TIDMTHRU
RNS Number : 4338Z
Thruvision Group PLC
15 December 2017
15 December 2017
Thruvision Group plc
("Thruvision" or the "Group")
Interim Results for the six months ended 30 September 2017
Thruvision (AIM: THRU) the specialist provider of
people-screening technology to the international security market,
announces its unaudited results for the six months ended 30
September 2017.
Key Highlights
-- Completion of sale of Thruvision Group PLC's Video Business
in October 2017 for a maximum consideration of GBP27.5 million
-- Total Group revenues in six month period ending 30 September
2017 of GBP11.6 million (H1 2017: GBP13.3 million) with total Group
loss before tax of GBP13.8 million (H1 2017: GBP5.1 million) of
which GBP11.3 million relates to discontinued operations
-- Thruvision revenues of GBP0.3 million (H1 2017: GBP0.6
million) with segment operating loss of GBP0.9 million (H1 2017:
GBP0.4 million) and Central costs, which mainly relate to PLC
overheads, of GBP1.6 million
-- Thruvision trading better since completion of sale of Video Business early in H2
-- Cash at 30 September of GBP2.5 million, with cash at 14 December of GBP17.3 million
-- Process underway to return excess funds from sale to Shareholders
Commenting on the results, Tom Black, Chairman of Thruvision,
said:
"With the sale of the Video Business successfully behind us, I
am pleased that the new, more focused Group is starting to
demonstrate good progress. Recent trading momentum has increased
considerably relative to a few months ago and I remain confident
that Thruvision is well placed to become a leader in the
potentially large, international people-screening market. "
For further information please contact:
Thruvision Group plc +44 (0)20 3553 5888
Tom Black, Executive Chairman
Colin Evans, Managing Director
Investec Bank plc +44 (0)20 7597 5970
Andrew Pinder / Sebastian Lawrence
/ Patrick Robb
FTI Consulting LLP +44 (0)20 3727 1000
Edward Bridges / Matt Dixon / Harry
Staight
About Thruvision
Thruvision Group plc is a specialist provider of
people-screening technology that can detect weapons, explosives and
contraband hidden under clothing. Developed with extensive support
from the British and US Governments, Thruvision technology is
operationally proven and is being used to enhance the security of
transport hubs, borders, high profile buildings and public
areas.
www.thruvision.com
Chairman's Statement
Update on significant recent changes to Group strategy
We recently reported significant changes to the Group's
strategy, with the sale of the Group's Video Business, based around
EdgeVis live video streaming technology, SmartVis video analytics
and incorporating Brimtek in the US, to Volpi Capital LLP under the
Digital Barriers brand. This has allowed the ongoing business to
focus exclusively on its class-leading and highly innovative
Thruvision people-screening technology.
The sale of the Video Business completed on 31 October 2017 for
a maximum consideration of GBP27.5 million in cash, of which
GBP25.5 million was paid on completion and the remaining GBP2.0
million is payable subject to the Video Business securing a
specific trading contract within 12 months following completion.
The process of separating the Video Business from the Group, under
the terms of a Transitional Services Agreement and including
working capital adjustments, is now underway.
Proceeds from the sale, after transaction related costs, were
used to repay outstanding debt and to provide a robust balance
sheet for the on-going Thruvision business. It remains the Board's
intention, subject to appropriate legal and regulatory
authorisations, to return excess cash to Shareholders. The
necessary formalities to allow for this are now underway and the
Board will update Shareholders in due course.
Thruvision strategy summary
Thruvision is a proven, people-screening technology for
"stand-off" detection of weapons, explosives and contraband
concealed under clothing. It is a specialist thermal camera,
operating in the far infrared range of the electromagnetic
spectrum, which sees concealed objects as relatively cold against
warm bodies.
The Group acquired Thruvision in 2012. Since then, significant
effort has been invested in taking what was a very early stage,
pioneering technology to the point where today it has the following
characteristics:
-- Operationally proven technology: a solution to current
counter-terrorism challenges which has been successfully used
operationally by both the US Transportation Security Administration
and G4S;
-- Limited competition and simplicity of deployment: although
there are many people-screening systems deployed globally,
Thruvision has the great advantage of stand-off operation (i.e.
with a detection range over 5 metres) and simple, standalone
deployment, avoiding the need for complex integration into existing
infrastructure; and
-- Multiple potential markets at an early stage of development:
Thruvision was originally developed for the counter-terrorism
market protecting transport hubs, shopping malls, sports stadia and
other busy public places but the technology has now also
demonstrated applicability in other markets, namely customs
applications (cash and narcotics smuggling) and loss-prevention
(theft from warehouses).
The Board believes that a substantial new international market,
measured in tens of thousands of units over the next five years is
becoming available and that, with Thruvision's key differentiators
now in place, there is an opportunity to drive rapid, organic and
profitable growth.
People
We are also pleased to announce the appointment of Ian Lindsay
as the Group's new Finance Director, who will join in March 2018.
Ian brings to Thruvision his strong commercial technology
experience from the telecoms sector and will help lead the
strengthening of Thruvision's broader sales partnering given the
significantly simplified accounting needs of the Group. I would
like to thank Nick Deman, our current Interim Finance Director, for
his excellent support.
Outlook
We have made some very significant changes to the structure of
the Group during the period and we now have a leaner, more focused
business, based upon patented and operationally-proven technology.
