the
contract. Previously a large element of the contract value was
attributed to the software licence fee and was recognised in the
month the contract was signed. The selection of accounting policies
in respect of revenue involves a degree of judgement and having
reconsidered this critical judgement, the directors now consider it
more appropriate to recognise this revenue evenly over the term of
the contract. This revised policy has been applied retrospectively
as this results in these financial statements providing reliable
and more relevant information about the effects of transactions on
the Company's financial position and financial performance. The
revised policy provides more relevant and reliable information as
it is more reflective of the on-going relationship with clients
through the licence term.
The primary impacts of the policy on the financial years under
report have been as follows:
-- revenue for the year to 31 March 2013 has decreased by
GBP0.12m from GBP3.13m to GBP3.01m (2012: reduced from GBP3.45m to
GBP3.06m)
-- the loss after tax for the year to 31 March 2013 has
increased by an additional GBP0.12m from GBP1.02m to GBP1.14m
(2012: losses increased from GBP0.98m to GBP1.37m)
-- the amount of deferred revenue on the balance sheet has
increased by GBP1.58m to GBP2.45m (2012: increased from GBP0.74m to
GBP2.20m)
-- cumulative losses carried forward as at 31 March 2013 have
been increased by GBP1.58m from GBP7.26m to GBP8.84m (2012
increased from GBP6.24m to GBP7.70m)
-- EPS for 2012 decreased to GBP0.40 loss per share from GBP0.28 loss per share
-- EPS for 2013 decreased to GBP0.15 loss per share from GBP0.13 loss per share
All numbers in the section below for the years ended 31 March
2013 and 31 March 2012 have been restated under the revised revenue
recognition policy.
Total revenue for the year ended 31 March 2013 was GBP3.01m
(2012: GBP3.06m). During the period, 13% of gross contracted
revenue was from up-selling our software and consultancy services
into existing customers, 60% from selling into new clients, and 27%
from recurring business (2012: 33%: 14%: 53% respectively). We
secured a significantly higher level of new clients during the
period, adding 24 (2012: 9), with 13 of these being on annual
contracts (2012: 4).
The US continues to be our core market, with revenues generated
from the region in the period accounting for 88% of the total
(2012: 87%). We believe that the European market offers significant
opportunity. We have increased our presence in the region in the
year, and are encouraged by the progress achieved in the period and
believe there is significant scope for further growth.
The results for the year were impacted by a lower level of
renewals than achieved in previous periods, with 70% of the renewal
revenue available being renewed. This lower renewal rate was as a
result of a loss of several contracts in the year, where corporate
changes within the customer impacted their budgetary decisions. We
are not aware of being replaced by a competitor at any of these
companies. In recent years our levels of renewals were closer to
90% and a focus of the management team is on moving this figure
back to a higher level.
The Company has entered the new financial year with GBP1.5m of
contracts due for renewal over the next financial year to 31 March
2014, comprising 17 clients, with a further 13 clients, amounting
to GBP0.6m, with a renewal date beyond 31 March 2014.
Investment into our technology and software platform remains a
key focus of the Company, and we have continued to invest in the
development of our software platform, including improved
functionality, multi-lingual capabilities and connectors for
various corporate and social media platforms. During the period,
the Company capitalised internal development costs amounting to
GBP0.20m, (2012: GBPnil) as the Company now meets the necessary
accounting requirements set out in IAS38: Intangible assets.
We have once again secured an R&D tax credit from HMRC of
GBP0.13m (2012: GBP0.11m) reflecting the pioneering nature of the
research and development work we undertake. This is reflected in
the taxation line in the consolidated statement of comprehensive
income.
Administrative expenses for the period decreased by 6% to
GBP3.98m compared to the prior year, (2012: GBP4.21m) despite the
costs associated with the increase in the senior headcount as a
result of a continued focus within the business on cost
control.
Operating losses before share-based payments fell to GBP1.19m
(2012: GBP1.36m) and is a function of the marginally lower revenues
as well as the reduced cost base.
Cash outflows from operating activities narrowed to GBP1.07
million (2012: GBP1.15 million). These outflows were met through
institutional fundraisings, referred to below.
