Dow Jones received a payment from EQS/DGAP to publish this press
release.
Tern PLC (TERN)
Tern PLC: Unaudited Interim Results for the six months to 30 June 2018
17-Sep-2018 / 07:00 GMT/BST
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
17 September 2018
Tern Plc
(AIM: TERN)
Unaudited Interim Results for the six months to 30 June 2018
Tern Plc ("Tern" or the "Company"), the AIM quoted investment company
specialising in the Internet of Things ("IoT") market, is pleased to
announce its interim results for the six months to 30 June 2018.
Key Highlights
30 June 2018 30 June 2017 31 December 2017
GBP GBP GBP
Net assets 13,942,757 10,787,236 10,580,802
Current assets 2,671,784 429,729 850,675
Total assets 14,221,704 11,031,059 11,069,300
Loss for the period (221,252) (469,116) (1,689,555)
· Raised GBP3.1m during the period and retired a convertible loan note
facility, strengthening the balance sheet and improving Tern's investment
options.
· GBP1.5m invested into growing the portfolio with a new medical Virtual
Reality (VR) IoT investment, FVRVS Limited (trading as FundamentalVR), and
into existing portfolio companies, Device Authority Limited ("Device
Authority") and InVMA Limited.
· Year-on-year turnover of principal portfolio companies1 from calendar
year 2016 to 2017 increased by 126% and the increase for calendar year
2017 to 2018 is expected to be of the order of 12%. This includes a
reduction in turnover for flexiOPS due to the receipt of the final EU
grants. Without this reduction, the growth increases to 50%.
· Year-on-year increase in employees within principal portfolio
companies1, a key growth measurement or KPI, increased by 55% from
calendar year 2016 to 2017 and increased a further 12% in the six months
to June 2018.
· A close focus on cost management ensured that monthly administrative
costs over the period remained comparable to the monthly burn rate in the
year ended 31 December 2017. The reduced loss for the period compared to
the six months to June 2017 was primarily due to a small fair value
increase (GBP282,987).
· Net asset value per share fell to 6.2p for the period, this was due to
share issues early in the year. The most recent fundraises were achieved
at an appreciative net asset value per share.
· Details of shareholder conference call, to be held on Thursday 20
September, can be found at the end of this release.
Al Sisto, CEO of Tern Plc, said:
"I am pleased that Tern has made positive progress in terms of positioning
our company as a leading investor in technology companies specialising in
the IoT sector in the UK. Our recent activities, which include strengthening
our balance sheet and making investments into new and potentially
high-growth companies at attractive valuations, place us in a more solid
position for the full year and beyond.
"Tern's hands-on approach, consultative support and excellent industry
network represents an appealing proposition to the IoT companies in which we
seek to invest. As a result, we believe that we are on track to meet our
goal of having a dozen companies in our portfolio by the 2019 year-end, as
we outlined at our Annual General Meeting (AGM) in April this year. The
increased turnover reported by our portfolio companies reflect their
positive progress and we are confident that we can continue to support this
type of success in the future.
"At this point of our company's development, we believe we have the
components in place for a scalable foundation that will drive sustainable
growth for our shareholders, brought about by our management's years of
experience in growing technology businesses; a unique approach in finding
opportunities; and a focus on the dynamic IoT sector. Looking forward, over
the next six months, we are planning to expand our team, by adding
additional technology expertise to support the growing portfolio."
Note 1: Portfolio company growth excludes Seal and Push, in which Tern has a
<1% holding and minimal influence.
Enquiries:
Tern Plc via Redleaf
Albert Sisto/Sarah Payne
Allenby Capital Limited Tel: 0203 328 5656
(Nomad and joint broker)
David Worlidge/Alex Brearley
Whitman Howard Tel: 020 7659 1234
(Joint broker)
Nick Lovering/Christopher Furness
Redleaf Communications Tel: 020 3757 6880
Elisabeth Cowell/Fiona Norman
Chief Executive's Statement
During the first six months of 2018, Tern focused on building a portfolio of
exciting IoT companies in the UK that the Board believes will be attractive
candidates for acquisition or IPO, with valuations between GBP1 million to GBP10
million.
