TIDMNLG
RNS Number : 5778Z
Arria NLG PLC
12 December 2014
12 December 2014
Arria NLG plc
("Arria", the "Company" or the "Group")
Final Results for the year ended 30 September 2014
Arria NLG plc (AIM: NLG), a leader in the development and
deployment of natural language generation ("NLG") technologies,
announces its final results for the year ended 30 September
2014.
Financial Highlights:
-- Revenue GBP0.787million (2013: GBP0.816million)
-- EBITDA loss of GBP6.45million (2013: loss of GBP9.81million)
-- Loss before tax of GBP10.9million (2013: loss of GBP13.01million)
-- Cash at 30 September 2014 GBP1.7million (as at 30 September 2013: GBP3.9million)
-- Secured agreement on 30 September 2014 for GBP3.08million
(US$5million) of future funding by way of convertible debt
Operational Highlights:
-- Concluded the acquisition of the remaining 80% of Arria
Data2Text Limited (formerly Data2Text Limited) not already owned on
25 October 2013
-- Successfully completed admission to trading on AIM, a market
of the London Stock Exchange on 5 December 2013
-- Significantly extended and expanded contracts with oil and gas client
-- Strengthened the Board and the sales team
-- Signed preliminary collaboration project agreement with a
global banking and financial services client
-- Awarded two foundational US patents
-- UK Met Office adding NLG authorised narratives to its 5 day
forecast on its Met Invent website
-- Subsequent to year end signed proof of concept agreement with
a leading control systems provider to the aviation industry
Stuart Rogers, Chairman and Chief Executive of Arria NLG plc,
commented: "It has been a satisfying year with significant progress
in most areas of performance for Arria NLG, and we are pleased with
these results. With our focus on information delivery, we have
worked tirelessly throughout the year to extend our reach into a
focused set of global industries, specifically Oil & Gas,
Financial services, Aviation and Meteorology. Our software allows
our clients to take time, cost and effort out of their mission
critical business processes, and capture, retain and leverage
critical internal knowledge and expertise. We continue to invest in
the science of NLG through R&D, patenting and enhancing the
functionality of our core NLG Engine. We have built a great team of
scientists, developers and sales people, and we are on track to
support future growth in all aspects of our business."
The Arria NLG Engine:
The Arria NLG Engine is the software at the frontier of
Artificial Intelligence, Data Analytics and Computational
Linguistics. Key features of the Arria NLG Engine include:
-- allowing Arria clients to capture, in software, the human
expertise used in both analysing data and in communicating the
information that data contains;
-- making it possible to automatically write reports that are
virtually indistinguishable from those that a human expert would
write to convey actionable conclusions; and
-- because the knowledge is embodied in software, the Arria NLG
Engine produces results in seconds rather than hours and can be
replicated, scaled up, and made available globally, 24 hours a day,
7 days a week and 365 days a year.
For further information, please visit www.arria.com or
contact:
Arria NLG plc Tel: +44 (0)
Stuart Rogers, Chairman and Chief Executive 20 7100 4540
---------------------------------------------- ------------------------------------ -------- --------
Allenby Capital, Nominated Adviser
and Joint Broker
Nick Naylor
Jeremy Porter
James Reeve Tel: +44 (0)20 3328 5656
---------------------------------------------- ------------------------------------ -------- --------
Westhouse Securities, Joint Broker
Antonio Bossi Tel: +44 (0)
Robert Finlay 20 7601 6100
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Walbrook, Financial PR and PR Tel: 44 (0)20 7933 8792 arria@walbrookpr.com
Bob Huxford
Guy McDougall
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CHAIRMAN'S STATEMENT
Arria has been a public company for just over one year, and I
would like to begin by thanking the many people who contributed to
making this last year such a period of great commercial progress. I
would like to thank our shareholders, all of our staff that make up
our incredibly talented Arria team, our clients whom we serve, the
partners who add so much strength to our efforts, and our Board.
Arria has made excellent progress as a business this past year: we
have strengthened our relationships with existing clients, gained
new clients and strengthened both the Arria team and our highly
supportive Board. We have made significant investments in
developing the Science of Natural Language Generation ("NLG"),
delivering on NLG's significant potential in a commercial setting,
and in the protection of our core Intellectual Property.
Natural Language Generation is all about taking data and turning
it into written or spoken language. We believe that this is
indisputably the best way to provide actionable analytics. It's how
we as a species have communicated information and calls-to-action
for tens of thousands of years. It's a finely honed device that
evolves as we evolve, and it marks us out from other species. It's
the best means by which we answer the requests 'Tell me what I need
to know' and 'Tell me what I should do'. Bringing this valuable and
innovative capability to other businesses is at the heart of
Arria's primary mission to become the global leader in the
development and deployment of mission critical, core industrial,
enterprise level natural language generation software
technologies.
The essence of this unique capability has now been distilled
down into our software. Based on decades of research into language
and linguistics, Arria's NLG Engine is able to take data, analyse
it for the insights it contains, and present those insights in
language that you would believe had been written by a human expert
in their field.
Arria's NLG technology is valuable to businesses and to our
clients because it allows them to take valuable time and costs out
of their processes and operations, to capture and more effectively
utilize their scarce internal expert knowledge, and to communicate
actionable insights throughout the firm and around the globe via
language rather than through charts and graphs that require further
interpretation.
Business Model
Arria is focused on a select number of core industry verticals,
including oil and gas and financial services. Arria's clients pay
to develop its technology through industry-specific commercial
applications, to license its NLG Engine, and to license the
specific applications on an annual on-going basis.