The Company completed a placing of new ordinary shares with
institutional and other investors in June 2012 raising GBP1.0m
before expenses. The Company completed a further placing of new
ordinary shares with institutional and other investors in May 2013,
post the period end, raising approximately GBP1.26m before
expenses. In addition, as part of the May 2013 funding round
certain of the Directors committed to being paid a proportion of
their salary in equity, subscribing for 262,400,000 new ordinary
shares, raising a further GBP164,000. In addition to providing
working capital, these funds have strengthened the financial
position of the Company, providing reassurance to existing and new
clients as to the Company's continued ability to provide and to
develop its software and range of consulting services. The funds
are being used to expand Imaginatik's sales and consulting capacity
in the US and European markets.
During the year the Company successfully concluded its
litigation against the former CEO, Mark Turrell. As we announced on
2 October 2012, following a High Court hearing, the Company and
Matt Cooper were granted an order over all of Mr. Turrell's 64.4
million shares in Imaginatik plc. Those shares have been split in
an equitable manner between the Company and Matt Cooper and as a
result the Company now has an order over 54.1 million shares, which
will be sold in an orderly manner in due course. The proceeds of
any such share sale will be retained for the benefit of the
Company.
Operational Review
We continue to believe Imaginatik's key differentiator is its
consulting offering, which showed very encouraging signs of
progress in the year, seeing a strong increase in gross contracted
revenue from consulting from GBP0.39m from 14 clients, to GBP0.60m
from 25 clients, of which GBP0.14m is deferred to future periods.
In total, we contracted with 24 new clients, substantially more
than the previous year (2012: 9), comprising a mixture of pure
consulting engagements, pilot projects and 13 new annual contracts.
Clients on new annual contracts include Yorkshire Building Society,
Lincoln Financial Group, Air Products and Chemicals, Inc. and
Chartis Global Services, Inc., and pilot engagements included Yale
University, MillerCoors and Merck & Co., Inc.. The net customer
gain during the period was 17 clients.
The general economy stills poses a challenge, as evidenced by
the clients lost in the year. However the majority of these
contracts were based on our 'old model' with no consultancy support
and we are confident that as an increasing number of our customers
rely on Imaginatik to provide them with full innovation
capabilities, we will increase the resilience of our client
base.
The Company has executed many successful programmes for clients
over the year, including the following:
Ladbrokes
-- A world leader in online betting and gaming with more than
2,700 retail shops in the UK, Ireland, Spain and Belgium.
-- The issue: previous ideation workshops were costly to
implement and slow - and in Ladbrokes' experience this process only
revealed small, incremental changes to the business. The difficulty
is in finding the breakthrough ideas that will translate into real,
measurable business value.
-- The goal: To understand the organisation's innovation
maturity then develop a process plan for rapidly collecting and
implementing new ideas.
-- Implementation: Imaginatik's Innovation Maturity Assessment
methodology was used with senior leaders, identifying a definition
and strategy for innovation that aligned with business goals of
improved customer service and online gaming capabilities. An online
challenge was launched with Imaginatik's Innovation Central
platform to engage more than 1,500 employees across the
company.
-- The results: Store-based employees are engaged in improving
the customer experience, and employee ideas shape a new shop design
and a repeatable process for the origination of breakthrough ideas
now exists within Ladbrokes.
With Imaginatik as its innovation partner, Ladbrokes has
transformed the way in which it engages employees. What began as an
ad hoc idea-gathering exercise is now a structured, repeatable
process for engaging front-line employees and managers. That input
will help to transform the way in which Ladbrokes serves its
customers in many years to come.
Windsor Foods
-- A world leading manufacturer and marketer of frozen ethnic foods and appetizers.
-- The goal: To create a culture of innovation that taps into
the best ideas of employees, suppliers and customers, while
providing a system that tracks innovation activities from discovery
through implementation.
-- The results: Cost savings of $500,000+ and new product
concepts estimated at $2m+ over 18 months while engaging customers
and suppliers in the innovation conversation.
Lynn Hall, SVP Revenue Team, Windsor Foods, commented,
"Imaginatik's Innovation Central software and best-practices
support have been instrumental to our success toward introducing
our entire organisation to processes and tools for a long-term
sustainable innovation culture."
