TIDMDSG
RNS Number : 3503C
Dillistone Group PLC
28 September 2018
This announcement replaces RNS number 2547C issued at 7.00am on
28 September 2018 to correct the Retained Earnings figure as at 30
June 2017.
28 September 2018
Dillistone Group Plc
("Dillistone", the "Company" or the "Group")
Interim Results
Dillistone Group Plc, the AIM quoted supplier of recruitment
software for the international recruitment industry through its
Dillistone Systems, Voyager Software and GatedTalent divisions, is
pleased to announce its unaudited interim results for the six
months ended 30 June 2018.
Key points of the results:
-- Order intake ahead of same period in 2017
-- Revenue of GBP4.4m (2017: GBP4.9m) reflecting previously
announced loss of client on legacy platform and exchange rate
movements
-- Recurring revenue of GBP3.6m (2017: GBP3.9m)
-- Recurring revenues represent 81% of total revenue
-- Both Dillistone Systems and Voyager Software divisions profitable
-- As expected GatedTalent division made a loss of GBP(0.315m) (2017: loss of GBP0.182m)
-- Cash generated from operating activities was GBP0.617m (2017: GBP1.064m)
-- Operating profit of GBP0.017m before acquisition related items (2017: GBP0.186m)
-- Cash balances of GBP1.065m at 30 June 2018 (30 June 2017: GBP1.114m)
-- September saw next stage of GatedTalent project launch successfully
-- GatedTalent membership growth in September ahead of previous best month
-- First "Enterprise" contract for GatedTalent access signed.
Commenting on the results and prospects, Mike Love,
Non-Executive Chairman, said:
"We are happy to report that both Dillistone Systems and Voyager
Software delivered a profit and that the Group made an operating
profit before acquisition related items, despite the significant
investment in GatedTalent.
"Voyager delivered an excellent order book in the first half and
enters the second half with a strong delivery pipeline. Dillistone
Systems also saw year on year growth in order intake during that
period and is additionally set to benefit from the next phase of
GatedTalent which, we believe, will impact positively on both
client retention and new business wins in the executive search
sector."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
Results Webinar - Jason Starr, Chief Executive, and Julie
Pomeroy, Finance Director, will be hosting a webinar to review the
results at 3.00pm on Thursday 11 October 2018. To register please
visit https://attendee.gotowebinar.com/register/119083000587990796
or contact Tom Cooper on tom.cooper@walbrookpr.com or 0797 122
1972.
Enquiries:
Dillistone Group
Plc
Mike Love Chairman Via Walbrook PR
Jason Starr Chief Executive
Julie Pomeroy Finance Director
WH Ireland Limited (Nominated
adviser)
Managing Director - Corporate
Chris Fielding Finance & COO CIB 020 7220 1650
Walbrook PR
Tom Cooper /
Paul Vann 020 7933 8780
0797 122 1972
tom.cooper@walbrookpr.com
Notes to Editors:
Dillistone Group Plc (www.dillistonegroup.com) is a leader in
the supply and support of software and services to the recruitment
industry. It has five brands operating through three divisions:
Dillistone Systems, which targets the executive search industry
(www.dillistone.com); Voyager Software, which targets other
recruitment markets (www.voyagersoftware.com); and GatedTalent, the
next generation executive recruitment platform
(www.GatedTalent.com).
Dillistone has made three acquisitions: Voyager Software in
September 2011, FCP Internet in July 2013 and ISV Software in
September 2014. The Group operates under the FileFinder, Infinity,
Evolve, ISV and GatedTalent brands.
Dillistone was admitted to AIM, a market operated by the London
Stock Exchange plc, in June 2006. The Group employs over 100 people
globally with offices in London (head office) Basingstoke and
Southampton, Frankfurt, New Jersey and Sydney.
Chairman's Statement
Most notably, this period has seen the Group, across all
divisions, focusing on delivering solutions to its clients to
enable them to meet the requirements of the General Data Protection
Regulations ("GDPR") which came into force in May 2018. GDPR has
had a significant impact on all suppliers in our space and we have
invested significant time and resources across our Group in
ensuring that our clients were able to stay compliant with these
new regulations. The divisions have also expended a significant
amount of time in educating clients on the ramifications of
GDPR.