Over the course of the past year, our primary commercial
relationship in oil and gas was expanded in scope, duration and
financial value, and our commercial success now expands beyond oil
and gas to encompass financial services, agriculture and aviation.
Albeit from a low base, our client roster has more than doubled in
the last 12 months and we expect this rate of progress to increase
further in the coming year. Accelerating commercial progress, a
more diverse client base; it all adds up to a growing success.
The Wider Opportunity for NLG
NLG is a powerful analytical communication tool which is
applicable to a vast number and variety of commercial, industrial
and consumer applications. With the growth of Big Data and the
increasing lack of human resources to make sense of data in a
timely fashion, our vision is that Arria's NLG software becomes a
ubiquitous part of the overall fabric of technology and of the
internet of things. In order to achieve this vision and become
ubiquitous, Arria's software needs to be embedded in the systems
that control and report on the operation of our technology, it
would ship with other packaged software to enrich their
communication facilities, and it would ship with industrial
hardware. Arria's NLG software would be pre-installed as a
narrative layer in personal, household and industrial devices
(Smartphones, televisions, Smart-meters). And packaged Arria NLG
software appliances would be developed that perform specific
narrative tasks in industrial and commercial settings. These would
be written by Arria or by other software firms having licensed our
development toolkit.
Commercial Progress Oil & Gas
Late in 2013 Arria announced that it had agreed with Shell
Exploration and Production Company ("Shell") to extend its current
one year agreement on a month by month basis until a new,
longer-term, more expansive agreement was put in place.
A new, three year agreement was signed with Shell in May 2014.
This 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 our services expanding from existing Facilities NLG
narratives to further service categories in upstream operations
across parts of the Americas. A large proportion of these fees are
annual and ongoing base license 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 was an important milestone for the Company because it
provided a clear validation of the software's viability and ability
to operate in a highly complex, mission critical operating
environment in a large global corporation.
As the new Shell agreement was being put in place, Arria was
invited to present at the Saudi Arabia section of the Society of
Petroleum Engineers ("SPE") reception in Al Khobar, Saudi Arabia on
25 March 2014. Arria was the sole presenter at SPE's special event
entitled "Making Machines Articulate", revealing more about Natural
Language Generation technologies to a Middle East audience. Arria's
Chief Strategy Scientist and Chief Technology Officer, Dr. Robert
Dale explained how engineers can use Arria's NLG Engine to enhance
decision support in operational environments.
At the SPE conference in Utrecht, Professor Ehud Reiter, Arria's
Chief Scientist, gave a very well received presentation in a panel
session called "Learning From Others: Are We Unique?". He and Arria
Executive Director Simon Small participated along with senior
representatives from IBM, Accenture, Chevron and Total.
The platform afforded to Arria at these conferences has
accelerated our business development opportunities significantly
for both Natural Language Generation as a concept and Arria NLG as
a leader in this field.
To further strengthen our sales reach in the oil and gas
industry, we hired John Bell as Senior Vice President - Business
Development, based in Arria's London Office. His primary focus is
growing sales of Arria's NLG software solutions in the oil and gas
industry. John has more than 15 years' experience working in
selling oil and gas infrastructure software solutions, and with
Oracle, he spent five years in Dubai as Middle East Regional
Director.
Financial Services
In February, Arria strengthened its sales team in the financial
services sector with the appointment of Christopher Messina as
Senior Vice President, Business Development. Mr. Messina has
strong, international experience in capital markets, private equity
and financial technology. He comes to Arria after being CEO and
Co-Founder of RPA Capital, LLC, a New York and Bermuda-based
alternative asset management firm focused on private credit and
physical commodity trading. He has worked in the USA, Africa,
Europe, Australia, and the Middle East. Arria's first global
contract in the financial services industry was signed in August
2014, a preliminary collaboration project agreement with a major
global banking and financial services company. Successful
completion and acceptance of the pilot NLG application could lead
to further development, deployment and licensing agreements and new
revenue streams for Arria.
Meteorology
During 2014 we further expanded our relationship with the UK Met
Office which is now offering Arria's NLG--generated weather
forecast narratives on its Met Invent website. The forecasts,
currently available for any of 5,000 geographic points in the
United Kingdom, can be viewed at:
http://www.metoffice.gov.uk/public/weather/forecast-data2text
Arria has been working closely with the Met Office since 2009 to
utilize the power of Arria's NLG technologies to write on-demand,
site-specific weather forecasts for use by the public. In a recent
release on its Met Invent website, the Met Office added
NLG-authored narratives to its 5-day forecasts, combining them with
the familiar graphic presentation of weather data with NLG-authored
narratives for the first time. Further expansion to provide
NLG-authored forecasts for thousands or millions more specific
sites in the UK and worldwide is possible. This greatly increased
level of text forecasting granularity would be virtually impossible
using human-authored forecasts. The Arria and Met Office science
teams continue to collaborate on the automation of weather
reporting.
Sales Success
Post the period end, we have announced two further contracts,
one in aviation and the other in US agriculture.
The first contract was a new collaborative proof of concept
agreement with a leading provider of power systems controls
intelligence to the aviation industry. The agreement provides for a
pilot application to use Arria's NLG technology for narrative
summaries on the data generated by on-wing turbine engines. These
data driven summaries will enable airline operations teams to
further optimise their maintenance or refurbishment of jet engines.
