TIDMCBUY
RNS Number : 6926J
Cloudbuy PLC
21 August 2019
21 August 2019
cloudBuy plc
("cloudBuy" or the "Company")
Interim Results for the six months ended 30 June 2019
cloudBuy plc (AIM: CBUY), the global provider of cloud-based
ecommerce marketplaces and B2B buyer and supplier solutions, today
announces its unaudited interim results for the six months ended 30
June 2019.
Key Points
Operational
-- We have seen an increase in the number of CCG's joining
PHBChoices over the first half and this has accelerated in July and
August with a related increase in the numbers of PHB holders now
using the system
-- We have developed a pipeline of additional eprocurement and
digital prospects assisted by our presence on G-Cloud 11
-- The Company Formations business was successfully sold
resulting in cash receipts of GBP279K. This transaction continues
our strategy of simplification, allowing us to focus on our growth
sectors.
Financial
-- Commentary is based on the Continuing Business which excludes
the results of the Company Formations business for all periods.
-- Revenue of GBP538K was an improvement of 11% (2018: GBP485K),
as a result of an increase in revenue from PHBChoices.
-- Our existing ecommerce and eprocurement customers continue to
produce revenue and provide opportunities for growth, this is
partially offset by the continuing reduction in revenue from legacy
customers.
-- Administrative expenses, excluding share based payments,
decreased by 15% to GBP1,174K (2018: GBP1,374K), as a result of
continuing tight control of costs in the business
-- Operating loss, excluding share based payments was reduced by
28% to GBP652,000 (2018: GBP924K). Including share based payments,
operating loss was reduced by 30%.
-- Net cash outflow from continuing operations including capital
expenditure was reduced to GBP675Km (2018, net cash outflow:
GBP874K), a reduction of 23%.
-- New investment of GBP500,000 from Roberto Sella in March 2019 (2018 GBPnil).
-- Cash and cash equivalents reduced to GBP1,031K at 30 June
2019 (30 June 2018: GBP1,605K, 31 December 2018 GBP791K)
Ronald Duncan, Executive Chairman and CIO of cloudBuy,
commented,
"We have made progress in the first half of the year, with an
increase in core revenue and a continuing focus on cash management
and cost reduction. PHBChoices has contributed to the revenue
increase and revenue from this area is growing. There is evidence
that CCG's are under pressure to deliver more PHB's and
increasingly they are reaching out to PHBChoices for a
solution.
Our existing customer base continues to provide consistent
revenue and we have a number of opportunities for additional
revenue growth from this group. In Canada the success of York
District School Board's roll out of the eprocurement system has
resulted in a second school board taking up the solution, as well
as interest from other boards. There are 70 boards in Ontario that
can use the solution under the terms of the procurement, and we are
engaging with a Canadian reseller to pursue these
opportunities.
Following the publication of G-Cloud 11 we have generated a
number of enquiries about our solutions from a range of different
UK public sector prospects, this has produced an early stage
pipeline of opportunities. The opportunities cover eprocurement as
well as digital citizen engagement specifically for Local
Government organisations.
We received further investment from Roberto Sella in March 2019,
and we appreciate his continuing commitment to the business."
For further information, please contact:
cloudBuy plc
David Gibbon, CFO & COO Tel: 0118 963 7000
Arden Partners plc - NOMAD and broker Tel: 020 7614 5900
Paul Shackleton/ Daniel Gee-Summons - Corporate
Finance
Simon Johnson - Corporate Broking
About cloudBuy plc
cloudBuy, (AIM: CBUY), provides cloud solutions for buyers and
sellers - and brings them together to trade securely and ethically
via an increasing number of public e-marketplaces and private
purchasing portals around the world, powered by cloudBuy ecommerce
technology.
cloudBuy solutions for buyers help B2B purchasers understand and
control their spend, to reduce costs and increase value. Our
cloudSell solutions enable sellers of all sizes, from start-ups to
corporates, reach new customers and grow their business.
cloudBuy's technology platform powers web sites, public
marketplaces and private purchasing portals that enable all types
of online interactions and relationships including, citizen and
business to government; consumer to business; and business to
business.
For more information visit: www.cloudbuy.com
CHAIRMAN'S STATEMENT
Revenue
We continue to focus on our key projects.
PHBChoices
This remains the main growth driver in the business. During the
first half of 2019, there has been a demonstrable increase in
interest from CCG's as the requirement for personalisation in care
has been driven by NHS England. The NHS Long Term Plan was
published in January and this strengthened the commitment to
personalisation, Personal Health Budgets are a key method of
increasing personalisation through patient choice.
