TIDMGHT
RNS Number : 9569H
Gresham Computing PLC
24 August 2016
24 August 2016
Gresham Computing plc
Clareti-led growth drives 28% increase in H1 adjusted EBITDA
Gresham Computing plc (LSE: "GHT", "Gresham" or the "Group"),
the leading software and services company that specialises in
providing real-time transaction control and enterprise data
integrity solutions, is pleased to announce its unaudited half year
results for the six months ended 30 June 2016.
Highlights are set out below:
-- Total revenues up 10% to GBP7.8m (H1 15: GBP7.1m)
-- Clareti revenues up 46% to GBP3.2m (H1 15: GBP2.2m)
-- Total recurring revenues up 16% to GBP4.3m (H1 15: GBP3.7m)
of which Clareti up 47% to GBP1.3m (H1 15: GBP0.9m)
-- Adjusted EBITDA* up 28% to GBP1.5m (H1 15: GBP1.1m)
-- Investment in sales & marketing up 45% to GBP1.6m (H1 15: GBP1.1m)
-- Cash GBP3.9m and no debt (30 June 2015: GBP4.0m and no debt)
-- Six new customers signed in H1 16, including three in the US
-- Market-leading innovation labs established in Bristol, UK
-- Management confident in the strategy and outlook for the Group
*Adjusted EBITDA refers to earnings before interest, tax,
depreciation and amortisation, adjusted for one-off exceptional
charges and share-based payments
Ian Manocha, CEO, commented:
"Gresham is creating a global financial technology business
based on high-margin Clareti licence sales, sustainable recurring
revenue subscriptions and cloud services.
Clareti sales opportunities are progressing positively in all
target regions following the Group's investment in sales and
marketing. The Group now has experienced sales staff in the UK,
Western Europe, Singapore, Australia & the US and is encouraged
by the strengthening pipeline and customer wins. We expect to add
several new high quality Clareti customers to our base in the
second half of the year.
The Board remain confident with the strategy of Clareti-led
growth and are excited by the growing market opportunity available
and the outlook for the Group."
Enquiries
Gresham Computing plc
Ian Manocha +44 (0) 207 653 0200
Rob Grubb
N+1 Singer (Broker)
Nic Hellyer +44 (0) 207 496 3000
Lauren Kettle
Note to editors
Gresham's award-winning Clareti software platform has been
designed to provide financial institutions with complete certainty
in their data processing. Clareti is a highly flexible and fully
scalable platform for assuring enterprise data integrity and is
designed to address today's most challenging financial control,
internal risk management, data governance and regulatory compliance
problems. Gresham's portfolio of applications based on the Clareti
platform, including Clareti Transaction Control (CTC) and Clareti
Accounts Receivable Management (Clareti ARM), provide innovative
industry and domain specific solutions for real-time data
management based on business-driven controls.
Gresham Computing plc is a leading software and services company
that specialises in providing real-time transaction control and
enterprise data integrity solutions. Listed on the main market of
the London Stock Exchange (GHT.L) and headquartered in the City of
London, customers include some of the world's largest financial
institutions, all of whom are served locally from offices located
in Europe, North America and Asia Pacific.
Chief Executive review
Strategic overview
Gresham is creating a global financial technology business based
on high-margin Clareti licence sales, sustainable recurring revenue
subscriptions and cloud services.
The Group aims to establish Clareti as the enterprise data
integrity platform "category leader" in a world awash with
real-time streaming data. Our growing portfolio of innovative
applications, all based on the Clareti platform, address complex
financial control, risk, compliance and broader data governance
challenges. Our applications are specifically built to disrupt
markets dominated by inflexible legacy technology and user
developed applications. Market demand for more agile alternatives
is particularly high in financial institutions driven by a global
regulatory agenda which is increasingly focussed on data integrity
and governance. Gresham is ideally placed to address these needs
with its modern technology and deep industry domain expertise.
The Group has now completed the transition to a global operating
model and has a strong management team in place, which supports our
Clareti-led growth strategy. In addition, the Board continues to
consider opportunities to accelerate growth through carefully
selected acquisitions.
