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Amino Technologies (AMO)

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Tuesday 09 February, 2021

Amino Technologies

Full Year Results

RNS Number : 3982O
Amino Technologies PLC
09 February 2021
 

9 February 2021  

 

 

 

 

 

Amino Technologies plc (LSE AIM: AMO), a software-led global media technology company that delivers modern TV experiences, announces its preliminary results for the year ended 30 November 2020. 

 

Donald McGarva, Chief Executive Officer of Amino Technologies plc, said:   

"Despite the impact of COVID-19, in 2020 Amino delivered a strong performance and we maintained our previous financial guidance through the year. All our key metrics tracked ahead, demonstrating that the software-led strategy we are following is delivering results. Like many, our business model has been tested in this challenging year but the financial and operational progress we have made, along with the opportunity we see ahead, give us the confidence to recommend a dividend. I would like to thank our amazing Amino team for seamlessly adapting to remote working, staying close to our customers without missing a beat and continuing to innovate throughout the pandemic. 

 

To position Amino for future success, we recently launched our Amino 2025 strategy to capitalise on the convergence of streaming services, which is where we see the greatest opportunity for growth. COVID-19 has accelerated structural shifts in the TV viewing experience. Modern consumers not only want the 'best of both worlds' - video on demand and live TV working together seamlessly - but they increasingly expect it. Our Amino 2025 strategy is built around making this expectation a reality.

 

Our business and culture stand stronger today. With a pressing need for the solutions and services we deliver, Amino is trading in line and has started the new financial year from a position of strength. We have a clear strategy to drive software-led growth and to capitalise on real structural shifts, supported by our enhanced visibility and an acute focus on driving recurring revenue and strengthening our long-term customer relationships. We look forward to making further progress in the year ahead."

US$m unless otherwise stated  

2020  

2019 

 

Revenue 

Adjusted gross profit  (1)  

Adjusted operating profit  (2)  

Adjusted operating cash flow  (3)  

Adjusted basic earnings per share (US cents) (4)  

 

Statutory gross profit 

Statutory operating profit

Statutory operating cash flow 

Statutory basic earnings per share (US cents)

 

Net cash 

Dividend per share (GBP pence) 

 

 

·

Achieved growth across all five Key Performance Indicators

·

Improved quality of earnings and enhanced visibility 

 

o

High margin software revenue up 49% to $19.5 million (2019: $13.0million), total now 24% of Group revenues 

 

o

Exit run rate Annual Recurring Revenue ("ARR") (5)  

·

Strong balance sheet with significantly strengthened net cash position

·

New dividend policy to provide shareholders with an income return as well as targeting capital growth

·

Board recommends a dividend of 1.87p 

 

  Strategic and operational highlights

·

Transition to software and services led business model progressing as planned

·

Continued innovation and stayed close to our customers throughout the pandemic, while also expanding addressable market by landing new customers 

 

o

New business wins at Slovak Telecom, CWC, Broadway HD and Topic 

·

Key implementations for multiscreen video at YOUFONE, a Netherlands based MVNO (6)  

·

Deployment of our Android Pay TV+ solution with GO and CABLENET to add a new modern user experience and leading streaming services for their subscribers 

·

Impressive employee engagement with NPS score at 26% 

·

Introduced global graduate recruitment programme to drive industry innovation and attract talent 

 

  Launch of Amino 2025 strategy to address the convergence of streaming services 

·

Our ambition is to triple Group revenues and drive recurring revenue as a percentage of Group software revenues to 70% by 2025

·

Traditional TV and content streaming are converging, driven by consumer needs

·

'Best of both worlds' is video on demand and live TV working together seamlessly 

·

Streaming market set to double to $167 billion by 2025 according to Digital TV Research 

·

This provides the greatest opportunities to drive software-led growth and capitalise on the structural shifts in the TV market to: 

 

o

Improve our quality of earnings through increased recurring revenue 

 

o

Drive higher margin solutions through growth in software and services revenues 

 

o

Deliver the technology to revolutionise viewer choice, usability and convenience 

 

o

Use actionable data to drive outcomes for our customers and their viewers 

·

We continue to assess M&A that will help drive the business forward and speed time to market 

·

Amino is well positioned to capture this opportunity, making it easy for people to connect to the TV and video they love 

 

  Current trading and outlook

·

Amino entered 2021 with a solid order book, enhanced visibility and increasing quality of earnings 

·

Current trading is in line with the Board's expectations 

·

Focused on growing software and services, ARR and strengthening long term relationships 

·

Amino 2025 strategy aims to deliver significant revenue and profit growth over the medium term 

·

Growth is expected to be delivered both organically, and via selective M&A opportunities 

·

Board strengthened with the appointment of Steve Oetegenn

 

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the company's obligations under Article 17 of MAR.

