TIDMNLG
RNS Number : 4287J
Arria NLG PLC
12 June 2014
Arria NLG plc
("Arria" or the "Company")
Interim Results for the six months ended 31 March 2014
Arria NLG plc (AIM: NLG), a leader in the development and
deployment of Natural Language Generation ("NLG") technologies,
announces its Interim Results for the six months ended 31 March
2014.
Operational highlights
-- Extended existing agreement with oil & gas super-major
client into 2014 with subsequent announcement in May 2014 of new
three year agreement
-- UK Met Office adds NLG-authored narratives to its 5 day forecasts on its Met Invent website
-- Growing awareness of NLG in the oil & gas industry -
invited to present key-note speech and participate at Society of
Petroleum Engineers conferences in Dubai & Utrecht
-- Significant and experienced appointments made to Group Board and management team
-- Michael Higgins & Paul Kidney appointed as Non-Executive
Directors to Arria's Board
-- Christopher Messina appointed in New York as Senior Vice
President, Business Development to expand Arria's Financial
Services practice
-- Continued progress made in development of the Group's patent program
-- Completion of Arria NLG Studio and launch of the Language Factory
-- Deployment of version 3.0 of the Arria NLG Engine
Financial
-- Revenues up 57% to GBP330k (GBP210k HY13)
-- Operating costs excluding amortisation and share based
payment charges down 20% to GBP3.9 million (GBP4.9 million
HY13)
-- Concluded second 2013 private placement raising c.US$15.8 million
-- Completed the acquisition of Data2Text Limited for
consideration of GBP3.125 million in cash and issue of ordinary
shares equivalent to approximately 22.59% of the share capital of
the Company
-- Completed introduction of Arria's ordinary shares and
warrants to trading on the London Stock Exchange ("LSE") AIM market
("AIM")
Commenting on the results, Stuart Rogers, Arria Chairman and
Chief Executive, said:
"Arria has delivered significant progress during the first half
of this financial year in successfully executing the Company's
strategic plan. Primary accomplishments being the successful
conclusion of the acquisition of Data2Text Limited in October 2013,
followed by the admission to trading of the Company's shares on the
London AIM market in December 2013 - both of which position the
Group well to grow and optimise the commercial realisation of its
owned Natural Language Generation technologies."
For further information, please visit www.arria.com or
contact:
Arria NLG plc Tel +44 (0) 20 7100
Stuart Rogers, Chairman and Chief Executive 4540
--------------------------------------------- -----------------------
Allenby Capital, Nominated Adviser and Tel: +44 (0) 20 3328
Broker 5656
Jeremy Porter
Nick Naylor
James Reeve
--------------------------------------------- -----------------------
Westhouse Securities, Joint Broker Tel: +44 (0) 20 7601
Antonio Bossi 6100
Robert Finlay
--------------------------------------------- -----------------------
Walbrook, Financial PR and IR Tel: 44 (0) 20 7933
Bob Huxford 8792
Guy McDougall arria@walbrookpr.com
--------------------------------------------- -----------------------
Chairman's Statement
I am pleased to present our financial results for the six months
to 31 March 2014 and to update you on our progress.
In December 2013, Arria signed an extension agreement to the
existing license contracts with Shell Exploration and Production
Company ("Shell"), extending usage on a month-by-month basis while,
new, longer term agreements were being finalised. In May 2014 a
three year contract was signed with Shell that provides Arria with
annual fees for non-exclusive use of the Arria NLG Engine to expand
NLG decision support technologies to Shell's offshore platforms
across parts of the Americas, plus the adoption of Arria's NLG
services expanding from existing Facilities NLG narratives to
further service categories in upstream operations across parts of
the Americas. Upon full performance of the agreement, which is
effective from 1 June 2014, Shell undertakes to pay Arria US$5-10
million over three years. A large proportion of these fees are
annual and on-going base licence and use-per-platform fees for
Facilities NLG narratives to offshore platforms in parts of the
Americas. One-time configuration and deployment fees payable upon
agreed milestones are also included in the agreement, and the fee
structure makes provision for deployment and usage beyond the
Americas.
Showcasing to the Society of Petroleum Engineers
During October 2013 Dr Robert Dale opened the Society of
Petroleum Engineers ("SPE") 2013 Intelligent Energy Conference in
Dubai with the Key Note Address. The conference is considered to be
one of the industry's most important events bringing together over
2,000 oil and gas professionals focusing on cutting edge
technologies in the field of intelligent energy. The address,
entitled the Articulate Machine showcased Arria's technology to the
industry for the first time.
We further developed our relationships with other oil and gas
prospects at a Society for Petroleum Engineers (SPE) event in Al
Khobar, Saudi Arabia in March, and at the SPE Intelligent Energy
conference in Utrecht, Holland. These conferences provided Arria
with a great opportunity to showcase the progress our technology
has made over the last 12 months and to explain how it is used in a
live deployment in the Gulf of Mexico. At Utrecht we had a large
booth in the main conference hall and saw strong interest as we
provided attendees with an 'under the covers' look at the Arria NLG
Engine technology.
Also at the SPE conference in Utrecht, Professor Reiter gave a
very well received presentation in a panel session called "Learning
From Others: Are We Unique?". He and Simon Small, Arria's
President, participated along with senior representatives from IBM,
Accenture, Chevron and Total. The session was designed to elicit
learning from other industries, providing a perfect forum for
Professor Reiter to give a lively presentation from his personal
experience about the similarities between surgeons and engineers.
As Professor Reiter noted, they face identical challenges with
their data, and in both cases those challenges are addressed by the
solutions that we provide, helping them make faster and higher
quality decisions.
The sales team left Utrecht and Saudi Arabia with many solid
leads and invitations for further dialogue with a number of oil and
gas companies, exploring a range of use cases including fracking,
wells, electrical submersible pumps, data management and
drilling.
