TIDMTHRU
RNS Number : 5272S
Thruvision Group PLC
26 June 2018
26 June 2018
Thruvision Group plc
("Thruvision" or the "Group")
Audited results for the full year ended 31 March 2018
Highlights
-- Completion of sale of Thruvision Group PLC's Video Business in October 2017.
-- Total revenues (including discontinued operations) of GBP16.2
million (2017: GBP 26.8 million) and total loss of GBP19.6 million
(2017: GBP16.7 million).
For Thruvision Continuing Operations (the Company):
-- Revenues of GBP3.1 million (2017: GBP2.0 million) with loss
before tax for continuing operations of GBP3.2 million (2017:
GBP1.1 million);
-- Business performance close to breakeven in H2 with operating
EBITDA loss of (GBP0.1) million in H2, before PLC costs;
-- A record number of 54 Thruvision units shipped in the second
half across our four target markets (giving 57 for the full year)
with several new international customers acquired, repeat sales to
existing customers and a strengthening international sales
pipeline;
-- Successfully completed US Transportation Security
Administration (TSA) mass transit testing and, since period end,
started testing with TSA's future aviation checkpoint security
programme;
-- Cash at 31 March 2018 of GBP17.6 million (31 Oct 2017: GBP17.1million);
-- Process to return up to GBP8.0 million of cash to
Shareholders through tender offer, expected to take place over
summer 2018.
Commenting on the results, Colin Evans, Managing Director,
said:
"Following the disposal of the Video Business, the Group has
made significant strategic progress. The tighter market focus and
additional sales resource has resulted in a material pick up in
sales for the Group.
We are seeing growing momentum in the loss prevention and border
control markets, building on our starting position in
counter-terrorism. This combined with a strengthening geographic
footprint underpins the Boards confidence that Thruvision is very
well placed to become a leading new technology provider to the
international security market."
For further information please contact:
Thruvision Group plc +44 (0)1235 436180
Tom Black, Executive Chairman
Colin Evans, Managing Director
Investec Bank plc (NOMAD & Broker) +44 (0)20 7597 5970
Andrew Pinder / Sebastian Lawrence
/ Patrick Robb
FTI Consulting LLP +44 (0)20 3727 1000
Matt Dixon / Harry Staight
About Thruvision
Thruvision Group plc is a specialist provider of
people-screening technology that can safely see weapons, explosives
and contraband hidden in peoples' 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
A year of change
This was a year of significant change for the business.
Following a strategic review in early 2017, we initiated a process
that resulted in the sale of our Video Business to Volpi Capital.
Since October 2017, this has allowed us to focus all resources on
the very exciting prospects for our highly innovative
people-screening technology, Thruvision. With record numbers of
units shipped since completion of the Video Business sale and
momentum continuing to build, we are now confident that a large,
new, international and varied market for Thruvision exists.
Update on the sale of the Video Business and returning cash to
shareholders
The sale of the Video Business completed on 31 October 2017 for
an initial cash consideration of GBP25.5 million with further
deferred consideration conditional on a number of performance
conditions being met in the 12-month period post-completion. Full
separation of the Video Business has now been completed. We do
retain one link between our two companies, with the Video Business
acting as a value-added reseller for Thruvision in a limited number
of Asian countries.
After transaction related costs and repaying outstanding debt,
and with strong trading performance since completion of the sale,
the Company had GBP17.6 million cash on 31 March 2018. As announced
in early March 2018, a process to return up to GBP8.0 million to
shareholders through a tender offer is well underway and is
expected to conclude in the summer of this year.
Thruvision strategic summary
Thruvision is a proven, people-screening technology for the
"stand-off" detection of weapons, explosives and contraband
concealed under clothing. It is a specialist thermal camera,
operating in the terahertz range of the electromagnetic spectrum,
which sees the size, shape and location of concealed items as
blockages of body heat emanating from a person.
The Thruvision technology was acquired by the Company in 2012.
Since then, significant effort has been invested in taking what was
a very early stage, pioneering counter-terrorism 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 tested by
the US Government's Transportation Security Administrator (TSA), a
leading accreditor of new security technology;
-- Limited competition and simplicity of deployment: although
there are many "airport-style" stand-inside screening systems
deployed globally, Thruvision has the great advantage of stand-off
operation (i.e. with a detection range up to 10 metres) and simple,
standalone deployment, avoiding the need for complex integration
into existing infrastructure;
-- Multiple markets at an early stage of development: Thruvision
was originally developed for the counter-terrorism market but has
now also demonstrated applicability in other markets, namely
customs applications (cash and narcotics smuggling) and
loss-prevention (theft from distribution centres and factories);
and
-- Technology fully productised: unlike possible competitors,
Thruvision technology is now fully productised, with repeatable
manufacturing processes now proven, and an active, customer-funded
research and development programme in place.
A substantial new international opportunity, covering the
distinct counter-terrorism, customs and border control, and
commercial loss prevention markets, is becoming available. With
each of these potentially comprising many thousands of units over
the next five years, and with Thruvision's key differentiators now
in place, the Board believes that an opportunity exists to drive
rapid, organic and profitable growth of the business.
Significant strategic progress in H2
As well as achieving record unit sales, significant strategic
progress has been made in the last few months.
Firstly, following contracted delivery of a new Thruvision
product to TSA mass transit in 2017, we successfully completed
operational pilots with TSA and mass transit operators in New York
and Los Angeles early in 2018, generating widespread positive media
coverage. TSA publicly described these pilots as "very promising"
and Thruvision has additionally now started testing as part of
TSA's future aviation security checkpoint programme. Other US
Federal Government agencies are also showing strong interest across
the counter-terrorism and customs markets.
Excellent progress has also been made in the loss prevention
market, where retail and logistics organisations are concerned
about reducing staff theft from distribution centres and factories.
With customers reporting theft being reduced by up to 80%, we are
seeing accelerating uptake of Thruvision technology, with purchases
by leading brands, including Sony and JD Sports, since period end.
Given this is a global market, we are increasingly confident about
strong growth potential here.
Following sales into Hong Kong over several years and a further
order received in the reporting period, we are seeing increased
interest in Thruvision from China. Working with both our Hong-Kong
based partner and its Chinese parent company, we received two
smaller pilot deployment orders and, with Thruvision now certified
for sale in China, we have a number of strategic opportunities
across customs and counter-terrorism markets.
Finally, TSA publicity has given the international
counter-terrorism market confidence in Thruvision performance. This
helped us secure orders in the half from Saudi Arabia and the
Philippines, with an international sales pipeline across Asia
Pacific, Middle East and Europe.
People
The splitting of a business such as we have achieved in the past
year is a very unsettling time for its people and I would like to
thank all colleagues, past and present, for their support and
commitment during the year. I'd like to take this opportunity to
wish our ex colleagues well in their new home with Volpi Capital
and hope that the increased focus they can now apply to the video
market will pay dividends for them. The smaller Thruvision team
which remains is now a much more specialised and focused group with
exceptionally high morale and motivation which bodes well for our
future.
Finally, we welcomed Ian Lindsay as our new Finance Director in
March 2018. With a more commercially-focused finance background,
Ian rounds out the senior management team. Given the Company's now
much simpler financial structure Ian will be free to devote a
material amount of his time to help drive the growth of the
business.
Outlook
In the months since divesting the Video Business, Thruvision has
made significant progress. In addition to achieving record sales,
Thruvision's technical performance has been successfully tested by
TSA, and the business has expanded into the customs and loss
prevention markets from its counter-terrorism starting point.
Excluding PLC costs, the company operated close to break-even in
the second half of the year and demonstrated its ability to manage
working capital effectively.
This momentum has been carried forward into the new financial
year, with orders from existing Asian government and UK-based loss
prevention customers, and new customer orders from household names
including Sony and JD Sports. With a growing sales pipeline and
initiatives to increase production capacity in the UK and US well
underway, the business is trading in line with management's
expectations. The Board therefore remains confident that Thruvision
is very well placed to become a leading new technology provider to
the international security market.
Update on strategy
With much higher levels of market engagement since the
divestment of the Video Business, we have significantly improved
our understanding of how Thruvision compares with other types of
security screening technology and users' expectations of such
solutions. This has allowed us to identify the most attractive
market segments, and we have focused our sales and marketing
efforts heavily on these areas with good immediate returns.
Thruvision competitive positioning
We have fully validated Thruvision's significant advantages over
other types of people-screening technology. In particular,
Thruvision:
-- provides instant, real-time video showing the size, shape and
location of items concealed in clothing at distances of up to 10
metres;
-- detects all types of material - powders, plastics, liquids,
organics, ceramics, paper as well as metallics - filling the
security gap left by metal detectors;
-- has a lower cost of ownership than alternative technologies;
-- does not reveal anatomical details of the individuals
screened thereby eliminating privacy issues raised by some other
types of technology;
-- allows much higher throughput of people being screened - over
2,000 people per hour - reducing queuing and inconvenience;
-- is a passive, receive-only sensor and emits no ionizing
radiation, meaning there are no safety issues associated with its
use.
Most attractive market areas
Based on this competitive positioning, we have further refined
our focus on four distinct market areas, each offering good levels
of solution repeatability across a broad range of international
markets, as follows:
-- Loss Prevention - screening staff for items stolen from
distribution centres or factories. The market is characterised by a
potentially very large number of customers each of which may
purchase tens of units over a three-year period. With a clear
financial return on investment driving purchasing, short sales
cycles have been demonstrated.
-- Customs - screening travellers for prohibited items such as
cash and drugs at all types of border including airports, land
crossing, seaports, cruise liner terminals, bridges and railway
stations. Customers are national government agencies meaning that
total order quantities could be substantial although sales cycles
are extended.
-- Transportation - screening travellers for suicide vests and
large guns in railways, subways and airport concourses, and for
smaller threat items at airport security checkpoints. Customers are
either governments or public sector and a combination of national
and city / region organisations. Use cases range from ubiquitous
coverage of airport checkpoints to use of a fleet of rapidly
deployable units for high-visibility 'pop-up' deterrence-based
checkpoints in the mass transit system.
-- Entrance protection - screening visitors for all types of
weapon at entrances to high profile or high security buildings,
sports and entertainment venues and other public venues. Covering
both public and private sector sites, the aim here is to ensure
sites are protected from non-metallic threat items and to speed up
the process of screening visitors.
Business Review
Sales
We had a record year for sales of Thruvision units as the
benefits of clear branding and market positioning, strengthening
TSA referenceability, and enhanced management focus fed through. A
total of 57 units were shipped in the year, with 54 of these in the
five-month period from October. These were spread reasonably evenly
across our four markets - loss prevention, mass transit, entrance
protection and customs, and included 10 new customers. Highlights
by region were as follows:
-- EMEA: good progress was made in developing sales into the
loss prevention market, with three new customers added and a
significant pipeline of opportunity developed. By volume, our
biggest sales came from a new customer in Saudi Arabia, attracted
by TSA publicity, which offers follow-on potential. We also
continued to work closely with the British Government on its public
area safety initiative and we expect this to yield sales in
FY19.
-- APAC: our Hong Kong customer continued to build out its fleet
of Thruvision units which is now entering its fifth year of
operations. We were able to use this to open up discussions in
China resulting in a new customer sale, and other trials which we
expect to yield sales in FY19. We also won an order from the
Philippines for mass transit security with follow-on potential and,
since period end, a follow-on order from Vietnam Customs. Through
partners, we continued to build pipeline into countries including
Australia and India.
-- Americas: We focused heavily here on continuing to drive
Thruvision product development and acceptance through TSA. We also
won a couple of small orders and recognised a modest amount of
R&D revenue from the TSA mass transit contract awarded in FY17.
With Thruvision now having successfully completed TSA testing, we
are well poised to secure sales with US mass transit operators and
federal government agencies in FY19. Separately, we expect to make
progress in the Loss Prevention market in North America.
Routes to market
In addition to being much more focused on the four main market
areas, we have also looked closely how best to generate new sales
leads, and the role played by our value-added resellers.
