TIDMARTA
RNS Number : 9949I
Artilium PLC
27 March 2018
27 March 2018
Artilium plc
("Artilium" or the "Company" or the "Group")
Half yearly results for the six months ended 31 December
2017
Artilium plc (LSE/AIM: ARTA), the AIM quoted provider of
innovative telecommunication software and solutions, announces its
unaudited half yearly results for the six months ended 31 December
2017.
Financial Highlights
-- Revenue for the six months to 31 December 2017 was EUR 5.5
million (2016: EUR 5.1 million), an increase of 7.8%
-- Adjusted EBITDA of EUR 0.6 million (2016: EUR 0.1 million)
-- Record results reported and Artilium is upbeat on full year forecasts
Operational Highlights
-- Several new MVNOs activated and new large customers won on cloud PBX
-- Successful integration of Wbase and Digiweb, acquired in 2017, into the Group
-- Livecom integration into Comsys creating increased cross selling across the Group
-- Appointment of Chief Financial Officer, Rupert Hutton, to the Board on 1 July 2017
-- Entered into a strategic partnership and share exchange with
Pareteum Corporation (NYSE: TEUM) to jointly pursue new and
developed markets, accelerate growth and market share
-- First contract signed with Chinese MVNO through the Pareteum partnership
-- New office opened in Germany where strong demand is seen for
the Group's fixed line mobile and data telecom based software
solutions
-- IoT fuelling the increase in demand for Artilium's products and services
Post Period End
-- Acquisition of Interactive Digital Media GmbH (IDM), a German
based cloud communication company, with integration proceeding
according to plan
Commenting on the results and outlook, Jan-Paul Menke,
Non-Executive Chairman of Artilium said:
"Artilium has made considerable progress in the last six months
with positive developments across our key financial metrics. We
have achieved sales growth and strengthened interest in our core
and expanding business offerings. The Group's strategic
partnerships, such as the one with Pareteum Corporation, are
bearing fruit.
"The telecommunications market is increasingly moving towards
innovative and expanded software products and services and Artilium
is now establishing itself as a leading provider of these services.
Our integrated offering makes us an attractive business partner on
a global scale.
"The new financial year has started well and we look forward to
updating the market on our continued progress in due course."
For further information please contact:
Artilium PLC +32 (0) 5023 0300
Bart Weijermars - Chief Executive
Officer
finnCap Ltd
Jonny Franklin-Adams / Scott
Mathieson (corporate finance) +44 (0) 207 220
Camille Gochez (corporate broking) 0500
+44 (0) 207 466
Buchanan 5000
Chris Lane / Jamie Hooper /
Catriona Flint
About Artilium
Artilium is a demonstrated leader in the development of next
generation communication technologies. Artilium's strategy focuses
on supporting its customers to successfully grow their business by
providing flexible, cost effective and innovative solutions.
Artilium's innovation-driven strategy empowers telecom operators
around the globe to face the tremendous challenges ahead. We
combine next-generation technology with traditional telecom
environments to create exciting new business opportunities for our
customers. This ensures that our customers are able to keep up with
rapidly evolving market demands while simultaneously growing their
businesses.
ARTA(R) is the real-time Authentication, Authorization and
Accounting (AAA) software that brings a full suite of new
functionalities to telecom Operators and virtual Operators. Thanks
to ARTA(R) value-added services portfolio, including for instance
AAA of voice, text and data services, VoIP, 3G and 4G compliance,
mobile payments and location-based services, our partners are more
than ready to meet future customer needs.
Today, multiple renowned national and international
telecommunication companies rely on Artilium to deliver voice, text
and data services to about 1.5 million end users every day.
Artilium's "Pay-As-You-Grow" model allows us to scale our
solutions to the exact needs of our customers. As a latest
innovation, Artilium offers its product suite from the Cloud as a
PAAS (Platform As A Service), yielding ARTA's scalability,
flexibility and proven stability.