GatedTalent was launched against this background and, after a
slow start, is now seeing accelerating growth in executive
registrations. Our clients have sent millions of messages through
the platform, and compliancy notes continue to flow through the
platform every working day. In addition, we are increasingly seeing
executives registering directly with the platform and as a result,
we are now seeing well over 1,000 new registrations on the platform
every week.
The membership base is exceptionally senior, with approximately
10% of its members being currently employed in a CEO role.
Furthermore, the database is highly diverse, with executives
registered from more than 100 nations, with the United States being
the largest single source of registrations.
The continuing growth of the membership pool meant that, in
September, GatedTalent was able to turn on the monetisation element
of the platform, although it will generate only minimal revenue in
2018. This is however a significant milestone for the division and
Group. As previously noted, the GatedTalent division expects to be
loss making in both 2018 and 2019.
Incoming orders have been strong in the 6 months to 30 June,
with both Voyager Software and Dillistone Systems reporting orders
ahead of the same period in 2017. As expected, the previously
announced loss of a major client and the impact of exchange rates
have had a negative impact on recurring revenues compared to the
same period in the previous year.
Revenue is down GBP0.446m (9%) to GBP4.450m of which GBP0.219m
related to the loss of the major client and GBP0.052m related to
the negative impact of exchange rate movement compared to the prior
year. Recurring revenues represented 81% of revenues (2017
restated: 81%). Loss after tax, acquisition related items, and the
loss in the GatedTalent division of GBP0.315m (2017: loss of
GBP0.182m), was GBP(0.173m) (2017 restated profit: GBP0.033m).
Divisional review
Dillistone Systems has seen orders in the 6 months to June 2018
ahead of that in the same period in 2017. We believe that the
accelerating growth of the GatedTalent membership will start to
support sales of the Dillistone FileFinder CRM platform as the year
progresses. FileFinder benefits from exclusive integration with
GatedTalent.
Dillistone Systems (www.dillistone.com) reported revenues of
GBP2.122m (2017 restated: GBP2.241m). Divisional profits are up to
GBP0.100m (2017 restated: GBP0.027m). The period saw a significant
amount of divisional resource diverted to work on initiatives
associated with our GatedTalent product - with resources associated
with sales and marketing, implementation, support and development
all being diverted from purely FileFinder related activities over
this period. This continued into the summer. Over the longer term,
the two divisions will have a symbiotic relationship - success in
one will lead to success in the other - but there is no question
that the diverted resource had an impact on the first half
performance of our Dillistone Systems division and has continued
throughout the summer period. We believe that, with the recent of
launch of the GatedTalent "Search and Connect" functionality, we
are now moving into a period where Dillistone Systems will begin to
benefit from this investment.
Voyager Software (www.voyagersoftware.com) reported revenues of
GBP2.314m (2017 restated: GBP2.655m) with recurring revenue down
12% to GBP1.791m due mainly to the loss of the major legacy
contract in February 2018 which accounts for GBP0.219m of the fall
in revenue. The Voyager division has enjoyed significant growth in
new orders in the first half of the year and will see the benefit
of this as the year develops. Divisional profits reduced by
GBP0.113m to GBP0.307m in the period, in part due to the contract
loss offset by cost saving measures.
Although GatedTalent generated its first revenues in the period
of GBP0.014m, revenues are expected to remain at a low level for
the remainder of 2018. In the period, it made a loss of GBP(0.315m)
(2017: loss of GBP0.182m). GatedTalent is expected to be loss
making in 2018 and 2019.
Financial Performance
Revenue in the six months ended 30 June 2018 decreased by 9% to
GBP4.450m (2017 restated: GBP4.896m). Recurring revenues decreased
by 8% to GBP3.626m over the comparable period last year (2017
restated: GBP3.943m) and represented 81% of total revenues (2017
restated: 81%). Non-recurring revenues were down at GBP0.601m (2017
restated: GBP0.708m). Revenue suffered slightly from the
strengthening in sterling; using 2017 rates revenue for the period
would have been GBP0.052m higher.
Cost of sales reduced by GBP0.210m in H1 2018 in part due to the
direct costs relating to the lost contract and also due to
reallocation of certain IT costs to administration costs.
Administration expenses reduced by GBP0.021m in H1 2018, again in
part due to the lost contract and also through appropriate cost
savings. Excluding acquisition related items, depreciation and
amortisation increased 7% to GBP0.587m (2017: GBP0.551m).
