TIDMACC
RNS Number : 7671L
Access Intelligence PLC
30 April 2015
FOR RELEASE
7.00AM
30 April 2015
ACCESS INTELLIGENCE PLC
("Access Intelligence" or "the Company" or "the Group")
PRELIMINARY RESULTS FOR THE YEAR ENDED 30 NOVEMBER 2014
Access Intelligence Plc (AIM: ACC), a leading supplier of
Software-as-a-Service (SaaS) solutions for the full life cycle
management of a company's governance, risk and compliance,
announces its unaudited results for the year ended 30 November
2014.
Highlights
-- Turnover increased 2% to GBP8,546,000 (2013: GBP8,388,000)
-- Contracted not yet invoiced revenue up 3% to GBP6,790,000 (2013: GBP6,623,000)
-- Recurring revenue up 8% to GBP6,595,000 (2013: GBP6,062,000) at 77% of sales (2013: 72%)
-- EBITDA down 3% to GBP426,000 (2013: GBP437,000)
-- Loss after tax was GBP1,082,000 (2013: loss GBP2,612,000)
-- Loss per share was 0.46p (2013: loss 1.11p)
-- Cash balance of GBP1,144,000 (2013: GBP1,521,000)
-- Total technology spend of GBP3,940,000 (2013: GBP4,151,000)
of which GBP1,573,000 (2013: GBP1,686,000) was capitalised
Michael Jackson, Executive Chairman, commented:
"This year we have continued to invest in the strategic
development of the Company's new software products which are due
for gradual customer implementation in the latter part of the first
half year of 2015. During the year the Company has continued to
sign new SaaS contracts which is reflected in a 3% increase in
revenues contracted not yet invoiced".
Our strategy continues to be to provide products which both new
and existing customers can use as part of a combined suite of
products allowing operational synergies and interoperability.
For further information:
Access Intelligence plc
Michael Jackson (Chairman) 0843 659 29 40
Joanna Arnold (COO) 0843 659 29 40
Kole Dhoot (CFO) 0843 659 29 40
Sanlam Securities UK Limited (Nominated Adviser &
Broker)
Simon Clements/David Worlidge 020 7628 2200
Notes to Editors:
Access Intelligence plc. has a portfolio of
Software-as-a-Service ("SaaS") brands delivering Governance, Risk
and Compliance solutions to the public and private sector. The
board is headed by Michael Jackson as Executive Chairman, Joanna
Arnold as COO and Kole Dhoot as CFO.
Forward looking statements
This announcement contains forward-looking statements.
These statements appear in a number of places in this
announcement and include statements regarding our intentions,
beliefs or current expectations concerning, among other things, our
results of operations, revenue, financial condition, liquidity,
prospects, growth, strategies, new products, the level of product
launches and the markets in which we operate.
Readers are cautioned that any such forward-looking statements
are not guarantees of future performance and involve risks and
uncertainties, and that actual results may differ materially from
those in the forward-looking statements as a result of various
factors.
These factors include any adverse change in regulations,
unforeseen operational or technical problems, the nature of the
competition that we will encounter, wider economic conditions
including economic downturns and changes in financial and equity
markets. We undertake no obligation publicly to update or revise
any forward-looking statements, except as may be required by
law.
Chairman's Statement and Strategic Report
I am pleased to announce our results for the year ended 30
November 2014.
This year we have continued to invest in the strategic
development of the Company's new software products which are due
for gradual customer implementation in the latter part of the first
half year of 2015. During the year the Company has continued to
sign new SaaS contracts which is reflected in a 3% increase in
revenues contracted not yet invoiced.
Our strategy continues to be to provide products which both new
and existing customers can use as part of a combined suite of
products allowing operational synergies and interoperability.
Outlook
Organisations continue to recognise the fundamental importance
of using software, particularly those operating in both regulated
and non-regulated markets across the world, to provide the
necessary governance, risk and compliance data, combined with
insightful and responsive management information, which enables
them to reduce costs, improve performance and mitigate risks. The
core of our strategy remains, and will remain, to meet these
demands by using innovative and market- leading SaaS based
solutions.
We believe that during 2015 the Group will benefit from the
significant investment made in new product development in previous
years. This exceptional level of investment to redevelop our
integrated software platform will come to an end in 2015.
I would like to take this opportunity on behalf of the Board to
thank you for your continued support
of Access Intelligence.
Strategic Report
Results
Revenue was up by 2% to GBP8,546,000 (2013: GBP8,388,000).
Our continued commitment to the Software-as-a-Service business
model has enabled us to build long-term visibility of revenues and
in 2014 recurring revenues on continuing operations, at
GBP6,595,000 (2013: GBP6,062,000) accounted for 77% (2013: 72%) of
total revenues. Total revenue was however impacted by lower than
expected one-off consultancy revenue due to focus on delivering
internal development projects. Existing customers looking to
migrate to our new software products delayed one-off projects for
delivery on the new platform in 2015 and 2016.
At 30 November 2014, deferred revenue stood at GBP3,246,000
(2013: GBP2,714,000) reflecting the change in timing of raising
invoices to customers, while our contracted not yet invoiced
revenue grew 3% to GBP6,790,000 (2013: GBP6,623,000).
Operating loss was GBP819,000 (2013: loss GBP2,530,000). In
arriving at the operating loss we have charged GBP409,000 (2013:
GBP360,000) for the depreciation and amortisation, GBP798,000
non-cash impairment charges (2013: GBP2,607,000) and GBP36,000
(2013: GBP40,000) for share-based payments.
