Full Year Results (Unaudited)

14 August 2014

Rosslyn Data Technologies plc

("Rosslyn", the "Company" or the "Group")

 

 

Full Year Results (Unaudited)

 

Rosslyn Data Technologies plc (AIM: RDT), the provider of a leading cloud-based enterprise data analytics platform, which was admitted to AIM on 29 April 2014, today announces its maiden, unaudited, preliminary results for the year ended 30 April 2014.

 

 

Highlights

 

·      Encouraging progress made since the Company's IPO in April 2014:

-       Results in line with expectations;

-       We have grown our customer base by over 50% as our partnership strategy brings an expanded client base;

-       We continue to see an increase in revenues from existing clients as the 'land and expand' strategy bears fruit;

-       We are pleased to announce that the Company is in advanced talks with a number of new partners and hope to be

 able to make a further announcement about partner arrangements soon.

 

·      Revenues up 12.6 per cent to £2.1m (2013: £1.8m)

 

·      Strong cash position at year end of £9.0m (2013: £0.1m) - £10m (gross) raised through a placing at IPO, providing a solid base from which to grow the business and exploit market opportunities

 

·      Pre-tax loss of £3.0m, after a one-off exceptional charge of £0.2m

 

·      Continued focus on R&D in the year to 30 April 2014, as part of the Group's commitment to investing in the development of its product offering

 

·      First patent filed in the period, for Rosslyn's unique machine learning data technology, with a further application expected in 2014-15

 

·      Looking ahead, the Board is confident about the Group's growth prospects

 

 

Charles Clark, CEO of Rosslyn, said, "Following Rosslyn's admission to AIM in April, I am pleased to report that the Group has made good progress and has recorded an encouraging set of results for the year ended 30 April 2014.

 

"We are focused on investing in the business to develop our team, services and client base to ensure that our product offering remains market-leading; our focus on investing in our products, sales and marketing means that we can capitalise fully on emerging possibilities within our sector.  During the year, we filed our first patent, for our unique machine learning language and continue to invest in Intellectual Property protection, with a further patent application expected in 2014-15.

 

"We have a broad pipeline of new business and we are excited about the year ahead. Management is confident that the business is trading in line with expectations."

 

Enquiries:

 

Rosslyn Data Technologies plc	Charles Clark, Chief Executive Officer Francis Reid, Chief Financial Officer	+44(0)20 7138 3204
Blytheweigh - Financial PR	Tim Blythe	+44(0)20 7138 3205 +44(0) 7816 924 626
	Alex Shilov	+44(0)20 7138 3553 +44(0) 7989 394 027
Cenkos Securities - Nominated Advisor, Broker	Stephen Keys Michael Johnson	+44(0)20 7397 8926

 

Notes to Editors

 

Rosslyn Data Technologies, (AIM: RDT), a leading provider of a cloud-based enterprise data analytics platform, was founded in 2005 by Charles Clark and Hugh Cox. The Company provides analytical services by combining four key technologies: data extraction, cleansing, enrichment and visualisation, through a single cloud platform enabling users with detailed data to make more informed decisions. Rosslyn's RAPid platform is the Group's primary product available to its multinational customers, including Aberdeen Asset Management plc, Babcock Corporate Services plc, Xerox Business Services and Coca-Cola Enterprises, Inc. Rosslyn Data Technologies plc is the ultimate holding company of the Group and owns 100 per cent of Rosslyn Analytics Limited.

 

Further information can be found on the Company's website at: http://www.rosslynanalytics.com/ or @RosslynBI

 

 

 

Chairman's Statement

 

I am pleased to report results for the year ended 30 April 2014, the Company's first set of results since its admission to AIM on 29 April 2014, when we also raised £10 million (gross) through a Placing of Ordinary Shares.  This has been a significant period for Rosslyn and the funds raised leave us well positioned to exploit the market opportunities ahead of us.  Moreover, our admission to AIM significantly increased the Company's profile and is proving advantageous in helping us to exploit business opportunities. 

 

Prior to the listing, Rosslyn Data Technologies plc acquired Rosslyn Analytics Ltd, thereby becoming the new holding company for Rosslyn Analytics Ltd and Rosslyn Analytics Inc. 

 

Results are in line with expectations, with revenues up 12.6 per cent to £2.1 million (2013: £1.8million) and gross profit up 7.8 per cent to £1.7 million. Losses for the year, before exceptional items, increased by £1.2 million as we continued our investment in both people and technology. £0.3 million of this figure arose from the cost of granting share options to staff. The Board firmly believes it is important for as many employees as possible to have an equity stake in the business.  At the time of listing, all staff with at least three months' service were given options to have a stake in the Company.