In the first six months of the financial year total Group
revenues increased by 10% to GBP7.8m (H1 15: GBP7.1m). Clareti
revenues grew by 46% contributing 40% of total Group revenues (H1
15: 31%). The Group's total recurring revenues were up 16% to
GBP4.3m (H1 15: GBP3.7m). Investment in sales & marketing was
up 45% as planned to GBP1.6m (H1 15: GBP1.1m). Adjusted EBITDA
increased by 28% to GBP1.5m (H1 15: GBP1.1m).
Trading update
The Group saw strong Clareti growth in the first half of 2016
following investment in sales and marketing made over the last
year.
In the first half of the year, six new CTC customers signed up
including three in the strategically important US market. The Group
also signed its first Clareti-as-a-Service customer also in the US.
These customers all started their subscriptions during the first
half and will make a strong contribution to recurring revenues in
the second half. The Group also saw strong services revenue in the
period arising from these new wins in addition to existing
customers utilising our consultancy expertise to further extend
their use of our software.
As anticipated, since 1 July 2016 the Group has signed a North
American Tier 1 bank and expects to be able to recognise revenue
from this important new win later in the second half of the year
once contracted milestones have been achieved. Additionally,
Gresham has secured a CTC licence upgrade from an existing global
investment bank customer enabling it to extend the use of the
technology into new areas, including the replacement of legacy
incumbent solutions. This agreement provides for an increase in
recurring licence fees and a pricing framework for the bank to
deploy additional data integrity controls onto the platform. The
Group has also commenced a chargeable pilot project with a UK Tier
1 bank for a new use case for the Clareti platform.
Gresham now has over 30 direct CTC customers using the software
live in their business on a daily basis up from 20 customers a year
ago, and it was particularly pleasing to see our US reseller win
their first two deals during 2016. The number of indirectly
contracted customers using CTC software via white-labelled services
also continues to grow with the support of our bank partners.
Clareti sales opportunities are progressing positively in all
target regions following the Group's investment in sales and
marketing, and we have advanced Clareti opportunities with a number
of major institutions that we expect to close in the second half of
the year. The Group now has experienced sales staff in the UK,
Western Europe, Singapore, Australia & the US and is encouraged
by the strengthening pipeline and customer wins.
Commitment to innovation
During Q2 the Group opened its new Innovation Labs at The
Brewhouse in the centre of Bristol, UK. This new facility is the
home for our research and development team as well as our 24/7
operations centre for cloud customers and is also proving to be a
valuable sales tool when leveraged for client presentations and
workshops.
We continue to invest in new product development as well as
enhancing our existing offerings to address customer requirements
and deliver competitive differentiation. Our achievements in the
first half include:
-- The core Clareti platform and associated software development
processes achieved PCI Data Security Standard Level 3.2 (PCI
DSS).
-- Our first Clareti application, CTC, extended its lead in the industry in terms of speed of implementation, scalability and data processing performance, and operations user productivity
-- Clareti Accounts Receivable Management (Clareti ARM) the
leading white label offering for transaction banks was enhanced
with advanced remittance advice functionality.
-- The development of Clareti Loan Control (CLC) which is
on-track with user acceptance testing underway with our first
customer. This innovative cloud offering is the industry's first
front-to-back debt servicing platform for complex loans and will
provide the Group with a third Clareti line of business in 2017 in
partnership with our lead CLC customer.
-- Clareti-as-a-Service was launched at the start of 2016
allowing customers to deploy our technology as a fully managed
cloud service from Gresham, in addition to deploying on-premise or
in their private clouds.
During the first half Gresham was independently recognised as
one of the top risk technology providers globally in the 2016
Chartis RiskTech100 (R) report. Gresham were listed 43rd out of 100
achieving particularly strong scores for innovation, organisational
strength and customer satisfaction.
Commitment to Customer Success
The Group is focussed on achieving rapid return on investment
for customers, exceptional levels of customer satisfaction and
close ongoing dialogue with product development. As a testimony to
the speed at which Clareti can be deployed, all new customers who
started their projects during the first half of the year are
already using their CTC application live in production. The Group's
consulting services operation is profitable, and new service
products are being launched alongside implementation services to
ensure that customers receive the benefit of Gresham expertise
throughout the lifecycle. A new Global Director, Customer Success
and Service Delivery has been hired to ensure that the Group
continues to exceed customer expectations as we scale globally in
addition to increasing our revenues from existing and new
customers.