Earnings before interest, tax, depreciation and amortisation
(EBITDA) pre-impairment charges was down slightly to GBP426,000
(2013: GBP437,000).
As indicated last year, we have invested significantly in
developing our products. The Group engaged an average of 71 (2013:
77) technical staff who support both the existing product offering
as well as developing it. In 2014 GBP3,940,000 (2013: GBP4,151,000)
was spent across the group on research and development and other
technical expenditure. Our commitment to the future represents 46%
of revenue (2013: 49%). This will continue to reduce in 2015 and
2016.
2015 will see continued investment across the Company's brands
with the full benefits expected to come through towards the end of
the current financial year and into 2016.
Loss per share
The basic loss per share was 0.46p (2013: loss 1.11p).
Cash
Cash at the year end stood at GBP1,144,000 (2013: GBP1,521,000)
broadly in line with expectations and reflecting the ongoing impact
of R&D capitalisation.
Dividend
As a result of the significant investment the Company has made
in the strategic product innovation and sales development, the
directors propose not to pay a dividend for 2014.
OPERATIONS
Software as a Service
Business Performance Management
Whilst maintaining its presence in financial services,
AITrackRecord has gone through a pivotal year for research and
development in 2014. AITrackRecord was the first brand within
Access Intelligence to undergo a significant rewrite and forms the
basis of the Group's integration strategy to deliver an end-to-end
GRC product lifecycle. The new dynamic product offers customers an
unprecedented level of configurability, flexibility and
future-proofing, enabling them to realise ongoing ROI within the
backdrop of an ever-evolving regulatory environment.
During 2014, AITrackRecord partnered with a number of customers
and prospects to showcase these market-leading developments and
ensure it is well positioned for launch in early 2015. Revenues
were significantly impacted by a reduction in one-off consultancy
projects as customers delayed decision-making until migration to
the new platform.
e-Procurement and Supplier Risk Management
Customer retention remained high during the financial year,
however total contract value has declined on renewal due to public
sector budget cuts. Our presence in local authorities was further
consolidated with new customer wins. We also saw customer wins from
a wide cross section of the public sector and the NHS and Housing
sectors. The Due North professional services team was strengthened
returning their best ever year, seeing particular success in
offering a fully managed e-auction service.
In January 2014, Due North strengthened its management team by
appointing Malcolm McClen as Operations Director to take
accountability for ongoing operational management and Barry Mellor
joined as Strategic Account Director.
During 2014 customers began User Acceptance testing of our
redeveloped ProContract version 3. Customer feedback has been
positive, in particular the new look and feel and ease of use of
the system We also maintained our existing version 2 product by
releasing five updates during the course of the year. A new FMS
integration solution was also developed, allowing customers to link
ProContract to their finance systems to reduce time, control spend
and improve accuracy.
Stakeholder and Reputation Management
In the financial year, AIMediaComms enjoyed significant success
in both the public and private sectors. In all, AIMediaComms signed
a significant number of new SaaS contracts, with 28% of these
coming from the private sector, including a number of FTSE 100
companies from banking, utilities and telecoms. As in previous
years, pricing pressure within the public sector continues.
Within the financial year, AIMediaComms added two new services
to its portfolio of media and stakeholder engagement software. The
first of these was a new political monitoring service that delivers
real-time, targeted and accurate alerts on political, regulatory
and public administration issues. The second was an updated Online
Media Newsroom offering that has been deployed in a number of major
companies.
These new modules and the ongoing development of our core
platform, Vuelio, will help to ensure AIMediaComms maintains its
current competitive advantage in the industry, and delivers further
growth.
Business Continuity and Incident Management
AIControlPoint consolidated its position in 2014, and despite a
small number of customer losses, maintained its presence in Oil and
Gas. It also expanded its aviation client base to include a number
of international airports. It broadened its utilisation within
these key sectors from traditional crisis management to integration
with customers' daily operations, further validating its return on
investment.
During 2014, AIControlPoint's new Emergency Rota module was
embedded in multiple major oil companies, whilst its AINotify
module was enhanced to provide rich multilingual capabilities for
its international offering. A collaboration between AIControlPoint
and AIMediaComms resulted in the cross-sell of Vuelio into AICP's
Oil and Gas community, who will use the system to coordinate press
releases in the event of an incident affecting multiple
operator/service companies and the emergency services.
As part of Access Intelligence's wider strategic positioning,
development began at the end of 2014 to integrate AIControlPoint's
incident management capability into a centralised platform to
deliver an integrated Governance, Risk and Compliance
lifecycle.
Division in recovery
Training and Competence
AITalent's operating losses including one-off charges were
GBP146,000 (2013: GBP264,000). Losses are now reducing as a result
of the period of restructuring having now been substantially
completed.
AITalent has continued to focus on highly regulated and
high-risk industries, seeing modest growth in the financial
services market. The brand continues to maintain its presence in
the pharmaceutical market with its compliance for the FDA 21 CFR
Part 11 code. AITalent also represents a growth opportunity for
other brands in the group, especially AITrackRecord, where the two
propositions complement each other to offer powerful talent and
performance management functionality.
IT Support Services
Infrastructure (IaaS), Cloud and Data Security Management
Willow Starcom had another successful year and saw significant
wins under both the Willow Starcom and AICloud brands.
