TIDMDEV
RNS Number : 7560X
Dev Clever Holdings PLC
31 August 2022
Dev Clever Holdings plc
("Dev Clever", the "Group" or the "Company")
Interim Results
Good revenue and operational progress. Well positioned to
continue to take advantage of increasing opportunities within the
EdTech sector.
Dev Clever (LSE: DEV), a leading developer of online and
immersive career guidance, learning and development platforms, is
pleased to announce its unaudited interim results for the six
months ended 30 April 2022 (the "Period").
Financial Highlights:
-- Revenue up 39% to GBP3,341k (H1 2021: GBP2,412k) supported by
significant contract wins and STEM licence sales.
-- EBITDA loss of GBP2,998k (H1 2021: loss of GBP162k), which
includes non-cash share-based expenses of GBP103k (H1 2021:
GBP201k).
-- Adjusted loss after tax of GBP3,668k (H1 2021: loss of GBP92k).
-- Cash position at period end of GBP0.1m (H1 2021: GBP9.7m)
reflecting the build-up of outstanding trade receivables (GBP3.9m
for Aldebaron) and investment in intangible assets of GBP2.0m
reflecting further investment in the Launchmycareer.com
platform.
-- Loss per share of 0.65 pence (H1 2021: 0.06 pence); Adjusted
loss per share of 0.61 pence (H1 2021: 0.02 pence).
Operational Highlights for the Period:
-- Successful commercial launch of Launchmycareer.com in January 2022.
-- Exercise of call option to acquire the remaining Veative
STEM-based learning IP at a net cost of $6.5m, of which $0.8m
settled within the Period.
-- Entry into the Chinese market through a material contract for
20,000 licences for the Group's STEM based learning library in
partnership with Question What's Real ("QWR"), an Asia VR hardware
manufacturer and distributor of the Chinese Academy of Sciences
("CAS") .
-- Incorporation in Dubai to facilitate the growth of the Company's international operations.
Post Period End Highlights:
-- Total retention of rights on a global basis and ability to
enter into individual agreements with international partners
enabled through the t ermination of the partnership with Aldebaron
and substantive settlement of the outstanding trade receivables
(GBP3.9m / $5m).
-- Completion of the acquisition of Veative Labs in exchange for
225m new 1p ordinary shares in Dev Clever Holdings plc, at a market
value of GBP67.5m.
-- Three-year $30m unsecured funding facility (the "Facility")
obtained from RiverFort Global Opportunities PCC Limited
("RiverFort"). The Facility is dependent upon the satisfaction of
drawdown conditions, principally re-admission to the Standard
Segment of the Main Market of the London Stock Exchange
("Re-admission")
-- Appointment of Rahul Dravid, the current coach of the Indian
cricket team and former captain of the Indian national team, as
brand ambassador for Launchmycareer.com in India, and completion of
advertising campaign materials for release in Q4 2022.
-- Launch of the Learning Hub within Launchmycareer.com,
providing access to the Group's STEM-based learning library on a
subscription basis, direct to consumers in India.
-- Launch of The Careers Curriculum in the UK, providing a
comprehensive 30-lesson curricular model linked to the Gatsby
Benchmarks and covering years 7 to 11.
Ankur Aggarwal and Chris Jeffries, Joint-Chief Executive
Officers of Dev Clever, said:
"We have continued to make good progress, which is reflected in
top line growth of 39% and supported by the significant uplift in
demand for the Group's STEM based learning platform. We remain
confident that the business will benefit from the implementation of
new distribution agreements and look forward to updating on this
progress in due course.
We were also delighted to announce the completion of the
purchases of both Veative Labs, based in Noida, India and the
residual IP from Veative Singapore. The merger of the businesses
means that the Group is now singularly focussed to accelerate
growth and take full advantage of the opportunities arising from
its commercial partnerships with both NISA and the Common Service
Centre Academy Centres, as well as its direct-to-consumer careers
platform offer in India. The launch of the Learning Hub in July now
enables the Group to bring more content to users and we look
forward to announcing new content partners in due course.
We are confident that the retained control over our distribution
rights on a global basis, the completion of the Veative
acquisition, and the recently announced funding facility with
RiverFort, will enable the Group to further accelerate its growth
and take advantage of the increasing opportunities within the
EdTech sector and specifically to help young people close the gap
between education and the world of work.
For more information:
Dev Clever Holdings plc
Christopher Jeffries
Joint Chief Executive Officer and
Executive Chairman
Ankur Aggarwal
Joint Chief Executive Officer
Nicholas Ydlibi
Chief Financial Officer +44 (0) 1827 930 408
Novum Securities Limited - Financial
Adviser & Joint Broker
Colin Rowbury
David Coffman +44 (0) 20 7399 9400
finnCap Limited - Joint Broker
Jonny Franklin-Adams / Abigail Kelly
/ George Dollemore (Corporate Finance)
Richard Chambers / Harriet Ward (ECM) +44 (0) 20 7220 0500
Buchanan Communications
Chris Lane / Kim van Beeck / Toto
Berger +44 (0) 207 466 5105
Notes to Editors:
About Dev Clever
Dev Clever Holdings plc, together with its wholly owned
subsidiaries, is a software and technology group based in Stafford,
United Kingdom, and Noida, India, specialising in the use of
lightweight integrations of cloud-based VR and gamification
technologies to deliver rich customer engagement experiences across
both the education and commercial sectors. In January 2019, Dev
Clever listed on the Standard List of the London Stock Exchange.
