TIDMPCIP
RNS Number : 3998R
PCI-PAL PLC
08 March 2021
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the company's obligations under Article 17 of MAR.
8 March 2021
PCI-PAL PLC
("PCI Pal" or "the Group" or "the Company")
Interim Results for the Six Months ended 31 December 2020
& details of Investor Presentation
PCI-PAL PLC (AIM: PCIP), the global cloud provider of secure
payment solutions for business communications , is pleased to
announce its unaudited interim results for the six months to 31
December 2020.
Financial highlights for the period
-- Revenue increased 56% year on year to GBP3.19 million (2019: GBP2.04 million)
-- Gross margin improved to 73% (2019: 67%)
-- Recurring revenues represent 86% of total revenue (2019: 85%)
-- New contract annual recurring licence sales in the period
("ACV") up 44% at GBP1.68 million (2019: GBP1.17 million)
-- TACV(1) as of 31 December 2020 was GBP8.28 million (2019:
GBP5.21 million) reflecting a 59% increase year on year
-- Loss from operating activities in line with expectations at
GBP2.15 million (2019: GBP2.28 million)
-- Cash at period end of GBP4.23 million (30 June 2020: GBP4.30
million) with net cash being GBP2.11 million (30 June 2020: net
cash GBP3.03 million)
-- Deferred revenue of GBP6.36 million (2019: GBP4.00 million) at period end
(1) TACV is the total annual recurring revenue of all signed
contracts, whether invoiced and included in deferred revenue or s
till to be deployed and/or not yet invoiced.
Operating highlights in the period
-- Signed 93 new customer contracts, an 82% increase YoY (2019: 51)
-- 74% of new contracts generated from channel partners (2019: 82%)
-- 67 additional new customers live with services, a 123% increase YoY (2019: 30)
-- Time to go live of new contracts from the date of signature
to go live ("TTGL") improved by 16% to 3.7 months for customers
signed in the preceding 12 months (June 2020: 4.4 months)
-- Net Promoter Score significantly ahead of global benchmarks at 163%
-- New technology partnerships announced with Oracle and Calabrio
-- New reseller partnership with major IT Services provider to
US federal, state, and local government completed, resulting in
first customer contract signed with a US state
-- Signed and deployed a major new customer, a well-known
international fashion retailer headquartered in North America. with
more than 1,500 agents
-- Announced formation of the PCI Pal Advisory Committee ("PAC")
and appointed first member, Neira Jones, a respected payments
industry executive
-- Won Data Security Solution Provider of the Year at the
US-held Cybersecurity Breakthrough Awards
Current trading
Highlights since 31 December 2020 include:
-- Sales highlights:
o New customer contract highlights in the US include a
well-known global manufacturer of home fixtures and furnishings, as
well as a contract to supply our Agent Assist solution through an
integrated partner to a division of one of the largest insurance
brokers in the world.
o In EMEA, highlight sales include a number of new contracts
with local authorities in England, including a large County
Council, and a new reseller partnership with a major
telecommunications company in Spain.
-- Second largest customer in company's history, contracted in
the UK in H2 FY2020, now live with PCI Pal services across all
contact centre locations.
-- Successfully hosted our first virtual conference, "Payments:
The future of security and CX" in February. Keynote presentations
and breakout sessions were given by Verizon, NICE inContact, 8x8,
Oracle, Capita Pay 360, Civica, Calabrio & Talkdesk.
-- As at the end of February 2021, cash has improved to GBP4.62
million and net cash, less the outstanding Group's loan facility,
was GBP2.69 million
Commenting on the results for the period, James Barham, Chief
Executive Officer said:
"I am delighted with the continued progress and positive
momentum being shown by the Group as we report on another strong
period of growth and development. The business has taken another
substantial step forward with the increased number of contracts
signed, expansion of our partner ecosystem, and positive outcomes
across all of our key performance metrics.
"Our early adoption of cloud-only services, available globally,
as well as our channel partner sales model have seen us benefit
from the IT transformation occurring in the business communications
market today, with more and more companies moving from on-premise
technology to cloud services.
"This continued execution against our plans gives me confidence
in the outlook for the Company as we remain on track to achieve our
market forecasts for this current financial year. We are well
positioned to continue the momentum we are building as we look to
capitalise on the undoubted market opportunity for our
technology."
Analyst Briefing: 9.30 am today, Monday 8 March 2021
An online briefing for analysts will be hosted by James Barham,
Chief Executive, and William Good, Chief Financial Officer, at 9.30
am today, Monday 8 March 2021, to review the results and prospects
of the Company. Analysts wishing to attend should contact Walbrook
PR on pcipal@walbrookpr.com or 020 7933 8780.
Investor Presentation: 10.00 am on Thursday 11 March 2021
The Directors will hold an investor presentation to cover the
results and prospects at 10.00 am on Thursday 11 March 2021.
The presentation will be hosted through the digital platform
Investor Meet Company. Investors can sign up to Investor Meet
Company and add to meet PCI-PAL PLC via the following link
https://www.investormeetcompany.com/pci-pal-plc/register-investor .
For those investors who have already registered and added to meet
the Company, they will automatically be invited.
Questions can be submitted pre-event to pcipal@walbrookpr.com or
in real time during the presentation via the "Ask a Question"
function.
