TIDMACC
RNS Number : 7849D
Access Intelligence PLC
02 May 2017
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the
publication of this announcement via a Regulatory Information
Service ("RIS"), this inside information is now considered to be in
the public domain.
2 May 2017
ACCESS INTELLIGENCE PLC
("Access Intelligence", "the Company" or "the Group")
FINAL RESULTS FOR THE YEARED 30 NOVEMBER 2016
Access Intelligence Plc (AIM: ACC), a leader in corporate
communications and reputation management software, announces its
final results for the year ended 30 November 2016.
Strategic Highlights:
-- Group now focused solely on corporate communications and
reputation management. Three non-core business divestments
completed, two before year end, one after.
-- Integration of June 2015 asset acquisition complete,
resulting in the migration of 1,192 profitable customers to the new
Vuelio platform.
-- Exited loss-making customer contracts acquired as part of the
acquisition before the migrations to protect gross margins.
-- Launch of the new Vuelio offering with a unique integrated
PR, public affairs and social engagement solution in the UK
market.
Financial highlights:
-- Recurring revenue from continuing operations increased by 39%
and total revenue from continuing operations increased by 43%,
reflecting the full year impact of the acquisition in June
2015.
-- Gross margin reduced to 69% excluding one-time expenses,
again reflecting the full year impact of the acquisition. The gross
margin reduction was minimised through exiting non-profitable
contracts during H2 2016 instead of migrating them to the Vuelio
platform, with the resulting revenue impact to flow through in the
2017 financial year.
-- Total development and technical expense in the Consolidated
Statement of Comprehensive Income relating to continuing operations
increased to GBP1,664,000 in FY16 from GBP650,000 in the prior year
as a result of investment in the Vuelio platform.
-- A further GBP522,000 of development expenditure relating to
continuing operations was capitalised in 2016 compared to
GBP417,000 in 2015.
-- Monthly operational spend excluding 3rd party content and
hosting, restructuring, and migration expense reduced from
GBP825,000 in Q4 2015 to GBP629,000 in Q4 2016, with further
forecast savings bringing it down to GBP517,000 by Q4 2017.
-- The Group had cash balances in excess of GBP1.1 million at the year end.
Michael Jackson, Non-Executive Chairman of Access Intelligence,
commented:
"Over the last twelve months, we have continued the realignment
of the Access Intelligence portfolio to position and support Vuelio
as its flagship brand, one poised to take advantage of big
opportunities in the communications management market. We have
effectively built a new Vuelio business, in part through the
integration of assets acquired in 2015, but also through an
accelerated programme of development and product upgrades for
longstanding Vuelio customers. Having completed the
all-encompassing migration project, the first four months of 2017
trading have seen improved new business sales and renewal rates and
we are confident that we have the makings of a good business."
For further information:
Access Intelligence Plc 0843 659 2940
Michael Jackson (Non-Executive Chairman)
Joanna Arnold (CEO)
Allenby Capital Limited
David Worlidge / James Thomas
020 3328 5656
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
I am pleased to announce our results for the year ended 30
November 2016.
Over the last twelve months, we have continued the realignment
of the Access Intelligence portfolio to position and support Vuelio
as its flagship brand, one poised to take advantage of big
opportunities in the communications management market. We have
effectively built a new Vuelio business, in part through the
integration of assets acquired from our competitor Cision in 2015,
but also with an accelerated programme of development and product
upgrades for longstanding Vuelio customers.
The integration centred on a large migration project bringing
more than a thousand customers - worth millions of pounds of
revenue - on to the Vuelio platform, in conjunction with
restructuring of both operational and commercial parts of the
business. This restructuring and refocusing on Vuelio included the
divestment of non-core subsidiary companies Due North Limited and
AITrackRecord Limited during the year, as well as AIControlPoint
Limited after the year end. At the same time, the development work,
essential for migration, has protected our existing business and
opened new opportunities. With costs associated with
reorganisations and migrations, it was always going to be a
challenging year, I'm pleased to say it has also been rewarding and
operationally successful.
Following this hard work of integration, our 2017 strategy is
largely one of consolidation providing a foundation for incremental
growth from 2018 onwards. We believe there are significant
short-term opportunities for Vuelio in the UK market: a number of
major competitors are still engaged in their own M&A activity;
at the same time, the unique mix of the Vuelio portfolio leads us
to believe that the business will benefit from recent political
upheaval and attendant growth in the market for integrated PR and
public affairs solutions. 2017 will also bring the launch of
mobile, networked communications services, the first outputs from
an innovative roadmap that we expect will secure sustainable growth
through 2018 and beyond.
2017 has started well with the completion of migrations of the
final and most complex customers onto our enhanced Vuelio platform.
Following the consolidation of the 1,192 migrated acquisition
customers with our existing PR and Communications customer base, we
expect to see a small increase in our contracted Software as a
Service (SaaS) customer base through 2017.