Consultancy
Since early 2012, Imaginatik has been building out its
capabilities in this area, providing strong differentiation in the
innovation market. Most companies wish to be more innovative than
they are today, but are unsure of the precise steps to execute.
Through the additional consultancy modules developed during the
year, our consultancy offering now charts the path of innovation,
from initial assessment of an organisation's innovation
capabilities through to innovation programme planning and
implementation.
It is clear from independent industry research that Imaginatik's
consultancy offering is the most compelling in the market, with
Imaginatik's 'strong consulting offering' described as a 'clear
differentiator' by Forrester in a recent report.
Our consultancy successes have continued post the year end,
securing several new contracts in both the US and Europe. These
include projects with new clients such as SPX, a global industrial
equipment and manufacturing business, Ingredion, Inc., a US based
ingredients provider, and additional engagements with existing
clients Energizer, Cotton Inc., and food manufacturer Windsor Food.
These projects are in areas such as new product development,
placement, distribution and breakthrough strategies.
We have also recruited a Managing Consultant, Megan Shea, who
joins us from Innosight, with responsibility for new methods
development, business development and client delivery. Megan brings
the number of innovation consultants within Imaginatik to six and
joins Imaginatik with a wealth of experience in enterprise
innovation practices.
The focus in the year ahead will be on increasing the level of
engagement with existing and new clients and the further
development of our suite of consulting offerings, providing a
credible face for a new entrant into the area of innovation
consultancy.
Technology
Imaginatik's development focus is now on building innovative
additions to our platform, making the innovation process more
scalable and accessible. We now have a suite of products which
spans the innovation spectrum. Starting with Discovery Central,
which helps customers identify where to focus their innovation
efforts, deploying its 'four lens' methodology, through to the core
platform, Innovation Central, which enables companies to engage the
collective brain power of their employees, partners and customers
in innovation challenges, and finally to Results Engine which
allows organisations to manage and track projects resulting in
ideas being implemented.
During the year we developed multilingual capabilities within
the platform, which will be completed in the next few months. We
are also in the process of establishing connectors with some of the
fastest growing corporate platforms, such as SharePoint, Jive and
Yammer and continue to work on other social media integrations. All
of these initiatives are significantly increasing our addressable
market.
We have also spent time developing powerful analytic
technologies, enabling clients to identify unique ideas from
amongst the more mundane. This, we believe, increases our
competitiveness and helps make the product set stickier within our
client base.
Sales and Marketing
We have invested considerable effort over the year in building
out our sales and marketing team and their activities. Including
the senior members of the consulting team, we now have nine senior
sales executives based in the US and UK who are experienced in both
platform and consulting sales to large corporates. We are looking
to further expand our sales team in the year ahead with additional
senior executives.
Imaginatik's marketing efforts in the year focused on gaining
traction with increasingly senior business executives, in line with
our strategy of re-positioning the Imaginatik brand towards premium
innovation offerings targeted at the senior management level.
To support this go-to-market strategy, we increased and focused
our inbound and outbound lead-generation efforts. In 2013, we began
working with several telemarketing and appointment-setting firms
focused on contacting very senior executives, with encouraging
results to date. Furthermore, web and content marketing efforts
have been re-oriented to attract higher caliber decision makers. As
a first step in this direction, Imaginatik re-designed both the
graphical style and written content of www.imaginatik.com in the
first half of fiscal 2013.
PR has been a particular highlight of the year's marketing
efforts, with a new US-based PR firm delivering a marked increase
in media attention for Imaginatik. Imaginatik has received greater
attention from industry analysts including Forrester, Gartner, and
IDC. IDC and Forrester conducted the first comprehensive vendor
evaluations of Imaginatik's market place in 2013. Imaginatik has
placed very highly in both, published in May and July 2013,
respectively.
As part of Imaginatik's continuing effort to court senior-level
corporate innovation leaders, marketing places heavy emphasis on
live events and community organising. The Innovation Masters
Series, Imaginatik's popular webinar series, included 9 broadcasts
in fiscal 2013, with average live attendance well over 100 and
producing a continuous fresh stream of both new inbound leads and
returning guests. In addition, we have continued to organise our
marquee Innovation Leaders Forum ("ILF"), with successful ILFs in
Boston in both February 2012 and April 2013.
