TIDMIMTK

RNS Number : 6845H

Imaginatik PLC

19 November 2018

19 November 2018

Imaginatik Plc

("Imaginatik" or the "Company")

Interim Results

Imaginatik plc (AIM: IMTK.L) announces its unaudited results for the six months ended 30 September 2018.

Highlights in the period

   --      Recognised revenues of GBP1.42m (H1 2017: GBP1.73m) 
   --      Annualised cost savings of GBP1.20m achieved, net savings GBP0.89m. 
   --      Operating loss before foreign exchange of GBP0.45m (H1 2017: GBP0.59m) 
   --      Cash outflow before financing reduced to GBP0.61m (H1 2017: GBP1.10m) 
   --      Appointment of a new CEO in July 2018 

-- Completed fundraisings in the period to raise GBP0.55m gross via an equity placing and GBP0.50m via an issue of loan notes.

Simon Charles, Non-Executive Chairman, commented: "It has been a very difficult period since the announcement of the strategic review at the beginning of 2018, as that created uncertainty in the market about the Company's position. I am grateful to and would like to thank all the investors who have provided fresh equity and loan finance in the period now under review, enabling the Company to stabilise its financial position. The Company's new management continues to align costs to revenue."

For further information please contact:

 
 Imaginatik plc       Tel: 01329 243 243 
 Angus Forrest, CEO 
  Shawn Taylor, CFO 
 
 WH Ireland           Tel: 0117 945 3472 
 Mike Coe 
 

Peterhouse Corporate Finance Tel: 020 7469 0936

Duncan Vasey/Lucy Williams

About Imaginatik

Imaginatik is the leading innovation solution provider which has combined a proven innovation program with purpose-built idea management software to enable companies to achieve breakthrough and continuous innovation at scale. Imaginatik works with leading global enterprises to build and integrate innovation management skills as a core competency. Customers include ExxonMobil, Altria, Caterpillar, John Deere, Exelon and Cargill.

Imaginatik is a public company traded on the AIM market of the London Stock Exchange (LSE: IMTK.L) with locations in the USA and U.K.

For more information visit www.imaginatik.com.

Certain information contained in this announcement would have constituted inside information (as defined by Article 7 of Regulation (EU) No 596/2014) ("MAR") prior to its release as part of this announcement and is disclosed in accordance with the Company's obligations under Article 17 of MAR

Chairman's statement

The six months to 30 September 2018 was one of significant change for the Company, employees and shareholders alike, with a change in management and a downsizing of the business. I described some of these initiatives in the announcement made on 11 September 2018 that accompanied the final results for the year ended 31 March 2018, but it is worth reminding stakeholders again of what happened and the reasons.

The first part of this financial year saw the Company complete a strategic review of the business and to consider the various potential options available to it to seek to maximise value for shareholders. As a result, in early June 2018 the board determined that the best path forward was to recapitalise the business and appoint substantially a new leadership team. Accordingly, Matt Cooper and Ralph Welborn left the board.

An important step in this direction was the appointment of Angus Forrest as CEO on 1 July 2018. Since his appointment Angus has set about implementing a series of changes across the business including a significant reduction in the company's fixed cost base to better align our costs with the recurring revenues and potential new business, changing the focus of our development activities and providing different leadership to the Company. I am grateful for his efforts over the period and the board will continue to implement change where necessary.

During the period we were approached by and had discussions with a range of parties interested in investing in or partnering with the business. Despite some setbacks the management team overcame several significant hurdles, not least of which was the resignation of our nominated adviser and broker and the suspension of our shares as a result. I am however pleased to report that on 26 October 2018 we were able to appoint WH Ireland as our new nominated adviser and broker and our shares were readmitted to trading on AIM.

I am grateful to and would like to thank all the investors who have provided fresh equity and loan finance in the period now under review, enabling the Company to stabilise its financial position.

CEO Report

Since I joined the Company in early June 2018 it has been an intense period of activity to drive and manage change and make improvements across all areas of the business. I believe these efforts are now beginning to show results which benefit the business.

People

The Company employs some very talented people, all are experienced, loyal, committed and want the Company to succeed. It has been a challenging period for all the employees and it is encouraging that they are rising to the new challenges that have been presented and recognise the fact that new ways of working are required and when followed are delivering tangible benefits for both the Company and themselves.

