Final Results

RNS Number : 7826E

Rosslyn Data Technologies PLC

31 October 2022

 

31 October 2022

Rosslyn Data Technologies plc

("Rosslyn", the "Group" or the "Company")

Final Results

Rosslyn (AIM: RDT), the provider of a leading cloud-based enterprise data analytics platform, announces its final results for the year ended 30 April 2022.

Financial summary*

· Adoption of revised policy on development costs, in line with industry best practices

· Revenue from continuing and discontinued** operations for FY22 was £5.9m

o  Revenue for continuing operations was £2.7m (2021 restated: £3.6m) due to the churn in the customer base during restructuring and before the new platform was introduced

· Decrease in total administrative expenses in FY22 to £4.5m (2021 restated: £4.7m)

· Adjusted EBITDA*** for FY22 from continuing and discontinued operations was a loss of £2.4m (£3.4m loss under the previous accounting policy of expensing development costs)

o  Adjusted EBITDA from continuing operations was a loss of £3.7m (2021 restated:  loss of £1.8m)

· Debt free with net cash of £2.4m as at 30 April 2022 (30 April 2021: net cash of £5.8m)

o  Net cash as at 30 September 2022 was £882k prior to receipt of sale proceeds from both Langdon Systems and Integritie

* See the Financial Review for further detail on the restatement of accounts

** Integritie and Langdon Systems are classified as discontinued operations for the purpose of the statutory accounts

*** Adjustments made are for exceptional items and share-based payments

Operational and strategic highlights

· Major restructuring, enabling all efforts to be focussed on a single core product and a SaaS business model

· Launch of the new and improved Rosslyn Platform, with customer migration now nearing completion

· Rebranding to present Rosslyn as a modern visionary business, focussing on a single product comprising a best-in-class solution

· New operational leadership team, which now consists of 80% new employees all from the B2B SaaS enterprise software space, with proven track records of executing successful turnaround projects

· New go-to-market strategy focussed on leveraging partnerships to grow adoption of the Rosslyn Platform at scale resulting in some notable client wins

· New KPIs introduced from this year that are in line with the industry best practice and aimed at driving an entrepreneurial operating model in a fully collaborative environment

· Significant new client wins including a top 10 global pharmaceutical business, a top 3 global beverage company, a top 5 UK law firm and, post period, a Tier-1 Japanese bank via the partnership with ChainIQ and a three-year £500k contract with a multinational medtech corporation with an option to extend for a further two years

· Post period, value-accretive divestment of Langdon Systems for £100k in cash and in advanced discussions with regards to the sale of Integritie, which is expected to complete shortly

Paul Watts, CEO of Rosslyn, said: "During this financial year, we underwent a fundamental restructuring of our business and refreshed our product, team, brand and go-to-market strategy. We are now focussed on our core Rosslyn Platform, which we believe offers a best-in-class solution for procurement analytics, particularly for complex cases. The customer migration to our new platform is almost complete and we have been receiving great feedback, which is excellent vindication of the investment that we have made. We have also secured some notable wins from our new partner-led go-to-market approach. This, combined with a strong pipeline and expected reduced cash burn following the disposal of non-core operations, means we are now in growth execution mode. Accordingly, we expect to start seeing the fruits of our investment come through in the current and next financial year, and we look forward to reporting on our progress."

This announcement contains inside information

Enquiries

Rosslyn
Paul Watts, Chief Executive Officer James Appleby, Chairman	[phone]
Cenkos Securities (Nominated adviser and Broker)
Stephen Keys/Camilla Hume	[phone]
Gracechurch Group (Financial PR)
Harry Chathli/Claire Norbury	[phone]

About Rosslyn

Rosslyn (AIM: RDT) provides an award-winning spend analytics and predictive analytics platform. The Rosslyn Platform helps organizations with diverse supply chains mitigate risk and make informed strategic decisions. It leverages automated workflows, artificial intelligence and machine learning to extract and consolidate procurement data providing visibility of complex supplier data, enabling supplier spend savings and delivering rapid ROI.   For more information visit www.rosslyn.ai    

Chairman's Statement

The year to 30 April 2022 has been one of transformation for Rosslyn. We started the year with a new CEO, Paul Watts, who implemented a full-scale strategic and operational review - taking into account our product set, our team and our go-to-market strategy. The outcome of this exercise was the decision to trim the business back to its core strengths - to focus on where we really excel and what we are best known for, which is spend analytics.

