TIDMALT
RNS Number : 7739R
Altitude Group PLC
26 September 2017
Altitude Group plc
("Altitude", "Group" or the "Company")
INTERIM RESULTS FOR THE SIX MONTHSED 30 JUNE 2017
Altitude Group plc (AIM: ALT), the operator of a leading
marketplace for personalised products, announces its interim
results for the six month period ended 30 June 2017.
Financial Highlights
-- Increased profitability in core business; encouraging
progress in the development of Channl business
-- Revenues of GBP3.0m (H1 2016: GBP3.0m) including a first time
revenue contribution of GBP0.3m following the acquisition of
AdProducts.comLimited ("ADP") in early June 2017
-- Gross margin maintained (excluding ADP) of 78.8% (H1 2016: 78.9%)
-- GBP0.3m of cost savings in adjusted administrative expenses* to GBP1.4m (H1 2016: GBP1.7m)
-- Adjusted operating profit* GBP0.8m (H1 2016: GBP0.7m) an increase of GBP0.1m or 20.6%
-- Profit before taxation GBP0.5m (H1 2016: GBP0.4m), an
increase of GBP0.1 or 20.5%, including first time contribution from
ADP of GBP47,000
-- GBP2.5m new equity raise (before expenses) to finance and
accelerate future growth of Channl in the US and UK, including the
GBP0.8m acquisition of the trade and certain assets of Ad
Products.com Limited a UK based supplier of promotional
products
-- Group remains free of bank borrowing, with net cash resources
of GBP2.1m (30 June 2016: GBP0.4m; 31 Dec 2016: GBP0.7m)
* before share-based payment charges, amortisation of intangible
assets and exceptional expenses.
Operational Highlights
-- Appointment to the Board of Nichole Stella as President of the US Operations
-- Channl revenue initiated in US and UK. Over 100,000 Channl US
sites and over 250 UK sites now created for distributors and their
end user customers with enhanced user experience
-- Acquisition of the trade and certain assets of Ad
Products.com Limited, a UK based supplier of promotional products,
for GBP0.8m
-- New suppliers to Channl added in both the US and UK -
Primeline (US), The Pen Warehouse and Snap Products (both UK) and
ADP (UK, in-house). Product range to be extended in 2017 to include
print services in partnership with major US tier one provider
-- Terms agreed for enhancing and extending our partnership with
AI Mastermind ("AIM"), the US based promotional products
distributor buying group. Channl will be combined with Altitude's
full cloud based CRM and order management system, providing the
c.1,400 AIM members, with a proven system, through which both
ecommerce and non ecommerce orders can be processed on a Channl
"throughput" pricing model
Webinar
The Company will be holding a webinar at 12.30 p.m. on Wednesday
27 September 2017 which all shareholders are invited to attend. In
order to join the webinar please register at the link below. After
registering you will receive a confirmation email containing
information about joining the webinar.
https://attendee.gotowebinar.com/register/1749159558187366401
Executive Chairman, Peter Hallett, commented:
"We have learned a great deal from the successful launch of
Channl earlier this year in the US and more recently in the UK,
which we believe has reaffirmed its attractiveness to distributors,
as a free, best in class online trading platform, and to end users
as the "easiest way to buy personalised promotional products".
The Board believes that the business is on the correct path in
the US and will deliver significant future revenue as we establish
our own permanent and scalable engagement team in the US under
Nichole's leadership. Channl will be marketed intensely to a
targeted number of distributors and will increase the potential
throughput from the existing $1.2 billion revenue AIM membership by
combining the Channl ecommerce platform with our full order
management and CRM system. In addition we will continue to progress
discussions with other potential enterprise level partners.
We are also encouraged by recent progress made by Channl in the
UK, a market of circa GBP1 billion of revenue, which represents a
major and immediate opportunity. Expanding our Channl product
offering with the addition of new suppliers - namely Primeline in
the US and Ad Products, The Pen Warehouse and Snap Products in the
UK - will increase the attraction of Channl to distributors and
their end user customers.
We are increasingly confident that Channl is a major conduit for
distributors and end users as the market inevitably migrates
transactions online and we look forward to updating shareholders on
future progress."