Management

The new management team has concentrated on leadership, setting, agreeing and achieving departmental objectives and targets, also disseminating more information and knowledge throughout the Company. The Company had previously generated good data but until recently it was not interpreted or widely disseminated. Improved use of this data should assist the Company to improve its performance in all areas. As the new management gains more knowledge and understanding of the Company and business it is making changes to improve performance, use of resources, and better balance the resources for sales growth. The planned results of some of these initiatives include expected improvements to sales conversion rates from an initial lead to a final contracted order, higher sales value per order, improved customer care and management processes that should lead to higher customer satisfaction and higher retention rates.

Cost Structure

The cost structure as at June 2018 has been overhauled, with the total monthly overhead reduced and the expenditure between activities re-prioritised. Significant cost reductions have already been made and these initiatives will continue into the remainder of the financial year. However, it does take time to obtain the full benefits of the changes implemented.

There is still some further work to do on the cost structure, but so far this year we have reduced the annual overhead across all parts of the business by approximately GBP1.20m, with a net annual cost saving of GBP0.89m when we consider the replacement costs required. Most of this decrease has arisen from headcount reduction, with six employees departing across the business in a mix of redundancies and leavers not being replaced.

Product Development

We launched several new product developments in the period which have been well received by our customers. The most important of which was the next generation mobile experience developed in conjunction with some of our customers. The new application allows employees to access and participate with events running on Imaginatik's flagship product, Innovation Central, when they themselves are mobile.

Although we offer a powerful analytic engine as part of our standard offering we are developing new product features to take advantage of advances in Artificial Intelligence and Machine Learning. In turn this may lead to development of new revenue streams.

In the period the Company received approaches from several individuals and companies proposing a range of interesting product development initiatives, some of these are being progressed and could lead to interesting developments for the Company. We see joint ventures as one realistic way the business can be developed at a faster pace and less expensively than as a stand-alone entity and we will continue to explore this as a route to develop our product set.

Sales and Marketing

In line with our determination to reduce the cost base of the business we have reduced the level of our expenditure in marketing and have done so by changing our marketing strategy and by outsourcing most of the lead generation work to a US based marketing agency. We are pleased with the results of this exercise so far with a growing number of good quality leads being generated each month. We expect the improvements in sales leads generation to show through in higher numbers of new business sales in the second half of the financial year.

 
                             1 April to 30 June   1 July to 30 Sept 
                              2018                             2018 
                                                               2018 
 Qualified sales leads              25*                 72** 
  number 
                         ----------------------  ------------------ 
 Customer wins number                1                    3 
                         ----------------------  ------------------ 
 Value of new orders             GBP24,000           GBP197,000 
                         ----------------------  ------------------ 
 Qualified sales leads 
  * estimate in the period 1 April to 30 June 
  ** 220 since 1 October to 15 November 2018 
 

I am pleased to report that we have secured four new customers in the period, most of which were contracted in the latter stages of the half as trading began to improve and as some of the impact of the changes introduced into the sales process began to have an impact.

Consulting

As I have learned more about the business it has become clear to me that our consulting capability sets us apart from many in this industry. A look at two case studies covering work undertaken with our customers in the period will help demonstrate the breadth of our capabilities in this area and the value that we bring to our customers;

US Healthcare company

Imaginatik was hired by a leading pharmaceutical and medical device company to design a series of workshops to explore the future of a new medical device. Imaginatik designed a series of sessions to clearly define the areas of impact for the new product, ideate around these areas and develop some of the ideas into top concepts for further exploration. As we defined the areas of impact, we leveraged Innovation Central's analytics toolset. This gave everyone on the customers' team a voice and kept the conversation around early stage thinking productive and data based. When working with early stage concepts, because there is little data available, decisions frequently fall to the loudest voice in the room, or the most senior individual. Data from our analytical tools helps improve decision making by leveraging on the data available.

To enhance creativity, we also engaged with outside experts, we refer to as catalysts. In this case with a digital prescription company, a behavioural pharmacy and an artificial intelligence organisation who brought fresh perspectives to existing problems. Employees were able to engage with these experts virtually and in person to listen, ask questions and then ideate with an eye towards the future. This approach yielded several breakthrough concepts to be taken forward for further development.