The PHBChoices product has continued to be enhanced. To date, we
are not aware of a competing product which shows the same benefits
as PHBChoices including cost savings, greater visibility of spend,
financial control and patient data security.
United Overseas Bank in Singapore
This project in Singapore continues to generate SaaS licence
fees and revenue from paid enhancements to the system. A Chinese
language version is due to be completed in the second half of
2019.
Ontario School Boards
Our project with the York Region District School Board in
Ontario is live and producing ongoing SaaS licence revenue. Revenue
from transaction fees is small but growing. The project with
Waterloo Catholic District School Board has commenced and is
expected to go live in early 2020. There is the prospect for
further school Boards through our new sales partner.
HealthShare New South Wales
This project in Australia has successfully completed its 3 year
contract period. The contract has not been renewed so the second
half will include lower revenue with no revenue in 2020.
University of Exeter
The system is live with ongoing SaaS licence fees and paid
enhancements.
Other ecommerce customers
Our long term ecommerce customers continue to invest in cloudBuy
products with our largest customer generating increased revenue in
the first 7 months of the year.
Non-Strategic Legacy Contracts
Continuing the medium term trend, a number of our legacy UK
public sector clients chose not to renew their contracts in H1
2019.
Financial Results
Commentary is based on the Continuing Business which excludes
the results of the Company Formations business for all periods.
Revenue showed an increase of 11% with the reduction in legacy
contract revenue being more than offset by an increase from
PHBChoices.
As a result of the increase in revenue and a reduction in
administrative expenses, operating loss, excluding share based
payments was reduced by 28%.
Our operating cash outflow showed an improvement of 23%.
Operating cash outflow was broadly in line with the operating
loss.
Outlook
We expect revenue from PHBChoices to continue to grow in the
second half and in 2020. Although at an early stage in the sales
cycle, we are also seeing increasing interest in our product suite
from UK public sector bodies where we can show demonstrable
benefits based on existing and past customer projects.
It is expected that operating losses and cash outflows will
continue to reduce during the remainder of 2019.
Ronald Duncan
Executive Chairman and CIO
20 August 2019
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
Notes 6 months 6 months Year ended
to to
30 June 30 June 31 Dec
2019 2018 2018
(as restated) (as restated)
GBP'000 GBP'000 GBP'000
Revenue from continuing operations 2 538 485 791
Cost of sales (26) (35) (59)
------------------------------------ ----- ---------- ---------------- ---------------
Gross Profit 512 450 732
Administrative expenses (1,174) (1,374) (2,426)
Share based payments (17) (54) (72)
------------------------------------ ----- ---------- ---------------- ---------------
Operating loss (679) (978) (1,767)
Finance Income -interest received 0 0 1
Finance costs (296) (289) (601)
------------------------------------ ----- ---------- ---------------- ---------------
Loss on ordinary activity
before taxation (975) (1,267) (2,366)
Income tax credit - - 124
------------------------------------ ----- ---------- ---------------- ---------------
Loss for the period from continuing
operations (975) (1,267) (2,242)
Profit for the period from
discontinued Operations 4 291 20 49
------------------------------------ ----- ---------- ---------------- ---------------
Loss for the period (684) (1,247) (2,193)
Other comprehensive income - - -
- item which will or may be
reclassified to profit and
loss
Exchange (loss)/gain arising
on translation of foreign
operations (2) 141 115
------------------------------------ ----- ---------- ---------------- ---------------
Total Comprehensive Income (686) (1,106) (2,077)
------------------------------------ ----- ---------- ---------------- ---------------
Loss per share - basic and
diluted from continuing operations 0.7p 1.0p 1.7p
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED)
Notes 30 June 30 June 31 Dec
2019 2018 2018
---------------------------------------------------- -----
GBP'000 GBP'000 GBP'000
---------------------------------------------------- ----- ------------------- --------------- ---------------
Assets
Non-current assets 3 7 6
Other intangible assets 25 45 34
Property, plant and equipment
---------------------------------------------------- -----
28 53 40
---------------------------------------------------- ----- ------------------- ---------------
Current Assets
Trade and other receivables 401 408 365
Taxes recoverable - - 124
Cash and cash equivalents 1,031 1,605 791
---------------------------------------------------- -----
1,432 2,013 1,280
---------------------------------------------------- ----- ------------------- ---------------
Total assets 1,460 2,066 1,320
---------------------------------------------------- ----- ------------------- --------------- ---------------
Liabilities
Current liabilities
Trade and other payables (1,628) (1,220) (1,319)
----- ------------------- --------------- ---------------
(1,628) (1,220) (1,319)
----- ------------------- --------------- ---------------
Non-current liabilities
Financial liabilities - borrowings 5 (6,333) (5,739) (5,833)
Total liabilities (7,961) (6,959) (7,152)
