TIDMKBT
RNS Number : 3471G
K3 Business Technology Group PLC
26 July 2021
AIM: KBT
26 July 2021
K3 BUSINESS TECHNOLOGY GROUP PLC
("K3" or "the Group" or "the Company")
Provider of mission-critical software (owned and third-party)
and cloud solutions
Half year results for the six months ended 31 May 2021
Highlights
Financial
-- First half results from continuing operations in line with management expectations
-- Revenue steady at GBP23.2m (2020: GBP23.1m)
- recurring or predictable income (2) accounted for 68.7% of
total revenue (2020: 73.4%)
- own-IP revenue made up GBP8.4m (36%) of total revenue (2020:
GBP8.5m (37%))
-- Gross margin reduced to 56.2% (2020: 60.4%), mainly
reflecting the effect of the coronavirus crisis on third-party
products' customer base, which includes smaller retailers and
distributors
-- Adjusted EBITDA (1) of GBP0.9m (2020: GBP1.7m)
-- Loss before tax from continuing operations of GBP4.3m (2020: loss of GBP1.4m)
-- Adjusted loss per share of 11.9p (2020: loss of 3.5p).
Reported earnings per share of 11.6p (2020: loss of 12.2p) includes
profit from discontinued activities
-- Sale of non-core unit, Starcom Technologies, in February for GBP14.7m
- generated net cash flow of GBP13.8m and a profit after tax of
GBP10.8m
-- Significantly strengthened balance sheet with net cash (5) of
GBP4.4m (2020: net debt of GBP7.4m)
*2020 results have been restated following the classification of
Starcom Technologies Limited and UK Dynamics as discontinued
activities
Operational
-- Appointment of Marco Vergani as CEO on 30 March 2021
- evaluation of operations and market strategy commenced - will
underpin future strategy and allocation of resources. Expected to
be substantially completed over the coming months
- management changes made, including appointment of Chief
Commercial & Strategy Officer and Customer Success Officer in
May and July 2021 respectively
-- Own-IP generated GBP8.4m of revenue (2020: GBP8.5m) and gross
profit of GBP6.2m (2020: GBP6.3m).
- Key strategic product, K3|fashion, secured four new customer
contracts worth a total of GBP1.7m (2020: GBP1.0m)
- K3|imagine technology is market-leading and continues to offer
exciting promise
-- Global Accounts generated GBP9.2m of revenue (2020: GBP8.7m)
and gross profit of GBP3.7m (2020: GBP3.8m), reflecting investment
in service capability to support growth
-- Third-party products generated GBP5.6m of revenue (2020:
GBP5.9m) and gross profit of GBP3.2m (2020: GBP3.8m). The retail
and distribution customer base was most disrupted by the
coronavirus pandemic.
- SYSPRO customer base performed well with average deal size
increasing
- H2 will benefit from strong cash inflow from SYSPRO software
licence and support and maintenance contract renewals, typically at
c.98%
Marco Vergani, CEO of K3 Business Technology Group plc,
said:
"Half year results are in line with management expectations. The
Group delivered a resilient performance despite certain parts of
the customer base being significantly disrupted by the
pandemic.
"Since joining K3 in late March, my priority has been a thorough
evaluation of the Group's operations and market strategy. This
process is expected to be substantially completed over the coming
months. It will help to set a clear strategic course.
"K3 has an exciting product offering and talented teams. This
gives us a firm basis from which to move forward as we continue to
build own-IP sales, which will generate long-term, high-margin
recurring income. We remain very confident that there is a
significant market opportunity for the Group, particularly in the
fashion, apparel & design market. We expect to make good
strategic progress in the second half."
Enquiries:
K3 Business Technology Marco Vergani, CEO T: 0161 876
Group plc Rob Price, CFO 4498
finnCap Limited (NOMAD Julian Blunt/ James Thompson T: 020 7220
& Broker) (Corporate Finance) 0500
Richard Chambers, Sunila
de Silva (Corporate Broking)
KTZ Communications Katie Tzouliadis/ Dan T: 020 3178
Mahoney 6378
CHIEF EXECUTIVE OFFICER'S STATEMENT
Introduction
I am pleased to present the Group's interim results report, my
first since having been appointed as Chief Executive Officer on 30
March 2021.
As detailed in the Group's Annual Report for the financial year
ended 30 November 2020, K3 made a number of important strategic
decisions last year and has established a firm foundation from
which to move forward. In particular, the recent sale in February
2021 of the non-core managed services unit, Starcom Technologies
Limited ("Starcom"), has tightened our focus on core activities and
significantly strengthened the Group's balance sheet.
Among my first actions since joining the Group has been starting
a thorough evaluation of operations and K3's market strategy. This
process is still ongoing and is expected to be substantially
completed over the coming months. It will help to set a clear
strategic course, crystallise the allocation of resources, and
confirm our commitment to those market segments that we believe
offer attractive, long-term growth opportunities, in tune with our
products, skill sets and domain strengths.
We have also recently made strategic management changes. These
have included the appointment of a Chief Commercial & Strategy
Officer in May, and a Customer Success Officer in July. Both these
roles are new and both individuals bring significant experience and
successful track records of achievement in retail software sales,
SaaS, and customer engagement. We intend to supplement the existing
strong team at K3 with further selective hires.
K3's focus on building own-IP sales will deliver high-quality,
long-term recurring revenue streams and we remain confident about
the opportunities ahead. Our products offer exciting growth
potential, and our expertise in the Retail sector, particularly in
fashion, apparel & design, online, and direct-to-consumer
brands, is a significant strength. We believe that there is a
substantial opportunity to leverage our knowledge and experience to
assist retailers as they seek new technology solutions that will
enable them to manage more effectively the fundamental changes in
consumer purchasing behaviour and priorities.
The Group's performance over the first half was in line with
management expectations. Revenue from continuing operations was
steady at GBP23.2m (2020: GBP23.1m). Group gross margin decreased,
largely as a result of the weaker contribution from third-party
products. This segment saw greatest market softness in the face of
the coronavirus. K3|fashion performed well with four contract wins
with new customers, worth a total of GBP1.7m, which compares with
GBP1.0m in the same period last year. Global Accounts continues to
grow although its gross profit contribution was lower reflecting
investment in increased resource in the period to support
growth.