Looking forward, Imaginatik's marketing strategy is to continue
sharpening the firm's core messaging and thought leadership around
"Building the Innovation Discipline" - as both a hallmark of our
work as a firm, and a depiction of the macro "innovation" trend in
the marketplace. We will hold Innovation Roundtables in select
cities in the US and Europe, complemented by corresponding online
communities on Imaginatik.com, LinkedIn, and elsewhere.
Imaginatik's first annual Global State of Innovation survey and
thought leadership report will be published in early fiscal 2014,
followed by additional papers and bylined articles throughout the
year.
Board Changes
On 20 June 2012 the Company announced that Brian Hays,
Non-executive Director, had stepped down from the Board to pursue
other business interests. We are grateful for his guidance during
his time with Imaginatik and wish him well for the future.
Post the year end, the Company announced further changes to the
Board, reducing the number of board members from six to four, which
is considered more appropriate for a company of its size. The Board
now consists of Executive Chairman, Matt Cooper, COO and CFO Shawn
Taylor, Non-executive Directors, David Gammon and Simon Charles.
Current Directors, with Nick Goss (CTO) and Luis Solis (President,
Americas) both stepping down from their positions on the Board
while maintaining their full time roles on the management team of
the Company. The Board thanks them for their valuable contributions
to the Board and look forward to continuing to work together as a
strong operational management team as we seek to build on our
successes in the growing innovation services marketplace.
Going Concern
Net funds at 31 March 2013 was GBP136,000 (2012: GBP543,000).
Net cash outflows from operating activities has reduced to GBP1.07
million (2012: GBP1.12 million).
The Company completed a placing of new ordinary shares with
institutional and other investors in June 2012 raising GBP1.0
million before expenses. The Company completed a further placing of
new ordinary shares with institutional and other investors in May
2013, post the period end, raising approximately GBP1.26m before
expenses.
The directors have prepared detailed Group budgets and forecasts
for the period to March 2015. They have reviewed the Group's
budgets and forecasts for the coming 12 months, which have been
prepared with appropriate regard to the current macroeconomic
environment and the conditions in the principal markets served by
the Group. The directors have taken into consideration the Group's
net funds, the level of anticipated renewals by reviewing on a
customer by customer basis, forecast new and upsell revenues based
on sales in the pipeline and anticipated costs including the
ability to flex these cost should predicted revenues be lower than
forecast. As a result, at the time of approving the financial
statements, the Directors consider that the Company has sufficient
financial resources to continue in operational existence for the
foreseeable future and, therefore, that it is appropriate to adopt
the going concern basis in preparing these financial statements. As
with all business forecasts, the directors' statement cannot
guarantee that the going concern basis will remain appropriate
given the inherent uncertainty about future events.
Outlook
We continue to make strong strategic progress, delivering on our
intention to evolve into a full service innovation company as
evidenced by the growing proportion of revenues generated via
consulting and the record number of new customers added in the
year.
Imaginatik has continued to make solid progress since the year
end, in line with management's expectations. There is a strong
pipeline of business opportunities in both the US and Europe and
this, together with our experienced team, our growing customer base
and greater industry recognition, gives us confidence in the future
success of Imaginatik.