Given the new capability offered by Thruvision, we have worked
hard to better explain how to use the technology and built this
into an upgraded marketing approach. This has started yielding many
more direct enquiries from around the world, particularly since the
heavily publicised TSA-sponsored operational pilots in New York and
Los Angeles. We qualify these enquiries ourselves and then work
with our end-customers to identify local partners as necessary.
As we build up our brand and win more and more referenceable
customers in each of our geographic regions and market areas, we
expect to be able to sell more indirectly. We continued to
concentrate on revalidating and retraining existing value-added
reseller partners to focus more closely on the four market areas we
are now concentrating on, and only to appoint new partners in
countries where strong, sustainable interest in Thruvision
exists.
Manufacturing
Through the course of the year, we have proved that, with
support from our key suppliers, we can manufacture at up to 20
units per month, with high quality levels. Looking forward, we plan
to run monthly production at a level consistent with the steady
flow of smaller orders that we have started to win, with the
knowledge that we can raise production levels in response to
specific sales opportunities as they firm up.
Mindful of strategic progress with the US Government, we also
initiated a process of identifying and training-up a suitably
qualified US manufacturing partner which will provide us with unit
assembly, ship and support capability in Florida, and expand
production capacity further. We expect this partner to come fully
online during the summer of 2018, and it will also give us a
technology transfer model to reuse in other countries if
necessary.
New product development
We have a very active R&D programme being driven by customer
requirements, and with customer funding in a number of cases. Our
focus is on broadening our product portfolio in time to cover all
our key market areas, from the more price sensitive commercial loss
prevention and entrance protection markets, to the more
system-performance driven needs of various government agencies
internationally.
Our new Thruvision TAC product, developed specifically for the
TSA and US Government, provides us with a completely redesigned,
modular hardware architecture. Coming into full production in
summer 2018, it offers improved range, image quality and usability.
It also forms part of ongoing, funded TSA development which will
deliver a new outdoor variant in early 2019.
We also made software improvements, including adding Chinese
language support which should support ongoing sales efforts in this
region.
IP protection
We have an ongoing programme to look at our patent portfolio and
to identify the most appropriate ways to protect the new
innovations resulting from our R&D work. Part of this activity
includes an assessment of enforceability in certain high-risk
geographies and how best to manage this risk.
Facilities
As part of the process of separating from the Video Business, we
have taken on new premises in the Washington DC area. This is being
equipped with full product demonstration facilities and will
support our continuing brand building efforts into US Government.
We are also in the process of providing similar customer facing
facilities at our UK HQ and reconfiguring manufacturing areas to
provide extra capacity moving forwards.
Staff
We recruited extra sales resource in October 2017, resulting in
an immediate uptick in sales volumes and we have since added a
handful of individuals in pre-sales and manufacturing roles as
activity levels increased. After an unsettling period during the
divestment last summer, staff morale is now very good and we
initiated a new company share-option scheme towards the end of the
period to retain and incentivise all staff. This, plus the very
interesting nature of our technology, should allow us to attract
further specifically skilled individuals to the company in the
coming months to continue to strengthen the team.
In the US, we have been utilising part-time marketing support to
increase Thruvision awareness. We expect modest growth in sales and
pre-sales headcount here in due course.
Financial Review
Introduction
Significant changes to the Group were made during the reporting
period. Following a strategic review, the Group's Video Business
was sold on 31 October 2017 allowing management to focus
exclusively on the people-screening technology, Thruvision. The
reasons for the disposal and subsequent impact on trading prospects
and balance sheet strength are given in the Interim Report dated 15
December 2017 and the market announcement regarding the disposal
made on 9 October 2017.
The results presented in this report therefore cover seven (7)
months of the complete Group's trading (that is the Video Business
and Thruvision) and five (5) months of standalone Thruvision
business trading (including Group overheads). The following terms
are used throughout:
-- Continuing Operations - refers to Thruvision
-- Video and Thruvision businesses were separated.
-- Discontinued Operations - refers to the Video Business and discontinued central costs.
Financial results for Thruvision Continuing Operations
For the year ended 31 March 2018, Thruvision revenues from
Continuing Operations grew 53% to GBP3.1 million (2017: GBP2.1
million) and an Operating Loss of (GBP2.5) million (2017 loss:
(GBP2.1) million). While revenues grew healthily, losses widened as
a result of the Thruvision business putting in place its own,
dedicated sales team which had previously been provided by the
Video Business and increased manufacturing capability to fulfill
increased unit volumes.
Key Performance Indicators ("KPIs")
The Group consider the following to be our KPIs which track the
trading performance and position of the business.
Financial KPIs
2018 2017
GBP'000 GBP'000
-------------------------- -------- --------
Revenue 3,103 2,024
Average revenue per unit 51 60
Gross Profit 1,079 878
Gross Margin 35% 43%
Overheads (3,654) (2,933)
Operating (loss) (2,524) (2,055)
-------------------------- -------- --------
Non-financial KPIs
2018 2017
----------------------------- ----- -----
No of units sold 57 15
Number of staff at 31 March 23 20
----------------------------- ----- -----
Revenue
Thruvision revenues from Continuing Operations grew 53% to
GBP3.1 million (2017: GBP2.0 million). Revenues from unit sales
contributed GBP2.9 million (2017: GBP0.9 million), and development
revenue from the US Transport Security Administration GBP0.2
million (2017: GBP1.1 million). The growth in revenues over the
prior year reflects strong growth in organic unit sales in our main
markets, with unit volumes increasing to 57 (2017: 15 units).
2018 2017
Revenue GBP'000 GBP'000
---------------- -------- --------
Units 2,895 903
Development 208 1,121
---------------- -------- --------
Total 3,103 2,024
---------------- -------- --------
The principal growth driver for the business is unit sales and,
while we expect to continue to be awarded customer funded
development contracts, we do not expect this to form a material
proportion of revenues moving forwards.
Gross Margin
Gross margin for Thruvision Continuing Operations reduced to 35%
in the year (2017: 43%). The lower gross margin compared to prior
year is due to development revenues contributing a higher gross
margin than unit sales in the prior year, with development revenues
representing 7% of revenue in 2018 (2017: 55%). The gross margin
attributable to unit revenues increased to 34% (2017: 32%).
Gross Margin 2018 2017
GBP'000 GBP'000
-------------------------- ------- -------
Unit Revenue 2,895 903
Unit Gross Margin 991 290
-------------------------- ------- -------
Gross margin % 34% 32%
Development Revenue 208 1,121
Development Gross Margin 88 588
-------------------------- ------- -------
Gross margin % 42% 52%
Overall Revenue 3,103 2,024
Overall Gross Margin 1,079 878
-------------------------- ------- -------
Gross margin % 35% 43%
-------------------------- ------- -------
With Thruvision's market strategy now much clearer, focus moving
forward will be on the ongoing improvement of unit gross margin. We
expect this to be achieved through a combination of higher sales
values being achieved for the new Thruvision TAC product and
manufacturing cost reduction work.
Overheads
Overhead increased by 25% to GBP3.6 million (2017: GBP2.9
million). The GBP0.7 million was principally due to a GBP0.6
million full year cost incurred by the need to put in place a
dedicated Thruvision sales team following the divestment of the
Video Business. Manufacturing and R&D costs increased by GBP0.1
million to fulfil unit volume growth.
2018 2017
Overheads GBP'000 GBP'000
---------------------------- -------- --------
Sales and marketing 805 239
Manufacturing and R&D 708 570
Property and administration 658 532
PLC costs 1,431 1,479
Share-based payment charge 52 113
Total Overheads 3,654 2,933
---------------------------- -------- --------
Looking forward, we expect to see sales and marketing, and to a
lesser extent, manufacturing and R&D, costs increase but at a
rate below the headline growth rate of the business. We do not
expect to materially increase management and administration or PLC
costs in the near-term.
Loss for the year
The Adjusted Operating Loss (including depreciation, share based
payment charges and amortization of intangibles originally
recognized on acquisition) for Thruvision Continuing Operations was
(GBP2.5) million (2017 loss: (GBP2.1) million). This increase was
due to Thruvision putting in place its own, dedicated sales team
which had previously been provided by the Video Business, and
expanding the Manufacturing function to fulfil unit volume
increases.
The Total Operating Loss (including intercompany finance charges
and tax) for Thruvision Continuing Operations was (GBP3.1) million
(2017: (GBP1.0) million) principally driven by increased
administration costs to put in place a dedicated Thruvision sales
team and by income attributable to foreign currency gains on
intercompany loans in the prior year as detailed in the table
below.
Year ended Year ended
31 March
2018 31 March 2017
GBP'000 GBP'000
------------------------------- ----------- --------------
Continuing operations
Operating loss (2,524) (2,055)
Finance revenue 70 1,870
Finance costs (758) (906)
--------------------------------- ----------- --------------
Loss before tax (3,212) (1,091)
Income tax 90 129
--------------------------------- ----------- --------------
Loss for the period / year
from continuing operations (3,122) (962)
-------------------------------- ----------- --------------
Loss for the period / year
from discontinued operations (17,130) (15,718)
-------------------------------- ----------- --------------
(20,252) (16,680)
-------------------------------- ----------- --------------
Finance revenue includes a GBPnil (2017: GBP1,862,000) foreign
exchange gain on a USD denominated intercompany loan due to the US
dollar strengthening from 1.43 to 1.25 during the year ended 31
March 2017.
Finance costs includes a GBP486,000 (2017: GBPnil) foreign
exchange loss on a USD denominated intercompany loan due to the US
dollar weakening from 1.25 to 1.34 in the 7 month period to 31
October 2017.
As a result of the disposal of the Video Business, a GBP701,000
foreign exchange gain was recognised. This gain does not get
recorded in the Group's Consolidated Income Statement and passes
through the Consolidated statement of comprehensive income.
Full year results, covering seven (7) months of the complete
Group's trading (that is the Video Business and Thruvision) and
five (5) months of standalone Thruvision business trading
(including Group overheads) were revenues of GBP16.2 million (2017
twelve (12) month period: GBP26.7 million) and a total loss of
(GBP19.5) million (2017 twelve (12) month period: (GBP16.7)
million).
Discontinued Operations
In the seven (7) month period to 31 October 2017, Discontinued
Operations generated revenue of GBP13.1 million (2017 twelve (12)
month period: GBP24.5 million) and a total loss of (GBP16.4)
million (2017 twelve (12) month period: (GBP15.8) million).
Taxation
As a result of brought-forward tax losses we do not expect to
pay the full rate of UK corporation tax next financial year. The
continuing Income Statement tax credit for the year of GBP90,000
(2017: GBP129,000) relates to the R&D tax credit.
At 31 March 2018, the Group had unutilised tax losses carried
forward of approximately GBP8.7 million (2017: GBP56.7 million -
split GBP7.1 million Continuing Operations, GBP49.6 million
Discontinued Operations). Given the varying degrees of uncertainty
as to the timescale of utilisation of these losses, the Group has
not recognised GBP1.5 million (2017: GBP9.3 million) of potential
deferred tax assets associated with GBP8.7 million (2016: GBP56.2
million) of these losses.
At 31 March 2018, the Group's net deferred tax liability stood
at GBPnil million (2017: GBPnil million continuing, GBP0.6 million
discontinued, total GBP0.6 million).
Loss per share
The reported loss per share on Continuing Operations is 1.89
pence (2017 loss: 0.58 pence). The adjusted loss per share on
Continuing Operations is 1.70 pence (2017 loss: 0.20 pence). These
calculations include the finance income and finance costs included
in the Loss for the Year section above which distort both year's
results.
Post balance sheet events
On 12 March 2018, the Group announced its intention to return up
to GBP8 million to shareholders, and in order to be able to
undertake that it proposed cancellation of the Share Premium
Account and Capital Redemption Reserve. The cancellation was
approved at the General Meeting held on 28 March 2018, and was
subsequently confirmed by the High Court on 1 May 2018. As a
result, GBP109,078,000 and GBP4,786,000 was cancelled from the
Share Premium Account and Capital Redemption Reserve respectively
creating distributable reserves of GBP113,864,000.
Cash and treasury
The Group had a net cash balance of GBP17.6 million on 31 March
2018 (2017: GBP1.0 million).
