TIDMFITB
RNS Number : 4451K
Fitbug Holdings PLC
21 September 2016
This announcement contains inside information for the purposes
of Article 7 of Regulation 596/2014 (MAR).
Fitbug Holdings plc
(the "Company" or the "Group")
Interim Results for the six Months Ended 30 June 2016
Fitbug Holdings Plc, the AIM quoted provider of corporate
wellness solutions and services, announces its Interim Results for
the six months ended 30 June 2016.
Highlights:
-- Implementation of turnaround strategy away from retail to Corporate Wellness
-- Total sales of GBP729,000 (2015: GBP991,000);
-- B2B sales of GBP562,219 (2015: GBP369,151);
-- Gross profit of GBP408,000 (2015: GBP530,000);
-- Loss before tax GBP(1,644,000) (2015: GBP(3,215,000));
-- Good progress on Corporate Wellness offering made with three strategic partners;
-- Significant reduction in permanent cost base and engagement
of outsourced service providers for development of platform and
ancillary services (IT, logistics, finance admin)
The first half of the year has produced sales in the B2B sector
of GBP562,219, a 52% increase in like for like sales for 2015.
Whilst overall sales for the first half were lower than the same
period in 2015, the results reflect the Group's strategy to
re-focus on Corporate Wellness rather than on the retail sector, a
sector in which 2015's first half weighted results proved
unsustainable. The Group's turnaround strategy has reduced first
half losses by almost 50% in comparison with 2015.
Post period end, the Group successfully completed its GBP2.61m
fundraise and the restructuring of its balance sheet through the
conversion of GBP8.4m of the Group's core debt into equity.
Donald Stewart, Fitbug Chairman, commented on the results,
"Fitbug has continued to focus on implementing its turnaround
strategy. This involves concentrating our resources on providing
digital wellness solutions to the corporate sector through our key
partners. This strategy has seen encouraging progress in the first
half and has allowed the Group to grow end-user engagement while
simultaneously reducing our cost base significantly. With our
additional working capital and reduced levels of debt following our
successful fundraise in July, the Board is confident as to the
Company's future prospects."
Anna Gudmundson, Fitbug CEO, added, "Having only brought the new
Corporate Wellness offering to market at the end of 2015, it is
great to see the Company starting to benefit from the new strategy
in such a short period of time. It is still early days for our
digital wellness platform but we pleased to see our clients using
the service and, in the case of some large organisations, starting
rollouts across thousands of employees. We have successfully
restructured the Group and now have a substantially smaller, more
focussed and experienced team which is accelerating our ability to
deliver, as well as improving quality across all areas of the
business."
For further information, visit www.fitbug.com or
www.fitbugholdings.com or contact:
Anna Gudmundson / Donald
Stewart Fitbug Holdings Plc 020 7449 1000
------------------------------ --------------------------- --------------
Marc Milmo/ Catherine Cantor Fitzgerald Europe,
Leftley Nomad and Joint Broker 020 7894 7000
------------------------------ --------------------------- --------------
Claire Louise Noyce /
William Lynne / Niall Hybridan LLP, Joint
Pearson Broker 020 3764 2341
------------------------------ --------------------------- --------------
Elisabeth Cowell / Charlotte St Brides Partners
Heap Ltd, Public Relations 020 7236 1177
------------------------------ --------------------------- --------------
Notes
About Fitbug(R)
Fitbug provides digital wellness solutions that empower
employers to create a positive culture of health within their
organisation. By helping employees to embrace a healthier way of
living, Fitbug can help maximise performance, reduce absenteeism,
decrease the risk of chronic illness, and lower healthcare
costs.
The Company's technological edge allows us to address holistic
wellness by engaging both individuals and teams through
intelligent, personalised interaction and gamification. This is an
opportunity to make incremental behavioural changes that will last
a lifetime. The progress of individuals translates to actionable
data, meaningful reporting and insights that allow the organisation
to monitor the impact of the programme and to refine it in order to
achieve success.
Fitbug's shares are listed on the London Stock Exchange AIM
market under ticker FITB.