Enquiries:
Altitude Group plc
Peter Hallett, Executive
Chairman 07887 987469
finnCap 020 7220 0500
Jonny Franklin-Adams (Corporate
Finance)
Scott Mathieson (Corporate
Finance)
Richard Chambers (Corporate
Broking)
Chairman's Statement
I am pleased to present the interim results for the six months
ended 30 June 2017 during which the business has increased adjusted
operating profit* to GBP0.8m (H1 2016: GBP0.7m) and profit before
taxation to GBP0.5m (H1 2016: GBP0.4m). The results include a first
time profit contribution of GBP47,000 from the Ad Products business
("ADP") which we acquired in June 2017.
The business has continued to intensively focus on identifying
the best route to market for the Channl online trading platform, to
release the enormous potential we believe it has to disrupt the
personalised and promotional products, signage and printed
wearables markets in the US and the UK. I am pleased to report that
sales orders are now being transacted through the Channl platform
in both the US and UK, more details of which are outlined below. In
a progressive first six months of the year, the effort expended by
our small management team has been total and I begin my statement
by thanking them for their commitment.
We are delighted that Nichole Stella has joined us as a key
executive board director and President of US Operations. Nichole
will be based permanently in the US and will be singularly focussed
on driving significant revenue through the Channl platform.
I set out below a summary of our progress and improved strategic
direction during the current year. We believe the data is
supportive of the Board's initial optimism for the potential of
Channl, and market expectations for accelerating Channl revenue in
2018. As announced today, our efforts with our US partner AI
Mastermind ("AIM"), the 1,400 member promotional products
distributor buying group accounting for $1.2 billion of end-user
annual revenue, have culminated in an extension and expansion of
our partnership agreement which we believe will yield significant
Channl revenue to the Group in 2018.
During the period the Group successfully completed an equity
fund raise of GBP2.5 million, the proceeds of which are being used
to finance and accelerate the growth of Channl in the US and UK,
including the GBP0.8m acquisition of the trade and certain assets
of Ad Products.com Limited, a small UK based promotional product
supplier. The acquisition of ADP has facilitated the launch of
Channl to distributors in the UK as it has secured the Group's own
UK supply source and provides access to distributors at a trading
level.
* before share-based payments, amortisation of intangible assets and exceptional expenses
Channl US
We have continued to improve the functionality and user
experience of the Channl trading platform, and increase the
products available for personalisation and purchase on it. To this
end, we are delighted to announce that we have agreed a supply
partnership with Prime Resources Corp of Bridgeport, Connecticut,
USA, trading as Primeline, who will complement the current Aprinta
promotional products and print services offer in partnership with a
major US tier one provider.
Shareholders will be aware that at the end of February 2017 we
commenced the process of digital marketing engagement with
distributors for whom we have created free and live Channl web
sites, branded with their personal and unique logos. The process is
aimed at leading the distributor along a pathway to trading online
through the free Channl platform, and also creating individual
Channl web sites for their end user customers, pre-loaded with the
end user customer logos, for direct online ordering. This
ostensibly "push" approach is reliant on the cooperation and
engagement of the distributor.
We continued creating US Channl web sites through to early
summer 2017, and have currently created over 22,000 for
distributors and resellers, and more than 100,000 end user sites on
behalf of distributors. We have been steadily and commensurately
digitally marketing to these businesses, via our supply partner
Aprinta, and through our distributor buying group partner, AI
Mastermind ("AIM"). We are pleased to report that the total number
of visits to Channl websites has grown exponentially since March
2017 and during August increased by approximately 55% with an
average visit duration exceeding 37 minutes which demonstrates the
level of interest the sites are creating. In addition, the
important "bounce" rate (being the percentage of people who visit
the website and immediately leave having not gone beyond the home
page) for the period has been exceptionally low at 22.9% with the
average number of pages viewed per visit exceeding 35 pages.
Strategy development
Our initial marketing of Channl was conducted through a staged
high volume and high frequency acquisition email blast programme.
