Half-year Report

RNS Number : 1436V

Rosslyn Data Technologies PLC

26 January 2017

 

Rosslyn Data Technologies plc

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

Unaudited Group Interim Financial Statements for the six months ended 31 October 2016

Rosslyn, a leading global data technology company, which has developed smart technologies that are enabling companies of all sizes to turn their complex data into meaningful information, announces its

interim results for the six months ended 31 October 2016.

Financial Highlights

·      Group revenues of £1,666,577, with two revenue items together totalling some £250,000 concluded just outside the period end (2015: £1,821,517)

·      EBITDA loss decreased 17% to £1,074,174 (2015: £1,290,170)

·      Loss before tax decreased 18% to £1,081,665 (2015: £1,316,412)

·      Net Cash at 31 October 2016 £0.7m (2015: £2.6), which increased to approximately £878,000 as at 25 January.

·      Subscription revenue remains strong

Operational and Strategic Highlights

·      Strategic Partnership with Genpact, a leading Global BPO firm, is deepening and we have recently announced a global relationship with Dun and Bradstreet ("DnB") which has generated a significant amount of interest and leads.

·      RDT was the only non US company selected as one of three Finalists for the 'Microsoft Global Partner of the Year - Data Platform' award;

·      Customer wins include a major logistics company, a global media company and extensions into new territories for our defence contractor clients;

·      Customer churn rates remain low at below 5%; and

·      Board remains focused on achieving cash flow break-even during the current financial year.

Post Period Highlights

·      Existing clients continue to extend their accounts - near 100% increase in committed monthly revenues from a global defence contractor and extensions of contracts in 5 major clients beyond their initial terms;

·      New product introduced, "RAPid One Click" - a new partner based tool from which clients can more effectively tap into all the data held within their diverse ERP platforms. The Board believes this is a  scalable and potentially disruptive tool which simplifies the spend analysis market whilst expanding the offering of the RDT platform;

·      Sales pipeline remains healthy and is growing with new partners being added and direct clients being at the forefront.

Roger Bullen, Chief Executive, said, "We have made significant progress during the first half of the year and I am extremely pleased with the quality and breadth of our partners. Although it has taken longer than we had anticipated to monetise these relationships, I remain confident in our partner strategy.  The quality of these partnerships and the number of others that we are in talks with, I believe, validates our partnership strategy as they recognise the scalability and utility of our platform.  Furthermore this increased recognition has led to us being presented with potential acquisition opportunities, which, I believe, adds a further exciting avenue for us to explore when appropriate.  The Company is now, more than ever I think, better positioned to take full advantage of the growth within the data analytics arena."

Enquiries:

Rosslyn Data Technologies plc	Roger Bullen, Chief Executive Officer Lance Mercereau Chief Marketing Officer	[phone] [phone]
Cenkos Securities - Nominated Adviser, Broker	Stephen Keys Camilla Hume	[phone]

Notes to Editors

Rosslyn Data Technologies plc, (AIM: RDT), a leading provider of a Cloud-based enterprise data analytics platform, was founded in 2005 by Charles Clark and Hugh Cox. Business Intelligence was ranked first in the top ten technology priorities for Chief Information Officers in 2012 by Gartner. The Company provides analytical services by combining four key technologies: data extraction; cleansing; enrichment; and visualisation, through a single cloud platform enabling users with detailed data to make more informed decisions. Rosslyn's RAPid platform is the Group's primary product available to its multinational customers, including, Babcock Corporate Services plc, Xerox Business Services and Coca-Cola Enterprises, Inc. Rosslyn Data Technologies plc is the ultimate holding company of the Group and owns 100 percent of Rosslyn Analytics Limited.

Further information can also be found on the Company's website at:  www.rosslynanalytics.com

Chief Executive Review

Since taking over as CEO my strategic focus has been on developing a multi-purpose Dynamic Data Architecture and building a scalable technology platform.  This focus has enabled us to develop comprehensive benchmarking modules for the US Direct and Partner markets which has led to the US side of the business accelerating during the current financial year, especially with Partners leveraging the enhanced RAPid One-Click offering.  The benefits of our technologies have attracted a number of important partnerships such as DnB, Genpact, and others.  I have focussed on ensuring the completion of the platform's Dynamic Architecture within the Microsoft Azure cloud solution.  This has helped to ensure global scalability for all modules and capabilities so that RDT can be the provider of choice for all clients and partners who are seeking to better understand and maximise the use of their data. The success of this focus is most notably evidenced through our improved win loss ratio in competitive bids. 