---------------------------------------------------- -----
Total net (liabilities)/assets (6,501) (4,893) (5,832)
---------------------------------------------------- ----- ------------------- ---------------
Shareholder's equity
Called up share capital 1,304 1,304 1,304
Share premium account 5,534 5,534 5,534
Other reserve 2,235 2,220 2,235
Share based payment reserve 1,241 1,205 1,224
Currency translation (81) (53) (79)
Accumulated losses (16,734) (15,104) (16,050)
---------------------------------------------------- -----
Total equity attributable to equity shareholders of
the parent (6,501) (4,893) (5,832)
---------------------------------------------------- ----- ------------------- ---------------
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
6 months to 6 months to Year ended
30 June 30 June 31 Dec
2019 2018 2018
(as restated) (as restated)
GBP'000 GBP'000 GBP'000
Cash flow from operating activities
Loss for the period (excluding Taxation) (684) (1,247) (2,193)
Adjustments for:
Finance income/cost 295 289 599
Depreciation of property, plant and equipment 11 19 30
Amortisation of other Intangible assets 3 2 4
Share based payments 17 54 72
Changes in working capital
Trade and other receivables (48) 55 (26)
Trade and other payables 25 (163) (265)
Currency translation (2) 141 115
Profit from discontinued operations (291) (19) (49)
--------------------------------------------------------- ------------- ---------------- ----------------
Net cash used by continuing operations (674) (870) (1,713)
Tax (paid)/received 124 - -
Operating cashflow from Discontinued operations 12 19 49
--------------------------------------------------------- ------------- ---------------- ----------------
Net cash used in operating activities (538) (851) (1,664)
--------------------------------------------------------- ------------- ---------------- ----------------
Cash flows from investing activities
Purchase of other intangible assets - - (5)
Purchase of property, plant and equipment (1) (4) -
Sale of discontinued business 279 - -
--------------------------------------------------------- ------------- ---------------- ----------------
Net cash used in investing activities 278 (5) (5)
--------------------------------------------------------- ------------- ---------------- ----------------
Cash flows from financing activities
Issue of loan notes 500 - -
--------------------------------------------------------- ------------- ---------------- ----------------
Net cash generated from financing 500 - -
--------------------------------------------------------- ------------- ---------------- ----------------
Net increase/(decrease) in cash and cash equivalents 240 (855) (1,669)
Cash and cash equivalents at beginning of period 791 2,460 2,460
Cash and cash equivalents at end of period 1,031 1,605 791
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(UNAUDITED)
Share Share Other Share Currency Accumulated Share-holder's
Capital premium reserve based translation losses equity
payment
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ --------- --------- --------- --------- ------------- ------------ ---------------
At 01 January 2018 1,304 5,534 2,215 1,151 (194) (13,858) (3,847)
Share issued in the - - - - - - -
period
Convertible loan
notes issued in the
period - - 5 - - - 5
Share based payments - - - 54 - - 54
Exchange in the period - - - - 141 - 141
Retained loss for
the period - - - - - (1,247) (1,247)
At 30 June 2018 1,304 5,534 2,220 1,205 (53) (15,105) (4,893)
======================== ========= ========= ========= ========= ============= ============ ===============
Share issued in the - - - - - - -
period
Convertible loan
notes issued in the
period - - 15 - - - 15
Share based payments - - - 19 - - 19
Exchange in the period - - - - (26) - (26)
Retained loss for
the period - - - - - (945) (945)
------------------------
At 31 December 2018 1,304 5,534 2,235 1,224 (79) (16,050) (5,832)
======================== ========= ========= ========= ========= ============= ============ ===============
Share issued in the - - - - - - -
period
Convertible loan - - - - - - -
notes issued in the
period
Share based payments - - - 17 - - 17
Exchange in the period - - - - (2) - (2)
Retained loss for
the period - - - - - (684) (684)
------------------------ --------- --------- --------- --------- ------------- ------------ ---------------
At 30 June 2019 1,304 5,534 2,235 1,241 (81) (16,734) (6,501)
------------------------ --------- --------- --------- --------- ------------- ------------ ---------------
NOTES TO THE FINANCIAL STATEMENTS
1. Basis of preparation
These interim financial statements have been prepared in
accordance with the accounting policies set out in the Annual
Report and Accounts for the year ended 31 December 2018 and the
interpretation of those accounting standards underlying the
accounting policies. IAS 34, Interim Financial Reporting, has not
been applied. The interim financial statements have been issued in
accordance with the AIM Rules of the London Stock Exchange and are
unaudited. The financial information set out does not constitute
statutory accounts for the purposes of section 434 of the Companies
Act 2006. The auditors' report on the statutory accounts for the
year ended 31 December 2018 which have been filed with the
Registrar of Companies was unqualified, did not draw attention to
any matters by way of emphasis, and did not contain a statement
under 498(2) or 498(3) of the Companies Act 2006.
