TIDMWAND
RNS Number : 0590G
WANdisco Plc
03 August 2016
3 August 2016
WANdisco plc
Unaudited results for the six months ended 30 June 2016
Operational and strategic highlights
Big Data
* 5 new customer wins, including our largest ever Big
Data contract, bringing cumulative customer wins to
31 (31 December 2015: 26)
* 3 scale-up contract expansions or renewals with
existing customers
* Sales bookings up 88% on 2015 H1
* Live customers increased to 14 (31 December 2015: 6)
* New IBM OEM sales partnership and launch of first
IBM-branded WANdisco product; initial sales
opportunities progressing well
Application Lifecycle Management ("ALM")
* Sales bookings up 12% on 2015 H1
* Several large contracts secured with key new ALM
customers, bringing an increase in average contract
size
* Increased profit (excluding central overheads)
Financial highlights
-- Sales bookings 36% ahead of last year at $5.9m (2015 H1: $4.4m)
-- Revenue $5.6m (2015 H1: $5.7m), not yet reflecting recent improvement in sales bookings
-- Cash overheads(1) reduced to $12.9m (2015 H1: $18.8m)
-- Adjusted EBITDA(2) loss narrowed to $4.5m (2015 H1: $9.2m loss)
-- Loss after tax narrowed to $5.4m (2015 H1: $17.8m loss), including $4.4m currency gain
-- Net debt $2.8m at 30 June 2016 (31 December 2015: $2.6m net cash)
-- New equity funding, after the period end, of $14.3m (net of fees)
(1) Operating costs, excluding cost of sales and including capitalised
product development costs
(2) EBITDA loss excluding equity-settled share-based payment, capitalised
product development costs, acquisition-related items and exceptional
items
David Richards, WANdisco Chief Executive, comments:
"Our product has evolved to enable data in the cloud, and we
have seen increasing evidence of our strategic opportunity, with a
range of partners, to be a key part of the infrastructure powering
cloud and hybrid cloud data platforms. Our ability to access the
most advanced global Big Data customers has been significantly
advanced by our new IBM OEM sales agreement and IBM's launch of its
first embedded WANdisco product.
We have continued to deploy our Fusion Big Data product with
large and sophisticated customers. We have seen growth in our
customer base, accelerating go-lives and more customers scaling
up.
In our ALM business, I am pleased that the increase in sales
bookings in the second half of last year have been maintained into
this year, although I see room for improvement.
With reduced costs and new equity funding secured, we expect
during the second half of this year to accelerate our progress
towards cash flow break-even."
Notes
An audio webcast recording of the analyst presentation will be
available on the company website after the event.
All Group announcements and news can be found at
http://www.wandisco.com
For further information please contact:
via FTI Consulting
WANdisco plc LLP
David Richards, Chief Executive Officer
Paul Harrison, Chief Financial Officer
Phil Branston, VP Corporate Development
& Investor Relations
FTI Consulting +44 (0)203 727 1000
Matt Dixon / Dwight Burden / Rob Mindell
Investec (Joint Broker and NOMAD) +44 (0)207 597 4000
Christopher Baird / Dominic Emery
UBS (Joint Broker)
Rahul Luthra / Sandip Dhillon +44 (0)207 567 8000
About WANdisco plc
WANdisco (LSE: WAND) is a provider of enterprise-ready, non-stop
software solutions that enable globally distributed organizations
to meet today's data challenges of secure storage, scalability and
continuous availability across on-premise, cloud and hybrid
environments. WANdisco's products are differentiated by the
company's patented, active-active data replication technology,
serving crucial continuous availability requirements, including
Hadoop Big Data and Application Lifecycle Management, including
Apache Subversion and Git. Fortune Global 1000 companies, including
Juniper Networks, Motorola, Intel and Halliburton, rely on WANdisco
for performance, reliability, security and availability. For
additional information, please visit www.wandisco.com.
BUSINESS REVIEW
WANdisco has demonstrated a strengthening market position in Big
Data and Cloud Computing, evidenced by further customer wins, more
live operational implementations of WANdisco software, and by
accelerating partnership activities, most notably with IBM.
In our longer-established ALM business, we have benefited from a
balanced mix of sales between new customers, renewing customers and
existing customers expanding their contracts. Our sales reflect a
mix of industries in which our customers operate, and a mix of
software development environments.
We continue to look for opportunities to reduce costs. Having
removed significant costs in 2015, enabled both by the simplicity
and openness of the Fusion product and by focusing more on partner
sales channels as opposed to direct sales, we have further reduced
costs this year.
Big Data
Data storage and analytics environments are increasingly
diversified between open source Hadoop and other new platforms,
including cloud infrastructure, provided by leading global
technology vendors such as Amazon, IBM, Microsoft, Oracle and
Google. We have increased our focus on these key partners, bringing
each of them a critical component that completes an
enterprise-grade data platform. Our Fusion product replicates data
to the cloud, meeting customers' requirements to migrate data onto
new platforms without interruption to data processing, to back up
data, and to synchronise active data between different locations
and operations.
We added 5 new customers in financial services, government,
consumer products and telecommunications. Our cumulative contract
wins have reached a total of 31. Their business requirements
combine regulatory compliance, customer analysis and storage cost
efficiencies. Sales bookings were 88% higher than the prior year
period and included our largest Big Data subscription to date.
On 28 April 2016 WANdisco announced a new OEM sales partnership
with IBM, under which Fusion will be incorporated into IBM's data
and analytics platform, with WANdisco receiving royalties once
sales start to flow. IBM has funded our work to integrate with its
platform. IBM has since launched Fusion as IBM BigReplicate and
approximately 5,000 IBM sales employees are incentivised on selling
the product. Initial sales opportunities, including cloud migration
use cases, are progressing well.