Clients are seeing the benefits of running a real-time analytics capability on a simplified and easy to use platform. RAPid enables customers to extend functionality, benchmark, build new applications and be interoperable with their other business applications and technologies.  We believe that it is a key tool for teams and departments looking to maximise the use of data and advanced analytics.

The plans and the objectives we have set out ourselves remain on track.  The investments we have made in our platform and our tools and the recognition we are receiving from clients and industry participants provides us with positive feedback and assures us that our clients are benefiting from Rosslyn's products. We are pleased that we have been able to increase our average price regularly in a highly competitive environment and have shown an ability to integrate extremely complex and varied data sources.

At the same time we have focused on improving our product and have introduced, what we consider to be, a truly scalable offering that does not require individual client modification. This new product, "One-Click", allows us to implement projects within 2 to 4 weeks from signature, a significant reduction from previous timelines.

I am also pleased to report that our focus on costs and cash collections continues to improve and that the scalability of our product offering is significantly higher than 12 months ago. Our Sales performance provides us more opportunity for improvement, and our relationship with Dun and Bradstreet has opened up a wider opportunity of leads than we had anticipated. This would require additional investment in the US market, something that we are keen to do, whilst being mindful of our target for cash flow break-even.

Underpinning the progress is our talented and skilled team innovating smart solutions to complex data problems, which is widening the sphere of sales opportunities.  This is being played out through our growing list of clients, which include many leading global businesses, and importantly the increasing number of partnerships we are establishing across the globe.  These partnerships have provided us with access to large firms with their substantial sales teams expose our technology capabilities to more and much larger customers than could normally be achieved by a Company of Rosslyn's size. During the period we secured notable customer wins, with one partner leveraging the platform to deliver 23 client projects. Our task now is to turn those projects into continuing revenue streams as quickly as possible.

Our sales teams continue to gain momentum. During the period we have seen an increase in the time that our larger clients have taken to sign-off on projects and a shorting of contract lengths for some proposals. However, one key metric that continues to grow is our average contract value which is now more than £75,000 per annum, an increase of more than 50% from that at the time of the IPO.   Revenue growth from our installed customer base continues to be ahead of the churn rate and, we believe, is evidence of success in our "land and expand" strategy as well as recognition of the value of Rosslyn's technology.  

We remain focussed on achieving cash flow break-even during the current financial year and, consistent with the Group's working capital cycle, we have seen the Company's cash balance grow since the period end, standing at £878,000 as at 25 January 2017.  We are pleased with the number of leads that are being generated in the US and see a significant opportunity there.  We will continue to assess the balance of expanding our sales team in the US in order to capitalise on the opportunity there as well as evaluating potential acquisition opportunities alongside us achieving our goal of reaching cash flow break even. 

We remain confident that, supported by strong contracted revenue visibility and new business momentum, we will continue to build on the progress made in the first half of the year and are confident that the Company will have positive outcome for the year. This combination of progress and opportunity does, I believe, put the Company in an exciting position for the rest of this year and beyond.

Business Review

The six months to 31 October 2016 saw the Company continue to generate market traction, with new contracts won with large enterprises including a leading logistics company and a leading US based Global Media Company.

We are focused on expanding our sales and marketing teams particularly in the US where we see the market opportunity with our partners to be key in delivering significant growth. We will continue to do this through focusing on large enterprises in key industry segments by introducing dedicated partner managers whose focus is on establishing deep and trusted relationships with these strategic accounts.  Supporting each of these areas is an expanding customer success team who support not just the success but also the expansion of the footprint of the platform in each account. The growth that we can pursue would require investment. Accordingly, we continue to manage our resources conservatively and assess the balance of investment to capture opportunities in the US and elsewhere as they are presented to us, with the goal of achieving cash flow break even during this financial year. 

