TIDMRCI
RNS Number : 9310S
RapidCloud International PLC
30 September 2014
30 September 2014
RapidCloud International plc
("RapidCloud", the "Company" or the "Group")
Interim results for the six months ended 30 June 2014
RapidCloud International (AIM: RCI), the Southeast Asia based
software solutions provider offering subscription services through
all segments of cloud computing, announces its half year results
for the six months ended 30 June 2014.
Financial highlights
-- Revenue growth of 26% to RM 6.1m (H1 2013: RM 4.8m)
-- Recurring revenues 48.9% of total revenues (H1 2013: 33%)
-- Gross profit increase of 10% to RM 3.9m (H1 2013: RM 3.5m)
-- Gross profit margin 64%* (H1 2013: 73%)
-- Operating profit RM 1.2m** (H1 2013: RM 1.9m)
-- Profit after tax of RM 1.1m (H1 2013: RM 1.9m)
-- Cash at 30 June 2014 of RM 6.0m (c. GBP1.2m) (H1 2013: RM 8.3m)
-- Trade receivables reduced to RM 4.7m from RM 6.1m at 31 December 2013 (H1 2013: RM 2.5m)
*Gross profit margin decreased primarily as the result of
increase in staff numbers to 87 at 30 June 2014 from 58 at 31
December 2013
**includes ongoing costs associated with being a listed entity
and not present in H1 2013's numbers of RM 0.6m and additional
depreciation and amortisation costs of RM 0.3m.
Operational highlights
-- Established Indonesian subsidiary PT. RapidCloud Indonesia
-- Increase in sales and technical staff numbers to 87 (31 Dec 2013: 58)
-- Launch of several in-house developed products including
RapidAPI, RapidSITE, RapidCRM & RapidSearch
Post period-end highlights
-- Completed an earnings enhancing acquisition of Exxelnet
Solutions Pte. Ltd ("Exxelnet"), a Singaporean web development firm
for RM 5m (c.GBP0.95m)
-- Equity fundraising of RM 3m (c. GBP0.6m)
-- Awarded prestigious Emerging Business Excellence Award at Sin
Chew Business Excellence Awards 2014
-- Revenues of RM 2.6m combined for July and August 2014 showing
positive revenue growth post period-end
-- Total customers grew to over 40,000 (including 2,000 from acquisition of Exxelnet)
Raymond Chee, Chief Executive of RapidCloud, commented: "The
first half of the year has been a period of considerable investment
during which time we continued to develop our product offerings,
greatly increased our staff numbers, expanded our geographic reach,
enhanced our infrastructure and improved brand awareness through
additional advertising and marketing campaigns.
Following the year end we have continued to invest primarily
through the earnings enhancing acquisition of Exxelnet, further
demonstrating our commitment to expanding into new geographies. As
one of the world's major commercial hubs, Singapore represents a
potentially lucrative and strategically important territory into
which we can now fast track the launch of our products and
services.
The investments we have made during 2014 leave us better
positioned as a Company and we are confident of accelerated growth
going forward.
For further information, please visit www.rapidcloudasia.com or
contact:
RapidCloud International investorqueries@rapidcloudasia.com
Plc
Raymond Chee, Managing
Director
David Cotterell, Chairman
--------------------------- ----------------------------------------------------------------------
Allenby Capital, Nominated Tel: +44 (0)20 3328 5656
Adviser and Broker
Alex Price
Jeremy Porter
Chris Crawford
--------------------------- ----------------------------------------------------------------------
Walbrook, Financial PR Tel: 44 (0)20 7933 8792
and IR rapidcloud@walbrookpr.com
Bob Huxford
Guy McDougall
--------------------------- ----------------------------------------------------------------------
Chairman's statement
As stated at the time of RapidCloud's IPO, our strategy has been
to invest in the Company in order to increase our scale and
geographic coverage as well as to accelerate product development.
We have continued to deliver against that goal during the first
half of 2014.