Administrative costs also included GBP0.235m (2017: GBP0.189m)
relating to the amortisation of acquisition intangibles. The loss
for the period before taxation increased to GBP0.234m (2017
restated: loss GBP0.008m).
There is a tax credit for the period of GBP0.061m (2017: credit
GBP0.041m). The 2017 and 2018 tax credits have benefited from
claims in the UK for research and development tax credits
reflecting the continuing development of our products. In addition,
the full IFRS 15 adjustment became tax deductible on 1 January 2018
and has resulted in a deferred tax asset as at 1 January 2017 and
has been reflected in the 2017 and 2018 tax credit.
Cash generated from operating activities was GBP0.617m (2017:
GBP1.064m). Total cash flow in the 6 months ended 30 June 2018
showed a net outflow of GBP0.318m (2017: outflow GBP0.434m). The
main elements of non-operating expenditure related to investment in
new product development of GBP0.748m (2017: GBP0.595m) and deferred
consideration payments in respect of acquisitions of GBP0.146m
(2017: GBP0.220m). At 30 June 2018, we had cash reserves of
GBP1.065m (2017: GBP1.114m) and GBP0.400m in borrowings (2017:
GBP0.072m).
In view of the continuing investment in GatedTalent, the Board
has decided not to pay an interim dividend. Future dividends will
depend on Group performance.
IFRS 15: Revenue from Contracts with Customers
IFRS 15 came into force on 1 January 2018. The impact on the
Group in 2018 is set out in note 5. Prior year periods have been
restated to reflect the impact of IFRS 15.
Strategy
The Group continues to believe that GatedTalent has the
potential to be transformational for the Group, taking it from a
supplier of CRM solutions in a crowded market to potentially being
the custodian of one of the World's largest private pools of
executive drafted biographical information. If successful, this new
platform has the potential to be highly profitable in its own
right, whilst also delivering a very significant competitive
advantage to other Group products.
Outlook
The Group continues to invest across its full range of products
to ensure that they remain relevant for the changing market place
and retain the confidence of our client base. The Group currently
expects that the full year profit before tax and acquisition
related items will be in line with market expectations. The Group
continues to have a strong balance sheet.
Dr Mike Love
Non-Executive Chairman
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Note 6 Months ended 30 June Year ended
31 Dec
2018 2017 2017
Unaudited Unaudited Unaudited
(restated) (restated)
GBP'000 GBP'000 GBP'000
Revenue 4 4,450 4,896 9,732
Cost of sales (572) (782) (1,536)
----------- ------------ -------------
Gross profit 3,878 4,114 8,196
Administrative expenses (4,096) (4,117) (8,560)
----------- ------------ -------------
Result from operating activities 4 (218) (3) (364)
Analysed as:
Result from operating activities
before acquisition related
items 17 186 459
Acquisition related items 6 (235) (189) (823)
----------- ------------ -------------
Result after acquisition related
items (218) (3) (364)
----------------------------------------- ----------- ------------ -------------
Financial income - 1 1
Financial cost (16) (6) (12)
----------- ------------ -------------
(Loss) before tax (234) (8) (375)
Tax income 7 61 41 432
----------- ------------ -------------
(Loss) /profit for the period (173) 33 57
Other comprehensive income net of tax:
Currency translation differences (3) (7) (24)
----------- ------------ -------------
Total comprehensive income
for period net of tax (176) 26 33
----------- ------------ -------------
Earnings per share (pence)
Basic 9 (0.88) 0.16 0.29
Diluted (0.88) 0.16 0.29
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at
As at 30 June 31 Dec
2018 2017 2017
Unaudited Unaudited Unaudited
(Restated) (Restated)
ASSETS GBP'000 GBP'000 GBP'000
Non-current assets
Goodwill 3,415 3,415 3,415
Intangible assets 4,728 5,087 4,881
Property plant & equipment 279 289 164
---------- ------------
8,422 8,791 8,460
Current assets
Inventories 3 4 3
Trade and other receivables 1,883 2,317 1,677
Cash and cash equivalents 1,065 1,114 1,390
---------- ------------ -------------
2,951 3,435 3,070
---------- ------------ -------------
Total assets 11,373 12,226 11,530
---------- ------------ -------------
EQUITY AND LIABILITIES
Equity
Share capital 983 983 983
Share premium 1,631 1,631 1,631
Merger reserve 365 365 365
Convertible loan reserve 14 - 14
Retained earnings 1,872 2,017 2,045
Share option reserve 99 86 101
Translation reserve 90 110 93
---------- ------------ -------------
Total equity 5,054 5,192 5,232
Liabilities
Non current liabilities