 

 

Amino Technologies PLC  

+44 (0)1954 234100 

Karen Bach, Chair 

Donald McGarva, Chief Executive Officer 

Mark Carlisle, Chief Financial Officer 

 

finnCap Ltd (NOMAD and Broker)  

+44 (0)20 7220 0500 

Matt Goode / Simon Hicks (Corporate Finance) 

Tim Redfern / Richard Chambers (Equity Capital Markets) 

 

FTI Consulting (Financial communications)  

+44 (0)20 3727 1000 

Matt Dixon / Emma Hall / Chris Birt / Gregory Hynes 

 

 

About Amino Technologies plc

 

Amino Technologies plc is a software-led, global Media Technology company. We deliver modern TV experiences, the way viewers want them. We do this by creating the solutions that Pay-TV operators, broadcasters and content owners need to make it easy for people to connect to the TV and video they love. 

 

Our end to end solutions, offer the best of both worlds: video on demand and live TV.  By placing all TV and video streaming content in one place, Pay-TV operators, broadcasters and media owners can stay ahead of evolving viewer demand by providing smarter, more cost-effective ways of delivering modern TV and video experiences to consumers. 

 

Amino Technologies plc has two operating companies: 24i, which focusses on streaming video experiences and Amino, which connects Pay-TV to streaming services. Our two complementary companies combine their products and services to create solutions which ensure that people can consume TV and video how and when they want it. Our solutions deliver modern TV and video experiences every day to millions of viewers globally, via our growing global customer base of over 500 service providers. 

 

Amino Technologies plc is listed on the London Stock Exchange Alternative Investment Market (AIM: symbol AMO). Headquartered in Cambridge, UK, the company has over 300 staff located in offices in California, Amsterdam, Helsinki, Madrid, Porto, Brno, and Hong Kong. 

For more details, visit  www.aminotechnologies.com

 

Notes 

(1) 

Adjusted gross profit is a non-GAAP measure and excludes exceptional items.  Further details of these adjustments are set out in note 4.

(2) 

Adjusted operating profit is a non-GAAP measure and excludes amortisation of acquired intangibles, exceptional items and share-based payment charges.  Further details of these adjustments are set out in note 4.

(3) 

Adjusted operating cash flow is a non-GAAP measure and excludes exceptional items.  Further details of these adjustments are set out in note 10.

(4) 

Adjusted basic earnings per share is a non-GAAP measure and excludes amortisation of acquired intangibles, exceptional items and share-based payment charges.  Further details of these adjustments are set out in note 6.

(5) 

Exit run rate ARR is annual run-rate recurring revenue as at 30 November 2020.

(6) 

Mobile Virtual Network Operator

 

 

Chair's statement:

This has been a successful year for Amino, delivering a strong and resilient trading performance as we continue to execute against our strategy and make progress on driving software growth. Like many businesses our model has been tested and we are pleased to report all key metrics tracked ahead of last year. This is especially commendable given the unprecedented and continuing challenges provided by the COVID-19 pandemic. On behalf of the Board, I would like to thank the Amino team for their ongoing resilience, outstanding delivery for customers and dedication in working to ensure services remained at a high level throughout a challenging year. This strong set of results has been delivered due to their continued commitment to service our customers across the world all while mostly working from home.

AMINO'S VISION AND PURPOSE

Consumers want choice, usability, and convenience. Amino's own research highlights how these three requirements are now shaping what customers need to remain competitive. At Amino, we have a dedicated and amazing team of over 300 staff who are experts in creating software-led solutions to deliver modern TV experiences.

There is a significant opportunity arising from a structural shift in how viewers access and watch TV and video. COVID-19 has accelerated the convergence of traditional TV and modern video streaming - this 'best of both worlds' is what consumers crave. Amino's end-to-end software solutions and services address this market need by providing media and broadcast technology that delivers traditional and modern viewing to all. The Group has worked hard in 2020 to position Amino for future success and has recently launched our 'Amino 2025 strategy' to enable this convergence of streaming services which is where we see the greatest opportunities for growth. Our Amino 2025 strategy is built around our vision of making it easy for people to connect to the TV and video they love.

AMINO'S GROUP STRATEGY TO 2025

The Group has a clear strategy focussed on building a predictable, software-driven growth business, with a proven track record of expanding our addressable market both organically and through targeted M&A. Our strategy is to continue growing margin through value-based investments; to maintain strong levels of cash generation; and deliver appropriate returns to shareholders as well as investment for the future growth of the Company.

Our Group strategy to 2025 is focused on building four key drivers as follows:

·

Transformation to a software-led company

 

Amino is a software-led business focused on growing higher margin recurring software revenue.

 

 

·

Data centric product development: to drive growth and innovation

 

Amino will enhance value through constant innovation and investment in our platforms to ensure the latest features and functionality are available to our customers.

 

·

A product roadmap focussed on the consumer experience

 

Amino aims to deliver viewer choice, usability and convenience.

 

·

M&A strategy to further underpin growth

 

Amino aims to augment its organic growth plans through targeted software-led, recurring revenue M&A opportunities. Our ambition is to triple Group revenues and drive recurring revenue as a percentage of Group software revenues to 70% by 2025.