We have committed significant investment into the business, both
during and following the period under review, and this has seen our
business expand into the new geographies of Indonesia and
Singapore, an increase in the number of technical and sales staff
within the Group and the evolution of our offerings leading to new
revenue streams being developed.
During the period we established offices in Jakarta, Indonesia,
establishing the subsidiary PT RapidCloud Indonesia. This business
is performing well and has already signed a number of contracts
which we expect to recognise in the second half of 2014. In
addition, we expanded into Singapore post-period end through the
earnings enhancing acquisition of Exxelnet Solutions Pte. Ltd and
this has already provided us with numerous cross-selling
opportunities.
Both our Indonesian and Singaporean acquisitions are in
strategically important territories, Indonesia being the largest
economy in Southeast Asia with a population of 240 million and
Singapore being the largest financial centre in Southeast Asia and
fourth largest in the world. Singapore is also home to the Asian
headquarters of a number of global blue chip organisations.
Our sales and technical teams grew from 58 staff members at 31
December 2013 to 87 at 30 June 2014 demonstrating our commitment to
increasing our capabilities in these two areas of the Company. The
Exxelnet Solutions acquisition also brought with it a talented team
of software engineers, particularly in the field of web search
engines including a number of former Google employees.
Investment was also made into infrastructure during the period
having established new headquarters in Kuala Lumpur giving us
significant capacity for further expansion. The new headquarters
include a 24/7 network operation centre for our technical team to
monitor network and server performance as well as training
facilities for clients to aid in the handover process for the
increasingly extensive and complex projects we are now able to
deliver.
Finally, we increased investment into advertising and marketing
in order to increase awareness of RapidCloud's brands and products
and this is resulting in a positive effect on our pipeline of new
business.
We have a well-balanced business between enterprise and hosting
revenue streams with growth in enterprise sales resulting from the
numerous new products introduced during the period. This is helping
to underpin our target of recurring revenue accounting for over 50%
of total revenue.
We would like to thank all of our employees and shareholders for
their continued support and contribution to our successful growth
during the period under review and looking forward we remain
confident of further success in the second half of 2014.
David Cotterell
Chairman
Chief Executive's review
Financial performance
Our core business continued to perform well during the period,
recording revenue growth of 26% to RM 6.1m (H1 2013: RM 4.8m). This
was particularly pleasing given our focus being firmly on
investment during the period. Typically revenues are weighted
toward the second half and this is likely to be accentuated further
in 2014 as a result of the Exxelnet acquisition.
Gross profit increased 10% to RM 3.9m (H1 2013: RM 3.5m) with
gross profit margin decreasing to 64% (H1 2013: 73%). The primary
reason for the increased cost of sales was the investment in
technical and sales staff. As at 30 June 2013 technical and sales
employees totalled 47, at 31 December 2013 they totalled 58 and at
30 June 2014 the total number was 87, inclusive of the 3 staff
members in our Indonesian operations. There is a period while new
sales staff are being trained where they represent a cost to the
business while not generating revenues. With our new sales staff,
both from organic growth and through the acquisition of Exxelnet,
now fully integrated into the business we expect the new sales
staff to contribute positively in second half of 2014.
Operating profit of RM1.2m decreased by 39% to RM 1.2m (H1 2013:
RM 1.9m). The decline resulted from three elements, including over
RM 0.7m of amortisation and depreciation as the result of increased
investment into product and infrastructure, RM 0.4m of additional
investment into advertising and marketing, and RM 0.6m of ongoing
costs associated with RapidCloud now being a listed entity that
were not present in the comparative period. With our ongoing MSC
status (a government tax scheme designed to promote adoption of IT
technology in Malaysia) giving tax exemption on profits generated
in Malaysia this translated to a profit after tax of RM 1.1m (H1
2013: RM 1.9m).
The cash position remained steady during the period with RM 6.0m
at 30 June 2014 (c. GBP1.2m) against RM 6.2m at 31 December
2013.
A placing raised GBP600,000 (before expenses) in July of this
year. The net proceeds of the placing were used to fund the SGD1.0
million (c. GBP0.475 million) cash element of the Exxelnet
acquisition, the remainder being used to provide additional working
capital.