This strategy was based on tactics used by technology companies
such as Shopify and Uber to acquire merchants and drivers
respectively, where there is evidence of interest. Key performance
indicators highlighted good engagement with the target distributor
and reseller audience. Open rates ("OR") of our unsolicited emails
averaged 31% for AIM distributor members and 9% for Aprinta sourced
distributors. In addition, the click through rates ("CTR"),
calculated as a percentage of OR, were similarly strong at 23% for
AIM distributors and 4.2% for Aprinta distributors. These rates
compare favourably with similar ecommerce digital marketing success
rates and are especially strong in relation to AIM members,which
had the benefit of marketing support from the buying group.
These interactions took the distributor through to the Channl
distributor site engagement stage but did not extend the marketing
to the end user customer. The engagement of the end user customer
is reliant on an introduction of the Channl site to them by the
distributor as the "owner" of the customer relationship.
Our key learning here is that high volume digital marketing to,
and creation of sites for, the distributor alone is not sufficient
to drive the distributor to market the platform to their end user
customers, and could not be relied upon alone to generate
significant end user order volume. We therefore moved to a more
intensive marketing and support trial with a handful of
distributors where we provided:
-- on-site training of the Channl solution to distributor staff
-- on site distributor Q&A during launch
-- technical distributor support provided from the UK
The impact of this intensive marketing and support programme was
immediate and positive:
-- distributors were motivated to send out personalised sites to
end user customers as they became appreciative of the benefits that
Channl offered both them and their cutomers;
-- immediate 23% OR and 13% CTR on personalised end user customer marketing emails;
-- significant increases in page views by end users - over 5,000
page views to a single distributor website in one day; and
-- order intake was immediate and in one instance increased from
zero to an weekly average of 48 sustained over a 4 week period
-- generated an average order value of $300
These early results confirmed that the most effective way for
Channl to achieve end user engagement and transactional revenue is
by engaging more fully with distributors to encourage end user
engagement. The key to this improved distributor engagement is
education and technical support - ensuring the distributor
understands the benefits provided to all parties by Channl and
giving them the confidence and help to make the roll out of Channl
to their customer base as easy as possible.
As a result of these learnings we understand that our approach
in the US must behighly focussed:
-- We have held back on the number of sites being generated, and
are focussed on quality of engagement rather than quantity of sites
created; we have the ability to scale up at will
-- We are in the process of building our own high quality
engagement team, located in the US, which will provide the support
intensity required to engage targeted distributors
-- We have recruited a permanent high calibre US based business
leader, Nichole Stella, to drive the acceleration of engagement.
Nichole brings a huge amount of knowledge and experience of the US
market and will bring sector focus and expertise to our Channl
business
AI Mastermind
Today we have announced that we have agreed terms for an
enhanced and extended partnership agreement with AIM which provides
for the Channl ecommerce platform to be combined with the Group's
comprehensive CRM and sales order management system and in doing so
provide the 1,400 members of AIM with an industry specific and
proven cloud based order management system through which both
ecommerce and non ecommerce orders can be processed on a Channl
"throughput" pricing model. The platform will be provided to AIM
for free with Altitude taking a share of the throughput revenue.
This extended partnership agreement is exactly in line with our new
focussed strategy explained above and has come about as a result of
the intense marketing and support programme that we have undertaken
with AIM in recent months.
We have already created Channl web sites for virtually all the
1,400 AIM distributor members, each of whom are substantial
distributors across the US, with revenue ranging from $0.5 million
to $3million, and in total accounting for end user revenue of
c.$1.2 billion. The benefits provided by engaging with these Channl
websites will be promoted to AIM members by AIM directly through
the member's portal on an exclusive basis with comprehensive
support provided by Altitude.
The enhanced product will be available to members in early
2018.
Other US Channl opportunities
In addition to the above we are making good progress in
discussions with potential large US enterprise customers seeking
partnership deals, which would provide enterprise partners with
access to the Channl trading platform technology under a "White
Label" arrangement on a "share of throughput" pricing model. We are
confident of making progress in this area and are in active
discussions with a number of potential enterprise level
customers.