CHAIRMAN'S STATEMENT:
The Group has experienced an encouraging start to trading in
2016 following the commencement of its turnaround strategy in the
second half of 2015. The reduction in overall Group sales reflects
Fitbug's strategy to move away from retail to focus on the B2B
sector and whilst sales revenues are down against the same period
last year, the first half of 2016 produced sales in the B2B sector
of GBP562,219, a significant increase over sales in this sector
from 2015 (2015: GBP369,151). The Group's results were greatly
improved with significant orders from a South African partner which
are expected to continue to be rolled out throughout the remainder
of 2016.
The key development of the period was the publication, on 29
June, of the Company's proposals to raise GBP2.61m of additional
funds and to significantly restructure its balance sheet through
the conversion of GBP8.4m of the Group's core debt into equity.
These proposals were approved by shareholders on 22 July and the
fundraising was completed successfully on 25 July. In addition, on
25 July the Company adopted two new share option schemes, an
Enterprise Management Incentive scheme and an Unapproved Scheme and
granted options over 9.24% of the enlarged issued share capital of
the Company pursuant to these new schemes.
Outlook
During the remainder of the second half of the current financial
year, the Directors will continue to build upon the B2B success to
date, concentrating the Group's resources on providing digital
wellness solutions to the corporate sector through its key
partners. As previously stated, the Company has identified a low
cost entry point to market via relationships with strategic
partners.
The Group continues to focus on its pipeline of potential B2B
opportunities working closely with Willis Towers Watson in South
East Asia and its other key strategic partners to explore further
roll out opportunities. As previously announced, Punter Southall
Health & Protection Consulting Limited extended Fitbug's
Digital Wellness Solution to four of its clients between November
2015 and February 2016. In addition, the Group is simultaneously
reducing its costs significantly in order to reach its goal of
reducing its expenses by over 30 per cent. in the current financial
year.
Fitbug is working in a fast expanding market space, offering
wellness services to a growing number of global corporate clients.
Its goal is to help substantial organisations create a culture of
wellness that increases employee productivity and reduces
healthcare costs by helping to promote and engage employees in
living a more positive lifestyle. Fitbug has created a simple,
powerful and high value Digital Wellness solution that engages
users by making this process personal and fun.
Fitbug Holdings plc
Consolidated statement of comprehensive income
for the period ended 30 June 2016
Unaudited 6 months Unaudited 6 months Audited
Year
ended ended Ended
30 June 30 June 31 December
2016 2015 2015
Note GBP'000 GBP'000 GBP'000
Continuing operations
Revenue 729 991 1,259
Cost of sales - normal (299) (461) (647)
------------ ------------ ------------
Gross profit before exceptional items 430 530 612
Exceptional write down of obsolete inventory - - (736)
------------ ------------ ------------
Gross profit 430 530 (124)
Operating and administrative expenses - normal (1,939) (3,074) (5,241)
Operating and administrative expenses - exceptional - (467) (1,162)
Finance income - - 2
Finance costs (137) (204) (5)
------------ ------------ ------------
Loss for the period before tax (1,646) (3,215) (6,530)
Income tax - - 227
------------ ------------ ------------
Loss for the period and total comprehensive income
for the period attributable to equity holders
of the parent (1,646) (3,215) (6,303)
------------ ------------ ------------
Loss per share 2 (0.6) (1.3) (2.5)
------------ ------------ ------------
Fitbug Holdings plc
Consolidated statement of changes in equity
for the six months ended 30 June 2016
Share Share Retained Total
capital Premium deficit Equity
GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 January 2015 (audited) 2,408 4,144 (9,853) (3,301)
Loss and total comprehensive income for the period - - (3,215) (3,215)
Share based payment - - 281 281
------------ ------------ ------------ ------------
Balance at 30 June 2015 (unaudited) 2,408 4,144 (12,787) (6,235)
Loss and total comprehensive income for the period (3,088) (3,088)
Issue of shares for cash 407 609 - 1,016
Costs of raising funds - (38) - (38)
Share based payment - - 192 192
------------ ------------ ------------ ------------
Balance at 31 December 2015 (audited) 2,815 4,715 (15,683) (8,153)