Further development of its cloud and hosted solutions business
and increased investment in both technology and people enabled the
Company to offer a wide range of On-Premise and Hosted Solutions
and to capitalise on the growing requirement for hybrid
infrastructure environments.
In addition to growing its traditional client base, Willow
Starcom has provided a Data Centre and Enterprise Grade platform
for Access Intelligence to develop and host its product portfolio
on.
Under the AICloud brand the solution enabled Access Intelligence
subsidiary companies to offer a complete Hosted SaaS Solution and
an increasing number of Access Intelligence clients utilised the
AICloud Solution either as a dedicated solution or as part of a
shared resource platform.
On 21 April 2015 Access Intelligence Plc disposed of 100% of the
issued share capital of Willow Starcom Ltd, being the IT support
services segment disclosed in note 4, for a net consideration
totalling GBP1,200,000.
Centralised Development Operations
2014 was a pivotal year for Access Intelligence as it completed
the first wave of product development for market testing. Customers
at Due North and AITrackRecord were engaged in significant alpha
and beta testing projects with positive feedback on the new
applications. The investment made by Access Intelligence in its
York-based software engineering Centre of Excellence was key,
compounding its strategy of migrating to a centralised Application
Lifecycle Management toolset integrated with excellent quality
management and customer delivery.
The first phase of the new software architecture was configured
to deliver a major pilot for a FTSE 100 customer subject to
comprehensive FCA regulation. Towards the end of 2014, expansion of
the platform into phase two began with the development of core
functionality for AIControlPoint and AITalent. This next phase will
provide Access Intelligence with an innovative, highly configurable
and resilient platform for the Enterprise Governance, Risk and
Compliance market.
2014 also saw the raising of Access Intelligence's profile to
Tier 1 supplier status with all of our major regulated customers.
This required additional investment in quality and information
security alongside comprehensive customer audits to demonstrate our
industry standard compliance.
Strategy and Market
The rising evidentiary burden in highly regulated industries
such as Oil and Gas, Pharmaceuticals and Financial Services is a
key driver for Enterprise GRC solutions. The focus on senior
accountability to drive good corporate governance, mitigate risk
and develop competitive advantage ensures that Access
Intelligence's solutions remain firmly on our customers' strategic
and operational agendas.
The speed of change and adoption of next regulations means that
customers demand an unprecedented level of configurability and
flexibility in their software investments. Access Intelligence's
innovative centralised platform will enable us to deliver a
seemingly tailor-made solution to a highly diverse customer base on
a single multi-tenanted architecture. This will significantly
reduce our time-to-market for new regulatory requirements as well
as empower customers to develop a significant level of autonomy in
administering their own unique environment within the AI
platform.
Software-as-a-Service based solutions continue to provide
companies with a high performing, resilient and value-driven
alternative to managing and maintaining software applications
within their own infrastructure. Access Intelligence has utilised
this software development and delivery method as a key component of
its strategy, providing not only significant benefits to customers,
but ensuring investors can benefit from increased innovation with a
shorter time to market, a stable base for revenue growth and a
long-term visibility of performance.
2015 promises to be an exciting year for Access Intelligence as
we complete the migration of our suite of niche GRC products onto
the centralised Enterprise GRC platform. Our focus over the coming
year will be continuing to grow our brand recognition within GRC
and realising the benefits of our integrated platform throughout
our commercial activities.
Directors and Staff
2014 has demonstrated that our core belief of building a Group
based on the expertise, experience and integrity of our
industry-leading team is delivering significant value. I would like
to thank all our staff for their hard work and commitment, which
has enabled us to recognise considerable progress during 2014 and
we expect to benefit from this in the coming years. As a Group we
have delivered advances, and I look forward to our continued
operational successes in 2015.
