TIDMATQT
RNS Number : 2227R
ATTRAQT Group PLC
20 September 2017
20 September 2017
ATTRAQT Group plc
("ATTRAQT", the "Group" or the "Company")
INTERIM RESULTS
ATTRAQT Group plc (AIM: ATQT), a leading provider of online
merchandising, onsite search and eCommerce personalisation,
announces its unaudited results for the six months ended 30 June
2017.
Financial highlights
Following the completion of the Fredhopper acquisition on 8(th)
March 2017:
-- Revenue increased 224% to GBP5.5m (H1 2016: GBP1.7m)
-- Recurring revenue increased by 194% to GBP4.7m (H1 2016: GBP1.6m)
-- Adjusted EBITDA(1) losses were GBP0.5m (H1 2016: GBP0.8m)
-- Losses before tax were GBP3.1m (H1 2016: GBP0.9m)
-- Adjusted basic EPS loss 4.0p per share (H1 2016: 3.2p loss per share)
-- Gross margin for the Group of 71% (H1 2016: 86%) following
the acquisition of Fredhopper, a historically lower-margin
business
-- Cash at period end of GBP2.7m (H1 2016: GBP1.8m)
-- Annualised H1 Exit Rate(2) up 380% to GBP16.5m (H1 2016: GBP3.4m)
(1) . Adjusted EBITDA refers to earnings before interest, tax,
exceptional costs, depreciation, amortisation and share based
payments
(2) . June monthly revenue x 12
Operational highlights
-- Successful integration of Fredhopper with planned cost savings delivered.
-- 13 new logos signed during period, bringing total to over 230.
o Including Arc'teryx, Auchan, Brora, Hunter Boots, Specsavers,
and The White Company.
-- Average new contract value of GBP54k (H1 2016: GBP38k).
-- 41 upgrades and 100+ client renewals.
Post-period highlights
-- Significant new logo win, the Group's second largest, with
one of the largest global sportswear manufacturers across both EMEA
and North American regions.
-- Other significant new logos signed include: Blancheporte
(FRA), Olymp (GER) and Divertimenti (UK).
-- Incremental spend of up to GBP0.5m approved in H2 2017 to secure next year's revenue.
André Brown, Group CEO, commented,
"I am delighted to report that the integration of the Fredhopper
business has been achieved whilst maintaining significant sales
momentum. The Group is already reaping the benefits of the
increased scale and improved access to the enterprise retail market
that this acquisition has brought.
"We continue to gain traction with leading retailers in the UK,
Europe and North America, having signed significant new logos in
the period including Hunter Boots, Specsavers and The White
Company. At the same time, our proposition remains key to our
current customers with a significant number of upgrades and
renewals.
"The momentum has continued post period with the signing of the
second largest logo in the Group's history, plus contracts across a
variety of territories. This momentum, underpinned by high
recurring revenue and a strong pipeline for new business in the
second half of the year, gives us confidence in the ongoing success
of ATTRAQT for the remainder of 2017."
For further information, please contact:
ATTRAQT Group plc via Newgate
André Brown, Group CEO
Eric Dodd, CFO
Gemma Williams (née Owen-Smith), Head of Marketing and Communications
N+1 Singer Tel: 020 7496 3000
Shaun Dobson, Lauren Kettle
Newgate Tel: 020 7680 6550
Adam Lloyd, Charlotte Coulson, Sophie O'Donoghue
About ATTRAQT
ATTRAQT Group plc specialises in onsite search, online
merchandising and eCommerce personalisation with two product
offerings: Freestyle Merchandising and Fredhopper. The Group's
customer base is made up of over 230 client logos ranging from SMEs
to global, blue-chip businesses. ATTRAQT has a strong base in the
UK and Western Europe, with a presence in North America, eastern
Europe and ANZ. For more information, please visit:
www.attraqt.com.
Chairman's Statement
ATTRAQT's longstanding vision has been to become the eCommerce
acceleration platform of choice for retailers in the UK, Europe,
North America and ANZ, and over this milestone period for the Group
we have made great steps towards achieving this goal.