Good progress has been made since the sale of the Video Business,
and we have seen good order intake, a strengthening sales pipeline
and continued engagement with governments in both the UK and the
US. The Board remains confident that the Group is well placed to
become an international market leader in people-screening
technology.
Business Review
Thruvision
Thruvision revenues in H1 2018 were GBP0.3 million (H1 2017:
GBP0.6 million) with a segment operating loss of GBP0.9 million (H1
2017: GBP0.4 million) and central costs, which mainly relate to PLC
overheads of GBP1.6 million. Performance in the period was
materially affected by the significant distraction of the Video
Business sale process as almost all the sales and pre-sales
personnel of the total Group were focused on Video Business related
activities. However, notable successes in H1 2018 included the
British Library, where Thruvision was selected to provide
additional security in light of recent terrorist attacks in the UK,
and the ongoing rollout of units into a major Asian mass transit
customer.
Thruvision trading since completion of the sale of the Video
Business has been good. Thruvision has been competitively selected
for a fourth time by a major Asian customs agency for contraband
detection. In addition, a new Middle East customer has placed a
GBP0.6 million order for Thruvision units to strengthen its VIP
security by detecting concealed firearms.
We have invested further in our sales force, adding several new
heads in both the UK and US and we propose to continue expanding
our sales capability during the remainder of the year.
We continue to work very closely with governments in both the UK
and US. In the UK, we successfully participated in Home Office
operational trials with a major entertainment operator, screening
an average of 13,000 visitors per day over a two week period. In
the US, we continue to work through the operational trials process
with major rail and subway operators, and are soon to commence new
trials with a number of airport infrastructure operators.
In addition we are strengthening the effectiveness of our
security system integrator partnerships in Australia, Japan, Spain,
Italy and Latin America. We continue to partner with Digital
Barriers for certain other Asian countries and we expect to add new
partners to cover Turkey and East Africa in the short term. We have
also opened up a broader set of sales relationships in the UK where
the terrorist attacks earlier in 2017 have caused heightened levels
of interest.
At the international level, we continue to work closely with G4S
in the UK, Europe and, most recently, the US. We have also started
working with other international security integrators and expect to
focus more on this aspect of our go-to-market strategy as momentum
in the business continues to build.
Given confidence in our strengthening sales pipeline, work to
diversify our supply chain in the UK and to include a US-based
manufacturing partner has continued. This should ensure production
capacity can keep pace with anticipated demand in the future and
further ensure that we remove any single point of failure from our
manufacturing process. Finally, we remain confident we can secure
further R&D funding from our government customers to ensure we
can organically expand the Thruvision product range in due
course.
Discontinued operations
The Video Business reported revenues in the six month period
ending 30 September 2017 of GBP11.2 million (H1 2017: GBP12.4
million) with a segment operating loss of GBP9.6 million (H1 2017:
GBP3.2 million). Discontinued central costs were GBP1.8 million (H1
2017: GBP1.5 million), giving a total loss attributable to
discontinued operations of GBP11.3 million (H1 2017: GBP4.9
million).
THRUVISION GROUP PLC
Consolidated income statement
for the six months ended 30 September 2017
6 months 6 months
ended ended Year ended
30 September 30 September 31 March
2017 2016 2017
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
------------------------------ ----- ------------- ------------- -----------
Continuing operations
Revenue 2 344 602 2,024
Cost of sales (367) (328) (1,146)
------------------------------ ----- ------------- ------------- -----------
Gross profit (23) 274 878
Administration costs (1,660) (1,863) (2,933)
Operating loss (1,683) (1,589) (2,055)
Finance revenue - 1,309 1,870
Finance costs (749) (7) (906)
------------------------------ ----- ------------- ------------- -----------
Loss before tax (2,432) (287) (1,091)
Income tax (22) 182 242
------------------------------ ----- ------------- ------------- -----------
Loss for the period /
year from continuing
operations (2,454) (105) (849)
------------------------------ ----- ------------- ------------- -----------
Discontinued operations
Loss from discontinued
operation (net of tax) (11,329) (4,853) (15,831)
Loss for the period /
year (13,783) (4,958) (16,680)
Adjusted loss: 3
Loss before tax from
continuing operations (2,432) (287) (1,091)
Amortisation of intangibles
initially recognised
on acquisition - 52 98
Share-based payment 3 35 105 113
Financing set up fees 263 - 421
Adjusted loss before
tax for the period /
year from continuing
operations (2,134) (130) (459)
------------------------------ ----- ------------- ------------- -----------
Loss per share - continuing
operations
Loss per share - basic 4 (1.49p) (0.06p) (0.51p)
Loss per share - diluted 4 (1.49p) (0.06p) (0.51p)
(Loss)/profit per share
- adjusted 4 (1.31p) 0.03p (0.13p)
(Loss)/profit per share
- adjusted diluted 4 (1.31p) 0.03p (0.13p)
(Loss) per share - continuing and discontinued
operations
Loss per share - basic (8.35p) (3.00p) (10.10)
Loss per share - diluted (8.35p) (3.00p) (10.10)
------------------------------ ----- ------------- ------------- -----------
THRUVISION GROUP PLC
Consolidated statement of comprehensive income
for the six months ended 30 September 2017
6 months 6 months
ended ended Year ended