For further information, please contact:
PCI-PAL PLC Via Walbrook PR
James Barham - Chief Executive Officer
William Good - Chief Financial Officer
finnCap (Nominated Adviser and
Broker) +44 (0) 20 7227 0500
Marc Milmo / Simon Hicks (Corporate
Finance)
Richard Chambers (Corporate Broking)
Walbrook PR +44 (0) 20 7933 8780
Tom Cooper/Paul Vann +44 (0) 797 122 1972
tom.cooper@walbrookpr.com
About PCI Pal:
PCI Pal is a leading provider of Software-as-a-Service ("SaaS")
solutions that empower companies to take payments from their
customers securely, adhere to strict industry governance, and
remove their business from the significant risks posed by
non-compliance and data loss. Our products secure payments and data
in any business communications environment including voice, chat,
social, email, and contact centre. We are integrated to, and resold
by, some of the worlds' leading business communications vendors, as
well as major payment service providers.
The entirety of our product-base is available from our global
cloud platform hosted in Amazon Web Services ("AWS"), with regional
instances across EMEA, North America, and ANZ. PCI Pal products can
be used by any size organisation globally, and we are proud to work
with some of the largest and most respected brands in the
world.
For more information visit www.pcipal.com or follow the team on
Linkedin: https://www.linkedin.com/company/pci-pal/
Chief Executive Officer's Business Review
Introduction
I am pleased to report that we have made significant progress
against all our key growth metrics in the first half of the year as
we continue towards our goal to become the preferred solution
provider that organisations turn to globally for achieving payment
security and PCI compliance in customer engagement environments. We
have been able to achieve this through our focus on the three
strategic pillars that we incorporated into our stated objectives:
serving products from a true cloud environment; available globally;
with a sales model that leverages the strengths of large and often
global channel partners.
We have increased our key growth metric and indicator of future
revenues of TACV by 59% year on year to GBP8.28 million (2019:
GBP5.21 million), and as a result, we have taken a further
substantial step forward in reported revenue growth, increasing 56%
year on year to GBP3.19 million (2019: GBP2.04 million).
It is testament to our channel strategy that we have achieved a
further uplift in new customer contracts signed in the period,
increasing by 63% year on year to 93 (2019: 57), with 75% of these
new customers generated through channel partners. New business ACV
signed in the first half increased 44% year on year to GBP1.68
million (2019: GBP1.17 million).
Delivering our growth strategy
Having made a commitment to build a channel sales business, we
now have an enviable and growing ecosystem of partners including
some of the best-known names in the business communications and
payments markets. The contact centre market is by majority made up
of small to medium size sites (those with less than 250 agent
seats). In the US alone, there are over 37,000 contact centres (93%
of all contact centres in the region) with less than 250 seats. Our
ability to market, engage, and sell to this majority end of the
market, via our channel ecosystem, is critical to realising the
scale potential of this business. We are able to successfully sell
to any size customer, leveraging our partners existing routes to
market to address smaller customers in volume, as well as selling
both through partners and direct to the larger enterprise end of
the market.
We have continued to be successful in winning these larger,
enterprise-level, contact centres in the period, across both the UK
and North America. We are also beginning to see positive results of
our direct account-based marketing strategy, which was started at
the end of our FY20, with a pleasing increase in the number of
strategic deals available to us. By their nature, the timing of
these larger deals is more difficult to predict but it is pleasing
to see success in winning a number of enterprise-size customers
whether through partners or direct through competitive tender
processes.
It has been critical for this fast-growing business to balance
the immediate needs caused by the onset of the pandemic with
continued longer term strategic planning. We are executing on our
near term objectives, whilst maintaining strategic growth focus to
ensure we realise the longer term opportunities ahead of us. In
August, we announced the formation of the PCI Pal Advisory
Committee ("PAC"). The objective of the PAC is to provide
additional breadth of market and product perspectives to myself and
the Board as we seek to capitalise on the various opportunities in
front of us. Our first member is Neira Jones, an internationally
well-known executive and subject matter expert in payments,
fintech, and cybersecurity. Neira brings a wealth of experience and
knowledge to our strategic planning resources having held senior
positions at Barclaycard, as well as serving on the Board of
Advisors for the Payment Card Industry Security Standard Council
("PCI SSC").
COVID-19
The business has been well positioned to deal with the
implications of the onset of the pandemic throughout. Supporting
our view that the contact centre market was likely to grow, Contact
Babel has confirmed in its recent market reporting that both the US
and UK contact centre markets have expanded by 2% and 4%
respectively in 2020, the largest single increase in both regions
for more than five years.
Our early investment in cloud technology, which has led to our
position as the leader in cloud solutions in our market, has been a
key component of our capability to deal with the operational
changes that occurred during the pandemic, such as the requirement
to enable our customers to operate entirely remotely. It also puts
us in a position of strength as we seek to capitalise on the
on-going IT transformation occurring in the unified communications
and contact centre markets today, with companies moving from legacy
on-premise, hardware communications solutions, to feature-rich
cloud services. Further anecdotal evidence is showing that this
change is accelerating as a result of the pandemic, as contact
centres wrestle with moving their staff to a more flexible
working-from-home basis, or in the future a blended home and office
working.
The Group's progress during the pandemic is testament to our
people, who have all experienced some challenging times personally
during this period. At the onset of the pandemic, the Company
immediately increased communications with our teams, and, as well
as offering flexible work schedules, worked closely with those more
greatly affected by the impacts of the pandemic. As a small, fast
growing business, we take pride in the closeness of our teams
across the UK and US as we all drive towards the collective
corporate goals of the business. As a business we ensure we are
sensitive and sympathetic to our team's personal needs as we build
towards a new working normal.
