TIDMING
RNS Number : 1976N
Ingenta PLC
23 September 2019
23 September 2019
Ingenta plc
Interim Results
Ingenta plc (AIM: ING), ("Ingenta", the "Company" or the
"Group") a leading provider of world-class software and services to
the global publishing industry, is pleased to announce its
unaudited interim results for the six months to 30 June 2019.
Financial Key Points
-- Trading in line with Board expectations and on target to
deliver materially improved full year results
-- Group revenues of GBP5.3m (2018: GBP6.4m) with recurring revenue at 79% (2018: 75%)
-- Adjusted EBITDA(*) of GBP0.3m (2018: GBP0.5m)
-- Cash from operations up to GBP1.0m (2018: GBP0.5m)
-- Cash balances increased from GBP1.3m at 31 December 2018 to GBP1.8m at 30 June 2019
-- Net cash generation of GBP0.5m (2018: GBP0.1m outflow) after
dividend payments of GBP0.3m (2018: GBP0.3m) and exceptional
restructuring costs of GBP0.3m (2018: GBP0.5m)
Operational Key Points
-- Significant Commercial Order to Cash customer go live in 2019
-- Four new Commercial customer wins announced during 2019, with
combined implementation revenues of GBP0.7m and annual fees of
GBP0.1m
-- Commercial product offering expanded from publishing into the
wider media and music industries
-- All software implementations remain on track
-- Company profile substantially de-risked with an ongoing
annual cost base of approximately GBP9.5m
-- Combined direct, sales and administration cost base reduced
by over GBP3m on an annualised basis
-- Good sales pipeline growth in both traditional markets and the broader media industry
(*) Earnings before Interest, Tax, Depreciation and Amortisation
is calculated before foreign exchange differences and restructuring
costs.
Martyn Rose, Chairman of Ingenta plc, commented:
"I am pleased to report on the first half results for the Group
and to outline the significant operational progress that has been
made since the beginning of the year. As previously announced,
Ingenta has been transformed into a unified software company
providing a coherent set of products and services underpinned by a
responsive management structure better equipped to serve and adapt
to our customers' changing needs."
"Our commercial product offering is now gaining real momentum,
in particular online content delivery solutions and our ability to
deal with the ever-increasing complexity of rights and royalty
management. In this area, we have had success on a number of
fronts. First, our suite of commercial products went live with a
major international fulfilment and distribution customer, setting a
benchmark for the applicability of our solutions in the modern
publishing world."
"Second, we have won four new customer contracts for our
commercial products this year, one of which operates in the wider
media sector, which is a positive endorsement of the suitability of
our solutions outside traditional publishing markets. From a
financial perspective, these new customer wins will start to
deliver revenue in the second half of the year."
"On an operational level, I am encouraged to see that the
fundamental changes we made to the business are delivering tangible
benefits. Notably, the business generated GBP1.0m of operating
cashflows in the period, resulting in an overall cash increase of
GBP0.5m after payment of dividends and restructuring costs."
"The Board remains confident of achieving a material improvement
in the trading performance of the Group for the remainder of the
year and beyond, as the benefits of the recently announced sales
wins and restructuring begin to be recognised in our reported
results. Further, the Board is proposing to exercise its share
buyback authority, as approved at the most recent AGM."
For further information please contact:
Ingenta plc Tel: 01865 397 800
Scott Winner / Jon Sheffield
Cenkos Securities plc Tel: 0207 397 8900
Nicholas Wells / Harry Hargreaves
Financial Review
From the 1st January 2019, the Group adopted IFRS16 'Leases' and
applied the full retrospective approach to transition permitted by
the standard in which prior period amounts are restated as if the
standard had been in effect at lease commencement. Further details
are provided in note 2 of these interim results.
Statement of Comprehensive Income
Group revenue has declined to GBP5.3m (2018: GBP6.4m) compared
to the same period last year which is largely the result of
implementation projects coming to an end. The new projects won in
2019 will start to deliver revenue from the second half of the
year. Gross profit margins have increased from 38.8% to 39.6% as
the Group's restructuring efforts start to deliver results. In all,
the Group's direct, sales and administrative cost base has declined
by over GBP3m on an annualised basis and includes GBP0.3m (2018:
GBP0.5m) of additional restructuring costs.