Financial Results
Results from continuing operations
Revenue from continuing operations in the six months ended 31
May 2021 was constant at GBP23.2m (2020: GBP23.1m) with recurring
or predictable revenue(2) accounting for 69% of the total (2020:
73%). The decrease in recurring revenue between the two periods
mainly reflected pandemic pressures on certain customer segments,
including visitor attraction and smaller retailers and
distributors. Own IP products generated GBP8.4m of revenue (2020:
GBP8.5m) accounting for 36% of total revenue (2020: 37%). Global
Accounts (which supports Inter IKEA Systems B.V., the owner and
franchisor of the IKEA concept, and the Inter IKEA Concept
franchisees) generated GBP9.2m of revenue (2020: GBP8.7m), and
accounted for 40% of total revenue (2020: 38%). Third-party
products contributed GBP5.6m of revenue, which accounted for 24% of
total revenue.
Gross profit for the period was GBP13.1m (2020: GBP13.9m), with
47% or GBP6.2m (2020: 45% or GBP6.3m) derived from own-IP products.
Gross margin decreased to 56% (2020: 60%), which mainly reflected
the weaker performance of third-party products, but also lower
margin from Global Accounts during a period of investment in
services resource.
Underlying support/administrative expenses(7) remained in line
with the same period last year, at GBP12.2m (2020: GBP12.2m).
Reported administrative expenses increased to GBP16.7m (2020:
GBP15.4m), mainly as a result of a GBP1.5m additional amortisation
charge due to a change in accounting estimate in the own-IP
segment. (See note 4 below). Adjusted EBITDA(1) from continuing
activities decreased to GBP0.9m (2020: GBP1.7m). This was largely
driven by lower margin from third-party products.
Following depreciation, amortisation, reorganisation and other
exceptional costs amounting to GBP4.5m, the loss before tax from
continuing activities was GBP4.8m (2020: GBP1.4m).
The adjusted loss per share(6) was 11.9p (2020: loss of 3.5p).
This figure excludes amortisation of acquired intangibles of
GBP0.3m (2020: GBP0.7m), exceptional reorganisation costs of
GBP0.2m (2020: GBP0.2m), and share-based charges of GBP0.2m (2020:
GBPnil), and is net of the related tax charge of GBP0.1m (2020:
GBP0.1m). Reported earnings per share was 11.6p (2020: loss per
share of 12.2p), which includes profit from discontinued
activities, specifically from Starcom.
Discontinued activities
Discontinued activities relate to Starcom Technologies Limited
("Starcom"), which was sold on 26 February 2021 for GBP14.7m, and
the UK Dynamics subsidiary, which was put into administration on 21
April 2020.
Starcom results for the six months to 31 May 2020 have been
restated to present Starcom as a discontinued operation. The unit
generated net cash flow of GBP13.8m and a profit after tax of
GBP10.8m (2020: GBP0.5m) which includes a profit on disposal of
GBP10.3m. UK Dynamics generated loss after tax of GBPnil (2020:
GBP3.4m).
Balance sheet and cash flows
The Group balance sheet has been strengthened. Net cash(5) at 31
May 2021 stood at GBP4.4m (31 May 2020: net debt of GBP7.4m and 30
November 2020: net debt of GBP1.9m) with the net proceeds from the
sale of Starcom and the loan note conversion in March helping to
underpin this result. The Group's cash flow over the financial year
is seasonally weighted towards the second half, which benefits from
a significant cash inflow from annual software licence and
maintenance and support renewals. A large element of this is SYSPRO
renewals, which typically have a renewal rate of c.98%.
Net cash used in operating activities was a GBP7.4m outflow
(2020: GBP1.1m outflow), reflecting a GBP1.2m inflow from trading
(2020: GBP1.1m outflow), offset by a GBP8.6m outflow in working
capital (2020: GBPnil). The year-on-year change in working capital
outflow is the result of a working capital adjustment of GBP5.1m
for discontinued activities, and GBP3.5m repayment of tax deferrals
in the UK and Netherlands.
Finance costs increased due to the interest paid on the
shareholder loan raised in March 2020 and converted to equity in
March 2021 and the additional lender re-finance fees. Amortisation
increased to GBP3.2m (2020: GBP2.0m) following the shortening of
the amortization policy of internal capitalised development to
three years from five to seven years previously. (See note 4).
Development expenditure capitalised has been reduced to GBP1.3m
(2020: GBP2.3m).
Operational Review
The Group's results for the six months ended 31 May 2021,
together with comparatives for the same period in 2020, are
summarised in the tables below. The segmental analysis provides
further information on the key areas of activity; Own-IP, Global
Accounts and Third-party products (including SYSPRO and Sage).
2020 comparatives have been restated following the
classification of Starcom and UK Dynamics as discontinued
activities.
(GBPm) Revenue Gross profit Gross margin
----------------- ----------------------- ------------------- --------------------
2021 2020 (restated) 2021 2020 2021 2020
(restated) (restated)
Own-IP 8.4 8.5 6.2 6.3 74.0% 74.4%
Global Accounts 9.2 8.7 3.7 3.8 40.1% 43.9%
Third-party
products 5.6 5.9 3.2 3.8 56.3% 64.6%
----------------- ----- ---------------- ----- ------------ ------ ------------
Total 23.2 23.1 13.1 13.9 56.2% 60.4%
----------------- ----- ---------------- ----- ------------ ------ ------------
2021 2020
------------------------------------- ------ ------
Recurring or predictable revenue(2) 68.7% 73.4%
Own-IP gross profit as a percentage
of total gross profit(4) 47.4% 45.1%
------------------------------------- ------ ------
Own-IP
K3's own-IP includes;
-- IP embedded within third-party solutions to add extra
functionality and produce a richer overall solution for K3's target
markets. These solutions include K3|fashion and K3|pebblestone;
-- K3|imagine, our cloud-native platform, which include a set of
front end solutions, which can be seamlessly integrated in any
technology environment through K3|Dataswitch, our real-time
orchestration engine, and Application Programming Interfaces
("APIs"); and
-- other stand-alone point solutions and apps including our
legacy point-of-sale ("POS") products.
Revenue generated by own-IP was constant at GBP8.4m (2020:
GBP8.5m), with gross profit similarly steady at GBP6.2m (2020:
GBP6.3m). The mix of revenue included a greater contribution from
two core strategic products, K3|fashion and K3|Pebblestone, and a
lower contribution from POS products and hardware sales. Some
market sectors for own-IP product, including visitor attractions,
continued to be impacted by coronavirus restrictions and
underperformed. Gross profit decreased by 2% to GBP6.2m (2020:
GBP6.3m), and gross margin remained largely unchanged at 74.0%
(2020: 74.4%).
The fashion, apparel & design sector is a key area of
investment and growth for us. The structural shifts in the
marketplace and changes in consumer buying behaviour underline the
need for solutions that correctly address the new commercial
challenges. We believe that we are well-placed to capture this
growing demand. The focus of our work is on expanding more broadly
our existing differentiating features to address the emerging needs
and evolving our go-to-market strategy and sales infrastructure to
become the recognised provider of choice for this sector.