Artilium PLC is a publicly listed software company on the London
Stock Exchange (LSE/AIM: ARTA).
Forward Looking Statements
This report contains certain "forward looking" statements and
information relating to the Company that are based on the beliefs
of the Company's management as well as assumptions made by and
information currently available to the Company's management. When
used in this report, the words "anticipate", "believe", "estimate",
"expect", and "intend" and words or phrases of similar import, as
they relate to the Company or its subsidiaries or Company
management, are intended to identify forward-looking statements.
Such statements reflect the current risks, uncertainties and
assumptions related to certain factors including, without
limitation, competitive factors, general economic conditions,
customer relations, relationships with vendors, borrowing
arrangements, interest rates, foreign exchange rates, litigation,
governmental regulation and supervision, seasonality, product
introductions and acceptance, technological change, changes in
industry practices, one-time events and other factors described
herein and in other announcements made by the Company. Based upon
changing conditions, should any one or more of these risks or
uncertainties materialise, or should any underlying assumptions
prove incorrect, actual results may vary materially from those
described herein as anticipated, believed, estimated, expected or
intended. The Company does not intend to update these
forward-looking statements.
Chief Executive's Statement
Introduction
We have made strong progress during the first six months of the
current financial year. The delivery of increasing volumes of new
software, including IoT platforms and data delivery portals, is
building a healthy order book from both new and existing customers.
The Group's international prospects for our products and services
are geographically diverse and growing which gives us much
confidence in our ability to expand our customer base.
Financial results
Reported revenue for the six months to 31 December 2017 of EUR
5.5 million (2016: EUR 5.1 million) was generated primarily from
maintenance and professional services rendered to existing
customers and by United Telecom from fixed calling, broadband and
mobile services. The Group generated a gross profit of EUR 4.3
million or 78.9 per cent. of reported revenue (2016: EUR 3.8
million or 74.3 per cent. of reported revenue) and generated
adjusted EBITDA of EUR 0.6 million (2016: EUR 0.1 million).
The Group reported a net loss after tax of EUR 0.4 million
(2016: EUR 0.9 million), after charging depreciation and
amortisation on historic acquisitions of EUR0.8 million.
Business overview
In October 2017, Artilium signed an agreement and share exchange
with Pareteum Corporation, a NYSE quoted Software-as-a-Service
provider. Under the agreement both parties are developing new joint
products and services, experiencing enhanced sales coverage,
increasing speed to market and gaining access to greater knowledge
and resources, forming a significant competitive advantage in the
fast-growing IT telecoms market. The agreement with Pareteum is
focused on mature markets but has also enhanced Artilium's
prospects in high growth and traditionally underserved developing
markets.
Artilium is pleased to announce that Pareteum has signed its
first contract in China. Artilium is enabling the new customer's
China-based subscribers to connect and transact on their mobile
devices anywhere in the world. Pareteum is powering this new
customer to expand its subscriber revenues through global
connectivity and data, without the need for investment in
infrastructure or software. Fully integrated cloud-based product
sets are continuing to enable the Artilium philosophy of connecting
any device, anywhere, on any network.
At United Telecom ("United"), the Group's Belgian telecoms
service provider operating in fixed and mobile telecom, several new
MVNOs were activated and new large enterprise customers were won on
the cloud PBX platform. The Digiweb customers, which we acquired in
May 2017, have been successfully transferred to the United Telecom
brand, and have added revenues from July 2017. United now benefits
from a much broader customer base to cross sell into the growing
enterprise market.
At Comsys, our specialist interactive telephony services
business, performance was solid and we have also seen increasing
interest in our Livecom products and services from customers around
the world. The integration of Livecom into Comsys has significantly
increased the appeal of these products and services and, with
further integration of the business, cross-selling within the
existing customer base is increasing and expected to continue to do
so. The Group can now offer telco customers and potential customers
with a multi-channel call centre solution, and through these
synergies we can offer clients the full range of services, making
Artilium more appealing to its growing customer base and
positioning us well for future growth.