PCI Pal Cloud
We launched our cloud platform in October 2017 and were the
first to bring secure payment services to the contact centre market
through a true-cloud technology offering, available globally.
Having set out a key strategic objective to be the leader in
cloud-based secure payment services to the business communications
market, we have expanded our platform to reach across multiple
regions in EMEA, North America, and ANZ.
We have consistently added new reseller partners to our
ecosystem who are often global cloud-based vendors themselves. We
provide full on-boarding to these partners allowing us, where
possible, to integrate with their own solution offerings thus
providing these partners with easy-to-deploy PCI compliant payment
solutions that they can sell alongside their own core product
offerings.
At PCI Pal, we utilise AWS for the virtualised hosting of our
cloud platform. We selected AWS for their market leading position
in hosting, their features, resilience, and geographic coverage.
Our true-cloud approach allows us to deliver services across the
globe whilst maintaining data sovereignty and regional handling of
payment traffic by leveraging the data regions we have created
within our platform. This is both of appeal to smaller local
customers who need their data to be handled within the territory in
which they trade; but equally to larger multi-national
organisations whose businesses may be geographically dispersed with
more complex data handling requirements. Our customers can
therefore use a single PCI Pal service, but choose to handle their
customers' data locally wherever their services are being used.
Today we have customers live across all our availability zones
within AWS: UK, Ireland, Germany, US, Canada and Australia. Many of
our partners benefit from this international coverage, particularly
those with a similar technical footprint. The platform has been
designed and built to be managed as a single entity underpinned by
cloud native technology, allowing us to be ultra-efficient in
maintaining the platform, nimble in our development cycles and more
robust in our release processes. We have proven our ability to
expand the platform to new geographic locations to meet commercial
demand, the most recent of which being the Sydney instance,
activated in under two weeks. We are expecting to continue to add
new geographic locations as we continue to meet the demand for our
services from across the world.
North America
Now in our third full financial year since launching in North
America, we are seeing sales and revenue momentum building through
the quantities of new contracts we have won as a result of the
partnerships we have put in place as well as through direct
marketing activities. We signed 35 new customer contracts in the
period, an 84% increase on the prior year, with 74% of these coming
from channel partners. Our key growth metric, and indicator of
future revenues, TACV for the region increased by 106% year-on-year
to GBP2.47 million (2019: GBP1.20 million).
New ACV signed in the region in the period was in line with
management expectations for the period at GBP0.72 million. This is
similar to the prior year comparable of GBP0.67 million, but this
prior year number did include the Company's second largest contract
signed to date at GBP0.44 million ACV.
Although still smaller numbers due to our time in the region,
the continued sales momentum is now beginning to flow through to
recognised revenues which increased to GBP0.84 million (2019:
GBP0.15 million). Revenues for the region represented 26% of total
Group revenues for the period (2019: 7%).
Sales highlights in the region include several new channel
partnerships, all of whom were on our target lists for the year.
These include Oracle and Calabrio, a global leader in Workforce
Optimisation ("WFO") and call recording, both of whom are now fully
on-boarded referral partners. We also signed a reseller partnership
with one of the largest IT service providers to federal, state, and
local government in the US, a partnership that immediately resulted
in the Group's first contract with a US state. This is particularly
exciting for us given our strength in the equivalent government
sector in the UK.
Additionally, we have been successful in expanding an existing
regional relationship we have had with a major US headquartered,
global Business Process Outsourcer ("BPO") to a global
relationship. We had a small number of customers with this partner
in the UK and applied a similar strategy to that which enabled us
to expand other UK-centric regional partnerships to other large
US-owned partners. We now have a centralised relationship in place
with the BPO as their secure payment solution provider of choice
globally. This extended partnership has resulted in three new
customer deals in the period in the US and Spain, all with
well-known brands. This is a further illustration as to how our US
sales activities can benefit our other regions.
From a direct sales perspective, the highlight sale was to a
North American headquartered, popular fashion retailer with stores
worldwide. With more than 1,500 agent seats, we were extremely
pleased for this customer to be live with our services within 10
weeks of signing. Additionally, we have continued to sign other
strong brands, and these include Fortune 500 companies. A number of
these deals have been secured as "initial phase" deals and we are
expecting to sell our services to other parts of these
organisations over the coming years.
Overall, I am extremely pleased with how the US region is
developing for us. The market is approximately six times larger
than the UK market and we are building good sales and revenue
momentum on the back of our increasing brand awareness. We are
confident that the US region will play an increasingly important
part in the continued growth of the Group over the coming
years.
EMEA
Of our two core regions today, the EMEA business served by our
UK-based team, is the more mature. Sales momentum has been strong
in the region due to the growing opportunities we are seeing with
our global partners, many of whom are US-headquartered, with UK and
pan-European operations. These opportunities are adding to the
existing sales activity we have developed with other longer
standing regional partnerships within the region.
New ACV signed in the period increased by 96% year on year to
GBP0.96 million (2019: GBP0.49 million) bringing our key future
revenue indicator of TACV for the region to GBP5.80 million, a 45%
increase year on year (2019: GBP4.01 million). We signed 58 new
customer contracts in the period, a substantial 53% increase on the
prior year, illustrating the scale potential of our channel
business model.
We increased revenues in the region for the period by 24% to
GBP2.35 million (2019: GBP1.90 million), of which 86% was recurring
(2019: 86%). Revenues in EMEA are generated both from services on
our first-generation, privately hosted platform and, since 2018,
from our margin-rich, true-cloud AWS environment. We ceased selling
new services on the first-generation platform in 2018.