Trade receivables reduced to RM 4.7m (31 December 2013: RM
6.1m)
Operational developments
During the first half of the year we continued to invest into
accelerating our global expansion, increasing sales capabilities
and developing our enterprise offerings.
Our technical staff numbers grew from 31 at 31 December 2013 to
40 at 30 June 2014. As the result of this investment into our
technical resources we are able to rapidly develop and deploy an
increasing number of enterprise offerings for our clients of ever
greater complexity. Through modular development methods we are then
able to roll these solutions out to our extended client base.
Sales staff numbers grew from 27 at 31 December 2013 to 47 at 30
June 2014. This significant growth in sales staff, combined with
and our newly integrated approach to global sales, means the
roll-out of these products can be effected quickly and efficiently
across all of the growing number of geographies in which we are
present leading to numerous cross-selling opportunities.
Our geographic expansion has also continued apace during the
period including the establishment of operations in Indonesia, the
fourth most populous country in the world and, post-period end, the
acquisition of Exxelnet, giving us a presence in Singapore, the
fourth largest financial centre in the world. The following gives a
breakdown of some of the developments during 2014 in the core
geographies in which we are present including contract wins for our
enterprise offerings:
Malaysia
Post-period end we secured a contract with a leading Malaysian
airline to provide cargo management, tracking and reporting systems
with comprehensive Business Intelligence (BI) analysis. The initial
contract is for a six figure sum in RM and will be recognised in
the current financial year. We have also won a contract to provide
public and private scalable cloud infrastructure services to the
business registrar of one of the countries in Southeast Asia, again
for an RM six figure sum which will be recognised in the current
financial year. This is further evidence of our growing presence in
the public sector and a strong endorsement of the quality of our
offerings.
In addition, our Malaysia operations, Emerge Systems (M) Sdn.
Bhd., was recently week awarded the prestigious Sin Chew Business
Excellence Award 2014 under the category of Emerging Business
Excellence Award. Sin Chew is the largest Chinese newspaper in
Malaysia.
Singapore
In August RapidCloud acquired Exxelnet, a Singaporean web
development, hosting and search-engine optimisation firm, for c.
GBP0.95 million. The acquisition is a close strategic fit with
RapidCloud providing the Company with a profitable business in the
lucrative territory of Singapore, the fourth largest financial
centre in the world. Exxelnet also brought with it a highly skilled
workforce and a solid customer base. It is RapidCloud's intention
to cross-sell its existing product portfolio into this customer
base and to sell Exxelnet's solutions into RapidCloud's existing
38,000 customers.
Exxelnet has over 2,000 customers and generated revenues of
SGD1.5 million (GBP0.7 million) and PBT of SGD0.33 million (GBP0.16
million) for the year ended 31 December 2013 (unaudited). Alongside
numerous operational synergies, and in line with the Company's
strategy of geographic expansion, the acquisition has enabled the
fast track the launch of RapidCloud's existing services into
Singapore.
Already earnings enhancing to the enlarged Group, Exxelnet has
performed strongly since acquisition. New enterprise deals in
Singapore include a contract to provide an e-commerce portal
complete with membership management, loyalty programme, digital
marketing and business intelligence modules worth approximately RM
0.25m. Furthermore, Exxelnet has signed a contract to provide a
customised customer relationship management system complete with an
e-mail marketing system and business intelligence capabilities
worth approximately RM 0.27m.
With the profile of Exxelnet being similar to that of
RapidCloud, the successful integration of the Singapore business is
progressing rapidly. The integration of Exxelnet's Digital
Marketing solutions into the RapidCloud business is expected to be
launched Group-wide in Q4 2014.
Indonesia
Establishing a presence in Indonesia, Southeast Asia's largest
economy, was a stated objective at the time of our IPO and
following the successful completion of extensive regulatory
procedures we incorporated PT. RapidCloud Indonesia as a wholly
owned subsidiary of RapidCloud during H1 2014. We have established
offices in Jakarta and have appointed a country manager and five
sales executives.