Our focus remains on delivering consistent investee company turnover growth;
growing and expanding the existing investment business, as measured by
investee company employee number growth; and focusing on year-on-year net
asset growth.
With this in mind, we were pleased to have added an investment in an
additional company to our portfolio during the period. Accordingly, the
absolute net asset value of our holdings increased by 32% during the period.
Notably, since our 2017 half year end, we have increased the number of
portfolio companies from four to six. Our stated objective is to hold twelve
investments by 31 December 2019 within a synergistic portfolio and this
continues to be a focus of the Company.
Whilst acquiring investments has been one focus of the Board, it has also
worked on supporting our portfolio companies and developing strategic
relationships among our portfolio companies, with the aim of successfully
exiting investments within a timeframe of 36 - 60 months after our initial
investment. With this in mind, we delivered follow-on investment and support
amounting to GBP0.7m during the period. In particular, we are pleased by how
Device Authority continues to expand its important market ecosystem and its
strategic alliances and partnerships against our stated objectives outlined
in the 2017 annual report. We are also pleased to see the rapid progress
FundamentalVR has made in converting to a SaaS revenue model and expanding
into the important North America market since receiving our GBP0.8m
investment.
Key to our value creation is the increase in turnover delivered by our
portfolio companies. Pleasingly, the year-over-year growth in the aggregate
revenue of our principal portfolio companies1 increased by 126% from
calendar year 2016 to calendar year 2017 and we expect the growth in the
aggregate revenue of our investee companies from calendar year 2017 to
calendar year 2018 to be of the order of 12%. This growth would increase to
50% if the reduction in turnover from flexiOPS is removed, reflecting an
increase in customer contracts secured and delivered. flexiOPS received the
last of the EU grants in the first six months of 2018 and is now focused on
growing and securing contracts for Wyld Technologies. Another important
indicator in the growth and success of our principal portfolio companies1:
year-over-year employee headcount growth, increased by 55% from calendar
year 2016 to calendar year 2017, and 12% in the six months to June 2018,
highlighting a continuing growth in the portfolio overall.
The period also saw us build up our balance sheet resources. During the
first six months of 2018, Tern retired the convertible loan notes obtained
at the end 2017. We subsequently raised GBP3.1 million to improve our
deployment capabilities. Our strategy was further developed in July 2018,
when we added GBP2.9 million to our balance sheet to bolster our financial
position for upcoming investment opportunities and to provide additional
finance to develop the businesses of the existing portfolio companies. While
our net asset value per share decreased by 16% during the period, primarily
due to our funding activities in late 2017 and early 2018, during the latter
half of this period and looking forward into the second half of the year,
funding activities have been net asset value per share generative.
With the world becoming more connected than ever, we believe that 2018/19
will be an inflection point for the IoT sector. The IoT sector will be
facing greater investment and more widespread adoption of IoT applications.
An increase in IoT devices encompasses a wide range of physical devices with
embedded electronics, software, sensors or actuators, with many of them
allowing objects to be sensed or controlled remotely across networks. As a
result, businesses are becoming the top adopters of IoT solutions, motivated
by lower operating costs and increased productivity. IoT devices play a
crucial role in the management of our global critical infrastructure and
further adoption in critical infrastructure is expected to increase rapidly.
For example, a Business Intelligence report "The IOT Forecast Book 2018"
suggests that by 2023:
· Companies offering IoT platform software and services will bring in
nearly $18 billion annually;
· Total low-power wide-area network (LPWAN) connections will rise to more
than 2 billion devices with about 1 in every 20 IoT devices connected to
an LPWAN;
· The agriculture sector will install nearly 12 million sensors worldwide;
and
· The installed base for robotic systems will approach 6 million globally,
for example.
The Board believes that Tern is building a strong portfolio in industries
that support companies within several of these critical infrastructure
sectors with our companies addressing those segments of these markets where
utilisation and adoption is already occurring.