The Company's sales pipeline is growing as expected and I am pleased to report that we are in contract negotiations with a number of large enterprises and look forward to updating shareholders in due course.  On the partner front, our focus is on making our existing partners ever more effective in selling the benefits of the platform through which we extend and scale our sales capability. 

As we see the market demand for analytics grow, we are aware of the need to enhance our product offering and to introduce new features to our product. Our reputation in the space has led to a number of opportunities for growth coming from third parties.  As a board we continue to evaluate the merits of these and in particular those that would deliver, significant revenue streams, cost optimisation and modern technology features that would enhance our product offering and, importantly increase the functionality and diversity of our platform.

Financial Review

Group revenues decreased by 8.5% to £1,666,577 (2015: £1,821,517, with the decrease being principally being the result of a one off £200,000 re-seller agreement signed in October 2015 and two contracts of £80,000 and £170,000, which were negotiated in the first half of FY2017, being deferred to December2016. Both of these have now been invoiced and the majority of the cash collected..

EBITDA loss decreased by 17% to £1,074,174 (2015: £1,290,170) and there was also a 18% decrease in the loss before tax of £1,081,665 (2015: £1,316,412).

The basic and diluted loss per share for the period was improved to 1.19p (2015 (1.75p).

Net cash at the end of the six month period was £0.7m (2015: £2.6m). Cash consumed in the first half equated to £1.2m (2015: £2.1m).

Cash consumption was in line with expectations set for the year. We continue to invest into the development of the RAPid product and increasingly into the sales and marketing effort. It is expected that the payback on this continuing investment will be seen in the months ahead and we look forward to the achieving the real potential we see from the partner interest in our technology.

Average headcount in the period decreased to 45 (2015: 49) as we improve the scalability of our platform and reduce the reliance on "human resource services".

Prospects

The second half of the year has begun well with a number of new contract wins as well as expansion within our current customer portfolio.

RDT has been short listed as the preferred vendor in both the US and UK for potential new contracts which cover a number of new exciting verticals and applications for RDT and we look forward to updating shareholders in due course.  This progress has been accelerated through the involvement of Dun and Bradstreet signing our global partnership agreement. Our recognition as one of Microsofts' data platform finalists is a strong endorsement of our technology and, we believe, positions RDT's RAPid platform and its associated data technologies within the ecosystem of one of the emerging and principal players in the cloud analytics space.    

The research and development team continues to execute on an exciting schedule of improvements and new technologies, which are being released into full production during the second half of this financial year.  Of note, we expect to deliver our clients' predictive analytical capabilities whilst increasing the number of data sources from which our customers can enrich their source data, social media and other unstructured data sources alongside a multitude of macro-economic and compliance indices. We expect this to improve our customers' risk analytics and compliance reporting capabilities with information and insights to support their strategic decision making.

The Directors are pleased with the progress made to date and believe that the Company is increasingly well positioned to take advantage of the business opportunities that are available. The RAPid platform is emerging as a recognised and well regarded technology in this large, growing market place and, through our continued and disciplined execution, we expect progress to continue. 

 

Unaudited Consolidated Income Statement
for the Period Ended 31 October 2016
		Unaudited	Unaudited	Audited Year ended 30 April 2016
		6 Months ended 31 October 2016	6 Months ended 31 October 2015
	Notes	£	£	£
Revenue	4	1,666,577	1,821,517	3,869,050
Cost of sales		(360,452)	(136,425)	(481,269)
GROSS PROFIT		1,306,125	1,685,092	3,387,781
Other operating income		-	-	45,535
Administrative expenses		(2,402,545)	(3,002,527)	(5,819,195)
OPERATING LOSS		(1,096,420)	(1,317,435)	(2,385,879)
Finance costs		-	-	-
Finance income		14,755	1,023	11,058
LOSS BEFORE INCOME TAX		(1,081,665)	(1,316,412)	(2,374,821)
Income tax		100,000	-	256,878
LOSS FOR THE YEAR		(981,665)	(1,316,412)	(2,117,943)
Other comprehensive income		80,676	-	(14,908)
TOTAL COMPREHENIVE INCOME		(900,989)	(1,316,412)	(2,132,851)
	6	Pence	Pence	Pence
Basic and diluted loss per share		1.19	1.75	2.82
The notes are an integral part of these Unaudited Group Interim Financial Statements.