With over 230 clients, including many high value marquee names
and a widening global presence, it is clear that ATTRAQT's strategy
to capitalise on the growing eCommerce industry, and the desire of
online retailers to optimise their revenues, is paying off and that
the demand for our technology is strong.
Whilst undoubtedly this period is notable for the
transformational acquisition made and its successful integration,
our sales momentum has been robust, and this has been maintained
post-period.
We continue to see client reliance on both of our software
platforms increasing, resulting in continuing client upgrades and
renewals during H1, and we expect to see this trend continue
through the second half of the year.
The Group continues to develop its core software platforms, and
I look forward to seeing some exciting technology developments
being released in H2 including our new data import API, a
Demandware cartridge and our new advanced reporting module.
As the dynamics of the eCommerce market continue to develop, we
have taken the prudent decision to increase spend on some aspects
of the business in order to mitigate potential future risk. By
taking steps to secure next year's revenue now, we look forward to
maintaining the strong momentum we have built over the first half
in the long term.
As ATTRAQT continues to demonstrate strong sales growth and
robust financial and operational progress, we remain confident in
the outlook for the rest of the year.
Nick Habgood
Chairman
19 September 2017
Group CEO's Statement
We are pleased with the strong progress achieved by ATTRAQT in
the first half of the year, which has been realised alongside the
successful integration of the Fredhopper business, acquired in
March 2017.
As expected, the acquisition of Fredhopper has been truly
transformational for the Group, providing the Company with access
to the larger enterprise retail market, greatly enhanced scale and
financial strength, and has made us the only market player offering
a full suite of high-quality solutions. The main cost savings which
were identified at the time of the transaction have been delivered,
creating an efficient organisational structure with single sales,
customer success ("CSM") and product development teams.
It is particularly pleasing that both our customers and staff
have embraced the enlarged opportunity for the Group, and testament
to the success of the integration is the continued momentum we have
achieved throughout.
Business model
The Company's SaaS business model is robust, based primarily on
a recurring monthly (or quarterly) service fee together with
one-off set-up fees, additional follow-on project fees and
professional service fees. Clients on the Freestyle Merchandising
platform typically sign for a minimum of 12 months, larger clients
and clients on the Fredhopper platform typically sign for a period
of 2-3 years.
The current sales model is based upon direct sales via a
dedicated sales team. Due to the importance of the functionality
provided by both software platforms to the client, and net client
churn typically only represents 2-4 per cent of revenue, with most
clients automatically renewing at the end of the contracted
term.
Growth strategy
The Group's objective is to become the eCommerce acceleration
platform of choice for online retailers in the UK, Europe, North
America and ANZ.
The Group continues to execute against its business plan, which
is simple and scalable, founded on four key elements:
1. Focus on sales and marketing to grow the client base and volume of recurring revenue;
2. Invest in customer success to ensure that our customers make
full use and derive full benefit from our platforms;
3. Expand the Company's production capacity to keep pace with accelerating sales;
4. Extend the capabilities of the ATTRAQT platforms through
continued investment in research and development, adding new
features and creating new products to initiate new revenue
streams.
Review of Sales and Operations
Customer wins demonstrate growing traction.
Illustrative of ATTRAQT's strong proposition is the large number
of significant client renewals and service upgrades secured during
the period, being 100+ and 41 respectively. It is pleasing to see
the number of existing clients trusting the Company to undertake
follow-on project work, migrating to new eCommerce platforms,
changing integration types and adding additional features to
existing sites.
13 new logos were also signed during the first half, including
household names such as Arc'teryx, Auchan, Hunter Boots, Specsavers
and The White Company. This brings the total number of client logos
to over 230 at the end of June 2017.
The Group continues to deliver in line with its strategy, not
only growing its client base but securing more contracts of a
larger average value (increasing by 67 per cent to GBP48k pa).
ATTRAQT's ability to win and service these contracts demonstrates
our unrivalled proposition, reflecting a clear return on investment
for our technology products, the growing maturity of our sales
process and the increasing size of our typical client.
International Growth
Over the period the company has been successful in building its
position in many of its key target regions, with significant new
client wins globally.
ATTRAQT remains committed to expanding its client base in North
America, and appointed a new VP of Sales, Bruce Gilburne. Since his
appointment, the newly bolstered team has been focused on building
the new business pipeline.
