TIDMGLOO
RNS Number : 8076Z
Gloo Networks PLC
01 June 2016
Gloo Networks plc
("Gloo" or "the Company")
Results for the period from incorporation to 31 March 2016
London, 1 June 2016 - Gloo Networks plc, a digital
transformation company that aims to acquire and develop trusted
media brands, announces its results for the period from
incorporation on 16 February 2015 to 31 March 2016.
Over the period, Gloo Networks generated a loss after taxation
of GBP2.7m, reflecting operating expenses and diligence costs
incurred in the continued pursuit of its stated investment
strategy. At 31 March 2016, Gloo Networks held over GBP27.2m in
cash.
Rebecca Miskin, Gloo's Chief Executive Officer commented: "We
are excited about the investment opportunities which we continue to
see in the market. The media and content industries remain in a
state of transition driven by digital disruption, which we are well
positioned to capitalise on once we secure our platform
acquisition."
Notice of Annual General Meeting
Gloo Networks announces that Notice of the Annual General
Meeting of the Company is being posted to shareholders today. The
Annual General Meeting is to be held at Travers Smith LLP, 10 Snow
Hill, London EC1A 2AL on 7 July 2016 at 10 a.m.
The Notice will also be available on the Company's website at
www.gloonetworks.com.
Enquiries:
Liberum Capital Limited (Nominated Adviser and Joint Broker)
Tel: +44 20 3100 2000
Neil Elliot
Chris Clarke
Jonathan Wilkes-Green
Numis Securities Limited (Joint Broker)
Tel: +44 20 7260 1000
Lorna Tilbian
Nick Westlake
Teneo (PR Adviser)
London - United Kingdom
Tel: +44 20 7240 2486
James Knowles
Chloe Maier
New York - USA
Tel: +1 (646) 561-3512
Aimee Baxter
Daniel Strauss
Report and Audited Consolidated Financial Statements
From incorporation
to 31 March 2016
GLOO NETWORKS PLC
Company number 09441537
CHAIRMAN'S STATEMENT AND STRATEGIC REPORT
I am pleased to present to our shareholders the Audited
Consolidated Financial Statements for the period from incorporation
on 16 February 2015 to 31 March 2016, consolidating the results of
Gloo Networks plc ("the Company") and Gloo Networks Jersey Limited
(together, the "Group").
Strategy
Gloo Networks plc is a digital transformation company that aims
to connect some of the world's most-loved content with its
most-valued consumers. It intends to acquire trusted consumer
brands in the media sector that appeal to attractive socio-economic
groups and use data and technology to change their business models
to ultimately unlock value and increase profitability. The Company
intends to acquire and run businesses initially with an enterprise
value in the range of GBP250 million to GBP1 billion and is led by
digital transformation experts Rebecca Miskin (Chief Executive
Officer) and Juan Lopez-Valcarcel (Chief Product and Operations
Officer). On 14 December 2015, Arnaud de Puyfontaine was appointed
as Non-Executive Chairman of the Company.
Since listing in August 2015, the Company has pursued its stated
strategy, and has successfully raised GBP30 million from a range of
financial institutions. The Directors continue to review a number
of potential acquisition opportunities, controlling the Group's
planned levels of expenditure during the pre-acquisition phase.
Results
The Group's loss after taxation for the period from
incorporation to 31 March 2016 was GBP2,666,998. In that period,
the Group incurred GBP2,739,701 of administrative expenses,
received interest of GBP72,703 and at the period end held a cash
balance of GBP27,242,121.
Dividend policy
The Company has not yet acquired a trading business and the
Directors therefore consider it inappropriate to make a forecast of
the likely level of any future dividends. The Directors intend to
determine the Company's dividend policy following completion of the
Company's first acquisition and in any event, will only commence
the payment of dividends when it becomes commercially prudent to do
so. There are no arrangements in place under which future dividends
are to be waived or agreed to be waived.
Risks
The Directors have carried out a robust assessment of the
principal risks facing the Group including those that would
threaten its business model, future performance, solvency or
liquidity. Further detail in relation to the risks faced by the
Group is set out on page 29.
Outlook
During the period, the Group has made encouraging progress with
potential acquisition opportunities and the Directors look forward
to providing further updates to shareholders in due course.
Arnaud de Puyfontaine Rebecca Miskin
Chairman Director
31 May 2016
31 May 2016
GLOO NETWORKS PLC
Company number 09441537
REPORT OF THE DIRECTORS
The Directors are pleased to submit their Report and the Audited
Consolidated Financial Statements for the period from incorporation
on 16 February 2015 to 31 March 2016.
Results and dividends
For the period to 31 March 2016, the Group's loss was
GBP2,666,998.
It is the Board's policy that prior to making the first
acquisition, no dividends will be paid. Following the first
acquisition, subject to availability of distributable reserves,
dividends will be paid to shareholders when the Directors believe
it is appropriate and prudent to do so.
Future developments
The Company continues to look for opportunities in line with its
defined investment strategy being the acquisition and development
of businesses with an enterprise value at the time of acquisition
of between GBP250 million and GBP1 billion. Gloo intends to acquire
businesses that appeal to attractive socio-economic groups, and
through the use of data and technology, ensure these businesses
fully realise their digital potential, thereby unlocking value and
increasing profitability.
Share capital
Details of shares issued by the Company during the period are
set out in note 13 of the financial statements.
Directors
The Directors of the Company who served during the period and
subsequent to the date of this report are:
Arnaud de Puyfontaine, Non-Executive Chairman
Date of appointment: 14 December 2015
Arnaud de Puyfontaine's career in the media and communications
industry has spanned over 25 years during which time he has
reshaped the European/US media landscape in a variety of
international roles including Chief Executive of Hearst UK,
Editions Mondadori and Emap. Arnaud is currently Chief Executive of
Vivendi SA, the international media content and entertainment
group. He was appointed Vivendi CEO after joining the group in
November 2013 as Senior Executive Vice President of Media and
Content activities.
Vivendi is the parent of Universal Music Group, the world's
largest music company, and Canal+ Group, a European leader in pay
TV and European TV and film production.
Previously, Arnaud was the Chief Executive Officer of Hearst UK,
part of Hearst Corporation. In 2011, he led the acquisition and
integration of 102 brands from the Lagardère Group, before being
appointed Managing Director of Western Europe in August 2013.
At Hearst Corporation, Arnaud worked alongside Gloo Network's
Chief Executive Officer Rebecca Miskin, and successfully managed an
iconic media portfolio which included Cosmopolitan, Elle, Good
Housekeeping and Harper's Bazaar.
Prior to this, Arnaud was Chairman and Chief Executive Officer
of Editions Mondadori France, becoming General Head of all digital
business for the Mondadori Group.
Arnaud joined Emap France in 1995, where he was a member of the
founding team and responsible for Télé Poche, Studio Magazine and
the establishment of the Emap Star Division. He was appointed Chief
Executive Officer of Emap France in 1998 and joined the board of
Emap Plc in 2000.
Arnaud de Puyfontaine is a graduate of the ESCP, the Multimedia
Institute and Harvard Business School and was named Chevalier
(Knight) of the Légion d'honneur in 2015.
Rebecca Miskin, Chief Executive Officer
Date of appointment: 16 February 2015
Rebecca Miskin is CEO of Gloo Networks, founded in 2015 with the
aim of marrying technology and media to transform trusted brands
into exciting new businesses. Rebecca is a global business leader
and digital transformation expert with a 23 year international
track record.
Before founding Gloo Networks, Rebecca acted as Digital Strategy
Director and Change Agent of Hearst UK, part of Hearst Corporation,
where she led the post-acquisition integration of Hachette
Filipacchi UK. During this time, Rebecca successfully increased
revenues, operating profits and operating margins, whilst doubling
the company's digital traffic, securing their position as the
largest UK magazine publisher online.
Previously, Rebecca joined NBC Universal's international
headquarters in London and was subsequently headhunted to New York
to spearhead the turnaround of iVillage Networks, part of a group
of digital businesses purchased for US$600 million. Before NBC
Universal, she also held successful roles at Time Inc., Excite and
Reed Elsevier.
Since 2011, Rebecca has held the position of non-executive
director on the board of Centaur Media plc where she is chair of
the remuneration committee and a member of both the audit and
nomination committees.
Rebecca is also actively engaged in international executive and
digital mentoring and has proven herself to be an exceptional
business partner to young, emerging talent.
Rebecca holds a joint honours degree in French and Italian from
the University of London and a Masters in European Business
Management from Cranfield University's School of Management.
Juan Lopez-Valcarcel, Chief Product and Operations Officer
Date of appointment: 24 March 2015
Juan is Chief Product and Operations Officer. He is a global
digital product and operations expert with 20 years'
experience.
Prior to founding Gloo Networks, Juan served as Pearson plc's
Chief Digital Officer of International Operations, where he led all
digital product strategy, engineering and digital partnerships
outside North America and also held executive responsibilities over
data science, user experience and efficacy.