Other Products
The Group's portfolio of other products remains stable and is
trading in line with expectations.
Financial review
Trading
The Group earns revenues from the sale of software and provision
of ancillary consultancy services. Software revenues include sales
of perpetual and term licences with associated support &
maintenance, plus recurring software subscriptions.
The following summarises the Group's financial performance in
the six months to 30 June 2016:
H1 2016 H1 2015 Variance
========= =====
GBP'm GBP'm GBP'm %
=============================== ===== ======== ======== ========= =====
Revenue-based performance
Clareti software
Recurring 1.25 0.85 0.40 47%
Non-recurring 0.31 0.64 (0.33) -52%
====================================== ======== ======== ========= =====
KPI 1.56 1.49 0.07 5%
Clareti services 1.60 0.68 0.92 135%
====================================== ======== ======== ========= =====
Clareti revenues -
total KPI 3.16 2.17 0.99 46%
Other software & services
Recurring 3.05 2.87 0.18 6%
Non-recurring 1.60 2.05 (0.45) -22%
====================================== ======== ======== ========= =====
Other revenues - total 4.65 4.92 (0.27) -5%
Total revenues KPI 7.81 7.09 0.72 10%
=============================== ===== ======== ======== ========= =====
Total recurring revenues 4.30 3.72 0.58 16%
Earnings-based performance
Statutory profit before
tax as reported 0.68 0.65 0.03 5%
Adjustments for exceptional
items 0.19 0.09 0.10 111%
====================================== ======== ======== ========= =====
Adjusted profit before
tax 0.87 0.74 0.13 18%
Interest income (0.01) (0.01) - 0%
Amortisation and depreciation 0.53 0.39 0.14 36%
Share-based payments
charge 0.08 0.03 0.05 167%
====================================== ======== ======== ========= =====
Adjusted EBITDA KPI 1.47 1.15 0.32 28%
Adjusted EBITDA/total
revenue KPI 19% 16% 3%
Profit after tax 0.92 0.90 0.02 2%
====================================== ======== ======== ========= =====
Basic earnings per
share (pence) 1.45 1.42 0.03 2%
Diluted earnings per
share (pence) 1.40 1.30 0.10 8%
Diluted earnings per
share (pence) - adjusted 1.70 1.43 0.27 19%
EBITDA refers to earnings before interest, tax, depreciation and
amortisation.
Clareti revenues continued to grow strongly during the period as
total Clareti revenues increased by 46% to GBP3.2m (H1 15:
GBP2.2m), with Clareti software revenues increasing by 5% to
GBP1.6m (H1 15: GBP1.5m) and Clareti software recurring revenues
increasing by 47% to GBP1.3m (H1 15: GBP0.9m). Clareti services
revenues were up 135% to GBP1.6m (H1 15: GBP0.7m).
The Group continues to win new customers to use the Clareti
platform in both proven and new use cases, in addition to achieving
strong growth in revenues from existing customers expanding their
usage of Clareti to more users and more business applications.
Total software recurring revenue for the six months ended 30
June 2016 increased by 16% to GBP4.3m (H1 15: GBP4.3m) with
recurring revenue as a proportion of all revenues up slightly in
the period to 55% (H1 15: 53%). Revenue from all other non-Clareti
parts of the business remain in line with plan.
Adjusted EBITDA was up 28% to GBP1.5m (H1 15: GBP1.1m) despite
the planned increase in sales and marketing activities which were
up 45% to GBP1.6m (H1 15 GBP1.1m). Other administrative costs
remain tightly controlled and saw a small decrease of 0.3% in the
first half of 2016 compared to the same period last year.
Excluding exceptional charges, the Group's pre-tax profit
increased by 18% to GBP0.9m (H1 15: GBP0.7m). In the first half of
2016 these exceptional charges amounted to GBP0.2m and relate
mainly to the closure of our Denver office and relocation of our
Latteridge operations to the Group's new flagship innovation labs
located in Bristol, UK.