On the weather front
The UK Met Office signed an extension to the current NLG weather
forecasting product featured on its Met Invent web page. You can
try the application out for yourself by visiting the Met Invent
website at http://www.metoffice.gov.uk/invent and following the
links to 'Text enhanced forecasts'.
Business Development
The business development capabilities of the Group were enhanced
in December with the addition of Christopher Messina joining
Arria's sales team. Based in New York as Senior Vice President,
Business Development with the specific goal to expand Arria's
Financial Services practice, bringing someone of Christopher's
experience to Arria adds clear additional bench strength to our
business development capabilities. His career has seen him work
across the globe with its diverse cultures, and apply his
considerable knowledge to a long line of success stories, including
some of the world's preeminent financial institutions. With his
extensive background, Christopher understands the mission critical
requirements for financial exchanges and trading systems and will
be a great benefit to our appreciation and knowledge, as we look to
move further into this sizeable market. He is a strong addition to
our team and represents the first phase of additional investment in
our business development capabilities that is taking place during
2014.
Our business development efforts continue to bear fruit in the
form of increasing numbers of identified client use-cases for our
NLG technologies and eventual deployment of the Arria NLG Engine
ranging from regulatory compliance in financial services to
applications in healthcare. Identified use-cases lead to proof of
concepts, scoping, full deployment and eventual licensing of the
software so the clear progress in this area is both encouraging and
a validation of our business development strategy.
Strengthening the Board
Two non-Executive Directors joined the Board in late 2013,
Michael Higgins and Paul Kidney. Given their backgrounds and
experience, both are strong additions to the Board. Michael Higgins
chairs the Audit Committee and Paul Kidney chairs the Remuneration
Committee.
Admission to AIM
On December 5, 2013, Arria's shares and warrants began to trade
on the London Stock Exchange AIM market under the symbol NLG.
Arria NLG Engine 3.0 - Successfully Deployed
In January 2014 we successfully deployed version 3.0 of the
Arria NLG Engine. This latest version of Arria's NLG engine has the
ability to integrate graphical information derived from big data
sources with the existing NLG reporting capabilities to provide
even more effective decision-support. This facet of the system
alone has generated much comment from clients, partners, and
prospects. Until now the dominant form of dashboard presented
analytics was limited to graphical output only. The latest version
of the NLG Engine, by integrating a graphics engine alongside the
narrative realiser, sets a new benchmark across the whole
industry.
Feedback we received highlighted the considerable value of
embedding NLG generated alerts into a graphical interface
environment in real time. As a result of this tight integration,
reports produced by the new Arria NLG 3.0 engine support faster,
more effective decision-making in high intensity operational
environments.
We recently expanded our data analytics capabilities by bringing
in data science talent from the US and France to our Aberdeen
operations. The impact of the new team members is already starting
to be felt. Working as part of our Core Technology development
team, they have just delivered a new Data Science Framework, a set
of software tools that allows for easier connection to disparate
big data sets, higher quality predictive analytics and faster
knowledge capture of subject matter expertise into NLG
applications.
The demand for this capability comes from requests from surgeons
and engineers who want to streamline the twin processes of
capturing the knowledge of their subject matter experts and
integrating data sets into the Arria Natural Language Generation
Engine.
Professor Reiter's talk in Utrecht summed up the key benefit
here: "We hear the same message from CTOs and Chief Petroleum
Engineers in the Gulf of Mexico and in the Middle East as we do
from cardiovascular surgeons: subject matter expertise is their
most valued asset. So by reducing the time it takes to capture this
expertise and the time it takes to make sense of the data, our new
Data Science Framework speeds up the development of applications
that automate insights and generate narratives, adding an
unprecedented capability for faster and higher quality decision
support."
In addition to working with our large-scale enterprise clients
and prospects, Arria also develops solutions intended for release
as business-to-business and business-to-consumer applications under
its own banner. Internally, we refer to the group that creates
these applications as our Language Factory. The team has been busy
exploring a wide range of ideas for development.
NLG Studio
The first stage completion of the NLG Studio after two years
work represents a significant technical milestone for the company.
The NLG Studio provides even novice developers with the ability to
build highly effective NLG systems swiftly using standard XML
tools. The speed with which Arria can now develop solutions in
response to use case requests from clients has shifted from months
to days. Projects that would have taken six months to complete can
now be finished in one. The potential in terms of billing cycles
and sales pipeline management should be clear. Our sales teams can
now speak to many more leads simultaneously, and even offer quickly
deployed proof of concept projects to speed up our sales cycles.
The NLG Studio will continue to be developed and will constitute
the core tool set in all our development going forward. There is a
recognised potential for revenue from licensing use of the NLG
Studio in the longer term.
Finance Review
During the first half of our financial year the Group has
continued to invest in delivering its strategic plan. Principle
financial highlights in the period are listed below:
-- Completion of the acquisition of Arria Data2Text Limited
(formally Data2Text Limited) for GBP3.125 million in cash
consideration and 23,165,488 ordinary shares representing
approximately 22.59% of the share capital of the Company, along
with the completion of the acquisition of Global IP Inc. for share
consideration of 5,077,574 ordinary shares, both in October
2013;
-- Admission of the Company's shares and warrants to the London AIM market in December 2013;
-- Revenues in the period were up 57% to GBP330k (GBP210k HY13),
the increase reflecting the impact of the 2013 Shell contract in
current period;
-- Operating costs excluding amortisation and share based
payment charges down 20% to GBP3.9 million (GBP4.9 million HY13),
which principally reflected the higher level of non-recurring
transaction related costs in the prior period;
-- Average net monthly operating costs excluding non-recurring
transaction related costs, amortisation, depreciation and share
based payments charges were GBP521k pcm (GBP528k HY13) representing
a 1% decrease against the same period in the prior year; and
-- Average staff numbers for the period was 54 (30 HY13). The
majority of the increase was in the area of operational deployment
and sales.