Previously, Juan worked at NBC Universal in New York as Vice
President for Strategy at iVillage Networks and General Manager for
its display business. Before NBC Universal, he led product and
technology transformation projects for media and technology
companies in the US and Europe as part of Booz Allen (now
Strategy&).
Juan started his digital career in 1996 as co-founder of the
first local internet portal in Spain and continues to be actively
engaged in the digital community as an angel investor and
mentor.
He is a member of the International Academy of Digital Arts
& Sciences and was appointed in 2015 as an Association Member
of BUPA, the international healthcare company.
Juan holds a double degree in Law & Economics from ICADE
University (Spain) and an MBA from INSEAD.
Mark Brangstrup Watts, Executive Director
Date of appointment: 16 February 2015
Mark Brangstrup Watts founded Marwyn, the asset management and
corporate finance group, in 2002 with James Corsellis. Mark is
joint managing partner of Marwyn Capital LLP, which provides
corporate finance advice, and Marwyn Investment Management LLP,
which provides asset management solutions and investment advisory
services (both of which are regulated by the Financial Conduct
Authority). Mark is a director of Marwyn Asset Management Limited,
a regulated fund manager and also a trustee of the Marwyn Trust, a
charity focused on initiatives supporting education and
entrepreneurship for young people in disadvantaged communities.
Mark has a beneficial interest in Axio Capital Solutions Limited,
the company secretary of the Company and the initial subscriber of
the Company. Marwyn has launched 15 companies in partnership with
experienced management teams across a variety of sectors, typically
executing buy and build strategies. Mark has held board positions
on several Official List and AIM listed companies, including
Entertainment One Limited, Advanced Computer Software plc, Inspicio
plc and Talarius plc.
It is currently intended that, following the completion of the
Company's first acquisition, Mark will adopt a non-executive
role.
James Corsellis, Executive Director
Date of appointment: 16 February 2015
James Corsellis founded Marwyn, the asset management and
corporate finance group, in 2002 with Mark Brangstrup Watts. James
is joint Managing Partner of Marwyn Capital LLP, which provides
corporate finance advice, and Marwyn Investment Management LLP,
which provides asset management solutions and investment advisory
services, (both of which are regulated by the Financial Conduct
Authority). James is a director of Marwyn Asset Management Limited,
a regulated fund manager, and also a trustee of the Marwyn Trust, a
charity focused on initiatives supporting education and
entrepreneurship for young people in disadvantaged communities.
James has a beneficial interest in Axio Capital Solutions Limited,
the company secretary of the Company and the initial subscriber of
the Company. Marwyn has launched 15 companies across a variety of
sectors with James providing support to these companies, using his
experience of working with a number of companies in various roles
(including as Chairman of Entertainment One Limited and director of
Breedon Aggregates Limited, Concateno plc and Catalina Holdings
Limited) as well as his operating experience as the CEO and founder
of technology business, iCollector plc and CM Interactive.
It is currently intended that, following the completion of the
Company's first acquisition, James will adopt a non-executive
role.
Directors' interests
The Directors have no interests in the Ordinary shares of the
Company but have interests in the Participation shares which are
detailed in note 17.
Directors' remuneration
The emoluments of the individual Directors for the period are
detailed in note 6.
Substantial shareholdings
At 31 March 2016 the following interests in 3% or more of the
issued Ordinary shares had been notified to the Company.
Shareholders % Shareholding
============================== ===============
Funds managed by Marwyn
Asset Management 34.9%
Invesco Asset Management
Limited 16.3%
Ruffer LLP 9.8%
City Financial Investment
Company Limited 9.8%
Magnetar Financial (UK)
LLP 5.5%
Hargreave Hale Limited 5.2%
Standard Life Investments
Limited 4.9%
Herald Investment Management
Limited 3.3%
Independent auditors
The Directors have reason to believe that PricewaterhouseCoopers
LLP conducted an effective audit. The Directors have provided the
auditors with full access to all of the books and records of the
Company. PricewaterhouseCoopers LLP has expressed its willingness
to continue to act as auditors to the Company and a resolution for
its re-appointment will be proposed at the forthcoming Annual
General Meeting.
Corporate governance
The Directors recognise the importance of sound corporate
governance commensurate with the size of the Group and the
interests of the shareholders. The Group is governed by the Board
of Directors. The Board comprises a Non-Executive Director, Arnaud
de Puyfontaine and four Executive Directors: Rebecca Miskin, Juan
Lopez-Valcarcel, Mark Brangstrup Watts and James Corsellis. It is
intended that Mark Brangstrup Watts and James Corsellis will adopt
non-executive roles following the completion of the Company's first
acquisition. So far as is practicable, taking into account the size
and nature of the Company, the Directors intend to comply with the
Quoted Companies Alliance Corporate Governance Guidelines for
Smaller Quoted Companies to the extent appropriate to the size and
nature of the Company, upon completion of the first acquisition by
the Company.
Audit and risk committee
At present, the Company does not consider it necessary to
establish an audit committee given the nature of its board
structure and operations. The Board will undertake all functions
that would normally be delegated to the audit committee, including
reviewing annual and interim results, receiving reports from its
auditors, agreeing the auditors' remuneration and assessing the
effectiveness of the audit and internal control environment. Where
necessary the Board will obtain specialist external advice from
either its auditors or other advisers. The Board will establish an
audit committee upon completion of the first acquisition by the
Company.
Nomination and remuneration committee
The Company does not intend to establish remuneration and
nomination committees until the completion of the Company's first
acquisition as those committees are not currently appropriate given
the nature of the Company's board structure and operations.
Accordingly, the Board will review the remuneration of the
Directors annually and agree reasonable and market standard (as
regards level) non-executive fees, based upon market information
sourced from appropriate external consultants. Consideration will
be given by the Board to future succession plans for members of the
Board, as well as consideration as to whether the Board has the
skills required to manage the Company effectively. The Board
intends to establish a remuneration and nomination committee upon
completion of the first acquisition of the company.
Share dealing
The Company has systems in place to ensure compliance by the
Board, the Company, and its 'applicable employees' (as defined in
the AIM Rules for Companies) with the provisions of the AIM Rules
for Companies relating to dealings in securities of the Company and
has adopted a share dealing code for this purpose. The Directors
believe that the share dealing code adopted by the Board is
appropriate for a Company quoted on AIM. The Board will comply with
Rule 21 of the AIM Rules for Companies relating to Directors'
dealings and will take all reasonable steps to ensure compliance by
the Company's 'applicable employees'. The share dealing code will
be reviewed by the Directors to ensure compliance with the new
European Union Market Abuse Regulation, which will become effective
across Europe and directly applicable to the UK on 3 July 2016.
Relations with Shareholders
The Directors are always available for communication with
Shareholders and all Shareholders have the opportunity, and are
encouraged, to attend and vote at the Annual General Meetings of
the Company during which the Board will be available to discuss
issues affecting the Company. The Board stays informed of
Shareholders' views via regular meetings and other
communications.
Statement of going concern
The Directors have considered the financial position of the
Group and have concluded that it is appropriate to prepare the
financial statements on a going concern basis.
Internal control
The Board is responsible for establishing and maintaining the
Company's system of internal control and reviewing its
effectiveness. Internal control systems are designed to meet the
particular needs of the Company and the particular risks to which
it is exposed. The procedures are designed to manage rather than
eliminate risk and by their nature can only provide reasonable but
not absolute assurance against material misstatement or loss.
The Board has reviewed the Company's risk management and control
systems and believes that the controls are satisfactory given the
nature and size of the Company.
Financial risk profile
The Company's financial instruments comprise mainly of cash and
various items such as payables and receivables that arise directly
from the Company's operations. Details of the risks relevant to the
Group are included in the notes to the financial statements and on
pages 29 to 33.
Directors' responsibilities
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
have prepared the group financial statements in accordance with
International Financial Reporting Standards (IFRSs) as adopted by
the European Union. Under company law the Directors must not
approve the financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of the group
and the company and of the profit or loss of the group for that
period. In preparing these financial statements, the Directors are
required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and accounting estimates that are reasonable and prudent;
-- state whether applicable IFRSs as adopted by the European
Union have been followed, subject to any material departures
disclosed and explained in the financial statements; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the company's
transactions. They are also responsible for disclosing with
reasonable accuracy at any time the financial position of the
company and the group and enabling them to ensure that the
financial statements and the Directors' Remuneration Report comply
with the Companies Act 2006 and, as regards the group financial
statements, Article 4 of the IAS Regulation. In addition, they have
a responsibility to safeguard the assets of the Company and the
group and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity
of the Company's website. Legislation in the United Kingdom
governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
The Directors consider that the Annual Period End Report and
financial statements, taken as a whole, are fair, balanced and
understandable and provide the information necessary for
Shareholders to assess the Company's performance, business model
and strategy.
Each of the Directors, whose names and functions are listed in
the Chairman's Statement and Strategic Report, confirm that, to the
best of their knowledge:
-- the group financial statements, which have been prepared in
accordance with IFRSs as adopted by the EU, give a true and fair
view of the assets, liabilities, financial position and loss of the
group; and
-- the Chairman's Statement and Strategic Report includes a fair
review of the development and performance of the business and the
position of the group, together with a description of the principal
risks and uncertainties that it faces.