30 September 30 September 31 March
2017 2016 2017
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
------------------------------ ------------- ------------- -----------
Loss for the period /
year from continuing
operations (2,454) (105) (849)
Loss for the period /
year from discontinued
operations (11,329) (4,853) (15,831)
------------------------------- ------------- ------------- -----------
Loss for the period /
year attributable to
owners of the parent (13,783) (4,958) (16,680)
Other comprehensive income
from continuing operations
------------------------------ ------------- ------------- -----------
Other comprehensive income
that may be subsequently
reclassified to profit
and loss:
Exchange differences
on retranslation of foreign
operations (926) 464 746
------------------------------- ------------- ------------- -----------
Net other comprehensive
income to be reclassified
to profit or loss in
subsequent periods (926) 464 746
------------------------------- ------------- ------------- -----------
Total comprehensive loss
attributable to owners
of the parent (14,709) (4,494) (15,934)
------------------------------- ------------- ------------- -----------
THRUVISION GROUP PLC
Consolidated statement of financial position
at 30 September 2017
30 September 30 September 31 March
2017 2016 2017
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
------------------------------ ----- ------------- ------------- ---------
Assets
Non current assets
Property, plant and
equipment 407 1,025 1,132
Goodwill - 24,196 17,076
Other intangible assets - 11,519 11,380
------------------------------ ----- ------------- ------------- ---------
407 36,740 29,588
Current assets
Inventories 2,359 6,647 8,018
Trade and other receivables 877 12,997 7,656
Other financial asset - 425 -
Current tax recoverable 145 657 1,304
Cash and cash equivalents 113 3,409 1,002
------------------------------ ----- ------------- ------------- ---------
3,494 24,135 17,980
------------------------------ ----- ------------- ------------- ---------
Assets classified as
held for resale 10 36,070 - -
Total assets 39,971 60,875 47,568
Equity and liabilities
Attributable to owners
of the parent
Equity share capital 6 1,814 1,760 1,814
Share premium 109,078 109,078 109,078
Capital redemption
reserve 4,786 4,786 4,786
Merger reserve 454 454 454
Translation reserve (925) (281) 1
Other reserves (307) (307) (307)
Retained earnings (90,640) (65,184) (76,912)
------------------------------ ----- ------------- ------------- ---------
Total equity 24,260 50,306 38,914
Non current liabilities
Deferred tax liabilities - 39 620
Financial liabilities - 1,080 -
Provisions 62 106 90
------------------------------ ----- ------------- ------------- ---------
62 1,225 710
Current liabilities
Trade and other payables 1,871 7,549 7,908
Financial liabilities - 1,759 -
Bank loan and overdraft - - -
Provisions 28 36 36
------------------------------ ----- ------------- ------------- ---------
1,899 9,344 7,944
------------------------------ ----- ------------- ------------- ---------
Liabilities directly
associated with assets
classified as held
for sale 10 13,750 - -
------------------------------ ----- ------------- ------------- ---------
Total liabilities 15,711 10,569 8,654
------------------------------ ----- ------------- ------------- ---------
Total equity and liabilities 39,971 60,875 47,568
------------------------------ ----- ------------- ------------- ---------
THRUVISION GROUP PLC
Consolidated statement of changes in equity
for the 6 months ended 30 September 2017
Ordinary Share Capital
share premium redemption Merger Translation Other Retained Total
capital account reserve reserve reserve reserves earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------- --------- --------- ------------ --------- ------------ ---------- ---------- ---------
At 31 March 2016 1,760 109,078 4,786 454 (745) (307) (60,656) 54,370
---------------------- --------- --------- ------------ --------- ------------ ---------- ---------- ---------
Loss for the period - - - - - - (4,958) (4,958)
Other comprehensive
income - - - - 464 - - 464
---------------------- --------- --------- ------------ --------- ------------ ---------- ---------- ---------
Total comprehensive
loss - - - - 464 - (4,958) (4,494)
Share-based payment
credit - - - - - - 430 430
At 30 September 2016 1,760 109,078 4,786 454 (281) (307) (65,184) 50,306
---------------------- --------- --------- ------------ --------- ------------ ---------- ---------- ---------
Loss for the period - - - - - - (11,722) (11,722)
Other comprehensive
income - - - - 282 - - 282
---------------------- --------- --------- ------------ --------- ------------ ---------- ---------- ---------
Total comprehensive
loss - - - - 282 - (11,722) (11,440)
Incentive share
conversion 54 - - - - - - 54
Share-based payment
charge - - - - - - (6) (6)
At 31 March 2017 1,814 109,078 4,786 454 1 (307) (76,912) 38,914
---------------------- --------- --------- ------------ --------- ------------ ---------- ---------- ---------
Loss for the period - - - - - - (13,783) (13,783)
Other comprehensive
income - - - - (926) - - (926)
---------------------- --------- --------- ------------ --------- ------------ ---------- ---------- ---------
Total comprehensive
loss - - - - (926) - (13,783) (14,709)
Share-based payment
credit - - - - - - 55 55
---------------------- --------- --------- ------------ --------- ------------ ---------- ---------- ---------
At 30 September 2017 1,814 109,078 4,786 454 (925) (307) (90,640) 24,260
---------------------- --------- --------- ------------ --------- ------------ ---------- ---------- ---------
THRUVISION GROUP PLC
Consolidated statement of cash flows
for the 6 months ended 30 September 2017
6 months 6 months
ended ended Year ended
30 September 30 September 31 March
2017 2016 2017
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