We are consistently winning new business with large, recognised
brands, with the majority of our EMEA new business coming from the
UK where the entirety of our sales team is based today. Sales
highlights included the signing of a major UK airline, won through
our growing reseller relationship with one of the world's leading
European headquartered BPOs. Since the period end this customer has
gone live. Additionally, we have continued to add to our strength
as the leading provider in our space to the public sector in the
UK, adding several local authorities as well as one of the largest
councils in England. We continue to grow our relationships with
both Capita Pay 360 (the payments arm of Capita PLC) and
Civica.
Channel Partners
At PCI Pal, our partner-first model means that we sell primarily
through channel partners, which by majority includes resellers and
referral partners. We are committed to our goal to be the go to
provider of secure payment services for technology companies
globally.
Our channel sales model has been one of our three pillars of
strategic focus since we set out the current plan over four years
ago. Our partners include some of the best known names in the
high-growth business communications markets (CCaaS and UCaaS) such
as 8x8, Genesys, Vonage, and Talkdesk; as well as partners from a
variety of markets including payment gateways, BPOs, and systems
integrators. In the period, 75% of all new contracts were generated
from partners (2019: 84%), which contributed 64% of the recurring
ACV value signed in the period (2019: 47%). This was an anticipated
proportionate increase in value as quantities of contracts from
partners increase with partner relationships maturing that have
been secured in previous years.
We categorise our partners into four different groups:
-- Integrated Partners - Such as CCaaS, UCaaS or carrier
partners with tight telephony, and sometimes desktop, integrations.
Repeatable integrations facilitate shorter customer implementation
times.
-- Solution Providers - Typically Value Added Resellers ("VARs")
and Systems Integrators of the major traditional telephony
platforms such as Genesys, Cisco, and Avaya. Solution Providers
also include payment service providers such as Worldpay B2B, Capita
Pay 360, and Civica; as well as BPOs.
-- Referral Partners - Partners who introduce customers to us,
to whom we then sell direct. These include Master Agents,
consultants, as well as other organisations who may prefer to first
introduce, prior to becoming a fully enabled reseller.
-- Technology Partners - typically these are major technology
vendors with whom we have sought technology accreditations that
allow us to sell to both their own partner communities and also
major enterprise customers, such as Oracle.
Whilst we have been focused on maximising the opportunities that
we have with our partners, many of whom we have been working with
for under two years, we have been successful in growing our partner
eco-system securing new partnership agreements with a number of
organisations, the majority of which were on our target lists at
the start of the year.
We were pleased to secure our first reseller in the United
States in the Federal, State, and local US government sector. Two
of our longest standing partners in the UK are public sector
leaders, Capita and Civica, and with more than 40 customers in the
public sector in the UK alone, we are excited by this new US
partnership, which immediately resulted in our first contract with
a US state.
We increased our marketing collaboration with our partners at
the onset of the pandemic as a response to reduced, in-person
marketing opportunities at events and conferences, and we have
maintained this momentum with our partners ever since. We are using
multiple channels through our digital marketing strategy, including
our new podcast series that we launched in December 2020 publishing
several episodes to date including partner collaborations.
Operations
As we continue to focus operationally on people, process, and
technology, I am extremely pleased with our continued progress in
the business' operational capabilities related to customer
implementations. We have made extensive improvements to our
capabilities since we first introduced our key delivery metric of
TTGL in January 2019. We will continue to evolve our capabilities
operationally that will allow us to achieve the operational gearing
that our subscription-based, SaaS model brings.
In spite of the difficulties caused by the pandemic we have
further improved TTGL for customers signed in the last 12 months by
16% since the end of the full prior year to 3.7 months (30 June
2020: 4.4 months), with 67 new customers live with our services in
the period. This is a substantial 123% increase year on year (2019:
30). These 67 customers account for GBP1.80 million in annual
recurring revenue, which again is a substantial 350% increase on
the prior year comparator (2019: GBP0.4 million). Being a cloud
only solution means that our customers can access our services with
deployments maintained entirely remotely. We have no need to visit
any customer sites.
More pleasing to me is that we are handling this growth in a way
that our customers and partners appreciate. Our Net Promoter
Scores, which measure how satisfied our customers are with our
deployment services, have increased since FY2020 year end and now
stand at 163% above the global NPS benchmark.
The operational highlight of the period was the go live of our
largest customer in the United States, which is now live across
more than 4,000 agents who work across several contact centre
locations in the region. This was a highly successful engagement
for PCI Pal, with the customer's project team winning an award
internally for the success of the overall project delivery.
Outlook
We are well positioned to continue the momentum we have built in
the period having made another significant step forward in all key
growth metrics in the first half. Whilst we remain mindful of the
pandemic and impacts this is having on some businesses and sectors,
the strength of our near-term sales pipelines, as well the
continued accumulation of our key growth metric of TACV, give the
Board confidence of achieving market expectations for the full
year.
Up to the end of February we have signed a further 26 new
customer contracts, as well as continued to expand our partner
eco-system, which included a new reseller partnership with a large
telecommunications company in Spain, as well as a global extension
to a regional reseller agreement we have had in place with a large
payment processor in the US.
Our capability to work with our customers and partners entirely
remotely has seen a further 10 customers go live with our services
up to the end of February. These customers include the largest
contract signed in FY2020, as well as a well-known FTSE 250 company
signed earlier this financial year.