On 24 October 2013, in accordance with Chapter 2, Part 13 of the
Companies Act 2006 the Company passed a resolution to cancel the
entire share premium of the Company at that time of GBP5,608,796,
pursuant to a Solvency Statement made by the Directors under
Section 643 of the Companies Act 2006, made for the purposes of
Section 642 of the Companies Act 2006. The resulting credit to
reserves from this "capital reduction" is recorded in the Group's
Statement of Changes in Equity.
At the balance sheet date the Group had GBP4.1 million of cash
on hand and net assets of GBP29.0 million. In considering the
ability of the Group to meet its financial obligations as they fall
due, the Board has considered the expected trading performance of
the Group, including working capital requirements and the level of
overheads to be funded. The Directors are satisfied based on the
supporting business plan and cash flow, and expectation of further
equity fundraising, the Group has adequate resources to continue in
operational existence for the foreseeable future and accordingly,
continue to adopt the going concern basis in preparing the
financial statements, and the Directors remain confident in the
future prospects of the Group.
Outlook and prospects
Arria NLG has sales and marketing personnel in the UK, the US
and the Pacific Rim. We are actively seeking client engagements and
new NLG applications in the oil & gas industry, in regulatory
defence and financial services, in power and water systems, mining,
healthcare and with data and application platform partners. The
Group and its core technology are well positioned to rapidly
capitalise on this pipeline of potential clients, and this
considerable client prospecting is supported by both the growing
recognition of the significant challenges large enterprises face
with the growth size and complexity of their data repository, and
the degree to which Arria's NLG technologies meet and overcome
these challenges.
I would like to thank the whole Arria team for their continued
efforts and to our shareholders for their continuing support as we
progress on this journey of commercialising the array of
opportunities in front of us.
By order of the Board
Stuart Rogers
Chairman and Chief Executive Officer
11 June 2014
INTERIM CONDENSED STATEMENT OF COMPREHENSIVE INCOME
Six months ended Six months ended Year
ended
31 March 31 March 30 September
2014 2013 2013
Unaudited Unaudited Audited
Notes (GBP000's) (GBP000's) (GBP000's)
Revenue 6 330 210 816
------------- ------------ -------------
Cost of sales (283) (67) (139)
------------- ------------ -------------
Gross profit 47 143 677
Administrative expenses
- Share-based payments (61) (761) (1,113)
- Amortisation of intangibles (1,412) (1,707) (3,119)
- Other administrative costs (3,929) (4,962) (9,441)
------------- ------------ -------------
Total administrative expenses (5,402) (7,430) (13,673)
------------- ------------ -------------
Operating loss 5 (5,355) (7,287) (12,996)
------------- ------------ -------------
Finance income - - 1
Finance expense 20 (9) (17)
------------- ------------ -------------
Loss before tax (5,335) (7,296) (13,012)
Taxation credit 7 146 146 587
------------- ------------ -------------
Total comprehensive loss for
the period (5,189) (7,150) (12,425)
------------- ------------ -------------
Loss attributable to:
- Owners of the parent (5,189) (6,272) (10,748)
- Non-controlling interests - (878) (1,677)
------------- ------------ -------------
(5,189) (7,150) (12,425)
------------- ------------ -------------
Loss per share
Basic and diluted loss per
share 8 (0.05)p (0.11)p (0.18)p
------------- ------------ -------------
The results reflected above relate to continuing activities.
The above statement should be read in conjunction with the
accompanying notes
INTERIM CONDENSED STATEMENT OF FINANCIAL POSITION
As at 31 March As at As at
2014 Unaudited 31 March 2013 30 September
(GBP000's) 2013
Unaudited Audited
Notes (GBP000's) (GBP000's)
ASSETS
Non-current assets
Goodwill 14,353 14,353 14,353
Other intangible assets 9 13,125 15,900 14,482
Property, plant and equipment 10 230 234 249
Trade and other receivables 175 158 168
---------------- ----------------------- --------------------------
27,883 30,645 29,252
---------------- ----------------------- --------------------------
Current assets
Trade and other receivables 298 781 1,435
Cash and cash equivalents 4,141 3,860 3,939
---------------- ----------------------- --------------------------
4,439 4,641 5,374
---------------- ----------------------- --------------------------
TOTAL ASSETS 32,322 35,286 34,626
---------------- ----------------------- --------------------------
EQUITY AND LIABILITIES
Equity attributable to holders
of the parent
Ordinary Share capital 12 103 35 36
Class A preference share capital 12 - 20 25
Class B preference share capital 12 - 5 5
Share premium 12 6,429 491 4,222
Merger reserve 13 28,092 3,131 3,131
Capital redemption reserve 12 22 - -
Retained Profit/(Loss) (5,749) 1,732 (2,497)
---------------- ----------------------- --------------------------
28,897 5,414 4,922
Non-controlling interest 14 - 25,203 24,404
---------------- ----------------------- --------------------------
TOTAL EQUITY 28,897 30,617 29,326
---------------- ----------------------- --------------------------
Non-current liabilities
Deferred tax 2,066 2,653 2,212
---------------- ----------------------- --------------------------
Current liabilities
Trade and other payables 1,359 1,677 2,742
Borrowings 11 - 339 346
---------------- ----------------------- --------------------------
1,359 2,016 3,088
TOTAL LIABILITIES 3,425 4,669 5,300
---------------- ----------------------- --------------------------
TOTAL EQUITY AND LIABILITIES 32,322 35,286 34,626
---------------- ----------------------- --------------------------
The above statement should be read in conjunction with the
accompanying notes.