For the period to 30 June 2016, the Group recorded a net tax
credit of GBP0.2m mainly in connection with recognition of deferred
tax balances arising on enhanced research and development capital
allowances and unexercised share options. This is offset by an
adjustment to current tax of GBP0.1m from finalisation of the
Group's prior years UK research and development claims. The Group
is carrying forward tax losses of approximately GBP14.4m mainly in
respect of UK subsidiaries. Of this amount GBP10.8m is recognised
and is mostly offset by a deferred tax liability for timing
differences associated with capitalisation of the Group's
development costs for which the Group has received upfront capital
allowances but amortisation has yet to be charged.
Basic earnings per share increased by 2% to 1.45 pence (H1 15:
1.42 pence) and diluted earnings per share adjusted for exceptional
items increased by 19% to 1.70 pence (H1 15: 1.43 pence).
As a Board we are committed to commencing a progressive dividend
when the circumstances are deemed to be appropriate. Whilst our
priority remains to reinvest cash generated in 2016 into the
business to support our strategic aims, as a Board we have a firm
intention to review the position subsequent to that and consider
declaring a maiden dividend in respect of financial year 2017.
Cashflow
H1 2016 H1 2015 Variance
========= ======
GBP'm GBP'm GBP'm %
=========================== ======== ======== ========= ======
Statutory profit before
tax as reported 0.68 0.65 0.03 5%
Working capital movements 0.03 (0.40) 0.43 -108%
Non-cash items 0.78 0.43 0.35 81%
Net income taxes (paid)
/ received (0.08) 0.27 (0.35) -130%
============================ ======== ======== ========= ======
Cash inflows from
operating activities 1.41 0.95 0.46 48%
Net Purchase of property,
plant & equipment (0.41) (0.15) (0.26) 173%
Payments to acquire
intangible fixed assets (2.05) (1.44) (0.61) 42%
============================ ======== ======== ========= ======
Cash outflows from
investing activities (2.46) (1.59) (0.87) 55%
Cash inflows from
exercise of share
options 0.16 - 0.16 n/a
Net increase in cash
and cash equivalents (0.89) (0.64) (0.25) 39%
Cash and cash equivalents
at 1 January 4.67 4.71 (0.04) n/a
Exchange adjustments 0.13 (0.07) 0.20 n/a
Cash and cash equivalents
at end of period 3.91 4.00 (0.09) n/a
============================ ======== ======== ========= ======
The Group continues to be funded from operating cash and has no
debt. During the six months ended 30 June 2016 cashflow arising
from operating activities grew by 48% to GBP1.4m (H1 15: GBP0.9m)
as a direct result of the increasing profitability of the Group.
Net cashflow from working capital movements and income taxes was
broadly even between the first halves of 2016 and 2015.
As planned, investments in property, plant & equipment
increased due to the closure of our Denver office and relocation of
our Latteridge operations to the Group's new flagship innovation
labs located in Bristol, UK. Investments in development activities
(development costs are capitalised as intangible assets) increased
due to GBP0.4m of temporary resource engaged in the first half to
help specific client-funded product delivery. This requirement has
now completed and investment in development is anticipated to
return to more normalised levels in the second half of 2016.
During the period the Group received GBP0.2m from the exercise
of employee shares options (H1 15: nil) which combined with the
cash flows from operating and investing activities resulted in
closing cash for the Group of GBP3.9m. Excluding the one-off cash
outflows associated with the office reorganisations and temporary
development resource in the first half of 2016, the Group is cash
generative on a run-rate basis and with investment levels in
product now at a constant level cash inflow is expected to increase
in line with the Group's increasing profitability.
In August 2016 the Group received GBP0.7m in respect of its 2015
UK tax research and development claim.
Outlook
Market demand for modern transaction control and data integrity
platforms continues to grow driven by the need for improved
financial certainty, more granular risk controls, enhanced data
governance and regulatory compliance.
Our strategy when we first brought CTC to market was to attack
transaction control problems that were not well served by legacy
vendors with their less flexible technology. We initially targeted
complex data control challenges where customers had resorted to
in-house solutions, spreadsheets and manually intensive processes.