The acquisition of Fredhopper has added capability to our
product suite which furthers the Group's appeal internationally,
and with this in addition to the Group's increased scale and
strength, we are confident that we continue to be a leading player
in all our target markets.
Market developments
Online retail is a highly competitive industry that is
constantly evolving as retailers continue to develop their
multichannel propositions and extend their eCommerce platforms into
international markets, looking for new ways to drive conversion
rates and increase customer loyalty. The challenge for these
retailers is to ensure consistency of merchandising across channels
and countries - something that ATTRAQT successfully achieves
through its Fredhopper and Freestyle Merchandising platforms.
We continually monitor the market for trends and enhancements to
incorporate into our platforms to ensure they meet all our clients'
current and potential needs. We are confident that, although
changes in market dynamics can sometimes prompt movements beyond
our control, our product offerings are the best in the market and
therefore our customers will ultimately continue to see the value
in choosing our solutions. We are consistently validated in this
belief as our clients choose to upgrade with us, expand their
exposure to our products geographically, and return to using
us.
Platform enhancements and product development
The product development roadmap is driven by observing trends in
the market, listening to customer requirements and the company's
bi-annual innovation day, which seeks to identify and prototype new
ideas for development.
Financial Review
Total revenue increased by 224 per cent to GBP5.5m (H1 2016:
GBP1.7m) reflecting the acquisition of the Fredhopper business as
well as the addition of new clients and service upgrades and
renewals from existing ones. The annualised revenue for H1
increased by 380 per cent to GBP16.5m (H1 2016: GBP3.4m). The
Group's combined gross margin decreased to 71 per cent (H1 2016: 86
per cent), due to the mix with Fredhopper's lower historic gross
margin of 59 per cent. Adjusted EBITDA losses were at GBP0.5m (H1
2016: GBP0.8m) in line with management expectations.
The Company continues to invest in technical enhancements to its
existing product offering and in new products. Some of this cost is
capitalised but much is absorbed as part of the operating costs of
the business.
The cash balance at the end of the period was GBP2.7m.
Outlook
The Board is pleased with the progress achieved in the first
half of the year; we have now completed the transformative
integration period prompted by the Fredhopper acquisition and the
management team is delivering to plan.
Post-period end, the sales team has been successful in securing
one of the Company's largest ever contracts, as well as several
other significant mandates across various territories. Our pipeline
for H2 is strong and as such we are confident that we are trading
in line to meet market expectations. However, the Board has
identified a temporary market change which we see as a potential
risk for 2018, and which we feel it is prudent to mitigate by
taking specific action now.
There is a consolidation activity occurring in the ecommerce
software market, leading to some retailers reviewing their entire
ecommerce platform, including the technology stack that sits on top
of it. Whilst we haven't seen much impact from this in H1, it is
prudent to invest ahead of time in account management, sales and
production, especially given the positive momentum the team is
seeing and therefore the Board has approved an incremental spend of
up to GBP0.5m in 2017.
With the scale and the strength of the enlarged Group, plus
increasingly powerful and efficient merchandising platforms ATTRAQT
is well positioned to address the significant market opportunity
available to it.