The telecommunications market continues to innovate and evolve,
and the Group's growing presence as a leading integrated provider
with cross selling capabilities is benefiting from the evolving
market opportunities.
I would like to thank all employees for their hard work through
the period and to our shareholders for their trust in the
management team as we continue to build momentum and add further
value for our customers and shareholders alike.
Post Period End and Current Trading
The start of 2018 calendar year has been very positive, with
Artilium selling an IoT platform that has been developed for
Telenet, our largest customer. Under this agreement, Artilium will
sell products and services within Telenet's customer base which
should increase our sales potential for the whole Group.
Our new office in Germany will enable Artilium to further expand
into the significant and growing German market, where sales will
initially be achieved through IT resellers and systems integrators
to our business customers. Our first enterprise customers have been
signed up and are now on the Artilium platform in Germany.
Artilium's expansion into Germany was underpinned this calendar
year by the acquisition of Interactive Digital Media GmbH ("IDM"),
a German-based cloud communication company. This deal is expected
to increase Artilium's Group revenue by 45 per cent. for the
current financial year. The integration of IDM is progressing very
well and Artilium is already benefiting from access to IDM's large
customer base. The Board is optimistic about Artilium's prospect
for the rest of the year and has confidence that Artilium will
build on the very encouraging start made to this calendar year.
Historically the Group has presented its results by business
line (ARTA, United Telecom, Comsys). However, following the
transformational acquisition of IDM, going forward the directors
consider that presenting its operations in terms of telecoms
services and enterprise services better represents the Group's
business by highlighting more clearly the growth characteristics of
each offering and how each it is positioned in the market.
Bart Weijermars
27 March 2018
CONDENSED CONSOLIDATED INCOME STATEMENT
6 months 6 months Year
ended ended Ended
31 December 31 December 30 June
2017 2016 2017
Unaudited Unaudited Audited
Notes EUR'000 EUR'000 EUR'000
--------------------------------------- ------------ ------------ --------
Continuing Operations
Revenue 5,481 5,090 10,452
Cost of sales (1,201) (1,310) (2,716)
---------------------------------------- ------------ ------------ --------
Gross profit 4,280 3,780 7,737
Depreciation and amortization (816) (818) (1,768)
---------------------------------------- ------------ ------------ --------
Administrative expenses
before redundancy costs (3,722) (3,633) (7,413)
Redundancy costs (63) (92) (227)
---------------------------------------- ------------ ------------ --------
Administrative expenses (3,785) (3,732) (7,640)
Operating loss (321) (770) (1,671)
Finance costs (68) (176) (324)
---------------------------------------- ------------ ------------ --------
Loss before tax (389) (946) (1,995)
Tax credit 120 88 235
------------ ------------ --------
Loss for the period from
continuing operations
attributable to owners
of the Company (269) (858) (1,760)
---------------------------------------- ------------ ------------ --------
Earnings per share from
continuing operations
(cents) (0.08) (0.29) (0.58)
---------------------------------------- ------------ ------------ --------
A key performance indicator for the Group is adjusted EBITDA.
This was EUR 0.6 million for the six months to December 2017 (2016:
EUR 0.1 million). The reconciliation of adjusted EBITDA to the
income statement is disclosed below.