Disclosure of information to Auditors
Each of the persons who is a Director at the date of approval of
this report confirms that:
-- so far as the Director is aware, there is no relevant audit
information of which the Group's auditors are unaware; and
-- each Director has taken all the steps that he/she ought to
have taken as a Director in order to make himself/herself aware of
any relevant audit information and to establish that the Group's
auditors are aware of that information.
Directors' insurance
The Company also purchased and maintained throughout the
financial period Directors' and Officers' liability insurance in
respect of itself and its Directors. This confirmation is given and
should be interpreted in accordance with the provisions of s418 of
the Companies Act 2006.
On behalf of the Board
Rebecca Miskin Juan Lopez-Valcarcel
Director Director
31 May 2016 31 May 2016
INDEPENT AUDITORS' REPORT
Independent auditors' report to the member of Gloo Networks
plc
Report on the financial statements
Our opinion
In our opinion:
-- Gloo Networks plc's group financial statements and Company
financial statements (the "financial statements") give a true and
fair view of the state of the group's and of the company's affairs
as at 31 March 2016 and of the group's loss and the group's and the
company's cash flows for the 58 week period (the "period") then
ended;
-- the group financial statements have been properly prepared in
accordance with International Financial Reporting Standards
("IFRSs") as adopted by the European Union;
-- the Company financial statements have been properly prepared
in accordance with IFRSs as adopted by the European Union and as
applied in accordance with the provisions of the Companies Act
2006; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
What we have audited
The financial statements, included within the Report and Audited
Consolidated Financial (the "Annual Report"), comprise:
-- the Consolidated and Company statement of financial position as of 31 March 2016;
-- the Consolidated statement of comprehensive income for the period then ended;
-- the Consolidated and Company statement of cash flows for the period then ended;
-- the Consolidated and Company statement of changes in equity for the period then ended; and
-- the notes to the financial statements, which include a
summary of significant accounting policies and other explanatory
information.
The financial reporting framework that has been applied in the
preparation of the financial statements is IFRSs as adopted by the
European Union, and applicable law and, as regards the company's
financial statements, as applied in accordance with the provisions
of the Companies Act 2006.
In applying the financial reporting framework, the directors
have made a number of subjective judgements, for example in respect
of significant accounting estimates. In making such estimates, they
have made assumptions and considered future events.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion, the information given in the Strategic Report
and the Report of the Directors for the financial period for which
the financial statements are prepared is consistent with the
financial statements
Other matters on which we are required to report by
exception
Adequacy of accounting records and information and explanations
received
Under the Companies Act 2006 we are required to report to you
if, in our opinion:
-- we have not received all the information and explanations we require for our audit; or
-- adequate accounting records have not been kept by the
company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the company financial statements are not in agreement with
the accounting records and returns.
We have no exceptions to report arising from this
responsibility.
Directors' remuneration
Under the Companies Act 2006 we are required to report to you
if, in our opinion, certain disclosures of directors' remuneration
specified by law are not made. We have no exceptions to report
arising from this responsibility.
Responsibilities for the financial statements and the audit
Our responsibilities and those of the directors
As explained more fully in the Directors' Responsibilities set
out on page 7, the Directors are responsible for the preparation of
the financial statements and for being satisfied that they give a
true and fair view.
Our responsibility is to audit and express an opinion on the
financial statements in accordance with applicable law and
International Standards on Auditing (UK and Ireland) ("ISAs (UK
& Ireland)"). Those standards require us to comply with the
Auditing Practices Board's Ethical Standards for Auditors.
This report, including the opinions, has been prepared for and
only for the company's members as a body in accordance with Chapter
3 of Part 16 of the Companies Act 2006 and for no other purpose. We
do not, in giving these opinions, accept or assume responsibility
for any other purpose or to any other person to whom this report is
shown or into whose hands it may come save where expressly agreed
by our prior consent in writing.
What an audit of financial statements involves
We conducted our audit in accordance with ISAs (UK &
Ireland). An audit involves obtaining evidence about the amounts
and disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from
material misstatement, whether caused by fraud or error. This
includes an assessment of:
-- whether the accounting policies are appropriate to the
group's and the company's circumstances and have been consistently
applied and adequately disclosed;
-- the reasonableness of significant accounting estimates made by the directors; and
-- the overall presentation of the financial statements.
We primarily focus our work in these areas by assessing the
Directors' judgements against available evidence, forming our own
judgements, and evaluating the disclosures in the financial
statements.
We test and examine information, using sampling and other
auditing techniques, to the extent we consider necessary to provide
a reasonable basis for us to draw conclusions. We obtain audit
evidence through testing the effectiveness of controls, substantive
procedures or a combination of both.
In addition, we read all the financial and non-financial
information in the Annual Report to identify material
inconsistencies with the audited financial statements and to
identify any information that is apparently materially incorrect
based on, or materially inconsistent with, the knowledge acquired
by us in the course of performing the audit. If we become aware of
any apparent material misstatements or inconsistencies we consider
the implications for our report.
Philip Stokes (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP, Chartered
Accountants and Statutory Auditors
London
May 2016
-- The maintenance and integrity of the Gloo Networks plc
website is the responsibility of the Directors; the work carried
out by the auditors does not involve consideration of these matters
and, accordingly, the auditors accept no responsibility for any
changes that may have occurred to the financial statements since
they were initially presented on the website.
-- Legislation in the United Kingdom governing the preparation
and dissemination of financial statements may differ from
legislation in other jurisdictions.
GLOO NETWORKS PLC
Company number 09441537
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Consolidated
Period
to
31 March
Note 2016
--------------------------- ----- -----------------------------------------------------------
GBP
Administrative expenses 7 (2,739,701)
-----------------------------------------------------------
Operating loss (2,739,701)
Finance income 72,703
Finance costs -
-----------------------------------------------------------
Finance income 72,703
Loss before income
tax (2,666,998)
-----------------------------------------------------------
Income tax 8 -
-----------------------------------------------------------
Loss for the period (2,666,998)
Total other comprehensive
income -
-----------------------------------------------------------
Total comprehensive
loss for the period (2,666,998)
===========================================================
Attributable to:
Owners of the parent (2,666,998)
Loss per ordinary share
Basic and diluted loss
per share attributable
to ordinary equity
holders of the parent
(GBP) 16 (0.1822)
The Group's activities derive from continuing operations.
The notes on pages 15 to 28 form an integral part of these
consolidated financial statements.
GLOO NETWORKS PLC
Company number 09441537
CONSOLIDATED AND COMPANY STATEMENTS OF FINANCIAL POSITION
Consolidated Company
as at as at
31 March 31 March
Note 2016 2016
---------------------------- ----- --------------------------------------- ------------
GBP GBP
Assets
Non-current assets
Investment in subsidiaries 9 - 476
--------------------------------------- ------------
Total non-current
assets - 476
Current assets
Cash and cash equivalents 11 27,242,121 27,242,121
Other receivables 10 135,696 1,410,250
--------------------------------------- ------------
Total current assets 27,377,817 28,652,371
Total assets 27,377,817 28,652,847
======================================= ============
Capital and reserves
attributable to
equity holders of
the parent
Share capital 13 256,000 256,000
Share premium 13 29,551,492 29,551,492
Share based payment
reserve 17 34,799 34,799
Accumulated losses (2,666,998) (1,387,898)
--------------------------------------- ------------
Total equity 27,175,293 28,454,393
Current liabilities
Trade and other
payables 12 202,524 198,454
--------------------------------------- ------------
Total liabilities 202,524 198,454
Total equity and
liabilities 27,377,817 28,652,847
======================================= ============
The notes on pages 15 to 28 form an integral part of these
consolidated financial statements.
The financial statements on pages 11 to 14 were approved by the
Board of Directors on 31 May 2016 and were signed on its behalf
by:
Rebecca Miskin Juan Lopez-Valcarcel
Director Director
GLOO NETWORKS PLC
Company number 09441537
CONSOLIDATED AND COMPANY STATEMENTS OF CHANGES IN EQUITY
Consolidated statement of changes in equity
Share
based
Share Share payment Accumulated Total
Note Capital Premium reserve Losses equity
------------------ ----------------------- -------------------- ------------------------ ------------------------
GBP GBP GBP GBP GBP
Balance as
at 16 February
2015 - - - - -
Loss and total
comprehensive
loss for the
period - - - (2,666,998) (2,666,998)
Issue of share
capital 13 305,998 30,464,000 - - 30,769,998
Share issue
costs 13 - (912,508) - - (912,508)
Share
redemption 13 (49,998) - - - (49,998)
Share-based
payments 17 - - 34,799 - 34,799
Balance as
at 31 March
2016 256,000 29,551,492 34,799 (2,666,998) 27,175,293
================== ======================= ==================== ======================== ========================
Company statement of changes in equity
Share
based
Share Share payment Accumulated Total
Note Capital Premium reserve Losses equity
------------------ ----------------------- -------------------- ------------------------ ------------------------
GBP GBP GBP GBP GBP
Balance as
at 16 February
2015 - - - - -
Loss and total
comprehensive
loss for the
period - - - (1,387,898) (1,387,898)
Issue of share
capital 13 305,998 30,464,000 - - 30,769,998
Share issue
costs 13 - (912,508) - - (912,508)
Share
redemption 13 (49,998) - - - (49,998)
Share-based
payments 17 - - 34,799 - 34,799
Balance as
at 31 March
2016 256,000 29,551,492 34,799 (1,387,898) 28,454,393
================== ======================= ==================== ======================== ========================
The notes on pages 15 to 28 form an integral part of these
consolidated financial statements.