All of our Big Data customers have intentions to scale up
significantly their WANdisco solutions as they take more data into
mission-critical applications. After a number of go-lives in the
first half, 14 of our Big Data customers are now in live
production, putting us in a position to expand and extend their
subscriptions for ongoing and greater data usage. In the first half
we secured three scaled-up or renewed contracts with existing
customers.
ALM
We continue to see strong potential in the source code
management segment of the ALM market on which we focus. Customers
continue to adopt open source software for collaborative and
co-ordinated software development at scale. As software development
continues to become more geographically and organisationally
distributed, our replication product helps meet the challenges of
control and efficiency, both amongst software vendors and in
industry more generally.
We have continued to focus on new customers in a range of
industries, as well as up-selling and renewals for our installed
base of over 200 customers. We added some large new customers -
some of them establishing common software development platforms for
the first time, others moving away from legacy vendors' platforms.
Our renewing and expanding customers are consolidating their
operations, modernising their approaches to resilience and
authorisation, and increasing their users and locations.
Sales bookings in this period were 12% higher than the prior
year period, but we see room for improvement and we are seeking
further growth.
Directorate change
As previously announced on 10 June 2016, Paul Harrison, CFO, is
leaving the Company at the end of September 2016. The process for
securing Paul's replacement is underway. Further announcements will
be made as and when appropriate.
Brexit
The UK's decision to leave the European Union has created
economic uncertainty. Whilst the majority of our revenues originate
outside of the European Union and there was no discernable impact
on our first half results, we continue to evaluate potential future
effects on our business.
FINANCIAL REVIEW
Revenue for the six months ended 30 June 2016 was $5.6m (2015
H1: $5.7m). Sales bookings, from initial and expanded contracts, of
$5.9m were significantly higher than in the prior year period (2015
H1: $4.4m). This growth will have a positive impact on revenue
during the rest of this year, as deferred revenue from the new
bookings is released into revenue.
Deferred revenue (including unbilled receivables) from sales
booked in the current and prior year periods, and not yet
recognised as revenue, was $16.3m at 30 June 2016 (31 December
2015: $16.2m).
Strong cost control, with cash overheads materially below the
prior year, resulted in the adjusted EBITDA loss narrowing to $4.5m
(2015: $9.2m).
Big Data
Sales bookings were $2.6m, a significant increase on the prior
year period (2015 H1: $1.4m). Sales were from a mixture of new,
renewing and expanding customers, demonstrating the emergence of a
balanced software licence revenue model as our customer base
expands and existing customers make greater use of our product.
Sales bookings included the funding from IBM for the completion
of integration between Fusion and IBM's Big Data products.
Big Data revenues were $1.4m, showing significant growth on the
prior year period (2015 H1: $0.8m).
Our implementations have continued to accelerate, with 14 of our
Big Data customers now live. Some of these live customers have
already expanded their subscription contracts and we expect others
to do so over time.
ALM
Sales bookings improved on the prior year period, to $3.3m (2015
H1: $3.0m). ALM revenue was $4.2m (2015 H1: $4.9m), impacted, as
previously reported, by the weakness in sales bookings during the
middle of last year. Improved sales bookings will benefit revenue
during the rest of this year.
New customers during the period came from a range of business
sectors including finance, application development,
telecommunications networks and manufacturing. Add-ons for existing
customers have included a large user expansion at a global bank.
Renewals contributed a substantial proportion of sales bookings,
including significant renewals from an engineering company and a
global IT services business.
With its operating scale, product maturity and revenue base, the
business, having made its first profit in 2015 (before central
overheads), increased its profit for the first half of 2016.
Operating costs
We entered 2016 with a substantially reduced operating cost
base, following cost actions taken in 2015. Cost reductions have
continued to be applied this year. Cash overheads of $12.9m
(excluding cost of sales and including capitalised product
development costs) were below the prior year period (2015 H1:
$18.8m). Reductions were achieved principally from more efficient
product development and from an increasing focus on partner sales
channels to complement direct sales.
Included in cash overheads is capitalised product development
expenditure on new product features, which reduced to $3.2m (2015
H1: $4.3m). A progressive rearchitecting of the Fusion product has
enabled more efficient product development, delivering frequent
product releases using fewer resources. Our headcount was 125 as at
30 June 2016 (31 December 2015: 143). Headcount reductions in the
year resulted from efficiencies in sales and marketing, and in
product engineering.
Profit and loss
The adjusted EBITDA loss for the period (excluding
equity-settled share-based payment, capitalised product development
costs, acquisition-related items and exceptional items) was $4.5m
(2015 H1: $9.2m loss).
The loss after tax for the period narrowed to $5.4m (2015 H1:
$17.8m), as a result of the reduced loss from operations and
exceptional finance income of $4.4m arising from the retranslation
of intercompany balances at 30 June 2016, reflecting the
post-Brexit depreciation of sterling against the US dollar.
Balance sheet and cash flow
Trade and other receivables at 30 June 2016 were $4.3m (31
December 2015: $6.7m). This includes $2.4m of trade receivables (31
December 2015: $3.5m) and $1.9m related to non-trade receivables
(31 December 2015: $3.2m). In addition to this, receivables not
billed by the end of the period were $7.2m (31 December 2015:
$6.5m), the increase reflecting new multi-year contracts.
Net debt was $2.8m at 30 June 2016 (31 December 2015: $2.6m net
cash). Our net consumption of cash was lower than in the prior year
period, as a result of reductions in cash overheads. We retain a
revolving credit facility with HSBC Bank plc, the first drawings on
which were made during the first half.