Shawn Taylor
Chief Operating and Financial Officer
24 July 2013
Consolidated statement of comprehensive income for the year
ended 31 March 2013
Restated
Note 2013 2012
GBP'000 GBP'000
Revenue 3 3,009 3,059
Cost of sales (295) (321)
------------ ------------
Gross profit 2,714 2,738
Administrative expenses (3,980) (4,211)
------------ ------------
Operating loss (1,266) (1,473)
Operating loss before share
option costs (1,187) (1,364)
Share option costs (79) (109)
----------------------------- ----- ------------ ------------
Finance costs (7) (8)
------------ ------------
Loss before taxation (1,273) (1,481)
Income tax expense 131 108
------------ ------------
Loss on ordinary activities
for the year and total
comprehensive income (1,142) (1,373)
Loss per share:
Basic and diluted 5 (0.15p) (0.40p)
============ ============
Consolidated statement of financial position as at 31 March
2013
Restated Restated
Note 2013 2012 2011
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
ASSETS
Non-current
assets
Property, plant
and equipment 29 51 100
Intangible assets 254 51 104
Trade and other
receivables 339 106 -
-------- -------- --------
622 208 204
Current assets
Trade and other
receivables 1,063 1,034 983
Cash and cash
equivalents 136 543 469
-------- -------- --------
1,199 1,577 1,452
-------- -------- --------
Total assets 1,821 1,785 1,656
======== ======== ========
EQUITY AND LIABILITIES
Equity
Issued capital 6 341 321 135
Share premium 6,592 5,704 4,691
Share option
reserve 843 764 655
Retained earnings (8,838) (7,696) (6,323)
-------- -------- --------
Total equity (1,062) (907) (842)
Liabilities
Non-current
liabilities
Other payables 115 136 24
-------- -------- --------
115 136 24
Current liabilities
Trade and other
payables 2,768 2,556 2,474
-------- -------- --------
2,768 2,556 2,474
-------- -------- --------
Total liabilities 2,883 2,692 2,498
-------- -------- --------
Total equity
and liabilities 1,821 1,785 1,656
======== ======== ========
Consolidated cash flow statement for the year ended 31 March
2013
Restated
2013 2012
Note GBP'000 GBP'000 GBP'000 GBP'000
Cash outflows from operating
activities 7 (1,072) (1,115)
Investing activities
Acquisition of property,
plant and equipment (17) (9)
Acquisition of intangible (226) -
assets
-------- --------
Net cash used in investing
activities (243) (9)
Net cash flow before
financing activities (1,315) (1,124)
Financing activities
Net proceeds from the
issue of share capital 908 1,199
Net cash generated from
financing activities 908 1,199
Net (decrease)/increase
in cash and cash equivalents (407) 75
Opening net cash and
cash equivalents 543 469
Net foreign exchange
difference - (1)
-------- --------
Closing net cash and
cash equivalents 136 543
======== ========
Statement of changes in equity for the year ended 31 March
2013
Total
Share attributable
Share Share option Retained to owners
capital premium reserve earnings of parent
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 April
2012 (restated) 321 5,704 764 (7,696) (907)
Employee share-based
payment options - - 79 - 79
Issue of share capital 20 888 - - 908
--------- --------- --------- ---------- --------------
Transactions with
owners 20 888 79 - 987
--------- --------- --------- ---------- --------------
Loss for the year
and total comprehensive
income - - - (1,142) (1,142)
Balance at 31 March
2013 341 6,592 843 (8,838) (1,062)
========= ========= ========= ========== ==============
Balance at 1 April
2011 135 4,691 655 (6,323) (842)
Employee share-based
payment options - - 109 - 109
Issue of share capital 186 1,013 - - 1,199
--------- --------- --------- ---------- --------------
Transactions with
owners 186 1,013 109 - 1,308
--------- --------- --------- ---------- --------------
Loss for the year
and total comprehensive
income - - - (1,373) (1,373)
--------- --------- --------- ---------- --------------
Balance at 31 March
2012 321 5,704 764 (7,696) (907)
--------- --------- --------- ---------- --------------
Note to the Financial Statements
1. Basis of preparation and statement of compliance
The financial information contained in this preliminary
announcement does not constitute the Group's statutory financial
statements for the year ended 31 March 2013 or 2012, but is derived
from these financial statements. The financial statements for the
year ended 31 March 2012 have been delivered to the Registrar of
Companies.
The financial statements for the year ended 31 March 2013 have
been prepared in accordance with International Financial Reporting
Standards as adopted by the European Union and the Group has
complied with International Financial Reporting Standards as issued
by the IASB. Those financial statements have not yet been delivered
to the Registrar.
In preparing the financial statements the Directors are required
to make judgements and estimates in applying accounting policies.
The most significant areas where judgements and estimates have been
applied are as follows:
Critical judgements and significant accounting estimates
In determining and applying accounting policies, judgement is
often required in respect of items where the choice of specific
policy, accounting estimate or assumption to be followed could
materially affect the reported results or net asset position of the
Group should it later be determined that a different choice would
be more appropriate. The most significant areas where judgements
and estimates have been applied are as follows:
Judgements
The recognition policy choice in respect of the software license
fee element of Technology revenues requires judgement. Previously a
large element of the contract value was attributed to the software
licence fee and was recognised in the month the contract was
signed. Having reconsidered this critical judgement, the directors
now considered it more appropriate to recognise the licence fee
element evenly over the term of the contract. This revised policy
has been applied retrospectively as this results in these financial
statements providing reliable and more relevant information about
the effects of transactions on the Company's financial position and
financial performance. The revised policy provides more relevant
and reliable information as it is more reflective of the on-going
relationship with clients through the licence term.