André Brown
Group Chief Executive Officer
19 September 2017
ATTRAQT Group plc
Consolidated statement of comprehensive income
For the six months ended 30 June 2017
Note 30(th) 30(th)
June June
2017 2016
(unaudited) (unaudited)
GBP'000 GBP'000
Revenue 5,453 1,682
Cost of sales (1,586) (239)
------------- -------------
Gross profit 3,867 1,443
Administrative expenses (5,007) (2,410)
Exceptional administrative
expenses 3 (2,095) -
------------- -------------
Total administrative expenses (7,102) (2,410)
Loss from operations (3,235) (967)
Finance Income - -
------------- -------------
Loss before tax (3,235) (967)
Tax credit 4 136 102
------------- -------------
Loss for the period (3,099) (865)
------------- -------------
Consolidated statement of comprehensive
income
30(th) 30(th)
June June
2017 2016
(unaudited) (unaudited)
GBP'000 GBP'000
Loss for the period (3,099) (865)
Other comprehensive income:
Exchange differences on translation
of foreign operations (94) 19
------------- -------------
Total comprehensive loss
for the period (3,193) (846)
------------- -------------
Basic and diluted loss per
share 5 (4.0p) (3.2p)
------------- -------------
ATTRAQT Group PLC
Consolidated statement of financial position
at 30 June 2017
30(th) 31(st)
June Dec
2017 2016
(audited)
Note (unaudited)
GBP'000 GBP'000
Assets
Non-current assets
Goodwill 6 16,747 -
Intangible assets 7 10,113 247
Property, plant and equipment 123 39
-------------- ----------------
26,983 286
Current assets
Trade and other receivables 3,364 537
Corporation tax recoverable 195 214
Cash and cash equivalents 2,682 1,157
-------------- ----------------
6,241 1,908
-------------- ----------------
Total assets 33,224 2,194
Liabilities
Current liabilities
Trade and other payables 6,489 774
Non-current liabilities
Deferred Tax 1,586 -
Total liabilities 8,075 774
-------------- ----------------
NET ASSETS 25,149 1,420
-------------- ----------------
Equity
Share capital 8 1,063 269
Share premium 30,108 4,253
Merger reserve 1,457 1,457
Share based payment reserve 732 647
Foreign exchange reserve 76 (18)
Retained earnings (8,287) (5,188)
-------------- ----------------
TOTAL EQUITY 25,149 1,420
-------------- ----------------
ATTRAQT Group plc
Consolidated statement of cash flows
for the six months ended 30 June 2017
Note 30(th) 30(th)
June June
2017 2016
(unaudited) (unaudited)
GBP'000 GBP'000
Cash flows from operating
activities
Loss for the period (3,099) (865)
Adjustments for:
Depreciation of property,
plant and equipment 22 12
Amortisation of intangible
fixed assets 7 498 92
Income tax credit (136) (102)
Share based payment expense 85 85
(2,630) (778)
(Increase) in trade and
other receivables (325) (206)
Increase/(Decrease) in trade
and other payables 708 (41)
------------- -------------
Cash used in operations (2,247) (1,025)
Interest received - -
Tax received 60 19
------------- -------------
Net cash flows used in operating
activities (2,187) (1,006)
Investing activities
Acquisition of subsidiary
(net of cash acquired) 6 (22,536) -
Purchases of property, plant
and equipment (45) (29)
Development of intangibles 7 (357) (162)
Net cash used in investing
activities (22,939) (191)
Financing activities
Issue of ordinary shares, 26,649 -
net of issue costs
Net cash inflow/(outflow)
from investing and financing
activities 3,711 (191)
Net increase/(decrease)
in cash and cash equivalents 1,524 (1,197)
Cash and cash equivalents
at beginning of period 1,157 2,996
------------- -------------
Cash and cash equivalents
at end of period 2,681 1,799
------------- -------------
ATTRAQT Group PLC
Consolidated statement of changes in equity
For the six months ended 30 June 2017
Share Share Merger Share Foreign Retained Total
capital premium reserve based exchange earnings equity
payment reserve
reserve
--------------- -------------------- -------- -------------------- ------------------------ ------------------- -------------- --------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Half year
2016
01-Jan-16 269 4,253 1,457 477 (32) (3,397) 3,027
Loss for
the period - - - - - (865) (865)
Translation
of foreign
entity - - - - 19 - 19
-------------------- -------- -------------------- ------------------------ ------------------- -------------- --------
Total
comprehensive
Income
for the
period - - - - 19 (865) (846)
-------------------- -------- -------------------- ------------------------ ------------------- -------------- --------
Share based
payment
charge - - - 85 - - 85
30-Jun-16 269 4,253 1,457 562 (13) (4,262) 2,266
--------------- -------------------- -------- -------------------- ------------------------ ------------------- -------------- --------
Loss for
the period - - - - - (926) (926)
Translation
of foreign
entity - - - - (5) - (5)
-------------------- -------- -------------------- ------------------------ ------------------- -------------- --------
Total
comprehensive
Income
for the
period - - - - (5) (926) (931)
-------------------- -------- -------------------- ------------------------ ------------------- -------------- --------