Revenue from continuing operations in March 2017 was GBP653,000
with gross margin of 66%, a reduction as a result of exiting
non-profitable customer contracts pre-migration to minimise gross
margin reduction. We have seen a significant improvement in new
business sales performance and retention rates in the first four
months of the current year and expect this to continue as our
enhanced product gains further traction in the market.
The full benefit of the restructuring undertaken during H2 2016
will not be seen until 2017, with monthly operational spend
excluding 3(rd) party content and hosting, restructuring, and
migration expense expected to reduce from GBP629,000 in Q4 2016 to
GBP517,000 by Q4 2017. This represents an annualised saving of
GBP1.3 million. After emerging from an all-encompassing period of
acquisition integration, we are confident that we have the makings
of a good business.
I would like to take this opportunity to thank you on behalf of
the board for your continued support of Access Intelligence.
Michael Jackson
Non-Executive Chairman
Strategic Report (Extract)
Results
2016 has been another year of transformation with the further
integration of the business assets acquired in June 2015. It has
included the build and launch of our new Vuelio platform, the
successful migration of 1,192 customers to this platform and the
divestment of two, non-core businesses.
Recurring revenues from continuing operations increased 39% to
GBP8,834,000 (2015: GBP6,366,000) including the full year
contribution from the business acquired in June 2015, with
recurring revenues constituting 92% of revenues (2015: 95%).
Gross margin from continuing operations declined to 56% (2015:
72%), primarily due to the full year impact of the acquired
business which runs at a lower margin than the other parts of the
business due to the cost associated with the provision of third
party data content to support monitoring and insights services in
the software platform. The gross margin also reflects GBP1,244,000
(2015: GBP332,000) of one-off costs associated with the
transitional hosting and migration of the 1,192 migrated customers
to our new Vuelio platform. The gross margin excluding these
one-time costs was 69% (2015: 77%).
The Group continued to undertake extensive restructuring during
the year, integrating the acquired business, divesting non-core
businesses in the second half of the year, and restructuring and
reducing costs in the remaining business. The full year benefit of
this second half activity is not fully reflected in the 2016
financial performance, however administrative expenses include
one-off redundancy and legal costs associated with this
restructuring of GBP285,000 (2015: GBP260,000).
As a result of the restructuring and refocusing of the business
during the year, earnings before interest, tax, depreciation and
amortisation (EBITDA) from continuing operations declined to a loss
of GBP2,027,000 (2015: loss GBP951,000 before impairment charges of
GBP30,000). Excluding the one-off expenses referenced above, EBITDA
from continuing operations was a loss of GBP498,000 (2015: loss of
GBP359,000).
Operating loss from continuing operations before impairments was
GBP3,042,000 (2015: loss GBP1,541,000). In arriving at the
operating loss the Group has incurred GBP1,664,000 (2015:
GBP650,000) in research and development expenditure and charged
GBP1,015,000 (2015: GBP590,000) for depreciation and amortisation,
GBPNil (2015: GBP153,000) in acquisition costs, GBPNil (2015:
GBP70,000) loss on disposal of fixed assets and GBP285,000 (2015:
GBP260,000) in restructuring costs.
The Group made a profit for the year from discontinued
operations of GBP1,511,000 (2015: loss of GBP1,934,000). Further
information relating to discontinued operations is provided on page
28 of the Strategic Report and within note 6 to the consolidated
financial statements.
2017 will see continued restructuring of the business and
investment in the Vuelio brand with the full benefits expected to
come through towards the end of the current financial year and into
2018.
Loss per share
The basic loss per share from continuing operations was 1.10p
(2015: loss 0.52p). Basic earnings per share from discontinued
operations was 0.48p (2015: loss 0.76p).
Cash
Cash at the year-end stood at GBP1,162,000 (2015: GBP1,523,000)
whilst net debt, calculated as loan notes less cash held, decreased
to GBP2,113,000 (2015: GBP2,593,000) during the year.
Dividend
As a result of the significant investment the Company has made
in the strategic product innovation and sales development, the
directors do not propose to pay a dividend for 2016 (2015:
GBPNil).
Disposal of non-core assets
During the year and after the reporting date, the Group has
continued to divest non-core subsidiary companies as part of its
strategy to focus on the Vuelio reputation and communications
management business.
Due North Limited
On 3 February 2016, Access Intelligence agreed terms to dispose
of 100% of the issued share capital of its subsidiary Due North
Limited, for a consideration totalling GBP4,500,000. Group profit
on disposal of Due North Limited was GBP1,664,000. Company profit
on disposal was GBP3,076,000.