Taxation costs have increased as a result of changes in US state
tax laws impacting on the 2018 and 2019 calculations. In addition,
the estimated 2018 research and development tax credit receipt due
in the second half of the year has been revised downwards by
GBP0.1m to GBP0.3m (2018: GBP0.2m).
Under IFRS16, lease costs are now charged to the income
statement as depreciation and interest costs. The prior period
depreciation comparative has been restated to include GBP61k of
depreciation and GBP11k of interest. Further details are included
in note 2 of these interim results.
Although the adjusted EBITDA declined to GBP0.3m (2018: GBP0.5m
restated), the loss from operations, which includes GBP0.3m (2018:
GBP0.5m) of restructuring costs, improved to GBP0.2m (2018: GBP0.5m
loss). The Group expects to be profitable in the second half of the
year as the new sales wins, combined with the lower cost base, flow
through into the reported results.
Statement of Financial Position
Adoption of IFRS16 'Leases' has led to the groups operating
leases being reported as a right to use asset within property,
plant and equipment along with a lease creditor within liabilities.
These reporting standard changes have been reflected in the
comparative disclosures.
Statement of Cash Flows
The Group's cash inflow from operations has increased
substantially to GBP1m (2018: GBP0.5m) as the restructuring
efficiencies mentioned previously continue to deliver results. At
the half year, the Group's cash position increased by GBP0.5m
(2018: GBP0.1m reduction) to a total of GBP1.8m (2018: GBP2m) and
includes payment of the final 2018 dividend of GBP0.3m (2018:
GBP0.3m).
As in the prior year, the R&D tax credit of GBP0.3m (2018:
GBP0.2m) is due for receipt in the second half of the year and did
not have an impact on the first half cash flow.
Scott Winner
Chief Executive Officer
Condensed Consolidated Interim Statement of Comprehensive
Income
Restated
Unaudited Unaudited
Six months Six months
ended ended
30 June 2019 30 June 2018
Note GBP'000 GBP'000
Group revenue 5,250 6,404
Cost of sales (3,171) (3,921)
------------- -------------
Gross profit 2,079 2,483
Sales and marketing expenses (454) (602)
Administrative expenses (1,824) (2,445)
Loss from operations (199) (564)
Finance costs (11) (17)
Loss before tax (210) (581)
Tax (92) (1)
Retained loss for the period (302) (582)
Other comprehensive expenses which
will be reclassified subsequently
to profit or loss:
Exchange differences on translating
foreign operations (12) (25)
Total comprehensive loss for the
period (314) (607)
Basic loss per share - pence 4 (1.86) (3.59)
------------- -------------
Diluted loss per share - pence 4 (1.86) (3.59)
Analysis of (loss) / profit from
operations:
Profit before net finance costs,
tax, depreciation and amortisation,
restructuring costs and foreign exchange
gains and losses (adjusted EBITDA) 346 534
Depreciation (186) (173)
Impairment of intangibles - (320)
Foreign exchange (loss) (12) (68)
Restructuring costs (347) (537)
------------- -------------
Loss from operations (199) (564)
Condensed Consolidated Interim Statement of Financial
Position
Restated
Unaudited Unaudited
30 June 2019 30 June 2018
Note GBP'000 GBP'000
Non-current assets
Goodwill 3 4,324 4,900
Other intangible assets 3 208 308
Property, plant & equipment 544 647
Investments accounted for using
the equity method - -
-------------- --------------
5,076 5,855
Current assets
Trade and other receivables 5 2,431 2,767
Research and development tax credit
receivable 282 174
Cash and cash equivalents 1,809 2,051
4,522 4,992
Total assets 9,598 10,847
-------------- --------------
Equity
Share capital 1,692 1,692
Share premium - -
Merger reserve 11,055 11,055
Reverse acquisition reserve (5,228) (5,228)
Translation reserve (888) (870)
Share option reserve 18 51
Retained earnings (2,031) (1,261)
4,618 5,439
Non-current liabilities
Deferred tax liability 42 62
Finance leases 265 445
-------------- --------------
307 507
Current liabilities
Trade and other payables 6 2,290 3,082
Deferred income 2,383 1,819
-------------- --------------
4,673 4,901
Total equity and liabilities 9,598 10,847
-------------- --------------
Unaudited Condensed Consolidated Interim Statement of Changes in
Equity
Share Share Merger Reverse Translation Share Retained Total
capital premium reserve acquisition reserve option Earnings