INTERIM CONDENSED STATEMENT OF CHANGES IN EQUITY
Notes Ordinary Preference Share Merger Capital Accumu-lated Total Non-Controlling Total
Share Share Premium Reserve Redemptio-n Losses Interest Equity
Capital Capital Reserve (GBP000's)
(GBP000's) (GBP000's) (GBP000's) (GBP000's) (GBP000's) (GBP000's) (GBP000's) (GBP000's)
As at 1 October
2012
(Audited) 33 23 11,130 3,131 - (4,831) 9,486 26,081 35,567
Issue of shares
12 2 2 1,434 - - - 1,438 - 1,438
Share based
payment
expense - - - - - 761 761 - 761
Capital
reduction - - (12,073) - - 12,073 - - -
--------------------- ---------- ---------- ---------- ---------- ----------- ------------ ---------- --------------- ----------
Total
contributions
by owners of the
company 2 2 (10,639) - - 12,834 2,199 - 2,199
Total
comprehensive
loss - - - - - (6,272) (6,272) (878) (7,150)
--------------------- ---------- ---------- ---------- ---------- ----------- ------------ ---------- --------------- ----------
As at 31 March
2013
(Unaudited) 35 25 491 3,131 - 1,731 5,413 25,203 30,616
--------------------- ---------- ---------- ---------- ---------- ----------- ------------ ---------- --------------- ----------
As at 1 April
2013
(Unaudited) 35 25 491 3,131 - 1,731 5,413 25,203 30,616
Issue of shares
12 1 5 3,903 - - - 3,909 - 3,909
Share issue
transaction
costs
12 - - (172) - - - (172) - (172)
Share based
payment
expense - - - - - 352 352 - 352
Reclassification
of equity
settled
share based
payments
expense - - - - - (105) (105) - (105)
--------------------- ---------- ---------- ---------- ---------- ----------- ------------ ---------- --------------- ----------
Total
contributions
by owners of the
company 1 5 3,731 - - 247 3,984 - 3,984
Total
comprehensive
loss - - - - - (4,476) (4,476) (799) (5,275)
--------------------- ---------- ---------- ---------- ---------- ----------- ------------ ---------- --------------- ----------
As at 30
September
2013
(Audited) 36 30 4,222 3,131 - (2,498) 4,921 24,404 29,325
--------------------- ---------- ---------- ---------- ---------- ----------- ------------ ---------- --------------- ----------
As at 1 October
2013
(Audited) 36 30 4,222 3,131 - (2,498) 4,921 24,404 29,325
Issue of shares
12 45 14 8,880 24,961 - - 33,900 - 33,900
Conversion of
shares
at listing 12 44 (44) - - - - - - -
Repurchase and
cancelation of
shares 12 (22) - - - 22 - - - -
Share issue
transaction
costs 12 - - (1,064) - - - (1,064) - (1,064)
Share based
payment
expense - - - - - 61 61 - 61
Acquisition of
non-controlling
interests 14 - - - - - (3,732) (3,732) (24,404) (28,136)
Capital
reduction
12 - - (5,609) - - 5,609 - - -
--------------------- ---------- ---------- ---------- ---------- ----------- ------------ ---------- --------------- ----------
Total
contributions
by owners of the
company 67 (30) 2,207 24,961 22 1,938 29,165 (24,404) 4,761
Total
comprehensive
loss - - - - - (5,189) (5,189) - (5,189)
--------------------- ---------- ---------- ---------- ---------- ----------- ------------ ---------- --------------- ----------
As at 31 March
2014
(Unaudited) 103 - 6,429 28,092 22 (5,749) 28,897 - 28,897
--------------------- ---------- ---------- ---------- ---------- ----------- ------------ ---------- --------------- ----------
The above statement should be read in conjunction with the
accompanying notes.
INTERIM CONDENSED STATEMENT OF CASH FLOWS
Six months Six months ended Year ended
ended 31 March 31 March 2013 30 September
2014 2013
Unaudited Unaudited Audited
Notes (GBP000's) (GBP000's)
(GBP000's)
Loss before interest and taxation (5,355) (7,287) (12,996)
Adjustments for:
Depreciation of plant and equipment
10 34 32 68
Amortisation of intangible assets
9 1,412 1,707 3,119
Share based payments 61 761 1,113
---------------------------------------------------------------------- --------------- ------------- --------------
Operating cash flows before movements
in working capital (3,848) (4,787) (8,696)
---------------------------------------------------------------------- --------------- ------------- --------------
Decrease/(Increase) in trade and
other receivables 1,130 (401) (418)
(Decrease)/Increase in trade and
other payables (1,845) (778) 599
---------------------------------------------------------------------- --------------- ------------- --------------
Net cash used in operating activities (4,563) (5,966) (8,515)
---------------------------------------------------------------------- --------------- ------------- --------------
Cash flows from investing activities
Purchase of intangible assets 9 (55) (579) (573)
Interest received - - 1
Acquisition of Data2Text (3,125) - -
Purchase of plant and equipment
10 (15) (169) (220)
---------------------------------------------------------------------- --------------- ------------- --------------
Net cash used in investing activities (3,195) (748) (792)
---------------------------------------------------------------------- --------------- ------------- --------------
Cash flows from financing activities
Repayment of loan notes (325) - (14)
Interest paid (1) (9) (17)
Share issue transaction costs - - (820)
Proceeds from issue of ordinary
and preference shares 12 8,416 1,437 5,346
---------------------------------------------------------------------- --------------- ------------- --------------
Net cash from financing activities 8,090 1,428 4,495
---------------------------------------------------------------------- --------------- ------------- --------------
Net increase/(decrease) in cash
and cash equivalents 332 (5,286) (4,812)
Cash and cash equivalents at the
beginning of the period 3,939 8,866 8,866
Exchange gains/(losses) on cash
and cash equivalents (130) 280 (115)
---------------------------------------------------------------------- --------------- ------------- --------------
Cash and cash equivalents at end
of the period 4,141 3,860 3,939
---------------------------------------------------------------------- --------------- ------------- --------------
The above statement should be read in conjunction with the
accompanying notes.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE SIX MONTHS
ENDED 31 MARCH 2014
1. GENERAL INFORMATION
The condensed interim financial statements are for ARRIA NLG plc
(the Company) and its controlled entities (the Group).