The Group's core focus is the development and commercialisation of
its core Educate platforms.
Dev Clever aims to reduce the global skills shortage by
delivering an enhanced careers guidance service via its online
platforms, Launchmycareer.com and Launchyourcareer.com, and virtual
reality software (Victar VR). The business has established a global
partnership with Lenovo to roll out its service worldwide, with
offerings already on the market in the UK, US, and Canada. Dev
Clever is also focused on the Indian market and has partnered with
the National Independent Schools Alliance (NISA) to provide a
comprehensive service offering within Indian budget private
schools. Through this, the business has been developing and has
launched a direct-to-consumer offering in India.
For further information, please visit
www.devcleverholdingsplc.com
Joint Chief Executives' Review
Overview
We are pleased to report Dev Clever's interim results for the
six months ended 30 April 2022. This has again been another busy
and hugely productive period for the Group. Our focus is now very
much on user acquisition through the roll-out of
Launchmycareer.com, the Group's careers education platform, across
India and extending the footprint of sales of the Group's virtual
reality STEM-based learning platform globally.
We continue to believe that there are significant opportunities
that are emerging following the gradual global recovery from the
Covid-19 pandemic. While the re-emergence of Covid-19 remains a
very real risk, as exemplified by the recent lock down in China, we
firmly believe that the global recovery will afford the Group many
new opportunities for growth.
Progress in the Period
Global STEM
We were delighted to announce a new collaboration with Question
What's Real ("QWR"), an Asia-based VR hardware manufacturer and
distributor of the Chinese Academy of Sciences ("CAS"). The initial
contract is for 20,000 VR devices to be deployed to users in China,
pre-installed with the Group's immersive STEM learning library, on
an annual recurring SaaS subscription model. While the initial roll
out has been slowed following the recent lock-down in Shanghai, the
Group has been encouraged with initial user feedback and remains
confident of securing further orders in the Chinese market.
The Group is also experiencing a pick-up in demand in the US
post Covid with a 113% increase in sales through its Lenovo
partnership in the Period, albeit from a low start point, and the
establishment of a new distribution channel through Douglas
Stewart, a leading US distributor of computer products to the
education sector.
IP Acquisition
Under the terms of the comprehensive agreement with Veative Labs
Pte Ltd (Singapore), the Group exercised its call option to acquire
the remaining IP from Veative. The Company advanced $1.15mn by way
of an upfront payment and will settle the balance of $5.35mn in
shares on readmission of the Company to the standard segment of the
Main Market of the London Stock Exchange ("Re-admission"). This
permanently secures the ownership and distribution rights for the
entire Veative STEM and language learning modules for the benefit
of the Group.
Launch of Launchmycareer.com in India
The Group has invested significantly in the Period to build up
the capability to support the commercial launch of
Launchmycareer.com ("LMC"). This has included the establishment of
the appropriate sales, customer success and marketing
infrastructure alongside the support for our counselling
operations. We were particularly pleased to appoint Ankita Dabas as
Global Chief Marketing Officer. Ankita, who holds an MBA in Finance
and Strategy from University of Rochester, joined the Group
following a successful stint across consumer internet companies and
in the venture capital sector in India. Ankita has extensive
experience as both a business founder and an investor in companies
in India including consumer focused platform businesses Livspace
and FabFurnish and early-stage investment funds Brand Capital and
AIF Capital. Ankita has also served as an observer on investee
company boards steering them through steep growth curves. Ankita's
appointment will ensure the rapid build-up of LMC's brand, user
base and execution of our customer acquisition and retention
plan.
LMC is now live across India, both on a standard and premium
subscription service. The Company has completed a market validation
campaign that resulted in the platform hosting c.120,000 active
users with 3,500 users having already upgraded to the premium
service. Additionally, the Group has onboarded over 200 career
success counsellors and the average user feedback ratings are high
at 4.7 out of 5, providing further positive validation.
The Group has continued to make good progress with the five-year
exclusive partnership agreement with NISA, India's largest
governing body for budget private educational institutions
representing over 70,000 budget private schools. Working in close
collaboration with NISA, the Group has now onboarded over 2,000
private schools and created over a million student accounts ready
to be activated now that the market validation campaign has been
completed. The collaboration with NISA has been extremely
successful to date and we remain confident in the partnership's
ability to continue the rapid onboarding of NISA schools.
Cash Flow
The Group has invested significantly in the first half year in
both the on-going development of its customer offer, the
acquisition of IP and the full commercial launch of LMC across
India. In addition, the on-going renegotiation of the tactical
partnership with Aldebaron resulted in delays to the settlement of
outstanding trade receivable balances and a build-up in working
capital. As a result, cash reserves fell in the period from GBP7.5m
at the year ended 31 October 2021 to GBP0.1m at the Period-end. The
Aldebaron debt was substantively settled by 12 August 2022.
Post Period-end Operational Developments
Termination of the Tactical Partnership with Aldebaron
It was mutually agreed that the agreement with Aldebaron DMCC
("Aldebaron") would be terminated, subject to completion of all
obligations under the initial proof of concept phase as announced
on 19 July 2022.
This returned the global distribution rights for the LMC
platform and the STEM-based learning library to Dev Clever. We
believe that by retaining these rights on a global basis, and
therefore maintaining the ability to enter into individual
agreements with international partners, the Group will be able to
take advantage of opportunities faster and create more value for
its shareholders. Initial discussions have commenced with a number
of potential partners in international territories, and we look
forward to updating you on our progress.