Note 1: Portfolio company growth excludes Seal and Push, in which Tern has a
<1% holding and minimal influence
Portfolio Review
Device Authority Limited ("Device Authority"): GBP9.9m valuation
Device Authority is an award winning, industry-recognised, international
business delivering innovations in IoT security with offices in the UK and
Silicon Valley. Since our initial investment in Cryptosoft Limited over
three years ago, Device Authority has expanded its product portfolio, world
class team and ecosystem of well-established business partners. Tern today
is a 56.8% shareholder in Device Authority.
We were disappointed that the original objectives for 2017 were delayed by
product integration issues, delays in customer implementation and
restructuring. During the first six months of 2018, Device Authority
continued to build on a strong base of strategic partners, including SyroCon
Consulting and Eonti, Larsen and Toubro Infotech ('LTI') and Gemalto.
Furthermore, it announced support for the Microsoft Azure IoT Hub. Device
Authority also continued to be recognised as a critical force in the global
IoT security market. For example, gaining recognition as a 2018 Emerging
Star in the IOT Security Market by Quadrant Knowledge Solutions. The Board
is pleased with Device Authority's continued focus and is encouraged by the
recent pipeline development for KeyScaler.
Following the announcement of a strategic partnership with Thales, Device
Authority and Thales announced the launch of their joint blueprint to secure
the connected health industry. This IoT market is a strategic focus for
Device Authority as healthcare forecasts predict growth to reach $612bn by
2024, according to a report by Grand View Research, Inc published in 2016.
During the period, Device Authority announced the launch of KeyScaler As A
Service, providing IoT Security in the Cloud. This service enables IoT
service providers and manufacturers to offer their customers the best
security for IoT devices without the infrastructure or running costs
associated with on-premise environments, expanding is ability to make market
for its platform by simplifying customer deployment options.
Device Authority's fundraising activities with US Capital Partners continue
in the US. A fundraise has not yet been completed but interested parties
continue to meet with Device Authority. In the meantime, the Device
Authority shareholders have supported the continued progress of the company
by providing a total of $2.9 million in the form of convertible loan notes
since November 2017, $1.7m of this provided by Tern ($0.5m post 30 June
2018).
As at 30 June 2018, the value of Tern's shareholding in Device Authority has
increased to GBP9.9 million (31 December 2017: GBP9.7 million) as a result of
favourable exchange rate movements.
The annual report and accounts for Device Authority for the year ended 31
December 2017 are expected to be released in September 2018.
FVRVS Limited ('Fundamental VR'): GBP0.8m valuation
Tern invested GBP0.8m in FundamentalVR in May 2018 for a 18.3% holding.
FundamentalVR provides Tern with exposure to the rapidly growing medical
simulation market using low cost open system IoT devices, a market
anticipated to grow to $2.3bn by 2021 according to a 2016 report by
MarketsandMarkets and provides a basis for developing our IoT analytics
pillar of the Tern investment strategy.
FundamentalVR has already begun to use the funds received from Tern to
further refine its SaaS delivery model and expand into the US market.
America is an important strategic market for the company and over the next
six months FundamentalVR will focus on the US medical industry as the next
stage of their ambition of building a world leading SaaS based immersive
surgical simulation and data gathering platform.
It is important to note that the decrease in turnover at FundamentalVR from
GBP1m in the year ended 31 December 2016 to GBP0.3m in the year ended 31
December 2017 reflects the beginning of the change in its business model
from one of bespoke sales to that of a growing subscription-based recurring
revenue model which is securing and growing the value of the business.
flexiOPS Limited ("flexiOPS"): GBP78,000 valuation
flexiOPS, a wholly-owned Tern investment, completed its historic portfolio
of EU funded research and development cloud projects during 2018. It has now
re-focused on supporting the networking element of our IoT enablement
strategy by aiding the growth and development of the Wyld Technology Limited
("Wyld Technology") ad-hoc mesh networking offering following their
acquisition in late 2017.