GLOO NETWORKS PLC
Company number 09441537
CONSOLIDATED AND COMPANY STATEMENTS OF CASH FLOWS
Consolidated Company
For the For the
period period
from 16 from 16
February February
2015 to 2015 to
31 March 31 March
Note 2016 2016
----------------------------- ----- ------------------------------ ------------------------------
GBP GBP
Cash flows from operating
activities
Loss before income tax (2,739,701) (1,460,601)
Adjustments to reconcile
loss before income tax
to net cash flows:
Increase in trade and other
receivables 10 (135,696) (1,410,250)
Increase in trade and other
payables 12 202,524 198,454
Share based payment expense 17 34,799 34,799
Net cash used in operating
activities (2,638,074) (2,637,598)
------------------------------ ------------------------------
Investing activities
Investment in subsidiary 9 - (476)
------------------------------
Net cash flows used in
investing activities - (476)
------------------------------ ------------------------------
Cash flows from financing
activities
Bank interest received 72,703 72,703
Redemption of preference
shares held in equity 13 (49,998) (49,998)
Proceeds from issue of
share capital 13 30,769,998 30,769,998
Share issue costs 13 (912,508) (912,508)
------------------------------ ------------------------------
Net cash generated from
financing activities 29,880,195 29,880,195
------------------------------ ------------------------------
Net increase in cash and
cash equivalents 27,242,121 27,242,121
Cash and cash equivalents
at beginning of the period - -
Cash and cash equivalents
at the end of the period 11 27,242,121 27,242,121
============================== ==============================
The notes on pages 15 to 28 form an integral part of these
consolidated financial statements.
GLOO NETWORKS PLC
Company number 09441537
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL INFORMATION
Gloo Networks plc (the "Company") is a digital transformation
company incorporated in England and Wales and domiciled in the
United Kingdom. It is a public limited company with company number
09441537 and has its registered office at 20 Buckingham Street,
London, WC2N 6EF. The Company wholly owns Gloo Networks Jersey
Limited (collectively, the "Group"), which was incorporated on the
formation of the Group.
2. ACCOUNTING POLICIES
(a) Basis of preparation
The Company was incorporated on 16 February 2015.
The Consolidated Financial Statements represent the period from
16 February 2015 until 31 March 2016 and have been prepared in
accordance with International Financial Reporting Standards (IFRS)
and IFRS Interpretations Committee (IFRS IC) interpretations as
adopted by the European Union ("IFRS"), and with those parts of the
Companies Act 2006 as applicable to companies reporting under
IFRS.
The Consolidated Financial Statements are prepared in accordance
with IFRS under the historical cost convention and are presented in
British pounds sterling, which is the presentational and functional
currency of the Company.
The principal accounting policies adopted in the preparation of
the Consolidated Financial Statements are set out below. The
policies have been consistently applied throughout the period
presented.
(b) New standards and amendments to International Financial Reporting Standards
Standards, amendments and interpretation effective and adopted
by the Group:
The accounting policies adopted in the presentation of these
Consolidated Financial Statements reflect the adoption of the
following new standards for annual periods beginning on or after 1
January 2015.
Annual Improvements to IFRSs 2011-2013 Cycle which were not
applicable to the Group.
Standards issued but not yet effective:
The following standards are issued (*subject to EU endorsement)
but not yet effective. The Group intends to adopt these standards,
if applicable, when they become effective. The effects of IFRS 15
and IFRS 16 are yet to be assessed. It is not expected that any of
the remaining standards will have a material impact on the
Group.
Standard Effective
Date
Amendments to IFRS 11 - Accounting 1 January
for Acquisitions of Interests in Joint 2016
Operations
Amendments to IAS 1 - Disclosure Initiative 1 January
2016
Amendments to IAS 16 and IAS 38 - Clarification 1 January
of Acceptable Methods of Depreciation 2016
and Amortisation
Amendments to IAS 27 - Equity Method 1 January
in Separate Financial Statements 2016
Annual improvements (2012-2014) 1 January
2016
Amendments to IAS 16 and IAS 41 - Bearer 1 January
plants 2016
IFRS 14 Regulatory Deferral Accounts 1 January
2016*
Amendments to IFRS 10, IFRS 12 and 1 January
IAS 28: Investment Entities - Applying 2016*
the Consolidation Exception
Amendments to IAS 12: Recognition of 1 January
Deferred Tax Assets for Unrealised 2016*
Losses
IFRS 15 - Revenue from Contracts with 1 January
Customers 2018*
IFRS 9 - Financial instruments 1 January
2018*
IFRS 16 - Leases 1 January
2019*
(c) Going concern
The Consolidated Financial Statements have been prepared on a
going concern basis, which assumes that the Group will continue to
be able to meet its liabilities as they fall due for the
foreseeable future. As the Group has significant cash reserves, the
Directors have concluded it remains appropriate to use the going
concern basis.
(d) Basis of consolidation
Subsidiaries are entities controlled by the Company. Control
exists when the Company is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to
affect those returns through its power over the entity. The
financial information of subsidiaries is fully consolidated from
the date that control commences until the date that control
ceases.
Intragroup balances, and any gains and losses or income and
expenses arising from intragroup transactions are eliminated on
consolidation.
(e) Statement of compliance
The Consolidated Financial Statements of the Group have been
prepared in accordance with International Financial Reporting
Standards as adopted by the European Union ("IFRS").
The preparation of financial statements in conformity with IFRS
requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of
applying the Group's accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the consolidated
financial statements are disclosed in note 3.
(f) Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call
deposits with an original maturity of three months or less.
(g) Financial liabilities
The Group recognises a financial liability on assuming a
financial obligation and derecognises financial liabilities when,
and only when, the Group's obligations are discharged, cancelled or
they expire.
(h) Interest income and expenses
Interest income on cash deposits, and expenses are accounted for
on an accruals basis.
(i) Costs directly attributable to the issue of equity
Share issue costs are placing expenses directly relating to the
issue of the Company's shares. These expenses include fees payable
under share placement agreements, printing, and distribution costs
and legal fees and any other applicable expenses. All such costs
are charged to equity and deducted from the proceeds received.
(j) Investments
Investments in subsidiaries are valued at cost less provision
for impairment.
(k) Share capital
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares are shown in share
premium as a deduction from the proceeds.
(l) Corporation tax
Corporation tax for the period presented comprises current and
deferred tax.
Current tax is the expected tax payable on the taxable income
for the period, using tax rates enacted or substantially enacted at
the balance sheet date, and any adjustment to taxes payable in
respect of previous periods.
Deferred tax is provided using the balance sheet liability
method, providing for temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes
and the amounts used for taxation purposes. A deferred tax asset is
recognised only to the extent that it is probable that future
taxable profits will be available against which the asset can be
utilised. Deferred tax assets are reduced to the extent that it is
no longer probable that the related tax benefit will be
realised.
(m) Loss per ordinary share
The Group presents basic earnings per ordinary share ("EPS")
data for its ordinary shares. Basic EPS is calculated by dividing
the profit or loss attributable to ordinary shareholders of the
Company by the weighted average number of ordinary shares
outstanding during the period. Diluted earnings per share is
calculated by adjusting the weighted average number of ordinary
shares outstanding to assume conversion of all dilutive potential
ordinary shares.
(n) Share based transactions
Equity-settled share based payments ("Participation shares") to
Directors and others providing similar services are measured at the
fair value of the equity instruments at the grant date, taking into
account any market performance conditions. The fair value is
expensed through administrative expenses, with a corresponding
increase in equity through the share based payment reserve, on a
straight line basis over the period that the employees become
unconditionally entitled to the awards.
(o) Pension benefits
The Group operates a defined contribution pension scheme and
pays contributions to privately administered pension plans on
behalf of employees as contractually agreed, or the equivalent
contribution is paid in cash to the employee. Accounting of the
contributions to pension schemes is in line with the treatment of a
defined contribution scheme. The Group has no further payment
obligations once the contributions have been paid. The
contributions are recognised as an expense on the accruals basis
and are included within administrative expenses in the Statement of
Comprehensive Income.
(p) Loan and other receivables
Loans and other receivables are non-derivative financial assets
with fixed determinable payments that are not quoted in an active
market. If collection of the amounts is expected in one year or
less they are classified as current assets. If not, they are
presented as non-current assets.
3. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES
The preparation of the Consolidated Financial Statements under
IFRS requires the Directors to consider estimates and assumptions
that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities. Estimates and
judgements are continually evaluated and are based on historical
experience and other factors including expectations of future
events that are believed to be reasonable under the circumstances.
Actual results may differ from these estimates.
The Directors have exercised judgement and made assumptions in
relation to the classification and valuation of the equity settled
Participation shares, and the calculation of the fair value of the
scheme at the grant date. These assumptions are disclosed in note
17.
For the period, the Directors do not consider that they have
made any other significant estimates, judgement or assumptions that
would materially affect the balances reported in these financial
statements.
4. SEGMENT INFORMATION
The Board of Directors is the Group's chief operating
decision-maker. As the Group had not yet made an acquisition as of
31 March 2016, the Group is organised and operates as one
segment.
5. OPERATIONAL LOSS
The operating loss is stated after charging auditors'
remuneration of GBP25,000. The total auditors' remuneration related
to fees payable for the audit of the parent company and
consolidated financial statements of GBP25,000 and fees payable for
non-audit services of GBP48,575.
6. EMPLOYEES AND DIRECTORS
(a) Staff costs for the Group during the period:
For the
period
from 16
February
2015 to
31 March
2016
-------------------------
GBP
Wages and salaries 1,178,458
Social security costs 151,152
Other pension costs 66,167
Share based payment
expense 34,869
Other employment related
expenses 101,089
Total employment cost
expense 1,531,735
=========================
(b) Directors' emoluments
The Board considers the Directors of the Company to be the key
management personnel of the Group.
The highest paid Director, Juan Lopez-Valcarcel, received a
salary of GBP287,724 during the period, and pension benefits of
GBP29,293. Juan's fixed annual salary is GBP235,000, effective from
12 January 2015, payable monthly in arrears, plus a pension
contribution of 10 per cent of his fixed annual salary. During the
period Juan received an annual bonus of GBP227,918 as outlined in
his service agreement. The annual bonus of up to 100 per cent of
salary per year is subject to an annual review.
Rebecca Miskin, received a salary of GBP363,445 during the
period, and pension benefits of GBP36,874. Rebecca's fixed annual
salary is GBP295,000, effective from 8 January 2015, payable
monthly in arrears, plus a pension contribution of 10 per cent of
her fixed annual salary. During the period Rebecca received an
annual bonus of GBP122,602 as outlined in her service agreement.
The annual bonus of up to GBP125,000 per year is subject to an
annual review.
Rebecca Miskin's service agreement contains a bonus arrangement,
which is dependent on the completion of each acquisition of a
trading business or company by the Group, until such point where
the Total Enterprise Value of all acquired businesses or companies
is equal to or greater than GBP200 million.
Up until this condition is satisfied, Rebecca shall be entitled
to a cash bonus of an amount equal to 0.5 percent of the enterprise
value of the transaction, as calculated by the Board (or the
Remuneration Committee, if one has been established) in its sole
and absolute discretion. If the Director's employment ceases prior
to the completion of such acquisitions, Rebecca shall be entitled
to receive a fair proportion of the bonus.
In addition to the aforementioned Director's fixed annual salary
and bonuses, the Company may pay a deal bonus from time to time. No
deal bonus or cash bonus is payable in respect of the completion of
the first acquisition, save as set out previously.
Arnaud de Puyfontaine received a director fee of GBP22,177
during the period. Arnaud's director fee is GBP75,000, effective
from 15 December 2015, payable monthly in arrears. Arnaud's
director fee will be reviewed upon completion of the Company's
first acquisition.
Mark Brangstrup Watts and James Corsellis are paid fees equal to
the prevailing national minimum wage for 35 hours per week. During
the period they each received a director fee of GBP13,534.
There were no share options exercised during the period. The
Participation shares owned by Directors are described in note
17.
(c) Key management compensation
The following table details the aggregate compensation paid in
respect of the members of the Board of Directors including the
Executive Directors.
For the
period
from 16
February
2015 to
31 March
Key management compensation 2016
-------------------------
GBP
Salaries and short
term employee benefits 704,145
Directors' bonuses 350,520
Post-employment benefits 66,167
Share based payment
expense 34,869
1,155,701
=========================
(d) Employed persons
The average monthly number of persons employed by the Group
(including Directors) during the period was as follows:
As at 31
March 2016
--------------
Number
of employees
Directors 4
Other 1
5
==============
(e) Pension benefits
The amount recognised as an expense for the payments made into
employees' private pension arrangements was GBP66,167. The amount
paid in lieu of payment into a private pension arrangement was
GBP21,459.
7. EXPENSES BY NATURE
For the
period
from 16
February
2015 to
31 March
2016
----------
GBP
Expenses by nature
Staff related costs 1,531,735
Office costs 101,495
Legal and professional
fees 723,035
Other expenses 383,436
2,739,701
==========
8. INCOME TAX
For the
period
from 16
February
2015 to
31 March
2016
--------------------------------
GBP
Analysis of credit
in period
Current tax on loss
for the period -
Total current tax -
================================
Reconciliation of effective rate and tax charge:
For the
period
from 16
February
2015 to
31 March
2016
--------------------------------
GBP
Loss on ordinary activities
before tax (2,666,998)
--------------------------------
Loss on ordinary activities
multiplied by the rate
of corporation tax
in the UK of 20.11% (536,333)
Effects of:
Unrecognised losses 536,333
Total taxation credit -
================================
The company is in its pre-acquisition phase and therefore, is
not recognising deferred tax asset due to the uncertainty of future
taxable income.
9. INVESTMENT IN SUBSIDIARIES
(a) Subsidiary undertakings of the Group
The Company directly owns the whole of the issued and fully paid
ordinary share capital of its subsidiary undertaking.
The subsidiary undertakings of the Company as at 31 March 2016
is presented below:
Proportion Proportion
of ordinary of ordinary
shares shares
Nature of Country held by held by
Subsidiary business of incorporation parent the Group
Gloo Networks Incentive
Jersey Limited vehicle Jersey 100% 100%
There are no restrictions on the Company's ability to access or
use the assets and settle the liabilities of the Company's
subsidiary. The Company's subsidiary has issued Participation
shares to management as is detailed in note 17.
Company GBP
Cost or valuation at 16
February 2015 and 31 March
2016 476
Net book value at 16 February
2015 and 31 March 2016 476
=====
10. OTHER RECEIVABLES
All receivables are current. There is no material difference
between the book value and the fair value of the other
receivables.
Consolidated Company
as at 31 as at 31
March 2016 March 2016
-------------------------------- ------------
GBP GBP
Amounts falling due
within one year
Amounts due from subsidiary - 1,278,137
VAT recoverable 114,011 114,011
Prepayments 19,626 18,043
Other receivables 2,059 59
135,696 1,410,250
-------------------------------- ------------
11. CASH AND CASH EQUIVALENTS
Consolidated Company
as at 31 as at
March 2016 31 March
2016
-------------- -----------
GBP GBP
Cash and cash equivalents
Cash at bank 27,242,121 27,242,121
27,242,121 27,242,121
============== ===========
Cash and cash equivalents comprise balances held at Barclays
Bank plc and are all held by the Company.
Credit risk is managed on a Group basis, Credit risk arises from
cash and cash equivalents and deposits with banks and financial
institutions. For banks and financial institutions, only
independently rated parties with a minimum short-term credit rating
of P-1, as issued by Moody's are used by the Group.
12. TRADE AND OTHER PAYABLES
Consolidated Company
as at 31 as at 31
March 2016 March 2016
------------------------------------------------------- --------------------------------
GBP GBP
Trade payables 113,925 113,925
Accruals 27,150 27,150
Other tax and national
insurance payable 26,542 26,542
Other creditors 34,907 30,837
202,524 198,454
======================================================= ================================
Trade and other
payables
due within 1 year 202,524 198,454
Trade and other
payables
due after 1 year - -
202,524 198,454
======================================================= ================================
There is no material difference between the book value and the
fair value of the trade and other payables.
13. CALLED UP SHARE CAPITAL
Consolidated Company
as at 31 as at
March 2016 31 March
2016
------------- ----------
GBP GBP
Allotted, called and
fully paid
25.6 million ordinary
shares of GBP0.01 each 256,000 256,000
256,000 256,000
============= ==========
On incorporation, 200 ordinary shares of GBP0.01 each and 49,998
preference shares of GBP1.00 each in the capital of the Company
were issued. The ordinary shares were each issued at a premium of
GBP1,000 per ordinary share and the preference shares were issued
at nominal value. Since then, the Company has issued the following
shares:
(i) 250 ordinary shares at a premium of GBP1,000 on 29 April
2015;
(ii) 224,995 ordinary shares at a premium of GBP1.19 per share
on 6 July 2015;
(iii) 1 ordinary share at a premium of GBP1.49 on 6 July
2015;
(iv) 374,554 ordinary shares by way of bonus issue out of the
Company's share premium; and
Upon the Company's admission to AIM, a further 25,000,000
ordinary shares were issued at GBP1.20 per share resulting in total
premium on transaction of GBP29,750,000. Total transaction costs
taken to share premium in relation to this issue of shares were
GBP912,508.
