1 February 2022

Cordel Group PLC

("Cordel" or the "Company" or the "Group")

Interim Results

Cordel Group PLC (AIM: CRDL), the Artificial Intelligence platform for transport corridor analytics, announces unaudited results for the six months ending 31 December 2021, and the appointment of Mr Michael Turner to the (non-Board) role of Chief Revenue Officer (CRO).

*Constant currency reflects the results had the underlying transactional currencies, (i.e. USD, AUD and GBP) remained constant across the full financial year

Highlights:

·    Total revenue down 13% in reported currency and 11% at constant currency. 

·    Total expenses increased by 23% (27% at constant currency) as the Company invested in additional engineers and sales staff, in response to the large-scale contracts won in the UK and USA.

·    As at 31 December 2021, cash balance was £935,049 and net assets were £2,488,337.

·    Appointment of Mike Turner in a new leadership role, Chief Revenue Officer to strengthen the alignment between marketing, sales and customer support.

·    UK achievements during the period include a six-and-a-half-year contract with Network Rail to replace the UK's National Gauging Database (NGD), a contract with Network Rail High Speed and Network Rail has approved Cordel technology for use in clearance gauging across the UK rail network.

·    USA achievements include expansion of relationship with Class 1 Railroad customer and a partnership with leading US rail inspection company Holland, L.P to expand US market presence.

·    Large backlog of work being carried into second half, Group targeting to be cash flow positive in fourth quarter.

Ian Buddery, Chairman, Cordel, said: "We have delivered positive progress with contract wins and exciting partnerships during the period, however, the interim results are currently running behind our plan. As stated in our December trading update, our business was impacted by Covid in the second half, with border closures in Australia and staff at our key customers in self-quarantine that delayed projects in the USA.  However, the board has also recognised that we can benefit from adding significant customer facing expertise to better manage the large and complex customer accounts we are now dealing with which, in the period under review would have helped plan for and mitigate revenue slippage.

"Therefore, we have appointed a Chief Revenue Officer. The CRO will have direct involvement with customers to map their internal procurement processes, ensure disciplined sales management and deliver comprehensive account planning. We are delighted to have secured an experienced and capable individual to fill this new role, Mike Turner. Mike has been a highly successful senior sales manager in the software industry since 1994, working for major multi-nationals and early-stage businesses. Based in London, Mike will be responsible for all revenue across the Group and is tasked with securing more revenue and growth in line with shareholder expectations.

"Despite today's results, we look forward with confidence. In the last six months, among other positive steps, we have been awarded a six-and-a-half-year contract with Network Rail to replace the UK's National Gauging Database, expanded our relationship with a major US customer, and formed a partnership with Holland LP in the US.  The Group is carrying a large backlog of work into the second half, which we expect to produce growth for the full year. We are targeting to be cashflow positive in the fourth quarter."

Enquiries:

About Cordel

Cordel offers a patented cloud-based platform for master data management and business analytics, together with specialist hardware and software for capturing, analysing and reporting on large datasets within the transport sector, employing sophisticated artificial intelligence algorithms.

Further information on the Company is available at: www.cordel.ai 

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

Cordel Group plc

Review of operations by the Chief Executive Officer

31 December 2021

Cordel Group Plc ("the Group") offers a patented cloud-based platform for master data management and business analytics, together with specialist hardware and software for capturing, analysing and reporting on large datasets within the transport and infrastructure sectors, employing sophisticated artificial intelligence algorithms.

Overview of results

During the half year the Company secured new contracts in the UK, USA and Australia, the majority of revenue from which will occur in 2022.  Ongoing sales activity resulted in a large opportunity pipeline with further contracts expected to be secured in the June half.

Resources were invested in continuing development of the Cordel Artificial Intelligence analytics platform and in the development of a new Nextcore "Lumos" LiDAR product, released in December 2021.

Revenue for the half year is summarised as follows:

Underlying EBITDA for the period was a loss of £1.264 million.

Ongoing operations

The Company operates from offices in London, UK and Newcastle, Australia with staff in these locations and in the USA.  The Company has customers in Australia, New Zealand, UK, Japan and the USA.  As of 31 December 2021, the Company had cash and receivables totalling £1.08m.

Outlook

The Company continues to be awarded new contracts following competitive bid processes. This results in steady growth of the total mileage of railway track under long-term data management and, combined with new analytic services released in 2021 and planned for 2022, will produce growth in recurring revenue.   

Nicholas Smith

Chief Executive Officer

1 February 2022

Cordel Group PLC

Review of operations by the Chief Financial Officer

31 December 2021

A summary of the Group's results are as follows:

The above consolidated statements of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes

Revenue

Total revenue for the period decreased by 13% to £0.63 million. 

Operating expenses

Overall operating increased by £0.29 million compared to the previous corresponding period primarily as a result of increases in staff and external parties engaged in the development of the Cordel and Nextcore products.  Staff expenses increased £0.16 million to £0.98 million.  Insurance costs increased by 110%  due to COVID-19 impacts on the global insurance market.

As at 31 December 2021, Cordel employed 33 staff across Australia, the UK and USA.

Underlying EBITDA for the period was a loss of £1.26 million, prior period was £0.68 million.

Finance and other non-operating expenditure were £0.011 million for the period relating to the amortisation of right to use assets, primarily property leases.

The loss after tax for the period was £1.35 million, an increase of 84% compared to £0.73 million in the previous corresponding period.