The preparation of financial statements requires estimates and
assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Although the estimates are based on management's best
knowledge of the amounts, events or actions, actual results may
differ from those estimates.
These financial statements separate out the company formations
business as a discontinued operation for all three periods covered,
this has resulted in a restatement of the first half and fully year
2018 results. The details of the discontinued operation are
contained in note 3.
This announcement which was approved by the board of cloudBuy
plc on 20 August 2019 will be published on the company's website at
www.cloudbuy.com.
2. Revenue
Below is an analysis of revenue recognised and gross profit
attributable between reportable segments
6 months 6 months to Year ended
to
30 June 30 June 31 Dec
2019 2018 2018
(as restated) (as restated)
GBP'000 GBP'000 GBP'000
Web and ecommerce services 519 465 751
Coding International Limited 18 20 40
538 485 791
--------- --------------
Gross Profit
Web and ecommerce services 493 431 692
Coding International Limited 18 20 40
512 450 732
----------------------------- --------- --------------
3. Loss per share
The calculations for loss per share are based on the weighted
average number of shares in issue during the period: 130,432,664 (6
months to 30 June 2018: 130,432,664; year ended 31 December 2018:
130,432,664).
The share options and warrants are not dilutive as they would
not increase the loss per share in the year.
The basic and diluted loss per share calculated on the
unadjusted earnings is 0.7p (6 months to 30 June 2018: 1.0p; year
ended 31 December 2018: 1.7p).
4. Discontinued operations
On 29 March 2019 the Company disposed of its Company Formations
business, the business was sold for a total of GBP279k in cash,
resulting in a gain of 275k.
The trading of Company formations business in the relevant
period is as follow:
30 June 30 June
2019 GBP 2018 31 Dec 2018
'000 GBP'000 GBP'000
------------------ ------------------
Revenue 74 166 318
Cost of sales (27) (73) (139)
Gross profit 46 93 179
Administrative Expenses (30) (73) (130)
Share based payments - - -
Operating loss 16 20 49
Finance Income -interest received - - -
Finance costs - - -
Profit from discontinued Operations Before
tax 16 20 49
Income tax expenses - - -
Profit for the period 16 20 49
Gain on Disposal 275 - -
Profit for the period from discontinued
operations 291 20 49
---------------------------------------------- ------------------ ------------------
All of the assets and liabilities of the business have been
disposed of in this transaction.
Cash flows generated by the Company Formations business for the
reporting periods under review until its disposal were as
follows:
30 June 2019 30 June 31 Dec 2018
GBP'000 2018 GBP'000
GBP'000
Operating activities 12 19 49
Investing activities 279 - -
--------------------------------------- ------------- --------- ------------
Cashflow from Discontinued Operations 291 19 49
--------------------------------------- ------------- --------- ------------
Cash flows from investing activities relate solely to the
proceeds from the sale of Company Formations which was received in
cash in March 2019.