K3|fashion performed well with four large deals signed with new
customers via channel partners, worth a total of GBP1.7m (2020:
GBP1.0m). These were with a major children's fashion brand, a
global outdoor-wear brand, a major European fashion retailer and a
global outdoor sports clothing & equipment brand. Microsoft's
endorsement of K3|fashion as its recommended 'add-on' solution for
the fashion and apparel sector globally underlines the strong
credentials of this product.
We also remain very excited about the potential of the
K3|imagine platform and its applications. These include self-serve,
point-of-sale, and companion apps, and are predominantly provided
on a Software-as-a-Service ("SaaS") basis. While sales currently
remain modest, customers bought from across the suite of
applications. We will be refocusing our sales resource in line with
our new plans over the coming months.
Global Accounts
Revenue from Global Accounts continued to grow, increasing by 6%
to GBP9.2m (2020: GBP8.7m) however, gross profit decrease by 3% to
GBP3.7m (2020: GBP3.8m) and gross margin reduced by 3.8 percentage
points to 40.1% (2020: 43.9%) as the Group invested in new
competencies and resources to expand services capability.
The investment will support the ongoing expansion of the IKEA
franchisee network into new geographies, including new store
openings in South and Central America, and will also support
further project work in the Consumer Experience area. This should
also directly benefit software licence sales as well as services
income. We anticipate further growth opportunities in Global
Accounts and intend to strengthen our off-shoring capability to
support this growth.
Third-party products
Third-party products include our SYSPRO and Sage products, which
we resell in the UK. This area of activity was the most badly
affected by the coronavirus crisis, with customers in distribution
and retail sectors holding back from supply chain investment and
services projects and some retrenching in response to the
pandemic.
Revenue decreased by 4.7% to GBP5.6m (2020: GBP5.9m) and gross
profit reduced by 17.0% to GBP3.2m (2020: GBP3.8m), with gross
margin contracting by 8.3 percentage points to 56.3% (2020: 64.6%).
The gross margin decline was driven in particular by our retail and
distribution customer base, which was more disrupted by
coronavirus-related restrictions. Some existing customers chose not
to renew maintenance and support contracts and new business in this
area remained soft.
By contrast our manufacturing customer base, which largely
comprises SYSPRO customers, was more resilient. We closed an
encouraging level of new SYSPRO business and average deal size
increased, benefitting software licence, maintenance and support
and services income streams.
A high level of software licence and maintenance and support
contract renewals from the SYSPRO customer base take place in the
second half of the financial year. We expect renewals to continue
to be high, in the region of historic levels at around 98%.
Administrative expenses
Underlying support/administrative costs(7) were in line with the
same period last year at GBP12.2m (2020: GBP12.2m). Reported
administrative expenses increased to GBP16.7m (2020: GBP15.4m) as a
result of the GBP1.5m additional depreciation charge due to a
change in accounting estimate in our own-IP segment (see note 4
below) offset by a lower amortisation charge as the intangible
assets come to the end of their useful life.
Outlook
K3 has an exciting product offering, and we are very confident
that there is a significant market opportunity to drive our
existing strategy of building own-IP sales, which are higher margin
and generate long-term recurring income streams. The fundamental
shift that is under way in the retail sector, with customers
changing the way that they shop, engage with brands, and judge
brand values, is driving a requirement for new solutions, including
in AI. K3 provides a channel to readily-adoptable, leading-edge
solutions to these commercial issues, and is therefore
well-positioned.
We are currently in the process of resetting our growth
strategies for key strategic products and will be adding
selectively to our existing strong teams to ensure that we have the
appropriate blend of talents to support our growth plans.
We will also consider initiatives to improve cash conversion,
enhance productivity and simplify the Group. We view prospects for
K3 positively and look forward to providing a further update in due
course.
Marco Vergani
Chief Executive Officer
Consolidated income statement
for the six months ended 31 May 2021
Notes Restated^
Unaudited Unaudited Audited
6 months 6 months 12 months
to 31 May to 31 May to
2021 2020 30 November
2020
GBP'000 GBP'000 GBP'000
Revenue 23,246 23,080 48,819
Cost of sales (10,172) (9,142) (20,110)
-------------------------------------- ------ ------------ ----------- --------------
Gross profit 13,074 13,938 28,709
Administrative expenses (16,571) (15,473) (48,402)
Impairment (losses)/gains
on financial assets (131) 111 (122)
-------------------------------------- ------ ------------ ----------- --------------
Adjusted EBITDA 864 1,734 3,965
Depreciation and amortisation 4 (3,841) (2,265) (4,500)
Amortisation of acquired intangibles (284) (678) (1,471)
Exceptional Impairment - - (16,855)
Exceptional reorganisation
costs (182) (215) (934)
Share-based payment charge (185) - (20)
-------------------------------------- ------ ------------ ----------- --------------
Loss from operations (3,628) (1,424) (19,815)
Finance expense (1,169) (10) (1,124)
-------------------------------------- ------ ------------ ----------- --------------
Loss before taxation from
continuing operations (4,797) (1,434) (20,939)
-------------------------------------- ------ ------------ ----------- --------------
Tax expense 11 (951) (807) (7)
-------------------------------------- ------ ------------ ----------- --------------
Loss after taxation from continuing
operations (5,748) (2,241) (20,946)
Profit/(loss) after taxation
from discontinued operations 6 10,787 (2,980) (184)
Profit/(loss) for the period/year 5,039 (5,221) (21,130)
---------------------------------------------- ------------ ----------- --------------
^ The results for the 6 month period ended 31 May 2020 have been
restated to present UK Dynamics and Starcom Technologies Limited as
discontinued operations.
All the loss for the year is attributable to equity shareholders
of the parent.
Note Restated^
Unaudited Unaudited Audited
6 months 6 months 12 months
to 31 May to 31 May to
2021 2020 30 November
2020
Profit/(loss) per share
Basic and diluted earnings/(loss)
per share 7 11.6p (12.2)p (49.3)p
Basic and diluted loss per
share from continuing operations 7 (13.2)p (5.2)p (48.8)p
Consolidated statement of comprehensive income
for the six months ended 31 May 2021
Notes Restated^
Unaudited Unaudited Audited
6 months 6 months 12 months
to 31 May to 31 May to
2021 2020 30 November
2020
GBP'000 GBP'000 GBP'000
Profit/(loss) for the period/year 5,039 (5,221) (21,130)
----------------------------------------------- ------------ ----------- --------------
Other comprehensive income
Exchange differences on translation
of foreign operations (842) 1,127 1,065
----------------------------------------------- ------------ ----------- --------------
Total comprehensive income/(expense)
for the period/year 4,197 (4,094) (20,065)
----------------------------------------------- ------------ ----------- --------------
All the total comprehensive income/(expense) is attributable to
equity holders of the parent. All the other comprehensive income
will be reclassified subsequently to profit or loss when specific
conditions are met. None of the items within other comprehensive
income/(expense) had a tax impact.