Since this time our Indonesian business has performed very well
and has already successfully closed a number of deals. In addition,
we have recruited several channel partners and this process was
accelerated following our successful hosting of a recent enterprise
product seminar. Our recent acquisition of Exxelnet is also
expected to accelerate our expansion in Indonesia.
Thailand
In Thailand we recently signed a strategic marketing partnership
with KPV Group, one of the biggest privately-held conglomerates in
Thailand with over 9,000 employees. We anticipate that this
contract will contribute to the revenue of the Bangkok office
substantially from the beginning of Q1 2015.
The Philippines
We have established a back-end search engine optimisation team
and search-engine marketing team in The Philippines in order to
support the Group. We also continued to add to our R&D
resources during the period with R&D staff in the Philippines
numbering 17 at 30 June 2014 up from 12 at 31 December 2014.
Outlook
The first half of the year has been a period of considerable
investment during which time we further developed our offerings,
greatly increased our staff numbers, expanded our geographic reach,
enhanced our infrastructure and improved brand awareness through
additional advertising and marketing campaigns.
Following the year end we continued to invest through the
earnings enhancing acquisition of Exxelnet, further demonstrating
our commitment to expanding into new geographies. As one of the
world's major commercial hubs, Singapore represents a potentially
lucrative and strategically important territory into which we can
now fast track the launch of our products and services.
The investments we have made during 2014 leave us better
positioned as a Company and we are confident of accelerated growth
going forward.
Consolidated Interim Statement of Comprehensive Income
for the six months ended 30 June 2014
RCAB Group
Notes (Unaudited) (Unaudited) (Audited)
Six months Six months Year ended
to to 31 December 2013
30 June 2014 30 June 2013 RM'000
RM'000 RM'000
------------- ------------- -----------------
Continuing operations
Revenue 2 6,088 4,841 11,341
Cost of sales (2,188) (1,297) (2,879)
------------- ------------- -----------------
Gross profit 3,900 3,544 8,462
Other operating income 48 61 446
Administrative expenses (2,786) (1,678) (3,900)
------------- ------------- -----------------
Operating profit 1,162 1,927 5,008
Finance costs (10) (6) (22)
Costs relating to the Admission
to AIM Market - - (1,770)
Share of profit/(losses) from
associate 4 (18) (54)
------------- ------------- -----------------
Profit before tax 1,156 1,903 3,162
Tax expense (27) (25) (634)
------------- ------------- -----------------
Profit for the period 1,129 1,878 2,528
Other comprehensive income - -
Total comprehensive income 1,129 1,878 2,528
============= ============= =================
Profit attributable to:
Equity owners of the parent
company 1,129 1,878 2,528
============= ============= =================
Total comprehensive income attributable
to:
Equity holders of the parent
company 1,129 1,878 2,528
============= ============= =================
Earnings per share
From continuing operations
Basic and diluted (Sen) 3 6.50 10.81 14.55
------------- ------------- -----------------
Consolidated Interim Statement of Financial Position
as at 30 June 2014
RCAB Group
Notes (Unaudited) (Unaudited) (Audited)
As at As at As at
30 June 2014 30 June 2013 31 December 2013
RM'000 RM'000 RM'000
------------- ------------- -----------------
ASSETS
Non-current assets
Property, plant and equipment 4 4,314 820 3,179
Software development assets 5 2,412 2,092 2,218
Investment in associate
companies 1,076 1,107 1,071
------------- ------------- -----------------
7,802 4,019 6,468
------------- ------------- -----------------
Current assets
Trade and other receivables 6 5,895 2,521 6,508
Amounts owed by associates 2,143 425 1,583
Cash and cash equivalents 6,018 8,315 6,238
------------- ------------- -----------------
14,056 11,261 14,329
------------- ------------- -----------------
Total assets 21,858 15,280 20,797
------------- ------------- -----------------
LIABILITIES
Current liabilities
Trade and other payables 915 1,311 869
Hire purchase liabilities 38 45 79
Taxation payables 747 233 821
------------- ------------- -----------------
1,700 1,589 1,769
------------- ------------- -----------------
NON-CURRENT LIABILITIES
Hire purchase liabilities 613 667 612