In 2016 so far we have won several direct competitor replacement
deals as we have broadened our market focus. We now have more entry
points into large financial institutions and a growth path to true
enterprise-wide deployments and larger deal sizes. Additionally,
the Group now has sales teams in all target geographic markets and
a strong base of referenceable Clareti Transaction Control and
Clareti Accounts Receivable Management customers. The ongoing
investment in products and general availability of our cloud
platform further strengthens our proposition for customers.
As a reflection of this, our pipeline includes a number of
Clareti opportunities for 2016 with Tier 1 and other major
institutions, some of which are at advanced stages of negotiations.
We anticipate converting a number of these opportunities in the
second half, providing a solid contribution to our planned Clareti
revenues in current and future years.
Clareti recurring revenues continue to build steadily and the
Group has approximately 90% visibility of total revenues for FY
2016. The Group's other product revenues remain stable and are
performing in line with expectations.
The Board remain confident with the strategy of Clareti-led
growth for the Group, and are excited by the growing market
opportunity available and the outlook for the Group.
Ian Manocha
Chief Executive Officer
23 August 2016
Consolidated income statement
6 months 6 months 12 months
============================== ======
ended ended ended
==============================
30 June 30 June 31 Dec
2016 2015 2015
Unaudited Unaudited Audited
Notes GBP'000 GBP'000 GBP'000
============================== ====== ========== ========== ==========
Revenue 2 7,812 7,087 14,842
Cost of goods sold (1,455) (1,345) (2,822)
============================== ====== ========== ========== ==========
Gross profit 6,357 5,742 12,020
Administrative expenses (5,496) (5,017) (10,310)
============================== ====== ========== ========== ==========
Operating profit before
exceptional charges 861 725 1,710
Exceptional charges (196) (90) (149)
============================== ====== ========== ========== ==========
Operating profit 665 635 1,561
Finance revenue 12 12 21
Finance costs - - -
============================== ====== ========== ========== ==========
Profit before taxation 677 647 1,582
Taxation 3 241 250 368
Attributable to owners
of the parent 918 897 1,950
============================== ====== ========== ========== ==========
Earnings per share
Basic earnings per
share - pence 4 1.45 1.42 3.08
Diluted earnings per
share - pence 4 1.40 1.30 2.98
Basic earnings per
share excluding exceptional
charges - pence 4 1.76 1.56 3.32
Diluted earnings per
share excluding exceptional
charges - pence 4 1.70 1.43 3.21
All activities were continuing during the year.
Consolidated statement of comprehensive income
6 months 6 months 12 months
======================================
ended ended ended
======================================
30 June 30 June 31 Dec
2016 2015 2015
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
====================================== ========== ========== ==========
Attributable profit for
the year 918 897 1,950
======================================== ========== ========== ==========
Other comprehensive income/(expense)
Exchange differences on
translation of foreign operations 71 (60) (27)
71 (60) (27)
====================================== ========== ========== ==========
Total comprehensive income
for the year 989 837 1,923
======================================== ========== ========== ==========
The tax effect of exchange differences recorded
within the Consolidated statement of comprehensive
income is a charge of GBP14,000 (2015: credit
GBP12,000).