Acquisition of Veative Labs
On 19 July, the Group announced the completion of the
acquisition of Veative Labs Private Limited ("VLPL") in exchange
for the issue of 225mn new ordinary shares in the Group. The
acquisition enables the Group to capitalise on the collaboration
between Dev Clever and Veative that had existed prior to the
signing of the comprehensive agreement in April 2021 and
specifically to secure the full commercial value of the NISA
partnership and the control of the future roadmap for the
development of their joint platforms. It also enables the Group to
harness the full development capability of the Veative Development
Centre.
RiverFort Facility
On 20 August 2022, the Group obtained an up to US$30 million
three-year unsecured funding facility (the "Facility") with
RiverFort Global Opportunities PCC Limited ("RiverFort"), providing
the Group with a significantly strengthened balance sheet and
enabling it to pursue the global EdTech growth opportunity with
sustained confidence.
Board Membership
Following the completion of the acquisition of Veative Labs, we
were delighted to announce that Ankur Aggarwal, CEO of Veative,
would join the Board of Dev Clever as joint CEO of the enlarged
group with immediate effect. Ankur's appointment reflects the
importance of the Veative business to the Group's international
expansion and the increasing focus on India and other international
markets going forward.
The Group also announced the resignation of David Ivy as
Non-Executive Director and Chair of the Audit Committee owing to
personal circumstances. We are extremely grateful to David for his
invaluable contribution to the Board over his tenure and wish him
all the best for the future.
The Group remains committed to enhancing the capabilities of its
Board and has commenced the process to appoint two internationally
experienced individuals with relevant global commercial and growth
company expertise. These appointments are for the positions of
Non-Executive Chairman and Non-Executive Director and Chair of the
Audit Committee. We will provide further updates once the
appointments are confirmed.
Learning Hub
In July, we launched the Launchmycareer.com Learning Hub.
Initially, the Learning Hub will provide access to the Group's STEM
and language learning platforms to users on an annual subscription
basis and will complement the careers guidance and counselling
services. The Group is actively looking for new content partners to
further enrich this offer for our customers and we look forward to
updating on this as negotiations progress.
Brand Campaign
We were delighted to recently confirm Rahul Dravid as brand
ambassador for Launchmycareer.com. Rahul, who was previously
captain and currently serves as head coach to the Indian cricket
team, is a role model to young people who aspire to become the best
version of themselves. He personifies the benefits of engaging with
young people to support their learning and development of the right
skills to become future stars. The formal marketing campaign is
scheduled to launch in October 2022. We believe that this exciting
association will help reinforce our brand at the same time as
adding very specific credibility in the development of skills and
career ambitions in young people across India. This will support
our marketing activity for the parents of NISA students and our
direct-to-consumer customers.
National Career Challenge
On July 7, the Group's UK subsidiary, The Inspirational Learning
Group, hosted its first live National Careers Challenge final since
the onset of Covid-19. The National Careers Challenge, currently
open to secondary pupils between years 7 and 13, enabled over
57,000 pupils to engage in a variety of business-related challenges
from employers including National Westminster Bank, Air Products
and Merlin Entertainments. The best teams from more than 80 of the
participating schools, presented their proposals at the finals
event at the ICC in Birmingham, which also included virtual
presentations from 8 Chinese schools for the first time. The
National Careers Challenge is intended to become a cornerstone of
the Group's inter-connected careers guidance eco-system, enabling
it to appeal to companies from all over the world to showcase their
businesses and sectors of industry through the lens of a student,
demystifying the world of work and connecting students with
employers via virtual encounters and live webinars.
Outlook
Strategic Direction
The market for EdTech remains robust and we believe there is a
globally growing need for more effective careers platforms that can
engage young people and connect them directly with their future
employers. Our vision is to close the skills gap by transforming
the way the world inspires, educates and prepares young people for
the world of work, not just for profit but for the profitability of
humankind.
Closing the global skills gap could add US$11.5 trillion to
global GDP by 2028 (Accenture: It's learning, just not as we know
it). Education and training systems need to keep pace with the new
demands of labour markets that are continually challenged by
technological disruption, demographic change and the evolving
nature of work. Moreover, the Covid-19 pandemic has amplified the
skills gap and the need to close it more urgently (McKinsey: May
2020).
The historic investment in the Group's software platforms and
the extensive know how that resides across its product team and
development centre provides the enlarged Group with an ideal base
from which to leverage long term value from this sector. The Group
already possesses
-- LaunchMyCareer.com ("LMC"), its youth-centric career success
platform service which supports a learner's entire career success
journey of (i) Career Discovery (ii) Career Guidance (iii)
Career-connected Learning and (iv) Career Readiness. LMC is
currently live and commercially launched in India, the world's
second largest Edtech market after the US with a total addressable
market size of 300 million students.
-- Market validation through partnerships with both NISA and the
CSC Academy Centres that provide access to in excess of 15m young
people
-- The world's largest library of interactive immersive STEM and
language learning content, already localised in English, Chinese,
Arabic, Vietnamese and Spanish. This is supported by robust
immersive analytics for students, teachers and parents through a
cloud platform access.
-- A customised VR device and operating system, designed
specifically for education, giving competitive edge to win large
government projects where end to end solutions are required.