The project should result in the more efficient handling of the
vast amounts of inflight engine performance data, enabling the
maintenance programs to be conducted with greater efficiency and at
a lower cost for both the service provider and the airline
operators. Successful completion and acceptance of the pilot NLG
application could lead to further development, deployment and
licensing agreements and new revenue streams for Arria.
The second contract was a new framework development agreement
with FarmLink, LLC. This provides for a new application to use NLG
technology for narrative summaries on FarmLink's TrueHarvest data.
These narrative reports will help FarmLink's farmer clients and
their agronomic advisors identify, analyse and optimise field
potential. FarmLink data scientists use more than 800 million
micro-fields, or 150-square-foot areas, made up of many variables
across weather, soil, topography and more. This establishes a data
set of more than 600 billion data elements from millions of acres,
which is used to benchmark the performance range for every corn,
soybean and wheat field in the United States. Arria's reporting
application will take this information and deliver agronomic
insights in natural language reporting. FarmLink will pay Arria for
application scoping, implementation and deployment. Fees for annual
licensing and other business terms have yet to be finalised.
Technology
Arria NLG Engine
The Arria NLG Engine provides a powerful and flexible software
architecture, one that has been refined through the many decades of
collective experience that our scientists and engineers have
acquired in building rich NLG applications in a variety of domains.
Today, data is everywhere. Every computer system and every piece of
technology is capable of producing vast amounts of data, from the
humblest personal fitness device that counts your steps to the
massive engines on modern passenger airliners that send constant
streams of performance data from multiple sensors back to base for
real time monitoring. Major corporations in every information-based
industry, from finance through telecom providers to search engine
giants, rely on endless streams of transactional data to serve as
their lifeblood.
This ever growing avalanche of data is a good thing for Arria.
It opens up massive potential for diagnosis, performance
improvement, or any of a wide range of other purposes that have a
direct impact on the bottom line. The data can help us solve
problems. But here's the paradox: the data itself has become a
problem because there is so much of it. As is now so often
acknowledged in the technical press, we are drowning in data,
buried so deep that we can't make sense of the data that is being
fed to us.
In fact, the problem is not really the data itself. The real
problem is a shortage of the expertise required to make sense of
the data and to communicate the meaning of that data to those who
need to act.
This problem is widespread: numerous studies across a variety of
industries have bemoaned the acute shortfall in human resources
with the relevant expertise that prevents us carrying out analysis
of data and delivering the actionable intelligence that it
contains.
To make use of the raw data being provided to us by these myriad
sources, there are two things we have to do. First, we have to
analyse the data to extract useful information and insights from
it. Second, we have to communicate that information and insights to
those who need to act upon it, in terms that they can understand.
Put simply, we have to tell the data's story.
This is what a human analyst does, and - up until now - it has
only been human analysts who have been able to do this. But now the
same skills can be embodied in software. This is what the Arria NLG
Engine does. It is extraordinarily well suited to extracting value
from Big Data and to reducing time and cost from business
processes.
In January 2014 we successfully deployed version 3.0 of the
Arria NLG Engine. This latest version includes annotated graphs
which have the ability to integrate graphical information derived
from big data sources with the existing NLG reporting capabilities
to provide even more effective decision-support. Annotated graphs
provide NLG narrative text boxes that open up at
critical/interesting points on a graph to offer deeper insights,
via language, to the graph's interpretation and meaning.
NLG Studio
The first stage completion of the NLG Studio after two years
work represents another 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 or two. The potential in terms
of billing cycles and sales pipeline management is 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.
In addition to the positive impact potential on our production
cycles in the short term, there is also a recognised potential for
revenue from licensing use of the NLG Studio in the longer
term.
Intellectual Property
Arria is, in part, an IP-driven business, where shareholder
value is created by patenting and protecting our unique IP and
future value may be realized through the management of our growing
IP portfolio.
As we work to extend Arria's installed base of solutions for the
management of large data sets, we continue to build the Group's
patent portfolio through prosecution of existing patent
applications and the filing of new ones covering a range of
innovations in Big Data management through Natural Language
Generation. We received two patents with the issuance on 24 June
2014 of: Method And Apparatus For Alert Validation (US Patent No.
8,762,133) and Method And Apparatus For Situational Analysis Text
Generation (US Patent No. 8,762,134). These patents extend Arria's
intellectual property portfolio to cover recent work of Arria Chief
Scientist Ehud Reiter and his colleagues at Arria Data2Text
Limited, Arria's wholly owned subsidiary.
Corporate Governance 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 5 December 2013, Arria's Ordinary shares and Warrants began
to trade on the London Stock Exchange AIM market under the symbol
NLG.
Commercial Outlook
The NLG Engine has a very wide set of potential use cases, and
we continue to maintain a tight focus on our market potential. As a
team, we have refined and tested the definitions of our market
potential, and determined where we are most likely to best generate
revenues for the lowest cost.
There are a number of critical characteristics that we use to
determine where, in the short term, to allocate resources in
pursuit of revenue for our product:
1. We seek industries that have an acknowledged Big Data
problem. We surveyed a variety of industry sources, including
contemporary reports by such institutions as Gartner, Forrester and
McKinsey, to rank which industries generate the most data and hold
the most potential in the idle structured datasets that result.
2. We seek industries that have the potential to pay for
developmental work. Our NLG product has a wide range of uses,
without yet being a plug-and-play device. As with many early-stage
technologies, we seek to incubate our development within large,
well-funded project streams who can invest beyond
'off-the-shelf'.