Operating Activities
The GBP17.6 million net cash balance is principally due to the
completion of sale of Thruvision Group PLC's Video Business in
October 2017 for an initial consideration of GBP25.5 million, less
the repayment of the Investec revolving credit facility of GBP7.6
million on 31 October 2017.
The GBP16.6 million year on year increase in net cash can be
broken down as follows:
Year ended Year ended
31 March
2018 31 March 2017
GBP'000 GBP'000
---------------------------------- ----------- --------------
Net cash flow from operating
activity before working capital
adjustments (11,152) (10,171)
Working capital adjustments 861 1,211
R&D tax received 762 523
------------------------------------ ----------- --------------
Net cashflow from operating
activity. (9,529) (8,437)
----------------------------------- ----------- --------------
Net cashflow from investing
activities 19,257 (485)
Net cashflow from Financing
activities 6,894 (549)
------------------------------------ ----------- --------------
Net cash inflow(outflow) 16,622 (9,471)
----------------------------------- ----------- --------------
Foreign exchange effect on
cash (37) (363)
----------------------------------- ----------- --------------
Total net cash movement 16,585 (9,834)
----------------------------------- ----------- --------------
GBP90,000 of the R&D tax receipt above relates to continuing
operations (2017: GBP129,000)
Cashflow from financing activities in 2018 includes GBP7,635,000
drawn down on the loan to 31 October 2017 prior to the disposal of
the Video Business.
Investing activities
The GBP19.3 million cash inflow (2017: GBP0.5 million outflow)
summarised below includes GBP1.1 million received in relation to
the purchase of Brimtek.
Year ended Year ended
31 March
2018 31 March 2017
GBP'000 GBP'000
-------------------------------- ----------- --------------
Cash proceeds from disposal
of Video Business 19,187 -
Cash balance in Video Business
at disposal (928) -
Fixed asset additions (198) (792)
Interest received 70 19
Recovery of purchase
consideration 1,126 288
---------------------------------- ----------- --------------
Net cash inflow(outflow) 19,257 (485)
--------------------------------- ----------- --------------
Following the disposal of the Video Business, the GBP10.0
million secured revolving credit facility provided by Investec Bank
plc was repaid in full and cancelled on 31 October 2017. A
separate, unsecured GBP5.25 million loan facility was also provided
by Herald Investment Trust during the reporting period. It was
cancelled on 31 October 2017 having not been used. All outstanding
interest payments and charges have settled within the period.
Consolidated income statement
for the year ended 31 March 2018
Year ended Year ended
31 March
2018 31 March 2017
Note GBP'000 GBP'000
------------------------------------------- ----- ----------- --------------
Continuing operations
Revenue 2 3,103 2,024
Cost of sales (2,024) (1,146)
-------------------------------------------- ----- ----------- --------------
Gross profit 1,079 878
Administration costs (3,654) (2,933)
Other income 51 -
Operating loss 3 (2,524) (2,055)
Finance revenue 70 1,870
Finance costs (758) (906)
-------------------------------------------- ----- ----------- --------------
Loss before tax (3,212) (1,091)
Income tax 8 90 129
-------------------------------------------- ----- ----------- --------------
Loss for the period / year from
continuing operations (3,122) (962)
-------------------------------------------- ----- ----------- --------------
Discontinued operations
Loss from discontinued operation
(net of tax) 12 (16,429) (15,718)
Loss for the period /
year (19,551) (16,680)
Adjusted loss: 4
Loss before tax from continuing
operations (3,212) (1,091)
Amortisation of intangibles
initially recognised
on acquisition - 98
Share-based payment 4 52 113
Financing set up fees 263 421
Adjusted loss before tax for the
period / year from continuing operations (2,897) (459)
----- -----------
Loss per share - continuing operations
Loss per share - basic 9 (1.89p) (0.58p)
Loss per share - diluted 9 (1.89p) (0.58p)
Loss per share - continuing and
discontinued operations
Loss per share - basic 9 (11.84p) (10.10p)
Loss per share - diluted 9 (11.84p) (10.10p)
-------------------------------------------- ----- ----------- --------------
Consolidated statement of comprehensive income
for the year ended 31 March 2018
Year ended Year ended
31 March 31 March
2018 2017
GBP'000 GBP'000
--------------------------------------------------- ----------- -----------
Loss for the year from continuing operations (3,122) (962)
Loss for the period / year from discontinued
operations (16,429) (15,718)
----------------------------------------------------- ----------- -----------
Loss for the period / year attributable
to owners of the parent (19,551) (16,680)
----------------------------------------------------- ----------- -----------
Other comprehensive (loss) / income from
continuing operations
----------------------------------------------------- ----------- -----------
Other comprehensive (loss) / income that may be subsequently
reclassified to profit and loss:
Exchange differences on retranslation of
foreign operations - discontinued (694) 746
Reclassification to profit and loss 701 -
----------------------------------------------------- ----------- -----------
Net other comprehensive income to be reclassified
to profit or
loss in subsequent periods 7 746
----------------------------------------------------- ----------- -----------
Total comprehensive loss attributable to
owners of the parent (19,544) (15,934)
----------------------------------------------------- ----------- -----------
Consolidated statement of financial position
at 31 March 2018
31 March 31 March 2017
2018
Note GBP'000 GBP'000
------------------------------ ----- --------- --------------
Assets
Non current assets
Property, plant and
equipment 278 1,132
Goodwill 6 - 17,076
Other intangible assets 2 11,380
-------------------------------- ----- --------- --------------
280 29,588
Current assets
Inventories 1,813 8,018
Trade and other receivables 7 1,229 7,656
Current tax recoverable 90 1,304
Cash and cash equivalents 17,587 1,002
-------------------------------- ----- --------- --------------
20,719 17,980
------------------------------ ----- --------- --------------
Total assets 20,999 47,568
Equity and liabilities
Attributable to owners of
the parent
Equity share capital 1,814 1,814
Share premium 109,078 109,078
Capital redemption
reserve 4,786 4,786
Merger reserve - 454
Translation reserve 8 1
Other reserves - (307)
Retained earnings (96,207) (76,912)
-------------------------------- ----- --------- --------------
Total equity 19,479 38,914
Non current liabilities
Deferred tax liabilities - 620
Provisions 36 90
-------------------------------- ----- --------- --------------
36 710
Current liabilities
Trade and other payables 8 1,455 7,908
Provisions 29 36
-------------------------------- ----- --------- --------------
1,484 7,944
------------------------------ ----- --------- --------------
Total liabilities 1,520 8,654
-------------------------------- ----- --------- --------------
Total equity and liabilities 20,999 47,568
-------------------------------- ----- --------- --------------
Consolidated statement of changes in equity
for the year ended 31 March 2018
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 year - - - - - - (16,680) (16,680)
Other comprehensive
income - - - - 746 - - 746
---------------------- --------- --------- ------------ --------- ------------ ---------- ---------- ---------
Total comprehensive
gain/(loss) - - - - 746 - (16,680) (15,934)
Incentive share
conversion 54 - - - - - - 54
Share-based payment
credit - - - - - - 424 424
At 31 March 2017 1,814 109,078 4,786 454 1 (307) (76,912) 38,914
---------------------- --------- --------- ------------ --------- ------------ ---------- ---------- ---------
Gain/(Loss) for the
year - - - - 701 - (19,551) (18,850)
Other comprehensive
loss - - - - (694) - - (694)
---------------------- --------- --------- ------------ --------- ------------ ---------- ---------- ---------
Total comprehensive
gain/(loss) - - - - 7 - (19,551) (19,544)
On disposal of Video
Business - - - (454) 307 147 -
Share-based payment
credit - - - - - - 109 109
At 31 March 2018 1,814 109,078 4,786 - 8 - (96,207) 19,479
---------------------- --------- --------- ------------ --------- ------------ ---------- ---------- ---------
Consolidated statement of cash flows
for the year ended 31 March 2018
Year ended Year ended
31 March 31 March
2018 2017
Note GBP'000 GBP'000
---------------------------------------- ----- ----------- -----------
Operating activities
Loss before tax from continuing
operations (3,212) (1,091)
Loss before tax from discontinued
operations (16,337) (15,831)
---------------------------------------- ----- ----------- -----------
Loss before tax (19,549) (16,922)
Non-cash adjustment to reconcile
loss before tax to net cash flows
Depreciation of property,
plant and equipment 400 481
Amortisation of intangible
assets 716 1,588
Impairment of goodwill 8 4,291 7,500
Share-based payment transaction
expense 109 424
Unrealised gains on foreign
exchange 62 (119)
Realisation of foreign exchange 708 -
losses on disposal of Video
Business
Release of deferred consideration - (2,329)
Disposal of fixed assets (5) 5
Loss on disposal of Video 2,085 -
Business
Recovery of purchase consideration 12 (1,126) -
Finance income (70) (1,872)
Finance costs 1,227 1,081
Non-cash consideration 7,635 -
Non-cash settlement of borrowings (7,635) -
- repayment of loan out of
disposal proceeds
Working capital adjustments:
(Increase) / decrease in trade
and other receivables (109) 5,582
Increase in inventories (108) (3,077)
Increase / (decrease) in trade
and other payables 370 (840)
Increase / (decrease) in deferred
revenue 762 (425)
(Decrease) in provisions (54) (29)
--------------------------------------- ----- ----------- -----------
Cash utilised in operations (10,291) (8,952)
Interest paid - (8)
Tax received 762 523
---------------------------------------- ----- ----------- -----------
Net cash flow from operating
activities (9,529) (8,437)
---------------------------------------- ----- ----------- -----------
Investing activities
Purchase of property, plant &
equipment (196) (760)
Expenditure on intangible assets (2) (32)
Interest received 70 19
Cash proceeds from disposal of 19,187 -
Video Business
Cash balance in Video Business (928) -
at disposal
Recovery of purchase consideration 1,126 288
---------------------------------------- ----- ----------- -----------
Net cash flow from investing
activities 19,257 (485)
---------------------------------------- ----- ----------- -----------
Financing activities
Proceeds from borrowings 7,635
Finance costs (741) (549)
Net cash flow from financing
activities 6,894 (549)
---------------------------------------- ----- ----------- -----------
Net increase / (decrease) in
cash and cash equivalents 16,622 (9,471)
Cash and cash equivalents at
beginning year 1,002 10,836
Effect of foreign exchange rate
changes on cash and cash equivalents (37) (363)
---------------------------------------- ----- ----------- -----------
Cash and cash equivalents at
end of year 17,587 1,002
---------------------------------------- ----- ----------- -----------
Notes to the financial information
1. Accounting policies
Basis of preparation
The Group's financial statements have been prepared in
accordance with International Financial Reporting Standards
('IFRSs') as adopted by the European Union as they apply to the
financial statements of the Group for the year ended 31 March 2018
and applied in accordance with the Companies Act 2006.
The Financial Statements were authorised for issue by the Board
of Directors on 26 June 2018 and the Statement of Financial
Position was signed on the Board's behalf by Tom Black and Ian
Lindsay.
All values are rounded to GBP'000 except where otherwise
stated.
The Company is a public limited company incorporated and
domiciled in England and Wales and whose shares are quoted on AIM,
a market operated by the London Stock Exchange.
The consolidated financial statements have been prepared on a
historical cost basis, except:
-- Non-monetary items that are measured in terms of historical
cost in a foreign currency are translated using the exchange rates
as at the dates of the initial transactions.
Accounting policies
The accounting policies which apply in preparing the financial
statements for the period are set out below. These policies have
been consistently applied to all periods presented in these
consolidated financial statements. The comparative statement of
comprehensive income has been re-presented as if an operation
discontinued during the current year had been discontinued from the
start of the comparative year (see note 25).
Basis of measurement
Going concern
The Group's loss before tax from continuing operations for the
period was GBP3.2 million (2017: GBP1.1 million). As at 31 March
2018 the Group had net current assets of GBP19.2 million (31 March
2017: GBP10.0 million) and net cash reserves of GBP17.6 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 operating activities. The facility was
secured by a fixed and floating charge over the Group's assets and
included covenants which were 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 was not drawn on. Both facilities were
cancelled in November 2017.