 

At 30 April 2014, the Group had a robust cash position of £9.0 million (2013: £0.1 million), attributable to proceeds from our placing at the time of IPO, which will be used for further investment in our technology, sales and marketing.

 

We continued to invest in research and development in 2013-14 - a key part of our growth strategy - with tax qualifying R&D spend up over 20%, to ensure that our product offering remains market-leading; our focus on investing in our products, sales and marketing means that we can capitalise fully on emerging possibilities within our sector.

 

During the year, we filed our first patent, for our unique machine learning language and continue to invest in Intellectual Property protection, with a further patent application expected in 2014-15.

 

Rosslyn has established itself as a leader in delivering cloud-based business data analytics to customers through its proprietary RAPid platform, a scalable cloud-based solution that extracts, combines and synchronises data from hundreds of sources to enable businesses to effectively analyse and utilise their data, resulting in cost saving, greater efficiency and better decision making.

 

The Group has made encouraging progress in this financial year and is gaining traction and momentum within the cloud-based analytics sector.  As testament to the strength of our product offering, Lindsay Smith, Secretary General of Eurocloud UK, the SaaS and cloud computing community of industry experts, said,

 

"Rosslyn Analytics is a fine example of British innovation. From its inception, Rosslyn Analytics wasn't just one of the early originators of cloud-based analytics delivered as-a-service. It clearly helped to shape the market here and overseas by successfully demonstrating the rapid business value of cloud computing to companies and governments around the world." 

 

At Rosslyn, our people are a valuable asset and the Directors would like to thank everyone at the Company for their hard work and dedication over the past year.  Their efforts are hugely appreciated and I look forward to continuing to work together as our Company grows further.  We have schemes in place to ensure that employees can benefit from the Group's financial performance and that their vision and efforts are aligned with those of our shareholders. 

 

The Board is confident about further progress in the next financial year and I look forward to updating shareholders on our development in due course. 

 

John O'Hara

 

Chairman

 

Chief Executive Officer's Report

 

2013-14 was a year of consolidation as we prepared the business for listing. Revenues increased by 12.6 per cent to £2.1 million, in line with expectations. The IPO was accompanied by a placing of new shares which raised £10 million (gross). These funds will allow us to make an investment into our sales and marketing functions, both areas we have strengthened in recent months with the appointment of new management. I'm sure this new leadership and the resources now available to support these teams will produce a material increase in our sales in the coming years.

 

The funds raised at the IPO will also be directed at investment to support our exciting research and development plans.  The team, led by Quynh Nguyen, who was appointed to the position of Chief Technology Officer during the year, continues to develop the suite of products available on the RAPid platform.  Recruitment of high quality software engineers remains a challenge but we intend to add up to eight engineers to the team, as and when we are able to find the right individuals.

 

Whilst we continue to work on developing our direct sales efforts, we are excited by the potential of the partnership route to market, particularly in the medium to longer term. Since the IPO we have developed a number of new partnership arrangements. We hope to be able to make a more concrete announcement soon about these developments. Some are more advanced than others, and not all will develop into material revenue streams, but the Board believes that diversifying this revenue stream is important and accelerates our route to market. In early 2013 we signed an agreement with Xerox Corporation Ltd ("Xerox") and 2013-14 was the first full year of that partnership. Work took place across a broad suite of potential products, many of which we hope will see full market launches in the coming year and beyond. The revenue potential of these products is substantial but the development and market testing process, controlled by Xerox, is measured on a monthly, not weekly, basis.

 

Since the year end we have signed a series of new contracts. Notable amongst this new business was the contract with BIY Cloud, which has brought a highly diversified client base and the opportunity to accelerate the number of 'apps' on the RAPid platform. Uptake of our recently launched self-service product has been encouraging.

  

I look forward with confidence to the new financial year. We have started to deploy the funds made available to us at the IPO and the returns from this investment are beginning to filter through. The nature of our contracts and our conservative revenue recognition policies means the full benefits will be felt in 2015-16.

 

I would like to join John O'Hara in thanking our hard-working employees, without whom none of this would be possible.  