AITrackRecord Limited
On 1 July 2016, Access Intelligence agreed terms to dispose of
100% of its subsidiary AITrackRecord Limited to TrackRecord
Holdings Limited, a newly formed company. Consideration comprised
20% of the share capital of TrackRecord Holdings Limited and a
deferred cash payment of GBP101,000. Group profit on disposal of
AITrackRecord Limited was GBP585,000. Company profit on disposal
was GBP632,000.
AIControlPoint
On 14 March 2017, Access Intelligence Plc transferred the trade
and assets of its division AIControlPoint to its subsidiary company
formed during the year, AIControlPoint Limited. On 16 March 2017,
Access Intelligence Plc disposed of 100% of the issued share
capital of AIControlPoint Limited for a consideration totalling
GBP782,000. Group profit on disposal of the subsidiary was
GBP588,000, Company profit on disposal was GBP639,000.
Consolidated Statement of Comprehensive Income
Year ended 30 November 2016
2016 2015 (restated)
Note GBP'000 GBP'000
Revenue 3 9,598 6,687
Cost of sales (4,241) (1,881)
Gross profit 5,357 4,806
Administrative expenses (8,295) (6,321)
Share of loss of associate (91) -
Share-based payment (13) (26)
Operating loss before impairment (3,042) (1,541)
Impairment of intangibles 11 - (30)
Operating loss (3,042) (1,571)
Financial income - 1
Financial expense (395) (266)
Loss before taxation (3,437) (1,836)
Taxation (charge)/credit 8 (37) 527
Loss for the year from continuing
operations (3,474) (1,309)
Profit/(loss) for the year
from discontinued operations 6 1,511 (1,934)
Loss for the year (1,963) (3,243)
Other comprehensive income - -
Total comprehensive income
for the period attributable
to the owners of the Parent
Company (1,963) (3,243)
Earnings per share
Note Continuing Continuing
Operations Operations
2015
2016 (restated)
Basic loss per share 10 (1.10)p (0.52)p
Diluted loss per share 10 (1.10)p (0.52)p
Continuing Continuing
and Discontinued and Discontinued
Operations Operations
2016 2015
GBP'000 GBP'000
Basic loss
per share 10 (0.62)p (1.28)p
Diluted loss
per share 10 (0.62)p (1.28)p
Consolidated Statement of Financial Position
At 30 November 2016
Note 2016 2015
GBP'000 GBP'000
Non-current assets
Property, plant and equipment 100 273
Intangible assets 11 7,062 7,423
Investments in associates 534 -
Deferred tax assets 230 865
Total non-current assets 7,926 8,561
Current assets
Trade and other receivables 2,565 3,628
Current tax receivables 436 101
Cash and cash equivalents 1,162 1,523
Assets classified as held for sale 7 381 3,869
Total current assets 4,544 9,121
Total assets 12,470 17,682
Current liabilities
Trade and other payables 1,301 1,225
Accruals 941 1,625
Provisions 27 130
Deferred revenue 3,772 4,643
Interest bearing loans and borrowings 12 1,374 1,277
Liabilities classified as held for sale 7 507 1,455
Total current liabilities 7,922 10,355
Non-current liabilities
Provisions 374 391
Interest bearing loans and borrowings 12 1,901 2,839
Deferred tax liabilities 230 336
Total non-current liabilities 2,505 3,566
Total liabilities 10,427 13,921
Net assets 2,043 3,761
Equity
Share capital 1,580 1,535
Treasury shares (148) (148)
Share premium account 1,458 1,271
Capital redemption reserve 191 191
Share option reserve 377 364
Equity reserve 255 255
Retained earnings (1,670) 293
Total equity attributable to the equity
holders of the Parent Company 2,043 3,761
Consolidated Statement of Changes in Equity
Year ended 30 November 2016
Share Treasury Share Capital Share Equity Retained Total
capital shares premium redemption option reserve earnings GBP'000
GBP'000 GBP'000 account reserve reserve GBP'000 GBP'000
GBP'000 GBP'000 GBP'000
Group
At 1 December
2014 1,324 (148) 224 191 338 126 3,536 5,591
Total
comprehensive
loss for the
year - - - - - - (3,243) (3,243)
Equity
component
of
convertible
loan
notes net
of deferred
tax - - - - - 129 - 129
Transactions
with owners
Issue of share
capital 211 - 1,047 - - - - 1,258
Share-based
payments - - - - 26 - - 26
At 1 December
2015 1,535 (148) 1,271 191 364 255 293 3,761
Total
comprehensive
loss for the
year - - - - - - (1,963) (1,963)
Transactions
with owners
Issue of share
capital 45 - 187 - - - - 232
Share-based
payments - - - - 13 - - 13