On 31 October 2017 the Group completed 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, and as a result the Board announced on 12
March 2018 its intention to return up to GBP8 million to
shareholders. The remaining cash, after the return to shareholders,
is still greater than the funding requirements of the continuing
operations for the period up to and including 30 September 2019.
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 30 September 2019. 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,
noting the Group possesses strong cash reserves at 31 March 2018.
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.
Basis of consolidation
The consolidated financial statements for the year include those
of Thruvision Group plc and all of its subsidiary undertakings
(together 'the Group') drawn up at 31 March 2018.
Subsidiary undertakings are those entities controlled directly
or indirectly by the Company. Control is achieved when the Group is
exposed or has rights to variable returns from its involvement with
the investee and has the ability to affect those returns through
its power over the investee. Subsidiaries are consolidated from the
date of their acquisition, being the date on which the Group
obtains control, and continue to be consolidated until the date
that such control ceases. Assets, liabilities, income and expenses
of a subsidiary acquired or disposed of during the year are
included in the consolidated financial statements from the date the
Group gains control until the date the Group ceases to control the
subsidiary.
Subsidiaries are consolidated using the Group's accounting
policies. All inter-company balances and transactions, including
unrealised profits arising from them, are eliminated on
consolidation. A change in the ownership interest of a subsidiary,
without a loss of control, is accounted for as an equity
transaction. If the Group loses control over a subsidiary, it
derecognises the related assets (including goodwill), liabilities,
non-controlling interest and other components of equity while any
resultant gain or loss is recognised in profit or loss. Any
investment retained is recognised at fair value.
Classification as a discontinued operation occurs on disposal or
when the operation meets the criteria to be classified as held for
sale (see note 25), if earlier. When an operation is classified as
a discontinued operation, the comparative income is re-presented as
if the operation had been discontinued from the start of the
comparative year.
Critical accounting estimates and judgements
In preparing the consolidated financial statements, management
has to make judgements, estimates and assumptions that affect the
reported amounts of assets and liabilities, income and expenses.
The critical judgements and estimates made in preparing the
consolidated financial statements are detailed below. These
judgements and estimates involve assumptions in respect of future
events which can vary from what is anticipated.
Revenue and profit recognition
Fixed price contracts are accounted for in accordance with IAS
11 'Construction Contracts'. Revenue and profits are recognised on
a percentage-of-completion basis, when the outcome of a contract
can be estimated reliably. Determining whether a contract's outcome
can be estimated reliably requires management to exercise
judgement, whilst the calculation of the contract's profit requires
estimates of the total contract costs to completion. Cost estimates
and judgements are continually reviewed and updated as determined
by events or circumstances.
Transport Security Administration (TSA) development revenues are
accounted for in accordance with IAS11 'Construction Contracts'.
The recognition requires judgement and estimation in determining
the key assumptions, specifically the volume and value of directly
attributable man hours and materials, required to complete the
contractual milestones for the specific funded product development.
Costs to complete and contract profitability are considered as part
of Management's assessment of the stage of completion of the
project and involve significant estimation uncertainty. The
quantities impacted are shown in note 15 within deferred income
relating to revenue and accruals for associated cost of sales.
Intangible assets
In accordance with IFRS 3 'Business Combinations' goodwill
arising on the acquisition of subsidiaries is capitalised and
included in intangible assets. IFRS 3 also requires the
identification of other intangible assets acquired. The method used
to value intangible assets is the 'Income Approach' which requires
the use of a number of estimates. These key assumptions include
revenue and margin projections and assessments of likelihood of
contract renewal and these estimates may differ from actual
outcomes. The useful economic life of other intangibles also
requires the use of estimates which may differ from actual
outcomes. Details of other intangibles are disclosed in note 12,
including details of the carrying amounts and remaining useful
economic lives of individually material assets. The movements in
Intangible assets are summarised as per note 12 with a closing net
book value on the continuing business of GBP2,000 (2017: GBPnil)
and discontinued GBPnil (2017: GBP11,380,000).
Impairment of assets
The Group assess annually 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. The recoverable
amount is the higher of the cash-generating units (CGUs) fair value
less costs of disposal and its value in use and is determined for
an individual asset, unless the asset does not generate cash flows
that are largely independent of those from other assets of groups
of assets. Where the carrying amount of an asset, or group of
assets, exceeds its recoverable amount, the asset is considered
impaired and is written down to its recoverable amount.
The calculation of value in use of the aggregate cash-generating
units, includes an estimate of the short-term (up to year three)
and long-term (beyond year three up to five years) estimated growth
rate of the cash-generating units, utilising historic performance
information and projected growth rates. Key assumptions are volume
of unit sales, average revenue per unit, manufacturing and R&D
costs plus overhead assumptions. The associated cash flows are
discounted to their present value using a pre-tax discount rate,
flexed for different variable scenarios, that reflects current
market assessments of the time value of money and the risks
specific to the asset. The impairment charge for the continuing
business was GBPnil (2017: GBPnil), discontinued GBP4.3 million
(2017: GBP7.5 million).
Impairment of goodwill
The determination of whether or not goodwill has been impaired
requires an estimate to be made of the value in use of the
cash-generating units to which goodwill has been allocated. The
value in use calculation includes estimates about the future
financial performance of the cash-generating units, including
management's estimates of long-term operating margins and
long--term growth rates. This calculation is performed annually
each year and compared with the recoverable amount to determine
impairment. The testing is only re-performed if an impairment
triggering event occurs in the intervening period.
The carrying amount of goodwill and the key assumptions used in
the calculation of value in use of the cash-generating units are
disclosed in note 11, together with details on the impairment of
goodwill in the year ended 31 March 2018. The carrying value of
goodwill at 31 March 2018 is GBPnil following the disposal of the
Video Business to Volpi Capital LLP.
Inventories
In recognising the net realisable values of inventories,
Management utilises the most reliable information available at each
reporting date. The future realisation of these inventories may be
impacted by future developments in technologies or other market and
industry driven changes that may reduce future selling prices.
Management review inventories bi-annually, identifying where
necessary allowances for obsolete, slow moving or defective
inventories. The carrying balance of inventories as at 31 March
2018 is detailed in note 13.
Deferred consideration
In recognising the fair value of deferred consideration in
respect of business combinations, contingent on future events such
as revenue and profit, management make estimates as to the extent
to which the maximum deferred consideration will be paid, based on
weighted probability models in accordance with IFRS 3. These
estimates may differ from actual outcomes.
In accordance with IAS 39 the deferred consideration is a
financial asset, classified as a loan and receivable with no
separable embedded derivative and is measured at amortised
cost.
Following the Video Business disposal to Volpi capital LLP
GBP2.0 million is payable subject to the Video Business securing a
specific trading contract within 12 months following completion.
Further amounts will become payable contingent upon the successful
collection of an old debt from a customer in South East Asia and
any sales of a specific category of inventory. The Board have
assessed the likely amount recoverable based on the latest
available information, and based on a weighted probability model,
have included a contingent asset discounted at the company's
weighted average cost of capital totalling GBP405,000, as per note
14.
Income taxes
In recognising deferred tax assets, management make estimates of
the forecast future profitability of entities within the Group and
the likely certainty that these forecasts will be achieved. Where
the final outcome of such matters is different, or expected to be
different, from previous assessments made by management, a change
to the carrying value of income tax assets and liabilities will be
recorded in the period in which such determination is made. The
carrying value of deferred tax is disclosed in note 8.
Business combinations and goodwill
Business combinations are accounted for using the acquisition
method. The cost of an acquisition is measured as the aggregate of
the consideration transferred, measured at acquisition date fair
value and the amount of any non-controlling interest in the
acquiree. Payments made that are contingent on the vendors
continuing to be employed by the Group are treated as remuneration
and recognised within the administration cost line in the income
statement. For each business combination, the acquirer measures the
non-controlling interest in the acquiree either at fair value or at
the proportionate share of the acquiree's identifiable net
assets.
Any contingent consideration to be transferred by the acquirer
will be recognised at fair value at the acquisition date.
Subsequent changes to the fair value of the contingent
consideration which is deemed to be an asset or liability, will be
recognised in the income statement. If the contingent consideration
is classified as equity, it should not be remeasured until it is
finally settled within equity.
Goodwill is initially measured at cost being the excess of the
aggregate of the consideration transferred and the amount
recognised for non-controlling interest over the net identifiable
assets acquired and liabilities assumed. If this consideration is
lower than the fair value of the net assets of the subsidiary
acquired, the difference is recognised in the income statement.
After initial recognition, goodwill is measured at cost less any
accumulated impairment losses. For the purpose of impairment
testing, goodwill acquired in a business combination is, from the
acquisition date, allocated to each of the Group's cash-generating
units that are expected to benefit from the combination,
irrespective of whether other assets or liabilities of the acquiree
are assigned to those units.
Where goodwill forms part of a cash-generating unit and part of
the operation within that unit is disposed of, the goodwill
associated with the operation disposed of is included in the
carrying amount of the operation when determining the gain or loss
on disposal of the operation. Goodwill disposed of in this
circumstance is measured based on the relative values of the
operation disposed of and the portion of the cash-generating unit
retained.
Intangible assets
In accordance with IFRS 3 'Business Combinations', goodwill
arising on the acquisition of subsidiaries is capitalised and
included in intangible assets. IFRS 3 also requires the
identification of other intangible assets acquired. The method used
to value intangible assets is the 'Income Approach'. The Income
Approach indicates the fair value of an asset based on the value of
the cash flows that the asset might reasonably be expected to
generate.
Other intangible assets
Intangible assets acquired from a business combination are
capitalised at fair value as at the date of acquisition and
amortised over their estimated useful economic life. An intangible
asset acquired as part of a business combination is recognised
outside goodwill if the asset is separable or arises from
contractual or other legal rights. The estimated useful lives of
the intangible assets are as follows:
Customer relationships - three to twelve years;
Order backlog - one to three years;
Intellectual property and Software - one to seven years;
Patents - eight years; and
Trademarks - ten years.
Amortisation is charged to administration expenses in the
Consolidated Income Statement on a straight-line basis. Intangible
assets, other than development costs, created within the business
are not capitalised and expenditure thereon is charged to the
income statement in the period in which the expenditure is
incurred.
The carrying value of other intangible assets is reviewed for
impairment when events or changes in circumstance indicate that it
may be impaired. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent
of the impairment loss. The recoverable amount is estimated to be
the higher of the other intangible assets fair value less costs of
disposal and its value in use and is determined for an individual
asset, unless the asset does not generate cash flows that are
largely independent of those from other assets of groups of assets.
Where it is not possible to estimate the recoverable amount of an
individual asset, the Group estimates the recoverable amount of the
cash-generating unit to which it belongs.
Revenue recognition
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the Group and the revenue can be
reliably measured. Revenue is measured at the fair value of the
consideration received, excluding discounts, rebates, VAT and other
sales taxes.
Revenue from the sale of products is recognised when the risks
and rewards of ownership are transferred to the customer, which is
usually at the point at which goods are delivered to the
customer.
Licence income is recognised in accordance with the substance of
the agreement. Revenue from licence agreements which have no
significant remaining performance obligations is recognised where
there is persuasive evidence that an arrangement exists, delivery
has occurred, the fee is fixed or determinable and collectability
is probable.
Revenue arrangements may include the sale of products together
with installation and/or on-going support services. Where the
commercial substance of such a combination is that the individual
components operate independently of each other and fair values can
be attributed to each of the components, each are then recognised
in accordance with their respective policies.
Revenue from support contracts is spread evenly over the period
of the support contract.
Revenue derived from services billed to customers on a time and
materials or fixed-price basis represents the value of work
completed, including attributable profit, based on the stage of
completion achieved on each project. For time and materials
projects, revenue is recognised as services are performed. For
fixed-price projects, revenue is recognised according to the stage
of completion which is determined using the
percentage-of-completion method based on the Directors' assessment
of progress against key project milestones and risks, and the ratio
of costs incurred to total estimated project costs. The cumulative
impact of any revisions to the estimate of percentage-of-completion
of any fixed-price contracts is reflected in the period in which
such impact becomes known.