We were the first company to launch a true cloud, next
generation, solution in our market. Since its launch in 2017, we
have seen a strong and growing take up of our services from key
technology vendors who we have partnered with. Worldwide, more and
more companies are looking to update their business communications
needs and are by majority investing in the latest cloud-based
solutions available from these key partners of ours, who then
resell our complementary solutions as part of their offerings. We
are therefore well positioned to continue to grow the business we
have built today. We will look to capitalise on the opportunities
that we have in front of us globally that will continue to drive
stepped, long term increases in our key growth metric of TACV.
James Barham
Chief Executive Officer
8 March 2021
CFO's Financial Review
Revenue and gross margin
Group revenue grew by 56% to GBP3.19 million (2019: GBP2.04
million) and gross margin improved to 73% (2019: 67%). This
improvement continues to reflect the higher margin revenue
generated by the PCI Pal platform hosted on AWS which has only a
limited reliance on third party suppliers to receive or deliver
calls. Going forward, we expect the gross margin to continue to
improve as more sales, delivered on the AWS platform, reach revenue
recognition.
The Group's revenue reflects its SaaS business model. It
delivers its services mostly through channel partners into contact
centres who are charged primarily on a recurring licence basis. The
terms of the sales contracts generally allow for automatic renewal
of the licences for a further 12 month period at the end of their
initial term. Renewal and retention rates continue to be extremely
high again exceeding 95%+.
With the strong sales performance of the first half of the year
the Group finished the period with a TACV of GBP8.28 million (2019:
GBP5.21 million) providing the Group with high visibility of
revenue for the remainder of the financial year.
Administrative expenses
Total administrative expenses were GBP4.47 million (2019:
GBP3.65 million), an increase of 22%.
The Group has continued to take on new headcount to support our
growth with the number of employees increasing from 58 as at the 30
June 2020 to 65 at the period end.
Personnel costs charged to the Comprehensive Income Statement
(including commission, bonuses and travel and subsistence expenses)
were GBP2.95 million (2019: GBP2.66 million), of which GBP0.39
million (2019: GBP0.46 million) was capitalised as Software
Development costs. Personnel costs make up 73% (2019: 77%) of the
administrative costs of the business.
The expense of running our AWS platform and associated software
was GBP0.38 million in the period (2019: GBP0.22 million). This
expense includes the platforms used for developing, staging and
testing of our solutions, as well as the cost of running the six
production instances active today.
Included in the administrative expenses is a charge for exchange
movements of GBP0.37 million which has been caused by the
strengthening of the US dollar from $1.2540 as at 30 June 2020 to
$1.3497 as at 31 December 2020 (2019: GBP0.16 million) and a
depreciation/amortisation charge of GBP0.35 million (2019: GBP0.25
million)
Adjusted operating loss
The regional operating results and underlying performance
analysis used within the Group are shown in Notes 4 & 5 below.
Adjusted operating losses, excluding the changes resulting of the
Group's share option scheme and any exchange gains and losses
charged to the Income Statement, improved 18 % to a loss of GBP1.71
million (2019: GBP2.09 million).
Adjusted EBITDA losses improved by 26% to a loss of GBP1.36
million (2019: GBP1.84 million). Of particular note is that the
EMEA operation, the Group's largest division, reported a much
reduced Adjusted EBITDA loss of GBP0.17 million (2019 GBP0.46
million) as it continues to move towards profitability.
Key financial performance indicators
The directors use several Key Financial Performance Indicators
(KPIs) to monitor the performance of the Group,
its subsidiaries and targets. The principal KPIs are as follows:
As at 31 As at 30 As at 31
Dec 2020 Jun 2020 Dec 2019
1. Revenue in six month period GBP3.19 GBP2.36 GBP2.04
million million million
---------- ---------- ----------
2. Gross Margin % over six month
period 72.8% 70.7% 67.4%
---------- ---------- ----------
3. Signed ACV in six month period GBP1.68 GBP1.45 GBP1.17
million million million
---------- ---------- ----------
4. Contracted TACV(1) deployed GBP5.89 GBP4.04 GBP3.46
and live million million million
---------- ---------- ----------
5. Contracted TACV in deployment GBP2.12 GBP2.19 GBP1.37
million million million
---------- ---------- ----------
6. Contracted TACV - projects GBP0.27 GBP0.52 GBP0.38
on hold million million million
---------- ---------- ----------
7. Total Contracted TACV GBP8.28 GBP6.75 GBP5.21
million million million
---------- ---------- ----------
8. 12 month TTGL (3) 16 weeks 19 weeks 16 weeks
---------- ---------- ----------
9. Cash facilities available (2) GBP4.23 GBP5.55 GBP2.73
million million million
---------- ---------- ----------
10. Deferred Income GBP6.36 GBP4.53 GBP4.00
million million million
---------- ---------- ----------
11. Ratio Personnel cost to administrative
expenses 73% 77% 77%
---------- ---------- ----------
12. FTE Headcount (excluding non-executive
directors) 65 58 55
---------- ---------- ----------
(1) TACV is the total annual recurring revenue of all signed
contracts, whether invoiced and included in deferred revenue or
still to be deployed and/or not yet invoiced
(2) Cash balance plus undrawn debt facilities
(3) Total delivery time for all AWS contracts signed in the last
12 months from the date of signature through to the date of go
live. The week count includes periods where the contracts were on
hold.
Capital expenditure
As required by IAS 38, we have capitalised a further GBP0.39
million (2019: GBP0.46 million) in software development expenditure
as we continue to invest in our cloud platform and introduce new
features and products. Over the coming years we are expecting the
rate of capitalisation to diminish as the rate of enhancements to
the core platform functionality declines.