 

ENVIRONMENT, SOCIAL AND GOVERNANCE ("ESG") PROGRESS

Amino's ESG report sets out the commitments we are making, in line with our vision, to support a sustainable future. These have been developed in line with the Japanese concept of Ikigai which means "a reason for being". I feel fortunate to Chair the Board of a Company that has put so much emphasis on investing in its people this year, including launching its first formal graduate programme. Our diversity and inclusion survey conducted in the second half of 2020 showed that Amino is a fun and inclusive place to work with an engaging corporate culture.

The Board has played a key part in fostering diversity and inclusion and during the year commenced a Board observer and mentoring programme which will help develop future talent.

BOARD APPOINTMENT

On 19 January 2021, I was delighted to appoint Steve Oetegenn as a Non-Executive Director. Steve brings a wealth of experience in building and running software companies within Amino's industry and therefore strengthens the Boards experience in this respect.

DIVIDEND

At the beginning of the year the Board took the difficult but necessary decision to suspend the dividend in the light of the global pandemic and associated uncertainty. I would like to take the opportunity to thank shareholders for their support in this regard. Our new dividend policy, to deliver returns to shareholders via growth and income, was announced in December and reflects the Company's growth ambitions. This policy of paying between 33-50% of adjusted EPS in dividend is expected to provide shareholders with a growing income stream whilst allowing the Company to invest in growth.

In line with this policy the Board recommends a dividend of 1.87 pence per share.

Karen Bach

Chair

8 February 2021

 

2020 has undoubtedly been an unprecedented year. It has been a year in which we have made clear progress in transforming our quality of earnings, growing software revenues 49% to $19.5m, strengthening Exit ARR1 by 12% to $10.6m and landing new customers as well as expanding existing relationships.

Overall, we have delivered a resilient performance and have made clear progress to position Amino to deliver increasingly predictable software-driven growth and returns by enabling our customers to stay ahead of consumer demands. This achievement has been made possible by the passion of our employees, our innovative software solutions, and the strength of our customer relationships.

COVID-19 has provided all of us with work and personal life challenges. We took early and decisive management action during the onset of COVID-19 and throughout this period we have followed the wisdom that looking after our employees and our employees looking after our customers means our customers will look after the business, and this is reflected in our results.

I'm proud of our talented and dedicated team all of whom have stepped up to service our global customers throughout the pandemic whilst working remotely. We would like to thank them for being agile and adapting quickly to this new normal whilst at the same time continuing to stay close to our customers.

We are at the heart of enabling a structural shift in the soon to be $167bn streaming market. We have identified the customer needs 'the best of both worlds' from streaming and Pay TV. Video on demand and live TV is where we can add the most value, providing a seamless viewer experience. This change is consumer driven and continues to gather pace. We have formulated our 2025 strategy in line with this. We're actively growing our software and services revenues to create an increasingly predictable, visible and resilient model to deliver profitable growth and have made clear progress in 2020.

Amino's vision is to make it easy for viewers to connect to the TV and video they love. At the same time, we make it easy for the people who deliver TV to stay ahead of evolving viewer demands.

The biggest challenge in our industry today is to provide 'the best of both worlds' - video on demand and live TV working together seamlessly. This is what modern consumers want. And at Amino we do just that!

At Amino we simplify the complex to enable greater viewer choice, usability and convenience. Our end-to-end software-led solutions put all TV and video streaming content in one place, just how the viewer wants it. This means we enable our customers: Pay TV operators, broadcasters and media owners - to stay ahead of evolving viewer demands to provide smarter, more cost-effective ways of delivering modern TV and video experiences to their customers.

We are at the forefront of the major shifts in the way the world consumes TV with our end-to-end solutions out mapped to the clear market need. Our belief and knowhow is underpinned by staying close to our customers, consumers and our in-house market research including our Amino Voice of Consumer Survey 2020, which identified that 51% of consumers subscribe to both streaming and Pay TV services and demand advanced features from both.

The Pay TV industry is also forecast by Digital TV Research to grow by 4% to 1.1bn subscribers by 2025 creating further growth opportunities. Given the opportunity to map our solutions to the market need to enable the 'best of both worlds' - Video on demand and live TV, the Group has therefore been developing its focus around two key market opportunities:

·

MULTISCREEN VIDEO - Any device, any time and any place. Multiscreen Video establishes a transparent, right-sized model for deploying end-to-end service capabilities for delivering video from any source (live or on-demand) across any network to any screen. Service providers only pay for what they need, when they need it.

·

PAY TV+ - Making streaming features available to Pay TV customers. Pay TV+ is how we help operators become super aggregators, delivering streaming alongside linear channels with the user experience expected by subscribers. This is enhanced by cloud based management of devices, apps and the user interface.

     

The Group monitors five key performance indicators which underpin our strategic progress, all of which have improved this year.