At 30 November
2016 1,580 (148) 1,458 191 377 255 (1,670) 2,043
Consolidated Statement of Cash Flow
Year ended 30 November 2016
Notes 2016 2015
GBP'000 GBP'000
Loss for the year (1,963) (3,243)
Adjusted for:
Taxation 8 64 (734)
Depreciation and amortisation 1,078 948
Impairment of intangible assets 11 - 1,899
Share option charge 13 26
Financial income - (1)
Financial expense 395 266
Loss on disposal of property,
plant and equipment - 70
Share of loss of associate 91 -
Profit on sale of Due North Limited 6 (1,664) -
Profit on sale of AITrackRecord
Limited 6 (585) -
Profit on sale of Willow Starcom
Limited 6 - (900)
Operating cash outflow before
changes in working capital (2,571) (1,669)
Decrease/(Increase) in trade
and other receivables 934 (496)
Decrease in inventories - 8
(Decrease)/Increase in trade
and other payables (1,228) 345
Net cash outflow from operations
before taxation (2,865) (1,812)
Taxation received - 237
Net cash outflow from operations (2,865) (1,575)
Cash flows from investing
Interest received - 1
Acquisition of property, plant
and equipment and software licences (17) (66)
Cost of software development (579) (1,541)
Acquisition of trade and assets - (1,340)
Disposal of Due North Limited
(net of expenses) 4,030 -
less: cash and cash equivalents
disposed of 77 -
Disposal of AITrackRecord Limited
(net of expenses) 7 -
less: cash and cash equivalents
disposed of (10) -
Disposal of Willow Starcom Limited
(net of expenses) - 1,487
less: cash and cash equivalents
disposed of - (346)
Move to held for sale of Due
North Limited - (207)
Net cash inflow/(outflow) from
investing 3,508 (2,011)
Cash flows from financing activities
Interest paid (336) (192)
Issue of shares - 1,200
Exercise of share options 232 58
(Repayment)/issue of loan notes (900) 2,900
Net cash (outflow)/inflow from
financing (1,004) 3,966
Net (decrease)/increase in cash
and cash equivalents (361) 379
Opening cash and cash equivalents 1,523 1,144
Closing cash and cash equivalents 1,162 1,523
Notes to the Consolidated Statements
1. Basis of preparation
The financial information set out in the announcement does not
constitute the company's statutory accounts for the years ended 30
November 2016 or 2015. The financial information for the year ended
30 November 2015 is derived from the statutory accounts for that
year, which were prepared under IFRSs, and which have been
delivered to the Registrar of Companies. The auditor's report on
those accounts was unqualified, did not contain a statement under
either Section 498(2) or Section 498(3) of the Companies Act 2006
and did not include references to any matters to which the auditors
drew attention by way of emphasis.
The financial information for the year ended 30 November 2016 is
derived from the audited statutory accounts for the year ended 30
November 2016 on which the auditor has given an unqualified report,
that did not contain a statement under section 498(2) or 498(3) of
the Companies Act 2006 and did not include references to any
matters to which the auditors drew attention by way of emphasis.
The statutory accounts will be delivered to the Registrar of
Companies following the Company's Annual General Meeting.
These extracts from the financial statements have been prepared
in accordance with International Financial Reporting Standards
('IFRS's') as adopted by the European Union, and with those parts
of the Companies Acts applicable to companies reporting under
IFRS.
The extracts from the consolidated financial statements have
been prepared under the historical cost convention and on a going
concern basis.
2. Basis of consolidation
The Group results comprise the financial statements of Access
Intelligence plc and its subsidiaries as at 30th November 2016.
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 or delivery of
infrastructure not being significant in relation to total Group
revenue.
The Group's revenue was split into the following
territories:
Continuing Continuing Operations
Operations 2015
2016 GBP'000
GBP'000
United Kingdom 8,484 6,067
European Union 390 234
Rest of the world 724 386
9,598 6,687
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 Executive Officer and the Board.