The delivery of this vision involved a significant restructuring of our company. A fundamental element of this was the decision to dispose of Integritie and Langdon Systems, which have limited crossover with our core business in terms of customer base or strategic rationale. Given the challenging market conditions that have prevailed over the past year, this process has taken longer than we had hoped. However, we were pleased to have completed the disposal of Langdon Systems at the beginning of October 2022 and we are in advanced negotiations regarding the disposal of Integritie, which we expect to complete in the coming weeks. A further announcement will be made on this as appropriate.

Alongside this, we put great effort into the development of our core Rosslyn product, with the upgraded platform being launched post period. As Paul discusses in his CEO Review, our product is now better designed to meet our customers' needs and we are receiving excellent feedback from those that have been migrated to the new platform. 

Having reviewed our go-to-market strategy, we moved to a partner-led approach, which involves strengthening and expanding our existing partnerships as well as establishing others. Under this model, some partners serve as introducers while others service the end customer - both of which increase our reach within the market. While it is still relatively early days, we have already generated some notable wins from this approach.

A further element of our transformation was the restructuring of our core team. While working hard to retain certain key staff below the senior level, we have completely refreshed the management team with the aim of creating a culture of a high energy, high growth software business. Importantly, this new team was involved in helping to set the new strategy that we are now following. Under the leadership of Paul, who is an extremely experienced business builder with invaluable expertise in driving SaaS companies, we now believe we have the right core team in place with the energy to drive the business forward. 

Accordingly, we believe we are now well positioned for growth. While it is still early days and our journey won't be without bumps in the road, we are starting to see results. We have a much stronger pipeline, a much stronger retention rate and a much happier customer base. We are focused on doing one thing and doing that one thing really well as a high-growth ARR-based software business.

I would like to thank all our staff and our stakeholders for their support as we undergo this transition. We believe that by delivering on our vision, we will generate value for our shareholders and I look forward to doing so. Hugh Cox and Ash Mehta stepped down from the Board during the year under review and, as I said in my statement last year, we thank them for their contributions. I would also like to express my gratitude to Barney Quinn who, in line with best practice corporate governance, will be retiring from the Board before his ninth anniversary in April 2023. Barney is working with the Board to assist in the identification of a suitable successor.

With our refreshed product, team and strategy, we exited the year in a far stronger position than when we entered it - and, indeed, than at any point in our recent history. We are now working hard to deliver on this strategy and I look forward to reporting on our progress.

CEO's Review

Introduction

The last financial year was an important turning point in our business development. We are now at the very end of a major restructuring, resulting in a refocusing on a single core product and a SaaS business model. With a refreshed operational leadership team, we have also renewed our go-to-market strategy to a partner-led approach.

We solidified Rosslyn's leadership position in procurement analytics for the most complex and high-volume enterprise requirements, which is reflected in us having $1.4 trillion of spend under management on a month-to-month basis. The ability to help enterprises with the most complex problems through making data visible, understandable and insightful for procurement departments  is what Rosslyn is known for. Our product is relied on by some of the world's leading companies, with new customers added this year including a top 10 global pharmaceutical business, a top 3 global beverage company and a top 5 UK law firm. 

We heavily invested during the financial year to build a solid foundation and, whilst this had a corresponding impact on our earnings for this year, we now have a solid platform for growth and expect to start seeing the fruits of this investment come through in the current and next financial year.

Market opportunity

We feel that our investments are well-timed as the market opportunity for Rosslyn continues to grow. The macroeconomic and geopolitical landscape is the most complex it has ever been. With stretched supply chains, compounded by events such as the conflict in Russia-Ukraine, it is crucial to leverage all data available to manage risks and make strong strategic procurement decisions. Combined with this, there is a growing requirement for taking ESG factors into account in procurement - from a risk management and ethical business perspective. This can only be achieved with specialised technology with strong data aggregation and analytical capabilities. At the same time, there has been an under investment by corporates in procurement and risk technology, which is further driving demand for solutions such as ours.