Leading motor sport team

The world of motor sport is known for innovation, especially as teams strive to gain marginal advantages over their rivals. However, with significant advances in engineering, data science and technology, managing the innovation process has become difficult and at times overwhelming. This is the reason one of the leading motor sport teams turned to Imaginatik for help, selecting the Company because of our full spectrum offering of technology tools and innovation services. In our three month engagement with the team we deployed our technology in order to help them with understanding how they can better capture ideas, synthesise their vast array of data and make regular improvement.

Financial Review

Recognised revenues for the period were GBP1.42m, an 18% reduction on that reported last year (H1 2017: GBP1.73m). This marked reduction in revenues is explained by several factors. In the months that followed the announcement of the strategic review, new business opportunities decreased substantially as potential buyers decided to wait for the review to conclude before deciding to purchase. Following the closure of the review, new business wins have improved. Recognised revenues from the US were 68% of total revenues (2017: 63%) with the remainder derived from the Rest of World 32% (H1 2017: 23%). The proportions of revenues generated from technology in the period was 83% with 17% from consulting (H1 2017: 83%:17%).

Gross bookings in the period were GBP0.60m, down on the prior year (H1 2017:GBP1.71m) with the lower bookings figure impacted by the timing of the strategic review as described above as well as being affected by the timing of renewals in both periods. Of the gross bookings contracted in the period 64% were from renewals, new business comprising 31% and 6% accounted for by upsell (H1 2017: 53%:41%: 6%)

Administrative expenses were GBP1.93m (H1 2017:GBP2.20m) a reduction of 12% and the result of the headcount and other cost reductions implemented from June 2018. The annual cost reductions achieved across all areas have been GBP0.89m net of the replacement costs for the new CEO and Commercial Director. The full impact of these cost reductions will be more apparent in the financial results for the second half of FY19.

Cash outflows from operating activities were GBP0.45m (H1 2017:GBP0.71m) with the year on year reduction generated from a positive net movement in working capital. Post period end cash flows have improved because of the closure of renewals, new sales as well as the net proceeds from an equity placing and an issue of unsecured convertible loan notes. The board remains conscious that working capital will still need to be very closely monitored over the coming months.

During the half year there were two equity fundraisings, debt for equity swaps and an exercise of warrants generating GBP0.60m gross of expenses, a loan facility of GBP0.50m was secured, and post half year there was a placing and open offer to raise GBP0.50m gross.

Outlook

It has been a challenging six months for the business and all associated with it, but sound progress has been made in recent months to better align the cost base with available revenues, moving the company closer to a break-even position. We must not be complacent as there remains a great deal more to be done to turn the business around, but we have confidence that this can be achieved.

Imaginatik Plc

Condensed Unaudited Consolidated Interim Statement of Comprehensive Income

For the six months ended 30 September 2018

 
 
                                     Unaudited 6 months to 30    Unaudited 6 months to 30 
                                                         Sept                        Sept     Audited year to 31 March 
                                                         2018                        2017                         2018 
                             Note                     GBP'000                     GBP'000                      GBP'000 
 
Revenue                       4                         1,423                       1,728                        3,681 
 
Cost of sales                                           (103)                        (97)                        (201) 
 
Gross profit                                            1,320                       1,631                        3,480 
                                   --------------------------  --------------------------  --------------------------- 
 
Administrative expenses                               (1,926)                     (2,200)                      (4,887) 
 
Other operating income                                     31                          31                           65 
 
Operating loss before 
 financing and taxation                                 (575)                       (538)                      (1,342) 
                                   --------------------------  --------------------------  --------------------------- 
 
Operating loss before 
 foreign exchange 
 gains/(losses)                                         (454)                       (586)                      (1,481) 
Foreign exchange 
 gains/(losses)                                         (121)                          48                          139 
---------------------------  ----  --------------------------  --------------------------  --------------------------- 
 
Finance income/(costs)                                   (20)                        (34)                         (13) 
 
Loss on ordinary activities 
 before taxation                                        (595)                       (572)                      (1,355) 
 
Taxation                                                    -                         200                          200 
 
Loss on ordinary activities 
 for the period                                         (595)                       (372)                      (1,155) 
                                   --------------------------  --------------------------  --------------------------- 
 
Basic and diluted loss per 
 share (p)                    3                        (2.15)                      (1.97)                       (5.59) 
                                   --------------------------  --------------------------  --------------------------- 
 

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 comprehensive income has been presented.