-- Complementary and established employer-led, experiential
careers learning programme though the National Careers Challenge in
the UK that can be scaled across both different geographies and
business sectors
The Group is actively pursuing a global partnership program that
will enable leading business groups to gain distribution rights for
the Group's products within their respective regions. This strategy
will support the Group to accelerate growth rapidly in more
emerging markets. The Group will support its expansion plans
through the further adaptation of its content into more global and
regional languages, which should also provide greater leverage in
securing government contracts.
We are also exploring opportunities to incorporate the Metaverse
and a Real World Skills Certification Program to enrich LMC's
premium service offer for members. This will provide virtual work
experiences for learners, dedicated area for learners to connect
with employers, intuitive and immersive 360deg career guides, tours
of workplaces and campuses.
Prospectus
The Company continues to work with its professional advisers to
finalise its prospectus and, subject to the necessary regulatory
approvals, to relist the Group on the Standard Segment of the Main
Market of the London Stock Exchange.
Summary
The Group has continued to make very good progress, as reflected
in the revenue growth and supported by the significant uplift in
demand for the Group's STEM based learning platform. We remain
confident that the business will benefit from the implementation of
new agreements and are confident that total control over our global
rights, the completion of the Veative acquisition and the recently
announced facility with RiverFort will enable the Group to further
accelerate its growth strategy. There remains a significant global
opportunity within the EdTech sector and we remain focussed on
supporting young people across the globe to close the gap between
education and the world of work.
Finally, we would, on behalf of the Board, like to thank our
customers, stakeholders and employees for their ongoing support and
their patience as we overcome the challenges that have delayed the
publication of our prospectus and relisting. We look forward to
providing an update on our continued progress in due course.
Ankur Aggarwal and Christopher Jeffries
Joint Chief Executive Officer, Chairman & Joint Chief
Executive Officer respectively
31 August 2022
Principal Risks and Uncertainties
Covid-19
The Board regularly monitors exposure to key risks, such as
those related to its competitive position relating to sales, cash
position and productivity. It has also taken into account the
economic situation facing its core markets in the light of Covid-19
and the impact this continues to have on demand.
Covid-19 continues to have a significant impact on many
companies across the globe. Our colleagues now have the opportunity
to work on a hybrid basis to ensure an appropriate balance between
productivity and collaboration and to ensure their and others'
safety and wellbeing. The Group has established robust
communication channels; and our employees continue to remain
dedicated and professional.
Whilst we believe that the global Covid-19 pandemic has
continued to suppress short-term demand, the Group is seeing signs
of an uplift in activity with educators and employers expressing a
renewed interest in the Group's remote and immersive applications
and solutions across a number of territories. We remain confident
that the Group's careers platforms, Launchourcareer.com and VICTAR
VR, and the Veative STEM-based learning platform are ideally placed
to support the requirements of both in-class and remote learning
and the Group has made excellent progress in ensuring the platform
is available to those who want to use it across multiple
territories.
Capital Structure, Cash Flow and Liquidity.
The Directors continuously monitor the cash flow requirements of
the Group to ensure the Group has access to the funds required to
finance its operations. At the end of the Period Group cash
reserves were GBP0.1m following delays to the settlement of
outstanding receivables of GBP3.6m ($5m) from Aldebaron whilst
agreement was reached over the ongoing business relationship. These
amounts were substantively settled by 12 August 2022, providing
sufficient working capital to enable the Group to meet its
obligations as they fall due. As a result of the termination of the
agreement and the loss of its associated revenue streams, of $45m
over the next 3 years, the Group is in the process of reassessing
its funding requirements to maintain the planned growth of the
business. On 20 August 2022, the Group obtained a $30 million
funding facility through RiverFort and is continuing to explore
other forms of finance. This, and the on-going support of our
investors, means that the Directors have a reasonable expectation
that the Group will be able to raise funds to provide adequate
resources to continue in operational existence for the foreseeable
future.
Regulatory compliance
The Group's expansion into India and the potential to enter into
further international markets exposes the Group to new and
potentially different regulatory regimes, including different
legislation regarding general data protection ("GDPR"). Failure to
understand and comply with these requirements may expose the Group
to regulatory penalties and / or excessive tax burden. The Group
has responded to this challenge by employing a dedicated Head of
Governance and Risk with extensive experience of global GDPR
requirements. In addition, it further seeks to minimise regulatory
risk through the formation of commercial partnerships with partners
that are already established within their respective markets. The
Group has also expanded upon its network of professional advisers
with expertise within their respective territories and will seek to
utilise this resource as required in the future.
Financial Review
-- Revenue up 39% at GBP3,341k for the Period (H1 2021:
GBP2,412k) and supported by significant contract win in respect of
STEM licence sales.
-- EBITDA loss of GBP2,998k (H1 2021: loss of GBP162k), includes
non-cash share-based expenses of GBP103k (H1 2021: GBP201k) and
reflects the significant investment made by the Group in the set-up
of Launchmycareer India (including incremental advertising costs of
GBP1.3m and employee costs of GBP1.0m) and agent's commissions of
GBP0.7m in respect of the CAS licence agreement.
-- Adjusted loss after tax of GBP3,668k (H1 2021: loss of GBP92k).
-- Net decrease in cash and cash equivalents of GBP7.4m after
further outlay on intangible assets of GBP2.0m and tangible assets
of GBP0.2m. Net cashflow outflow from operating activities of
GBP5.1m reflects the build-up of outstanding trade receivables of
GBP3.9m for Aldebaron and the set-up costs and advertising
investment in respect of Launchmycareer India.
-- As at 30 April 2022, the Group had a net cash position of GBP0.1m (H1 200: GBP9.7m).