Rosslyn has an advantage of 15 years' experience in the space. We are very good at helping enterprises clean and digest their data easily to make strategic decisions deep within their supply chain. Coupled with other competitive advantages and a timely restructuring, I believe that Rosslyn is well positioned to capitalise on these market opportunities in the coming years.

Platform

Focusing on our platform, I would like to emphasise our unique selling proposition:

· 15 years' experience means that we've seen it all and have built a platform that can cater for even the most unexpected scenarios.

· We can handle the most complex data landscapes with multiple sources and source locations.

· We have unmatched data extraction capabilities, which we strive to continuously improve and automate as much as possible to improve our utility to larger scale organisations.

We've put the customer experience at the centre of our business, with a laser focus on ensuring they extract maximum value from our solution.

We have now migrated almost all of our clients to the new platform, and I am happy to report strong customer, partner and analyst endorsement. For the last three years, Rosslyn has been named on the "50 to know" list by Spend Matters, a provider of procurement solutions intelligence, where the overall score combines analysts' evaluation and customers' feedback. This recognition is a testament to how we have been able to make continuous improvements within our own platform, enabling our clients to make data driven decisions with confidence. Hitherto, in Spend Matters' SolutionMap ranking, we have been a Solution Leader, which is based on product strength. This year's ranking is expected to be published in the coming months and I am hopeful that the refreshed Rosslyn will transition to a Value Leader, which reflects the level of service we give to our customers as well as the strength of our product.

The new Rosslyn Platform delivers a simplified, more intuitive interface and streamlined navigation, making it easier for users to quickly gather the insight they need. The collaboration functions have been improved to facilitate the sharing of dashboards and reports with key stakeholders across a business. There is also a closer integration between data and visualisation, including features such as enabling specialist teams within customer organisations to have their own tailored view of procurement data. Users want to spend more time on the new platform and we are also pleased to see customers growing the number of users of the platform, reflecting the value that it offers. Our aim is to provide our customers with a single source of truth, from all of their internal and external data, that can be leveraged across their organisation.

Customer Advisory Board and ESG

Towards the end of the year, Rosslyn held the inaugural meeting of its Customer Advisory Board and immediately began implementing some of the recommendations. In particular, we have started incorporating a broader range of data - such as related to supply chain risk, sustainability and diversity - into the analytics alongside supplier spend data. We still have a way to go in terms of tracking and analysing a wide range of ESG metrics across the supply chain, but we are making good progress and we were delighted, post period, to implement our first contract where the customer had appointed us specifically for our ability to provide diversity data.

Now that the migration of our clients to the new platform is almost complete, and the first results are in, we will soon hold another meeting of the Customer Advisory Board as continuous improvement is essential to stay ahead in the very dynamic area of procurement. Moving forward , we will be looking at key areas for innovation within the Rosslyn Platform, such as AI, machine learning and ESG tracking.

Rebranding

Along with the new platform one of the major initiatives this year was a rebranding programme, which completed post year end, to refresh Rosslyn's appearance making it more engaging for today's market and aligning it with the new direction of the business. In particular, we are now branded simply as 'Rosslyn' to reflect the strategic focus on a core SaaS platform.  

The rebrand has brought great results both in terms of interaction with the Rosslyn brand and in terms of the generation of new opportunities. Where a year ago there was very limited traffic on our website, now we are averaging 8,000 interactions a month.

Partner-led development

With the new platform, the new brand and a new sales and marketing team, we are now focused on executing on our strategy to have a partner-led approach to business development. This involves increasing our business with existing partners as well as establishing new partnerships. We believe we have best-in-class partner onboarding and support systems, and in the coming financial year, we expect to increase the number of partners that we have in execution mode.

While we are still in the early stages of implementing this strategic shift in our go-to-market model, we are already seeing some great results. Post period, we won a contract for the international arm of a tier 1 Japanese bank via our partnership with Chain IQ. Since forming the partnership last year, Chain IQ and Rosslyn have undertaken a number of successful proof-of-concepts with potential customers, with this new contract representing the first to transition to a full enterprise customer. We are confident that more will follow in the near term. We also won a three-year £500k contract with a multinational medtech corporation, with an option to extend for a further two years, which came via a new partner of ours.