The Group acquired GBP0.08 million of intangible assets (2019
GBP0.07 million) and bought a negligible amount of new computer
equipment in the period, mainly equipment for new starters. Being a
cloud-based business, the Group has little demand for hardware.
Professional Services Fees
During the financial year the Group generated GBP0.79 million
(2019 GBP0.65 million) of set-up and professional services
contracts, in conjunction with the new ACV contracts reported
above. Nearly all of these contracts are invoiced on signature and
form an important part of the Group's cash generation. The contract
amounts will be deferred and released to the Income Statement over
the length of the related contract, in accordance with IFRS 15.
Trade receivables
Trade receivables grew to GBP2.00 million (30 June 2020: GBP1.26
million). The level of receivables reflects both debtors generated
from new business sales outstanding at the end of the period as
well as debtors relating to invoices raised on a monthly basis. As
at the period end GBP1.08 million (30 June 2020: GBP0.62 million)
of the outstanding debtors related to newly signed contracts.
As a result of the pandemic, we have seen some new challenges in
collecting debts due to us. This is primarily due to our customer
accounts teams moving to a working from home basis and a higher
focus by them on cash retention. However, I am pleased to say that
we have seen minimal bad debts and, overall, 98% of our debtors
are less than 120 days old. Therefore, our cash flow has not been unduly affected.
Cashflow and liquidity
Cash as at the period end was GBP4.23 million (30 June 2020:
GBP4.30 million).
Net cash as at the period end less Group debt facilities, was
GBP2.11 million (30 June 2020: GBP3.03 million)
In September 2020, the Group drew down the final GBP1.25 million
from its loan facilities. During the period it repaid GBP0.40
million of the facility under its monthly obligations. It also
received GBP0.03 million from the exercise of some options by an
employee.
Excluding these additional sources of net cash, the Group cash
outflow was GBP0.95 million against the comparable 2019 figure of
GBP1.51 million. The net cash outflow is far lower than the
reported adjusted operating loss of GBP2.15 million reflecting the
advance billing nature of the Group's SaaS business model, which
included a payment of $1.13 million for years 2 and 3 of multi-year
prepayment arrangement with largest customer in US which was signed
in FY20 and delivered early in this financial period.
As at the end of February 2021, cash has improved to GBP4.62
million and net cash less the Group debt facilities was GBP2.69
million.
William Good
Chief Financial Officer
8 March 2021
Consolidated statement of comprehensive income
for the six months ended 31 December 2020
Six months Six months Twelve months
ended 31 ended 31 December ended 30
December 2019 June
2020 2020
------------------------------------------
GBP'000 GBP'000 GBP'000
------------------------------------------
(unaudited) (unaudited) (audited)
------------------------------------------ -------------- --------------------- -------------
Revenue 3,190 2,041 4,396
Cost of sales (869) (664) (1,353)
------------------------------------------ -------------- --------------------- -------------
Gross profit 2,321 1,377 3,043
Administrative expenses (4,467) (3,653) (7,254)
------------------------------------------ -------------- --------------------- -------------
Loss from operating activities (2,146) (2,276) (4,211)
Adjusted loss from operating activities (2,075) (2,252) (4,103)
Expenses relating to share options (71) (24) (108)
------------------------------------------ -------------- --------------------- -------------
Loss from operating activities (2,146) (2,276) (4,211)
------------------------------------------ -------------- --------------------- -------------
Bank charges and interest payable (108) (49) (140)
Interest receivable 0 1 1
------------------------------------------ -------------- --------------------- -------------
Loss before taxation (2,254) (2,324) (4,350)
Taxation 153 221 221
------------------------------------------ -------------- --------------------- -------------
Total comprehensive loss for the period (2,101) (2,103) (4,129)
------------------------------------------ -------------- --------------------- -------------
Other comprehensive expense: items
that will be classified subsequently
to profit and loss
------------------------------------------ -------------- --------------------- -------------
Foreign exchange translation differences 434 156 (49)
------------------------------------------ -------------- --------------------- -------------
Total comprehensive loss for the period (1,667) (1,947) (4,178)
========================================== ============== ===================== =============
Loss per share expressed in pence
------------------------------------------ -------------- --------------------- -------------
Basic and diluted (3.54) (4.94) (8.84)
------------------------------------------ -------------- --------------------- -------------
Consolidated statement of financial position
as at 31 December 2020
31 December 31 December 30 June
2020 2019 2020
GBP'000 GBP'000 GBP'000
(unaudited) (unaudited) (audited)
--------------------------------------------- ------------ ---------------- --------------
Assets
Non-current assets
Plant & equipment 82 102 103
Intangible assets 2,296 1,605 2,139
Trade & other receivables 560 216 368
--------------------------------------------- ------------ ---------------- --------------
Non-current assets 2,938 1,923 2,610
--------------------------------------------- ------------ ---------------- --------------
Current assets
Trade and other receivables 2,944 2,754 2,343
Cash and cash equivalents 4,228 1,478 4,301
--------------------------------------------- ------------ ---------------- --------------
Current assets 7,172 4,232 6,644
--------------------------------------------- ------------ ---------------- --------------
Total assets 10,110 6,155 9,254
Liabilities
Current liabilities
Trade and other payables (1,278) (1,159) (1,520)
Deferred Income (4,549) (3,285) (3,674)
Other interest-bearing loans and borrowings (1,156) (545) (545)
--------------------------------------------- ------------ ---------------- --------------
Current liabilities (6,983) (4,989) (5,739)
--------------------------------------------- ------------ ---------------- --------------
Non-current liabilities
Other Payables - - (16)
Deferred Income (1,814) (719) (859)
Long term borrowings (964) (955) (728)
Non-current liabilities (2,778) (1,674) (1,603)
--------------------------------------------- ------------ ---------------- --------------
Total liabilities (9,761) (6,663) (7,342)
--------------------------------------------- ------------ ---------------- --------------
Net assets/(liabilities) 349 (508) 1,912
--------------------------------------------- ------------ ---------------- --------------
Shareholders' equity
Share capital 595 427 594
Share premium 9,050 4,618 9,018
Other reserve 360 205 289
Currency reserve 247 18 (187)
Profit & loss account (9,903) (5,776) (7,802)
Total shareholders' equity 349 (508) 1,912
--------------------------------------------- ------------ ---------------- --------------
Deferred income has been disclosed separately in these interim
statements. This treatment differs from that in the audited
accounts for the year ending 30 June 2020.