-- Loss per share of 0.65 pence (H1 2021: 0.06 pence); Adjusted
loss per share of 0.61 pence (H1 2021: 0.02 pence).
Nicholas Ydlibi
Chief Financial Officer
31 August 2022
RESPONSIBILITY STATEMENT
Directors' Responsibility Statement
The Directors confirm that this consolidated interim financial
information has been prepared in accordance with International
Accounting Standard 34 (IAS 34) and that the interim report
includes a fair review of the information required by DTR 4.2.7R
and DTR 4.2.8R, namely:
-- an indication of important events that have occurred during
the first six months of the financial year (being six months from
the financial year end, 31 October 2021) and their impact on the
condensed set of consolidated financial statements, and a
description of the principal risks and uncertainties for the
remaining six months of the financial year; and
-- material related-party transactions in the first six months
and any material changes in the related party transactions
described in the last Annual Report.
By order of the Board
Christopher Jeffries
Chairman & Joint Chief Executive Officer
31 August 2022
Consolidated Statement of Comprehensive Income
For the six months ended 30 April 2022
Unaudited Unaudited
Six months Six months
to 30 April to 30 April
2022 2021
Note GBP GBP
Continuing operations
Revenue 10 3,341,277 2,412,442
Cost of sales (2,250,398) (834,415)
Gross profit 1,090,879 1,578,027
Administrative expenses 11 (4,981,636) (1,851,813)
Loss from operations (3,890,757) (273,786)
Finance expense (30,315) (23,267)
Loss before tax (3,921,072) (297,053)
Tax credit 11,339 3,546
Loss for the period from continuing
operations (3,909,733) (293,507)
Other comprehensive income:
Items that may be reclassified
to profit or loss in subsequent
periods:
Exchange gains / (losses) arising (61,824) -
on translation of foreign operations
Tax relating to items that may be - -
reclassified
Total other comprehensive income - -
for the period
Total comprehensive income for the
period attributable to shareholders (3,971,557) (293,507)
------------- -------------
Earnings per share
Basic and diluted earnings (pence
per share) 5 (0.65) (0.06)
Adjusted basic and diluted earnings
(pence per share) 5 (0.61) (0.02)
Consolidated Statement of Financial Position
At 30 April 2022
Unaudited Unaudited Audited
as at as at as at
30 April 30 April 31 Oct
2022 2021 2021
Note GBP GBP GBP
Non-Current Assets
Goodwill 6 2,562,977 240,145 2,562,930
Intangible Assets 6 12,656,599 6,112,629 7,149,083
Property, Plant & Equipment 7 607,135 95,197 316,085
Financial assets at fair
value through profit or loss 138,653 138,653 138,653
------------ ------------ ------------
15,965,364 6,586,624 10,166,751
Current Assets
Inventories 71,953 6,370 2,940
Trade and other receivables 8 9,606,998 4,170,014 6,338,506
Cash and cash equivalents 120,182 9,675,958 7,509,084
------------ ------------ ------------
9,799,133 13,852,342 13,850,530
Total Assets 25,764,497 20,438,966 24,017,281
Current Liabilities
Trade and other payables 9 (7,221,329) (609,726) (1,555,461)
Deferred income (229,153) (153,559) (297,835)
Provisions for liabilities
and charges - - (60,000)
Loans and borrowings (84,895) (91,923) (95,916)
(7,535,377) (855,208) (2,009,212)
Non-current liabilities
Loans and borrowings (619,933) (286,689) (530,548)
Deferred tax (15,819) (22,320) (15,819)
------------ ------------ ------------
(635,752) (309,009) (546,367)
Total liabilities (8,171,129) (1,164,217) (2,555,579)
Net Assets 17,593,368 19,274,749 21,461,702
------------ ------------ ------------
Share capital 6,041,143 5,935,842 6,041,143
Share premium 19,651,893 17,640,775 19,651,893
Merger reserve (2,499,900) (2,499,900) (2,499,900)
Other reserves 2,934,249 524,723 2,831,026
Translation reserve (83,877) - -
Retained income (8,450,140) (2,326,691) (4,562,460)
17,593,368 19,274,749 21,461,702
------------ ------------ ------------
Consolidated Statement of Changes in Equity
At 30 April 2022
Share Merger Share Other Translat'n Retained Total
capital reserve premium reserves reserve income
GBP GBP GBP GBP GBP GBP GBP
Balance at 1 November
2020 4,712,197 (2,499,900) 1,977,447 323,237 - (2,033,184) 2,479,797
Loss after taxation
for the period - - - - - (293,507) (293,507)
---------- ------------ ------------ ---------- ----------- ------------ ------------
Total comprehensive
loss for the period - - - - - (293,507) (293,507)
Issue of ordinary
shares 1,223,645 - 17,016,355 - - - 18,240,000
Share issue costs - - (1,353,027) - - - (1,353,027)
Share option issues 201,486 - - 201,486
---------- ------------ ------------ ---------- ----------- ------------ ------------
1,223,645 - 15,663,328 201,486 - 17,088,459
Balance at 30
April 2021 5,935,842 (2,499,900) 17,640,775 524,723 (2,326,691) 19,274,749
---------- ------------ ------------ ---------- ----------- ------------ ------------
Balance at 1 November
2021 6,041,143 (2,499,900) 19,651,893 2,831,026 - (4,562,460) 21,461,702
Reclassification
of translation
reserve - - - - (22,053) 22,053 -
Loss after taxation
for the period - - - - (3,909,733) (3,909,733)
Foreign currency
translation (61,824) - (61,824)
---------- ------------ ------------ ---------- ----------- ------------ ------------
Total comprehensive
loss for the period - - - - (83,877) (3,887,680) (3,971,557)
Issue of ordinary - - - - - -
shares
Share issue costs - - - - - -
Share option issues - - - 103,223 - 103,223
---------- ------------ ------------ ---------- ----------- ------------ ------------
- - - 103,223 - 103,223
Balance at 30
April 2022 6,041,143 (2,499,900) 19,651,893 2,934,249 (83,877) (8,450,140) 17,593,368
---------- ------------ ------------ ---------- ----------- ------------ ------------
Consolidated Statement of Cash Flows