Consolidated Statement of Comprehensive Income
Year ended 30 November 2014
Note 2014 GBP'000 2013
GBP'000
Revenue 3 8,546 8,388
Cost of sales (2,368) (2,245)
---------------------------------------------- ----- ------------- ----------
Gross profit 6,178 6,143
Administrative expenses (6,163) (6,026)
Share-based payment (36) (40)
---------------------------------------------- ----- ------------- ----------
Operating profit/(loss) before impairment (21) 77
Impairment of intangibles (798) (2,607)
---------------------------------------------- ----- ------------- ----------
Operating loss 5 (819) (2,530)
Financial income 1 10
Financial expense (115) (119)
---------------------------------------------- ----- ------------- ----------
Loss before taxation (933) (2,639)
Taxation credit 6 (149) 27
---------------------------------------------- ----- ------------- ----------
Loss for the year attributable to the equity
holders of the parent company (1,082) (2,612)
Other comprehensive income - -
---------------------------------------------- ----- ------------- ----------
Total comprehensive income for the period
attributable to the owners of the parent
company (1,082) (2,612)
---------------------------------------------- ----- ------------- ----------
Earnings per share
Basic and diluted loss per share 7 (0.46)p (1.11)p
---------------------------------------------- ----- ------------- ----------
Consolidated Statement of Financial Position
At 30 November 2014
Note 2014 2013
GBP'000 GBP'000
----------------------------------------- ----- --------- ---------
Non-current assets
Property, plant and equipment 523 617
Intangible assets 8 8,406 7,807
Deferred tax assets 419 610
----------------------------------------- ----- --------- ---------
Total non-current assets 9,348 9,034
----------------------------------------- ----- --------- ---------
Current assets
Inventories 142 168
Trade and other receivables 2,613 2,023
Current tax receivables 237 337
Cash and cash equivalents 1,144 1,521
----------------------------------------- ----- --------- ---------
Total current assets 4,136 4,049
----------------------------------------- ----- --------- ---------
Total assets 13,484 13,083
----------------------------------------- ----- --------- ---------
Current liabilities
Trade and other payables 1,526 1,030
Accruals and deferred income 4,050 3,414
Interest bearing loans and borrowings 9 - 754
----------------------------------------- ----- --------- ---------
Total current liabilities 5,576 5,198
----------------------------------------- ----- --------- ---------
Non-current liabilities
Trade and other payables 60 -
Interest bearing loans and borrowings 9 1,301 507
Deferred tax liabilities 956 712
----------------------------------------- ----- --------- ---------
Total non-current liabilities 2,317 1,219
----------------------------------------- ----- --------- ---------
Total liabilities 7,893 6,417
----------------------------------------- ----- --------- ---------
Net assets 5,591 6,666
----------------------------------------- ----- --------- ---------
Equity
Share capital 1,324 1,324
Treasury shares (148) (148)
Share premium account 224 224
Capital redemption reserve 191 191
Share option reserve 338 331
Equity reserve 126 126
Retained earnings 3,536 4,618
----------------------------------------- ----- --------- ---------
Total equity attributable to the equity
holders of the parent company 5,591 6,666
----------------------------------------- ----- --------- ---------
Consolidated Statement of Changes in Equity
Year ended 30 November 2014
Share Capital Share
Share Treasury premium redemption option Equity Retained
capital shares account reserve reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- ---------- ----------- ---------- ------------- ---------- ---------- ----------- ----------
Group
At 1 December
2012 1,286 (148) - 191 284 126 7,346 9,085
Total
comprehensive
loss for the
year - - - - - - (2,612) (2,612)
Transactions
with owners
Shares issued
in year 38 - - - - - - 38
Share premium
on shares
issued
in year - - 224 - - - - 224
Share-based
payments -
current year - - - - 40 - - 40
Tax reversal
relating to
share-based
payment - - - - 7 - - 7
Dividends
recognised
as
distributions
to owners - - - - - - (116) (116)
----------------- ---------- ----------- ---------- ------------- ---------- ---------- ----------- ----------
At 30 November
2013 1,324 (148) 224 191 331 126 4,618 6,666
----------------- ---------- ----------- ---------- ------------- ---------- ---------- ----------- ----------
At 1 December
2013 1,324 (148) 224 191 331 126 4,618 6,666
Total
comprehensive
loss for the
year - - - - - - (1,082) (1,082)
Transactions
with owners
Share-based
payments -
current year - - - - 36 - - 36
Tax reversal
relating to
share-based
payment - - - - (29) - - (29)
At 30 November
2014 1,324 (148) 224 191 338 126 3,536 5,591
----------------- ---------- ----------- ---------- ------------- ---------- ---------- ----------- ----------
Consolidated Statement of Cash Flow
Year ended 30 November 2014
2014 2013
GBP'000 GBP'000
------------------------------------------------- --------- ---------
Loss for the year (1,082) (2,612)
Adjusted for:
Taxation 149 (27)
Depreciation and amortisation 409 360
Amortisation and impairment of intangible
assets 798 2,607
Share option charge 36 40
Interest income (1) (10)
Interest expense 115 119
Loss on disposal of property, plant and
equipment 2 2
------------------------------------------------- --------- ---------
Operating cash inflow before changes in
working capital 426 479
(Increase) in trade and other receivables (590) (116)
Decrease in inventories 26 23
Increase in trade and other payables 1,192 317
------------------------------------------------- --------- ---------
Net cash inflow from operations before taxation 1,054 703
Taxation received 356 45
------------------------------------------------- --------- ---------
Net cash inflow from operations 1,410 748
------------------------------------------------- --------- ---------
Cash flows from investing
Interest received 1 10
Acquisition of property, plant and equipment
and software licences (140) (389)
Cost of software development (1,573) (1,686)
------------------------------------------------- --------- ---------
Net cash outflow from investing (1,712) (2,065)
------------------------------------------------- --------- ---------
Cash flows from financing activities
Interest paid (75) (76)
Issue of shares and share option exercise
proceeds - 262
Repayment of borrowings - (4)
Payment of dividend - (116)
------------------------------------------------- --------- ---------
Net cash inflow/(outflow) from financing (75) 66
------------------------------------------------- --------- ---------
Net decrease in cash and cash equivalents (377) (1,251)
Opening cash and cash equivalents 1,521 2,772
------------------------------------------------- --------- ---------
Closing cash and cash equivalents 1,144 1,521
------------------------------------------------- --------- ---------
Notes to the financial statements
1. Basis of preparation
This announcement has been prepared in accordance with the
Company's accounting policies, which in turn are in accordance with
International Financial Reporting Standards ("IFRS") as adopted by
the European Union ("EU") applied in accordance with the provisions
of the Companies Act 2006. IFRS is subject to amendment and
interpretation by the International Accounting Standards Board
("IASB") and the IFRS Interpretations Committee and there is an
on-going process of review and endorsement by the European
Commission. The accounting policies comply with each IFRS that is
mandatory for accounting periods ended 30 November 2014.