The Reputation and Governance, Risk & Compliance segments
derive their revenues from software licence sales and support and
training revenues. As a result of the Group's divestments and
acquisitions during the year the segments reported have changed to
reflect the Board's focus. The segments are:
-- Reputation
-- Governance, Risk & Compliance
-- Discontinued - Disposals & Held for Sale
-- Head Office
The segment information for the year ended 30 November 2016 is
as follows:
Reputation Governance Head Consolidation Continuing Discontinued Discontinued Consolidated Discontinued Total
GBP'000 Risk office adjustment operations Disposals Held adjustment operations GBP'000
and GBP'000 GBP'000 GBP'000 GBP'000 for GBP'000 GBP'000
Compliance sale
GBP'000 GBP'000
External
revenue 9,108 490 - - 9,598 544 789 - 1,333 10,931
Operating
(loss)/profit (2,784) (41) (432) 306 (2,951) (714) (16) 40 (690) (3,641)
Share of loss
of associate - - (91) - (91) - - - (91)
Profit on sale
of subsidiary - - - - - - - 2,228 2,228 2,228
Financial
income - - 2,500 (2,500) - - - - - -
Financial
expense - - (395) - (395) - - - - (395)
Taxation 56 (33) (73) 13 (37) - (27) - (27) (64)
(Loss)/profit
after
taxation (2,728) (74) 1,509 (2,181) (3,474) (714) (43) 2,268 1,511 (1,963)
Reportable
segment
assets 10,058 409 9,468 (7,757) 12,178 - 292 - 292 12,470
Reportable
segment
liabilities 12,648 215 4,747 (7,690) 9,920 - 507 - 507 10,427
Other
information:
Additions to
property,
plant
and equipment 14 - 4 - 17 - - - - 17
Depreciation
and
amortisation 1,304 5 54 (348) 1,015 55 8 - 63 1,078
The segment information for the year ended 30 November 2015
(restated) is as follows:
Reputation Governance Head Consolidation Continuing Discontinued Discontinued Consolidated Discontinued Total
GBP'000 Risk office adjustment operations Disposals Held adjustment operations GBP'000
and GBP'000 GBP'000 GBP'000 GBP'000 for GBP'000 GBP'000
Compliance sale
GBP'000 GBP'000
External
revenue 6,119 568 - - 6,687 3,441 728 - 4,169 10,856
Operating
(loss)/profit (1,716) (175) 760 (410) (1,541) (863) (309) - (1,172) (2,712)
Profit on sale
of subsidiary - - - - - - - 900 900 900
Impairment - (30) - - (30) (1,692) (177) - (1,869) (1,899)
Financial
income - - 1 - 1 - - - - 1
Financial
expense - - (266) - (266) - - - - (266)
Taxation 401 23 82 21 527 266 (59) - 207 734
(Loss)/profit
after
taxation (1,315) (182) 577 (389) (1,309) (2,289) (545) 900 (1,934) (3,243)
Reportable
segment
assets 13,393 374 10,853 (11,658) 12,962 4,555 165 - 4,720 17,682
Reportable
segment
liabilities 10,909 2,124 9,630 (13,605) 9,058 3,676 1,186 - 4,862 13,921
Other
information:
Additions to
property,
plant
and equipment 12 1 10 - 23 44 - - 44 66
Depreciation
and
amortisation 577 22 102 (110) 591 338 15 - 353 944
5. Operating Loss
Operating loss is stated after charging:
2016 2015
GBP'000 GBP'000
Depreciation of property,
plant and equipment 176 162
Amortisation of development
costs 218 124
Amortisation of brand values 60 60
Amortisation of software
licences 63 36
Amortisation of database 272 138
Amortisation of customer
list 226 70
Loss on disposal of property,
plant and equipment - 70
Impairment of intangible
assets - 30
(Profit) on foreign currency
translation (6) -
Exceptional costs (see below) 285 260
Operating lease charges
- land and buildings 571 574
Auditor's remuneration (see
below) 62 85
Share based payments 13 26
Research and development
and other technical expenditure
(income statement) (a further
GBP522,000 (2015: GBP417,000)
was capitalised) 1,664 650
Increase in provision for
receivables 39 46
Exceptional costs in the year ended 30 November 2016 were
incurred as a result of restructuring and non-recurring one off
termination of employment costs for staff and directors, along with
associated legal fees. The exceptional costs are made up of the
following:
2016 2015
GBP'000 GBP'000
Compensation for loss of office
- directors - 88
Compensation and notice payments
- all staff 285 134
Legal costs incurred on compensation
of loss of office for directors - 38
285 260
6. Discontinued operations
The following tables provide combined information for all
discontinued operations. The current year figures include the
results of Due North Limited, AITrackRecord Limited and
AIControlPoint plus consolidation adjustments. The prior year
comparative figures also include the results of Willow Starcom
Limited which was sold during the year ended 30 November 2015.
2016 2015
GBP'000 GBP'000
Results of discontinued
operation
Revenue 1,333 4,169
Expenses (2,023) (6,310)
Results from operating
activities (690) (2,141)
Tax (27) 207
Results from operating
activities, net of tax (717) (1,935)
Gain on sale of discontinued
operation 2,228 -
Tax on gain on sale - -
of discontinued operation
Profit/(loss) for the
year 1,511 (1,935)
Basic earnings per share 0.48p (0.77)p
Diluted earnings per
share 0.48p (0.77)p
The profit/(loss) from discontinued operations of GBP1,511,000
(2015: loss of GBP1,935,000) is entirely attributable to the owners
of the Company.