3. We seek industries that have, at their core, a demand for
return on technology investment. If an industry already relies on
the application of new technology to improve its returns to
shareholders, they will have systems to evaluate and then engage
with new technologies such as ours.
Our qualification work has led us to assign resource to
developing the following verticals: oil and gas - with an extension
into mining and extraction; and financial services - with a focus
on institutions such as global banks, clearing houses and
exchanges. This does not mean that we will not be offering
solutions in other areas, but that our most immediate focus is on
these in particular.
As the year progressed and looking forward into the coming year
we started meeting with prospects in the following verticals:
information technology and telecommunications (IT&T); power
generation; and mineral extraction.
Expanding the Product and Our Offering
Over the coming years, we will be responding to our clients'
needs in these sectors with ever improving products. Given the
power of the Company's NLG Studio toolset to rapidly develop
applications, we are exploring the development of specific packaged
stand-alone solutions to address specific industry needs. Such
packaged solutions would require minimal configuration, and would
plug into widely used third party database, data analytics and
operational software platforms. Indeed, the prospect of working
with and distributing NLG solutions through large third party
software and business process vendors is a highly promising
addition to Arria's sales strategy.
Information Delivery
Our technology helps people and enterprises understand data. The
Directors believe there is currently no market category that
corresponds directly to this function. Business intelligence comes
close, but our potential impact is broader; so we have an
opportunity to define a new market category, which we will call
'information delivery', although other names are possible.
If the amount of data being produced is constantly increasing,
it seems unlikely that the demand for tools that help explain that
data will diminish.
We believe that there are few industry verticals that will not
be impacted in one way or another by the internet of things and the
consequent availability of large quantities of data that need
explanation.
Taken as a whole, these factors are highly favorable and
supportive of Arria's continued progress. These factors support our
revenue growth, by expanding within current key industry verticals,
expanding beyond these verticals, through partnerships with other
third-party solutions providers, and via packaged solutions that
expand Arria's reach to a broader spectrum of clients.
Core Values
To ensure long-term success and to create a sustainable
business, Arria continues to operate under a set of core principles
that have been established over the course of the last few
years:
-- we will serve the needs of our clients by developing and
deploying software solutions based on listening to their ideas,
needs and aspirations;
-- we will attract and retain the best possible team of staff over time;
-- we will invest in our science and in the best practices of
developing and testing innovative software solutions;
-- we will treat people ethically and with respect;
-- we will establish NLG as a mainstream solution in our core
industries and strive to establish its ubiquity.
In a recent McKinsey report, "Game Changers: Five Opportunities
for US Growth and Renewal" (July 2013), McKinsey puts forth five
areas that represent significant growth potential in the US:
Energy, Trade, Big Data, Infrastructure and Talent. It is
significant that Arria has substantial potential to grow by
applying our technology, not just in the realm of Big Data, but in
all five of these key industry segments around the globe.
Financials
Turnover for the year was GBP787,000 (year ended 30 September
2013: GBP816,000). This was predominantly attributable to the
Company's contract with its oil and gas client. During the current
year the Group completed a successful private placement fund raise
of US$15.8 million (c. GBP9.85 million) through the issue of
Ordinary shares. These funds have been used to fund the acquisition
of Arria Data2Text Limited (formerly Data2Text Limited), the
development of the Arria NLG Engine, costs of securing a public
listing of the Company's shares, marketing of the Group's services
to potential new clients and expanding the Group's portfolio of
patent applications. As a result of these heavy investments in the
development of the Group's business, The Company reported a loss
before tax of GBP10.9 million (2013: loss before tax - GBP13.0
million), which reflects the continued heavy development in the
Group's business plan. On 30 September 2014 the Company concluded a
convertible loan with an existing shareholder, Ikonic Fund, for
GBPGBP3.08 million. As we continue to invest in our technology and
commercial relationships, we will seek to raise additional capital
in 2015 as appropriate opportunities arise.
Summary
As we look back over the accomplishments of the past year, we
recognize how far we have progressed, and how well the Company is
positioned for accelerated growth. The convergence of Big Data,
scarce analytical resources, and the inability for many industries
to continue their growth trajectories on the back of human capital
alone, represents the predominant opportunity, and the core focus
where Arria is building its business and extending its technology
today and into the future. The vast challenges of all of the data
created and captured by significant industries will continue to
drive company agendas and budgets, and Arria is there to help turn
those challenges into articulate analytical solutions.