During the first six months of 2018, Wyld Technology has focused on building
out its development team and product platform, and now has a product roadmap
that is in line with current market requirements via its ability to deliver
and collect critical data via its ad-hoc mesh networking platform in the all
critical "last mile:".
Mesh networks enable data to be transmitted from different devices
simultaneously. This topology can withstand high traffic and even if one of
the components fail, an alternative is always available, ensuring data
transfer is not affected. As mesh network topology is self-forming and
self-healing it is more efficient at creating robust ad-hoc networks;
providing assured quality to ensure continuity of service.
InVMA Limited ("InVMA"): GBP0.6m valuation
InVMA, a company in which Tern has a 50% holding, delivers IoT applications,
based on the industry leading PTC/Thingworx development platform that
deliver real business value and competitive advantage to its customers. Its
founding team combines years of world-class industrial design expertise with
the Thingworx platform to create state of the art IoT systems and products
in the medical and industrial IoT market segments.
Since our investment in late 2017, InVMA, as part of its business
transformation, has launched AssetMinder, a product which monitors and
manages data from all types of sensors that provides alerts when
pre-determined thresholds or rules have been met or broken. In the first
half of 2018, InVMA has focused on generating AssetMinder product sales to
drive value creation. InVMA also announced the integration of InVMA's
AssetMinder with Device Authority's KeyScaler which is an important proof
point of Tern's influence in integrating the products and technologies of
its portfolio companies.
Real-time monitoring's many benefits are fuelling IoT growth and 69% of
manufacturers are relying on real-time monitoring to increase the accuracy
of tracking production time, downtime, total parts created, rejects and
parts remaining to be produced, according to a 2018 report by IQMS
Manufacturing Software.
According to a report by Grand View Research published in 2016, the global
industrial IoT market is expected to reach US$933.62 billion by 2025 from
$109.28bn in 2016. Growth in this segment can be attributed to the
developing cloud computing market, increasing government initiatives for
supporting sustainable smart factories growth, and rising number of
connected devices that generate a large amount of data. InVMA have also
secured new strategic partnerships and contract wins in key segments of this
market already, including the announcement of a contract with ESAB, part of
the Colfax Group, to support the architecture of a new ESAB WorldCloud
platform which will be powered my Microsoft Azure IOT and PTC's ThingWorx
platform.
The annual report and accounts for InVMA for the year ended 31 December 2017
are expected to be released in September 2018.
Seal Software Group Limited ("Seal Software"): GBP125,439 valuation
During the first half of 2018, Seal Software, a company in which Tern holds
less than 1%, a leader in contract discovery and analytics, has continued to
grow and develop its business with numerous awards, new contracts and
strategic partnerships announced. Specifically:
· Seal Software unveiled a global partnership with DocuSign to automate
and connect the process of how agreements are prepared, signed, enacted
and managed.
· Seal Software won the award for Outstanding Data Analytics Solution at
the annual Big Data Excellence awards in May 2018. Seal Software was also
named a 2018 Cool Vendor in Content Services by Gartner.
· The annual report and accounts for Seal Software for the year ended 31
December 2017 are expected to be released in September 2018.
Push Technology Limited ("Push Technology"): GBP11,326 valuation
We have been informed by management that Push Technology, a company in which
Tern holds less than 1%, continues on its path to profitability following a
2017 strategic realignment from a product focused company to a customer
centric company outwardly focused on expanding into new markets. This
includes a reduction in the sales cycle and a move to work more efficiently
and control costs.
The annual report and accounts for Push Technology for the year ended 31
December 2017 are expected to be released in September 2018.
Financial
During the six months ended 30 June 2018, the Board focused on strengthening
the balance sheet to support the existing portfolio companies and to enable
investments in new exciting growth IoT companies. As a result, the total
assets of Tern increased to GBP14.2 million at 30 June 2018, compared to GBP11.1
million at 31 December 2017. The total assets at 30 June 2018 included a
cash balance of GBP1.5m and net current assets of GBP2.4m, of which GBP0.9m
related to the convertible loans issued to Device Authority during 2017 and
2018.