After the period end, we raised $14.3m (net of fees) from an
issue of new equity to existing and new shareholders, announced on
10 June 2016, and approved by shareholders in an Extraordinary
General Meeting on 5 July 2016. Certain of the newly issued shares
are subject to some restrictions on resale to US retail investors,
for a 12-month period from issue.
With strong cash collection, benefiting from subscription
payments in advance of revenue recognition, and additional cost
reductions so far in 2016, we have progressed further towards cash
flow break-even.
OUTLOOK
Our product has evolved to enable data in the cloud, and we have
seen increasing evidence of our strategic opportunity, with a range
of partners, to be a key part of the infrastructure powering cloud
and hybrid cloud data platforms. Our ability to access the most
advanced global Big Data customers has been significantly advanced
by our new IBM OEM sales agreement and IBM's launch of its first
embedded WANdisco product.
We have continued to deploy our Fusion Big Data product with
large and sophisticated customers. We have seen growth in our
customer base, accelerating go-lives and more customers scaling
up.
In our ALM business, I am pleased that the increase in sales
bookings in the second half of last year have been maintained into
this year, although I see room for improvement.
With reduced costs and new equity funding secured, we expect
during the second half of this year to accelerate our progress
towards cash flow break-even.
Condensed consolidated statement of profit and loss and other
comprehensive income
for the six months ended 30 June 2016
Six months ended Six months ended Year ended
30 June 2016 30 June 2015 31 December 2015
(Unaudited) (Unaudited) (Audited)
Pre- Exceptional Pre- Exceptional Pre- Exceptional
exceptional items Total exceptional items Total exceptional items Total
Continuing
operations Notes $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
--------------- ----- ----------- ----------- -------- ----------- ----------- -------- ------------ ----------- --------
Revenue 3 5,637 - 5,637 5,669 - 5,669 10,994 - 10,994
Cost of sales (411) - (411) (387) - (387) (749) - (749)
--------------- ----- ----------- ----------- -------- ----------- ----------- -------- ------------ ----------- --------
Gross profit 5,226 - 5,226 5,282 - 5,282 10,245 - 10,245
Operating
expenses 4 (14,919) (32) (14,951) (22,384) (711) (23,095) (40,160) (614) (40,774)
--------------- ----- ----------- ----------- -------- ----------- ----------- -------- ------------ ----------- --------
Loss from
operations 5 (9,693) (32) (9,725) (17,102) (711) (17,813) (29,915) (614) (30,529)
Finance income 6 1 4,412 4,413 519 - 519 59 - 59
Finance costs 6 (104) - (104) (439) - (439) (565) - (565)
--------------- ----- ----------- ----------- -------- ----------- ----------- -------- ------------ ----------- --------
Net finance
income/(costs) 6 (103) 4,412 4,309 80 - 80 (506) - (506)
--------------- ----- ----------- ----------- -------- ----------- ----------- -------- ------------ ----------- --------
Loss before
tax (9,796) 4,380 (5,416) (17,022) (711) (17,733) (30,421) (614) (31,035)
Income tax 7 (33) - (33) (72) - (72) 1,129 - 1,129
--------------- ----- ----------- ----------- -------- ----------- ----------- -------- ------------ ----------- --------
Loss for the
period (9,829) 4,380 (5,449) (17,094) (711) (17,805) (29,292) (614) (29,906)
--------------- ----- ----------- ----------- -------- =========== =========== ======== ============ =========== ========
Other comprehensive income
Items that are or may be reclassified to profit or loss:
Foreign operations
- foreign currency
translation
differences 223 (4,412) (4,189) (111) - (111) 55 - 55
---------------------- ----------- ----------- -------- ----------- ----------- -------- ------------ ----------- --------
Other comprehensive
income for the
period, net of
tax 223 (4,412) (4,189) (111) - (111) 55 - 55
---------------------- ----------- ----------- -------- ----------- ----------- -------- ------------ ----------- --------
Total comprehensive
income for the
period (9,606) (32) (9,638) (17,205) (711) (17,916) (29,237) (614) (29,851)
====================== =========== =========== ======== =========== =========== ======== ============ =========== ========
Loss per share
Basic and
diluted 8 $0.18 $0.64 $1.04
=============== ===== =========== =========== ======== =========== =========== ======== ============ =========== ========
The notes on pages 10 to 17 form an integral part of this
condensed consolidated half yearly financial report.
Condensed consolidated balance sheet
as at 30 June 2016
Re-presented
(Note
2)
30 June 30 June 31 December
2016 2015 2015
(Unaudited) (Unaudited) (Audited)
Notes $'000 $'000 $'000
------------------------------ ----- ------------ ------------ -----------
Assets
Intangible assets 9 7,445 9,338 8,583
Property, plant and equipment 176 326 230
Non-current assets 7,621 9,664 8,813
------------------------------ ----- ------------ ------------ -----------
Trade and other receivables 10 4,312 4,407 6,728
Cash and cash equivalents 1,054 15,205 2,555
------------------------------ ----- ------------ ------------ -----------
Current assets 5,366 19,612 9,283
------------------------------ ----- ------------ ------------ -----------
Total assets 12,987 29,276 18,096
------------------------------ ----- ------------ ------------ -----------
Liabilities
Borrowings - 3(rd) party debt 11 (3,827) - -
Trade and other payables (3,241) (3,349) (2,714)
Deferred income 12 (4,336) (5,024) (6,060)
Deferred government grant (25) (35) (28)
Current tax liabilities - - -
------------------------------ ----- ------------ ------------ -----------
Current liabilities (11,429) (8,408) (8,802)
------------------------------ ----- ------------ ------------ -----------
Deferred income 12 (4,690) (4,359) (3,697)
Deferred tax liabilities (4) (5) (5)
------------------------------ ----- ------------ ------------ -----------
Non-current liabilities (4,694) (4,364) (3,702)
------------------------------ ----- ------------ ------------ -----------
Total liabilities (16,123) (12,772) (12,504)
------------------------------ ----- ------------ ------------ -----------
Net (liabilities)/assets (3,136) 16,504 5,592
============================== ===== ============ ============ ===========
Equity
Share capital 4,723 4,655 4,667
Share premium 81,823 81,964 81,974
Translation reserve (4,436) (413) (247)
Merger reserve 1,247 1,247 1,247
Retained earnings (86,493) (70,949) (82,049)
------------------------------ ----- ------------ ------------ -----------
Total equity (3,136) 16,504 5,592
============================== ===== ============ ============ ===========
The notes on pages 10 to 17 form an integral part of this
condensed consolidated half yearly financial report.