For the six months ended 30 April 2022
Unaudited Unaudited
Six months Six months
to to 30 April
30 April 2021
2022
GBP GBP
Cash flows from operating activities:
Loss before tax (3,921,072) (297,053)
Adjustments for:
Depreciation 73,926 26,935
Amortisation of intangibles 908,805 85,111
Gain on disposal of tangible assets (12,204) -
Finance income - -
Finance expense 30,315 23,267
Non-cash element of share-based
payments 103,223 201,486
Increase decrease in inventories (68,442) (3,720)
Increase in trade and other receivables (3,275,482) (1,106,445)
Increase in trade and other payables 1,003,700 108,069
Income tax received 72,603 68,455
------------ -------------
Net cash flows from operating activities (5,084,628) (893,895)
Cash flows from investing activities:
Payments to acquire property, plant,
and equipment (236,282) (16,655)
Payments to develop intangible assets (2,017,027) (5,379,017)
Proceeds from disposal of tangible 24,391 -
assets
Net cash flows used in investing
activities (2,228,918) (5,395,672)
Cash flows from financing activities
:
Net proceeds from issue of equity - 14,986,972
Repayment of borrowings (75,494) (45,814)
Interest paid (15,153) (8,106)
------------ -------------
Net cash flows from financing activities (90,647) 14,933,052
Net increase/(decrease) in cash
and cash equivalents in the year (7,404,193) 8,643,485
Cash and cash equivalents at beginning
of period 7,509,084 1,032,473
Foreign currency translation 15,291
------------ -------------
Cash and cash equivalents at end
of period 120,182 9,675,958
------------ -------------
Cash and cash equivalents 120,182 9,675,958
------------ -------------
Notes to the Interim report
Basis of preparation
1
The consolidated interim financial statements have been prepared
in accordance International Financial Reporting Standards
in conformity with the requirements of the Companies Act
2006 and expected to be effective at the year-end of 31 October
2022.
The accounting policies are unchanged from the financial
statements for the year ended 31 October 2021. The interim
financial statements, which have been prepared in accordance
with International Accounting Standard 34 (IAS 34), are unaudited
and do not constitute statutory accounts within the meaning
of section 434 of the Companies Act 2006. Statutory accounts
for the year ended 31 October 2021, prepared in accordance
with IFRS, have been filed with Companies House. The Auditors'
Report on these accounts was unqualified but included a matter
to which the Auditors drew attention by way of emphasis without
qualifying their report and did not contain any statements
under section 498 of the Companies Act 2006.
The consolidated interim financial statements are for the
six months to 30 April 2022. The interim consolidated financial
information does not include all the information and disclosures
required in the annual financial statements and should be
read in conjunction with the Group's annual financial statements
for the year ended 31 October 2021, which were prepared in
accordance with IFRS's and in conformity with the requirements
of the Companies Act 2006. The Group's business is not subject
to seasonal variations.
The condensed interim statements have been prepared under
the going concern assumption, which presumes the Group will
be able to meet its obligations as they fall due for the
foreseeable future.
The Directors have carried out a detailed assessment of going
concern as part of the financial reporting process, taking
into consideration a number of matters including forecast
cash flows for a period of at least 12 months from the date
of approval of the Financial Statements, medium and long
term business plans and expectations The going concern basis
of accounting has been applied based on management's consideration
of financial projections and business plans for the business,
which include a number of forward looking assumptions about
the future growth in the customer base and conversions on
the Launchmycareer.com platform as well as sales of STEM
based learning solutions and associated hardware.
The Directors expect to deliver results which will lead to
continuing market support and therefore consider it appropriate
for the Group to continue to adopt the going concern basis
of accounting in the preparation of the annual financial
statements.
Summary of significant accounting policies
2
New standards, interpretations and amendments adopted by
the Company
No new standards or amendments have been adopted for the
first time in these financial statements.
Critical accounting estimates and judgements
3
Trade receivables
As at 30 April 2022 the Group had receivables of $5m that
had become three months overdue in respect of the first phase
of the tactical partnership with Aldebaron. The Directors
were in extensive negotiations with the management team at
Aldebron relating to the future direction of the tactical
partnership and at all times were provided with assurances
that this debt would be honoured. As a result, the Directors
exercised their judgement and deemed it unnecessary to raise
an impairment provision on the carrying value of the debt.
The balance was substantively settled by 12 August 2022.
Further detail can be found in note 8, Trade and other receivables
Share Based Payments
4
Share-based payment schemes with employees
During the period ended 30 April 2022, 852,660 share options
were awarded to key management personnel under the Company's
EMI share option plan. The options have an exercise price
of GBP0.30 per share and vest, subject to continued service
by the employee, over a period of 36 months. The options
expire at the end of a period of 10 years from the Grant
Date of 1 December 2021 or on the date on which the option
holder ceases to be an employee.