 

 

Charles Clark

 

Chief Executive Officer

 

Consolidated Statement of Comprehensive Income

for the year ended 30 April 2014

 

 

	Notes				2014 Unaudited £'000		2013 Audited £'000
Revenue	3				2,066,041		1,835,219
Cost of sales					(349,072)		(242,135)
GROSS PROFIT					1,716,969		1,593,084
Other operating income					34,615		7,333
Administrative expenses - excluding exceptional items					(4,638,104)		(3,273,687)
Administrative expenses - exceptional item	6				(223,460)		-
Administrative expenses					(4,861,564)		(3,273,687)
OPERATING LOSS					(3,109,980)		(1,673,270)
Finance costs	5				(1,753)		-
LOSS BEFORE INCOME TAX	7				(3,111,733)		(1,673,270)
Income tax	8				148,510		243,556
LOSS FOR THE YEAR					(2,963,223)		(1,429,714)
Other comprehensive income					-		-
TOTAL COMPREHENSIVE INCOME					(2,963,223)		(1,429,714)

 

 

 

 

 

LOSS PER SHARE
					Pence		Pence
Basic and diluted  loss per share: Ordinary shareholders			9		7.43		3.92

 

 

 

 

 

 

 

 

Consolidated Statement of Financial Position

as at 30 April 2014

 

	Notes		2014 Unaudited £'000		2013 Audited £'000
ASSETS
NON-CURRENT ASSETS
Intangible assets			17,019		519
Property, plant and equipment			29,016		43,167
			46,035		43,686
CURRENT ASSETS
Trade and other receivables	10		714,091		414,681
Corporation tax receivable			147,643		131,265
Cash and cash equivalents			9,019,458		77,221
			9,881,192		623,167
TOTAL ASSETS			9,927,227		666,853
LIABILITIES
NON-CURRENT LIABILITIES
Deferred tax			(4,134)		(5,001)
CURRENT LIABILITIES Trade and other payables	11		(1,914,588)		(1,269,530)
Financial liabilities - borrowings			(200,000)		(325,000)
			(2,114,588)		(1,594,530)
TOTAL LIABILITIES			(2,118,722)		(1,599,531)
NET ASSETS/(LIABILITIES)			7,808,505		(932,678)
EQUITY
Called up share capital			377,029		457
Share premium			8,515,773		2,650,001
Accumulated loss			(6,217,359)		(3,583,136)
Merger reserve			5,133,062		-
TOTAL EQUITY			7,808,505		(932,678)

 

 

 

Unaudited

Consolidated Statement of Changes in Equity

for the year ended 30 April 2014

 

 

		Called up share capital £		Accumulated loss £		Share premium £			Merger reserve £		Total equity £
Balance at 30 April 2013		457		(3,583,136)		2,650,001					(932,678)
Issue of share capital (28/11 and 30/1)		97		-		2,837,311			-		2,837,408
Issue of share capital (23/4)		10		-		-			-		10
Offset of share issue costs		-		-		(129,297)			-		(129,297)
Share based payment transactions		-		329,000		-			-		329,000
Reorganisation of group		(564)		-		(5,358,015)			-		(5,358,579)
Issue of share capital (23/4)		225,514		-		-			-		225,514
Issue of share capital (29/4)		151,515		-		9,848,485			-		10,000,000
Offset of share issue costs		-		-		(1,332,712)			-		(1,332,712)
Reorganisation of group		-		-		-			5,133,062		5,133,062
Total comprehensive income		-		(2,963,223)		-			-		(2,963,223)
Balance at 30 April 2014		377,029		(6,217,359)		8,515,773			5,133,062		7,808,505

 

 

In 2014 specific professional advisory costs of £1,332,712 relating to the Initial Public Offering have been allocated against the share premium reserve and recognised directly in equity.

 

 

 

 

 

 

 

              Consolidated Statement of Cash Flows

for the year ended 30 April 2014

 

	Notes			2014 Unaudited £'000			2013 Audited £'000
Cash flows used in operating activities
Cash generated from operations	See below			(2,694,552)			(1,381,717)
Finance costs paid	5			(1,753)			-
Corporation tax received				131,235			135,085
Net cash used in operating activities				(2,565,070)			(1,246,632)
Cash flows used in investing activities
Purchase of intangible fixed assets				(19,450)			-
Purchase of property, plant and equipment				(23,678)			(69,534)
Net cash used in investing activities				(43,128)			(69,534)
Cash flows generated from financing activities
New loans in year				200,000			325,000
Net proceeds from share issuance				11,350,435			-
Net cash generated from financing activities				11,550,435			325,000
Increase/(decrease) in cash and cash equivalents				8,942,237			(991,166)
Cash and cash equivalents at beginning of period				77,221			1,068,387
Cash and cash equivalents at end of period				9,019,458			77,221

 

 