The improved loss for the period reflects a close focus on cost management,
with monthly administrative costs over the period remaining comparable to
the monthly burn rate in the year ended 31 December 2017. A small increase
in the fair value of the investment portfolio was recognised, reflecting a
positive exchange rate variance for Device Authority Limited (GBP0.2m) and a
100% increase in the valuation of Seal Software Group Limited following a
recent fundraise.
The net asset value per share fell slightly during the period, caused by the
conversion of the loan note in 2017 with shares issued in 2018 and a further
conversion in January 2018.
Post balance sheet events
A placing of 11,192,307 ordinary shares at an issue price of 26 pence
raising gross proceeds of GBP2.9m was completed in July 2018, which has
strengthened the cash and current asset position of the Company. The
proceeds place the Company in a stronger financial position for upcoming
investment negotiations and also provides additional finance to develop the
existing portfolio company businesses.
Outlook
The Board remains committed to increasing our investment in the IoT market
in the UK, focusing on adding new technology companies to the portfolio,
including UK companies delivering platforms that include AI and machine
learning for IoT, while continuously supporting and growing the existing
portfolio. Adding an additional technology strong director to the Tern team
will help support this aim.
We have set for ourselves a financial benchmark of achieving an average of
20% year-on-year growth in portfolio value by year end 2019 and at the half
year we have achieved a 13% growth in the portfolio and stand well
positioned to deliver over the full year with significant cash balances
remaining to deploy.
By changing the traditional venture capital model and making our expertise
accessible to a wider group of companies we believe we are breaking new
ground. Our partnership approach offers Tern investors access to exciting
technology companies which may not otherwise be available to them. The
placings of GBP3.1 million in the first six months of 2018, gives us
additional capacity and negotiating strength and is a validation of that
model, having attracted support from high profile new investors, as well as
the strong existing shareholder base.
We feel confident of making further progress during the second half of 2018
and look forward to making more announcements about business performance,
new developments and improvements for each of our portfolio companies and
reporting exciting new additions to the Tern portfolio.
Finally, I wish to thank all shareholders for their support and acknowledge
the hard work of the all the directors and our advisors.
Al Sisto
Chief Executive Officer
14 September 2018
Unaudited Statement of Comprehensive Income
for the 6 months ended 30 June 2018
Notes 6 months to 6 months to 12 months
30 June 30 June to 31
2018 2017 December
2017
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
Revenue 64,245 42,639 97,940
Movement in fair value 282,987 - (757,705)
of investments
Gross Profit/(Loss) 347,232 42,639 (659,765)
Administration costs (571,952) (522,105) (1,030,60
3)
Operating loss (224,720) (479,466) (1,690,36
8)
Finance 4,376 10,484 1,020
income
Finance costs (908) (134) (207)
Loss before tax (221,252) (469,116) (1,689,55
5)
Tax - - -
Loss for the period (221,252) (469,116) (1,689,55
5)
Earnings per share 6
Basic (0.1)p (0.4)p (1.4)p
Diluted (0.1)p (0.4)p (1.4)p
Unaudited Statement of Financial Position
as at 30 June 2018
30 June 30 June 31
December
2017
2018 2017
(Unaudited) (Unaudited) (Audited)
Note GBP GBP GBP
Assets
Investments held for 11,549,920 10,601,330 10,218,62
trading 5
Loans to - - -
investee
companies
Non-current 11,549,920 10,601,330 10,218,62