Reconciling table operating result-adjusted EBITDA
6 months 6 months Year
ended ended ended
31 December 31 December 30 June
2017 2016 2017
Unaudited Unaudited Audited
EUR'000 EUR'000 EUR'000
---------------------------- ------------ ------------ --------
Operating loss (321) (770) (1,671)
Redundancy costs 63 92 227
Depreciation, amortization
and impairments 816 818 1,824
---------------------------- ------------ ------------ --------
Adjusted EBITDA 558 140 380
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 months 6 months Year
ended ended ended
31 December 31 December 30 June
2017 2016 2017
Unaudited Unaudited Audited
EUR'000 EUR'000 EUR'000
------------------------------------- ------------ ------------ --------
Loss for the period (269) (858) (1,760)
Other comprehensive income:
Items that may be subsequently
reclassified to profit or
loss
Exchange differences on translation
of foreign operations (24) 51 187
Change in fair value of available 2,064 - -
for sale financial assets
Total comprehensive income
for the period attributable
to owners of the Company 1,771 (807) (1,573)
-------------------------------------- ------------ ------------ --------
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
6 months 6 months Year
ended ended ended
31 December 31 December 30 June
2017 2016 2017
Unaudited Unaudited Audited
Notes EUR'000 EUR'000 EUR'000
------------------------------- ---------- ------------ ------------ --------
Non-current assets
Goodwill 2 17,127 17,127 17,127
Other intangible assets 3,125 4,297 3,812
Property, plant and equipment 455 451 533
Available for sale financial 5,498 - -
assets
Other receivables - - 1,000
26,205 21,875 22,472
------------------------------- ---------- ------------ ------------ --------
Current assets
Inventories 112 106 84
Trade and other receivables 3,938 4,073 2,434
Cash and cash equivalents 2,916 2,301 2,863
6,966 6,480 5,381
------------------------------- ---------- ------------ ------------ --------
Total assets 33,170 28,355 27,853
------------------------------- ---------- ------------ ------------ --------
Non-current liabilities
Deferred tax liabilities 262 658 385
Bank loans 20 - 20
Other borrowings 700 800 750
Other payables 133 145 100
1,115 1,603 1,255
------------------------------- ---------- ------------ ------------ --------
Current liabilities
Trade and other payables 7,640 5,985 7,801
Other borrowings 100 2,574 1,308
Bank loans 10 268 85
------------------------------- ---------- ------------ ------------ --------
7,750 8,827 9,194
Total liabilities 8,865 10,430 10,449
------------------------------- ---------- ------------ ------------ --------
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(Continued)
6 months 6 months Year
ended ended ended
31 December 31 December 30 June
2017 2016 2017
Unaudited Unaudited Audited
Notes EUR'000 EUR'000 EUR'000
------------------------------- ------ ------------ ------------ ---------
Equity attributable to owners
of the Company
Share capital 4 22,168 20,123 20,267
Share premium 49,524 47,504 47,480
Shares to be issued 1,310 - 125
Merger relief reserve 1,488 1,488 1,488
Capital redemption reserve 6,503 6,503 6,503
Available for sale reserve 2,064 - -
Translation reserve (2,180) (2,292) (2,156)
Own shares (2,336) (2,336) (2,336)
Retained deficit (54,236) (53,065) (53,967)
Total equity 24,305 17,925 17,404
------------------------------- ------ ------------ ------------ ---------
Total liabilities and equity 33,170 28,355 27,853
------------------------------- ------ ------------ ------------ ---------
CONDENSED
CONSOLIDATED Available
STATEMENT Share Merger Shares Capital for
OF CHANGES IN Share premium relief to be redemption sale Translation Own Retained
EQUITY capital account reserve issued reserve reserve reserve shares deficit Total
Eur'000 Eur'000 Eur'000 Eur'000 Eur'000 Eur'000 Eur'000 Eur'000 Eur'000 Eur'000
--------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ----------------
Balance at 1
July 2017 20,267 47,480 1,488 125 6,503 - (2,156) (2,336) (53,967) 17,404
--------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ----------------
Unaudited:
Nominal value
of shares
issued 1,901 2,044 - (125) - - - - - 3,820
Shares to be
issued - - - 1,310 - - - - - 1,310
Total
transaction
with owners,
recognised
directly in
equity 1,901 2,044 - 1,185 - - - 5,130
--------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ----------------
Loss for the