Divestment

To be able to move faster and in a more focused manner, we decided to divest all non-core businesses - namely, Integritie, which is a content management platform, and Langdon Systems, which specialises in bulk handling of supply chain data associated with import and export duty management systems. Divesting of these non-core parts of the business will provide us with far greater strategic and operational focus on our primary product - the Rosslyn Platform - as well as reduce cash burn. We sold Langdon Systems in October 2022 for £100k, generating value from the sale and providing working capital that will enable us to accelerate the execution of our growth strategy, and we expect to complete the disposal of Integritie in the coming weeks.

On a similar note, during the year there was a focus on exiting non-profitable business lines to enable us to prioritise larger contracts. While the sales cycle for such contracts is longer, the end result is more valuable.

KPIs

As discussed in the Finance Review, we have established new KPIs by which we will measure the success of the business. These KPIs are in line with industry best practice for B2B SaaS enterprise software businesses - with the most important metric being annual recurring revenue (ARR) growth. Through clear and appropriate KPIs, we are empowering the new leadership team with an entrepreneurial operating model to drive their line of business in a fully collaborative environment.

Outlook

Looking ahead, Rosslyn is now in growth execution mode. We have done a lot of heavy lifting in the last 12-18 months on the product, the brand, the team and the go-to-market model and we are now looking to get a return on those investments in the short term while continuing to strengthen the foundations of the business to deliver sustainable growth in the long term.

Trading in the first half of FY23 to 30 September 2022 has been as expected and we believe we are close to completing the disposal of Integritie. Accordingly, and with a good pipeline for the rest of the year, we remain on track to deliver increased revenue for the full year, in line with market expectations and look to the future with confidence. 

Financial Review

The Group's results reflect the transitional nature of the year under review as the business underwent a comprehensive restructuring and invested in the development and launch of the new Rosslyn Platform. 

Discontinued operations

Integritie and Langdon Systems have been classed as discontinued operations for the period and historical comparisons restated on that basis.

Change of accounting policy and costs allocation

As previously mentioned, the Group has updated its accounting policy on development costs under accounting standard IAS38 - Intangible Assets, which means such costs are now capitalised as opposed to expensed. This policy is in line with the standard accounting approach for software companies and is to provide readers with more transparency and facilitate benchmarking of performance. In addition, cost of sales hitherto only included platform & hosting, but has now, as a result of the introduction of improved reporting systems, been expanded to incorporate other elements, such as support and customer success management, which were previously classified as administrative expenses. We believe this will enable a more accurate and transparent benchmarking of our business in terms of gross margin. As noted above, the figures for the year under review reflect the transitional nature of the business during the period and we have strategies in place to improve our performance going forward.

Profit and loss account

Revenue for the year for continuing and discontinued operations was £5.9m. Revenue for continuing operations was £2.7m (2021 restated: £3.6m) due to the churn in the customer base as we underwent our restructuring, and with the period under review being largely before the new platform was introduced. Gross margin was 16.6% (2021 restated: 49.0%) reflecting lower revenue as well as cost of sales increasing to £2.3m (2021 restated: £1.8m) due to higher prices for platform and hosting as a result of a renegotiation of a contract with a key supplier.

Total administrative expenses were reduced to £4.5m (2021 restated: £4.7m), but increased as a percentage of revenue as a result of the investment into marketing of the new product.

Historically the Group has expensed its development costs but, following an improvement in its reporting facilities, the Company can now distinguish between research and development costs. Accordingly, the Company is now able to capitalise development costs in accordance with accounting standard IAS 38 - Intangible Assets.

Operating loss stood at £4.0m (2021 restated: £2.9m loss). Adjusted EBITDA for continuing operations was a loss of £3.7m (2021 restated: £1.8m loss), which includes the capitalisation of development costs. For continuing and discontinued operations, adjusted EBITDA was £2.4m loss including the capitalisation of development costs and £3.4m loss excluding the capitalisation of development costs.

The loss before income tax for the year was £4.1m (2021 restated: £3.0m loss). This includes share-based payment charge of £161k (2021 restated: £194k).

Cash flow and funds

Cash used in operating activities was £2.7m (2021 restated: £774k).