Loss and total comprehensive income for the period - - (1,646) (1,646)
Share based payment - - 2 2
------------ ------------ ------------ ------------
Balance at 30 June 2016 (unaudited) 2,815 4,715 (17,327) (9,797)
------------ ------------ ------------ ------------
Fitbug Holdings plc
Consolidated Balance Sheet
at 30 June 2016
Unaudited Unaudited Audited
6 months 6 months Year
Ended Ended Ended
30 June 30 June 31 December
2016 2015 2015
GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Intangible assets - 523 -
Property, plant and equipment 30 32 29
------------ ------------ ------------
Total non-current assets 30 555 29
------------ ------------ ------------
Current assets
Inventories 481 1,243 577
Trade and other receivables 242 508 751
Cash and cash equivalents 65 795 698
------------ ------------ ------------
Total current assets 788 2,546 2,026
------------ ------------ ------------
Total assets 818 3,101 2,055
------------ ------------ ------------
Liabilities
Non-current liabilities
Borrowings 9,140 6,939 8,739
------------ ------------ ------------
Total non-current liabilities 9,140 6,939 8,739
------------ ------------ ------------
Current liabilities
Trade and other payables 900 1,322 894
Borrowings 575 1,075 575
------------ ------------ ------------
Total current liabilities 1,475 2,397 1,469
------------ ------------ ------------
Total liabilities 10,615 9,336 10,208
------------ ------------ ------------
Net liabilities (9,797) (6,235) (8,153)
------------ ------------ ------------
Capital and reserves
Share capital 2,815 2.408 2,815
Share premium 4,715 4,144 4,715
Retained deficit (17,327) (12,787) (15,683)
------------ ------------ ------------
Total equity (9,797) (6,235) (8,153)
------------ ------------ ------------
Fitbug Holdings plc
Consolidated cash flow statement
for the six months ended 30 June 2016
Unaudited Unaudited Unaudited
Six months Six months 12 Months
Ended Ended ended
30 June 30 June 31December
2016 2015 2015
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Loss before taxation (1,646) (3,215) (6,303)
Adjustments for:
- Depreciation and amortisation 7 76 82
- Share-based payments 475 281 473
- FX gain loss (625) - (74)
- Adjustment on consolidation 162 - (66)
- Finance income - - (2)
- Finance expense 137 204 5
- Returns provision (110) - 216
- Write off of development costs - - 569
- Impairment of stock 22 - 736
------------ ------------ ------------
Cash flows from operating activities before changes in working capital
and provisions (1,578) (2,654) (4,364)
- Decrease in inventories 164 19 206
- Decrease in trade and other receivables 520 350 95
- Increase/(decrease) in trade and other payables 4 3 (797)
------------ ------------ ------------
Net cash used in operations (883) (2,282) (4,860)
------------ ------------ ------------
Cash flow from investing activities
Purchase of property, plant and equipment (7) (22) 26
Development costs capitalised - (122) (167)
Finance income - - 2
------------ ------------ ------------
Net cash used in investing activities (7) (144) (139)
------------ ------------ ------------
Cash flow from financing activities
Issue of ordinary shares for cash - - 1,015
Costs directly related to issue of shares - - (38)
Loan advances 401 - 1,300
Loan repayments - - -
Finance expense (144) (204) (5)
------------ ------------ ------------
Net cash generated from financing activities 257 (204) 2,272
------------ ------------ ------------
Net decrease in cash and cash equivalents (633) (2,630) (2,727)
Cash and cash equivalents at beginning of period 698 3,425 3,425
------------ ------------ ------------
Cash and cash equivalents at end of period 65 795 698
------------ ------------ ------------
Fitbug Holdings plc
Unaudited notes forming part of the consolidated interim
financial statements
for the six months ended 30 June 2016
1 BASIS OF PREPARATION
Fitbug Holdings plc is a public company incorporated in England
under the Companies Act 2006. Its registered office address is
Suite 5, 1(st) Floor, 5 Rochester Mews, London NW1 9JB.
These condensed consolidated interim financial statements of the
Company for the six months ended 30 June 2016 comprise the Company
and its subsidiaries (together referred to as "the Group"). These
interim statements do not constitute statutory accounts as defined
in Section 434 of the Companies Act 2006. The interim financial
information has been prepared using the same accounting policies,
presentation, method of computation and estimation techniques as
are expected to be adopted in the Group financial statements for
the year ending 31 December 2016 and which were adopted in the
audited Group financial statements for the year ended 31 December
2015.