Consolidated statement of financial position
30 June 30 June 31 Dec
================================
2016 2015 2015
================================
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
================================ ========== ========== ========
Assets
Non-current assets
Property, plant and equipment 741 586 499
Intangible assets 12,320 9,490 10,648
Deferred tax assets 563 547 239
================================== ========== ========== ========
13,624 10,623 11,386
Current assets
Trade and other receivables 3,584 2,886 3,472
Income tax receivable 797 1,240 892
Cash and cash equivalents 3,909 4,000 4,666
================================== ========== ========== ========
8,290 8,126 9,030
Total assets 21,914 18,749 20,416
================================== ========== ========== ========
Equity and liabilities
Equity attributable to owners
of the parent
Called up equity share capital 3,177 3,162 3,164
Share premium account 157 - 9
Other reserves 313 313 313
Foreign currency translation
reserve 6 (98) (65)
Retained earnings 12,512 10,379 11,513
================================== ========== ========== ========
Total equity attributable
to owners of the parent 16,165 13,756 14,934
Non-current liabilities
Deferred income 205 70 53
Provisions 97 35 24
================================== ========== ========== ========
302 105 77
Current liabilities
Trade and other payables 5,413 4,789 5,294
Financial liabilities - - 3
Income tax payable - 99 89
Provisions 34 - 19
================================== ========== ========== ========
5,447 4,888 5,405
================================ ========== ========== ========
Total liabilities 5,749 4,993 5,482
Total equity and liabilities 21,914 18,749 20,416
================================== ========== ========== ========
Consolidated statement of changes in equity
Share Share Other Currency Retained
=====================
capital premium reserves revaluation earnings Total
=====================
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
===================== ======== ========= ========= ============ ========= ========
At 1 January 2015 3,162 16,522 313 (38) (7,069) 12,890
Attributable profit
for the period - - - - 897 897
Other comprehensive
expense - - - (60) - (60)
===================== ======== ========= ========= ============ ========= ========
Total comprehensive
income - - - (60) 897 837
Share premium
cancellation - (16,522) - - 16,522 -
Share based payment - - - - 29 29
========
At 30 June 2015 3,162 - 313 (98) 10,379 13,756
===================== ======== ========= ========= ============ ========= ========
Attributable profit
for the period - - - - 1,053 1,053
Other comprehensive
income - - - 33 - 33
===================== ======== ========= ========= ============ ========= ========
Total comprehensive
income - - - 33 1,053 1,086
Exercise of share
options 2 9 - - - 11
Share based payment - - - - 81 81
========
At 31 December
2015 3,164 9 313 (65) 11,513 14,934
===================== ======== ========= ========= ============ ========= ========
Attributable profit
for the period - - - - 918 918
Other comprehensive
income - - - 71 - 71
===================== ======== ========= ========= ============ ========= ========
Total comprehensive
income - - - 71 918 989
Exercise of share
options 13 148 - - - 161
Share based payment - - - - 81 81
========
At 30 June 2016 3,177 157 313 6 12,512 16,165
===================== ======== ========= ========= ============ ========= ========
Share Premium cancellation
On 24 February 2015 at a shareholder general meeting, the
Company approved a resolution to reduce the Company's share capital
by the cancellation of its Share Premium Account which was
subsequently confirmed by the High Court of Justice on 18 March
2015.
Consolidated statement of Cashflows
6 months 6 months 12 months
==================================
ended ended ended
==================================
30 June 30 June 31 Dec
2016 2015 2015
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
================================== ========== ========== ==========
Cashflows from operating
activities
Profit before taxation 677 647 1,582
Depreciation, amortisation
and impairment 577 392 976
Share-based payment expense 81 29 110
Decrease/(increase) in
trade and other receivables 30 357 (217)
Decrease in trade and other
payables (1) (758) (277)
Movement in provisions 88 8 7
Loss on disposal of property, 32 - -
plant and equipment
Net finance expense (12) (12) (21)
==================================== ========== ========== ==========
Cash inflow from operations 1,472 663 2,160
Net income taxes (paid)/received (82) 274 1,035
==================================== ========== ========== ==========
Net cash inflow from operating
activities 1,390 937 3,195
Cashflow from investing
activities
Interest received 12 12 21
Proceeds from disposal 14 - -
of property, plant and
equipment
Purchase of property, plant
and equipment (420) (152) (217)
Payments to acquire intangible
fixed assets (2,045) (1,436) (3,014)
==================================== ========== ========== ==========
Net cash used in investing
activities (2,439) (1,576) (3,210)
Cashflows from financing
activities
Share issue 158 - 11
==================================== ========== ========== ==========
Net cash generated from
financing activities 158 - 11
Net decrease in cash and
cash equivalents (891) (639) (4)
Cash and cash equivalents
at beginning of year 4,666 4,707 4,707
Exchange adjustments 134 (68) (37)
Cash and cash equivalents
at end of period 3,909 4,000 4,666
==================================== ========== ========== ==========
Notes to the interim report
1. Basis of preparation
Gresham Computing plc (LSE: "GHT", "Gresham" or the "Company" or
the "Group") is a limited liability company and is listed on the
London Stock Exchange. The Company's registered address is
Aldermary House, 10 - 15 Queen Street, London, EC4N 1TX and the
Company's registration number is 1072032.