Finally, we will be actively targeting business start-ups,
taking a lead from the Shopify business model. Channl has huge
potential as an easy, low cost, start-up business for those seeking
a secondary source of income and looking for a home based
solution.
As a result of these positive early data points, the Board is
very confident for the potential of Channl to generate and
accelerate revenue in line with expectations for 2018.
UK Business
The business has a strong market position in the UK promotional
merchandise industry. The market, whilst smaller than the US, is
still estimated to be worth in excess of GBP960 million in 2016,
growing by approximately 6% annually .
It is estimated that the market comprises approximately 1,975
distributors and GBP720 million (74.4%) of the market revenue is
derived from the top 343 (17.4%) distributors.
The company delivers the National Show for the industry annually
in January, which welcomes over 2,000 distributor and reseller
delegates. We also produce the free monthly trade magazine "PPD"
with a circulation of approximately 9,000, and the two leading
trade catalogues each year "Envoy" and "Spectrum". In addition the
company provides its industry specific and unique ERP system
"Promoserve" to over 75 subscribers on a monthly recurring revenue
basis as "software as a service" ("SaaS"), along with other
numerous trade specific applications including web stores, search
engines and logo software.
Therefore the development of a UK Channl trading platform
represents a credible, natural and compelling progression and
business proposition for UK distributors, providing businesses, who
typically could not afford or do not wish to risk the required
investment, the ability for their customers to trade promotional
merchandise online.
We acquired the trade and certain assets of Ad Products.com
Limited ("ADP") in June of this year in order to facilitate the
creation of a UK Channl trading platform. The acquisition enables
us to manage and control the products we choose to curate on
Channl. We have also recently supplemented the Channl product
offerring by signing additional supply partnerships with The Pen
Warehouse, Snap Products and Pinpoint Badges.
Following the acquisition of ADP, we have developed a separate
UK Channl platform and commenced marketing to distributors in the
UK. Over 250 UK Channl sites have been created to date, each one
createdby the relevant distributor.
Average OR from the acquisition email campaign is circa 14.9% of
which the CTR is 4.7%, resulting in 236 distributors now currently
deemed as "acquired" as a Channl distributor. These rates are
commensurate with accepted ecommerce marketing campaign "norms".
However, similarly to the US, basic digital marketing engagement
with distributors alone is not sufficient to generate end user
engagement and revenue throughput. We therefore launched weekly
webinars, which quickly expanded to three times a week due to
demand, which also enable capture of contact details for subsequent
follow up. Supplemented by call centre support, the success of this
more intense approach has been evidenced through a 39% conversion
rate of "acquired" distributors to "marketing to end user" status
by the end of July, which in turn led to orders being generated
commencing in August. We also provide the distributor with weekly
email offers and content for them to access and send to their end
user customers.
It is early days, but we are greatly encouraged by the speed of
response of the end user customers and the generation of
orders.
It should be noted also that Channl can provide incremental
revenue and margin for ADP as a supplier, in addition to Channl
gross transactional revenue ("GTR" or share of throughput).
Results
Revenue was GBP3.0m (H1 2016: GBP3.0m) with a first time revenue
contribution of GBP0.3m from ADP.
Underlying revenue reduced by GBP0.3m in the existing business
due to the elimination of unprofitable activity in the exhibitions
business (GBP0.1m), a decline in advertising revenue in
publications of GBP0.1m, and a reduction of GBP0.1m due to the
rephasing of publication revenue into H2 as a result of migration
to a monthly recurring revenue package offer.
Growth in UK technology revenue was largely offset by erosion in
unsupported legacy US revenue, leaving revenue flat at GBP1.2m (H1
2016: GBP1.2m).
Gross profit of GBP2.2m (H1 2016: GBP2.4m) includes a first time
contribution from ADP of GBP0.1m. As stated above GBP0.1m of the
underlying decrease represents a rephasing into H2, and GBP0.2m
from reduced unprofitable exhibition activity and reduced
advertising revenue. Underlying margin, excluding ADP, was 78.8%
(H1 2016: 78.9%)
However, the reported net reduction in gross profit of GBP0.2m
has been offset by a reduction in administrative expenses (before
share based payment charges, amortisation of intangible assets and
exceptional expenses) of GBP0.3m, or 16.7% to GBP1.4m (H1 2016:
GBP1.7m). The underlying savings rise to GBP0.4m or 22.3% on
exclusion of ADP administrative expenses.