Cash balance at the year-end was £2.4m (2021: £6.7m). During the year, we repaid the secured loan in full (£890k). At the end of the financial year, we had no outstanding debt.

Net cash at the year-end stood at £2.4m (2021: net cash £5.8m).

Balance sheet

The major movements in the balance sheet during the year were:

· Trade and other receivables reducing to £820k (2021 restated: £2.4m)

· The decrease in cash, as described above

· Assets held for sale amounting to £650k (2021 restated: £nil) representing the intended divestment of Integritie and Langdon Systems

· Current trade and other payables were reduced to £2.3m (2021 restated: £4.5m) as current deferred revenue fell to £0.9m (2021 restated: £2.8m) due to the reduction in revenue and changes in timing for invoicing customers

· The repayment of debt, as described above

· Liabilities directly associated with assets held for sale amounting to £1.5m (2021 restated: £nil), as described above

Material uncertainty

As discussed in note 2 to the financial statements, the Board of Directors of Rosslyn considers the Company to be a going concern. However, if the Group is unable to deliver upon the proposed sale of Integritie, its proposed revenue projections or, alternatively, proposed cost reductions, there is limited headroom in the current forecasts and as such there is considered to be a material uncertainty relating to going concern. As noted above, the Directors are confident that the disposal of Integritie will be complete in the coming weeks and that the Group is on track to meet its projections. The independent auditors' report is not modified in respect of this matter. The financial statements do not include any adjustments that would result if the Company were unable to continue as a going concern. For further details, refer to the 'Going Concern' section in note 2 to the financial statements.

Key metrics

Commencing from this year, we have introduced new Key Performance Indicators ("KPIs") for measuring our progress. As previously mentioned, we have chosen these metrics as they are better suited for a high-growth, SaaS-based business. As this is the first year that we have introduced these KPIs, we do not have comparative figures, but are providing the results for the year to 30 April 2022 as a base measure for moving forward. As discussed further in our annual report and accounts, which is being published today, our KPIs now comprise: weighted pipeline, annual recurring revenue (ARR) growth, gross margin, customer acquisition cost (CAC) payback, net revenue retention, cash burn rate and net profit/(loss). We look forward to reporting on our progress against these KPIs going forward.

Consolidated statement of comprehensive income

for the year ended 30 April 2022

					Restated*
			Year ended	Restated	Year ended
		30 April	30 April	30 April	30 April
		2022	2022	2021	2021
	Note	£'000
			£'000	£'000	£'000
Continuing operations
Revenue	3		2,731		3,585
Cost of sales			(2,278)		(1,830)
Gross profit			453		1,755
Admin expenses			(4,464)		(4,683)
Analysed As
Administrative expenses		(4,287)		( 4,536)
Other operating income		-		89
Depreciation and amortisation		(40)		(42 )
Share-based payments		(137)		(194)
		(4,464)		(4,683)
Operating loss			(4,011)		(2,928)
Finance income			5		34
Finance costs			(44)		(124)
Loss before income tax			(4,050)		(3,018)
Income tax			391		486
Loss for the year for continued operations			(3,659)		(2,532 )
Profit for the year from discontinued operations	5		297		560
Other comprehensive income - translation differences			19		(2)
Total comprehensive income			(3,343)		(1,974)

Loss per share		Pence	Pence
Basic and diluted loss per share: ordinary shareholders - Continued	4	1.07	0.77
Basic and diluted loss per share: ordinary shareholders - Total	4	0.98	0.60

* 2021 was restated due to discontinued activities (note 5) and also a change of disclosure of costs from Administration to cost of sales (note 6) .

The accompanying notes form part of these financial statements.