On 6 July 2015 the holders of the redeemable preference shares
signed a deed of waiver to irrevocably and unconditionally waive
their rights to redeem the 49,998 redeemable preference shares of
GBP1.00 each held by them in the Company. The financial effect of
this waiver was that the redeemable preference shares were
reclassified at the date of the waiver from a liability to equity
as the Company was no longer under an obligation to repay the
redeemable preference shares on demand from the holders. These
shares were fully redeemed on admission to AIM.
The share premium account at 31 March 2016 totalled
GBP29,551,492.
All issued shares are fully paid. The holders of ordinary shares
are entitled to receive dividends as declared and are entitled to
one vote per share at general meetings of the Company.
At 31 March 2016, 130 Participation shares were issued as
disclosed in note 17.
14. RESERVES
The following describes the nature and purpose of each reserve
within shareholders' equity:
Share premium
The amount subscribed for share capital in excess of nominal
value less any costs directly attributable to the issue of new
shares.
Retained earnings
Cumulative net gains and losses recognised in the consolidated
statement of comprehensive income.
Share based payment reserve
The Share based payment reserve is the cumulative amount
recognised in relation to the equity settled share based payment
scheme as further described in note 17.
15. INSTRUMENTS AND ASSOCIATED RISKS
The Group has the following categories of financial instruments
at the period end:
As at 31
March 2016
------------
GBP
Loans and receivables
Cash and cash equivalents 27,242,121
Other receivables 135,696
27,377,817
============
Financial liabilities
at amortised costs
Trade payables 113,925
113,925
============
The fair value and book value of the financial assets and
liabilities are equal.
The Group has exposure to the following risks from its use of
financial instruments:
-- Market risk
-- Liquidity risk
-- Credit risk
This note presents information about the Group's exposure to
each of the above risks and the Group's objectives, policies and
processes for measuring and managing these risks.
The Group's risk management policies are established to identify
and analyse the risks faced by the Group, to set appropriate risk
limits and controls and to monitor risks and adherence limits. Risk
management policies and systems are reviewed regularly to reflect
changes in market conditions and the Group's activities.
Treasury activities are managed on a Group basis under policies
and procedures approved and monitored by the Board. These are
designed to reduce the financial risks faced by the Group which
primarily relate to movements in interest rates.
Market risk
The Group's activities primarily expose it to the risk of
changes in interest rates due to the significant cash balance
currently held however any change in interest rates will not have a
material effect on the Group. The Group's operations are entirely
in their functional currency and accordingly, no translation
exposures arise in trade receivables or trade payables.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations as they fall due. The Group's
approach to managing liquidity is to ensure, as far as possible,
that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions,
without incurring unacceptable losses or risking damage to the
Group's reputation.
The Group currently meets all liabilities from cash reserves.
The Group's liability for operating expenses is monitored on an
ongoing basis to ensure cash resources are adequate to meet
liabilities as they fall due.
Credit risk
Credit risk is the risk that one party to a financial instrument
will cause a financial loss for the other party by failing to
discharge an obligation. The main credit risk relates to the cash
held with financial institutions. The Company manages its exposure
to credit risk associated with its cash deposits by selecting
counterparties with a high credit rating with which to carry out
these transactions. The counterparty for these transactions is
Barclays Bank plc, which holds a short-term credit rating of P-1,
as issued by Moody's. The Company's maximum exposure to credit risk
is the carrying value of the cash on the balance sheet.
Capital management
The Board's policy is to maintain a strong capital base so as to
maintain creditor and market confidence and to sustain future
development of the business. There were no changes in the Group's
approach to capital management during the period.
16. LOSS PER ORDINARY SHARE
Basic earnings per ordinary share is calculated by dividing the
profit attributable to equity holders of the company by the
weighted average number of ordinary shares in issue during the
period. Diluted earnings per share is calculated by adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares. Participation
shares (refer note 17) have not been included in the calculation of
diluted earnings per share because they are not dilutive for the
period presented.
For the
period
from 16
February
2015 to
31 March
2016
------------
GBP
Group
Loss attributable to
the owners of the parent (2,666,998)
Weighted average number
of ordinary shares in issue 14,636,785
Basic and diluted loss
per share (0.1822)
17. SHARE BASED PAYMENTS
Implementation of share incentive plan - Participation
shares
Arrangements were put in place shortly after the Company's
formation to create incentives for those who are expected to make
key contributions to the success of the Group. The Group's success
depends upon the sourcing of attractive investment opportunities,
the improvement of the target businesses, and their subsequent
growth or sale to realise attractive returns for shareholders.
Accordingly, an incentive scheme was created to reward key
contributors to the creation of value. At the period end, a total
of GBP34,799 was recorded in the share based payment reserve. This
is based on a grant date fair value of GBP150,200, spread over the
vesting period (defined below) and recognised for the period
between the grant date (defined below) and the reporting date.
On being offered, the Company may purchase the Participation
shares either for cash or for the issue of new Ordinary shares at
its discretion. The Company expects to settle in the issue of new
Ordinary shares and has therefore recognised this as an equity
settled scheme. The valuation of the Participation shares is
discussed below. The Participation shares may only be sold on this
basis if both the growth and at least one of the vesting conditions
(defined below) have been satisfied. If these conditions have not
been satisfied at the fifth anniversary of Gloo Networks Plc's
Admission to AIM "Admission" (i.e. 11 August 2020), the
Participation shares must be sold to the Company at the
subscription price. Details of the Participation shares issued are
shown on the next page.
Participation shares
During the period, Gloo Networks Jersey Limited issued
Participation shares to Rebecca Miskin, Juan Lopez-Valcarcel,
Marwyn Long Term Incentive LP, in which James Corsellis and Mark
Brangstrup Watts hold indirect interests, and Puyfamily Société
Civile an entity in which Arnaud de Puyfontaine is interested.
Grant date
The date at which the entity and another party agree to a
share-based payment arrangement, for accounting purposes is the
grant date. The grant dates for the majority of the Participation
shares (120) is 5 June 2015 and 4 December 2015 for the remaining
10. This is in line with when the share-based payments were
awarded.
Growth condition
The Growth Condition is that the compound annual growth of the
Company's equity value must be at least 10% per annum. The Growth
Condition takes into account new shares issued, dividends and
capital returned to shareholders.
Vesting conditions and Vesting period
The Participation shares are subject to certain vesting
conditions, at least one of which must be (and continue to be)
satisfied in order for a holder of the Participation shares to
exercise his or her redemption rights. The vesting period is a
period during which the vesting conditions are to be satisfied. The
vesting period ends on the 11 August 2020.
The vesting conditions are as follows:
(i) a sale of all or a material part of the business of Gloo
Networks Jersey Limited;
(ii) a sale of all of the issued ordinary shares of Gloo
Networks Jersey Limited occurring;
(iii) a winding up of Gloo Networks Jersey Limited
occurring;
(iv) a sale or change of control of the Company; or
(v) it is later than the third anniversary of Admission (i.e. 11
August 2018).
Rebecca Miskin, Juan Lopez-Valcarcel and Arnaud de Puyfontaine
have agreed that if they cease to be involved in the Company during
the period from the Admission date to and including the third
anniversary of the Admission date then in certain circumstances a
proportion of their Participation shares may be forfeited in
accordance with the leaver provisions in their subscription
agreements.
Value
Subject to the provisions detailed above, the Participation
shares can be sold to the Company for an aggregate value equivalent
to 15% of the increase in "Shareholder Value" in the Company.
Shareholder Value is broadly defined as the increase in market
capitalisation of all Ordinary shares of the Company issued up to
the date of sale, allowing for any dividends and other capital
movements.
Holding of Participation shares
Participation shares have been created and shares have been
allocated and issued as shown in the table below.
Nominal Number Subscription Fair
price of Participation price value
per shares at grant
share date
-------- ------------------ ------------- ----------
GBP GBP GBP
Marwyn Long Term
Incentive LP 1 50 2,000 50,550
Rebecca Miskin 1 50 50 50,550
Juan Lopez-Valcarcel 1 20 20 20,220
Puyfamily Societe
Civile - Arnaud de
Puyfontaine 1 10 2,000 28,880
------------------ ------------- ----------
130 4,070 150,200
================== ============= ==========
Valuation of Participation shares
The Participation shares allocated pursuant to employee
shareholder agreements with Gloo Networks Jersey Limited, have been
accounted for in accordance with IFRS 2, "Share Based
Payments".
Details of the value of the Participation shares are set out
below, based on 100% of the shares granted coming to vest:
Employee
Shareholder
Shares
Number of Participation
shares granted 130
Exercise price n/a
From the
third anniversary
of Admission
to the fifth
Vesting period/date Anniversary
Fair value of shares GBP150,200
at grant
As at period end, GBP34,799 has been recognised in the
consolidated statement of comprehensive income and consolidated
statement of financial position as a share-based payment reserve in
relation to the Participation shares.