assets 5
Current
assets
Trade and 1,133,132 93,763 576,849
other
receivables
Cash and 1,538,652 335,966 273,826
cash
equivalents
2,671,784 429,729 850,675
Total assets 14,221,704 11,031,059 11,069,30
0
Equity
attributable
to the
Company's
equity
holders
Share 7 1,346,665 1,325,614 1,330,225
capital
Share 16,833,172 12,420,593 13,237,36
premium 2
Loan note - 17,479 123,482
equity
reserve
Share option and - 1,126,581 175,982
warrant reserve
Retained (4,237,080) (4,103,031) (4,286,24
earnings 9)
13,942,757 10,787,236 10,580,80
2
Current
liabilities
Trade 34,024 542 47,600
payables
Accruals and 244,923 168,077 229,564
other
payables
278,947 168,619 277,164
Non-current
liabilities
Borrowings - 75,204 211,334
Total 278,947 243,823 488,498
liabilities
Total equity 14,221,704 11,031,059 11,069,30
and 0
liabilities
Unaudited Changes in Equity
as at 30 June 2018
Share Share Loan Option Retained Total
note and
warrant
equity
capital premium reserve reserve earnings equity
GBP GBP GBP GBP GBP GBP
Balance at 1,325,27 12,390,31 20,650 1,088,5 (3,637,0 11,187,
1 January 0 0 95 86) 739
2017
Total - - - - (469,116 (469,11
comprehensi ) 6)
ve income
Issue of 344 30,283 - - - 30,627
share
capital
Transfer on - - (3,171) - 3,171 -
conversion
of
convertible
loan notes
Share based - - - 37,986 - 37,986
payment
charge
Balance at 1,325,61 12,420,59 17,479 1,126,5 (4,103,0 10,787,
30 June 4 3 81 31) 236
2017
Total - - - - (1,220,4 (1,220,
comprehensi 39) 439)
ve income
Issue of 4,611 941,925 - - - 946,536
share
capital
Issue of - - 112,563 - - 112,563
convertible
loan note
Share and - (125,156) - - - (125,15
loan issue 6)
costs
Transfer on - - (6,560) - 6,560 -
conversion
of
convertible
loan notes
Transfer of - - - (713,32 713,326 -
lapsed and 6)
exercised
warrants
Transfer of - - - (199,28 199,287 -
option 7)
reserve
Share based - - - (37,986 118,048 80,062
payment )
charge
Balance at 1,330,22 13,237,36 123,482 175,982 (4,286,2 10,580,
31 December 5 2 49) 802
2017
Total - - - - (221,252 (221,25
comprehensi ) 2)
ve income
Issue of 16,440 3,953,310 - - - 3,969,7
share 50
capital
Share and - (357,500) - - - (357,50
loan issue 0)
costs
Conversion - - (123,482 - - (123,48
of ) 2)
convertible
loan notes
Transfer of - - (175,98 175,982 -
lapsed 2)
warrants
Share based - - - - 94,439 94,439
payment
charge
Balance at 1,346,66 16,833,17 - - (4,237,0 13,942,
30 June 5 2 80) 757
2018
Unaudited Statement of Cash flows
for the 6 months ended 30 June 2018
6 months to 6 months to 12 months
30 June 2018 30 June 2017 to 31
December
2017
(Unaudited) (Unaudited) (Audited)
Note GBP GBP GBP
Cash flows from
operating activities
Net cash used in 8 (503,436) (438,760) (783,866)
operations
Purchase of (1,048,309) - (375,000)
investments
Loan to investment (465,240) - (402,436)
company
Net cash from (2,016,985) (438,760) (1,561,302
operating activities )
Cash flows from
financing activities
Proceeds on issue of 3,100,000 - 603,110
shares
Proceeds on issue of 550,000 - 550,000
loan note
Share issue expenses (357,500) - (125,156)
and Loan note issue
expenses
Proceeds from - 2,377 34,303
exercise of warrants
Proceeds from 8,500 9,000 9,000
exercise of options
Repayment of loan (20,000) - -
stock
Interest received 811 498 1,020
Net cash from 3,281,811 11,875 1,072,277
financing activities
Increase/(decrease) 1,264,826 (426,885) (489,025)
in cash and cash
equivalents
Cash and cash
equivalents at
beginning of period
273,826 762,851 762,851
Cash and cash 1,538,652 335,966 273,826
equivalents at end
of period
Notes to the unaudited interim statement
for the 6 months ended 30 June 2018
1) General information
The Company is a public limited company which has its ordinary shares
admitted to trading on the AIM market operated by the London Stock Exchange
and is incorporated in England and Wales.