------------------------------------------ ------------- ------------- -----------
Operating activities
Loss before tax from continuing
operations (2,432) (287) (1,091)
Loss before tax from discontinued
operations (11,329) (4,853) (15,831)
------------------------------------------ ------------- ------------- -----------
Loss before tax (13,761) (5,140) (16,922)
Non-cash adjustment to reconcile
loss before tax to net cash flows
Depreciation of property, plant
and equipment 257 206 481
Amortisation of intangible assets 616 902 1,588
Impairment of goodwill 4,291 - 7,500
Impairment of intangible assets - - -
Share-based payment transaction
expense 55 430 424
Unrealised gains on foreign
exchange (71) (517) (119)
Release of deferred consideration - - (2,329)
Disposal of fixed assets 26 - 5
Recovery of purchase consideration (1,126) - -
Finance income - (1,310) (1,872)
Finance costs 1,126 323 1,081
Working capital adjustments:
Decrease in trade and other
receivables 1,119 701 5,582
Decrease / (increase) in inventories 466 (1,705) (3,077)
Increase / (decrease) in trade
and other payables 795 (1,791) (840)
Increase / (decrease) in deferred
revenue 626 214 (425)
Decrease in provisions (28) (14) (29)
------------------------------------------ ------------- ------------- -----------
Cash utilised in operations (5,609) (7,701) (8,952)
Interest paid - (8) (8)
Tax received 617 546 523
------------------------------------------ ------------- ------------- -----------
Net cash flow from operating activities (4,992) (7,163) (8,437)
------------------------------------------ ------------- ------------- -----------
Investing activities
Purchase of property, plant & equipment (65) (377) (760)
Expenditure on intangible assets (9) (7) (32)
Interest received - 8 19
Recovery of purchase consideration 1,126 - 288
------------------------------------------ ------------- ------------- -----------
Net cash flow from investing activities 1,052 (376) (485)
------------------------------------------ ------------- ------------- -----------
Financing activities
Finance costs - - (549)
Bank loan 5,442 - -
------------------------------------------ ------------- ------------- -----------
Net cash flow from financing activities 5,442 - (549)
------------------------------------------ ------------- ------------- -----------
Net increase / (decrease) in cash
and cash equivalents 1,502 (7,539) (9,471)
Cash and cash equivalents at beginning
of period / year 1,002 10,836 10,836
Effect of foreign exchange rate
changes on cash and cash equivalents 24 112 (363)
------------------------------------------ ------------- ------------- -----------
Cash and cash equivalents at end
of period / year 2,528 3,409 1,002
------------------------------------------ ------------- ------------- -----------
Reconciliation of net cash and
cash equivalents
------------------------------------------ ------------- ------------- -----------
Cash and cash equivalents (disclosed
within current assets) 113 3,409 1,002
Cash held by disposal group (disclosed
within assets classified as held
for resale) 2,415 - -
------------------------------------------ ------------- ------------- -----------
Net cash and cash equivalents at
end of period / year 2,528 3,409 1,002
------------------------------------------ ------------- ------------- -----------
THRUVISION GROUP PLC
Notes to the financial statements
for the 6 months ended 30 September 2017
1. Accounting policies
Basis of preparation
The consolidated interim financial statements include those of
Thruvision Group plc and all of its subsidiary undertakings
(together "the Group") drawn up at 30 September 2017, and have been
prepared in accordance with International Accounting Standard 34,
"Interim Financial Reporting" ("IAS 34") as adopted for use in the
European Union ("EU"). The consolidated interim financial
statements have been prepared using accounting policies and methods
of computation consistent with those applied in the consolidated
financial statements for the period ended 31 March 2017.
The Company is a public limited company incorporated and
domiciled in England & Wales and whose shares are quoted on
AIM, a market operated by The London Stock Exchange.
Accounting policies
The annual consolidated financial statements of the Group are
prepared on the basis of International Financial Reporting
Standards ("IFRS"). The consolidated interim financial statements
are presented on a condensed basis as permitted by IAS 34 and
therefore do not include all the disclosures that would otherwise
be required in a full set of financial statements and should be
read in conjunction with the most recent Annual Report and Accounts
which were approved by the Board of Directors on 29 September 2017
and have been filed with Companies House. The condensed interim
financial statements do not constitute statutory accounts as
defined in Section 435 of the Companies Act 2006 and are unaudited
for all periods presented. The financial information for the
12-month period ended 31 March 2017 is extracted from the financial
statements for that period. The auditors' report on those financial
statements was unqualified and did not contain an emphasis of
matter reference and did not contain a statement under section
498(2) or (3) of the Companies Act 2006.
The half year results for the current period to 30 September
2017 have not been audited or reviewed by auditors pursuant to the
Auditing Practices Board guidance of Review of Interim Financial
Information.
The comparative statement of comprehensive income has been
re-presented as if an operation discontinued during the prior year
had been discontinued from the start of the comparative year.
Going concern
The Group's loss before tax from continuing operations for the
period was GBP2.4 million (H117: GBP0.3 million). As at 30
September 2017 the Group had net current assets of GBP1.6 million
(31 March 2017: GBP10.0 million) and net cash reserves of GBP0.1
million (31 March 2017: GBP1.0 million).
