TIDMING
RNS Number : 4979Z
Ingenta PLC
21 September 2020
21 September 2020
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 2020.
Financial Key Points
-- Group revenues stable at GBP5.2m (2019: GBP5.3m)
-- 82% of Group revenues recurring in nature (2019: 79%)
-- Adjusted EBITDA(*) up 61.8% to GBP0.5m (2019: GBP0.3m)
-- Cash from operations up 20.8% to GBP1.2m (2019: GBP1.0m)
-- Cash balances increased to GBP3.5m at 30 June 2020 from GBP2.6m at 31 December 2019
-- Net cash generation of GBP0.9m (2019: GBP0.5m)
-- Earnings per share of 2.09 pence (2019: loss 1.86 pence)
-- Proposed interim dividend of 1.5p per share and commencement of share buy-back
Operational Key Points
-- Head of Professional Services recruited to drive operational efficiencies
-- 3 Commercial deployments nearing completion in 2020 plus a further 2 for Edify
-- Vista as a Service gaining traction with 2 deals underway and
further opportunities for 2021
-- Music and gaming IP management solutions launched with sales opportunities being progressed
-- Company profile substantially de-risked with an ongoing annual cost base of GBP9.5m
(*) Earnings before Interest, Tax, Depreciation and Amortisation
is calculated before foreign exchange differences and restructuring
costs.
Martyn Rose, Chairman of Ingenta plc, commented:
"The first half of 2020 has seen unprecedented economic upheaval
which has highlighted the need for businesses to be agile and
flexible in the way they operate and service their customers. In
both these respects, I am encouraged by the performance of the
teams in ensuring a seamless transition to remote working whilst
ensuring our services remain unaffected. In many ways this
vindicates the business transformation process we undertook in
prior years to de-risk the operations and improve efficiency.
"Given the economic environment, I am encouraged to report that
we have maintained stable revenues for the first half of the year.
During the period, the Group have been implementing 6 Commercial
projects plus 2 major Vista as a Service migrations, many of which
will go live in the second half of the year. As anticipated, new
sales activity has been impacted by COVID19 with many businesses
delaying major purchasing decisions but I am pleased to report 2
new Edify contracts have been signed this year and we remain
hopeful that further deals will be signed in due course.
"The underlying financial performance of the Group has also been
transformed with profit before tax increasing to GBP0.4m from a
GBP0.2m loss in the prior period. Cash generation has also been
strong, and the Group reported a cash increase of GBP0.9m, closing
the half year with cash reserves of GBP3.5m. Given these results,
the Board propose an interim dividend of 1.5 pence per share should
be payable later in the year and intend to exercise a share buyback
program as authorised at our AGM. Further details on these matters
will be released in due course."
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
Trading performance in the first half of the year has been
encouraging given the prevailing conditions and uncertainty caused
by COVID19. The Group's previously announced restructuring efforts
have put the business in a strong position to weather unforeseen
economic events whilst continuing to deliver a full complement of
services. Against these headwinds, the Group has delivered improved
profitability and cash generation as outlined below .
Statement of Comprehensive Income
Group revenue remained stable at GBP5.2m (2019: GBP5.3m) as
current project work has continued to be delivered by flexible,
remote working teams.
Gross profit margins have increased to 43.9% from 39.6% as the
Group's new operational structure continues to deliver results.
Included within these numbers is GBP0.7m of expensed research and
development costs. Further efficiencies are also evident in the
Group's sales and administrative cost base, the latter of which
includes non-recurring costs of GBP0.2m.
Profit from operations has increased by GBP0.6m to GBP0.4m
(2019: loss GBP0.2m) and, with negligible interest, taxation and
exchange costs, the Group delivered earnings per share of 2.09
pence (2019: loss 1.86 pence).
Statement of Cash Flows and Financial Position
The Group's cash inflow from operations during the period has
improved and amounted to GBP1.2m (2019: GBP1m). At the half year,
the Group's cash position increased by GBP0.9m (2019: GBP0.5m) to a
total of GBP3.5m (2019: GBP1.8m). This reflects the high point in
our working capital cycle due to the seasonality of our support and
maintenance invoicing. No dividend was paid in the first half of
2020 (2019: GBP0.3m) as the Group waited to establish the impacts
of COVID19 on the business and the wider economy. The Group now
intends to pay a dividend of 1.5 pence per share in the second half
of the year and an announcement will be made in due course.
Outlook
Ingenta has performed well through the early stages of the
COVID19 crisis, supported by our recurring revenues and Commercial
contracts secured in 2019 which will continue to benefit the
company through 2020 and beyond. Our sales pipeline remains robust,
but clearly the rate of conversion has been impacted by the current
economic environment. This may temper our growth expectation for
the remainder of the year, but we continue to focus on improving
efficiency which will help offset any softness in our end
markets.