The results are unaudited, however we do not expect there to be
any difference between the numbers presented and those within the
annual report.
The financial information set out above does not constitute the
Group's statutory accounts, but is derived from those accounts. The
statutory accounts for the year ended 30 November 2013 have been
delivered to the Registrar of Companies and those for 2014 will be
delivered following the Group's annual general meeting.
2. Basis of consolidation
The Group results comprise the financial statements of Access
Intelligence plc and its subsidiaries as at 30th November 2014.
They are presented in Sterling and all values are rounded to the
nearest thousand pounds (GBP'000).
3. Revenue
The Group's revenue is primarily derived from the rendering of
services with the value of sales of goods being not significant in
relation to total Group revenue.
The Group's revenue was split into the following
territories:
2014 2013
GBP'000 GBP'000
------------------- --------- ---------
United Kingdom 8,045 7,898
------------------- --------- ---------
European Union 202 186
------------------- --------- ---------
Rest of the world 299 304
------------------- --------- ---------
8,546 8,388
------------------- --------- ---------
All non-current assets are held in the United Kingdom as they
were in 2013. No customer represents 10% or more of revenue as was
the case in 2013.
4. Segment reporting
Segment information is presented in respect of the Group's
operating segments which are based upon the Group's management and
internal business reporting.
Inter-segment pricing is determined on an arm's length
basis.
Segment results, assets and liabilities include items directly
attributable to a segment as well as those that can be allocated on
a reasonable basis. Unallocated items comprise mainly head office
expenses.
Segment non-current asset additions show the amounts relating to
property, plant and equipment and intangible assets including
goodwill. All non-current assets are located in the UK.
Operating segments
The Group operating segments have been decided upon according to
their revenue model and product or service offering being the
information provided to the chief operating decision maker, the
executive Chairman. The software as a service segment derives its
revenues from software licence sales and support and training
revenues. The IT support services revenue derives from maintenance
and back-up services. The segments are:
-- Software as a service
-- IT support services
-- Division in recovery - AITalent Ltd
-- Head Office
The segment information for the year ended 30 November 2014 is
as follows:
2014 Software IT support AI Talent Head office Consolidation Total
as a services Ltd GBP'000 GBP'000 adjustment GBP'000
service GBP'000 GBP'000
GBP'000
------------------------------- --------- ----------- ------------- ------------ -------------- ---------
External revenue 5,539 2,288 719 - - 8,546
Internal revenue - 368 - - (368) -
------------------------------- --------- ----------- ------------- ------------ -------------- ---------
Operating profit/(loss) 1,504 303 (146) (1,672) (10) (21)
Impairments - (798) (798)
Finance income 1 - - - - 1
Finance costs - - - (115) - (115)
Taxation 109 (6) (37) (147) (68) (149)
Profit/(loss) after
taxation 1,614 297 (981) (1,934) (78) (1,082)
------------------------------- --------- ----------- ------------- ------------ -------------- ---------
Reportable segment
assets 11,635 2,101 406 9,996 (10,654) 13,484
------------------------------- --------- ----------- ------------- ------------ -------------- ---------
Reportable segment
liabilities 5,510 1,353 1,977 7,534 (8,481) 7,893
------------------------------- --------- ----------- ------------- ------------ -------------- ---------
Other information:
Additions to property,
plant and equipment 19 101 2 18 - 140
------------------------------- --------- ----------- ------------- ------------ -------------- ---------
Depreciation and amortisation 144 93 17 270 (115) 409
------------------------------- --------- ----------- ------------- ------------ -------------- ---------
The segment information for the year ended 30 November 2013, is
as follows:
2013 Software IT support AI Talent Head Consolidation Total
as a services Ltd GBP'000 office adjustment GBP'000
service GBP'000 GBP'000 GBP'000
GBP'000
------------------------------- --------- ----------- ------------- --------- -------------- ---------
External revenue 5,648 2,089 651 - - 8,388
Internal revenue - 294 - - (294) -
------------------------------- --------- ----------- ------------- --------- -------------- ---------
Operating profit/(loss) 1,596 178 (264) (1,369) (64) 77
Impairments (655) (1,952) (2,607)
Finance income 9 - - 1 - 10
Finance costs - - - (119) - (119)
Taxation (39) - 66 - - 27
Profit/(loss) after
taxation 911 178 (2,150) (1,487) (64) (2,612)
------------------------------- --------- ----------- ------------- --------- -------------- ---------
Reportable segment
assets 9,756 1,888 542 11,671 (10,774) 13,083
------------------------------- --------- ----------- ------------- --------- -------------- ---------
Reportable segment
liabilities 4,305 1,252 1,595 5,969 (6,704) 6,417
------------------------------- --------- ----------- ------------- --------- -------------- ---------
Other information:
Additions to property,
plant and equipment - 142 1 160 (7) 361
------------------------------- --------- ----------- ------------- --------- -------------- ---------
Depreciation and amortisation 115 99 6 83 57 360
------------------------------- --------- ----------- ------------- --------- -------------- ---------
5. Operating loss
Operating loss is stated after charging:
2014 2013
GBP'000 GBP'000
---------------------------------------------------- --------- ---------
Depreciation of property, plant and equipment 233 214
Amortisation of development costs 80 48
Amortisation of brand values 60 69
Amortisation of software licences 36 30
Loss on disposal of property, plant and
equipment 2 2
Impairment of intangibles 798 2,607
Exceptional costs (see below) - 139
Operating lease charges - land and buildings 420 433
Auditor's remuneration 54 55
Share based payments 36 40
Research and development and other technical
expenditure 2,363 2,465
(a further GBP1,573k (2013: GBP1,686k) was
capitalised)
Cost of inventories 514 422
(Release of)/increase in provision for receivables 19 (139)
---------------------------------------------------- --------- ---------
Exceptional costs in the year ended 30 November 2013 were
incurred as a result of restructuring, incurring non-recurring one
off termination of employment costs for staff and a director and
associated legal fees; residual costs of closure and relocation of
AITrackRecord Ltd's office to the York Development Centre and
non-recurring costs incurred in setting up the new head office in
London.