 

82.7

77.2

19.5

13.0

40%

31%

10.6

9.5

48%

46%

18.2

17.2

Strong progress has been made in delivering on our software-led strategy with high single digit total revenue growth and a 49% increase in software and service revenues. Our goal of driving increasingly predictable revenues continues to progress with a double digit increase in exit run-rate recurring revenues in the year and with improved adjusted gross margins maintained against the challenging backdrop of COVID-19. The Group also continues to generate strong operating cash flows.

24i

24i offers a robust technology platform that streams TV and video programming to any type of screen. The company has a 10-year market-leading position and works with customers like NPO, KPN, Delta and Pureflix.

Building on our strong performance in H1, 24i continues to grow. Organic revenues have grown 10% (unaudited) as we have successfully increased business from existing customers and, even allowing for COVID-19 lockdowns and travel restrictions, from new business wins.

COVID-19 has accelerated the need for streaming TV and video on demand across the world and 24i's broadcast and streaming customers all saw significant increases in demand. For example, as theatres around the world went dark, 24i helped customer Broadway HD to achieve record traffic and subscriber sign-ups when partnerships with celebrities like Hugh Jackman, saw social media coordinating global "watch parties" of their content.

In the first quarter of the year we launched our Next-gen Smart Apps platform, enabling our customers to deploy faster and more cost-effectively. Slovak Telekom, part of the Deutsche Telekom group, was our first customer, going live with its Magio Go brand in Slovakia in May. By the end of the year, it had extended use of the 24i platform to launch a second brand in Slovakia and another in the Czech Republic.

Meanwhile in South America our long-term customer Entel launched Chile's first Android TV STB service and a complimentary service on Smart TVs. Sports rights owners continue to show keen interest in the Smart Apps solution. The latest being Caribbean broadband and Pay TV operator CWC which launched its new streaming service, Flow Sports based on an end-to-end solution from 24i.

In the summer, Youfone, a mobile virtual network operator based in the Netherlands, became our first joint deployment with Amino, combining Smart Apps, Smart Video and Amino STBs to create a truly end-to-end Pay TV solution. The Android TV service has resulted in a high-growth customer expanding rapidly.

In 2021, we are investing in our sales, marketing and products to build our pipeline. Our focus is to prioritise driving recurring revenues from our video platforms. Partnership is also an important area of focus and we launched our Smart eco-system partnership program with pre-integrated partners such as Cleeng, Vionlabs, Xroad Media, Jump and Century Link. We are delighted to welcome Verizon Media to partner with 24i for an end-to-end solution to deliver faster and more profitable streaming services.

Amino seamlessly connects Pay TV to streaming services and provides the features required in a multiscreen entertainment world. The company has a 20-year heritage with customers like PCCW, Cincinnati Bell, T-Mobile Netherlands and Entel Bolivia.

Amino continues to deliver excellent results in revenue and margin. Device revenues have remained stable along with gross margins.

Supply chain management capability has yet again enabled us to deliver in a challenging economic environment especially given the shut down in China in February and March owing to lockdown restrictions. At the end of the year we overcame component shortages arising from scarcity of certain material and longer lead times on some key components. One of our silicon chip providers have significantly increased lead times. As a result, we have been working closely with our customers to secure orders early and investing in inventory to lead the sector in time to product. We believe we are well placed to maintain our supply chain performance into 2021.

There has been a significant rise in revenue in EMEA (20%) and LATAM (7%) due to demand from our larger scale customers and our regional distributor selling strongly in the period. The increase in sales was offset by a reduction in sales in North America (-19%) caused by a decline in hospitality projects due to COVID-19. In addition, sales of higher cost DVR devices are being replaced with lower cost Android devices, as we had forecasted, lowering our average selling price.

Engage, our SaaS Service Management platform, has seen significant volume growth in the period due to improved customer success programs and sales focus. The number of devices managed by this service has increased by 69% in the period. This product is a key focus for sales in 2021 as we build ARR.

ESG is a focus for the company and we have set out our policies and goals in more detail in the ESG section of the annual report. During the year we have continued to empower our teams to put sustainability on the agenda throughout the Group. I would like to highlight a few active projects that illustrate our commitment to make ESG a central part of our day-to-day operations:

·

Firstly, during the year the company launched its #futureisbright graduate scheme which is opening doors to young people to a two-year job commitment in these difficult times. We feel very fortunate to be able to offer young people a solid start to their careers;

·

Secondly, we surveyed all our employees during the year as part of our Diversity and Inclusion programme. The results of this survey, performed by a third party, showed that employees were engaged and scored higher than average on the Diversity and Inclusion Index compared to external benchmarks. The survey also highlighted that the Company's Employee Net Promoter Score was excellent at +26;

·

Lastly, the company aims to be carbon neutral by 2025 and fully throughout our supply chain by 2030. We are actively working through projects designed to meet these goals and I am confident we will achieve them.