Revenue is presented as the gross amount billed to a customer
where it is earned from revenue from the sale of goods or services
as principal. Revenue is presented as the net amount retained where
it is earned through a commission or fee.
Accrued income
Accrued income represents revenue recognised to date less
amounts invoiced to customers. Full provision is made for known or
anticipated project losses.
Trade and other receivables
Trade receivables are recognised and measured at their original
invoiced amount less provision for any uncollectible amounts. An
estimate for doubtful debts is made when the collection of the full
amount is no longer probable. Bad debts are written off to the
income statement when they are identified. Financial assets are
initially measured at fair value and subsequently at amortised
cost.
Provisions
Provisions are recognised in the statement of financial position
when there is a present legal or constructive obligation as a
result of a past event, and it is probable that an outflow of
economic benefits will be required to settle the obligation and a
reliable estimate can be made of the obligation; discounting at a
pre-tax discount rate when the time value of money is material.
Onerous contract provisions are recognised for unavoidable costs of
meeting the obligations under a contract that exceed the economic
benefits expected to be received under it.
Income taxes
Current tax assets and liabilities are measured at the amount
expected to be recovered from or paid to the taxation authorities,
based on tax rates and laws that are enacted or substantively
enacted by the statement of financial position's date.
Deferred income tax is recognised on all temporary differences
arising between the tax bases of assets and liabilities and their
carrying amounts in the financial statements, with the following
exceptions:
-- where the temporary difference arises from the initial
recognition of goodwill or of an asset or liability in a
transaction that is not a business combination that at the time of
the transaction affects neither accounting nor taxable profit or
loss;
-- in respect of taxable temporary differences associated with
investments in subsidiaries, associates and joint ventures, where
the timing of the reversal of the temporary differences can be
controlled and it is probable that the temporary differences will
not reverse in the foreseeable future; and
-- deferred income tax assets are recognised only to the extent
that it is probable that taxable profit will be available against
which the deductible temporary differences, carried forward tax
credits or tax losses can be utilised.
Deferred income tax assets and liabilities are measured on an
undiscounted basis at the tax rates that are expected to apply when
the related asset is realised or liability is settled, based on tax
rates and laws enacted or substantively enacted at the statement of
financial position date.
The carrying amount of deferred income tax assets is reviewed at
each statement of financial position's date. Deferred income tax
assets and liabilities are offset, only if a legally enforceable
right exists to set off current tax assets against current tax
liabilities, the deferred income taxes relate to the same taxation
authority and that authority permits the Group to make a single net
payment.
Income tax is charged or credited to other comprehensive income
if it relates to items that are charged or credited to other
comprehensive income. Similarly, income tax is charged or credited
directly to equity if it relates to items that are credited or
charged directly to equity. Otherwise income tax is recognised in
the income statement.
Equity
Equity comprises the following:
-- Share capital represents the nominal value of equity shares.
-- Share premium represents the excess over nominal value of the
fair value of consideration received for equity shares, net of
expenses of the share issue.
-- The Capital redemption reserve represents the difference
between the proceeds received and the par value of the shares
bought back by the Company.
-- The Merger reserve represents the difference between the fair
value and the nominal value of shares issued on the acquisition of
Digital Barriers SAS (formerly known as Keeneo SAS), as merger
relief was applicable to this business combination.
-- The Translation reserve represents the impact of currency
translation on the foreign currency net investment in Thruvision
Inc and previously the foreign currency net investment in other
foreign subsidiaries which were disposed of as part of the disposal
of the Video Business.
-- Other reserves represented the difference between the
carrying value of the net assets acquired and shares issued in
consideration of the acquisition of Digital Barriers Services
Limited which was accounted for using the pooling of interests
method, and which was disposed of as part of the disposal of the
Video Business. The Profit and loss reserve represents the
cumulative total profit or loss attributable to shareholders,
excluding those items recognised in other reserves.
Research and development costs
Research expenditure is charged to the income statement in the
year in which it is incurred.
Expenditure incurred in the development of software and hardware
products for use or sale by the business, and their related
intellectual property rights, is capitalised as an intangible asset
only when:
-- technical feasibility has been demonstrated;
-- adequate technical, financial and other resources exist to
complete the development, which the Group intends to complete and
use;
-- future economic benefits expected to arise are deemed probable; and
-- the costs can be reliably measured.
Development costs not meeting these criteria are expensed in the
income statement as incurred. When capitalised, development costs
are amortised on a straight-line basis over their useful economic
lives once the related software and hardware products are available
to use. During the period of development the asset is tested for
impairment annually. Development costs with a value of GBPnil
(2017: GBPnil) have been capitalised in the period (see note
12).
Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated
depreciation and accumulated impairment losses. Such cost includes
the cost of replacing part of the plant and equipment and borrowing
costs for any long-term construction projects if the recognition
criteria are met. Subsequent expenditure is capitalised only when
it is probable that the future economic benefits associated with
the expenditure will flow to the Group. All other repair and
maintenance costs are recognised in administration expenses within
the Income Statement as these costs are incurred. Depreciation is
charged on the following bases to reduce the cost of the Company's
property, plant, and equipment to their residual values over their
expected useful lives at the following rates:
Leasehold improvements - 20% to 33% straight line;
Office furniture and equipment - 20% straight line;
Computer equipment - 33% straight line;
Motor vehicles - 25% straight line;
Demonstration stock - 20% to 50% straight line; and
Plant and Equipment - 20% to 33% straight line
The carrying value of property, plant and equipment is reviewed
for impairment when events or changes in circumstances indicate the
carrying value may be impaired.
An item of property, plant and equipment and any significant
part initially recognised is derecognised upon disposal or when no
future economic benefits are expected from its use or disposal. Any
gain or loss arising on derecognition of the asset (calculated as
the difference between the net disposal proceeds and the carrying
amount of the asset) is included in the income statement when the
asset is derecognised.
The residual values, useful lives and methods of depreciation of
property, plant and equipment are reviewed at each financial year
end and adjusted prospectively, if appropriate.
Inventories
Inventories are valued at the lower of cost and net realisable
value on a first-in first-out basis. In the case of finished goods,
cost includes all direct expenditure and production overheads based
on the normal level of activity. Where necessary, an appropriate
allowance is made for obsolete, slow-moving and defective
inventories. In certain instances stock items are used for
demonstration purposes, in this case the stock item is classified
as a fixed asset and depreciated in line with the Group
depreciation policy.
Trade and other payables
Trade and other payables are initially recognised at fair value.
Subsequent to initial recognition, they are measured at amortised
cost.
Cash equivalents
Cash and cash equivalents in the statement of financial position
comprise cash at bank and in hand and short-term deposits with an
original maturity of three months or less.
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.
Non-derivative financial assets
Non-derivative financial instruments comprise cash at bank,
trade and other receivables and trade and other payables. The Group
initially records the financial assets on the date they are
originated. All other financial assets (including assets designated
as at fair value through profit or loss) are recognised initially
on trade date, which is the date that the Group becomes a party to
the contractual provision of the instrument.
The Group derecognises a financial asset when the contractual
rights to the cash flows from the asset expire, or it transfers the
rights to receive the contractual cash flows in a transaction in
which substantially all the risks and rewards of ownership of the
financial asset are transferred. Any interest in transferred
financial assets that is created or retained by the Group is
recognised as a separate asset or liability.
Loans and receivables
Loans and receivables are financial assets with fixed or
determinable payments that are not quoted in an active market. Such
assets are recognised initially at fair value plus any directly
attributable transaction costs. Subsequent to initial recognition,
loans and receivables are measured at amortised cost using the
effective interest method, less any impairment losses.
Loans and receivables comprise of loans to related parties and
trade and other receivables.
Cash and cash equivalents comprise cash balances with original
maturities of three months or less.
Non-derivative financial liabilities
The Group initially recognises financial liabilities on the date
that they are originated. All other financial liabilities are
recognised initially on the trade date, which is the date that the
Group becomes a party to the contractual provisions of the
instrument.
The Group derecognises a financial liability when its
contractual obligations are discharged, cancelled or expire. The
Group classifies non-derivative financial liabilities into other
financial liabilities category. Such financial liabilities are
recognised initially at fair value less any directly attributable
transaction costs. Subsequent to initial recognition, these
financial liabilities are measured at amortised cost using the
effective interest method.
Foreign currency translation
The Group's consolidated financial statements are presented in
Sterling, which is also the Parent Company's functional currency.
Each entity in the Group determines its own functional currency and
items included in the financial statements of each entity are
measured using that functional currency.
Transactions in foreign currencies are initially recorded in the
entity's functional currency by applying the spot exchange rate
ruling at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are retranslated at
the functional currency rate of exchange ruling at the statement of
financial position's date. All differences are taken to the income
statement, except when hedge accounting is applied and for
differences on monetary assets and liabilities that form part of
the Group's net investment in a foreign operation. These are taken
to other comprehensive income until the disposal of the net
investment, at which time they are reclassified from equity to
profit or loss.
Non-monetary items that are measured in terms of historical cost
in a foreign currency are translated using the exchange rates as at
the dates of the initial transactions.
The assets and liabilities of foreign operations are translated
into Sterling at the rate of exchange ruling at the statement of
financial position's date. Income and expenses are translated at
weighted average exchange rates for the period where this is a
reasonable approximation of the actual rates. Where weighted
average exchange rates are not a reasonable approximation of the
actual rates, the actual exchange rates at the date of the
transaction are used. The resulting exchange differences are
recognised in other comprehensive income. On disposal of a foreign
entity, the deferred cumulative amount recognised in equity
relating to that particular foreign operation is recognised in the
income statement.
Retirement benefits
The Group operates a Group defined contribution personal pension
plan for certain employees. Pension costs are calculated annually
and charged to the income statement as they arise.
Share-based payments
Certain employees of the Group receive remuneration in the form
of awards under a Long Term Incentive Plan ('LTIP') in the form of
nil-cost options and HMRC Approved Options. The Group combines
Parallel Options at nil-cost with HMRC Approved Options so that the
value awarded to employees is not more than a Top-Up Award.
All awards made under the LTIP after 31 March 2015 are subject
to service conditions and performance conditions that relate to
revenue (with a profit related underpin) in the future. The total
amount to be expensed over the vesting period of the awards is
determined by reference to the fair value at the date at which the
awards or options are granted and the number of awards that are
expected to vest. The fair value is determined using the
Black-Scholes model. Expected volatility was determined taking into
account historic volatility of the Group's share price and the
volatility of similar companies' share price. The number of awards
expected to vest are adjusted to reflect the extent to which
non-market performance and service conditions are expected to be
satisfied, based on conditions prevailing at each statement of
financial position's date and up to the date of vesting. At the
vesting date, the cumulative expense recognised in the income
statement is adjusted to take account of the number of awards and
options that actually vest on the above basis. Parallel Options are
valued at the difference between the value of a Top-Up Award and an
HMRC Approved Option. At the date of grant, it was assumed that the
non-market performance conditions would be met. Adjustments are
made subsequently, where necessary, to reflect updated assessments
of whether non-market performance conditions will be met.
Certain employees of the Group receive remuneration in the form
of options awards under an Enterprise Management Incentive scheme
('EMI') in the form of HMRC Approved Options.
Awards made under the EMI scheme are subject to service
conditions but there are no performance conditions. The total
amount to be expensed over the vesting period of the awards is
determined by reference to the fair value at the date at which the
awards or options are granted and the number of awards that are
expected to vest. The fair value is determined using the
Black-Scholes model. Expected volatility was determined taking into
account historic volatility of the Group's share price and the
volatility of similar companies' share price. The number of awards
expected to vest are adjusted to reflect the extent to which
service conditions are expected to be satisfied, based on
conditions prevailing at each statement of financial position's
date and up to the date of vesting. At the vesting date, the
cumulative expense recognised in the income statement is adjusted
to take account of the number of options that actually vest on the
above basis.
Certain employees of the Group receive remuneration in the form
of options awards under an Unapproved Executive Share Option
Scheme.