 

Unaudited Consolidated Statement of Financial Position
		Unaudited as at	Unaudited as at	Audited as at
		31-Oct	31-Oct	30-Apr
		2016	2015	2016
		£	£	£
ASSETS
NON-CURRENT ASSETS
Intangible assets		-	-	-
Property, plant and equipment		42,555	79,506	57,353
		42,555	79,506	57,353
CURRENT ASSETS
Trade and other receivables		2,060,918	1,611,133	1,907,521
Corporation tax receivable		353,000	218,082	253,000
Cash and cash equivalents		681,622	2,616,375	1,858,841
		3,095,540	4,445,590	4,019,362
TOTAL ASSETS		3,138,095	4,525,096	4,076,715
LIABILITIES
NON-CURRENT LIABILITIES
Deferred tax		-	-	-
CURRENT LIABILITIES
Trade and other payables		(1,506,999)	(1,332,383)	(1,635,015)
Financial liabilities - borrowings		-	-	-
		(1,506,999)	(1,332,383)	(1,635,015)
TOTAL LIABILITIES		(1,506,999)	(1,332,383)	(1,635,015)
NET (LIABILITIES)/ASSETS		1,631,096	3,192,713	2,441,700
EQUITY
Called up share capital		378,829	377,229	378,829
Share premium		8,517,060	8,515,916	8,517,060
Shares based payment reserve		251,938	288,017	166,107
Forex Reserve		47,265	(43,718)	(33,411)
Merger Reserve		5,133,062	5,133,062	5,133,062
Accumulated loss		(12,697,058)	(11,077,793)	(11,719,947)
TOTAL EQUITY		1,631,096	3,192,713	2,441,700
The notes are an integral part of these Unaudited Group Interim Financial Statements.

 

Unaudited Consolidated Statement of Changes in Equity
for the Period Ended 31 October 2016
	CALLED UP SHARE CAPITAL	SHARE BASED  PAYMENT RESERVE	ACCUMULATED LOSS	FOREX RESERVE	SHARE PREMIUM RESERVE	MERGER RESERVE	TOTAL EQUITY
	£	£	£	£	£	£	£
Balance as at 30 April 2014	377,029	329,000	(6,546,359)	-	8,515,773	5,133,062	7,808,505
Issue of share capital 8.12	200				143		343
Share based payment reserve release		(40,983)	40,983				-
Income statement			(3,256,005)				(3,256,005)
Other comprehensive income				(18,503)			(18,503)
Balance as at 30 April 2015	377,229	288,017	(9,761,381)	(18,503)	8,515,916	5,133,062	4,534,340
Issue of share capital 8.10	1,600		-		1,144		2,744
Share based transaction		37,467					37,467
Share based payment reserve release		(159,377)	159,377				-
Income statement			(2,117,943)				(2,117,943)
Other comprehensive income				(14,908)			(14,908)
Balance as at 30 April 2016	378,829	166,107	(11,719,947)	(33,411)	8,517,060	5,133,062	2,441,700
Income statement			(981,665)				(981,665)
Share based transaction		90,385					90,385
Share based payment reserve release		(4,554)	4,554				-
Other comprehensive income				80,676			80,676
Balance as at 31 October 2016	378,829	251,938	(12,697,058)	47,265	8,517,060	5,133,062	1,631,096
The notes are an integral part of these Unaudited Group Interim Financial Statements.