Throughout this unprecedented year our employees globally have really pulled together and I firmly believe our business and culture stand even stronger today. We have delivered a robust performance in a challenging year with a clear strategy for growth as we look to execute our Amino 2025 strategy.

The Group has traded in line with its expectations as we continue to focus on growing software and services, profits, year to date ARR and strengthening long term relationships. We have a strong balance sheet, no debt and continue to assess M&A that will help drive the business forward to its long-term goals.

COVID-19 has accelerated the need for streaming TV and video on demand across the world. Amino is positioned to capture this opportunity, making it easy for people to connect to the TV and video they love. To keep pace with this change, the owners and distributors of TV programming need to rapidly evolve their business models and our technology and solutions make this evolution possible. We have positioned Amino in 'the best of both worlds' - it is this convergence of streaming services where we see a great opportunity for growth. There is a clear need for the solutions and services that we deliver through our software-led solutions which gives us confidence as we enter a new financial year.

We enter 2021 with enhanced visibility and quality of earnings and our Amino 2025 strategy to enable the structural shifts in the TV market through innovative software with the aim of delivering significant revenue and profit growth over the medium term. This growth is expected to be delivered both organically, and from the execution of selective M&A opportunities.

Donald McGarva

Chief Executive Officer

8 February 2021

 

Notes 

(1)
Exit ARR is annual run-rate recurring revenue as at 30 November 2020
(2)
Mobile virtual network operator
(3)
Gross margin adjusted for exceptional items

 

Chief Financial Officer's review

 

 

 

 

19.5

55%

13.0

56%

49%

 

15.8

81%

11.0

84%

44%

 

Devices including integrated software

 

 

 

63.2

64.2

(2%)

23.9

38%

24.7

41%

(3%)

 

Total

 

 

 

82.7

13%

77.2

9%

7%

 

39.7

48%

35.9

46%

11%

 

 

Revenue

 

Segment result

 

2020

$m

2019

$m

 

2020

$m

2019

$m

15.2

8.8

 

0.5

0.0

67.5

68.4

 

18.2

17.1

-

-

 

(2.0)

(2.3)

Total

82.7

77.2

 

16.7

14.8

 

2020

$m

2019

$m

15.2

8.8

15.2

8.8

(3.3)

(1.9)

11.9

6.9

78%

78%

 

 

 

(11.4)

(6.9)

0.5

0.0

4%

n.a.

 

 

 

3.7

1.9

 

2020
$m

2019
$m

4.3

4.2

63.2

64.2

67.5

68.4

(39.7)

(39.6)

27.8

28.8

41%

42%

 

 

 

(9.6)

(11.7)

18.2

17.1

27%

25%

 

 

 

1.8

2.2

 

 

 

 

 

 

· Within cost of sales

· Within operating expenses

·

$0.2m one- off costs primarily incurred in respect of the acquisition of 24i Unit Media BV; and

·

·

·

·

Including these exceptional cash out-flows cash generated from operations was $16.8m (2019: $13.8m).

 

Consolidated income statement

For the year ended 30 November 2020

 

 

Notes

Year to 30 November 2020
$000s

Year to 30 November 2019
$000s

Revenue
Cost of sales

3
4

82,704
(42,044)

77,232
(40,021)

Gross profit

 

40,660

37,211

Operating expenses
Operating profit

 

 

(35,546)
5
,114

(32,877)
4,334

Adjusted operating profit

Share-based payment charge
Exceptional items
Amortisation of acquired intangible assets

 


4
 

10,482

(681)
(503)
(4,183)

10,224

(829)
(965)
(4,096)

Operating profit

 

5,115

4,334

Finance expense
Finance income


 

(748)
44

(966)
113

Net finance expense

5

(704)

(853)

Profit before tax

Tax charge

 

 

4,411

(1,748)

3,481

(629)

Profit after tax

 

2,663

2,852

 

 

 

 

Profit for the year from continuing operations attributable to equity holders

 

3,087

2,989

Non-controlling interest

 

(424)

(137)

Profit for the year

 

2,663

2,852

Earnings per share

Basic earnings per 1p ordinary share

6

4.06c

4.04c

Diluted earnings per 1p ordinary share

6

3.98c

3.96c

 

All amounts relate to continuing activities.