Awards under the Unapproved Share Option Scheme are subject to
service conditions but there are no performance conditions. The
total amount to be expensed over the vesting period of the awards
is determined by reference to the fair value at the date at which
the awards or options are granted and the number of awards that are
expected to vest. The fair value is determined using the
Black-Scholes model. Expected volatility was determined taking into
account historic volatility of the Group's share price and the
volatility of similar companies' share price. The number of awards
expected to vest are adjusted to reflect the extent to which
service conditions are expected to be satisfied, based on
conditions prevailing at each statement of financial position's
date and up to the date of vesting. At the vesting date, the
cumulative expense recognised in the income statement is adjusted
to take account of the number of options that actually vest on the
above basis.
It is the intention of the Group that shares needed to satisfy
awards will be purchased in the market to the extent that they are
not already held by the Group's employee share trust, unless it is
in the interests of the Group to issue new shares.
Certain of the Executive Directors were issued an aggregate of
217,500 Incentive Shares. The Incentive Shares only reward
participants if shareholder value is created, thereby aligning the
interests of the Executive Directors with those of shareholders.
The Incentive Shares carried the right to 12.5% of any increase in
the value of the Company in excess of the retail prices index after
1 February 2010 (as described in note 17). The Incentive Shares do
not carry any voting or dividend rights and are not transferable
except in limited circumstances. The holders of Incentive Shares
can realise value from the shares either by converting them into
Ordinary Shares or by the Company, at its election, responding to a
request to so convert the shares by choosing to redeem them. They
are treated as equity-settled awards with a market vesting
condition. The fair value at the date at which the Incentive Shares
were acquired was determined using a Stochastic model. This
original fair value (GBP217,500) would be recognised as a current
liability on the statement of financial position as it becomes
repayable if the Executive Directors left office during the market
vesting period. There were nil incentive share in issue at 31 March
2018 (31 March 2017: nil).
At a General Meeting held on 27 December 2012, the terms
relating to the Incentive Shares were changed, triggering a
revaluation. The total amount to be expensed over the vesting
period of the modified Incentive Shares has been calculated in the
year by reference to the incremental fair value on 27 December 2012
of the modified Incentive Shares compared to the fair value on 27
December 2012 of the original Incentive Shares. This resulted in a
charge to the Consolidated Income Statement in the year of GBPnil
(2017: GBP5,000).
Employee Benefit Trust
The Thruvision Group plc Employee Benefit Trust (the 'Trust'),
which purchases and holds Ordinary Shares of the Company in
connection with employee share schemes, is included in the Group
financial statements. Any consideration paid or received by the
Trust for the purchase or sale of the Company's own shares is shown
as a movement in shareholders' equity.
Operating Leases
Leases in which a significant proportion of the risk and rewards
of ownership are retained by the lessor are classified as operating
leases. Operating lease rentals payable or receivable are charged
or credited to the income statement on a straight--line basis over
the lease term.
Adoption of new and revised International Financial Reporting
Standards
The Group's accounting policies have been prepared in accordance
with IFRS effective as for its reporting date of 31 March 2018.
The IASB issued amendments to four standards under Annual
improvement 2012-2014 cycle together with amendments to IAS 1.
These amendments had an effective date after the date of 1 January
2016 and have been applied by the Group.
These did not have a material impact on the Company's financial
statements in the period of initial application.
Standards Issued but not yet effective
The standards and interpretations that are issued, but not yet
effective, up to the date of issuance of the Group's financial
statements are disclosed below. The Group intends to adopt these
standards, if applicable, when they become effective.
IFRS 15 Revenue from Contracts with Customers
IFRS 15 was issued in May 2014 and establishes a five-step model
to account for revenue arising from contracts with customers. Under
IFRS 15, revenue is recognised at an amount that reflects the
consideration to which an entity expects to be entitled in exchange
for transferring goods or services to a customer.
The new revenue standard will supersede all current revenue
recognition requirements under IFRS. Either a full retrospective
application or a modified retrospective application is required for
annual periods beginning on or after 1 January 2018. Early adoption
is permitted.
The Group plans to adopt the new standard on the required
effective date using the modified retrospective method. During
2019, the Group will perform an assessment and adoption of IFRS 15
using the clarifications issued by the IASB in April 2016.
The Directors have not yet begun to assess the impact, and
therefore the impact is not yet known. During the year ended 31
March 2019, a study will be undertaken to fully understand and
identify the impact on:
1. Revenue recognition, and
2. Accounting for commission on sales. The Company will be
taking external legal advice and has set up a working committee to
review the following:
IFRS 15 considerations What is the issue?
Identify contracts IFRS 15, as specified by its name applies to contract
with customers with customers. Thruvision transacts both directly
with customers and via third parties. There is
a requirement to clearly identify who Thruvision's
customer is in relation to this standard, the
end customer or the third party who sold the product
to the end customer
--------------------------------------------------------
Identify each performance Review the inclusive services and products included
obligation in our in the customer purchase, and identify the distinct
contracts performance obligations from the inclusive ones
--------------------------------------------------------
Determining the transaction Variable consideration, rights of return as well
price as time value of money all need to be considered
--------------------------------------------------------
Allocate the transaction The transaction price will need to be allocated
price to the performance to each performance obligation on a stand-alone
obligations selling price basis
--------------------------------------------------------
Recognise revenue Consideration will need to be given if revenue
as performance obligations is recognised over time or at a point in time.
are satisfied Observable inputs need to be reviewed is an observable
sales price is not available
--------------------------------------------------------
Sales commission Currently Thruvision expenses all commissions
to the income statement as they are incurred.
Under IFRS 15, Thruvision will be required to
capitalise sales commission under certain conditions.
In this case, the amortised commissions, will
be matched over the period the relevant warranties
and services are provided
--------------------------------------------------------
IFRS 16 Leases
IFRS 16 was issued in January 2016 and it replaces:
1. IAS 17 Leases,
2. IFRIC 4 Determining whether an Arrangement contains a Lease,
3. SIC-15 Operating Leases-Incentives and
4. SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease.
IFRS 16 sets out the principles for the recognition,
measurement, presentation and disclosure of leases and requires
lessees to account for all leases under a single on-balance sheet
model similar to the accounting for finance leases under IAS
17.
The standard includes two recognition exemptions for lessees
-- leases of 'low-value' assets (e.g., personal computers) and
-- short-term leases (i.e., leases with a lease term of 12
months or less). At the commencement date of a lease, a lessee will
recognise a liability to make lease payments (i.e., the lease
liability) and an asset representing the right to use the
underlying asset during the lease term (i.e., the right-of-use
asset). Lessees will be required to separately recognise the
interest expense on the lease liability and the depreciation
expense on the right-of-use asset.
Lessees will be also required to remeasure the lease liability
upon the occurrence of certain events (e.g., a change in the lease
term, a change in future lease payments resulting from a change in
an index or rate used to determine those payments). The lessee will
generally recognise the amount of the remeasurement of the lease
liability as an adjustment to the right-of-use asset.
IFRS 16 also requires lessees and lessors to make more extensive
disclosures than under IAS 17.
IFRS 16 is effective for annual periods beginning on or after 1
January 2019. Early application is permitted, but
not before an entity applies IFRS 15. A lessee can choose to
apply the standard using either a full retrospective
or a modified retrospective approach. The standard's transition
provisions permit certain reliefs.
IFRS 16 Leases is, effective for periods commencing on or after
1 January 2019. The Directors will assess the impact of this
standard and the possible impact of any leases being capitalised on
the balance sheet. A full review is yet to take place. Due to the
transaction in October 2017 and growth of the business this will be
more appropriately reviewed during the year ended 31 March 2019.
The Group's lease commitments are detailed in note 20.
IFRS 9 Financial Instruments
The new standard for financial instruments (IFRS 9) introduces
extensive changes to IAS 39's guidance on the classification and
measurement of financial assets and introduces a new 'expected
credit loss' model for the impairment of financial assets. IFRS 9
also provides new guidance on the application of hedge
accounting.
Management has started to assess the impact of IFRS 9 but is not
yet in position to provide quantified information. At this stage
the main areas of expected impact are as follows:
-- the classification and measurement of the Group's financial
assets will need to be reviewed based on the new criteria that
considers the assets' contractual cash flows and the business model
in which they are managed
IFRS 9 is effective for annual reporting periods beginning on or
after 1 January 2018. The impact of this standard is being
considered by the Directors and any impact, especially around the
value of debtors, is yet to be fully investigated. It will be
completed in 2019.
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. Following its disposal on 31 October 2017 the Video
Business 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 screening 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.
2. Segmental information (continued)
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 transferred to the Video Business or ceased.
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.
Year ended 31 March 2018
Services Solutions Central
--------------- ---------------------------- --------------- ------------------------
Video
Services Business Thruvision Central Central Total
Discontinued Discontinued Continuing Discontinued Continuing
GBP'00 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ --------------- -------------- ------------ --------------- ------------- ---------
Total segment revenue - 13,129 3,103 - - 16,232
Revenue - 13,129 3,103 - - 16,232
------------------------ --------------- -------------- ------------ --------------- ------------- ---------
Depreciation - 218 182 - - 400
------------------------ --------------- -------------- ------------ --------------- ------------- ---------
Segment adjusted
operating
(loss) - (5,830) (752) (1,642) (1,720) (9,944)
Amortisation of
intangibles
initially recognised
on
acquisition - (716) - - - (716)
Share based payment
charge - - - (57) (52) (109)
Acquisition related
income - 1,126 - - - 1,126
Loss on disposal and
related
costs - (4,458) - - - (4,458)
Impairment of goodwill
and
intangibles - (4,291) - - - (4,291)
Segment operating
(loss) - (14,169) (752) (1,699) (1,772) (18,392)
Finance income - - - - 70 70
Finance costs - - - (469) (758) (1,227)
------------------------ --------------- -------------- ------------ --------------- ------------- ---------
Segment (loss) before
tax - (14,169) (752) (2,168) (2,460) (19,549)
Income tax (expense) (discontinued) (92)
----------------------------------------- -------------- ------------ --------------- ------------- ---------
Loss attributable to discontinued
operations (16,429)
----------------------------------------- -------------- ------------ --------------- ------------- ---------
Loss before tax from continuing
operations (3,212)
Income tax credit (continuing) 90
----------------------------------------- -------------- ------------ --------------- ------------- ---------
Loss for the year from continuing
operations (3,122)
----------------------------------------- -------------- ------------ --------------- ------------- ---------
Year ended 31 March 2017
Services Solutions Central
-------------- ---------------------------- --------------- ------------------------
Video
Services Business Thruvision Central Central Total
Discontinued Discontinued Continuing Discontinued Continuing
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
profit/(loss) (207) (16,244) (204) 793 (1,851) (17,713)
Finance income - - - 2 1,870 1,872
Finance costs - - - (175) (906) (1,081)
------------------------- -------------- -------------- ------------ --------------- ------------- ---------
Segment profit/(loss)
before
tax (207) (16,244) (204) 620 (887) (16,922)
Income tax credit
(discontinued) 113
------------------------- -------------- -------------- ------------ --------------- ------------- ---------
Loss attributable to
discontinued
operations (15,718)
------------------------- -------------- -------------- ------------ --------------- ------------- ---------
Loss before tax from
continuing
operations (1,091)
Income tax credit
(continuing) 129
------------------------- -------------- -------------- ------------ --------------- ------------- ---------
Loss for the year from
continuing
operations (962)
------------------------- -------------- -------------- ------------ --------------- ------------- ---------
2. Segmental information (continued)
Analysis of revenue by customer
There have been three (2017: one) individually material
customers in the Thruvision operating segment during the year.
These customers individually represented GBP779,000, GBP639,000 and
GBP576,000 of revenue for the year (2017: GBP1,001,000).
Other segment information
The following tables provides disclosure of the Group's
continuing and discontinued revenue analysed by geographical market
based on the location of the customer.