Adjusted operating profit* of GBP0.8m (H1 2016: GBP0.7m)
increased by GBP0.1m or 20.6%. Excluding the first time
contribution of ADP of GBP46,000, the underlying increase in
adjusted operating profit was 13.8%.
Exceptional charges of GBP0.1m relate to the completion of the
reorganisation of the UK business head office (H1 2016: GBP0.1m).
Share based payment charges of GBP27,000 (H1 2016: GBP28,000) and
amortisation charges of GBP161,000 (H1 2016: GBP143,000) were
largely unchanged.
Included within administrative costs are software maintenance
and development costs of GBP0.1m, (H1 2016: GBP0.1m), as the Group
has maintained its support and development of its proprietary
software assets. In addition, the Group capitalised GBP0.2m of
software development costs (H1 2016: GBP0.2m). The current level of
expensed and capitalised development costs is representative of an
adequate maintenance level of expenditure and continuous
improvement of proprietary software assets including Channl.com,
Promoserve and artworktool(tm) .
The resulting operating profit and profit before tax for the
period was GBP0.5m (H1 2016: GBP0.4m), an increase of 20.5%.
Basic earnings per share were 1.05p (H1 2016: 0.96p), an
increase of 9.4% and fully diluted earnings per share were 1.00p
(H1 2016: 0.87p) an increase of 13.8%.
Net cash outflow from operating activities was GBP0.7m (H1 2016:
inflow of GBP0.3m), of which GBP0.3m of outflow was attributable to
the build-up of working capital from trading the ADP assets
acquired. The underlying outflow of GBP0.4m was largely
attributable to a pay down of year end creditors, and deferment of
customer advance deposits taken on the 2018 show. This will be
recovered during H2.
Expenditure on the acquisition of ADP was GBP0.8m and the cash
outflow from investment in intangible assets was lower at GBP0.1m
(H1 2016: GBP0.2m).
Financing activities comprised GBP0.5m from the exercise of
share warrants by Zeus Capital on 30 January 2017 and GBP2.4m from
the share placing and exercise of share options on 17 May (net of
preliminary expenses of GBP0.1m). The share warrants were granted
to Zeus Capital Limited, the Company's Financial and Nominated
Adviser at the time of the Company's admission to trading on AIM in
November 2005. The Company has issued and allotted the requisite
1,500,060 shares at a price of 36p which were admitted to trading
on AIM on 3 February 2017.
The net cash increase in cash and cash equivalents was GBP1.4m
(H1 2016: GBP0.1m).
The Group remains debt free and had cash resources as at 30 June
2017 of GBP2.1m (H1 2016: GBP0.4m).
* before share-based payments, amortisation of intangible assets and exceptional expenses
Board and Senior Management Changes
On 25 January 2017 we announced several board changes. I became
Executive Chairman with immediate effect and the following
appointments effected from 1 February 2017:
-- Martin Varley appointed as President
-- Sanjay Lobo joined us and was subsequently appointed to the
Board as UK based Managing Director on 3 April 2017; and
-- Gellan Watt joined as Independent Non-Executive Director
In addition it was announced that Richard Sowerby would step
down from the Board with effect from 30 April 2017. We thank
Richard for his tremendous contribution to the business.
My appointment to part time Executive Chairman is intended to be
a temporary measure whilst we seek to appoint a full time Chief
Financial Officer.
More recently we announced the appointment of Nichole Stella as
President of USA Operations and as an Executive Director of the
board with effect from 25 September 2017. Nichole brings an
extensive industry network in the US and a vast amount of knowledge
and experience across all aspects of our business.
Throughout her career, Nichole has driven various organisations
to embrace change and implement new scaling strategies through
creative and innovative thinking. Nichole has been known to the
business for over six years and we are delighted that she is
joining the Board to accelerate Channl transactional revenue in the
USA.