Stuart Rogers
Chairman and CEO
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR
ENDED 30 SEPTEMBER 2014
Year ended Year ended
30 September 30 September
Note 2014 (GBP000's) 2013 (GBP000's)
Revenue 3 787 816
-------------------- -----------------
Cost of sales (655) (139)
-------------------- -----------------
Gross profit 132 677
Administrative expenses
- Share-based payments (47) (1,113)
- Amortisation of intangibles (2,762) (3,119)
- Impairment of intangibles (1,653) -
- Other administrative costs 4 (6,607) (9,441)
-------------------- -----------------
Total administrative expenses (11,069) (13,673)
-------------------- -----------------
Operating loss 4 (10,937) (12,996)
-------------------- -----------------
Finance income 24 1
Finance expense (2) (17)
-------------------- -----------------
Loss before tax (10,915) (13,012)
-------------------- -----------------
Taxation credit 305 587
-------------------- -----------------
Loss for the year (10,610) (12,425)
-------------------- -----------------
Other comprehensive income - -
-------------------- -----------------
Total comprehensive loss for the
year (10,610) (12,425)
-------------------- -----------------
Attributable to:
- owners of the parent (10,610) (10,748)
- non-controlling interests - (1,677)
-------------------- -----------------
Total comprehensive loss for the
year (10,610) (12,425)
-------------------- -----------------
Loss per share
Basic and diluted loss per share 5 (0.11)p (0.18)p
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 SEPTEMBER
2014
Note 2014 (GBP000's) 2013 (GBP000's)
ASSETS
Non-current assets
Goodwill 14,353 14,353
Other intangible assets 10,148 14,482
Property, plant and equipment 202 249
Trade and other receivables 174 168
---------------------------- ----------------------------
24,877 29,252
---------------------------- ----------------------------
Current assets
Trade and other receivables 724 1,435
Cash and cash equivalents 1,743 3,939
---------------------------- ----------------------------
2,467 5,374
---------------------------- ----------------------------
TOTAL ASSETS 27,344 34,626
---------------------------- ----------------------------
EQUITY AND LIABILITIES
Equity attributable to owners of
the parent
Share capital 103 36
Class A Preference share capital - 25
Class B Preference share capital - 5
Share premium 6,429 4,222
Merger reserve 6 28,092 3,131
Other Reserves 6 34 -
Accumulated losses 6 (11,184) (2,498)
---------------------------- ----------------------------
23,474 4,921
Non-controlling interest 6 - 24,404
---------------------------- ----------------------------
TOTAL EQUITY 23,474 29,325
---------------------------- ----------------------------
Non-current liabilities
Deferred tax 1,933 2,212
---------------------------- ----------------------------
Current liabilities
Trade and other payables 1,937 2,743
Borrowings - 346
---------------------------- ----------------------------
1,937 3,089
TOTAL LIABILITIES 3,870 5,301
---------------------------- ----------------------------
TOTAL EQUITY AND LIABILITIES 27,344 34,626
---------------------------- ----------------------------
COMPANY STATEMENT OF FINANCIAL POSITION AS AT 30 SEPTEMBER
2014
Note 2014 (GBP000's) 2013 (GBP000's)
ASSETS
Non-current assets
Investment in subsidiaries 25,325 3,477
Other intangible assets 133 471
Property, plant and equipment 157 201
Trade and other receivables 174 168
------------------------- -----------------------------
25,789 4,317
------------------------- -----------------------------
Current assets
Trade and other receivables 4,562 2,247
Cash and cash equivalents 1,151 3,391
------------------------- -----------------------------
5,713 5,638
------------------------- -----------------------------
TOTAL ASSETS 31,502 9,955
------------------------- -----------------------------
EQUITY AND LIABILITIES
Equity attributable to owners of
the parent
Share capital 103 36
Class A Preference share capital - 25
Class B Preference share capital - 5
Share premium 6,429 4,222
Merger reserve 6 28,092 3,131
Other reserves 6 22 -
Accumulated losses 6 (4,937) (208)
------------------------- -----------------------------
TOTAL EQUITY 29,709 7,211
------------------------- -----------------------------
Current liabilities
Trade and other payables 1,793 2,398
Borrowings - 346
------------------------- -----------------------------
TOTAL LIABILITIES 1,793 2,744
------------------------- -----------------------------
TOTAL EQUITY AND LIABILITIES 31,502 9,955
------------------------- -----------------------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED
30 SEPTEMBER 2014
Non-
Share Share Merger Other Accumulated controlling
Capital Premium Reserve Reserves Losses Total interest Total Equity
Note (&000's) (&000's) (&000's) (&000's) (&000's) (&000's) (&000's) (&000's)
As at
1 October 2012 56 11,130 3,131 - (4,831) 9,486 26,081 35,567
Issue of shares 10 5,337 - - - 5,347 - 5,347
Share issue
transaction
costs - (172) - - - (172) - (172)
Share based
payment expense - - - - 1,113 1,113 - 1,113
Reclassification
of equity
settled
share based
payments 6 - - - - (105) (105) - (105)
Capital
reduction - (12,073) - - 12,073 - - -
--------- --------- --------- --------- --------- --------- --------- ---------
Total
contributions
by owners of
the 10 (6,908) - - 13,081 6,183 - 6,183
Company
Total
comprehensive
loss - - - - (10,748) (10,748) (1,677) (12,425)
--------- --------- --------- --------- --------- --------- --------- ---------
As at
30 September
2013 66 4,222 3,131 - (2,498) 4,921 24,404 29,325
---------------------- -------------------------- ---------------------- ---------------------- ---------------------- ---------------------- -------------------------- ------------------------
As at
1 October 2013 66 4,222 3,131 - (2,498) 4,921 24,404 29,325
Issue of shares 59 8,880 24,961 - - 33,900 - 33,900
Repurchase
and cancellation
of shares (22) - - 22 - - - -
Share issue
transaction
costs - (1,064) - - - (1,064) - (1,064)
Share based
payment expense - - - - 47 47 - 47
Acquisition
of non--
controlling
interests 6 - - - - (3,732) (3,732) (24,404) (28,136)
Foreign exchange
on translation
reserve on
consolidation 6 - - - 12 - 12 - 12
Capital
reduction 6 - (5,609) - - 5,609 - - -