Imaginatik Plc

Condensed Unaudited Consolidated Interim Statement of Financial Position

As at 30 September 2018

 
                                     Unaudited 6 months to 30    Unaudited 6 months to 30 
                                                         Sept                        Sept     Audited year to 31 March 
                                                         2018                        2017                         2018 
                             Note                     GBP'000                     GBP'000                      GBP'000 
ASSETS 
Non-current assets 
Property, plant and 
 equipment                                                 16                          23                           23 
Intangible assets                                         987                       1,231                          928 
Trade & other receivables                                 127                         351                          341 
                                   --------------------------  --------------------------  --------------------------- 
                                                        1,130                       1,605                        1,292 
Current assets 
Trade and other receivables                               897                       1,585                          757 
Cash and cash equivalents                                  14                         326                           61 
                                                          911                       1,911                          818 
                                   --------------------------  --------------------------  --------------------------- 
Total assets                                            2,041                       3,516                        2,110 
                                   --------------------------  --------------------------  --------------------------- 
 
EQUITY AND LIABILITIES 
Equity 
Issue capital                 5                         4,766                       4,765                        4,765 
Share premium                 5                         8,911                       8,345                        8,350 
Share option reserve          5                         1,278                       1,221                        1,252 
Retained earnings             5                      (15,409)                    (13,968)                     (14,814) 
                                   --------------------------  --------------------------  --------------------------- 
Total equity attributable 
 to equity holders of the 
 parent                                                 (454)                         363                        (447) 
                                   --------------------------  --------------------------  --------------------------- 
 
Liabilities 
Non-current liabilities 
Other payables                                            162                         483                          582 
                                   --------------------------  --------------------------  --------------------------- 
Total non-current 
 liabilities                                              162                         483                          582 
                                   --------------------------  --------------------------  --------------------------- 
 
Current liabilities 
Trade and other payables                                2,333                       2,670                        1,975 
                                                        2,333                       2,670                        1,975 
                                   --------------------------  --------------------------  --------------------------- 
Total liabilities                                       2,495                       3,153                        2,557 
                                   --------------------------  --------------------------  --------------------------- 
Total equity and 
 liabilities                                            2,041                       3,516                        2,110 
                                   --------------------------  --------------------------  --------------------------- 
 
 

Imaginatik Plc

Condensed Unaudited Consolidated Interim Statement of Cash Flows

For the six months ended 30 September 2018

 
                                     Unaudited 6 months to 30    Unaudited 6 months to 30 
                                                         Sept                        Sept     Audited year to 31 March 
                             Note                        2018                        2017                         2018 
                                                      GBP'000                     GBP'000                      GBP'000 
 
Cash outflows from 
 operating activities         6                         (451)                       (712)                        (804) 
                                   --------------------------  --------------------------  --------------------------- 
 
Investing activities 
Acquisition of property, 
 plant and equipment                                        -                         (5)                         (11) 
Acquisition of intangible 
 assets                                                 (157)                       (378)                        (550) 
                                   --------------------------  --------------------------  --------------------------- 
Net cash used in investing 
 activities                                             (157)                       (383)                        (561) 
                                   --------------------------  --------------------------  --------------------------- 
 
Net cash flow before 
 financing activities                                   (608)                     (1,095)                      (1,365) 
                                   --------------------------  --------------------------  --------------------------- 
 
Financing activities 
Net proceeds from the issue 
 of share capital                                         561                       1,304                        1,309 
Net cash generated from 
 financing activities                                     561                       1,304                        1,309 
                                   --------------------------  --------------------------  --------------------------- 
 
Net (decrease)/increase in 
 cash and cash equivalents                               (47)                         209                         (56) 
 
Cash and cash equivalents 
 at start of period                                        61                         117                          117 
Cash and cash equivalents 
 at end of period                                          14                         326                           61 
                                   --------------------------  --------------------------  --------------------------- 
 

Imaginatik Plc

Condensed Unaudited Consolidated Interim Statement of Changes in Equity

For the six months ended 30 September 2018

 
                                                                                                  (Restated) 
                                 Share capital     Share premium   Share option reserve    Retained earnings     Total 
                                       GBP'000           GBP'000                GBP'000              GBP'000   GBP'000 
 
 Balance at 1 April 2017                 4,041             7,765                  1,198             (13,659)     (655) 
                                --------------  ----------------  ---------------------  -------------------  -------- 
 