2016 2015
GBP'000 GBP'000
Cash flows from/(used in) discontinued
operation
Net cash from operating activities 257 1,162
Net cash used in investing activities (15) (977)
Net cash used in financing activities (465) -
Net cash flows for the year (222) (185)
The following is a breakdown of the effects of the disposal of
Due North Limited and AITrackRecord Limited on the financial
position of the Group:
2016
GBP'000
Goodwill 412
Property, plant and equipment 95
Intangible assets 2,614
Trade and other receivables 465
Cash and cash equivalents 140
Deferred tax assets (409)
Trade and other payables (905)
Net assets and liabilities 2,412
Consideration received, satisfied in shares
of TrackRecord Holdings Limited 625
Consideration received, satisfied in cash 4,601
Cash and cash equivalents disposed of 140
7. Disposal group held for sale
AIControlPoint, a branch of the Parent Company is presented as a
disposal group held for sale following the commitment of the
Group's management in 2016 to a plan to sell the business. Efforts
to sell the disposal group had therefore commenced before the year
end, with the sale being completed on 16 March 2017 (see note
30).
At the prior year end, Due North Limited was presented as a
disposal group held for sale following the commitment of the
Group's management to a plan to sell the entity with the sale being
completed on 3 February 2016 (see note 6).
At 30 November, the disposal group comprised the following
assets and liabilities:
Assets classified as held for sale
2016 2015
GBP'000 GBP'000
Goodwill 89 412
Development costs - 2,661
Other intangible fixed assets 3
Property, plant and equipment - 75
Trade and other receivables 289 514
Cash and cash equivalents - 207
381 3,869
Liabilities classified as held for sale
2016 2015
GBP'000 GBP'000
Trade and other payables 75 401
Deferred income 432 621
Deferred tax liabilities - 433
507 1,455
8. Taxation
2016 2015
GBP'000 GBP'000
Current income taxes credit:
UK corporation tax credit for the year (333) -
Adjustment in respect of prior year (103) -
Total current income tax credit (436) -
Deferred tax (note 23)
Impact of change in tax rate - 27
De-recognition of deferred tax assets 194 80
Origination and reversal of temporary
differences 279 (634)
Total deferred tax 473 (527)
Total tax charge/(credit) 37 (527)
As shown above the tax assessed on the loss on ordinary
activities for the year is higher than (2015: higher than) the
standard rate of corporation tax in the UK of 20% (2015:
20.3%).
The differences are explained as follows:
Factors affecting tax credit
2016 2015
GBP'000 GBP'000
Loss on ordinary activities before tax
from continuing operations (3,437) (1,836)
Profit/(loss) on ordinary activities
before tax from discontinued operations 1,538 (2,141)
Loss on ordinary activities before tax (1,899) (3,977)
Loss on ordinary activities multiplied
by effective rate of tax (380) (809)
Expenses not deductible for tax purposes 666 274
Adjustment in respect of prior year (103) -
De-recognition of deferred tax assets 141 80
Additional R&D claim CTA 2009 (260) (279)
Total tax charge/(credit) 64 (734)
Tax charge/(credit) reported in the
Consolidated Statement of Comprehensive
Income 37 (527)
Tax charge/(credit) attributable to
discontinued operations 27 (207)
Total tax charge/(credit) 64 (734)
Factors that may affect future tax expenses
A reduction in the UK corporation tax rate from 20% to 19%
(effective from 1 April 2017) was substantively enacted in October
2015. A further reduction in the tax rate from 19% to 17%
(effective from 1 April 2020) was substantively enacted in
September 2016. These rates there- fore have been
considered when calculating the deferred tax at the reporting date.
9. Dividend paid
Due to the significant and ongoing investment in developing our
products, the directors do not propose a dividend in respect of the
year ended 30 November 2016.
10. Earnings per share
The calculation of earnings per share is based upon the total
Group loss for the year of GBP1,963,000 (2015: loss of
GBP3,243,000) divided by the weighted average number of ordinary
shares in issue during the year which was 315,301,844 (2015:
252,593,681).
In 2016 and 2015 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. As a result, dilutive
loss per share is disclosed as the same value as basic loss per
share.
This has been computed as follows:
Continuing Discontinued Total Continuing Discontinued Total
Operations Operations Operations Operations
2016 2016 2016 2015 2015 2015
Numerator GBP'000 GBP'000 GBP'000 (restated) (restated) GBP'000
GBP'000 GBP'000
(Loss)/Profit
for the year
and earnings
used in basic
EPS (3,474) 1,511 (1,963) (1,309) (1,934) (3,243)
Earnings used
in diluted
EPS (3,474) 1,511 (1,963) (1,309) (1,934) (3,243)
Denominator '000 '000 '000 '000 '000 '000
Weighted
average
number of
shares used
in basic EPS 315,302 315,302 315,302 252,594 252,594 252,594
Effects of:
Dilutive N/A N/A N/A N /A N/A N/A
effect
of options
Dilutive
effect N/A N/A N/A N /A N/A N/A
of loan note
conversion
Weighted
average
number of
shares used
in diluted
EPS 315,302 315,302 315,302 252,594 252,594 252,594
Basic (Loss)/
earnings per
share (pence) (1.10) 0.48 (0.62) (0.52) (0.76) (1.28)
Diluted loss
per share
for the year
(pence) (1.10) 0.48 (0.62) (0.52) (0.76) (1.28)
The total number of options and warrants granted at 30 November
2016 of 24,353,073 (2015: 33,958,676)
would generate GBP716,379 (2015: GBP984,626) in cash if
exercised. At 30 November 2016, 220,000 (2015: 545,000) were priced
above the mid-market closing price of 4.625p per share (2015: 5.13p
per share) and 24,133,073 (2015: 33,413,676) were below.