Trade and other payables 732 866 794
Borrowings 388 - 386
Deferred tax 543 544 508
Current liabilities
Trade and other payables 4,886 5,372 4,775
Borrowings 13 72 5
Current tax (receivable)/payable (243) 180 (170)
---------- ------------ -------------
Total liabilities 6,319 7,034 6,298
Total liabilities and
equity 11,373 12,226 11,530
---------- ------------ -------------
The interim report was approved by the Board of directors and
authorised for issue on 27 September 2018. They were signed on its
behalf by:
JS Starr J P Pomeroy
CONSOLIDATED STATEMENT OF CASH FLOWS
As at
As at 30 June 31 Dec
2018 2017 2017
Unaudited Unaudited Unaudited
(Restated) (Restated)
GBP'000 GBP'000 GBP'000
Operating Activities
(Loss) before tax (234) (8) (375)
Adjustment for
Financial income - (1) (1)
Financial cost 16 6 12
Depreciation and amortisation 822 741 1,938
Share option (gain)/expense (2) 1 20
Other including foreign exchange
adjustments arising from operations 4 (4) (12)
---------- ------------- -------------
Operating cash flows before movements
in working capital 606 735 1,582
(Decrease)/increase in receivables (219) (55) 573
Decrease in inventories 1 1 2
Increase/(decrease) in payables 206 389 (273)
Add taxation (paid)/repaid 23 (6) (12)
Net cash generated from operating
activities 617 1,064 1,872
---------- ------------- -------------
Investing Activities
Interest received - 1 1
Purchases of property plant and
equipment (36) (45) (55)
Investment in development costs (748) (595) (1,439)
Contingent consideration paid (146) (220) (219)
---------- ------------- -------------
Net cash used in investing activities (930) (859) (1,712)
---------- ------------- -------------
Financing Activities
Finance cost (5) (2) (7)
Net proceeds from convertible
loan note - - 400
Bank loan repayments made - (86) (158)
Dividends paid - (551) (551)
---------- ------------- -------------
Net cash used by financing activities (5) (639) (316)
---------- ------------- -------------
Net change in cash and cash equivalents (318) (434) (156)
Cash and cash equivalents at beginning
of the period 1,390 1,537 1,537
Effect of foreign exchange rate
changes (7) 11 9
Cash and cash equivalents at end
of period 1,065 1,114 1,390
---------- ------------- -------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Merger Retained Convertible Share Foreign Total
capital premium Reserve earnings loan reserve option exchange
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 31
December 2017 983 1,631 365 3,107 14 101 93 6,294
Prior year
adjustment
IFRS 15 (see
Note 5) - (1,062) - (1,062)
Balance at 1
January 2018
(restated) 983 1,631 365 2,045 14 101 93 5,232
Comprehensive
income
Loss for the
6 months
ended
30 June 2018 - - - (173) - - (173)
Other -
comprehensive
income
Exchange
differences
on
translation
of overseas
operations - - - - - (3) (3)
Total
comprehensive
income - - - (173) - - (3) (176)
-------------------- ------------------ -------------------- ------------------ --------------------------- --------------------- --------------------- ------------------
Transactions
with owners
Share option
charge - - - - (2) - (2)
Balance at 30
June 2018 983 1,631 365 1,872 14 99 90 5,054
-------------------- ------------------ -------------------- ------------------ --------------------------- --------------------- --------------------- ------------------
Balance at 31
December 2016 983 1,631 365 3,725 - 85 117 6,906
Prior year
adjustment
IFRS 15 (see
Note 5) - (1,190) (1,190)
Balance at 1
January 2017
(restated) 983 1,631 365 2,535 - 85 117 5,716
Comprehensive
income
Profit for the
6 months
ended
30 June 2017
(Restated) - - - 33 - - 33
Other -
comprehensive
income
Exchange
differences
on
translation
of overseas
operations - - - - - (7) (7)
Total
comprehensive
income - - - 33 - - (7) 26
-------------------- ------------------ -------------------- ------------------ --------------------------- --------------------- --------------------- ------------------
Transactions
with owners
Share option
charge - - - - 1 - 1
Dividends paid - - - (551) - - (551)
Balance at 30
June 2017 983 1,631 365 2,017 - 86 110 5,192
-------------------- ------------------ -------------------- ------------------ --------------------------- --------------------- --------------------- ------------------
NOTES TO THE INTERIM
NOTES TO THE UNAUDITED INTERIM REPORT
CONSOLIDATED STATEMENT OF
1. Basis of Preparation
The financial information for the six months ended 30 June 2018
included in this condensed interim report comprises the
consolidated statement of comprehensive income, the consolidated
statement of financial position, the consolidated statement of cash
flows, the consolidated statement of changes in equity and the
related notes.