RECONCILIATION OF LOSS BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS

 

		20144       Unaudited £'000			2013 Audited £'000
Loss before income tax		(3,111,733)			(1,673,270)
Depreciation charges		37,829			41,586
Loss on disposal of fixed assets		-			29,979
Amortisation charges		2,950			171
Share based payment transactions		329,000			-
Finance costs		1,753			-
		(2,740,201)			(1,601,534)
(Increase)/decrease in trade and other receivables		(299,410)			15,837
Increase in trade and other payables		345,059			203,980
Cash generated from operations		(2,694,552)			(1,381,717)

 

 

 

      Notes to the Unaudited Consolidated Financial Statements

for the Year Ended 30 April 2014

 

1.   GENERAL INFORMATION

 

      Rosslyn Data Technologies Limited (the 'Company') was incorporated on 7 February 2014 and on 24 April 2014 converted from a private limited company to Rosslyn Data Technologies plc.

 

      Rosslyn Data Technologies plc (the 'Company') is a company domiciled in the UK. The address of the registered office is: 25 Eccleston Place, London, SW1W 9NF. The Company is the ultimate parent company of Rosslyn Analytics Limited, a company incorporated in the UK, and the ultimate parent company of Rosslyn Analytics, Inc., a company incorporated in the United States of America (collectively, the 'Group').  The Group's principal activity is the provision of data analytics using a proprietary form.

 

      The principal accounting policies adopted in the preparation of the consolidated financial information are set out below. The policies have been consistently applied to all the years presented.

 

2.   ACCOUNTING POLICIES

 

The preliminary financial information does not constitute statutory financial statements within the meaning of section 434 of the Companies Act 2006 and has not been audited. Comparative figures in the preliminary financial information for the year ended 30 April 2013 have been taken from the Rosslyn Analytics Limited Group audited statutory financial statements on which the Group's auditors, PwC LLP, expressed an unqualified opinion.

Basis of preparation

      The Group's consolidated financial statements have been prepared and approved by the directors in accordance with International Financial Reporting Standards (as adopted by the EU) and IFRIC interpretations and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.  The financial statements have been prepared under the historical cost convention.

 

      Going concern

Notwithstanding that the Group has made losses in the current year , these financial statements have been prepared on the going concern basis, which assumes that the Group will continue to be able to meet its liabilities as they fall due for the foreseeable future. The Group has raised additional funds of £10m (£8.7m net) through an Offering and Admission of its shares to AIM.  After reviewing the Group's cash flow forecasts and budgets and making appropriate enquiries the Directors believe that the Group, following the receipt of the net proceeds of the placing, has sufficient working capital to meet its present requirements for at least the next twelve months from the date of this consolidated financial information.

 

      Basis of consolidation

      On 23 April 2014 the Company acquired the Group's previous parent company, Rosslyn Analytics Limited, via a share for share exchange whereby every Ordinary share and A Preference share in Rosslyn Analytics Limited was exchanged for 8 Ordinary shares and 8 A Preference shares respectively in Rosslyn Data Technologies Limited (prior to the conversion to a plc on 24 April 2014). On 24 April 2014 the A Preference shares were converted into Ordinary shares on a one for one basis.

 

      On 29 April 2014, Rosslyn Data Technologies plc's shares were admitted to trading on AIM.

 

      Accordingly these financial statements are presented in the name of the new legal parent, Rosslyn Data Technologies plc, but are a continuation of the financial statements of Rosslyn Analytics Limited.

 

 

      Subsidiaries

      Subsidiaries are entities controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable or convertible are taken into account. Control is generally accompanied by a shareholding of more than one half of the voting rights. The financial information of subsidiaries is included in the consolidated financial information from the date that control commences until the date that control ceases.

 

Transactions eliminated on consolidation

      Intragroup balances, and any gains and losses or income and expenses arising from intragroup transactions, are eliminated in preparing the consolidated financial information.

 

Judgements and estimates

The preparation of the financial statements requires management to exercise judgement in applying the Group's accounting policies. It also requires the use of estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

 

On an ongoing basis the following areas involve a higher degree of judgement or complexity:

 

·     Valuation of share based payments

 

·     Recognition of deferred tax assets

 

Revenue recognition

Revenue is measured at the fair value of consideration received or receivable and represents amounts for services provided to third parties in the normal course of business during the year, net of value added tax and results from the principal activities of the Group.

       

        Each element of revenue (described below) is recognised only when:

 

·     Provision of the services has occurred;

·     The consideration receivable is fixed or determinable; and

·     Collection of the amount due from the customer is reasonably assured.