Consolidated interim statement of changes in equity
as at 31 December 2020 (unaudited)
Total shareholders'
Share Share Other Retained Currency equity
capital premium reserve earnings reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 July 2019 427 4,618 181 (3,673) (138) 1,415
---------------------------- ---------- ------------ ----------- ------------ ----------- ---------------------
Share based payment charge - - 24 - - 24
Dividend paid - - - - - -
---------------------------- ---------- ------------ ----------- ------------ ----------- ---------------------
Transactions with owners - - 24 - - 24
Retranslation of foreign
assets - - - - 156 156
Loss for the period - - - (2,103) - (2,103)
---------------------------- ---------- ------------ ----------- ------------ ----------- ---------------------
Total comprehensive loss - - - (2,103) 156 (1,947)
Balance as at 31 December
2019 427 4,618 205 (5,776) 18 (508)
---------------------------- ---------- ------------ ----------- ------------ ----------- ---------------------
Balance as at 1 January
2020 427 4,618 205 (5,776) 18 (508)
---------------------------- ---------- ------------ ----------- ------------ ----------- ---------------------
Share based payment charge - - 84 - - 84
New shares issued net
of costs 167 4,400 - - - 4,567
Dividend paid - - - - - -
---------------------------- ---------- ------------ ----------- ------------ ----------- ---------------------
Transactions with owners 167 4,400 84 - - 4,651
Retranslation of foreign
assets - - - - (205) (205)
Loss for the period - - - (2,026) - (2,026)
---------------------------- ---------- ------------ ----------- ------------ ----------- ---------------------
Total comprehensive loss - - - (2,026) (205) (2,231)
Balance at 30 June 2020 594 9,018 289 (7,802) (187) 1,912
---------------------------- ---------- ------------ ----------- ------------ ----------- ---------------------
Balance at 1 July 2020 594 9,018 289 (7,802) (187) 1,912
---------------------------- ---------- ------------ ----------- ------------ ----------- ---------------------
Share based payment charge - - 71 - - 71
New shares issued net
of costs 1 32 - - - 33
Dividend paid - - - - - -
---------------------------- ---------- ------------ ----------- ------------ ----------- ---------------------
Transactions with owners 1 32 71 - - 104
Retranslation of foreign
assets - - - - 434 434
Loss for the period - - - (2,101) - (2,101)
---------------------------- ---------- ------------ ----------- ------------ ----------- ---------------------
Total comprehensive loss - - - (2,101) 434 (1,667)
Balance at 31 December
2020 595 9,050 360 (9,903) 247 349
---------------------------- ---------- ------------ ----------- ------------ ----------- ---------------------
Consolidated statement of cash flows
for the six months ended 31 December 2020
Six months Six months Twelve months
ended 31 December ended 31 ended 30
2020 December June
2019 2020
GBP'000 GBP'000 GBP'000
(unaudited) (unaudited) (audited)
-------------------------------------------- ---------------------- ------------- -------------
Cash flows from operating activities
Loss after taxation (2,101) (2,103) (4,129)
Adjustments for:
Depreciation of equipment and fixtures 35 44 82
Amortisation of intangible assets 40 14 29
Amortisation of capitalised development 271 191 433
Interest income - (1) (1)
Interest expense 98 41 126
Exchange differences 433 156 (49)
Income taxes (153) (221) (221)
Share based payments 71 24 108
Increase in trade & other receivables (793) (951) (713)
Increase in trade &other payables 1,589 1,682 2,575
-------------------------------------------- ---------------------- ------------- -------------
Cash used in operating activities (510) (1,124) (1,760)
Dividend paid - - -
Income taxes received 153 221 221
Interest paid (98) (41) (126)
Net cash used in operating activities (455) (944) (1,665)
------------- -------------
Cash flows from investing activities
Purchase of property, plant and equipment (13) (23) (33)
Purchase of intangible assets (75) (66) (296)
Development expenditure capitalised (394) (465) (1,004)
Interest received - 1 1
Net cash used in investing activities (482) (553) (1,332)
-------------------------------------------- ---------------------- ------------- -------------
Cash flows from financing activities
Proceeds from borrowings 1,250 1,500 1,500
Repayment of borrowings (403) - (227)
Repayment of lease liabilities (16) (17) (35)
Issue of shares - net of cost of issue 33 - 4,568
Net cash generated in financing activities 864 1,483 5,806
-------------------------------------------- ---------------------- ------------- -------------
Net (decrease)/increase in cash (73) (14) 2,809
Cash and cash equivalents at the start
of the period 4,301 1,492 1,492
-------------------------------------------- ---------------------- ------------- -------------
Net (decrease)/increase in cash (73) (14) 2,809
-------------------------------------------- ---------------------- ------------- -------------
Cash and cash equivalents at the end
of the period 4,228 1,478 4,301
-------------------------------------------- ---------------------- ------------- -------------
Notes to the interim financial statements for the six months
ended 31 December 2020
1. Nature of activities and general information
PCI-PAL PLC is the Group's ultimate parent company and is a
public limited company domiciled in England and Wales (registration
number 3869545). The company's registered office is Unit 7, Gamma
Terrace, Ransomes Europark, Ipswich, Suffolk IP3 9FF. The Company's
ordinary shares are traded on the AIM Market of the London Stock
Exchange. The Group's consolidated interim financial statements
(the "interim financial statements") for the period ended 31
December 2020 comprise the Company and its subsidiaries (the
"Group").