period - - - - - - - - (269) (269)
Other
comprehensive
income - - - - - 2,064 (24) - - 2,040
Total
comprehensive
income
for the
period - - - - - 2,064 (24) - (269) 1,771
--------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ----------------
Balance at 31
December 2017 22,168 49,524 1,488 1,310 6,503 2,064 (2,180) (2,336) (54,236) 24,305
--------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ----------------
Available
Share Merger Shares Capital for
Share premium relief to be redemption sale Translation Own Retained
capital account reserve issued reserve reserve reserve shares deficit Total
Eur'000 Eur'000 Eur'000 Eur'000 Eur'000 Eur'000 Eur'000 Eur'000 Eur'000 Eur'000
--------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ----------------
Balance at 1
July 2016 19,601 47,379 1,488 - 6,503 - (2,343) (2,336) (52,207) 18,085
--------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ----------------
Unaudited:
Nominal value
of shares
issued 522 - - - - - - - - 522
Premium
arising on
issue of
placement
shares - 125 - - - - - - - 125
Total
transaction
with owners,
recognised
directly in
equity 522 125 - - - - - - - 647
--------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ----------------
Loss for the
period - - - - - - - - (858) (858)
Other
comprehensive
income
- currency
translation
differences - - - - - - 51 - - 51
Total
comprehensive
income
for the
period - - - - - 51 - (858) (807)
--------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ----------------
Balance at 31
December 2016 20,123 47,504 1,488 - 6,503 - (2,292) (2,336) (53,065) 17,925
--------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ----------------
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
6 months 6 months Year
ended ended ended
31 December 31 December 30 June
2017 2016 2017
Unaudited Unaudited Audited
EUR'000 EUR'000 EUR'000
------------------------------- ------------ ------------ --------
Net cash generated from/(used
in) operating activities (844) 1,290 3,858
------------------------------- ------------ ------------ --------
Investing activities
Acquisition of subsidiaries
and businesses, net of cash
acquired - - 87
Purchase of intangible fixed
assets - (4) (155)
Purchase of property, plant
and equipment (12) - (206)
Loans advanced - (1,000) (1,000)
Net cash used in investing
activities (12) (1,004) (1,274)
------------------------------- ------------ ------------ --------
Financing activities
Proceeds on issue of shares 1,310 - -
Proceeds from borrowings - 1,925 1,751
Interest paid (68) (176) (312)
Repayment of borrowings (333) (156) (1,582)
Net cash generated from/(used
in) financing activities 909 1,593 (143)
------------------------------- ------------ ------------ --------
Net increase in cash and
cash equivalents 53 1,879 2,441
Cash and cash equivalents
at beginning of the period 2,863 422 422
Cash and cash equivalents
at the end of the period 2,916 2,301 2,863
------------------------------- ------------ ------------ --------
Non-cash transactions
The principal non-cash transactions comprise the issue of shares
as consideration for business combinations and the issue of shares
to settle Group liabilities.
NOTES TO THE CONDENSED CONSOLIDATED HALF YEARLY FINANCIAL
STATEMENTS
1. Nature of operations and general information
Artilium plc and its subsidiaries (together 'the Group')
operates in the business to business communications sector
delivering innovative software solutions which layer seamlessly
over disparate fixed, mobile and IP networks to enable the
deployment of converged services and applications. Artilium plc is
incorporated and domiciled in the United Kingdom. The address of
its registered office is 9-13 St. Andrew Street, London EC4A 3AF.
The Group's principal place of business is Belgium and the
Netherlands.
2. Basis of preparation
These unaudited condensed consolidated half yearly financial
statements have been prepared under the historical cost convention
and in accordance with the AIM Rules for Companies. As permitted,
the Group has chosen not to adopt IAS 34 "Interim Financial
Statements" in preparing this interim financial information. The
unaudited condensed consolidated half yearly financial statements
should be read in conjunction with the annual financial statements
for the year ended 30 June 2017, which have been prepared in
accordance with International Financial Reporting Standards (IFRS)
as adopted by the European Union.