The Group develops software that provides Natural Language
Generation ("NLG") services and SaaS (Software as a Service)
services to industry.
The Company is a public limited company domiciled in the United
Kingdom and incorporated under registered number 07812686 in
England and Wales. The Company was incorporated on 17 October 2011.
The Company's registered office is Space One, 1 Beadon Road,
Hammersmith, London W6 0EA, United Kingdom.
These condensed interim financial statements do not comprise
statutory accounts within the meaning of section 434 of the
Companies Act 2006. Statutory accounts for the year ended 30
September 2013 were approved by the directors on 22 January 2014
and delivered to the Registrar of Companies. The report of the
auditors on those accounts was unqualified, did not contain an
emphasis of matter paragraph and did not contain any statement
under section 498 of the Companies Act 2006. These condensed
interim financial statements have not been reviewed or audited.
2. BASIS OF PREPARATION
These condensed interim financial statements for the six months
ended 31 March 2014 have been prepared using recognition and
measurement principles of International Financial Reporting
Standards ("IFRS") as adopted by the European Union and the AIM
rules for Companies. The condensed interim financial statements
should be read in conjunction with the annual financial statements
for the year ended 30 September 2013, which have been prepared in
accordance with IFRSs as adopted by the European Union. As
permitted by AIM rules, the Group has not applied IAS34 'Interim
reporting' in preparing this interim report.
Going Concern
The Directors have prepared a detailed business plan and cash
flow forecast for the period to 30 June 2015. The forecast contains
certain assumptions about the level of future sales and the Group's
operating performance. In considering the ability of the Group to
meet its financial obligations as they fall due, the Board has
considered the expected trading performance of the Group, including
working capital requirements and the level of overheads to be
funded.
The Directors are satisfied based on the supporting business
plan and cash flow, and expectation of further equity fund raising
the Group has adequate resources to continue in operational
existence for the foreseeable future and accordingly, continue to
adopt the going concern basis in preparing the financial
statements.
3. ACCOUNTING POLICIES
The accounting policies adopted are consistent with those of the
previous financial year. None of the new standards which were
applicable for the first time in the period commencing 1 October
2013 have had a material impact on the financial statements. There
are no new standards or interpretations that are not yet effective
that would be expected to have a material impact on the Group.
4. ESTIMATES
In preparing these Condensed interim financial statements, the
significant judgments made by management in applying the Group's
accounting policies and the key sources of estimation uncertainty
were the same as those that applied to the consolidated financial
statements for the year ended 30 September 2013.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS continued
5 OPERATING LOSS
The Group's operating loss has been arrived at after
charging:
Six months ended Six months ended Year ended
31 March 2014 Unaudited 31 March 2013 30 September
(GBP000's) 2013
Unaudited Audited
(GBP000's) (GBP000's)
Employee costs 2,184 2,318 5,031
Operating lease rentals 139 126 260
Depreciation charge 35 31 68
Research and development* 478 - 9
Foreign exchange losses/(gains) 258 (234) 34
Legal and professional
fees 708 2,114 3,024
*Research and development costs contain GBP464,155 of employee
related costs
6. SEGMENT INFORMATION
The Board of Directors is the Group's chief operating
decision-maker. Management has determined the operating segments
based on the information reviewed by the Board of Directors for the
purpose of resource allocation and assessment of performance, and
it is considered that is one operating segment, being the provision
of computer software which is all generated from one geographical
location, being the UK. Corporate costs are head office costs which
cannot be allocated to the segment.
The following is an analysis of revenues and results from
operations and assets by business segment:
Six months ended Six months ended Year ended
31 March 2014 31 March 2013 30 September 2013
Unaudited Unaudited Audited
Revenue (GBP000's) (GBP000's) (GBP000's)
Provision of computer software 330 210 816
Total 330 210 816
Loss before tax Six months ended Six months ended Year ended
31 March 2014 31 March 2013 30 September 2013
Unaudited Unaudited Audited
(GBP000's) (GBP000's) (GBP000's)
Provision of computer software 1,751 1,677 3,138
Corporate costs 3,584 5,619 9,874
Total 5,335 7,296 13,012
Assets As at As at As at
31 March 2014 31 March 2013 30 September 2013
Unaudited Unaudited Audited
(GBP000's) (GBP000's) (GBP000's)
Provision of computer software 28,268 30,734 30,092
Corporate costs 4,054 4,552 4,534
Total 32,322 35,286 34,626
NOTES TO THE CONDENSED FINANCIAL STATEMENTS continued
6. SEGMENT INFORMATION (continued) Entity-wide information
Total revenue from activities by geographical area is detailed
below:
Revenue by geography
Six months ended Six months ended Year ended
31 March 2014 31 March 2013 30 September 2013
Unaudited Unaudited Audited
(GBP000's) (GBP000's) (GBP000's)
Revenue derived from the
United States 301 203 803
Revenue derived from the
UK 29 7 13
---------- ---------- ----------
Total Revenue 330 210 816
---------- ---------- ----------
Revenue of individual customers accounting for greater than 10%
of revenue
Six months ended Six months ended Year ended
31 March 2014 31 March 2013 30 September 2013
Unaudited Unaudited Audited
(GBP000's) (GBP000's) (GBP000's)
Customer A - United States 301 203 803
Customer B - United Kingdom 29 7 13
---------- ---------- ----------
Total Revenue 330 210 816
---------- ---------- ----------
7. INCOME TAX
Income tax credit is recognised based on management's estimate
of the weighted average annual income tax rate expected for the
full financial year. The estimated average annual tax rate used for
the year to 30 September 2014 is 22% (the estimated tax rate for
the six months ended 31 March 2014 was 23%).