 

(i)   Implementation and set-up fees in connection with the deployment and customisation of the Group's proprietary solutions are recognised rateably over the term of the related customer contract.

 

(ii)   Subscription revenue from data analytics services is recognised rateably over the term of the related customer contract.

 

(iii)  Any revenue arising from consultancy work is recognised in the statement of comprehensive income as such services are delivered.

 

Services that have been delivered at the end of a financial period but which have not been invoiced at that time are recognised as revenue in the statement of comprehensive income and shown within prepayments and accrued revenue in the statement of financial position.

 

Advance payments from customers or advance invoicing at the end of a financial period are included within accruals and deferred income in the statement of financial position. Such amounts are recognised in the statement of comprehensive income as the services are provided to the customer in accordance with points (i) to (iii) as set out above.

 

 

Cost of sales

Cost of sales includes utilised data storage costs proportionate to the amount utilised to service customers.  Cost of sales does not include salaries and wages.

 

Intangible assets

Website development costs

Costs that are incurred during the development of significant and separately identifiable website development costs for the use in the business are capitalised where the cost is integral to the generation of future economic benefits. Any costs which do not meet the above criteria are taken to the income statement in the period in which they occur.

 

Amortisation

Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful economic life of the asset as follows:

 

Website development costs - 50% straight line. Previously website costs were amortised on a 25% straight line basis. The change in rate makes no material difference.

 

Property, plant and equipment

Items of property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use. When parts of an item of property, plant and equipment have different useful lives, those components are accounted for as separate items of property, plant and equipment.

 

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.

 

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the income statements.

 

Depreciation

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

 

Computer equipment   - 18 to 36 months   straight line

 

 

Taxation

Current taxes are based on the results shown in the financial statements and are calculated according to local tax rules, using tax rates enacted or substantially enacted by the statement of financial position date.

 

Deferred tax is provided using the statement of financial position liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

 

Temporary differences are not provided for the initial recognition of other assets or liabilities that affect neither accounting nor taxable profit. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantially enacted at the statement of financial position date.

 

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

 

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

 

Deferred income tax is provided on temporary differences arising on investments in subsidiaries, except for deferred income tax liability where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.

                                                                                                                         

      Grants receivable

Grant income is recognised when there is: 1) entitlement to the grant, 2) virtual certainty that it will be received and 3) sufficient measurability of the amount.

 

 

Foreign currencies

The functional currency of the Company is pounds sterling because that is the currency of the primary economic environment in which the Company operates. The Company's presentational currency is pounds sterling.

 

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the statement of financial position date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

 

Group companies

The results and financial position of all the Group entities (none of which has the currency of a hyperinflation economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

 

- assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position;

- income and expenses for each income statement presented are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and

-       all resulting exchange differences are recognised in other comprehensive income.

 

 

The following exchange rates were applied for £1 at each year end:

 

 

		2014	2013
United States Dollars		1.68	1.62
Euros		1.21	1.19

 

 

 

Retirement benefits

The Group operates a defined contribution scheme. Contributions payable to the Group's pension scheme are charged to the income statement in the period to which they relate.

 

Financial instruments

Financial instruments are classified and accounted for, according to the substance of the contractual agreement, as either financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities.

 

Cash and cash equivalents

Cash and cash equivalents are defined as cash in hand, demand deposits and short term highly liquid investments readily convertible to known amounts of cash and subject to insignificant risk to changes in value.

 

Trade and other receivables

Trade receivables are stated at their original invoiced value, as the interest that would be recognised from discounting future cash receipts over the expected credit period is not considered to be material. Trade receivables are reduced by appropriate allowances for estimated irrecoverable amounts.

 

Trade and other payables

Trade payables are stated at their original invoiced value, as the interest that would be recognised from discounting future cash payments over the expected payment period is not considered to be material.

 

Financial assets

Classification

The Group classifies its financial assets as loans and receivables.  Management determines the classification of its financial assets at initial recognition.

 

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that arise principally through the provision of services to customers. They are initially recognised at fair value, and are subsequently stated at amortised cost using the effective interest method. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. Loans and receivables comprise mainly cash and cash equivalents and trade and other receivables.

 

Impairment of financial assets

Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties on the part of the counterparty or default or significant delay in payment) that the Group will be unable to collect all of the amounts due under the terms receivable, the amount of such a provision being the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable.

 

For trade receivables, which are reported net, such provisions are recorded in a separate provision account with the loss being recognised within other operating costs in the income statement. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.