The financial information in these interim results is that of
the holding company and all of its subsidiaries (the Group). It has
been prepared in accordance with the recognition and measurement
requirements of International Financial Reporting Standards as
adopted for use in the EU (IFRSs) but does not include all of the
disclosures that would be required under IFRSs. The accounting
policies applied by the Group in this financial information are the
same as those applied by the Group in its financial statements for
the year ended 31 December 2017 and are those which will form the
basis of the 2018 financial statements other than IFRS 15 which
came into force on 1 January 2018 and has been adopted in full
using the retrospective method.
The comparative financial information presented herein for the
year ended 31 December 2017 does not constitute full statutory
accounts for that period. The Group's annual report and accounts
for the year ended 31 December 2017 have been delivered to the
Registrar of Companies. The Group's independent auditor's report on
those statutory accounts was unqualified, did not draw attention to
any matters by way of emphasis, and did not contain a statement
under 498(2) or 498(3) of the Companies Act 2006.
In preparing the interim financial statements the directors have
considered the Group's financial projections, borrowing facilities
and other relevant financial matters, and the board is satisfied
that there is a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable
future. For this reason, the directors continue to adopt the going
concern basis in preparing the financial statements.
Dillistone Group Plc is the Group's ultimate parent company. It
is a public listed company and is domiciled in the United Kingdom.
The address of its registered office and principal place of
business is 50 Leman St, London, E1 8HQ. Dillistone Group Plc's
shares are listed on the Alternative Investment Market (AIM).
2. Share Based Payments
The Company operates two share option schemes. The fair value of
the options granted under these schemes is recognised as an
employee expense with a corresponding increase in equity. The fair
value is measured at grant date and spread over the period at the
end of which the option holder may exercise the option. The fair
value of the options granted is measured using the Black-Scholes
model.
3. Reconciliation of adjusted operating profits to consolidated
statement of comprehensive income
30 June 2018 and 30 June 2017
Adjusted Acquisition Adjusted Acquisition
operating related operating related
profits items profits items
30 June 30 June 30 June 30 June
2018 2018* 2018 2017 2017* 2017
(restated) (restated)
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 4,450 - 4,450 4,896 - 4,896
Cost of sales (572) - (572) (782) - (782)
Gross profit 3,878 - 3,878 4,114 - 4,114
Administrative expenses (3,861) (235) (4,096) (3,928) (189) (4,117)
Results from operating
activities 17 (235) (218) 186 (189) (3)
Financial income - - - 1 - 1
Financial cost (16) - (16) (2) (4) (6)
Profit/(loss) before
tax 1 (235) (234) 185 (193) (8)
Tax expense/(income) 16 45 61 7 34 41
Profit/(loss) for
the year 17 (190) (173) 192 (159) 33
Other comprehensive
income net of tax:
Currency translation
differences (3) - (3) (7) - (7)
Total comprehensive
income for the year
net of tax 14 (190) (176) 185 (159) 26
----------- ------------ --------- ------------ ------------ ------------
Earnings per share - from continuing activities
Basic 0.09p (0.88)p 0.97p 0.16p
Diluted 0.09p (0.88)p 0.97p 0.16p
* see accounts note 6
31 December 2017
Adjusted Acquisition
operating related
profits items
31 December 2017* 31 December
(2017 2017
Restated) (restated)
GBP'000 GBP'000 GBP'000
Revenue 9,732 - 9,732
Cost of sales (1,536) - (1,536)
------------ ------------ ------------
Gross profit 8,196 - 8,196
Administrative expenses (7,737) (823) (8,560)
Results from operating activities 459 (823) (364)
Financial income 1 - 1
Financial cost (7) (5) (12)
Profit/(loss) before tax 453 (828) (375)
Tax income 281 151 432
Profit for the year 734 (677) 57
Other comprehensive income
net of tax:
Currency translation differences (24) - (24)
Total comprehensive income
for the year net of tax 710 (677) 33
============ ============ ==============
Earnings per share - from continuing activities
Basic 3.73p 0.29p
Diluted 3.73p 0.29p
* see accounts note 6
4. Segment reporting
Year ended
6 months ended 30 June 31 Dec
2018 2017 2017
GBP'000 GBP'000
GBP'000 (Restated) (Restated)
Revenue
Dillistone Systems 2,122 2,241 4,531
GatedTalent 14 - -
Voyager Software 2,314 2,655 5,201
Total revenue 4,450 4,896 9,732
----------------------- ------------------------ ------------
Results by division
Year ended
6 months ended 30 June 31 Dec
2018 2017 2017
GBP'000 GBP'000
GBP'000 (Restated) (Restated)
Results from operating activities
Dillistone Systems 100 27 172
GatedTalent (315) (182) (439)
Voyager Software 307 420 856
----------------------- ---------- --------------------------
92 265 589
Central (75) (79) (130)
Amortisation of acquisition
intangibles and other
items (235) (189) (823)
Result from operating
activities (218) (3) (364)
======================= ========== ==========================
Geographical segments
The following table provides an analysis of the Group's revenues
by geographical market.