Calculation of gain on disposal GBP'000
----------------------------------------------------- --------
Assets
Non-current assets -
Goodwill -
Property, plant and equipment -
----------------------------------------------------- --------
Total non-current assets -
----------------------------------------------------- --------
Current assets -
Trade and other receivables 4
Cash and cash equivalents -
Total current assets 4
Liabilities -
Current liabilities -
Trade and other payables -
Total liabilities -
Provisions - lease incentive -
----------------------------------------------------- --------
Net assets 4
----------------------------------------------------- --------
Less: net assets attributable to minority interest -
Net Assets Disposed 4
Total Consideration received in cash 279
Net cash Received 279
Gain on Disposal 275
===================================================== ========
5. Convertible Loan Stock and Loan Stock
The principal terms of the loan instruments are as follows:
"Existing" Loan Notes
Instrument (the Interest bearing loan note instrument constituting 4,172,562
"Instrument") GBP1.00 secured convertible loan notes and 1,577,438 GBP1.00
secured non-convertible loan notes. Total GBP5,750,000
-------------------- ---------------------------------------------------------------
Amount DRAWN GBP5,750,000
-------------------- ---------------------------------------------------------------
Term 10 year term with an early repayment option on 5th anniversary
-------------------- ---------------------------------------------------------------
Drawdown Minimum of GBP3,274,300 in first draw down then in increments
of a minimum of GBP1 million in size
-------------------- ---------------------------------------------------------------
Interest 2.33%
-------------------- ---------------------------------------------------------------
Borrower Covenants cloudBuy plc cannot issue any instrument that is pari passu
or senior to the Instrument and/or the Loan Notes without
the consent of the holder of the Loan Notes
-------------------- ---------------------------------------------------------------
Lender Covenants None
-------------------- ---------------------------------------------------------------
Conversion price 6.5 pence (conversion at any time in full or in part at
the election of loan note holder) or 1 penny (in the event
that the outstanding amount of the Convertible Loan Notes
(including principal and interest) has not been repaid
or converted by the Final Redemption Date)
-------------------- ---------------------------------------------------------------
Security The Loan Notes will be secured, by way of a secondary charge
over the Company's assets, with the charge ranking behind
the Company's clearing bank facility provider from time
to time where the priority charge over the Company assets
will be limited to GBP300,000 in value
-------------------- ---------------------------------------------------------------
Future Investment Mr. Roberto Sella to have the right, but not the obligation,
to participate in future equity fundraising by the Company
at 80% of the price of other investors up to the end of
the Term
-------------------- ---------------------------------------------------------------
"New" (December 2017) Loan Notes, figures are for the amount
issued at 30 June 2019, a further potential GBP1,200,000 is
available under the facility.
Instrument (the Interest bearing loan note instrument constituting up to
"Instrument") 3,400,000 GBP1.00 secured convertible loan notes
-------------------- ---------------------------------------------------------------
Amount Drawn GBP2,200,000
-------------------- ---------------------------------------------------------------
Term 10 year term with an early repayment option on 5th anniversary
-------------------- ---------------------------------------------------------------
Interest 2.33%
-------------------- ---------------------------------------------------------------
Borrower Covenants cloudBuy plc cannot issue any instrument that is pari passu
or senior to the Instrument and/or the Loan Notes without
the consent of the holder of the Loan Notes
-------------------- ---------------------------------------------------------------
Lender Covenants None
-------------------- ---------------------------------------------------------------
Conversion price 2.0 pence (conversion at any time in full or in part at
the election of loan note holder) or 1 penny (in the event
that the outstanding amount of the Convertible Loan Notes
(including principal and interest) has not been repaid
or converted by the Final Redemption Date)
-------------------- ---------------------------------------------------------------
Security The Loan Notes will be secured, by way of a secondary charge
over the Company's assets, with the charge ranking behind
the Company's clearing bank facility provider from time
to time where the priority charge over the Company assets
will be limited to GBP300,000 in value
-------------------- ---------------------------------------------------------------
6. Disclosure of Concert Party Shareholdings
The following details are required to be disclosed in this
report to comply with the conditions of The Takeover Code. Mike
Pasternak who is a director of cloudBuy is deemed to be acting in
concert with Roberto Sella for the purposes of the Takeover Code.
The holdings of Roberto Sella and Mike Pasternak at 30 June 2019 as
follows:
Shareholder Interest in issued share Percentage interest in Total interest on the Percentage total
capital on 30 June 2019 issued share capital on basis that the further assuming no other
30 June 2019 GBP1,200,000 New CLS ordinary shares are
available under the issued
facility
are issued in the
future and all CLS
including PIK notes are
converted immediately
before
their final redemption
date (10 years after
issue)
Roberto Sella 14,700,000 11.27% 301,204,965 72.24%
Mike Pasternak 2,150,000 1.65% 2,150,000 0.52%
Total 16,850,000 12.92% 303,354,965 72.76%
------------------------ ------------------------ -----------------------
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR MMGZRVGLGLZM
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