Share based
payment
charge - - - 85 - - 85
31-Dec-16 269 4,253 1,457 647 (18) (5,188) 1,420
--------------- -------------------- -------- -------------------- ------------------------ ------------------- -------------- --------
Half year
2017
Loss for
the period - - - - - (3,099) (3,099)
Translation
of foreign
entity - - - - 94 - 94
--------
Total
comprehensive
Income
for the
period - - - - 94 (3,099) (3,005)
-------------------- -------- -------------------- ------------------------ ------------------- -------------- --------
Share based
payment
charge - - - 85 - - 85
Issue of
share capital 794 27,005 - - - - 27,799
Issue Costs - (1,150) - - - - (1,150)
30-Jun-17 1,063 30,108 1,457 732 76 (8,287) 25,149
--------------- -------------------- -------- -------------------- ------------------------ ------------------- -------------- --------
ATTRAQT Group PLC
Abbreviated notes to the consolidated financial statements
1. General information
The interim financial information of ATTRAQT Group PLC for the
six months ended 30 June 2017 comprise the company and its
subsidiaries (together "the Group"). The principal activity of the
Group is the development and provision of online merchandising,
onsite search and eCommerce personalization technology.
The Company is a public limited company which is quoted on the
Alternative Investment Market of the London Stock Exchange and is
incorporated and domiciled in the UK. The address of the registered
office is 3 Waterhouse Square, 138 Holborn, London, EC1N 2SW.
2. Basis of preparation
The financial information presented in this Interim Report has
been prepared in accordance with the recognition and measurement
requirements of International Financial Reporting Standards issued
by the International Accounting Standards Board, as adopted by the
European Union. The principal accounting policies adopted in the
preparation of the financial information in this Interim Report are
unchanged from those used in the company's financial statements for
the year ended 31 December 2016 and are consistent with those that
the company expects to apply in its financial statements for the
year ended 31 December 2017.
The comparative financial information for the year ended 31
December 2016 in this interim report does not constitute statutory
accounts for that year. The Annual Report and Accounts for the year
ended 31 December 2016 were audited and have been filed with the
Registrar of Companies. The Independent Auditors' Report on the
Annual Report and Accounts for the year ended 31 December 2016 was
unqualified and did not draw attention to any matters by way of
emphasis and did not contain statements under s498(2) or (3) of the
Companies Act 2006. The financial information for the periods ended
30 June 2016 and 30 June 2017 is unaudited.
The Board of Directors approved this interim report on the 19
September 2017.
Accounting policies
Business combinations
The Group applies the acquisition method of accounting for
business combinations. The consideration transferred by the Group
to obtain control of a subsidiary is calculated as the sum of the
acquisition-date fair value of assets transferred by the Group,
liabilities incurred by the Group to the former owners of the
acquire and the equity interest issued by the Group. Acquisition
costs are expensed as incurred.
The Group recognises identifiable assets acquired and
liabilities assumed in a business combination regardless of whether
they have been previously recognised in the acquired subsidiary's
financial information prior to the acquisition. Assets acquired and
liabilities assumed are measured at their acquisition-date fair
values. Goodwill is stated after separate recognition of
identifiable intangible assets. It is calculated as the excess of
the fair value of consideration transferred, over the Group's share
of the acquisition-date fair values of identifiable net assets. If
the fair values of identifiable net assets exceed the sum
calculated above, the excess amount (i.e. gain on a bargain
purchase) is recognised in profit or loss immediately. A change in
the ownership interest of a subsidiary, without a loss of control,
is accounted for as an equity transaction. If the Group loses
control over a subsidiary, it derecognises the related assets
(including goodwill), liabilities, non-controlling interest and
other components of equity while any resultant gain or loss is
recognised in profit or loss. Any investment retained is recognised
at fair value.
Revenue recognition
Revenue represents sales to external customers at invoiced
amounts less value added tax or local taxes on sales. Where work is
completed at the year-end but not invoiced, the ATTRAQT Group
accrues for this income. The Group derives the majority of its
revenue from the provision of eCommerce services to online
retailers which includes site search, merchandising and product
recommendation technology. These are recurring revenues that are
recognised on a monthly basis.