During the period the Company was required to recognise a
total expense of GBP103,223 (HY 2021: GBP201,486) in the
income statement in respect to share options and warrants
in issue or committed to issuing at the end of the reporting
period.
The table below represents the weighted average exercise
price (WAEP) of and the movements in share options and warrants
during the period:
30 Apr 2022 WAEP 30 Apr 2021 WAEP
No. options No. options
and warrants and warrants
Outstanding at beginning
of period 185,635,363 29,392,266 1.17
Issued in period 852,660 94,000,000 35.00
Lapsed during period (1,000,000) (2,220,995) 9.10
Exercised during the period - - -
Outstanding at the end of
the period 185,488,023 121,171,719 27.72
Exercisable at the end of
the period 110,951,382 102,882,866 31.73
The Company has measured the fair value of the services received
as consideration for equity instruments of the Company, indirectly
by reference to the fair value of the equity instruments.
The table below sets out the options and warrants that were
issued during the period and the principal assumptions used
in the valuation.
Type Key management
Grant Date 1 December
2021
Number of options/warrants 852,660
Share price at grant date GBP0.293
Exercise price at grant GBP0.30
date
Risk free rate 0.86%
Option life 3 years
Expected volatility 72.44
Expected dividend yield 0%
Expected redemption 100%
Fair value per option / GBP0.138
warrant at grant date
Earnings per share
5
Unaudited Unaudited
Six months Six months
to 30 April to 30 April
2022 2021
Basic and diluted earnings attributable
to equity holders of the Group
Continuing operations (3,909,733) (293,507)
Weighted average number of shares for
Basic EPS 604,114,274 504,596,483
Earnings per share from continuing operations
(pence) (0.65) (0.06)
Adjusted basic and diluted earnings
attributable to equity holders of the
Group:
Continuing Operations (3,667,757) (92,021)
Weighted average number of shares for
Basic EPS 604,114,274 504,596,483
Adjusted earnings per share from continuing
operations (pence) (0.61) (0.02)
The diluted earnings per share equals the basic earnings
per share due to the loss position of the Group. The adjusted
loss is calculated after adjusting for non-recurring one-off
expenditure associated with the Veative acquisition, incorporation
fees for Dubai and the costs recognised in respect of share
based payments in the period.
Earnings attributable to equity holders
of the Group (3,909,733) (293,507)
Veative acquisition expenses 119,270 -
Incorporation expenses Dubai 19,483 -
Share-based payment - share
options 103,223 201,486
Adjusted earnings attributable to equity
holders of the Group (3,667,757) (92,021)
------------- ---------------
Intangible assets Goodwill Customer Patents, Internal Total
6 contracts Trademarks use software
and other
rights
GBP GBP GBP GBP GBP
Cost
At 1 November
2020 240,145 74,659 3,682 1,025,421 1,103,762
Additions - - 4,406,608 972,409 5,379,017
---------- ----------- ------------ -------------- ------------
At 30 April 2021 240,145 74,659 4,410,290 1,997,830 6,482,779
Amortisation
At 1 November
2020 - (21,776) - (263,263) (285,039)
Charge for period - (18,665) - (66,446) (85,111)
---------- ----------- ------------ -------------- ------------
At 30 April 2021 - (40,441) - (329,709) (370,150)
Cost
At 1 November
2021 2,562,930 74,659 4,410,290 3,665,820 8,150,769
Additions - - 5,050,198 1,366,123 6,416,321
Foreign currency 47 - - - -
translation
---------- ----------- ------------ -------------- ------------
At 30 April 2022 2,562,977 74,659 9,460,488 5,031,943 14,567,090
Amortisation
At 1 November
2021 - (74,659) (277,677) (649,350) (1,001,686)
Charge for the
period - - (277,421) (631,384) (908,805)
---------- ----------- ------------ -------------- ------------
At 30 April 2022 - (74,659) (555,098) (1,280,734) (1,910,491)
Net book value
At 30 April 2022 2,562,977 - 8,905,390 3,751,209 12,656,599
At 30 April 2021 240,145 34,218 4,410,290 1,668,121 6,112,629
Goodwill and the customer relationship intangible assets held
by the Group arose on the acquisitions of Phenix Digital, completed
on 13 March 2020 and The Inspirational Learning Group, completed
on 26 July 2021.
The Company's internally developed software primarily relates
to its Launchmycareer careers education platform. The pace
of development has further increased over the first half year
with the development and launch of on-line counselling, the
learning hub and immersive future world of work experiences
in India.
The Company exercised its option to acquire Veative's remaining
STEM based learning IP and its associated global distribution
rights at a cost of GBP5.1m. Deferred consideration of GBP4.4m
has been reported within trade and other payables (note 9).
An impairment review was carried out at the balance sheet date.
No impairment arose.