Year ended
6 months ended 30 June 31 Dec
2018 2017 2017
GBP'000 GBP'000
GBP'000 (Restated) (Restated)
UK 3,189 3,506 6,931
Europe 518 467 1,034
US 562 714 1,352
Australia 181 209 415
4,450 4,896 9,732
======================= ============ ============
Business Segment
The following table provides an analysis of the Group's revenues
by products and services.
Year ended
6 months ended 30 June 31 Dec
2018 2017 2017
GBP'000 GBP'000
GBP'000 (Restated) (Restated)
Recurring 3,626 3,943 7,942
Non recurring 601 708 1,326
Third party revenues 223 245 464
4,450 4,896 9,732
======================= ============ ============
Recurring income includes all support services, software as
a service income (SaaS) and hosting income. Non-recurring income
includes sales of new licenses, and income derived from installing
those licenses including training, installation, and data translation.
Third party revenues arise from the sale of third party software.
5. IFRS 15 impact on 2017 results
The impact of adopting IFRS 15 on a fully retrospective basis
was to reduce net assets at 1 January 2017 by GBP1,372,000 as shown
in the Statement of Changes in Equity for the 6 months to 30 June
2017, and to reduce net assets at 30 June 2017 by GBP1,305,000. Net
profit for the 6 months to 30 June 2017 therefore increased by
GBP67,000 and for the 12 months to 31 December 2017 by GBP150,000.
A deferred tax asset of GBP182,000 has also been established at 1
January 2017. These adjustments have been reflected below.
Impact on the Consolidated Statement of Comprehensive income for
the 6 months ended 30 June 2017
As reported Effect As reported
previously under IFRS
15
(unaudited) (unaudited) (unaudited)
GBP'000 GBP'000 GBP'000
Revenue 4,829 67 4,896
Cost of sales (782) - (782)
------------ ------------ ------------
Gross profit 4,047 67 4,114
Administrative expenses (4,117) 0 (4,117)
------------ ------------ ------------
Result from operating activities (70) 67 (3)
Financial income 1 - 1
Financial cost (6) - (6)
------------ ------------ ------------
Loss before tax (75) 67 (8)
Tax income 51 (10) 41
------------ ------------ ------------
(Loss) /profit for the period (24) 57 33
------------ ------------ ------------
Impact on the Consolidated Statement of Comprehensive income for
the 12 months ended 31 December 2017
As reported Effect As reported
previously under IFRS
15
(audited) (unaudited) (unaudited)
GBP'000 GBP'000 GBP'000
Revenue 9,582 150 9,732
Cost of sales (1,536) - (1,536)
------------ ------------ ------------
Gross profit 8,046 150 8,196
Administrative expenses (8,560) - (8,560)
------------ ------------ ------------
Result from operating activities (514) 150 (364)
Financial income 1 - 1
Financial cost (12) - (12)
------------ ------------ ------------
Loss before tax (525) 150 (375)
Tax income 454 (22) 432
------------ ------------ ------------
(Loss) /profit for the period (71) 128 57
------------ ------------ ------------
5. IFRS 15 impact on 2017 results (continued)
Impact on Consolidated statement of financial position of IFRS
15 as at 30 June 2017
As reported Effect As reported
previously under IFRS
15
(unaudited) (unaudited) (unaudited)
GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets 8,791 - 8,791
Current assets 3,435 - 3,435
------------- ------------ -------------
Total assets 12,226 - 12,226
------------- ------------ -------------
EQUITY AND LIABILITIES
Equity
Share capital 983 - 983
Share premium 1,631 - 1,631
Merger reserve 365 - 365
Retained earnings 3,150 (1,133) 2,017
Share option reserve 86 - 86
Translation reserve 110 - 110