Jon Sheffield
Chief Financial Officer
Condensed Consolidated Interim Statement of Comprehensive
Income
Restated
Unaudited Unaudited
Six months Six months
ended ended
30 June 2020 30 June 2019
Note GBP'000 GBP'000
Group revenue 5,208 5,250
Cost of sales (2,923) (3,171)
------------- -------------
Gross profit 2,285 2,079
Sales and marketing expenses (328) (454)
Administrative expenses (1,587) (1,824)
Profit / (loss) from operations 370 (199)
Finance costs (8) (11)
Profit / (loss) before tax 362 (210)
Tax 9 (92)
Retained profit / (loss) for the
period 371 (302)
Other comprehensive expenses which
will be reclassified subsequently
to profit or loss:
Exchange differences on translating
foreign operations (17) (12)
Total comprehensive profit / loss
for the period 354 (314)
Basic profit / loss per share - pence 4 2.09 (1.86)
------------- -------------
Diluted profit / loss per share -
pence 4 2.01 (1.86)
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) 560 346
Depreciation (189) (186)
Impairment of intangibles - -
Foreign exchange gain / (loss) 32 (12)
Restructuring costs (33) (347)
------------- -------------
Profit / (loss) from operations 370 (199)
Condensed Consolidated Interim Statement of Financial
Position
Restated
Unaudited Unaudited
30 June 2020 30 June 2019
Note GBP'000 GBP'000
Non-current assets
Goodwill 3 2,661 4,324
Other intangible assets 3 108 208
Property, plant & equipment 465 544
3,234 5,076
Current assets
Trade and other receivables 5 1,650 2,431
Research and development tax credit
receivable - 282
Cash and cash equivalents 3,537 1,809
5,187 4,522
Total assets 8,421 9,598
-------------- --------------
Equity
Share capital 1,692 1,692
Merger reserve 11,055 11,055
Reverse acquisition reserve (5,228 ) (5,228)
Translation reserve (897 ) (888)
Share option reserve 42 18
Retained earnings (2,760 ) (2,031)
3,904 4,618
Non-current liabilities
Deferred tax liability 22 42
Leases 75 265
-------------- --------------
97 307
Current liabilities
Trade and other payables 6 1,997 2,290
Deferred income 2,423 2,383
-------------- --------------
4,420 4,673
Total equity and liabilities 8,421 9,598
-------------- --------------
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 2020 1,692 - 11,055 (5,228) (880) 23 (3,131) 3,531
Dividends paid - - - - - - - -
Transactions
with owners - - - - - - - -
--------- --------- --------- ------------- ------------ --------- ---------- --------
Profit for the
period - - - - - - 371 371
Share based
payment expense - - - - - 19 - 19
Other comprehensive
income:
Exchange differences
on translation
of foreign operations - - - - (17) - - (17)
--------- --------- --------- ------------- ------------ --------- ---------- --------
Total comprehensive
income / (expense)
for the period - - - - (17) 19 371 373
--------- --------- --------- ------------- ------------ --------- ---------- --------
Balance at 30
June 2020 1,692 - 11,055 (5,228) (897) 42 (2,760) 3,904
--------- --------- --------- ------------- ------------ --------- ---------- --------
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)
Share premium
reduction
--------- --------- --------- ------------- ------------ --------- ---------- --------
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
--------- --------- --------- ------------- ------------ --------- ---------- --------
Condensed Consolidated Interim Statement of Cash Flows
Restated
Unaudited Unaudited
Six months Six months
ended ended
30 June 2020 30 June 2019
Note GBP'000 GBP'000
Profit / (loss) before tax 362 (210)
Adjustments for:
Depreciation 189 186
Share based payment expense 19 2
Interest expense 8 11
Unrealised foreign exchange differences (17) (12)
Decrease in trade and other receivables 1,560 2,196
Decrease in trade and other payables (970) (1,220)
Cash inflow from operations 1,151 953
Tax Paid 9 (38)
Net cash inflow from operating activities 1,160 915
Cash flows from financing activities
Dividends paid - (254)
Payment of leases (151) (157)
Interest paid (8) (11)
------------- -------------
Net cash used in financing activities (159) (422)
Cash flows from investing activities
Purchase of property, plant and equipment (65) (7)
Net cash used in investing activities (65) (7)
Net increase in cash and cash equivalents 936 486
Cash and cash equivalents at beginning
of period 2,601 1,323
Cash & cash equivalents at end of period 3,537 1,809
------------- -------------
Notes to the Unaudited Interim Report for the six months ended
30 June 2020
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 21 September
2020.
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 2019, 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 2020. 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 2019.
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 2019.
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.
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 2019.
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 2020 30 June 2019
Attributable profit / (loss)
(GBP'000) 354 (314)
Weighted average number of
ordinary basic shares (basic) 16,919,609 16,919,609
Weighted average number of
ordinary shares (diluted) 17,600,854 17,005,942
Loss per share (basic) arising
from both total and continuing
operations 2.09p (1.86)p
Loss per share (dilutive)
arising from both total and
continuing operations 2.01p (1.86)p
5. Trade and other receivables
Trade and other receivables comprise the following:
30 June 2020 30 June 2019
GBP'000 GBP'000
Trade receivables - gross 1,318 1,610
Less: provision for impairment
of trade receivables (161) (68)
------------- -------------
Trade receivables - net 1,157 1,542
Other receivables 69 135
Prepayments and accrued income 424 754
1,650 2,431
6. Trade and other payables
Trade payables comprise the following:
30 June 2020 30 June 2019
GBP'000 GBP'000
Trade payables 470 333
Social security and other
taxes 374 239
Other payables 660 1,311
Accruals 493 407
1,997 2,290
7. Contingencies and commitments
There were no contingencies or commitments at the end of this or
the comparative period. Further details are included within the
2019 financial statements.
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.
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