The unaudited condensed consolidated half yearly financial
statements do not constitute statutory financial statements within
the meaning of the Companies Act 2006. They have been prepared on a
going concern basis in accordance with the recognition and
measurement criteria of IFRSs as adopted by the European Union.
Statutory financial statements for the year ended 30 June 2017 were
approved by the Board of Directors on 30 October 2017 and delivered
to the Registrar of Companies. The report of the auditor on those
financial statements was unqualified.
The same accounting policies, presentation and methods of
computation are followed in these unaudited condensed consolidated
half yearly financial statements as were applied in the preparation
of the Group's annual audited financial statements for the year
ended 30 June 2017.
The preparation of unaudited condensed consolidated half yearly
financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at
the end of the reporting period. Significant items subject to such
estimates are set out in the Group's Annual Report and Financial
Statements for the year ended 30 June 2017. Except as described
below, the nature and amounts of such estimates have not changed
significantly during the interim period.
The presentational currency of the Group is round thousand
Euros.
Basis of consolidation
The unaudited condensed consolidated half yearly financial
statements incorporate the financial statements of Artilium plc and
the entities controlled by the Company. Control is achieved when
the Group is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those
returns through its power over the investee.
All material intra-group transactions, balances, income and
expenses are eliminated on consolidation.
Going concern
The Directors have adopted the going concern basis in preparing
the condensed consolidated half yearly financial statements, having
carried out a going concern review. In carrying out the review the
Directors have made assumptions about the future revenue that will
be generated based on its pipeline. The Directors are satisfied
that the going concern basis is appropriate.
Intangibles
IAS 36 requires the Directors to consider intangible assets and
goodwill for impairment on an annual basis. The last review was
performed at 30 June 2017 and has not been updated at the interim
date.
3. Earnings per share
6 months 6 months Year
ended ended ended
31 December 31 December 30 June
2017 2016 2017
Unaudited Unaudited Audited
EUR'000 EUR'000 EUR'000
---------------------------- ------------ ------------ ------------
Profits/(Losses)
Loss from continuing
operations attributable
to owners of the parent (269) (858) (1,760)
No. No. No.
---------------------------- ------------ ------------ ------------
Number of shares
Weighted average number
of ordinary shares for
the purposes of basic
and diluted earnings
/loss per share 316,738,333 300,746,398 304,597,997
---------------------------- ------------ ------------ ------------
Earnings per share (cents) (0.08) (0.29) (0.58)
---------------------------- ------------ ------------ ------------
4. Share capital
6 months 6 months Year
ended ended ended
31 December 31 December 30 June
2017 2016 2017
Unaudited Unaudited Audited
EUR'000 EUR'000 EUR'000
----------------------------- ------------ ------------------- -------------------
Issued and fully paid
ordinary shares:
341,283,755 (30 June
2017: 307,583,545)
ordinary shares of
5p each 24,212 20,123 20,267
------------------------------ ------------ ------------------- -------------------
6 months 6 months Year
ended ended ended
31 December 31 December 30 June
2017 2016 2017
No. '000 No. '000 No. '000
----------------------------- ------------ ------------------- -------------------
Issued and fully paid
ordinary shares:
Balance at beginning
of financial period 307,583 297,853 297,853
Issued during the period 33,701 4,568 9,730
Balance at end of financial
period 341,284 302,421 307,583
------------------------------ ------------ ------------------- -------------------
5. Post Balance Sheet Events
On 16 January 2018 Artilium acquired the entire issued share
capital of Interactive Digital Media GmbH ("IDM"), a German-based
cloud communication company, for an aggregate consideration of
EUR3.5 million. The consideration was satisfied in EUR2.0 million
cash and EUR1.5 million in options over ordinary shares or payment
in ordinary shares of 5 pence each in the capital of the
Company.
6. Further Copies
Copies of the half-yearly financial report are available from
the Company's registered office at 9-13 St. Andrew Street, London
EC4A 3AF and on the Company's website www.artilium.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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