 

Consolidated statement of comprehensive income

For the year ended 30 November 2020

 

Year to 30 November 2020
$000s

Year to 30 November 2019

$000s

Profit for the financial year

2,663

2,852

Items that may be reclassified subsequently to profit or loss:

Net foreign exchange loss arising on consolidation

 

3,206

 

(445)

Other comprehensive income/(expense)

3,206

(445)

Total comprehensive income for the year

5,869

2,407

 

 

 

Non-controlling interest

403

168

Total comprehensive income for the financial year attributable to equity holders

6,272

2,575

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

Consolidated statement of financial position as at 30 November 2020

 

Assets

Notes

As at
30 November 2020
$000s

As at 30 November 2019
$000s

Non-current assets

Property, plant and equipment
Right of use assets

Intangible assets
Deferred tax assets
Trade and other receivables

7


8

510
2,634
92,067
-
215

395
-
91,919
637
430

 

 

95,426

93,381

Current assets

Inventories
Trade and other receivables
Corporation tax receivable
Cash and cash equivalents


8
8
 

2,956
14,422
242
9,476

2,399
16,483
8
8,612

 

 

27,096

27,502

Total assets

 

122,522

120,883

Capital and reserves attributable to equity holders of the Company

Called-up share capital
Share premium
Capital redemption reserve
Foreign exchange reserve
Merger reserve
Other reserve

Retained earnings






 

1,367
35,907
12
(276)
30,122
(1,750)
23,475

1,367
35,907
12
(3,461)
30,122
(1,750)
19,790

Equity attributable to owners of the parent

 

88,857

81,987

Non-controlling interest

 

195

598

Total equity

 

89,052

82,585

Liabilities

Current liabilities
Trade and other payables
Lease liabilities

Corporation tax payable
Loans and borrowings

9
9

9
 

23,817
1,187
1,461
130

 

21,800
-

684
7,314

 

 

26,595

29,798

Non-current liabilities

Trade and other payables
Lease liabilities
Provisions

Deferred tax liabilities

9

 

176
1,524
1,227
3,948

2,785
-
1,298
4,417

 

 

6,875

8,500

Total liabilities

 

33,470

38,298

Total equity and liabilities

 

122,522

120,883

 

 

 

Consolidated statement of cash flows

For the year ended 30 November 2020

 

 

Notes

Year to 30 November 2020
$000s

Year to 30 November 2019
$000s

Cash flows from operating activities

Cash generated from operations
Corporation tax paid

 

10

 

16,835
(1,420)

 

13,815
(1,023)

Net cash generated from operating activities

 

15,415

12,792

Cash flows from investing activities

Purchases of intangible assets
Purchases of property, plant and equipment
Interest received
Acquisition of subsidiaries




 

(5,493)
(345)
44
(160)

(4,150)
(69)
113
(18,916)

Net cash used in investing activities

 

(5,954)

(23,022)

Cash flows from financing activities

Proceeds from exercise of employee share options
Lease payments

Dividends paid
Interest paid
Repayment of borrowings

New bank loans raised

 

 

26
(1,146)
-
(244)
(7,236)

-

 

-
-
(6,889)
(187)
(1,583)

7,236

Net cash used in financing activities

 

(8,600)

(1,423)

Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Effects of exchange rate fluctuations on cash held

 

861
8,612
3

(11,653)
20,310
(45)

Cash and cash equivalents at end of year

 

9,476

8,612

 

 

Consolidated statement of changes in equity

For the year ended 30 November 2020

 

Share
capital
$000s

Share premium $000s

Merger reserve $000s

Put option
reserve
$000s

Foreign
exchange reserve
 $000s

Capital redemption
reserve
$000s

Profit
and loss

$000s

Total attributable
to owners of parent

$000s

Non-controlling interest
$000s

Total
Equity

$000s

Shareholders' equity at 30 November 2018

1,327

32,300

30,122

-

(3,047)

12

22,880

83,594

-

83,594

Profit for the year
Other comprehensive expense

-
-

-
-

-
-

-
-

-
(414)

-
-

2,989
-

2,989
(414)

(137)
(31)

2,852
(445)

Total comprehensive income for the year attributable to equity holders

-

-

-

-

(414)

-

2,989

2,575

(168)

2,407

Share based payment charge
Issue of share capital
Dividends paid
Acquisition of 24i
Reorganisation of 24i
Put option in relation to 24i

-
40
-
-
-
-

-
3,607
-
-
-
-

-
-
-
-
-
-

-
-
-
-
-
(1,750)

-
-
-
-
-
-

-
-
-
-
-
-

829
-
(6,889)
-
(19)
-

829
3,647
(6,889)
-
(19)
(1,750)

-
-
-
766
-
-

829
3,647
(6,889)
766
(19)
(1,750)

Total transactions with owners

40

3,607

-

(1,750)

-

-

(6,079)

(4,182)

766

(3,416)

Total movement in shareholders' equity

40

3,607

-

(1,750)

(414)

-

(3,090)

(1,607)

598

(1,009)

Shareholders' equity at 30 November 2019

1,367

35,907

30,122

(1,750)

(3,461)

12

19,790

81,987

598

82,585

Profit for the year
Other comprehensive income

-
-

-
-

-
-

-
-

3,185

-
-

3,087
-

3,087
3,185

(424)
21

2,663
3,206

Total comprehensive income for the year attributable to equity holders

-

-

-

-

3,185

-

3,087

6,272

(403)