The value of the Participation shares granted under the scheme
has been calculated using a Monte Carlo model. The fair value is
based on a weighted average of GBP30.72 million raised on
incorporation and ungeared volatility of 20% based on a weighted
average share price over the vesting period. An expected term input
range of between two and four years has been used, being the likely
period of time between the date on which an acquisition takes place
and the start and end of the redemption period. The participation
shares are subject to a growth condition, which is a market
performance condition, and as such has been taken into
consideration in determining their fair value. The risk-free rate
of return for the Awards was taken from zero-coupon UK Government
bonds with a redemption period in line with the expected term. An
average value of between 0.65% (2 years) and 1.10% (4 years) has
been sourced from Thomson Datastream as at each date of grant. Due
to the narrow range of risk free rates, a risk free rate of 1.00%
for all scenarios has been used. The model incorporates a range of
probabilities for the likelihood of an acquisition being made of a
given size.
18. RELATED PARTY TRANSACTIONS
In the opinion of the Directors, there is no single controlling
party.
Parties are considered to be related if one party has the
ability to control the other party or exercise significant
influence over the other party, or the parties are under common
control or influence, in making financial or operational
decisions.
Mark Brangstrup Watts and James Corsellis are managing partners
of Marwyn Capital LLP which provides corporate finance advice and
various office and finance support services to the Company. During
the period Marwyn Capital LLP charged a total of GBP360,815 (net of
VAT as applicable). Marwyn Capital LLP was owed an amount of
GBP24,957 at the balance sheet date.
Mark Brangstrup Watts and James Corsellis are also Managing
Partners of Marwyn Investment Management LLP. Marwyn Investment
Management LLP entered into an employment contract with one of the
Company's employees on 17 December 2014 pursuant to which the
employee agreed to provide services to the Company. Marwyn
Investment Management and the Company agreed that the salary and
other expenses relating to that employee's engagement which were
incurred by Marwyn Investment Management LLP prior to the Company's
incorporation would be recharged to, and repaid by, the Company.
The Company and the employee have subsequently entered into a new
contract of employment dated 15 May 2015.
Mark Brangstrup Watts and James Corsellis are the ultimate
beneficial owners of Axio Capital Solutions Limited which provides
company secretarial, administrative and accounting services to the
Group. During the period Axio Capital Solutions Limited charged
GBP63,453 in respect of services supplied, of which GBP20,000 was
included in placing costs and taken against share premium. Axio
Capital Solutions Limited was owed an amount of GBP2,983 at the
balance sheet date.
Marwyn Long Term Incentive LP, a partnership in which James
Corsellis and Mark Brangstrup Watts are beneficially interested,
holds Participation shares as disclosed in note 17.
Gloo Networks Jersey Limited entered into employee shareholders
agreements with each of Rebecca Miskin and Juan Lopez-Valcarcel
pursuant to which each waived certain employment rights in return
for receipt of Participation shares.
Pre-Admission, MVI LP subscribed for a total of 600,000 ordinary
shares as detailed in note 13. On Admission MVI LP subscribed for
8,933,333 ordinary shares at GBP1.20 per share pursuant to a
subscription agreement dated 31 July 2015. MVI LP is managed by
Marwyn Asset Management Limited, the company of which Mark
Brangstrup Watts and James Corsellis are directors and ultimate
beneficial owners.
At 31 March 2016, Gloo Networks Jersey, the subsidiary, owed
GBP1,278,137 to the Company for services paid on its behalf.
19. COMMITMENTS AND CONTINGENT LIABILITIES
There were no commitments or contingent liabilities outstanding
at 31 March 2016 that require disclosure or adjustment in these
financial statements.
20. COMPANY LOSS FOR THE PERIOD
The Company has not presented its own statement of comprehensive
income as permitted by section 408 of the Companies Act 2006. The
loss and total comprehensive loss for the period and the total loss
attributable to shareholders was GBP1,387,898.
21. POST BALANCE SHEET EVENTS
There have been no material post balance sheet events that would
require disclosure or adjustment to these financial statements.
GLOO NETWORKS PLC
Company number 09441537
RISKS
Risks applicable to investing in the Company
An investment in the Ordinary Shares involves a high degree of
risk. No assurance can be given that Shareholders will realise a
profit or will avoid loss on their investment. The Board has
identified the following risks which it considers to be the most
significant for investors in the Company. The risks referred to
below do not purport to be exhaustive and are not set out in any
particular order of priority. If any of the following events
identified below occur, the Company's business, financial
condition, capital resources, results and/or future operations and
prospects could be materially adversely affected. In that case, the
market price of the Ordinary Shares could decline and investors may
lose part or all of their investment. Additional risks and
uncertainties not currently known to the Board or which the Board
currently deem immaterial may also have an adverse effect on the
Company's business. In particular, the Company's performance may be
affected by changes in the market and/or economic conditions and in
legal, regulatory and tax requirements.
Market and competition risks
-- The Company has a limited operating history
The Company was incorporated on 16 February 2015. The Company
has limited financial statements and/or historical financial data.
The Company is therefore subject to all of the risks and
uncertainties associated with any new business enterprise including
the risk that the Company will not achieve its investment
objectives and that the value of an investment in the Company could
decline and may result in the total loss of all capital invested.
The past performance of companies, assets or funds managed by the
Directors, or persons affiliated with them, in other ventures, is
not necessarily a guide to the future business, results of
operations, financial condition or prospects of the Company.
-- Industry-specific risks
It is anticipated that that the Company will invest in
businesses with a particular focus on the UK and US (and, to a
lesser extent, other European) internet and media sectors. These
sectors are in a transitional period and the ability of the Company
to generate transactional income streams will be closely tied to
the Company's ability to capture and analyse consumer data
accurately, the loyalty of consumers to any acquired brand, as well
as overall levels of consumer demand, which may be affected by
factors beyond the Company's control, such as changes in global and
local economic activity levels.
Key management risks
The Company relies heavily on a small number of key individuals,
in particular the Directors, to identify, acquire and manage
suitable assets, companies and/or businesses. The retention of
their services cannot be guaranteed. Accordingly the loss of any
such key individual may have a material adverse effect on the
business, financial condition, results of operations and prospects
of the Company. In addition, there is a risk that the Company will
not be able to recruit executives of sufficient expertise or
experience to maximise any opportunities that present themselves,
or that recruiting and retaining those executives is more costly or
takes longer than expected. The failure to attract and retain those
individuals may adversely affect the Company's operations.
Investment risks
-- Acquisition of targets
The Company's ability to implement the Investment Policy is be
limited by its ability to identify and acquire suitable
acquisitions or suitable ancillary acquisitions. Suitable
opportunities may not always be readily available. The Company's
initial and future acquisitions may be delayed or made at a
relatively slow rate because, inter alia:
- the Company intends to conduct detailed due diligence prior to
approving acquisitions;
- the Company may conduct extensive negotiations in order to
secure and facilitate an acquisition;
- it may be necessary to establish certain structures in order
to facilitate an acquisition;
- competition from other investors, market conditions or other
factors may mean that the Company cannot identify attractive
acquisitions or such acquisitions may not be available at the rate
the Company currently anticipates;
- the Company may be unable to agree acceptable terms;
- the Company may be unable to raise bank finance on terms the
Directors consider reasonable; or
- the Company may need to raise further capital to make
acquisitions and/or fund the assets or businesses invested in,
which may not be achieved.
-- Disposals
The Company may make investments that it cannot realise through
trade sale or flotation at an acceptable price. Some investments
may be lost through insolvency. Any of these circumstances could
have a negative impact on the profitability and value of the
Company.
-- Unsuccessful transaction costs
There is a risk that the Company may incur substantial legal,
financial and advisory expenses arising from unsuccessful
transactions which may include transaction documentation, legal,
accounting and other due diligence.
-- Timing of investments
As detailed above, the Company cannot accurately predict how
long it will actually take to deploy the capital available to it or
whether it will be able to do so at all. Any significant delay or
inability to find a suitable acquisition may have a material
adverse effect on the business, financial condition, results of
operations and prospects of the Company.
Pursuant to the AIM Rules for Companies, if the Company has not
substantially implemented its Investment Policy within 18 months of
Admission, the Investment Policy will be subject to approval by
Shareholders at the next annual general meeting of the Company and
annually thereafter.
-- Success of Investment Policy not guaranteed
The Company's level of profit will be reliant upon the
performance of the assets acquired and the Investment Policy (in
both its current form and as amended from time to time). The
success of the Investment Policy depends on the Directors' ability
to identify investments in accordance with the Company's investment
objectives and to interpret market data correctly. No assurance can
be given that the strategy to be used will be successful under all
or any market conditions, that the Company will be able to identify
opportunities meeting the Company's investment criteria, that the
Company will be able to invest its capital on attractive terms or
that the Company will be able to generate positive returns for
Shareholders. If the Investment Policy is not successfully
implemented, this may have a material adverse effect on the
business, financial condition, results of operations and prospects
of the Company.