Condensed consolidated statement of changes in equity
for the six months ended 30 June 2016
Share Share Translation Merger Retained Total
capital premium reserve reserve earnings equity
Six months ended 30 June
2016 (Unaudited) $'000 $'000 $'000 $'000 $'000 $'000
---------------------------------- -------- -------- ----------- -------- --------- --------
Balance at 1 January 2016 4,667 81,974 (247) 1,247 (82,049) 5,592
---------------------------------- -------- -------- ----------- -------- --------- --------
Total comprehensive income
for the period
Loss for the period - - - - (5,449) (5,449)
Other comprehensive income - - (4,189) - - (4,189)
---------------------------------- -------- -------- ----------- -------- --------- --------
Total comprehensive income
for the period - - (4,189) - (5,449) (9,638)
---------------------------------- -------- -------- ----------- -------- --------- --------
Transactions with owners
of the Company
Contributions and distributions
Equity-settled share-based
payment - - - - 844 844
Share issue cost reclassification - (161) - - 161 -
Share options exercised 56 10 - - - 66
Total transactions with owners
of the Company 56 (151) - - 1,005 910
---------------------------------- -------- -------- ----------- -------- --------- --------
Balance at 30 June 2016 4,723 81,823 (4,436) 1,247 (86,493) (3,136)
================================== ======== ======== =========== ======== ========= ========
Share Share Translation Merger Retained Total
capital premium reserve reserve earnings Equity
Six months ended 30 June
2015 (Unaudited) $'000 $'000 $'000 $'000 $'000 $'000
---------------------------------- -------- -------- ----------- -------- --------- --------
Balance at 1 January 2015 3,879 56,587 (302) 1,247 (56,814) 4,597
---------------------------------- -------- -------- ----------- -------- --------- --------
Total comprehensive income
for the period
Loss for the period - - - - (17,805) (17,805)
Other comprehensive income - - (111) - - (111)
---------------------------------- -------- -------- ----------- -------- --------- --------
Total comprehensive income
for the period - - (111) - (17,805) (17,916)
---------------------------------- -------- -------- ----------- -------- --------- --------
Transactions with owners
of the Company
Contributions and distributions
Equity-settled share-based
payment - - - - 3,670 3,670
Proceeds from share placing 737 25,341 - - - 26,078
Share options exercised 39 36 - - - 75
Total transactions with owners
of the Company 776 25,377 - - 3,670 29,823
---------------------------------- -------- -------- ----------- -------- --------- --------
Balance at 30 June 2015 4,655 81,964 (413) 1,247 (70,949) 16,504
================================== ======== ======== =========== ======== ========= ========
The notes on pages 10 to 17 form an integral part of this
condensed consolidated half yearly financial report.
Condensed consolidated statement of cash flows
for the six months ended 30 June 2016
Six months Six months
ended ended
30 June 30 June Year ended
31 December
2016 2015 2015
(Unaudited) (Unaudited) (Audited)
$'000 $'000 $'000
----------------------------------------------------- --- ------------ ------------ -------------
Cash flows from operating activities
Loss for the period (5,449) (17,805) (29,906)
Adjustments for:
* Depreciation of property, plant and equipment 96 166 270
* Amortisation of intangible assets 4,291 4,759 9,600
* Net finance costs 102 23 133
* Income tax 33 72 (1,129)
* Foreign exchange (4,040) (127) 42
* Equity-settled share-based payment 844 3,670 4,671
---------------------------------------------------------- ------------ ------------ -------------
(4,123) (9,242) (16,319)
--------------------------------------------------------- ------------ ------------ -------------
Changes in:
* Trade and other receivables 1,594 823 275
* Trade and other payables 557 154 (432)
* Deferred income (731) (1,318) (1,507)
* Deferred government grant (1) (46) (49)
Net working capital change 1,419 (387) (1,713)
---------------------------------------------------------- ------------ ------------ -------------
Cash used in operating activities (2,704) (9,629) (18,032)
Interest paid (46) (13) (192)
Income tax received 719 513 552
---------------------------------------------------------- ------------ ------------ -------------
Net cash used in operating activities (2,031) (9,129) (17,672)
---------------------------------------------------------- ------------ ------------ -------------
Cash flows from investing activities
Purchase of property, plant and equipment
and computer software (42) (83) (95)
Development expenditure (3,153) (4,282) (8,369)
Interest received 1 73 59
---------------------------------------------------------- ------------ ------------ -------------
Net cash used in investing activities (3,194) (4,292) (8,405)
---------------------------------------------------------- ------------ ------------ -------------
Cash flows from financing activities
Net proceeds from share issues (95) 26,153 26,175
Draw-down of 3(rd) party debt 3,827 - -
Payment of finance lease liabilities - (8) (8)
---------------------------------------------------------- ------------ ------------ -------------
Net cash from financing activities 3,732 26,145 26,167
---------------------------------------------------------- ------------ ------------ -------------
Net (decrease)/increase in cash and cash
equivalents (1,493) 12,724 90
Cash and cash equivalents at the start of
the period 2,555 2,481 2,481
Effect of movements in exchange rates on
cash and cash equivalents (8) - (16)
---------------------------------------------------------- ------------ ------------ -------------
Cash and cash equivalents at the end of
the period 1,054 15,205 2,555
========================================================== ============ ============ =============
The notes on pages 10 to 17 form an integral part of this
condensed consolidated half yearly financial report.