The value of the awards under the modified and new share option
scheme was measured, in accordance with IFRS 2, by reference to
their fair value at the date on which they were granted. Judgement
was required in determining the most appropriate valuation model
.
Estimates
Significant assumptions were necessary in arriving at the inputs
into the valuation model for modified and new share option
scheme.
Accounting policies
Revenue
Revenue is measured at the fair value of the consideration
received or receivable. Income for the group is derived from two
different sources: Technology and Consultancy. These sources are
service-based rather than through the sale of goods. Following the
principles of IAS 18 'Revenue', the policies for income recognition
are such that income is recognised by reference to the stage of
completion of the transaction at the end of the reporting period.
In applying the income recognition policies below where there is a
requirement for a contract to be signed, income is recognised in
accordance with the policy when the contract has been signed or
persuasive evidence of an arrangement exists.
a) Consulting:
Income derived from our consulting offering subject to contracts
is recognised in the month in which the consulting takes place.
Income from longer term consulting arrangements shall be recognised
evenly over the term of the contract.
b) Technology:
The provision of our suite of technology products includes
provision of software licences, hosting and maintenance in relation
to the product over the contract term. Income arising from the
provision of technology services are recognised evenly over the
term of the contract, once an agreement has been signed or
persuasive evidence of an arrangement exists.
Going Concern
Net funds at 31 March 2013 was GBP136,000 (2012: GBP543,000).
Net cash outflows from operating activities has reduced to GBP1.07
million (2012: GBP1.12 million).
The Company completed a placing of new ordinary shares with
institutional and other investors in June 2012 raising GBP1.0
million before expenses. The Company completed a further placing of
new ordinary shares with institutional and other investors in May
2013, post the period end, raising approximately GBP1.26m before
expenses.
The directors have prepared detailed Group budgets and forecasts
for the period to March 2015. They have reviewed the Group's
budgets and forecasts for the coming 12 months, which have been
prepared with appropriate regard to the current macroeconomic
environment and the conditions in the principal markets served by
the Group. The directors have taken into consideration the Group's
net funds, the level of anticipated renewals by reviewing on a
customer by customer basis, forecast new and upsell revenues based
on sales in the pipeline and anticipated costs including the
ability to flex these cost should predicted revenues be lower than
forecast. As a result, at the time of approving the financial
statements, the Directors consider that the Company has sufficient
financial resources to continue in operational existence for the
foreseeable future and, therefore, that it is appropriate to adopt
the going concern basis in preparing these financial statements. As
with all business forecasts, the directors' statement cannot
guarantee that the going concern basis will remain appropriate
given the inherent uncertainty about future events.
2 Prior period adjustment
The directors have revised the revenue recognition policy for
the software licence fee element of the Technology services
provided. Previously an element of the contract value was
attributed to provision of the licence and recognised in the month
the contract was signed. Further description of the change is noted
in Critical judgements and significant accounting estimates.
The primary impacts of the policy on the financial years under
report have been as follows:
-- revenue for the year to 31 March 2013 has decreased by
GBP0.12m from GBP3.13m to GBP3.01m (2012: reduced from GBP3.45m to
GBP3.06m)
-- the loss after tax for the year to 31 March 2013 has
increased by an additional GBP0.12m from GBP1.02m to GBP1.14m
(2012: losses increased from GBP0.98m to GBP1.37m)
-- the amount of deferred revenue on the balance sheet has
increased by GBP1.58m to GBP2.45m (2012: increased from GBP0.74m to
GBP2.20m)
-- cumulative losses carried forward as at 31 March 2013 have
been increased by GBP1.58m from GBP7.26m to GBP8.84m (2012
increased from GBP6.24m to GBP7.70m)
-- EPS for 2012 decreased to GBP0.40 loss per share from GBP0.28 loss per share.