The financial information for the year ended 31 December 2015
has been extracted from the statutory accounts for that period. The
auditors have reported on the statutory accounts for the year ended
31 December 2015 and their report was unqualified. The auditors'
report drew attention by emphasis of matter to issues surrounding
the ability of the Company to continue as going concern. A copy of
those financial statements has been filed with the Registrar of
Companies.
These condensed consolidated interim financial statements have
been prepared using accounting policies consistent with
International Financial Reporting Standards (IFRSs) as adopted in
the EU. While the financial figures included in this half yearly
report have been computed in accordance with IFRSs as adopted in
the EU applicable to interim periods, this half yearly report does
not contain sufficient information to constitute an interim
financial report as that term is defined in IAS 34.
2 LOSS PER SHARE
The loss per share is based on a loss for the period
attributable to equity holders of the Company of GBP1,644,000
(2015: loss of GBP3,215,000) and the weighted average number of
ordinary shares being in issue for the period of 281,450,530 (2015:
240,850,530).
The exercise of the options outstanding as at 30 June 2016 would
reduce the loss per share and hence have an anti-dilutive effect.
As at 30 June 2016 there were 50,000 (2015: 21,100,000) shares that
could potentially have been issued under the terms of options and a
further 33,333,334 shares that could have been potentially issued
under the terms of convertible loans that would potentially reduce
future earnings per share.
3 GOING CONCERN
These condensed interim financial statements for the six months
ended 30 June 2016 have been prepared on the assumption that the
Group will be able to continue trading as a going concern for the
foreseeable future. As at 30 June 2016 the Group had outstanding
loans of GBP9,640,000, which included GBP1m in loans from Kifin
Limited, a Kirsh Group subsidiary, (including a GBP500,000 loan
issued under a convertible loan note instrument dated 28 June 2012)
and loans of a further GBP8,640,300 from NW1 Investments Limited, a
company connected to two of the former directors of the Group.
The directors have prepared these interim financial statements
on the basis that the Group is a going concern as the successful
completion of the Group's GBP2.61m fundraising and the
restructuring of its balance sheet in late July 2016 together with
the Group's anticipated sales pipeline is expected to provide the
Group's with working capital sufficient for its requirements for at
least the next 12 months. The Group's sales forecasts are, however,
based on the achievement of and timings of revenue forecasts which,
although believed reasonable by the directors are nevertheless, in
part, outside the Group's direct control. If significant delays
were to take place, these may render the Group's cash resources
insufficient.
If as a result the Group were unable to continue as a going
concern, then adjustments would be necessary to write assets down
to their recoverable amounts, non-current assets and liabilities
would be reclassified as current assets and liabilities and
provisions would be required for any costs associated with
closure.
4 SUBSEQUENT EVENTS
The Company announced the results of a new fundraising and debt
re-profiling on 22(nd) July 2016:
On 22(nd) July 2016 each of the Company's existing ordinary
shares of 1p each were subdivided into one new ordinary share of
0.1p and one deferred share of 0.9p.
GBP2.61m (before expenses) was raised by the issue of
613,916,438 new Ordinary Shares at 0.25p per share and the creation
of GBP1,076,275 of new loan notes.
Additionally, a further 336,000,000 new Ordinary Shares were
issued at 2.5p per share to capitalise GBP8.4m of loans due to two
investors.
This strong support from key stakeholders not only provides the
Company with additional funding but also reduces its interest
charge.
5 BOARD CHANGES
During the period under review, the Company appointed Dr Mark
Ollila to the Board as a non-executive director on 8 January 2016.
Mark is based in San Diego and has held numerous senior positions
in mobile media and technology.
The Company also announced on 29(th) June the appointment of
Tyler Tarr to the Board as part time finance director and the
resignations of David Turner and Allan Fisher, both non-executive
directors. Tyler has worked with the Company as interim CFO since
December 2015 and has a wealth of experience in managing the
finances of technology companies.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LLFIIATILFIR
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September 21, 2016 06:15 ET (10:15 GMT)
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