Deferred tax liability 73 14 73
Convertible preference shares 7 - 3,100 -
------------- ------------- -----------------
686 3,781 685
------------- ------------- -----------------
Total liabilities 2,386 5,370 2,454
------------- ------------- -----------------
Net assets 19,472 9,910 18,343
============= ============= =================
EQUITY
Capital and reserves attributable
to equity holders
Share capital 21,643 13,860 21,643
Merger reserve (13,260) (13,260) (13,260)
Retained earnings 11,089 9,310 9,960
------------- ------------- -----------------
Total equity and reserves 19,472 9,910 18,343
============= ============= =================
Consolidated Interim Statement of Cash Flows
Six months ended 30 June 2014
RCAB Group
Notes (Unaudited) (Unaudited) (Audited)
Six months Six months Year ended
to to 31 December
30 June 2014 30 June 2013 2013
RM'000 RM'000 RM'000
------------- ------------- ------------
Cash flow from operating activities
Profit before tax 1,156 1,903 3,162
Adjustments for non-cash items:
Amortisation 5 426 308 703
Depreciation 4 290 86 271
Gain on disposal of equipment (1) - (78)
Impairment of trade receivables 6 - - 130
Foreign exchange (gain)/loss 8 - (187)
Share of (profit)/loss from associate
companies (4) 18 54
Finance income (34) (34) (82)
Finance costs 10 6 22
------------- ------------- ------------
Operating profit before working
capital changes 1,851 2,287 3,995
Decrease /(Increase) in trade and
other receivables 613 1,325 (2,662)
Increase/(Decrease) in trade and
other payables 46 145 (307)
------------- ------------- ------------
Cash generated from operations 2,510 3,757 1,026
Interest paid (10) (6) (22)
Tax paid (98) (169) (143)
------------- ------------- ------------
Net cash from operating activities 2,402 3,582 861
------------- ------------- ------------
Cash flows from investing activities
Purchase of property, plant and
equipment (1,427) (85) (2,617)
Sales of property, plant and equipment 2 - 448
Software development expenditure 5 (620) (548) (1,069)
Advances to associates (560) (98) (1,256)
Interest received 34 34 82
------------- ------------- ------------
Net cash used in investing activities (2,571) (697) (4,412)
------------- ------------- ------------
Cash flows from financing activities
Dividends paid - (500) (500)
Repayment of hire purchase liabilities (51) (32) (434)
Proceeds on issue of shares and
admission to AIM - - 4,761
Proceeds on issue of convertible
preference shares 7 - 3,100 3,100
------------- ------------- ------------
Net cash from/(used in) financing
activities (51) 2,568 6,927
------------- ------------- ------------
Net increase in cash and cash equivalents (220) 5,453 3,376
------------- ------------- ------------
Cash and cash equivalents at the
beginning of
the period 6,238 2,862 2,862
------------- ------------- ------------
Cash and cash equivalents at the
end of the period 6,018 8,315 6,238
============= ============= ============
Consolidated Interim Statement of Changes in Equity
Six months ended 30 June 2014
Share Share Merger Retained Total
capital premium reserve earnings equity
RM'000 RM'000 RM'000 RM'000 RM'000
Balance on 1 January 2013
RCAB Group 13,860 - (13,260) 7,432 8,032
Total comprehensive income
Profit for the period - - - 1,878 1,878
Balance at 30 June 2013 13,860 - (13,260) 9,310 9,910
-------- -------- -------- --------- -------
Transaction with owners, recorded
directly in equity
Conversion of preference shares 1,173 1,928 - - 3,101
Shares issued and adjustment
for business combination 1,928 (1,928) - - -
RCI Group
Following business combination 16,961 - (13,260) 9,310 13,011
Issue of shares on admission
to AIM 5,510 - - - 5,510
Issue costs (828) - - - (828)
Total comprehensive income
Profit for the period - - - 650 650
Balance at 31 December 2013 21,643 - (13,260) 9,960 18,343
-------- -------- -------- --------- -------
Total comprehensive income
Profit for the period - - - 1,129 1,129
Balance at 30 June 2014 21,643 - (13,260) 11,089 19,472
======== ======== ======== ========= =======
Notes to the Financial Information
Six months ended 30 June 2014
1. Accounting policies
This consolidated interim financial information, which is
unaudited for the half-year ended 30 June 2014, has been prepared
on a consistent basis in accordance with the International
Financial Reporting Standards ('IFRS') as adopted by the European
Union ('EU') issued by the International Accounting Standards Board
('IASB').