reserve reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
January 2019 1,692 - 11,055 (5,228) (876) 16 (1,475) 5,184
Dividends paid - - - - - - (254) (254)
Transactions
with owners - - - - - (254) (254)
--------- --------- --------- ------------- ------------ --------- ---------- --------
Loss for the
period - - - - - - (302) (302)
Share based
payment expense 2 2
Other comprehensive
income:
Exchange differences
on translation
of foreign operations - - - - (12) - - (12)
--------- --------- --------- ------------- ------------ --------- ---------- --------
Total comprehensive
income / (expense)
for the period - - - - (12) 2 (302) (312)
--------- --------- --------- ------------- ------------ --------- ---------- --------
Balance at 30
June 2019 1,692 - 11,055 (5,228) (888) 18 (2,031) 4,618
--------- --------- --------- ------------- ------------ --------- ---------- --------
Share Share Merger Reverse Translation Share Retained Total
capital premium reserve acquisition reserve option Earnings
reserve reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
January 2018 1,692 8,999 11,055 (5,228) (845) 51 (9,424) 6,300
Dividends paid - - - - - - (254) (254)
Share premium
reduction - (8,999) - - - 8,999 -
--------- --------- --------- ------------- ------------ --------- ---------- --------
Transactions
with owners - (8,999) - - - 8,745 (254)
--------- --------- --------- ------------- ------------ --------- ---------- --------
Loss for the
period - - - - - - (582) (582)
Other comprehensive
income:
Exchange differences
on translation
of foreign operations - - - - (25) - - (25)
--------- --------- --------- ------------- ------------ --------- ---------- --------
Total comprehensive
income / (expense)
for the period - - - - (25) - (582) (607)
--------- --------- --------- ------------- ------------ --------- ---------- --------
Balance at 30
June 2018 1,692 - 11,055 (5,228) (870) 51 (1,261) 5,439
--------- --------- --------- ------------- ------------ --------- ---------- --------
Condensed Consolidated Interim Statement of Cash Flows
Restated
Unaudited Unaudited
Six months Six months
ended ended
30 June 2019 30 June 2018
Note GBP'000 GBP'000
Loss before tax (210) (581)
Adjustments for:
Depreciation 186 173
Impairment of intangibles - 320
Share based payment expense 2 -
Interest expense 11 17
Unrealised foreign exchange differences (12) (25)
Decrease in trade and other receivables 2,196 1,927
Decrease in trade and other payables (1,220) (1,287)
Cash inflow from operations 953 544
Tax Paid (38) (1)
Net cash inflow from operating activities 915 543
Cash flows from financing activities
Dividends paid (254) (254)
Payment of leases (157) (103)
Interest paid (11) (17)
------------- -------------
Net cash used in financing activities (422) (374)
Cash flows from investing activities
Acquisition of subsidiaries, contingent
consideration - (248)
Purchase of property, plant and equipment (7) (1)
Net cash used in investing activities (7) (249)
Net increase / (decrease) in cash and
cash equivalents 486 (80)
Cash and cash equivalents at beginning
of period 1,323 2,131
Cash & cash equivalents at end of period 1,809 2,051
------------- -------------
Notes to the Unaudited Interim Report for the six months ended
30 June 2019
1. Nature of operations and general information
Ingenta plc (the "Company") and its subsidiaries (together 'the
Group') is a provider of technology and supporting services to
content providers and publishers. The nature of the Group's
operations and its principal activities are set out in the full
annual financial statements.
The Company is incorporated in the United Kingdom under the
Companies Act 2006. The Company's registration number is 00837205
and its registered office is 8100 Alec Issigonis Way, Oxford OX4
2HU. The condensed consolidated interim financial statements were
authorised for issue by the Board of Directors on 23 September
2019.
The financial information set out in this interim report does
not constitute statutory accounts as defined in section 404 of the
Companies Act 2006. The Group's statutory financial statements for
the year ended 31 December 2018, prepared under IFRS as adopted by
the European Union, have been filed with the Registrar of
Companies. The auditor's report on those financial statements was
unqualified and did not contain a statement under section 498 (2)
or section 498 (3) of the Companies Act 2006.