Notes to the condensed consolidated half yearly financial
statements
for the six months ended 30 June 2016
1. Reporting entity
WANdisco plc (the "Company") is a public limited company
incorporated and domiciled in Jersey. The Company's ordinary shares
are traded on AIM. These condensed consolidated half yearly
financial statements ("Half yearly financial statements") as at and
for the six months ended 30 June 2016 comprise the Company and its
subsidiaries (together referred to as the "Group"). The Group is
primarily involved in the development and provision of global
collaboration software.
2. Basis of preparation
Basis of accounting
These half yearly financial statements have been prepared in
accordance with AIM rules for Companies and IAS 34 "Half yearly
Financial Reporting" as adopted by the European Union ("EU"). They
do not include all the information required for a complete set of
International Financial Reporting Standards ("IFRS") financial
statements. However, selected explanatory notes are included to
explain events and transactions that are significant to an
understanding of the changes in the Group's financial position and
performance since the last annual consolidated financial statements
as at and for the year ended 31 December 2015.
These half yearly financial statements were authorised for issue
by the Company's Board of Directors on 22 July 2016.
The annual financial statements of the Group are prepared in
accordance with IFRSs as endorsed by the EU, IFRIC ("IFRS
Interpretations Committee) interpretations, under the historical
cost accounting convention, and with those parts of Jersey Law
(1991) applicable to companies under IFRS. The half yearly
financial statements have, other than in respect of the matters
referred to below, 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 2015. Accordingly, these half yearly financial
statements should be used in conjunction with the Group's published
annual financial statements for the year ended 31 December
2015.
There are no new standards or amendments to standards that are
effective for the first time for the financial year beginning 1
January 2016, that have had a material impact on the half yearly
financial statements.
Going concern
As at 30 June 2016 the Group had net liabilities of $3.1m (30
June 2015: net assets $16.5m; 31 December 2015: net assets $5.6m)
as set out in the Condensed consolidated balance sheet above. After
the period end, the Company raised $14.3m (net of fees) from an
issue of new equity to existing and new shareholders, announced on
10 June 2016, and approved by shareholders in an Extraordinary
General Meeting on 5 July 2016. Subsequent to this new funding, the
Group is in a net cash and net asset position. The Directors have
prepared detailed forecasts of the Group's performance. As a
consequence, the Directors believe that WANdisco plc and the Group
are well placed to manage their business risks successfully despite
the current uncertain economic outlook. After making enquiries the
Directors have a reasonable expectation that WANdisco plc and the
Group have sufficient working capital available for its present
requirements that is for the next twelve months from the date of
this report. Accordingly, they continue to adopt the going concern
basis in preparing the half yearly financial statements.
Functional and presentational currency
The half yearly financial statements are presented in US
dollars, which is also the presentational currency of the Group.
Billings to the Group's customers during the period were all made
in US dollars by WANdisco, Inc. with certain costs being incurred
by WANdisco International Limited in sterling and WANdisco, Pty Ltd
in Australian dollars. All financial information has been rounded
to the nearest thousand US dollars unless otherwise stated.
Use of judgements and estimates
The preparation of financial information in conformity with
adopted IFRSs requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and
the reported amounts of assets, liabilities, income and expenses.
Actual results may differ from these estimates.
The significant judgements made by management in applying the
Group's accounting policies and the key sources of estimation
uncertainty were the same as those that applied to the Group's
consolidated financial statements as at and for the year ended 31
December 2015.
Prior period re-presentation
The Balance sheet at 30 June 2015 has been re-presented to
offset unbilled receivables (previously included in trade and other
receivables) against the deferred revenue balance. This had $nil
impact on net assets. The re-presentation was made to improve the
clarity of our statutory reporting. A reconciliation to the gross
position is shown in note 10.
3. Segmental analysis
Operating segments
The Directors consider there to be one operating segment, being
that of development and sale of licences for software and related
maintenance.
Geographical segments
The Group recognises revenue in three geographical regions based
on the location of customers, as set out in the following
table:
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2016 2015 2015
(Unaudited) (Unaudited) (Audited)
Revenue $'000 $'000 $'000
------------------ ------------ ------------ ------------
North America 3,720 4,821 7,255
Europe 1,529 648 2,983
Rest of the world 388 200 756
------------------ ------------ ------------ ------------
5,637 5,669 10,994
================== ============ ============ ============
Management makes no allocation of costs, assets or liabilities
between these segments since all trading activities are operated as
a single business unit.
The Group has no customers representing individually over 10% of
revenue (2015: Nil).