Unaudited Consolidated Statement of Cash Flows
for the Period Ended 31 October 2016
	Unaudited	Unaudited	Audited
	6  months ended	6 months ended	Year ended
	31-Oct-16	31-Oct-15	30-Apr-16
	£	£	£
Cash flows used in operating activities
Cash generated from operations	(1,265,202)	(2,069,397)	(3,055,063)
Finance costs paid	-	-	-
Corporation tax received	-	-	221,960
Other comprehensive Income	80,676	(25,215)	(14,908)
Net cash used in operating activities	(1,184,526)	(2,094,612)	(2,848,011)
Cash flows used in investing activities
Purchase of intangible fixed assets		-	-
Purchase of property, plant and equipment	(7,448)	(2,766)	(8,622)
Interest received	14,755	1,023	-
Net cash used in investing activities	7,307	(1,743)	(8,622)
Cash flows generated from financing activities
New loans in year	-	-	-
Repayment of Borrowings	-	-	-
Proceeds from share issuance	-	-	2,744
Costs of share issuance	-	-	-
Net cash generated from financing activities	-	-	2,744
(Decrease)/increase in cash and cash equivalents	(1,177,219)	(2,096,355)	(2,853,889)
Cash and cash equivalents at beginning of period	1,858,841	4,712,730	4,712,730
Cash and cash equivalents at end of period	681,622	2,616,375	1,858,841

The reconciliation of loss before income tax to cash generated from operations is shown overleaf. The notes are an integral part of these Unaudited Group Interim Financial Statements.

RECONCILIATION OF LOSS BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS
		Unaudited	Unaudited	Audited
		Period ended	Period ended	Year ended
		31-Oct-16	31-Oct-15	30-Apr-16
	Notes	£	£	£
Loss before income tax		(1,081,665)	(1,316,412)	(2,374,821)
Share based payments		90,385	-	37,467
Depreciation charges	4	22,246	27,265	55,274
Loss on disposal of fixed assets		-	-	-
Amortisation charges	4	-	-	-
Finance income		(14,755)	(1,023)	-
		(983,789)	(1,290,170)	(2,282,080)
Increase in trade and other receivables		(153,397)	(407,386)	(703,774)
Increase in trade and other payables		(128,016)	(371,841)	(69,209)
Cash generated from operations		(1,265,202)	(2,069,397)	(3,055,063)
The notes are an integral part of these Unaudited Group Interim Financial Statements.

 

RECONCILIATION OF LOSS BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS
		Unaudited	Unaudited	Audited
		Period ended	Period ended	Year ended
		31-Oct-16	31-Oct-15	30-Apr-16
	Notes	£	£	£
Loss before income tax		(1,081,665)	(1,316,412)	(2,374,821)
Share based payments		90,385	-	37,467
Depreciation charges	4	22,246	27,265	55,274
Loss on disposal of fixed assets		-	-	-
Amortisation charges	4	-	-	-
Finance income		(14,755)	(1,023)	-
		(983,789)	(1,290,170)	(2,282,080)
Increase in trade and other receivables		(153,397)	(407,386)	(703,774)
Increase in trade and other payables		(128,016)	(371,841)	(69,209)
Cash generated from operations		(1,265,202)	(2,069,397)	(3,055,063)
The notes are an integral part of these Unaudited Group Interim Financial Statements.

 

Notes to the Unaudited Group Interim Financial Statements for the six months ended 31 October 2016

1.   Nature of operations and general information

The principal activity of the Company and its subsidiaries (together the Group) is the provision of data analytics using a proprietary platform.

Rosslyn Data Technologies plc is the group's ultimate parent company. It is incorporated and domiciled in the UK. The registered office of the Company is Fox Court, Gray's Inn Road, London WC1X 8HN, which is also the principal place of business for its UK based operating subsidiary, Rosslyn Analytics Limited.

Rosslyn Data Technologies plc's shares are listed on AIM, a market operated by the London Stock exchange. This consolidated unaudited half-yearly report was approved by the Board of Directors on xx January 2017.

The financial information set out in this half-yearly financial report does not constitute statutory accounts as defined in Sections 434(3) and 435(3) of the Companies Act 2006. The Group's statutory financial statements for the year to 30 April 2016 have been filed with the Registrar of Companies and are available at www.rosslyndatatechnologies.com. The auditors' report on those financial statements was unqualified and did not contain any statement under Section 498(2) or Section 498(3) of the Companies Act 2006.

2.   Basis of preparation

The financial information presented in this document has been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretations Committee (IFRIC) interpretations that are expected to be applicable for the year ending 30 April 2017. The principal accounting policies used in preparing these Interim Results are unchanged from those adopted and disclosed in the audited financial statements for the year ended 30 April 2016.