Consolidated statement of financial position

as at 30 April 2022

	Note	30 April 2022 £'000	30 April 2021 £'000
Assets
Non-current assets
Intangible assets		1,105	994
Property, plant and equipment		16	55
Right-of-use assets		236	73
		1,357	1,122
Current assets
Trade and other receivables		820	2,354
Corporation tax receivable		161	309
Cash and cash equivalents		2,433	6,681
		3,414	9,344
Total current assets		4,771	10,466
Disposal group assets	5	650	-
Total assets		5,421	10,466
Liabilities
Non-current liabilities
Trade and other payables		(168)	(386)
Deferred tax		-	(73)
		(168)	(459)
Current liabilities
Trade and other payables		(2,284)	(4,489)
Financial liabilities - borrowings		-	(890)
Total current liabilities		(2,284)	(5,379)
Disposal group liabilities	5	(1,547)	-
Total liabilities		(3,999)	(5,838)
Net assets/(liabilities)		1,422	4,628
Equity
Called up share capital		1,699	1,699
Share premium		18,923	18,923
Share-based payment reserve		255	657
Accumulated loss		(24,485)	(21,662)
Translation reserve		(103)	(122)
Merger reserve		5,133	5,133
Total equity		1,422	4,628

The accompanying notes form part of these financial statements.

Consolidated statement of changes in equity

for the year ended 30 April 2022

		Called up share capital £'000	Accumulated loss £'000	Translation reserve £'000	Share-based payment reserve £'000	Share premium £'000	Merger reserve £'000	Total equity £'000
Balance at 1 May 2020		965	(19,707)	(120)	470	12,777	5,133	(482)
Loss for the year		-	(1,972)	-	-	-	-	(1,972)
Other comprehensive income		-	-	(2)	-	-	-	(2)
Issue of share capital		734	-	-	-	6,618	-	7,352
Expenses on raising capital		-	-	-	-	(472)	-	(472)
Share-based payment transaction		-	17	-	187	-	-	204
Balance at 30 April 2021		1,699	(21,662)	(122)	657	18,923	5,133	4,628
Balance at 1 May 2021		1,699	(21,662)	(122)	657	18,923	5,133	4,628
Loss for the year		-	(3,362)	-	-	-	-	(3,362)
Other comprehensive income		-	-	19	-	-	-	19
Lapsed options		-	539	-	(539)		-	-
Share-based payment transaction		-	-	-	137	-	-	137
Balance at 30 April 2022		1,699	(24,485)	(103)	255	18,923	5,133	1,422

The merger reserve arises from the Group reorganisation that occurred on 23 April 2014. Rosslyn Data Technologies plc acquired Rosslyn Analytics Limited in a share for share transaction. There was no change in rights or proportions of control in the Group as a result of this transaction. As common control exists IFRS 3 was deemed to not apply and this has been accounted for as a capital reorganisation. The difference between the share capital and share premium of the Company and the share capital and share premium of Rosslyn Analytics Limited at 23 April 2014 is recognised in the merger reserve.

The translation reserve comprises translation differences arising from the translation of financial statements of the Group's foreign entities (Rosslyn Analytics,Inc.) into sterling (£).

The accumulated loss reserve includes all current and prior period retained profits and losses.

The share-based payment reserve comprises the fair value of options granted under the Group's Enterprise Management Incentive Scheme, less reductions for those options that lapsed during the year.

The accompanying notes form part of these financial statements.

Consolidated statement of cash flows

for the year ended 30 April 2022

		Year ended 30 April 2022 £'000	Year ended 30 April 2021 £'000
Cash flows used in operating activities
Cash used in operations		(2,653)	(774)
Finance income		5	34
Finance costs		(44)	(124)
Corporation tax received		467	301
Net cash used in operating activities		(2,225)	(563)
Cash flows used in investing activities
Purchase of property, plant and equipment		(28)	(66)
Acquisition of software		(1,105)	-
Net cash used in investing activities		(1,133)	(66)
Cash flows generated from financing activities
New loans in year		-	-
Repayment of borrowings		(890)	(364)
Proceeds from share issuance		-	7,352
Costs of share issuance		-	(472)
Net cash generated/(used) in financing activities		(890)	6,516
Net increase/(decrease) in cash and cash equivalents		(4,248)	5,887
Cash and cash equivalents at beginning of year		6,681	794
Cash and cash equivalents at end of year		2,433	6,681

Reconciliation of loss before income tax to cash used in operations

	Year ended 30 April 2022 £'000	Year ended 30 April 2021 £'000
Loss before income tax	(3,343)	(2,458)
D e p r e c i a t i on , amortisation and impairment charges	40	1,106
Share-based payment transactions	137	204
Finance income	(5)	(34)
Finance costs	44	124
	(3,127)	(1,058)
Decrease in trade and other receivables	875	(317)
Increase/(decrease) in trade and other payables	(401)	601
Cash used in operations	(2,653)	(774)

The accompanying notes form part of these financial statements.