8. LOSS PER SHARE
Basic earnings per share for each period is calculated by
dividing the earnings attributable to shareholders by the weighted
average number of ordinary shares in issue during the period based
on the capital structure of ARRIA NLG plc. Details of the earnings
and weighted average number of ordinary shares used in each
calculation are set out below. As the Group is loss-making, share
options in issue are anti-dilutive and therefore diluted loss per
share is equal to the basic loss per share.
Six months ended Six months ended Year
ended
31 March 2014 31 March 2013 30 September
2013
Unaudited Unaudited Audited
(GBP000's) (GBP000's) (GBP000's)
-----------------------------------------------------
Loss attributable to owners
of the parent (5,189) (6,272) (10,748)
---------------- ---------------- -----------------
Weighted average number of Number Number Number
shares
(000's) (000's) (000's)
For basic and diluted loss
per share 99,182 59,231 60,622
---------------- ---------------- -----------------
Basic and diluted loss per
share (0.05)p (0.11)p (0.18)p
---------------- ---------------- -----------------
NOTES TO THE CONDENSED FINANCIAL STATEMENTS continued
9. OTHER INTANGIBLE ASSETS
Cost Intellectual Capitalised Total other
property development intangible
(GBP000's) Costs Assets
(GBP000's) (GBP000's)
At 1 October 2012 (Audited) 19,032 - 19,032
Additions - 579 579
------------ ------------ -----------
At 31 March 2013 (Unaudited) 19,032 579 19,611
------------ ------------ -----------
At 1 April 2013 (Unaudited) 19,032 579 19,611
Additions - (6) (6)
------------ ------------ -----------
At 30 September 2013 (Audited) 19,032 573 19,605
------------ ------------ -----------
At 1 October 2013 (Audited) 19,032 573 19,605
Additions - 55 55
------------ ------------ -----------
At 31 March 2014 (Unaudited) 19,032 628 19,660
------------ ------------ -----------
Accumulated amortisation
At 1 October 2012 (Audited) 2,004 - 2,004
Amortisation 1,707 - 1,707
------------ ------------ -----------
At 31 March 2013 (Unaudited) 3,711 - 3,711
------------ ------------ -----------
At 1 April 2013 (Unaudited) 3,711 - 3,711
Amortisation 1,412 - 1,412
------------ ------------ -----------
At 30 September 2013 (Audited) 5,123 - 5,123
------------ ------------ -----------
At 1 October 2013 (Audited) 5,123 - 5,123
Amortisation 1,412 - 1,412
------------ ------------ -----------
At 31 March 2014 (Unaudited) 6,535 - 6,535
------------ ------------ -----------
Carrying amount
At 1 October 2012 (Audited) 17,028 - 17,028
------------ ------------ -----------
At 31 March 2013 (Unaudited) 15,321 579 15,900
------------ ------------ -----------
At 1 April 2013 (Unaudited) 15,321 579 15,900
------------ ------------ -----------
At 30 September 2013 (Audited) 13,909 573 14,482
------------ ------------ -----------
At 1 October 2013 (Audited) 13,909 573 14,482
------------ ------------ -----------
At 31 March 2014 (Unaudited) 12,497 628 13,125
------------ ------------ -----------
The intangible assets arose on the acquisition of Data2Text
Limited on 1 May 2012, SQi3 Solutions Limited on 28 September 2012
and Global IP Inc., on 29 September 2012.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS continued
10. PROPERTY, PLANT AND EQUIPMENT
Computer Leasehold Office Furniture
Equipment Improvements Equipment & Fittings Total
(GBP000's) (GBP000's) (GBP000's) (GBP000's) (GBP000's)
Cost
At 1 October 2012
(Audited) 67 25 - 13 105
Additions 21 78 9 61 169
---------- ---------- ---------- ----------- ----------
At 31 March 2013
(Unaudited) 88 103 9 74 274
---------- ---------- ---------- ----------- ----------
At 1 April 2013 (Unaudited) 88 103 9 74 274
Additions 47 1 1 2 51
---------- ---------- ---------- ----------- ----------
At 30 September 2013
(Audited) 135 104 10 76 325
---------- ---------- ---------- ----------- ----------
At 1 October 2013
(Audited) 135 104 10 76 325
Additions 9 - - 6 15
---------- ---------- ---------- ----------- ----------
At 31 March 2014
(Unaudited) 144 104 10 82 340
---------- ---------- ---------- ----------- ----------
Accumulated depreciation
At 1 October 2012
(Audited) 8 - - - 8
Depreciation expense 14 10 1 7 32
---------- ---------- ---------- ----------- ----------
At 31 March 2013
(Unaudited) 22 10 1 7 40
---------- ---------- ---------- ----------- ----------
At 1 April 2013
(Unaudited) 22 10 1 7 40
Depreciation expense 17 11 1 7 36
---------- ---------- ---------- ----------- ----------
At 30 September 2013
(Audited) 39 21 2 14 76
---------- ---------- ---------- ----------- ----------
At 1 October 2013
(Audited) 39 21 2 14 76
Depreciation expense 18 8 1 7 34
---------- ---------- ---------- ----------- ----------
At 31 March 2014
(Unaudited) 57 29 3 21 110
---------- ---------- ---------- ----------- ----------
Carrying amount
At 1 October 2012
(Audited) 59 25 - 13 97
---------- ---------- ---------- ----------- ----------
At 31 March 2013
(Unaudited) 66 93 8 67 234
---------- ---------- ---------- ----------- ----------
At 1 April 2013 (Unaudited) 66 93 8 67 234
---------- ---------- ---------- ----------- ----------
At 30 September 2013
(Audited) 96 83 8 62 249
---------- ---------- ---------- ----------- ----------