Nichole was a leading force with the Promo Marketing Media
Group, a division of Napco Media (North American Publishing
Company), for the last 12 years and served as President and Chief
Revenue Officer of the group since 2013. Promo Marketing Media
Group is a leading source of services and information to the
promotional product and print distributor industries in the USA.
With a combined audience of nearly 40,000 distributors, the group
is the premiere source for industry news and produces two magazines
('Promo Marketing' and 'Print + Promo') as well as events,
newsletters, online search tools, marketing and lead generation
services, custom publishing and video production services.
Following the appointment of Nichole, and as announced on 13
September 2017, Sanjay Lobo has resigned from the business.
In addition to these board changes we were also delighted to
announce the appointment of Henry Joseph-Grant to our senior
management team in July. Henry has significant experience in
technology lead aggregator businesses having been a key member of
the Just Eat team from start-up to its $2.4 billion IPO. Henry will
have responsibility for building a high-performance sales team
focused on growing the number of merchants using Channl.
Outlook
We have learned a great deal from the successful launch of
Channl earlier this year in the US and more recently in the UK,
which we believe has reaffirmed its attractiveness to distributors,
as a free, best in class online trading platform, and to end users
as the "easiest way to buy personalised promotional products".
The Board believes that the business is on the correct path in
the US and will deliver significant future revenue as we establish
our own permanent and scalable engagement team in the US under
Nichole's leadership. Channl will be marketed intensely to a
targeted number of distributors and will increase the potential
throughput from the existing $1.2 billion revenue AIM membership by
combining the Channl ecommerce platform with our full order
management and CRM system. In addition we will continue to progress
discussions with other potential enterprise level partners.
We are also encouraged by recent progress made by Channl in the
UK, a market of circa GBP1 billion of revenue, which represents a
major and immediate opportunity. Expanding our Channl product
offering with the addition of new suppliers - namely Primeline in
the US and Ad Products, The Pen Warehouse and Snap Products in the
UK - will increase the attraction of Channl to distributors and
their end user customers.
We are increasingly confident that Channl is a major conduit for
distributors and end users as the market inevitably migrates
transactions online and we look forward to updating shareholders on
future progress.
Peter J Hallett
Executive Chairman
26 September 2017
Consolidated income statement for the six month period ended 30
June 2017
Unaudited Audited Unaudited
30 June 31 December 30 June
2017 2016 2016
GBP'000 GBP'000 GBP'000
Revenue - Continuing Operations 2,972 4,323 3,015
Cost of sales (739) (823) (636)
-------------------------------------- ---------- ---------------- ---------------------
Gross profit 2,233 3,500 2,379
Administrative expenses before
share based payment charges,
amortisation of intangible
assets and exceptional expenses (1,419) (2,935) (1,704)
-------------------------------------- ---------- ---------------- ---------------------
Operating profit before share
based payment charges, amortisation
of intangible assets and
exceptional expenses 814 565 675
Share based payment charges (27) (25) (28)
Amortisation of intangible
assets (161) (401) (143)
Exceptional expenses (131) (66) (94)
-------------------------------------- ---------- ---------------- ---------------------
Total administrative expenses (1,738) (3,427) (1,969)
-------------------------------------- ---------- ---------------- ---------------------
Operating profit 495 73 410
Finance expenses (1) - -
--------------------------------------
Profit before taxation 494 73 410
Taxation - - -
-------------------------------------- ---------- ---------------- ---------------------
Profit attributable to the
equity shareholders of the
Company 494 73 410
-------------------------------------- ---------- ---------------- ---------------------
Loss earnings per ordinary
share attributable to the
equity shareholders of the
Company :
- Basic (pence) 1.05P 0.17p 0.96p
- Diluted (pence) 1.00p 0.15p 0.87p
-------------------------------------- ---------- ---------------- ---------------------
Consolidated statement of changes in equity for the six month
period ended 30 June 2017
Share Share Retained Total
Capital Premium Earnings
GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2016 172 6,254 (5,433) 993
Profit for the period attributable
to equity shareholders - - 410 410
Foreign exchange differences - - 18 18