Balance sheet, cash and working capital

The Group balance sheet shows cash resources of £0.93 million and receivables of £0.14 million as at 31 December 2021.  Cash outflow from operating activities was £0.54 million.

Underlying basis of EBITDA

The Group manages its operations by looking at the underlying EBITDA which excludes the impact of a number of one-off and non-cash items as this, in the Board's opinion, provides a more representative measure of the Group's performance. A reconciliation between the reported loss before tax and underlying EBITDA is included at note 6 to the financial statements.

Robert Lojszczyk

Chief Financial Officer

1 February 2022

Cordel Group plc

Consolidated statements of profit and loss and other comprehensive income

For the period ended 31 December 2021

The above consolidated statements of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes

Cordel Group plc

Consolidated balance sheet as at 31 December 2021

The above consolidated balance sheet should be read in conjunction with the accompanying notes

The interim financial statements of Cordel Group plc (company number 1109701 (England and Wales)) were approved by the Board of Directors and authorised for issue on 1 February 2022.  They were signed on its behalf by:

Ian Buddery                                                                            Jonathan Macleod

Chairman                                                                                Director

1 February 2022                                                                     1 February 2022

Cordel Group plc

Consolidated statements of changes in equity

For the period ended 31 December 2021

v The share premium account is used to recognise the difference between the issued share capital at nominal value and the share capital received, net of transaction costs.

Cordel Group plc

Consolidated statements of changes in equity (cont'd)

For the period ended 31 December 2021

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes

Cordel Group plc

Consolidated statements of cash flows

For the period ended 31 December 2021

The above consolidated statements of cash flows should be read in conjunction with the accompanying notes

Cordel Group plc

Notes to the consolidated financial statements

For the period ended 31 December 2021

Note 1. General information

The financial statements cover Cordel Group plc ('Company') as a consolidated entity consisting of Cordel Group plc and the entities it controlled at the end of, or during, the period (referred to as the 'Group'). The financial statements are presented in Pounds Sterling, which is Cordel Group plc's functional and presentation currency.

The Company was incorporated on 6 December 2017 as a private company, Maestrano Group Limited. On 11 May 2018, the Company converted to a public company, Maestrano Group plc and on 30 May 2018 was admitted onto the Alternative Investment Market ('AIM'). On 19 April 2018, as part of a group reorganisation, the Company acquired 100% of the ordinary shares of Maestrano Pty Ltd from the existing shareholders and became the immediate and ultimate parent of the Group.  On 31 October 2019, Maestrano Group plc acquired 100% of the shares in Airsight Holdings Pty Limited, an Australian based company.

On the 18 November 2021, Maestrano Group plc changed its name to Cordel Group plc.

Cordel Group plc is a listed public company limited by shares, incorporated and domiciled in England and Wales. Its registered office and principal place of business are:

Registered office                                          Principal place of business

10 John Street                                                2/2 Frost Drive

London WC1N 2EB                                        Mayfield West NSW 2304

United Kingdom                                              Australia

A description of the nature of the Group's operations and its principal activities are included in the directors' report, which is not part of the financial statements. The financial statements were authorised for issue, in accordance with a resolution of directors, on 1 February 2022. The directors have the power to amend and reissue the financial statements.

Note 2. Significant accounting policies

These financial statements for the interim half-year reporting period ended 31 December 2021 have been prepared in accordance with International Accounting Standards IAS 34 'Interim Financial Reporting'.

These interim financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these financial statements are to be read in conjunction with the annual report for the year ended 30 June 2021 and any public announcements made by the Company during the interim reporting period.

New or amended Accounting Standards and Interpretations adopted

The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the International Accounting Standards Board that are mandatory for the current reporting period.   Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

Going concern

The financial statements have been prepared assuming the Group will continue as a going concern. Under the going concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future. In assessing whether the going concern assumption is appropriate, the directors have considered the Group's existing working capital and are of the opinion that the Group has adequate resources to undertake its planned program of activities for the 12 months from the date of approval of these financial statements. Further details of the directors' considerations in relation to going concern are included in the directors' report.

Note 3. Operating segments

Identification of reportable operating segments

The Group operates in one segment being provision of data integration and analytic services. This operating segment is based on the internal reports that are reviewed and used by the Board of Directors (who are identified as the Chief Operating Decision Makers ('CODM')) in assessing performance and in determining the allocation of resources.

The operating segment information is the same information as provided throughout the consolidated financial statements and are therefore not duplicated.

Note 4. Revenue from contracts with customers

In FY2021 Government grants and rebates predominantly related to Australian and NSW Government support for the COVID-19 pandemic

Note 11.  Equity - dividends

There were no dividends paid, recommended or declared during the current or previous financial period.

Note 12.  Fair value measurement

The carrying amounts of trade and other receivables and trade and other payables are assumed to approximate their fair values due to their short-term nature.

The fair value of financial liabilities is estimated by discounting the remaining contractual maturities at the current market interest rate that is available for similar financial liabilities.

Note 13. Related party transactions

Parent entity

The parent entity and ultimate parent entity is Cordel Group plc. There is no ultimate controlling party.

Transactions with related parties

There were no transactions with related parties during the current and previous financial period.

Receivable from and payable to related parties

There were no trade receivables from or trade payables to related parties at the current and previous reporting date.

Loans to/from related parties

There were no loans to or from related parties at the current and previous reporting date.