The exceptional costs are made up of the following:
2014 2013
GBP'000 GBP'000
------------------------------------------------ ---------- ---------
Compensation for loss of office - director - 4
Compensation and notice payments - all staff - 34
Recruitment and temporary staff fees - -
Legal costs incurred on compensation of loss
of office for a director - 10
Legal costs on the sale and purchase agreement
& onerous lease termination - 91
------------------------------------------------ ---------- ---------
- 139
----------------------------------------------------------- ---------
6. Taxation
2014 2013
GBP'000 GBP'000
--------------------------------------------------- --------- ---------
Current income taxes credit:
UK corporation tax credit for the year (237) (226)
Adjustment in respect of prior year (19) (136)
--------------------------------------------------- --------- ---------
Total current income tax credit (256) (362)
--------------------------------------------------- --------- ---------
Deferred tax
Impact of change in tax rate - (21)
De-recognition of deferred tax assets 363 -
Origination and reversal of temporary differences 42 356
--------------------------------------------------- --------- ---------
Total deferred tax 405 335
--------------------------------------------------- --------- ---------
Total tax credit 149 (27)
--------------------------------------------------- --------- ---------
As shown above the tax assessed on the loss on ordinary
activities for the year is higher than (2013: lower than) the
standard rate of corporation tax in the UK of 21.7% (2013:
23.3%).
The differences are explained as follows:
2014 2013
GBP'000 GBP'000
----------------------------------------------- ----------- ---------
Loss on ordinary activities before tax (933) (2,639)
----------------------------------------------- ----------- ---------
Loss on ordinary activities by effective rate
of tax of 21.7% (2013: 23.3%) (202) (616)
Expenses not deductible for tax purposes 142 34
Adjustment in respect of prior year (19) (136)
Write off deferred tax asset 363 -
Additional R&D claim CTA 2009 (135) 691
----------------------------------------------- ----------- ---------
Total tax expense/(credit) 149 (27)
----------------------------------------------- ----------- ---------
Factors that may affect future tax expenses:
The main rate of corporation tax was reduced to 21% from 1 April
2014 and is due to be further reduced by a further 1% from April
2015. All deferred tax assets and liabilities are assumed to cease
or be utilised at 20%.
7. Earnings per share
The calculation of earnings per share is based upon the loss
after taxation of GBP1,082,000 (2013: loss of GBP2,612,000) divided
by the weighted average number of ordinary shares in issue during
the year which was 233,560,576 (2013: 233,560,576).
In 2014 and 2013 potential ordinary shares from the share option
schemes and convertible loan notes have an anti- dilutive effect
due to the Group being in a loss position. This includes the
500,000 share options granted during 2014 and would also have
included the convertible loan notes issued after the reporting year
(refer note 27) if these convertible loan notes had been issued
before the end of the reporting period. As a result, dilutive loss
per share is disclosed as the same value as basic loss per
share.
This has been computed as follows:
2014 2013
--------------------------- ------------------------------------ --------------------------------------
Loss Weighted Loss Loss Weighted Loss
after average per after average per share
tax no of shares share tax no of shares (pence)
GBP'000 (pence) GBP'000
--------------------------- --------- -------------- --------- --------- -------------- -----------
Loss attributable
to ordinary shareholders (1,082) 235,110,347 (0.46) (2,612) 235,110,347 (1.11)
--------------------------- --------- -------------- --------- --------- -------------- -----------
Dilutive effect of n/a n/a n/a n/a n/a n/a
options
--------------------------- --------- -------------- --------- --------- -------------- -----------
Dilutive effect of n/a n/a n/a n/a n/a n/a
loan note conversion
--------------------------- --------- -------------- --------- --------- -------------- -----------
Diluted loss per
share for the year (1,082) 235,110,347 (0.46) (2,612) 235,110,347 (1.11)
--------------------------- --------- -------------- --------- --------- -------------- -----------
On 21 September 2011 29,666,667 shares were returned to the
Company and were held in Treasury at the year end. Once in treasury
they were removed from the earnings per share calculation.
The total number of options and warrants granted at 30 November
2014 of 38,436,281 (2013: 39,396,281) would generate GBP1,176,190
(2013: GBP1,198,188) in cash if exercised. At 30 November 2014,
34,936,281 (2013: 10,596,281) were priced above the mid-market
closing price of 2.31p per share (2013: 2.75p) per share and
3,500,000 (2013: 28,800,000) were below.
At the 30 November 2014 6,947,387 (2013: 7,407,387) staff
options were eligible for exercising at an average price of 4.2p
(2013: 4.3p). Also eligible for exercising are the 21,300,000
warrants priced at 2.75p per share held by M Jackson, D Lowe and
Elderstreet VCT plc consequent to their investment in October
2008.