On 17 October 2016 the Group replaced an existing GBP5.0 million
secured working capital facility for export activities with HSBC
Bank Plc with a new two year GBP10.0 million secured revolving
credit facility with Investec Bank plc. The funds available through
this facility were used to meet the increasing working capital
requirements of the Group's organic growth. The facility is secured
by a fixed and floating charge over the Group's assets and includes
covenants which are tested quarterly. On 28 September 2017 the
Group arranged an unsecured GBP5.25 million loan facility with
Herald Investment Trust to supplement the above facility for a
period of 15 months, which has not been drawn on. These facilities
have been factored in to cash flow projections for the Group.
On 7 October 2017 the Board signed an agreement for the disposal
of the Video Business segment to Volpi Capital LLP for a maximum
consideration payable of GBP27.5 million in cash of which GBP25.5
million was payable on completion (on a cash free/debt free basis)
and the remaining GBP2.0 million is payable subject to the Video
Business securing a specific trading contract within 12 months
following completion. The cash proceeds from the sale, after
related fees, are significantly greater than the funding
requirements of the continuing operations for the period up to and
including 14 December 2018. These cash balances have been factored
in to cash flow projections for the Group.
The Board has reviewed these cash flow forecasts for the period
up to and including 14 December 2018. These forecasts and
projections take into account reasonably possible changes in
trading performance and show that the Group will be able to operate
within the level of current funding resources. The Directors
therefore believe there is sufficient cash available to the Group
to manage through these requirements.
As with all businesses, there are particular times of the year
where the Group's working capital requirements are at their peak.
However, the Group is well placed to manage business risk
effectively and the Board reviews the Group's performance against
budgets and forecasts on a regular basis to ensure action is taken
where needed.
The Directors therefore are satisfied that the Group has
adequate resources to continue operating for a period of at least
12 months from the approval of these accounts. For this reason,
they have adopted the going concern basis in preparing the
financial statements.
Financial instruments
The Group classifies financial instruments, or their component
parts, on initial recognition as a financial asset, a financial
liability or an equity instrument in accordance with the substance
of the contractual arrangement.
2. Segmental information
Historically the Group has been organised into Services and
Solutions. In light of the planned disposal of the Video Business
when preparing the Annual Report for the year ended 31 March 2017,
the directors believed that providing segment analysis that shows
the Video Business as a separate segment to the Thruvision Business
would aid readers of the Annual Report. Combined, the Video
Business and Thruvision make up the previously reported Solutions
segment. At 30 September the Video Business was classified as an
asset held for sale, and is now reported as a discontinued
operation.
Until the disposal of the segment, the Group's Services Division
was predominantly focused on the UK market and integrated third
party technology and own product into UK Services customers. The
Services Division was no longer strategic to the Group, and
therefore signed an agreement for the disposal of the business on 1
April 2016.
Until the disposal of the segment, the Group's 'Video Business'
Division was focused on the advanced surveillance market. This
covers image and data capture (for example, unattended ground
sensors), a range of processing and enhancement techniques (for
example, thermal image processing, image stabilisation, and
enhancing low light performance), image transmission (both wired
and wireless technologies) and a range of analytics algorithms.
The Group's Thruvision Business is focused on the stand-off
passive body scanning technology.
In accordance with IFRS 8, the Group has derived the information
for its operating segments using the information used by the Chief
Operating Decision Maker and supplemented this with additional
analysis to assist readers of the Annual Report to better
understand the impact of the proposed divestment. The Group has
identified the Board of Directors as the Chief Operating Decision
Maker as it is responsible for the allocation of resources to
operating segments and assessing their performance.
Historically central overheads, which primarily relate to
operations of the Group function, are not allocated to the business
units. On completion of the sale of the Video Business, some of
these central costs will transfer with the Video Business or cease.
Consistent with the reporting of the Video Business as a
discontinued operation, these central costs have been classified as
discontinued. Group financing (including finance costs and finance
income) and income taxes are managed centrally and are not
allocated to an operating segment. No operating segments have been
aggregated to form the above reportable segments.