They do not contain all of the information required for the full
financial statements and should be read in conjunction with the
consolidated financial statements of the Group as at and for the
year ended 31 December 2013. These interim financial statements do
not constitute statutory accounts within the meaning of the
Companies Act.
This consolidated interim financial information has been
prepared in accordance with AIM Rules for Companies and IAS 34
'Interim Financial Reporting' and is presented in Malaysia Ringgit
('RM') which is the currency of the primary economic environment in
which the Group operates. The functional currency of each
individual entity is the local currency of that individual entity.
All amounts are prepared to the nearest thousand (RM'000) except
where otherwise indicated.
The consolidated financial information presented for the
comparative period, the six months to 30 June 2013, is for
RapidCloud Asia Berhad ('RCAB') and its subsidiaries (together the
'RCAB Group'). The group reconstruction, in which RapidCloud
International plc ('RCI'), a company registered and incorporated in
Jersey on 15 March 2013, acquired the entire share capital of RCAB,
occurred prior to admission to the AIM market on 7 August 2013 and
therefore subsequent to 30 June 2013, the reporting date for this
comparative period.
2. Operating segments
An operating segment is a component of the Group that engages in
business activities from which it may earn revenues and incur
expenses. IFRS 8 'Operating Segments' requires disclosure of the
operating segments that are reported to the Chief Operating
Decision Maker ('CODM'). The CODM at the end of the financial
period under review is the Board of RCI Directors, who have
responsibility for planning and controlling the activities of the
Group. The Group's reportable segment has been identified as the
provision of Cloud Computing services. Across the Group there is
considered to be a commonality in the nature of services, the type
of customer, the methods used to provide services and the
regulatory environment.
All operations of the Group are carried out in South East Asia.
All revenues therefore arise within South East Asia. No single
external customer amounts to 10 per cent or more of the Group's
revenues.
As the Group only has one reportable segment, no further
segmental information is disclosed.
3. Earnings per share
The calculation of the basic and diluted earnings per share is
based on the following:
Six months Six months Year ended
to to 31 December
30 June 2014 30 June 2013 2013
RM'000 RM'000 RM'000
-------------- -------------- -------------
Profit for the financial period
and basic earnings attributed
to ordinary shareholders 1,129 1,878 2,528
============== ============== =============
Number Number Number
-------------- -------------- -------------
Weighted average numbers of
ordinary shares 17,368,971 17,368,971 17,368,971
============== ============== =============
Sen Sen Sen
Earnings per share:
Basic and diluted 6.50 10.81 14.55
-------------- -------------- -------------
In order to provide meaningful comparative earnings per share
information, the number of shares used to calculate the EPS in the
comparative period is considered to be the number of shares in
issue on the Group's admission to AIM.
There are no share options, warrants or other dilutive
instruments in issue therefore the basic earnings is the same as
dilutive earnings per share.