5,869

Share based payment charge
Exercise of employee share options

-
-

-
-

-
-

-
-

-
-

-
-

572
26

572
26

-
-

572
26

Total transactions with owners

-

-

-

-

-

-

598

598

-

598

Total movement in shareholders' equity

-

-

-

-

3,185

-

3,685

6,870

(403)

6,467

Shareholders' equity at 30 November 2020

1,367

35,907

30,122

(1,750)

(276)

12

23,475

88,857

195

89,052

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

Notes to the condensed consolidated financial statements

For the year ended 30 November 2020

 

1  Basis of preparation

The financial information set out in these results has been prepared using the recognition and measurement principles of International Accounting Standards, International Financial Reporting Standards and Interpretations in conformity with the requirements of the Companies Act 2006. The accounting policies adopted in these results have been consistently applied to all the years presented and are consistent with the policies used in the preparation of the financial statements for the year ended 30 November 2019, except for those that relate to new standards and interpretations effective for the first time for periods beginning on (or after) 1 December 2019. The new standard impacting the Group that has been adopted in the annual financial statements for the year ended 30 November 2020 is IFRS 16: Leases, further details of which appear in Note 7 below. Other new standards, amendments and interpretations to existing standards, which have been adopted by the Group have not been listed, since they have no material impact on the financial statements .

2  Going Concern

The consolidated financial statements have been prepared on a going concern basis. The ability of the Group to continue as a going concern is contingent on the ongoing viability of the Group. The Group meets its day-to-day working capital requirements through its cash balances and wider working capital management.

In March 2020, the World Health Organisation declared a global pandemic due to the COVID-19 virus that has spread across the globe, causing different governments and countries to enforce restrictions on people movements, a stop to international travel, and other precautionary measures.  In the short term this affected the Group's supply chain operations, as well as employees throughout the Group having to work remotely from home.  The Group implemented efficient and appropriate measures to limit the impact of COVID-19 on the results of the business and its future operations, and the directors believes that the business is able to navigate through the impact of COVID-19 due to the strength of its customer proposition, its balance sheet, its cash position and its available working capital. Specifically, cash resources of $9.5m as at 30 November 2020 (2019: $8.6m) and a multicurrency working capital facility of $15.0m, of which $nil was drawn at 30 November 2020 (2019: $7.2m).  This facility expires on 25 November 2022.

The current global economic conditions continue to create uncertainty, and specific to the Group, recognising the strength and flexibility of the Group's software-led strategy, there are potential risks that the Group will be impacted by decisions further up our supply chain. This could lead to delays in contract negotiations and deferring or cancelling of anticipated sales, and that sales and settlement of existing debts are impacted too. In respect of this going concern assessment, the Directors considered the foreseeable future, a period extending 12 months from the date of approval of the annual report.  The Directors have considered a number of scenarios, taking account of possible further impact from the pandemic on the business, as noted above. However, even in the material downside scenario, the Directors are satisfied that the Group has sufficient cash resources over the period and will be able to operate within its existing working capital facilities. On that basis, the Directors therefore continue to adopt the going concern basis when preparing its consolidated financial statements.

 

 

3  Geographical external customer revenue analysis

Geographical external customer revenue analysis

Year to
30 November 2020

$000s

Year to
30 November 2019

$000s

North America

31,169

33,778

Latin America

11,131

10,433

Netherlands

Rest of EMEA

24,537

14,053

16,706

14,179

EMEA

38,590

30,885

Rest of the World

1,814

2,136

 

82,704

77,232

 

For this disclosure revenue is determined by the location of the customer.

 

4 Exceptional items

Exceptional items within cost of sales and operating costs comprise the following charges/(credits):

 

Year to
30 November 2020

$000s

Year to
30 November 2019

$000s

Credit relating to royalty costs recognised in prior years and subsequently renegotiated

(917)

(1,480)

Subtotal cost of sales
Expensed contingent post-acquisition remuneration in
respect of the acquisition of 24i Unit Media BV
Redundancy and associated costs
Legal costs
Acquisition costs

(917)

1,164
-
183
73

(1,480)

597
723
-
1,125

 

Subtotal operating expenses

1,420

2,445

Total exceptional items

503

965


 

5  Net finance expense

Year to
30 November 2020

$000s

Year to
30 November 2019

$000s

Interest payable and similar costs

Interest receivable and similar income

Net foreign exchange losses

(565)

44

(183)

(614)

113

(352)

 

(704)

(853)

 

Interest payable and receivable relates to the Group's bank balances, loss on debt modification during the year and extended credit terms offered to one customer, in accordance with IFRS 15 Revenue from contracts with customers.

Interest payable and similar costs comprises:

·

Loss on debt modification during the year of $nil(2019: $330,000);

·

Loan interest payable of $201,000(2019: $176,000);

·

Unwinding of discount of the put option regarding the non-controlling interest of the 24i Group of $278,000 (2019: $98,000);

·

Lease interest of $58,000 (2019: $nil); and

·

Bank and other interest payable of $28,000 (2019: $10,000).