Consolidated statement of financial
position
as at 31 May 2021 Audited
Unaudited Unaudited as at 30
as at 31 as at 31 November
Notes May 2021 May 2020 2020
GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Property, plant and equipment 1,629 2,067 1,866
Right-of-use assets 1,851 3,136 2,719
Goodwill 25,733 41,429 26,132
Other intangible assets 8,408 15,190 10,271
Deferred tax assets 680 618 935
Total non-current assets 38,301 62,440 41,923
--------------------- ---------- -----------
Current assets
Trade and other receivables 11 12,045 16,908 12,195
Cash and cash equivalents 6,295 12,403 9,306
Assets classified as held for
sale - - 6,899
--------------------- ---------- -----------
Total current assets 18,340 29,311 28,400
--------------------- ---------- -----------
Total assets 56,641 91,751 70,323
--------------------- ---------- -----------
LIABILITIES
Non-current liabilities
Lease liabilities 926 1,959 1,735
Borrowings - 3,000 -
Provisions 472 303 416
Deferred tax liabilities 925 1,312 889
--------------------- ---------- -----------
Total non-current liabilities 2,323 6,574 3,040
--------------------- ---------- -----------
Current liabilities
Trade and other payables 10 12,478 20,437 19,145
Current tax liabilities 1,577 1,514 1,274
Lease liabilities 943 1,125 925
Borrowings 8 1,901 16,788 12,443
Provisions 122 150 9
Liabilities directly associated
with assets classified as held
for sale - - 3,572
--------------------- ---------- -----------
Total current liabilities 17,021 40,014 37,368
--------------------- ---------- -----------
Total liabilities 19,344 46,588 40,408
--------------------- ---------- -----------
EQUITY
Share capital 11,183 10,737 10,737
Share premium account 31,451 28,897 28,897
Other reserves 11,151 10,448 11,151
Translation reserve 1,781 2,685 2,623
Retained earnings (18,269) (7,604) (23,493)
--------------------- ---------- -----------
Total equity attributable to equity
holders of the parent 37,297 45,163 29,915
--------------------- ---------- -----------
Total equity and liabilities 56,641 91,751 70,323
--------------------- ---------- -----------
Consolidated Cash Flow Statement
for the six months ended 31 May 2021
Restated^
Unaudited Unaudited Audited
6 months 6 months 12 months to
to 31 May to 31 May 30 November
2021 2020 2020
Notes GBP'000 GBP'000 GBP'000
Cash flows from operating activities
--------------------------------------------------------------- ------- ------------ ----------- ---------------
Profit/(loss) for the period 5,039 (5,221) (21,130)
------------------------------------------------------------------------ ------------ ----------- ---------------
Adjustments for:
Finance expense 1,160 467 1,137
Tax expense 841 526 (284)
Depreciation of property, plant and equipment 268 359 730
Impairment loss on property, plant and equipment - 6 -
Depreciation of right-of-use assets 869 864 1,727
Amortisation of intangible assets and development expenditure 3,219 2,000 4,247
Gain on sale of subsidiary (10,314) - -
Impairment of intangible assets - 16 16,855
Loss on sale of property, plant and equipment - - 254
Share-based payments charge 185 - 20
Loss on disposal of discontinued operations, net of tax - - 957
Increase in provisions 169 39 71
Decrease in trade and other receivables 1,062 5,172 6,680
Decrease in trade and other payables (9,863) (5,243) (2,688)
------------------------------------------------------------------------ ------------ ----------- ---------------
Cash (used in)/generated from operations (7,365) (1,015) 8,596
Income taxes (38) (94) (364)
------------------------------------------------------------------------ ------------ ----------- ---------------
Net cash (used in)/generated from operating activities (7,403) (1,109) 8,232
Cash flows from investing activities
Net cash flow arising on the sale of businesses 13,795 - -
Development expenditure capitalised (1,330) (2,290) (4,516)
Purchase of property, plant and equipment - (255) (713)
------------------------------------------------------------------------ ------------ ----------- ---------------
Net cash from/(used in) investing activities 12,465 (2,545) (5,229)
Cash flows from financing activities
Proceeds from loans and borrowings - 9,482 9,950
Issue of shares 3,000 - -
Repayment of loans and borrowings (9,254) - (6,468)
Repayment of lease liabilities (791) (802) (1,841)
Interest paid on lease liabilities (131) (168) (308)
Finance expense paid (1,050) (444) (590)
Dividends paid - - -
--------------------------------------------------------------- ------- ------------ ----------- ---------------
Net cash (used in)/from financing activities (8,226) 8,068 743
------------------------------------------------------------------------ ------------ ----------- ---------------
Net change in cash and cash equivalents (3,164) 4,414 3,746
------------------------------------------------------------------------ ------------ ----------- ---------------
Cash and cash equivalents at start of period/year 7,566 3,841 3,841
Exchange gains /(losses) on cash and cash equivalents (8) 36 (21)
------------------------------------------------------------------------ ------------ ----------- ---------------
Cash and cash equivalents at end of period/year 4,394 8,291 7,566
Consolidated statement of Changes in Equity
for the period ended 31 May 2021
Translation Retained
Share capital Share premium Other reserves reserve earnings Total equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 December 2019 10,737 28,897 10,448 1,558 (2,383) 49,257
------------------- -------------- -------------- --------------- -------------- --------------- -------------
Changes in equity
for the six
months ended 31
May 2020
Loss for the
period - - - - (5,221) (5,221)
Other
comprehensive
income for the
period - - - 1,127 - 1,127
------------------- -------------- -------------- --------------- -------------- --------------- -------------
Total
comprehensive
income/(expense) - - - 1,127 (5,221) (4,094)
At 31 May 2020 10,737 28,897 10,448 2,685 (7,604) 45,163
------------------- -------------- -------------- --------------- -------------- --------------- -------------
Changes in equity
for period ended
30 November 2020
Loss for the
period - - - - (15,909) (15,909)
Other
comprehensive
income for the
period - - - (62) - (62)
------------------- -------------- -------------- --------------- -------------- --------------- -------------
Total
comprehensive
income/(expense) - - - (62) (15,909) (15,971)
Share-based
payment expense - - - - 20 20
Issue of warrants - - 703 - - 703
At 30 November
2020 10,737 28,897 11,151 2,623 (23,493) 29,915
------------------- -------------- -------------- --------------- -------------- --------------- -------------
Changes in equity
for period ended
31 May 2021
Gain for the year - - - - 5,039 5,039
Other
comprehensive
income for the
period - - - (842) - (842)
------------------- -------------- -------------- --------------- -------------- --------------- -------------
Total
comprehensive
income/(expense) - - - (842) 5,039 4,197
Share issue 446 2,554 - - - 3,000
Share-based
payment expense - - - - 185 185
------------------- -------------- -------------- --------------- -------------- --------------- -------------
At 31 May 2021 11,183 31,451 11,151 1,781 (18,269) 37,297
------------------- -------------- -------------- --------------- -------------- --------------- -------------