The address of its registered office is 27-28 Eastcastle Street, London, W1W
8DH. Items included in the financial statements of the Company are measured
in Pound Sterling which is the currency of the primary economic environment
in which the entity operates. The financial statements are also presented in
Pound Sterling which is the Company's presentational currency.
2) Basis of preparation
The interim financial statements of Tern Plc have been prepared in
accordance with IAS 34, Interim Financial Reporting, as adopted by the
European Union (EU). They do not include all of the information required for
full annual financial statements, and should be read in conjunction with
Tern plc's audited financial statements for the year ended 31 December 2017.
The financial information for the year ended 31 December 2017 set out in
this interim report does not constitute statutory accounts as defined in
Section 434 of the Companies Act 2006. The Company's statutory financial
statements for the year ended 31 December 2017 have been filed with the
Registrar of Companies and can be found on the website www.ternplc.com [1].
The auditor's report on those financial statements was unqualified and did
not contain statements under Section 498 (2) or Section 498 (3) of the
Companies Act 2006.
These interim financial statements have been prepared under the historical
cost convention and have been approved for issue by the Board of Directors.
3) Going concern
The financial statements have been prepared on the going concern basis.
The directors have a reasonable expectation that the Company has adequate
resources to continue operating for the foreseeable future. For this reason,
they continue to adopt the going concern basis in preparing the Company's
financial statements
4) Critical accounting judgements
Estimates and judgements are continually evaluated and are based on
historical experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances.
The Company makes estimates and assumptions concerning the future. The
resulting accounting estimates will, by definition, rarely equal the related
actual results. The estimates and assumptions that have a significant risk
of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are outlined below.
Income taxes
Judgement is required in determining the Company's provision for income tax.
Where the final tax outcome is different from the amounts that were
initially recorded, the differences will impact the income tax and deferred
tax provisions in the period in which such determination is made.
Fair value of financial instruments
The Company holds investments that have been designated as held for trading
on initial recognition. Where practicable the Company determines the fair
value of these financial instruments that are not quoted (Level 3) using the
most recent bid price at which a transaction has been carried out. These
techniques are significantly affected by certain key assumptions, such as
market liquidity. Given the nature of the investments being early stage
business, other valuation methods such as discounted cash flow analysis
assess estimates of future cash flows to derive fair value estimates cannot
always be substantiated by comparison with independent markets and, in many
cases, may not be capable of being realised immediately.
Share based payments
The calculation of the fair value of equity-settled share based awards and
the resulting charge to the statement of comprehensive income requires
assumptions to be made regarding future events and market conditions. These
assumptions include the future volatility of the Company's share price.
These assumptions are then applied to a recognised valuation model in order
to calculate the fair value of the awards.
5) Segmental reporting
The accounting policy for identifying segments is based on internal
management reporting information that is regularly reviewed by the chief
operating decision maker, which is identified as the Board of Directors.
In identifying its operating segments, management generally follows the
Company's service lines which represent the main products and services
provided by the Company. The directors believe that the Company's continuing
investment operations comprise one segment.
6) Earnings per share
Earnings per share is calculated by reference to the weighted average shares
in issue as follows:
6 months to 6 months to 12 months to
30 June 2018 30 June 2017 31 December
2017
Weighted average
number of ordinary
shares (see note
below):
For calculation of 199,609,225 119,668,783 124,586,665
basic earnings per
share
For calculation of 199,609,225 119,668,783 124,586,665
fully diluted
earnings per share
The same number of shares is used for the calculation of the diluted loss
per share as for the basic loss per share for the six months to 30 June 2018
as the losses in these periods have an anti-dilutive effect.