4. Property, plant and equipment
Fixtures, Office Computers Motor Renovation Signboard Sun Total
fittings equipment RM'000 vehicles RM'000 RM'000 Microsystems RM'000
& RM'000 RM'000 equipment
equipment RM'000
RM'000
----------- ----------- ----------- ---------- ------------ ----------- ------------- ---------
Period ended
30 June
2014
Cost
At 1 January
2014 731 395 1,440 850 1,395 32 465 5,308
Additions 162 112 1,118 - 35 - - 1,427
Disposals (60) (38) - - - - - (98)
Impaired - - - - - - - -
----------- ----------- ----------- ---------- ------------ ----------- ------------- ---------
At 30 June
2014 833 469 2,558 850 1,430 32 465 6,637
----------- ----------- ----------- ---------- ------------ ----------- ------------- ---------
Depreciation
At 1 January
2014 85 57 1,234 218 49 21 465 2,129
Depreciation
charge 37 19 78 85 70 1 - 290
Disposals (59) (37) - - - - - (96)
Impaired - - - - - - - -
----------- ----------- ----------- ---------- ------------ ----------- ------------- ---------
At 30 June
2014 63 39 1,312 303 119 22 465 2,323
----------- ----------- ----------- ---------- ------------ ----------- ------------- ---------
Net book
value
At 30 June
2014 770 430 1,246 547 1,311 10 - 4,314
=========== =========== =========== ========== ============ =========== ============= =========
4. Property, plant and equipment (continued)
Fixtures, Office Computers Motor Renovation Signboard Sun Total
fittings equipment RM'000 vehicles RM'000 RM'000 Microsystems RM'000
& RM'000 RM'000 equipment
equipment RM'000
RM'000
----------- ----------- ----------- ---------- ------------ ----------- ------------- ---------
Period ended
30 June
2013
Cost
At 1 January
2013 68 73 1,365 528 28 26 465 2,553
Additions 3 - 49 409 - 6 - 467
Disposals - - - - - - - -
Impaired - - - - - - - -
----------- ----------- ----------- ---------- ------------ ----------- ------------- ---------
At 30 June
2013 71 73 1,414 937 28 32 465 3,020
----------- ----------- ----------- ---------- ------------ ----------- ------------- ---------
Depreciation
At 1 January
2013 65 65 1,265 216 20 18 465 2,114
Depreciation
charge 1 2 30 51 1 1 - 86
Disposals - - - - - - - -
Impaired - - - - - - - -
----------- ----------- ----------- ---------- ------------ ----------- ------------- ---------
At 30 June
2013 66 67 1,295 267 21 19 465 2,200
----------- ----------- ----------- ---------- ------------ ----------- ------------- ---------
Net book
value
At 30 June
2013 5 6 119 670 7 13 - 820
=========== =========== =========== ========== ============ =========== ============= =========
4. Property, plant and equipment (continued)
Fixtures, Office Computers Motor Renovation Signboard Sun Total
fittings equipment RM'000 vehicles RM'000 RM'000 Microsystems RM'000
& RM'000 RM'000 equipment
equipment RM'000
RM'000
----------- ----------- ----------- ---------- ------------ ----------- ------------- ---------
Year ended
31 December
2013
Cost
At 1 January
2013 68 73 1,365 528 28 26 465 2,553
Additions 666 341 178 822 1,367 6 - 3,380
Disposals (3) (14) (103) (500) - - - (620)
Impaired - (5) - - - - - (5)
----------- ----------- ----------- ---------- ------------ ----------- ------------- ---------
At 31
December
2013 731 395 1,440 850 1,395 32 465 5,308
----------- ----------- ----------- ---------- ------------ ----------- ------------- ---------
Depreciation
At 1 January
2013 65 65 1,265 216 20 18 465 2,114
Depreciation
charge 23 10 71 135 29 3 - 271
Disposals (3) (13) (102) (133) - - - (251)
Impaired - (5) - - - - - (5)
----------- ----------- ----------- ---------- ------------ ----------- ------------- ---------
At 31
December
2013 85 57 1,234 218 49 21 465 2,129
----------- ----------- ----------- ---------- ------------ ----------- ------------- ---------
Net book
value
At 31
December
2013 646 338 206 632 1,346 11 - 3,179
=========== =========== =========== ========== ============ =========== ============= =========
5. Software development expenditure
Six months Six months Year ended
to to 31 December
30 June 2014 30 June 2013 2013
RM'000 RM'000 RM'000
-------------- -------------- -------------
Cost
At the beginning of the period 4,095 3,026 3,026
Additions 620 548 1,069
-------------- -------------- -------------
At the end of the period 4,715 3,574 4,095
-------------- -------------- -------------
Accumulated amortisation
At the beginning of the period 1,877 1,174 1,174
Charge for the financial period 426 308 703
-------------- -------------- -------------
At the end of the period 2,303 1,482 1,877
-------------- -------------- -------------
Carrying amount
At the end of the period 2,412 2,092 2,218
============== ============== =============
Software development assets comprise capitalised development
work on software products. These costs are internally generated
wages and salaries costs arising from the Group's software
development and are recognised only if all the following conditions
are met:
-- an asset is created that can be identified;
-- it is possible that the asset created will generate future economic benefit; and
-- the development cost of the asset can be measured reliably.