Notes to the consolidated financial statements

for the year ended 30 April 2022

1. General information

Rosslyn Data Technologies plc (the "Company") is a company incorporated and domiciled in the UK. It is quoted on AIM, part of the London Stock Exchange Market. The address of the registered office is 1000 Lakeside North Harbour, Western Road, Portsmouth, Hampshire, PO6 3EN. The Company is the ultimate parent company of Rosslyn Analytics Limited and Rosslyn Data Management Limited, companies incorporated in the UK, and the ultimate parent company of Rosslyn Analytics, Inc., a company incorporated in the USA (collectively, the "Group"). The Group's principal activity is the provision of data analytics using a proprietary form, data capture, data mining and workflow management.

2.  Accounting policies

Basis of preparation

The principal accounting policies adopted in the preparation of the financial statements are set out in our annual report and accounts for the year ended 30 April 2022. The policies have been consistently applied to all the years presented, unless otherwise stated.

The Group financial statements have been prepared under the historical cost convention subject to fair valuing certain financial instruments and in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006.

Going concern

Information on the business environment and the factors underpinning the Group's future prospects and product portfolio are included in the CEO's statement. The cash balance at 30 April 2022 was £2.4m and the Group subsequently sold Langdon for £100k on the 30 September 2022, and there is the impending sale of Integritie. The Group has performed prudent scenario analysis on revenue and cost performance. These demonstrate that the Group can meet its liabilities as they fall due.

After making appropriate enquiries, the Directors consider that it is appropriate to adopt the going concern basis in preparing the consolidated financial statements, Accordingly, the financial statements do not include any adjustments which would be required if the going concern basis of preparation was deemed to be inappropriate. However, if the Group is unable to deliver upon the proposed sale of Integritie, its proposed revenue projections, or alternatively proposed cost reductions, there is limited headroom in the current forecasts and as such there is considered to be a material uncertainty which may cast significant doubt on the Group's ability to continue as a going concern.

3. Segmental reporting

Management has determined the operating segments based on the operating reports reviewed by the Executive Directors that are used to assess both performance and strategic decisions. Management has identified that the Executive Directors are the Chief Operating Decision Maker in accordance with the requirements of IFRS 8 Operating segments.

The determination is that the Group operates as a single segment, as no internal reporting is produced either by geography or division. The Group views performance on the basis of the type of revenue, and the end destination of the client as shown below.

	Year ended 30 April 2022 £'000	Year ended 30 April 2021 as restated £'000
Annual licence fees	2,414	3,148
Professional services	317	437
Total revenue	2,731	3,585

Analysis of revenue by country	Year ended 30 April 2022 £'000	Year ended 30 April 2021 as restated £'000
United Kingdom	1,643	1,800
Europe	414	1,001
North America	674	784
Total revenue	2,731	3,585

Included in Europe is the Netherlands which had revenues of £158,000 in the Year ended 30 April 2022 (2021: £575,000). Included in North America is the USA which had revenues of £674,000 in the Year ended 30 April 2022 (2021: £784,000).

Analysis of future obligations:	Year ended 30 April 2022 £'000	Year ended 30 April 2021 £'000
Performance obligations to be satisfied in the next year	1,763	1,728
Performance obligations to be satisfied after 30 April 2023	1,426	1,224
Total future performance obligations	3,189	2,952

There were no significant customers who make up greater than 10% of total revenue in the year. The following revenue arose from the Group's largest customer in each year:

	Year ended 30 April 2022 £'000	Year ended 30 April 2021 £'000
Annual licence fees	199	394
Professional services	8	8
Total revenue	207	402

 

4. Loss per share

Basic earnings per share is calculated by dividing the net loss for the year attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share is calculated by dividing the net loss for the year attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on the conversion of all dilutive potential ordinary shares into ordinary shares.