At 30 November 2016 7,872,941 (2015: 9,258,676) staff options
were eligible for exercising at an average price of 2.96p (2015:
3.2p). Also eligible for exercising are the 14,491,897 warrants
priced at 2.75p per share held by Elderstreet VCT plc, D Lowe and
other individuals consequent to an initial investment in the
Company in October 2008.
The below table shows the amount of outstanding convertible loan
notes at 30 November 2016 and the amount of shares they would
convert into if the holder chooses the conversion option:
Holder Loan Notes Convert into Date of conversion
GBP'000 shares '000
31 December
Elderstreet VCT 500 12,500 2017
31 December
Unicorn AIM VCT 750 18,750 2017
4 December
Elderstreet VCT 200 6,667 2019
4 December
Hawk Investments 300 10,000 2019
Kestrel Partners 4 December
LLP 400 13,333 2019
4 December
Octopus AIM VCT 200 6,667 2019
Total 2,350 67,917
11. Intangible fixed assets
Brand Goodwill Development Software Database Customer Total
Value GBP'000 Costs Licences GBP'000 relationships GBP'000
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 December
2014 1,369 12,005 4,692 160 - - 18,226
Capitalised
during the
year - - 1,533 68 - - 1,601
Additions
through
business
combination - 2,043 - 8 997 830 3,878
Disposals - (1,430) - - - - (1,430)
Held for sale - (1,481) (2,846) - - - (4,327)
At 1 December
2015 1,369 11,137 3,379 236 997 830 17,948
Capitalised
during the
year - - 522 57 - - 579
Disposals - (1,872) (1,800) - - - (3,672)
Held for sale - (89) (183) (150) - - (422)
At 30
November
2016 1,369 9,176 1,918 143 997 830 14,433
Amortisation
and
impairment
At 1 December
2014 409 8,776 552 83 - - 9,820
Charge for
the year 60 - 378 44 138 70 690
Disposals - (630) - - - - (630)
Held for sale - (1,069) (185) - - - (1,254)
Impairment
in year - - 1,899 - - - 1,899
At 1 December
2015 469 7,077 2,644 127 138 70 10,525
Charge for
the year 60 - 265 71 272 226 894
Disposals - (1,872) (1,846) - - - (3,718)
Held for sale - - (183) (147) - - (330)
At 30
November
2016 529 5,205 880 51 410 296 7,371
Net Book
Value
At 30
November
2016 840 3,971 1,038 92 587 534 7,062
At 30
November
2015 900 4,060 735 109 859 760 7,423
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 carrying value of capitalised development costs which are
not yet being amortised and goodwill, allocated to each CGU
are:
2016 Development Goodwill
Costs GBP'000
GBP'000
Continuing operations
Access Intelligence plc - -
Access Intelligence Media
and Communications Ltd - 1,928
AIMediaData Ltd. - 2,043
- 3,971
2015 Development Goodwill
Costs GBP'000
GBP'000
Continuing operations
Access Intelligence plc - 89
Access Intelligence Media
and Communications Ltd - 1,928
AIMediaData Ltd. 78 2,043
- 4,060
At the reporting 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 goodwill impairment assessment and covering a ten-year
period based on financial budgets and forecasts as approved by the
Board with no terminal value for other intangible assets. Ten years
were selected as this represents the estimated lifetime of the
software platforms.
The key assumptions used for value-in-use calculations are those
regarding revenue growth rates and discount rates over the forecast
period. 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 and
forecasts in the first three years, followed by applying specific
growth rates for which the key assumptions in respect of annual
revenue growth rates range between 0% and 7% from year 4
onwards.
The discount rate used for all companies was 12%, based on an
assessment of the Group's cost of capital and on comparison with
other listed technology companies. The terminal growth rate used
for the purposes of goodwill impairment assessments was 2.5%. The
Board considered that no impairment to goodwill is necessary based
on the value-in-use reviews of Access Intelligence Media &
Communications Limited and AIMediaData Limited.
The value-in-use calculations for Access Intelligence Media
& Communications Limited and AIMediaData Limited exceeded the
carrying values of goodwill and relating to those companies.