 

6  Earnings per share

 

Year to
30 November 2020

$000

Year to
30 November 2019
$000

Profit attributable to ordinary shareholders

3,087

2,989

Exceptional items

Share-based payment charges

Amortisation of acquired intangible assets

503

681

4,183

965

829

4,096

Tax effect thereon

(797)

(734)

Profit attributable to ordinary shareholders excluding exceptional items, share-based payments and amortisation of acquired intangibles and associated taxation

7,657

8,145

Weighted average number of shares (Basic)

76,037,936

74,050,058

Dilutive share options outstanding

1,608,172

1,336,325

Weighted average number of shares (Diluted)

77,646,108

75,386,383

Basic earnings per share

4.06c

4.04c

Diluted earnings per share

3.98c

3.96c

Adjusted basic earnings per share

10.07c

11.00c

Adjusted diluted earnings per share

9.86c

10.80c

 

The calculation of basic earnings per share is based on profit after taxation and the weighted average of ordinary shares of 1p each in issue during the year. The Company holds 2,021,058 (2019: 2,039,647) of its own shares in treasury and these are excluded from the weighted average above. The basic weighted average number of shares also excludes 242 (2019: 242) being the weighted average shares held by the EBT in the year.

The number of dilutive share options above represents the share options where the exercise price is less than the market price if the Company's ordinary shares. 

 

7  Leases

·

Leases of low value assets; and

·

Leases with a duration of 12 months or less.

 

Right of Use Assets

 

Land and buildings
$000s

Plant and machinery
$000s

Total
$000s

At 1 December 2019

3,554

15

3,569

Additions
Depreciation
Foreign exchange movements

67
(1,161)
161

-
(4)
2

67
(1,165)
163

At 30 November 2020

2,621

13

2,634

 

Lease liabilities

 

Land and buildings
$000s

Plant and machinery
$000s

Total
$000s

At 1 December 2019

3,558

11

3,569

Additions
Interest expense
Lease payments
Foreign exchange movements

67
58
(1,139)
163

-
-
(7)
-

67
58
(1,146)
163

At 30 November 2020

2,707

4

2,711

 

8  Trade and other receivables

 

As at
30 November 2020

$000s

As at
30 November 2019

$000s

Current assets:

Trade receivables
Less: provision against trade receivables

 

12,224
(367)

 

15,414
(1,317)

Trade receivables (net)
Contract assets

11,857
1,418

14,097
1,250

Total financial assets other than cash and cash equivalents classified as amortised cost

13,275

15,347

Other receivables
Prepayments

364
783

638
498

Sub-total

14,422

16,483

Corporation tax receivable

242

8

 

14,664

16,491

Non-current assets:

Other receivables

 

215

 

430

 

9  Trade and other payables

 

As at
30 November 2020

$000s

As at
30 November 2019

$000s

Current liabilities

Trade payables
Other payables
Accruals
Deferred contingent consideration
Deferred consideration
Deferred post-acquisition remuneration
24i Founders Put option

 

11,283
76
6,149
575
167
770
2,312

 

9,959
125
9,116
-
154
395
-

Total current financial liabilities, excluding loans and borrowings, measured at amortised cost

Social security and other taxes
Contract liabilities
Lease liabilities

22,518


874
1,611
1,187

19,749
 

728
1,323

Sub-total trade and other payables

Tax payable

25,004

1,461

21,800

684

 

26,465

22,484

Non- current liabilities

Other payables
Deferred contingent consideration
Deferred consideration
Deferred post-acquisition remuneration
24i Founders Put option
Lease liabilities

 

176
-
-
-
-
1,524

 

56
529
154
198
1,848
-

 

1,700

2,785


10  Cash generated from operations

 

Year to
30 November 2020

$000s

Year to
30 November 2019

$000s

Profit for the year
Tax expense

Net finance costs
Amortisation charge
Depreciation charge
Loss on disposal of property, plant and equipment
Small lease payments
Share based payment charge
Exchange differences
(Increase)/decrease in inventories
Decrease in trade and other receivables
Decrease in provisions
Decrease in trade and other payables

2,663
1,748
704
8,974
1,398
7
(36)
681
(450)
(557)
2,275
(72)
(500)

2,852
629
853
8,384
281
55
-
829
(247)
1,234
5,524
(20)
(6,559)

Cash generated from operations

16,835

13,815

Adjusted operating cash flow before exceptional cash outflows was $18.2m (2019: $17.2m).

 

 

Year to
30 November 2020

$000s

Year to
30 November 2019

$000s

Adjusted operating cashflow
Post-acquisition remuneration in respect of the acquisition of 24i Unit Media BV
Redundancy and associated costs
Acquisition and one-off legal costs
Escrow release received & paid to employees

18,164
 

(1,073)
-
(256)
-

17,179
 

-
(1,753)
(1,125)
(486)

 

Cash generated from operations

16,835

13,815

 

11  Cautionary Statement

 

12  AGM / Annual Report

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