Revenue from services provided by the ATTRAQT Group is
recognised when the ATTRAQT Group has performed its obligations and
in exchange obtained the right to consideration which can be
reliably measured and it is probable economic benefits will flow to
the entity. If amounts have been invoiced in advance for services,
these amounts are deferred until the service has been provided to
the client at which point the income is recognised. Within the
ATTRAQT Group income is recognised across three streams:
-- Recurring revenues - a monthly subscription fee is earned
from customers to the software as a service platform. Operation of
the service is provided for a fixed term.
-- One-off fees - work is undertaken for existing clients to
expand or upgrade the service they receive and this is billed for
separately. Revenue is recognised on stage of completion on this
work. Stage of completion is calculated based on estimated hours to
complete the work versus the number of hours already done.
-- Professional services - Revenue from services rendered is
recognised in income in proportion to the stage of completion of
the transaction at the balance sheet date. No revenue is recognised
if there are significant uncertainties regarding recovery of the
consideration due or associated costs.
Intangible assets
Externally acquired intangible assets are initially recognised
at cost and subsequently amortised on a straight-line basis over
their useful economic lives.
Intangible assets are recognised on business combinations if
they are separable from the acquired entity or give rise to other
contractual/legal rights. The amounts ascribed to such intangibles
are arrived at by using appropriate valuation technique.
The significant intangibles recognised by the Group, their
useful economic lives and the methods used to determine the cost of
intangibles acquired in a business combination are as follows:
Intangible Useful economic Valuation Method
Asset life
Customer Relationships 11 years Excess Earnings Method
- the value of the intangible
asset is the present
value of the after-tax
cash flows potentially
attributable to it,
net of the return on
fair value attributable
to tangible and other
intangible assets.
Existing Technology 7 years Relief from Royalty
Method - the value of
intangible assets are
estimated by capitalising
the royalties saved
because the company
owns the intangible
asset.
Trade Names 10 years Relief from Royalty
Method - the value of
intangible assets are
estimated by capitalising
the royalties saved
because the company
owns the intangible
asset.
Internally generated intangible assets (development costs)
Expenditure on internally developed products is capitalised if
it can be demonstrated that:
-- it is technically feasible to develop the product for it to be sold;
-- adequate resources are available to complete the development;
-- there is an intention to complete and sell the product;
-- the Group is able to sell the product;
-- sale of the product will generate future economic benefits; and
-- expenditure on the project can be measured reliably.
Capitalised development costs are amortised over three years.
The amortisation expense is included within administrative expenses
in the consolidated statement of comprehensive income.
Development expenditure not satisfying the above criteria and
expenditure on the research phase of internal projects are
recognised in the consolidated statement of comprehensive income as
incurred.
Foreign currency
Transactions entered into by Group entities in a currency other
than the currency of the primary economic environment in which it
operates (the "functional currency") are recorded at the rates
ruling when the transactions occur. Foreign currency monetary
assets and liabilities are translated at the rates ruling at the
reporting date. Exchange differences arising on the retranslation
of unsettled monetary assets and liabilities are recognised
immediately in profit or loss.
On consolidation, the results of overseas operations are
translated into Pounds Sterling at rates approximating to those
ruling when the transactions took place. All assets and liabilities
of overseas operations, including goodwill arising on the
acquisitions of those operations, are translated at the rate ruling
at the reporting date. Exchange differences arising on translating
the opening net assets at opening rate and the results of overseas
operations at actual rate are recognised in other comprehensive
income and accumulated in the foreign exchange reserve.
Exchange differences recognised in profit or loss in Group
entities separate financial statements on the translation of
long-term monetary items forming part of the Group's net investment
in the overseas operation concerned are reclassified to other
comprehensive income and accumulated in the foreign exchange
reserve on consolidation.