The Company operates principally as a holding company. The main
subsidiaries are engaged in the provision of services that enable
customers to securely take card payments over the phone to de-risk
their business activities from the threat of data loss and
cybercrime. PCI Pal is a cloud-based solution.
The interim financial statements are presented in pounds
sterling (GBP000), which is also the functional currency of the
parent company.
2. Basis of preparation
These consolidated interim financial statements have been
prepared in accordance with International Financial Reporting
Standards ("IFRS") as adopted by the European Union and on a
historical basis, using the accounting policies which are
consistent with those set out in the Group's annual report and
accounts for the year ended 30 June 2020.
The unaudited interim financial information for the period ended
31 December 2020 does not constitute statutory accounts within the
meaning of Section 435 of the Companies Act 2006. The comparative
figures for the year ended 30 June 2020 are extracted from the
statutory financial statements which have been filed with the
Registrar of Companies and contain an unqualified audit report and
did not contain statements under Section 498 to 502 of the
Companies Act 2006.
3. Dividends
Given the strategic growth plans of the Group it is not proposed
to declare a dividend for the period (2020: nil pence)
4. Analysis of results
The first half performance of the Group can be further analysed
as follows:
H1 FY H1 FY H1 FY H1 FY H1 FY H1 FY H1 FY H1 FY
2021 2021 2021 2021 2020 2020 2020 2020
EMEA North Central Total EMEA North Central Total
America America
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
Revenue
Recurring Fees 2,025 728 - 2,753 1,633 100 - 1,733
Set up and
Professional
Services Fees
(1) 307 109 - 416 242 46 - 288
Other Sales 21 - - 21 20 - - 20
Total 2,353 837 - 3,190 1,895 146 - 2,041
Gross Profit 1,575 746 - 2,321 1,241 135 - 1,376
Margin % 66.9% 89.1% 72.8% 65.5% 92.4% 67.4%
Administrative
Expenses (2,068) (1,847) (552) (4,467) (1,959) (1,327) (366) (3,652)
Loss from Operating
Activities (493) (1,101) (552) (2,146) (718) (1,192) (366) (2,276)
Bank charges
and Interest
payable (13) (3) (92) (108) (8) (4) (37) (49)
Finance Income - - - - - - 1 1
Loss before
Taxation (506) (1,104) (644) (2,254) (726) (1,196) (402) (2,324)
(1) Set up and Professional Services Fees represents the
amortisation of set up fees and other professional services income
deferred under IFRS 15
5. Underlying financial performance analysis
The Group uses the following internal metric to calculate
Adjusted EBITDA:
H1 FY H1 FY H1 FY H1 FY H1 FY H1 FY H1 FY H1 FY
2021 2021 2021 2021 2020 2020 2020 2020
EMEA North Central Total EMEA North Central Total
America America
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
Loss before
Taxation (506) (1,104) (644) (2,254) (726) (1,196) (402) (2,324)
Adjust for:
Expenses relating
to share options - - 71 71 - - 24 24
Exchange Loss/(Gain) (7) 373 - 366 14 152 - 166
Bank charges
and Interest
Payable 13 3 92 108 8 4 37 49
Finance Income - - - - - - (1) (1)
Adjusted Loss
from Operating
Activities (500) (728) (481) (1,709) (704) (1,040) (342) (2,086)
Depreciation
& Amortisation 326 20 - 346 245 4 - 249
Adjusted EBITDA (174) (708) (481) (1,363) (459) (1,036) (342) (1,837)
6. Earnings per share
The basic and diluted earnings per share are calculated on the
following profit and number of shares. Earnings for the calculation
of earnings per share is the net profit attributable to equity
holders of the parent.
Six months Six months Twelve months
ended 31 December ended 31 December ended 30 June
2020 2019 2020
GBP000 GBP000 GBP000
----------------------------- ----------------------------- ----------------------------- -------------------------
Earnings for the purposes
of basic
and diluted earnings per
share
Loss after taxation (2,101) (2,103) (4,129)
Denominator '000 '000 '000
----------------------------- ----------------------------- ----------------------------- -------------------------
Weighted average number
of shares
in issue in the period 59,321 42,554 46,721
Dilutive effect of
potential shares
and share options 5,384 5,016 4,966
----------------------------- ----------------------------- ----------------------------- -------------------------
Number of shares used in
calculating
diluted earnings per
share 64,705 47,570 51,687
----------------------------- ----------------------------- ----------------------------- -------------------------
Basic and diluted
earnings per share
expressed in pence (3.54) (4.94) (8.84)
7. Subsequent events to 31 December 2020
There are no subsequent events to disclose.
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