1 Segment information
For the six months ended 31 May 2021
K3 Own IP Global Accounts 3(rd) party products Central Costs Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Total segment revenue 10,800 10,361 5,753 - 26,914
Less Inter-segment revenue (2,423) (1,134) (111) - (3,668)
Software licence revenue 2,148 1,013 994 - 4,155
Services revenue 701 6,738 1,785 - 9,224
Maintenance & support 4,951 1,476 2,804 - 9,231
Hardware and other revenue 577 - 59 - 636
External revenue 8,377 9,227 5,642 - 23,246
Cost of sales (2,179) (5,526) (2,467) - (10,172)
------------------------------------ ---------- ------------------ --------------------- -------------- ---------
Gross profit 6,198 3,701 3,175 - 13,074
Gross margin 74.0% 40.1% 56.3% 56.2%
------------------------------------ ---------- ------------------ --------------------- -------------- ---------
Administrative expenses(7) - - - (12,210) (12,210)
------------------------------------ ---------- ------------------ --------------------- -------------- ---------
Adjusted EBITDA(1) from continuing
operations 6,198 3,701 3,175 (12,210) 864
------------------------------------ ---------- ------------------ --------------------- -------------- ---------
Depreciation and amortisation - - - (3,841) (3,841)
Amortisation of acquired
intangibles - - - (284) (284)
Exceptional reorganisation costs - - - (182) (182)
Share-based payment (charge)/credit - - - (185) (185)
------------------------------------ ---------- ------------------ --------------------- -------------- ---------
Loss from operations 6,198 3,701 3,175 (16,702) (3,628)
------------------------------------ ---------- ------------------ --------------------- -------------- ---------
Finance expense - - - (1,169) (1,169)
------------------------------------ ---------- ------------------ --------------------- -------------- ---------
Loss before tax and discontinued
operations 6,198 3,701 3,175 (17,871) (4,797)
------------------------------------ ---------- ------------------ --------------------- -------------- ---------
Tax expense - - - (951) (951)
Profit from discontinued operations - - - 10,787 10,787
------------------------------------ ---------- ------------------ --------------------- -------------- ---------
Profit for the year 6,198 3,701 3,175 (8,035) 5,039
------------------------------------ ---------- ------------------ --------------------- -------------- ---------
For the six months ended 31 May 2020
K3 Own IP Global Accounts 3(rd) party products Central Costs Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Total segment revenue 12,406 10,922 6,658 458 30,444
Less Inter-segment revenue (3,951) (2,220) (735) (458) (7,364)
Software licence revenue 1,988 319 656 - 2,963
Services revenue 551 6,947 1,788 - 9,286
Maintenance & support 5,088 1,436 3,473 - 9,997
Hardware and other revenue 828 - 6 - 834
External revenue 8,455 8,702 5,923 - 23,080
Cost of sales (2,163) (4,884) (2,095) - (9,142)
------------------------------------ ---------- ------------------ --------------------- -------------- ---------
Gross profit 6,292 3,818 3,828 - 13,937
Gross margin 74.4% 43.9% 64.6% 60.4%
------------------------------------ ---------- ------------------ --------------------- -------------- ---------
Administrative expenses(7) - - - (12,204) (12,204)
------------------------------------ ---------- ------------------ --------------------- -------------- ---------
Adjusted EBITDA(1) from continuing
operations 6,292 3,818 3,828 (12,204) 1,734
------------------------------------ ---------- ------------------ --------------------- -------------- ---------
Depreciation and amortisation - - - (2,265) (2,265)
Amortisation of acquired
intangibles - - - (678) (678)
Exceptional reorganisation costs - - - (215) (215)
Loss from operations 6,292 3,818 3,828 (15,362) (1,424)
------------------------------------ ---------- ------------------ --------------------- -------------- ---------
Finance expense - - - (10) (10)
------------------------------------ ---------- ------------------ --------------------- -------------- ---------
Loss before tax and discontinued
operations 6,292 3,818 3,828 (15,372) (1,434)
------------------------------------ ---------- ------------------ --------------------- -------------- ---------
Tax expense - - - (807) (807)
Loss from discontinued operations - - - (2,980) (2,980)
------------------------------------ ---------- ------------------ --------------------- -------------- ---------
Loss for the year 6,292 3,818 3,828 (19,159) (5,221)
------------------------------------ ---------- ------------------ --------------------- -------------- ---------
For the twelve months ended 30 November 2020
K3 Own IP Global Accounts 3(rd) party products Central Costs Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Total segment revenue 20,100 19,479 16,146 458 56,183
Less Inter-segment revenue (3,951) (2,220) (735) (458) (7,364)
Software licence revenue 3,248 718 1,798 - 5,764
Services revenue 1,169 13,472 3,180 - 17,821
Maintenance & support 10,308 3,045 10,362 - 23,715
Hardware and other revenue 1,424 24 71 - 1,519
External revenue 16,149 17,259 15,411 - 48,819
Cost of sales (3,909) (9,845) (6,356) - (20,110)
------------------------------------ ---------- ------------------ --------------------- -------------- ---------
Gross profit 12,240 7,414 9,055 - 28,709
Gross margin 75.8% 43.0% 58.8% - 58.8%
------------------------------------ ---------- ------------------ --------------------- -------------- ---------
Administrative expenses(7) - - - (24,744) (24,744)
------------------------------------ ---------- ------------------ --------------------- -------------- ---------
Adjusted EBITDA(1) from continuing
operations 12,240 7,414 9,055 (24,744) 3,965
------------------------------------ ---------- ------------------ --------------------- -------------- ---------
Depreciation and amortisation - - - (4,500) (4,500)
Amortisation of acquired
intangibles - - - (1,471) (1,471)
Exceptional impairment - - - (16,855) (16,855)
Exceptional reorganisation costs - - - (934) (934)
Exceptional customer settlement - - - - -
provision
Share-based payment (charge)/credit - - - (20) (20)
------------------------------------ ---------- ------------------ --------------------- -------------- ---------
Loss from operations 12,240 7,414 9,055 (48,524) (19,815)
------------------------------------ ---------- ------------------ --------------------- -------------- ---------
Finance expense - - - (1,124) (1,124)
------------------------------------ ---------- ------------------ --------------------- -------------- ---------
Loss before tax and discontinued
operations 12,240 7,414 9,055 (49,648) (20,939)
------------------------------------ ---------- ------------------ --------------------- -------------- ---------
Tax expense - - - (7) (7)
Loss from discontinued operations - - - (184) (184)
------------------------------------ ---------- ------------------ --------------------- -------------- ---------
Loss for the year 12,240 7,414 9,055 (49,839) (21,130)
------------------------------------ ---------- ------------------ --------------------- -------------- ---------
2 General information
K3 Business Technology Group Plc is incorporated in England and
Wales under the Companies Act (listed on AIM, a market operated by
the London Stock Exchange Plc) with the registered number 2641001.