Taxation
Taxes on income for the interim periods are accrued using the
tax rate that would be applicable to expected total earnings. Tax
being shown in the Statement of Comprehensive Income is largely due
to tax credits and a deferred tax credit
Deferred tax
Deferred tax is recognised on differences between the carrying
amounts of assets and liabilities in the financial statements and
the corresponding tax bases used in the computation of taxable
profit, and is accounted for using the balance sheet liability
method. Deferred tax liabilities are generally recognised for all
taxable temporary differences. Deferred tax assets are recognised
only to the extent that the level and timing of taxable profits can
be measured and it is probable that these will be available against
which deductible temporary differences can be utilized.
Deferred tax is calculated at tax rates that have been enacted
or substantively enacted at the balance sheet date, and that are
expected to apply in the period when the liability is settled or
the asset realised.
Going Concern
The financial statements have been prepared under the going
concern basis as the directors have undertaken a review of the
future financing requirements of the ongoing operation of the group
and are satisfied that sufficient cash together with bank and other
facilities is available to meet its working capital requirements
for at least 12 months from the date of signing these financial
statements. The directors accordingly consider it appropriate for
the financial statements to be prepared on a going concern
basis.
3. Exceptional Costs
The exceptional costs consist of GBP1,655,000 (2016: GBP Nil)
relating to the legal and professional advisors fees in respect of
acquisition costs and GBP440,000 of post-acquisition integration
activities (2016: GBP Nil).
4. Income Tax credit
The Tax charge credits represent a GBP63,000 (2016: GBP102,000)
estimate for a tax refund to be received under the Research and
Development Tax Credit legislation, and a deferred tax release of
GBP73,000 (2016: GBP Nil), following the acquisition of Fredhopper
BV (note 6).
5. Loss per share
Basic earnings per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average
number of Ordinary Shares outstanding during the period.
30(th) 30(th)
June 17 June
16
GBP'000 GBP'000
Numerator
Loss for the period (3,099) (865)
----------- -----------
Denominator
Weighted average
number of shares
used in basic
and diluted EPS 77,406,531 26,942,340
Loss per share
- basic and diluted (4.0p) (3.2p)
In accordance with IAS 33 where there is a loss for the period,
there is no dilutive effect of options and therefore there is no
difference between the basic and diluted loss per share.
6. Acquisition of Subsidiary
On 8 March 2017, the Company acquired 100% of the issued equity
instruments of Fredhopper BV from SDL Netherlands BV and subsidiary
of SDL plc. Fredhopper BV is a company whose principal activity is
to provide site search and merchandising software to online
retailers. The principal reason for this acquisition was to secure
the Company's primary competitor and become the 'go to' provider of
online visual merchandising for retailers. The acquisition
increased the existing client base and provides a strong presence
in the US, UK and Continental European markets.
Details of the fair value of identifiable assets and liabilities
acquired, purchase consideration and goodwill are as follows:
Book Value Adjustment Fair Value
GBP'000 GBP'000 GBP'000
Customer Relationships - 4,414 4,414
Technology - 4,805 4,805
Trade Name - 788 788
Property, plant and
equipment 60 - 60
Trade Receivables 2,292 - 2,292
Other Debtors 489 - 489
Trade Creditors (522) - (522)
Other Current Liabilities (711) - (711)
Corporation Tax Payable (18) - (18)
Deferred Revenue (3,460) - (3,460)
Deferred tax liability - (1,879) (1,879)
-------------------- -------------------- -----------
Total Net Assets/(Liabilities) (1,870) 8,128 6,258
On acquisition Fredhopper BV held trade receivables with a book
and fair value of GBP2,292,000 representing contractual receivables
of GBP2,408,000. Whilst the Group will make every effort to collect
all contractual receivables, it considers it unlikely that
GBP116,000 will ultimately be received.
Fair value of consideration paid
Consideration GBP'000
Cash Transferred 23,005
Total Consideration 23,005
There is no contingent consideration on the Fredhopper
acquisition.
Goodwill
GBP'000
Consideration transferred 22,536
Cash received via acquisition 469
Fair value of identifiable
net assets (6,258)
----------
Goodwill 16,747
Acquisition costs of GBP2,805,000 arose as a result of the
transaction and the private placing undertaken to fund it.
Acquisition costs of GBP1,150,000 attributable to the issue of
equity instruments, under the private placing, were recognised as
part of share premium in the statement of financial position, other
acquisition costs of GBP1,655,000 attributable to the integration
of Fredhopper BV have been recognised as part of administrative
expenses in the statement of comprehensive income.
