TIDMINSG
RNS Number : 1420X
Insig AI Plc
24 April 2023
The information contained within this announcement is deemed by
the Company to constitute inside information stipulated under the
Market Abuse Regulation (EU) No. 596/2014 as it forms part of UK
domestic law by virtue of the European Union (Withdrawal) Act 2018.
Upon the publication of this announcement via the Regulatory
Information Service , this inside information is now considered to
be in the public domain.
24 April 2023
Insig AI plc
("Insig AI" or the "Company")
Trading and operations update, and
Richard Bernstein appointment as Executive Chairman
Trading update
Group revenue (unaudited) for its financial year ended 31 March
2023 ("FY-23") is expected to be at least GBP2.0 million comprising
approximately GBP1.4m from the Group's legacy Sport In Schools
business and approximately GBP0.6 million from the Insig AI
business. This represents sales growth of around six per cent at
Sport In Schools and 60 per cent at the Insig AI business.
During the year, Sport in Schools invested GBP0.1 million in a
significant marketing campaign that later this month culminates
with Gareth Southgate providing a coaching session to pupils
coached by Sport in Schools. After this investment, which has been
expensed in full, it is expected that Sport in Schools will deliver
a modest operating profit.
Convertible loan facility
The Company has received the final GBP0.1 million tranche of
Richard Bernstein's GBP0.75 million convertible loan facility
agreement as announced on 12 September 2022 ("the Loan Agreement.")
The previous tranches totalling GBP0.65 million were drawn down
between October 2022 and January 2023.
Cash at bank as at 31 March 2023 was c.GBP0.3 million.
Outlook for FY-24
Whilst it is very early in the Group's current financial year,
it has started positively. We have recently been awarded a
financial database assignment from a new client, as well as an
annual licencing agreement for our ESG data from another new client
asset manager.
We are forecasting further sales growth for the Insig AI
business, with revenue of not less than GBP1.4 million in FY-24.
This is expected to come from follow-on contracts from existing
clients, additional new client wins and recurring revenues from
strategic partnerships. We have also recently been tasked by a
client to deliver a high-volume Cloud based automated solution for
client settlements. In addition, we are optimistic of building
substantial and sustainable revenues following the
commercialisation of AB CarVal's ESG Scoring Tools.
Furthermore, we are having encouraging discussions, including
proof of concepts, where our ESG Disclosure tool and underpinning
ESG disclosure database can be used to undertake ESG risk
assurance, which is becoming an increasingly important part of the
corporate audit process.
The board remains of the view that subject to some further
business wins, the Group should achieve operational profitability
in its Q2 (ending 30 September 2023). The board remains optimistic
that it will achieve operating profitability in FY-24.
With recent world events, investment markets are recalibrating
how ESG categorisation for investment funds should be treated.
Regardless, we are confident that our ESG Disclosure tools will be
used in the future to help investors and regulators identify
possible greenwashing in corporate disclosures.
Data and technology collaboration with the Financial Conduct
Authority ("FCA")
Insig AI is proud to announce that it will be providing data and
software platform to the FCA's 2023 TechSprint, known as the Global
Financial Innovation Network's (GFIN) Greenwashing TechSprint. The
GFIN Greenwashing TechSprint will bring together 13 international
regulators and multiple participants in each jurisdiction,
including innovative tech firms and teams from large
consultancies.
The goal of the project is to develop a tool or solution that
can help regulators tackle or mitigate the risks of greenwashing in
financial services across the globe. The project will focus on how
technology, including AI and Machine Learning, can enable
regulators and supervisors to verify that ESG-related product
claims to retail consumers are accurate and complete and how
technology can help monitor, collate and identify examples of
greenwashing from financial services firms' websites, social media
platforms, and other documentation or data which can also be shared
across jurisdictions.
Insig AI will provide its data and technology platform for
onboarding of partners and participants of the GFIN Greenwashing
TechSprint. The core data set will be Insig AI's database of pdf
and machine-readable corporate financial and ESG documents for
approximately 4,000 companies, with entity mapping and
sentence-level classification against 15 ESG issues.