------------- ------------ -------------
Total equity 6,325 (1,133) 5,192
Liabilities
Non current liabilities
Trade and other payables - 866 866
Deferred tax 716 (172) 544
Current liabilities
Trade and other payables 4,933 439 5,372
Borrowings 72 - 72
Current tax (receivable)/payable 180 - 180
------------- ------------ -------------
Total liabilities 5,901 1,133 7,034
Total liabilities and equity 12,226 - 12,226
------------- ------------ -------------
5. IFRS 15 impact on 2017 results (continued)
Impact on Consolidated statement of financial position of IFRS
15 as at 31 December 2017
As reported Effect As reported
previously under IFRS
15
(audited) unaudited) (unaudited)
GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets 8,460 - 8,460
Current assets 3,070 - 3,070
------------- ----------- -------------
Total assets 11,530 - 11,530
------------- ----------- -------------
EQUITY AND LIABILITIES
Equity
Share capital 983 - 983
Share premium 1,631 - 1,631
Merger reserve 365 - 365
Convertible loan reserve 14 - 14
Retained earnings 3,107 (1,062) 2,045
Share option reserve 101 - 101
Translation reserve 93 - 93
------------- ----------- -------------
Total equity 6,294 (1,062) 5,232
Liabilities
Non current liabilities
Trade and other payables 12 782 794
Borrowings 386 - 386
Deferred tax 668 (160) 508
Current liabilities
Trade and other payables 4,335 440 4,775
Borrowings 5 - 5
Current tax (receivable)/payable (170) - (170)
------------- ----------- -------------
Total liabilities 5,236 1,062 6,298
Total liabilities and equity 11,530 - 11,530
------------- ----------- -------------
5. IFRS 15 impact on 2017 results (continued)
Impact on Consolidated statement of cash flows of IFRS 15 for
the six months ended 30 June 2017
As reported Effect As reported
previously under IFRS
15
(unaudited) (unaudited) (unaudited)
GBP'000 GBP'000 GBP'000
Operating activities
Loss before taxation (75) 67 (8)
Operating cash flows before
movements in working capital 668 67 735
Increase in receivables (55) - (55)
Decrease in inventories 1 - 1
Increase in payables 456 (67) 389
Taxation Paid (6) - (6)
Net Cash generated by operating
activities 1,064 - 1,064
------------- ------------ ------------
Impact on Consolidated statement of cash flows of IFRS 15 for
the six months ended 31 December 2017
As reported Effect As reported
previously under IFRS
15
(audited) (unaudited) (unaudited)
GBP'000 GBP'000 GBP'000
Operating activities
Loss before taxation (525) 150 (375)
Operating cash flows before
movements in working capital 1,432 150 1,582
Decrease in receivables 573 - 573
Decrease in inventories 2 - 2
Decrease in payables (123) (150) (273)
Taxation Paid (12) - (12)
Net Cash generated by operating
activities 1,872 - 1,872
------------- ------------ -------------
With respect to IFRS 15 implementation, the most significant
ways that Dillistone generates income from its customers are as
follows:
-- Software as a Service ('SaaS') subscriptions - the customer
pays a regular fixed amount for the right to access both software
and related support service. Revenue is currently recognised over
the life of the subscription, which is unchanged under IFRS 15;
-- Outright licences - the customer pays a one-off amount to
purchase a licence conferring a perpetual right to use a version of
the software. Currently, revenue is recognised at the point control
passes to the customer (i.e. 'live' date). Under IFRS 15, licences
sold with elective support contracts are separate performance
obligations and continue to be recognised at a point in time.