--------- --------- --------- --------- --------- --------- --------- ---------
Total
contributions
by owners of
the 37 2,207 24,961 34 1,924 29,163 (24,404) 4,759
Company
Total
comprehensive
loss - - - - (10,610) (10,610) - (10,610)
--------- --------- --------- --------- --------- --------- --------- ---------
As at
30 September
2014 103 6,429 28,092 34 (11,184) 23,474 - 23,474
-------- ---------
------------------------ -------------------------- ------------------------ ------------------------ ---------------------- ---------------------- -------------------------- ------------------------
COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30
SEPTEMBER 2014
Share Share Merger Other Accumulated Total Equity
Capital Premium Reserve Reserves Losses
Note (&000's) (&000's) (&000's) (&000's) (&000's) (&000's)
As at 1 October
2012 56 11,130 3,131 - (3,962) 10,355
Issue of shares 10 5,337 - - - 5,347
Share issue
transaction
costs - (172) - - - (172)
Share based
payment
expense - - - - 1,113 1,113
Reclassification
of
equity settled
share
based payments 6 - - - - (105) (105)
Capital
reduction - (12,073) - - 12,073 -
--------- --------- --------- --------- --------- ---------
Total
contributions
by owners of the
Company 10 (6,908) - - 13,081 6,183
Total
comprehensive
loss - - - - (9,327) (9,327)
--------- --------- --------- --------- --------- ---------
As at 30
September
2013 66 4,222 3,131 - (208) 7,211
--------- --------- ------------- --------- ------------- -------------
--------- --------- ------------- --------- ------------- -------------
As at 1 October
2013 66 4,222 3,131 - (208) 7,211
Issue of shares 59 8,880 24,961 - - 33,900
Conversion of - - - - - -
shares
at listing
Repurchase and
cancellation
of shares (22) - - 22 - -
Share issue
transaction
costs - (1,064) - - - (1,064)
Share based
payment
expense - - - - 47 47
Capital
reduction - (5,609) - - 5,609 -
--------- --------- --------- --------- --------- ---------
Total
contributions
by owners of the
Company 37 2,207 24,961 22 5,656 32,883
Total
comprehensive
loss - - - - (10,385) (10,385)
--------- --------- --------- --------- --------- ---------
As at 30
September
2014 103 6,429 28,092 22 (4,937) 29,709
--------- --------- -------------------------- --------- -------------------------- --------------------------
--------- --------- ---------
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30
SEPTEMBER 2014
Year ended 30 Year ended
September 2014 30 September
(GBP000's) 2013 (GBP000's)
Cash flows from operating activities
Loss before taxation (10,915) (13,012)
Adjustments for:
Depreciation of plant and equipment 70 68
Loss on sale of assets 4 -
Interest received (24) (1)
Interest paid 2 17
Amortisation of intangible assets 2,762 3,119
Impairment of intangibles 1,653 -
Tax credit received 26 -
Share based payments 47 1,113
------------------------- -------------------
Operating cash out flows before movements
in working capital (6,375) (8,696)
------------------------- -------------------
Decrease/(Increase) in trade and other
receivables 57 (418)
(Decrease)/Increase in trade and other
payables (697) 582
------------------------- -------------------
Net cash used in operating activities (7,015) (8,532)
------------------------- -------------------
Cash flows from investing activities
Interest received - 1
Acquisition of subsidiary undertaking (3,125) -
Purchase of plant and equipment (29) (220)
Proceeds from sale of plant and equipment 2 -
Purchase of intangible assets (81) (573)
------------------------- -------------------
Net cash used in investing activities (3,233) (792)
------------------------- -------------------
Cash flows from financing activities
Repayment of loan notes and other debt (50) (14)
Share issue transaction costs (416) (820)
Proceeds from issue of Ordinary and Preference
shares 8,614 5,346
------------------------- -------------------
Net cash from financing activities 8,148 4,512
------------------------- -------------------
Net decrease in cash and cash equivalents (2,100) (4,812)
Cash and cash equivalents at the beginning
of the year 3,939 8,866
Exchange losses on cash and cash equivalents (96) (115)
Cash and cash equivalents at end of the
year 1,743 3,939
------------------------- -------------------
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2014
Year ended Year ended
30 September 30 September
2014 (GBP000's) 2013 (GBP000's)
Cash flows from operating activities
Loss before taxation (4,097) (9,327)
Adjustments for:
Depreciation of plant and equipment 48 55
Loss on sale of assets 4 -
Interest received (24) -
Interest paid 2 17
Share based payments 47 1,113
-------------------- -------------------
Operating cash out flows before movements
in working capital (4,020) (8,142)
-------------------- -------------------
Increase in trade and other receivables (2,549) (982)
(Decrease)/Increase in trade and other
payables (469) 373
-------------------- -------------------
Net cash used in operating activities (7,038) (8,751)
-------------------- -------------------
Cash flows from investing activities
Purchase of plant and equipment (10) (172)
Proceeds from sale of plant and equipment 2 -
Purchase of intangible assets (81) (471)
Investment in subsidiaries - (16)
Acquisition of subsidiary undertaking (3,125) (190)
-------------------- -------------------
Net cash used in investing activities (3,214) (849)
-------------------- -------------------
Cash flows from financing activities
Repayment of loan notes and other
debt (50) (14)
Share issue transaction costs (416) (820)
Proceeds from issue of Ordinary and
Preference shares 8,614 5,346
-------------------- -------------------
Net cash from financing activities 8,148 4,512
-------------------- -------------------
Net decrease in cash and cash equivalents (2,104) (5,088)
Cash and cash equivalents at the beginning
of year 3,391 8,594
Exchange losses on cash and cash equivalents (136) (115)
-------------------- -------------------
Cash and cash equivalents at end of
year 1,151 3,391
-------------------- -------------------
NOTES
1. BASIS OF PREPARATION
The financial information presented in this announcement is
extracted from the Group's audited financial statements for the
year ended 30 September 2014.