 Loss for the period                         -                 -                      -                (372)     (372) 
 Share option costs                          -                 -                     23                    -        23 
 Shares issued                             724               580                      -                    -     1,304 
                                --------------  ----------------  ---------------------  -------------------  -------- 
                                           724               580                     23                (372)       955 
 
 Balance at 30 September 2017            4,765             8,345                  1,221             (14,031)       300 
                                --------------  ----------------  ---------------------  -------------------  -------- 
 
 Loss for the period                         -                 -                      -                (783)     (783) 
 Share option costs                          -                 -                     31                    -        31 
 Shares issued                               -                 5                      -                    -         5 
                                --------------  ----------------  ---------------------  -------------------  -------- 
                                             -                 5                     31                (783)     (747) 
 
 Balance at 31 March 2018                4,765             8,350                  1,252             (14,814)     (447) 
                                --------------  ----------------  ---------------------  -------------------  -------- 
 
 Loss for the period                         -                 -                      -                (595)     (595) 
 Share option costs                          -                 -                     26                    -        26 
 Shares issued                               1               561                      -                    -       562 
                                --------------  ----------------  ---------------------  -------------------  -------- 
                                             1               561                     26                (595)       (7) 
 
 Balance at 30 September 2018            4,766             8,911                  1,278             (15,409)     (454) 
                                --------------  ----------------  ---------------------  -------------------  -------- 
 

Imaginatik Plc

Notes to the Condensed Unaudited Consolidated Interim Financial Statements

For the six months ended 30 September 2018

   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 2018 comprise the Company and its subsidiary (together referred to as the "Group").

The condensed consolidated interim financial statements were authorised for issuance on 19 November 2018.

The interim financial statements are not statutory accounts for the purposes of S435 of the Companies Act 2006. The comparative figures for the year ended 31 March 2018 are not the Company's statutory accounts for that financial year. The financial information for the year ended 31 March 2018 is based on the statutory accounts for the financial year ended 31 March 2018. Those accounts have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified, however the auditors drew attention to a material uncertainty related to going concern. The auditors drew attention to note 2 in the financial statements for the year ended 31 March 2018, which indicates that the group incurred a net loss of GBP1,155,000 and, as of that date, the group's liabilities exceeded its total assets by GBP447,000. As also stated in the same note 2, these events or conditions, along with the other matters set out there, indicate that a material uncertainty exists that may cast significant doubt on the groups ability to

continue as a going concern. The report 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 are expected to be applicable for the full reporting year in 2018. 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.

Imaginatik Plc

Notes to the Condensed Unaudited Consolidated Interim Financial Statements (continued)

For the six months ended 30 September 2018

   3.         Loss per share 

Basic loss per share

The calculation of basic loss per share for the period ended 30 September 2018 was based on the loss attributable to ordinary shareholders of GBP595,000 (period ended 30 September 2017: GBP372,000; year ended 31 March 2018: GBP1,155,000) and a weighted average number of ordinary shares outstanding during the period ended 30 September 2018 of 27,730,702 (period ended 30 September 2017: 18,925,619; year ended 31 March 2018: 20,667,709). The weighted average number of ordinary shares outstanding have been proportionately adjusted, in accordance with IAS 33, for a 10:1 share consolidation on 29 June 2018. To enable a fair comparison, the comparative figures for the period ended 30 September 2017 and the year ended 31 March 2018 have also been adjusted.

Diluted loss per share

The options in place during the periods ended 30 September 2018 and 30 September 2017 and during the year ended 31 March 2018 are considered to have an anti-dilutive effect due to losses. Therefore, basic and diluted loss per share is the same for each of the three periods.

Imaginatik Plc

Notes to the Condensed Unaudited Consolidated Interim Financial Statements (continued)

For the six months ended 30 September 2018

   4.         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 to the Group's chief operating decision maker as results; other costs and assets and liabilities cannot be reliably allocated to the operating segments.