-- Change in Investment Policy
The Investment Policy may be modified and altered from time to
time with the approval of Shareholders, so it is possible that the
approaches adopted to achieve the Company's investment objectives
in the future may be different from those the Directors currently
expect to use. Any such change may have a material adverse effect
on the business, financial condition, results of operations and
prospects of the Company.
-- Concentration of risk
There can be no assurance that the actual investment
opportunities that the Directors are able to source for the Company
will not lead to a concentration of risk. To the extent that any
acquisitions are concentrated in any particular niche of the
internet and media sector, region, country or asset class,
downturns affecting the source of the concentration may result in a
total or partial loss of the value of such investments and have a
material adverse effect on the business, financial condition,
results of operations and prospects of the Company.
-- Material facts or circumstances not revealed in the due diligence process
Prior to making or proposing any investment, the Company will
undertake legal, financial and commercial due diligence on
potential investments to a level considered reasonable and
appropriate by the Company on a case by case basis. However, these
efforts may not reveal all material facts or circumstances that
would have a material adverse effect upon the value of the
investment. In undertaking due diligence, the Company will need to
utilise its own resources and may be required to rely upon third
parties to conduct certain aspects of the due diligence process.
Further, the Company may not have the ability to review all
documents relating to the investee company and assets. Any due
diligence process involves subjective analysis and there can be no
assurance that due diligence will reveal all material issues
related to a potential investment. Any failure to reveal all
material facts or circumstances relating to a potential investment
may have a material adverse effect on the business, financial
condition, results of operations and prospects of the Company.
Financial risks
When a suitable acquisition or ancillary acquisition is
identified, it is possible that the Company will need to raise
further capital to purchase such investment and / or facilitate the
development of such investment. There is no guarantee that the
Company will be able to raise such capital and this may prejudice
the Company's ability to make and develop such investments. This
inability to raise further capital may have a material adverse
effect on the business, financial condition, results of operations
and prospects of the Company.
Risks relating to the Ordinary Shares and their trading on
AIM
-- Potential Marwyn conflicts of interest
Two of the Company's five Directors, James Corsellis and Mark
Brangstrup Watts, are directors of became closely related to funds
managed by Marwyn Asset Management Limited, the investment manager
of a significant shareholder. While Marwyn has a record of
long-term support for the companies in which it invests and in
whose management it is involved, and the Marwyn significant
shareholder has entered into a lock-up agreement in respect of its
investment in the Company, it is possible that Marwyn's interests
may differ from those of other Shareholders and that the potential
for conflict between the roles of James Corsellis and Mark
Brangstrup Watts as Directors of the Company and related parties of
Marwyn may adversely affect the interests of the Company's other
Shareholders.
-- Limited trading record for the Ordinary Shares
Since the Ordinary Shares were only recently listed, their
market value is uncertain. The market price of the Ordinary Shares
may be volatile and may go down as well as up and investors may
therefore be unable to recover the value of their original
investment. The Company's operating results and prospects from time
to time may be below the expectations of market analysts and
investors. Additionally, stock market conditions may affect the
Ordinary Shares regardless of the performance of the Company. Stock
market conditions are affected by many factors, such as general
economic outlook, movements in or outlook on interest rates and
inflation rates, currency fluctuations, commodity prices, changes
in investor sentiment towards particular market sectors and the
demand and supply of capital.
Accordingly, the market price of the Ordinary Shares may not
reflect the underlying value of the Company's net assets and the
price at which investors may dispose of their Ordinary Shares at
any point in time may be influenced by a number of factors, only
some of which may pertain to the Company while others may be
outside the Company's control.
-- Further issues of Ordinary Shares could dilute the interests of existing Shareholders
The Company may in the future issue additional securities,
including Ordinary Shares, as well as options, warrants and rights
relating to its securities, for any purpose. Future issues may
consist of Ordinary Shares or securities having greater rights and
preferences and may be priced at a discount to the market price of
the Ordinary Shares and/or below the prevailing net asset value of
each Ordinary Share. It may not be possible for existing
Shareholders to participate in such future issues by the Company
and the possibility of such future issues of Ordinary Shares may
cause the market price of the Ordinary Shares to decline.
-- Investing company status
The Company is currently considered to be an investing company
for the purposes of the AIM Rules for Companies. As a result, it
may benefit from certain partial carve-outs to the AIM Rules for
Companies, such as those in relation to the classification of
Reverse Takeovers. Were the Company to lose investing company
status for any reason, such carve-outs would cease to apply. It is
anticipated that any acquisition will be considered to be a Reverse
Takeover.
-- Trading on AIM
An investment in shares traded on AIM is generally perceived to
involve a higher degree of risk and to be less liquid than an
investment in shares listed on the Official List. AIM has been in
existence since June 1995 but its future success, and the liquidity
of the market for the Ordinary Shares cannot be guaranteed.
Consequently, it may be more difficult for an investor to sell his
or her Ordinary Shares than it would be if the Ordinary Shares were
listed on the Official List, and he or she may receive less than
the amount paid. In addition, there can be no guarantee that the
Company will always maintain a quotation on AIM. If it fails to
retain such a quotation, investors may decide to sell their
Ordinary Shares, which could have an adverse impact on the price of
the Ordinary Shares. If in the future the Company decides to
maintain a quotation on another exchange in addition to AIM, the
level of liquidity of shares traded on AIM may decline if
Shareholders choose to trade on that market rather than on AIM.
-- Value and liquidity of the Ordinary Shares
It may be difficult for an investor to realise his or her
investment. The shares of publicly traded companies can have
limited liquidity and their share prices can be highly volatile.
The price at which the Ordinary Shares will be traded and the price
at which investors may realise their investment will be influenced
by a large number of factors, some specific to the Company and its
operations and others which may affect companies operating within a
particular sector or quoted companies generally. A relatively small
movement in the value of an investment or the amount of income
derived from it may result in a disproportionately large movement,
unfavourable as well as favourable, in the value of the Ordinary
Shares or the amount of income received in respect thereof.
Investors should be aware that the value of the Ordinary Shares
could go down as well as up, and investors may therefore not
recover their original investment. Furthermore, the market price of
the Ordinary Shares may not reflect the underlying value of the
Company's net assets.
Risks relating to legislation and regulations
-- Legislative and regulatory risks
Any investment is subject to changes in regulation and
legislation. As the direction and impact of changes in regulations
can be unpredictable, there is a risk that regulatory developments
will not bring about positive changes and opportunities, or that
the costs associated with those changes and opportunities will be
significant. In particular, there is a risk that regulatory change
will bring about a significant downturn in the prospects of one or
more acquired businesses, rather than presenting a positive
opportunity.
-- Taxation
There can be no certainty that the current taxation regime in
England and Wales or overseas jurisdictions within which the
Company may operate will remain in force or that the current levels
of corporation taxation will remain unchanged. Any change in the
tax status or tax legislation may have a material adverse effect on
the financial position of the Company. Investors should be aware
however, that investment in the Company by way of subscription for
Ordinary Shares may not be treated as a "qualifying holding" for
the purposes of the venture capital trust rules (as set out in Part
6 Chapter 4 of the UK Income Tax Act 2007) because, the Company may
not fulfil the requirements imposed upon it which need to be met in
order for the Ordinary Shares to have qualifying holding status.
Investors should also note that the venture capital trust
legislation contains numerous complex conditions for a holding of
Ordinary Shares to be a qualifying holding, several of which must
be satisfied by the investing venture capital trust itself. The
Company is not responsible for the satisfaction of such
conditions.
-- Availability of tax reliefs
The Company's strategy is not influenced by whether or not
capital gains tax reliefs or enterprise investment scheme reliefs
are available to Shareholders and investors should not rely on the
availability of those reliefs in deciding whether to invest in the
Company.
-- Suitability
As an investment vehicle incorporated in England and Wales, the
Company may only be marketed to, and is only suitable as an
investment for, sophisticated investors with an understanding of
the risks inherent in investment in emerging market jurisdictions
and an ability to accept the potential total loss of all capital
invested in the Company.
GLOO NETWORKS PLC
Company number 09441537
ADVISERS
Corporate Finance Adviser Company Secretary and Administrator
Marwyn Capital LLP Axio Capital Solutions
11 Buckingham Street Limited
London, WC2N 6DF One Waverley Place, Union
Street,
St Helier, Jersey, JE1
1AX
Principal Bankers Solicitors to the Company
Barclays Bank PLC Travers Smith LLP
1 Churchill Place 10 Snow Hill
London, E14 5HP London, EC1A 2AL
Independent Auditors Registrars
PricewaterhouseCoopers Capita Registrars
LLP The Registry, 34 Beckenham
1 Embankment Place Road
London, WC2N 6RH Beckenham, Kent, BR3 4TU
This information is provided by RNS
The company news service from the London Stock Exchange
END
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June 01, 2016 02:00 ET (06:00 GMT)
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