The announcement for the year ended 30 September 2014 was
approved by the Board of Directors on 11 December 2014. The
financial information set out above does not constitute statutory
accounts within the meaning of Section 434 of the Companies Act
2006. Statutory accounts for the year ended 30 September 2014 will
be delivered to shareholders by the end of December, together with
notice of the Annual General Meeting to be held on 27 January 2015.
A copy of the Statutory accounts will be available on the Company's
website, www.arria.com, shortly. The auditors' report on the
financial statements for the year ended 30 September 2014 is
unqualified and does not contain a statement under section 498(2)
or (3) of the Companies Act 2006, however it contains an emphasis
of matter in respect of going concern for reasons outlined in note
2. The Group's financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRS)
as adopted by the EU.
2. GOING CONCERN
At the balance sheet date, the group had net assets of GBP23.5
million, including net cash of GBP1.7 million. The Group made a
loss before tax of GBP10.9 million and expects to continue to make
losses in the near term as it invests in developing new markets for
its products and secures its position in commercialising Natural
Language Generation. In the medium term, the focus will be on
growing revenues in order to achieve profitability and positive
cash flows.
Since the balance sheet date, GBP1.2 million has been drawn down
from the GBP3.08 million convertible debt facility signed on 30
September 2014 (refer to note 17).
The Directors have prepared a business plan and cash flow
forecast for the period to 30 June 2016. The forecast contains
certain assumptions about future sales, the gross margins
achievable and the level of other operating expenses. In addition
to this business plan, the Directors have considered various
downside sensitivities and management actions that could be
undertaken to ensure the ongoing operation of the Group. The Group
is in the process of seeking further fundraising in the form of
equity or convertible debt to provide adequate working capital to
support the commercialisation of Natural Language Generation and
enable the Group and Company to continue as a going concern. At the
time of approving these financial statements, the Directors have
held preliminary discussions with existing and prospective
shareholders and lenders. The extent and frequency of funding
required will depend on the speed and quantum with which the Group
secures additional profitable revenue growth. The Directors are
confident of securing sufficient additional funding within the next
financial year, for its near term requirements. Should negotiations
prove unsuccessful, the Group and Company would be unable to meet
their debts as they fall due in the foreseeable future.
The Directors have concluded that pending successful agreement
of additional funding there exists a material uncertainty which may
cast significant doubt over the ability of the Group and Company to
continue as a going concern. Having reviewed the business plan and
subject to the uncertainties described above, the Directors have a
reasonable expectation that the Group and Company will have
adequate resources to continue operating for the foreseeable
future. Therefore, the Directors continue to adopt the going
concern basis in preparing the financial statements and these do
not include adjustments that would result if the Group and Company
were unable to continue as a going concern.
3. 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 relate to unallocated head
office costs.
The following is an analysis of revenues and results from
operations and assets by business segment:
Revenue
Group Group
Year ended Year ended
30 September 30 September
2014 2013
(GBP000's) (GBP000's)
Provision of computer software 787 816
---- ----
Total 787 816
---- ----
Loss before tax
Group Group
Year ended Year ended
30 September 30 September
2014 2013
(GBP000's) (GBP000's)
Provision of computer software (5,188) (3,138)
Corporate costs (5,727) (9,874)
--------- ---------
(10,915) (13,012)
--------- ---------
Assets
Group Group Company Company
Year ended Year ended Year ended Year ended
30 September 30 September 30 September 30 September
2014 2013 2014 2013
(GBP000's) (GBP000's) (GBP000's) (GBP000's)
Provision of computer
software 26,072 30,092 - -
Corporate 1,272 4,534 37,790 9,955
------- ------- ------- ------
27,344 34,626 37,790 9,955
------- ------- ------- ------
Entity-wide information
Total revenue from activities by geographical destination is
detailed below:
Revenue by geography
Group Group
Year ended Year ended
30 September 30 September
2014 2013
(GBP000's) (GBP000's)
Revenue derived from the UK 38 13
Revenue derived from the United States 749 803
---- ----
Total Revenue 787 816
---- ----
Revenue of individual customers accounting for greater than 10%
of revenue
Group Group
Year ended Year ended
30 September 30 September
2014 2013
(GBP000's) (GBP000's)
Customer A - United States 749 803
Customer B - United Kingdom 38 13
---- ----
Total Revenue 787 816
---- ----
4. OPERATING LOSS
The Group's operating loss has been arrived at after
charging:
Group Group
Year ended Year ended
30 September 30 September
2014 2013
(GBP000's) (GBP000's)
Employee and consultant costs 4,777 5,031
Operating lease rentals 258 260
Depreciation charge 70 68
Research and development 32 9
Legal and professional fees 1,089 3,024
Foreign exchange losses 261 34
5. 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 the Company. Details of the earnings
and weighted average number of Ordinary shares used in each
calculation are set out below. As the entity is loss making,
diluted and basic earnings per share are equal.