Participants will have access to Insig AI's technology via the
ESG Research Tool app, which combines machine learning, Natural
Language Processing and Elasticsearch capability for efficient
document interrogation and comparison across the database of
reports. Insig AI will facilitate the collection, tagging and
addition of new corporate documents into the database if required
by participants.
Further details are contained in Insig AI's RNS announcement
"Insig AI Data and Technology Collaboration with the FCA" released
at 07.01 a.m. on 24 April 2023.
Successful equity funding
The Company is pleased to announce that it has completed an
equity subscription raising GBP0.9 million at 17p per share, being
the closing price on 20 April 2023. GBP0.45 million of these funds
are from a new institutional investor. Insig AI Chairman, Richard
Bernstein, also subscribed for GBP0.15 million. It is intended that
funds will be utilised to invest in sales and marketing as well as
for working capital purposes. Given the board's expectations for
revenues and profitability, it is expected that save for potential
strategic partnership or corporate opportunities, the Group will
not need to raise any further equity for working capital purposes
in the short to medium term.
The newly subscribed for shares will be issued from Treasury,
from shares gifted to the Company in December 2022 by founders
Steve Cracknell and Warren Pearson, Chief Product Officer and Chief
Technology Officer. One-third of these shares will be issued
immediately with the balance being issued on 23 June 2023.
Further details are contained in Insig AI's RNS announcement
"Equity subscription" released at 07.02 a.m. on 24 April 2023.
CarVal partnership
In February 2022, the Company announced a landmark agreement
with CarVal Investors, L.P. ("CarVal") to develop and launch a new
line of high yield ("HY") and investment grade ("IG") ESG scoring
tools to be used by CarVal to optimise HY and/or IG portfolios
based on ESG considerations. In April, these scoring tools were
successfully delivered. As previously stated, our share of fees is
based on CarVal's assets under management ("AUM") raised in
connection with these HY and/or IG focused investment pools and
that we anticipate that as CarVal secures mandates, our fees will
increase commensurably and continue for several years.
In July 2022, CarVal was acquired by Alliance Bernstein, which
we hope will provide further opportunities.
We are pleased to report that over the last nine months, we have
worked very closely with AB CarVal on refining the ESG scoring
tools. We believe that these tools are now ready for
commercialisation. As a result, in the coming months, we look
forward to being able to provide updates on our returns from this
investment.
Commenting, John Withrow, Principal, High Yield, AB CarVal said:
"I'm pleased with how Insig AI's team has worked steadfastly with
us over many months to deliver what we believe to be a
market-leading product."
Board composition
The Board is pleased to announce that Richard Bernstein,
currently non-Executive Insig AI Chairman, has agreed to become
Executive Chairman. This will be effective from 1 June 2023.
Investor Day
The Company will be hosting an investor meeting at 11.00 a.m. on
27 April 2023 at The City of London Club to demonstrate how
Generative AI is applied to its datasets.
Commenting, Colm McVeigh, Chief Executive said: "We have
previously spoken about the nascent nature of the ESG market.
However over time, we will see the exclusion of greenwashing being
rigorously policed by regulators and financial products with
transparent ESG credentials. Insig AI will be extremely well placed
from our judicious investments, ahead of the market yielding
significant results. I am also mindful that in a bear market for
asset managers, it is all too easy for many to defer investment.
However, for those who see that now is the right time to apply
advanced technologies to underpin a step change in their business
to identify market trading opportunities, reduce risk and to better
protect their investors, we know how our team can deliver positive,
high impact benefits for our customers."
We are using our machine learning and data science optimisation
capabilities to drive better performance outcomes, reducing risk
and improved decision making. Through partnerships, we intend to
significantly broaden our user base and translate this into
increasing revenues and profits. I am also pleased that this
successful equity investment will enable us to direct additional
resources into increasing our pipeline of sales opportunities. I am
also delighted with our collaboration with the FCA."
For further information, please visit www.insg.ai or
contact:
Insig AI plc
Richard Bernstein (chairman) richard.bernstein@insg.ai
Colm McVeigh (CEO) colin.mcveigh@insg.ai
Zeus (Nominated Adviser & Broker)
David Foreman / James Hornigold /
Danny Philips +44 (0)20 3829 5000
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