 

 

Share capital and share premium

Ordinary shares and A Preference shares are classified as equity. A Preference shares have been deemed equity as they are non-redeemable and do not pay a fixed dividend. Share premium is the amount subscribed for share capital in excess of nominal value less any costs directly attributable to the issue of new shares.

 

Incremental costs directly attributable to the issue ofnew shares are shown in share premiumas a deduction from the proceeds.

 

Share-based payments

The Group operates an equity-settled, share-based compensation plan, the Enterprise Management Incentive Plan (EMI). The fair value of the employeeservices received in exchange for the grant of the options is recognised as an expense.The total amount to be expensedover the vesting period is determined by reference to the fair value of the optionsgranted calculated using an appropriate option pricing model. Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. At each statementof financial positiondate, the entity revises its estimates of the number of options that are expected to vest. Options issued under the scheme to non-executive directors and other individuals that are not employees of the UK Company follow the EMI rules but are considered non-qualifying EMI options for tax purposes.

 

Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortised cost; any difference betweenthe proceeds (net of transaction costs) and the redemption value is recognised in the income statementover the period of the borrowings using the effectiveinterest method.

 

Provisions

A provision is recognised in the statement of financial position when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are discounted at a rate that reflects current market assessments of the time value of money and, when appropriate, the risks specific to the liability. The increase in the provision due to passage of time is recognised in finance costs.

 

Net finance costs

Finance costs

Finance costs comprise interestpayable on borrowings and direct issue costs.

 

Finance income

Finance income comprises interest receivable on funds invested. Interest income is recognised in the income statement as it accrues using the effective interest method.

 

Convertible loan stock

The convertible loan stock, a compound financial instrument, can be converted to share capital at the option of the holder, and the number of shares to be issued does not vary with changes in their fair value.

 

The liability component of a compound financial instrument is recognised initially at the fair value of a similar liability that does not have an equity conversion option. The equity component is recognised initially at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts. Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortised cost using the effective interest method. The equity component of a compound financial instrument is not re-measured subsequent to initial recognition except on conversion or expiry.  The Directors have not split out the equity component as it is not material.

 

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period.

 

 

New standards, amendments and interpretations

Standards, amendments and interpretations effective and adopted by the Group:

The accounting policies adopted in the presentation of the historical financial information reflect the adoption of the following new standards as of 1 May 2013:

 

The following standards were adopted during the year:

-       Annual improvements 2011 & 2013 (effective 1 January 2013)

-       IFRS 7 'Financial Instruments: Disclosures' (effective 1 January 2013)

-       IAS 19 'Employee benefits' (effective 1 January 2013)

-       IAS 27 'Separate financial statements' (effective 1 January 2013)

-       IAS 28 'Investments in associates and joint ventures' (effective 1 January 2013)

           None of these standards have had any significant impact on the Group's financial statements.

 

The following new Standards, amendmentsand interpretations which are not effective or early adoptedby the Group:

-       IAS 16 (amended 2014), 'Property, plant and Equipment' (effective 1 January 2016)

-       IAS 19 (amended 2013), 'Employee benefits' (effective 1 July 2014)

-       IAS 27 (amended 2012), 'Separate financial statements' (effective 1 January 2014)

-       IAS 32 (amendment), 'Financial instruments - Presentation' on asset and liability offsetting (effective 1 January 2014)

-       IAS 36 (amendment), 'Impairment of assets' (effective 1 January 2014)

-       IAS 38 (amendment), 'Intangible assets' (effective 1 July 2016)

-       IAS 39 (amendment), 'Financial instruments: Recognition and measurement' (effective 1 January 2014)

-       IFRS 9 'Financial instruments', on 'Classification and measurement' (effective 1 January 2018)

-       IFRS 10 'Consolidated financial statements' (effective 1 January 2014)

-       IFRS 11 'Joint arrangements' (effective 1 January 2014)

-       IFRS 12 'Disclosure of interests in other entities' (effective 1 January 2014)

-       IFRS 13 'Fair value measurement' (effective 1 January 2014)

-       IFRS 14 'Regulatory Deferral Accounts' (effective 1 January 2016)

-       IFRS 15 'Revenue from Contracts with Customers' (effective 1 January 2017)

-       Annual improvements 2011 & 2013 (effective 1 July 2014)

       The Directors do not expect these standards, amendments and interpretations to have any significant impact on the Group's financial statements.

 

Segment reporting

Operating segments are reported in a manner consistent with the internalmanagement reporting of the business to the Executive Directors' which has been identified as the Chief Operating Decision Maker. 