These condensed interim financial statements are unaudited, have
not been reviewed by the Group's auditors, and do not constitute
statutory accounts within the meaning of the Companies Act
2006.
These condensed interim financial statements have been prepared
on a going concern basis and in accordance with IAS 34 'Interim
Financial Reporting', the Disclosure and Transparency Rules and the
Listing Rules of the Financial Conduct Authority, and were approved
on behalf of the Board by the Chief Executive Officer Ian Manocha
and Chief Financial Officer Rob Grubb on 23 August 2016.
The accounting policies and methods of computation applied in
these condensed interim financial statements are consistent with
those applied in the Group's most recent annual financial
statements for the year ended 31 December 2015.
The financial statements for the year ended 31 December 2015,
which were prepared in accordance with International Financial
Reporting Standards, as endorsed by the European Union ('IFRS'),
and with those parts of the Companies Act 2006 applicable to
companies reporting under IFRS, have been delivered to the
Registrar of Companies. The auditors' opinion on those financial
statements was unqualified and did not contain a statement made
under s498(2) or (3) of the Companies Act 2006.
Copies of these condensed interim financial statements and the
Group's most recent annual financial statements are available from
the Group's website www.gresham-computing.com or by writing to the
Company Secretary at the Company's registered office.
2. Segmental information
The segmental disclosures reflect the analysis presented on a
monthly basis to the chief operating decision maker of the
business, the Chief Executive and the Board of Directors.
During the year ended 31 December 2015 the Group re-evaluated
the internal presentation of its operating segments to more
appropriately aggregate the differing sets of risks that the
Group's businesses face.
For management purposes, the Group is organised into the
following reportable segments:
-- Clareti Solutions - supply of solutions predominantly to the
finance and banking markets across Asia Pacific, EMEA and North
America. These solutions include Clareti Transaction Control
("CTC") currently and for future periods will include other
associated Clareti platform applications.
-- Other Solutions - supply of a range of well established
solutions to enterprise-level customers in a variety of end
markets.
The change has had the following impact on classification of
operating segments:
Previous classification Current classification
RTFS CTC Clareti Solutions
============= =======================
Non-CTC RTFS Other Solutions
=========== ============= =======================
Legacy Other Solutions
Products
"RTFS" refers to Real-Time Financial Solutions and "EMEA" refers
to Europe, the Middle East and Africa.
Disclosures in respect of the 6 months ended 30 June 2015 have
been updated accordingly.
6 Months Ended 30 June 2016 (unaudited)
Adjustments,
Clareti Other central
and
Solutions Solutions eliminations Total
GBP'000 GBP'000 GBP'000 GBP'000
========================== ========== ========== ============= ========
Revenue
External customer 3,162 4,650 - 7,812
Inter-segment - - - -
========================== ========== ========== ============= ========
Total revenue 3,162 4,650 - 7,812
Cost of sales (57) (1,398) - (1,455)
========================== ========== ========== ============= ========
Gross profit 3,105 3,252 - 6,357
98% 70% 81%
Administrative expenses (5,496) (5,496)
========================== ========== ========== ============= ========
Operating profit/loss) 3,105 3,252 (5,496) 861
Interest revenue 12
Interest expense -
========================== ========== ========== ============= ========
Profit before taxation
before exceptional
items 873
Exceptional items (196)
========================== ========== ========== ============= ========
Profit before taxation
after exceptional items 677
Taxation 241
========================== ========== ========== ============= ========
Profit after taxation 918
========================== ========== ========== ============= ========
6 months ended 30 June 2015 (unaudited)
Adjustments,
===========================
Clareti Other central
and
===========================
Solutions Solutions eliminations Total
GBP'000 GBP'000 GBP'000 GBP'000
=========================== ========== ========== ============= ========
Revenue
External customer 2,174 4,913 - 7,087
Inter-segment - - - -
=========================== ========== ========== ============= ========
Total revenue 2,174 4,913 - 7,087
Cost of sales (39) (1,306) - (1,345)
=========================== ========== ========== ============= ========
Gross profit 2,135 3,607 - 5,742
98% 73% 81%
Administrative expenses (5,017) (5,017)
=========================== ========== ========== ============= ========
Operating profit/loss) 2,135 3,607 (5,017) 725
Interest revenue 12
Interest expense -
=========================== ========== ========== ============= ========
Profit before taxation
before exceptional items 737
Exceptional items (90)
=========================== ========== ========== ============= ========
Profit before taxation
after exceptional items 647
Taxation 250
=========================== ========== ========== ============= ========
Profit after taxation 897
=========================== ========== ========== ============= ========
3. Taxation
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 Dec
2016 2015 2015
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
==================================== ========== ========== ==========
Current Tax
UK Corporation tax charge/(credit)
- current year - (325) (892)
UK Corporation tax charge/(credit)
- adjustment to prior year 83 - 98
Overseas tax charge/(credit)
- current year - 75 139
Overseas tax charge/(credit)
- adjustment to prior year - - (21)
---------- ---------- ----------
83 (250) (676)
Deferred Tax
Derecognition/(recognition)
of deferred tax asset (356) - 322
Tax rate change adjustment 32 - (14)
========== ========== ==========
(324) - 308
Tax credit (241) (250) (368)
========== ========== ==========
4. Earnings per ordinary share
Basic earnings per share amounts are calculated by dividing net
profit for the period attributable to ordinary equity holders of
the parent by the weighted average number of ordinary shares
outstanding during the period.