The address of the registered office is Baltimore House, 50 Kansas
Avenue, Manchester M50 2GL.
The interim condensed consolidated financial statements comprise
the company and its subsidiaries, "the Group".
3 Basis of preparation and Going Concern
The financial information set out in this Interim Report does
not constitute statutory accounts as defined in Section 434 of the
Companies Act 2006. The Group's statutory financial statements for
the year ended 30 November 2020, prepared in accordance with the
international accounting standards in conformity with the
requirements of the Companies Act 2006, 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 (3) of the Companies Act 2006. The interim
financial information has been prepared in accordance with the
recognition and measurement principles of International Financial
Reporting Standards ("IFRS") and on the same basis and using the
same accounting policies as used in the financial statements for
the year ended 30 November 2020, subject to the introduction of any
new accounting standards applicable in the period and with the
exception of the change in accounting estimate as detailed in Note
4 below.
The financial information has not been prepared (and is not
required to be prepared) in accordance with IAS 34. The accounting
policies have been applied consistently throughout the Group for
the purposes of preparation of this financial information.
The Interim Report has not been audited or reviewed in
accordance with the International Standard on Review Engagement
2410 issued by the Auditing Practices Board.
Although there still exists some uncertainty due to the ongoing
disruption arising from COVID -- 19 the Directors have concluded
this is not material. Following the sale of the Starcom subsidiary
on 26 February 2021, for net proceeds of GBP13.8m, the Group also
successfully agreed an extension to its Revolving Credit Facility
with Barclays with a facility of GBP3.5m to March 2022 with a
further option to extend to March 2023. As a result of these
actions, at 31 May 2021 the Group had net cash of GBP4.4m compared
to net debt of GBP1.9m at 30 November 2020 and net debt of GBP7.4m
at 31 May 2020.
The Directors therefore have a reasonable expectation that the
Group has adequate resources to continue in operational existence
for the foreseeable future. For these reasons, they continue to
adopt the going concern basis of accounting in preparing this
financial information.
4 Critical accounting estimates, judgements and sources of estimation uncertainty
For the accounting period beginning 1 December 2020 the Group
has reviewed the depreciation method of assets in line with the
requirements of IAS 38 Intangible Assets. The Group has identified
that the pattern of consumption of benefits relating to the
capitalised development costs for our own IP assets in our Irish
subsidiary had changed. As a result the depreciation method has
been changed from straight line 5-7 years to straight line 3
years.
This change has been applied prospectively from 1 December 2020
as it constitutes a change in estimate under IAS 8 Accounting
Policies, Changes in Accounting Estimates and Errors. This change
in accounting policy has resulted in the following adjustment to
the depreciation charge:
Unaudited Unaudited Audited
6 months 6 months 12 months
to 31 May to 31 May to
2021 2020 30 November
2020
GBP'000 GBP'000 GBP'000
Depreciation and amortisation - previous
accounting policy 2,315 2,265 4,500
Adjustment 1,526 - -
----------- ----------- -------------
Depreciation and amortisation - new
accounting policy 3,841 2,265 4,500
----------- ----------- -------------
With the exception of the above there have been no further
material revisions to the nature and amount of changes in estimates
of amounts reported in the financial statements for the year ended
30 November 2020.
5 Significant events
On 30 March 2021 the Group reached agreement with two of its
major shareholders, Kestrel Partners LLP (represented by
Non-executive Director Oliver Scott) and Johan Claesson (also Non
-- executive Director) via his associated company, CA Fastigheter
AB to convert the full principal amount of the GBP3.0m shareholder
loans into ordinary shares of 25p each in the Company at a
conversion price of GBP1.68 per Ordinary Share (being the
prevailing bid-price on 26 March 2021).
On 26 February 2021 the Group announced the sale of the Starcom
business (see note 6).
The Group successfully agreed an extension to its Revolving
Credit Facility with Barclays with a facility of GBP3.5m to March
2022 with a further option to extend to March 2023.
6 Discontinued operations
On 26 February 2021 the Group announced the sale of the Starcom
business for consideration of GBP14.7m. As a major line of business
the results of Starcom for the 6 months to 31 May 2021 have been
presented as discontinued operations. The results for the six
months ended 31 May 2020 have been restated to present Starcom as
discontinued operations. At 30 November 2020 Starcom was classified
as a disposal group held for sale as the discontinued operation
represented a major line of business of the Group.