7 Tangible assets Right Leasehold Fixtures Computer Total
of use improvements and fittings equipment
assets
GBP GBP GBP GBP GBP
Cost
At 1 November
2020 - - 18,695 99,225 202,169
Additions - - 45 16,610 16,655
---------- -------------- -------------- ----------- ----------
At 30 April 2021 - - 18,740 115,835 218,824
Depreciation
At 1 November
2020 - - (10,716) (59,367) (96,688)
Charge for period - - (2,532) (24,403) (26,935)
---------- -------------- -------------- ----------- ----------
At 30 April 2021 - - (13,248) (83,770) (130,274)
Cost
At 1 November
2021 311,266 - 36,267 144,191 491,724
Additions 138,696 67,509 49,767 119,006 374,978
Disposals - - (14,562) - (14,562)
Foreign currency
translation - - 587 1,733 2,320
---------- -------------- ------------- ------------ ----------
At 30 April 2022 449,962 67,509 72,059 264,930 854,460
Depreciation
At 1 November
2021 (76,887) - (17,435) (81,317) (175,639)
Charge for the
period (43,212) (914) (4,990) (24,811) (73,926)
Disposals - - 2,375 - 2,375
Foreign currency
translation - - (10) (124) (134)
---------- -------------- ------------- ------------ ----------
At 30 April 2022 (120,099) (914) (20,060) (106,252) (247,325)
Net book value
At 30 April 2022 329,863 66,595 51,999 158,678 607,135
An impairment review was carried out at the balance sheet date.
No impairment arose.
Trade and other receivables
8
Unaudited Unaudited Audited
at 30 April at 30 April at 31 October
2022 2021 2021
GBP GBP GBP
Trade receivables 7,077,086 1,484,156 4,562,827
Less: Provision for impairment
of trade receivables - (450) (11,520)
------------- ------------- ---------------
7,077,086 1,483,706 4,551,307
Prepayments 1,575,545 207,370 1,628,592
Accrued income 24,781 300,000 -
Income taxes 6,788 66,951 68,052
Taxation and social security 470,309 108,013 86,414
Other receivables 452,489 2,003,974 4,141
------------- ------------- ---------------
9,606,998 4,170,014 6,338,506
------------- ------------- ---------------
Included within Trade receivables is $5m outstanding from
the previous year end in respect of the first phase of the
tactical partnership with Aldebaron. This debt was due to
be settled by 31 January 2022 but was actually substantively
settled by 12 August 2022. A balance of GBP3,985k is included
within amounts up to three months past due in the maturity
analysis of unimpaired trade receivables detailed below.
Also included within Trade receivables was $3m receivable
in respect of STEM licence sales to Guizhou Quantum With
Reality Technology on behalf of the Chinese Academy of Science.
An amount of GBP2,391k is included within amounts not overdue
at the period end in the maturity analysis of unimpaired
trade receivables detailed below.
Maturity analysis of unimpaired Unaudited Unaudited Audited
trade receivables: at 30 April at 30 April at 31 October
2022 2021 2021
GBP GBP GBP
Amounts not overdue at the
period end 2,727,426 390,024 3,658,208
Up to three months past
due 4,340,659 879,002 891,425
More than three months past
due 9,000 214,680 1,674
7,077,085 1,483,706 4,551,307
------------- ------------- ---------------
Overdue balances as at 30 April 22 have been substantively
settled since the period end. The maturity analysis reflects
a combination of the standard commercial payment terms that
operate within the education sector and the extended credit
terms that have been negotiated as part of material licencing
agreements.
Trade and other payables
9
Unaudited Unaudited Audited
at 30 April at 30 April at 31 October
2022 2021 2021
GBP GBP GBP
Current
Trade payables (882,007) (98,491) (887,200)
Accruals (5,736,758) (406,063) (458,153)
Deferred income (229,153) (153,559) (297,835)
Income taxes (30,575) - (30,575)
Other taxation and social
security (394,891) (98,378) (174,046)
Other payables (177,098) (6,794) (5,487)
------------- ------------- ---------------
(7,450,482) (763,285) (1,853,296)
------------- ------------- ---------------
Included within accruals is a balance of GBP4,399k representing
the amount still outstanding following the exercise of the
call option to acquire the remaining Veative STEM-based
learning IP.
Revenue segmental analysis
10
As reported in the FY 2021 Annual Report, the Group is now
solely focussed on the deployment of its resources on its
Educate business through its core EdTech platform, Launchmycareer
and its digital STEM based learning resources. As a result,
the chief operating decision maker, being the Board of Directors,
now considers the Group to have a single Educate focus.
Period ended 30 April 2022
Educate Total
GBP GBP
Revenue by type:
Development and set up fees 931,375 931,375
Hardware sales 149,714 149,714
Licensing, subscription,
hosting and support fees 2,260,188 2,260,188
3,341,277 3,341,277
---------- ------------
Period ended 30 April 2021
Educate Agency Services Total
GBP GBP GBP
Revenue by type:
Development and set up fees 1,536,748 296,158 1,832,906
Licensing, subscription, hosting
and support fees 479,635 99,891 579,526
---------- ---------------- ------------
2,016,383 396,049 2,412,432
---------- ---------------- ------------
Revenue in the six months to 30 April 2022 has been supported
by material contract wins for its STEM based learning resources.
Administrative expenses
11
Unaudited Unaudited
6 months 6 months
to 30 April to 30 April
2022 2021
GBP GBP
Salary and employee costs 1,904,284 1,015,325
Sales commissions 691,260 -
Depreciation 74,298 23,249
Legal, professional & regulatory
fees 553,365 313,369
Advertising and promotion 1,581,196 284,800
Other administration expenses 177,233 215,070
4,981,636 1,851,813
-------------- --------------
Sales commissions relate to commission payable on sales
of the Group's STEM-based learning resources. The increase
in advertising and promotional expenditure reflects the
incremental investment in campaign materials and production
costs to support the launch of the Launchmycareer.com platform
in India.
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