At 1 October 2013
(Audited) 96 83 8 62 249
---------- ---------- ---------- ----------- ----------
At 31 March 2014
(Unaudited) 87 75 7 61 230
---------- ---------- ---------- ----------- ----------
NOTES TO THE CONDENSED FINANCIAL STATEMENTS continued
11. BORROWINGS
As at As at As at
31 March 2014 31 March 2013 30 September 2013
Unaudited Unaudited Audited
(GBP000's) (GBP000's) (GBP000's)
Loan notes - 339 346
Total - 339 346
Movements in borrowings are analysed as follows:
(GBP000's)
At 1 October 2012 (Audited) 330
Interest charged 9
At 31 March 2013 (Unaudited) 339
At 1 April 2013 (Unaudited) 339
Interest charged 7
At 30 September 2013 (Audited) 346
At 1 October 2013 (Audited) 346
Converted to ordinary shares (275)
Interest forgiven (24)
Repaid (50)
Interest charged 3
At 31 March 2014 (Unaudited) -
12 SHARE CAPITAL AND PREMIUM
The issued share capital in the period was as follows:
Class A Class B
Ordinary Ordinary B Preference Preference
shares shares shares shares
Number Number Number Number
At 1 October 2012 (Audited) 33,284,852 - 17,701,734 5,077,573
Issue of capital 1,500,000 - 2,298,266 -
----------- ------------ ------------ ------------
At 31 March 2013 (Unaudited) 34,784,852 - 20,000,000 5,077,573
----------- ------------ ------------ ------------
At 1 April 2013 (Unaudited) 34,784,852 - 20,000,000 5,077,573
Issue of share capital 1,000,000 - 4,550,630 -
----------- ------------ ------------ ------------
At 30 September 2013 (Audited) 35,784,852 - 24,550,630 5,077,573
----------- ------------ ------------ ------------
At 1 October 2013 (Audited) 35,784,852 - 24,550,630 5,077,573
----------- ------------ ------------ ------------
Issue of share capital - 45,000,000 8,906,607 5,077,574
Conversion to ordinary shares
on listing 66,777,872 (23,165,488) (33,457,237) (10,155,147)
Re-purchased and cancel on
listing - (21,834,512) - -
----------- ------------ ------------ ------------
At 31 March 2014 (Unaudited) 102,562,724 - - -
----------- ------------ ------------ ------------
NOTES TO THE CONDENSED FINANCIAL STATEMENTS continued
12. SHARE CAPITAL AND PREMIUM (continued) Share Capital Share Premium Total
(GBP000's) (GBP000's) (GBP000's)
At 1 October 2012 (Audited) 56 11,130 11,186
Issue of ordinary share capital 2 - 2
Issue of Class A preference share
capital 2 1,434 1,436
Capital Reduction - (12,073) (12,073)
------------- ------------- ----------
At 31 March 2013 (Unaudited) 60 491 551
------------- ------------- ----------
At 1 April 2013 (Unaudited) 60 491 551
Issue of ordinary share capital 1 - 1
Issue of Class A preference share
capital 5 3,903 3,908
Share issue transaction costs - (172) (172)
------------- ------------- ----------
At 30 September 2013 (Audited) 66 4,222 4,288
------------- ------------- ----------
At 1 October 2013 (Audited) 66 4,222 4,288
Issue of ordinary share capital 45 8,880 8,925
Issue of class A preference share
capital 9 - 9
Issue of Class B preference share
capital 5 - 5
Repurchase of ordinary share capital
on listing (22) - (22)
Capital reduction - (5,609) (5,609)
Share issue transaction costs - (1,064) (1,064)
------------- ------------- ----------
At 31 March 2014 (Unaudited) 103 6,429 6,532
------------- ------------- ----------
13 MERGER RESERVE
(GBP000's)
At 1 October 2012 (Audited) 3,131
----------
At 31 March 2013 (Unaudited) 3,131
----------
At 1 April 2013 (Unaudited) 3,131
----------
At 30 September 2013 (Audited) 3,131
----------
At 1 October 2013 (Audited) 3,131
Acquisition of non-controlling
interest in Data2Text 21,830
Acquisition of Global IP 3,131
----------
At 31 March 2014 (Unaudited) 28,092
----------
The merger reserve arose on the acquisition of SQi3 Solutions
Limited, Data2Text Limited and Global IP Inc., reflecting the
consideration paid in shares. The Company has taken advantage of
merger relief under the Companies Act 2006 and not recorded a
premium on these shares. The premium has been credited to the
merger reserve.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS continued
14 NON-CONTROLLING INTEREST
The non-controlling interest arose on the acquisition of
Data2Text Limited on 1 May 2012 and on the acquisition of Global IP
Inc., on 29 September 2012. The Group originally owned 20% of the
issued share capital of Data2Text Limited and recognised a
non-controlling interest in respect of the remaining 80% from 1 May
2012.
On 25 October 2013, the Company concluded the acquisition of the
remaining 80% of the share capital of Data2Text Limited over which
it had an option. Consideration was satisfied by GBP3,125,000 in
cash and the issue of 45,000,000 B ordinary shares with a total
value of GBP21,875,000. The B ordinary shares were converted into
23,165,488 ordinary shares (approximately 22.59% of the share
capital of the Company) when the Company's shares were admitted to
trading on the Alternative Investment Market of the London Stock
Exchange on 5 December 2013. The remaining 21,834,512 B ordinary
shares were repurchased by the Company on listing.
Following the acquisition of Data2Text Limited, the Company
concluded the acquisition of the share capital of Global IP Inc.
over which it had already had control at the balance date.