Diluted earnings per share amounts are calculated by dividing
the net profit attributable to ordinary equity holders of the
parent by the weighted average number of ordinary shares
outstanding during the period plus the weighted average number of
ordinary shares that would be issued on the conversion of all the
dilutive potential ordinary shares into ordinary shares.
The following reflects the profit and share data used in the
basic and diluted loss per share computations:
6 months 6 months 12 months
=============================
ended ended ended
=============================
30 June 30 June 31 Dec
2016 2015 2015
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
============================= =========== =========== ===========
Net profit attributable
to owners of the parent 918 897 1,950
Number Number Number
============================= =========== =========== ===========
Basic weighted average
number of shares 63,302,746 62,233,478 63,238,526
Dilutive potential ordinary
shares:
Employee share options 2,133,073 5,658,000 2,178,202
Diluted weighted average
number of shares 65,435,819 67,891,478 65,416,728
=============================== =========== =========== ===========
There have been no other transactions involving ordinary shares
or potential ordinary shares between the reporting date and the
date of completion of this interim statement.
5. Dividends paid and proposed
No dividends were declared or paid during the period or
comparative periods.
6. Principal risks and uncertainties
The principal risks and uncertainties facing the Group are
disclosed in the Group's financial statements for the year ended 31
December 2015, available from www.gresham-computing.com and remain
unchanged.
7. Adjusted EBITDA reconciliation
Adjusted EBITDA for the Group's operations is calculated as
EBITDA excluding exceptional charges, reconciled as follows:
6 months 6 months
ended ended
30 June 30 June
2016 2015
Unaudited Unaudited
GBP'000 GBP'000
=============================== ========== ==========
Profit before tax including
exceptional charge 677 647
Exceptional charge 196 90
================================== ========== ==========
Profit before tax excluding
exceptional charge 873 737
Amortisation and depreciation 527 392
Share option charge 81 29
Interest net (12) (12)
Adjusted EBITDA profit 1,469 1,146
================================== ========== ==========
8. Statement of directors' responsibilities
The Directors are responsible for preparing the half-yearly
financial report, in accordance with applicable law and
regulations.
The Directors confirm, to the best of their knowledge, that this
condensed set of financial statements:
-- has been prepared in accordance with IAS 34 as adopted by the European Union; and
-- includes a fair review of the information required by Rules
4.2.7 and 4.2.8 of the Disclosure and Transparency Rules of the
United Kingdom Financial Conduct Authority.
9. Related party transactions
No related party transactions have taken place during the first
six months of the year that have materially affected the financial
position or performance of the Company.
There have been no changes in the related parties transactions
described in the last annual report that could have a material
effect on the financial position or performance of the Company in
the first six months of the current financial year.
Prior to publication, the information contained within this
announcement was deemed to constitute inside information under the
Market Abuse Regulations (EU) No 596/2014 ("MAR").
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SESFWDFMSEDA
(END) Dow Jones Newswires
August 24, 2016 02:00 ET (06:00 GMT)
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