6 months ended 30 September 2017
Services Solutions Central
--------------- ---------------------------- ------------------------------
Video
Services Business Thruvision Central Central
Discontinued Discontinued Continuing Discontinued Continuing Total
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ --------------- -------------- ------------ --------------- ------------- -----------
Total segment revenue - 11,228 344 - - 11,572
Revenue - 11,228 344 - - 11,572
------------------------ --------------- -------------- ------------ --------------- ------------- -----------
Depreciation - 173 84 - - 257
------------------------ --------------- -------------- ------------ --------------- ------------- -----------
Segment adjusted
operating
loss - (4,994) (864) (1,377) (784) (8,019)
Amortisation of
intangibles
initially recognised
on
acquisition - (616) - - - (616)
Share based payment
charge - - - (20) (35) (55)
Acquisition related
income/(costs) - 1,126 - - - 1,126
Restructuring costs - (779) - - - (779)
Impairment of goodwill
and
intangibles - (4,291) - - - (4,291)
Segment operating loss - (9,554) (864) (1,397) (819) (12,634)
Finance costs - - - (378) 749) (1,127)
------------------------ --------------- -------------- ------------ --------------- ------------- -----------
Segment loss before tax - (9,554) (864) (1,775) (1,568) (13,761)
Loss attributable to discontinued
operations (11,329)
----------------------------------------- -------------- ------------ --------------- ------------- -----------
Loss before tax from continuing
operations (2,432)
Income tax expense (22)
----------------------------------------- -------------- ------------ --------------- ------------- -----------
Loss for the year from continuing
operations (2,454)
----------------------------------------- -------------- ------------ --------------- ------------- -----------
6 months ended 30 September 2016
Services Solutions Central
-------------- ---------------------------- ------------------------------
Video
Services Business Thruvision Central Central
Discontinued Discontinued Continuing Discontinued Continuing Total
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- -------------- -------------- ------------ --------------- ------------- -----------
Total segment revenue 244 12,435 602 - - 13,281
Revenue 244 12,435 602 - - 13,281
------------------------- -------------- -------------- ------------ --------------- ------------- -----------
Depreciation - 180 26 - - 206
------------------------- -------------- -------------- ------------ --------------- ------------- -----------
Segment adjusted
operating
loss (192) (2,889) (318) (829) (1,114) (5,342)
Amortisation of
intangibles
initially recognised on
acquisition - (812) (52) - - (864)
Share based payment
charge - - - (325) (105) (430)
Acquisition related
income/(costs)
and exceptional write
off
of bad debt - 509 - - - 509
Segment operating loss (192) (3,192) (370) (1,154) (1,219) (6,127)
Finance income - - - 1 1,309 1,310
Finance costs - - - (316) (7) (323)
------------------------- -------------- -------------- ------------ --------------- ------------- -----------
Segment loss before tax (192) (3,192) (370) (1,469) 83 (5,140)
Loss attributable to
discontinued
operations (4,853)
------------------------- -------------- -------------- ------------ --------------- ------------- -----------
Loss before tax from
continuing
operations (287)
Income tax credit 182
------------------------- -------------- -------------- ------------ --------------- ------------- -----------
Loss for the year from
continuing
operations (105)
------------------------- -------------- -------------- ------------ --------------- ------------- -----------
12 months ended 31 March 2017
Services Solutions Central
-------------- ---------------------------- ------------------------------
Video
Services Business Thruvision Central Central
Discontinued Discontinued Continuing Discontinued Continuing Total
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- -------------- -------------- ------------ --------------- ------------- -----------
Total segment revenue 243 24,480 2,025 - - 26,748
Inter-segment revenue - - (1) - - (1)
------------------------- -------------- -------------- ------------ --------------- ------------- -----------
Revenue 243 24,480 2,024 - - 26,747
------------------------- -------------- -------------- ------------ --------------- ------------- -----------
Depreciation - 385 96 - - 481
------------------------- -------------- -------------- ------------ --------------- ------------- -----------
Segment adjusted
operating
loss (207) (7,333) (106) (1,852) (1,738) (11,236)
Amortisation of
intangibles
initially recognised on
acquisition - (1,411) (98) - - (1,509)
Share based payment
charge - - - (311) (113) (424)
Acquisition related
income - - - 627 - 627
Impairment of goodwill
and
intangibles - (7,500) - - - (7,500)
Release of deferred
consideration - - - 2,329 - 2,329
------------------------- -------------- -------------- ------------ --------------- ------------- -----------
Segment operating loss (207) (16,244) (204) 793 (1,851) (17,713)
Finance income - - - 2 1,870 1,872
Finance costs - - - (175) (906) (1,081)
------------------------- -------------- -------------- ------------ --------------- ------------- -----------
Segment loss before tax (207) (16,244) (204) 620 (887) (16,922)
Loss attributable to
discontinued
operations (15,831)
------------------------- -------------- -------------- ------------ --------------- ------------- -----------
Loss before tax from
continuing
operations (1,091)
Income tax credit 242
------------------------- -------------- -------------- ------------ --------------- ------------- -----------
Loss for the year from
continuing
operations (849)
------------------------- -------------- -------------- ------------ --------------- ------------- -----------
Analysis of revenue from continuing operations by customer
There have been three (H117: one) individually material
customers in the Thruvision operating segment during the period
representing GBP307,000 of revenue (H117: GBP530,000).
The Group's non-current assets by geography are detailed
below:
30 September 30 September 31 March
2017 2016 2017
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
-------------------------- ------------- ------------- ---------
United Kingdom 407 16,521 8,945
United States of America - 20,219 20,643
407 36,740 29,588
-------------------------- ------------- ------------- ---------
3. Adjusted loss before tax
An adjusted loss before tax measure has been presented as the
Directors believe that this is a more relevant measure of the
Group's underlying performance. Adjusted loss is not defined under
IFRS and has been shown as the Directors consider this to be
helpful for a better understanding of the performance of the
Group's underlying business. It may not be comparable with
similarly titled measurements reported by other companies and is
not intended to be a substitute for, or superior to, IFRS measures
of profit. The net adjustments to loss before tax from continuing
operations are summarised below:
6 months 6 months
ended ended Year ended
30 September 30 September 31 March
2017 2016 2017
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
--------------------------------------- ------------- ------------- -----------
Amortisation of intangibles initially
recognised on acquisition - 52 98
Share-based payment (i) 35 105 113
Financing set-up costs (ii) 263 - 421
Total adjustments 298 157 632
--------------------------------------- ------------- ------------- -----------
(i) The performance condition associated with LTIP awards made
from July 2015 are subject to a non-market based performance
measure. Accordingly, should these LTIP awards fail to vest, the
share based payment charge will be added back to the income
statement. Historic LTIP awards have been made with a market based
performance measure which in the event that LTIPs fail to vest the
share based payment charge is not added back to the income
statement. To date the majority of historic LTIP awards have failed
to vest. The inclusion provides consistency over time allowing a
better understanding of the financial position of the Group.