Continuing revenue
2018 2017
GBP'000 GBP'000
-------------------------------- --------- ---------
Europe, Middle East and Africa 1,286 1,158
Americas 413 854
Asia Pacific 1,404 12
-------------------------------- --------- ---------
3,103 2,024
-------------------------------- --------- ---------
Discontinued revenue
2018 2017
7 mths 12 mths
GBP'000 GBP'000
-------------------------- ---------- ----------
United Kingdom 975 2,257
Unites States of America 10,238 17,171
Indonesia 315 1,210
Rest of World 1,601 3,842
-------------------------- ---------- ----------
13,129 24,480
-------------------------- ---------- ----------
The Group's non-current assets by geography are detailed
below:
2018 2017
GBP'000 GBP'000
-------------------------- --------- ---------
United Kingdom 258 8,945
United States of America 22 20,643
-------------------------- --------- ---------
280 29,588
-------------------------- --------- ---------
3. Group operating loss
The Group operating loss attributable to continuing operations
is stated after charging/(crediting):
2018 2017
GBP'000 GBP'000
-------------------------------------------------------- --------- ---------
Operating lease rentals - land and buildings 106 101
Research and development costs 505 489
Bad debt expense 17 -
Depreciation of property, plant and equipment 189 160
Amortisation of intangible assets initially recognised
on acquisition - 98
Exchange differences (92) (102)
-------------------------------------------------------- --------- ---------
Note: as the above table is continuing operations only,
deprecation and intangibles won't reconcile to their respective
notes
3. Group operating loss (continued)
Auditors' remuneration
The following table shows an analysis of all fees payable to
Grant Thornton UK LLP (2017: Ernst & Young LLP), the Group's
auditors:
2018 2017
GBP'000 GBP'000
--------------------------------------------------------- --------- ---------
Audit services
Fees payable to the Company's auditor for the audit
of the financial statements 50 120
The audit of the Company's subsidiaries 20 20
--------------------------------------------------------- --------- ---------
70 140
--------------------------------------------------------- --------- ---------
Non-audit services
Fees payable to the Company's auditor for audit related
assurance services - 18
Tax compliance services - 33
Tax advisory services - 7
Other assurance services 23 -
--------------------------------------------------------- --------- ---------
23 58
--------------------------------------------------------- --------- ---------
Fees relate to all activities undertaken by Grant Thornton UK
LLP (2017: Ernst & Young LLP) in the period, covering
continuing and discontinued operations.
4. Adjusted loss before tax
An adjusted loss before tax measure has been presented as the
Directors believe that this is a better 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:
2018 2017
GBP'000 GBP'000
-------------------------------------------------- --------- ---------
Amortisation of intangibles initially recognised
on acquisition - 98
Share based payment (i) 52 113
Financing set up costs (ii) 263 421
-------------------------------------------------- --------- ---------
Total adjustments 315 632
-------------------------------------------------- --------- ---------
(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. Prior to July 2015 LTIP awards were 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) During the year end 31 March 2017 the Group obtained a new
facility, incurring legal and set up fees.
5. Loss per share
Unadjusted loss per share
Year ended Year ended
31 March 2018 31 March
2017
GBP'000 GBP'000
---------------------------------------- -------------- ------------
Loss from continuing operations
attributable to ordinary shareholders (3,122) (962)
----------------------------------------- -------------- ------------
Loss from continuing and discontinued
operations attributable to ordinary
shareholders (19,551) (16,680)
Weighted average number of shares 165,130,024 165,120,640
----------------------------------------- -------------- ------------
Basic and diluted loss per share
- continuing operations (1.89p) (0.58p)
----------------------------------------- -------------- ------------
Basic and diluted loss per share
- continuing and discontinued
operations (11.84p) (10.10p)
----------------------------------------- -------------- ------------
5. Loss per share (continued)
Adjusted loss per share
Year ended Year ended
31 March 31 March
2018 2017
GBP'000 GBP'000
Loss from continuing operations
attributable to ordinary shareholders (3,122) (962)
Amortisation of intangibles - 98
Share-based payment 52 113
Financing set up fees 263 421
Adjusted (loss)/profit after
tax (2,807) (330)
------------------------------------------- ------------ ------------
Weighted average number of shares 165,130,024 165,120,640
------------------------------------------- ------------ ------------
Basic and diluted loss per share (1.89p) (0.58p)
------------------------------------------- ------------ ------------
Basic and diluted adjusted (loss)/profit
per share (1.70p) (0.20p)
------------------------------------------- ------------ ------------
The inclusion of potential Ordinary Shares arising from LTIPs,
EMI Options and Incentive Shares would be anti-dilutive. Basic and
diluted loss per share has therefore been calculated using the same
weighted number of shares. Ordinary Shares would have been issued
in respect of the Incentive Share conversion. Full details of the
basis of calculation is given in the Admission Document available
on the Company's website. The Incentive Shares will immediately
vest on change of control of the Company.
6. Goodwill
Goodwill
GBP'000
---------------------------------------------------------------- ---------
At 1 April 2016 23,323
Adjustment to acquisition of Brimtek value (288)
Impairment of goodwill associated with Video Business division (7,500)
Exchange movements 1,541
---------------------------------------------------------------- ---------
At 31 March 2017 17,076
---------------------------------------------------------------- ---------
Impairment of goodwill associated with Video Business division (4,291)
Disposal of the Video Business division (12,151)
Exchange movements (634)
---------------------------------------------------------------- ---------
At 31 March 2018 -
---------------------------------------------------------------- ---------
Carrying amount of goodwill allocated to operating segments
2018 2017
GBP'000 GBP'000
---------------- ---------- ---------
Video Business - 17,076
Thruvision - -
---------------- ---------- ---------
- 17,076
--------------------------- ---------
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. Although
required to perform annual impairment tests, these do not have to
take place at 31 March but the test should be consistently carried
out at the same time annually.
The Group carries out its annual impairment testing as at March
each year. Impairment testing is only re-performed if an impairment
triggering event occurs in the intervening period. As a result of
the divestment the impairment review conducted at the annual
testing date was revisited to ensure the outcome remained
appropriate.
For continuing operations, value in use calculations are used to
determine the recoverable amount of the cash-generating units. The
key assumptions for the value in use calculations include the
forecast revenue growth of the CGU, cost allocations, the discount
rate applied and the long-term growth rate of the net operating
cash flows, along with the gross margin for sales. In determining
the key assumptions, management have taken into consideration the
nature of the markets in which it operates, expected growth of the
markets in which it operates, the ability of the CGU to exploit
those opportunities and the current economic climate, the resulting
impact on expected growth and pre-tax discount rates, and the
pressure this places on impairment calculations.
6. Goodwill (continued)
The Group prepares cash flow forecasts for the cash-generating
unit based on the most recent three-year detailed financial
forecasts. At 31 March 2017, the Video Business had not been
re-classified as a disposal group held for sale, and the table
below sets out the key assumptions included in the forecasts at 31
March 2017:
Video Business
2017
--------------------------------------------- ---------------
Revenue growth compound from FY17 to FY20
(years one to three) (1) 25%
Revenue growth from FY20 onwards (year four
onwards) (2) 2.0%
Gross margin improvement compound from FY17
to FY20 (years one to three) (3) 6%
Discount rate (4) 11.1%
---------------------------------------------- ---------------
(1) Forecasts are based on an internal assessment of the
strength of the CGU in the markets in which it operates with the
expected growth reflecting the opportunities in its core strategic
markets, sales pipeline and relationships being developed.
(2) Revenue growth of 2.0% (2006: 2.5%) is an external estimate
of the UK's long-term growth rate .
(3) Gross margin is forecast to improve against FY17 as the
product mix continues to evolve through the next three years to
include a greater proportion of software sales together with
revenues generated by the legacy Brimtek business (which attract a
lower gross margin) forming a decreasing percentage of total
revenues.
(4) Discount rate is based on the weighted cost of capital
applying to businesses in the same sector, and reflects the current
market assessments of the time value of money and of the risks
specific to the cash generating units.
An impairment loss of GBP7.5 million arose in the year ended 31
March 2017 for the Video Business based on these base
assumptions.
As indicated in the interim results announcement on 15 December
2017, on 7 October 2017 the Board signed an agreement for the
disposal of the Video Business segment. Consequently the
recoverable amount of the Video Business CGU in the six months
ended 30 September 2017 was based on fair value less costs of
disposal. As a result the carrying value of the goodwill
attributable to the Video Business segment was reduced to
GBP12,151,000 in the six months ended 30 September 2017 and an
impairment charge GBP4,291,000 has been included in the loss
attributable to discontinued operations. The goodwill balance of
GBP12,151,000 was subsequently written off on completion of the
disposal and included in the loss attributable to discontinued
operations.
7. Trade and other receivables
Gross Provision Net carrying Gross Provision Net carrying
carrying for impairment amounts carrying for impairment amounts
amounts amounts
2018 2018 2018 2017 2017 2017
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- ---------- ---------------- ------------- ---------- ---------------- -------------
Trade receivables 620 (17) 603 6,388 (376) 6,012
Prepayments 132 - 132 616 - 616
Accrued income 10 - 10 168 - 168
Social security and other
taxes 41 - 41 718 - 718
Other receivables 443 - 443 142 - 142
1,246 (17) 1,229 8,032 (376) 7,656
--------------------------- ---------- ---------------- ------------- ---------- ---------------- -------------
The Group's credit risk on trade and other receivables is
primarily attributable to trade receivables and amounts recoverable
on contracts. Two customers represent GBP513,000 (2017: two
customers GBP2,382,000) of the Group's trade receivables at 31
March 2018. There is no other significant concentration of credit
risk.
The Group believes that the carrying amounts of the Group's
trade receivables by the type of customer gives a fair presentation
of the credit quality of the assets:
2018 2017
GBP'000 GBP'000
---------------------- --------- ---------
Government customers 57 2,491
Commercial customers 546 3,521
---------------------- --------- ---------
603 6,012
---------------------- --------- ---------
Trade receivables of GBP46,000 (2017: GBP2,704,000) were past
due but not impaired; trade receivables of GBP36,000 (2017:
GBP2,560,000) are past due and stated after reflecting a partial
impairment.
7. Trade and other receivables (continued)
The movement in the provision for doubtful debts is as
follows:
GBP'000
---------------------------------------------- --------
At 1 April 2016 431
Provided in period 150
Utilised (51)
Released (158)
Foreign exchange 4
---------------------------------------------- --------
At 31 March 2017 376
---------------------------------------------- --------
Provided in period - continuing operations 17
Provided in period - discontinued operations 648
Utilised -
Released - discontinued operations (1,024)
Foreign exchange -
---------------------------------------------- --------
At 31 March 2018 17
---------------------------------------------- --------
Trade receivables, net of an allowance of GBP17,000 (2017:
GBP376,000) for doubtful debts, are aged as follows:
2018 2017
GBP'000 GBP'000
---------------------------------------------------------- --------- ---------
Not due 539 3,308
Not more than three months past due 35 617
More than three months but not more than six months past
due 11 -
More than six months past due 18 2,087
---------------------------------------------------------- --------- ---------
603 6,012
---------------------------------------------------------- --------- ---------
The Group experiences credit risk which reflects its early stage
of development into international markets with challenging
political landscapes and sometimes protracted payment cycles. This
is reflected in the provision for doubtful debts and ageing
analysis and the fact that at 31 March 2017 the Group had an
extended debtor in Asia Pacific, where a delayed project
implementation resulted in the likely replacement of the local
partner by the contracting government agency. Whilst legally
contracted, fulfilled and invoiced, and government agency
confirmation of their intent to continue the project and implement
the Group's technology the Group elected to write down the overdue
debtor. The debtor was held in the Video Business which has now
been disposed of, and the net impact on the income statement was
GBP1.9 million in the year ended 31 March 2017.