The results of the Starcom business for the periods presented
were:
Restated^
Unaudited Unaudited Audited
6 months 6 months 12 months
to 31 May to 31 May to
2021 2020 30 November
2020
GBP'000 GBP'000
External revenue 2,309 4,470 9,519
Cost of sales (845) (1,639) (3,966)
--------------------------------------------- ------------- ----------- --------------
Gross profit 1,464 2,831 5,553
Administrative expenses (1,011) (2,126) (4,320)
Impairment losses on financial
assets - (73) (25)
Amortisation of acquired intangibles (99) (161) (322)
Profit from operations 354 471 886
Finance income/(expense) 9 (26) (73)
Profit after taxation from
discontinued operations 363 445 813
--------------------------------------------- ------------- ----------- --------------
Tax credit/(expense) 110 11 22
--------------------------------------------- ------------- ----------- --------------
Profit for the year from discontinued
operations after tax 473 456 835
--------------------------------------------- ------------- ----------- --------------
Gain on sale of subsidiary after 10,314 - - -
income tax (see below)
--------------------------------------------- ------------- ----------- --------------
Profit for the year from discontinued
operations 10,787 456 835
--------------------------------------------- ------------- ----------- --------------
Unaudited Unaudited Audited
6 months 6 months 12 months
to 31 May to 31 May to
2021 2020 30 November
2020
GBP'000 GBP'000
Basic and diluted profit per
share from discontinued operations 24.8 1.1 1.9
The major classes of assets and liabilities of the Starcom
business classified as held for sale as at 30 November 2020 are as
follows:
2020
GBP'000
Property, plant, and equipment 237
Right-of-use assets 332
Goodwill 2,373
Other intangible assets 690
Deferred tax assets 136
Trade and other receivables 1,871
Cash and cash equivalents 1,260
---------------------------------------------- --------
Assets classified as held for sale 6,899
---------------------------------------------- --------
Trade and other payables (3,196)
Provisions (60)
Lease liabilities (316)
---------------------------------------------- --------
Liabilities directly associated with assets
classified as held for sale (3,572)
---------------------------------------------- --------
Net Assets directly associated with disposal
group 3,327
---------------------------------------------- --------
The net cashflows incurred by Starcom are as follows:
Unaudited Unaudited Audited
6 months 6 months 12 months
to 31 May to 31 May to
2021 2020 30 November
2020
GBP'000 GBP'000 GBP'000
Operating 379 (232) 1,096
Investing - (121) (155)
Financing 12,835 (27) (133)
----------- ----------- -------------
Net cash inflow/(outflow) 13,214 (380) 808
----------- ----------- -------------
Gain on sale
Unaudited
6 months
to 31 May
2021
GBP'000
Consideration received:
Cash 14,747
-----------
Final consideration 14,747
-----------
Carrying amount of net assets sold (3,878)
-----------
Gain on sale before costs and income tax 10,869
-----------
Costs incurred in connection with the agreed disposal
of the Starcom business (555)
Income tax expense on gain -
-----------
Gain on sale after income tax 10,314
-----------
Net cash flow arising on the sale of Starcom
Unaudited
6 months
to 31 May
2021
GBP'000
Cash consideration 14,747
Cash at date of disposal (415)
Disposal costs paid (537)
-----------
Net cash inflow 13,795
-----------
On 21 April 2020, the UK Dynamics subsidiary was put into
administration and has been classified as a discontinued operation
as it represented a major line of business for the Group. No assets
or liabilities relating to UK Dynamics were held by the Group at 30
November 2020.
The results of the UK Dynamics business for the year up to its
administration are presented below.
Unaudited Audited
6 months 12 months
to 31 May to
2020 30 November
2020
Revenue 3,789 3,789
Cost of sales (3,533) (3,533)
-------------------------------------- ----------- -------------
Gross profit 256 256
Administrative expenses (1,375) (1,375)
Impairment losses on financial - -
assets
Loss from operations (1,119) (1,119)
Finance income/(expense) 60 60
-------------------------------------- ----------- -------------
Loss before taxation from
discontinued operations before
group costs (1,059) (1,059)
-------------------------------------- ----------- -------------
Impairment of UK Dynamics - -
Goodwill
Cost incurred with the disposal
of UK Dynamics (2,645) (229)
Loss before taxation from
discontinued operations (3,703) (1,288)
-------------------------------------- ----------- -------------
Tax credit/(expense) 269 269
-------------------------------------- ----------- -------------
Loss for the year from discontinued
operations (3,434) (1,019)
-------------------------------------- ----------- ---------------
Unaudited Audited
6 months 12 months
to 31 May to
2020 30 November
2020
GBP'000
Basic and diluted loss per
share from discontinued operations (8.0) (2.4)
The net cashflows incurred by UK Dynamics are as follows:
Unaudited Audited
6 months 12 months
to 31 May to
2020 30 November
2020
GBP'000 GBP'000
Operating (1,063) (1,063)
Investing - -
Financing (15) (15)
----------- -------------
Net cash inflow/(outflow) (1,618) (1,618)
----------- -------------
7 Earnings/(loss) per share
The calculations of (loss)/earnings per share (EPS) are based on
the profit/(loss) for the year and the following numbers of
shares:
Unaudited Unaudited Audited
6 months 6 months 12 months
to 31 May to 31 May to
2021 2020 30 November
2020
Denominator GBP'000 GBP'000 GBP'000
Weighted average number of
shares used in basic and diluted
EPS 43,602,052 42,871,000 42,899,598
Certain employee options and warrants have not been included in
the calculation of diluted EPS because their exercise is contingent
on the satisfaction of certain criteria that had not been met at
the end of the period/year.
Restated
Unaudited Unaudited Audited
6 months 6 months 12 months
to 31 May to 31 May to
2021 2020 30 November
2020
GBP'000 GBP'000 GBP'000
Loss after tax from continuing operations (5,748) (2,241) (20,946)
Profit/(loss) after tax from discontinued
operations 10,787 (2,980) (184)
------------ ----------- --------------
Profit/(loss) attributable to ordinary
equity holders of the parent for
basic and diluted earnings per share 5,039 (5,221) (21,130)
------------ ----------- --------------
The alternative earnings per share calculations have been
computed because the directors consider that they are useful to
shareholders and investors. These are based on the following
profits/(losses) and the above number of shares.