(ii) On 28 September 2017 the Group arranged an unsecured
GBP5.25 million loan facility with Herald Investment Trust,
incurring legal and set up fees. During the year ended 31 March
2017 the Group obtained a facility with Investec Bank plc,
incurring legal and set up fees.
4. Loss per share
The following reflects the loss and share data used in the basic
and diluted loss per share calculations:
6 months 6 months
ended ended Year ended
30 September 30 September 31 March
2017 2016 2017
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
---------------------------------------- ------------- ------------- ------------
Loss from continuing operations
attributable to ordinary shareholders (2,454) (105) (849)
---------------------------------------- ------------- ------------- ------------
Loss from continuing and discontinued
operations attributable to ordinary
shareholders (13,783) (4,958) (16,680)
Weighted average number of shares 165,130,024 165,111,309 165,120,640
---------------------------------------- ------------- ------------- ------------
Basic and diluted loss per share
- continuing operations (1.49p) (0.06p) (0.51p)
---------------------------------------- ------------- ------------- ------------
Basic and diluted loss per share
- continuing and discontinued
operations (8.35p) (3.00p) (10.10p)
---------------------------------------- ------------- ------------- ------------
6 months 6 months
ended ended Year ended
30 September 30 September 31 March
2017 2016 2017
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Loss from continuing operations
attributable to ordinary shareholders (2,454) (105) (849)
Amortisation of intangibles - 52 98
Share-based payment 35 105 113
Financing set up fees 263 - 421
Adjusted (loss)/profit after tax (2,156) 52 (217)
------------------------------------------ ------------- ------------- ------------
Weighted average number of shares 165,130,024 165,111,309 165,120,640
------------------------------------------ ------------- ------------- ------------
Basic and diluted loss per share (1.49p) (0.06p) (0.51p)
------------------------------------------ ------------- ------------- ------------
Basic and diluted adjusted (loss)/profit
per share (1.31p) 0.03p (0.13p)
------------------------------------------ ------------- ------------- ------------
The inclusion of potential Ordinary Shares arising from LTIPs
and Incentive Shares would be anti-dilutive. Basic and diluted loss
per share has therefore been calculated using the same weighted
number of shares.
5. Goodwill
Carrying amount of goodwill allocated to operating segments:
6 months 6 months
ended ended Year ended
30 September 30 September 31 March
2017 2016 2017
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
---------------- ------------- ------------- -----------
Video Business 12,151 24,196 17,076
Thruvision - - -
Goodwill 12,151 24,196 17,076
---------------- ------------- ------------- -----------
Historically the Group has been organised into Services and
Solutions. In light of the planned disposal of the Video Business
when preparing the Annual Report for the year ended 31 March 2017,
the directors believed that providing segment analysis that shows
the Video Business as a separate segment to the Thruvision Business
would aid readers of the Annual Report. Combined, the Video
Business and Thruvision make up the previously reported Solutions
segment. Consequently goodwill acquired through business
combinations has been allocated for impairment testing purposes.
These segments are deemed to be the two cash-generating units
('CGUs') for impairment testing.
The Group conducts annual impairment tests on the carrying value
of the CGUs in the statement of financial position as at 28
February each year. Impairment testing is only re-performed if an
impairment triggering event occurs in the intervening period. As a
result of the proposed divestment the impairment review conducted
at the annual testing date was revisited in the Annual Report for
the year ended 31 March 2017.
Following the classification of the disposal group as held for
sale, the recoverable amount of the Video Business CGU as at 30
September 2017 was based on fair value less costs of disposal. Fair
value was assessed based on the agreed consideration for the Video
Business, and as a result an impairment of GBP4.3 million in the
carrying amount of goodwill was required.
The movement in goodwill in the period is a result of foreign
exchange movement (decrease GBP0.6m) and the impairment of GBP4.3m.
Goodwill is now held on the balance sheet as a component of Assets
held for sale.
6. Issued share capital
As at 30 September 2017, there were 165,130,024 Ordinary Shares
in issue (30 September 2016: 165,130,024, 31 March 2017:
165,130,024). In addition, there were 163,124 Deferred Shares in
issue (30 September 2016: 108,749, 31 March 2017: 163,124).
7. Share options
No share awards were granted in the period.
The following share awards were granted in the period ended 30
September 2016:
HMRC
Approved Parallel Top-Up
Options Options awards Part A Sharesave
July July July awards options
2016 2016 2016 July 2016 July 2016
----------------------------- ---------- --------- ---------- ----------- -----------
Number granted 344,214 344,214 1,493,286 305,000 1,717,853
----------------------------- ---------- --------- ---------- ----------- -----------
Fair value per option/award GBP0.16 GBP0.32 GBP0.48 GBP0.48 GBP0.22
----------------------------- ---------- --------- ---------- ----------- -----------
Exercise price GBP0.48 nil nil nil GBP0.31
----------------------------- ---------- --------- ---------- ----------- -----------
Vesting period (years) 3.0 3.0 3.0 3.0 3.0
----------------------------- ---------- --------- ---------- ----------- -----------
The vesting and exercise of share awards are subject to certain
performance conditions relating to revenue and profit in the
performance period.