The Group's core patented technology, Distributed Co-ordinated
Engine "DConE", enables the replication of data. The Group has
developed software based on this technology which is applied into
two key markets being the Big Data and Source Code Management
("ALM") markets:
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2016 2015 2015
(Unaudited) (Unaudited) (Audited)
Revenue $'000 $'000 $'000
--------- ------------ ------------ ------------
ALM 4,231 4,859 9,158
Big Data 1,406 810 1,836
--------- ------------ ------------ ------------
5,637 5,669 10,994
========= ============ ============ ============
4. Exceptional items
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2016 2015 2015
(Unaudited) (Unaudited) (Audited)
Exceptional items comprise the following: Notes $'000 $'000 $'000
------------------------------------------ ----- ------------ ------------ ------------
Exchange gain on intercompany balances 6 4,412 - -
Equity-settled share-based payment charge
in relation to acquisitions
* OhmData, Inc. 13 - (474) (241)
* AltoStor, Inc. 13 - (150) (249)
* TortoiseSVN.net 13 (32) (87) (124)
------------------------------------------ ----- ------------ ------------ ------------
(32) (711) (614)
------------------------------------------ ----- ------------ ------------ ------------
Total exceptional items 4,380 (711) (614)
========================================== ===== ============ ============ ============
The exceptional gain arose on Sterling denominated intercompany
balances. These balances were retranslated at the closing exchange
rate at 30 June 2016 which was 1.34 a 10% reduction compared to the
rate of 1.48 at 31 December 2015. Sterling to US$ exchange rates
declined following the Brexit vote on 23 June 2016. Due to the size
and nature of the exchange gain, it has been included as an
exceptional item.
5. Reconciliation of loss from operations to adjusted earnings
before interest, taxation, depreciation and amortisation ("Adjusted
EBITDA")
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2016 2015 2015
(Unaudited) (Unaudited) (Audited)
Reconciliation of loss from operations to Adjusted Notes
EBITDA: $'000 $'000 $'000
--------------------------------------------------- ----- ------------ ------------ ------------
Loss from operations (9,725) (17,813) (30,529)
Adjusted for:
Amortisation and depreciation 4,387 4,925 9,870
Exceptional items within operating expenses 4 32 711 614
--------------------------------------------------- ----- ------------ ------------ ------------
EBITDA before exceptional items (5,306) (12,177) (20,045)
Equity-settled share-based payment (excluding
exceptional item) 13 812 2,959 4,057
--------------------------------------------------- ----- ------------ ------------ ------------
Adjusted EBITDA before exceptional items (4,494) (9,218) (15,988)
Development expenditure capitalised 9 (3,153) (4,282) (8,369)
--------------------------------------------------- ----- ------------ ------------ ------------
Adjusted EBITDA before exceptional items including
development expenditure (7,647) (13,500) (24,357)
=================================================== ===== ============ ============ ============
6. Net finance income/(costs)
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2016 2015 2015
Notes (Unaudited) (Unaudited) (Audited)
$'000 $'000 $'000
--------------------------------------- ----- ------------ ------------ ------------
Interest receivable - bank 1 73 59
Exchange gain on intercompany balances 4 4,412 446 -
--------------------------------------- ----- ------------ ------------ ------------
Finance income 4,413 519 59
--------------------------------------- ----- ------------ ------------ ------------
Unwind of discount on pledged shares - (16) (16)
Exchange loss on intercompany balances (1) (343) (373)
Interest payable on bank borrowings (46) (12) (48)
Bank charges - (1) -
Loan amortisation costs (57) (67) (128)
--------------------------------------- ----- ------------ ------------ ------------
Finance costs (104) (439) (565)
--------------------------------------- ----- ------------ ------------ ------------
Net finance income/(costs) 4,309 80 (506)
======================================= ===== ============ ============ ============
7. Income tax
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2016 2015 2015
(Unaudited) (Unaudited) (Audited)
$'000 $'000 $'000
--------------------------- ------------ ------------ ------------
Current tax expense
Current period - - 739
Adjustment for prior years (33) (72) 390
--------------------------- ------------ ------------ ------------
Total tax (charge)/credit (33) (72) 1,129
=========================== ============ ============ ============
8. Loss per share
Basic loss per share
Basic loss per share is calculated based on the loss
attributable to ordinary shareholders and the weighted average
number of ordinary shares outstanding:
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2016 2015 2015
(Unaudited) (Unaudited) (Audited)
$'000 $'000 $'000
---------------------------------------------------------- ------------ ------------ ------------
Loss for the period attributable to ordinary shareholders 5,449 17,805 29,906
========================================================== ============ ============ ============
Number Number Number
of shares of shares of shares
Weighted average number of ordinary shares '000 '000 '000
---------------------------------------------------------- ------------ ------------ ------------
At the start of the period 28,783 24,435 24,018
Effect of shares issued in the period 996 3,604 4,765
---------------------------------------------------------- ------------ ------------ ------------
Weighted average number of ordinary shares during
the period 29,779 28,039 28,783
========================================================== ============ ============ ============
Basic loss per share $0.18 $0.64 $1.04
===================== ===== ===== =====
Adjusted loss per share
Adjusted loss per share is calculated based on the loss
attributable to ordinary shareholders before exceptional items,
acquisition-related items and the cost of equity-settled
share-based payment, and the weighted average number of ordinary
shares outstanding:
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2016 2015 2015
(Unaudited) (Unaudited) (Audited)
Adjusted loss for the period: Notes $'000 $'000 $'000
---------------------------------------------- ----- ------------ ------------ ------------
Loss for the period attributable to ordinary
shareholders 5,449 17,805 29,906
Add back:
Exceptional items 4 4,380 (711) (614)
Acquisition-related items - - (16)
Equity-settled share-based payment (excluding
exceptional item) 13 (812) (2,959) (4,057)
---------------------------------------------- ----- ------------ ------------ ------------
Adjusted basic loss for the period 9,017 14,135 25,219
============================================== ===== ============ ============ ============
Adjusted loss per share $0.30 $0.50 $0.88
======================== ===== ===== =====
Diluted loss per share
Due to the Group having losses in all periods presented, the
fully diluted loss per share for disclosure purposes, as shown in
the Condensed consolidated statement of profit and loss and other
comprehensive income, is the same as for the basic loss per
share.