 
                        Unaudited     Unaudited     Audited 
                         6 months      6 months     Year to 
                       to 30 Sept    to 30 Sept    31 March 
                             2018          2017        2018 
                          GBP'000       GBP'000     GBP'000 
 Segmental revenue 
 Technology                 1,178         1,430       2,841 
 Consultancy                  245           298         840 
                     ------------  ------------  ---------- 
                            1,423         1,728       3,681 
                     ------------  ------------  ---------- 
 

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:

 
                                 Unaudited 
                                  6 months             Unaudited 
                                to 30 Sept   6 months to 30 Sept  Audited Year to 
                                      2018                  2017    31 March 2018 
                                   GBP'000               GBP'000          GBP'000 
Segmental revenue 
United States of America               968                 1,097            2,272 
Rest of the world                      455                   631            1,409 
                                     1,423                 1,728            3,681 
                               -----------  --------------------  --------------- 
Segmental non-current assets 
United States of America               138                   370              357 
Rest of the world                      992                 1,235              935 
                               -----------  --------------------  --------------- 
                                     1,130                 1,605            1,292 
                               -----------  --------------------  --------------- 
 

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 two customers (2017: two customers), who accounted for revenues of GBP228,000 and GBP151,000 respectively (2017: GBP225,000 and GBP246,000), which amounted to more than 10% of Group revenues. These revenues arose in the Technology segment.

Imaginatik Plc

Notes to the Condensed Unaudited Consolidated Interim Financial Statements (continued)

For the six months ended 30 September 2018

   5.         Share Capital and Reserves 
 
                                                 Unaudited 
                                                  6 months                      Audited Year to 
                                                to 30 Sept  Unaudited 6 months         31 March 
                                                      2018     to 30 Sept 2017             2018 
                                                   GBP'000             GBP'000          GBP'000 
Share Capital 
At the beginning of the period                       4,765               4,041            4,041 
Shares issued                                            1                 724              724 
                                               -----------  ------------------  --------------- 
At the end of the period                             4,766               4,765            4,765 
                                               -----------  ------------------  --------------- 
 
Share premium 
At the beginning of the period                       8,350               7,765            7,765 
Shares issued in the period, net of expenses           561                 580              585 
                                               -----------  ------------------  --------------- 
At the end of the period                             8,911               8,345            8,350 
                                               -----------  ------------------  --------------- 
 
Share option reserve 
At the beginning of the period                       1,252               1,198            1,198 
Share-based payments                                    26                  23               54 
                                               -----------  ------------------  --------------- 
At the end of the period                             1,278               1,221            1,252 
                                               -----------  ------------------  --------------- 
 
Retained earnings 
At the beginning of the period                    (14,814)            (13,596)         (13,659) 
Loss for the period                                  (595)               (372)          (1,155) 
At the end of the period                          (15,409)            (13,968)         (14,814) 
                                               -----------  ------------------  --------------- 
 

New shares allotted

Issue costs relating to the above placings were GBP39,000 (period ended 30 September 2017: GBP143,000; year ended 31 March 2018: GBP138,000) and have been deducted from the share premium account.

Imaginatik Plc

Notes to the Condensed Unaudited Consolidated Interim Financial Statements (continued)

For the six months ended 30 September 2018

   6.         Cash flows from operating activities 
 
 
                                                             Unaudited 
                                                              6 months 
                                                            to 30 Sept  Unaudited 6 months  Audited Year to 
                                                                  2018     to 30 Sept 2017    31 March 2018 
                                                               GBP'000             GBP'000          GBP'000 
 
Operating loss                                                   (575)               (538)          (1.342) 
Depreciation of tangible fixed assets                                7                   6               13 
Amortisation of intangible fixed assets                             98                  81              171 
Impairment loss                                                      -                   -              384 
Share-based payment expense                                         26                  23               54 
                                                           -----------  ------------------  --------------- 
Operating cash flows before movements in working capital         (444)               (428)            (720) 
(Increase) / decrease in trade and other receivables                74                (50)              788 
Increase / (decrease) in payables                                 (61)               (400)          (1,059) 
                                                           -----------  ------------------  --------------- 
Net movement in working capital                                     13               (450)            (271) 
                                                           -----------  ------------------  --------------- 
Cash used by operations                                          (431)               (878)            (991) 
                                                           -----------  ------------------  --------------- 
Corporation tax received                                             -                 200              200 
Net interest expense                                              (20)                (34)             (13) 
                                                           -----------  ------------------  --------------- 
Net cash from operating activities                               (451)               (712)            (804) 
                                                           -----------  ------------------  --------------- 
 
   7.         Availability of announcement 

Copies of this announcement will be available from the Company's offices at Carnac Cottage, Cams Hall Estate, Fareham, Hampshire, PO16 8UU and from its website, www.imaginatik.com in accordance with rule 26 of the AIM rules for Companies.

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.

END

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