All of the outstanding loan notes, GBP750,000 in favour of
Unicorn AIM VCT plc and GBP500,000 in favour of Elderstreet VCT
will be redeemed at par or convert to a total of 31,250,000 shares
on 31 December 2015.
8. Intangible fixed assets
Brand Goodwill Development Software Total
value GBP'000 costs licences GBP'000
GBP'000 GBP'000 GBP'000
---------------------- --------- --------- ------------ ---------- ---------
Cost
At 1 December 2012 1,369 12,005 1,433 132 14,939
Capitalised during
the year - - 1,686 28 1,714
---------------------- --------- --------- ------------ ---------- ---------
At 30 November 2013 1,369 12,005 3,119 160 16,653
---------------------- --------- --------- ------------ ---------- ---------
At 1 December 2013 1,369 12,005 3,119 160 16,653
Capitalised during
the year - - 1,573 - 1,573
---------------------- --------- --------- ------------ ---------- ---------
At 30 November 2014 1,369 12,005 4,692 160 18,226
---------------------- --------- --------- ------------ ---------- ---------
Amortisation and
impairment
At 1 December 2012 136 5,550 390 17 6,093
Amortisation in year 68 - 48 30 146
Impairment in year 145 2,428 34 - 2,607
---------------------- --------- --------- ------------ ---------- ---------
At 30 November 2013 349 7,978 472 47 8,846
At 1 December 2013 349 7,978 472 47 8,846
Amortisation in year 60 - 80 36 176
Impairment in year - 798 - - 798
---------------------- --------- --------- ------------ ---------- ---------
At 30 November 2014 409 8,776 552 83 9,820
---------------------- --------- --------- ------------ ---------- ---------
Net Book Value
At 30 November 2014 960 3,229 4,140 77 8,406
---------------------- --------- --------- ------------ ---------- ---------
At 30 November 2013 1,020 4,027 2,647 113 7,807
---------------------- --------- --------- ------------ ---------- ---------
For the purpose of impairment testing, goodwill is allocated by
entity, which represent the Group's CGUs and the lowest level
within the Group at which the goodwill is monitored.
The pre-impairment carrying amounts of goodwill and capitalised
development costs not yet available for use allocated to each CGU
are:
Pre-impairment
Capitalised Goodwill Total GBP'000
Development GBP'000
2014 Costs GBP'000
-------------------------------------------- --------------- --------- --------------
Software as a service:
Access Intelligence plc 30 89 119
Due North Ltd 2,433 1,033 3,466
Access Intelligence Media & Communications
Ltd 425 1,928 2,353
AITrackRecord Ltd 1,242 - 1,242
-------------------------------------------- --------------- --------- --------------
4,130 3,050 7,180
-------------------------------------------- --------------- --------- --------------
IT Support Services - Willow Starcom
Ltd - 800 800
Division in recovery - AI Talent
Ltd 44 2,605 2,649
-------------------------------------------- --------------- --------- --------------
4,174 6,455 10,629
-------------------------------------------- --------------- --------- --------------
The difference between the pre-impairment capitalised
development costs of GBP4,174,000 and the net book value of
GBP4,140,000 at 30 November 2014 is a GBP34,000 impairment charge
in the year ended 30 November 2013 pertaining to Due North
Limited.
The difference between the pre-impairment goodwill of
GBP6,455,000 and the net book value of GBP3,229,000 at 30 November
2014 is full impairment of goodwill on AITalent Limited (of which
the final GBP798,000 is recognised in the year ended 30 November
2014) and a GBP620,000 prior year impairment against goodwill on
Due North Limited.
Capitalised Goodwill Total GBP'000
Pre-impairment Development GBP'000
2013 Costs GBP'000
-------------------------------------------- --------------- --------- --------------
Software as a service:
Access Intelligence plc 7 89 96
Due North Ltd 1,674 1,033 2,707
Access Intelligence Media & Communications
Ltd 352 1,928 2,280
AITrackRecord Ltd 612 - 612
-------------------------------------------- --------------- --------- --------------
2,645 3,050 5,695
-------------------------------------------- --------------- --------- --------------
IT Support Services - Willow Starcom
Ltd - 800 800
Division in recovery - AI Talent
Ltd 36 2,605 2,641
-------------------------------------------- --------------- --------- --------------
2,681 6,455 9,136
-------------------------------------------- --------------- --------- --------------
At the balance sheet date, impairment tests were undertaken by
comparing the carrying values of goodwill, capitalised development
costs and other assets with the recoverable amount of the CGU to
which the goodwill, capitalised development costs and other assets
have been allocated. The recoverable amount of the CGU is based on
value-in- use calculations. These calculations use pre-tax cash
flow projections covering a five year period based on financial
budgets and forecasts as approved by the Board with a terminal
value for the IT Support Services and ten years based on financial
budgets and forecasts as approved by the Board for the SaaS
segments with no terminal value, except for goodwill impairment
assessment purposes.