2. Basis of preparation
These unaudited condensed consolidated interim financial
statements are for the six months ended 30 June 2019. They have
been prepared following the recognition and measurement principles
of IFRS as adopted by the European Union. They do not include all
of the information required for full annual financial statements
and should be read in conjunction with the consolidated financial
statements of the Group for the year ended 31 December 2018.
These condensed consolidated interim financial statements have
been prepared on the going concern basis under the historical cost
convention and have been prepared in accordance with the accounting
policies adopted in the last annual financial statements for the
year ended 31 December 2018 with the exception of IFRS16 'leases'
which was adopted on the 1(st) January 2019 and detailed further
below.
The accounting policies have been applied consistently
throughout the Group for the purposes of preparation of these
consolidated interim financial statements.
A detailed set of accounting policies can be found in the annual
accounts available on our website, www.ingenta.com or by writing to
the Company Secretary at the registered office as above.
New Standards adopted as at 1 January 2019
IFRS 16 'Leases' provides a new model for lessee accounting in
which all leases, other than short-term and small-ticket-item
leases, will be accounted for by the recognition on the balance
sheet of a right-to-use asset and a lease liability, and the
subsequent amortisation of the right-to use asset over the lease
term. Ingenta has adopted IFRS 16 using the full retrospective
approach to transition permitted by the standard in which prior
period amounts are restated as if the standard had been in effect
at lease commencement. At lease inception, a right to use asset is
created along with a lease liability which represents the net
present value of the expected lease payments. The presentation and
timing of the recognition of charges in the income statement has
changed as the straight line operating lease costs reported under
IAS17 have been replaced by depreciation of a right to use asset
and interest charges on the lease liability. A summary of the
changes is shown below:
Period Right of Lease liability Depreciation Interest Lease payments
use asset at period
NBV at period end
end
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------- --------------- ---------------- ------------- --------- ---------------
2014 853 853 - - -
2015 731 886 122 32 0
2016 609 782 122 32 136
2017 487 628 122 27 181
2018 366 468 122 21 181
2019 244 303 122 15 181
2020 122 177 122 10 136
2021 - - 122 4 181
H1 2018 427 550 61 11 90
H1 2019 305 387 61 8 90
3. Goodwill and Intangibles
Full details of the Group's policies on Goodwill and Intangibles
is presented in the financial statements for the year ended 31
December 2018.
4. Profit / (loss) per share
Basic profit / (loss) per share is calculated by dividing the
profit / (loss) attributable to ordinary shareholders by the
weighted average number of ordinary shares outstanding during the
period.
For diluted profit / (loss) per share, the weighted average
number of ordinary shares in issue is adjusted to assume conversion
of all dilutive potential ordinary shares.
Six months Six months
ended ended
30 June 2019 30 June 2018
Attributable loss (GBP'000) (314) (607)
Weighted average number of
ordinary basic shares (basic) 16,919,609 16,919,609
Weighted average number of
ordinary shares (diluted) 17,005,942 17,191,942
Loss per share (basic) arising
from both total and continuing
operations (1.86)p (3.59)p
Loss per share (dilutive)
arising from both total and
continuing operations (1.86)p (3.59)p
5. Trade and other receivables
Trade and other receivables comprise the following:
30 June 2019 30 June 2018
GBP'000 GBP'000
Trade receivables - gross 1,610 1,918
Less: provision for impairment
of trade receivables (68) (31)
------------- -------------
Trade receivables - net 1,542 1,887
Other receivables 135 115
Prepayments and accrued income 754 765
2,431 2,767
6. Trade and other payables
Trade payables comprise the following:
30 June 2019 30 June 2018
GBP'000 GBP'000
Trade payables 333 475
Social security and other
taxes 239 344
Other payables 1,311 1,480
Accruals 407 783
2,290 3,082
7. Contingencies and commitments
There were no contingencies or commitments at the end of this or
the comparative period.
8. Post balance sheet events
There were no material events subsequent to the end of the
interim reporting period that have not been reflected in the
interim financial statements.
9. Copies of the Interim Financial Statements
A copy of the interim statement is available on the Company's
website, www.ingenta.com, and from the Company's registered office,
8100 Alec Issigonis Way, Oxford OX4 2HU.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR BRGDCLXDBGCB
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