Unaudited Unaudited Audited
6 months 6 months 12 months
to 31 May to 31 May to
2021 2020 30 November
2020
GBP'000 GBP'000 GBP'000
Loss after tax from continuing operations (5,748) (2,241) (20,946)
Add back Other Items
Amortisation of acquired intangibles 284 678 1,471
Exceptional reorganisation costs 182 215 934
Exceptional impairment costs - - 16,855
Shared-based payment charge 185 - 20
Tax charge related to Other Items (78) (146) (405)
Loss attributable to ordinary equity
holders of the parent for basic and
diluted earnings per share from continuing
operations before other items (5,175) (1,495) (2,071)
------------- -------------- -------------
Unaudited Unaudited Audited
6 months 6 months 12 months
to 31 May to 31 May to
2021 2020 30 November
2020
GBP'000 GBP'000 GBP'000
------------------------------------ ----------- ----------- -------------
Profit/(loss) per share
Basic and diluted earnings/(loss)
per share 11.6p (12.2)p (49.3)p
Basic and diluted loss per share
from continuing operations (13.2)p (5.2)p (48.8)p
------------------------------------ ----------- ----------- -------------
Adjusted loss per share
Basic and diluted loss per share
from continuing operations before
other items (11.9)p (3.5)p (4.8)p
------------------------------------ ----------- ----------- -------------
8 Loans and borrowings
Audited
Unaudited Unaudited as at 30
as at 31 as at 31 November
May 2021 May 2020 2020
GBP'000 GBP'000 GBP'000
Non-current
Bank loans (secured) - - -
Shareholder loans (unsecured) - 3,000 -
--------------------- ---------- ----------
- 3,000 -
--------------------- ---------- ----------
Current
Bank overdrafts (secured) 1,901 4,112 3,000
Bank loans (secured) - 12,676 6,771
Shareholder loans (unsecured) - - 2,672
--------------------- ---------- ----------
1,901 16,788 12,443
--------------------- ---------- ----------
1,901 19,788 12,443
--------------------- ---------- ----------
9 Net debt
Audited
Unaudited Unaudited as at 30
as at 31 as at 31 November
May 2021 May 2020 2020
GBP'000 GBP'000 GBP'000
Loans and borrowings (1,901) (19,788) (12,443)
Cash 6,295 12,403 9,306
Cash - held for sale - - 1,260
Net cash/(debt) 4,394 (7,385) (1,877)
--------------------- ---------- ----------
10 Trade and other payables
Audited
Unaudited Unaudited as at 30
as at 31 as at 31 November
May 2021 May 2020 2020
GBP'000 GBP'000 GBP'000
Trade payables 2,144 2,621 2,376
Other payables 1,100 3,209 1,222
Accruals 2,391 2,726 4,269
--------------------- ---------- ----------
Total financial Liabilities, excluding
loans and borrowings, classified
as financial liabilities measures
at amortised cost 5,635 8,556 7,867
Other tax and social security
tax 2,163 4,912 4,782
Contract liabilities 4,680 6,969 6,496
12,478 20,437 19,145
--------------------- ---------- ----------
11 Trade and other receivables
Audited
Unaudited Unaudited as at 30
as at 31 as at 31 November
May 2021 May 2020 2020
GBP'000 GBP'000 GBP'000
Trade receivables 8,309 12,104 8,268
Loss allowance (1,089) (1,325) (1,329)
--------------------- ---------- ----------
Trade receivables - net 7,220 10,779 6,939
Other receivables 128 507 177
Contract assets 3,009 3,109 3,220
Prepayments and stock 1,688 2,513 1,859
12,045 16,908 12,195
--------------------- ---------- ----------
12 Tax
Unaudited Unaudited Audited
6 months 6 months 12 months
to 31 May to 31 May to
2021 2020 30 November
2020
GBP'000 GBP'000 GBP'000
Current tax expense
Income tax of overseas operations
on profits/(losses) for the period/year 662 532 397
Adjustment in respect of prior
periods - (86) (59)
---------------------- ----------- -------------
Total current tax expense 662 446 338
---------------------- ----------- -------------
Deferred tax expense/(income)
Origination and reversal of temporary
differences (272) 32 (622)
Adjustment in respect of prior
periods 451 48 -
---------------------- ----------- -------------
Total deferred tax expense/(income) 179 80 (622)
---------------------- ----------- -------------
Total tax expense/(credit) 841 526 (284)
---------------------- ----------- -------------
Income tax expense attributable
to continuing operations 951 806 7
Income tax credit attributable
to discontinued operations (110) (280) (291)
---------------------- ----------- -------------
841 526 (284)
---------------------- ----------- -------------
13 Non-statutory information
The Group uses a variety of alternative performance measures,
which are non-IFRS, to assess the performance of its operations.
The Group considers these performance measures to provide useful
historical financial information to help investors evaluate the
underlying performance of the business.
These measures, as described below, are used to improve the
comparability of information between reporting periods and
geographical units, to adjust for exceptional items or to adjust
for businesses identified as discontinued to provide information on
the ongoing activities of the Group. This also reflects how the
business is managed and measured on a day-to-day basis.
1 Adjusted EBITDA - is the loss from continuing activities
adjusted to exclude depreciation and amortisation of development
costs GBP3.8m (May 2020: GBP2.3m, Nov 2020 GBP4.5m), amortisation
of acquired intangibles GBP0.3m (May 2020: GBP0.7m, Nov 2020
GBP1.5m), exceptional impairment costs GBPnil (May 2020 GBPnil, Nov
2020 GBP16.9m) exceptional reorganisation costs GBP0.2m (May 2020:
GBP0.2m, Nov 2020 GBP0.9m), and share-based charges GBP0.2m (May
2020: GBPnil, Nov 2020 GBP0.1m).
2 Recurring or predictable revenue - Contracted support,
maintenance and services revenues with a framework agreement of 2
years or more, as a percentage of total revenue
3 Own IP revenue as a percentage of total revenue - Own IP
revenue (which includes initial and annual software licences),
GBP8.4m (May 2020 GBP8.5m Nov 2020 GBP16.1m), as a percentage of
total Group revenue, GBP23.2m (May 2020 GBP23.1m, Nov 2020
GBP48.8m).
4 Own IP gross profit as a percentage of total gross profit -
Own IP gross profit, GBP6.2m (May 2020 GBP6.3m Nov 2020 GBP12.2m),
as a percentage of total Group gross profit, GBP13.1m (May 2020
GBP13.9m, Nov 2020 GBP28.7m).
5 Net cash/debt comprises Bank Loans, Shareholder Loans and
Overdrafts less Cash and cash equivalents, including Cash and cash
equivalents held for sale.
6 Adjusted loss/earnings per share - basic loss per share from
continuing operations adjusted to exclude amortisation of acquired
intangibles GBP0.3m (May 2020: GBP0.7m, Nov 2020 GBP1.5m),
exceptional impairment costs GBPnil (May 2020 GBPnil, Nov 2020
GBP16.9m) exceptional reorganisation costs GBP0.2m (May 2020:
GBP0.2m, Nov 2020 GBP0.9m), and share-based charges GBP0.2m (May
2020: GBPnil, Nov 2020 GBP0.1).net of the related tax charge
GBP0.1m (May 2020 GBP0.1m, Nov 2020 GBP0.4m).
7 Underlying support/admin costs - administrative expenses
adjusted to exclude depreciation and amortisation of development
costs GBP3.8m (May 2020 GBP2.3m Nov 2020 GBP4.5m), amortisation of
acquired intangibles GBP0.3m (May 2020 GBP0.7m, Nov 2020 GBP1.5m),
exceptional impairment costs GBPnil (May 2020 GBPnil, Nov 2020
GBP16.9m), exceptional reorganisation costs GBP0.2m (May 2020
GBP0.2m, No 2020 GBP0.9m) and share-based charges GBP0.2m (May 2020
GBPnil, Nov 2020 GBP0.1m).
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
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END
IR FLFSSDAIVFIL
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