 

 

3.           SEGMENTAL REPORTING

 

Management has determined the operating segments based on the operating reports reviewed by the Executive Directors that are used to assess both performance and strategic decisions. Management has identified that the Executive Directors are the chief operating decision maker in accordance with the requirements of IFRS 8 'Operating segments'.

 

All segment revenue, loss before taxation, assets and liabilities are attributable to the principal activity of the Group being the provision of data analytics using a proprietary form and other related services.

 

	Year ended 30 April 2014
	UK		USA		Total
	£		£		£
Income
Total revenue	1,893,589		172,452		2,066,041
Total revenue from external customers	1,893,589		172,452		2,066,041
EBITDA	(2,492,360)		(353,381)		(2,845,741)
Depreciation	(37,829)		-		(37,829)
Amortisation	(2,950)		-		(2,950)
Exceptional items	(223,460)		-		(223,460)
Operating loss	(2,756,599)		(353,381)		(3,109,980)
Finance cost	(1,753)		-		(1,753)
Loss before income tax	(2,758,352)		(353,381)		(3,111,733)
Total assets	9,733,072		194,155		9,927,227
Total liabilities	(1,883,442)		(235,280)		(2,1189,722)
Capital expenditure during the year
Intangible assets	19,449		-		19,449
Property, plant and equipment	23,678		-		23,678

 

 

 

 

 

	Year ended 30 April 2013
	UK		USA		Total
	£		£		£
Income
Total revenue	1,835,219		-		1,835,219
Total revenue from external customers	1,835,219		-		1,835,219
EBITDA	(1,497,351)		(104,183)		(1,601,534)
Depreciation	(41,586)		-		(41,586)
Amortisation	(171)		-		(171)
Loss on disposal of fixed assets	(29,979)		-		(29,979)
Operating loss	(1,569,087)		(104,183)		(1,673,270)
Loss before income tax	(1,569,087)		(104,183)		(1,673,270)
Total assets	666,853		-		666,853
Total liabilities	(1,454,963)		(144,568)		(1,599,531)
Capital expenditure during the period
Intangible assets	-		-		-
Property, plant and equipment	69,534		-		69,534

 

The USA subsidiary liabilities are to the parent company so these eliminate on consolidation.

 

 

4.   EMPLOYEES AND DIRECTORS

 

			Year ended 30.4.14		Year ended 30.4.13
			£		£
Wages and salaries			2,226,553		1,734,716
Social security costs			193,300		189,911
Other pension costs			34,012		24,329
Share based payment expense - directors			196,500		-
Share based payment expense - staff			132,500		-
			2,782,865		1,948,956

 

The average monthly number of employees during the years was as follows:

 

			Year ended 30.4.14		Year ended 30.4.13
Management			4		2
Research and Development			14		12
Sales and Marketing			23		18
			41		32

 

 

 

 

5.   NET FINANCE COSTS

			Year ended 30.4.14		Year ended 30.4.13
			£		£
Finance income:
Interest receivable			-		-
Finance costs:
Loan interest paid			1,753		-
Net finance costs			1,753		-

 

 

 

6.   EXCEPTIONAL ITEMS

 

During the year settlement and legal costs of £223,460 (2013: £nil) were incurred in respect of an employee related matter. This matter is resolved in full and no further costs are expected.

 

 

 

 

7.   LOSS BEFORE INCOME TAX

The loss before income tax is stated after charging/(crediting):

 

			Year ended 30.4.14		Year ended 30.4.13
			£		£
Share based payments			329,000		-
Grants receivable			(34,615)		-
Rent receivable			-		(7,333)
Depreciation - owned assets			37,829		41,586
Loss on disposal of fixed assets			-		29,979
Website development amortisation			2,950		171
Auditors' remuneration			55,000		20,000
Auditors' remuneration for non-audit services - tax advisory Foreign exchange losses/(gains)			30,000 8,375		- (2,918)
Operating lease rentals			60,000		75,750

 

In addition to the amounts disclosed above £300,000 was paid to the auditors in relation to the AIM listing. This amount has been offset against share premium. The overall fees paid to the auditors were significantly higher this year, because they were used to perform the reporting accountant role given their knowledge of the Group; given the one-off nature of this transaction the directors do not consider that this impacts their independence.