The share-based payment charge in the period amounts to GBP0.1
million (H117: GBP0.4 million), with the fair value charge
attributable to new awards in the period determined using a Black
Scholes calculation. Share option awards made prior to 2015 have
been made with a market based performance measure which in the
event that LTIPS fail to vest the share-based payment charge is not
added back to the income statement. To date the majority of these
historic LTIP awards have failed to vest.
8. Related party transactions
On 28 July 2016 the Remuneration Committee of the Group made a
conditional award to Colin Evans, Zak Doffman and Sharon Cooper,
under the rules of The Digital Barriers Long Term Incentive Plan
(the "Plan"). The vesting and exercise of these awards are subject
to certain performance conditions relating to revenue and profit in
the performance period.
Top-up award
(no of shares)
--------------- ----------------
Colin Evans 250,000
--------------- ----------------
Zak Doffman 500,000
--------------- ----------------
Sharon Cooper 200,000
--------------- ----------------
Full details of the plan can be found in the 2016 Annual Report
on page 34.
No further awards were made in six months ended 30 September
2017.
9. Financial instruments
Fair value hierarchy
The Group uses the following hierarchy for determining and
disclosing the fair values of financial instruments by valuation
techniques:
Level 1: quoted (unadjusted) prices in active markets for
identical assets or liabilities;
Level 2: other techniques for which all inputs which have a
significant effect on the recorded fair value are observable,
either directly or indirectly; and
Level 3: techniques which use inputs which have a significant
effect on the recorded fair value that are not based on observable
market data.
The Group have a Level 3 financial liability of GBPnil (H117:
GBP2.2 million) following the release of deferred consideration
measured at fair value following the acquisition of Brimtek
Inc.
The Group have a Level 2 financial liability of GBPnil (H117:
GBP0.3 million) of financial swap measured at fair value. The fair
values of other financial assets and liabilities, which are short
term, are not disclosed as the Directors estimate that the carrying
amount of the financial assets and liabilities are not
significantly different to their fair value. These financial assets
and liabilities are carried at amortised cost.
10. Disposal group classified as held for sale
Video Business
As reported in the 2017 Annual Report, the Board undertook a
far-reaching internal review of the Group in early 2017. As a
result of the review, the Board concluded that a sale of the Video
Business would be in the best interests of the Group. A sale
process was undertaken, managed by Investec Bank plc, which
involved approaching a full range of potential trade and financial
buyers. Following a multi-staged and competitive process, the Board
received a number of indicative offers from interested parties. The
disposal group was classified as held for sale in September
2017.
The sale completed on 31 October 2017.
In the six months ended 30 September 2017 revenues attributable
to the disposal group amounted to GBP11.2 million (H117: GBP12.4
million, FY17: GBP24.5 million) with a loss attributable to the
disposal group of GBP11.3m (H117: GBP4.7 million, FY17: GBP15.8
million).
Services segment
On 1 April 2016 the Board signed an agreement for the proposed
disposal of the Services segment to its existing management team
for GBP1. This followed the view that the Board believed the
Services division was no longer strategic to the Group's future.
The disposal group was classified as held for sale in March
2016.
The sale completed on 19 May 2016.
The sale included limited ongoing customer contracts associated
with the Services segment, as well as certain assets including
vehicle leases and limited stock and moveable assets. The book
value of the assets transferred was GBP0.1 million. In connection
with the sale the Group transferred the division's employees, by
way of a TUPE process.
In the six months ended 30 September 2017 revenues attributable
to the disposal group amounted to GBPnil (H117: GBP0.2 million,
FY17: GBP0.2 million) with a loss attributable to the disposal
group of GBPnil (H117: GBP0.2 million, FY17: GBP0.2 million). Full
details on the income statement and cash flows attributable to the
disposal group for the year ended 31 March 2017 are disclosed in
note 26 on page 80 of the 2017 Annual Report.
The basic and diluted loss per share from discontinued
operations for the six months ended 30 September 2017 is 6.86 pence
(H117: 2.94 pence, FY17: 9.59 pence) based on 165,130,024 (H117:
165,111,309, FY17: 165,120,640) weighted average shares in issue.
The inclusion of potential Ordinary Shares arising from LTIPs and
Incentive Shares would be anti-dilutive. Basic and diluted loss per
share has therefore been calculated using the same weighted number
of shares.
11. Post balance sheet event
On 9 October 2017 the Group announced the agreed sale of the
Video Business to Volpi Capital LLP for consideration of GBP27.5
million in cash of which GBP25.5 million was payable on Completion
(on a cash free/debt free basis) and the remaining GBP2.0 million
is payable subject to the Video Business securing a specific
trading contract within 12 months following Completion. Further
smaller amounts may become payable in the future in relation to
certain items of working capital. A General Meeting of the Company
was held on 26 October 2017 where a resolution to approve the sale
was approved by shareholders and the transaction completed on 31
October 2017.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BCBDDDGBBGRS
(END) Dow Jones Newswires
December 15, 2017 02:00 ET (07:00 GMT)
Thruvision (LSE:THRU)
Historical Stock Chart
From May 2024 to Jun 2024
Thruvision (LSE:THRU)
Historical Stock Chart
From Jun 2023 to Jun 2024