-- EPS for 2013 decreased to GBP0.15 loss per share from GBP0.13 loss per share.
3 Segmental reporting
Management currently identifies the Group's two revenue streams
as its operating segments. These operating segments are monitored
by the Group's chief operating decision maker. For these operating
segments only revenues are reported the Group's chief operating
decision maker as results, other costs and assets and liabilities
cannot be reliably allocated to the operating segments.
Restated
2013 2012
GBP'000 GBP'000
Segmental revenue:
Technology 2,456 2,669
Consultancy 553 390
------------------- -------------------
3,009 3,059
=================== ===================
All other information presented to the Chief Operating Decision
Maker is the same as is reported in these financial statements.
The Group's revenues from external customers and its non-current
assets are divided into the following geographical areas:
Restated
2013 2012
GBP'000 GBP'000
Segmental revenue:
United States of America 2,628 2,770
Rest of the World 381 289
------------------- -------------------
3,009 3,059
=================== ===================
Segmental non-current assets:
United States of America 309 126
Rest of the World 313 82
------------------- -------------------
622 208
=================== ===================
Revenues from external customers have been identified on the
basis of the customer's geographical location. Non-current assets
are allocated based on their physical location.
The Group has one customers (2012: nil customers), who accounted
for revenues of GBP302,000 (2012: GBPnil), which amount to more
than 10% of Group revenues. These revenues arose in the Technology
segment.
4. Operating loss
2013 2012
This has been arrived at GBP'000 GBP'000
after charging:
Auditor's remuneration
Fees for the audit of
Imaginatik plc 19 15
Fees for the audit of
other group companies 1 1
Services relating to taxation 7 15
Other services 2 2
Operating lease costs:
Land and buildings 84 86
Depreciation 39 59
Amortisation 23 53
Foreign exchange losses 127 48
Litigation costs 41 153
Research and development 183 451
======== ========
5. Earnings per share
Basic loss per share (EPS) has been calculated in accordance
with IAS 33 'Earnings per share'. The calculation of EPS is based
on losses of GBP1,142,000 (2012: GBP1,373,000) and on a weighted
average number of ordinary shares in existence during the year of
763,032,110 (2012: 347,464,893).
The share options issued during the current and prior year are
considered to be anti-dilutive, and therefore diluted EPS equals
basic EPS.
6 Share capital
Number GBP
GBP'000
Allotted, called up and
fully paid ordinary shares
0.0625p each
As at 1 April 2012 513,032,110 321
Issued in the year 333,333,333 20
------------ ---------
As at 31 March 2013 846,365,443 341
============ =========
On 28 June 2012:
- 333,333,333 new ordinary shares of 0.0625p each were issued
for a gross cash consideration of
GBP1,000,000. Issue costs relating to the above placing were
GBP92,000 and have been deducted from the
share premium account.
7 Reconciliation of operating loss to net cash outflow from operating activities
Restated
Group Group
2013 2012
GBP'000 GBP'000
Operating loss (1,266) (1,473)
Depreciation of plant, property
and equipment 39 59
Amortisation of intangible
assets 23 53
Share option charge 79 109
Operating cash flows before
movements in working capital (1,125) (1,252)
Decrease/(Increase) in trade
and other receivables (262) (157)
Increase/(Decrease) in payables 191 194
-------- ---------
Net movement in working capital (71) 37
-------- ---------
Cash used by operations (1,196) (1,215)
-------- ---------
Corporation tax received 131 108
Net interest paid (7) (8)
Net cash from operating activities (1,072) (1,115)
======== =========
8. Post-balance sheet event
The company announced on 26 April 2013 that it had successfully
raised GBP1.26m (before expenses) by way of a conditional placing
of new ordinary shares in the share capital of the Company
("Placing"). The terms of the Placing were described in a circular
which was despatched to shareholders of the Company on 26 April
2013. The new ordinary shares were admitted to trading on AIM on 14
May 2013.
9. Report and Accounts
Copies of the Company's full statutory financial statements will
be available from the offices at Carnac Cottage, Cams Hall Estate,
Fareham, PO16 8UU and on its website, www.imaginatik.com. A copy of
the Report and Accounts will be sent to all shareholders with
notice of the AGM in due course.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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