9. Intangible assets
Other
intangible Development Computer
assets costs software Total
At 30 June 2016 (Unaudited) $'000 $'000 $'000 $'000
--------------------------------- ----------- ----------- --------- --------
Cost
At 1 January 2016 3,154 31,156 189 34,499
Additions - own work capitalised - 3,153 - 3,153
At 30 June 2016 3,154 34,309 189 37,652
---------------------------------- ----------- ----------- --------- --------
Amortisation
At 1 January 2016 (2,804) (22,923) (189) (25,916)
Amortisation charge for the
period (169) (4,122) - (4,291)
At 30 June 2016 (2,973) (27,045) (189) (30,207)
---------------------------------- ----------- ----------- --------- --------
Net book value - At 30 June
2016 181 7,264 - 7,445
================================== =========== =========== ========= ========
At 30 June 2015 (Unaudited)
--------------------------------- ----------- ----------- --------- --------
Cost
At 1 January 2015 3,154 22,787 1,189 27,130
Additions - own work capitalised - 4,282 - 4,282
Disposals - - (1,000) (1,000)
Effect of movement in exchange
rates - - (20) (20)
At 30 June 2015 3,154 27,069 169 30,392
---------------------------------- ----------- ----------- --------- --------
Amortisation
At 1 January 2015 (1,795) (14,375) (1,146) (17,316)
Amortisation charge for the
period (549) (4,199) (11) (4,759)
Disposals - - 1,000 1,000
Effect of movement in exchange
rates - - 21 21
At 30 June 2015 (2,344) (18,574) (136) (21,054)
---------------------------------- ----------- ----------- --------- --------
Net book value - At 30 June
2015 810 8,495 33 9,338
================================== =========== =========== ========= ========
The carrying amount of the intangible assets is allocated across
cash-generating units ("CGUs"). A CGU is defined as the smallest
group of assets that generate cash inflows from continuing use that
are largely independent of the cash inflows of other assets or
groups thereof. The recoverable amount of the CGUs are determined
using value in use ("VIU") calculations. As at 30 June 2016 the
Group had one CGU, the DConE CGU, which represents the Group's
patented DConE replication technology, forming the basis of
products for both the ALM and Big Data markets, including the new
Fusion platform that was launched during 2015.
Other intangible assets arose as part of the acquisitions of
OhmData, Inc. in June 2014 and AltoStor, Inc. in November 2012. The
intangibles arising as part of these acquisitions are allocated to
the DConE CGU. The recoverable amount of the DConE CGU has been
calculated on a VIU basis at both 30 June 2016 and 31 December
2015. These calculations use cash flow projections based on
financial forecasts, which anticipate growth in the Group's
installed base along with new customer growth along with stable
cost base, and appropriate long-term growth rates. To prepare VIU
calculations, the cash flow forecasts are discounted back to
present value using a pre-tax discount rate of 10% (2015: 10%) and
a terminal value growth rate of 2% from 2021. The Directors have
reviewed the recoverable amount of the CGU and do not consider
there to be any indication of impairment.
Development costs are predominantly capitalised staff costs
associated with new products and services. Development costs are
allocated to the DConE CGU, the recoverable amount of which has
been determined on a VIU basis as described above.
In February 2015 WANdisco International Limited sold software to
SyntevoGmbH for consideration of EUR1. This software became fully
amortised during the year ended 31 December 2014 so there was no
material profit/(loss) on disposal.
The amortisation charge on intangible assets is included in
operating expenses in the Condensed consolidated statement of
profit and loss and other comprehensive income.
10. Trade and other receivables
Re-presented
(Note
2)
30 June 30 June
2016 2015
31 December
2015
(Unaudited) (Unaudited) (Audited)
Due within a year: Notes $'000 $'000 $'000
----------------------------------------------------------- ------ ------------ ------------ -----------
Trade receivables 2,392 2,714 3,538
Other receivables
* Unbilled receivables ($3.0m is due in more than one
year (2015: $2.8m)) 7,247 8,568 6,482
* Other receivables 565 526 1,061
Less: Unbilled receivables deferred ($3.0m is
due in more than one year (2015: $2.8m)) 12 (7,247) (8,568) (6,482)
------------------------------------------------------------ ----- ------------ ------------ -----------
Total other receivables 565 526 1,061
------------------------------------------------------------ ----- ------------ ------------ -----------
Corporation tax 879 469 1,631
Prepayments 476 698 498
------------------------------------------------------------ ----- ------------ ------------ -----------
Total trade and other receivables 4,312 4,407 6,728
============================================================ ===== ============ ============ ===========
11. Borrowings
30 June 30 June
2016 2015
31 December
2015
(Unaudited) (Unaudited) (Audited)
$'000 $'000 $'000
----------------------- --- ------------ ------------ -----------
Bank loans - unsecured 3,827 - -
Total borrowings 3,827 - -
============================ ============ ============ ===========
The bank loans are drawings under the multi-currency revolving
credit facility of $10m (2015: $10m), expiring on 30 June 2017,
which consists both of $750,000 (2015: nil) and $3,077,000
(GBP2,300,000) (2015: nil) tranches.