7) Share capital
30 June 2018 30 June 2017 31 December 2017
Number Number Number
Issued and fully
paid:
Ordinary shares 225,484,580 120,230,677 143,286,855
of GBP0.0002
Deferred shares 42,247 42,247 42,247
of GBP29.999
Deferred shares 34,545,072 34,545,072 34,545,072
of GBP0.00099
GBP GBP GBP
Issued and fully
paid:
Ordinary shares 45,097 24,046 28,657
of GBP0.0002
Deferred shares 1,267,368 1,267,368 1,267,368
of GBP29.999
Deferred shares 34,200 34,200 34,200
of GBP0.00099
1,346,665 1,325,614 1,330,225
The deferred shares have negligible value, being subject to restrictions as
to voting, participation and redemption according to the new Articles of
Association then adopted, nor are they quoted on the AIM market of the
London Stock Exchange.
8) Note to the cash flow statement
6 months to 30 6 months to 30 12 months to
June 2018 June 2017 31 Dec 2017
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
Loss for the (221,252) (469,116) (1,689,555)
period
Adjustments for
items not
included in
cash flow:
Movement in (282,987) - (17,621)
fair value of
investments
Exchange rate - - 775,326
loss
Share based 94,439 37,986 118,048
payment charge
Finance expense - - 207
Finance income (4,376) (10,484) (1,020)
Operating cash (414,176) (441,614) (814,615)
flows before
movements in
working capital
Adjustments for
changes in
working
capital:
- (91,043) 6,752 (73,898)
(Increase)/decr
ease in trade
and other
receivables
(excluding loan
to investee
companies)
- 1,783 (3,898) 104,647
Increase/(decre
ase) in trade
and other
payables
Cash used in (503,436) (438,760) (783,866)
operations
9) Availability of interim results
Copies of this report will be available from the Company's website
www.ternplc.com [1].
Shareholder Conference Call
Tern will be hosting a shareholder conference call with accompanying
presentation slides at 10:30 AM GMT on Thursday 20 September 2018.
The call will be hosted by the Tern's CEO, Al Sisto, who will discuss the
recent results, as well as answering submitted shareholder questions. To
submit a question, please email tern@redleafpr.com no later than 24 hours
before the scheduled call time. Unfortunately, the Company will be unable to
accept questions submitted after 10:30 AM GMT on 19 September 2018. Al Sisto
will aim to answer as many pre-submitted questions as possible during the
call.
Instructions
To participate in this conference call, please enter your local dial-in
number [2] and 64 70 02 62 followed by the hash key on any telephone device.
Please note that all lines will be muted with the exception of the Tern
host.
A presentation will be live to accompany the call once it has commenced, and
be available to view on desktop, smart phones and tablets during the event,
but will require a Cisco WebEx [3] application to be installed on certain
devices.
To view the presentation on a desktop computer, please click on this link
https://arkadin-event.webex.com/arkadin-event/onstage/g.php?MTID=ee37e5f4109
43dfc6deaddf89c24e6577 [4], followed by event password 301 240 867. If you
wish to view the presentation on a smartphone or tablet, please first
download the WebEx application and follow the instructions on the screen,
entering the password 702 631 511 for access.
It is advisable to check compatibility and log in 10 minutes ahead of the
call to ensure a smooth experience.
A recording of the call will be available on the Company's website as soon
as practicable.
ISIN: GB00BFPMV798
Category Code: IR
TIDM: TERN
LEI Code: 2138005F87SODHL9CQ36
Sequence No.: 6028
EQS News ID: 724049
End of Announcement EQS News Service
1: https://link.cockpit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=6e8b33afd1df64b06916721dbe62d785&application_id=724049&site_id=vwd_london&application_name=news
2: https://link.cockpit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=613eca41519d9d6f5215db81483fc182&application_id=724049&site_id=vwd_london&application_name=news
3: https://link.cockpit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=4672f19e6c5415cb987f4d1e1b707fbc&application_id=724049&site_id=vwd_london&application_name=news
4: https://link.cockpit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=fb9a830f773472994cb912f3da9906bd&application_id=724049&site_id=vwd_london&application_name=news
(END) Dow Jones Newswires
September 17, 2018 02:02 ET (06:02 GMT)
Tern (LSE:TERN)
Historical Stock Chart
From Mar 2024 to Apr 2024
Tern (LSE:TERN)
Historical Stock Chart
From Apr 2023 to Apr 2024