Total comprehensive income - - 428 428
Transactions with owners
recorded directly in equity:
Share based payment charges - - 28 28
Total transactions with owners - - 28 28
------------------------------------
At 30 June 2016 172 6,254 (4,977) 1,449
Loss for the period attributable
to equity shareholders - - (337) (337)
Foreign exchange differences - - (34) (34)
Total comprehensive income - - (371) (371)
Transactions with owners
recorded directly in equity:
Shares issued for cash 8 197 - 205
Share based payment charges - - (3) (3)
Total transactions with owners 8 197 (3) 202
------------------------------------
At 31 December 2016 180 6,451 (5,351) 1,280
Profit for the period attributable
to equity shareholders - - 494 494
Foreign exchange differences - - 57 57
Total comprehensive income - - 551 551
Transactions with owners
recorded directly in equity:
Shares issued for cash 23 3,059 - 3,082
Preliminary Expenses - (132) - (132)
Share based payment charges - - 27 27
Total transactions with owners 23 2,927 27 2,977
------------------------------------ --------- --------- ---------- ---------
At 30 June 2017 203 9,378 (4,773) 4,808
------------------------------------ --------- --------- ---------- ---------
Consolidated balance sheet as at 30 June 2017
Unaudited Audited Unaudited
30 June 31 December 30 June
2017 2016 2016
GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant & equipment 81 22 32
Intangibles 803 818 990
Goodwill 564 564 564
Deferred tax 426 426 426
------------------------------ ---------- ------------- ----------
1,874 1,830 2,012
Current assets
Inventory 976 - -
Trade and other receivables 847 407 503
Cash and cash equivalents 2,093 741 415
------------------------------ ---------- ------------- ----------
Total current assets 3,916 1,148 918
------------------------------ ---------- ------------- ----------
Total assets 5,790 2,978 2,930
------------------------------ ---------- ------------- ----------
Current liabilities
Trade and other payables (982) (1,698) (1,481)
Total liabilities (982) (1,698) (1,481)
------------------------------ ---------- ------------- ----------
Net assets 4,808 1,280 1,449
------------------------------ ---------- ------------- ----------
Called up share capital 203 180 172
Share premium 9,378 6,451 6,254
Retained earnings (4,773) (5,351) (4,977)
------------------------------ ---------- ------------- ----------
Total equity 4,808 1,280 1,449
------------------------------ ---------- ------------- ----------
Consolidated cash flow statement for the six month period ended
30 June 2017
Unaudited Audited Unaudited
30 June 31 December 30 June
2017 2016 2016
GBP'000 GBP'000 GBP'000
Operating activities
Profit/(loss) for the period 495 73 410
Amortisation of intangible assets 161 401 143
Depreciation 7 26 20
Share based payment charges 27 25 28
------------------------------------------ ---------- ------------- --------------------
Operating cash flow before changes
in working capital 690 525 601
Movement in Inventory (248) - -
Movement in trade and other
receivables (386) 289 193
Movement in trade and other
payables (742) (355) (539)
------------------------------------------ ---------- ------------- --------------------
Operating cash flow from operations (686) 459 255
Interest expenses (1) - -
------------------------------------------ ---------- ------------- --------------------
Net cash flow from operating
activities (687) 459 255
Cash flows from investing activities
Purchase of certain assets and
business undertaking of Ad Products.Com
Limited (761) - -
Purchase of plant and equipment (7) (7) (6)
Purchase of intangible assets (144) (282) (200)
------------------------------------------ ---------- ------------- --------------------
Net cash flow from investing
activities (912) (289) (206)
Financing activities
Shares issued for cash (net
of preliminary expenses) 2,951 205 -
------------------------------------------ ---------- ------------- --------------------
Net cash flow from financing
activities 2,951 205
Net increase/(decrease) in cash
and cash equivalents 1,352 375 49
Cash and cash equivalents at
the beginning of the period 741 366 366
------------------------------------------ ---------- ------------- --------------------
Cash and cash equivalents at
the end of the period 2,093 741 415
------------------------------------------ ---------- ------------- --------------------
Notes to the half yearly financial information
1. Basis of preparation
This consolidated half yearly financial information for the half
year ended 30 June 2017 has been prepared applying the accounting
policies and presentation that were applied in the preparation of
the Group's published consolidated financial statements for the
year ended 31 December 2016. The Group's accounting policies are
based on the recognition and measurement principles of
International Financial Reporting Standards as adopted by the
EU.