	Year ended 30 April 2022	Year ended 30 April 2021
Loss for the year attributable to the owners of the parent	£3,367,000	£1,972,000
Weighted average number of ordinary shares	339,862,521	328,655,751
	Pence	Pence
Basic and diluted loss per share: ordinary shareholders - continued	1.07	0.77
Basic and diluted profit per share: ordinary shareholders - discontinued	(0.09)	(0.17)
Basic and diluted loss per share: ordinary shareholders	0.98	0.60

As the Group recorded a loss for the year, the basic and diluted loss per share are the same amount.

5. Discontinued operations

In order to deliver the Group's emphasis on the Rosslyn product a decision was taken to dispose of the Langdon Systems and Integritie parts of the Group. The Langdon Systems sale was completed post year end on the 30 September 2022, with the Integritie sale expected to complete shortly, as such these reported as discontinued operations for the current period. The associated assets and liabilities were consequently presented as held for sale in the 2022 consolidated statement of financial position. The results of Langdon Systems and Integritie was presented as discontinued operations in the current year statement of comprehensive income. The prior year statement of comprehensive income was also restated to show the results of the discontinued operations. Financial information relating to the discontinued operation for the Group is set out below.

Statement of comprehensive income

	30 April 2022 £'000	Year ended 30 April 2022 £'000	30 April 2021 £'000	Year ended 30 April 2021 £'000
Discontinued operations
Revenue		3.140		3,832
Cost of sales		(958)		(962)
Gross Profit		2,184		2,870
Admin expenses		(1,885)		(2,310)
Analysed as
Administrative expenses	(943)		(1,236)
Depreciation and amortisation	(942)		(1,064)
Share-based payment	-		(10)
	(1,885)		(2.310)
Operating profit		297		560
Finance income		-		-
Finance costs		-		-
Profit before income tax		297		560
Income tax		-		-
Total comprehensive income for discontinued operations		297		560

S tatement of financial position

 

The major classes of asset and liabilities held for sale at 30 April 2022 are, as follows

		30 April 2022 £'000
Assets
Non-current assets
Intangible assets		62
Property, plant and equipment		17
Right-of-use assets		60
		139
Current assets
Trade and other receivables		511
Corporation tax receivable		-
Cash and cash equivalents		-
		511
Disposal of Group assets		650
Liabilities
Non-current liabilities
Trade and other payables		195
Deferred tax		-
Financial liabilities - borrowings		-
		195
Current liabilities
Discontinued operations held for sale
Trade and other payables		(1,352)
Financial liabilities - borrowings		-
		(1.352)
Disposal of Group liabilities		(1,547)
Net liabilities directly associated with disposal		(897)

Before the classification of Langdon Systems and Integritie as discontinued operations, the recoverable amount was estimated for the assets and no impairment loss has been identified.

6. Prior year restatement

 

 Consolidated statement of comprehensive income

for the year ended 30 April 2022

		Year	Discontinued	Reclassification	Restated*
		Ended	operations	of costs	Year ended
		30 April	30 April	30 April	30 April
		2021	2021	2021	2021
		£'000	£'000	£'000	£'000
Revenue		7,417	(3,832)	-	3,585
Cost of sales		(1,316)	962	(1,476)	(1,830)
Gross profit		6,101	(2,870)	(1,476)	1,755
Administrative expenses		(7,248)	1,236	1,476	(4,536)
Other operating income		89	-	-	89
Depreciation and amortisation		(1,106)	1,064	-	(42)
Share-based payments		(204)	10	-	(194)
		(8,469)	2,310	1,476	(4,683)
Operating ( loss)/profit		(2,368)	(560)	-	(2,928)
Finance income		34	-	-	34
Finance costs		(124)	-	-	(124)
Loss before income tax		(2,458)	(560)	-	(3,018)
Income tax		486	-	-	486
Loss for the year		(1,972)	(560)	-	(2,532)
Other comprehensive income		(2)	-	-	(2)
Total comprehensive income		(1,974)	(560)	-	(2,534)

 

* The restatement of the prior year for the discontinued operations has been disclosed in note 5.

For the reclassification of costs it was decided by the Board, that a better representation of the gross profit of the Group would be shown if cost of sales included the salaries and associated costs of staff employed, who were directly involved with the product. In order for this year and the prior year to be comparable a restatement to the prior year was required.

 

END

 

 

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