8. Trade and other payables
2018 2017
GBP'000 GBP'000
--------------------------------- --------- ---------
Current
Trade payables 732 5,115
Accruals 549 1,735
Deferred income 106 349
Social security and other taxes 64 359
Other payables 4 350
--------------------------------- --------- ---------
1,455 7,908
--------------------------------- --------- ---------
On 17th October 2016 the Group replaced an existing GBP5.0
million secured working capital facility for export activities 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 operating activities. The facility was secured by a
fixed and floating charge over the Group's assets and includes
covenants which were tested quarterly. The facility was not being
utilised at 31 March 2017, but was utilised during the year ended
31 March 2018 prior to the disposal of the Video Business. No
banking covenants were breached and waivers to covenants tests were
agreed with Investec during the testing period. In addition to this
secured facility, 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 was not drawn on. Following completion of the Video Business
the Investec facility was repaid in full and both facilities
cancelled.
9. Share capital
Number GBP'000
------------------------------------------------ ------------ --------
Authorised, allotted, called-up and fully paid
Ordinary Shares of 1 pence each
------------------------------------------------ ------------ --------
At 1 April 2016 165,106,239 1,651
------------------------------------------------ ------------ --------
Shares issued in the year 23,785 -
------------------------------------------------ ------------ --------
At 31 March 2017 165,130,024 1,651
------------------------------------------------ ------------ --------
Shares issued in the year - -
------------------------------------------------ ------------ --------
At 31 March 2018 165,130,024 1,651
------------------------------------------------ ------------ --------
Number GBP'000
---------------------------------------------------------- --------
Authorised, allotted, called-up and fully paid
Deferred Shares of GBP1 each
-------- --------
At 31 March 2017 163,124 163
------------------------------------------------- -------- --------
At 31 March 2018 163,124 163
------------------------------------------------- -------- --------
GBP'000
---------------------------- --------
Total share capital
---------------------------- --------
At 31 March 2017 and 2018 1,814
---------------------------- --------
In July 2016, 23,785 shares were issued in the year (2015:
45,329 Ordinary Shares) for nil consideration to certain employees
as a bonus payment.
Of the 163,124 incentive shares outstanding as at 31 March 2015,
none converted into Ordinary Shares. Initial provision had not been
made in the Articles for the circumstance whereby Incentive Shares
were valued at nil and did not convert into Ordinary Shares on the
conversion date. On 21 September 2015, a new class of Deferred
share in lieu of Incentive shares was created so that Incentive
Shares which did not convert to Ordinary Shares on the relevant
conversion date converted into Deferred Shares with very limited
rights and value. Accordingly, 108,749 shares were converted into
deferred shares of GBP1 each on 21 September 2015, with a further
54,375 shares on 15 February 2017.
Further details are set out in note 17.
10. Related party transactions
Remuneration
The remuneration of Directors and other members of key
management, recognised in the income statement, is set out below in
aggregate. Key management are defined as the Board of Thruvision
Group plc and other persons classified as 'persons discharging
managerial responsibility' under the rules of the Financial Conduct
Authority. Currently no employees outside of the Directors are
classified as 'persons discharging managerial responsibility'.
2018 2017
GBP'000 GBP'000
------------------------- --------- ---------
Directors' remuneration 889 983
Pension contributions 3 5
892 988
------------------------- --------- ---------
The highest paid Director received GBP284,000 (2017: GBP334,000)
in the year, with GBP1,000 in pensions contributions (2017:
GBP3,000). Key management compensation comprises short--term
employee benefits (including national insurance) of GBP1,012,000
(2017: GBP1,119,000), pension contributions of GBP3,000 (2017:
GBP5,000) and share-based payments of GBP66,000 (2017:
GBP99,000).
The Directors acquired shares in the year as detailed below:
2018 2017
GBP'000 GBP'000
Tom Black 2,030,012 -
Colin Evans 1,064,346 -
Paul Taylor 153,838 -
------------ ---------- ---------
10. Related party transactions (continued)
The following deferred shares were issued to Directors.
2018 2017
GBP'000 GBP'000
------------- ---------- ---------
Tom Black - 27,817
Zak Doffman - 13,594
Colin Evans - 13,594
------------- ---------- ---------
- 55,005
------------------------ ---------
Other interest in shares
Other interests in shares of the Directors are included in the
Remuneration report on page [40].
Loan facility
Herald Investment Trust provided the Group with a GBP5.25
million working capital facility as detailed in note 1. This
facility was unsecured with no covenants attached to it, but
otherwise was on principally the same financial terms as the
Investec facility as detailed in note 15, with interest payable at
10% over 3 month Libor.
Tom Black is a member of the Herald Investment Trust Board and
is also a director of Thruvision Group plc.
Herald Investment Trust holds 15,329,712 ordinary shares in
Thruvision Group plc equating to 9.28% of the issued share capital
of the Group.
11. Post balance sheet event
Capital reduction
On 12 March 2018, the Group announced its intention to return up
to GBP8 million to shareholders, and in order to be able to
undertake that it proposed a cancellation of the Share Premium
Account and Capital Redemption Reserve. The cancellation was
approved at the General Meeting held on 28 March 2018, and was
subsequently confirmed by the High Court on 1 May 2018. As a result
GBP109,078,000 and GBP4,786,000 was cancelled from the Share
Premium Account and Capital Redemption Reserve respectively
creating distributable reserves of GBP113,864,000.
12. Disposal group classified as held for sale
Video Business
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 payable subject to the Video
Business securing a specific trading contract within 12 months
following completion. Further amounts will become payable
contingent upon the successful collection of an old debt from a
customer in South East Asia and any sales of a specific category of
inventory. The Board have assessed the likely amount recoverable
from these contingent events as GBP405,000, which is included
within Other Receivables (see note 14). The sale completed on 31
October 2017. The sale included a number of the Group's
subsidiaries (see note 26).
The following are attributable to the disposal group:
Income statement
2018 2017
7 mths 12 mths
GBP'000 GBP'000
--------------------------------------------------- ---------- ----------
Revenue 13,129 24,480
Cost of sales (10,603) (15,503)
--------------------------------------------------- ---------- ----------
Gross Profit 2,526 8,977
--------------------------------------------------- ---------- ----------
Expenses (11,240) (20,057)
Acquisition related income 1,126 627
Release of deferred consideration - 2,329
Loss on disposal and exit costs (4,458) -
--------------------------------------------------- ---------- ----------
Pre-tax loss for discontinued operation (12,046) (8,124)
Impairment of goodwill and intangibles on valuing
at fair value less costs of disposal (4,291) (7,500)
--------------------------------------------------- ---------- ----------
Loss before tax attributable to discontinued
operation (16,337) (15,624)
--------------------------------------------------- ---------- ----------
Income tax credit/(expense) (92) (113)
--------------------------------------------------- ---------- ----------
Loss after tax attributable to discontinued
operation (16,429) (15,511)
--------------------------------------------------- ---------- ----------
Memo:
Loss of Services division held for sale (below) - (207)
------------------------------------------------- --------- ---------
Loss after tax attributable to discontinued
operations per Income Statement (17,130) (15,718)
------------------------------------------------- --------- ---------
No tax arises on disposal.
The loss arising on the disposal of the Video Business,
including costs of disposal, was GBP4,458,000, which is included
within the GBP17,130,000 loss as shown on the Income Statement.
12. Disposal group classified as held for sale (continued)
Breakdown of loss on disposal
2018
GBP'000
----------------------------------------------------- ---------
Loss as disclosed on consolidated statement of cash
flows
(difference between net assets and net cash) (2,085)
------------------------------------------------------ ---------
Contingent consideration recognised 405
Translation reserve release on disposal (708)
Costs of disposal and exit costs (2,070)
------------------------------------------------------ ---------
Loss on disposal and exit costs (4,458)
------------------------------------------------------ ---------
Loss per share - discontinued operations
Loss Profit
attributable Weighted attributable Weighted
to discontinued average Discontinued to discontinued average Discontinued
operations number loss per operations number profit
2018 of shares share 2017 of shares per share
GBP'000 2018 No. 2018 Pence GBP'000 2017 No. 2017 Pence
------------------ ----------------- ------------ ------------- ----------------- -------------- -------------
Basic and diluted
loss per share (17,130) 165,130,024 (10.37) (15,718) 165,120,640 (9.52)
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.
Cash flows
Cash flows attributable to the disposal group include:
2018 2017
GBP'000 GBP'000
----------------------------------------------------- --------- ---------
Net cash flows attributable to operating activities (15,459) (1,958)
Net cash flows attributable to investing activities 19,245 (256)
Net cash flows attributable to financing activities 7,166 (127)
----------------------------------------------------- --------- ---------
Cash flows from discontinued operations 10,952 (2,341)
----------------------------------------------------- --------- ---------
Effect of disposal on the financial position of the Group
2018
GBP'000
------------------------------------------- ---------
Property, plant and equipment 520
Goodwill 12,251
Other intangible assets 10,033
Inventories 6,382
Trade and other receivables 6,651
Cash and cash equivalents 928
Trade and other payables (15,493)
-------------------------------------------- ---------
Net assets and liabilities 21,272
Consideration received, satisfied in cash 19,187
Net cash inflow 19,187
-------------------------------------------- ---------
Reconciliation to cashflow note
Net proceeds 19,187
Less net assets disposed of (21,272)
------------------------------ ---------
Loss per cashflow note 2,085
12. Disposal group classified as held for sale (continued)
Included within trade and other payables disposed of was an
amount of GBP7,635,000 drawn on the Investec facility which was
directly repaid by Volpi Capital LLP on completion of the
transaction.
Until the date of disposal, the trade of the Thruvision business
and its assets and liabilities were undertaken as division of
Digital Barriers Services Limited. As part of the disposal
transaction, the assets and liabilities of the division were
transferred to Thruvision Limited. The value of the net assets
transferred was GBP2,931,000. The consideration for the transfer
was GBP7,300,000 settled through the issue of consideration shares
to Digital Barriers Services Limited. The consideration shares were
then transferred to Thruvision Group plc as settlement of an
outstanding amount of GBP7,300,000 due from Digital Barriers
Services Limited to Thruvision Group plc.
Services division
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 that 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.
The following are attributable to the disposal group:
Income statement
2018 2017
GBP'000 GBP'000
------------------------------------------------------ ---------- ---------
Revenue - 243
Cost of sales - (387)
Expenses - (62)
Exit costs - (1)
------------------------------------------------------ ---------- ---------
Pre-tax loss for discontinued operation - (207)
Impairment of goodwill and intangibles on valuing at
fair value less costs of disposal - -
------------------------------------------------------ ---------- ---------
Loss attributable to discontinued operation - (207)
------------------------------------------------------ ---------- ---------
Income tax expense - -
------------------------------------------------------ ---------- ---------
No tax arises on disposal.
Loss per share - discontinued operations
Profit
Loss attributable Weighted attributable Weighted
to discontinued average Discontinued to discontinued average Discontinued
operations number loss per operations number profit
2018 of shares share 2017 of shares per share
GBP'000 2017 No. 2018 Pence GBP'000 2017 No. 2017 Pence
Basic loss per
share - 165,130,024 - (207) 165,122,209 (0.13)
Diluted loss per
share - 165,130,024 - (207) 165,122,209 (0.13)
-------------------- ------------------- ------------ ------------- ----------------- ------------ -------------
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.
12. Disposal group classified as held for sale (continued)
Cash flows
Cash flows attributable to the disposal group include:
2018 2017
GBP'000 GBP'000
---------------------------------------------------- --------- ---------
Net cash flows attributable to operating activities - -
Net cash flows attributable to investing activities - -
Net cash flows attributable to financing activities - -
---------------------------------------------------- --------- ---------
Assets and liabilities
As at 31 March 2018 the carrying amount of assets and
liabilities classified as held for sale are as follows:
Carrying Carrying
amount after amount after
classification classification
as held for as held for
sale sale
2018 2017
GBP'000 GBP'000
------------ ---------------- ----------------
Inventories - -
------------ ---------------- ----------------
13. Publication of non-statutory accounts
The above does not constitute statutory accounts within the
meaning of the Companies Act 2006. It is an extract from the full
accounts for the year ended 31 March 2018 on which the auditor has
expressed an unmodified opinion and does not include any statement
under section 498 of the Companies Act 2006. The accounts will be
posted to shareholders on or before 10 July 2018 and subsequently
filed at Companies House.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR MMGZVLKLGRZM
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June 26, 2018 02:00 ET (06:00 GMT)
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