The main factors leading to the recognition of goodwill are:
- Future customer relationships
- Future technology
- Assembled workforce of the acquired business, which do not qualify for separate recognition.
The goodwill recognised will not be deductible for tax
purposes.
Since the acquisition date, Fredhopper has contributed
GBP3,689,000 to group revenues. If the acquisition had occurred on
1 January 2017, group revenue contribution would have been
GBP5,735,000.
7. Intangible Assets
30(th) 31(st)
Customer Existing Trade Software June Dec
Relationships Technology Name Development 2017 2016
(unaudited) (audited)
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
Balance at
the 1st
January
2017 - - - 1,249 1,249 974
Capitalised
development
costs - - - 357 357 275
Acquired on
acquisition
of a
subsidiary 4,414 4,805 788 - 10,007 -
Balance at
the 30th
June
2017 4,414 4,805 788 1,606 11,613 1,249
Amortisation
Balance at
the 1st
January
2017 - - - 1,002 1,002 804
Charge for
the period 190 216 25 67 498 198
Balance at
the 30th
June
2017 190 216 25 1,069 1,500 1,002
Net Book
Value
At the 1st
January 2017 - - - 247 247 170
At the 30th
June 2017 4,224 4,589 763 537 10,113 247
8. Share Capital
Issued and 30(th) 31st Dec
fully paid June 2017 2016 (audited)
(unaudited)
Ordinary shares Total GBP000 Total GBP000
of GBP0.01 Number Number
each of Shares of Shares
At the beginning
of the period 26,942,340 269 26,942,340 269
Issued during
the year 79,426,249 794 - -
At the end
of the period 106,368,589 1,064 26,942,340 269
----------------- ------- ---------------- -------
The company raised GBP27,799,000, before expenses, by a private
placing of 78,572,000 1p Ord shares at 35p, and a further 854,249
1p Ord shares by an open offer to qualifying shareholders at 35p on
8 March 2017.
9. Cautionary Statement
This document contains certain forward-looking statements
relating to ATTRAQT Group PLC ('the Group'). The Group considers
any statements that are not historical facts as "forward-looking
statements". They relate to events and trends that are subject to
risk and uncertainty that may cause actual results and the
financial performance of the Group to differ materially from those
contained in any forward-looking statement. These statements are
made by the directors in good faith based on information available
to them and such statements should be treated with caution due to
the inherent uncertainties, including both economic and business
risk factors, underlying any such forward-looking information.
INDEPENT REVIEW REPORT TO ATTRAQT GROUP PLC
Introduction
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 June 2017 which comprises the consolidated
statement of comprehensive income; consolidated statement of
financial position; consolidated statement of cash flows;
consolidated statement of changes in equity; and associated
notes.
We have read the other information contained in the half-yearly
financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
Directors' responsibilities
The interim report, including the financial information
contained therein, is the responsibility of and has been approved
by the directors. The directors are responsible for preparing the
interim report in accordance with the rules of the London Stock
Exchange for companies trading securities on AIM which require that
the half-yearly report be presented and prepared in a form
consistent with that which will be adopted in the company's annual
accounts having regard to the accounting standards applicable to
such annual accounts.
Our responsibility
Our responsibility is to express to the company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Our report has been prepared in accordance with the terms of our
engagement to assist the company in meeting the requirements of the
rules of the London Stock Exchange for companies trading securities
on AIM and for no other purpose. No person is entitled to rely on
this report unless such a person is a person entitled to rely upon
this report by virtue of and for the purpose of our terms of
engagement or has been expressly authorised to do so by our prior
written consent. Save as above, we do not accept responsibility for
this report to any other person or for any other purpose and we
hereby expressly disclaim any and all such liability
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity", issued by the Financial Reporting Council for use
in the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 31
June 2017 is not prepared, in all material respects, in accordance
with the rules of the London Stock Exchange for companies trading
securities on AIM.
BDO LLP
Chartered Accountants and Registered Auditors
London
United Kingdom
19 September 2017
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR OKCDNKBKBPCD
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