The financial information in this statement relating to the six months ended 31 October 2016 has neither been audited nor reviewed pursuant to guidance issued by the Auditing Practices Board. The financial information for the period ended 31 October 2016 does not constitute the full statutory accounts for that period. The financial information in this statement relating to the six months ended 31 October 2015 has not been audited and does not constitute full statutory accounts for that period. The Annual Report and Financial Statements for 2016 have been filed with the Registrar of Companies. The Independent Auditor's Report on the Annual Report and Financial Statements for 2016 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

3.   Accounting policies

The accounting policies applied are consistent with those of the annual financial statements for the year ended 30 April 2016.
 

4.   Segmental Reporting

All segment revenue, loss before taxation, assets and liabilities are attributable to the principal activity of the Group being the provision of data analytics using a proprietary form and other related services.

	6 month period ended 31 October 2016
	UK	USA	Total
	£	£	£
Income
Total revenue	1,198,223	468,354	1,666,577
Total revenue from external customers	1,198,223	468,354	1,666,577
EBITDA	(1,265,221)	191,047	(1,074,174)
Depreciation	(21,866)	(380)	(22,246)
Amortisation	-	-	-
Operating loss	(1,287,087)	190,667	(1,096,420)
Finance income	14,755	-	14,755
Loss before income tax	(1,272,332)	190,667	(1,081,665)
Total assets	2,546,410	591,685	3,138,095
Total liabilities	(1,346,537)	(160,462)	(1,506,999)
Capital expenditure during the year
Intangible assets	-	-	-
Property, plant and equipment	7,448	-	7,448

The EBITDA by segment excludes the management recharge, which is recorded annually.

	6 month period ended 31 October 2015
	UK	USA	Total
	£	£	£
Income
Total revenue	1,323,029	498,488	1,821,517
Total revenue from external customers	1,323,029	498,488	1,821,517
EBITDA	(1,404,870)	114,700	(1,290,170)
Depreciation	(27,265)	-	(27,265)
Amortisation	-	-	-
Operating loss	(1,432,135)	114,700	(1,317,435)
Finance income	1,023		1,023
Loss before income tax	(1,431,112)	114,700	(1,316,412)
Total assets	3,982,140	542,956	4,525,096
Total liabilities	(1,119,794)	(212,589)	(1,332,383)
Capital expenditure during the year
Intangible assets	-	-	-
Property, plant and equipment	2,766	-	2,766

	Year ended 30 April 2016
	UK	USA	Total
	£	£	£
Income
Total revenue	2,871,671	997,379	3,869,050
Total revenue from external customers	2,871,671	997,379	3,869,050
EBITDA	(2,169,041)	(161,564)	(2,330,605)
Depreciation	(55,021)	(253)	(55,274)
Amortisation	-	-	-
Operating loss	(2,224,062)	(161,817)	(2,385,879)
Finance income	11,058	-	11,058
Loss before income tax	(2,213,004)	(161,817)	(2,374,821)
Total assets	3,434,002	642,713	4,076,715
Total liabilities	(1,444,175)	(190,840)	(1,635,015)
Capital expenditure during the year
Intangible assets	-	-	-
Property, plant and equipment	7,481	1,141	8,622

5.   Basic and diluted loss per share

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

	Unaudited	Unaudited	Audited
	Period ended	Period ended	Year ended
	31-Oct-16	31-Oct-15	30-Apr-16
	£	£	£
Loss for the period attributable to the owners of the parent	(900,989)	(1,316,412)	(2,132,851)
Weighted average number of ordinary shares	75,765,814	75,445,814	75,602,746
	Pence	Pence	Pence
Basic and diluted loss per share: ordinary shareholders	1.19	1.74	2.82

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

Earnings per share has been calculated in accordance with IAS 33.

6.      Principal risks and uncertainties

The principal risks and uncertainties for this 6 month period remain broadly consistent with those set out in the Financial Review section of the financial statements of the Group for the year ended 30 April 2016.                                                           

 

END

 

 

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