 

8.   INCOME TAX

Analysis of income tax

 

			Year ended 30.4.14		Year ended 30.4.13
			£		£
Current tax:
Corporation tax on losses of the year			(147,643)		(241,350)
Deferred tax:
Origination and reversal of timing differences			(867)		(2,206)
Total tax			(148,510)		(243,556)

 

Factors affecting the tax credit

The differences between the total current tax shown above and the amount calculated applying the standard rate of UK corporation tax to the loss before tax are explained below:

			Year ended 30.4.14		Year ended 30.4.13
			£		£
Loss on ordinary activities before tax			(3,111,733)		(1,673,270)
Loss on ordinary activities multiplied by the standard rate of corporation tax in the UK of 22.83% (2013: 23.92%)			(710,407)		(400,246)
Effects of:
Disallowable expenses			4,436		4,587
Unrecognised deferred tax asset on losses			705,971		395,659
Research and development tax credit			(147,643)		(241,350)
Deferred tax			(867)		(2,206)
Total tax			(148,510)		(243,556)

 

 

At as 30 April 2014 the Group had an unrecognised deferred tax asset of £1,504,932 (2013: £798,961) resulting from trading losses during the year and accumulated losses. Actual experience has not recognised this as an asset in the Statement of Financial Position due to the uncertainty in the timing of when it is probable that future taxable profit will be available which the unused tax losses can be utilised.

 

Finance Act 2013, which was substantively enacted on 17 July 2013, includes legislation reducing the main UK corporation tax rate from 24% to 23%, effective from 1 April 2013. A further reduction to 21% is effective from 1 April 2014. The deferred tax balances reflect this reduction.

 

In addition to the changes in rates of Corporation tax disclosed above, further changes to the UK Corporation tax rates were announced in the 2012 Autumn Statement and the March 2013 Budget. These include further reductions to the main rate to reduce to 21% from 1 April 2014 and to 20% from 1 April 2015.

 

9.   LOSS PER SHARE

 

Basic earnings per share is calculated by dividing the net profit for the year attributable to Ordinary shareholders by the weighted average number of Ordinary shares outstanding during the year.

 

Diluted earnings per share is calculated by dividing the net profit for the year attributable to Ordinary shareholders by the weighted average number of Ordinary shares outstanding during the year plus the weighted average number of Ordinary shares that would be issued on the conversion of all dilutive potential Ordinary shares into Ordinary shares.

 

							Year  ended 30.4.14		Year  ended 30.4.13
Loss for the year attributable to the owners of the parent							2,963,223		1,429,714
Weighted average number of Ordinary shares							39,885,226		36,518,840

 

							Pence		Pence
Basic  and diluted loss per share: Ordinary shareholders							7.43		3.92

 

Earnings per share has been calculated on the basis of the capital restructuring immediately prior to the IPO in accordance with IAS 33.

 

 

10. TRADE AND OTHER RECEIVABLES

			2014		2013
			£		£
Amounts falling due within one year:
Trade receivables due but not past due			272,770		179,776
Trade receivables past due			226,120		50,946
Impairment provision			(48,000)		(12,000)
Trade receivables - net			450,890		218,722
Other receivables			18,000		18,000
Prepayments and accrued revenue			176,548		177,959
VAT			68,653		-
			714,091		414,681

 

Included within the trade receivables past due above are amounts which are not impaired and aged as follows:

			2014		2013
			£		£
Overdue by:
Up to 30 days			85,228		18,546
30 - 60 days			68,517		6,000
60 - 90 days			14,655		14,400
Over 90 days			9,720		-
			178,120		38,946

 

Trade and other receivables are all current and any fair value difference is not material. Trade receivables are considered past due once they have passed their contracted due date. Trade receivables are reviewed for impairment if they are past due beyond 90 days.

 

The below movement on the provision for impairment of trade receivables is as follows:

			2014		2013
			£		£
At start of year			12,000		-
Provision for receivables impairment			36,000		12,000
At end of year			48,000		12,000

 

The provision for impaired receivables has been included in administrative expenses.

 

The below represents trade receivables held in foreign currencies at the statement of financial position date:

 

			2014		2013
			£		£
United States Dollars			180,491		43,385
			180,491		43,385

 

 

 

11.   TRADE AND OTHER PAYABLES

 

				2014		2013
				£		£
Current:
Trade payables				892,310		382,827
Social security and other taxes				48,219		349,714
Other payables				9,000		8,560
Accruals and deferred revenue				965,059		528,429
				1,914,588		1,269,530

                       

Included within other payables at the statement of financial position date, is an amount of £nil (2013: £2,000) due by the Group in relation to a defined contribution pension scheme.

 

Included with accruals and deferred revenue is an amount of £522,142 (2013: £444,988) in relation to deferred revenue.

 

 

 

Ends