However, licences sold with mandatory support contracts consist of
one performance obligation, with revenue recognition matching the
support contract;
-- Product support - the customer pays a regular fixed amount
for the right to access technical support services and the right to
future software upgrades. Support subscriptions can be mandatory or
elective depending on the software version purchased. Performance
obligations under support contracts are satisfied over the
subscription life, thus revenue is recognised over time under IFRS
15, as it was previously;
-- Installation services - the customer pays a fee for the
software to be installed, with revenue currently recognised when
the installation is complete. This continues to be the case under
IFRS 15 for most installations, which are not complex and could be
completed by a third party. For complex installations, these
combine with the licence to form one performance obligation, and
revenue recognition consequently matches the licence recognition
criteria;
-- Training - the customer pays a fee to be trained in using the
software. Training revenue is recognised when delivered, as it is
not essential to using the software. However, for training that is
essential, training combines with the licence as one performance
obligation with revenue recognition following the licence revenue
recognition.
6. Acquisition related items
Year ended
6 months ended 30 June 31 Dec
2018 2017 2017
GBP'000 GBP'000 GBP'000
Estimated change in fair
value of contingent consideration - - (15)
Amortisation of acquisition
intangibles 235 189 379
Acceleration of amortisation
of acquisition intangibles - - 459*
235 189 823
Unwinding of discount on
contingent consideration - 4 5
Total 235 193 828
============ =========== ===========
*The decision to change the estimated useful life of certain
assets was made at the time of the preparation of the 2017 final
accounts. Accordingly, as the decision had not been made at the
time of the preparation of the interim accounts to June 2017, no
adjustment has been included.
7. Tax
Year ended
6 months ended 30 June 31 Dec
2018 2017 2017
GBP'000 GBP'000 GBP'000
(Restated) (Restated)
Current tax charge (96) 17 (100)
Prior year adjustment - current
tax - - (238)
Deferred tax charge/(release) 80 (24) 58
Prior year adjustment - deferred
tax - - (1)
Deferred tax re acquisition
intangibles (45) (34) (151)
Total (61) (41) (432)
========== ============= ===========
The tax charge is impacted by the higher rates of corporation
tax payable in the US and Australia offset by the R&D tax
credits available to both Dillistone Systems and Voyager Software
and GatedTalent Limited. Deferred tax has been provided at rates
between 19% and 14.5%.
8. Dividends
In view of its continuing investment in GatedTalent, the Board
has decided not to pay an interim dividend (2017: nil per
share).
9. Earnings per Share
Year ended
6 months ended 30 June 31 Dec
2018 2017 2017
(Restated) (Restated)
Basic earnings per share
(Loss)/ profit attributable
to ordinary shareholders GBP(173,000) GBP33,000 GBP57,000
Weighted average number of
shares 19,668,021 19,668,021 19,668,021
Basic (loss)/earnings per
share (pence) (0.88) 0.16 0.29
============= =========== ===========
Diluted earnings per share
(Loss)/ profit attributable GBP(173,000) GBP33,000 GBP57,000
to ordinary shareholders
Diluted weighted average number
of shares 19,668,021 19,668,021 19,676,018
Diluted (loss)/earning per
share (pence) (0.88) 0.16 0.29
============= =========== ===========
10. Related party transactions
The Company has a related party relationship with its
subsidiaries, its directors, and other employees of the Company
with management responsibility. There were no transactions with
these parties during the period outside the usual course of
business.
The Directors and certain key management participated in the
issue of convertible loan notes in 2017 which carry interest at
8.15% per annum payable quarterly in arrears.
There were no transactions with any other related parties.
11. Cautionary statement
This Interim Report has been prepared solely to provide
additional information to shareholders to assess the Company's
strategies and the potential for these strategies to succeed. The
Interim Report should not be relied on by any other party or for
any other purpose. The Interim Report contains certain
forward-looking statements with respect to the financial condition,
results of operations and businesses of the Company. These
statements are made in good faith based on the information
available to them up to the time of their approval of this report.
However, such statements should be treated with caution as they
involve risk and uncertainty because they relate to events and
depend upon circumstances that will occur in the future. There are
a number of factors that could cause actual results or developments
to differ materially from those expressed or implied by these
forward-looking statements. The continuing uncertainty in global
economic outlook inevitably increases the economic and business
risks to which the Company is exposed. Nothing in this announcement
should be construed as a profit forecast.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR PGUMGBUPRGUR
(END) Dow Jones Newswires
September 28, 2018 07:00 ET (11:00 GMT)
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