The key assumptions used for value-in-use calculations are those
regarding revenue growth rates and discount rates over the forecast
period. Management estimate discount rates using pre-tax rates that
reflect the current market assessment of the time value of money
and the risks specific to the CGUs. Growth rates are based on past
experience, the anticipated impact of the CGUs significant
investment in research and development, and expectations of future
changes in the market. The value in use calculations use
information from approved budgets in the first three years,
followed by applying specific growth rates for which the key
assumptions, analysed by CGU are:
Access
Intelligence
Access Media & Willow
Intelligence Communications Starcom AI Track Record
plc Due North Ltd Ltd Ltd AI Talent Ltd Ltd
------------------- -------------- -------------- ------------------ --------- -------------- ------------------
Annual revenue
growth rate
(years 4 to 5) 10% 9% 7% 2% 11% 20%
------------------- -------------- -------------- ------------------ --------- -------------- ------------------
Annual revenue
growth rate
(years 6 to 10) 5% 5% 5% N/A 5% 5%
------------------- -------------- -------------- ------------------ --------- -------------- ------------------
The discount rate used for all companies was between 10% and
14%, depending on the risk profiles for each CGU and varying growth
rates to the cost base of each CGU have been applied commensurate
to deliver the revenue projected. The terminal growth rate used for
the purposes of goodwill impairment assessments was 2.5% except for
Willow Starcom which was 2%.
After review of the value-in-use of AI Talent Limited, the Board
considers that, although future profits are forecast, the recent
history of losses in that company and net cash outflows forecast in
the immediate future, mean that a provision should be recognised
representing the full residual brought forward carrying value of
goodwill, being GBP798,000.
Other impairments
Other intangible assets are tested for impairment if indicators
of an impairment exist. Such indicators include performance falling
short of expectation.
In 2013, development costs of GBP34,000 were impaired to take
account of a project that did not generate the expected revenues.
Additionally, the directors impaired the brand value of Cobent, the
former and no longer used name of AITalent Ltd. The impairment
charge arising was GBP145,000.
The directors considered that there were no further indicators
of impairment relating to the remaining intangible fixed assets at
30 November 2014.
9. Interest bearing loans and borrowings
2014 2013
GBP'000 GBP'000
------------------------ --------- ---------
Current
Convertible loan notes - 754
------------------------ --------- ---------
Non-current
Convertible loan notes 1,301 507
------------------------ --------- ---------
On 30th June 2009 GBP1,750,000 convertible loan notes were
issued. At 30 November 2013 and 30 November 2014, GBP1,250,000 of
these loan notes were in issue.
The original terms were that these loan notes were redeemable at
par or convertible to ordinary shares at 4p per ordinary share on
or before maturing 30th June 2014 and carried a coupon rate of 6%
per annum payable semi-annually until such time as they were repaid
or were converted in accordance with their terms. The holder of the
notes may convert all or part of the notes held by them into new
ordinary shares in the Company on delivery to the Company of a
conversion notice at 4p per share.
In November 2013, the Company agreed terms with Elderstreet VCT
(a company related to Chairman Michael Jackson) to extend the loans
for 18 months, such that they mature on 31 December 2015, with
enhanced interest at 8% during this extended period with conversion
rights unchanged at 4p per share. These notes are classified as
non-current at the year end.
In March 2014 the Company agreed the same terms as those agreed
with Elderstreet VCT, with the other incumbent note-holder, Unicorn
AIM VCT plc. These notes are redeemable at par or convertible to
ordinary shares at 4p per ordinary share on or before maturing on
31 December 2015 and carried a coupon rate of 6% until 30 June
2014, thereafter 8% per annum, payable semi-annually until such a
time as they are repaid or converted in accordance with their
terms. These notes are classified as non-current at the year
end.
No redemptions or conversions of the convertible loan stock
arose in the year ended 30 November 2014.
The net proceeds received from the issues of the convertible
loan notes have been split between the liability element and an
equity component, representing the fair value of the embedded
option to convert the liability into equity of the Company, as
follows:
2014 2013
GBP'000 GBP'000
--------------------------------------------- --------- ---------
Proceeds of issue of convertible loan notes 1,250 1,250
Equity component (126) (126)
Deferred taxation (49) (49)
--------------------------------------------- --------- ---------
Initial fair value of liability component 1,075 1,075
Cumulative interest charged 601 486
Cumulative interest paid (375) (300)
--------------------------------------------- --------- ---------
Liability component at 30 November 1,301 1,261
--------------------------------------------- --------- ---------
The equity component of GBP126,000 (2013: GBP126,000) has been
credited to equity reserve.The interest charged for the year is
calculated by applying an effective rate of interest of 9.8% (2013:
9.8%) to the liability component for the 12 month period. The
liability component is measured at amortised cost. The difference
between the carrying amount of the liability component at the date
of issue and the amount reported in the balance sheet at 30
November 2014 represents the effective interest rate less interest
paid to that date.
The movement on the convertible loan note liability is
summarised below:
2014 2013
GBP'000 GBP'000
------------------------------------ --------- ---------
Opening loan liability 1,261 1,217
Interest charged for the year 115 119
Interest paid in the year (75) (75)
------------------------------------ --------- ---------
Liability component at 30 November 1,301 1,261
------------------------------------ --------- ---------
10. Availability of Annual Report and AGM date
Copies of the Report and Accounts will be posted to shareholders
shortly where requested and will be available from the Company's
website (www.accessintelligence.com) from 30 April 2015. It is
intended that the annual general meeting will take place at the
Company's registered office, 10-11 Charterhouse Square, London,
EC1M 6EH, at 14.00pm on Thursday, 28 May 2015.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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