Consideration for Global IP Inc. was in the form of 5,077,574 B
preference shares with a value of GBP3,135,910.
Non-Controlling
Interest
(GBP000's)
At 1 October 2012 (Audited) 26,081
Share of loss of Data2Text Limited (367)
Share of loss of Global IP Inc. (511)
At 31 March 2013 (Unaudited) 25,203
At 1 April 2013 (Unaudited) 25,203
Share of loss of Data2Text Limited (429)
Share of loss of Global IP Inc. (370)
At 30 September 2013 (Audited) 24,404
At 1 October 2013 (Audited) 24,404
Acquisition of non-controlling interest in Data2Text
(22,926)
Acquisition of non-controlling interest in Global IP (1,478)
At 31 March 2014 (Unaudited) -
15 RELATED PARTY TRANSACTIONS
Transactions with other related parties during the period are
detailed below:
(a) Purchases of goods and services
Six months ended Six months ended Year ended
31 March 2014 31 March 2013 30 September 2013
Unaudited Unaudited Audited
(GBP000's) (GBP000's) (GBP000's)
Purchases of services:
Key management personnel - - -
Close family members of key management
personnel - 118 247
Total - 118 247
---------- ---------- ----------
NOTES TO THE CONDENSED FINANCIAL STATEMENTS continued
15 RELATED PARTY TRANSACTIONS (continued)
(b) Period-end balances arising from purchases of services
As at As at As at
31 March 2014 31 March 2013 30 September 2013
Unaudited Unaudited Audited
(GBP000's) (GBP000's) (GBP000's)
Payables:
Close family members of key management personnel - 35 108
Total - 35 108
(c) Loans from related parties
Six months ended Six months ended Year ended
31 March 2014 31 March 2013 30 September 2013
Unaudited Unaudited Audited
(GBP000's) (GBP000's) (GBP000's)
Loans from key management personnel:
Opening balance 346 330 330
Converted to ordinary shares (275) - -
Accrued interest forgiven (24) - -
Repaid during the period (50) - -
Interest charged during the period 3 9 16
----------------------------------------- ---------- ---------- ----------
At end of period - 339 346
----------------------------------------- ---------- ---------- ----------
Loans from close family members
of key management personnel:
Opening balance - 16 16
Repaid during the period - (17) (17)
Interest charged during the period - 1 1
----------------------------------------- ---------- ---------- ----------
At end of period - - -
----------------------------------------- ---------- ---------- ----------
The loan from key management personnel at the beginning of the
period related to outstanding loans to the Company by Michael
Mayell (former director) of GBP208,000 and Brian Henry (former
director) of GBP117,000. The combined opening balance of GBP346,062
included accrued interest of GBP21,062. The loan notes were
assigned to Gerald Henry and all interest accrued at the time of
assignment was forgiven.
On 23 December 2013, the Company issued 281,250 ordinary shares
to Gerald Henry with a nominal value of GBP0.001 each for cash
consideration of US$450,000, along with 281,250 warrants for
ordinary shares with an exercise price of GBP1.33 each.
Consideration for the subscription was satisfied by the conversion
of US$450,000 of existing Arria loan notes. The remaining loan note
and accrued interest was fully re-paid on 25 March 2014, following
the conclusion of Gerald Henry's consultancy agreement with the
Company.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS continued
15 RELATED PARTY TRANSACTIONS (continued)
(d) Share transactions with related parties
The following shares were acquired by related parties during the
period:
Six months Six months Six months Six months Year Year
ended ended ended ended ended ended
31 March 31 March 31 March 31 March 30 September 30
September
2014 2014 2013 2013 2013 2013
Unaudited Unaudited Unaudited Unaudited Audited Audited
Number Amount Number Amount Number Amount
(000's) (GBP000's) (000's) (GBP000's) (000's) (GBP000's)
Purchases by key
management personnel:
Ordinary shares - - 500 1 2,300 2
Ordinary B shares 15,984 15 - - - -
Class A preference
shares 109 109 - - - -
Class B preference
shares 2,539 3 - - - -
--------------------------- ---------- ------------- ------------ ---------- ------- ----------
Total 18,632 127 500 1 2,300 2
--------------------------- ---------- ------------- ------------ ---------- ------- ----------
Purchases by close
family members of
key management personnel:
Class A preference
shares - - - - 40 32
--------------------------- ---------- ------------- ------------ ---------- ------- ----------
Total - - - - 40 32
--------------------------- ---------- ------------- ------------ ---------- ------- ----------
Purchases of shares by key management personnel and their close
family members were made at prices consistent with other
investors.
16 SUBSEQUENT EVENTS
In May 2014, the Company's wholly owned subsidiary Arria
Data2Text Limited concluded the renegotiation of its existing
principle commercial relationship with its oil and gas super major
client, Shell Exploration and Production Company ("Shell"), a US
subsidiary of Royal Dutch Shell plc. This agreement provides Arria
with annual fees for non-exclusive use of the Arria NLG Engine to
expand NLG decision support technologies to Shell's offshore
platforms across parts of the Americas, plus the adoption of
Arria's NLG services expanding from existing Facilities NLG
narratives to further service categories in upstream operations
across parts of the Americas. Upon full performance of the
agreement, which is effective from 1 June 2014, Shell undertakes to
pay Arria US$5-10 million over three years. A large proportion of
these fees are annual and on-going base licence and
use-per-platform fees for Facilities NLG narratives to offshore
platforms in parts of the Americas. One-time configuration and
deployment fees payable upon agreed milestones are also included in
the agreement, and the fee structure makes provision for deployment
and usage beyond the Americas.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR GGUAGQUPCPWG
Arria Nlg Ords (LSE:NLG)
Historical Stock Chart
From May 2024 to Jun 2024
Arria Nlg Ords (LSE:NLG)
Historical Stock Chart
From Jun 2023 to Jun 2024