Following the equity raise announced on 10 June 2016 all
drawings under the revolving credit facility were repaid.
12. Deferred income
Deferred income represents contracted sales for which services
to customers will be provided in future periods.
Re-presented
(Note
2)
30 June 30 June
2016 2015
31 December
2015
(Unaudited) (Unaudited) (Audited)
Deferred income which falls due: Notes $'000 $'000 $'000
------------------------------------------------- ----- ------------ ------------ -----------
Within a year 4,336 5,024 6,060
In more than a year 4,690 4,359 3,697
Unbilled receivables deferred ($3.0m is due
in more than one year (2015: $2.8m)) 7,247 8,568 6,482
------------------------------------------------- ----- ------------ ------------ -----------
Deferred income (including unbilled receivables) 16,273 17,951 16,239
Less: Unbilled receivables deferred 10 (7,247) (8,568) (6,482)
------------------------------------------------- ----- ------------ ------------ -----------
Total deferred income 9,026 9,383 9,757
================================================= ===== ============ ============ ===========
13. Share-based payment
WANdisco plc operates share option plans for qualifying
employees of the Group. Options in the plans are settled in equity
in the Company and are normally subject to a vesting schedule but
not conditional on any performance criteria being achieved.
The terms and conditions of the share option grants are detailed
in the Group annual financial statements for the year ended 31
December 2015.
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2016 2015 2015
(Unaudited) (Unaudited) (Audited)
Analysis of equity-settled share-based payment Notes
charge: $'000 $'000 $'000
------------------------------------------------ ----- ------------ ------------ ------------
OhmData, Inc. - 474 241
AltoStor, Inc. - 150 249
TortoiseSVN.net 32 87 124
------------------------------------------------ ----- ------------ ------------ ------------
Total equity-settled share-based payment charge
in relation to acquisitions 4 32 711 614
Non-exceptional equity-settled share-based
payment charge 5 812 2,959 4,057
------------------------------------------------ ----- ------------ ------------ ------------
Total equity-settled share-based payment charge 844 3,670 4,671
================================================ ===== ============ ============ ============
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2016 2015 2015
(Unaudited) (Unaudited) (Audited)
Number of restricted shares - 273,729 41,990
============================ ============ ============ ============
As part of the acquisitions of OhmData, Inc. in June 2014,
AltoStor, Inc. in November 2012 and TortoiseSVN.net community
website in June 2013, restricted shares were issued to the former
owners of the business for OhmData, Inc. and AltoStor, Inc. and the
lead developer of the website for TortoiseSVN.net community
website. These shares were treated as contingent payments and have
been accounted for under IFRS 2 "Share-based Payment" rather than
as part of the acquisition consideration under IFRS 3 "Business
Combinations".
Summary of share options outstanding
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2016 2015 2015
(Unaudited) (Unaudited) (Audited)
Number of share options outstanding: Number Number Number
------------------------------------- ------------ ------------ ------------
Balance at the start of the period 4,437,995 4,301,667 4,301,667
Granted 460,000 690,555 1,550,927
Forfeited (362,782) (486,773) (1,086,309)
Exercised (408,139) (247,905) (328,290)
------------------------------------- ------------ ------------ ------------
Balance at the end of the period 4,127,074 4,257,544 4,437,995
------------------------------------- ------------ ------------ ------------
Exercisable at the end of the period 2,182,796 1,502,271 1,435,100
------------------------------------- ------------ ------------ ------------
Vested at the end of the period 2,182,796 1,645,074 1,856,870
===================================== ============ ============ ============
Weighted average exercise price for: $ $ $
------------------------------------- ----- ----- -----
Shares granted 0.65 0.93 0.69
Shares forfeited 5.30 7.90 6.75
Options exercised 0.16 0.19 0.19
------------------------------------- ----- ----- -----
Exercise price in the range:
From 0.14 0.16 0.15
To 20.39 18.48 18.19
===================================== ===== ===== =====
Years Years Years
-------------------------------------------- ----- ----- -----
Weighted average contractual life remaining 6.2 6.1 6.2
============================================ ===== ===== =====
13. Share-based payment (continued)
The fair value of each option grant is estimated on the date of
grant using the Black-Scholes option-pricing model with the
following weighted average assumptions:
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2016 2015 2015
Fair value assumptions: (Unaudited) (Unaudited) (Audited)
----------------------------------------------- ------------ ------------ ------------
Dividend yield 0.00% 0.00% 0.00%
Risk-free interest rate 1.16% 1.71% 1.53%
Stock price volatility 30% 30% 30%
Expected life (years) 3.5 3.5 3.8
Weighted average fair value of options granted
during the period $1.88 $3.73 $2.76
=============================================== ============ ============ ============
- The dividend yield is based on the Company's forecast dividend
rate and the current market price of the underlying common stock at
the date of grant.
- Expected life in years is determined from the average of the
time between the date of grant and the date on which the options
lapse.
- Expected volatility is based on the historical volatility of
shares of listed companies with a similar profile to the
Company.
- The risk-free interest rate is based on the treasury bond
rates for the expected life of the option.
14. Contingent liabilities
The Group had no contingent liabilities at 30 June 2016 (30 June
2015: None, 31 December 2015: None).
15. Post-balance sheet events
After the period end, the Company raised $14.3m (net of fees)
from an issue of new equity to existing and new shareholders,
announced on 10 June 2016, and approved by shareholders in an
Extraordinary General Meeting on 5 July 2016. Subsequent to this
new funding, the Group is in a net cash and net asset position.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR MMGGRGZKGVZZ
(END) Dow Jones Newswires
August 03, 2016 02:01 ET (06:01 GMT)
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