The consolidated half yearly report was approved by the Board of
directors on 26 September 2017.
The consolidated financial information contained in the interim
report has not been reviewed or audited and does not constitute
statutory accounts within the meaning of section 434 of the
Companies Act 2006 and does not include all of the information and
disclosures required for complete financial statements.
The financial information relating to the year ended 31 December
2016 is an extract from the latest published financial statements
on which the auditor gave an unmodified report that did not contain
statements under Section 498 (2) or (3) of the Companies Act 2006
and which have been filed with the Registrar of Companies.
2. Accounting policies
The consolidated financial statements in this half-yearly
financial report for the six months ended 30 June 2017 have been
prepared in accordance with the AIM Rules for Companies and on a
basis consistent with the accounting policies and methods of
computation consistent with those set out in the Annual Report and
financial statements for the year ended 31 December 2016, except as
described below. The Group has chosen not to adopt IAS 34 'Interim
Financial Statements' in preparing these interim financial
statements and therefore the Interim financial information is not
in full compliance with International Financial Reporting
Standards.
In preparing the condensed, consolidated financial statements,
management are required to make accounting assumptions and
estimates. The assumptions and estimation methods are consistent
with those applied to the Annual Report and financial statements
for the year ended 31 December 2016. Additionally the principal
risks and uncertainties that may have a material impact on
activities and results of the Group remain materially unchanged
from those described in that Annual Report.
3. Operating Segments
Under IFRS 8 "Operating Segments" the Group has determined that
it has one reportable segment, Technology & Information.
IFRS 8 has been applied to aggregate operating segments on the
grounds of similar economic characteristics. This position will be
monitored as the Group develops.
4. Acquisition of certain assets and business undertaking of Ad Products.com Limited
On 2 June 2017 the Group completed the acquisition of the trade
and certain assets of Adproducts.com Limited, a small UK based
trade supplier of promotional products ("the Acquisition"). Richard
Sowerby, a director of the Group until 30 April 2017 , is a
director of Adproducts.com Limited. These assets were acquired to
help facilitate the launch of Channl to distributors in the UK by
supplementing our UK supply base. The impact of the Acquisition on
the results for the six months ended 30 June 2017 is summarised
below:
Unaudited
30 June
2017
GBP'000
Revenue 319
Cost of sales 176
------------------------- ----------
Gross profit 143
Administrative expenses (96)
------------------------- ----------
Operating profit 47
------------------------- ----------
Book Fair Value Unaudited
Value Adjustments Fair
Of Acquired Value
Assets of Acquired
GBP000 GBP000s Assets
GBP000
Plant & Machinery 31 29 60
Inventory 728 - 728
Accruals - (27) (27)
------------------------------- ------------- ------------- -------------
Total Assets acquired at fair
value 759 2 761
Cash Consideration (761)
------------------------------- ------------- ------------- -------------
5. Basic and diluted earnings per ordinary share
The calculation of earnings per ordinary share is based on the
profit or loss for the period divided by the weighted average
number of equity voting shares in issue.
Unaudited Audited Unaudited
30 June 31 December 30 June
2017 2016 2016
Earnings (GBP'000) 494 73 410
---------- ------------- ----------
Weighted average number of shares
(number '000) 47,216 43,252 42,908
---------- ------------- ----------
Fully diluted weighted average
number of shares (number '000) 49,269 47,252 47,378
---------- ------------- ----------
Basic earnings per ordinary share
(pence) 1.05P 0.17p 0.96p
Diluted earnings per ordinary
share (pence) 1.00P 0.15p 0.87p
---------- ------------- ----------
6. Interim Report
The Interim Report is available to download from the Company's
website at www.altitudeplc.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LFFVVASIEFID
(END) Dow Jones Newswires
September 26, 2017 02:01 ET (06:01 GMT)
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