Group Group
Year ended Year ended
30 September 30 September
2014 2013
(GBP000's) (GBP000's)
Loss attributable to owners of the parent (10,610) (10,748)
--------- ---------
Number Number
(000's) (000's)
Weighted average number of shares 99,182 60,622
-------- --------
Basic earnings per share (0.11)p (0.18)p
Diluted earnings per share (0.11)p (0.18)p
-------- --------
6. RESERVES
Capital Foreign Non--
Redemption exchange Merger Accumulated controlling
reserve reserves reserve losses interest
(GBP000's) (GBP000's) (GBP000's) (GBP000's) (GBP000's)
Group
At 1 October 2012 - - 3,131 (4,831) 26,081
Loss for the year - - - (10,748) (1,677)
Share based payment
expense - - - 1,113 -
Reclassification of
equity
settled share based
payment to cash settled - - - (105) -
Acquisition of subsidiary - - - 12,073
--- --- ------- --------- ---------
At 30 September 2013 - - 3,131 (2,498) 24,404
--- --- ------- --------- ---------
At 1 October 2013 - - 3,131 (2,498) 24,404
Loss for the year - - - (10,610) -
Acquisition of non-controlling
interest in Arria
Data2Text - - 21,830 (2,075) (22,926)
Acquisition of Global
IP - - 3,131 (1,657) (1,478)
Repurchase and
cancellation of shares 22 - - - -
Share based payment
expense - - - 47 -
Foreign exchange translation
reserve on consolidation - 12 - - -
Capital Reduction - - - 5,609 -
--- --- ------- --------- ---------
At 30 September 2014 22 12 28,092 (11,184) -
--- --- ------- --------- ---------
Capital
redemption Merger Accumulated
reserve reserve losses
(GBP000's) (GBP000's) (GBP000's)
Company
At 1 October 2012 - 3,131 (3,962)
Loss for the year - - (9,327)
Share based payment expense - - 1,113
Reclassification of equity settled share
based payment
to cash settled - - (105)
Acquisition of subsidiary - - 12,073
--- ------- ---------
At 30 September 2013 - 3,131 (208)
--- ------- ---------
At 1 October 2013 - 3,131 (208)
Loss for the year - - (10,385)
Acquisition of Global IP - 21,830 -
Fair value adjustment on acquisition
of Arria Data2Text and Global IP - 3,131 -
Repurchase and cancellation of shares 22 - -
Share based payment expense - - 47
Capital Reduction - - 5,609
--- ------- ---------
At 30 September 2014 22 28,092 (4,937)
--- ------- ---------
Capital reduction
On 23 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, pursuant to a Solvency
Statement made by the Directors on 18 October 2013. The share
premium cancelled was GBP5,608,796.
Merger reserve
The merger reserve arose on the acquisition of SQi3 Solutions
Limited on 28 September 2012, Arria Data2Text Limited (formerly
Data2Text Limited) on 25th October 2013 and Global IP Inc. on 25th
October 2013. As the consideration consisted entirely of shares,
the Company has taken advantage of merger relief under the
Companies Act 2006 and not recorded the premium on these shares.
The premium has been credited to the merger reserve.
Capital redemption reserve
The capital redemption reserve arose on repurchase and
cancellation the 45,000,000 Ordinary B shares at a nominal value of
GBP0.001 and reissued in its place, 23,165,488 Ordinary shares at a
nominal value of GBP0.001. The resulting difference of GBP21,835
was credited to the capital redemption reserve.
Non-Controlling Interest
The non-controlling interest arose on the acquisition of Arria
Data2Text Limited (formerly Data2Text Limited) on 1 May 2012 and on
the acquisition of Global IP Inc., on 29 September 2012. The Group
owned 20% of the issued share capital of Arria Data2Text Limited
(formerly Data2Text Limited) and held the option to acquire the
remaining 80% shareholding thus giving it control. Therefore a
non-controlling interest in respect of the remaining 80% had been
recognized to 30 September 2013. The Group owned 0% of the share
capital of Global IP Inc., however it had entered into an agreement
which provided the Group with the option to enter an exclusive
license to the rights, placed restrictions on Global IP Inc.
undertaking activities without the Company's consent and provided
that once certain conditions were met the Company had an obligation
to acquire Global IP Inc. Therefore de facto control was
obtained.
On 25 October 2013, the Company concluded the acquisition of the
remaining 80% of the share capital of Arria Data2Text Limited
(formerly Data2Text Limited) over which it had an option.
Following the acquisition of Arria Data2Text Limited (formerly
Data2Text Limited), the Company concluded the acquisition of the
share capital Global IP Inc. (from Sharon Daniels, a former
Director and Robert Craig a former Director) over which it had
already had control at the balance date.
Non-Controlling
Interest (GBP000's)
At 1 October 2012 26,081
Share of loss of Arria Data2Text Limited (formerly
Data2Text Limited) (796)
Share of loss of Global IP Inc. (881)
----------------------------------------
At 30 September 2013 24,404
----------------------------------------
GBP
At 1 October 2013 24,404
Acquisition of Arria Data2Text Limited (formerly
Data2Text Limited) (22,926)
Acquisition of Global IP Inc. (1,478)
----------------------------------------
At 30 September 2014 -
----------------------------------------
7. POSTING OF ACCOUNTS AND NOTICE OF ANNUAL GENERAL
MEETING
A copy of the annual report and accounts will be posted to
shareholders of the Company by the end of December 2014, along with
a notice of the Company's annual general meeting, to be held on 27
January, 2015, at 2.00pm at the offices of Travers Smith LLP, 10
Snow Hill, London, EC1A 2AL. A copy of the report and accounts and
general meeting notice will also be available for download from the
Company's website, www.arria.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR BCBDDCBBBGSB
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