Once development has been completed the software development
intangible assets are amortised on a straight-line basis over their
useful lives, which is assessed annually and is currently
considered to be 5 years.
The Group assesses at each reporting date whether there is an
indication that an asset may be impaired. If any such indication
exists, or when annual impairment testing for an asset is required,
the Group makes an estimate of the asset's recoverable amount. An
asset's recoverable amount is the higher of an asset's or
cash-generating unit's fair value less costs to sell and its value
in use and is determined for an individual asset, unless the asset
does not generate cash inflows that are largely independent of
those from other assets or groups of assets. Where the carrying
amount of an asset exceeds its recoverable amount, the asset is
considered impaired and is written down to its recoverable
amount.
There have been no impairments in the period under review.
6. Trade and other receivables
30 June 2014 30 June 2013 31 December
RM'000 RM'000 2013
RM'000
------------- ------------- ------------
Trade receivables 5,140 2,527 6,531
Less: impairment provision (424) (294) (424)
------------- ------------- ------------
Net trade receivables 4,716 2,233 6,107
Other receivables 172 153 216
Prepayments 1,007 135 185
------------- ------------- ------------
5,895 2,521 6,508
============= ============= ============
6. Trade and other receivables (continued)
The Group's normal trade credit terms range from 30 to 60 days,
however, the Group's Government and Multinational customers enjoy
credit terms of 90 to 120 days. Other credit terms are assessed and
approved on a case-by-case basis. The Group has no significant
concentration of credit risk that may arise from exposure to a
single receivable. The Directors consider that the carrying amount
of trade and other receivables approximates to their fair values.
All of the Group's trade receivables have been reviewed for
indicators of impairment. There was no impairment of trade
receivables for the six months to 30 June 2014 (31 December 2013:
RM130,000; 30 June 2013: RM Nil).
Trade receivables above include amount that are past due at the
period-end but against which no allowance for doubtful receivables
has been made because there has not been any significant change in
credit quality and the amounts are still considered
recoverable.
7. Convertible preference shares
The comparative period cash balance includes restricted cash
raised through the issue convertible preference shares prior to the
Group's admission to AIM, which converted into Ordinary Shares in
August 2013. There is no restricted cash as at 30 June 2014.
For further information about the convertible preference shares,
please refer to the consolidated financial statements of the
Company as at and for the year ended 31 December 2013.
8. Subsequent events
On 15 August 2014, the RCI announced the completion of the
acquisition of 100% of the Ordinary Share capital of Exxelnet
Solutions Pte Ltd ('Exxelnet'), a Singaporean web development firm,
for a total aggregate consideration of circa GBP0.95 million of
which half will be paid in cash and half in new ordinary shares of
RCI.
In order to fund the cash required to complete the acquisition
and to provide further working capital, RCI announced that, through
a placing and subscription of 1,111,112 ordinary shares of nil par
value at 54p per ordinary share, it has raised GBP600,000
(RM3,235,192) before expenses from both existing and new
shareholders.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UKAKRSWAKUAR
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