Sensitivity analysis has been performed on reasonably possible
changes in assumptions upon which recoverable amounts have been
estimated. Based on the sensitivity analysis, a reduction of 51% in
EBITDA delivered by Access Intelligence Media & Communications
Limited would result in the carrying value of its goodwill being to
equal its recoverable amount. For AIMediaData Limited, a 36%
reduction in EBITDA would result in the carrying value of its
goodwill being equal to its recoverable amount. For both companies,
an increase in the discount rate by 12 percentage points would
still not result in the carrying value of goodwill exceeding the
recoverable amount.
Based on the sensitivity analysis, a reduction of 49% in EBITDA
delivered by Access Intelligence Media & Communications Limited
would result in the carrying value of its other intangible assets
being to equal its recoverable amount. For AIMediaData Limited, a
26% reduction in EBITDA would result in the carrying value of its
other intangible assets being equal to its recoverable amount. For
both companies, an increase in the discount rate by 12 percentage
points would still not result in the carrying value of other
intangible assets exceeding the recoverable amount.
Other impairments
Other intangible assets are tested for impairment if indicators
of an impairment exist. Such indicators include performance falling
short of expectation.
In 2016, development costs of GBPNil (2015: GBP177,000) were
impaired as a result of projects that did not perform as
expected.
The directors considered that there were no indicators of
impairment relating to the remaining intangible fixed assets at 30
November 2016.
12. Interest bearing loans and borrowing
2016 2015
GBP'000 GBP'000
Current
Convertible loan notes 1,264 1,277
Non-convertible loan notes 110 -
1,374 1,277
Non-current
Convertible loan notes 1,052 1,009
Non-convertible loan notes 849 1,830
1,901 2,839
On 30th June 2009 GBP1,750,000 convertible loan notes were
issued. At 30 November 2015 and 30 November 2016, 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 on 30th June 2015 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 2014, the Company agreed terms with Elderstreet VCT (a
company related to Chairman Michael Jackson) and Unicorn AIM VCT
plc to extend the loans 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. In January 2016, the
maturity dates of the loan notes were extended to 31 December 2016
with all other terms remaining unchanged. The carrying value of
these loans at the prior year-end, including accrued interest, was
GBP1,277,000.
In December 2016 the maturity dates of the loan notes were
further extended to 31 December 2017 with all other terms remaining
unchanged. These notes are classified as current at the year
end.
In December 2014 the Company issued GBP1,100,000 of convertible
loan notes. These loan notes are redeemable at par or convertible
to ordinary shares at 3p per ordinary share on or before maturing
on 3 December 2019 and carry a coupon rate of 8% per annum payable
semi-annually until such time as they are repaid or converted.
No redemptions or conversions of the convertible loan stock
arose in the year ended 30 November 2016.
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:
2016 2015
GBP'000 GBP'000
Proceeds of issue of convertible
loan notes - 1,100
Existing loan notes rolled
over 2,350 1,250
Equity component (255) (255)
Deferred taxation (79) (79)
Initial fair value of liability
component 2,016 2,016
Cumulative interest charged 1,009 792
Cumulative interest paid (709) (522)
Liability component at
30 November 2,316 2,286
The equity component of GBP255,000 (2015: GBP255,000) has been
credited to equity reserve. The interest charged for the year is
calculated by applying an effective rate of interest of 10.1%
(2015: 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 statement of
financial position at 30 November 2016 represents the effective
interest rate less interest paid to that date.
The movement on the convertible loan note liability is
summarised below:
2016 2015
GBP'000 GBP'000
Opening loan liability 2,286 1,301
Issue of convertible loan
notes - 941
Interest charged for the
year 217 191
Interest paid in the year (187) (147)
Liability component at
30 November 2,316 2,286
On 22 June 2015 the Company issued GBP1,818,000 of
non-convertible loan notes which carried an interest rate of 10%
for one year rising to 12% thereafter. Interest is payable
quarterly in arrears. The loans notes are fully repayable in five
years.
2016 2015
GBP'000 GBP'000
Opening loan liability 1,830 -
Issue of non-convertible
loan notes - 1,818
Costs associated with the
issue of loans - (18)
Repayment of non-convertible
loan notes (900) -
Interest charged for the
year 178 75
Interest paid in the year (149) (45)
Liability component at
30 November 959 1,830
13. Availability of Annual Report and AGM date
Copies of the Report and Accounts have been posted to
shareholders where requested and the document is available from the
Company's website (www.accessintelligence.com). It is intended that
the annual general meeting will take place at the Company's
registered office, Longbow House, 14-20 Chiswell Street, London,
EC1Y 4TW, at 10.30am on Friday 26 May 2017.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR OKFDPABKDPQB
(END) Dow Jones Newswires
May 02, 2017 02:01 ET (06:01 GMT)
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